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Showing 81 to 100 of 986 Records

• 2009 (7) TMI 1322
  
  The Delhi High Court dismissed the appeal as the issue was already decided in a previous judgment involving Oracle Software India Ltd. (293 ITR 353). The appellant's appeal had no merit.

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• 2009 (7) TMI 1321
  
  The Supreme Court dismissed the appeal in the case as per the order by Mr. S.H. Kapadia and Mr. Aftab Alam, JJ. [Citation: 2009 (7) TMI 1321 - SC]

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• 2009 (7) TMI 1320
  
  Issues Involved:
  1. Territorial Jurisdiction
  2. Applicability of the "Two-Terminal-per-Operator Cap" Policy
  3. Validity of Policy Decisions versus Contractual Clauses
  4. Judicial Review of Policy Decisions
  
  Issue-wise Detailed Analysis:
  
  1. Territorial Jurisdiction:
  The respondents contended that the Writ Petition lacked territorial jurisdiction as all relevant events occurred in Tuticorin. However, the court held that under Article 226(2) of the Constitution, the High Court has jurisdiction if any part of the cause of action arises within its territory. Since the petitioner's registered office is in Chennai and the policy decision affected its business there, the court found that part of the cause of action arose within its jurisdiction, making the Writ Petition maintainable.
  
  2. Applicability of the "Two-Terminal-per-Operator Cap" Policy:
  The petitioner argued that Clause 2.3 of the Licence Agreement allowed them to participate in subsequent bids. However, the court noted that Clause 14 of the Licence Agreement, which deals with "Change in Law," overrides Clause 2.3. The court emphasized that the Licence Agreement is subject to any new law or policy enacted after the agreement date. The "Two-Terminal-per-Operator Cap" policy, introduced to prevent private monopoly, was a valid change in law. Hence, the petitioner's right under Clause 2.3 was nullified by this policy.
  
  3. Validity of Policy Decisions versus Contractual Clauses:
  The court highlighted that policy decisions taken by the government in public interest cannot be overridden by contractual clauses. The policy to prevent private monopoly in the port sector was upheld by the Bombay High Court and the Supreme Court, making it binding. The court noted that the petitioner did not challenge the policy itself, which had attained finality. Therefore, the policy decision to debar the petitioner from participating in the bid was valid and binding, despite the provisions of the Licence Agreement.
  
  4. Judicial Review of Policy Decisions:
  The court reiterated that it is not within the judiciary's purview to interfere with policy decisions unless they are arbitrary or capricious. The decision to implement the "Two-Terminal-per-Operator Cap" was taken to foster competition and prevent monopoly, which is a reasonable and valid public policy. The court cited various Supreme Court judgments emphasizing that courts should not interfere with economic policy decisions unless there is a clear illegality. The court concluded that the policy decision was neither arbitrary nor capricious and thus could not be subjected to judicial review.
  
  Conclusion:
  The court dismissed the Writ Petition, affirming the validity of the "Two-Terminal-per-Operator Cap" policy and its applicability over the contractual clauses in the Licence Agreement. The court upheld the government's policy decision as a legitimate exercise of its authority to prevent private monopoly and promote competition in the port sector.

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• 2009 (7) TMI 1319
  
  Issues Involved:
  1. Legitimacy of film right expenses.
  2. Validity of donation claims.
  3. Applicability of penalty u/s 271(1)(c).
  
  Summary:
  
  1. Legitimacy of Film Right Expenses:
  The assessee, engaged in shares and stock broking, claimed Rs. 2,85,00,000 towards film right expenses for the film "Sar Aankho Par" purchased from M/s. Pinnacle Entertainment Pvt. Ltd. and sold back to the same company for Rs. 4,43,024. The Assessing Officer (AO) concluded that this transaction was designed to defraud the revenue, adding Rs. 2,80,56,976 to the assessee's income. The CIT(A) and Tribunal upheld this view, noting the assessee's failure to produce details or evidence of the transaction, deeming it an evasive stand to reduce tax liability.
  
  2. Validity of Donation Claims:
  The assessee claimed donations as business expenditure u/s 37(1). The AO and CIT(A) denied this claim due to lack of proof of payment. The Tribunal found no evidence supporting the genuineness of the donation transaction.
  
