Works contract - Framing of charges against the accused persons - allegation is that the false stage certificate was issued as 25% of the work had not been completed - HELD THAT:- It is not in dispute that two works were awarded to A-3: one was known as "JRY-consignment semi permanent building in Vandiperiyar" and other was known as "JRY-construction of permanent building in Vandiperiyar". In the present case, we are concerned with release of payments to A-3 in respect of second work contract. As is clear from the nomenclature of these two contracts, they were under JRY. The Commissioner, Village Development, Thiruvananthapuram had issued Circular No. 14514/J.R.Y. 1/91/C.R.D. dated 23.04.1991 which prescribes the procedure for implementation of JRY and contains certain suggestions.
The prosecution has sought to cover the case of the Appellant under Sub-clause (ii) and not under Sub-clause (i) and Sub-clause (iii). Insofar as Sub-clause (ii) is concerned, it stipulates that a public servant is said to commit the offence of criminal misconduct if he, by abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage - It was not even the case set up by the prosecution that Appellant had taken that money from some person and had obtained any pecuniary advantage thereby. It was the obligation of the prosecution to satisfy the aforesaid mandatory ingredients which could implicate the Appellant under the provisions of Section 13(1) (d)(ii). The attempt of the prosecution was to bring the case within the fold of Clause (ii) alleging that he misused his official position in issuing the certificate utterly fails as it is not even alleged in the chargesheet and not even iota of evidence is led as to what kind of pecuniary advantage was obtained by the Appellant in issuing the said letter.
In C. CHENGA REDDY AND ORS. VERSUS STATE OF ANDHRA PRADESH [1996 (7) TMI 596 - SUPREME COURT], this Court held that even when codal violations were established and it was also proved that there were irregularities committed by allotting/ awarding the work in violation of circulars, that by itself was not sufficient to prove that a criminal case was made out.
The prosecution has miserably failed to prove the charge beyond reasonable doubt and the courts below have not looked into the matter in a proper perspective - the Appellant is already on bail. His bail bonds shall stand discharged - appeal allowed - decided in favor of appellant.
Benefit of exemption u/s 11 & 12 - whether activities of the trust were not within the purview of section 2(15) - As per revenue assessee society’s main source of receipts is from Hostel/Canteen activities and booking of Auditorium and Conference Hall which are of commercial nature - CIT(A) where relying upon the order of the ITAT for 2009-10 A.Y. and taking note of the fact that there was a similar denial in 2010-11 A.Y. also on identical fact which issue also stood concluded in favour of the assessee - HELD THAT:- We have seen the material available on record and in the light of the submissions advanced by the parties and on consideration of the above finding, we find that the conclusion drawn by the CIT(A) relying upon the order of the ITAT cannot be faulted with. It is seen that in 2009-10 A.Y. more or less on identical facts, the AO had proceeded on an Inspector’s report and therein also relying upon the information in Form 26AS as in the year under consideration he relying on the transactions made with non-member concluded that the trust was running as a commercial activity. This similarity of fact in the earlier year would be evident from order of the ITAT as held it would not be possible to ascertain the amount of canteen collection from those persons who were not stayed in the hostel. In any case it is bound to be very negligible and within permissible limits of section 2(15) of the Income Tax Act.
It can be seen from the documents submitted that the trust serves buffet meals during the program / workshop conducted by Members Organizations and/or during own program and workshop but not for any other purposes. This can be reviewed form the related documents enclosed herewith for your kind perusal i.e. Bills of buffets served during workshop and seminars.
We also like to submit that for the booking of the facilities (Buffet, Auditorium, Conference Hall etc.) of the Trust, officials of the trust designated for the said purposes (at the rank of Manager) are only authorized. Hence, as regard the remarks made by our Canteen staff they had merely given the information in regard to tariff rate both for vegetarian and non vegetarian buffets arrangement. There is nothing wrong in what has been stated by them and no where they had committed that it will be served also for the purposes other than the objectives of the activities for which it was intended. They had merely answered a query. Therefore, it would be inappropriate to conclude that what they had stated involve commercial activities.
Thus identical claim of the Revenue has been considered by the ITAT. No change in fact or circumstance has either been referred to by the Ld. Sr. DR nor has been brought out in the assessment order. In the absence of any infirmity having been pointed out, we find no good reason to deviate from the view taken. Holding the conclusion of the CIT(A) in relying thereon justified on facts and law the departmental ground is dismissed.
Depreciation claim - As relying on Indraprastha Cancer Society [2014 (11) TMI 733 - DELHI HIGH COURT] in computing the income of a charitable institution/trust, depreciation of assets owned by the trust/institution is a necessary deduction on commercial principles. The Gujarat High Court, after referring to the judgements of the Karnataka, Maharashtra and Madhya Pradesh High Courts cited above, also came to the same conclusion and held that the amount of depreciation debited to the accounts of the charitable institution has to be deducted to arrive at the income available for application to charitable and religious purposes. Revenue appeal dismissed.
