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• 2011 (12) TMI 797
  
  The case before the Bombay High Court involved a dispute regarding the deduction of bad debts and provisions for bad and doubtful debts by a banking company incorporated in the USA for the assessment year 2000-2001. The core legal question raised was whether the Income Tax Appellate Tribunal was correct in allowing a deduction under Section 36(1)(viia) of the Income Tax Act in excess of 5% of the total income assessed.The assessee had written off bad debts amounting to Rs. 52.36 crores and made provisions for bad doubtful debts totaling Rs. 34,61,58,000. The dispute arose from the deduction claimed by the assessee under Section 36(1)(viia) at Rs. 26,01,36,049, which was worked out at 5% of the adjusted total income. The assessing officer made disallowances, leading to an increase in the total income and a subsequent adjustment in the deduction under Section 36(1)(viia).The Commissioner of Income Tax (A) upheld the assessing officer's decision regarding the treatment of bad debts but later modified the deduction under Section 36(1)(viia) after various disallowances were deleted. The assessing officer then recalculated the deduction, leading to a reduced amount under Section 36(1)(viia) than initially computed. The assessee contended that the balance amount should be allowed under Section 36(1)(vii) of the Act.The Court analyzed the relevant provisions of Section 36 of the Income Tax Act, particularly focusing on the limitations and conditions for deductions related to bad debts and provisions for bad and doubtful debts. The Court clarified that the deduction under Section 36(1)(vii) should be limited to the amount by which the bad debt exceeds the credit balance in the provision for bad and doubtful debts account.The Court determined that the opening credit balance in the provision for bad and doubtful debts account should be considered for calculating the allowable deduction under Section 36(1)(vii). It concluded that the Tribunal's decision to allow the excess amount under Section 36(1)(vii) after the deduction under Section 36(1)(viia) was maintained at 5% of the total income was correct.Ultimately, the Court dismissed the appeal filed by the Revenue, upholding the Tribunal's decision regarding the allocation of deductions between Section 36(1)(vii) and Section 36(1)(viia) for the banking company.

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• 2011 (12) TMI 796
  
  The legal judgment revolves around the challenge to the legality of a power of attorney and the subsequent sale deeds executed under its authority. The petitioners, original plaintiffs, sought to revoke a power of attorney executed in favor of respondent no.1, which was claimed to be irrevocable. The core issues considered by the court include the validity of the power of attorney, whether it constituted a power coupled with interest, and the implications of the subsequent legal proceedings related to the sale of the disputed property.

  Issues Presented and Considered:

  The primary legal questions addressed in this judgment are:

  • Whether the power of attorney executed by the petitioners in favor of respondent no.1 was irrevocable.
  • Whether the power of attorney constituted a power coupled with interest as per the Indian Contract Act.
  • The implications of the revocation of the power of attorney and its effect on the ongoing legal proceedings related to the property.
  • The interpretation of the power of attorney in light of the surrounding circumstances and legal precedents.

  Issue-Wise Detailed Analysis:

  Relevant Legal Framework and Precedents:

  The court's analysis is grounded in the provisions of the Indian Contract Act, particularly Sections 201, 202, and 204, which deal with the revocation of agency and powers of attorney. The court also considered precedents such as the Supreme Court's rulings in Kamla Devi Vs. Takhatmal and Suraj Lamp and Industries Pvt. Ltd. Vs. State of Haryana, which provide guidance on interpreting powers of attorney and the conditions under which they are deemed irrevocable.

  Court's Interpretation and Reasoning:

  The court emphasized that the mere labeling of a power of attorney as "irrevocable" does not make it so unless it is coupled with an interest. The court examined the language and substance of the power of attorney document, noting that it did not explicitly state it was irrevocable nor did it create an interest in favor of respondent no.1. The court highlighted that the intention of the parties must be discerned from the document as a whole, rather than isolated phrases.

  Key Evidence and Findings:

  The court considered the affidavit and cross-examination of respondent no.1, where he admitted to having no personal interest in the property and acting under instructions from others. This admission undermined the claim that the power of attorney was coupled with interest.

  Application of Law to Facts:

  The court applied the principles of contract and agency law to determine that the power of attorney was not irrevocable. The absence of any interest created in favor of respondent no.1 and the lack of explicit terms indicating irrevocability led the court to conclude that the power of attorney could be revoked by the petitioners.

  Treatment of Competing Arguments:

  The petitioners argued that the power of attorney was not irrevocable, supported by the lack of any interest created in favor of the agent. The court agreed, dismissing the notion that the mere use of the term "irrevocable" was sufficient to prevent revocation. The court also considered the failure of related legal actions by Kishorbhai and others, which further supported the petitioners' position.

  Conclusions:

  The court concluded that the power of attorney was not irrevocable and that the petitioners were entitled to revoke it. The application to amend the plaint to reflect this revocation was granted.

