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2011 (4) TMI 1517
Issues Involved:
1. Whether the suit land is in Survey No. 129/55 as claimed by the plaintiffs or in Survey No. 129/64 as claimed by the defendants.
2. Whether the defendants have perfected their title in respect of the suit land by adverse possession.
3. What is the relief that the plaintiffs are entitled to.
4. Whether the suit was barred by limitation under Article 65 of the Limitation Act, 1963.
5. Whether the absence of a specific prayer for a decree of possession against Defendant No. 2 affects the suit.
Summary:
Issue 1: Location of Suit Land
The High Court framed the issue of whether the suit land is in Survey No. 129/55 as claimed by the plaintiffs or in Survey No. 129/64 as claimed by the defendants. The High Court held that the suit property is situated at Kachcha Tattikhana Sivar village Saikpet, Hyderabad, and not in Survey No. 129/64.
Issue 2: Adverse Possession
The High Court found that the defendants failed to establish their plea of adverse possession. The defendants claimed that Razia Begum, the predecessor-in-title, had perfected her title by adverse possession, but the High Court did not accept this claim.
Issue 3: Relief to Plaintiffs
The High Court concluded that the plaintiffs are entitled to a decree for possession of the suit land. However, this decision was challenged on the grounds that no specific prayer for possession was made against Defendant No. 2 (the predecessor-in-title of the appellants).
Issue 4: Limitation
The appellants argued that the suit was barred by limitation u/s 65 of the Limitation Act, 1963, and that they had perfected their title by adverse possession. The High Court did not accept this argument, but the Supreme Court found merit in the appellants' claim of long-term possession.
Issue 5: Absence of Specific Prayer Against Defendant No. 2
The Supreme Court noted that there was no specific prayer for a decree of possession against Defendant No. 2 in either the original or amended plaint. The Court emphasized that under Order VII, Rule 5 and Rule 7 of the Code of Civil Procedure, the plaint must specifically state the relief claimed against each defendant. The absence of such a prayer against Defendant No. 2 meant that no relief could be granted against the appellants.
Conclusion:
The Supreme Court found that the High Court's judgment was not sustainable in law due to the absence of a specific prayer for possession against Defendant No. 2. The Court also noted the long-term possession of the appellants and their predecessors. Consequently, the Supreme Court set aside the High Court's judgment and affirmed the Trial Court's decision, allowing the appeal with no order as to costs.
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2011 (4) TMI 1516
Issues Involved:1. Allowability of the claim for bad debts or alternatively as business loss. 2. Whether the conditions of section 36(2) of the Income Tax Act, 1961 are fulfilled. Summary:Issue 1: Allowability of the claim for bad debts or alternatively as business lossThe assessee, engaged in share trading, claimed a business loss of Rs. 50,29,896 due to an outstanding balance from M/s. Dhauladhar Investments P. Ltd. The amount was settled for Rs. 20,00,000, and the remaining Rs. 50,29,896 was written off as business loss. The Assessing Officer disallowed the claim, stating that the share broking business had been discontinued in A.Y. 1997-98 and thus, the loss could not be allowed. The first appellate authority upheld this view, emphasizing that the debt pertained to a discontinued business. The Tribunal, however, examined the facts and relevant case laws, concluding that the assessee's business of trading in shares was a composite business with two limbs: trading on own account and trading on behalf of third parties. The Tribunal held that discontinuing trading on behalf of third parties did not constitute discontinuance of the entire business. The test of unity of control and common management was fulfilled, and thus, the claim of bad debts from the brokering business was allowed. Issue 2: Whether the conditions of section 36(2) of the Income Tax Act, 1961 are fulfilledThe first appellate authority alternatively held that the conditions of section 36(2) were not fulfilled. However, the Tribunal noted that this issue was already decided in favor of the assessee by the Special Bench of the Tribunal in the assessee's own case for an earlier assessment year. Respectfully following the same, the Tribunal set aside the order of the Commissioner (Appeals) and allowed the ground of appeal. Conclusion:The Tribunal allowed the assessee's appeal, recognizing the business loss claim and confirming that the conditions of section 36(2) were met. Order pronounced in the open Court on 27.5.2011
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2011 (4) TMI 1515
Issues involved: Assessment of a closely held company for assessment year 2000-01, disallowance of expenditure u/s 14A, genuineness of loans, and validity of assessment order after company's name was struck off from the register of Registrar of Companies.
Assessment and Disallowance: The assessment of the company was done u/s 147 r.w.s 143(3) of the Act, resulting in various additions to the total income including an increase in share capital, unsecured loan, interest, service charges, investments, electronic transfer charges, office maintenance, and disallowance u/s 14A. The ld. CIT(A) provided partial relief to the assessee, who further challenged the assessment order, claiming it to be bad in law due to the company's name being struck off from the register of companies before the assessment order was passed.
