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Showing 61 to 80 of 1266 Records
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2012 (10) TMI 1219
Issues involved: Revenue's appeal on multiple questions of law.
Question (a):
The Revenue raised five questions of law, but counsel for the Revenue conceded that question (a) does not arise from the Income Tax Appellate Tribunal's order and thus cannot be entertained.
Question (c):
Regarding question (c), the Revenue accepted the Income Tax Appellate Tribunal's decision in the assessee's case for a previous assessment year, stating no grounds exist for a different view. Therefore, question (c) was not entertained in this appeal.
Question (d):
Similarly, in relation to question (d), the Tribunal had previously allowed the assessee's claim based on its decisions for earlier assessment years, which had not been challenged by the Revenue. No justification was found to dispute the Tribunal's decision for the current year or the prior years, leading to the decision not to entertain question (d).
Admitted Questions:
The appeal was admitted on questions (b) and (e) which pertained to the justification for deleting disallowances made by the Assessing Officer for temple expenses and community welfare expenses claimed by the assessee company. The Tribunal's decisions on these matters were considered for further review in the appeal.
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2012 (10) TMI 1218
Issues involved: Reopening of assessment beyond four years, disallowance of various expenses claimed by the assessee company.
Reopening of assessment beyond four years:
The Revenue raised the issue of whether the Tribunal was right in holding that the reopening of assessment after four years was unjustified, as new material showing income escapement had not come into possession of the department post-assessment. The Tribunal found that there was no failure on the part of the assessee to disclose all necessary materials for assessment, leading to the conclusion that the reopening of assessment beyond four years was legally flawed. The High Court declined to entertain this question as it was based on a finding of fact by the Income Tax Appellate Tribunal.
Disallowance of expenses claimed by the assessee company:
The Tribunal was questioned on the justification for deleting disallowances made by the Assessing Officer for various expenses claimed by the assessee company. The High Court noted that similar questions raised in the assessee's own case were not entertained previously. Consequently, questions regarding the disallowance of certain expenses claimed by the assessee company could not be entertained, except for the disallowance of temple expenses and community expenses, which were admitted for further consideration.
This judgment highlights the importance of full and true disclosure of necessary materials for assessment to prevent unjustified reopening of assessments beyond the prescribed time limit and the need for consistency in addressing similar issues in related cases.
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2012 (10) TMI 1217
Prayer for grant of statutory bail - Offences committed under Sections 307, 427 and 120-B of the Indian Penal Code - Explosion involving an Israeli Embassy vehicle carrying the wife of an Israeli Diplomat - later amended to cover Sections 16 and 18 of the Unlawful Activities (Prevention) Act, 1967 - Whether the Court of the Chief Metropolitan Magistrate was competent to remand the accused beyond 15 days for offences under the provisions of the Unlawful Activities (Prevention) Act, 1967? - HELD THAT:- There is no denying the fact that on 17th July, 2012, when CR No.86 of 2012 was allowed by the Additional Sessions Judge and the custody of the Appellant was held to be illegal and an application u/s 167 (2) Cr.P.C. was made on behalf of the Appellant for grant of statutory bail which was listed for hearing. Instead of hearing the application, the Chief Metropolitan Magistrate adjourned the same till the next day when the Public Prosecutor filed an application for extension of the period of custody and investigation and on 20th July, 2012 extended the time of investigation and the custody of the Appellant for a further period of 90 days with retrospective effect from 2nd June, 2012.
Not only is the retrospectivity of the order of the Chief Metropolitan Magistrate untenable, it could not also defeat the statutory right which had accrued to the Appellant on the expiry of 90 days from the date when the Appellant was taken into custody. Such right, as has been commented upon by this Court in the case of Sanjay Dutt [1994 (9) TMI 351 - SUPREME COURT] and the other cases cited by the ld Additional Solicitor General, could only be distinguished once the charge-sheet had been filed in the case and no application has been made prior thereto for grant of statutory bail. It is well-established that if an accused does not exercise his right to grant of statutory bail before charge-sheet is filed, he loses his right to such benefit once such charge-sheet is filed and can, thereafter, only apply for regular bail.
The circumstances, in this case, however, are different in that the Appellant had exercised his right to statutory bail on the very same day on which his custody was held to be illegal and such an application was left undecided by the Chief Metropolitan Magistrate till after the application filed by the prosecution for extension of time to complete investigation was taken up and orders were passed thereupon.
We are unable to appreciate the procedure adopted by the Chief Metropolitan Magistrate, which has been endorsed by the High Court and we are of the view that the Appellant acquired the right for grant of statutory bail on 17th July, 2012, when his custody was held to be illegal by the Additional Sessions Judge since his application for statutory bail was pending at the time when the application for extension of time for continuing the investigation was filed by the prosecution. In our view, the right of the Appellant to grant of statutory bail remained unaffected by the subsequent application and both the Chief Metropolitan Magistrate and the High Court erred in holding otherwise.
