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Showing 161 to 180 of 1244 Records
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2013 (7) TMI 1086
Issues Involved:
1. Extent and magnitude of vicarious criminal liability of independent Directors u/s 138 read with Section 141 of the Negotiable Instruments Act, 1881.
2. Validity of the prosecution against independent Directors based on their involvement in the day-to-day affairs of the company.
Summary of Judgment:
Issue 1: Vicarious Criminal Liability of Independent Directors
The petitions were filed u/s 482 Cr.P.C. seeking quashment of complaints against independent Directors (petitioners) of a public limited company for alleged vicarious criminal liability u/s 138 read with Section 141 of the NI Act. The court examined the statutory criminal liability arising from the dishonour of cheques and the specific conditions under Section 141 that must be satisfied to hold officers of a company criminally liable. It was emphasized that vicarious criminal liability should be strictly construed and must be meticulously pleaded and proved.
Issue 2: Validity of Prosecution Against Independent Directors
The petitioners contended that they were independent Directors and not involved in the day-to-day affairs of the company. They argued that their prosecution was an abuse of the process of the court. The court referred to the legal precedent set in S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, which clarified that merely holding a designation or office in a company is insufficient to cast criminal liability. The complaint must specifically allege that the Directors were in charge of and responsible for the conduct of the business at the relevant time.
The court found that the complainant did not verify the true facts regarding the petitioners' roles and responsibilities. The documents produced by the petitioners, including Form 32 and annual reports, indicated that they were independent and non-executive Directors, not involved in the day-to-day management. The court concluded that the prosecution against the petitioners was without factual or legal basis and constituted an abuse of the process of the court.
Conclusion:
The court allowed all Criminal Miscellaneous Cases, quashing the complaints against the petitioners. It clarified that the complainant could proceed with the complaint against the other accused named in the complaint. All Criminal Miscellaneous applications to accept documents were allowed, and other applications were disposed of.
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2013 (7) TMI 1085
Issues Involved:
1. Whether the business activities of the Appellants fall under the definition of Collective Investment Schemes (CIS) as per SEBI regulations.
2. Whether the Appellants were required to register their schemes with SEBI.
3. The validity of the SEBI order directing the Appellants to wind up their schemes and refund the money collected from investors.
Summary:
Issue 1: Definition of Collective Investment Schemes (CIS)
The Appellants argued that their business activities do not fall under the definition of CIS as per SEBI regulations. They claimed that their business involves the sale and purchase of land, which does not fall within the purview of CIS Regulations. The Appellants also submitted that they do not offer exorbitantly high returns but an acceptable figure of 12% per annum. They contended that the funds raised are utilized for ongoing corporate expenses and other business activities. However, SEBI argued that the schemes carried on by the Appellants are in the nature of CISs as the contributions from investors are pooled and utilized for the purposes of the scheme, and the investors have no control over the management of the scheme.
Issue 2: Requirement of Registration with SEBI
The Appellants did not register their schemes with SEBI as required u/s 12(1B) of the SEBI Act and Regulation 3 of the CIS Regulations. SEBI issued a Show Cause Notice (SCN) to the Appellants for conducting CISs without registration. The Appellants denied the allegations but admitted that they had stopped taking new investments from the public. SEBI contended that the Appellants' schemes meet the criteria laid down in Section 11AA of the SEBI Act, which defines a CIS. The Tribunal referred to the Supreme Court's judgment in PGF Ltd. vs. Union of India, which held that schemes promising high returns and pooling investors' money for development fall under the definition of CIS.
Issue 3: Validity of SEBI Order
SEBI's Impugned Order directed the Appellants to wind up their schemes and refund all monies collected from investors within three months. The Tribunal upheld the SEBI order, finding no legal infirmity. However, considering the large number of investors involved and the complexity of the repayment process, the Tribunal extended the time frame for repayment to six months, with a requirement for the Appellants to submit a progress report to SEBI.
Conclusion:
The Tribunal dismissed the appeal, upholding SEBI's order with a modification to extend the repayment period to six months. The Appellants were directed to submit a progress report to SEBI after six months. The appeal was dismissed with no costs.
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2013 (7) TMI 1084
Issues involved: Appeal against levy of penalty u/s.271(1)(c) for concealing income.
