|
Advanced Search Options
Case Laws
Showing 61 to 80 of 920 Records
-
2010 (7) TMI 1177
Issues Involved:1. Right of sale of vehicles in custody. 2. Interpretation and application of Sections 451 and 457 CrPC. 3. Adherence to the Apex Court's directives in Sunderbhai Ambalal Desai v. State of Gujarat. Summary:Issue 1: Right of Sale of Vehicles in CustodyThe petitions seek the right of sale of vehicles placed in the custody of the petitioners under orders of the lower courts. In Crl. O.P. No. 5278 of 2007, the petitioner, a non-banking finance company, financed a vehicle under a hypothecated loan agreement. Upon default by the borrower, the vehicle was seized by the police in connection with Crime No.1135 of 2006 for offences u/s 4(1)(aa) & 4(1)(g). The Judicial Magistrate directed the return of the vehicle to the petitioner with conditions, including that the vehicle not be sold. The petitioner filed against this order. In Crl. O.P. No. 9744 of 2010, the petitioner's vehicle was seized by the police in connection with Cr. No.36 of 2009 for offences u/s 341, 323, 363, and 506(i) IPC. The Judicial Magistrate directed the return of the vehicle with conditions. The petitioner sought permission to sell the vehicle after it was damaged by fire, which was denied by the trial court, leading to the current petition. Issue 2: Interpretation and Application of Sections 451 and 457 CrPCLearned senior counsel Sri. Ashok Kumar highlighted that Chapter 34 of the CrPC, comprising Sections 451 to 459, deals with the disposal of property. Section 451 CrPC allows for the custody and disposal of property pending trial, and Section 457 CrPC deals with the procedure by police upon seizure of property. The judgment emphasized the importance of the Apex Court's decision in Sunderbhai Ambalal Desai v. State of Gujarat, which directs that vehicles need not be held at police stations and courts until the trial is completed. The judgment also referenced the decision in Bharath Mehta v. State by Inspector of Police, Chennai, which directed the return of the vehicle to the financier. Issue 3: Adherence to the Apex Court's Directives in Sunderbhai Ambalal Desai v. State of GujaratThe judgment reiterated the Apex Court's directives in Sunderbhai Ambalal Desai v. State of Gujarat, emphasizing that vehicles should not be kept at police stations for long periods. The court should pass appropriate orders for the return of vehicles to their owners or the person from whom they were seized, taking appropriate bonds and guarantees. The judgment stressed that the return of vehicles and permission for sale should be the norm rather than the exception, and that evidence relating to vehicles can be held in altered forms, such as photographs and videography. Conclusion:The Criminal Original Petitions are allowed. The lower court shall, upon production of a certified copy of this order, fix a date for the production of the vehicle. Upon production, the lower court shall cause photographs of the vehicle to be taken and record Panchnama thereof. The petitioner shall then be at liberty to effect the sale of the vehicle. The photographs and Panchnama prepared shall be read as evidence in lieu of marking the vehicles. The Registry is directed to circulate a copy of this order to all Sessions/Metropolitan/Judicial Magistrate Courts.
-
2010 (7) TMI 1176
The Supreme Court order in 2010 (7) TMI 1176 - SC remains part-heard as Mr. Rupesh Kumar, counsel for the appellants, was still making submissions when the Court adjourned for the day.
-
2010 (7) TMI 1175
Seeking grant of registration u/s 12AA - Validity of signing of application for grant of registration u/s 12A/12AA of the Act by the CEO - Qualify as charitable activities u/s 2(15) - Objects “for advancement of the objects of the general public utility Or Commercial Profit - Appellant Indore Development Authority (“IDA”) is a statutory authority established by the Government of MP in exercise of its powers conferred u/s 38(1) of the Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973.
HELD THAT:- In the present appeal, since the department accepted the returns/other documents, signed by the CEO, therefore, the department is not permitted to take a reverse stand on the application filed for getting registration u/s 12A/12AA. If the scheme of the Act of the IDA is analysed, the first part of the Act relates to appointment of Planning Authorities. Chapter two containing sec. 3 contemplates appointment of an officer to be a Director, Town & Country Development Planning and sec. 46 provides that every Town & Country Development Authority shall have a CEO who shall act as secretary of such authority.
Since CEO is statutorily appointed secretary of IDA, he is a “Principal Officer”, the requirement of sec. 2(35) of the I.T. Act is fulfilled. Even otherwise, the department has assessed IDA as local authority except for exemption u/s 10(20) of the Act. The mode of making an application is prescribed in Rule 17A, according to which, an application for registration shall be made in Form 10A. Section 12A/12AA does not prescribe any mode of signing the application. Under these circumstances, one may refer to the provisions for signing of return enjoined u/s 140 of the Act. As mentioned earlier, the returns signed by the CEO were duly assessed and accepted by the department, therefore, for signing application u/s 12A/12AA by a person/authority who is competent to sign a return of such authority cannot be said to be invalid. Moreover, the Chairman of IDA has specifically authorized the CEO to take necessary/appropriate steps towards application for registration u/s 12A/12AA which would naturally include signing of prescribed form, therefore, the order of the ld. CIT dismissing the application as invalid, on this ground, is not justified. During hearing, an alternative plea was raised by the ld. Counsel for the assessee that for curable defect, if any, a duly signed application by the Chairman was filed by the assessee during the course of proceedings itself, therefore, the defect was cured and such application should have been treated as date back to the original application, therefore, this ground of the assessee is allowed.
