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2010 (11) TMI 1065
Issues involved:
The judgment involves a challenge to the order passed by the Intellectual Property Appellate Board dismissing an appeal against the rejection of a trademark application for the mark "Cobra" in Class 9 under the Trade and Merchandise Marks Act, 1958.
Details of the Judgment:
1. Trademark Application Rejection:
The Petitioner's application for the trademark "Cobra" in Class 9 was opposed by Respondent No.1, who claimed ownership of the mark based on prior registration and use. The Deputy Registrar rejected the application citing lack of distinctiveness, non-use, and potential confusion with the existing registered mark of Respondent No.1. The triple identity test was found to be satisfied, leading to the refusal of registration.
2. Evidence of Prior Use:
The Petitioner claimed prior use of the mark since 1978 but failed to provide sufficient evidence to support this claim. The Deputy Registrar and the IPAB both found that the Petitioner did not establish the required user since 1978, based on the evidence presented, which included sales statistics and invoices without clear association with the mark "Cobra."
3. Concurrent User Defense:
The Petitioner argued for the defense of concurrent user of the mark and alleged that Respondent No.1's lack of action indicated acquiescence. However, the Court upheld the decision that the grant of registration to the Petitioner would cause confusion and deception due to the identical mark being used for similar goods in the same trade channel.
4. Final Decision:
The Court upheld the IPAB's decision to dismiss the Petitioner's appeal, stating that no grounds were found to interfere with the order. The petition was ultimately dismissed, affirming the rejection of the trademark application for "Cobra" in Class 9.
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2010 (11) TMI 1064
Issues Involved:1. Whether notional interest on interest-free deposit should be added to the rent received for determining the annual value u/s 23(1)(a) of the Income Tax Act. 2. Whether the CIT(A) erred in not appreciating the fact that the rent earned would have been higher without the interest-free deposit. Summary:Issue 1: Notional Interest on Interest-Free DepositThe assessee rented out property at 65-C, Mittal Tower, Nariman Point, Mumbai, for a monthly rent of Rs. 10,000 and an interest-free deposit of Rs. 60,00,000. The AO proposed adding notional interest on the interest-free deposit to the rent received to determine the annual value u/s 23(1)(a). The assessee relied on the Bombay High Court decision in J.K. Investors (Bombay) Ltd., which stated that notional interest should not be added to the annual value. The AO, however, referenced the Tribunal's decision in Tivoli Investment & Trading Co. P. Ltd., which suggested that notional interest should be considered to determine the annual value. The AO determined the annual value at Rs. 10,20,000, including notional interest. Issue 2: CIT(A)'s DecisionOn appeal, the CIT(A) directed the AO to accept the annual value as declared by the assessee, following the Bombay High Court's decision in J.K. Investors (Bombay) Ltd. The revenue appealed against this decision. Tribunal's Findings:The Tribunal considered similar issues in the case of DCIT Vs. Reclamation Realty India Pvt. Ltd., where it was held that the annual value should be based on the municipal valuation unless the actual rent received exceeds this value. The Tribunal referenced several judicial pronouncements, including the Supreme Court's decisions in Diwan Daulat Kapoor and Mrs. Sheila Kaushish, which supported the view that the annual value should be based on municipal valuation or standard rent under rent control laws, not on notional interest. The Tribunal also noted that the Bombay High Court in Smitaben N. Ambani Vs. CWT held that municipal valuation should be the yardstick for determining annual value. The Tribunal found that the decision in Baker Technical Services (P) Ltd., which was contrary to the Bombay High Court's view, could not be followed. The Tribunal concluded that the annual value should be the municipal valuation, and notional interest on the interest-free deposit should not be added. Therefore, the Tribunal upheld the CIT(A)'s order and dismissed the revenue's appeal. Conclusion:The appeal by the revenue is dismissed, and the order of the CIT(A) is upheld, confirming that notional interest on interest-free deposits should not be added to the rent received for determining the annual value u/s 23(1)(a) of the Income Tax Act. Order pronounced in the open court on the 26th day of Nov. 2010.
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2010 (11) TMI 1063
Issues Involved:
1. Interpretation of Sections 2(m)(iv) and 17 of the Delhi Lokayukta and Upalokayukta Act, 1995 (DLAU Act).
2. Jurisdiction of the Lokayukta over IAS officers deputed to government-owned companies.
3. The nature of the Lokayukta's function and its implications on impartiality and neutrality.
Detailed Analysis:
1. Interpretation of Sections 2(m)(iv) and 17 of the DLAU Act:
The primary issue revolves around the interpretation of Sections 2(m)(iv) and 17 of the DLAU Act. Section 2(m)(iv) defines 'public functionary' to include a Chairman, Vice-Chairman, Managing Director, or a Member of the Board of Directors of a government company. Section 17, however, explicitly states that the Lokayukta shall not inquire into allegations against any member of the Civil Services of the Union or an All India Service, which includes IAS officers.
2. Jurisdiction of the Lokayukta over IAS Officers:
The petitions question whether the Lokayukta has jurisdiction over IAS officers deputed to government-owned companies. The Lokayukta had interpreted that IAS officers appointed as Directors of government companies lose their immunity under Section 17 and become amenable to the jurisdiction of the Lokayukta. However, the High Court disagreed, stating that Section 17 is a total prohibition against the Lokayukta entertaining any complaint against an IAS officer, irrespective of their position in a government-owned company. The Court emphasized that Section 17 is declaratory and overrides any contrary indication in Section 2(m)(iv).