Summary:
The appeal was filed against the order of CIT(A) confirming the penalty imposed by the AO u/s.271(1)(c) for concealing income. The Tribunal partially allowed the appeal, considering the addition made by the AO as an estimation due to the lack of genuine transactions recorded in the books of account. The AR of the assessee relied on a Tribunal decision in a similar case to argue against the penalty, while the Revenue supported the order of the CIT(A) and cited a different Tribunal decision. The Tribunal analyzed the facts and legal precedents, including a judgment of the Hon'ble Madhya Pradesh High Court, to conclude that the penalty imposed was not justified. It was held that since the assessee maintained books of accounts and no specific defects were pointed out, the penalty was not sustainable. Therefore, the penalty imposed by the AO and confirmed by the CIT(A) was deleted, and the appeal of the assessee was allowed.
Decision:
The Tribunal considered the applicability of legal precedents and the specific circumstances of the case to conclude that the penalty u/s.271(1)(c) was not justified. The judgment highlighted the importance of maintaining accurate books of accounts and the distinction between estimation-based income assessment and deliberate concealment of income. The Tribunal's decision was based on a thorough analysis of the facts and legal principles, ultimately leading to the deletion of the penalty imposed on the assessee.
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2013 (7) TMI 1083
Issues Involved:
1. Deletion of addition on account of 31st December party expenses.
2. Deletion of addition on account of cash paid for the purchase of a car.
3. Addition of unaccounted receipts.
4. Deletion of addition on account of loan taken from Mr. Dimpee and interest thereon u/s.68.
Summary:
1. Deletion of Addition on Account of 31st December Party Expenses:
The first issue raised by the Revenue relates to the order of the CIT(A) in deleting the addition of Rs. 31.50 lakhs made on account of 31st December party expenses. The Assessing Officer had made this addition based on the practice observed in previous years and certain seized documents. However, the CIT(A) directed the deletion of this addition, following his decision in A.Y. 2003-04. The Tribunal upheld the CIT(A)'s decision, noting that similar additions in previous years were deleted due to the absence of evidence. The Tribunal found no reason to interfere with the CIT(A)'s reasoned finding and dismissed the Revenue's ground.
2. Deletion of Addition on Account of Cash Paid for Purchase of Car:
The second issue raised by the Revenue pertains to the deletion of Rs. 30 lakhs added on account of cash paid for the purchase of a car. The Assessing Officer made this addition based on a seized kaccha receipt and a statement recorded u/s.132(4). The CIT(A) deleted the addition, noting that the Assessing Officer himself accepted the assessee's contention that the money generated in VHPL was used for the car purchase. The Tribunal found no infirmity in the CIT(A)'s order, stating that once the extra cash generated through the group was offered to tax, there was no need to tax the same again u/s.69C. The Tribunal dismissed the Revenue's grounds.
3. Addition of Unaccounted Receipts:
The assessee contested the addition of Rs. 2,99,45,000/- on the ground that the total unaccounted receipts were Rs. 15.99 crores and not Rs. 13 crores as declared. The Assessing Officer made the addition due to a shortfall in the declaration. The CIT(A) upheld the addition, but the Tribunal found merit in the assessee's submission that the difference between unaccounted receipts and cash expenses was less than the additional income declared. The Tribunal referred to the Delhi High Court's decision in Indeo Airways (P) Ltd., which held that once a presumption is drawn from seized documents, the Revenue cannot require the assessee to produce further evidence. The Tribunal directed the deletion of the addition and allowed the assessee's ground.
4. Deletion of Addition on Account of Loan Taken from Mr. Dimpee and Interest Thereon u/s.68:
The Revenue challenged the deletion of Rs. 146.9 lakhs added as unexplained cash credit u/s.68. The Assessing Officer made this addition based on seized documents indicating a loan from Mr. Dimpee. The CIT(A) deleted the addition, noting that the loan was taken prior to 06-07-2007 and related to A.Y. 2008-09, which the assessee had already declared as unexplained income. The Tribunal upheld the CIT(A)'s order, finding no infirmity in the deletion of the addition. The Tribunal dismissed the Revenue's ground.
Conclusion:
In the result, both the appeals filed by the Revenue were dismissed, and the appeal filed by the assessee was allowed. The judgment was pronounced in the open court on the 24th day of July 2013.
