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Showing 1 to 20 of 1584 Records
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2019 (10) TMI 1586
Challenge to conviction Under Section 16(1)(a)(i) read with Section 7 of the Prevention of Food Adulteration Act, 1954 - sentence of three months' imprisonment along with fine of Rs. 500/- - HELD THAT:- This Court relied on a decision in T. BARAI VERSUS HENRY AH HOE AND ANOTHER [1982 (12) TMI 186 - SUPREME COURT] wherein it was opined that since the amendment was beneficial to the Accused persons, it could be applied with respect to earlier cases as well which are pending in the Court observing It is quite clear that insofar as the Central Amendment Act creates new offences or enhances punishment for a particular type of offence no person can be convicted by such ex post facto law nor can the enhanced punishment prescribed by the amendment be applicable. But insofar as the Central Amendment Act reduces the punishment for an offence punishable Under Section 16(1)(a) of the Act, there is no reason why the Accused should not have the benefit of such reduced punishment. The Rule of beneficial construction requires that even ex post facto law of such a type should be applied to mitigate the rigour of the law.
The present appeal is allowed in part and the sentence imposed upon the Appellant is modified by imposing a fine of Rs. 5,000/- only, which shall be deposited within 30 days before the Trial Court. On deposit of the amount, the bail bonds of the Appellant shall stand discharged.
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2019 (10) TMI 1585
Deduction u/s 36 (1) (viia) - assessee has claimed the deduction incorrectly - AO questioned the quantum of deduction and held that it would be restricted to the amount of reserve created in the books of account - HELD THAT:- We have carefully considered the rival contention and perused the orders of the lower authorities. In the present case the issue squarely covered by the decision of the coordinate bench in case of the assessee for assessment year 2012 – 13 [2018 (10) TMI 359 - ITAT DELHI] AO himself admitted in the assessment order that the assessee had claimed deduction u/s 36(1)(viia) which is 10% of the aggregate rural advances of the bank. The aforesaid claim was allowable to the assessee as per the ratio laid down in Southern Technologies Ltd. [2010 (1) TMI 5 - SUPREME COURT] and Catholic Syrian Bank Ltd. [2012 (2) TMI 262 - SUPREME COURT] - Decided in favour of assessee.
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2019 (10) TMI 1584
Nature of expenses - Expenditure incurred on Facilities put up but ownership lying with others/statutory authorities - since the expenditure was incurred for the smooth running of the business of the assessee, the expenditure is inevitably is a business expenditure - HELD THAT:- As consistent with the earlier decision of the Tribunal [2016 (11) TMI 1751 - ITAT MUMBAI] held that expenditure as incurred on construction of Railway Track and siding is revenue expenditure and not a Capital expenditure. Decided in favour of assessee.
Disallowance u/s. 14A - assessee received dividend from two Joint Venture Companies - assessee made suo moto disallowance on the basis of tax Auditor certificate - AO invoked the provisions of Rule 8D and made disallowance - HELD THAT:- It is an admitted position under the law that the provisions of Rule 8D is not applicable for the year under consideration. Further, we have seen that in assessee's own case for AY 2003-04 [2016 (11) TMI 1751 - ITAT MUMBAI] the Tribunal on similar set of facts as held disallowance of section 14A was restricted as per the tax Auditors certificate, we direct the AO to verify the fact if the disallowance under section 14A was restricted as per tax Auditors certificate in AY 2010-11 to 201213 and restrict the disallowance to Rs. 53.70 lakhs. In the result this ground of appeal is allowed.
Allowability of Establishment expenses - Nature of expenses - reliance on particular treatment is given in the books of account - assessee submits that the expenses are in the nature of salary, dearness allowances, postage, Bank charges, stationary etc in relation to employee of project department who monitors various projects in the existing line business - HELD THAT:- We have seen that in assessee's own case for AY 2003-04 to 2005-06 [2016 (11) TMI 1751 - ITAT MUMBAI] on similar set of facts Accounting Practices cannot be override section 56 or any other provisions of the Act. The assessee incurred expenses on various personnel/employee in the project for supervision and monitoring the various project and marketing allocation and refineries which is certainly allowable as business expenditure u/s. 37(1) of the Act. Expenses were made on account of salary, Dearness Allowance (DA), Conveyance Expenses, postal charges, bank charges, rent for housing accommodation, Motorcar etc. which is certain of revenue expenditure. Decided in favour of the assessee.
Provision toward post retirement medical benefits - HELD THAT:- We have noted that this is recurring issue from the AY 1996-97 onwards and on identical grounds of appeal, the Tribunal in AY 2003-04 [2016 (11) TMI 1751 - ITAT MUMBAI] in set-aside the matter to the file of AO to verify the Actuarial Valuation Report and then allowed the claims of assessee, this ground of appeal is allowed for statistical purpose.
