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2013 (9) TMI 1266
Issues Involved:
1. Whether the cheque was issued in discharge of a legal liability. 2. Whether the notice u/s 138 was properly served. 3. Whether the respondent had established that there was no legally enforceable debt.
Summary:
Issue 1: Whether the cheque was issued in discharge of a legal liability.
The appellant, as the complainant, alleged that the respondent issued a cheque for Rs. 50,000/- which was dishonoured due to insufficient funds. The respondent contended that there was no transaction between them and that the cheque was misused. The Trial Court accepted the respondent's defense and acquitted her. The appellant argued that the presumption u/s 139 of the NI Act was in favor of the holder of the cheque, and the burden was on the respondent to prove the absence of legal liability. The High Court found that the Trial Court misinterpreted the evidence and the presumption u/s 139 was not properly considered. The High Court held that the cheque was indeed issued in discharge of a legal liability.
Issue 2: Whether the notice u/s 138 was properly served.
The respondent claimed that the notice was sent to an incorrect address and was defective as it demanded Rs. 70,000/- instead of Rs. 50,000/-. The High Court noted that the address used was the one in the complaint and that the respondent did not dispute this address. The High Court further stated that even if the notice was not served, the respondent could have tendered the cheque amount upon receiving the summons. Thus, the High Court found that the notice was properly served and the proceedings were valid.
Issue 3: Whether the respondent had established that there was no legally enforceable debt.
The respondent argued that she and her husband were financially well-off and did not need to borrow money. She also claimed that the cheque was tampered with, as it was filled in different inks and hands. The High Court rejected these contentions, stating that there is no legal requirement for a cheque to be filled in the same ink and hand. The High Court emphasized that the presumption u/s 139 is in favor of the holder and the burden was on the respondent to rebut this presumption. The High Court concluded that the respondent failed to establish that there was no legally enforceable debt.
Conclusion:
The High Court allowed the appeal, set aside the Trial Court's judgment, and convicted the respondent u/s 138 of the NI Act. The respondent was ordered to pay a fine of Rs. 90,000/-, of which Rs. 85,000/- was to be paid as compensation to the appellant within four weeks, failing which the respondent would face simple imprisonment for two months.
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2013 (9) TMI 1265
Imposing condition for depositing huge amount in fixed deposit for grant of anticipatory bail - Inability of the petitioner to comply with the condition - Within or outside the purview of Section 438 of the CrPC - Anticipatory bail u/s-438 CrPC - Nature and gravity of accusation - Onerous and unreasonable - HELD THAT:- While exercising power under Section 438 of the Code, the Court is under obligation to maintain balance between the individual’s right to personal freedom and the right of Police investigation. While granting relief under Section 438(1), appropriate conditions can be imposed under Section 438(2) so as to ensure an uninterrupted investigation but no condition can be imposed which gives reference to the fairness or propriety of the investigation or trial. So, the discretion of the Court while imposing conditions must be exercised with utmost restraint.
Thus, fixed deposit of ₹ 1,00,00,000/- for a period of six months in the name of the complainant and to keep the FDR with the investigating officer as a condition for granting anticipatory bail is evidently onerous and unreasonable. Therefore, it was suggested that power to impose a condition of this nature is totally excluded, even in cases of cheating, electricity pilferage, white-collar crimes or chit fund scams etc.
The words “any condition” used in the provision should not be regarded as conferring absolute power on a Court of law to impose any condition whatsoever. Any condition- interpreted as a reasonable condition acceptable in the facts permissible in the circumstance and effective in the pragmatic sense and should not defeat the order of grant of bail. Thus, Court held that the present facts and circumstances of the case do not warrant such extreme condition to be imposed.
In the cas of Amarjit Singh vs. State of NCT of Delhi [2002 (1) TMI 1326 - SUPREME COURT] it was held that, "the imposition of condition to deposit the sum of ₹ 15 lacks in the form of FDR in the Trial Court is an unreasonable condition and, therefore, we set aside the said condition as a condition precedent for granting anticipatory bail to the accused/appellant.”
In the result, the direction relating to deposit of FDR in the name of the complainant was set aside.
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2013 (9) TMI 1264
Issues involved: Setting aside the order of the Income Tax Appellate Tribunal and remanding the matter for fresh decision, except for the issue of validity/re-opening of assessment u/s 148 of the Income Tax Act, 1961 for the Assessment Year 1996-97.
Decision on the first issue: The High Court set aside the order of the Income Tax Appellate Tribunal and remanded the matter for fresh decision on all issues except the validity/question of re-opening of assessment u/s 148 of the Income Tax Act, 1961 for the Assessment Year 1996-97.
Details on the first issue: The High Court directed that the matter be remanded to the Tribunal for deciding it afresh on all issues except the issue of validity/question of re-opening of the assessment under Section 148 of the Income Tax Act, 1961, for the Assessment Year 1996-97. The Court emphasized that it is open to the assessee and the appellants to raise all contentions as may be available in law before the Tribunal. Furthermore, all contentions of the parties on all other issues were kept open, and the appeal was disposed of accordingly.
