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2010 (7) TMI 1197
Issues Involved:
1. Gender Bias in Compensation Assessment
2. Valuation of Homemaker's Services
3. Criteria for Determining Compensation
4. Application of Section 163A of the Motor Vehicles Act
5. Judicial Precedents on Compensation Calculation
6. Errors in Tribunal and High Court's Judgment
Issue-wise Detailed Analysis:
1. Gender Bias in Compensation Assessment:
The judgment highlights a distinct gender bias against women in the implementation of social welfare legislations and judicial pronouncements, despite the constitutional mandate to eschew discrimination on grounds of sex as per Article 15(1) of the Constitution. The bias is evident in the Motor Vehicles Act, 1988, where Clause 6 of the Second Schedule categorizes the income of a non-earning spouse (usually a homemaker) as 1/3rd of the income of the earning spouse, undervaluing the services rendered by homemakers.
2. Valuation of Homemaker's Services:
The judgment criticizes the Census of India 2001 for categorizing homemakers as non-workers, equating them with beggars, prostitutes, and prisoners. This categorization reflects a strong gender bias and an insensitive approach towards the dignity of labor concerning women. The judgment emphasizes the significant contribution of homemakers in various sectors, including agriculture and household management, which goes unrecognized and undervalued.
3. Criteria for Determining Compensation:
The judgment discusses various methods for assessing the value of a homemaker's unpaid labor, such as the opportunity cost, partnership method, and replacement method. It refers to the Madras High Court's judgment in Minor Deepika, which highlights the need to scientifically assess the value of unpaid homemaker's work in accident claims and matrimonial property division. The judgment also refers to international examples, such as the Constitution of Cambodia, which recognizes the value of housewives' work equivalent to their potential earnings outside the home.
4. Application of Section 163A of the Motor Vehicles Act:
Section 163A provides for compensation on a structured formula basis, with Clause 6 of the Second Schedule setting notional income for non-earning persons at Rs. 15,000 per annum and 1/3rd of the income of the earning spouse for a non-earning spouse. The judgment questions the rationality of this categorization and calls for a rethinking by the Parliament to properly assess the value of homemakers' work and amend related laws accordingly.
5. Judicial Precedents on Compensation Calculation:
The judgment reviews several precedents, including General Manager Kerala State Road Transport Corporation v. Susamma Thomas, U.P. S.R.T.C. v. Trilok Chandra, and Sarla Verma v. Delhi Transport Corporation, which establish the multiplier method for determining compensation. It also refers to international cases like Berry v. Humm and Co. and Regan v. Williamson, which recognize the pecuniary value of a wife's services beyond mere housekeeping.
6. Errors in Tribunal and High Court's Judgment:
The Tribunal and High Court erred in not awarding just and fair compensation by undervaluing the services of the deceased homemaker. The Tribunal assessed the income of the deceased at Rs. 5,000 per month but reduced the compensation to Rs. 2,50,000 without tangible reasons. The High Court further reduced the valuation of the deceased's services to Rs. 1,250 per month, failing to recognize the immense importance of a homemaker's contributions.
Conclusion:
The Supreme Court allowed the appeal, set aside the judgments of the Tribunal and High Court, and held that the appellants are entitled to compensation of Rs. 6 lacs. The judgment underscores the need for a gender-sensitive approach in assessing compensation for homemakers and calls for legislative amendments to ensure just compensation for their invaluable services. The respondent was directed to pay the compensation along with interest and costs within three months.
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2010 (7) TMI 1196
The Supreme Court of India dismissed the special leave petition in the case, with delay condoned. The respondent did not appear. Key names mentioned: Mr. Vivek Tankha, Mr. Prateek Jalan, Mr. Yatinder Chaudhary, Mr. B.V. Balaram Das.
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2010 (7) TMI 1195
Whether the provision that prescribes retiring the persons from public employment in the State of Nagaland on completion of 35 years service from the date of joining or until attaining the age of 60 years, whichever is earlier, is arbitrary, irrational and violative of Articles 14 and 16 of the Constitution - In Present case, On July 8, 2009 a Bill titled `The Nagaland Retirement from Public Employment (Second Amendment) Bill, 2009' (`Amendment Bill') was introduced. By the said Bill the length of service of the State Government employees was proposed to be restricted to 35 years from the date of joining of service or till he/she attains the age of 60 years, whichever is earlier. The State Legislature of Nagaland, on July 10, 2009 unanimously passed the Amendment Bill. Thus by Second Amendment Act, 2009, Section 3 of 1991 Act as amended by 1st Amendment Act, 2007, was substituted. On July 20, 2009, the State Government issued Office Memorandum (OM) requesting all departments to submit the list of employees, who had completed 35 years of service by October 31, 2009. The appellant-Association prayed that 2nd Amendment Act, 2009 be quashed to the extent it has introduced 35 years' service as one of the conditions for retirement of government employees and direction be issued to the State to superannuate its employees only on attaining the prescribed age of 60. The Association also prayed for quashing OM dated July 20, 2009.
HELD THAT:- Suffice it to say that alternative mode of retirement provided in the impugned provision is applicable to all State Government employees. There is no discrimination. The impugned provision prescribes two rules of retirement, one by reference to age and the other by reference to maximum length of service. The classification is founded on valid reason. Pertinently, no uniformity in length of service can be maintained if the retirement from public employment is on account of age since age of the government employees at the time of entry into service would not be same. Conversely, no uniformity in age could be possible if retirement rule prescribes maximum length of service. The age at the time of entry into service would always make such difference. In our view, challenge to the impugned provision based on the aforesaid ground must fail.
