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2017 (10) TMI 1653
Benami transaction proceeding initiated by the Initiating Officer (IO) - validity of proceeding under the Prohibition of Benami Property Transactions Act, 1988 - retrospectivity or prospectivity of the penal provisions in the 2016 Amendment Act - jurisdictional violation of exercise of powers under the 1988 Act (as amended) - Company denied that the provisions of the 1988 Act are at all applicable to the facts of the present case and if at all, the IO has jurisdiction only to inquire under Section 68 of the Income Tax Act - HELD THAT:- This Court must notice the relevance of Sections 2(9)(B) and (D) of the 1988 Act (as amended) which, inter alia, collectively define a benami transaction as an arrangement in respect of a property carried out in a fictitious name where the person providing the consideration is not traceable.
This Court, on the basis of materials placed, is satisfied that the IO has applied his mind to the facts painstakingly collected and the issue now requires solid factual adjudication at the level of the AA. This Court is also satisfied that the preliminary legal objection taken by Mr. Kar is not persuasive for a Writ court to interdict a proceeding under the 1988 Act qua a private limited company where the dominant shareholders are de facto the Company itself and it has become necessary to identify the structure and role of the entities in respect of a transaction which requires exploration at the appropriate factual level on its alleged benami colour.
Distance claimed by Mr. Kar of the shareholders from any interest in the immovable property of the Company on the strength of the decision reported in [1954 (10) TMI 2 - SUPREME COURT] (supra) would depend on the ground situation influencing the pecuniary proximity in a given case which, require to be exhaustively examined at the level of the AA.
This Court cannot be oblivious to the fact that the attachment declared by the IO is provisional and the petitioners should not shy away from an adjudication by the AA if they are sure that factually the Company stands on firm ground.
Point raised by petitioner against retrospectivity of the penal provisions in the 2016 Amendment Act is answered with the observation that the 1988 Act, as amended in 2016, imbibes the colour of a statute in restraint of acts constituting benami transactions. The Act does not seek to create any vested/substantive rights, only indirectly protecting transactions which fall within the exceptions of a benami transaction, viz. Section 9(A)(i) to (iv).
Section 1(3) of the 1988 Act itself provides for prospectivity of its operative portions, viz. its penal clauses, in contra distinction to its definition/defining provisions. Furthermore, this Court has no reason to accede to Prayer (a) of the Writ Petition upon noticing that the steps contemplated under Section 24 (supra) follow the notice of the IO and, being procedural apply in seriatim to the notice for the purpose of identifying a benami transaction prohibited in the statute book w.e.f 19 May, 1988.
The orders impugned of the IO are thus not interfered with. Accordingly, no jurisdictional violation of exercise of powers under the 1988 Act (as amended) is found by this Court.
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2017 (10) TMI 1652
Addition u/s. 14A r.w.r. 8D - Mandation of recording satisfaction - HELD THAT:- We find that the issue involved in these appeals is squarely covered by the order of coordinate Bench in the case of assessee itself [2017 (6) TMI 495 - ITAT DELHI] held as AO did not record satisfaction after verification of the books of account about the correctness of the claim of disallowance made by the assessee before invoking provisions of Rule 8D as provided u/s 14A(2) of the Act. Therefore, respectfully following the decision of the Hon'ble Delhi High Court in CIT Vs. Taikisha Engineering Pvt. Ltd [2014 (12) TMI 482 - DELHI HIGH COURT] we reverse the finding of the ld CIT(A), and direct the AO to delete the disallowance.
Thus following the above decision of coordinate Bench, the issue is decided in favour of the assessee and against the Revenue. The decisions relied by the ld. DR, being distinguishable on facts, render no help to the Revenue in the instant case.
MAT - Addition of the disallowance to the book profit of assessee for the purpose of computation of MAT liability - As we find no justification to discard the findings reached by the ld. CIT(A) reached on the basis of interpretation of section 115JB. We also support the deletion of this addition laying our hands on the decision of Vireet Investment (P) Ltd [2017 (6) TMI 1124 - ITAT DELHI]
Assessee appeal allowed.