  3. Applicability of Penalty u/s 271(1)(c):
  The AO initiated penalty proceedings u/s 271(1)(c) for concealment of income and furnishing inaccurate particulars. The assessee argued that there was no conscious concealment and that the explanation provided was bona fide. However, the AO imposed a penalty of Rs. 1,21,40,540, which was confirmed by the CIT(A). The Tribunal upheld the penalty, stating that the assessee's actions were a deliberate attempt to reduce tax liability, and the explanation provided was neither believable nor bona fide. The Tribunal also confirmed that income-tax includes surcharge.
  
  Conclusion:
  The Tribunal dismissed the appeal, affirming the CIT(A)'s order that the assessee's transactions were designed to evade tax, and upheld the penalty imposed u/s 271(1)(c).

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• 2009 (7) TMI 1318
  
  Issues involved:
  The issue involves the power of the State to review the grant of sanction under Section 197 of the Code of Criminal Procedure, 1973.
  
  Summary:
  
  Issue 1: Power of State to Review Sanction Grant
  The respondent, a public servant, faced a First Information Report under the Prevention of Corruption Act, 1988. Initially, sanction to prosecute was refused, but later granted. The High Court opined that the State had no power of review and had exhausted its jurisdiction. The State argued that as an administrative matter, it could review its decision. The Supreme Court clarified that while the State's power is statutory, it can re-exercise its jurisdiction without needing express review powers. However, the authority must apply its mind and consider all relevant material before granting or refusing sanction.
  
  Issue 2: Jurisdiction of Sanctioning Authority
  The Supreme Court highlighted that the authority granting sanction must apply its mind to the material facts and evidence collected during the investigation. The order must not be based on irrelevant facts or extraneous considerations. Judicial review is possible for orders refusing or granting sanction. The source of the authority's power and the necessity of serious consideration before passing such orders were emphasized.
  
  Issue 3: Procedure for Granting Sanction
  The Court examined the procedural aspects of granting sanction, emphasizing the importance of proper consideration and application of mind by the sanctioning authority. It was noted that the concerned authority cannot pass an order subject to higher authority's ratification. The case highlighted the significance of timely decisions and the need for clear communication between departments involved in the sanction process.
  
  Separate Judgement:
  The Supreme Court dismissed the appeal, finding no merit in challenging the High Court's decision. It was concluded that no fresh material was presented for reconsideration, and the necessity for review was not adequately demonstrated. The lack of new grounds or reasons for the re-examination of the earlier order led to the dismissal of the appeal.
  
  Conclusion:
  In conclusion, the Supreme Court upheld the High Court's decision, emphasizing the importance of proper application of mind and consideration of all relevant factors in granting or refusing sanction. The appeal was dismissed, and no costs were awarded in the case.

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• 2009 (7) TMI 1317
  
  Issues Involved:
  1. Seniority dispute between direct recruits and promotees.
  2. Legality of interim orders affecting reversion and promotions.
  3. Interpretation and application of the Punjab Civil Services (Executive Branch) Rules, 1976.
  
  Summary:
  
  1. Seniority Dispute Between Direct Recruits and Promotees:
  The core issue revolves around the seniority between direct recruits and promotees governed by the Punjab Civil Services (Executive Branch) Rules, 1976. Initially, the 1930 Rules allocated 68% slots for direct recruits, but the 1976 Rules reduced this to 50%. The State's requisition to the Punjab Public Service Commission for filling vacancies was modified, leading to a dispute over seniority lists finalized in 1993 and 1994, which excluded direct recruits who joined in 1986.
  
  2. Legality of Interim Orders Affecting Reversion and Promotions:
  The High Court's interim order dated 25th March 2008 stayed the reversion of the first respondent, which was challenged. The Supreme Court noted that the High Court should not have passed an interim order with serious civil consequences without giving an opportunity of hearing to the appellants. The Supreme Court emphasized the importance of considering prima facie case, balance of convenience, irreparable injury, and public interest before granting interim orders.
  
  3. Interpretation and Application of the Punjab Civil Services (Executive Branch) Rules, 1976:
  The Supreme Court in its earlier judgment (Arvinder Singh Bains v. State of Punjab and Ors.) interpreted Rules 7, 8, 18, and 21 of the 1976 Rules. It held that seniority must be determined by reading Rule 18 with Rule 21, reflecting the rota-quota rule in the seniority list. The Court directed that the seniority list should be revised accordingly, and any action taken would be subject to the outcome of the appeal. The Supreme Court reiterated that the High Court could not grant an order of stay contrary to the law laid down in the previous judgment.
  
