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Showing 61 to 80 of 645 Records
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2007 (5) TMI 633 - SUPREME COURT
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... ... ..... st week of January, 2005." 38. Several orders have been passed by this Court from time to time. It appears that despite such directions, one party or the other claims to hold the office despite expiry of the term. In this appeal, as has been suggested by Mr. Prabhakar, it may not be practicable for us to fix any time for taking over or handing over of possession. It, however, appears that an execution case is pending before the Additional Subordinate Judge, Madurai. 39. We, therefore, in exercise of our jurisdiction, direct the learned Trial Judge, to pass an appropriate order in this behalf. The learned Trial Judge may pass an appropriate order in regard to the amount deposited by Respondent No.1 pursuant to the said order dated 07.12.2004 or any other order that may be brought to its notice. 40. This appeal is dismissed with the aforementioned directions with costs payable by the appellant in favour of Respondent No.1. Counsel's fee is assessed at ₹ 50,000/-
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2007 (5) TMI 632 - SUPREME COURT
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... ... ..... se a proposal was in the offing. In that case, the State had not given its final approval having regard to the development of the plan. The said decision, therefore, cannot be said to have any application in the instant case. 53. Furthermore, since special regulations have been framed in the town of Shimla, the core area as provided for in the regulation is required to be protected. The area in question has been declared to be a heritage zone, and hence no permission to raise any construction can be issued, which would violate the ecology. Such regulations have been framed in public interest. Public interest, as is well-known, must override the private interest. See Friends Colony Development Committee v. State of Orissa and Others AIR 2005 SC 1 para 22 . 54. For the reasons aforementioned, the impugned judgment cannot be sustained, which is set aside accordingly. The appeal is allowed. In the facts and circumstances of the case, however, there shall be no order as to costs.
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2007 (5) TMI 631 - CESTAT CHENNAI
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... ... ..... er the main part of the demand of Service tax raised on the appellants by the Commissioner is a double taxation vis-a-vis demands raised against M/s. South India Corporation Ltd. and other stevedore agents inasmuch as learned Commissioner himself has acknowledged the fact that the appellants were working as sub-contractors of these agencies. If the plea of double taxation will be established by the appellants, they will be entitled to remand of the case to the Commissioner. In this scenario, we direct both sides to bring on record copies of the show-cause notices issued to the 9 stevedore agents (of whom the appellants have been held to be sub-contractors by the Commissioner) and all supporting documents. This shall be done within 2 months. The appeal will be taken up for final disposal on 23-7-2007. Till then, there will be waiver of pre-deposit and stay of recovery, having regard to the payment of ₹ 30.09 lakhs by the assessee. (Dictated and pronounced in open Court)
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2007 (5) TMI 630 - SUPREME COURT
Appeal against a judgment and decree passed by a Division Bench of the High Court - Entitlement to the share - Partition claiming 2/3rd share in the property - business of joint venture - suit barred by limitation - HELD THAT:- There is no document in writing to prove partnership. Accounts had not been demanded by the plaintiffs or the defendant no. 3 for a long time. Even an oral partnership had not been proved. What was the subject-matter of the partnership had also not been considered by the High Court. A share in a joint venture, in absence of any document in writing, must be determined having regard to the conduct of the parties. The High Court proceeded on the basis that the plaintiffs and defendant No.1 had = share in the property in terms of Section 45 of the Transfer of Property Act. If the said immovable property formed assets of the joint venture, the same would be an india to determine the shares held by the parties thereto. Ordinarily, the extent of an involvement made shall be the criteria for determining the share of the co-entrepreneurs. In absence of terms and conditions of the joint venture having not been reduced to writing, conduct of the parties how they dealt with affairs of the business would be relevant.
