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Showing 61 to 80 of 590 Records

• 2011 (10) TMI 723
  
  Issues involved: Appeal against order of CIT(A)-XIV, Ahmedabad for assessment year 1999-00 and 2000-01.
  
  Issue 1: Disallowance of share issue expenses under section 35D
  
  - The appeal challenged the deletion of disallowance of share issue expenses of Rs. 23,23,312 under section 35D of the I.T. Act.
  - The ITAT directed the Assessing Officer to bifurcate the expenses related to shares and debenture expenses, and deferred revenue expenses for proper evaluation, following a similar decision in a previous case.
  - The AO was instructed to verify the payment of employees' contribution to PF and ESI before the due date of filing the return for allowance.
  
  Issue 2: Reopening of assessment proceedings and various disallowances for assessment year 2000-01
  
  - The appeal contested the reopening of assessment proceedings u/s.147 of the I.T. Act and various disallowances made by the AO.
  - Grounds related to depreciation, set off of interest income against public issue expenses, disallowance under section 35D, and deduction u/s.80IA on 'other income' were discussed.
  - The ITAT directed the AO to verify relevant facts and allow the claims based on previous judgments and specific directions.
  
  Issue 3: Disallowance of deduction u/s.80IA on 'other income'
  
  - The Ld. AR presented details of 'other income' including interest income, exchange rate difference, excise credit, and export incentives.
  - Certain items were not pressed for want of details, leading to their dismissal.
  - The ITAT directed the AO to verify the nexus of interest income and allowed deductions on certain items related to industrial undertakings and business income.
  
  Issue 4: Disallowance of deduction u/s.80HHC
  
  - The Ld. AR did not press this ground, resulting in its dismissal.
  - General grounds and those not pressed by the Ld. AR were dismissed as not pressed.
  - The ITAT allowed the appeal for statistical purposes based on the discussions and directions provided in the judgment.
  
  This summary provides a detailed overview of the issues involved in the legal judgment, highlighting the key arguments and decisions made by the ITAT for each issue raised in the appeal.

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• 2011 (10) TMI 722
  
  The Karnataka High Court considered whether certain expenses should be excluded from total turnover for computing deductions under sections 10A and 10B of the Income Tax Act, 1961. The court referred to a previous case involving M/s Tata Elxsi Ltd. and held that the expenses must be excluded. As a result, the appeals by the revenue were dismissed.

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• 2011 (10) TMI 721
  
  The High Court Bombay granted leave under Rule 21 of the Companies (Court) Rules 1959. The petition was admitted and fixed for hearing on November 18, 2011. The petitioner was required to serve notices to relevant authorities and creditors before the hearing date. Publication in newspapers was also mandated, with dispensation of notice in the Maharashtra Government Gazette. An Affidavit of Service needed to be filed in the Registry as per Rule 30 of the Companies (Court) Rules, 1959.

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• 2011 (10) TMI 720
  
  The High Court of Bombay granted leave under rule 21 of the Companies (Court) Rules 1959 for the petition, fixed for hearing on November 18, 2011. The petitioner must serve notices to relevant authorities and creditors before the hearing date. Publication in newspapers is required, and filing an Affidavit of Service is mandatory.

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• 2011 (10) TMI 719
  
  Issues involved:
  Interim injunction on trademark infringement, secondary distinctiveness of trademark, monopoly of deity's name in trademark, relevance of trademark registration in infringement case.
  
  Interim Injunction:
  The appellant sought an interim injunction against the defendant from selling "Ghee" using the trademark "KRISHNA." The court restrained the defendant from using "KRISHNA" alone but allowed the sale with the label "PARUL'S LORD KRISHNA" with equal prominence to avoid confusion.
  
  Secondary Distinctiveness:
  The appellant claimed exclusive rights to the word "KRISHNA" due to its unique style and association with dairy products. The court noted that several manufacturers used "KRISHNA" in their trademarks, questioning the appellant's claim of distinctiveness.
  
  Monopoly of Deity's Name:
  The defendant argued that "KRISHNA" is a common word associated with a Hindu deity, challenging the appellant's monopoly claim. The court held that a deity's name should not be monopolized, especially when associated with specific goods like milk and butter.
  
  Trademark Registration:
  The court clarified that the appellant's registration was for the unique style of "KRISHNA," not the word itself. The registration did not grant exclusive rights to a common word like "KRISHNA," in line with legal precedents.
  
  Appellate Jurisdiction:
  The court cited the law on appellate jurisdiction regarding interlocutory orders, emphasizing that appellate courts should not interfere unless the lower court's discretion was exercised arbitrarily or ignored legal principles. The court upheld the single judge's decision, highlighting that final judgment would be based on trial evidence.
  
  Conclusion:
  The court dismissed the appeal, directing the respondent to maintain sales records. No costs were awarded, and the judgment emphasized that the observations were tentative and limited to the interim stage, pending final trial proceedings.

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• 2011 (10) TMI 718
  
  Issues Involved:
  1. Sanction of the Scheme of Amalgamation u/s 391(2) and 394 of the Companies Act, 1956.
  2. Share Exchange Ratio.
  3. Valuation of Shares.
  4. Compliance with statutory requirements and objections.
  
