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2020 (11) TMI 1127
TP adjustment entered with Associated Enterprises in USA has been resolved in terms of the MAP proceedings and, therefore, the said grounds may be allowed to be withdrawn. In view of the aforesaid submission, the said Grounds of Appeal Nos.1 to 9 are dismissed as withdrawn.
TP Adjustment made to the transactions entered with Non-USA entities, Non-grant of deduction u/s 10A/10AA in respect of interest income and Short grant of credit for TDS/Advance Tax and determination of total income and interest are concerned, the say of the learned representatives is that the assessee is contemplating to settle the dispute under The Direct Tax Vivad se Vishwas Act, 2020 - In view of the submissions made, the appeal is consigned to records and treated as dismissed.
However, the aforesaid is subject to a caveat that in case the dispute relating to tax arrears for the captioned assessment year is not ultimately resolved in terms of the aforestated Act, the appellant (i.e., the assessee) shall be at liberty to approach the Tribunal for reinstitution of the appeal and the Tribunal shall consider such application appropriately as per law. The respondent (i.e., the Revenue) has no objection with regard to the aforesaid caveat.
Appeals of the assessee are dismissed.
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2020 (11) TMI 1126
The High Court of Delhi allowed the petitioner's plea for the release of GST refund of Rs. 37,56,750 with interest. The respondents agreed to process the claim within three weeks, leading to the disposal of the writ petition.
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2020 (11) TMI 1125
Exemption u/s 11 denied - income generated by the assessee, who is registered u/s 12A from the business of Chitty/Kuri - HELD THAT:- We pertinently have to notice that even in Surat Art Silk Manufacturers' Association the distinction as to a business held under Trust or carried on by it was noticed in the minority judgment without any clarification as to what would be the consequence of the distinction in the later instance. All the decisions cited, wherein business in kuries was mentioned as an object in the Memorandum of Association, were held to be business held under trust. The kuri business here too, has to be hence found to be a business held under trust. Sub-section (4) of Section 11 makes any business held under trust to be property held under trust for the purposes of this section.
Hon'ble Supreme Court in Thanthi Trust [2001 (1) TMI 80 - SUPREME COURT] held that if the income from the business is utilized for achieving the objectives of the trust or institution, then it is incidental to the attainment of the objectives of the Trust. We have to follow the above dictum of the Hon'ble Supreme Court which is binding on us under Article 141 of the Constitution of India. The observation of the Delhi High Court: It would in our opinion be disastrous to extend the sweep of the observations made by the Supreme Court (quoted above) in the case of Thanthi Trust (supra), on the facts of that case, to all cases where the trust carries on business which is not held under trust and whose income is utilised to feed the charitable objects of the trust'; according to us, does not subserve judicial discipline.
We are of the opinion that the first Proviso brought in the same effect as spoken of in Dharmaposhanam, on exemption which respect to carrying on a public utility. But 'medical relief' is not qualified with those words; as has been found in Dharmadeepti as affirmed in Surat Art Silk Manufacturers' Association [1979 (11) TMI 1 - SUPREME COURT] On the above reasoning we answer the question of law in the negative and in favour of the assessee and against the Revenue.
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2020 (11) TMI 1124
Income from house property - Determination of Annual Lettable Value - Determination of deemed rental income for property let out to multiple tenants - AO has noted that assessee letting out different sections of the same complex to three different parties and he has received rental income from these parties, therefore the AO has asked the assessee to explain why the deemed rent receivable by the property u/sec. 23(1)(a) should not be estimated - CIT(A) deleted addition - HELD THAT:- The assessee is having a commercial complex and same is let out to 03 different parties and receiving rental income as per the agreement entered with the tenants.
The case of the AO is that the rent received by the assessee is very low and he should have been received more than what is received. The case of the assessee is that he is receiving the rental income as per the terms and conditions stipulated in the agreement. It is not the case of the AO that the amount received is more than what is stated in the agreement.
It is also the case of the assessee that the property is old property and leased out for a long period and continuous occupation of the tenants, therefore no deemed rent can be invoked as per section 23(1)(a) - AO not agreed with the explanation of the assessee and invoked section 23(1)(a) and estimated the deemed rental income.
Deeming provision of Section 23(1)(a), in the case of let out property, only the actual rent received was required to be considered as annual value of properly.
