|
Advanced Search Options
Case Laws
Showing 81 to 100 of 699 Records
-
2008 (5) TMI 682
The Supreme Court of India dismissed the special leave petitions as they found no merit in the case.
-
2008 (5) TMI 681
Issues Involved:
1. Allocation of corporate expenses to s. 10A units.
2. Exclusion of various incomes from export turnover for s. 10A deduction.
3. Exclusion of certain incomes for s. 80HHC deduction.
4. Eligibility of deduction under s. 10A for deemed exports.
5. Allowability of deduction under s. 80-IB on AMC receipts and sale of monitors.
6. Treatment of foreign taxes in export turnover.
7. Allowability of long-term capital loss on sale of shares.
8. Charging of interest under s. 234B and s. 234D.
Summary:
1. Allocation of Corporate Expenses to s. 10A Units:
The Tribunal upheld the CIT(A)'s decision to vacate the allocation of corporate expenses made by the AO to s. 10A units, following the Tribunal's earlier decision. The AO's detailed analysis of expenses and application of s. 14A was not accepted as there was no prescribed method for determining such expenses during the relevant assessment year.
2. Exclusion of Various Incomes from Export Turnover for s. 10A Deduction:
The Tribunal confirmed that export incentives, rent, interest, and exchange fluctuation should not be excluded from the receipts while computing deduction under s. 10A, following earlier Tribunal decisions. The Tribunal also held that the foreign exchange gain due to fluctuation is part of the profit of the undertaking eligible for deduction under s. 10A.
3. Exclusion of Certain Incomes for s. 80HHC Deduction:
The Tribunal upheld the CIT(A)'s direction to exclude excise duty and sales-tax from the total turnover for computing deduction under s. 80HHC, following the Supreme Court's decision in CIT vs. Lakshmi Machine Works. The Tribunal also confirmed that 90% of difference in exchange, royalty, provision for doubtful debts written back, scrap sales, and sundry creditors/other credit balances written back should not be excluded from the profits of the business.
4. Eligibility of Deduction under s. 10A for Deemed Exports:
The Tribunal confirmed that deemed exports cannot be treated as part of export turnover for computing deduction under s. 10A, following its earlier decision in Tata Elxsi Ltd. vs. Asstt. CIT.
5. Allowability of Deduction under s. 80-IB on AMC Receipts and Sale of Monitors:
The Tribunal upheld the CIT(A)'s decision that AMC income and profit from the sale of monitors are not derived from the industrial undertaking and hence not eligible for deduction under s. 80-IB.
6. Treatment of Foreign Taxes in Export Turnover:
The Tribunal held that foreign taxes should not be included in the export turnover as they are not part of the consideration received in convertible foreign exchange. If the turnover includes foreign taxes, then the expenditure will be allowed as a deduction for computing profit.
7. Allowability of Long-term Capital Loss on Sale of Shares:
The Tribunal allowed the claim for long-term and short-term capital loss on the sale of shares of WFL, following its earlier decision for the previous assessment year.
8. Charging of Interest under s. 234B and s. 234D:
The Tribunal held that interest under s. 234B is mandatory and consequential. Interest under s. 234D is chargeable when the regular assessment is made on or after 1st June 2003, irrespective of the assessment year, following its decision in Sigma Aldrich Foreign Holding Co. vs. Asstt. CIT.
-
2008 (5) TMI 680
Doctrine of promissory estoppel - Interpretation and/or application of the provisions of the Andhra Pradesh Electricity Reforms Act, 1998 vis-a-vis the orders passed by the Andhra Pradesh Electricity Regulatory Commission - generation, supply and distribution of electrical energy in the State of Andhra Pradesh used to be governed by the provisions of the Electricity (Supply) Act, 1948 - HELD THAT:- Indisputably, pursuant to or in furtherance of the said policy decision, 31 companies in the private sector showed their interest for setting up MPPs. The Government of Andhra Pradesh, upon taking into consideration the said applications allowed the respondents herein to set up MPPs capacity in private sector with residual fuel in industrial load centres in the State, whereafter, approval for the same had been granted - at this stage notice the fact of the matter involved in the respective appeals including the proceeding before the Commission.
The Commission for all intent and purport took a policy decision that the electricity generated by the company would be transferred to APTRANSCO. Whereas most of the respondents could not start production, LVS Power did. We will state the facts of the same at some details at an appropriate place but suffice it to point that pursuant to the interim decision taken by the Commission, LVS Power cancelled the agreements it had entered into with the consumers. Negotiations were held for fixing the rate of the tariff. It did not succeed.
When an application for grant of exemption is filed, the same is required to be dealt with independently. What was necessary for the said purpose was interest of the consumers as well as the consideration that supply and distribution cannot be maintained unless the charges for electricity supply are adequately levied and duly collected - The Commission, therefore, was bound to strike a balance. It should have given due consideration as to how and in what manner the MPPs were established. They were not per se inconsistent with the object sought to be achieved by the 1998 Act.
It is strange that while Commission was so conscious of is own power as envisaged under Clause (e) of Sub-section (1) of Section 11 of the Act in prohibiting third party sale so far as MPPs are concerned, it even could not take its own order to its logical conclusion. It is with some displeasure that we must notice as to how Commission mis- directed itself at every stage. Despite the State supported the application for grant of exemption, the third party sale was prohibited - The Commission itself is responsible for the said situation. If it has the power to regulate, as it has been contending, it should have proceeded progressively and not regressively. It could have taken into consideration the provisions of Section 11 (1)(f) whereby one of its function is to promote competitiveness and progressively involve the participation of private sector, while ensuring fair deal to the customers.
The Commission had been waiting for some directions of the Government of Andhra Pradesh. It is from that angle it must be held that the decision of the State to allow MPPs. to generate electricity was a matter of policy. The Commission for all intent and purport has frustrated the policy and object of the Act. APTRANSCO in terms of Chapter V of the Act also acts as a statutory authority. The Commission must function within the fourcorners of the 1998 Act. It is again subject to the power of the State Government under Section 12. It has referred the matter again and again to the State and when the State asked it to proceed in the manner, it backed out and APTRANSCO was constituted with the principal object of engaging the business of promoting and supply of electrical energy.
