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Showing 61 to 80 of 1054 Records
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2011 (2) TMI 1578
Issues involved:
The appeal challenges the assessment order u/s 143(3) of the I.T. Act for the assessment year 2007-08, specifically regarding the selection of the case under scrutiny and the violation of CBDT guidelines.
Summary:
Issue 1: Violation of CBDT guidelines in case selection
The assessee raised a preliminary objection against the scrutiny assessment u/s 143(3) due to violation of CBDT guidelines. The Assessing Officer selected the case for scrutiny based on incorrect information regarding deductions claimed u/s 54B/54D. The CIT(A) admitted additional grounds of appeal but erred in applying section 292BB to the case selection issue. The Tribunal found that the selection was indeed in violation of CBDT guidelines, rendering the assessment order illegal.
Issue 2: Compliance with CBDT guidelines
The Tribunal examined the circular guidelines for selecting cases for scrutiny during the financial year 2008-09. It was found that the Assessing Officer incorrectly selected the return of income for scrutiny based on deductions exceeding a certain limit, which was not claimed by the assessee. The Tribunal held that the assessment order was bad in law due to the violation of CBDT guidelines.
Conclusion:
The Tribunal allowed the appeal, setting aside the assessment order as it was deemed to be in violation of the law. Other grounds related to additions/disallowances were not addressed due to the primary issue of the case selection being decided in favor of the assessee.
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2011 (2) TMI 1577
Issues involved: Alleged violation of Regulation 4 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 through circular trading in two scrips on Bombay Stock Exchange and National Stock Exchange.
Summary:
The judgment by the Securities Appellate Tribunal, Mumbai involved a trader who engaged in circular trading in two scrips, Allcargo Global Logistics Ltd. and Unity Infraprojects Ltd., listed on BSE and NSE. The appellant traded during the investigation period from April 1, 2008, to May 15, 2008, executing circular trades in both scrips on both exchanges. The adjudicating officer found the appellant guilty of circular trading and imposed a penalty of Rs. 3 lacs, leading to the appellant filing an appeal.
Upon hearing arguments, the Tribunal confirmed the circular trades by the appellant and rejected claims of not being part of the trading group. The trades involved transferring shares within the group without beneficial ownership transfer, creating a false appearance of trading. Despite arguments of being misled by another individual, the Tribunal upheld the violation of regulation 4 due to engaging in unfair trade practices.
Considering the appellant's limited trading period, lack of profit, and incurred losses, the Tribunal reduced the penalty to Rs. 1.5 lacs as a sympathetic measure, emphasizing it as a unique decision not setting a precedent. Ultimately, the Tribunal upheld the guilty verdict but reduced the penalty amount.
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2011 (2) TMI 1576
Issues Involved:
1. Valuation of the suit for court fee and jurisdiction.
2. Whether the suit property was thrown into the hotchpotch of joint family pool and treated as joint family property.
3. Status of the defendant as a licensee.
4. Entitlement of the plaintiff to recover mesne profits.
5. Relief.
Detailed Analysis:
1. Valuation of the Suit for Court Fee and Jurisdiction:
The trial court did not specifically address this issue in the final judgment, indicating that it was not a significant point of contention or that it was resolved in favor of the plaintiff.
2. Joint Family Property Claim:
The defendant claimed that the house in dispute was thrown into the joint family pool by the plaintiff, thereby making it joint family property. However, the court found that the house was the personal property of the plaintiff, purchased with funds remitted by him from abroad. The defendant's claim that their father also contributed to the purchase was not substantiated by evidence. The court emphasized that for the doctrine of blending to apply, there must be existing coparcenery property, which was not the case here. The court cited the Division Bench judgment in "Kewal Krishan Mayor v. Kailash Chand Mayor and Ors." to support its conclusion that the absence of coparcenery property invalidates the claim of blending separate property into joint family property.
3. Status of the Defendant as a Licensee:
The court held that the defendant was a bare licensee, allowed to live in one room and a bathroom on the ground floor of the house without any charges. This license was revoked when disputes arose between the brothers, and the defendant refused to vacate, necessitating the plaintiff's suit for possession.
4. Entitlement to Recover Mesne Profits:
The trial court awarded mesne profits to the plaintiff at Rs. 5000 per month from May 1, 1999, until the defendant vacated the premises. The High Court affirmed this award for the period of three months prior to the institution of the suit, considering the location of the property in a posh area of Delhi. However, the award of mesne profits for the period after the filing of the suit was set aside due to the lack of an enquiry as mandated by Order XX Rule 12 of the Code of Civil Procedure.
