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• 2013 (9) TMI 1320
  
  ISSUES PRESENTED and CONSIDERED

  The core legal questions considered in this judgment are:

  1. Whether the plaintiffs are entitled to the amount claimed in the suit along with interest?

  2. Whether the plaintiffs are entitled to a charge over the suit property?

  3. Whether the suit for refund of the advance amount is barred by limitation?

  ISSUE-WISE DETAILED ANALYSIS

  1. Entitlement to the Amount Claimed and Charge Over the Property

  Relevant Legal Framework and Precedents: The plaintiffs sought the refund of an advance amount paid under an agreement for sale, which was governed by Section 55(6)(b) of the Transfer of Property Act, 1882. This provision grants a buyer a charge on the property for the amount of purchase money paid and interest, unless the buyer improperly declines to accept delivery.

  Court's Interpretation and Reasoning: The trial court initially found in favor of the plaintiffs, granting them the refund and a charge over the property. However, the appellate court reversed this decision, concluding that the plaintiffs had breached the contract and that the advance amount was rightfully forfeited.

  Key Evidence and Findings: The agreement stipulated a sale consideration of Rs. 10,61,000, with an advance of Rs. 2,50,000 paid. The plaintiffs alleged non-cooperation by the defendants in obtaining necessary approvals, leading them to terminate the agreement.

  Application of Law to Facts: The appellate court emphasized the plaintiffs' alleged actions that rendered the land unfit for cultivation, justifying the forfeiture of the advance.

  Treatment of Competing Arguments: The plaintiffs argued readiness to perform their obligations, while the defendants claimed damages due to the plaintiffs' actions on the land. The appellate court sided with the defendants, but this was later challenged in the second appeal.

  Conclusions: The second appeal court found the appellate court's conclusion on limitation incorrect, requiring a remand for further consideration on merits excluding limitation.

  2. Limitation for Filing the Suit

  Relevant Legal Framework and Precedents: The limitation period for enforcing payment of money charged upon immovable property is governed by Article 62 of the Limitation Act, 1963, which provides a 12-year period. The appellate court erroneously applied Article 54, which pertains to specific performance and prescribes a 3-year period.

  Court's Interpretation and Reasoning: The second appeal court clarified that the suit for refund of the advance amount is governed by Article 62, not Article 54, due to the statutory charge under Section 55(6)(b) of the Transfer of Property Act.

  Key Evidence and Findings: The agreement dated 12.04.1995 prescribed a one-year period for performance, expiring on 12.04.1996. The plaintiffs issued a cancellation notice on 16.04.1998, and the suit was filed on 26.08.2001.

  Application of Law to Facts: The court concluded that the limitation period began on 12.04.1996, with a 12-year period applicable under Article 62, making the suit timely.

  Treatment of Competing Arguments: The defendants argued the suit was time-barred under Article 54, but the second appeal court found this inapplicable, emphasizing the statutory charge and Article 62's 12-year period.

  Conclusions: The second appeal court held that the suit was filed within the limitation period, reversing the appellate court's dismissal based on limitation.

  SIGNIFICANT HOLDINGS

  Preserve Verbatim Quotes of Crucial Legal Reasoning: "The buyer shall have a statutory charge over the immovable property under Section 55(6)(b) of the Transfer of Property Act, 1882...limitation for refund of advance money with interest under an agreement for sale of immovable property is governed by Article 62 of the Limitation Act."

  Core Principles Established: The limitation for refunding advance money under an agreement for sale of immovable property is 12 years, not 3 years, due to the statutory charge provided by Section 55(6)(b) of the Transfer of Property Act.

  Final Determinations on Each Issue: The second appeal court concluded that the suit was timely and remanded the case to the lower appellate court for reconsideration on issues other than limitation, correcting the misapplication of the Limitation Act by the appellate court.

  ---

• 2013 (9) TMI 1319
  

  1. ISSUES PRESENTED and CONSIDERED

  The core legal issues considered in this judgment include:

  • Whether the petitioner, a financial establishment, was operating within the legal framework when collecting deposits from the public.
  • The applicability of the Tripura Protection of Interests of Depositors (in Financial Establishments) Act, 2000, and its amendments, to the petitioner's operations.
  • Whether the petitioner was afforded a reasonable opportunity to present their case before the issuance of restraining orders.
  • The jurisdictional conflict between the state authority and central regulatory bodies like the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI).
  • The legality of the actions taken by the Sub-Divisional Magistrates (SDMs) under the state act against the petitioner.

  2. ISSUE-WISE DETAILED ANALYSIS

  Issue 1: Legality of the Petitioner's Operations

  • Legal Framework and Precedents: The Tripura Protection of Interests of Depositors Act, 2000, defines "deposit" and "financial establishment" and provides for the regulation of such entities. The Act was amended in 2011 to strengthen its provisions.
  • Court's Interpretation and Reasoning: The court examined whether the petitioner was operating as a financial establishment under the Act. It found that the petitioner was collecting deposits under the guise of hotel bookings and other schemes, which fell within the Act's purview.
  • Key Evidence and Findings: The petitioner failed to produce licenses or approvals from SEBI or RBI, which are necessary for conducting such financial activities.
  • Application of Law to Facts: The court applied the definitions and provisions of the state act to determine that the petitioner's activities were illegal without proper authorization from central regulatory bodies.
  • Treatment of Competing Arguments: The petitioner argued that their activities were not covered by the state act, but the court found this unconvincing due to the lack of necessary regulatory approvals.
  • Conclusions: The court concluded that the petitioner's operations were illegal under the state act and upheld the restraining orders issued by the SDMs.

  Issue 2: Jurisdictional Conflict

  • Legal Framework and Precedents: The RBI Act and SEBI Act provide central regulatory frameworks for financial institutions and collective investment schemes, respectively.
  • Court's Interpretation and Reasoning: The court noted that while central laws govern certain aspects of financial regulation, the state act had its own jurisdiction over financial establishments operating within Tripura.
  • Key Evidence and Findings: The petitioner did not demonstrate compliance with central regulatory requirements, which would have exempted them from the state act.
  • Application of Law to Facts: The court found that the state act's provisions were applicable unless explicitly overridden by central regulations, which was not the case here.
  • Treatment of Competing Arguments: The petitioner claimed exclusive jurisdiction of central bodies, but the court held that state authorities could act in the absence of central compliance.
  • Conclusions: The court upheld the jurisdiction of the state authorities to regulate the petitioner's activities under the state act.

  Issue 3: Reasonable Opportunity for Hearing

  • Legal Framework and Precedents: The principles of natural justice require that parties be given a fair opportunity to present their case before adverse actions are taken.
  • Court's Interpretation and Reasoning: The court examined whether the petitioner was given adequate opportunity to respond to the show cause notices and participate in hearings.
  • Key Evidence and Findings: The court found that the petitioner had been issued show cause notices and had opportunities to respond, which they failed to utilize effectively.
  • Application of Law to Facts: The court determined that the procedural requirements for a fair hearing were met, despite the petitioner's claims to the contrary.
  • Treatment of Competing Arguments: The petitioner argued that they were not given a fair chance, but the court found that the procedural steps taken were adequate.
  • Conclusions: The court concluded that the petitioner was afforded a reasonable opportunity to present their case.