The licence under Section 14 is necessary but the same is only for transmission and supply and not for generation of electrical energy. Such a licence is required so as to enable the Commissioner to effectively control and regulate transmission and supply. It is also relevant to note that Section 21 provides for restriction on licensees and generating companies. Sub-section (4) empowers a holder of supply or transmission licence to enter into arrangements for the purchase of electricity. Sub-section (5) provides that any agreement relating to any transaction of the nature described in any of the sub-sections unless made with or subject to such consent as aforesaid, shall be void. It, therefore, restricts the power and activities of APTRANSCO.
It is in the aforementioned situation that the doctrine of promissory estoppel should be held to be applicable.
In this case interest of justice would be subserved if in modification of the order passed by the High Court, the impugned judgments are set aside and the Commission constituted under the 2003 Act is directed to consider the matter afresh in the light of the new statute - Appeal disposed off.
-
2008 (5) TMI 679
Doctrine of Promissory Estoppel - Withdrawal of concessions - Interpretation of notification dated 14.02.1997 - Grant of concessional tariff for a period of three years @ 60%, 70% and 80% of the consumption charges - expression "set up" - High Tension Industries - Whether by reason of the notification dated 31.01.1995, the entrepreneurs who had set up new high tension industries after the said date have acquired any right pursuant thereto? - Retrospective effect.
HELD THAT:- We may notice that concessional tariffs, however, were to be granted only for three years. Those three years of concessional tariffs, therefore, were available to any industry which had been set up after 3.01.1989 till the concession is withdrawn.
A promise was made to grant the concessional tariff not only for the new industries which were to be set up thereafter but also to the pre- existing industries. The right accrued to them is sought to be taken away w.e.f. 15.02.1997. Those who were eligible upto 14.02.1997 to avail the benefit of the notification dated 31.01.1995 became ineligible.
An accrued right ordinarily cannot be taken away with retrospective effect. It is not a case where the notification has a retroactive operation. A person may apply on a particular date for grant of electrical connection. He may get the electrical connection within a few days or a few weeks or a few months. According to the State Electricity Board, keeping in view the role played by all the three players, namely, the consumer, the Board and the State, an outer limit of 18 months is taken for grant of supply.
A statute, even a subordinate legislation, may have to be construed reasonably. A subordinate legislation ordinarily would not be given a retrospective effect. Retrospective effect can be granted only if there exists any power in that behalf. There is nothing to show that such a power has been conferred upon the State in terms of the Act.
The proviso is an exception to the main clause whereas all industries which were set up on or after 15th February become wholly ineligible for any tariff concession but those who had set up prior thereto shall continue to avail themselves of the said tariff concession. Legally, those who had not become consumer of electrical energy, but were the potential consumers, they had not only applied for it but they were and, in fact, some of them has also been gone into commercial production. Once they have set up the high tension industries and who had gone up for commercial production must be held to have set up the high tension industries. Once they have set up the high tension industries after 31st March, 1995, they became entitled to the benefit of concessional tariff for a period three years.
Such concession was to be availed by them from the date of grant of service connection. If they had already been granted service connection, they would continue to avail themselves of the said tariff concession. However, the difficulty arises only in cases where despite applying for grant of electrical communication, actual service connection had not been granted. If a literal interpretation of the proviso is taken recourse to, the same may result in an anomaly in the sense that in one case, connection may be granted in one day and in another case, connection may not be granted for a long time.
Because of the acts of discrimination on the part of the officers of the Board or the State, the entrepreneurs would suffer. It is in the aforementioned limited sense, the doctrine of promissory estoppel will have application. If doctrine of promissory estoppel applies, the right accrued in terms thereof cannot be withdrawn with a retrospective effect. [See Mahabir Vegetable Oils (P) Ltd. [2006 (3) TMI 234 - SUPREME COURT], Southern Petrochemical Industries Co. Ltd. [2007 (5) TMI 591 - SUPREME COURT]]
It is not a case where decisions were altered pursuant to any representation made by the State. Concessions in tariff had been granted by reason of a statutory provision. Such concessions could also be withdrawn. If the appellants have not altered their position pursuant to any promise, the doctrine of promissory estoppel would not apply. If that be so, the question of any right being vested in the appellants would also not apply.
In Kasinka Trading & Anr. v. Union of India & Anr.[1994 (10) TMI 64 - SUPREME COURT], the power of the State to change its policy decision in public interest was emphasized. It was held that the power which can be used for grant of concession, namely, Section 25(1) of the Customs Act itself is the source to rescind the earlier notification
We have noticed that some of the industries had even installed generators. They had to do it. They inevitably had to do it because the Board would not supply power. We think that for the said purpose, the proviso has to be read down. It must be made applicable to them who not only had started commercial production before the said date, namely, 14.02.1997 but also had applied and were otherwise ready to take electrical connections having deposited the amount asked for, wherefor their industries were otherwise ready for consuming electrical energy.
We, therefore, held: 1. As the concession had been granted by the State, it had the power to withdraw the same.
2. It is not a case where in view of the doctrine of promissory estoppel, the State could not have in law amended the Schedule.
3. In view of existence of public interest the doctrine of promissory estoppel would have no application.
4. Even otherwise the appellants having not preferred appeals against the judgment of the Division bench of the High Court, the said questions cannot be permitted to be raised before us.
5. Proviso appended to the main provision should be read down as stated in paragraphs 44 and 45 supra.
6. In view of our findings aforementioned, we have not gone into the merit of the matter involved in each case separately.
We direct accordingly. The matters would now be examined by the Appropriate Authority of the Board, as directed by the High Court in individual cases - Appeals are allowed.
