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Showing 21 to 40 of 1470 Records
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2022 (1) TMI 1462
Suit for recovery of laon - defendant No.2, as Director of defendant No.1 borrowed loan or not - suit barred by time limitation or not - HELD THAT:- A careful reading of the plaint, would go to show that nowhere in his plaint, the plaintiff has whispered or stated about the defendants executing an on demand Promissory Note in his favour while obtaining the alleged loan from him. As such absolutely, there is a doubt about the defendants executing the Promissory Note in favour of the plaintiff, much less, at Ex.P-1.
The plaintiff as PW-1 also has nowhere in his examination- in-chief has stated about the defendants executing an on demand Promissory Note in his favour while obtaining the loan. In paragraph No.8 of his examination-in-chief in the form of affidavit evidence, the plaintiff has only stated that all the documents pertaining to suit loan transaction are produced with the plaint and the same are marked as exhibits by the plaintiff and the plaintiff's bank statement will be produced in the next date of hearing. At the end of his examination-in-chief, in a table showing the alleged exhibits, the plaintiff has shown an on demand Promissory Note dated 19.04.2013 as a document at Ex.P1. Thus, nowhere in his examination-in-chief i.e., in his evidence in its entirety, the plaintiff has stated about the defendants executing an on demand Promissory Note while availing the loan from him.
The post dated cheque, even if it is assumed that the said cheque was issued by the plaintiff on 19.04.2013, though would not matter, but what matters is if the loan is given through cheque, the plaintiff had sufficient materials, more particularly, the documentary proof like his bank pass book, statement of account, register, etc., to show the transaction of loan with the defendants. Admittedly, the plaintiff has not produced any one of them. Even though the plaintiff as PW-1 on his own in his examination-in-chief has stated that he would produce his bank statement, but he failed to produce the said bank document.
In the absence of any evidence to show that the cheques at Ex.P2 to Ex.P4 were presented for realisation and the dishonour of the same by the drawee bank, it cannot be held that the plaintiff as a payee in the cheque had charged the drawer, as per Section 72 of the Negotiable Instruments Act and consequently, since he has not presented the cheque and attempted to encash them, it cannot be held that the defendants have acknowledged the debt as such, the limitation has been extended under Section 18 of the Limitation Act. Therefore, when Exhibits-P2 to P4 do not go to show that the limitation has been extended, then, even according to the plaintiff, the alleged loan being of the date 19.04.2013 and admittedly the date of filing the original suit in the trial Court is on 22.03.2017, which is beyond three years from the date of arisal of cause of action, the suit is hopelessly barred by limitation.
Even though the trial Court for other reasons dismissed the suit by holding that the plaintiff could not able to prove the alleged loan transaction, there are no reason to interfere in the finding given by the trial Court in dismissing the suit of the plaintiff.
The Regular First Appeal stands dismissed.
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2022 (1) TMI 1461
Offences under Sections 45QA, 58B (4 AAA) & 58C of the Reserve Bank of India Act, 1934 - limited present petitioner's role in the company - maintainability of prosecution initiated against the petitioner - HELD THAT:- The private complaint itself filed for violation of the orders of the Company Law Board passed on 01.12.1998. The order has been passed pursuant to the default committed by the Company in repaying the amount to various depositors totalling more than Rs.20 crores at the relevant point of time. Therefore, the Company Law Board has passed an order directing the Company and its Directors to repay to the depositors by stipulating time limits and mode of payments to various depositors.
This Court is of the view that the contention of the learned counsel cannot be countenanced. Whether or not the petitioner was incharge and responsible to the conduct of the business of the company or whether or not he has purposely resigned to avoid the directions of the Company Law Board is a matter of evidence. Therefore, at this stage, this Court is not inclined to quash the proceedings.
This Court holds that there is prima facie material to proceed against this petitioner also and the present Criminal Original Petition is liable to be dismissed - this Criminal Original Petition is dismissed.
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2022 (1) TMI 1460
Issuance of summons in the suit - fraud and collusion - jurisdiction of Civil Courts vested by Order VII Rule 11 of the Code of Civil Procedure, 1908 - HELD THAT:- The duty of a Bank, to its customers and clients, involves, fundamentally, an element of trust and confidence, “justly reposed” by the client in the Bank and its employees, is merely stating the obvious. Where, therefore, the plaintiffs allege that the Bank has, in collusion with other defendants, used documents, got fraudulently executed or signed by the plaintiffs, to mortgage the plaintiffs’ property with the Bank, fraud, quite plainly, is alleged. The particular use of the word “fraud”, mantra-like, is hardly required, where the elements of fraud are pleaded, as in the present case.
