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Showing 41 to 60 of 1288 Records
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2014 (9) TMI 1255
Disallowance u/s 14A r.w.r. 8D - borrowed funds were also utilised partly by the assessee for making tax free investments and the disallowance to be made u/s 14A was required to be computed as per clause (ii) and (iii) of Rule 8D(2) - CIT(A) held that the said disallowance on account of interest made by the Assessing Officer based on the quantum of investment was correct and the same was accordingly confirmed by the learned CIT(A) - HELD THAT:- At the time of hearing before us, the learned Departmental Representative has not been able to rebut or controvert the findings recorded by the learned CIT(A), which formed the basis of relief allowed by him to the assessee. We, therefore, find no justifiable reason to interfere with the impugned orders of the learned CIT(A) in directing the Assessing Officer not to consider the interest paid by the assessee on the loans borrowed after the financial year 2005-06 and also the interest directly relating to any other taxable income, while computing the disallowance under Rule 8D(2). The same are accordingly upheld on this issue and the appeals of the Revenue are dismissed.
Mandation of recording satisfaction - Correctness of the claim of the assessee of having not incurred any expenditure for earning the exempt income - No details were filed by it showing the basis for working out the disallowance at ₹ 1-lakh offered under S.14A. A perusal of the assessment order also shows that the issue of other expenses indirectly attributable to the earning of exempt income was not separately discussed by the Assessing Officer and there was no finding given by him on this aspect. Although the learned CIT(A) has observed in his impugned order that dissatisfaction was recorded by the Assessing Officer as regards the correctness of the claim of the assessee of having not incurred any expenditure for earning the exempt income, we find that there is no such finding specifically recorded by the Assessing Officer in the assessment order.
As already noted by us, the assessee has also taken contradictory stand on this issue and in the absence of any details filed by it, giving the basis of disallowance of ₹ 1 lakh offered in the computation of total income, there was no occasion for the Assessing Officer to record his satisfaction or dissatisfaction about the correctness of the claim of the assessee on this aspect. Having regard to all these facts of the case, clearly borne out from the record, we are of the view that it would be fair and proper to restore this matter to the file of the Assessing Officer for deciding the same afresh in accordance with law, after giving the assessee a proper and sufficient opportunity of being heard. Accordingly, the impugned order of the learned CIT(A) on this issue is set aside and the matter is restored to the file of the Assessing Officer for deciding the issue in relation to the disallowance to be made under S.14A on account of other expenses as per Rule 8D(2)(iii) afresh. The appeals of the assessee are accordingly treated as allowed for statistical purposes.
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2014 (9) TMI 1254
Profit on sale of land - assessable under the head ‘capital gains’ OR 'profits and gains of business or profession’ - HELD THAT:- From the recitals in the letter, it is not clear as to whether the assessee was really carrying on the activity of adventure in the nature of trade or that these properties were considered as trading assets by the assessee. CIT(A) has clearly held that these lands were held by the assessee as agricultural land for a period of more than 3 year - the Tribunal by order [2011 (3) TMI 1821 - ITAT BANGALORE] in the assessee’s own case in similar set of facts for assessment year 2006-07 held the income from the sale of land to be capital gains and not income from business or profession. Copy of the Tribunal’s order for the earlier assessment year 2006-07 is also filed before us and it is evident there-from that the Tribunal has considered the activities of the assessee of improving the land by leveling the land and making plots etc., and has held that it is not an activity in the nature of adventure in trade
Since the facts of the case before us are similar to the facts in the assessee’s own case for earlier assessment year, respectfully following the decision of the co-ordinate Bench to which one of us i.e. the Judicial Member is the signatory, we uphold the findings of the CIT(A) that income from sale of land is to be taxed as ‘income from capital gains’. The Revenue’s ground of appeal is accordingly rejected.
Addition on account of suppression of sale consideration of the land - HELD THAT:- AO has made addition only on the basis of the statement of Shri Purushotham Reddy recorded during the course of search that the assessee has received sale consideration at the rate of ₹ 1224/- per sq.ft. as against ₹ 975/- per sq.ft. claimed by the assessee. Except for the statement of Shri Purushotham Reddy, there has been no evidence brought on record to show that the sale consideration was at the rate of ₹ 1224/- per sq.ft.. In the absence of any material on record to substantiate the statement recorded during the course of search of the third party, we are not inclined to accept the contention of the Revenue that there is suppression of sale consideration by the assessee. We, therefore, do not see any reason to interfere with the order of the CIT(A) on this issue. This ground of appeal is also rejected.
Disallowance u/s 40(a)(ia) - non-deduction of tax at source before making payment to certain parties - AO has disallowed the sum on the ground that the assessee has not deducted tax before making payment to various parties set out in para.13 of the assessment order - HELD THAT:- We find that the CIT(A) has also recorded a finding that no TDS has been deducted while making payment but that the genuineness of the expenditure has not been doubted by the AO and that there is no evidence on record to suggest that this expenditure was not incurred. However, since we have already held that income from sale of land is to be taxed as ‘capital gains’ and not as ‘income from business or profession’, the provisions of sec.40(a)(ia) are not applicable. Therefore, this ground of appeal of the Revenue is also rejected.
