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Showing 41 to 60 of 1244 Records

• 2013 (7) TMI 1209
  
  Issues involved: Two separate appeals by Revenue against orders of Ld. CIT(A)-1, Mumbai for A.Yrs. 2007-08 & 2008-09, involving common issues of depreciation on fixed assets and set off of deficit of earlier year against income of current year.
  
  A.Y. 2007-08:
  - Depreciation on fixed assets: The issue raised is covered by the decision of the Hon'ble Jurisdictional High Court in CIT Vs Institute of Banking Personnel Selection 264 ITR 110. The High Court held that depreciation is allowable on assets, even if cost fully allowed as application of income u/s. 11 in past years, following commercial principles. Grounds 1 & 2 dismissed in favor of assessee.
  - Set off of deficit: Covered by the same High Court decision, allowing adjustment of expenses incurred in earlier years against income of subsequent year as application of income for charitable purposes u/s. 11(1)(a). Ld. CIT(A) findings confirmed, and Revenue's Ground No. 3 dismissed. Appeal for A.Y. 2007-08 is dismissed.
  
  A.Y. 2008-09:
  - Claim of deduction u/s. 24: Covered by Tribunal Mumbai Bench decision in the case of Sri Sathya Sai Trust, allowing deduction of 30% of rental income under section 24 for a charitable trust. Ld. CIT(A) directed AO to allow the claim, and Revenue's Ground No. 1 dismissed.
  - Depreciation on fixed assets: Similar to A.Y. 2007-08, the issue is dismissed following the decision in the previous year's appeal. Revenue's appeal for A.Y. 2008-09 is dismissed.
  
  In both appeals, the common issues of depreciation and deduction were decided in favor of the assessee based on relevant High Court and Tribunal decisions, leading to the dismissal of Revenue's appeals for both assessment years.

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• 2013 (7) TMI 1208
  
  Issues involved:
  The refusal of claimed exemption u/s 10 (23C) (vi) by the Ld. CIT (A)
  
  Judgment Summary:
  
  The assessee challenged the first appellate order denying the claimed exemption u/s 10 (23C) (vi) on the grounds that approval for exemption was not required as the total receipts did not exceed Rs. 1 crore during the relevant financial year. The Ld. A.R pointed out the relevant provisions u/s 10 (23C) (iiiad) of the Act and Rule 2 BC (1) of the I.T Rules to support the claim. The Ld. D.R attempted to justify the lower authorities' orders. The Tribunal, after examining the provisions, agreed with the assessee that approval from the revenue was not necessary for claiming exemption u/s 10 (23C) (vi) if the gross receipts did not exceed Rs. 1 crore. The matter was remanded to the file of the Ld. CIT(A) for verification of the gross-receipts and to allow the claimed exemption if the threshold was not breached, providing the assessee with an opportunity to be heard. The appeal was allowed, and the order was pronounced on 19th July 2013.

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• 2013 (7) TMI 1207
  
  Issues Involved:
  1. Disallowance of education expenses.
  2. Addition on account of income-tax recoverable from GEB/Essar Steel Ltd.
  3. Disallowance of expenses u/s 14A.
  4. Classification of interest received on loans and advances to employees.
  5. Addition of income-tax recoverable while computing book profit u/s 115JB.
  
  Summary:
  
  1. Disallowance of Education Expenses:
  The issue raised in Ground no. 1 pertains to the addition of Rs. 5 Lakhs made by the AO and confirmed by the ld. CIT(A) on account of disallowance of education expenses. The AO disallowed the expenditure on the grounds that it was not incurred wholly and exclusively for business purposes. The ld. CIT(A) upheld this disallowance due to the assessee's failure to establish any business nexus. The Tribunal found no justifiable reason to interfere with the ld. CIT(A)'s order, thus dismissing Ground no. 1 of the assessee's appeal.
  
  2. Addition on Account of Income-Tax Recoverable from GEB/Essar Steel Ltd.:
  Ground no. 2 of the assessee's appeal concerns the addition of Rs. 4.96 Crore made by the AO and confirmed by the ld. CIT(A). Both parties agreed that this issue was covered by the Tribunal's decision in the assessee's own case for A.Y. 2003-04, where it was held that the amount paid by power purchasers as tax on tariff charges is taxable as income. The Tribunal upheld the ld. CIT(A)'s order, dismissing Ground no. 2 of the assessee's appeal.
  
  3. Disallowance of Expenses u/s 14A:
  Ground no. 3 of the assessee's appeal and Ground no. 3 of the Revenue's appeal relate to the disallowance of expenses u/s 14A. The AO disallowed Rs. 18,35,586/- based on the interest attributable to investments made in mutual funds. The ld. CIT(A) remitted the issue back to the AO for re-computation following CBDT guidelines. The Tribunal noted that Rule 8D is applicable prospectively from A.Y. 2008-09 and upheld the AO's reasonable basis for disallowance, thus partly allowing both appeals.
  