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2017 (10) TMI 1651
CENVAT Credit - input service or not - For promoting the sales the appellant has paid the sales commission to its agent - HELD THAT:- It appears that the issue has came up before the Tribunal as M/S ESSAR STEEL INDIA LTD. VERSUS COMMISSIONER OF C. EX. & SERVICE TAX, SURAT-I [2016 (4) TMI 232 - CESTAT AHMEDABAD] as well as in the case of M/S MANGALAM CEMENT LTD., M/S J.K. LAKSHMI CEMENT LTD, M/S K.E.I. INDUSTRIES LTD VERSUS CCE, UDAIPUR [2017 (12) TMI 426 - CESTAT NEW DELHI] wherein it was observed that With regard to availment of Cenvat credit on the commission paid for sale promotion activities, the CBEC vide Circular No. 943/4/2011-CX. Dated 29/04/2011 has clarified that Cenvat credit is admissible on the services of the sale of the dutiable goods on commission basis.
There are no reason to sustain the impugned order. Same is set aside - appeal allowed.
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2017 (10) TMI 1650
Suit for specific performance of the agreement of sale - order of Single Judge was a 'judgment' finally affecting the rights of the parties or not - non-maintainability of Letters Patent Appeal - HELD THAT:- The right of the Letters Patent Appeal to the High Court depends upon whether or not the decision of the Single Judge appealed from affects the merits of the question between the parties and their valuable rights. Whether an order is a 'judgment' or an 'interlocutory order' depends upon whether or not, it has finally decided the rights of the parties and whether it has the effect of affecting the rights of the parties. For an order to be a 'judgment', it is not always necessary that it should put an end to the controversy or terminate the suit. An 'interlocutory order' determining the rights of the parties in one way or other is also a 'judgment'.
The order allowing the application impleading Respondent No. 3 as assignee (Order XXII Rule 10 Code of Civil Procedure) after 27 years of filing of the suit vitally affects the valuable rights of the Appellant. The order allowing amendment of plaint by impleading Respondent No. 3 as 'Plaintiff No. 3' on the basis of alleged assignment of agreement dated 24.08.1987 decides a vital question which concerns the rights of the parties and hence is a 'judgment' to maintain the Letters Patent Appeal. Allowing of such application after 27 years of filing suit for specific performance would cause serious prejudice to the Appellant-Defendant depriving valuable right of defence available to the Appellant and hence the order of Single Judge allowing the Chamber Summons is a 'judgment' within the meaning of Clause 15 of the Letters Patent Appeal.
When the Plaintiff assigns/transfers the suit during the pendency of the suit, the assignee is entitled to be brought on record and continue the suit. Order XXII Rule 10 Code of Civil Procedure enables only continuance of the suit by the leave of the court. It is the duty of the court to decide whether leave to be granted or not to the person or to the assignee to continue the suit. The discretion to implead or not to implead parties who apply to continue the suit must be exercised judiciously and not arbitrarily.
The High Court was not right in holding that mere alleged transfer/assignment of the agreement would be sufficient to grant leave to Respondent No. 3 to continue the suit. From the filing of the suit in 1986, over the years, valuable right of defence accrued to the Appellant; such valuable right of defence cannot be defeated by granting leave to the third Respondent to continue the suit in the application filed Under Order XXII Rule 10 Code of Civil Procedure after 27 years of filing of the suit - the application filed for impleading Respondent No. 3 as Plaintiff No. 3 was not filed within reasonable time. No explanation is offered for such an inordinate delay of 27 years, which was not kept in view by the High Court.
The application was filed after 27 years of filing of the suit. Of course, the power to allow the amendment of suit is wide and the court should not adopt hyper technical approach. In considering amendment applications, court should adopt liberal approach and amendments are to be allowed to avoid multiplicity of litigations. We are conscious that mere delay is not a ground for rejecting the amendment. But in the case in hand, the parties are not rustic litigants; all the Respondents are companies and the dispute between the parties is a commercial litigation.