-
2008 (5) TMI 678
Issues Involved:
1. Addition of Rs. 44 lacs u/s 68 of the IT Act.
2. Levy of interest u/s 234B.
3. Jurisdiction of the proceedings.
Issue 1: Addition of Rs. 44 lacs u/s 68 of the IT Act
The original assessment was completed on 31st March 2000, under s. 143(3) of the IT Act, declaring an income of Rs. 5,39,265 against a loss of Rs. 25,13,258. The CIT found the assessment erroneous and prejudicial to the interests of the Revenue, particularly concerning Rs. 50 lacs received as share application money from various individuals, which was not properly examined by the AO. The CIT directed the AO to reassess the nature and source of this amount. The AO added Rs. 50 lacs to the income, citing the assessee's failure to establish the identity, creditworthiness, and genuineness of the transactions u/s 68. The assessee's appeal to the CIT(A) failed, leading to the present appeal.
The Tribunal considered the identity and creditworthiness of the share applicants and the genuineness of the transactions. The assessee provided additional evidence, including the Stockinvest scheme details and relied on the judgment in CIT vs. Divine Leasing & Finance Ltd. The Tribunal found that the identity and creditworthiness of the share applicants were established through various documents, including the prospectus, share application register, and the appearance of Vivek Parti before the AO. The Tribunal also noted that the funds were received under the SEBI-authorized Stockinvest scheme, which guaranteed the genuineness of the transactions. Consequently, the Tribunal deleted the addition of Rs. 44 lacs out of the Rs. 50 lacs made u/s 68, noting that the addition of Rs. 6 lacs had become final in earlier proceedings.
Issue 2: Levy of interest u/s 234B
Ground No. 3, which challenged the levy of interest u/s 234B, was not argued. However, the assessee would be eligible for consequential relief, if any.
Issue 3: Jurisdiction of the proceedings
Ground No. 4, which challenged the jurisdiction of the proceedings, was not argued and was dismissed.
Conclusion
The appeal was partly allowed, with the deletion of the addition of Rs. 44 lacs u/s 68 of the IT Act. The issues concerning the levy of interest u/s 234B and the jurisdiction of the proceedings were not argued and thus dismissed. Ground No. 5 was general and required no decision.
-
2008 (5) TMI 677
Issues involved:
The judgment revolves around determining the quantum of interest to be awarded on compensation to the legal representatives of a deceased involved in a fatal accident.
Factual Matrix:
The deceased, Pradeep Kumar, along with his family members, died in a road accident caused by a bus allegedly driving rashly and negligently. The Motor Accident Claim Tribunal awarded compensation to the appellants, which was challenged in the High Court. The High Court modified the compensation amount and upheld the interest rate at 6% per annum.
Rate of Interest Determination:
The appellants appealed to the Supreme Court specifically on the issue of interest rate. The court considered the provisions of section 171 of the Motor Vehicle Act, 1988, which allows for the payment of interest in addition to compensation. Referring to previous judgments, the court emphasized that the determination of interest rate is discretionary and should be based on the facts of each case.
Precedents and Interest Rates:
The court cited various cases where interest rates were determined based on prevailing economic conditions and bank rates. Notably, in a case from 2005, the interest rate was reduced to 7.5% per annum in line with the prevailing bank deposit rates. Applying this principle to the present case, the court awarded interest at a rate of 7.5% from the date of application till the date of payment.
Disposition of the Appeal:
The Supreme Court disposed of the appeal by directing the payment of interest at the revised rate of 7.5%. The issue of enhancing the compensation amount was not pursued by the appellants, leading to its dismissal. No costs were awarded in the circumstances of the case.
-
2008 (5) TMI 676
Issues:
1. Challenge to common orders dated 18th July, 2006, 11th August, 2006, and 11th December, 2006 regarding Central Excise Duty demand and penalties.
2. Petitioner's financial hardship leading to dismissal of appeals for non-deposit of adjudicated amounts.
3. Appeal before the Appellate Tribunal directing deposit before hearing appeals.
4. Petitioner's contention of facing undue hardships and pending investigation related to consignments.
5. Prima facie view of the court on the correctness of petitioner's contentions.
6. Direction for the petitioner to furnish a bank guarantee for hearing the appeals.
7. Direction for expeditious adjudication of appeals by the authority.
Analysis:
The judgment by the High Court of Himachal Pradesh involved the disposal of writ petitions challenging common orders dated July and August 2006 and December 2006 related to Central Excise Duty demand and penalties. The Joint Commissioner (Audit) affirmed demands and penalties on the petitioner for diverting goods meant for export to home consumption. The petitioner filed appeals before the Commissioner, who directed deposit of 50% of the adjudicated amount, leading to dismissal of appeals for non-deposit. Subsequently, the petitioner appealed before the Appellate Tribunal, which directed a deposit before hearing the appeals.
The court considered the petitioner's financial hardships, noting the reversal of credit entry for two consignments and an FIR pending investigation for the third consignment. The court acknowledged the correctness of the petitioner's contentions, expressing a prima facie view that nothing might be found due and payable by the petitioner. The court emphasized that the FIR and pending investigation should have been considered by the lower authority.
In light of the circumstances, the court directed the petitioner to furnish a bank guarantee to the satisfaction of the Commissioner (Appeal) for hearing the appeals. The court aimed to ensure that the interest of justice and revenue could be adequately protected while expeditiously adjudicating the appeals within four months from the receipt of the order copy. Consequently, the court disposed of the petitions, providing clear directions for the further proceedings in the case.
-
2008 (5) TMI 675
Issues: Application for waiver of pre-deposit of interest and penalty.
In this judgment by the Appellate Tribunal CESTAT, Mumbai, the issue at hand was the application for waiver of pre-deposit of interest amounting to Rs. 9,133/- and a penalty of equivalent amount. The appellant had initially cleared goods at a certain price, which was later revised due to an increase in the cost of input raw material. The appellant paid the differential duty promptly upon issuance of supplementary invoices. However, the Revenue demanded interest for the period between the date of issue of supplementary invoices and the original payment of duty at the time of clearance.
