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2010 (7) TMI 1157
Issues involved:
The issue involves the addition of Rs. 3,38,250 made by the Assessing Officer, challenged by the assessee in the appeal against the order of the CIT(A) relating to assessment year 2006-07.
Facts and Decision:
The Assessing Officer found that the assessee did not account for a bill of Rs. 3,38,250 issued to M/s. Ajmera Cement Pvt. Ltd. before 31.3.2004. The CIT(A) upheld the addition, stating that the income accrued to the appellant at the time of issuing the bill. The appellant contended that the bill was accounted for in the financial year 2004-05 when services were rendered. The Tribunal noted that the ship sailed on 1st April, 2004, and the income accrues when the right to receive it becomes vested. Referring to legal precedents and Accounting Standard 9, the Tribunal held that the income was correctly accounted for in the subsequent year and directed the Assessing Officer to delete the addition.
Conclusion:
The Appellate Tribunal ITAT, Mumbai allowed the appeal filed by the assessee, setting aside the order of the CIT(A) and directing the Assessing Officer to delete the addition of Rs. 3,38,250. The Tribunal considered the timing of the services rendered and the accrual of income in determining the correct assessment year for the disputed amount.
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2010 (7) TMI 1156
The Bombay High Court disposed of the Arbitration Petition according to the Minutes of Order dated 14.7.2010. Refund of Court fees granted as per rules.
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2010 (7) TMI 1155
Issues Involved:
1. Validity of Notification dated April 15, 2000.
2. Status and impact of the 1959 Scheme and 1993 Scheme on the Saharanpur-Delhi route.
3. Authority and scope of the Hearing Authority under Section 102 of the Motor Vehicles Act, 1988.
4. Applicability of Section 21 of the General Clauses Act, 1897.
Detailed Analysis:
1. Validity of Notification dated April 15, 2000:
The primary issue was whether the Notification dated April 15, 2000, rescinding the earlier Notification dated April 16, 1999, was legally valid. The appellants argued that once the Hearing Authority approved the proposed modification on October 11, 1999, it became a final order of the State Government under Section 102 of the Motor Vehicles Act, 1988, and could not be rescinded. However, the court found that the Hearing Authority was only empowered to hear objections and not to approve or modify the scheme. Therefore, the order dated October 11, 1999, was not a final order of the State Government. Consequently, the State Government was within its rights to rescind the Notification dated April 16, 1999, under Section 21 of the General Clauses Act, 1897.
2. Status and Impact of the 1959 Scheme and 1993 Scheme on the Saharanpur-Delhi Route:
The Saharanpur-Delhi route was nationalized under the 1959 Scheme, which excluded private operators except for 50 operators whose objections were upheld by the High Court. The 1993 Scheme further nationalized the route, freezing it against all private operators. The court reaffirmed that the 1959 Scheme remained effective and was not superseded by the 1993 Scheme. The appellants' permits, overlapping the Saharanpur-Delhi route, were invalid as they contravened the nationalized status of the route. The court held that the proposed modification in the 1993 Scheme was misconceived and meaningless as it did not seek to modify the 1959 Scheme.
3. Authority and Scope of the Hearing Authority under Section 102 of the Motor Vehicles Act, 1988:
The court examined whether the Hearing Authority's order dated October 11, 1999, could be considered a final order of the State Government. It was determined that the Hearing Authority was only authorized to hear objections and not to approve or modify the scheme. The principle that "a person who hears must decide" was acknowledged, but the limited authority given to the Hearing Authority could not be expanded based on this principle. Therefore, the Hearing Authority's order had no legal effect, and the State Government retained the power to rescind the Notification dated April 16, 1999.
4. Applicability of Section 21 of the General Clauses Act, 1897:
The court held that Section 21 of the General Clauses Act, 1897, which allows an authority to rescind or modify notifications, was applicable. The Notification dated April 15, 2000, rescinding the earlier Notification, was issued in the same manner as the initial Notification, fulfilling the requirements of Section 21. The argument that the draft Notification merged into the order dated October 11, 1999, was rejected. The court found no impediment for the State Government to exercise its power to rescind the Notification dated April 16, 1999.
Conclusion:
The Supreme Court upheld the validity of the Notification dated April 15, 2000, rescinding the earlier Notification dated April 16, 1999. The court concluded that the 1959 Scheme and the 1993 Scheme effectively nationalized the Saharanpur-Delhi route, excluding private operators. The Hearing Authority's order dated October 11, 1999, was not a final order of the State Government, and the State Government's power to rescind the Notification was validly exercised under Section 21 of the General Clauses Act, 1897. The appeals were dismissed with no order as to costs.
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2010 (7) TMI 1154
Issues Involved:
1. Entitlement of Tower Wagon Drivers (TWDs) to the same pay scale as Goods Drivers.
2. Legitimacy of the order dated 22nd February 2001 withdrawing the higher pay scale and directing recovery of excess amounts.
3. Jurisdiction of the Tribunal to examine the order passed by the Divisional Railway Manager.
Summary:
1. Entitlement of Tower Wagon Drivers (TWDs) to the same pay scale as Goods Drivers:
The respondents, working as TWDs under Eastern Railways, were promoted between 1979-1981 and claimed running allowance @ 120 k.m. per day in terms of para 3.12 of the New Running Allowance Rules. The High Court of Calcutta directed Eastern Railways to pay this allowance. Subsequently, Eastern Railways issued an order on 22nd February 2001 stating that higher pay scales were granted inadvertently and withdrew the same, directing recovery of excess amounts. The Tribunal found that TWDs were consistently treated at par with Goods Drivers and entitled to the same pay scale of Rs. 1350-2200/- (unrevised) w.e.f. 1.1.1986, and Rs. 5000-8000/- w.e.f. 1.1.1996. The Tribunal noted that the Railways failed to justify the decision to downgrade the pay scale and directed the continuation of the higher pay scale.