The impugned order, allowing Chamber Summons No. 187 of 2014 filed after 27 years of the suit would take away the substantial rights of defence accrued to the Appellant and the same cannot be sustained - Appeal allowed.
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2017 (10) TMI 1649
Principles of strict construction - Territorial Jurisdiction of filing chargesheets - Commitment of Organised Crime - 39 crimes of different nature including murder, attempt to murder, waging war against the State, extortion, rioting, etc. - Whether charge sheets filed in competent Courts outside the National Capital Territory of Delhi can be taken into account for the purpose of constituting a "continuing unlawful activity"? - Whether there can be prosecution under MCOCA without any offence of organised crime being committed within Delhi? - HELD THAT:- The principles of strict construction have to be adopted for interpretation of the provisions of MCOCA, which is a penal statute9. However, it is no more res integra that even a penal provision should be interpreted to advance the object which the legislature had in view. The interpretation of Section 2(1)(d) of the Protection of Children from Sexual Offences Act, 2012 came up for consideration before this Court and Justice R.F. Nariman [2017 (7) TMI 1081 - SUPREME COURT] held It is thus clear on a reading of English, U.S., Australian and our own Supreme Court judgments that the 'Lakshman Rekha' has in fact been extended to move away from the strictly literal Rule of interpretation back to the Rule of the old English case of Heydon, where the Court must have recourse to the purpose, object, text, and context of a particular provision before arriving at a judicial result.
The commission of crimes like contract killings, extortion, smuggling in contrabands, illegal trade in narcotics, kidnappings for ransom, collection of protection money and money laundering, etc. by organised crime syndicates was on the rise. To prevent such organised crime, an immediate need was felt to promulgate a stringent legislation. The Government realized that organised crime syndicates have connections with terrorist gangs and were fostering narcotic terrorism beyond the national boundaries. MCOCA was promulgated with the object of arresting organised crime which was posing a serious threat to the society. The interpretation of the provisions of MCOCA should be made in a manner which would advance the object of MCOCA.
Extra Territoriality and Territorial nexus - HELD THAT:- The doctrine forbidding extra territorial legislation as held in Macloed's case was subsequently held to be of somewhat obscure extent. Statutes made by a Sovereign States cannot be said to be invalid on the ground of extra territoriality subject to certain conditions as is clear from the judgments referred to supra. The same principle was applied to State legislations in the United States of America. There is no distinction between the applicability of the aforesaid principle to civil or criminal statutes - In the present case, it is sufficient to examine whether there is a territorial nexus between the charge sheets filed in competent Courts within the State of Uttar Pradesh and the State of NCT of Delhi where the Respondents are being prosecuted. The prosecution of the Respondents under MCOCA cannot be said to be invalid on the ground of extra territoriality in case the nexus is sufficiently established.
Organised crime is not an activity restricted to a particular State which is apparent from a perusal of the Statement of Objects and Reasons. A restrictive reading of the words "competent Court" appearing in Section 2 (1)(d) of MCOCA will stultify the object of the Act - If members of an organised crime syndicate indulge in continuing unlawful activity across the country, it cannot by any stretch of imagination said, that there is no nexus between the charge sheets filed in Courts in States other than Delhi and the offence under MCOCA registered in Delhi. In such view, the submission of the Respondents that charge sheets filed in competent Courts in the State of Uttar Pradesh should be excluded from consideration cannot be accepted. It is held that 'competent Courts' in the definition of 'continuing unlawful activity' is not restricted to Courts in Delhi alone.
Crime is local - HELD THAT:- The submission of the learned Senior Counsel for the Respondents agreed upon that an activity of organized crime in Delhi is a sine qua non for registration of a crime under MCOCA. In the absence of an organized crime being committed in Delhi, the Accused cannot be prosecuted on the basis of charge sheets filed outside Delhi.