  4. Classification of Interest Received on Loans and Advances to Employees:
  Ground no. 1 of the Revenue's appeal for A.Y. 2004-05 challenges the classification of interest received on loans and advances to employees as business income. The Tribunal, following its earlier decisions in the assessee's own case, upheld the ld. CIT(A)'s order treating the interest as business income, dismissing Ground no. 1 of the Revenue's appeal.
  
  5. Addition of Income-Tax Recoverable While Computing Book Profit u/s 115JB:
  Ground no. 2 of the Revenue's appeal for A.Y. 2004-05 involves the addition of Rs. 4.96 Crores on account of income-tax recoverable while computing book profit u/s 115JB. The Tribunal restored this issue to the AO for fresh decision, following its directions in the assessee's case for A.Y. 2003-04. This ground was allowed for statistical purposes.
  
  Subsequent Years (A.Y. 2005-06 and 2006-07):
  The Tribunal followed similar conclusions for the issues involved in A.Y. 2005-06 and 2006-07 as decided for A.Y. 2004-05. The appeals were partly allowed, with specific issues restored to the AO for fresh consideration.
  
  Conclusion:
  All six appeals were partly allowed, with specific directions for re-computation and fresh consideration by the AO as per the Tribunal's instructions.

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• 2013 (7) TMI 1206
  
  Issues Involved:
  1. Whether the property received by Gulab Singh on partition retained its character as coparcenary property or became his self-acquired property.
  2. Validity of the sale deeds and release deed executed by Gulab Singh.
  
  Issue 1: Character of Property Post-Partition
  The trial court concluded that the property received by Gulab Singh in partition, although initially separate, attained the characteristics of coparcenary property after the birth of the plaintiff, Rohit Chauhan. The trial court's finding reads: "the property which Gulab Singh had got by the decree was although his separate property qua other relation but became JHF property immediately when Rohit Chauhan was born thereby getting characteristic of coparcenary property."
  
  The lower appellate court, however, held that the property received by Gulab Singh on partition "lost the character of coparcenary property and became the self-acquired property of Gulab Singh." The court stated: "96 Kanals of land was received by Gulab Singh from his father Budhu on the basis of consent decree or on the basis of will and not by survivorship and this property lost the character of coparcenary property and was self-acquired property of Gulab Singh."
  
  The High Court dismissed the second appeal, observing: "Finding of the lower appellate court that the suit land is not proved to be ancestral or coparcenary property is fully justified by the documentary evidence and admitted facts."
  
  Issue 2: Validity of Sale Deeds and Release Deed
  The Supreme Court found substance in the submission that after the birth of the plaintiff, the property became coparcenary property, and the plaintiff acquired interest in it. The Court stated: "A coparcener has no definite share in the coparcenary property but he has an undivided interest in it... the moment a son is born, the property becomes a coparcenary property and the son would acquire interest in that and become a coparcener."
  
  The Court distinguished the case from Bhanwar Singh v. Puran, noting that the issue in the present case was the status of the plaintiff vis-à-vis his father who got property on partition of the ancestral property. The Court held: "Gulab Singh, till the birth of plaintiff Rohit Chauhan, was competent to sell, mortgage and deal with the property as his property in the manner he liked. Had he done so before the birth of plaintiff, Rohit Chauhan, he was not competent to object to the alienation made by his father before he was born or begotten."
  
  However, since the property was ancestral and the plaintiff was born, the sale deeds and release deed executed by Gulab Singh were deemed illegal, null, and void as they were not executed as Karta for legal necessity. The Court concluded: "Hence, the sale deeds and the release deed executed by Gulab Singh to the extent of entire coparcenary property are illegal, null and void."
  
  Judgment:
  The Supreme Court allowed the appeal, set aside the judgment and decree of the lower appellate court as affirmed by the High Court, and restored the trial court's judgment. The Court granted liberty to the parties to work out their remedies in appropriate proceedings regarding the property that would have fallen in Gulab Singh's share at the time of execution of the sale deeds and release deed. No order as to costs was made.

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• 2013 (7) TMI 1205
  
  Issues involved: Appeal against CIT(A) orders sustaining addition of service tax amounting to Rs. 4,84,771 under section 43B of the IT Act for assessment year 2008-09.
  
  Summary:
  The assessing officer disallowed the service tax liability of Rs. 4,84,771 as it was not paid before the due date for filing the return of income under section 139(1) of the Act. The CIT(A) upheld this addition. However, the assessee appealed, citing precedents such as ACIT v. Real Image Media Technologies and CIT v. Noble & Hewitt India Pvt. Ltd. The tribunal noted that the rigour of section 43B may not apply to service tax due to the nature of the liability and the absence of payments from the receiver of services. It was also highlighted that service tax cannot be included in turnover as per Rule 6 of the Service Tax Rules. In line with these decisions, the tribunal set aside the lower authorities' orders and ruled in favor of the assessee, allowing the appeal.
  
