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Showing 61 to 80 of 1441 Records
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2022 (2) TMI 1382 - ITAT DELHI
Disallowance u/s. 14A - assessee earned dividend income which was claimed as exempt u/s. 10 (34) / 10 (35) - Suo moto disallowance made by assessee - HELD THAT:- This Tribunal in A.Y. 2010-11 [2022 (7) TMI 374 - ITAT DLEHI] has considered a similar disallowance as held for the purpose of computing the disallowance u/s. 14A of the Act only such investments which yielded exempt income during the year should be taken into consideration, but not the entire investment.
Going by that principle, we find that during the year, the investment in Karnataka Bank Ltd. alone yielded dividend income. Tribunal accepted the contention of the assessee as far as the investment in shares of Karnataka Bank Ltd. was concerned. It is, therefore, clear that no disallowance could be made towards interest expense u/r. 8D(2)(ii) of the rules.
Disallowance of SAR expenses written back in the current year - HELD THAT:- As decided in [2020 (9) TMI 141 - ITAT DELHI] the issue-in-dispute of SAR expenses as revenue in nature is covered in favour of the assessee. Respectfully following the above decisions, we set aside the order of the learned CIT(A) and delete the addition.
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2022 (2) TMI 1381 - MADRAS HIGH COURT
Dishonour of Cheque - successive presentation of the cheque within the period permitted, when the cheque was earlier returned for the reason "account closed" is legally permissible? - HELD THAT:- While dealing with the cheque returned on the ground that the "account closed", it was observed NEPC MICON LTD. VERSUS MAGMA LEASING LTD. [1999 (4) TMI 659 - SUPREME COURT] that "account is closed" would mean that the cheque is returned as unpaid on the ground that "the amount of money standing to the credit of that account is insufficient to honour the cheque". It is observed in M/S LAXMI DYECHEM VERSUS STATE OF GUJARAT & ORS. [2012 (12) TMI 106 - SUPREME COURT] that the reasons for dishonour of cheque "as account closed", "payment stopped", "referred to drawer" are only species of the genus that the amount of money available in the account is insufficient. Therefore, these grounds for return would constitute a dishonour within the meaning of Section 138 of the Act.
It is no doubt, a cheque may be presented second time. Validity of second presentation depends on facts and circumstances of the case. The judgment in MSR Leathers V.S. Palaniappan and another [2012 (10) TMI 232 - SUPREME COURT] deals with the case where the cheque was returned for the reason "not arranged funds for". We have the case where the cheque was returned for the reason "account closed". The aforesaid judgments relied by the counsel appearing for the respondent do not deal with the situation where a cheque was presented again, when the earlier presentation was dishonoured on the ground "account closed".
In the case before hand, the first presentation of cheque and return on the ground of "account closed" was not even mentioned in the statutory notice and the complaint and it was not informed to the petitioner and petitioner had never asked the respondent to represent the cheque again.
In the case before hand the cheque was returned for the reason that "account closed" on 03.02.2016 when it was presented for the first time on 02.02.2016. Suppressing this return, cheque was presented again on 28.03.2016 and it was again returned for the same reason "account closed". It is palpably clear that second presentation was made only to bring the case within a period of limitation. There is no logic or reason for representing the cheque again, when the cheque was returned for the reason "account closed". Once account is closed, there is no question of re-opening the account to facilitate payment in the same account. It is quite obvious that the respondent having failed to issue a statutory notice within stipulated period after the first return, again presented the cheque to save the limitation. This Court finds that this case is barred by limitation and cannot be maintained.
Petition allowed.
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2022 (2) TMI 1380 - RAJASTHAN HIGH COURT
Rejection of Rebate Claim - rejection on the ground that the petitioner had availed higher rate of drawback for the export which is available only when Cenvat facility has not been availed - petitioner failed to establish that it satisfied the condition No.15 of the notification No.92/2012 dated 04.10.2012 - HELD THAT:- Perusal of Rule 18 would show that such rebate would be granted by the Central Government by issuing notification on the duty paid on excisable goods or duty paid on materials used in manufacture or processing of such goods and the rebate shall be subject to such conditions or limitations and fulfillment of such procedure as may be specified in the notification. As per this rule thus, upon export, an exporter is entitled to claim rebate on the duty paid on export goods as well as on materials used in manufacture or processing of such goods. This would of-course be subject to fulfillment of the conditions as may be prescribed.
If no duty is paid, the claim would not fall in Rule 18 at all. When the petitioner, through its drawback claims, claimed the refund of excise duty which was granted also, Rule 18 would have no applicability.
