TMI Tax Updates - e-Newsletter
May 15, 2015
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Highlights / Catch Notes
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Income Tax:
Notional interest accruing from other sources - there was no “real income” in the facts and circumstances of this case - no addition - HC
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Income Tax:
Treatment to the rental income from letting out of the godowns - the income received by the assessee, by way of rent, was the income received from property and it would not fall under the head income from business. - HC
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Income Tax:
When the assessee supplies the software which is incorporated on a CD, it has supplied tangible property and the payment made by the cellular operator for acquiring such property cannot be regarded as a payment by way of royalty u/s 9(1)(vi) - HC
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Income Tax:
Search u/s 132 - undisclosed income of three items - The statement recorded under section 132(4) of the Act would certainly constitute an important basis for an Assessing Officer to take necessary steps under the provisions of the Act - HC
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Income Tax:
Ex gratia/compensation amount as determined under section 10(10C) - assessee had exercised the option of voluntary retirement under the "exit option" scheme from State Bank of India - benefit of exemption extended - HC
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Income Tax:
Penalty under section 271(1)(c) - disclosure of income during search operation - such undisclosed income would get immunised from the levy of penalty. - AT
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Income Tax:
Addition on payment made through credit card - CIT(A) have considered the fact that some personal expenditure could also have been incurred by the assessee, so the disallowance made by the AO was rightly restricted to 5% of credit card expenses - AT
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Income Tax:
TPA - Jurisdiction of the AO in making the assessment without referring the matter to the Transfer Pricing Officer where the value of international transactions exceeded ₹ 5 crores - Transfer Pricing adjustments made by the AO in contradiction to the mandatory instructions of the CBDT is bad in law.- AT
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Customs:
Benefit of Vishesh Krishi Upaj Yojana scheme - exporters of Menthol and Mentha Oil - export of value added products under the description “Mentha Arvensis” - Petitioners will not be entitled to benefits of the Yojana from 1st April, 2004 till 31st March, 2007 - HC
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Indian Laws:
Possession of disproportionate assets / surplus income - The percentage of disproportionate assets is 8.12%. It is relatively small. In the instant case, the disproportionate asset is less than 10% and it is within permissible limit - HC
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Indian Laws:
THE BLACK MONEY (UNDISCLOSED FOREIGN INCOME AND ASSETS) AND IMPOSITION OF TAX BILL, 2015 - As passed by both houses of parliament
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Service Tax:
Denial of refund claim - SEZ unit - Notification 17/2011-ST dated 01/03/2011 - . Merely because there was a delay in grant of approval, that cannot take away the right accrued to the appellant for exemption from service tax in respect of the input services. - AT
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Central Excise:
Valuation - Deduction of sales tax - insofar as the period up to 1.7.2000 is concerned, case has to be decided in favour of the assessee and for the period from 1.7.2000 the benefit availed under the sales tax has to be included while arriving at the transaction value - SC
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Central Excise:
Imposition of penalty - when there was conflict of judicial opinion before the issue stood settled by the judgment of this Court, it is not a case where penalty should be imposed - SC
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Central Excise:
Refund of unutilized credit - Rule 5 of of CCR, 2002 - Refund to be allowed only after exclusion of credit amount on the finished goods lying in stock and also credit on raw materials - AT
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VAT:
Valuation - Deduction on account of “turnover discount” - VAT Tribunal fell into error in holding that the discounts on sales which are subject matter of the present appeals, were not deductible - Deduction allowed - HC
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VAT:
Right of use - VAT liability - hiring of Deluxe buses by DTC - there is no transfer of the effective control and possession - possession has always remained with the owner - No VAT Liability - HC
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2015 (5) TMI 460
Reopening of assessment - addition made on account of income from undisclosed sources - Held that:- There was a search undertaken in the case of M/s Mahasagar Securities P.Ltd. and its group companies including M/s.Gold Star Finvest P.Ltd. on 25.11.2009. A statement of Shri Mukesh Chokshi, Director of M/ s. Mahasagar Securities P.Ltd. was recorded during the search wherein Mukesh Chokshi had explained in detail the modus of operation of the accommodation entries racket being run by him by floating some 34 companies and admitted to be in business of providing the bogus accommodation entries. On the basis of the details obtained during the search by the investigation wing, it was noted that the assessee also had made sales and purchases of shares of M/s Buniyad Chemicals Ltd through M/s. Gold Star Finvest P.Ltd which had provided the accommodation entries. M/s Buniyad Chemicals Ltd as well as M/ s. Gold Star Finvest P.Ltd were floated by Mukesh Chokshi only. Since it was admitted by Mukesh Chokshi that he was providing accommodation entries only through its various companies, accordingly a notice u/s. 148 was issued after recording the reasons. Thus AO was having sufficient reasons to believe that there was an escapement of income, accordingly, he was justified in reopening the assessment u/s.147 of the Act - Decided against assessee. Ingenuine transactions - bogus accommodation bills - Held that:- AR placed reliance in the case of Shri Anantrai B Shah vs. ITO 21(1)(1), Mumbai [2012 (12) TMI 966 - ITAT MUMBAI] wherein it was held that Shri Mukesh Choksi has issued a general statement, however the statement was not provided by the assessee, therefore a general statement given by Mukesh Choksi cannot by applied to each and every case. The additions made were deleted as there was no direct evidence against the assessee. Neither the statement of Mukesh Choksi was provided to the assessee nor any opportunity for cross examination of Mukesh Choksi was provided. Further, reliance was placed in the case of Global Stock Broking {P} Ltd. vs. ACIT {2007 (11) TMI 591 - ITAT MUMBAI} it was held that where oral evidence of any party is sought to be used against an assessee, it is necessary that information relating to such statement or the copy of deposition should be furnished to the assessee with opportunity to cross examine the deponent, if required by the assessee .If it is not done, it is violation of principle of natural justice. - Decided in favour of assessee.
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2015 (5) TMI 437
Income from under invoicing in respect of export transactions - unaccounted business and hundi loans - Held that:- Official Liquidator has filed written statement along with pursis as Exh. A. The said written statement is prepared by Chartered Accountant assisting the Official Liquidator. The parties do not dispute that income of ₹ 1.71 crore was included in the income of R.B.S.D. Export firm from the Assessment years 1950-51 to 1958-59. As the other assessee is not party before us and addition of amount of ₹ 1,70,90,669/to the income of Export firm and its assessment accordingly is not in dispute. We accordingly answer Question in the affirmative. Double taxation - whether Tribunal was justified in law in sustaining the addition of ₹ 1.71 crores (Rs. One crore Seventy one lacs only) as the income of assessee from under invoicing in respect of export transactions ? - Held that:- The amount which has gone to Export firm actually belonged to assessee i.e. Private Limited company. It has concealed that income and clandestinely made it over to export firm. Thus, its ownership over said amount of ₹ 1.71 Crore is not in dispute. The amount really belonged to it and, therefore, it was and is answerable and has to pay tax on it. It cannot be permitted to urge that as Export firm has paid tax on that amount, the same cannot be demanded from it. The mischief of assessee Private Limited company has been detected and it cannot be permitted to take any advantage of it. If this argument of assessee Private Limited company is accepted, it is nothing but allowing it to reap benefit of mischief played by it. If on account of its own mischief, it has sustained any loss, it cannot make a grievance for the same. However, it is settled that it cannot be permitted to take advantage of its own wrong. The revenue has corrected the wrong and has also demanded tax from the assessee Private Limited company to whom that income really belonged. Thus, the Export firm has to pay tax as it has actually utilized that amount as its income while the Private Limited Company (assessee) has to pay tax as it attempted to conceal that income. The income really belongs to it and it was and is answerable to pay tax upon it. In this situation, we find that the concept of double taxation is not attracted in the present matter. Tribunal was justified in sustaining addition of ₹ 1.71 Crore as income of the assessee. - Decided against assessee.
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2015 (5) TMI 436
Transfer pricing adjustment - determination of ALP - ITAT in the impugned order discussed the nature of transactions and noticed that for benchmarking international transactions the AE had adopted the most appropriate method i.e. ANMM with PLI ratio (Indian law gives the dictates of Rule 10B of Income Tax Rules) - whether the TPO - and consequently the AO fell into error in not accepting the clubbing of transactions suggested by the assessee - Held that:- Issue which it is concerned with is AY i.e. 2009-2010 involves extremely restricted one. Having clubbed the transactions for the purpose of ALP determination whether the TPO/AO could have refused to follow the logic and consider the comparable profits from non-AE transactions in both segments is in issue. All that the ITAT did, in our view, was to cure this defect or anomaly and direct the AO to consider the margin of commission in each segment while determining the ALP. We at the same time clarify that the AO - who is now directed to carry out the exercise shall do so by applying principles in Rule 10(B) of the Income Tax Rules. The appeal is disposed of but in terms of above directions. It is clarified that this Court is not in any way disturbing the Tribunal’s direction to determine the rate of commission in either segment.
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2015 (5) TMI 435
Disallowance of transport expenses - Held that:- Considering the totality of the expenditure which was about ₹ 7,21,16,088/-, the cash expenditure of ₹ 36,84,500/-, could not be said to be of such magnitude as to have led to the startling result of rejecting the entire books of account. Furthermore, the AO does not indicate any reason why he accepted 1.75% of the entire transaction as permissible cash transportation expenditure. We, therefore, agree with the findings of the ITAT and held that the expense claimed for transportation could not have been a valid ground for rejecting the books of account. GP Addition - rejection of books and the imposition of 12% GP rate - ITAT deleted addition - Held that:- Reason for rejection of the books of account was not sound given that the assessee was maintaining the consistent accounting method which had been accepted during all previous years. So far as the irregularities with respect to “bardana” was concerned ITAT held that the assessee during the course of hearing drew our attention towards the balance sheet and the accounts and shown us the opening stock, purchases and sale of bardana. In view of these findings which are entirely based on fact, this Court is of the opinion that unless the Revenue points out something fundamentally wrong or unreasonable in the ITAT’s approach, the question urged by it with regard to addition on this score, is inadmissible. In view of the above conclusion, the further finding of the ITAT that the imposing of GP rate of 12% - later reduced to 11.6% was entirely unwarranted. Notional interest accruing from other sources - ITAT deleted the addition - Held that:- This Court agrees with the findings of the ITAT that the entire basis of this addition was hypothetical and not based upon any material evidence except the cheques found in the premises during the search. The assessee’s explanation was that these amounts had been returned. So far as the addition on account of interest which ought to have accrued is concerned, both the CIT(A) and ITAT were in unanimity in holding that such additions could not have been made. ITAT based its decision on the judgment of Commissioner of Income Tax v. Shoorji Vallabhdas and Co. (1962 (3) TMI 6 - SUPREME Court ). Having regard to these facts, this Court is of the opinion that there was no “real income” in the facts and circumstances of this case. In view of the concurrent findings, the Court will not interfere in this aspect. - Decided in favour of assessee.
