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Showing 441 to 460 of 782 Records
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2009 (2) TMI 482
The High Court of Kerala, in the case of 2009 (2) TMI 482 - Kerala High Court, delivered a judgment with C. N. Ramachandran Nair and Surendra Mohan K. as judges. The appellant, a jeweler, had started a business with branches in Mettupalayam, Pollachi, and Areacode. The appellant had spread the initial expenditure for setting up these branches over ten years. The Assessing Officer allowed deductions for the expenditure during the 2003-04 year, but when the appellant closed one branch, they claimed the entire unabsorbed expenditure for that branch in that year. The Tribunal ruled that the unabsorbed expenditure for the closed branch should be spread out over the remaining years along with the expenditure for the other branches. The appellant appealed this decision, arguing that the unabsorbed expenditure for a closed branch should be allowed in the year of closure. The High Court rejected this claim, stating that there is no provision in the Act for claiming the entire expenditure in the year of closure. The High Court upheld the Tribunal's decision to spread the unabsorbed expenditure over the remaining years, in line with the accounting practice followed by the appellant. The appeal was dismissed accordingly.
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2009 (2) TMI 481
Shame Transactions - the arrangement was not collusive or that the mutual fund had not provided accommodation entries to the assessee to purchase a loss. It is not disputed that the mutual fund has an approval from the Securities and Exchange Board of India (SEBI). Furthermore, nothing has been brought on record to show that the transaction between the assessee and the mutual fund was not an arm's length transaction. Dividend Stripping - at the relevant time there was no provision under the Act which could be invoked to disallow a loss of the nature incurred by the assessee. As correctly held by the Tribunal the provisions of section 94(7) of the Act were inserted in the Act with effect from April 1, 2002 and hence, would impact, if at all, transactions undertaken in the assessment year 2002-03. Section 14A - There is no whisper of any expenditure either in the assessment order or in the order of the Commissioner of Income-tax (Appeals) with respect to expenditure which the assessee incurred for earning income i.e., dividends from units which are admittedly exempted under section 10(33) of the Act. Nothing has also been indicated in the appeal which would lead us to believe that there was material which could have been looked into had the Tribunal permitted the Revenue to take up the said additional ground pertaining to section 14A of the Act.
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2009 (2) TMI 480
The High Court of Bombay High Court, in the 2009 case of REBELLO F. I., MOHITE R. S., JJ, addressed the issue of interest expenses disallowance made by the Tribunal on an amount of Rs. 17,08,511, which was borrowed by the assessee from Canara Bank to settle a sister concern's liability. The assessee argued that the funds were used to retain business premises necessary for business activities, and therefore the interest should be allowed as a deduction under section 36(1)(ii). Both the Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal upheld the deduction, citing various judgments including CIT v. Finley Mills and Addl. CIT v. Putco Pvt. Ltd. The court agreed with the authorities' reasoning, stating that the borrowing was necessary to retain the business premises, which was crucial for the business operations. The court found the findings reasonable and dismissed the appeal, asserting that the questions of law did not
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2009 (2) TMI 479
Appeal to Tribunal – Limitation – condone the delay of 10 months in filing the appeal - Tribunal has observed that the appeal was filed on26-3-2008and there was no explanation offered as to why the appeal could not be filed immediately after the appellant was found fit to resume duties as per the medical certificates filed - sufficient cause for not filing the appeal in time has been shown by the appellant – Order set aside
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2009 (2) TMI 478
Issues:
1. Whether the capital loss incurred by the assessee on redemption of units of mutual funds was liable for disallowance under section 94(7) of the Income-tax Act, 1961?
Analysis:
The case involved an appeal by the Revenue against a judgment passed by the Income-tax Appellate Tribunal regarding the disallowance of capital loss incurred by the assessee on redemption of mutual fund units. The Assessing Officer invoked the provisions of section 94(7) of the Act, alleging "dividend stripping" by the assessee. The Commissioner of Income-tax (Appeals) agreed with the assessee that the conditions under section 94(7) were not cumulatively satisfied in this case, leading to the disallowance being overturned. The Revenue then appealed to the Tribunal, which upheld the CIT(A)'s decision, prompting the current appeal before the High Court.
The High Court noted that section 94(7) of the Act, inserted in 2002, required specific conditions to be cumulatively met for disallowance of capital loss. The provision mandated that the purchase and sale of securities or units within specified periods, along with exempt dividend income, must align for the loss to be ignored in tax computation. The Court reviewed the transactions involving mutual fund units by the assessee and found that the conditions under section 94(7) were not met as the sale occurred outside the prescribed statutory periods. The Court emphasized the cumulative nature of the conditions, highlighting the importance of the record date in determining the applicability of the provision.