Decision on the second issue: All contentions of the parties on all other issues, apart from the validity/re-opening of assessment u/s 148 of the Income Tax Act, 1961 for the Assessment Year 1996-97, were kept open for further consideration by the Tribunal.
Details on the second issue: The High Court ruled that all contentions of the parties on all other issues, apart from the validity/re-opening of assessment u/s 148 of the Income Tax Act, 1961 for the Assessment Year 1996-97, were kept open for further consideration by the Tribunal. This decision allowed for a comprehensive review of all other issues by the Tribunal, providing both parties with the opportunity to present their arguments in accordance with the law.
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2013 (9) TMI 1263
Issues involved: Appeal against rejection of application for renewal of exemption u/s 80G(5) due to advancing of corpus fund to other trusts without Charity Commissioner's permission.
Summary: The appeal was filed against the order of DIT(E) rejecting the Assessee's application for renewal of exemption u/s 80G(5) due to advancing corpus fund to other trusts without permission. The Assessee argued that the advances were made to trusts with similar objects, no interest was charged, and trustees had the power to utilize corpus funds. However, it was noted that the corpus fund was used to advance funds to other trusts without permission from the Charity Commissioner. The Tribunal found that the advances were not in the nature of loans but a diversion of corpus funds, violating donor directions and laws. The Assessee's appeal was dismissed, upholding the order of DIT(E).
The Assessee had previously been granted approval u/s 80G(5) valid from 1.4.2006 to 31.3.2009. The Assessee's application for renewal was rejected as it had advanced funds to 3 trusts out of its corpus fund without charging interest. The total capital of the Assessee was &8377; 53.68 lacs, with almost 93% advanced to the 3 trusts. The amounts advanced had not been returned, indicating a diversion of corpus funds. Resolutions authorizing the advances lacked details and no refunds were demanded. The Assessee failed to obtain permission from the Charity Commissioner for the advances.
The Tribunal held that the corpus fund, being a permanent fund with specific directions, cannot be used contrary to donor directions. The advances were deemed a diversion of corpus funds, violating donor directions and laws. Previous case laws cited were found distinguishable. The appeal was dismissed, upholding the order of DIT(E) rejecting the Assessee's application for renewal of exemption u/s 80G(5).
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2013 (9) TMI 1262
Offence Punishable u/s 468, 471, 120B and 201 of IPC - Complaint was initially made for disproportionate assets made by the Respondent No. 2 by purchase of huge lands either by himself or in the name of his wife or through benamis - Shri M.A. Khan, M.P. vide letter dated 23.5.2011 pointed out to the Central Government that he had not signed the complaint and his signature had been forged - Central Government had asked the State Government to conduct an inquiry into the said allegations - charge sheet filed and the cognizance had been taken by the magistrate concerned - the committal proceedings have not yet taken place; and some of the offences attracted in this case are exclusively triable by the Sessions Court. Umesh Kumar, Appellant approached the High Court u/s 482 CrPC and the charge sheet has been partly quashed observing that the provisions of Section 468 IPC are not attracted - whether such an order attained finality and in case the evidence is adduced before the court concerned, whether the trial court can still hold that the applicant is required to be tried for the offence Under Section 468 Indian Penal Code and further whether the trial would be competent on the said charge in exercise of its power Under Section 216 Code of Criminal Procedure?
Case against Umesh Kumar - Appellant - HELD THAT:- Allegations against any person if found to be false or made forging some one else signature may affect his reputation. Reputation is a sort of right to enjoy the good opinion of others and it is a personal right and an enquiry to reputation is a personal injury.
Personal rights of a human being include the right of reputation. A good reputation is an element of personal security and is protected by the Constitution equally with the right to the enjoyment of life, liberty and property. Therefore, it has been held to be a necessary element in regard to right to life of a citizen under Article 21 of the Constitution. International Covenant on Civil and Political Rights 1966 recognises the right to have opinions and the right of freedom of expression under Article 19 is subject to the right of reputation of others.
In view thereof, if any person has forged in a letter under the name of the Samithi and forged the signature of Shri M.A. Khan, M.P., the matter being of grave nature requires investigation and, in view of above, we cannot find fault with the action initiated against Umesh Kumar, Appellant. Once criminal law is put in motion and after investigation the charge sheet is filed, it requires scrutiny in the court of law. However, before the charges could be framed, Umesh Kumar, Appellant, approached the High Court u/s 482 CrPC for quashing of the charge sheet.
However, in exercise of such powers, it is not permissible for the High Court to appreciate the evidence as it can only evaluate material documents on record to the extent of its prima facie satisfaction about the existence of sufficient ground for proceedings against the accused and the court cannot look into materials, the acceptability of which is essentially a matter for trial. Any document filed along with the petition labelled as evidence without being tested and proved, cannot be examined.
The scope of Section 482 CrPC is well defined and inherent powers could be exercised by the High Court to give effect to an order under the CrPC; to prevent abuse of the process of court; and to otherwise secure the ends of justice. This extraordinary power is to be exercised ex debito justitiae.