We therefore, allow the appeal, set aside the order dated 20th July, 2012, passed by the Chief Metropolitan Magistrate extending the time of investigation and custody of the accused for 90 days, with retrospective effect from 2nd June, 2012, and the orders of the High Court dated 2nd July, 2012, 6th July, 2012 and 6th August, 2012, impugned in the appeal and direct that the Appellant be released on bail to the satisfaction of the Chief Metropolitan Magistrate, upon such conditions as may be deemed fit and proper, including surrender of passport, reporting to the local police station, and not leaving the city limits where the Appellant would be residing without the leave of the Court, so as to ensure the presence of the accused-Appellant at the time of the trial.
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2012 (10) TMI 1216
Deduction u/s 80IB(10) - Meaning and scope of the term "Housing Project" - The assessee company purchased three residential flats and converted them into commercial establishments. AO viewed that the provisions u/s 80IB(10) not having been satisfied on the ground that housing projects don't include commercial buildings, assessee not entitled to the deduction. It was contended that Housing project would include commercial buildings also as per the s. 80HHBA. - HELD THAT:- In the absence of definition of the expression 'housing project' anywhere else in the Act and the said expression being defined in a related deduction provision under the same Chapter VIA, we feel, it would be more appropriate to go by the definition of the expression 'housing project', as available under Section 80HHBA for the purpose of understanding the said expression of 'housing project' under Section 80IB of the Act.
Project is not, pure and simple, a residential one. After reading s. 80HHBA and 80IA, it is clear that s. 80IB is concerned about housing project namely, construction of any building other than what is contemplated as an infrastructure facility u/s 80IA. In s. 80HHBA, the expression "housing project" is defined in a wider sense but there is no such decision that allow the interpretation of housing project in wider sense u/s 80IB(10) thereby restricting the scope of Housing project.
Decision in the case of CCE VERSUS M/S HARI CHAND SHRI GOPAL [2010 (11) TMI 13 - SUPREME COURT] was relied upon.
Revenue appeal dismissed.
Seeking fresh claim / relief in the Revenue Appeal whereas no appeal was filed by the assessee against the decision of ITAT - Issue of chargeability of tax versus issue of grant of relief / deduction - HELD THAT:- The reliance of assessee in the case of Essar Shipping Ltd.'s case [2013 (12) TMI 443 - MADRAS HIGH COURT] is not valid. - The situation herein is a totally different one. The question is one of deduction and not of chargeability under the provisions of the Act. In the circumstances, we reject the assessee's case in this regard.
The decision in the case of Essar Shipping Ltd.'s case [2013 (12) TMI 443 - MADRAS HIGH COURT] distinguished.
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2012 (10) TMI 1215
Issues Involved:
1. Disallowance u/s 14A of the Act.
2. Disallowance of service tax u/s 43B of the Act.
3. Disallowance of payment of software charges.
4. Computation of book profit u/s 115JB of the Act.
Summary:
Issue 1: Disallowance u/s 14A of the Act
The A.O. disallowed Rs. 99,56,933/- u/s 14A read with Rule 8D, considering the complexity of investment decisions and the need for substantial market research. The assessee argued for a prorata basis disallowance, which the CIT(A) accepted, reducing it to Rs. 31,69,778/-. The Tribunal found that the CIT(A) accepted the assessee's working without proper examination, violating Rule 46-A. The matter was remanded to the A.O. to re-examine in light of the Godrej and Boyce Mfg. Co. Ltd. decision.
Issue 2: Disallowance of service tax u/s 43B of the Act
The A.O. disallowed Rs. 90,08,661/- for unpaid service tax. The CIT(A) deleted the disallowance, noting that Rs. 41,97,663/- was paid before the due date of filing the return, and the remaining Rs. 48,10,998/- was not payable as the amounts were not received from parties. The Tribunal upheld the CIT(A)'s decision, referencing the Pharma Search case, which held that service tax liability arises only on receipt by the assessee.
Issue 3: Disallowance of payment of software charges
The A.O. treated software maintenance expenses as capital expenditure, disallowing Rs. 10,68,162/- after allowing depreciation. The CIT(A) deleted the disallowance, finding the expenses were for maintenance and technical support, not for software purchase. The Tribunal upheld the CIT(A)'s decision, noting the absence of contrary material from the Revenue.
Issue 4: Computation of book profit u/s 115JB of the Act
The A.O. added Rs. 99,56,933/- disallowed u/s 14A to the book profit. The CIT(A) directed the A.O. to restrict the addition to Rs. 31,69,778/-. The Tribunal remanded the issue to the A.O., aligning it with the decision on disallowance u/s 14A and considering relevant case laws.
Conclusion:
Both appeals were partly allowed for statistical purposes, with several issues remanded to the A.O. for re-examination in light of relevant judicial precedents and proper procedural adherence.
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2012 (10) TMI 1214
Issues Involved:
1. Ownership of Land for Agricultural Income Exemption u/s 2(1A) of the Income-tax Act.
2. Status of Firm as Agriculturist.
3. Documentary Evidence Supporting Agricultural Income.
Summary:
1. Ownership of Land for Agricultural Income Exemption u/s 2(1A) of the Income-tax Act:
The Revenue contended that the assessee should own the land to claim exemption u/s 2(1A) of the Income-tax Act, which was not reflected in the balance sheet nor supported by 7/12 extracts. The CIT(A) allowed the claim, which was opposed by the Revenue. The Tribunal upheld the CIT(A)'s decision, stating that ownership of land is not a prerequisite for agricultural income. It suffices if the revenue is derived from agricultural activities on land situated in India.
