|
Advanced Search Options
Case Laws
Showing 81 to 100 of 1251 Records
-
2012 (12) TMI 1176
Issues Involved:
1. Challenge to the order of detention dated 11.06.1976 under COFEPOSA.
2. Application of res judicata due to withdrawal of earlier petitions.
3. Legality of proceedings under SAFEMA initiated based on the detention order.
Summary:
1. Challenge to the Order of Detention:
The appellant challenged the dismissal of their Special Civil Application No. 3716 of 1995, which sought to quash the detention order dated 11.06.1976 under COFEPOSA and subsequent proceedings under SAFEMA. The detention order was initially revoked after the emergency was lifted on 21.03.1977, and no challenge was made during its subsistence. The Supreme Court's decision in Attorney General For India vs. Amratlal Prajivandas (1994) 5 SCC 54 was pivotal, stating that if the order of detention was not challenged during its subsistence, it could not be challenged later during SAFEMA proceedings. The High Court upheld this view, emphasizing that the legality and validity of the detention order could not be contested post-revocation if not challenged during its operative period.
2. Application of Res Judicata:
The learned single Judge ruled that the withdrawal of Special Civil Application No. 1276 of 1977 did not bar subsequent petitions on the ground of res judicata. However, the core issue was whether the detention order could be challenged after its revocation. The Court held that since the order was not contested during its effective period, subsequent challenges were impermissible, aligning with the Supreme Court's interpretation in the Attorney General For India case.
3. Legality of Proceedings under SAFEMA:
The appellants argued that the detention order's legality should be assessed on merits during SAFEMA proceedings. They cited various Supreme Court cases, including Competent Authority, Ahmedabad vs. Amritlal Chandmal Jain (1998) 5 SCC 615, which allowed for such challenges if the detention order was not previously adjudicated on merits. However, the Court distinguished these cases, noting that in those instances, the detention orders were challenged during their validity but were later dismissed as infructuous. Since the appellants did not challenge the detention order during its validity, they could not contest it during SAFEMA proceedings.
Conclusion:
The High Court dismissed the Letters Patent Appeal, reinforcing that the detention order dated 11.06.1976 could not be challenged post-revocation as it was not contested during its operative period. The Court imposed exemplary costs of Rs. 25,000 on the appellants for repeatedly delaying proceedings.
-
2012 (12) TMI 1175
Issues involved: Dispute over computation of capital gain from the sale of property.
Summary:
The assessee, a former tenant who became the owner of a property under a government scheme, sold the property and claimed long term capital gain based on holding since 1984. However, the Assessing Officer considered it short term gain as the property was sold within 36 months of ownership acquisition. The dispute centered on the cost of acquisition, with the assessee arguing for the market value of the tenancy right plus payment made, while the authorities upheld the cost at the price paid for ownership. The Tribunal agreed on short term gain computation but disagreed on the cost of acquisition, directing a fresh assessment considering the market value of the tenancy right and the payment made.
The Tribunal upheld the CIT(A)'s decision on treating the gain as short term capital gain due to the property being sold within 36 months of ownership acquisition. However, it disagreed with the cost of acquisition determination, stating that it should be the market value of the tenancy right as of the ownership acquisition date plus the payment made by the assessee, not just the price paid for ownership. The Tribunal emphasized the need for a reassessment by the Assessing Officer to consider these factors properly.
-
2012 (12) TMI 1174
Issues involved: Interpretation of the Kerala Tax on Luxuries Act, 1976 u/s 17A, constitutionality of the Act, applicability of the Act to a society owning an auditorium, imposition of penalty orders.
Interpretation of the Kerala Tax on Luxuries Act, 1976 u/s 17A:
The petitioner, a society owning an auditorium, challenged the imposition of penalty orders u/s 17A of the Act, contending that the Act is inapplicable to them. The Act mandates the levy of luxury tax on any luxury provided in places like auditoriums used for conducting functions, with a rate of charges exceeding Rs. 150 per day. The court held that the petitioner's provision of amenities like electricity and water supply for various functions constitutes a luxury as defined under the Act, attracting the provisions of section 4(1)(i) of the Act.
Constitutionality of the Act:
The petitioner also sought a declaration that the Act is unconstitutional and beyond the legislative competence of the State. However, the court noted that a previous judgment had upheld the constitutionality of the Act, rendering this issue non-res integra.
Applicability of the Act to a society owning an auditorium:
The petitioner argued that the Act does not apply to them as they do not provide accommodation for residence. The court interpreted the Act's provisions, emphasizing that the term "accommodation" is not limited to residence alone but includes any provision meeting a need. As the petitioner rents out their auditorium for various functions and provides amenities, they fall within the definition of luxury under the Act, making them liable for luxury tax.
Imposition of penalty orders:
While dismissing the writ petitions challenging penalty orders, the court granted the petitioner an opportunity to pursue the statutory remedy under section 7 of the Act. The court directed the petitioner to file appeals against the penalty orders within one month, allowing them to present their factual contentions before the appellate authority.
Separate Judgement:
In a separate judgment, W. P. (C) No. 28685 of 2009 was dismissed as the petitioner had already availed of the appellate remedy against the penalty order. In W. P. (C) No. 32917 of 2009, the petitioner was permitted to pursue the appellate remedy against penalty orders, similar to the leading case, within a specified timeframe.