3. Nature of the Lokayukta's Function:
The Lokayukta argued that its role is investigative rather than adjudicatory, suggesting that seeking to be heard in support of its own order does not compromise its impartiality. However, the Court noted that the Lokayukta's decision on jurisdiction is an adjudicatory function, as it involves deciding a dispute (lis) between two parties. The Court stressed that the Lokayukta must always be seen as impartial and should not seek to defend its decisions when challenged in higher courts. The Lokayukta's role should be confined to the scope of the DLAU Act, and it should not add clauses or exceptions that do not exist.
Court's Decision:
The High Court set aside the Lokayukta's order dated 5th February 2010, ruling that the Lokayukta had no jurisdiction to inquire into allegations against the petitioners, who were IAS officers on deputation to government-owned companies. The complaints were dismissed as not maintainable. The Court also dismissed the Lokayukta's applications to be impleaded or heard in support of its order, emphasizing the need for the Lokayukta to maintain impartiality and not defend its decisions in higher courts. The writ petitions were allowed with no order as to costs.
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2010 (11) TMI 1062
Issues Involved:
1. Scope of the expression 'judicial office' in Article 217(2)(a) of the Constitution.
2. Whether a 'Family Court' has the trappings of a Court and if Family Court Judges are deemed members of the Higher Judicial Services of the State.
3. Eligibility of Family Court Judges for elevation as Judge of the High Court under Article 217 of the Constitution.
Detailed Analysis:
1. Scope of the Expression 'Judicial Office' in Article 217(2)(a) of the Constitution:
The Court examined whether the term 'judicial office' in Article 217(2)(a) includes the office held by Family Court Judges. The term 'judicial office' was not defined in the Constitution, unlike 'District Judge' or 'Judicial Service' under Article 236. The Court referred to previous judgments, including H.R. Deb and Shri Kumar Padma Prasad, which clarified that 'judicial office' implies an office primarily judicial in nature, free from executive control, and disciplined to uphold judicial independence. The Court concluded that Family Court Judges, despite performing judicial functions, do not hold a 'judicial office' as contemplated under Article 217(2)(a).
2. Whether a 'Family Court' Has the Trappings of a Court:
The Court analyzed whether Family Courts, established under Section 3 of the Family Courts Act, 1984, possess the characteristics of a Court. The Family Courts were created to promote conciliation and speedy settlement of family disputes, with jurisdiction over specific matters outlined in Section 7(1) of the Act. The Court noted that Family Courts perform judicial functions akin to civil or criminal courts but within a limited jurisdiction. The Court referred to the Constitution Bench judgment in Harinagar Sugar Mills Ltd., which distinguished between Courts and Tribunals, stating that Family Courts have the trappings of a Court and their Judges are 'Judges' in the generic sense.
3. Eligibility of Family Court Judges for Elevation as Judge of the High Court:
The Court examined if Family Court Judges could be considered for elevation to the High Court under Article 217. The Bombay Judicial Services Recruitment Rules, 2008, excluded Family Court Judges from the cadre of Judicial Services. The Court reiterated that appointments to the post of District Judge must comply with Articles 233 and 234, which require judicial service members to be considered for such posts. The Court found that Family Court Judges, not being part of the Higher Judicial Services, do not meet the criteria for elevation to the High Court. The Court also noted the significant distinctions between the roles and functions of District Judges and Family Court Judges, emphasizing that Family Court Judges' limited jurisdiction and experience do not equate them with members of the Higher Judicial Services.
Conclusion:
The Court held that Family Court Judges, while performing judicial functions, do not hold a 'judicial office' under Article 217(2)(a) and are not part of the Judicial Services of the State of Maharashtra. Consequently, they are not eligible for elevation to the High Court. The writ petition was dismissed with no order as to costs.
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2010 (11) TMI 1061
Issues Involved:
1. Whether the land in question was a "forest" or "private forest" under the Maharashtra Private Forests (Acquisition) Act, 1975 on the appointed day, i.e., August 30, 1975.
2. Whether the findings of the Sub-Divisional Officer and Maharashtra Revenue Tribunal regarding the nature of the land were correct.
3. Whether the Bombay High Court's judgment reversing the Tribunal's findings was justified.
4. Whether the principles of natural justice were violated.
5. Whether the doctrine of proportionality was applicable in the administrative action taken by the State.
Detailed Analysis:
1. Nature of the Land:
The primary issue was whether the land in question was a "forest" or "private forest" under the Maharashtra Private Forests (Acquisition) Act, 1975 on the appointed day, i.e., August 30, 1975. The Supreme Court noted that the definition of "forest" under Section 2(c-i) of the Act includes land that was part of a forest on the appointed day. The Court concluded that the land, which encompassed the disputed area, was a "forest" on the appointed day, supported by documentary evidence, including revenue records and conveyance deeds describing the land as forest land.
2. Findings of the Sub-Divisional Officer and Maharashtra Revenue Tribunal:
The Sub-Divisional Officer initially held that the land was not a "private forest." However, the Maharashtra Revenue Tribunal reversed this finding, declaring the land as "forest" and "private forest" under the Act. The Tribunal's decision was upheld by the High Court, which found that the Tribunal had committed a jurisdictional error by not considering the earlier findings and evidence properly.
3. Bombay High Court's Judgment:
The Bombay High Court allowed the petition filed by the State, quashing the Tribunal's order and holding that the land was "private forest" under the Act. The High Court emphasized that the Tribunal's approach was not in consonance with the law, as it failed to consider the legislative intent and the broader definition of "forest" under the Act.
