Allowability of claim of bad and doubtful debts made in the return of income u/s 36(1)(vii) - HELD THAT:- From 1.4.1989, only the debts which is written as bad and doubtful is to be allowed as deduction u/s 36(1)(vii) of the act. It is the duty of the assessee to written off the debts and claim that it is deduction while computing the income. The provisions of sec. 36(1)(vii) has been amended by insertion of Explanation with retrospective effect from 1.4.1989 by Finance Act 2001 and as per this Explanation, bad debts written off in the accounts of the assessee shall not include in the provisions of bad and doubtful debts made in the accounts of the assessee.
Claim of the assessee that the bad debt was debited into the P&L Account and the same amount was reduced from the total loans and advances in Schedule VII in the balance sheet and it shall be allowed as deduction u/s 36(1)(vii) of the Act. In our opinion, the case of the assessee is squarely covered by the decision in the case of Vijaya Bank [2010 (4) TMI 46 - SUPREME COURT] and Kirloskar Systems Ltd[2013 (12) TMI 9 - KARNATAKA HIGH COURT] had considered similar issue. Being so, the case of the assessee is to be allowed. - Decided in favour of the assessee.
Demolition of the allegedly illegal constructions raised by the Appellants - Scope of Government's order - interpretation of statute - HELD THAT:- In the present case, the exercise of executive power is traceable to Entry 13 and 14 of List I of the Seventh Schedule to the Constitution. The power to give effect to the guidelines and to penalize violators thereof may not have been available at the time when the guidelines became effective. However, with the enactment of the Environment Protection Act, 1986 with effect from 19th November, 1986, Sections 3 and 5 empowered the Central Government to pass necessary orders and issue directions which are penal in nature. It is in the exercise of the said power under the Act read with the guidelines referred to above that the orders impugned by the Appellants have been passed. Though the Coastal Regulation Zone (CRZ) Notification under the Act was issued on 19th February, 1991 and admittedly is prospective in nature, till such time that the said notification came into force it is the guidelines which held the field being administrative instructions having the effect of law Under Article 73 of the Constitution.
A Govt. policy may acquire the "force of 'law'" if it conforms to a certain form possessed by other laws in force and encapsulates a mandate and discloses a specific purpose. It is from the aforesaid prescription that the guidelines relied upon by the Union of India in this case, will have to be examined to determine whether the same satisfies the minimum elements of law - In the absence of due authentication and promulgation of the guidelines, the contents thereof cannot be treated as an order of the Government and would really represent an expression of opinion.
It will not be necessary to notice the long line of decisions reiterating the aforesaid view. So far as the mode of publication is concerned, it has been consistently held by this Court that such mode must be as prescribed by the statute. In the event the statute does not contain any prescription and even under the subordinate legislation there is silence in the matter, the legislation will take effect only when it is published through the customarily recognized official channel, namely, the official gazette - If the guidelines relied upon by Union of India in the present case fail to satisfy the essential and vital parameters/requirements of law as the trend of the above discussion would go to show, the same cannot be enforced to the prejudice of the Appellants as has been done in the present case. For the same reason, the issue raised with regard to the authority of the Union to enforce the guidelines on the coming into force of the provisions of the Environment Protection Act so as to bring into effect the impugned consequences, adverse to the Appellants, will not require any consideration.
The orders impugned in the writ petitions filed by the Appellants cannot be sustained.
Disallowance u/s 14A read with Rule 8D - Grievance of the Revenue is that the ld. CIT(A) has held that when shares are kept as inventories disallowance u/s 14A of the Act is not called for - HELD THAT:- This issue is covered in favour of assessee by the decision of the Hon’ble Karnataka High Court in the case of CCI Ltd. vs JCIT [2012 (4) TMI 282 - KARNATAKA HIGH COURT] held that when the shares are not retained for earning the dividend income and the dividend income is incidental to its business of sale of shares disallowance u/s 14A of the Act is not called for. In this case also we find the ld. CIT(A) has held that when the shares were kept on trading account no disallowance us 14A of the Act is called for. We find that in such circumstances there is no infirmity in the order of ld. CIT(A) in view of the precedence as above. Furthermore the ld. CIT(A) has given a clear basis for the computation of disallowance confirmed by him. The Revenue has not been able to point out any infirmity in the same. Hence revenue’s claim that the ld. CIT(A) should not have held that shares held as stock in trade do not attract disallowance u/s 14A of the Act is not sustainable. Accordingly in the background of the aforesaid discussion and precedent we uphold the order of ld.CIT(A) on this account.