-
2012 (12) TMI 1173
Issues Involved: 1. Whether the High Court can direct the State to grant monetary compensation for the infringement of fundamental rights under Article 21 in its writ jurisdiction under Article 226. 2. Whether the State is liable for the acts done by Home Guards in the course of their duty. I. Question: Jurisdiction to Grant Compensation under Article 226In view of the rival contentions, the prime question to be considered is notwithstanding the right to seek remedy available under the civil law or criminal law to the petitioner as a victim of police torturing, can this Court direct the State to grant monetary compensation to the petitioner for the infringement of fundamental right guaranteed under Article 21 of the Constitution of India, in the writ jurisdiction under Article 226 of the Constitution of India? The court examined the evolution of the law granting the right to sue against the State, tracing its origins from the doctrine of "Crown immunity" to the recognition of the right to compensation for infringement of fundamental rights as seen in cases like Rudul Sah v. State of Bihar, Nilabati Behera v. State of Orissa, and D.K. Basu v. State of West Bengal. It was concluded that the courts have the obligation to satisfy the social aspirations of the citizens and can grant compensation for the infringement of fundamental rights under Article 21. Therefore, in view of the case law set out on this point under Article 141 of the Constitution of India, it is very clear in our mind that notwithstanding the right to remedies under Civil suits or Criminal proceedings, this Court can grant compensation in exercise of jurisdiction under Article 226 of the Constitution of India under public law to the victims who suffered infringement of their right to life and personal liberty guaranteed under the Constitution. II. Question: Liability of the State for Acts of Home GuardsThe next question to be considered is whether the State is liable for the act done by the Home Guards, in the course of their duty while they are employed by the State under the police force? On a conjoint reading of the provisions of the Kerala Home Guards Act, 1960, it was found that the Home Guards have the same powers, privileges, and protection as that of an officer of the police force and are deemed to be public servants. Therefore, the Government is liable for the acts or omissions made by the Home Guards in the course of their employment while employed by the Government. Therefore, we reject the contention raised by the 3rd respondent denying liability of the State for the act done by the Home Guards. AnalysisLet us consider the instant case in the light of the well-settled legal position, which is derived from the Case Law. First of all, we may examine the admitted facts which are disclosed by pleadings of both parties. The incident as such is fairly admitted by all respondents except the cause of injury which resulted in the loss of 5 teeth of the petitioner. According to the petitioner, while he was returning home after 2nd show film, he was intercepted by a police team consisting of respondents 5 to 7, cane charged him brutally and in the said assault, he has lost 5 teeth, whereas according to the respondents, the 7th respondent who was standing 80 meters away from the scene tried to stop the motor vehicle by stretching and waving lathi and that resulted in grievous hurt and losing of 5 teeth. Even in this controversy regarding the manner in which or the act by which the injury was caused, certain facts are obviously admitted and stand indisputable. The admitted and indisputable facts, amount to an infringement of the right to life and personal liberty of the petitioner. Whether it was an act done with mens rea? Whether it was an act caused by negligence? Whether it was an act with the intention of causing death or with the intention of causing such bodily injury as is likely to cause death or with the knowledge that he is likely by such act to cause death? Was there any motive or previous enmity? Which respondent is responsible? Was the act done in furtherance of a common intention? All these are questions which rest on the above disputed facts are to be considered in determining the penal or civil liability of the respondents. We are not considering these disputed issues. These are 'facts in issue' which fall under the domain of criminal court or Civil Court in whose jurisdiction the act was done. We are considering the question of granting compensation by the State for the infringement of fundamental right in view of the admitted and indisputable facts only and leaving all remaining above said controversies to competent courts as the case may be. ConclusionIn the light of the catena of case law quoted and referred above it is very clear in our mind that though there is no express provision in the Constitution of India for grant of compensation by the State for the infringement of right to life and personal liberty guaranteed under Article 21 of the Constitution of India, the Supreme Court has judicially evolved that such victims are entitled to get compensation under public law in addition to remedies under private law. We find that the petitioner is entitled to get compensation from the first respondent/State for the infringement of his right to life and personal liberty at the hands of the respondents 5 to 7. Considering the entire facts and circumstances of the case, we feel that an award of compensation of Rs. 50,000/-, the relief which is prayed for, is just and proper to meet the ends of justice. We direct the first respondent to pay a compensation of Rs. 50,000/- (Rupees fifty thousand only) to the petitioner within one month from the date of the judgment. The writ petition is allowed accordingly.
-
2012 (12) TMI 1172
Issues involved: Appeal against interim order restraining alienation of assets, validity of Corporate Debt Restructuring (CDR) scheme, creditor's right in winding up.
Interim Order Challenge: The appeal challenged an interim order restraining the appellant Company from alienating assets, filed by the respondent for winding up. The appellant Company argued its financial health, participation in CDR process, and approval of restructuring terms by secured creditors. The appellant sought to sign the CDR agreement to avoid adverse consequences.
CDR Scheme Validity: The appellant Company highlighted its participation in the CDR process initiated by RBI, approval of restructuring terms by secured creditors, and the need for additional charge creation for CDR facilities. The appellant emphasized the benefits of the CDR process for all stakeholders, including protection for unsecured creditors like the respondent.
Creditor's Right in Winding Up: The respondent, a bondholder, opposed the CDR process, citing doubts about its viability and concerns about dilution of security. The court considered the urgency, viability of the revival scheme, and the impact on various stakeholders. It noted the support of secured creditors for revival over winding up.
Judgment: The court modified the interim order, allowing the appellant to execute the Master Restructuring Agreement under the CDR process. The court clarified that new encumbrances created under CDR shall not prejudice the respondent's rights, subject to further orders. The parties were directed not to claim equities, and the appeal was disposed of.
-
2012 (12) TMI 1170
Market Price of the suit property - Execution of sale Deed - Decree for Specific Performance - Bar of limitation - The plaintiffs have invoked the provisions of Section 15 (5) of the Limitation Act, 1963 to claim the benefit of the exclusion of the period during which the defendant was absent from India. There can, indeed, be no doubt that if the plaintiff is entitled to exclude the period of such absence the bar of limitation will not apply to the present suit.