TDS u/s 194A - Disallowance u/s 40(a)(ia) - Interest paid to various government and Institutional Depositors - Forms 15G/15H are not submitted to the Jurisdictional Commissioner and no evidences were produced to prove whether such forms have been obtained - HELD THAT:- Considering the basic exemption limits, category of the customers are farmers and assessee had collected above 75% of the forms and also percentage of forms not submitted compared to total interest disbursal is 2.26% and percentage of interest paid on above ₹ 10,000 is 24.63%, we are of the view that the assessee has complied with the provisions of section 197A. Assessee also submitted that it has placed a system of collecting the forms from rural branches to HO and submitting the same at the time of assessment.
Assessee also submitted that in the subsequent assessments, it was properly submitted the forms to Assessing Officer. Considering the above submissions, in our view, assessee is not at default and also as held in the case of Kumar Enterprises [2014 (5) TMI 426 - ITAT HYDERABAD] and CIT Vs. Valibhai Khanbhai Mankad [2012 (12) TMI 413 - GUJARAT HIGH COURT] that once the assessee obtained Form 15I from the sub-contractors whose contents are not disputed or whose genuineness is not doubted, then, the assessee is not liable to deduct tax from the payment made to sub-contractor. Once, assessee is not liable to deduct tax disallowance u/s 40(a)(ia) cannot be made. The assessee’s breach of the requirement to furnish details to the income tax authority in the prescribed form within the prescribed time may attract other consequences but cannot result in a section 40(a)(ia) disallowances. Hence, addition made on this count is deleted. - Decided in favour of assessee.
Constitutional Validity of various provisions of the Maharashtra Animal Preservation Act, 1976 (Animal Preservation Act) as amended by the Maharashtra Animal Preservation(Amendment) Act, 1995 - existing prohibition on the slaughter of cows, a complete prohibition was imposed on slaughter of bulls and bullocks in the State - ban was imposed on possessing the flesh of cow, bull or bullock slaughtered within and outside the State.
HELD THAT:- The conclusions are as under:
"(a) We uphold the constitutional validity of the amendment to Section 5 of the Animal Preservation Act made by the impugned Amendment Act;
(b) We uphold the constitutional validity of Sections 5A and 5B;
(c) We uphold the constitutional validity of Section 5C. However, the possession contemplated by Section 5C shall be conscious possession. It will be a possession with the knowledge that the flesh is of cow, bull or bullock which is slaughtered in contravention of Section 5 of the Animal Preservation Act;
(d) We hold that right of privacy is a part of the personal liberty guaranteed by Article 21 of the Constitution of India. We hold that Section 5D infringes the right of privacy which is part of Article 21 of the Constitution of India and therefore, it is liable to be struck down;
(e) Accordingly, reference to Section 5D in clause (b) of Sub-section (3) of Section 8 is liable to be struck down. Similarly, a reference to Section 5D in Section 9A is liable to struck down;
(f) The provisions of Section 9B are held to be unconstitutional being violative of Article 21 of the Constitution of India and, therefore, Section 9B is liable to be struck down;
(g) We hold that all other Sections which were subject matter of challenge are legal and valid."
Petition is disposed off with the following order:
(a) We hereby hold and declare that Section 5, Section 5A, Section 5B, Section 5C, Sub-sections (3) and (4) of Section 8, Section 9 and Section 9A of the Maharashtra Animal Preservation Act, 1976 as amended/inserted by the Maharashtra Act No. V of 2015 are constitutional, valid and legal;
(b) However, we hold that the possession in terms of the Section 5C of the Maharashtra Animal Preservation Act, 1976 shall be "conscious possession";
(c) Section 5D of the Maharashtra Animal Preservation Act, 1976 is struck down on the ground that the same infringes the fundamental right guaranteed under Article 21 of the Constitution of India;
(d) Accordingly, wherever there is a reference to Section 5D in other Sections of the Maharashtra Animal Preservation Act, 1976, the same stands deleted;
(e) Section 9Bof the Maharashtra Animal Preservation Act, 1976 is struck down as it infringes the fundamental right guaranteed by Article 21 of the Constitution of India;
(f) The prayers which are not specifically granted shall be deemed to be rejected;
(g) The Rule is partly made absolute in above terms with no orders as to costs;
(h) All the Pending Chamber Summonses, Notices of Motion and the Civil Applications are disposed of.
Interest income of DRDO and ISRO from two departments of Government of India added by AO in the income of the appellant company - CIT-A deleted the addition - addition made by the AO be deleted and justice be rendered to the appellant - HELD THAT:- The above ground is vague and does not have any specific prayer for adjudication. Hence, these appeals filed by the assessee are dismissed with liberty to file fresh appeal or file a Miscellaneous Petition with revised grounds of appeal. It is ordered accordingly.
The three appeals filed by the assessee are dismissed.
Murder or suicide - dowry demands - offence under Sections 498-A and 304-B of Indian Penal Code or not - whether the Court of Sessions was empowered to take cognizance of offence under Sections 304-B and 498-A of Indian Penal Code, when similar application to this effect was rejected by the JMFC while committing the case to Sessions Court, taking cognizance of offence only Under Section 306 Indian Penal Code and specifically refusing to take cognizance of offence under Sections 304-B and 498-A Indian Penal Code?