The Tribunal found that the issue was similar to a previous decision in the appellant's own case, where interest and penalty were set aside based on the Hon'ble Bombay High Court's judgment. The Tribunal also noted another decision by the same Member in a different case where interest was held payable in similar circumstances. Given the favorable decision in the appellant's own case, the Tribunal decided to waive the pre-deposit of interest and penalty and stayed the recovery until the appeal was disposed of. This decision was made to align with the previous ruling and ensure fairness in the proceedings.
-
2008 (5) TMI 674
Issues:
1. Disallowance of Cenvat credit on capital goods.
2. Imposition of penalty and interest under Rule 13 of the Cenvat Credit Rules, 2002.
3. Applicability of credit on Iron and Steel products used in Civil Construction.
4. Dispute regarding admissibility of credit and reversal of credit by the Appellants.
5. Precedents cited by both parties.
Analysis:
1. The Appellants were involved in the manufacture of VP Sugar and Molasses and availed Cenvat credit on capital goods like MS Plates, HR Sheets, Angles, and Channels. The Adjudicating Authority disallowed credit amounting to Rs. 2,41,255 and imposed a penalty of equal amount under Rule 13 of the Cenvat Credit Rules, 2002. The Commissioner (Appeals) later modified the order, reducing the demand to Rs. 22,103 and imposed a penalty of equal amount.
2. The Appellants argued that they had reversed the amount of Rs. 22,103 after receiving the Adjudication order and had not utilized the credit, making the penalty and interest unjustified. They relied on legal precedents to support their argument. The learned DR, however, reiterated the Commissioner (Appeals) finding that the credit on Iron and Steel products used in Civil Construction was not admissible, leading to the penalty and interest imposition.
3. The Tribunal, after considering both sides and examining the records, noted the dispute over the admissibility of credit on Iron and Steel products. The Commissioner (Appeals) had reduced the disallowed credit to Rs. 22,103, which the Appellants reversed without utilizing. Citing a precedent involving Bombay Dyeing & Manufacturing Co. Ltd., the Tribunal held that penalty and interest were not applicable when credit was reversed without utilization due to wrong availment.
4. Ultimately, the Tribunal found that since the credit was not utilized and was reversed after the Adjudication order, the imposition of penalty and interest was unwarranted. Consequently, the penalty and interest were set aside, and the Appeal was allowed with consequential relief.
This detailed analysis of the judgment highlights the issues related to Cenvat credit disallowance, penalty imposition, admissibility of credit on specific goods, and the significance of reversal of credit without utilization in determining the applicability of penalty and interest.
-
2008 (5) TMI 673
AO disallowed the interest expenses on borrowed capital u/s 36(1)(iii) on the ground that borrowed funds were deployed by the assessee Company in order to purchase equity shares of AEC, which Company is subsequently taken over not by the assessee but by its sister companies - after acquiring the shares of AEC Ltd., the assessee herein has sold the shares at profit – whether it amounts to circular trading with idea of evading tax – matter restored to HC
-
2008 (5) TMI 672
Issues involved: Application for anticipatory bail in a case of alleged excise duty evasion by a company, non-compliance with court orders, cooperation in investigation, medical condition of the petitioner.
Summary:
1. The petitioner sought anticipatory bail in relation to an excise duty evasion inquiry against a company. The petitioner, the Managing Director of the company, had been summoned as a witness in another case. Interim protection was granted earlier, subject to cooperation in the investigation.
2. The respondent highlighted the petitioner's non-compliance with court orders to appear for investigation, citing medical reasons for absence. The petitioner expressed willingness to cooperate and explained the medical situation. Summons were produced, showing they were for a different case.
3. The court directed the petitioner to appear for investigation on a specified date, emphasizing continued cooperation. Stay of arrest was extended until the next hearing. The petitioner's counsel assured full cooperation and readiness to surrender passport if needed for travel.
4. The respondent opposed anticipatory bail, citing lack of cooperation from company employees and the petitioner. Court noted petitioner's regular appearances except during illness. Emphasized the importance of cooperation in the investigation process.
5. Court differentiated previous judgments cited by the respondent, highlighting the ongoing investigation into excise duty evasion. Bail was granted with conditions including a personal bond, surrender of passport, and cooperation in the investigation. Any violation would allow the respondent to seek bail cancellation.
Separate Judgement:
No separate judgment was delivered by the judges in this case.
-
2008 (5) TMI 671
Interpretation of statute - Section 31 of the Copyright Act, 1957 - Grant of compulsory licence - broadcast of the songs in respect whereof the first respondent holds a copyright as owner thereof or by reason of purchase of the copyright belonging to others - Principles of Valuation - "royalty" and "compensation" - 'work' defined in Section 2(y).
Whether the Copyright Board has jurisdiction u/s 31 (1)(b) of the Copyright Act, 1957 to direct the owner of a copyright in any Indian work or a registered copyright society to issue compulsory licences to broadcast such as works, where such work is available to the public through radio broadcast? - Whether in any event such a compulsory license can be issued to more than one complainant in the light of Section 31(2)? - relevant considerations which the Copyright Board must keep in view while deciding on issuance of compulsory license to a particular person and terms on which the compulsory license may be issued, including the compensation.
If the right of an author/society is so pervasive, is it necessary to construe the provisions under Section 31 of the Act having regard to the International Covenants and the laws operating in the other countries? - HELD THAT:- The answer to the said question must be rendered in affirmative. Interpretation of a statute cannot remain static. Different canons and principles are to be applied having regard to the purport and object of the Act. What is essential therefor is to see that the expanding area in which the copyright will have a role to play is covered. While India is a signatory to the International Covenants, the law should have been amended in terms thereof. Only because laws have not been amended, the same would not by itself mean that the purport and object of the Act would be allowed to be defeated. If the ground realities changed, the interpretation should also change. Ground realities would not only depend upon the new situations and changes in the societal conditions vis-'-vis the use of sound recording extensively by a large public, but also keeping in view of the fact that the Government with its eyes wide open have become a signatory to International Conventions.