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2013 (7) TMI 1082
Issues Involved:
1. Addition on account of unaccounted Cull sales.
2. Addition on account of unaccounted party expenses.
3. Disallowance of expenses as personal/non-business expenditure.
Summary:
1. Addition on account of unaccounted Cull sales:
The assessee, engaged in poultry business, was subjected to a search on 22-10-2008, revealing unaccounted Cull sales for A.Y. 2007-08 to 2009-10. The Assessing Officer extrapolated this unaccounted income to A.Y. 2003-04 to 2006-07, despite no evidence for these years. The CIT(A) deleted the addition, citing lack of evidence and referencing the Tribunal's judgment in Asstt. CIT Central Cir. Aurangabad Vs Ramdeo Oil Industries Pvt. Ltd. The Tribunal upheld the CIT(A)'s decision, emphasizing that additions cannot be made based on presumptions and surmises without incriminating evidence for the specific years in question.
2. Addition on account of unaccounted party expenses:
The Assessing Officer made additions for unaccounted party expenses for A.Y. 2003-04 to 2006-07 based on evidence found for F.Y. 2006-07. The CIT(A) deleted these additions, following the same reasoning as for Cull sales. The Tribunal upheld this decision, stating that evidence for one year cannot justify additions for other years without specific evidence.
3. Disallowance of expenses as personal/non-business expenditure:
The Assessing Officer disallowed 10% of various expenses, suspecting personal use. The CIT(A) reduced this disallowance to 5%, acknowledging the lack of specific evidence of personal expenditure. The Tribunal further reduced the disallowance to Rs. 15 lakhs for A.Y. 2003-04, Rs. 17 lakhs for A.Y. 2004-05, and Rs. 18 lakhs for A.Y. 2005-06, considering the company's inability to fully substantiate the business nature of all expenses.
Conclusion:
The Tribunal dismissed the Revenue's appeals and partly allowed the assessee's appeals, providing relief on the disallowance of expenses.
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2013 (7) TMI 1081
The Gujarat High Court allowed the petitioner to withdraw the present petition due to defects in verification and lack of proper support. The petitioner has the liberty to file fresh proceedings for the same claim, including seeking winding up, following the necessary legal procedures. The petition was disposed of as withdrawn with notice discharged.
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2013 (7) TMI 1080
Issues Involved:
1. Allowability of deduction u/s 35(1) of the Income-tax Act, 1961 for product development expenditure related to scientific research.
2. Classification of the expenditure as capital or revenue in nature.
Summary:
Issue 1: Allowability of Deduction u/s 35(1)
The primary issue in these appeals is the allowability of deduction u/s 35(1) of the Income-tax Act, 1961 for product development expenditure related to scientific research activities. The assessee claimed product development expenditure for various assessment years, which included interest on loans and cost of consumables. The Assessing Officer (AO) disallowed the expenditure on the grounds that it was capital in nature and not revenue expenditure, despite the assessee's plea that the expenditure was incurred on research and development in a recognized in-house facility. The AO argued that the expenditure resulted in obtaining patent rights and provided enduring benefits to the assessee, thus classifying it as capital expenditure. The AO relied on judicial decisions such as CIT v. Navsari Cotton and Silk Mills Ltd., Hylam Ltd. v. CIT, and Triveni Engg. Works Ltd. v. CIT to support the disallowance.
On appeal, the CIT(A) observed that the expenditure was indeed incurred for scientific research and development, and the assessee was recognized as a scientific research company by CSIR. The CIT(A) noted that the expenditure was approved by reputed organizations like IDBI, ICICI Bank, and CSIR for collaborative research and development projects. The CIT(A) held that the expenditure constituted revenue expenditure and was allowable u/s 35(1)(i) of the Act, even if it was capitalized in the books of account.
Issue 2: Classification of Expenditure as Capital or Revenue
The CIT(A) further observed that even if the expenditure was considered capital in nature, it would still be covered by clause (iv) of sub-section 1 of section 35 read with sub-section 2(ia) of section 35, which allows deduction of capital expenditure on scientific research. The CIT(A) clarified that section 35(2AB) allows weighted deduction for in-house R&D expenditure by a bio-tech company, while section 35(1) allows separate deductions for different R&D projects. Thus, both deductions are independently allowable.
The Revenue appealed against the CIT(A)'s decision, arguing that the expenditure was incurred during the pre-commencement period and intended for commercial production, resulting in enduring benefits. The Revenue relied on judicial decisions to argue that the expenditure was capital in nature.
The Tribunal, after considering the arguments and relevant case laws, concluded that the expenditure incurred by the assessee was for setting up of facilities for commercial production of new products and not for scientific research. The Tribunal held that the provisions of section 35(1)(i) or (iv) do not apply to the assessee's case, and the expenditure should be treated as capital expenditure. Consequently, the appeals of the Revenue were allowed.