2. Status of Firm as Agriculturist:
The Revenue argued that an artificial person like a firm cannot be an agriculturist. The Tribunal referred to various legal provisions, including the Bombay Tenancy and Agricultural Land Act, 1948, and the Maharashtra Agricultural Income-tax Act, 1962, which allow a firm to engage in agricultural activities and derive agricultural income. The Tribunal also cited the Supreme Court's decision in Narayan Bhimji Vadangale, which held that a firm can cultivate land through its partners. Therefore, the Tribunal concluded that a firm could be an agriculturist and derive agricultural income.
3. Documentary Evidence Supporting Agricultural Income:
The Assessing Officer disallowed the claim due to the absence of documentary evidence. The Tribunal noted that the assessee had a joint cultivation agreement with Maharashtra State Farming Corporation (MSFC) and carried out all agricultural operations. The Tribunal found that the income derived from these activities was agricultural income, even though the land was not owned by the firm. The Tribunal upheld the CIT(A)'s decision, stating that the Assessing Officer's conclusion was based on improper interpretation of law and surmises.
Conclusion:
The Tribunal dismissed the Revenue's appeals and upheld the CIT(A)'s order, confirming that the amounts of Rs. 32,69,820/- and Rs. 35,13,376/- for A.Ys. 2002-03 and 2003-04 respectively are agricultural income of the assessee firm. The cross objections filed in support of the CIT(A)'s order were also dismissed.
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2012 (10) TMI 1213
Issues Involved:
The judgment involves the correctness of the assessment order u/s. 143(3) for assessment year 1996-97, the additions made in the original assessment, the subsequent de novo assessment, and the challenge raised by the assessee against the actions of the Assessing Officer (AO) in the de novo assessment.
Original Assessment and De Novo Assessment:
The original assessment u/s. 143(3) by DCIT, Circle-3(2), Mumbai resulted in additions for unaccounted purchases, bogus work-in-progress, bogus creditors, and unaccounted cash credit. The subsequent de novo assessment by the AO included additions for undisclosed investment, creditors not payable, and sundry cash credit. The assessee contested that the AO exceeded the directions of the Ld. CIT(A) in the de novo assessment by introducing new heads of additions not present in the original assessment.
Directions of the Ld. CIT(A) and Legal Principles:
The Ld. CIT(A) set aside the original assessment for denovo consideration due to concerns about the heavy additions made without adequate inquiry. Legal principles dictate that the scope of fresh assessment after remand is determined by the terms of the remand order, with the AO having the same powers as in the original assessment unless restricted by the appellate authority. Precedents emphasize that the AO must adhere to the directions given in the remand order and cannot introduce new sources of income or exceed specified limits.
Judicial Interpretation and Decision:
The judgment analyzed the Ld. CIT(A)'s directions for denovo assessment, finding that the AO exceeded these directions by making additional unapproved additions in the de novo assessment. Citing legal precedents and principles, the judgment concluded that the AO's actions were beyond the scope of the remand order, violating natural justice principles. Consequently, the appeal by the assessee was allowed, quashing the assessment order and reversing the findings of the Ld. CIT(A) solely on the point of law without delving into the merits of the case.
This comprehensive summary outlines the issues, original and de novo assessments, directions of the Ld. CIT(A), legal principles governing fresh assessments after remand, judicial interpretation, and the ultimate decision in favor of the assessee based on the AO's deviation from the remand order directions.
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2012 (10) TMI 1212
Issues involved:
The legality and propriety of an order passed by the High Court of Allahabad in a disposed of Criminal Miscellaneous Writ Petition.
Summary:
Issue 1: Order passed by High Court in Criminal Miscellaneous Writ Petition No. 5426 of 2003
- The Appellant's marriage led to harassment and an F.I.R. against the 1st Respondent under various sections of the Indian Penal Code and Dowry Prohibition Act.
- Family members of 1st Respondent approached the High Court seeking to quash the F.I.R., resulting in an order for monthly deposit and stay of arrest until investigation conclusion.
Issue 2: Order passed by High Court in Criminal Miscellaneous Writ Petition No. 5877 of 2003
- 1st Respondent filed a similar petition seeking relief without involving the Appellant, leading to a stay of arrest until the investigation's conclusion.
Issue 3: Challenge to Chief Judicial Magistrate's order
- The Investigating Officer closed the investigation, but the Magistrate issued summons, challenged by 1st Respondent in Revision Petition No. 694 of 2004, leading to a dismissal with a stay of arrest.
Issue 4: Appeal against High Court's order
- The Appellant challenged the High Court's order allowing the 1st Respondent to deposit a monthly sum until trial conclusion, arguing against the interference with trial court's powers.
Judgment:
- The Supreme Court found the High Court erred in entertaining the application in a disposed writ petition and granting relief to the 1st Respondent, contravening established legal principles.
- The Court criticized the practice of filing such applications post-disposal and emphasized the exceptional nature of High Court's jurisdiction under various legal provisions.
- Ultimately, the appeal was allowed, setting aside the High Court's order and imposing costs on the 1st Respondent to be paid to the Appellant within a specified timeframe.