In the light of the foregoing considerations, we hold that a provision such as that at issue which prescribes retiring the persons from public employment in the State of Nagaland on completion of 35 years' service from the date of joining or until attaining the age of 60 years, whichever is earlier, does not suffer from the vice of arbitrariness or irrationality and is not violative of Articles 14 and 16 of the Constitution. The appeal has no merit and is dismissed with no order as to costs.
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2010 (7) TMI 1194
Supreme Court of India dismissed the appeal in the case with citation 2010 (7) TMI 1194 - SC. Judges were Mr. D.K. Jain and Mr. H.L. Dattu.
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2010 (7) TMI 1193
Issues Involved:
1. Suppression of material facts by the appellant in her writ petition.
2. Applicability of the norms for grant of dealership as circulated by the brochure dated 1.11.2004 and compliance by respondent No. 1 - Corporation.
3. Validity and genuineness of the lease deed dated 18.3.2004 submitted by respondent No. 2.
Issue-wise Detailed Analysis:
1. Suppression of Material Facts by the Appellant:
The Division Bench accepted the finding of the learned Single Judge that there was no suppression of material facts by the writ petitioner, the appellant. It was noted that it was not a requirement of the advertisement that the land documents had to be submitted along with the application.
2. Applicability of the Norms for Grant of Dealership:
The Division Bench did not accept the conclusion of the learned Single Judge that was based on Clause 14 and the norms contained in the brochure dated 1.11.2004. It was held that the selection was conducted in accordance with the policy circular dated 4.9.2003, which was in force at the time of the interview/selection on 16.6.2004. The circular dated 1.11.2004, which introduced the requirement for site verification prior to the interview, was not applicable as it came into effect after the selection process was completed.
3. Validity and Genuineness of the Lease Deed:
The Division Bench concluded that the lease deed dated 18.3.2004, although not registered, could still be considered genuine due to its notarization. It was held that non-registration under Section 107 of the Transfer of Property Act would not affect the document's genuineness, which was established by the notary public's attestation. Consequently, it was determined that the award of 25 marks to respondent No. 2 for "capability to provide land and infrastructure/facilities" was justified and did not materially influence the end result.
Additional Considerations:
The learned Single Judge's decision to quash the entire selection process was deemed unnecessary. The Division Bench noted that under Clause 5.4 of the policy circular dated 4.9.2003, if the Letter of Intent (LOI) to the No. 1 candidate is cancelled, it should be given to the next candidate in the merit panel. However, since the candidates at Nos. 2 and 3 did not challenge the selection, the entire selection process should not have been set aside.
Conclusion:
The Supreme Court dismissed the appeals, emphasizing that the selection process, though flawed, did not warrant setting aside the dealership granted to respondent No. 2. The Court took into account the subsequent events, including the substantial investments made by respondent No. 2 and the public interest in maintaining the retail outlet's operation. The Court found no allegations of manipulation or undue favor towards respondent No. 2 and noted the dealership's successful operation over five years. Thus, the Supreme Court declined to exercise its extraordinary jurisdiction under Article 136 of the Constitution to set aside the selection.
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2010 (7) TMI 1192
Issues involved: Appeal challenging order granting deduction under 'bad debts' u/s 36 of Income Tax Act, 1961.
Summary:
1. The Assessee entered into agreements with Vinayaka Enterprises for land development. After termination of the agreements, a debt of Rs. 19,24,09,280 remained unpaid. The Assessee claimed this amount as a bad debt written off in their income tax return for the assessment year 2001-02.
2. The Assessing Officer disallowed the claim stating the debtor had resources to pay and legal proceedings were initiated. The Commissioner of Income Tax upheld this decision. The Tribunal, however, held that the debt should be considered bad as on the date of write-off, not based on future recovery possibilities. Legal proceedings post write-off do not affect the claim.
3. The Tribunal's decision was challenged by the revenue, arguing the debtor's capacity to repay and the Assessee's intention to reduce tax liability. The Respondent-Assessee justified the claim, stating the debt was genuinely written off as bad when recovery seemed remote.
4. The Court found the Assessee had fulfilled the conditions u/s 36(1)(vii) and Sub-section (2) of the Act by writing off the debt as bad and irrecoverable after showing it in their returns and paying tax on it. The subsequent recovery efforts and legal proceedings did not invalidate the claim.
5. The Court dismissed the revenue's appeal, upholding the Tribunal's decision to grant the deduction under 'bad debts' u/s 36 of the Income Tax Act, 1961.
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2010 (7) TMI 1191
Issues Involved:
1. Jurisdiction and propriety of the Magistrate in granting bail.
2. Validity of the refusal of police custody by the Magistrate.
3. Applicability of Section 167 and Section 309 of Cr.P.C. in granting police custody post-cognizance.
4. Interlocutory nature of orders granting bail and refusing police custody.
5. Grounds for cancellation of bail by superior courts under Section 439(2) Cr.P.C.
Issue-wise Detailed Analysis:
1. Jurisdiction and Propriety of the Magistrate in Granting Bail:
The petitioners, senior officers of the Municipal Corporation of Navi Mumbai, were accused of aiding a contractor in committing forgery and misappropriation, resulting in a loss of over Rs. 1,38,00,000 to the Corporation. The Magistrate granted bail to the petitioners hastily, without giving the prosecution sufficient time to oppose the bail application or to file for police custody. The court found that the Magistrate's order was passed without proper application of mind and was based on an overruled authority. The court emphasized that the Magistrate showed undue haste and failed to consider the gravity of the allegations.
2. Validity of the Refusal of Police Custody by the Magistrate:
The Magistrate refused police custody on the ground that once a charge sheet is filed and cognizance is taken, only judicial custody can be granted, citing the Bombay High Court's decision in Mohammed Yasin Mansuri. However, this decision was overruled by the Supreme Court in State through CBI vs. Dawood Ibrahim Kasker, which clarified that Section 167 Cr.P.C. applies to a person arrested during further investigation even after cognizance is taken. The court held that the Magistrate's refusal to grant police custody was incorrect and based on an overruled judgment.