5. Relief:
The High Court dismissed the appeal regarding the decree of possession and mesne profits for the three months prior to the suit. The counter-claim for partition was formally rejected, as the house was not joint family property. The decree for mesne profits post-suit filing was set aside due to procedural non-compliance. The appellant was granted three months to vacate the premises.
Conclusion:
The High Court affirmed the trial court's decision on possession and mesne profits for the pre-suit period, rejected the counter-claim for partition, and set aside the post-suit mesne profits award due to lack of mandatory enquiry. The appellant was given three months to vacate the property.
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2011 (2) TMI 1575
Issues involved:
1. Depreciation rate on VSAT equipments
2. Levying of interest u/s 234B, u/s 234C, and u/s 234D
Depreciation rate on VSAT equipments:
The appellant claimed depreciation at 60% on VSAT equipments, but the Assessing Officer (AO) allowed depreciation at 25% only, considering VSAT equipments as communication equipments. The CIT(A) upheld the AO's decision based on a previous ruling for the same assessee. The appellant's argument citing a different case was deemed distinguishable, as VSAT equipments were found to be communication, not computer, equipment. The ITAT upheld the lower authorities' decision, as the facts were similar to the earlier assessment year where the appellant did not challenge the ruling.
Levying of interest u/s 234B, u/s 234C, and u/s 234D:
The appellant contended that interest u/s 234B, u/s 234C, and u/s 234D should not be levied. However, the argument was not upheld, and the interest charges were deemed mandatory and consequential, leading to the dismissal of the appeal.
In conclusion, the ITAT upheld the decision of the lower authorities regarding the depreciation rate on VSAT equipments and the levying of interest u/s 234B, u/s 234C, and u/s 234D, ultimately dismissing the appeal of the assessee.
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2011 (2) TMI 1574
Issues involved: Transfer pricing adjustment and depreciation rate on computer accessories.
Transfer Pricing Adjustment: The assessing officer referred the matter to the Transfer Pricing Officer (TPO) for determining the Arm's Length Price (ALP) of the assessee's international transactions. The objections filed by the assessee before the Dispute Resolution Panel (DRP) were related to the proposed addition on account of adjustment in ALP and the rejection of certain comparables by the TPO. The DRP rejected the objections stating that the assessee failed to establish significant influencing factors from previous financial years and that the comparables' losses were not proven to be incorrect.
Judgment on Transfer Pricing: The Appellate Tribunal directed the matter back to the DRP for a decision on the objections raised by the assessee regarding the basis adopted by the TPO for determining ALP and the rejection of comparables. Citing a Delhi High Court decision, the Tribunal emphasized the necessity for the DRP to pass a speaking order after considering the objections and supporting evidence provided by the assessee.
Depreciation Rate on Computer Accessories: The second issue pertained to the denial of higher depreciation rate on UPS for computers by the Assessing Officer (AO). The Tribunal ruled in favor of the assessee, citing a previous decision where it was held that peripherals like printers and scanners are integral parts of a computer and eligible for higher depreciation rate. Consequently, the AO was directed to allow depreciation on computer UPS at a higher rate of 60% as claimed by the assessee.
Conclusion: The appeal filed by the assessee was partly allowed for statistical purposes, with the Tribunal issuing the order on 18th February 2011.
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2011 (2) TMI 1573
Issues involved:
1. Determination of whether interest received from bank deposits is income from business or other sources.
2. Proportionate disallowance of interest paid on funds borrowed for investments in immovable properties and shares.
Issue 1 - Interest from bank deposits:
The High Court considered the appeal arising from the Income Tax Appellate Tribunal's orders regarding the nature of interest received from bank deposits. The assessee, a non-banking financial company, argued that the deposits were maintained as per RBI directions for security purposes. However, the High Court noted that the assessee did not present this argument before the lower authorities. The Court highlighted the need for a detailed consideration by the CIT(Appeals) regarding the requirement to maintain bank deposits as per RBI directions. It emphasized the importance of assessing whether the assessee's business activities align with the nature of investments made, such as in shares and real estate, to determine if the interest from bank deposits should be treated as business income or income from other sources.