The Supreme Court in the case of M/s Spentex Industries Ltd. [2015 (10) TMI 774 - SUPREME COURT] referring to the scheme of granting rebate under Rule 18 and facilities for export of goods without payment of duty under Rules 19 of the Central Excise Rules, 2002 held that the rebate of duty paid by them on inputs as well as final product was available - This judgment thus rests on totally different facts. In fact a reversed anomaly would arise if the claim of the petitioner is accepted. If an exporter exercises option under Rule 19, he could export the goods without payment of duty. He would thereupon not be entitled to claim duty drawback on such component. On the other hand an exporter, who opts for the rebate of duty under Rule 18 is allowed the rebate after claiming drawback as well, there would be double benefit and a clear case of anomaly. In this context, the question as to from which source of Cenvat credit the duty was paid, becomes redundant.
The Assistant Commissioner has proceeded on the basis that the petitioner, for the purpose of claiming drawback, had made a false declaration. If these observations are allowed to stand, as correctly pointed out by the learned counsel for the petitioner the drawback claims which are closed, would be under jeopardy. It is clarified that the department as well as this Court have proceeded on the basis that the petitioner having claimed and received the drawback of excise duty, could not thereafter claim rebate of the same component of duty.
Petition dismissed.
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2022 (2) TMI 1379 - GUJARAT HIGH COURT
Seeking grant of Regular Bail - offence punishable under Sections 132(1)(c) of the Gujarat Goods and Services Tax Act, 2017 and Central Goods and Service Tax Act, 2017 - evidences not discussed in detail - principles of natural justice - HELD THAT:- Considering the nature of the allegations made against the applicant in the First Information Report, without discussing the evidence in detail, prima facie, this Court is of the opinion that this is a fit case to exercise the discretion and enlarge the applicant on regular bail.
Without discussing the evidence in detail, this Court, prima facie, is of the opinion that, this is a fit case to exercise the discretion and enlarge the applicant on regular bail. Hence, present application is allowed and the applicant is ordered to be released on regular bail subject to the conditions imposed - bail application allowed.
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2022 (2) TMI 1378 - ITAT CHENNAI
Unexplained investment in loans u/s 69B - Addition based on loose unsigned and undated computer sheets - HELD THAT:- AO was obligated to establish that the notings revealed either unaccounted income or unaccounted investment or unaccounted expenditure of the assessee. Additions could not be made simply on the basis of loose unsigned and undated computer sheets. These sheets were to be considered in the nature of ‘dumb document’ having no evidentiary value and could not be taken as the sole basis for determination of undisclosed income of the assessee. No fact-based finding has been rendered by Ld. AO that such transactions gave rise to the income in the hands of the assessee.
It is trite law that in case of search proceedings, the additions are to be based solely on the basis of incriminating material found during the course of search operations. Guess work or estimation or extrapolation of income is not permissible unless there are strong evidences to suggest otherwise. The additions are to be based solely on tangible material and not on the basis of estimations or extrapolation theory.
Book’ ordinarily mean a collection of sheet or papers or other material, blank or written or printed, fastened or bounded together so as to form a material as a whole. Loose sheets are scraps of papers cannot be termed as books for they can easily be detached and replaced. Therefore, these are not admissible evidences. The impugned addition of unexplained investment in loans u/s 69B is not sustainable - grounds thus raised by the assessee allowed.
Addition u/s 69A - unexplained money representing cash seized from the assessee - HELD THAT:- This addition would also stand deleted since it is undisputed fact that the partners of the firm have introduced capital of Rs. 130 Lacs during the year. This credit of the same was already allowed by Ld. AO while computing addition u/s 69B. Therefore, consequent to deletion of addition u/s 69B, this addition would stand deleted.
Addition of undisclosed interest and undisclosed commission income - HELD THAT:- Upon perusal of orders of lower authorities, we find that these additions are merely extrapolated additions by taking average of such income earned in other months. However, there is no incriminating material which would show that both the income was earned by the assessee. These are not supported by any incriminating material found during the course of search operations and merely based on the assumption that the assessee would have earned such income. This being so these additions are not sustainable in the eyes of law. We allow the appeal for AY 2011-12.
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2022 (2) TMI 1377 - ITAT CHENNAI
Validity of assessment u/s.143(3) r.w.s. 144C against non-existent company - HELD THAT:- We noted that in the case of M/s. Maruti Suzuki Ltd. [2019 (7) TMI 1449 - SUPREME COURT] as noted the fact that the draft assessment order and the final assessment order contained the name of both amalgamated and amalgamating companies but despite the fact both name existed, the Hon’ble Supreme Court held that the assessment framed is on non-existent company and in view of the above fact that the assessment is framed on a non-existent company - Even the provisions of section 292B of the Act does not help the Revenue as it is not a curable defect.
Thus issue is squarely covered by the decision of Hon’ble Supreme Court in the case of M/s. Maruti Suzuki Ltd., supra, we quash the assessment and allow the appeal of assessee.
