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2010 (6) TMI 905
The issues presented and considered in the legal judgment are as follows:1. Whether the delay of 53 days in filing the appeal can be condoned due to a reasonable cause.2. Whether an addition of Rs.9 lakhs under Section 68 of the Income Tax Act is justified for the assessment year 2005-06.3. Whether the estimation of profit at 8% of the gross receipt is reasonable and should be upheld.Issue 1: Delay in Filing AppealThe Appellate Tribunal considered the delay of 53 days in filing the appeal by the assessee. The assessee provided an Affidavit stating that they were away from Hyderabad during the relevant period, which prevented them from filing the appeal on time. The departmental representative argued that such a long delay cannot be condoned. The Tribunal held that the length of the delay is irrelevant for condonation; what matters is the reasonable cause for the delay. Since the assessee being away from Hyderabad was not disputed, the Tribunal concluded that there was a reasonable cause and thus condoned the delay, admitting the appeal.Issue 2: Addition under Section 68 of the Income Tax ActThe main issue was the addition of Rs.9 lakhs under Section 68 of the Income Tax Act. The assessee argued that as it was the first year of the firm and business had just started, there could not have been sufficient income for the undisclosed investment. The Tribunal referenced past judgments and held that even in the first year, the assessee is expected to explain cash credits. Without a satisfactory explanation, the deeming fiction under Section 68 applies. The Tribunal found no merit in the assessee's contentions, citing previous decisions, and confirmed the order of the CIT(A) regarding the addition.Issue 3: Estimation of Profit at 8%The assessee raised a ground regarding the estimation of profit at 8% of the gross receipt, but no arguments were presented by either side. The Tribunal reviewed the Lower Authority's order and deemed the 8% profit estimation to be reasonable, leading to no interference being necessary. Consequently, the Tribunal confirmed the Lower Authority's decision on this matter.Significant Holdings:- The Tribunal emphasized that the length of the delay in filing an appeal is irrelevant; what matters is the existence of a reasonable cause.- The Tribunal established that even in the first year of business, the assessee is expected to explain cash credits, and without a satisfactory explanation, additions can be made under Section 68 of the Income Tax Act.- The Tribunal upheld the Lower Authority's decision regarding the estimation of profit at 8% of the gross receipt.In conclusion, the Tribunal condoned the delay in filing the appeal, confirmed the addition under Section 68 of the Income Tax Act, and upheld the profit estimation at 8%. The appeal of the assessee was ultimately dismissed.
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2010 (6) TMI 904
Issues involved:
The judgment addresses the following issues:
1. Reduction in claim u/s 10B of I. T. Act for interest received on loans to employees and scrap sales.
2. Disallowance benefit u/s 80IB of the I. T. Act for interests received on loans to employees and duty drawback.
3. Chargeability of interest u/s 234A, 234B & 234C.
Issue 1: Reduction in claim u/s 10B of I. T. Act for interest received on loans to employees and scrap sales:
The appellant contested the reduction in claim u/s 10B, arguing that interest income and scrap sale proceeds should not be excluded from business profit. The Tribunal agreed that no exclusion was required for scrap sale proceeds as per Section 10B, directing the AO to calculate the deduction based on export turnover to total turnover without excluding scrap sale proceeds. However, the Tribunal disagreed with the appellant regarding interest income, stating that a direct nexus between interest received and interest payment was not established. Interest income was deemed assessable as income from other sources, and the AO was correct in excluding it from the profit of the business.
Issue 2: Disallowance benefit u/s 80IB for interests received on loans to employees and duty drawback:
The AO had reduced the deduction claimed u/s 80IB by excluding interest income and duty drawback. The Tribunal noted that the duty drawback issue was settled against the appellant by a previous judgment. Regarding interest income on loans to employees, the Tribunal held that such income must be excluded from business profit for the purpose of granting deduction u/s 80IB, as it does not qualify as part of the profit and gains derived from the eligible business. Therefore, both aspects were decided against the appellant, and the appeal on this ground was rejected.
Issue 3: Chargeability of interest u/s 234A, 234B & 234C:
Both parties agreed that the issue of interest chargeability was consequential, requiring no separate adjudication.
In conclusion, the Tribunal partly allowed the appeal of the assessee concerning the reduction in claim u/s 10B but rejected the appeal regarding the disallowance benefit u/s 80IB. The interest chargeability issue was deemed consequential, and the decision was pronounced on 18th June 2010.
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2010 (6) TMI 903
Issues involved: Challenge to the action of the ld. CIT(A) regarding the taxability of marketing contribution and reservation assessment fees received by the assessee.
