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2011 (11) TMI 810
Issues Involved:
1. Whether the assessee-HUF was in possession of the jewellery as on 31.03.2005.
2. Whether the jewellery was acquired by the assessee-HUF from late Shri Dharampal Bansal.
3. Whether the transactions with M/s M.R. Jewellers were genuine or accommodation entries.
Issue-wise Detailed Analysis:
1. Possession of Jewellery as on 31.03.2005:
The assessee-HUF filed its return declaring total income including LTCG from the sale of gold jewellery. The AO disbelieved the acquisition and sale of jewellery, adding the sale proceeds to the total income. The CIT(A) upheld the AO's order, finding no evidence of the source or acquisition of the jewellery, and noting suspicious circumstances around the filing of the wealth-tax return.
The Tribunal considered the evidences provided by the assessee, including the wealth-tax assessment order and a valuation report. The Tribunal found that the wealth-tax order was passed by an officer without jurisdiction and in undue haste, suggesting it was procured to support the income-tax claim. The valuation report lacked a date, and the valuer's statement indicated no proper record was maintained. Consequently, the Tribunal concluded there was no reliable evidence that the assessee owned the jewellery as on 31.03.2005, determining the jewellery's existence came to light around 30.03.2006.
2. Acquisition of Jewellery from Late Shri Dharampal Bansal:
The assessee claimed to have received about 250 tolas of gold jewellery from his father, supported by statements from the assessee and his mother. The AO and CIT(A) found these statements to be self-serving and lacking corroborative evidence. The Tribunal noted the absence of detailed records and the inconsistency with the financial position disclosed by the assessee. It held that the assessee failed to provide satisfactory evidence of the jewellery's acquisition from late Shri Dharampal Bansal.
However, acknowledging the custom in Hindu families, the Tribunal found it reasonable to assume that the assessee could have received 1000 grams of jewellery from his father and on other occasions. The remaining jewellery was considered unaccounted, and its fair market value was to be included in the assessee's total income.
3. Transactions with M/s M.R. Jewellers:
The AO deemed the transactions with M/s M.R. Jewellers as bogus, citing inconsistencies in the statements of the jeweller and the assessee. The Tribunal, having concluded the jewellery's existence around 30.03.2006, found the dates of sale in harmony with this finding. It applied Section 69A, determining that the fair market value of the jewellery at the time it was found to be owned by the assessee would be the same as the sale proceeds, obviating the need for capital gains computation.
Conclusion:
The Tribunal partly allowed the appeal, directing the AO to modify the order by including the fair market value of the unaccounted jewellery in the assessee's total income, while acknowledging the possession of 1000 grams of jewellery as explained.
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2011 (11) TMI 809
Issues Involved:
1. Addition of Rs. 40,54,325 and Rs. 60,75,000 under Section 69 as unexplained investment for the assessment year 2004-05.
2. Disallowance of 1/3rd development expenses for Govind Vatika Project.
3. Addition of Rs. 1,24,00,000 under Section 69 as unexplained investment for Gokul Vihar Project for the assessment year 2005-06.
4. Addition of Rs. 40,51,000 as unexplained investment for Brij Vihar Project for the assessment year 2005-06.
5. Estimation of profits for Brij Vihar Project and Gokul Vihar Project for the assessment year 2005-06.
6. Addition of Rs. 1,10,00,000 as unexplained investment for Shubham Vihar Project for the assessment year 2006-07.
7. Addition of Rs. 21,00,000 as unexplained investment for land at Begus for the assessment year 2006-07.
8. Addition of Rs. 9,58,500 as unexplained cash found during search for the assessment year 2008-09.
9. Estimation of profits for Shubham Vihar Project for the assessment years 2006-07, 2007-08, and 2008-09.
10. Addition of Rs. 23,75,000 as unexplained investment for land at Machwa for the assessment year 2007-08.
Detailed Analysis:
1. Addition of Rs. 40,54,325 and Rs. 60,75,000 under Section 69 as unexplained investment for the assessment year 2004-05:
The Tribunal observed that the assessee, a land developer, used to prepare two types of agreements for land purchases. The first agreement reflected the actual sale consideration, while the second showed a suppressed amount. The assessee explained that funds for land purchases were sourced from advances received from plot bookings. The Tribunal found that the seized documents corroborated the assessee's explanation, showing both receipts and payments. Hence, the additions of Rs. 40,54,325 and Rs. 60,75,000 were deleted.
