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2019 (11) TMI 1808 - SUPREME COURT
Maintainability of appeal - monetary limit involved - Imposition of oil cess and National Calamity Contingent Duty (NCCD), education cess(EC), secondary and higher secondary education cess(SHE) - “Condensate” which emerges out during the processing of natural gas in their gas plant - HELD THAT:- The Civil Appeals are dismissed on the ground of low tax effect.
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2019 (11) TMI 1807 - SC ORDER
Offence of cheating - Applicability of Section 220 of the Cr.P.C. - case of inducement, allurement and cheating of a large number of investors/ depositors in a criminal conspiracy - HELD THAT:- Issue notice returnable within four weeks - In the meanwhile, there will be stay of operation of the order impugned.
The Registry is directed to supply relevant papers to the amicus curaie.
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2019 (11) TMI 1806 - ITAT HYDERABAD
Nature of expenditure - lease rentals - capital or revenue expenses - DRP held that the repayment of the principal amount is in the capital a/c and would not be eligible for deduction as revenue expenditure - HELD THAT:- As per the terms of the agreement L&T Finance Ltd, is the lessor and the assessee is the lessee. Sub clause 1.10 of clause (i) defines “lease rental” as the amount of periodical payments made for the use of the assets by the lessee to the lessor as specified under schedule together with taxes applicable from time to time.
Sub clause 12.3 of clause 12 specifies that on expiration of the agreement or termination of the lease, the assets can be repossessed by the lessor and if the repossessed assets do not fetch a sale value more than or equal to all moneys due under the agreement including the future payments payable, lessee shall make good the loss by paying the difference between the total of the receivable by the lessor and the sale price.
Assessee is required to select the asset and pay the insurance for the asset and has to pay the lease rentals and other charges in accordance with the schedules. In case of failure by the assessee to pay the rentals, the said asset can be taken over by the lessor. It is also stipulated that the vehicles shall be registered in the name of the lessor.
In the case of Rajshree Roadway vs. Union of India [2003 (3) TMI 50 - RAJASTHAN HIGH COURT] considered similar case wherein the assessee, who was carrying on transport business, had entered into a lease agreement for taking on lease certain trucks and in terms of the agreement, both the parties had agreed that during the lease period, the lessor would be the owner of the trucks and would get the benefit of depreciation and lessee would have no right to transfer or alienate such trucks to other parties in any form and therefore, the lease rent paid by the assessee should be allowed as revenue expenditure.
In the case of ICDS also [2013 (1) TMI 344 - SUPREME COURT] SC has held that the lessor is the owner of the property and is eligible for depreciation on the vehicles leased out.
We find that it is the assessee, who has stated before the DRP that the lease rentals paid by the assessee included the principal amount and finance charges - It is also stated that in the books of account of the company, the assets were capitalized and the depreciation was claimed, but, while computing the taxable income, the assessee had added back the depreciation claimed in the books of account and only claimed it as revenue expenditure. As rightly pointed out by the learned DR, depreciation can be allowed only in the hands of one party i.e. the owner of the property. As held by the Hon'ble Supreme Court in the case cited Supra, the lessor continues to be the owner of the property of the assets till the entire payment including the finance charges are paid to the lessor.
Admittedly, the assessee had not claimed depreciation on the said assets, and even as per the definition of the lease rentals in the agreement, it is the payment made for the use of the asset. Therefore, we hold that the assessee is eligible to claim the lease rentals as revenue expenditure.
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2019 (11) TMI 1805 - ITAT KOLKATA
TP Adjustment - selection of MAM - CUP or TNMM - HELD THAT:- Both the parties agreed that the Tribunal need not adjudicate the issue whether CUP or TNMM is the MAM for determination of ALP for the assessee company’s international transactions in this appeal and that the issue may be let open for adjudication in an appropriate year.
Comparable selection - Functional dissimilarity - HELD THAT:- Lucid Software Ltd's main stream of revenue was out of sale of software products in addition as to software development, thus we direct the TPO to exclude this company from the list of comparable companies.
