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2009 (9) TMI 1033
Issues involved: Provision for warranty and disallowance of interest on borrowed capital.
Provision for warranty:
The Assessing Officer disallowed the provision for warranty made by the assessee, treating it as unascertained liability. However, the Commissioner of Income-tax (Appeals) allowed the provision as a deductible liability, considering it as a definite term liability arising during the accounting year. The ITAT confirmed the order of the Commissioner, citing the decision in the case of CIT vs. Sony India (Pvt.) Ltd. and the precedent set by the Hon'ble Apex Court in the case of Bharat Earth Movers vs. CIT. The provision for warranty, made on an actuarial basis, was held to be allowable as a deduction.
Disallowance of interest on borrowed capital:
The Assessing Officer disallowed the interest on borrowed capital, estimating it based on the ratio of amount due from parties to the amount borrowed by the assessee. However, the Commissioner of Income-tax (Appeals) allowed the deduction, noting that the expenses were incurred for commercial expediency and were subsequently recovered. The ITAT upheld the decision, stating that there was no evidence of diversion of borrowed funds for non-business purposes. The expenditure incurred by the assessee was considered to be for commercial expediency, justifying the deduction of interest on borrowed capital.
In conclusion, the appeal filed by the Revenue was dismissed, and the orders of the Commissioner of Income-tax (Appeals) regarding both the provision for warranty and the disallowance of interest on borrowed capital were upheld.
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2009 (9) TMI 1032
Issues Involved:
1. Maintainability of the suit.
2. Tenure of the Bishop's appointment.
3. Interim reliefs and balance of convenience.
Summary:
1. Maintainability of the Suit:
The appellants argued that the suit was not maintainable u/s Order I, Rule 8 of C.P.C. as it was filed against unincorporated bodies. The Court agreed, stating that for a representative suit, the court's permission under Order I Rule 8 of CPC is mandatory. Since no such permission was sought, the suit was not in order and thus not maintainable.
2. Tenure of the Bishop's Appointment:
The primary issue was whether the Bishop's appointment was for a period of 10 years or until he reached the age of 65. The appellants contended that the appointment was restricted to 10 years due to the Bishop's health condition and his own willingness. The Court noted that the Synod, as the supreme governing body, had the authority to make such decisions. The Court found that the Bishop had accepted the 10-year term and enjoyed its benefits, and thus could not now claim a tenure until the age of 65. The Court emphasized that the Synod's decision was final and binding.
3. Interim Reliefs and Balance of Convenience:
The appellants argued that the learned Single Judge hastily made the order without giving them a reasonable opportunity to file their counter. However, the Court found this argument untenable as the appellants had filed a memo stating that their counter in another application could be taken as the counter for this application. The Court also noted that the balance of convenience was with the appellants and that the first respondent had no prima facie case for continuing as Bishop beyond the agreed 10-year term. However, considering the vacancy, the Court permitted the first respondent to continue as caretaker Bishop until a new appointment was made by the competent authority.
Conclusion:
The appeals were allowed, setting aside the order of the learned Single Judge. The first respondent/plaintiff was permitted to continue as caretaker Bishop of the Madras Diocese until a new appointment was made by the competent authority. The Court made it clear that any observations made would not stand in the way of the Synod making a new appointment.
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2009 (9) TMI 1031
Issues Involved:
1. Interim injunction for passing off.
2. Distinctiveness of the letter mark "PP".
3. Use of the mark "PP" by defendants in corporate names.
4. Likelihood of confusion or deception among consumers.
5. Protection of registered trademarks.
6. Acquiescence and bona fide adoption of marks.
7. Comparison of rival marks and likelihood of damage to goodwill.
Issue-wise Detailed Analysis:
1. Interim Injunction for Passing Off:
The plaintiffs sought interim injunctions to restrain the defendants from using the mark "PP" in their business activities, alleging that it would lead to passing off. The court examined whether the plaintiffs had established a prima facie case for passing off, considering the distinctiveness and reputation of the plaintiffs' marks.
2. Distinctiveness of the Letter Mark "PP":
The plaintiffs claimed that the letter mark "PP" was distinctive and associated with their business. The court noted that while a single letter or group of letters could function as a mark, the plaintiffs needed to demonstrate that "PP" was distinctive in their case. The court found that the plaintiffs had not shown that "PP" per se was distinctive or used independently in their business.
3. Use of the Mark "PP" by Defendants in Corporate Names:
The defendants argued that their use of "PP" as part of their corporate names (PP Buildwell and PP Prime Properties) was bona fide and came from the initials of their promoters. The court noted that the plaintiffs used "PP" in combination with other words (e.g., "PP Jewellers," "PP Towers") and not as a standalone mark. The court found that the defendants' use of "PP" in their corporate names did not constitute passing off.