Application of International Conventions in India - HELD THAT:- Applicability of the International Conventions and Covenants, as also the resolutions, etc. for the purpose of interpreting domestic statute will depend upon the acceptability of the Conventions in question. If the country is a signatory thereto subject of course to the provisions of the domestic law, the International Covenants can be utilized. Where International Conventions are framed upon undertaking a great deal of exercise upon giving an opportunity of hearing to both the parties and filtered at several levels as also upon taking into consideration the different societal conditions in different countries by laying down the minimum norm, as for example, the ILO Conventions, the court would freely avail the benefits thereof - Those Conventions to which India may not be a signatory but have been followed by way of enactment of new Parliamentary statute or amendment to the existing enactment, recourse to International Convention is permissible.
Essential Features of the Copyright Act - HELD THAT:- The underlying philosophy of the Copyright Act is that the owner of the copyright is free to enter into voluntary agreement or licenses on terms mutually acceptable to him and the licensee. The Act confers on the copyright owner the exclusive right to do the various acts enumerated in Section 14. An infringement of copyright occurs if one of those acts is done without the owner's license. A license passes no interest, but merely makes lawful that which would otherwise be unlawful. The Act also expressly recognizes the notion of an "exclusive license" which is defined in Section 2(j). But, that does not mean, as would be noticed from the discussions made hereinafter, that it would apply in all situations irrespective of the nature of right as also the rights of others - This Scheme shows that a copyright owner has complete freedom to enjoy the fruits of his labour by earning an agreed fee or royalty through the issuance of licenses. Hence, the owner of a copyright has full freedom to enjoy the fruits of his work by earning an agreed fee or royalty through the issue of licenses. But, this right, to repeat, is not absolute. It is subject to right of others to obtain compulsory licence as also the terms on which such licence can be granted.
Copyright Society - HELD THAT:- The Copyright Society is required to frame a scheme to determine the quantum of remuneration payable to individual copyright owners having regard to the number of copies of the work in circulation - Rule 14J requires that a Copyright Society shall frame a scheme of tariff to be called a "Tariff Scheme" setting out the nature and quantum of fees or royalties which it proposes to collect in respect of such copyright or other rights administered by it. Rule 14K requires a Copyright Society to frame a "Distribution Scheme" setting out the procedure for collection and distribution of royalty specified in the Tariff Scheme among the owners of copyright. Any distribution under the Distribution Scheme is required to be in the proportion to the income of the Copyright Society from actual use of the work or works of each owner of rights."
Compulsory Licence - HELD THAT:- Chapter VI relate to grant of licence, which can be divided into two parts; licences by owners of copyright and compulsory licenses. Compulsory licences can be granted by the Copyright Board subject to the limitations contained therein. It cannot be said to be an exception to the general rule in the strict sense of the term as the provisions relating to grant of license by owners of Copyright and compulsory licenses operate in different fields. It may be true that while passing an order for grant of compulsory licenses, the relevant factors as laid down therein must be kept in mind which would include the right of the owner of the copyright as a part of the right of property, but where a statute is to be construed as a balancing statute, the situation may be different.
Construction of Section 31 of the Act - HELD THAT:- Admittedly in terms therof the principles of natural justice are required to be complied with and an enquiry has to be held. The extent of such enquiry will depend upon the facts and circumstances of the case. A finding has to be arrived at that the grounds of refusal by an owner of a copyright holder is not reasonable. Only upon arriving at the said finding, the Registrar of copyright would be directed to grant a license for the said purpose. The amount of compensation payable to the owner of the copyright must also be determined. The Board would also be entitled to determine such other terms and conditions as the Board may think fit and proper. Registration is granted only on payment of such fees and subject to compliance of the other directions.
Right to Property - Is the Concept Applicable - HELD THAT:- The right of property is no longer a fundamental right. It will be subject to reasonable restrictions. In terms of Article 300A of the Constitution, it may be subject to the conditions laid down therein, namely, it may be wholly or in part acquired in public interest and on payment of reasonable compensation.
Public Interest - Public Policy - HELD THAT:- The right to property, therefore, is not dealt with its subject to restrict when a right to property creates a monopoly to which public must have access. withholding the same from public may amount to unfair trade practice. In our constitutional Scheme of statute monopoly is not encouraged. Knowledge must be allowed to be disseminated. An artistic work if made public should be made available subject of course to reasonable terms and grant of reasonable compensation to the public at large.
Royalty and Compensation - HELD THAT:- The legislature for all intent and purport equates 'compensation' with 'royalty'. In the context of the Act, royalty is a genus and compensation is a species. Where a licence has to be granted, it has to be for a period. A 'compensation' may be paid by way of annuity. A 'compensation' may be held to be payable on a periodical basis, as apart from the compensation, other terms and conditions can also be imposed. The compensation must be directed to be paid with certain other terms and conditions which may be imposed.
Parliamentary Intent - HELD THAT:- The intention of the Parliament, it is trite, must be ascertained from the plain reading of the Section. The intention is to treat works, which have been "withheld from the public" differently from the "right to broadcast". The right to broadcast is a ephemeral right. It requires special treatment as it confers upon every person, who wishes to broadcast a work or the work recorded in a sound recording, the right to do so is either by entering into a voluntary agreement to obtain a licence on such terms which appear to be reasonable to him or when the term appears to be unreasonable to approach the Board - When such a complaint is made, it confers the jurisdiction upon the Board. It may ultimately allow or reject the complaint but it cannot be said that the complaint itself is not maintainable.
Interpretation of Section 31(2) - HELD THAT:- The meaning of the Statute is neither clear nor sensible. It is a statute where a purposive construction is warranted. It is a case where sub-Section (2) should be kept confined to clause (a) for that purpose. The statute has to be read down. It is not a case of improper interpolation so as to take away a primary purpose of the legislative intent. It is expedient to give effect to the intent of the statute. This itself says that creases can be ironed out. While undertaking the said exercise, the court's endeavour would be to give a meaning to the provisions and not render it otiose - Section 31(2) refers to case falling under clause (a) of Sub-section (1) of Section 31 and not clause (b) thereof.
