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Showing 1 to 20 of 1236 Records
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2014 (3) TMI 1241
Confiscation of goods under the U.P. V.A.T. Act, 2008 - SCN issued mainly on the ground that the papers of the transported goods by the said vehicle were neither produced by the vehicle driver at the time of checking of the vehicle nor was produced till the issuance of show cause notice - HELD THAT:- The Court feels that neither the papers were available with the revisionist nor they were produced within a reasonable period. The statements of the Driver which is obtained at the first instance should be given more sanctity than the explanation which are produced by the managers and proprietors later-on.
In the present case, it has been argued that the driver was standing outside the gate of the industry where the goods were unloaded when inspection was made. He straight away mentioned that he had handed away the papers just now to the people who were inside the gate. If this was true then he should have gone and brought the papers back for showing it to the authorities but it was not done. Instead three days' time was taken to produce it from Kanpur. The Court is not satisfied with this explanation.
Revision dismissed.
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2014 (3) TMI 1240
Permission to authorised officer of the applicant-Bank to continue in possession of respondent No.2’s movable and immovable properties till they are sold - whether the ratio laid down in Rajasthan Financial Corporation and another v. The Official Liquidator and another [2005 (10) TMI 280 - SUPREME COURT] applies to the sales to be held by the secured creditor under the SARFAESI Act?
HELD THAT:- In Rajasthan Financial Corporation, the Apex Court held that in respect of the dues recoverable under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and also under the State Financial Corporations Act, 1951 the Official Liquidator is bound to be associated by the secured creditor as he represents the workmen dues for which a pari pasu charge is held by him.
This question, however, was considered by a Division Bench of the Delhi High Court in Kotak Mahindra Bank Ltd., v. Megnostar Telecommunications [2012 (9) TMI 1092 - DELHI HIGH COURT]. By its judgment the Division Bench held that the ratio in Rajasthan Financial Corporation has no application to the dues recoverable under the SARFAESI Act.
The applicant is permitted to sell the properties of the company in liquidation by scrupulously following the directions issued in Rajasthan Financial Corporation.
Conclusion - The sale of properties under the SARFAESI Act allowed, following the Rajasthan Financial Corporation guidelines. The applicant bank was directed to associate with the Official Liquidator during the sale process, ensuring compliance with relevant legal frameworks.
Application disposed off.
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2014 (3) TMI 1239
Maintainability of application under sections 397 and 398 of Companies Act, 1956 - the original petitioners had not filed an application under section 111 of the Companies Act, 1956 - HELD THAT:- Appeal under section 10F is to be filed within sixty days and admittedly such sixty days has expired but within sixty days, an application was filed before the Company Law Board on which a decision has been taken. Therefore, this appeal filed cannot be thrown out at the threshold stage and, accordingly, is admitted.
No purpose will be served in keeping the said appeal pending. As the only issue involved is with regard to the maintainability of this appeal which has been discussed above, the order dated 27 January, 2014, is set aside so also the order of 12 August, 2013 whereby Company Petition No. 450 of 2011 was dismissed by overlooking the factum that a composite petition could be maintained under section 111 and sections 397 and 398 of the Companies Act, 1956.
Appeal disposed off.
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2014 (3) TMI 1238
Seeking permission of the court for dissolution of the company - Section 497(6) of the Companies Act, 1956 - HELD THAT:- This court, after hearing learned counsel for the applicant and perusing the material on record, is of the view that since neither there is any claim pending nor statutory dues as indicated in the application nor are there assets of the company available, it will be appropriate to grant permission for dissolution of the company in accordance with section 497(6) of the Act of 1956. In view thereof, the company shall be deemed to be dissolved from the date of passing the order.
The company application stands disposed of.
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2014 (3) TMI 1237
Issues involved: Stay Application for waiver of pre-deposit of Service Tax and penalty under Sections 77 and 78 of the Finance Act, 1994.
Summary:
The Appellant filed a Miscellaneous Application for early hearing of the Stay Application along with the Appeal due to a recovery notice issued by the department to their clients and bankers. The Ld.A.R. for the Revenue had no objection for early hearing. The Tribunal allowed the early hearing and proceeded with the Stay Application itself.