Ultimately, the High Court concluded that the transactions in question did not fall within the scope of section 94(7) of the Act due to the timing misalignment of purchases, record dates, and sales. The Court upheld the decisions of the lower authorities and dismissed the appeal by the Revenue, stating that no substantial question of law arose for consideration in this case.
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2009 (2) TMI 477
Remission of duty - remission of duty" is the catchword of Section 23 - word "remission" presupposes levy of duty first and thereafter remission thereof - Since there was an exemption on duty, no question of remission arise Strictures against petitioner – cost awarded to Customs Dept. – Petitioner-appellant moving different writ applications one after another on different pretext with central lis of demand notice and its effect, gross abuse of process has been caused – Appellant used machinery of High Court as a liver to resist the demand Customs Authority, which lawfully has been confirmed – Appellant liable for payments of cost due to such conduct
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2009 (2) TMI 476
Cenvat credit - unprocessed stock of fabrics held by a dealer is 'input' in terms of Notification No. 35/2003-C.E - Held that: - processor had purchased directly from the manufacturer of grey fabrics, the grey fabrics purchased will be undoubtedly and undisputedly an inputs in the hands of the processor - . Merely because a dealer has been introduced in between the manufacturer of inputs and the manufacturer of finished goods, the nature of these products as input cannot undergo a change - credit not merely for stock with the traders but also in respect of stock lying with the processors - Appeals is dismissed
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2009 (2) TMI 475
Cenvat / Modvat Credit - on the input use in the manufacture of the embroidery - Modvat Credit taken prior to the amendment to rule 96 ZI but utilized at a later date - operating under the compounded levy scheme as provided under Rule 96 ZH of the Central Excise Rules, 1944 - prohibition which has been incorporated in the rule w.e.f. 2-6-1998 from availing the Modvat Credit on the input use in the manufacture of the embroidery and capital goods came into existence on 2-6-1998 – Held that: - assessee had already paid the taxes on the basis that when the goods are utilized in the manufacture of further products as inputs thereto then the tax on these goods gets adjusted which are finished subsequently - right accrued to the assessee on the date when they paid the tax on the raw materials or the inputs and that right would continue until the facility available thereto gets worked out or until those goods existed - retrospective application of the amended scheme cannot defeat the accrued rights to avail Modvat Credit - accordingly decided in favour of the appellant.
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2009 (2) TMI 474
Issues:
Petition to quash criminal proceedings under the Companies Act for non-compliance with filing requirements and holding annual general body meetings.
Analysis:
The petitioner sought to quash proceedings against him under sections 220(3), 159, 161, 162, 168, and 210(5) of the Companies Act, 1956, for various non-compliance offenses related to the financial years ending 2003-04 and 2004-05. The petitioner claimed that he resigned as a director of the company on 1-2-2003 and, therefore, should not be held responsible for the alleged violations. The respondent argued that they had not received confirmation regarding the submission of Form No. 32 indicating the petitioner's resignation from directorship. However, the petitioner had indeed submitted a resignation letter dated 1-2-2003 to the managing director of the company and filed Form No. 32 with the Company Law Board. The Court found that the petitioner had taken appropriate steps to resign from the directorship, absolving him of liability for the company's non-compliance during the relevant financial years.
The Court's decision was based on the petitioner's proactive resignation from the directorship of the company and the subsequent filing of Form No. 32 with the Company Law Board. By resigning and completing the necessary formalities, the petitioner demonstrated his disassociation from the company's affairs, relieving him of responsibility for the mentioned non-compliance issues. As a result, the Court allowed the petitions and quashed the criminal proceedings initiated against the petitioner in multiple cases before the Special Court of Economic Offences in Bangalore.
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2009 (2) TMI 473
Non filing of statement of affairs - the official liquidator has filed a complaint against the respondents who were the ex-directors of the company under liquidation - Held that:- The evidence shows that the official liquidator desires to prosecute the offenders with a fine of more than ₹ 2 lakhs since the offence of non-filing of the statement of affairs is a continuing offence.
However, taking into consideration on the peculiar facts and circumstances of the case we order the fifth respondent to pay a fine of ₹ 25,000. The fine shall be payable within six weeks from the date of the order and in the event of default in payment of fine, the fifth respondent shall undergo simple imprisonment for a period of two months. As regards the first respondent Mr. Samuel James Fredrick, the second respondent Mr. N. Chandrasekaran, the third respondent Mr. M.J. Premnath, the fourth respondent Ms. P. Bhuvaneswari and the sixth respondent Mr. B. Raghavan, it is held that the prosecution has failed to establish that they have committed default in filing the statement of affairs without reasonable excuse. In view of the same, the said respondents are acquitted of the charges framed against them.