Issue 2 - Disallowance of interest on diverted funds:
The High Court also addressed the disallowance of interest on funds diverted for investments in shares and immovable properties. It questioned whether the assessee earned income from trading shares or real estate transactions. The Court highlighted that if the assessee engaged in long-term investments, the interest on diverted funds should not be allowed as a deduction but considered in the computation of capital gains. Additionally, the Court noted that interest on borrowed funds diverted for acquiring shares, even if yielding dividends, would not be eligible for deduction under Section 14A of the Act. The Court found that the CIT(Appeals) and the Tribunal had not properly considered this issue and referred to relevant case law to support its decision.
Conclusion:
The High Court allowed the appeal, setting aside the orders of the Tribunal and the first appellate authority. The matter was remanded to the CIT(Appeals) for a comprehensive reconsideration of both issues after providing an opportunity to the assessee and engaging in discussions with the Assessing Officer.
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2011 (2) TMI 1572
Issues involved: The nature of expenditure on plastic canes and crates - whether revenue or capital expenditure.
The appeal was filed by the revenue challenging the order of the CIT(A) on the grounds that the expenditure on Plastic Canes and Crates was wrongly treated as revenue in nature. The revenue contended that in earlier years, the assessee treated the same expenditure as capital expenditure, thus only entitled to depreciation. The Assessing Officer treated the expenditure as plant and machinery, allowing depreciation as per the relevant section of the Income Tax Act. The CIT(A) upheld the claim of the assessee without considering this aspect, leading to the appeal by the revenue.
During the appeal hearing, reference was made to a previous Tribunal order in the assessee's case for other assessment years, where a similar issue was decided in favor of treating the expenditure as revenue in nature. The Tribunal relied on a previous case involving M/s. Palnadu Dairy Pvt. Ltd. to support this decision. The revenue did not dispute this factual aspect, and the CIT(A) based their decision on the Tribunal's previous ruling. Consequently, the Tribunal found no fault in the CIT(A)'s order and dismissed the revenue's appeal.
Judgment: The Appellate Tribunal ITAT VISAKHAPATNAM, in the case concerning the nature of expenditure on plastic canes and crates, upheld the decision of the CIT(A) to treat the expenditure as revenue in nature based on a previous Tribunal order and dismissed the revenue's appeal.
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2011 (2) TMI 1571
Issues involved: Addition of unexplained money u/s. 69A and suppression of interest.
Unexplained money u/s. 69A:
The Assessing Officer made an addition of &8377; 11,00,000/- as unexplained money u/s. 69A of the Income Tax Act based on cash deposits in the assessee's bank accounts. The assessee explained that the cash deposits were from family members and were withdrawn within the financial year. However, the AR of the assessee was unable to provide details of the family members or their income sources, leading to the addition of the amount as unexplained money.
Suppression of interest:
Another addition of &8377; 20,290/- was made on account of suppression of interest on fixed deposits. The Assessing Officer found discrepancies in the interest rates declared by the assessee on the fixed deposits compared to the rates provided by the bank. The Ld. CIT(A) confirmed this addition after considering the submissions of the assessee.
Judgment:
The ITAT Kolkata set aside the addition of unexplained money of &8377; 11,00,000/- for fresh verification, directing the Assessing Officer to redecide the matter after considering the additional documents submitted during the appeal. However, the addition of &8377; 20,290/- for suppression of interest was confirmed. The appeal of the assessee was allowed for statistical purposes, with the order pronounced on 28.02.2011.
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2011 (2) TMI 1570
Non prosecution of appeal - HELD THAT:- At the time of hearing none was present on behalf of the assessee nor filed any application for adjournment of the case. It appears that the assessee is not interested in pursuing the appeal. It has been held in the case of B.N. Bhattachargee & Anr. [1979 (5) TMI 4 - SUPREME COURT] that appeal does not mean only filing of memo of appeal but also pursuing it effectively.
In cases where the assessee does not want to pursue the appeal, Court/Tribunal have inherent power to dismiss the appeal for non prosecution as held by the Hon’ble Bombay High Court in the case of M/s. Chemipol vs. Union of India [2009 (9) TMI 177 - BOMBAY HIGH COURT] . We are convinced that the assessee is not interested in prosecuting the appeal. We, therefore, dismiss the appeal of the assessee as unadmitted.
