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2020 (4) TMI 919
Suit for ejectment - recovery of rent arrears in the second suit is barred by res judicata and Section 12 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 - Scope of High Court’s Revisional Jurisdiction - State Government's prohibition on the change of user of lands affects the owners' right to recover possession or not - comparative hardship in the recovery of open land under Section 12 (1) (i) of the Bombay Rent Act, which does not require such consideration, invalidates the adjudication or not - Back to Brass tacks - Arrears of Rent - Scope of Section 12 of the Bombay Rent Act - Rent and Recurring Cause of Action - Default Pending the Present Ejectment Proceedings - Bona fide Requirement - Prohibition on the Change of User.
Scope of High Court’s Revisional Jurisdiction - HELD THAT:- In Gurbachan Singh v. Saliabi alias Bibijan [1992 (11) TMI 297 - SUPREME COURT], the Supreme Court has held that bona fide requirement is a question of fact. So is comparative hardship. These questions have to be decided on the basis of evidence on record. Appreciation of evidence is not the task of the High Court in exercise of its revisional power. Then, on the facts of that case, Gurbachan Singh has held that the High Court was wrong in reappreciating the evidence and reversing the conclusions concurrently reached by the courts below.
Once the High Court has agreed with the findings given by the courts below, it is not necessary for it, to go into details of the correctness of the findings of fact, act as a second court of first appeal, and set down in the judgment detailed reasons for agreeing with those findings.
Back to Brass tacks - HELD THAT:- The facts are not in dispute. Beginning in 1977, the Owners sued the Corporation for ejectment. In that first round, they lost up to this Court. This Court dismissed their WP No.4985 of 1986 on 9th February 1998. Soon thereafter, on 1st May 1998, in three months, the Owners sent a fresh notice for possession. That notice has led to the second round of eviction proceedings - the Owners maintained that the Corporation defaulted on paying the rent. According to them, by the time they sent the quit notice, the Corporation owed them Rs.43,500/- as rent arrears, besides Rs.10,690/- as N.A. Taxes. Thus, the eviction was on the grounds of bona fide requirement and rent default.
Arrears of Rent - HELD THAT:- To begin with, the issue of rent arrears has two aspects: the default before the ejectment suit was filed and the default pending that ejectment suit. In this regard, the Corporation has relied on Waman Deoram Sonawane [1983 (9) TMI 335 - BOMBAY HIGH COURT]. In that case, the decree was solely based on the tenant’s default in paying the education cess. This Court considered Section 12 of Bombay Rent Act before its amendment in 1987 and has held that the landlord could take advantage of Section 12(3)(b) of the Act even when strictly Section 12(3)(a) of the Act was unavailable for him. Waman Deoram Sonawane does not help the Corporation, for both the facts and the law, as it was existing then, were different.
Scope of Section 12 of the Bombay Rent Act - HELD THAT:- Section 12 is couched in a negative command: the owner cannot press the cause of default of rent payment if the tenant “pays or is ready and willing to pay” the standard rent and permitted increases. That is what sub-section (1) declares. Once the owner issues quit notice to the tenant on the grounds of nonpayment of rent, he cannot sue the tenant “until the expiration of one month next after notice.” This is the first tier of protection for the tenant - Under sub-section (3) of Section 12, on the first day of hearing of the suit or by the date as the Court may fix, if the tenant pays in Court the standard rent and permitted increases together with simple interest at nine per cent per annum, he avoids eviction. But it is subject to another condition: Pending the suit too, the tenant should continue to pay regularly the standard rent and permitted increases till the suit is finally decided.
Rent and Recurring Cause of Action - HELD THAT:- The Owners have not lost their right to sue the Corporation and the Firm merely because the default occurred when another suit was pending. Pithily put, if there is no completed cause of action, there is no right for the party to sue. If the completed cause of action has many aspects or facets, but the party sues only on a few, the rest remain relinquished or abandoned. But on a completed cause of action if a party sues and pending those proceedings, there is, temporally speaking, recurrence of the same cause of action, it provides an independent cause of action. All these rights to sue are subject to one obvious limitation: The Statute of Limitation.
Default Pending the Present Ejectment Proceedings - HELD THAT:- With the doctrine of merger in play, the trial Court’s judgment no longer exists. But its reasoning, accepted by the Appellate Court, commends attention. In paras 10 and 11, the trial Court examined the material on record and concluded that the Corporation committed default pending the present ejectment proceedings, too. It is a question of fact and a matter of record. And the Appellate Court, in considering the first point, has affirmed it. Thus, it stands concluded that the Corporation has committed default both before the Owner could file the suit and pending the suit, as well.
Under Section 12(3) of the Bombay Rent Act, after receiving notice, the course available to the tenants was to invoke Section 11(3) of the Act for fixation of standard rent or to apply under Section 11(1) before the notice was received. None of these actions were resorted to. Even for depositing the rent amount in the court, if the tenant so wanted, he should move a petition so that the court could fix a date for deposit. But merely the tenant’s depositing the rental amount suo motu would not suffice for the court to hold that the obligation for payment of rent was duly discharged.
The Courts below have concurrently held that the Corporation has failed to discharge its burden. The material it has placed before the Court could not clinch the issue that it has paid the rent regularly. So, on a question of fact— whether the rent remittance has been regular—this Court has refused to reappreciate evidence and upset the concurrent findings.
Bona fide Requirement - HELD THAT:- The Appellate Court as well as the trial Court have considered the Owner’s reasonable, bona fide need elaborately. They have concluded that the Owners needed the whole extent for their personal use— to cater to the increasing needs of their growing family. In addition, the Courts have also considered the relative hardship. Perhaps, that consideration of relative hardship may be extraneous or unnecessary. But it does not vitiate the outcome. It proves fatal if something essential has not been considered; it only proves redundant if something extraneous is considered, besides the essential having already been considered. As rightly contended by the Owners, the Courts put heavier onus on them; they were asked to meet an extra criterion—the comparative hardship—which is not required under Section 13 (1) (i). If at all anyone has been prejudiced, it must be the Owners not the Corporation.
Prohibition on the Change of User - HELD THAT:- The applicant brought to this Court’s notice a statutory change: Under Section 154 of the Maharashtra Regional and Town Planning Act, 1966, the State Government directed the Municipal Corporations in the State not to permit the change of use of the properties being used as fuel filling stations. So the applicant contended that even if the respondent recovered the leased property, he could not use it for any purposes other than for setting up a filling station. According to the applicant, this subsequent material change goes to the root of the matter - This Court, then, has held that the respondent’s effort to evict the applicant are legal, and “there is no challenge on that aspect.” In the absence of any protection under the Maharashtra Rent Control Act, the decree for possession must follow. On the issue of change of use, it has held that “the direction issued by the State Government will not affect the merits of the decree for eviction. The result of the said direction is that as and when the Respondent seeks permission to redevelop the suit property in question, the Mumbai Municipal Corporation will not be entitled to permit change of present user of the property.” But it has nothing to do with the decree for eviction.
Conclusion - i) Each default in rent payment constitutes a recurring cause of action, allowing for new suits. ii) The revisional court's jurisdiction does not extend to reassessing evidence without evidence of perversity. iii) Statutory prohibitions on change of user do not affect existing eviction decrees. iv) Consideration of comparative hardship in cases of vacant land under Section 13(1)(i) is not required but does not invalidate judgments if done.
The Civil Revision Applications dismissed.