  Judgment:
  The tribunal found that section 43B does not apply to service tax liability based on the nature of the liability and the absence of payments from the receiver of services. Citing precedents, the tribunal ruled in favor of the assessee, allowing the appeal against the addition of service tax amounting to Rs. 4,84,771.

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• 2013 (7) TMI 1204
  
  Issues involved: The judgment involves issues related to the addition made by the Assessing Officer on account of loss from Jeevan Suraksha Fund, the applicability of provisions of section 115O read with section 115Q of the Income Tax Act, and the deletion of additions by the CIT(A) for the assessment years 2007-08 and 2008-09.
  
  Issue 1 - Addition on account of loss from Jeevan Suraksha Fund:
  The Assessing Officer contended that the income from Jeevan Suraksha Fund should not be included in the total income as per section 10(23AAB) of the Income Tax Act. However, the ITAT had previously ruled in favor of the assessee in assessment years 2002-03 to 2006-07, and the Hon'ble Bombay High Court also supported this decision. The CIT(A) relied on these precedents and directed the AO to delete the addition, stating that the issue was already settled by the High Court decision. Consequently, the ground raised by the revenue was rejected.
  
  Issue 2 - Applicability of provisions of section 115O read with section 115Q:
  The Assessing Officer argued that the Government of India, being a shareholder in the assessee corporation, should pay additional tax under section 115O of the Income-tax Act on the distributed dividend. However, it was contended during the appellate proceedings that the amount paid by the Life Insurance Corporation to the Government of India is not in the nature of dividend as defined under the Income-tax Act. Previous decisions by the ITAT in favor of the assessee for various assessment years supported this argument. The CIT(A) held that the provisions of section 115O were not applicable to the assessee corporation and directed the deletion of the addition made on this issue, in line with the previous decisions.
  
  Conclusion:
  The ITAT, Mumbai dismissed the appeals filed by the revenue for both assessment years 2007-08 and 2008-09, as the issues had already been settled in favor of the assessee based on previous decisions and the CIT(A) had correctly applied the law. The orders of the CIT(A) were upheld, and the appeals were consequently dismissed on 10th July 2013.

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• 2013 (7) TMI 1203
  
  Issues involved: Appeal against deletion of addition u/s.2(22)(e) of the IT Act for assessment year 2008-09.
  
  Summary:
  The appeal was filed by the Revenue challenging the deletion of an addition made by the Assessing Officer u/s.2(22)(e) of the IT Act. The assessee, an individual and partner in various concerns, received salary from M/s. Laxmi Diamond Pvt. Ltd. The Assessing Officer observed significant investments and deposits in Laxmi Diamond Pvt. Ltd. by the assessee. It was noted that the assessee had withdrawn a substantial amount from the company and transferred funds between accounts. The Assessing Officer treated the loan advance as a deemed dividend u/s.2(22)(e) of the IT Act and made an addition of Rs.13,27,00,000. The CIT(A) allowed the appeal, stating that the amount deposited by the director in the company should not be considered a loan under the provisions of the IT Act. The CIT(A) emphasized that the nature of the transactions did not violate any laws and cited relevant case laws to support the decision.
  
  The Revenue contested the CIT(A)'s decision, arguing that the assessee had maintained various accounts with the company and had a debit balance as of a certain date. The Revenue relied on the conditions required for disallowance u/s.2(22)(e) of the IT Act. The appellant's counsel argued that after merging all accounts, the final balance was nil, citing relevant case laws to support their stance. The Tribunal examined the contentions and the material on record, noting that all conditions for disallowing deemed dividend u/s.2(22)(e) were met. Referring to a previous decision, the Tribunal held that the assessee did not owe any money to the company, and thus, there was no deemed dividend. Consequently, the Tribunal upheld the CIT(A)'s decision to delete the addition made by the Assessing Officer u/s.2(22)(e) of the IT Act.
  
  In conclusion, the Revenue's appeal was dismissed, affirming the decision to delete the addition u/s.2(22)(e) of the IT Act.

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• 2013 (7) TMI 1202
  
  Issues involved: Appeal filed by income tax department u/s 260-A of the Income Tax Act, 1961 against ITAT order for Assessment Year 2007-08. Questions of law pressed on:
  
  1. Whether deletion of addition of Rs.1,42,93,157/- on account of extra profit without regular books of account is justified?
  2. Whether AO's rejection of books of account u/s 145(3) justifies deletion of the addition?
  3. Whether AO's judgment based on best of judgment principle is valid when books of account are rejected?
  4. Whether estimation of extra profit without stock register is justified?
  5. Whether ITAT erred in ignoring section 292C presumption regarding documents found during search?
  