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2011 (2) TMI 1569
Issues Involved:
1. Validity of re-assessment proceedings.
2. Service of notice u/s 148.
3. Change of opinion.
4. Exemption u/s 10(23C)(iiiab) and 10(23C)(iiiad).
Summary:
1. Validity of Re-assessment Proceedings:
The assessee challenged the re-assessment proceedings on the grounds that the notices u/s 148 were not properly served and that the reopening was based on a change of opinion. The Tribunal found that the objections raised by the assessee were not valid as the notices were duly received by an authorized person of the assessee and action was taken on such notices. The Tribunal also held that the reopening was not due to a change of opinion as there was no scrutiny assessment till assessment year 2001-02, and remedial action was being taken for assessment year 2002-03.
2. Service of Notice u/s 148:
The assessee contended that the notices u/s 148 were not properly served as the signature on the acknowledgment was not of an authorized person. The Tribunal rejected this argument, noting that the authorized person of the assessee had received the notices and requested the Assessing Officer to consider the returns already filed as responses to the notices. The Tribunal concluded that the service of notice is not dependent on the signature but on the actual receipt by an authorized person.
3. Change of Opinion:
The assessee argued that the reopening was based on a change of opinion as the status of the assessee society and its educational institutions was accepted in earlier years. The Tribunal found that there was no change of opinion as there was no scrutiny assessment till assessment year 2001-02, and the Department was not precluded from taking a correct view in subsequent years.
4. Exemption u/s 10(23C)(iiiab) and 10(23C)(iiiad):
The assessee claimed exemption u/s 10(23C)(iiiab) for its educational institutions. The Assessing Officer held that the institutions were not wholly and substantially financed by the Government and their gross receipts exceeded Rs. 1 crore, thus not eligible for exemption. The Tribunal held that the gross receipts of each educational institution should be considered separately for exemption u/s 10(23C)(iiiad). Since the annual gross receipts of each institution were below Rs. 1 crore, the income of these institutions was exempt under sub-clause (iiiad) of clause (23C) of section 10. The requirement of approval of CCIT under sub-clause (vi) of clause (23C) was not applicable as the institutions were covered by sub-clause (iiiad).
Conclusion:
The Tribunal partly allowed the appeals of the assessee, holding that the income of the educational institutions was exempt under sub-clause (iiiad) of clause (23C) of section 10.
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2011 (2) TMI 1568
Issues involved: Appeal filed by Revenue against order of CIT(A)-IV, Hyderabad for assessment year 2006-07 regarding denial of exemption u/s. 11 based on payment of rent to President of Trust.
Revenue's Grounds of Appeal:
1. CIT(A) ignored society's double standards in showing different values to authorities.
2. CIT(A) failed to consider breach of certificate regarding payments to office bearers.
3. Assessing Officer found payment of rent to President in violation of section 13 provisions.
Assessing Officer's Observations:
- President received rent exceeding limit specified in section 13(3)(b).
- Notice issued to assessee to justify claim u/s. 11.
- Assessing Officer emphasized strict application of fiscal provisions.
- Payment of rent considered as benefit to interested person under section 13(1)(c).
Assessee's Arguments:
- Rent payment deemed reasonable by society, saving significant amount.
- Cited case law and CBDT circular to support reasonableness of rent.
- Contended that rent payment did not constitute diversion of income to interested person.
CIT(A)'s Decision:
- Directed Assessing Officer to grant exemption u/s. 11 based on rent payment being reasonable.
- Noted lack of evidence to refute value of rent as shown by Government valuer.
- Upheld assessee's argument that rent payment was not excessive or a benefit to interested person.
Judicial Precedents:
- CIT vs. 21st Society of Immaculate Conception (241 ITR 193) cited in support of reasonable rent payment.
- Tribunal's decision in Oasis Educational Society case favored assessee's position.
Conclusion:
- Tribunal confirmed CIT(A)'s order granting exemption u/s. 11 to assessee.
- Revenue's grounds dismissed as lacking merit.
- Cross Objection filed by assessee deemed infructuous and dismissed.
- Appeal of Revenue and CO of assessee both dismissed.
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2011 (2) TMI 1567
Issues involved:
The first issue pertains to the addition made on account of the amount transferred to Transportation and Infrastructure Utilisation Fund (TIUF) and bank interest on TIUF Fund. The second issue involves the deletion of the addition on account of liability for leave encashment.