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2015 (5) TMI 434
Notices u/s 153A - assessment proceedings of petitioner transferred from jurisdictional ACIT / DCIT, Circle - 6(2)(1), Bengaluru, to ACIT / DCIT,- Income Tax, Central Circle - 8(2), Mumbai - Held that:- There are no reasons forthcoming from the impugned order as to why the assessment proceedings of the petitioner pending before the jurisdictional Assessing Officer at Bengaluru is being transferred to Assessing Officer at Mumbai, except indicating that "transfer is being effected to facilitate effective and coordinate the investigations in the connected case of petitioner", in which search and seizure operations under Section 132 of the Act was conducted on 24.02.2014 by the Director of Investigations, Mumbai. This would not satisfy the criteria of reasons as indicated under Section 127 of the Act or the dicta laid down by this Court as well as by the Hon'ble Apex Court in the cases referred to hereinabove. In that view of the matter, it would suffice and meet the ends of justice if the impugned order is set aside and matter is remitted back to the Principal Commissioner of Income Tax, Bengaluru-560 006 to redo the matter after affording opportunity to petitioner. If further objections, if any, is filed to proposed transfer same shall also be considered. Decided in favour of assessee.
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2015 (5) TMI 433
Reopening of assessment - initiation of the reassessment proceedings beyond the period of 4 years -additional depreciation claim - Held that:- Applying the decision of the Division Bench of this Court in the case of Niko Resources Ltd. (2014 (9) TMI 892 - GUJARAT HIGH COURT ) as well as Gujarat Lease Financing Limited (2013 (10) TMI 101 - GUJARAT HIGH COURT ), to the facts of the case on hand and as observed hereinabove, there does not appear to be failure on the part of the assessee to disclose truly and fully all material facts necessary for assessment with respect to the additional depreciation claimed, the initiation of the impugned reassessment proceedings which are initiated beyond the period of four years, are not permissible and the same cannot sustain and on that ground alone, the impugned reassessment proceedings deserve to be quashed and set aside. The impugned notice under section 148 of the Income Tax Act for A.Y. 2007-2008 is hereby quashed and set aside and the impugned reassessment proceedings of reopening assessment for the A.Y. 2007-2008 are hereby terminated on the aforesaid ground alone. - Decided in favour of assessee.
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2015 (5) TMI 432
Treatment to the rental income from letting out of the godowns - business income or income from property - Tribunal confirmed the order of the CIT(Appeals) holding that so long character of the godown is retained as a godown, it should be treated as a commercial asset and its rental income must be treated as an exploitation of commercial asset in the nature of trade - Held that:- In the present case, the main business of the assessee was the export of tobacco and for that purpose they had constructed godowns. As submitted by the learned counsel for the assessee, the assessee would let out the godowns when they would not require the same and earn rental income therefrom. Apart from letting out the godowns, no other services/amenities, admittedly were extended by the assessee to the lessees. Merely because one of the objectives, in the partnership deed, was to let out the godowns would not mean that the assessee had undertaken the activity of construction of godowns and letting them out as business activity. Moreover, it is not the case of assessee that letting out of the godowns was continuous activity from year to year. Therefore, in our opinion, the income received by the assessee, by way of rent, was the income received from property and it would not fall under the head income from business. The character of the income would not stand altered because it was received by the firm with one of the objects of the partnership deed to let out their godowns. The income derived from letting out the property, in the facts of the present case, would not amount to profits or gains from the business. In other words, the income earned by letting out the godowns cannot be termed or treated as income from business. From the facts of the present case, it is clear that the assessee could let out their godowns only because those were not in use at the relevant time. Therefore, the rent received by the assessee would have to be computed as income from property. - Decided in favour of the Revenue
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2015 (5) TMI 431
Income from supply of software embedded in the hardware equipment or otherwise to customers in India - Does not amounts to royalty under Section 9(1)(vi) of the Income Tax Act and under Article 13(3) of the Double Taxation Avoidance Agreement (DTTA) between India and France, Canada, Germany, China etc. as per Tribunal - Held that:- Tribunal relied on ruling of this Court in Director of Income Tax V. Ericsson A.B.[2011 (12) TMI 91 - Delhi High Court ] wherein held that payment made to the assessee was in the nature of royalty either under the Income-Tax Act or under the DTAA. We have to keep in mind what was sold by the assessee to the Indian customers was a GSM which consisted both of the hardware as well as the software, therefore, the Tribunal is right in holding that it was not permissible for the Revenue to assess the same under two different articles. The software that was loaded on the hardware did not have any independent existence. The software supply is an integral part of the GSM mobile telephone system and is used by the cellular operator for providing the cellular services to its customers. There could not be any independent use of such software. The software is embodied in the system and the revenue accepts that it could not be used independently. This software merely facilitates the functioning of the equipment and is an integral part thereof. On these facts, it would be useful to refer to the judgment of the Supreme Court in TATA Consultancy Services Vs. State of Andhra Pradesh (2004 (11) TMI 11 - Supreme Court ), wherein held that software which is incorporated on a media would be goods and,therefore, liable to sales tax. Thus A fortiorari when the assessee supplies the software which is incorporated on a CD, it has supplied tangible property and the payment made by the cellular operator for acquiring such property cannot be regarded as a payment by way of royalty. - Decided in favour of assessee.
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2015 (5) TMI 430
Violation of the principles of natural justice - Whether ITAT before taking into consideration the additional evidence provided no opportunity whatsoever to the Assessing Officer? - Held that:- The power of the appellate authority clearly overrides the provisions of Sub-Rules (1), (2) and (3) of Rule 46 A and it is open to the said authority to look into any additional document if it considers the same as required to dispose of the appeal or for any other substantial cause. As a matter of fact, the principal reason for the CIT (Appeals) in allowing the appeal was the fact that the Assessing Officer had failed to issue specific notice with regard to the investment of ₹ 8 lacs made in M/s Rajesh Corporation Limited and further, he has come to the conclusion that ₹ 8 lacs was fully explained on the basis of balance sheet filed during assessment proceeding itself. It was only to further verify the statements in the balance sheet that he had additionally called for the bank statements to verify the said transaction of ₹ 8 lacs which had resulted in the balance sheet showing NIL in the account of M/s Sagar Sahkari Grih Nirman Samiti Limited in the assessment year in question. Thus, it was a clear cut case of exercise of the overriding power under Rule 46A(4) of the Rules and not really a case of permitting an assessee to file fresh document on the prayer of the assessee. The substantial question of law is, therefore, answered in favour of the assessee in view of the provision of Sub Rule (4) of Rule 46 A. - Decided against revenue.
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2015 (5) TMI 429
Search u/s 132 - undisclosed income of three items - assessee submits that the AO rested his conclusions exclusively on the statement recorded under section 132(4) of the Act and that the same is opposed to law- Held that:- The search that was conducted on March 4, 1997, led to the block assessment against the appellant covering the period from 1987-88 to 1997-98. Though the appellant submitted the returns showing nil income, the Assessing Officer conducted a detailed enquiry with reference to various items that are said to have been noticed by him before the search. The three items referred to above were dealt with in detail in the order of assessment. The defence offered by the appellant was that he clearly mentioned at the time of recording of the statement that the same would be subject to verification of the books of account. The statement recorded under section 132(4) of the Act would certainly constitute an important basis for an Assessing Officer to take necessary steps under the provisions of the Act. However, if the statement is retracted and there does not exist any other reliable material, making of assessment on the basis of such retracted statement cannot be treated as legal. Therefore, it is difficult to hold that the statement was bereft of any material. As a matter of fact, the relevant documents were shown to the appellant and he not only admitted the genuinity of those documents but also made it clear that the amount mentioned therein is an unaccounted income. Once the questions were put to the appellant, on the basis of the seized documents, which in turn were assigned separate numbers, there is no way the appellant can disown the same. Further, this is not a case, where the block assessment is based exclusively upon the statement. It was supported by the other documents seized during the course of search. - Decided against assessee.
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2015 (5) TMI 428
Assessment under Section 147 r.w.s. 144 - appellant alleged to have been involved in the A.H.D. Scam - non-allowance of the expenditure - Held that:- Department has not acted only on the basis of the allegations made in the First Information Report rather the DDI Investigation, Patna has collected details for the purpose, so far as it concerned the Income Tax Department and the materials collected by him, have also formed the basis for the Assessing Officer coming to the conclusions which he has. The Assessing Officer and the Appellate Authorities have taken note of the fact that the expenses which are incidental to supply, such as, purchases on which the business expenses are claimed and other expenses such as, freight, inwards/outwards, loading/unloading charges, godown rent, labour charges, stock insurance etc. which are indicative of a business operation being carried out were not reflected in the accounts of the assessee which would lead to the reasonable conclusion that the assessee was not carrying on any business operation in the nature of supply to the A.H.D. and, accordingly, the story of expenditure has been disbelieved. The aforesaid findings are purely findings of fact which cannot be assailed by the appellant in appeals filed under Section 260A of the Income Tax Act. - Decided against assessee.
