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Showing 61 to 80 of 2170 Records
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2019 (4) TMI 2118
Validity of Order passed u/s 263 - assessee was given right to develop and maintain Toll Road and also right to collect the Toll for specific period - depreciation on intangible asset - PCIT directed AO to pass fresh assessment order in respect of depreciation claim of assessee with special emphasis on cost of project as claimed by the assessee in the light of CBDT Circular No.9/2014 dated 23.04.2014 and the order passed in North-Karnataka Expressway [2014 (11) TMI 351 - BOMBAY HIGH COURT] - HELD THAT:- Hon’ble Delhi High Court in PCIT vs. Delhi Airport Metro Express Pvt. Ltd. (2017 (9) TMI 529 - DELHI HIGH COURT) held if the PCIT is of the view that Assessing Officer did not undertake any enquiry, it became incumbent on the PCIT to conduct such enquiry. All that PCIT has done in the impugned order is to refer to the Circular of CBDT and conclude “in case of assessee-company, the AO was duty bound to calculate and allow depreciation on the BOT in conformity of the CBDT Circular 9/2014 but the AO failed to do so. Therefore, the order of the AO is erroneous insofar as prejudicial to the interest of revenue”. The Hon’ble High Court took the view that this can hardly constitute the reasons required to be given by the PCIT to justify the exercise of jurisdiction under section 263.
If the assessee has wrongly claimed depreciation on asset like land and building, it was incumbent upon the PCIT to undertake an enquiry as regards which of the assets were purchased and installed by assessee out of his own fund during the A.Y. in question and, which were those that were handed over to DMRC. That basic exercise of determining to what extent, the deprecation was claimed in excess has not been undertaken by ld. PCIT and the Hon’ble High Court upheld the decision of Tribunal in setting-aside the order passed under section 263 of the Act.
We are of the view that during the assessment, the Assessing Officer has taken a possible view in allowing depreciation on intangible asset. Therefore, in our view, the order passed by Assessing Officer is not erroneous. Thus, the twin condition as provided under section 263 of the Act was not fulfilled.
Even otherwise, we are of the view that the issues on which the assessment order was set-aside has already been decided in West Gujarat Expressway Ltd.[2015 (5) TMI 305 - ITAT MUMBAI], Rohan & Rajdeep Infrastructure [2018 (2) TMI 2073 - ITAT PUNE] and Progressive Construction Ltd. [2017 (3) TMI 1167 - ITAT HYDERABAD]. The Special Bench of Hyderabad Tribunal and coordinate benches of Pune and Mumbai after considering the decision of North Karnataka Expressway Ltd [2014 (11) TMI 351 - BOMBAY HIGH COURT]and CBDT Circular No. 9/2014 allowed depreciation on intangible asset. Therefore, we are of the considered view that the ld. PCIT was not justified in revising the assessment order - Decided in favour of assessee.
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2019 (4) TMI 2117
Levy of penalty u/r 26 of Central Excise Rules, 2002 - Availment of fraudulent CENVAT Credit - issuance of bogus LRs for transport of copper - HELD THAT:- From the plain reading of the Rule 26, it is clear that merely for making bogus LRs, the action of the appellant does not fall as an offence under Rule 26. The rule 26 was subsequently amended from 01.03.2007 effective from 01.04.2007. Since the period involved is prior to the said amendment, the penalty under Rule 26 cannot be imposed only for issuance of bogus LRs.
This issue is covered by the judgment of Hon’ble Punjab High Court in case of COMMISSIONER CENTRAL EXCISE, COMMISSIONERATE VERSUS M/S MINI STEEL TRADERS [2014 (6) TMI 419 - PUNJAB & HARYANA HIGH COURT] where it was held that where a person merely arranges modvatable document to the manufacturer without actual delivery of goods, penalty could not be imposed under rule 209A. Rule 26(2) of Central Excise Rules, 2002 prior to amendment on 1.3.2007 is akin to Rule 209A.
Penalty set aside - appeal allowed.
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2019 (4) TMI 2116
Suit for possession of the subject land - possession of property but devise referred to under explanation to Section 14(1) of the Act, 1956 not existing - pre-existing right over the subject property of a widow - HELD THAT:- In Eramma v. Veerupana and Ors. [1965 (11) TMI 148 - SUPREME COURT], the widow was in possession of the half of the property of her late husband and claimed her absolute ownership by virtue of Section 14 of the Act, 1956 which was negated by this Court for the reason that the widow was not holding possession over the subject property in question under any of the devise indicated in the explanation to Section 14(1) of the Act, 1956.
Wherein V. Tulasamma and Ors. v. Sesha Reddy(Dead) by LRs [1977 (3) TMI 156 - SUPREME COURT], it was an admitted case before the Court that the suit property came in possession of the widow under a compromise in execution of decree of the Court, restricting her right of alienation in recognition of right to maintenance, having pre-existing right over the subject property in question on the date the Act, 1956 came into force(i.e. 17th June, 1956). In that reference, the claim was considered by this Court and held that the pre-existing right of the widow on the date of the commencement of the Act, 1956 will get her the absolute rights over the subject property.
In the instant case, the Appellant although was holding possession but not under any of the devise referred to under explanation to Section 14(1) of the Act, 1956 and mere possession would not confer pre-existing right of possession over the subject property to claim full ownership rights after the Act, 1956 came into force by operation of law and this what was considered and negated by the High Court in the impugned judgment.
The appeal fails and is accordingly dismissed.
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2019 (4) TMI 2115
Territorial Jurisdiction - woman forced to leave her matrimonial home on account of acts and conduct that constitute cruelty - legal process can be initiated within the jurisdiction of the courts where she is forced to take shelter with the parents or other family members or not.
