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2008 (10) TMI 723
Issues involved:
The issues involved in this case are:
1. Applicability of section 115JB on the assessee's income calculation.
2. Whether the assessee's failure to declare dividends affects the applicability of section 115JB.
3. Claim for costs of appeal under section 254(2B) of the Income-tax Act, 1961.
Issue 1: Applicability of section 115JB:
The assessee, engaged in Share Dealing and Investment, declared a loss but earned a net profit as per the Profit & Loss Account. The assessing officer determined the Book Profit under section 115JB, leading to a tax liability. The CIT(A) upheld this decision. The assessee contended that the issue was covered by a Tribunal order and a High Court judgment in favor of the assessee, citing the case of CIT - Vs- Vishnu Sugar Mills Ltd. The Departmental Representative objected, arguing that the previous judgments did not consider section 115JB and relevant Supreme Court decisions. The Tribunal found the objections invalid, stating that the High Court judgment did indeed pertain to section 115JB, and upheld the appeal on this ground.
Issue 2: Impact of Undeclared Dividends on section 115JB:
The assessee argued that since no dividends were declared, section 115JB should not apply, citing a specific case. The Departmental Representative raised objections based on different sections and court decisions. The assessee countered, asserting that the High Court judgment in question specifically related to section 115JB. The Tribunal found in favor of the assessee on this issue as well.
Issue 3: Claim for Costs of Appeal:
The assessee sought costs of appeal under section 254(2B) due to alleged non-compliance with binding judgments by lower authorities. However, this ground was not pressed and was consequently dismissed.
In conclusion, the appeal filed by the assessee was partly allowed based on the findings related to the applicability of section 115JB and the impact of undeclared dividends. The claim for costs of appeal was dismissed.
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2008 (10) TMI 722
Issues involved: Appeal against acquittal u/s 138 of Negotiable Instruments Act, 1881.
Complainant's Case:
The complainant filed a case for dishonour of a cheque issued by the accused. The complainant alleged that the accused had taken a loan and issued a cheque towards part payment, which was dishonoured. The Magistrate convicted the accused, but the Sessions Court acquitted him based on lack of proof of loan and non-recoverable amount. The complainant argued that the lower court's findings were contrary to evidence, emphasizing the accused's failure to respond to the notice and the signature on the cheque. The complainant also cited legal precedents to support his case.
Accused's Defense:
The accused contended that the Goa Money Lenders Act, 2001 applied to the case and that no loan was advanced by the complainant. The accused highlighted contradictions in the complainant's evidence and the lack of steps taken to recover the alleged balance amount. The defense relied on legal judgments to support their position.
Court's Analysis:
The court analyzed the evidence presented by both parties. The main issue was whether the cheque was issued for a legally enforceable debt and if the loan was actually given. The complainant's inconsistent statements regarding the purpose and source of the loan raised doubts. The court noted discrepancies in the complainant's testimony and lack of corroborative evidence. The accused denied receiving any loan, and the document presented did not support the complainant's claim. The court found that the lower court's decision to acquit the accused was justified as the burden of proof was not met. The court did not delve into the Goa Money Lenders Act applicability, as the appeal was dismissed based on the lack of loan proof and rebuttal of presumption u/s 139 of the Act.
Conclusion:
The court dismissed the appeal, upholding the lower court's decision to acquit the accused. The bail bond of the respondent was discharged.
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2008 (10) TMI 721
Issues involved: Quashing of FIR under Andhra Pradesh Excise Act and Prohibition Act u/s 482 of CrPC by High Court of Andhra Pradesh.
Judgment Summary:
1. The High Court of Andhra Pradesh quashed FIRs alleging offences under Andhra Pradesh Excise Act and Prohibition Act, related to transporting or storing black jaggery/molasses for manufacturing illicit liquor or abetting such offence. The accused moved u/s 482 of CrPC for quashing, which was accepted by the High Court due to lack of material showing intent for manufacturing illicit liquor.
2. State of Andhra Pradesh contended that High Court's approach was erroneous as there was material indicating the commission of a crime. The exercise of power u/s 482 of CrPC was deemed indefensible.
3. The power u/s 482 of CrPC is an exception and not the rule, meant to prevent abuse of court process and secure justice. The High Court's decision to quash the FIR was considered unjustified.
4. No appearance on behalf of the respondents despite notice.
5. The inherent jurisdiction u/s 482 of CrPC is wide but must be exercised sparingly, with caution, and only when justified by specific tests laid down in the Section. The Court does not function as an appellate or revisional authority while exercising this power.
6. Referring to R.P. Kapur v. State of Punjab, categories were outlined where inherent power can be exercised, including cases where allegations do not constitute the offence alleged or where evidence fails to prove the charge.
7. The High Court should refrain from giving a prima facie decision when facts are incomplete. The power to quash proceedings is to be used only when the complaint is frivolous, vexatious, or oppressive.
8. The High Court's power u/s 482 of CrPC is wide but must not stifle legitimate prosecutions. The decision to quash proceedings should be based on sound principles and not on incomplete facts.