Expenditure allegedly incurred by the assessee towards the construction of the compound wall and paid to G.K.Associates - HELD THAT:- We find that the sale of land had taken place in March 2007. Up to the date of sale, a sum of ₹ 49,79,320/- was made to GK Associates. Out of this, except for a sum of ₹ 10,42,929/- the balance was paid in cash. The subsequent payments are in the months of April, June, July and October 2010 and are all by account payee cheques. As rightly held by the CIT(A) and argued by the learned Departmental Representative, just because certain account payee cheques have been made to one person, it does not mean that these are attributable to construction of compound wall or that they are relatable to the improvement of land.
The assessee has to explain with necessary evidence as to the reasons why payments were made much later to the sale of land. No details were furnished either before the AO or the CIT(A), nor did the authorities below examine as to whether there was a compound wall constructed by GK Associates during the relevant period and whether the payment to GK Associates as claimed by the assessee was towards such construction of the compound wall. Therefore, in the interests of justice, we deem it fit and proper to remit this issue to the file of the AO with a direction to examine and verify whether compound wall was in fact constructed around the schedule land and reasons for payments made subsequent to the date of sale of land and allow the expenditure incurred for such construction of compound wall, if it is found that compound wall was in fact, constructed by the GK Associates at the behest of the assessee - cross objection of the assessee is allowed for statistical purposes.
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2014 (9) TMI 1253
Preventive Detention order - petitioners argued that challenge to preventive detention order under KAAPA can be done even at pre-execution stage - HELD THAT:- In the case in hand, the definite plea is that the second petitioner is mentally ill. It would be unreasonable to keep him out without even providing him medical help, if he needs treatment in that regard. This is all the more so because, if the second petitioner is shown to be one who cann - ot be tried owing to any disability in that regard, he has to be presented for treatment by the competent authority and could be put to trial only on being satisfied, on due certification by such authority that he is fit for trial - there is no statutory or public duty in any of the functionaries under KAAPA to consider such a representation, though the Government being the ultimate authority may, in its wisdom, if it desires so, consider that representation and act on it, particularly because under S. 13 of KAAPA, the Government has fairly wide powers in relation to such matters. But, let the Government remember that the Constitution and the laws are the supreme because they form the base cream for governance in terms of the collective will and declaration by "We, the People of India".
This Writ Petition is dismissed.
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2014 (9) TMI 1252
Seeking to grant injunction - whether there is a ‘clear fraud’ of which the 2nd respondent has noticed and the fraud of the 1st respondent from which it seeks to benefit and the other exception whether there are any ‘special equities’ in favour of granting injunction? - HELD THAT:- There is complete denial by the 1st respondent as to the allegations levelled against it touching the alleged fraud on its part by attributing total lapses on the part of the appellant that had compelled the 1st respondent to get the balance of work done through the third party – contractors with the consent of the appellant.
The vital aspect that touches the conduct of the appellant is, according consent to the 1st respondent to make payments directly to the third party-contractor by getting the work carried out which was left over by the appellant by even demobilising its resources from the site. It is not as though, a mere consent by the appellant was given for getting the balance work executed through other sub-contractor, which the appellant was supposed to execute, but even the payments were made by the 1st respondent, through the appellant. This circumstance attains greater significance since it affects vitally not only the fraud alleged by the appellant, but even it disfavours the appellant in proving the ‘irretrievable injury’ or ‘irretrievable injustice’ and further disfavours the appellant from seeking equitable relief of injunction based on ‘special equities’. The attempt made by the appellant to take shelter under Clause – 8.1 relating to sub-contracting the works, gets completely condemned when the purport of the said sub-clause is examined - the attempt of the appellant to deprive advantage under the said clause, in our view, is a concrete attempt to take undue advantage of the said clause to wriggle itself out of the obligations cast on it and consequences thereof.
The case of the appellant neither falls in the first exception nor in the second exception nor the appellant is successful in establishing ‘special equities’ favouring it to seek the equitable relief of injunction in these two appeals.
Concerning the other allegations touching the outstanding amounts to be paid by the appellant at ₹ 28.19 crores, as ad-hoc advances were made by the 1st respondent, with the object of getting the work executed within the time frame or even earlier also, stands adverse to the case of the appellant. No doubt, the appellant has initially stated that the loss it sustained was to the tune of ₹ 175.00 crores and in its reply affidavit, it has expanded the alleged quantified loss to the tune of ₹ 421.80 crores, but these aspects have to be gone into by the arbitral Tribunal. Even the other aspects which the appellant has pressed into service constitute the subject before the arbitral Tribunal.