Law does not prohibit entertaining the petition u/s 482 CrPC for quashing the charge sheet even before the charges are framed or before the application of discharge is filed or even during its pendency of such application before the court concerned. The High Court cannot reject the application merely on the ground that the accused can argue legal and factual issues at the time of the framing of the charge. However, the inherent power of the court should not be exercised to stifle the legitimate prosecution but can be exercised to save the accused to undergo the agony of a criminal trial.
Thus, it becomes evident that in case there is some substance in the allegations and material exists to substantiate the complicity of the applicant, the case is to be examined in its full conspectus and the proceedings should not be quashed only on the ground that the same had been initiated with mala fides to wreak vengeance or to achieve an ulterior goal.
Thus, in view of above, the order of the High Court impugned before us cannot be termed as a final decision. The order is subject to further order which could be passed by the trial court u/s 216 CrPC, on the basis of the evidence to be led during trial. If the impugned order is dubbed as having attained finality, the provisions of Section 216 CrPC would render otiose/nugatory. Thus, the same is to be read that the said order had been passed taking into consideration the material which was available "at that stage" and it is still open to the trial court to add or alter the charges according to the evidence produced before it.
Complaint against Respondent No. 2 - HELD THAT:- The complaint may be forged or fabricated, but it is nobody's case that the copies of sale deeds annexed along with the said complaint were not genuine. While issuing direction to hold inquiry/investigation as to who had fabricated the said complaint and forged the signatures of Shri M.A. Khan, M.P., the allegations of acquiring properties by the Respondent No. 2 have been abandoned and unattended altogether.
It is a settled legal proposition that even if a document is procured by improper or illegal means, there is no bar to its admissibility if it is relevant and its genuineness is proved. If the evidence is admissible, it does not matter how it has been obtained. However, as a matter of caution, the court in exercise of its discretion may disallow certain evidence in a criminal case if the strict rules of admissibility would operate unfairly against the accused.
More so, the court must conclude that it is genuine and free from tampering or mutilation. This Court repelled the contention that obtaining evidence illegally by using tape recordings or photographs offend Articles 20(3) and 21 of the Constitution of India as acquiring the evidence by such methods was not the procedure established by law. (Vide: Yusufalli Esmail Nagree v. The State of Maharashtra [1967 (4) TMI 199 - SUPREME COURT].
In reply to our order dated 24.7.2013, the Chief Secretary has filed an undated affidavit though attested by a Joint Secretary to Govt. of A.P., and has given numerous explanations in respect of the alleged pseudonymous petition filed with a fictitious name of the Samithi and with the forged signature of Shri M.A. Khan, M.P. The Chief Secretary has taken the plea that the Government of A.P. could not investigate an enquiry about the disproportionate assets of the Respondent No. 2 in view of the fact that the High Court of Andhra Pradesh vide order dated 2.5.2013 stayed the operation of the learned Single Judge's order to conduct an enquiry into the allegations.
The Chief Secretary to the Govt. of Andhra Pradesh has not revealed whether a preliminary enquiry or a domestic enquiry had ever been conducted till 2.5.2013 when the High Court passed the restraint order. The complaint was filed on 22.4.2011 and more than two years had elapsed when the High Court passed the order. No explanation has been furnished as to why for two years the enquiry could not be held in this regard.
Attestation of the undated affidavit is in utter disregard to the provisions of Section 139 of the Code of Civil Procedure, 1908. The Supreme Court Rules 1966 under Order XI, Rule 7 also require adherence to the provisions of Section 139 Code of Civil Procedure. Hence, his reply is not worth taking on record and being undated, renders the same to be a piece of waste paper.
Therefore, we have no hesitation to hold that the Chief Secretary had the audacity not to ensure the compliance of the order of this Court dated 24.7.2013, and we have no words to express our anguish and condemn the attitude adopted by the Chief Secretary. More so, holding such a responsible post in the State, he must have some sense of responsibility and should have been aware of what are the minimum requirements of law, and even if he did not know he could have consulted any law officer of the State before filing the undated affidavit.
Be that as it may, facts of the case warranted some enquiry in respect of the allegations of acquiring huge properties by Shri V. Dinesh Reddy - Respondent No. 2. The State took the courage to flout the order of the Central Government and did not look into the contents of the complaint and misdirected the enquiry against Umesh Kumar, Appellant. In such a fact-situation, this Court would not fail in its duty to direct the enquiry in those allegations.
The appeals are disposed of directing the CBI to investigate the matter against Shri V. Dinesh Reddy - Respondent No. 2 on the allegations of acquiring the disproportionate assets. However, this should not be considered as expressing any opinion upon the merits of the case. The Chief Secretary to the Government of Andhra Pradesh is directed to make the copies of the said sale deeds available to the CBI for investigation.
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2013 (9) TMI 1261
Issues involved: Appeal against order of Commissioner of Income-tax(Appeals) regarding delay in filing appeal and applicability of section 40(a)(ia) of Income-tax Act, 1961.
Delay in filing appeal: The Revenue filed an appeal with a delay of ten days, seeking condonation of delay. The Tribunal, after reviewing the circumstances, found that the delay was beyond the control of the officers and was due to reasons beyond their control. Consequently, the delay was condoned, and the appeal was admitted for hearing.
