TMI Tax Updates - e-Newsletter
August 29, 2015
Case Laws in this Newsletter:
Income Tax
Customs
FEMA
Service Tax
Central Excise
CST, VAT & Sales Tax
Wealth tax
Indian Laws
TMI SMS
Highlights / Catch Notes
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Income Tax:
Revision u/s 263 - AO has failed to discharge his legal obligation to ascertain truth of statement furnished by the Assessee by means of verification with account books. The Commissioner has rightly held that assessment order is erroneous and prejudicial to the interest of revenue - HC
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Income Tax:
Once the stock register has been held to be properly maintained and has been held to be proper, no trading addition could have been made and rightly so, even otherwise, minor discrepancies cannot result into rejection of books of accounts. - HC
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Income Tax:
MAT - book profit adjustments - by no stretch of imagination the profits of amalgamating units could have been included in financial year ending on 31-03-2008. - AT
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Income Tax:
Grant of approval u/s.80G denied - if the Honorarium paid to the Brahmins of the assessee trust is excluded, then there is no violation of the provisions of sub-section 5B of section 80G - approval to be granted - AT
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Income Tax:
Registration under Section 12A - diversion of income by overriding title - Wwhatever the assessee does out of the grant and interest accrued can only be said to be application of income for the stated objects and activity of the assessee society and therefore reject the assessee's plea that there was diversion of income by overriding title - AT
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Income Tax:
Undisclosed investment - purchase of property at below circle rate - property has been purchased by the assessee in the financial year 2007-08, the mandate of section 56(2)(vii) cannot apply retrospectively. - AT
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Income Tax:
TDS u/s 194H - the main contractor makes the payment to the assessee after receiving the payments from the Government - there is no payment by the assessee to the main contractor - Mere book entry in the books cannot lead to TDS liability u/s 194H - AT
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Income Tax:
Addition U/s 40A(3) - book entries in respect of incentives. - Merely because some book entries are routed through the assessee’s cash book the learned Assessing Officer cannot ignore the real nature of the transactions and arbitrarily hold them as cash payments - AT
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Customs:
Goods mis-declared to avoid duty – import of electronic components/parts - Commissioner in his order, which proved that what was, in fact, imported was complete sets of audio systems in dis-assembled conditions with a view to evade custom duties. - Tribunal committed grave error in ignoring the facts - SC
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Customs:
Principle of Res-Judicata - While dismissing appeal of Revenue in first ground of litigation, no doubt Supreme court had left question of law open - However, that could not be ground to reopen case of Revenue - SC
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Customs:
Non-Compliance of condition under which search shall be conducted – offence punishable under Section 20(b) of NDPS Act, 1985 - Mere fact that gazetted officer, who was called at spot to conduct search also happened to be Executive Magistrate, in no manner, fulfill lacuna left by Investigating Officer - HC
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FEMA:
Money laundering - res judicata in the criminal complaint - the principle of res judicata does not apply to interlocutory orders like order of stay, injunction or appointment of receiver which are designed to preserve the status quo pending litigation to ensure that the parties may not be prejudiced but the normal delay which the proceedings before the Court usually take. - AT
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FEMA:
Contravention of Section 18 (2) of the Foreign Exchange Regulation Act, 1973 - non-realization of export proceeds - DoE failed to make out a case of contravention of Section 18 (2) FERA as far as the Appellant was concerned - HC
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Indian Laws:
High Court cannot dismiss an appeal for non-prosecution simpliciter without examining the merits - the court is not bound to adjourn the matter if both the appellant or his counsel/lawyer are absent - SC
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Indian Laws:
Revisional order dismissed as barred by limitation - Section 5 of the Limitation Act provides that an appeal may be admitted after the limitation period has expired, if the appellant satisfies the court that there was sufficient cause for delay - Section 5 of the Limitation Act is applicable to Section 19 of the Act of 1983. No express exclusion has been incorporated therein - SC
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Service Tax:
Manpower Recruitment or Supply Agency service - The recipient client must thus be an employer or prospective employer and the consideration for this service must flow from such employer to the provider of the service - placement charges are collected from students is not taxable - AT
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Service Tax:
Power of commissioner to remand back the matter - As regards the ruling of Hon'ble Apex Court in MIL India Ltd. (2007 (3) TMI 8 - SUPREME COURT OF INDIA), the Hon'ble High Court observed that the Ruling is not applicable to Service Tax matters as sub-Section (5) of Section 85 of Finance Act, 1994 starts with words “subject to the provisions of this chapter” - AT
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Central Excise:
Recovery of excise duty - since the petitioner had only purchased the assets of the Corporation in pursuance of the winding up order passed by the High Court and had not taken over a running business of the Corporation, the liability of past central excise dues payable by the Corporation cannot be fastened nor recovered from the petitioner - HC
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Central Excise:
Denial of refund claim - Bar of limitation - payment of duty was made before issue of SCN - claim of refund was submitted after the SCN was dropped - period of limitation to be computed from the date of final order dropping the demand - HC
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VAT:
Adjustment of tax liability – Out of input tax credit available – dealer can adjust current year tax liability out of Input Tax Credit available in credit of dealer - no interest and penalty - HC
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VAT:
Increase in Purchase price – Increase in tax – Rejecting books of Account – If assessing officer does not want to accept books of account, he must give some cogent and valid reasons for not accepting - HC
Articles
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2015 (8) TMI 1100
Revision u/s 263 - Assessment Officer has not complied with the directions given by the Tribunal in its judgment & order - ITAT upholding order passed under section 263 by CIT(A) - Held that:- Tribunal had remanded the case to the Assessment Officer for statistical purposes. Therefore, it was mandatory for Assessment Officer to examine the statements furnished by Assessee and to verify it with account books in the light of provisions of Section 11 of Income-tax Act, 1961. It is, therefore, apparent that Assessment Officer has not complied with the directions of the Tribunal contained in its above judgment and order dated 30.1.2009 whereby case had been remanded for statistical purposes. In impugned order the Commissioner has rightly observed that the Assessment Officer did not at all examine or verify the contentions raised, did not examine the books of accounts and did not satisfy himself that the contentions for grant of exemption under section 11 were satisfied. Assessment Officer has failed to discharge his legal obligation to ascertain truth of statement furnished by the Assessee by means of verification with account books. The Commissioner has rightly held that assessment order is erroneous and prejudicial to the interest of revenue. There is no illegality or infirmity in the impugned order passed by the Commissioner in exercise of power conferred by Section 263 of Income-tax Act, 1961. Commissioner has rightly vide impugned order remanded the case to the Assessment Officer to pass a fresh order in accordance with law in terms of remand order dated 30.1.2009, passed by the Tribunal in appeal. - Decided against assessee.
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2015 (8) TMI 1099
Transfer of property - capital gain - scope and legislative intent of Section 2(47)(ii), (v) and (vi) of the Act - what are the essential ingredients for applicability of Section 53A of 1882 Act - meaning to be assigned to the term “possession”? - whether in the facts and circumstances, any taxable capital gains arises from the transaction entered by the assessee? - Held that:- Perusal of the JDA dated 25.2.2007 read with sale deeds dated 2.3.007 and 25.4.2007 in respect of 3.08 acres and 4.62 acres respectively would reveal that the parties had agreed for pro-rata transfer of land. No possession had been given by the transferor to the transferee of the entire land in part performance of JDA dated 25.2.2007 so as to fall within the domain of Section 53A of 1882 Act. The possession delivered, if at all, was as a licencee for the development of the property and not in the capacity of a transferee. Section 53A of 1882 Act, by incorporation, stood embodied in section 2(47)(v) of the Act and all the essential ingredients of Section 53A of 1882 Act were required to be fulfilled. In the absence of registration of JDA dated 25.2.2007 having been executed after 24.9.2001, the agreement does not fall under Section 53A of 1882 Act and consequently Section 2 (47)(v) of the Act does not apply. The issue of exigibility to capital gains tax having been decided in favour of the assessee, the question of exemption under Section 54F of the Act would not survive any longer and has been rendered academic. The Tribunal and the authorities below were not right in holding the assessee-appellant to be liable to capital gains tax in respect of remaining land measuring 13.5 acres for which no consideration had been received and which stood cancelled and incapable of performance at present due to various orders passed by the Supreme Court and the High Court in PILs. Therefore, the appeals are allowed. See C.S.Attwal vs. The Commissioner of Income Tax, Ludhiana and another [2015 (7) TMI 878 - PUNJAB & HARYANA HIGH COURT]
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2015 (8) TMI 1098
Rejection of books of accounts - estimation of income - trading addition - applying GP Rate - CIT(A) reduced the trading addition by adopting GP Rate of 1.75% AY 2008-09 and 1.50% for 2009-10 - Tribunal held that the manner in which the record was maintained, the books of accounts could not have been rejected and accordingly even the trading addition, which was sustained and upheld by the CIT(A), was deleted - Held that:- Tribunal, which is the ultimate final fact finding authority, after analyzing the material again placed before it and having gone into the issue once again has come to the conclusion that merely because qualitative record was not maintained and on this premise, the books of accounts could not have been rejected. It is also an admitted fact that mustard seed is only single commodity used by the assessee for manufacturing of mustard oil and the Tribunal noticed that the assessee filed yield percentage for two months before the AO in which no discrepancy was found by the AO. The Tribunal has found that the production of mustard oil is a continuous process and the seeds are put into the milling for continuous oil production. The Tribunal has further found that 80% of its mustard oil is by way of trading sale and neither discrepancies were noticed by the AO in either purchase or sale nor any sale or purchase, found unrecorded. The Tribunal also found that the books of accounts had been maintained in the same manner as in the past and the assessee cannot be expected to stop the plant as and when the new lot of mustard seed is subjected to crushing as manufacturing of mustard oil is a continuous process. Once the stock register has been held to be properly maintained and has been held to be proper, no trading addition could have been made and rightly so, even otherwise, minor discrepancies cannot result into rejection of books of accounts. THus no substantial question of law can be said to arise out of the order of the Tribunal. - Decided against revenue.
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2015 (8) TMI 1097
Rejection of books of accounts - adopting net profit rate of 8% of the gross turnover - ITAT deleted the addition - Held that:- ITAT has while affirming the decision of the CIT(A), noted that the non-maintenance of stock registers cannot be a ground for rejection as it depends upon the nature of the business. The books of accounts maintained by the Assessee were duly audited and, therefore, the onus is shifted to the Revenue to show that the accounts were incomplete or incorrect. The ITAT has in the impugned order referred to several decisions to emphasise that the estimate of the net profit rate by the AO had to be on the basis of some evidence. The ITAT and the CIT (A) have concurrently held that the AO failed to consider the fact that there was a substantial increase in the contract receipts the net profit shown by the Assessee in the AY in question in comparison with the contract receipts for each of the earlier years. Since the orders of the CIT (A) and the ITAT proceeded on facts and have not been shown to be perverse, the Court is of the view that no substantial question of law arises in relation to the above issue. Unexplained withdrawal made by the Assessee from its current account and the bank cash deposits made in its saving account - CIT(A) partly allowed the Assessee’s appeal - Held that:- The Court finds that the CIT(A) has partly allowed the Assessee’s appeal on this ground and has sustained an addition of ₹ 11,97,790/-. The ITAT has concurred with the above decision. In the circumstances, this Court is not inclined to frame a question of law on this issue as well. - Decided against revenue.
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2015 (8) TMI 1096
Extension of stay beyond the period of 365 days - Power of Tribunal to extend stay - Held that:- If the assessee has not sought adjournment and has not avoided hearing of the appeal in any manner, there can be little or no justification for his interim order being vacated only because 180/365 days have elapsed. Any other interpretation jeopardising the rights of such an assessee would in our opinion be per se arbitrary. It is settled law that the assessee cannot be permitted to suffer for the wrong of the Court/Tribunal nor the taxing authorities can be permitted to take benefit of the wrong committed by the Court/Tribunal. No law can be so unfair as to say that if the Court/Tribunal is at fault, the parties shall suffer. See Commissioner of Central Excise Versus M/s. Barco Electronics Systems Ltd, Shri Manish Gaur Manager Of M/s Barco Electronics Sys Ltd. M/s Raja Udyog Pvt. Ltd., Shri Rakesh Kumar Vohra [2015 (5) TMI 27 - ALLAHABAD HIGH COURT] - Decided against Revenue.