4. Likelihood of Confusion or Deception Among Consumers:
The court considered whether the defendants' use of "PP" was likely to cause confusion or deception among consumers. It noted that the plaintiffs' marks were used in combination with other descriptive words or letters, and the defendants' marks included additional elements that distinguished them. The court concluded that there was no likelihood of confusion or deception.
5. Protection of Registered Trademarks:
The plaintiffs held registrations for the marks "PP Jewellers" and "PPJ" in Class 14, but their application for "PP" in Class 37 was pending. The defendants had registrations for "PP Mall" and "PP Shopping Mall" in Class 37. The court noted that the plaintiffs had not shown that "PP" was used independently in their business, and the defendants' registrations were entitled to protection.
6. Acquiescence and Bona Fide Adoption of Marks:
The defendants argued that the plaintiffs had known of their use of "PP" and had acquiesced. The court noted that the defendants' adoption of "PP" was bona fide, based on the initials of their promoters. The court found no evidence of dishonest adoption or intent to deceive.
7. Comparison of Rival Marks and Likelihood of Damage to Goodwill:
The court compared the plaintiffs' and defendants' marks, considering the added elements in the defendants' marks. It found that the additional elements in the defendants' marks (e.g., "Buildwell," "Mall," "Prime Properties") were sufficient to distinguish them from the plaintiffs' marks. The court concluded that there was no likelihood of damage to the plaintiffs' goodwill.
Conclusion:
The court dismissed the plaintiffs' applications for interim injunctions, finding that they had not established a prima facie case for passing off. The court noted that the defendants' use of "PP" in their corporate names and marks did not constitute passing off, and there was no likelihood of confusion or deception among consumers. The court also directed the defendants to maintain business accounts and file half-yearly statements during the pendency of the suits. The order was based on a prima facie view and was not intended to influence the final decision at trial.
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2009 (9) TMI 1030
Issues Involved:1. Validity of the arbitral award concerning claim Nos. 1, 4B, 5, and 6. 2. Requirement of reasons in the arbitral award u/s 31(3) of the Arbitration and Conciliation Act, 1996. 3. Remittance of the award to the arbitral tribunal for stating reasons. Summary:Issue 1: Validity of the arbitral award concerning claim Nos. 1, 4B, 5, and 6The State of Kerala awarded a contract to M/s. Som Datt Builders Limited for road work on National Highway-47. The contractor raised claims due to extended stay and additional expenditures. The arbitral tribunal awarded amounts for claim Nos. 1, 4B, 5, and 6. The State of Kerala filed a petition u/s 34 of the Arbitration and Conciliation Act, 1996 to set aside the award, which was dismissed by the 2nd Additional District Judge, Ernakulam. The High Court partially allowed the appeal, setting aside the award for claim Nos. 1 and 4B due to lack of supporting reasons. Issue 2: Requirement of reasons in the arbitral award u/s 31(3) of the Arbitration and Conciliation Act, 1996The Supreme Court emphasized that u/s 31(3), the arbitral award must state the reasons upon which it is based unless the parties have agreed otherwise. The Court noted that the arbitral tribunal failed to provide reasons for claim Nos. 1 and 4B. The Court cited precedents emphasizing the necessity of reasons to ensure fair and legitimate consideration of the controversy. Issue 3: Remittance of the award to the arbitral tribunal for stating reasonsThe Supreme Court held that the High Court should have remitted the matter to the arbitral tribunal to provide reasons for the award concerning claim Nos. 1 and 4B, as permitted u/s 34(4) of the Act. The Court directed the 2nd Additional District Judge, Ernakulam to remit the award to the arbitral tribunal for stating reasons and then proceed with the hearing and disposal of objections. Order:(i) The judgments of the High Court and the 2nd Additional District Judge, Ernakulam are set aside. (ii) The petition by the State of Kerala against the award is restored for fresh hearing and consideration of objections in respect of claim Nos. 1, 4B, 5, and 6. (iii) The 2nd Additional District Judge, Ernakulam shall remit the award to the arbitral tribunal for stating reasons in support of claim Nos. 1 and 4B and proceed with the hearing and disposal of objections thereafter. (iv) Parties shall bear their own costs.
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2009 (9) TMI 1029
Issues involved:
The issue involves the rejection of an application for grant of exemption u/s 10(23C)(vi) of the Income-tax Act based on the interpretation of the society's objects and whether the society is being run solely for educational purposes.
Facts of the case:
The Sri Venkateswar Education Society, registered under the Societies Registration Act, applied for exemption u/s 10(23C)(vi) of the Income-tax Act for running Venkateswar International School. The society's objects primarily focus on education, with some clauses also mentioning care for destitute, orphan children, and aged and poor individuals.