If the contents of Ex. B-8 were accepted, it was not for the High Court to consider the consequences flowing therefrom, and, thus, but the fact whether the figure(s) contained therein could be verified from the books of account might not be very relevant. Whether, it would be in consonance with the pleadings of Appellants was again of not much significance if it can be used for demolishing the case of Plaintiffs and Defendant No.1 If the figures contained in Ex. B-8 were accepted, it was for Defendant No. 1 to explain the same and not for Appellants. The High Court, in our opinion, thus, committed a manifest error in not taking into consideration the contents of Ex. B-8 in its proper perspective.
It was for the High Court to frame appropriate points for its determination in the light of the submissions made on behalf of Appellants in terms of Order 41 Rule 31 of the Code of Civil Procedure. The High Court failed to address itself on the said issue. Thus, apart from Issues Nos. 2 and 4, other points which for its consideration including the extent of the share of Plaintiffs and Defendant No. 1 were required to be specifically gone into particularly in view of the fact that such a contention had been considered by the learned Trial Judge. Issue Nos. 2 and 4, in our opinion, therefore, require fresh consideration at the hands of the High Court.
Hence, it may also be necessary for the High Court to consider the applicability of the relevant articles of the Limitation Act. We, therefore, are of the opinion that the impugned judgment to the extent aforementioned cannot be sustained. It is set aside accordingly in part and the matter is remitted to the High Court for consideration of the matter afresh on the said issues, interalia, in the light of the observations made here in before. The High Court shall also formulate appropriate points for its consideration in terms of Order 41 Rule 31 of the Code of Civil Procedure and proceed to hear the appeal on merits on the relevant issues apart from Issue Nos.2 and 4.
This appeal is allowed.
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2007 (5) TMI 629 - CESTAT, BANGALORE
CENVAT credit - demand of 10% of the value of 314160.229 MTs of exempted goods - non-maintenance of separate records for dutiable and exempt goods - Held that: - Even though the appellants have not maintained separate accounts, they have reversed the credit taken and attributable to the goods cleared free of duty before the removal of the goods from the factory - the condition of non- availment of input credit in respect of Notification 30/2004 is satisfied - appeal allowed - decided in favor of appellant.
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2007 (5) TMI 628 - ALLAHABAD HIGH COURT
Re-assessment order - grievance of the petitioner is that under sub-section (2) of Section 21 of the Act, the limitation for passing an order of re-assessment has been provided, which is not after the expiration of six years from the end of such year or March 31, 2002, whichever is later, which period having expired long back, the Additional Commissioner could not have authorised the Assessing Authority for making of re-assessment in respect of the assessment years in question
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2007 (5) TMI 627 - SUPREME COURT
Qualifications of the Veterinary practitioners - Constitutionality and/ or applicability of the provisions of Section 30 of the Indian Veterinary Council Act, 1984 ("the Central Act") - declaration that the non-graduate Veterinary Practitioners who are registered under the Maharashtra Veterinary Practitioners Act, 1971 ("the State Veterinary Act") are eligible to practice Veterinary medicine in the same manner and on such conditions as they were prior to coming into force of the Central Veterinary Act in the State of Maharashtra - HELD THAT:- The State of Maharashtra issued a notification dated 26th August, 1997 in terms of Section 30 of the Central Act specifying minor veterinary services to be rendered by the Veterinary Science Certificate or Diploma holders in the Government Service or in Semi-Government organizations.
Such qualifications had been laid down by the State Act. If by reason of the Central Act, a higher qualification has been laid down, the same, in our opinion, would prima facie be presumed to have been enacted in the interest of the general public.
We have noticed, that it has been conceded before us and, in our opinion, rightly so, that the provisions contained in Section 30 of the Central Act constitute a reasonable restriction within the meaning of the first part of Article 19(6) of the Constitution of India and the fundamental rights under Article 19(1)(g) thereof.
Veterinary services in terms of the Central Act is in two parts (1) veterinary services and (2) minor veterinary services. What would be the minor veterinary services has been laid down by reason of a notification issued by the respective State Governments in exercise of their power under clause (b) of Section 30 of the Central Act. Once such a notification has been issued, indisputably, those who are not otherwise entitled to resort to veterinary practices within the meaning of the Central Act can be asked to perform the jobs of minor veterinary services.
