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Showing 1 to 20 of 1393 Records
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2021 (2) TMI 1400
Limitation under Article 243R and Article 243S of the Constitution of India as regard that there shall be only one member from one Ward - vires of provisions of Sections 5(3)(iii)(a), 29A of the Gujarat Provincial Municipal Corporations Act, 1949 and Rules 4 and 5 of Bombay Provincial Municipal Corporations (the delimitation of wards and allocation of reserved seats) Rules, 1994 and Rule 2(b) of Gujarat Municipal Corporation’s Ward Committees Functions, Duties, Territorial Areas and Procedure for Transaction of Business Rules, 2007 - having more than one representative from a Ward negates the empowerment of weaker sections or not - requirement to issue notification dated 04.12.2014 before expiry of thirty days.
Whether Article 243R and Article 243S of the Constitution of India contains any limitation to the effect that there shall be only one member from one Ward? - Whether the provisions of Sections 5(3)(iii)(a), 29A of the Gujarat Provincial Municipal Corporations Act, 1949 and Rules 4 and 5 of Bombay Provincial Municipal Corporations (the delimitation of wards and allocation of reserved seats) Rules, 1994 and Rule 2(b) of Gujarat Municipal Corporation’s Ward Committees Functions, Duties, Territorial Areas and Procedure for Transaction of Business Rules, 2007 are ul- tra virus to the provisions of Articles 243R and 243S of the Constitution? - HELD THAT:- It is well settled that legislative entries as contained in Lists under Seventh Schedule of the Constitution have not to be read in a narrow or restricted manner and each general word occurring in the entries should be held to extend to all ancillary or subsidiary matters, which can fairly and reasonably be said to be comprehended in it. In construing an entry in a List conferring legislative power, the widest possible construction according to their ordinary meaning must be put upon the words used therein.
Article 246 deals with subject-matter of the laws made by the Parliament and by the Legislature of the State. Reading Articles 245 and 246 together, it is abundantly clear that the legislative power to be exercised by the Parliament and the State Legislatures as enumerated in List I, List II and List III of Seventh Schedule are subject to the provisions of the Constitution. Thus, when the Constitution expressly or impliedly contains a limitation in exercise of legislative power, the legislative power is subject to such Constitution limitations - The Constitution provisions mandates that any law of the State, which is inconsistent, cannot continue. Thus, this limitation shall also govern any law made after enforcement of Constitution (Seventy-fourth Amendment) Act. Thus, a law, which is inconsistent with Part IXA cannot be framed by the State Legislature.
The Legislature of a State may by lay has to provide all matters relating to or in connection with election to the Municipalities, which includes filling of the seats in the Municipality by person chosen by direct election. Articles 243R and 243ZA does not give any indication as to whether from territorial constituency, i.e., the Wards, whether only one member has to be elected in the Municipality or it can be multiple member constituency. The constitutional provisions of Article 243R, which provides for composition of Municipalities and that of Article 243ZA does not give any indication to the above. The provisions of Article 243ZG, which deals with bar to interference by courts in electoral matters throws some light.
On analysing the provisions of Article 243R, 243S the definite conclusion is arrived at that no limitation in Article 243S can be found of which contains any prohibition of having more than one member for a Ward.
Article 243R and 243S of the Constitution of India does not contain any limitation to the effect that there shall be only one member from one Ward - Provisions of Section 5(3)(iii)(a) and Section 29A of the Act, 1949 and Rules 4 and 5 of the Rules, 1994 and Rule 2(b) of Rules, 2007 are not ultra vires to the provisions of Articles 243R and 243S of the Constitution.
Whether having more than one representative from a Ward negates the empowerment of weaker sections, i.e., women, Scheduled Castes and Scheduled Tribes? - HELD THAT:- The entire purpose and object of reserving seats for weaker sections is to empower the weaker sections, i.e., women, Scheduled Castes and Scheduled Tribes, when there are more numbers are reserved for weaker sections their participation in municipality is bound to increase giving strength to their voice and effective participation which is nothing but empowerment of weaker sections. It is not able to subscribe to the submission of Shri Sibal that when there are only one representation from one Ward only then empowerment of weaker sections can be made. By the Rules, 1994 as amended in 2015 now the voice of weaker sections can be felt from every Ward which clearly enhances of presence and participation of weaker sections and does not, in any manner, negate the empowerment of weaker sections.
Having more than one representation from a Ward in no manner negates the empowerment of weaker sections rather it increases the empowerment of weaker sections.