AO failed to appreciate such estimation of annual letable value as per provision of Section 23(1)(a) was, called for only in case of vacant property and not where the properly was actually let out since in the case of let out property, the assessee was not entitled to anything over and above the agreed rent. The said action of the AO has resulted in taxing notional income in the hands of the assessee, which never accrued and hence cannot be brought to tax. Thus respectfully following the decision of Oberoi Hotels Pvt. Ltd [2016 (1) TMI 169 - ITAT KOLKATA] we find no infirmity in the order passed by the ld. CIT(A). Thus, this appeal filed by the Revenue is dismissed
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2020 (11) TMI 1123
Wilful defaulter - unlawful notice or not - case of the petitioner is that show cause notices were issued to the petitioner on 13.03.2020 and 31.10.2020 to show as to why the petitioner should not be declared as a wilful defaulter - HELD THAT:- Admittedly, somewhat identical matter had come up before this court in RATUL PURI VERSUS STATE BANK OF INDIA & ANR. [2020 (8) TMI 951 - DELHI HIGH COURT] where it was held that 'any order passed by the said Committee shall not be placed in public domain for a period of four weeks. Further, a copy of the reasoned order shall be supplied to the petitioner after the Committee passes the same forthwith. Liberty is granted to the petitioner, if he is not satisfied with the order, to take steps as per law. This order is passed without prejudice to the rights and contentions of the parties.'
In the facts of the present case, it would be appropriate to pass similar directions in the present case also - the petitioner is also free to request the respondent bank during the personal hearing to provide the documents which have been relied upon in the show cause notice or relied upon by the respondent bank, a copy of which have not been provided to the petitioner.
Petition disposed off.
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2020 (11) TMI 1122
Direction for fresh draw of lots of 2/3rd outgoing members of the Central Council of Indian Institute of Insurance Surveyors and Loss Assessors (IIISLA) - Rule 3 of the Indian Institute of Insurance Surveyors and Loss Assessors, Regulation and Procedure for conducting the election to the Council.
It is pleaded that respondent No.2 is dissatisfied with the names forwarded by president of IIISLA as retiring 1/3rd members and seeks to conduct a fresh draw of lots in order to procure a more favourable outcome.
HELD THAT:- There is no infirmity in the steps taken by respondent No.2 to warrant any interference in the election process.
Clearly a court should not normally stall the process of formation of the Governing Body.
Further it is manifest that except for a bald allegation that respondent No.2/the Election Officer have a vested interest in selecting somebody else there is no material available on record to show that respondent No.2 has not acted in a bona fide manner and as per rules and regulations. There are no reasons for this court to interfere in the completion of the election process.
Petition dismissed.
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2020 (11) TMI 1121
Dishonour of Cheque - ingredients for attracting the provisions of Section 138 of NI Act fulfilled or not - rebuttal of presumption u/s 139 of NI Act - order of acquittal passed by the trial Court is justified or not.
HELD THAT:- It is necessary for this Court to analyze and reevaluate the evidence adduced by both parties before the trial Court. On careful examination of the evidence adduced by appellant herein, it is noticed that the evidence is verbatim the same as stated in the legal notice got issued by appellant, wherein appellant has clearly stated regarding hand loan having been taken by respondent on 2.4.2007, towards repayment of which respondent got issued the present cheque bearing No.222371 dated 1.6.2007 for Rs. 2,50,000/-.
Since complaint is filed for the offence punishable under section 138 of the Act, there is a presumption in favour of the holder of cheque and this presumption is in favour of complainant/appellant. Unless contrary is proved by respondent, it is presumed that holder of cheque has received it in discharge of whole or part of any debt or other liability. Therefore the presumption accorded by the statute under section 139 of the Act is in favour of appellant which will have to be rebutted by respondent with cogent and satisfactory evidence either by documentary or oral evidence to shift the burden of proof on the appellant.
On careful understanding of provisions of section 118 of the Act, it is clear that when any negotiable instrument is made, every such instrument is endorsed, negotiated or transferred for consideration. Therefore it is clear that any cheque has been drawn in favour of a holder, there is a presumption in law that such cheque has been made or indorsed for a consideration and that the said consideration is towards discharge in whole or in part of any debt or other liability.
When this being the presumption enshrined in the Act, it is no doubt a rebuttable presumption, but such rebuttal of the presumption has to be made by respondent through cogent and believable evidence either oral or documentary to the satisfaction of the Court thereby disproving the theory and case put forward by appellant. In the present facts of case, it is to be seen whether respondent has been able to rebut the presumption cast on him.
