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Showing 41 to 60 of 1003 Records

• 2013 (4) TMI 973
  
  Issues involved: Determination of whether the expenditure incurred by the assessee towards replacement of machinery is revenue expenditure or capital expenditure for Assessment Years 1995-96, 1996-97, and 1997-98.
  
  Summary:
  
  Issue 1: Expenditure Nature - Capital or Revenue
  The assessee claimed the expenditure as revenue expenditure under the head 'replacement of machinery', while the Revenue assessed it as capital expenditure. The matter had previously reached the Hon'ble Supreme Court, where the claim under section 31(i) was rejected, and the case was remitted back to the CIT(A) for decision. In the current appeal, the CIT(A) held the expenditure as capital expenditure following the Apex Court's decision in another case. The assessee argued that the expenditure should be treated as revenue expenditure under section 37 of the Act. The Tribunal considered the enduring benefit, earning capacity improvement, and previous judgments to determine the nature of the expenditure.
  
  Issue 2: Judicial Precedents and Interpretation
  The Tribunal referred to various judicial precedents and criteria to distinguish between capital and revenue expenditure. It highlighted that capital expenditure acquires, extends, or improves fixed assets, providing benefits over several years, while revenue expenditure is consumed within a short period. The Tribunal also emphasized that capital expenditure enhances the earning capacity of a business, whereas revenue expenditure maintains profit-making capacity. The decision was influenced by the criteria set by the Hon'ble Supreme Court regarding the deductibility of expenditure under section 37 of the Act.
  
  Issue 3: Tribunal Decision and Precedents
  The Tribunal considered the arguments presented by both parties and analyzed the orders of the authorities below. It noted that the expenditure on replacement of machinery resulted in an enduring benefit and increased production capacity, leading to the conclusion that it was capital in nature. Citing previous judgments, the Tribunal upheld the CIT(A)'s decision that the expenditure was not liable for deduction under section 37 of the Act. The Tribunal also referred to a previous decision by a Co-ordinate Bench on a similar issue, supporting the capitalization of expenditure for efficient working of existing machinery.
  
  Conclusion
  Based on the previous decisions, including those of the Hon'ble Supreme Court, the Tribunal dismissed the appeals of the assessee for the Assessment Years 1995-96, 1996-97, and 1997-98. The expenditure incurred on the replacement of machinery was held to be capital in nature, upholding the CIT(A)'s order. The appeals were deemed devoid of merit, and the order of the CIT(A) was upheld.
  
  Order pronounced on Tuesday, the 30th April 2013 at Chennai.

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• 2013 (4) TMI 972
  
  Issues Involved:
  1. Whether the Constitution (97th Amendment) Act, 2011 violates any provisions of the Constitution of India.
  2. Whether the amendment required ratification by the State Legislatures under Article 368(2).
  
  Issue 1: Violation of Constitutional Provisions
  The writ-petitioner contended that the Constitution (97th Amendment) Act, 2011, which introduced Part IXB, was ultra vires the Constitution of India. The petitioner argued that the amendment violated the basic structure of the Constitution by not following the procedure prescribed in Article 368(2), which recognizes the federal structure as a basic structure. The petitioner asserted that "Cooperative Societies" fall under the State List (List II) and not the Union List (List I) or Concurrent List (List III), and thus, the State Legislature is the only competent authority to enact laws for cooperative societies. The amendment, according to the petitioner, indirectly achieved what it could not do directly, violating the basic structure of the Constitution.
  
  Issue 2: Requirement of Ratification by State Legislatures
  The Central Government argued that the amendment did not require ratification by the State Legislatures as it did not change any matters enumerated in clauses (a) to (e) of the proviso to Article 368(2). The Union of India contended that the amendment was within the Parliament's constituent power and did not alter the basic structure of the Constitution. The State Government supported this contention.
  
  Judgment:
  The Court held that the State Legislature is authorized to enact laws relating to "Cooperative Societies" as it is listed in List II of the Seventh Schedule. The Court acknowledged that the Parliament can amend the Constitution to shift an item from List II to List I or List III, but such an amendment requires compliance with Article 368(2), including ratification by the Legislatures of not less than one-half of the States.
  
  The Court found that the formalities indicated in Article 368(2) for ratification were not complied with before presenting the amendment to the President for assent. The Court noted that the amendment imposed various restrictions on the State Legislatures' power to enact laws relating to cooperative societies, which were earlier unfettered. This inclusion of Part IXB effectively constrained the jurisdiction of the State Legislatures without following the required procedure of Article 368(2).
  
  The Court concluded that the amendment violated the basic structure of the Constitution, specifically the principles of federalism, by curtailing the State Legislatures' power without the necessary ratification. The Court declared the Constitution (97th Amendment) Act, 2011, inserting Part IXB, as ultra vires the Constitution of India for not taking recourse to Article 368(2). The judgment, however, did not affect other parts of the Constitution (97th Amendment) Act, 2011. The Court refused the Union of India's request for a stay of the judgment.

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• 2013 (4) TMI 971
  
  Issues Involved:
  1. Contempt of Court by Respondent No. 1 for withdrawing money from a Swiss bank account in violation of court orders.
  2. Examination of whether the Respondent had actually withdrawn money from the account after the court's prohibitory orders.
  
  Summary:
  
  Issue 1: Contempt of Court by Respondent No. 1
  The petition was filed u/s Article 129 of the Constitution of India read with Order XLVII of the Supreme Court Rules, 1966, and Rule 3(C) of the Rules to regulate proceedings for Contempt of the Supreme Court, 1975. The petitioner sought to punish Respondent No. 1 for withdrawing a large sum of money from his Swiss bank account in violation of the court's orders dated September 4, 2006, and December 14, 2006. The court had previously held Respondent No. 1 guilty of contempt on April 1, 2010, noting that he had not denied the allegations of withdrawing money in violation of the court's order.
  