The words 'competent Court' in Section 2(d) of MCOCA is not restricted to Courts in Delhi and charge sheets filed in Courts in other States can be taken into account for the purpose of constituting continuing unlawful activity - There cannot be a prosecution under MCOCA without an organised crime being committed within Delhi - The judgment of the High Court is upheld though for different reasons.
Appeal disposed off.
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2017 (10) TMI 1648
Forging of sale deed - Criminal or civil nature proceedings? - HELD THAT:- The allegations levelled in the criminal proceedings lodged by respondent no.2, are of civil nature and the criminal proceedings are not called for. The same are hereby quashed.
It will be open to respondent no.2 to continue or take any civil proceedings in accordance with law - SLP disposed off.
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2017 (10) TMI 1647
Disallowance u/s.14A r.w.r. 8D(2)(iii) - CIT(A) directed the AO to recompute the disallowance u/s.14A r.w.r.8D and to consider 0.5% of the average of the value of the investment, the income from which does not or shall not form part of the total income - as contented CIT(A)’s direction to re-compute the disallowance u/s.14A r.w.r.8D(2)(iii) was erroneous - HELD THAT:- As the issue was squarely covered by the decision of the Co-ordinate Bench of this Tribunal in the case of M/s.Computer Age Management Services (P) Ltd [2014 (11) TMI 1030 - ITAT CHENNAI] computation of the disallowance under section 14A read with rule 8D(2) (iii) which is issue in the assessee’s appeal is restored to the file of the Assessing Officer for re-computation in line with the direction given above. No disallowance under section 14A read with rule 8D(2)(ii) and (ii) can be made in this case. Thus direct the Assessing Officer to re-compute the disallowance under Rule 8D(2)(iii) by taking the amount equal to ½ percentage of the average value of the investment which has given rise to the income which does not form part of total income.
Revenue appeal dismissed.
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2017 (10) TMI 1646
Review petition - petitioner has sought for review of the order which has been passed by us [2017 (4) TMI 1632 - RAJASTHAN HIGH COURT] petitioner contended that merely because the paper book was not supplied, the review petition was dismissed, therefore, the appeal is required to be heard on merits - HELD THAT:- In our considered opinion, both the appeals being identical and once the judgment of the tribunal in one appeal stands confirmed between the same parties even if it is on technical ground, therefore, the same is required to be followed in the next assessment year also.
In that view of the matter, the contention raised by petitioner is required to be rejected.
Hence, the review petition is not entertained, the same stands dismissed.
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2017 (10) TMI 1645
Seeking leave to withdraw the petition with liberty to urge the grounds raised therein at the appropriate stage in the adjudication proceedings - HELD THAT:- Petition dismissed as withdrawn with liberty as prayed for.
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2017 (10) TMI 1644
Search or seizure - Correctness of officer of the respondents visiting the premises of the petitioner - whether the visit on October 19, 2005 was a simple visit or search or seizure?
The serious allegations levelled against the respondents officer by the petitioner, which was required to be noticed that partner of the firm objected the said illegal search and seizure proceedings but he was threatened of being arrest in case of interference and-his statement was recorded no denial has come on record.
HELD THAT:- In view of the provisions of section 82 which clearly envisage that any documents or books or things which in his useful for or relevant to any proceeding under this Chapter are secreted in any place, he may authorise any Assistant Commissioner of Central Excise to search for and seize or may himself search for any seize, such documents or books or things - From the documents, which are referred in resumption memo, it is very clear that the documents which are referred under section 82 of the Act were seized without search warrant.
The action of the respondents is contrary to section 82 of the Act. The whole proceedings are vitiated, therefore, the proceedings of October 19, 2005 deserves to be quashed and set aside - petition allowed.
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2017 (10) TMI 1643
Deduction u/s 80IA(5) - generation of power through windmill - As per AO it is not available as per provisions of section 80IA (5) as the loss of power unit in initial year was to be carry forward and setoff against the current year’s profit of power unit. As there is no profit available from power unit in the current year, after set-off, claim u/s 80IA would be nil - HELD THAT:- The issue is squarely covered in assessee’s own case in the A.Y. 2010- 11 of Tribunal in which it was held as under: “In our considered opinion, the lower authorities have grossly erred in setting off notional losses with the profit of the eligible unit in the current year.