The Stay Application sought waiver of pre-deposit of Service Tax amounting to Rs. 49.90 Lakhs and penalty under Sections 77 and 78 of the Finance Act, 1994. The Ld.Consultant argued that the Ld.Commissioner(Appeals) did not decide the issue on merit but dismissed the Appeal for failure to deposit the directed amount. The Appellant, engaged in providing taxable services, admitted to a liability of Rs. 14,63,370.51 and had already paid Rs. 6.64 Lakhs. The Appellant disputed the demand of Rs. 49.90 Lakhs and expressed willingness to deposit the admitted liability less the amount already paid.
The Tribunal noted that the Ld.Commissioner(Appeals) did not decide the issue on merit and dismissed the Appeal for non-compliance with the pre-deposit direction. The issue involved the leviability of Service Tax on services rendered by the Appellant. The Tribunal found that a pre-deposit of Rs. 8.36 Lakhs was sufficient to hear the Appeal, directing the Appellant to make the deposit within eight weeks. The matter was remitted to the Ld.Commissioner(Appeals) for fresh consideration without insisting on further pre-deposit. Both parties were allowed to adduce evidence, and the Appeal was allowed by way of remand.
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2014 (3) TMI 1235
Contravention of provision of Section 9(1)(d) of the FER Act, 1973 - allegations of payment of Rs. 12,98,800/- to Shri Devkinandan (younger brother of Sh. Jagdish Prasad Karel), on the instruction of shri Dilip Saha of Bangladesh - effect of Retraction of the confessional statement by the appellant - whether the respondent has been able to prove the case as per standard as required in a case like this? - HELD THAT:- the appellant was a Chartered Accountant & was dealing in the profession of auditing & tax matter consultancy. One telephone index, containing the names & addresses of various persons, was recovered from the appellant, but the same was not relevant because the appellant was an Income Tax consultant & had so many clients. Nothing incriminating was recovered from the office of the appellant during raid as on 06.09.1996 at 08:15 p.m. Onus lies on the respondent to prove that the statement given by the appellant was true & it was not caused by any inducement, threat or promise by a person in authority. In this regard, the respondent miserably failed as no plausible explanation was given by the Enforcement Directorate. Moreover, the cross examination of Shri Jagdish Prasad Karel despite demand was also not allowed, which is against the natural law of justice.
There is momentum of force in the submissions of appellant, when he emphasized that the retraction statement of the appellant was true and not an afterthought as it was mode by the appellant on the next very day i.e. on 07.09.1996 after his release from the custody of Enforcement Directorate on 06.09.1996 at 11:30 p.m. & nothing incriminating was recovered from the office of the appellant during raid as on 06.09.1996 at 08:15 p.m. & there was also no independent evidence in the present case against the appellant. So, the confessional statement which was forcefully taken from the appellant is not voluntary. It is also relevant to mention that the present Appeal filed before this Tribunal, pertains to the year 2003 i.e. more than 10 years old. There is no modicum of merit in the submissions of Ld. ALA for the respondent.
Thus, Impugned/Adjudicating Order passed by the Deputy Director, Enforcement Directorate, Calcutta is set aside qua the appellant Shri Naresh Kumar Agarwal (Noticee No.2) & the appeal is allowed.
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2014 (3) TMI 1234
Validity of the court's decision to order the sale of the property for the fourth time - Consideration of an offer made after the third auction by a party who did not participate in earlier auctions - Application of principles governing court sales and confirmation of sales by the court - HELD THAT:- The amount quoted by the appellant in the first sale was Rs. 35,11,111/-. The upset price fixed by the court after cancelling that sale was Rs. 45,55,555/-. But in the next auction there was no one to purchase the property for this amount. In the third auction the appellant alone submitted tender and the amount quoted by him was Rs. 36,66,885/-. On 1.8.2012 he deposited Rs. 15,00,000/- as earnest money.
The third respondent approached the court with an offer to purchase the property for Rs. 50,00,000/- and to pay Rs. 1,00,000/- as compensation to the appellant. The learned Single Judge has directed him to pay Rs. 1,00,000/- as compensation to the appellant and to furnish bank guarantee for Rs. 20,00,000/-; if he happens to be the successful bidder this amount will be adjusted towards the purchase price. In the course of the argument it was submitted on behalf of the 3rd respondent that if he does not bid the property for Rs. 50,00,000/-, he is ready to forfeit to the second respondent-creditor the amount of Rs. 20,00,000/- for which he has been ordered to furnish bank guarantee in the impugned order. This is a procedure unknown to law. The court can act only within the framework of law. How can it order forfeiture of the amount to the second respondent who has no right to it.