  Significant Holdings:

  The court established several core principles regarding the interpretation of powers of attorney:

  • "The mere use of the word 'irrevocable' in a Power of Attorney will not make the Power of Attorney 'irrevocable' unless the terms thereof, disclose that it created or recognized an agency coupled with interest in favor of the Agent."
  • "A power of Attorney simplicitor, which merely authorizes an Agent, to do certain acts, in the name of or on behalf of the executant can be revoked or canceled by the executant at any time, in spite of the instrument stating that the Power of Attorney is irrevocable."
  • "A document has to be construed as a whole. A stray sentence here and there cannot be picked out to construe a document."

  The final determination was that the power of attorney in question was not coupled with interest and was therefore revocable. The petitioners' application to amend the plaint was allowed, and the order of the lower court was set aside.

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• 2011 (12) TMI 795
  

  1. ISSUES PRESENTED and CONSIDERED

  The judgment primarily revolves around the following legal issues:

  (a) Whether the petitioners violated section 300(1) of the Companies Act, 1956, by allowing interested directors to be present during board meetings.

  (b) The alleged non-disclosure of expenses under sections 269 and 309 of the Companies Act, 1956, concerning the managing director's wife's foreign travel.

  (c) Alleged contravention of section 295(1)(e) of the Companies Act, 1956, concerning transactions between the company and Stewart Holl India Ltd. (SHIL).

  (d) Multiple charges under C. P. No. 556 of 2010, including violations of sections 372A(3), 297(1)(a), 211(3A), 211(1), 301(1) and (3), 193(1) and (1A), 176(2), and 372A(5) of the Companies Act, 1956.

  2. ISSUE-WISE DETAILED ANALYSIS

  (a) Section 300(1) Violation:

  - Legal Framework: Section 300(1) prohibits directors from participating in board meetings where they have a personal interest.

  - Court's Interpretation: The court found that the directors did not participate in the discussions and their presence was not considered for quorum purposes.

  - Conclusion: The charge was deemed not serious and was dropped.

  (b) Sections 269 and 309 Violation:

  - Legal Framework: These sections pertain to managerial remuneration and disclosure requirements.

  - Court's Interpretation: The court accepted the petitioners' offer to disclose the travel expenses in future accounts and noted that tax authorities had accepted the accounts.

  - Conclusion: The charge was dropped, and no criminal proceedings were to be launched.

  (c) Section 295(1)(e) Violation:

  - Legal Framework: This section restricts loans to companies where directors have a controlling interest.

  - Evidence and Findings: The court found no evidence of the company controlling SHIL's decisions, and the transactions were at arm's length.

  - Conclusion: The court quashed the show-cause notices, finding no violation.

  (d) Multiple Charges under C. P. No. 556 of 2010:

  - Section 372A(3): The court found no violation as the transactions with SHIL did not attract section 295 provisions.

  - Section 297(1)(a): The court excused the petitioners, noting no mala fide intent or prejudice to shareholders.

  - Section 211(3A): The court accepted the petitioners' interpretation of accounting standards, referencing a similar judgment.

  - Section 211(1): The court found the Registrar's charges to be based on subjective opinions on accounting treatments.

  - Sections 301(1) and (3): These were linked to section 297 charges and were not proceeded with.

  - Section 193(1) and (1A): The court accepted the petitioners' assurance to improve record-keeping.

  - Section 176(2): The court found no violation in the company notices for general meetings.

  - Section 372A(5): The court absolved the petitioners, noting no investments were made.

  3. SIGNIFICANT HOLDINGS

  - The court emphasized that "transactions conducted at arm's length between corporate entities cannot be assumed to be in breach of section 295 of the Act unless specifics pertaining to the transaction are demonstrated."

  - The judgment reinforced the principle that accounting treatments are often subjective, and differences in interpretation should not automatically lead to prosecution.

  - The court concluded that the show-cause notices were quashed, and no criminal proceedings were to be initiated against the petitioners.

  - The petitioners were directed to pay costs to the Registrar and ensure better compliance in future.

  The judgment underscores the importance of context and intent in evaluating alleged statutory violations, particularly in corporate governance and financial disclosures. It also highlights the court's role in balancing regulatory enforcement with practical business realities.

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• 2011 (12) TMI 794
  

  1. ISSUES PRESENTED and CONSIDERED

  The core legal questions considered in this judgment are:

  • Whether the writ petition is maintainable given the concurrent proceedings before the Competition Commission of India (CCI) regarding the same subject matter.
  • The applicability and implications of the doctrine of election of remedies in the context of concurrent legal proceedings.
  • The scope of the writ jurisdiction under Article 226 of the Constitution of India in relation to statutory remedies under the Competition Act, 2002.
  • Whether the amendment to the writ petition to include specific challenges to the Memorandum of Understanding (MoU) dated 1st February 2003 is permissible.
  • The impact of the writ proceedings on the ongoing proceedings before the CCI and the potential for conflicting decisions.