Validity of Assessment Order: The additional ground raised by the assessee questioned the validity of the assessment order, arguing that assessing a non-existing entity renders the assessment a nullity. Reference was made to a decision by the Delhi Bench of the ITAT in a similar case. The Revenue disputed this contention, stating that the company's name was rectified through a Gazette Notification after the assessment order was passed. The Tribunal found the facts unclear and directed the Assessing Officer to verify if the company was in existence at the relevant time. If found non-existent, the assessment order would be invalid, otherwise, further proceedings could continue.
Conclusion: Both appeals were allowed for statistical purposes, and the matter was remanded to the Assessing Officer for verification of the company's existence at the time of assessment. The Tribunal emphasized that if the company was not in existence, the assessment order would be null and void, and no further action could be taken.
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2011 (4) TMI 1514
Issues involved: Appeal against the judgment of the Income Tax Appellate Tribunal regarding disallowance of job work payment.
Issue [A]: Tribunal's deletion of disallowance of Rs. 72,01,508 made by the Assessing Officer.
The assessee, engaged in manufacturing and exporting fabrics, claimed job work charges during the relevant Assessment Year. The Assessing Officer disallowed a portion of the claimed amount as the job work was not proven to have been done by M/s. Vikram Job Works. The CIT [A] upheld this decision, but the Tribunal, after reviewing the evidence, found that the assessee had sufficiently proven the expenditure. The Tribunal noted the evidence provided by the assessee, including job charges invoices, bank statements, TDS certificates, and confirmation from the job party. Relying on precedent, the Tribunal held that the Assessing Officer's disallowance was unfounded, especially considering the payments were made through account payee cheques.
Issue [B]: Tribunal's application of precedent without comparing facts of different cases.
The Tribunal applied the decisions of previous cases without comparing the specific facts of those cases with the present one. However, the Tribunal's decision was based on the evidence presented by the assessee, which demonstrated the genuineness of the job work payments made through legitimate channels.
Issue [C]: Tribunal's conclusion on the burden of proof for claiming deduction under Section 37(1) of the Income Tax Act.
The Tribunal concluded that the assessee had discharged the burden of proof to claim deduction under Section 37(1) by providing substantial evidence, including invoices, bank statements, TDS certificates, and confirmation from the job party. The Tribunal found no fault in the assessee's documentation and upheld the claim.
Issue [D]: Alleged error in the Tribunal's reversal of the Commissioner of Income Tax [Appeals] II's order.
The Tribunal's decision to reverse the order of the Commissioner of Income Tax [Appeals] II was based on the evidence presented by the assessee, which the Tribunal found to be sufficient to support the claim for job work expenses. The Tribunal's decision was in line with established legal principles and the evidence on record.
Issue [E]: Allegation of the Tribunal's order being contrary to the evidence and material on record.
The Tribunal's decision was supported by the evidence provided by the assessee, which included invoices, bank statements, TDS certificates, and confirmation from the job party. The Tribunal found no basis for the Assessing Officer's presumption that the payments made for job work expenses might have been reverted back to the assessee, especially since the payments were made through legitimate means. The Tribunal's decision was deemed appropriate based on the evidence and legal precedents.
In conclusion, the High Court upheld the Tribunal's decision to delete the disallowance of job work payment, emphasizing the sufficiency of evidence provided by the assessee to support the claim.
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2011 (4) TMI 1513
Issues Involved:
1. Legality of the High Court's decision to quash the enhanced price demands.
2. Authority of the Karnataka Industrial Areas Development Board (KIADB) to revise the tentative price.
3. Compliance with statutory provisions and regulations in price fixation.
4. Judicial review of price fixation by the Board.
Summary:
Issue 1: Legality of the High Court's Decision
The Supreme Court examined the appeals against the High Court of Karnataka's decision, which quashed the enhanced price demands made by the Karnataka Industrial Areas Development Board (KIADB). The High Court had allowed the writ appeal, setting aside the earlier judgment that dismissed the writ petition filed by the Respondents.
Issue 2: Authority to Revise Tentative Price
The Appellants argued that Clause 7(b) of the lease-cum-sale agreement empowered them to revise the tentative price. They contended that the final price was fixed considering the cost of acquisition, development expenditure, statutory charges, and interest. The Respondents, however, claimed that the final price was arbitrary, unreasonable, and contrary to legitimate expectations.