2. Legitimacy of the order dated 22nd February 2001 withdrawing the higher pay scale and directing recovery of excess amounts:
The Tribunal and the High Court found the order dated 22nd February 2001 to be arbitrary. The Tribunal observed that the respondents had been receiving the same pay scale as Goods Drivers for over 40 years, and there was no substantial difference in their duties and responsibilities. The Tribunal and the High Court rejected the Railways' contention that the higher pay scale was granted by mistake, noting the lack of cogent material to support this claim. The Tribunal emphasized that pay scales are a legitimate right of employees and cannot be varied without valid reasons and in accordance with law.
3. Jurisdiction of the Tribunal to examine the order passed by the Divisional Railway Manager:
The High Court upheld the Tribunal's jurisdiction to examine the order passed by the Divisional Railway Manager. The High Court found that TWDs were continuously treated as equivalent to Goods Drivers and there was no reason to treat them differently. The High Court rejected the Railways' contention that the Tribunal did not have jurisdiction to examine the order, affirming the Tribunal's decision.
Conclusion:
The Supreme Court dismissed the appeal, finding no legal infirmity in the judgments of the Tribunal and the High Court. The Court noted that the respondents had been treated as equivalent to Goods Drivers for a long period and there was no justification for altering their pay scale. The Court allowed the Union of India to pass an appropriate order regarding the pay scales of its employees afresh and in accordance with law, emphasizing the need for proper application of mind and consideration of appropriate material. The appeal was dismissed with no order as to costs.
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2010 (7) TMI 1153
Issues Involved:
1. Classification of accounts as Non-Performing Assets (NPA).
2. Compliance with Reserve Bank of India (RBI) guidelines.
3. Validity of the notice issued under Section 13(2) of the SARFAESI Act.
4. Borrowers' right to representation and objection under Section 13(3A) of the SARFAESI Act.
5. Judicial scrutiny of the bank's discretion in declaring NPAs.
Issue-Wise Analysis:
1. Classification of Accounts as Non-Performing Assets (NPA):
The petitioners, two companies engaged in the manufacture and export of readymade garments, challenged the classification of their accounts as NPAs by the respondent-bank. The court emphasized that for an account to be classified as an NPA, there must be a debt by a borrower from a secured creditor under a security agreement, a default in repayment, and the account must be classified by the secured creditor as an NPA. The court noted that the petitioners had overdue liabilities significantly exceeding their credit limits, justifying the bank's classification of their accounts as NPAs.
2. Compliance with Reserve Bank of India (RBI) Guidelines:
The court highlighted the importance of compliance with RBI guidelines in the classification of NPAs. It referred to the Supreme Court's judgment in Mardia Chemicals Ltd. v. Union of India, which stressed the need for transparency and adherence to RBI guidelines. The court noted that the RBI's prudential norms on income recognition, asset classification, and provisioning must be followed by banks. The court found that the respondent-bank had acted in accordance with these guidelines, as the petitioners' accounts had not produced income for more than 180 days, and there were defaults in repayment.
3. Validity of the Notice Issued Under Section 13(2) of the SARFAESI Act:
The petitioners contended that the notice issued under Section 13(2) of the SARFAESI Act was premature, as they were given time until 15.01.2010 to clear their liabilities, but the notice was issued on 04.01.2010. The court rejected this argument, noting that the overdue liabilities justified the bank's action. The court emphasized that the notice under Section 13(2) must provide details of the amount payable and the secured assets intended to be enforced, which the respondent-bank had done.
4. Borrowers' Right to Representation and Objection Under Section 13(3A) of the SARFAESI Act:
The court discussed the borrowers' right to make representations or objections to the notice issued under Section 13(2) of the SARFAESI Act. It referred to the Supreme Court's observation in Mardia Chemicals Ltd. v. Union of India, which led to the insertion of Section 13(3A) in the SARFAESI Act. This provision allows borrowers to make representations or objections, and the secured creditor must consider and communicate the reasons for non-acceptance within one week. The court found that the petitioners had made representations, but the respondent-bank had not accepted them, justifying its actions based on the overdue liabilities.
5. Judicial Scrutiny of the Bank's Discretion in Declaring NPAs:
The court emphasized that the bank's discretion in declaring an account as an NPA must be exercised judicially and supported by materials. It referred to the Supreme Court's judgment in Sardar Associates v. Punjab & Sind Bank, which held that RBI guidelines are binding on banks. The court found that the respondent-bank had acted reasonably and transparently in classifying the petitioners' accounts as NPAs, based on the available materials and adherence to RBI guidelines.
Conclusion:
The court dismissed the writ petitions, finding no merit in the petitioners' arguments. It upheld the respondent-bank's classification of the petitioners' accounts as NPAs and the issuance of notices under Section 13(2) of the SARFAESI Act. The court emphasized the importance of compliance with RBI guidelines and the judicial scrutiny of the bank's discretion in declaring NPAs. The court concluded that the respondent-bank's actions were neither arbitrary nor unreasonable.
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2010 (7) TMI 1152
Issues Involved:
1. Whether the appellant was entitled to deemed confirmation as a District Judge after completing the probation period.
2. Whether the discharge of the appellant from service was arbitrary and contrary to the rules.
3. The conduct of the appellant and the High Court's handling of the case, including the failure to produce records and the appellant's inclusion in the police "rowdy list".