  Judgment Details:
  
  The search operation under section 132 of the Income Tax Act was conducted on various premises leading to the assessment. The AO observed lack of regular books of accounts during the search. Despite production of books later, they were not supported by basic documents, and day-to-day accounts were not maintained. The AO rejected the books u/s 145(3) and estimated income with an addition of Rs.19,34,764/-.
  
  The CIT (A) disagreed with the AO's addition based on a flat profit rate of 15% and found it beyond the scope of Section 153A. The Tribunal noted the absence of material justifying the 15% profit enhancement. It criticized the AO for not following guidelines or providing justifications for the estimation. Comparing GP rates with similar businesses, the Tribunal found the AO's enhancement unjustified, especially in the absence of incriminating material during the search.
  
  The Tribunal dismissed the appeal, stating that the questions raised were not substantial enough to warrant admission. The appeal by the income tax department was thus dismissed in limine.

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• 2013 (7) TMI 1201
  
  Issues Involved: Prosecution under u/s 138 of Negotiable Instruments Act, rejection of application for sending cheques to Central Forensic Science Laboratory.
  
  Prosecution under u/s 138 of Negotiable Instruments Act:
  The applicant was prosecuted for an offence u/s 138 of the Negotiable Instruments Act due to a bounced cheque. The applicant filed an application to send the cheques to the Central Forensic Science Laboratory to determine the age of the ink. The rejection of this application was challenged by the applicant, claiming it deprived him of the opportunity to substantiate his defense. The opponent argued that the rejection was justified as the defense of the applicant regarding blank cheques was irrelevant to the case. The High Court noted that the trial court rejected the application without providing a basis for the decision, leading to the quashing of the order and remanding the matter back to the trial court for further consideration. The trial court was directed to decide on the application and the relevance of the ink's age expeditiously.
  
  Rejection of Application for Sending Cheques to Central Forensic Science Laboratory:
  The rejection of the applicant's application to send the cheques to the Central Forensic Science Laboratory was found to be without a proper basis by the High Court. The trial court had rejected the application citing the lack of a scientific method for determining the age of the ink on the cheques. However, the High Court held that the trial court's decision lacked justification as no reasoning was provided for the same. Consequently, the High Court quashed the impugned order and instructed the trial court to reconsider the application in accordance with the law, while keeping the question of the ink's age relevance open for the trial court's consideration.

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• 2013 (7) TMI 1200
  
  Issues Involved:
  1. Upward revision of Arm's Length Price (ALP) for international transactions.
  2. Disallowance of depreciation on opening Written Down Value (WDV).
  3. Disallowance of Employee Stock Option Plan (ESOP) expenses.
  
  Summary:
  
  1. Upward Revision of ALP:

  The primary issue in assessment years 2008-09 and 2007-08 was the upward revision of ALP by Rs. 9,06,35,400/- and Rs. 1,00,76,210/- respectively. The assessee-company, engaged in the manufacture and selling of bulk drugs, had international transactions of sales to Associated Enterprises (AEs). The Transfer Pricing Officer (TPO) rejected the Resale Price Method (RPM) adopted by the assessee and instead used the Comparable Uncontrolled Price (CUP) method, resulting in the upward adjustment. The Dispute Resolution Panel (DRP) and CIT(A) upheld the TPO's decision. The Tribunal found that both RPM and CUP methods were not applicable due to differences in geographical and volume factors. Therefore, the issue was remanded back to the TPO to determine fresh ALP considering similar transactions and commodities sold in the USA by other enterprises.

  2. Disallowance of Depreciation on Opening WDV:

  The assessee's claim for depreciation on opening WDV aggregating to Rs. 3,97,21,857/- was disallowed based on earlier assessment years' proceedings. The DRP confirmed the disallowance. The Tribunal noted that the CIT(A) had allowed depreciation on verified bills in assessment year 2005-06 and remanded the matter back to the Assessing Officer to adjudicate the issue afresh in line with the CIT(A)'s order for assessment year 2005-06.

  3. Disallowance of ESOP Expenses:

  The assessee claimed Rs. 14,91,000/- towards ESOP expenses, which was disallowed by the Assessing Officer and confirmed by the DRP as capital in nature. The Tribunal relied on the decision of the Hon'ble Madras High Court in CIT vs PVP Ventures Ltd., which allowed ESOP expenses as revenue expenditure. Consequently, the Tribunal directed the Assessing Officer to allow the ESOP expenses claimed by the assessee.

  Conclusion:

  In conclusion, the Tribunal remanded the issue of ALP determination back to the TPO for fresh consideration, directed the Assessing Officer to re-adjudicate the depreciation issue, and allowed the ESOP expenses claim. The appeals of the assessee were allowed for statistical purposes.

