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2011 (7) TMI 1408
ISSUES PRESENTED and CONSIDEREDThe core issue presented and considered in this case was whether the assessee was entitled to claim the benefit of indexation from the base year 1992-93 for the entire cost of acquisition of a property, given that the property was initially purchased in 1992-93 and subsequently redeveloped over several years. The specific legal question was whether the indexation should be applied from the year of the initial purchase or from the years in which the subsequent investments were made. ISSUE-WISE DETAILED ANALYSIS Relevant legal framework and precedents: The primary legal framework involved the provisions related to the computation of long-term capital gains under the Income Tax Act, specifically the application of indexation benefits as per Explanation (iii) to section 48. The precedents considered included decisions from the ITAT Mumbai and Delhi benches, which addressed similar issues of indexation in cases where properties were acquired and paid for over multiple years. Court's interpretation and reasoning: The Tribunal examined the nature of the property acquisition and subsequent redevelopment. It distinguished between cases where a property is purchased through installments and cases where a group of investors redevelops a property over time. The Tribunal noted that in the present case, the property was initially purchased as land with an old building, which was later demolished and redeveloped into multi-storeyed flats, with investments made over several years. Key evidence and findings: The evidence presented included the timeline of investments made by the assessee and other co-owners, starting from the initial purchase in 1992-93 and continuing with various investments for redevelopment until 2004-05. The Tribunal found that the lower authorities had not fully considered the timeline of these investments, particularly the payments made in 1994, which the assessee claimed should influence the indexation calculation. Application of law to facts: The Tribunal applied the principles from the cited precedents, which established that the cost of acquisition should be considered from the date the property rights were acquired, regardless of the payment schedule. However, due to insufficient clarity on the exact timeline and nature of the investments, the Tribunal determined that a remand to the Assessing Officer was necessary to reassess the facts in light of the legal principles. Treatment of competing arguments: The Tribunal considered the appellant's argument that the entire cost should be indexed from the initial purchase year, citing precedents where similar treatment was granted. Conversely, the Tribunal acknowledged the Assessing Officer's position, which indexed costs based on the years of actual investment. The Tribunal found merit in the appellant's argument but required further factual clarification. Conclusions: The Tribunal concluded that the matter required further examination by the Assessing Officer to ensure that all relevant facts and legal principles were appropriately considered. The Tribunal emphasized the need to apply the ratio of the cited decisions, which favored the assessee's interpretation of indexation from the date of acquisition. SIGNIFICANT HOLDINGS The Tribunal held that the principles established in the precedents cited by the assessee should guide the reassessment of the case. It stated, "The ratio of these decisions is to be applied in the instant case also." This holding underscores the principle that the date of acquisition for indexation purposes should align with the acquisition of property rights, not merely the dates of subsequent payments. The Tribunal remanded the case to the Assessing Officer to reconsider the facts and apply the legal principles appropriately, providing the assessee with the opportunity to present additional evidence. The decision reflects a careful balance between adhering to established legal principles and ensuring a thorough examination of the specific facts of the case. The appeal was treated as allowed for statistical purposes, pending the outcome of the reassessment by the Assessing Officer.
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2011 (7) TMI 1407
Issues Involved:
1. Whether the Petitioner should be granted interim bail on medical grounds.
Detailed Analysis:
1. Whether the Petitioner should be granted interim bail on medical grounds:
The Petitioner sought interim bail in case RC No. DAI-2009-A-0045 on medical grounds, having withdrawn his regular bail application. The Petitioner's counsel argued that the Petitioner has a long history of coronary artery ectasias, Pituitary Adenoma, and Neurocardiogenic Syncope, and that detention in jail could aggravate his medical condition due to inadequate medical facilities in jail. The counsel highlighted the Petitioner's medical history and recent reports, including a G.B. Pant Hospital report dated 24th June 2011, which noted the Petitioner's unconsciousness during a Head-up-Tilt Test (HUTT), suggesting neurocardiogenic Syncope.
The Respondent's counsel opposed the bail application, arguing that the Petitioner's medical records from 1991 to 2007 and post-2007 bypass surgery showed no significant medical issues until 2011, coinciding with the filing of the charge sheet. The Respondent emphasized that recent medical reports indicated the Petitioner did not require active cardiac or neurosurgical management and was advised to continue treatment as an outpatient. The G.B. Pant Hospital's latest report dated 11th July 2011 also suggested stable medical conditions manageable within the jail.
Upon reviewing the medical records, the court noted that the Petitioner's medical condition appeared stable and manageable with the prescribed treatment. The court found no compelling reason to grant interim bail, as the medical facilities in jail were deemed adequate. The court dismissed the application for interim bail but directed the Jail Superintendent and the Medical Officer Incharge to ensure proper treatment and monitoring of the Petitioner's medical condition, including transferring him as an in-patient if necessary.