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2020 (4) TMI 918
Receipt of interest on enhanced compensation - AO held that interest on enhanced compensation is taxable u/s 56(2)(viii) and after allowing a deduction of sum equal to 50% of interest received, as per the provisions of Section 57(1)(v) remaining amount was added to the total income of the assessee - whether amount received be treated u/s 28 of the Land Acquisition Act, 1894 or u/s 34 of Land Acquisition Act, 1894 and taxable u/s 56(2)(viii) ? - HELD THAT:- We have gone through the record and perused the judgment of MB Bala Bhai [2016 (5) TMI 488 - GUJARAT HIGH COURT], Ramabai [1989 (11) TMI 2 - SUPREME COURT], Jagmal Singh .[2018 (9) TMI 1468 - ITAT DELHI], Sh. Amarchand Gupta [2019 (8) TMI 1424 - ITAT DELHI] and also the cases relied by the revenue viz. Jagmal Singh and Others [2016 (3) TMI 733 - PUNJAB & HARYANA HIGH COURT], Manjeet Singh Vs Union of India [2014 (12) TMI 1298 - SC ORDER]. We have also perused the judgment of Ghanshyam [2009 (7) TMI 12 - SUPREME COURT] . The Hon’ble Apex Court held that interest paid on the excess amount u/s 28 of Land Acquisition Act, 1894 depends upon a claim by the person whose land is acquired whereas interest u/s 34 is for delay in making payment. Interest u/s 28 is a part of the enhanced value. The Hon’ble Supreme Court has categorically held that interest u/s 34 is only for delay in making payment after the compensation amount is determined.
In the instant case before us, the compensation has been increased by the order of the Hon’ble High Court, hence, the amount received by the assessee being the compensation received u/s 28 of Land Acquisition Act, 1894, the same is exempt u/s 10(37) of the Income Tax Act, 1961. Appeal of the assessee is allowed.
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2020 (4) TMI 917
Invoking or encashing eight bank guarantees - COVID-19 pandemic can constitute special equities justifying the restraint of bank guarantee invocation or not - Section 9 of the Arbitration and Conciliation Act, 1996 - HELD THAT:- The legal position is noted, relating to the circumstances and situations in which interim injunctions, restraining the invocation of unconditional bank guarantees, could be granted, any further reference to judicial precedents in this regard may not be either necessary or justify, given the special circumstances placed, and the limited nature of the present order. In fact, in para 41 of the report in Gangotri Enterprises Ltd. v. U.O.I. [2016 (5) TMI 516 - SUPREME COURT], the Supreme Court, even while noting the above legal position, held that, while there could be no quarrel with the propositions emerging from the above decisions, "every case has to be decided with reference to the facts of the case involved therein".
It is not necessary to multiply references to precedents, the law with respect to injunction of encashment, or invocation, of unconditional bank guarantees, being fairly well settled. It is significant, however, that, where the earlier understanding of the expression "special equities", as a circumstance in which invocation of bank guarantees could be inducted, was that such equities were limited to cases where irretrievable injustice resulted, the recent decision in Standard Chartered Bank Ltd. [2019 (12) TMI 843 - SUPREME COURT] seems to visualise irretrievable injustice, and special equities, as distinct circumstances, the existence of either of which would justify an order of injunction. Viewed any which way, there appears to be no gain saying the proposition that, where "special equities" exist, the court is empowered, in a given set of facts and circumstances, to injunct invocation, or encashment, of a bank guarantee. Where such special circumstances do exist, no occasion arises, to revert to the general principle regarding the contractually binding nature of a bank guarantee, or the legal obligation of the bank to honour the bank guarantee, these special circumstances having, in all cases, being treated as exceptions to this general principle.
Ex facie, the petitioner cannot plead fraud - though the petitioner does attempt to do so, by a side wind as it were, in the petition - as a ground to seek injunction. All that is required to be seen is, therefore, whether "special equities" can be said to exist, as would justify grant of the relief sought by the petitioner.
The countrywide lockdown, which came into place on 24th March, 2020 was prima facie in the nature of force majeure. Such a lockdown is unprecedented, and was incapable of having been predicted either by the respondent or by the petitioner - special equities do exist, as would justify grant of the prayer, of the petitioner, to injunct the respondent from invoking the bank guarantees of the petitioner, forming subject matter of these proceedings, till the expiry of a period of one week from 3rd May, 2020, till which date the lockdown has been imposed.
In view of the submission, of the petitioner, that it was actually working on the project till the imposition of lockdown on 22nd March, 2020, or at least shortly prior thereto, and in view of the sudden and emergent imposition of lockdown, the interests of justice would justify an ad interim injunction, restraining invocation or encashment of the aforesaid eight bank guarantees, till the expiry of exactly one week from 3rd May, 2020, till which date the lockdown stands presently extended. As to whether this interim injunction merits continuance, thereafter, or not, would be examined on the next date of hearing, consequent to pleadings being completed and all requisite material, including all relevant Governmental instructions, being placed on record. The injunction presently being granted, it is reiterated, is purely ad interim in nature, and is being granted only in view of the completely unpredictable nature of the lockdown, and its sudden imposition on 22nd March, 2020, of which the petitioner could not legitimately be treated as having been aware in advance.
Let notice issue on the present petition, returnable on 11th May, 2020.
Conclusion - Unprecedented events like the COVID-19 pandemic could constitute special equities justifying the restraint of bank guarantee invocation.
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2020 (4) TMI 916
Seeking grant of bail - criminal conspiracy and corruption - Misappropriation of Provident Fund (PF) investments - HELD THAT:- The investments were made on 16th March, 2017 without there being any authorization of the Board of Trustees, but to justify the investment forged minutes of meeting allegedly held on 24th March, 2017 were prepared on which signature of the Chairman, Mr Sanjay Agrawal were forged. Statement of Abhinav Gupta s/o Praveen Kumar Gupta has prima facie disclosed that the brokerage amount of Rs.30 crores was given by DHFL for making investment and this brokerage amount was divided among three accused. The acts of commission and omission of the accused along with other coaccused have caused huge loss to the two trusts created for the welfare of poor 42000 employees of the threee electricity corporations out of their hard earned money.
The economic crime of such scale and magnitude are carefully and meticulously planned and executed. It is well settled that economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. While granting bail, the court has to keep in mind the nature of accusations, magnitude and gravity of offence and nature of evidence in support of the accusations.
The present case involves a scam of huge magnitude involving money of 42000 employees of three Electricity Corporations who had invested it with a hope that they would get good return on it at the time they would need money. Trust has been breached in criminal conspiracy by the accused which has resulted huge loss to the two Trusts resultantly to the employees. The accused is an influential person. The money trail is yet to be completely discovered and, therefore, at this stage, the accused-applicant cannot be released on bail.
The trial court in a well considered order has rejected the bail application of the accused applicant - the bail application of the accused-applicant is rejected.
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2020 (4) TMI 915
Entitlement to deputation allowance for the period in service with the NDRF - Jurisdiction of High Court to grant relief.
Entitlement to deputation allowance for the period in service with the NDRF - HELD THAT:- A reading of the judgment in Prasar Bharti v. Amarjeet Singh [2007 (2) TMI 727 - SUPREME COURT] makes it clear that deputation envisages the assignment of an employee of one department/cadre/organisation to another department/cadre/organisation in the public interest. It is also clear that normally deputation also involves the consent of the employee. In Prasar Bharti case, this Court also held that on transfer of the services in the case of deputation, the control with regard to the employee would also determine whether such employee was on deputation or not.