Whether the exception carved out by Section 179 would have any application to confer jurisdiction in the courts situated in the local area where the parental house of the wife is located?
HELD THAT:- Section 498A of the Indian Penal Code was introduced by the Criminal Law (second amendment) Act, 1983. In addition to the aforesaid amendment in the Indian Penal Code, the provisions of Sections 174 and 176 of the Code of Criminal Procedure, 1973 relating to inquiries by police in case of death by suicides and inquiries by magistrates into cause of such deaths were also amended. Section 198A was also inserted in the Code of Criminal Procedure with regard to prosecution of offences Under Section 498A. Further by an amendment in the first Schedule to the Code of Criminal Procedure the offence Under Section 498A was made cognizable and non-bailable. Of considerable significance is the introduction of Section 113A in the Indian Evidence Act by the Criminal Law (second amendment) Act, 1983 providing for presumption as to abetment of suicide by a married woman to be drawn if such suicide had been committed within a period of seven years from the date of marriage of the married woman and she had been subjected to cruelty.
"Cruelty" which is the crux of the offence Under Section 498A Indian Penal Code is defined in Black's Law Dictionary to mean "The intentional and malicious infliction of mental or physical suffering on a living creature, esp. a human; abusive treatment; outrage (Abuse, inhuman treatment, indignity)". Cruelty can be both physical or mental cruelty. The impact on the mental health of the wife by overt acts on the part of the husband or his relatives; the mental stress and trauma of being driven away from the matrimonial home and her helplessness to go back to the same home for fear of being ill-treated are aspects that cannot be ignored while understanding the meaning of the expression "cruelty" appearing in Section 498A of the Indian Penal Code - The Protection of Women from Domestic Violence Act, as the object behind its enactment would indicate, is to provide a civil remedy to victims of domestic violence as against the remedy in criminal law which is what is provided Under Section 498A of the Indian Penal Code. The definition of the Domestic Violence in the Protection of Women from Domestic Violence Act, 2005 contemplates harm or injuries that endanger the health, safety, life, limb or well-being, whether mental or physical, as well as emotional abuse.
The provisions contained in Section 498A of the Indian Penal Code, undoubtedly, encompasses both mental as well as the physical well-being of the wife. Even the silence of the wife may have an underlying element of an emotional distress and mental agony. Her sufferings at the parental home though may be directly attributable to commission of acts of cruelty by the husband at the matrimonial home would, undoubtedly, be the consequences of the acts committed at the matrimonial home. Such consequences, by itself, would amount to distinct offences committed at the parental home where she has taken shelter. The adverse effects on the mental health in the parental home though on account of the acts committed in the matrimonial home would, in our considered view, amount to commission of cruelty within the meaning of Section 498A at the parental home. The consequences of the cruelty committed at the matrimonial home results in repeated offences being committed at the parental home. This is the kind of offences contemplated Under Section 179 Code of Criminal Procedure which would squarely be applicable to the present case as an answer to the question raised.
The courts at the place where the wife takes shelter after leaving or driven away from the matrimonial home on account of acts of cruelty committed by the husband or his relatives, would, dependent on the factual situation, also have jurisdiction to entertain a complaint alleging commission of offences Under Section 498A of the Indian Penal Code - Appeal disposed off.
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2019 (4) TMI 2114
Further investigation once order of discharge given - whether once the learned Magistrate passes an order of discharge of the Accused, whether thereafter is it permissible for the Magistrate to order further investigation and direct the investigating officer to submit the report? - HELD THAT:- In the celebrated judgment of this Court in the case of BHAGWANT SINGH VERSUS. COMMISSIONER OF POLICE [1985 (4) TMI 327 - SUPREME COURT] which has been subsequently followed consistently, this Court had the occasion to consider the procedure to be followed by the learned Magistrate and/or the options which are available to the learned Magistrate at the time when the report/challan/charge-sheet is filed by the investigating officer before him. In that judgment, this Court in para 4 has observed and held We are accordingly of the view that in a case where the Magistrate to whom a report is forwarded Under Sub-section (2)(i) of Section 173 decides not to take cognizance of the offence and to drop the proceeding or takes the view that there is no sufficient ground for proceeding against some of the persons mentioned in the first information report, the Magistrate must give notice to the informant and provide him an opportunity to be heard at the time of consideration of the report.
In the case of MINU KUMARI AND ANR VERSUS THE STATE OF BIHAR AND ORS [2006 (4) TMI 534 - SUPREME COURT], it is observed by this Court that when a report forwarded by the police to the Magistrate Under Section 173(2)(i) is placed before him, several situations arise. The report may conclude that an offence appears to have been committed by a particular person or persons and in such a case, the Magistrate may either (1) accept the report and take cognizance of the offence and issued process, or (2) may disagree with the report and drop the proceedings, or (3) may direct further investigation Under Section 156(3) and require the police to make a further report.