Whether Decree for Specific performance should be granted at the belated time of agreement. HELD THAT:- The long efflux of time (over 40 years) that has occurred and the galloping value of real estate in the meantime are the twin inhibiting factors in this regard. The same have to be balanced with the fact that the plaintiffs are in no way responsible for the delay that has occurred and their keen participation in the proceedings till date show the live interest on the part of the plaintiffs to have the agreement enforced in law. Therefore, to direct specific performance of an agreement and that too after elapse of a long period of time, undoubtedly, has to be exercised on sound, reasonable, rational and acceptable principles. The parameters for the exercise of discretion vested by Section 20 of the Specific Relief Act, 1963 cannot be entrapped within any precise expression of language and the contours thereof will always depend on the facts and circumstances of each case. It must be emphasized that efflux of time and escalation of price of property, by itself, cannot be a valid ground to deny the relief of specific performance. After consideration to all relevant aspects of the case for the ends of justice would require this court to intervene and set aside the findings and conclusions recorded by the High Court and to decree the suit of the plaintiffs for specific performance of the agreement. further sale deed that will now have to be executed by the defendants in favor of the plaintiffs will be for the market price of the suit property as on the date of the present order. As no material, whatsoever is available to enable us to make a correct assessment of the market value of the suit property as on date, Apex court request the learned trial judge of the High Court of Delhi to undertake the said exercise with such expedition as may be possible in the prevailing facts and circumstance.
-
2012 (12) TMI 1169
Issues Involved:
1. Article 20(3) of the Constitution of India: Whether it protects an accused from being compelled to give a voice sample during an investigation.
2. Absence of Provision in the Code: Whether a Magistrate can authorize the recording of a voice sample of an accused in the absence of any provision in the Code of Criminal Procedure.
Summary:
Issue 1: Article 20(3) of the Constitution of India
1. Self-Incrimination: The court examined whether compelling an accused to give a voice sample violates Article 20(3) of the Constitution, which protects against self-incrimination.
2. Judicial Precedents: The judgment referred to M.P. Sharma v. Satish Chandra and State of Bombay v. Kathi Kalu Oghad to determine the scope of "testimonial compulsion."
3. Conclusion: The court concluded that taking a voice sample does not violate Article 20(3) as it is akin to taking fingerprints or handwriting samples, which are considered non-testimonial physical evidence. The voice sample does not convey personal knowledge that could incriminate the accused.
Issue 2: Absence of Provision in the Code
1. Legal Provisions: The court examined whether existing legal provisions allow a Magistrate to direct the recording of a voice sample.
2. Arguments:
- Counsel for the Appellant: Argued that there is no provision in the Code or any other law authorizing the police to request a voice sample. The Magistrate lacks inherent powers to issue such a directive.
- Amicus Curiae: Suggested that certain provisions like Section 53, Section 311A, and Section 54A of the Code could be interpreted to include voice samples.
- State Counsel: Argued that the definition of "investigation" in the Code includes all necessary steps for evidence collection, implying that voice samples could be included.
3. Statutory Interpretation:
- Section 53 of the Code: The court discussed whether the term "examination" in Section 53, which includes various physical tests, could be extended to include voice samples.
- Identification of Prisoners Act: The court considered whether the term "measurements" in Section 2(a) of the Act, which includes finger impressions, could be interpreted to include voice samples.
4. Judicial Precedents:
- Telgi Case: The Bombay High Court held that voice samples fall within the ambit of "measurements" under the Identification of Prisoners Act.
- Rakesh Bisht Case: The Delhi High Court disagreed, stating that voice samples could not be compelled under the existing legal framework.
5. Conclusion: The court concluded that the Magistrate's power to authorize voice samples could be derived from Section 5 of the Identification of Prisoners Act and Section 53 of the Code. The court emphasized the need for legislative amendments to provide clear legal provisions for such investigative measures.
Separate Judgment by Aftab Alam, J.
1. Dissenting Opinion: Justice Aftab Alam disagreed with the majority opinion, emphasizing that the law must come from the legislature and not through judicial interpretation.
2. Legislative Intent: He highlighted that the legislature, despite amendments in 2005, did not include voice samples in the relevant provisions, indicating a possible legislative intent.
3. Conclusion: Justice Alam would have allowed the appeal, setting aside the Magistrate's order, and suggested that the issue be addressed by the legislature.
Final Decision:
The appeal was dismissed, but due to the difference of opinion, the case was referred to a larger bench for further consideration.
-
2012 (12) TMI 1168
Issues Involved:
1. Addition of Rs. 1,26,64,682/- by rejecting the trading account.
2. Invoking the provisions of section 145(3) of the Act.
3. Non-appreciation of vouched purchases and sales.
4. Alleged suppression of income.
5. Denial of reasonable opportunity of being heard.
6. Addition based on conjectures and surmises.
Summary:
1. Addition of Rs. 1,26,64,682/- by rejecting the trading account:
The AO made an addition of Rs. 1,26,64,682/- by rejecting the trading account, alleging that the purchases made from 26.03.2008 to 31.03.2008 were not reflected in the closing stock or work in progress. The CIT(A) confirmed the addition, stating that the purchases were debited but not shown in the closing stock or work in progress, making it a clear case of suppressed income. The Tribunal found that the assessee had submitted certificates from suppliers proving that goods were received earlier and bills were received later, which was not appreciated by the authorities. The Tribunal directed the deletion of the addition.
2. Invoking the provisions of section 145(3) of the Act:
The AO invoked section 145(3) of the Act, pointing out irregularities in the accounts and proposing a net profit rate of 8% on gross contract receipts. The Tribunal noted that while there were deficiencies in the books of account, the AO did not ultimately apply the NP rate. The Tribunal directed the application of a 5% NP rate on the net contract receipts, based on comparable cases, and deleted the specific addition of Rs. 1,26,64,682/-.
3. Non-appreciation of vouched purchases and sales:
The assessee argued that all purchases and sales were vouched and accounted for in the books. The Tribunal found that the authorities did not appreciate the evidence submitted by the assessee, including certificates from suppliers, and directed the deletion of the addition.
