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Showing 1 to 20 of 1218 Records
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2014 (3) TMI 1222
Violation of rules of natural justice - cancelling the registration u/s 12AA(3) - Commercial Cricket related activities - AR submitted that the DIT (E) had cancelled the registration by pointing out certain issues which were never raised in the show cause notice issued by him or even not put across to the assessee at the time of personal hearing before him - HELD THAT:- Before cancelling the registration granted to the assessee, that too retrospectively, the DIT (E) should have given adequate opportunity to the assessee to explain/clarify on the issues on the basis of which the DIT (E) cancelled the registration. It is a fact that assessee was earlier registered u/s 12A of the Act. Therefore, it was incumbent upon the DIT (E) to bring to the notice of the assessee all those factors, which according to the DIT (E), has changed the nature and character of the assessee and its objects have become such that it can no more be considered to be existing solely for charitable purpose as defined u/s 2(15) of the Act.
We, therefore, feel that the assessee deserves a fair opportunity to explain its position on all the issues which provoked the DIT (E) to cancel the registration granted u/s 12A - Thus remit the matter back to the file of the DIT (E), who shall communicate to the assessee all the issues, which according to him, has changed the object of the assessee thereby violating the conditions of registration u/s 12AA(3). Assessee’s appeal is allowed for statistical purposes.
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2014 (3) TMI 1221
Eligibility for educational requirements stipulated in clause 'b' of Rule 14 of Delhi Judicial Service Rules, 1970 - HELD THAT:- On a plain reading of Rule 14 of Delhi Judicial Service Rules, 1970, it is apparent that three independent conditions are stipulated. Condition (a) states that a candidate should be a citizen of India. Condition (b) states that a candidate should be a person practicing as an Advocate in India or a person qualified to be admitted as an Advocate under the Advocates Act, 1961. Condition (c) is with regard to the age on a particular date i.e. on the first day of January following the date of commencement of examination. The three clauses are separate and we do not think that the date stipulated to compute the maximum eligible age can be read as part and parcel or in continuation of clause 'b' which relates to the educational qualification.
Petition dismissed.
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2014 (3) TMI 1220
Seeking grant of Regular bail - recovery of 45 bottles of Rexcof each weighing 10 ml. and 20 strips of Parvan Spas Capsules, each strip having 10 capsule (total 200 capsules) - seeking extension of time for filing final report under Section 173 Cr.PC on the plea that chemical report from the laboratory, had not been received - HELD THAT:- In similar circumstances, a co-ordinate Bench of this Court has considered exactly the same satisfaction recorded by the Public Prosecutor recorded in an application which was made for extension of time beyond 180 days of custody of the accused. While dealing with the same matter, the said co-ordinate Bench in JEEVAN SHARMA @ VICKY VERSUS STATE OF PUNJAB [2014 (1) TMI 1946 - PUNJAB AND HARYANA HIGH COURT] had observed Keeping in view the contents of the application moved by the public prosecutor for extension of time, I find that the matter would be squarely covered by the ratio of the law laid down in Sanjay Kumar Kedias' case, as extension of time for presentation of “challan” was obviously sought on similar grounds as given in the case before the Apex Court, wherein such reason has been held to be not good for grant of extension of time.
Right to be released on bail under proviso to Section 167(2) Cr.PC is indefeasible. It is enforceable by accused from time of default till filing of challan. But this right of accused to be released on bail would get extinguished if application under Section 167(2) Cr.PC is filed after the charge sheet is received by the court - Admittedly, the petitioner had moved application under Section 167(2) Cr.PC on 12.9.2013 whereas the challan had been filed on 1.11.2013. Application moved by the prosecution on 6.9.2013 before the Special Court being not in conformity with the conditions laid down in the proviso to Section 36A(4) of the Act becomes legally inconsequential.
Thus, by setting aside order dated 21.9.2013 passed by the Special Court, Sangrur, this petition is allowed and the petitioner is ordered to be released on bail on his furnishing bail/surety bonds to the satisfaction of the Special Court, Sangrur.
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2014 (3) TMI 1219
Grant of bail - Explosion of Bomb - purchase of SIM card and cell phone, that too, in benami names, at different places and the cell phone, in turn, was used for explosion of the bomb - HELD THAT:- The expression of the opinion in this behalf must be in such a way that, it does not have any bearing upon the trial. The purpose for which the Parliament employed the expression "prima facie" must be borne in mind. If, at the time of considering the application of bail, the Court takes the view that the accusation is not true, the prosecution will suffer a serious dent. Similarly, if the Court takes the view that the accusation is true, the Court can be accused of, pre-judging the charges. The Court has to adopt what is known as "Marjala Kishora Neethi (The care which a cat is expected while carrying the kitten in its mouth from one place to another). The formation of opinion must be, for the limited purpose of considering the application for bail.
This expression "prima facie", is used in civil cases also, particularly in the context of deciding the applications for temporary injunctions. Broadly understood, it connotes that, without the help of any other material, the one, which is before the Court, must be sufficient to accept the proposition put forward by the concerned party. In the context of Section 43-D of the Act, the adjective, "prima facie" qualifies the strength or nature of the case of the prosecution, at the stage when the application for bail is being considered, which obviously, is before trial. The other expressions occurring in proviso, that assume significance are, "reasonable ground" and "true".
The allegation against the appellants is that while one of them purchased a SIM card, the other purchased a cell phone, and those devices were used in the explosion. The identified SIM card and cell phone are not those, which were referable to the bomb, that was exploded, but to the one, which was stated to be an unexploded device, recovered from the scene. While the SIM card is said to have been purchased in the State of Jharkhand, the cell phone, in the State of Haryana - On applying the test of the very concept of "prima facie", we find it difficult to hold that the accusation against the appellants can be said to be true. The reason is that the prosecution has a very long way to go, to prove its contents. This much however can be said that, if the things exist where they stand now, it would be difficult for a common man, not to speak of a Court, to hold the appellants as guilty.