Sagarsoft (India) Limited company be excluded from the list of comparable companies for determining ALP, as it is engaged in full software development cycle and has the RPT 56.49% of the operating revenue, when the filter applied by the TPO was 20% of the operating revenue in the case of the assessee.
Prelude Sys India Limited be excluded company provides multiple services like custom software development in addition to cloud computing, application services and mobile technology, enterprise application services, QA and testing, BPO and strategic sourcing. The RPT is 87% of the operating revenue as compared to the filter of 20% applied in the case of the assessee company by the TPO.
E-infochips Bangalore Ltd be excluded from the list of comparable companies for the reason that this company provides software development and IT enabled services like hardware designing, complete product lifecycle development, application development, enterprise IT consulting. RPT is 37.96% of the operating revenue as compared to the filter of 20% applied by the TPO in the case of the assessee company.
Acropetal Technologies Limited company to be excluded from the list of comparable companies for the reason that this company has Employee cost percentage of 11.51% and whereas the filter applied by the TPO was 25% of Employee cost in the case of the assessee company.
Axis IT & T Ltd. be excluded from the list of comparable companies for the reason that this company provides software services. The RPT is 43.18% of the operating revenue while a filter of 20% has been applied by the TPO. The TPO wrongly applied the entire revenue of ₹37.16 crores as from software services whereas the fact is that only ₹3.01 crores was from software services and the balance is ₹34.15 crores from engineering design charges.
Zylog Systems (India) Ltd company provides broadband services and wireless internet-based communication services as well as enterprise computing, mobile computing. Employee cost filter of 25% is not met as the assessee’s employee cost percentage is only 20.14%, thus be excluded.
8K Miles Software Services Limited company has purchased the entire business of M/s. Mentor Minds Solutions & Services Inc., a US based company and its subsidiary M/s. Mentor Minds Solutions & Services, Canada. This aspect was not considered and adjudicated upon by the DRP. Hence we direct the AO to exclude this company from the list of comparable companies for the purpose of computation of ALP.
Akshay Software Technologies Limited company has a positive net worth. It is not a loss making enterprise and has reported profits in two of the previous three years i.e. 2008-09, 2009-10 and 2010-11. This Bench of the Tribunal in the case of Nomura Research Institute Financial Technologies India (P) Ltd. [2018 (10) TMI 1816 - ITAT KOLKATA] has directed the inclusion of this company as a comparable company. Consistent with the view taken therein we direct the AO to include this company as a comparable company.
Maveric Systems Limited company is engaged in software development and testing services and it is the only reportable segment. 99% of the operating revenue for the period ending 31.03.2011 was received from software development. Thus we direct the AO to include this company as a comparable company.
Thinksoft Global Services Limited company is a software service provider primarily delivering software validation and verification services to the banking and financial services industry worldwide, thus be included.
Working capital adjustment - DRP has directed the AO/TPO to provide the benefit of WCA to the assessee -HELD THAT:- It is well settled that such directions are binding on the TPO. Hence we direct the TPO to implement the DRP directions in this regard. The assessee shall provide the necessary data to the TPO in this regard. In the result this ground of the assessee is allowed for statistical purposes.
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2019 (11) TMI 1804 - ITAT KOLKATA
Maintainability of appeal before ITAT on low tax effect - monetary limits as revised vide circular F. No. 279/Misc./M-93/2018-ITJ, dt. 20/08/2019 - HELD THAT:- As per the circulars all the revenue appeals filed before the ITAT, having tax effect of less than Rs. 50,00,000/- have to treated as withdrawn.
As relying on case of ITO vs. Dinesh Madhavlal Patel [2019 (8) TMI 752 - ITAT AHMEDABAD] we dismiss this appeal of the revenue as withdrawn.
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2019 (11) TMI 1803 - SUPREME COURT
Extent to which a victim’s counsel can participate in the prosecution of a case - HELD THAT:- In our criminal justice system, the Public Prosecutor occupies a position of great importance. Given that crimes are treated as a wrong against the society as a whole, his role in the administration of justice is crucial, as he is not just a representative of the aggrieved person, but that of the State at large. Though he is appointed by the Government, he is not a servant of the Government or the investigating agency. He is an officer of the Court and his primary duty is to assist the Court in arriving at the truth by putting forth all the relevant material on behalf of the prosecution.