  3. SIGNIFICANT HOLDINGS

  • Preserve verbatim quotes of crucial legal reasoning: "The entire business operation as narrated is unlawful and in derogation of the said financial regulations. The petitioner cannot have any legal standing to challenge the action which is otherwise indefensible."
  • Core Principles Established: The court reaffirmed the applicability of the state act in regulating financial establishments within its jurisdiction, especially when central regulatory compliance is absent.
  • Final Determinations on Each Issue: The court upheld the actions taken by the state authorities under the Tripura Protection of Interests of Depositors Act, 2000, and dismissed the writ petitions filed by the petitioner.

  The judgment underscores the importance of regulatory compliance for financial establishments and clarifies the interplay between state and central regulatory frameworks. The petitioner's failure to demonstrate necessary approvals from central bodies like SEBI and RBI was pivotal in the court's decision to uphold the actions taken by the state authorities.

  ---

• 2013 (9) TMI 1318
  
  Issues Involved:
  1. Validity of proceedings initiated u/s 153A.
  2. Disallowance of vehicle maintenance expenses.
  3. Depreciation on vehicles.
  4. Addition on account of undisclosed sales.
  5. Addition on account of excess stock.
  
  Summary:
  
  1. Validity of Proceedings Initiated u/s 153A:
  The assessee contended that the proceedings initiated u/s 153A and the order passed by the AO were without jurisdiction, unlawful, and invalid. The CIT(A) rejected these contentions, but during the hearing, the assessee did not press these grounds. Therefore, grounds No. 1 to 10, 12, and 13 were dismissed as not pressed.
  
  2. Disallowance of Vehicle Maintenance Expenses:
  In ITA No. 1313/Chd/2012, the AO made an addition for personal usage of the vehicle, disallowing 1/5th of the expenses. The CIT(A) confirmed this addition. However, the ITAT found that the original assessment had already disallowed a sum of Rs. 60,000 for personal usage, and no new material was found during the search. Therefore, the ITAT deleted the addition.
  
  In ITA No. 1314/Chd/2012, similar facts were present, and the ITAT followed the same reasoning to delete the addition.
  
  In ITA No. 1315/Chd/2012, the ITAT directed the AO to disallow only 1/10th of vehicle maintenance towards personal usage, as no addition was made originally, and there was no evidence of FBT paid.
  
  In ITA No. 1316/Chd/2012, the AO disallowed depreciation on cars, allowing only 15% instead of 50%. The CIT(A) confirmed this, and the ITAT found no force in the assessee's submissions, confirming the CIT(A)'s order.
  
  3. Depreciation on Vehicles:
  The ITAT confirmed that depreciation on cars should be allowed at 15% instead of 50%, as the vehicles did not qualify as "commercial vehicles" under the relevant Income Tax Rules.
  
  4. Addition on Account of Undisclosed Sales:
  In ITA No. 1317/Chd/2012, the AO added Rs. 3,34,965 as income from undisclosed sales based on seized documents. The CIT(A) confirmed this, and the ITAT agreed, finding no correlation between unrecorded sales and the stock found during the search.
  
  Similarly, for another set of documents, the AO added Rs. 4,58,106 as profit from undisclosed sales. The CIT(A) and ITAT confirmed this addition, again finding no correlation with the surrendered stock.
  
  5. Addition on Account of Excess Stock:
  The AO added Rs. 2,08,35,789 for unexplained investment in stock (gold) beyond the surrendered amount. The CIT(A) deleted this addition, accepting the assessee's argument that the stock was valued at market price during the search, while the trading account was at cost price. The ITAT confirmed the CIT(A)'s order, finding no difference in the physical quantity of stock and the amount surrendered.
  
  Conclusion:
  All appeals of the assessee were partly allowed, and the appeal of the revenue was dismissed. The order was pronounced in the open court on 30.9.2013.

  ---

• 2013 (9) TMI 1316
  

  1. ISSUES PRESENTED and CONSIDERED

  The core legal issues presented and considered in this judgment are:

  • Whether the Scheme of Amalgamation approved by the Reserve Bank of India (RBI) under Section 44(A)(4) of the Banking Regulation Act, 1949, and subsequently upheld by the Apex Court, renders the company petition filed under Sections 235(2) and 237(b) of the Companies Act, 1956, infructuous.
  • Whether there is any surviving grievance or legal question that warrants further investigation into the affairs of the Bank of Rajasthan after its merger with ICICI Bank.
  • Whether the High Court has the jurisdiction under Section 10F of the Companies Act, 1956, to entertain the appeal based on the existence of a question of law arising from the Company Law Board's order.

  2. ISSUE-WISE DETAILED ANALYSIS

  Issue 1: Impact of the Scheme of Amalgamation and its Approval

  • Relevant legal framework and precedents: The Scheme of Amalgamation was sanctioned under Section 44(A)(4) of the Banking Regulation Act, 1949, which involves the RBI's approval. The appellant challenged this scheme before the Apex Court, which dismissed the writ petition, thereby upholding the amalgamation.
  • Court's interpretation and reasoning: The court noted that the Scheme of Amalgamation, once approved by the RBI and upheld by the Apex Court, became binding on all parties, including shareholders. The court agreed with the Company Law Board's (CLB) view that the relief sought in the company petition no longer survived post-amalgamation.
  • Key evidence and findings: The court referenced the approval of the scheme by the RBI and the dismissal of the appellant's writ petition by the Apex Court as key factors in determining the petition's irrelevance.
  • Application of law to facts: The court applied the legal principle that once a higher authority (RBI and Apex Court) has sanctioned a scheme, lower tribunals or courts should not interfere unless a substantial question of law arises.
  • Treatment of competing arguments: The appellant argued that the investigation into the Bank of Rajasthan's affairs was still necessary. However, the respondent contended that no further investigation was warranted post-merger, a view the court upheld.
  • Conclusions: The court concluded that the company petition was rendered infructuous due to the binding nature of the amalgamation scheme and the absence of any surviving legal grievances.

  Issue 2: Jurisdiction under Section 10F of the Companies Act, 1956

  • Relevant legal framework and precedents: Section 10F of the Companies Act, 1956, allows appeals to the High Court on questions of law arising from orders of the Company Law Board.
  • Court's interpretation and reasoning: The court emphasized that its jurisdiction under Section 10F is limited to questions of law. It found that the appellant's grievances were factual rather than legal, thus falling outside the court's purview.
  • Key evidence and findings: The court observed that the appellant's primary grievance had been addressed by the Apex Court's decision, and no new legal questions were raised.
  • Application of law to facts: The court applied the principle that factual disputes do not warrant appellate review under Section 10F.
  • Treatment of competing arguments: The appellant sought to invoke the court's jurisdiction by framing the issue as a legal question. However, the court determined that no substantive legal question was presented.
  • Conclusions: The court concluded that there was no question of law arising from the CLB's order that merited appellate review, leading to the dismissal of the appeal.