Thus, the appellant failed to establish not only the ground of ‘established fraud’, but also the ground of ‘special equities’ in its favour. Therefore, the common order under challenge cannot be withheld, as such, while confirming the same, appeal dismissed.
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2014 (9) TMI 1251
Continuation of stay till final hearing of appeal - Service of notice - HELD THAT:- Since the main appeal is to be listed for final hearing on 30th September, 2014, the stay granted by the learned Single Judge vide order dated 28.8.2014 shall continue till the final hearing of the appeal. However, as recorded by the learned Company Judge in paragraph-46D of the impugned judgment, it shall be open for the Official Liquidator to disburse the dues of the workers after due verification.
However, instead of disbursing the dues of the workers out of ₹ 14 crores deposited by the first respondent herein, ₹ 7 crores each shall be disbursed from the amount deposited by the appellant and the opponent No.1 - Since the opponent No.1 has deposited ₹ 14 crores with the Registry, the entire amount shall be transferred to the Official Liquidator, out of which, ₹ 7 crores shall be disbursed towards the dues of the workers and the remaining ₹ 7 crores shall be kept in a fixed deposit in terms of the directions issued by the learned Single Judge.
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2014 (9) TMI 1250
Rejection of request for appointment to the post of Junior Assistant /Bill Collector - HELD THAT:- It is to be noted that appointment on compassionate ground is based upon rules and regulations governing the same. In other words, the appellant cannot seek, as a matter of right, that he should be appointed in a particular post. Admittedly, the post of Record Clerk was vacant at the relevant point of time and the appellant was appointed to the said post. Having voluntarily accepted such appointment, the appellant is estopped from making a higher claim without any legal basis. Merely because others have been given the benefit of appointment to other post, the appellant cannot claim the same, as a matter of right. In such view of the matter, the stand taken by the learned counsel for the appellant cuts no ice.
Appeal dismissed.
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2014 (9) TMI 1249
Deduction u/s 80IB - sale of scrap was eligible for the deduction u/s. 80IB for the Pimpri Unit-II and Goa unit of the assessee company - AO disallowed the claim of the assessee for deduction u/s. 80IB in respect of the Pimpri Unit-II holding that the said Unit was not a new independent undertaking - HELD THAT:- It was the common point between the parties that the issue relating to eligibility of sale of scrap for Sec. 80IB benefits is no longer res-integra but has been decided by the Tribunal in the assessee’s own case for assessment year 2002-03 [2011 (7) TMI 1153 - ITAT PUNE] in favour of the assessee. It was also a common point between the parties that the said precedent continues to hold the field as it has not been altered by any higher authority. In view of the aforesaid precedent we uphold the stand of the CIT(A) and as a result the Grounds of appeal nos. 1 and 2 raised by the Revenue stand dismissed.
Pre-payment of deferred sales tax loan liability - assessee has availed of the deferred sales tax scheme of the Govt. of Maharashtra in earlier years - HELD THAT:- Ostensibly, the issue which was raised by the assessee for the first time before the CIT(A) involved a point of law and the necessary facts to adjudicate the same, were already on record. In other words, the adjudication of the new claim sought to be raised by the assessee for the first time before the CIT(A) did not require any fresh investigation of facts. Therefore, in terms of the judgment in the case of National Thermal Power Co. Ltd [1996 (12) TMI 7 - SUPREME COURT] the CIT(A) made no mistake in admitting such Additional Ground of appeal. It is pertinent to note that before adjudicating on the Additional Ground of appeal, the CIT(A) duly called for the comments of the Assessing Officer, and only after considering the comments, he has admitted the additional Grounds of Appeal for all the above reasons, the action of the CIT(A) is hereby affirmed. In so far as the merits of the claim is concerned, it was a common point between the parties that the controversy is to be adjudicated in the light of the decision of the Special Bench of the Tribunal in the case of Sulzer India Limited [2010 (11) TMI 728 - ITAT, MUMBAI] - Decided against revenue.
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2014 (9) TMI 1248
Dishonor of Cheque - partial discharge of debt made or not - offences under sections 420 and 406 of IPC - HELD THAT:- The documents produced herein can be looked into, only for the limited purpose in support of the petitioners' case that the petitioners paid nearly ₹ 72 lakhs under the mortgage discharge receipt and sale deeds in favour of the second respondent defacto complainant and another ₹ 28 lakhs by way of deposits in the bank. Though the defacto complainant has not produced any document before this court in support of his theory that borrowal of ₹ 38,00,000/- by A1 along with A2 to A4 and execution of consent and confirmation letters by either A1 or A2 to A4 etc, the documents produced herein would reveal that there was money transaction between the second respondent and the first petitioner and the first petitioner has made cash payment and executed sale deed in respect of his property towards partial discharge of the same.
