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Showing 41 to 60 of 1328 Records
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2014 (4) TMI 1292
Addition of “Annual Maintenance Contract” expense made by the AO without rejecting the books of accounts u/s.145(3) - adhoc disallowance of 15% of the total expenditure claimed without any basis and the same should be extracted to a reasonable disallowance - HELD THAT:- Having heard the submissions of both the sides, we are of the view that although the assessee has placed on record the income tax returns of those parties, barring few, the details of the payment, details of tax deducted at source, which was duly supported by their respective statements recorded by the AO but still the learned CIT(A) thought it proper to adopt a reasonable percentage of disallowance. As far as the documents are concerned, a voluminous compilation is placed before us pertained to ledger account; invoices and bank statements.
Additionally, it has also been argued before us that none of the parties were related to the assessee and there was no allegation of the Revenue that the payment was made to the connected parties. In support of this contention that in a situation when the payment has been made to unconnected parties and TDS was deducted then the disallowance of expenditure was not justified, a case law of ITAT ‘D’ Bench Ahmedabad pronounced in the case of BMS Projects Pvt. Ltd. [2013 (1) TMI 1044 - ITAT AHMEDABAD] has also been cited.
Considering all we have noted that one of the party was suffering from cancer out of the five parties who have not been produced, therefore, further relief can be granted to the assessee. However to cover up any leakage and also considering the fact that rest of the four parties could not be produced we hereby restrict the disallowance to a round figure of Rs.20 lacs which according to us is a fair and reasonable estimate. Ground of the Revenue stands dismissed.
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2014 (4) TMI 1291
Criminal conspiracy - Dishonest application for a car loan of Rs. 5 lakhs and opened a bank account bearing No. 1277 on 24.08.2002 without proper introduction - commission of offences Under Section 120B Indian Penal Code read with Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act and Sections 420/471 Indian Penal Code - HELD THAT:- The charges framed against the accused-Appellant, it may be repeated, are Under Section 120B Indian Penal Code read with Section 13(2) read with Section 13(1)(d) of the PC Act and Sections 420/471 of the Indian Penal Code. It is true that in NIKHIL MERCHANT VERSUS CENTRAL BUREAU OF INVESTIGATION AND ANR. [2008 (8) TMI 966 - SUPREME COURT] the charges framed against the accused were also Under Sections 120B read with Section 5(2) and 5(1)(d) of the PC Act, 1947 (Section 13(2) read with 13(1)(d) of the PC Act, 1988) and Sections 420, 467, 468, 471 of the Indian Penal Code.
In para 28 of the judgment in NIKHIL MERCHANT VERSUS CENTRAL BUREAU OF INVESTIGATION AND ANR. [2008 (8) TMI 966 - SUPREME COURT] on a consideration of the totality of the facts and circumstances in which the charges were brought against the accused this Court had come to the conclusion that The basic intention of the accused in this case appears to have been to misrepresent the financial status of the Company, M/s. Neemuch Emballage Ltd., Mumbai, in order to avail of the credit facilities to an extent to which the Company was not entitled. In other words, the main intention of the Company and its officers was to cheat the Bank and induce it to part with additional amounts of credit to which the Company was not otherwise entitled.
The Court, thereafter, took into account the fact that the dispute between the parties had been settled/compromised and such compromise formed a part of the decree passed in the suit filed by the bank. After holding that the power Under Section 482 Code of Criminal Procedure to quash a criminal proceeding was not contingent on the provisions of Section 320 of the Code of Criminal Procedure, and taking into account the conclusion recorded in para 28 of the judgment, as noticed above, the Court ultimately concluded that in the facts of the case it would be justified to quash the criminal proceeding.
At the very outset a detailed narration of the charges against the accused-Appellant has been made. The Appellant has been charged with the offence of criminal conspiracy to commit the offence Under Section 13(1)(d). He is also substantively charged Under Section 420 (compoundable with the leave of the Court) and Section 471 (non-compoundable). A careful consideration of the facts of the case would indicate that unlike in Nikhil Merchant (supra) no conclusion can be reached that the substratum of the charges against the accused-Appellant in the present case is one of cheating - The offences are certainly more serious; they are not private in nature. The charge of conspiracy is to commit offences under the Prevention of Corruption Act. The accused has also been charged for commission of the substantive offence Under Section 471 Indian Penal Code.