  2. ISSUE-WISE DETAILED ANALYSIS

  Issue 1: Maintainability of the Writ Petition

  • Legal Framework and Precedents: Article 226 of the Constitution provides for the writ jurisdiction of High Courts. The Competition Act, 2002, especially Sections 3, 4, 18, 60, 61, and 62, outlines the jurisdiction and powers of the CCI.
  • Court's Interpretation and Reasoning: The court emphasized that the writ jurisdiction under Article 226 is not ousted by the statutory remedy available under the Competition Act. The two remedies are concurrent and not mutually exclusive.
  • Key Evidence and Findings: The petitioner's claim of infringement of fundamental rights and the distinct nature of reliefs sought in the writ petition and the CCI proceedings were pivotal.
  • Application of Law to Facts: The court found that the issues raised in the writ petition, such as promissory estoppel and legitimate expectation, fall within the court's jurisdiction and cannot be addressed by the CCI.
  • Treatment of Competing Arguments: The respondents argued that allowing both proceedings would lead to conflicting decisions and constitute an abuse of process. The petitioner contended that the writ jurisdiction is broader and addresses constitutional rights.
  • Conclusions: The writ petition is maintainable as it addresses issues beyond the scope of the CCI, and the doctrine of election of remedies does not apply.

  Issue 2: Amendment of the Writ Petition

  • Legal Framework and Precedents: Order 6 Rule 17 of the Civil Procedure Code governs the amendment of pleadings. The court referenced precedents that favor a liberal approach to amendments.
  • Court's Interpretation and Reasoning: The court allowed the amendment, emphasizing that it is necessary for resolving the real controversy and does not cause injustice to the respondents.
  • Key Evidence and Findings: The proposed amendment sought to specifically challenge the MoU, which was central to the dispute.
  • Application of Law to Facts: The court found that the amendment was essential to address the core issues and did not prejudice the respondents.
  • Treatment of Competing Arguments: The respondents contended that the amendment was not bona fide and aimed at delaying proceedings. The court disagreed, noting the importance of addressing the substantive issues.
  • Conclusions: The amendment was allowed, subject to costs, to facilitate a comprehensive resolution of the dispute.

  3. SIGNIFICANT HOLDINGS

  • Verbatim Quotes of Crucial Legal Reasoning: "The writ petition is maintainable as issue of promissory estoppel and legitimate expectation cannot be pre-judged at this stage, but the final order in this matter has to be put on hold till the validity of the Memorandum of Understanding of 1st February, 2003 is finally decided in the proceedings under the Competition Act, 2002."
  • Core Principles Established: The writ jurisdiction under Article 226 is not ousted by statutory remedies, and concurrent proceedings can be maintained if they address distinct legal issues.
  • Final Determinations on Each Issue: The writ petition is maintainable and the amendment to the petition is allowed. However, the final decision on the writ petition is deferred pending the outcome of the CCI proceedings to avoid conflicting decisions.

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• 2011 (12) TMI 793
  

  1. ISSUES PRESENTED and CONSIDERED

  The legal judgment revolves around the following core issues:

  • Whether the reassessment proceedings initiated under Sections 148/143(3) of the Income Tax Act are valid in law and factually justified.
  • Whether the addition of Rs. 4,42,500/- as unexplained cash credit was justified based on the evidence presented.
  • Whether the mandatory notice under Section 148 was duly served to the assessee as per the prescribed legal procedure.
  • Whether the Assessing Officer (AO) had a valid "reason to believe" that income had escaped assessment at the time of issuing the notice under Section 148.
  • Whether the AO erred in making an addition based on new allegations without providing the assessee an opportunity to examine the evidence or cross-examine witnesses.
  • Whether the Commissioner of Income Tax (Appeals) [CIT(A)] erred in not considering additional evidence presented by the assessee.

  2. ISSUE-WISE DETAILED ANALYSIS

  Issue 1: Validity of Reassessment Proceedings

  • Legal Framework: The reassessment proceedings are governed by Sections 148 and 143(3) of the Income Tax Act, which require the AO to have a "reason to believe" that income has escaped assessment.
  • Court's Interpretation: The Tribunal considered whether the AO independently applied his mind or acted mechanically based on external instructions.
  • Evidence and Findings: The assessee argued that the AO relied on a database/report without conducting independent inquiries.
  • Application of Law: The Tribunal evaluated if the procedural requirements for reopening assessments were met.
  • Competing Arguments: The assessee contended the lack of independent reasoning by the AO, while the revenue maintained the validity of the proceedings.
  • Conclusion: The Tribunal's decision on this issue was not explicitly detailed due to the dismissal of the appeal for non-prosecution.