It is nobody's case that the defacto complainant was induced to part with money by any false representation made by the petitioners. The very conduct on the part of the first petitioner in repaying the amount and executing sale deed in respect of his property towards partial discharge of the amount, as per the allegations raised in the complaint, would go to show that there is no criminal intention for committing any act of cheating from the inception. The petitioners have also admittedly issued cheque for ₹ 25 lakhs on 16.10.2012 towards partial discharge of their liability. The allegation raised herein that the defacto complainant did not present the cheque for encashment as requested by the accused till the expiry of the cheque period, without being obtained fresh cheque leaf, appears to be, in the light of the earlier conduct of the parties, invented for the purpose of this case and is lacking in bonafide.
Considering the nature of the transactions between the parties and subsequent conduct of the parties, this Court is of the firm view that the allegations raised in the FIR would disclose that the dispute between the parties is more of civil in nature and there is no fraudulent or dishonest intention on the part of the petitioners to attract the offences under sections 420 and 406 IPC - this Court is of the opinion that no case is made out against the petitioners herein to attract the offence under section 506(ii) IPC. Such case put forth on the side of the complainant involving married daughters and unmarried daughter whose marriage was fixed to be held in December 2013, also appears to be improbable in nature.
Petition allowed.
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2014 (9) TMI 1247
Validity of revised order of assessment passed - respondent concluded that there was no reply from the dealer - violation of principles of natural justice - HELD THAT:- Once it is found that what was sought by the petitioner was different from what was furnished to them, the petitioner cannot be found fault for not filing a full-fledged reply. Hence, the petitioner deserves one more opportunity.
The matter is remitted back to the respondent for a fresh consideration - Petition is allowed by way of remand.
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2014 (9) TMI 1246
Refusal of an exparte ad interim injunction - bonafide members of the petitioner society who had been unfairly expelled from the society - HELD THAT:- The order impugned suffers from the malaise that merely because the appeal may become infructuous upon an ad interim injunction being declined, the Court perceives to be obliged to pass an order.
Since the assumption of jurisdiction by the Appellate Court without considering the grounds on which the Trial Court declined the ad interim injunction appears to be irregular and improper, the order impugned dated September 16, 2014 is set aside and the appeal disposed of. The parties should immediately inform the Appellate Court so that it can record the disposal of appeal.
The Trial Court is now requested to ensure that the plaintiffs' injunction application is taken up and disposed of within a period of one month after the reopening of the Court following the Puja Vacation - application disposed off.
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2014 (9) TMI 1245
Inter se dispute between the direct recruits and promotees in the cadre of Assistant Consolidation Officer - it has been argued by the appellants' counsel that the direct recruits are entitled to be placed over and above the promotees since they were appointed earlier than the promotees, i.e. in the month of August, 1997 - HELD THAT:- Sub Rule (3) of Rule 8 of 1991 Seniority Rules should be construed in such a manner which may not make the rule inoperative. Further external aid from 1992 Service Rules may be taken while interpreting 1991 Seniority Rules for removal of ambiguity and doubt, if any - the provisions contained in Sub Rule (3) of Rule 8 should be construed harmoniously to make it effective after taking into account the other rules as well as the purpose and object of the rule.
Since selection and promotion has not been done in a single process, seniority may be considered as observed hereinabove keeping in view the year of recruitment.
The impugned order passed by learned Single Judge does not seem to suffer from any impropriety or illegality subject to modification that keeping in view the Service Rules in question, rota should be applied by the authorities of direct recruits and promotees appointed in one recruitment year - Appeal allowed in part.
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2014 (9) TMI 1244
Deduction u/s.80IB(10) - legal relationship between the assessee and the end user of units was that of “work contract” - HELD THAT:- The undisputed facts in the present case are that the assessee-form sold the plots to various persons and after the sale is complete the assessee constructed residential tenements thereon. It is also not disputed that two separate agreements were executed by the assessee-firm. The case of the assessee is that it has developed the housing project and it has borne all risks and reward arising therefrom. Merely because the land was sold and the houses were constructed would not debar the assessee from claiming the deduction u/s.80IB(10) of the Act in view of the judgement of Hon’ble Jurisdictional High Court rendered in the case of CIT vs. Radhe Developers [2011 (12) TMI 248 - GUJARAT HIGH COURT].
Also decided in M/S. SATSANG DEVELOPERS VERSUS ACIT, CIRCLE-2(2), BARODA [2014 (5) TMI 184 - ITAT AHMEDABAD] assessee was entitled to the benefit u/s 80-IB (10) even where the title of the lands had not passed on to the assessee and in some cases, the development permissions may also have been obtained in the name of the original land owner - ownership of land is not a necessary condition for claiming the deduction u/s 80IB(10) - Assessee has acquired dominant control over the land, Assessee is responsible for incurring all the expenses and taking all the risks involved - Assessee is not a contractor - Decided in favour of assessee.