2. Disallowance of 1/3rd development expenses for Govind Vatika Project:
The AO disallowed 1/3rd of the development expenses, estimating the profit at Rs. 19,98,070 and apportioning it over three years. The CIT(A) upheld the disallowance but directed the AO to give credit for the profit already shown by the assessee. The Tribunal found the disallowance excessive and reduced it, estimating the disallowance at Rs. 1,12,485 for 2004-05 and Rs. 1,77,765 for 2005-06.
3. Addition of Rs. 1,24,00,000 under Section 69 as unexplained investment for Gokul Vihar Project for the assessment year 2005-06:
The AO added Rs. 1,24,00,000 as unexplained investment. The assessee explained that funds were sourced from advances received from bulk and retail purchasers. The Tribunal accepted the assessee's explanation, noting the modus operandi of the business and the corroborative evidence from the Govind Vatika Project. Hence, the addition was deleted.
4. Addition of Rs. 40,51,000 as unexplained investment for Brij Vihar Project for the assessment year 2005-06:
Following the same reasoning as for the Gokul Vihar Project, the Tribunal deleted the addition of Rs. 40,51,000, accepting the assessee's explanation of sourcing funds from advances received from purchasers.
5. Estimation of profits for Brij Vihar Project and Gokul Vihar Project for the assessment year 2005-06:
The AO estimated profits at higher rates, which the CIT(A) partly upheld. The Tribunal found the estimates excessive and reduced the additions, estimating the disallowance at 1/3rd of the profit shown by the assessee. For Brij Vihar Project, the addition was reduced to Rs. 4,010 for 2005-06 and Rs. 62,486 for 2006-07. For Gokul Vihar Project, the addition was reduced to Rs. 1,33,090.
6. Addition of Rs. 1,10,00,000 as unexplained investment for Shubham Vihar Project for the assessment year 2006-07:
The Tribunal accepted the assessee's explanation that funds were sourced from advances received from purchasers, following the same reasoning as for other projects. Hence, the addition of Rs. 1,10,00,000 was deleted.
7. Addition of Rs. 21,00,000 as unexplained investment for land at Begus for the assessment year 2006-07:
The Tribunal noted that the agreement was in the name of the assessee's HUF and the payment was made from the HUF's bank account. The issue was restored to the AO for verification, and the addition was deleted.
8. Addition of Rs. 9,58,500 as unexplained cash found during search for the assessment year 2008-09:
The assessee initially stated that the cash was received from 7-8 persons but later explained it was from a single person, Shri Leela Dhar. The Tribunal found the explanation credible, supported by the statement and bank account of Shri Leela Dhar. Hence, the addition was deleted.
9. Estimation of profits for Shubham Vihar Project for the assessment years 2006-07, 2007-08, and 2008-09:
The Tribunal found the AO's estimates excessive and reduced the additions, estimating the disallowance at 1/3rd of the profit shown by the assessee. For 2006-07, the addition was reduced to Rs. 1,72,692; for 2007-08, to Rs. 33,315; and for 2008-09, to Rs. 97,069.
10. Addition of Rs. 23,75,000 as unexplained investment for land at Machwa for the assessment year 2007-08:
The Tribunal noted that the agreement indicated an advance payment of Rs. 3,75,000, with no evidence of further payment. The addition of Rs. 20,00,000 was deleted, and the addition of Rs. 3,75,000 was also deleted, as the source was explained through the disclosed profits.
Conclusion:
The Tribunal partly allowed the appeals filed by the assessee and partly allowed the appeals of the Revenue for the assessment years 2005-06 and 2006-07, while dismissing the appeal for the assessment year 2007-08.
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2011 (11) TMI 808
Issues Involved:
The judgment involves the disallowance of the assessee's claim of deduction under sec. 80IB for not furnishing the audit report in Form 10CCB along with the return of income filed by the assessee for Assessment Years 2003-04 and 2004-05.
Assessment Year 2003-04:
The assessee's claim of deduction under sec. 80-IB was disallowed by the Assessing Officer as the audit report in Form No.10CCB was not furnished along with the return of income. The CIT(A) upheld this disallowance stating that sec. 80-IB mandates the audit report to be furnished along with the return of income, and failure to do so cannot be considered a curable defect. The assessee argued that filing the audit report during assessment proceedings is sufficient, citing precedents where similar requirements were considered directory rather than mandatory. The Tribunal held that the assessee had satisfied the condition by filing the audit report during the reassessment proceedings under sec. 147, deleting the disallowance of the claim under sec. 80-IB.