Collusion, if alleged, therefore, partakes, in its essence, of the character of fraud. Particularly in the case of a Bank, which enjoys a fiduciary relationship with the public, an expansive interpretation to the expression “fraud” has to be accorded. Whether the allegation is right or wrong, substantial or merely chimerical, or merely a puff in the air, is not relevant while examining the applicability of para 51 of the report in Mardia Chemicals [2004 (4) TMI 294 - SUPREME COURT]. Once the allegation exists, it exists, for better or for worse. Once fraud, on the part of the secured creditor, is alleged, recourse to ordinary civil remedies cannot be denied to the plaintiffs.
Objection of defendants rejected.
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2022 (1) TMI 1459
Rejection of Interim Relief Application filed by the petitioner - Rule 9(2) of the Security Interest (Enforcement) Rules, 2002 - HELD THAT:- The insertion of the second proviso to Rule 9(2) is to provide greater flexibility, so that the endeavour to sell the secured asset is not defeated. There may be a situation where the highest bid received in the tender/ auction process may be even below the reserve price, and the borrower and the secured creditor – with a view to extinguish, or reduce the outstanding liability of the borrower, may still consider it to be financial prudent to accept such a bid, and may give their consent to the confirmation of the sale. To deal with a situation like that, the second proviso has been built into Rule 9(2). The second proviso to Rule 9(2) provides flexibility to the concerned parties, namely, the borrower and the secured creditor, to sell the secured asset, with their consent, at a price which is even below the reserve price. No doubt, the purpose of holding a public auction/ tender to sell an immovable asset is to secure the highest and best price since that would inure to the benefit of not only the borrower but also the secured creditor.
The word “such price” appearing in second proviso to rule 9(2) means the highest bid price, which is lesser than the reserve price. If the property could be sold at the reserve price, only with the consent of the Borrower, the said condition will make first proviso absolutely nugatory and meaningless.
There are no merit in the present petition and the same is dismissed.
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2022 (1) TMI 1458
Challenge to notices under Section 13(2) of the SARFAESI Act - it is the case of the petitioners that the petitioners were never made aware of the proceeding under Section 14 of the SARFAESI Act, 2002 either by the Secured Creditor/Bank or by the District Magistrate by serving notice of the same - HELD THAT:- In the present case it is admitted position the accounts of the borrowers have been classified as non-performing assets and it is also admitted facts that Secured Creditor had issued notice u/s13(2) of the Act, not only once but twice on 09.11.2016 and on 15.05.2017. The defaulter borrowers submitted objection on 14.01.2017, but bank did not give any reply. Again a fresh notice u/s 13(2) of the Act, dated 15.05.2017 was served and against which the borrowers have submitted objection on 19.07.17 and Bank sent reply dated 02.08.2017 to some of the borrowers/petitioners. Then bank claims to have taken symbolic possession of the secured assets by affixing notice on 12.10.2017 and made paper publication to that effect on 17.10.2017 and copy of such notice was received by borrower on 20.10.17.
Once a notice is issued to the borrower under section 13(2) and if he fails to comply with the notice within the stipulated period, in view of clause (a) of sub-section (4) of section 13, the secured creditor is entitled to take possession of the secured assets of the borrowers. It can, thus, be seen that once the secured creditor is entitled to take possession in view of the provisions of sub-section (4) of section 13, the only thing it is required to do is to make an application in writing to the District Magistrate or the Chief Metropolitan Magistrate for taking possession of the secured assets.
In the present case the Secured Creditor to take possession of the secured assets has sought help of the District Magistrate Howrah as provided under Section 14 of the Act. However, according to a proviso to sub-section (1) of Section 14 of the Act, the authorized officer of the secured creditor is required to affirm an affidavit regarding certain facts about the borrower and the secured assets. On receipt of such affidavit the District Magistrate after satisfying the contents of the affidavit, pass suitable orders for the purpose of taking possession of the secured assets with in a period of thirty days from the date of application.
Section 14(3) of the Act, clearly provides that no Act of the District Magistrate or any officer authorized by the District Magistrate done in pursuance of this section shall be called in question in any court or before any authority. From the discussion made above it is clear that no duty is cast upon the District Magistrate to put the defaulter borrower on notice before passing any order under the section 14 of the Act. Therefore, question of violation of Principle of Natural Justice by the District Magistrate in a proceeding under Section 14 of the Act or the order is bad being passed behind the borrower does not arise.