4. Principles of Natural Justice:
The appellant-Corporation contended that the orders were in violation of the principles of natural justice. However, the Supreme Court found that the State had two opportunities to produce evidence, and the appellant-Corporation had been given ample opportunity to present its case. The Court concluded that the principles of natural justice were not violated.
5. Doctrine of Proportionality:
The appellant-Corporation argued that the State's decision to consider the land as automatically vested with the Government was irrational and disproportionate. The Supreme Court applied the doctrine of proportionality, which requires that administrative action should impinge on individual rights to the minimum extent necessary to preserve public interest. The Court found that the State's action was proportionate and in line with the principles of environmental protection and sustainable development.
Conclusion:
The Supreme Court dismissed both appeals, upholding the Bombay High Court's judgment that the land in question was "private forest" under the Maharashtra Private Forests (Acquisition) Act, 1975, and vested in the State Government. The Court emphasized the importance of interpreting the provisions of the Act in light of its purpose, which is to conserve forest resources and maintain ecological balance. The principles of natural justice were not violated, and the State's action was found to be proportionate and in public interest.
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2010 (11) TMI 1060
Issues Involved:
1. Infringement of Trademark
2. Passing Off
3. Validity of Registration
4. Distinctiveness of Trademark
5. Statutory Defenses to Infringement Action
Issue-wise Detailed Analysis:
1. Infringement of Trademark:
The court examined whether the appellant's registered trademarks "LOSORB" and "LO-SORB" were infringed by the respondent's use of the phrase "LOW ABSORB." The court held that the respondent's use of "LOW ABSORB" was descriptive and did not amount to trademark infringement. The court also noted that the respondent prominently displayed its own trademark "Sundrop," which further differentiated its product from the appellant's.
2. Passing Off:
The court referred to the Division Bench decision in Cadila Healthcare Ltd. v. Gujarat Co-operative Milk Marketing Federation Ltd., which held that descriptive terms like "Sugar Free" cannot be exclusively owned. Applying this reasoning, the court concluded that "LOW ABSORB" is a common descriptive term and not a coined word, thus the appellant cannot claim exclusive rights over it. The court found no likelihood of confusion between the appellant's and respondent's products, as the packaging and trademarks were sufficiently distinct.
3. Validity of Registration:
The court scrutinized the validity of the appellant's trademark registrations, noting that the trademarks "LOSORB" and "LO-SORB" were registered on a "proposed to be used" basis without evidence of distinctiveness at the time of registration. The court held that these trademarks were prima facie invalid as they were minor variations of the descriptive term "LOW ABSORB."
4. Distinctiveness of Trademark:
The court analyzed whether the appellant's trademarks had acquired distinctiveness. It concluded that the appellant had not used the trademarks "LOSORB" and "LO-SORB" for a sufficiently long period to acquire distinctiveness. The court emphasized that descriptive trademarks require extensive and undisturbed use over many years to achieve distinctiveness, which was not the case here.
5. Statutory Defenses to Infringement Action:
The court considered the statutory defenses under Sections 30(2)(a) and 35 of the Trademarks Act, which allow the use of descriptive terms in a bona fide manner. The court found that the respondent's use of "LOW ABSORB TECHNOLOGY" was descriptive and not as a trademark, thus falling within the statutory defenses. The court also noted that the respondent had removed the "TM" symbol from "LOW ABSORB TECHNOLOGY," indicating no intent to use it as a trademark.
Conclusion:
The appeal was dismissed, with the court holding that the appellant did not have a prima facie case for trademark infringement or passing off. The court emphasized the importance of not granting exclusive rights over descriptive terms and upheld the statutory defenses available to the respondent. The court also noted that the appellant's trademarks were prima facie invalid due to lack of distinctiveness at the time of registration.
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2010 (11) TMI 1059
Additional charges/surcharge payable on the delayed payment of outstanding electricity dues raised under Clause 32.2.1 and 34 of the Terms and Conditions of supply (TCS) - upward revision of price - HELD THAT:- The Electricity Board appealed to this Court against the judgment of the High Court. Allowing the appeals preferred by the Board this Court took the view that while the consumers had no obligation to take notice of the revised tariffs and to make any payment on the basis thereof after the judgment of the High Court of Kerala till the said decision was reversed by this Court, yet no sooner the decision of this Court upheld the upward revision of the tariffs, the Board's entitlement to draw bills on the basis of the revisions and consequently enforce payment of such bills by the consumers revived with full force. This Court repelled the contention that the liability to pay the revised tariffs accrued only after the pronouncement of the judgment of this Court upholding the upward revision and not from any date prior to that. This Court held that once the upward revision was found to be valid and enforceable such revision would be effective from the date the revision was made, no matter such revision had remained unenforceable for some period on account of the decision of the High Court.
It is quite evident that this Court had upheld the claim for payment of interest @ 18% p.a. primarily because of the stipulation contained in the tariffs/agreement executed between the Board and the consumer providing for payment of interest at that rate in the event of delay in the payment/discharge of the bills raised against the consumer. It is not as though this Court had refused to enforce the stipulation contained in the tariffs providing for recovery of interest from the consumer if the latter failed to pay the amounts within the time stipulated - The very fact there was during the intervening period an erroneous decision of the High Court obliterating the revision in full or in part would make little difference in so far as the liability to pay the amount under the revised tariffs was concerned. So also the fact that the consumers were not deliberately in default on account of the judgment of the High Court did not affect the enforceability of the demand arising from the revised tariffs or the stipulation regarding payment of interest demanded on the same on account of the non- payment or delayed payment of the amount recoverable by the Board.