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2012 (10) TMI 1211
Issues involved:
The judgment involves cross-appeals by the assessee and the Revenue for A.Y.2005-2006 and 2006-2007 against the orders of the Commissioner of Income-Tax (Appeals)-I, Baroda.
A.Y.2005-2006 (Assessee's appeal):
The assessee contested the addition made by the Assessing Officer (AO) on purchases from M/s.R.R.Patel Trading Corporation as bogus. The CIT(A) reduced the addition to 25% of the purchase amount. The ITAT, Ahmedabad had previously applied a rate of 12.5% in similar cases. The Tribunal found that the purchases were actually made from unregistered dealers at lower rates. Considering the difference in purchase rate and GP rate, the Tribunal directed the AO to restrict the addition to 20% of the total purchase amount, partially allowing the assessee's appeal.
A.Y.2005-2006 (Revenue's appeal):
The Revenue appealed against the deletion of an addition made on account of bogus purchases from R.R.Patel Trading Corporation. The Tribunal found that this issue was covered under the assessee's appeal for the same assessment year. The ground of the Revenue was dismissed.
A.Y.2006-2007 (Assessee's appeal):
The assessee challenged the addition made by the AO on purchases from R.R.Patel Trading Corporation. The Tribunal directed the AO to restrict the addition to 20% of the purchase amount, similar to the decision for the previous assessment year, partially allowing the appeal.
A.Y.2006-2007 (Revenue's appeal):
The Revenue appealed against the deletion of an addition made on account of bogus purchases from R.R.Patel Trading Corporation. The Tribunal found this issue was covered under the assessee's appeal for the previous assessment year. The ground of the Revenue was dismissed.
In conclusion, both the appeals of the assessee for A.Y.2005-2006 and 2006-2007 were partly allowed, while both the appeals of the Revenue for the same years were dismissed.
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2012 (10) TMI 1210
Issues Involved:1. Disallowance of commission payment to non-whole time directors. 2. Addition on account of undervaluation of closing stock. Summary:Issue 1: Disallowance of Commission Payment to Non-Whole Time DirectorsGround No.1 to 3 of the assessee's appeal relate to disallowance of commission payment of Rs. 3,93,061 to non-whole time directors. The assessee, engaged in publishing and selling books, claimed this expenditure, which was disallowed by the Assessing Officer (AO) on the grounds that there was no contract of employment and no evidence of services rendered by the directors. The AO viewed the commission as a distribution of profit rather than an expenditure incurred wholly and exclusively for business purposes u/s 37 of the Income-tax Act. The CIT(A) upheld this view, citing the lack of evidence of services rendered by the directors. The Tribunal agreed with the lower authorities, stating that the assessee failed to prove that the expenditure was wholly and exclusively for business purposes, and thus, the grounds of the assessee on this issue were rejected. Issue 2: Addition on Account of Undervaluation of Closing StockGrounds No.4 to 7 of the assessee's appeal concern the addition of Rs. 45 lakhs on account of undervaluation of closing stock. The AO found the valuation method of the closing stock by the assessee to be provisional and based on contingent events. The AO revalued the closing stock, resulting in an addition of Rs. 75,36,842 to the total income. The CIT(A) found discrepancies in the assessee's valuation method and estimated the undervaluation at Rs. 45 lakhs, directing the AO to restrict the addition to this figure. Both the assessee and the Revenue appealed against this decision. The Tribunal noted the inconsistencies in the assessee's valuation method and the lack of a clear basis for the CIT(A)'s estimation. The Tribunal set aside the CIT(A)'s order and remitted the matter to the AO for fresh determination, instructing the AO to consider the issue afresh and give the assessee an opportunity to substantiate its claim with supporting evidence. Revenue's Appeal:The only grievance of the Revenue in its appeal was the relief granted by the CIT(A) regarding the addition on account of undervaluation of closing stock. In light of the Tribunal's decision to remit the issue back to the AO for fresh adjudication, the grounds of the Revenue were treated as allowed for statistical purposes. Conclusion:In the result, the assessee's appeal (ITA No.529/Hyd/2009) is partly allowed for statistical purposes, and the Revenue's appeal (ITA No.595/Hyd/2009) is allowed for statistical purposes. Order pronounced in the court on 19.10.2012.
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2012 (10) TMI 1209
Issues Involved: Three appeals before ITAT Mumbai regarding the applicability of Section 14A of the Income Tax Act for the assessment year 2007-2008.
ITA No.6392/M/2011 (Assessee's Appeal): The CIT (A) directed the AO to calculate direct expenses attributable to earning dividend income u/s 14A of the Act. Assessee contended no expenditure was incurred for earning exempt income.
ITA No.6112/M/2011 (Revenue's Appeal): Revenue challenged CIT (A)'s interpretation of Section 14A and Rule 8D, arguing for disallowance irrespective of income earned. CIT (A) set aside the order for fresh examination based on jurisdictional High Court's judgment.
CO No.142/M/2012 (Assessee's Cross Objection): Assessee sought direction for considering book value of investments instead of market value for computing disallowance under Rule 8D(2).