Whether when the draft rules for amendment of Bombay Provincial Municipal Corporations (the delimitation of wards and allocation of reserved seats) Rules, 1994 were issued on 27.11.2014 which were to be published after noting of objections on or expiry of thirty days, the State Government could have issued notification dated 04.12.2014 before expiry of thirty days? - HELD THAT:- Having found that the provisions of Section 5(3) (iii)(a) and Section 29A of Act, 1949 and Rule 4 and 5 of Rules, 1994 and Rule 2(b) of Rules, 2007 are not ultra vires to Part IXA of the Constitution, the Division Bench of the High Court did not commit any error in dismissing the writ petition filed by the appellants. There are no merit in the Civil Appeal arising out of SLP(C) No. 24950 of 2015 and the Writ Petition (C) No. 786 of 2020. Hence, the civil appeal and writ petition are dismissed.
Conclusion - i) Article 243R and 243S of the Constitution of India does not contain any limitation to the effect that there shall be only one member from one Ward. ii) Provisions of Section 5(3)(iii)(a) and Section 29A of the Act, 1949 and Rules 4 and 5 of the Rules, 1994 and Rule 2(b) of Rules, 2007 are not ultra vires to the provisions of Articles 243R and 243S of the Constitution. iii) Having more than one representation from a Ward in no manner negates the empowerment of weaker sections rather it increases the empowerment of weaker sections. iv) Having found that the provisions of Section 5(3) (iii)(a) and Section 29A of Act, 1949 and Rule 4 and 5 of Rules, 1994 and Rule 2(b) of Rules, 2007 are not ultra vires to Part IXA of the Constitution, the Division Bench of the High Court did not commit any error in dismissing the writ petition filed by the appellants.
Appeal dismissed.
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2021 (2) TMI 1399
Seeking modification of an order transferring the investigation of a case involving the illegal import of goods to the Central Bureau of Investigation (CBI) - HELD THAT:- The apprehension expressed by the C.B.I is misplaced as this Court has already handed over the investigation to C.B.I and merely filing of application would not mean that C.B.I should stay away from the investigation. In spite of filing of this application, the C.B.I still could have gone ahead with the investigation by registering the offence in the matter. About the probability of the application being allowed, we must say that even in that case whatever investigation was made would stand handy for the new agency to make further investigation effectively.
It is informed across the bar by the learned counsel for C.B.I that as per the information received, no offences have been registered so far. It is opined that C.B.I. ought to have acted with due promptitude in the matter and if it has not upto now, this Court would have to direct the C.B.I to do so in a specific manner.
Conclusion - The application for modification denied, affirming the transfer of the investigation to the CBI, and directing the CBI to proceed with the investigation while allowing respondent No. 4 to file a new application if needed.
The application is rejected.
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2021 (2) TMI 1398
Permission for withdrawal of SLP - Refund of Input tax credit - Form GST TRAN-1 - migration to GST regime - carry forward its electronic ledger account of unutilized ITC in terms of Section 140 of the CGST Act, 2017 - it was held by High Court that 'The Respondents are directed to refund the amount ₹ 1,37,37,029/- to the Petitioner within four week from today.'
HELD THAT:- The Special Leave Petition is dismissed as withdrawn.
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2021 (2) TMI 1397
Addition u/s 14A r.w.s. 8D - no exempt income was earned by the assessee - HELD THAT:- We have heard the respective parties, and we have further considered the judgment passed in the case of CIT vs. Corrtech Energy Pvt. Ltd. [2014 (3) TMI 856 - GUJARAT HIGH COURT] and in view of the ratio laid down we find no ambiguity in deleting the addition made by the CIT(A) u/s 14A in the absence of any admitted claim for exemption by the appellant so as to warrant interference. Hence, the order is passed in the affirmative i.e. in favour of the assessee.
Addition made to the book profit u/s. 115JB in respect of the provision of 14A -It is a settled principle of law that amount of disallowance u/s 14A cannot be added to the book profit u/s 115JB. Thus, no ambiguity in making such decision by the Ld. CIT(A) in deleting the addition made by the A.O.
Upward TP adjustment - determining Arms Length Price on the ‘Corporate Guarantee’ on the average value of loans provided by the assessee to its assessee enterprises - Case of the assessee is this that issuance of “Corporate Guarantee” by the assessee on behalf of its subsidiary company is in the nature of quasi-capital or shareholder activity and not in the nature of provision of service and, therefore, the said transaction is to be excluded from this scope of “international transaction” u/s 92B - HELD THAT:- Applying the rule of consistency the Ld. CIT(A) has allowed the issue in favour of the assessee by deleting the said adjustment. No reason to deviate from such stand taken by the ITAT in deciding the matter in favour of the assessee for A.Y. 2011-12 and respectfully relying upon the same we find no merit in this ground preferred by Revenue and, therefore, we dismiss the same.