This court does not find any merit in both the applications of the defaulter borrowers filed under Article 227 of the Constitution. Rather just to protract the litigation and to avoid the liabilities, the borrowers who have duly received the notice u/s13(2) of the Act and have filed an application u/s 17 of the Act challenging such notice and who were aware of taking symbolic possession of the secured assets by the Creditors, cannot be permitted to challenge the step taken by the District Magistrate u/s14 of the Act as stipulated by section 14(3) of the Act.
Petition dismissed.
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2022 (1) TMI 1457
Levy of interest on gross amount without deducting the Input Tax Credit which is already paid by the petitioner - non-issuance of SCN - Violation of principles of natural justice - HELD THAT:- This Court, notwithstanding the statutory remedy, is not precluded from interfering where, ex facie, it is opined that the order is bad in law. This is for two reasons- (a) violation of principles of natural justice, i.e. Fair opportunity of hearing. No sufficient time was afforded to the petitioner to represent his case; (b) order passed ex parte in nature, does not assign any sufficient reasons even decipherable from the record, as to how the officer could determine the amount due and payable by the assessee. The order, ex parte in nature, passed in violation of the principles of natural justice, entails civil consequences.
The impugned orders dated 10.08.2021 (Annexure-2 series) passed by the Respondent No. 4 namely the Additional Commissioner of State Taxes (Appeal), Patna West Division, Patna in different appeals (Annexure-2 series), and the orders dated 25.02.2020 passed by Respondent No.5, namely The A.C.S.T., Danapur Circle, Danapur, district Patna for different tax periods in Form GST DRC-07 set aside - petition disposed off.
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2022 (1) TMI 1456
Maintainability of petition - availability of alternative remedy - demand of tax with penalty - HELD THAT:- In light of the admitted position that the impugned order could be a subject matter of appeal under Section 107 of the CGST Act, this Court is of the view that the circumstances made out would not make out a case for bypassing the alternative remedy.
The petition is disposed off reserving liberty to the petitioner to file an appeal against the impugned order. If such an appeal is filed within a period of one week, the same to be disposed off within a period of not later four weeks thereafter. The petitioner, however, to co-operate for early disposal of such appeal.
Petition disposed off.
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2022 (1) TMI 1455
Application for restoration of appeal along with an application of condonation of delay in filing the application for restoration of appeal - HELD THAT:- It is found that there is no challenge of the stay order dated 04.06.2012 by the applicant, the only challenge is of the order of dismissal of the appeal.
The delay in filing the application for restoration of the appeal is condoned and it is held that as the applicant has complied with the condition of pre deposit vide stay order 04.06.2012, the Registry is directed to restore the appeal to its Original number. As this appeal pertains to the year 2010, the registry is directed to list the appeal for final disposal on 06.01.2022.
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2022 (1) TMI 1454
Appropriate Forum - Oppression and mismanagement - suit for perpetual injunction against directors restraining them from using the name and goodwill of company - Use of company name and goodwill by a director for personal business.
Crux of the arguments of defendants is if the plaintiff is aggrieved of oppression and mismanagement by the defendants then an appropriate forum would be NCLT and not to a civil court.
HELD THAT:- Though, ICP Investments (Mauritius) Ltd. [2019 (8) TMI 1631 - DELHI HIGH COURT] says a civil suit would not be maintainable as derivative action can be filed before the NCLT, but it is equally true Rajeev Saumitra [2016 (2) TMI 134 - DELHI HIGH COURT] says there is no provision in the Companies Act to approach the Company Law Board for a wrong done to the company by a director.
The Hon’ble Supreme Court in Ahmed Abdulla Ahmad Al Ghuriar vs Star Health and Allied Insurance Company Limited [2018 (11) TMI 1408 - SUPREME COURT] says a derivative action is maintainable in a Civil Court though only in a particular situation and as an exception.
No doubt contrary views are expressed by this Court, but in view of Ahmed Abdulla Ahmad Al Ghuriar, prima facie one can say such an action cannot be brushed aside in its infancy. Thus, summons of suit and application are hereby issued to defendants. Learned counsels for defendants accepts summons and seeks to file their response.
Since the plaintiff is in business prior to that of defendant No.5, hence it would be appropriate if the defendant No.5 is directed not to use the name HI TECH as its trade name in its future bids, to be applied afresh from now onwards, till the next date of hearing. Affidavit of admission/denial of documents be also filed by the parties.
List for completion of pleadings before the learned Joint Registrar on 20.04.2022 - Upon completion the pleadings the matter be listed in this Court.