  Conclusion:
  The Supreme Court allowed the appeals, modifying the High Court's orders to vacate the stay on reversion and directed the appointment of appellants to the IAS cadre as per the seniority list dated 4th April 2007. The Court also directed the State of Punjab to send requisition for filling up vacancies to the Union of India and the Union Public Service Commission. The High Court was requested to expedite the disposal of pending writ petitions. The Supreme Court emphasized the need for judicial comity and the importance of public interest in such matters.

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• 2009 (7) TMI 1316
  
  The Supreme Court dismissed the special leave petition but left the question of law raised in the petition open for decision at a later stage. (Case citation: 2009 (7) TMI 1316 - SC)

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• 2009 (7) TMI 1315
  

  Direction of eviction from the suit premises u/s 14(1)(a) r/w Section 14(2) of the Delhi Rent Control Act, 1958 - respondent is a tenant in respect of the suit premises - tenant once availed the benefit u/s 14(2) - whether the tenant/respondent had defaulted in payment of rent inasmuch as he had not deposited the rent with the Rent Controller for the aforesaid period after the refusal by the landlord/appellants in the manner required by law - Whether this is a case of second default and the respondent having once availed the benefit under Section 14(2) of the Act is not entitled to such benefit in case if it is held to be a second default? - High Court had observed that it was not the case of a second default and therefore reversed the order of the Rent Control Tribunal and directed that no order of eviction could be passed as this was not a case of second default.

  HELD THAT:- Section 14(1)(a) is a ground for eviction of a tenant for default in payment of rent. In spite of that, protection has been given u/s 15 of the Act to the tenant to avail of the protection given by the Legislature by depositing rent in the manner indicated in Section 15 of the Act. However, proviso to Section 14(2) of the Act takes away the right of a tenant of the benefit of Sub-Section (2) of Section 14 if the tenant having obtained such benefit once in respect of any premises and makes a further default in payment of rent of those premises for three consecutive months. Therefore, it has been made clear that when the tenant makes a second default, no protection can be given to the tenant from eviction.

  Applying the principles laid down in Atmaram's case [2005 (8) TMI 746 - SUPREME COURT],and the decision in E. Palanisamy [2002 (10) TMI 794 - SUPREME COURT] and in view of our discussions made herein earlier and considering the object of the Act and the intention of the Legislature, we are in respectful agreement with the observations made by this Court in the aforesaid two decisions.

  Since we have already come to the conclusion that since the tenant/respondent has failed to deposit rent in compliance with Section 27 of the Act because in the present case, admittedly, landlord/appellants had not accepted any rent tendered by the tenant/respondent within the time referred to in Section 26, it was the duty of the tenant to deposit such rent before the Rent Controller as prescribed in Section 27 of the Act. Admittedly, this step was not taken by the respondent which is mandatory in nature and, therefore, we must hold that the tenant/respondent had committed a second default in payment of rent and is, therefore, liable to be evicted from the suit premises.

  The word "may" in the context of the Act, shall be construed as "shall" and therefore, the tenant shall deposit the rent after refusal by the landlord and, accordingly, having not done so, he is liable to be evicted.

  Accordingly, the appeal is allowed. the impugned order of the High Court is set aside and since the tenant/respondent having committed second default for which he is not entitled to be protected under the Act, the order of eviction passed by the Rent Controller must be restored.

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• 2009 (7) TMI 1314
  

  Maintainability of Petition - Family companies - Acts of oppression and mismanagement - Quasi judicial authority exercising equitable jurisdiction - Non service of proper notice - extraordinary general meeting was held without sending notices to all the directors - wherein resolution was passed (a) enhancement of share capital (b) allotment of additional shares amongst the members of respondent No. 2 group - Removal of Directors - Additional shares were issued in order to convert personal loans of the directors, i.e., respondent No. 2 group into equity on the say of financial investment, there are two meetings of the same date at two different places, one which is available on the Registrar of Companies record, and another one filed along with the reply by the respondents.