  Summary:
  
  1. Sanction of the Scheme of Amalgamation u/s 391(2) and 394 of the Companies Act, 1956:

  The second motion joint Petitions were filed seeking sanction of the Scheme of Amalgamation of SANJOG TECHNOLOGIES PRIVATE LIMITED (Transferor Company) with PREET MACHINES LIMITED (Transferee Company). The registered offices of both companies are situated in New Delhi, within the jurisdiction of this court. Details regarding the incorporation, capital structure, and latest audited Annual Accounts of both companies were provided. The Board of Directors of both companies approved the Scheme, and no proceedings u/s 235 to 251 of the Act were pending against the Petitioner Companies.

  2. Share Exchange Ratio:

  The Scheme provides that upon its final effect, the Transferee Company shall issue one Equity Share of Rs. 10 each, credited as fully paid-up, for every ten Equity Shares of Rs. 10 each held in the Transferor Company. The court had earlier dispensed with the requirement of convening meetings of Shareholders and Unsecured creditors of both companies, as there were no Secured Creditors.

  3. Valuation of Shares:

  The Official Liquidator's report raised concerns about the basis of the Share Valuation Report prepared by M.K. Arora and Co., Chartered Accountants. The valuer had taken Fair Value for the Transferee Company at Rs. 100 per share and for the Transferor Company at Rs. 10 per share, without considering other values per share. However, the court opined that valuation of shares is a technical and complex problem best left to experts in the field of accountancy. The court referenced judgments from the Supreme Court, emphasizing that it is not for the court to substitute its exchange ratio if the valuation has been accepted unanimously by all shareholders.

  4. Compliance with statutory requirements and objections:

  Notices were issued to the Regional Director, Northern Region, and the Official Liquidator, and citations were published in newspapers. The Regional Director confirmed that all employees of the Transferor Company would become employees of the Transferee Company without any break or interruption in their services. The Official Liquidator confirmed that the affairs of the Transferor Company were not conducted in a manner prejudicial to its members, creditors, or public interest. No objections were received from any party. The court found no merit in the observations made by the Official Liquidator regarding the exchange ratio and did not order any modification or amendment in the Scheme.

  Conclusion:

  In view of the approval by shareholders and creditors, and the reports filed by the Regional Director and the Official Liquidator, the court granted sanction to the Scheme u/s 391 and 394 of the Act. The properties, rights, and liabilities of the Transferor Company will be transferred to the Transferee Company without any further act or deed, and the Transferor Company shall stand dissolved without winding up. The order does not grant exemption from payment of stamp duty, taxes, or any other charges. The Petitioner Companies will voluntarily deposit Rs. 1.50 lacs with the Common Pool fund of the Official Liquidator within three weeks. The Petitions are allowed in the above terms.

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• 2011 (10) TMI 717
  
  Issues Involved:
  1. Confirmation/recognition of transfer of shares.
  2. Validity and legality of the transfer of shares.
  3. Applicability of Section 536(2) of the Companies Act, 1956.
  4. Allegations of fraud and misrepresentation.
  5. Limitation and delay in filing the application.
  6. Dispute regarding directorship and shareholding.
  7. Procedural compliance and validity of board meetings.
  8. Public interest and interest of the company under liquidation.
  
  Detailed Analysis:
  
  1. Confirmation/Recognition of Transfer of Shares:
  The applicant sought confirmation/recognition of the transfer of 3,498 equity shares of Rs. 100 each in Elmot Engineering Co. P. Ltd. (in liquidation). The applicant claimed that these shares were transferred to him before the winding-up order dated March 22, 1990, but after the filing of the winding-up petition. The applicant argued that the transfer should be validated under Section 536(2) of the Companies Act, 1956.
  
  2. Validity and Legality of the Transfer of Shares:
  The applicant claimed that the transfer was valid, supported by share certificates and minutes of a board meeting held on March 3, 1990. However, the respondent contested the validity, alleging that the transfer was without consideration, lacked valid transfer documents, and was not approved by the board of directors. The respondent also pointed out discrepancies in the minutes and the absence of proper procedural compliance.
  
  3. Applicability of Section 536(2) of the Companies Act, 1956:
  The court examined Section 536(2), which states that any disposition of property or transfer of shares after the commencement of winding-up proceedings is void unless the court orders otherwise. The applicant argued that the transfer was not void but voidable and should be validated by the court. The court noted that the official liquidator did not challenge the transaction, and the issue was primarily raised by the respondent.
  
  4. Allegations of Fraud and Misrepresentation:
  The respondent alleged that the applicant's claim was fraudulent, pointing to an affidavit dated July 29, 1996, where the applicant acknowledged that the respondent was the sole beneficiary of the trusts holding the shares. The respondent also argued that the minutes of the board meeting were fabricated, as they were recorded on loose leaf paper with a seven-digit telephone number, which was not in use until 1997.
  
  5. Limitation and Delay in Filing the Application:
  The respondent argued that the application was time-barred, filed 19 years after the winding-up order. The court noted that there was no specific period of limitation provided by the Companies Act for such applications, but the delay was significant and unexplained. The court found that the applicant's claim was belated and raised after a substantial period without satisfactory explanation.
  
  6. Dispute Regarding Directorship and Shareholding:
  The respondent contested the applicant's claim of directorship and shareholding in the company under liquidation. The court noted that the applicant had not produced evidence of filing Form No. 32 with the Registrar of Companies regarding his appointment as director. The court also observed that the official liquidator did not recognize the applicant as a director, as he was not called upon to file the statement of affairs.
  
  7. Procedural Compliance and Validity of Board Meetings:
  The court examined the procedural compliance related to the board meeting held on March 3, 1990. The applicant admitted that the minutes were recorded on loose leaf paper, and the original minutes book was handed over to Mr. C.V K. Rao for updating. The court found discrepancies in the minutes and questioned the validity of the meeting and the transfer of shares.
  