  Issue 2: Examination of Withdrawal of Money
  The court examined whether the Respondent had indeed withdrawn money from his Swiss bank account after the court's prohibitory orders. The relevant facts include:
  - The Petitioner, National Fertilizers Ltd., had entered into a contract with Karsan, a Turkish company, for the supply of urea, and had paid the full contract value in advance.
  - Despite the payment, the Petitioner did not receive any urea, leading to a criminal case and the arrest of Alankus and Karanci.
  - The court had issued orders on September 4, 2006, and December 14, 2006, restraining Respondent No. 1 from withdrawing money from his Swiss bank account.
  - The Respondent claimed that the account had been closed on July 25, 2006, and provided a bank statement showing that the entire amount had been withdrawn by June 21, 2006.
  
  The court found that the attachment against the Respondent's account was lifted on June 1, 2006, and the next attachment order was obtained only on December 15, 2006. Therefore, there was a period of over six months when there was no attachment order, and the amount was withdrawn during this period. Consequently, on September 4, 2006, when the court passed the order prohibiting withdrawals, there was no money in the account.
  
  Conclusion:
  The court concluded that the Respondent could not be held guilty of contempt as there was no money in the account when the prohibitory order was passed. The order dated April 1, 2010, holding the Respondent guilty of contempt was based on an erroneous premise and was recalled. The contempt petition was dismissed.

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• 2013 (4) TMI 970
  
  Issues involved: Appeal against order of CIT(Appeals) for assessment year 2009-10. Whether CIT(A) order is bad in law. Deletion of addition of cash deposits under Section 69A.
  
  Issue 1: CIT(A) Order Legality
  The Revenue appealed against the CIT(A) order dated 12.11.2012 for the assessment year 2009-10, questioning its legality.
  
  Issue 2: Deletion of Cash Deposits Addition
  The case involved the deletion of an addition of Rs. 30,15,089 on account of cash deposits made in the bank, held as unexplained investments, under Section 69A of the Income-tax Act.
  
  Facts and Decision:
  The assessee had salary and agricultural income, and the case came under scrutiny. Despite multiple notices, the assessee did not attend hearings. The Assessing Officer (A.O.) made the addition of Rs. 30,15,089 as unexplained income from cash deposits. The CIT(A) partly allowed the appeal by deleting the addition. The Revenue appealed against this deletion.
  
  Judgment:
  The ITAT upheld the CIT(A) decision, stating that the assessee provided sufficient evidence, including cash flow statements and explanations for cash deposits. The ITAT found the A.O.'s addition without considering the evidence to be unjustified. The ITAT referred to relevant case laws and concluded that the deletion of the addition was appropriate. The ITAT dismissed the Revenue's appeal, upholding the CIT(A) decision.
  
  Conclusion:
  The ITAT decision on the appeal against the CIT(A) order for the assessment year 2009-10 upheld the deletion of the addition of cash deposits under Section 69A, based on the evidence provided by the assessee and the lack of justification for the A.O.'s addition. The appeal filed by the Revenue was dismissed.

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• 2013 (4) TMI 969
  
  Issues Involved:
  1. Disallowance of deduction u/s 80IA.
  2. Disallowance of Mission Reach Project expenditure.
  3. Disallowance of interest not charged on security deposits u/s 36(1)(iii).
  4. Disallowance of sales promotion expenses.
  5. Reduction of deduction u/s 80IA(4) by loss from operation and maintenance activities.
  6. Disallowance of labor charges u/s 40A(2)(b).
  7. Levy of penalty u/s 271(1)(c).
  
  Summary:
  
  1. Disallowance of Deduction u/s 80IA:
  The assessee claimed deductions u/s 80IA for multiple AYs, which were disallowed by the AO on the grounds that the assessee did not "own" the infrastructure facility and was merely a "contractor." The CIT(A) upheld this view. However, the ITAT referred to previous rulings, including the case of Patel Engineering Ltd., and concluded that the assessee qualifies as a "developer" and thus is entitled to the deduction u/s 80IA(4). The ITAT also noted that the infrastructure facility need not be owned by the assessee, aligning with the decision in ABG Heavy Industries Ltd. Consequently, the assessee's claim for deduction was allowed.
  
  2. Disallowance of Mission Reach Project Expenditure:
  The AO disallowed the expenditure on the Mission Reach Project, noting it was not directly related to the business of the assessee. The CIT(A) upheld this decision. The ITAT agreed, stating the expenditure was for an educational institution and not connected to the business activity, thus not allowable u/s 37(1).
  
  3. Disallowance of Interest Not Charged on Security Deposits u/s 36(1)(iii):
  The AO disallowed interest on advances to Directors, considering it as a diversion of funds for non-business purposes. The CIT(A) upheld this view. The ITAT reversed this, citing that the assessee had sufficient reserves and surpluses, and following the precedent set by Reliance Utilities and Power Ltd., the interest-free funds were presumed to be used for the advances. Thus, the disallowance was deleted.
  
  4. Disallowance of Sales Promotion Expenses:
  The AO disallowed Rs. 12,50,000/- claimed as sales promotion expenses, considering it a donation to Surat Municipal Corporation. The CIT(A) upheld this. The ITAT allowed the claim, noting the expenditure was connected to the business and aimed at establishing goodwill and business relationships, thus allowable u/s 37(1).
  
  5. Reduction of Deduction u/s 80IA(4) by Loss from Operation and Maintenance Activities:
  The AO reduced the deduction u/s 80IA(4) by the loss incurred in one of the infrastructure projects. The ITAT upheld this, stating the provisions of section 80IA(4) require the computation of net income, including any losses from the projects.
  
  6. Disallowance of Labor Charges u/s 40A(2)(b):
  The AO disallowed 10% of the labor charges paid to a related party, considering it excessive. The CIT(A) reversed this, stating the AO did not provide comparable instances to justify the disallowance. The ITAT upheld the CIT(A)'s decision, noting the genuineness of the expenditure was not doubted, and there was no motive to divert income as the assessee was entitled to 100% deduction u/s 80IA(4).
  
  7. Levy of Penalty u/s 271(1)(c):
  Penalties were levied on the disallowance of deduction u/s 80IA(4) and Mission Reach expenditure. The ITAT deleted the penalties, noting the deduction u/s 80IA(4) was allowed, and the disallowance of Mission Reach expenditure was due to a difference of opinion, not concealment or furnishing inaccurate particulars.
  
  Final Outcome:
  The assessee's appeals for AYs 2005-06, 2006-07, 2007-08, and 2009-10 were partly allowed. The Revenue's appeals for AYs 2005-06, 2006-07, and 2007-08 were dismissed. The penalty appeals filed by the assessee for AYs 2005-06, 2006-07, and 2007-08 were allowed.

