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Showing 61 to 80 of 1237 Records
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2014 (3) TMI 1181
Capital gain on sale of immovable property in terms of the provisions of section 163(1)(c) - assessee was appointed as attorney in respect to the properties on the basis of executed instrument titled as ‘power of attorney’ the assessee executed two sale agreements through which the immovable property owned by Smt. Pamela Colleco was transferred to two independent buyers - whether the assessee can be held as ‘the representative assessee’ in terms of the provisions of section 163(1)? - HELD THAT:- By merely providing the address the assessee cannot absolve himself from his statutory liability of payment of tax arising on the income generated from the transaction of sale of the immovable property. Assessee is a legally ‘appointed power of attorney’ holder in respect to the property owned by a non resident and on the basis of such attorney he has executed the sale agreements and has received consideration and no tax was paid either by the non resident or by the assessee himself.
It is also a matter of fact that the revenue authorities on the basis of such power of attorney has registered the sale deeds in favour of the buyers in the revenue records. We have also perused the power of attorney placed in assessee’s paper book and have found that the assessee was appointed as power of attorney holder of Smt. Pamela Colleco in clear terms without any conditions. Thus, after going through all the documents and considering the material available on record, we are of the considered opinion that the power of attorney is valid and on the basis of such attorney the assessee is held as agent of Smt. Pamela Colleco. Therefore, we find no infirmity in the order of ld. CIT(A) in justifying the action of ld. AO in holding the assessee as representative assessee of Smt. Pamella Colleco. Accordingly we hold the assessee as the representative assessee of Smt. Pamela Colleco as provided in section 163 - Decided against revenue.
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2014 (3) TMI 1180
Offence or not - act which is not an offence on the date of its commission or the date on which it came to be known - rigging of the result of entrance examination - applicability of provisions of MCOCA cannot be applied in cases where the offence has been committed outside the State of Maharashtra - HELD THAT:- It is evident that to come within the mischief of continuing unlawful activity, it is required to be established that the accused is involved in activities prohibited by law which are cognizable offence punishable with imprisonment of three years or more and in respect thereof, more than one charge-sheets have been filed against such person before a competent court within the preceding period of ten years and that court has taken cognizance of such offence.
There may be a case in which the investigating agency does not know exactly the date on which the crime was committed; in our opinion, in such a case the date on which the offence comes to the notice of the investigating agency, the ingredients constituting the offence have to be satisfied. In our opinion, an act which is not an offence on the date of its commission or the date on which it came to be known, cannot be treated as an offence because of certain events taking place later on. We may hasten to add here that there may not be any impediment in complying with the procedural requirement later on in case the ingredients of the offence are satisfied, but satisfying the requirement later on to bring the act within the mischief of penal provision is not permissible. In other words, procedural requirement for prosecution of a person for an offence can later on be satisfied but ingredients constituting the offence must exist on the date the crime is committed or detected. Submission of charge-sheets in more than one case and taking cognizance in such number of cases are ingredients of the offence and have to be satisfied on the date the crime was committed or came to be known.
On the date the offence was committed or came to be known, one of the ingredients of the offence, i.e. submission of charge-sheet and cognizance of offence of specified nature in more than one case within the preceding period of ten years, has not been satisfied - there are no other option than to hold that the accused cannot be prosecuted for the offence under Section 3 of MCOCA.
The appeal preferred by the accused is allowed.
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2014 (3) TMI 1179
Speculation loss while dealing in derivatives - Disallowance of exchange contract booked value as per the rate of exchange prevailing on the last date of the previous year - as per assessee assessee had booked option contract of exchange to optimize the liability in respect of foreign currency loan on working capital and hence the liability incurred on foreign exchange contract on account of exchange fluctuation is only in the revenue field and ought to have allowed as a revenue deduction - HELD THAT:- In the cases relied on by the learned counsel, the facts are that the assesses had minimized the loss arising out of the fluctuation of Forex rate by cancelling the forward contract. Those forward contracts were entered into to protect the final outcome of its export proceeds from foreign exchange rate fluctuation. But in the present case, the Assessing Officer has clearly established that the assessee has carried out speculation business in the nature of trading in derivatives. The loss incurred by the assessee while dealing in derivatives is in the nature of speculation loss, as explained by the Assessing Officer. Therefore, we confirm the orders of the lower authorities on this point and reject the grounds raised by the assessee.