The facts and circumstances only justify the conclusion that if the sale is set aside at the request of the third respondent and the property is put up for sale again, court auction sale will become a mockery. The third respondent who did not participate in the earlier three court auctions appears to be a fortune seeker. The court cannot give a platform to such fortune seekers. Though every attempt should be made by the court to ensure sale of property for an adequate price, it shall not be at the expense of the credibility of court auction sale. Frequent setting aside of sale will have a 'scare value'. It will only scare prospective bidders.
Before fixing the upset price at Rs. 45,55,555/-, the court had ascertained the value of the land and the building at Rs. 50,60,300/-. It is well known that court sale may not fetch the market value because of the risks involved in it and that large plots will not be sold easily since only very few people can afford to siphon out a huge sum - These facts are relevant in deciding whether the price offered by the appellant is reasonable. Even though the third respondent has quoted Rs. 50,00,000/-, he would call it a fancy price (vide the affidavit filed by him on 30.6.2013). If that is true, the valuation of the property at Rs. 50,60,300/- is no where near the real price. Having regard to these facts we are of the opinion that the price offered by the appellant is adequate. The order passed by the Company Judge is liable to be set aside and the sale should be confirmed.
The impugned order is set aside - Appeal allowed.
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2014 (3) TMI 1233
Sanction of Scheme of Amalgamation - Sections 391 to 394, read with Section 100 and other relevant provisions of the Companies Act, 1956 - HELD THAT:- The present Scheme of Amalgamation is in the interest of the shareholder and creditors of the petitioner Company as well as in the public interest and the same deserves to be sanctioned - The reduction of share capital of the petitioner Company as envisaged in the petition is approved and the Minute dealing with reduction of the share capital of the petitioner Company being Annexure V is hereby approved.
The petition is disposed off.
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2014 (3) TMI 1232
Winding up of the respondent company - inability to pay debts owed to the petitioner - Section 433(e), 434 and 439 of the Companies Act, 1956 - whether the defence raised by the respondent is bonafide or a sham defence? - HELD THAT:- A reasonable and legitimate excuse to withhold payment would undoubtedly constitute a bonafide dispute. However, the stage at which such dispute is raised is usually a good indicator as to whether the dispute is bonafide. In the present case, the payments were due before 22.05.2011 and there was no legitimate excuse for the respondent to withhold payment at that material time. As discussed above, the only excuse that the respondent had provided to the petitioner, at the material time, for non- payment of its dues was lack of funds. The respondent had repeatedly asked the petitioner to have patience and had assured that arrangements were being made for discharge of its debts. None of the emails sent by the respondent indicates any dispute by the parties.
There is a serious controversy with regard to the genuineness and veracity of the letters dated 22.09.2011, 25.11.2011 and 10.12.2011 which have been produced for the first time in February 2014. It is also important to note that none of the aforesaid letters indicates the name or designation of the person who has signed the letter - The respondent also did not respond to the notice under Section 434(1)(a) of the Act. In the event that there was any dispute as to the payment of dues to the petitioner, the petitioner ought to have been confronted with the same when a demand was made by the petitioner. And, in any event the notice under Section 434(1)(a) of the Act must be confronted by presenting the dispute sought to be raised. Absence of a response at the relevant stage indicating a dispute as to the payments being demanded, is an indicator of the lack of bonafides.
In the case of Asian Steels [2012 (4) TMI 835 - DELHI HIGH COURT], the Court came to the conclusion that the case involved disputed questions of fact as the documents relied upon by both the parties were alleged as forged and fabricated. It is relevant to note that in that case the petitioner relied upon a Statement of confirmation of accounts. The said Statement was produced for the first time in the petition and was not relied upon by the petitioner in any of the contemporaneous correspondence. Even the statutory notice sent by the petitioner did not refer to the said confirmation.
In the case of Zhuhai Hansen Technology Co Ltd. [2013 (3) TMI 529 - DELHI HIGH COURT] the goods dispatched by the petitioner were not accepted by the respondent and were not cleared from customs. This, itself, indicates that the disputes involved in the matter were substantial and the payment for the said goods could not be accepted as a dent admitted by the respondent therein.
The petitioner is directed to publish the advertisement of this petition in ‘The Statesman’ (English) and ‘Jansatta’ (Hindi) for a hearing to be held on 24.07.2014. The citation be published in the Delhi Gazette also - Petition admitted.
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2014 (3) TMI 1231
Computation of deduction u/s 80HHC - exclude excise duty from the total turnover while computing deduction - HELD THAT:- First question is already decided by this Court in [2014 (3) TMI 934 - GUJARAT HIGH COURT] as held against the Revenue and it is held that the learned Tribunal has not committed any error in holding that the excise duty is excise duty is to be excluded for the purpose of computation of deduction u/s. 80HHC.