  3. SIGNIFICANT HOLDINGS

  • Preserve verbatim quotes of crucial legal reasoning: "In the considered opinion of this Court after the primary grievance of the appellant being finally crystallized, investigating the affairs of transferor Bank of Rajasthan does not survive any further."
  • Core principles established: The binding nature of a Scheme of Amalgamation once approved by the RBI and upheld by the Apex Court; the limitation of appellate jurisdiction under Section 10F to questions of law.
  • Final determinations on each issue: The court determined that the company petition was rendered infructuous due to the binding amalgamation scheme and that no question of law arose from the CLB's order, leading to the dismissal of the appeal.

  ---

• 2013 (9) TMI 1315
  

  1. ISSUES PRESENTED and CONSIDERED

  The core legal questions addressed in this judgment are:

  • Whether the State Bank of India (SBI) has a valid claim to the proceeds from the sale of immovable properties and plants and machineries of the company in liquidation, alongside other secured creditors.
  • Whether a charge or mortgage was created in favor of SBI over the immovable properties and assets of the company in liquidation.
  • Whether the Official Liquidator erred in excluding SBI's claim in the distribution of proceeds from the company's assets.

  2. ISSUE-WISE DETAILED ANALYSIS

  Issue 1: SBI's Claim to Proceeds

  • Relevant Legal Framework and Precedents: The Companies Act, particularly sections 124 and 125, which deal with the registration of charges and the requirement for such charges to be documented and registered to be valid against the Official Liquidator.
  • Court's Interpretation and Reasoning: The court examined whether SBI's claim was on par with other secured creditors. It found that SBI did not have a registered charge over the immovable properties and plants and machineries, as required by law.
  • Key Evidence and Findings: The court noted the absence of a registered charge or mortgage in the documents provided by SBI, including the agreement dated March 5, 1990.
  • Application of Law to Facts: The court applied sections 124 and 125 of the Companies Act, determining that SBI's claim could not be considered without a registered charge.
  • Treatment of Competing Arguments: SBI argued that a charge was created orally and through correspondence. The court rejected this, citing the lack of formal registration.
  • Conclusions: SBI's claim to the proceeds from the sale of immovable properties and plants and machineries was not upheld.

  Issue 2: Creation of Charge or Mortgage

  • Relevant Legal Framework and Precedents: Section 58 and section 100 of the Transfer of Property Act concerning mortgages and charges, respectively, and the necessity for explicit intent to create such interests.
  • Court's Interpretation and Reasoning: The court referenced the Supreme Court judgment in J.K. (Bom) (P.) Ltd. v. New Kaiser-I-Hind Spg. & Wvg. Co. Ltd., which requires express intention to create a charge or mortgage.
  • Key Evidence and Findings: The agreement dated March 5, 1990, did not indicate any express intention to create a charge or mortgage over the company's assets.
  • Application of Law to Facts: The absence of any registered charge or mortgage led the court to conclude that no such interest was created in favor of SBI.
  • Treatment of Competing Arguments: SBI's argument of an oral charge was dismissed due to the lack of formal documentation and registration.
  • Conclusions: No charge or mortgage was created in favor of SBI over the company's immovable properties and assets.

  Issue 3: Official Liquidator's Exclusion of SBI's Claim

  • Relevant Legal Framework and Precedents: The Companies Act provisions on the distribution of assets during liquidation.
  • Court's Interpretation and Reasoning: The court found no illegality in the Official Liquidator's actions, as SBI's claim lacked the necessary legal basis.
  • Key Evidence and Findings: The Official Liquidator's affidavit and supplementary affidavit did not support SBI's claim.
  • Application of Law to Facts: The court upheld the Official Liquidator's decision to exclude SBI from the distribution of proceeds from the sale of immovable properties and assets.
  • Treatment of Competing Arguments: SBI's objections were dismissed due to the lack of a registered charge or mortgage.
  • Conclusions: The Official Liquidator's exclusion of SBI's claim was upheld.

  3. SIGNIFICANT HOLDINGS

  • Preserve Verbatim Quotes of Crucial Legal Reasoning: "This Court, therefore, does not find that the Official Liquidator has committed any illegality in adjudicating the claims keeping the bank excluded in respect of an amount realized from the immovable properties and the plants and machineries of the company in liquidation."
  • Core Principles Established: A charge or mortgage over immovable properties and assets must be explicitly documented and registered to be valid against the Official Liquidator during liquidation proceedings.
  • Final Determinations on Each Issue: SBI's claim was not upheld due to the absence of a registered charge or mortgage. The Official Liquidator's actions were deemed legal and appropriate.

  ---

• 2013 (9) TMI 1314
  

  1. ISSUES PRESENTED and CONSIDERED

  The core legal questions considered in this judgment are:

  • Whether the examination of the judgment-debtor or its directors residing outside the jurisdiction of the executing court is permissible under Section 39(4) of the Code of Civil Procedure (CPC).
  • Whether directing the judgment-debtor to file an affidavit of assets constitutes execution of a decree and if it is barred by Section 39(4) of the CPC.
  • The applicability of precedents and legal principles concerning the execution of decrees against persons or properties outside the jurisdiction of the court.

  2. ISSUE-WISE DETAILED ANALYSIS

  Issue 1: Examination of Judgment-Debtor Outside Jurisdiction

  • Relevant Legal Framework and Precedents: Section 39(4) of the CPC restricts the execution of a decree against any person or property outside the local limits of the court's jurisdiction. Order 21, Rule 41 of the CPC allows for the examination of judgment-debtors.
  • Court's Interpretation and Reasoning: The court interpreted that the examination of a judgment-debtor or its officers is not equivalent to executing a decree. It is merely a step towards execution by identifying assets.
  • Key Evidence and Findings: The directors of the judgment-debtor were examined to ascertain the financial status and assets within the jurisdiction of the court.
  • Application of Law to Facts: The court found that since the examination is not execution per se, Section 39(4) does not apply at this stage.
  • Treatment of Competing Arguments: The judgment-debtor argued that examination is barred as they reside outside jurisdiction, but the court distinguished between examination and execution.
  • Conclusions: The court concluded that the examination of judgment-debtors residing outside jurisdiction is permissible as it is a preliminary step, not execution.

  Issue 2: Filing of Affidavit of Assets

  • Relevant Legal Framework and Precedents: Order 21, Rule 41(2) of the CPC empowers the court to direct the filing of an affidavit of assets by the judgment-debtor.
  • Court's Interpretation and Reasoning: The court reasoned that filing an affidavit of assets is part of the process to ascertain the judgment-debtor's financial status and does not constitute execution.
  • Key Evidence and Findings: The affidavit of assets is intended to identify the judgment-debtor's assets for potential execution.
  • Application of Law to Facts: The court applied Order 21, Rule 41(2) to mandate the filing of an affidavit without breaching Section 39(4).
  • Treatment of Competing Arguments: The judgment-debtor's contention that filing an affidavit is barred was rejected as it does not equate to execution.
  • Conclusions: The court held that the requirement to file an affidavit of assets is valid and not barred by Section 39(4).