Applicability of section 40(a)(ia): The main ground raised by the Revenue was that the Commissioner of Income-tax(Appeals) failed to consider the belated payment of TDS into the Government account by the assessee. The Revenue argued that section 40(a)(ia) provisions, amended with effect from 1-4-2010, do not apply to the assessee's case due to the delayed payment of TDS. However, the Tribunal noted that various benches and the Hon'ble Calcutta High Court have held that if the tax is deducted and paid to the Government account before the due date for filing the return of income, section 40(a)(ia) does not apply. Therefore, the Tribunal found no infirmity in the order of the Commissioner of Income-tax(Appeals) and dismissed the appeal filed by the Revenue.
Separate Judgement: No separate judgment was delivered by the judges in this case.
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2013 (9) TMI 1260
Issues Involved: Whether the Division Bench of the Delhi High Court could entertain and allow the petition filed as Public Interest Litigation for setting aside an order passed by NEAA and remand the case for decision on merits.
Details of the Judgment: The Appellant, a company, applied for expansion of its plant, which was granted environmental clearance. However, a group filed a suit and subsequent applications for injunction against the public hearing. Another writ petition was filed but later withdrawn. Respondent No. 1 challenged the environmental clearance granted by NEAA. NEAA dismissed the appeal citing lack of standing of the appellant organization. Respondent No. 1 then filed a Writ Petition as a Public Interest Litigation to set aside NEAA's order and have the appeal decided on merits.
The Appellant objected to the maintainability of the petition, citing it should have been filed under Article 226 and that the Delhi High Court lacked jurisdiction. The Division Bench overruled the objections and relied on a previous judgment to conclude that the appellant organization had standing to challenge NEAA's decision. The Supreme Court noted that the petition should have been heard by a Single Judge as per the Delhi High Court Rules, and the Division Bench's decision was legally impermissible.
The Supreme Court allowed the appeal, setting aside the impugned order and directing the writ petition to be listed before a Single Judge for decision without influence from previous orders. It clarified that no opinion on the case's merits was expressed, allowing the parties to present arguments before the Single Judge. The importance of following jurisdictional rules by all benches of the High Court was emphasized to maintain the integrity of the judicial process.
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2013 (9) TMI 1259
Issues involved: Appeal by Revenue against CIT(A) order deleting addition on account of retention money on contract amounting to Rs. 3,94,28,431.
Summary:
Issue 1: Addition on account of retention money The assessee, engaged in electrical construction business, did not include retention amount on contract in its income for the year as the amounts were yet to be received. The Assessing Officer disagreed citing the issue's recurrence and pending status of a related case. CIT(A), following a previous decision and considering consistency, deleted the addition. The Revenue challenged the decision based on a pending Special Leave Petition (SLP) before the Supreme Court. The assessee, however, informed that the SLP was dismissed. The Tribunal upheld the CIT(A)'s decision, emphasizing the need to follow the jurisdictional High Court's decision unless overruled by a higher authority or stayed. As the Revenue failed to provide reasons to deviate from the Tribunal's earlier decision, the current appeal was dismissed, affirming the allowance of the retention amounts deduction.
In conclusion, the appeal by Revenue was dismissed, upholding the deletion of the addition on account of retention money on contract.
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2013 (9) TMI 1258
Issues Involved: 1. Deletion of addition made under "short term capital gains". 2. Treatment of E-Store Software expenditure and digitalization development charges. 3. Disallowance of business promotion expenses.
Summary:
Issue 1: Deletion of Addition under "Short Term Capital Gains" The Revenue challenged the deletion of an addition of Rs. 6,68,95,536/- made by the Assessing Officer (A.O.) under the head "short term capital gains". The assessee had sold agricultural land and claimed that the gains were not taxable as the land did not fall within the definition of "capital asset" u/s 2(14) of the Income-tax Act, 1961. The A.O. treated the land as falling within Chennai Municipal Corporation limits and taxed the gains. The CIT(Appeals) found that the land was located more than 8 KMs from the nearest Municipality or Municipal Corporation and thus did not qualify as a capital asset. The Tribunal upheld the CIT(Appeals)' decision, noting that the land was agricultural and situated beyond the specified limits, thereby not taxable as capital gains.
Issue 2: Treatment of E-Store Software Expenditure and Digitalization Development Charges The Revenue and the assessee both appealed regarding the treatment of E-Store Software expenditure of Rs. 62,22,250/- and digitalization development charges of Rs. 65,62,250/-. The A.O. disallowed these as revenue outgo, treating them as capital expenditure. The CIT(Appeals) upheld the disallowance but allowed depreciation at 60%. The Tribunal, however, found that the software and digitalization work were necessary for the assessee's business operations and did not provide an enduring benefit. Thus, it ruled in favor of the assessee, treating the expenditure as revenue outgo.
Issue 3: Disallowance of Business Promotion Expenses The A.O. disallowed 20% of the business promotion expenses due to lack of proper evidence, while the CIT(Appeals) reduced the disallowance to 10%. The Tribunal found no reason to interfere with the CIT(Appeals)' decision, considering the nature and volume of the assessee's business. Both the Revenue's and the assessee's appeals on this issue were dismissed.