If the High Court has taken the view that the exclusion spelt out in GIAN SINGH VERSUS STATE OF PUNJAB & ANOTHER [2012 (9) TMI 1112 - SUPREME COURT] applies to the present case and on that basis had come to the conclusion that the power Under Section 482 Code of Criminal Procedure should not be exercised to quash the criminal case against the accused, we cannot find any justification to interfere with the said decision.
The appeal filed by the accused is dismissed.
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2014 (4) TMI 1290
Deemed dividend u/s 2(22)(e) - Addition based on peak amount of the debit balance - ITAT deleted the addition that after merging all accounts, the final position is zero in the balance sheet in the name of the assessee in the books of accounts of the company as on 31.03.2008 - HELD THAT:- Though the said Company did advance loan to the assessee in different accounts, it is also an established fact that in two separate accounts, the assessee was the creditor of the Company - At the end of the year, this exactly is the amount which is in net the assessee withdrew from the company, may be in different accounts.
The peak credit in different accounts never exceeded Rs.13.16 crore. Under the circumstances, the CIT (Appeals) as well as the Tribunal, both took an overall view of the accounts of the assessee and the said Company to hold that section 2(22)(e) of the Act would not apply. As is well known, section 2(22)(e) of the Act pertains to dividend, which would include several payments made by the Company.
In particular clause (e) of the said subsection (22) pertains to payment by a company to which a legal friction would arise and such payment shall be deemed to be dividend distributed by such company to the person. It is well known that a legal friction can arise only at the circumstance in which the legislature envisages giving rise to the same. In the present case, when the very fundamental condition of a payment made by the Company is on facts found not established, in our opinion, both the CIT (Appeals) and the Tribunal correctly refused to apply the said section. Decided against revenue.
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2014 (4) TMI 1289
CENVAT Credit - duty paying invoices - input service distribution - credit denied on the ground that though input service invoices were issued in the name of their Head Office and services wholly were not received by their factory, and payments were made from the Head Office, and it was not registered as an Input Service Distributor - invoices issued by the Head Office, could be considered as valid documents for availing CENVAT Credit by the Applicant at its factory or not - HELD THAT:- The Applicant had availed the CENVAT Credit on the invoices issued by the Head Office during the relevant time, i.e. April, 2005 to December, 2006. During the relevant time, the Head Office was not registered as an 'Input Service Distributor', and hence, the invoices issued by the Head Office, prima facie, could not be valid/correct documents for availing the CENVAT Credit, being not mentioned at Rule 9 of CENVAT Credit Rules, 2004. This Tribunal has been consistently directing predeposit in those cases where head office of the assessee-company is not registered as an 'Input Service Distributor' under the relevant provisions, but issue invoices distributing the Credit.
There are also no merit in the contention of the Id. Consultant, at this stage, that to be an 'Input Service Distributor', there should be more than one unit.
The Applicant are directed to deposit 10% of the CENVAT Credit of Rs.36,45,963/- within a period of eight weeks from today - On deposit of the said amount, the balance dues adjudged would stand waived and its recovery stayed during pendency of the Appeal - Compliance to be reported on 07.03.2014.
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2014 (4) TMI 1288
Deduction of amortized expenses - HELD THAT:- Appeal admitted on following substantial questions of law:
(i) Whether on the facts and in the circumstances of the case and in law the Hon'ble Tribunal was justified in holding that the amortized amount of the premium on investments cannot be added back to the balance of the profits as there is no specific prohibition against the allowance of such expenditure under Sections 30 to 43B of the Income Tax Act, 1961 even though such expenditure is to be added back in terms of Clause 5(a) of the First Schedule of the Income Tax Act, 1961?
(ii) Whether on the facts and in the circumstances of the case and in law the Hon'ble Tribunal was justified in holding that the amortized amount of the premium on investments, which is not admissible under Sections 30 to 43B of the Income Tax Act and is required to be added back as per the provisions of Clause 5(a) of the First Schedule of the Income Tax Act, cannot be allowed to be added back to the balance of profits as there is no specific prohibition against the allowance of such expenditure under sections 30 to 43B of the Income Tax Act, 1961?