Reliance placed upon the decision of this Court in KANORIA CHEMICALS & INDUSTRIES LTD. VERSUS UP. STATE ELECTRICITY BOARD [1997 (3) TMI 600 - SUPREME COURT]. That was also a case where the validity of a notification issued by the U.P. State Electricity Board revising the electricity rates/tariffs under Section 49 of the Electricity (Supply) Act, 1948 was challenged by the consumers. Interlocutory applications filed in the writ petitions for stay of the operation of the impugned notification were eventually dismissed by the High Court whereupon the consumers deposited the differential amount between the pre-revised and the revised electricity rates. Consumers did not, however, deposit the late payment surcharge "recoverable" in terms of Clause 7(b) of the notification. Notices of demand were, therefore, issued to the consumers which were challenged in a fresh batch of writ petitions filed by them - The main contention urged by the consumers before the High Court was that since the operation of the notification revising the tariffs had been stayed between 25th July, 1990 and 1st March, 1993, no late payment surcharge could be levied on the amount withheld by the petitioners under the orders of the Court, no matter the writ petitions were finally dismissed. That contention was rejected by a Division Bench of the High Court of Allahabad. The matter was then brought up to this Court in appeal by the consumers, inter alia, contending that the stay of the operation of the impugned notification relieved the consumers of the obligation to pay the revised tariffs/rates and consequently additional charges for late payment, if any.
Both on the question of restitution of the benefit drawn by a party during legal proceedings that eventually fail as also on the general principle that a party who fails in the main proceedings cannot benefit from the interim order issued during the pendency of such proceedings, this Court found against the consumers and upheld the demand for payment of additional charges recoverable on account of the delay in the payment of the outstanding dues. Far from lending any assistance to the appellant-company the decision squarely goes against it and has been correctly appreciated and applied by the High Court.
Appeal dismissed.
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2010 (11) TMI 1058
Issues involved: Conviction under Section 420 and Section 120B, IPC, compounding of offences, petition under Section 482 Cr.P.C. for quashing of FIR, interpretation of Section 320 Cr.P.C., reconsideration of previous decisions allowing compounding of non-compoundable offences.
In the judgment, the petitioner was convicted under Section 420 and Section 120B, IPC by the Magistrate and filed an appeal challenging the conviction. During the pendency of the appeal, the petitioner applied for compounding the offence, which was to be taken up with the main appeal. Subsequently, a petition under Section 482 Cr.P.C. for quashing the FIR based on compounding was dismissed by the High Court, leading to the filing of the current petition before the Supreme Court.
The petitioner's counsel cited three previous decisions of the Court, including B.S. Joshi vs. State of Haryana, Nikhil Merchant vs. CBI, and Manoj Sharma vs. State, where compounding of non-compoundable offences was indirectly allowed. However, the Court noted that while Section 420 IPC is compoundable with permission of the Court under Section 320 Cr.P.C., Section 120B IPC, relating to criminal conspiracy, is a non-compoundable offence and cannot be permitted to be compounded.
The Court emphasized that it cannot amend the statute and must exercise judicial restraint, as only the legislature can amend Section 320 Cr.P.C. The Court expressed the view that non-compoundable offences should not be permitted to be compounded directly or indirectly, indicating a need to reconsider the previous decisions allowing such compounding.
Acknowledging that one of the judges was part of the previous decisions, the Court highlighted the importance of being open to correcting mistakes and directed the matter to be placed before a larger Bench for reconsideration of the correctness of the earlier decisions. The papers of the case were to be submitted to the Chief Justice of India for the constitution of a larger Bench for further deliberation.
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2010 (11) TMI 1057
Issues Involved:
1. Whether the appellants acted as financiers in the IPO scam.
2. Whether the appellants were involved in cornering shares meant for retail investors.
3. Whether the appellants employed fraudulent, deceptive, and manipulative practices.
4. Whether the appellants made unlawful gains and should be directed to disgorge the amount.
5. Whether the Board has the power to direct disgorgement and interest on the disgorged amount.
Summary:
1. Whether the appellants acted as financiers in the IPO scam:
The appellants, both practicing chartered accountants, were alleged to have provided finance to key operators, Budhwani and Sugandh, enabling them to apply for shares in the retail category of ten IPOs. The Board issued a show cause notice u/s 11 and 11B of the Securities and Exchange Board of India Act, 1992, alleging that the appellants employed fraudulent practices by financing these transactions.
2. Whether the appellants were involved in cornering shares meant for retail investors:
The appellants denied collusion, claiming they merely lent money. However, the whole time member found that the appellants manipulated the IPO allotment process by providing finance to key operators who made applications through fictitious/benami accounts, thereby cornering shares meant for retail investors. The shares received by the appellants were not loan repayments but were transferred as per a prior understanding.
3. Whether the appellants employed fraudulent, deceptive, and manipulative practices:
The Tribunal held that the appellants financed the key operators to corner shares in the retail category, thereby employing fraudulent, deceptive, and manipulative practices in violation of Section 12 A of the Act and Regulations 3 and 4(1) of the Regulations. The appellants' claim of a principal-to-principal relationship was rejected, and it was found that they acted in concert with the key operators.
4. Whether the appellants made unlawful gains and should be directed to disgorge the amount:
The appellants were found to have made an unlawful gain of Rs. 4.05 crores by selling the cornered shares at a higher price post-listing. The Tribunal affirmed the direction to disgorge this amount along with Rs. 1.95 crores as interest. The argument that the Board lacked the power to direct disgorgement was rejected, citing that disgorgement is an equitable remedy to prevent unjust enrichment.