HELD THAT:- A bare reading of Section 190 of the Code which uses the expression "any offence" amply shows that no restriction is imposed on the Magistrate that Magistrate can take cognizance only for the offence triable by Magistrate Court and not in respect of offence triable by a Court of Session. Thus, he has the power to take cognizance of an offence which is triable by the Court of Session. If it is so, the question is as to what meaning is to be assigned to the words "as a Court of original jurisdiction" occurring in Section 193 of the Code when Court of Session takes cognizance of any offence. To put it otherwise, when the Magistrate has taken cognizance and thereafter only committed the case to the Court of Session, whether the Court of Session is not empowered to take cognizance of an offence again Under Section 193 of the Code or it still has power to take cognizance acting as Court of original jurisdiction.
The Magistrate had no business to discharge the Appellant. In fact, Section 207-A in the old Code of Criminal Procedure, empowered the Magistrate to exercise such a power. However, in Code of Criminal Procedure, 1973, there is no provision analogous to the said Section 207-A. He was bound under law, to commit the case to the Sessions Court, where such application for discharge would be considered. The order of discharge is therefore, a nullity, being without jurisdiction.
Here is a case where the Police report which was submitted to the Magistrate, the IO had not included the Appellants as accused persons. The complainant had filed application before the learned Magistrate with prayer to take cognizance against the Appellants as well. This application was duly considered and rejected by the learned Magistrate. The situation in this case is, thus, not where the investigation report/chargesheet filed Under Section 173(8) of the Code implicated the Appellants and Appellants contended that they are wrongly implicated. On the contrary, the Police itself had mentioned in its final report that case against the Appellants had not been made out.
Whether this Court exercise its powers under Article 136 of the Constitution to interdict such an order? - HELD THAT:- The order of the Magistrate refusing to take cognizance against the Appellants is revisable. This power of revision can be exercised by the superior Court, which in this case, will be the Court of Sessions itself, either on the revision petition that can be filed by the aggrieved party or even suo moto by the revisional Court itself. The Court of Sessions was, thus, not powerless to pass an order in his revisionary jurisdiction. Things would have been different had he passed the impugned order taking cognizance of the offence against the Appellants, without affording any opportunity to them, since with the order that was passed by the learned Magistrate a valuable right had accrued in favour of these Appellants. However, in the instant case, it is found that a proper opportunity was given to the Appellants herein who had filed reply to the application of the complainant and the Sessions Court had also heard their arguments.
Penalty u/s 271(1)(b) - assessee has not made proper compliance with the statutory notices -non maintaining books of accounts - assessee submitted that the Assessing Officer wanted the assessee to produce the books of accounts for computing the total income but for maintenance of books of accounts by an individual or any person not having the income from profession as specified in sub-section (1) of section 44AA or carrying on business or profession having income - HELD THAT:- No penalty can be imposed on the person or the assessee, as the case may be, for failure referred to in the above section if he proves that there was reasonable cause for such failure. Now in the instant case, the assessee has complied with all the notices and he has raised a legal objection that the assessee is not required to maintain books of accounts and if at all he is required to maintain the books of accounts that too for six years. Moreover, the assessee has filed detailed affidavit and also demanded the reasons recorded for reopening the assessment order. Therefore, this contention of the assessee can be said to be a reasonable cause for noncompliance with the notices issued by the Assessing Officer.
As assessee has filed the reply and raised the legal objection. The legal objection is tenable or not is not a question before me but in my opinion, the assessee has complied with the notices issued under subsection (1) of section 142 of the Act and moreover the assessee has also raised the legal objection that the assessee is not required to maintain the books of accounts as the assessee is not carrying on any profession or business.
As assessee has a reasonable cause for not complying with the notices. Moreover, the Assessing Officer has also stated that proper compliance is not made but the assessee has complied with the notices. Therefore, as per section 273 of the Act, the assessee has a reasonable cause for non-compliance with the notices to the satisfaction of the Assessing Officer - Decided in favour of assessee.
Seeking quashing/waiving off the arbitrary and discriminatory conditions encapsulated in clauses B.2.6(v) and B.2.7(v) and B.2.6(v) of the tender Nos.1, 2 & 3 respectively - holding 100% share of its subsidiary Company as per Russian Law - 100% subsidiary is permissible as per Indian Law or not - whether the impugned condition is an essential condition of eligibility or is merely ancillary or subsidiary to the main object to be achieved by the condition? - HELD THAT:- In the case of a newly formed company, there is no requirement that the promoter company should have a 100% shareholding in the bidder. All that is required is that the promoter company should give a corporate guarantee/undertaking that it would financially support the newly formed company for executing the project/job in case the same is awarded to them. The pleas in the counter affidavit seeking to justify the requirement of a 100% shareholding by a parent company, on the ground that several anomalies or difficulties can be caused by even a single shareholder who can affect/hamper the tender process of the Respondent No.1 to a great extent, are without any basis. No such fear or apprehension is expressed in respect of a newly formed company. One cannot comprehend as to how a subsidiary would be different from a newly formed company when in both cases a corporate guarantee/undertaking is submitted from the parent/ultimate parent/holding company or the promoter company/joint venture partner that it would financially support the subsidiary company or the newly formed company (as the case may be) for executing the project/job in case the same is awarded to them.