Detailed Analysis:
1. Deemed Confirmation:
The appellant argued that he should be deemed confirmed as a District Judge after completing the probation period of two years, as per the Karnataka Judicial Services (Recruitment) Rules 1983 and the Karnataka Civil Service (Probation) Rules, 1977. The relevant rules state that the probation period cannot be less than two years and can be extended, but there must be a specific order declaring the probationer's satisfactory completion of the probation period. The Supreme Court held that there was no provision for automatic or deemed confirmation under these rules. Rule 5(2) specifically states that a probationer shall not be deemed to have satisfactorily completed the probation unless a specific order to that effect is passed. The Court found that the appellant had not received such an order and thus could not claim deemed confirmation.
2. Discharge from Service:
The appellant's discharge from service was challenged as arbitrary and contrary to the rules. The High Court had found that the appellant was unsuitable for the post, and this decision was based on the recommendations of a Sub-Committee of Hon'ble Judges. The Supreme Court upheld this decision, noting that Rule 6(1) of the 1977 Rules allows for the discharge of a probationer on grounds of unsuitability. The Court emphasized that the discharge was not stigmatic and was a discharge simpliciter. The appellant's service record did not reflect outstanding performance, and there were complaints against him. The Court concluded that the discharge was in accordance with the rules and did not require interference.
3. Conduct of the Appellant and the High Court:
The Supreme Court expressed concern over the contradictory statements made by the appellant in various affidavits and the High Court's failure to produce records despite specific orders. The appellant's name had been included in the police "rowdy list" prior to his appointment, which was a matter of serious concern. The Court noted that the High Court had not properly contested the case or pursued it in its correct perspective. The Court also criticized the High Court for not maintaining the expected standards of proper administration, including the timely recording of confidential reports of judicial officers. The Court directed the High Court to take corrective steps and ensure that police verification reports are received before appointing judicial officers.
Separate Judgments:
The judgment was delivered by Swatanter Kumar, J., with B.S. Chauhan concurring. There were no separate judgments delivered by the judges.
Conclusion:
The Supreme Court dismissed the appeal, holding that the appellant was not entitled to deemed confirmation and that his discharge from service was in accordance with the rules. The Court also highlighted the need for timely action by the authorities and issued directions to ensure proper administration and verification processes in judicial appointments. The appeal was dismissed with no order as to costs.
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2010 (7) TMI 1151
Issues Involved:
1. Unilateral writing down of assets as a grant or subsidy.
2. Treatment of the cost of removal of overburden of mines as deferred revenue.
3. Treatment of liability on account of "Employees Benefit Scheme" as deferred revenue.
4. Disallowance of PF dues under Section 43B of the Income Tax Act.
5. Treatment of bond issue expenses as deferred revenue expense.
6. Disallowance of interest payable to KFW Germany.
7. Depreciation on mining rights.
Issue-wise Detailed Analysis:
1. Unilateral Writing Down of Assets:
The assessee received loans from the Steel Development Fund (SDF) and the Government of India for acquiring plant and machinery. The loans were waived, and the assessee used the waived amount to write down the cost of its fixed assets. The Assessing Officer (AO) treated this as a grant or subsidy, reducing the depreciation allowance. The CIT (A) upheld this view, referencing Explanation 10 to Sec. 43(1) of the Income Tax Act, which states that the cost of assets met directly or indirectly by the Government should be reduced. The ITAT confirmed the AO's decision, citing previous decisions and legal precedents that support the reduction of the asset cost by the amount of the waived loan for depreciation purposes.
2. Cost of Removal of Overburden of Mines:
The AO treated the cost of removing overburden as deferred revenue expenditure, spreading it over five years. The CIT (A) upheld this decision, following previous years' rulings. However, the ITAT referenced a previous decision (ITA No.2782/Del/2004) which allowed such expenses as revenue expenditure in the year incurred. Consequently, the ITAT directed the AO to allow the expenditure in the year it was incurred.
3. Employees Benefit Scheme:
The AO treated the liability under the "Employees Benefit Scheme" as deferred revenue expenditure, allowing only 20% of it. The CIT (A) upheld this decision. The ITAT, referencing a previous decision (ITA No.2782/Del/2004), agreed with the AO, stating that the liability was ascertainable annually and should not be claimed in full in one go. Thus, the ITAT dismissed the assessee's appeal on this ground.
4. Disallowance of PF Dues under Section 43B:
The AO disallowed PF dues deposited beyond the due date but before the filing of the return. The CIT (A) upheld this decision. The ITAT, referencing the Supreme Court's decision in CIT vs. Vinay Cement Ltd. and CIT vs. Alom Extrusions Limited, ruled in favor of the assessee, allowing the PF dues as they were deposited before the return filing date.
5. Bond Issue Expenses:
The AO treated bond issue expenses as deferred revenue, allowing only 1/10th of the expenses under Section 35-D. The CIT (A) upheld this decision. The ITAT, referencing its previous decision (ITA No.2782/Del/2008), ruled in favor of the assessee, allowing the entire bond issue expenses as revenue expenditure in the year incurred.
6. Disallowance of Interest Payable to KFW Germany:
The AO disallowed 8% of the interest payable to KFW Germany, allowing only the remitted 0.75%. The CIT (A) upheld this decision. The ITAT, referencing its previous decision (ITA No.1927/Del/2004), ruled in favor of the assessee, directing the AO to allow the full interest at 8.75% as claimed.
7. Depreciation on Mining Rights:
The AO disallowed depreciation on mining rights, stating they were not enumerated as intangible assets under Section 32(1)(iii). The CIT (A) upheld this decision. The ITAT, referencing its previous decision (ITA No.1013/Del/2008), remanded the issue back to the AO to verify the acquisition date of the mining rights and determine if they qualify as intangible assets. The ITAT also directed the AO to consider if the expenditure could alternatively be treated as revenue expenditure.