Disallowance under the head Penalty - Sum paid to Stock Exchange for delay in payment of the dues - HELD THAT:- We find that the ld. CIT(A) has passed an order following the decision of ITAT, Kolkata Bench. The Tribunal has clearly found that when sum have been paid to Stock Exchange for delay in payment of the dues and for various other obligations arising out of carrying on business activities, the penalty charges cannot be said to be for infringement of any law were paid to compensate for delay in payment of the dues to the Stock Exchange and for various other obligations. In these circumstances we do not find any infirmity in the order of the ld. CIT(A). Accordingly we uphold the same.
Government of India’s plan in fast-tracking criminal justice in the country - maximum period for which an under-trial prisoner can be detained - HELD THAT:- Having given our thoughtful consideration to the legislative policy engrafted in Section 436A and large number of under-trial prisoners housed in the prisons, we are of the considered view that some order deserves to be passed by us so that the under-trial prisoners do not continue to be detained in prison beyond the maximum period provided under Section 436A. We, accordingly, direct that jurisdictional Magistrate/Chief Judicial Magistrate/Sessions Judge shall hold one sitting in a week in each jail/prison for two months commencing from 1st October, 2014 for the purposes of effective implementation of 436A of the Code of Criminal Procedure. In its sittings in jail, the above judicial officers shall identify the under-trial prisoners who have completed half period of the maximum period or maximum period of imprisonment provided for the said offence under the law and after complying with the procedure prescribed under Section 436A pass an appropriate order in jail itself for release of such under-trial prisoners who fulfill the requirement of Section 436A for their release immediately.
The Jail Superintendent of each jail/prison is directed to provide all necessary facilities for holding the court sitting by the above judicial officers. A copy of this order shall be sent to the Registrar General of each High Court, who in turn will communicate the copy of the order to all Sessions Judges within his State for necessary compliance - the Home Secretary, Government of Jammu and Kashmir is directed to take immediate steps in respect of forwarding ’No Objection’ by the State Government to the Central Government for deportation of the prisoner-Hamid Numain Bhat, if it has decided not to challenge the discharge order. In that event, the ’No Objection’ shall be positively sent within four weeks. On receipt of ’No Objection’, if any, from the Government of Jammu and Kashmir, the Central Government shall take steps for his deportation as early as possible and in no case not later than four weeks from the date of receipt of the ’No Objection. Professor Bhim Singh, petitioner-in-person, invited our attention to the affidavit dated 16th July, 2013 filed on behalf of the Government of India by Mr. Vikas Srivastava in compliance of Order dated 08.05.2013.
Reduction in quantum of penalty u/s 117 of CA - Allegation of guilty of violating the Facility Notice - HELD THAT:- Perusing of copy of the Facility Notice No. 69/2011, it is found that it nowhere refers to the Section 141(2) of the Customs Act. Further, in the facts and circumstances, it is found that the show-cause notice is vague, as the gist of allegation and period is not found mentioned. The whole proceedings are vitiated for lack of proper show-cause notice.
Reopening of assessment u/s 147 - AO jurisdiction to issue notice - applicability of section 292B - HELD THAT:- Revenue has waited for the dismissal of the appeals by the ITAT and thereafter the revenue filed fresh appeals after delay of over 4 years. As a matter of fact even after receipt of the said order of the ITAT, the department has preferred appeal before the Hon’ble High Court of Calcutta, but the same has also been dismissed. The plea that dismissal of appeal by the tribunal and the Hon’ble High Court can give a person fresh cause of action circumventing the limitation period prescribed is not sustainable. Hence, now the department cannot come forward and claim that there is a mistake on the part of the revenue for not filing proper appeals 4 years ago. Hence, the delay of four year cannot be condoned on the facts and circumstances of the case.
Already dismissed the assessee’s appeal on the count of lack of jurisdiction. The tribunal has also considered the argument that section 292B can not be invoked as fundamental infirmities are not curable u/s. 292 B of the Act. As a matter of fact, the condonation of delay in this case would tantamount to unsettle the earlier order of the tribunal, which is certainly not permissible as per law. Furthermore, it is noted that the Hon’ble High Court of Calcutta has also dismissed the appeal by the revenue against the ITAT order. Hence, our action of condoning the delay of 4 years will also have the effect of rendering the Hon’ble High Court’s order as infructuous. This will be gross indiscipline on our part. Moreover, the case laws as relied on by the ld. Counsel of the assessee support the case of the assessee In these circumstances, in our considered opinion on the facts and circumstances of the case of the case the delay in filing the appeal over of over 4 years cannot be condoned. Hence, the appeals filed by the revenue are dismissed in limine.