  Issue 2: Addition of Unexplained Cash Credit

  • Legal Framework: Section 68 of the Income Tax Act deals with unexplained cash credits.
  • Court's Interpretation: The Tribunal had to assess whether the AO's addition was based on conjectures and whether sufficient evidence was disregarded.
  • Evidence and Findings: The assessee claimed that all possible evidence was produced, yet the AO made additions based on assumptions.
  • Application of Law: The Tribunal needed to determine if the AO's actions aligned with the legal standards for proving unexplained cash credits.
  • Competing Arguments: The assessee argued against the basis of the addition, while the revenue supported the AO's decision.
  • Conclusion: The appeal was dismissed without a detailed examination of this issue due to procedural default.

  Issue 3: Service of Notice under Section 148

  • Legal Framework: Section 282 of the Income Tax Act prescribes the manner of serving notices.
  • Court's Interpretation: The Tribunal considered whether the notice was served in accordance with the statutory requirements.
  • Evidence and Findings: The assessee claimed non-compliance with the prescribed service procedure.
  • Application of Law: The Tribunal needed to verify the procedural adherence in serving the notice.
  • Competing Arguments: The assessee challenged the service method, while the revenue asserted compliance.
  • Conclusion: The appeal's dismissal precluded a detailed resolution of this issue.

  Issue 4: Reason to Believe

  • Legal Framework: The concept of "reason to believe" is crucial for valid reassessment under Section 148.
  • Court's Interpretation: The Tribunal assessed if the AO's belief was independently formed.
  • Evidence and Findings: The assessee argued that the AO acted on instructions without independent analysis.
  • Application of Law: The Tribunal evaluated the legitimacy of the AO's reasoning process.
  • Competing Arguments: The assessee questioned the AO's independent judgment, while the revenue defended the AO's actions.
  • Conclusion: The procedural dismissal of the appeal left this issue unresolved.

  3. SIGNIFICANT HOLDINGS

  The Tribunal dismissed the appeal due to the assessee's non-appearance and lack of prosecution. The significant holdings include:

  • Verbatim Quote: "The appeal does not mean merely filing of the appeal but effectively pursuing it."
  • Core Principles: The importance of actively pursuing an appeal and complying with procedural requirements.
  • Final Determination: The appeal was dismissed in limine due to non-prosecution, leaving substantive issues unaddressed.

  The judgment emphasizes the procedural aspect of appeals, highlighting the necessity for parties to actively engage in the process to ensure their grievances are heard and adjudicated.

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• 2011 (12) TMI 792
  
  The Supreme Court of India dismissed the special leave petition. No representation for the respondent.

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• 2011 (12) TMI 791
  
  Issues: Setting aside an auction, Bona fides of the applicant, Validity of auction process, Court's role in auction, Refund of deposit
  
  Setting aside an auction:
  The judgment involves a third party's application to set aside an auction of a company's property. The applicant offered a higher price than the winning bid at the auction, prompting a review of the auction process. The court considered the interests of creditors and the company in liquidation while deciding on setting aside the auction.
  
  Bona fides of the applicant:
  The applicant, unable to participate in the initial auction, offered a higher price later. To test the applicant's bona fides, the court directed the applicant to deposit the offered amount, which was duly done. The court considered the applicant's reasons for missing the auction and the subsequent higher offer in determining the fairness of setting aside the auction.
  
  Validity of auction process:
  The Auction Purchaser argued that the auction was conducted transparently with adequate publicity, and no fraud allegations were made. Reference was made to a Supreme Court judgment emphasizing the importance of participating in auctions and the limited grounds for setting aside confirmed sales. The court examined the circumstances of the auction process, including transparency and absence of fraud allegations, in deciding on the validity of the auction.
  
  Court's role in auction:
  The court highlighted its role as the custodian of the company's properties in liquidation, aiming to secure the highest price in auctions for the benefit of creditors and the company. It noted the importance of obtaining fair prices in auctions and considered the interests of various stakeholders, including creditors, workmen, and the company itself, in auction proceedings.
  
  Refund of deposit:
  The court ordered the refund of the deposit made by the Auction Purchaser since the auction was set aside. It directed the Official Liquidator to refund the deposited amount promptly. Additionally, costs were imposed on the applicant for the new auction process, emphasizing the need for fairness and justice in auction proceedings.
  
  In conclusion, the judgment addressed various issues related to setting aside an auction, evaluating the applicant's bona fides, assessing the validity of the auction process, emphasizing the court's role in auctions, and ensuring the refund of deposits. The decision aimed to balance the interests of creditors, the company, and other stakeholders while promoting transparency and fairness in auction proceedings.

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• 2011 (12) TMI 790
  
  Issues Involved:
  Assessment of unexplained credit under section 68 of the I.T. Act, 1961. Lack of representation by the assessee during appeal proceedings.
  
  Analysis:
  1. The judgment pertains to the assessee's appeal for the assessment year 2007-08 challenging the addition of Rs. 12077814.00 as unexplained credit under section 68 of the Income Tax Act, 1961. The CIT(A) had confirmed this addition. However, during the appeal hearing, neither the assessee nor any authorized representative appeared, indicating a lack of interest in pursuing the appeal.
  