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• 2013 (4) TMI 968
  
  Issues involved: Delay in filing objections under Section 34 of the Arbitration and Conciliation Act, 1996 to the Award of the learned Arbitrator dated 28.11.2011.
  
  The judgment addresses the delay in filing objections, which was 142 days, and the subsequent delay in refiling, which was 103 days. The reasons provided for the delays include bureaucratic processes within the government department and confusion regarding the payment of additional court fees. The court highlighted that the appellant, being a government entity, cannot seek condonation of delay based on impersonal machinery and bureaucratic methodology. The Supreme Court's stance in Post Master General and Ors. Vs. Living Media India Ltd and Anr. 2012 (3) SCC 563 was referenced, emphasizing that public sector enterprises, including the Union of India, are not exempt from the law of limitation. The court stressed that condonation of delay should not be a routine practice for government departments and that they must perform their duties diligently. The judgment underlines that modern technologies are available to streamline processes, and delays cannot be excused solely due to procedural red-tape.
  
  Another aspect considered in the judgment pertains to appeal proceedings arising from objections to an Award. The court referred to a previous case, The Executive Engineer (Irrigation and Flood Control) Vs. Shree Ram Construction Co. 2010 (120) DRJ 615, where the Division Bench of the Court discussed the issue of delay in re-filing petitions related to objections to an Award. The court highlighted the need for a stricter scrutiny in condoning delays in re-filing petitions, especially when the delay exceeds the permissible period under the relevant laws. The judgment emphasized that a liberal approach cannot be adopted in condoning delays at the second stage of proceedings, even if the first stage aims for an early conclusion of the dispute. Ultimately, the court found no sufficient cause to condone the delays in filing or re-filing objections in this case.

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• 2013 (4) TMI 967
  
  Issues Involved:
  1. Whether the profit arising from the sale of shares, mutual funds, etc., is to be treated as business income or capital gain.
  2. Disallowance of expenditure of Rs. 18,57,355/- for A.Y. 2005-06.
  3. Treatment of profit on sale of bonus units in Chola Freedom STF units as long-term capital gains.
  
  Summary:
  
  Issue 1: Treatment of Profit from Sale of Shares and Mutual Funds

  The assessee filed returns for A.Y. 2005-06, 2008-09, and 2009-10, treating gains from the sale of shares as capital gains. The Assessing Officer (AO) treated these gains as business income, leading to appeals by both the assessee and the Revenue. The Tribunal had to decide whether these profits should be treated as business income or capital gains.

  The assessee argued that they maintained two separate portfolios for investment and business, and that delivery-based transactions should be treated as capital gains. The CIT(A) had ruled that profits from shares held for more than 30 days should be considered as capital gains, while those held for less than 30 days should be treated as business income. The Tribunal disagreed with this 30-day criterion, stating it is neither recognized nor acceptable under the Income Tax Act, 1961.

  The Tribunal remitted the matter back to the AO to determine if the assessee maintained separate books of accounts and bank accounts for the two portfolios, the objective of acquiring the shares, the ratio of dividend earned to profits from sales, the volume, frequency, and regularity of transactions, and the list of shares transacted in each portfolio.

  Issue 2: Disallowance of Expenditure of Rs. 18,57,355/- for A.Y. 2005-06

  The assessee failed to produce any documentary evidence to substantiate the claim of expenditure before the AO or CIT(A). The Tribunal upheld the disallowance of the expenditure, as the assessee did not discharge the duty of providing relevant documents.

  Issue 3: Treatment of Profit on Sale of Bonus Units in Chola Freedom STF Units

  The CIT(A) held that the profit on the sale of bonus units amounting to Rs. 91.43 lakhs should be treated as long-term capital gains, as the holding period was more than 12 months. The Tribunal found no infirmity in the CIT(A)'s findings and dismissed the Revenue's appeal on this ground.

  Conclusion:

  ITA No.1685/Mds./12 of the assessee and ITA No.1755/Mds./12 of the Revenue for A.Y. 2005-06 are partly allowed for statistical purposes. ITA No.1686/12 & ITA Nos.1687/Mds./12 for A.Ys. 2008-09 & 2009-10 of the assessee are allowed for statistical purposes. ITA No.1756/Mds./12 & ITA No.1918/Mds./12 for A.Ys. 2008-09 & 2009-10 of the Revenue are allowed for statistical purposes.

  Order pronounced on Tuesday, the 30th April, 2013 at Chennai.

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• 2013 (4) TMI 966
  
  The Supreme Court of India dismissed the Civil Appeals, stating that it was not a fit case for invoking their jurisdiction under Article 136 of the Constitution of India. No order was given regarding costs. (2013 (4) TMI 966 - SC)

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• 2013 (4) TMI 965
  
  Issues Involved:
  1. Whether reservation of land in Regional/Development plans under the Maharashtra Regional and Town Planning Act, 1966 (the 1966 Act) lapses if not acquired or steps for acquisition are not initiated within six months of notice u/s 127 of the 1966 Act.
  
  Issue-wise Comprehensive Details:
  
  1. Reservation of Land and Lapse due to Non-Acquisition:
  The primary issue was whether the reservation of parcels of land owned by the Respondents in the Regional/Development plans prepared under the 1966 Act will be deemed to have lapsed because the same were not acquired or no steps were commenced within six months of the service of notice u/s 127 of the 1966 Act. The court examined various appeals where the Respondents' lands were reserved for public purposes like playgrounds, schools, and parks, but the acquisition process was not completed within the stipulated time.
  
  2. Interpretation of Section 127 of the 1966 Act:
  The court analyzed the interpretation of Section 127, which mandates that if any land reserved for public purposes is not acquired within ten years or if proceedings for acquisition are not commenced within six months of the notice, the reservation shall lapse. The court reiterated that the expression "no steps as aforesaid are commenced" refers to active steps leading to the publication of the declaration u/s 6 of the Land Acquisition Act, 1894 (the 1894 Act).
  