(iii) Whether on the facts and in the circumstances of the case and in law the Hon'ble Tribunal was justified in holding that the preoperative expenses amounting to Rs.1,40,30,352/- can be amortized and claimed over a period of several years when there is no provision under the Income Tax Act to admit such an allowance?
(iv) Whether on the facts and in the circumstances of the case and in law the Hon'ble Tribunal was justified in holding that the preoperative amortized expenses can be claimed as a deduction in a previous year in which it has not been incurred?
(v) Whether on the facts and in the circumstances of the case and in law the Hon'ble Tribunal was justified in holding that profit of Rs.47,45,859/- on sale of investments is exempt in view of the CBDT Circular No.528 dated 16.12.1988 even though the said circular was for General Insurance Corporation of India and its subsidiaries which are wholly owned enterprises of the Union of India?
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2014 (4) TMI 1287
Disallowance u/s 14A r.w.r. 8D - assessee has submitted that neither the assessee had earned any exempt income nor any expenditure had been incurred for earning of the exempt income - HELD THAT:- As in the case of Godrej & Boyce Manufacturing Co. Ltd.[2010 (8) TMI 77 - BOMBAY HIGH COURT] has held that Rule 8D r.w.s. 14A(2) is not arbitrary or unreasonable but can be applied only if the assessee's method is not satisfactory. It has been further held that Rule 8D is not retrospective and applies from A.Y. 2008-09.
As further observed that u/s 14A resort can be made to Rule 8D of the Income Tax Rules for determining the amount of expenditure in relation to exempt income, if, the AO is not satisfied with the correctness of the claim made by the assessee in respect of such expenditure.
A perusal of the assessment order reveals that the AO without recording any dissatisfaction with regard to the claim of the assessee that no expenditure was incurred by the assessee for earning the exempt income, straightway applied Rule 8D against the mandate of the provisions of section 14A - CIT(A) also ignored the contentions raised by the assessee while confirming the disallowance.
We restore this issue back to the file of the AO with a direction that the AO will examine the contentions of the assessee made in this regard. AO will be at liberty to call for any record/evidences or statement etc. from the assessee as may be required by him for deciding the issue under consideration.
After going through the details provided by the assessee, if the AO will be satisfied with the contentions or working, if any, made by the assessee then he will assess the income accordingly - if the AO does not agree with the computation made by the assessee and in that event, he will have to record his dissatisfaction with reasoning for the same by way of a speaking order, then he will be at liberty to resort to the provisions of Rule 8D. Needless to say, the assessee will co-operate and promptly supply the necessary details etc. to the AO for deciding the issue under consideration. Appeal of the assessee is allowed for statistical purposes.
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2014 (4) TMI 1286
Recovery of outstanding dues - petitioner filed a claim before the Micro and Small Enterprises Facilitation Council of the State of Uttar Pradesh at Kanpur claiming an award - submission of the petitioner is that once the petitioner had invoked the provisions of the 2006 Act, the Facilitation Council was conferred with the exclusive jurisdiction under Section 18 to enter upon the dispute and to initially conduct the conciliation proceedings.
HELD THAT:- Chapter V of the Act contains special provisions in regard to delayed payments to Micro and Small Enterprises. Section 15 provides that where any supplier supplies any goods or renders any services to any buyer, the buyer shall make payment on or before the date agreed upon between him and the supplier in writing or, where there is no agreement, before the appointed day. The proviso stipulates that, in any case, the period agreed upon between the supplier and the buyer shall not exceed forty-five days from the day of acceptance or the day of deemed acceptance. Section 16 provides for the payment of interest by the buyer at three times of the Bank rate notified by the Reserve Bank upon a failure of the buyer to make payment, as required under Section 15 notwithstanding anything contained in any agreement or in any law for the time being in force.
The petitioner invoked the provisions of the 2006 Act by filing a reference to the Facilitation Council on 3 October 2011. There was undoubtedly a dispute between the petitioner and the respondents in regard to the claim of the petitioner arising out of non payment of its bills. The respondents appointed a sole arbitrator on 5 October 2011 after the petitioner had invoked the intervention of the Facilitation Council on 3 October 2011 under Section 18 of the 2006 Act. Once the jurisdiction of the Facilitation Council has been validly invoked, the Council has exclusive jurisdiction to enter upon conciliation in the first instance and after conciliation has ended in failure, to refer the parties to arbitration - The Facilitation Council was clearly in error in entertaining the objection filed by the respondents and referring the petitioner to the sole arbitrator so designated by the respondents.