  8. Public Interest and Interest of the Company Under Liquidation:
  The respondent argued that the applicant's primary motive was to acquire valuable properties and assets of the company under liquidation, whereas the respondent was making efforts to revive the company. The court considered the public interest and the interest of the company under liquidation, noting that the applicant's claim was not in the best interest of the company or its creditors.
  
  Conclusion:
  The court dismissed the application, finding that the applicant's claim was belated, highly disputed, and lacked satisfactory explanation for the delay. The court also noted discrepancies in the procedural compliance and the validity of the board meeting. The court emphasized that the applicant's claim was not in the best interest of the company under liquidation or its creditors. The application was dismissed without any order as to costs.

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• 2011 (10) TMI 716
  
  Issues involved: Copyright infringement, unauthorized software loading, relief of damages and rendition of accounts.
  
  Copyright Infringement: The plaintiffs, including Microsoft Corporation and its Indian subsidiary, filed a suit seeking injunction against copyright infringement of their software products, such as Microsoft Windows and Office. They claimed ownership of the copyright in these works under the US Copyright Law and the Copyright Act, 1957. The plaintiffs alleged that the defendants, a business entity engaged in selling computer hardware, were infringing their copyrights by loading unlicensed software onto computers sold to customers. The plaintiffs provided evidence, including technical examination reports, to support their claim of infringement.
  
  Interim Injunction: The Court granted an ex parte ad-interim injunction order against the defendants, restraining them from marketing any unlicensed versions of the plaintiffs' software. A Local Commissioner was appointed to inspect the defendants' premises and computer systems to gather evidence of the infringement. The Commissioner's report confirmed the presence of unlicensed Microsoft software on the computers sold by the defendants.
  
  Decree for Permanent Injunction: The defendants did not contest the suit and were proceeded ex parte. The plaintiffs presented their evidence, which remained unrebutted as there was no cross-examination. The Court accepted the plaintiffs' statements as correct and decreed in favor of the plaintiffs, granting a permanent injunction against the defendants. The Court also awarded damages of Rs. 2 lakh to the plaintiffs and ordered the defendants to bear the costs of the suit.
  
  Conclusion: The Court decreed the suit in favor of the plaintiffs, granting a permanent injunction against the defendants for copyright infringement, awarding damages, and ordering rendition of accounts.

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• 2011 (10) TMI 715
  
  Issues involved: Copyright infringement, unauthorized software loading, rejection of plaint
  
  Copyright Infringement: The plaintiffs, including Microsoft Corporation and its Indian subsidiary, filed a suit seeking permanent injunction against copyright infringement, delivery up, rendition of accounts, and damages. They claimed ownership of copyrights in software products like Microsoft Windows and Microsoft Office, stating that the computer programs are original literary works protected under the Copyright Act, 1957. The plaintiffs alleged that the defendants, a business entity engaged in selling computer hardware, infringed their copyrights by unauthorized hard disk loading of software onto computers sold by them. The plaintiffs provided evidence, including certificates of registration for the software programs, and the court granted a decree for permanent injunction in favor of the plaintiffs, along with damages and costs.
  
  Unauthorized Software Loading: The defendants were accused of infringing the plaintiffs' copyrights by loading unlicensed or pirated versions of software onto computers sold by them. The plaintiffs' technical expert confirmed the presence of the plaintiffs' software on a laptop computer system sold by the defendants without authorization. The court granted an ex parte ad-interim injunction against the defendants, restraining them from reproducing, selling, or distributing the copyrighted software without authorization. Despite the defendants' attempts to challenge the plaint, they were proceeded ex parte, and the plaintiffs' evidence remained unrebutted, leading to the decree in favor of the plaintiffs.
  
  Rejection of Plaint: Defendant No.1 filed an application for rejection of the plaint, arguing that there was no cause of action against them as they were not involved in any copyright violation. They claimed that there was no transaction between defendant No.1 and defendant No.2, the business entity engaged in copyright infringement. However, defendant No.1 failed to file a written statement and stopped appearing before the court, leading to the court proceeding ex parte against the defendants. The court ultimately decreed in favor of the plaintiffs, granting permanent injunction, damages, and costs.

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• 2011 (10) TMI 714
  

  Whether a specified officer empowered under Section 54(1) of the Wild Life (Protection) Act, 1972 as amended by the Wild Life (Protection) Amendment Act, 2002 (Act 16 of 2003) to compound offences has power, competence and authority, on payment of a sum of money by way of composition of the offence by a person who is suspected to have committed offence against the Act, to order forfeiture of the seized items? - Held that:- When the language of the statutory provision is plain and clear no external aid is required and the legislative intention has to be gathered from the language employed. In our view, neither Section 54(2) of the 1972 Act by itself nor Section 54(2) read with Section 39(1)(d) or any other provision of the 1972 Act empowers and authorizes the specified officer under Section 54, on composition of the offence, to deal with the seized property much less order forfeiture of the seized property used by the person suspected of commission of offence against the Act.

  The order passed by the Conservator of Forests, Nizamabad for forfeiture of the vehicle and two rifles to the state government is de hors the provisions of the 1972 Act and unsustainable. The High Court has rightly set aside such illegal order. However, the Single Judge was not right in his order dated March 29, 2005 in directing the Respondents therein (present Appellants) to release the vehicle and rifles. The Division Bench also erred in maintaining the above direction. Since the items were seized in exercise of the power under Section 50(1)(c), the seized property has to be dealt with by the Magistrate under Section 50(4) of the 1972 Act. The Respondent Nos. 1 to 3 must accordingly apply to the concerned Magistrate for the return of seized items who obviously will consider such application according to law.