  3. SIGNIFICANT HOLDINGS

  • Preserve Verbatim Quotes of Crucial Legal Reasoning: "By directing oral examination of a judgment-debtor or its officers the decree is not being executed. It may be a step in executing the decree but it is surely not execution of decree."
  • Core Principles Established: Examination and asset disclosure by judgment-debtors are preliminary steps and not execution, thus not barred by jurisdictional limits under Section 39(4).
  • Final Determinations on Each Issue: The court dismissed the application challenging the examination and affidavit directives, affirming their validity as preliminary steps in execution.

  The judgment underscores the distinction between preparatory steps and actual execution of decrees, clarifying the scope of Section 39(4) in the context of judgment-debtor examinations and asset disclosures.

  ---

• 2013 (9) TMI 1313
  
  In the case cited as 2013 (9) TMI 1313 - DELHI HIGH COURT, the Delhi High Court, presided over by Hon'ble Justices Sanjiv Khanna and Sanjeev Sachdeva, addressed a Public Interest Writ Petition filed by a society against respondent No.4, a company registered in Secundrabad, Andhra Pradesh, and respondent No.3, the Securities and Exchange Board of India (SEBI) located in Mumbai.
  
  The petitioner argued that the Delhi High Court had jurisdiction since SEBI has a regional office in Delhi, and filing elsewhere would incur additional expenses. However, the court noted that no part of the cause of action arose in Delhi, and the regional office in Delhi was not involved in the investigation. The court emphasized that "location of Regional office of the respondent No.3 will not confer territorial jurisdiction on this Court," as the office in question did not conduct any investigations related to the case.
  
  Ultimately, the court concluded that it lacked territorial jurisdiction and returned the petition, granting the petitioner the liberty to file in the appropriate High Court. The court did not comment on the merits of the case.

  ---

• 2013 (9) TMI 1312
  

  1. ISSUES PRESENTED and CONSIDERED

  The core legal questions considered in this judgment are:

  • Whether the Securities and Exchange Board of India (SEBI) had the jurisdiction to issue a second show cause notice dated 26/12/2011 to the Petitioner under Sections 11, 11B, and 11(4) of the SEBI Act, 1992, after a consent order had been passed on 21/7/2008 regarding the same cause of action.
  • Whether the principle of double jeopardy or the doctrine of res judicata applies to bar the second set of proceedings initiated by SEBI.
  • Whether the delay in issuing the second show cause notice was unreasonable and violated the principles of natural justice.
  • Whether the writ petition is maintainable in light of the alternative remedy available through the Securities Appellate Tribunal.

  2. ISSUE-WISE DETAILED ANALYSIS

  Jurisdiction of SEBI to Issue the Second Show Cause Notice

  • Legal Framework and Precedents: SEBI Act, 1992, particularly Sections 11, 11B, and 11(4), and the SEBI (Prohibition of Insider Trading) Regulations, 1992.
  • Court's Interpretation and Reasoning: The court examined whether the consent order dated 21/7/2008 precluded SEBI from initiating further proceedings for the same cause of action.
  • Key Evidence and Findings: The consent order did not explicitly reserve SEBI's right to initiate further proceedings, but SEBI argued that the second notice was independent of the adjudication proceedings settled by the consent order.
  • Application of Law to Facts: The court noted that the consent order was limited to the adjudication proceedings under Section 15G and did not preclude SEBI from exercising its powers under Sections 11 and 11B.
  • Treatment of Competing Arguments: The Petitioner argued that the consent order settled all related issues, while SEBI maintained that the order only settled the specific adjudication proceedings.
  • Conclusions: The court found that SEBI retained the jurisdiction to issue the second show cause notice under its statutory powers.

  Application of Double Jeopardy and Res Judicata

  • Legal Framework and Precedents: Article 20(2) of the Constitution of India, the principle of double jeopardy, and the doctrine of res judicata.
  • Court's Interpretation and Reasoning: The court considered whether the second proceedings constituted double jeopardy or were barred by res judicata.
  • Key Evidence and Findings: The court noted that the first proceedings were civil in nature and did not constitute a criminal prosecution, which is necessary for double jeopardy to apply.
  • Application of Law to Facts: The court determined that the proceedings under Sections 11 and 11B were distinct from the adjudication proceedings under Section 15G.
  • Treatment of Competing Arguments: The Petitioner argued that the second proceedings were barred, while SEBI contended that the proceedings were independent and not subject to res judicata.
  • Conclusions: The court held that neither double jeopardy nor res judicata applied to bar the second proceedings.

  Delay in Issuing the Second Show Cause Notice

  • Legal Framework and Precedents: Principles of natural justice and reasonable time for initiating proceedings.
  • Court's Interpretation and Reasoning: The court examined whether the delay in issuing the second show cause notice was justified.
  • Key Evidence and Findings: The court acknowledged the delay but noted that no statutory limitation period applied to SEBI's actions under Sections 11 and 11B.
  • Application of Law to Facts: The court found that the delay did not constitute a violation of natural justice, as SEBI's powers were not time-barred.
  • Treatment of Competing Arguments: The Petitioner argued that the delay was unreasonable, while SEBI maintained that its actions were within its statutory powers.
  • Conclusions: The court concluded that the delay did not invalidate the second show cause notice.

  Maintainability of the Writ Petition

  • Legal Framework and Precedents: Availability of alternative remedies through the Securities Appellate Tribunal.
  • Court's Interpretation and Reasoning: The court considered whether the writ petition was maintainable given the alternative remedy.
  • Key Evidence and Findings: The court noted that the Securities Appellate Tribunal provided a specific dispute resolution mechanism for SEBI-related matters.
  • Application of Law to Facts: The court emphasized the availability of an effective and specialized appellate forum.
  • Treatment of Competing Arguments: The Petitioner argued for the writ petition's maintainability, citing jurisdictional issues, while SEBI highlighted the alternative remedy.
  • Conclusions: The court dismissed the writ petition, directing the Petitioner to approach the Securities Appellate Tribunal.

  3. SIGNIFICANT HOLDINGS

  • Verbatim Quotes: "The consent order dated 21/7/2008 only disposes of the said proceedings pending against the Noticee under the Securities Exchange Board of India Act, 1992 in the matter of Polaris Software Lab Ltd."
  • Core Principles Established: The consent order does not preclude SEBI from exercising its statutory powers under Sections 11 and 11B for independent proceedings.
  • Final Determinations on Each Issue: SEBI had the jurisdiction to issue the second show cause notice; the principles of double jeopardy and res judicata did not apply; the delay in issuing the notice was not unreasonable; and the writ petition was not maintainable due to the availability of an alternative remedy.