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• 2013 (7) TMI 1199
  
  Issues Involved: Appeal against order of CIT (A)-V, Surat regarding unexplained cash deposit, undisclosed bank account balance, undisclosed share holdings, and set-off of capital loss in share transactions.
  
  Unexplained Cash Deposit and Undisclosed Bank Account Balance: The revenue appealed against the CIT (A)'s decision to restrict the addition of Rs.1,79,818 for unexplained cash deposit, undisclosed bank account balance, and undisclosed share holdings. The AO had added Rs.12,26,373 to the income of the assessee, including Rs.10,21,500 cash deposit, Rs.25,054 closing balance of ICICI Bank account, and Rs.1,79,818 shares held but not disclosed. The CIT (A) restricted the addition to Rs.1,79,818, considering it as the investment in shares, higher than the peak balance of Rs.1,65,544 in the bank account. The CIT (A) emphasized that the AO should have considered the source of the cash deposit and given the benefit of telescoping, taxing either the peak balance or the investment in shares, whichever is higher. The Tribunal upheld the CIT (A)'s decision, dismissing the revenue's appeal.
  
  Set-off of Capital Loss in Share Transactions: The revenue also challenged the CIT (A)'s direction to allow the set-off or carry forward of capital loss incurred in share transactions amounting to Rs.1,81,708, not shown in the return of income. The CIT (A) had remitted the issue back to the AO for verification and decision as per law. The Tribunal found no reason to interfere with the CIT (A)'s decision, as it only directed the AO to verify the claim of the assessee and decide as per law. Consequently, the Tribunal dismissed the revenue's appeal on this issue as well.
  
  In conclusion, the Tribunal upheld the CIT (A)'s decision on both issues, dismissing the revenue's appeal in its entirety.

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• 2013 (7) TMI 1198
  
  Issues Involved:
  1. Deletion of disallowance of interest liability amounting to Rs.9,29,911/- u/s 36(1)(iii) of the I.T Act.
  2. Deletion of disallowance of interest liability amounting to Rs.24,261/- by invoking the provisions of Section 14A of the I.T Act.
  
  Summary:
  
  Issue No. 1:
  The assessee, engaged in manufacturing/fabricating engineering capital goods, made investments in land and work-in-progress for building and machinery. The AO disallowed interest of Rs.9,29,911/- on the grounds that the investments were made from interest-bearing funds not used for business purposes. The CIT(A) deleted this disallowance, and the revenue appealed.
  
  The Tribunal found that the assessee had not made specific borrowings for these investments and had used a mixed CC Account, which also included business profits. The Tribunal noted that substantial profits were generated during the year, and the investments were made from these profits and recoveries from debtors. The Tribunal relied on several judicial precedents, including the Hon'ble Supreme Court's decision in ACIT Vs. Elecnon Engineering Company Limited and the Hon'ble Mumbai High Court's decision in Reliance Utilities and Power Ltd, which support the view that if interest-free funds are available, it can be presumed that investments were made from these funds.
  
  The Tribunal upheld the CIT(A)'s decision, concluding that the disallowance of interest was not justified as the investments were made from the profits and internal accruals, not borrowed funds.
  
  Issue No. 2:
  The AO disallowed interest of Rs.24,261/- u/s 14A, arguing that the assessee made investments in mutual funds, which generate exempt income. The CIT(A) deleted this disallowance, and the revenue appealed.
  
  The Tribunal upheld the CIT(A)'s decision, noting that the establishment of a nexus between borrowed funds and investments generating exempt income is a prerequisite for disallowance. The Tribunal cited judicial precedents, including the Hon'ble P&H High Court's decision in Hero Cycles Ltd and the Hon'ble Supreme Court's decision in Munjal Sales Corporation, which support the view that no disallowance can be made if the investments are less than the internal accruals and profits earned.
  
  The Tribunal concluded that the AO was not justified in invoking Section 14A and disallowing the interest, thus upholding the CIT(A)'s deletion of the addition.
  
  Conclusion:
  The appeal was dismissed, and the order pronounced in the open court on 19th July 2013.

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• 2013 (7) TMI 1197
  
  Issues involved: Appeal against deletion of addition of long term capital gain u/s 50C of IT Act.
  
  Summary:
  The appeal challenged the deletion of an addition of Rs. 2,94,39,000/- as long term capital gain u/s 50C of the IT Act. The Revenue argued that as per section 50C, the value adopted by the stamp valuation authority should be deemed as the full value of consideration in case of lower sale consideration. The assessee contended that as per section 53A of the Transfer of Property Act, the transfer of land is deemed to occur when the sale agreement is entered into, not just upon registration.
  