A distinction exists between a repeal simpliciter and a repeal by an Act which is substituted by another Act.
We are not beset with such a situation in the instant case. The right of the petitioners to practise in the field of veterinary practice has expressly been taken away. When such a right has been taken away upon laying down an essential qualification therefor which the petitioners admittedly do not possess, the right of the petitioners to continue to practice despite the fact that they do not fulfill the criteria laid down under the Parliamentary Act or the Central Act would not survive.
The expression "unless a different intention appears" contained in Section 6 of the General Clauses Act, thus, in this case, would be clearly attracted. A right whether inchoate or accrued or acquired right can be held to be protected provided the right survives. If the right itself does not survive and either expressly or by necessary implication it stands abrogated, the question of applicability of Section 6 of the General Clauses Act would not arise at all. [See Bansidhar and Others v. State of Rajasthan [1989 (3) TMI 379 - SUPREME COURT] and Thyssen Stahlunion Gmbh v. Steel Authority of India Ltd.[1999 (10) TMI 636 - SUPREME COURT]]
We are of the opinion that those who are in service of the State or the semi-government or local self government organizations must be held to have a right to continue in service. The employees of the State enjoy a status. A person who enjoys a status can be deprived therefrom only in accordance with law having regard to the nature of right conferred on him under Article 311 of the Constitution of India. The law in this behalf, in our opinion, is clear. Their nature of duty may change but they would be otherwise entitled to continue in service.
The State of Maharashtra or for that matter even the other States have issued notification (s) in terms of clause (b) of Section 30 of the Central Act. Minor veterinary services, therefore, having been specified in terms of the said notification, those certificate holders who are in the services of the State or the other semi-government organizations are entitled to continue in service, subject of course to, carrying out their duties strictly in terms of the notification issued by the State under clause (b) of Section 30 of the Central Act. In the event, any State has not issued such a notification, they may do so.
Thus, the writ petition and the civil appeal are dismissed.
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2007 (5) TMI 626 - CESTAT, MUMBAI
Waiver of pre-deposit - credit on Towers and parts of Towers and pre-fabricated shelter for protecting Transmission devices - Held that: - While holding that a prima facie case for waiver has been made out in respect of the credit denial on Towers and parts thereof and pre-fabricated buildings, we accept the offer made of pre-deposit of ₹ 10 lakhs - Compliance is to be reported on 11.7.07.
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2007 (5) TMI 625 - PUNJAB AND HARYANA HIGH COURT
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... ... ..... Act, 1961 (for short 'the Act') has not been noticed in the said judgment. We are afraid that the contention of learned counsel for the revenue is not correct as the Division Bench has specifically noticed the judgment of Karnataka High Court in case Chief Commissioner of Income Tax and another v. Smt. Shantavva (2004) 267 ITR 67, wherein the amendment inserted to Section 45(5) of the Act had been specifically dealt with and the similar question, as has been raised in these appeals, was decided against the revenue and in favour of the assessee. We have also perused the judgment rendered in Bikram Singh and others v. Land Acquisition Collector and Ors. 224 ITR 551 (SC). After going through the above referred to decisions, we are of the considered view that question raised in the present appeals is squarely covered by the aforesaid decisions. Accordingly, all the appeals are dismissed in terms of the decision of this Court in ITR No. 26 of 1997, decided on 17.01.2007.
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2007 (5) TMI 624 - SUPREME COURT
Interpretation of the provisions of Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam (the Act) - Planning and development and use of land - notification in terms of sub-section (1) of Section 38 of the Act - (i) Whether having regard to notification dated 13.02.1974 vis-‘-vis the expansion of the Indore Development Plan, the District Committee in exercise of its delegated power can automatically extend the area of operation of the appellant despite the notification constituting it by the State whereby and whereunder its area of operation was limited to the one covered by the notification dated 13.02.1974 ? - (ii) Whether the appellant authority can declare its intention in terms of Section 50 of the Act before the development attained finality - HELD THAT:- The essence of planning in the Act is the existence of a development plan. It is a development plan, which u/s 17 will indicate the areas and zones, the users, the open spaces, the institutions and offices, the special purposes, etc. Town planning would be based on the contents of the development plan. It is only when the development plan is in existence, can a town planning scheme be framed. In fact, unless it is known as to what the contents of a possible town planning scheme would be, or alternatively, whether in terms of the development plan such a scheme at all is required, the intention to frame the scheme cannot be notified.