Issue 3: Compliance with Statutory Provisions
The Respondents argued that the price fixation should comply with the Karnataka Industrial Area Development Act, 1966, and the Karnataka Industrial Area Development Board Regulations, 1969. They contended that Clauses 7(a) and 7(b) were introduced without amending the applicable regulations or Form IV, making the final price fixation without statutory basis.
Issue 4: Judicial Review of Price Fixation
The Supreme Court noted that price fixation is an executive policy and generally beyond the scope of judicial review. However, it emphasized that the power of price fixation must be exercised rationally and reasonably, without arbitrariness. The Court observed that the High Court acted within its jurisdiction under Article 226 of the Constitution of India to ensure that the Board did not act arbitrarily.
Conclusion
The Supreme Court upheld the High Court's decision, concluding that the fixation of the final price by the Board was arbitrary and violated Article 14 of the Constitution of India. The appeals were dismissed, affirming that the Board must act fairly and reasonably in exercising its discretionary powers.
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2011 (4) TMI 1512
Issues involved: Appeal against orders related to disallowance of discount/rebate and penalty for assessment year 2002-03.
Dispute over disallowance of discount/rebate:
The assessee, a company engaged in exporting engineering goods, claimed deduction under u/s 80HHC of the Income Tax Act, 1961. The Assessing Officer disallowed a payment of Rs. 2,50,563, considering it a kick-back rather than a legitimate business expense. The assessee contended that the payment was a discount/rebate to the buyer and was a normal business expenditure. The Tribunal found that the payment was contractual and not illicit, distinguishing it from a similar case involving the “Food for Oil” program. As the payment was returned to the buyer, the disallowance was overturned, and the appeal was partly allowed.
Penalty imposition challenge:
The penalty imposed under section 271(1)(c) was based on the disallowance, which was subsequently overturned. Therefore, the Tribunal quashed the penalty, leading to the allowance of the appeal.
Conclusion:
The Tribunal allowed the appeal against the disallowance of discount/rebate and the consequent penalty imposition, emphasizing the contractual nature of the payment and the lack of evidence supporting it being illicit. The orders dated 15th January 2009 and 23rd July 2009 were set aside, and the appeals were partly and fully allowed, respectively.
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2011 (4) TMI 1511
Issues Involved:
1. Powers of the Provisional Liquidator to sell assets.
2. Authority of the Court to order the sale of assets on application by a secured creditor.
3. Whether the Provisional Liquidator's powers are restricted by the Court's order.
4. Rights of secured creditors in liquidation proceedings.
5. Status of IREDA's rights after surrendering possession to the Official Liquidator.
6. Inclusion of NHSM's assets in the sale.
7. Sundaram Finance Limited's right to recover leased machinery.
8. Claims of BHEL and Walchandnagar Industries Limited.
9. Valuation and upset price of ASM's assets.
Detailed Analysis:
1. Powers of the Provisional Liquidator to Sell Assets:
The Court held that under Section 450(3) of the Companies Act, the Provisional Liquidator has the same powers as the Official Liquidator unless restricted by the Court. The order dated 22.07.2005 did not limit the Provisional Liquidator's powers, thus authorizing the sale of ASM's assets under Section 457(1)(c).
2. Authority of the Court to Order Sale of Assets on Application by a Secured Creditor:
The Court affirmed its power to order the sale of assets through the Official Liquidator on the application of a secured creditor like IREDA. This is consistent with the Court's duty to protect and realize the company's assets for equitable distribution among creditors.
3. Whether the Provisional Liquidator's Powers are Restricted by the Court's Order:
The Court clarified that the Provisional Liquidator's powers were not restricted by the order of 22.07.2005, thus allowing the sale of assets. The Court's distinction between its power to order a sale and the Liquidator's power to execute it was upheld.
4. Rights of Secured Creditors in Liquidation Proceedings:
The Court ruled that IREDA, a secured creditor, did not relinquish its security by handing over possession to the Official Liquidator under Court orders. IREDA retained its rights and could seek the sale of assets through the Company Court while standing outside the winding-up proceedings, consistent with Sections 529 and 529-A of the Companies Act.
5. Status of IREDA's Rights after Surrendering Possession to the Official Liquidator:
The Court found that IREDA's act of handing over possession to the Official Liquidator did not constitute a relinquishment of its security rights. IREDA's continued assertion of its secured creditor status and its application for asset sale were valid.
6. Inclusion of NHSM's Assets in the Sale:
The Court held that the integrated nature of NHSM's Energy Efficiency Equipment installed in ASM justified their inclusion in the sale. Segregating these assets would reduce their value and the overall sale proceeds.
7. Sundaram Finance Limited's Right to Recover Leased Machinery:
Sundaram Finance Limited, as the owner of the leased machinery, consented to the sale without relinquishing ownership. The machinery forms an integral part of ASM, and separating it would reduce the value of the assets.