The evidence of the witnesses has to be adduced, they must come out clean in the cross-examination and several links, that are necessary to make it a complete chain; must be provided. None of the factors, which we enlisted in the preceding paragraph, are present here. Though extensive arguments are made on the basis of the statements recorded from the listed witnesses, we desist from dealing with them, lest the discussion impacts the trial - An application filed by that very witness raising objection to the recording of the statement and the truth thereof is said to be pending. The reason that prompted the facilitating of a meeting, or discussion between A-6 and another person, connected with the offence, that too, in a high security zone of the prison, or the factors, that warranted the recording of the statement by a Court at Delhi, where no proceedings are pending; are to be explained by the prosecution, over the period.
It is directed that A-1 and A-2, i.e., Devendra Gupta and Lokesh Sharma in Special Sessions Case No. 3 of 2013 shall be released on bail on their executing bond, for a sum of Rs. 50,000/- each, with two sureties each, for like sum, to the satisfaction of the trial Court, unless their detention is warranted under any other order passed by a Court of competent jurisdiction - the Criminal Appeal is allowed.
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2014 (3) TMI 1218
TDS u/s 194A - Disallowances of interest payment - non deduction of TDS - addition u/s 40(a)(ia) - ssessee before CIT(A) contended that it had paid/debited interest and TDS was deducted of all interest paid/debited except from these three parties for the reason that they have furnished Form No.15G for non deduction of tax in the interest income.
Copies of Form No.15G as submitted by the loan creditors with the assessee company was furnished before AO during the course of scrutiny assessment. These were filed before CIT(A) also but CIT(A) confirmed the disallowance for the reason that Form No.15G was not submitted in the office of the Commissioner of Income Tax concerned - HELD THAT:- We find that once Form No.15G is submitted by the payee the assessee is not obliged to deduct TDS and once this is the position, the AO cannot make disallowance by invoking provision of section 40(a)(ia) of the Act. This position has been explained by the Coordinate Bench of ITAT Mumbai in the case of Vipin P. Mehta vs ITO [2011 (5) TMI 503 - ITAT MUMBAI] wherein as accepts the assessee’s claim that since he had the declarations of the payees in the prescribed form before him at the time when the interest was paid, he was not liable to deduct tax therefrom under section 194A, if he was not liable to deduct tax, section 40(a)(ia) is not attracted.
Disallowance u/s 14A r.w.r 8D - HELD THAT:- As we find that the exempted income i.e. the dividend is only to the extent of Rs.62,087/- and 1% of the exempted income will suffice the issue. Accordingly we direct the AO to restrict the disallowance to 1% of the exempted income. This issue is partly allowed.
Unexplained investment in the mutual fund - HELD THAT:- As assessee has got clarification from Primary Mutual Fund thereby it has been clarified that assessee has made investment of Rs.2,00,000 only and not Rs.3,00,000/- as added by the lower authorities. We feel that addition is unwarranted and we delete the same. This ground of assessee’s appeal is allowed.
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2014 (3) TMI 1217
Unexplained cash credit u/s. 68 - unaccounted cash kept in Tijori - HELD THAT:- On consideration of the facts of the case in the light of the entries in the books of account and Tijori Khata, the assessee has been able to explain the availability of cash on the date of survey. The assessee also pointed out that even the seized documents found signature of the survey party to show that the findings of the ld. CIT(A) are in accordance with law. In view of the above, we do not find any merit in this ground appeal of the Revenue. Same is accordingly dismissed.
Undervaluation of silver account - valuation done by the survey party - AO observed that the assessee had offered investment in silver ornaments from undisclosed sources on account of excess stock found - HELD THAT:- CIT(A) accepted the valuation done by the Survey party based on factual investigation and explanation made by the assessee during the course of survey. The physical valuation was done of the stock on the basis of the chits attached to the silver items and surrender by assessee of Rs. 58,910/- on account of valuation of excess stock was accepted by the survey party. Therefore, the AO on the basis of his own calculation should not have disturbed the valuation done by the survey party .Assessee showed that no specific query was raised on this issue and item-wise inventory was prepared by the survey party. Therefore, the valuation done by the survey party was correctly accepted by the ld. CIT(A). We, therefore, do not find any merit in this ground of appeal of the Revenue. The same is accordingly dismissed.
Addition on account of GP on silver account - AO observed that the assessee had indulged in purchase and sale of silver outside the books of account - CIT(A) deleted addition - HELD THAT:- Addition has been rightly deleted in the matter. The small excess stock was found during the course of survey, which was surrendered by the assessee and accepted by the survey party. No other material was found to prove that the assessee made sales outside the books of account. Therefore, sales could not have been enhanced without any evidence and for low GP, the addition would not be justified. In the result, this ground of appeal of the Revenue is dismissed.
Undervaluation of gold ornaments - During the course of survey, the statement of assessee was recorded to explain the stock, in response to which the assessee submitted that entire stock was valued considering the gold to be of 22 carat whereas gold of 20 carat was also involved in this stock. Small stock was surrendered by the assessee - CIT(A) deleted addition - HELD THAT:- We are of the view the addition has been rightly deleted by the ld. CIT(A). The ld. Counsel for the assessee demonstrated before us that when the assessee has made surrender of excess stock of Rs. 3,00,000/-, therefore, further addition would be unjustified. In this case, survey party accepted the surrender of the assessee of excess stock of gold. Therefore, the AO should not have substituted the opinion of the survey party without any material in his possession. This ground is accordingly dismissed.