Till 11.09.2009 the Respondent continued to be under the control of his parent organisation i.e. CISF and was also getting his pay and allowances from the said authority. Therefore, though he as a member of his Battalion may have been serving the NDRF, it cannot be said that he was on deputation to the NDRF. His organisation had agreed to deploy some of its Battalions with the NDRF. However, the administrative and disciplinary control over such employees remained with the CISF. The emoluments were also paid by the CISF and, therefore, it cannot be said that the NDRF was the employer or master of the Respondent. In such circumstances, up to 10.09.2009 the Respondent could not be said to be on deputation even though as per the Rules he may have been described as a deputanionist - However, on 11.09.2009, the date when the Ministry of Home Affairs conferred the command and control of the Battalions drawn from the various Central Para Military Forces with the Director General, NDRF and from which date these personnel drew their pay from the NDRF they would be deemed to be on deputation with the NDRF.
Jurisdiction of High Court to grant relief - HELD THAT:- The High Court exceeded its jurisdiction in matters like this. The High Court exercise its jurisdiction only over State(s) of which it is the High Court. It has no jurisdiction for the rest of the country. Matters like the present may be pending in various parts of the country. In the present case, matter had been decided by the Delhi High Court but some other High Court may or may not have taken different view. The High Court of Madras could not have passed such order. It has virtually usurped the jurisdiction of other High Courts in the country. It is true that sometimes this Court has ordered that all similarly situated employees may be granted similar relief but the High Court does not have the benefit of exercising the power Under Article 142 of the Constitution - The High Court may be justified in passing such an order when it only affects the employees of the State falling within its jurisdiction but, it could not have passed such an order in the case of employees where pan India repercussions would be involved.
It is directed that the Respondent shall be paid deputation allowance with effect from 11.09.2009 till 07.10.2011 when he was relieved from service - appeal allowed in part.
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2020 (4) TMI 914
HUF - whether the property is a joint property or the property of HUF? - principles of estoppel - will executed by Hari Ram in connection with the disputed property is Null and void - HELD THAT:- It is clear that not only jointness of the family has to be proved but burden lies upon the person alleging existence of a joint family to prove that the property belongs to the joint Hindu family unless there is material on record to show that the property is the nucleus of the joint Hindu family or that it was purchased through funds coming out of this nucleus. This has not been proved in the present case. Merely because the business is joint would not raise the presumption that there is a Joint Hindu Family.
The doctrine of election is a facet of law of estoppel. A party cannot blow hot and blow cold at the same time. Any party which takes advantage of any instrument must accept all that is mentioned in the said document.
As far as the lands described in 9(2)(f) and 9(2)(g) are concerned these lands were taken on lease by Nathu Lal, S/o Hari Ram from the zamindar of Ashok Nagar. According to the plaintiffs these lands were also lands of the joint family but that version cannot be believed in view of the patta granted in favour of Nathu Lal. It may be true that consideration for grant of patta may have been paid but there is no material on record to show that this payment was made out of the funds of HUF. It may be pertinent to mention here that the plaintiffs have alleged that in 1951 Nathu Lal was a minor and the amount was paid by Hari Ram. However, no proof has been led in this regard. In fact, from the material on record it appears that Nathu Lal was about 21 years old at that time.
There are no merit in the appeals filed by the appellant(s) and the same are dismissed.
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2020 (4) TMI 913
TP Adjustment - comparable selection - functional dissimilarity - HELD THAT:- CG Vak Software & Exports Ltd. company excluded as it is consistent loss making company - We noted that before the DRP the assessee stated that this comparable is having profit in the current year at 7.14% and can be considered as a comparable. It was also stated that merely because a company is incurring losses, it would not lose its status as a comparable and that losses and incidental of business which is at par with the profit. However, the contention of assessee was not accepted by DRP by taking view that those companies with fluctuating margins are to be excluded.
As this comparable is not consistent loss making as it had made profit in the relevant assessment year, hence, we direct the TPO/AO to include this comparable in the final set of comparable.
Infosys Ltd. was excluded by tribunal from compatibility on the ground of that Infosys ltd is engaged in Software product and have huge turnover is not comparable to the assessee as a captive service provider to its associated enterprises, therefore, we direct the assessing officer to exclude this comparable from the final set of comparable.
Exclusion of Wipro Technology Services Ltd. as it had related party transaction. e Infochips Ltd has provided hardware maintenance and product, providing back officer services and have substantial inventory. Sasken Communication Technology Ltd is engaged in software product. And Persistent system Ltd has huge intangible, made investment in intellectual property right and huge turnover. Therefore, accepting the similar view we are also of the view that these comparable cannot be compared with captive service provider. Hence, we direct the AO/TPO to exclude these four comparable.
Zylog System Ltd. company is engaged in R&D activities, has a license fee and developed in house intangible. Thus, cannot be compared with captive service provider.
Thus we direct the TPO/AO to include CG Vak Software & Export Ltd and exclude Infosys Ltd, Wipro Technology Services Ltd., e Infochips Ltd, Sasken Communication Technology Ltd, Persistent system Ltd and Zylog System Ltd from final set of comparable and recompute the ALP afresh.
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2020 (4) TMI 912
Conviction for offences punishable Under Sections 120-B, 364A, 302, 201 read with Section 34 Indian Penal Code - death sentence - death in the company of the Accused - kidnapping - demand of ransom.
Whether A-1 was arrested on 1st September 2014 - HELD THAT:- The judgment in Abdul Subhan is not applicable to the facts of the present case for the reason that A-1 was not proved to be arrested on 1st September, 2014. In the reported judgment, the person who was said to have arrested the Accused prior to the actual date of arrest, was examined before the High Court. It was on the basis of the additional evidence recorded, the High Court observed "that the statement made by Punwan, Accused, in his confession to the effect that he was apprehended on 1st March, 1938 is very probably true". The IO in his statement before the High Court could not convince the Court that he had not arrested Punnu, Accused, till 6th March, 1938. But the facts in the present appeals does not lead to any inference of the arrest of A-1 on 1st September, 2014.
Whether Common intention was terminated before the demand of ransom and death of victim? - HELD THAT:- In the present appeals, the facts speak volumes about the common intention shared by both the Appellants. Both the Accused planned the kidnapping and executed it together. A-1 called Dharmendra Yadav (PW-24), even before the victim could be kidnapped to make sure that the parents of the child were not at home. A-2 is the one who picked up the child from the gate of the Apartment building. They were together till at least 18:33 hrs. whereas; the tower location of the mobile of A-2 was Vinoba Bhave Nagar till 19.39 hrs., which is the area of the House of A-1. The conspiracy never came to an end when A-2 called Dr. Chandak (PW-1) demanding ransom, which was the reason of kidnapping the boy. Thus, the facts prove that both the Accused had a common intention to kidnap the child.
Applicability of Section 106 of the Evidence Act - HELD THAT:- The prosecution has discharged the onus of proof beyond reasonable doubt. It was then for the Accused to rebut the presumption of any other intervening fact before the death of the victim. In fact, none of the prosecution witnesses have been cross-examined on that possibility at all.
Changing version of the prosecution case - HELD THAT:- The Judgments of this Court reported as Karanpura Development Co. Ltd. [1956 (4) TMI 77 - SUPREME COURT] and Sri Venkataramana Devaru [1957 (11) TMI 21 - SUPREME COURT] have been relied upon to argue that an argument of fact cannot be raised for the first time before this Court. The reliance on such judgments is not tenable. In both the Judgments, no fact sought to be raised in appeal before this Court, was pleaded in civil proceedings. The reference to such judgments is inappropriate. In the present appeals, the arguments raised by the prosecution are on the basis of evidence led and available on record.