Summary of Judgment: The appeals revolved around the applicability of Rule 8D and Section 14A. The AO applied Rule 8D to disallow a sum, leading to appeals. CIT (A) set aside the issue for fresh assessment, considering jurisdictional High Court's judgment. ITAT allowed all appeals, directing AO to address objections and pass a speaking order for de novo assessment. The parties' contentions were considered, emphasizing proper appreciation of Section 14A provisions for the relevant assessment year.
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2012 (10) TMI 1208
Issues involved: Appeal against order disallowing deduction u/s 80IB(10) on car parking charges and miscellaneous income.
Issue 1 - Car Parking Charges:
The assessee firm, engaged in the business as builder and developer, filed a return declaring total income. The assessment partly disallowed deduction u/s 80IB(10) of the Income Tax Act. The ld. CIT(A) allowed relief to the assessee, which led to the Revenue appealing. The disallowance of deduction u/s 80IB(10) on car parking charges was contested. The A.O. disallowed it, stating that income from car parking space is not includible in eligible profit for the deduction. However, the ld. CIT(A) allowed the deduction, considering car parking as an integral part of the housing project. The Tribunal's previous decisions were cited to support the allowance of the deduction. The Tribunal, based on consistent views, upheld the ld. CIT(A)'s decision, rejecting the Revenue's ground.
Issue 2 - Miscellaneous Income:
The A.O. disallowed deduction u/s 80IB(10) on miscellaneous income collected under various heads. The A.O. held that certain charges cannot be considered income derived from the eligible business for the deduction. On appeal, the ld. CIT(A) allowed these miscellaneous receipts as part of eligible business profits. The ld. Counsel for the assessee provided details of the miscellaneous income, arguing in favor of the deduction. The Tribunal's decision in a similar case was presented to support the assessee's position. The Tribunal upheld the ld. CIT(A)'s order on most charges but set aside the issue of corpus fund charges for further consideration by the A.O. The Tribunal decided in favor of the assessee on most charges, setting aside the corpus fund charges issue for the A.O. to reevaluate. The Revenue's ground was partly allowed for statistical purposes.
In conclusion, the appeal filed by the Revenue was partly allowed for statistical purposes, with the Tribunal upholding deductions on car parking charges and most miscellaneous income while remanding the corpus fund charges issue for further assessment.
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2012 (10) TMI 1207
Issues involved: Appeal against deletion of addition u/s 132(4A) of Income Tax Act based on seized material.
Summary:
1. The Revenue appealed against the Income Tax Appellate Tribunal's decision to delete an addition of Rs. 30,27,987 based on seized documents, questioning the application of section 132(4A) of the Income Tax Act, 1961.
2. The dispute arose when documents related to oil business were found during a search at the assessee's premises, who disowned them, claiming to be in the transportation business.
3. The Assessing Officer invoked section 132(4A) to presume the documents belonged to the assessee and made the addition, which was upheld by the Commissioner but overturned by the Tribunal.
4. The Tribunal found that the seized documents lacked a connection to the assessee's business activities, citing case laws to emphasize the need for nexus with unaccounted business for additions based on seized documents.
5. The Revenue argued that the Tribunal erred in disregarding the presumption u/s 132(4A) and the assessee's unsatisfactory explanation for the seized documents.
6. The High Court upheld the Tribunal's decision, noting that the presumption u/s 132(4A) is rebuttable, and in this case, the documents did not link the assessee to the oil business, with no further inquiry by the Revenue.
7. The Court found no perversity in the Tribunal's conclusions and dismissed the Tax Appeal.
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2012 (10) TMI 1206
Issues involved:
The Plaintiff filed a Summary Suit against the Defendant for recovery of a specific sum along with interest and costs. The main issues involved are non-payment by the Defendant, acceptance of liability, dispute over interest payment, and the Defendant's failure to respond to the Plaintiff's claims.
Summary of Judgment:
Issue 1: Non-Payment by the Defendant
The Plaintiff sought a decree against the Defendant for payment of a specific amount along with interest and costs. Despite admitting the outstanding amount, the Defendant failed to make any payments, citing unavailability of funds. The Defendant's failure to fulfill its payment obligations was highlighted by the Court, leading to a decree in favor of the Plaintiff.
Issue 2: Acceptance of Liability
The Defendant acknowledged the amount due to the Plaintiff but claimed inability to pay immediately due to financial constraints. Despite admitting the liability, the Defendant did not make any payments, prompting the Court to question the Defendant's sincerity in honoring the obligation. The Court found the Defendant's stance of non-payment unjustified and ruled in favor of the Plaintiff.
Issue 3: Dispute over Interest Payment
The Defendant contested the payment of interest on the overdue amount, arguing that there was no agreement to pay interest. However, the Court noted that the purchase order clearly stipulated payment terms, including interest on delayed payments, which the Defendant did not dispute upon receiving the goods and invoices. The Court deemed the Defendant's refusal to pay interest as dishonest and ruled in favor of the Plaintiff, modifying the interest rate to 18% per annum.
In conclusion, the Court granted the Plaintiff's decree, emphasizing the Defendant's unjustified stance on non-payment and refusal to honor the agreed-upon terms. The judgment highlighted the importance of honoring contractual obligations and dismissed the Defendant's baseless defense in the absence of a valid affidavit in reply.