  3. Judicial Precedents and Majority Judgment in Girnar Traders (II):
  The court referred to the majority judgment in Girnar Traders (II), which held that mere passing of a resolution or sending a letter to the Collector does not constitute the commencement of acquisition proceedings. The court emphasized that the steps towards acquisition must lead to the publication of the declaration u/s 6 of the 1894 Act.
  
  4. Arguments by Appellants and Respondents:
  The Appellants argued that the majority judgment in Girnar Traders (II) should be reconsidered by a larger Bench, claiming it was contrary to the plain language of Section 127 and earlier judgments. They contended that passing resolutions and sending communications to the District Collector should be considered as steps towards acquisition. The Respondents supported the impugned orders, arguing that the majority view in Girnar Traders (II) was consistent with the statutory provisions and judicial precedents.
  
  5. Court's Analysis and Conclusion:
  The court concluded that there was no conflict between the judgments in Dr. Hakimwadi Tenants' Association and Girnar Traders (II). It upheld the majority view in Girnar Traders (II), stating that the steps towards acquisition must lead to the publication of the declaration u/s 6 of the 1894 Act. The court emphasized that the legislative intent was to ensure prompt acquisition and prevent indefinite deprivation of property without compensation.
  
  Final Judgment:
  The Supreme Court dismissed the appeals, holding that the majority judgment in Girnar Traders (II) lays down the correct law and does not require reconsideration by a larger Bench. The court affirmed the High Court's orders declaring that the reservations lapsed due to non-acquisition within the stipulated time.

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• 2013 (4) TMI 964
  
  Issues involved: Appeal against orders of ld. CIT(A) confirming orders u/s 201(1) and 201(1A) of the Income-tax Act, 1961 challenging interest for default u/s 201(1A) on grounds of TDS deposit timing and Revenue's appreciation of explanations.
  
  Issue 1: Challenge of interest for default u/s 201(1A) on the basis of timely TDS deposit.
  
  The assessee claimed timely TDS deposit through bank challan, but the DCIT (TDS) levied interest under section 201(1A) on delayed payment period. The ld. CIT(A) upheld the interest levy citing Rule 20(i) of Receipts and Payments Rule, determining the date of payment based on the date in the challan. Various case laws were referenced to support the validity of interest levy under section 201(1A). The Tribunal found no infirmity in the ld. CIT(A)'s order and confirmed it, leading to the dismissal of the appeals.
  
  Issue 2: Interpretation of payment date for TDS deposit.
  
  In one case, the assessee claimed to have deposited a specific amount on a certain date, while the DCIT (TDS) considered a different date based on the challan. The ld. CIT(A) relied on Receipt and Payment Rule effective from 1.6.1983 to determine the payment date. The Tribunal, after examining the facts and the ld. CIT(A)'s order, upheld the interest levy due to the delay in TDS deposit, confirming the ld. CIT(A)'s decision.
  
  Significant Phrases:
  - Interest for default u/s 201(1A)
  - Timely TDS deposit
  - Rule 20(i) of Receipts and Payments Rule
  - Date of payment determination
  - Case laws referencing
  - Confirmation of ld. CIT(A)'s order
  - Dismissal of appeals

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• 2013 (4) TMI 963
  
  Issues involved:
  The appeal challenges the order of the Ld.CIT(A)-I, Nashik for the A.Y. 2008-09 regarding the depreciation claimed on the asset 'Licence to collect toll'.
  
  Issue 1: Depreciation on 'Licence to collect toll'
  The controversy revolves around the depreciation claimed by the assessee on the expenditure incurred on the Road Project, the Katni By Pass Road on N.H. 7 in Madhya Pradesh, treated as a 'Licence to collect toll'.
  
  The assessee, engaged in the development, operation, and maintenance of the road on BOT basis, claimed depreciation on 'Licence to Collect Toll'. The Assessing Officer disallowed the claim, allowing amortization instead. The Ld.CIT(A) allowed the claim, considering the 'Right to Collect Toll' as an intangible asset eligible for depreciation under the Income Tax Rules, 1962. The Ld.CIT(A) held that the 'Right to Collect Toll' is a valuable right with commercial value, supported by precedents. The revenue appealed against this decision.
  
  Issue 2: Nature of agreement and eligibility for depreciation
  The Assessing Officer contended that the right of toll collection was a repayment agreement, not a licensing agreement. However, it was acknowledged that the assessee invested its funds for road construction, operated toll plazas, and collected toll as per the agreement with the Government. The Tribunal, in a similar case, upheld the eligibility for depreciation on the 'Right to collect Toll' as an intangible asset under section 32(1)(ii) of the Act.
  
  Judgment Summary:
  The Tribunal affirmed the Ld.CIT(A)'s decision, holding the assessee eligible for depreciation on the 'Right to collect Toll' as an intangible asset. The Tribunal found no reason to interfere with the Ld.CIT(A)'s order, confirming the allowance of depreciation in favor of the assessee. Consequently, the revenue's appeal was dismissed.

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• 2013 (4) TMI 962
  
  Issues Involved:
  1. Quashing of the FIR registered as FIR No. I-1160/2004.
  2. Allegations of cheating and misrepresentation against the Directors.
  3. Legality of multiple complaints for the same set of allegations.
  
  Summary:
  
  Issue 1: Quashing of the FIR registered as FIR No. I-1160/2004
  
  The petitioners sought to quash the FIR No. I-1160/2004 filed on 18/12/2004 with Navrangpura Police Station for offences u/s 403, 406, 416, 417, 420, and 424 of the IPC. The court noted that the petitioners had already resigned as Directors in 1996, and there was an inordinate delay of 8 years in filing the FIR. The court held that the second complaint (FIR No. I-1160/2004) was not maintainable as it amounted to abuse of the process of law. The court emphasized that there cannot be multiple trials for the same offences against the same person.
  
  Issue 2: Allegations of cheating and misrepresentation against the Directors
  
  The allegations were that the Directors of M/s. Lyons Industrial Enterprises Ltd. had floated a public issue of equity shares with false information in the prospectus, thereby cheating the public. The petitioners contended that they were non-active and non-executive Directors and had no role in the day-to-day affairs of the company. They also argued that they had resigned in 1996 and had not attended any board meetings or received any benefits from the company. The court found that the second complaint did not disclose any prima-facie evidence of cheating or misrepresentation by the petitioners.
  