Deduction of leave encashment u/s 43B - claim of the assessee was not considered by the lower authorities for the regions that it was claimed without filing the revise return of income - HELD THAT:- As identical grounds of appeal, the Tribunal in AY 2003-04 [2016 (11) TMI 1751 - ITAT MUMBAI], Goetz India Ltd [2006 (3) TMI 75 - SUPREME COURT] held that whenever the assessee makes a mistake or omitted to lodge a legitimate claim, the appellate authority be it first appellate authority or the second appellate authority, has vide power to entertain the new grounds of appeal. Thus we admit the grounds of appeal raised by the assessee and restore this ground of appeal to the file of AO to reconsider it afresh and pass order in accordance with law. Thus, this ground of appeal is allowed for statistical purpose.
Nature of receipts - Treatment of profit on sale of oil bonds - capital gain or business income - HELD THAT:- We find that in the case of Patnaik & Co. Ltd. [1986 (7) TMI 6 - SUPREME COURT] held that Appellate Tribunal found that having regard to the sequence of events and the close proximity of the investment with the receipt of Government orders the conclusion was inescapable that the investment was made in order to further the sales of the assessee and boost its business. In the circumstances, the Appellate Tribunal held that the investment was made by way of commercial expediency for the purpose of carrying on the assessee's business and that therefore, the loss suffered by the assessee on the sale of the investment must be regarded as a revenue loss.
Also decided in DCM Shriram Consolidated Ltd. [2015 (5) TMI 727 - ITAT DELHI] loss due to foreign exchange fluctuation in foreign currency transactions in derivatives has to be considered on the last date of accounting year and it is deductible u/s. 37(1). Decided in favour of assessee.
Additional ground of appeal before ld CIT(A) - Deduction for feasibility study expense - CIT(A) held that the power to entertain new/additional ground of appeal is available before the Tribunal and not CIT(A) - HELD THAT:- We have noted that the assessee raised the additional ground of appeal before the ld. CIT(A), which was not allowed by him by taking view that only Tribunal is entitled to admit the additional ground of appeal. In our view the decision of ld CIT(A) was not in consonance with the decision of Hon'ble Bombay High Court in Pruthwi Broker and shareholder [2012 (7) TMI 158 - BOMBAY HIGH COURT] therefore, we admit the additional ground of appeal raised by the assessee. We are in principal accepting that the claim of the feasibility study expenses is allowable expenses. However, keeping in view that the assessee has raised this issue for the first appellate stage, therefore, we deem it appropriate to restore this issue to the file of AO to verify the expenses and allow in accordance with law.
Deduction u/s. 80IB pertaining to VREP-II Unit - HELD THAT:- We find that the in assessee's own case for the assessment year 2005-06 [2016 (11) TMI 1751 - ITAT MUMBAI] has considered similar issue in assessee's favour wherein as directed to accept the appellant's claim of profit from the VERP II for the purpose of deduction u/s 80 IB. Decided in favour of assessee.
Deduction u/s. 80IB in respect of Silvassa Lube Blending Plant - AO disallow the deduction as no manufacturing or production of articles are done by assessee in terms of section 80IB(2)(iii) - CIT(A) allowed relief to the assessee by holding that the assessee is manufacturing lubricants from Lube Oil base stock, which is considered as manufacturing activity under Central Excise Act - HELD THAT:- We have noted that the end product manufactured by assessee as explain hereinabove is quite distinct and is a commercially different article than the major input rectified, which is fit for consumption/use for commercial use. That the changes made in input result in a new and different article is recognized in the trade as such. Hence, the assessee, in the instant case, satisfied the requirement, that it manufactured or produced an article or thing for the purpose of section 80-IB. Thus, we affirm the order passed by ld CIT(A). In the result the appeal of the revenue is dismissed.
Interest u/s. 244A on payment of self assessment tax - HELD THAT:- The Hon'ble Bombay High Court in Stockholding Corporation of India Ltd. [2014 (11) TMI 899 - BOMBAY HIGH COURT] held that tax paid on self assessment would fall under section 244A(1)(b), i.e. a residuary clause covering refunds of amount not falling under section 244A(1), therefore, interest is payable on refund on excess amount paid on self assessment tax. Considering the decision of Jurisdictional High Court we do not find any infirmity in the order passed bt. ld CIT(A), which we affirm. In the result this ground of appeal raised by the revenue is also dismissed.
Interest on delayed refund issued - as per DR delay in filing TDS certificate was attributable to the assessee, the assessing officer was right in restricting the interest u/s. 244A from the date of filing of TDS certificates.HELD THAT:- We have noted that the assessee claimed the AO while issuing refund granted interest from the date of submissions of TDS instead of 01.04.2006. It was claimed that the TDS amount is also to be treated as advance tax as paid u/s. 199. The ld CIT(A) after considering the submissions agreed with the contention of the assessee. CIT(A) while directing the AO has clearly held that section 244(1)(a) clearly prescribed the calculation of interest on advance tax and TDS from 1st day of the April of the assessment year. No contrary fact is brought to our notice to take the other view. In the result we affirm the order of ld CIT(A) is affirmed and the ground of appeal raised by the revenue is dismissed.