  2. The tribunal noted that the last hearing notice was duly served at the address provided by the assessee, and it was not returned unserved. Citing legal precedents, the tribunal emphasized that merely filing an appeal is not sufficient; effective pursuit is essential. Referring to the case law of CIT vs. B.N. Bhattachargee and another, the tribunal highlighted the importance of actively pursuing the appeal.
  
  3. Further, drawing from the case of Estate of late Tukojirao Holkar vs. CWT and the decision of ITAT, Delhi Bench in the case of Multiplan India (P.) Ltd., the tribunal reiterated that if the party fails to appear or take necessary steps, the appeal may be dismissed for want of prosecution. In this instance, the appeal was dismissed for lack of prosecution, following the established legal principles.
  
  4. The tribunal clarified that if the assessee provides a valid explanation for their non-appearance and the bench is satisfied, the ex-parte order may be reconsidered for a fresh adjudication of the appeal. However, in the absence of a satisfactory explanation, the appeal remains dismissed for want of prosecution. The order was pronounced in open court on 20.12.2011, bringing the proceedings to a close.
  
  This detailed analysis of the judgment highlights the key issues of unexplained credit assessment and lack of representation by the assessee, along with the legal principles and precedents followed by the tribunal in arriving at the decision to dismiss the appeal for want of prosecution.

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• 2011 (12) TMI 789
  
  Issues Involved:
  1. Termination of dealership in an illegal and arbitrary manner.
  2. Violation of mandatory procedural provisions of law during the raid and sampling.
  3. Non-issuance of show-cause notice and denial of opportunity for hearing.
  4. Mala fide intention and arbitrary action by the Respondent-Corporation.
  
  Summary:
  
  1. Termination of Dealership:
  The main issue pertains to the termination of the dealership of the Appellant in an illegal and arbitrary manner. The Appellant had been operating the petrol pump for 30 years and had received 10 awards. Despite maintaining high standards, the Respondent-Corporation terminated the dealership clandestinely, violating principles of natural justice.
  
  2. Violation of Procedural Provisions:
  The raid conducted on 15th May 2000 was by an unauthorized police officer below the rank of DSP, violating Clause 4 of the Motor Spirit and High Speed Diesel (Regulation of Supply and Distribution and Prevention of Malpractices) Order, 1999. Samples were collected in violation of Clause 5(2), which mandates taking six samples from each source and handing over two to the dealer. The Respondent admitted that only two samples were drawn from each tank, and none were given to the Appellant. Additionally, samples were taken in plastic containers, violating Clause 5(3).
  
  3. Non-Issuance of Show-Cause Notice:
  The Appellant argued that no show-cause notice was issued, nor was an opportunity for a hearing provided before termination, violating Marketing Discipline Guidelines. The Respondent terminated the dealership on the same day the test reports were received, without giving the Appellant a chance to explain. The guidelines prescribe termination only in the second instance of adulteration, but this was the first alleged instance.
  
  4. Mala Fide Intention and Arbitrary Action:
  The Appellant contended that the termination was mala fide, supported by internal emails from the Respondent indicating premeditated actions. The Delhi High Court had directed the Respondent to issue a show-cause notice and provide a hearing, which was not followed. The Respondent added new grounds for termination in 2004, which were known at the time of the original termination in 2000, indicating an afterthought to strengthen their case.
  
  Judgment:
  The Supreme Court found the termination of the dealership to be in violation of procedural laws and principles of natural justice. The haste in terminating a 30-year-old dealership without a show-cause notice or hearing indicated non-existent and irrelevant considerations. The Court quashed the termination order and directed the Respondent-Corporation to restore the dealership and hand over possession within three months. The appeal was allowed with costs of Rs. 1,00,000 to be paid by the Respondent-Corporation to the Appellant.

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• 2011 (12) TMI 788
  
  Issues Involved:
  The judgment involves issues related to the applicability of u/s 41(1) of the IT Act and the treatment of bank interest waived by Canara Bank in the assessment for the AY 2003-04.
  
  Applicability of u/s 41(1) of the IT Act:
  The Revenue filed an appeal against the order of the ld. CIT(A)-VIII, Kolkata regarding the applicability of u/s 41(1) of the IT Act for the AY 2003-04. The grounds of appeal raised by the Revenue questioned the validity of the order and the interpretation of the provisions of Sec 41(1) of the Act. The dispute centered around whether the assessee fulfilled the conditions required for the applicability of Sec 41(1) based on the treatment of bank interest waived by Canara Bank. The ld. CIT(A) observed that the assessee derived benefits from the bank interest waived, leading to a disagreement between the Revenue and the assessee regarding the interpretation of the law.
  