Summary:
The appeal was filed by the Revenue against the order of ld. CIT (A)-V(2)(2), Mumbai dated 15.12.2006, challenging the tax treatment of marketing contribution and reservation assessment fees received by the assessee. The Tribunal observed that the relief granted by the ld. CIT(A) was based on a previous decision in the assessee's favor for A.Y. 1997-98. The Tribunal noted that the receipts were not unfettered and were received with an obligation to use them for specific purposes, akin to trust money. The Tribunal held that these receipts were not taxable as royalty or fees for technical services. A subsequent order for A.Y. 1998-99, 1999-2000 & 2001-02 directed the A.O. to re-examine the issue, considering the specific details of receipt and payment for all three assessment years. The Tribunal upheld the relevance of this order in determining the nature of the receipts. Consequently, the impugned order was set aside, and the issue was remanded to the A.O. for fresh consideration in line with the previous directive.
In conclusion, the appeal of the Revenue was treated as allowed for statistical purposes, and the issue was remanded to the A.O. for fresh adjudication in accordance with the Tribunal's directions.
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2010 (6) TMI 902
Issues Involved:
1. Jurisdiction of the Assessing Officer (AO)
2. Validity of reference to the District Valuation Officer (DVO) u/s 142A
3. Validity of the assessment order based on the DVO's report
Summary:
1. Jurisdiction of the Assessing Officer (AO):
The assessee contended that the jurisdiction lay with the AO in New Delhi and not Kanpur. The transfer of jurisdiction required prior notice and reasons, which were not provided, making the assessment order dated 31st Dec., 2008 null and void. The CIT(A) erred in holding that objections to centralization should have been raised before relevant authorities.
2. Validity of Reference to the DVO u/s 142A:
The assessee argued that there was no justification to invoke Section 142A and refer the matter to the DVO on 27th Sept., 2007, as no assessment proceedings were pending at that time. The DVO's report, obtained from an invalid reference, could not be the basis for any addition. The Tribunal admitted these additional grounds based on the Supreme Court's ruling in National Thermal Power Co. Ltd. v. CIT.
The Tribunal found substance in the assessee's argument, citing the Gujarat High Court's decision in Umiya Co-op. Housing Society Ltd. and the ITAT Lucknow Bench's decision in Vijeta Educational Society, which held that a reference to the DVO can only be made during pending assessment or reassessment proceedings. Since no such proceedings were pending on 27th Sept., 2007, the reference was invalid, and the assessment based on the DVO's report was unsustainable.
3. Validity of the Assessment Order Based on the DVO's Report:
The Tribunal noted that the DVO's report did not specify the period for which the investment was to be estimated. The assessee had maintained regular books of account with no defects found, and thus, no addition could be made based on the DVO's report. Consequently, the assessment order was quashed.
Conclusion:
The Tribunal quashed the assessment order, deeming the reference to the DVO invalid and the subsequent assessment unsustainable. The appeal was allowed, and the remaining grounds were not considered necessary to decide.
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2010 (6) TMI 901
Issues involved:
The issues involved in this case are:
1. Whether the Income Tax Appellate Tribunal was correct in deleting the addition of Rs.28,92,750/- made by the Assessing Officer and confirmed by the Commissioner of Income-Tax (Appeals)-IV, Surat?
2. Whether the order of the Income Tax Appellate Tribunal was without reasons, contrary to the evidence and material on the record of the case and perverse or not?
Summary:
Issue 1:
The appellant-revenue challenged the order made by the Income Tax Appellate Tribunal regarding the addition of Rs.28,92,750/- to the assessment of a Hindu Undivided Family for the Assessment Year 2001-2002. The appellant contended that the amount was received in relation to an agreement to sell land, and therefore should be taxed as capital gains. However, the Tribunal found that the agreement was never acted upon, was unsigned, and the property remained in the name of the assessee. The Tribunal concluded that no income arose from the unsigned document and deleted the addition.
Issue 2:
The Tribunal's decision was based on the lack of corroborating evidence to establish that a transaction had taken place, apart from the unsigned document. The Assessing Officer had concluded that a transaction had occurred, but the Tribunal disagreed, stating that the unsigned document could not form the basis of a transaction in law. Since there was no other evidence to support the transaction and no proof of possession being handed over, the Tribunal found no taxable income. Therefore, the Tribunal's decision to delete the addition was upheld, and the appeal was dismissed due to the absence of any substantial question of law.
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2010 (6) TMI 900
Issues Involved:
1. Whether the Sale Certificate issued by the Authorized Officer of the Indian Overseas Bank is chargeable with stamp duty.