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2012 (10) TMI 1205
Issues Involved:
The judgment involves the interpretation of Section 68 of the Income Tax Act, 1961 regarding unexplained cash credit and the consideration of whether the Tribunal was justified in deleting the addition made by the Assessing Officer.
Interpretation of Section 68 - Unexplained Cash Credit:
The appeal pertained to the assessment year 2001-2002 where the respondent-assessee, a proprietary firm, had taken loans from certain entities. The Assessing Officer added the loan amounts under Section 68 due to suspicions of the lenders being engaged in providing bogus entries. However, the Commissioner of Income Tax (Appeals) found that the lenders were legitimate taxpayers with disclosed identities and the transactions were done through Account Payee Cheques. The Commissioner concluded that no inference of bogus entries could be drawn solely based on a search in the lenders' premises. The appeal by the Revenue was dismissed, upholding the Commissioner's decision.
Justification of Tribunal's Decision:
During the appeal, arguments were presented regarding the legitimacy of the loans and the involvement of the lenders in providing bogus entries. The Senior Standing Counsel contended that the loans were unexplained under Section 68 due to the lenders' association with entities suspected of providing bogus entries. However, the Court disagreed, stating that the findings of the Assessing Authority were not conclusive, and the loans were properly documented with PANs and repayment through cheques. It was observed that the Commissioner had correctly decided to deduct the addition under Section 68, as no further justification for the addition was warranted.
Conclusion:
In conclusion, the High Court upheld the decision of the Commissioner of Income Tax (Appeals) and dismissed the appeal, stating that no addition under Section 68 was necessary in the given circumstances. The judgment emphasized the importance of proper documentation and legitimate transactions in determining the validity of cash credits under the Income Tax Act.
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2012 (10) TMI 1204
Issues involved:
The issue involves the transfer of a case from one district to another district without proper notice to the parties, as per Section 260-A of the Income-tax Act, 1961.
Summary:
Issue 1: Transfer of case without proper notice
The appellant, a firm engaged in Sarrafa and Money-lending business, was assessed for the Assessment Year 1997-98. The case was transferred from Lalitpur to Jhansi by the Commissioner of Income Tax, Agra. The Assessing Officer at Jhansi issued notices under Section 143(2) and 142(1) of the Act, and after due process, an assessment order was passed. The appellant raised objections regarding jurisdiction only before the first appellate authority and the Tribunal, which were rejected. The Court held that as per sub-section (3) of Section 124 of the Act, objections regarding jurisdiction should have been raised before the assessing authority initially. Since this was not done, the Tribunal's order was deemed legally sound, and the appeal was dismissed.
In conclusion, the Court found that the appellant's failure to raise objections regarding jurisdiction before the assessing authority initially barred them from doing so before the first appellate authority or the Tribunal. Therefore, the Tribunal's decision was upheld, and the appeal was dismissed.
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2012 (10) TMI 1203
Issues Involved:
1. Violation of regulations 3 and 4 of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (FUTP Regulations).
2. Imposition of restraint orders and monetary penalties on the appellants.
3. Examination of the role and responsibility of directors in approving financial statements.
Summary:
1. Violation of FUTP Regulations:
The Securities and Exchange Board of India (SEBI) conducted an investigation into the financial results of Pyramid Saimira Theatre Ltd. for the financial year 2007-08. The investigation revealed that the company's financial reports contained inflated figures of revenue, profits, security deposits, and receivables. This manipulation led to a rise in the company's stock price, which the promoters used to pledge their shares and raise substantial funds. The appellants, who were directors of the company, were found guilty of violating regulations 3 and 4 of the FUTP Regulations by publishing false and misleading financial results.
2. Imposition of Restraint Orders and Monetary Penalties:
The whole time member of SEBI, acting u/s 19 read with sections 11 and 11B of the SEBI Act, 1992, restrained Shri N. Narayanan and Shri V. Natarajan from dealing in securities for two and three years respectively and from being directors of any listed company. Shri K. Natarahjan, Shri K.S. Kashiraman, and Shri G. Ramakrishanan were restrained from being independent directors or members of audit committees of any listed company for two years. Additionally, monetary penalties were imposed: Rs. 50 lacs on Shri N. Narayanan, Rs. 40 lacs each on Shri K. Natarahjan and Shri K.S. Kashiraman, and Rs. 25 lacs on Shri G. Ramakrishanan.
3. Examination of the Role and Responsibility of Directors:
The appellants argued they were not involved in the day-to-day management of the company and relied on audited financial statements approved by the chief financial officer and auditors. However, the Tribunal emphasized that directors have a duty of care and diligence. A director cannot merely depend on the integrity and expertise of others but must exercise independent judgment and scrutiny. The Tribunal noted that Shri N. Narayanan, as a whole-time director, had significant responsibilities, including financial and banking matters, and could not claim ignorance of financial irregularities. Similarly, the independent directors, being members of the audit committee, were expected to exercise oversight and ensure the accuracy of financial statements.
The Tribunal referred to case laws highlighting the evolving responsibilities of directors and concluded that the appellants failed to fulfill their statutory duties. The provisions of section 12A of the SEBI Act and regulation 2(c) of the FUTP Regulations were found to be applicable, as the appellants employed devices to defraud investors. The Tribunal upheld the impugned orders, dismissing the appeals and affirming the penalties and restraint orders imposed on the appellants.