Principles of Valuation - HELD THAT:- The Tribunal exercises a limited jurisdiction in India. Different cases are required to be considered on its own merits. What would be reasonable for one may not be held to be reasonable for the other. The principles can be determined in a given situation. The Bombay High Court has remitted the matter back to the Board for the said purpose. We endorse the views of the Bombay High Court.
Discretionary Jurisdiction - whether the discretionary jurisdiction should have been exercised in favour of the appellant? - HELD THAT:- Reliance has been on Phonographic Performance Ltd. vs. Maitra. The general principle of grant of injunction came up for consideration before the Court of Appeal. Therein, it was held that an owner may exercise and exploit his proprietary right by licensing some and not others. He may charge whatever he wishes. Such is not the position in India. Therein, the defendant did not take part in the proceedings. It was, inter alia, from that angle, held that the court could still exercise discretion.
Conclusion:
As it was a case of abuse, the Board had the jurisdiction to entertain any application for grant of compulsory licence. How far and to what extent appellant has infringed the right of the respondent is a matter which may be taken into consideration by the Board. A suit was filed and injunction was granted. Apart from the fact that the appellant offered to take a license held negotiations with the respondents in the suit as soon as it came to know that Super Cassettes is not a member of PPL, it gave an undertaking. Each case must be considered on its own facts - However, we do not approve the manner in which the Board has dealt with the matter. It has refused to examine the witnesses. It took up the matter on a day for hearing which was fixed for production of witnesses. We, therefore, are of the opinion that the order of the Board should be set aside and the matter be remitted to the Board again for the consideration of the matter afresh on merit.
Appeal allowed.
-
2008 (5) TMI 670
Issues involved: Whether the amount received is 'income' u/s the Income Tax Act, 1961 for the assessment year 1992-93.
The judgment by the Delhi High Court in the case of the Department v. Legal Heir of the Deceased assessee addressed the issue of whether the amount received could be considered as 'income' u/s the Income Tax Act, 1961. The Commissioner of Income-tax (Appeals) held that the amount could be viewed as a gift or donation due to the deceased's personal qualities and social work. The Tribunal upheld this decision. The Court emphasized that not every receipt is taxable as income, and the key consideration is whether the essential elements of 'income' are present.
The appellant relied on the Supreme Court judgment in A. Govindarajulu Mudaliar vs. CIT (1958) to argue that if the specific nature of the receipt is not proven, it can be inferred as taxable income. However, the Court referred to the case of Parimisetti Seetharamamma vs. CIT (1965) to clarify that the mere failure to provide all evidence does not automatically make a receipt taxable. The source and nature of the receipt must be satisfactorily disclosed to determine taxability.
In this case, the IT authorities were aware of the source and purpose of the receipt given by Mr. S.K. Jain to Mr. Kamal Singh for the deceased assessee. The assessment was reopened based on this information. The Court noted that there was no evidence of the money being used for personal gain by the deceased, such as acquiring properties or for personal expenses. As there was no quid pro quo involved, and the money was spent on election campaign expenses, the Court found no grounds to interfere with the lower authorities' findings. Consequently, the appeal was dismissed, affirming the decision that the amount in question was not taxable as 'income'.
-
2008 (5) TMI 669
Issues Involved:
1. Legality of the assessment framed under Section 153A of the IT Act.
2. Denial of claim under Section 80-IB due to the number of workers being less than the required 10.
3. Computation of property income.
4. Consideration of expenditure incurred on furniture and repairs.
5. Levy of interest under Section 234B.
6. Levy of interest under Section 234D.
7. Denial of relief under Section 80-IB by holding that the unit does not perform any manufacturing operations.
Issue-wise Detailed Analysis:
1. Legality of the Assessment Framed under Section 153A of the IT Act:
The appeals for the assessment years 2003-04 and 2004-05 questioned the legality of the assessment framed under Section 153A. The learned CIT(A) did not adjudicate this issue in the case of Metro Thermoformers as it was not pressed before him. The assessee claimed that the notices issued under Section 153A were invalid as no prescribed form was available at the time. This contention was not pressed during the hearing, and the order of the CIT(A) was confirmed.
2. Denial of Claim under Section 80-IB:
The issue of denial of claim under Section 80-IB arose in the cases of Mr. Rajesh Kapila, M/s Metro Thermoformers, Sun Media Technologies, and Microsign Corporation due to the number of workers being less than the required 10. The AO denied the claim based on the attendance register found during a survey and the statement of Mr. Madhukar Misal. The assessee was not granted an opportunity to cross-examine Mr. Misal during the assessment proceedings, but this was remedied at the appeal stage. Mr. Misal clarified that the attendance register only recorded permanent employees, not casual workers. The assessee provided evidence of casual workers, certified by the labor inspector and supported by the auditor's report. The denial of deduction under Section 80-IB based on the attendance register was deemed unjustified.
3. Computation of Property Income:
In the case of Mona Kapila for the assessment year 2004-05 and O.N. Kapila for multiple years, the issue was whether properties used by the firm could be excluded from 'Income from house property' under Section 22 of the IT Act. The CIT(A) followed decisions favoring the assessee and deleted the property income computed under Section 22. The decision of the Karnataka High Court in CIT vs. K.N. Guruswamy was not followed, as the rejection of SLP by the Supreme Court did not affirm the High Court's view. The order of the CIT(A) was confirmed.
4. Consideration of Expenditure Incurred on Furniture and Repairs:
For the assessment years 2003-04 and 2004-05, the issue related to the expenditure on furniture and repairs on a flat belonging to Sri O.N. Kapila. The firm had declared the income, but the AO made a protective assessment, suggesting the income should be assessed in the hands of Sri O.N. Kapila. The CIT(A) confirmed the addition in the firm's hands on a substantive basis, and the Tribunal agreed, directing the AO accordingly.
5. Levy of Interest under Section 234B:
The issue of levy of interest under Section 234B arose in multiple appeals. The assessee argued that no interest under Section 234B was payable based on assessments made under Section 143(1) and that interest should be applied under Section 234B(3) for assessments under Section 153A. The Tribunal agreed, stating that interest under Section 234B is not justified where there was no original assessment under Section 143(1). Consequential relief was directed for the assessment year 2005-06.