  ---

• 2013 (9) TMI 1311
  

  1. ISSUES PRESENTED and CONSIDERED

  The judgment primarily revolves around the following core legal questions:

  • Whether the Returning Officers have the authority to reject nomination papers that are accompanied by affidavits with incomplete or blank particulars.
  • Whether filing an affidavit with blank particulars violates the fundamental right of citizens to know about the candidates, as guaranteed under Article 19(1)(a) of the Constitution of India.
  • How the provisions of the Representation of the People Act, 1951 (RP Act), particularly Sections 33A, 36, and 125A, apply to the issue of incomplete affidavits.
  • Whether the judgment in People's Union for Civil Liberties (PUCL) restricts the Returning Officers from rejecting nomination papers due to incomplete affidavits.

  2. ISSUE-WISE DETAILED ANALYSIS

  Issue 1: Authority of Returning Officers to Reject Incomplete Affidavits

  • Relevant Legal Framework and Precedents: The court examined Sections 33A, 36, and 125A of the RP Act. It also considered precedents like the Association for Democratic Reforms case and Shaligram Shrivastava v. Naresh Singh Patel.
  • Court's Interpretation and Reasoning: The court interpreted that the Returning Officers have the power to reject nomination papers if the affidavits are incomplete, as this would hinder the verification process necessary to determine a candidate's qualification or disqualification.
  • Key Evidence and Findings: The court found that incomplete affidavits impede the Returning Officer's duty to ensure the transparency and integrity of the electoral process.
  • Application of Law to Facts: The court applied the provisions of the RP Act to conclude that filing an affidavit with blank particulars constitutes a defect of substantial character, warranting rejection of the nomination paper.
  • Treatment of Competing Arguments: The court dismissed the argument that incomplete affidavits should be treated on par with false affidavits, emphasizing the fundamental right to know about candidates.
  • Conclusions: The court concluded that Returning Officers are justified in rejecting nomination papers with incomplete affidavits.

  Issue 2: Violation of Fundamental Right to Know

  • Relevant Legal Framework and Precedents: Article 19(1)(a) of the Constitution and the Association for Democratic Reforms case were pivotal in establishing the right to know as a fundamental right.
  • Court's Interpretation and Reasoning: The court reasoned that citizens have a fundamental right to be informed about candidates, which is integral to the democratic process.
  • Key Evidence and Findings: The court highlighted that incomplete affidavits undermine the voters' right to make informed decisions.
  • Application of Law to Facts: The court applied Article 19(1)(a) to affirm that the right to know is compromised when affidavits are incomplete.
  • Treatment of Competing Arguments: The court rejected the Union of India's contention that incomplete affidavits should be treated similarly to false affidavits, as it would breach the right to know.
  • Conclusions: The court concluded that accepting incomplete affidavits violates the fundamental right of citizens to know about their candidates.

  Issue 3: Application of RP Act Provisions

  • Relevant Legal Framework and Precedents: Sections 33A, 36, and 125A of the RP Act were analyzed in the context of the issue.
  • Court's Interpretation and Reasoning: The court interpreted these sections to mean that incomplete affidavits are a substantial defect, justifying rejection of the nomination papers.
  • Key Evidence and Findings: The court found that the RP Act mandates full disclosure in affidavits to ensure transparency.
  • Application of Law to Facts: The court applied these provisions to affirm the Returning Officers' authority to reject incomplete affidavits.
  • Treatment of Competing Arguments: The court dismissed the argument that prosecution under Section 125A should suffice, stating that the rejection of nomination papers is a necessary measure.
  • Conclusions: The court concluded that the RP Act supports the rejection of nomination papers with incomplete affidavits.

  Issue 4: Impact of PUCL Judgment

  • Relevant Legal Framework and Precedents: The PUCL judgment was examined to determine its impact on the rejection of incomplete affidavits.
  • Court's Interpretation and Reasoning: The court clarified that the PUCL judgment does not prevent the rejection of nomination papers with blank affidavits.
  • Key Evidence and Findings: The court found that the PUCL judgment focused on the impracticality of verifying asset details at the time of scrutiny, not on incomplete affidavits.
  • Application of Law to Facts: The court applied the reasoning from PUCL to distinguish between incomplete and false affidavits.
  • Treatment of Competing Arguments: The court rejected the interpretation that PUCL bars rejection of incomplete affidavits, emphasizing the need for transparency.
  • Conclusions: The court concluded that PUCL does not impede the rejection of nomination papers due to incomplete affidavits.

  3. SIGNIFICANT HOLDINGS

  • Preserve Verbatim Quotes of Crucial Legal Reasoning: "The voter has the elementary right to know full particulars of a candidate who is to represent him in the Parliament/Assemblies and such right to get information is universally recognized."
  • Core Principles Established: The court established that the right to know about candidates is a fundamental right under Article 19(1)(a), and that incomplete affidavits violate this right.
  • Final Determinations on Each Issue: The court determined that Returning Officers have the authority to reject nomination papers with incomplete affidavits, that such rejection is necessary to uphold the fundamental right to know, and that the PUCL judgment does not bar such rejection.

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• 2013 (9) TMI 1310
  
  The Kerala High Court, presided by Hon'ble V. Chitambaresh, J., addressed a scheme of amalgamation between two public limited listed companies involved in the plantation business. Both the transferor and transferee companies, engaged in tea, coffee, and rubber plantations, respectively, have unanimously approved the scheme, highlighting the "commonality of interest in ownership and management" and the potential for "growth and development" through consolidation.
  
  The amalgamation aims to reduce overhead duplication, enhance operational synergy, and improve financial leverage, thereby increasing shareholder value. The court noted that Clause 12 of the scheme confirms substantial compliance with the Companies Act, 1956, particularly section 391, which is described as a "single window scheme."
  
  Referencing precedents such as Doosan Babcock Engg. & Services India (P.) Ltd. and Mekaster Valves & Engg. Services (P.) Ltd., the court emphasized the scheme's alignment with members' and creditors' interests. The High Court of Judicature of Madras had already sanctioned the scheme, and the Kerala High Court granted its sanction, directing the registry to issue the order in the appropriate statutory form. The company petition was thereby disposed of.

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• 2013 (9) TMI 1309
  
  Issues:
  Company appeal under Sections 397, 398, 402, 403, and 406 of the Companies Act against alleged oppression and mismanagement by the Company, specifically regarding the allotment of equity shares and appointment of an Additional Director.
  
  Analysis:
  The Company Law Board dismissed the petition alleging oppression and mismanagement by the Company. The grievances raised by the appellants included indiscriminate allotment of equity shares leading to control by a specific individual and the appointment of an Additional Director under allegedly forged signatures. The appellants sought cancellation of the allotment, transfer of shares, and voiding the appointment. The respondents countered by stating that the allotment was based on a written application for conversion of a loan into shares, supported by a meeting resolution duly signed by relevant parties.
  