One fails to understand as to how holding 100% share in the subsidiary company would make the corporate guarantee/undertaking any better than in a case where the parent/ultimate parent/holding company does not hold 100% shares of the subsidiary company. In case of default of the bidder, the corporate guarantee/undertaking of the parent/ultimate parent/holding company would be enforced, in which case, it would be immaterial whether it holds 100% share in the subsidiary company or not.
Respondent No. 1 has itself not considered the said condition as an essential condition of eligibility and has admittedly not applied the principal of holding 100% shareholding of the bidder subsidiary company in the case of the consortium Russian Company M/s Bumi Armada Offshore Contractor Limited (BAOCL), Marshall Island and M/s Afcons Infrastructure Limited, Mumbai on the ground that as per legal advice received, under Russian Law a 100% subsidiary company cannot hold 100% shares of its subsidiary company. When the Respondent No. 1 has itself not treated the impugned condition as an essential condition of eligibility in the case of the Russian Company, then how can it be permitted to contend that in the case of the Petitioner, it is an essential condition of eligibility and not ancillary or subsidiary to the main condition.
In the present case, clearly the decision of the Respondent No. 1 to selectively apply the impugned condition in the case of the Petitioner and not the Russian company, smacks of arbitrariness. Further, as discussed hereinabove, the applicability of the impugned condition in the case of a subsidiary company bidder and not in the case of a newly formed company bidder or any other bidder company is clearly arbitrary and irrational.
The impugned condition is not an essential condition of eligibility but merely ancillary and subsidiary with the main object to be achieved by the said condition and thus the Respondent No. 1 cannot insist upon the strict literal compliance of the said condition - Petition allowed.
Exemption u/s 11 and 12 - Whether Respondent National Accreditation Board For Testing and Calibration Laboratories is entitled to exemption? - HELD THAT:- The positive findings of the ITAT on facts is that the Assessee is not engaged in trade, commerce and business and its dominant and prime objective is charitable in nature in accordance with Section 2(15) of the I.T. Act, 1961. The Court also notes that the Respondent is part of the central government. The Court is unable to be persuaded to hold that the findings of the ITAT are perverse. No substantial question of law arises.
Disallowance of prior period expense - AO considering that these expenses related to prior period and the same are not deductible expenditure while computing the profits of the business of current year - CIT (A), who allowed the claim of the assessee - HELD THAT:- We find that the issue of prior period expenses has earlier decided by the ld. CIT (A) in assessee’s own case for the A.Ys. 2007-08 to A.Y. 2009-10 [2015 (7) TMI 1386 - ITAT JAIPUR] whereby the disallowance was deleted by the ld. CIT(A) and no appeal against the same was preferred by the revenue. Considering that the issue involved in the years under consideration is same and also in view of the judicial precedents, we find no infirmity in the order of ld. CIT (A) and the same is confirmed. The ground of the revenue for all the three assessment years is dismissed.
Allowable business expenses - Addition of contribution made by the assessee to rehabilitation fund by not treating the same as business related expenditure - assessee has made contribution towards rehabilitation fund to milk unions - CIT (A) allowed the appeal of the assessee by directing the AO to delete the disallowance - HELD THAT:- We find that for the years under consideration, RCDF Rehabilitation and Development Fund was created as a separate trust on 26.03.2008 and was duly registered under section 12AA w.e.f. 02.05.2008 and the actual contribution made to the fund is directly connected with the business of the assessee which has resulted into benefit. Similar contribution made in A.Y. 2012-13 has been allowed by the AO. Recently, the coordinate Bench of the Tribunal in the case of Jaipur Zila Dugdh Utpadak Sahakari Sangh Ltd [2015 (7) TMI 1386 - ITAT JAIPUR] has remanded the matter to the departmental authorities to decide the matter afresh -we find no infirmity in the order of ld. CIT (A), the same is confirmed. The ground of the revenue for both the years is dismissed.
Addition made for depositing the employee’s contribution to PF and ESI beyond the prescribed time limit - whether employee’s contribution to PF and ESI are governed by provisions of sec. 43B and not by sec. 36(1)(va) read with section 2(24)(x) of the IT Act? - HELD THAT:- There is no dispute as to the fact that assessee has deposited the PF before filing of the return. The various High Courts including the Rajasthan High Court has held that if the employees contribution to PF is deposited before the due date of filing of the return, the same is allowable. See CIT vs. State Bank of Bikaner & Jaipur [2014 (5) TMI 222 - RAJASTHAN HIGH COURT] , Jaipur Vidyut Vitran Nigam Ltd. [2014 (1) TMI 1085 - RAJASTHAN HIGH COURT] and Udaipur Dugdh Utpadak Sahakari Sangh [2014 (8) TMI 677 - RAJASTHAN HIGH COURT] - Decided in favour of assessee.
The High Court of Delhi allowed IA No. 5874/2016 for production of original documents, directing the plaintiff to file certified copies within six weeks. Case CS(OS) 229/2016 was adjourned to 02.06.2016 for further submission on jurisdiction issue.