Disallowance of Employees’ Contribution to PF and ESI - assessee failed to deposit such sum within the prescribed due date in terms of the concerned rule - HELD THAT:- The issue has been decided against the assessee in view of the judgment passed in the case CIT vs. Gujarat State Road Transport Corporation [2014 (1) TMI 502 - GUJARAT HIGH COURT] We, therefore, find no reason to entertain this particular ground.
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2021 (2) TMI 1396
Corporate Debtor’s right to file reply has been closed - no opportunity of hearing was provided to him - violation of principles of natural justice - HELD THAT:- The mandate of Section 7(5) of the ‘I&B Code’ is loud and clear. The Adjudicating Authority is required to pass an order of admission or rejection qua an application under Section 7 of the ‘I&B Code’ within 14 days of the receipt of application. This mandate cannot be overlooked to set aside the impugned order and make room for further adjournment. Moreso, around 40 days have been availed by the Corporate Debtor for filing reply but despite the same, no reply had been forthcoming. The task assigned to the Adjudicating Authority at the stage of admission of application is summary in nature as it is supposed to only satisfy itself in regard to financial debt and default on the part of the Corporate Debtor besides looking to the aspect of completion of application.
Conclusion - Granting the Appellant's request for further delay would contravene the legal mandate and the objectives of the I&B Code, particularly the timely completion of the Corporate Insolvency Resolution Process (CIRP).
Appeal dismissed.
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2021 (2) TMI 1395
Levy of penalty - Section 73 of the Finance Act of 1994 - service of Practicing Chartered Accountant provided - appellant had paid the arrears of tax and interest prior to the issuance of show cause notice - suppression of facts or not - Whether the proceedings under Section 73(3) of the Finance Act, 1994 in this matter could be said to be justified by any of the reasons stated in sub-section(4) of Section 73 of the Act?
HELD THAT:- It is true that in various cases like COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX VERSUS M/S ADECCO FLEXIONE WORKFORCE SOLUTIONS LTD [2011 (9) TMI 114 - KARNATAKA HIGH COURT] , that the levy of penalty imposed on the ground of delayed payment of Service Tax was set aside as the tax was paid prior to issuance of show cause notice. However, the present case has a distinguishable feature.
In the present case, the undisputed fact reveals as reflected from the Order of the Assessing Officer that the assessee came up with a plea before the Assessing Officer that he has rendered services to Karnataka State Financial Corporation (KSFC) and it is the KSFC which has not cleared the bills of the assessee and in those circumstances, the assesee was not able to pay service tax - it is also established that non-payment of Service Tax was not due to delay but on the contrary it was willful non payment of service tax with an intention to evade payment of Service tax. Thus, the assessee suppressed the facts and made willful mis-statement before the Assessing Officer and in those circumstances, the benefit of Section 74, 78 was not extended to him.
In the light of the categorical finding of fact arrived at by the Assessing Officer keeping in view Section 73(4) of the Finance Act of 1994, merely because tax was paid before the issuance of show cause notice, it can never be said that the penalty cannot be imposed upon the appellant - appeal dismissed.
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2021 (2) TMI 1393
Summary suit for recovery of a sum along with further interest at the rate of 2 percent per month, on the principal sum from the date of the suit till realization on the basis of a written contract - privity of contract between the plaintiffs and the defendant - HELD THAT:- Evidently, the transaction was in the nature of a fixed return on the investment @ 24 percent per annum, i.e. 2 percent per month. The real nature of the transaction thus could not be camouflaged by providing that there was a guarantee of the return of the principal amount, as it was invested in the Index Option Funds. It is not the case of the plaintiffs that they had registered themselves with the defendant. Nor, the amount was directly invested in the name of the plaintiffs in Index Option Funds. It is imperative to note that the regulatory authorities frown upon the promise of a fixed return on the investment, at an unbelievably high rate as it is fraught with the risk of default and susceptible to fraud. Nor is it the case that the defendant had invited the public deposits. In contrast, the claim of the plaintiffs that the deposits were invited through M/s. Crefin India Management Private Limited is found to be unsustainable.
The fact that the defendant had raised the grounds of absence of privity of contract and that no amount was deposited by the plaintiffs with the defendant in its reply to the demand notice, dated 4th September 2019, assumes significance. The subsequent developments in the nature of the scrutiny of the accounts of the defendant to ascertain whether the amounts have, in fact, been credited into the account of the defendant, indicate that there is substance in the defence of the defendant that no amount has been deposited into its account directly.
A useful reference in this context can be made to a judgment of the Supreme Court in the case of State Bank of Hyderabad Vs. Rabo Bank [2015 (10) TMI 2707 - SUPREME COURT], wherein in the backdrop of the defence that the drawer and drawee of the Bills had perpetrated a fraud on the defendant-Bank, with the collusion of some officials of the defendant-Bank, the Supreme Court granted an unconditional leave to defend the suit.