  Maintainability of Petition - HELD THAT:- The petitioners have to meet the requirement u/s 399 either in terms of the number/percentage of shares or in terms of the number of shareholders. Further, it has been held in a number of cases that if the shareholding of the petitioner in a petition u/s 397 and 398 got reduced to below 10 per cent, on issue/allotment of further shares and if the said issue/allotment is the very act which is challenged as "oppressive" in the said petition, the maintainability of the petition would be decided after determining the validity of the issue of allotment.

  The requirement of share qualification is relevant and material for maintaining the petition. The prima facie evidence to the shares could be either the share certificate(s) or even the register of members. However, even in the absence of share certificates or entry in the register of members, if a person could establish that certain shares have been allotted to him, then, for the purposes of Section 399 of the Companies Act, 1956, he could be treated as a member.

  In the case of Navin Ramji Shah v. Simplex Engineering and Foundry Works P. Ltd.[2006 (9) TMI 574 - COMPANY LAW BOARD NEW DELHI], it has been held that in family companies any reduction in the percentage of shareholding irrespective of quantum of percentage, the affected parties can always allege oppression as his position vis -a -vis other family members gets altered due to non -allotment of shares and in this case the petitioners have alleged that their 50 per cent, shareholding has been reduced to 26.6 per cent, besides that the transfer shown is fraudulent showing their 50 per cent, shareholding as reduced to nil.

  Thus the respondents' contention that before filing a petition u/s 397 and 398 of the Act the petitioners should seek the rectification of register of members under Section 111/111A of the Act is misplaced. In any case, this objection was not taken by the respondents in their reply. The petitioners have succeeded in making out a case that they held 50 per cent, shares in this closely held family company in the nature of quasi -partnership.

  The respondents' preliminary objection regarding non -maintainability of the company petition in terms of the requisite qualification u/s 399 is not tenable. The petition cannot be thrown out at the threshold.

  Acts of oppression and mismanagement - It is well -settled proposition that the provision of Sections 397 and 398 of the Act, are to be invoked to get the grievances of oppression and mismanagement redressed. The petitioner has rightly invoked the provisions of these sections. If a member who holds 50 per cent, of the shares in a company is reduced to the position of minority shareholder in the company by an act of the company or by its board of directors' mala fides, the said act must ordinarily be considered to be an act of oppression to the said member.

  Therefore, the allotment of shares impugned in the company petition made for personal gains and with a view to gain advantage against the other shareholders of a closely held company was neither in compliance with the legal requirements nor ensured the fair play and probity in corporate management, resulting in the enhancement of the shareholders of the second respondent, which would constitute an act of oppression.

  Quasi judicial authority - The Company Law Board is a quasi judicial authority exercising equitable jurisdiction. The court exercising equity jurisdiction, cannot ignore the well known maxims of equity. Two such maxims are that he who seeks equity must do equity and he who comes into equity must come with clean hands. I agree that it is a settled proposition of law that the conduct of the parties is a very relevant factor to be considered in equitable proceedings u/s 397.

  In Srikanta Datta Narasimharaja Wadiyar v. Sri Venkateswara Real Estate Enterprises P. Ltd.[1989 (4) TMI 268 - HIGH COURT OF KARNATAKA], it was held that the petitioner seeking equitable relief must come with clean hands and good conduct, failing which the petition would constitute a gross abuse of the process of the court, and the petitioner is not entitled for any relief u/s 397. It also held that the conduct of the parties in other proceedings could also be taken into consideration.

  The settled Principle of law is that when a person seeks equity he must come with clean hands. In the present case the instances of unclean hands of the respondents are with respect to the affairs of the company and even otherwise the instances of unclean hands are enumerated.

  The entire action of the respondents of removal from directorship and issue of additional shares was only to oust the petitioner and his wife from the company to illegally gain control and management of the company and is indisputably amenable to the jurisdiction of the Company Law Board. The petitioners are not seeking to enforce the family settlement dated September 26/27, 1987. The family settlement was referred to by the petitioners only to show that the intention of the family members was to have respondent No. 1 company in joint control. As mentioned in the memorandum of understanding the hotel business was not split.