General Grounds:
Grounds 8 and 9 were general in nature and did not require adjudication.
Conclusion:
The ITAT partly allowed the appeal for statistical purposes, providing specific directions on each issue based on legal precedents and statutory provisions.
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2010 (7) TMI 1150
Contempt petition for non-implementation - misappropriation the amount - Bank's Branch manager - the respondent was working as a Manager of the appellant's Branch. In a vigilance inspection, it was found that some 20 loans to the tune of ₹ 16.48 lacs were disbursed to some persons against FDRs though the FDRs were in the names of altogether different persons. It was also seen that the withdrawals which were allowed, were far in excess over the amounts in the FDRs. All those entries were in the hand-writing of the respondent.The High Court held that the documents produced were neither detailed nor their nature was explained. It further held that there was no discussion and much less any analysis of the evidence presented. The Court held that no specific finding has been recorded on the basis of the evidence to establish the guilt of the respondent. The absence of good reason was held to be in breach of the principles of natural justice. Therefore, the order was set aside. The High Court directed the appellant to reinstate the respondent though for the limited purpose of holding the inquiry afresh.
HELD THAT:- There was a clear documentary evidence on record in the handwriting of the respondent which established his role in the withdrawal of huge amounts for fictitious persons. The ledger entries clearly showed that whereas the FDRs were in one name, the withdrawals were shown in the name of altogether different persons and they were far in excess over the amounts of FDRs. The respondent had no explanation and, therefore, it had to be held that the respondent had misappropriated the amount. Inspite of a well reasoned order by the Inquiry Officer, the High Court has interfered therein by calling the same as sketchy. The High Court has completely overlooked the role of the bank manager as expected by this Court in the aforesaid judgments.
In these facts and circumstances, we allow this appeal and set aside the impugned judgment and order passed by the Division Bench of the Allahabad High Court. The petition filed by the respondent in the High Court will stand dismissed. Consequently, contempt proceedings initiated by him will also stand dismissed.
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2010 (7) TMI 1149
Issues Involved:
1. Challenge to the orders dated 2nd August 2001 and 4th December 2001 by the Settlement Commission.
2. Determination of customs duty liability for 7 shipments without export declarations.
3. Application of Rule 5(3) of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988.
4. Scope of the Settlement Commission's powers under Section 127C(7) of the Customs Act.
5. Judicial review of Settlement Commission's orders under Article 226 of the Constitution of India.
Detailed Analysis:
1. Challenge to the Orders Dated 2nd August 2001 and 4th December 2001 by the Settlement Commission:
The petitioners challenged the orders passed by the Settlement Commission, which settled the duty liability for 7 shipments at Rs. 23,01,077 instead of Rs. 3 lakhs as disclosed by the petitioners. The petitioners contended that the Settlement Commission did not adhere to the provisions of Rule 5(3) of the Valuation Rules, which mandates the use of the lowest transaction value for identical goods.
2. Determination of Customs Duty Liability for 7 Shipments Without Export Declarations:
The petitioners imported several consignments of electronic items during 1995-96. For 7 shipments, no export declarations were available. The Directorate of Revenue Intelligence (DRI) issued a show cause notice demanding customs duty based on alleged underinvoicing. The Settlement Commission, relying on the Tribunal's decision in Orson Electronics Pvt. Ltd., settled the duty liability at Rs. 23,01,077 for these 7 shipments.
3. Application of Rule 5(3) of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988:
Rule 5(3) stipulates that if more than one transaction value of identical goods is found, the lowest such value shall be used to determine the value of imported goods. The petitioners argued that the Settlement Commission should have adopted the lowest transaction value for the 7 shipments, which would amount to Rs. 3 lakhs. The Court agreed with the petitioners, emphasizing that the Settlement Commission must follow the Valuation Rules and adopt the lowest value.
4. Scope of the Settlement Commission's Powers Under Section 127C(7) of the Customs Act:
Section 127C(7) allows the Settlement Commission to pass orders as it thinks fit on matters covered by the application, in accordance with the provisions of the Act. The Court held that the Settlement Commission is bound to pass orders in accordance with the Valuation Rules, which are part of the Act. The Commission cannot ignore the mandatory requirement to adopt the lowest transaction value under Rule 5(3).
5. Judicial Review of Settlement Commission's Orders Under Article 226 of the Constitution of India:
The respondents argued that the High Court's power of judicial review is limited and the orders of the Settlement Commission are conclusive under Section 127J. However, the Court clarified that the orders of the Settlement Commission are amenable to writ jurisdiction and judicial review is permissible. The Court found that the Settlement Commission's decision-making process was not in accordance with the law, as it failed to apply Rule 5(3) of the Valuation Rules.
Conclusion:
The Court held that the orders dated 2nd August 2001 and 4th December 2001 by the Settlement Commission were arbitrary and perverse. The Court set aside the orders to the extent that the Settlement Commission settled the duty liability for 7 shipments at Rs. 23,01,077 instead of Rs. 3 lakhs. The Court allowed the writ petition and made the rule absolute, with no order as to costs.
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2010 (7) TMI 1148
Issues Involved:
The issue involves the extension of benefits of a customs duty notification to a company manufacturing hot-rolled coils and plates, the challenge of discriminatory treatment, and the retrospective application of the notification.