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2015 (5) TMI 427
Ex gratia/compensation amount as determined under section 10(10C) - assessee had exercised the option of voluntary retirement under the exit option scheme from State Bank of India - Tribunal upholding the findings of the Commissioner of Income-tax (Appeals) that the conditions mentioned in rule 2BA of the Income-tax Rules 1962, have been met - Held that:- Income-tax Appellate Tribunal on facts has concluded that the respondent-assessee has served for a period of more than 10 years and at the time of retirement he was more than 40 years. The second exit option scheme of the State Bank of India was introduced to reduce the staff. It was just impossible to continue the new environment of computerisation applied to the workers and officers. The scheme has resulted in overall reduction of the employees. The assessee has furnished the declaration that he has not accepted any commercial employment in any company or concern belonging to the same management. Thus, on the facts, the first appellate authority has concluded that all the conditions laid down in rule 2BA of the Income-tax Rules are fulfilled. The question asked is no more res integra in view of CIT v. Koodathil Kallyatan Ambujakshan [2008 (7) TMI 259 - BOMBAY HIGH COURT] wherein ruled that the Central Board of Direct Taxes clarification based on the RBI's letter stating that the receipts under the voluntary retirement scheme did not qualify for exemption under section 10(10C) of the Income-tax Act is not binding on the courts. The said judgment is holding the field for more than five years and the same is being followed by other courts. In view of the same, the second question of law does not arise for consideration. In view of the same, no interference is called for. The appeal fails and the same stands dismissed. - Decided against revenue.
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2015 (5) TMI 426
Disallowance u/s 14A read with Rule 8D(2)(iii) - CIT(A) allowed part relief - Held that:- Assessee had share capital of ₹ 19.29 crores and reserves and surplus of ₹ 201.15 crores, sum of which far exceeded the investments of ₹ 41.68 crores of the assessee company in shares and mutual funds at the end of the year and therefore, as held by various Hon'ble Courts, no interest expenditure can be held to be attributable to earning to exempt income from share and mutual funds at the end of the year and therefore, as held by various Hon’ble Courts, no interest expenditure can be held to be attributable to earning of exempt income from shares and mutual funds. Accordingly, no disallowance is warranted in the appellant’s case under Rule 8D(2)(i) and Rule 8D(2)(ii). Disallowance u/s 14A r.w. Rule 8D cannot in any rate exceed the expenditure that has been actually incurred by the assessee as per its books of account for earning exempt income and in the absence of exercise not carried out by the AO as prescribed by section 14A before invoking Rule 8D as afore-stated, we find force in the contention of the counsel of the assessee and direct that only ₹ 1,72,879/- suo- motto disallowed by the assessee can be upheld and the rest of the addition made need to be deleted. - Decided in favour of assessee. Addition on account of product development expenses as deferred revenue expenses - CIT(A) deleted addition - Held that:- Such expenses were claimed by the assessee in earlier years too and were being allowed by department. So by applying the rule of consistency as laid by the Hon’ble Supreme Court in Radhasoami Satsang Vs. CIT (1991 (11) TMI 2 - SUPREME Court ), we are of the opinion that there was no need to take a different view, because, the facts permeating in earlier years have not changed. We concur with the opinion of the ld CIT(A) that expenses incurred for developing samples as per the requirement of customers are allowable expenses u/s 37(1) of the Act and are not covered by Section 35D of the Act. - Decided in favour of assessee.
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2015 (5) TMI 425
Interest payable by assessee - restriction u/s 43B - disallowance exceeding the amount debited to Profit and Loss account - Held that:- Considering contention raised by the assessee’s counsel in the light of the order of the ld CIT(A) in respect of another similar company like assesse namely Baghpat Co-operative Sugar Mills Ltd that Sahkkar Vishes Nidi and UP Cooperative Sugar Factories Federation Ltd. are UP State Govt. Institutions and are not covered in the definition of public financial institutions as given in section 4A of the Companies Act as provided in section 43B(d) of the Act, then how can there be different view be taken in the case of assessee . In the said scenario in the interest of justice, this issue is remitted back to the file of the AO to examine whether Sh. Shankar Vishesh Nidhi is a public financial Institution as envisaged u/s 43B(d) of the Act and decide this issue afresh - Decided in favour of assessee for statistical purposes. Addition on difference in sales price of molasses - CIT(A) deleted addition - Held that:- Assessee maintains regular books of accounts and the same were duly audited and no discrepancies have been spelled out or could be pointed out by the AO in the books of accounts and the same were not rejected by the AO. In the absence of any adverse material on record to show that any transaction outside books of accounts has taken place and differential sale proceeds have been received no addition can be estimated without rejection of books of account. We also find considerable cogency in the assessee’s counsel contention that molasses is an excisable commodity and no movement of molasses can take place without approval from excise department, the representatives of them are stationed inside the factory premises. In the case under consideration, we find that the AO has made no adverse comment with regard to the books of account. In view of the above the addition made was rightly deleted and we confirm the same - Decided in favour of assessee. Addition on account of credit balance of creditors - CIT(A) deleted addition - Held that:- CIT(A) has rightly observed that the AO has proceeded in ad hoc manner to label all creditors outstanding for more than a year as non-genuine. He has neither specified the name of the creditors, nor has he discussed the nature of transactions due to which such credit has come into existence, nor has made an enquiry with regard to such creditors. We further find considerable cogency in the assessee’s counsel contention that that this is a unit of U.P. Government and all the purchases are made against bills and at time due to tight liquidity situation in the unit certain payment are delayed; that the Ld. AO in an ad hoc manner added all the credit balances without appreciating the fact that payments in issue were made in subsequent years and settled and adjustments were made in subsequent years; And that the AO has nowhere doubted the genuineness of these creditors; And that no enquires were made by the AO and in a casual manner the credit balances were added to the income of the assessee. Thus firmity in the impugned order of the ld CIT(A), hence, we uphold the same - Decided against revenue.
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2015 (5) TMI 424
Penalty u/s 271(1)(c) - deduction on account of interest u/s 24 claimed - Held that:- AO in the course of assessment proceedings had not recorded any satisfaction while initiating the penalty proceedings, therefore, the penalty u/s 271(1)(c) of the Act was not leviable. In the present case, this contention of the ld. Counsel for the assessee that in the subsequent year similar claim was although disallowed but penalty proceedings were dropped was not rebutted. Therefore, on the identical facts in the year under consideration vis-ŕ-vis the subsequent year penalty u/s 271(1)(c) of the Act was not leviable, particularly when the department itself dropped the penalty in the subsequent year in similar facts. In the instant case the assessee claimed the deduction on account of interest u/s 24 of the Act because it was claimed and allowed in the preceding year, therefore, the claim of the assessee was a bonafide claim based on a similar claim of the earlier year, the assessee disclosed all the facts relating to the payment of interest and claim of deduction before the AO. Therefore, only on this basis that the claim in full was not accepted by the AO, it cannot be said that the assessee concealed the particulars of his income or furnished inaccurate particulars of his income. As such the penalty u/s 271(1)(c) of the Act was not leviable. - Decided in favour of assessee.
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2015 (5) TMI 423
Penalty under section 271(1)(c) - disclosure of income during search operation - Held that:- As decided in case of S.D.V. Chandru [2003 (12) TMI 40 - MADRAS High Court] in a case where the assessee had not disclosed his income in the returns filed for the previous year which have ended prior to the date of the search and, in the statement given under Section 132(4) the assessee admitted the receipt of undisclosed income for those years and also specified the manner in which such income had been derived and thereafter pays the tax on that undisclosed income with interest, then such undisclosed income would get immunised from the levy of penalty. Respectfully following the esteemed views of Hon’ble jurisdictional High Court, we uphold the grievance of the assessee. In view of the fact that the income in question was covered by the declaration made in the statement recorded under section 132(4) and the tax thereon was duly paid by the assessee, the provisions of Explanation 5 to section 271(1)(c) of the Act will come into play on the facts of this case. Accordingly, as the assessee rightly contends, penalty under section 271(1)(c) can not be sustained in law. In any event, as held by the Hon’ble jurisdictional High Court above, the penalty under section 271(1)(c) of the Act can only be imposed in respect of an income over and above the income disclosed in the return filed under section 153A, and since the income in question was included in the return filed by the assessee under section 153A, the impugned penalty is unsustainable. For this reason also, the impugned penalties of ₹ 79,070/- for A.Y. 2003-04, ₹ 82,070/- for A.Y. 2004-05 and ₹ 65,025/- for the A.Y. 2005-06 are, therefore, deleted. The assessee gets the relief accordingly. - Decided in favour of assessee.
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2015 (5) TMI 422
Disallowance of exemption u/s 54F - assessee had purchased land on which construction was done subsequently - Held that:- The essence of the said provision is whether the assessee who received capital gains has invested in a residential house. Once it is demonstrated that the consideration received on transfer has been invested either in purchasing a residential house or in construction of a residential house even though the transactions are not complete in all respects and as required under the law, that would not disentitle the assessee from the said benefit. As relying on Commissioner of Income-tax Versus Sambandam Udaykumar [2012 (3) TMI 80 - KARNATAKA HIGH COURT] the disallowance made by the AO was rightly deleted by the ld CIT (A) as In the instant case, it is seen that the assessee had purchased land on which construction was done subsequently. CBDT Circular No. 667 dated 18.10.1993 states that the cost of land is an integral part of the cost of residential house and therefore if the amount of capital gain for the purposes of section 54F is appropriated towards purchase of plot and also towards construction of the residential house thereon then the aggregate cost should be considered for determining the quantum of deduction U/S 54F provided that the acquisition of plot and also the construction thereon are completed within the period specified in the section. The assessee purchased the land on 28.12.2007 and construction was undertaken on this land which was completed within a period of 3 years as required under the provisions of section 54F of the Act. - Decided in favour of assessee. Addition on account of share transaction - no details were filed during the assessment proceedings in respect of purchase and sale of shares and therefore the above amount was added back to the appellant's income as per AO - CIT(A) deleted the addition - Held that:- the purchase and sale of shares has been made through the bank account of the assessee, securities transactions tax has been paid on the transactions, all the payments have been made and received through cheque and the transactions have been confirmed by the brokers by way of the ledger accounts, the disallowance made by the AO was not justified, and therefore it was rightly deleted by the ld CIT (A). - Decided against revenue. Addition on payment made through credit card - business purpose - Held that:- We concur with the observation of the ld CIT (A) that in the absence of any findings or evidence on record to show that the expenditure was incurred by the assessee was for non business purposes and also in view of the fact that the payments have been made through cheques by the companies in which the assessee is a director and also in view of the fact that the above expenditure has been accepted by the department in the assessments of these companies in which the assessee is a director, the disallowance made by the AO is not based on facts and it cannot be said that the credit card expenses were not incurred on behalf of the companies for business purpose in which the assessee was a director. However the ld CIT(A) have considered the fact that some personal expenditure could also have been incurred by the assessee, so the disallowance made by the AO was rightly restricted to 5% of credit card expenses of ₹ 17,47,917/-. The remaining disallowance was rightly deleted by the ld CIT (A). - Decided against revenue.