Recovery of dead body at the instance of A-1 cannot be believed - HELD THAT:- It is wholly immaterial whether the death was caused before 18:00 hrs. or afterwards as both the Accused were seen with the victim together and the victim was in an inert condition. The injuries and the placement of the boulder/stone on the face of the victim was to hide the identity of the victim. As per Dr. Avinash Waghmode (PW-27), the injuries were perimortem i.e. when the vitals of the victim were functioning - In the present case, the dead body was lying in a concealed place and that there was no possible explanation on behalf of the Accused as to how the body came to be concealed at that particular place, when the prosecution evidence proves that the Accused were near the place of recovery of dead body almost at the probable time of death.
The effect of putting of incriminating evidence to the Accused Under Section 313 of the Code - HELD THAT:- In the present case, there is overwhelming evidence that shows the victim to be in company of the Accused at five different places from 16:00 hrs. to 17:30 hrs - 18.00 hrs. Thereafter, the burden shifts to the Accused to explain the circumstances which occurred thereafter till the time of the recovery of dead body. There is no evidence to create a doubt on the prosecution version that somebody else had access to the victim before he died. The fact that the child was carried on shoulder by A-1 shows that the child was not in a position to move and was done to death in that condition which is corroborated by medical evidence of injuries being perimortem.
Sentence - it is argued that this Court has imposed a higher standard of proof for the purposes of a death sentence over and above "beyond reasonable doubt" necessary for criminal conviction similar to "residual doubt" - HELD THAT:- The argument is that since the Accused are young, aged about 19 years, and have no criminal antecedents, the sentence of death imposed upon them is not warranted. It is argued that A-1 surrendered at the first available opportunity and he was fully cooperative with the investigation, therefore, there are the mitigating circumstances to absolve them from noose - there are no merit in the argument that being young or having no criminal antecedents are mitigating circumstances. What is required to be examined is whether there is a possibility of rehabilitation and whether it is the rarest of the rare case where the collective conscience of the community is so shocked that it will expect the holders of judicial power to inflict death penalty irrespective of their personal opinion as regards desirability or otherwise of retaining death penalty. The manner of commission of murder when committed in an extremely brutal, grotesque, diabolical, revolting or dastardly manner are aggravating factors.
The motive of the Accused to take life was to become rich by not doing hard work but by demanding ransom after kidnapping a young, innocent boy of 8 years. Thus, having considered all the circumstances and facts on record, we are of the considered view that the present case falls short of the "rarest of rare" cases where a death sentence alone deserves to be awarded to the Appellants. It appears to us in light of all cumulative circumstances that the cause of justice will be effectively served by invoking the concept of special sentencing as evolved by this Court in the cases of Swamy Shraddananda and Sriharan. Thus, the present appeals succeed in part.
The Judgment and Order passed by the learned Trial Court and confirmed by the High Court convicting the Accused for the offences punishable Under Sections 302 and 364A read with Section 34 Indian Penal Code is hereby confirmed - appeals stand dismissed except modification in respect of sentence.
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2020 (4) TMI 911
Deduction of Capital Expenditure on R&D u/s 35(2AB) - whether the deduction is allowable only from 09.03.2009, the date on which the assessee received letter from DSIR or not? - HELD THAT:- A going concern basis basically means that an entity will remain in business in the near future. We find that the above provisions cannot be applied to the facts of the instant case as the approval u/s 35(2AB) in respect of the R&D unit has been granted by the DSIR w.e.f. 01.07.2008 as consequence to the approval granted to EML.
In conclusion, having gone through the entire facts of the instant case, we hold that the assessee is eligible for deduction u/s 35(2AB) from 01.07.2008, the date on which the EML divested the CV unit and the R&D facility.
Having said so, we also find that the ld. CIT (A) has given a categorical finding that the AO has disallowed total R&D expenses incurred by the assessee during the year including expenses that have incurred after the date of DSIR approval letter i.e. 09.03.2009.
We also find that the AO has observed that deduction u/s 35 has been claimed under the head “intangible assets”.
Core issue of examination of the expenditure has not been resorted as the revenue held that the assessee was not eligible for the deduction u/s 35(2AB) for expenses incurred prior to that date. Hence, in order to meet the ends of justice, a fair opportunity has to be allowed to both the parties, it is hereby directed to submit the details of capital expenditure and revenue expenditure for the entire period from 01.07.2008 to 31.03.2009 so as to avail the correct deduction as per the principle laid down in this order.
Addition u/s 14A r.w.r. 8D - assessee has earned exempt dividend income - HELD THAT:- Since no interest bearing funds have been utilized in investment and the revenue could not prove any expenses incurred, the addition made by the AO is hereby directed to be deleted.
Disallowance of Expenses - deduction denied on the grounds that the assessee did not furnish the copies of ITR of VIPL to prove that these expenses which were booked provisionally have not been claimed and also proof of payment against the aforesaid provision by the assessee during the year have not been submitted - CIT (A) after going through the ITRs gave a categorical finding that the deduction on account of the provisions has not been claimed by the assessee and also held that the assessee had discharged the liabilities against the provisions received from VIPL - HELD THAT:- CIT (A) has given this categorical finding after due verification of ledger and books of accounts. Since, the facts are not disputed by both the parties and the issue is purely based on the facts which have been verified by the ld. CIT (A) and since no legal issue is involved we decline to interfere with the well reasoned order of the Ld. CIT(A).
Disallowance of Bad Debts acquired from predecessor-in-interest - assessee has received the business from its predecessor EML by way of demerger - AO disallowed the amount on the ground that the said amount has not been offered to tax by the assessee - whether the amounts offered by the earlier company and duly offered to tax turned bad at a later date be allowed as per the provisions of Section 36(1)(vii) r.w.s. 36(2)? - CIT(A) held that the corresponding amount of the debts was offered as income by the predecessor assessee - HELD THAT:- The assessee has received the business from its predecessor EML by way of demerger wherein the EML sold the vehicles on credit and the said amounts were offered to tax in the earlier years. The question here is not about the debt becoming bad but whether the amounts offered by the earlier company and duly offered to tax turned bad at a later date be allowed as per the provisions of Section 36(1)(vii) r.w.s. 36(2) of the Income Tax Act, 1961.
Reliance is placed on the judgment of CIT Vs T. V. Rao [1985 (7) TMI 2 - SUPREME COURT] - Owing to it we hereby hold that the bad debts written off as irrecoverable in the books of accounts of the assessee in relation to the debts acquired on purchase of business which has been offered as income by the predecessor company is allowable u/s 36(2).
Disallowance of Training Expenses - assessee has claimed expenses on account of “service training school” under the head “selling and distribution expenses” - HELD THAT:- We find that the assessee is in the business of selling commercial vehicles wherein training of the drivers and other technicians is a business expediency. Owing to the new recruitment as well as job rotation, offboarding and attrition of employees, the training is taken to be an ongoing process for any industry.
AO observation that it goes to improve the brand building, if at all, is collateral benefit. There is no provision in the Income Tax Act for apportioning this expenditure over a period of three years as invoked by the AO. Section 37(1) mandates that any expenditure has to be allowed in entirety if it is spent in connection with business of the assessee. There cannot be any formula basis, criteria adopted by the AO while disallowing 2/3rd of such expenditure. At the same time, this expenditure cannot be treated as capital expenditure too - disallowance made by the AO is legally not tenable.
Revenue appeal dismissed.
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2020 (4) TMI 910
Investigation of an IAS by an CBI - principal ground canvassed by the Appellant before the High Court was that he being an officer of the Indian Administrative Service (IAS) employed in connection with the affairs of the Government of Bihar as District Magistrate at Aurangabad District (State of Bihar) could not be subjected to investigation by the CBI without the prior consent of the State.
Whether the proviso in the stated notification dated 19.2.1996 would come in the way of the officials of DSPE to register FIR and carry on investigation of specified offences committed within the Union Territory (National Capital Territory of Delhi), to which the 1946 Act applies?