The defence raised by the defendant at the first possible opportunity that there was no privity of contract between the plaintiffs, and no amount was invested by the plaintiffs with the defendant and the documents, which have been relied upon by the plaintiffs to buttress their case of the contract between the plaintiffs and the defendant, were forged appears to be a fair and reasonable defence, if not a positively good defence. Thus, the defendant is entitled to an unconditional leave to defend the suit.
The defendant is granted an unconditional leave to defend the suit - The summons for judgment stands dismissed.
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2021 (2) TMI 1392
Seeking for an order of winding up of the respondent-company on the ground of inability to pay debts - Section 433(e) and (f), 434 and 439 of the Companies Act, 1956 - HELD THAT:- Clearly a case is made out as regards inability to pay debts and also in light of the assertion that the business activity has stopped as made out by the learned counsel for the respondent and recorded by this Court it is also just and equitable that the petition be allowed.
The respondent-company deserves to be wound up under Section 433(e) and (f), 434 read with Section 439 of the Companies Act, 1956 - The respondent-company namely, M/s. Indus Garments (India) Private Limited is ordered to be wound up. The winding up order is to be advertised by way of publication in "The Hindu" English Daily Newspaper and "Udayavani", Kannada Daily Newspaper in terms of Rule 113 of the Company (Court) Rules, 1959. The Official Liquidator is appointed as the Liquidator of the company and after taking charge of the assets as per Rule 114 is to proceed as per the Act and Rules.
Petition disposed off.
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2021 (2) TMI 1391
Challenge to non-providing of a field for Advocates to register companies and LLPs on the current Ministry of Corporate Affairs portal - HELD THAT:- A perusal of Section 7(1)(b) of the Companies Act, 2013, clearly shows that Advocates can file documents for incorporation of a Company. This would be true even in the case of LLPs. The MCA’s portal is however stated to have no provision made for Advocates who are members of Bar Councils and Bar Councils are not provided as an option in the list of Councils. If this is the position, the same would be discriminatory qua Advocates and would need to be rectified.
List on 23rd March, 2021.
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2021 (2) TMI 1390
Impleadment of Independent Directors in proceedings - non-application of mind by NCLT and the NCLAT to the role of the appellants in regard to their position as Independent Directors - HELD THAT:- Neither before the NCLT nor before the NCLAT has there been an appropriate and due application of mind to the facts pertaining to the appellants before an order impleading them was passed. Insofar as the NCLT is concerned, there is an observation to the effect that the second SFIO report does not implicate the role of the Independent Directors. In the concluding paragraph of the decision, the NCLT noted the position relating to two other Independent Directors, who were stated to be members of the Audit Committee of IFIN. On that basis, an order of impleading the appellants was passed together with the proposed respondents. The NCLAT, on the other hand, has stated that it was primarily considering the facts of the auditors – Deloitte Haskins & Sells LLP, treating that the appeal raised the same questions of law.
The ends of justice would be met if an order of remand is passed requiring the NCLT to apply its mind to the issue as to whether the appellants should be impleaded. Undoubtedly, Independent Directors have a vital role, as is indicated by the provisions of the Companies Act 2013. While Independent Directors are intended to be independent, they cannot remain indifferent to the position of the company. Since, however, the NCLT and NCLAT have not devoted due consideration to the role, position and allegations against the appellants, the proceedings remanded only in relation to them. This will not affect the impleading of others.
Application disposed off.
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2021 (2) TMI 1389
Dissolution under Section 497(6) of the Companies Act, 1956 - dissolution from the date of the filing of the instant petition, i.e. 4th February, 2021 - HELD THAT:- The prayer made in the petition is allowed and the Company is wound up and shall be deemed to be dissolved with effect from the date of the filing of the present petition, i.e. 4th February, 2021.
The petition is disposed of.
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2021 (2) TMI 1388
Assessment u/s 153A - Bogus LTCG - statement recorded in search action against a third person - whether a statement u/s 132(4) constitutes incriminating material for carrying out assessment u/s 153(A) ? - ITAT deleted the addition - HELD THAT:- The counsel for the appellant revenue informs that the order impugned in these appeals is the common order against which [2019 (7) TMI 1758 - ITAT DELHI] and other connected appeals were also preferred and which were disposed of [2021 (3) TMI 8 - DELHI HIGH COURT]
These appeals are also disposed of in terms of the order [supra] and other connected appeals.
