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Showing 21 to 40 of 1542 Records
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2021 (9) TMI 1524
Offence under SEBI Act - synchronized trading, reversal trading and self-trading - appellants made unlawful gains - trading noticees received funds from the financing notices which were directly transferred to the stock brokers against the pay in obligation of the trading noticees - WTM directed the appellants to pay the said amount jointly and severally alongwith interest at the rate of 12% per annum.
HELD THAT:- Any person who has made profits or averted loss by indulging in any transaction or activity in contravention of the provisions of this Act or Regulations made thereunder would be liable to disgorge an amount equivalent to the unlawful gain or loss averted by such contravention.
Thus, disgorgement can only happen if the person contravenes the provisions of the Act or Regulations. Secondly, the disgorgement is equivalent to the wrongful gain made or loss averted. Thus, disgorgement cannot exceed the amount of wrongful gains.The concept of disgorgement under the SEBI laws is based on the principle that a person in possession of wrongful gains by which he is enriched may be asked to part with the amount equivalent to such gains alongwith interest.
Black’s Law Dictionary defines disgorgement as “The act of giving up something (such as profits illegally obtained) on demand or by legal compulsion.” To disgorge means to deprive a person of the value by which he is unjustly enriched. Further, disgorgement is an equitable remedy designed to deprive a wrong doer of his unjust enrichment. It aims in ensuring that a person in possession of the wrongful gain does not continue to enjoy them. Section 11B of the Act only talks about disgorgement of unlawful gains/profits. The concept of “net profits” is not existing in Section 11B but the same has been carved out by Courts exercising equitable jurisdiction. Some Courts have granted only deduction of statutory dues, others have granted other legitimate expenses.
Disgorgement in our opinion is an equitable remedy under Section 11B of the Act meant to prevent the wrongdoers from enriching himself by his wrong by wresting ill-gotten gains from the hands of the wrongdoer. The provisions relating to disgorgement is thus remedial in nature and is not punitive.
Thus, legitimate expenses can be deducted while arriving at net profit. The respondent in this case has only allowed statutory deductions expended as a deduction while arriving at the net profit but did not allow deduction of administrative expenses and brokerage incurred by the wrongdoer.
We are in agreement with the findings given by the WTM in this regard. In our opinion net profit from wrongdoing is the gain made by any business or investment, where both the receipts and payments are taken into account. We are further of the opinion that the appellant will not be allowed to diminish the show of profits by putting in unconscionable expenses or other inequitable deductions even though entire profits of a business may result from the wrongdoings of the appellants and therefore are not entitled for the deductions as prayed by them.
Section 37(1) of the Income Tax Act debars an assess claiming any deduction from business profits any expenditure which may be incurred for any purpose which is an offence or which is prohibited by law. The aforesaid principle equally applies to SEBI laws since disgorgement is not a penalty nor is punitive as held by this Tribunal in Gagan Rastogi vs. SEBI [2019 (10) TMI 1047 - SECURITIES APPELLATE TRIBUNAL, MUMBAI]
Administrative expenses and brokerage charges are in the nature of business expenses and are not legitimate expenses for the purpose of claiming deductions in order to arrive at the net profit. Disgorgement being an equitable remedy and even though the profits results from wrongdoings, the appellants were rightly denied administrative expenses and brokerage. For the reasons stated aforesaid all the appeals are devoid of merit and are dismissed.
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2021 (9) TMI 1523
Cancellation of compensatory leave for adjudication to the Industrial Tribunal - whether the Appellant can be allowed to raise a contention that it is not an Industry within the meaning of I.D. Act? - HELD THAT:- After considering the fact of loss of confidence in the employee and a long time gap, this Court granted compensation of Rs. 15 lakhs in full and final settlement to the employee without granting reinstatement. In the said case before this Court, there was no inquiry held for establishing misconduct. A finding was recorded that the acts of employee prima facie constitute misconduct. In our view, considering the aims and object of the Appellant and the serious nature of misconduct proved against the Respondent, instead of granting reinstatement, by balancing the conflicting interests, appropriate compensation needs to be awarded. Moreover, considering the nature of the misconduct proved against the Respondent, the grant of reinstatement will not be in the interest of justice. The long gap of 17 years will be also one of the considerations for not granting reinstatement especially considering the nature of the activities of the Appellant and the conduct of the Respondent.
In the case of Talwara Cooperative Credit and Service Society Ltd. [2008 (10) TMI 731 - SUPREME COURT], this Court has held that the fact whether an employee after dismissal was gainfully employed is within his special knowledge and therefore, considering the principles laid down in Section 106 of the Indian Evidence Act, 1872, the burden is on the employee to come out with a case that he was not gainfully employed during the relevant period.