5. Whether the Board has the power to direct disgorgement and interest on the disgorged amount:
The Tribunal upheld the Board's power to order disgorgement and interest, stating that the principles of justice, equity, and good conscience authorize such directions. The rate of 12% interest was deemed appropriate given the appellants' illegal profits and the general rate of interest.
Conclusion:
The appeal was dismissed, affirming the findings and directions of the whole time member, including the prohibition on dealing in securities and the order to disgorge the unlawful gains with interest.
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2010 (11) TMI 1056
Issues Involved:
1. Interpretation of the 2nd proviso to Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA).
2. Requirement of minimum percentage of financial assets to be purchased by a securitization company or an asset reconstruction company under the 2nd proviso.
3. Harmonization of the 2nd and 3rd provisos of Section 15(1) of SICA.
4. Literal versus purposive interpretation of statutory provisions.
Detailed Analysis:
1. Interpretation of the 2nd Proviso to Section 15(1) of SICA:
The core issue revolves around the interpretation of the 2nd proviso to Section 15(1) of SICA. This proviso states that no reference shall be made to the Board for Industrial and Financial Reconstruction (BIFR) after the commencement of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), where financial assets have been acquired by any securitization company or reconstruction company under sub-section (1) of Section 5 of that Act.
2. Requirement of Minimum Percentage of Financial Assets:
The Appellate Authority for Industrial and Financial Reconstruction (AAIFR) interpreted that the 2nd proviso implicitly requires that at least 75% of the financial assets of a sick company be acquired by a securitization company or asset reconstruction company for the proviso to apply. This interpretation was based on a harmonious reading of the 2nd and 3rd provisos of Section 15(1) of SICA. The 3rd proviso explicitly requires the will of 75% or more of the secured creditors to abate a reference under SICA.
3. Harmonization of the 2nd and 3rd Provisos:
AAIFR emphasized the need to interpret the 2nd and 3rd provisos harmoniously. The 3rd proviso requires that at least 75% of the value of the outstanding debt must be represented by secured creditors to cause the abatement of a reference. By analogy, AAIFR concluded that the 2nd proviso should also be interpreted to require that at least 75% of the financial assets be acquired by a securitization or asset reconstruction company for the proviso to be operative.
4. Literal Versus Purposive Interpretation:
The petitioners argued for a literal interpretation of the 2nd proviso, suggesting that any percentage of financial assets, whether secured or unsecured, should suffice to prevent a reference under SICA. However, the court noted that a literal interpretation leading to absurdity must be avoided. The court cited precedents emphasizing that the intention of the legislature and the purpose of the statute should guide interpretation. The court referenced cases such as Hameedia Hardware Stores v. B. Mohan Lal Sowcar and Entertainment Network (India) Ltd. v. Super Cassettes Industries Limited, which support a purposive approach to statutory interpretation.
Conclusion:
The court concluded that a literal interpretation of the 2nd proviso, which does not require a minimum percentage of secured assets to be purchased by a securitization or asset reconstruction company, results in absurdity and a stalemate. Therefore, the court held that the 2nd proviso should be interpreted to require that at least 75% of the secured assets be purchased by such companies for the proviso to apply. This interpretation aligns with the legislative intent to prevent the frustration of the revival and rehabilitation of sick industrial companies.
Judgment:
The writ petition was dismissed, with the court emphasizing the need for a purposive interpretation to avoid absurd results and ensure the coherent application of SICA and SARFAESI Act provisions. The parties were left to bear their own costs.
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2010 (11) TMI 1055
Issues Involved: Assessment u/s 143(3) for AY 2006-07; Disallowance of expenses - conveyance, business promotion, welfare; Disallowance of vehicle expenses; Disallowance of telephone expenses.
The judgment by the Appellate Tribunal ITAT Mumbai pertains to an appeal by an individual assessee for the assessment year 2006-07 u/s 143(3) of the Income Tax Act. The assessee, engaged in the manufacture and sale of designer garments, also derives income from property, capital gains, and other sources.
Disallowance of Conveyance, Business Promotion, and Welfare Expenses:
The first ground of appeal challenges the disallowance of 20% of conveyance expenses, business promotion expenses, and other welfare expenses. The Assessing Officer and CIT(A) disallowed a portion of these expenses, totaling &8377; 5,95,547, based on a chart provided by the assessee. However, upon review, the Tribunal found the expenses to be reasonable and proportionate to the income declared by the assessee. Noting the absence of evidence indicating inflated expenses, the Tribunal allowed this ground and deleted the disallowances.
Disallowance of Vehicle Expenses:
The second ground concerns the disallowance of 20% of vehicle expenses amounting to &8377; 2,12,916. The Tribunal acknowledged the potential for personal use of the vehicle but deemed the disallowance excessive. Consequently, the Tribunal reduced the disallowance to 10% of the expenses, partially allowing this ground.
Disallowance of Telephone Expenses:
The third ground challenges the disallowance of 15% of telephone expenses totaling &8377; 1,27,300. While the nature of the assessee's business supported the reasonableness of these expenses, the Tribunal recognized the possibility of personal use. To address this, the Tribunal reduced the disallowance to 10% of the telephone expenses, partially allowing this ground.
In conclusion, the Tribunal partly allowed the appeal, overturning the disallowances on conveyance, business promotion, and welfare expenses, reducing the disallowance on vehicle expenses, and adjusting the disallowance on telephone expenses.