In our humble opinion , the assessee is not engaged in activities of relief to poor, education, medical relief and/or advancement of any other objects of general public utility as defined in sec. 2(15) of the Act. Rather the assessee is actually not carrying out any activity of advancement of objects of general public utility which can be considered to be “charitable” rather the primary object of the assessee is to earn profit only. In other words, the purpose of the assessee is not an advancement of object of general public utility rather the activities involve activity of profit, therefore, these cannot fall within the purview of sec. 2(15) rather the assessee is engaged in active business and there is no restriction in its objects of making profit. There is a possibility that at the time of creation of these authorities like the present assessee i.e. Indore Development Authority, Punjab Urban Development Authority, Jalandhar Urban Development Authority or like any other may be pious but ultimately, these authorities turned into a commercial organization with the sole intention to earn maximum profit even at the cost of poor farmers whose lands are acquired, for namesake considered to be backbone of this great country, are paid negligible amount as compensation and after incurring development cost, the same land is sold at commercial rates.
Further, the profit motive of the assessee is not incidental to the objects of the assessee authority rather there is a systematic commercial activity with the intention to earn maximum profit. It is not the case that the assessee, after earning huge profit from such commercial activities, is spending such profit on charitable activities rather there is no obligation on the assessee to spend its earnings for charitable purposes. These authorities have become a great source of earning income in itself and the assessee authority is no exception to it. It is common knowledge/fact that the assessee authority is selling the developed plots on auction to the highest bidder and one such example is sale to Reliance near Sayaji Hotel as asserted by the learned CCIT DR which was not controverted by the assessee. Now a days because of this trend of auction, it has become very difficult for a common man to purchase a plot for shelter from the assessee authority.
It is pertinent to mention here that the legislature in their wisdom amended sec. 2(15) through the Finance Act, 2008 in the case of Trade Association claiming both to be charitable institution and mutual organization by adding a proviso which states that “advancement of any other object of general public utility” shall not be a charitable purposes if it involves the carrying on of (a) any activity in the nature of trade, commerce or business or (b) any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of huge or application or retention or the income from such activity.
By circular no.11 of 2008 dated 19.12.2008, it has been further clarified whether the assessee has for its object, “the advancement of any other objects of general public utility” is a question of fact. If such assessee engages in any activity in the nature of trade, commerce or business or render any service in relation to trade, commerce or business, it would not be entitled to claim that its objects are of charitable purposes. In such a case, the objects of “general public utility” will only be a “mask” or a device to hide the true purpose which is trade, commerce or business or the rendering of any service in relation to such trade, commerce or business. Each case would, therefore, be decided on its own facts and no generalization is possible, therefore, any misuse was intended to be removed by this circular. The very concept of “charity” denotes altruistic thought and action. It objects must necessarily be to benefit others rather than one’s self. The action which follows from charitable thinking is always directed as benefit to others. It is this direction of thought and efforts and not the result what is done in term of financially measurable gain which determines that it is charitable [quoted from Sole Trustee Lok Shikshan Trust vs. CIT [ 1975 (8) TMI 1 - SUPREME COURT]].
Since the main predominant object of the assessee is profit making, therefore, we find no infirmity in the impugned order in denying registration u/s 12A/12AA of the Act to the assessee. Thus, on this issue, we affirm the stand taken by the ld. first appellate authority.
Finally, the appeal of the assessee is partly allowed.
-
2010 (7) TMI 1174
Issues Involved:
The appeal filed by the assessee against the order of CIT(A) for AY 2006-07 u/s 143(3) of the IT Act regarding computation of capital gain and exemption u/s 54(2).
Computation of Capital Gain:
The assessee declared total income of &8377; 4,12,600/- and showed nil capital gain on sale of ancestral property, valuing it at &8377; 22,750/- per sq.yard as on 1.4.1981. However, the AO valued the property at &8377; 5,000/- per sq.mtr., resulting in assessed income of &8377; 1,99,27,800/-. The AO also disallowed exemption u/s 54(2) for not utilizing the capital gain amount deposited in the bank account. The CIT(A) upheld these additions, leading to the current appeal.
Capital Gain Valuation Discrepancy:
The AO's valuation of the property differed significantly from the assessee's valuation based on a registered valuer's report. The AO considered the fair market value as &8377; 5,000/- per sq.mtr., while the assessee claimed &8377; 22,750/- per sq.yard. The assessee argued that the property's location and surroundings warranted a higher value, but failed to provide sufficient evidence to support this claim. The Tribunal directed a detailed market enquiry and submission of sale deeds for similar properties to substantiate the valuation.
Exemption u/s 54(2) for Capital Gain:
The assessee deposited &8377; 25 lakhs in the capital gain account before the due date, but the AO denied exemption u/s 54(2) for not utilizing the amount within the statutory period for constructing a house. The Tribunal held that non-utilization should be assessed only after three years from the transaction date, not in the relevant assessment year. The matter was remanded to the AO for verification and decision as per law.