  The Tribunal noted that the assessee, a housing cooperative society, declared nil income but was assessed by the AO u/s 143(3) with additions. The CIT(A) deleted the addition, citing that the books were audited and transfer deeds were registered during the relevant year. The AO failed to prove actual receipt of the mentioned consideration from buyers. The Tribunal found that since the land was held as stock in trade, the profit should be taxed as business profit, not capital gains. Section 50C was deemed inapplicable to business profit, and the amendment in 2013 did not apply to the relevant assessment year of 2009-10.
  
  Therefore, the Tribunal upheld the CIT(A)'s order, dismissing the Revenue's appeal.
  
  This judgment was delivered on 17.7.2013 by SHRI JOGINDER SINGH, Judicial Member and SHRI R.C. SHARMA, Accountant Member.

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• 2013 (7) TMI 1196
  
  Issues involved:
  The judgment involves seeking sanction from the court under Sections 391 to 394 read with Sections 78, 100 to 104 of the Companies Act, 1956 for the Scheme of Arrangement and Amalgamation of two companies along with issues related to reduction of share capital and utilization of Securities Premium Account.
  
  Details of the Judgment:
  
  Issue 1: Scheme of Arrangement and Amalgamation
  - The petitioners are engaged in the business of manufacturing and sale of turbochargers and components, import of turbochargers, and provision of various services.
  - The proposed amalgamation aims to enhance capital utilization, create operational efficiencies, reduce overheads, and optimize resource utilization.
  - The amalgamation is expected to increase operational efficiency, integrate business functions, and reduce managerial overlaps.
  
  Issue 2: Reduction of Share Capital and Utilization of Securities Premium Account
  - The Scheme includes the reduction of share capital and utilization of the Securities Premium Account of the Transferee Company.
  - The reduction of share capital involves adjusting the deficit in the profit and loss account against the Securities Premium Account.
  - The proposed reduction and utilization do not involve compromising with creditors or payment to shareholders, and necessary approvals have been obtained.
  
  Issue 3: Compliance and Reports
  - The petitioners have complied with all directions and statutory requirements, as per the Companies Act, 1956.
  - The Official Liquidator has reported that the affairs of the Transferor Company have been conducted properly.
  - The Regional Director has filed an affidavit stating that the Scheme is not prejudicial to the interests of shareholders and the public.
  
  Issue 4: Amendments and Rectifications
  - The Regional Director highlighted certain corrections required in the Scheme, which were subsequently acknowledged and rectified by the petitioners.
  - The Court granted leave to amend the specified clauses and directed the necessary amendments to be made within two weeks.
  
  Issue 5: Court Decision and Directions
  - The Court found the Scheme fair, reasonable, and compliant with the law and public policy.
  - As all statutory compliances were fulfilled, the Company Scheme Petitions were made absolute with specific prayer clauses.
  - The petitioners were directed to lodge a copy of the Order and Amended Scheme for stamp duty adjudication and filing with the Registrar of Companies.
  - Costs were imposed on the petitioners to be paid to the Regional Director and Official Liquidator within a specified timeframe.
  
  Conclusion:
  The judgment approved the Scheme of Arrangement and Amalgamation, addressing issues related to reduction of share capital and Securities Premium Account utilization, ensuring compliance with statutory requirements, making necessary amendments, and directing the petitioners to fulfill specific obligations within stipulated timelines.

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• 2013 (7) TMI 1195
  
  Issues Involved:
  1. Whether the issue in the company petition and the issue in O.S. No. 10 of 2005 filed before the civil court are one and the same.
  2. Whether the company petition should be stayed under section 10 of the Code of Civil Procedure, 1908.
  
  Summary:
  
  Issue 1: Whether the issue in the company petition and the issue in O.S. No. 10 of 2005 filed before the civil court are one and the same.
  
  The second respondent filed a company petition u/s 397 and 398 of the Companies Act, 1956, alleging acts of oppression and mismanagement in the affairs of the first respondent-company. The reliefs sought included directing the company to issue share certificates, dividing the 50% share in the land, building, and machinery, and transferring the entire shareholding of the applicant to the second respondent. The applicant had previously filed a civil suit (O.S. No. 10 of 2005) before the Principal District Judge, Virudhunagar District, Srivilliputhur, seeking a declaration that certain gift deeds are null and void, partition of the plaintiff's half share in the properties, and other related reliefs. The civil suit included the properties and shares of the first respondent-company. The court noted that the parties in the company petition are also parties in the civil suit, and the issues in both cases are directly and substantially related to the same properties and shares.
  
  Issue 2: Whether the company petition should be stayed under section 10 of the Code of Civil Procedure, 1908.
  
  The applicant argued that the company petition should be stayed u/s 10 of the CPC, 1908, as the civil suit was filed prior to the company petition and involved the same issues. The court observed that section 10 of the CPC mandates that no court shall proceed with the trial of any suit in which the matter in issue is also directly and substantially in issue in a previously instituted suit between the same parties. The court found that the issues in the company petition and the civil suit are indeed the same, and proceeding with the company petition could result in conflicting decisions. Therefore, the court exercised its inherent powers u/r 44 of the Company Law Board Regulations, 1991, read with section 10 of the CPC, 1908, and stayed the company petition until the disposal of the civil suit.
  