This summary provides a detailed overview of the issues involved in the legal judgment, outlining the Tribunal's decisions on each ground of appeal related to the disallowance of various expenses by the assessing authorities.
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2010 (11) TMI 1054
The appeal filed by the assessee against the order of the CIT(A) for Assessment Year 2001-02 was dismissed by the ITAT Delhi as the assessee did not appear for the hearing. The appeal was treated as unadmitted. The order was pronounced on 30.11.2010.
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2010 (11) TMI 1053
Issues involved:
The judgment involves the dismissal of an appeal under Section 9 of the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 against the order of the Estate Officer under Sections 4 and 7 of the PP Act for ejectment and recovery of damages.
Details of the judgment:
1. The petition challenged the judgment of the Addl. District Judge, Delhi, which dismissed the appeal against the Estate Officer's order. The respondent claimed to have been directed to deliver possession despite the dismissal of eviction proceedings. The Court ordered to maintain status quo.
2. The petitioner's counsel admitted that a letter directing possession was issued inadvertently and was subsequently withdrawn.
3. The Addl. District Judge ruled that the appeal did not lie against the Estate Officer's order and upheld the finding that the respondent's license had not been terminated as per law, thus not being an unauthorized occupant.
4. The Court concluded that there was no point in continuing the petition as the findings were factual. It advised the petitioner to initiate fresh proceedings for ejectment and damages, a right not contested by the respondent. The respondent's counsel mentioned that terminating the license in accordance with the law is necessary for initiating fresh proceedings.
5. The petition was dismissed, granting liberty to the petitioner to start new proceedings against the respondent, with no order as to costs.
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2010 (11) TMI 1052
Issues involved: Determination of whether the rent received by the assessee for leasing out part of the club premises should be classified as income from house property or business income.
Summary:
Issue 1: Nature of Income
- The assessee leased out club rooms and infrastructures to an educational trust, claiming the income as business income.
- The AO considered it as "income from house property" based on TDS deduction and disallowed expenses.
- The CIT(A) upheld the AO's decision, stating that the property was leased out as the owner, not for business exploitation.
- The AR argued that the premises were temporarily leased to exploit business assets until construction was completed, citing relevant court decisions.
- The DR contended that the premises were not used for business activities as per the Memorandum of Association.
- The Tribunal noted that the premises were not utilized for the assessee's business activities and were leased out to an educational institution, not for business purposes.
- Citing Supreme Court decisions, the Tribunal concluded that the rent received should be classified as income from house property, affirming the CIT(A)'s decision.
Conclusion:
- The appeal by the assessee was dismissed, and the income from the leased premises was categorized as income from house property.
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2010 (11) TMI 1051
Issues involved: The judgment deals with appeals against the orders of the learned CIT (A) Visakhapatnam related to the assessment years 1992-93 to 1997-98, focusing on the deduction of amounts spent by the assessee against the income assessed.
Issue 1 - Registration under section 12A:
The assessee trust was formed in 1989 but applied for registration under section 12A of the Act in 1997, which was granted with effect from 1997. As the registration was not obtained for the years under consideration, the Assessing Officer assessed the gross receipts as the total income without allowing any deductions. The assessee appealed, citing a previous ITAT decision, and the CIT (A) partially allowed the appeals by directing the Assessing Officer to allow deductions for specific purposes and welfare programs. The revenue appealed this decision.
Issue 2 - Verification of expenditure claims:
The revenue contended that since the assessee did not have registration under section 12A for the relevant years, it could not claim exemptions under sections 11 to 13 of the Act. The Assessing Officer did not verify the claims of amount spent, and the CIT (A) accepted the assessee's version without proper verification. The revenue argued that the previous ITAT decision cited by the assessee was distinguishable and required examination. The ITAT decided to set aside the CIT (A) order and directed the Assessing Officer to examine the expenditure claims in light of the previous ITAT decision after giving the assessee an opportunity to be heard.
Conclusion:
The ITAT allowed the appeals of the revenue for statistical purposes, emphasizing the need for a thorough examination of the expenditure claims in line with the previous ITAT decision. The judgment was pronounced on November 18, 2010.
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2010 (11) TMI 1050
Issues Involved:
1. Whether the mark applied for registration was used in respect of the goods for which the mark was registered.
2. Whether the respondent had a bona fide intention to use the mark applied for under section 18 of the Trade and Merchandise Marks Act.
3. Whether the mark registered in favor of the respondent is a service mark.
4. Whether there is a non-use of registered trade mark by the respondent for a period of over 5 years and 1 month.
5. Whether the registered trade mark is disentitled for protection in a Court of Law under Section 11(e) of the Trade and Merchandise Marks Act.
6. Whether the registered trade mark has lost its distinctiveness and is liable to be removed under section 32(c).
7. Whether the respondent has committed fraud while obtaining registration of the mark.
8. To what further relief?
Comprehensive, Issue-wise Detailed Analysis:
Issue 1: Whether the mark applied for registration was used in respect of the goods for which the mark was registered.
The Intellectual Property Appellate Board (IPAB) held that the trade mark Nos. 475269, 475267, and 484837 had not been used by the appellant for more than five years and one month. The appellant failed to prove that it had been manufacturing or trading the goods for which it had taken the registrations. Consequently, the IPAB directed the Registrar to remove these registrations from the register.
Issue 2: Whether the respondent had a bona fide intention to use the mark applied for under section 18 of the Trade and Merchandise Marks Act.