Conclusion:
The Tribunal allowed the appeal for statistical purposes, directing a reevaluation of the capital gain computation and exemption u/s 54(2) based on the discrepancies in valuation and utilization of the deposited amount. The case was remanded to the AO for further examination and decision in accordance with the law.
Decision Date:
The decision was pronounced in the open Court on 23rd July, 2010.
-
2010 (7) TMI 1173
Issues Involved:
1. Disallowance u/s 145A of the I.T. Act.
2. Disallowance u/s 14A of the I.T. Act.
3. Disallowance u/s 80IA of the I.T. Act on account of electricity tax.
4. Disallowance u/s 80IA of the I.T. Act on account of allocation of indirect expenses.
5. Disallowance u/s 80IA of the I.T. Act on receipts from sale of sludge and steam.
6. Levy of interest u/s 234A, 234B, 234C, and 234D of the I.T. Act.
7. Disallowance u/s 40A(9) of the I.T. Act on subsidy paid for employees' canteen.
Summary:
1. Disallowance u/s 145A of the I.T. Act:
The assessee's ground of appeal regarding the disallowance of Rs. 2,62,40,633/- u/s 145A was dismissed as infructuous since the AO had already provided relief in the order passed u/s 154.
2. Disallowance u/s 14A of the I.T. Act:
The assessee did not press the ground related to the disallowance of Rs. 5,00,000/- u/s 14A, and it was dismissed as not pressed.
3. Disallowance u/s 80IA of the I.T. Act on account of electricity tax:
The AO excluded 5% of electricity charges amounting to Rs. 4,03,06,140/- from the exemption claimed u/s 80IA. The CIT(A) confirmed this action. However, the Tribunal, following its own decisions for the previous assessment years, allowed the assessee's claim, stating that the electricity tax should be included in the market price for the purpose of deduction u/s 80IA.
4. Disallowance u/s 80IA of the I.T. Act on account of allocation of indirect expenses:
The AO allocated 25% of certain indirect expenses to the eligible business and disallowed Rs. 68,09,675/- from the exempt amount. The CIT(A) upheld this action. The Tribunal, following its own decisions for the previous assessment years, allowed the assessee's claim, stating that only income derived from the industrial undertaking should be considered for deduction u/s 80IA.
5. Disallowance u/s 80IA of the I.T. Act on receipts from sale of sludge and steam:
The AO disallowed Rs. 53,31,084/- from the exemption claimed u/s 80IA on account of sale of sludge and steam. The CIT(A) confirmed this action. The Tribunal, following its own decisions for the previous assessment years, held that deduction u/s 80IA is not allowable on the sale of sludge but is allowable on the sale of steam, and thus partly allowed the assessee's claim.
6. Levy of interest u/s 234A, 234B, 234C, and 234D of the I.T. Act:
The Tribunal held that charging of interest under sections 234A, 234B, 234C, and 234D is mandatory and consequential in nature, and thus dismissed the assessee's ground.
7. Disallowance u/s 40A(9) of the I.T. Act on subsidy paid for employees' canteen:
The AO disallowed Rs. 22,80,000/- u/s 40A(9) being subsidy paid for employees' canteen. The CIT(A) allowed the claim of the assessee, following the orders of the Tribunal in the assessee's own case for previous assessment years. The Tribunal, following its own decisions for the previous assessment years, dismissed the Revenue's appeal on this issue.
Conclusion:
The appeal filed by the assessee was partly allowed, and the appeal filed by the Revenue was dismissed.
-
2010 (7) TMI 1172
Issues Involved:
1. Disallowance of labour charges amounting to Rs. 25,000.
2. Addition on account of undervaluation of closing stock amounting to Rs. 18,65,290.
3. Disallowance u/s 40(a)(ia) for non-deduction of tax at source u/s 194J on advertising expenses amounting to Rs. 4,66,176.
Summary:
1. Disallowance of Labour Charges:
The assessee did not press the ground relating to the disallowance of labour charges amounting to Rs. 25,000. Consequently, this ground was dismissed.
2. Addition on Account of Undervaluation of Closing Stock:
The assessee, a retail trader of silver and gold jewellery, valued its closing stock at Rs. 483 per gram, which was Rs. 70 per gram less than the purchase price of Rs. 552 per gram. The Assessing Officer (AO) added Rs. 18,65,290 to the closing stock valuation, arguing that the valuation should be at least at the cost price. The CIT(A) upheld the AO's decision, suggesting that the FIFO method should be used instead of the LIFO method.
The Tribunal found that the assessee consistently followed the weighted average method for valuing the closing stock at the lower of cost or market value. The Tribunal noted that the AO did not revalue the opening stock similarly, which is necessary as per the precedent set by the Calcutta High Court in CIT v. Bengal Jute Mills Co. Ltd. The Tribunal held that the valuation adopted by the assessee was in accordance with a consistent system of accounting and directed the deletion of the addition of Rs. 18,65,290.
3. Disallowance u/s 40(a)(ia) for Non-Deduction of Tax at Source u/s 194J on Advertising Expenses:
The AO disallowed Rs. 4,66,177 u/s 40(a)(ia) for non-deduction of tax at source u/s 194J on payments made for advertising expenses. The CIT(A) upheld this disallowance but directed that the expenses be allowed in the year in which TDS is paid.