Allowance of deduction u/s 80IB and 80HHC independently - This Court in [2014 (4) TMI 676 - GUJARAT HIGH COURT] we may peruse more closely the language used in sub section (9) of section 80IA. In plain terms it provides that where any amount of profits and gains of an undertaking or enterprise in case of an assessee is claimed and allowed under section 80IA, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading `C. Deductions in respect of certain incomes', and in no case exceed the profits of gains of such eligible business of the undertaking or enterprise. It can thus be seen that subsection (9) is divided into two clear parts. First part pertains to non allowability of deduction under any other provision contained in PartC of Chapter VI to the extent of profits and gains of an enterprise or undertaking with respect to which deduction under section 80IA is claimed and allowed. The second part provides that in any case, such deduction shall not exceed the profits and gains of eligible business of an undertaking or enterprise. If we accept the interpretation of the assessee that only effect of sub section (9) of section 80IA would be to limit the maximum permissible deduction under section 80HHC to the profits and gains of the eligible business, we would be completely ignoring the first part of the subsection.
Subsection (9) of section 80IA was aimed at restricting the successive claims of deduction of the same profit or gain under different provisions contained in subchapter C of Chapter VI of the Act. This provision, therefore, necessarily impacts other deduction provisions including section 80HHC of the Act. Nothing contained in section 80HHC suggests that the deduction provided therein was immune from any outside influence or that the provision was impregnable by any other statute or enactment. Accepting any such theory would lead to incongruous results. Even the assessee concedes that subsection (9) of section 80IA would operate as to limiting the combined deductions to a maximum of the profits and gains from an eligible business of the undertaking or enterprise. If section 80HHC contained a protective shell making it immune from any outside influence, even this effect of subsection (9) of section 80IA could not be applied. This would completely render the provisions of sub section (9) of section 80IA redundant and meaningless.
We are unable to follow the line of logic adopted in case of Associated Capsules P. Ltd. [2011 (1) TMI 787 - BOMBAY HIGH COURT] that section 80IA(9) of the Act in the context of section 80HHC would operate not at the stage of computation but at the stage of allowing the deduction. - Decided in favour of revenue.
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2014 (3) TMI 1230
Dismissal of bail applications of both the appellants pending trial - three murders allegedly committed inter alia by senior police officers - Delay in trial proceedings - Parity with co-accused.
HELD THAT:- The court granting bail should exercise its discretion in a judicious manner and not as a matter of course. Though, for grant of bail, detailed examination of evidence and elaborate discussion on merits of the case need not be undertaken, there is a need to indicate in such orders reasons for prima facie conclusion why bail was being granted, particularly, when the accused is charged of having committed a serious offence.
In Kalyan Chandra Sarkar vs. Rajesh Ranjan alias Pappu Yadav and Another [2004 (3) TMI 763 - SUPREME COURT], this Court, while considering Sections 437 and 439 of the Code of Criminal Procedure, 1973, (in short ‘the Code’) held that, amongst other circumstances of the case, the following factors are required to be considered by the court before granting bail: (a) The nature of accusation and the severity of punishment in case of conviction and the nature of supporting evidence. (b) Reasonable apprehension of tampering with the witness or apprehension of threat to the complainant. (c) Prima facie satisfaction of the court in support of the charge.
Considering the limited issue involved, there is no need to elaborately analyse, assess, the acceptability or otherwise of the prosecution version, charges levelled, witnesses examined and documents exhibited at this juncture. However, in the light of the submissions made by both the sides, on careful perusal of the role attributed to these appellants in the charge sheet filed in the Court as well as other materials and also taken note of judicial custody for nearly seven years pending trial and the rival contentions.
Delay in trail proceedings - HELD THAT:- It is not in dispute that in respect of abduction and killing of Sohrabuddin and Kausarbi, after prolonged hearings, the trial was transferred to Mumbai, that is, out of Gujarat on the orders of this Court. Thereafter, in respect of killing of Tulsiram Prajapati, again, on the orders of this Court dated 08.04.2013, the same was transferred to Mumbai to be heard along with the trial relating to killing of Sohrabuddin and Kausarbi. Taking note of these aspects including various orders of this Court, it cannot be claimed that the investigating agency was responsible for the delay.