The limit of Indore planning area was specified by a notification dated 13.02.1974 in terms of Sub-section (1) of Section 13 of the Act. Appellant Authority was constituted by the State of Madhya Pradesh in exercise of its power u/s 38(1) of the Act for the area comprised within the Indore planning as specified in the notification dated 13.02.1974. The State in exercise of its jurisdiction under Sub-section (1) of Section 75 of the Act delegated its power conferred upon it under Sections 13 and 47A of the Act upon the District Planning Committee. No power u/s 38 was delegated. The District Planning Committee exercises its jurisdiction pursuant to the said delegation in terms of a notification dated 13.11.2000 extending the Indore Development Planning Area to 152 villages. The villages Bicholi and Kanadia were not included in the notification dated 12.08.1977. They were included only in the notification issued by the District Planning Committee.
The District Planning Committee, however, issued another notification amending the planning area to 90 villages only and deleting 62 villages from its earlier notification.
There cannot be any doubt whatsoever that even a delegatee exercises its power relying on or on the basis of its power conferred upon it by the delegator, its act would be deemed to be that of the principal as has been held by this Court in State of Orissa and Others v. Commissioner of Land Records and Settlement,Cuttack and Others[1998 (8) TMI 601 - SUPREME COURT].
Yet again, the State in exercise of its power u/s 38(1) of the Act notified planning area confirming to the one identified by the District Planning Committee in terms of its notification dated 28.10.2005.
Application of the principle of executive construction would lead to a conclusion that the State and the appellant themselves proceeded on the basis that in terms of the notification issued by the District Planning Committee, the area of operation of the appellant was not extended.
The State exercises its different power for different purposes. Issuing notification of a planning area, whether named or not, for the purpose of Section 13(1) is different from the one for which a development authority is created within the meaning of Section 38(1) of the Act. The State in a given situation may appoint more than one authority for the same planned area.
The State delegated its power upon the District Planning Authority u/s 38 of the Act. The appellant authority was created for a definite purpose. Its jurisdiction was limited to the area notified. When so creating, although 1974 notification was referred to, the same was only for the purpose of limiting the area of operation of the appellant authority. The principle of legislation by incorporation was applied and not the principle of legislation by reference.
The difference between the two principles is well-known. Whereas in the case of the former, a further notification amending the ambit or scope of the statute would be necessary, if the statute incorporated by reference is amended, in the latter it would not be necessary.
It is furthermore a well-settled principle of law that a delegatee must exercise its jurisdiction within the four-corners of its delegation. If it could not exercise its delegated power for the purpose of creation of the appellant authority or extended its jurisdiction, in our opinion, it cannot be done by amendment of a notification issued u/s 13(1) of the Act.
Admittedly, the villages in question had been included by the State in its notification issued on 28.10.2005. Prior thereto, the said villages having not been included within the area of operation of the appellant authority, any action taken either by way of its intention to frame a town planning scheme or otherwise shall be wholly illegal and without jurisdiction. It would render its act in relation to the said villages a nullity.
It is, therefore, difficult for us to accept the submission of Mr. Venugopal and Mr. Gambhir that the notification dated 13.11.2000 subsumes in the notification dated 12.08.1977.
Thus, we do not have any other option but to uphold the impugned judgment of the High Court.
We may, however, observe that several other contentions, as noticed hereinbefore, have been raised before us but we do not find any necessity to go thereinto.
Hence, there is no merit in these appeals which are dismissed accordingly. There shall, however, be no order as to costs.