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2022 (2) TMI 1376 - ITAT LUCKNOW
Bogus LTCG - Penny Stocks transactions - share transactions - organized scam/tax evasion activity - HELD THAT:- As the issue involved in the present appeal is duly covered in favour of the assessee in the case of Smt. Renu Agarwal [2022 (1) TMI 1037 - ITAT LUCKNOW] deficient enquiry conducted by the AO and the lack of any independent source or evidence to show that there was an agreement between the Respondent and any other party, prevailed upon the ITAT to take a different view. Before us, DR has not been able to point out any evidence whatsoever to allege that money changed hands between the Respondent and the broker or any other person, or further that some person provided the entry to convert unaccounted money for getting benefit of LTCG, as alleged. In the absence of any such material that could support the case put forth by the Appellant, the additions cannot be sustained.
Thus no infirmity in the order of learned CIT(A) as in this case also the necessary evidences were duly filed before Assessing Officer. This fact of having filed the necessary evidences before the Assessing Officer are coming out from the findings of learned CIT(A). In his findings the learned CIT(A) has also noted that the Assessing Officer had not carried out any independent verification and moreover, the broker through whom assessee entered into transactions was also not examined. Decided against revenue.
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2022 (2) TMI 1375 - SC ORDER
Penalty u/s. 271(1)(c) - non-disclosure of the capital gains, in the required column in the income tax report, for the relevant financial year - non disclosure of sale the lands and windmill - as decided by HC assessee did not act bonafidely and the belated explanation sought to be offered deserves to be rejected - HELD THAT:- We do not want to interfere with the impugned judgment and order passed by the High Court in exercise of powers under Article 136 of the Constitution of India. Hence, the Special Leave petitions stand dismissed.
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2022 (2) TMI 1374 - BOMBAY HIGH COURT
Re-opening of assessment u/s 148 - Reasons to believe - HELD THAT:- The reasons does not disclose anything that could be remotely termed “reasons to believe income has escaped assessment.”
First of all, it does not explain what reversal trade in BSE means. Secondly, it does not even state on which scrip there has been any reversal trade in BSE that can be termed escapement of assessment and thirdly, how could it be even linked to petitioner. Even in the affidavit in reply, it is simply stated “I say that the Department was having information that petitioner had made reversal trade involved in reversal trade. This is the new information received by respondent no.1 - Decided in favour of assessee.
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2022 (2) TMI 1373 - CUSTOMS AUTHORITY FOR ADVANCE RULINGS, MUMBAI
Classification of goods proposed to be imported - Creative Touchy-series Interactive Flat Panel (IFP) (Model - 5652RK, 5752 RK &5852RK) - classifiable under customs tariff entry 84 714190 or not - whether the impugned goods, 'namely Creative Touch 5-series Interactive Flat Panel' can be considered as ADP machines?
HELD THAT:- The machines which operate only on fixed programs, i.e., programs which cannot be modified by the user, are excluded even though the user may be able to choose between a number of such fixed programs. The digital data processing machines have storage capability and also stored programs which can be changed from job to job. Digital machines process data in coded form. A code consists of a finite set of characters (binary code, standard six-bit ISO code, etc.). The data input is usually automatic, by the use of data media such as magnetic tapes, or by direct reading of original documents, etc. There may also be arrangements for manual input by means of keyboards or the input may be furnished directly by certain instruments (e.g., measuring instruments). The input data are converted by the input units into signals which can be used by the machine, and stored in the storage units. Part of the data and program or programs may be temporarily stored in auxiliary storage units such as those using magnetic discs, magnetic tapes, etc.
Open source information as well as the submissions of the applicant portrays the subject item as an AIO which is a fully functional ADP machine that operates without restrictions. The A10 is equipped with hardware and software that allow it to perform, without artificial constraints, general computing tasks, where users are free to add or remove applications of their choosing.
Creative Touch 5-series Interactive Flat Panel (IFP) merit classification under sub heading 84714190 of the first schedule to the Customs Tariff Act, 1975.
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2022 (2) TMI 1372 - BOMBAY HIGH COURT
Appointment of Chairpersons of the Debts Recovery Appellate Tribunals all over the country - HELD THAT:- Justice Ashok Menon, former Judge of the High Court of Kerala, has been appointed as a Chairperson of the Debts Recovery Appellate Tribunal, Mumbai (DRAT(M)). In view of such an appointment, we do not propose to keep these writ petitions pending. The parties shall be at liberty to approach DRAT(M) for appropriate reliefs. Interim orders, if any, passed on these writ petitions shall, however, continue to operate for a period of three weeks from the date of assumption of charge of office by the Chairperson of the DRAT(M).
The writ petitions are disposed of.