Addition on account of gold ornaments found in a black bag during the survey - CIT(A) deleted addition - HELD THAT:- Assessee has referred to initial statement and also referred to question No. 17 to show proper explanation was given on this issue. PB 14 is final statement and question No. 3 is regarding surrender made. The assessee on the basis of material on record has been able to explain part of the gold ornaments and whatever stock could not be explained, the assessee has made surrender of the same. The ld. CIT(A), therefore, on proper appreciation of facts and material on record has rightly deleted the addition on this issue. This ground is accordingly dismissed.
Addition on account of gold ornaments - AO observed that the assessee is indulged in purchase and sales of gold ornaments outside the books and accordingly book results were rejected and addition was made - HELD THAT:- As submitted before the ld. CIT(A) that no query was raised on this issue and there was no basis to make addition. CIT(A) accepted the contention of the assessee and the addition was accordingly deleted. It is stated by both the parties that this ground is same as is considered on account of silver account in which the ld. CIT(A) similarly deleted the addition. Following the same finding we dismiss this ground of appeal of the Revenue as well.
Unexplained cash credit - HELD THAT:- Small amounts have been taken from nine creditors and affidavits contained their monthly income and creditors have also confirmed the return of the amounts to them. AO has not adversely commented upon the affidavits of the creditors and the AO never insisted for examination of the creditors at any point of time. Considering the smallness of the amount in question and the ld. CIT(A) admitted the additional evidences which is not challenged in appeal, would suggest that the Revenue has accepted the finding of fact recorded by the ld. CIT(A) regarding genuine credit in the matter. We accordingly, in the absence of any evidence on record, do not think it proper to disturb the findings of the ld. CIT(A) in deleting the addition. This ground is accordingly dismissed.
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2014 (3) TMI 1216
Rejection of plaint in suit under the provisions of Order VII Rule 11 of Code of Civil Procedure, 1908 - whether this suit filed by the plaintiff is by or against or relating to the said trust, trustees and others falling under any of the categories provided in section 50 of the Bombay Public Trusts Act, 1950 or under section 51? - whether prior consent of the charity commissioner was required before institution of this suit? - HELD THAT:- On perusal of the plaint as a whole and on meaningful reading of the averments and prayers in the plaint, it is clear that the plaintiff who claims to be one of the trustee has alleged a breach of public trust, negligence, misapplication or misconduct on the part of some of the trustees, has applied for an order and decree against some of the defendants who are admittedly trustees of the said trust and some of them are joined as alleged trustees and also against some of the companies which are alleged to be under control of some of the trustees. The plaintiff has applied for money claim against all the defendants alleging loss caused to the trust by virtue of alleged breach of trust, negligence, misapplication, misconduct or willful default - the case of the plaintiffs falls under sections 50(i), (ii) (a), (d), (f).
Whether suit filed by the plaintiff is for enforcement of the personal civil rights of the plaintiff or is on behalf of the trust and acting as trustee of the said trust? - HELD THAT:- The averments made in the plaint along with the prayers in the suit clearly indicates that the plaintiffs have filed the suit claiming to be a trustee and seeks an order and decree against the defendants that various amounts be paid by the defendants to the plaintiffs as trustee or to the said trust. Plaintiff has thus not claimed any personal rights or has not filed the suit which can be considered as a suit for enforcement of the rights of a private nature - A perusal of the averments in the plaint and prayers clearly indicates that the suit and the reliefs claimed relate to the working of the trust and its trustees and therefore, permission of the Charity Commissioner would be required when a suit is instituted by a person having interest of a nature provided in section 50 of the Bombay Public Trust Act.
In the facts of this case, one more question which arises for consideration of this court is that since status of the plaintiff as trustee itself is in dispute and that question is pending before charity commissioner admittedly, whether this court can consider such question in this suit which is pending adjudication before the charity commissioner - In case of SOPAN SUKHDEO SABLE AND ORS. VERSUS ASSISTANT CHARITY COMMISSIONER AND ORS. [2004 (1) TMI 726 - SUPREME COURT], Supreme Court has held that for instituting a suit of the nature specified in section 50 of the Bombay Public Trusts Act, prior consent of the charity commissioner is necessary under section 51.
Supreme Court in case of CHURCH OF CHRIST CHARITABLE TRUST & EDUCATIONAL CHARITABLE SOCIETY, REPRESENTED BY ITS CHAIRMAN VERSUS PONNIAMMAN EDUCATIONAL TRUST REPRESENTED BY ITS CHAIRPERSON/MANAGING TRUSTEE [2012 (7) TMI 1029 - SUPREME COURT] has held that if the allegations are vexatious and meritless and not disclosing a clear right or material to sue, it is the duty of the trial judge to exercise his power under Order 7 Rule 11. The Supreme Court has adverted to the earlier judgment of that court delivered by the Bench presided by Shri Justice Krishna Iyer which had held that if clever drafting has created the illusion of a cause of action, it should be nipped in the bud at the first hearing by examining the parties under Order 10 of the court.
The cause of action is a bundle of facts which taken with the law applicable to them gives the plaintiff the right to relief against the defendant. Every fact which is necessary for the plaintiff to prove to enable him to get a decree should be set out in clear terms. It is held that a cause of action must include some act done by the defendant since in the absence of such an act, no cause of action can possibly accrue - the plaint in no manner whatsoever discloses any cause of action against defendant nos. 12, 15 and 16 and plaint is rejected against defendants nos. 12, 15 and 16 on this ground also.
Plaint rejected.