3. Applicability of Section 167 and Section 309 of Cr.P.C. in Granting Police Custody Post-Cognizance:
The Supreme Court in Dawood Ibrahim Kasker held that Section 167 applies to an accused arrested during further investigation, allowing for police custody even after cognizance is taken. The court reiterated that the words "accused if in custody" in Section 309(2) refer to an accused present before the court when cognizance was taken, not to one arrested later during further investigation. Thus, the Magistrate could have granted police custody under Section 167.
4. Interlocutory Nature of Orders Granting Bail and Refusing Police Custody:
The court examined whether orders granting bail or refusing police custody are interlocutory. It cited Supreme Court judgments stating that while the grant or refusal of bail is interlocutory, the refusal of police custody is not, as it has finality and cannot be repeatedly sought. The court concluded that the Magistrate's refusal of police custody was not an interlocutory order and could be challenged under revisional jurisdiction.
5. Grounds for Cancellation of Bail by Superior Courts under Section 439(2) Cr.P.C.:
The court referred to several Supreme Court judgments, including Puran vs. Rambilas and Subodh Kumar Yadav, which allow superior courts to cancel bail if it is granted without jurisdiction, on irrelevant material, or with manifest impropriety. The court found that the Magistrate granted bail without proper consideration of the seriousness of the offences and without giving the prosecution a fair opportunity to oppose. This justified the cancellation of bail under Section 439(2) Cr.P.C.
Conclusion:
The court dismissed the petitioners' writ petition and allowed the intervener's application, setting aside the bail granted by the Magistrate. The petitioners were directed to present themselves before the Judicial Magistrate, who would reconsider the request for police custody. The court clarified that after the expiry of police custody, the petitioners could apply for bail again, which would be decided in accordance with the law.
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2010 (7) TMI 1190
Issues involved:
The issues involved in the judgment are the entitlement to exemption u/s 11 of the Income Tax Act, 1961 and the requirement of filing a revised return of income for claiming such exemption.
Entitlement to Exemption u/s 11:
The appellant, a society engaged in scientific research, filed a return of income claiming exemption u/s. 10(21) but was denied by the Assessing Officer due to being categorized as an "institution" instead of an "association." The appellant's alternate claim for exemption u/s 11 was also rejected for not filing a revised return and lack of signed Form 10B by the Auditors. However, the Ld. Commissioner of Income Tax (Appeals) allowed the benefit of section 11, citing the appellant's registration u/s. 12A and submission of the audit report during assessment proceedings. The Tribunal affirmed this decision, emphasizing that a genuine claim of exemption should not be denied solely based on the absence of a revised return, as per legal precedents and constitutional provisions.
Requirement of Filing Revised Return:
The revenue contended that since the appellant did not claim the exemption in the original return or through a revised return, the Ld. Commissioner of Income Tax (Appeals) should not have allowed the claim. However, the Tribunal held that the genuineness of the claim was not in question, and the denial based on the lack of a revised return was not justified. Citing legal principles and constitutional provisions, the Tribunal emphasized that a valid claim of exemption should not be denied due to procedural technicalities. The Tribunal dismissed the revenue's appeal, affirming the decision of the Ld. Commissioner of Income Tax (Appeals).
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2010 (7) TMI 1189
Determination of tariff applicable to the Non-Conventional Energy generation projects of Andhra Pradesh - Non-Conventional Energy Development Corporation of Andhra Pradesh Ltd. and Transmission Corporation of Andhra Pradesh Ltd. ('NEDCAP' and 'APTRANSCO' respectively), the Regulatory Commission - fixed the energy purchase rates - restricted sale, procurement and distribution of electricity by the Developers to any other party except APTRANSCO - Power Purchase Agreement ('PPA') - Jurisdiction Regulatory Commission - Feeling aggrieved from the order of the Tribunal the Transmission Corporation of Andhra Pradesh Ltd. as well as Eastern Power Distribution Company of Andhra Pradesh Ltd. have come up in appeal before this Court u/s 125 of the Electricity Act, 2003. the main controversy, in the present case relating to the jurisdiction and fixation of tariff by the Regulatory Commission.
HELD THAT:- the restriction with regard to third party sales was not only creation of a directive issued or approval granted by the Regulatory Commission, but was actually in furtherance to the contract entered into between the parties. Rights and liabilities arising from a binding contract cannot be escaped on the basis of some presumptions or inferences in relation to the facts leading to the execution of the contract between the parties. The jurisdiction of the Regulatory Commission, in the facts of the case, arises not only from the statutory provisions under the different Acts but also in terms of the contract executed between the parties which has binding force. Lastly, but with great emphasis, it was argued on behalf of the respondents that enforcement of the purchase price at the rate determined by the Regulatory Commission along with complete prohibition on the right of the Non-conventional Energy Generator/Developers to sell generated power to the third parties would compel them to shut down their projects. The rates are so unfair that it would result in extinguishment of the power generating units from the State of Andhra Pradesh on the one hand, while on the other, it is bound to prejudicially affect the larger public interest. According to the respondents they have invested large sums of money in developing these generating units and it will be unfair to compel their closure, particularly, when for all these years they have supplied electricity generated by them solely to APTRANSCO or its predecessors. All these projects, admittedly, were established in furtherance to the scheme and the guidelines provided by the Central Government which, in turn, were adopted with some modification by the State Government. The State Electricity Board implemented the said scheme and initially had permitted sale of generated electricity to third parties, however, subsequently and after formation of the Regulatory Commission which, in turn, took over the functions of the State Electricity Board, the incentives were modified and certain restrictions were placed. The reasons for these restrictions have been stated in the affidavit filed on behalf of the appellants which, as already noticed by us, is not a matter to be examined by this Court in exercise of its extra-ordinary jurisdiction. These matters, essentially, must be examined by expert bodies particularly, when such bodies are constituted under the provisions of a special statute.