Issue 1: Addition on account of TIUF and bank interest:
The Revenue appealed against the order of the Ld. Commissioner of Income Tax (Appeals) regarding the addition made on account of TIUF and bank interest. The tribunal referred to previous decisions in the assessee's own case for earlier years and upheld the Ld. Commissioner's order, stating that the issue is covered in favor of the assessee based on past tribunal decisions. The tribunal found the facts in the present case to be identical to previous cases and decided the issue in favor of the assessee, in line with the judgments of the Hon'ble Apex Court.
Issue 2: Deletion of addition on leave encashment:
The second issue revolved around the deletion of the addition on account of liability for leave encashment. The Assessing Officer did not entertain the assessee's claim as it was not made in the return of income or through a revised return. However, the Ld. Commissioner of Income Tax (Appeals) allowed the claim by citing the decision of the Hon'ble Apex Court in the case of Bharat Earth Movers [2000] 245 ITR 428. The tribunal, after hearing both parties, concluded that the issue should be considered and remitted it back to the Assessing Officer for fresh consideration in light of the Hon'ble Apex Court decision.
In conclusion, the appeal filed by the Revenue was partly allowed for statistical purposes, with the tribunal upholding the Ld. Commissioner's decision on the TIUF issue and remitting the leave encashment issue back to the Assessing Officer for reconsideration.
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2011 (2) TMI 1566
Issues involved:
Appeal against order under s. 143(3) of the IT Act, 1961 and levy of penalty under s. 271(1)(c) of the IT Act, 1961.
Issue 1: Assessment Order under s. 143(3) based on s. 154/143(1)(a)
- The assessee, engaged in cloth trading, declared excess cash as additional income during a survey.
- AO rectified intimation under s. 154 to add the income in the assessment.
- CIT(A) annulled assessment due to lack of notice u/s 143(2).
- Tribunal restored the matter to CIT(A) to decide on merits.
- Legal issue raised on validity of assessment order under s. 143(3) not considered by CIT(A).
- Assessee contended that proceedings under s. 154 after notice u/s 143(2) were not sustainable.
- Tribunal directed CIT(A) to decide the legal issue as per law.
Issue 2: Ad hoc disallowance of expenses
- CIT(A) deleted trading account addition but confirmed disallowance of expenses.
- Assessee appealed against the disallowance of telephone and vehicle expenses.
- Disallowance of Rs. 5,000 deemed excessive.
- AO directed to restrict disallowance to 1/10th of the expenditure.
Issue 3: Penalty under s. 271(1)(c)
- Penalty imposed by CIT(A) is consequential to the confirmed addition.
- Since quantum appeal is restored, penalty order also restored for reconsideration.
- CIT(A) directed to decide penalty after considering the legal issue raised by the assessee.
Conclusion:
- Appeals of the assessee allowed in part, with directions given for reconsideration of legal issues and expenses disallowance.
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2011 (2) TMI 1565
Application for recall of the Order - In present case, the Criminal Revision was listed in the High Court. No one appeared on behalf of the Revisionist, though the Counsels for Respondents appeared. In these circumstances, the judgment was passed. later, an application was moved for recall of the Order, alleging that the case was shown in the computer list and not in the main list of the High Court, and hence, the learned Counsel for the Revisionist had not noted the case and hence he did not appear. It often happens that sometimes a case is not noted by the Counsel or his clerk in the cause list, and hence, the Counsel does not appear. This is a human mistake and can happen to anyone. Hence, the High Court recalled the order and directed the case to be listed for fresh hearing. same was challenged and hence, this appeal.
HELD THAT:- In our opinion, Section 362 cannot be considered in a rigid and over technical manner to defeat the ends of justice. Hence, we see no error in the impugned order passed by the High Court. The appeal fails and is accordingly dismissed.
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2011 (2) TMI 1564
Issues involved: Interpretation of government order dated 28.8.1993 for refund of sales tax to export oriented units.
Summary:
The petitioner, an industry engaged in the manufacture, sale, and export of cashew kernels, sought quashing of an endorsement and refund of sales tax as per a Government Order dated 28.8.1993. The petitioner claimed entitlement to the refund based on the government policy applicable to export oriented units. The Government Pleader argued that the government order was only applicable to new industrial units that were export-oriented. The matter was considered by the Commissioner multiple times, with the petitioner contending that the findings were not in line with the spirit of the government order. The government order provided for exemption of sales tax for export-oriented industrial units for a specific period, with conditions regarding the commencement of commercial production. The Court held that the petitioner's unit, established in 1958, did not meet the criteria for exemption under the government order as it was not a new unit established around August 1993 or thereafter. The Court dismissed the petition, upholding the Commissioner's decision that the government order was not applicable to the petitioner.