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2012 (10) TMI 1202
Acquittal of the Appellants and convicting and sentencing each one of them under different Sections of the Indian Penal Code - Appeal u/s 379 of the CrPC - HC reversing the acquittal orders - fragile nature of the conclusions reached by the HC - All the accused persons have been convicted Under Section 120B of the Indian Penal Code and sentenced to undergo rigorous imprisonment for a period of seven years each - there was a land dispute between (D-2) and his family and A-1, and his party. There were civil litigations between the parties over the said property. the younger brother of the accused No. 15 was murdered and in the said case D-1, D-2 and D-3 were arrayed as accused. At the relevant point of time, the three deceased persons were on bail. There was another case pending against D-1 and D-2 in respect of an incident of a bomb attack on the rival party. D-1, on being inflicted injuries by the accused persons, ran towards the Police Station, situated near the court complex and made a statement (Ex. P-1) based on which the FIR (Ex. 22) was registered by PW-27. After Chargesheet filled, The learned trial Judge by the judgment and order held that the charges levelled against the accused persons have not been proved beyond all reasonable doubt. Accordingly, all the 23 accused were acquitted.
HC set aside the acquittal of A-1 to A-19 and convicted them under different Sections of the IPC. The acquittal ordered by the learned trial court in respect of A-20, A-21, A-22, and A-23 was, however, maintained by the HC. of the 19 accused who have been convicted by the HC, A-6 and A-11 have died in the mean time. Consequently, it is the 17 accused persons against whom the order of conviction continues to be effective who have instituted the present appeal.
HELD THAT:- We find ourselves unable to agree with the conclusion of the High Court. Firstly, if the conclusion recorded by the learned trial court was a possible conclusion, the High Court ought not to have ventured further in the matter. Secondly, the aforesaid exercise, in our considered view, did not also occasion a correct conclusion inasmuch as the presence of the accused at the spot armed with weapons and responding to the call of A-14, A-15 and A-16 to attack the deceased, even if assumed, in the absence of any further evidence, cannot establish a prior arrangement/agreement or a meeting of minds amongst the accused to commit the offence of murder so as to sustain a charge of criminal conspiracy u/s 120B IPC.
Plea of alibi - plea of alibi set up on behalf of two accused on the basis of the evidence of DWs-1, 2 and 3 was accepted by the learned trial court by holding that the defence evidence tendered in the case had established that at the time of the occurrence A-12 was in the ITI, Tuticorin whereas A-4 was in the office of the Sub-Registrar, Tuticorin - HELD THAT:- Reading the evidence of DWs-1, 2 and 3 and the documents exhibited in this regard (Ex. D-4, D-5, D-8, D-9, D-10) it is possible to take a view that aforesaid two accused were not present at the place of occurrence at the relevant time. The High Court answered the aforesaid issue by stating that as it was admitted by DW-1 in cross-examination that a student could leave the college after being marked present in the attendance register and as the sale deed (Ex. D-5) claimed to have been executed by A-4 in Tuticorin at the time of the incident did not specify the time of execution, the plea of alibi set up by A-4 and A-12 was not satisfactorily proved. We are, therefore, unable to accord our approval to the manner in which the High Court had dealt with this aspect of the case.
Liability of the accused Appellants under the provisions of IPC - The trial court considered it prudent to view the testimony of PW-1 with great care and circumspection as the said witness is the younger brother of one of the deceased - also took into account the fact that PW-1, though examined as an eye witness, could not specifically say as to which accused had assaulted which particular deceased and the weapon(s) used - Whether the view taken by the trial court is not a possible view? - The fundamental distinction between the two situations have to be kept in mind. So long as the view taken by the trial court can be reasonably formed, regardless of whether the High Court agrees with the same or not, the view taken by the trial court cannot be interdicted and that of the High Court supplanted over and above the view of the trial court.
A consideration on the basis on which the learned trial court had founded its order of acquittal in the present case clearly reflects a possible view. There may, however, be disagreement on the correctness of the same. But that is not the test. So long as the view taken is not impossible to be arrived at and reasons therefor, relatable to the evidence and materials on record, are disclosed any further scrutiny in exercise of the power Under Section 378 Code of Criminal Procedure was not called for.
As the High Court had embarked upon an in-depth consideration of the entire evidence on record and had arrived at conclusions contrary to those of the trial court, the discussions now will have to centre around the basis disclosed by the order of the High Court for reversing the acquittal of the accused Appellants. The grounds that had prevailed upon the High Court to hold that the commission of the offence of criminal conspiracy Under Section 120B Indian Penal Code have been proved by the prosecution in the present case have already been noticed. Our reasons for disagreeing with the said view of the High Court have also been indicated hereinabove.
Similarly, the reasons for our disagreement with the conclusion of the High Court that the defence evidence adduced in the case did not satisfactorily establish the plea of alibi put forward by A-4 and A-12 have also been indicated. The aforesaid aspects of the case, therefore, would not need any further dilation and it is the reasons for the conviction of the accused Appellants Under Section 302 and the other provisions of the Indian Penal Code will be required to be noticed by us.