Parity with co-accused - HELD THAT:- A perusal of the reason(s) for grant of bail or anticipatory bail shows that some of the accused were granted bail by the trial court and some by the High Court and by this Court. Apart from pointing out various orders, learned counsel for the appellants has brought to notice the order passed by this Court in Naresh Vishnu Chauhan vs. State of Gujarat & Anr. [2012 (10) TMI 1277 - SUPREME COURT] wherein Naresh Vishnu Chauhan, who was one of the coaccused, at the relevant time posted as sub-Inspector of Police and was attached to the Anti-Terrorist Squad, Ahmedabad. In spite of the fact that the counsel for the State has pointed out that the case against the said person (A-13) is not only confined to Section 201 IPC but also includes Section 302 read with Section 120B IPC, this Court, taking note of the fact that he was in jail for over five years and three months, directed to release him on bail forthwith.
Likewise, another co-accused, viz., Vijay Arjunbhai Rathod, who was in custody in connection with the encounter case and whose name was included in the list of the accused, was released on bail by this Court in Vijay Arjunbhai Rathod vs. CBI & Anr. [2012 (3) TMI 731 - SC ORDER].
It is directed that all the materials pertaining to these cases which are lying in the original Court at Gujarat as well as the records relating to the same under the custody of the High Court of Gujarat, if any, be transferred to the Special Court, CBI, Mumbai within a period of one month from the date of receipt of copy of this order. After receipt of all the required materials, the Special Court, CBI at Mumbai have to get the relevant documents alone translated within a period of three months thereafter.
Both the appellants have made out a case for bail on executing a bond with two solvent sureties, each in a sum of Rs 1 lakh to the satisfaction of the Special Judge, CBI, Mumbai on the fulfilment of conditions imposed - the appellants are ordered to be released on bail subject to the conditions mentioned - bail application allowed.
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2014 (3) TMI 1229
Condonation of delay of more than 1 year and 8 months caused in filing Regular Civil Appeal against the decision given by the trial Court in a suit filed for relief of injunction - Section 5 of the Limitation Act - HELD THAT:- The provision of section 5 of the Act has given discretionary power to the Court and the party applying for Condonation has no right as such. In a case the party applying for Condonation of delay may be in a position to show "sufficient cause" and there may be a ground in that regard which cannot be disputed. However, in such a case also the Court has to exercise discretion judiciously and the exercise must be to advance substantial justice. The Court is expected to give reasons for refusing to Condone the delay or for giving relief of Condonation of delay. This needs to be done in systematic manner as observed above. The reasons must be on the grounds mentioned to make out sufficient cause and there must also be reasons on the point of prima facie merits of the case and bona fides.
In the case like present one, when there was no cause of action for the suit and the matter was already decided finally, the Court is not expected to use discretion in favour of the party applying for Condonation of delay. In such a case the delay does not deserve to be Condoned. The District Court has not touched the rival Contentions to ascertain prima facie merits of the case. However, the District Court has not Committed error in dismissing the application filed by the present appellants.
The Appellate Court is not expected to interfere with the discretion exercised by the lower Court in allowing or rejecting the application for Condonation of delay, unless it appears that the Court has not exercised at all the discretion or the Court has not exercised the power - This Court is Considering the matter in second appeal and this Court has no hesitation to observe that in second appeal such interference is possible only in exceptional cases.
This Court holds that no arguable case is made out, no sufficient cause is shown and there is no possibility of interference in the decision given by the District Court. In the result, the appeal stands dismissed.
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2014 (3) TMI 1228
Disallowance of expenses relating to Initial Public Offer - Nature of expenditure - revenue or capital expenditure - AO observed the said expenses have been incurred for increasing the share capital and hence they are directly related to the expansion of the Capital base of the company, in which case they fall in the category of Capital Expenditure, thus disallowed it - HELD THAT:- Decision rendered by Hon'ble Supreme Court in the case of Brooke Bond (India) Ltd. [1997 (2) TMI 11 - SUPREME COURT] is squarely applicable to the facts of the instant case held that expenses which are relatable to public issue of shares are to be treated as capital in nature. The argument of the appellant that expenditure on advertisement for IPO, market research expenses related to IPO, traveling expenses and postal expenses etc. are indirect expenses and therefore the same is to be treated revenue in nature is not acceptable. Advertisement has to be carried on for the purpose of drawing interest of the general public for the subscription to the shares. Similarly market research expenses, as well as postal expenses for dispatch of various documents related to IPO are also directly linked to the public issue of shares. Similarly, journeys undertaken by the promoters and employees for the purpose of IPO are also related to IPO. Thus all the activities are directly and intricately linked with the initial public offer of shares, and, therefore, they are part and parcel of expenses pertaining to public issue of shares. AO was justified in treating the entire expenditure as capital expenditure.