In the present case, at no stage, even such a plea has been made by the Respondent. Even in the counter filed to these appeals, no such statement has been made. The amount of back wages payable up to June, 2010 was deposited in this Court. The said amount of Rs. 4,43,380/- has been withdrawn by the Respondent in the year 2010. From the year 2004, when order of compulsory retirement was passed, the Respondent has not worked with the Appellant. Moreover, he has not even pleaded that from the date of the compulsory retirement till date, he was not gainfully employed.
The Respondent has used the amount of Rs. 4,43,380/- for the last 11 years. His gross salary in the year 2004 was Rs. 5788/- per month. Taking overall view of the various factual aspects which we have discussed above, we find that compensation in the range of Rs. 6,50,000/- to Rs. 7,00,000/- in lieu of reinstatement will be just and proper in the facts of the case. Thus, after taking into consideration the sum of Rs. 4,43,380/- already received by the Respondent, a sum of Rs. 2,50,000/- will be payable by the Appellant to the Respondent.
The appeals allowed in part by setting aside the order of reinstatement of the Respondent and the order of payment of back wages to the Respondent - the Appellant further directed to pay total compensation of Rs. 6,50,000/- to the Respondent inclusive of the sum of Rs. 4,43,380/- already paid to the Respondent.
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2021 (9) TMI 1522
CENVAT Credit - input services - outward transportation of goods (GTA Services) - place of removal - period from 2009-10 to 2013-14 - it was held by High Court that Appellants are eligible for the cenvat credit of service tax paid on outward freight.
HELD THAT:- Leave granted.
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2021 (9) TMI 1521
Validity of Assessment passed u/s 144C as objections before DRP are pending - As argued if the petitioner had informed the first respondent within 30 days period that it intends to file objections before the DRP, first respondent would have awaited the directions of DRP - HELD THAT:- Revenue counsel very fairly submits that the period of limitation stood extended owing to the Covid-19 situation and in the light of the typed-set of papers forming part of the case file, it is clear that the petitioner has gone before the DRP. Therefore, the first respondent has to await directions from DRP as the objections of the writ petitioner are pending with DRP.
Order - The impugned Assessment Order is set aside solely on the ground that objections before DRP are pending and directions of DRP under 144C(5) has to be awaited under 144C (13).Though obvious it is made clear that this Court has expressed no opinion or view on the merits of the matter.
On DRP issuing directions, the first respondent shall proceed with the assessment de novo on its own merits, in accordance with law and complete the exercise as expeditiously as the business of the first respondent would permit.
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2021 (9) TMI 1520
Approval of the Resolution Plan - HELD THAT:- This Bench, after having seen the figures mentioned by the Resolution Professional, is not convinced that the fair value of the assets have been projected in the proper manner. It is also surprising that the Resolution Plan Applicant is bidding with the amounts very close to that of fair value as projected in the Resolution Plan. In view of the same, with the powers vested in this Bench, it is ordered that the revaluation of the assets of the company by the experts under the supervision of the Official Liquidator, Ministry of Corporate Affairs, in-charge of this particular area, under whose jurisdiction the company is situated.
This application for the approval of the Resolution Plan is kept in abeyance and the Official Liquidator is directed to provide the exact figures/value of the assets and exact valuation details within three weeks from the date of the receipt of this order - List the matter for further consideration on 05.10.2021.
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2021 (9) TMI 1519
Fraudulent GDR issue - Company did not make adequate disclosure under the Listing Agreement and that certain monies had also been diverted - WTM passed an order of debarment and the AO passed the order of imposition of penalty on directors - HELD THAT:- H.S. Anand [director] - Subsequent order of the AO finding the Director Anand guilty is patently erroneous and cannot be sustained. Once an AO comes to a conclusion that Mr. H.S. Anand had nothing to do with the day-to-day affairs of the Company and was only associated in providing technical expertise on product quality and was not involved in any financials of the Company it was no longer open to the AO to take a different view on another GDR issue when the facts and modus operandi were all common. We are of the opinion that the regulator should be consistent in its stand and should not take contradictory views on the same issue.
In view of the categorical finding that being a non-executive independent director, the said appellant was never involved in the day-today affairs of the Company nor was part of the decision making process relating to the GDR issue, the said appellant cannot be held guilty only on the basis of being a signatory to a resolution. In Prafull Anubhai Shah vs. SEBI, [2021 (6) TMI 1159 - SECURITIES APPELLATE TRIBUNAL, MUMBAI] we have held that being a signatory to a resolution is not sufficient to point fingers of committing a fraud. Thus, the order of the AO imposing a penalty upon Mr. H.S. Anand and the order of the WTM debarring him for one year cannot be sustained.
Non-executive independent director [Mr. I.S. Sukhija] the application of the respondent seeking permission to bring on record the additional documents cannot be allowed as it does not come within the parameters of the grounds given in Order 41 Rule 27 of the Code of Civil Procedure. Nothing has been stated as to why these documents which are in the public domain could not be considered by the authorities while considering the matter.