8. Claims of BHEL and Walchandnagar Industries Limited:
The Court dismissed BHEL's applications under Section 9 of the Arbitration Act, ruling that BHEL had no lien over the supplied Turbo Generators as the title had passed to ASM. Similarly, Walchandnagar Industries Limited's claim for excluding its supplied boiler was rejected as it had become an unsecured creditor after transferring ownership to ASM.
9. Valuation and Upset Price of ASM's Assets:
The Court found the initial upset price of Rs. 86.44 Crores to be undervalued. Considering the previous bid and market conditions, the Court revised the upset price to Rs. 204.46 Crores, ensuring a fair and reasonable valuation for the assets.
Conclusion:
The Court upheld the Provisional Liquidator's powers to sell assets, validated the secured creditor's application for asset sale, and ensured the inclusion of all relevant assets for a comprehensive sale. The revised upset price aimed to achieve a fair market value, benefiting all creditors involved. The appeals were dismissed, and detailed directions were provided for the sale process.
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2011 (4) TMI 1510
The Supreme Court of India issued an order to issue notice on the application for condonation of delay and special leave petition. Dasti service is permitted. (Citation: 2011 (4) TMI 1510 - SC)
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2011 (4) TMI 1509
Issues involved: Appeal against CIT (A) order for assessment year 2005-06 regarding addition on account of estimated excess scrap generation.
Summary:
1. The sole issue raised in the present appeal is regarding the addition made by the Assessing Officer on account of excess generation of scrap amounting to Rs. 2,57,351/-. The Assessing Officer calculated the excess scrap generated based on the rate of generation in subsequent years, resulting in an addition to the assessee's income.
2. The assessee contended before CIT (A) that there was no basis for adopting the 2% scrap generation rate as there were no defects in the accounts or stock records. The CIT (A) partially upheld the addition, citing higher scrap generation in subsequent years and lack of quantitative details of finished goods. The CIT (A) directed the Assessing Officer to consider actual scrap generated and reduced the rate of scrap for partial relief.
3. During the appeal, the assessee argued that the books of account were maintained regularly and accepted by the Assessing Officer, with no defects found. The assessee maintained stock registers for scrap generation, verified by excise authorities, challenging the CIT (A)'s decision to uphold the partial addition.
4. The Tribunal found that there was no material evidence to support the finding of excess scrap generation during the relevant year. While the Assessing Officer based the addition on subsequent years' data, the Tribunal noted that this inference was merely a suspicion. As the assessee maintained stock registers for manufacturing and scrap generation, and the trading results were accepted, the Tribunal concluded that no addition was justified. Therefore, the Tribunal deleted the entire addition, allowing the appeal filed by the assessee.
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2011 (4) TMI 1508
Issues Involved:
1. Deductibility of pre-commencement expenses.
2. Rate of depreciation on UPS.
Summary:
Issue 1: Deductibility of Pre-Commencement Expenses
The assessee-company, incorporated on 19th March 2004, filed its return on 30th Oct 2005 declaring an income of Rs. 27,600. During scrutiny, it was found that the company incurred Rs. 59,02,448 in April and May 2004 for training staff before commencing operations in June 2004. The AO disallowed these expenses, stating they were incurred before the business was set up. The CIT(A) allowed the expenses, considering the business had commenced in April 2004 based on evidence like employee salaries, provident fund deductions, and other operational expenses.
The Tribunal examined precedents, including the cases of Akzo Nobel Car Refinishes India (P) Ltd., E Funds International India, Club Resorts (P) Ltd., and Whirlpool of India Ltd. It concluded that a business is set up when it is in a position to procure business, not merely when preparatory activities occur. Since the assessee was not ready to render services until June 2004, the expenses incurred in April and May 2004 were not deductible.
Issue 2: Rate of Depreciation on UPS
The assessee claimed a depreciation rate of 60% on UPS, which the AO reduced to 25%. The Tribunal referred to the decision in CIT v. BSES Rajdhani Power Ltd., where higher depreciation was allowed on computer peripherals. It held that UPS, being an integral part of the computer system, is entitled to a depreciation rate of 60%.
Conclusion:
The appeal was partly allowed, disallowing the pre-commencement expenses but allowing the higher depreciation rate on UPS.
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2011 (4) TMI 1507
Issues involved: Appeal against deletion of addition of depreciation on Marketing & Distribution Right and Licence to use Trademark and deletion of addition of claim for Royalty treated as revenue expenditure.