The two corporations proposed thereunder were to be constituted to perform various functions and to ensure efficiency and social object of ensuring a fair deal to the customer. These objects and reasons clearly postulated the need for introduction of private sector into the field of generation and distribution of energy in the State. Efficiency in performance and economic utilization of resources to ensure satisfactory supply to the public at large is the paramount concern of the State as well as the Regulatory Commission. The policy decisions of these constituents are to be in conformity with the object of the Act. Thus, it is necessary that the Regulatory Commission, in view of this object, take practical decisions which would help in ensuring existence of these units rather than their extinguishment as alleged.
In view of our detailed discussion, we dispose of these appeals with the order.
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2010 (7) TMI 1188
Title: Supreme Court of India dismisses special leave petition
Citation: 2010 (7) TMI 1188 - Supreme Court
Judges: Hon'ble the Chief Justice, Hon'ble Mr. Justice K.S. Radhakrishnan, and Hon'ble Mr. Justice Swatanter Kumar
Representation: Petitioner represented by Mr. R.P. Bhatt, Sr. Adv., Mr. C.V.S. Rao, Adv., Mr. Rahul Kaushik, Adv., Mr. B.V. Balaram Das, Adv.
Decision: Delay condoned; special leave petition dismissed.
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2010 (7) TMI 1187
Exemption u/s 80G - Renewal of recognition u/s 80G denied on the ground that the assessee had violated the conditions as laid down in s.80G(5)(ii) and (iii) - assessee trust is doing charitable work without any discrimination on the basis of caste, creed or religion - HELD THAT:- The assessee trust’s hospital had treated 8,51,127 patients of non-Christian community out of 9,00,406 total patients received treatments which works out to 94.5%. Likewise, for the F.Y.2009-10, the total number of patients received various treatments from its hospital were 9,07,641, out of which, 8,50,146 patients were not belonging to the Christian community. This very fact belies the finding of the Ld. DIT(E) that the assessee-trust had served only its community and was being run for the benefit of Catholics.
When the assessee-trust was established in sixties the very object must have been for the benefit of Catholics, however, in practice the other community patients who have out-numbered the Christian community indeed received treatments from its hospital cannot be looked in isolation. Even on a glimpse of statistics provided, we find that out of the total number of 685 students admitted in its Medical College, 195 students were from Hindu community, 24 from Muslim and the remaining were from various sects of Christian community. Likewise, the number of staffs employed in its various institutions such as Research Institute, Medical College, Hospital etc., we find that a fair number of staffs were from other communities too.
This precisely contradicts the finding given by the Ld. DIT (E) in his impugned order that 80% of the total number of students from Christian community and the position of non-teaching staff were around 90% from its community and so on so forth.
Assessee-trust has been serving the humanity in its noble profession – rendering timely treatment to the needy without discriminating the caste, creed, community etc.- one should approach its cause with a wider perception rather than trying to read between the lines.
Provisions of s.80G(5)(iii) cannot be applied to the instant case since the assessee trust’s beneficiaries being the society at large and NOT to be beneficiary of Catholics alone as alleged by the Ld. DIT(E). - Decided in favour of assessee.
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2010 (7) TMI 1186
Issues Involved:
1. Maintainability of the writ petition due to availability of alternative remedy.
2. Prematurity of the writ petition.
3. Maintainability of the writ petition due to delay and laches.
4. Bar of the writ petition by res judicata.
5. Status of the area in question as reserved or non-reserved.
6. Preferential right of the petitioner under Section 11 of the M.M. (D&R) Act.
7. Validity of the recommendation made by the State Government under Section 11(5) of the M.M. (D&R) Act in favor of POSCO.
Detailed Analysis:
1. Maintainability of the writ petition due to availability of alternative remedy:
The Court held that the writ petition is maintainable despite the availability of an alternative remedy under Section 30 of the M.M. (D&R) Act, 1957 read with Rule 54 of M.C. Rules, 1960. The Court emphasized that no order had been passed on the petitioner's applications, and the recommendation in favor of POSCO could not be construed as an order attracting the provisions of Rule 54. The Court referenced the Supreme Court's decision in Whirlpool Corporation v. Registrar of Trade Marks, which allows writ petitions in cases involving violation of natural justice, jurisdictional issues, constitutionality of state action, or fundamental rights.
2. Prematurity of the writ petition:
The Court found the writ petition to be not premature. It noted that the petitioner approached the Court when its right to be considered along with POSCO was threatened. The Court referenced the principle from Bengal Immunity Co. Ltd. v. State of Bihar, which allows for preemptive action to prevent harm.
3. Maintainability of the writ petition due to delay and laches:
The Court rejected the argument of delay and laches. It noted that the petitioner had been actively pursuing its applications and had approached the Court at appropriate times, including filing intervention applications and previous writ petitions. The Court referenced the communication from the Directorate of Mines dated 5.11.2004, which indicated that the petitioner's applications were under consideration, thus negating the argument of inaction.
5. Status of the area in question as reserved or non-reserved:
The Court held that the area in question was non-reserved. It found that the 1962 notifications lost their force after Rule 58 of the M.C. Rules was omitted in 1988 and further due to the incorporation of Section 17-A of the M.M. (D&R) Act in 1987, which required Central Government approval for reservations. The Court referenced the Supreme Court's decision in M.A. Tulloch, which emphasized that repealed provisions without saving clauses lose their validity.