  We hold, as we must, that a specified officer empowered under Section 54(1) of the 1972 Act as substituted by Act 16 of 2003 to compound offences, has no power, competence or authority to order forfeiture of the seized items on composition of the offence by a person who is suspected to have committed offence against the Act. Our answer to the question framed at the outset is in the negative.

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• 2011 (10) TMI 713
  
  Issues Involved:
  1. Contravention of provisions relating to notices for board and general meetings.
  2. Dilution of economic shareholding of the petitioner.
  3. Denial of inspection of documents to the petitioner.
  4. Interference by respondent No. 3 in the affairs of the company.
  
  Issue-wise Detailed Analysis:
  
  1. Contravention of provisions relating to notices for board and general meetings:
  The petitioner alleged that the respondents failed to give proper notice for the board meetings and general meetings, contravening the provisions of the shareholder agreement (SHA) and the articles of association. The respondents argued that notices were sent to the petitioner's nominee director via email and telephonically, and that the nominee director participated in the meetings through teleconference. The court found that the company followed the procedures stipulated in the articles and the SHA, and there was no contravention of provisions relating to notices. The court also noted that as per Section 286(1) of the Companies Act, notice is required to be given to directors residing in India, and the petitioner's nominee director did not have a mailing address in India.
  
  2. Dilution of economic shareholding of the petitioner:
  The petitioner contended that the respondents allotted shares of respondent No. 8 to respondent No. 3 without offering them to the petitioner, diluting their economic shareholding. The court noted that respondent No. 8 is a subsidiary of respondent No. 1, and the petitioner is not a shareholder of respondent No. 8. The court held that the petitioner, not being a shareholder of respondent No. 8, is not entitled to be offered shares. The court found no illegality in the allotment of shares to respondent No. 3, as the decision was taken by the majority of the board of directors of respondent No. 8 in accordance with the articles of association and the SHA.
  
  3. Denial of inspection of documents to the petitioner:
  The petitioner claimed that they were not given access to inspect the records and documents of the company. The court acknowledged that the petitioner, as a shareholder and director, is entitled to inspect the registers, records, and other documents of respondent No. 1 according to law and can obtain copies thereof. The court directed that the petitioner should be provided with the necessary information and documents.
  
  4. Interference by respondent No. 3 in the affairs of the company:
  The petitioner alleged that respondent No. 3 was interfering in the day-to-day management of the company, contrary to the SHA and the articles of association, which stipulate that the nominee directors of the investor (respondent No. 3) are non-executive directors and not responsible for day-to-day management. The court found that the petitioner did not provide sufficient evidence of interference by respondent No. 3 in contravention of the articles. The court noted that respondent No. 3, as an investor holding 44.99% shares in respondent No. 1, has the right to nominate directors as per the SHA.
  
  Relief:
  The court concluded that the petitioner failed to make out a case of oppression or mismanagement against the respondents. The court dismissed the petition and vacated all interim orders. However, the court acknowledged the petitioner's willingness to exit the company and suggested that the company or any of its shareholders may buy out the petitioner's shares based on a valuation as of the date of filing of the petition, with the valuation to be conducted by an independent valuer in consultation with the petitioner. The costs of the valuer would be shared equally by the petitioner and the company.

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• 2011 (10) TMI 712
  

  Seeking adequate compensation for the victims of the Uphaar tragedy - violations of fundamental and indefeasible rights guaranteed under Article 21 of the Constitution of India and the statutory obligations - acts of omission and commission by the public authorities concerned namely Delhi Vidyut Board ('DVB'), MCD Fire Force and the Licensing Authority - The High Court after exhaustive consideration of the material including the reports, recorded statements and other material, allowed the writ petition. In the said order, the High Court identified the causes that led to the calamity and persons responsible therefore. It held the theatre owner, DVB, MCD and the Licensing Authority responsible for the fire tragedy and held jointly and severally liable to compensate the victims. It exonerated the Delhi Fire Force. The High Court approved the recommendations of Naresh Kumar Committee which were extracted in detail in the judgment of the High Court. The theatre owner, Delhi Police and MCD have not accepted the judgment of HC and have filed these appeals.

  In regard to performance of statutory functions and duties, the courts will not award damages unless there is malice or conscious abuse. The cases where damages have been awarded for direct negligence on the part of the statutory authority or cases involving doctrine of strict liability cannot be relied upon in this case to fasten liability against MCD or the Licensing Authority. The position of DVB is different, as direct negligence on its part was established and it was a proximate cause for the injuries to and death of victims. It can be said that in so far as the licensee and DVB are concerned, there was contributory negligence. The position of licensing authority and MCD is different. They were not the owners of the cinema theatre. The cause of the fire was not attributable to them or anything done by them. Their actions/omissions were not the proximate cause for the deaths and injuries. The Licensing Authority and MCD were merely discharging their statutory functions (that is granting licence in the case of licensing authority and submitting an inspection report or issuing a NOC by the MCD). In such circumstances, merely on the ground that the Licensing Authority and MCD could have performed their duties better or more efficiently, they cannot be made liable to pay compensation to the victims of the tragedy. There is no close or direct proximity to the acts of the Licensing Authority and MCD on the one hand and the fire accident and the death/injuries of the victims. But there was close and direct proximity between the acts of the Licensee and DVB on the one hand and the fire accident resultant deaths/injuries of victims.