Deduction provided under sec.80JJAA - HELD THAT:- As pointed out by the Assessing Officer, number of workers did not reach the minimum requirement of 100 regular workmen. The regular workmen employed by the assessee during the relevant previous year was only 89. Therefore, the assessee-company is not entitled for deduction provided under sec.80JJAA. Accordingly, the order of the Commissioner of Income-tax(Appeals) on this point is reversed and the disallowance made by the Assessing Officer is upheld. - Decided against assessee.
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2014 (3) TMI 1178
Withdrawal of exemption granted u/s 12AA - Charitable activity u/s 2(15) - As pointed out by assessee that the Trust was formed under the Punjab Town Improvement Act for the improvement of a particular area and even the charges were settled by the Punjab Government and the assessee could not take charges beyond the same and hence, no income arising to the assessee - HELD THAT:- The assessee Trust before us is the Improvement Trust, Malerkotla and the facts of the present case are identical to the facts of Improvement Trust, Bathinda which is also formulated under the Punjab Town Improvement Trust Act. As fairly admitted by assessee during the course of hearing that the appeals in the case of various Improvement Trusts under the amended provisions of section 2 (15) of the Act w.e.f. 01.04.2009 were pending before the Hon' ble Punjab & Haryana High Court. As the facts of the present case are identical to the facts before the Amritsar Bench of the Tribunal in Improvement Trust, Bath inda Vs CIT, Bathinda [2013 (2) TMI 577 - ITAT AMRITSAR] and following the same parity of reasoning, we uphold the order of Commissioner of Income Tax in withdrawing the registration granted to the assessee under section 12AA.
In view of the ratio laid down by the Hon'ble Jammu & Kashmir High Court in the case of Jammu Development Authority Vs Union of India & another [2013 (11) TMI 1578 - JAMMU AND KASHMIR HIGH COURT] and Amritsar Bench of Tribunal in Improvement Trust, Bathinda Vs CIT, Bathinda [2013 (2) TMI 577 - ITAT AMRITSAR], we are in conformity with the order of the Commissioner of Income Tax in withdrawing the registration granted to the assessee under section 12AA - Appeal of the assessee is dismissed.
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2014 (3) TMI 1177
Suit for declaration and injunction by the Appellant - suit for dissolution of marriage in the City Civil Court at Calcutta which was transferred before the Family Court - HELD THAT:- The High Court after perusing the facts and after considering the averments made in the plaint held that after deleting the name of Plaintiff No. 1 from the plaint, it is clear from the averments that the plaint discloses no cause of action, and accordingly held that Plaintiff No. 2 has no independent cause of action to proceed with the suit and the handing over of possession of the suit premises is nothing but to carry out an order passed by the High Court and thereby Plaintiff No. 2 being the son, cannot have any cause of action in the matter. In view of the above, the High Court reversed the order of the trial court, allowed the application and rejected the plaint. Being aggrieved, this appeal has been filed on the ground that the said property is a trust property and that the Appellant has a right to reside there as one of the trustees, and that he as a legal heir and son of the Respondent, is entitled to reside in the suit property in terms of the trust deed.
The High Court has correctly perused the plaint in its entirety and after deletion of the name of Plaintiff No. 1 from the said Title Suit, held that the plaint discloses no cause of action after taking into account the fact that the very purpose of the suit has become infructuous in view of the order passed by the High Court to hand over the possession of the rooms in question. Therefore, the foundation of the suit was not subsisting after the handing over of possession to the Defendant by Plaintiff No. 1 in terms of the order. Hence, in these circumstances, the High Court held that the plaint discloses no cause of action.
There is no merit in the appeal - appeal dismissed.
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2014 (3) TMI 1176
Deduction u/s 35D - HELD THAT:- Appeal is ADMITTED on the following substantial questions of law:
(a) Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in not following the decision of the jurisdictional High Court in the case of Commissioner of Income Tax v/s Emirates Commercial Bank [2003 (4) TMI 2 - BOMBAY HIGH COURT]?