Reopening of assessment u/s 147 - grant received by the assessee from the Central Government - whether assessee had disclosed truly and fully all material facts relating to the grant received by the assessee ? - CIT (A) was of the opinion that during the course of assessment proceedings AO had not considered whether expenditure could be considered as a capital outgo or not? - HELD THAT:- When the original assessments for both the impugned assessment years were passed, the AO had with him the reply given by the assessee during the course of assessment proceedings for A. Ys. 2003-04 as well as the order of the Tribunal in assessee’s own case for A. Y. 1995-96. Thus we cannot say that the AO was not aware of the claim of the assessee during the course of original assessment proceedings. Assessee had brought to the notice of the AO the Tribunal order wherein the observations clearly indicated that expenditure incurred from the grant was of capital nature. In such circumstances it cannot be said that assessee had failed to disclose fully and truly all material facts necessary for the assessment.
Revenue also has to bring in tangible materials which had helped it to come to a conclusion that income chargeable to tax had escaped assessment. Main reason cited by the AO for coming to a conclusion that income of the assessee had escaped assessment is that the assessee had misrepresented and not furnished details of revenue expenditure claimed in the profit and loss account. In our opinion this is far from truth since the AO in the original assessment order clearly mentioned that the books were produced and verified.We are of the opinion that conditions which were required to be satisfied for invoking Section 147 of the Act for the impugned assessment years were not satisfied. We therefore set aside the assessments for the impugned assessment years. Grounds 2 and 3 of the assessee are allowed.
MAT computation for Disallowance u/s.14A - HELD THAT:- We find this issue had come up before Hon’ble Delhi High Court in the case of CIT v. Goetze (India) Ltd2013 (12) TMI 607 - DELHI HIGH COURT] wherein their Lordship held that by virtue of Explanation (i)(f) to Section 115JB(2) of the Act, expenditure relatable to any income to which Section 10 apply was to be added back to book profit for MAT computation. - Decided against assessee.
Disallowance u/s.37 - treating the expenditure out of capital grants received from Central Government, as capital outgo, and in the alternative not giving it the benefit of Section 35(1)(iv) of the Act, for scientific research - HELD THAT:- As decided in own case [2016 (4) TMI 1406 - ITAT BANGALORE] allowed the alternative claim for allowance u/s.35(1)(iv) of the Act and remitted it back to the AO for verification and quantification.
Computation of MAT computation u/s 115JB - HELD THAT:- For the purpose of profits u/s.115JB of the Act, what can be added and what can be deleted are clearly set out in Explanation to Section 115JB(2) of the Act. Only if an amount falls in any of the Explanation can there be an adjustment to the book profit. There is no case for the Revenue that expenditure disallowed by the AO for the purpose of computing total income under the normal provisions of the Act fell within any of these clauses. CIT (A), in our opinion, had correctly appreciated the dictum laid down by the Hon’ble Apex Court in the case of Indo Rama Synthetics (I) Ltd 2011 (1) TMI 1 - SUPREME COURT] - AO had added back the expenditure relating to the research as capital in nature, but did not exclude the capital grants from the income, while computing MAT. We therefore do not find any reason to interfere with the order of CIT (A). Cross appeals of the Revenue for both the years stand dismissed.
Disallowance u/s 14A - HELD THAT:- As we have already mentioned investment of the assessee had substantially gone up and the dividend income of the assessee came to ₹ 123.5 lakhs. In such circumstances, we are of the opinion that the above decision relied on by the Ld AR would not further its case. In our opinion AO was justified in applying Rule 8D(2)(iii) . We do not find any reason to interfere with the same. Ground 2 stands dismissed.
Credit u/s.115JAA - HELD THAT:- Though the CIT (A) has mentioned this ground at para 6 of its order, we find that he had not adjudicated on the said issued. Since credit if available to the assessee u/s.115JAA of the Act, has to be given, we are remitting this issue back to the file of the AO for consideration. Ordered accordingly. In the result, ground 5 of the assessee stands allowed for statistical purpose.
Dishonor of Cheque - none of the complainant was present despite of service of notice - petitioner was not present due to mistake - HELD THAT:- It is not in dispute that the complaint was pending trial from the year 2013 and there is no material on record to suggest that there had earlier been any default on the part of complainant. Even when the matter was listed on 2.6.2015, petitioner, as per his version, could not appear as he had noted down a different date and in support of such contention, he has also annexed the copy of his case diary - Evidently, a very hyper technical and pedantic approach has been adopted by the learned court below by dismissing the complaint for default. The complainant was diligently pursuing his remedies and he has also given an explanation for his non appearance on the date fixed. Even otherwise there is no reason why the complainant would stop pursuing his case, after all it is a complaint involving dishonour of cheque. That apart, it is always in the interest of justice that the cases should be adjudicated on merits.
Similar issue came up before the Hon’ble Supreme Court in Mohd.Azeem Vs A.Venkatesh & another [2002 (8) TMI 883 - SUPREME COURT] and the Hon’ble Supreme Court has held that the complaint ought not to have been dismissed by the court on account of single default on the part of complainant.
The order passed by the learned court below is extremely harsh. Moreover, the learned court below has not at all considered as to whether personal attendance of the complainant was essential on the date for the progress of the case - appeal allowed - decided in favor of appellant.