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2011 (2) TMI 1563
Issues Involved:
1. Propriety of the Ministry's conditional renewal of permission.
2. Validity of the Central Government's renewal of permission beyond the stipulated deadline.
3. Appropriate time schedule for renewal of permissions.
Detailed Analysis:
Issue 1: Propriety of the Ministry's Conditional Renewal of Permission
The Ministry of Health and Family Welfare granted renewal of permission to the petitioner College for the academic year 2010-2011, but with a condition that the College must obtain an order from the Supreme Court to validate the permission beyond the stipulated deadline of 15th July. The Court found this condition improper and irregular, stating that the executive power to grant permissions under Section 10-A of the Dentists Act is not subject to the control or supervision of the judiciary. The Court emphasized that the judiciary has no role in the decision-making process of granting or refusing permissions under the Act, and such a stipulation by the Ministry amounts to shirking its responsibility and improperly involving the judiciary in executive decisions. Consequently, the Court quashed this condition.
Issue 2: Validity of the Central Government's Renewal of Permission Beyond the Stipulated Deadline
The Central Government, following a High Court directive, granted renewal of permission to the petitioner College beyond the 15th July deadline, as stipulated in the DCI Regulations. The Court clarified that the 15th July deadline mentioned in Mridul Dhar v. Union of India pertains to medical colleges and not dental colleges. The DCI Regulations do provide a 15th July deadline for dental colleges, but the Central Government has the discretion to modify this schedule for specific categories of applications, as per Note 2 to the Schedule of the DCI Regulations. Given that the delay was beyond the control of the petitioner College and the last date for admissions had not expired, the Court deemed the renewal of permission valid.
Issue 3: Appropriate Time Schedule for Renewal of Permissions
The Court noted the need for a distinct time schedule for renewal of permissions, separate from the schedule for new permissions. The current DCI Regulations apply a similar time schedule for both, which is not practical given the different nature of these applications. The Court suggested that the DCI and the Central Government consider amending the Regulations to provide a shorter and distinct time schedule for renewals, allowing dental colleges to file applications until the end of February, with the process to be completed by 15th June.
Conclusion
The Court allowed the writ petitions as follows:
(a) Quashed the condition imposed by the Central Government requiring the dental colleges to secure orders from the Supreme Court approving the renewals of permission.
(b) Declared the renewal of permissions issued by the Central Government for the academic year 2010-2011 as valid.
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2011 (2) TMI 1562
Validity of ex-parte decree of divorce - service of notice or not - sufficient cause - Presumption of service by registered post and burden of proof - ex-parte decree of divorce challenged (after 4 years of its passing) basically on the grounds that ex-parte decree had been obtained by fraud and collusion with the postman etc., to get the report of refusal and on the ground that she had not been served notice even by substituted service and also on the ground that even subsequent to obtaining decree of divorce the appellant did not disclose the fact of grant of divorce to her during the proceedings of maintenance under Section 125 of the Code of Criminal Procedure, 1973.
HELD THAT:- In order to determine the application under Order IX, Rule 13 CPC, the test has to be applied is whether the defendant honestly and sincerely intended to remain present when the suit was called on for hearing and did his best to do so. Sufficient cause is thus the cause for which the defendant could not be blamed for his absence. Therefore, the applicant must approach the court with a reasonable defence - Sufficient cause is a question of fact and the court has to exercise its discretion in the varied and special circumstances in the case at hand - There cannot be a strait-jacket formula of universal application.
Presumption of service by registered post and burden of proof - HELD THAT:- This Court after considering large number of its earlier judgments in GREATER MOHALI AREA DEVELOPMENT AUTHORITY & ANR VERSUS MANJU JAIN [2010 (8) TMI 932 - SUPREME COURT], held that in view of the provisions of Section 114 Illustration (f) of the Evidence Act, 1872 and Section 27 of the General Clauses Act, 1897 there is a presumption that the addressee has received the letter sent by registered post. However, the presumption is rebuttable on a consideration of evidence of impeccable character.