Assessment Year 2004-05:
Similar to the previous year, the assessee's claim of deduction under sec. 80-IB was disallowed in the reassessment as the audit report in Form 10CCB was not enclosed with the original return of income. The CIT(A) upheld this disallowance based on the same grounds as in the previous year. The assessee contended that the audit report filing requirement is directory and not mandatory, citing relevant court decisions. The Tribunal, considering the precedents and the filing of the audit report during the reassessment proceedings, held that the assessee had fulfilled the condition for claiming deduction under sec. 80-IB, thereby allowing the appeals filed by the assessee.
Conclusion:
The Tribunal allowed the appeals filed by the assessee for both Assessment Years 2003-04 and 2004-05, as the assessee had satisfied the condition of filing the audit report during the reassessment proceedings under sec. 147, thereby deleting the disallowance of the claim under sec. 80-IB. Other grounds challenging the validity of proceedings under sec. 147 and the assessment made under the same were deemed redundant in light of the main issue being decided in favor of the assessee.
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2011 (11) TMI 807
Issues involved: Challenge to rejection of input-tax credit based on sale release order not being equated with tax invoice.
Summary:
The present application u/s 8 of the West Bengal Taxation Tribunal Act, 1987 challenges the rejection of input-tax credit by the Joint Commissioner of Sales Tax, Bally Circle based on a sale release order issued by South Eastern Railway not being considered as a tax invoice. The petitioner purchased goods on auction from South Eastern Railway and claimed input-tax credit of Rs. 1,63,332 u/s 21 of the VAT Act, which was rejected.
The petitioner argued that the sale release order should be treated as a tax invoice as it contained all the required particulars as per rule 91 of the VAT Rules, 2005. The petitioner's representative cited a case to support the claim that genuine purchase transactions entitle the petitioner to input-tax credit.
The respondents contended that the dealer must produce an original tax invoice to claim input-tax credit as per the provisions of the VAT Act, 2003. Since no tax invoice was produced, the claim was disputed.
The Tribunal noted that the sale release order issued by South Eastern Railway contained all the details required for a tax invoice as per rule 91 of the VAT Rules, 2005. The confirmation by South Eastern Railway and the collection of VAT/taxes further supported the petitioner's claim for input-tax credit.
The Tribunal allowed the application, directing the assessing authority to grant input-tax credit after verifying the documents and treating the sale release order as a tax invoice. No costs were awarded in the matter.
Separate Judgement by Sabyasachi Roy (Technical Member):
Sabyasachi Roy, the Technical Member, concurred with the decision.
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2011 (11) TMI 806
Issues involved: Confirmation of addition of unexplained cash in wealth-tax assessment.
Summary:
The appeal arose from the Commissioner of Wealth-tax (Appeals) order regarding the assessment year 2002-2003. The only ground of appeal was against the confirmation of addition of `80,57,680, which was based on a cash seizure of &8377; 80,57,650 from the assessee by the crime branch of Mumbai Police. The Assessing Officer made the addition in the wealth-tax assessment following the income-tax assessment where the unexplained cash amounting to &8377; 80.57 lacs was confirmed. The learned CWT(A) upheld the assessment order stating that the addition was confirmed in the income-tax assessment.
Upon hearing the submissions and examining the evidence, it was revealed that the cash seized from the assessee was converted into Fixed Deposit Receipts (FDRs) in the name of Asstt. Commissioner of Police. The FDR was eventually encashed in 2010 and the amount was credited to the assessee's bank account. The issue revolved around whether the FDR should be considered as part of the assessee's assets for wealth-tax assessment.
Referring to Section 2(ea) of the Wealth-tax Act, it was noted that the definition of "assets" does not explicitly include bank deposits like FDRs. The provision specifies various categories of assets, including cash in hand exceeding a certain amount, but does not mention bank deposits. As the definition is exclusive and does not encompass FDRs or bank deposits, the FDR in question could not be included in the net wealth of the assessee. Consequently, the impugned order was overturned, and the addition was ordered to be deleted.
In conclusion, the appeal was allowed, and the order was pronounced on November 29, 2011.
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2011 (11) TMI 805
The appeal for condonation of delay of 927 days in filing the appeal before Tribunal was dismissed as the applicant failed to provide sufficient justification for the delay. Stay petition, appeal, and miscellaneous application for out of turn hearing were also dismissed.
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2011 (11) TMI 804
Issues Involved:
1. Taxability of capital gains from the sale of shares of a French company to another French company under the Indo-French Tax Treaty.