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2015 (5) TMI 421
Income from other unexplained source - CIT(A) deleted the addition - Held that:- In the present case, it appears that the assessee furnished all the relevant details along with the books of accounts before the ld. CIT(A) who forwarded the same to the AO for his examination. However, the AO in his remand report did not point out any specific discrepancy in those books of accounts and other details. The AO had not given any reason for making the addition of ₹ 12,11,801/- which was lesser than the total receipts declared by the assessee at ₹ 14,23,065/-. In other words the total receipts declared by the assessee at ₹ 14,23,065/- also included ₹ 12,11,801/- which were arbitrarily added by the AO separately. In the present case, the assessee was carrying out the business of laying underground cable wires/excavation work and received hiring charges of ₹ 14,23,065/-, therefore, the ld. CIT(A) was justified in directing the AO to treat the receipt of ₹ 14,23,065/- as business receipts. No valid ground to interfere with the findings of the ld. CIT(A) - Decided against revenue. Disallowance of depreciation - CIT(A) deleted the addition in part - Held that:- the assessee was having old assets with opening written down value of ₹ 13,14,240/- and purchased new assets of ₹ 3,87,680/-. The ld. CIT(A) found that out of the aforesaid new assets three bills were in the name of Rohit Bhardwaj and not in the name of the assessee company. Therefore, the depreciation was not allowable on those new assets and the ld. CIT(A) rightly directed the AO in not allowing the deprecation on the furniture amounting to ₹ 66,648/- (Rs.38,561/- + ₹ 18,000 + ₹ 10,087/-). In respect of other assets nothing was brought on record to substantiate that those were not used for the purpose of business. We, therefore, do not see any valid ground to interfere with the findings of the ld. CIT(A). - Decided against revenue. Unexplained expenses - CIT(A) deleted the addition - Held that:- In the present case, it appears that the AO made the disallowance of almost all the expenses claimed by the assessee by presuming that no business activity was undertaken by the assessee. On the contrary the AO admitted the receipts of ₹ 14,23,065/- which were on account of machinery hire chargers and earth excavation. The assessee was also engaged in the business of laying underground cable wires, therefore, some expenses were required to be incurred in the business activity. In the present case, the AO did not bring any material on record to substantiate that the expenses claimed, were not incurred for business purposes but for personal purposes or other purposes. We, therefore, considering the totality of the facts, do not see any merit in this ground of the departmental appeal. - Decided against revenue.
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2015 (5) TMI 420
Disallowance u/s 14A - whether on facts, where there is no exempt income, can the provisions of section 14A be invoked at all? - Held that:- the instant case, there is no claim of exempt income. The assessee explained the reason as well, as to how the dividend income received is taxable, because, the receipt of dividend was from a Sahakari Bank, which does not fall within the definition of Scheduled Bank and hence does not come within the scope of section 115O. Thus we are of the opinion that the revenue authorities erred in computing the disallowance. - Decided in favour of assessee. Whether there would be an effect in the working of tax in accordance with the provisions of section 115JB - Held that:- Provision of section 115JB would get attached, if the income determined under normal provisions is less then MAT, in such a circumstances MAT will supercede the normal provisions. Here in the case before us we do not find any reference of MAT provision. In such a circumstance, the second limb become otiose. In any case, tax payable under normal provisions was much more then MAT provisions. - Decided in favour of assessee. Depreciation claimed on inflated cost of windmills - CIT(A) allowed claim - Held that:- CIT(A), who allowed the claim of depreciation, placing reliance on the decision of his predecessors in assessment years 2002-03, 2003-04 and 2008-09 in the case of Karma Energy Ltd. (now amalgamated with the assessee). The issue was taken by the department before the ITAT and the ITAT, after considering detailed replies and submissions from either side, rejected the appeal as filed by the department, allowing the claim of depreciation - Decided against revenue. Exclusion of tax free investments from which no income was earned from the working of average tax free investment for the purpose of working under Rule 8D - Held that:- The assessee had interest free own funds of ₹ 8248.44 lacs and investments of ₹ 5162.95 lacs. This would clearly show that there would be no diversion of interest bearing funds. In such a case, the decision of Reliance Utilities and Power Ltd reported in [2009 (1) TMI 4 - HIGH COURT BOMBAY] would squarely cover the conduct of the assessee.Since the assessee did not intend to earn dividend and the investments made were from interest free funds, in our opinion, the CIT(A) was correct to hold that no further disallowance was called for. We, therefore, sustain the order of the CIT(A), deleting the disallowance - Decided in favour of assessee.
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2015 (5) TMI 419
Validity of the assessment - jurisdiction of the AO in making the assessment without referring the matter to the Transfer Pricing Officer where the value of international transactions exceeded ₹ 5 crores - Held that:- The mandatory instructions issued by the Central Board of Direct taxes cannot be brushed aside lightly. By not making reference to the Transfer Pricing Officer, the AO has breached the mandatory instructions issued by the CBDT thereby making the assessment order on this issue in violation of the provisions of the law. We, therefore, set aside the findings of the Ld. CIT(A) on this issue and hold that the Transfer Pricing adjustments made by the AO in contradiction to the mandatory instructions of the CBDT is bad in law. Here, we would like to make it clear that the assessment order is good but the Transfer Pricing adjustments made therein are bad in law. - Decided partly in favour of assessee.
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2015 (5) TMI 418
Accrual of Income - Advance of Fees Receipts - CIT(A) deleted the addition - Held that:- Gone through the tribunal order in assessee’s own case for A.Y. 2007 - 08 and find that the assertion of the assessee is correct. The issue involved in Ground No. 1 here was decided by the tribunal on this basis that the assessee was following cash system of accounting till A.Y. 2006 - 07 and the same was changed to mercantile system from A.Y. 2007 - 08. In that year, the tribunal approved the change in accounting system. In the present year, it is observed by the learned CIT (A) that this addition is on hypothetical basis as there is no change in accounting system in the present year. This finding of learned CIT (A) could not be controverted by the learned DR of the revenue and hence, we find no reason to interfere in the order of learned CIT (A) on this issue - Decided against revenue. Disallowance of of Salary Expenses - CIT(A) deleted the addition - Held that:- Similar disallowance was made in A.Y. 2007 - 08 by making similar observations by the A.O. and were deleted in that year by learned CIT (A) with a clear finding that simply because the name of a doctor is missing from the list submitted to DCI/MCI, salary paid cannot be disallowed. This order of learned CIT (A) in that year was confirmed by the tribunal. In the present year also, the basis of disallowance by the A.O. and deletion by CIT (A) is same. In the present year also, Learned DR of the revenue could not point out any specific defect in the order of learned CIT (A) on this issue - Decided against revenue. Non deduction of TDS - OPD charges paid to 2 doctors - Held that:- A clear finding is given by CIT (A) that no TDS was to be deducted in these two cases because in the first case, the income was below taxable limit and in the second case, TDS is not required to be deducted from reimbursement of expenses. This finding of learned CIT (A) could not be controverted by learned DR of the revenue - Decided against revenue. Disallowance of traveling expenses - difference in payment of salary - CIT(A) deleted the addition - Held that:- Finding is given by CIT (A) that the assessee had explained before the A.O. that there is a mistake in the auditor’s report regarding figure of salary to Shri Anurag Singhal. He has also observed that it was requested by the assessee to the A.O. that necessary reconciliation be sought from the auditors. He also observed that the assessee had produced books of account supporting this contention but no independent enquiry was made by the A.O. and no clarification was sought by the A.O. from the auditors. Thereafter, he deleted this addition by observing that since the A.O. has not brought on record any adverse evidence, addition is not justified. We do not find any infirmity in the order of learned CIT (A) on this issue. - Decided against revenue. Disallowance of expenditure as bugus - addition was made by the A.O. on this basis that sufficient supporting are not available - Held that:- Finding is given by CIT (A) that the assessee had explained that looking to the nature of expenses, its magnitude and volume and the nature of charitable activities in which the assessee is engaged, some vouchers may not be available. Learned CIT (A) has given a categorical finding that for expenses such as Mess, Generator, Staff Welfare and travelling etc., self made vouchers are also sufficient if the volume is small of such self made vouchers. Thereafter, he deleted this addition by observing that since no claim of bogus expenditure has been found by the A.O., addition is not justified. We do not find any infirmity in the order of learned CIT (A) on this issue - Decided against revenue. Addition as expenses are of capital nature - CIT(A) deleted addition - Held that:- Finding is given by CIT (A) that the assessee had explained that looking to the nature of expenses, its magnitude and volume and the nature of charitable activities in which the assessee is engaged, some vouchers may not be available. Learned CIT (A) has given a categorical finding that for expenses such as Mess, Generator, Staff Welfare and travelling etc., self made vouchers are also sufficient if the volume is small of such self made vouchers. Thereafter, he deleted this addition by observing that since no claim of bogus expenditure has been found by the A.O., addition is not justified. We do not find any infirmity in the order of learned CIT (A) on this issue in the facts of the present case because the activities of the assessee are charitable and considering the nature and volume of expenses. Disallowance u/s 40A(3)- CIT(A) deleted disallowance - Held that:- Similar disallowance was made in A.Y. 2007 - 08 also by making similar observations by the A.O. and were deleted in that year by learned CIT (A). This order of learned CIT (A) in that year was confirmed by the tribunal. In the present year also, the basis of disallowance by the A.O. and deletion by CIT (A) is same. In the present year also, Learned DR of the revenue could not point out any specific defect in the order of learned CIT (A) on this issue and no difference in facts could be pointed out by him - Decided against revenue. Loss on sale of Maruti - CIT(A) deleted addition - Held that:- The same was deleted by earned CIT (A) by observing that since the loss is suffered on a business asset, the same is allowable. Learned DR of the revenue could not point out any specific defect in the order of learned CIT (A) on this issue. - Decided against revenue. Disallowance of Depreciation - CIT(A) allowed claim - Held that:- The A.O. asked the assessee to furnish date of completion of building. The A.O. noted that no explanation was furnished and therefore, the A.O. disallowed the depreciation. The same was deleted by earned CIT (A) without giving a finding that the building was completed and put to use. In fact, this is stated by learned CIT (A) on page 21 of his order that for allowing depreciation, ownership and use of asset for business purpose is essential. Thereafter, he observed that none of these have been challenged by the A.O. but this is not correct because the A.O. asked for date of completion but no reply was given by the assessee. Neither before any of the authorities below nor before us, any evidence is brought on record regarding date of completion of building and putting it to use. Hence, Depreciation is not allowable. We, therefore, reverse the order of learned CIT (A) on this issue and restore that of the A.O. - Decided in favour of revenue.