9. In these cases, statements of witnesses or seizure of materials for manufacturing illicit liquor were relevant. The determination of culpability is a matter for trial, and interference with the FIR should be in exceptional circumstances.
10. The High Court was not justified in quashing the FIR as the materials indicated the commission of an offence, which should be decided at trial.
11. The action of the High Court in quashing the FIR was set aside based on legal principles.
12. The State was directed to conduct early investigation and submit a report without delay, without expressing any opinion on the case's merits.
13. All appeals were allowed based on the above reasons.
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2008 (10) TMI 720
Issues Involved:
1. Whether the plea of limitation can be decided as a preliminary issue of jurisdiction under Section 9A of the Code of Civil Procedure.
2. Whether the appellants are entitled to claim the benefit of Section 14 of the Limitation Act.
Detailed Analysis:
1. Plea of Limitation as a Preliminary Issue of Jurisdiction under Section 9A of CPC:
The appellants contended that the bar of limitation should not be regarded as an objection to the jurisdiction of the court under Section 9A of the Code of Civil Procedure, 1908. They argued that the term 'jurisdiction' in Section 9A must be construed harmoniously with Section 9, CPC, and cited various judgments, including *Ittyavira Mathai v. Varkey Varkey* where it was held that an objection to limitation is not an objection as to jurisdiction. The appellants also pointed out that the larger bench judgment in *Pandurang Dhondi Chougule v. Maruti Hari Jadhav* pertains to revisional jurisdiction under Section 115, CPC, and thus has a different context.
The respondents, however, argued that a question of limitation is a question of jurisdiction and ousts the court's jurisdiction to decide the matter on merits. They cited several cases, including *Pandurang Dhondi Chougule v. Maruti Hari Jadhav* where the Supreme Court held that a plea of limitation concerns the jurisdiction of the court. They also referenced *Smithkline Beecham Consumer Health Care v. Hindustan Lever Ltd.* where it was held that Section 9A applies when a suit is barred by any statute, including the Limitation Act.
The court concluded that the plea of limitation is indeed a plea of law that concerns the jurisdiction of the court. The court referenced *Pandurang Dhondi Chougule v. Maruti Hari Jadhav*, which held that a plea of limitation is a plea of law that concerns the jurisdiction of the court. The court also noted that Section 3 of the Limitation Act mandates the court to dismiss the suit if it is barred by limitation, thus affecting the court's jurisdiction. Therefore, the plea of limitation can be decided as a preliminary issue under Section 9A of the CPC.
2. Entitlement to Claim the Benefit of Section 14 of the Limitation Act:
The appellants contended that their suit was within time even without the benefit of Section 14 of the Limitation Act, 1963. They argued that their causes of action arose from the revalidation certificates issued by Respondent No. 7 and alleged acts of trespass, and thus Article 58 of the Limitation Act did not apply. They also argued that they had prosecuted their suit in good faith and with due diligence in the Bombay City Civil Court.
The respondents argued that the appellants cannot avail of the benefit of Section 14 of the Limitation Act. They contended that the amendment to the plaint was an afterthought and not substantiated by any oral evidence. They cited several cases, including *Madhavrao Narayanrao Patwardhan v. Ram Krishna Govind Bhanu*, which held that the burden is on the plaintiff to prove that the case is covered by Section 14 of the Limitation Act.
The court observed that the appellants had not led any oral evidence to substantiate their claim that the suit was prosecuted with due diligence and in good faith. The court referenced *Madhavrao Narayanrao Patwardhan v. Ram Krishna Govind Bhanu*, which held that the burden is on the plaintiff to prove that the case is covered by Section 14 of the Limitation Act. The court concluded that the appellants cannot claim the benefit of Section 14 of the Limitation Act by merely amending the plaint without adducing any evidence.
Conclusion:
The court found no error or illegality in the judgment and order of the learned Single Judge dated 20.01.2006. The appeal was dismissed, with no order as to costs.
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2008 (10) TMI 719
Issues Involved:
1. Contractual Obligations and Breach
2. Issuance of Transit Permits
3. Refund of Deposits
4. Legal Right and Corresponding Duty
5. Jurisdiction of High Court under Article 226
6. Fairness and Arbitrariness of State Action
Detailed Analysis:
1. Contractual Obligations and Breach:
The appellant, a Government of Karnataka Undertaking, engaged in the sale of seized granite blocks under specific tender terms. The respondent participated in the tender and was required to pay the sale value plus taxes. A dispute arose regarding the balance payment and the delivery of granite blocks. The appellant claimed that the respondent failed to complete the payment within the stipulated period, leading to a breach of contract. The respondent countered that they were unable to lift the granite blocks due to the non-issuance of necessary permits by the appellant.
2. Issuance of Transit Permits:
The contract required the issuance of transit permits for the transportation of granite blocks. A significant issue was the failure to issue these permits, which was compounded by a scandal involving fake permits. The Karnataka Legislative Assembly's Joint Committee objected to the issuance of permits, leading to a directive to refund the amounts paid by the purchasers. The appellant argued that it was not feasible to refund the sale price and requested the issuance of permits instead.