2. Whether the Sale Certificate requires registration under the Registration Act.
Issue-wise Detailed Analysis:
1. Chargeability of Stamp Duty on Sale Certificate:
The Petitioner challenged the letter dated 26.12.2008 by the 1st Respondent, which stated that the Sale Certificate issued in favor of the Petitioner was chargeable with 8% stamp duty under Article 23 of Schedule-I of the Indian Stamp Act. The Petitioner argued that the Sale Certificate issued by the Authorized Officer of the Indian Overseas Bank under the SARFAESI Act should not be construed as an instrument chargeable with duty. The Petitioner cited several judgments to support the argument that such certificates are exempt from stamp duty.
The Respondents contended that the exemption under Article 18 of Schedule-I of the Indian Stamp Act applies only to Sale Certificates issued by a Civil or Revenue Court, Collector, or other Revenue Officer, and not to those issued by a bank's Authorized Officer. The court examined various judgments cited by both parties, including "Municipal Corporation of Delhi v. Pramod Kumar Gupta," "Shanti Devi L. Singh v. Tax Recovery Officer," and "Chidambara Manickam, K. v. Shakeena," among others.
The court found that the Sale Certificate issued by the Authorized Officer of the Indian Overseas Bank does not fall under the exemptions provided in Article 18 of Schedule-I of the Indian Stamp Act. The court relied on the judgment in "In Re, The Official Liquidator, High Court, Madras, 2010 (2) CTC 113," which clarified that Sale Certificates issued by entities other than Civil or Revenue Courts are not exempt from stamp duty.
2. Registration of Sale Certificate:
The Petitioner argued that the Sale Certificate did not require registration under Section 17 of the Registration Act, as it was not an instrument as defined in Section 3 of the Indian Stamp Act. The Petitioner cited several judgments to support this claim, including "Shree Vijayalakshmi Charitable Trust v. The Sub-Registrar," which held that Article 18 imposing stamp duty on registration of Sale Certificates would apply only if a party goes for registration, and not when the Sale Certificate is sent to the Registrar for filing.
The Respondents countered that the Sale Certificate issued by the Authorized Officer of a bank cannot be equated with those issued by Civil or Revenue Courts, which are exempt from registration under Section 17(2)(xii) of the Registration Act. The court referred to the Supreme Court's judgment in "Shanti Devi L. Singh v. Tax Recovery Officer," which distinguished between the processes of filing and registration of documents.
The court concluded that while Sale Certificates issued by Civil or Revenue Courts are exempt from compulsory registration, the same does not apply to Sale Certificates issued by bank officers. The court upheld the view that the Sale Certificate issued by the Authorized Officer of the Indian Overseas Bank is not exempt from registration and must comply with the relevant statutory provisions, including the payment of stamp duty.
Conclusion:
The court dismissed the Writ Petition, holding that the Sale Certificate issued by the Authorized Officer of the Indian Overseas Bank is chargeable with 8% stamp duty under Article 23 of Schedule-I of the Indian Stamp Act and requires registration under the Registration Act. Consequently, the court found no infirmity in the order passed by the 1st Respondent and dismissed the Petition.
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2010 (6) TMI 899
Issues involved:
The issues involved in the judgment are related to duty liability in terms of a High Court order, challenge to preliminary findings by the Director General Safeguard, interim reliefs against the applicants, amendment to section 8C of the Customs Tariff Act, retrospective effect of the impugned notification, execution of bonds by the petitioners, and modification of interim orders.
Duty Liability and Interim Orders:
The Director General Safeguards sought orders directing the petitioners to discharge duty liability as per a High Court order dated 8th May, 2009. The petitioners had challenged preliminary findings related to imports of Aluminum Flat Rolled Products and Aluminum Foil from China. The earlier Bench had granted interim relief allowing the petitioners to import goods covered by the notification under challenge and directed the release of goods without a bank guarantee, subject to future rules. The Director General Safeguards sought directions against the petitioners to make payment of their liability covered under the executed bonds.
Amendment to Customs Tariff Act:
The senior counsel for the applicants highlighted an amendment to section 8C of the Customs Tariff Act by the Finance (No.2) Act, 2009, which came into effect from 19th August, 2009. This amendment made provisions of the Customs Act, 1962 applicable to duties leviable under the Safeguards Act. The counsel argued that the interim orders passed before this amendment needed to be vacated or modified.
Opposition and Retrospective Effect:
The counsel for the petitioners opposed the submissions, claiming that the impugned notification had retrospective effect, contrary to the law. He argued that the interim orders were passed after due consideration and no subsequent event warranted their modification.