In order to rebut the presumption in favour of appellant, respondent will have to plead sufficient, satisfactory and cogent evidence either oral or documentary. To such an extent it would create a doubt in the mind of Court which should be a probable defence and not merely suggestions and questions which are not admitted and denied by PW.1 appellant. On a careful examination of Ex.D.4, it also does not reveal whether these alleged so called daily payments have been received by appellant, towards repayment of loan of either Rs. 35,000/- or Rs. 2,50,000/-. Hence in the facts and circumstances of the present case and material evidence of both parties, respondent has not adduced any evidence to raise a probable defence. Therefore the burden has not shifted on appellant to answer such rebuttal of respondent.
The appellant has clearly made out the necessary ingredients to attract provisions of Section 138 of the Act and has proved the guilt of accused to be punished for the offence under Section 138 of the Act. As such, the impugned order of acquittal passed by the trial Court deserves to be set aside and respondent/accused is liable to be convicted for the offence punishable under Section 138 of the Act.
The Judgment of acquittal passed by the Principal Civil Judge (Jr.Dn) and J.M.F.C., Bhatkal in C.C.No.2039/2007 dated 27.11.2010 is set aside. Respondent/accused is convicted for the offence punishable under Section 138 of the Act - Appeal allowed.
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2020 (11) TMI 1120
Seeking grant of bail - offences punishable under Sections 20(B) (1), (8) of NDPS Act - seizure of ganja plants of a commercial quantity or not - HELD THAT:- Though it is contended by the learned HCGP that from possession commercial quantity of ganja has been seized from backside of house of the accused but on perusal of the records, a complaint has been registered and nowhere quantity of ganja has been stated and subsequently, they made a raid and panchanama has been drawn and the wet ganja plants have been uprooted without separating the stems, seeds, flowers, buds and fruits etc., and the entire quantity of ganja which is seized is in wet condition.
Under such circumstances, it is difficult for the Court to prima facie find out at this stage whether the seized ganja is of small quantity or intermediate quantity or commercial quantity. The ganja seized in wet form weighed 20 kgs. That itself shows that it is less than a commercial quantity.
It is opined that by imposing some stringent conditions if petitioner/accused is ordered to be released on anticipatory bail, it is going to meet the ends of justice - Petitioner–accused is ordered to be enlarged on bail on fulfilment of conditions imposed - petition allowed.
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2020 (11) TMI 1119
Contravention of various provisions of Section 4 of Competition Act, 2002 - locus of the Informant to file the present Information - Relevant Market and Dominance of Google - Allegations under Section 4 - Abuse of Dominant Position - Exclusivity Regarding Mode of Payment for Purchase of Apps and In-App Purchases (IAPS) - Pre-installation and prominence of Google Pay on Android Smartphones - Search manipulation and Bias by Google in favour of Google Pay - Prominent placement of Google Pay on the Play Store - Exclusivity Requirement Imposed by Google Resulted in Unfair Terms Being Imposed on Users.
HELD THAT:- The Commission is of the prima facie view that the Opposite Parties have contravened various provisions of Section 4 of the Act. These aspects warrant a detailed investigation.
The Commission directs the Director General ('DG') to cause an investigation to be made into the matter under the provisions of Section 26(1) of the Act. The Commission also directs the DG to complete the investigation and submit the investigation report within a period of 60 days from the date of receipt of this order.
The Commission notes the submissions dated 31.07.2020 moved by the Informant wherein it is inter alia claimed that the role of the Informant in the proceedings before the Commission is limited and therefore Google does not have any right to cross-examine the Informant or to challenge the locus of the Informant. In this regard, the Commission finds the claim of the Informant that Google cannot cross-examine the Informant, as thoroughly misconceived. The issue of cross-examination of the Informant will be decided by the DG at the appropriate stage and the Informant will have no immunity from cross-examination in the event it is considered appropriate by the DG. Needless to add, any refusal by the Informant to subject itself to cross-examination would forfeit the 'limited' rights of the Informant to participate in the proceedings before the DG and the Commission.
The Secretary is directed to send a copy of this order along with the Information and other material available on record to the Office of the DG forthwith.
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2020 (11) TMI 1118
Condonation of delay in filing criminal revision petition under the Limitation Act, 1963 - Section 5 read with Section 14 of the Limitation Act, 1963 - HELD THAT:- Exclusion of time under Section 14 of the Limitation Act is mandatory once the conditions precedent prescribed in Section 14(1) are satisfied, whereas the Court's power under Section 5 of the Limitation Act is discretionary. Section 14(1) has been made applicable to any suit and "suit" has been defined in Section 2(l) of the Limitation Act, 1963 and it does not include an appeal or an application.