The Tribunal noted that the payments were made to copywriters and artists for advertising, which might not fall under the purview of professional services u/s 194J. The Tribunal referred to CBDT Circular No. 714, which clarifies that tax at source for advertising expenses should be deducted u/s 194C and not u/s 194J. The Tribunal restored the issue to the AO for fresh consideration to determine the applicability of Section 194J in light of the CBDT Circular.
Conclusion:
The appeal filed by the assessee was partly allowed. The addition on account of undervaluation of closing stock was deleted, and the issue of disallowance u/s 40(a)(ia) was remanded to the AO for fresh consideration.
-
2010 (7) TMI 1171
Issues involved: Department seeking rectification of order u/s 2(22)(e) for non-consideration of ground raised in appeal.
Summary:
The Department filed a Miscellaneous Application seeking rectification of the order passed by the Bench in I.T.A. No. 1825/Mds/2008, contending that the ground raised in para 2.4 of the appeal was not considered. The Department argued that the liability u/s 2(22)(e) attaches when the loan is given to the shareholder, irrespective of subsequent repayments. The Counsel for the assessee opposed the application, stating that the issue raised was argumentative and did not warrant a review as the appellate order had already attained finality. The Tribunal, after hearing both sides and considering the material on record, found that the issue had been duly considered in the order and dismissed the Department's application for rectification.
The AO treated a loan amount as 'deemed dividend' u/s 2(22)(e) in the hands of the assessee, a holding company of its subsidiary. The CIT(A) noted that the assessee had a 'current account' with its subsidiary, and the closing credit balance could not be considered a 'payment' within the meaning of section 2(22)(e). The Tribunal upheld this view, stating that the addition made in the assessment year was unsustainable based on this ground alone. The Tribunal clarified that it did not delve into the other reasons given by the CIT(A) for deleting the addition.
In conclusion, the Tribunal found that all aspects of the matter had been considered in the order, and no valid ground for rectification was found. The Department's application was dismissed for lacking merit.
-
2010 (7) TMI 1170
Challenged the power of HC issuing writ of mandamus - return of title deeds - public sector Bank "State" under Article 12 - HELD THAT:- On facts we have found that the terms of the policy do not give room to any ambiguity as to the risk covered by the first respondent. We are also of the considered opinion that the liability of the first respondent under the policy arose when the default of the exporter occurred and thereafter when the Kazakhstan Government failed to fulfil its guarantee. There is no allegation that the contracts in question were obtained either by fraud or by misrepresentation. In such factual situation, we are of the opinion, the facts of this case do not and should not inhibit the High Court or this Court from granting the relief sought for by the petitioner.
From the recent decision in Karnataka State Forest Industries Corporation v. Indian Rocks [2008 (10) TMI 719 - SUPREME COURT] It is clear that, (a) in the contract if there is a clause for arbitration, normally, writ court should not invoke its jurisdiction; (b) the existence of effective alternative remedy provided in the contract itself is a good ground to decline to exercise its extraordinary jurisdiction under Article 226; and (c) if the instrumentality of the State acts contrary to the public good, public interest, unfairly, unjustly, unreasonably discriminatory and violative of Article 14 of the Constitution of India in its contractual or statutory obligation, writ petition would be maintainable. Hence, Writ petition is maintainable even in contractual matters.
In the case on hand, it is not in dispute that the appellant- Bank, being a public sector Bank, discharging public functions is "State" under Article 12. In view of the settlement of the dues on the date of filing of the writ petition by arrangement made through another Nationalized Bank, namely, State Bank of India and the statement of accounts furnished by the appellant-Bank subsequent to the same i.e. on 14.05.2009 is 0.00 (nil) outstanding, we hold that the High Court was fully justified in issuing a writ of mandamus for return of its title deeds. Therefore, we are unable to accept the claim of the appellant-Bank and on the other hand, we are in entire agreement with the direction issued by the learned Single Judge affirmed by the Division Bench. Consequently, the appeal of the Bank is dismissed. The appellant-Bank is directed to return the title deeds deposited by the respondent-Company within a period of two weeks from today. With the above direction, the civil appeal is dismissed. No order as to costs.
-
2010 (7) TMI 1169
Issues Involved: Appeal against duty demand, reversal of CENVAT credit, penalty imposition, allegations of clandestine removal, plea of time limitation.
Duty Demand Set Aside:
The Appellate Tribunal, CESTAT Chennai, heard the appeal against the Commissioner (Appeals) order setting aside the duty demand of Rs. 81,058 on finished goods found short. The case was based on the discrepancy between physical stock and goods stock in the Annual Report of the assessee-company, a manufacturer of switches and sockets. An amount of Rs. 29,10,650 was adjusted in the books of account. The Tribunal upheld the charge of clandestine removal, stating that finished goods found short were not accounted for in clearances from the factory. The plea of time limitation was rejected, as it cannot be advanced in cases of clandestine removal.