  Conclusion:
  
  The court concluded that the issues in the company petition and the civil suit are one and the same, and the company petition should be stayed under section 10 of the CPC, 1908, until the civil suit is disposed of. The application (C.A. No. 262 of 2011 in C.P. No. 37 of 2011) was allowed, and the company petition was stayed with no order as to costs.

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• 2013 (7) TMI 1194
  
  Issues involved:
  The issues involved in the judgment are:
  1. Whether the Court was justified in directing the appellant to pay interest at the rate of 12% per annum from the date of the accident.
  2. Whether the compensation becomes due only when the adjudication of the claim is made, i.e., the date of passing of the order.
  
  Issue 1: Interest Payment and Tax Deduction:
  The Court referred to the Apex Court judgment in Oriental Insurance Co. Ltd. v. Siby George, where it was held that the matter is to be answered against the appellant. The Court dismissed the appeal based on this precedent. However, a question was raised regarding the liability of the appellant to deduct tax on the interest portion ordered by the Commissioner under the Income Tax Act.
  
  Issue 2: Tax Deduction on Interest Portion:
  Section 194A(1) of the Income Tax Act states that any person responsible for paying interest to a resident is liable to deduct income tax at the rates in force. The definition of 'interest' under Section 2(28A) includes various forms of interest payable. The Court highlighted that tax need not be deducted on interest paid on compensation where the amount does not exceed fifty thousand rupees, as per Section 194A(3)(ix).
  
  Judicial Precedents:
  The Court referred to the decision in Bikram Singh and others v. Land Acquisition Collector & Ors., where it was established that interest on delayed payment of compensation is considered a revenue receipt and is subject to income tax. Additionally, the Division Bench judgment in New India Assurance Co. Ltd. v. Biju emphasized that interest is an integral part of compensation, and the amount payable under the order includes interest.
  
  Conclusion:
  The Court concluded that interest ordered by the Commissioner under Section 4A is considered income and liable to tax deduction under Section 194A of the Income Tax Act. The appeal was dismissed, and the appellant was justified in deducting tax on the interest portion. The appellant was not required to pay that amount from the compensation awarded to the claimant.

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• 2013 (7) TMI 1193
  
  Issues involved: Appeal against penalty order u/s 271B r.w.s 274 of the Income Tax Act for the assessment year 2008-09. Additional ground raised regarding the levy of penalty u/s 271B unjustified due to online transaction of future commodities not forming part of turnover for tax audit u/s 44AB.
  
  Additional Ground Raised:
  The assessee, engaged in online trading of commodities, argued that the speculative transactions on the Multi Commodity Exchange (MCX) did not involve physical delivery of commodities and therefore should not be considered as turnover for tax audit u/s 44AB. Citing relevant case laws, the assessee contended that the daily mark-to-mark transactions on MCX were squared at the end of each day or carried forward, with no actual delivery taken/given, thus not constituting turnover.
  
  Decision and Reasoning:
  After considering submissions from both parties and reviewing the facts, it was noted that the Assessing Officer (AO) had considered the sales figure on MCX as turnover, leading to the penalty under section 271B for non-compliance with section 44AB. Referring to precedents, it was established that in speculative activities without physical delivery, turnover for tax audit purposes is not constituted. The Tribunal held that the value of sale transactions on MCX without delivery should not be treated as turnover u/s 44AB, in line with previous decisions by the Tribunal and the High Court. Consequently, the penalty u/s 271B was deleted as the transactions did not fall under the turnover ambit for tax audit purposes.
  
  Outcome:
  The Tribunal allowed the appeal in favor of the assessee based on the additional ground, rendering other grounds moot. As a result, the penalty u/s 271B was deleted, and the appeal was allowed.

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• 2013 (7) TMI 1192
  
  Issues involved: Whether the High Court should have stayed the trial based on a previous judgment.
  
  Summary:
  The Appellant Bank filed a complaint under Section 138 of the Negotiable Instruments Act against Respondent Nos. 1 to 3. The Respondents sought to add another party to the complaint, leading to a series of legal proceedings. The High Court, in a departure from the trial court's decision, ordered a fresh recording of evidence based on the judgment in Nitinbhai Saevatilal Shah and Anr. v. Manubhai Manjibhai Panchal and Anr. The appeal challenged this High Court order.
  
  The Appellant argued that the evidence was already fully recorded and did not require a fresh start by a new Magistrate. The Respondents, however, insisted on following the precedent set in the Nitinbhai Saevatilal Shah case.
  