  The respondents having failed to refute the allegations of the petitioners regarding the acts of oppression and mismanagement complained of in this petition and the petitioners having succeeded in making out their case distinguishing the case law relied upon by the respondents, there being no dispute with the principles laid down in those cases, but the facts of those cases being inapplicable to the facts of this case, each case turns on its own facts, to do substantial justice between the parties, I, hereby order as follows:

  (I) The petitioners' (petitioner No. 1 and petitioner No. 2) cessation/removal as directors, the petitioners did not cease to be directors, they were illegally removed from directorship, is hereby held as illegal, all resolutions and statutory forms filed in this regard are declared as null and void restoring status quo ante. Petitioner No. 1 and petitioner No. 2 continue to be the directors of respondent No. 1 company.

  (II) Increase in the authorised share capital and allotment of additional shares is hereby set aside being illegal, status quo ante is restored declaring the resolutions passed and the statutory forms filed as null and void.

  (III) since the respondents are still in possession of the share certificates of the petitioners, which amounts to an act of oppression, the respondents are hereby directed to hand over the same to the petitioners within two weeks of receipt of this order.

  Company Petition No. 47 of 2004 is hereby allowed and disposed of in the above terms. All company applications stand disposed of. All Interim orders stand vacated. No order as to costs.

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• 2009 (7) TMI 1313
  
  Issues Involved:
  1. Legality of the Memorandum dated 11th September 2003 issued by the Government of Meghalaya under Section 138(2)(b) of the Motor Vehicles Act, 1988.
  2. Authority of the State to collect fees without framing rules.
  3. Validity of fees collected by weighbridge operators and other entities.
  4. Right of truck owners under Article 301 of the Constitution.
  5. Jurisdiction of the High Court to direct the State to frame rules.
  
  Detailed Analysis:
  
  1. Legality of the Memorandum Dated 11th September 2003:
  The appeals arose from a judgment by the Gauhati High Court, which declared the Memorandum dated 11th September 2003 issued by the Government of Meghalaya illegal and directed the State to frame rules under Section 138(2)(b) of the Motor Vehicles Act, 1988. The High Court recognized the need for weighbridges but ruled that no fees could be collected without proper rules.
  
  2. Authority of the State to Collect Fees Without Framing Rules:
  The core issue was whether the State could issue an executive order for matters requiring rules. The Supreme Court noted that even if rules are required, the absence of rules does not invalidate actions taken under the statute. The statute remains workable without rules, and the executive order can fill the gap temporarily.
  
  3. Validity of Fees Collected by Weighbridge Operators and Other Entities:
  The High Court had identified numerous points where truck drivers were subjected to unauthorized tolls and fees. The Supreme Court emphasized that services provided by weighbridges are necessary for compliance with statutory obligations. The fees for these services are justified as long as they are reasonable and not exorbitant. The State has the power to authorize private parties to set up weighbridges and collect fees under regulated conditions.
  
  4. Right of Truck Owners Under Article 301 of the Constitution:
  The appellants argued that the lack of valid receipts from authorized weighbridge operators infringed their right to inter-state transport under Article 301 of the Constitution. The Supreme Court acknowledged that the right to trade and business must be balanced with statutory requirements for vehicle weight regulations.
  
  5. Jurisdiction of the High Court to Direct the State to Frame Rules:
  The Supreme Court addressed the High Court's jurisdiction to direct the State to frame rules. The State's executive power extends to matters where the legislature can make laws, and the executive can issue orders until rules are framed. The Supreme Court highlighted that the High Court should not have directed the State to frame rules without considering the State's response.
  
  Conclusion:
  The Supreme Court set aside the impugned judgment of the High Court, allowing the writ petitioners to file additional affidavits questioning the Memorandum's validity. The High Court was directed to give the State and other parties an opportunity to present their cases comprehensively. The appeals were allowed without costs.

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• 2009 (7) TMI 1312
  
  Supreme Court judgment in 2009 (7) TMI 1312 - SC Order by Mr. S.H. Kapadia and Mr. Aftab Alam, JJ. Delay condoned. Dismissed.

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• 2009 (7) TMI 1311
  

  Condonation of delay in filing first appeal - delay of 272 days - deficit court fees stamp - An application under Order VII Rule 11(c) was moved by the respondents seeking for rejection of the plaint urging for the first time that the suit presented on 5th October 1998 was barred by limitation as the extension of time granted by the trial court u/s 149 r/w Section 151 of the Code and condonation of delay in re-filing was passed without issuing notice to them. The appellant contested the said application by filing a counter affidavit thereto.