Petitioner's Argument:
The petitioner argued that the rejection was unjust as the society's funds were solely used for education, and the objects should be interpreted in a manner that fulfills the spirit of the Income-tax Act. The rejection was challenged in a writ petition.
Respondent's Argument:
The respondent contended that exemption can only be granted if the society is run solely for educational purposes. The inclusion of other objectives in the society's objects led to the rejection of the application.
Court's Analysis:
The court noted that the society was primarily focused on imparting education, with no other significant activities. The petitioner provided an affidavit assuring that funds would only be used for educational purposes, addressing the respondent's concerns.
Precedent and Decision:
Referring to previous judgments, the court allowed the writ petition, setting aside the rejection order and directing the respondent to grant exemption u/s 10(23C)(vi) of the Income-tax Act from 2007-08 onwards. The court highlighted that if the undertaking is violated, the respondent can withdraw the exemption. No costs were awarded in the case.
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2009 (9) TMI 1028
Issues involved: Restraining the defendant from using specific words and device in their bags/packets of rice as a trademark, expeditious resolution of matters relating to trademarks, copyrights, and patents.
The Supreme Court addressed a petition challenging a judgment restraining the defendant from using the words 'HARA QILLA' and device 'QILLA' in their rice packaging as a trademark. The Court emphasized the need for expeditious resolution of disputes related to trademarks, copyrights, and patents, highlighting the prolonged nature of litigation primarily focused on temporary injunctions. The Court stressed the importance of adhering to procedural rules, specifically mentioning Proviso (a) to Order XVII Rule 1(2) C.P.C., which mandates continuous hearings until all witnesses are examined, with the aim of ensuring timely resolution of such matters.
The Court underscored the significance of strict compliance with procedural rules, suggesting that in cases concerning trademarks, copyrights, and patents, hearings should proceed on a day-to-day basis. The Court recommended that final judgments in such cases be delivered within four months from the filing of the suit. While declining to interfere with the impugned judgment in the present case, the Court urged the High Court to ensure that the suit is concluded within three months from the date of the order, emphasizing the need for expeditious resolution in matters of intellectual property rights.
In conclusion, the Supreme Court disposed of the special leave petition with the directive that the suit in question should be resolved promptly within three months from the date of the order, emphasizing the importance of timely adjudication in cases involving trademarks, copyrights, and patents.
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2009 (9) TMI 1027
Issues Involved:
1. Maintainability of the writ petition under Article 226 challenging the notice under Section 13(2) of the SARFAESI Act.
2. Justification of the respondent bank in classifying the petitioner's account as a Non-Performing Asset (NPA) under the Prudential Norms of the Reserve Bank of India (RBI).
Issue-Wise Detailed Analysis:
1. Maintainability of the Writ Petition under Article 226:
The court addressed whether the petitioner could challenge the notice under Section 13(2) of the SARFAESI Act through a writ petition. The court noted that the invocation of jurisdiction under the SARFAESI Act is contingent upon the classification of the account as an NPA. Section 13(2) of the SARFAESI Act stipulates that a secured creditor can issue a notice demanding repayment if the borrower's account is classified as an NPA. The classification must be in accordance with RBI guidelines. The court emphasized that the classification of an account as an NPA leads to serious consequences, including the invocation of the SARFAESI Act, and thus, judicial review under Article 226 is permissible. The court also referenced Section 13(3A) of the SARFAESI Act, which mandates that the secured creditor must communicate reasons for non-acceptance of the borrower's objections to the notice under Section 13(2). Since measures under Section 13(4) had not been taken, the borrower could not seek relief under Section 17 of the SARFAESI Act, making judicial review the only available remedy.
2. Justification of the Respondent Bank in Classifying the Petitioner's Account as NPA:
The petitioner argued that the classification of its account as an NPA was unjustified and not in accordance with the Prudential Norms issued by the RBI. The petitioner highlighted that the account was regular in repayments and any default was due to temporary cash constraints. The petitioner also contended that the subsequent payments made should have led to the upgradation of the account from NPA status. The court examined the Prudential Norms, which define an NPA as an account where the interest or principal remains overdue for more than 90 days. The court noted that the respondent bank's reply to the petitioner's objections lacked detailed reasoning and did not demonstrate the application of mind regarding the classification of the account as NPA. The court emphasized that the bank must provide a reasoned order considering the borrower's objections and the Prudential Norms. The court referenced the Supreme Court's decision in Mardia Chemicals Ltd. v. Union of India, which underscored the need for meaningful consideration of objections and communication of reasons for non-acceptance.