(b) Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in holding that the Appellant is not an industrial undertaking so as to be entitled to deduction under Section 35D of the Income Tax Act, 1961?
(c) Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in holding that the omission of the word “industrial” by the Finance Act, 2008 is prospective and, therefore, would not apply for the Assessment Year 20062007?
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2014 (3) TMI 1175
Computation of deduction u/s 10A - disallowance of bank interest - assessee submitted that the interest earned had a direct nexus with the business of the assessee as the fixed deposit were kept under lien with the bank for sanction of loans - HELD THAT:- It is clear from the finding of CIT(A) that the AO was directed to consider the netting of expenses in view of the decisions of Hon’ble Supreme Court in the case of ACG Associated Capsules [2012 (2) TMI 101 - SUPREME COURT], hence no grievance is left against the order of CIT(A).
Disallowance of Job Charges - We direct the AO to redo the assessment by considering only the net receipt in respect of job work. The expenditure in this respect has to be worked out on the basis of either man hours put in the job work in comparison to the own manufacturing activity or on the basis of output ratio in the own manufacturing activity and job work. The assessee is directed to produce relevant details for allocation of the expenditure regarding job work activity. If it is not possible to work out the allowable expenditure on the above said basis then the AO should work out on some reasonable basis.
Disallowance is exchange difference gain on loans - We find that the assessee is having two kinds of loan one is short term loan against export bills which is clear from the schedule of the balance sheet and other is term loan. Even in the schedule 4, the assessee has shown secured loan in foreign currency which is term loan and further the working capital loan under the category of pecking credit, post shipment foreign currency account. As far as the working capital loan is concerned the exchange gain on such loan should be allowed as business income and so far as the exchange gain on secured term loan which is not for working capital the same cannot be treated as business income for the purpose of section 10A. Accordingly we direct the AO to verify the exact details of the foreign exchange gain in respect of two kinds of loan and then allow the claim of the assessee with respect to the working capital loan. Appeal of the assessee is partly allowed.
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2014 (3) TMI 1174
Penalty u/s 271(1)(c) - exemption from tax under Section 10A denied - HELD THAT:- AO took the view that no exemption can be given to the Noida unit in respect of the interest income and also initiated proceedings for the levy of penalty for both the years under Section 271(1)(c) of the Act for concealment of income. The penalties were confirmed by the CIT (Appeals). The Tribunal cancelled them on the ground that questions of law have been framed by this Court in the appeals filed by the assessee in the assessment proceedings, which indicated that the issue was debatable.
Tribunal after considering these circumstances and relying upon CIT vs. HB Leasing and Finance Co. Ltd [2011 (2) TMI 434 - DELHI HIGH COURT] where this Court held that when a question of law is framed in respect of the issue, the matter can be said to be debatable so far as the application of Section 271(1)(c) is concerned, held that the penalties were not warranted.
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2014 (3) TMI 1173
Penalty u/s 271(1)(C) - Addition of long term capital gains by taking a different fair market value as on 01-04-1981 - HELD THAT:- Addition is purely based on difference of opinion. The assessee has undisputedly disclosed the basis of valuation of fair market value adopted as on 01.04.1981. It is pertinent to note that the fair market value as on 01.04.1981 is always determined by considering the instance of sale and purchase in the area and by making certain adjustment.
Even by taking the utmost care while determining the value. It need not necessarily give the actual value of the property as on 01.04.1981. Since the actual cost or value of the property is based on the opinion, therefore, any addition made on the basis of difference of opinion and estimate would not automatically lead to the conclusion that the assessee has concealed particulars of income or furnished inaccurate particulars of income. The assessee has relied upon the various decisions wherein it has been held that the report of the DVO is merely an expression of opinion and on the basis of opinion and estimates penalty cannot be levied u/s 271(1)(C) as the concealment has not been proved in such a situation.
We are of the considered opinion that the penalty u/s 271(1)(c) is not warranted in respect of the addition based on different fair market value as on 01.04.1981 when the assessee has substantiated its claim by the valuation report of a registered valuer. - Decided in favour of assessee.