HELD THAT:- The High Court, in the present case, after analysing the material on record clearly found that BRBCL was a Government undertaking and the project undertaken by it was funded by the Central Government and that it had its registered office in the Union Territory of Delhi (National Capital Territory of Delhi), where the offence of defrauding the undertaking (BRBCL) and siphoning of its funds was allegedly committed. We see no reason to deviate from the opinion so recorded by the High Court.
The alleged role played by the Appellant may be a means to facilitate the commission of crime of defrauding and siphoning of funds. The FIR in that sense is not limited to an offence of manipulation of official records of the State of Bihar as such, but is about the means used by the different actors who were party to the conspiracy in defrauding the Government of India undertaking (BRBCL) and siphoning of its funds.
Indisputably, the registered office of BRBCL is within the jurisdiction of Union Territory of Delhi (National Capital Territory of Delhi) and allegedly the offence has been committed at Delhi, for which reason the Delhi Court will have jurisdiction to take cognizance thereof. To put it differently, the offence in question has been committed outside the State of Bihar. The investigation of the stated offence may incidentally transcend to the territory of State of Bihar because of the acts of commission and omission of the Appellant who is resident of that State and employed in connection with the affairs of the State of Bihar. That, however, cannot come in the way of special police force (DSPE) from investigating the offence committed at Delhi and has been so registered by it and is being investigated. Had it been an offence limited to manipulation of official record of the State and involvement of officials of the State of Bihar, it would have been a different matter - If the State police has had no jurisdiction to investigate the offence in question, as registered, then, seeking consent of the State in respect of such offence does not arise. Any other approach would render the special provisions of the 1946 Act otiose.
Suffice it to observe that the proviso contained in the stated notification dated 19.2.1996 cannot be the basis to disempower the special police force/DSPE (CBI) from registering the offence committed at Delhi to defraud the Government of India undertaking (BRBCL) and siphoning of its funds and having its registered office at Delhi. Allegedly, the stated offence has been committed at Delhi. If so, the Delhi Courts will have jurisdiction to take cognizance thereof. The State police (State of Bihar) cannot investigate the specified offences committed and accomplished at Delhi, being outside the territory of the State of Bihar - the consent of the State Under Section 6 cannot come in the way or constrict the jurisdiction of the special police force constituted Under Section 2 to investigate specified offences Under Section 3 of the 1946 Act committed within the Union Territories. Indeed, when the Court of competent jurisdiction proceeds to take cognizance of offence and particularly against the Appellant, it may consider the question of necessity of a prior sanction of the State of Bihar qua its official(s) as may be required by law. That question can be considered on its own merits in accordance with law.
Appeal dismissed.
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2020 (4) TMI 909
TP Adjustment - Comparable selection - decision of TPO & DRP in adopting the threshold limit of 25% for “Related Party Transaction” filter as against the limit of 10% adopted by the assessee - HELD THAT:- We notice that the Ld DRP has given its decision of adoption of RPT filter, which is not the objection of the assessee.
With regard to the claim for Capacity Utilisation Adjustment, the Ld DRP, has expressed that the assessee has not raised this objection before the TPO and accordingly declined to adjudicate this ground. With regard to the substitution of PLI from OP/OR to OP/OC, the assessee had raised objection in ground 8.1 urged before Ld DRP. However, the Ld DRP has not adjudicated the same.
We notice that the assessee has furnished details of the companies, in its paper book. We notice that the Ld DRP has rejected the claim of the assessee by making general observations, i.e., without addressing specific grounds urged in respect of each of the companies. We have noticed that the assessee, in its Transfer Pricing study, has made adjustment towards under utilization of capacity. However, the said adjustment was not given by the TPO. Hence, we are of the view that the Ld DRP was not justified in declining to adjudicate this claim of the assessee. As noticed earlier, the Ld DRP has not adjudicated the issue relating to selection of PLI.
We are of the view that the Ld DRP has passed a non-speaking order. In this view of the matter, we are of the opinion that all the issues relating to Transfer pricing adjustment need to be restored to the file of Ld DRP/AO for adjudicating all the objections of the assessee by a speaking order. Accordingly, we set aside the Transfer pricing adjustment made in the final assessment order and restore all the issues relating there to the file of AO/DRP with the direction to the Ld DRP to pass a speaking order.
Disallowance made u/s 40(a)(ia) of the Act in respect of year end provisions made - HELD THAT:- Before us, the ld A.R argued that the yearend provisions are required to be made as per accounting principles on estimated basis. Assessee could not deduct tax therefrom, since the payees are not known. However, we notice that the assessee has stated before Ld DRP that the provisions have been made for payment to contractors, subcontractors, professional fees, royalty, rent and commission. Hence the payees should be known to the assessee. Accordingly, we are of the view that the assessee should have deducted tax at source, when the payees are known. Accordingly we confirm the addition made by the AO u/s 40(a)(ia) of the Act.
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2020 (4) TMI 908
Seeking that the national lock-down period ought to be taken into consideration while giving effect to the termination of the Toll Tax Collection Agreement dated 28th September, 2017 - HELD THAT:- A perusal of the letter dated 4th April, 2020 clearly shows that the SDMC had extended the effective date of termination in view of the 21 day national lock down - A perusal of the letter dated 4th April, 2020 shows that despite the defaults of the Petitioner, the effective date of the termination was postponed by the SDMC itself, due to the national lock-down. Since the national lock down has now been extended for a further period, the effective date of termination would, by the rationale of the above letter, be required to be extended for the further period of lockdown. In any event, a perusal of the NIT dated 6th April, 2020 shows that the opening of the tender is to take place on 22nd April, 2020.
While it is made clear that the SDMC would be permitted to go ahead with its NIT and finalize the tender, it is clarified that the effective date of termination shall stand postponed for a further period of 19 days. If the lock down is lifted with effect from 4th May, 2020, all the amounts which are collected upon lifting of the lockdown, by the Petitioner, by operating under the Toll Tax agreement shall be deposited with the SDMC. The effective date of termination is extended by a period of 19 days from 5th May, 2020 i.e., till 24th May, 2020. The SDMC shall, however, ensure that any new arrangement and award of tender in favour of any third party would not be effective till 24th May, 2020.
Application disposed off.
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2020 (4) TMI 907
Bequeathing of properties by the deceased Sangappa under the will or not - genuineness of the Will - Whether the trial Court was justified in holding the will dated 20.5.1991 executed by Sangappa as genuine or not? - HELD THAT:- The Will being a rather solemn document that comes into operation after the death of the testator, special provisions are made in the statutes for making of a Will and for its proof in a Court of law. Section 59 of the Succession Act provides that every person of sound mind, not being a minor, may dispose of his property by Will. A Will or any portion of a Will, the making of which has been caused by fraud or coercion or by any such importunity that has taken away the free agency of the testator, is declared to be void under Section 61 of the Succession Act; and further, Section 62 of the Succession Act enables the maker of a Will to make or alter the same at any time when he is competent to dispose of his property by Will.
Elaborate provisions have been made in Chapter VI of the Succession Act, in Sections 74 to 111, for construction of Wills which, in their sum and substance, make the intention of legislature clear that any irrelevant misdescription or error is not to operate against the Will; and approach has to be to give effect to a Will once it is found to have been executed in the sound state of mind by the testator while exercising his own free will. However, when the Will is surrounded by suspicious circumstances, the Court would expect that the legitimate suspicion should be removed before the document in question is accepted as the last Will of the testator.