6. Preferential right of the petitioner under Section 11 of the M.M. (D&R) Act:
The Court held that the petitioner was entitled to a preferential right of consideration over later applicants whose applications were filed after 29.10.1991. It referenced the Supreme Court's decision in Indian Metals & Ferro Alloys Ltd. v. Union of India, which upheld the principle of preferential right for earlier applicants, subject to the conditions under Section 11(5) of the Act.
7. Validity of the recommendation made by the State Government under Section 11(5) of the M.M. (D&R) Act in favor of POSCO:
The Court found the recommendation in favor of POSCO invalid. It noted that the State Government failed to provide "special reasons" as required under Section 11(5) and that the reasons cited were similar to those under Section 11(3), which are not sufficient for invoking Section 11(5). The Court referenced the Central Government's guidelines, which emphasized that "special reasons" must be stronger and exceptional.
Conclusion:
The writ petition was allowed, and the recommendation made by the State Government in favor of POSCO was set aside. The State Government was directed to take a fresh decision in accordance with the order of the Revisional Authority and the guidelines issued by the Ministry of Mines, Government of India, ensuring the petitioner's preferential right of consideration. The entire exercise was to be completed within four months. The intervention application of M/s VISA Steel Ltd. was rejected, with the option to file an independent writ application if advised. No order as to costs was made.
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2010 (7) TMI 1185
Issues Involved:
1. Nature of the property sold (capital asset vs. stock-in-trade).
2. Treatment of income from the sale (business income vs. long-term capital gains).
3. Validity of protective assessments (short-term capital gains and long-term capital gains).
4. Levy of interest u/s 234A, 234B, and 234C.
Summary:
1. Nature of the Property Sold:
The primary issue was whether the property sold by the assessee was a capital asset or stock-in-trade. The assessee argued that the property was a long-term capital asset, as it was shown as a fixed asset in the balance sheet, and rental income from it was declared as 'income from house property'. The Assessing Officer (AO) contended that the property was stock-in-trade, citing the nature of the assessee's business and the fact that the property was not let out for nine years before the sale.
2. Treatment of Income from the Sale:
The AO treated the sale proceeds as business income, arguing that the property was held for business purposes. The CIT(A) upheld this view. However, the assessee maintained that the surplus should be treated as long-term capital gains, as the property was always treated as a capital asset, and no depreciation was claimed on it. The Tribunal agreed with the assessee, noting that the property was consistently shown as a capital asset and rental income was assessed as 'income from house property'.
3. Validity of Protective Assessments:
The AO made protective assessments treating the surplus as short-term capital gains u/s 50 and as long-term capital gains. The Tribunal found no basis for these protective assessments, as the property was not a depreciable asset, and the assessee had not claimed depreciation on it. Therefore, the protective assessments were deemed unsustainable.
4. Levy of Interest u/s 234A, 234B, and 234C:
The assessee disputed the levy of interest u/s 234A, 234B, and 234C, arguing that no opportunity was given before the levy. The Tribunal did not specifically address this issue in the judgment.
Conclusion:
The Tribunal held that the property sold by the assessee was a capital asset, and the surplus from the sale should be treated as long-term capital gains. The protective assessments made by the AO were not sustainable. The appeal filed by the assessee was allowed, and the AO was directed to accept the computation of long-term capital gains returned by the assessee.
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2010 (7) TMI 1184
The Supreme Court of India dismissed the Civil Appeal in a judgment by Dr. Mukundakam Sharma and Anil R. Dave, JJ. The delay was condoned. Key representatives included Mr. V. Sridharan, Mr. B. L. Narsimhan, and Mr. M.P. Devanath.
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2010 (7) TMI 1183
Issues involved: Interpretation of provisions of Income Tax Act regarding treatment of liabilities towards gratuity, leave encashment, and unclaimed deductions in Profit and Loss Account.
Issue 1: Liability towards gratuity
The High Court admitted the appeal under Section 260A of the Income Tax Act to consider whether the Income-Tax Appellate Tribunal was correct in treating an amount representing liability towards gratuity as an unascertained liability, leading to an increase in book profit as per Section 115JA(1) of the Act. The court will examine the justification of this treatment in law.
Issue 2: Liability towards leave encashment
Another substantial question of law raised in the appeal is whether the Income-Tax Appellate Tribunal erred in not allowing the deduction of the liability towards leave encashment from the income computed under the Income Tax Act, despite a precedent set by the Supreme Court in the case of Bharat Earthmovers v. CIT. The court will assess the correctness of this decision in light of the established legal principles.
Issue 3: Unclaimed deductions
The third issue to be addressed is whether the Income Tax Appellate Tribunal was correct in not deducting an additional amount from the income, even though no such deduction was claimed in the income computation or reflected in the Profit and Loss Account. The court will review the circumstances of the case to determine the validity of this decision.
The judgment highlights the specific legal questions arising from the treatment of liabilities towards gratuity and leave encashment, as well as the consideration of unclaimed deductions in the context of the Income Tax Act. The court will analyze these issues to provide clarity on the correct interpretation and application of the relevant provisions of the Act.
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2010 (7) TMI 1182
Issues Involved:
1. Specific Performance of Contract
2. Refund of Earnest Money
3. Legal Bar due to Mortgage and Permissions
4. Increase in Market Value of Property
5. Discretion of Court in Granting Specific Performance
Summary:
1. Specific Performance of Contract:
The Trial Court partially decreed the suit for specific performance, ordering a refund of Rs. 10,000 with interest. The First Appellate Court decreed the suit entirely, granting specific performance upon obtaining necessary permissions u/s 12(c) of the Maharashtra Re-settlement of Project Displaced Persons Act, 1976, and u/s 47(2) of the Maharashtra Cooperative Societies Act, 1960. The High Court upheld this decree. The Supreme Court affirmed the findings, noting that the respondent was always ready and willing to perform her part of the contract and had paid Rs. 10,000 as earnest money.