  Issue 3: Legality of multiple complaints for the same set of allegations
  
  The court observed that the respondent no. 2 had already filed a complaint on 19/4/2002 (Criminal Case No. 91/2002) disclosing the names of the Directors and alleging the same set of facts. The court held that the second complaint filed on 18/12/2004 was an attempt to harass the petitioners and amounted to abuse of the process of law. The court relied on the decision in T.T. Antony v/s. State of Kerala, which held that there can be no second FIR for the same offence or occurrence. The court concluded that the second complaint deserved to be quashed.
  
  Conclusion:
  
  The court allowed the petitions and quashed the FIR No. I-1160/2004 pending with the Navrangpura Police Station. The court clarified that the quashing was with reference to the present petitioners only and that the original complainant had the right to take action against the company or its Directors in the first complaint in accordance with law. Rule was made absolute accordingly.

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• 2013 (4) TMI 961
  
  Issues Involved:
  1. Refusal to renew approval u/s 80G(5) of the Income-tax Act, 1961.
  2. Determination of whether the Trust's objects are of a religious nature.
  3. Procedural compliance regarding changes in the Trust's constitution.
  
  Summary:
  
  1. Refusal to Renew Approval u/s 80G(5):
  The appellant, a Charitable Trust registered u/s 12A, appealed against the refusal by the Commissioner of Income-tax (Admn.), Ludhiana, to renew its approval u/s 80G(5) for the assessment years 2008-09 to 2010-11. The Commissioner denied the renewal on the grounds that the Trust's objects had a religious nature, making it ineligible for exemption u/s 80G(5)(iii).
  
  2. Determination of Religious Nature of Trust's Objects:
  The Commissioner found that the Trust's objects, which included propagating the teachings of various religious figures with an emphasis on vegetarianism, had a religious tinge. This was seen as a violation of Explanation 3 to s.80G, which excludes purposes substantially of a religious nature from being considered charitable. The appellant argued that the objects were not confined to any one religion and were aimed at general public utility, thus qualifying as charitable.
  
  3. Procedural Compliance Regarding Changes in Trust's Constitution:
  The Commissioner also objected to the Trust's procedural compliance, noting that changes in the Trust's objects and the increase in the number of trustees were made without approval from the Principal Court of Law. This was seen as a failure to fulfill necessary conditions, referencing the decision in Sakthi Charities v CIT. The appellant countered that these changes were procedural and did not affect the charitable nature of the Trust.
  
  Tribunal's Findings:
  The Tribunal condoned the delay in filing the appeals and admitted them. On merits, it found that the Trust's objects, including the propagation of teachings with an emphasis on vegetarianism, were charitable and not substantially religious. The Tribunal noted that the Trust's activities, such as providing free food, maintaining public parks, and promoting national feelings, were charitable. It concluded that the Trust's objects aligned with the definition of "charitable purpose" u/s 2(15) of the Act. The Tribunal directed the Commissioner to grant approval u/s 80G(5).
  
  Conclusion:
  The Tribunal allowed all the appeals, directing the Commissioner to grant the requested approval u/s 80G(5), recognizing the Trust's objects as charitable and not substantially religious.

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• 2013 (4) TMI 960
  
  Issues involved: Appeal against denial of deduction u/s 80-IB(10) based on built-up area exceeding 1500 sq.ft.
  
  Issue 1: Denial of deduction u/s 80-IB(10) by Assessing Officer
  
  The Assessing Officer denied the assessee's claim for deduction under Section 80-IB(10) due to certain units in the project "Vignesh Paradise" having built-up area exceeding 1500 sq.ft. The assessee requested for proportional deduction, but the Assessing Officer refused to grant it.
  
  Issue 2: CIT(Appeals) decision
  
  The CIT(Appeals) allowed the appeal of the assessee, noting that the project had three distinct phases and the violation of built-up area was limited to two individual houses. The CIT(Appeals) held that deduction was available to each unit and directed the Assessing Officer to grant the deduction claimed under Section 80-IB(10) except for the units exceeding 1500 sq.ft.
  
  Issue 3: Resolution in favor of assessee
  
  During the appeal, it was argued that the issue had been resolved in favor of the assessee based on a decision of the Hon'ble jurisdictional High Court in a specific case. It was acknowledged that the issue of pro rata deduction under Section 80-IB(10) was decided in favor of the assessee.
  
  Judgment:
  
  Upon reviewing the orders and submissions, it was found that the CIT(Appeals) was justified in directing the Assessing Officer to grant the deduction to the assessee except for the units exceeding 1500 sq.ft. The Hon'ble jurisdictional High Court had previously ruled that proportionate deduction must be allowed in cases where some units exceeded the specified built-up area limit. Therefore, the appeal of the Revenue was dismissed, and no interference was deemed necessary.
  
  This judgment highlights the dispute over the denial of deduction under Section 80-IB(10) due to built-up area exceeding the prescribed limit, the successful appeal by the assessee before the CIT(Appeals), and the final decision in favor of the assessee based on relevant legal precedents.

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• 2013 (4) TMI 959
  
  Issues Involved:
  1. Validity of the revised return filed on 24.12.2007.
  2. Correctness of the income assessed at Rs. 51,09,290/- as per the original return.
  3. Applicability and interpretation of Section 143(3)(ii) of the Income Tax Act.
  
  Summary:
  
  Issue 1: Validity of the Revised Return
  The appellant contended that the revised return filed on 24.12.2007 declaring an income of Rs. 33,30,939/- should be considered valid. However, the Commissioner of Income Tax (Appeals) held that this revised return was not valid. The Tribunal noted that the revised return was filed by the assessee's father and beyond the permitted time, thus it was non-est in the eyes of the law and considered only a waste piece of paper.
  
  Issue 2: Correctness of the Income Assessed
  The original return filed on 25.09.2007 declared an income of Rs. 51,09,290/-. The assessee argued that this was a mistake and the correct income was Rs. 33,30,939/-, as shown in the revised computation submitted during the assessment proceedings. The Assessing Officer (AO) and CIT(A) both upheld the income as per the original return, ignoring the revised computation. The Tribunal, however, emphasized that the AO is duty-bound to assess the correct income and should not take advantage of an inadvertent mistake by the assessee.
  