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2015 (8) TMI 1095
Deciding the case ex parte U/s 144 - Held that:- The assessee’s attitude was totally non-cooperative with the department as evident from the number of dates for hearing given by the Assessing Officer. The assessee had never produced the books of account before the Assessing Officer as claimed by him, which has been confirmed by the ld CIT(A). Both the authorities cannot be held irresponsible when assessee’s conduct shows that he had not produced books of account in given time before the Assessing Officer. The assessee’s claimed that he had submitted books of account on 27/12/2010 does not serve any purpose as the case was going to barred by limitation on 30/12/2010 - Decided against assessee. Trading addition - estimation of G. P. - CIT(A) decided the assessee’s appeal by enhancing the addition at ₹ 1,92,538/- by observing that on verification of books of account, it was noticed by him that the turnover of assessee included sale of shares and stock option (derivatives) - Held that:- As per Section 43(5) “Speculative transaction” means a transaction in which a contract for the purchase or sale of any commodity, including stocks and shares, is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrips.Prima facie it is clear that Section 43(5)(d) is for trading in derivatives not trading of shares. The assessee claimed that the assessee has traded these shares through broker and through electronics mode, which comes U/s 43(5)(d) of the Act and shall not be deemed to be an speculative transaction, has wrongly interpreted Section 43(5) of the Act. The assessee has not produced any evidence regarding delivery of shares and transactions note, detail of scrap traded during the year under consideration. Therefore, we do not find any reason to intervene in the order of the ld CIT(A).- Decided against assessee. Addition to sundry creditors - CIT(A) deleted addition - Held that:- As mentioned above, the assessee was non-cooperative with the department even there is no copy of replies filed to show that full name, address and PAN of trade creditors were filed before Assessing Officer. The ld CIT(A) was also wrong to accept the assessee’s claim and held that show cause notice was given by the Assessing Officer itself for trade creditors on 27/12/2010 is against the fact of the case as submitted by the ld DR with reference to paper book submitted by the assessee. We have also perused the above documents, the argument of the ld DR was found correct and the assessee had not submitted complete details of creditors with full address with PAN before the Assessing Officer. Any expenses claimed in the P&L account, burden lies on the assessee, which has not been discharged by the assessee, therefore, in the interest of justice, we set aside this issue to the Assessing Officer. The assessee is directed to cooperate with the Assessing Officer and submit all the required details for his satisfaction to prove the genuineness of the trade creditors as per law. - Decided in favour of assessee for statistical purposes. Addition of unsecured loan - Held that:- The assessee furnished these details on 27/12/2010 hardly three days had remained with the Assessing Officer to complete the assessment proceedings, therefore, there is no lapse on the part of the Assessing Officer to make the addition U/s 68 of the Act, which was confirmed by the ld CIT(A). Even evidence filed before us, does not show that the assessee had filed confirmation as well as PAN number before the Assessing Officer. Even the assessee before the ld CIT(A) has claimed that it has filed the confirmation with PAN number before the Assessing Officer, which was beyond the truth. As discussed above, the assessee’s attitude was non-cooperative but in the interest of justice, this issue be also required to be set aside to the Assessing Officer.- Decided in favour of assessee for statistical purposes. Addition of miscellaneous expenses - Held that:- The ld Assessing Officer issued various questionnaire to the appellant, which was not responded. On 27/12/2010, he appeared before the Assessing Officer. Before that he partly filed the information before the Assessing Officer whatever evidence it referred, does not support the assessee’s case that he had filed the required evidences for claim of expenses, therefore, we in the interest of justice, set aside this issue to the Assessing Officer and assessee is directed to cooperate with the Assessing Officer and submit the required detail to decide the set aside proceedings - Decided in favour of assessee for statistical purposes. Disallowance of salary expenses - CIT(A) deleted addition - Held that:- The assessee has surrendered during the course of survey proceedings at ₹ 21,93,700/- which includes excess cash of ₹ 20,49,000/- and sundry creditors of ₹ 21,44,700/-, which has been credited in the P&L account and thereafter net income was ₹ 21,94,196/- for the year under consideration. Therefore, order of the ld CIT(A) deserved to be confirmed on this issue. - Decided against revenue. Addition to fixed assets - CIT(A) deleted addition - Held that:- The assessee never had furnished any evidence for purchase of assets before the lower authorities. Books of account were also not produced before the Assessing Officer. The ld CIT(A) also decided the issue on the basis of books of account without referring to the purchase bills. Further the assets transferred from proprietorship concern of Shri Lucky Bathla has not been verified from the balance sheet of Shri Lucky Bathla. The ld CIT(A) has accepted the assessee’s argument without allowing the opportunity to the Assessing Officer, therefore, in the interest of justice, this issue is required to be set aside to the Assessing Officer. - Decided in favour of revenue for statistical purposes.
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2015 (8) TMI 1094
Manner in which brought forward business loss and unabsorbed depreciation is to be dealt with under MAT provisions - Held that:- According to the provisions of section 115JB Explanation 1 Clause (iii) while computing book profit, the amount of loss brought forward (before depreciation) or unabsorbed depreciation, whichever is less (as per books of account), shall be reduced from net profit. In the present case, the issue involved is identical. We do not find any infirmity in the order of Commissioner of Income Tax (Appeals) for assessment year 2008-09 in allowing the claim of the assessee in the light of order of Tribunal rendered in the case of Kirloskar Ferrous Industries Ltd. Vs. Addl. CIT (2011 (11) TMI 633 - ITAT PUNE). After perusal of the order of the Tribunal, we also find that Ruling in the case of Rashtriya Ispat Nigam Ltd. (2006 (7) TMI 656 - AUTHORITY FOR ADVANCE RULINGS) was considered by the Co-ordinate Bench. We concur with the findings of the order of Commissioner of Income Tax (Appeals) in assessment year 2008-09 in directing the Assessing Officer to calculate book profits in accordance with the method detailed by the Tribunal in aforesaid case. Accordingly, the appeal of Revenue is dismissed. Disallowance made u/s. 14A r. W. Rule 8D - Held that:- Assessee in its return of income did not make any disallowance with respect to exempt income. The stand of assessee is that no expenditure was incurred for earning tax free income. However, the Assessing Officer made disallowance of ₹ 1,48,820/- without assigning cogent reasons. The burden lies on the Assessing Officer to prove the nexus between the expenditure to be disallowed and non-taxable income. The Assessing Officer cannot simply brush aside the claim of assessee, in respect of disallowance u/s. 14A of the Act. The Assessing Officer has not refuted the claim of assessee that there was direct credit of dividend through ECS and no interest bearing funds were utilized for making investment. A perusal of assessment order shows that the Assessing Officer has mechanically applied the provisions of Rule 8D without giving reasons for rejecting the assertions for making no disallowance by the assessee. Thus the disallowance made u/s. 14A r. W. Rule 8D is deleted. - Decided in favour of assessee. MAT provisions - Whether the profits of Bangalore and Pune units that have been merged with the assessee company are to consider for the purpose of computation of book profits u/s. 115JB? - Held that:- As per Clause 31 the scheme is to be effective on complying with two conditions, i. E. (i) Sanction of scheme by BIFR and (ii) Filing of certified copy of order of BIFR with Registrar of Companies (ROC), Kanpur and Mumbai. The assessee has placed on record a copy of challan/receipt to show that the BIFR order was filed with ROC on 07-11-2008. Thus, from the analysis of the above it is evident that both the conditions as set out in Scheme of Arrangement were complied on 07-11-2008, therefore, scheme of arrangement was to be implemented w. E. F. 07-11-2008. Therefore, by no stretch of imagination the profits of amalgamating units could have been included in financial year ending on 31-03-2008. Thus the authorities below have erred in including profits of Bangalore and Pune units while computing book profits u/s. 115JB for the period relevant to assessment year 2008-09. Accordingly, we accept the second ground of appeal of the assessee. - Decided in favour of assessee.
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2015 (8) TMI 1093
Computation of capital gain - CIT(A) accepting the assessee’s plea that the plot in question was purchased in the year 1980 by making part payment and taking possession and consequently adopting the fair market value of the property as on 1-04-1981 and allowing indexed cost of acquisition at ₹ 31,19,050/- - Held that:- As find from the records that the assessee has not produced the original sale agreements entered between the parties before the AO. The assessee has also not disclosed the capital gains in the return as well as in revised return. The AO got information through AIR that it was an immovable property sold by the assessee and on that basis, the AO asked the assessee to give particulars of property sold and capital gains earned on it. The assessee submitted partial evidences before the AO and claimed the capital gains in case of these immovable property transactions showing income at nil. However, the AO was not supposed to entertain the assessee's claim by relying on decision of Hon'ble Apex Court in the case of Goetze India Ltd. vs. CIT (2006 (3) TMI 75 - SUPREME Court). The ld. CIT(A) has coterminous power and whatever additional evidences submitted by the assessee before him had not been adjudicated proper perspective and in legal framework as no application for filing of additional evidence had been referred by him and no finding had been given by the ld. CIT(A) that these evidences are required to decide the basic cause of the assessee. Therefore, in the interest of justice, we set aside the issue to the file of the AO to decide it de novo by providing reasonable opportunity of being heard to the assessee. - Decided in favour of revenue for statistical purposes.
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2015 (8) TMI 1092
Replacement of carding & roving machines and ring frames expenditure - revenue expenditure deductible under section 37 or Current repairs deductible under section 31 - Held that:- Following the decision of the Hon’ble Supreme Court in the case of CIT v. Srif Mangayarkarasi Spinning Mills (P) Ltd. (2009 (7) TMI 17 - SUPREME COURT) were in held that though accounting practices may not be the best guide in determining the nature of expenditure, in this case they are indicative of what the assessee itself thought of the expenditure it made on replacement of machinery and that the claim for deduction under the Act was made merely to diminish the tax burden, and not under the belief that it was actually revenue expenditure – Order of AO restored by holding that the expenditure is capital in nature. We hold that replacement of machinery in textile mills is capital expenditure and not allowable as deduction under section 37 of the I. T. Act. Also see M/s.Rajnarayan Textiles Ltd. Vs. ACIT [2015 (8) TMI 1064 - ITAT CHENNAI] - Decided against assessee.
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2015 (8) TMI 1091
Estimation of net profit - assessee did not produce the complete books of account and he filed an affidavit that there was a dispute with the accountant and he was not given the books of account. - Held that:- On verification of asset disclosed by the assessee, he has only Jeap. It appears that this computer owned by the somebody else, therefore, the claim of assessee that accountant had taken books of account appears to be false. Accordingly, we confirm the net profit @ 9% subject to third party interest and depreciation. The Assessing Officer is directed to verify this aspect from the past record whether the assessee’s net profit was assessed subject to interest and depreciation if otherwise found by the Assessing Officer no interest and depreciation will be allowable on the net profit decided by the Bench @ 9%. Accordingly, we confirm the order of the ld CIT(A). - Decided against revenue. Unaccounted cash deposited in the bank account - undisclosed income of the assessee - Held that:- On verification of the balance sheet of the assessee, it is found that bank account in SBBJ, Gangapur City, SBBJ, Sawai Madhopur and FDR with PNB, Gangapur City has been disclosed by the assessee. The ld CIT(A) has considered these bank accounts and no adverse inference has been drawn by him except the addition of ₹ 9,026/-. This Bench has confirmed the addition @ 9% C.P., therefore, no addition is required to be made on account of any discrepancy in the bank account. As held in the case of CIT Vs. G. K. Contractor (2009 (1) TMI 840 - RAJASTHAN HIGH COURT) wherein held that when net profit is estimated by the Assessing Officer by rejecting the book result U/s 145(3) of the Act, no separate addition can be made on account of cash creditor, which is squarely applicable in the case of the assessee. As we have already decided the net profit @ 9% in the case of assessee, therefore, other additions cannot be made. - Decided against revenue. FDR interest treated as income from other sources - Held that:- Undisputed fact revealed from the order of the ld CIT(A) and form No. 35 that this ground has not been raised before the ld CIT(A). Further before us, no application for additional ground has been made by the AR of the assessee. Therefore, this ground is not maintainable and we accordingly dismiss the same. - Decided against assessee.
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2015 (8) TMI 1090
Penalty under section 271(1)(c) - Held that:- What is really required to be seen by the authorities below was there was an explanation offered by the assessee which could be acceptable to a fact finding body and whether such an explanation could be said to be a bonafide explanation. We find that the explanation of the assessee is supported by the decisions of the Tribunal in Thermoflic's case (1996 (9) TMI 182 - ITAT JABALPUR) and Moped and Machine's case (2005 (8) TMI 49 - MADHYA PRADESH High Court). The fact that the assessee did not pursue the matter against this quantum addition, on merits, cannot be put against the assessee in the penalty proceedings, but then that is precisely what the authorities below have ended up doing. Quite to the contrary, the fact that the assessee has not prolonged this issue reaching finality by not challenging, before the appellate forums, the additions made by the Assessing Officer. Such a conduct should not deincentivized. We disapprove this approach in the penalty proceedings. In any case, so far as the penalty proceedings are concerned, all that is to be seen is whether explanation of the assessee is a reasonable explanation or not. In our considered view, for the detailed reasons set out the explanation of the assessee so far as non taxability of capital gains, even if that be so, on dissolution of partnership firm was a reasonable explanation which ought to have been accepted. As regards the disallowance of vehicle repairs, miscellaneous, printing and stationery expenses.for want of complete supporting evidence, such a disallowance cannot be reason enough to impose concealment penalty under section 271(1)(c). Not only that the assessee has an explanation for this claim but the explanation has been substantially accepted inasmuch as the disallowance is only for a small portion of the expenses. In view of this fact, as also bearing in mind entirety of the case, it was not a fit case for imposition of penalty on this count either. Thus it is a fit case for deletion for the impugned penalty - Decided in favour of assessee.