Much emphasis is laid on behalf of the appellants on the submissions that execution of the Will in accordance with the requirements of Section 63 of the Succession Act and Section 68 of the Evidence Act has been duly established on record with the testimony of the attesting witnesses as also the witness with whom the Will along with the handwritten draft of the Will had been deposited by the testator. The submissions so made on behalf of the appellants cannot be accepted for the reason that mere proof of the document in accordance with the requirements of Section 68 of the Evidence Act is not final and conclusive for acceptance of a document as a Will. When suspicious circumstances exist and the suspicions have not been removed, the document in question cannot be accepted as a Will.
The Trial Court had largely been swayed by the fact that the deceased Sangappa was not inclined to give any property to the defendant No. 1 and his family as had been the case of the earlier Will executed by him in the year 1974. Admittedly, the said Will of the year 1974 was cancelled by Shri Sangappa on 26.09.1990. He perished in the vehicular accident on 20.05.1991. Whether he intended to bequeath any property to the defendants or not is hardly of any bearing in relation to the suspicious circumstances - the document in question falls flat at the very first question indicated in the case of H. Venkatachala Iyenger [1958 (11) TMI 46 - SUPREME COURT] that is, as to whether the testator signed the Will in question. The answer to this question is only in the negative. This is apart from the fact that the document in question, propounded as a Will, is non-compliant with the requirements of clause (b) of Section 63 of the Succession Act.
The High Court was right in reversing the decision of the Trial Court and in holding that the contested Will was not a genuine document.
Whether remand was called for? - Order XLI Rule 23A CPC - HELD THAT:- The procedure relating to appeals from original decrees (usually referred to as ‘regular first appeal’) is provided in Order XLI of the Code of Civil Procedure, 1908 and therein, various provisions relating to hearing of an appeal, remand of case, remitting of issues for trial, production of additional evidence in Appellate Court etc. are contained in Rules 16 to 29 under the sub-heading ‘Procedure on hearing’ - Rule 23A came to be inserted in Order XLI CPC by way of the Code of Civil Procedure (Amendment) Act, 1976. Prior to this amendment, it was generally accepted by the Courts that although under Rule 23, an order of remand could be made only on reversal of a decree disposing of suit on a preliminary point but, the Appellate Court has the inherent power of remanding a case where it was considered necessary to do so in the interest of justice. Some of the High Courts had made similar provisions by way of their respective amendments. Insertion of Rule 23A in Order XLI by the Amending Act of 1976 makes it explicit that even when the suit has been disposed of otherwise than on a preliminary point and the decree is reversed in appeal, the Appellate Court shall have the power of remand, if a re-trial is considered necessary.
A conjoint reading of Rules 23, 23A and 24 of Order XLI brings forth the scope as also contours of the powers of remand that when the available evidence is sufficient to dispose of the matter, the proper course for an Appellate Court is to follow the mandate of Rule 24 of Order XLI CPC and to determine the suit finally. It is only in such cases where the decree in challenge is reversed in appeal and a re-trial is considered necessary that the Appellate Court shall adopt the course of remanding the case - An order of remand only on the ground that the points touching the appreciation of evidence were not dealt with by the Trial Court may not be considered proper in a given case because the First Appellate Court itself is possessed of jurisdiction to enter into facts and appreciate the evidence. There could, of course, be several eventualities which may justify an order of remand or where remand would be rather necessary depending on the facts and the given set of circumstances of a case.
The present case had clearly been the one where the parties had adduced all their evidence, whatever they wished to; and it had not been the case of the plaintiff-appellants that they were denied any opportunity to produce any particular evidence or if the trial was vitiated because of any alike reason - The High Court has meticulously examined the same evidence and the same circumstances and has come to a different conclusion that appears to be sound and plausible, and does not appear suffering from any infirmity. There was no reason or occasion for the High Court to consider remanding the case to the Trial Court. The contention in this regard is required to be, and is, rejected.
The High Court has rightly interfered with the decision of the Trial Court and has rightly held that the document in question cannot be accepted as the genuine Will of the deceased Sangappa; and there was no reason for the High Court to remand the case to the Trial Court.
Appeal dismissed.
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2020 (4) TMI 906
Difference in receipts as per the bank account of the assessee and receipts as per its books of account - Addition on account of amount credited in bank account of the assessee in excess of receipts as per' books of account and also allowing the assessee appeal against the rejection of the books of accounts of the assessee -- As per CIT-A addition is not sustainable in view of documentary evidences already available on record to substantiate the said difference and AO has failed to make any sincere effort regarding the same and made addition only on the basis of doubt, suspicion, conjecture or surmises without affording proper opportunity of being heard to the appellant which is in violation of principles of natural justice - HELD THAT:- Revenue has failed to controvert the findings of CIT(A) in this regard. We find no merit in the issue raised vide ground of appeal no. 1. Before parting, we may also point out that no additional evidence was produced before the CIT(A) and hence there is no merit in the additional ground of appeal raised by the Revenue.
Difference in brokers’ accounts and party wise gross receipts - HELD THAT:- CIT(A) deleted the said addition made by the AO observing that the said difference in party wise detail and brokers’ account is due to Margin Money and STT. In view of the findings of the CIT(A) with regard to the aforesaid addition, we find no merit in the grounds of appeal no. 2 raised by the Revenue and the same is dismissed.
Non deduction of TDS on professional charges - HELD THAT:- CIT(A) noted that the assessee had not claimed the said professional expenses in its profit & loss account and had capitalized the same under work in progress i.e. “Building under Construction” in fixed assets schedule. The CIT(A) thus deleted the addition. We find merit in theorder of the CIT(A) and uphold that the provisions of section 40(a)(ia) of the Act are attracted only if expenses are claimed in the profit & loss account and not when the same are capitalized.
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- CIT(A) noted that the assessee had made investment only in share application money as on 31.03.2011 and hence there was no merit in invoking the provisions of section 14A of the Act. We uphold the order of CIT(A) in this regard and dismiss the ground of appeal no. 3 raised by the Revenue.
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2020 (4) TMI 905
Profiteering - construction service - it is alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) to him by way of commensurate reduction in price of the shop - contravention of provisions of section 171 of CGST Act - HELD THAT:- It is revealed that the Respondent is in the Real Estate business and the DGAP's Report is with regard to his project "U Faria" situated at C-04A, Sector-16B, Greater Noida, Uttar Pradesh under which he has constructed 190 commercial shops out of which he has sold 178 shops. It is also revealed that the Applicant No. 1 had filed a complaint with the Standing Committee on 29.11.2018 alleging that the Respondent had not passed on the benefit of additional ITC which he has availed after coming in to force of the GST w.e.f. 01.07.2017, in respect of Shop No. G-122 which he has purchased from the Respondent. The above complaint was examined by the Standing Committee on Anti-Profiteering in its meeting held on 11.03.2019 and was forwarded to the DGAP for detailed investigation under Rule 129 (I) of the above Rules.
It is clear that an amount of Rs. 1,77,50,478/- of ITC has been blocked by the State GST authorities as is evident from Annexure-2 mentioned above. Therefore, the Respondent cannot utilize the above amount for discharging his GST output liability. The Respondent can accordingly, not be said to have obtained the additional benefit of above amount of ITC during the post-GST period. Therefore, the ratio of ITC to the turnover computed by the DGAP during the post-GST period vide Table-B cannot be considered for computation of the profiteered amount until the above amount of ITC is made available to the Respondent for utilization. Therefore, the amount of Rs. 24, 78,383/- computed as the profiteered amount by the DGAP as per Annexure-14 cannot be determined as the profiteered amount in terms of Section 171 (1) of the above Act read with Rule 133 (1) of the CGST Rules, 2017.