Considering the law laid down by this Court in the aforesaid decisions and even considering the relevant provisions of the Code of Criminal Procedure, namely Sections 167(2), 173, 227 and 228 of the Code of Criminal Procedure, what is emerging is that after the investigation is concluded and the report is forwarded by the police to the Magistrate Under Section 173(2)(i) of the Code of Criminal Procedure, the learned Magistrate may either (1) accept the report and take cognizance of the offence and issue process, or (2) may disagree with the report and drop the proceedings, or (3) may direct further investigation Under Section 156(3) and require the police to make a further report. If the Magistrate disagrees with the report and drops the proceedings, the informant is required to be given an opportunity to submit the protest application and thereafter, after giving an opportunity to the informant, the Magistrate may take a further decision whether to drop the proceedings against the Accused or not. If the learned Magistrate accepts the objections, in that case, he may issue process and/or even frame the charges against the Accused - Section 173(8) of the Code of Criminal Procedure confers power upon the officer-in-charge of the police station to further investigate and submit evidence, oral or documentary, after forwarding the report Under Sub-section (2) of Section 173 of the Code of Criminal Procedure. Therefore, it is always open for the investigating officer to apply for further investigation, even after forwarding the report Under Sub-section (2) of Section 173 and even after the discharge of the Accused. However, the aforesaid shall be at the instance of the investigating officer/police officer-in-charge and the Magistrate has no jurisdiction to suo moto pass an order for further investigation/reinvestigation after he discharges the Accused.
In the instant case, the investigating authority did not apply for further investigation and that the learned Magistrate suo moto passed an order for further investigation and directed the investigating officer to further investigate and submit the report, which is impermissible under the law. Such a course of action is beyond the jurisdictional competence of the Magistrate. Therefore, that part of the order passed by the learned Magistrate ordering further investigation after he discharges the Accused, cannot be sustained and the same deserves to be quashed and set aside.
The impugned judgment as well as that part of the order passed by the learned Magistrate directing the investigating officer for further investigation and submit the report, is hereby quashed and set aside - Appeal allowed.
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2019 (4) TMI 2113
Misuse of police power and acting as a 'super-censor' sitting atop the CBFC - violating the Petitioners' fundamental rights guaranteed Under Articles 14, 19(1)(a), 19(1)(g) and 21 of the Indian Constitution through the Kolkata Police which is under the Department of Home - utterly unlawful obstruction of the public exhibition of their Bengali feature film.
HELD THAT:- The police are not in a free society the self-appointed guardians of public morality. The uniformed authority of their force is subject to the Rule of law. They cannot arrogate to themselves the authority to be willing allies in the suppression of dissent and obstruction of speech and expression. The Joint Commissioner was not unmindful of the fact that the film had been slated for release within a few days of his communication in theatres across the city of Kolkata and the State. If there was any doubt whatever over the entitlement of the producers to have the film exhibited, it was laid to rest when the producers immediately informed him of the film being CBFC certified. The statutory authority to certify a film for public exhibition is vested in the CBFC under the provisions of the Cinematograph Act 1952. Sections 4, 5, 5A and 5B provided a statutory code for the examination and certification of films for public exhibition.
An excess or abuse of statutory power is amenable to constitutional guarantees which protect the citizen against arbitrary state action. The danger which this case exemplifies is the peril of subjecting the freedom of speech and expression of the citizen to actions which are not contemplated by the statute and lie beyond the lawful exercise of public power. All exercises of authority in pursuance of enabling statutory provisions are amenable to statutory remedies and are subject to judicial oversight under a regime of constitutional remedies. The exercise of statutory authority is not uncontrolled in a regime based on the Rule of law. But what do citizens who have a legitimate right to exhibit a film confront when they are told that a film which is duly certified and slated for release is unceremoniously pulled off the exhibiting theatres without the authority of law? Such attempts are insidious and pose a grave danger to personal liberty and to free speech and expression - Contemporary events reveal that there is a growing intolerance: intolerance which is unaccepting of the rights of others in society to freely espouse their views and to portray them in print, in the theatre or in the celluloid media. Organised groups and interests pose a serious danger to the existence of the right to free speech and expression. If the right of the play-wright, artist, musician or actor were to be subjected to popular notions of what is or is not acceptable, the right itself and its guarantee under the Constitution would be rendered illusory. The true purpose of art, as manifest in its myriad forms, is to question and provoke. Art in an elemental sense reflects a human urge to question the assumptions on which societal values may be founded.
Power has been entrusted to the state by the people under a written Constitution. The state holds it in trust and its exercise is accountable to the people. The state does not entrust freedoms to the people: the freedoms which the Constitution recognizes are inseparable from our existence as human beings. Freedom is the defining feature of human existence. Freedoms are not subject to power. Public power is assigned by the people to government. Ours is a controlled Constitution, a Constitution which recognizes the fullest element of liberty and freedom and of the answerability of power to freedom. The views of the writer of a play, the metre of a poet or the sketches of a cartoonist may not be palatable to those who are criticized. Those who disagree have a simple expedient: of not watching a film, not turning the pages of the book or not hearing what is not music to their ears. The Constitution does not permit those in authority who disagree to crush the freedom of others to believe, think and express.
A producer of a film which has been certified by the CBFC needs to embark upon meticulous arrangements including contracts for the exhibition of the film. The wielding of extra constitutional authority is destructive of legitimate expectations. Under the constitutional scheme, restrictions can only be imposed by or under a law which is made by the State. The State of West Bengal has informed the Court that it had not taken recourse to its statutory powers either under state or union legislation. If that be so, there has to be some explanation forthcoming before the Court why the film was simultaneously removed from the theatres, at one stroke, shortly after release. The apprehension of the Petitioners that this was an action which followed on the letter dated 11 February 2019 of the Joint Commissioner of Police is not unfounded - The police are entrusted with enforcing law. In the present case, the West Bengal police have overreached their statutory powers and have become instruments in a concerted attempt to silence speech, suborn views critical of prevailing cultures and threaten law abiding citizens into submission.