  Treatment of Bank Interest Waived:
  The issue revolved around the treatment of bank interest waived by Canara Bank in the assessment for the AY 2003-04. The ld. Assessing Officer disallowed the assessee's request to deduct bank interest from the net income arising from the settlement of a bank loan. The ld. CIT(A) upheld the AO's decision, prompting the assessee to appeal to the Tribunal. The Tribunal directed the AO to reconsider the issue, emphasizing the need to follow principles of Natural Justice. The subsequent order by the AO rejected the assessee's claim, leading to further arguments regarding the applicability of Sec 41(1) of the IT Act and the benefit derived by the assessee from the bank interest waived.
  
  Decision and Rationale:
  After considering the arguments presented by both parties, the Tribunal concurred with the view of the AO and allowed the grounds raised by the Revenue. The Tribunal emphasized that the assessee had already taken the benefit of the interest in its accounts by debiting it in the profit and loss account. The Tribunal highlighted that the belated filing of returns by the assessee prevented the carry forwarding of losses, which impacted the treatment of the interest component. Therefore, the Tribunal upheld the AO's decision, stating that allowing the interest component would contradict the provisions of the IT Act. Consequently, the Tribunal dismissed the appeal of the assessee and partly allowed the appeal of the Revenue.
  
  Separate Judgement by Judges:
  No separate judgment was delivered by the judges in this case.

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• 2011 (12) TMI 787
  
  The Bombay High Court dismissed the petition filed under Section 147 of the Income Tax Act, 1961, as per the petitioner's request. The order was dated 13 December 2011.

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• 2011 (12) TMI 786
  
  Issues involved:
  The appeal against the Judgment of acquittal under Section 138 of the Negotiable Instrument Act.
  
  Details of the Judgment:
  
  Issue 1: Allegation and Evidence
  The complainant alleged that the accused issued two dishonored cheques, leading to the complaint under Section 138 of the N.I. Act. The complainant presented documentary evidence including cheques, bank return memo, legal notice, and postal receipts.
  
  Issue 2: Defense and Evidence
  The defense did not present oral evidence but submitted some documentary evidence. The defense argued against the presumption under Sections 118 and 139 of the N.I. Act.
  
  Issue 3: Allegations of Interpolations
  The court observed interpolations in the dates of the cheques, making them void under Section 87 of the N.I. Act due to material alterations without the drawer's endorsement.
  
  Issue 4: Legal Presumptions and Case Laws
  The appellant relied on legal presumptions under Sections 138 and 139, citing relevant case laws. The defense argued that the cheques were void due to alterations, thus challenging the guilt under Section 138.
  
  Issue 5: Judgment and Conclusion
  The court held that the material alterations in the cheques rendered them void under Section 87 of the N.I. Act, leading to the acquittal of the accused. The court dismissed the appeal, finding no grounds for interference with the acquittal.
  
  This judgment highlights the importance of adhering to legal provisions and the consequences of material alterations in negotiable instruments. The court's decision was based on a strict interpretation of the law, emphasizing the significance of evidence and compliance with statutory requirements in cases involving dishonored cheques.

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• 2011 (12) TMI 785
  
  ... ...
  ... ... ..... TICE, HON BLE MR. JUSTICE A.K. PATNAIK, HON BLE MR. JUSTICE SWATANTER KUMAR For the Appellant Mr. Shyam Divan,Sr.Adv., Ms. Sonal,Adv., Ms. Naheed Carimjee,Adv., Mr. Rishi Maheshwari,Adv., Ms. Adidi Prabhu,Adv., Mr. P.S.Sudheer,Adv. ORDER Delay condoned. The civil appeals are dismissed.

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• 2011 (12) TMI 784
  
  Issues Involved:
  1. Deletion of addition of Rs. 5,18,220/- u/s 139(1) for bogus capital gains.
  2. Deletion of addition of Rs. 6,09,000/- for unaccounted money paid for immovable property.
  
  Issue 1: Deletion of addition of Rs. 5,18,220/- for bogus capital gains:
  The Assessing Officer added Rs. 5,18,220/- as bogus capital gains despite the assessee disclosing long term capital gains of Rs. 4,97,610/- from the sale of shares. The CIT(A) deleted the addition based on the submission that no incriminatory material was found during a search u/s 132. The assessee provided evidence including Demat statements, sale contract notes, and transfer deeds to support the genuineness of the transaction. The CIT(A) held that the addition was unjustified. However, the ITAT Delhi Bench 'D' set aside a similar case for allowing cross-examination, leading to the restoration of the issue to the Assessing Officer for further examination.
  
  Issue 2: Deletion of addition of Rs. 6,09,000/- for unaccounted money in property purchase:
  The Assessing Officer added Rs. 6,09,600/- as undisclosed income for the purchase of a property based on a valuation report by the District Valuation Officer. The CIT(A) deleted the addition as there was no evidence of additional payment beyond the declared value in the agreement to sell. The CIT(A) emphasized that the burden of proof was on the department to establish undisclosed investment, which was not done. The ITAT found no evidence or circumstances indicating underhand payments, and upheld the CIT(A)'s decision to delete the addition.
  