4. Alleged suppression of income:
The AO alleged suppression of income due to non-reflection of purchases in the closing stock or work in progress. The Tribunal found that the assessee had provided a reasonable explanation and evidence, which was not properly considered by the authorities, and directed the deletion of the addition.
5. Denial of reasonable opportunity of being heard:
The assessee contended that the addition was made without affording a reasonable opportunity of being heard and based on material collected at the back of the assessee. The Tribunal agreed, citing the decision of the Hon'ble Supreme Court in Kishinchand Chelaram, and directed the deletion of the addition.
6. Addition based on conjectures and surmises:
The assessee argued that the addition was made purely on conjectures and surmises. The Tribunal found that the authorities did not provide cogent reasons for rejecting the assessee's explanation and evidence, and directed the deletion of the addition.
Conclusion:
The Tribunal partly allowed the appeal, directing the deletion of the addition of Rs. 1,26,64,682/- and applying a 5% NP rate on the net contract receipts. The order of the CIT(A) was reversed, and the AO was directed to delete the specific addition. The appeal was partly allowed.
-
2012 (12) TMI 1167
Issues Involved:1. Deletion of addition of Rs. 38.4 lakhs made on account of introduction of share capital u/s 68 of the Income-tax Act, 1961. Summary:Issue 1: Deletion of addition of Rs. 38.4 lakhs made on account of introduction of share capital u/s 68 of the Income-tax Act, 1961.The Department's grievance is the deletion of the addition of Rs. 38.4 lakhs made on account of introduction of share capital u/s 68 of the Income-tax Act, 1961. The assessee, a public limited company, received share capital of Rs. 38.4 lakhs. The Assessing Officer (AO) initially passed the assessment order on 31.12.2008 u/s 143(3) r.w.s. 254 of the Act, treating the amount as unexplained credit. The CIT(A) set aside the AO's order and remitted the issue back to the AO for fresh consideration. The AO again treated the amount as unexplained credit in the subsequent order passed on 28.3.2002. The CIT(A) partly allowed the appeal, accepting Rs. 17,00,000/- as explained but not the balance of Rs. 21,40,000/-. The ITAT, Hyderabad, set aside the appeal to the AO for fresh consideration, who again determined the total income at Rs. 38,40,000/-. On further appeal, the CIT(A) allowed the assessee's appeal, leading to the Revenue's appeal before the Tribunal. The learned DR argued that the investors were petty agriculturists with limited income, making it improbable for them to invest such a large amount. The DR contended that the assessee failed to produce substantial evidence supporting the agricultural holdings and that the investors lacked the capacity to invest. Conversely, the learned AR argued that the company was in its inception stage and had not commenced business, relying on the Supreme Court's judgment in CIT v. Bharat Engineering & Construction Co. (83 ITR 187), which held that unexplained cash credit entries in the first year of business could not be considered income. The AR submitted that the assessee provided all necessary information, including share applications, affidavits, and details of holdings, which the CIT(A) considered before deleting the addition. The Tribunal, after hearing both parties, concluded that the CIT(A)'s reliance on the Bharat Engineering & Construction Co. case was misplaced, as it pertained to the Indian Income-tax Act, 1922. The Tribunal emphasized that u/s 68 of the Income-tax Act, 1961, even if an amount is credited on the first day of the accounting year, it could be assessed as income if the explanation is not accepted by the AO. The Tribunal referred to the case of VBC Fertilisers Pvt. Ltd. v. DCIT, where it was held that the burden of proving the existence of shareholders lies with the assessee. The Tribunal also cited the Delhi High Court's judgment in CIT v. Lovely Exports Pvt. Ltd. (299 ITR 268), which highlighted the necessity for the AO to investigate the creditworthiness of share applicants. In the present case, the Tribunal noted that the AO had issued summons, which returned unserved, and the assessee failed to produce the shareholders. The Tribunal concluded that the assessee did not establish the genuineness and creditworthiness of the transactions, and thus, the deletion of the addition by the CIT(A) was not justified. The Tribunal reversed the CIT(A)'s order and restored the AO's order, sustaining the addition of Rs. 38.4 lakhs. In the result, the appeal of the Revenue was allowed. Order pronounced in the open court on 20th December, 2012.
-
2012 (12) TMI 1166
Comparable selection - Determination of the arm's length price - export incentives received for sales of export of finished goods - reduction of export incentive from goods sold - TPO held that export incentive cannot be deducted from cost of goods sold - Assessee during the relevant previous year, inter-alia, entered into international transactions of export of finished goods to its associated enterprises, comprising of export of manufactured products and export of traded products. The assessee has purchased finished goods, viz., certain varieties of tyres from Good Year South Asia Tyres Pvt. Ltd. (GSATL) for export to the associated enterprises (AEs) - appellant follows a similar economic model for pricing its exports, be it exports of manufactured goods or traded goods.
HELD THAT:- We find that the reasoning adopted by the TPO has considerable cogency. The export benefits are given to the taxpayers to promote and stimulate the growth of exports of goods and services in India. They are also meant to earn valuable foreign exchange for the country. The export incentive was available to the assessee only after trading exports made by the assessee. Global Transfer Pricing policy of the group company mentions cost in inter company transfer before the goods and services are dispatched from the premises of a company to the other company. In the Global Transfer Pricing Policy the future value of benefits which may be available in a few countries cannot be included as this will disturb the very basis/purpose or providing uniform return to teach and every enterprise which is a member of global transfer pricing policy. The very purpose of global transfer pricing is to provide a minimum amount of return to the members of global transfer pricing policy.
The assessee who is involved in controlled transaction this approach actually results in transferring, benefit from Government granted incentives to AE. Moreover, the entities transfer pricing policy cannot override the basic fundamental of transfer pricing analysis. If assessee’s method of calculation of cost of goods sold is followed, it would tantamount to a claim of benefit, which has not yet accrued at the time of sale of goods, being treated as a component of cost of goods sold.