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2022 (1) TMI 1453
Challenge to Clause 1.12(V) of the tender document - permission / consent of private siding owner to operate the Vimla siding for dispatch of coal to TPS of Mahagenco - petitioner-Bidder submits that by introducing a private party in the matter of transportation of raw coal there is uncertainty in the manner in which the prospective bidders would be required to submit their bids, especially the financial aspect thereof - HELD THAT:- The scope for interference in a challenge raised to the tender process and especially the terms of invitation to tender are quite limited as held in MEERUT DEVELOPMENT AUTHORITY VERSUS ASSOCIATION OF MANAGEMENT STUDIES & ANR. [2009 (4) TMI 833 - SUPREME COURT]. This is for the reason that an invitation to tender is in the realm of contract and limited judicial review would be available in cases where it is established that the terms of invitation to tender are so tailor-made to suit the convenience of any particular person with a view to eliminate all others from participating in the bidding process.
In Michigan Rubber (India) Limited [2012 (3) TMI 512 - SUPREME COURT], it was observed that it would not be permissible for the Courts to interfere with the terms of the tender merely because the Court feels that some other terms in the tender document would have been fair, wiser or logical. The Principal inviting tender must have a free hand in stating the terms of the tender and it is only if any term is found to be arbitrary, discriminatory, mala fide or actuated by bias that the Court would interfere.
The grievance of the petitioner is that the involvement of a private party in the form of the Private Siding Agent in the tender process has resulted in the tender no more being a public tender. It is apprehended that the rates for rendering services by a Private Siding Agent could differ from bidder to bidder thus making it unfeasible for a bidder to competitively submit its financial bid. The rates to be quoted by the petitioner would be governed by the service charges to be levied by the respondent no.2 over which the Principal had no control. This resulted in absence of a level playing field for the bidders. Since such involvement resulted in introducing arbitrariness, Clause 1.12(V) ought to be struck down. This apprehension expressed by the petitioner is found to be unjustified and not supported by any material whatsoever - A prudent bidder would have definitely enquired about such general terms and conditions that were applicable so as to take further steps but the same has not been done by the petitioner herein. It would have been a different matter had the petitioner come up with instances of different rates being applied by the Private Siding Agent to different bidders. That is not the case on record.
The challenge as raised to Clause 1.12(V) by the petitioner also cannot be accepted - Presence of such clause does not render the tender document to be either arbitrary, unreasonable or resulting in violating the provisions of Articles 14 and 19(1)(g) of the Constitution of India. The Private Siding Agent having stated that all bidders would be treated equally while quoting the rates for the services to be rendered, we do not find any case whatsoever made out to interfere under Article 226 of the Constitution of India. Consequently, the challenge as raised fails.
The writ petition is dismissed.
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2022 (1) TMI 1452
Addition u/s. 69A - reliance on documents impounded during the course of survey proceedings - HELD THAT:- AO has himself stated in his assessment order that "assessee is engaged in the business of trading of cloths", therefore, assessee does not have any income other than business activity, hence, undisclosed income of declared during the survey proceedings is business income.
Considering these facts, and respectfully following the judgment of jurisdictional Hon'ble, Gujarat High Court in the case of Mahskar General Hospital [2011 (8) TMI 1144 - GUJARAT HIGH COURT] we do not find any infirmity in the order of ld. CIT(A). That being so, we decline to interfere with the order of Ld. CIT(A) in deleting the aforesaid additions. His order on this addition is, therefore, upheld and the grounds of appeal of the Revenue are dismissed.
Addition of certain expenses - Revenue has challenged the disallowance @ 1/10th of various business expenses such as depreciation on motor car, interest on car loan, motor car expenses, motor car repairing, mobile phone expenses, telephone expenses and travelling expenses - AO had not pointed out any single entry of personal expenses during the scrutiny therefore, ld. CIT(A) deleted the ad hoc addition made by AO - HELD THAT:- We note that AO could have ventured into estimation only after rejecting the books of accounts of the assessee u/s. 145(3) and thereafter by best judgment assessment u/s. 144 of the Act. Here in this case, the AO has not passed any order u/s. 144 - AO thus without rejecting the books of account of the assessee has gone for estimation on suspicion and conjectures that the assessee may be inflating its expenses.
While scrutinizing the expenditure if the expenses claimed are not having any nexus to the business of the assessee or if there is deficiency in the vouchers or there is no bills supporting the incurrence of an expenditure, at the most expenses to the extent that are not supported by the vouchers can be held to be non-genuine and can be disallowed by the AO; and item-wise the AO could have disallowed the expenditure rather than going for ad-hoc disallowance of percentage basis of the expenses claimed by the assessee which action of the AO is arbitrary in nature and cannot be sustained. Considering these facts, we do not find any infirmity in the order of ld. CIT(A), therefore, order of the CIT(A) is hereby approved and confirmed.