As per the provisions of Rule 133 (1) of the CGST Rules, 2017 this order was required to be passed within a period of 6 months from the date of receipt of the Report from the DGAP under Rule 129 (6) of the above Rules. Since, the present Report has been received by this Authority on 25.09.2019 the order was to be passed on or before 24.03.2020. However, due to prevalent pandemic of COVI 19 in the Country this order could not be passed on or before the above date due to force majeure. Accordingly, this order is being passed today in terms of the Notification No. 35/2020-Central Tax dated 03.04.2020 issued by the Government of India, Ministry of Finance (Department of Revenue), Central Board of Indirect Taxes & Customs under Section 168 A of the CGST Act, 2017
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2020 (4) TMI 904
Violation of Fundamental Rights - rights of minority section students - Procedure for selection to MBBS course - Validity of notifications dated 21.12.2010 issued by Medical Council of India (MCI) and other two notifications dated 31.5.2012, issued by Dental Council of India (DCI) - single eligibility-cum-entrance examination, namely, National Eligibility-cum-Entrance Test for admission to MBBS course in each academic year - whether by providing centralised examination system - NEET for admission to MBBS, PG, BDS and MDS by virtue of the provisions made in the Act and Regulations, there is violation of fundamental rights guaranteed Under Articles 19(1)(g), 25, 26, 29(1) and 30 of the Constitution of India?
HELD THAT:- There is no doubt as to the concept of limited Government and least interference is welcomed, but in which field and to what extent balancing with the larger public and national interest is required. The individual autonomy, rights, and obligations are to be free from official interference except where the rational basis for intrusion exists. The Constitution provides a limitation on the power of the State to interfere with life, liberty, and rights, however, the concept of limited government cannot be extended to a level when it defeats the very national interest. The maladies with which professional education suffers in this country are writ large. The regulatory framework created by the MCI/DCI is concomitant of conditions, affiliation and recognition, and providing central examination in the form of NEET cannot be said to be violative of the rights Under Articles 19(1)(g) and 30. The regulatory framework is not restrictive, but caters to the effective enjoyment of the rights conferred under the aforesaid provisions.
The prescription of NEET is definitely in order to improve the medical education, co-related to the improvement of public health, thus, it is a step-in furtherance of the duty of the State enshrined in the Directive Principles of the State Policy contained in Article 47 of the Constitution of India. Similarly, Article 46 aims at promotion of educational and economic interests of Scheduled Castes, Scheduled Tribes, and other weaker sections. By prescription of one equivalence examination of NEET, the interest of their merit is also equally protected and its aims of preventing various malpractices, which crept into system and prevent economic exploitation by selling seats with which malady the professional medical education system suffered. Article 51A(j) deals with the duty to strive towards excellence in all spheres of individual and collective activity so that the nation constantly rises to higher levels of endeavour and achievement - there is no violation of the provisions as argued by Appellants, rather action is in furtherance of the constitutional aims and directions to achieve intendment of Article 51A(j) and is in the national interest.
In view of the law laid down in T.M.A. Pai Foundation [2002 (10) TMI 739 - SUPREME COURT], it is apparent that NEET/common entrance test is a devise to standardise and computing equivalence between different kinds of qualifications. It does not interfere with the rights of the unaided minority institutions as it has been imposed in national interest considering the malpractices of granting illegal admission by virtually selling the seats in derogation to rights of meritorious students - The charitable activity of education became a saleable commodity and prerogative of wealthy persons and poor students were forced to get education funded from Banks making it difficult for them to come out of tentacular octave of interest. They are exploited in bud before they bloom into flower. The ill-reputation developed by MCI forced to change its entire structure. The national interest requires further improvement in the system to eradicate evils from the system. The situation is still grim and require to be dealt with firm hand and steely determination.
Thus, it is apparent that the provisions in question which have been incorporated in the Act relating to Medical/Dental education, the Government, MCI and DCI cannot be said to be an invasion of the fundamental rights. The intendment is to ensure fairness in the selection, recognition of merit, and the interests of the students. In the national interest, educational institutions are basically for a charitable purpose. By and large, at present education is devoid of its real character of charity, it has become a commodity - To weed out evils from the system, which were eating away fairness in admission process, defeating merit and aspiration of the common incumbent with no means, the State has the right to frame regulatory regime for aided/unaided minority/private institutions as mandated by Directives Principles, Articles 14 and 21 of the Constitution.
In St. Stephen's College v. University of Delhi [1991 (12) TMI 276 - SUPREME COURT], it was held that there has to be balancing of interest of rights of minorities. It was observed that 50% of the annual admission has to be given to the members of communities other than the minority community on the basis of merit. Regulations that serve the interest in standards of education amongst the recognised institutions could validly be made. Such general patterns and standards are the need, and such Regulation shall not have the effect of depriving the right of minorities to educate their children in their own institution.
The uniform Entrance Examination cannot be said to be unreasonable regulatory framework. Considering the terms and conditions for affiliation and recognition for professional medical and such other professional courses are binding, and no relaxation can be permitted in the conditions - rights Under Articles 19(1)(g) and 30 read with Articles 25, 26 and 29(1) of the Constitution of India do not come in the way of securing transparency and recognition of merits in the matter of admissions. It is open to regulating the course of study, qualifications for ensuring educational standards. It is open to imposing reasonable restrictions in the national and public interest. The rights Under Article 19(1)(g) are not absolute and are subject to reasonable restriction in the interest of the student's community to promote merit, recognition of excellence, and to curb the malpractices. Uniform Entrance Test qualifies the test of proportionality and is reasonable. The same is intended to check several maladies which crept into medical education, to prevent capitation fee by admitting students which are lower in merit and to prevent exploitation, profiteering, and commercialisation of education. The institution has to be a capable vehicle of education. The minority institutions are equally bound to comply with the conditions imposed under the relevant Acts and Regulations to enjoy affiliation and recognition, which apply to all institutions.
Thus, there is no violation of the rights of the unaided/aided minority to administer institutions Under Articles 19(1) (g) and 30 read with Articles 25, 26 and 29(1) of the Constitution of India by prescribing the uniform examination of NEET for admissions in the graduate and postgraduate professional courses of medical as well as dental science. The provisions of the Act and Regulation cannot be said to be ultra vires or taking away the rights guaranteed under the Constitution of India Under Article 30(1) read with Articles 19(1)(g), 14, 25, 26 and 29(1).
Petition disposed off.
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2020 (4) TMI 903
Profiteering - supply of Stayfree Sanitary Napkins - it is alleged that the Respondent had not passed on the benefit of tax reduction from 12% to Nil, by way of commensurate reduction in price - contravention of provisions of section 171 of CGST Act - HELD THAT:- It is clear from the Report dated 17.12.2019 filed by the DGAP that the above three issues mentioned in the Paras supra are required to be further investigated by the DGAP and only then this Authority can determine the profiteered amount as per the provisions of Section 171 of the CGST Act, 2017 read with Rule 133 of the CGST Rules, 2017. Accordingly, this Authority directs the DGAP to carry out further investigation under Rule 133 (4) of the above Rules, on the following issues:-
(i) The issue of the common input tax credit shall be investigated by the DGAP and a detailed Report shall be submitted accordingly.
(ii) The claim of reversal of common credit of Rs. 13,07,118/- made by the Respondent, shall be verified by the DGAP as per the provisions of Section 17 (2) of the CGST Act, 2017 read with Rule 42 of CGST Rules, 2017 and his findings shall be recorded in the Report.
(iii) The issue of benefit of discounts shall be examined by the DGAP in terms of Section 15 (3) of the CGST Act, 2017 as per the details submitted by the Respondent and a detailed Report shall be filed by him in this regard.