Conclusion:
The application for interim bail on medical grounds was dismissed as the court found the Petitioner's medical condition stable and manageable within the jail facilities. The court directed jail authorities to ensure the Petitioner received appropriate medical care as advised by treating doctors.
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2011 (7) TMI 1406
The appeal filed by the assessee was dismissed by the Appellate Tribunal ITAT Chennai due to non-prosecution as nobody appeared on behalf of the assessee, and there was no authorization for the representative present. The decision was based on the case of CIT v. Multiplan (India) Ltd. (38 ITD 320). The order was pronounced on July 5, 2011.
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2011 (7) TMI 1405
Issues involved:
The issues involved in this case include ownership rights in a property, adverse possession claim, and the interpretation of Muhammadan Law.
Ownership Rights:
The case involved a dispute over the ownership of a property between siblings following the death of their father. The Plaintiff filed a suit for partition and separate possession of her share in the property, claiming that as per Muhammadan Law, the 1st Defendant had a 1/2 share while both sisters, including the Plaintiff, had a 1/4 share each.
Adverse Possession Claim:
The 1st Defendant contested the suit, claiming adverse possession over the property since 1967, which he argued had extinguished the Plaintiff's rights. The trial court initially ruled in favor of the Plaintiff and the 2nd Defendant, declaring each entitled to a 1/4 share and the 1st Defendant to a 1/2 share. However, the first appellate court reversed this decision, holding that the 1st Defendant had acquired ownership through adverse possession.
Interpretation of Law:
The High Court, in the second appeal, analyzed the evidence presented and found that the 1st Defendant had not sufficiently proved adverse possession. The High Court emphasized the need for documentary evidence to support the claim of exclusive possession, highlighting that mere refusal to share does not establish adverse possession. The Court also discussed the legal requirements for adverse possession and the importance of proving continuous possession over a specified period.
Legal Interpretation of Second Appeal:
The Supreme Court emphasized the legal requirements for a second appeal, stating that the High Court must formulate a substantial question of law before reversing a lower court's judgment. Citing relevant legal precedents, the Court reiterated that the High Court's jurisdiction in a second appeal is limited to cases involving substantial questions of law. The Court set aside the High Court's judgment in this case for not following the proper legal procedure and remanded the matter for fresh consideration.
In conclusion, the Supreme Court allowed the appeal, set aside the High Court's judgment, and remanded the case for fresh consideration in accordance with the legal requirements for a second appeal.
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2011 (7) TMI 1404
Issues involved: Determination of maintainability of applications u/s 28A(1) & (3) of the Land Acquisition Act, 1894.
Issue 1: Application u/s 28A(3) maintainability
The revision petition questioned the Reference Court's decision not to direct the respondent-L.A.O to refer the matter for compensation determination. Section 28A of the Act outlines the process for re-determination of compensation. The application under 28A(1) was rejected by the L.A.O, indicating no award was made under 28A(2). As per the Act, an application under 28A(3) requires an award under 28A(2) for compensation determination. Since no such award existed, the application filed by the petitioners was deemed not maintainable. Therefore, the Reference Court's order aligns with the legal requirements.
Issue 2: Application u/s 28A(1) maintainability
The petitioners' application under 28A(1) before the L.A.O was also deemed not maintainable. Section 28A(1) necessitates an award by a Court under Part III of the Act as a prerequisite for re-determination of compensation. The award from the 'Lok-Adalath' did not meet the criteria of an award under Part III of the Act. Consequently, the application filed by the petitioners under 28A(1) was legally unsustainable. The Reference Court's dismissal of the subsequent application under section 18(3)(b) was found to be legally sound. Thus, the revision petition was dismissed.
Conclusion:
The High Court of Karnataka, in the judgment, upheld the legal position that applications under sections 28A(1) and (3) of the Land Acquisition Act, 1894, must adhere to specific criteria for maintainability. The Court found that without the requisite awards and compliance with statutory provisions, the applications filed by the petitioners were not legally sustainable. Consequently, the Reference Court's decision to dismiss the applications was deemed appropriate, leading to the dismissal of the revision petition.
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2011 (7) TMI 1403
Issues involved: Appeal against dismissal of complaint by National Consumer Disputes Redressal Commission regarding interest on temple's deposit under Post Office Time Deposit Scheme.
Factual Details: The temple deposited a significant sum with the Post Office under the Scheme, but later found out the Scheme was discontinued for institutions from a specific date. The Post Master informed the temple to close the accounts without interest. The temple claimed interest through legal notice and complaint, which were dismissed by State and National Commissions.