Conclusion:
The court concluded that the petitioner's writ petition was maintainable under Article 226, as the classification of the account as NPA and the subsequent invocation of the SARFAESI Act had serious consequences. The court found that the respondent bank had not adequately considered the petitioner's objections in line with the Prudential Norms and the guidelines issued by the RBI. The court directed the respondent bank to reconsider the petitioner's objections and provide a reasoned order. The petitioner was allowed to file supplementary objections, and the respondent bank was instructed to communicate its decision within six weeks. The writ petition was disposed of without costs.
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2009 (9) TMI 1025
Issues Involved:
1. Whether the appellant's trademark "Sugar Free" is descriptive or suggestive.
2. Whether "Sugar Free" has acquired distinctiveness and secondary meaning.
3. Whether the respondent's use of "Sugar Free" constitutes passing off.
4. Whether the size and prominence of the term "Sugar Free" used by the respondent is appropriate.
5. Whether the appellant is entitled to an injunction against the respondent's use of "Sugar Free".
Issue-wise Detailed Analysis:
1. Descriptive or Suggestive Nature of "Sugar Free":
The appellant argued that "Sugar Free" is a coined term and merely suggestive, not descriptive. They contended that the term is an ungrammatical combination of two English words and does not directly describe the product, which is an artificial sweetener. The appellant cited various legal precedents and dictionaries to support their claim that "Sugar Free" is not a generic term. Conversely, the respondent argued that "Sugar Free" is inherently descriptive, indicating a product without sugar, and is commonly used in the trade to describe such products. The court concluded that "Sugar Free" is not a coined word but a combination of two common English words, inherently descriptive of products that do not contain sugar.
2. Distinctiveness and Secondary Meaning:
The appellant claimed that "Sugar Free" had acquired distinctiveness and secondary meaning through long and exclusive use since 1988, achieving a considerable market share and consumer recognition. They argued that this distinctiveness entitled them to protection against others using the term. The respondent countered that even if "Sugar Free" had acquired some distinctiveness, it was limited to the specific product (artificial sweeteners) and could not be extended to all food products. The court found that while "Sugar Free" may have acquired distinctiveness in relation to the appellant's artificial sweeteners, this did not extend to all food products, and the term remained descriptive in nature.
3. Passing Off:
The appellant alleged that the respondent's use of "Sugar Free" constituted passing off, arguing that consumers might be misled into believing there was a connection between the respondent's products and the appellant's. The respondent contended that their use of "Sugar Free" was merely descriptive and not intended to mislead consumers. The court held that the use of "Sugar Free" by the respondent was in a descriptive sense and did not amount to passing off, as there was no evidence of misrepresentation or likelihood of confusion among consumers.
4. Size and Prominence of "Sugar Free":
The appellant argued that the respondent's use of "Sugar Free" in a font size more prominent than their trademark "Amul" was inappropriate and misleading. The respondent maintained that the font size was not inappropriate and merely emphasized the product's unique selling point. The court found that the respondent's use of "Sugar Free" in a conspicuously larger font was inappropriate and restrained the respondent from using the term in the current font size, which overshadowed their trademark "Amul."
5. Injunction Against Use of "Sugar Free":
The appellant sought a permanent injunction to restrain the respondent from using "Sugar Free" in any form. The court concluded that while the appellant's trademark "Sugar Free" had acquired distinctiveness in relation to artificial sweeteners, it did not warrant a blanket injunction against the respondent's descriptive use of the term. The court allowed the respondent to use "Sugar Free" descriptively but imposed restrictions on the font size to prevent misleading consumers.
Conclusion:
The court dismissed both the appeal and the cross objections, affirming that "Sugar Free" is a descriptive term that has acquired some distinctiveness in relation to the appellant's artificial sweeteners but does not extend to all food products. The respondent's use of "Sugar Free" was found to be descriptive and not constituting passing off, with restrictions imposed on the font size to prevent consumer confusion. The appellant's remedy for any grievances regarding the use of the term would be through a contempt petition, which was noted to be pending.
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2009 (9) TMI 1024
Disputed Land - Claim for preferential right for allotment of the part of the vacant land for expansion of its factory - "preferential right" of the unit holder for having allotment of "neighbouring land" for the purpose of factory expansion - Right of equality guaranteed under Article 14 of the Constitution stood violated - Whether the High Court was justified in not granting the interim relief in favour of the appellant? - Government of Maharashtra had issued a Circular regarding fixation of rate of industrial area in which allotment of plot has to be made by inviting tenders. It also provides that where there are more than one application for allotment, the plot may be disposed of by adopting the tender process.
The application of the appellant had been made prior to the application made by respondent No.4. The respondent No.4 instead of making application to the Corporation started negotiations with the Government directly for allotment of land merely by writing a letter in June, 2005 and on 10th June, 2005 an understanding was arrived in between the Government of Maharashtra and respondent No.4 of commissioning of the Project at Nasik. User of land in Open Space No.9 was converted from Open Space to Industrial Area vide order/resolution dated 10th February, 2006 and it was re-numbered as Plot No.126.