Conclusion: The appeal of the Revenue was dismissed, and the appeal of the assessee was partly allowed. The Tribunal upheld the CIT(Appeals)' decisions on the non-taxability of the agricultural land sale and the scaling down of business promotion expenses disallowance, while it allowed the assessee's claim for treating software and digitalization expenses as revenue outgo.
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2013 (9) TMI 1257
Issues Involved: 1. Deduction u/s 80IA(4)(iii) for various types of income. 2. Classification of income (business income vs. income from other sources). 3. Eligibility of lease rent income for deduction u/s 80IA(4)(iii).
Summary:
Issue 1: Deduction u/s 80IA(4)(iii) for Various Types of Income The assessee's appeal contends that the Commissioner of Income Tax (Appeals) erred in not granting deduction u/s 80IA(4)(iii) for several types of income, including rent from others, rent from the auditorium, interest income, operation & maintenance income, revenue sharing income, and other income. The Revenue's appeal challenges the Commissioner of Income Tax (Appeals)'s decision to allow deduction u/s 80IA(4)(iii) for lease rent income from the industrial park.
Issue 2: Classification of Income The Assessing Officer classified the rent from premises as "income from house property" and other incomes under "income from other sources," thus denying the deduction u/s 80IA(4)(iii). The Commissioner of Income Tax (Appeals) held that the lease rent income from the industrial park is "profits and gains of business or profession" and eligible for deduction u/s 80IA(4)(iii). However, the Commissioner of Income Tax (Appeals) classified operation & maintenance income, revenue sharing income, and other income as "income from other sources," not eligible for deduction u/s 80IA(4)(iii).
Issue 3: Eligibility of Lease Rent Income for Deduction u/s 80IA(4)(iii) The Tribunal upheld the Commissioner of Income Tax (Appeals)'s decision that lease rent income from the industrial park is "income from business" and eligible for deduction u/s 80IA(4)(iii). The Tribunal referenced the Hon'ble Madras High Court's decision in CIT Vs. Elnet Technologies Ltd. and the co-ordinate Bench's decision in ACIT Vs. Ticel Bio Park Ltd., which supported the classification of such income as business income.
Conclusion: The Tribunal concluded that except for the interest income of Rs. 7,74,19,358/- and other income of Rs. 21,29,999/-, all other incomes are assessable under "income from business" for the purpose of computing deduction u/s 80IA(4)(iii). The appeal of the assessee was partly allowed, the Revenue's appeal was dismissed, and the cross-objection by the assessee was disposed of accordingly.
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2013 (9) TMI 1256
Issues Involved:
1. Deduction u/s 80IA(4)(iii) for various types of income. 2. Classification of lease rent income from industrial park. 3. Eligibility of ancillary services income for deduction u/s 80IA(4)(iii).
Summary:
Issue 1: Deduction u/s 80IA(4)(iii) for Various Types of Income
The assessee's appeal contended that the Commissioner of Income Tax (Appeals) erred in not granting deduction u/s 80IA(4)(iii) for several types of income, including rent from others, rent from the auditorium, interest income, operation & maintenance income, revenue sharing income, and other income. The Revenue's appeal challenged the Commissioner of Income Tax (Appeals) for allowing deduction u/s 80IA(4)(iii) on lease rent income from the industrial park.
Issue 2: Classification of Lease Rent Income from Industrial Park
The Commissioner of Income Tax (Appeals) held that the lease rent income of Rs. 51,86,67,230/- from the industrial park is assessable under "profits and gains of business or profession" and eligible for deduction u/s 80IA(4)(iii). This decision was upheld by the Tribunal, which cited the Hon'ble Madras High Court's decision in CIT Vs. Elnet Technologies Ltd., affirming that income from leasing out property with amenities is business income, not "income from house property" or "income from other sources."
Issue 3: Eligibility of Ancillary Services Income for Deduction u/s 80IA(4)(iii)
The Commissioner of Income Tax (Appeals) held that operation and maintenance income, revenue sharing income, and other income are not business income but income from ancillary services, thus not eligible for deduction u/s 80IA(4)(iii). However, the Tribunal, following the decision in ACIT Vs. Ticel Bio Park Ltd., held that except for interest income of Rs. 7,74,19,358/- and other income of Rs. 21,29,999/-, the rest of the incomes, including rent from premises, operation and maintenance income, revenue sharing income, rent from the auditorium, and rent from others, are assessable under "income from business" for the purpose of deduction u/s 80IA(4)(iii).
Conclusion:
The Tribunal directed the Assessing Officer to treat interest income and other income under "income from other sources" and allow deduction u/s 80IA on the rest of the incomes. The assessee's appeal was partly allowed, the Revenue's appeal was dismissed, and the cross-objection by the assessee was disposed of accordingly.
Order pronounced in the open court on Friday, the 27th day of September, 2013 at Chennai.
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2013 (9) TMI 1255
Issues Involved: 1. Jurisdiction of Civil Court vs. Tribunal u/s 85 of the Rajasthan Wakf Act, 1995. 2. Validity of sale deeds concerning Wakf property. 3. Entitlement to file the suit. 4. Limitation and court fee issues.