  The appellants were given the opportunity to file a rejoinder affidavit but failed to do so. The Board, after considering the evidence provided, concluded that the application for share conversion and the subsequent resolution were valid as they were not rebutted by the appellants. The Board found no reason to doubt the authenticity of the documents presented by the respondents.
  
  The Court upheld the Board's decision, noting that the appellants did not challenge the veracity of the documents submitted by the respondents. The Court also referenced a previous case to emphasize that minor defects in the submission of documents do not negate their validity when un-rebutted. The Court found no substantial challenge to the Board's findings on this issue.
  
  Regarding the appointment of the Additional Director, the Board found no evidence to support the appellants' claim of forged signatures. The Board referenced documents, including the Board resolution and inspection report, to support the legitimacy of the appointment. The Court concurred with the Board's findings, stating that no legal issues arose from the evidence presented.
  
  The Court emphasized that the appellate jurisdiction under Section 10(f) of the Companies Act pertains to legal issues, not factual findings. Since the Board's conclusions were based on the evidence presented, the Court found no legal grounds to interfere and dismissed the appeal.

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• 2013 (9) TMI 1308
  
  Issues:
  1. Maintainability of the company petition and appointment of provisional liquidator.
  2. Validity of objections raised by the respondent.
  3. Justification for the appointment of a provisional liquidator.
  4. Appointment and duties of the Provisional Liquidator.
  5. Compliance requirements for the Directors of the Respondent.
  
  Analysis:
  
  1. The judgment addresses the maintainability of the company petition and the request for the appointment of a provisional liquidator. The respondent's objections were rejected, and the company petition was admitted. The petitioner sought the winding-up of the company based on the respondent's inability to pay debts, supported by legal precedent.
  
  2. The respondent contended that the petition was a pressure tactic and raised objections regarding the loan source and limitation. However, the court found no merit in the objections, citing previous orders that addressed these issues. The respondent's defense was deemed substantial, and the appointment of a provisional liquidator was opposed.
  
  3. The court examined the conduct of the respondent, noting a lack of repayment efforts despite assurances. Various proposals and adjournments were made by the respondent but failed to materialize. The court concluded that the respondent's conduct demonstrated an inability to pay debts, justifying the appointment of a provisional liquidator.
  
  4. The Official Liquidator was appointed as the Provisional Liquidator of the Respondent, tasked with taking over assets, records, and preparing an inventory. The Provisional Liquidator was authorized to seek assistance, including from police authorities if necessary. Publication of the petition's citation and compliance requirements for the Directors were also outlined.
  
  5. The Directors of the Respondent were directed to comply with specific requirements under the Companies Act and Rules, including submitting a statement of affairs and asset details. They were instructed to provide necessary financial documents and contact information to the Official Liquidator. A report was to be filed before the next hearing date for further proceedings.
  
  This detailed judgment highlights the legal considerations surrounding the appointment of a provisional liquidator, addressing objections, compliance requirements, and the rationale behind the court's decision based on the respondent's conduct and legal precedents.

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• 2013 (9) TMI 1307
  
  Issues Involved:
  
  1. Quashing of FIRs due to the alleged civil nature of the dispute.
  2. Allegations of criminal breach of trust, misappropriation, and forgery.
  3. Validity of the sale of pledged shares without notice.
  4. Applicability of civil versus criminal proceedings.
  5. Abuse of process of law in initiating criminal proceedings.
  
  Issue-wise Detailed Analysis:
  
  1. Quashing of FIRs due to the alleged civil nature of the dispute:
  
  The petitioners sought quashing of FIRs No.505/2005 and No.511/2005 on the grounds that the disputes were essentially civil in nature. They argued that the FIRs were an abuse of the process of law, as the disputes pertained to contractual obligations and securities, which are typically resolved in civil courts. The court agreed, noting that the disputes were already under consideration in civil proceedings, and found that the FIRs did not disclose any criminal offence.
  
  2. Allegations of criminal breach of trust, misappropriation, and forgery:
  
  The respondents alleged that the petitioners committed criminal breach of trust and misappropriation by selling pledged shares without notice and at prices below market value. However, the court found that the sale of shares was conducted with prior notice and in accordance with the Pledge Agreements, Memorandum of Settlement, and Consent Award. The court concluded that no criminal breach of trust, misappropriation, or forgery was prima facie made out, as the FIRs did not specify any forged documents.
  
  3. Validity of the sale of pledged shares without notice:
  
  The core issue was whether the petitioners sold the pledged shares without notifying the respondents. The court examined the evidence, including letters and notices exchanged between the parties, and found that the respondents were indeed notified of the sale. The court emphasized that the sale was conducted in accordance with the agreements and that the respondents had prior knowledge of the sale, negating the allegations of clandestine transactions.
  
  4. Applicability of civil versus criminal proceedings:
  
  The court reiterated the principle that civil and criminal proceedings can run concurrently but emphasized that the criminal proceedings in this case were not justified. The court noted that the allegations lacked the necessary ingredients for criminal offences and were purely civil in nature. The pending civil litigation aimed to declare the sale of pledged shares null and void, further supporting the civil nature of the dispute.
  
  5. Abuse of process of law in initiating criminal proceedings:
  
  The court found that the initiation of criminal proceedings was an abuse of the process of law. The FIRs were deemed to fall within the first illustrative category of abuse as outlined in State of Haryana v. Bhajan Lal, where allegations, even if taken at face value, do not constitute a criminal offence. Consequently, the court quashed the FIRs and the proceedings emanating from them, emphasizing that the disputes should be resolved in civil court without prejudice to either party.
  
  In conclusion, the court quashed the FIRs and the related criminal proceedings, finding them to be an abuse of the process of law and emphasizing the civil nature of the disputes. The decision underscored the importance of distinguishing between civil and criminal matters and ensuring that criminal proceedings are not misused to exert pressure in civil disputes.

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• 2013 (9) TMI 1306
  
  Issues:
  1. Settlement of disputes between wife and husband through Memorandum of Settlement.
  2. Granting decree of divorce as mutually agreed.
  3. Pending Civil Appeal between the parties.
  4. Acceptance of the Memorandum of Settlement by the Supreme Court.
  5. Exercise of jurisdiction under Article 142 of the Constitution of India.
  6. Waiver of statutory period for divorce under Section 13B of the Hindu Marriage Act, 1955.
  7. Dismissal of pending criminal case.
  8. Disposal of Civil Appeal, Special Leave Petition, and Interlocutory Applications.
  
  Analysis:
  
  The Supreme Court heard an Interlocutory Application in a Special Leave Petition involving a husband and wife who had settled their disputes amicably through a Memorandum of Settlement. The parties sought a decree of divorce as mutually agreed and requested the Court to consider their settlement. Another Civil Appeal between the same parties was pending, and the Court directed its listing along with the Special Leave Petition and the interlocutory application.
  
  Upon consideration of the settlement terms and payments made by the husband to the wife as per the Memorandum of Settlement, the Court directed both parties to appear personally before it. Subsequently, the parties confirmed before the Court that they voluntarily entered into the settlement without any pressure and acknowledged the corrections made in the document under their instructions.
  