2. Refund of Earnest Money:
The Trial Court directed the appellants to refund Rs. 10,000 with 6% interest per annum. The First Appellate Court set aside this decree and granted specific performance instead. The Supreme Court upheld this decision, emphasizing that the respondent had satisfied all requirements for specific performance.
3. Legal Bar due to Mortgage and Permissions:
The appellants contended that the property was mortgaged to a cooperative society, and thus, no title could be passed. The Supreme Court noted that no specific evidence was provided by the appellants to substantiate this claim. The Court held that the restriction u/s 48(d) of the Societies Act is conditional and can be overcome by repaying the loan. The Court also noted that the appellants failed to prove that the property was under any legal bar due to the Re-settlement Act.
4. Increase in Market Value of Property:
The appellants argued that the land's value had increased, making it unjust to pass a decree for specific performance. The Supreme Court dismissed this argument, stating that the increase in land value is not a valid ground to deny specific performance. The respondent's offer to pay Rs. 1,50,000 instead of Rs. 40,000 as the total sale consideration was deemed fair by the Court.
5. Discretion of Court in Granting Specific Performance:
The Supreme Court emphasized that the discretion to grant specific performance lies with the Court and must be exercised based on equitable principles. The Court found that the respondent met all conditions for specific performance and that the appellants' defense was not credible. The Court directed the respondent to pay Rs. 1,50,000, and upon payment, the sale deed should be registered in favor of the respondent.
Conclusion:
The Supreme Court dismissed the appeal, upholding the decree for specific performance with the modification that the respondent would pay Rs. 1,50,000 as the total sale consideration. The parties were directed to bear their own costs.
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2010 (7) TMI 1181
Suit for specific performance of an oral agreement for "commercial collaboration for business benefits" - validity of a novel and innovative direction by the High Court, purportedly issued to discourage frivolous and speculative litigation - appellant claims to be a builder and real estate dealer - Whether a court has the power to pass an order directing a plaintiff in a suit for specific performance (or any other suit), to file an undertaking that in the event of not succeeding in the suit, he shall pay ₹ 25 lakhs (or any other sum) by way of damages to the defendant - whether the collaboration agreement, as alleged by the appellant, is specifically enforceable, having regard to the prohibition contained in Section 14(1)(b) and (d) of the Specific Relief Act, 1963.
HELD THAT:- The appellant claims to be a builder and real estate dealer. If the appellant entered into a collaboration agreement orally with numerous details as set out in the plaint (extracted in Para (2) above) and could secure a receipt in writing for ₹ 51,000/-, nothing prevented him from reducing the said terms of the alleged collaboration agreement in the form of an agreement or Memorandum of Understanding and have it signed by the owners of the property. No reason is forthcoming as to why that was not done.
The property stands in the name of second respondent (Defendant No. 2), but she did not sign the receipt. There is nothing to show that the second respondent participated in the alleged negotiations or authorized her husband-the first respondent to enter into any collaboration agreement in respect of the suit property. The receipt is not signed by the first respondent as Attorney Holder or as the authorized representative of the owner of the property. From the plaint averments it is evident that appellant did not even know who the owner was, at the time of the alleged negotiations and erroneously assumed that first respondent was the owner. The execution of a receipt for ₹ 51,000/- by the first respondent even if proved, may at best make out a tentative token payment pending negotiations and finalization of the terms of an agreement for development of the property.
The agreement is alleged to have been entered on 10.6.2004. But the plaintiff issued the first notice calling upon defendants to perform, only on 9.3.2007 and filed the suit on 30.6.2007. There was no correspondence or demand for performance, in writing, prior to 9.3.2007, even though the alleged agreement was a commercial transaction.
Every person has a right to approach a court of law if he has a grievance for which law provides a remedy. Certain safeguards are built into the Code to prevent and discourage frivolous, speculative and vexatious suits.
Code, nowhere authorizes or empowers the court to issue a direction to a plaintiff to file an undertaking to pay damages to the defendant in the event of being unsuccessful in the suit. The Code also does not contain any provision to assess the damages payable by a plaintiff to defendant, when the plaintiff's suit is still pending, without any application by defendant, and without a finding of any breach or wrongful act and without an inquiry into the quantum of damages. There is also no contract between the parties which requires the appellant to furnish such undertaking. None of the provisions of either TP Act or Specific Relief Act or any other substantive law enables the court to issue such an interim direction to a plaintiff to furnish an undertaking to pay damages. In the absence of an enabling provision in the contract or in the Code or in any substantive laws a court trying a civil suit, has no power or jurisdiction to direct the plaintiff, to file an affidavit undertaking to pay any specified sum to the defendant, by way of damages, if the plaintiff does not succeed in the suit. In short, law does not contemplate a plaintiff indemnifying a defendant for all or any losses sustained by the defendant on account of the litigation, by giving an undertaking at the time of filing a suit or before trial, to pay damages to the defendants in the event of not succeeding in the case.
As the provisions of the Code are not exhaustive, Section 151 is intended to apply where the Code does not cover any particular procedural aspect, and interests of justice require the exercise of power to cover a particular situation. Section 151 is not a provision of law conferring power to grant any kind of substantive relief. It is a procedural provision saving the inherent power of the court to make such orders as may be necessary for the ends of justice and to prevent abuse of the process of the court. It cannot be invoked with reference to a matter which is covered by a specific provision in the Code. It cannot be exercised in conflict with the general scheme and intent of the Code. It cannot be used either to create or recognize rights, or to create liabilities and obligations not contemplated by any law.