Appellant has submitted that the application of the appellant has been rejected without assigning any reason whatsoever and probably the reason may be that on the date of passing the order the land was merely a designated vacant land and not meant for industrial purpose - appellant had been asking the respondent no.2 to grant the lease of plot nos.F-16 and F-17, which had earlier not been the part of the Open Space No.9, on the basis of being contiguous and adjacent to the appellant's existing factory
HELD THAT:- Every action of the State or its instrumentalities should not only be fair, legitimate and above-board but should be without any affection or aversion. It should neither be suggestive of discrimination nor even apparently give an impression of bias, favouritism and nepotism. The decision should be made by the application of known principle and rules and in general such decision should be predictable and the citizen should know where he is, but if a decision is taken without any principle or without any rule, it is unpredictable and such a decision is antithesis to the decision taken in accordance with the rule of law S.G. Jaisinghani Vs. Union of India & ors.[1967 (2) TMI 30 - SUPREME COURT], Haji T.M. Hassan Rawther Vs. Kerala Financial Corporation,[1987 (11) TMI 372 - SUPREME COURT].
In a case like this, when the applicant approaches the Court complaining against the Statutory Authority alleging arbitrariness, bias or favouritism, the court, being custodian of law, must examine the averments made in the application to form a tentative opinion as to whether there is any substance in those allegations. Such a course is also required to be followed while deciding the application for interim relief.
Whether interim injunction should be granted by the Court ? - Interim order is passed on the basis of prima facie findings, which are tentative. Such order is passed as a temporary arrangement to preserve the status quo till the matter is decided finally, to ensure that the matter does not become either infructuous or a fait accompli before the final hearing. The object of the interlocutory injunction is, to protect the plaintiff against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial. (vide Anand Prasad Agarwalla v. State of Assam vs. Tarkeshwar Prasad & Ors.[2001 (5) TMI 937 - SUPREME COURT] and Barak Upatyaka D.U. Karmachari Sanstha [2009 (3) TMI 992 - SUPREME COURT].
Grant of temporary injunction, is governed by three basic principles, i.e. prima facie case; balance of convenience; and irreparable injury, which are required to be considered in a proper perspective in the facts and circumstances of a particular case. But it may not be appropriate for any court to hold a mini trial at the stage of grant of temporary injunction (Vide S.M. Dyechem Ltd. Vs. M/s. Cadbury (India) Ltd.[2000 (5) TMI 1060 - SUPREME COURT], and Anand Prasad Agarwalla (supra).
Anything done in undue haste can also be termed as arbitrary and cannot be condoned in law. Bahadursinh Lakhubhai Gohil Vs. Jagdishbhai M. Kamalia & Ors.[2003 (12) TMI 648 - SUPREME COURT].
Thus, the law on the issue emerges to the effect that interim injunction should be granted by the Court after considering all the pros and cons of the case in a given set of facts involved therein on the risk and responsibility of the party or, in case he looses the case, he cannot take any advantage of the same. The order can be passed on settled principles taking into account the three basic grounds i.e. prima facie case, balance of convenience and irreparable loss. The delay in approaching the Court is of course a good ground for refusal of interim relief, but in exceptional circumstances, where the case of a party is based on fundamental rights guaranteed under the Constitution and there is an apprehension that suit property may be developed in a manner that it acquires irretrievable situation, the Court may grant relief even at a belated stage provided the court is satisfied that the applicant has not been negligent in pursuing the case.
In the light of the settled legal propositions and admittedly the whole case of the appellant is based on violation of Article 14 of the Constitution as according to the appellant it has been a case of violation of equality clause enshrined in Article 14, the facts mentioned hereinabove clearly establish that the Corporation and the Government proceeded in haste while considering the application of respondent No.4 which tantamount to arbitrariness, thus violative of the mandate of Article 14 of the Constitution.
Application of the appellant was required to be disposed of by a speaking and reasoned order. Admittedly, no reason was assigned for rejecting the same. There is nothing on record to show as on what date and under what circumstances, Plot nos.F-16 and F-17 stood decarved and became part of the Open Space No.9. The respondents could not furnish any explanation as in what manner and under what circumstances, the Bharat Sanchar Nigam Ltd. has been made allotment of land from plot no.F-16, (a part of Open Space No.9), without change of user of the land. The respondent no.4 had not initially asked for 17 acres of land which has been allotted to it. There is nothing on record to show as to why the land could not be disposed of by auction. All these circumstances provide for basis to form a tentative opinion that State and its instrumentalities have acted affectionately in the case of respondent no.4.