The freedoms which are guaranteed by Article 19 are universal. Article 19(1) stipulates that all citizens shall have the freedoms which it recognises. Political freedoms impose a restraining influence on the state by carving out an area in which the state shall not interfere. Hence, these freedoms are perceived to impose obligations of restraint on the state. But, apart from imposing 'negative' restraints on the state these freedoms impose a positive mandate as well. In its capacity as a public authority enforcing the Rule of law, the state must ensure that conditions in which these freedoms flourish are maintained.
Mandamus issued restraining the state from taking recourse to any form of extra constitutional means to prevent the lawful screening of the feature film Bhobishyoter Bhoot. The state shall specifically ensure that the properties of the theatre owners who exhibit the film are duly protected as are the viewers against attempts on their safety - As a consequence of the pulling off of the film from the theatres where it was screened on 16 February 2019, the Petitioners have suffered a violation of their fundamental right to free speech and expression and of their right to pursue a lawful business. This has been occasioned by the acts of commission and, in any event, of omission on the part of the state in failing to affirm, fulfill and respect the fundamental freedoms of the Petitioners.
Petition allowed.
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2019 (4) TMI 2112
Direction to de-attach the immovable property belonging to the corporate debtor - handing over original title deeds of the immovable properties to the Resolution Professional - HELD THAT:- It is clear from the reading of the aforesaid observations of Hon'ble the Supreme Court in PR. COMMISSIONER OF INCOME TAX VERSUS MONNET ISPAT AND ENERGY LTD. [2018 (8) TMI 1775 - SC ORDER] that the Insolvency & Bankruptcy Code would override anything inconsistent contained in any other enactment including the Income Tax Act Section 238 is a non-obstante clause with widest amplitude. The Income Tax Department has already de-attached the properties belonging to the corporate debtor and accordingly, the possession by the Resolution Professional may be taken.
It is directed that the title deed be handed over to the Resolution Professional at the earliest but not later than ten days. However, in respect of SEBI-respondent No. 1 the stand taken is that it is bound by the directions issued by the Securities Appellate Tribunal. The aforesaid stand is in the teeth of the observation of Hon'ble the Supreme Court in Monnet Ispat case (Supra). There is only one condition imposed by Hon'ble the Supreme Court that the code is to override anything inconsistent in any other enactment. It is obvious that various provisions in the Insolvency & Bankruptcy Code would require the Resolution Professional to run the affairs of corporate debtor on day to day basis and to take possession of the property belonging to the corporate debtor.
In view of the provisions of non-obstante clause of Section 238 of the Code, any right under any other law cannot come in the way of the Insolvency & Bankruptcy Code. In the absence of records and possession of the property belonging to the corporate debtor, the Resolution Professional would not be able to perform his statutory duties in a time bound manner and there would be no possibility of any resolution which is the primary object of the Insolvency & Bankruptcy Code as emphasised by the Hon'ble Supreme Court in various judgments including ARCELORMITTAL INDIA PRIVATE LIMITED VERSUS SATISH KUMAR GUPTA & ORS. [2018 (10) TMI 312 - SUPREME COURT] and M/S. INNOVENTIVE INDUSTRIES LTD. VERSUS ICICI BANK & ANR. [2017 (9) TMI 58 - SUPREME COURT].
SEBI is directed to de-attach the properties of the corporate debtor and hand over the possession to the Resolution Professional along with all its record so as to enable the Resolution Professional to conduct the CIR Process expeditiously in accordance with the time line given in the Code.
Application allowed.
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2019 (4) TMI 2111
Benami transaction - Real owner of property - as contended that since the subject property though in the name of paternal grandmother of the plaintiff, was purchased from the funds received by her husband (who was the paternal grandfather of the plaintiff) for giving up his share in property which was a property of the HUF, and the plaintiff, being the son of defendant no. 3 who in turn is the son of paternal grandmother of the plaintiff has a share in the property - plea of the plaintiff in this suit, of Kanta Batra being the benami owner of the property and HUF of K.N. Batra being the real owner of the property, is in the teeth of the said law - HELD THAT:- Once it is held that the property No. A-2/27, Janakpuri, New Delhi, in law and on the averments in the plaint, cannot be the property of the HUF, the question of the plaintiff having any share therein would not arise. On the demise of Kanta Batra, in the absence of any Will, the said property would devolve on her heirs in accordance with Section 15 of the Hindu Succession Act upon her sons and daughters and not upon the plaintiff who is the grandson of Kanta Batra.
It may also be noticed that none other than the plaintiff including the father of the plaintiff i.e. the defendant no. 3 is claiming the property to be of the HUF. On the contrary, the father of the plaintiff is claiming the property to be the sole property of Kanta Batra and is claiming exclusive right thereto under a document stated to be the last Will of Kanta Batra. The claim if any of the plaintiff to the property can be only out of the share of his father and once the father of the plaintiff himself is not supporting the plea of the plaintiff, it is quite obvious that the present suit has been filed by the plaintiff in collusion with his father and for the eventuality of the father of the plaintiff failing in the Will set up by him.
The suit is thus dismissed with costs payable by the plaintiff to the defendants no. 1, 2 & 4 of Rs. 30,000/-.
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2019 (4) TMI 2110
TP adjustment done to manufacturing segment - not considering export incentives as part of operating revenues of appellant and comparables or reducing from cost to determine operating profits - HELD THAT:- As by respectfully following this judgment of Welspun Zucchi Textiles Ltd. [2017 (1) TMI 1037 - BOMBAY HIGH COURT] we hold that the export incentives should be included in the operating profit of the assessee as well as the comparables. But it should be ensured that such export incentive is in respect of turnover of the present year only because if the export incentive is relatable to the turnover of an earlier year then the same cannot be included in the present year profit for TP analysis because in that situation, the profit will remain included in the numerator, but the corresponding turnover will not remain included in the denominator and this will give absurd result. Hence we direct the AO/TPO to decide the issue afresh - Ground no. 4 is allowed for statistical purposes.