Nothing has been brought on record to indicate as to why such documents which was within their knowledge could not be brought on record. In any case, reliance upon these documents are misplaced. Merely because Mr. I.S. Sukhija was the Chairman of the Audit Committee does not mean that he was party to the fraudulent scheme, if any. The observations made by the authorities in the impugned orders that he should have raised questions as to why the GDR proceeds was not brought into the Company’s account or why the loan was given to the Vintage from the GDR proceeds are not matters which comes under the purview of the audit committee.
In any case, we find that there was no need to raise such questions as the loan in one case was paid immediately and in the other case was paid within a couple of months. Further, the evidence which has come on record indicates that the GDR proceeds were utilized for the purpose for which the resolution for issuance of the GDR was passed. Thus, the finding of the authorities that a fraud has committed by the Company is patently erroneous.
When the proceeds have come into the Company and have been utilized for the purpose of setting up a subsidiary in UAE the funds have been utilized for the purpose for which the GDR was issued. Thus, in our view merely because the appellant Mr. I.S. Sukhija was part of the resolution which approved the issuance of the GDR and opening of a bank account with Euram Bank does not lead to a conclusion that the appellant was part of the scheme of the alleged fraud which in any case was not in existence. Thus, imposition of penalty by the AO and debarment by the WTM was wholly erroneous on this appellant.
Managing Director of the Company [Mr. Gurmeet Singh] violation is nondisclosure of the Loan Agreement and the Pledge Agreement under the Listing Agreement for which penalty was rightly imposed upon the Managing Director - quantum imposed is wholly excessive and does not commensurate with the misconduct. There is nothing on record to indicate that any shareholder or investors have suffered any loss on account of conversion of GDR into equity shares which was sold in the Indian market. Thus, we are of the opinion that for non-disclosure of the Loan Agreement and the Pledge Agreement to the Stock Exchange under the Listing Agreement the penalty of Rs. 20 lakh in each GDR issue would be just and proper in the circumstances of the case and the debarment against Mr. Gurmeet Singh is upheld.
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2021 (9) TMI 1518
Fraudulent and Unfair Trade Practices relating to Securities Market - issuance of the GDRs - inadequate disclosures to the investors - Investigation revealed that the Company made selective disclosure to Bombay Stock Exchange (BSE) and suppressed material information, namely, that Euram Bank was authorized to use the proceeds in connection with a loan and that the execution of the loan agreement and the pledge agreement was not disclosed - Penalty imposed - HELD THAT:- The company is now under liquidation. The loan taken by Vintage has been repaid to the company. US$ 8.3 million was transferred to the account of the company and US$ 6 million was transferred to its subsidiary in UAE as per the GDRs offering. Thus, a genuine GDRs issue was made by the company which was not fraudulent nor the proceeds of the GDRs has been diverted to a third entity. In fact, there is no specific allegation about the non-utilization of the GDRs in the show cause notice. Thus, there cannot be any violation of any fraud or inducement under Regulations 3 and 4 of the PFUTP Regulations.
AO while considering the factors under Section 15J of the SEBI Act found that there is nothing on record to show or indicate any disproportionality given or unfair advantages made by the appellants nor anything has come on record to show any loss suffered by the investors.
In view of this specific finding coupled with the fact that no fraudulent scheme was initiated by the company, we are of the opinion that the findings given by the WTM and the AO against the appellants Pradip Mundhra and Sanjay Taparia relating to the penalty is excessive and arbitrary and is required to be modified.
Appeals of Jaiprakash Kabra, Gopaldas Maheshwari and Rajesh Jhunjhunwala being covered by the decision of this Tribunal in Praful Shah [2021 (6) TMI 1159 - SECURITIES APPELLATE TRIBUNAL, MUMBAI] the impugned orders of the AO in so far as it relates to these appellants are quashed. Their appeals are allowed with no order as to costs.
In so far as the appeals of Pradip Mundhra and Sanjay Taparia are concerned, they being on the helm of the affairs of the the company on a day to day basis, they are responsible for nondisclosure of vital information. However, the penalty imposed by the AO and the WTM are disproportionate and excessive, therefore, while affirming the findings of violation in so far as it relates to nondisclosure, the penalty of Rs. 50 lac imposed by the AO is reduced to Rs. 20 lac each and debarment of five years made by the WTM is reduced to two years and six months. The appeals of Pradip Mundhra and Sanjay Taparia are partly allowed.
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2021 (9) TMI 1517
TP adjustment - international transactions in connection with payment of brand royalty and payment of professional fees - benchmarking the international transaction without appreciating the fact that the said international transaction is closely interlinked to the manufacturing activity of the Appellant - HELD THAT:- The crux of the discussions wherein in the Tribunal’s order for the assessment year 2009-10, it has observed that the assessee had paid brand royalty under two agreements, first, at 0.5% under the agreement dated 01.07.2008 and then again under another agreement dated 05.04.2001. The duplicate amount of royalty earlier paid was directed to be disallowed.