Undoubtedly, there has been a delay on the part of the appellant in approaching the court but we cannot be oblivious of the fact that the appellant had been approaching the authorities time and again for allotment of the land. Admittedly, the entire land had not been developed by the respondent no.4 till this Court entertained the Special Leave Petition and directed the parties to maintain status quo with regard to the land measuring 2 acres adjacent to the appellant's plot no.F-15 vide order dated 21.7.2008.
Therefore, it is not only the appellant who is to be blamed for the delay. The land had been allotted to the respondent no.4 in undue haste and no development could take place therein for more than two years of taking the possession of the land. In such a fact-situation the submission made on behalf of the respondents that interim stay cannot be granted at a belated stage in preposterous.
Therefore, the appeal deserves to be allowed and is hereby allowed. The interim order passed by this Court on 21.7.2008 shall continue in operation till the writ petition is decided by the High Court. The Hon'ble High Court is requested to dispose of the writ petition expeditiously. Needless to say that any observation made herein either on facts or on law shall not adversely effect the case of either of the parties, for the reason that the only question before this Court has been as to whether the appellant deserves to be granted interim protection till his writ petition is decided by the High Court.
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2009 (9) TMI 1023
The Bombay High Court dismissed the appeal in limine as no substantial question of law was involved. The tribunal's findings were reasonable and no fault was found in them. No costs were awarded.
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2009 (9) TMI 1022
Issues Involved:
1. Maintainability of the suit filed by the respondents.
2. Applicability of Section 53-A of the Transfer of Property Act.
3. Specific performance of the contract.
4. Competence of the respondents to file the suit as executors/executrix.
5. Vesting of property under Sections 211 and 213 of the Indian Succession Act.
Issue-wise Detailed Analysis:
1. Maintainability of the suit filed by the respondents:
The appellant, a public limited company, contended that the suit filed by the respondents was not maintainable. The respondents, representing the estate of the original owner, filed a suit for possession of the suit premises on the grounds of reasonable and bona fide requirement. The Small Causes Court of Bombay allowed the suit, directing the appellant to hand over possession. The High Court dismissed the revision application filed by the appellant, leading to the present appeal. The Supreme Court upheld the maintainability of the suit, stating that the respondents, being co-owners and legal representatives, had the right to file the suit for eviction.
2. Applicability of Section 53-A of the Transfer of Property Act:
The appellant argued that Section 53-A of the Transfer of Property Act, which deals with part performance of a contract, was applicable. The appellant claimed that it had taken possession of the property in part performance of an agreement to sell. However, the Supreme Court found that the appellant's possession was under a tenancy agreement, and the payment of Rs. 5 lacs was a security deposit, not a sale consideration. The Court held that the doctrine of part performance could not be invoked as the appellant failed to show that it performed or was willing to perform its part of the contract.
3. Specific performance of the contract:
The appellant filed a suit for specific performance of an agreement to sell the suit premises, claiming that the entire sale consideration had been paid. The Supreme Court noted that the appellant did not take any steps to complete the sale for over ten years and only acted after the eviction suit was filed. The Court emphasized that the remedy of specific performance is discretionary and extraordinary. The appellant's long delay and lack of action weakened its case for specific performance. The Court's observations on specific performance were tentative and would not affect the pending suit in the Bombay High Court.
4. Competence of the respondents to file the suit as executors/executrix:
The appellant questioned the competence of the respondents to file the suit without obtaining probate. The Supreme Court clarified that the respondents were appointed as executors/executrix under the Will of the original owner. The Will explicitly stated that the respondents would act as executors if the primary executor (the husband) was unable to act. The Court held that the respondents, being co-owners and legal representatives, were competent to file the suit. The Court also noted that the appellant had admitted the respondents' title by joining them as defendants in the specific performance suit.
5. Vesting of property under Sections 211 and 213 of the Indian Succession Act:
The Supreme Court distinguished between Sections 211 and 213 of the Indian Succession Act. Section 211 deals with the vesting of property in the executor or administrator upon accepting the office, while Section 213 requires probate or letters of administration to establish rights under the Will. The Court held that the property vested in the respondents as executors upon the death of the testatrix, and they had the right to represent the estate and file the suit even without obtaining probate. The Court cited precedents to support its interpretation and concluded that the suit filed by the respondents as executors was maintainable.
Conclusion:
The Supreme Court dismissed the appeal, upholding the decisions of the lower courts. The Court found no merit in the appellant's arguments and emphasized that the suit for eviction was maintainable. The Court also highlighted the discretionary nature of specific performance and the appellant's failure to act promptly. The respondents, as co-owners and legal representatives, were competent to file the suit, and the property vested in them upon the death of the testatrix. The Court exercised its discretionary jurisdiction under Article 136 of the Constitution and declined to interfere with the High Court's decision. The appeal was dismissed without any order as to costs.