However, the Supreme Court in the matter of J. Kumaradasan Nair and others v. IRIC Sohan and Others [2009 (2) TMI 796 - SUPREME COURT] has held that Section 14(1) of the Limitation Act, 1963 is applicable only in suits in view of the definition of suit contained in Section 2(l) of the Limitation Act, 1963, but the principle thereof would be applicable for the purpose of condonation of delay in filing revision application in terms of Section 5 thereof.
Whether in a criminal proceeding, Section 14(1) of the Limitation Act, 1963 would be applicable? - HELD THAT:- The applicability of Section 14(1) of the Limitation Act, 1963 is confined to suit and appeal or revision, it cannot be made applicable to criminal proceeding like revision. However, Section 470(1) of the Code of Criminal Procedure, 1973 provides that in computing the period of limitation, the time during which any person has been prosecuting with due diligence another prosecution, whether in a Court of first instance or in a Court of appeal or revision, against the offender, shall be excluded.
The petitioner has failed to explain the inordinate delay from 6-6-2011 to 2-5-2013 for more than two years in filing the application for grant of leave to appeal, as no sufficient reason has been assigned for delay of two years in filing the application for grant of leave to appeal questioning the order of discharge of respondent No. 1.
The Supreme Court in J. Kumaradasan Nair [2009 (2) TMI 796 - SUPREME COURT] has held that the court will not apply the beneficent provisions like Sections 5 and 14 of the Limitation Act in a pedantic manner. It is true that sufficient cause has to be construed liberally, but it should be considered whether the person prosecuting the proceeding is himself negligent or is not acting bonafidely. A careful perusal of the record would show that the petitioners have failed to demonstrate any sufficient reason for delay of two years in questioning the order of discharge. As such, the revisional Court is absolutely justified in dismissing the revision and rightly held that sufficient cause has not been shown for delay of two years in filing the application for grant of leave to appeal, as Section 14 of the Limitation Act, 1963 has no application in criminal proceeding.
There are no merit in this petition, it deserves to be and is accordingly dismissed.
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2020 (11) TMI 1117
Wrongful availment of CENVAT credit between 15th December 2007 and 31st January 2009 - proceedings initiated for recovery of credit on the ground that the activities undertaken on the ‘combi pack’ by the appellant did not amount to manufacture - HELD THAT:- The Hon’ble High Court of Karnataka in re Vishal Precision Steel Tubes & Strips Pvt Ltd [2017 (3) TMI 1287 - KARNATAKA HIGH COURT] has held that 'When once duty is paid by the assessee treating the activity as manufacturing activity by the Department, Cenvat credit is available and there is no question of reversion of Cenvat credit.'
The impugned order is not consistent with law and must be set aside - Appeal allowed.
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2020 (11) TMI 1116
Effect of section 92BA as omitted by Finance Act, 2017 w.e.f. 01.04.2017 - effect of repeal of a statute vis-a-vis deletion/addition of a provision in an enactment and its effect thereof - TP Adjustment - AO made a reference to TPO u/s 92CA to determine arms length price as the assessee had entered into specified domestic transaction and on the ground it was covered u/s 92BA - as decided by HC [2019 (12) TMI 1312 - KARNATAKA HIGH COURT] when clause (i) of Section 92BA having been omitted by the Finance Act, 2017, with effect from 01.07.2017 from the Statute the resultant effect is that it had never been passed and to be considered as a law never been existed. Hence, decision taken by the Assessing Officer under the effect of section 92BI and reference made to the order of TPO under section 92CA could be invalid and bad in law.
HELD THAT:- Delay condoned. Issue notice.
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2020 (11) TMI 1115
Directory provision or not - Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 mandating the District Magistrate to deliver possession of a secured asset within 30 days, extendable to an aggregate of 60 days upon reasons recorded in writing - HELD THAT:- The question as to whether, a time limit fixed for a public officer to perform a public duty is directory or mandatory has been examined earlier by the Courts as well. A question arose before the Privy Council in respect of irregularities in the preliminary proceedings for constituting a jury panel. The Municipality was expected to revise the list of qualified persons but the jury was drawn from the old list as the Sheriff neglected to revise the same. It was in these circumstances, the decision of the jury drawn from the old list became the subject matter of consideration by the Privy Council. It was thus held that it would cause greater public inconvenience if it were held that neglecting to observe the provisions of the statute made the verdicts of all juries taken from the list ipso facto null and void so that no jury trials could be held until a duly revised list had been prepared.