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2021 (2) TMI 1387
Seeking grant of bail - deceiving innocent persons through lottery scam - HELD THAT:- In the supplementary charge-sheet the role of Manish Gupta has been described as an agent of Aminul Haque @ Buddha induced local people and innocent persons to open bank accounts in their names and received ATM Cards issued against their accounts for withdrawal of money and sending the same to Aminul. From the submission made by learned P.P-in-Charge it is clear that the investigation of this case is now limited to unearthing the question as to the relationship between Reliance Food Industries Private Limited FZE Dubai with PRAN Group Bangladesh and PRAN Beverages (India) Private Limited. In order to get such information, foreign government action has been sought for.
For the purpose of getting such report, further detention of the accused is not necessary till date, the investigation does not suggest any link between accused Manish Gupta and the above named companies situated respectively in United Arab Emirates, Bangladesh and India.
Accused Manish Gupta be enlarged on bail of Rs. 50,000/- with two sureties of like amount, one of whom must be a local surety to the satisfaction of the learned Additional Chief Judicial Magistrate, Contai with further condition that if on bail the accused must visit the investigating officer once in a fortnight and will be available for interrogation in future, if required - Application allowed.
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2021 (2) TMI 1386
Seeking for a direction against secured creditor, to handover the assets at factory premises in Madanapalle to the Official Liquidator along with inventory - direction also sought to continue to secure the property with the help of security guards till such possession of the property is handed over to the Official Liquidator - HELD THAT:- Insofar as the assignment in favour of the applicant in C.A. No.260/2019, admittedly such assignment has been made on 17.11.2017. The assignment is an internal transaction between the Bank of India and the assignee. If the creation of charge by the Bank of India is taken note of, clearly such charge is not affected by the order of winding up passed on 12.04.2019. Even otherwise, Section 529-A of the Companies Act provides for sufficient safeguards insofar as workmen dues are concerned. Section 13(9) of the SARFAESI Act provides for a detailed procedure.
Taking note of the law laid down by the Apex Court in the case of Pegasus Assets Reconstruction Private Limited vs. Haryana Concast Limited and another [2015 (12) TMI 1472 - SUPREME COURT] wherein the role of the Official Liquidator is clearly detailed while considering the interplay between the Companies Act and the SARFAESI Act, accordingly, no further discussion is warranted in light of the admitted fact of creation of charge by the Bank of India at a point in time earlier to the winding up proceedings.
While the applicant in C.A. No.260/2019 is permitted to proceed against its security by standing outside the winding up proceedings, clearly the Official Liquidator's role as enumerated in Section 13(9) of the SARFAESI Act would have to be accommodated in order to ensure interests of the workmen etc.
Application disposed off.
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2021 (2) TMI 1385
Reopening of assessment u/s 147 - reason to believe - importance of “reasons” and “recording of reasons” u/s 147 - HELD THAT:- The importance and relevancy of the material to the information was discussed in the case of CIT vs. SFIL Stock Broking Ltd [2010 (4) TMI 102 - DELHI HIGH COURT] wherein it was held that mere information is not a material and that even existence of material would not be sufficient to invoke reopening proceedings u/s 147.
AO must possess the materials on the basis of which the Investigation Wing of the Department had passed on the information to the AO about escapement of income. Recently in the case of Sabh Infrastructure Ltd [2017 (9) TMI 1589 - DELHI HIGH COURT] had even held that AO is bound to supply the “materials” (not only the “reasons”) and in the event of failure to do so will make the reassessment proceedings invalid
In the present case the belief of AO is based on the investigation wings observation and not his own, which is sine-qua-non for usurpation of jurisdiction to re-open as held by the Hon’ble Supreme Court in Lakhmani Mewal Das [1976 (3) TMI 1 - SUPREME COURT].
The information given by the investigation wing at best can trigger “reason to suspect” and not ‘reason to belief’ which is the requirement of law for re-opening u/s 147 of the Act. In such a case i.e. reason to suspect, then AO is bound to conduct preliminary inquiry and collected some material which would make him believe that there is in fact an escapement of income.
Unfortunately from a reading of the reason’s recorded (supra) does not reveal as to what investigation he under took when he got the information from the investigation wing. viz what inquiry was conducted, on whom such inquiry was conducted, what were the evidences or material or admission found in such inquiries and how that material was linked with the case of the assessee. In absence of all such facts being mentioned in the reasons, the reasons-recorded by the AO do not provide any link between the information from DDIT(Inv) and reason warrant holding escapement of income chargeable to tax. Since this link is missing, the reasons recorded does not satisfy the jurisdictional condition precedent in terms of section 147.