The IPAB did not specifically address this issue in its decision. However, the appellant argued that the IPAB erred by not considering the wide definition of 'goods' under Section 2(g) of the 1958 Act and by relying on the provisions of the 1999 Act and the Trade Marks Rules, 2002, which were not applicable.
Issue 3: Whether the mark registered in favor of the respondent is a service mark.
The IPAB considered software as a 'service' and the subject registrations were in relation to goods. The appellant contended that the IPAB erred by not distinguishing between 'computer programme' and 'computer programming' and by not considering 'computer' under Class 9 as 'goods.'
Issue 4: Whether there is a non-use of registered trade mark by the respondent for a period of over 5 years and 1 month.
The IPAB found that the appellant had not used the registered trade marks for the goods in question for more than five years and one month. The appellant argued that the IPAB failed to consider the proviso to Section 46(1), which allows reliance on the use of the registered trade mark during the relevant period in relation to 'goods of the same description.'
Issue 5: Whether the registered trade mark is disentitled for protection in a Court of Law under Section 11(e) of the Trade and Merchandise Marks Act.
The IPAB did not specifically address this issue in its decision. The appellant argued that the IPAB should have considered whether the use of the mark 'Infosys' by the first respondent on computer hardware would create confusion among consumers, leading them to believe that the hardware was manufactured by the appellant.
Issue 6: Whether the registered trade mark has lost its distinctiveness and is liable to be removed under section 32(c).
The IPAB did not specifically address this issue in its decision. The appellant argued that the IPAB failed to apply proper legal tests for determining 'goods of the same description' and that 'computer software' amounts to 'goods of the same description' as 'computer hardware.'
Issue 7: Whether the respondent has committed fraud while obtaining registration of the mark.
The first respondent argued that the appellant had not used the registered trade marks for the goods in question for almost 30 years, indicating a mala fide intention in having the same registered for the purpose of squatting and trafficking. The appellant contended that the IPAB failed to consider the aspect of public interest and the potential confusion among consumers.
Issue 8: To what further relief?
The Supreme Court concluded that the applications made by the first respondent for rectification/removal of the subject trade marks from the register need to be considered afresh by the IPAB in accordance with law and the observations made. The appeals were allowed in part, and the impugned order dated September 9, 2004, was set aside. The applications were restored to the file of the IPAB for hearing and disposal afresh in accordance with law.
Conclusion:
The Supreme Court allowed the appeals in part, setting aside the IPAB's order and restoring the applications to the IPAB for fresh consideration. The Court emphasized the need for the IPAB to consider the locus standi of the first respondent as a 'person aggrieved' and to address the diverse contentions raised by both parties.
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2010 (11) TMI 1049
Issues Involved:1. Deduction u/s 80HHC on DEPB licence income. 2. Deduction u/s 80HHC on exchange rate difference. 3. Levy of interest u/s 234B & 234C. 4. Initiation of penalty u/s 271(1)(c). Summary:Issue 1: Deduction u/s 80HHC on DEPB licence incomeThe Revenue contended that the CIT(A) erred in allowing the deduction u/s 80HHC by reducing Rs. 2,53,683/- as DEPB licence income instead of Rs. 49,76,752/-. The Assessing Officer (AO) noted that the assessee's export turnover exceeded Rs. 10 crores, thus DEPB income should not be considered for deduction u/s 80HHC. The CIT(A) relied on a Mumbai Tribunal decision and allowed 90% of DEPB income for deduction. The Tribunal reversed the CIT(A)'s decision, citing amendments in Section 28(iiia), 28(iiid), and 28(iiie) and the case of Intas Exports vs. ACIT, concluding that the assessee did not fulfill the requisite conditions for the deduction. Issue 2: Deduction u/s 80HHC on exchange rate differenceThe AO denied the deduction u/s 80HHC for exchange rate difference due to lack of evidence on the receipt date. The CIT(A) allowed the deduction, stating the foreign exchange rate difference had a direct nexus with export sales and was received within the allowed time. The Tribunal upheld the CIT(A)'s decision, noting that the AO did not correctly appreciate the facts and the assessee provided sufficient evidence, including bank certificates and compliance with Accounting Standard 11. Issue 3: Levy of interest u/s 234B & 234CThe assessee argued that interest u/s 234B & 234C was levied without an opportunity to be heard, citing ITAT Ahmedabad's decision in Vikshara Trading & Investment (P) Ltd. vs. DCIT. The Tribunal directed the AO to recalculate the interest, considering the assessee was unaware of the amendments at the time of filing returns, following the precedent set in Intas Exports vs. ACIT. Issue 4: Initiation of penalty u/s 271(1)(c)The assessee's ground challenging the initiation of penalty u/s 271(1)(c) was dismissed as premature, as no substantial grievance was caused by merely initiating penalty proceedings. Conclusion:Both the Revenue's appeal and the assessee's cross-objection were partly allowed. The Tribunal reversed the CIT(A)'s decision on DEPB licence income, upheld the CIT(A)'s decision on exchange rate difference, directed recalculation of interest u/s 234B & 234C, and dismissed the premature penalty initiation challenge.
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2010 (11) TMI 1048
Issues Involved:
1. Prior period expenditure disallowance.
2. Club Membership Fees.
3. Depreciation on cars.
4. Disallowance u/s 14A.
5. Deduction u/s 80HHC in respect of DEPB/DFRC.
6. Treatment of various incomes for deduction u/s 80HHC.
7. Foreign exchange gain treatment.
8. Sundry credit balance and provisions of doubtful debts written back.
Summary:
1. Prior Period Expenditure Disallowance:
The A.O. disallowed Rs. 3,32,671/- as prior period expenditure, which was confirmed by the CIT(A). The Tribunal directed the A.O. to disallow only Rs. 12,891/-, the net debit made to the P&L Account, as the assessee had no objection to this treatment.