Summary:
Jurisdiction of Civil Court vs. Tribunal u/s 85 of the Rajasthan Wakf Act, 1995: The primary issue was whether the Civil Court had jurisdiction to entertain the suit filed by the Respondent or if the matter fell within the exclusive jurisdiction of the Tribunal constituted under the Rajasthan Wakf Act, 1995, as per Section 85 of the Act. The Civil Court returned the plaint based on the Respondent's application citing the jurisdictional bar under Section 85. The Petitioners challenged this decision, but the High Court upheld the Civil Court's order, referencing the Rajasthan High Court's judgment in Syed Inamul Haq Shah v. State of Rajasthan. However, the Supreme Court noted that the said judgment had been overruled by the Supreme Court in Sardar Khan and Ors. v. Syed Nazmul Hasan (Seth) and Ors., thus invalidating the High Court's reliance on it.
Validity of Sale Deeds Concerning Wakf Property: The suit involved several issues about the validity of sale deeds executed concerning the disputed property, which the Respondents claimed to be Wakf property. The Tribunal's jurisdiction to determine whether a property is Wakf property was highlighted, as per Section 7 of the Act. However, the Supreme Court clarified that the Civil Court retained jurisdiction over suits filed before the enactment of the Rajasthan Wakf Act, 1995, per Section 7(5).
Entitlement to File the Suit: The Respondents initially filed the suit in 1980 for possession and rendition of accounts, later amending it to include a declaration that the sale deed dated 28.2.1983 was invalid. The Supreme Court observed that suits filed before the enactment of the 1995 Act would continue in Civil Court, as per the precedent set in Sardar Khan's case.
Limitation and Court Fee Issues: The suit also raised issues regarding whether it was barred by limitation and if the court fee was insufficient. These procedural matters were to be addressed by the Civil Court upon remand.
Conclusion: The Supreme Court allowed the appeal, set aside the High Court's judgment, and directed the Civil Court to decide the suit. The Civil Court retained jurisdiction over the suit filed before the enactment of the Rajasthan Wakf Act, 1995, and was competent to decide the issues involved.
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2013 (9) TMI 1254
Issues Involved: 1. Alleged encroachment on government land. 2. Locus standi of the petitioner. 3. Definition and misuse of Public Interest Litigation (PIL).
Judgment Summary:
1. Alleged Encroachment on Government Land: The petitioner claimed encroachment on land recorded in the name of Jaipur Development Authority (JDA) and other public properties. The petitioner sought removal of encroachments and rectification of revenue records. The respondents, including JDA, denied these allegations, stating no documentary evidence supported the claims. The court noted that the petitioner failed to detail the alleged encroachers and specific areas of encroachment, rendering the claims unsubstantiated.
2. Locus Standi of the Petitioner: The JDA questioned the petitioner's locus standi, arguing that the petitioner had no direct connection to the land in dispute and had not included the alleged encroachers as parties to the writ proceedings. The court emphasized the necessity of locus standi, referencing the Janata Dal case, which mandates that only those with bona fide interest and sufficient standing can initiate PIL.
3. Definition and Misuse of Public Interest Litigation (PIL): The court extensively discussed the concept of PIL, citing definitions from Strouds Judicial Dictionary and Black's Law Dictionary. It reiterated that PIL should be used to address genuine public grievances and not for personal gain or oblique motives. The court highlighted the need for careful scrutiny to prevent misuse by "busy bodies" or those seeking publicity. The court concluded that the petition lacked merit, was based on disputed facts unsuitable for adjudication under Article 226, and appeared to be motivated by personal interests rather than genuine public concern.
Conclusion: The writ application was dismissed due to lack of merit, absence of detailed material facts, and failure to establish the petitioner's locus standi. The court emphasized the importance of preventing misuse of PIL for personal or political motives. No costs were awarded.
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2013 (9) TMI 1253
The High Court of Gujarat heard an appeal regarding the deletion of an addition of Rs. 2,47,30,143 made by the AO under Section 145A of the Act. The question of law was whether the Appellate Tribunal was right in confirming the order passed by the CIT(A) in this regard. The case was to be heard along with Tax Appeal Nos. 329/2010 and 330/2010.
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2013 (9) TMI 1252
Allegations of connivance on District Excise Officer (DEO) - Replacement of deed - Appeal in HC for Quashing a complaint u/s 420 and 120-B of the IPC against DEO - Forged and fabricated Partnership deed - Excise Contracts for Business of liquor - On 27.2.2002, a partnership firm was constituted and a partnership deed was executed on the same date with the intention to carry on business of liquor. The said partnership firm was reconstituted and a deed dated 5.3.2002 was executed inducting among others the respondent no.1 a partner of the firm and the said firm now consisted of twelve partners. The excise auctions for the year 2003-2004 was held on 6.3.2003 and the said firm participated in the auction and being a successful bidder, the contract was awarded to it.