3. Refund of Deposits:
The respondents sought a refund of the amounts paid due to the failure to obtain the necessary permits. The High Court directed the appellant to refund the amounts with interest, emphasizing that the appellant, as an agent, was bound by the instructions of the principal (State of Karnataka). The appellant's refusal to refund was based on financial constraints and the contention that the respondents failed to fulfill their contractual obligations.
4. Legal Right and Corresponding Duty:
The High Court's jurisdiction under Article 226 was invoked to enforce the contractual obligations. The appellant contended that the respondents had no legal right to demand a refund and that the High Court could not enforce a contract qua contract. The respondents argued that the State's action in terminating the agency and directing a refund created a legal right for them.
5. Jurisdiction of High Court under Article 226:
The High Court exercised its jurisdiction under Article 226, concluding that the appellant's actions were arbitrary and unfair. The court emphasized that while normally it would not enforce contractual terms, it could intervene when state actions violated Article 14 of the Constitution. The appellant's failure to issue permits and the subsequent refusal to refund the amounts paid were deemed arbitrary.
6. Fairness and Arbitrariness of State Action:
The Supreme Court noted the appellant's dominant position and the unfairness in its actions. The appellant's suppression of facts and the State's failure to take a positive stand were criticized. The court held that the appellant's conduct was not based on legal premises but on its financial difficulties, and it was obligated to act upon the State's directive to refund the amounts.
Conclusion:
The Supreme Court dismissed the appeals, upholding the High Court's orders for refunds with interest. The court emphasized the importance of fairness and the obligation of the State and its agencies to act transparently and justly. The appeals were dismissed with costs, reinforcing the principle that state actions must adhere to constitutional mandates of fairness and non-arbitrariness.
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2008 (10) TMI 718
Issues Involved:
1. Conviction u/s 498A IPC.
2. Delay in lodging the First Information Report (FIR).
3. Re-appreciation of evidence by the High Court.
Summary:
1. Conviction u/s 498A IPC:
The Supreme Court reviewed the appeal against the High Court's decision which acquitted the respondent-accused (A-1) from the charge of offence punishable u/s 498A IPC. The Trial Court had convicted A-1 based on evidence indicating harassment for dowry and sentenced him to one year of simple imprisonment and a fine of Rs. 8000/-. However, the High Court, upon re-appraisal of the evidence, set aside the conviction, leading to the State of Andhra Pradesh's appeal to the Supreme Court.
2. Delay in lodging the First Information Report (FIR):
The complainant (PW-1) lodged the FIR on 22nd May 1996, a month after the alleged incident of poisoning on 19th April 1996. The Supreme Court emphasized the importance of prompt FIR lodging, noting that delays often lead to embellishments and exaggerations. The complainant's delay in filing the FIR without satisfactory explanation raised doubts about the genuineness of the complaint and the veracity of the evidence.
3. Re-appreciation of evidence by the High Court:
The High Court re-appreciated the evidence, particularly the testimonies of PW-1 and her father (PW-3), and found inconsistencies and lack of corroboration. The High Court noted that the allegations of harassment were linked to the demand for Rs. 50,000/- for purchasing a lorry, but the evidence did not support continuous harassment. The Supreme Court upheld the High Court's view that the evidence was insufficient to convict A-1 u/s 498A IPC, especially given the delayed FIR and the lack of specific instances of harassment.
Conclusion:
The Supreme Court concluded that the High Court's judgment acquitting the respondent did not suffer from any infirmity. The appeal was dismissed, affirming the High Court's decision.
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2008 (10) TMI 717
Issues involved: Compliance with conditions of provisional registration, misleading information to investors, winding up of schemes.
Compliance with conditions of provisional registration:
The case involved an appeal by a Collective Investment Management Company against an order directing it to wind up schemes due to non-compliance with conditions of provisional registration. The company failed to appoint trustees, meet net worth requirements, and comply with various regulations. The auditors highlighted several non-compliances, including accepting funds without proper registration. The Tribunal found the company's actions to be in violation of regulations and upheld the order to wind up the schemes.
Misleading information to investors:
The Tribunal noted that the company issued misleading information memoranda to investors, falsely promising higher returns than what was actually offered. Small investors, particularly from remote villages, were deceived into remaining invested in the schemes. This misconduct was considered serious, leading to the decision to uphold the order for winding up the schemes. The company's misleading statements were deemed unacceptable, especially given the vulnerable nature of the affected investors.
Winding up of schemes:
Ultimately, the Tribunal dismissed the appeal, directing the company to wind up the schemes as per regulations and repay investors accordingly. The company was instructed to send revised information memoranda to investors after Board approval. Upon compliance, the Board was to release funds for repayment to investors. The Tribunal also ordered the company to bear the costs incurred by the Board in the legal proceedings.