The relevant part of this Tribunal order [2021 (7) TMI 681 - ITAT PUNE] for the assessment year 2010-11 in assessee’s own case remit the matter to the file of AO/TPO for redetermining the ALP of the international transaction of payment of Royalty and disallow the duplicate payment of brand Royalty in terms indicated above in the Tribunal order - Ground allowed for statistical purposes.
Management services fess and payment of professional fees - Tribunal observed that in its own order for the assessment year 2009-10 [2019 (4) TMI 1505 - ITAT PUNE] following the view taken for the preceding year held that the assessee did avail services from its AE and the authorities below were not justified in coming to the conclusion that no services were obtained by the assessee.
We set aside the impugned order on this score and remit the same to the file of the AO/TPO for fresh determination of ALP of the international transaction of payment of management services fee in accordance with the observations and directions given in the Tribunal order passed for the assessment year 2009-10 [2019 (4) TMI 1505 - ITAT PUNE] and 2010-11 [2021 (7) TMI 681 - ITAT PUNE]. Thus, Grounds allowed for statistical purposes.
Disallowance u/s. 37 in respect of royalty expenditure incurred by the assessee - CIT(Appeals) had taken a view that the assessee is engaged in manufacture of equipments through licenses from group concerns. Royalty has been paid in respect of technical know-how obtained for manufacturing of equipments. Since the technology and designs have been used by the assessee in its manufacturing, the royalty for the same cannot be said to be for nonbusiness purposes.
Similarly, brand royalty has been paid for the use of brand on the products manufactured by it. It was therefore an admitted fact that assessee was using the Brand name and logo on its manufactured products. These payments, therefore, cannot be considered as meant for nonbusiness purposes in respect of transfer pricing adjustment. This view of the Ld. CIT(Appeals) was left unaltered and relief provided to the assessee was sustained by the Tribunal.
Before us also, DR submitted that there is no difference on the facts and circumstances for this year also and the issue is covered in favour of the assessee. That when the facts and circumstances are similar and that a view has already been taken which is factually analyzed, therefore, on same parity of reasoning under same set of facts and circumstances, we allow this ground of appeal. Thus, Ground No.2 raised in appeal by the assessee is allowed.
Disallowance u/s.37 in respect of legal and professional fees incurred by the assessee on account of HR, legal, IT, finance, sales, marketing and other ancillary services - As decided in own case assessment year 2010-11 [2021 (7) TMI 681 - ITAT PUNE] CIT(A) has given cogent reasons for deleting the disallowance inasmuch as the AO simply adopted the TPO’s reasoning without showing as to how the same applied to the non- AE transactions as well. Further, the expenditure contains payment for Testing fees and also Generic service fee. To this extent, we approve the view taken by the ld. CIT(A).
TDS u/s 195 - non deduction of tds on commission on sale to overseas sales agents - HELD THAT:- As decided in Kikani Exports Pvt. Ltd [2014 (9) TMI 96 - MADRAS HIGH COURT] wherein it was held that the services rendered by the non-resident agent can at best be called as a service for completion of the export commitment and would not fall within the definition of fees for technical services and therefore, section 9 of the Act is not applicable to the instant case and consequently, section 195 of the Act does not come into play. The assessee has further submitted that it is a settled position of law that the retainer ship charges/commission paid to overseas non-resident agents for promoting assessee’s business in foreign countries is not in the nature of fees for technical services and therefore, is not liable to be taxed in India. Thus no statutory obligation to make TDS u/s.195 of the IT Act in respect of the commission paid to overseas sales agents.
Disallowance u/s.14A r.w. Rule 8D - AO proposed to the assessee that the expenditure incurred in relation to the dividend income in respect of this investment is required to be disallowed - assessee objected to the same on the ground that no dividend income has been received during the year with regard to this investment - HELD THAT:- It is a settled position of law that when no exempt income has been received by the assessee then there cannot be any disallowance u/s.14A of the Act. This view was also taken in the case of HOLCIM INDIA P. LTD. [2014 (9) TMI 434 - DELHI HIGH COURT] and based on this decision of the Hon’ble Delhi High Court, the Ld. DRP had directed the Assessing Officer to delete the addition. Therefore, we are of the considered view on the given facts and circumstances, there is no need for interference with the findings of the Ld. DRP and relief provided to the assessee is sustained.
Revenue appeal dismissed.
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2021 (9) TMI 1516
Refusal to terminate the proceedings in two first appeals arising out of a Scheme decree passed in respect of a temple governed by the Bombay Public Trusts Act, 1950, despite the appellants seeking to withdraw the appeals - view taken by the High Court is that the proceedings in the appeals cannot be terminated merely because of the withdrawal of the appeals by the appellants, since the rights of 3rd parties are also involved is correct or not.