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2014 (3) TMI 1172
SEBI Violation - price escalation of scrips - appellant was found guilty of manipulating the price of the scrip - imposed a monetary penalty of ₹ 5 lac under Section 15HA of the SEBI Act for violation of Regulation 4(1) and 4(2)(e) of the FUTP Regulations - HELD THAT:- The appellant executed trades during the period December 2003 to January 2004 whereas AIL’s annual results came out only after March 2004, and the December 2003 quarterly results were published only on January 2004 as has been noticed by the adjudicating officer in paragraph 21 of the impugned order. From the nature of the trading, it is clear that the appellant has sought to create a misleading impression that a large number of persons were trading in the scrip. This lends support to the finding of the adjudicating officer in paragraph 20 of the impugned order.
It must not be forgotten that every trade establishes the price of the scrip and the noticee’s trading at higher than LTP resulted in the price of the scrip going up and were done with a view to set the price at a desired level and thereby influencing the innocent/gullible investors. By purchasing at a higher price in most of his trades, the noticee had given the wrong impression about the price of the scrip in the market.
It is an accepted state of affairs that in cases of manipulation of the volume and / or price of a particular scrip, it is usually an arduous task to obtain direct evidence. However, the analysis of the trade and order logs as undertaken hereinabove, establishes the malafide intention of the appellant.
Therefore, in view of the above factual position, we do not find any merit in the appeal and the same is dismissed.
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2014 (3) TMI 1171
Additional depreciation - claim not allowed in the preceding year on the asset put to use by the assessee for less than 180 days - HELD THAT:- As decided in assessee's own case provisions of the Act are very clear. The second proviso to section 32(1), which restricts the depreciation to 50% of the percentage prescribed in respect of assets used for less than 180 days is applicable for additional depreciation also. There is no provision in the act to carry forward and allow the balance depreciation in the next year. Further the additional depreciation is allowable only in respect of new machinery or plant that has been acquired, when the balance 50% of the additional depreciation is proposed to be claimed, the assets are not new machinery or plant eligible for additional depreciation.
These assets form part of the opening written down value of the assets. Therefore, these are not entitled for the said additional depreciation.
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- Rule 8D of the Income Tax Rules is not applicable in the case of the assessee because it came into effect only w.e.f 24.03.2008. Prior to this date the decision pointed out by the Ld. A.R. would be applicable. In these circumstances, we are of the considered view that Ld. Assessing Officer reasonably estimated the disallowable expenses being 2% of dividend income earned by the assessee. Therefore, we set aside the order of the Ld. CIT (A) and confirm the order of the Ld. Assessing Officer on this issue.
Treating the remission of sales tax liability as income of the assessee U/s. 41(1) - assessee argued that there was no remission of liability U/s. 41(1) of the Act as the amount was prepaid on the net present value basis and therefore, should not be included in the profits and gains of the assessee - HELD THAT:- This issue was held in favour of the assessee by the decision of the Tribunal [2013 (11) TMI 1774 - ITAT CHENNAI] as held that it is a simple case of collecting the amount at net present value which is due later on and even the formula for collecting the net present value was also given by the SICOM and the amounts have been paid as per that formula. Therefore, such payment of net present provisions of section 41(1)(a) of the Income Tax Act, 1961 we are fully conscious that issue before us is regarding statutory liability and the above discussion and provisions of the Indian Contract Act referred to by us in the above para relate to the contractual liability.
Disallowance of Loss on account of exchange fluctuation - HELD THAT:- These transactions had arisen only due to the international business transaction of the assessee in order to protect itself from foreign exchange fluctuation. Accordingly, any expenditure related to the same has to be treated as expenditure incurred in the ordinary course of the business of the assessee and shall be allowed as an deduction under the provisions of the Act and shall not be considered as speculative business transaction. Since the facts are not clear from the order of the Ld. Assessing Officer and the Ld. CIT (A); like our predecessors we hereby remit back the matter to the file of Ld. Assessing Officer for verifying the nature of loss incurred and consider the issue on transaction to transaction basis and decide according to law and merits.