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2007 (5) TMI 623 - DELHI HIGH COURT
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... ... ..... 1962. 3. The respondent then preferred an appeal before the Tribunal which set aside the order passed by the Commissioner of Customs and granted consequential relief to the respondent. 4. Against the decision of the Tribunal, the Revenue has preferred this appeal under Section 130 of the Customs Act, 1962. 5. We find that Section 130(1) of the Act provides that an appeal shall lie to the High Court from every order passed by the Tribunal except in cases which involve, among other things, the value of goods for the purposes of assessment. Since in the present case, the value of the goods is directly involved, no appeal would lie to the High Court against the order passed by the Tribunal. 6. Under the circumstances, we cannot entertain this appeal filed by the Revenue for want of jurisdiction. 7. Learned counsel for the Revenue says that he will take appropriate steps, as provided in law. 8. The appeal and all pending applications are disposed of.
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2007 (5) TMI 622 - RAJASTHAN HIGH COURT
Excess valuation of stock - discrepancy between stock statements filed in Bank and stock shown in books of accounts - Whether the Tribunal was justified in upholding the order of the CIT(A) who deleted the additions? - HELD THAT:- There is no finding on the fundamental aspect of the matter if there was any discrepancy in the quantity of the stock as stated to the bank and as stated in books. The learned Assessing Officer has merely proceeded on the discrepancy in the two figures in valuation of the closing stock, debtors and advances as per the books of account at ₹ 20,13,748 and as declared to the bank at ₹ 23,37,248; and has directly proceeded to make addition of the difference amount of ₹ 3,23,500. Mere variation in the valuation of assets as declared to the bank and as stated in the books of account was not conclusive; and the amount of difference itself could not have been taken up for addition without further requisite inquiry about the true stock position and value of the assets.
The learned Assessing Officer preferred to rely merely upon the fact that for such discrepancy addition was made in the earlier year; and on that basis alone is founded the addition for the year in question. It has been noted by the appellate authorities that such addition made for the earlier assessment year 1981-82 has not been countenanced in appeal; and the Tribunal has pointed out that under the similar facts and circumstances, reference application moved by the revenue for the assessment year 1981-82 was rejected. Irrespective of that, we are clearly of opinion that for the year in question, i.e., assessment year 1982-83, the Assessing Officer could not have made additions merely with reference to the variation in two valuations without coming to a conclusion that there was actual variance in the quantity of stock; and without finding as to when such discrepancy, if at all, occurred. The appellate authorities cannot be said to have erred in deleting such addition made without requisite inquiry and without essential finding about actual variation in the stock.
We are satisfied with the correctness of the order passed by the Tribunal and find no ground to call for a reference in the present case.
Accordingly, this reference application is rejected.
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2007 (5) TMI 621 - SC ORDER
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... ... ..... dy, JJ. ORDER Appeal dismissed.
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2007 (5) TMI 620 - CESTAT BANGALORE
Stay application - brokerage charges - includibility - Held that: - in similar matter, the stay order has been passed including waiver of pre-deposit of the amount in the case of CHANDRAVADAN DESAI Versus COMMISSIONER OF C. EX., CALCUTTA-I [1997 (9) TMI 1 - CEGAT (CALCUTTA)]. Following ratio of the said order, the stay application is allowed - decided in favor of applicant.
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2007 (5) TMI 619 - SUPREME COURT
Validity Of directions issued by the High Court - To Fix salaries and allowances of the members of the State Commissions as well as the District Consumer - Principle of sub silentio - Violation of statutory provisions in Sections 10(3) and 16(2) of the Consumer Protection Act - encroachment of powers into the legislative and executive domain - HELD THAT:- If this Court itself fixes such salaries and allowances, it will be really amending the law, and it is well settled that the Court cannot amend the law vide Union of India Vs. Association for Democratic Reforms & Anr.[2002 (5) TMI 820 - SUPREME COURT] and Supreme Court Employees Welfare Association Vs. Union of India & Ors. [1989 (7) TMI 333 - SUPREME COURT].