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2008 (10) TMI 716
Issues involved:
The issues involved in the judgment are the impleadment of parties in an administration suit, the scrutiny of transactions concluded by deceased individuals, and the authority of the Court in determining the extent of the estate of the deceased.
Impleadment of Appellants in Administration Suit:
The Respondent filed a suit for administration of the Estate of his deceased parents and sought to challenge alienation of properties. The High Court allowed the impleadment of the Appellants as necessary parties to the suit, despite their objection that they were only shareholders in a company related to the transactions. The Appellants contended that transactions by the deceased during their lifetime cannot be questioned in an administration suit. However, the Court held that in an administration suit for a person who dies intestate, examining transactions involving the properties of the Estate is necessary to determine the assets of the Estate. The Court found the impleadment of the Appellants as parties to the administration suit to be valid.
Scrutiny of Transactions:
The Appellants argued that transactions concluded by the deceased during their lifetime should not be questioned after their death in administration proceedings. They relied on previous judgments related to probate proceedings where the Court does not decide questions of title in the deceased's Estate. However, the Court differentiated between probate and administration suits, stating that in an administration suit for a person who dies intestate, examining transactions involving the properties of the Estate is essential to determine the assets of the Estate. The Court upheld the High Court's decision to allow scrutiny of transactions and impleadment of the Appellants in the administration suit.
Authority of the Court in Determining Estate's Extent:
The Court clarified that in an administration suit, the Court determines the extent of the deceased's estate at the time of death to facilitate distribution to heirs, without deciding right and title in the properties. The Court highlighted the distinction between probate and administration suits, where in administration suits, examining transactions involving the properties of the Estate is permissible to ascertain the assets of the Estate. The Court upheld the High Court's decision to allow scrutiny of transactions and impleadment of the Appellants in the administration suit.
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2008 (10) TMI 715
Issues Involved:
1. Validity of the rectification order u/s 154 of the Income Tax Act.
2. Time-barred nature of the rectification order.
Summary:
Issue 1: Validity of the rectification order u/s 154 of the Income Tax Act
The appeal by the revenue challenges the order of the Commissioner (Appeals), Coimbatore, which held that the rectification order passed by the assessing officer u/s 154 was invalid and void ab initio. The original assessment order was passed u/s 143(3) on 30-3-1999. Subsequent rectification orders were issued on various dates, but none addressed the issue of exemption u/s 10B. The Commissioner (Appeals) concluded that the rectification order dated 3-3-2006 was invalid as it attempted to rectify an issue from the original assessment order, which was beyond the permissible four-year period stipulated u/s 154(7).
Issue 2: Time-barred nature of the rectification order
The learned departmental Representative argued that the rectification was within four years of the earlier rectification order, citing case laws such as Hind Wire Industries Ltd. v. CIT, Waldies Ltd. v. CIT, and Salem Co-operative Spg. Mills Ltd. v. CIT. However, the Tribunal noted that these cases involved rectifications on the same matter as the intervening orders. In contrast, the present case involved a rectification of the original assessment order, not the intervening orders. Therefore, the rectification sought by the revenue was beyond the four-year limitation period from the date of the original order, making it time-barred.
The Tribunal upheld the Commissioner (Appeals)'s decision, stating that the impugned rectification order was invalid and void ab initio due to being time-barred. Consequently, the appeal filed by the revenue was dismissed.
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2008 (10) TMI 714
Issues Involved:
1. Deletion of Respondent Nos. 2 and 3.
2. Grant of Temporary Injunction.
3. Appointment of Court Commissioner.
4. Interpretation and Application of Civil Procedural Law.
Summary:
1. Deletion of Respondent Nos. 2 and 3:
The petitioner sought leave to delete respondent Nos. 2 and 3 from the writ petition, as respondent No. 1 was appearing on caveat. The court granted the leave and ordered the deletion to be carried out forthwith.
2. Grant of Temporary Injunction:
The petitioner, as the plaintiff in RCS No. 182 of 2007, filed a suit for declaration and perpetual injunction. The trial court allowed the application for temporary injunction on 31.12.2007, restraining defendants from interfering with the plaintiff's possession of the suit property until the decision of the suit.
3. Appointment of Court Commissioner:
The defendants challenged the temporary injunction order by filing Misc. Civil Appeal No. 4 of 2008. The appellate court initially appointed a Court Commissioner u/s 151 of CPC, which was quashed by the High Court in Writ Petition No. 488 of 2008. Subsequently, the defendants filed an application u/s Order XXVI Rule 9 of CPC, which was allowed by the first appellate court. The High Court found that the order appointing the Commissioner was not in consonance with Order XXXIX Rule 7 of CPC and quashed it, stating that the matter required evidence from the parties rather than a court-appointed investigation.
4. Interpretation and Application of Civil Procedural Law:
The judgment elaborated on the importance of civil procedural law, emphasizing that it is a necessary legal and social instrument for attaining justice. The court discussed the provisions of Section 75 and Order XXVI Rule 9 of CPC, highlighting that the appointment of a Commissioner should be for elucidating any matter in dispute or ascertaining the market value of any property. The court also noted that the application for the appointment of a Commissioner should be treated with judicial discretion and not be used to collect evidence that can be presented in court.