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2014 (3) TMI 1170
Validity of reopening of reassessment - non communication of reasons to believe - HELD THAT:- After perusing the records placed before it the learned Tribunal found that the reasons for reopening of the assessment u/s 148 read with Section 147 of the Income Tax Act, 1961, were not communicated to the assessee before passing the assessment order. In view of the fact finding, we think that the decision of the Tribunal [2013 (6) TMI 891 - ITAT HYDERABAD] is absolutely correct and we donot want to interfere with the same.
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2014 (3) TMI 1169
Allowance of advertisement expenditure - CIT(A) directing to allow advertisement expenditure in this year and balance in equal installments in 9 years - HELD THAT:- There was no basis on which the Ld. CIT(A) could have held that the benefit of payment in question will be available for 10 years only and consequential deduction is to be allowed over a period of 10 years. It is observed that the benefit was not for any fixed period. We agree with the Ld. CIT(A) that the expenditure in question is revenue in nature and no capital asset of enduring nature was acquired by the assessee by making the payment in question and therefore, the entire payment is allowable as deduction to the assessee in the year on incurring of the expenditure. We, therefore, modify the order of the CIT(A) and direct the Assessing Officer to allow deduction for entire during the year under consideration. Thus, relevant ground of appeal of the Revenue is dismissed and relevant ground of cross-objection of the assessee is allowed.
Depreciation on trucks at the rate of 40% - HELD THAT:- Assessee was the owner of the vehicles. As the owner, it used the assets in the course of its business, satisfying both requirements of section 32 and, hence, was entitled to claim depreciation in respect of additions made to the trucks, which were leased out. That for purposes of the assessee's claim to the higher rate of depreciation, the interpretation of the term "purposes of business", used in the second proviso to section 32(1) of the Act would not be any different from that ascribed to it under section 32(1) - Therefore, the assessee fulfilled even the requirements for a claim of a higher rate of depreciation and was entitled thereto.
We find that the order of the CIT(A) is supported by the order of the Hon'ble Supreme Court in the case of ICDS Ltd. [2013 (1) TMI 344 - SUPREME COURT]. We, therefore, do not find any good reason to interfere with the order of the CIT(A) on this issue.
Deduction u/s 80HHC for marine division - HELD THAT:- It is not in dispute that the assessee has incurred loss from export of trading goods in marine division and received export incentive, 90%. AO is disallowed deduction u/s. 80HHC in its entirety on the ground that there is no profit from marine export and only profit was in the form of increment of 90% of export incentive provided under the section - CIT(A) following his order passed in the assessment year 1994-95 and 1995-96 allowed the claim of the assessee for deduction under section 80HHC which is equal to 90% of export incentives subject to the gross total income of the assessee. In view of our decision in the assessment year 1994-95 and 1995-96, the assessee is entitled for deduction under section 80HHC, after netting of loss from the export incentive which works out to ₹ 1,32,07,423/-. Thus, this ground of the appeal of the Revenue is allowed.
Net interest as against gross interest in indirect cost while working out deduction u/s 80HHC from general division - HELD THAT:- We find that the decision of the learned CIT(A) is supported by the decision in the case of ACG Associates Capsules [2012 (2) TMI 101 - SUPREME COURT] wherein it has been held that not the gross interest but only the net interest, which has been included in the profits of business of the assessee as computed under the head 'Profits and Gains of Business or Profession', is to be deducted under clause (1) of Explanation (baa) to section 80HHC for determining the profits of the business. In the instant case, the interest income was treated by the as part of income from profits and gains of business or profession. Therefore, we do not find any infirmity in the order of the CIT(A), which is confirmed and the ground of the appeal of the Revenue is dismissed.
Disallowance being fees for the increase in the authorized capital - HELD THAT:- This ground of the appeal is to be decided against the assessee in view of the decision in the case of Punjab State Industrial Development Ltd. Vs. CIT, [1996 (12) TMI 6 - SUPREME COURT] wherein it was held that the fees paid to Registrar of Companies for expansion of capital basis of a company is directly related to the capital expenditure incurred by the company and although incidentally that would certainly help in the business of the company and may also help in profit making, is still retains the character of capital expenditure, since the expenditure is directly related to the expansion of the capital base of the company. We, therefore, dismiss this ground of the appeal of the assessee.