Extension of Benefit of Notification:
The Union of India appealed against a judgment extending the benefit of a customs duty notification to the respondents, despite a previous notification conferring similar benefits. The company imported metcoke between two notification dates and challenged the initial notification as arbitrary and discriminatory. The Single Judge directed authorities to consider exemption, but the benefit was not extended until a second notification. The Single Judge found the failure to extend the benefit discriminatory and ordered its extension from the initial notification date.
Strict Construction of Notifications:
The appellant argued that notifications granting exemptions must be strictly construed and benefits should not be extended beyond those included. They contended that if a notification is discriminatory, the court should quash it without extending benefits to petitioners. The appellant highlighted differences in manufacturing processes to justify the initial exclusion of the company from the benefit.
Discrimination and Benefit Extension:
The respondents supported the judgment, stating that if a notification is challenged for discrimination, the court should determine legality and quash it without extending benefits. They emphasized that in this case, once the benefit was extended to the company, discrimination ceased as both manufacturers belonged to the same class. The mistake in the initial notification was acknowledged, and the benefit was later extended to rectify the error.
Retrospective Application of Notification:
The court noted that the mistake in the initial notification led to the exclusion of the company, which was rectified in a subsequent notification. The court held that once the mistake was rectified, the company should receive the exemption from the initial notification date. The court dismissed the appeal, upholding the Single Judge's decision.
Refund Application and Order:
The respondents were permitted to file a refund application within four weeks due to the duty already paid. The court directed authorities to process the refund application promptly after its submission. No costs were awarded in the matter.
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2010 (7) TMI 1147
Issues involved: Assessment of interest income u/s Government orders, conversion of loan amount to equity, cancellation of interest income assessment by Tribunal.
In the judgment, the High Court of Kerala addressed the issue of assessing interest income u/s Government orders at the hands of the respondent-assessee, a Government of Kerala company. The company had given advances to two other companies under the control of the Kerala Government, and upon instructions from the Government, converted the loan amount to equity shares. The Tribunal had cancelled the assessment of interest income as there was no accrual or receipt of interest, considering the loans as advances made for investments in equity. The Court agreed with the Tribunal's finding, stating that as long as there was no evidence of interest accruing to the assessee, there was no basis for assessment. The Court dismissed all three appeals filed by the department, as the other questions raised were not considered by the Tribunal, and therefore did not arise from its orders.
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2010 (7) TMI 1146
Issues Involved:
1. Interim relief application under Order 39 Rules 1 and 2, CPC.
2. Application for vacating ex parte order under Order 39 Rule 4, CPC.
3. Application under Section 124(1) of the Trade Marks Act, 1999 for stay of proceedings pending rectification.
Detailed Analysis:
1. Interim Relief Application under Order 39 Rules 1 and 2, CPC:
The respondents/plaintiffs filed an application seeking interim relief to restrain the appellants/defendants from using the mark 'CLINIQ' or any mark similar to 'CLINIQUE'. An ex parte order was passed on 16.12.2008, restraining the appellants from marketing goods under the impugned trademark. The learned single Judge made this order absolute till the disposal of the suit, noting that the respondents were the registered proprietors of the trademark 'CLINIQUE' and other related marks since 1981. The Judge observed that the appellants' use of 'SKINCLINIQ' was not above board and raised doubts about their intentions, concluding that the test of infringement under Section 29 of the Trade Marks Act, 1999, was satisfied.
2. Application for Vacating Ex Parte Order under Order 39 Rule 4, CPC:
The appellants filed an application to vacate the ex parte order, arguing that their mark 'SKINCLINIQ' was not deceptively similar to 'CLINIQUE' and was used for different products. They highlighted the significant price difference between their products and those of the respondents, arguing that this would prevent consumer confusion. However, the learned single Judge dismissed this application, holding that the appellants' use of 'CLINIQ' was likely to cause confusion and that the respondents had made out a prima facie case for infringement.
3. Application under Section 124(1) of the Trade Marks Act, 1999:
The respondents also filed an application under Section 124(1)(ii) of the Trade Marks Act to stay the suit proceedings pending rectification proceedings for the cancellation of the appellants' trademark 'SKINCLINIQ'. The learned single Judge allowed this application, adjourning the suit proceedings to await the outcome of the rectification proceedings. However, during the appeal, it was agreed that the Section 124 issue would not be considered, focusing instead on the question of injunction.
Judgment Analysis:
The court compared the trademarks 'CLINIQUE' and 'SKINCLINIQ', noting that they were not identical. The test for deceptive similarity was applied, considering the overall structural and phonetic similarity from the perspective of an average consumer with imperfect recollection. The court found no overall structural or phonetic similarity between the marks when considered as a whole. It was noted that the appellants' mark 'SKINCLINIQ' should not be split into components ('SKIN' and 'CLINIQ') for comparison with 'CLINIQUE'. The significant price differential between the products further supported the conclusion that there was no likelihood of consumer confusion.
The court concluded that the learned single Judge erred in finding a prima facie case of infringement. Consequently, the appeal was allowed, the injunction granted by the learned single Judge was vacated, and the order allowing IA No. 15425/2008 and dismissing IA No. 217/2009 was set aside. The parties were left to bear their own costs.
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2010 (7) TMI 1145
Issues Involved: Petitioner's grievance regarding direction to deposit sale realization with Official Liquidator.
Summary:
The petitioner's senior counsel raised concerns regarding the direction in the impugned order of the DRT, upheld by the DRAT, instructing the deposit of proceeds from the sale of immovable property with the Official Liquidator. It was acknowledged that the petitioner is not a secured creditor for this amount, emphasizing that employee liens would take precedence. The counsel highlighted the absence of any verified claims from unsecured creditors despite prior advertisements. Any future claims would be treated on a pari passu basis with the petitioner's claim. The petitioner undertook to cover expenses for future advertisements from the funds in their possession. A notice was issued to show cause against the rule nisi, returnable on a specified date. The court stayed the direction for the petitioner to deposit sale proceeds with the Official Liquidator until the next hearing, with a copy of the order to accompany the notice.