MAT Computation - provision towards unidentified motor third party claim - whether an ascertained liablity to be deducted while computing the book profit under section 115JB as held by tribunal ? - HELD THAT:- Since we find that the learned advocate for the appellant/revenue has no instruction whether for the assessment years 1997-98,1998- 99,1999-2000 and 2001-2002 any appeal has been preferred on the same point and since it is well settled that it is not open to the revenue to challenge the correctness of the earlier assessment years without a just cause and as there is no substantial ground before us to differ from the position of law for the earlier assessment years in question, we are of the view that so far as the first question is concerned, it is not a substantial question of law.
Disallowance u/s 14A - HELD THAT:- since it is admitted by the learned advocate for the revenue that it stands covered by the order M/S. RR. SEN & BROTHERS (P) LTD. [2013 (7) TMI 260 - CALCUTTA HIGH COURT] against the revenue, the said question is answered in the negative and in favour of the assessee.
Deduction u/s 10B - Whether the telecommunication expenses, insurance charges, personnel expenses, professional expenses, branch office expenses and other expenses incurred in foreign exchange should not be excluded from the export turnover for the purpose of computing deduction under Section 10B of the Income Tax-Act, 1961? - If the said expenses are to be excluded from the export turnover, then the same should also be excluded from the total turnover for the purpose of computing deduction under Section JOB of the Income Tax Act, 1961? - Assessee contends that the assessee were entitled to the relief even on the alternative ground and if it is not considered, it is likely that the finding recorded by the Commissioner of Income Tax (Appeals) would stand, which may be held against them in future.
HELD THAT:- We deem it proper to remit these matters back to the Tribunal to record the findings on merit, even on the alternative ground also. We make it clear that while considering the said ground, it is open to the assessees to raise such additional grounds which they may choose so. Accordingly, these appeals are remitted back to the Tribunal for fresh consideration. All the contentions are kept open to be decided by the Tribunal. It is made clear that the tribunal shall also go into such other questions of law which may be raised by the assessees on such remand.
Unexplained expenditure of marriage of the daughter of the assessee - HELD THAT:- Under the provisions of section 158BC of the Act the un-disclosed income for the block period in the hands of the person searched is to be based on the evidence found during the course of search. In the case of the assessee a diary marked as Annexure A-7 was seized from the premises of the assessee and the said diary contained notings of various expenditure of various shoguns/gifts given to the near relatives of the son-in-law of the assessee. The assessee has totaled the said expenditure at page 4 of Annexure A-7 at ₹ 6,25,700/-. The assessee however, claimed that the same were proposed expenditure. We find no merit in the plea of the assessee in view of the fact that the marriage of the daughter of the assessee was solemnized and entries in the diary noted various shoguns/gifts given by the assessee. However, in all fairness, we restrict the addition to ₹ 3 lacs in the hands of the assessee.
Addition on account of marriage expenditure - HELD THAT:- AO rejected the claim of the assessee though a confirmation was filed with regard to the said gifts. The CIT (Appeals) had deleted the said addition. We are in conformity with the order of the CIT (Appeals) where confirmation of gifts has been filed by the assessee and it is customary that the gifts are received from the relatives at the time of marriage. Merely because the receipt was found from the possession of the assessee does not establish that the said titan watch was purchased by assessee. Accordingly, we delete the addition
Addition made on account of marriage expenses - CIT (Appeals) where the evidence in the form of invoices were found from the possession of the assessee and also in view of the fact that the marriage of the daughter of the assessee had been solemnized at Ahmedabad. The assessee in his statement had admitted that he and his relatives had traveled by air from Delhi to Ahmedabad for solemnizing the marriage of his daughter. Accordingly, we confirm the addition made on the basis of the evidence/invoices found during the course of search.