The direction to the plaintiff to furnish an undertaking to pay ₹ 25 lakhs to defendants in the event of losing the case, is an order in terrorem. It is made not because the plaintiff committed any default, nor because he tried to delay the proceedings, nor because he filed any frivolous applications, but because the court is unable to find the time to decide the case in view of the huge pendency.
We appreciate the anxiety shown by the High Court to discourage land-grabbers, speculators, false claimants and adventurers in real estate from pressurizing hapless and innocent property owners to part with their property against their will, by filing suits which are vexatious, false or frivolous. But we cannot approve the method adopted by the High Court which is wholly outside law. In a suit governed by the Code, no court can, merely because it considers it just and equitable, issue directions which are contrary to or not authorized by law.
The High Court can certainly innovate, to discipline those whom it considers to be adventurers in litigation, but it has to do so within the four corners of law.
It is well-settled that the doctrine of lis pendens does not annul the conveyance by a party to the suit, but only renders it subservient to the rights of the other parties to the litigation. Section 52 will not therefore render a transaction relating to the suit property during the pendency of the suit void but render the transfer inoperative insofar as the other parties to the suit. Transfer of any right, title or interest in the suit property or the consequential acquisition of any right, title or interest, during the pendency of the suit will be subject to the decision in the suit.
Having regard to the facts and circumstances, we are of the view that this is a fit case where the suit property should be exempted from the operation of Section 52 of the TP Act, subject to a condition relating to reasonable security, so that the defendants will have the liberty to deal with the property in any manner they may deem fit, inspite of the pendency of the suit. The appellant-plaintiff has alleged that he is a builder and real estate dealer. It is admitted by him that he has entered into the transaction as a commercial collaboration agreement for business benefits. The appellant has further stated in the plaint, that under the collaboration agreement, he is required to invest ₹ 20 lakhs in all, made up of ₹ 16,29,000/- for construction and ₹ 3,71,000/- as cash consideration and that in lieu of it he will be entitled to ground floor of the new building to be constructed by him at his own cost. Treating it as a business venture, a reasonable profit from such a venture can be taken as 15% of the investment proposed, which works out to ₹ 3 lakhs. Therefore it would be sufficient to direct the respondents to furnish security for a sum of ₹ 3 lakhs to the satisfaction of the court (learned Single Judge) as a condition for permitting the defendants to deal with the property during the pendency of the suit, under Section 52 of the TP Act.
The lack of appropriate provisions relating to costs has resulted in a steady increase in malicious, vexatious, false, frivolous and speculative suits, apart from rendering Section 89 of the Code ineffective. Any attempt to reduce the pendency or encourage alternative dispute resolution processes or to streamline the civil justice system will fail in the absence of appropriate provisions relating to costs. There is therefore an urgent need for the legislature and the Law Commission of India to re-visit the provisions relating to costs and compensatory costs contained in Section 35 and 35A of the Code.
In the result, we allow this appeal in part, set aside the order of the Division Bench and Learned Single Judge directing the plaintiff-appellant to file an affidavit undertaking to pay ₹ 25 lakhs to defendants-respondents in the event of failure in the suit. Instead, we permit the defendants-respondents u/s 52 of TP Act, to deal with or dispose of the suit property in the manner they deem fit, in spite of the pendency of the suit by the plaintiff, subject to their furnishing security to an extent of Rs. Three lakhs to the satisfaction of the learned Single Judge.
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2010 (7) TMI 1180
Issues Involved:1. Addition of Rs. 15,35,10,501 to the book profit on account of repossession of the vessel by the creditors. 2. Assessing Officer's power to re-compute book profit once certified by auditors. 3. Applicability of the judgment in Apollo Tyres Ltd. v. CIT to the case. Detailed Analysis:1. Addition of Rs. 15,35,10,501 to the Book Profit: The main issue in this appeal is the addition of Rs. 15,35,10,501 to the book profit due to the repossession of a vessel by creditors. The assessee, engaged in fishing and export, purchased six vessels on a deferred payment basis. Due to non-payment of installments, the creditor repossessed the vessels. The outstanding amount was Rs. 29,89,25,521, and the written down value was Rs. 7,14,35,063. The assessee computed a short-term capital gain of Rs. 22,74,90,458 after setting off depreciation, which the Assessing Officer recomputed to Rs. 15,35,10,501, adding this amount to the book profit. 2. Assessing Officer's Power to Re-compute Book Profit: The assessee argued that the Assessing Officer has no power to re-compute the book profit once certified by auditors and approved by shareholders, citing the Supreme Court judgment in Apollo Tyres Ltd. v. CIT. The Assessing Officer cannot investigate the book profit once approved by shareholders. The revenue countered that as per Parts II & III of Schedule VI to the Companies Act, the assessee must disclose all material features, including non-recurring transactions. The Mumbai Bench of the Tribunal in Dy. CIT v. Bombay Diamond Co. supported the revenue's view, stating that profits not routed through the profit and loss account do not comply with Schedule VI, thus allowing the Assessing Officer to recompute the book profit. 3. Applicability of Apollo Tyres Ltd. v. CIT: The Tribunal considered whether the Assessing Officer can question the correctness of the profit and loss account certified by auditors. The Supreme Court in Apollo Tyres Ltd. held that the Assessing Officer cannot re-scrutinize accounts certified under the Companies Act. The Tribunal found that the provisions of section 115J, 115JA, and 115JB are identical regarding book profit computation. The Tribunal also noted that the Mumbai Bench's distinction of Apollo Tyres Ltd. was based on incorrect factual interpretation, as the Supreme Court had already addressed similar circumstances. The Tribunal concluded that the Assessing Officer cannot re-scrutinize accounts certified by auditors, as per the Supreme Court's judgment in Apollo Tyres Ltd. and HCL Comnet Systems & Services Ltd. Conclusion: The Tribunal held that the Assessing Officer has no authority to re-scrutinize the accounts once certified by auditors and approved by shareholders. The addition of Rs. 15,35,10,501 to the book profit was deleted, and the appeal of the assessee was allowed. The Tribunal emphasized the binding nature of the Supreme Court's judgment in Apollo Tyres Ltd., which restricts the Assessing Officer's power to re-compute book profit beyond verifying auditor certification.