  Issue 3: Applicability of Section 143(3)(ii)
  The assessee argued that u/s 143(3)(ii), the AO has the power to correct the incorrect computation of income. The Tribunal agreed, stating that the AO must consider any evidence produced by the assessee and ensure the correct income is assessed. The Tribunal highlighted that substantial justice should not be defeated on technical grounds and directed the AO to compute the income based on the revised computation filed during the assessment proceedings.
  
  Conclusion:
  The Tribunal allowed the appeal, directing the AO to compute the income based on the revised computation of Rs. 33,30,939/- filed during the assessment proceedings, emphasizing the need for substantive justice over technicalities. The appeal was pronounced allowed in the Open Court on 16th April 2013.

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• 2013 (4) TMI 957
  
  Issues Involved:
  1. Validity of resolutions passed in board meetings and subsequent share allotments.
  2. Allegations of fraud, forgery, and mismanagement.
  3. Maintainability of the company petition considering prior legal proceedings.
  
  Summary:
  
  1. Validity of Resolutions and Share Allotments:
  The petitioners sought to declare as non est the resolutions passed in board meetings held on April 14, 2011, April 27, 2011, May 27, 2011, and June 21, 2011, and to set aside the allotment of 4,00,000 shares on May 12, 2011, 1,90,000 shares on May 17, 2011, and 7,00,000 shares on October 19, 2011. The respondents contended the increase in share capital was due to financial needs and was done lawfully with the digital signature provided by petitioner No. 1.
  
  2. Allegations of Fraud, Forgery, and Mismanagement:
  The petitioners alleged widespread fraud, forgery, and criminal activities by respondents Nos. 2 to 5, including the forgery of resignation letters and the misuse of digital signatures to upload false information on the MCA website. They also claimed gross mismanagement and oppression. The respondents denied these allegations, asserting that the resignation and appointments were legitimate and supported by affidavits from the company secretary, Mr. Jyotirmoy Mishra.
  
  3. Maintainability of the Petition:
  The respondents raised a preliminary objection, arguing that the petitioners approached the Company Law Board with unclean hands by suppressing material facts and not disclosing prior legal proceedings. The petitioners had filed O.S. No. 99 of 2011 and C.P. No. 184 of 2011 on similar grounds, which were pending before the civil court and the High Court of Andhra Pradesh, respectively. The petitioners withdrew these cases without seeking liberty to continue the present petition, thus abandoning their claims. The court held that the petitioners' actions amounted to suppression of material facts and abuse of process, leading to the dismissal of the petition.
  
  Conclusion:
  The Company Law Board dismissed the petition on grounds of suppression of material facts, unclean hands, and abuse of process, noting that the petitioners had not sought liberty to continue the present petition after withdrawing similar cases from other courts. All interim orders were vacated, and all applications were disposed of.

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• 2013 (4) TMI 956
  
  Issues Involved:
  1. Jurisdiction of Small Causes Court to determine the issue of title.
  2. Applicability of Section 14(2) of the Hindu Succession Act, 1956.
  3. Res judicata in the context of Small Causes Court findings.
  4. Maintainability of application under Order IX Rule 13 read with Section 151 of the Code of Civil Procedure by a non-party.
  
  Summary:
  
  1. Jurisdiction of Small Causes Court to determine the issue of title:
  The appellants contended that the Small Causes Court lacked the jurisdiction to determine the issue of title over the property, as such an issue should be adjudicated by a Civil Court. The court held that the Small Causes Court cannot adjudicate upon the issue of title, as per Section 23 of the Provincial Small Cause Courts Act, 1887. The court emphasized that the Small Causes Court only determines the relationship of landlord and tenant, not the title.
  
  2. Applicability of Section 14(2) of the Hindu Succession Act, 1956:
  The appellants argued that the judgment and order dated 23.4.1958 could not be given effect in view of Section 14(2) of the Hindu Succession Act, 1956. The court referred to its previous decisions and held that if a Hindu female has been given only a "life interest" through a Will or gift, the said rights would not crystallize into absolute ownership under Section 14(1) of the Act. Section 14(2) carves out an exception, maintaining the life interest even after the commencement of the Act.
  
  3. Res judicata in the context of Small Causes Court findings:
  The court noted that for res judicata to apply, the finding must dispose of a matter directly and substantially in issue in the former suit. A question regarding title in a small cause suit is incidental to the substantial issue in the suit. Therefore, a finding on title by a Small Causes Court does not operate as res judicata in subsequent regular suits for determining or enforcing any right or interest in the immovable property.
  
  4. Maintainability of application under Order IX Rule 13 read with Section 151 of the Code of Civil Procedure by a non-party:
  The court held that an application under Order IX Rule 13 CPC cannot be filed by a person who was not initially a party to the proceedings. Inherent powers under Section 151 CPC can be exercised only where no remedy is provided under the CPC. If an order is obtained by fraud upon the court, the court can recall it on the application of the aggrieved person. However, if fraud is committed upon a party, the court cannot investigate it under Section 151 CPC, and the aggrieved party must file an independent suit.
  
  Conclusion:
  The appeals were allowed, and the impugned judgment and order were set aside. The respondents were given liberty to seek appropriate remedy through permissible legal proceedings.

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• 2013 (4) TMI 955
  
  Issues involved:
  The maintainability of a special leave petition against the order passed in a review petition.
  
  Judgment Summary:
  
  Issue 1: Maintainability of special leave petition against order in review petition
  
  The appeal challenged the judgment and order of the High Court dismissing the review petition. The appellant argued that the issue required reconsideration by a three-Judge Bench based on the provisions of Order 47 Rule 7 of the CPC. The Court considered previous decisions, including Vinod Kapoor v. State of Goa, Suseel Finance & Leasing Co. v. M. Lata, and M.N Haider v. Kendriya Vidyalaya Sangathan. It was observed that a special leave petition under Article 136 of the Constitution is not maintainable against the order rejecting the review petition alone. The Court emphasized the importance of respecting previous judgments and dismissed the appeal as not maintainable.
  