Addition on account of expenses on pre-marriage dinner at Chandigarh - AO in view of the list found estimated the expenditure @ ₹ 250/- per head and made addition of ₹ 75,000 plus estimated addition of ₹ 25,000/- on other arrangements like tent, lighting, etc. Thus an addition of ₹ 1 lac was made by the Assessing Officer, which was deleted by the CIT (Appeals). As pointed out by us in the paras hereinabove, this is the case of block assessment and addition can be made only on the basis of evidence found during the course of search. The present addition has been made on account of material list seized from the premises of the assessee, which in nowhere establish that the assessee had incurred the said expenditure. In the absence of any concrete evidence, we find no merit in the said addition of ₹ 1 lac and the same is deleted.
Addition on account of purchase of miscellaneous items for marriage - HELD THAT:- Addition as the papers depicted only estimated expenditure and in the absence of any evidence having been found of the expenditure being incurred i.e. in the form of any bills, receipts or payment slips, we find no merit in the said addition and we uphold the order of the CIT (Appeals) in deleting the aid of ₹ 33,025/-.
Addition on account of purchase of silver items/utensils - On the basis of Annexure A-12, page 20 seized from the residence of the assessee, which contained slip of purchases of silver items utensils at ₹ 29,800/-. The assessee failed to furnish any explanation and he same was added as the income of the assessee which was deleted by the CIT (Appeals). We do not confirm with the view of the CIT (Appeals) as the bills for purchase of silver items were found from the possession of the assessee and in the absence of any evidence to explain the source of investment, we reverse the order of the CIT (Appeals) and uphold the addition
Addition on account of stay at Ahmemdabad - HELD THAT:- Once the evidence of having incurred the expenditure has been found from the possession of the assessee and in the absence of any explanation as to the source of expenditure, the same constitute undisclosed income in the hands of the assessee. Accordingly, we confirm the addition of ₹ 21,097/- and reverse the order of the CIT (Appeals) in this regard.
Addition of marriage expenses at Ahmedabad and other miscellaneous expenses - The perusal of the order of the Assessing Officer reflects that the marriage expenses at Ahmedabad have been estimated by the Assessing Officer on the basis of the statement of the assessee that 150 persons had attended the function. Further other miscellaneous expenses have been estimated being customs. Undoubtedly the expenditure claimed to be incurred by the assessee are related to the marriage function. The total addition on account of marriage expenses had been made in the hands of the assessee at ₹ 3 lacs. Assessee fairly admitted hat the ends of justice would be met in case the said addition is restricted to ₹ 1 lac. In view thereof, we restrict the addition at ₹ 1 lac and partly allow the ground of appeal raised by the Revenue.
Un-explained expenditure under section 69C - In respect of the first addition of ₹ 18,000/-, wherein during the course of search evidence of payment of ₹ 18,000/- to Shri Kimat Rai Garg was found from the possession of the assessee and in the absence of any explanation as to the source, the said sum is to be treated as un-explained expenditure under section 69C of the Act relatable to the block period. However, we uphold the deletion of ₹ 2000/- being petty expenditure
Addition on account of unexplained gifts - The assessee before us had failed to bring on record any evidence to prove any evidence of relation with the said persons or the occasion on which the said gifts were given to the assessee. In the absence of the same and as the assessee had failed to prove the identity and creditworthiness of the said persons, we uphold the addition
Addition made on account of jewellery found from the possession of the assessee - HELD THAT:- As per the instructions issue by the CBDT, the search team is directed not to takek into account the jewellery taking into consideration the total numbers of the family wherein credit of 500 gms of jewellery is to be allowed to a married lady and 100 gms of jewellery is to be allowed on account of the male members and 250 gm of jewellery on account of unmarried female. The said instructions have been applied by various tribunals in determining the value of jewellery in the hands of the assessee. The family of the assessee considered of self, his wife and two sons. The assessee further claimed that his mother’s jewellery was also found but it is the finding of the Assessing Officer that the mother of the assessee was not staying in his house and hence, it could not be assumed that any jewellery belonging to her was available with him. We are in conformity with the findings of the Assessing Officer in this regard. We direct the Assessing Officer to allow the benefit of 500 gms of jewellery in the hands of the wife of the assessee and 300 gms of jewellery on account of the assessee and his two sons and thereafter compute the disallowance, if any, on account of jewellery found from the possession of the assessee.