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2014 (3) TMI 1215
Eviction from land - right to continue in possession even without renewal - right upon the grantees whose grant has lapsed by passage of time to stay in possession - Whether the Appellants are debarred from resisting eviction from the land in question on the ground that they have acquired the right to continue in possession even without renewal and a fresh grant in their favour under the 1966 Regulation? - HELD THAT:- The doctrine is found in all legal systems of civilized society in the world. It is founded on a two-fold logic, namely, (1) that there must be finality to adjudication by competent Court and (2) no man should be vexed twice for the same cause. These two principles attract the doctrine of res judicata even to inter-parties decisions that may be erroneous on a question of law.
Reference may also be made to the Constitution Bench decision in Direct Recruit Class-II Engineering Officers Assn. v. State of Maharashtra [1990 (5) TMI 223 - SUPREME COURT] where this Court once again reiterated that the principles of constructive res judicata apply not only to what is actually adjudicated or determined in a case but every other matter which the parties might and ought to have litigated or which was incidental to or essentially connected with the subject matter of the litigation - this Court no longer open to the Appellants to contend that the principles of constructive res judicata would not debar them from raising the question which, as observed earlier, could and indeed ought to have been raised by them in the previous round of litigation. The High Court was, in that view of the matter, perfectly justified in holding that the plea sought to be raised by the Appellants in the purported exercise of liberty given to them by the orders of this Court dated 9th April, 2008 in Civil Appeal No. 5091 of 2004 was not legally open and should not be allowed to be urged.
Whether the 1966 Regulations indeed confer any right upon the grantees whose grant has lapsed by passage of time to stay in possession till such time one of the grounds enumerated under Regulation 151 becomes available to the Administration for their eviction? - HELD THAT:- Regulation 141 of the 1966 Regulations classifies classes of tenants while Regulation 142 and Regulation 143 deal with occupancy tenants and non-occupancy tenants respectively. It is common ground that the Appellants do not answer the description of occupancy tenants or non-occupancy tenants within the meaning of Regulation 142 and Regulation 143 - The expiry of the period of grant as in the case at hand would oblige the grantees to surrender the possession to the administration. That obligation or liability incurred under the 1926 Regulation continues to hold good, notwithstanding the repeat of the 1926 Regulations by the Regulations of the year 1966.
If a grantee of an expired grant had incurred the liability to surrender possession of the granted property, such liability would remain enforceable notwithstanding the repeal of the Regulations under which such liability arose. The argument that the liability gets extinguished by reason of Regulation 144(1)(a) of the 1966 Regulations is, in our opinion, legally unsound. This is said for two reasons. Firstly, because the contention flies in the face of Regulation 211 which continues the obligation incurred under the 1926 Regulations. So long as the liability incurred is recognized and continued by the repealing Regulation, the same can be enforced in law. Secondly, because the interpretation of Regulation 144(1)(a) itself does not admit of a situation where the liability to surrender possession not only becomes extinct but is enlarged into a right to stay in possession in perpetuity - The right to continue would however, depend on whether the person in occupation has a valid grant in his favour, even on the date the 1966 Regulations came into force. If the answer is in affirmative, such grant may be treated to be a grant under the 1966 Regulations, no matter, it was in fact a grant under the 1926 Regulations.
The grantee cannot stay in possession for more than 60 years. The argument that an old grantee can stay in possession in perpetuity so long as there is no violation of Regulation 151, therefore, needs to be noticed only to be rejected. The Appellants, in the present case, no doubt may have protection under the 1966 Regulations because the grant in their favour was deemed to have been renewed upto 1994 was in existence in 1966 but such protection would cease with the expiry of the 60 years period in 1994 - there are no hesitation in answering the question in negative.
Appeal dismissed.
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2014 (3) TMI 1214
Dishonour of Cheque - discharge of legally enforceable debt or liability or not - cross-examination of witnesses - principles of natural justice - HELD THAT:- Neither in the complaints nor in her depositions did the complainant gave details of the loan which she claims to have given, such as the exact amount of each loan, the date on which it was paid and the rate of interest agreed to be paid to her. There is no valid explanation for not giving all such details.
Admittedly, the respondent before this Court is not the only person to whom loan is alleged to have been given by the complainant. Admittedly, the complainant had filed complaints under Section 138 of Negotiable Instruments Act against Smt. Gomti Dutta and Keshvi Dutta. She claims to have given loans to them. It would be difficult, in the facts and circumstances of the case, to believe that she kept on giving loan to several persons, despite not having enough fund with her, for this purpose.
According to complainant, even her sisters had raised loan from a society for advancing money to her. It would be difficult to believe that the sisters of the complainant would have incurred liability towards a society, to extend a loan to the complainant, not for her personal need, but for lending that amount to a person who is stranger to them. Moreover, there is no explanation for not producing the aforesaid persons in the witness box.
Though the case of the respondent is that the aforesaid diary bears the signature of the appellant/complainant Kajal, there is no evidence to prove the alleged signature of the complainant/appellant on the aforesaid document. In her cross-examination, the complainant/appellant has nowhere admitted that the aforesaid diary bears her signature. She only admitted that it was a diary which belongs to the father of the respondent who was engaged in the business of building material and property dealing. No handwriting expert was examined by the respondent to prove the alleged signatures of the complainant/appellant on the aforesaid document. Since, the respondent has failed to prove that the aforesaid document bears signature of the complainant/appellant, any reliance on it for the purpose of proving the alleged repayment would be wholly misplaced.
Though the appellant/complainant has failed to prove that she had advanced loan to the extent of Rs.10.40 lakh, the evidence which has come on record clearly shows that she had advanced a loan of at least Rs.3.00 lakh to the respondent which he is yet to repay. Therefore, it cannot be said that the cheques which the respondent had issued to the complainant/appellant were wholly without any consideration.