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2019 (10) TMI 1583
Scrutiny assessment - Validity of notice u/s 143(2) - period of limitation - defects in return of income removed - HELD THAT:- The notice u/s 143(2) is a statutory notice, upon issuance of which, the AO assumes jurisdiction to frame the scrutiny assessment under subsection (3) of section 143 - Consequently, if such notice is not issued within the period specified in subsection (2) of section 143 viz. before the expiry of six months from the end of the financial year in which the return is furnished, it is not permissible for the AO to proceed further with the assessment.
In the facts of the present case, petitioner filed its return of income u/s 139(1) on 29.11.2016. Since the return was defective, the petitioner was called upon to remove such defects, which came to be removed on 19.07.2017, that is, within the time allowed by the AO. Therefore, upon such defects being removed, the return would relate back to the date of filing of the original return, that is, 29.11.2016 and consequently, the limitation for issuance of notice under subsection (2) of section 143 would be 30.09.2017, viz. six months from the end of the financial year in which the return under subsection (1) of section 139 came to be filed.
In the present case, it is an admitted position that the impugned notice under subsection (2) of section 143 of the Act has been issued on 11.08.2018, which is much beyond the period of limitation for issuance of such notice as envisaged under that subsection. The impugned notice, therefore, is clearly barred by limitation and cannot be sustained. Assessee appeal allowed.
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2019 (10) TMI 1582
Rejection of application filed by the petitioner to dispense with the deposit of 30% of disputed tax - It is the grievance of the petitioner that the demand made by the authorities under the Act results in double taxation, the same has not been properly appreciated by the Tribunal while considering the I.A filed, seeking waiver of the deposit of 30% of the disputed tax - HELD THAT:- Section 63[7][a] of the Act contemplates that the Appellate Tribunal may, in its discretion, stay payment of seventy percent of the tax or other amount disputed, if the appellant makes payment of the thirty percent of the tax or other amount disputed along with the prescribed form of appeal. This payment of 30% of the tax or the other amount disputed is mandatory and the same cannot be waived of, as claimed by the petitioner. Hence, there is no substance in the writ petition to set aside the order impugned.
However, considering the totality of the circumstances of the case, this Court deems it appropriate to direct the Tribunal to dispose of the appeals in STA Nos.112/2019 and 113/2019 in an expedite manner preferably within a period of three months from today.
Petition disposed off.
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2019 (10) TMI 1581
TP Adjustment - comparable selection - HELD THAT:- Companies rejected as functionally dissimilar with that of assessee providing marketing support services.
Addition on account of unbilled revenue written off and security written off - as per AO assessee could not explain properly as to whether the amount actually booked as revenue from M/s Rolls Royce International Ltd. during F.Y. 2011-12 includes the sum booked as unbilled revenue during F.Y. 2010-11 - HELD THAT:- As it is the submission of assessee that due to certain small arithmetical error there is some minor difference in the figures shown in 2012-13. however, it is his submission that given an opportunity, the assessee is in a position to reconcile the same before the A.O/TPO that these are mere contra entries and no addition is called for - we deem it proper to restore the issue to the file of the A.O./TPO with a direction to grant one more opportunity to the assessee to substantiate its case - grounds raised by the assessee are accordingly allowed for statistical purposes.
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2019 (10) TMI 1580
TP Adjustment - comparable selection - HELD THAT:- As assessee, in the instant case is engaged in the business of providing marketing, supervising and support services for the mining/meteorological/metals & minerals processing industry. The segment of market support services has been benchmarked by the assessee using TNMM as the most appropriate method and OP/TC as the PLI, thus Aptico Ltd.; Info Edge (India) Ltd.; MMTV Ltd.; TSR Darashaw Ltd. and Global Procurement Consultants Ltd., cannot be considered as comparables with that of the assessee company as functinally dissmilar,. Accordingly, the TPO is directed to exclude these comparables.
TDS u/s 195 - Non-deduction of tax from the payment made to Outotec Oyj - whether amounts received by the assessee from Outotec India Pvt. Ltd., does not qualify as FTS as per DTAA? - HELD THAT:- We find merit in the argument of assessee that when the payee is not liable to tax on the payments received from the assessee company, the question of deduction of tax does not arise. The assessee also made a statement at the bar that the Revenue has accepted the decision of the Tribunal and has not filed any appeal before the Hon'ble High Court. We, therefore, dismiss the ground raised by the Revenue challenging the deletion made by the Assessing Officer for non-deduction of tax from the payments made to Outotec Oyj. The ground raised by the Revenue is accordingly dismissed.