Change of method of accounting - recognized method of accounting - validity of Project Completion Method followed by the assessee - HELD THAT:- The assessee, in this case, has followed project completion method which is one of the prescribed methods by the Institute of Chartered Accountants of India. Even in terms of the revised accounting standard which was applicable for most part of the work done by the assessee the income had been correctly declared as per project completion method in the year of completion. The assessee has followed project completion method which was one of the prescribed methods and the same method has been accepted by the department in the earlier years. Department, therefore, cannot reject the method and apply percentage completion method in a subsequent year.
Project Completion Method followed by the appellant is a recognized method of accounting prescribed by the ICAI which has been regularly followed by the assessee. The assessee being a real estate developer and not a construction contractor, Project Completion Method is the right method for determining the profits. The Project Completion Method being followed should not have been disturbed by the Assessing Officer as it was being regularly followed by the assessee in earlier years also and there is no cogent reason to change the method. We, accordingly, uphold the findings of the Ld. CIT(A) on this issue.
Deduction u/s 80IB (10) - Proportionate deduction - As per the Department, the claim u/s 80IB(10) was not allowable as no separate approval for the four projects viz. Vista A, B, D & E was taken and only a consolidated approval for the entire Vista Project was taken from the GDA containing seven projects (Vista A to F and one Commercial) - HELD THAT:- We concur with the finding of the Ld. CIT(A) that the assessee was eligible to get proportionate deduction u/s 80IB(10) of the Act in respect of flats sold during the year on fulfilling the prescribed conditions.
Requirement of a separate approval for each housing project - A Housing Project may comprise of both eligible as well as ineligible units. The deduction will be available and limited to the claim on eligible units irrespective of the fact that the entire project comprising of eligible and ineligible units has been approved by the authority by way of a single approval/composite approval. Section 80IB(10) refers to the approval of a housing project but does not prescribe a pre-condition that the deduction will be available in respect of only that unit or part of the project which has been separately approved by the local authority.
Hence, it is our considered view that a separate approval for each eligible unit or project is not the intention of the Act. The Hon’ble Madras High Court in the case of Viswas Promoters (P) Ltd. vs ACIT [2012 (11) TMI 1117 - MADRAS HIGH COURT] has held that the mere fact that one of the blocks have units exceeding built-up area of 1500 sq ft per se, would not result in nullifying the claim of the assessee for the entire project. Consequently, it was held, that assessee was entitled to the benefit of deduction u/s 80IB (10(c) of the Act in respect of each of the blocks. The Pune Bench of the ITAT has held in the case of Siddhivinayak Kohinoor Venture [2013 (10) TMI 1295 - ITAT PUNE] that construction of even one building with several residential projects of the prescribed size would constitute a housing project for the purpose of section 80IB(10) of the Act. The Pune Bench further held that each block in a particular project has to be taken as an independent building and hence is to be considered a housing project for the purpose of claiming deduction u/s 80IB(10).
Whether the projections open to sky are to be included or excluded in the calculation of the built-up area of a particulars residential unit? - We find that this issue is covered in favour of the assessee by the decision of the ITAT Pune Bench in the case of Naresh T. Wadhwani [2014 (11) TMI 689 - ITAT PUNE] In the proceedings before us, the Department could not point out any judgment/judicial precedent to the contrary. We accordingly hold that the balconies open to the sky are to be excluded from the calculation of the built-up area of a particular residential unit. We, therefore, direct that the assessee be allowed the claim of deduction u/s 80IB (10) in respect of flats which have been excluded from the benefit of deduction by including the balconies open to sky for the purpose of calculating the built-up area of the individual units.
Assessee challenging the measurements of the DVO in respect of flats at Sl. no. 1 & 4 of the chart - It is the assessee’s contention that the correct measurement is 988.79 sq ft whereas the DVO has calculated the build up area at 1029.28 sq. ft. It is also the assessee’s plea that it had not been afforded a proper opportunity to explain the discrepancy before the Ld. CIT (A). Hence in the interest of justice, we deem it proper to restore this limited issue of discrepancy in measurement, as claimed by the assessee, to the file of the Assessing Officer for fresh examination and adjudication thereon after giving due opportunity to the assessee to present its case. In the result, the appeal of the assessee is partly allowed.
Capital gain computation - adopting the value determined by the DVO - Rejecting sale value declared by the assessee. - HELD THAT:- The very fact that the Assessing Officer has called upon the assessee to raise his objections presuppose that the Assessing Officer is not bound by the DVO’s report and he has got a duty to redetermine the value, but the Assessing Officer chose to proceed as if he is bound by the DVO’s report, which speaks of itself. On the top of it, the learned Commissioner- (Appeals) was of the opinion that the ITAT. Chennai Bench has directed the Assessing Officer to adopt DVO’s report (even if it is wrong), overlooking the legal position that the DVO’s report cannot be treated as sacrosanct and it is amenable to adjustment, if the assessee is able to raise proper objections.
In the instant case, the assessee has relied upon various orders of the ITAT to indicate that the value determined should be based upon a sale instance which should be proximate to the date of actual sale. The assessee has also raised an objection with regard to the increase in sale instance rate by 2% per month, but even till date, Revenue could not point out as to what is the sanctity of that method being followed by the DVO.