2. Whether controlling interest is liable to be taxed in France under Article 14(6) of the Indo-French Tax Treaty.
Detailed Analysis:
1. Taxability of Capital Gains:
The primary issue was whether the capital gains arising from the sale of shares of ShanH, a French entity, by MA and GIMD, also French entities, to Sanofi, another French entity, were taxable in India or France under the Indo-French Tax Treaty.
The applicants contended that the transaction involved only the sale of shares in a French company, ShanH, and not the shares of the Indian company, Shantha Biotechnics Ltd. They argued that the capital gains should be taxed in France as per Article 14.5 of the Indo-French Tax Treaty, which states that gains from the alienation of shares representing a participation of at least 10% in a company resident in a contracting state may be taxed in that state.
The Revenue argued that ShanH was merely a front and that the real transaction involved the transfer of controlling interest and assets of Shantha, an Indian company. They claimed that the transaction was designed to avoid tax in India and should be taxed in India.
The Authority observed that the transaction was a scheme to avoid tax in India. It noted that ShanH was created solely for the purpose of acquiring shares in Shantha and had no other business or assets. The Authority concluded that the transaction amounted to a transfer of the underlying assets and control of Shantha, and thus, the gain from the transaction was taxable in India under Article 14.5 of the Indo-French Tax Treaty.
2. Controlling Interest:
The second issue, raised only by MA, was whether controlling interest, assuming it is a separate asset, is liable to be taxed in France under Article 14(6) of the Indo-French Tax Treaty.
Since the Authority ruled that the transaction was taxable in India under Article 14.5, it did not find it necessary to address the second question. Article 14.6 applies only if Article 14.5 does not, and hence, the question of controlling interest being taxed in France did not arise.
Conclusion:
The Authority ruled that the capital gains arising from the sale of shares of ShanH by MA and GIMD to Sanofi were taxable in India under Article 14.5 of the Indo-French Tax Treaty. The second question regarding the taxability of controlling interest in France under Article 14.6 was not considered as it was rendered moot by the ruling on the first issue. The ruling emphasized that the transaction was part of a scheme to avoid tax in India and should not be accepted at face value.
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2011 (11) TMI 803
Issues involved: Refund claims under Rule 5 of CENVAT Credit Rules, 2004 rejected on grounds of exemption of finished product from duty, limitation, and utilization of CENVAT Credit for duty payment on domestic clearances.
Refund Claim 1 - &8377; 1,73,322/-:
The appellant, a 100% EOU manufacturing Peanut Butter, sought refund of duty paid at de-bonding, contending inability to utilize CENVAT Credit due to product's total duty exemption. Tribunal noted duty paid pre-DTA status, allowing refund u/s Rule 5 as credit remained unutilized post-DTA conversion. Citing Hindustan Motors Ltd. case, Tribunal held refund admissible from date credit became unusable.
Refund Claim 2 - &8377; 30,652/-:
Appellant's claim for unutilized CENVAT Credit for exports ending September 2008 was rejected on limitation grounds. Commissioner observed non-disputed limitation breach, yet Tribunal found export date post-claim justified, aligning with Hindustan Motors Ltd. precedent on credit utilization timing for refund eligibility.
Refund Claim 3 - &8377; 3,20,498/-:
Another claim for unutilized CENVAT Credit from October to December 2008 was rejected due to appellant's substantial domestic clearances, implying credit utilization. However, Tribunal noted appellant's sole use of credit for duty payments, indicating surplus credit accumulation post-clearances, justifying refund eligibility.
Conclusion:
Tribunal allowed all refund claims, emphasizing duty exemption post-DTA conversion, credit utilization timing, and bond export compliance as key factors in determining refund eligibility. The unique circumstances of the case warranted a favorable decision for the appellant, aligning with legal precedents and statutory provisions.
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2011 (11) TMI 802
CENVAT Credit of Basic Excise Duty or of Education Cess - Held that:- The prayer is not at all specific inasmuch as it does not refer to CENVAT Credit of Basic Excise Duty or CENVAT Credit of Education Cess - the writ petition is required to be heard independently and the question that requires to be considered is whether CENVAT Credit of Basic Excise Duty can be utilised for payment of Education Cess - review application allowed.