Reversal of CENVAT Credit:
The Tribunal addressed the irregular reversal of CENVAT credit on raw materials and components found short, as well as on raw materials in intermediate goods found short. The plea for setting aside the penalty was not accepted, as the charge of clandestine removal was upheld. The Tribunal referred to a previous decision holding that a mismatch in the value of clearances in the balance sheet and Central Excise returns is indicative of clandestine clearance, thus allowing the appeal of the Revenue.
Conclusion:
In conclusion, the Appellate Tribunal, CESTAT Chennai, set aside the duty demand on finished goods found short, upheld the charge of clandestine removal, and allowed the appeal of the Revenue based on the mismatch in clearances as per the balance sheet and Central Excise returns.
-
2010 (7) TMI 1168
Issues involved: Assessment of interest income u/s Government orders, conversion of loan amount to equity, cancellation of interest income assessment by Tribunal, dismissal of appeals by department.
The High Court of Kerala heard the case regarding the assessment of interest income at the hands of the respondent-assessee, a Government of Kerala company, which had given advances to two other companies under the control of the Kerala Government. The loans were advanced under Government orders, and since no interest was received from the loanee companies, the respondent converted the loan amount to equity based on the Government's instructions. The Board of Directors of the respondent accepted the Government's proposal, allowing the loan to be converted into equity shares. Despite the respondent's request for interest payment during the period the loan amounts were retained, no interest was received or agreed to be paid by the loanee companies. The Tribunal cancelled the assessment of interest income, stating that as the loans were treated as advances for investments in equity, and there was no accrual or receipt of interest, there was no scope for assessment. The High Court agreed with the Tribunal's finding, emphasizing that as long as the department had no evidence of interest accruing to the assessee, there was no basis for assessment. The Court noted that the other questions raised by the department were not considered by the Tribunal, and therefore, those questions did not arise from the Tribunal's orders. Consequently, the Court dismissed all three appeals filed by the department.
-
2010 (7) TMI 1167
The appellate tribunal in Chennai allowed the Revenue's appeals partly, setting aside penalties but confirming demands and interest on denial of capital goods credit for items like Beams/MS plates/MS joists/MS steels. The decision was based on a Larger Bench ruling in the case of Vandana Global Ltd. & Others.
-
2010 (7) TMI 1166
Issues Involved:1. Quashing of complaints u/s 138 of the Negotiable Instruments Act (N.I. Act). 2. Procedure for summary trial u/s 138 N.I. Act. 3. Role of High Court and Metropolitan Magistrate (MM) in such cases. 4. Rights and obligations of the accused and complainant. Summary:Issue 1: Quashing of Complaints u/s 138 N.I. ActThe High Court is inundated with petitions u/s 482 Cr.P.C. seeking to quash complaints u/s 138 N.I. Act, arguing that MMs cannot recall their own summoning orders. Petitioners rely on Adalat Prasad vs. Rooplal Jindal and Others, which states that if a Magistrate takes cognizance without allegations or material against the accused, the order may be vitiated, and the remedy lies in invoking section 482 Cr.P.C. However, the petitions before the Court seek quashing based on various defenses like the petitioner not being a Director at the relevant time, being a sleeping partner, or the cheque being issued without consideration. These defenses should be raised before the MM, not the High Court. Issue 2: Procedure for Summary Trial u/s 138 N.I. ActSection 143 of N.I. Act mandates that offences u/s 138 be tried summarily by Judicial Magistrate of First Class or MM, in accordance with sections 262 to 265 Cr.P.C. If the MM finds that a sentence exceeding one year may be necessary, they must pass an order to try the case as a summon trial. Section 145 allows the complainant to give evidence by affidavit, which should be read at both pre-summoning and post-summoning stages unless the MM orders otherwise. The current practice of MMs, which involves recalling complainants for evidence post-summoning, is contrary to the summary trial provisions. Issue 3: Role of High Court and Metropolitan Magistrate (MM) in Such CasesThe High Court should not entertain petitions that seek to quash summoning orders based on defenses that should be raised before the MM. The MM should follow the summary trial procedure, ensuring that the accused discloses their defense upon appearance. The High Court cannot usurp the powers of the MM and must direct petitioners to present their defenses at the MM level. Issue 4: Rights and Obligations of the Accused and ComplainantThe accused must disclose their defense upon appearance and can file necessary documents and applications to recall witnesses for cross-examination. The argument that the accused has a right to silence under Article 21 of the Constitution is misconceived in the context of section 106 of the Indian Evidence Act, which places the onus of proving defenses on the accused. The complainant's affidavit and documents filed with the complaint are sufficient evidence unless challenged by the accused. Conclusion:The petitions are dismissed, and petitioners are directed to appear before the concerned MM to proceed with the trial as per the summary trial procedure outlined. A copy of this judgment is to be circulated among District Judges.
-
2010 (7) TMI 1165
Issues involved: The first issue is the deletion of addition of labor charges made by the Assessing Officer under section 40A(2) of the Income Tax Act. The second issue is the deletion of the estimated addition of depreciation made by the Assessing Officer.
Issue 1 - Labor Charges:
The Revenue appealed against the deletion of an addition of Rs. 17,83,410 made by the Assessing Officer on account of labor charges. The CIT(A) deleted the addition, stating that the Assessing Officer did not prove the expenditure was excessive or unreasonable. The CIT(A) found that the assessee outsourced labor work to meet technical specifications and standards, avoiding delays in services. The CIT(A) held that the Assessing Officer was unjustified in disallowing the labor charges. The ITAT confirmed the CIT(A)'s decision, noting that the assessee provided complete details of labor payments and that the Assessing Officer failed to prove unreasonableness in the payments. The ITAT dismissed this issue of the Revenue's appeal.