There is factual errors in the reasons recorded by the AO (supra). According to Ld. A.R in the reasons recorded it is stated that the assessee had made profit in NMCE through one broker i.e. M/s PKC Commodities Ltd for a sum of Rs. 6,03,140. This is not factually correct. Firstly, from M/s PKC Commodities, the assessee earned Rs. 23,89,890. Secondly, the assessee had used service form other two brokers in NMCE trading: it made commodity profit of Rs. 20,01,112 through broker M/s AN Commodity Broking (P) Ltd & also a loss of Rs. 1,85,568 through broker M/s Rajeshwari Commodity Sales (P) Ltd
The ‘reason recorded’ is not based on correct information from DDIT(Inv) which were riddled with factual inaccuracies and thus cannot be the material on which the AO could have acted upon unless he had made some enquiries to form the requisite jurisdictional belief of escapement of income. This shows lack of application of mind. In this case the AO on the strength of unverified information as afore-stated has issued notice u/s 148 of the Act without satisfying the jurisdictional condition precedent as required u/s 147 of the Act. Thus, the “reason” failed to meet the test of law and so the notice issued u/s 148 of the Act is without jurisdiction and so consequently all proceedings undertaken thereafter are null in the eyes of law. Decided in favour of assessee.
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2021 (2) TMI 1384
Grant of stay/status quo order - Application for stay of the operation of the impugned order and eviction notice - it is submitted that Respondent would file reply to the stay application within six weeks - HELD THAT:- The property appears to have been purchased in the year 2004 and it is contended that since the PMLA, 2002 was not in existence so the same cannot be made applicable to the present property which is acquired prior to the coming into the force of 2002. It is also considered that the purchase of the property was conveyed to the Government of India on 20-12-2004 - The appellant has made out prima facie case for grant of ad-interim order of 'status quo' with respect to the aforesaid property till the next date of hearing. The submissions of the Respondent regarding deposit of rent with the Respondent would be considered at the time of hearing of the stay application.
The parties are directed to maintain the 'status quo', as on today, with respect to the property till the next date of hearing. The order of 'status quo' is subject to fulfilment of conditions imposed - list the matter on 19th May, 2021.
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2021 (2) TMI 1383
Denial of claim for deduction towards interest payable on borrowed funds while computing the taxable interest income earned by the assessee on the fixed deposits made from borrowed funds - HELD THAT:- The facts in the case of the assessee are that it has borrowed funds from the bank for the purpose of its business. Since the entire funds could not be utilised during the relevant AYs the same were placed in bank deposit in order to cut down the interest expenditure incurred towards the borrowed funds.
Provisions of section 57(iii) of the Act clearly lays down that while computing the income chargeable under the head ‘income from other source’, any expenditure other than capital expenditure expended wholly and exclusively for the purpose of earning such income shall be allowable as deduction.
Therefore, when the unutilised borrowed interest-bearing funds are parked in the bank as fixed deposit the corresponding interest expenditure incurred shall be allowable as deduction by virtue of section 57(iii) - Hence, we hereby direct the Ld. AO to verify whether the assessee has parked the unutilised borrowed funds in the bank account as fixed deposit and if so, grant deduction in accordance with section 57(iii) of the Act.
Assessee has deposited its surplus funds arising out of its business with the bank as fixed deposit then there is no interest cost attributable to the same - No deduction can be granted towards interest earned on such deposits because no such interest expenditure is incurred on the funds deposited with the bank. Therefore, we remit the matter back to the file of the AO to verify whether the interest earned on FDs with the bank aggregating are arising out of interest-bearing funds or out of surplus funds and thereafter decide the matter in accordance with the observations made by us herein above.
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2021 (2) TMI 1382
Offence under SEBI - trading pattern created a misleading appearance which amounted to manipulation in the price of scrip - off market transfers at a price much lower than the Last Traded Price [LTP] - miniscule shares were being sold by the appellants when there was a demand for more shares and that the appellants had a substantive holding in the shares - HELD THAT:- Except notices/appellant Narayan Das Rathi nobody was holding the shares prior to 26th February, 2013 and thereafter the shares were transferred in off market transactions to the 27 entities either directly from him or through Appellant Devindar Kumar, for a price less than the price offered through pending buy orders on the exchange platform. Thereafter those shares were sold on miniscule proportion on the platform of SEBI for a higher price though buy orders for this higher price used to be in existence and sufficient share were available to sell, thus substantially contributing to the Last Traded Price (LTP). Tables no. 3 and 4 of the impugned order shows that they had contributed to 70.96 % of the total trades during the period in question.
While some of the appellants like Kusum Devi Baid, Kamal Baid, Dev Kishan Mal, Kuldeep Singh, Devindar Kumar, Rachana Atal, Debashish Chowdhary did not explain before the Adjudicating Officer by failing to file reply to the show cause notice, some of the appellant though filed reply were unable to explain as to why they put sell order on miniscule quantity when a comparatively large buy orders were pending for the price which was more than price they purchased. They simply defended their action by replying that selling of shares in miniscule quantities is not illegal.