6. Levy of Interest under Section 234D:
For the assessment year 2003-04, the issue of levy of interest under Section 234D was contested. The Tribunal confirmed the levy, citing the decision of the Bangalore Bench in Sigma Aldrich Foreign Holding Co. vs. Asstt. CIT, which held that Section 234D is applicable to all regular assessments made after 1st June 2003.
7. Denial of Relief under Section 80-IB:
The denial of relief under Section 80-IB was based on the AO's findings that the eligible unit did not carry out the entire manufacturing operations at Daman, the operations did not amount to manufacturing, and the unit did not employ more than ten workers. The CIT(A) disagreed, concluding that the activities at Daman involved manufacturing and that part of the job done by an outside agency did not disqualify the unit from Section 80-IB benefits. The Tribunal upheld the CIT(A)'s decision, confirming the eligibility for deduction under Section 80-IB.
Conclusion:
The appeals of the Revenue were dismissed, and the appeals of the assessees were partly allowed, confirming the CIT(A)'s decisions on the various issues.
-
2008 (5) TMI 668
Issues Involved:
1. Whether the non-compete charges of Rs. 5,00,000 paid by the assessee should be treated as revenue expenditure or capital expenditure.
2. Whether depreciation u/s 32 of the Income-tax Act should be allowed if the non-compete charges are considered capital expenditure.
Issue 1: Non-Compete Charges - Revenue vs. Capital Expenditure
The CIT(A) upheld the ACIT's decision to disallow non-compete charges of Rs. 5,00,000 paid to a partner of M/s. Lund & Blockley, treating it as capital expenditure. The assessee argued that the expenditure did not result in the acquisition of any asset or an advantage of an enduring nature and should be allowed as revenue expenditure. The assessee paid the non-compete charges to enhance profitability and claimed it as revenue expenditure in the computation of income. The Assessing Officer, referencing the Madras High Court judgment in Tamilnadu Dairy Development Corpn. v. CIT [1999] 239 ITR 142, treated the expenditure as capital expenditure, disallowing the claim.
The Tribunal noted that the non-compete agreement restricted the recipient from engaging in similar business for 5 years, implying a temporary benefit rather than an enduring one. The Tribunal referred to various judgments, including CIT v. Late G.D. Naidu [1987] 165 ITR 63 (Mad.) and Smartchem Technologies Ltd. v. ITO [2005] 97 TTJ (Ahd.) 818, which supported the view that non-compete fees for a shorter period should be considered revenue expenditure. The Tribunal emphasized that the nature of expenditure should be viewed from the business perspective and not from the Revenue's attitude.
The Tribunal concluded that the non-compete charges were paid to restrain the recipient from entering similar trades for 5 years, thus providing a temporary benefit. Therefore, the expenditure was deemed revenue in nature and allowable. However, it should be spread over 5 years rather than being claimed in a lump sum in the assessment year.
Issue 2: Depreciation u/s 32
Since the Tribunal treated the non-compete charges as revenue expenditure, the question of allowing depreciation u/s 32 did not arise. Consequently, the Tribunal rejected the ground related to depreciation.
Conclusion:
The appeal of the assessee was partly allowed, treating the non-compete charges as revenue expenditure to be spread over 5 years. The ground related to depreciation was rejected.
-
2008 (5) TMI 667
Issues Involved:
1. Adjustment of Special Import Licenses (SIL) realization in business profits for section 80-HHC deduction.
2. Adjustment of Duty Entitlement Pass Book (DEPB) face value in business profits for section 80-HHC deduction.
3. Legitimacy of granting relief under section 154 by CIT (Appeals).
Detailed Analysis:
1. Adjustment of Special Import Licenses (SIL) Realization in Business Profits for Section 80-HHC Deduction:
The assessee, an export house, received Special Import Licenses (SIL) as an export incentive and claimed deductions under section 80-HHC. The Assessing Officer (AO) argued that the value of SIL, similar to export incentives, should be reduced by 90% from the business profits per section 80-HHC (baa). However, the CIT (Appeals) held that SIL benefits were not covered under section 28(iiia) to 28(iiie) and should not be excluded from business profits. Upon rectification under section 154, the CIT (Appeals) confirmed that SIL benefits did not grant any concession in import duty and were not covered under section 28(iiia) to 28(iiie), thus not subject to exclusion under clause (baa). The Tribunal upheld this view, stating that SIL receipts are business income under section 28(iv) and not subject to exclusion under clause (baa) of section 80-HHC.
2. Adjustment of Duty Entitlement Pass Book (DEPB) Face Value in Business Profits for Section 80-HHC Deduction:
The assessee also received DEPB receipts. The AO reduced 90% of the DEPB face value from business profits for section 80-HHC deduction. The CIT (Appeals) initially agreed but rectified the order, stating that only the profit element of DEPB receipts should be considered under section 28(iiid), not the entire face value. The Tribunal concurred, explaining that DEPB receipts consist of cost and profit elements. The profit element is taxable under section 28(iiid) and subject to exclusion under clause (baa), while the cost element is taxable under section 28(iv) and not subject to exclusion. The Tribunal directed the AO to compute the deduction accordingly.
3. Legitimacy of Granting Relief Under Section 154 by CIT (Appeals):
The Revenue contended that the relief granted under section 154 was outside its ambit, arguing that the CIT (Appeals) had initially considered all relevant facts and law. The Tribunal, however, noted that mistakes apparent from the record, including mistakes of law, can be rectified under section 154. Citing precedents, the Tribunal upheld the CIT (Appeals)'s rectification, confirming that the original order contained errors in applying the law regarding SIL and DEPB adjustments.
Conclusion:
The Tribunal concluded that the CIT (Appeals) correctly rectified the mistakes under section 154, affirming that SIL receipts should not be excluded under clause (baa) and only the profit element of DEPB receipts should be considered for exclusion. The appeals by the Revenue were dismissed, and the appeals by the assessee were partly allowed, directing the AO to recompute the deductions under section 80-HHC accordingly.