Issue 2 - Depreciation:
The Revenue appealed against the deletion of an estimated addition of Rs. 2.50 lakh on depreciation made by the Assessing Officer. The CIT(A) admitted new evidence, a certificate from M/s. Santi Consulting Engineers, without confronting it to the Assessing Officer. The ITAT decided that the new evidence needed re-verification by the Assessing Officer. The assessee's counsel agreed to set aside the issue for the Assessing Officer to consider the new evidence. Therefore, this issue of the Revenue's appeal was set aside for reconsideration by the Assessing Officer.
In conclusion, the ITAT upheld the deletion of the labor charges addition but set aside the depreciation issue for further verification by the Assessing Officer.
-
2010 (7) TMI 1164
Issues involved: Claim of depreciation on windmills including civil and electrical works.
Summary:
In the present case, the assessees appealed against the restriction imposed by the CIT(A) on their claim of depreciation on windmills, specifically on the civil and electrical works associated with setting up the windmills. The assessees argued that the civil and electrical works were integral to the windmill installation and should be considered part of the windmill for depreciation purposes. The Assessing Officer (A.O.) initially disallowed the claim, stating that civil work and electrical fittings were only eligible for 10% depreciation. However, upon further review, the A.O. acknowledged that the civil work and electrical fittings were indeed for the installation of the windmill. The assessees contended that they should be allowed higher depreciation rates on these components as well. The dispute centered around whether the civil and electrical works could be considered essential for the windmill installation to qualify for higher depreciation rates.
The Appellate Tribunal considered the arguments presented by both parties. The A.R. for the assessees relied on previous Tribunal decisions to support their claim that the civil and electrical works should be eligible for higher depreciation rates. The D.R., on the other hand, supported the lower authorities' decisions. The Tribunal noted that the A.O. had accepted that the civil work and electrical fittings were necessary for the windmill installation, indicating that they should be considered part of the windmill for depreciation purposes. The Tribunal referenced previous decisions that affirmed the eligibility of civil and electrical works for enhanced depreciation on windmills.
Based on the arguments and precedents cited, the Tribunal ruled in favor of the assessees, directing the A.O. to allow depreciation on windmills, including the civil work and electrical fittings. The appeals were allowed, and the disallowance of depreciation on these components was overturned. The decision was pronounced on 09-07-2010.
-
2010 (7) TMI 1163
Issues involved: Challenge to order issuing process u/s 182 Cr.P.C, non-compliance with procedure u/s 202 Cr.P.C, absence of debt or liability, lack of privity of contract, jurisdictional issue of cause of action.
Challenge to order issuing process u/s 182 Cr.P.C:
The application was filed to challenge the order issuing process on a complaint u/s 182 of the Cr.P.C. It was contended that the mandatory procedure u/s 202 of the Cr.P.C was not followed. Additionally, it was argued that there was no debt or liability on the part of the accused, which could be determined prima facie from the documents attached to the petition. Moreover, it was asserted that there was no privity of contract between the complainant and the accused. Lastly, the issue was raised that the cause of action had arisen in Ahmedabad, not Mumbai.
Non-compliance with procedure u/s 202 Cr.P.C:
The Court noted that the provision u/s 202 of the Cr.P.C was held to be directory and not mandatory in a previous order. Regarding the cause of action, it was established that since the complainant's registered office, the cheque deposit, and notice receipt all occurred in Mumbai, the Magistrate's Court in Mumbai had jurisdiction. The Court emphasized that the issues of privity of contract and enforceable debt and liability could only be determined by the trial Court after evidence is presented.
Conclusion:
The Court found merit in the submissions of the respondent, dismissing the criminal application. The petitioner was exempted from appearing in the trial Court, with the provision that their plea and statement u/s 313 of the Cr.P.C would be recorded through their Advocate, subject to certain undertakings. The decision highlighted the importance of evidence in determining crucial issues raised during the proceedings.
-
2010 (7) TMI 1162
Issues involved:
The issues involved in this case are:
1. Whether the Appellate Tribunal was correct in reversing the order of the CIT(A) and deleting the addition of Rs. 2,15,80,800 credited as labour income treated as deemed income of the assessee earned from undisclosed sources?
2. Whether the Appellate Tribunal was correct in reversing the order of the CIT(A) and directing to allow interest expenditure of Rs. 2,11,99,383 claimed as business expenditure without establishing that the funds borrowed and interest expenditure incurred were for earning taxable income of the year?
3. Whether the Appellate Tribunal erred in not following the jurisdictional High Court's decision in the case of Fakir Mohmad Haji Hasan [247 ITR 290] in letter and spirit?