In T.V. Usman v. Food Inspector, Tellicherry Municipality, Tellicherry [1994 (1) TMI 292 - SUPREME COURT], the time period during which report of the analysis of a sample Under Rule 7(3) of the Prevention of Food Adulteration Rules, 1955 was to be given, was held to be directory as there was no time-limit prescribed within which the prosecution had to be instituted. When there was no such limit prescribed then there was no valid reason for holding the period of 45 days as mandatory. Of course, that does not mean that the Public Analyst can ignore the time-limit prescribed under the rules. He must in all cases try to comply with the time-limit. But if there is some delay, in a given case, there is no reason to hold that the very report is void and, on that basis, to hold that even prosecution cannot be launched.
This Court distinguished between failure of an individual to act in a given time frame and the time frame provided to a public authority, for the purposes of determining whether a provision was mandatory or directory, when this Court held that it is a well-settled principle that if an act is required to be performed by a private person within a specified time, the same would ordinarily be mandatory but when a public functionary is required to perform a public function within a time-frame, the same will be held to be directory unless the consequences therefor are specified.
Even though, this Court in United Bank of India v. Satyawati Tondon and Ors. [2010 (7) TMI 829 - SUPREME COURT] held that in cases relating to recovery of the dues of banks, financial institutions and secured creditors, stay granted by the High Court would have serious adverse impact on the financial health of such bodies/institutions, which will ultimately prove detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters.
The Hon'ble High Courts are well aware of the limitations in exercising their jurisdiction when affective alternative remedies are available, but a word of caution would be still necessary for the High Courts that interim orders should generally not be passed without hearing the secured creditor as interim orders defeat the very purpose of expeditious recovery of public money.
There are no error in the order passed by the High Court - the appeal is dismissed.
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2020 (11) TMI 1114
Grant of Default bail - bail sought on the ground that investigating agency has failed to file a police report under Section 173(2) of the Cr.P.C. within the stipulated period of one-hundred and eighty days - recovery of narcotic drugs and/or psychotropic substance - police report under Section 173(2) of the Cr.P.C. can be considered as such if it is not accompanied by a Chemical Examiner's Report with regard to the substance recovered or not - entitlement for default bail when application for such bail has been filed prior to the submission of the report under Section 173(2) of the Cr.P.C. but is taken up for consideration simultaneously with the said report being filed.
Whether in a case of commission of an offence punishable under the provisions of the NDPS Act, which is founded on recovery of narcotic drugs and/or psychotropic substance, a police report under Section 173(2) of the Cr.P.C. can be considered as such if it is not accompanied by a Chemical Examiner's Report with regard to the substance recovered? - HELD THAT:- In Mehal Singh [1978 (4) TMI 240 - PUNJAB AND HARYANA HIGH COURT], the full Bench of the Punjab and Haryana High Court examined the question whether the investigation of an offence could be considered complete in terms of Section 173(2) of the Cr.P.C., even though the police officer investigating the case had not received the reports of experts such as the chemical examiner, the serologist, the ballistic expert or the finger print expert, which are admissible in law under Section 293 of the Cr.P.C. And, whether such a chargesheet would qualify to be termed as a police report in terms of Section 190(1)(b) of the Cr.P.C. to enable a Magistrate to take cognizance of the offence disclosed therein. The Court referred to the decision of the Supreme Court in Noor Khan v. State of Rajasthan: AIR 1964 SC 286 and observed that it was deducible from the said decision that it is not incumbent upon the investigating officer to reduce in writing the statements of witnesses. The Court held that he may merely include their names in the list of witnesses in support of the prosecution's case when submitting the chargesheet - The Court further reasoned that the contention that a chargesheet would be incomplete if not accompanied by the report of experts such as chemical analyst, serologist, ballistic expert, fingerprint expert etc. stands on a weaker ground.
The petitioners' contention that the report submitted on 27.05.2019 could not be construed as a report under Section 173(2) of the Cr.P.C. must be rejected. The first question is, thus, answered in the negative.
Whether an accused would be entitled to bail in default under Section 167(2) of the Cr.P.C. where his application for such bail has been filed prior to the submission of the report under Section 173(2) of the Cr.P.C. but is taken up for consideration simultaneously with the said report being filed? - HELD THAT:- As per Section 167 of the Cr.P.C., after the period of sixty days or ninety days as the case may be expires, the Magistrate would have no power to remand him to custody and he is required to be released on bail, if he is prepared to and furnishes the bail. It is also expressly provided that every person released on bail under the said sub-section would be deemed to be released under the provisions of Chapter XXXIII of the Cr.P.C. for the purposes of that Chapter. Once the maximum period for completing the investigation as specified under Section 167(2) of the Cr.P.C. is expired and once the accused indicates that he is prepared to furnish bail and does so, he is bound to be released.