  Issue 2: Maintainability of special leave petition after withdrawing earlier petition
  
  Another appeal challenged the judgment and order of the High Court dismissing the writ petition. The Court noted that the petitioner had withdrawn a previous special leave petition with permission to pursue a review instead, without seeking permission to challenge the High Court's order afresh in case the review was unsuccessful. Citing Vinod Kapoor v. State of Goa, the Court held that the civil appeal was not maintainable and dismissed it without delving into the case's merits. The Court rejected the argument that the issue had been referred to a larger Bench in a different case, stating that the facts were distinct and the reference order did not apply.
  
  This summary provides a detailed overview of the judgment, highlighting the key issues and the Court's decisions on each matter.

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• 2013 (4) TMI 954
  

  Writ Petition - Complete ban on mining - large scale illegal mining at the cost and to the detriment of the environment - encroachment into forest areas by leaseholders and ongoing mining operations without requisite statutory approval - Central Empowered Committee ("the CEC") was asked to submit a report on the allegations of illegal mining in the Bellary region of the State of Karnataka - two lessees have sought upgradation from "C" to "B" Category - restricted six mining leases granted in favour of M/s. Bellary Iron Ore Pvt. Ltd., M/s. Mahabaleswarapa & Sons, M/s. Ananthapur Mining Corporation and M/s. Obulapuram Mining Company Pvt. Ltd. -

  HELD THAT:- We accept the findings of the survey conducted by the Joint Team constituted by the orders of this Court and the boundaries of each of the leases determined on that basis. We further direct that in supersession of all orders either of the authorities of the State or Courts, as may be, the boundaries of leases fixed by the Joint Team will henceforth be the boundaries of each of the leases who will have the benefit of the lease area as determined by the Joint Team. All proceedings pending in any court with regard to boundaries of the leases involved in the present proceeding shall stand adjudicated by means of present order and no such question would be open for re-examination by any body or authority.

  Whether categorization on the basis of percentage of the encroached area qua the total lease area is an arbitrary decision - Arbitrariness in the adoption of a criteria for classification has to be tested on the anvil of Article 14 and not on the subjective notions of availability of a better basis of classification. The basis suggested i.e. total encroached area has the potential of raising questions similar to the ones now raised on behalf of the lease holders.

  The only caveat in this regard is in respect of category 'C' mines. The Federation had suggested that the said mines be also allowed to reopen subject to similar or even more stringent conditions and, alternatively, for reopening of 39 total out of the total of 49 category 'C' mines by adoption of certain more liberal criteria than those recommended by the CEC. In the totality of the circumstances, we are of the view that the categorization suggested by the CEC in its Report dated 3.2.2012 should be accepted by us.

  There is nothing in the preconditions or in the details of the R&R plans suggested which are contrary to or in conflict or inconsistent with any of the statutory provisions of the MMDR Act, EP Act and FC Act. In such a situation, while accepting the preconditions subject to which the Category 'A' and 'B' mines are to be reopened and the R&R plans that must be put in place for Category 'B' mines, we are of the view that the suggestions made by the CEC for reopening of Category 'A' and 'B' mines as well as the details of the R&R plans should be accepted by us, which we accordingly do. This will bring us to the most vital issue of the case, i.e., the future of the Category 'C' mines.

  Illegal mining apart from playing havoc on the national economy had, in fact, cast an ominous cloud on the credibility of the system of governance by laws in force. It has had a chilling and crippling effect on ecology and environment. It is evident from the compilation submitted to the Court by the CEC that several of the Category 'C' mines were operating without requisite clearances under FC Act or even in the absence of a mining lease for a part of the area used for mining operations.

  The satellite imageries placed before the Court with regard to environmental damage and destruction has shocked judicial conscience. It is in the light of the above facts and circumstances that the future course of action in respect of the maximum violators/polluters, i.e., Category 'C' mines has to be judged. While doing so, the Court also has to keep in mind the requirement of Iron Ore to ensure adequate supply of manufactured steel and other allied products.

  Once the result of the survey undertaken and the boundaries of the leases determined by the Joint Team has been accepted by the Court and the basis of categorization of the mines has been found to be rational and constitutionally permissible it will be difficult for this Court to visualize as to how the Category 'C' mines can be allowed to reopen.

  There is no room for compassion; fervent pleas for clemency cannot have even a persuasive value. As against the individual interest of the Category 'C' lease holders, public interest at large would require the Court to lean in favour of demonstrating the efficacy and effectiveness of the long arm of the law. We, therefore, order for the complete closure of the Category 'C' mines and for necessary follow up action in terms of the recommendations of the CEC in this regard, details of which have already been extracted in an earlier part of this order.

  In so far as settlement of the inter-state boundaries between the States of Andhra Pradesh and Karnataka is concerned, both the States have agreed to have the boundaries fixed under the supervision of the Geological Survey of India. In view of the agreement between the States on the said issue we permit the States to finalize the issue in the above terms. The operation of the 7 leases (Category B1) located on or near the inter-State boundary is presently suspended. Until the boundary issue between the two States is resolved resumption of mining operations in the 7 leases cannot be allowed.

  The CEC has provisionally categorised M/s. S.B. Minerals and Shanthalakshmi Jayaram in Category "B" though the encroached area under illegal mining pits has been found to be 24.44% and 23.62% respectively. According to the CEC, it is on account of "the complexities involved in finalizing the survey sketches and in the absence of inter-village boundary" that the said leases have been placed in Category "B" instead of Category "C".

  We cannot agree with the tentative decision of the CEC. On the basis of the findings of the survey and the categorization made, both of which have been accepted by the Court by the present order, we direct that the aforesaid two leases, namely, M/s. S.B. Minerals and M/s. Shanthalakshmi Jayaram be placed in Category "C". Necessary consequential action will naturally follow.

  The CEC in its Report dated 28.3.2012 has placed the cases of M/s. V.S. Lad & Sons and M/s. Hothur Traders (placed in Category "C") for final determination by the Court. The CEC has reported that the encroachment by M/s. V.S. Lad & Sons is only in respect of the overburden dumps and exceeds the percentage (15%) marginally, i.e., by 0.17% which could very well be due to the least count error used by the Joint Team.

  In so far as M/s. Hothur Traders is concerned the CEC in its Report dated 28.3.2012 has recorded that according to the lessee it has carried on its mining operation for the last 50 years in the lease area allotted to it which may have been wrongly identified in the earlier surveys and demarcations by taking into account a wrong reference point.