Decision and Modification of Interim Orders:
After hearing both parties, the Court noted that the petitioners had executed bonds but had not imported any goods, ensuring revenue protection. Considering the parameters for interim relief, the Court found a prima facie case in favor of the petitioners. The Court modified the interim orders by directing the petitioners to furnish additional security in the form of a bank guarantee for 50% of the bond amount, in addition to the existing bonds. The modified orders would continue during the pendency of the petition, and the civil applications were disposed of with no costs.
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2010 (6) TMI 898
Issues Involved:
1. Condonation of delay in filing the appeal.
2. Confirmation of business income and disallowance of returned loss.
3. Disallowance of depreciation on motorcar.
4. Disallowance of various expenses.
Summary:
1. Condonation of Delay in Filing the Appeal:
The assessee challenged the CIT(A)'s refusal to condone a delay of 693 days in filing the appeal against the assessment order dated 30th January 2006. The CIT(A) noted that the appeal was filed on 1st February 2008, well beyond the due date of 10th March 2006. The assessee argued that the delay was due to an initial decision to buy peace and cooperate with the Department, but later decided to appeal when similar disallowances were made for A.Y. 2005-06. The CIT(A) found this explanation insufficient and dismissed the appeal as unadmitted. The Tribunal upheld the CIT(A)'s decision, stating that the assessee did not provide a sufficient reason for the delay and that the delay appeared to be a dilatory strategy.
2. Confirmation of Business Income and Disallowance of Returned Loss:
The assessee, a builder and developer, filed a return declaring a loss of Rs.4,39,658, which was initially accepted. However, upon scrutiny, the Assessing Officer (AO) found discrepancies, including missing bills and expenses debited for a project claimed to be under construction but actually completed. The AO rejected the explanation and ignored the loss, confirming the business income at Rs.1,29,100. The CIT(A) upheld this decision, and the Tribunal found no reason to overturn it.
3. Disallowance of Depreciation on Motorcar:
The AO disallowed depreciation of Rs.2,09,972 on a motorcar registered in the name of a partner, Ms. Nigar Khan, arguing that the asset must be owned by the firm to claim depreciation. The CIT(A) and the Tribunal upheld this disallowance, noting that the assessee did not appeal the assessment order promptly and only did so after the penalty u/s. 271(1)(c) was confirmed.
4. Disallowance of Various Expenses:
The AO allowed only Rs.1,70,899 of the expenses claimed, disallowing Rs.1,29,101 as not relatable to business purposes. The CIT(A) and the Tribunal upheld this decision, finding the assessee's explanations insufficient and noting that the appeal was filed as a strategy to prolong litigation.
Conclusion:
The Tribunal dismissed the appeal, upholding the CIT(A)'s decisions on all issues, including the refusal to condone the delay in filing the appeal, the confirmation of business income, and the disallowances of depreciation and various expenses. The Tribunal emphasized the need for sufficient cause to condone delays and found the assessee's reasons inadequate.
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2010 (6) TMI 897
The Appellate Tribunal ITAT Mumbai dismissed the appeal by the assessee for the assessment year 2006-2007 as the assessee did not appear for the hearing and showed no interest in prosecuting the appeal. The appeal was dismissed based on the precedent set by the ITAT Delhi Bench in the case of CIT Vs. Multiplan India (P.) Ltd. The order was pronounced on June 30, 2010.
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2010 (6) TMI 896
Issues Involved:
1. Deduction u/s 80IB based on the submission of the audit report.
2. Treatment of installation and service charges for deduction u/s 80IB.
3. Disallowance of commission and consultancy expenses.
4. Quantification of deduction u/s 80IB in the cross-objection.
Summary:
1. Deduction u/s 80IB based on the submission of the audit report:
The revenue's appeal contended that the assessee's claim for deduction u/s 80IB was invalid as the mandatory audit report was not submitted with the return of income but was obtained later. The CIT(A) allowed the deduction, considering the delay as procedural, citing judicial precedents. The Tribunal upheld this view, stating that the audit report's availability during assessment amounted to substantial compliance, dismissing the revenue's ground.
2. Treatment of installation and service charges for deduction u/s 80IB:
The revenue argued that installation and service charges should not be considered income derived from the manufacturing activity. The CIT(A) directed the AO to recompute the deduction, considering only the installation charges related to the sale of manufactured items. The Tribunal agreed that installation charges from own manufactured goods are integral to the manufacturing process and eligible for deduction, but service charges are not. The AO was directed to recompute the deduction accordingly.
3. Disallowance of commission and consultancy expenses:
The revenue challenged the deletion of disallowance of commission and consultancy expenses by the CIT(A), arguing that the CIT(A) effectively set aside the issue to the AO, which is not permitted. The Tribunal found that the CIT(A) had given a clear direction to the AO to verify the details and restrict disallowance only where details were not provided. This was within the CIT(A)'s powers, and the revenue's ground was dismissed.