The provision of Section 3 of the Punjab Registration of Money Lenders’ Act, 1938 does not debar a money lender from instituting a complaint under Section 138 of the Negotiable Instruments Act, 1881, which is a remedy enforceable before a criminal court, and totally independent of a civil suit. The criminal liability is incurred only in case a cheque is issued in discharge of a debt or other liability, the said cheque is dishonoured for want of funds and the borrower fails to make payment of the amount of the cheque even after receipt of a notice from the lender.
The respondent is convicted under Section 138 of the Negotiable Instruments Act, 1881, in all the complaints which are subject matter of these appeals. The learned counsel for the respondent states, on instructions from the father of the respondent who is present in the Court that if, the respondent is sentenced only to pay a fine of Rs.3.00 lakh, in aggregate in all the complaints which are subject matter of these appeals, the respondent undertakes to pay the said amount by way of three monthly instalments of Rs.1.00 lakh each - The respondent is sentenced to pay fine of Rs.3.00 lakh or to undergo RI for two (2) years in default. The aforesaid sentence is cumulative for all the complaints subject matter of these appeals. The aforesaid amount shall be paid to the complainant/appellant in three (3) monthly instalments of Rs.1.00 lakh each, falling due on 15.4.2014, 15.5.2014 & 15.6.2014.
Appeal disposed off.
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2014 (3) TMI 1213
Rejection of books of account - trading addition by estimation on net profit of contract business - HELD THAT:- We find that books of account of the assessee are defective for the reasons mentioned in the order of the AO and the learned CIT(A) and no cogent explanation in this regard has been brought on record and, therefore, we find no infirmity in the order of learned CIT(A) who has rightly confirmed the action of the AO for invoking the provisions of s. 145(3)
Estimation of NP no comparable case was given by AO and learned CIT(A). Further, we find force in the contention of the learned Authorised Representative that this year was the second year of the assessee in contract business. However, in current year the contract receipts of the assessee have increased by more than 6 times from last year. The NP rate is also better that last year, therefore, in view of the decision of Gotan Lime Khaniz Udhog [2001 (7) TMI 19 - RAJASTHAN HIGH COURT] even if the provisions of s. 145(3) are invoked, in the present circumstances and facts of the case, no addition is called for. AO is not justified in making any addition on this account and addition confirmed by learned CIT(A) is directed to be deleted. Thus, ground No. 1 of the assessee is dismissed and ground No. 2 of the assessee is allowed.
Undisclosed investment in the plot purchased in the name of partnership firm - Addition on account of sharing of assessee in total alleged on-money payment paid by firm for purchase of Plot in which the assessee was partner - HELD THAT:- We find that the Department has carried out search over the assessee and no incriminating document was found to show undisclosed investment by the assessee in the purchase of the plot in the name of partnership firm Kamakshi International. We find that the addition was made/sustained in the hands of this assessee merely on surmises, conjectures, probabilities and possibilities without bringing any positive evidence.
As admitted fact that the plot was purchased in the name of partnership firm Kamakshi International who is a separate assessee of IT Act through the registered sale deed. The sale consideration shown in the registered sate deed is Rs. 1,20,00,000, and the assessee's contribution in the capital of the firm was only Rs. 60.000. Had the investment in plot was in profit-sharing ratio then the investment of the assessee should be Rs. 12,00,000. It means that the other partners have mainly contributed the source of the investment in the plot. Further, the onus under s. 69B is on the Department to prove the investment.
AO has not brought any positive material to show that the assessee has made undisclosed investment in the plot purchased in the name of partnership firm - Decided in favour of assessee.
Addition u/s 69B - interest thereon on account of alleged unaccounted/undisclosed investment from the hands of the assessee - HELD THAT:- We find that the AO has not brought any positive material to show that the assessee has made investment in loans through Shri Manish Tambi. The AO has not provided the copy of seized material to the assessee and effective opportunity of confrontation was not given to the assessee. The inquiries or material if any was gathered behind the back of the assessee, the same cannot be used against the assessee without providing opportunity of confrontation to the assessee. If the AO proposes to act on such material as he might have gathered as a result of his private enquiries behind the back of the assessee, he must disclose the substance of all such material to the assessee and if this is not done, the principles of natural justice stand violated.
Onus under s. 69B of IT Act is on Department to prove the investment has been made by the assessee, which was not discharged by the AO. Nor any positive material was brought ort records to show that the assessee has made cash loans to the ultimate borrowers through Shri Manish Tambi. Therefore,no addition is called for in the hands of this assessee.
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2014 (3) TMI 1212
Reopening of assessment u/s 147 - propriety of allowance of exemption u/s 54B - HELD THAT:- Audit Department had placed a note pointing out that it was incorrect. The note has been responded to by the Deputy Commissioner of Income Tax on 29th June, 2010 who pointed out that exemption allowed was in accordance with law.
In this situation, our attention has been invited to judgment of Kelvinator of India Limited [2010 (1) TMI 11 - SUPREME COURT] to urge that mere change of opinion cannot constitute a reason to review the assessment.
As submitted that admittedly the land was being used as agricultural land and as it falls under the Urban Agglomeration being urban land, a return was required to be filed under the Urban Land and Ceilings Act and retainable land was worked out to 6000 Sq. Mtrs. As stated that it has been sold as agricultural land only and it was never converted and put to non-agricultural purposes.
Advocate Parchure states that as land was in urban agglomeration and covered under the Urban Land Ceilings Act, for the purposes of Income Tax act, the same cannot be accepted as agricultural land. He further points out that a development scheme was also sanctioned under Section 20 of U.L.C. Act on said land.