If we issue the direction as prayed for by learned Additional Solicitor General in this case, we would be issuing a direction which would be wholly illegal being contrary to Section 10(3) and Section 16(2) of the Consumer Protection Act. This Court is subordinate to the law and not above the law.
We regret to say that the directions of the High Court (which have been quoted in this judgment) are really an encroachment into the legislative and executive domain. Whether there should be one State Consumer Forum or five or more State Consumer Fora is entirely for the legislature and executive to decide. The High Court has directed that the State Government should constitute at least five State Consumer Forums at the State level by making necessary amendments in the Act. In our opinion such a direction was clearly illegal. The Court (including this Court) cannot direct amendment of an Act made by the legislature.
The establishment of the District, State and National level Consumer Fora is done u/s 9 of the Consumer Protection Act by the authorities mentioned in that Act. The composition of these Fora is also prescribed in that section, and so are the salaries and allowances and other conditions of service of the members. It is only the authorities mentioned in the Act who can do the needful in this connection, and this Court cannot arrogate to itself the powers given by the Act to the said authorities.
For instance, the salaries and allowances of member of the State and District Fora can only be prescribed by the State Government. We have been informed that in some States these salaries and allowances are very low. Be that as it may, this Court cannot arrogate to itself the powers and functions of State Government in this connection. Different State Governments have different constraints and considerations e.g. financial constraints, the number of cases, etc. and it is entirely for the State Governments to exercise the powers prescribed to them by the Act.
Similarly it is entirely for the Central Government to perform the functions given to it by the Act, and this Court cannot interfere with the Central or State Government in the exercise of their functions. At best this Court or the High Court can make recommendations for increase of salaries, allowances and betterment of working conditions, etc. but there its jurisdiction ends. It cannot give binding directions in this connection.
We regret to say that even the interim order of this Court dated 26.11.2000 by which it directed the Union of India to file a comprehensive scheme with regard to the structuring of the Consumer Forums at all the three levels does not seem to be within its jurisdiction as it is contrary to the clear provisions of the Consumer Protection Act.
It has been nowhere provided in the Consumer Protection Act that the Central Government has a duty, or power, to prepare a comprehensive scheme with regard to the structure of Consumer Fora at all the three levels.
No doubt the High Court, as well as this Court, are concerned that the Consumer Fora in many parts of the country are not functioning properly, but the Court could at most have given some recommendations to the Central and State Government in this connection, and it is entirely upto the Central and State Governments whether to accept those recommendations or not, at their discretion. This Court cannot amend the Consumer Protection Act by issuing directions contrary to the clear provisions of the Act nor can the High Court do so.
However, the Central and State Governments are requested to consider fixing adequate salaries and allowances for members of the Consumers Fora at all three levels, so that they can function effectively and with a free mind. They are also requested to fill up vacancies expeditiously so that the Fora can function effectively.
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2007 (5) TMI 618 - ALLAHABAD HIGH COURT
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... ... ..... ment Order dated 24-8-1984 issued by the State Government providing aid was to be given to the extent of the purchase tax paid by the Sugar Mills on purchase of sugarcane in order to facilitate payment of cane price. It may be mentioned here that the cane price paid by the assessee is a revenue expenditure and, therefore, any amount provided as aid for making revenue expenditure, would partake the nature of a revenue receipt. 16. We are fortified by a decision of the Apex Court in the case of Sahney Steel & Press Works Ltd. v. CIT 1997 228 ITR 253 1, wherein the Apex Court has held that the payment in the nature of subsidy from the public fund are made to the assessee to assist him in carrying on his trade or business, they are trade receipts. 17. In view of the aforesaid decision, we answer the question referred at the instance of the assessee in favour of the revenue and against the assessee. In view of divided success, the parties are directed to bear their own costs.