A Public Prosecutor is entrusted with the responsibility of conducting the prosecution of a case. That this is a crucial role is evident from conditions such as in Section 24(7), which stipulates a minimum legal experience of seven years for a person to be eligible to be a Public Prosecutor. It is further clear from a joint reading of Section 301 and the proviso to Section 24(8) that the two provisions are mutually complementary. There is no bar on the victim engaging a private counsel to assist the prosecution, subject to the permission of the Court.
There is no denying that Public Prosecutors are often overworked. In certain places, there may be a single Public Prosecutor conducting trials in over 23 courts. Thus, the possibility of them missing out on certain aspects of the case cannot be ignored or discounted. A victimcentric approach that allows for greater participation of the victim in the conduct of the trial can go a long way in plugging such gaps - the balance inherent in the scheme of the CrPC should not be tampered with, and the prime role accorded to the Public Prosecutor should not be diluted.
The High Court was correct in dismissing the application made by the Appellant seeking permission for her counsel to crossexamine witnesses after the Public Prosecutor. However, in future, if the Sessions Judge finds that the assistance of a private counsel is necessary for the victim, he may permit it - Appeal disposed off.
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2019 (11) TMI 1802 - ITAT DELHI
Salary disallowance u/s 40A(2)(b) - higher salary paid to the seven persons specified as relative - HELD THAT:- CIT(A) examined the qualification and experience of the persons and did not find any justification in respect of salary expenses of Sh. C.L. Mehra and Ms. Lata Rani Mehra following the decision of his predecessor. In respect of Ms. Namita Mehra also be sustained the disallowance.
The Tribunal [2018 (4) TMI 697 - ITAT DELHI] for assessment year 2011-12 upheld the disallowance qualification of the concerned persons and the nature of job/responsibility of each of the persons and accordingly he has come to a conclusion that the salary paid to Aradhana Mehra, Roshni Mehra and Pawan Mehra are justified where the salary paid to remaining persons are not justified. Decided against assessee.
Disallowance of interest u/s 37 r.w.s. 40A(2)(b) - assessee reiterated the arguments which were made before the lower authorities, particularly in relation to the trademark of “Mehrasons” owned by Sh. CL Mehra - HELD THAT:- The Tribunal in assessment year 2011-12 sustained the disallowance [2018 (4) TMI 697 - ITAT DELHI] as it cannot be treated as prudent and expedient for the business purposes.
Disallowance u/s 14A - counsel submitted that no dividend income was earned by the assessee during the year under consideration and, thus, following the decision of Cheminvest Ltd [2015 (9) TMI 238 - DELHI HIGH COURT] disallowance might be deleted - HELD THAT:- We find that the Assessing officer had also noted the fact that no dividend income has been earned by the assessee in the year under consideration. Thus, respectfully following the decision of the Hon’ble Delhi High Court in the case of Cheminvest Ltd (supra) the disallowance made u/s 14A of the Act is deleted.
Appeal of the assessee is partly allowed.
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2019 (11) TMI 1801 - KERALA HIGH COURT
Accrual of income - Taxability of compensation received under an Award - HELD THAT:- Section 96 of the Act 30 of 2013 is clear and unambiguous in its literal meaning and does not require any interpretation by a court of law. The dictum contained in the decision of the High Court of Andhra Pradesh in C. Nanda Kumar [2017 (4) TMI 662 - ANDHRA PRADESH HIGH COURT] is reiterated by the Division Bench of this court in the judgment in Pramod and others [2016 (8) TMI 1185 - KERALA HIGH COURT]. It is held therein that Section 96 of Act 30 of 2013 clearly discloses that no income tax or stamp duty shall be levied on any Award or enhancement made under the said Act, except under Section 46. Hence it is clear that the exemption is provided from levying income-tax and stamp duty. Therefore the assessment of tax made on such compensation received is not sustainable.