Legal Analysis: The Central Government's Rules prohibited institutions from making such deposits u/s 15 of the Government Savings Banks Act, 1873. Rule 17 allowed closure of accounts opened in contravention of rules without interest. The communication from the Post Master confirmed the discontinuation of the Scheme for institutions prior to the temple's deposits, justifying the lack of interest payment.
Precedent and Decision: Referring to a previous case, the Court held that terms contrary to official notifications are not binding, justifying the refusal to pay interest. Despite the Post Master's oversight, the Rules prohibited interest payment, leading to the dismissal of the appeal for deficiency in service.
Suggestions: The Court advised Post Offices to ensure staff awareness of deposit details, display information prominently, promptly communicate changes, and train staff on updated procedures to prevent similar incidents.
Conclusion: Dismissing the appeal, the Court emphasized the importance of staff knowledge to prevent losses like the temple's interest amount due to lack of awareness.
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2011 (7) TMI 1402
Issues involved: Challenge to the judgment of Railway Claims Tribunal under Section 23 of Railway Claims Tribunals Act, 1987 regarding a minor child falling from a running train and sustaining injuries.
Details of the judgment:
1. The appellant, a minor child, filed a claim petition stating that he fell down from a running train due to heavy rush of passengers, resulting in injuries. The Tribunal dismissed the claim, noting discrepancies in the father's statement and police records, indicating a possible attempt to defraud the railways. The Tribunal found that the minor was not a bona fide passenger and that the ticket was not lost in the accident as claimed.
2. The High Court agreed with the Tribunal's findings, emphasizing that the claimant failed to prove being injured as a genuine passenger. The Court highlighted inconsistencies in the father's account and the swift removal of the injured child to the hospital before the father's arrival at the accident site, suggesting a fraudulent claim.
3. Observing a trend of fraudulent claims against railways, the Court noted the seriousness of perjury committed in this case. It directed the Registrar General to file a complaint under Section 340 of Cr.P.C. against the father for perjury, false evidence, and making a false claim, highlighting the need to address such fraudulent practices strictly.
4. Dismissing the appeal, the Court directed the Registrar General to take necessary steps for filing a complaint and listed the matter for further action. The judgment was sent to the Railway Claims Tribunal for information.
This summary provides a detailed overview of the judgment, highlighting the key issues, findings, and directives of the High Court in the case.
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2011 (7) TMI 1401
Issues Involved:
1. Validity of notice issued u/s 148.
2. Addition towards unexplained cost of construction.
3. Credit for sale proceeds of salvaged materials.
4. Disallowance of interest on loan for construction.
5. Allowance of depreciation for additions made.
Summary:
1. Validity of Notice Issued u/s 148:
The assessee contended that the notice issued u/s 148 was invalid and the reassessment proceedings were void ab-initio. However, during the hearing, the assessee opted not to press this ground. Consequently, the Tribunal rejected this ground as not pressed.
2. Addition Towards Unexplained Cost of Construction:
The main issue revolved around the addition made by the assessing officer towards unexplained investment in the cost of construction. During a survey operation, discrepancies were found between the valuation report by a registered valuer and the figures in the assessee's books. The assessing officer referred the matter to the DVO without first rejecting the books of accounts, which is a condition precedent. The Tribunal, referencing the Supreme Court judgment in Sargam Cinema Vs. CIT, held that such a reference without rejecting the books of accounts is invalid. Consequently, the additions based on the DVO's report were deleted.
3. Credit for Sale Proceeds of Salvaged Materials:
The assessee argued that the assessing officer did not give credit for the sale proceeds of salvaged timber and bricks from the demolition of the old house. This issue was not separately adjudicated as the main ground regarding the unexplained cost of construction was resolved in favor of the assessee.
4. Disallowance of Interest on Loan for Construction:
The assessee also contested the disallowance of interest on the loan availed for construction. However, this ground was not pressed during the hearing and was dismissed by the Tribunal as not pressed.
5. Allowance of Depreciation for Additions Made:
The assessee raised an alternative ground for the allowance of depreciation if the addition made on account of unexplained construction was sustained. Since the Tribunal deleted the additions, this ground became redundant.
Conclusion:
The Tribunal concluded that the reference to the DVO without rejecting the books of accounts was invalid, and any addition based on such a valuation report is not sustainable. The order of the CIT(A) was set aside, and the additions were deleted. The appeals of the assessee were partly allowed.
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2011 (7) TMI 1400
Issues involved:
The issues involved in this case are whether the Income Tax Department can claim priority over secured debts in favor of a bank u/s mortgage, and whether the properties subjected to auction sale can be attached by the Income Tax Department after being mortgaged.