4. Quantification of deduction u/s 80IB in the cross-objection:
The assessee's cross-objection argued for the correct quantification of deduction u/s 80IB, considering net profit from installation charges. The Tribunal restored the issue to the AO to compute the deduction, excluding expenses related to non-eligible receipts, following the principle of netting as per the Special Bench decision in Lalsons Enterprises Vs. DCIT. The AO was directed to reframe the assessment after allowing a reasonable opportunity of hearing to the assessee.
Conclusion:
The appeal of the revenue and the cross-objection of the assessee were both partly allowed. The Tribunal provided specific directions for the AO to follow in recomputing the deductions and disallowances.
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2010 (6) TMI 895
Issues involved: Appeal against disallowances made by Assessing Officer u/s 68 of the Income-tax Act, 1961 for loans treated as unexplained cash credits and difference in TDS certificates and labour charges.
Issue 1 - Disallowance u/s 68 of the Act:
The appellant contested the addition u/s 68 made by the AO, claiming lack of opportunity to prove that credits pertained to earlier years and some were not subject to u/s 68. Additional evidence was submitted to the CIT(A) including loan confirmations and explanations for certain credits. However, the CIT(A) did not admit the evidence and only directed the AO to review the previous year's balance sheet. The Tribunal noted that the CIT(A) failed to consider the additional evidence, emphasizing the need for a fair opportunity for the appellant. The matter was remanded to the CIT(A) for proper consideration of the evidence and reasons for non-admission.
Issue 2 - Cooperation with AO:
The Departmental Representative argued that the appellant did not cooperate with the AO, implying no need for fresh evidence admission. However, the Tribunal found that the appellant's case focused on the CIT(A)'s failure to admit additional evidence rather than lack of opportunity from the AO. The Tribunal stressed the importance of proper consideration of evidence for substantial justice and directed the CIT(A) to provide a reasonable opportunity for the appellant to be heard.
Conclusion:
The Tribunal partially allowed the appeal, setting aside the issue of disallowance u/s 68 of the Act, except for a specific amount, to be reconsidered by the CIT(A) with proper evaluation of the additional evidence. The decision was pronounced on June 4, 2010.
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2010 (6) TMI 894
Issues involved:
The issue involves the right of an arrested Member of the Orissa Legislative Assembly to participate in the voting process for the Biennial Elections to the Council of States, 2010 (Rajya Sabha Elections) while being in jail custody.
Judgment Summary:
Issue 1: Right to participate in voting process
The Petitioner, an elected Member of the Orissa Legislative Assembly, sought permission to participate in the voting process for the Council of States elections despite being in jail custody. The State Counsel objected, citing Section 62(5) of the Representation of People Act, 1951, and previous court decisions emphasizing that the right to vote in such elections is not an absolute constitutional right. However, the Petitioner argued that under Article 80(4) of the Constitution and the Proviso to Section 59 of the R.P. Act, 1951, he should be allowed to vote since the voting process is different from general elections. The Court held that as a Member of the Legislative Assembly, the Petitioner should be permitted to exercise his franchise by participating in the voting process for the Council of States elections.
Issue 2: Direction to facilitate participation
The Court directed the Secretary to the Government of Orissa, Home Department, to issue instructions to facilitate the transportation of the Petitioner to the voting location with adequate security on the day of the election. After casting his vote, the Petitioner was to be taken back to the jail where he was lodged. The Writ Petition was disposed of with this direction, and a free copy of the order was provided to the State Counsel for compliance. An urgent certified copy of the order was to be granted upon proper application.
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2010 (6) TMI 893
Issues involved: Eligibility of minor daughter for family pension after petitioner's remarriage and non-receipt of dues.
In the present case, the petitioner's husband, a Constable in the Delhi Police, passed away while in service, resulting in the sanction of family pension and DCRG to the petitioner. Subsequently, the petitioner remarried, making her ineligible for continued pension payments. However, the petitioner asserts that her minor daughter is entitled to receive family pension, and she claims that the dues have not been paid. The 2nd respondent acknowledged the daughter's eligibility for family pension but highlighted the need for certain formalities to be completed. The court emphasized that if the required formalities are not fulfilled, the authorities cannot be blamed for the non-payment of family pension to the deceased's daughter. Consequently, the court directed the petitioner to complete the necessary formalities promptly to facilitate the disbursement of family pension along with arrears to her minor daughter within eight weeks of lodging the claim. Thus, the writ petition was disposed of accordingly.