Issue 1 - Depreciation on intangible assets:
The appeal was filed by the Revenue against the deletion of addition of depreciation on Marketing & Distribution Right and Licence to use Trademark. The Assessing Officer (AO) contended that the assessee was not entitled to depreciation as the ownership of the trademark had not been transferred. However, the CIT(A) referred to past decisions where the stand of the assessee was affirmed. The ITAT Bench cited a previous case where depreciation on intangible assets was allowed under section 32(1)(ii) of the Income-tax Act, 1961. The Tribunal upheld the CIT(A)'s decision, stating that the intangible assets fell under the category eligible for depreciation. As the Revenue's ground had been dismissed in the past, the Tribunal dismissed this ground as well for the current year.
Issue 2 - Claim for Royalty as revenue expenditure:
The second ground of appeal involved the deletion of the addition of claim for Royalty treated as revenue expenditure. The AO disallowed 1/4th of the royalty claim, similar to a past assessment order. However, the CIT(A) referred to a Tribunal decision from a previous year where the disallowance of royalty expenses was deleted. The Tribunal upheld the CIT(A)'s decision based on judicial propriety and consistency with past decisions. As there was no material to distinguish the facts, the Tribunal dismissed the Revenue's appeal on this ground as well.
In conclusion, the Revenue's appeal was dismissed by the ITAT Ahmedabad, upholding the decisions of the CIT(A) regarding the depreciation on intangible assets and the treatment of royalty as revenue expenditure.
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2011 (4) TMI 1506
Issues Involved:
1. Determination of Agricultural Income.
2. Additions of Rs. 4.90 crores and Rs. 5.29 crores for AY 2007-08 and 2008-09.
3. Additions of Rs. 5.50 lakhs and Rs. 50 lakhs for AY 2007-08 and 2008-09.
4. Additions of Rs. 17,83,500/-, Rs. 1,63,45,000/- and Rs. 25,00,000/- for AY 2008-09.
5. Additions based on deposits in bank accounts for AY 2004-05 to 2007-08.
6. Disallowance of bad debts for AY 2007-08.
7. Additions of unexplained cash credits for AY 2003-04 to 2005-06.
Summary:
1. Determination of Agricultural Income:
The primary issue was whether the agricultural income claimed by the assessee-AOP was genuine. The CIT(A) accepted the holding of 63 acres of cultivable land and the fact that agricultural activities were carried out. However, the quantum of agricultural income reported by the assessee was considered exorbitantly high. The CIT(A) estimated the agricultural income at Rs. 22 lakhs per annum for the assessment years 2002-03 to 2007-08, which was upheld by the Tribunal. Both the Revenue's and assessee's contentions on this issue were rejected.
2. Additions of Rs. 4.90 crores and Rs. 5.29 crores for AY 2007-08 and 2008-09:
The Assessing Officer made additions based on seized papers reflecting transactions totaling Rs. 10.19 crores. The CIT(A) deleted these additions, attributing the transactions to individuals involved in property deals, not the assessee-AOP. The Tribunal upheld this finding, agreeing that the transactions were personal and not related to the assessee-AOP.
3. Additions of Rs. 5.50 lakhs and Rs. 50 lakhs for AY 2007-08 and 2008-09:
These additions were made on the ground of payments to Ms. Jayanthi Krishnamurthy. The CIT(A) deleted these additions, reasoning that the facts were similar to the Rs. 10.19 crores transaction. The Tribunal agreed with this finding, confirming the deletion of these amounts.
4. Additions of Rs. 17,83,500/-, Rs. 1,63,45,000/- and Rs. 25,00,000/- for AY 2008-09:
The Assessing Officer made these additions as loans advanced by the assessee without explaining the source. The CIT(A) found that the assessee had already offered Rs. 1.4 crores as unexplained cash credit, thus reducing the addition to Rs. 41,28,500/-. The Tribunal upheld this modification and confirmed the differential amount of Rs. 26,200/- for interest income.
5. Additions based on deposits in bank accounts for AY 2004-05 to 2007-08:
Additions were made based on deposits in bank accounts operated by the assessee's employees. The CIT(A) confirmed these additions, finding that the accounts were indeed operated by the assessee. The Tribunal upheld this finding, agreeing with the lower authorities.
6. Disallowance of bad debts for AY 2007-08:
The Assessing Officer disallowed the claim of bad debts of Rs. 2,01,64,838/-. The CIT(A) allowed the claim, applying the Supreme Court judgment in TRF Ltd. v. CIT (323 ITR 397), which states that writing off bad debts in the books of accounts is sufficient evidence. The Tribunal upheld this decision, rejecting the Revenue's grounds.
7. Additions of unexplained cash credits for AY 2003-04 to 2005-06:
The Assessing Officer made additions based on unexplained cash credits in the Balance Sheet. The CIT(A) confirmed these additions as the assessee admitted it had no evidence to support the credits. The Tribunal upheld this finding, rejecting the assessee's contentions.