Judgment Details:
Issue 1: Auction Sale and Sale Certificate (W.P. No. 5329 of 2010)
The Petitioner participated in an auction sale conducted by the Recovery Officer for properties mortgaged with the 3rd Respondent Bank. The Petitioner was the highest bidder, and a sale certificate was issued. However, the first Respondent refused to file the sale certificate due to attachment by the Income Tax Department u/s 222(1) of the Income Tax Act.
Issue 2: Auction Sale and Sale Certificate (W.P. No. 5593 of 2010)
In a separate case, the Petitioners participated in another auction sale for properties mortgaged with the 3rd Respondent Bank. They were the highest bidders, and a sale certificate was issued. The first Respondent refused to file the certificate due to attachment by the Income Tax Department for tax arrears.
Key Points:
- The Income Tax Department attached the properties based on ITCP-I certificate for tax arrears.
- The Petitioners argued that secured debts should prevail over tax arrears, citing a Division Bench judgment.
- The Income Tax Department claimed priority based on the attachment date, which could relate back to the ITCP-I certificate issuance.
- The Court held that secured debts have priority over tax arrears unless a specific provision gives priority to the tax department.
- The Court referred to the Division Bench judgment stating that tax arrears can have priority over unsecured debts but not over secured debts without statutory provision.
- The Court allowed the writ petitions, directing the first Respondent to file the sale certificates in accordance with the Registration Act.
In conclusion, the Court ruled in favor of the Petitioners, emphasizing the priority of secured debts over tax arrears and directing the first Respondent to file the sale certificates as requested.
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2011 (7) TMI 1399
Issues involved: Appeal against cancellation of penalty order u/s 271(1)(c) by CIT(A) due to setting aside of quantum appeal by ITAT.
Summary:
The appeal by the Revenue was against the CIT(A)'s cancellation of the penalty order u/s 271(1)(c) as the quantum appeal was set aside by the ITAT and restored to the Assessing Officer (A.O.) for fresh consideration. The Revenue raised two grounds challenging the CIT(A)'s decision and contended that it was contrary to certain decisions of the Hon'ble Madras High Court.
The facts of the case involved the A.O. not allowing the exemption claimed u/s 10A and initiating penalty proceedings u/s 271(1)(c). The CIT(A) rejected the appeal, stating the claim was made wrongly. The ITAT then set aside the order passed u/s 144 and restored it to the A.O. for fresh examination, leading to the cancellation of the penalty order by the CIT(A).
The Tribunal found no reason to interfere with the CIT(A)'s order as the basis for initiating penalty proceedings had been set aside by the ITAT. The Revenue's second ground, citing decisions of the Hon'ble Madras High Court, was dismissed as the facts of those cases were different from the present case.
Referring to the judgments of Hind Mercantile Corporation and Ramakrishna Sons (P) Ltd., the Tribunal emphasized the requirement of an alive assessment order for considering penalty on merits. Since the assessment order in this case was set aside, the CIT(A) rightly cancelled the penalty without delving into the merits. The Tribunal upheld the CIT(A)'s decision and dismissed the Revenue's appeal, allowing the A.O. to consider initiating penalty proceedings afresh while completing the assessment.
In conclusion, the Tribunal upheld the CIT(A)'s decision to cancel the penalty order u/s 271(1)(c) due to the setting aside of the assessment order, and dismissed the Revenue's appeal.
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2011 (7) TMI 1398
Issues involved:
The judgment deals with the issue of whether prosecution of a public servant after retirement without sanction from the State Government is legal under the Prevention of Corruption Act.
Summary:
The Appellant, a member of the Orissa Administrative Service, faced prosecution for possession of disproportionate assets after retirement. The Vigilance Department sought sanction from the State Government, which was refused. Despite this, a charge-sheet was filed and the Special Judge took cognizance of the offence. The Appellant challenged the prosecution on the grounds of lack of sanction.
The High Court initially disposed of the application with liberty to raise the issue at the time of charge framing. The trial court dismissed the Appellant's application for discharge, stating that prior sanction was not necessary post-retirement. The High Court upheld this decision, allowing the Appellant to challenge the prosecution during trial.
The Supreme Court clarified that once a public servant ceases to be so at the time of cognizance, no sanction is required under the Prevention of Corruption Act. However, in cases where Section 197 of the Code of Criminal Procedure applies, the requirement may differ. The Court emphasized that sanction is a safeguard against frivolous prosecution and should not shield the guilty.
In this case, the State Government had refused sanction while the Appellant was in service, and the Vigilance Department filed the charge-sheet post-retirement. The Court held that prosecution without prior sanction, when refused while the public servant was in service, is an abuse of process. The judgment cited a previous case where sanction was sought and refused post-retirement, distinguishing it from the present scenario.