In Hitendra Vishnu Thakur and Ors. v. State of Maharashtra and Ors. [1994 (7) TMI 343 - SUPREME COURT], the Supreme Court held that although the accused would be entitled to bail in default, in case the investigation is not complete in terms of Section 167(2) of the Cr.P.C. read with Section 20(4) of the Terrorist and Disruptive Activities (Prevention) Act, 1987 (TADA) provided such bail cannot be granted by the court on its own motion without any application being made by the accused person of his offering to furnish bail. The Court also clarified that at that stage, that it would only consider whether the challan has been filed within the maximum period as prescribed or whether the said period has been extended under Clause (bb) of Sub-section (4) of Section 20 of the TADA. The court would not be concerned with any other consideration such as the gravity of the case, seriousness of the offence or character of the offender.
The impugned order, which is premised on the basis that the court would have to consider the question of default bail at the point when the application is taken up for consideration is unsustainable - As explained by the Supreme Court in Nirala Yadav [2014 (6) TMI 1018 - SUPREME COURT], "the accused can avail his liberty only by filing an application stating that the statutory period for filing of the challan has expired, the same has not yet been filed, and an indefeasible right has accrued in his favour and further he is prepared to furnish the bail bond. Once such an application is filed, it is obligatory on the part of the court to verify from the records as well as the public prosecutor whether the time has expired and the charge-sheet is filed or not".
The moment the accused makes such an application, the court is required to only examine whether the conditions as prescribed under Section 167(2) of the Cr.P.C. have been met when the application is made. If they are, then the power of the court to remand is lost and the accused has to be granted bail. In this view, this Court is unable to concur with the reasoning of the Special Court in the impugned order - The implicit assumption that the relevant point of time for considering whether the accused have availed of their indefeasible right would be the point at which the applications are considered and not when it is filed, as stated earlier, not sustainable.
The impugned order is set aside. However, the applications moved by the petitioners before the said court seeking bail in default under the provisions of Section 167(2) of the Cr.P.C. are dismissed.
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2020 (11) TMI 1113
Denial of natural justice - Validity of CIT(A) order - as argued CIT(A) has decided the matter of controversy in absence of the assessee and without giving an opportunity of being heard to the assessee in accordance with law - HELD THAT:- On appraisal of the order of the CIT(A) dated 12.02.2019 passed by the CIT(A) we find that the CIT(A) has decided the matter of controversy in absence of the assessee/Representative of the assessee without giving an opportunity of being heard to the assessee in the accordance with law. A proper and reasonable opportunity is required to be given to the assessee before the deciding the matter of controversy in accordance with law.
Accordingly in the interest of justice, we remit the issue raised in the appeal to the file of the Ld. CIT(A). Ld. CIT(A) is directed to consider the issue afresh and pass an order on the merits of the case after giving after giving an proper opportunity of being heard to the assessee in accordance with law. Therefore, in the said circumstances, we are of the view that the order of the CIT(A) is not liable to be sustainable in the eyes of law.
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2020 (11) TMI 1112
Application for compounding u/s 279(2) - application made was refused as it had been made after the order of conviction has been passed by the Criminal Court - HELD THAT:- Guideline 4.4(f) of the Circular in F. No. 285/90/2008-IT(Inv.)/12 dated 16.05.2008 issued by the CBDT directing that compounding should not be permitted when conviction order has been passed by the Criminal Court, has to be construed that it would not stand in the way for considering a compounding application when appeal against conviction by the Criminal Court is pending, as in this case. Though the Respondent has made a distinction for granting the benefit of compounding to others while denying the same to the Petitioner for the reason that their compounding applications have been made before conviction by the Criminal Court, such distinction cannot be of any avail in view of the binding decisions of the Division Benches of this Court. See UMAYAL RAMANATHAN [2009 (4) TMI 36 - MADRAS HIGH COURT]
Conduct of the Petitioner by non-cooperation at the initial stage disentitles him to any relief - It would have to be examined with reference to the well known canons of the principles of natural justice that no material could be relied against a person without affording him an opportunity to explain his position before taking any decision entailing adverse civil consequence to him. In the fact situation that has arisen in this case, it was incumbent upon the Respondent to have informed the Petitioner before passing the impugned order that it was proposed to deny relief on account of such non-cooperation at the initial stage of the proceedings by bringing the same to his notice and supplying copies of the materials relied in support of the same, and calling upon him to submit explanation and also afford an opportunity of personal hearing, in that regard. The explanation of the Petitioner, if submitted, ought to be then considered before taking the final decision in the matter. Such exercise apparently has not taken place in the instant case as seen in the impugned order.