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2009 (2) TMI 472
Scheme of arrangement - Held that:- The scheme is not just, fair or proper and the court cannot grant its sanction to such a scheme. It is not bona fide moved by the petitioners. The court further forms an opinion that by proposing the schemes one after another, the petitioners are creating legal hindrances in the way of the official liquidator to proceed with the disposal of the assets of the company in liquidation. As a matter of fact, in the past, auctions were held, offers were invited and accepted, part consideration was received by the official liquidator and it is only by virtue of the scheme proposed, the entire transaction was given a go-bye. The company went into liquidation in 2003 and even in 2009, the assets could not be sold. They have been getting deteriorated day by day. The court, therefore, outrightly refuses to grant its sanction and the resultant effect thereof is that all the three petitions are dismissed.
Since the petitions are dismissed and since a statement was made before the court during the course of arguments and even in the petition that earlier application moved for convening the meeting is of no consequence in view of the present scheme, the official liquidator can proceed with the disposal of the assets of the company in liquidation.
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2009 (2) TMI 471
Bogus transactions - whether the transfer of these 200 shares are true? - Injunction -
Held that:- There is nothing whatsoever to indicate any mala fides on the part of the Appellant or collusion between the Appellant and the other Respondents as regards the transfer of the said 200 shares. The Petitioner admittedly had done nothing since November, 2005 when his father expired, up to 15-12-2008 when he filed the petition to protect his alleged rights. As a result of his negligence and inaction in protecting his alleged right, the Appellant an innocent third party has irreversibly altered its position to its detriment. Admittedly, the records of the company did not even remotely indicate any subsisting right of the Petitioner in respect of the said 200 shares. Nor was there anything on the record of the company which ought to have put the Appellant to Notice of any such right.
It was rightly contended on behalf of the Appellants before the Company Law Board that it had advanced a sum of ₹ 1,640 crores to the company under a valid and legal transaction. Thus, the basis for granting the injunction against the Appellant is unsustainable in law and on facts. Appeal allowed.
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2009 (2) TMI 470
Winding up - Overriding preferential payments - Dues in relation to the Municipal Tax - Held that:- Appeal allowed. Dues of the Municipality would also not even otherwise come within the purview of the crown debt. Even a crown debt could be discharged only after the secured creditors stand discharged. Once the property is sold, the assets of the company are required to be distributed to the creditors in order of preference. As the respondent-Municipality was not a secured creditor, the impugned Judgment cannot be sustained.
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2009 (2) TMI 469
Injunction orders - unfairness in conducting the meeting - Held that:- Having accepted that there was an element of unfairness in conducting the meeting insofar as Item No. 6 is concerned, that the company’s off-the-cuff response was unconvincing and that the conduct of postponing the voting was undesirable, in our opinion, the Trial Court erred in not continuing the injunction granted by it earlier on the premise that positive material had not been placed by the plaintiff to show that the resolution would have failed if poll had been conducted on the date originally fixed. Grant or refusal to grant injunction must be based on exercise of sound judicial discretion. We wonder what more was required of the plaintiff to have the injunction continued.
We, therefore, find merit in the contention of the plaintiff that the shareholders who might have been present in the meeting held on 25-9-2006 to defeat resolution No. 6 were given a raw deal and we are of the considered view that the Trial Court erred in failing to exercise discretion by continuing the injunction already granted in his favour. The decision in Dalpat Kumar’s case (supra) does not persuade us to refuse injunction since we are convinced that the plaintiff has succeeded in satisfying the recognised factors based whereon an injunction ought to follow.
While allowing the appeals preferred by the plaintiff and dismissing the appeal filed by Teji Mandi, we direct that the order passed by the Trial Court on 6-11-2006 shall continue till disposal of the suit.
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2009 (2) TMI 468
Issues:
1. Application seeking directions to Official Liquidator to handover possession of assets for action under SARFAESI Act.
2. Conflict between SARFAESI Act and Companies Act regarding sale of assets of company-in-liquidation.
Analysis:
Issue 1: The application under section 446 of the Companies Act requested directions for the Official Liquidator to hand over possession of assets of the company-in-liquidation for action under section 13(4) of the SARFAESI Act. The application was contested by ex-directors of the company, arguing that the Companies Act provisions prevail over the SARFAESI Act. The Court acknowledged the pre-eminent powers of the Company Court in dealing with assets of a company-in-liquidation. The SARFAESI Act, while empowering secured creditors to take possession of assets, also recognizes the authority of the Company Court in such matters.
Issue 2: The Court noted that the SARFAESI Act operates in addition to, and not in derogation of, the Companies Act. When a winding-up order is in effect or an Official Liquidator is appointed, no other legal proceedings can be initiated against the company without the Court's permission. The Court directed that the sale of the company's assets be conducted by the secured creditor in collaboration with the Official Liquidator, ensuring compliance with the Companies Act. The Court emphasized the importance of securing the best price for assets through a transparent sale process, subject to Court confirmation.
In conclusion, the Court allowed the application, permitting the IFCI to proceed with the sale of assets in coordination with the Official Liquidator, ensuring compliance with the Companies Act and seeking Court confirmation for the sale.