The Court found the prosecution to be an abuse of process, as the assets in question were not disproportionately high, and the State Government had observed no prima facie case against the Appellant. The High Court was criticized for not deciding the issues itself, as the facts were clear. Consequently, the Supreme Court allowed the appeal, quashing the Appellant's prosecution.
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2011 (7) TMI 1397
Issues involved:
The judgment involves issues related to penalty imposition u/s 271(1)(c) of the Income Tax Act, 1961 for disallowance of expenses in assessment years 2003-04 and 2006-07.
Assessment Year 2003-04:
The appellant contested the penalty imposed by the Assessing Officer (A.O.) on disallowance of various expenses, which was reduced by the tribunal from 20% to 10%. The A.O. relied on the judgment of Dharmendra Textile Processors case. The appellant argued that penalty on estimated disallowance is unjustified. The tribunal found the ad-hoc disallowance insufficient for penalty imposition, stating that mere ad-hoc disallowance does not establish concealment. The penalty was deemed unjustified and was deleted.
Assessment Year 2006-07:
The A.O. assessed the appellant's income at 8% of gross receipts u/s 44AD due to non-audit of accounts. The appellant contended that penalty for deeming provisions of Section 44AD is unwarranted, citing a Madras High Court judgment. The tribunal noted that Section 44AD mandates income declaration at 8% of receipts if not audited, and the appellant failed to provide evidence of allowable deductions. The Madras High Court judgment was deemed inapplicable as Section 44AD differs from Section 69. The penalty was upheld, and the appeal was dismissed.
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2011 (7) TMI 1396
Issues Involved:
1. Deletion of addition made by AO on account of difference in purchase consideration and value ascertained by DVO u/s 142A.
2. Validity and jurisdiction of reference made u/s 142A by AO.
3. Justification of AO's reliance on DVO's report based on district circle rates.
4. Consideration of negative factors affecting property value.
5. Burden of proof on revenue to prove understatement of investment.
Summary:
1. Deletion of Addition Made by AO:
The revenue appealed against the CIT(A)'s order deleting the addition of Rs.11,21,476/- made by the AO due to the difference in purchase consideration shown by the assessee and the value determined by the Departmental Valuation Officer (DVO) u/s 142A of the Income-tax Act, 1961. The AO had issued a show cause notice to the assessee regarding the difference in values, which the assessee explained by highlighting various negative factors affecting the property values and providing valuation reports from M/s. R.S. Yadav & Associates.
2. Validity and Jurisdiction of Reference Made u/s 142A:
The learned DR contended that the reference made u/s 142A was valid and legal, and it was not necessary for the AO to bring on record any material to justify the understatement of purchase consideration. The CIT(A) found that the AO did not justify the need for the valuation report without making any enquiry from the purchaser or seller and without bringing any material on record to prove that the purchase consideration declared by the assessee was understated.
3. Justification of AO's Reliance on DVO's Report:
The AO relied on the DVO's report, which was based on district circle rates. The CIT(A) observed that the DVO did not independently determine the fair market value but simply adopted the district circle rates. The assessee's valuation report, which considered comparative sale instances, was ignored by the AO. The CIT(A) held that the AO was not justified in making the addition based on the DVO's report.
4. Consideration of Negative Factors Affecting Property Value:
The assessee pointed out various negative factors affecting the property values, which were not considered by the DVO. The AO rejected these contentions, stating that district circle rates account for all relevant factors. However, the CIT(A) noted that district circle rates are fixed for a specified area and do not consider the specific negative factors affecting individual plots. The CIT(A) found that the AO did not dispute the existence of these negative factors.
5. Burden of Proof on Revenue:
The CIT(A) and ITAT noted that the AO did not make any enquiry from the seller to determine if any amount over and above the declared amount was paid. The AO's addition was solely based on the DVO's report, which was not based on a scientific method of valuation. The ITAT upheld the CIT(A)'s order, citing various case laws that the burden is on the revenue to prove that the real investment exceeds the investment shown by the assessee.
Conclusion:
The ITAT upheld the CIT(A)'s order, deleting the addition of Rs.11,21,476/- made by the AO, and dismissed the revenue's appeal. The decision emphasized the need for independent and scientific valuation methods and the burden of proof on the revenue to establish understatement of investment.
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2011 (7) TMI 1395
Issues Involved:
1. Reopening of assessment.
2. Disallowance of depreciation on stock exchange membership card.
3. Disallowance of software expenses.
4. Disallowance out of repairs.
5. Disallowance of bad debts.
6. Levy of interest u/s 234D.
7. Levy of interest u/s 234C.
Summary:
1. Reopening of Assessment:
The issue of reopening of assessment was not adjudicated as it was considered merely academic in nature by both parties.