The Hon’ble High Court of Madras in the case of Velayudhaswamy Spinning Mills (P) Ltd [2010 (3) TMI 860 - MADRAS HIGH COURT] held as under: “we are therefore, of the view that loss in the year earlier to the initial assessment year already absorbed against the profit of the other business cannot be notionally brought forward and set-off against the profits of the eligible business as no such mandate is provided in section 80IA (5) of the Act.”
We therefore, do not find any merits in the findings of the first appellate authority. We, accordingly, direct the Assessing Officer to allow the claim of deduction u/s 80IA of the Act to the assessee as claimed by it - Decided in favour of assessee.
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2017 (10) TMI 1642
Liability of Advertisement tax - Direction to pay Advertisement tax in respect of glow signs and neon signs board affixed in or outside the premises of dealers, distributors and retailers and to pay the same to M/s. Shouraditya Advertisement, a collecting agency for the purpose of collection of advertisement tax.
HELD THAT:- The issue decided in the case of BHARTI AIRTEL LIMITED, IDEA CELLULAR LIMITED, VODAFONE ESSAR LIMITED, RELIANCE TELECOM LIMITED AND OTHER VERSUS THE STATE OF MADHYA PRADESH & OTHERS [2015 (1) TMI 1497 - MADHYA PRADESH HIGH COURT] where it was held that Considering the fact that the procedure, as prescribed under the Byelaws of 1978, has not been followed by the Municipal Corporation while directing respondent No.3 – contractor to recover 'advertisement tax' on their behalf, we quash the demand, which are subject matter in this batch of writ petitions and direct the Municipal Corporation to issue fresh demand regarding levy and collection of the 'advertisement tax', as per the rules of Byelaws and when the demand is finalized by the Municipal Corporation, then only the same may be given to respondent No.3 – contractor to recover it.
As the controversy involved in the present case stands concluded by the judgment delivered by the Division Bench, this Court does not find any ground or reason to take a different view of the matter and accordingly the present Writ Petition stands dismissed.
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2017 (10) TMI 1641
Disallowance of the additional depreciation on the cost of wind mill - assessee was not engaged in the manufacture or production of any article or thing - submission that the assessee is processing garnet sand and assessee had purchased a wind mill and had claimed additional depreciation in respect of the same - CIT(A) had allowed the assessee’s claim of additional depreciation on the ground that the provisions of Sec.2(29BA) defining the term ‘manufacture’ introduced w.e.f. 01.04.2009 provided for any change in a non-living physical object resulting in transformation of the object into a new and distinct object having a different name, character and use
HELD THAT:- A perusal of the decision relied upon by the AO in the Assessment Order shows that the decision related to assessment years before the amendment to Sec. 2(29BA) providing for the definition of term ‘manufacture’. Admittedly, the process involved in the conversion of the beach sand into garnet sand as has been extracted of the Ld.CIT(A) clearly shows that the process is one of manufacture.
This view of ours also find support from the decision of Sesa Goa Ltd. [2004 (11) TMI 14 - SUPREME COURT] Further, it is noticed that the Revenue has granted the benefit of deduction u/s. 80HHC for the AY 2003-04. Thus, even without the definition of the term manufacture u/s. 2(29BA), the Revenue has been holding that the assessee is doing the business of manufacturing. Now, to hold that the assessee is not doing manufacturing only for the purpose of denying the benefit of additional depreciation is not permissible. In these circumstances, we find no error in the findings as arrived at by the Ld. CIT(A) and consequently, it stands upheld.Appeal filed by the Revenue stands dismissed.