Conclusion:
The High Court quashed the order of the first appellate court appointing a Commissioner, stating that the issue at hand required evidence from the parties and not a court-appointed investigation. The court directed the lower appellate court to decide and dispose of Misc. Civil Appeal No. 4 of 2008 expeditiously, ensuring that temporary injunction applications are considered promptly as per Order XXXIX Rule 1 and 2 of CPC. The writ petition was allowed, and the rule was made absolute with no order as to costs.
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2008 (10) TMI 713
Quashing of a First Information Report (FIR) - commission of offences of cheating, criminal breach of trust and forgery - High Court exercised its inherent jurisdiction u/s 482 of the CrPC wholly illegally and without jurisdiction - Appellant lodged a FIR against the respondents u/s 409, 420 and 468 r/w Section 34 - First and second respondent approached the High Court for an order for quashing FIR - High Court allowed the proceedings - admittedly the investigation was not even complete - Vicarious liability of Respondent Nos. 1 and 2 -
LKP Shares and Securities Ltd. (the Company) is a company registered and incorporated under the Indian Companies Act, 1956 -Respondent No. 1 is its President, the second respondent is its Branch Coordinator. Both of them are stationed at Bombay which is its headquarters. It has many branches including the one at Chennai. Every branch is said to be an independent entity.
Respondent No. 3 who has been arrayed as accused No. 3 in the FIR was the Branch Manager of the company at Chennai. Indisputably, all interactions and transactions by and between the appellant and the company, if any, were made by the complainant only with the respondent No. 3.
HELD THAT:- The allegations contained in the FIR, do not disclose an offence against the respondent Nos 1 and 2. They have in their individual capacity been charged for commission of offences of cheating, criminal breach of trust and forgery.
As there had never been any interaction between the appellant and them, the question of any representation which is one of the main ingredients for constituting an offence of cheating, as contained in Section 415 of the IPC, could not arise. Similarly, it has not been alleged that they were entrusted with or otherwise had dominion over the property of the appellant or they have committed any criminal breach of trust.
So far as allegations in regard to commission of the offence of forgery are concerned, the same had been made only against the respondent No. 3 and not against the respondent No. 2. Sending a copy thereof to the National Stock Exchange without there being anything further to show that the respondent No. 2 had any knowledge of the fact that the same was a forged and fabricated document cannot constitute offence.
We do not find any legal infirmity in the impugned judgment. however, we must clarify one aspect of the matter.
Respondent No. 3, arrayed as accused No. 3 in the FIR, did not file any application u/s 482 of the CrPC. We do not know under what circumstances, the High Court directed service of the notice on him. Nowhere in the impugned judgment, High Court found that the allegations contained in the First Information Report against the respondent No. 3 also do not disclose commission of any cognizable offence. It is one thing to say that he has not committed the same but it is another thing that the High Court's jurisdiction u/s 482 of the CrPC could have been invoked at this stage.
Therefore, we have no other option but to hold that the High Court in its judgment cannot be said to have covered the case of the respondent No. 3. The investigation against him, therefore, shall continue. However, it will be open to him to take appropriate defences at appropriate stages as are permissible in law.
The appeal is dismissed.
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2008 (10) TMI 712
Issues Involved:
1. Depreciation on plant and machinery, specifically roads.
2. Classification of roads as plant and machinery or building.
3. Alternative claim for expenditure as revenue expenditure.
4. Provision for doubtful debts.
Issue-wise Detailed Analysis:
1. Depreciation on Plant and Machinery, Specifically Roads:
The primary issue was whether the Assessee was entitled to depreciation on roads constructed under a concession agreement with the Government of Tamil Nadu. The Assessee claimed depreciation amounting to Rs. 12,09,08,953/-, with Rs. 11,78,04,917/- attributed to roads. The Assessing Officer denied this claim, stating that roads did not figure in the depreciation schedule as plant and machinery, relying on the Supreme Court decision in Indore Municipal Corporation v. CIT, which held that roads are not buildings. The Assessee argued that roads should be considered plant and cited several judicial precedents, but the Assessing Officer remained unconvinced.
2. Classification of Roads as Plant and Machinery or Building:
The CIT(Appeals) upheld the Assessing Officer's decision, stating that the Assessee did not own the road, nor was it used for the Assessee's business purposes. The road was constructed on government land, and the Assessee merely collected tolls as compensation for construction expenses. The CIT(Appeals) found that the Assessee did not meet the basic requirements for depreciation under Section 32 of the Act and dismissed the Assessee's contentions. The Tribunal, however, examined the agreement and project details, noting that the project involved significant infrastructure development. Despite this, the Tribunal concluded that the road could not be considered a plant but directed that depreciation be allowed under the category of building, as subsequent amendments to the depreciation schedule included roads under buildings.