In the present case, the High Court held that presumption stood rebutted by a bald statement made by the respondent/wife that she was living at different address with her brother and this was duly supported by her brother who appeared as a witness in the court. The High Court erred in not appreciating the facts in the correct perspective as substituted service is meant to be resorted to serve the notice at the address known to the parties where the party had been residing last - More so, it is nobody's case that respondent/wife made any attempt to establish that there had been a fraud or collusion between the appellant and the postman. Not a single document had been summoned from the post office. No attempt has been made by the respondent/wife to examine the postman. It is nobody's case that the "National Herald" daily newspaper published from Delhi did not have a wide circulation in Delhi or in the area where the respondent/wife was residing with her brother. In such a fact-situation, the impugned order of the High Court becomes liable to be set aside.
The first appellate Court should not disturb and interfere with the valuable rights of the parties which stood crystallised by the trial Court's judgment without opening the whole case for re-hearing both on question of facts and law. More so, the appellate Court should not modify the decree of the trial Court by a cryptic order without taking note of all relevant aspects, otherwise the order of the appellate Court would fall short of considerations expected from the first appellate Court in view of the provisions of Order XLI, Rule 31 CPC and such judgment and order would be liable to be set aside.
The High Court was duty bound to set aside at least the material findings on the issues, in spite of the fact that approach of the court while dealing with such an application under Order IX, Rule 13 CPC would be liberal and elastic rather than narrow and pedantic. However, in case the matter does not fall within the four corners of Order IX, Rule 13 CPC, the court has no jurisdiction to set aside ex-parte decree - the High Court did not consider the grounds on which the trial Court had dismissed the application under Order IX, Rule 13 CPC filed by the respondent/wife. The appeal has been decided in a casual manner.
The judgment and order passed by the High Court of Delhi is set aside and the judgment and order of the trial Court is restored - Appeal allowed.
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2011 (2) TMI 1561
Issues involved: Dismissal of appeal for non-prosecution and the assessee's right to approach the Tribunal for recalling the order.
The appeal before the Appellate Tribunal ITAT MUMBAI was directed against the order passed by the ld. CIT(A)-XXI for the Assessment Year 2005-06. The appeal was scheduled for hearing on 4.1.2011 but was adjourned to 23.02.2011 at the request of the assessee. However, at the time of the hearing, no one appeared on behalf of the assessee or filed any application for adjournment. Citing the decision in the case of B.N. Bhattachargee & Anr. (118 ITR 461), it was noted that an appeal must not only be filed but also effectively pursued. Referring to the Hon'ble Bombay High Court's ruling in the case of M/s. Chemipol vs. Union of India, it was concluded that the Tribunal has the power to dismiss an appeal for non-prosecution. The Tribunal found that the assessee showed no interest in pursuing the appeal, leading to the dismissal of the appeal as unadmitted.
The Tribunal granted the assessee the liberty to approach the Tribunal for recalling the order if there was a sufficient cause for their non-appearance on the hearing date. The order dismissing the appeal was pronounced on the 28th day of February, 2011.
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2011 (2) TMI 1560
Issues involved:
The judgment involves appeals by the assessee against orders of Learned CWT(Appeals) for assessment years 2002-03 to 2007-08, concerning valuation of immovable property, Dynasty Jewellery, jewellery, wealth outside India, and fixed deposit.
Valuation of Immovable Property:
The assessee challenged the assessment of immovable property at Rs. 6,39,10,92,000 by the CWT(Appeals) for lack of justification and details of addition. The counsel highlighted pending civil suit affecting inheritance disputes, citing previous ITAT orders setting aside similar issues for fresh adjudication. The ITAT found identical circumstances in earlier years, setting aside the order for fresh adjudication post civil suit decision.
Assessment of Dynasty Jewellery:
The CWT(Appeals) assessed Dynasty Jewellery at Rs. 9,00,00,000 without providing reasons or cause for the addition. The counsel pointed out previous ITAT orders setting aside similar issues for fresh adjudication post civil suit decision, leading to the ITAT setting aside the order for fresh adjudication.
Valuation of Jewellery:
The CWT(Appeals) assessed the value of jewellery at Rs. 3,59,71,984 without proper justification or details of addition. The counsel referenced previous ITAT orders for similar issues, leading to the ITAT setting aside the order for fresh adjudication post civil suit decision.
Assessment of Wealth Outside India:
The CWT(Appeals) assessed wealth outside India at Rs. 16,18,420 without detailed justification. The counsel referred to previous ITAT orders, advocating for setting aside the issue for fresh adjudication post civil suit decision, which the ITAT upheld.