  In the result, we summarize our conclusions in the matter as follows:

  (1) The findings of the survey conducted by the Joint Team constituted by this Court by order dated 6.5.2011 and boundaries of the leases in question as determined on the basis of the said survey is hereby approved and accepted.

  (2) The categorization of the mines ("A", "B" and "C") on the basis of the parameters adopted by the CEC as indicated in its Report dated 3.2.2012 is approved and accepted.

  (3) The order of the Court dated 13.4.2012 accepting the recommendations dated 13.3.2012 of the CEC (in modification of the recommendations of the CEC dated 3.2.2012) in respect of the items (A) to (I) is reiterated. Specifically, the earmarked role of the Monitoring Committee in the said order dated 13.4.2012 is also reiterated.

  (4) The order of the Court dated 3.9.2012 in respect of reopening of 18 Category "A" mines subject to the conditions mentioned in the said order is reiterated.

  (5) The order of the Court dated 28.9.2012 in all respects is reiterated.

  (6) The recommendations of the CEC contained in the Report dated 15.2.2013 for reopening of remaining Category "A" mines and Category "B" mines (63 in number) and sale of sub-grade iron ore subject to the conditions mentioned in the said Report are approved.

  (7) The recommendations contained in paragraphs VI and VII (Pg. 56 to 57) of the CEC Report dated 3.2.2012 are accepted, meaning thereby, the leases in respect of "C" Category mines will stand cancelled and the recommendations of the CEC (para VII Pg. 56) of Report dated 3.2.2012 with regard to the grant of fresh leases are accepted.

  (8) The proceeds of the sales of the Iron Ore of the 'C' Category mines made through the Monitoring Committee will stand forfeited to the State. The Monitoring Committee will remit the amounts held by it on this account to the SPV for utilization in connection with the purposes for which it had been constituted.

  (9) M/s. V.S. Lad & Sons, M/s. Hothur Traders, M/s. S.B. Minerals (ML No. 2515) and M/s. Shanthalakshmi Jayaram (ML No. 2553) will be treated as "C" Category mines and resultant consequences in respect of the said leases will follow.

  (10) The operation of the 7 leases placed in "B" category situated on or nearby the Karnataka-Andhra Pradesh inter-State boundary will remain suspended until finalisation of the inter-State boundary dispute whereupon the question of commencement of operations in respect of the aforesaid 7 leases will be examined afresh by the CEC.

  (11) The recommendations made in the paragraph VIII of the Report of the CEC dated 3.2.2012 (pertaining to M/s. MML, Pg. 57) is accepted. The recommendations made in paragraphs IX, X, XII (in respect of confiscated iron-ore) XIII and XIV of the said Report dated 3.2.2012 (Pg. 57-60) will not require any specific direction as the same have already been dealt with or the same have otherwise become redundant, as may be.

  (12) The recommendations made in paragraph XI (grant of fresh leases) and paragraph XII (in respect of pending applications for grant of mining leases) of the CEC's Report dated 3.2.2012 (Pg. 59) are not accepted. In view of the discussions and conclusions in para 44 of the present order, this Court's order dated 02.11.2012 placing an embargo on grant of fresh mining leases need not be continued any further. Grant of fresh mining leases and consideration of pending applications be dealt with in accordance with law, the directions contained in the present order as well as the spirit thereof.

  (13) Determination of the inter-State boundary between Karnataka and Andhra Pradesh in so far as the same is relevant to the present proceedings, as agreed upon by the two States, be made through the intervention of the office of Surveyor General of India.

  We also direct that all consequential action in terms of the present order be completed with the utmost expedition. The writ application filed by Samaj Parivartan Samudaya and IAs shall stand disposed of in terms of our above stated conclusions.

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• 2013 (4) TMI 953
  
  Issues Involved:
  1. Whether the multiplier specified in the Second Schedule appended to the Motor Vehicles Act, 1988 should be scrupulously applied in all cases?
  2. Whether for determination of the multiplicand, the 1988 Act provides for any criterion, particularly as regards determination of future prospects?
  
  Summary:
  
  Issue 1: Multiplier Specified in the Second Schedule

  A two-Judge Bench referred to a larger Bench the question of whether the multiplier specified in the Second Schedule should be a guiding factor for calculating compensation in cases under Section 166 of the Motor Vehicles Act, 1988. The referral order highlighted that while some cases like Patricia Jean Mahajan and Abati Bezbaruah treated the multiplier as a guiding factor, others like Shanti Pathak advocated for a lesser multiplier without a clear legal principle. The Court noted that the Second Schedule only requires the multiplier to be applied in cases of disability in non-fatal accidents, not in fatal accident cases. The Court emphasized the need for principles to ensure that compensation under Section 166 is not less than that under Section 163A, which is based on a 'no fault liability' system.

  Issue 2: Determination of Multiplicand and Future Prospects

  The judgment discussed the background of no fault liability and the introduction of Sections 163A and 166 in the 1988 Act. Section 163A provides for compensation on a structured formula basis without the need to prove negligence, while Section 166 requires proof of negligence. The Court examined various precedents and concluded that the multiplier method is the established norm for determining compensation. The Court approved the table in Sarla Verma for selecting the multiplier and standardized the addition to income for future prospects, recommending a 50% addition for those below 40 years with a permanent job, 30% for those aged 40-50, and no addition for those above 50. For self-employed individuals, no addition to income for future prospects was deemed appropriate.

  Guidelines for Determination of Compensation:

  The Court provided detailed guidelines for determining compensation in death cases under Section 166:

  (i) For deceased aged 15 years and above, the multiplier from Sarla Verma should be used.

  (ii) For deceased aged up to 15 years, a multiplier of 15 should be applied.

  (iii) No need to rely on the Second Schedule for claims under Section 166 for deceased above 15 years.

  (iv) Follow steps and guidelines from Sarla Verma for determining compensation.

  (v) For future prospects, follow the addition rules from Sarla Verma.

  (vi) For personal and living expenses deductions, follow the standards from Sarla Verma.

  (vii) Apply these guidelines to all pending matters.

  Conclusion:

  The reference was answered accordingly, and the civil appeals were directed to be posted for hearing and disposal before the regular Bench.

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