3. Alternative Claim for Expenditure as Revenue Expenditure:
The Assessee alternatively contended that the entire expenditure should be allowed as revenue expenditure, citing the Supreme Court decision in CIT v. Madras Auto Services Pvt. Ltd. The CIT(Appeals) dismissed this claim, noting that the facts of the cited case differed significantly from the Assessee's case. The Tribunal also rejected this claim, pointing out that the Assessee's expenditure on government land could not be treated as revenue expenditure under the amended provisions of the Act.
4. Provision for Doubtful Debts:
In a separate ground, the Assessee challenged the disallowance of a provision for doubtful debts amounting to Rs. 1,22,02,790/-. The CIT(Appeals) had relied on the jurisdictional High Court decision in DCIT v. Beardsell Ltd., which held that a doubtful debt could not be considered an ascertained liability and thus could not be excluded from book profits. The Tribunal upheld the CIT(Appeals)' decision, finding no error in the application of this precedent.
Conclusion:
The Tribunal concluded that the Assessee's capital expenditure on roads should be eligible for depreciation under the category of building, following the amended depreciation schedules. The Assessee's alternative claim for treating the expenditure as revenue expenditure was rejected. The provision for doubtful debts was also disallowed, consistent with jurisdictional High Court precedent. The appeals filed by the Assessee were partly allowed, with the direction to the Assessing Officer to allow depreciation on roads as buildings.
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2008 (10) TMI 711
Issues involved:
The issues involved in this case are the forfeiture of earnest money deposit (EMD) by the Andhra Pradesh Housing Board (APHB) and the legality of the auction conducted on 5-8-2005.
Forfeiture of EMD:
The petitioners contended that APHB did not disclose defects in title, leading to a breach of contract u/s 55 of the Transfer of Property Act, 1882. They argued that the forfeiture of EMD was illegal and sought a writ of Certiorari to quash the impugned order and declare the auction null and void.
Legal Relationship and TCAN:
The legal relationship between the tenderer and the authority inviting tenders is governed by the Terms and Conditions of Auction Notification (TCAN). The TCAN, being binding administrative instructions, must be strictly complied with by both parties. The relevant TCAN conditions in this case were (1), (2), (4), and (11), which outlined the deposit requirements, auction procedures, and responsibilities of the purchaser.
Enforceability of TCAN:
The court held that the highest bidder's rights only arise upon confirmation of the auction by the Vice Chairman (VC), as per TCAN. Before this confirmation, the TCAN, including provisions on forfeiture of EMD, govern the transaction. The court emphasized that the principles of contract and the Transfer of Property Act do not apply at the pre-contract stage regulated by TCAN.
Caveat Emptor Clause:
The court highlighted the "caveat emptor" clause in TCAN, which places the responsibility on the buyer to satisfy themselves about the property before bidding. The petitioners, having participated in the auction and submitted the highest bid, could not later claim defects in the title as grounds for non-payment.
Prevention of Withdrawal and Forfeiture:
The court noted that the petitioners had the opportunity to seek clarification from APHB before submitting their bid. By participating in the auction with full knowledge of TCAN, the petitioners could not later withdraw from the bid without consequences, including forfeiture of EMD and bid amount as per TCAN.
Precedents and Legal Interpretation:
The court cited precedents where the right of forfeiture was upheld when tender conditions were not complied with. It emphasized the importance of earnest money/security in government contracts to ensure genuine bids and prevent non-serious bidders from benefiting from their own conduct.
Conclusion:
Based on the legal interpretation and precedents, the court held that the impugned order of forfeiting the EMD was not illegal. The writ petition was dismissed, and no costs were awarded.
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2008 (10) TMI 710
The Supreme Court directed the alleged contemnor to publish a fresh seniority list as per previous directions. The petitioners agreed to withdraw a pending writ petition in the Madras High Court. Contempt petition adjourned for six weeks. Promotees allowed to intervene in the contempt proceedings.
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2008 (10) TMI 709
Issues involved: Appeal u/s 260A of the Income-tax Act, 1961 regarding the treatment of advertising/publicity expenditure as revenue or capital in nature for the assessment year 2000-01.
Summary:
1. The appeal was filed by the revenue against the order of the Income-tax Appellate Tribunal regarding the treatment of expenditure on advertising/publicity for the assessment year 2000-01.
2. The Assessing Officer disallowed 1/3rd of the expenditure, considering it to be of capital nature. However, the Commissioner of Income-tax (Appeals) allowed the entire expenditure under section 37(1) of the Income-tax Act, stating it was revenue in nature.
3. The Income-tax Appellate Tribunal upheld the decision of the Commissioner of Income-tax (Appeals), stating that the expenditure was of a revenue nature and allowable u/s 37(1) of the Income-tax Act.
4. A similar issue had arisen for the assessment year 2001-02, where the revenue filed an appeal. However, the High Court had earlier held that no substantial question of law arose in that case.
5. Since the issue in the present appeal did not raise any substantial question of law, the High Court dismissed the appeal.