Assessment of Fixed Deposit:
The CWT(Appeals) assessed the value of a fixed deposit at Rs. 5 lakhs without adequate justification or details of addition. The counsel relied on previous ITAT orders, urging for the issue to be set aside for fresh adjudication post civil suit decision, which the ITAT agreed to.
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2011 (2) TMI 1559
Issues Involved:
1. Allowance of VRS compensation payment.
2. Deduction under section 80HHD.
3. Utilization of tourism reserve under section 80HHD(4)(b).
4. Deduction of architect fees and renovation expenditure.
5. Treatment of software maintenance expenses.
6. Disallowance under section 14A.
7. Treatment of interest income for computing deduction under section 80HHD.
8. Disallowance of advance given against software development expenses.
Issue-wise Detailed Analysis:
1. Allowance of VRS Compensation Payment:
The first issue pertains to the allowance of Rs. 82,17,495/- as VRS compensation. The assessee paid this amount to the staff of the cargo division of Sita World Travel (India) Limited due to its closure post-amalgamation. The Assessing Officer disallowed the payment, arguing it was not related to the assessee's business. However, the CIT(A) allowed the deduction, noting that the amalgamation date was 01.04.2000, and the liability was transferred to the assessee. The Tribunal upheld the CIT(A)'s decision, confirming that the payment was made in the course of carrying on the business and was thus allowable under section 37(1) of the Act.
2. Deduction under Section 80HHD:
The second issue concerns the deduction under section 80HHD amounting to Rs. 12,61,21,998/-. The Assessing Officer denied the deduction, citing the lack of a valid RBI license. However, the CIT(A) allowed the deduction, stating that the assessee was a recognized tour operator by the Government of India. The Tribunal upheld the CIT(A)'s decision, emphasizing that the approval granted to Sita World Travel (India) Limited should be treated as approval to the assessee due to the amalgamation, thus entitling the assessee to the deduction.
3. Utilization of Tourism Reserve under Section 80HHD(4)(b):
The third issue is about the utilization of the tourism reserve amounting to Rs. 3,77,87,554/-. The Assessing Officer disallowed the claim, arguing improper utilization. The CIT(A) allowed the claim, accepting that the reserve was utilized for business purposes. The Tribunal partially upheld the CIT(A)'s decision but directed the Assessing Officer to verify the utilization of Rs. 64,26,133/- to ensure it was used for operating tours. The Tribunal disallowed the claim for Rs. 1,66,73,393/- spent on cars for staff use, as it did not meet the requirements of section 80HHD(4).
4. Deduction of Architect Fees and Renovation Expenditure:
The fourth issue involves the deduction of Rs. 7,38,643/- as architect fees and Rs. 45,04,115/- for renovation expenses. The Assessing Officer treated these as capital expenditure, but the CIT(A) allowed them as revenue expenditure. The Tribunal upheld the CIT(A)'s decision, noting that the architect fees did not create a capital asset and that the renovation expenses were for rented properties, not owned by the assessee.
5. Treatment of Software Maintenance Expenses:
The fifth issue is the treatment of Rs. 24,00,022/- incurred for software maintenance. The Assessing Officer considered it as capital expenditure, while the CIT(A) treated it as revenue expenditure. The Tribunal upheld the CIT(A)'s decision, recognizing the rapid obsolescence of software and the lack of enduring benefit to the assessee.
6. Disallowance under Section 14A:
The sixth issue pertains to the disallowance of Rs. 50,000/- under section 14A. The CIT(A) deleted the disallowance, but the Tribunal restored it, agreeing with the Assessing Officer that the expenses related to collection, maintenance, and other investment-related activities were properly disallowed.
7. Treatment of Interest Income for Computing Deduction under Section 80HHD:
The seventh issue involves the treatment of interest income for computing the deduction under section 80HHD. The Tribunal restored the issue to the Assessing Officer for fresh adjudication, following its earlier order in the assessee's case for the assessment year 2000-01, directing examination of the nature of interest income and its connection with the business.
8. Disallowance of Advance Given Against Software Development Expenses:
The eighth issue is the disallowance of Rs. 9,81,094/- being an advance given against software development expenses. The Tribunal restored the matter to the Assessing Officer to decide the allowability of the claim in accordance with the Special Bench decision in the case of Amway India Enterprises vs. DCIT.
Conclusion:
The appeal of the department is partly allowed, and the assessee's appeal is allowed for statistical purposes. The Tribunal upheld several decisions of the CIT(A) but also directed further verification on specific issues.
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