Question before this court is about the validity of change of opinion, as a ground sufficient to issue notice under Section 148 of the Income Tax Act. Admittedly, there were no section 263 proceedings.
In this situation, place the matter for further consideration on 16th April, 2014 as jointly requested. We direct the respondent no.1 to complete the assessment in the meanwhile. However, same shall be without prejudice to rights and contentions of the petitioner.
Petitioner shall cooperate with the department for completion of such assessment.
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2014 (3) TMI 1211
Scrutiny Assessment - Satisfaction of instructions issued by CBDT for selection of cases for scrutiny for the financial year 2007-08 - HELD THAT:- Admitted for determination of following substantial questions of law, which arise in this appeal:
i) Whether on the facts and in the circumstances of the case, Hon'ble ITAT New Delhi was right in law in quashing the notice as well as assessment made in the case of the assessee by holding that instructions issued by CBDT for selection of cases for scrutiny for the financial year 2007-08 are not shown to have been satisfied for assumption of jurisdiction whereas the case of assessee was rightly picked up for scrutiny as per guidelines contained in CBDT instruction for selection of cases for scrutiny?
ii)Whether Hon'ble ITAT New Delhi was right in law in quashing the notice as well as assessment made as the assessment for the year A.Y 2004-05 was framed by making disallowance of Rs.5,60,207/- and the appeal of the assessee was pending before CIT(A) and as per the CBDT instructions contained in Scrutiny Guidelines for F.Y 2007-08 in clause 2(v)(b) provided that all cases in which an appeal was pending before the CIT(A) against an addition/disallowance of Rs.5 lacs or above, or the Department had filed an appeal before ITAT against the order of the CIT(A) deleting such an addition/ disallowance and an identical issue in arising in the current year be taken for scrutiny; the Hon'ble ITAT misinterpreting the said instructions wrongly held that the instructions issued by CBDT are not shown to have been satisfied for assumption of jurisdiction?
iii)Whether Hon'ble ITAT New Delhi was right in law in quashing the notice as well as assessment made in the case of assessee without adjudicating upon the issues raised by the Revenue as well as the assessee by way of appeals filed before the Hon'ble Tribunal?
To be listed for final hearing on 22.05.2014.
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2014 (3) TMI 1210
Claim of forfeiture of the Security Deposit raised by the defendants - equitable set-off or not - Seeking a decree against the Defendants No. 1 and 2 on admissions - Order XII Rule 6 of the Civil Procedure Code, 1908 - HELD THAT:- The object of Order XII Rule 6 is to enable a party to obtain a speedy judgment to the extent of the admissions of the Defendant to which relief the Plaintiff is entitled to. The rule permits the passing of the judgment at any stage without waiting for determination of any other question. It is a settled proposition of law that before a judgment can be passed under Order 12 Rule 6, the admission must be clear, unambiguous, unconditional and unequivocal.
As per the law laid down by the Supreme Court for a Judgment to be passed on admission, the admission has to be clear, unambiguous and unequivocal. It is an enabling provision, it is neither mandatory nor peremptory but discretionary. The judicial discretion, has to be exercised keeping in mind that a judgment on admission is a judgment without trial which permanently denies any remedy to the defendant, by way of an appeal on merits. The valuable right of a defendant to contest the claim should not be denied unless the admission is clear, unambiguous and unconditional.
Seeking setoff of the amount of Rs. 15,00,000/- as the setoff has not been lawfully claimed in the written statement - HELD THAT:- As per the Jitendra Kumar Khan case [[2013 (8) TMI 1057 - SUPREME COURT]] equitable set-off is distinct from the legal set-off as envisaged by Order VIII rule 6 of the Code. Equitable set-off is different than the legal set-off and it is independent of the provisions of the Code of Civil Procedure. However for claiming equitable set-off it must be established that the mutual debts and credits or cross-demands must have arisen out of the same transaction or are connected in the nature and circumstances. The Plea of equitable set-off is raised not as a matter of right but it is within the discretion of the court to entertain and allow such a plea or not.
As per the CRB Capital case [[2005 (5) TMI 346 - HIGH COURT OF DELHI]] equitable set-off can be claimed even for an unascertained sum of money provided the same arises out of the same transaction.
In the present case, the claim of forfeiture of the Security Deposit raised by the defendants arises out of the same transaction and is in the nature of an equitable set-off. This of course is a prima facie expression of opinion. Whether the claim of forfeiture would be ultimately allowed or not would depend upon the evidence adduced by the Defendants so as to sustain a claim of equitable set-off.
Application dismissed.
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2014 (3) TMI 1209
Addition on account of credit entries - Addition u/s 41(1) - HELD THAT:- The amounts outstanding against the assessee are relatable to the transactions conducted in the earlier year and were brought forwarded from year to year in the hands of the assessee and the said amount had not been paid by the assessee and the same are outstanding and the assessee acknowledges the same. In such circumstances where the assessee continues to recognize the cash credits as payable by him and also on account of the amount not being disbursed till date on account of commission payable, does not justify the invoking of provisions of section 41(1) of the Act against the assessee Accordingly, we direct the Assessing Officer to delete the addition under section 41(1) - The ground of appeal Nos.2 and 3 raised by the assessee are thus allowed.
Addition on advances received - HELD THAT:- Despite several opportunities the assessee failed to produce the evidence in respect of the said advances and the said were treated as income of the assessee.