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2015 (8) TMI 1089
Validity of proceedings initiated under section 158BD - addition on undisclosed income of the assessee - CIT(A) deleted addition - Held that:- Admittedly, in this case the AO of the searched person had not recorded any satisfaction about any undisclosed income of the assessee which had escaped assessment. The AO of the searched person had simply forwarded the documents to the AO of the assessee for examination. The AO, in the assessment order, has reproduced the satisfaction note which relates to the alleged satisfaction recorded by the AO of the assessee and not by the AO of the searched person and hence the notice issued under section 158BD did not fulfill the requirement of said section and hence is liable to be treated as bad in law and consequently the assessment proceedings under section 158BD are thus liable to be held as null and void. Neither the name of the assessee has been mentioned on the said document nor the description of the flat in question has been mentioned on the said document. The said document was a dumb document. Even the concerned person, from whom the said document was recovered, had stated that he was not aware of the correctness of the contents of the document. Merely based on the said loose paper, the addition in the case of the assessee without any corroborative evidence in this respect was not warranted and no evidentiary value can be attached to such a document in the absence of any circumstantial or corroborative evidence. We, therefore, do not find any infirmity in the well reasoned order of the Ld. CIT(A) in this respect - Decided against revenue.
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2015 (8) TMI 1088
Disallowance under section 40A(2)(b) - According to AO salary paid to Shri Amandeep Kumar was excessive as was only 10th pass and not technically qualified - Held that:- Both the sons of the assessee are doing same job for the assessee and merely because Shri Amandeep Kumar was not technically qualified would not give occasion for the Assessing Officer to disallow the salary substantially. It is not in dispute that the total receipts of the assessee were substantially higher in assessment year under appeal as compared to the preceding year and it is also not in dispute that the salary/wages paid was comparably lower in percentage as was paid in the earlier years. These facts would clearly support the case of the assessee that both the sons of the assessee have been working whole heartedly for the business of the assessee and through their efforts total receipts of the assessee have increased. Therefore, the Assessing Officer has failed to make out a case of any unreasonable payment to the sons of the assessee. However, considering the fact that Shri Amandeep Kumar was not qualified as against the qualification of other son Shri Daniel, it would be reasonable and appropriate to restrict the salary paid to Shri Amandeep Kumar slightly lesser as was given to Shri Daniel because both of them were doing the same job for the assessee. Thus it would be appropriate to allow salary paid to Shri Amandeep Kumar in a sum of ₹ 1,50,000 as against the payment of salary of ₹ 2,25,000, thereby the addition is restricted to ₹ 75,000 only. - Decided in favour of assessee in part. Disallowance of depreciation on crane - Held that:- If the Assessing Officer was having any doubt in his mind regarding the purchase of the crane by the assessee from M/s. Indo Construction, the Assessing Officer should have verified any fact from the seller. The Assessing Officer has failed to note that all the transactions have been done through banking channel and as such, it is unbelievable that the assessee has not purchased the crane in question. The authorities below have also failed to note that after purchase of the crane in question in assessment year under appeal, the total receipts of the assessee from crane business have substantially increased. Therefore, without purchase of the crane in question the receipts of the assessee would not have substantially increased. The Assessing Officer has not doubted the payments by means of account payee cheques and all transactions carried out through banking channels. Therefore, there was no material available with the Assessing Officer to doubt the purchase of crane by the assessee. Thus the assessee has been able to prove that the crane in question was purchased in the year under consideration and was used for the purpose of business. Therefore, the depreciation was allowable. Considering the above discussion, the orders of the authorities below are set aside and the addition is deleted. The Assessing Officer is directed to grant depreciation to the assessee as is claimed. - Decided in favour of assessee.
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2015 (8) TMI 1087
Valuation of agricultural land and commercial land - book value v/s market value - CIT (Appeals) held that the AO had wrongly applied the circle rate of commercial land without evidence in valuing the value of land at ₹ 20,82,712 and that the circle rate for agriculture land was to be taken, ignoring the fact that the land was being used for commercial purposes and that circle rate of ₹ 900 per sq.yd. which is applicable to commercial buildings was to be taken for valuation of land.Held that:- Commissioner of Income-tax (Appeals) has correctly decided the issue because he has correctly noted that 6 per cent. stamp duty was applicable to agricultural land and commercial land and he has also noted the facts that circle rate was ₹ 12 lakhs per acre which would come to ₹ 244 per sq.yd. and therefore, the value of the land would have been ₹ 5,64,616 which is less than the book value whereas the land and building has been transferred at a consideration of ₹ 25 lakhs in September, 2008. The learned Commissioner of Income-tax (Appeals) has given logic why the valuation adopted by the Assessing Officer for valuing the building at ₹ 30 lakhs is not correct because buildings would generally depreciate over a period of time. He has also rightly observed that if depreciation at 25 per cent. was granted, then the value of the machinery would be ₹ 41,13,281 which is less than the value for which the machinery has been transferred. Further perusal of the assessment order clearly shows that the Assessing Officer has substituted his valuation without referring the matter to the Valuation Officer or bringing any material on record to show that the assessee has received any consideration in excess of the amount shown in the sale deed which is not permissible under the law. - Decided against revenue.
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2015 (8) TMI 1086
Disallowance under the head foreign travelling expenses - Held that:- The assessee had furnished the details about the encashment/ surrender of foreign exchange before both the lower authorities. The Assessing Officer or the first appellate authority had not doubted the foreign tours undertaken by the employees of the assessee-company. After considering the material on record and the judgment of Krishnonics Ltd. [2007 (12) TMI 406 - ITAT AHMEDABAD] we are of the opinion that the addition upheld by the first appellate authority was not based on facts available on the record. The assessee had filed all the details before the Assessing Officer. - Decided in favour of assessee. Disallowance of diminution in value of inventories of work-in-progress - Held that:- There was no change in the method of valuing the stock and therefore the assessee was not required to report the change in the return about valuing the stock. It is a fact that because of the recession, the assessee could not export the goods or sell the goods in the local market. Considering the peculiar circumstances it revalued the inventory. In our opinion the Assessing Officer/first appellate authority should have made further enquires in this regard. We find that in the case of Alfa Laval India Ltd. v. Deputy CIT [2003 (9) TMI 43 - BOMBAY High Court ] had held that in the subsequent assessment year the goods in question were sold at the lesser price than shown in the closing stock. We find that the Assessing Officer had not carried out any exercise in this regard. In our opinion, in the interest of justice, the matter should be restored back to the file of the Assessing Officer for fresh adjudication. - Decided in favour of assessee for statistical purposes. Disallowance made under section 14A - FAA deleted addition - Held that:- Assessing Officer had invoked the provisions of section 14A of the Act without understanding the real nature of the transactions. The assessee had not shown any income under the head exempt income under Chapter III of the Act for which it had claimed incurring of expenditure. Until and unless both these conditions are fulfilled provisions of section 14A cannot and should not be invoked. The first appellate authority had given a categorical finding of fact in this regard. Secondly, the Assessing Officer has not found any evidence that the interest expenses incurred by the assessee were not for wholly and exclusively for the business of the assessee. Order of the first appellate authority on both the counts-deletion of section 14A disallowance and allowing the interest expenditure under section 37 has to be upheld - Decided in favour of assessee Addition under the head cessation of liability, under section 41 - FAA deleted addition - Held that:- As per the taxation jurisprudence the very first condition for invoking section 41(1) of the Act is that an allowance or deduction ought to have been made in the assessment for any year in respect of any loss, expenditure or trading liability incurred by the assessee. The Assessing Officer has not discussed as to when the deduction was allowed. On the contrary the records reveal that no allowance or deduction had been made in the assessment of the assessee in any earlier year. Consequently, there was no question of invoking section 41(1). So, in our opinion the order of the first appellate authority does not suffer from any legal infirmity. - Decided in favour of assessee
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2015 (8) TMI 1085
Eligibility for deduction u/s.80P(2)(a)(i) - interest earned on deposit kept with schedule banks - assessee (cooperative society) engaged in the activity of providing credit facilities to its member - Held that:- Since in the instant case, two divergent decisions were cited before us and no decision of the Hon ble jurisdictional High Court is available, therefore, following the decision of the Hon ble Supreme Court in the case of CIT Vs. Vegetable products reported in [1973 (1) TMI 1 - SUPREME Court] we hold that the view in favour of the assessee, i.e. the decision of the in the case of Tumkur Merchants Souhards Credit Cooperative Ltd. [2015 (2) TMI 995 - KARNATAKA HIGH COURT ] has to be followed. Accordingly, we hold that the interest income earned by the assessee on short term deposits kept with banks has to be allowed as deduction u/s.80P(2)(a)(i) of the I.T. Act. Decision Mantola Cooperative Thrift Credit Society Ltd. Vs. CIT [2014 (9) TMI 833 - DELHI HIGH COURT] rejected - Decided in favour of assessee.
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2015 (8) TMI 1084
Addition on account of sale outside books at ₹ 20,91,360/- - Held that:- Find force in the contention of assessee that exhibit-138 and 139 have to be read together and the entries in exhibit 138 has to be considered while considering the entries in exhibit-139. That being so, set off of 687898.99 mtrs has to be given in 909289.17 mtrs., resulting into shortage of 221390.18, at the most this has to be considered as sold outside the books. Further, a perusal of the comparative chart show that the average profit of 5 years comes to 14.90% therefore the adoption of 20% appears to be on the higher side. Thus we hold that shortage of 221390.18 at the most can be considered as sold outside the books. The AO is directed to recompute the profit on sale of this stock @ 14.90%. - Decided partly in favour of assessee. Addition u/s. 69C - Held that:- While adjudicating ground No. 3 below as referred to the relevant portion of the statement recorded at the time of survey and we have mentioned the answer to question No. 34 wherein the Managing Director has specifically said that the cash sales have been utilized for making the labour payment and therefore the cash generated out of the sale of scrap can be accepted as utilized for making the payment of ₹ 9,77,200/- and therefore no separate addition is called for. We, accordingly direct the AO to delete the addition of ₹ 9,77,200/- which is treated as unexplained expenditure u/s. 69C - Decided in favour of assessee. Addition on account of sale of fents, bhangars and chindies - Held that:- If the statement made by the Managing Director at the time of survey is considered in the light of the business activities of the assessee, it can be safely concluded that the assessee has been making sales outside the books in respect of the scrap generated during the course of its business activities. Therefore, the income offered by the assessee in its revised return of income can be accepted as having included in the cash sales generated out of the scrap. Therefore, in our considered opinion and understanding of the facts of the case in hand, the addition of ₹ 29,09,456/- is unjustified as the same is already offered in the revised return of income by the assessee. We, therefore, set aside the findings of the Ld. CIT(A) and direct the AO to delete the addition - Decided in favour of assessee. Disallowance of claim for deduction u/s. 80HHC - Held that:- Since we have deleted the addition made u/s. 69C at ₹ 9,77,200/- and have also deleted the addition of ₹ 29,09,456/-, there is no question of any computation of deduction u/s. 80HHC of the Act, only the addition on account of alleged sale of stock have been modified by us. The AO is directed to decide this issue after giving appeal effect to our order and after giving a reasonable opportunity of being heard to the assessee.- Decided partly in favour of assessee for statistical purpose.
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2015 (8) TMI 1083
Grant of approval u/s.80G denied - objects as well as activities are predominantly religious and since the religious expenses in all the 3 years in respect of which statement of accounts have been submitted exceeded 5% of the total income/receipts which is violative of the provisions of sub-section (5B) of section 80G - Held that:- In the instant case the objects of the trust are not entirely religious and since some of the objects are charitable in nature, a finding given by the Ld. CIT himself and since the temple is open to everybody irrespective of caste, creed, sect, colour etc. and since there is no restriction of entry of any particular community and since it has been held that if the Honorarium paid to the Brahmins of the assessee trust is excluded, then there is no violation of the provisions of sub-section 5B of section 80G, therefore, we are of the considered opinion that the assessee trust in the instant case should not be denied the benefit of grant of approval u/s.80G of the I. T. Act. We accordingly set aside the order of the CIT and direct him to grant approval u/s.80G of the I. T. Act. - Decided in favour of assessee.