A.R. alternatively contended that the Initial Public Offer expenses are considered as "Preliminary expenses" u/s 35D - As we notice that the alternative contention of the assessee for deduction u/s. 35D was not examined by the AO. Accordingly, in our view, the same requires to be considered at the end of the assessing officer. Accordingly, we restore this alternative contention to the file of the AO with the direction to examine the same and take appropriate decision in accordance with the law, after affording necessary opportunity of being heard to the assessee.
Correctness of computation of interest u/s. 234C - According to the assessee the interest u/s. 234C is required to be computed after deducting the amount of "tax deductible at source" instead of actual amount of tax deducted at source - HELD THAT:- A perusal of Explanation to sec. 234C shows that the "tax due on the returned income" is required to be determined by reducing the amount of any tax deductible or collectible at source in accordance with the provisions of Chapter XVII on any income which is subject to such deduction or collection and which is taken into account in computing such total income. Hence, we find force in the contention of the assessee.
In our view, this claim also requires examination at the end of the assessing officer, since it is required to be examined as to whether any income is subject to deduction or collection at source and whether such income was taken in account in computing such total income in terms of the Explanation to sec. 234C. Accordingly, we restore this issue also to the file of the AO with the direction to examine the claim of the assessee in terms of the provisions of sec. 234C and take appropriate decision in accordance with the law, after affording necessary opportunity of being heard to the assessee. In the result, the appeal filed by the assessee is treated as allowed for statistical purposes.
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2014 (3) TMI 1227
Seeking stay of collection of outstanding demand payable by the assessee for the assessment year 2006-07 - main plea of the assessee appears that the assessing officer was not right in assessing the sale value as a slump sale. Alternatively it is contended that the assessing officer should have allowed deduction of the value of Net worth for the purpose of computing the Capital gain - HELD THAT:- Though the assessee pleads about the financial difficulties, yet no document was filed before us to substantiate the said claim. Hence, under these circumstances, the Tribunal is of the considered view that the balance of convenience is in favour of granting partial stay to the assessee.
During the course of hearing, the ld A.R agreed to pay a further sum of Rs.2.50 lakhs and pleaded for the stay of balance amount.
D.R submitted that the assessee may be directed to pay a sum of Rs.15.00 lakhs. Having regard to the rival submissions, we direct the assessee to pay a sum of Rs. 10 lakhs (Ten lakhs) in two equal installments. The first installment should be paid on or before 31-03-2014 and the second installment shall be paid on or before 15-04-2014. Subject to the payment of the above instalments by the dates mentioned above, we direct the revenue not to recover the balance amount of tax till the date of disposal of the appeal or for a period of six months from the date of this order, whichever period expires earlier. Stay Petition filed by the assessee is allowed.
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2014 (3) TMI 1226
Allowability of business expenses - expenditure on components, depreciation claim on cars, club subscription expenses, and denial of depreciation on cars - HELD THAT:- We find that the whole attempt is to seek re-appreciation and re-appraisal of the factual materials. Upon scrutinizing the entire material produced, both, CIT (A) and the Tribunal held that the majority of the expenditure is on account of materials used for development of prototype and other components, the utilized costs of the material used by the appellant in the new project. The authorities found that assessee had created a facility of procuring components of the elevator through local vendors.
Earlier these components were procured by importing and there was no manufacturing facility in India, though the same was created for that purpose. Testing towers had been erected and the expenditure incurred on the testing of elevator had already been capitalized by the assessee. Once the finding of fact is that all the materials are for creating the manufacturing facility and which has definitely an enduring benefit, namely for a long time, then, it is not something that the appellant can claim to be a temporary or transitory one. The reasoning of the order of the Tribunal goes to show that the Tribunal has applied the correct tests and rejected the relief.
We are of the opinion that though the judgment in the case of Empire Jute Co. Ltd. [1980 (5) TMI 1 - SUPREME COURT] has been relied upon even before the Tribunal, the Tribunal found that the principle therein can have no application to the case of appellant. The Supreme Court on facts in that case, evolved various tests for distinguishing between capital and revenue expenditure but no test is paramount or conclusive. There is no all embracing formula which can provide a ready solution to the problem.