Non considering the under utilization of manufacturing capacities of your appellant and the resulting idle costs - HELD THAT:- As relying on assessee own case for ay 2009-10 directed the A.O./TPO/A.O. to consider the claim of the assessee for the purpose of giving adjustment on account of low capacity utilization. We make it clear that the adjustment is only on account of cost attributable to idle capacity for the year under consideration. Accordingly, the assessee has to provide all the details of capacity utilization of assessee as well as comparable for computation of adjustment if any - we restore back this matter to the file of AO/TPO with similar directions. Ground no. 5 is also allowed for statistical purposes.
Application of functional similarity filter while rejecting companies selected by appellant as comparables - HELD THAT:- As as per clause (c) of Para 3.7, this is admitted position that this was the dispute raised before DRP that the TPO has committed errors in selection of comparable companies. TPO has wrongly selected 10 companies as comparables whose businesses and operations have nothing in common with that of the assessee.
From the decision of DRP we find that this issue was decided by DRP that TNMM is the most appropriate method and there is no decision on any other aspect of the issue in dispute. In Para 3.9 of DRP directions as reproduced above, the decision is with regard to charging notional interest on the guarantee commission and in this Para also, there is no decision regarding selection of comparables. Hence we feel it proper to restore the matter back to the file of DRP for fresh decision. Ground no. 6 is also allowed for statistical purposes.
Selection of Indfrag Limited as comparable - HELD THAT:- For this company it is stated that rental income of Rs. 68 Lakhs has been considered as operating revenues. In the impugned order of DRP, there is no decision on this aspect that as to whether the same should be included in operating revenue or not and for this issue also, we restore the matter back to DRP for fresh decision. Ground no. 7 is also allowed for statistical purposes.
Risk adjustment - HELD THAT:- As decided in own case assessee is claiming the risk adjustment because of the majority of the sale to the AE in comparison to the comparables making sales to the third party. The Id. AR of the assessee has submitted that the assessee has furnished all the requisite details. Risk adjustment is one of the component to be taken into account for FAR analysis. Therefore the TPO/A.O./A.O is directed to consider the claim of risk adjustment on the basis of the details to be furnished by the assessee
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2019 (4) TMI 2109
Fraud - mis-appropriation - falsification of records - conspiracy - It is alleged in the complaint that the fabric stocks worth about Rs. 8,32,14,000/- hypothecated to the State Bank of India was removed by the petitioners between 2014 to November 2016, without the knowledge and permission of the bank and other Directors - mismanagement of the sister group of companies - Suppression of facts - HELD THAT:- Admittedly, there is a dispute between them regarding the management which has culminated into MOU, later not honoured by both the parties. The 1st petitioner has made a specific declaration that it has become invalid. In the said circumstances, when any member of the company has any grievance or complaint about oppression or mismanagement, he should have resorted to an application to the tribunal as contemplated under Section 241 of the Companies Act-2013.
Under Section 206 of the Companies Act-2013, the Registrar of the Company, based on the information received by him can seek for explanation, production of document and conduct enquires. If the Registrar is satisfied on the basis of information available with him or furnished to him or on a representation made to him by any person that the business of a company is being carried on for a fraudulent or unlawful purpose or not in compliance with the provisions of this Act, he can proceed with inquiry - Thus, it is very clear that while dealing with the affairs of a company, if any person abuse the position with intend to deceive, to gain undue advantage from, or to injure the interests of, company or its shareholders or its creditors or any other person, he deemed to have committed fraud.
In the complaint, it is not only alleged that by his act of commission and omission the petitioners had caused loss to the 2nd respondent but also it is alleged that the bank has declared the company as NPA [Non Performing Asset]. It is alleged that the mismanagement has caused loss of several crores, therefore interest of the bank is also involved. If the allegations are true, the gravity of the offence is grave and fit to be investigated by the Serious Fraud Investigation Organisation which is empowered to investigate offence of this nature, as per Section 212 of the Companies Act - From the complaint, as well as the petition, there is enough material to infer that the mismanagement does not stop with one company namely M/s. M.C. Spinners Pvt. Ltd., but also all other sister concern, in which the 1st petitioner and 2nd respondent, their family members are involved. The forgery alleged in the transfer of vehicles also not confined to the petitioners and M/s. M.C. Spinners Pvt. Ltd.
This Court of the opinion that the complaint under Section 156(3) of the Cr.P.C. before the Judicial Magistrate and seeking registration of the complaint by the Inspector of Police, CCB, Coimbatore, itself an outcome of mala fide intention to pressurize the petitioners to part away their right of Managing the Company. Having resorted to the provisions of Companies Act and filed a C.P. Nos. 27 and 28 of 2015, before the Company Law Board, Chennai, it is clear that the 2nd respondent and his sons, who are the shareholders and Directors of sister concern are aware of the new enactment and the redressal procedures contemplated under the new Act.
The Criminal Original Petition is Allowed.
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2019 (4) TMI 2108
Delay in payment to Income Declaration Scheme - Condonation of delay in making payment of first installment by the defaulters who have not paid any amount will now or further extending the date beyond the due date for regularising/ facilitating the payment of liabilities under IDS - power of the board u/s 119(2) - HELD THAT:- Issue notice.