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2015 (8) TMI 1082
Addition on account of difference in arm’s length price (ALP) of international transaction - CIT(A) deleted the addition - Held that:- CIT(Appeals) has rightly followed the decision of Mumbai Bench of the ITAT in the case of Dresses Rand India (Pvt.) Ltd. (2011 (9) TMI 261 - ITAT MUMBAI) holding that while evaluating the arm’s length price of a service, it is wholly irrelevant as to whether the assessee benefits from it or not; the real question which is to be determined in such cases is whether the price of this service is what an independent enterprise would have paid for the same. Under these circumstances, we are of the view that the Learned CIT(Appeals) has keeping in mind the preponderance of the probability to run the business of assessee has rightly accepted the claimed expenditure on the nature of the services required to run the business of the assessee with the direction to the Assessing Officer to allow the same. The Hon’ble jurisdictional High Court of Delhi in the case of Hive Communication Pvt. Ltd. (2011 (7) TMI 82 - DELHI HIGH COURT) followed by the Delhi Benches of the ITAT in the case of Ericson India Pvt. Ltd. (2012 (11) TMI 1 - ITAT, DELHI) has held that the legitimate business needs of the company must be judged from the view point of the company itself and must be viewed from the point of a prudent businessman. It was held that the it is not for the Assessing Officer to dictate what the business needs of the company could be. It is the businessman who can only judge the legitimacy of the business need of the company from the point of a view of a prudent businessman. The term “benefit” to a company in relation to its business has a very wide connotation. It was further held that it is not feasible to evaluate the price of each service in financial term in isolated and stand alone manner for each such service or part of the service and hence TNMM at entity is acceptable. The First Appellate Order on the issue is well supported by the decisions cited by the Learned AR and hence we are not inclined to interfere therewith. - Decided against revenue.
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2015 (8) TMI 1081
Registration under Section 12A - diversion of income by overriding title - CIT(A) dis-allowed claim - Held that:- There were no restrictions whatsoever on the use of the grant by the assessee. It cannot therefore be said that there was diversion of income by overriding title. Whatever the assessee does out of the grant and the interest accrued on the grant can only be said to be application of income and it cannot be said that there was diversion of income by overriding title. Taking note of the above factual position for the A.Y. 2009-10, the plea of the assessee that there was diversion of income by overriding title cannot be accepted. Accordingly, the order of the CIT(Appeals) is confirmed. Wwhatever the assessee does out of the grant and interest accrued can only be said to be application of income for the stated objects and activity of the assessee society and therefore reject the assessee's plea that there was diversion of income by overriding title. - Decided against assessee.
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2015 (8) TMI 1080
Addition u/s 69B on the basis of the report of the Departmental Valuation Officer (DVO) - CIT(A) deleted addition - Held that:- Section 69B, which is again a deeming provision, governs the cases in which investment made by the assessee is not fully disclosed. In other words, section 69B applies to the purchaser of an asset, in contradistinction to sec. 50C, which applies to the seller of an asset. A conjoint reading of sections 50C and 56(2)(vii) makes it vivid that whereas ‘stamp value’ has been substituted with the ‘full value of consideration’ in case the later is less than the former in the hands of the seller by virtue of section 50C, the substitution of the ‘stamp value’ with the ‘actual purchase price, in excess of ₹ 50,000/-’ has been made effective in the hands of the buyer only where any immovable property is purchased after 1.10.2009. As the assessee before us is a buyer, naturally, his case will not be covered u/s 50C but will be governed by section 56(2)(vii). Since section 56(2)(vii) is applicable on cases in which the individual or HUF receives immovable property on or after 1.10.2009 and we are dealing with a case in which the property has been purchased by the assessee in the financial year 2007-08, the mandate of section 56(2)(vii) cannot apply retrospectively. Once this provision is not applicable, the ratio decidendi in the case of K.P. Varghese (1981 (9) TMI 1 - SUPREME Court ) and Shivakami Co. P. Ltd. (1986 (3) TMI 2 - SUPREME Court ) would apply leaving no scope for making addition in the circumstances as are prevailing in the instant case. We, therefore, uphold the view taken by the ld. CIT(A) on this issue. - Decided in favour of assessee.
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2015 (8) TMI 1079
Disallowance u/s.40(a)(ia)- payment towards commission on which the assessee failed to comply with the provisions of Sec.194H - CIT(A) deleted disallowance - Held that:- As can be seen from the facts on record, the assessee has executed the work as a sub-contractor to the main contractor M/s.G.Venkata Reddy and Co., who was awarded the work by the principal. Main contractor has handed over the work to the assessee on back to back basis and payments towards execution of work was received by the main contractor from the Government directly and after retaining his margin of 4% the balance amount is remitted to the assessee. Therefore, the 4% margin retained by the main contractor cannot be said to be in the nature of commission but the margin/profit retained by the main contractor for having subcontracted work to the assessee. It is also established on record that the assessee never makes any payment to the main contractor. On the contrary, the main contractor makes the payment to the assessee after receiving the payments from the Government. Therefore, as there is no payment by the assessee to the main contractor, only because the assessee has debited the amount to its P&L A/c, it cannot be inferred that commission to that extent was paid by the assessee to the main contractor thereby attracting the provisions of section 194H. In the aforesaid facts and circumstances, we are of the view that Ld. CIT(Appeals) was justified in deleting the addition made by the Assessing Officer - Decided in favour of assessee.
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2015 (8) TMI 1078
Addition on account of deemed dividend u/s 2(22)(e) - assessment framed u/s. 143(3) r.w.s. 153A - CIT(A) deleted addition - Held that:- It is an undisputed fact that Smt. Maya Dokania holds 18.33% of share holding in Newton Construction Pvt. Ltd. and 42.12% share holding in Assessee company. Assessee is not a share holder in Newton Construction Pvt. Ltd. from whom it has received amount. We find that the Hon'ble Special Bench in the case of ACIT vs. Bhaumik Color Pvt. Ltd. (2008 (11) TMI 273 - ITAT BOMBAY-E) has held that deemed dividend can be assessed only in the hands of a person who is a shareholder of the lender company and not in the hands of borrowing concern in which such share holder is a member or a partner having substantial interest. Further in the case of CIT vs. Ankitech Pvt. Ltd. (2011 (5) TMI 325 - DELHI HIGH COURT) held that a concern which is given loan or advance by a company cannot be treated as shareholder/member of the company who has advanced loan simply because a shareholder of the lender company holding power of 10% or more therein has substantial interest in such concern as such loan or advance cannot be treated as deemed dividend u/s. 2(22)(e) of the Act. Considering the facts of the present case in the light of aforesaid decisions we are of the view that in the present case no addition on account of deemed dividend u/s. 2(22)(e) can be made. Further, before us, Revenue has not brought any contrary binding decision in its support nor could controvert the findings of ld. CIT(A). In view of the aforesaid facts, we find no reason to interfere with the order of ld. CIT(A). - Decided against revenue.
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2015 (8) TMI 1077
Disallowance u/s 14A r.w.r. 8D - CIT(A) deleted disallowance - Held that:- AO without recording his satisfaction that the claim of expenditure in relation to tax free income has not been correctly made by the assessee as envisaged under section 14A(2) has invoked Rule 8D.While rejecting the claim of the assessee with regard to the expenditure or no expenditure, as the case may be, in relation to exempt income, the AO would have to indicate cogent reasons for the same. It is, therefore, clear that determination of the amount of expenditure in relation to exempt income under Rule 8D would only come into play when the AO rejects the claim of the assessee in this regard. (Maxopp Investment Ltd. v. CIT (2011 (11) TMI 267 - Delhi High Court ). The ld CIT(A) has rightly observed that the AO did not find any deficiency in the books of account nor any deficiency in respect of the claim of the assessee u/s 14A of the Act. We also find that the AO has not expressed satisfaction with the assessee's claim u/s 14A was incorrect and which is a sine quo none before invoking provisions of section 14A of the Act. We do not find any infirmity whatsoever in the reasoned order passed by the ld CIT(A) and therefore we are inclined to confirm the order of the ld CIT(A) - Decided in favour of assessee.
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2015 (8) TMI 1076
Addition U/s 40A(3) - book entries in respect of incentives. AO was of the view that they amounted to cash payments CIT(A) deleted the addition - Held that:- Merely because some book entries are routed through the assessee’s cash book the learned Assessing Officer cannot ignore the real nature of the transactions and arbitrarily hold them as cash payments. They are neither cash payments nor claimed as expenditure by the assessee to be held as violation of Section 40A(3) of the Act. See Attar Singh Gurmukh Singh Vs. ITO and Sutlez cotton Mills Ltd. vs CIT (1991 (8) TMI 5 - SUPREME Court ) The fact that these were book entries based on credit and debit notes have not been disputed. Similarly, the amounts transacted were not claimed as expenditure and represented only quantified amounts of incentives provided as per sales and distribution policy of the GPI, they cannot be held as cash payments by any stretch of imagination. These glaring facts could not be controverted by the learned Sr.D.R. In view of the foregoing, we find no infirmity in the order of the learned CIT(A), which are based on proper appreciation of facts and law and are upheld. - Decided against revenue.
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Customs
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2015 (8) TMI 1120
Invocation of extended period of limitation – Tribunal dismissed application filed by assesse for rectification of mistake in final order and allowed appeals filed by Department – Admittedly application was dismissed on merits as well as on limitation – Held that:- Tribunal simply referred to judgment in case of Jacsons Thevara Vs. Collection of Customs & Central Excise [1991 (2) TMI 140 - SUPREME COURT OF INDIA] and stated that since in said judgment had held that extended period of limitation was applicable, only on that basis contention of assessee is repelled and order of Commissioner reversed – Tribunal has not at all discussed as to how finding of Commissioner is erroneous on facts – When machinery was shifted it was bona fide action of assessee and there was mis-statement in this behalf – Therefore, Commissioner was right in his conclusion that extended period of limitation could not be invoked – On this ground alone, appeals filed by appellants are to succeed – Thus, impugned order set aside – Decided in favour of assesse.
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2015 (8) TMI 1119
Goods mis-declared to avoid duty – import of electronic components/parts - Commissioner in his order, which proved that what was, in fact, imported was complete sets of audio systems in dis-assembled conditions with a view to evade custom duties. - Tribunal decided the issue in favor of assessee – Held that:- Very material aspect which is glossed over by Tribunal is that technicians who had inspected goods were able to assemble systems from parts imported by respondent and make it functional – Material produced by Department clearly proves that inadequate and wrong descriptions were given in import documents which gave right to Revenue to correctly assess goods – Transaction value, as disclosed by importers, was doubtful and was rightly rejected by adjudicating authority – Tribunal committed grave error in ignoring these facts – Therefore order of tribunal set aside, while restoring order of Commissioner – Decided in favour of Revenue.
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2015 (8) TMI 1118
Principle of Res-Judicata - While dismissing appeal of Revenue in first ground of litigation, no doubt Supreme court had left question of law open - However, that could not be ground to reopen case of Revenue - Therefore, Supreme court of opinion that Tribunal rightly applied principles of res judicata - Appeal accordingly, dismissed.
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2015 (8) TMI 1117
Non-Compliance of condition under which search shall be conducted – Appeal against Conviction – Appellant was convicted for offence punishable under Section 20(b) of NDPS Act, 1985 and sentenced to undergo rigorous imprisonment and to pay fine – Informer apprised police party that appellant was selling charas at that time also and if raid is conducted, charas can be recovered from him – After completion of required formalities appellant was charge-sheeted to which he pleaded not guilty and claimed trial – Whether provision of NDPS act was complied with – Held that:- Discrepancies about time when secret information was received and when accused was apprehended are not material discrepancies affecting reliance of prosecution – Officer who has seized article, arrested accused and lodged report, can be said to be 'complainant' only in technical sense – Admittedly recovery was effected from appellant at public place near watercourse at public place, therefore contention of non-compliance of Section 42, rejected – Perusal of notice given under Section 50 reveals that notice is short of compliance, which require to apprise suspect of his right to get his search conducted before Magistrate – Mere fact that gazetted officer, who was called at spot to conduct search also happened to be Executive Magistrate, in no manner, fulfill lacuna left by Investigating Officer – Having failed to comply with provisions of Section 50, in its true spirit, recovery made from appellant was illicit and vitiate his conviction – Therefore, Judgment of conviction and order of sentence recorded by trial Court set aside – Decided in favour of Appellant.