HELD THAT:- Such a view may not be correct due to the following reasons:-
(i) This Court, by its order dated 22.11.2013, which we have extracted above, has permitted in no uncertain terms, the withdrawal of the appeals. Thereafter it is not open to the High Court to proceed with the hearing of the appeals.
(ii) The procedure sought to be adopted by the High court, namely to hear the appeals in the interest of third parties, despite the appellants seeking to withdraw them, is possible only in two circumstances namely, (a) when there are cross objections, which can independently proceed in terms of Order XLI Rule 22(4) CPC; or (b) when a transposition takes place in terms of Order XXIII Rule 1A CPC. In this case, there were no cross objections and hence Order XLI Rule 22(4) has no application. There was also no transposition and hence 3rd parties cannot seek to continue the appeals;
(iii) Proceedings for the framing of a Scheme for the administration of a Trust are no doubt proceedings in rem. Therefore, up to the stage of passing of the final decree approving a Scheme, even 3rd parties are entitled to intervene and object to the whole or part of the Scheme. But once the final decree approving the Scheme is passed, any person objecting to the final decree should independently file an appeal and cannot ride piggyback on the appellants’ shoulders. If they choose to do so they have to fall once the appellants withdraw the appeals;
(iv) In any case it was the appellants before the High Court who have given an undertaking to this Court at the time of hearing of SLP(C)No.27929 of 2012 that they shall not move the Charity Commissioner for modification or variation of the Scheme. Such an undertaking is not binding on third parties. Therefore, it is not as though the rights of 3rd party intervenors are completely obliterated. They always have their own remedies in law and they cannot insist upon their grievances being addressed to in the appeals filed by the appellants herein.
The impugned order of the High Court dated 05.03.2015 is set aside - appeal allowed.
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2021 (9) TMI 1515
Estimation of business income - difference in the gross receipts between the books of accounts and the annual statement of the department (26AS) - substitution and adoption of receipts as appearing in Form 26AS in place of entries shown as per audited book and estimation of business income/net profit thereon @ 8% discarding the book results - assessee submitted that the difference in the gross receipts between the books of accounts and the annual statement of the department (26AS) is on account of timing difference in recognition of income.
HELD THAT:- Both the orders are totally non-descript and has nothing worth to say for substitution of book results with estimated profits. Noticeably, in the assessment order, the AO has categorically made an averment to the effect that books of accounts have been produced by the assessee and test checked. The AO has not made mention of any material which could questions the correctness and bonafide of the book results declared.
AO is stoically silent on any kind of deficiency in books or excessive claim of any expenses etc. which could substantiate his action. It is incumbent upon the AO to record the inconsistency or incorrectness in the books which prevents the AO to ascertain true income chargeable to tax. The AO has neither rejected the books nor a single voucher was alleged to be unverifiable.
The pre-condition for estimating business income, where the assessee maintains books of account is that the books of assessee should be found to be unreliable or otherwise not realistically capable for demonstrating the income of assessee. Without this first step, the fact that the gross profit/net profit is low cannot by itself be a ground for taking a view that it is open to the AO to make good alleged deficiency in profits declared. Thus, the action of the AO requires to be cancelled and set aside on this score alone being devoid of any legitimacy.
Gross profit rate/net profit rate cannot be estimated cursorily and in a routine manner without showing as to how the book results are superfluous.AO has not brought any material which has any reasonable nexus to the estimation.
As rightly stated on behalf of the assessee, even the best judgment assessment cannot be done in a vindictive manner and should be based on reasonable and fair estimations.
AO in the instant case has not crossed the barrier to enable it to go into arena of estimation. The estimation is permissible only on showing that the books of accounts are so defective that it is not possible to ascertain the truthfulness of the profits arising therefrom.
The onus is upon the Revenue to show that either the books of account maintained by the assessee were incorrect or incomplete or that the method of accounting adopted by him was such that true profits of the assessee cannot be deduced therefrom. For rejection of books of accounts, the AO is required to demonstrate specific defects in the books of accounts produced by the assessee and also as to how the books of accounts produced by the assessee is not giving clear picture of the profit earned from the business activity.
Even where the books are rejected, the discretion must be used by the AO judiciously. We also find considerable substance in the plea of the assessee for not indulging estimates of such whopping nature particularly when lesser net profit rates of 2.19% and 1.10% declared in A.Y. 2016-17 and A.Y. 2017-18 has been endorsed by the Revenue itself in regular assessments.
Hence, on giving due weightage to the peculiar facts and circumstances of the case, we find merit in the plea of the assessee for reversal of its consequent substitution by the actual income as per books as offered. Thus, we reverse the action of the lower authorities and restore the position of the assessee. Decided in favour of assessee.
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2021 (9) TMI 1514
Deduction u/s 80HHC - simultaneous deduction under Section 80HHC and 80IB on the same profits - whether deduction u/s 80IA should not be deducted from the profits and gains of business before computing ? - HELD THAT:- It is not disputed before us that the above substantial questions of law were considered in the case of Micro Labs Ltd [2015 (12) TMI 708 - SUPREME COURT] In the light of the difference of opinion between the Hon'ble Judges, the matter has been directed to be placed before the Hon'ble Chief Justice of India, so that the matter can be referred to a larger Bench.