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2013 (7) TMI 1079
Issues involved: Appeal against judgment of Customs, Excise and Service Tax Appellate Tribunal regarding Cenvat Credit availed on Business Auxiliary Services.
Judgment Summary:
The High Court of Andhra Pradesh heard an appeal against the judgment of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Bangalore, dated 2-7-2009. The Tribunal had formulated two questions, with the first question being decided against the appellant as it was not contested. The second question revolved around the legality of demanding Cenvat Credit of &8377; 49,82,605/- availed on service tax paid on Business Auxiliary Services. The Tribunal relied on a previous decision of a Coordinate Bench in the case of Metro Shoes Pvt. Ltd. v. C.C.E., Mumbai, and concluded that the issue was settled based on that decision, which had not been appealed or overturned. Therefore, the High Court deemed the issue as settled between the parties and declined to admit the appeal, ultimately dismissing it.
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2013 (7) TMI 1078
Issues Involved:
1. Whether the business of the Appellants constitutes a Collective Investment Scheme (CIS) u/s 11AA of the SEBI Act.
2. Whether the Appellants violated Section 12(1B) of the SEBI Act and Regulation 3 of the CIS Regulations by not obtaining a certificate of registration from SEBI.
3. Whether the Appellants should be directed to refund the money collected from investors.
Summary:
Issue 1: Whether the business of the Appellants constitutes a Collective Investment Scheme (CIS) u/s 11AA of the SEBI Act.
The Securities and Exchange Board of India (SEBI) conducted an investigation into the activities of NGHI Developers India Limited and its representatives, concluding that they were engaged in fund mobilizing activity from the public by launching CISs as defined in Section 11AA of the SEBI Act. The Appellants argued that they were engaged in the real estate business and that their agreements with customers were for the sale and purchase of land, not a scheme. However, the Tribunal noted that the money collected from customers was pooled and used for the scheme, and the customers had no control over the management and operation of the scheme. The Tribunal referred to the Supreme Court's judgment in PGF Ltd. vs Union of India, which held that similar activities constituted a CIS. The Tribunal concluded that the Appellants' business was indeed a CIS.
Issue 2: Whether the Appellants violated Section 12(1B) of the SEBI Act and Regulation 3 of the CIS Regulations by not obtaining a certificate of registration from SEBI.
The Tribunal noted that Section 12(1B) of the SEBI Act requires all persons intending to float any scheme or arrangement in the nature of a CIS to obtain a certificate of registration from SEBI. Regulation 3 of the CIS Regulations states that only a Collective Investment Management Company shall sponsor CISs. The Appellants did not obtain the required certificate of registration from SEBI. Therefore, the Tribunal found that the Appellants violated Section 12(1B) of the SEBI Act and Regulation 3 of the CIS Regulations.
Issue 3: Whether the Appellants should be directed to refund the money collected from investors.
The Tribunal upheld SEBI's Impugned Order directing the Appellants to refund all the money collected from investors along with the returns due. However, considering the arduous process involved in executing the scheme of repayment to about thirty thousand investors, the Tribunal granted the Appellants six months' time to make the payments to their investors. The Appellants were also directed to submit a report to SEBI detailing the payments made to investors at the end of the six-month period. The Tribunal modified the Impugned Order to this extent and dismissed the appeal with no costs.
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2013 (7) TMI 1077
SEBI proceedings - Passed ad-interim ex-parte order - violation of the principles of natural justice - HELD THAT:- the impugned ad-interim ex-parte order is not sustainable in the eyes of law as it has been passed in gross violation of the principles of natural justice. No complaint as mentioned in the impugned order has ever been supplied to the Appellants by giving them an opportunity of hearing in the matter before the order could be passed. We hasten to add that Respondent No. 1 is empowered to pass ex-parte ad-interim orders in urgent cases but this power is to be exercised sparingly in most deserving cases of extreme urgency. Respondent No. 1 had knowledge of the matter from the very beginning. Paragraph 8 of the impugned order itself makes it abundantly clear that the share price of ZIL fell from ₹ 190/- on September 23, 2011 to ₹ 45/- on November 30, 2011 just in 45 days. In our considered opinion September - October 2011 would have been the right time for SEBI to act, to protect interests of investors, provided it had jurisdiction to do the same in respect of the FCCBs in question. This, however, was not done for almost 15 months for reasons not made known to this Tribunal and any sort of urgency having already disappeared, Respondent No. 1 should have given an opportunity to the Appellants by supplying a copy of the complaint and calling upon them to present their defence. This has admittedly not been done and no cogent and convincing reason has been put forth for depriving the Appellants of such a valuable right of being heard before passing the impugned order in question.