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2014 (9) TMI 1243
Deduction u/s. 80P(2)(a)(i) - assessee is a co-operative society and engaged in banking business also - HELD THAT:- As decided in the case of ACIT, Circle 3(1), Bangalore v. M/s. Bangalore Commercial Transport Credit Cooperative Society Ltd. in [2011 (4) TMI 1222 - ITAT BANGALORE] wherein this Tribunal held that section 80P(4) is applicable only to cooperative banks and not to credit cooperative societies. The intention of the legislature of bringing in cooperative banks into the taxation structure was mainly to bring in par with commercial banks. Since the assessee is a cooperative society and not a cooperative bank, the provisions of section 80P(4) will not have application in the assessee’s case and therefore, it is entitled to deduction u/s 80P(2)(a)(i).
Also in the case of CIT vs. Sri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha [2015 (1) TMI 821 - KARNATAKA HIGH COURT] wherein it was held that where the status of the assessee is a co-operative society, also carrying on the business of lending money for providing credit facilities to its members and not a co-operative bank, the assessee is entitled to the grant of exemption u/s 80P(2)(a)(i) - Decided against revenue.
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2014 (9) TMI 1242
Levy of penal demurrage charges - period from 2nd May 2011 to 31st July, 2011 - rate Circular No. 74 of 2005 as modified by the rate Circular dated 17.01.2008 including the consequential orders - Whether investment of the powers of the Central Government under the Railway Act, 1890 to the Railway Board by notifications issued under the Railway Board Act comes to an end after the enactment of Act 1989? - Whether the Railway Board can exercise powers of the Central Government after enactment of Act 1989 without there being any further investment of power of Act 1989 by the Central Government? - Whether the Railway Board can exercise the powers of the Central Government and the rate Circular, Ext. P11 issued by the Railway Board can be treated to be the rate Circular issued by the Central Government? - HELD THAT:- Rate Circular which has been signed by the Joint Director Traffic Commercial (Rates), Railway Board is an order merely authenticating the order of the Central Government according to the prescribed procedure. The order is professed to have been issued by the Government of India, Ministry of Railways which was entitled in law to transact the business of Railway. The petitioners in their reply affidavit while replying paragraph 4 of the counter affidavit quoted above has only reiterated that the Railway Board has no authority or jurisdiction to issue orders of the Government of India, Ministry of Railways. The rate Circular having been expressed in the name of the Government of India, Ministry of Railways, Railway Board we have no reason to not take the Circular as it is described as rates issued by the Government of India, Ministry of Railways.
The rate Circular, Ext. P11 issued is to be treated as the Circular issued by the Central Government and cannot be held to be beyond jurisdiction of Sec. 30 or violative of Sec. 30 of Act 1989.
Whether the Central Government in exercise of the powers under Sec. 30 of Act 1989 as a delegatee of the power to fix the rate can further delegate the power to fix rate to any other authority, i.e. including the CCM, COM and DRM? - Whether the rate Circular, Ext. P11 sub delegates the power to fix the rate of demurrage charge on CCM, COM and DRM? - HELD THAT:- The powers in the rate circular given to CCM, COM and DRM are not sub-delegation of any power of fixing rate, rather rate circular provides for conditions for implementing the rates fixed by the Central Government - CCM, COM and DRM as authorised under paragraph 3.3 are thus only statutory authorities, which have been indicated in the delegated legislation, i.e., rate circular who are to implement the rate circular as per the conditions therein. Thus, the power given to the above authorities is a statutory power to be exercised on conditions as enumerated in rate circular and is not sub-delegation of any of legislative power of the Central Government under Section 30 of the Act, 1989 - there are no substance in the submission of learned counsel for the writ petitioners that there is sub-delegation of legislative power in favour of CCM, COM and DRM.
Whether the rate Circular Ext. P11 cannot be enforced having not been published in the Gazette of India or by any other accepted mode? - HELD THAT:- The rate circular was issued in 2005 and the demurrage, according to the rate circular, was being paid and it was only when penal demurrage charges were imposed by the Railway authorities, challenge was laid in the Writ Petition. Various notices issued by Station Master and Goods Superintendents, where Exhibits P4 to P10 were under challenge, where three times and six times of normal demurrage rates were levied.
Whether due to the provisions of the Kerala Head Load Workers Act restricting the right of employer in a scheme covered area to engage only registered head load workers the Railway Administration cannot demand penal demurrage charges from the petitioners? - HELD THAT:- The rate circular is uniformly applicable to entire country and making an exception for the State of Kerala in penal demurrage charges has rightly been held not to be acceptable - in the event of consignee, on account of any reason beyond his control, had suffered penal demurrage charges, he is at liberty to move an application for waiver - the submission of writ petitioners that on account of operation of Headload Workers Act in the State of Kerala, penal demurrage charges should not be imposed, cannot be accepted.
Whether increased demurrage charges are not leviable to be charged due to lack of amenities in the various Railway Goods Sheds? - HELD THAT:- The contention of appellant's counsel is that due to lack of amenities, loading and unloading workers of the writ petitioners are unable to perform their duties efficiently and it is incumbent on the authorities to provide for amenities. The learned Single Judge has gone into the said submission and after noticing the pleadings made on behalf of the Railways, had found that on the basis of said submission the challenge to penal demurrage charges cannot be upheld - the respondents have pleaded that amenities have been provided for - the challenge to rate circular cannot be upheld.