TPO has rightly observed that export incentives does not form part of the invoice price of goods sold. In such a case, it cannot be reduced from the cost of goods sold. We agree with the TPO that an expenditure that does not form part of the books of accounts cannot be treated as an expense for the purpose of transfer pricing accounting.
Hence, we are of the opinion that TPO has rightly held that export incentive cannot be deducted from cost of goods sold.
Deduction of rebate /discount - We find that as per the agreement assessee is entitled for rebate of 3% on cost of goods purchased for exports to AE as well as to unrelated parties. We find that the above reasoning adopted by the AO in disallowing the deduction is not cogent. That the assessee has not made any such claim initially cannot act as estoppel against the proper and valid claim. We agree with the ld. Counsel of the assessee company that the rebate received is inextricably linked with the cost of purchase. We further note that in subsequent assessment years for AY 2007-08 and 2008-09 the TPO has accepted the contention of the assessee that the rebate received upon purchase of goods is deductible from the value of cost of goods sold. Hence, in our considered opinion, assessee is entitled for deduction of rebate received upon purchase of goods from the value of goods sold.
We further find that the rebate amount was netted off and net amount of purchase cost shown in the profit and loss account. In this regard, TPO has contended that the said amount was not reflected in the books and accounts of the assessee. In our considered opinion, this factual aspect needs verification. Hence, we remit this issue regarding verification of netting off of rebate from cost of purchase to the file of AO. Needless to add that the assessee should be given adequate opportunity of being heard.
Disallowance on machinery repair and maintenance - HELD THAT:- We find that on this issue AO has made an adhoc disallowance of 20% of the expenditure incurred on machinery repair and maintenance on the premise that the same is capital expenditure. AO has not identified as to which items in his opinion are in capital expenditure. In this regard, we also note that such adhoc disallowance were also made by the AO in the preceding years in the case of the assessee. But the Delhi Tribunal in assessee’s own case for AY 2003-04 and 2004-05 upheld the order of the Ld. CIT (A) deleting the similar disallowance of expenditure out of repair and maintenance expenses for plant and machinery.
We also note that Revenue has not filed any appeal before the High Court of Delhi against the aforesaid order passed by the Tribunal. Hence, we set aside the order of the AO and decide the issue in favour of the assessee.
Claim towards provision for warranty - AO disallowed provision for warranty by holding that the said liability was an uncertain contingent liability - HELD THAT:- We agree with the assessee’s contention that provision for estimated expenditure to be incurred for warranty obligation in respect of sales made in the relevant previous years is to be accounted as expenditure in the year of sale, in order to match the cost with revenue. The provision for warranty is necessarily required to be made by the companies which are required to follow mercantile system of accounting. In this regard, we further find that Courts have consistently held the view that liability for provision for warranty for replacement on account of manufacturing defects arises at the time of sale and is to be allowed as deduction in that year on the basis of rational /scientific estimate, notwithstanding that the exact amount of liability is ascertained at a later date.
Hence, we hold that provision for warranty made by the assessee is allowable. Hence, we set aside the order AO on this issue.
Claim on excise duty - disallowed in AY 2005-06 - During the present year out of the AY 2005-06 excise duty has been paid during this year. Hence, it has been claimed that the same should be allowed in terms of section 43B of the I.T. Act - AO held that for want of proper break-up and other details a sum was paid as excise duty, after the due date, is again disallowed, as per the provisions of section 43B.
HELD THAT:- We agree with the assessee’s counsel contention that AO has not properly dealt with this claim of the assessee. Assessee’s claim is that in terms of section 43B the excise duty on closing stock disallowed in the preceding previous year and paid during the relevant previous year should be allowed as deduction. The claim needs factual verification, hence, we remit this issue to the file of the AO.
In the result, the appeal filed by the Assessee is partly allowed.
-
2012 (12) TMI 1165
Issues Involved:
1. Assessment of Income
2. Unexplained Cash Credit u/s 68
3. Validity of Assessment u/s 143(3)
4. Admission of Additional Evidence
Summary:
1. Assessment of Income:
The assessee contested the assessment of income at Rs. 3,34,64,070/- against the returned income of Rs. 12,51,010/-. The Tribunal found that the assessee provided a comprehensive explanation for the cash deposits, including the cash flow statement and bank accounts, which were not rebutted by the AO. The Tribunal concluded that the assessee successfully demonstrated the source of cash deposits, and therefore, the assessment was not justified.
2. Unexplained Cash Credit u/s 68:
The AO added Rs. 3,22,63,100/- as unexplained cash credit u/s 68, which included a cash advance of Rs. 15,11,000/- from Mr. Vinod Saraf. The Tribunal admitted additional evidence related to this transaction and remanded it to the AO for further examination. The Tribunal held that the assessee provided sufficient evidence to explain the cash deposits, including cash flow statements and bank transactions, and the AO failed to prove that the cash was used elsewhere. The Tribunal relied on various case laws to support the assessee's explanation and concluded that the addition u/s 68 was not sustainable.
3. Validity of Assessment u/s 143(3):
The assessee argued that the assessment u/s 143(3) was made without considering the facts and evidence. The Tribunal noted that the AO did not reject the books of account and failed to establish that the cash withdrawals were used for unaccounted purposes. The Tribunal found that the explanation provided by the assessee was plausible and the AO's reliance on surmises was not justified. The Tribunal held that the assessment was not valid as the AO did not properly consider the evidence provided by the assessee.
4. Admission of Additional Evidence:
The assessee filed additional evidence under Rule 29 of the Income Tax Rules, 1962, which included a confirmation from Mr. Vinod Saraf. The Tribunal admitted the additional evidence, considering its importance in establishing the source of cash deposits. The Tribunal remanded the additional evidence to the AO for examination, emphasizing the principles of natural justice. The Tribunal concluded that the additional evidence was crucial for deciding the issue of cash deposits and should be considered by the AO.