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2017 (10) TMI 1640
Seeking cancellation of Bail granted - Murder - it was contended by the complainant before the High Court that it was a case where the main accused (Mr. Solanki) who is a former Member of Parliament had won over all the witnesses including the eye-witnesses by his sheer power and position - whether High Court could order retrial in exercise of writ jurisdiction under Article 226 of the Constitution of India? - HELD THAT:- The position which emerges is that in a criminal trial, on the one hand there are certain fundamental presumptions in favour of the accused, which are aimed at ensuring that innocent persons are not convicted. And, on the other hand, it has also been realised that if the criminal justice system has to be effective, crime should not go unpunished and victims of crimes are also well looked after. After all, the basic aim of any good legal system is to do justice, which is to ensure that injustice is also not meted out to any citizen. This calls for balancing the interests of accused as well as victims, which in turn depends on fair trial. For achieving this fair trial which is the solemn function of the Court, role of witnesses assumes great significance. This fair trial is possible only when the witnesses are truthful as ‘they are the eyes and ears’ of the Court.
A cumulative and non-disjunctive stare at those facts would amply justify the conclusion of the High Court, and approaching the case in a right perspective. It would be more so, when examined in the background in which events took place right from the day of murder of the complainant’s son. It has come on record that the victim was an activist who had been taking number of cases which are taken note of by the High Court in para 4.3 of the impugned judgment. It is also an admitted fact that the victim Amit Jethwa had filed a Public Interest Litigation (PIL) in the High Court against illegal mining within 5 kms. radius from the boundary of the Gir Sanctuary. In that petition, he had pleaded for protection of environment generally and the biodiversity of Gir Forest, in particular. Mr. Solanki and his nephew were got impleaded in the said PIL whose names emerged during the pendency of that petition.
Whether it was a case where entire de novo trial is necessitated? - HELD THAT:- Directing a trial court to spend this kind of time once again is a tall order and the same purpose which is sought to be achieved by the High Court could be served by re-examining only those witnesses which are absolutely necessary. After all, out of 195 witnesses, if 105 witnesses have been declared hostile, 90 other witnesses have been examined and cross-examined and their deposition is not required to be recorded again. Further, among them, there would be many officials/formal witnesses as well. Likewise, some of the witnesses though turned hostile, their testimony may not have much bearing - Since the contention of the learned counsel of the accused persons rejected on the merits of the case, it is opined that 26 witnesses, list whereof was furnished by Mr. Nadkarni in the Court with copies to the learned counsel for the accused persons, should be re-examined.
Whether the High Court is justified in passing strictures against the Presiding Officer of the trial court? - HELD THAT:- No fault can be formed about the general observations of the High Court about the role of the trial court judge who is not supposed to be a mute spectator when he finds that witnesses after witnesses are turning hostile - No doubt, it was expected of the Presiding Judge to play more active and positive role. However, if error is committed on that front, it is also not appropriate to arrive at other extreme conclusions against that Presiding Officer in the absence of any cogent evidence against him.
The said Presiding Officer is at the verge of retirement and is going to retire within a couple of months, after rendering long service of more than 30 years. This Court has time and again stated that the High Court should not lightly pass strictures against the judges in the subordinate judiciary - thus, in the first instance, instead of entire de novo trial, only 26 witnesses would be examined afresh as per the list furnished by the CBI. Secondly, direction to look into the matter against the Presiding Judge on administrative side of the High Court is set aside.
Going by the exceptional circumstances in which retrial is ordered by the High Court, and is being maintained in principle, with only modification that instead of all witnesses, 26 witnesses would be re-examined, it is opined that in order to ensure that there is a fair trial in literal sense of the term, at least till the time eight eye-witnesses are re-examined, Mr. Solanki should remain in confinement and he be released thereafter with certain conditions, pending remaining trial - Bail granted to Mr. Solanki by this Court vide order dated February 25, 2014 stands cancelled for the time being - petition disposed off.