Whether levy of increased/penal charges have been made by Station Masters, Goods Shed Superintendents and other Officers of the Railway Administration and the notices Exts. P4 to P10 are illegal and unenforceable? - HELD THAT:- The learned Judge perused the records and was fully satisfied that the order for imposing penal demurrage charges was passed by the designated authority as specified in Exhibit P11. It was held that Exhibits P4 to P10 were consequential proceedings passed pursuant to the orders passed by DRM - there are no good ground to have any different view with regard to above submission.
The writ petitioners are permitted to make an application for waiver before the Station Manager/Goods Supervisor within 30 (thirty) days from today giving all details along with reasons and relevant records as necessary - Station Master/Goods Supervisor shall forward the application for waiver of demurrage charges to the Divisional Officer with his remark within 15 (fifteen) days of receipt of the application - appeal disposed off.
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2014 (9) TMI 1241
Reopening of assessment u/s 147 - assessee argued that time for issuance of notice u/s 143(2) of the Act was very much available at the time of initiation of re-assessment proceedings for the reason that validly filed return of income is pending assessment and proceedings have not been terminated or come to an end - HELD THAT:- As relevant assessment year involved is 2005-06 and assessee has filed its return of income for A.Yr.2005-06 on 06.10.2005 within the time prescribed u/s 139(1) of the Act. The AO issued notice u/s 148 of the Act dated 24.07.2006. Admittedly there is time left for issuance of notice u/s 143(2) of the Act i.e. 12 months from the date of filing of return of income and in the present case the return was filed on 06.10.2005 and notice u/s 143(2) of the Act can be issued by the Revenue upto 31.10.2006.
We find that the issue is fully covered by the decision of CIT vs Qatalys Software Technologies Ltd [2008 (7) TMI 240 - MADRAS HIGH COURT] as held no action could be initiated under section 147 of the Act, when there is a pendency of the return before the Assessing Officer. The reasons given by the Tribunal are based on valid materials and evidence and we do not find any error or illegality in the order of the Tribunal so as to warrant interference - Decided in favour of assessee.
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2014 (9) TMI 1240
Disallowance of provision of non-performing assets - HELD THAT:- After hearing the rival submissions, we noted that this issue is no more resintegra in view of the decision of Hon’ble Suprme Court in the case of Southern Technologies Ltd [2010 (1) TMI 5 - SUPREME COURT] wherein held in view of the Explanation which keeps such a provision outside the scope of “written off” bad debt,section 37 cannot come in. If an item falls under sections 30 to 36, but is excluded by the Explanation to section 36(1)(vii) then section 37 cannot come in. Section 37 applies only to items which do not fall in sections 30 to 36. If a provision for doubtful debt is expressly excluded from section 36(1)(vii) then such a provision cannot claim deduction under section 37 of the Income-tax Act even on the basis of “real income theory” as explained above.
We therefore confirm the order of the CIT(A) sustaining the disallowance for provision for non-performing assets.
Addition in the computation of the book profit u/s 115JB - Merely the reserve has to be created under a separate statute, it cannot be converted into a provision for ascertained liabilities. Under sub-clause c of explanation 1 to section 115JB(2), the amount / amounts set aside to provisions made for meeting liabilities, other than the ascertained liabilities are also to be added for computing the book profit. No doubt the provisions made for ascertained liabilities has not to be added. The ld. A.R even though vehemently contended that the reserve has to be created as per the provision of RBI Act but could not convince us against what ascertained liability it has been created.
The reserve created as per the RBI in our opinion cannot be converted into a provision unless it is proved it is against a liability. The reserve is always created in order to meet future exigencies. This reserve in our opinion cannot be regarded to have been created against a particular liability. We therefore do not find any illegality or infirmity in the order of the CIT(A) in sustaining the addition u/s 115JB. Thus this ground stands dismissed.
Addition while computing the book profit u/s 115JB being the amount transferred to Debenture Redemption Reserve - HELD THAT:- The amount so transferred therefore cannot be regarded to be the reserve or provision made for meeting the liabilities other than ascertain liabilities. Our aforesaid view is duly supported by the decision of Mumbai High Court in the case of CIT vs Raymond Ltd, [2012 (4) TMI 127 - BOMBAY HIGH COURT] No contrary decision taken by any other High Court was brought to our knowledge by the ld. D.R. The decision of Rayon Corporation vs CIT, [1997 (7) TMI 113 - SUPREME COURT] rather support the case of the assessee that it is a provision for a known liability. We therefore, set aside the order of the CIT(A) on this issue and allow the ground no.3 taken by the assessee.