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2010 (6) TMI 892
Addition on account of unexplained opening capital - unexplained portion of newly introduced capital - addition in the hands of assessee on protective basis - Papers impounded from the premises of Shri Danawala indicated an enhancement in the opening capital of A.Y.2003-04 - admission made by the Mohanbhai Dhanjibhai Patel Group, this is required to be taxed in the hands of Mohanbhai Dhanjibhai Patel substantively alongwith the enhanced capital - HELD THAT:- Assessing Officer, in the assessment order, himself observed that “considering the admission made by the Mohanbhai Dhanjibhai Patel Group, this is required to be taxed in the hands of Mohanbhai Dhanjibhai Patel substantively alongwith the enhanced capital of ₹ 15,00,000/- altogether which works out to ₹ 15,00,000/- an on protective basis in the case of the assessee”. This clearly indicates that the Assessing Officer himself was not sure whether this income of ₹ 15,00,000/- is earned and actually belonged to the assessee. The assessee has filed an affidavit before the Assessing Officer. From the perusal of the same and after considering the totality of the facts and reasoning given by the Learned Commissioner of Income Tax(Appeals), we are convinced that the Assessing Officer made the addition of ₹ 15,00,000/- on the basis of fictitious entries in loose sheets of paper found from the premises of the C.A. Shri Pankaj Danawala, who had admitted to have created such amounts himself. Therefore, the Learned Commissioner of Income Tax(Appeals) is legally and factually correct in deleting the addition of ₹ 15,00,000/-, which was made by the Assessing Officer in the hands of assessee on protective basis. Resultantly, the ground of appeal raised by the Revenue is rejected.
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2010 (6) TMI 891
Issues Involved:
1. Right to practice for holders of "Vaidya Visharad" or "Ayurved Ratna" degrees from Hindi Sahitya Sammelan Prayag/Allahabad.
2. Validity of the cut-off date (1967) in Entry No. 105 of the Second Schedule of the Indian Medicine Central Council Act, 1970.
3. Constitutionality of restrictions imposed by the Central Act on practicing without being listed in the Central Register in light of Article 14 of the Constitution.
Issue-wise Detailed Analysis:
1. Right to Practice for Holders of "Vaidya Visharad" or "Ayurved Ratna" Degrees:
- The court examined whether individuals with degrees from Hindi Sahitya Sammelan Prayag/Allahabad, which are not recognized under Schedule II of the Indian Medicine Central Council Act, 1970 (Act 1970), have the right to practice medicine.
- The Rajasthan Indian Medicine Act, 1953 (Act 1953) initially recognized these degrees for practicing as Vaidyas in Rajasthan.
- Section 17 of Act 1970, enforced in Rajasthan from 1.10.1976, stipulated that only qualifications listed in the Second, Third, and Fourth Schedules of Act 1970 are valid for medical practice, with an exception for those practicing before the Act's commencement.
- The court found that Hindi Sahitya Sammelan Prayag is not a recognized educational institution, university, or board. It is merely a society registered under the Societies Registration Act and does not have affiliated colleges or provide proper education.
- The court held that without proper recognition, degrees from Hindi Sahitya Sammelan Prayag do not qualify individuals to practice medicine.
2. Validity of the Cut-off Date (1967):
- The cut-off date "1967" in Entry No. 105 of the Second Schedule of Act 1970 was challenged as arbitrary and violative of Article 14 of the Constitution.
- The court noted that the cut-off date was based on information provided by the State Government and reflected the period during which the degrees were recognized.
- The Hindi Sahitya Sammelan Prayag did not apply for recognition of its qualifications post-1967 under Section 14(2) of Act 1970, which would have allowed for an amendment in the Schedule.
- The court concluded that the cut-off date is not arbitrary as it indicates the period during which the qualifications were recognized. The society's failure to seek recognition post-1967 justifies the cut-off date.
3. Constitutionality of Restrictions Imposed by the Central Act:
- The appellants argued that restrictions on practicing without being listed in the Central Register violate Article 14 of the Constitution and are arbitrary.
- The court emphasized that the right to practice under Article 19(1)(g) of the Constitution is not absolute and can be subjected to reasonable restrictions under Article 19(6).
- The court held that the restriction requiring qualifications listed in Schedule II, III, and IV of Act 1970 for medical practice is reasonable and not violative of Article 14.
- The court also noted that the Act 1953's provisions, if repugnant to Act 1970, cannot prevail due to Article 254 of the Constitution.
Conclusion:
- The court concluded that individuals holding degrees from Hindi Sahitya Sammelan Prayag post-1967 are not entitled to practice medicine.
- The cut-off date "1967" in Entry No. 105 of the Second Schedule is valid and not arbitrary.
- Restrictions imposed by Act 1970 are reasonable and not violative of Article 14 or any other statutory provisions.