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2019 (10) TMI 1579
Maintainability of petition - permission to an accused to intervene during the enquiry - HELD THAT:- Law on the point of intervention by the prospective accused at pre-summoning stage in a complaint case before Ld. MM is well settled by series of the judgment of the Hon'ble Supreme Court - Perusal of the judgment in Chandra Deo Singh v. Prokash Chandra [1963 (1) TMI 50 - SUPREME COURT] reveals that Hon'ble Supreme Court has categorically held that permitting an accused to intervene during the enquiry would frustrate its very object and that is why the legislature has made no specific provision to this effect.
The order passed by the Ld. MM on 01.08.2019 is clearly an interlocutory order as she has not decided the application under Section 340 CrPC moved by the respondent finally but only adjourned the same and observed that by moving such application, the respondent i.e. prospective accused cannot stall the proceedings in the main complaint case and, therefore, no revision lies against the said order to the Ld. Sessions Judge. Ld. Addl. Sessions Judge has, therefore, wrongly entertained the revision petition and stayed the proceedings of the criminal complaint.
The order dated 25.09.2019 passed by the Ld. Addl. Sessions Judge, is therefore, set aside and proceedings pending before the Ld. Addl. Sessions Judge are quashed being not in accordance with law.
Petition disposed off.
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2019 (10) TMI 1578
Dishonour of Cheque - Presumption not rebutted successfully - discharge of legally enforceable debt or not - HELD THAT:- This Court is in total agreement with the complainant that the cheque in question, Ext. CW-1/C was issued by the accused for consideration in discharge of her debt/liability. Since presumption as referred to herein above has not been successfully rebutted by the accused, she rightly came to be held guilty of having committed offences punishable u/s 138 of the Act - Once signatures on the cheque are not disputed rather stand duly admitted, aforesaid plea with regard to cheque having not been issued towards discharge of lawful liability, rightly came to be rejected by learned Courts below.
S. 139 of the Act provides that it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability - True it is that to rebut aforesaid presumption, accused can always raise probable defence either by leading positive evidence or by referring to material, if any, adduced, on the record by the complainant, but, in the case at hand, accused has miserably failed to raise probable defence, much less sufficient defence to rebut the presumption available in favour of the complainant under Ss. 118 and 139 of the Act. Close scrutiny of material available on record compels this Court to agree with learned senior counsel for the complainant, that there is absolutely no evidence available on record to probabilise the defence so projected by accused that blank cheques were issued to the complainant and one of the cheques has been misused.
Mere statement of the accused is not sufficient to prove that the cheque in question has been misused, rather the accused, with a view to rebut the presumption available in favour of the holder, is/was under obligation to prove by leading positive evidence that the cheque in question was issued as a security.
Hon'ble Apex Court in M/s. Laxmi Dyechem vs. State of Gujarat, [2012 (12) TMI 106 - SUPREME COURT], has categorically held that if the accused is able to establish a probable defence which creates doubt about the existence of a legally enforceable debt or liability, the prosecution can fail. To raise probable defence, accused can rely upon the material submitted by the complainant. Needless to say, if the accused/drawer of cheque in question neither raises a probable defence nor is able to contest existence of a legally enforceable debt or liability, statutory presumption under S. 139 of the Act regarding commission of the offence comes into play.
The petition at hand is dismissed being devoid of merit.
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2019 (10) TMI 1577
Money Laundering - provisional attachment - invocation of extraordinary jurisdiction of this Court under Article 226 of the Constitution of India - HELD THAT:- Admittedly, original proceedings are pending before the Adjudicating Authority. In such view of the matter, as held by this Court in D. VASANTHAMANI AND ORS. VERSUS UNION OF INDIA, DEPUTY DIRECTOR, DIRECTORATE OF ENFORCEMENT, GOVERNMENT OF INDIA AND ORS. [2019 (7) TMI 2005 - MADRAS HIGH COURT], the aforesaid pending proceedings will have to be completed and therefore, the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India is not required to be invoked.
This Court directs the Adjudicating Authority, viz. the 2nd Respondent herein, to conclude the proceedings within a period of two months from the date of receipt of a copy of this order - Petition disposed off.
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2019 (10) TMI 1576
Admission of section 7 application - order of ‘admission’ is challenged on the ground that the matter having been heard by two Hon’ble Members and the final order could not have been passed by Hon’ble Member(Judicial) - HELD THAT:- In the facts and circumstances, as suggested by the parties, it is opined that the matter may be remitted back for fresh hearing on merit relating to admission of application Under Section 7 of the ‘I&B’ Code after giving liberty to the parties.