  Upon reviewing the evidence, the Supreme Court found that it was indeed fully recorded and not in a summary manner. Consequently, the Court accepted the Appellant's submission, allowed the appeal, set aside the High Court's order, and directed the Additional Chief Judicial Magistrate to continue the proceedings from the current stage. The Court also rejected the Respondents' application to add another party to the complaint, emphasizing the complainant's discretion in choosing against whom to proceed.

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• 2013 (7) TMI 1191
  
  Issues Involved:
  1. Unauthorized occupation of government accommodation by members of the Legislature, Executive, and Judiciary.
  2. Effectiveness of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971.
  3. Suggestions and guidelines for dealing with unauthorized occupation.
  
  Summary:
  
  1. Unauthorized occupation of government accommodation by members of the Legislature, Executive, and Judiciary:
  The case concerns the prolonged unauthorized occupation of government accommodation by members of the Legislature, Executive, and Judiciary beyond their allotted period. This unauthorized occupation hinders the accommodation of other eligible individuals, causing a significant administrative challenge for the government.
  
  2. Effectiveness of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971:
  Despite the existence of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, it has not been effective in ensuring timely eviction. The process involves the Estate Officer initiating proceedings, followed by a statutory appeal to the District Judge u/s 9 of the Act, and often subsequent writ proceedings, allowing affluent occupants to continue unauthorized occupation by paying penal/market rent.
  
  3. Suggestions and guidelines for dealing with unauthorized occupation:
  The Court appointed amicus curiae to assist in framing workable guidelines. The amicus curiae suggested several measures, including:
  - Taking an undertaking from allottees to vacate within the prescribed period.
  - Recovering arrears of rent as arrears of land revenue.
  - Declaring the proviso to Section 11(1) of the Act ultra vires.
  - Immediate suspension of employees continuing unauthorized occupation.
  - Intimating unauthorized retention by Ministers and MPs to the Speaker/Chairman for action.
  - Cancelling discretionary allotments to non-government categories.
  - Retrieving government houses turned into memorials and banning future memorials.
  
  Court's Decision:
  The Court considered the responses from Union of India, States, and Union Territories, noting that existing provisions suffice but are often circumvented. The Court emphasized the need for additional guidelines and issued several directives, including:
  - Sending advance notices to retirees to vacate premises.
  - Making departments liable for follow-up actions.
  - Expediting eviction proceedings and limiting extensions.
  - Recovering arrears as land revenue and imposing compound interest.
  - Informing the Speaker/Chairman of unauthorized retention by MPs and Ministers for action.
  - Ensuring judges vacate official residences within one month of retirement.
  
  The Court highlighted the need for self-realization among unauthorized occupants and disposed of the matter with the outlined terms, emphasizing the correlation between rights and duties.

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• 2013 (7) TMI 1190
  
  Issues Involved:
  
  1. Disallowance of interest payable to M.P. State Co-op. Bank Maryadit and Mandi Board u/s 43B.
  2. Disallowance of employees' contribution to PF and ESIC deposited after the due date.
  
  Summary:
  
  Issue 1: Disallowance of Interest Payable to M.P. State Co-op. Bank Maryadit and Mandi Board u/s 43B
  
  The AO disallowed the interest payable to M.P. State Co-op. Bank Maryadit and Mandi Board, considering it a mistake apparent from the record. The CIT(A) deleted the disallowance, stating that the AO failed to prove that M.P. State Co-op. Bank Maryadit or Mandi Board falls under any clauses of Explanation 4 to section 43B. The Tribunal, however, held that M.P. State Cooperative Bank falls under Explanation 4 to section 43B, making the provisions applicable to the interest payable to it. Thus, the CIT(A) was not justified in holding otherwise. The interest payable to the consortium bank and M.P. State Cooperative Bank, amounting to Rs. 14,60,58,000/- and Rs. 3,93,80,000/- respectively, was rightly added by the AO. However, the interest payable to Mandi Board cannot be disallowed as it does not fall under Explanation 4 to section 43B.
  
  Issue 2: Disallowance of Employees' Contribution to PF and ESIC Deposited After the Due Date
  
  The CIT(A) allowed the assessee's claim for deduction of employees' contribution, citing various court decisions, including CIT vs. Aimil Ltd. (2010) 321 ITR 508 (Del), which held that if the employees' contribution is deposited before the return filing date, the deduction is permissible. The Tribunal agreed with the CIT(A) that employees' contribution, if paid before the last date of filing the return, should be allowed. However, the Tribunal directed the AO to verify the actual date of payment of employees' contribution before allowing the deduction.
  
  Conclusion:
  
  The Tribunal reversed the CIT(A)'s order concerning the interest payable to the consortium bank and M.P. State Cooperative Bank, directing the AO to disallow the interest. The Tribunal upheld the CIT(A)'s decision on employees' contribution, subject to verification of the actual payment date by the AO. The appeal of the revenue was allowed in part.

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