  The trial court dismissed the said application. Aggrieved thereby, the respondents preferred a Revision Petition under Article 227 of the Constitution of India before the High Court, which has been allowed by reason of the impugned judgment. Appellant is, thus, before us.

  HELD THAT:- Appellant while presenting the plaint inter alia contended that sufficient court fee stamps were not available in the sub-treasury. The Presiding Officers of the local Civil Courts in a given situation would be aware thereof. It may, therefore, consider the prayers made in that behalf by a suitor liberally. If court fees are not available in a sub-treasury for one reason or the other, the court having regard to the maxim ''lex non cogit ad impossibilia" would not reject such a prayer.

  Payment of court fees furthermore is a matter between the State and the suitor. Indisputably, in the event a plaint is rejected, the defendant would be benefited thereby, but if an objection is to be raised in that behalf or an application is to be entertained by the court at the behest of a defendant for rejection of the plaint in terms of Order VII rule 11(c) of the Code, several aspects of the matter are required to be considered.

  The respondents in their written statement did not raise any issue with regard to the correctness or otherwise of the orders dated 7th October, 1998, 8th November 1998, 20th November, 1998 and 21st January, 1999. Rightly or wrongly, the plaint was accepted. The deficit court fee has been paid. The court was satisfied with regard to the bona fide of the plaintiff. Hearing of the suit proceeded; not only issues were framed but the witnesses on behalf of the parties were also examined by both the parties. It is difficult to believe that from 10th January 2001 to 4th January 2008, the respondents or their counsel did not have any occasion to inspect the records. Any counsel worth itself would not only do so but even without doing so would address himself a question as to why a suit filed on 4th October 1998 was entertained in the year 2000. The suit was at one point of time decreed ex parte. The same was set aside on certain conditions. Evidently, the conditions laid down had been satisfied only upon obtaining an extension of time.

  Indisputably, the courts were required to assign reasons in support of their orders. Had the validity and/or legality of those orders been challenged before an appropriate court, it would have been possible by the plaintiffs to contend that the defendants had waived their right by their subsequent conduct and they would be deemed to have accepted the same. Even on later occasion, the courts would assign reasons upon satisfying itself once over again. If an order has been passed without hearing the one side, he may be heard but by reason thereof, the plaint would not be rejected outrightly. Before doing so, the applications of the plaintiff u/s 149 of the Code have to be rejected.

  It is now a well settled principle of law that an order passed by a court having jurisdiction shall remain valid unless it is set aside.

  Once the court granted time for payment of deficit court fee within the period specified therefor, it would have been possible to extend the same by the court in exercise of its power u/s 148 of the Code. Only because a wrong provision was mentioned by the appellant, the same, in our opinion, by itself would not be a ground to hold that the application was not maintainable or that the order passed thereon would be a nullity. An application for rejection of the plaint was filed only in the year 2008. Evidently, that was not the stage for entertaining the application. Order VII rule 11(c) of the Code could not have been invoked at that point of time.

  For the reasons aforementioned, the impugned judgment cannot be sustained. It is set aside accordingly. The appeal is allowed.

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• 2009 (7) TMI 1310
  
  The Bombay High Court dismissed two appeals for being delayed by 14 days without notice of motion or prayer for condonation of delay. The court cited a Supreme Court decision and ruled that it has no power to condone the delay in filing an appeal under section 260A of the Income Tax Act, 1961. No costs were awarded.

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• 2009 (7) TMI 1309
  
  Issues involved:
  The issues involved in the judgment are the clearance of boilers without payment of duty, availing CENVAT credit on input services, invocation of Rule 6(3)(b) of the CENVAT Credit Rules 2004, demand for 10% of the net sale price of exempted goods, interest levied, and the appeal by the assessee.
  
  Clearance of Boilers without Payment of Duty:
  During the period in dispute, the appellants had cleared boilers without payment of duty to BARC, Vishakapatnam, and Bombay. They had also availed CENVAT credit on some input services without maintaining separate accounts for these services. The Revenue invoked Rule 6(3)(b) of the CENVAT Credit Rules 2004 to demand 10% of the net sale price of the exempted goods and levied interest but did not impose any penalty. The appeal was made by the assessee against this decision.
  