Petitioner, to deposit the amount of Rs.32,11,875/- with the Registry of this Court during the course of the day, which amount shall be kept in an interest bearing short term fixed deposit of a Nationalised Bank
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2019 (4) TMI 2107
Anti-Competitive agreements - Constitutional Validity of provisions of Sections 22(3), 27(b), 53A, 53B, 53C, 53D, 53E, 53F and 61 of Competition Act, 2002 and the notification dated 31.03.2011 amending Regulation 48 (1) of the Competition Commission of India (General) Regulations, 2009 and in relation to the appellate remedies to the Competition Appellate Tribunal (COMPAT) - indulging in abusive behavior in regard to the spare parts market.
HELD THAT:- This Court notes in conclusion, that the Competition Act is an attempt by Parliament to improve – in the light of experience gained from a modern liberalized economy and corresponding state retreat in key areas of economic activities, the prevalent laws governing concentration of market power. The MRTP Act, 1969 was its first attempt (in a closed economy) to control monopolies and restrictive practices. In the light of experience gained and the felt necessities of the changed times – and having seen the experience gained by other nations, in the course of their legislation with competition, the Act was introduced, with due deliberation. Recent decisions have emphasized the importance of the CCI in imbuing the market place with the culture of competition, and even underlined that sectoral regulators‟ decisions or regulations (within the frame works of their parent legislations) cannot foreclose enquiry and consequential action by the CCI in its overarching concerns with respect to market domination and anti-competitive behaviour of erring entities.
In Competition Commission of India v Bharti Airtel Limited And Ors. [2018 (12) TMI 1683 - SUPREME COURT] this was emphasized and underlined having taken note of the skillful exercise which the TRAI is supposed to carry out, such a comment vis-a-vis TRAI may not be appropriate. No doubt, as commented by the Planning Commission in its report of February, 2007, a sectoral regulator, may not have an overall view of the economy as a whole, which the CCI is able to fathom. Therefore, our analysis does not bar the jurisdiction of CCI altogether but only pushes it to a later stage, after the TRAI has undertaken necessary exercise in the first place, which it is more suitable to carry out.
Parliamentary effort to innovate and legislate new market regulations, gained in the light of previous experience and teaching gained from the experience in other countries, led it to enact the Competition Act. The raison d‘etre of such laws is its objective of promoting competition, - and eliminating disparities that would ensue in the event of market dominance by a few, resulting in concentration of resources of the nation (which Article 39 of the Constitution of India, enjoins the State to avoid). Speaking of the Sherman Anti-Trust Act, in Essential Communications Sys, Inc. v AmTel & Tel Co the third Federal Circuit Appellate Court held The Sherman Act, embodying as it does a preference for competition, has been since its enactment almost an economic constitution for our complex national economy. A fair approach in the accommodation between the seemingly disparate goals of regulation and competition should be to assume that competition, and thus antitrust law, does operate unless clearly displaced.
The need to experiment and bring in new legislation to face the challenges of the changing times and the legislature duty to do so- as well as the correct approach that courts should adopt was outlined in New State Ice Co. v. Liebman, where Justice Brandeis stated The Court must therefore adjudge the constitutionality of such legislation by the generality of its provisions and not by its crudities or inequities or by the possibilities of abuse of any of its provisions. If any crudities, inequities or possibilities of abuse come to light, the legislature can always step in and enact suitable amendatory legislation. That is the essence of pragmatic approach which must guide and inspire the legislature in dealing with complex economic issues.
The following conclusions are recorded and directions issued:
(i) Section 22(3) of the Competition Act (except the proviso thereto) is declared unconstitutional and void;
(ii) Section 53E (prior to the amendment in 2017) is declared unconstitutional and void: however, this is subject to the final decision of the Supreme Court in the writ petitions challenging the Finance Act, 2017;
(iii) All other provisions of the Competition Act are held to be valid subject to the following orders:
(a) The CCI shall frame guidelines with respect to the directions contained in para 179 of this judgment, i.e. to ensure that one who hears decides is embodied in letter and spirit in all cases where final hearings are undertaken and concluded. In other words, once final hearings in any complaint or batch of complaints begin, the membership should not vary- it should preferably be heard by a substantial number of 7 or at least, 5 members.
(b) The Central Government shall take expeditious steps to fill all existing vacancies in the CCI, within 6 months;
(c) The CCI shall ensure that at all times, during the final hearing, the judicial member (in line with the declaration of law in Utility Users Welfare Association, (supra) is present and participates in the hearing;
(d) The parties should in all cases, at the final hearing stage, address arguments, taking into consideration the factors indicated in Excel Crop Care [2017 (5) TMI 542 - SUPREME COURT] and any other relevant factors; they may also indicate in their written submissions, or separate note, of submissions, to the CCI, why penalty should not be awarded, and if awarded, what should be the mitigating factors and the quantum- without prejudice to their other submissions.
(iv) Since the petitioners had not availed the remedy of appeal (and had approached this Court) it is open to such of them who wish to do so, to approach the Appellate Tribunal, within 6 weeks; in such eventuality, the Appellate Tribunal shall entertain their appeals and decide them on their merits in accordance with law, unhindered by the question of limitation.
The writ petitions are partly allowed.
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2019 (4) TMI 2106
Constitutional Validity of provisions of Section 3AA of the Bihar Entertainment Tax Act, 1948 - It is the complaint of the petitioner that on some misconception, mis-appreciation and misconstruction of the legal position that the respondents started coercing the petitioner to taxation, with effect from the 4th quarter of the Assessment Year 2015-16 (01.01.2016 to 31.03.2016) and under the assessment orders put to challenge they have realized such amount which is even greater than the amount assessed for the period in question.