2. Disallowance of Depreciation on Stock Exchange Membership Card:
The assessee claimed depreciation on the BSE Membership Card, which was disallowed by the AO and confirmed by the CIT(A). The ITAT allowed the depreciation claim, following its own decision in the assessee's case for AY 2005-06, where it was held that "depreciation on membership card of stock exchange is to be allowed."
3. Disallowance of Software Expenses:
The AO treated software expenses as capital expenditure, allowing only partial depreciation. The CIT(A) confirmed this. The ITAT remitted the issue back to the AO to decide afresh in light of the ITAT Special Bench decision in Amway India Enterprises Vs. DCIT, directing the AO to provide a reasonable opportunity to the assessee.
4. Disallowance out of Repairs:
The AO treated the expenditure on repairs as capital expenditure, which was confirmed by the CIT(A). The ITAT remitted the matter back to the AO to examine whether the expenses were revenue or capital in nature, following its decision in the assessee's case for AY 2001-02.
5. Disallowance of Bad Debts:
The AO disallowed bad debts claimed u/s 36(1)(vii) r.w.s. 36(2), which was confirmed by the CIT(A). The ITAT allowed the bad debts claim, following its decision in the assessee's case for AY 2001-02 and the Supreme Court decision in TRF Ltd. Vs. CIT.
6. Levy of Interest u/s 234D:
The AO charged interest u/s 234D, which was confirmed by the CIT(A). The ITAT deleted the interest, following the ITAT Special Bench decision in Ekta Promoters Ltd. and the Delhi High Court decision in DIT Vs. M/s Jacobs Civil Incorporated, holding that section 234D is applicable only from AY 2004-05 onwards.
7. Levy of Interest u/s 234C:
The AO levied interest u/s 234C, confirmed by the CIT(A). The ITAT remitted the matter back to the AO to examine and decide the issue in light of the Bombay High Court decision in Prime Securities Ltd., directing the AO to provide a reasonable opportunity of hearing to the assessee.
Conclusion:
- ITA No. 3272/M/06: Partly allowed for statistical purposes.
- ITA No. 1501/M/07: Allowed.
- ITA No. 1502/M/07: Allowed for statistical purposes.
Pronounced in the open court on this 27th day of July, 2011.
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2011 (7) TMI 1394
Application for Site Clearance for Limestone Mining Project at Nongtrai village - MoEF in the prescribed form to excavate 2.0 million tonnes per annum of limestone and to transport the same to Chhatak in Bangladesh through belt conveyor (7.2 km long within Indian territory) - Nature of land - Whether ex post facto environmental and forest clearances dated 19.4.2010 and 22.4.2010 respectively stood vitiated by alleged suppression by M/s. Lafarge regarding the nature of the land - "Doctrine of proportionality" - cross-border cement manufacturing project - National Forest Policy, 1988 stood enunciated pursuant to Resolution No. 13/52-F - followed in the management of State Forests in India - HELD THAT:-The land was left unused covered with degraded forests and this was the reason for the Durbar to lease out the said land to the project proponent for mining. The village Durbar also felt that in the area unscientific limestone quarrying was going on resulting in loss of revenue both to the State as well as the inhabitants of the village particularly because the said mining was undertaken by unorganized sectors and, thus, it was decided to enter into the lease with the project proponent so that mining could be done on scientific basis. The site was also selected because of easy accessibility by road and less vegetation clearance stood involved. According to the NEHU Report, the site is located in the area on the outskirts of the forest.
Validity of ex post facto clearance - The learned Counsel appearing for SAC submitted that the MoEF, as the authority which decides on diversion of forests and which grants environmental clearances, is duty bound to examine the diversion application in the context of the 1988 Policy, particularly, where tropical moist forests are sought to be cleared by the project proponent. According to the learned Counsel, where MoEF grants environmental clearance in ignorance of the existence of a forest due to mis-declaration, it is duty bound to take severest possible action against the party that made the false declaration for profit. According to the learned Counsel, since impact assessment and EIA clearances are processes based on self declarations by the project proponent (s), the decision making by MoEF depends upon honest and cogent material supplied by the project proponent and since the said process is premised on a full and fair disclosure of relevant facts by the project proponent, in cases where material facts are not disclosed, the MoEF should withdraw both the site as well as the environmental clearances.
According to the learned Counsel, the most important input in this regard must be received by MoEF in the course of its decision making from the public which is an essential check for a failure to disclose correct facts or to have regard to environmental issues that may have escaped the attention of the project proponent. According to the learned Counsel, the requirement of public hearing is, thus, mandatory both under the 1994 Notification and the 2006 Notification. That, the requirement for payment of NPV does not automatically mean that environmental clearance is to be granted.