  Decision and Reasoning:
  The Tribunal considered the submissions from both sides. It was noted that the assessee had reversed only a portion of the credit taken initially. However, the assessees claimed that they had since reversed the entire credit amount to which they were not eligible. Referring to previous decisions, including the Tribunal's decision in Mount Mettur Pharmaceuticals and the Hon'ble Gujarat High Court's decision in CCE Vs. Maize Products, it was held that the demand for 10% of the net sale price of the exempted goods is not sustainable if the entire credit has been reversed. The case was remanded to the adjudicating authority for verification of the claim that the entire credit had been reversed and to determine the liability for interest based on the credit balance in the account (RG 23A). Fresh orders were to be passed after providing the assessees with a reasonable opportunity to present their case.
  
  Conclusion:
  The appeal was allowed by way of remand for further verification and proceedings.

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• 2009 (7) TMI 1308
  
  Issues involved: Appeal u/s 78 of Gujarat Value Added Tax Act, 2003 regarding disallowance of consignment claim based on alleged fake declaration forms.
  
  Summary:
  The appellant, engaged in manufacturing and selling vegetable ghee and edible oils, consigned goods to agents in other states for sale on commission basis. Disputed consignment-transaction worth Rs. 17,14,47,155 was challenged due to alleged fake declaration forms. Despite appellant's claim of innocence and good faith, authorities found the forms to be bogus based on evidence from Sales Tax Authorities of other states. The Tribunal concluded that the appellant cannot evade tax liability even if deceived by commission agents.
  
  The Court upheld the Tribunal's decision, emphasizing that the assessing officer found the declaration forms to be fake and not obtained from the competent authority. Letters from Sales Tax Officers further confirmed the lack of genuine forms, leading to the dismissal of the appeal. The Court stated that it cannot reassess factual findings made by the authorities, and hence, no substantial question of law arose in this case. The appeal was dismissed, and the Civil Application was disposed of accordingly.

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• 2009 (7) TMI 1307
  
  Issues Involved:
  1. Imposition of penalty u/s 271(1)(c) for furnishing inaccurate particulars of income.
  2. Applicability of Explanation 1 to Section 271(1)(c).
  3. Distinction between assessment proceedings and penalty proceedings.
  4. Relevance of judicial precedents in penalty imposition.
  
  Summary:
  
  1. Imposition of penalty u/s 271(1)(c) for furnishing inaccurate particulars of income:
  The assessee appealed against the CIT(A)'s order confirming the penalty of Rs. 7,18,098 levied by the AO u/s 271(1)(c) for furnishing inaccurate particulars of income amounting to Rs. 23,66,343. The AO had added this amount under s. 68 of the IT Act, 1961, during the assessment proceedings, which resulted in a total income of Rs. 1,32,745 against the returned loss of Rs. 26,33,058.
  
  2. Applicability of Explanation 1 to Section 271(1)(c):
  The Tribunal examined Explanation 1 to s. 271(1)(c), which states that the amount added or disallowed in computing the total income shall be deemed to represent the income in respect of which particulars have been concealed if the assessee fails to offer an explanation or offers an explanation that is found to be false or unsubstantiated. The Tribunal noted that the presumption under Explanation 1 is rebuttable and not conclusive. The assessee had provided an explanation regarding the deposits, which was not proven false by the Revenue.
  
  3. Distinction between assessment proceedings and penalty proceedings:
  The Tribunal emphasized that assessment proceedings and penalty proceedings are distinct. The mere fact that an addition is made during assessment does not automatically lead to the imposition of penalty. The Tribunal cited the Gujarat High Court's decision in National Textiles v. CIT, which held that penalty cannot be imposed if the explanation is unproved but not disproved, and there is no material to show that the amount in question was the income of the assessee.
  
  4. Relevance of judicial precedents in penalty imposition:
  The Tribunal referred to various judicial precedents, including the Supreme Court's decision in Union of India v. Dharamendra Textile Processors, which held that penalty u/s 271(1)(c) is a civil liability and does not require mens rea. However, the Tribunal clarified that this decision does not imply that penalty is automatic upon addition. The Tribunal also discussed the Mumbai Bench-A's decision in Asstt. CIT v. VIP Industries Ltd., which reiterated that genuine claims for deductions, even if rejected, do not amount to concealment of income.
  
  Conclusion:
  The Tribunal concluded that the assessee had not furnished inaccurate particulars of income and had successfully rebutted the presumption of concealment. Therefore, the penalty imposed u/s 271(1)(c) was deleted, and the appeal was allowed.