In conclusion, the High Court dismissed the appeal filed by the revenue regarding the treatment of advertising/publicity expenditure as revenue or capital in nature for the assessment year 2000-01, as it did not raise any substantial question of law.
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2008 (10) TMI 708
The High Court of Bombay heard a case regarding the registration and import permit requirements for an importer of insecticides for non-insecticidal use. The court admitted the case based on substantial questions of law related to the Insecticides Act, 1968 and Import Policy. The case also involved the import of Cyplus Sodium Cyanide Bricks for non-insecticidal purposes without proper registration and import permit, which was questioned under Section 9 of the Insecticides Act, 1968. The case is to be heard along with Customs Appeal No. 35 of 2006.
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2008 (10) TMI 707
Issues involved:
The issue involves the jurisdiction of the Deputy Commissioner of Income-tax to pass a rectification order u/s 154 of the Income-tax Act, 1961 regarding the computation of deduction u/s 80HHC, specifically in relation to the deduction of unabsorbed depreciation and unabsorbed losses from the profits of the business.
Summary:
Facts of the case:
The assessee computed the income under normal provisions of the Income-tax Act, adjusting against brought forward losses and depreciation. The Deputy Commissioner of Income-tax initially computed the income at a certain amount under normal provisions. Subsequently, rectification orders were passed adjusting the carried forward unabsorbed depreciation and losses, leading to a dispute regarding the deduction under section 80HHC.
Contentions:
The assessee contended that the issue of deducting unabsorbed depreciation and losses while computing deduction u/s 80HHC was debatable, citing precedents and High Court judgments supporting their stance. The High Court's interpretation emphasized the legislative intent behind section 80HHC to encourage exports and maximize benefits for exporters.
Legal arguments:
The learned Counsel for the assessee argued that the issue was debatable, referencing the criteria for a mistake apparent on record as per Supreme Court precedents. It was highlighted that various High Courts had supported the interpretation similar to the Bombay High Court's judgment in a related case.
Decision:
The High Court concluded that the Deputy Commissioner of Income-tax lacked jurisdiction to pass the order under section 154 as the issue regarding deduction u/s 80HHC was debatable. The judgment favored the assessee, emphasizing the debatable nature of the issue and the lack of clarity in the legal interpretation.
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2008 (10) TMI 706
Issues Involved:
1. Conviction under Section 302 IPC.
2. Defense of mental illness under Section 84 IPC.
Issue-wise Detailed Analysis:
1. Conviction under Section 302 IPC:
The appellant was found guilty of the offence punishable under Section 302 of the Indian Penal Code (IPC) by the Additional Sessions Judge, Jalgaon, and sentenced to life imprisonment and a fine. The incident occurred on the night between 18th and 19th July 2002, at approximately 4:00 a.m. in Ward No. 14 of Civil Hospital, Jalgaon, where both the appellant and the deceased were lodged. The prosecution's case was supported by the depositions of ASI Ukhadu Tadvi (PW-2), nurse Suman Bhave (PW-3), and guard Bhagwat Sutar (PW-4), along with the complaint filed by ASI Tadvi. The deceased was found hanging from the cot with a head injury, and the appellant had freed himself from handcuffs and was caught by the guards. The trial culminated in the conviction of the appellant, which was upheld by the High Court.
2. Defense of Mental Illness under Section 84 IPC:
The appellant raised the defense of mental illness under Section 84 IPC, claiming that he was incapable of knowing the nature of the act due to unsoundness of mind. Section 84 IPC exonerates a person from liability if, at the time of the act, they are incapable of knowing the nature of the act or that it is wrong or contrary to law due to unsoundness of mind. The burden of proof lies on the accused to establish insanity, which is not as onerous as the prosecution's burden to prove the crime. The trial court and the High Court both rejected this defense, finding no substantial evidence to support the claim of insanity.
The evidence presented by the doctors who attended the appellant, Dr. Satish Patil (PW-9) and Dr. Subhash Badgujar (PW-10), indicated that the appellant was not suffering from any psychiatric illness at the time of the incident. Dr. Satish Patil stated that he did not find any obvious psychiatric illness upon examining the appellant, and Dr. Subhash Badgujar confirmed that the appellant was not mentally ill from 18.7.2002 to 25.7.2002. Their testimonies suggested that the appellant was calm, quiet, and not showing signs of anger or shouting, indicating normal behavior.
The court emphasized that the legal test of responsibility under Section 84 IPC requires proving that the accused was incapable of knowing the nature of the act or that it was wrong or contrary to law due to unsoundness of mind. The appellant failed to meet this burden of proof, and the evidence did not support the claim of insanity. Consequently, the trial court and the High Court correctly held that Section 84 IPC did not apply to the appellant's case.
Conclusion:
The Supreme Court dismissed the appeal, finding no merit in the appellant's claim of unsoundness of mind and upholding the conviction and sentence under Section 302 IPC. The judgment emphasized the distinction between legal insanity and medical insanity and the necessity for the accused to prove the former to avail the protection under Section 84 IPC.