Even before the CIT (Appeals) the assessee furnished copies of account of the said party and stated that the outstanding balances in the accounts of the said party were on account of purchases. The second advance of Rs.3,97,000/- outstanding in the account of M/s M.K. Industries was claimed to have inadvertently shown as advance from customers. Although the said amount outstanding was on account of purchases, however the assessee failed to furnish any evidence in respect of the same and the addition was confirmed in the hands of the assessee. The assessee had filed to furnish any further evidence before us and in view thereof we find no merit in the ground of appeal No.4 raised by the assessee and the same is dismissed.
Disallowance of various expenses - AO during the course of assessment proceedings had noted the assessee to have incurred expenses on repair and maintenance, advertisement, postage & courier, printing & stationery, traveling expenses and Diwali expenses and disallowed - HELD THAT:- The said disallowances were made in the hands of the assessee as the assessee had failed to produce the bills and books of account before the Assessing Officer. In the totality of the facts and circumstances of the case, we uphold the disallowance in the hands of the assessee. However, we restrict the same to Rs.25,000/-. The ground of appeal No.6 raised by the assessee is partly allowed.
Disallowance of 1/5 th out of car expenses and depreciation on car for personal use of car - HELD THAT:- We restrict the said disallowance for personal use of the vehicle by the assessee to the extent to 1/10 t h of the total expenditure. The ground of appeal raised by the assessee is thus partly allowed.
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2014 (3) TMI 1208
Disallowance u/s 80JJAA - Additional wages to “new regular workmen employed by the assessee in the previous year” - new regular employees in respect of whom the claim was denied on the basis that they have not completed 300 days in the preceding year - CIT-A has held that the claim of deduction under sec.80JJAA in respect of regular workmen recruited in the earlier years and pertaining to relevant assessment year can be allowed only if the claim has been upheld in the assessment year in which the recruitment of such workmen was made - HELD THAT:- As rightly held by the Commissioner of Income tax (Appeals), the above dictum of statute cannot by any stretch of imagination be extended to new regular workmen employed in the preceding year. Accordingly, we agree with the finding of the Commissioner of Income-tax (Appeals) that the claim of the assessee for deduction under sec.80JJAA in respect of regular workmen employed in the earlier years relevant to the assessment year is not sustainable in law. As this is the main issue raised by the assessee, it is not necessary to deal with the arithmetics, of different assessment years. Accordingly, we uphold the orders of the lower authorities including enhancement of disallowance made by the Commissioner of Income tax (Appeals) for the assessment year 2006-07. Decided against assessee.
Disallowance made under sec.14A read with Rule 8D - HELD THAT:- Sec.14A as well as Rule 8D do not apply for the assessment year 2006-07. Proportionate disallowance made by the Assessing Officer of the loan interest is not on any verifiable basis. It is a blunt disallowance. It cannot be upheld. Therefore, the said disallowance is deleted. This ground is decided in favour of the assessee.
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2014 (3) TMI 1207
Penalty u/s 271(1)(c) - assessee made a wrong claim of depreciation knowing fully well that the assets are not owned by him and not transferred by M/s. IVRCL - HELD THAT:- It is not a case of concealment of income and also it cannot be said that the assessee has furnished inaccurate particulars of the income. In view of the above fact finding, it is difficult for us to take a decision in the absence of allegation of perversity. Moreover, we noticed that the Tribunal has recorded the fact that the assessee claimed depreciation on plant and machinery taken on lease from M/s. IVRCL on 30.03.2001.
It is in consonance with the agreement. Tribunal has not agreed with the contention of the assessee’s counsel in its appeal in quantum addition. Therefore, if the assessee claims any deduction for any reason under law and such deduction is not allowed, this cannot be said to be concealment of income or furnishing inaccurate particulars of income. Assessee thought that this income should not be added to for taxation purpose. Therefore, entire income was disclosed without giving any wrong or inaccurate particulars and the benefit allowable under law claimed was not allowed.
Learned Tribunal, in our view, has correctly appreciated the fact and applied the law in deleting penalty imposed by the Revenue. Hence, we do not find any reason to interfere with the same.
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2014 (3) TMI 1206
Cancellation of sale deed - Government order has been introduced on 13th August, 2013 an sale deed in question is prior to it - whether the sale deed can be cancelled by taking reference of the Government order dated 13.8.2013 - HELD THAT:- The question of retrospectivity and prospectivity does not arise in such cases if it has been obtained by fraud as fraud unravels everything. In the present case, rightful order has been passed by the Registering Authority in the facts of the case, after enquiry.
Petitioner's much insistence is on the fact that he is bona fide purchaser for value of the property and accordingly his interest be protected. This Court is not at all going on the issue, as to whether he is bona fide purchaser for value or not, the crucial issue is that the incumbents from whom he has purchased the property, they had no right to sell the property i.e. they had no legal authority to execute sale deed. Such transactions by imposters cannot be approved of.
Once incumbents who have proceeded to execute the sale deed have no authority to execute sale deed then rightful order has been passed and accordingly in the facts of the case, there is no occasion for this Court to take a different or contrary view as any interference would subscribe void transactions - writ petition is dismissed.
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2014 (3) TMI 1205
Possession of suit property - Validity of sale deed - The plaintiffs claim physical and vacant possession of the suit property on the basis of their title. They also claim damages on account of being out of possession of the suit property. - HELD THAT:- So far as the plaintiff’s application under Order 7 Rule 11 is concerned, the logical consequence of the defence/case of the defendant/counter claimant being held as untenable in law, would be that the said counter claim would be liable to rejected under Order 7 Rule 11 CPC for want of cause of action.
The cause of action pleaded by the defendant in the counter claim is the so-called oral agreement and understanding that the plaintiffs shall re-transfer the suit property to the defendant in terms and conditions pleaded by the defendant. The defendant is precluded from pleading such an agreement, arrangement or understanding.