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2011 (11) TMI 801
Issues Involved:
1. Entitlement to deduction u/s 80IB(10) of Rs. 9,03,02,289/-.
2. Entitlement to additional deduction u/s 80IB(10) of Rs. 61,42,053/-.
3. Allowance of excess labor expenses of Rs. 24,04,494/- related to M/s. Shah Heritage Project.
Summary:
Issue 1: Entitlement to deduction u/s 80IB(10) of Rs. 9,03,02,289/-
The Revenue contested the CIT(A)'s decision allowing the assessee's deduction u/s 80IB(10) of Rs. 9,03,02,289/-. The AO had denied the deduction based on the assessment orders for A.Yrs. 2005-06 and 2006-07, noting that the commercial area exceeded the permissible limit. The CIT(A) ruled in favor of the assessee, referencing earlier orders and the Tribunal's consistent view that projects approved before 31-3-2005 are eligible for the deduction, even if the commercial area exceeds the limit. The Tribunal upheld this view, citing the Bombay High Court's decision in CIT vs. Brahma Associates, confirming that clause (d) in sec. 80IB(10) is prospective and not retrospective.
Issue 2: Entitlement to additional deduction u/s 80IB(10) of Rs. 61,42,053/-
The Revenue argued that the assessee did not claim the additional deduction of Rs. 61,42,053/- in the return of income, thus contravening sec. 80A(5). The Tribunal, however, found that the issue was covered by the Tribunal's earlier decisions and the Bombay High Court's ruling in CIT vs. Brahma Associates, which supported the assessee's entitlement to the deduction since the project was approved before the amendment's effective date.
Issue 3: Allowance of excess labor expenses of Rs. 24,04,494/- related to M/s. Shah Heritage Project
The AO disallowed Rs. 24,92,590/- of labor charges, alleging inflated costs in the Shah Heritage Project compared to the Shah Arcade Project. The CIT(A) found that the projects were not in the same vicinity, and the cost differences were justified by the project's size and location. The CIT(A) allowed the expenses except for Rs. 88,196/- related to Shah Arcade's water charges. The Tribunal upheld the CIT(A)'s decision, noting that the AO did not find specific defects in the expenses and that the costs depended on various factors, including quality and location.
Conclusion:
The Tribunal dismissed the Revenue's appeal, confirming the CIT(A)'s decisions on all grounds. The assessee was entitled to the deductions u/s 80IB(10) and the labor expenses were justified except for the minor adjustment of Rs. 88,196/-.
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2011 (11) TMI 800
Issues involved: Copyright infringement, unauthorized software loading, damages, rendition of accounts.
Copyright Infringement: The plaintiff, a software corporation, filed a suit seeking injunction against copyright infringement of its software products, including Microsoft Windows and Office. The plaintiff claimed ownership of the copyright in these works as per the US Copyright Law and provisions of the Copyright Act, 1957. The plaintiff highlighted that unauthorized reproduction, distribution, or sale of their software constitutes infringement under Section 51 of the Copyright Act, 1957.
Unauthorized Software Loading: The defendants were accused of unauthorized hard disk loading of the plaintiff's software onto computers they sold, without proper authorization or licenses. The plaintiff conducted investigations and provided evidence showing the presence of unlicensed software on computers sold by the defendants. Despite a legal notice and settlement meeting, the defendants did not comply, leading to the filing of the suit.
Damages and Rendition of Accounts: The plaintiff sought damages and rendition of accounts due to the copyright infringement. The court, after considering the evidence and lack of rebuttal, decreed in favor of the plaintiff for a permanent injunction. Additionally, punitive damages of Rs. 2 lakh were awarded to the plaintiff, along with the cost of the suit. The court found the plaintiff entitled to these remedies based on the evidence presented and the lack of cross-examination of the plaintiff's witnesses.
Conclusion: The court decreed in favor of the plaintiff for a permanent injunction against copyright infringement, awarded punitive damages, and granted costs of the suit. The defendants were found liable for unauthorized software loading and were ordered to cease infringing activities.
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2011 (11) TMI 799
Issues Involved:
1. Validity and enforceability of the Memorandum of Agreement (MOA) and subsequent Addendums.
2. Breach of contract and obligations under the MOA.
3. Right of first refusal under Clause 21 of the MOA.
4. Interim relief and injunction under Section 17 of the Arbitration and Conciliation Act, 1996.
5. Specific performance and negative covenants under the Specific Relief Act, 1963 (SRA).
6. Jurisdiction and powers of the Arbitral Tribunal.
Detailed Analysis:
1. Validity and Enforceability of the MOA and Subsequent Addendums:
The MOA was initially for five years starting from 1st August 2001 and envisaged the formation of a joint venture company (JVCO) subject to achieving certain revenue projections. The First and Second Addendums amended the MOA, with the Second Addendum extending the agreement until 31st March 2011. The court held that the MOA and Addendums came to an end by efflux of time on 31st March 2011, and there was no implied continuation of the contract thereafter.