In view of the position remaining settled, coupled with the terms of the CBDT Circular No.36/2016, dated 25.10.2016, as well as introduction of the proviso to Section 194 LA in the Income-tax Act, there exists no ambiguity that the compensation received under Act 30 of 2013 is in no manner liable to be taxed under any of the provisions of the Income-tax Act.
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2019 (11) TMI 1800 - ITAT COCHIN
Revision u/s 263 - as per Pr. CIT, the assessee had written off bad and doubtful debts towards NPA and therefore, the assessee is entitled only to the extent bad and doubtful debts actually written off u/s. 36(1)(vii) - HELD THAT:- This contention of the CIT(A) is having no merit since this issue was considered in the case of Vijaya Bank [2010 (4) TMI 46 - SUPREME COURT] After April 1, 1989, a mere provision for bad debt will not be entitled to deduction under section 36(1)(vii). If an assessee debits an amount of doubtful debt to the profit and loss account and credits the assets account like sundry debtors account, that would constitute a write off of an actual debt. However, if an assessee debits provision for doubtful debts to the profit and loss account and makes a corresponding credit to the “current liabilities and provisions” on the liabilities side of the balance-sheet, then it would constitute a provision for doubtful debt. In the latter case, the assessee would not be entitled to deduction after April 1, 1989.
Hence, we find no error in the order of the AO so as to render it prejudicial to the interests of the revenue. Pr. CIT is not justified in invoking the provisions of section 263 on this issue. Hence, we quash the order of the Pr. CIT passed u/s. 263 - Appeal of the assessee is allowed.
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2019 (11) TMI 1799 - ITAT CHENNAI
Deduction U/s.80IC - Claim denied as factory established at Rudrapur did not carry out any manufacturing - HELD THAT:- Lower authorities have not properly examined the issues viz., whether the product sold at Rudrapur were subjected to manufacturing activity or not, independent of the audit report from the Central Excise. Therefore, we deem it fit to remit all these issues back to the AO for a fresh examination for the impugned assessment years. The assessee shall lay all materials in support of its contention before the Assessing Officer and comply with the requirements of the AO in accordance with law.
AO shall also furnish the copy of Remand Report and its annexures to the assessee and consider the assessee’s submissions on them and on due examination, shall pass appropriate orders for the impugned assessment years, in accordance with law.
Disallowance u/s.14A - AO found that the assessee earned substantial dividend income and made investments in equity shares and mutual funds - AR submitted that the assessee made investments out of capital and reserves, representing interest free funds and not out of borrowed funds. The exempted income was earned out of the investments made long before - HELD THAT:- We deem it fit to remit this issue back to the AO for a fresh examination. The assessee shall lay all materials in support of its contention before the Assessing Officer and comply with the requirements of the AO in accordance with law. The Assessing Officer is also free to conduct appropriate enquiry as deemed fit, however, he shall furnish due opportunity to the assessee on the materials etc., to be used against the assessee.
Additional depreciation on electrical installation - AO held that additional depreciation is allowed in respect of new machinery or plant which has been acquired and installed in the business of manufacture of production - assessee pleaded that air circulators installed in the factory on which the additional depreciation was not allowed, it constitutes plant and machinery and thus eligible for depreciation allowed for plant and machinery - HELD THAT:- We find that this issue has not been examined with reference to the facts and circumstances, while the assessee pleads that the impugned asset is air circulator and it is a plant & machinery, without any discussion on this issue, the assessee’s claim is considered as electrical installation. Therefore, we remit this issue back to the AO for a fresh examination and due decision.
Weighted deduction U/s.35(2AB) on the R&D expenditure incurred - HELD THAT:- DR correctly said deduction claimed by the assessee is a statutory deduction which can be allowed by the AO only to the extent it is approved by the prescribed authority U/s.35(2AB). AO has allowed the claim to the extent the prescribed authority, the DSIR allowed. Therefore, he pleaded that the orders of lower authorities be confirmed.