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2010 (7) TMI 1144
Jurisdiction u/s 156(3) CrPC - the facts of the case, that suit for recovery of money filed by SEPCO is pending in the civil court and counter claim of the appellants is also pending in the same suit, proper course would be to appoint an arbitrator to resolve the dispute. However, according to him, instead of pursuing the said legal and contractual remedy, the respondent- SEPCO rushed to the Magistrate and the Magistrate committed an error in invoking jurisdiction u/s 156(3) of the Code by directing the Investigation Officer concerned to submit a charge sheet in the Court. He also submitted that inasmuch as the appellants, as on date, have repaid ₹ 10 crores as against the claim of ₹ 21 crores and made a counter claim for ₹ 10 crores, the criminal proceedings could be deferred till appropriate decision being taken in the civil proceedings. On the other hand, after taking us through the salient features in the complaint, specific allegations with reference to the criminality of the respondents, various terms of the contract and the conduct of the appellant in diverting the entire amount received for a different purpose and in view of the Sections 156(3) and 190 of the Code, the Magistrate is well within his powers to pass the impugned order and the same has been rightly considered and approved by the learned single Judge and Division Bench of the High Court contended that there is no merit in the appeal filed by the appellants. Hence this appeal.
HELD THAT:- In the instant case the Magistrate did not apply his mind to the complaint for deciding whether or not there is sufficient ground for proceeding; but only for ordering an investigation u/s 156(3). He did not bring into motion the machinery of Chapter XV. He did not examine the complainant or his witnesses u/s 200 CrPC, which is the first step in the procedure prescribed under that chapter. The question of taking the next step of that procedure envisaged in Section 202 did not arise. Instead of taking cognizance of the offence, he has, in the exercise of his discretion, sent the complaint for investigation by police u/s 156.
In the facts and circumstances, it cannot be said that while directing the police to register FIR, the Magistrate has committed any illegality. As a matter of fact, even after receipt of such report, the Magistrate u/s 190(1)(b) may or may not take cognizance of offence. In other words, he is not bound to take cognizance upon submission of the police report by the Investigating Officer, hence, by directing the police to file chargesheet or final report and to hold investigation with a particular result cannot be construed that the Magistrate has exceeded his power as provided in Sub-section 3 of Section 156. Neither the chargesheet nor the final report has been defined in the Code. The chargesheet or final report whatever may be the nomenclature, it only means a report u/s 173 of the Code which has to be filed by the police officer on completion of his investigation. In view of our discussion, in the case on hand, we are satisfied that the Magistrate in passing the impugned order has not committed any illegality leading to manifest injustice warranting interference by the High Court in exercise of extraordinary jurisdiction conferred under Article 226 of the Constitution of India. We are also satisfied that learned single Judge as well as the Division Bench rightly refused to interfere with the limited order passed by the Magistrate. We also hold that challenge at this stage by the appellants is pre-mature and the High Court rightly rejected their request.
we are in agreement with the order passed by the learned single Judge of the High Court of Chhattisgarh as well as the order passed by the Division Bench of the High Court of Chhattisgarh. As on date there is no impediment for the police to investigate and submit report as directed in the order dated 04.07.2009 by Chief Judicial Magistrate. Interim orders in respect of all the proceedings including the order passed by the High Court of Andhra Pradesh are vacated and both parties are at liberty to pursue their remedy in the pending proceedings in accordance with law.
In the result, the appeal arising out of SLP of Srinivas Gundluri and Ors. (SSVG) is dismissed and the appeal arising out of SLP (Crl.) filed by SEPCO is allowed to the extent indicated.
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2010 (7) TMI 1143
Issues involved: Appeal against ad interim ex parte order dated April 23, 2009, and the appellant being kept out of the market on the basis of the ex parte order.
Summary:
The Securities Appellate Tribunal heard the appeal against the ad interim ex parte order dated April 23, 2009. The appellant's primary grievance was that no further steps had been taken by the respondent Board since the order, resulting in the appellant being excluded from the market. The appellant had filed a reply to the ad interim order, treated as a show cause notice. During the preliminary hearing on July 23, 2010, the respondent Board presented an order confirming the ex parte order. Upon inspection of the order, it was found to be a reproduction of the earlier order. The respondent Board served the appellant with a show cause notice based on an inspection and obtained the appellant's reply. The designated authority recommended a warning penalty to the appellant, but the designated member disagreed with the findings and was proceeding further. The Tribunal decided that the interim order against the appellant should not continue, and directed that the operation of the order dated July 20, 2010, remain stayed during the appeal's pendency. The original file was returned to the respondent Board to be produced at the final hearing.
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2010 (7) TMI 1142
Issues Involved:
1. Whether the Noticee failed to exercise due care, skill, and diligence while executing trades for its clients, violating Clause A(2) of SBSB Regulations.
2. Whether the violations, if any, attract any monetary penalty u/s 15HB of SEBI Act.
3. Determination of the monetary penalty considering factors mentioned in Section 15J of SEBI Act, 1992.
Summary:
Issue 1: Failure to Exercise Due Care, Skill, and Diligence
Investigations by SEBI revealed that a group of connected clients traded significantly in the scrip of Karuna Cables Ltd. (KCL), leading to allegations against Indiabulls Securities Ltd. (Notice) for failing to exercise due care, skill, and diligence. The Notice argued that it had no reason to suspect its clients' intentions, as they had complied with KYC requirements and traded in various other scrips. The Notice also highlighted that it merely acted as an agent, executing trades based on client instructions without any proprietary trading in KCL.