  In view of the well settled principles in regard to public law liability, in regard to discharge of statutory duties by public authorities, which do not involve malafides or abuse, the High Court committed a serious error in making the licensing authority and the MCD liable to pay compensation to the victims jointly and severally with the Licensee and DVB.

  It was contended that DVB have installed a transformer of a capacity of 1000 KV without obtaining the statutory sanction/approval and without providing all the safety measures which it was duty bound to provide under the relevant Electricity Rules, and therefore, DVB alone should be responsible for the tragedy. This contention has no merit. In fact none in the main hall (ground floor of the theatre) died. Those on the second floor also escaped. It is only those in the balcony caught in noxious fumes, which died of asphyxiation. The deaths were on account of the negligence and greed on the part of the licensee in regard to installation of additional seats, in regard to closing of an exit door, parking of cars in front of transformer room by increasing parking from 15 to 35 and other acts. We therefore reject the contention that DVB should be made exclusively liable to pay the compensation. We have already held that the Licensing Authority and MCD are not liable. Therefore, the liability will be 85% (Licensee) and 15% (DVB).

  Whether the income and multiplier method adopted to finally determine compensation can be arrived while awarding tentative or palliative compensation by way of a public law remedy under Article 226 or 32 of the Constitution - It can be by way of making monetary amounts for the wrong done or by way of exemplary damages, exclusive of any amount recoverable in a civil action based on tortuous liability. But in such a case it is improper to assume admittedly without any basis, that every person who visits a cinema theatre and purchases a balcony ticket should be of a high income group person. In the year 1997, ₹ 15,000 per month was rather a high income. It is known that zealous movie goers, even from low income groups, would not mind purchasing a balcony ticket to enjoy the film on the first day itself. To make a sweeping assumption that every person who purchased a balcony class ticket in 1997 should have had a monthly income of ₹ 15,000 and on that basis apply high multiplier of 15 to determine the compensation at a uniform rate of ₹ 18 lakhs in the case of persons above the age of 20 years and ₹ 15 lakhs for persons below that age, as a public law remedy, may not be proper. While awarding compensation to a large group of persons, by way of public law remedy, it will be unsafe to use a high income as the determinative factor. Therefore the proper course would be to award a uniform amount keeping in view the principles relating to award of compensation in public law remedy cases reserving liberty to the legal heirs of deceased victims to claim additional amount wherever they were not satisfied with the amount awarded. Taking note of the facts and circumstances, the amount of compensation awarded in public law remedy cases, and the need to provide a deterrent, we are of the view that award of ₹ 10 lakhs in the case of persons aged above 20 years and ₹ 7.5 lakhs in regard to those who were 20 years or below as on the date of the incident, would be appropriate. We do not propose to disturb the award of ₹ 1 lakh each in the case of injured. The amount awarded as compensation will carry interest at the rate of 9% per annum from the date of writ petition as ordered by the High Court, reserve liberty to the victims or the LRs. of the victims as the case may be to seek higher remedy wherever they are not satisfied with the compensation. Any increase shall be borne by the Licensee (theatre owner) exclusively.

  three factors are available the compensation can be determined - The first is the age of the deceased, the second is the income of the deceased and the third is number of dependants (to determine the percentage of deduction for personal expenses). For convenience the third factor can also be excluded by adopting a standard deduction of one third towards personal expenses. Therefore just two factors are required to be ascertained to determine the compensation in 59 individual cases. First is the annual income of the deceased, two third of which becomes the annual loss of dependency the age of the deceased which will furnish the multiplier in terms of Sarla Verma. The annual loss of dependency multiplied by the multiplier will give the compensation. we direct the Registrar General of Delhi High Court to receive applications in regard to death cases, from the claimants (legal heirs of the deceased) who want a compensation in excess of what has been awarded that is ₹ 10 lakhs/Rs. 7.5 lakhs. Such applications should be filed within three months from today. He shall hold a summary inquiry and determine the compensation.

  Re: Punitive damages the question of award of punitive damages of ₹ 2,50,00,000/- against the licensee. Before examining whether such punitive damages could be awarded at all, we have to notice the apparent mistake in arriving at the sum of ₹ 2.5 crores. What were illegal seats were the 15 seats that were added by securing an order dated 4.10.1980. The remaining 37 seats were found to be valid by the authorities. Therefore, if at all the licensee is to be made liable to reimburse the profits earned from illegal seats, it should be only in regard to these 15 seats and the eight seats in the Box which was the cause for closing one of the exits. In so far as the eight seats in the owner's box, though it is alleged that they were intended to be used only as complimentary seats, for the purpose of award of punitive damages, they are treated at par with other balcony seats. The High Court also wrongly assumed that the ticket value to be ₹ 50/- from 1979 to 1996, because it was ₹ 50/- in the year 1997 for a balcony seat. Another erroneous assumption made is that for all shows on all the days, all these additional seats would be fully occupied. On a realistic assessment, (at a net average income of ₹ 12/- per seat with average 50% occupancy for 23 seats) the profits earned from these seats for 17 years would at best ₹ 25,00,000/-. Be that as it may. the appropriateness and legality of award of punitive damages. In this context, we may refer to the decision in M C Mehta v. Union of India[1986 (12) TMI 378 - SUPREME COURT] wherein this Court considered the question as to what should be the measure of liability of an enterprise which is engaged in a hazardous or inherently dangerous industry, if by reason of an accident occurring in such industry, persons die or are injured.