Every case has to be decided on its own facts, keeping in mind the broad picture of the whole operation in respect of which the expenditure has been incurred. Supreme Court found in the case before it that the appellant was carrying out business of manufacture of jute. The working time agreement was entered between the members of an association restricting the number of working hours per week, for which the mill shall be entitled to work their looms.
After referring to the clause of the agreement, what the Hon'ble Supreme Court found was that the appellant had purchased loom hours from four different jute manufacturing concerns and had paid a correct sum. The Tribunal held that the expenditure incurred by the assessee was in the nature of revenue expenditure and hence deductible in computing the profits. The High Court held that the amount paid was for purchase of loom hours and in the nature of capital expenditure. It was not therefore tenable.
This expenditure incurred for the purpose of removing the restriction on the number of working hours with a view to increase its profits, was revenue in nature. By purchase of loom hours no new asset has been created and there is no addition or expansion of the profit-making apparatus of the assessee. The costs of additional loom hours did not add to the fixed capital to the looms.
Tests and the propositions which have been culled out from this judgment can be applied, provided the facts and circumstances in each case warrant such application. Once it is not a universal proposition and must be applied in the facts and circumstances of each case, then, we have no doubt that the concurrent findings do not give rise to any substantial question of law.
Equally, the nature of the expenses claimed as club subscription have been rightly disallowed. It is not a matter where we can re-appreciate the evidence on record. In fact, the finding of fact is that no evidence has been produced to suggest that such expenses were incurred wholly and exclusively for the purpose of business. The expenditure is personal in nature. In these circumstances, even this aspect does not give rise to any substantial question of law.
Depreciation on Cars if the appellant is entitled to the benefit in terms of the judgment rendered by this Court, even then we are of the view that no substantial question of law arises on that issue. The appellant is entitled to claim depreciation on the vehicles/cars in the subsequent years. By clarifying that the observations of the Tribunal are restricted to the AY in question, it would be open for the appellant to press such claim in future and seek relief in terms thereof.
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2014 (3) TMI 1225
Deposit of penalty u/s 9(1)(a) and 9(1)(c) of Foreign Exchange Regulation Act, 1973 - HELD THAT:- As directed the appellants shall deposit the amount of penalty imposed under Sections 9(1)(a) and 9(1)(c) of Foreign Exchange Regulation Act, 1973, within four (4) weeks from today. In the event of the appeals being allowed, the Enforcement Directorate shall refund that amount along with interest on it @ 12 per cent per annum from the date of deposit of amount with it till the date of its refund.
The bank guarantee which the appellants had furnished in compliance of the interim order dated 30.8.2010 be returned to the appellants. On such deposit being made, the appeals pending before the Appellate Tribunal will be decided on merits. If the aforesaid amount is not deposited within four (4) weeks, the appeals pending before the Tribunal shall stand dismissed for want of deposit.
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2014 (3) TMI 1224
Jurisdiction of the Waqf Tribunal in determining the dispute between the parties - Appellant denied that the subject property was waqf property - whether the suit for eviction by the landlord against the tenant relating to waqf property is triable by the civil court or the suit lies within the exclusive jurisdiction of the Waqf Tribunal? - HELD THAT:- In Ramesh Gobindram (Dead) through L.Rs. v. Sugra Humayun Mirza Wakf [2010 (9) TMI 1267 - SUPREME COURT], this Court considered Sections 6(1), 6(5), 7(1), 7(5), 83, 85 and few other provisions of the Act and explained the jurisdiction of the Waqf Tribunal vis-à-vis Civil Court. As regards the suit for eviction against the tenant(s) of waqf property, the Court held that such suit is triable by the Civil Court as it is not covered by Sections 6 and 7 of the Act.
The Court in Bhanwar Lal [2013 (9) TMI 1255 - SUPREME COURT] considered the decision in Ramesh Gobindram [2010 (9) TMI 1267 - SUPREME COURT] at quite some length. Besides Ramesh Gobindram, the Court in Bhanwar Lal also considered two other decisions, one, Board of Wakf, West Bengal and Anr. v. Anis Fatma Begum and Anr. [2010 (11) TMI 1101 - SUPREME COURT] and two, Sardar Khan and Ors. v. Syed Najmul Hasan (Seth) and Ors. [2007 (2) TMI 726 - SUPREME COURT]. In Anis Fatma Begum [2010 (11) TMI 1101 - SUPREME COURT], this Court had held that the Waqf Tribunal constituted Under Section 83 of the Act will have exclusive jurisdiction to deal with the questions relating to demarcation of the waqf property.