-
2008 (5) TMI 666
Issues involved: Claim of modvat credit, show cause notice validity, extended period of limitation under Section 11A of Central Excise Act.
The judgment pertains to a case where the Respondent had claimed modvat credit on M.S. scrap in June and August 1995. The Revenue issued a show cause notice to the Respondent on 13th May 1999, three years after the conclusion of investigations, without invoking the extended period of limitation under Section 11A of the Central Excise Act.
The Court noted that the show cause notice did not mention the invocation of the extended period of limitation. Relying on a previous decision in the case of Gammon India Ltd. v. Commissioner of Central Excise, Goa, the Tribunal concluded that the show cause notice was time-barred. The Revenue's appeal to the Supreme Court was unsuccessful as the Court declined to interfere with the Tribunal's decision on the question of limitation.
Comparing the present case to a previous case where the show cause notice was issued two years after completion of the enquiry, it was highlighted that in this instance, the notice was issued three years after the completion of the enquiry, clearly indicating that it was barred by time. The Court found no substantial question of law to consider and dismissed the case.
-
2008 (5) TMI 665
Issues Involved:
- Request for issuance of a writ of mandamus for drawing fresh samples from imported goods.
- Request for release of goods on a provisional basis pending investigation.
- Dispute regarding the true description of the imported paper.
- Discrepancy in testing reports by the Central Pulp and Paper Research Institute.
- Legal principles governing re-testing of samples.
- Adjudication process status.
- Judicial precedents supporting re-testing of samples.
Analysis:
1. Request for Issuance of Writ of Mandamus:
The petitioner sought a writ of mandamus directing the respondent to draw fresh samples from the imported goods, specifically light weight coated paper, for retesting in a recognized laboratory. The petitioner emphasized the importance of accurate testing to determine the true nature of the imported paper.
2. Release of Goods on Provisional Basis:
Another relief sought by the petitioner was the release of the goods on a provisional basis pending the investigation. However, the petitioner later informed the court that the goods had already been released, thereby not pressing this particular prayer.
3. Dispute over True Description of Imported Paper:
The core issue revolved around the dispute regarding the true description of the imported paper. The petitioner claimed that the paper was light weight coated paper, while the initial testing report indicated it was uncoated paper. This discrepancy had significant implications on the applicable customs duty rates.
4. Discrepancy in Testing Reports:
The Central Pulp and Paper Research Institute submitted two conflicting reports regarding the nature of the samples provided for testing. The first report classified the paper as uncoated, whereas the subsequent report identified it as light weight coated paper. This inconsistency raised doubts about the accuracy of the testing methodology employed initially.
5. Legal Principles on Re-Testing of Samples:
The petitioner referenced previous judgments allowing re-testing of samples in similar cases, emphasizing the need for a fair and accurate assessment of the imported goods. The court considered these legal precedents in directing the respondent to re-examine the samples and provide a report to the petitioner.
6. Status of Adjudication Process:
It was noted that the adjudication process concerning the matter had commenced but was not concluded. This highlighted the ongoing legal proceedings related to the dispute over the classification of the imported paper and the determination of applicable customs duties.
7. Judicial Precedents Supporting Re-Testing:
Citing relevant judgments, the court directed the respondent to consider the petitioner's request for re-testing of samples in line with established legal principles and the need for a fair resolution of the dispute. The court emphasized the importance of following due process and natural justice in the adjudication process.
In conclusion, the court disposed of the writ petition after issuing directions for re-examination of the samples and emphasized the need for a fair and transparent resolution of the dispute over the classification of the imported paper.
-
2008 (5) TMI 664
Gift received from Swiss national - relationship and creditworthiness of the donor not established - all the three authorities have rejected the explanation of the assessee - HELD THAT:- We are not convinced that the transaction is above board. We have in particular considered the quantum of the gifts, the fact that there is inadequate material to show the resources or finances of the Swiss national: there is no apparent reason for the assessee being showered with gifts by a person who is stated to be only a family friend and that the same family friend has showered gifts of an enormous amount on several other persons as well.
Therefore, we do not find any perversity shown in the conclusion arrived at by the Tribunal on the facts of this case. No substantial question of law arises in this regard.
-
2008 (5) TMI 663
Issues Involved:
1. Deletion of addition of Rs. 11,70,56,000 made on account of receipt from M/s Mittal Group of Companies.
2. Validity of assessment framed u/s 143(3)/147 based on documents found during the search.
Summary:
Issue 1: Deletion of Addition of Rs. 11,70,56,000
The Revenue appealed against the CIT (A)'s order deleting the addition of Rs. 11,70,56,000 made by the Assessing Officer (AO) based on documents found during a search on the Mittal Group of Companies. The AO had added this amount to the assessee's income, alleging unaccounted consideration received from the Mittal Group for the sale of land at a higher rate than declared. The CIT (A) deleted the addition, relying on a previous order in the case of Chavan Rishi International Pvt. Ltd., where it was held that no extra consideration was paid beyond what was recorded in the investors' agreement.
Issue 2: Validity of Assessment u/s 143(3)/147
The AO's assessment was based on a seized document (Annexure A-I, page 5) from the Mittal Group, which purportedly showed higher payments for land than declared. The assessee argued that the document reflected market value, not actual payments. The Tribunal upheld the CIT (A)'s decision, noting that the seized document was not a cash book and lacked corroborative evidence of actual higher payments. The Tribunal emphasized that the document should be read as a whole and not selectively, and found that the AO's presumption of higher payments was not substantiated by independent evidence.
Conclusion:
The Tribunal dismissed the Revenue's appeal, affirming the CIT (A)'s deletion of the addition. It held that the seized document indicated market value, not actual payments, and the AO's addition was based on unsubstantiated presumptions. The Tribunal's findings in the case of Chavan Rishi International Pvt. Ltd. applied mutatis mutandis to the present case, leading to the conclusion that no unaccounted consideration was received by the assessee.
........
|
9911796707