  K.S. Panicker Radhakrishnan J. Consenting Decision - In this case, where life and personal liberty have been violated the absence of any statutory provision for compensation in the Statute is of no consequence. Right to life guaranteed under Article 21 of the Constitution of India is the most sacred right preserved and protected under the Constitution, violation of which is always actionable and there is no necessity of statutory provision as such for preserving that right. Article 21 of the Constitution of India has to be read into all public safety statutes, since the prime object of public safety legislation is to protect the individual and to compensate him for the loss suffered. Duty of care expected from State or its officials functioning under the public safety legislation is, therefore, very high, compared to the statutory powers and supervision expected from officers functioning under the statutes like Companies Act, Cooperative Societies Act and such similar legislations. When we look at the various provisions of the Cinematographic Act, 1952 and the Rules made there under, the Delhi Building Regulations and the Electricity Laws the duty of care on officials was high and liabilities strict.

  Constitutional Torts and Punitive Damages - Constitutional courts can in appropriate cases of serious violation of life and liberty of the individuals award punitive damages. However, the same generally requires the presence of malicious intent on the side of the wrong doer, i.e. an intentional doing of some wrongful act. Compensatory damages are intended to provide the claimant with a monetary amount necessary to recoup/replace what was lost, since damages in tort are generally awarded to place the claimants in the position he would have been in, had the tort not taken place which are generally quantified under the heads of general damages and special damages. Punitive damages are intended to reform or to deter the wrong doer from indulging in conduct similar to that which formed the basis for the claim.

  We have highlighted all these facts only to indicate that rapid changes are taking place all over the world to uphold the rights of the citizens against the wrong committed by Statutory Authorities and local bodies. Despite the concern shown by this Court, it is unfortunate that no legislation has been enacted to deal with such situations. We hope and trust that utmost attention would be given by the legislature for bringing in appropriate legislation to deal with claims in Public Law for violation of fundamental rights, guaranteed to the citizens at the hands of the State and its officials.

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• 2011 (10) TMI 711
  
  Issues Involved:
  1. Jurisdiction of Assessing Officer u/s 154.
  2. Classification of interest income as "Income from Other Sources" vs. "Profits & Gains of Business".
  3. Application of Section 50C for computation of capital gains.
  
  Summary:
  
  1. Jurisdiction of Assessing Officer u/s 154:
  The first legal issue was whether the Assessing Officer (AO) had the jurisdiction to invoke provisions of Section 154 of the Income Tax Act, 1961, to change the head of income from "Profits and Gains of Business" to "Income from Other Sources". The Tribunal held that the AO could not revise the intimation and re-determine the income under Section 154, as it is not permissible to change the head of income under this provision. The Tribunal allowed the assessee's appeal on this jurisdictional issue.
  
  2. Classification of Interest Income:
  The second issue was whether the interest income earned by the assessee from money-lending activities should be classified as "Income from Other Sources" or "Profits & Gains of Business". The Tribunal found that the assessee could not provide sufficient evidence to prove that the interest income was part of its business activities. Therefore, the interest income was rightly treated as "Income from Other Sources" by the lower authorities. However, the Tribunal allowed the assessee's claim for deduction u/s 57 of the Act for interest expenditure incurred in earning such income. This issue was partly allowed in favor of the assessee.
  
  3. Application of Section 50C:
  The third issue was whether the provisions of Section 50C of the Act were applicable for computing capital gains on the sale of an office space. The Tribunal noted that the sale agreement was not registered and thus not subject to stamp duty valuation. The Tribunal referred to the explanatory circular of Finance No. 2 Act, 2009, which clarified that the amended provisions of Section 50C, including the term "assessable", were applicable from 1st October 2009. Since the relevant assessment year was 2006-07, the Tribunal held that Section 50C did not apply. This issue was allowed in favor of the assessee.
  
  Conclusion:
  The appeal in ITA No. 1866/Kol/2010 was allowed, and the appeal in ITA No. 1867/Kol/2010 was partly allowed. The order was pronounced in open court on 31.10.2011.

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• 2011 (10) TMI 710
  
  Issues Involved:
  1. Legality of the sale of movable and immovable assets of the company in liquidation.
  2. Validity of the private sale under Rule 66 of Schedule II of the Income Tax Act, 1961.
  3. Compliance with statutory provisions and the role of the Official Liquidator.
  4. Allegations of fraud and collusion in the sale process.
  5. Settlement of dues with secured creditors, workers, and statutory authorities.
  6. Rights and claims of Gujarat Industrial Investment Corporation (GIIC).
  
  Detailed Analysis:
  
  1. Legality of the Sale of Movable and Immovable Assets:
  The Official Liquidator requested the court to declare the sale of movable assets to Yusufbhai I. Parmar and Deven Rameshbhai Patel in January 2007 and the sale of immovable properties to M/s. Texraj Realty Pvt. Ltd. in June 2007 as null and void. The Liquidator argued that these sales occurred after the presentation of the winding-up petition on 29th April 2003, making them void under Sections 536(2) and 537 of the Companies Act, 1956.
  