Addition on account of unrecorded purchases - deletion of addition as same is already included in the physical stock taken by the department during the survey - HELD THAT:- We have heard both the parties and note that even though this purchase was not recorded in the books, however, the physical stock taken during survey and excess stock declared included the said purchase. CIT(A) observed that no finding of the AO as to why this amount could not be considered, as included in the disclosure of excess stock, during the survey. Based on this finding, the ld. CIT(A) deleted the addition - Hence, we are not inclined to accept the contention of the AO in any manner and hence the addition so made, has been rightly deleted by ld. CIT(A). Hence, we dismiss the ground raised by the Revenue.
We have heard both the parties and note that eventhough this purchase was not recorded in the books, however, the physical stock taken during survey and excess stock declared included the said purchase. The ld. CIT(A) observed that no finding of the AO as to why this amount could not be considered, as included in the disclosure of excess stock, during the survey. Based on this finding, the ld. CIT(A) deleted the addition. Hence, we are not inclined to accept the contention of the Assessing Officer in any manner and hence the addition so made, has been rightly deleted by ld. CIT(A). Hence, we dismiss the ground raised by the Revenue.
Disallowance u/s 14A - HELD THAT:- As the investment was made out of interest free fund, had no direct nexus between the interest borrowed funds. Respectfully following the binding precedent of Suzlon Energy Ltd. [2013 (7) TMI 697 - GUJARAT HIGH COURT] we delete the addition.
Addition being incurred u/s 36(1)(va) r.w.s. 2(24)(x) - delayed Employees Contribution towards Provident Fund (PF) and ESI - HELD THAT:- Issue decided against the assessee by the judgment of Gujarat State Road Transport Corporation [2014 (1) TMI 502 - GUJARAT HIGH COURT] wherein as held tribunal has erred in deleting respective disallowances being employees' contribution to PF Account/ESI Account made by the AO as, as such, such sums were not credited by the respective assessee to the employees' accounts in the relevant fund or funds (in the present case Provident Fund and/or ESI Fund on or before the due date as per the explanation to section 36(1)(va) of the Act i.e. date by which the concerned assessee was required as an employer to credit employees' contribution to the employees' account in the Provident Fund under the Provident Fund Act and/or in the ESI Fund under the ESI Act.
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2022 (1) TMI 1451
Offence under SEBI Act - Charge for IPO applications in fictitious names - exercise of power under Section 482 of Code of Criminal Procedure and Article 226 and 227 of Constitution of India - as noted petitioner had opened Demat Accounts in fictitious and benami names and made large number of applications in the IPOs in the category of retail investors in fictitious and benami names only with a view and malafide to corner the quota of retail investors in the IPOs by the companies
Validity and impact of SEBI's Consent Order - HELD THAT:- One doesn’t require much prescience to understand that the allegations made by SEBI while initiating proceedings under SEBI Act and as also prosecution initiated by CBI are similar in nature. In such circumstances, the Consent Order assumes significance and one is required to look into whether Consent Order passed in the matter tantamounts to compounding the offences alleged against the petitioner, in accordance with the guidelines of the said consent scheme.
Thus, the consent application so moved by the petitioner is in accordance with guidelines of SEBI. Prosecution pending against him was also pointed out by him and even he urged that he be exonerated from the cases so started either by SEBI or at the behest of SEBI.
After considering all relevant parameters as provided in said Consent Circular including gravity of offence, SEBI has passed the Consent Order. We no doubt of whatsoever nature in my mind that the gravity of offence and as well as the large public interest were duly considered before compounding the proposed prosecution by SEBI. It is also not in dispute that the petitioner had disgorged Rs. 2.35 crore and in a sense the public interest was duly secured and protected.
SEBI, the complainant, in the present matter having agreed to compound the said irregularities upon payment of certain amounts allegedly earned by the petitioner and the petitioner having been paid the same, it can no more be termed as fraudulent act on the part of petitioner warranting continuation of prosecution based on such allegations.
The dispute between the parties were predominantly commercial in nature having little criminal overtone and this being so, in my humble view, the observations made of the principles so laid down by the Hon’ble Apex Court in the case of Parbatbhai Aahir Alias Parbatbhai Bhimsinghbhai Karmur and Others [2017 (10) TMI 1194 - SUPREME COURT] clearly applies to the case in hand.
The disputes which are predominantly commercial in nature with little criminal overtone can be quashed by the Hon’ble Court while exercising the power under Section 482 of the Cr.P.C
As far as the impleadment of complainant as a party respondent is concerned, in our opinion, having regard to the facts and circumstances there was no necessity for the petitioner to implead the complainant as a party respondent. Therefore, do not find merit in the submissions of learned Counsel for respondent No. 2 that the Petitions are bad for non-joinder of complainant as a party respondent.