Provision for NPA added in the computation of book profit - This issue in our opinion is to be decided in favour of the revenue in view of clause (i) inserted to explanation 1 to section 115JB(2) by the Finance Act, 2009 w.e.f. 1.4.2001. Therefore, after hearing the rival submissions and carefully considering the same the addition made by the assessing officer has to be sustained. The provision for NPA account is created for diminution in the value of the asset. This fact cannot be denied. The ld. A.R even though vehemently contended but could not convince us how the provision so made does not represent diminution in the value of the assets. We therefore, dismiss this ground.
Levy of the interest u/s 234B and 234C - HELD THAT:- The interest u/s 234B and 234C is leviable even though automatic only when the liability to pay the advance tax u/s 208, 209 or 210 arise. This addition could have not been subject to advance tax at the time when the liability to pay the advance tax arise. The impugned assessment year is assessment 2008-09 and therefore due to the retrospective amendment in our opinion interest u/s 234B and 234C cannot be imposed due to the non-addition of ₹ 3,66,00,000/- in the book profit of the assessee while estimating the liability for advance tax. To that extent, we set aside the order of the CIT(A) and direct the assessing officer not to include provision for NPA for the purpose of calculation of the interest u/s 234B and 234C. Thus this ground is partly allowed.
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2014 (9) TMI 1239
Validity of Arbitral Award - of the property for construction of child and maternity hospital - it is contended by the petitioner as well as the learned counsel for the third respondent that by playing fraud on the Lok Adalat and by impersonation, the Award was passed and therefore it is liable to be set aside - whether the impugned Award passed by the Lok Adalat is an 'Award' within the meaning of Section 21 of the Legal Services Authorities Act, 1987? - HELD THAT:- From the material on record, it is clear that the petitioner was not the Secretary of the third respondent society as on the date of settlement in the Lok Adalat i.e. on 29.09.2011. The reason for his giving resignation has been clearly stated by him and the resolution of the Society has been accepted by the Commissioner of Collegiate Education, Andhra Pradesh, Hyderabad. Except disputing about the documents and the resolutions passed by the society, nothing has been brought to our notice that the resolutions passed by the society and the proceedings issued by the Commissioner of Collegiate Education are brought into existence for the purpose of this case.
Section 24 of the Andhra Pradesh Education Act, 1982 deals with appointment and removal of manager of private institution. Sub-section (1) of Section 24 of the Act, 1982 provides that the management of every private institution shall be constituted in such manner and shall consist of such number of members as may be prescribed. It is not in dispute that the third respondent is running educational institutions. Sub-section (2) of Section 24 provides that the management shall, for the purposes of this Act, nominate a person to manage the affairs of the institution, whether called by the name of secretary, correspondent or by any other name, and intimate such nomination within 30 days thereof to the competent authority - Under Section 114(e) of the Indian Evidence Act, 1872, the Court may presume that judicial and official acts have been regularly performed, unless contrary is proved. When the party proved the fact that judicial or official act has been, in effect, done or performed, then the presumption would come to the aid of the party to the effect that the said act was performed in accordance with law. As seen from the counter affidavit filed by the respondents, there is no specific denial with regard to this document by raising a ground that it was fake or fabricated document. Therefore, the said document can be acted upon.
Settlement is an act of deciding the dispute between the parties to the suit. An agreement is an arrangement or understanding between two or more persons, to avoid the law suit, amicably settle their differences on such terms as they can agree upon. In other words, it is an adjustment between the parties to a dispute ending in a settlement. There is no source of legal power in writing given to the Secretary of the third respondent society to do an act or to enter into settlement or compromise - any act done by such person cannot be said to be legal or proper and would not bind on the society. The society of third respondent is governed by the Rules and Regulations and they have to be acted upon. Any deviation in this regard would not have any effect on the rights and liabilities of the society.
When a statute, rule or regulation provides that an authority is conferred with certain liabilities or duties cast on him, they should be performed in accordance with the provisions of the statute, rule or regulation. It means a decision according to the principles of law applicable. When a statutory duty is conferred on the Lok Adalat, it has to exercise that duty in accordance with law especially when the Award passed by the Lok Adalat shall be come final and no appeal shall lie to any Court against the Award - The impugned Award is not signed by the parties to the appeal and therefore it is not binding on any one of the parties to the appeal.
Locus standi of the petitioner - HELD THAT:- The petitioner to dispel the cloud of legal action against him, he can file the Writ Petition in his individual capacity so as to challenge the Award especially when the Award does not contain that the settlement was arrived at for and on behalf of the society. Therefore, the petitioner is an aggrieved party and he can challenge the Award.
The impugned Award is liable to be set aside as it is not an 'Award' within the meaning of Section 21 of the Act, 1987 and the Regulations made thereunder - Petition allowed.