Decision:
The Tribunal allowed the appeal partly, directing the AO to reconsider the additional evidence and re-examine the cash deposits in light of the provided explanations and evidence. The Tribunal emphasized the need for the AO to establish any discrepancies or alternative uses of the withdrawn cash before making additions u/s 68.
-
2012 (12) TMI 1164
Issues involved: Application for scheme of amalgamation u/s Companies (Court) Rules, 1959; Appointment of Chairman and Alternate Chairman for equity shareholders meeting; Fixation of remuneration for Chairman and Alternate Chairman.
Scheme of Amalgamation: The application is moved by the transferee company seeking a scheme of amalgamation with two other companies situated in Mumbai. No creditors of the company are reported, hence no meetings are required to be held by the creditors. However, a meeting of the equity shareholders is necessary and will be conducted in accordance with the Companies (Court) Rules, 1959.
Appointment of Chairman and Alternate Chairman: Counsel for the applicant company has obtained consent from individuals to act as Chairman and Alternate Chairman for the equity shareholders meeting. The Court appoints the said individuals for the meeting, with the date, time, and venue to be published in two newspapers. The Chairman's remuneration is fixed at Rs. 60,000/- and that of the Alternate Chairman at Rs. 40,000/-. The company will bear their travel and stay expenses, and the Chairman is required to submit a report within ten days from the meeting.
Next Steps: The matter is listed to be heard before the Court on 15.2.2013 for further proceedings.
-
2012 (12) TMI 1163
Issues Involved:
1. Issuance of witness summons for defence witnesses.
2. Production of Call Data Records (CDRs) by the prosecution.
3. Rejection of the application for issuance of a search warrant to retrieve CDRs.
4. Examination of Nodal Officers and the retrieval of CDRs from telecom companies.
Summary:
1. Issuance of Witness Summons for Defence Witnesses:
The appellants, accused in the MCOC Special Case No. 21 of 2006, made an application (Exhibit 2891) for witness summons to 79 persons, including Nodal Officers of telecom companies, to examine them as defence witnesses. Despite objections from the prosecution, summonses were issued to some witnesses. However, the trial court later declined to issue summonses to certain witnesses (Sr. Nos. 63 to 66), leading to an appeal which was already decided.
2. Production of Call Data Records (CDRs) by the Prosecution:
During the investigation, the prosecution had claimed to have obtained CDRs of the accused's cell phones. The appellants repeatedly requested these CDRs, arguing that they would establish their innocence. The trial court, however, did not order the prosecution to produce the CDRs, citing that they were not relied upon by the prosecution.
3. Rejection of Application for Issuance of a Search Warrant:
When the stage for defence evidence arrived, the appellants renewed their request for CDRs. The prosecution objected, and the trial court summoned Mr. Rakesh Maria, Head of ATS, who expressed his inability to produce the CDRs. The appellants then filed an application (Exhibit 2919) for a search warrant to retrieve the CDRs, which was rejected by the trial court. This led to Criminal Appeal No. 973 of 2012, where the appellants sought to quash the rejection order and direct the production of original CDRs.
4. Examination of Nodal Officers and Retrieval of CDRs:
The appellants also cited Nodal Officers from telecom companies as defence witnesses. Some officers appeared but claimed the relevant CDRs were not available as data is stored only for one year. The trial court refused to compel the officers to file affidavits supporting their claims. Aggrieved, the appellants filed Criminal Appeal No. 992 of 2012, seeking directions for the Nodal Officers to retrieve and produce the CDRs.
Judgment:
The High Court allowed the appeals partly, setting aside the impugned orders. The trial court was directed to:
1. Permit the defence to examine the Nodal Officers and/or Information Technology Officers of the telecom companies.
2. Consider whether the required data can be retrieved with the help of experts and allow such evidence if relevant and admissible.
3. Summon PI Sunil Wadke and Investigating Officer Sadashiv Patil to examine them regarding their affidavits.
4. Reconsider the issuance of a search warrant based on the new evidence.
The trial court was instructed to proceed expeditiously, ensuring the appellants receive a fair trial.
-
2012 (12) TMI 1162
Issues Involved:
1. Disallowance of depreciation on intangible asset.
2. Alternative plea for allowing capital expenditure as revenue expenditure.
3. Deletion of addition due to non-deduction of TDS on Bloomberg Data Services charges.
4. Applicability of section 2(22)(e) regarding deemed dividend.
Summary:
Issue 1: Disallowance of Depreciation on Intangible Asset
The assessee challenged the disallowance of depreciation on an intangible asset amounting to Rs. 62,50,000/-. The Assessing Officer (AO) observed that the assessee, a share broker, purchased the entire clientele business of M/s. Ashmavir Financial Consultants Pvt. Ltd. (M/s. AFC) for Rs. 2.50 crores, booked as goodwill, and claimed 25% depreciation. The AO disallowed the claim, stating that goodwill does not find reference in section 32 of the Act and that the clientele business does not qualify as a depreciable intangible asset. The CIT(A) upheld the AO's decision, stating the payment was for the clientele business, not goodwill. The Tribunal, however, concluded that the right over 3709 clients constitutes a commercial right eligible for depreciation u/s 32(1)(ii), allowing the depreciation claim of Rs. 62,50,000/-.
Issue 2: Alternative Plea for Allowing Capital Expenditure as Revenue Expenditure
The assessee's alternative plea was that if depreciation is not allowed, the expenditure should be treated as revenue expenditure. Since the Tribunal allowed the depreciation claim, this ground was dismissed as otiose.
Issue 3: Deletion of Addition Due to Non-Deduction of TDS on Bloomberg Data Services Charges
The Revenue contested the deletion of an addition of Rs. 4,74,109/- made by the AO for non-deduction of TDS on Bloomberg Data Services charges. The CIT(A) held that the payment was for a subscription to a financial e-magazine, not liable for TDS. The Tribunal upheld the CIT(A)'s decision, confirming that the payment was a subscription fee and not subject to TDS.