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2015 (8) TMI 1115
Refund of amount against gold which was disposed off after seizure - Payment of Sum equivalent to Goods disposed – illegal import of gold - Tribunal directed release of gold of amount subject to payment of redemption fine, penalty and Customs Duty, said amount was deposited by Assesse – Admittedly revenue had disposed goods, therefore vide impugned order was directed to pay sum equal to goods – Held that:- evident that when goods were imported there were two claimants, out of which, by Tribunal’s order one party was directed to release goods upon payment of redemption fine, penalty and Customs Duty – In said circumstances assesse was bound to succeed because that led to anomalous situation of inconsistent orders in same matter – Admittedly Department choose to dispose of gold on 3-2-2006 – In said circumstances, direction that revenue should pay price of gold was fair and reasonable – Appellant/Revenue directed to pay sum with interest – Decided against revenue.
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2015 (8) TMI 1114
Valuation of goods - Enhancement in CIF value of imported goods - Held that:- At the time of adjudication by the primary adjudicating authority, the appellant-assessee had waived the Show Cause Notice. Waiver of Show Cause Notice obviously means that the assessee had willingly given up its right for full observance of the principles of natural Justice. Further, we find that three dates were fixed by the Commissioner (Appeals) for personal hearing but the appellant did not appear for personal hearing before Commissioner (Appeals). Even so, we find that the impugned Order-in-Appeal has discussed the basis of enhancement of value in accordance with the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 as also the basis for holding the imported goods to be in the restricted category. It is also seen that the redemption fine was imposed in accordance with the market price obtained as a result of market inquiry . The Commissioner (Appeals) has also found that the appellant was a repeat offender and had imported the impugned goods in violation of the import and export policy and also indulged in under-valuation and therefore enhanced the penalty. In these circumstances, we find no infirmity in the impugned order warranting appellate intervention. - Decided against assessee.
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2015 (8) TMI 1113
Classification of goods - benefit of project import - Held that:- appellant had not produced the Release Advice from the Custom House where the project was registered and therefore the assessing officer had no basis to classify the impugned goods under CTH 98.01 and so assessed the goods on merit. The Commissioner (Appeals) is thus totally justified in holding that the assessment was correctly done. The judgement in the case of Power Build Ltd. Vs. CCE, Mumbai (2003 (5) TMI 306 - CESTAT, MUMBAI) is cited by the appellant to press the point that issuance of Release Advice is only a procedural requirement. We find that even in that judgement the Hon’ble CESTAT has clearly held that Release Advice is indication to the Customs House about availability of the entitlement to import in a particular license issued by the Custom House where licence is registered. Thus in the absence of any such indication, the assessing officer at the Customs House where goods were imported had no basis to grant the benefit of project import in respect of the said Bills of Entry. The judgement of Supreme Court in the case of Tullow India Operations Ltd. (2005 (10) TMI 502 - SUPREME COURT OF INDIA) has clearly stated that “it depends on the facts of each case” and thus did not lay down any general principle/ratio. - Decided against assessee.
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FEMA
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2015 (8) TMI 1112
Money laundering - res judicata in the criminal complaint - Attachment of property - appellant admitted that property is not owned by her but by the company - Held that:- The action of attachment is not in relation to a person as such but essentially to freeze the proceeds of the crime. The fact that the respondents could have acted only if there was reason to believe that a person is in possession of proceeds of crime does not mean that the authorities at this stage are obliged to prove the fact beyond reasonable doubt that the property in possession in fact was proceeds of crime. All that the authority is required to show is that there was “substantially probable cause” to form an opinion that the property under attachment is proceeds of crime. Perusal of Chapter III of PMLA also reveals that the orders passed under it are interlocutory in nature and such order do not decide finally whether an offence has been committed by an accused under Section 3 of the Act for Money Laundering nor such orders passed under said chapter decide what punishment is to be imposed on such accused for money laundering. Any observation made while passing orders under said chapter are not the findings for the purpose of alleged offense committed under Section 3 nor observations are the findings in the Criminal matters pending against such accused. It is also well settled that the principle of res judicata does not apply to interlocutory orders like order of stay, injunction or appointment of receiver which are designed to preserve the status quo pending litigation to ensure that the parties may not be prejudiced but the normal delay which the proceedings before the Court usually take. On the basis of the observation made in the impugned order, the appellant cannot be convicted and sentenced in the criminal cases. - Appeal disposed of.
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2015 (8) TMI 1105
Contravention of Section 18 (2) of the Foreign Exchange Regulation Act, 1973 - non-realization of export proceeds - Held that:- Although Section 68 FERA is in the nature of a deeming provision, the proviso thereto contemplates rebuttal of such presumption by a person who is able to show that the contravention took place without his or her knowledge. - memorandum is a cyclostyled form and the averments as regards all the directors is identical. There is no specific mention of the precise role of the Appellant in managing the day-to-day affairs of the company. The case of the Appellant is different from that of Mr. Dinkar Dogra. Prior to Mr. L.R. Sridhar taking over the management of the company, Mr. Dinkar Dogra was the managing director. The order dated 4th June 2008 passed by this Court dismissing Mr. Dinkar Dogra's Criminal Appeal [2008 (6) TMI 579 - DELHI HIGH COURT] discusses in detail the evidence showing Mr. Dogra to be incharge of the day-to-day affairs of the company. There is no evidence to show in what manner the present Appellant, Mrs. Kavita Dogra was responsible to the company for the conduct of its business. As already noticed, neither the adjudication order nor the impugned order of the AT discusses the facts peculiar to the Appellant. - Court is, therefore, satisfied that the DoE failed to make out a case of contravention of Section 18 (2) FERA as far as the Appellant was concerned. Neither the adjudication order nor the order of the AT in her case are sustainable in law. - Decided in favour of appellant.
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Service Tax
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2015 (8) TMI 1138
Demand of service tax - Manpower Recruitment or Supply Agency service - placement charges are collected from students and not from an employer or a prospective employer - Held that:- From the definition and the enumeration of this activity as a taxable service, it is clear that what is taxable is the rendition of any service towards recruitment or supply or manpower, temporarily or otherwise to a client. The recipient of this service is a client who receives services in the nature of recruitment of supply of manpower, temporarily or otherwise. The recipient client must thus be an employer or prospective employer and the consideration for this service must flow from such employer to the provider of the service.The placement facilitation provided by educational institutions whereunder the placement charges are collected from students and not from an employer or a prospective employer, do not on a fair and reasonable interpretation of the taxable service as defined in the Act, fall outside the purview of either the definitional or enumerative provision of the Act. - The concurrent conclusions to the contrary recorded by the primary or lower appellate authorities are fundamentally misconceived, invite invalidation and are accordingly quashed. - Decided in favour of assessee.
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2015 (8) TMI 1137
Demand of service tax - Business Auxiliary Service - Appellants were also facilitating availment of loans by customers from Banks and financial institutions - Receipt of commission - Held that:- In the light of the Larger Bench ruling clarifying contours of BAS, in respect of transactions involving automobile dealers and banks or financial institutions, there was a bona fide doubt as to whether appellants herein had provided BAS during the relevant period in issue. Therefore non-filing of returns and non-remittance of tax for rendition of BAS could not be characterised as arising with a view to suppression of material facts or failure to remit tax with an intent to evade the same, inviting application of the extended period of limitation under the proviso to Section 73(1) of the Finance Act, 1994. Period in issue in the present appeals is July 2003 to November 2005. Show cause notice was issued on 31.1.2006. Only part of the period is therefore within the normal period of limitation. In the light of the fact that there were conflicting decisions of the Tribunal which stood resolved by the Larger Bench decision in Pagariya Auto Center (2014 (2) TMI 98 - CESTAT NEW DELHI (LB)), we are satisfied that invocation of the extended period was not justified - Impugned order is set aside - Decided in favour of assessee.
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2015 (8) TMI 1136
Power of commissioner to remand back the matter - Denial of CENVAT Credit - GTA Service - Held that:- powers flowing from sub-Section (4) of Section 85 clothe, the Commissioner (Appeals) with power to even remand the proceedings. If proper inquiry is not conducted or the proceedings is decided ex-parte, it would not be necessary in every case that the Commissioner (Appeals) converts himself to the adjudicating authority and conducts the entire inquiry necessary for proper adjudication of the issues. In such a case, the Commissioner (Appeals) may as well decide to remand the proceedings, and there is no limitation on his powers to do so. As regards the ruling of Hon'ble Apex Court in MIL India Ltd. (2007 (3) TMI 8 - SUPREME COURT OF INDIA), the Hon'ble High Court observed that the Ruling is not applicable to Service Tax matters as sub-Section (5) of Section 85 of Finance Act, 1994 starts with words “subject to the provisions of this chapter”. - Decision in the case of Commissioner of Service Tax Vs. Associated Hotels Ltd. [2014 (4) TMI 406 - GUJARAT HIGH COURT ] followed - Decided against Revenue.
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2015 (8) TMI 1135
Waiver of pre deposit - Manpower recruitment or supply agency service - Reverse charge of mechanism - Held that:- Payments made to local vendors for purchase of foreign currency to facilitate foreign stay of petitioner's employees abroad, on which the tax demand of ₹ 8,765/- is assessed is misconceived as purchase of foreign currency is neither a service nor a taxable service defined anywhere, in the provisions of the Act. Demand of ₹ 25,442/- is attributed as the tax liability on reverse charge mechanism for remittances made for training of petitioner's employees at foreign locations. It is not clear how services provided and consumed outside the Indian territory are taxable under the provisions of Act. In any event since the tax under the provisions of chapter V of the Finance Act, 1994 is a consumption and destination based tax and the levy of tax is confined to services consumed or provided within the Indian territory, we prima facie see no basis for this aspect of the levy. Regarding remaining demand, assessee produced some of the original challans only to the extent of ₹ 1,18,75,607/-, the balance due is ₹ 41,21,153/-. Since we find that demand to the extent of ₹ 34,207/- is attributable to service tax assessed on non taxable services, the balance liability of the petitioner works out to ₹ 40.87 lakhs. - Partial stay granted.
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2015 (8) TMI 1134
Condonation of delay - Delay of more than 300 days - Held that:- From the conduct of the applicant that they are not serious in prosecuting the application before this Forum. Also, from the records we find the averments made by the applicant seeking condonation of the delay is not supported by evidence. - Condonation denied.
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2015 (8) TMI 1133
Denial of CENVAT Credit - whether a manufacture having CENVAT Credit balance in the CENVAT account and utilize the credit for payment of Service Tax on “Goods Transport by Road” on inward freight and “Technical Assistance Service” received from a foreign service provider during the period March 2005 to May 2006 - Held that:- issue is no more res-integra in view of the decision of the Hon'ble Gujarat High Court in the case of Commissioner of Central Excise & Customs Vs Panchmahal Steel Ltd - [2014 (12) TMI 876 - GUJARAT HIGH COURT] which has upheld the decision of the Larger Bench of the Tribunal in the case of M/s Panchmahal Steel Ltd Vs Commissioner of Central Excise, Vadodara - [2014 (4) TMI 490 - CESTAT AHMEDABAD], identical issue, in favour of the assessee. - impugned order is set aside - Decided in favour of assessee.
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2015 (8) TMI 1103
Denial of refund claim - Notification No. 41/2007-S.T., dated 6-10-2007 - non-fulfilment of conditions regarding furnishing of contract and non-mentioning of the amount paid to commission agent in the shipping bills - Held that:- The appellant had not produced the copy of contract and the amount of Service Tax paid is not mentioned in the shipping bills. In respect of terminal handling charges and carriage service, these services are for delivery of goods after export at the destination port hence the same are not covered under the provisions of the Notification. In respect of other services, the nature of service provided and amounts are not shown on the bills of service provider and there is no averment in the present appeal regarding these deficiencies hence I find no infirmity in the impugned order. - Decided against assessee.
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2015 (8) TMI 1102
Power of Commissioner to remand back the matter - Held that:- Gujarat High Court in the case of Medico Labs (2004 (9) TMI 108 - HIGH COURT OF GUJARAT AT AHMEDABAD) dismissed the appeal filed by Revenue on the identical issue. Respectfully following the decision of the Hon'ble Gujarat High Court in the case of CCE Ahmedabad Vs Medico Labs (supra), I do not find any infirmity in the order of Commissioner (Appeals) - Decided against Revenue.