The matter is remitted back to the ‘National Company Law Tribunal’ Bench III, New Delhi should be heard by Divisional Bench of Hon’ble Member(Judicial) and Hon’ble (Technical) as per the provisions of the Act and after notice and hearing, the Adjudicating Authority pass appropriate order in accordance with Law uninfluenced by an impugned order dated 27th August, 2019 - appeal disposed off.
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2019 (10) TMI 1575
Maintainability of judgment beyond pleading - actual owner of the building - landlord is the person who inducted a person as tenant or not - building is constructed over a leased land which is owned by Cantonment Board - eviction of tenant in a rent case - Principles of Estoppel.
Whether a judgment beyond pleadings can be sustained? - HELD THAT:- It is the settled law that the jurisdiction of a court has to be determined on the basis of plaint allegation alone and on the defence taken in written statement. The jurisdiction of the Prescribed Authority under the U.P. Act XIII of 1972 is essentially one for eviction of a tenant or release of the tenanted accommodation of a building as defined in Section 3(i) and not as to whether the land over which building is constructed is a leased land or a free-hold land.
In Municipal Corporation of the City of Jabalpur vs. State of M.P. [1962 (4) TMI 94 - SUPREME COURT], Hon'ble Supreme Court held Save in exceptional cases, parties should be held strictly to their pleadings and if owing to discovery of new matter or grounds, there is need to add to or to modify the allegations either in the petition or in the counter- affidavit, the Court should insist on formal amendments being effected, for this would enable each party to state its case with precision and definiteness and the other side would have a proper opportunity to know this case and meet it with appropriate defences - Thus, the impugned judgment on the points beyond pleadings cannot be sustained.
Scope of release application for eviction of a tenant in a rent case - HELD THAT:- It is settled law that in an eviction suit filed by a landlord against the defendant-tenant, the landlord and tenant are the only necessary parties. The plaintiff-landlord in such a suit is required to plead and prove only two things to enable him to claim a decree for eviction against his tenant from the tenanted suit premises. Firstly, plaintiff-landlord has to prove that there exists a relationship of landlord and tenant between the plaintiff and the defendant and secondly, the grounds on which the plaintiff-landlord has sought defendant-tenant's eviction under the Rent Act exists. When these two things are proved, eviction suit succeeds.
In the present set of facts, it is the admitted case of the defendantrespondent that he is tenant of the disputed building and the plaintiffpetitioner is the landlord. The relationship of landlord and tenant between the plaintiff-petitioner and the defendant-respondent was undisputed. Under the circumstances, the appellate court committed a grave error of law to hold that since the disputed building is standing over a leased land of Cantonment Board of which the Cantonment Board is the owner and, therefore, the provisions of U.P. Act XIII of 1972, shall not be applicable since the plaintiff-petitioner is not the owner of the land.
Whether plaintiff-petitioner is landlord of the building in question which was built over leased land? - HELD THAT:- The eviction of tenant under Section 21(1) of the U.P. Act XIII of 1972 is only with respect to a building as defined in Section 3(i) of the U.P. Act No.XIII of 1972, which is an inclusive definition and means a residential or non-residential roofed structure. Neither Section 21(1) nor the definition of the word “building” in Section 3(i) of the U.P. Act XIII of 1972 requires that the land of the building should be free-hold or it should not be a leased land. Therefore, for the purposes of Section 21(1) of the Act, the relevant consideration is the building of which the applicant should be the landlord and person whose eviction is sought, should be a tenant and there is landlord-tenant relationship between them.
Principles of Estoppel - HELD THAT:- As per undisputed facts as briefly noted above and also as per his own stand of the defendant-respondent he is the tenant of the disputed house of which the plaintiff-petitioner is the landlord. Therefore, the defendant-respondent is estopped from denying the landlordship of the plaintiff-petitioner in view of Section 116 of the Indian Evidence Act.
This legal position is also supported by the law laid down by Hon’ble Supreme Court in the case of D. Satya Narayan vs. P. Jagdish [1987 (9) TMI 432 - SUPREME COURT] and State of Andhra Pradesh and others vs. D. Raghukul Pershad (dead) by LRs and others [2012 (8) TMI 1221 - SUPREME COURT].
As a general rule, a tenant who has been let into possession cannot deny his landlord's title, however defective it may be, so long as he has not openly restored possession by surrender to his landlord. Hence, the defendant-respondent who was tenant of the plaintiff-petitioner/ landlord cannot deny the landlord’s title and he has to surrender possession to the plaintiff-petitioner before he can challenge the title of the plaintiff-petitioner - thus, under the facts and circumstances of the case, it was not permissible for the defendant-tenant/ respondent to deny the title of the plaintiff-petitioner.
Petition allowed.
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2019 (10) TMI 1574
Smuggling - contraband material found in seven bags contained poppy husk - benefit of acquittal on the ground of non-compliance of Section 50 of NDPS Act - HELD THAT:- Section 50 of the Act affords protection to a person in matters concerning "personal search" and stipulates various safeguards. It is only upon fulfilment of and strict adherence to said requirements that the contraband recovered pursuant to "personal search" of a person can be relied upon as a circumstance against the person.