Unexplained payment to Aditya Cargo Group - HELD THAT:- We find force in the argument of the learned AR that amendment in section 69C to the effect that deduction in respect of unexplained business expenditure will not be allowed, has been brought into force by the Finance (No. 2) Act, 1998 w.e.f. 1.4.1999. In the instant case the assessment year involved is 1995-96. In the instant case, it is not in dispute that ₹ 26,50,744/- relates to payment of service charges for import of goods. Therefore, the assessee is entitled for deduction of ₹ 26,50,744/- when the said amount is treated as unexplained business expenditure of the assessee - Decided in favour of assessee.
Levy of interest under section 234A & 234B of the IT Act is consequential.
Business loss could be adjusted against 90% export incentives for working out the deduction u/s. 80HHC
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2014 (3) TMI 1168
Admissibility of appeal - Levy of tax - CST or VAT - HELD THAT:- The appellants, carrying on business outside the State, were to purchase goods from Uttarakhand from their suppliers, prima facie, it appears that the transaction involved inter-State sale and, accordingly, central sales tax is applicable and not Uttarakhand Value Added Tax.
Appeal admitted.
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2014 (3) TMI 1167
Advances made to rural branches u/s 36(1)(viia) - definition of “Rural branch” for the purpose of arriving at deduction u/s. 36(1)(viia) - CIT(A) dismissed the appeals filed by the assessee - HELD THAT:- CIT(A) has followed the binding decision rendered by the Hon’ble Jurisdictional High Court of Kerala in the case of Lord Krishna Bank Ltd [2010 (10) TMI 860 - KERALA HIGH COURT]. Since both the tax authorities have followed the binding decision of the Hon’ble Jurisdictional High Court in the case of Lord Krishna Bank Ltd. (supra), we do not find any reason to interfere with the decision rendered by Ld. CIT(A). Appeals filed by the assessee are dismissed.
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2014 (3) TMI 1166
Maintainability of suit - specific performance of contract - suit was dismissed holding that the suit itself was barred by limitation and lack of relevant pleading and evidence disentitle the plaintiff-appellant to get a decree for specific performance and for re-conveyance of the suit property - time limitation - HELD THAT:- It is well settled proposition of law that in a suit for specific performance the plaintiff must be able to show that he is ready and willing to carry out those obligations which are in fact part of the consideration for the undertaking of the defendant. For the compliance of Section 16(c) of the Act it is not necessary for the plaintiff to aver in the same words used in the section i.e. ready and willing to perform the contract. Absence of the specific words in the plaint would not result in dismissal of the suit if sufficient fact and evidence are brought on record to satisfy the court the readiness and willingness to perform his part of the contract.
The readiness and willingness of person seeking performance means that the person claiming performance has kept the contract subsisting with preparedness to fulfill his obligation and accept the performance when the time for performance arrive.
The plaintiffs-appellants were always ready and willing to discharge their obligation and perform their part of the agreement. In our considered opinion, the undisputed facts and events referred, shall amount to sufficient compliance of the requirements of Section 16(c) of the Specific Relief Act - the impugned judgment passed by the High Court cannot be sustained in law.
Appeal allowed.
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2014 (3) TMI 1165
Termination of services of the respondents herein which were brought invoking the doctrine of pleasure as enshrined under Article 310 of the Constitution of India, 1950 - HELD THAT:- Indisputably, defence personnel fall under the category where President has absolute pleasure to discontinue the services. Further in our considered opinion as far as security is concerned, the safeguard available to civil servants under Article 311 is not available to defence personnel as judicial review is very limited. In cases where continuance of Army officers in service is not practicable for security purposes and there is loss of confidence and potential risk to the security issue then such officers can be removed under the pleasure doctrine. As a matter of fact, Section 18 of the Army Act is in consonance with the constitutional powers conferred on the President empowering the President to terminate the services on the basis of material brought to his notice. In such cases, the Army officers are not entitled to claim an opportunity of hearing. In our considered opinion the pleasure doctrine can be invoked by the President at any stage of enquiry on being satisfied that continuance of any officer is not in the interest of and security of the State. It is therefore not a camouflage as urged by the respondents.