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2017 (10) TMI 1639
Anti-competitive agreements - restriction on production by Indian Made Foreign Liquor (IMFL) - denial of marketing access - HELD THAT:- This Court is of the opinion that there is no infirmity in the observations and findings returned by the learned Single Judge. The judgment in Competition Commission of India v. Steel Authority [2010 (9) TMI 215 - SUPREME COURT] states that an order under Section 26(1) of the Act is an administrative one and does not in any manner result in adverse consequences or determine the rights and obligations of the parties. The State of Uttarakhand formulated a policy and it is fashioned in such a manner that State officials, vested with exclusive powers of taking decisions to dictate as to what brands of liquor are to be procured and distributed to retailers and sold to the consumers. These functions cannot per se be called a sovereign function.
When the State or its agency, who are vested with exclusive rights or monopoly rights, conducts trade or business, per se such activity cannot fall within the description of or cannot be characterized as sovereign functions. It is only when activities, such as printing of notes, minting, production of other national security related services, articles or goods etc. are involved and are sought to be regulated, would it be an issue as to whether such trade or business are sovereign functions of the Government or State entity.
In the present case, the State of Uttarakhand, like all other States in the country, have created monopolies by canalizing liquor procurement. Therefore, the Government departments or other public agencies or entities that may be quasi public, cannot be described as engaged in sovereign functions.
Assertion with respect to the policy having been upheld by the Uttrakhand High Court - HELD THAT:- This Court is of the opinion that the upholding of the policy was on an application of the parameters of judicial review. The wisdom of the policy or its impact with respect to position of domination or abuse thereof, could not have been the subject matter of Court's jurisdiction under Article 226 of the Constitution. It is precisely to oversee those aspects that the Competition Commission has been created.
This Court finds no merit in the appeal. At the same time, it is open to the appellant to raise all contentions in defence available to it in the ongoing investigation by the Director General - Appeal dismissed.
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2017 (10) TMI 1638
CENVAT Credit - input services - Hotel Services/Mandap Keeper Services - Designing and Scrip Writing Services - HELD THAT:- Both the lower authorities have not considered the provisions of definition of Input Services as per Rule 2 (l) of CCR, 2004 in its correct perspective. Similar issue of availment of Cenvat on the Design Services and Accommodation Services was considered by Tribunal Bench in the case of M/S. DR. REDDY'S LABORATORIES LTD. VERSUS CC, CE&ST, HYDERABAD-IV [2016 (11) TMI 858 - CESTAT HYDERABAD] and held in the favour of the assesses.
The ratio of the aforesaid decision of M/s Dr. Reddys Laboratories Ltd would apply in this case - the impugned order is unsustainable and liable to be set-aside - Appeal allowed.
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2017 (10) TMI 1637
Disallowance u/s 14A r.w.r. 8D - assessee has been pleading before the authorities that in the year under consideration they did not have any exempt income - AO hold that the expenditure shall be disallowed whether or not any income was generated - HELD THAT:- As in view of the decision of Cheminvest Ltd. [2015 (9) TMI 238 - DELHI HIGH COURT] and on the face of the factual position that there is no dispute as to the assessee not deriving any exempt income, we are of the considered opinion that the disallowance is not permissible where no exempt income is received or receivable during the relevant previous year - direct the AO to delete the same. Decided in favour of assessee.
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2017 (10) TMI 1636
Addition u/s 14A in the computation of book profit u/s 115JB deleted - Disallowance u/s 14A upholded partly in the computation of income under the normal provisions by deleting the addition made rule 8D(2)(ii) and sustaining the addition under rule 8D(2)(iii) - granting additional depreciation under clause (iia) read with clause (ii) of section 32(1) - Addition of `Depletion’ in excess of the rates specified in Schedule XIV of the Companies Act, 1956, deleted in the computation of `book profit’ u/s 115JB - remitting the matter of TPA from the international transaction of payment for intra group services to the AO/TPO for fresh adjudication - remitting to the AO/TPO the transfer pricing addition on account of interest on redeemable preference shares of Cairn India Ltd. recharacterised as unsecured loan advanced to the AE, for a fresh decision- directing to allow credit for TDS and advance tax after verification.