Issue 4: Applicability of Section 2(22)(e) Regarding Deemed Dividend
The Revenue challenged the deletion of an addition of Rs. 1.40 crores treated as deemed dividend u/s 2(22)(e). The CIT(A) noted that similar additions were deleted in the previous year as the loan was in the ordinary course of business where lending was substantial. The Tribunal upheld the CIT(A)'s decision, referencing its earlier ruling that deemed dividend u/s 2(22)(e) applies only to shareholders, and the assessee-company was not a shareholder of NFSPL.
Conclusion:
The assessee's appeal was partly allowed, granting depreciation on the intangible asset, while the Revenue's appeal was dismissed.
-
2012 (12) TMI 1161
Issues Involved:
1. Validity of assessments made u/s 143(3) read with section 148.
2. Accrual of income in the absence of RBI approval.
3. Taxability of fees for technical services under relevant tax treaties.
Summary:
1. Validity of Assessments Made u/s 143(3) Read with Section 148:
The preliminary issue challenging the validity of assessments made by the AO u/s 143(3) read with section 148 was raised in ground Nos. 1 to 4. However, these grounds were not pressed by the learned counsel for the assessee at the time of hearing before the Tribunal and were accordingly dismissed as not pressed.
2. Accrual of Income in the Absence of RBI Approval:
In ground No. 5, the addition made on account of fees for technical services was challenged on the basis that there being no approval received from RBI under the Excise Control Regulation Act to pay the impugned amount by BAH India to the overseas group entities, the said amounts did not partake the character of income and there was thus no accrual of income in the year under consideration. The Tribunal observed that the amounts payable by BAH India to the overseas group entities in Germany, Indonesia, and Panama (SE Asia) were debited by BAH India to the profit & loss account and were also claimed as expenses, but no RBI approval was obtained for remitting the said amounts in foreign exchange as required by relevant provisions of Foreign Exchange Regulation Act during the year under consideration. The Tribunal held that income on account of the amounts payable by BAH India to the overseas group entities could be said to have accrued to the said entities only on receipt of the required approval from RBI and there being no such approval received during the year under consideration, the same could not be taxed as income in that year. The Tribunal deleted the additions made on this count by the AO and confirmed by the learned CIT(Appeals) in the case of the said three entities.
3. Taxability of Fees for Technical Services Under Relevant Tax Treaties:
In ground No. 7, the assessee disputed the additions made by the AO and confirmed by the learned CIT(Appeals) on account of the amounts payable by BAH India on the ground that the same are not liable to tax in India under the relevant tax treaties which cover only the amounts paid. The Tribunal observed that the amounts in question payable by BAH India to the three overseas group entities in Germany, Singapore, and U.K. were not paid during the year under consideration. The Tribunal held that royalties and fees for technical services should be reckoned for taxation only when it is actually received by the assessee and not otherwise, as per the relevant provisions of the Double Taxation Avoidance Treaty between India and the three concerned States. The Tribunal allowed ground No. 7 of ITA No. 4502, 4506, and 4508/Mum/2003.
Conclusion:
The appeals being ITA Nos. 4502, 4503, 4504, 4506, and 4508/Mum/2003 were partly allowed, and ITA No. 4507/Mum/2003 was dismissed. The order was pronounced on the 21st day of Dec., 2012.
-
2012 (12) TMI 1160
Issues involved: Revenue's appeal against deletion of addition u/s. 2(22)(e) of the Income-tax Act, 1961 for assessment year 2006-07.
Summary:
Issue 1: Addition u/s. 2(22)(e) of the Act
The revenue contended that the CIT(Appeals) erred in deleting the addition of Q 25 lakhs made by the Assessing Officer u/s. 2(22)(e) of the Act, alleging circumvention of provisions. The assessee, a director of a company, received an advance of Q 50 lakhs, triggering the application of section 2(22)(e). The Assessing Officer reopened the case, noting the substantial interest held by the assessee in the company. The dispute arose from the transaction involving the purchase of land and the advance received.
Details:
- The company debited Q 50 lakhs to the assessee's account.
- The assessee held over 10% shares in the company.
- Accumulated reserves of the company were Q 12,47,07,765.
- The assessee acquired land for Q 40 lakhs and entered into an agreement to sell it for Q 1.5 crores.
- The delay in transferring the land was due to disputes and conversion issues.
- The Assessing Officer treated Q 25 lakhs as deemed dividend u/s. 2(22)(e) and added it to the income.
Issue 2: CIT(Appeals) Decision
The CIT(Appeals) allowed the appeal, considering the transaction as a property purchase and accepting explanations for the delay in land transfer. The revenue challenged this decision, leading to the appeal before the ITAT Bangalore.
Details:
- The revenue relied on the Assessing Officer's order, while the assessee cited the CIT(Appeals) decision and a Tribunal case.
- The ITAT found the agreement genuine for land purchase and not a loan or advance to avoid dividend distribution.
- The increase in land price was justified due to conversion requirements and legal disputes.
- Referring to a similar case, the ITAT upheld the CIT(Appeals) decision, dismissing the revenue's appeal.
Conclusion:
The ITAT upheld the CIT(Appeals) decision, emphasizing the genuine nature of the land transaction and rejecting the revenue's appeal. The judgment was pronounced on December 26, 2012.
-
2012 (12) TMI 1159
Issues involved: Appeals by the assessee for assessment years 2002-03 to 2008-09 and cross appeal by the Revenue for assessment year 2003-04 regarding taxing of lease rent as income and depreciation treatment.
Assessment Year 2003-04 Delay Condoned:
The Revenue's appeal for assessment year 2003-04 was delayed by four days, which was condoned by the Tribunal due to a reasonable cause shown by the Revenue in its affidavit.