Addition as cash payment - un-disclosed income of the assessee - HELD THAT:- Factum of receipts found from the possession of the assessee for the return of loan by the assessee to Shri Anil Oberoi. The said loan was returned in cash. The receipts were found from the possession of the assessee during the course of search carried out at the residential premises of the assessee on 20.7.2000 and the same evidences the transaction of payment of money by the assessee. The assessee had failed to offer any explanation vis-à-vis the source of the payment of said amount of ₹ 8 lacs repaid by the assessee.
No merit in the claim of the assessee that the loan of ₹ 8 lacs was still outstanding in its books of account and the books of account of M/s Oberoi Plastics Ltd. Further the un-disclosed income declared by Shri Ramesh NIkhanj and Shri H.S.Chadha, AOP had no relevance to the documents found in the case of the assessee. We reverse the order of the CIT (Appeals) and confirm the addition of ₹ 8 lacs made by the Assessing Officer.
Addition made on account of un-disclosed sale of eggs - HELD THAT:- As per section 158BC of the Act the computation of un-disclosed income of the block period shall be aggregate of the total income of the previous year falling within the block period, computed on the basis of evidence found as a result of search or requisition of books of account and/or other documents or information as is available with the Assessing Officer, reduced by the total income declared by the assessee. The basis for computing the un-disclosed income of the block period in the hands of any assessee is on the basis of the evidence found as a result of search.
The search operations were carried out at the premises of the assessee on 20.7.2000 and a spiral diary was impounded. However, the diary though had certain notings, but do not bear any date and it cannot be presumed that the said diary relate to the period prior to 20.7.2000 i.e. the date of search. The addition made on such surmises cannot stand and we confirm the order of the CIT (Appeals) in this regard.
The second aspect of the said addition was explanation given by the assessee during the appellate proceedings that even the total of the figures was incorrect and the Assessing Officer had failed to consider both the opening and closing stock while computing the sales in the hands of the assessee. The addition on this account also is deleted. The documents seized during the course of search at best are dumb documents and cannot be relied upon to make the aforesaid addition. Upholding the order of the CIT (Appeals) we dismiss the ground of appeal No.2 raised by the Revenue.
Undisclosed income for the block period on the perusal of certain documents seized - HELD THAT:- CIT(A) under the provision of section 250(6) of the I.T. Act is to pass a speaking order on the facts and circumstances before it. However, we find that the CIT(A) has failed to give a finding in respect of the issues raised before it except for upholding the claim of the assessee that all the above said amounts are included in the peak investment taxed in the hands of the AOP. The CIT(A) refers to the arguments of the assessee in respect of assessment years 1995-96 to 2001-02 being outside the purview provisions of Chapter XIV B, being worked out on hypothetical basis, and the deletion made by the CIT(A) is not appealed by the Revenue. In the interest of justice, we deem it fit to restore the issue back to the file of the CIT(A) to re-adjudicate the issues pointed out by us in paras 22 & 23 in line with our directions in the para hereinabove and after considering the facts and totality and after due verification of the details of peak investment worked out in the hands of the AOP, both in respect of the quantum and the persons whose income is included in such peak investments.
CIT(A) shall allow a reasonable opportunity of hearing to the assessee. It is clarified that issue raised before by the Revenue is only in respect of deletion of addition on account of interest earned for assessment years 1993-94 to 1995-96 and thus issues sent back to the file of CIT(A) are only in respect of the aforesaid assessment years. Ground No.2 raised by the Revenue is allowed for statistical purposes
TP Adjustment - comparable selection - HELD THAT:- Cross appeals, have become infructuous as upon remand, fresh order has been passed and in view of the findings recorded after adjustment of (+) (-) 5% as stipulated in proviso to Section 92CA(2) of the Income Tax Act, 1961 even if we do take into consideration the lease rental, the difference would be within permissible margin. These appeals are accordingly disposed of as infructuous.
Deduction by way of depreciation u/s 32(1) - in the earlier years and, therefore, the written down value on which depreciation was to be allowed for the year under consideration should have been higher to that extent - HELD THAT:- In the year in question the assessee has claimed depreciation and there is no question of thrust of any depreciation but its grievance is that the final orders of the earlier years which have not been properly implemented. The assessee desires there should be a specific direction to the Assessing Officer on this behalf so as not to disturb the finality of the orders of the orders of the earlier years. Departmental Representative on the other hand, has no objection if a specific direction is given to the AO. We, therefore, direct the Assessing Officer that the written down value as at the beginning of the year shall be computed only on the basis of the orders which have already reached the finality. In other words, the depreciation actually claimed or directed to be allowed only shall be taken into consideration before arriving the written down value of the assets in question.