Depreciation @ 80% on the UPS - Additional depreciation at the rate of 20% for the additions made during the year - CIT(A) held that UPS cannot be considered to be an integral part of computer, since it is neither an input device nor an output device of a computer - UPS has other uses independent of a computer since it can be used in conjunction with other electrical devices like refrigerators, television sets, etc., and hence, confirmed the rate of depreciation at the rate of 15% as against the assessee’s claim at the rate of 80% - HELD THAT:- Since, the lower authorities have not recorded as to where and how the impugned UPS was claimed to have been used and has not recorded any finding as to how the claim was different from the impugned ITAT order relied on by the assessee, we deem it fit to remit this issue back for a fresh examination and pass due order, in accordance with law, after affording opportunity to the assessee.
Leave salary U/s.43B r.w.s.35(2AB) - CIT(A) held that this issue was decided against the assessee based on the Hon’ble Supreme Court’s decision [2022 (10) TMI 617 - SUPREME COURT] but allowed the assessee’s alternate plea that the amount provided is not allowed as deduction atleast the actual amount paid before the due date for filing the return for the assessment year should be allowed as deduction.The corresponding ground of the assessee is dismissed.
TDS u/s 195 - payments made for logistics ton non-resident entity for rendering managerial services outside India without tax deduction at source - HELD THAT:- The profits of the services rendered outside India cannot be taxed in India unless the non-resident has permanent establishment/or business connection in India as envisaged in Sec.9(1) - CIT(A) deleted the addition relying on the decision of the Hon'ble Apex Court in the case of GE Technological Centre Pvt. Ltd. [2010 (9) TMI 7 - SUPREME COURT] - Decided against revenue.
Deduction as loss from cancellation of forward contracts - AO observed that this expenditure was incurred not for business of the appellant company but only to hedge against the currency fluctuation and therefore not allowable u/s 37 - HELD THAT:- The assessee has entered into forward contract for hedging purposes against the underlying receivables (exports) and payables (imports) transactions in foreign currencies. As rightly explained by the assessee derivative products are intangible and are not capable of delivery or transfer. It was also explained that forex derivatives are not traded on security markets and therefore has no application of Sec.43(5).
The assessee has entered into forward contracts for the purpose of its business and there was no dispute on this issue. As on the closing date, the foreign exchange was restated which resulted into loss and the assessee relied on Woodward Governor of India Ltd. [2009 (4) TMI 4 - SUPREME COURT] wherein it was held that the loss incurred on account of restatement of foreign exchange as on the Balance sheet date is a business loss. - Decided against revenue.
MAT - Disallowance of 14A while computing Book Profit - HELD THAT:- AO is not prohibited for making disallowance U/s.14A. However, the Special Bench in Vireet Investments Pvt. Ltd [2017 (6) TMI 1124 - ITAT DELHI] held that the Assessing Officer can make disallowance without resorting to explanation to 14A r.w.r.8D. Therefore, this issue is remitted back to the Assessing Officer for making appropriate disallowance U/s.14A U/s.115JB. The corresponding ground raised by the Revenue is treated as partly allowed.
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2019 (11) TMI 1798 - MADRAS HIGH COURT
Prolonged suspension - exercise of discretion - reliance placed upon ratio of the judgment in the case of AJAY KUMAR CHOUDHARY VERSUS UNION OF INDIA THROUGH ITS SECRETARY & ANR. [2015 (6) TMI 592 - SUPREME COURT] - HELD THAT:- The impact on the moral fibre of the society and the faith of the people should not be diluted on account of any occasional instances of misconduct. At the same time, officers should be guarded against ungenerous and unfavourable criticism on the basis of any invented tales, but their conduct should not be open to any genuine suspicion. The charges levelled against the respondent/writ petitioner in the present case can be assessed either way on the basis of the evidence that may be collected during the disciplinary proceedings or even during the criminal trial. This Court, therefore, should be cautious enough to take care while passing an order of reinstatement about the gravity of the allegations and the possibility of the delinquent in either trying to influence or delay the proceedings and gain advantage only by a sheer passage of time. The concept of human rights and protection of Article 21 should not altogether eclipse the circumstances of a case, where serious graft charges are pending adjudication.