Assessee's Contention on Lease Rent Taxation:
The sole issue raised by the assessee was the taxing of lease rent, including the principal portion, as income, while claiming entitlement to depreciation based on Accounting Standard 19. The Revenue, in its cross appeal, contested the deduction of amounts received on pre-closed leased contracts before computing depreciation.
Assessing Officer's Findings and Reopening of Assessments:
The Assessing Officer noted that only a portion of lease rent was offered as income, and the assessee had not claimed depreciation in its accounts but was claiming it for tax purposes. Assessments for various years were reopened to tax the principal portion of lease rental as income.
Arguments Before the Tribunal:
The assessee argued that the treatment of financial leases differed from operational leases and questioned the verification of lease agreements. The Revenue contended that the assessee had not shown full lease rentals as income and could not now dispute the inclusion of such amounts in the assessments.
Tribunal's Decision:
The Tribunal observed that the assessee had voluntarily declared the principal portion of lease rentals as income in revised returns for certain years, precluding the argument against its inclusion. It emphasized that if depreciation was claimed, the full lease rentals had to be shown as income, regardless of the Accounting Standard followed. The Tribunal upheld the Assessing Officer's treatment and dismissed all appeals.
Conclusion:
The Tribunal found no merit in the appeals by both the assessee and the Revenue, leading to the dismissal of all appeals. The decision was pronounced on December 20, 2012, in Chennai.
-
2012 (12) TMI 1158
Issues Involved:
1. Validity of the order passed by CIT beyond the prescribed time limit.
2. Deemed registration date of the charitable trust.
Summary:
Issue 1: Validity of the order passed by CIT beyond the prescribed time limit
The appellant, a charitable trust, filed an application for registration u/s 12A(a) of the IT Act on 30th March 2006. The CIT, Bikaner, granted registration w.e.f. 1st April 2005, but the appellant contended that the order was not as per law as it was passed beyond the six-month period prescribed u/s 12AA(2) of the Act. The Tribunal noted that the CIT indeed passed the order beyond the permitted time, which makes the order invalid in the eyes of law. The Tribunal relied on the decision of the Hon'ble Special Bench of Tribunal, Delhi in the case of Bhagwad Swarup Shri Shri Devraha Baba Memorial Shri Hari Parmarth Dham Trust v. CIT [2007] 17 SOT 281 (Delhi) (SB), which held that if the order is not passed within six months, the application is deemed to have been allowed.
Issue 2: Deemed registration date of the charitable trust
The appellant argued that the registration should be deemed to have been granted from the date of its inception, i.e., 9th Nov 1985, as the CIT did not consider the condonation petition and passed the order without giving reasons for rejection. The Tribunal found that the CIT's order, which granted registration w.e.f. 1st April 2005, was incorrect and illegal under the deeming provision. The Tribunal directed the CIT to grant registration to the appellant w.e.f. 9th Nov 1985, as it is deemed to have been granted from the date of its inception.
Condonation of Delay:
The appeal filed before the Tribunal was time-barred by 1660 days. However, the Tribunal condoned the delay, considering the reasons provided by the appellant, including ignorance of law and wrong advice from the tax consultant. The Tribunal cited the Hon'ble Supreme Court's decisions in Collector, Land Acquisition v. Mst Katiji [1987] 167 ITR 471 (SC) and Vedabai alias Vijayanatabai Baburao Patil v. Shantaram Baburao Patil [2002] 253 ITR 798/122 Taxman 114 (SC), which emphasized a liberal approach in condoning delays to advance substantial justice.
Conclusion:
The Tribunal allowed both appeals, directing the CIT to grant registration to the appellant w.e.f. 9th Nov 1985, and deemed the registration application as allowed due to the delay in passing the order by the CIT. The order was pronounced in the open court on 19.12.2012.
-
2012 (12) TMI 1157
Issues Involved: Appeal against penalty u/s 271CA for failure to collect TCS u/s 206C(IC) of the Income-tax Act, 1961.
Summary:
The appellant had given Parking Lots on lease in Chandigarh during the Financial Year 2007-08, with lessees responsible for tax payment on their income. Appellant believed no obligation for tax deduction at source until noticing TCS provisions, then collected and deposited tax with interest. The appeal contested the penalty of Rs. 6,71,424 levied by the CIT(A) for failure to collect TCS. The appellant argued bonafide belief due to lessees' tax responsibility and subsequent compliance. The appellant's case was considered u/s 273B, allowing non-levy of penalty for reasonable cause. The appellant's evidence of payment supported the claim. The Tribunal found in favor of the appellant, setting aside the penalty imposed by the CIT(A). The appeal was allowed, and the order pronounced on 13th Dec., 2012.
-
2012 (12) TMI 1156
Issues involved: Appeal by Revenue against CIT (A) order for assessment year 2006-07 regarding deletion of addition u/s. 40A (2)(b) of the Act.
Facts: Assessee firm in business of manufacturing filed return declaring loss. Assessment framed u/s. 143(3) adding income. CIT (A) allowed appeal. Revenue appealed against deletion of addition of &8377; 13,75,120/-.
Revenue's Ground: CIT (A) erred in deleting addition as assessee failed to prove reasonableness of payment u/s. 40A (2)(b).
Assessment Proceedings: AO observed payments made to sister concerns, asked for reasonableness. Disallowed 5% of payments, added to income. CIT (A) deleted addition based on submissions and evidence provided by assessee.
Arguments: Revenue argued on failure to prove reasonableness of payments. Assessee argued Sec. 40A(2)(b) not applicable, provided profit sharing ratio and decisions supporting their case.
Judgment: Tribunal found AO did not compare payments with market rates, made adhoc disallowance. Citing precedent, Tribunal held no case for disallowance u/s. 40A(2)(b) was made out. Revenue's appeal dismissed.
Conclusion: Tribunal upheld CIT (A) order, dismissing Revenue's appeal.
........
|
9911796707
Advanced Search 