The result of the foregoing discussion is that the impugned Order passed by the Respondent cannot be sustained and it is set aside and the matter is remitted to the Respondent for fresh determination of the matter. It is incumbent upon the Respondent to take into account the aforesaid conclusions arrived by this Court, conduct enquiry affording opportunity of personal hearing to the Petitioner following the prescribed procedure in consonance with the principles of natural justice, deal with each of the contentions raised by the Petitioner and pass reasoned orders on merits.
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2020 (11) TMI 1111
Fraudulent And Unfair Trade Practices Relating To Securities Market - imposition of disgorgement - taking positions as a hedge in the derivative markets by someone who has an underlying exposure - F&O Market amounts to the commission of a ‘fraudulent and manipulative trade’ in securities in terms of the SEBI (PFUTP) Regulations - Offloading 5% of the shares in RPL by its promoter RIL would cause a flutter in the stock market and would not be in the interest of the investors - short positions taken - differences of views within the three-member Bench.
Appellants are prohibited from dealing in equity derivatives in F&O segment of Stock Exchanges, directly or indirectly, for a period of one year from the date of the order and shall disgorge an amount alongwith interest @12% p.a. w.e.f. 29.11.2017 onwards till the date of payment
Whether the Principal-Agent model/‚agency model‛ adopted by appellant no. 1 RIL and implemented with the help of other 11 appellants (because of merger of 2 of the original 12 other Noticees, there are 11 other appellants) in cornering huge position limits in the 2007 November single stock futures contract in the shares of Reliance Petroleum Ltd. (‘RPL’ for short) and the offloading of substantial quantities of RPL shares in the cash segment of the stock exchanges in the last 10 minutes (effectively 8.40 minutes) of the trading hours on 29 November, 2007, the settlement day, allegedly with an intention to artificially depress the price in the cash segment to make larger gains in the future contracts, are violative
HELD THAT:- As cornering about 62% / 93% of the market-wide position limit by one entity through a manipulative scheme or device is not the same thing as exceeding the position limit by a client in a transparent manner, visible to the exchange/clearing corporation/house. Therefore, the finding in the impugned order that it is a rare case of violation of section 12A of the SEBI Act and Regulation 3 and 4 of the PFUTP Regulations is perfectly in order. Further, it is an established fact that SEBI administers the SCRA, 1956, SEBI Act, 1992, Depositories Act, 1996 and the delegated provisions of the Companies Act, 1956/2013. Therefore, if the nature of the violations specified in any legislations spills over to the mandate under another legislation, SEBI is fully within its rights to invoke the provisions of both/all those legislations. In the instant matter, therefore, when it was held that the position limit violation had been achieved through a dubious, manipulative scheme or a device, such an act would squarely fall within the provisions of SEBI Act and PFUTP Regulations. We, therefore, find no error or mistake on the part of the WTM in invoking the relevant provisions of SCRA, SEBI Act and the PFUTP Regulations, 2003 and in passing the Order under section 11 and 11B of SEBI Act accordingly.
Disgorgement is an amount equivalent to the wrongful gain made or loss averted and therefore it is an equitable remedy; not a penal action. Moreover, equity is further served when the disgorged amount is credited to the Investor Protection Fund of SEBI, for the benefit of the market participants, particularly small investors; not to the Consolidated Fund of India as in the case of fine/penalty. Therefore, both the contentions that disgorgement is a penalty and SEBI does not have the power to impose disgorgement under section 11B of SEBI Act are contrary to the expressly stated provisions of the SEBI Act and therefore have no merit and are rejected forthwith.
Further, fact that disgorgement of Rs. 447.27 crore (+interest) imposed on the appellant no. 1 is a sizable sum does not make that direction harsh both because (1) it is only a remedial action and (2) what is disgorged is only what has been gorged by contravention of the specified laws. Nothing has been taken out of the appellant’s own funds/assets in the process. Since it is only an equitable remedy there is no question of that being harsh or a penal action.
Given the aforesaid reasons, appeal lacks any merit and is hereby dismissed. No orders on costs. Appellant no. 1 is directed to make payment of the disgorged amount of Rs. 447.27 Crore along with simple interest calculated at the rate of 12% p.a. with effect from November 29, 2007 till the actual date of payment to SEBI within 60 days from the date of this Order.
In view of the majority opinion, the appeal is dismissed with no order as to costs. Appellant no. 1 is directed to make payment of the disgorged amount of Rs. 447.27 Crore along with simple interest calculated at the rate of 12% p.a. with effect from November 29, 2007 till the actual date of payment to SEBI within 60 days from the date of this Order.