Hence, This court set asides the impugned order and remanding the matter to Respondent No. 1 for fresh consideration in accordance with law by supplying a copy of the complaint to the Appellants in advance and also by deciding the jurisdictional issues raised by the Appellants in the present Appeal before hand. Ordered accordingly.
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2013 (7) TMI 1076
Issues involved: Appeal against order of CIT(A)-VI, Ahmedabad regarding TDS u/s 194C and interest u/s 201(1A) for assessment year 2008-09.
TDS u/s 194C:
The appellant was required to make TDS u/s. 194C for grant-in-aid provided to GMDC and GMRDS. During a survey, it was found that tax was not deducted as required u/s. 194C for payments made to GMDC and GMRDS. The AO held that these payments were contractual and TDS should have been deducted. The CIT(A) confirmed the AO's order based on the judgment in Associated Cement Company case. The appellant argued that the payments were grant-in-aid, not for work done under a contract. The appellant's belief that TDS was not required due to the nature of payments was considered a reasonable cause for non-deduction. The state government resolutions also supported that the payments were grant-in-aid, not for services rendered. The Tribunal allowed the appellant's ground, stating that section 194C did not apply in this case, and hence, the provisions of section 201(1) and 201(1A) were not applicable.
Interest u/s 201(1A):
The AO levied interest of &8377; 1,45,692 for non-deduction of TDS. The CIT(A) upheld this decision along with the addition of &8377; 15,72,059 u/s 201(1). However, the Tribunal allowed the appeal of the assessee, stating that since the payments were grant-in-aid and not for services under a contract, the provisions of section 201(1A) were not applicable. The Tribunal considered the appellant's belief and the state government resolutions as supporting evidence for the non-applicability of TDS provisions in this case.
Separate Judgment:
No separate judgment was delivered by the judges in this case.
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2013 (7) TMI 1075
Issues Involved:
1. Validity of the acquisition proceedings.
2. Validity of the withdrawal of acquisition proceedings.
3. Delay and laches in challenging the acquisition.
4. Allegations of malafides against the Minister.
Summary:
1. Validity of the Acquisition Proceedings:
The Supreme Court upheld the acquisition proceedings initiated by the Pune Municipal Corporation and the Agricultural Produce Market Committee (APMC) for the extension of the market yard. The Court noted that the landowners and Mutha Associates did not file any objections during the planning and acquisition process despite multiple opportunities. The Court emphasized that the challenge to the acquisition was highly belated and barred by inordinate delay and laches. The Court cited the legal position from the Constitution Bench decision in *Aflatoon and Ors. v. Lt. Governor of Delhi and Ors.* (1975) which held that challenges to acquisition proceedings must be timely and vigilant.
2. Validity of the Withdrawal of Acquisition Proceedings:
The High Court quashed the order dated 20th May 1998, passed by the Minister directing the withdrawal of acquisition proceedings. The Supreme Court agreed with the High Court's findings that the withdrawal was invalid due to non-publication in the Official Gazette, non-observance of principles of natural justice, and arbitrary exercise of power. The Court reiterated that a proper notification in the Official Gazette is required for withdrawal u/s 48 of the Land Acquisition Act, as established in *State of Maharashtra v. Umashankar Rajabhau* (1996) and *Larsen and Tourbo Ltd. v. State of Gujarat and Ors.* (1998).
3. Delay and Laches in Challenging the Acquisition:
The Supreme Court concurred with the High Court's decision that the challenge to the acquisition was barred by delay and laches. The Court noted that the planning process started in 1976, and the landowners did not object until much later. The Court emphasized that the legal position, as settled in *Aflatoon and Ors. v. Lt. Governor of Delhi and Ors.* (1975), requires timely challenges to acquisition proceedings to avoid giving a premium on dilatory tactics.