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2022 (2) TMI 1371 - KERALA HIGH COURT
Levy of penalty under section 25(AA) of KVAT Act - consequent proceedings - proceedings imposing penalty have already been challenged before this court and the subject-matter of pending proceedings - HELD THAT:- On a perusal of the assessment order it is evident that the assessee had refused to avail the opportunity of personal hearing granted on November 29, 2021. It is also noticed that the proposal for assessment was based upon the unaccounted sales for the year 2015-16, which was brought to the notice of the assessee. The procedure adopted by the assessing officer shows that the officer had complied with the principles of natural justice. The pendency of writ petition as W. P. (C) No. 28713/2017 and the interim order of stay dated August 30, 2017 are confined to the penalty proceedings.
As rightly observed by the assessing officer, the stay granted in W. P. (C) No. 28713/2017 is only against the recovery proceedings to realize the penalty imposed in the order under challenge in that writ petition. There was no restraint in the assessment proceedings initiated under section 25AA of the Act.
There was no irregularity or absence of jurisdiction for the assessing officer to proceed to assess the petitioner - no jurisdictional error is caused in issuing the impugned order warranting an interference under article 226 of the Constitution of India - petition dismissed.
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2022 (2) TMI 1370 - PUNJAB AND HARYANA HIGH COURT
Seeking grant of bail - medical grounds - petitioner submits that the petitioner needs urgent medical care - HELD THAT:- Mr. Satya Pal Jain, Additional Solicitor General of India, assisted by Mr. Arvind Moudgil, Advocate, accepts notice on behalf of respondent No. 1- Directorate of Enforcement and seeks some time to file the reply - Adjourned to 24.02.2022.
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2022 (2) TMI 1369 - CALCUTTA HIGH COURT
Validity of SCN - SCN issued without granting or considering the prayer for adjournment to the hearing fixed by the respondent concerned on its notice of pre-show- cause notice consultation as per Circular No. 1076/02/2020 CX dated November 19, 2020 issued by the Central Board of Indirect Taxes and Customs - high pitch assessment involving demand above Rs. 50 lakhs - HELD THAT:- This writ petition, being W. P. A. No. 17451 of 2021 is disposed of by setting aside the impugned show- cause-cum-demand notice dated October 11, 2021 and the respondents concerned are directed to issue a fresh notice of hearing for pre-show- cause-notice consultation within ten days from date and to take a decision on the same in accordance with law and in case of failure of the petitioner to attend the hearing on the date so fixed by the respondents concerned, the respondents concerned shall be entitled to pass ex parte order and to take any further action in accordance with law.
It is clarified that this court has not gone into the merits of the impugned show-cause-cum-demand notice dated November 11, 2021 and the impugned show-cause-cum-demand notice is set aside only on the ground of violation of principle of natural justice and violation of the paragraph 4 of the aforesaid circular of the Board dated November 19, 2020 in dealing with pre-show-cause-consultation notice dated October 5, 2021.
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2022 (2) TMI 1368 - KARNATAKA HIGH COURT
Betting/Gambling - wager on a horse-race - constitutional validity of the Karnataka Act No. 28 of 2021 (amendment act) - it is contended that the cumulative effect of these amendments, according to them, is the criminalization of playing or facilitating online games - Violation of Article 21 since playing games & sports falls within the umbrella of 'right to life & liberty' - Violation of fundamental right to freedom of speech & expression guaranteed under Article 19(1)(a) since playing games & sports of skill is a facet of speech & expression and that criminalizing apart from amounting to unreasonable restriction, is incompetent under Article 19(2) - Violation of fundamental right to profession/business guaranteed under Article 19(1)(g) read with Article 301 - Manifest arbitrariness since the Amendment Act fails to recognize the blatant normative difference between a 'game of skill' and a game of chance - excessive paternalism & populism.
Constituent Assembly debates on Betting & gambling - HELD THAT:- Part III of our Constitution outlaws untouchability (Article 17), human trafficking and begar (Article 23), child employment (Article 24). Part IV enacts Directive Principles of State Policy which Dr. Ambedkar called as the 'instrument of instructions'. It specifies a list of do's & don'ts that address the making of government policies. Article 47 directs prohibition of liquors & injurious drugs - there is no such prohibition expressly or impliedly suggested in respect of gambling although power to legislate concerning the same avails to the State vide Entry 34, List II, Schedule VII of the Constitution.
As to legislative competence and wider interpretation of legislative entries - HELD THAT:- It has long been settled that the legislative power emanates inter alia from Articles 245 & 246 (now additionally Article 246A) of the Constitution and that the Legislative Entries are only the fields of law making. These Entries are mere legislative heads of enabling character designed to define and delimit the respective areas of legislative competence of the Union and the States. The legislative Entries in whichever List they occur should be interpreted with the 'widest amplitude' - When a word or an expression acquires a special connotation in law, it can be safely assumed that the legislature has used such word or expression in its legal sense as distinguished from its common parlance or the dictionary meaning. These legal concepts employed in a Constitution if construed by the Courts as such, acquire the constitutional spirit. Further when such terms are construed by the Apex Court to mean a particular thing, other Courts cannot venture to interpret the same to mean something else. What we are construing is a constitutional concept, i.e., 'Betting & gambling' and not just two English words. Learned Advocate General's argument of 'widest amplitude' therefore cannot stretch the contours of a constitutional concept like this to the point of diluting its identity.