It would be appropriate that in such cases and on peculiar facts, it would be expedient and in the interest of justice to ensure that public faith and confidence is not diluted and consequently, we modify the order of the learned Single Judge directing posting of the respondent/writ petitioner against a non-sensitive post to the extent that he shall be treated to be on leave with salary for a period of three months from today. The appellant State will be bound to conclude the enquiry proceedings and the respondent/writ petitioner will be bound to co-operate with the same in order to bring the disciplinary proceedings to a logical conclusion.
Appeal allowed.
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2019 (11) TMI 1797 - ITAT KOLKATA
Revision u/s 263 - determination of short term capital gains - as per CIT AO’s re-assessment in issue failed to take note of the assessee’s STCG as per law - HELD THAT:- CIT conclusion deserves to be examined afresh rendering the earlier assessment / re-assessment erroneous causing prejudice to interest of the Revenue. There is no rebuttal to all these clinching facts from the assessee’s side. We therefore uphold the CIT’s assumption of revision jurisdiction under challenge. Assessee appeal dismissed.
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2019 (11) TMI 1796 - MADHYA PRADESH HIGH COURT
Blacklisting of a commercial Firm - petitioner has been debarred for a period of one year from participating directly or indirectly in any work with the MP PWD with immediate effect - HELD THAT:- The blacklisting of a commercial Firm has serious civil consequences and at the same time it affects the reputation of the Firm. In such a situation, the State is expected to proceed with care and responsibility before blacklisting any Firm, as it is a drastic step to be taken against a person. Still further, it is the basic principle of natural justice that the parties who are adversely affected by an order, should have a right of being heard against the same.
The Apex Court in the case of CANARA BANK VERSUS VK. AWASTHY [2005 (3) TMI 476 - SUPREME COURT], has held that the natural justice is another name of common sense justice. The Rules of natural justice are not codified canons. But they are principles ingrained into the conscience of man. The expressions 'natural justice' and 'legal justice' do not present a watertight classification. It is the substance of justice which is to be secured by both, and whenever legal justice fails to achieve this solemn purpose, natural justice is called in aid of legal justice.
This aspect of the matter has also been considered by the Supreme Court in the case of KRANTI ASSOCIATES PVT. LTD. VERSUS MASOOD AHMED KHAN [2010 (9) TMI 886 - SUPREME COURT] wherein it is laid down that judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially. It is further held that insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done, it must also appear to be done as well.
Apparently, in the present case, no show cause notice was issued to the petitioner with regard to blacklisting in respect of which the impugned order has been passed. Further, it does not satisfy the test of being a reasoned speaking order.
The present petition is allowed.
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2019 (11) TMI 1795 - ITAT CHENNAI
Capital gain - valuation of the fair market value of the impugned property - appeal of the learned CIT(A) was adjourned on multiple occasions at the instance of the Chartered Accountant for want of valuation report of the DVO - HELD THAT:- The perusal of the order of CIT(A) shows that in para – 6, CIT(A) has recorded multiple opportunities, wherein it is alleged that the assessee has sought adjournment. Revenue is not able to produce any record to show that the DVO’s report called for u/s. 50(C)(2) has been produced.
Without the said valuation report, admittedly the hearing of the assessee’s appeal would be in futility. This being so, in the interest of justice, the issue in the appeals are restored to the file of the learned CIT(A) for re-adjudication after receipt of the valuation report by the DVO u/s. 50(C)(2) of the Act. Appeals filed by the assessees are partly allowed for statistical purposes.
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2019 (11) TMI 1794 - CESTAT KOLKATA
Seeking withdrawal of appeal in terms of litigation policy vide Board’s instruction being F.No.390/Misc./116/2017-JC dated 22.08.2019 - HELD THAT:- The prayer of the Revenue is allowed and the appeal is dismissed as withdrawn under National Litigation Policy. Misc. Application for withdrawal of appeal stands disposed off.