Tax Case Appeal is allowed and the order passed by the Tribunal, as well as the Commissioner of Income Tax (Appeals), Large Taxpayer Unit, Chennai, are set aside and the matter is restored to the file of the Assessing Officer, who shall await the decision of the larger Bench of the Hon'ble Supreme Court, in the reference made in the case of Micro Labs Ltd. (supra).
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2021 (9) TMI 1513
Rejection of plaint under Order VII Rule 11(d) of the Code of Civil Procedure, 1908 - rejection on the ground that the suit filed in the year 1987 challenging the action of the competent authorities under the Act carried out way back in 1963 and 1964 was hopelessly barred by limitation - bar under Section 85 of the Act on the jurisdiction of Civil Court.
Rejection of plaint on the ground of limitation - HELD THAT:- The Plaintiffs assert in no uncertain terms that notices were never ordered to them nor served on them. Therefore, the answer to the issue regarding limitation, will depend upon the evidence with regard to the issuance and service of notice and the knowledge of the Plaintiffs. Hence, the Trial Court as well as the High Court were not right in rejecting the plaint on the ground of limitation, especially in the facts and circumstances of this case.
As observed by this Court in P.V. GURU RAJ REDDY AND ORS. VERSUS P. NEERADHA REDDY AND ORS. [2015 (2) TMI 1363 - SUPREME COURT], the rejection of plaint Under Order VII Rule 11 is a drastic power conferred on the Court to terminate a civil action at the threshold. Therefore, the conditions precedent to the exercise of the power are stringent and it is especially so when rejection of plaint is sought on the ground of limitation. When a Plaintiff claims that he gained knowledge of the essential facts giving rise to the cause of action only at a particular point of time, the same has to be accepted at the stage of considering the application Under Order VII Rule 11.
The City Civil Court as well as the High Court refused to follow the procedure prescribed by Section 85-A of the Act, on the short ground that the same could be invoked only in cases where the issues covered by the Act have not already been settled, decided or dealt with by an authority competent under the Act to do so. Supporting the view taken by the Trial Court and the High Court, it is contended by Mr. Aniruddha Joshi, learned Counsel for some of the contesting Respondents that as against the orders passed Under Section 32-G and 32-M, an alternative remedy of appeal is provided under Clauses (mb) and (n) of Sub-section (1) of Section 74 of the Act. The Collector is the appellate authority Under Section 74.
The Civil Court was obliged to see at least whether the appointment of a Receiver for the administration of the Estate of a deceased person would actually fall within the mandate of Clause(d) of Sub-section(1) of Section 88-B.
The Trial Court as well as the High Court were clearly in error in rejecting the plaint Under Order VII Rule 11(d) - Appeal allowed.
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2021 (9) TMI 1512
Delay in filing the appeal before CIT(A) - delay in filing the appeal was stated to be medical issues of the Learned Counsel - HELD THAT:- We find that Hon'ble Supreme Court in the case of N. Balakrishnan vs. M. Krishnamurthy [1998 (9) TMI 602 - SUPREME COURT] has held that as long as the conduct of the applicant does not, on the whole, warrant to castigate him as an irresponsible litigant, generally, the delay be condoned.
It has further held that rules of limitation are not meant to destroy the right of parties but they are meant to see that parties do not resort to dilatory tactics. It has further held that in every case of delay there can be some lapse on the part of litigant concerned, however, that alone is not enough to turn down his plea and to shut the door against him.
It is a settled law that in matters of condonation of delay, a highly pedantic approach should be eschewed and a justice oriented approach should be adopted and a party should not be made to suffer on account of technicalities. Before us, no material has been placed by Revenue to demonstrate that the delay in filing the appeal before CIT(A) by the assessee was due to some mala fide intention on its part.
In view of the well settled principle of natural justice that sufficient opportunity of hearing should be afforded to parties and no party should be condemned unheard, we are of the view that the delay in filing the appeal before CIT(A) needs to be condoned. We accordingly condone the delay.
Since the CIT(A) has not decided the appeal on merits, we are of the view that one more opportunity be granted to the assessee to present its case. We therefore restore the matter back to the file of CIT(A) to decide the issue on merits afresh in accordance with law. Needless to state that CIT(A) shall grant adequate opportunity of hearing to both the parties. Thus the grounds of assessee are allowed for statistical purpose.
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2021 (9) TMI 1511
Benefits under the MEI Scheme denied - direction for refund the amount received by way of MEI scrip - denial of benefit on the ground that the exports made to an entity in the Free Trade Warehousing Zone (FTWZ), was erroneous - HELD THAT:- Respondent assures the Court that in case the petitioner were to file an appeal assailing the impugned order, the respondents will neither take any coercive action in furtherance of the impugned order dated 17.09.2021, nor place the petitioner in the ‘Denied Entity List’ till the appeal is disposed of on merits.