The present are the fit cases in which the Court can exercise its inherent power under Section 482 of the Cr.P.C. and as also under Article 227 of the Constitution of India. Therefore, conclude that the continuation of the proceedings in Special CBI Case and Special CBI Case pending on the files of the Special Judge (CBI), Greater Mumbai, qua the Petitioner herein shall be an abuse of process of Court, therefore, the same is hereby ordered to be quashed and set aside in order to meet the ends of justice.
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2022 (1) TMI 1450
Challenge to Tender Notification dated 14.12.2021 bearing reference Na.Ka.No.A3/2242/2021 issued by the second respondent Tamil Nadu State Marketing Corporation (TASMAC) - common grievance of the petitioner is that the respondents TASMAC has floated the tenders without considering the hardship faced by the petitioners and contrary to the provisions of the Tamil Nadu Transparency in Tenders Act, 1998 (Tamil Nadu Act 43 of 1998) and the Rules made thereunder and Circular dated 22.07.2014 bearing reference Circular No.A3/19/2014 and ignoring the loss sustained by them due to closure of the business during the lockdown and during the previous licence period.
HELD THAT:- Section 4A was amended so as to make, the person found in a state of intoxication in any public place, and a person other than those who are permitted to consume any liquor or intoxicating drug, is found in a state of intoxication in any private place is punishable with simple imprisonment which may extend to 3 months ( 6 months prior to amendment vide Tamil Nadu Act 2 of 1989) or fine which may extend to Rs.1000/-, on both - the amendment was intended to implement the policy of the Government under the Tamil Nadu Prohibition Act, 1937. It was in consonance with the total prohibition which existed then from 1976 and Article 47 of the Constitution of India.
The Bar Licence issued under Tamil Nadu Liquor (Retail Vending in Bar) Rules, 1992 was deemed to have been renewed and privilege was granted for the period from 1 st June, 1993 to 30th June, 1993. Where any licensee had paid an amount in excess of the privilege amount specified in Rule 4, such amount was to be refunded by the licensing authority to the licensee, after deducting the Government used if any, under the rescinded Rules. This was at the time when license and privileges were given to private persons to run wine shops & bars.
In Madras City Wine Merchants' Association and Others Vs. State of Tamil Nadu and Another, [1994 (7) TMI 366 - SUPREME COURT], the Hon’ble Supreme Court held that “When the State has received complaints that the consumption of liquor in bars resulted in law and order problems, woman folk being harassed, certainly, in public interest it could take a decision to repeal the grant of Bar licences. There is nothing unreasonable.”
As a retail seller, TASMAC may have been entitled to operate a Bar if the provisions of the Tamil Nadu Liquor (Retail Vending in Bar) Rules, 2002 had survived with a few amendments. However, under Section 22 D (c) of the Tamil Nadu Prohibition Act, 1937, even these Rules have been completely repealed - The 2003 amendments to the Tamil Nadu Prohibition Act, 1937 which paved way for the Tamil Nadu Liquor Retail Vending (In Shops and Bars), Rule 2003 merely contemplates grant of an exclusive license to TASMAC for retail sale under Rule 4 of the aforesaid Rules under Section 17-C of the Tamil Nadu Prohibition Act, 1937.
The impugned exercise, cannot be legitimized under Rule 9A, though, the attempt was made to state that the impugned Tender Notification was in line with the aforesaid provision. The respondents TASMAC has no authority under the Act, to encourage consumption of alcohol and intoxicating liquor in public place or so-called “Bar” for which it is auctioning rights to highest bidders - The power to grant licence to run a bar can vest only with the licencing authority namely the Commissioner of Prohibition & Excise. Respondents TASMAC is a mere “wholesale” and “retail” dealer. It cannot run a “Bar” by itself whether directly or indirectly.
It is therefore for the petitioners to approach the appropriate authority under the provisions of the aforesaid Act and the Rules made thereunder if there was any violation . Therefore, on this score also, there is no merits in these Writ petitions - Statutorily, the respondents TASMAC have been given powers merely to engage itself in wholesale and retail sale of alcoholic liquor alone. It has not been given power to consumption of liquor in public or the so called Bar.
The practice of respondents TASMAC to allow mushrooming of “Bar” within the meaning of Tamil Nadu Liquor Retail Vending (In Shops and Bars) Rules, 2003 is contrary to the provisions of the Tamil Nadu Prohibition Act, 1937 - Till the law is amended, and proper rules are framed which are in tune and consistent with the provisions of the Tamil Nadu Prohibition Act, 1937, the respondents TASMAC shall refrain from granting licences/permits to the petitioners and others to do the support service or the business in the sale of short eats or collecting used bottles.