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2009 (9) TMI 1021
Whether the provision in Rule 34 of the Army Rules, 1954 - interval between the accused being informed of charge for which he is to be tried and his arraignment shall not be less than ninety-six hours mandatory? HELD THAT:- It is well established that a contract which involves in its fulfilment the doing of an act prohibited by statute is void. The legal maxim A pactis privatorum publico juri non derogatur means that private agreements cannot alter the general law. Where a contract, express or implied, is expressly or by implication forbidden by statute, no court can lend its assistance to give it effect.
In our judgment, there has to be clear ninety-six hours interval between the accused being charged for which he is to be tried and his arraignment and interval time in Rule 34 must be read absolute. There is a purpose behind this provision: that purpose is that before the accused is called upon for trial, he must be given adequate time to give a cool thought to the charge or charges for which he is to be tried, decide about his defence and ask the authorities, if necessary, to take reasonable steps in procuring the attendance of his witnesses. He may even decide not to defend the charge(s) but before he decides his line of action, he must be given clear ninety-six hours.
A trial before General Court Martial entails grave consequences. The accused may be sentenced to suffer imprisonment. He may be dismissed from service. The consequences that may follow from non-observance of the time interval provided in Rule 34 being grave and severe, we hold, as it must be, that the said provision is absolute and mandatory. If the interval period provided in Rule 34 is held to be directory and its strict observance is not insisted upon, in a given case, an accused may be called upon for trial before General Court Martial no sooner charge/charges for which he is to be tried are served. Surely, that is not the intention; the timeframe provided in Rule 34 has definite purpose and object and must be strictly observed. Its non- observance vitiates the entire proceedings.
The key words used in Rule 34 from which the intendment is to be found are "shall not be less than ninety-six hours". As the respondent was not in active service at the relevant time, we are not concerned with the later part of that rule which provides for interval of twenty-four hours for the accused in active service.
Merely because the respondent pleaded guilty is immaterial. The mandatory provision contained in Rule 34 having been breached, the Division Bench cannot be said to have erred in affirming the order of the Single Judge setting aside the proceedings of the General Court Martial.
In the result, the appeal must fail and is dismissed with no order as to costs.
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2009 (9) TMI 1020
The High Court Bombay allowed the amendment and admitted the case for substantial questions of law regarding the inclusion of insurance claim, cash discount, and sale of scrap in business profits for deduction u/s.80HHC and u/s.80IB of the Income Tax Act.
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2009 (9) TMI 1019
The Delhi High Court dismissed the appeal as the issues raised were covered by a previous judgment and orders. No question of law arose.
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2009 (9) TMI 1018
Issues involved:
The judgment involves issues related to the applicability of the second proviso to sub-Section 3 to Section 80HHC of the Income-tax Act, 1961 for the allowance of deduction u/s.80HHC in respect of income from DEPB license, and the exclusion of excise duty and sales tax from the total turnover for computing deduction u/s.80HHC.
Assessee's Appeal (ITA No.131/Ahd/2008):
The only issue in the assessee's appeal is regarding the applicability of the second proviso to sub-Section 3 to Section 80HHC of the Act for the allowance of deduction u/s.80HHC in respect of income from DEPB license. The assessee contended that its export turnover is below Rs. 10,00,00,000, contrary to the CIT(A) and Assessing Officer's findings. The Tribunal directed the Assessing Officer to verify the export turnover, and if it is below Rs. 10,00,00,000, the assessee is entitled to relief as per the amended provision. The issue of the assessee's appeal was allowed for statistical purposes.
Revenue's Appeal (ITA No.507/Ahd/2008):
The first issue in the Revenue's appeal was against the order of CIT(A) directing the Assessing Officer to exclude excise duty and sales tax from the total turnover for computing deduction u/s.80HHC. The Tribunal dismissed this issue in favor of the assessee, citing a decision of the Hon'ble apex court. The next issue in the Revenue's appeal was against the order of CIT(A) directing the Assessing Officer to allow deduction u/s.80HHC on a disclaimer certificate issued by M/s. Clariant (India) Ltd. The Tribunal found that the assessee had correctly claimed deduction based on the disclaimer certificate and confirmed the findings of the CIT(A), dismissing this issue of the Revenue's appeal.
Conclusion:
The Tribunal allowed the assessee's appeal for statistical purposes and dismissed the Revenue's appeal. The judgment was pronounced in Open Court on 11/09/2009.
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2009 (9) TMI 1017
This appeal will be heard on the following substantial questions of law:-
(1) Whether on a true and proper interpretation of the provisions of Sub-section (3) of Section 40A of the Income Tax Act, 1961, the Tribunal was justified in law in holding that rule 6DD of the Income Tax Rules, 1962 was exhaustive of the cases/circumstances to which the exemption under the second proviso to the section applied and that the exemption was not available in any other case/circumstances?