We are of the view that the DVO completely failed in his duty to appropriately make the valuation. Even if sale instance rate is taken into consideration, the difference between the sale instance rate and the rate declared by the assessee is within the permissible limits, and therefore, in the light of the orders of the ITAT placed before us, the Assessing Officer has not made out a case for adopting the value determined by the DVO. In the circumstances, we delete the addition made by the Assessing Officer, accepting the sale value declared by the assessee.
Levy of penalty u/s 271(1)(c) - unexplained credit under section 68 - HELD THAT:- The assessee has not produced any materials to justify his stand that the penalty is not warranted in all these cases. The assessee has also not furnished the names and complete addresses of persons from whom he received the loans, the date of transaction and mode of payment, confirmation statements or any other relevant materials to establish the creditworthiness of the creditors.
In the absence of these details, it is not possible for the Revenue to make any enquiries of its own to find the genuineness of the transactions. In the case of unrecorded bonded loans, the assessee himself has conceded that this amount represents unaccounted income of the assessee. The assessee also could not explain the source of investment made towards unredeemed pawn items. For the assessment years 2006-07 & 2007-08 source of investment could also not be established. For the above mentioned we do not have any other options but to confirm the penalty levied on all these counts. Accordingly penalty levied on all these counts are hereby confirmed.
Levying penalty in regard to addition made on account of agricultural income, investment made in purchase of land to the extent and investment made in M/s.Ramdev Jewellery - AO has made addition only for the reason that the assessee’s wife did not declare any agricultural income in her return of income with respect to the adjacent agricultural land owned by her - The quantum of agricultural income declared by the assessee is also minimal and there is no substantial reason to disbelieve the claim of the assessee.
Revenue has also not brought any evidence to show that the assessee was not indulging in agricultural activities. Similarly, addition towards purchase of land to the extent of ₹ 2,08,000/- is made because the AO opined that the assessee had paid on-money. However, other than oral statements, no other materials or persons were examined to conclusively prove that the assessee had received on-money. Further, investment in Ramdev Jewellery for ₹ 50,000/- is a nominal amount and there can be a presumption that the assessee could possess such amount from his tax paid income. We hereby direct the AO to delete the penalty made on account of the incorrect claim of agricultural income for all the relevant assessment year, investment in purchase of land to the extent of ₹ 2,08,000/- and investment in Ramdev Jewellery for ₹ 50,000/- for the assessment year 2005-06. Appeals of the assessee are partly allowed.
Appeal heard ex-parte - non appearance by assessee on various occasions - continuous adjournments - HELD THAT:- None appeared on behalf of the assessee and again no request for adjournment was sought on behalf of the assessee. The appeal was once again adjourned to 18.05.2016 in the interest of justice. However, on 18.05.2016 none appeared on behalf of the assessee nor any adjournment was sought by the assessee. It appears that the assessee is not interested in pursuing the appeal. In the absence of any appearance by the assessee in person or through AR inspite of service of several notices for hearing, we proceed to dispose of the appeal ex-parte qua the assessee after considering the material available on record and hearing the respondent/Revenue on merits in terms of Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963.
When the captioned appeal was called for hearing on 18.05.2016, we find that the assessee has filed only appellate order under section 250 of the Act dated 25.11.2013 and has not even filed primary document i.e. assessment order along with the Memo of Appeal. In the absence of impugned assessment order, we are unable to decide the issue on merits. We similarly find that the grounds of appeal are argumentative and are not in conformity with Rule 8 of the Income Tax (Appellate Tribunal) Rules, 1963. The appeal of the assessee is therefore dismissed in limine.
Dishonor of Cheque - legally enforceable debt or not - rebuttal of presumption - Sections 138 and 139 of the N.I. Act - HELD THAT:- Reading of Sections 138 and 139 of the N.I. Act goes to show that out of the three ingredients comprising Section 138, a presumption is available in favour of holder of a cheque that the same had been issued for discharge of any debt or other liability under Section 139 of the N.I. Act. Section 139 of the N.I. Act does not give rise to a presumption with regard to existence of legally enforceable debt. A complainant has to discharge this burden of existence of a legally enforceable debt and if he fails to do so, merely because he is a holder of a cheque issued by the accused, conviction of the accused will not be warranted.
From the evidence on record, it is clear that the complainant came to know the accused/respondent only from the year 2002. It is not in dispute that a sum of ₹ 2,00,000/- in cheque was paid on or about 3(three) months from the date of execution of the Exhibit -1 agreement. Neither in the notice nor in the complaint, the complainant referred to the payment of such amount by the respondent. The appellant had not taken a plea that prior to execution of Exhibit-1 agreement, there had been other previous transactions - Law is well settled that in an appeal against acquittal, the appellate Court has the power to reappraise the evidence on record to come to its own conclusion. While doing so, it has an obligation to consider each and every matter on record having a bearing on the questions of fact and the reasons assigned by the court below in support of the order of acquittal. If two views are reasonably possible on the basis of the evidence on record, the view which is favourable to the accused must be preferred. If the view taken by the trial court while acquitting the accused is a possible and reasonable view, the High Court ought not to interfere with such an order of acquittal only because of the fact that it is possible to take a contrary view.