  2. Validity of the Private Sale under Rule 66:
  The purchaser, M/s. Texraj Realty Pvt. Ltd., contended that the sale was conducted under the aegis of the Debt Recovery Tribunal (DRT) and should be considered a statutory sale under Rule 66 of Schedule II of the Income Tax Act, 1961. However, the court found that the sale did not comply with all the requirements of Rule 66, such as obtaining a certificate from the Recovery Officer and confirmation of the sale by the Recovery Officer. Therefore, the sale could not be considered a statutory sale under the RDB Act.
  
  3. Compliance with Statutory Provisions and Role of the Official Liquidator:
  The court noted that the sale was conducted without the knowledge or involvement of the Official Liquidator, which bypassed the company court and the official procedures. The Liquidator argued that such private sales lack transparency and do not ensure the highest price for the assets. The court emphasized that sales conducted through the company court and by the Liquidator follow meticulous steps to avoid allegations of lack of transparency and arbitrariness.
  
  4. Allegations of Fraud and Collusion:
  The unions and some workers alleged that the sale was collusive and fraudulent, claiming that properties worth about Rs. 250 Crores were sold for only Rs. 19.22 Crores. However, the court found no concrete evidence of fraud or collusion. The court noted that the sale occurred in 2007, and no objections were raised until much later, indicating a lack of vigilance on the part of the objectors.
  
  5. Settlement of Dues with Secured Creditors, Workers, and Statutory Authorities:
  The purchaser, M/s. Texraj Realty Pvt. Ltd., provided evidence of settling dues with secured creditors, including banks, workers, and statutory authorities. The company in liquidation claimed to have settled the claims of 1350 out of 1600 workers and paid statutory dues, including provident fund contributions. The court acknowledged these settlements and noted that the sale proceeds were used to discharge significant liabilities.
  
  6. Rights and Claims of Gujarat Industrial Investment Corporation (GIIC):
  GIIC raised objections, claiming that it was kept in the dark about the sale and that its dues were still outstanding. The court clarified that the findings and conclusions in the order were confined to the report and did not prejudice GIIC's claims. GIIC was allowed to pursue its claims in pending proceedings, and the court kept all pleas open for both sides.
  
  Conclusion:
  The court concluded that the private sale in favor of M/s. Texraj Realty Pvt. Ltd. was not conducted under the statutory provisions of the RDB Act and did not comply with Rule 66. However, given the settlements with secured creditors, workers, and statutory authorities, and the lack of concrete evidence of fraud or collusion, the court decided not to nullify the sale. The court allowed GIIC to pursue its claims independently and directed the Official Liquidator to proceed with the winding-up process in accordance with the law.

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• 2011 (10) TMI 709
  

  Benefits of Hindu Succession (Amendment) Act, 2005 availability to the appellants - Held that:- Section 97 of C. P.C. that provides that where any party aggrieved by a preliminary decree passed after the commencement of the Code does not appeal from such decree, he shall be precluded from disputing its correctness in any appeal which may be preferred from the final decree does not create any hindrance or obstruction in the power of the court to modify, amend or alter the preliminary decree or pass another preliminary decree if the changed circumstances so require.

  It is true that final decree is always required to be in conformity with the preliminary decree but that does not mean that a preliminary decree, before the final decree is passed, cannot be altered or amended or modified by the trial court in the event of changed or supervening circumstances even if no appeal has been preferred from such preliminary decree. The view of the High Court is against law and the decisions of this Court in Phoolchand1 and S.Sai Reddy2.

  We accordingly allow this appeal; set aside the impugned judgment of the High Court and restore the order of the trial court dated June 15, 2009. The trial court shall now proceed for the preparation of the final decree in terms of its order dated June 15, 2009.

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• 2011 (10) TMI 708
  
  Issues:
  - Special Leave Petition (SLP) dismissal
  - Stay order on arrears of service tax
  - Conditions for appellants to deposit arrears
  - Requirement of solvent surety
  - Filing of affidavits by the appellants
  - Entitlement to interest on stayed amount
  - Clarification on interim order scope
  - Consequences of default in deposit
  - No stay on future service tax liability
  
  Special Leave Petition Dismissal:
  The Supreme Court dismissed the Special Leave Petition (SLP) as not pressed. Additionally, various other SLPs were mentioned, and leave was granted for them to be heard on the SLP Paper Books.
  
  Stay Order on Arrears of Service Tax:
  The Court directed the appellants to deposit 50% of the arrears towards service tax within six months in three equated instalments and furnish a solvent surety for the remaining 50%. The appellants were also required to file affidavits undertaking to pay the balance arrears as directed by the Court at the final disposal of the appeals.
  
  Conditions for Appellants to Deposit Arrears:
  The appellants were mandated to deposit 50% of the arrears in three instalments by specific dates and provide a solvent surety for the remaining amount to the satisfaction of the jurisdictional Commissioner.
  
  Requirement of Solvent Surety:
  For the balance 50% of the arrears, each appellant was instructed to furnish a solvent surety to the jurisdictional Commissioner's satisfaction.
  
  Filing of Affidavits by the Appellants:
  The appellants were directed to file affidavits in the Court within four weeks, committing to pay the balance arrears of service tax as directed by the Court at the final disposal of the appeals.
  
  Entitlement to Interest on Stayed Amount:
  The successful party in the appeals would be entitled to interest on the amount stayed by the Court at a rate directed during the final disposal of the appeals.
  
  Clarification on Interim Order Scope:
  The interim order applied only to appellants who filed the required affidavits within four weeks. Any default in depositing instalments by the specified dates would lead to vacation of the stay order, allowing the department to recover the balance amount.
  