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Central Excise
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2015 (8) TMI 1128
Duty demand u/s 11A - Suppression of facts - Misdeclaration of goods - Whether the CESTAT, was right in rejecting extended period of demand under Section 11A of Central Excise Act, 1944 and in not restoring levy of mandatory penalty under Section 11AC, levy of interest under Section 11AB of the Act and penalties under Rules 173Q and 226 of Central Excise Rules, 1944, holding that no mis- declaration or suppression was made by the respondent - Held that:- Even before the Tribunal, there was no material placed to controvert the finding of the Commissioner as recorded in the Order-in-Original. The Tribunal had also, considering the fact that when there was a scope for doubt whether the goods were dutiable or not, refused to apply extended period of limitation. - as both the primary authority as well as the appellate Tribunal has found, as a matter of fact, that there was a genuine doubt with respect to dutiability, both the authorities did not find it appropriate to apply extended period of limitation to the facts of the case. - No reason to interfere as it is purely a finding of fact recorded by the authorities on appreciation of the material on record - Decided against Revenue.
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2015 (8) TMI 1127
Quashing of FIR - Demand set aside by CESTAT - Held that:- Since petitioners have an alternate and efficacious remedy to seek discharge from trial court by urging the pleas taken herein, therefore, this Court is not inclined to exercise its inherent jurisdiction under Section 482 of Cr.P.C. - Petition disposed of.
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2015 (8) TMI 1126
Recovery of excise duty - Recovery from purchaser of wound up company - Held that:- Corporation has not transferred or disposed of its business or trade. The Corporation has been wound up by an order of the Court and its assets have been sold off. A running business has not been sold. It has come on record that production activity is not being carried out since 1997. The Counter Affidavit of the Central Excise Department is silent as to how they have asserted that a running business of the Corporation has been purchased by the petitioner. In the absence of any proof of this nature coupled with the fact the Official Liquidator issued an advertisement for sale of the assets of the Corporation after a winding up order was passed by the High Court, we are of the opinion that the past dues of the Central Excise Department cannot be recovered from the petitioner under Section 11 of the Act. Similar notice was issued by the Central Excise Department demanding duty of finished goods lying in stock, which was received by the petitioner from the Official Liquidator pursuant to their highest bid being accepted. The Commissioner, Central Excise Department after considering the matter passed an order dated 28.07.2011 holding that the petitioner was not the manufacturer of goods and, therefore, was not liable to pay central excise duty quite apart from the fact that the petitioner had purchased the property in auction, which was free from all encumbrances and, consequently, dropped the proceedings. - since the petitioner had only purchased the assets of the Corporation in pursuance of the winding up order passed by the High Court and had not taken over a running business of the Corporation, the liability of past central excise dues payable by the Corporation cannot be fastened nor recovered from the petitioner - Decided in favour of assessee.
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2015 (8) TMI 1125
Classification of goods - Whether the product manufactured by the respondent assessee is covered by Chapter Heading No.87.02 or 87.07 - Held that:- inasmuch as Notification No.27/2002-CE(NT) dated 23.7.2002 which is for the period 1.5.1991 to 28.2.2001, categorically mentions that such product shall be under Heading 87.02, 87.03 or 87.04 instead of Heading 87.07 of the said schedule - Respondent shall be entitled to the benefit of exemption of Notification No.27/2002. - Appeal disposed of.
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2015 (8) TMI 1124
Duty demand - Manufacturing activity - slitting of crape paper for making masking tape - Supreme Court declined to entertain the appeal as the duty impact is less than ₹ 2 lakhs. Appeal was filed by the Revenue against the decision of Tribunal [2003 (6) TMI 407 - CESTAT, MUMBAI], wherein Tribunal held that It is nowhere stated in the chapter sub-heading classifying the paper on the basis of the dimension of it namely width of the paper. Note 10(a) of the Chapter 48 mentions that process of slitting or cutting shall amount to manufacture in respect of thermal paper. Here admittedly imported material is not thermal paper. The show cause notice does not state that the product is of thermal paper. In the absence of such a claim in the show cause notice the entire action of department treating the activity is wrong.
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2015 (8) TMI 1123
Duty demand - Manufacturing activity - clearance of silver coated copper tamping powder but they did not reflect the same in the classification lists or in RT 12 Returns or in any other statutory record - Supreme Court dismissed the appeal due to nominal tax effect. The appeal was filed by the Revenue against the decision of Tribunal [2001 (3) TMI 508 - CEGAT, NEW DELHI]; wherein Tribunal held that silver coating of the copper tamping powder does not amounted to manufacture for want of any material evidence on record to prove that any new/distinct in character and usage product came into existence.
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2015 (8) TMI 1122
Classification of orthopaedic heating belts - Chapter Heading No.90219090 or Chapter Heading No.90189099 - extended period of limitation - Supreme Court after condoning the delay dismissed the appeal as devoid of merit. The appeal was filed by the Revenue against the decision of Tribunal [2014 (7) TMI 1071 - CESTAT AHMEDABAD]; wherein Tribunal held that giving a very narrow interpretation of the phrase ‘preventing or correcting bodily deformities’ needs to be visible and should be outside the body, would be an incorrect interpretation for the classification of the product like ‘orthopaedic heating belts’ - the use of such product may be ascertained by the experts who are using or recommending such products. - The explanatory Notes to HSN specifically talks about as to what would get covered under Chapter Heading No.9018. - it is settled law that for classification of the product, the sub heading which is specific, should be preferred to general sub-heading - classification as done by the assessee under Chapter Heading No.9021 is correct.
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2015 (8) TMI 1121
Denial of refund claim - Bar of limitation - payment of duty was made before issue of SCN - claim of refund was submitted after the SCN was dropped - refund claim filed on 26-2-2001 i.e. after a period of 3 years from the date of such payment/debit was within the limitation of time as prescribed under section 11B of Central Excise Act, 1944 - Held that:- Payment of duty was made by the assessee and that was in terms of the computation made by it. It was debited in the revenue account in November and December of 1997. It is true that this payment was not made under protest. Payment was made voluntarily but the revenue did not accept it as a clearance of duty liability and in accordance with law. The revenue therefore proceeded to raise a demand and issued four show cause notices. A reading of the show cause notices would reveal as to how the revenue proceeded to demand the sums set out therein and purported to adjust the payment already made by the assessee. Thus, the liability of the assessee was not crystallized according to the Revenue until this show cause cum demand notice was adjudicated. Demand was required to be adjudicated and was indeed adjudicated by the competent authority under the Central Excise Act, 1944, the order passed by him resulted in dropping of the proceedings and the demand. Therefore, once the show cause notice was dropped the assessee in this case became entitled to seek refund. That such an application was maintainable and could have been granted, provided it was lodged within the period of limitation and as prevalent in terms of the applicable legal provision. At the relevant time, the period of limitation was six months. The period of six months was not reckoned in this case from the payment but from the date of adjudication order. - claim for refund can also be made if the duty is paid voluntary and not under protest or without prejudice. The only requirement is that the refund must be sought within the specified period and the limitation is provided by the second proviso to Section 11B. If the application was filed within this period it could have been considered and the refund sanctioned and granted. - Decided against Revenue.
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2015 (8) TMI 1104
Challenge to Stay order - Tribunal granted stay for unlimited period - Held that:- In the Commissioner Central Excise Vs. M/s Magnum Ventures Ltd. in [2015 (8) TMI 1075 - ALLAHABAD HIGH COURT], this Court clarified that the interim order granted by the Tribunal will not continue beyond 365 days from the date it has been passed and has further clarified that after expiry of 365 days the assessee would be at liberty to make a fresh application for extension of the interim order. - Tribunal directed to decide the appeal within six months from the date of production of a certified copy of this order. - Decided in favour of Revenue.
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CST, VAT & Sales Tax
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2015 (8) TMI 1132
Adjustment of tax liability – Out of input tax credit available – Appeal was filed before Tribunal against order of first Appellate Authority dismissing appeal on ground of non-deposit of pre-deposit – Tribunal after deciding issue on merits deleted levy of interest and penalty – Whether tribunal was justified on deciding matter on merits despite that appellate authority dismissed only on ground of pre-deposit and deleting interest and penalty levied – Held that, when appeal before Tribunal was against order of Appellate Authority dismissing appeal on ground of non-deposit of pre-deposit, Tribunal need not and/or should not enter into merits of case – Tribunal was required to concentrate on order passed by Appellate Authority dismissing appeal on ground of pre-deposit and/or amount of pre-deposit only – However, when main issue involved was of deletion of interest and penalty levied, therefore court inclined to consider issue on merits rather than remanding matter as no fruitful purpose would be served – As per decision of Cosmos International Ltd [2015 (4) TMI 779 - GUJARAT HIGH COURT] dealer can adjust current year tax liability out of Input Tax Credit available in credit of dealer – In view of said decision, no substantial questions of law arises – Therefore, Tribunal rightly deleted interest and penalty – Decided against Revenue.
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2015 (8) TMI 1131
Suo Moto Re-assessment – Assessment order was passed in which rebate of entry tax on sale of forging was granted – Subsequently, notice was issued proposing to make re-assessment and as no reply was received, appropriate authority granted permission to initiate proceedings for re-assessment –Petitioner being aggrieved by issuance of notice and granting of permission, prayed for its quashing – Held that:- if assessing authority has reasons to believe that whole or any part of turnover had escaped assessment or any deduction or exemption had wrongly been allowed, assessing authority may after issuing notice to dealer and after making such inquiry, assess or re-assess dealer to tax according to law – In original assessment order there was no discussion or any finding as to how rebate was permissible to petitioner – If any manufacturing activity was carried on, rebate was not permissible – What would be effect of forging was left open to be decided in assessment proceedings as it requires evidence – There was sufficient reasons to believe for assessing authority to seek permission for reopening assessment – No reason to interfere in impugned notice issued – Petition dismissed – Decided against Assesse.
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2015 (8) TMI 1130
Exercise of Revisional powers – Validity – Petitioner seeking to quash proceedings, assessment order issued in pursuant to said proceedings and notice of demand – Petitioner contended that there was limitation in exercising powers under section 6(5) and reopening assessment by invoking section 8(1) of Act suo moto by revisional authority – Whether there is any period of limitation for exercising suo moto power of revision – Held that:- not in dispute that section 8(1) does not provide any specific period of limitation for exercising suo motu revisional power – However assessment and reassessment can be made only by assessing authority who has to exercise its powers under section 6 of Act – Assessment under normal circumstance becomes final after period specified under section 6(5) of Act – Since case relates to assessment year 2002-2003, assessment can be reopened only on or before March 31, 2008 – Apparently, proceedings were issued only on May 30, 2009 – Hence writ appeal deserves to be allowed quashing section all further proceedings pursuant to it – Decided in favour of Assesse. Luxury Services – Taxability – Appellant seeking declaration that certain services rendered outside hotel were not liable to be taxed under Kerala Tax on Luxuries Act, 1976 – Held that:- It was not case of petitioner that their customers were availing services of outside agencies by themselves – "luxury" that customers of appellant received from various other agencies outside hotel were admittedly billed by appellant – Therefore, it was luxury which was provided by appellant to its customers, though it was outside premises of hotel – Therefore while interpreting section 2(ee), 2(f) and 4(1), "in the hotel" as appearing in said provision has to be read as "by the hotel" as well – Incidence of luxury tax was for luxury that was provided by hotel and limiting levy of tax to services provided inside hotel will be giving very narrow meaning to language used in statute – Appeal dismissed.
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2015 (8) TMI 1129
Increase in Purchase price – Increase in tax – Rejecting books of Account – Petitioner maintained books of account and had paid purchase tax as per these books however assessing officer did not rely upon books of account and assessed purchase price of raw rubber at higher rates alleging that price shown by petitioner was very lower than market situation – Held that:- mere ipse dixit of assessing officer cannot be accepted – No doubt assessing officer may have jurisdiction to increase rates, but then he should have clearly pointed out differential rates and prevailing market trends – Merely because one dealer has paid higher price was no ground to say that all dealers should pay same price – Government organization like TFDPC will normally pay higher price since it was non-profit organization – Law was well-settled that books of account of assesse cannot be rejected merely on whims and fancy of assessing officer – If assessing officer does not want to accept books of account, he must give some cogent and valid reasons for not accepting – No evidence was reflected in order of assessing officer or appellate authority – Assessment orders set aside and assessing authority directed to reassess income – Decided in favour of Assesse.