(2) Whether the Tribunal was justified in law in setting aside the order dated March 8, 2007 of the Commissioner of Income Tax (Appeals) and remanding the matter for fresh examination and adjudication when all the materials for adjudicating upon the matter were before the Tribunal?
Call for the records.
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2009 (9) TMI 1016
Issues involved:
The main issue in this case is whether interest income earned by the assessee company on fixed deposits kept with a bank should be treated as a revenue receipt or a capital receipt, and whether it can be adjusted against the cost of a project being set up by the company.
Judgment Summary:
Interest Income Treatment:
The assessee company earned interest on fixed deposits amounting to Rs. 3.5 crores kept in Canara Bank, which totaled Rs. 29,51,512/-. The company capitalized this interest income and reduced it from the cost of the project. The Assessing Officer treated this interest income as a revenue receipt, but the CIT(A) reversed this decision, which was upheld by the ITAT. The appellant argued that the interest was earned from surplus funds with the bank and should not be treated as a capital receipt. The appellant relied on the Supreme Court judgment in Bongai Gaon Refinery Petro Chemicals Vs. CIT 251 ITR 329, which clarified that interest received from surplus funds should not be adjusted against project cost. However, it was found that the FDR amount kept with the bank was from capital generated by the company through share capital, not from unsecured loans. The CIT(A) and ITAT both found that the interest income was linked to setting up the business, and the case law supported this view.
Legal Analysis:
The court referred to the judgment in Indian Oil Panipat Power Consortium Ltd. Vs. ITO and discussed the connection between funds garnered for setting up a business and the nature of income. The court emphasized that income connected with business activities should be taxed under the head 'profit and gains of business or profession,' and not as 'income from other sources.' The court concluded that the interest earned from fixed deposits was linked to the business setup and should not be taxed separately under a different head of income. Therefore, the court dismissed the appeal, stating that no question of law arose in this case.
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2009 (9) TMI 1015
Issues Involved:
1. Jurisdiction of the Income-tax Settlement Commission.
2. Applicability of Section 158BB in determining undisclosed income.
3. Validity of the Settlement Commission's order based on the evidence considered.
4. Relevance of the Supreme Court judgment in "Commissioner of Income Tax, Madras Vs. Express Newspapers Ltd.".
Summary:
1. Jurisdiction of the Income-tax Settlement Commission:
The petitioner challenged the order passed by the Income-tax Settlement Commission dated 31/3/2008, which excluded regular assessment from its ambit and only subjected block assessment proceedings for settlement. The petitioner contended that the application for settlement should include the assessment years 1998-99, 1999-2000, and 2000-2001.
2. Applicability of Section 158BB in determining undisclosed income:
The petitioner argued that u/s 158BB, the determination of undisclosed income for the block period should be based solely on evidence found during the search or requisition of books of accounts or other documents. The petitioner claimed that the Settlement Commission considered aspects not permissible under this section.
3. Validity of the Settlement Commission's order based on the evidence considered:
The Settlement Commission found discrepancies between the total applications and sources during the block assessment period and directed income computation accordingly. The petitioner contended that the Commission's order was based on impermissible considerations.
4. Relevance of the Supreme Court judgment in "Commissioner of Income Tax, Madras Vs. Express Newspapers Ltd.":
The court referred to the Supreme Court judgment, which emphasized that an application u/s 245C is maintainable only if it discloses income not previously disclosed before the Assessing Officer. The judgment clarified that if the income-tax authorities have already discovered the income, the application for settlement is not tenable. The court held that the petitioner's application u/s 245C was not tenable as it pertained to income already discovered by the authorities during the search.
Conclusion:
The court concluded that the order passed by the Settlement Commission allowing the application u/s 245C was without jurisdiction and non-est in law. The appeal filed before the Commissioner of Appeals, Income-tax, Aurangabad, was directed to be restored and dealt with in accordance with the law. The court granted a stay on the judgment and order for six weeks.
Disposition:
Rule disposed of in the aforesaid terms.
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2009 (9) TMI 1014
The Bombay High Court disposed of the petition based on joint motion by the parties. The minutes of order were taken on record for identification, and all concerned parties are to act on authenticated copy.
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2009 (9) TMI 1013
Whether in the facts and circumstances of the case and in law the CESTAT is right in dismissing the appeal of Revenue and holding that no redemption fine can be imposed and penalty levied when the goods are physically not available for confiscation?
Held that: - as the goods are not available for confiscation no redemption fine can be imposed - before the Tribunal the issue of penalty was not at all involved. We find that no substantial question of law is involved - appeal dismissed - decided partly in favor of assessee.
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