It is true that no direct connection between the seller and the buyer is established in the present case. We do not have material to find out whether respondent SEBI had investigated the said connection. However, in my view the insistence solely on the establishment of the connection or non-prosecution of the buyers would be against the very principle that the facts are to be established on preponderance of probability and not on the requirement that the facts in issue should be proved beyond reasonable doubt or to the hilt.
The Tribunal has to consider all the probabilities either favouring or against the premise and to repeat, if majority of probabilities points toward the existence of fact in issue, then the premise/ the charge will have to be upheld.
To sum up, we find that trading in the scrip of Dhanleela was suspended on the stock exchange platform for a period of six years. After revocation of the suspension there was no trade at all for a period of 10 months. It was thus a highly illiquid stock. Thereafter the trade opened at Rs. 17.50. During patch one investigation period i.e. from 26th February, 2013 to 9th October, 2013 it reached to 427.85. The appellant and the other notices were the major contributors to this fact through abnormal transactions. Their sell on the exchange platform created a picture of rosy picture of large scale trade quantities through miniscule sale of shares. Thereafter in patch 2 investigation period i.e. from 10th October, 2013 to 5th December, 2013 the price showed the same trend with the same modus operandi. The fundamentals of the company however did not match with this price swing. These appellants had no shares with them before these transactions.
They had received shares in off market transaction either directly or indirectly from the Appellant Narayan Das Rathi for lower price than the price available on exchange platform. No logical explanation is forthcoming from the appellants for these abnormal affairs. Therefore only conclusion that can be drawn in my view is that all these transactions were non genuine and were entered into only to manipulate the price of the shares of Dhanleela.
It is true that a connection between buyer and seller or between promoter/company and the buyer or seller would be a strong indicator to conclude that there were manipulative trades. In the absence of the same however, this Tribunal is not handicapped in arriving at the above conclusion as preponderance of probabilities definitely lies in favour of the charge as detailed above. In the circumstances in my view the appeals deserve to be dismissed without any order as to costs. The appeals are accordingly dismissed. Misc. Application is also accordingly disposed of.
In view of the majority opinion, the impugned order cannot be sustained and is quashed in so far as the appellants are concerned.
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2021 (2) TMI 1381
Benefit of Direct Tax Vivad se Vishwas Act - Assessee had opted for settling the dispute arising in all these appeals under the Direct Tax Vivad se Vishwas Act, 2020 by filing declarations and the designated authority accepting assessee’s declarations has issued certificate in form no-3. Therefore, he has requested for treating the appeals as withdrawn. The declarations Form no-1 & 2 as well as certificates issued in form no-3 have also been attached to the aforesaid letters. Assessee also made similar request before us to treat the appeals as withdrawn.
HELD THAT:- DR have no objection for dismissal the appeals as withdrawn - We are inclined to dismiss all these appeals as withdrawn.
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2021 (2) TMI 1380
Approach of NIA Court in granting bail despite earlier rejections - delay in trial proceedings before the NIA Court and the respondent languishing in jail for more than six years - Offences punishable u/s 125 of the Indian Penal Code (IPC) and Sections 16, 18 and 20 of the Unlawful Activities (Prevention) Act, 1967 (UAPA) - Applicability of proviso to Section 43D(5) of the UAPA - Violation of Right to fair and speedy trial under Article 21 of the Constitution - non-consideration of relevant material and aspects while grant of bail - HELD THAT:- Merely because some prosecution witnesses had been examined, some of whom had turned hostile, could not be a ground to revisit findings on merits rendered twice over when earlier bail applications of the respondent were rejected. If such procedure of moving bail applications on merits upon examination of some prosecution witnesses is permitted, there would be no end to such applications being moved by the accused, thereby derailing the trial proceedings and asking the courts to revisit findings on merits on half baked evidence. If such an approach is permitted, the accused may move successive bail applications during the course of examination of further prosecution witnesses and conversely the prosecution may move applications for cancellation of bail already granted, by relying on evidence brought on record during the course of examination of prosecution witnesses. This cannot be permitted. This aspect was completely ignored by the NIA Court while passing the impugned order.
We are of the opinion that the fresh grounds on which the NIA Court proceeded in the present case in favour of the respondent cannot be said to be fresh grounds at all and merely because some of the prosecution witnesses stood already examined, it could not be a ground for re-visiting the findings already rendered against the respondent. Learned A.S.G. was also justified in relying upon the judgment of the Hon’ble Supreme Court in Ram Govind Upadhyay [2002 (3) TMI 945 - SUPREME COURT] wherein the Hon’ble Supreme Court referred to the consideration pertaining to grant of bail and cancellation of an order granting bail. It was laid down that non-consideration of relevant material and aspects while grant of bail and ignoring relevant material could be a ground for interfering with an order granting bail in the present case.