4. Allegations of Malafides Against the Minister:
The Supreme Court reversed the High Court's finding of malafides against the Minister. The Court held that the allegations of malafides were not supported by specific particulars or sufficient proof. The Court emphasized that mere irregularities or procedural lapses do not constitute malafides without clear evidence of improper motive or bias. The Court cited the principles laid down in *State of Bihar v. P.P. Sharma* (1992), *State of M.P. and Ors. v. Nandlal Jaiswal and Ors.* (1986), and *E.P. Royappa v. State of T.N.* (1974) regarding the high standard of proof required for allegations of malafides.
Conclusion:
The Supreme Court dismissed Civil Appeals No. 2853/2002, 2854/2002, and 2855/2002, upholding the acquisition proceedings and imposing costs of Rs. 5,00,000 on Mutha Associates. However, it allowed Civil Appeals No. 2856 and 2857 of 2002, reversing the High Court's finding of malafides against the Minister.
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2013 (7) TMI 1074
Land Acquisition Act, 1894 (Act) - After 37 years of initiation of the acquisition proceedings - Petition for hand over vacant possession of the land - The High Court directed respondent No.5 to hand over a portion of the developed area to the appellant free of cost. - HELD THAT:- the writ petition filled after almost three decades of pronouncement of the award by respondent No.2 and there was no tangible explanation for the delay. We have no doubt that if the appellant had pressed its prayer for issue of a mandamus to the official respondents to deliver possession of the acquired land after evicting the slum dwellers, the High Court would have non-suited it on the ground of laches by taking cognizance of total inaction between 23.6.1998, i.e., the date on which Deputy General Manager (Planning) had written letter to respondent No.2 to hand over vacant possession of the acquired land or refund the compensation, and January, 2006, when exchange of correspondence again started. The High Court would have also taken note of the fact that while the appellant was sleeping over its rights, the Municipal Corporation had sanctioned Slum Rehabilitation Scheme, the Cooperative Society formed by the slum dwellers had entered into development agreement with respondent No.5 and the latter had constructed buildings and handed over 600 units to the slum dwellers for permanent residence and dismissed the writ petition by applying the ratio of the judgment of the Constitution Bench in State of Madhya Pradesh v. Bhailal Bhai 1964 (1) TMI 33 - Supreme Court
Hence, Apex court do not find any justification for entertaining the prayer for issue of a mandamus at this belated stage by ignoring the developments which have taken place in the intervening period.
In the result, the appeal is dismissed as barred by time and also on merits.
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2013 (7) TMI 1073
Issues involved: Dispute over payment of development charges and service tax liability.
Summary:
Issue 1: Payment of Development Charges
The original respondent, G.I.D.C., sought modification of a previous judgment regarding the payment of development charges. The appellant had deposited the development charges as demanded, leading to a direction for G.I.D.C. to issue a No Objection Certificate. However, G.I.D.C. later claimed that the appellant was also liable to pay service tax at 12.36% on the development charges. The court noted that the service tax demand was made after the initial order on development charges, indicating that it could not be levied retrospectively. Despite G.I.D.C.'s arguments, the court found no merit in the claim for service tax, ultimately dismissing the application.
Conclusion:
The application for additional service tax on development charges was dismissed by the court, as the demand was raised after the initial payment and could not be applied retrospectively.
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2013 (7) TMI 1072
Issues involved:
Cross appeals filed by the assessee and the Assessing Officer (AO) against the order of CIT(A)-9 Mumbai regarding disallowance of VSAT charges and transaction charges under section 40(a)(ia) read with section 194 J of Income Tax Act, 1961.
Issue 1: Disallowance of VSAT charges and transaction charges
- Assessee-company declared a loss in its return of income.
- AO determined total income of the assessee, including disallowance of VSAT charges and transaction charges under section 40(a)(ia).
- FAA upheld the disallowance made by the AO.
- AR argued in favor of the assessee, citing judgments and provisions of the Act.
- Tribunal held that VSAT charges were not covered by section 40(a)(ia) based on the Bombay High Court's decision.
- Tribunal remanded the issue of transaction charges back to the FAA for further verification.
- Effective ground of appeal filed by the assessee allowed in part.
Issue 2: Disallowance of business expenses
- AO disallowed business expenses claimed by the assessee.
- FAA held that if expenses were incurred wholly and exclusively for business, they had to be allowed.
- AR contended that the expenses were for business purposes and there was a temporary cessation of business.
- Tribunal found FAA's order lacking clarity on allowable/disallowable items of expenditure.
- Matter remanded back to the FAA for a fresh order with clear findings.
- Effective ground of appeal filed by the AO allowed in part.