HELD THAT:- Section 3AA of ‘the Act’ opens with a non-obstante clause to have an overriding effect over the other provisions of ‘the Act’ to levy a consolidated amount of tax not exceeding Rs. One hundred and not below Rs. Ten, payable every month for each connection given to a subscriber by the proprietor of any cable service or cable television network and which amount of tax is to be paid by the proprietor of an entertainment to the State Government - The enabling power vested in the Assessing Authority under ‘the Act’ is to be exercised in the manner prescribed by ‘the Rules’ and which have since been framed vide rules 19A and 23A of ‘the Rules’.
Section 3AA of ‘the Act’ read alongside rules 19A and 23A of ‘the Rules’ makes the taxing event at the point where the entertainment reaches a subscriber through the cables. Now whether it is the ‘MSO’ like the petitioner who not only is providing such entertainment to the subscriber directly but also through the Local Cable Operators or the Local Cable Operators, when providing such service to the subscribers, is to be termed as a ‘proprietor’, is a matter of adjudication in the backdrop of the statutory provisions - there are no confusion that the assessment orders passed for the assessment years put to question in this writ petition lacks foundation because it is not based on the number of subscribers rather is based upon the number of set top boxes, the details of which was available in the register of the petitioner. This fact situation that the assessment orders are based on set top boxes and are not relatable to the subscribers as mandated under section 3AA of ‘the Act’ read alongside the ‘Rules’ framed thereunder, is not in contest rather is an admitted position.
The Assessing Authority has failed in his discharge of functions as a quasi-judicial authority to assess the tax in the manner provided under ‘the Act’ rather he has taken a short route to extract money from the petitioner by resorting to special mode of recovery without even identifying the subscribers for the purpose of such levy - the assessment orders passed by the Assistant Commissioner, Commercial Taxes, Patna North Circle, Patna for the Assessment year 2015-16 (4th quarter i.e. 01.01.2016 to 31.03.2016), Assessment year 2016-17 (all 4 quarters) and for the 1st quarter of the Assessment year 2017-18 (01.04.2017 to 30.06.2017) some of which are impugned at Annexure 2 series together with the demand notice bearing No.298 dated 26.03.2019 impugned at Annexure 16 to the writ petition are quashed.
The matter is remitted to the Assistant Commissioner, Commercial Taxes, Northern Circle, Patna to proceed afresh and for its disposal in accordance with law.
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2019 (4) TMI 2105
Seeking leave to cross examine the first respondent-complainant - Dishonour of Cheque - petitioner failed to comply with the notice and has even failed to issue any reply to the said notice - HELD THAT:- As has been noticed by the learned Magistrate, in normal circumstances, a party is not required to seek leave to cross examine the witness of an adversary. However, the present matter is governed by the law laid down by the Hon'ble Supreme Court in the case of INDIAN BANK ASSOCIATION AND OTHERS VERSUS UNION OF INDIA AND OTHERS [2014 (5) TMI 750 - SUPREME COURT] which has been reiterated in a recent decision of the Supreme Court in the case of Meters and Instruments Private Limited & anr. vs. Kanchan Mehta, [2017 (10) TMI 218 - SUPREME COURT].
It can thus be seen that the trial of the offence under Section 138 of the Act is a class apart and the Magistrate is required to conduct the trial normally in a summary way and in accordance with the procedure laid down for summary trials and in the light of the directions issued by the Supreme Court in the case of Indian Bank Association and Meters and Instruments Private Limited.
Coming to the present case, the impugned order cannot be faulted going by the casual nature in which the application, exhibit 12 was filed and the relief was sought. Perhaps, faced with this difficulty, the learned Counsel for the petitioner has sought liberty to file a fresh application setting out the defence and for a direction to the learned Magistrate to decide it afresh.
The first point of time when the accused has an opportunity to set out his defence is when he sends a reply to the statutory notice of the complainant. The second such opportunity to set out the grounds is in the application seeking leave to cross examine the complainant. In a given case, the accused can also disclose such grounds during the course of the hearing of the application and in answer to the questions which may be posed by the learned Magistrate as is permissible - liberty granted to the petitioner to file a fresh application as the possibility of inventing a defence in the given circumstances, cannot be ruled out in this case.
Petition dismissed.
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2019 (4) TMI 2104
CIT(A) passed ex parte order - Addition u/s 69 - HELD THAT:- From perusal of the order of the ld. CIT(A), it is clear that he has not decided the issue on merit and had just upheld the order of the A.O. on the plea that the appellate authority cannot substitute its own judgment in place of the judgment of the A.O. unless it is shown that the judgment of the A.O. was biased, irrational, vindictive or capricious.
As per provisions of Section 250(6) CIT(A) has to pass order in writing giving reasons for his conclusion. However, the order passed by the ld. CIT(A) are not in terms of provisions of Section 250(6) of the Act. Therefore, in the substantial interest of justice, we set aside the ex parte order of the CIT(A) and restore the matter back to the file of the CIT(A) for deciding the issue afresh after providing reasonable and effective hearing to the assessee. The assessee is also directed to appear before the ld. CIT(A) within a period of two months from the date of receipt of this order. We order accordingly.
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2019 (4) TMI 2103
TP Adjustment - action of the CIT(A) in accepting the segment reporting prepared by the assessee company - Revenue alleged that the segment reporting was prepared by the assessee company without having regard to the nature of business - HELD THAT:- As decided in Lummus Technology Heat Transfer BV [2014 (3) TMI 23 - ITAT DELHI] wherein it was held that segmental results could not be rejected on the ground that the same was not audited. The TPO/DRP was required to examine the segmental results if the same were maintained in the ordinary course of business. On perusal of, inter alia, the aforesaid decisions, in the matter of CSR Technology (India) (P.) Ltd [2017 (12) TMI 809 - ITAT DELHI] held that the AO/TPO/DRP erred in disregarding the segmental result of the taxpayer by proceeding to consider the margin of the taxpayer at the entity level for the transfer pricing analysis.