We are of the opinion that such approach cannot be countenanced particularly in the backdrop of the fact that the finding regarding prima facie truth about the accusations had been rendered twice over against the respondent when the earlier two bail applications were rejected on merits.
We are of the opinion that the NIA Court certainly ignored relevant considerations, including the reasoning given in earlier orders rejecting the applications for bail on merits. We are of the opinion that considering evidence of 49 witnesses already examined, when 107 witnesses remained to be examined, was an irrelevant consideration taken into account by the NIA Court while holding in favour of the respondent by the impugned judgment and order.
We are of the opinion that such findings rendered on the touchstone of proviso to Section 43D(5) of the UAPA do not deserve to be re-visited by detailed consideration of the charge-sheet again, merely because some prosecution witnesses have been examined, which according to the respondent, do not seem to support the case of the prosecution. It would not be appropriate to comment upon the merits of the rival contentions. Suffice it to say that we believe that the findings rendered in the orders rejecting the earlier two bail applications of the respondent were justified. Therefore, insofar as the aforesaid aspect of the matter is concerned, the impugned judgment and order passed by the NIA Court cannot be sustained.
Right to fair and speedy trial is a right recognized under Article 21 of the Constitution of India - In the present case, the NIA Court has categorized the respondent in category (b) and, by applying the ratio of Shaheen Welfare Association [1996 (2) TMI 597 - SUPREME COURT], it has been held that since the respondent has spent more than five years in jail as an undertrial, he deserved to be granted bail, subject to two stipulations being satisfied. It was found that these two stipulations were firstly, that there was no likelihood of the trial being completed in the next six months, and secondly, that the respondent did not have any antecedents or that, if released, he would not be harmful to the complainant and witnesses or their family members.
It is an admitted position that the proceedings under the NIA Act are undertaken by the NIA Court once in every week and that the said court is also dealing with cases pertaining to other Special Acts like the MCOCA, TADA, POTA, etc. Therefore, there is every likelihood of the trial continuing for the next few years. There is also no dispute about the fact that even if convicted for the offence with which the respondent is charged, he could be sentenced for imprisonment for a period ranging between five years and life imprisonment. It is crucial that the respondent has undergone more than six years as an undertrial.
We are conscious of the fact that even a sentence of life imprisonment can be imposed for the offence with which, the respondent has been charged under the UAPA and the IPC but, we cannot ignore the fact that the sentence could range between five years to imprisonment for life. This is particularly significant in the backdrop of the fact that the respondent has admittedly already undergone incarceration for more than six years while the trial is underway before the NIA Court.
Looking to the pace at which about 51 witnesses have been examined, which took more than five years for the NIA Court, there is clearly no likelihood of the trial being completed within a reasonable time in the near future. Therefore, we are of the opinion that on this aspect, no error can be attributed to the impugned judgment and order passed by the NIA Court, while holding in favour of the respondent.
Whether it can be said that releasing the respondent would amount to prejudicially affecting the trial and whether there would be possibility of influencing the witnesses and tampering with the evidence - We have observed that the respondent is an educated person, who was completing his graduation in Civil Engineering when he left for Iraq at the age of 21 years. He categorically stated before us that as a 21 year old, he was carried away and that he had committed a serious mistake, for which he had already spent more than six years behind bars. In the past more than six years of his incarceration, the respondent has argued his case on his own before the NIA Court. He represented his own case before this Court as well as the NIA Court and we could find that he was presenting his case by maintaining decorum and in a proper manner. During the course of hearing, it transpired that his father is a doctor of Unani medicine and his sisters are also doctors. His brother is an engineer. This shows that he comes from an educated family and that if stringent conditions are imposed upon him, with an undertaking to cooperate with the trial proceedings before the NIA Court, his release on bail may not be harmful to the society at large and it would not adversely affect the trial proceedings before the NIA Court. Therefore, we are of the opinion that on the second aspect of the matter, the findings rendered by the NIA Court need to be upheld.
Thus, although we have held that the findings rendered by the NIA Court on the merits of the matter in the impugned judgment and order are unsustainable and consequently they are set aside, on the second aspect of the matter pertaining to the long pendency of the trial and the respondent having already undergone incarceration for more than six years, we are inclined to uphold the impugned order on the said ground. Yet, we intend to impose further stringent conditions on the respondent while upholding his release on bail. Consequently, part of the impugned order deserves to be modified by imposition of further conditions.
Hence, the following order that - The impugned order dated 17/03/2020 passed by the NIA Court granting bail to the respondent accused is sustained on the ground of the respondent-accused having already undergone incarceration for more than six years and likelihood of the trial being delayed for considerable period - The respondent-accused Areeb Ejaz Majeed is released on bail
The appeal stands disposed of in above terms.
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