2. Breach of Contract and Obligations under the MOA:
The Appellant argued that the Respondent breached the MOA by failing to fulfill its commitments under the Consent Terms. However, the court noted that the Appellant did not make payments from October 2010 onwards and that the MOA and Addendums had expired by 31st March 2011. The Respondent's failure to withdraw signals immediately did not imply consent to extend the MOA.
3. Right of First Refusal under Clause 21 of the MOA:
Clause 21 provided the Appellant with the right of first refusal for any new business or channels launched by the Respondent. The court found that since the MOA had expired, the right of first refusal could not be enforced. The Appellant's claim that the MOA was automatically extended was rejected.
4. Interim Relief and Injunction under Section 17 of the Arbitration and Conciliation Act, 1996:
The Arbitral Tribunal rejected the Appellant's application for interim relief under Section 17, noting that the balance of convenience was not in favor of the Appellant and that any injury to the Appellant could be compensated with damages. The court upheld this decision, agreeing that the Appellant did not meet the conditions for an interim injunction.
5. Specific Performance and Negative Covenants under the Specific Relief Act, 1963 (SRA):
The court emphasized that the relief of an injunction to enforce a negative covenant under Section 42 SRA is discretionary and contingent upon the contract subsisting and the injunction seeker performing their obligations. The court found that the MOA had expired and the Appellant had not fulfilled its payment obligations. Therefore, the conditions for enforcing a negative covenant were not met.
6. Jurisdiction and Powers of the Arbitral Tribunal:
The court noted that its powers under Section 37 of the Arbitration and Conciliation Act to interfere with an order passed by the Arbitral Tribunal are limited. The court found no error or perversity in the Arbitral Tribunal's decision and upheld the Tribunal's conclusion that the balance of convenience did not lie with the Appellant.
Conclusion:
The court dismissed the Appellant's Arbitration Appeal No. 14 of 2011 and OMP No. 809 of 2011, finding no valid grounds for interference with the Arbitral Tribunal's order. The court also imposed costs of Rs. 20,000 on the Appellant, to be paid to the Respondent within two weeks. The court reiterated that its order represents a prima facie view and that the Arbitral Tribunal should form an independent view in the final Award.
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2011 (11) TMI 798
Issues involved: Appointment of Arbitrator by Municipal Corporation of Delhi (MCD) u/s 11(6) of the Arbitration and Conciliation Act, 1996.
Summary:
Issue 1: Appointment of Arbitrator by MCD after filing of the petition
The MCD appointed an Engineer Member of the Delhi Development Authority as a sole Arbitrator after the petition was filed by the Petitioner. The Petitioner argued that MCD forfeited its right to appoint an Arbitrator as per previous legal notices. The MCD contended that the appointment was made in accordance with the arbitration clause.
Issue 2: Interpretation of Section 11(6) of the Act
The Supreme Court's decision in Datar Switchgears v. Tata Finance Ltd. clarified that the right to appoint an Arbitrator u/s 11(6) does not automatically forfeit after 30 days of demand. The appointment must be made before the first party moves the Court under Section 11. The Court relied on this interpretation to appoint an Arbitrator in this case.
Issue 3: Application of previous legal precedents
The decisions in Datar Switchgears, Punj Lloyd v. Petronet MHB Ltd., and Union of India v. Bharat Battery Manufacturing Co. affirmed the interpretation of Section 11(6) and the consequences of not appointing an Arbitrator within the specified time frame. These precedents were applied to determine the outcome of the present case.
Conclusion:
The Court appointed a retired Additional District & Sessions Judge as a Sole Arbitrator to adjudicate the disputes between the parties. The interim orders were to continue until the Petitioner filed an application under Section 17 of the Act within four weeks. Failure to do so would result in the vacation of the interim order.
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2011 (11) TMI 797
Issues Involved:
1. Determination of Annual Letting Value (ALV) of the property for assessment years 1999-2000 to 2002-03.
2. Determination of ALV of the property for assessment year 2005-06.
Summary:
Issue 1: Determination of ALV for Assessment Years 1999-2000 to 2002-03
The assessee, an individual owning a house property, let out the property to M/s Credit Suisse First Boston (I) Securities Pvt. Ltd. for a monthly rent of Rs. 23,000/- and received a deposit of Rs. 2.24 crores. The rental income was initially accepted by the AO u/s 143(1) but later reassessed u/s 143(3)/147, determining the ALV at Rs. 4,80,000/- per annum. The CIT, Central-IV, set aside these assessments u/s 263, directing the AO to determine the ALV in accordance with section 23(1)(a). The AO, considering notional interest on the deposit, determined the ALV at Rs. 2,50,000/- per month. The CIT(Appeals) directed the AO to take the ALV at Rs. 28,000/- per month, based on comparable instances of rent in the same building, which was upheld by the Tribunal. The Tribunal found no infirmity in the CIT(Appeals)'s order, stating it was in consonance with the Delhi High Court's decision in CIT vs. Moni Kumar Subba, which held that notional interest on interest-free security deposits cannot be a determinative factor for ALV u/s 23(1)(a).