Conclusion:
The Tribunal partially allowed the appeals filed by both the assessee and the AO, remanding the issues of VSAT charges, transaction charges, and business expenses for further examination and clarification by the FAA.
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2013 (7) TMI 1071
Issues involved: Petition filed u/s 560(6) of the Companies Act, 1956 seeking restoration of a company due to non-filing of annual returns and balance sheets.
Details of the judgment:
Issue 1: Non-filing of annual returns and balance sheets
The petition was filed seeking restoration of the company as it had not filed its annual returns and balance sheets from 2000 to 2012, along with other statutory forms. The reply from the Registrar of Companies highlighted this non-compliance.
Issue 2: Payment of additional costs
The counsel for the Petitioner acknowledged the non-filing of documents for nearly thirteen years and agreed to pay additional costs along with filing fees to the ROC for the overdue documents.
Issue 3: Restoration of company
After considering the submissions, the court directed the Petitioner to pay a sum of Rs. 20,000 as costs to the Central Government within six weeks. Upon payment, the name of the company would be restored from 'inactive' to 'active' status. The Petitioner was given eight weeks to file all statutory documents, including the overdue annual returns, balance sheets, and other forms, by paying the additional fees as per the Act and Rules.
The petition was disposed of based on the above terms, ensuring compliance with the Companies Act, 1956.
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2013 (7) TMI 1070
Issues involved: Delay in filing appeal, amendment of Bill of Entry, refund of customs duty, interpretation of Sections 149 and 154 of the Customs Act, 1962.
The respondent imported folder material for advertisement from M/s. Swarovski, Austria, with a claimed mistake in declaring the value in Euro instead of Indian rupees. Customs duty was paid, and an application for amendment of the Bill of Entry was made to correct the error and claim a refund of &8377; 5,55,687. The adjudicating authority rejected the claim as time-barred, without addressing the mistake issue or the permissibility of amendment u/s 149 and 154 of the Act. The first appellate authority upheld the rejection as being within the limitation period.
The High Court upheld the Tribunal's decision to remand the matter to the adjudicating officer for consideration of whether amendment of the Bill of Entry is permissible u/s 149 of the Act. The Court emphasized that once the amendment is allowed, the issue of rectification of the order u/s 154 can be examined, finding no error in the Tribunal's decision.
The Court distinguished a Supreme Court case where re-opening and claiming refund were not allowed, noting that the present case involves a different scenario with a lower amount at stake. The Court acknowledged the possibility of Revenue suffering due to clerical errors and arithmetic mistakes. Ultimately, the Court dismissed the application for condonation of delay and the appeal.
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2013 (7) TMI 1069
Issues involved: Challenge to order by Income Tax Appellate Tribunal disallowing commission claimed by appellant for liaison work to sub-agents, legality of orders leading to potential double taxation, deduction claimed u/s 37(1) of the Act charged to tax in hands of payer despite being considered chargeable income in hands of payee.
Commission Disallowance: The appellant, a cement stockiest and sales promoter, received commission and claimed to have paid a portion as commission for liaison work to sub-agents. Assessing Officer disallowed the commission after detailed appraisal, leading to appeals. Tribunal allowed revenue's appeal, set aside CIT (Appeals) order, and rejected appellant's appeal due to failure to establish bona fides of payments to sub-agents.
Legal Question: Appellant raised a question of law regarding deduction claimed u/s 37(1) of the Act being charged to tax in payer's hands despite being considered chargeable income in payee's hands. Tribunal held appellant failed to prove the nature of services rendered by sub-agents, indicating a fraudulent scheme to evade tax, leading to disallowance of claimed deduction.
Tribunal's Decision: Tribunal analyzed evidence and statements, concluding that appellant did not satisfactorily establish incurring the expenditure for business purposes. The claimed liaison commission was disallowed based on lack of evidence regarding services rendered by sub-agents, with reference to past allowances and terms of agreements. Tribunal reversed CIT(A) order, confirming Assessing Officer's addition of the disallowed amount.
Conclusion: The Tribunal's decision was upheld, dismissing the appeal as appellant failed to prove the legitimacy of commission payments, leading to disentitlement to relief. The question raised under Section 29 and 37(1) of the Act was deemed irrelevant due to lack of evidence and fraudulent nature of transactions. The appellant's claim was dismissed, affirming the disallowance of the commission.