Conclusion:
The Tribunal confirmed the order of the CIT(A) in all aspects, dismissing the appeals by the Revenue and the cross objections by the assessee. The judgment was pronounced on April 29, 2011.
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2011 (4) TMI 1505
The Delhi High Court dismissed the appeal as the tax effect was less than Rs. 10 lakhs, following new CBDT guidelines.
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2011 (4) TMI 1504
Issues involved: Restoring a case to its original file, reduction of compensation amount, payment schedule, modification of sentence, consequences of default in payment.
In the judgment, the Court restored a case to its original file and number by treating it as on the days list with the consent of the parties. The matters involved identical questions of fact and law and were disposed of by a common judgment and order.
Regarding the payment of compensation, the petitioner had assured the Court in the past to make payment of the entire amount in phases. The Court noted that the petitioner had agreed to pay the compensation but sought a reduction in the amount. The Court, however, found no scope to reduce the amount as the petitioner had assured the Court of full payment. The Court granted some time to the petitioner to pay off the amount in phases, specifying the payment schedule.
The petitioner was directed to make a payment of a certain amount by a specified date and the balance amount in equal instalments starting from a particular date. It was stated that if payments were made as per the schedule, the sentence of imprisonment imposed by the lower Court would be set aside and modified to the extent of payment of compensation only. The Court also mentioned that as long as the payments were made as per the schedule, the sentence for imprisonment would not be executed.
In case of default in payment of the first instalment or any subsequent instalments, the order would be recalled, and the revisional application would be dismissed. However, if the payments were made as per the schedule, the revisional applications would be disposed of. The Court directed that an urgent certified copy of the order be supplied to the parties upon application.
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2011 (4) TMI 1503
The Supreme Court of India dismissed the special leave petition in the case. The judges were Chief Justice K.S. Panicker Radhakrishnan and Justice Swatanter Kumar. Appellant represented by Mr. Gaurab Banerji, ASG, Ms. Lakshmi Iyengar, and others. Respondent represented by Ms. Radha Rangaswamy.
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2011 (4) TMI 1502
Issues Involved:
1. Legality of disqualification of nominees for Workmen Director based on residual service before superannuation.
2. Interpretation of Clause 3(2)(iii)(b) of the Nationalised Banks (Management and Miscellaneous Provisions) Scheme, 1970/1980.
3. Alleged discrimination between categories of directors.
4. Delay and laches in filing the petition.
Detailed Analysis:
1. Legality of Disqualification Based on Residual Service:
The petitioners challenged the disqualification of their nominees for the position of Workmen Director on the grounds that they had less than three years of residual service before superannuation. The court examined Clause 3(2)(iii)(b) of the Nationalised Banks (Management and Miscellaneous Provisions) Scheme, 1970/1980, which states that a workman shall be disqualified unless "he is of such age that there is no likelihood of his attaining the age of superannuation during his term of office as a director." The court upheld this clause, stating that it ensures continuity and prevents mid-term vacancies, which could disrupt the Board's functioning.
2. Interpretation of Clause 3(2)(iii)(b):
The petitioners argued that Clause 3(2)(iii)(b) should be construed as directory rather than mandatory. They contended that the bank had previously appointed directors with less than three years of service left. However, the court rejected this argument, emphasizing that the clause is mandatory. The court noted that the scheme is legislative in nature and the use of the word "shall" indicates an imperative provision. The court applied the principle of harmonious construction, stating that the clause does not conflict with Clause 9(2)(a) of the scheme, which specifies the term of office for directors.
3. Alleged Discrimination Between Categories of Directors:
The petitioners claimed that the clause discriminates against workmen directors compared to officer directors. The court dismissed this argument, noting that the nomination process for officer directors involves consultation with the Reserve Bank of India and follows a different procedure as outlined in Clause 3(3) and the Third Schedule of the scheme. The court found no merit in the plea of discrimination, stating that the two categories are not comparable and the provisions are not discriminatory.
4. Delay and Laches in Filing the Petition:
The respondents argued that the petition should be dismissed due to delay and laches, as it was filed more than one and a half years after the communication dated 10th October 2009. The court, however, did not base its decision solely on this ground but considered the substantive issues raised in the petition.
Conclusion:
The court dismissed the petition, upholding the disqualification clause as mandatory and not discriminatory. The court emphasized the importance of ensuring continuity in the Board of Directors and rejected the argument that the clause was directory. The court also found no merit in the claim of discrimination between workmen and officer directors. The petition was dismissed without any order as to costs.