Scope of Entry 34 in State List; CHAMARBAUGWALA Jurisprudence (STATE OF BOMBAY VERSUS RMD. CHAMARBAUGWALA & ANR. ADVOCATE-GENERAL OF MYSORE [1957 (4) TMI 55 - SUPREME COURT]) - Games of Skill vs. Games of Chance - HELD THAT:- The two words namely "Betting" and "gambling" as employed in Entry 34, List II have to be read conjunctively to mean only betting on gambling activities that fall within the legislative competence of the State. To put it in a different way, the word "betting" employed in this Entry takes its colour from the companion word "gambling". Thus, it is betting in relation to gambling as distinguished from betting that does not depend on skill that can be regulated by State legislation; the expression "gambling" by its very nature excludes skill. It is chance that pervasively animates it. This interpretation of the said Entry gains support from the six decade old CHAMARBAUGWALA jurisprudence.
View of Foreign Jurisdictions about games of skill - HELD THAT:- In UNITED STATES OF AMERICA vs. LAWRENCE DICRISTINA, the Second US Circuit of Appeal, New York, tossed out the conviction and vacated the indictment of Mr. Lawrence who ran the warehouse wherein the poker game Texas Hold' Em was played. He was taking 5 % of each nights earning to cover the cost of his staff & profit for himself. In this game, the pot went not to the luckiest among the participants, but to the most deft i.e., the player who could guess his opponents' intentions and disguise his own, make calculated decisions on when to hold & fold, and quickly decide how much to wager. A waitress floated around with food & drinks and play lasted until breakfast. Judge Jack B. Weinstein held that poker is more a game of skill than a game of chance and therefore, game operators cannot be prosecuted under vague federal law that prohibits running an illegal gambling business. Although this decision was reversed in appeal, the finding that poker is a game of skill, is left undisturbed.
As to between Actual Games and Virtual Games, and if all online Games are online games are Games of Chance - HELD THAT:- The vehement contention of Learned Advocate General that gaming includes both a 'game of chance' and a 'game of skill', and sometimes also a combination of both, is not supported by his reliance on MJ. SIVANI VERSUS STATE OF KARNATAKA [1995 (4) TMI 284 - SUPREME COURT]. We are not convinced that M.J. SIVANI recognises a functional difference between actual games and virtual games. This case was decided on the basis of a wider interpretation of the definition of 'gaming' in the context of a legislation which was enacted to regulate the running of video parlours and not banning of video games; true it is that the Apex Court treated certain video games as falling within the class of 'games of chance' and not of 'games of skill' - the games of skill do not metamorphise into games of chance merely because they are played online, ceteris paribus. Thus, SIVANI is not the best vehicle for drawing a distinction between actual games and virtual games. What heavily weighed with the Court in the said decision was the adverse police report.
As to Entry 1 (Public Order), Entry 2 (Police) & Entry 26 (Trade and commerce) in the State List being the fields of Legislative Power - HELD THAT:- The expression "Public order" in the State List implies an activity which affects the public at large and therefore, individual instances that do not generate public disorder may not fit into the same. The Apex Court in BANKA SNEHA SHEELA VERSUS THE STATE OF TELANGANA & ORS. [2021 (8) TMI 1303 - SUPREME COURT] at para 13 observed: "There can be no doubt that for 'public order' to be disturbed, there must in turn be public disorder. Mere contravention of law such as indulging in cheating or criminal breach of trust certainly affects 'law and order' but before it can be said to affect 'public order', it must affect the community or the public at large." Added, the cases registered by the police are for the games that have eventually become offences after the amendment which is put in challenge and therefore, much cannot be derived from the factum of such registration.
As to Entry 6 (Public health and sanitation) In State List - HELD THAT:- A law passed by Parliament to give effect to an international convention shall not be invalidated on the ground that it contained provisions relating to the State subjects. In view of all this, the meaning and scope of the Entry in question cannot be widened, when the contours of law in this regard have already been earmarked in a catena of decisions of the Apex Court.