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Customs
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2015 (5) TMI 459
Exemption under notification No. 23/98, dated 2-6-1998 [Sl. No. 164 list (17)] - Whether the appellants, are entitled to the benefit of exemption under notification No. 23/98, dated 2-6-1998 [Sl. No. 164 list (17)] on the raw materials imported for manufacture of cables - Held that:- Tribunal did not consider the entire materials on record, without making any observation on merits of the case, we deem it appropriate to set aside the order of the Tribunal. Order accordingly. The appeal is restored to file. The Tribunal shall endeavour to dispose of the appeal afresh, within a period of six months from the date of receipt of this order, and after giving an opportunity to both the sides to place the entire materials before the Tribunal in support of their case including the judgment of the Supreme Court in Zuari case (2007 (3) TMI 12 - SUPREME COURT OF INDIA) and other judgments, if any, in support of their contentions - Decided in favour of assessee.
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2015 (5) TMI 457
Extension of period of warehousing under Section 61 of the Customs Act - Confiscation of goods - Redemption fine - Expiry of warehousing period - Held that:- As per Circular No. 47/2002-Cus., dated 29th July, 2002 Commissioner is having power under Section 61 of the Customs Act, 1962 to condone the delay by extending the period for warehousing period. The said exercise has not been done by Chief Commissioner in the impugned order. Therefore, in these circumstances when the power is given the period of warehousing with a delay, in these circumstances, the same should be exercised judiciously but the same was not exercised. Therefore, extend the warehousing period till the time the application for re-export of the impugned goods be considered by Id. Chief Commissioner. - Matter remanded back - Decided in favour of assessee.
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2015 (5) TMI 442
Conviction for offence under Section 21(c) of NDPS Act, 1985 - non-compliance of provisions of Section 50 of NDPS - Held that:- Wherever giving of notice under Section 50 of NDPS Act is mandatory, it is incumbent upon the Investigating Officer of the case to inform the suspect that he has legal right to be searched before a Gazetted Officer or a Magistrate but it was submitted that since in the instant case the secret information was regarding carrying of contraband articles in the baggage therefore since the person of the accused was not required to be searched therefore compliance of Section 50 of the Act was not mandatory. That being so, even if there is any defect in the notice, same is inconsequential. - As per the prosecution case, the secret information was that the accused was carrying a bag which was containing contraband articles, that being so, the main question for consideration is whether in that eventuality provisions of Section 50 of the Act are attracted or not. In Aimer Singh v. State of Haryana, [2010 (2) TMI 1051 - SUPREME COURT] this aspect was specifically considered and dealt with. Following earlier Constitution Bench judgment, the Court held that when search and recovery from a bag, brief case, container etc. is to be made, provisions of Section 50 of the Act are not attracted. There is no evidence that the appellant was beaten, tortured or subjected to any third degree method. The appellant has not come in the witness box to substantiate the plea taken in her application. Moreover, had she been subjected to torture and use of third degree method, she would have complained to the Magistrate at the time when she was produced before him for the first time. Besides the confessional statement of the appellant, there was ample evidence on record to prove the case of prosecution - No other point was urged during the course of the argument. That being so, the conviction of the appellant under Section 21(c) of NDPS Act as awarded by the learned Special Judge does not warrant any interference. Out of 10 years sentence awarded to the appellant she has already served more than 9 years, she is not involved in any other case as such, liberal view be taken. As regards the minimum sentence awarded to the appellant and the fine imposed upon her, the same is the minimum sentence prescribed under that section. There is no enabling provision to Court for reduction of sentence by giving special or adequate reasons. Hence, plea as to reduction of sentence would not be tenable. As per the nominal roll dated 22.04.2015, the appellant has already served a sentence of 9 years 6 months 24 days leaving behind the unexpired portion of sentence of 5 months and 6 days. No previous involvement has been reported, her conduct has been reported to be satisfactory. Under the circumstances, while maintaining the quantum of fine of ₹ 1 lac, the default sentence of six months is reduced to one month simple imprisonment. - Decided partly in favour of appellant.
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2015 (5) TMI 441
Benefit of Vishesh Krishi Upaj Yojana scheme - exporters of Menthol and Mentha Oil - export of value added products under the description “Mentha Arvensis” - Classification of goods - Held that:- Inclusion of value added products were detailed in Appendix 37A of the Handbook. The relevant value added extracts of herbs were introduced in Appendix 37A under product code 11 and specifically 11.111, 11.112 and 11.113. On 1st April, 2008 with benefits due form 1st April, 2007. ‘Having considered all the facts and the relevant provisions, we find that Vishesh Krishi Upaj Yojana was introduced for incentivising exports in a phased manner. It is not as if every product which could be relatable to the items listed in 37A can qualify for export benefits. But only products that found mention in Appendix 37A qualified for export benefits - The petitioners’ were specifically granted benefit with effect from 1st April, 2007. This is evident from the Appendix which specifies dates of export from which benefit can be admissible. In case of diverse products different dates apply. For instance, in items covered under product Code 1 to 7, the relevant date was taken as 1st April, 2004. In chapter 33 of ITC (HS), Oleoresins specified in the list of items under product code 7A qualified for benefit from 1st April, 2005. Product code 8.106 only included the plant Mentha (Japanese pudina) (Mentha arvensis) which qualified for export benefit on 1st April, 2004. These did not in our view include the products derived from Mentha Arvensis. Mentha Arvensis, Linn (Mint, Pudina) covered by product code 08.432 qualified with effect from 1st April, 2004. The distinction drawn between product code 08.432 Mentha Arvensis (Mint, Pudina) and 08.438 described as Mintha Arvensis (Podina) itself makes it obvious that they are different variants of Mentha Arvensis covered by product code 08.106, 08.432 and 08.438. Petitioners’ specific products i.e. value added extracts of Mentha such as Menthol BP/USP, Menthol Crystal BP/USP, Mentha oil IP were covered by product code 11 and were undoubtedly, different from those covered by product code 08.106, 08.432 and 08.438. In addition, even within product code 11, we find different kinds of Mentha derived product. For instance, 11.114 refers to Menthone, 11.115 refers to Menthol liquid 11.116 refers to Mint Blend, 11.117 refers to Peppermint oil, 11.118 refers to Rectified peppermint oil, 11.119 refers to Spearmint, 11.120 refers to Cornmint oil, 11.121 refers to Dementholised peppermint oil and 11.122 refers to value mint, all of which qualified for benefits effective from 1st April, 2007. It is, therefore, not possible to accept the petitioners’ contention that their product qualified even earlier to their inclusion in product code 11. - Petitioners will not be entitled to benefits of the Yojana from 1st April, 2004 till 31st March, 2007 - Decided against assessee.
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Corporate Laws
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2015 (5) TMI 440
Winding up - Possession of property by official liquidator - Authority to a company Judge under Section 535 read with Section 446(2) of the Companies Act, 1956 - No notice of the proceedings received - Legislative powers between the Union and the States - Held that:- The several judgments of this court in assessing the width of the authority available under Section 446 of the Companies Act instruct that as long as there is a substantial connection of the lis with a company in liquidation, the company court presiding over such liquidation may receive it and adjudicate thereupon. But the authority under Section 446(2) of the Companies Act is not absolute and a later special Act as the Recovery of Debts due to Banks and Financial Institutions Act, 1993 has been seen to have substantially denuded the authority of the company court to address certain matters pertaining to a company in liquidation. However, such analogy is of no relevance in the present context as it is a subsequent State law which is cited here and not a subsequent enactment by the Parliament. The key to the primary issue that has arisen herein may not be so much in discovering that the company court would not have the jurisdiction to adjudicate on a claim of eviction made by the owner of an immoveable property against a company in liquidation or the illegal sub-tenants inducted by the company, whether prior to or after the commencement of its liquidation. Even if it is accepted that such jurisdiction is available to the company court, as the several judgments cited on such aspect instruct, there is an element of discretion available to the company court as to whether or not the jurisdiction should be exercised and the manner in which it should be exercised. As would be evident from the judgment in Tata Steel Ltd. [2007 (12) TMI 284 - HIGH COURT OF CALCUTTA] the company court would have been diffident in receiving the claim against an alleged illegal occupant; but when such alleged illegal occupant intervened in the proceedings and insisted on his rights qua the property being adjudicated by the company court, the entirety of the matter was assessed by the company court. When the same genre of claim was made before the company Judge in East India Trading Co. [2010 (7) TMI 269 - HIGH COURT OF CALCUTTA ]the company Judge declined to entertain the lis as an application that could be addressed in a summary manner and gave liberty to the applicant to file a regular suit before the company court itself. The jurisdiction is surely available, whether it ought to be exercised or not would depend on the nature of the claim. There is no doubt that if the appropriate procedure had been followed in course of CA No. 325 of 2010 to give due notice to these applicants and try the claim of the lessor against these applicants, such adjudication would have had to be regarded as being in accordance with the procedure established by law. Again, if the present application was tried on evidence to adjudicate on the applicants' title to remain in possession of the said premises, that would also have been a fair procedure as established by law. But it was not necessary to undertake the elaborate exercise of a trial on evidence of this application in the context of the summary procedure adopted in course of CA No. 325 of 2010. Since it is evident that the order of January 22, 2013 had the effect of, and ultimately resulted in, dispossessing these applicants from an immoveable property that was admittedly under their possession, without notice to them, CA No. 116 of 2013 is allowed and the order of January 22, 2013, in so far as it provided for the eviction or removal of the applicants from the said premises, is recalled. The lessor is left free to pursue any claim against the applicants herein, but in view of the property having been disclaimed in the lessor's favour by the order dated January 22, 2013 no suit to claim eviction may be instituted by the lessor against these applicants before the company court.As a consequence, the official liquidator will refund the deposit made by these applicants together with all interest accrued thereon within four weeks from date. - Decided in favour of appellant.