Whether the order of dismissal of the earlier writ petitions and confirmation of the same by this court amounts to “Doctrine of Merger” and operates as res judicata against the present appeals? - HELD THAT:- The Union of India has been consistently contesting these petitions and this Court has found substance in the argument of the appellants that the High Court while delivering the judgment dated 21.12.2000 overlooked this important legal aspect of finality coupled with the doctrine of res judicata. In our considered opinion, this aspect cannot be ignored and the issue of fact cannot be re-opened in the instant case as well as has been done under the impugned judgment by relying on certain material which the High Court described to have been fraudulently withheld from the courts. In our opinion, fraud is not a term or ornament nor can it be presumed to exist on the basis of a mere inference on some alleged material that is stated to have been discovered later on. The discovery of a reinvestigated fact could have been a ground of review in the same proceedings, but the same cannot be in our opinion made the basis for re-opening the issue through a fresh round of litigation.
The High Court has committed a manifest error by not lawfully defining the scope of the fresh round of litigation on the principles of res judicata and doctrine of finality. To establish fraud, it is the material available which may lead to the conclusion that the failure to produce the material was deliberate or suppressed or even otherwise occasioned a failure of justice. This also, can be attempted if legally permissible only in the said proceedings and not in a collateral challenge raised after the matter has been finally decided in the first round of litigation.
Analysing entire facts of the case and the material produced in Court and upon an exhaustive consideration of the matter, we are of the definite opinion that the power of pleasure exercised by the President in terminating the services of the respondents does not suffer from any illegality, bias or malafide or based on any other extraneous ground, and the same cannot be challenged on the ground that it is a camouflage - the onus lay on the respondent- officers who alleged malafides. No credible evidence or material produced before the Court impels us to come to the conclusion that the order of termination is baseless or malafide.
Appeal allowed.
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2014 (3) TMI 1164
Interpretation of statute - recovery of charas - Chance recovery - State is in appeal against the acquittal of Sunil Kumar and the broad submission is that the recovery of charas from him was a chance recovery - whether the accidental or chance recovery of narcotic drugs during a personal or body search would attract the provisions of section 50 of the Narcotic Drugs and Psychotropic Substances Act, 1985? - HELD THAT:- In view of the Constitution Bench decision in Baldev Singh which endorsed the view taken in State Of Punjab v. Balbir Singh. [1994 (3) TMI 173 - SUPREME COURT] the personal search of Sunil Kumar resulting in the recovery of contraband did not violate Section 50 of the Act - Reliance was placed by the learned counsel on para 25 in Balbir Singh which was also endorsed by the Constitution Bench. It was submitted that it is only after a chance or accidental recovery of any narcotic drug or psychotropic substance by any police officer that the provisions of the Act would come into play. It is then that the empowered officer should be informed and that empowered officer should thereafter proceed to investigate the matter in accordance with the provisions of the Act.
Meaning of chance recovery - HELD THAT:- The expression “chance recovery” has not been defined anywhere and its plain and simple meaning seems to be a recovery made by chance or by accident or unexpectedly - In MOHINDER KUMAR VERSUS THE STATE, PANAJI, GOA [1995 (1) TMI 388 - SUPREME COURT] this Court considered a chance recovery as one when a police officer “stumbles on” narcotic drugs when he makes a search - Applying this to the facts of the present appeal, it is clear that the police officers were looking for passengers who were travelling ticketless and nothing more. They accidentally or unexpectedly came across drugs carried by a passenger. This can only be described as a recovery by chance since they were neither looking for drugs nor expecting to find drugs carried by anybody.