The respondent no. 1 filed a complaint alleging that while negotiating and accepting the contract for the year 2003-2004, the reconstituted partnership deed dated 5.3.2002 was utilised, he had also invested a huge amount, but the said deed was subsequently replaced by a forged/fabricated deed dated 6.3.2003 in which the respondent no.1 was not a partner, was implanted in the excise office in its place to deprive him of the profits of the firm.
HELD THAT:- When a prosecution at the initial stage is to be quashed, the test to be applied by the court is whether the uncontroverted allegations as made, prima facie establish the offence. At this stage neither the court can embark upon an inquiry, whether the allegations in the complaint are likely to be established by evidence or nor the court should judge the probability, reliability or genuineness of the allegations made therein. More so, the charge sheet filed or charges framed at the initial stage can be altered/amended or a charge can be added at the subsequent stage, after the evidence is adduced in view of the provisions of Section 216 Cr.P.C.
It is a settled legal proposition that while considering the case for quashing of the criminal proceedings the court should not "kill a still born child", and appropriate prosecution should not be stifled unless there are compelling circumstances to do so. An investigation should not be shut out at the threshold if the allegations have some substance.
When a prosecution at the initial stage is to be quashed, the test to be applied by the court is whether the uncontroverted allegations as made, prima facie establish the offence. At this stage neither the court can embark upon an inquiry, whether the allegations in the complaint are likely to be established by evidence or nor the court should judge the probability, reliability or genuineness of the allegations made therein.
Enquiry proceedings to continue.
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2013 (9) TMI 1251
Issues involved: Appeal against order of CIT(A)-8, Mumbai for A.Y. 2007-08.
Issue 1: Disallowance of transaction charges, Leaseline charges, and VSAT charges u/s. 40(a)(ia). The Revenue contended that charges were for professional services by stock exchange, requiring TDS deduction. However, Tribunal held charges not 'fees for technical services,' citing precedent. CIT(A)'s decision upheld due to conformity with precedent.
Issue 2: Addition of mark to market losses in derivative transactions. Assessee claimed loss as expenditure u/s. 37(1) based on Supreme Court ruling. CIT(A) accepted plea following ITAT precedent. Revenue failed to provide contrary decision. Tribunal upheld CIT(A)'s decision.
General: Grounds 3 and 4 not considered independently. Appeal by Revenue dismissed.
This judgment by Appellate Tribunal ITAT Mumbai addressed issues of disallowance of charges under section 40(a)(ia) and addition of mark to market losses in derivative transactions for A.Y. 2007-08. The Tribunal upheld the CIT(A)'s decision in both instances, citing conformity with precedent and lack of contrary evidence provided by the Revenue. The appeal was ultimately dismissed, with grounds 3 and 4 deemed general in nature and not considered independently.
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2013 (9) TMI 1250
Issues involved: The judgment involves appeals filed by the same assessee for A.Ys. 2005-06 to 2009-10 against a common order dated 12/03/2013 of ld. CIT(A) regarding the applicability of Section 194J of the Income Tax Act.
Details of the Judgment:
1. Background and Unbundling of Rajasthan State Electricity Board: The assessee-company, engaged in power distribution in Rajasthan, purchases power from Rajasthan Rajya Vidhyut Utpadan Nigam Ltd. (RVPN) and sells it to consumers. On unbundling of the Rajasthan State Electricity Board, various government companies were formed, including RVPN for transmission. The Electricity Act 2003 aimed to regulate the electricity industry and promote competition.
2. Technical Services and Transmission Charges: The Assessing Officer (A.O.) contended that payments to RVPN for transmission constituted technical services u/s 194J, leading to a demand u/s 201(1) and interest u/s 201(1A). The A.O. argued that RVPN's activities required technical support, falling under technical services. However, the assessee disputed this, stating that the State Load Dispatch Centre's directions were statutory and not for services rendered.
3. Appellate Proceedings and Precedent: The ld. CIT(A) upheld the A.O.'s decision, leading to further appeal. Both parties reiterated arguments, with the assessee citing a Jaipur Bench decision that transmission charges were not for technical services. The ITAT Jaipur Bench's ruling supported the assessee's stance, emphasizing that the charges were reimbursement of costs, not technical services. Additionally, interest u/s 201(1A) was deemed inapplicable.
4. Final Decision and Outcome: Respecting the Tribunal's precedent, it was held that Section 194J did not apply to the assessee's transmission charges to RVPN. Consequently, the A.O.'s decision to treat the assessee as in default u/s 201 and impose interest u/s 201(1A) was deemed incorrect. Thus, all appeals of the assessee were allowed, overturning the previous decisions.
Conclusion: The judgment clarified that payments for transmission charges were not subject to tax deduction u/s 194J, as they were considered reimbursement of costs rather than technical services. The assessee's appeal was successful, highlighting the importance of legal precedent in tax matters.
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2013 (9) TMI 1249
Issues Involved: 1. Whether the activity of extraction and processing of granite boulders constitutes "manufacture or production" u/s 80IB and u/s 32(1)(iia) of the Income Tax Act. 2. Whether the absence of a valid Small Scale Industrial (SSI) certificate disentitles the assessee from claiming deduction u/s 80IB.