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2015 (5) TMI 439
Petition by an old time Director of a non-banking financial company which has failed in repayments - SEBI order prevented him from operating in any of the securities which he owns until further orders - Only Interim order passed by SEBI - Writ Jurisdiction - Territorial jurisdiction - An alternative remedy of appeal available - Held that:- In my view, the attempt by the petitioner approaching this Court is not appropriate at all for the following reasons. The order passed by SEBI is not a final one and it is interim in nature to consider the fact that the company which is a non banking financial company had made some defaults and the Directors were accountable for such default. In furtherance of the final order that is required to be passed to provide for appropriate protection to persons who have lost their monies, it has passed an order meant to secure rectitude in financial dealings by Directors of companies and making them accountable for their alleged lapses. It can be a harsh situation for person who is retired from a company from the directorship to be held responsible for defaults but if there is any order that is passed by SEBI at Bombay which is causing inconvenience and which is not even a final order but merely an interim direction by SEBI, it is amenable for review by SEBI itself and does not require to be monitored through proceedings of this Court. Even as regards the forum conveniens, it will be wrong to argue that the petitioner's own residence will give him a cause of action, as explained above. The Full Bench was dealing with the case of an order which was passed by Appellate Tribunal at Chennai and the Court was finding that the jurisdiction was available to it and even either a case could have also been filed at Bangalore. Such situation does not arise here. No part of the cause of action arises here except the fact that the petitioner is residing here. Even the decision of the Supreme Court in M/s Kusum Ingots & Alloys Ltd.'s case [2004 (4) TMI 342 - SUPREME COURT OF INDIA] was in a situation of what was appropriate and what was the forum conveniens. Convenience ought not to be understood as convenience of the parties at all times and that cannot be again spoken from the context of personal tragedies obtaining to the petitioner. He must challenge the order which is against him in a Court which is appropriate and in a forum which is competent. In this case, since it is not a final order and the order was not really adjudicated on rights of parties, I would think that there is no scope for intervention through writ petition. Therefore, I do not propose to make any intervention. The petitioner is at liberty to approach SEBI itself for modification of the order. There is yet another reason why it shall be wholly inexigent to make intervention at this stage. If the impugned order were to be taken as a final adjudication qua petitioner and hence cannot be modified by SEBI itself then every such order passed by SEBI is amenable for a challenge through an appeal to Securities Appellate Tribunal under Section 15 T of SEBI Act. The writ petition is not even competent or efficacious, since there is an alternative remedy of appeal provided under the Act. - Decided against the appellant.
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Service Tax
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2015 (5) TMI 456
Condonation of delay - Held that:- Tribunal has rejected the delay condonation application by impugned order by observing that the petitioner - original appellant has not given any justifiable reason for filing the appeal belatedly. It is true that the petitioner - original appellant ought to have and/or could have submitted elaborate reasons to justify the reason for filing the appeal belatedly. However, considering the fact that the petitioner - original appellant is a Society of the Members - Land Loosers Farmers and as such, there do not appear to be any mala fide intention in not filing the appeal within the period of limitation and/or filing the appeal belatedly, in the facts and circumstances of the case, on imposing a reasonable cost, we are inclined to condone the delay and direct the learned Tribunal to decide the appeal in accordance with law. - Delay condoned.
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2015 (5) TMI 455
Condonation of delay - Held that:- Tribunal has rejected the delay condonation application by impugned order by observing that the petitioner - original appellant has not given any justifiable reason for filing the appeal belatedly. It is true that the petitioner - original appellant ought to have and/or could have submitted elaborate reasons to justify the reason for filing the appeal belatedly. However, considering the fact that the petitioner - original appellant is a Society of the Members - Land Loosers Farmers and as such, there do not appear to be any mala fide intention in not filing the appeal within the period of limitation and/or filing the appeal belatedly, in the facts and circumstances of the case, on imposing a reasonable cost, we are inclined to condone the delay and direct the learned Tribunal to decide the appeal in accordance with law. - Delay condoned.
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2015 (5) TMI 454
Construction of residential complex - works contract services - Denial of refund claim - Unjust enrichment - Held that:- If the activity of the assessee is outside the purview of the taxable service qua the definition of the taxable service whether the sub-contractors had provided any taxable service and if so had remitted service tax, is a wholly irrelevant issue in the adjudication process. On whether assessee provided a taxable service, Government clarification dated 24.05.2010 is conclusive and the answer is that the appellant had not provided a taxable service. If that be so, the assessee is entitled to refund subject to fulfilment of the statutory requirement under Section 11B read with Section 12A and 12B of the Central Excise Act, 1944. On a conjoint reading of these provisions, the legislative trajectory is clear, that a claimant for refund of tax is required to establish that the burden of service tax (an indirect tax) was not passed on. If there is a passing of the burden, the doctrine of unjust enrichment kicks in and a refund claim would not be admissible nor can Revenue retain such amount. Even if there be unjust enrichment, the un- authorised tax remitted by an assessee or collected by the Government cannot be retained but must be credited to the Consumer Welfare Fund. Despite a series of correspondence between the assessee and Revenue officers, there is no material which has come on record to infer that the burden of service tax was not passed on by the appellant and the doctrine of unjust enrichment is therefore excluded - Matter remanded back - Decided in favour of assessee.
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2015 (5) TMI 453
Denial of refund claim - SEZ unit - Notification 17/2011-ST dated 01/03/2011 - Rejection has been made only on the ground that the approval committee of the concerned SEZ issued the certificate on 09/12/2011 - Held that:- There is no dispute that the input services on which refund has been claimed has been used in the export of services. There is also no dispute that the appellant applied for approval to the competent authority well before they undertook the transaction of the export. Merely because there was a delay in grant of approval, that cannot take away the right accrued to the appellant for exemption from service tax in respect of the input services. The ratio of the decision in the case of Global Wool Alliance Pvt. Ltd. (2011 (2) TMI 637 - CESTAT, MUMBAI) squarely applied to the facts of the present case. - appellant is rightly entitled for the benefit of refund under Notification 17/2011-ST dated 01/03/2011 - Decided in favour of assessee.
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2015 (5) TMI 444
Refund claim - GTA services - Reversal of CENVAT Credit under Protest - confirmation of the cenvat credit demand along with interest and imposition of penalty - Held that:- When the refund claim sanctioned to the respondent is consequent upon the Commissioners (Appeals) order dated 28.04.2010,which subsequently had been upheld by the Tribunal on 5.9.2012, the sanction of the refund claim is in order. - Decided against the revenue. Cenvat credit refund of ₹ 5,63,172/- for the period from May, 2008 to August, 2008 - Held that:- Commissioner (Appeals) had relied upon the Boards Circular dated 23.08.2007 clarifying that cenvat credit of service tax paid on the outward transportation of the finished goods upto the place of removal is admissible in case of sale of goods on FOR destination basis and in this regard, relying upon the judgment of the Honble Punjab & Haryana High Court in the case of Ambuja Cement Ltd. Vs. Union of India - [2009 (2) TMI 50 - PUNJAB & HARYANA HIGH COURT] and also the judgment of the Karnataka High Court in the case of ABB Ltd. (2009 (5) TMI 48 - CESTAT, BANGALORE), has held that the cenvat credit of service tax paid in respect of outward transportation of the goods upto the customers premises on FOF basis is available to the respondent for the period w.e.f. 1.4.2000. It is seen that in this regard, he has not discussed at all as to whether the Respondents sales were on FOR destination basis and if so, what is the evidence. - Matter remanded back for denovo consideration.
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Central Excise
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2015 (5) TMI 458
Waiver of pre deposit - Opportunity of hearing not granted - Held that:- Without laying down a general rule or a precedent but only in the facts and circumstances of the present case that we can adopt such a course where prima facie nexus would have to be established with the service of bringing in raw materials and for purposes of production of goods in the appellant's factory and their ultimate removal and whether on such an activity can credit be claimed and styling the same as input services are matters and given the effect of the rule which has been reproduced in the Tribunal's order would enable us to set aside the impugned order and restore the applications to the file of the Tribunal. The Tribunal shall give an opportunity to both sides to raise their contentions and thereafter pass a fresh order. While passing the same the Tribunal should not influence itself by its earlier conclusions or observations. - Matter remanded back - Decided in favour of assessee.
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2015 (5) TMI 449
Denial of CENVAT Credit - Clandestine removal of goods - Maintainability of appeal before the High Court - Held that:- The appeal on the aforesaid aspects is not maintainable under Section 35L(b) of the Central Excise Act and in fact it could have been filed under 35-G of the said Act before the High Court. This is a preliminary objection taken by the respondent in its counter affidavit to the present appeal and the objection is sustainable. Having regard thereto, we dismiss these appeals as not maintainable giving liberty to the appellant prefer the appeal before the High Court. - Decided against Revenue.