The law is thus well settled that an illicit Article seized from the person during personal search conducted in violation of the safe-guards provided in Section 50 of the Act cannot by itself be used as admissible evidence of proof of unlawful possession of contra-band.
In the instant case, the personal search of the Accused did not result in recovery of any contraband. Even if there was any such recovery, the same could not be relied upon for want of compliance of the requirements of Section 50 of the Act. But the search of the vehicle and recovery of contraband pursuant thereto having stood proved, merely because there was non-compliance of Section 50 of the Act as far as "personal search" was concerned, no benefit can be extended so as to invalidate the effect of recovery from the search of the vehicle.
Since in the present matter, seven bags of poppy husk each weighing 34 kgs. were found from the vehicle which was being driven by Accused-Baljinder Singh with the other Accused accompanying him, their presence and possession of the contraband material stood completely established - the acquittal recorded by the High Court, in our considered view, was not correct.
Appeal allowed.
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2019 (10) TMI 1573
Addition u/s 35AD - Deduction in respect of expenditure on specified business - HELD THAT:- As decided assessee in own case [2019 (3) TMI 2037 - ITAT CHANDIGARH] the lower authorities have wrongly interpreted the relevant provisions of the Act. There are two parts of the above said provisions. In the first part, it has been mentioned that an assessee is eligible to claim deduction of the capital expenditure if such an expenditure has been incurred wholly and exclusively in a specified business.
There is no condition of any date or year of commencement of specified business. However, in the second part, it has been provided that if such an expenditure has been incurred prior to the commencement of business and has been duly capitalized in the books of account, the claim will be allowed in the year in which the assessee commences operations of his specified business. There is neither any overlapping nor any contradiction in the aforesaid provision. The assessee is covered in the first part i.e. the assessee has incurred the expenditure on the specified business during the year in which operations of his business of warehousing were already going on.
No justification on the part of the lower authorities in denying the deduction to the assessee u/s 35AD - This ground is, accordingly, allowed in favour of the assessee.
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2019 (10) TMI 1572
Seeking payment of the admitted sum due towards the work executed on the Project which was to the knowledge of the Defendant - work has been executed by the Plaintiff, as part of the Project, which has been acknowledged by NHIDC, and since ITNL/SSTL are under liquidation, the Plaintiff ought to be compensated directly by NHIDC - HELD THAT:- The remedy sought by the Plaintiff in this suit, though quite creative, would not be maintainable inasmuch as the agreement between the Plaintiff and ITNL is subsisting and has not been terminated. The Plaintiff has executed the works for ITNL, even though NHIDC may have indirectly benefited from the same. The contracts may be back-to-back in nature, but the Plaintiff cannot by-pass its existing contractual relationship with ITNL.
As held by the Hon'ble Supreme Court in Food Corporation of India & Ors. [2007 (11) TMI 707 - SUPREME COURT] and MAHANAGAR TELEPHONE NIGAM LTD VERSUS TATA COMMUNICATIONS LTD [2019 (2) TMI 2091 - SUPREME COURT], Section 70 falls in that Chapter of the Indian Contract Act, 1872 which deals with relationships which resemble contracts. In that sense, the provision belongs to the category of quasi contracts and restitution. Such a remedy is unusual and cannot be permitted to be invoked in the present case as the conditions for such a claim to be made, as laid down by the Hon'ble Supreme Court in State of West Bengal v. B.K. Mondal & Sons, [1961 (12) TMI 82 - SUPREME COURT], have not been satisfied.
It is not disputed that the above order continues to operate and apply even qua ITNL. The primary dispute and claim for recovery being against ITNL/SSTL, in view of the order dated 15th October, 2018 of the NCLAT, the present suit would not be maintainable. The claims of the Plaintiff would lie only against the parties with whom it has privity i.e., ITNL/SSTL. No direct claims would be maintainable against NHIDC. In view of the above, the Defendant's application under Order VII Rule 11 CPC is liable to be allowed.
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2019 (10) TMI 1571
Computation of income - relevant assessment year - assessee is following project completion method - whether entire amount was received during the impugned assessment year? - HELD THAT:- After going through the orders of the lower authorities, we noted that none of the authorities have gone into the method of accounting adopted for computation of income which is very basic for deciding the issue. It is also not clear that even after almost 5 years from the grant of completion certificate in respect of free sale building, the construction is not completed because of several issues regarding clearance from BMC and when the company will obtain constructed area available for free sale and earn profit there from. These facts need to be examined in detail. In view of the above, we are of the view that let the matter be restored back to the file of the AO for fresh adjudication on this very issue. Appeal of assessee is allowed for statistical purposes.