  The Memorandum of Settlement outlined various terms, including divorce by mutual consent, custody of children, property rights, financial arrangements, dissolution of partnerships, and withdrawal of complaints and litigations against each other. The Court accepted the settlement as it was deemed to be in the interest of the parties and their children.
  
  Given the amicable settlement and agreement for marriage annulment, the Court invoked its jurisdiction under Article 142 of the Constitution of India to grant a decree of divorce under Section 13B of the Hindu Marriage Act, 1955, thereby dissolving the marriage between the parties. Additionally, a pending criminal case was treated as dismissed by the Court.
  
  Consequently, the Civil Appeal, Special Leave Petition, and related Interlocutory Applications were disposed of by the Supreme Court, bringing closure to the legal proceedings between the parties and affirming the acceptance of their settlement terms.

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• 2013 (9) TMI 1305
  
  Issues:
  1. Implementation of directions issued by the Supreme Court in a writ petition regarding family pension.
  2. Allegation of forged documents presented in court.
  3. Non-compliance with court orders leading to contempt petitions.
  4. Discrepancy in calculation of family pension amount.
  5. Dispute over the last pay drawn by the deceased husband affecting pension entitlement.
  6. Evaluation of contempt charges against the Respondents.
  
  Analysis:
  1. The judgment pertains to a contempt petition filed regarding the implementation of directions issued by the Supreme Court in a writ petition concerning the determination of family pension for the Petitioner, a widow. The initial writ petition highlighted the inadequate family pension being paid to her after her husband's demise in 1980. The Supreme Court directed the determination of family pension in accordance with relevant government orders within three months, which was to be paid to the Petitioner after necessary calculations. The contempt petition was filed due to alleged non-compliance with these directions.
  
  2. Another contempt petition was filed, alleging the presentation of forged and fabricated documents by the official Respondents during the proceedings. However, the Court noted that the issues crystallized differently post the order dated 1.9.2010, focusing on compliance with directions rather than the alleged misconduct. As a result, Contempt Petitions 6/2009 and 7/2009 were closed, and the Court proceeded with Contempt Petition 3/2012, emphasizing compliance with the previous order.
  
  3. The Petitioner in Contempt Petition 3/2012 claimed that the Accountant General of the State of Uttar Pradesh failed to calculate the pension amount as directed by the Court. The Respondents, including the Chief Secretary and the Accountant General, submitted affidavits stating that the pension was being paid regularly, with calculations based on the last pay drawn by the deceased husband. The Court evaluated these submissions to determine compliance with its previous orders.
  
  4. A discrepancy arose regarding the last pay drawn by the deceased husband, impacting the calculation of the family pension amount. The Petitioner contended that the last pay was higher than stated, leading to a claim for a higher pension. However, conflicting documents and statements regarding the last pay drawn created disputed facts, complicating the assessment of the correct pension entitlement.
  
  5. To establish contempt, the Court needed to ascertain if the Respondents willfully disobeyed the Court's order. Given the shifting stand of the Petitioner and the lack of undisputed facts, the Court concluded that there was no clear evidence of contempt. Consequently, Contempt Petition 3/2012 was dismissed, and Contempt Petitions 6/2009 and 7/2009 were closed, as no willful disobedience was established based on the available evidence.

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• 2013 (9) TMI 1304
  
  Issues:
  1. Interpretation of Section 9(1)(b) of the Maharashtra Employees of Private Schools (Conditions of Service) Regulation Act.
  2. Application of limitation period for filing appeals before the School Tribunal.
  3. Consideration of inordinate delay in seeking remedy by an aggrieved party.
  
  Analysis:
  1. The judgment deals with the interpretation of Section 9(1)(b) of the MEPS Act, focusing on the right of appeal to employees of private schools who are aggrieved by orders of dismissal, removal, termination, reduction in rank, or supersession by the management. The Court examined the provision and emphasized that the aggrieved person has the right to approach the Tribunal in such cases.
  
  2. The Court delved into the application of the limitation period for filing appeals before the School Tribunal under Section 9(2) of the Act. It noted that while the statute provides a specific timeframe for filing appeals, it also allows for the Tribunal to entertain appeals filed after the expiry of the stipulated period if the appellant shows sufficient cause for the delay. The judgment highlighted the importance of adhering to the prescribed timelines for seeking redressal.
  
  3. The judgment extensively discussed the concept of inordinate delay in seeking a remedy by an aggrieved party. It cited precedents and legal principles to underscore that even in cases where no specific limitation period is prescribed, the petition must be filed within a reasonable time. The Court emphasized that a delay of 9 years and 11 months, without providing cogent reasons, constitutes an inordinate delay that cannot be condoned. The judgment highlighted the importance of timely pursuit of legal remedies and rejected the notion of approaching the court at will without adhering to reasonable timelines.
  
  4. In conclusion, the Court set aside the High Court's decision and affirmed the order of the Tribunal, emphasizing the significance of considering inordinate delays in seeking legal remedies. The judgment underscored the need for parties to pursue their appeals within reasonable timeframes, even in the absence of specific statutory limitations, to ensure the efficacy and fairness of the legal process.

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• 2013 (9) TMI 1303
  
  Issues involved: Condonation of delay in filing appeals u/s 260A of the Income-Tax Act, 1961; Taxability of interest income on FDRs purchased in undivided state and divided between Uttar Pradesh and Uttaranchal.
  
  Condonation of Delay: The delay in filing the appeals was condoned based on the cause shown in the affidavit in support of the application, allowing the Department's appeals u/s 260A of the Income-Tax Act, 1961 against judgments of the Income Tax Appellate Tribunal, Lucknow for different assessment years.
  
  Taxability of Interest Income: The Department contended that interest income on FDRs purchased in the undivided state of Uttar Pradesh is taxable, as the FDRs were purchased when the state was undivided and the interest is not taxable in either Uttar Pradesh or Uttaranchal. On the other hand, the assessee argued that post-division of the state, the interest income should be divided in the ratio of 46:54% between Uttar Pradesh and Uttaranchal, as per a notification dividing assets. The Tribunal upheld this division, taxing only 46% of the interest income in the hands of the present assessee and the remaining 54% in the hands of Uttaranchal Forest Development Corporation.
  
  Judgment: After considering submissions from both parties and the notification dividing assets between the states, the Court found no reason to interfere with the Tribunal's decision to tax the interest income in the ratio of 46:54%. Therefore, all three appeals filed by the Department were dismissed at the admission stage, upholding the Tribunal's order.

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• 2013 (9) TMI 1302
  
  Issues Involved:
  
  1. Addition of Rs. 71,304/- due to difference in cash credit account.
  2. Adjustment of transportation expenses and entry tax on closing stock.
  3. Disallowance u/s 40(a)(ia) for non-deduction/deposit of TDS on advertisement charges.
  4. Disallowance u/s 40A(3) for cash payments exceeding Rs. 20,000/-.
  5. Disallowance of traveling expenses related to earlier years.
  6. Disallowance of interest on advances to sister concern.
  7. Addition u/s 69 for undisclosed investment in construction.
  8. Addition u/s 68 for unexplained deposit.
  9. Addition u/s 28(iv) for unclaimed credit balances.
  10. Addition due to difference in accounts of Mahindra & Mahindra Limited and Hero Honda Limited.
  