Issue 2: Attraction of Monetary Penalty u/s 15HB of SEBI Act
The adjudicating officer considered whether the Notice's actions warranted a monetary penalty. The Notice contended that it had adhered to client instructions in the normal course of business and had no prior understanding with the connected clients to manipulate the scrip. The officer noted the absence of substantial evidence proving the Notice's involvement in manipulation or any connection beyond the client-broker relationship.
Issue 3: Determination of Monetary Penalty
The adjudicating officer examined the relevant legal provisions and case laws cited by the Notice. It was concluded that the Notice had acted reasonably and prudently, as required by law. The officer found merit in the Notice's submissions and determined that the charges of failing to exercise due skill, care, and diligence were not substantiated.
Conclusion:
The adjudicating officer concluded that the charges against the Notice did not stand established. Therefore, no monetary penalty was imposed. The decision was made u/s 15-I(2) of the SEBI Act, 1992, and a copy of the order was sent to the Notice and SEBI.
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2010 (7) TMI 1141
Issues Involved:
1. Challenge to the orders dated 2nd August, 2001 and 4th December, 2001 passed by the Settlement Commission.
2. Determination of customs duty liability for 11 shipments without export declarations.
3. Applicability of Rule 5(3) of the Customs Valuation Rules, 1988.
4. Maintainability of the petition before the Settlement Commission.
5. Scope of High Court's power of judicial review over Settlement Commission's orders.
Issue-wise Detailed Analysis:
1. Challenge to the Orders of the Settlement Commission:
The petitioner challenged the orders dated 2nd August, 2001 and 4th December, 2001 passed by the Settlement Commission. The main contention was that the Settlement Commission settled the duty liability for 11 shipments at Rs. 21,35,879/- instead of the Rs. 6 lakhs disclosed by the petitioner, which was based on the lowest transaction value of identical goods as per Rule 5(3) of the Customs Valuation Rules.
2. Determination of Customs Duty Liability for 11 Shipments:
The petitioner imported electronic items during 1995-96. The Directorate of Revenue Intelligence (DRI) investigated under-invoicing and issued a show cause notice demanding Rs. 53,97,827/- for 31 shipments and Rs. 21,35,879/- for 11 shipments without export declarations. The petitioner admitted additional duty liability of Rs. 41,62,860/- for the 31 shipments, which was recalculated based on actual freight and insurance. The Settlement Commission accepted this recalculated amount with a minor correction, settling it at Rs. 42,22,107/-, which was paid by the petitioner.
For the 11 shipments, the petitioner initially did not accept any duty liability but later offered to pay Rs. 6 lakhs based on the lowest transaction value of identical goods. However, the Settlement Commission settled the duty at Rs. 21,35,879/- based on the decision in Orson Electronics Pvt. Ltd. v. Collector of Customs, 1996 (82) E.L.T. 499, and imposed a penalty of Rs. 1 lakh while granting immunity from interest and prosecution.
3. Applicability of Rule 5(3) of the Customs Valuation Rules, 1988:
The petitioner argued that as per Rule 5(3), the lowest transaction value of identical goods should be used to determine the value of imported goods. The petitioner cited various Tribunal decisions supporting this interpretation. The Settlement Commission, however, did not apply Rule 5(3) and instead relied on the decision in Orson Electronics, which the petitioner contended was inapplicable as it did not consider Rule 5(3).
4. Maintainability of the Petition Before the Settlement Commission:
The respondents argued that the petitioner's application was not maintainable as it did not disclose the duty liability for the 11 shipments initially. They contended that the petitioner, having opted for settlement, could not selectively accept parts of the Settlement Commission's order. The High Court, however, found this argument untenable, noting that the petitioner made a further disclosure of their additional duty liability for the 11 shipments during the settlement process.
5. Scope of High Court's Power of Judicial Review:
The respondents claimed that the High Court's power of judicial review was limited and that the Settlement Commission's orders were conclusive under Section 127J of the Customs Act. The High Court disagreed, citing the Supreme Court's decision in Jyotendrasinhji v. S.I. Tripathi, which allows judicial review of Settlement Commission's orders under Article 226 of the Constitution of India. The High Court found that the Settlement Commission did not follow Rule 5(3) of the Valuation Rules, making its decision arbitrary and perverse.
Conclusion:
The High Court set aside the orders dated 2nd August, 2001 and 4th December, 2001 to the extent that the Settlement Commission settled the duty liability for 11 shipments at Rs. 21,35,879/- instead of Rs. 6 lakhs. The Court held that the Settlement Commission must follow the provisions of Rule 5(3) of the Valuation Rules, which mandate adopting the lowest transaction value for identical goods. The petition was allowed, and the rule was made absolute with no order as to costs.
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2010 (7) TMI 1140
Application u/s 482 of the CrPC - quashing the issuance of process by the Magistrate - Section 138 of the NI Act - HELD THAT:- I am of the view that the said provision may not apply to the provisions of Negotiable Instruments Act and merely because the accused reside outside the jurisdiction of the court, in each and every case it is not necessary for the Magistrate to postpone the issuance of process. The Magistrate, in my view, can exercise his discretion and decide whether to issue process, dismiss the complaint after recording the verification of the complainant and his witnesses, if any, or postpone the issuance of process and in a given case hold a further inquiry, depending on facts and circumstances of each case and non-compliance of the said provision would not vitiate the issuance of process if there is material to indicate that there has been an application of mind on the part of the Magistrate after going through the verification and other material brought on record by the complainant.