The impugned order of the Facilitation Council directing the parties to a reference before the sole arbitrator appointed by the respondents was manifestly illegal - the proceedings are restored back to the first respondent - The first respondent shall now act in accordance with the provisions of sub-section (3) of Section 18 and either conduct the arbitration itself or refer the arbitral proceedings to any institution or centre providing alternate dispute resolution services. The first respondent shall pass necessary orders in consequence of this direction within a period of one month from the receipt of a certified copy of this order.
Petition allowed.
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2014 (4) TMI 1285
Recovery of sales tax dues of the company in liquidation - priority to be observed in the matter of payment of debts in the case of winding up - It was held by the HIgh Court that If the sale is held free of encumbrances and if the State is allowed to pursue its claim as against the property, it would naturally bring the sale under a cloud and there would be no end to the litigation which would in the ultimate analysis be not only against the interests of persons whose interests are sought to be secured by the Companies Act on the basis of priority, but against the scheme of the Companies Act.
HELD THAT:- There are no merit in the Special Leave Petition. It stands dismissed accordingly.
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2014 (4) TMI 1284
Seeking grant of Bail - counterfeiting currency note or bank note - HELD THAT:- The applicant, as stated in the complaint itself, is a permanent resident of Old Goa, Panaji and is not a stranger to the complainant and other witnesses who are mostly the employees of the said Company. It is not the case of the respondents that there are any criminal antecedents with regard to the applicant. Appropriate conditions can be imposed upon the applicant to ensure his presence during trial.
The stage has come now to release the applicant on bail as no purpose will be served by detaining him in custody any more - bail application allowed.
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2014 (4) TMI 1283
Unexplained investment - NRI company made share subscription to the capital of respondent - A.O. directed addition of the amount of share subscription to assessee's income due to doubt ob crediworthiness of subscriber company - HC held that if assessee Company having received subscriptions and furnished complete details of the shareholders, no addition could be made under section 68 in the absence of any positive material or evidence to indicate that the shareholders were benamidars or fictitious persons or that any part of the share capital represented company's own income from undisclosed sources - HELD THAT:- Delay condoned. Appeal Dismissed.
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2014 (4) TMI 1282
Unaccounted investment made by the assessee in purchase of the subject property - CIT-A deleted the addition - as argued that the Director of APIPL had, on oath, admitted that the acquired value mentioned in the seized material (computer sheet) was the value which was paid to the land owners for the purchase of the property by the assessee - HELD THAT:- CIT (A) had called for a remand report wherein the AO, admittedly, conceded that the said addition was made in the hands of the assessee purely based on the report of the ADIT (Inv). Surprisingly, the ADIT (Inv) came to a conclusion by relying on the statement of Sri Aga, Director of APIPL, on oath.
As a matter of fact, APIPL had nothing to do with the transaction between the assessee and the sellers of the subject property, namely, Shri Chennappa and Shri Jagadish Chandra Ankalagi.
Since the issue which has been examined in detail by the CIT (A) has not been disputed by the Revenue with any documentary evidence even during the course of hearing before us, we are of the view that the CIT (A) was justified in deleting the addition made by the AO. It is ordered accordingly.- Decided against revenue.
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2014 (4) TMI 1281
Addition in the income declared from contract business - HELD THAT:- CIT(A) has placed reliance on certain cases belong to contractors but as we have already stated, the factual matrix of comparable cases, definitely differ and have little nuance regarding the nature of business, that is , if they are obtaining contract from government/semi government departments or from private parties and respective turnover disclosed by them. But the contract work done also depends on the place(s) where the parties are executing their contract work. In case the past history of the assessee is not available, then in that eventuality, the history of comparables has been treated as a good guidance by the courts - in the given case, when the history of the assessee itself exists, there is no need to jump the gun and ignore its past history.