Violation of Fundamental Human Rights - rights of differently abled persons - petitioner was forcefully made to de-board the flight for her physical disability - It is submitted by the Petitioner that the Union of India (Respondent No. 1) has an obligation to ensure that its citizens are not subject to such arbitrary and humiliating discrimination - HELD THAT:- The irresistible conclusion is that Jeeja Ghosh was not given appropriate, fair and caring treatment which she required with due sensitivity, and the decision to de-board her, in the given circumstances, was uncalled for. More than that, the manner in which she was treated while de-boarding from the aircraft, depicts total lack of sensitivity on the part of the officials of the airlines. The manner in which she was dealt with proves the assertion of Shapiro as correct and justified that 'non-disabled do not understand disabled ones'.
It is not in dispute that the Pilot as well as the Crew members of the airlines are supposed to ensure the safety of all the passengers and a decision can be taken to de-board a particular passenger in the larger interest and safety of other co-passengers. The question is, whether such a situation existed when Jeeja Ghosh was de-boarded? Whether this decision was taken by the airlines after taking due deliberations and with medical advise? Unfortunately, the answer is a big 'NO'. Jeeja Ghosh is a disabled person who suffers from cerebral palsy. But her condition was not such which required any assistive devices or aids. She had demanded assistance regarding her baggage at the time of security check-in, from the check-in counter. For boarding of the aircraft, she came of her own. This was noticed not only by the persons at the check-in counter but also by security personnel who frisked her and the attendant who assisted her in carrying her baggage up to the aircraft. Even if we assume that there was some blood or froth that was noticed to be oozing out from the sides of her mouth when she was seated in the aircraft (though vehemently denied by her), nobody even cared to interact with her and asked her the reason for the same. No doctor was summoned to examine her condition. Abruptly and without any justification, decision was taken to de-board her without ascertaining as to whether her condition was such which prevented her from flying. This clearly amounts to violation of Rule 133A of Rules, 1937 and the CAR, 2008 guidelines.
In international human rights law, equality is founded upon two complementary principles: non-discrimination and reasonable differentiation. The principle of non-discrimination seeks to ensure that all persons can equally enjoy and exercise all their rights and freedoms. Discrimination occurs due to arbitrary denial of opportunities for equal participation. For example, when public facilities and services are set on standards out of the reach of persons with disabilities, it leads to exclusion and denial of rights. Equality not only implies preventing discrimination (example, the protection of individuals against unfavourable treatment by introducing anti-discrimination laws), but goes beyond in remedying discrimination against groups suffering systematic discrimination in society. In concrete terms, it means embracing the notion of positive rights, affirmative action and reasonable accommodation.
Jeeja Ghosh herself is a living example who has, notwithstanding her disability, achieved so much in life by her sheer determination to overcome her disability and become a responsible and valuable citizen of this country. A little care, a little sensitivity and a little positive attitude on the part of the officials of the airlines would not have resulted in the trauma, pain and suffering that Jeeja Ghosh had to undergo. This has resulted in violation of her human dignity and, thus, her fundamental right, though by a private enterprise (Respondent No. 3) - Respondent No. 3 acted in a callous manner, and in the process violated Rules, 1937 and CAR, 2008 guidelines resulting in mental and physical suffering experienced by Jeeja Ghosh and also unreasonable discrimination against her, we award a sum of ₹ 10,00,000 as damages to be payable to her by Respondent No. 3 within a period of two months from today.
Capital asset being trademark - Treatment of asset transferred viz. “Trade Mark” as short term capital gains and disallowing the claim u/s.54F - Trust v/s settlement - difference between Gift and Settlement and the Explanation-1(i)(b) to Sec.2(42A) r.w.s.49(1)(ii) - HELD THAT:- There are striking differences between a settlement and a gift. Under no circumstances can a settlement be equated to a gift. The appellant’s contention of importing the definition of gift from the Gift Tax Act, 1958, which is no longer in existence, is not a valid proposition.
Whether the capital asset is a Long Term Capital Asset or a Short Term Capital Asset under the Income Tax Act? - In our opinion the artificial distinction made by the lower authorities with reference to the Gift and Settlement is not appropriate and we are of the opinion that for the purpose of Sec.49(1)(ii), there is no difference between the gift and settlement and in the present case, the settlement made by Mrs.Malathy Rangaswami & Mr.T.T.Ashok in favour of Mrs.Maya Varadarajan to be considered as Gift in terms of Sec.49(1)(ii) of the Act and accordingly, Explanation-1(i)(b) to Sec.2(42A) to be applied so as to compute the holding period of the asset after considering the holding period of the said capital asset by previous owner i.e. SETTLOR. In the present case, the date from which “SETTLOR” holding the title over the Registered Trade Mark “PREETT” is not available on record and we are not in a position to give a finding whether transfer of this Trade Mark by the present assessee would give rise to short/long term capital gains. Hence, this issue is remitted to the file of AO to determine the period of holding of this impugned capital asset and decide the issue afresh.
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