Issue 2: Determination of ALV for Assessment Year 2005-06
For the assessment year 2005-06, the property was let out to M/s ABN Amro Bank NV for a monthly rent of Rs. 15,000/- with a deposit of Rs. 2.5 crores. The AO determined the ALV at Rs. 2,50,000/- per month, similar to the previous years. The CIT(Appeals) directed the AO to take the ALV based on the actual rent received, i.e., Rs. 15,000/- per month. The Tribunal, following its decision for the earlier years, modified the CIT(Appeals)'s order and directed the AO to determine the ALV at Rs. 28,000/- per month, based on the fair rent.
Conclusion:
The appeals of the Revenue for assessment years 1999-2000 to 2002-03 were dismissed, and the appeal for assessment year 2005-06 was partly allowed. The ALV for the property was directed to be taken at Rs. 28,000/- per month for all the relevant assessment years.
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2011 (11) TMI 796
Penalty u/s 271D for violation of provisions of section 269SS - Held that:- We are of the view that the transaction between son in law and father in law for giving a support and help as contended by Ld. Counsel and not denied by revenue, in law was not a loan or deposit in stricter sense of section 269SS of the Act and it was only a financial support. Even it is not the allegation that the father in law of assessee has charged any interest on the above loan and hence, this is merely a financial support to son in law by his father in law. Once this is the position, the transaction does not fall in the ambit of section 269SS of the Act. Accordingly, these appeals of the assessee are allowed.
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2011 (11) TMI 795
Issues involved: Delay in issuing directions u/s 11 and 11B of SEBI Act, 1992; Manipulation of scrips of six companies; Inconsistencies in orders issued by different whole time members.
Issue 1: Delay in issuing directions u/s 11 and 11B of SEBI Act, 1992
The judgment highlighted the inordinate delay in initiating proceedings against the appellants, which led to a modification of the impugned order. The manipulation of six scrips in question was said to have occurred in 1999-2000, but proceedings were only initiated in 2005, with the final order debarring the appellants issued in August 2011. The delay, coupled with the merits of the case, led to the decision to only warn the appellants instead of imposing a market access ban.
Issue 2: Manipulation of scrips of six companies
The Securities and Exchange Board of India (SEBI) found that the appellants, along with others, manipulated the scrips of six companies during the period from 1999-2001. The appellants were alleged to be connected entities involved in similar manipulations across different companies. Separate show cause notices were issued for each company, leading to varying orders by different whole time members. The judgment emphasized the need for consistency in handling such cases to avoid discrepancies in penalties imposed.
Issue 3: Inconsistencies in orders issued by different whole time members
The judgment pointed out inconsistencies in the orders issued by different whole time members regarding the manipulation of scrips. The varying periods of debarment and warnings issued to the appellants for similar manipulations raised concerns about the lack of uniformity in decision-making. The need for a consistent approach in dealing with cases involving similar violations was emphasized to ensure fairness and justice in regulatory actions.
This summary provides a detailed overview of the issues involved in the legal judgment, highlighting the key aspects related to delay in issuing directions, manipulation of scrips, and inconsistencies in orders issued by different authorities.
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2011 (11) TMI 794
Issues Involved:
1. Application for cancellation of bail.
2. Justification for granting bail by the Sessions Court.
3. Considerations for cancellation of bail.
4. Change in circumstances post rejection of bail by the High Court.
Summary:
1. Application for cancellation of bail:
The petitioner, an injured-complainant, filed an application for cancellation of bail granted to respondent No. 2, who was arrested in connection with FIR No. 266/09 for offences u/s 307, 325, 323, 341/34 IPC. The High Court had previously rejected respondent No. 2's bail application on 8.12.2009, noting the seriousness of the injuries inflicted on the petitioner.