The matter is wholly and squarely covered by Ramesh Gobindram. The suit for eviction against the tenant relating to a waqf property is exclusive triable by the civil court as such suit is not covered by the disputes specified in Sections 6 and 7 of the Act.
The impugned order cannot be sustained and it is liable to be set aside and is set aside - Appeal allowed.
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2014 (3) TMI 1223
Seeking condonation of delay of 342 days in filing appeal - Court has power to condone the delay or not - sufficient explanation rendered by the applicant for the delay caused in filing the appeal or not.
Power of the High Court to condone the delay in the Tax Appeal presented under section 78 of the Act - HELD THAT:- Section 84 of the Act empowers the Court competent to hear the appeals under section 78 of the Act and to accept such appeals after the period of limitation has expired, provided that the Court is satisfied that the appellant had sufficient cause for not preferring the appeal within the period of limitation. It is true that in section 84 of the Act, the reference is to the Appellate Authority of the Tribunal. There is no specific mention to the High Court. Nevertheless what is of significance is that such power to condone the delay on being satisfied that the appellant had sufficient cause preventing him from preferring appeal, is available in the case of an appeal preferred under section 78 of the Act also. Section 78 of the Act, pertains to an appeal to the High Court. Under the circumstances, the legislature intended to empower the High Court also to condone the delay for sufficient cause in the case of appeals filed under section 78 of the Act.
This is precisely what this Court in the case of Rama News Print and Papers Ltd. [2011 (1) TMI 1276 - GUJARAT HIGH COURT] held that 'the contention raised on behalf of the respondent that the High Court has no power to condone the delay in respect of an appeal preferred under section 78 of the Act, does not merit acceptance and is, accordingly, rejected'.
Sufficient explanation for delay or not - HELD THAT:- Considering the administrative processes involved and the substantial revenue implication of Rs. 21 crore, it is noted that similar delays had been condoned in previous cases involving significant tax amounts, such as State of Gujarat v. Tolat Electronics [2015 (3) TMI 257 - GUJARAT HIGH COURT] and State of Gujarat v. Welspun Gujarat Stahl Rohren Ltd. [2013 (3) TMI 626 - GUJARAT HIGH COURT] where the delay was condoned on account of public interest.
The delay is condoned in filing both the appeals on condition that the applicant pays costs of Rs.25,000/- in each of the appeals, which shall be done latest by April 30, 2014 - Application disposed off.
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2014 (3) TMI 1222
Violation of rules of natural justice - cancelling the registration u/s 12AA(3) - Commercial Cricket related activities - AR submitted that the DIT (E) had cancelled the registration by pointing out certain issues which were never raised in the show cause notice issued by him or even not put across to the assessee at the time of personal hearing before him - HELD THAT:- Before cancelling the registration granted to the assessee, that too retrospectively, the DIT (E) should have given adequate opportunity to the assessee to explain/clarify on the issues on the basis of which the DIT (E) cancelled the registration. It is a fact that assessee was earlier registered u/s 12A of the Act. Therefore, it was incumbent upon the DIT (E) to bring to the notice of the assessee all those factors, which according to the DIT (E), has changed the nature and character of the assessee and its objects have become such that it can no more be considered to be existing solely for charitable purpose as defined u/s 2(15) of the Act.
We, therefore, feel that the assessee deserves a fair opportunity to explain its position on all the issues which provoked the DIT (E) to cancel the registration granted u/s 12A - Thus remit the matter back to the file of the DIT (E), who shall communicate to the assessee all the issues, which according to him, has changed the object of the assessee thereby violating the conditions of registration u/s 12AA(3). Assessee’s appeal is allowed for statistical purposes.
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2014 (3) TMI 1221
Eligibility for educational requirements stipulated in clause 'b' of Rule 14 of Delhi Judicial Service Rules, 1970 - HELD THAT:- On a plain reading of Rule 14 of Delhi Judicial Service Rules, 1970, it is apparent that three independent conditions are stipulated. Condition (a) states that a candidate should be a citizen of India. Condition (b) states that a candidate should be a person practicing as an Advocate in India or a person qualified to be admitted as an Advocate under the Advocates Act, 1961. Condition (c) is with regard to the age on a particular date i.e. on the first day of January following the date of commencement of examination. The three clauses are separate and we do not think that the date stipulated to compute the maximum eligible age can be read as part and parcel or in continuation of clause 'b' which relates to the educational qualification.
Petition dismissed.
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