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2009 (2) TMI 467
Winding up - Statement of affairs to be made to Official Liquidator - Held that:- The date of winding up or the order of appointment of provisional liquidator shall first be ascertained.
Any person who shall answer the description of a director coming within the definition of section 2(13) of the Companies Act and the classes of persons as detailed under section 454(2), clauses (a) to (d), shall be answerable to give the statement of affairs of the company. Production of copy of resignation letter or entries in Form No. 32 shall not be conclusive evidence of whether a person was a director or not at the relevant time. It would be a matter of proof of fact that the official liquidator shall consider before lodging a complaint and at times, may itself be a subject of adjudication at the trial.
The liability of such director shall be within 21 days from the relevant date or within such time not exceeding three months from the date as the official liquidator or the court may grant for special reasons. The action of the official liquidator shall be merely subject to the directions of the court and will require no prior sanction to initiate action.
If there is a default on the part of the person liable to give the statement of affairs under the above circumstances within time, the official liquidator is entitled to assume that there is no reasonable excuse and by making express statement that there was no reasonable excuse to make such default, he could make a complaint to the court for action for the offence under section 454(5) by resorting to the provisions of section 454(5A).
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2009 (2) TMI 466
Winding up - Circumstances in which a company may be wound up - Held that:- The income of the company has nosedived to a dismal figure of ₹ 20,204 in the year ended dated 31-3-2006, as compared to its income of ₹ 1,78,88,963 in the year ended 31-3-2002, i.e., within a span of four years. The balance-sheets of the company continues to show losses year after year and there is nothing shown to suggest any improvement in the coming years.
In view of the law discussed above and by carefully analysing the facts and records relied upon by both counsel, it is just and equitable to wind up the company and allow this petition, under section 433(e), ( f) and (c) read with sections 434 and 439 of the Act.Accordingly, this petition admitted and direct that the respondent-company be wound up. The Official Liquidator attached to this court is appointed as the Liquidator in respect of the respondent-company. He shall forthwith takeover all the assets and records of the respondent-company and proceed according to law. Citation shall be published in The Statesman (English) and Jansatta (Hindi) for 16-3-2009. The petitioner may take steps accordingly.
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2009 (2) TMI 465
Whether the proceedings under the provisions of section 630 of the Companies Act, 1956 would cover within its purview only the employee of the company or also the persons claiming a right through him or under him?
Held that:- Appeal dismissed. The respondent-company was within its jurisdiction to get the suit premises vacated under the provisions of section 630 of the Act. The learned courts below were justified in arriving at a finding that the provisions of section 630 of the Act are applicable to the facts and circumstances of the present case.
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2009 (2) TMI 464
Jurisdiction of trial court - Whether trial court has no jurisdiction to decide on the issue inasmuch as the same issue is pending before the Company Law Board Bench, Southern Region, Chennai in C.P.94/07 and further ought not to have passed the interim order of injunction in respect of allotment of shares?
Held that:- This Court without going into the merits of the matter opines that the civil revision petitioners cannot invoke the jurisdiction of this Court under Article 227 of the Constitution of India when they have two concurrent remedies, (a) As per Order 39 Rule 4 of Civil Procedure Code to vary or vacate or discharge the order passed by the trial Court in I.A. 8812/08 in O.S. 3737/08 dated 11-6-2008 and (b) to file an appeal under Order 43 Rule 1(r) of Civil Procedure Code whether the said ex parte order is a reasoned or non-reasoned one and moreover, the supervisory jurisdiction under Article 227 of the Constitution of India has to be sparingly resorted to by this Court and in this view of the matter, the civil revision petition is dismissed. Liberty is given to the revision petitioners to raise all factual and legal contentions before the trial Court including the plea of maintainability of the suit on the point of jurisdiction in accordance with law. Thus civil revision petition is dismissed
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2009 (2) TMI 463
Winding up - Circumstances in which a company may be wound up - Held that:- If the company deposits in this Court a sum of ₹ 3,50,00,000 on or before 31-3-2009, the same shall be invested in a nationalised bank initially for a period of one year and thereafter for like periods of one year each.
In the event of the amount being so deposited and in the event of the petitioner filing a suit within twelve weeks from the date of the petitioner’s advocate being informed of the same in writing, the amount shall stand transferred to the credit of that suit.
In the event of the suit not being filed as aforesaid, the petition shall stand dismissed and the amount with interest thereon shall be refunded to the respondent-company.
If the company fails to deposit the amount as aforesaid, the petition shall stand admitted and shall be advertised in the Free Press Journal, Maharashtra Times and Maharashtra Government Gazette. The petitioner to deposit an amount of ₹ 10,000 with prothonotary and senior master of this Court within four weeks from the date of default
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9911796707