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2010 (7) TMI 1179
Issues Involved:
1. Violation of principles of natural justice.
2. Alleged connection between the appellants and other entities.
3. Similarity of trading pattern among appellants.
4. Allegation of unrealistic initial order prices.
5. Allegation of sucking out liquidity and creating artificial scarcity.
6. Allegation of price manipulation.
Detailed Analysis:
1. Violation of Principles of Natural Justice:
The appellant contended that the principles of natural justice were violated as she was not furnished with the trade and order logs despite repeated requests. The Board provided selective data from the trade and order logs, which was deemed insufficient by the appellant. The Board argued that the logs were voluminous and thus not feasible to provide. The Tribunal found merit in the appellant's contention, stating that the trade and order logs were relevant for the appellant to prepare her defense. The Tribunal held that non-furnishing of these logs resulted in a violation of the principles of natural justice.
2. Alleged Connection Between the Appellants and Other Entities:
The Board's case was based on the alleged connection between 21 entities, including the appellants, referred to as "connected buyers." The appellant denied any connection, except being a sister-in-law of Dhiren Vora. The Tribunal examined Annexures 1 and 2 of the show cause notice and found that the connections were tenuous and far-fetched. The Tribunal concluded that the Board failed to establish any substantial link between the appellants and other entities, thus rejecting the charge that the appellants acted in concert with others.
3. Similarity of Trading Pattern Among Appellants:
The Board alleged that the appellants placed buy orders at a uniform rate and modified them within a short time frame, indicating collusion. The Tribunal found that the appellants traded through the same broker, and the similarity in order placement was not unusual. The Tribunal noted that the Board selectively questioned only specific trades of the appellants, creating an artificial grouping. The Tribunal concluded that the similarity in trading patterns did not establish fraudulent intent or collusion.
4. Allegation of Unrealistic Initial Order Prices:
The Board alleged that the appellants placed initial buy orders at unrealistic prices to disguise their trades. The Tribunal found that some orders did get executed at the initial price, indicating it was not unrealistic. The Tribunal emphasized that the price discovery mechanism was in full play on the first day of trading, and the initial order prices were part of testing the market. The Tribunal rejected the allegation, stating that the trading pattern was not unusual.
5. Allegation of Sucking Out Liquidity and Creating Artificial Scarcity:
The Board alleged that the appellants' trades created artificial scarcity by sucking out liquidity. The Tribunal found that the appellants were day traders who sold the shares on the same day, thus not reducing market liquidity. The Tribunal noted that the appellants' trades were a small fraction of the total market activity, and there was no evidence of creating artificial scarcity. The Tribunal rejected this allegation as baseless.
6. Allegation of Price Manipulation:
The Board argued that the appellants manipulated the price through structured and synchronized trades. The Tribunal found no such charge in the show cause notice and noted that the whole time member had absolved the day traders of manipulating the price. The Tribunal emphasized that charges must be clear and precise, which was not the case here. The Tribunal rejected the allegation of price manipulation.
Conclusion:
The Tribunal allowed the appeals, set aside the impugned orders, and directed the Board to refund the impounded amounts with accrued interest until the date of remittance to the Consolidated Fund of India. The Tribunal found that the Board's case was unsustainable on merits and that the appellants did not act in concert or engage in fraudulent trading.
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2010 (7) TMI 1178
Petition to direct enquiry or investigation - wrongful and malafide conduct of the officials of the CAW, NCW, FRRO and DCW - illegal detention - Facts of the case, It is alleged that Petitioner No.1 was "made to stand in solitary confinement in a toilet, causing untold harassment, humiliation and infringement of his fundamental rights guaranteed under the Constitution of India. His passport was stamped with the remarks ‘Off loaded-deported due to criminal complaint’ albeit there was no criminal case pending against him nor any FIR was registered. He was released only after intervention by his solicitor.
HELD THAT:- This Court is, of the view that action of the NCW in writing to the DCP, FRRO for the issuance of an LOC against the Petitioner No. 1 was without the authority of law. The consequent action of the FRRO in issuing such LOC which resulted in the Petitioner No.1 being detained at the IGI airport on 8th April 2008 was also, therefore, illegal.
Regarding consequential relief - The power to suspend, even temporarily, a passport of a citizen, the power to issue an LOC, the power to ‘off-load’ a passenger and prevent him or her from travelling are all extraordinary powers, vested in the criminal law enforcement agencies by the statutory law. These are powers that are required under the law, to be exercised with caution and only by the authorities who are empowered by law to do so and then again only for valid reasons.
As regards the illegal detention suffered by the Petitioner No. 1 on 8th April 2008 at the instance of both the NCW as well as the FRRO, this Court directs that the FRRO as well as the NCW will each pay the Petitioner No.1 a sum of ₹ 20,000/- by way of compensation within a period of four weeks from today. The Respondent No. 1 will, if not already done, within two weeks, make the necessary endorsement on the passport of Petitioner No. 1 expunging the earlier endorsement "off-loaded (criminal complaint)". In the circumstances, this Court does not consider it necessary to examine the other prayer of the Petitioners that a further detailed investigation should be undertaken to fix responsibility on those who may have been responsible for the issuance of the LOC.
Accordingly, the writ petition is disposed of.
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