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2011 (4) TMI 1501
Issues Involved:
1. Jurisdiction of MCD to levy fees and impose conditions for installation of cellular towers.
2. Validity of the fees imposed by MCD.
3. Applicability of the Indian Telegraph Act and the Delhi Municipal Corporation Act.
4. The role of municipal governance in regulating the installation of cellular towers.
5. Health and safety concerns related to cellular towers.
Issue-wise Detailed Analysis:
1. Jurisdiction of MCD to levy fees and impose conditions for installation of cellular towers:
The primary contention of the petitioners was that the imposition of fees and conditions by the Municipal Corporation of Delhi (MCD) for the installation of cellular towers was beyond its jurisdiction. They argued that telecommunication is a central subject under Entry 31 of List-I in the Seventh Schedule to the Constitution of India, and only the Central Government has the authority to legislate on this matter. The petitioners further claimed that the Indian Telegraph Act, 1885, empowers only the Central Government to grant permissions for telegraph installations, and the MCD has no locus to demand fees or impose conditions for such installations.
2. Validity of the fees imposed by MCD:
The petitioners challenged the fees prescribed by the MCD, arguing that the fees were arbitrary, excessive, and lacked legal backing. They contended that the MCD had failed to justify the rationale for enhancing the fee from Rs. 1 lac to Rs. 5 lacs for a period of five years. The petitioners also argued that the fee imposed by the MCD did not satisfy the principle of quid pro quo, which is necessary for any regulatory fee.
3. Applicability of the Indian Telegraph Act and the Delhi Municipal Corporation Act:
The court examined whether the provisions of the Indian Telegraph Act, 1885, precluded the applicability of the Delhi Municipal Corporation Act (DMC Act) concerning the installation of cellular towers. The court noted that while the Telegraph Act grants the Central Government exclusive privilege to establish telegraphs, it does not bar the applicability of other laws concerning other facets of telegraph establishment, maintenance, or working. The court held that the impugned circulars/orders of the MCD did not encroach upon the exclusive domain of the Centre regarding telegraphs but regulated other aspects such as structural stability, public safety, and aesthetics.
4. The role of municipal governance in regulating the installation of cellular towers:
The court emphasized the importance of municipal governance in regulating the skyline, aesthetics, and safety of the city. It held that the MCD is responsible for maintaining the skyline of Delhi and ensuring that the installation of cellular towers does not negatively impact the city's aesthetics or safety. The court observed that the MCD has the authority to regulate the installation of towers as "buildings" under the DMC Act, which includes structures of metal or other materials.
5. Health and safety concerns related to cellular towers:
The court acknowledged the health and safety concerns raised by the MCD regarding the installation of cellular towers. It noted that the MCD is responsible for ensuring that buildings, including towers, comply with safety standards and do not pose a health hazard to citizens. The court upheld certain conditions imposed by the MCD, such as requiring structural stability certificates and prohibiting installations on unauthorized buildings, to address these concerns.
Conclusion:
The court held that the MCD has the jurisdiction to regulate the installation of cellular towers as "buildings" under the DMC Act. However, it struck down the fees imposed by the MCD as arbitrary and beyond its competence. The court emphasized the need for legislative amendments to the Building Bye-Laws and the Telegraph Act to address the regulation of cellular towers comprehensively. The court upheld certain conditions imposed by the MCD related to public safety and aesthetics but struck down others that were beyond the scope of municipal governance. The writ petitions were partly allowed, and the impugned fees were quashed.
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2011 (4) TMI 1500
Issues Involved:
1. Validity of proceedings u/s 147.
2. Deletion of addition of Rs. 11,26,023/- made on account of unexplained receipts shown as receipt on sale of shares.
Summary:
1. Validity of proceedings u/s 147:
The cross-objection challenging the validity of proceedings u/s 147 was not pressed by the learned AR of the assessee and thus, it stands dismissed as not pressed.
2. Deletion of addition of Rs. 11,26,023/- made on account of unexplained receipts shown as receipt on sale of shares:
The Assessing Officer (AO) received information from Addl. DIT(Inv), Agra that M/s North India Securities Pvt. Ltd., Delhi had provided bogus entries of sale proceeds of shares to the assessee. The AO took action u/s 147 of the Act and issued notices u/s 142(1) & 143(2). The assessee submitted necessary details, including share application, allotment advice, and share certificates, claiming exemption u/s 54EC of the Act. However, the AO assessed the entire amount of Rs. 11,03,945/- plus Rs. 22,078/- as commission paid, aggregating to Rs. 11,26,023/-, as income from undisclosed sources.