We hold that the results shown during the year under consideration being better than the results shown in the immediately preceding A.Y., there is no reason to make any further addition on this count. Accordingly, we order to delete the entire addition made in the trading results disclosed by the assessee and more particularly, to delete the impugned addition sustained by the ld. CIT(A) - we allow Ground No. 1 of this appeal.
Income from other sources - addition has been made because the assessee has shown interest income on FDRs in its profit and loss account and on that basis alone, the A.O. persuaded himself to treat this interest income as income from other sources - Whether CIT(A) has grossly erred in holding the income from interest liable to be assessed separately even after holding the same as income from business which is not a separate source of income liable to be taxed separately and is to be considered as part of income from contract business? - HELD THAT:- A.O. has ignored the contention of the assessee that FDRs were purchased for taking contract work and therefore, the interest accruing on these FDRs would become its business income. The assessee filed copies of FDRs, which were pledged with various government department. The A.O. or the ld. CIT(A) have not disputed the above mentioned facts. In our considered opinion, his interest income would partake the character of business income only. In such like cases, we have taken numerous decisions in the same lines. Accordingly, after considering this interest income as part of business income as has been claimed by the assessee, we allow Ground No. 2 of this appeal as it has been prayed for.
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2014 (4) TMI 1280
Seeking unsealing and releasing of the premises - Section 11 of the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 - HELD THAT:- It is the settled position of law that a lawful tenant cannot be evicted from the tenanted premises without following the due process of law as enumerated in the Rent Act prevailing at the relevant time. Thus, we find substance in the contention of learned counsel for the Appellants. If the premises are directly handed over to Respondent No.2 in the present Appeals preferred by the Appellants, then it would certainly amount to dispossessing the Appellants / tenants without following the due process of law.
The impugned order in the present Appeals was passed on 19 March 2004. The investigation pertaining to the aforesaid MECR No.1 of 2003 has been completed on 23 November 2004 and after its completion a charge-sheet has been filed before the concerned Court and it is now culminated in MPID Special Case No.34 of 2004. The investigating agency by its report dated 26 February 2014 has clearly mentioned that the Appellants have no role to play in the said crime bearing MECR No.1 of 2003 and the Appellants had given the premises Nos.502 and 501 respectively to the original accused viz. Roofit Industries Limited and its directors purely on ex-gratis basis.
Appeal allowed - decided in favor of appellant.
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2014 (4) TMI 1279
Seeking a direction to the MPRTC to immediately hand over possession of the land - Seeking to grant permission to demolish the existing structure - breach of contract by MPRTC entered into with the Appellant - privity of contract - HELD THAT:- The scope of judicial review is very limited in contractual matters even where one of the contracting parties is the State or an instrumentality of the State. The parameters within which power of judicial review can be exercised, has been authoritatively laid down by this Court in a number of cases.
At no stage, the Appellant had any privity of contract with IDA. MPRTC entered into a BOT contract with the Appellant contrary to the terms and conditions of the lease which provided specifically that the land shall be used for constructing a bus stand-cum commercial complex. MPRTC had no legal right to create any further right in favour of the Appellant with regard to the receiving of the premium on the constructed units sold to third party(ies). Even otherwise, the Appellant seems to be flogging a dead horse. Admittedly, the possession of the proposed site was delivered to MPRTC on 22nd January, 1982 - The renewal clause in the lease subsequently provides that the renewal shall be with the consent of IDA. This consent by the IDA is not a mere formality.
Appeal dismissed.
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2014 (4) TMI 1278
TDS u/s 194C - amount paid to the lorry drivers/owners exceeded the threshold limit of ₹ 50,000 - disallowance U/s. 40(a)(ia) - CIT (A) held that the amendment to Section 194C (1) (k) of the Act is applicable from 01.06.2007 i.e., for the relevant assessment year 2008-09 onwards - HELD THAT:- As decided in SATISH AGGARWAL AND COMPANY. [2008 (11) TMI 322 - ITAT AMRITSAR] nothing had been brought on record by the Department to the effect that man power was provided along with the trucks to the assessee by the truck owners. Mere provision of the trucks without any man power could not be termed as carrying out any work by the truck owners, for which any payment was made by the assessee.