Judgment:
- Civil Appeal arising out of SLP (C) No. 21043 of 2008 is allowed, affirming that degrees obtained after 1967 from Hindi Sahitya Sammelan Prayag are not valid for medical practice.
- All other Civil Appeals are dismissed. No costs.
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2010 (6) TMI 890
Issues involved: Application for sanction of a Scheme of Arrangement u/s 391 to 394 of the Companies Act, 1956 between two companies and their shareholders.
Summary:
The petition sought sanction under Section 391 to 394 of the Companies Act, 1956 for a Scheme of Arrangement between a Demerged Company and a Resulting Company. The petitioners confirmed compliance with court directions and filed necessary affidavits. The Regional Director's affidavit stated that the Scheme, except for a specific compliance requirement, did not appear prejudicial to shareholders or the public. The Resulting Company undertook to fulfill the specified requirements. Upon review, the Court found the Scheme fair, reasonable, compliant with the law, and not opposed by any concerned parties.
The Court, noting all statutory compliances were met, made the Company Scheme Petitions absolute. The petitioners were directed to lodge the order and Scheme for stamp duty adjudication within 60 days. Additionally, they were ordered to pay costs to the Regional Director within 6 weeks. The filing and issuance of the order were dispensed with, and all relevant authorities were instructed to act on the order and authenticated Scheme.
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2010 (6) TMI 889
Issues Involved:
1. Scheme of amalgamation and its approval.
2. Allegations of fraud in the conduct of the meeting.
3. Res judicata and representation of interests.
4. Delay and acquiescence in challenging the scheme.
Issue-wise Detailed Analysis:
1. Scheme of Amalgamation and its Approval:
The applicants challenged the scheme of amalgamation between the respondent companies and respondent No. 1, which was sanctioned by the Court on January 16, 2003. They sought to set aside this order on the grounds of fraud, alleging improper notice of the meeting, unauthorized attendance, and attendance by deceased shareholders.
2. Allegations of Fraud in the Conduct of the Meeting:
The applicants argued that the meeting to approve the scheme was held without proper notice to shareholders, including publication in obscure newspapers. They also contended that unauthorized persons, including two deceased shareholders, attended the meeting, rendering the resolution invalid. The details of the fraud included the improper appointment of a Chairman, inadequate notice to shareholders, and unauthorized proxy holders accepting notices.
3. Res Judicata and Representation of Interests:
The respondents argued that the issues raised had already been decided in earlier proceedings, making them res judicata. The Court examined whether the applicants were represented in the earlier application through their privies, and if their interests were adequately represented. It was found that the living shareholders (supporters) who controlled the applicant companies had participated in the earlier application, effectively representing the interests of those companies.
4. Delay and Acquiescence in Challenging the Scheme:
The Court noted significant delay and acquiescence by the applicants in approaching the Court. The earlier application was filed nearly three years after the scheme's approval, and the current application was filed six and a half years later. The Court found that the applicants had constructive notice of the fraud and had acquiesced in it, making their challenge untimely and uncondonable.
Judgment:
The Court dismissed the application on the ground of delay and acquiescence, holding that the applicants were bound by the findings in the earlier proceedings. The Court found that the meetings were conducted fraudulently, but the applicants' delay in challenging the scheme rendered their application untenable. There was no order as to costs.
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2010 (6) TMI 888
Issues involved:
The issues involved in this case include the execution of a promissory note by the deceased, the consideration for the note, and the entitlement of the plaintiff to the decree sought.
Execution of Promissory Note:
The plaintiff filed a suit for recovery of a sum of Rs. 1,81,810/- based on a promissory note allegedly executed by the deceased. The trial Court decreed the suit, but the lower Appellate Court reversed this decision. The appellant argued that the signature on the promissory note was proved through cogent evidence, while the respondents denied the execution of the note. The lower Appellate Court framed the issue of whether the trial Court's decree deserved to be set aside.
Burden of Proof and Witness Testimony:
The appellant was under obligation to prove the execution of the promissory note due to the respondents' denial. The appellant's witness, PW-2, claimed to be acquainted with the deceased's signatures but did not provide conclusive evidence linking the signatures on the promissory note to the deceased. The trial Court's findings were deemed perverse and not based on sufficient evidence, leading to the dismissal of the Second Appeal.
Expert Opinion and Comparison of Signatures:
The appellant failed to establish a clear foundation for comparing the signatures on the promissory note with undisputed signatures of the deceased. The trial Court's assumption regarding the identification of signatures was deemed inadequate, as no expert opinion or conclusive evidence was presented to support the claim. The lower Appellate Court corrected the errors in the trial Court's judgment, emphasizing the lack of basis for comparison under Section 73 of the Indian Evidence Act.