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2019 (10) TMI 1570
TDS credit deposited by Employer-State Bank of India on payment of leave travel concession - HELD THAT:- Since the employer has paid the TDS, therefore, no doubt the credit is liable to be given to the assessee in accordance with law. Accordingly, we allowed the claim of the assessee and direct the AO to give the credit to the assessee of the TDS amount - Accordingly, this issue is decided in favour of the assessee against the revenue.
Disallowance of interest upon the TDS - The copy of order also speaks this fact that the employer was in the default for deducting the TDS on the LTC of the Assessee, therefore, the interest u/s 201 & 201(IA) of the Act was charged from the employer - HELD THAT:- Since the interest has been charged from employer therefore no interest is not liable to be charged against the assessee. In this regard, we also find support of law settled in the case of Ian Morris [2016 (12) TMI 1090 - SUPREME COURT] - Accordingly, the interest is not liable to be charged from the assessee and this issue is also decided in favour assessee against the revenue.
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2019 (10) TMI 1569
Refund of the Education Cess and Higher Education Cess which was paid alongwith the excise duty - period of dispute is September 2013 to March 2015 - HELD THAT:- Both the parties have agreed that the issue is squarely covered by the ratio laid down by the Hon’ble Supreme Court in the case of SRD Nutrients Private Limited vs. CCE [2017 (11) TMI 655 - SUPREME COURT] where it was observed that the appellant were entitled to the refund of the education cess and higher education cess which was paid alongwith the excise duty once the excise duty itself was exempted from levy.
The claim of the appellant pertaining to the refund of education and higher education cess is allowed - the appeals filed by the appellants are allowed.
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2019 (10) TMI 1568
Income accrued in India - fees for technical services/fees for included services (‘FIS’) - Scope of ‘make available’ clause - reimbursements of allocated costs received by the non-resident appellant under the Management Services Agreement - India - USA DTAA - taxing of management services provided by the SABIC Innovative Plastics US LLC to SABIC Innovative Plastics India Pvt. Ltd. - CIT (A) deleted the addition holding that “firstly, the category ‘management’ is missing in definition of FIS and services provided by the appellant being in nature of management services do not fall in definition of FIS - HELD THAT:- As documents furnished by the appellant indicating nature of services provided by the appellant. The services provided in present case mostly resemble with those in case of Ernest & Young (P) Ltd [2010 (3) TMI 108 - AUTHORITY FOR ADVANCE RULINGS].
It appears that most of the services are in nature of management services, though some of the services may be considered to be of technical nature. However, from terms of the service agreement and also from conduct of the parties, it cannot be said that ‘make available’ requirement has been satisfied. AO has not elaborated on this aspect. As per provisions of Article 12(4) of DTAA, unless ‘make available’ clause is satisfied, consideration for any consultancy or technical service per se shall not become FTS/FIS.”
Having gone through the provisions of Article 12(4)(b) and Article 5 of DTAA pertaining to fees for included services and after going through the management service agreement and the clauses thereof, we are of view that the by the management services provided by the assessee cannot be taxed under fee for technical services. All the grounds are treated as adjudicated. Appeal of assessee allowed.
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2019 (10) TMI 1567
Benami transaction - relationship of the parties in the Suit - Family Arrangement - Whether the property mentioned in 'A' Schedule to the Plaint has been purchased by the 1st Plaintiff from and out of the funds of the First Plaintiff and income from the 'B' Schedule property? - HELD THAT:- A reading of the Family Arrangement shows that it is not a mere Partition between the heirs of Late C.M. Sundararaj. It records certain obligation which are in effect relinquishments of rights over the properties by the heirs of C.M. Sundararaj. While the First Defendant relinquishes his share in the Besant Nagar Property, the Plaintiffs 1 & 2 relinquished their right over the Industrial land namely, the B Schedule property. The very fact that the Family Arrangement is in writing, under which the parties, who are the members of the family relinquish their interest in the property the same requires registration and proper stamping in accordance with law. In the absence of such registration and proper stamping, the document cannot be construed as valid.
It is seen from the instrument itself that it was executed on 1.6.1994 and the Second Plaintiff has not signed it, though she figured as a party to the instrument. There are no Attestors also. As already concluded that the explanation offered by the Defendant for non-production of the original is unconvincing. Therefore, considered opinion that the Family Arrangement, dated 1.6.1994 cannot said to be a full fledged Family Arrangement brought about in the presence of the elders of the family in order to settle the disputes between the members of the family. The instrument, which results in relinquishment of share in a particular item of property by one of the members is not valid without being registered and duly stamped under law. Hence, thus issue is answered in favour of the Plaintiffs and against the First Defendant.