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Wealth tax
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2015 (8) TMI 1101
Valuation - Whether the CWT(A) is right in deleting the additions made to the taxable wealth in conformity with S.7, Schedule III, Part H of the Wealth-tax Act read with Rule 20 of the Wealth-tax Rules - Held that:- Assessee has relinquished his rights in the property in question for a consideration of ₹ 2.45 crores in the previous year relevant for assessment year 2008-09, and accordingly offered the capital gains arising from the said transaction for assessment under the income-tax Act, in the return filed for that year. Based on the same, the Assessing Officer was of the view that the assessee has assets chargeable to wealth–tax in the assessment years under consideration and they escaped assessment, and accordingly issued notice under S.17 of the Wealth-tax Act. The assessee has filed wealth tax returns in response to the notices under S.17 and included therein the assets in question, but adopted the value as per the circle rate fixed by the State Government Authorities for purpose of determining the stamp duty. But the Assessing Officer proceeded with the assessments adopting the amount of ₹ 2.45 crores received by the assessee in terms of settlement deed in the assessment year 2008-09. There is a prescribed rule of valuation of asset being land and building as per Wealth Tax Act. As per the said rule, the value of asset shall be taken at the valuation date by resorting to any of the modes specified in the said rule. In the instant case, the Assessing Officer has taken the received by the assessee in the year 2008-09, as the fair market value of asset for the preceding three years without any basis, which in our opinion is not correct. The Assessing Officer could have referred the issue of valuation of the property to the valuation officer under S.16A of the Act and find out the market value of the asset for each of these years separately. Without doing so, he adopted the amount received by the assessee in terms of settlement in the assessment year 2008-09, as the value of the property on the relevant valuation dates of the preceding three years, without any basis. The assessee, on the other hand, rightly adopted the circle rate of properties being the fair market value of the assets for the purpose of wealth tax assessments. - valuation taken by the assessee as per circle rates in the relevant years, deserves to be accepted - Decided in favour of assessee.
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Indian Laws
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2015 (8) TMI 1139
Whether High Court could not have heard the appeal in the absence of the counsel for the accused - Appointment of amicus curiae - Hearing of appeal in absence of appellant - Conviction under Sections 7, 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988 - Imposition of fine -Held that:- In the judgement of Larger bench in Bani Singh (1996 (7) TMI 562 - SUPREME COURT), it has not been laid down as a ratio that in each circumstance, the High Court should appoint a counsel failing which the judgment rendered by it would be liable to be set aside. - principles that can be culled out are (i) that the High Court cannot dismiss an appeal for non-prosecution simpliciter without examining the merits; (ii) that the court is not bound to adjourn the matter if both the appellant or his counsel/lawyer are absent; (iii) that the court may, as a matter of prudence or indulgence, adjourn the matter but it is not bound to do so; (iv) that it can dispose of the appeal after perusing the record and judgment of the trial court; (v) that if the accused is in jail and cannot, on his own, come to court, it would be advisable to adjourn the case and fix another date to facilitate the appearance of the accused-appellant if his lawyer is not present, and if the lawyer is absent and the court deems it appropriate to appoint a lawyer at the State expense to assist it, nothing in law would preclude the court from doing so; and (vi) that if the case is decided on merits in the absence of the appellant, the higher court can remedy the situation. There is no trace of doubt that the principle laid down in Mohd. Sukur Ali (2011 (2) TMI 514 - SUPREME COURT OF INDIA) by the learned Judges that the court should not decide a criminal case in the absence of the counsel of the accused as an accused in a criminal case should not suffer for the fault of his counsel and the court should, in such a situation, must appoint another counsel as amicus curiae to defend the accused and further if the counsel does not appear deliberately, even then the court should not decide the appeal on merit is not in accord with the pronouncement by the larger Bench in Bani Singh (1996 (7) TMI 562 - SUPREME COURT). It, in fact, is in direct conflict with the ratio laid down in Bani Singh (supra). As far as the observation to the effect that the court should have appointed amicus curiae is in a different realm. It is one thing to say that the court should have appointed an amicus curiae and it is another thing to say that the court cannot decide a criminal appeal in the absence of a counsel for the accused and that too even if he deliberately does not appear or shows a negligent attitude in putting his appearance to argue the matter. With great respect, we are disposed to think, had the decision in Bani Singh (supra) been brought to the notice of the learned Judges, the view would have been different. Dictum in Mohd. Sukur Ali (2011 (2) TMI 514 - SUPREME COURT OF INDIA) to the effect that the court cannot decide a criminal appeal in the absence of counsel for the accused and that too if the counsel does not appear deliberately or shows negligence in appearing, being contrary to the ratio laid down by the larger Bench in Bani Singh (supra), is per incuriam. We may hasten to clarify that barring the said aspect, we do not intend to say anything on the said judgment as far as engagement of amicus curiae or the decision rendered regard being had to the obtaining factual matrix therein or the role of the Bar Association or the lawyers. Demand and acceptance of the amount as illegal gratification is a condition precedent for constituting an offence under the Act, it is to be noted that there is a statutory presumption under Section 20 of the Act which can be dislodged by the accused by bringing on record some evidence, either direct or circumstantial, that money was accepted other than for the motive or the reward as stipulated under Section 7 of the Act. When some explanation is offered, the court is obliged to consider the explanation under Section 20 of the Act and the consideration of the explanation has to be on the touchstone of preponderance of probability. It is not to be proven beyond all reasonable doubt. - explanation offered by the accused does not deserve any acceptance and, accordingly, we find that the finding recorded on that score by the learned trial Judge and the stamp of approval given to the same by the High Court cannot be faulted. Prosecution has established the factum of recovery and has also proven the demand and acceptance of the amount as illegal gratification. Therefore, the conviction recorded against the accused is unimpeachable. The said conclusion is in consonance with pronouncement of this Court in State of Maharahstra v. Dnyaneshwar Laxaman Rao Wankhede [2009 (7) TMI 1230 - SUPREME COURT]. - Sentence of accused is reduced - Decided partly in favour of appellant.
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2015 (8) TMI 1111
Ownership of flat - Flat transferred in the name of Respondent with the consent of Appellant - Arbitrator gave decision in favour of Appellant - Co-operative Tribunal and High Court decided against her - Held that:- The reason for transferring flat no. 5D indicated in the letters dated 11.11.1992 and 13.11.1992 was on account of the close relationship between Pratima Chowdhury and Kalpana Mukherjee - As a matter of fact, there was no close relationship between Pratima Chowdhury and Kalpana Mukherjee. Pratima Chowdhury, is indicated to have been living in Bombay and never visiting Calcutta. Kalpana Mukherjee is a resident of Calcutta, who was in employment at Calcutta, and had started to reside with her son Partha Mukherjee, after he moved to Calcutta alongwith his wife Sova Mukherjee. There was no direct relationship between Pratima Chowdhury and Kalpana Mukherjee. Pratima Chowdhury’s niece Sova Mukhrjee was married to Partha Mukherjee, son of Kalpana Mukherjee. The only relationship that can be assumed, is of aunty and niece, between Pratima Chodhury and Sova Mukherjee. If on account of love and affection, for her niece, Pratima Chowdhury desired to transfer flat no. 5D which she had purchased for a consideration of ₹ 4 lakhs, she would have done so by transferring it to the name of her niece Sova Mukherjee. - It is, therefore, improper for the adjudicating authorities to have accepted the factum of close relationship of the parties, in so far as, the transfer of flat no. 5D, is concerned. There is hardly any justification for having accepted another important factual position depicted in the letters dated 11.11.1992 and 13.11.1992 - In the written reply filed before the Arbitrator, Kalpana Mukherjee took the express stance, that Pratima Chwodhury had transferred flat no. 5D to her name, by accepting a consideration of ₹ 4,29,000/-. She further asserted, that the aforesaid consideration had passed from Kalpana Mukherjee to Pratima Chowdhury through Partha Mukherjee. According to Kalpana Mukherjee, Partha Mukherjee transferred shares in his name valued at ₹ 4,29,000/-, to the name of Pratima Chowdhury. Per se therefore, even Kalpana Mukherjee denied the factual position indicated in the above letters, whereby flat no. 5D was transferred from the name of Pratima Chowdhury, to that of Kalpana Mukherjee. One would have appreciated the recording of consideration in lieu of the transfer of property from the name of Pratima Chowdhury to that of Kalpana Mukherjee, to avoid future complications, rather than withholding the same. It is clearly not understandable, what kind of complications were being avoided. Expressing the above factual position in the letters under reference, makes the whole transaction suspicious, mistrustful and possibly fraudulent too. In the absence of any relationship, the party benefiting from the letters dated 11.11.1992 and 13.11.1992, would have successfully avoided all complications merely by incorporating consideration, which was to pass from Kalpana Mukherjee to the transferee Pratima Chowdhury - One is prompted to record herein, that it was not legitimately open to the parties to record in the letters under reference, that flat no. 5D was being gifted by Pratima Chowdhury to Kalpana Mukherjee, on account of lack of proximity between the parties. The transfer of the said property by one to the other, by way of gift, would obviously have been subject to judicial interference, as the same would at least prima facie, give the impression of dubiety. It was therefore, that Kalpana Mukherjee hastened to adopt a different factual position in her written reply before the Arbitrator. Partha Mukherjee did not even have the shares referred to by the transferee Kalpana Mukherjee, in his name, when the transfer documents were executed on 11.11.1992 and 13.11.1992, or even on 14.2.1993 when the Board of Directors of the Society, passed the transfer resolution. The above shares are shown to have been transferred to the name of Pratima Chowdhury on 16.12.1994. Well before 16.12.1994, even according to the stance adopted by Kalpana Mukherjee, Pratima Chowdhury had executed all the transfer documents. It is therefore difficult to accept, that the parties had agreed to pass on consideration by transfer of shares, which were not even owned by Kalpana Mukherjee (through Partha Mukherjee) on the date of transfer of flat no. 5D from Pratima Chowdhury to Kalpana Mukherjee. In sum and substance therefore, on undisputed facts, the stance adopted by Kalpana Mukherjee in the written statement filed by her before the Arbitrator, is shown to be false. There was substance in the determination of the Arbitrator, specially on account of the fact that transfer of shares from the name of Partha Mukherjee to the name of Pratima Chowdhury came to be effected, well after the transfer of flat no. 5D to the name of Kalpana Mukherjee. For the above reason as well, the findings of fact recorded by the Co-operative Tribunal as well as by the High Court, are bound to be considered as having been recorded without taking into consideration all the material and relevant facts. Society sought the approval of the Deputy Registrar, Co-operative Societies for the transfer of membership, as also, flat no. 5D to the name of Kalpana Mukherjee on 13.3.1995. Undoubtedly, Pratima Chowdhury had sought revocation, before the transfers under reference had assumed finality. It is in the above background, that one needs to evaluate the reply of the Society dated 10.4.1995. Through the letter dated 10.4.1995, Pratima Chowdhury was informed, that the Society had no authority to look into the matter, after the resolution of the Board of Directors dated 2.4.1995. We find the above explanation, untenable. It was imperative for the Society to have examined the withdrawal letter dated 28.2.1995, the matter certainly had not been concluded. Well after the withdrawal letter, the Society by its notice dated 16.4.1995 had intimated its members, about the resolution dated 2.4.1995. The matter was, therefore, pending authoritative conclusion. When the letter dated 22.3.1995 was addressed to the Deputy Registrar, Co-operative Societies, it had not yet granted approval to the recommendations made by the Society. The receipt of the letter dated 28.2.1995, by the Society (as also the receipt of the letter dated 22.3.1995, by the Deputy Registrar, Co- operative Societies) is not in dispute. It is imperative for us therefore to conclude, that the decision taken by the Deputy Registrar, Co-operative Societies was, without reference to the withdrawal letter dated 28.2.1995 (which was enclosed with the letter dated 22.3.1995 addressed to the Deputy Registrar, Co-operative Societies). The determination by the Deputy Registrar, Cooperative Societies, cannot therefore be treated as a valid and legitimate consideration. Acceptance or rejection on merits is another matter, but non-consideration is just not understandable. Undoubtedly, if the documents relied upon by Kalpana Mukherjee were genuine, Partha Mukherjee would not have acknowledged the ownership of Pratima Chowdhury over flat no. 5D (on 28.10.1993). These aspects of the matter were totally overlooked by the Co- operative Tribunal, as well as, by the High Court. These were vital facts, and needed to be examined, if the order passed by the Arbitrator was to be interfered with. In the absence of such consideration, the findings of fact recorded by the Co-operative Tribunal and by the High Court, are bound to be considered as perverse. Since the factual position attributed to the actions of 21.10.1993 and 28.10.1993, which emanated and emerged from Kalpana Mukherjee and Partha Mukherjee respectively, we are of the view that entire sequence of transfer, is rendered doubtful and suspicious. Based on the letter dated 11.11.1992, and the document dated 13.11.1992, flat no. 5D was transferred to the name of Kalpana Mukherjee. The instant transfer however did not include the covered garage space. Thereafter, based on an agreement executed between Kalpana Mukherjee (on the one hand), and the Society (on the other), the said covered garage space was transferred to the name of Kalpana Mukherjee, on 25.4.1995. The said transfer was not at the behest of, or with the concurrence of Pratima Chowdhury. - Co-operative Tribunal as well as the High Court, seriously erred in recording their conclusions. We are satisfied in further recording, that the Arbitrator was wholly justified in allowing the Dispute Case filed by Pratima Chowdhury, by correctly appreciating the factual and legal position. Order dated 16.5.2002 passed by the Co-operative Tribunal, and the order dated 14.2.2006 passed by the High Court, are hereby set aside. The determination rendered by the Arbitrator in his award dated 5.2.1999, is hereby affirmed. Kalpana Mukherjee is directed to handover the possession of flat no. 5D to Pratima Chowdhury, within one month from today. The Society is also directed to retransfer the shares of the Society earlier held by Pratima Chowdhury, and the ownership rights of flat no. 5D to the name of Pratima Chowdhury, without any delay. - Decided in favour of Appellant.