Petition dismissed.
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2022 (1) TMI 1449
Addition of cash payments u/s.40A(3) - assessee has made cash payments in excess of prescribed limit covered u/s.40A(3) of the Act, for purchase and services - assessee argued that said payment is made to his agent, who is required to make payments in cash for goods or services on behalf of the assessee - HELD THAT:- The assessee neither appeared nor filed any details to justify its case to argue that payments made in cash in excess of prescribed limit provided u/s 40A(3) of the Act, comes under clause (k) of Rule 6DD of Income Tax Rules, 1962.
Thus, cash payments made in excess of prescribed limit for purchase of materials comes under provisions of section 40A(3) of the Act, and hence, there is no error in the reasons given by the AO to make additions towards cash payment u/s.40A(3).
There is no error in the reasoning given by the learned CIT(A) to sustain additions made by the AO towards cash payments u/s.40A(3) - Decided against assessee.
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2022 (1) TMI 1448
Income from other sources u/s 56(2)(viib) - share premium receipts - since the valuation was not as per the prescribed method and did not have scientific analysis, the justification of claim of share premium received was rejected by the A.O. and assessed by invoking the provisions of section 56(2)(viib) - HELD THAT:- Section 56(2)(viib) was introduced in the Finance Act, 2012 which requires a company (issuer), not being a company in which the public are substantially interested, to issue shares at Fair Market Value (FMV). Any consideration received by such issuing company in excess of the FMV, to the extent it exceeds the face value of such shall be liable to tax.
In the instant case, neither the A.O. nor the CIT(A) has determined the fair market value of the shares issued by the assessee-company to ACT Digital in accordance with Rule 11UA.
A.O. has merely taken face value of the shares as the deemed fair market value and the share premium was assessed as income from other sources u/s 56(2)(viib) of the I.T.Act. The provisions of section 56(2)(viib) to be invoked, necessarily the FMV has to be established as per one of the prescribed methods.
Therefore, in order to determine the fair market value of the shares, the matter is referred to the CIT(A). CIT(A) shall call for a remand report from the AO, who shall determine the FMV of shares by following any of the prescribed methods. After confronting the remand report with assessee, the CIT(A) may take appropriate decision as per law. Appeal filed by the assessee is partly allowed.
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2022 (1) TMI 1447
Capital gain - Applicability of Sec. 2(47)(v) of the IT Act and Sec. 53A of the Transfer of Property Act - Determination of the date of transfer - amendment to section 50C which was introduced w.e.f. AY 2007-08 was applicable retrospectively for AY 2014-15 when the language used in the proviso does not indicate that it was inserted as a clarification - purposes of stamp duty be considered as Sale Consideration for the purposes of computation of capital gains under the Act - why the date of transfer be considered to be 24-02-2014 instead of 08-04-2013? - HELD THAT:- The legislature took note of the fact that there are different situations where sale agreements are entered into between the parties for an agreed sale consideration and paid a part of sale consideration as advance and the agreement was put in writing and sale deed is to be considered on a subsequent date, so there was amendment to section 50C of the Act.
In the present case, the JDA was executed on 1.3.2013. MoU was entered on 8.4.2013. The guidelines value was revised on 12.8.2013. According to the assessee, transfer took place on the date of JDA on 1.3.2013 and the relevant value as on the date of JDA or the date of MoU to be applied, instead of applying guidelines value on 12.8.2013 in view of the proviso to section 50C(1) of the Act.
Proviso to section 50C(1) deals with cases where the date of agreement fixing the amount for consideration and the date of registration for transfer of capital asset are not the same. The value adopted or assessed or assessable by the stamp valuation authority on the date of agreement to be taken for the purposes of computing full value of consideration for such transfer. This amendment by insertion of proviso seeks to relieve the assessee from undue hardship.
There was payment on 23.11.2011 by cheque No.259865 drawn on Vijaya Bank, Sarakki Branch, Bangalore. Being so, the argument of the ld. DR is that MoU is not suggesting any payment so as to apply the proviso to section 50C, thus it is deemed retrospective in nature.
In our opinion, as held in the case of Vummudi Amarendran [2020 (10) TMI 517 - MADRAS HIGH COURT], proviso to section 50C(1) is retrospective in nature applicable from AY 2014-15. Further part of the consideration has already been passed through MoU as enumerated above. It cannot be said that no consideration is paid on the date of MoU.