The writ petition is disposed of by granting two weeks’ time to the petitioner to file a statutory appeal assailing the impugned order dated 17.09.2021. In case such an appeal is filed within the time so granted, the respondents will deal with the same expeditiously by passing a reasoned and speaking order after granting due opportunity of hearing to the petitioner as per the prescribed procedure.
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2021 (9) TMI 1510
TDS u/s 194C - income tax on interest payable to the claimants/respondents on compensation awarded a/u Motor Accident Claim - HELD THAT:- Section 194-A of Income Tax Act, 1961, clearly provides that any person, not being an individual or a Hindu undivided family, responsible for paying to a ‘resident’ any income by way of interest, other than income by way of interest on securities, shall deduct income tax on such income at the time of payment thereof in cash or by issue of cheque or by any other mode. Compensation awarded under Motor Vehicle Act cannot be said to be taxable income. Compensation is awarded in lieu of death of a person or bodily injury suffered in a vehicular accident, which is damage and not income.
It is well settled that interest awarded by the Motor Accident Claims Tribunal on a compensation is also a part of compensation upon which income tax is not chargeable as also held as titled Court On Its Own Motion v. the H.P. State Cooperative Bank Limited [2014 (10) TMI 972 - HIMACHAL PRADESH HIGH COURT].
Therefore, in view of above said decision, deduction of income tax by petitioner/Insurance Company on the interest accrued/awarded on the compensation deposited by the petitioner/Insurance Company is illegal and is contrary to the law of land.
This petition is disposed of directing respondent No. 7 Income Tax Officer, (TDS), Sector 2, Panchkula, Haryana to refund the TDS to the petitioner/Insurance Company within eight weeks from date of receiving information thereof, failing which petitioner company shall also be liable to pay interest @ 9% per annum on the said amount with effect from 20.6.2018 till payment/deposit.
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2021 (9) TMI 1509
CENVAT Credit - inputs - credit denied to the party on the basis of presumptions and assumptions - no manufacture of menthol solution and de-mentholised oil took place - HELD THAT:- In the adjudication proceedings penalty was imposed on the appellant. The Tribunal has set aside the penalty after examining the entire material on record. It has reached a conclusion that other than the generalised opinion formed by the Meerut Commissionerate that no quantity of menthol and DMO were sold by the farmers inside the State of U.P. to the manufacturing unit in the erstwhile State of Jammu & Kashmir, there is no material to accept the charge of manufactured commodities having not been sold to the present assessee.
Tribunal has also taken note of the other reports of the Central Excise Authorities at Punjab & Haryana and Jammu & Kashmir that clearly suggest that the transportation of menthol and DMO from inside Uttar Pradesh to Jammu & Kashmir took place, and further that the manufacturing units in the erstwhile State of Jammu & Kashmir - such as M/s Abhay Chemicals were up and running at the relevant time. The transportation of the manufactured goods is also stated to have been duly verified.
There are no specific instances having been thoroughly investigated to bring out a specific charge with respect to any particular transaction - appeal dismissed.
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2021 (9) TMI 1508
Abuse of State and Police machinery by the ruling dispensation in registering 6 FIRs against him in 4 different police stations - violation of rights under Article 21 of the Constitution - HELD THAT:- Prima facie there appears to be an attempt at implicating and victimizing him in criminal cases and mala fides, malice and collateral purpose in registering the FIRs against the petitioner and his associates. A scheme and or conspiracy and or pattern and or stratagem appear to have been devised to entrap the petitioner and his associates to ensure their incarceration and custody inter alia to embarrass them.
Article 21 of the Constitution of India enshrines the most vital rights that a citizen of this country is required to be secured with. The rights under Article 21 and importance thereof cannot be overemphasized. The rights under Article 21 are so very basic and fundamental and clearly touch upon human rights that they are guaranteed even to non-citizens. The deprivation of such liberty is required to survive the tests of due process and or the procedure established by law.
In the instant case there is prima facie evidence before this Court of abuse and or misuse of State and police machinery in registering cases for investigation based on half-truths, fiction, concoctions and nonevents.
The State shall furnish information as regards any further FIR registered against the petitioner. The State shall also obtain leave of this Court before arresting the petitioner or taking with any coercive action against the petitioner in all such cases - Investigating Authorities shall, as far as possible, considering the public responsibilities of the petitioner, accommodate him, if he is required to give any statement, from a place and time convenient to him.
Let affidavit-in-opposition be filed within a period of four weeks from date. Reply, if any, be filed within a period of two weeks thereafter.