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2020 (11) TMI 1110
Revision u/s 263 - taxability of additional income in tobacco stock as declared in search u/s 132 - two possible views on the issue - PCIT noticed that the AO taxed the undisclosed income representing unexplained stock @30% instead of 60% as required u/s 115BBE - Whether additional income admitted by the assessee should not be treated as undisclosed investment u/s 69? - HELD THAT:- There are two possible views with regard to excess stock found during the course of search/survey in the premises of the assessee. According to the decisions relied upon by the assessee, the same forms part of business income and the same cannot be assessed u/s 69 - There are two possible views on assessment of business stock as business income as well as unexplained investment as per the views of Pr.CIT and the assessee.
AO after examining the explanation taken a view that the excess stock required to be assessed as business income, accordingly completed the assessment. When there are two possible views and one of the possible view is taken by the AO, the CIT is not permitted to substitute his view to tax the assessee at higher rate by applying the provisions of section 115BBE of the Act in the proceedings u/s 263.
As decided in Spectra Shares and Scrips (P) Limited [2013 (6) TMI 173 - ANDHRA PRADESH HIGH COURT] merely because of difference of opinion, Pr.CIT cannot invoke his powers u/s 263.
Once the Assessing Officer had taken a conscious decision and acted in accordance with law and made the assessment, the same could not be branded as erroneous by the Commissioner, simply because according to him, the Assessing Officer should have made further enquiries - See G.V.R. Associates. v. Income-tax Officer, Ward-1(3), Vijayawada.
Thus we hold that there is no case for revision u/s 263 made - Decided in favour of assessee.
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2020 (11) TMI 1109
Validity of charge-sheet as well as the summoning order - person belonging to Scheduled Caste - dispute regarding possession of property - HELD THAT:- There is a dispute about the possession of the land which is the subject matter of civil dispute between the parties as per Respondent No. 2 herself. Due to dispute, Appellant and others were not permitting Respondent No. 2 to cultivate the land for the last six months. Since the matter is regarding possession of property pending before the Civil Court, any dispute arising on account of possession of the said property would not disclose an offence under the Act unless the victim is abused, intimated or harassed only for the reason that she belongs to Scheduled Caste or Scheduled Tribe.
In judgment reported as KHUMAN SINGH VERSUS STATE OF MADHYA PRADESH [2019 (8) TMI 1880 - SUPREME COURT], this Court held that in a case for applicability of Section 3(2)(v) of the Act, the fact that the deceased belonged to Scheduled Caste would not be enough to inflict enhanced punishment. This Court held that there was nothing to suggest that the offence was committed by the Appellant only because the deceased belonged to Scheduled Caste.
Therefore, offence under the Act is not established merely on the fact that the informant is a member of Scheduled Caste unless there is an intention to humiliate a member of Scheduled Caste or Scheduled Tribe for the reason that the victim belongs to such caste. In the present case, the parties are litigating over possession of the land. The allegation of hurling of abuses is against a person who claims title over the property. If such person happens to be a Scheduled Caste, the offence Under Section 3(1)(r) of the Act is not made out.
The Appellant had sought quashing of the charge-sheet on the ground that the allegation does not make out an offence under the Act against the Appellant merely because Respondent No. 2 was a Scheduled Caste since the property dispute was not on account of the fact that Respondent No. 2 was a Scheduled Caste. The property disputes between a vulnerable Section of the society and a person of upper caste will not disclose any offence under the Act unless, the allegations are on account of the victim being a Scheduled Caste. Still further, the finding that the Appellant was aware of the caste of the informant is wholly inconsequential as the knowledge does not bar, any person to protect his rights by way of a procedure established by law.
The charges against the Appellant Under Section 3(1)(r) of the Act are not made out - the charge-sheet to that extent is quashed - Appeal disposed off.
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2020 (11) TMI 1108
Condonation of delay of 51 days in filing appeal - sufficient cause for delay provided or not - HELD THAT:- Section 62 of the Insolvency and Bankruptcy Code 2016 provides a period of forty five days from the date of the receipt of an order of the National Company Law Appellate Tribunal for filing an appeal before this Court. Under sub-section (2), this Court is empowered to condone a delay of a further period not exceeding fifteen days for sufficient cause.
The appeal is barred by limitation since the delay of 51 days is beyond the period of delay which can be condoned under sub-section (2) of Section 62 - the appeal is dismissed on the ground that it is barred by limitation.
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