"Doctrine of proportionality" - Time has come for us to apply the constitutional "doctrine of proportionality" to the matters concerning environment as a part of the process of judicial review in contradistinction to merit review. It cannot be gainsaid that utilization of the environment and its natural resources has to be in a way that is consistent with principles of sustainable development and intergenerational equity, but balancing of these equities may entail policy choices. In the circumstances, barring exceptions, decisions relating to utilization of natural resources have to be tested on the anvil of the well-recognized principles of judicial review.
Accordingly, this matter stands disposed of keeping in mind various facets of the word "environment", the inputs provided by the Village Durbar of Nongtrai (including their understanding of the word "forest" and the balance between environment and economic sustainability), their participation in the decision-making process, the topography and connectivity of the site to Shillong, the letter dated 11.5.2007 of the Principal Chief Conservator of Forests and the report of Shri B.N. Jha dated 5.4.2010 (HPC) (each one of which refers to economic welfare of the tribals of Village Nongtrai), the polluter pays principle and the intergenerational equity (including the history of limestone mining in the area from 1858 and the prevalent social and customary rights of the natives and tribals). The word "development" is a relative term. One cannot assume that the tribals are not aware of principles of conservation of forest. In the present case, we are satisfied that limestone mining has been going on for centuries in the area and that it is an activity which is intertwined with the culture and the unique land holding and tenure system of the Nongtrai Village.
Therefore, we are satisfied with due diligence exercise undertaken by MoEF in the matter of forest diversion. Thus, our order herein is confined to the facts of this case.
Hence, we see no reason to interfere with the decision of MoEF granting site clearance dated 18.6.1999, EIA clearance dated 9.8.2001 read with revised environmental clearance dated 19.4.2010 and Stage-I forest clearance dated 22.4.2010. Accordingly, I.A. No. 1868 of 2007 preferred by M/s. Lafarge stands allowed with no order as to costs. Consequently, I.A. No. 2937 of 2010 preferred by SAC is dismissed. The interim order passed by this Court on 5.2.2010 shall also stand vacated. All other I. As. shall stand disposed of.
Learned Counsel for the Petitioner states that he does not press this petition. Accordingly, this transfer petition is dismissed as not pressed. The High Court is requested to proceed to hear PIL No. 40 of 2007 pending before it.
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2011 (7) TMI 1393
Issues involved: Appointment of Provisional Liquidator and asset disposal concerns.
Appointment of Provisional Liquidator: The petitioner's advocate submitted that after consent terms were agreed upon between the parties, the respondent failed to abide by them, leading to default in payments. The Court, upon being informed of this default, admitted the petition and directed the petitioner to issue a notice of admission. Subsequently, the petitioner published the advertisement as directed by the Court. The respondent, however, did not make any settlement offer or payment even after the advertisement was issued. Due to concerns that the respondent might attempt to dispose of its assets, the Official Liquidator attached to the Court was appointed as the Provisional Liquidator. The Provisional Liquidator was granted the authority to take necessary steps and the respondent was directed to abide by the orders.
Asset Disposal Concerns: The petitioner expressed strong apprehension that the respondent might try to dispose of its assets after the advertisement was published. To prevent this, the Provisional Liquidator was appointed and the respondent, along with its agents, was restrained from alienating the properties of the company in any manner. The Provisional Liquidator was given three weeks to take inventory and file an interim report.
Conclusion: The Court appointed the Official Liquidator as the Provisional Liquidator to address the default in payments by the respondent and concerns regarding potential asset disposal. The respondent was directed to comply with the orders, and the Provisional Liquidator was granted authority to take necessary steps to safeguard the company's assets.
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2011 (7) TMI 1392
Application for interim bail - withdrawn application for regular bail - Whether the petitioner, on the basis of medical record produced by him, has been able to make out a case for his release on interim bail? - HUTT procedure - petitioner was sent to judicial custody on dismissal of his bail application by the Trial Court - During his stay in jail, the petitioner complained of medical problems - He was accordingly sent to G.B. Pant Hospital for medical examination and treatment -
HELD THAT- The medical record placed on record by the petitioner starts from the year 1991. From the aforesaid record, it transpires that the petitioner underwent by-pass surgery around the year 2007. Thereafter, for a continuous period of 4 years, there is no medical record, which prima facie indicates that during the period from 2007 to 2011, the petitioner did not suffer any medical complication.
On perusal of the report from the Board of Doctors of G.B. Pant Hospital, the medical condition of the petitioner appears to be stable and he has been advised to continue treatment and precautions as recommended to him at the time of discharge from G.B. Pant Hospital on 24th June, 2011. The report does not suggest that his medical condition cannot be managed in jail hospital.