When the assessee entered into a contract for the purpose of taking temporary possession of trucks from the truck owners, it did not amount to the assessee entering into any contract for carrying out any work. Once the contract was not for carrying out any work, the provisions of section 194C were not attracted. Explanation III to Section 194C can not apply to a situation not amounting to a contract for carrying out any work as contemplated in section194C, and entering into a contract for hiring of trucks was not equivalent to entering into a contract for carrying out any work. Therefore, Explanation III to section 194C was not attracted
Provisions of section 194C will not be applicable in the present assessee’s case before us and therefore, provisions of Section 40(a)(ia) cannot be invoked for both the assessment years. Accordingly, this issue is decided in favour of the assessee.
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2014 (4) TMI 1277
Taxability and the extent qua the income from off-shore supply of equipments; income from on-shore equipments; income from on-shore services; and income from design and engineering services - Transfer Pricing Adjustment - HELD THAT:- Such issues have been sent back by the tribunal to the AO/TPO for a fresh decision in accordance with the specific directions given therein. Since both the sides are in agreement that the facts and circumstances as well as the grounds of the extant appeal are mutatis mutandis similar to those for A.Y. 2008-09, following the precedent we set aside the impugned order and remit the matter to the file of AO/TPO for deciding these issues afresh in conformity with the directions by the Tribunal in its order for A.Y. 2008-09 [2014 (3) TMI 368 - ITAT DELHI].
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2014 (4) TMI 1276
Dishonor of Cheque - bailable offence or not - Seeking grant of anticipatory bail under section 438 of Cr.P.C. - issuance of non-bailable warrant passed by the Additional Chief Metropolitan Magistrate - whether this Court can invoke its power under section 438 of Cr. P.C. to grant anticipatory bail when the Magistrate has issued non-bailable warrant in the case filed under section 138 of N.I. Act? - HELD THAT:- A Magistrate who issues a warrant knows fully why the accused is avoiding to remain present before the Court and non-appearance causes obstruction in the smooth working of the Court. It is a hurdle in speedy disposal of the matter and therefore the Magistrate issues non-bailable or bailable warrant. On number of occasions, a Magistrate is constrained to issue non-bailable warrant to compel a person to appear before the Court as the trial is at a standstill for want of appearance. To remove this stagnation, the appearance is a must. Though pre-arrest bail can be granted under section 438, however, it cannot be granted in any or each and every impending arrest in non-bailable offence, which is pursuant to a warrant of arrest issued by the learned Magistrate for any other purpose but not under section 204 of Cr. P.C. Thus, anticipatory bail cannot be sought when warrant is issued during the trial due to non-attendance of the accused.
The anticipatory bail, which is an extraordinary provision which protects the liberty of an individual can be used before he is taken into custody by the police first time after the registration of an offence against him. Once he is taken in custody, this power is not available to the Court and also cannot be invoked. Thus, within the purport of Section 438 of Cr. P.C. grant of pre-arrest bail is not available to the Sessions Court or the High Court when warrant of arrest issued is by the Magistrate except warrant of arrest issued under section 204 of Cr. P.C. Under section 204 of Cr. P.C. the Magistrate takes cognizance and thereafter issues the warrant, so this is the first instance that the person is booked for some offence, which may be either by the police or by the Magistrate.
Thus, arrest pursuant to warrant of arrest issued under section 70 of the Code has wider import than the arrest apprehended under section 438 of the Code. It needs to be clarified that such order of issuance of warrant of arrest by the Magistrate can be challenged before the High court under section 482 of the Code or by filing Writ under Article 226/227 of the Constitution, but not under section 438 of the Cr. P.C. - In the present case, the learned APP has pointed out that this applicant/accused has been deliberately avoiding to appear before the learned Magistrate.
Application dismissed.
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2014 (4) TMI 1275
Dispute between Income tax department and statutory Board under the provisions of Chandigarh Administration - Payment of tax by the Chandigarh Housing Board to the Income Tax Department - HELD THAT:- A sum of ₹ 278 crores, which was deposited by the Chandigarh Housing Board in the Government treasury, is agreed to be adjusted in Income Tax head and it is treated as final insofar as liability of Income Tax is concerned. Having regard to the settlement reached between the parties, it is clear that the dispute regarding payment of tax by the Chandigarh Housing Board to the Income Tax Department stands resolved. It is further agreed that no penalty proceeding would be initiated against the Chandigarh Housing Board. However, it is also stated that the decision in this regard can further be taken only by the competent Income Tax authority.