In appeal, the CIT(A) considered the arguments, material on record, and various decisions cited, and deleted the addition. The CIT(A) noted that there was no material other than a list showing long-term capital gains on sale of shares shown by various individuals, including the appellant, through the broker North India Securities Pvt. Ltd., Delhi. The CIT(A) found no adverse/incriminating material implicating the companies involved in these transactions. The AO failed to refute the documentary evidence provided by the assessee.
The learned DR argued that the CIT(A) erred in deleting the addition without appreciating the facts brought on record by the AO. The learned AR contended that all relevant documents and evidence were submitted, and the AO failed to prove these documents were false or fabricated. The AO did not make any independent enquiry from the company or the broker.
The Tribunal found no material on record to substantiate the AO's stand that there was no actual purchase and sale of shares by the assessee. The Tribunal emphasized that the burden of proof lies on the department to prove the allegation. The Tribunal noted that the assessee had furnished all relevant documentary evidence, and the AO failed to prove these documents were false or fabricated. The Tribunal also highlighted that the AO accepted similar transactions for other shares as genuine.
The Tribunal concluded that the AO was not justified in partly accepting and partly disbelieving dealings of shares from the same broker in identical facts and circumstances. The Tribunal found that the AO's observation regarding the increase in share prices was not a sufficient basis for doubting the transactions. The Tribunal upheld the CIT(A)'s order, finding it well-reasoned and not calling for any interference.
Conclusion:
The appeal filed by the Revenue and the cross-objection filed by the assessee were dismissed. The order pronounced in the open court on 08.04.11.
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2011 (4) TMI 1499
Applicability of the Government Grants - agreement for erection of oil storage tank - petroleum products to the site decanted - lease or license - The Appellant had been granted under the Government Grant Act separate and distinct licenses for the purpose of maintaining depot for storage of petroleum products at a yearly license fee. the Appellant is in possession of the buildings since 1958. They have been permitted to raise huge constructions and the nature of construction is of wide range. An administration block along with tanks for storing petroleum had been constructed. A boundary wall around installations and administrative block had also been constructed. The Respondent MCD passed an assessment order with regard to the property tax qua the aforesaid property and confirmed the rate able value proposed by it. The said assessment order was challenged by the Appellant.
HELD THAT:- It is well settled legal position that a deed must be read in its entirety and reasonably. The intention of the parties must also as far as possible be gathered from the expression used in the document itself. By reason of the agreement in question, the buildings in question do not belong to the Administration. Admittedly, it belongs to the grantee i.e. Appellant herein. As discussed, the Oil tanks has been construed as buildings for the purposes of tax. Therefore, Section 119 of the MCD Act would not apply to the building in question. That being the case, the grantee/Appellant is liable to pay tax although the ownership of the land may belong to the Administration. Section 115 of the MCD Act clearly provides that the general tax shall be payable in respect of lands and buildings. Such lands and buildings may be in lawful occupation of the owner. Once it is held that the grantee were liable to pay tax, the same becomes payable from the date of accrual of the liability. The said position is also fortified from specific stipulation in the agreement that the liability to pay all taxes including municipal taxes is on the grantee. Therefore, we are of the considered view that the document in question constitutes lease in favor of the Appellant-grantee; and accordingly liable to pay taxes.
It is well settled legal position that a deed must be read in its entirety and reasonably. The intention of the parties must also as far as possible be gathered from the expression used in the document itself. we are of the considered view that the document in question constitutes lease in favor of the Appellant-grantee; and accordingly liable to pay taxes.
we find no merit in the present appeal, accordingly, the same is liable to be dismissed
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2011 (4) TMI 1498
Issues involved:
Appeal against deletion of unexplained credits and interest addition u/s 68 for AY 2006-07.
Addition of TDS amount leading to double addition for AY 2007-08.
For AY 2006-07:
The Revenue appealed against the deletion of unexplained credits and consequential interest addition u/s 68. The Assessing Officer found unsecured loans taken by the assessee company as unexplained credits. The Commissioner of Income-tax (Appeals) deleted the additions based on confirmation letters and details provided by the assessee. The Revenue contended that the burden of proof regarding creditworthiness was not adequately discharged by the assessee. The Tribunal held that the assessee failed to establish the genuineness of the credits, leading to restoration of the additions made by the Assessing Authority.
For AY 2007-08:
The issue revolved around the addition of a TDS amount leading to double addition in the total income of the assessee. The assessee filed a rectification petition under sec.154, which was initially dismissed by the Assessing Officer. The Commissioner of Income-tax (Appeals) found the addition to be a rectifiable mistake and deleted the same. The Tribunal upheld the decision, stating that the addition resulted in duplication and was a clear arithmetic error. Consequently, the Revenue's appeal for AY 2007-08 was dismissed.
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