(iv) The profiteered amount shall be again computed by the DGAP on the closing and the fresh stocks separately and mentioned in his Report.
Investigation on the above issues shall be completed by the DGAP within a period of 3 months from the date of passing of this order and Report submitted under Rule 129 (6) of the CGST Rules, 2017. The Respondent is also directed to extend full co-operation to the DGAP during the course of the investigation - As per the provisions of Rule 133 (1) of the CGST Rules, 2017 this order was required to be passed within a period of 6 months from the date of receipt of the Report from the DGAP under Rule 129 (6) of the above Rules.
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2020 (4) TMI 902
Limitation of Liability - liability to third parties - Whether Dr. Alpesh Gandhi could have been said to have been in the employ of the Respondent No. 3 on the date of the accident, as a result of which the limitation of liability provision in favour of the Respondent No. 1 as set out would kick in? - HELD THAT:- The High Court held in the impugned judgment that as additional premium had been paid so as to attract the applicability of IMT-5, in any case the Insurance Company would be liable under the policy to pay compensation in the case of death to unnamed passengers other than the insured and his paid driver or cleaner, Dr. Alpesh Gandhi being one such unnamed passenger. This was done on the footing that the exception to IMT-5 was that a person in the employ of the insured coming within the scope of the Workmen's Compensation Act, 1923 is excluded from the cover, but that as Dr. Alpesh Gandhi did not come within the scope of the Workmen's Compensation Act, compensation payable due to his death in a motor accident would be covered by IMT-5.
Whether the expression "employment" is to be construed widely or narrowly - if widely construed, a person may be said to "employed" by an employer even if he is not a regular employee of the employer? - HELD THAT:- The wider meaning that has been canvassed for by the insurance company cannot possibly be given, given the language immediately before, namely, "in the course of", thereby indicating that the "employment" can only be that of a person regularly employed by the employer. Even otherwise, assuming that there is an ambiguity or doubt, the contra proferentum Rule referred to hereinabove, must be applied, thus making it clear that such "employment" refers only to regular employees of the Institute, which, as we have seen hereinabove, Dr. Alpesh Gandhi was certainly not.
Appeal allowed.
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2020 (4) TMI 901
Revision u/s 263 by CIT - assessee company has not included the financials of Bhilai in the audited financial statements prepared for the AY 2013-14 - As submitted that the Bhilai unit of the assessee company was under control of Sh. Sunil Aggarwal, younger brother of Sh. Anil Aggarwal. Since, Sh. Sunil Aggarwal had obtained restrain order from CLB, the assessee company managed by Sh. Anil Aggrawal was not allowed to interfere with functioning of the Bhilai Unit. Therefore, the assessee company was not having financial details of the said unit - HELD THAT:- Admittedly, the assessee has its unit in Bhillai and the assessee has not included the financials of its Bhilai unit in the audit financial statements prepared by it for the AY 2013-14 due to alleged dispute between the promoters. As pointed out by the CIT, the AO issued notice u/s 133 (6) of the Act for obtaining financial statements of Bhilai unit from the other promoter of the assessee company. However, no details were received by the AO. We further notice that the AO has not mentioned any reason for not making any addition in respect of Bhilai unit.
As pointed out by the Ld. counsel, addition of 5% of the turnover made from the AY 2004-05 to 2007-08 and 2010-11 to 2012-13, however in the assessment year under consideration, the AO has not made any addition whereas in the assessment year 2014-15 and 2015-16 the AO had made ad-hoc addition. AO has not given any reason in the assessment order or even not discussed about the financial statements of Bhilai unit which shows that the AO has failed to exercise due diligence to determine the income arising from the operations of assessee’s company at its Bhilai unit.
Since, the AO has passed the assessment order without conducting proper enquiry in respect of Bhilai Unit, the same is erroneous as well as prejudicial to the interest of the revenue. As has been laid down by the Hon’ble Supreme Court in the case of Malabar Industries Company Ltd. vs. Commissioner of Income Tax [2000 (2) TMI 10 - SUPREME COURT], if due to an erroneous order of the AO revenue is losing tax lawfully payable by the assessee, the order passed by the AO is prejudicial to the interest of the revenue. Therefore, in our considered view, since the order passed by the AO is erroneous as well as prejudicial to the interest of the revenue, the Ld. Pr. CIT has rightly revised the assessment order passed by the AO. - Decided against assessee.
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2020 (4) TMI 900
Addition u/s 69C - telescoping of the said addition out of the available of funds with assessee - assessee is developing a township known as Ensara Metropark at Nagpur. The project was in progress during the year and the entire cost incurred was shown as work in progress - HELD THAT:- In this case the cash generated during the year out of over invoicing was ₹ 5,46,20,000/- and it has been admitted by Shri Sanjay Kothari during the course of recording of statement under section 132(4) of the Act that the source of these expenses were out of the cash generated through over invoicing.
AO has failed to bring on record any evidence to the effect that these expenses of ₹ 2,19,96,000/- were incurred out of some other source or the cash generated of ₹ 5,46,20,000/- was invested or incurred on some other activity. Therefore, under these circumstances, the only possible presumption is that the expenditure was incurred out of the funds available with the assessee generated through over invoicing. This has been admitted by the CEO of the project Shri Sanjay Kothari in the statement recorded under section 132(4) and therefore we can reasonably held that assessee is entitled to benefit of telescoping of ₹ 2,19,96,000/-. The case of the assessee finds support from the several decisions referred to by the assessee during the course of hearing. In the case of CIT vs. K.SREEDHARAN [1992 (6) TMI 24 - KERALA HIGH COURT] has held that if a intangible addition made in the earlier year is as good as other disclosed income of the assessee and it would be treated as available for investment from the year in which such addition was made.
Thus the assessee has available source with it to incur the cash expenses which was not in any way controverted by the AO by bringing on record any cogent and substantive materials or evidences and accordingly we set aside the order of Ld. CIT(A) and direct the AO to allow the telescoping and delete the addition.
Disallowing the setting off the loss against the assessed deemed income under section 69C - HELD THAT:- We observe that the income assessed under section 68/69C is eligible to be adjusted against any brought forward loss or depreciation. The position is clarified by the board’s circular No.11/2019 dated 19.06.2019 which provides for setting off of loss/depreciation against the income assessed under section 69C of the Act provided it relates to any assessment years prior to A.Y. 2017-18 and the same ratio has been laid down in the various decisions relied upon by the assessee. Accordingly, we hold that whatever income is assessed after giving effect to ITAT order is subject to set off against the loss/depreciation of the current year and also brought forward loss/brought forward depreciation of the earlier year.
Addition made on account of On money - Whether transactions of receipt of on money as evidenced by the receipts issued to the buyers were duly recorded in the books of accounts? - HELD THAT:- After perusing the material on record, we observe that the assessee has duly accounted for all the receipts issued to the customers from whom the said cash was received and duly recorded in the books of accounts of the assessee. Since the project “Ensara Metropark” was at the development stage and whatever explained was incurred was shown as work in progress at the year end and also no revenue was offered to tax. We find that assessee has duly accounted for all these entries in the books of accounts and thus the mere fact that the money has been received in cash by the assessee would not justify the order of Ld. CIT(A) confirming the order of AO wherein it has been held that money received by issuing various receipts represent the on money. The stand of the authorities below appears to be contrary to the facts on record as the money which has been alleged to be on money is duly recorded in the books of accounts. In such a scenario we are not in agreement with the conclusion drawn by the Ld. CIT(A) and accordingly we direct the AO to delete the addition.
Assessee appeal allowed.
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