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2014 (4) TMI 1274
Revision u/s 263 - Short Term Capital Gains from the sale of debentures and shares - as per CIT AO did not carry out any enquiry as warranted by facts and circumstances of the case in respect of capital gain arising from the sale of debentures and shares in the period relevant to the AY under consideration - Whether there is any distinction between unlisted shares and shares listed on recognized stock exchange for classifying them as Short Term Capital Asset under the Act? - HELD THAT:- The amendment was brought by the Finance Act, 1994 w.e.f. 01- 04-1995 to include the securities listed on stock exchange, units of UTI, units of specified Mutual Funds and Zero coupon bonds to bring them at par with shares. Circular No.684 dated 10-06-1994 spells out the reasons for inclusion of listed securities, units of UTI etc., within the ambit of Section 2(42A).
The section does not create any distinction between listed and unlisted shares. However, listing of securities is essential prerequisite to fall within the ambit of the term ‘Short Term Capital Asset’ defined in section 2(42A). DR has submitted that as per the Securities Contracts (Regulation) Act, 1956, the term ‘Securities’ include shares. The relevant extract of section 2(h) of the Securities Contract (Regulation) Act, 1956 which defines the term ‘securities’.
Although, under the Securities Contracts (Regulation) Act, the term ‘Securities’ include shares, but in section 2(42A) of the Act, shares have been mentioned separately. Thus, the intention of the Legislature while introducing the amendment to the Act was very much clear not to include shares in the term ‘security’. From the above discussion, we conclude that there is no distinction between unlisted and listed shares for classifying them as Short Term Capital Asset under the Act.In the present case, undisputedly the holding period of the shares is more than twelve months. Thus, the capital gain arising from the sale of shares is Long Term Capital Gain.
We are of the considered opinion that the Commissioner of Income Tax and CIT(Appeals) are two separate authorities exercising their jurisdiction under the different provisions of the Act. The Commissioner of Income Tax exercising his revisional jurisdiction remanded the matter back to Assessing Officer to decide the issue afresh. The Assessing Officer decided the issue in accordance with the directions of Commissioner of Income Tax. The CIT(Appeals) has appellate powers under the Act to examine the assessment order passed by the Assessing Officer. Therefore, we do not agree with the contentions of the ld.DR that the CIT(Appeals) has gone beyond his jurisdiction in reversing the findings of the Commissioner of Income Tax. - Decided against revenue.
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2014 (4) TMI 1273
Maintainability of suit - whether the suit can be referred to arbitration or not - HELD THAT:- The Defendant No. 1 has defaulted in performing its obligations in respect of its trading on the Plaintiff Exchange. Detailed material has been produced with the Plaint, inter alia: Ledger accounts and Clearing Bank Statement of Defendant No. 1, wherein the transactions are reflected - 1st Defendant has clearly admitted its liability to the Plaintiff for a sum of ₹ 693 crores by its letter dated 1st August 2013 at Exhibit Y to the Plaint, and also agreed unconditionally to make payment by installments in 20 weeks. Some amounts were paid, but in view of subsequent defaults the Plaintiff addressed a notice dated 28th August 2013 at Ex "Z" to the Plaint, declaring Defendant No. 1 as a defaulter.
The Plaint and the documents produced therewith show that criminal proceedings have been initiated against Defendant 1 and some of its directors. The EOW and ED have both initiated action in the course of which some arrests have also been made. Exhibits "BB" and "CC" are press reports which mention that the ED has attached properties of Defendant 1 and investigation has revealed that large amounts were siphoned off to invest in the real estate project of Defendant No 20.
The Plaintiff has made out a strong case for being entitled at this stage to limited adinterim relief, interalia, in view of the averments made in the Plaint including the statements in paragraph 9,10, 18 to 21 thereof, and material placed on the record - It is not necessary to consider this question at this ad interim stage. As and when any application under section 8 of the Arbitration & Conciliation Act, 1996 is made by any party the same will be considered on its own merits.
S.O. to 21st April 2014 for consideration of further ad interim relief/s.
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9911796707