Conclusion:
The Second Appeal was dismissed, with no costs awarded. The judgment highlighted the importance of proper evidence and expert opinion in cases involving the proof of signatures on legal documents, ultimately leading to the rejection of the appellant's claim based on insufficient proof of execution.
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2010 (6) TMI 887
Issues involved: Appeal challenging order of acquittal u/s 138 of Negotiable Instruments Act.
Summary:
1. The appellant filed a complaint u/s 138 of Negotiable Instruments Act against the first respondent for dishonour of a cheque issued for construction expenses. The learned Magistrate acquitted the first respondent based on the debt being time-barred and lack of consideration.
2. The appellant contended that even a time-barred debt can be a valid consideration for a cheque issuance. The Division Bench decision clarified that a promise can be made in writing even for a time-barred debt, and dishonouring such a cheque constitutes an offence u/s 138 of Negotiable Instruments Act.
3. The learned Magistrate doubted the existence of consideration for the cheque, but the evidence supported that the cheque was issued towards an existing liability. The first respondent failed to rebut the presumption u/s 139 of Negotiable Instruments Act regarding the cheque's execution under coercion.
4. The High Court set aside the order of acquittal, convicted the first respondent u/s 138 of Negotiable Instruments Act, and sentenced him to imprisonment till rising of court and a compensation of Rs. 25,000 to be paid to the appellant. In default, simple imprisonment for two months was ordered.
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2010 (6) TMI 886
Issues Involved:
1. Whether the dispute should be referred to arbitration under Clause 17 of the Shareholders' Agreement dated 10.11.1992.
2. Whether Messrs. Shruti Finsec Private Limited, not being a party to the original agreement, can be bound by the arbitration clause.
3. Whether the application under Section 8 of the Arbitration and Conciliation Act, 1996, was procedurally compliant.
4. Whether the dispute is wholly covered by the arbitration agreement.
5. Whether the revisionist-company has waived/abandoned the arbitration clause by filing a petition before the Company Law Board.
Issue-wise Detailed Analysis:
1. Referral to Arbitration:
The revisionist argued that Clause 17 of the Shareholders' Agreement mandated arbitration for any disputes. The clause specified that disputes should be referred to arbitration under the rules of the International Chamber of Commerce, Paris, with New Delhi as the venue. The revisionist contended that the trial court erred in not referring the matter to arbitration despite the clear arbitration clause.
2. Binding Nature of Arbitration Clause on Messrs. Shruti Finsec Private Limited:
The respondents argued that Messrs. Shruti Finsec Private Limited was not a party to the original Shareholders' Agreement and thus could not be bound by its arbitration clause. The court noted that the Shareholders' Agreement was between Starlinger & Company and the Lohia Family, represented by Raj Kumar Lohia, and that Messrs. Shruti Finsec Private Limited was not a signatory. The court cited precedents, including Sukanya Holdings Pvt. Ltd. v. Jayesh H. Pandya, which held that unless all parties to the suit are parties to the arbitration agreement, the dispute cannot be referred to arbitration.
3. Procedural Compliance of Section 8 Application:
The trial court found that the application under Section 8 of the Arbitration and Conciliation Act was not procedurally compliant as it was not accompanied by the original arbitration agreement or a duly certified copy thereof. The revisionist had filed a self-attested copy, which did not meet the statutory requirement. The court acknowledged this procedural lapse but chose to scrutinize the matter on other substantive points.
4. Coverage of Dispute by Arbitration Agreement:
The court examined whether the dispute was wholly covered by the arbitration agreement. The reliefs sought in the civil suit included specific performance of a subsequent contract, which did not contain an arbitration clause. The court noted that the subsequent contract, arising from letters dated 11.5.2001, 7.5.2001, and 3.11.2001, was independent of the original Shareholders' Agreement. Therefore, the dispute was not wholly covered by the arbitration agreement, and the civil court was the appropriate forum for resolving the dispute.
5. Waiver/Abandonment of Arbitration Clause:
The court observed that the revisionist had filed a petition before the Company Law Board, which indicated a waiver or abandonment of the arbitration clause. The trial court had noted this fact and concluded that the revisionist could not avail two statutory remedies simultaneously. The court found substance in the trial court's finding that the revisionist had waived/abandoned the arbitration clause.
Conclusion:
The court upheld the trial court's decision, finding no error of law or infirmity. It dismissed the revision, concluding that the dispute was not referable to arbitration due to the non-party status of Messrs. Shruti Finsec Private Limited, the procedural non-compliance of the Section 8 application, the partial coverage of the dispute by the arbitration agreement, and the waiver/abandonment of the arbitration clause by the revisionist.
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