2. Club Membership Fees:
The A.O. and CIT(A) disallowed Rs. 1,37,500/- as capital expenditure. The Tribunal allowed the expenditure as revenue in nature, referencing judgments from the Hon'ble Gujarat High Court and Hon'ble Delhi High Court, which held similar fees as revenue expenditure.
3. Depreciation on Cars:
The A.O. disallowed depreciation on cars registered in the names of Directors. The Tribunal restored the issue to the A.O. to examine the nature of purchase, source of funds, and beneficial ownership, directing that if the company is the beneficial owner, depreciation should be allowed.
4. Disallowance u/s 14A:
The issue was restored to the A.O. to decide afresh in light of the Hon'ble Bombay High Court judgment in the case of Godrej and Boyce Ltd.
5. Deduction u/s 80HHC in Respect of DEPB/DFRC:
The Tribunal restored the issue to the A.O. for re-examination in light of the Hon'ble Bombay High Court judgment in the case of Kalpataru Colours and Chemicals.
6. Treatment of Various Incomes for Deduction u/s 80HHC:
The Tribunal restored the issues of treating interest income, technology transfer, insurance claim, and miscellaneous income as other sources to the CIT(A) for adjudication. The issue of provision for doubtful debts written back was restored to the A.O. for examination.
7. Foreign Exchange Gain Treatment:
The Tribunal upheld the CIT(A)'s decision to include foreign exchange gain in the total turnover and export turnover for deduction u/s 80HHC, distinguishing it from the Hon'ble Bombay High Court's decision in CIT vs. Shah Originals.
8. Sundry Credit Balance and Provisions of Doubtful Debts Written Back:
The Tribunal restored the issue of sundry credit balance to the CIT(A) and the issue of provisions of doubtful debts written back to the A.O. for examination.
Conclusion:
Both appeals were partly allowed, with several issues restored to the A.O. and CIT(A) for re-examination and adjudication.
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2010 (11) TMI 1047
Maintainability of the criminal prosecutions - Petitions filed u/s 482 for quashing the order - the Public Analyst submitted his report stating that upon analysis of the sample of Pepsi Sweetened Carbonated Water, using the Directorate General of Health Services (DGHS) method, pesticide residue- Carbofuran, to the extent of 0.001 mg per litre was detected therein. The said sample was, therefore, adulterated within the meaning of Rule 65 of the 1955 Rules and Section 2(ia)(h) of the 1954 Act. Based upon the report of the Public Analyst, the CJM, took cognizance of the offence and issued process against the Appellants. The Appellants moved the HC u/s 482 Cr.P.C. for quashing of the aforesaid order of the CJM. The learned Single Judge by his order, dismissed the said application and directed the prosecution to continue with the case. Aggrieved by the order, the Appellant-Company, and its Directors have filed these appeals challenging the cognizance taken by the learned Magistrate.
HELD THAT:- the percentage of Carbofuran detected in the sample of Pepsico which was sent for examination to the Forensic Laboratory is within the tolerance limits prescribed for Sweetened Carbonated Water with effect from 17th June, 2009.It may be noted that the High Court had itself observed that mere presence of insecticide residue to any extent could not justify an allegation that the article of food was adulterated, but contrary to such observation, the High Court went on to hold that the Sweetened Carbonated Water manufactured by the Appellants was adulterated within the meaning of Section 2(ia)(h) of the 1954 Act.
It has to be kept in mind that although an argument was advanced with regard to the restrictions imposed on the use of insecticides under Rule 65 of the 1955 Rules, it is apparent from the order of the learned Single Judge that such a ground was given up by the respondents and the arguments were confined only with regard to the alleged violation of Section 2(ia)(h) of the 1954 Act.
We, accordingly, allow the appeals and set aside the judgment and order of the learned Single Judge impugned in these proceedings and quash the prosecution of the Appellants in respect of the various complaints challenged before the HC in its inherent jurisdiction.
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2010 (11) TMI 1046
Issues involved: Appeal against order of CIT(Appeals) regarding deletion of addition for personal expenditure and disallowance of bad debts written off for assessment year 2007-08.
Issue 1 - Deletion of addition for personal expenditure:
The assessee had debited a sum for professional charges, including amounts for consultancy services, ESOP scheme preparation, software consultancy, and HR consultancy. The AO disallowed the expenditure, questioning its nexus with the business. However, the ld. CIT(A) allowed the expenses, stating that they were revenue in nature as they did not lead to acquisition of capital assets or enduring benefits. The Tribunal upheld this decision, emphasizing that the expenditures were for staff welfare, business efficiency, and revenue purposes, hence deductible in computing total income.
Issue 2 - Disallowance of bad debts written off:
The assessee wrote off a sum from the account of a company and claimed it as a bad debt deduction. The AO disallowed the claim, but the ld. CIT(A) allowed it, noting that the debt was previously accounted for and properly written off. The Tribunal observed that the debt was for services rendered, had been accounted for earlier, and met the conditions under section 36(1)(vii) for deduction. As the write-off was genuine and met legal requirements, the Tribunal held that the assessee was entitled to the deduction. Consequently, the appeal against the disallowance of bad debts written off was dismissed.
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