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2015 (5) TMI 448
Valuation - inclusion of sales tax amount - sales tax was paid at concessional rates under the sales tax incentive scheme - Held that:- Assessee would be entitled to claim deductions towards sales tax from the assessable value of the sales tax which is retained by the assessee. This position had changed after the amendment in Section 4 w.e.f . 1.7.2000 and in arriving 'transaction value' said sales tax benefit which was retained by the assessee, would be included while fixing the 'transaction value'. - Thus, insofar as the period up to 1.7.2000 is concerned, case has to be decided in favour of the assessee and for the period from 1.7.2000 the benefit availed under the sales tax has to be included while arriving at the transaction value. - Decided aagainst Revenue.
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2015 (5) TMI 447
Denial of CENVAT Credit - Imposition of penalty - Held that:- Central Excise – Appellant availed credit and paid excise duty at the time of clearance of goods. After sometime suo motu reversed it to avail exemption and claim for refund of duty paid. - Claim of exemption not allowed Decision in the case of Amrit Paper vs. Commnr. Of Central Excise reported in [2006 (7) TMI 7 - SUPREME COURT OF INDIA] followed However, it is not a case where penalty should be imposed by the respondent. Therefore, while upholding the order of the adjudicating authority insofar as the payment of duty is concerned, we set aside the order as far as penalty is concerned. - Decided partly in favor of Revenue.
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2015 (5) TMI 446
Refund of unutilized credit - Rule 5 of of CCR, 2002 - exclusion of credit amount on the finished goods lying in stock and also credit on raw materials - Held that:- The Rule 5 of CCR, stipulates that where the exporter can claim refund only when not able to utilize the accumulated cenvat credit for payment of domestic clearance. As seen from the above, read with Notification No. 11/2002, the input credit attributable to the goods exported has been correctly worked out to ₹ 39,49,239/-. What is excluded is the input credit involved in the physical stock of inputs and finished goods lying in stock on 31.03.2003. Therefore, the adjudicating authority has correctly sanction the refund amount of ₹ 39,49,239/-. - Decided against the assessee.
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2015 (5) TMI 445
Valuation of goods - Section 4 - whether the amount of ₹ 49.36 allowed to be retained by the respondents from the price or not - Held that:- adjudicating authority has dealt with valuation issue in detail and dropped the proceedings by relying on this Bench of the Tribunal in the case of Mahadev Industries Vs CCE Belgaum [1999 (6) TMI 202 - CEGAT, MADRAS] and also by relying on the Hon'ble Supreme Court's decision in the case of Dai Ichi Karkaria (1999 (8) TMI 920 - SUPREME COURT OF INDIA). The lower appellate authority also in the impugned order upheld the above order by relying this Bench decision on the identical issue in the case of CCE Coimbatore Vs Kottukulam Engineers. We find that in the present case, the respondent has rightly discharged the excise duty as per contract price of ₹ 712.86 per sleeper which is a sale price. As per Section 4, the price at which the goods are cleared to the railways is the transaction value. In this case, the respondents have rightly discharged excise duty. Therefore, the appellate authority, by relying on the decision of Hon'ble Supreme Court as well as this Bench order (supra), has rightly upheld the adjudication order. We do not find any reason to interfere with the same - Decided against Revenue.
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2015 (5) TMI 443
Maintainability of appeal - monetary limit - Held that:- Even where appeals were filed prior to issue of the Circular by the Board prescribing mandatory limits for filing the appeals by Revenue, in the light of the decisions of Hon ble High Court of Karnataka in the case of Commissioner of Income Tax, Bangalore vs. Ranka & Ranka reported in [2011 (11) TMI 449 - KARNATAKA HIGH COURT] and CCE & ST, Bangalore vs. Mico Ltd.: [2012 (10) TMI 139 - KARNATAKA HIGH COURT], appeals are not maintainable. - Decided against Revenue.
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CST, VAT & Sales Tax
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2015 (5) TMI 462
Valuation - Deduction on account of “turnover discount” - Classification of movement of goods against 'F' from - interstate sale or not - Whether the VAT Tribunal fell into error in holding that the discounts on sales which are subject matter of the present appeals, were not deductible - Whether the VAT Tribunal fell into error in holding that the said sales were not inter-state sales within the meaning of expression under Section 3(a) of the Central Sales Tax Act, 1956 - Held that:- In computing the turnover, the sales price received, or receivable, by the dealer is to be reduced to the extent of the “cash discount” accorded by him to the purchasers under the normal prevailing trade practices. Unlike some other statutes governing the Sales Tax (e.g. Kerala General Sales Tax Act 1963, to which we shall make a reference a little later), Delhi Sales Tax Act does not specifically refer to any discount other than “cash discount”. - Clearly, the approach of the Tribunal in the case at hand has been misdirected. The facts here are dissimilar to those prevailing in Indian Pistons Limited (1973 (7) TMI 95 - MADRAS HIGH COURT). That the provision contained in Section 2(m) of Delhi Sales Tax Act does not conceive of any deduction other than “cash discount” from the sale price on which the turnover is to be computed is of no consequence, inasmuch as, as explained by Supreme Court in Advani Oerlikon (1979 (10) TMI 194 - SUPREME COURT), the effect of turnover discount, which is in the nature of a trade discount in accord with the prevailing practices of the trade, enters the calculation anterior to the computation of the sale price collected or collectible from the purchasers. Tribunal having failed to comprehend the law laid down in Advani Oerlikon (supra), fell into error, because it proceeded on the wrong premise that the assessee had been in receipt of the sale price equivalent to the catalogue price from which it would subsequently allow reimbursement on the basis of turnover. Since the said assumption is factually incorrect and the turnover discount occurred “apart from and outside” the calculation of the sale price, rather “prior to it”, as in the case of Advani Oerlikon (supra), no question arises for deduction of any trade discount from the sale price. - turnover for the assessment years in question was correctly computed by the appellant herein after deducting the turnover discount granted to its dealers and rightly so declared in the returns. The assessing authorities have unjustly denied the benefit of deduction on such account. On inter-State sale:- assessee (appellant) herein itself did not treat the transactions in question in its record as inter-State sales. The provision contained in Section 6A(1) of the Central Sales Tax Act, 1956 places the burden of proving a transfer of goods claimed to have been effected “otherwise than by way of sale” upon the dealer. The clause stipulates that if a dealer claims that he is not liable to pay tax in respect of any goods on the ground that the movement thereof “from one State to another” was occasioned by reason of their transfer by him “to any other place of his business or to his agent or principal, as the case may be” not by reason of sale, he is obliged to submit a declaration to such effect in the prescribed format along with evidence, inter alia, of dispatch of such goods. In terms of the provision, a presumption arises that the movement of goods was “as a result of sale” in the event of the failure on the part of the dealer to furnish such declaration. The format for declaration in terms of Section 6A is prescribed by Rule 12(5) of the Central Sales Tax (Registration and Turnover) Rules, 1957 in the shape of “form F”. Assessee itself treated the movement of goods from Faridabad to Delhi “otherwise than by way of sale” within the meaning of the clause contained in Section 6A of the Central Sales Tax Act and not only reflected it so in its stock registers but also, more importantly, made a formal declaration to such effect by issuing “form F”. No documents showing placement of orders by M/s Tyre Junction, Badarpur, Delhi for purchase of such goods have been shown the light of day and, therefore, there is nothing on which it can be inferred that the movement of goods from Haryana to Delhi had been occasioned by the sale of such goods in favour of M/s Tyre Junction. - The claim of the assessee about the inter-State sale of the goods, thus, remained unfounded and was rightly rejected by the authorities below including the Tribunal. We may add that if a different view has been taken by the assessing authorities in the State of Haryana or if any tax on such account has been collected from the appellant, it is for him to seek appropriate remedies there against such orders. - Decided partly in favour of assessee.
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2015 (5) TMI 461
Right of use - VAT liability - hiring of Deluxe buses by state transport corporation - transfer of the effective control and possession - Whether the agreement between the appellant and Delhi Transport Corporation giving on hire two Deluxe buses for being plied as per requirement of the latter on the routes and as per schedule specified its transfer of right to use of goods so as to be liable to VAT under Section 2(zc)(vi) of DVAT Act - Held that:- While the bus-related responsibilities under the contract are to be borne by the owner (the assessee), it is the duty of DTC to provide a conductor - The contract also stipulated that the owner shall be obliged to keep the bus in neat, clean and presentable condition and for purposes of upkeep, make the necessary arrangements with service centres/dealers/repair shops, etc. on the routes where they were deployed as per schedule decided upon by the DTC. In terms of the contract, it is the owner who would arrange fuel (on reimbursable basis), lubricant, tubes, spare parts, etc. The owner is obliged by the contractual terms to take prior permission before the vehicles are sent for repairs with obligation to indicate in advance the period of non-availability of the vehicles on such account. The owner is not entitled to “withdraw the bus from operation without prior written consent” of DTC nor can it use these vehicles “for any other purpose at any time”, nor “transfer or otherwise alienate (except with prior written permission of DTC) vehicles” during the period of agreement. It is under a general obligation to “abide by the orders” of DTC or an officer authorized by it. Both the majority and concurring opinion in Bharat Sanchar Nigam Limited (2006 (3) TMI 1 - Supreme court) emphasize that the goods should be “ultimately delivered”, for the transaction to constitute a “sale” within the extended meaning, defined by Article 366(29A) of the Constitution of India. Rashtriya Ispat Nigam Limited (2002 (3) TMI 705 - SUPREME COURT OF INDIA) spells out that where even access or physical control of machinery or such like goods are made over, such a transaction by itself would not be transfer of the right to use if effective control is maintained by the owner. In the present case, the owner bears responsibility for any mishappening or accident. It commits to be the bus owner at all times; the registration and licenses are in its favour and most importantly, the DTC has limited use for these buses, i.e. to ply them (of course through driver provided by the owner) at the scheduled routes in terms of the contract. In these circumstances, this Court is of the opinion that the Tribunal could not have distinguished the decision of the Division Bench of this Court in International Travel House (2009 (9) TMI 879 - DELHI HIGH COURT). Tribunal has fallen into error by declining to apply the ratio of International Travel House Ltd.(supra) and by concluding that the contract in question has resulted in transfer of the effective control and possession of the two vehicles (goods for purposes at hand) unto DTC. On the contrary, the various terms of the contract, summarized above, make it vividly clear that the possession has always remained with the owner. Undoubtedly, it is the obligation of the registered owner to make the vehicles available, with their respective drivers, for being deployed on routes, and as per schedule, specified by DTC. - The transaction has been wrongly treated as “sale of goods” by the authorities below - Decided in favour of assessee.