  In conclusion, the ITAT Delhi partially allowed the Revenue's appeal for statistical purposes, restoring the first issue to the Assessing Officer for further examination while upholding the deletion of the second issue's addition.

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• 2011 (12) TMI 783
  
  Issues involved: Appeal against Tribunal's judgment disallowing commission paid to sole selling agent.
  
  Summary:
  The Revenue appealed against the Tribunal's judgment disallowing the commission paid to the sole selling agent by the assessee company. The Assessing Officer disallowed the entire claim of Rs.1.27 crores, stating that the selling agent had not rendered any service. The CIT(Appeals) allowed a substantial portion of the claim, restricting the disallowance to Rs.7.50 lakhs for sales made directly to eight parties. The Tribunal allowed the assessee's appeal and dismissed the Revenue's appeal, leading to the current appeals before the High Court.
  
  The Assessing Officer believed that the selling agent did not provide any service based on various factors, such as failure to follow agreement terms, direct purchases by parties, and unauthorized negotiation of prices. The CIT(Appeals) disallowed Rs.7.50 lakhs out of the total claim, representing sales made directly to eight parties. However, the Tribunal reversed the decision adverse to the assessee, considering past acceptance of the arrangement and the interaction between the assessee and customers.
  
  The High Court found that the selling agent, appointed as the sole selling agent by the assessee, had a significant role in promoting sales and supporting customers across various sectors and locations. The Tribunal's decision to accept the entire commission paid to the selling agent was upheld, noting the complex setup between the parties and the agent's responsibilities. The Court concluded that the Tribunal's order required no interference, dismissing both Tax Appeals.
  
  The Tribunal's decision was supported by various legal precedents, and the Court found no need to delve into detailed references to these judgments. Overall, the High Court upheld the Tribunal's decision, affirming the allowability of the commission paid to the sole selling agent.

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• 2011 (12) TMI 782
  
  Issues involved: Appeal by Revenue and cross objection by assessee against order of CIT(A)-III, Chennai u/s 263 of the Act.
  
  The judgment pertains to an appeal and cross objection arising from a revisional order u/s 263 of the Act. The Tribunal noted that the revisionary proceeding had been struck down in a previous order, rendering the appeal infructuous. Consequently, the appeal by the Revenue was dismissed as the assessment made based on the revisionary order ceased to exist. The cross objection filed by the assessee was also deemed not to survive. The assessee's representative expressed concerns about the grounds raised in the cross objection being permanently washed away. However, the Tribunal clarified that in case of revival of any order, all connected matters would also be revived, thus dismissing the fear raised by the representative. Ultimately, both the appeal by the Revenue and the cross objection by the assessee were dismissed. The order was pronounced in open court on 12.12.2011.

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• 2011 (12) TMI 781
  
  Issues involved: Interpretation of exemption u/s 11 of the Income Tax Act, 1961 based on charitable activities u/s 2(15) and consideration of deduction of depreciation.
  
  Interpretation of exemption u/s 11:
  The revenue appealed against the acceptance of the assessee's claim of exemption u/s 11, arguing that the assessee did not engage in charitable activities as required u/s 2(15) of the Act. The Tribunal noted that the facts of the current year were similar to the previous year, where a relevant order had been passed. The Tribunal held that the order from the previous year should be followed for consistency, as the activities of the assessee had not changed. The Tribunal emphasized the importance of maintaining separate books of account for business activities to determine eligibility for deductions u/s 11. The matter was remanded to the Assessing Officer to ascertain facts regarding business income and maintenance of separate books of account.
  
  Consideration of deduction of depreciation:
  The issue of deduction of depreciation was raised by the assessee, claiming entitlement based on not writing off capital assets from its accounts as application of income. However, the AO did not address this issue in the assessment order. The Tribunal decided to remand the matter back to the AO for consideration of the depreciation claim and to make a fresh decision after hearing the assessee.
  
  Conclusion:
  The Tribunal treated the appeal as allowed for statistical purposes, indicating that further assessment and consideration were required on both the exemption u/s 11 and the deduction of depreciation. The Tribunal highlighted the need for maintaining separate books of account for business activities to determine eligibility for deductions, emphasizing the statutory provisions governing such matters.

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• 2011 (12) TMI 780
  
  Issues involved: Appeal against deletion of addition of Rs. 51,01,510/- on account of non-deduction of TDS on commission paid to partners for assessment year 2008-09.
  
  Summary:
  1. The Revenue appealed against the deletion of an addition of Rs. 51,01,510/- due to non-deduction of TDS on commission paid to partners. The Assessing Officer required evidence of TDS, but the assessee argued that TDS was not applicable to such payments to partners as it was an allocation of profit. The CIT(A) deleted the addition based on previous Tribunal orders for assessment years 2006-07 and 2007-08.
  