The efficacy of the dying declaration (Ex. P-4) when the maker thereof had slipped into a coma even before completing the statement would have a serious effect on the capacity of D-1 to make such a statement. The certification made by PW-21 with regard to the condition of the deceased is definitely not the last word. Though ordinarily and in the normal course such an opinion should be accepted and acted upon by the court, in cases, where the circumstances so demand such opinions must be carefully balanced with all other surrounding facts and circumstances. All the above, in our view, demonstrates the fragile nature of the conclusions reached by the High Court in the present case.
For the above reasons, we hold that conviction of the accused Appellants recorded by the High Court under the different provisions of the Indian Penal Code and the sentences imposed cannot be sustained. We accordingly allow this appeal, set aside the judgment and order passed by the High Court of Madras and confirm the order of acquittal passed by the learned trial court. The accused Appellants, if in custody, be released forthwith unless required in any other case.
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2012 (10) TMI 1201
Issues involved: Interpretation of provisions u/s. 80 HHC for transit income and cash discount, eligibility of Plant and Machinery for depreciation, classification of rental income from sub leasing.
Interpretation of provisions u/s. 80 HHC for transit income and cash discount:
The High Court considered whether transit income and cash discount should be included in the profits of business for the purpose of claiming deduction u/s. 80 HHC. The ITAT's decision to include these components in the profits was upheld, dismissing the revenue's contention against it.
Eligibility of Plant and Machinery for depreciation:
The issue of whether Plant and Machinery located at the Ankleshwar Unit of the assessee, even after the closure of operations, was eligible for depreciation was examined. The revenue's argument, citing a similar case dismissal, was rejected, and it was held that the Plant and Machinery remained part of the block of assets and thus qualified for depreciation.
Classification of rental income from sub leasing:
Regarding the classification of rental income from sub leasing, the ITAT directed the A.O. to treat it as income from House Property instead of income from business as initially assessed. The revenue's objection to this direction was overruled, affirming the ITAT's decision.
The High Court dismissed the appeal based on the above considerations, with no order as to costs.
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2012 (10) TMI 1200
Rectification of mistake u/s 254(2) - Assessee-company has opined that certain mistakes were apparent from record in the assessment order and such mistakes should be accordingly rectified.
(i) Development Expenses - Assessee- company's portion of the expenditure was allowed as revenue expenditure by AO in previous year. It is requesting for allowing the similar deduction this year also - HELD THAT:- Details of total expenditure incurred towards new product development were mentioned in assessee's books but it has not filed any details of revenue expenditure, hence same could not be allowed. Thus, AO is directed to verify the claim made by the assessee in this regard and if any portion of the expenditure is found to be revenue-nature, same may be allowed.
ii) Disallowance u/s 40(a)(ia) - (i) Assessee submitted that amount involved was ₹ 9.42 crores not ₹ 9.42 lakhs as mentioned in the order - HELD THAT:- Submission made by the AR is factually correct. It is directed that operative part should be read as ₹ 9.42 Crores. - Decision in favour of Assessee.
(ii) Order of the CIT(A) Nasik was not considered while deciding the disallowance u/s 40a(ia) . During the assessment proceedings AO found that in the case of Nasik Unit there was a default with regard to provisions of TDS. He observed that TDS AO had passed an order u/s 194C r.w.s.20(1) and 201(1)A. It was further mentioned that the CIT(A) had confirmed the order of the TDS AO. The assessee approached the Tribunal. The ITAT in its order remitted the matter back to the file of the CIT(A) - HELD THAT:- Claim made by the assessee is factually correct- CIT(A) Nasik had vide its order had accepted the claim of the assessee-company. Thus, such claim should be considered.
Decision in favour of Assessee.
iii) TDS on Service Coupon Commission - As per the assessee that issue with regard to section 194 C of the Act was not adjudicated upon and matter was remitted back to AO - HELD THAT:- As far as s. 194C is concerned, full facts about the service coupon commission were not available on the file and hence matter should be restored back to the file of the AO. Decision given with regard to dealers Incentive Scheme (194H) cannot be imported for deciding the issue of service coupon commission (194C). Both do not operate in the same fields. There is no mistake apparent from record with regard to remitting back the matter to the file of the AO. Submissions made by the assessee-company about service coupons stand rejected.
Matter restored back.
iv) Acceptance of New Claim not made before AO - Assessee forget to claim deduction u/s 35 and such claim was not made before AO - HELD THAT:- AO directed to allow the claim made for deduction u/s. 35 of the Act after verification of the evidences produced by the assessee-company. Assessee is directed to file the details of expenditure before the AO.
Decision in the case of COMMISSIONER OF INCOME TAX. CENTRAL-I VERSUS M/S. PRUTHVI BROKERS & SHAREHOLDERS PVT. LTD. [2012 (7) TMI 158 - BOMBAY HIGH COURT], relied upon where it was held that the "Assessee is entitled to raise not merely additional legal submissions before the appellate authorities, but is also entitled to raise additional claims before them. The appellate authorities have the discretion whether or not to permit such additional claims to be raised. It cannot, however, be said that they have no jurisdiction to consider the same. They have the jurisdiction to entertain the new claim. The exercise of discretion is entirely different from the existence of jurisdiction”.
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