Judgment: The High Court upheld the Tribunal's decision, confirming the disallowance of the commission claimed by the appellant for liaison work to sub-agents. The appeal was dismissed, and the legal question raised by the appellant was deemed irrelevant in light of the lack of evidence and fraudulent nature of the transactions.
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2013 (7) TMI 1068
Issues involved: Challenge to order passed by recovery officer under Recovery of Debts due to Banks and Financial Institutions Act, 1993; Jurisdiction of High Court to entertain challenge despite availability of appeal u/s 30 of said Act; Adjudication on possession vs. title by recovery officer; Validity of order of attachment by recovery officer.
The High Court of Calcutta heard a case where the writ petitioners contested an order issued by a recovery officer under the Recovery of Debts due to Banks and Financial Institutions Act, 1993, alleging lack of jurisdiction. The petitioners claimed that despite being appellable u/s 30 of the Act, the order could be challenged in the High Court. The respondent bank had initiated proceedings under Section 19 of the Act, obtained a certificate, and applied for execution of the same, leading to an order of attachment on an immovable property. The petitioners, who had purchased the property at a court sale in 2007, sought to annul the attachment, asserting lack of knowledge regarding the bank's interest in the property. The recovery officer's order was challenged on grounds of exceeding jurisdiction by delving into title disputes, which was beyond the officer's authority.
The petitioners cited legal precedents to support their argument that a writ of certiorari could be issued when the jurisdiction of a quasi-judicial authority is questioned, even if other remedies are available. They also relied on a judgment emphasizing that a recovery officer should only assess possession, not title, of the property in question. The recovery officer's actions were deemed beyond jurisdiction as they involved adjudication on title, which was not within the officer's purview. The High Court, therefore, set aside the recovery officer's order and the attachment, noting that the officer had overstepped authority and disregarded a previous court sale of the property.
The Court allowed the writ petitions, setting aside the recovery officer's order and the attachment. The respondent bank's claim to the property was deemed invalid due to the property belonging to the petitioners at the time of attachment. The petitioners, if able to clarify the circumstances of the property sale during ongoing court proceedings, would have been entitled to substantial costs. Ultimately, no costs were awarded in the case.
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2013 (7) TMI 1067
Issues involved:
The judgment deals with the issue of rectification of mistake by the Assessing Officer u/s. 154/251/143(3) of the Income-tax Act, 1961 regarding the withdrawal of interest on unpaid interest already granted to the assessee.
Details of the Judgment:
1. The appeal was filed by the assessee against the order of the Commissioner of Income-tax (Appeals) confirming the action of the Assessing Officer in rectifying the mistake by withdrawing interest on unpaid interest already granted. The assessment was framed by the DCIT u/s. 154/251/143(3) of the Act for the assessment year 2002-03.
2. The main grounds raised by the assessee were that there was no apparent mistake in the original order, and the Assessing Officer erred in rectifying it. The CIT(A) was also criticized for upholding the revised order. The appellant argued that interest on unpaid interest should have been granted u/s. 244A of the Act.
3. The facts revealed that the assessee filed its return for AY 2002-03, which was processed u/s. 143(1)(a) and later scrutinized. The CIT(A) computed a refund for the assessee, including interest u/s. 244A. However, the AO later withdrew the interest on unpaid interest through a rectification order.
4. The CIT(A) did not grant relief to the appellant on this issue, stating that the AO's calculation of interest u/s. 244A was correct. The appellant then appealed to the ITAT.
5. During the hearing, the appellant's counsel argued that the AO's decision was based on a previous Tribunal judgment and the principles laid down by the Supreme Court. The ITAT considered the relevant legal precedents and observed that the grant of interest on unpaid interest was permissible.
6. Referring to the Supreme Court's decision in the Sandvik Asia Ltd. case, the ITAT held that the appellant was entitled to interest on the amounts paid under sections 214 and 244. The ITAT also cited a decision of the Madhya Pradesh High Court supporting the grant of interest under sections 244 and 244A.
7. The ITAT concluded that the issue of interest on unpaid interest was debatable and that the Assessing Officer had no jurisdiction to rectify the order. Therefore, the ITAT allowed the appeal of the assessee.
8. In the final decision, the ITAT ruled in favor of the assessee, holding that the grant of interest on unpaid interest was justified based on legal precedents and dismissed the jurisdiction of the Assessing Officer to rectify the order.
This judgment highlights the importance of legal precedents and the correct application of tax laws in determining the entitlement to interest on unpaid interest under the Income-tax Act, 1961.
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