Applicability of Section 50 of the Act - HELD THAT:- It is true that Sunil Kumar behaved in a suspicious manner which resulted in his personal search being conducted after he disembarked from the bus. However, there is no evidence to suggest that before he was asked to alight from the bus, the police officers were aware that he was carrying a narcotic drug, even though the Chamba area may be one where such drugs are easily available - We are not in agreement with the view of the High Court that since the police officers had a positive suspicion that Sunil Kumar was carrying some contraband, therefore, it could be said or assumed that they had reason to believe or prior information that he was carrying charas or some other narcotic substance and so, before his personal or body search was conducted, the provisions of section 50 of the Act ought to have been complied with. The recovery of charas on the body or personal search of Sunil Kumar was clearly a chance recovery and, in view of Baldev Singh, it was not necessary for the police officers to comply with the provisions of section 50 of the Act.
The decision of the trial court convicting Sunil Kumar for an offence punishable under Section 20 of the Act is upheld - appeal allowed.
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2014 (3) TMI 1163
Penalty u/s 271D - contravention of the provisions of section 269SS - cash found during the survey which was surrendered - cash loans on various dates exceeding ₹ 20,000/- from relatives - reasonable cause u/s 273B - HELD THAT:- We find that actually the assessee has not taken any loan from the sons but excess cash which was found during the survey has been surrendered in the names of two sons of the assessee. Later on, when entries were required to be made against the surrendered income then the same was shown as loans from two sons.
In the case of CIT v Sunil Kumar Goel [2009 (3) TMI 131 - PUNJAB AND HARYANA HIGH COURT] wherein the assessee had accepted cash loans on various dates exceeding ₹ 20,000/- from relatives, penalty was held to be not imposable as held a family transaction, between two independent assessees, based on an act of casualness, specially in a case where the disclosure thereof was contained in the compilation of accounts, and which had no tax effect, established "reasonable cause" under section 273B. Also see SAINI MEDICAL STORE. [2005 (3) TMI 66 - PUNJAB AND HARYANA HIGH COURT].
Thus if the transactions are between relatives and without any malafide intention, then penalty is not leviable.
In this case before us, it is merely a technical breach of law because assessee might not have taken any loan but to record the surrender income, the same has been shown in the names of the sons - Decided in favour of assessee.
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2014 (3) TMI 1162
Computer software as clubbed with computers as the depreciable asset @60% - HELD THAT:- Both the CIT (Appeals) and the Tribunal found that the software cannot be seen in isolation and delinked from the computer. The reasons that are assigned is that what has been always understood as obvious is now apparent by the amendment. CIT(Appeals) found that in the case of the present assessee, the software cannot be worked in isolation. It has to be loaded on the computer. Therefore, in the present case, it is an intergral part of the computer. In these circumstances, the finding of fact does not require any interference in our appellate jurisdiction as the same does not raise any substantial question of law.
Exemption u/s 10A - income generated from training given to the customer for the use of the software - HELD THAT:- There is a finding of fact that the training activity is incidental to the sale made by the assessee company in respect of the products manufactured. Unless the users are trained, further sales are going to be affected. This receipt is therefore closely related to the manufacturing activity carried out by the assessee. In these circumstances and when the findings of fact have been confirmed by the Income Tax Appellate Tribunal, but for some different reasons that we are of the opinion that this Appeal does not give rise to any substantial question of law. Therefore, we are of the opinion that the income generated from training given to the customer for the use of the software in this case was eligible for exemption under section 10A.
TP Adjustment - computation of Arm's Length Price along with the price in relation to international transactions entered into by the assessee with it's subsidiaries as commission has been paid on customisation fees - argument was that the assessee has subsidiaries which act as a sale and marketing office of the assessee. The nature of the transaction is essentially of re-sale - HELD THAT:- The ultimate sale prices are negotiated by the subsidiaries directly with the end-customers and assessee's offers are negotiated. Therefore, when there are subsidiaries, but local independent distribution agents to whom a commission has been given then, the ultimate margin offered and paid to the subsidiaries is only 10%. In other words, there has not been found to be a variation of such nature as would enable the Assessing Officer to question the payment. In such circumstances, the finding of fact which has been rendered cannot be said to be vitiated by any perversity or any error of law apparent on the face of record.
The reasons assigned by the Tribunal in paragraph no.18 of the order are based essentially on the nature of the dealings. Once the subsidiaries are found to be collecting the customization work and which work was not being done by independent distributors, then, the justification has been rightly accepted. No substantial question of law
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