  Summary:
  
  1. Addition of Rs. 71,304/- due to difference in cash credit account:
  The Assessing Officer (AO) added Rs. 71,304/- to the returned income due to a discrepancy in the cash credit account. The Commissioner of Income Tax (Appeals) [CIT(A)] deleted the addition, noting that the credit was a refund from the Department of Excise already offered for taxation in the assessment year 2008-09. The Tribunal upheld the deletion, finding no reason to interfere with the CIT(A)'s order.
  
  2. Adjustment of transportation expenses and entry tax on closing stock:
  The AO enhanced the value of the closing stock by Rs. 1,09,964/- for not adjusting transportation expenses and entry tax. The CIT(A) deleted the addition, observing that the assessee consistently followed an accounting system that did not require such adjustments. The Tribunal upheld the CIT(A)'s order, agreeing that any change would distort the profit shown by the assessee.
  
  3. Disallowance u/s 40(a)(ia) for non-deduction/deposit of TDS on advertisement charges:
  The AO disallowed Rs. 60,574/- for non-deduction/deposit of TDS on advertisement charges. The CIT(A) restricted the disallowance to Rs. 28,714/-, noting that TDS was deducted and deposited late for some payments but not deducted for Rs. 28,714/-. The Tribunal upheld the CIT(A)'s order.
  
  4. Disallowance u/s 40A(3) for cash payments exceeding Rs. 20,000/-:
  The AO disallowed Rs. 68,556/- for cash payments exceeding Rs. 20,000/-. The CIT(A) confirmed the disallowance, finding no evidence that the payments were covered under Rule 6DD(j). The Tribunal upheld the CIT(A)'s order.
  
  5. Disallowance of traveling expenses related to earlier years:
  The AO disallowed Rs. 1,05,800/- for traveling expenses related to earlier years. The CIT(A) deleted the addition, accepting that the expenses were crystallized during the year under consideration. The Tribunal upheld the CIT(A)'s order.
  
  6. Disallowance of interest on advances to sister concern:
  The AO disallowed proportionate interest on advances to the sister concern. The CIT(A) confirmed the disallowance. The Tribunal restored the matter to the AO to reconsider the business expediency of the advances, following the Supreme Court's decision in S.A. Builders.
  
  7. Addition u/s 69 for undisclosed investment in construction:
  The AO added Rs. 21,55,814/- as undisclosed investment in construction. The CIT(A) confirmed the addition. The Tribunal found that the assessee maintained detailed accounts and no defects were pointed out by the AO. The Tribunal directed the AO to delete the addition.
  
  8. Addition u/s 68 for unexplained deposit:
  The AO added Rs. 2,00,000/- as unexplained deposit. The CIT(A) confirmed the addition. The Tribunal restored the issue to the AO for reconsideration, noting that additional evidence was not properly considered.
  
  9. Addition u/s 28(iv) for unclaimed credit balances:
  The AO added Rs. 10,13,579/- for unclaimed credit balances. The CIT(A) deleted the addition, finding no cessation of liabilities. The Tribunal upheld the CIT(A)'s order.
  
  10. Addition due to difference in accounts of Mahindra & Mahindra Limited and Hero Honda Limited:
  The AO added Rs. 4,46,649/- due to differences in accounts. The CIT(A) deleted the addition, noting that the difference was assessed in the hands of the wrong entity. The Tribunal upheld the CIT(A)'s order.
  
  Conclusion:
  The Tribunal allowed the appeal and cross-objection in part, upholding most of the CIT

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• 2013 (9) TMI 1301
  
  Issues involved: Interpretation of statutory duty u/s 194(1) of the Income Tax Act regarding deduction of tax at source by an Insurer from interest paid to claimant in a compensation award.
  
  Summary:
  The High Court of Patna heard a Petition filed by the National Insurance Company Ltd. challenging an order of the Additional District and Sessions Judge-cum Motor Accident Claim Tribunal directing the Insurer to pay a sum to the claimant. The Tribunal had directed the Insurer to pay the claimant an amount after deducting the income tax from the interest paid in accordance with the compensation award. The Insurer had deducted 20% towards income tax from the interest amount of Rs. 3,50,708, which was the cause of complaint by the claimant. The Tribunal's order was based on this deduction.
  
  The Court noted that the Insurer had a statutory duty u/s 194(1) of the Income Tax Act to deduct tax at source from the interest paid to the claimant and deposit it with the Government of India. The Tribunal had erred in directing the Insurer to pay the deducted sum to the claimant. The respondent-claimant's advocate admitted the Insurer's statutory liability to deduct tax at source and mentioned that the claimant had filed an income tax return claiming a refund of the deducted amount.
  
  Therefore, the Court allowed the Petition, quashed, and set aside the impugned order of the Tribunal dated 5th December 2012 in Claim Case No. 111 of 1998.

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• 2013 (9) TMI 1300
  
  Issues Involved:
  1. Disallowance u/s 14A of the Income-tax Act, 1961.
  2. Non-grant of credit for TDS.
  3. Enhancement of income by CIT(A).
  
  Summary:
  
  Disallowance u/s 14A:
  The assessee contested the addition of Rs. 1,76,38,517/- made by the Assessing Officer by disallowing interest attributable to investments in shares of SPV companies. The assessee argued that the investments were made for business expediency and thus, provisions of Section 14A were not applicable. The CIT(A) upheld the Assessing Officer's decision. The ITAT noted that the assessee made investments from interest-free funds and had substantial reserves. The matter was remanded back to the Assessing Officer to verify if the investments were indeed made from non-interest-bearing funds and to reconsider the disallowance in light of the Supreme Court's decision in S. A. Builders Limited, 288 ITR 1.
  
  Non-grant of Credit for TDS:
  The assessee claimed that TDS of Rs. 52,54,091/- was erroneously deducted and paid to the Central Government. The Assessing Officer noted discrepancies between the TDS certificates and the declared receipts. The ITAT observed that TDS should be deducted on income paid or credited and not on advances. The matter was remanded to the Assessing Officer to verify whether TDS was deducted on income accrued/received or on advances, and to allow TDS credit in the appropriate year.
  
  Enhancement of Income by CIT(A):
  The CIT(A) enhanced the assessee's income by Rs. 6,84,24,000/- based on a proforma invoice raised for additional work and escalation costs, which was not accepted by the contractee, POHL. The ITAT found that the claim was neither acknowledged nor paid by POHL, and thus, no income accrued or was received by the assessee during the relevant year. The ITAT held that mere issuance of a proforma invoice does not result in income accrual. The enhancement was deleted, and the matter was remanded to the Assessing Officer to tax the income in the year of actual receipt if it occurs.

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