As already noticed above, no other cause of action or basis for the reliefs sought in the counter claim has been disclosed. It is clear that no cause of action has arisen in favour of the defendant to seek the cancellation of the sale deed dated 01.11.2011 registered on 02.12.2011, in respect of the suit property, or to seek the execution of a fresh sale deed in favour of the defendant by the plaintiff. No cause of action has arisen to require the plaintiffs to return all the original chain of documents in respect of the suit property to the defendant under any circumstance.
In view of the aforesaid discussion, both the aforesaid applications of the plaintiffs are allowed. The suit is decreed in respect of the relief of possession in respect of the suit property in favour of the plaintiffs and against the defendant.
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2014 (3) TMI 1204
Revision u/s 263 by CIT - under valuation of the capital gains disclosed by the assessees and accepted by the Assessing Officer, in relation to the property given for development - HELD THAT:- We are not convinced with this reasoning given by the Commissioner. The explanation of the assessees that the stamp duty levied on Development Agreement is determined by the Sub-registrar on a basis, which is different from the stamp duty leviable on other transactions for conveyance of immovable properties, in this behalf, is quite convincing.
As such, the value determined by the sub-registrar as on 15.11.2008 for purposes of stamp duty for registration of development agreement-cum-GPA, cannot be taken as clinching and determinative of the value in terms of S.50C. It is more so, because the assessees have no means of either estimating or evaluating the market value of the property, but to rely upon a certificate as issued by the property registering authorities. Further, the manner or method adopted by the sub-registrar office for arriving at the value of the property, for stamp duty purposes, is not known to the assessees, and the stamp duty, in fact, was claimed to have been paid by the developer.
We are of the view that the AO having accepted the value adopted by the Assessees for computation of the capital gains, it is beyond the scope of the powers of the Commissioner of Income-tax to direct the Assessing Officer to recompute the same by making recourse to the provisions of S.50C of the Act. We are supported in this behalf by the decision of the Madras High Court in the case of CIT V/s. Smt. Tasneem Z. Madraswala [2009 (12) TMI 52 - MADRAS HIGH COURT ] relied upon by the learned counsel for the assessee.
We find that the impugned orders of assessments are neither erroneous nor prejudicial to the interests of the Revenue, and consequently, the Commissioner of Income-tax was not justified in exercising his revisionary powers u/s 263 - Appeal of assessee allowed.
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2014 (3) TMI 1203
Deduction u/s 80P - Assessee is a co-operative society registered under the Karnataka State Co-operative Societies Act - whether assessee carrying out the banking activities? - AO while denying the deduction u/s 80P(2)(a)(i) took the view that the Assessee is a primary co-operative bank and therefore provisions of Sec. 80P(4) are applicable in the case of the Assessee - whether the Assessee is a co-operative bank or not? - Whether co-operative society compiling with first condition of primary object or principle business transacted by it is a banking business? - HELD THAT:- It is not necessary that the co-operative society should have a banking licence as per the definition under the Income Tax Act for carrying on banking business. If licence is not obtained it may be an illegal banking business under the other statute. What we have to see whether the nature of the business carrying on by the assessee is a banking business or not. The Income Tax in our opinion is not concerned whether the banking business carried on by the assessee is legal or illegal. The income has to be assessed u/s 14 of the Income Tax Act under the same head even if the nature of the business is illegal. If we look into chapter III of the bye-laws which consists of fund of the society, we noted that the types of the deposits which the assessee has accepted as per bye-laws 7 are the same as are being accepted during the course of the carrying out the banking activities.
Paid up share capital and reserve of which are 1 lakh or more - So far as the second condition is concerned, there is no dispute that the paid up share capital and reserves in the case of the Assessee is more than Rs. 1 lac. Therefore, the Assessee satisfies the second condition.
By laws of the co-operative society do not permit admission of any other co-operative society as a member, it will be regarded to be primary co-operative bank - So far as the third condition is concerned, we noted that Sec. 16 of The Karnataka State Co-operative Societies Act, 1959 permits admission of any other co-operative society as a member - in case the rules and bye-laws of the other co-operative society provides otherwise, the co-operative society may not be admitted as a member of the co-operative society. The person, as per sub-section (2), must be qualified for becoming member not only u/s 16(1) but also as per the rules and bye-laws of the co-operative society. We cannot read sub-section (2) in the manner that the rules and bye-laws cannot permit the admission of any other co-operative society as a member of the co-operative society. Had that been the intention of the legislature, they would have not used the words “this Act, rules and bye-laws” in sub-section (2).
Qualification of Membership - Condition for completing 18 years of age cannot be imposed for co-operative society. This condition can be applied only to an individual. From this, it is apparent that the bye-laws of society does not permit the admission of any other co-operative society as member. Thus the third condition for becoming primary co-operative bank is also complied with. Since the assessee society complies with all the three conditions, therefore, in our opinion the assessee society becomes a primary co-operative bank and in view of explanation (a) of section 80P(4) it has to be regarded as a co-operative bank and is hit by section 80P(4).
Section 80P(2)(a)(i) nowhere talks of co-operative credit society and therefore the distinction made under the Banking Regulation Act cannot be imported u/s 80P(2)(a)(i).
Assessee has to be regarded to be a primary co-operative bank as all the three basic conditions are complied with, therefore, it is a co-operative bank and the provisions of Sec. 80P(4) are applicable in the case of the Assessee and Assessee is not entitled for deduction u/s 80P(2)(a)(i). We, therefore, confirm the order of the CIT(A) not allowing deduction u/s 80P(2)(a)(i) to the assessee. - Decided against assessee.
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