As to Right to SPEECH & EXPRESSION under ARTICLE 19(1)(a) AND RIGHT TO LIFE & PERSONAL LIBERTY UNDER ARTICLE 21 - HELD THAT:- The freedoms guaranteed inter alia under Articles 19 & 21 have been broadening from precedent to precedent, needs no elaboration. The right to speech & expression has expanded to include even a right to vote vide UNION OF INDIA VERSUS ASSOCIATION FOR DEMOCRATIC REFORMS & ANR. [2002 (5) TMI 820 - SUPREME COURT]. Similarly, the march of law from AK. GOPALAN VERSUS STATE OF MADRAS [1950 (5) TMI 24 - SUPREME COURT] and JUSTICE K.S. PUTTASWAMY (RETD.) AND ANOTHER VERSUS UNION OF INDIA AND OTHERS [2018 (9) TMI 1733 - SUPREME COURT] has broadened the contours of right to life & personal liberty, exponentially. Several rights guaranteed in Part III of the Constitution are no longer treated as water tight compartments, since they have correlative content and each illuminates the penumbra of other by interplay. Political, social & economic changes have entailed the recognition of new rights such as right to privacy.
Virtual Games and elements of Expression as US Courts view them - HELD THAT:- The US Supreme Court in BROWN vs. ENTERTAINMENT MERCHANTS ASSOCIATION, was considering the challenge to a California law that restricted the sale or rental of violent video-games to minors. Justice Antonin Scalia reasoned that such a law does not comport with the First Amendment inasmuch as these games too, qualify for protection under the shadow of Amendment on par with books, plays & movies, although they communicate ideas through familiar literal devices and features distinctive to the medium. The Court inter alia observed that the basic principles of freedom of speech do not vary with a new and different communication medium.
As to Reasonable Restriction under Article 19(2) on Right to Speech and Expression under Article 19(1)(a) and Regulation of Personal Liberty under Article 21 - HELD THAT:- The predicate for Article 19(1)(a) is poised to include not only artistic expression having an outward effect upon socio political thought but also inarticulate expression having a predominantly inward effect.
As to 'Scare Argument' of the State vs. Research Studies and Empirical Data - HELD THAT:- Science & technology are indisputably intertwined with the social and private lives of the citizenry world over. Online gaming too is a product of technological advancement. Online games as contra-distinguished from gambling are also a form of expression and partake the character of business. It may be also a pursuit of happiness that falls within the contours of liberty & privacy of an individual. As already stated above, placing an absolute embargo on this may take away any positive development and benefit that the State may be able to achieve by otherwise balancing the competing interests of the society and the individual. It may be said that while the State has a vested and legitimate interest in the protection of its citizenry, the individual too has a vested right to partake in the recreation of gaming in exhibition of individual skills albeit responsibly. Therefore, a regulation in this regard ought to include technological solutions in the field, in order to better enable a safe and responsible gaming behavior & environment. The integration of data science & governance, corporate social responsibility and individualized responsible gaming programs and/or other regulations may allow legal development to keep pace with technological advancement.
As to Article 19(1)(g) and Entry 26 (TRADE AND COMMERCE) in STATE LIST - HELD THAT:- The games of skill as we have reasoned out above involve elements of expression and therefore enjoy regulatable protection under Article 19(1)(a); it has long been settled that these games apparently having business characteristics are protected under Article 19(1)(g). Therefore the above observations in Indian Express equally apply to the case of petitioners. However, the Amendment Act does not critically adjust the boundaries of existing category of protected activities i.e., games of skill with the unprotected acts of gambling. Instead, State has created a wholly new category of medium-based-regulation when change of medium per se does not alter the true nature & content of the games. The permissible limits of restriction recognized by Chamarbaugwalas are thus trampled, by proscribing the online games by lock, stock & barrel. To scuttle the ship is not to save the cargo: to jettison may be.
As to whether CHAMARBAUGWALA JURISPRUDENCE has lost relevance due to Advancement of Science and Technology - HELD THAT:- Constitution is intended to enure for ages to come and consequently, to be adapted to the various crises of human affairs. It is unwise to insist that what the provisions of the constitution meant to the vision of its makers must mean to the vision of our time. They should be interpreted to meet and cover changing conditions of social and economic life. A Constitution states not rules for the passing hour but the principles for an expanding future. At the same time, the meaning of the Constitution does not change with every ebb and flow of economic events. A constitution is not a storehouse of fossilized principles. It is a living law of the people and accordingly its provisions need to be construed by all the organs of the State.
As to Discrimination and Violation of Equality under Article 14 - HELD THAT:- Whilst there are multiple layers of prior editorial control in case of publication through traditional media, such layers may not exist in the case of publication of information through online media, as information in the case of latter "travels like lightning". It hardly needs to be stated that the cases at hand are not one of unregulated information travelling at the speed of lightening. We are at loss to know how the observations made in the decision would advance the case of respondents, when its contextual substratum is miles away from that of these petitions.
As to Manifest Arbitrariness and voiding of plenary legislations - HELD THAT:- The very definition of 'gaming' as amended, suffers from the vice of over-inclusiveness/over-broadness of the idea of gaming as enacted in the charging provisions of the Act that are animated by CHAMARBAUGWALA Jurisprudence. The content of 'gaming' as capsuled under Section 2(7) thus bruises the legislative intent enacted in Section 176 ab inceptio and continued post-amendment, for protecting a class of citizens who plays the games of skill and therefore, fits into the text & context of this provision.