Details of the Judgment:
Issue 1:
The appellant-revenue filed an appeal under section 260-A of the Income Tax Act, 1961 challenging the deletion of Rs. 2,15,80,800 credited as labour income by the Appellate Tribunal. The Assessing Officer had treated this amount as deemed income of the assessee earned from undisclosed sources. The Tribunal found that the assessee, engaged in stone crushing business, had exploited his land and machinery for making chips from boulders, indicating commercial exploitation of assets. The Tribunal concluded that the income derived from labour was business income, not from undisclosed sources. The Tribunal's decision was based on factual findings and did not raise any legal error.
Issue 2:
Regarding the second issue, the Tribunal had disallowed interest expenditure claimed as business expenditure by the assessee. However, upon determining that the income of the assessee was to be taxed as business income and not from undisclosed sources, the Tribunal deleted the addition related to interest expenditure. The Tribunal's decision on this matter was a necessary corollary to its conclusion on the first issue and did not give rise to any legal question.
Issue 3:
The Tribunal did not follow the jurisdictional High Court's decision in the case of Fakir Mohmad Haji Hasan [247 ITR 290] as contended by the appellant-revenue. However, the Tribunal's decision was based on factual evidence and did not indicate any legal error warranting interference.
In conclusion, the High Court dismissed the appeal as it found no legal infirmity in the Tribunal's order, stating that in the absence of any substantial question of law, the appeal was not upheld.
-
2010 (7) TMI 1161
Issues Involved:
1. Ad interim injunction against the Defendants.
2. Modification of ex-parte ad interim injunction.
3. Vacation of the ex-parte ad interim injunction.
Summary:
Ad interim injunction against the Defendants:
The Plaintiffs sought an ad interim injunction against the Defendants, alleging that the Defendants conspired and made unreasonable demands, including the partition of business and residential properties. The Plaintiffs claimed that the Defendants used abusive language and demanded that Plaintiff No.2 surrender the property in dispute. The Defendants contested, stating that the Plaintiffs misrepresented their possession of the property and that the first floor was in Defendant No.2's possession. The court found that the Plaintiffs concealed material facts and misled the court, thus not entitled to the relief sought.
Modification of ex-parte ad interim injunction:
The Plaintiffs also sought modification of the ex-parte ad interim injunction granted on 17.05.2010. The court noted that the Plaintiffs were not in possession of the front portion of the first floor at the time of filing the suit and had misrepresented facts to obtain the injunction. The court emphasized the importance of full disclosure and bona fide conduct by the party seeking an injunction. The court vacated the interim order dated 17th May 2010, relating to property No.H-32, Kailash Colony, New Delhi.
Vacation of the ex-parte ad interim injunction:
The Defendants filed an application seeking the vacation of the ex-parte ad interim injunction. The court observed that the Defendants were in possession of the first floor and had been working with Plaintiff No.1 in the business. The court found that the Plaintiffs had not acted bona fide and had concealed material facts. The court concluded that the Defendants would suffer inconvenience if dislodged from the premises, and the Plaintiffs had an alternative vacant property (House No.H-28) for accommodating guests. The court vacated the interim order and clarified that the Defendants, who had started a separate business, should not interfere in Plaintiff No.1's business activities.
Conclusion:
The court disposed of the applications, vacated the interim order concerning the property in dispute, and clarified the non-interference in Plaintiff No.1's business by the Defendants. The case was listed for further proceedings on 6th September 2010 before the Joint Registrar.
-
2010 (7) TMI 1160
Issues Involved:
1. Validity and interpretation of the Will dated 8.5.1967.
2. Applicability of Section 90 of the Indian Succession Act.
3. Grant of Letters of Administration for properties bequeathed in the Will.
Summary:
1. Validity and Interpretation of the Will:
The dispute centers around properties bequeathed by a Will dated 8.5.1967 by Kakkassery Ippuru. The Will was contested by Padmini @ Cherichi, leading to a suit in the District Court, Thrichur. The District Judge granted letters of administration for all properties in the Will. The High Court upheld the Will's genuineness but limited the grant to items 1 to 3, reasoning that the testator's title to items 4 to 7 was not perfected on the Will's date.
2. Applicability of Section 90 of the Indian Succession Act:
The Supreme Court examined Section 90 of the Act, which states that the description of property in a Will refers to the property at the testator's death unless a contrary intention appears. The Court emphasized that Section 90 uses the legal fiction "deemed" to avoid intestacy and that the property described in the Will includes property at the testator's death. The Court cited various precedents supporting this interpretation, including English law and Indian case law.
3. Grant of Letters of Administration:
The Supreme Court found that the High Court erred in not appreciating the effect of Section 90. The testator had acquired full title to items 4 to 7 before his death, and the Will did not show any contrary intention. The Court leaned against intestacy, emphasizing that a Will should be construed to avoid intestacy unless a contrary intention is clear. The Court restored the District Judge's decision granting letters of administration for all properties in the Will.
Conclusion:
The appeal was allowed, the High Court's judgment was set aside, and the District Judge's decision was restored. The related Civil Appeal No. 4432 of 2003 was dismissed. No order as to costs.