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2007 (5) TMI 617 - DELHI HIGH COURT
Disallowance in respect of Commission - commercial expediency - Payments on account of commission to any person for doing the liaison work - details of services rendered not established - notice sent by the Assessing Officer remained unserved - HELD THAT:- From the record it is apparent that the assessee was required by the Income-tax Authorities to file the requisite particulars and produce the concerned person for verification/examination. The assessee did not submit any confirmation from the DOT and MTNL because DOT and MTNL were not directly involved.
With regard to the names and addresses of the persons with whom the assessee interacted, it was stated by the assessee that there has been a lot of changes in the structure of M/s. SFL Industries Ltd. and details and whereabouts of the employees of M/s. SFL Industries were not available with the assessee. The assessee even did not file the copy of relevant bank account of M/s. SFL. The assessee also failed to explain as to what was the nature of the services provided by M/s. SFL, and no correspondence in this regard has been produced by the assessee in spite of specific opportunities granted.
No fault can be found with the view taken by the Tribunal. Thus, the order of the Tribunal does not give rise to a question of law, much less a substantial question of law, to fall within the limited purview of section 260A of the Act, which is confined to entertaining only such appeals against the order which involves a substantial question of law.
There are concurrent findings of the facts in the present case given by the three statutory authorities and in view of the fact that assessee has failed to provide the requisite information to the Assessing Officer, we do not find any infirmity in the order passed by the Tribunal.
Accordingly, the present appeals filed by the assessee are, hereby, dismissed.
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2007 (5) TMI 616 - SC ORDER
Applicability of Limitation Act 1963 - Held that: - the provisions of the Limitation Act, 1963 have no application in relation to proceedings under the Central Excise Act - the Act as a special statute deals with the matter relating to limitation.
The High Court cannot be said to have committed any error in following the judgment of this Court in India House v. Kishan N. Lalwani [2002 (12) TMI 621 - SUPREME COURT OF INDIA], where it was held that It is well-settled that by virtue of sub-Section (2) of Section 29 of the Limitation Act the provisions of Section 12 are applicable for computing the period of limitation prescribed by any special or local law.
SLP dismissed.
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2007 (5) TMI 615 - CESTAT, CHENNAI
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... ... ..... se Act is set aside, following the Tribunal's decision in Rashtriya Ispat Nigam Ltd. vs. Commissioner of Central Excise, Visakhapatnam, 2003 (54) RLT 317 (CEGAT-Ban.) 2003 (161) ELT 285 (Tri.-Bang.) as affirmed by apex Court in 2004 (163) ELT A.53 (S.C.) and as also Final Order No. 1094/2006 dated 15.11.2006 reported in 2007 (81) RLT (CESTAT-Che.) passed by the Division Bench of the Tribunal at Chennai in Appeal No. E/373/2000. 3. The appeal stands allowed. Dictated and pronounced in open Court.
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2007 (5) TMI 614 - ITAT AMRITSAR
Applicability of u/s 50 and 50A - Slump sale - long-term capital gain - cost of acquisition - disallowance of depreciation as a result of reduction of block of assets - Whether CIT(A) has erred in holding that the sale of Betalactum Division by the assessee company is a slump sale on which ss. 50 and 50A are not applicable and long-term capital gain has to be computed by indexing the cost of acquisition - HELD THAT:- It is evident that for a sale to be termed as a 'slump sale', it is not essential that all the assets and liabilities must be transferred. Even if some assets and liabilities are retained by the transferor, the sale would not lose the character of being a slump sale, if the transfer is of a going concern, on that basis and the transferee is in a position to carry on the business without any interruption. In the present case, the right to use the technical know-how developed by the assessee was granted by the assessee to the transferee against the payment of a separate consideration. The proprietary rights therein were retained till 30th June, 2000.