As to INCHOATE CAUSE OF ACTION: Rights under ARTICLE 19(1)(a) & (g) not availing to Juristic persons - HELD THAT:- The contention of the learned Advocate General that the Fundamental Rights under Article 19 do not avail to the non-citizens and therefore, petitions are misconceived, cannot be countenanced inasmuch as there are several citizens before this Court who have laid a challenge to the legislations.
These writ petitions succeed:
1. The provisions of Sections 2, 3, 6, 8 & 9 of the Karnataka Police (Amendment) Act 2021 i.e., Karnataka Act No. 28 of 2021 are declared to be ultra vires the Constitution of India in their entirety and accordingly are struck down.
2. The consequences of striking down of the subject provisions of the Karnataka Police (Amendment) Act 2021 i.e., Karnataka Act No. 28 of 2021 shall follow. However, nothing in this judgment shall be construed to prevent an appropriate legislation being brought about concerning the subject i.e., 'Betting & gambling' in accordance with provisions of the Constitution.
3. A Writ of Mandamus is issued restraining the respondents from interfering with the online gaming business and allied activities of the petitioners.
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2022 (2) TMI 1367 - ITAT BANGALORE
Deduction u/s 10AA - HELD THAT:- As relying on assessee own case Assessment Year 2013-14 [2020 (8) TMI 196 - ITAT BANGALORE] had examined the various aspects of the relief claimed u/s. 10AA of the Act and held it in favour of assessee, subject to the proceeds having been brought into India in convertible foreign exchange - this Tribunal remanded only one aspect to the DRP i.e. to verify whether the sale proceeds have been brought into India in convertible foreign exchange by IBM India. Respectfully following the same this ground stands remanded as indicated hereinabove.
Disallowance of payments to AEs and third party u/s. 40(a) - payments to IBM Singapore for shrink wrapped software - HELD THAT:- As decided in assessee own case 2013-14 [2020 (8) TMI 196 - ITAT BANGALORE] we remand the issue back to DRP. The DRP is also directed to verify the details filed by applying the principles laid down by Hon’ble Supreme Court in case of Engineering Analysis Centre of Excellence (P.) Ltd. [2021 (3) TMI 138 - SUPREME COURT]
Disallowance u/s 37(1) - amounts that was suo moto disallowed by assessee u/s. 40(a) - HELD THAT:- As this Tribunal in Assessment Year 2013-14 [2020 (8) TMI 196 - ITAT BANGALOR] set aside for these issue to DRP for fresh consideration. Accordingly this ground raised by assessee stands allowed for statistical purposes.
Deductibility of ESOP expense - HELD THAT:- This Tribunal in case of Novo Nordisk India (P.) Ltd. [2013 (11) TMI 218 - ITAT BANGALORE] held that the expenditure in question was wholly and exclusively used for the purpose of the business of the assessee and motivated its workforce and allowed the deduction u/s 37(1) of the Act.
Respectfully following the above view, we direct to grant deduction to assessee on ESPO expenses in accordance with law, based on the principles laid down in the decision referred hereinabove.
TP Adjustment - AMP Adjustment - TPO was of the view that a sissy needs to become adequately compensated for such additional functions undertaken by it and therefore separately benchmarked the AMP function - HELD THAT:- Certain transactions listed in the Explanation under clauses (i) (a) to (e) to Section 92B are described as an ‘International transaction’. This might be only an illustrative list, but significantly’ it does not list AMP spending as one such transaction. The Courts held that the existence of an international transaction will have to be established de hors the BLT, the – burden is on the Revenue to first show the existence of an international transaction. The objective of Chapter X is to make adjustments to the price of an international transaction which the AEs involved may seek to shift from one jurisdiction to another. An ‘assumed’ price cannot form the reason for making an ALP adjustment. Since a quantitative adjustment is not permissible for the purposes of a TP adjustment under Chapter X, equally it cannot be permitted in respect of AMP expenses either.
We find that the DRP categorically observed that assessee has not furnished any documents to substantiate the argument of their existing no arrangement between assessee and the AE towards the brand promotion, which is beneficial to the AE. It is also observed by the DRP that assessee has not established that the AMP spend pertained to other segments also.
Accordingly, in the interest of justice, we remand this issue to the Ld.AO/TPO to verify the aspect based on the documents/evidences submitted by the assessee. In the event the it is found that the expenditure is factored in net cost for computing margin, no separate adjustment needs to be made.
Grant the credit for TDS deducted and SA Tax on verification in accordance with law.