-
2010 (7) TMI 1159
Necessary party nor a proper party - lease of the airport - powers of AAI necessary for performance of the functions - appellant claims to have undertaken several developmental activities to make it a world class airport - Whether the appellant is a necessary or proper party to the suit for specific performance filed by the first respondent - According to the appellant, the Mumbai airport is surrounded by developed (constructed) areas with very limited opportunities to acquire any land and the site constraints limit the possibilities for development and therefore it was necessary to make optimum use of the existing land in the airport for the purpose of modernisation and upgradation; and therefore, the disputed land which was lying idle, was required for modernisation. It therefore filed an application seeking impleadment as an additional defendant in the pending suit filed by the first respondent against AAI, contending that its interest was likely to be directly affected if any relief is granted to the first respondent-plaintiff in the suit. The appellant alleged that the Information Memorandum proposing to privatise the management did not exclude the area which was the subject-matter of the suit; and that the suit plot could not however be leased to the appellant in view of the interim order in the pending suit of the first respondent.
HELD THAT:- The general rule in regard to impleadment of parties is that the plaintiff in a suit, being dominus litis, may choose the persons against whom he wishes to litigate and cannot be compelled to sue a person against whom he does not seek any relief. Consequently, a person who is not a party has no right to be impleaded against the wishes of the plaintiff. But this general rule is subject to the provisions of Order I Rule 10(2) of Code of Civil Procedure (`Code'), which provides for impleadment of proper or necessary parties.
A `necessary party' is a person who ought to have been joined as a party and in whose absence no effective decree could be passed at all by the Court. If a `necessary party' is not impleaded, the suit itself is liable to be dismissed. A `proper party' is a party who, though not a necessary party, is a person whose presence would enable the court to completely, effectively and adequately adjudicate upon all matters in disputes in the suit, though he need not be a person in favour of or against whom the decree is to be made. If a person is not found to be a proper or necessary party, the court has no jurisdiction to implead him, against the wishes of the plaintiff. The fact that a person is likely to secure a right/interest in a suit property, after the suit is decided against the plaintiff, will not make such person a necessary party or a proper party to the suit for specific performance.
On a careful examination of the facts of this case, we find that the appellant is neither a necessary party nor a proper party. As noticed above, the appellant is neither a purchaser nor the lessee of the suit property and has no right, title or interest therein. First respondent - plaintiff in the suit has not sought any relief against the appellant. The presence of the appellant is not necessary for passing an effective decree in the suit for specific performance. Nor is its presence necessary for complete and effective adjudication of the matters in issue in the suit for specific performance filed by the first respondent-plaintiff against AAI. A person who expects to get a lease from the defendant in a suit for specific performance in the event of the suit being dismissed, cannot be said to be a person having some semblance of title, in the property in dispute.
The appellant as lessee may certainly have the powers of AAI necessary for performance of the functions that have been assigned to them. What has been assigned is the function of operation, management and development agreement with reference to the area that been demised. Obviously the appellant as lessee of the Airport cannot step into the shoes of AAI for performance of any functions with reference to an area which has not been demised or leased to it.
Appellant contended that Mumbai airport being one of the premier airports in India with a very high and ever increasing passenger traffic, needs to modernise and develop every inch of the airport land; that the suit land was a part of the airport land and that for the pendency of first respondent's suit within an interim order, AAI would have included the suit land also in the lease in its favour - This does not in any way help the appellant to claim a right to be impleaded. If the interim order in the suit filed by the first respondent came in the way of granting the lease of the suit land, it is clear that the suit land was not leased to appellant. The fact that if AAI succeeded in the suit, the suit land may also be leased to the appellant is not sufficient to hold that the appellant has any right, interest or a semblance of right or interest in the suit property. When appellant is neither claiming any right or remedy against the first respondent and when first respondent is not claiming any right or remedy against the appellant, in a suit for specific performance by the first respondent against AAI, the appellant cannot be a party. The allegation that the land is crucial for a premier airport or in public interest, are not relevant to the issue. Appeal dismissed.
-
2010 (7) TMI 1158
Issues Involved:
The judgment deals with the issue of marking an unregistered and insufficiently stamped document at the interlocutory stage, in violation of Section 35 of the Stamp Act and the mandatory provisions of the Code of Civil Procedure.
Details of the Judgment:
Issue 1: Marking of Document at Interlocutory Stage
The trial Court ruled out the plaintiff's objection against marking a simple sale deed due to insufficiency of stamp duty and lack of registration. It opined that the objection can be considered during the disposal of the interlocutory application. The plaintiff challenged this order, citing violation of Section 35 of the Stamp Act and Code of Civil Procedure provisions.
Issue 2: Precedents and Legal Interpretations
Precedents from the Court highlighted the procedure for marking documents at the interlocutory stage. The Court emphasized the importance of marking documents for clarity and understanding of contentions. The judgment discussed the distinction between unregistered and insufficiently stamped documents, emphasizing the inadmissibility of the latter under Section 35 of the Stamp Act.
Issue 3: Admissibility of Unstamped Documents
The judgment clarified the legal position regarding unregistered and insufficiently stamped documents. It emphasized that while unregistered documents can be admitted for a collateral purpose, insufficiently stamped documents are inadmissible unless the required stamp duty and penalty are paid.
Conclusion:
The Court set aside the trial Court's order and directed a determination of the objections against the marking and admissibility of the document based on insufficiency of stamp duty and lack of registration. The judgment emphasized the importance of adhering to legal provisions and conducting a thorough examination of document admissibility.
........
|
9911796707