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• 2009 (7) TMI 1306
  
  Supreme Court dismissed the appeal in the case with citation 2009 (7) TMI 1306 - SC. Judges were Mr. S.H. Kapadia and Mr. Aftab Alam.

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• 2009 (7) TMI 1305
  
  Issues involved: Alleged fraudulent availing of duty drawbacks leading to confiscation of goods and imposition of penalty under Section 113 of the Customs Act, 1962, appeal before CESTAT challenging the order-in-original, application under Section 129E for waiver of pre-deposit dismissed by CESTAT.
  
  Confiscation of Goods and Penalty Imposed:
  The petitioners availed duty drawbacks for purported exports, leading to a show cause notice alleging fraudulent activity and wrongful availment of duty drawbacks. The respondent passed an order-in-original holding the drawback amounts availed by the petitioners as inadmissible, with goods liable for confiscation under Section 113 of the Customs Act, 1962. Additionally, a penalty of &8377; 50,00,000/- was imposed. The petitioners appealed to CESTAT and filed an application under Section 129E seeking waiver of pre-deposit, which was dismissed by CESTAT, directing the petitioners to deposit the specified amounts within four weeks.
  
  Challenge to CESTAT Order:
  The petitioners contended that CESTAT did not consider the prima facie case and documents presented by them. However, the High Court disagreed, citing the impugned order where the Tribunal thoroughly examined the documents and arguments presented by both sides. The Tribunal found the Revenue's stand satisfactory, noting that the appellant failed to provide substantial evidence to counter the allegations. The High Court upheld the Tribunal's decision based on a prima facie view and consideration of relevant facts, including the interest of revenue as per Supreme Court judgments.
  
  Judicial Review and Dismissal of Petitions:
  The High Court declined to interfere with the CESTAT order under Article 226 of the Constitution of India, emphasizing that the Tribunal had considered all relevant aspects, including the interest of revenue. The Court directed that during the appeal hearing, the Tribunal should assess the submissions without being influenced by the observations in the impugned order. Ultimately, the petitions were dismissed, maintaining the status quo until the appeal hearing.

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• 2009 (7) TMI 1304
  
  Issues Involved:
  1. Legitimacy of proceedings u/s 263 of the IT Act.
  2. Allowability of deduction u/s 80-IB(10) of the IT Act.
  
  Summary:
  
  Issue 1: Legitimacy of proceedings u/s 263 of the IT Act

  The assessee, a registered partnership firm, filed a return of income showing "nil" for the asst. yr. 2003-04. The AO made an addition of Rs. 7,28,360 on account of interest income included in the deduction u/s 80-IB(10). The CIT issued a notice u/s 263, finding the assessment order erroneous and prejudicial to the interest of Revenue, and set aside the assessment order. The assessee appealed, arguing that the AO's order was neither erroneous nor prejudicial to the Revenue's interests. However, the Tribunal upheld the CIT's order, noting that the AO had not properly examined the books of accounts and documents, thus failing to apply his mind to the issue at hand.

  Issue 2: Allowability of deduction u/s 80-IB(10) of the IT Act

  The AO disallowed the deduction of Rs. 64,00,681 u/s 80-IB(10) for the asst. yr. 2004-05, arguing that the assessee was merely a contractor for OSHB, which had the project approval. The CIT(A) allowed the deduction, and the Revenue appealed. The Tribunal examined the agreement between the assessee and OSHB, noting that the assessee had a principal-to-principal relationship with OSHB and was not merely a contractor. The Tribunal found that the assessee undertook the development and building activity, was entitled to the sale proceeds, and fulfilled all conditions for the deduction u/s 80-IB(10). The Tribunal upheld the CIT(A)'s decision, referencing similar cases like Radhe Developers and Saroj Sales Organisation, where deductions were allowed under similar circumstances.

  Conclusion:

  Both the assessee's and the Revenue's appeals were dismissed. The proceedings u/s 263 were upheld as the AO failed to properly examine the issue, and the deduction u/s 80-IB(10) was allowed as the assessee fulfilled all necessary conditions and was not merely a contractor.

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• 2009 (7) TMI 1303
  
  The Supreme Court dismissed the appeal in the case with citation 2009 (7) TMI 1303. Judges were Mr. S.H. Kapadia and Mr. Aftab Alam.

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