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2019 (11) TMI 1793 - DELHI HIGH COURT
Chargeability of stamp duty on the instrument of Deed of release - section 147 of the DMC Act, 1957 - HELD THAT:- Under Section 147 of the DMC Act the documents on which transfer duty can be levied are documents relating to sale of immovable property, exchange of immovable property, gift of immovable property, mortgage of immovable property, lease in perpetuity of immovable property and contract for transfer of immovable property. On a strict interpretation of the said statutory provisions, it is clear that a release deed is not mentioned in the said provisions. Hence, the stand of the respondent treating a release deed as a gift deed and holding that transfer duty has to be charged on the release deed/relinquishment deed is misplaced. A gift deed is distinct and cannot be confused with a release deed.
The distinction between a release deed and gift deed was noted by the Supreme Court in the case of Kuppuswami Chettiar vs. S.P.A. Arumugam Chettiar & Anr., [1966 (9) TMI 152 - SUPREME COURT] where the court held that Here, the deed was in favour of a person having no interest in the property, and it could not take effect as an enlargement of an existing estate. It was intended to be and was a transfer of ownership. A deed called a deed of release can, by using words of sufficient amplitude, transfer title to one having no title before the transfer. The cases relied upon by counsel are not authorities for the proposition that the operative words of a release deed must be ignored.
Accordingly, a writ of mandamus is issued to the respondent to carry out the mutation in favour of the petitioner for the property in question without payment of any transfer duty under Section 147 of the DMC Act, 1957.
Petition allowed.
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2019 (11) TMI 1792 - KARNATAKA HIGH COURT
Seeking direction to respondents not to insist for license under the Police Act or under the provisions of Licensing and Controlling of Places of Public Amusement order to not to interfere in the play of skill oriented games - HELD THAT:- The present writ petition is disposed off with the following directions:-
(i) The petitioner shall install within a period of six weeks, CC TV cameras, at all the places of access to its members and also at all the places, wherein game/s is/are played by the members. The CC TV footage of atleast prior 15 days’ period shall be made available by the petitioner, to the police, as and when called upon to do so.
(ii) The petitioner shall issue identity card(s) to all its member(s), which shall be produced by the member(s), when called upon by the police, during the raid(s) and surveillance etc.
(iii) The petitioner shall not allow any nonmember (s) or the guest(s) of the member(s), to make use of its premises for the purpose of playing any kind of game(s) or recreational activities.
(iv) The petitioner shall not permit any activity by any of its member(s), by indulging in acts of amusement, falling within the definition of Ss.2 (14) & 2 (15) of the Act and shall not permit any game(s) of chance as per Explanation (II) of Sub-section (7) of Section 2 of Karnataka Police Act, 1963. The member(s) shall not be allowed to play any kind of game(s) with stakes or make any profit or gain out of the game(s) played.
(v) The petitioner shall put proper mechanism in place and shall ensure that no game(s) is played in any unlawful manner by the member(s). If the police find that any of the game/s played is/are contrary to any law and in violation of the settled practice, it is open for them to take action against petitioner and the offenders, in accordance with law.
(vi) The jurisdictional police shall have liberty to visit premises periodically and/or on receipt of any information about any unlawful activity being carried on in the petitioner’s premises.
(vii) The respondents are directed not to interfere with the lawful recreational activities carried on by the members of the petitioner – Club/Association.
(viii) It is made clear that this order would not come in the way of the jurisdictional police invoking the provisions of the Act and taking action in accordance with law, if the member(s) of the petitioner are found to have indulged in any unlawful or immoral activities.
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2019 (11) TMI 1791 - ITAT BANGALORE
Deduction u/s 80P(2)(a)(i) in respect of interest income earned - AO has denied the claim of the assessee that the interest income earned with investment of surplus funds, hence has to be assessed under ‘income from other sources’ and not under ‘business’ - HELD THAT:- As decided in case of The Jayanagar Co-operative Society Ltd [2019 (7) TMI 1219 - ITAT BANGALORE] claim of the Assessee was that Co-operative Bank is essentially a Co-operative Society and therefore deduction has to be allowed under Clause (d) of Sec.80P(2) of the Act. The Hon'ble Karnataka High Court [2008 (9) TMI 493 - KARNATAKA HIGH COURT] followed the decision of the supreme Court in The Totgars Co-operative Sales Society Ltd. [2010 (2) TMI 3 - SUPREME COURT] and held that interest earned from Schedule bank or cooperative bank is assessable under the head income from other sources and therefore the provisions of Sec.80P(2)(d)of the Act was not applicable to such interest income.