This finding of the lower authorities is not proper. Accordingly, we hold that proviso to section 50C(1) by the Finance Act, 2016 is retrospective and also the assessee proved that the 2nd proviso to section 50C(1) is satisfied since the assessee has paid a part of sale consideration on the date of such MoU dated 8.4.2013. In view of this, we hold that the guidance value has to be computed as prevailing on the date of MoU dated 8.4.2013. Appeal of the assessee is allowed.
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2022 (1) TMI 1446
Exemption u/s 11 - assessee made certain modifications and amended the objects of the trust - AO observed assessee has amended the object clause without intimating the CIT (Exemption) - According to the assessing officer, it violates the registration granted u/s 12A
HELD THAT:- CIT (Exemption) has initiated the proceedings for withdrawal of the registration u/s 12A on 10/03/2016 and subsequently on 19/12/2016, the proceedings were dropped. We also observe from record that no doubt assessment order was passed on 28/03/2015 and it is a fact on record that the withdrawal proceedings were initiated by CIT (Exemption) on the basis of information from the assessing officer; however, he has dropped the same subsequently.
This information was brought to the notice of the CIT(A) and CIT(A) conveniently omitted to take notice of the same and proceeded to toe the line of assessing officer. In our considered view, the assessing officer has no authority or right to treat the registration granted by the higher authority, i.e. CIT (Exemption) as not valid.
We observe from the record that he has rightly brought to the notice of the CIT (Exemption) and it is a fact on record that CIT (Exemption) considered the same facts on record at the time of granting original registration u/s 12A and subsequent withdrawal of the proceedings shows that he is convinced with the submissions of the assessee and the objects were within the charitable activities. Therefore, learned CIT(A) should have taken note of this development and should have cancelled the assessment made by the AO.
AO in his order has observed that this trust was formed for benefit of a particular community and thus attracted section 13(1)(d) of the Act.
Main object for which the trust was registered was for the benefit of the members of the Daivadnya community. The purpose and objects of the trust was never changed or modified. The amended object clause also for the benefit of members of the Daivadnya community. When the CIT (Exemption) approved the objects of the trust for registration us 12A on 25/04/1975 that means, he has satisfied himself that it is not a particular group, rather, it is for the whole members of the Daivadnya community. Even after amendment to the object clause, there is absolutely no change.
Accordingly, CIT(Exemption) has taken a decision to drop the proceedings initiated for cancellation of the registration granted u/s 12A. Therefore, assessment order passed is void and accordingly, it is set aside. Assessee appeal allowed.
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2022 (1) TMI 1445
Application for intervention - permission to intervene in the matter before the Large Bench since an appeal filed by them, is pending before the Division Bench of the Tribunal - HELD THAT:- The application is allowed and the applicant is permitted to intervene in the matter pending before the Larger Bench.
Application allowed.
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2022 (1) TMI 1444
Principles of audi alteram partem in clauses of Master Circular - High Court had in case of MR. RAJESH AGARWAL, VERSUS RESERVE BANK OF INDIA, [2021 (5) TMI 218 - TELANGANA HIGH COURT] has proceeded on the basis that the effect of the interim order is that the endeavour of the High Court to read the principles of personal hearing into the circular have been stayed - etitioners company’s account declared as ‘fraud’ - HELD THAT:- In view of the mandates stated to be existing in para 8.9.5 of the Master Circular dated 01.07.2016 [Annexure P/5] categorized as Reserve Bank of India [Frauds Classification and Reporting by Commercial Banks and Select FIs] Directions, 2016 to lodge a complaint with the CBI within 30 days, the only interim order it is inclined to pass at this stage would be that the matter may not be reported to the CBI for the time being.
Issue notice on the Special Leave Petition as well as on the interim prayer for stay, returnable in four weeks.
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2022 (1) TMI 1443
Validity of reassessment proceedings - scope of new provisions/substituted Sections - Scope of Sections 147 to 151 of the Income Tax Act, 1961 by way of the Finance Act, 2021 with effect from 1st April, 2021 - powers u/Section 3(1) of Relaxation Act - as argued notices in the present matters have been issued post 31st March, 2021 without following the procedure prescribed in the substituted Sections 147 to 151 w.e.f. 01st April, 2021 - HELD THAT:- Explanations A(a)(ii)/A(b) to the Notifications dated 31st March, 2021 and 27th April, 2021 are declared to be ultra vires the Relaxation Act, 2020 and are therefore bad in law and null and void.
Consequently, the impugned reassessment notices issued under Section 148 of the Income Tax Act, 1961 are quashed and the present writ petitions are allowed. If the law permits the respondents/revenue to take further steps in the matter, they shall be at liberty to do so. Needless to state that if and when such steps are taken and if the petitioners have a grievance, they shall be at liberty to take their remedies in accordance with law.
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