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2015 (5) TMI 452
Validity of Tribunal's order - Whether the Appellate Tribunal, Value Added Tax was justified and right in dismissing the appeal filed by the appellant Rosa Traders Pvt. Ltd. for failure to deposit the entire amount of ₹ 2 lakhs - Held that:- appellant has closed and stopped their business activities and the person in charge is an old man more than 85 years of age. The lapse and default on the part of the appellant, because of the delay in depositing ₹ 2 lakhs is accepted. It is pointed out that the total quantum of additions, which were subject matter of challenge before the Appellate Tribunal is ₹ 39,40,971/-. It is submitted that in case the appeal is not heard and decided on merits, the appellant will be burdened with the huge liability, which, keeping in view the old age and financial position, the company may not be able to meet and the person in charge would face penurious situation. Noticing these facts while issuing notice vide order dated 09.09.2014, we had asked the appellant, whether they could deposit a further amount. Learned counsel for the appellant has stated that they would deposit another amount of ₹ 50,000/- and a challan would be produced. - appellant has produced before us photocopy of the two challans dated 17.09.2014 and 19.09.2014 of ₹ 25,000/- each, totalling to ₹ 50,000/-, whereby the said amount stands deposited. Keeping in view the aforesaid facts and also noticing the advanced age of the person in charge, we are inclined to allow the appeal and to answer the question of law in favour of the appellant. - appeal is restored to be decided on merits by the Appellate Tribunal, Value Added Tax - Decided in favour of assessee.
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2015 (5) TMI 451
Waiver of pre deposit - Whether the Appellate Tribunal, Value Added Tax was justified in directing the appellant to deposit 25% of the amount in dispute in respect of assessment of tax, though the appellate authority on the question of quantum and other issues had remanded the matter to the assessing authority and, therefore, no payment was due and payable on the date when the appeal was preferred and on 24th April, 2014, when the Appellate Tribunal had passed the order directing the said pre-deposit - Held that:- When there was no demand, which was due and payable, we do not think that the appellant was required to pay 25% of the “disputed amount”. The reason is simple, because when no demand was in existence and payable, the question of waiver of pre-deposit would not arise. There is difference between waiver of pre-deposit and direction to pay “tax” which was not determined and decided. Appellate tribunal has decided the application for waiver of deposit. It has not decided an application of the revenue that ad hoc payment should be deposited, assuming that such application was maintainable. The aforesaid distinction has not been kept in mind and deliberated while deciding an application for waiver of pre-deposit. In fact the appellant was not required to file the said application. Noticeably, the appellant assessee had deposited 5% of amount in dispute i.e. ₹ 1,65,670 as per the directions of Additional Commissioner, the first appellate authority. If we accept ratio and direction to deposit 25% of the demand, originally computed but set aside, we would be restoring and in a manner directing payment of an amount not due and payable. - Decided in favour of assessee.
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2015 (5) TMI 450
Rectification of application - Appeal dismissed for non compliance order - Held that:- Against the petitioner's willingness to deposit sum of ₹ 50 lacs during the appellate proceedings, the Tribunal reduced such requirement to ₹ 24 lacs on the say of the petitioner. The petitioner's advocate had assured the Court that such amount would be deposited within two days from the date of order. Instead of making good such deposit by 29.6.2007 as assured, the petitioner filed affidavit before the Tribunal on 18.2.2008 suggesting that due to death of husband of the Director of the petitioner company and for want of making arrangement of funds, the amount could not be deposited. The Tribunal rejected the application noting that such amount of ₹ 24 lacs which was required to be deposited within two days, was not deposited till the year 2013. When the representative of the petitioner held out a promise before the Tribunal that such sum of ₹ 24 lacs would be deposited within two days, none of the factors sought to be pressed in service for recalling such order existed. Such development took place much later. On such basis, condition could not be rescinded. Tribunal committed no error. Before the Tribunal, the petitioner had requested for a remand to enable the petitioner to take benefit of amnesty scheme. While accepting such request, the Tribunal imposed precondition. Such condition was as suggested by the counsel for the petitioner. Amount required to be deposited was less than half of the petitioner had agreed before the first appellate authority. In fact, it was stated that such amount would be deposited within two days. Much later the petitioner requested for deletion of such condition. Even till date such amount is not deposited. - Time extended for making deposit - Decided partly in favour of assessee.
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Indian Laws
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2015 (5) TMI 463
Possession of disproportionate assets / surplus income - known source of income - offence punishable under Section 13(1)(e) read with Section 13(2) of Prevention of Corruption Actand under Section 120-B of Indian Penal Code - Held that:- It is well settled law that according to Krishnanand Agnihotri’s case [1976 (12) TMI 187 - SUPREME COURT OF INDIA], when there is disproportionate asset to the extent of 10% the accused are entitled for acquittal. A circular has been issued by the Government of Andhra Pradesh that disproportionate asset to the extent of 20% can also be considered as a permissible limit. The margin of 10% to 20% of the disproportionate assets has been taken as a permissible limit, taking into consideration the inflatory measures. Since the value of apparels and slippers etc., are of insignificant value, I did not deduct this amount from the assets of DV & AC. The Prosecution has mixed up assets of Accused, firms and companies and also added the cost of construction i.e., ₹ 27,79,88,945/- and marriage expenses at ₹ 6,45,04,222/- and valued the assets at ₹ 66,44,73,573/-. If we remove the exaggerated value of cost of construction and marriage expenses, the assets will workout at ₹ 37,59,02,466/-.The total income of the Accused, firms and companies is ₹ 34,76,65,654/-. Lack of proportion amount is ₹ 2,82,36,812/-. The percentage of disproportionate assets is 8.12%. It is relatively small. In the instant case, the disproportionate asset is less than 10% and it is within permissible limit. Therefore, Accused are entitled for acquittal. When the principal Accused has been acquitted, the other Accused, who have played a lesser role are also entitled for acquittal. Decision in the case of KRISHNANAND AGNIHOTRI V/S. STATE OF M.P [1976 (12) TMI 187 - SUPREME COURT OF INDIA] followed. In this case, the Trial Court has ignored the Income Tax proceedings as minimum evidentiary value. The Trial Court has not appreciated the evidence in a proper perspective. Though the Trial Court in its judgment mentioned that the accused availed loan by the Indian Bank, but it has not considered the same as income. Therefore, the Trial Court has erred in not considering the loans as income. Even the valuation though disputed by the defence the Trial Court has failed to examine the evidence relating to cost of construction at that relevant time and simply arrived at a conclusion that 20% of the cost has to be reduced without appreciating the evidence placed on record. This 20% reduction is calculated on surmises and conjectures. - Decided in favor of appellant.
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2015 (5) TMI 438
Permissibility of a liquor vend in a “Convenient Shopping Centre” - Held that:- on what basis DDA has taken a stand that a liquor vend though is permitted in a LSC is not permitted in a CSC. If both, LSC and CSC can be situated in the midst of a cluster of houses, whether housing 5000 or 1000 persons and naming thereof as LSC or CSC is dependent only on the area of land on which it is constructed, the problem / nuisance highlighting which both proceedings have been filed will persist, whether it is a LSC or a CSC. MPD 2021 appears to be half baked in this respect. - a CSC as a small shopping centre in the midst of the houses within the colony or a block thereof with shops therein selling items of daily need of households of perishable items and which shops ordinarily an outsider from the colony would not visit and a LSC as situated outside the residential colony, to cater to the needs of the households of consumables which may be required say once a month and also having offices, service centres like travel agents, car rentals, clinics, laboratories, banks, restaurants etc. and which will be frequented by residents of several surrounding localities and may be by others as well. In such case it could have been said that as per our culture, there ought not to be a liquor vend in a CSC. However we do not find the MPD-2021, though having the nomenclature of CSC and LSC to have made any such distinction. The draftsman of the Master Plan, after drawing the five tier system of commercial areas comprising inter alia of LSC and CSC, has provided retail shopping without any restriction on the size of the retail shop or on the commodities to be retailed therefrom, in both LSC and CSC and the only restrictions are on commercial offices of size more than 125 sq. mtrs., Clinical Laboratory, Polyclinic, Guesthouse, Coaching Centre, which activities though can exists in a LSC but not in a CSC. When there is no restriction on the commodities / items which can be retailed from a shop in a CSC, we fail to see on what basis DDA can say that retail of liquor is not permitted from therein. Not only so, restaurants have been permitted in both, LSC and CSC. Though the concerns expressed by the petitioner/appellant cannot be said to be totally unfounded but cannot be addressed on the basis of MPD-2021, pegging on which the Court has been approached. The same is the position under the Excise Act and the Rules framed thereunder. Though care has been taken therein to prohibit a liquor shop in close proximity to an educational institution, religious place etc. but there is no such limitation placed with respect to proximity to residences. - in the said state of affairs are unable to find any illegality in the grant of license for liquor vends at the subject sites. All that we can do is to direct that in accordance with the minutes of the 11th meeting of the Advisory Group of the DDA held on 23rd August, 2013, a suitable framework be formulated so as to curb the nuisance associated with consumption of liquor around CSCs in residential neighbourhood. The same be done preferably within a period of four months - Petition disposed of.
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