  2. The Tribunal found that the issue was in favor of the assessee based on a previous order for assessment year 2006-07. The Tribunal held that payments made to partners were allowable deductions in the hands of the firm and were chargeable as profits in the hands of the partners post the Finance Act, 1992 amendments. The Tribunal dismissed the Revenue's appeal, citing consistency with previous orders.
  
  3. The Tribunal reiterated that a firm is a unit of assessment and not a legal person, and therefore, there cannot be a contract of service between a firm and its partners. As per the partnership deed, commission paid to partners was considered remuneration and not subject to TDS deduction. The Tribunal upheld the CIT(A)'s decision and dismissed the Revenue's appeal based on previous consistent rulings.
  
  4. The Tribunal also noted similar findings in the assessment year 2007-08, where the Tribunal followed its earlier decision for 2006-07. Given the consistency in facts and rulings, the Tribunal found no merit in the Revenue's appeal and dismissed it.
  
  Judgment: The appeal against the deletion of the addition of Rs. 51,01,510/- on account of non-deduction of TDS on commission paid to partners for assessment year 2008-09 was dismissed by the Tribunal based on the provisions of the Income Tax Act and previous consistent rulings.

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• 2011 (12) TMI 779
  
  Issues Involved:
  1. Whether the central excise refund is a capital receipt and not liable to be taxed.
  2. Whether the central excise refund is business income but not a profit and gains derived from Industrial undertaking and hence not entitled for deduction u/s 80IB.
  
  Summary:
  
  Issue 1: Central Excise Refund as Capital Receipt

  The assessee argued that the central excise refund is a capital receipt and therefore not liable to be taxed. The CIT(A) rejected this claim, referring to the Hon'ble Supreme Court decisions in Sahney Steels Press Work and Ponni Sugar & Chemicals Ltd., concluding that the refund was a revenue receipt chargeable to tax. The CIT(A) reasoned that the refund was given as an incentive for doing business in a particular area and not for setting up new industrial undertakings or purchasing machinery, thus classifying it as operational aid or additional profit.

  However, the Tribunal noted that the Hon'ble Jammu & Kashmir High Court, in the case of Balaji Alloys vs. JCIT & Others, held that the excise refund under the same scheme was a capital receipt. The High Court emphasized that the incentives were aimed at accelerating industrial development and generating employment in Jammu and Kashmir, thus serving a public interest and creating new assets of industrial atmosphere and environment. Consequently, the Tribunal followed this decision, holding that the excise refund is a capital receipt not chargeable to tax.

  Issue 2: Deduction u/s 80IB

  Given the conclusion that the excise refund is a capital receipt and not taxable, the question of allowing deduction u/s 80IB on the excise duty refund did not arise for consideration.

  Conclusion:

  The appeal of the assessee was allowed, and it was held that the central excise refund is a capital receipt not chargeable to tax, thus negating the need to consider deduction u/s 80IB.

  Order pronounced in the open court on the 23rd day of Dec. 2011.

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• 2011 (12) TMI 778
  
  Issues Involved:
  1. Legally enforceable debt/liability.
  2. Rebuttal of presumption u/s 139 of the Negotiable Instruments Act.
  3. Evidence and burden of proof.
  
  Summary:
  
  1. Legally enforceable debt/liability:
  The appellant (original complainant) challenged the acquittal of the respondent (original accused) for the offence punishable u/s 138 of the Negotiable Instruments Act, 1881. The complainant alleged that the accused issued a cheque of Rs. 50,000/- towards part payment for goods worth Rs. 2,00,000/- purchased on credit. The cheque was dishonoured due to 'insufficient funds'. The complainant presented the cheque twice, both times it was dishonoured. The complainant issued a notice demanding payment, which the accused failed to comply with, leading to the filing of the complaint.
  
  2. Rebuttal of presumption u/s 139 of the Negotiable Instruments Act:
  The trial court concluded that the cheque was not issued towards a legally enforceable debt/liability. The accused's defense was that there was no business transaction with the complainant and the cheque was related to a different transaction involving the complainant's son. The accused did not personally deliver the cheque and had no dealings with the complainant. The court found that the accused successfully rebutted the presumption u/s 139 on the preponderance of probability.
  
  3. Evidence and burden of proof:
  The complainant examined three witnesses and produced documentary evidence, including the disputed cheque and related correspondence. The accused did not examine any witnesses but presented his defense through cross-examination and his statement u/s 313 of the Code of Criminal Procedure. The court noted that the complainant failed to prove beyond reasonable doubt that the cheque was issued towards a legally enforceable debt/liability. The covering letter of the cheque indicated it was issued by the accused's son for a different transaction. The complainant did not provide sufficient evidence of any business transaction with the accused.
  
  Conclusion:
  The court held that the trial court's view of acquitting the accused was a possible view and not perverse. The reasoning for acquittal was sound, and no interference was warranted. The appeal was dismissed, and the judgment and order of acquittal dated 16th August 2000 were confirmed.

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