On facts, in view of the above numerous judicial pronouncements, it cannot be said that what the transferee acquired was not a going concern. Rather, after the transfer, the transferee carried on the business without any disruption therein. In CIT vs. West Coast Chemicals & Industries Ltd. (In Liquidation)[1976 (9) TMI 37 - MADRAS HIGH COURT], CIT vs. F.X. Periera & Sons (Travancore) (P) Ltd[1989 (12) TMI 40 - KERALA HIGH COURT], Premier Automobiles Ltd. vs. ITO & Anr. [2003 (4) TMI 43 - BOMBAY HIGH COURT], and Asstt. CIT vs. Raka Food Products [2005 (6) TMI 25 - MADRAS HIGH COURT] amongst others, it has been held that in the case of a sale of an undertaking as a whole, on a going concern basis, if some assets are retained by the transferor or some liabilities are not taken over by the transferee, this fact does not render the slump sale as not a slump sale.
A similar view has been expressed by the Delhi Bench of the Tribunal for asst. yr. 1999-2000 and 5507/Del/2003, for asst. yr. 2000-01, in the case of M/s ECE Industries Ltd., [2006 (9) TMI 221 - ITAT DELHI-D]. Therefore, the findings of the learned CIT(A) in this regard are upheld.
Further, s. 50B of the IT Act has correctly been held by the learned CIT(A) as having no applicability to a slump sale, as in the present case. It is significant that this section was inserted in the Act by the Finance Act, 1999 w.e.f. 1st April, 2000. It has not been stated to be applicable retrospectively. In the absence of any such specific statement, it can only apply prospectively.
Thus, we hold that there is no force in the grievance of the Department, by way of ground No. 1, that the CIT(A) has erred in holding that the sale of the Betalactum Division of the assessee company was a slump sale and ss. 50 and 50A of the Act are not applicable and that the long-term capital gain has to be computed by indexing the cost of acquisition. Ground No. 1 is therefore, rejected.
Addition on account of expenses incurred for revaluation of the fixed assets - HELD THAT:- The facts are that the revaluation was got done on 31st March, 1997 and the sale took place on 1st July, 1997. It is evident that the assessee got the revaluation done for the purpose of the sale. The assessee has contended that this exercise was carried out in routine in order to secure finance from financers/financial institutions, for the business needs of the assessee. However, it is seen that such revaluation is not a regular feature of the assessee. At least no other such instance of revaluation, at any other point of time, has come on record.
Moreover, the assessee has also not placed on record any material to show that any finance was secured from the financial institutions/financers in pursuance of the said revaluation. Anyhow, the alternative contention of the assessee appears to be right and is accepted as such. This expenditure will be allowed to be deducted in computing the capital gain/loss on the transfer of the Betalactum Division, since this expenditure was incurred in connection with the said transfer. Ground No. 3 is, as such, accepted in the above terms.
Non-compete fee received by company that is "capital or revenue receipts"- HELD THAT:- We find that the assessee is correct when it contends that the issue of taxability of non-compete fee being a legal one, even if the assessee did not press it before the AO, it could well have been pressed before the learned CIT(A), as was done. Further, it is also correct that all the facts being before the AO, the CIT having powers co-terminus with those of the AO, was not incorrect in not remitting the issue to the AO for decision. Moreover, evidently, the AO duly represented the case of the Department before the learned CIT(A) and no objection was raised regarding the assessee having not pressed the issue before the AO.
On merits, evidently, there has been no transfer of assets as envisaged u/s. 45 of the Act r/w s. 2(47) of the Act. The AO, pertinently, had agreed that the fee in question represented a capital receipt and not a business receipt. By signing the negative covenant, the assessee undertook not to carry out manufacture or trade of the products for a period of time. That being so, this act amounted only to a self-imposed restriction and not a transfer within the meaning of the Act. It was neither the sale or exchange or relinquishment of the asset, nor was any right therein extinguishable, the right to manufacture or trade remaining intact after the period for which the negative covenants were signed.
Thus, we hold that the learned CIT(A) was justified in deciding the issue on merits in favour of the assessee. Such finding of the learned CIT(A) is, therefore, hereby upheld. Ground No. 4 is thus rejected.
In the result, the appeal of the Department stands partly allowed.
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