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2022 (2) TMI 1366 - SUPREME COURT
Seeking grant of bail - HELD THAT:- It is not in dispute that the appellant is in custody since May 2019 in connection with stated offence. The appellant being woman and in the peculiar facts of the present case, which cannot be cited as precedent by the co-accused involved in the alleged offence, the appellant is directed to be released on bail to the satisfaction of the Trial Court in connection with Complaint Case and on such terms and conditions as may be imposed by the Trial Court.
Appeal allowed.
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2022 (2) TMI 1365 - ITAT AHMEDABAD
Assessment against company wound up - Disallowance of set off of speculation loss from the current years speculation business income - assessee company is under liquidation and hence notice was served to the Official Liquidator (“OL”) attached with Hon’ble High Court of Gujarat - HELD THAT:- In this case, the liquidator has given notice to the Income Tax Department as early as 5.12.2018, but IT Department has not seemed to have given pendency of the above cases before the OL. In accordance with Rule 26 of the ITAT Rules, appeal is not maintainable as income-tax department has not given full details to the OL [Official Liquidator] appointed by the Hon’ble High Court. The fact is that the company having been wound up, and Official Liquidator appointed by the Hon’ble High Court has discharged and relieved as OL, the assessee-company as such does not legally exist in the eyes of law.
We draw support of the judgment of Maruti Suzuki India Ltd. [2019 (7) TMI 1449 - SUPREME COURT] where it was held that during pendency of assessment proceedings, assessee company was amalgamated with another company and thereby lost its existence, assessment order passed subsequently in name of said non-existing entity, would be without jurisdiction and was to be set aside.
Thus the appeal filed by the Revenue is not maintainable as against the respondent-company which is dissolved by order of the High Court of Gujarat
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2022 (2) TMI 1364 - SUPREME COURT
Rejection of plaint in exercise of powers Under Order VII Rule 11 Code of Civil Procedure - independent suit would be maintainable against the Compromise Decree, or not - Order XXIII Rule 3A Code of Civil Procedure - HELD THAT:- On plain reading of Order XXIII Rule 3A Code of Civil Procedure, the Trial Court was justified in rejecting the plaint.
On plain reading of Order XXIII Rule 3A Code of Civil Procedure, no suit shall lie to set aside a decree on the ground that the compromise on which the decree is based was not lawful. Identical question came to be considered by this Court in the case of R. JANAKIAMMAL VERSUS S.K. KUMARASAMY (DECEASED) THROUGH LEGAL REPRESENTATIVES AND OTHERS AND S.R. SOMASUNDARAM AND ANOTHER VERSUS S.K. KUMARASAMY (DECEASED) THROUGH LEGAL REPRESENTATIVES AND OTHERS [2021 (6) TMI 1140 - SUPREME COURT]. It is observed and held by this Court that Rule 3A of Order XXIII bars the suit to set aside the decree on the ground that the compromise on which decree was passed was not lawful. It is further observed and held that an agreement or compromise which is clearly void or voidable shall not be deemed to be lawful and the bar Under Rule 3A shall be attracted if compromise on the basis of which the decree was passed was void or voidable. In this case, this Court had occasion to consider in detail Order XXIII Rule 3 as well as Rule 3A.
The Trial Court was absolutely justified in rejecting the plaint on the ground that the suit for the reliefs sought challenging the Compromise Decree would not be maintainable.
As held by this Court in a catena of decisions right from 1977 that a mere clever drafting would not permit the Plaintiff to make the suit maintainable which otherwise would not be maintainable and/or barred by law. It has been consistently held by this Court that if clever drafting of the plaint has created the illusion of a cause of action, the court will nip it in the bud at the earliest so that bogus litigation will end at the earlier stage.
It is not in dispute that as such the Respondent No. 1-original Plaintiff has already moved an appropriate application before the concerned Court, which passed the decree setting aside the compromise Decree by submitting an application Under Order XXIII Rule 3A Code of Civil Procedure therefore the said application will have to be decided and disposed of in accordance with law in which all the defences/contentions which may have been available to the respective parties on the validity of the Compromise Decree would have to be gone into by the concerned court in accordance with law and on its own merits.
Appeal allowed.
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2022 (2) TMI 1363 - SC ORDER
Murder - Misuse of power by political parties and the Police authorities, to bury the truth in respect of an unnatural death of one Yogishgouda goudar - seeking sanction to the Central Bureau of Investigation (CBI), under Section - 6 of Delhi Special Police Establishment Act, 1946, to conduct further investigation with respect to Crime - It was held by the High Court that The Government is justified in entrusting the matter to the CBI, an independent agency to conduct a fair trial and investigation. When there is an improper investigation by state police and high Police officials are involved, in order to do complete justice, direction for investigation by an independent and specialized agency like CBI, is warranted.
HELD THAT:- There are no reason to interfere in the matter. The Special Leave Petitions are, accordingly, dismissed.
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