As per current medical status report of the petitioner submitted by the Board of Doctors constituted by the Medical Superintendent, G.B. Pant Hospital. It is recorded in that report that when Head-up- Tilt Test(HUTT) was being conducted, the petitioner became unconscious with unrecordable blood pressure and slowing of pulse to 47 beats/minutes, suggesting neurocardiogenic Syncope as the cause, predominantly vasodepressor type. Ld counsel has urged that such a situation can re-occur in jail and this may even prove fatal.
I am not convinced with the aforesaid submissions. HUTT procedure is an invasive procedure. Therefore, a possibility cannot be ruled out that the complication in the medical condition of the petitioner during HUTT test occurred only because of the invasive nature of the procedure.
On careful consideration of the previous medical reports of the petitioner and the medical reports received from the Board of Doctors of G.B. Pant Hospital, it is apparent that since his detention in jail, the condition of the petitioner is stable and it is being properly managed by medication. Thus, I do not find it a fit case for grant of interim bail on medical grounds, particularly when the release of the petitioner for a period of 4-6 weeks would not change his medical history or situation.
Application is, accordingly, dismissed.
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2011 (7) TMI 1391
Issues involved:
1. Disallowance of payment made to ex-partner/spouses of deceased partners.
2. Addition made on account of difference between the book value of amount lying in Exchange Earner Foreign Currency Account.
Issue 1 - Disallowance of payment to ex-partner/spouses:
The Revenue raised the issue of disallowing a payment of Rs. 32,85,000 made to ex-partner/spouses of deceased partners. The Hon'ble Tribunal upheld the deletion of this addition by the CIT(A), stating that the payment was made on account of overriding title on the profits. The Tribunal allowed the claim of the Assessee. The Revenue argued that a similar question raised in a previous case had been rejected by the Court. The Court held that the question cannot be entertained based on the previous decision.
Issue 2 - Addition on account of difference in EEFC Account:
Regarding the addition made on account of the difference between the book value of the amount in the Exchange Earner Foreign Currency (EEFC) Account, the ITAT found that the assessee firm had a balance of U.S. dollars 2,38,168.84 in the EEFC Account as on 31st March, 2003. The rupee valuation of this balance in the books was Rs. 12,672,436. The assessing officer sought to tax the differential amount, which was deleted by the ITAT. The ITAT reasoned that the assessee followed a cash system of accounting, and gains on exchange rate could only be taxed when the amounts in the EEFC account were utilized. The Court found no fault in the ITAT's reasoning and dismissed the appeal accordingly.
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2011 (7) TMI 1390
Issues involved: Interpretation of joint development agreement, validity of arbitration clause, authority of signatories, maintainability of petition under Section 11 of the Arbitration and Conciliation Act, 1996.
Interpretation of Joint Development Agreement:
The appellant alleged a joint development agreement was signed between "Father A. John Bosco" and the appellant regarding a property, with a clause for dispute resolution through arbitration. The Respondent Society claimed the President was not authorized to deal with the property, rendering the agreement null and void. The High Court held the agreement was between the Society and the Appellant, making the petition under Section 11 maintainable.
Validity of Arbitration Clause:
The Appellant argued the Society was not a party to the joint development agreement, thus the arbitration clause could not be invoked. Additionally, serious allegations of unfair means and undue influence should be decided by a civil court, not an arbitral tribunal. The Appellant's other contentions on title and merits were deemed irrelevant to the Section 11 proceedings.
Authority of Signatories:
Upon examination, it was found that the joint development agreement was signed by the President of the Gaunellian Society, not in his personal capacity. The Respondent Society was the first party to the agreement, making the petition under Section 11 maintainable as both parties were signatories to the agreement.
Maintainability of Petition under Section 11:
The Appellant claimed the owner of the property was Father A. John Bosco, not the Society. However, as the agreement was signed by the Society's President, the contention that the owner was not the Society was deemed absurd. The validity of the joint development agreement would be examined by the Arbitrator, regardless of allegations of unfair terms.
Conclusion:
The appeal was dismissed, with costs imposed on the Appellant. The Arbitrator was urged to proceed expeditiously, considering the delay caused by the special leave petition. The judgment focused on identifying the executant of the agreement, without delving into the authorization of Father A. John Bosco or the property's title.
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2011 (7) TMI 1389
The High Court of Punjab and Haryana ruled that migrants from Jammu and Kashmir or transferred employees who retired should not vacate official accommodation until rehabilitated. The judgment cited Supreme Court and Delhi High Court decisions, and the appeal was dismissed.
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