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2021 (9) TMI 1507
Nature of expenses - expenditure incurred by the assessee for renovation of the lease hold premises for setting up a new show room - revenue expenditure or capital expenditure - HELD THAT:- As questions of law raised in the appeal are considered by this Court in assessee's own case for the AY 2007- 08, and answered in favour of the assessee and against the Revenue. The said judgment is reported in Joy Alukkas India Pvt. Ltd v. The Assistant Commissioner of Income Tax [2014 (6) TMI 80 - KERALA HIGH COURT]
Having regard to the view already taken by this Court on the substantial questions being considered in the appeal on hand, the questions are answered in favour of the assessee and against the Revenue. Hence, the appeal fails.
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2021 (9) TMI 1506
Dispute regarding mutation entry in revenue records set aside - remedy available to Petitioner who is claiming rights/title on the basis of the will executed by the deceased Ananti Bai, once the will is disputed - HELD THAT:- It cannot be disputed that the right on the basis of the will can be claimed only after the death of the executant of the will. Even the will itself has been disputed. Be that as it may, as per the settled proposition of law, mutation entry does not confer any right, title or interest in favour of the person and the mutation entry in the revenue record is only for the fiscal purpose. As per the settled proposition of law, if there is any dispute with respect to the title and more particularly when the mutation entry is sought to be made on the basis of the will, the party who is claiming title/right on the basis of the will has to approach the appropriate civil court/court and get his rights crystallized and only thereafter on the basis of the decision before the civil court necessary mutation entry can be made.
Right from 1997, the law is very clear. In the case of Balwant Singh v. Daulat Singh (D) by Lrs. [1997 (7) TMI 692 - SUPREME COURT], this Court had an occasion to consider the effect of mutation and it is observed and held that mutation of property in revenue records neither creates nor extinguishes title to the property nor has it any presumptive value on title. Such entries are relevant only for the purpose of collecting land revenue. Similar view has been expressed in the series of decisions thereafter.
In the case of Suraj Bhan v. Financial Commissioner [2007 (4) TMI 778 - SUPREME COURT], it is observed and held by this Court that an entry in revenue records does not confer title on a person whose name appears in record-of-rights. Entries in the revenue records or jamabandi have only "fiscal purpose", i.e., payment of land revenue, and no ownership is conferred on the basis of such entries. It is further observed that so far as the title of the property is concerned, it can only be decided by a competent civil court.
Thus, it cannot be said that the High Court has committed any error in setting aside the order passed by the revenue authorities directing to mutate the name of the Petitioner herein in the revenue records on the basis of the alleged will dated 20.05.1998 and relegating the Petitioner to approach the appropriate court to crystallize his rights on the basis of the alleged will dated 20.05.1998.
SLP dismissed.
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2021 (9) TMI 1505
Non-inclusion of component of tax for GST at the time of quoting the tender - Petitioner contends that when the bill was submitted, respondents refused to pay the component of GST - HELD THAT:- The notice inviting tender produced as Ext. P1 is specific to the work in question. The mind of the employer in a contract is made evident through the notice inviting tender. Though the notice inviting tender is not by itself binding upon the parties, when the said document is acted upon by another party to the contract there arises certain binding obligations, based purely upon the terms specified in Ext. P1. De hors what happened before or after, the terms in Ext. P1 are required to be abided with. The bidders cannot vary or detract from the terms specified in that document. Viewed in the above perspective, irrespective of the Government order issued as G.O. (P) No. 2/2018/PWD dated 27.01.2018, if the 2nd respondent proceeded with the tender in question, incorporating specific terms that the bids must quote rates 'except' GST in Clause 3.3.3 as extracted earlier, it cannot be gainsaid later, by the employer to the contract, that the bids ought to have quoted rates including GST. It needs no elaboration to conclude that the said terms "except goods and service tax" being specific to the contract in question must govern the terms and conditions of the contract.
It is apposite to refer to the judgment cited by the learned counsel for the petitioner in Writ Appeal No. 445 of 2018 dated 18.12.2019. The said decision is reported as C.A. George V. State of Kerala and Others [2019 (12) TMI 1655 - KERALA HIGH COURT]. Though the situation in the abovesaid case was slightly different, the issue considered by the Court was whether the petitioner in that case was called upon to give the bid amount without the taxes or as exclusive of the taxes. After referring to the issues involved therein it was held by this Court that "the conditions of the notice inviting tender by itself does not amount to a contract. A contract comes into existence only when the price quoted by the contractor is accepted by the department. In the document which provides for the price bid, when there is clear instruction that the price should be without taxes, the bidder cannot be blamed for having not incorporated the tax element in the bid document.
The claim of the writ petitioner is justifiable and Ext. P9 is contrary to the settled propositions of law - It is declared that the terms and conditions contained in Ext. P1 shall govern contract for the work titled NABARD RIDF XXII Infrastructural works in Kurinjikkal Construction of Bridge across Puzhakkalthodu and set aside Ext. P9 - It is also held that petitioner was not bound to include GST in the bid quoted by him pursuant to Ext. P1 NIT.
Petition allowed.
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