Summary:
Issue 1: "Manufacture or Production" u/s 80IB and u/s 32(1)(iia): The assessees, engaged in extracting granite boulders and producing granite aggregates through mechanical processes, claimed deductions u/s 80IB. The Assessing Officer (AO) rejected these claims, arguing that the activities did not fall under the definition of "manufacture" as per sec. 2(29BA), and cited case laws to support this view. The CIT(A) upheld the AO's decision for the assessment year 2009-10, stating that the activities did not meet the criteria of "manufacture" under sec. 2(29BA).
The ITAT analyzed whether the activities of the assessee could be considered "manufacture" or "production." The Tribunal referred to various judgments, including the Supreme Court's decision in Arihant Tiles & Marbles (P.) Ltd., which held that converting marble blocks into slabs and tiles constitutes "manufacture or production." The Tribunal concluded that the activities of the assessees, involving mechanical processes to produce granite aggregates, sand, and dust from boulders, resulted in new and distinct commodities with different names, characters, and uses. Therefore, these activities constituted "manufacture" and "production" under sec. 80IB.
Issue 2: Absence of SSI Certificate and Deduction u/s 80IB: The AO also denied the deduction u/s 80IB for the assessment year 2008-09 on the grounds that the assessee failed to produce a valid SSI certificate. The CIT(A) upheld this decision. The ITAT examined whether furnishing an SSI certificate was mandatory for claiming deduction u/s 80IB. Referring to the Delhi High Court's decision in Praveen Soni v. CIT, the Tribunal held that registration under the Industrial Development Regulation Act is not a prerequisite for treating an assessee as a small-scale industrial undertaking. The relevant criteria are the ownership and value of plant and machinery as per the Central Government's notification. Since the assessees met these criteria, the absence of an SSI certificate did not disentitle them from claiming the deduction u/s 80IB.
Conclusion: The ITAT allowed the appeals, holding that the activities of the assessees constituted "manufacture or production" and that the absence of an SSI certificate did not bar the deduction u/s 80IB.
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2013 (9) TMI 1248
Issues Involved:1. Disallowance of lease equalization charges by the A.O. 2. Confirmation of disallowance by the ld. CIT(A). Summary:Disallowance of Lease Equalization Charges by the A.O.:The assessee, a non-banking finance company (NBFC), claimed deductions for lease equalization charges as per ICAI guidelines. The A.O. disallowed these deductions, arguing that the ICAI guidelines do not alter the non-cash nature of lease equalization charges and that there is no provision u/s 30 to 43D or u/s 37 of the Income Tax Act allowing such deductions. The A.O. held that lease equalization is merely an accounting adjustment and not an actual expenditure. Confirmation of Disallowance by the ld. CIT(A):The assessee appealed to the ld. CIT(A), contending that lease equalization charges are part of the statutory accounting method prescribed by ICAI to reflect true income. The ld. CIT(A) upheld the A.O.'s decision, stating that the concept of lease equalization reserve is not recognized under the Income Tax Act. He emphasized that allowing such deductions would result in double deductions for the cost of leased assets, which is not permissible. Tribunal's Decision:The Tribunal considered the rival submissions and the guidance note issued by ICAI. It acknowledged that the concept of lease equalization is an accounting method to match cost with revenue. However, it stressed that for tax purposes, the difference between the annual lease charge and the depreciation allowed under the Income Tax Act should be considered, not the depreciation claimed in the books as per the Companies Act. The Tribunal restored the issue to the A.O. for fresh consideration, directing the assessee to provide the working of lease equalization charges based on the depreciation figures allowed under the Income Tax Act. Conclusion:The appeals were treated as allowed for statistical purposes, with the A.O. instructed to verify and allow the claim of the assessee for deduction on account of lease equalization charges in accordance with the law. Order pronounced in the open court on 6th Sept. 2013.
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2013 (9) TMI 1247
Issues involved: Appeal filed by Revenue against CIT (A)'s order allowing loss on F & O to be adjusted against business profit u/s 43(5)(c) & (d) instead of u/s 73 read with 73(1) of the Income Tax Act 1961.
Summary: 1. The Revenue appealed against CIT (A)'s order allowing the adjustment of loss on F & O against business profit u/s 43(5)(c) & (d) instead of u/s 73 read with 73(1) of the Income Tax Act 1961. 2. The assessee, engaged in trading in share futures and options, filed its return declaring a loss. The Assessing Officer treated the loss as speculative, disallowing it to be set off against other business income. 3. The CIT (A) considered the submissions and held that the loss on F & O derivative trading should be treated as business loss, not speculative. The appellant provided evidence that the transactions were done through a recognized stock exchange. 4. The Revenue argued that share futures are derivatives of shares and should be treated as speculative. The AR argued that the loss in derivatives should be considered as normal business loss post-amendment in section 43(5). 5. The Tribunal found that the loss incurred in share futures was a normal business loss, not speculative, as per the amended section 43(5). Referring to a previous Delhi Tribunal decision, the Tribunal upheld CIT (A)'s order.
6. The Tribunal dismissed the Revenue's appeal, affirming that the loss incurred by the assessee was a normal business loss and not speculative, in line with the provisions of section 43(5).
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