2. Justification for granting bail by the Sessions Court:
Subsequently, on 22.12.2009, respondent No. 2 filed another bail application before the Sessions Judge, Sri Ganganagar, which was granted on 31.12.2009 by the link Officer during the winter break. The Sessions Judge observed that none of the injuries were dangerous to life and that the respondent's wife was undergoing treatment, thus granting bail.
3. Considerations for cancellation of bail:
The petitioner argued that the Sessions Judge's order was unjustified, as there was no change in circumstances since the High Court's rejection of bail. The respondent countered that the discretion u/s 439 Cr.P.C. exercised by the lower Court should not be interfered with, citing the Supreme Court's decision in Central Bureau of Investigation, Hyderabad vs. Subramani Gopalakrishnan & Anr. (2011) 5 SCC 296, which differentiates considerations for granting and cancelling bail.
4. Change in circumstances post rejection of bail by the High Court:
The High Court noted that the considerations for granting and cancelling bail are not absolute and depend on the case's facts and circumstances. The Court emphasized that the Sessions Judge's order overlooked the High Court's detailed observations on the injuries' seriousness and the medical opinion that the injuries were "dangerous to life." Additionally, no new circumstances justified the bail granted by the Sessions Judge, and the respondent's wife's illness was not substantiated with documents.
Conclusion:
The High Court found the Sessions Judge's order granting bail to be patently illegal and an abuse of process. The application for cancellation of bail was allowed, directing the trial judge to take respondent No. 2 into custody and proceed with the trial. The Court clarified that this cancellation does not preclude the respondent from seeking bail again per legal procedures.
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2011 (11) TMI 793
Issues Involved:
1. Obligation of the State Government to return acquired land after the purpose of acquisition is accomplished.
2. Legality of invoking urgency provisions without tangible reason.
3. Applicability of Standing Order 28 for the return of acquired land.
4. Doctrine of laches and delay in challenging the acquisition.
Summary:
1. Obligation of the State Government to return acquired land:
The primary issue was whether the State Government is obligated to return the acquired land to the owners after the purpose of acquisition is accomplished. The Supreme Court held that Paragraph 493 of the Land Administration Manual does not impose a duty on the State Government to restore the acquired land to the owners. It merely mentions that as a matter of grace, the Government is usually willing to restore agricultural and pastoral land to the owners on their refunding the amount of compensation. The Court emphasized that interpreting Paragraph 493 to mandate the return of land would be contrary to Section 16 of the Land Acquisition Act, 1894, which states that the acquired land vests in the State Government free from all encumbrances.
2. Legality of invoking urgency provisions:
The appellants argued that the acquisition was illegal as the State Government invoked the urgency provisions without any tangible reason, depriving the landowners of their right to file objections u/s 5A(1) and to be heard u/s 5A(2). The Supreme Court noted that this plea was raised before the High Court but was not adequately considered. However, the Court did not find merit in this argument due to the significant delay in challenging the acquisition.
3. Applicability of Standing Order 28:
The appellants relied on Standing Order 28 and the judgment in State of Haryana v. Suraj to argue that the Respondents are duty-bound to return the acquired land. The Supreme Court distinguished the present case from Suraj, noting that in Suraj, the land was declared surplus and was to be disposed of as per Standing Order 28. In contrast, the acquired land in the present case was used for the specified public purpose and later transferred to the Haryana State Electricity Board (HSEB). The Court concluded that the High Court did not err in declining the appellants' prayer for mandamus to return the land.
4. Doctrine of laches and delay in challenging the acquisition:
The Supreme Court upheld the High Court's decision to reject the appellants' challenge to the acquisition due to an unexplained delay of over three decades. The Court cited the doctrine of laches, as established in State of Madhya Pradesh v. Bhailal Bhai, which allows the High Court to deny relief to a petitioner guilty of laches. The Court emphasized that the delay in seeking remedy under Article 226 of the Constitution was unreasonable and unjustified.
Conclusion:
The Supreme Court dismissed the appeal, holding that the appellants failed to make out a case for the issue of a mandamus to the Respondents to release the acquired land. The Court affirmed that the acquired land, once vested in the State Government, can be used for any public purpose and is not required to be returned to the original owners.
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2011 (11) TMI 792
... ...
... ... ..... F.A. Ayyubi, Adv., Mr. B. Krishna Prasad, Adv. O R D E R The Special Leave Petitions are dismissed on the ground of delay as well as on merits.
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2011 (11) TMI 791
The High Court of Karnataka dismissed the appeal by the Revenue challenging a Tribunal order due to the net tax effect being below Rs. 10,00,000, which is not appealable as per Instruction No. 3/2011.
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