  Consequences of Default in Deposit:
  The Court clarified that failure to deposit any of the instalments by the set dates would result in the vacation of the stay order, enabling the department to recover the balance amount in accordance with the law.
  
  No Stay on Future Service Tax Liability:
  It was clarified that there was no stay on the imposition of service tax concerning future liability from 1st October 2011 under the relevant sections of the Finance Act, 1994.

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• 2011 (10) TMI 707
  
  Issues Involved:
  1. Legality of the detention order dated 26.07.1989 and the declaration dated 12.08.1991.
  2. Validity of the show cause notice issued u/s 68H(1) of the NDPS Act.
  3. Burden of proof regarding the properties being illegally acquired.
  
  Summary:
  
  1. Legality of the detention order dated 26.07.1989 and the declaration dated 12.08.1991:
  The petitioner challenged the detention order dated 26.07.1989 and the declaration dated 12.08.1991 concerning his brother. The court noted that the detention order had already been unsuccessfully challenged before the Calcutta High Court and the Supreme Court, thus attaining finality. The declaration dated 12.08.1991 had already been quashed by this Court in W.P.(Crl.) No. 315/1992. Therefore, the petitioner could not reopen these issues.
  
  2. Validity of the show cause notice issued u/s 68H(1) of the NDPS Act:
  The petitioner argued that the show cause notice was incompetent as he was not covered under Chapter V-A of the NDPS Act. The court found no merit in this submission, stating that the petitioner, being the brother of the detenue, was covered by Chapter V-A of the NDPS Act as per Section 68A(2)(d). The court also clarified that the initial detention order dated 26.07.1989 remained intact and valid, and only the detention beyond three months was held illegal due to the quashed declaration.
  
  3. Burden of proof regarding the properties being illegally acquired:
  The petitioner contended that the show cause notice was issued without any prima facie appreciation of relevant material and that the respondents failed to establish a nexus between the petitioner's property and the detenue's illegal income. The court rejected this argument, emphasizing that u/s 68J of the NDPS Act, the burden of proving that the property is not illegally acquired lies on the person affected. The court noted that the petitioner, a minor at the time of property acquisition, did not provide any evidence of his father's income or how the properties were acquired. The court also referred to the Supreme Court's judgment in Kesar Devi Vs. Union of India, which upheld similar provisions under SAFEMA, stating that the competent authority need not establish a nexus between the convict or detenu and the property.
  
  Conclusion:
  The court dismissed the petition, upholding the orders of the competent authority and the appellate authority, and imposed costs of Rs. 50,000 on the petitioner.

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• 2011 (10) TMI 706
  
  Issues involved: Challenge to order by Customs Excise and Service Tax Appellate Tribunal, appeal filed beyond limitation period, power of appellate authority to condone delay.
  
  Summary:
  The petitioners challenged an order passed by the Customs Excise and Service Tax Appellate Tribunal confirming duty demand and imposing a penalty. The original order indicated the right to appeal. The petitioners failed to file an appeal within the specified time, leading to its dismissal by the Commissioner of Appeals. The Tribunal rejected the appeal, stating that the Commissioner had no power to condone delays beyond six months, and therefore, the Tribunal could not do so either.
  
  The petitioners argued that they had valid reasons for the delay, as their Chartered Accountant was abroad and failed to file the appeal on time. However, the Commissioner was not authorized to condone delays beyond a certain period, and since the appeal was filed late, it was rightly rejected. The Tribunal's decision was upheld, emphasizing that the Commissioner's powers to condone delays were limited by statute.
  
  While acknowledging that in exceptional cases, writ petitions could be entertained, the Court found no strong grounds to show that the original order was illegal or lacked jurisdiction. Therefore, the petition was dismissed, as there was no justification to treat the Court as a first appellate authority.
  
  In conclusion, the petition challenging the Tribunal's order was dismissed by the High Court, as the delay in filing the appeal was not condoned due to statutory limitations on the Commissioner's powers.

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• 2011 (10) TMI 705
  
  The Appellate Tribunal ITAT Delhi dismissed the assessee's appeal against CIT(A)'s order dated 31-3-2010 for A.Y. 2006-07 due to non-appearance of the assessee despite notice and no request for adjournment. The appeal was dismissed based on precedents CIT Vs. Multiplan (India) Pvt. Ltd. 38 ITD 320 (Del.) and Late Tukoji Rao Holkar 223 ITR 480 (MP).

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• 2011 (10) TMI 704
  

  Addition u/s 68 - Held that:- As find from the remand report that the AO declined to examine his witnesses nor allowed the assessee the opportunity of cross examination. We also note even though in the remand proceeding the CIT(A) expressly directed the AO to investigate the alleged trail of cash the AO did not bring on record any evidence to substantiate his conclusion that assessee’s own cash was returned to him in form of cheques. Failure on the part of the AO to even investigate the alleged cash trail justifies the CIT(A)’s conclusion that the AO had no material or evidence with him to prove that the capital gain earned by assessee on sale of shares represented assessee’s undisclosed income.

  We find that in the present case the confessional statement of Shri Khemka was not backed by any other independent evidence. On the other hand the assessee’s explanations were backed by relevant documentary evidences which substantiated purchase & sale of shares. Having regard to the totality of the facts and evidences as brought on record and examined by the CIT(A) we find that there was no infirmity in the order of the CIT(A) deleting the addition of ₹ 67,04,678/- made u/s 68 of the Act. Accordingly we uphold the order of the CIT(A) and dismiss the revenue’s appeal.

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