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2015 (8) TMI 1110
Constitutional validity of the Kerala Cashew Factories (Acquisition) Act, 1974 - Held that:- No Section of the principal Act had been struck down and hence Section 6 of the Amendment Act did not need to remove the basis of any earlier decision striking down an Act. We repeatedly asked him if action had been taken under Section 3(1) or 3A of the Amendment Act to acquire any of the cashew factories before us. His candid answer was "no". The argument that Section 6 contains a third source of power to acquire cashew factories merely by putting them in a schedule has to be rejected on two fundamental grounds. First, no notice or hearing is provided as in Section 3 or Section 5A of the Land Acquisition Act or any other safeguard such as a resolution of the legislative assembly supporting such acquisition as in Section 3A. If acquisition is to take place in conformity with law rules of natural justice cannot be bypassed. - Section 6 directly seeks to upset a final judgment inter-parties and is bad on this count and is thus declared unconstitutional. Kerala Legislature wished to interfere with two judgments of the Supreme Court making no distinction between factories that were managed by the Cashew Development Corporation (the 36 factories) and CAPEX (the 10 factories). It is interesting to note that apart from the Government suffering financially (if the factories are to be handed back), there will be large scale unemployment among workers in the cashew industry. - It is clear that the objects and reasons for the Amendment Act makes no differentiation between the 36 factories handed back and the 10 factories taken over by the Amendment Act. The High Court was in error in saying that there was an intelligible differentia between the two. Further, even otherwise, there is no difference between factories which post acquisition are run by the Cashew Development Corporation or CAPEX regard being had to the object sought to be achieved - namely to avoid unemployment of cashew workers. Both the Cashew Development Corporation and CAPEX, along with the Government, will suffer financially. In fact, the handing back of only 36 factories would be patently discriminatory as all 46 factories are similarly situate and have been treated as such by the State by issuing common notices to all of them under Section 3 of the Act. We have been reliably informed that these 36 factories are functioning under their respective owners for the last twenty years. In the circumstances we hold that there is no intelligible differentia between the 36 factories and the 10 factories taken over having any rational relation with the object sought to be achieved and on this ground also Section 6 of the Amendment Act deserves to be struck down as violating Article 14 of the Constitution. - judgment of the High Court is set aside and it is ordered that the cashew factories and the land appurtenant thereto that have been taken over by the State under the Amending Act must be handed back within a period of eight weeks from the date on which this judgment is pronounced. - Decided in favour of Appellant.
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2015 (8) TMI 1109
Superseding of the Board of Directors of District Cooperative Central Bank Ltd., Panna without previous consultation with the Reserve Bank of India - Violation of second proviso to Section 53(1) of the Madhya Pradesh Cooperative Societies Act, 1960 - Held that:- Seven charges levelled against the Board of Directors were relating to the period of the previous Committee, for which the first respondent Board of Directors could not be held responsible. Further, even though the Board had taken charge in October 2007, the audit report was submitted before the Board only after nine months and that the Board of Directors took follow up action on the basis of the audit report dated 25.9.2008. The Joint Registrar, it seems, was found to be satisfied with the detailed replies dated 6.5.2009 and 16.5.2011submitted by the Board of Directors of the Bank, possibly, due to that reason, even though the show- cause-notice was issued on 22.3.2009, it took about two and half years to pass the order of supersession. Order of supersession dated 30.9.2011 is not only in clear violation of the second proviso to Section 53(1) of the Act, but also the allegations raised in the show-cause-notice are deficiencies mostly relating to systems and procedures and are of general nature and not grave enough to overthrow a democratically elected Board of Directors. Both NABARD and RBI have expressed the view that the charges levelled against the Board of Directors do not provide strong ground to supersede the Board. - Board of Directors, in the instant case, took charge on 16.10.2007, therefore, they could continue in office till 15.10.2012. The Board of Directors was, however, superseded illegally on 30.9.2011 and, by virtue of the judgment of the Division Bench of the High Court dated 13.2.2012, the Board should have been put back in office on 13.2.2012, but an Administrator was appointed. Going by the proviso referred to above, the period during which the Board of Directors remained under supersession be excluded in computing the period of five years. In the facts and circumstances of this case, we are of the considered opinion that the duly elected Board of Directors should get the benefit of that proviso, which is statutory in nature. Joint Registrar, Co-operative Societies, Sagar directed to put the Board of Directors back in office so as to complete the period during which they were out of office. - High Court, in our view, has therefore rightly exercised its jurisdiction under Article 226 of the Constitution and the alternative remedy of appeal is not bar in exercising that jurisdiction, since the order passed by the Joint Registrar was arbitrary and in clear violation of the second proviso to Section 53(1) of the Act. - Decided against Appellant.
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2015 (8) TMI 1108
Cancellation of bail granted to the respondent - Held that:- if irrelevant materials have been taken into account or relevant materials have been kept out of consideration, the order granting bail to the accused cannot be sustained. In the same way, if there is specific allegation by the prosecution that the accused in question was a party to the criminal conspiracy, neither the Special Court nor the High Court is justified in granting bail to the said person. - It is pointed out by the CBI that investigation is under progress regarding the transactions relating to Sandur Power Company which involved many foreign transactions and the present respondent V.Vijay Sai Reddy (A-2) was the main person who dealt with all the foreign transactions for which evidence is available. It is also highlighted that V.Vijay Sai Reddy (A-2) has played a main role in pumping crores of money to M/s Jagathi Publications Private Limited through several companies like Artillegence Bio-Innovations Ltd., Bay Inland Finance Pvt. Ltd., Bhaskar Fund Management Pvt. Ltd., and other individuals based in Kolkata and Mumbai. Likewise, VANPIC’s grant of mining lease and permits to several group of companies, the investigation is under progress and custodial interrogation from the appellant is required. Investigation disclosed that respondent A-2 was nominated as a part time nonexecutive Director of Oriental Bank of Commerce by the Ministry of Finance vide notification dated 14.12.2006 based on the recommendation of late Dr. Y.S. Rajasekhara Reddy, the then Chief Minister of Andhra Pradesh and father of A-1. It is the assertion of the CBI that respondent A-2 was not only the direct beneficiary of the post of Director in a Nationalised Bank but was also a key conspirator and facilitated for fiddling with public money of the said bank. As the Director of the bank, he also facilitated a loan of ₹ 200 crores to A-1 without any security and was also appointed as a Member of Tirumala Tirupati Devasthanams. - It is pointed out that so far 110 witnesses have been examined and as many as 1382 documents running into several thousands of pages have been collected in respect of investment through paper companies based in Kolkata and Mumbai, popularly known as suit case companies. Even in the case of Indus Projects and Lepakshi Knowledge Hub Pvt. Ltd., according to the CBI, the role of respondent A-2 is being ascertained. Finally, it is pointed out that the role of respondent (A- 2) in matters of Raghuram Cements and Sandur Power are yet to be completed, hence, the presence of respondent herein (A-2), who is outside the judicial custody would definitely hamper the smooth investigation and blunt the due process of law through his deceptive and subtle manipulations to influence, intimidate and threaten the witnesses. - It is true that the Special Judge while granting bail imposed certain conditions and the High Court has also added some more additional conditions, however, taking note of few instances in which how the respondent has acted, it cannot be possible for the investigating agency to collect the remaining materials for the remaining three charge sheets to be filed. In such circumstances, we are satisfied firstly the Special Court took irrelevant materials for consideration for grant of bail and secondly, the High Court having arrived definite conclusion that several findings of Special court are unacceptable or irrelevant but ultimately affirmed the very same order of the special Judge granting bail. While granting bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations. It has also to be kept in mind that for the purpose of granting bail, the Legislature has used the words "reasonable grounds for believing" instead of "the evidence" which means the Court dealing with the grant of bail can only satisfy it as to whether there is a genuine case against the accused and that the prosecution will be able to produce prima facie evidence in support of the charge. - High Court has mistakenly taken into account the irrelevant materials and kept out the relevant materials, which had to be considered for the grant of bail. - special Judge committed an error in granting bail and the same was erroneously affirmed by the High Court. - Decided in favour of appellant.
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2015 (8) TMI 1107
Delay in Quantification of compensation granted - Acquisition of land - HC observed that LAO/Collector, Land Acquisition having made the Award beyond the period of two years stipulated in Section 11-A of the Land Acquisition Act, the acquisition proceedings initiated by the authorities have lapsed. - Held that:- Under the first principle a casus omissus cannot be supplied by the Court except in the case of clear necessity and when reason for it found in the four corners of the statute itself but at the same time a casus omissus should not be readily inferred and for that purpose all the parts of a statute or section must be construed together and every clause of a section should be construed with reference to the context and other clauses thereof so that the construction to be put on a particular provision makes a consistent enactment of the whole statute. This would be more so if literal construction of a particular clause leads to manifestly absurd or anomalous results which could not have been intended by the Legislature. Section 11-A in terms does not provide for exclusion of the time taken to obtain a certified copy of the Judgment or order by which the stay order was either granted or vacated. Section 12 of the Limitation Act has no application to the making of an Award under the Land Acquisition Act. In the absence of any enabling provision either in Section 11-A of the Land Acquisition Act or in the Limitation Act, there is no room for borrowing the principles underlying Section 12 of the Limitation Act for computing the period or determining the validity of an Award by reference to Section 11-A of the Land Acquisition Act. Under Section 28A which provides for re-determination of the amount of compensation on the basis of the Award of the Court, the aggrieved party is entitled to move a written application to the Collector within three months from the date of the Award of the Court or the Collector requiring him to determine the amount of compensation payable to him on the basis of the amount Awarded by the Court. Proviso to Section 28A specifically excludes the time requisite for obtaining a copy of the Award while computing the period of three months within which the application shall be made to the Collector. There is in the case at hand no ambiguity nor do we see any apparent omission in Section 11-A to justify application of the doctrine of casus omissus and by that route re-write 11-A providing for exclusion of time taken for obtaining a copy of the order which exclusion is not currently provided by the said provision. The omission of a provision under Section 11-A analogous to the proviso under Section 28A is obviously not unintended or inadvertent which is the very essence of the doctrine of casus omissus. - High Court was in the above circumstances perfectly justified in holding that the Award made by the Collector/Land Acquisition Officer was non est and that the acquisition proceedings had elapsed by reason of a breach of Section 11-A of the Act. We, however, make it clear that the declaration granted by the High Court and proceedings initiated by the Collector shall be deemed to have elapsed only qua the writ petitioners-respondents herein. - Decided against appellant.
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2015 (8) TMI 1106
Revisional order dismissed as barred by limitation - Whether the provisions of Limitation Act are applicable to the provisions of Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 - Held that:- Section 5 of the Limitation Act provides that an appeal may be admitted after the limitation period has expired, if the appellant satisfies the court that there was sufficient cause for delay - Section 19 of the Act of 1983, does not contain any express rider on the power of the High Court to entertain an application for revision after the expiry of the prescribed period of three months. On the contrary, the High Court is conferred with suo moto power, to call for the record of an award at any time. - legislative intent was to exclude the applicability of Section 5 of the Limitation Act to Section 19 of the Act of 1983. - it is unnecessary to delve into the question of whether the Arbitral Tribunal constituted under the Act is a Court or not for answering the issue in the present case, as the delay in filing the revision has occurred before the High Court, and not the Arbitral Tribunal. Case of Nagar Palika Parishad, Morena (2003 (8) TMI 534 - MADHYA PRADESH HIGH COURT) was decided erroneously. Section 5 of the Limitation Act is applicable to Section 19 of the Act of 1983. No express exclusion has been incorporated therein, and there is neither any evidence to suggest that the legislative intent was to bar the application of Section 5 of the Limitation Act on Section 19 of the Act of 1983. The cases which were relied upon to dismiss the Special Leave Petition, namely Nasiruddin (2003 (1) TMI 693 - SUPREME COURT OF INDIA) and Popular Construction (2001 (10) TMI 1044 - SUPREME COURT OF INDIA) can be distinguished both in terms of the facts as well as the law applicable, and thus, have no bearing on the facts of the present case. - The impugned judgments and orders are set aside - Decided in favour of appellant.
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