HELD THAT:- We set aside the impugned order and remit the matter to the file of Assessing Officer/TPO for deciding the issues raised in the grounds taken for the instant year in conformity with the view taken by the Tribunal in its order for assessment year 2011-12 [2017 (10) TMI 588 - ITAT DELHI], as has been briefly set out above.
Assessee has raised fresh grounds on interest u/s 234B and u/s 234C. It was admitted that interest u/s 234B is consequential. As regards interest u/s 234C, we direct that the same be computed with reference to the returned income and not the assessed income.
Appeal is allowed for statistical purposes.
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2017 (10) TMI 1635
Rectification of mistake - Deduction u/s 80IB be denied on non-fulfillment of condition contained in clause (iv) of Sub-section (2) of Section 80IB - scrutiny assessment concluded and certain expenses were added - HELD THAT:- We have gone through the orders of the assessing officer as well as the Commissioner in the scrutiny assessment. We do not find any material from which it could be ascertained that it was a mistake apparent on the face of the record - Tribunal had rightly held that the question as to whether the assessee failed to satisfy the condition stipulated in Section 80IB sub-section (2) sub-clause (iv) was an issue which could be the subject of investigation but scrutiny assessment could not be further scrutinized invoking the jurisdiction for rectification u/s 154 of the Act to arrive at such a finding.
We accept the revenue's contention that principles of res judicata does not apply in a tax proceeding but that is not the point on which we are rejecting the appeal. We do not think any substantial question of law is involved in this appeal. We concur with the Tribunal that Section 154 of the Act could not be invoked by the Assessing Officer in the facts of this case.
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2017 (10) TMI 1634
Benami Transactions - existence of HUF pleaded - exception which is pleaded by the appellant/plaintiff to avoid the application of the provision of Section 4(1) of the Benami Act is the existence of HUF and which will not apply because respondents/defendants being females are not coparceners and the exception under Section 4(3) of the Benami Act applies if the property claimed to be an HUF is in the name of a coparcener - HELD THAT:- As there is no entitlement to claim a right in a property which is benami by virtue of Section 4(1) of the Act. Benami property means a property which is purchased in the name of one person and funds are paid for purchase by another person with the intention that the benami owner is only a nominal owner and the actual owner is the person who has paid the funds. The Benami Act was passed in the year 1988 to nullify benami transactions as most of the benami transactions had their roots in illegalities, including existence of unaccounted or illegal moneys.
Traditional concept of Hindu Law of a male person when he inherits a property from his paternal ancestors then in such a case the inherited property becomes an HUF property is a concept which no longer prevails after passing of the Hindu Succession Act. HUF therefore comes into existence only if a person inherits the property from his male ancestor prior to passing of the Hindu Succession Act, 1956 or if HUF is created after the passing of Hindu Succession Act by a person throwing his self-acquired property/individual property in common hotchpotch. In the present case, there is no pleading of the appellant/plaintiff having inherited the suit property prior to the year 1956 and therefore the only case is of existence of HUF after the year 1956 and which could have accrued only if there was a specific pleading of throwing of the individual property of the appellant/plaintiff into common hotchpotch and which is not so.
Proper pleading of existence of HUF is all the more so required in the present case because the HUF which is pleaded to exist is not of the appellant/plaintiff and his immediate family members being his wife or his sons or the wives of his sons, inasmuch as, the respondents/defendants are the wives of the nephews of the appellant/plaintiff. In such extended degree relationship not within the family an HUF does not come into existence merely by uttering a mantra of there being a Joint Hindu Family or Hindu Undivided Family. What are the requirements of an HUF and how an HUF property comes into existence has been dealt with by this Court, after referring to the ratios of the judgments of the Supreme Court in the cases of Chander Sen [1986 (7) TMI 7 - SUPREME COURT] and Yudhishter [1986 (12) TMI 380 - SUPREME COURT] in the case of Surender Kumar v. Dhani Ram and Others [2016 (1) TMI 1435 - DELHI HIGH COURT]
Thus illegality in the impugned judgment by which the suit plaint has been rejected, inasmuch as, the suit was barred by Benami Act.
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