The source of funds out of which investments were made remained the same in AY 2007-08 to 2011-12 and in AY 1991- 92 to 1999-2000 decided by the Hon'ble Supreme Court. Therefore whether the source of funds were Assessee's own funds or out of liability was not subject matter of the decision of the Hon'ble Karnataka High Court in the decision cited by the learned DR.
To this extent the decision of the Hon'ble Karnataka High Court in the case of Tumukur Merchants Souharda Co-operative Ltd [2015 (2) TMI 995 - KARNATAKA HIGH COURT] still holds good. Hence, on this aspect, the issue should be restored back to the AO for a fresh decision after examining the facts in the light of these judgment of the Hon'ble Apex Court rendered in the case of The Totgars Co-operative Sale Society Ltd. (supra) and of Hon'ble Karnataka high Court rendered in the case of Tumukur Merchants Souharda Co-operative Ltd. (supra).
We follow the judicial precedence and restore the disputed issue to the file of the AO for fresh decision in light of the judicial decisions above. Appeal of the assessee is allowed for statistical purposes.
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2019 (11) TMI 1790 - ITAT HYDERABAD
Revision u/s 263 by CIT - amount has been erroneously allowed as agricultural income by the Ld. AO which is exempt from the Act u/s. 10(1) because the Ld. Pr. CIT was of the view that the assessee company had departed from the basic agricultural operations and had indulged in production of parent seeds - HELD THAT:- We find merit in the submissions of the ld. AR. From the facts of the case, it is apparent that the Tribunal [2019 (2) TMI 49 - ITAT HYDERABAD] had quashed the order of the Pr. CIT passed u/s. 263 of the Act. Therefore, the order passed by the Ld. AO U/s. 143(3) r.w.s 263 of the Act does not survive. Accordingly, the Ld. CIT (A) had allowed the appeal of the assessee and restored the order of the ld. AO dated 30/3/2015. In this situation, we do not find any infirmity in the order passed by the Ld. CIT (A). Hence the appeal of the Revenue does not survive.
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2019 (11) TMI 1789 - DELHI HIGH COURT
Benami transaction - suit, claim or action to enforce any right in respect of any property held benami against the person - Suit for partition filed by the respondent (now deceased) and represented by the present respondents as the legal heirs - As contented since the properties were in the name of the petitioners, no Suit for partition could lie and Suit is barred under Section 4 of the Benami Transactions (Prohibition) Act, 1988 as there was neither a Hindu undivided family nor HUF funds.
HELD THAT:- Respondent/Plaintiff had failed to even make an averment, leave alone prima facie substantiating, that there was any HUF ever created or in existence or continued and the properties subject matter of the Suit were purchased out of such HUF funds.
From the bare reading of the plaint, it is apparent that the claim set up in the plaint is barred by Section 4 sub-section (1) of the Benami Transactions (Prohibition) Act, 1988.
Trial court has erred in dismissing the application under Order 7 Rule 11 CPC solely on the ground that an issue has been framed and it would be a matter of trial as to whether the property is individual property or has been purchased by the joint family funds.
Since there is no averment that there was any Hindu Undivided Family in existence and the properties were purchased out of Hindu Undivided Family, no evidence can be permitted to be led by the Plaintiffs on the said aspect. In the absence of pleadings to the said effect, no evidence can be led.
An application filed by the Respondents/plaintiff under Order 6 Rule 17 CPC to specifically plead existence of Hindu Undivided Family was rejected by the Trial Court by order dated 22.09.2017 and no appeal was filed impugning the order dismissing the application for amendment.
Suit appears from the statement in the Plaint to be barred by the Benami Transactions (Prohibition) Act, 1988.
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