In the present case, large number of applications have been filed u/s 482 of the CrPC, alleging non-compliance of the provisions of section 202 and a relief is claimed that the process issued by the Magistrate may be quashed. If there are conflicting judgments of the same High Court, it would create uncertainty in the mind of the learned Magistrate regarding course of action which has to be followed by him and, therefore, in my view, this is an important issue which needs to be finally resolved by the Division Bench or larger Bench of this Court.
Office is directed to place the judgment and order of this Court before Hon’ble the Chief Justice.
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2010 (7) TMI 1139
Issues Involved:1. Delay in filing the application for restoration. 2. Restoration of the petition. 3. Challenge to the order of the Appellate Tribunal for Forfeited Property under SAFEMA. 4. Validity of the second detention order under COFEPOSA. 5. Legality of the forfeiture of properties under SAFEMA. 6. Procedural irregularities and burden of proof under SAFEMA. 7. Subsequent developments and mortgage of the property. 8. Merits of the contentions raised by the Petitioner. Summary:1. Delay in Filing the Application for Restoration:Having heard learned counsel for the parties and for the reasons stated therein, the delay in filing the application for restoration is condoned. 2. Restoration of the Petition:Having heard learned counsel for the parties and for the reasons stated therein, the petition is restored to its file. 3. Challenge to the Order of the Appellate Tribunal for Forfeited Property under SAFEMA:The challenge in this petition is to an order dated 14th August 2000 passed by the Appellate Tribunal for Forfeited Property dismissing the Petitioner's Appeal No. 48/B/BOM/99 thereby affirming an order dated 22nd November 1999 passed by the Competent Authority, Mumbai u/s 7 and 19 of SAFEMA. 4. Validity of the Second Detention Order under COFEPOSA:On 3rd June 1991 a detention order was passed against the Petitioner u/s 3(1) COFEPOSA. The detention order was revoked on 5th August 1996. However, a second detention order dated 5th October 1995 was passed against the Petitioner u/s 3(1) COFEPOSA. 5. Legality of the Forfeiture of Properties under SAFEMA:The Competent Authority issued a show cause notice on 31st December 1997 u/s 6(1) SAFEMA to the Petitioner asking him to explain the source of his income, earnings, or assets out of which he had acquired the properties mentioned in the schedule enclosed with the notice. 6. Procedural Irregularities and Burden of Proof under SAFEMA:The Competent Authority passed an order u/s 7 and 19 SAFEMA holding that the properties mentioned in the notice dated 31st December 1997 were acquired by the Petitioner and his wife through prohibited means of income in terms of FERA and Customs Act 1962 and were, therefore, illegally acquired properties. 7. Subsequent Developments and Mortgage of the Property:The Petitioner mortgaged the flat at 7-B, Tirath Apartments, Andheri (West) with UCO Bank, Churchgate Branch, Mumbai in the year 2000 while obtaining financial assistance to the extent of Rs. 1 crore by depositing the original title deeds in respect of the said flat with the said Bank. The Petitioner failed to repay the loan, leading to proceedings under SARFAESI Act by UCO Bank. 8. Merits of the Contentions Raised by the Petitioner:The Petitioner claimed that the second detention order dated 5th October 1995 was not based on any fresh material but on the same material on which the earlier detention order was based. The Petitioner also claimed to have discharged the initial burden of proof to explain the sources with which the above properties were acquired. Court's Conclusion:With the detention order dated 5th October 1995 having become final, it validly formed the basis for initiation of the forfeiture proceedings. The burden of showing the sources from where the Petitioner was able to legally acquire the property in question had to be initially discharged by the Petitioner. The detailed orders passed by the Competent Authority and the Appellate Tribunal on facts have not been shown by the Petitioner to be either perverse or not based on relevant material. Given the limited scope of the powers of this Court under Article 226 of the Constitution, it is not possible to accept the submission of learned counsel for the Petitioner that the impugned orders of the Competent Authority and the Appellate Tribunal are perverse or contrary to law. Final Order:This Court finds no ground to interfere in the matter. The writ petition and the pending applications are dismissed. The interim order stands vacated.
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2010 (7) TMI 1138
Issues involved:
The appeal concerns the entitlement of the assessee for exemption u/s 54 and 54F of the Income-tax Act, 1961 in relation to capital gains from the sale of a property at Poes Garden, Chennai, and land at Madambakkam.
Summary:
1. The Revenue contended that the assessee's agreement with the builder before the property sale disentitled the exemption claim u/s 54 or 54F. The Revenue objected to the application of Circular No.667 by the CIT(A).
2. The assessee sold a house at Poes Garden, Chennai, and land at Madambakkam, claiming exemption u/s 54 and 54F for investing in a house at Ranjit Road, Kotturpuram. The Assessing Officer rejected the claim, stating that construction started before the sale of properties.
3. The CIT(A) upheld the exemption claim based on the investment in the land at Ranjit Road, Kotturpuram, despite rejecting the agricultural nature of the land at Madambakkam.
4. The Departmental Representative argued that construction began before the sales, challenging the CIT(A)'s decision based on transaction dates.
5. The authorized representative emphasized that the land registration post-sale justified the exemption claim, citing relevant court decisions.
6. The Tribunal found the assessee eligible for exemption u/s 54 and 54F, noting the registration date of the land and the intention to purchase a flat rather than self-construction. The Tribunal upheld the CIT(A)'s decision, dismissing the Revenue's appeal.
In conclusion, the Tribunal upheld the assessee's entitlement to exemption u/s 54 and 54F, emphasizing the registration date of the land and the intention to purchase a flat rather than self-construct, in line with relevant court decisions and Circular No.667.
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