Disallowance u/s. 14A r.w. Rule 8D(2)(iii) - HELD THAT:- A perusal of the cash flow statement at Annual report shows that the assessee had sufficient cash accruals from its own funds therefore we agree with the contention of the Ld. Counsel that no part of interest can be disallowed nor this issue is before us.
Disallowance of other direct or indirect expenditure, the assessee has computed the disallowance at ₹ 24,304/- by allocating the salary paid to junior accountant. We do not agree with this computation of disallowance by the assessee. It is an undisputed fact that investment is a policy decision taken by the Board of Directors at the highest level which requires lot of consultancy from various experts. Therefore, the disallowance u/s. 14A r.w. Rule 8D(2)(iii) becomes imperative, as the disallowance have been computed by the AO as per the applicable provisions of law. We do not find any reason to interfere with the disallowance.
Permission for adduction of evidence - dismissal of application by District Judge - HELD THAT:- The reasoning of the District Judge not permitting the petitioners to file their and witnesses affidavits in proof of the case and extending a corresponding opportunity to the defendants/respondents to place their evidence by affidavit is arbitrary and irrational. The approach of the District Judge in dealing with the I.A. is patently wrong and opposed to the settled principles of law.
Addition on the basis of inflated stock statement submitted to bank - Addition under Section 69B as per HC only on account of inflated statements furnished to the banking authorities for the purpose of availing of larger credit facilities, no addition can be made if there appears to be a difference between the stock shown in the books of account and the statement furnished to the banking authorities - HELD THAT:- Leave granted.
Allowability of marketing expenses - nature of the arrangement between the assessee company and the brand owners whereby the assessee was saddled with such marketing expenses - HELD THAT:- Appeal is, therefore, admitted on the following substantial questions of law.
1. Whether on the facts and in the circumstances of the case, the ITAT was correct in law in allowing the assessee's claim of marketing expenses for the period from 01-12-1997 to 31-8-1998 incurred by the assessee of ₹ 29,22,88,006/- disallowed by the assessing officer under section 37(1) of the Income Tax Act, 1961, the expenditures being not wholly and exclusively for the purpose of business of the assessee ?
2. Whether on the facts and in the circumstances of the case, the ITAT was correct in law in not appreciating the true nature of the arrangement between the assessee company and the brand owners whereby the assessee was saddled with such marketing expenses which are in fact and for all intent liability of the foreign company owning the brands and the trademarks ?
Dismissal of the suit for want of jurisdiction - whether suit could be filed by the plaintiff company against the defendant through one of the director without passing a specific resolution empowering a director to file a suit against a particular party and if no such resolution is passed, what is the consequence thereof? - Whether application under order 7 rule 11(d) was at all maintainable on the ground that suit was bad for want of specific resolution in favour of a director to file a such suit against the defendant company? - Whether defect if any was curable and plaint could not be rejected on that ground?
HELD THAT:- It is not in dispute that the defendant had already filed an application in the same suit in the year 2006 under order 7 rule 11(a) of the Code of Civil Procedure, 1908 relying upon the averments made in the plaint and inter alia praying that the plaint did not disclose any cause of action and was thus liable to be rejected. The defendant never raised any issue at that stage that the plaint itself was liable to be rejected on the ground that no specific resolution was passed by the company authorising the director to file specific suit against the defendant. The learned District Judge after considering the submission of both parties rejected application under order 7 rule 11(a) of the Code of Civil Procedure, 1908. It is not in dispute that the respondent did not challenge the said order passed by the District Court as far back as on 25th September 2006.
It is thus clear that the defendant had accepted the fact that no such specific resolution was required to be passed authorising a director to file specific suit against the defendant. The respondent not having raised such issue in the earlier application filed under order 7 rule 11(a) of Code of Civil Procedure, 1908 and having relied upon the plaint could not have file another application under order 7 rule 11(d) though earlier application having been rejected holding that the plaint disclosed cause of action.
Once the company had accepted and confirmed the authority granted to one of his Director to file such suit, the objection raised by the respondent was taken care of. The learned trial Judge therefore could not ignore such confirmation on the authority of the director or in the alternative ought to have render a finding about ratification by the board of the acts of its Director for filing such suit on behalf of the company. Be that as it may, the said affidavit itself was in the nature of a ratification by the board of the acts of the director who had filed and signed the plaint on behalf of the company.