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2008 (10) TMI 705
Issues Involved:
1. Whether the appellant executed trades with the intention of artificially raising the price of the scrip of JIK Industries Limited.
2. Whether the appellant violated Regulation 4(a) and 4(c) of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995.
Summary:
Issue 1: Intention of Artificially Raising the Price
The primary question was whether the appellant executed trades on behalf of its client with the intention of artificially raising the price of the scrip of JIK Industries Limited (JIK). The adjudicating officer found the appellant guilty of violating Regulation 4(a) of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995, by executing trades to artificially raise the price of JIK. However, the Tribunal observed that the appellant executed genuine trades through the trading system of the exchanges, and there was no collusion between the buyer and the seller. The Tribunal emphasized that a genuine trade reflects a genuine price of the scrip and that artificial price manipulation requires collusion, which was not established in this case.
Issue 2: Violation of Regulation 4(a) and 4(c)
The appellant was charged with violating Regulation 4(a) and 4(c) of the Regulations. Regulation 4(a) prohibits transactions intended to artificially raise or depress the prices of securities, while Regulation 4(c) prohibits transactions that are not genuine trade transactions. The adjudicating officer found the appellant guilty of violating Regulation 4(a) but did not record any finding for violating Regulation 4(c). The Tribunal noted that the adjudicating officer did not deal with the charge under Regulation 4(c), and thus, it was deemed to have been dropped. The Tribunal concluded that the buy orders executed by the appellant were genuine transactions and not intended to artificially raise the price of the scrip. The Tribunal also highlighted that the appellant's trading pattern indicated a desire to purchase shares rather than manipulate prices.
Conclusion:
The Tribunal concluded that the appellant did not artificially raise the price of the scrip of JIK and that the impugned order could not be sustained. The appeal was allowed, and the impugned order was set aside, with the parties bearing their own costs.
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2008 (10) TMI 704
Issues Involved:
1. Validity of the impugned notices and orders.
2. Legality of the Circular Exhibit - L.
3. Correct calculation and payment of Entertainment Duty by the petitioner.
4. The nature of the exemption/concession granted under the Bombay Entertainment Duty Act, 1923.
5. Allegations of unjust enrichment against the petitioner.
6. Availability of alternate remedies for the petitioner.
Issue-wise Detailed Analysis:
1. Validity of the Impugned Notices and Orders:
The petitioner sought to set aside the impugned notices and orders, arguing they were issued without considering the exemption available to the petitioner from paying 75% of the Entertainment Duty. The court found that the petitioner was entitled to a 75% exemption for the fourth and fifth years, and the demand for the full 45% duty was incorrect. The impugned notices and orders were quashed.
2. Legality of the Circular Exhibit - L:
The petitioner challenged the Circular Exhibit - L, claiming it was ultra vires the Bombay Entertainment Duty Act, 1983. The court noted that the circular was issued to clarify the method of computing Entertainment Duty but did not have the authority to override the statutory provisions. The court found the circular inconsistent with the Act and set it aside.
3. Correct Calculation and Payment of Entertainment Duty by the Petitioner:
The petitioner argued that the correct method of calculating Entertainment Duty was based on the net price, not the gross price. The court agreed, stating that the petitioner was liable to pay only 25% of the 45% duty during the fourth and fifth years. The court emphasized that the calculation should be based on the net admission fee, and the petitioner had correctly paid the duty as per the provisions of the Act.
4. The Nature of the Exemption/Concession Granted Under the Bombay Entertainment Duty Act, 1923:
The court examined the legislative intent behind the exemption/concession granted to multiplex theatres. It was determined that the exemption was intended to benefit the proprietors/operators of multiplex theatres, not the patrons. The court held that the exemption allowed the petitioner to collect Entertainment Duty from patrons but only pay 25% of the collected duty to the government during the fourth and fifth years.
5. Allegations of Unjust Enrichment Against the Petitioner:
The respondents argued that the petitioner was unjustly enriched by retaining the collected Entertainment Duty. The court rejected this argument, stating that the petitioner was entitled to retain 75% of the collected duty as per the exemption. The court clarified that the petitioner was not liable to pay the full 45% duty and that the exemption was a retention benefit for the multiplex proprietors/operators.
6. Availability of Alternate Remedies for the Petitioner:
The respondents contended that the petitioner had an alternate remedy of appeal under Section 10A of the Bombay Entertainment Duty Act, 1923. The court, however, chose to entertain the writ petition, considering the broader implications and the need to clarify the legal position regarding the exemption and calculation of Entertainment Duty.
Conclusion:
The court concluded that the petitioner was entitled to the exemption from paying 75% of the Entertainment Duty during the fourth and fifth years. The impugned notices and orders demanding the full 45% duty were quashed. The Circular Exhibit - L was found to be inconsistent with the Act and set aside. The court emphasized that the exemption was a retention benefit for the multiplex proprietors/operators, and the petitioner had correctly paid the duty as per the statutory provisions.
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