Thus we note that there was valid reason for non-disclosure of segment reporting in the audited accounts of the assessee company and submission of segment reporting before the TPO.
Therefore, the allegation made by the Revenue in this regard needs to be rejected.
Benchmarking approach adopted by the TPO - MAM - Application of entity level TNMM approach - We note that while determining the arm's length nature of the international transaction under the TNMM, the TPO erred in adopting the entity level TNMM approach because the assessee company had undertaken broadly seven different types of revenue generating transactions with varied risks and returns and the provision of software development service to AE was only one of them. The assessee company correctly prepared the segment reporting for the purpose of computing net profit indicator that arose solely from the international transaction under consideration and applied the TNMM only in respect thereof.
We accept the ALP analysis undertaken by the assessee company under the TNMM based on the segment report submitted by the assessee company to the TPO which is duly verified and certified by the independent Statutory Auditor of the assessee company. The erroneous benchmarking approach adopted by the TPO needs to be rejected, and therefore, the ground No.1 raised by the Revenue is dismissed.
CIT(A) justification in not appreciating the fact that the segmental accounts are liable to be rejected as the assessee is engaged only in one activity - software development - as can be observed from the website of the assessee and there is no mention of engineering services performed as claimed by the assessee company in the Transfer Pricing Study Report, in which it has incurred a loss - Allegation of the Revenue that the assessee company was engaged only in one activity i.e. software development, is erroneous. Therefore, we accept the segment reporting submitted by the assessee company to the TPO and dismiss the ground No.2 raised by the Revenue.
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2019 (4) TMI 2102
CENVAT Credit - CTD Bars, angles, joists, channels, plain plates, TOR steels - matter was remanded by the Tribunal only to verify the use of impugned items and it is alleged that the remand order was passed ex- party - CA certificate, certifying the use of such goods denied on the ground of being submitted belatedly - HELD THAT:- In the Adjudication order, the Adjudicating Authority has not given an independent finding regarding the use and Chartered Engineer’s Certificate. He referred to the order of Adjudicating Authority which is absolutely incorrect for the reason that earlier order was set aside by the Tribunal. Therefore it was incumbent on the Adjudicating Authority to give an independent finding while passing the de novo order which he failed to do so. Therefore, the matter needs to be reconsidered taking into account the entire facts and the Chartered Engineer’s Certificate.
Appeal allowed by way of remand.
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2019 (4) TMI 2101
Late deposits of employees’ Contribution towards PF and ESI - amount paid before the due date of filing of return of income u/s 139(1) - HELD THAT:- The issue is covered by a series of decisions of Hon’ble Jurisdictional High Court including the decision in case of PCIT vs. Rajasthan State Beverages Corporation Ltd [2016 (8) TMI 1317 - RAJASTHAN HIGH COURT] as held that the amounts in question were deposited on or before the due date of furnishing of the return of income and taking in consideration judgment of this Court in Commissioner of Income Tax Vs. State Bank of Bikaner & Jaipur [2014 (5) TMI 222 - RAJASTHAN HIGH COURT] and Commissioner of Income Tax Vs. Jaipur Vidyut Vitaran Nigam Ltd. [2014 (1) TMI 1085 - RAJASTHAN HIGH COURT] question decided against the revenue. Decided in favour of assessee.
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2019 (4) TMI 2100
Waiver of penalty, payment of interest and grant of other concessions - report of the Committee constituted to redress grievances pertaining to payment of penalty and interest by various tax payers under the Odisha Entry Tax Act, 1999 in sealed cover is produced from the custody - HELD THAT:- Pursuant to the Recommendation of the Committee, all these matters require consideration. Therefore, the matters are admitted.
The matters shall be listed on 7th August, 2019.
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2019 (4) TMI 2099
Rate of tax applicable to domestic companies and/or co-operative banks - Scope of provisions of Article 26 (Non-discrimination) of the India-France tax treaty - HELD THAT:- The above issue is covered against the assessee by a series of orders passed by various Co-ordinate Benches in assessee’s own case [2013 (8) TMI 1173 - ITAT MUMBAI] a foreign company was 48% compared to 38% applied in case of domestic companies. The assessee had argued that it was discriminatory and not in accordance with law. Reference was made to non-discrimination clause in the Treaty, as per which there should not be any discrimination between the domestic and the non-resident company.
Tribunal, however, referred to the Explanation in the Section 90, inserted in the IT Act with retrospective effect from 01-04- 1962 as per which the higher tax rate in case of foreign company, should not be regarded as violation of non-discrimination clause. The facts in the present appeal are identical and, therefore, respectfully following the decision of the Tribunal in the case of M/s BNP Paribas(supra), we dismiss this ground raised by the assessee
Data processing fees paid by Indian Branch offices of the Appellant to its Singapore branch as income of the Appellant under Article 13 (Royalty and fees for technical services) of the India-France tax treaty - HELD THAT:- The issue is about data processing fees paid by Indian Branch Office of the assessee to Singapore Branch to the tune under Article 13 of the India-France treaty. We find that while deciding the appeal for AY 2009-10 [2016 (3) TMI 1355 - ITAT MUMBAI], the Tribunal has decided the issue.
Short credit of taxes given by the AO of tax deducted at source - HELD THAT:- We direct the AO to verify the facts and grant credit of taxes deducted at source as per the provisions of the Act, after giving reasonable opportunity of being heard the assessee.
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