It is not a case, where the Plaintiffs seek a Declaration of the title to the property or recovery of possession of the property alleging that a document, which confess title is invalid. It is a settled position of law that the relief of setting aside the document would arise only in a case where the Plaintiffs seek to invalidate the Title, which had vested in a person, who is shown as Purchaser under the document. That is not the case on hand. The Plaintiffs seek partition on the ground that the Defendant holds the property in trust on their behalf also. Therefore, prayer for setting aside the document is not required. If the document is set aside, neither the Defendant nor the Plaintiffs would get title. The property will revert back to the Owner namely, Tamil Nadu Small Industries Development Corporation. Therefore, the plea that a Decree for Partition cannot be passed unless the document is set aside is liable to be rejected. Hence, Issue is also answered in favour of the Plaintiffs and against the First Defendant.
First Plaintiff had sent several Letters and Telegrams to the First Defendant either seeking Maintenance or complaining about his inaction in non-payment of the Loan. The First Defendant has not denied the contents of any of these Letters. These Letters would show that the First Plaintiff had paid the monthly instalments for purchase of the 'A' Schedule property from and out of the income from the 'B' Schedule property. It is therefore, clear that the 'A' Schedule property also has to be treated as part of the estate of C.M. Sundararaj. Accordingly, the Issue No. 1 is decided in favour of the Plaintiff and against the First Defendant to the effect that the funds for the purchase of 'A' Schedule property were provided by the First Plaintiff and income from the 'B' Schedule property, therefore, it also forms part of the estate of the deceased C.M. Sundararaj.
Prohibition created by the Section 4 of the Prohibition of Benami Property Transactions Act, 1988 - Once it is concluded that the property was purchased from and out of the income from the estate of C.M. Sundararaj and monies that belonged to the First Plaintiff in the name of the First Defendant, the transaction may not take the colour of a Benami Transaction as defined u/s 2(9) of Prohibition of Benami Property Transaction Act, 1988 as amended by 43 of 2016.
As already seen Section 2(9)-A(b)(i), exempts a transaction between persons, who stand in a fiduciary capacity towards the other from being termed as a Benami Transaction. Here, the transaction is between the mother and the son. Therefore, the fact that the mother had contributed funds for the purchase of the property in the name of her son having been proved, we do not think that the claim of the First Plaintiff with reference to 'A' property could be said to barred by the provisions of the Prohibition of Benami Properties Transaction Act, 1988. Hence, this issue is answered in favour of the Plaintiff and against the First Defendant.
Contention of the First Plaintiff that the said property was purchased in her name from and out of the Sale proceeds of the property of C.M. Sundararaj situate at Besant Nagar - As it is clear that though the property stands in the name of the First Plaintiff she was not the absolute Owner of the said property. Since the entire consideration for purchase of the said property came out of the estate of C.M. Sundararaj and therefore the Plaintiffs and the First Defendant would have an equal share in the Suit property. Therefore, Issue is answered in favour of the Plaintiffs and against the First Defendant.
As regards the 'D' Schedule property - A perusal of the Plaint would show that the Plaintiff has sought for a Decree for Partition of the entire 'A' to 'D' Schedule properties. The Plaintiff, who is the owner of the property as per the Settlement Deed, dated 3.6.1994 namely Ex. P17 has come forward seeking partition of the property and also acknowledging that the said property was also purchased from and out of the income from the estate of Late C.M. Sundararaj, I do not see any difficulty in concluding that the 'D' Schedule property is also liable for Partition. This issue is also answered in favour of the Plaintiffs concluding that they are entitled to relief of Partition and separate possession of Schedule 'A' to 'D' properties.
Limitation - As already concluded that the Family Arrangement, dated 1.6.1994 has been brought about by undue influence and coercion. It is contended by the learned Counsel appearing for the First Defendant that the relief of setting aside the Family Arrangement, dated 1.6.1994 is barred by limitation. He would also draw my attention to the Article 58 of the Limitation Act, to contend that the period of limitation being 3 years and once it is claimed that the document was brought about by coercion and undue influence, the Suit should have been filed within 3 years from the date of the document as the right to sue first accrues on the date of the document and not later.
Suit will stand decreed declaring the Family Arrangement,as void, ab initio and non-est in the eye of law, declaring the sales made by the First Defendant in favour of the 3rd & 4th Defendants would not bind on the Plaintiff share in the Suit 'B' Schedule property. The property sold by the First Defendant to the 3rd Defendant would be allotted to the share of the First Defendant. There will be Preliminary Decree declaring the 1/3rd each share of the Plaintiffs 1 & 2 in the Suit 'A' to 'D' Schedule properties. As regards the sales made in favour of the 3rd Defendant by the First Defendant, the first sale, dated 7.3.2001 is prior to the filing of the Suit hence, the said property sold under Sale Deed, dated 7.3.2001 namely, Ex. P42 would be allotted to the share of the First Defendant while working out equities at the time of Final Decree. Considering the relationship between the parties, the parties are directed to bear their own Cost. The Suit in other respects will stand dismissed.
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