Capital gain computation - reference of mater to DVO - assessee has adopted the value of the land as on 01-04-1981 - whether AO has power to refer the matter to the DVO for determination of the fair market value when the fair market value adopted by the assessee is more than the fair market value determined by the DVO? - HELD THAT:- As relying on M/S. PUJA PRINTS [2014 (1) TMI 764 - BOMBAY HIGH COURT] AO has no power to refer the matter u/s.55A for determining the fair market value of the property. Once the reference u/s.55A is held as not in accordance with law, the further exercise as done by the Ld.CIT(A) becomes academic in nature. We accordingly allow the grounds raised by the assessee in the appeal and dismiss the grounds raised by the Revenue.
Capital gain computation - adoption of sale consideration - HELD THAT:- Though the value determined by Stamp Valuation Authority would be helpful indicator to determine the fair market value as on the date of development but the same also cannot be taken as what was to be received by the assessee was specific quantity of area of developed property, the value of which will be different from the value of vacant land.
As per clause 18(a) the period of completion of project is mentioned as 48 months from the date of receipt of commencement certificate. The constructed area to be received by the assessee is in an undeveloped project which is yet to commence.
Therefore, the value which can be assessed as sale consideration in the hands of the assessee should be akin to the value of similar property in an underdeveloped project which was yet to commence and to be completed in 4 years from the date of commencement of the project as mentioned in the development agreement signed by the assessee. This factor was brought to the notice of both the parties during the course of hearing of the appeal and both of them have agreed that to determine the fair market value for the purpose of determining the sale consideration assessable as capital gain in the above manner, the matter may be restored back to the file of AO. Therefore, we restore the issue to the file of AO with a direction to determine the consideration on which the assessee is liable to pay capital gain as described in the manner aforesaid after giving the assessee a reasonable opportunity of hearing
Adoption of value determined by DVO as cost of acquisition - reference to DVO for the purpose of valuation - taking the cost of the property as on 1/4/1981 - HELD THAT:- Tribunal held that in view of section 55A(a) it was not permissible for the AO to make a reference to DVO for the purpose of valuation as the value of property declared by the assessee was more than its fair market value. Thus, the Tribunal accepted the contention of the assessee that indexed cost should be taken as per value determined by a Registered Valuer of the assessee. Such order of Tribunal was confirmed by their Lordships. Their Lordships also rejected the contention of the Department that in view of amendment to section 55A(a) the AO was authorized to refer the matter to the valuation officer. Respectfully following the aforementioned decision of Hon’ble Bombay High Court in the case of CIT vs. Puja Prints [2014 (1) TMI 764 - BOMBAY HIGH COURT] we decide this issue in favour of assessee and we hold that the indexed cost should be computed on the basis of valuation done by the Registered Valuer of the assessee i.e. by taking the cost of the property as on 1/4/1981 at a sum of ₹ 50,08,320/-. Ground No.5 of the assessee is allowed.
Review petition - Attachment orders - recovery proceedings - regularization of the sale seeked - disputed property was under the attachment of the Income Tax Department, which was sold for recovery of the outstanding dues of the Hindu Undivided Family of one Kirodimull Lohariwala - HELD THAT:- The income tax authorities in this application for review, also, maintains their stand that when the prayer for regularization of the sale was not granted by order dated 8th September, 1965 and this Court directed to sell the property in the best price, the sale in favour of Vasudeva was not final.
In our view, there are errors apparent on the face of record and the order dated 19th October, 2012 has to be reviewed. A Court reviewing an earlier order can pass an order in favour of the applicant. There is an error apparent on the face of record.
An error apparent on the face of record cannot be defined scientifically, precisely and exhaustively. It should be determined considering the facts of each individual case.
In the case in hand error is apparent and self-evident. A proper reading of the order dated 17th August, 2001, in M.A.T. no. 87 of 1999 reveals and it could not only reveal that the Appeal Court affirmed the order dated 20th November, 1998. Moreover, the private respondents in the application for special leave against order dated 17th August, 2001, inter alia, proceeded on the basis that the appeal against the said order was dismissed.
Therefore, the Vasudevas are not entitled from reagitating the dispute, which has been subject of a judicial decision earlier. The Vasudevas cannot turn around and take a contrary stand when the other party had accepted their reading and acted upon to their detriment.
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