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2014 (9) TMI 1238
Seeking directions to permit the petitioner to leave the Country and for that to return the passport lying in deposit as one of the conditions of the bail order - petitioner wants to leave the Country on his business purposes - power of investigating officials to impound the passports - HELD THAT:- As per the Apex Courts guidelines in Mhetre's case [2010 (12) TMI 1085 - SUPREME COURT] as part of the conditions of the bail besides property title deeds required to be deposited including bank accounts and deposit of even the passport of accused before the learned Magistrate though there are expressions in Sure Nanda v. Central Bureau of Investigation [2008 (1) TMI 876 - SUPREME COURT] and in GIAN SINGH VERSUS STATE OF RAJASTHAN [1999 (5) TMI 629 - SUPREME COURT] saying that the investigating officials have no right of their own to impound the passport, but for the passport officials under the provisions of the Indian Passport Act, 1967.
Here, the impounding the passport by investigating officers is entirely different from seeking to deposit the passport by the Court as one of the conditions of the bail to see that the accused shall not jump the bail or form the clutches of the Justice by using or misusing the passport even there is a bar under Section 6(2)(f) of the Indian Passport Act, 1967 of any person who is accused of crime in India, passport cannot be obtained and travel beyond the country without prior permission and there is a circular of the Central Government in GSR 570E, dated 25.08.1993 as per Section 22 of the Passport Act issued by the Ministry of External Affairs in the public interest that by said notification exempting the citizens of India against whom criminal proceedings are pending in India without facing any hardship for their requirement to travel abroad, a permission of the concerned Magistrate, where the case is pending for travel abroad.
There is nothing to modify the condition imposed in the bail order passed by the learned Sessions Judge for return of passport but for a direction to the learned IV Additional Chief Metropolitan Magistrate, Hyderabad, before whom the passport is in deposit, in the event of the petitioners application as contemplated by the Circular instructions of the Union of India in GSR 570E dated 25.08.1993 relaxing and modifying to some extent, the bar under Section 6(2)(f) of the Indian Passport Act within its power under Section 22 of the Indian Passport Act to permit to have travel document pursuant to passport from the authorities concerned for integram period till end of December, 2014 - when the passport is required for such travel permit to return the passport subject to undertaking to re-deposit and subject to execution of a bond for ₹ 2,00,000/- with affidavit undertaking of re-deposit the passport and return back to India and on failure to forfeit the said bond amount as one of the modes of penalty contemplated by section 53(5) of Indian Penal Code.
The Criminal Petition is disposed of.
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2014 (9) TMI 1237
Lease rental income - treated as business income OR Income from house property - HELD THAT:- In the case of Shambhu Investments Ltd. [2003 (1) TMI 99 - SC ORDER] what was let out to the tenant is ‘table space’ and in such circumstance the Hon’ble Apex Court has held that it was a case of letting out the property.
In the case of Chennai Properties & Investments Ltd. [2003 (3) TMI 28 - MADRAS HIGH COURT] the assessee was owning two buildings and was receiving rental income from them. As rightly held by the CIT(Appeals), the cases relied on by the Revenue are not applicable to the facts of the present case.
In the present case, the assessee is running an industrial park as a business proposition with a lot of functional facilities necessary for the smooth working of the software, who are the tenants. As pointed out by the assessee, the IT parks are recognized for the purpose of deduction under sec.80IA and the statute itself has considered these types of ventures as a ‘business activity’. We agree that the Commissioner of Income-tax(Appeals) has arrived at a proper finding on this issue. The appeal filed by the Revenue is liable to be dismissed.
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2014 (9) TMI 1236
Dishonor of Cheque - Signing of power of Attorney holder - eligibility criteria prescribed by Section 142(a) of NI Act - verification of Power of Attorney holder on oath Under Section 200 of the Code - knowledge of the Power of Attorney holder in the impugned transaction - presumption of knowledge - proceedings contemplated Under Section 200 of the Code can be dispensed with in the light of Section 145 of the N.I. Act or not - HELD THAT:- This power of attorney in light of the statement made by the Appellant in the complaint that because she was not keeping good health and was unable to come to the court and because the whole transaction was within the knowledge of her husband, who is her power of attorney holder, her husband represented her. We have no reason to doubt the submission of learned Counsel for the Appellant that it was very much on record. In any case, the fact that this submission which is factual in nature was first time raised in the High Court casts a shadow of doubt on its truthfulness.
The complaint Under Section 138 of the NI Act can be filed through the power of attorney holder. In this case, Sudhir Gulvady is the power of attorney holder of the Appellant and he has filed the complaint on her behalf. The learned Magistrate recorded the statement of the power of attorney holder Under Section 200 of the Code on 5/3/2004 and issued summons - There can be no dispute about the fact that in this case, the power of attorney holder being the husband of the Appellant has witnessed all transactions and he possesses due knowledge about them.
While holding in favour of the Appellant that the complaint can be filed by a power of attorney holder and on that ground complaint cannot be held not maintainable and that the power of attorney was very much on record, the matter is remanded to the High Court with a request that the High Court should hear both sides and decide whether the cheques in question were issued as a security or for the purpose of repayment of legally recoverable debt.
Appeal allowed by way of remand.
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