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2016 (9) TMI 1683
Dishonour of Cheque - requirment to conduct a further inquiry under section 202 of the Code of Criminal Procedure before issuing process against the accused persons in a case under section 138 of the Negotiable Instruments Act - accused resided beyond the territorial jurisdiction of the Magistrate - HELD THAT:- In Indian Bank Association & Ors. v. Union of India & Ors. [2014 (5) TMI 750 - SUPREME COURT], the Apex Court, inter alia, held that affidavit evidence may be used both at the pre-summoning and post summoning stage. The Court laid down the manner in which cognizance is to be taken, process be issued and trial conducted for speedy disposal of such cases.
Further, subsequent amendment to section 202 Cr.PC will not override the special procedure prescribed under section 145 of the Negotiable Instruments Act in view of the non-obstante clause contained therein which not only overrides the Code but also all subsequent amendments thereto to the extent of its repugnancy unless a contrary intention is expressly evidenced by way of corresponding amendment to the special statute also.
Conclusion - The non-obstante clause in section 145 of the Negotiable Instruments Act overrides the procedural requirements of the Code, reinforcing the special procedure for handling cases under section 138.
Petition dismissed.
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2016 (9) TMI 1682
Addition as difference of long term capital gain which comes under business income - stamp duty valuation of the property, on sale of which LTCG were offered to tax, was much more than the stated consideration on sale of land - AO adopted the full value of consideration at stamp duty valuation u/s 50C as against value on which the property was actually sold
HELD THAT:- Even though the assessee may not have made a specific request for reference to the DVO, it was bounden duty of the Assessing Officer to act fairly and should have given the assessee opportunity of referring the matter to the DVO for verification, under section 50C(2).
As relying on Raj Kumari Agarwal [2014 (7) TMI 867 - ITAT AGRA] we deem it fit and proper to remit the matter to the file of the AO with the direction to refer the valuation of property to the DVO u/s 50C(2). This is precisely what the learned Counsel for the assessee before us has prayed for.
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2016 (9) TMI 1681
Determnation of deficient stamp duty, registration charges and penalty payable on a sale deed executed - assessment of the market value of the property - property should be considered residential for the purpose of stamp duty calculation or not - HELD THAT:- It is settled law that the market value of the property subject matter of an instrument produced for registration has to be assessed on the basis of nature of the property as on the date of execution of the instrument , the possible future use of the property is hardly of any relevance and no assessment of the market value of the property can be made keeping in view the intended use of the property by the beneficiary of the instrument.
It has come on record that the property in question was an agriculture land at the time of execution of the sale deed and the registration thereof and therefore, the stamp duty and registration charges having been paid by the petitioner as determined by the Sub Registrar, Sirohi, there was no occasion for the Senior Account Officer, Registration & Stamp to make a reference to the Collector (Stamp) under Section 47A of the Act. As a matter of fact, even subsequent conversion of the land for non agricultural use, cannot be made basis for levy of the stamp duty and registration charges, presuming that the land was intended to be used for residential/commercial purpose at the time of registration.
Conclusion - The property in question was an agriculture land at the time of execution of the sale deed and the registration thereof and therefore, the stamp duty and registration charges having been paid by the petitioner as determined by the Sub Registrar, Sirohi, there was no occasion for the Senior Account Officer, Registration & Stamp to make a reference to the Collector (Stamp) under Section 47A of the Act.
Petition allowed.
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2016 (9) TMI 1680
Exemption u/s 10(23C)(iiiab) - appellant's society is wholly financed by the government and exists solely for educational purpose - HELD THAT:- The assessee institute is financed by the Central Government, and the amount granted by the Government is deposited in the nationalized bank. The interest so received by the institute from the bank is utilised for the purpose of institute as per memorandum of association and rules and regulation of the society.
Taking into consideration of the above decisions as well as facts of the case, it is observed that the assessee institute is covered and entitled to exemption under s. 10(23C)(iiiab) as the provisions of sec 10(23C)(iiiab) provides that any income received by any university or other institution education existing solely for educational purpose and not for the purpose of profit, and which is wholly or substantially financed by the Government is not includable in the total income. In this view of the matter, the appeal of the assessee is allowed.
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2016 (9) TMI 1679
Involvement in anti-competitive practices - abuse of dominant position - main allegation in Ext.P1 complaint is that a ban has been imposed by the second opposite party namely, the Film Employees Federation of Kerala and its affiliated trade unions - HELD THAT:- The fact that the petitioners have neither filed objections to the report submitted by the Director General nor did not appear before the Commission for the hearing proposed on the report, is not in dispute. It is seen that in the notices issued to the petitioners dated 23.12.2015, it was categorically mentioned that in case the petitioners do not file their objections against the report, it will be presumed that they have nothing to say in the matter and the Commission will proceed with the complaint on that basis, indicating clearly that if they do not establish that the report of the Commission as against them is incorrect, proceedings will be continued against them also as if they have contravened the provisions of the Act. The direction of the Commission in Ext.P3 that the proceedings before the Commission will be continued as if the petitioners have nothing to say in the matter is also, therefore, in order.
The materials on record indicate that the proceedings commenced pursuant to the complaint preferred by the second respondent is yet to be over. A final decision on the issue as to whether the opposite parties in the complaint have contravened the provisions of the Act will be rendered by the Commission only when it disposes of the complaint - The scheme of the Act does not contemplate two separate proceedings against the opposite parties as also against the office bearers of the opposite parties who are liable to be proceeded under Section 48 of the Act. The proceedings under the Act, going by its scheme, is a composite one. As such, the guilt, if any, of the persons who come under Section 48 of the Act also needs to be examined simultaneous to the guilt of the opposite parties.
Conclusion - The Commission is well within its powers to initiate action against them also under the Act.
There is no merit in the writ petition and the same is, accordingly, dismissed.
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2016 (9) TMI 1678
Suit for the relief of permanent injunction restraining the two defendants namely Rameshwari Photocopy Service (carrying on business from Delhi School of Economic (DSE), University of Delhi) and the University of Delhi from infringing the copyright of the plaintiffs - applicability of doctrine of fair use - HELD THAT:- The rights of persons mentioned in Section 52 are to be interpreted following the same rules as the rights of a copyright owner and are not to be read narrowly or strictly or so as not to reduce the ambit of Section 51, as is the rule of interpretation of statutes in relation to provisos or exceptions. Thus, Sections 14 and 51 on the one hand and Section 52 on the other hand are to be read as any two provisions of a statute. Reliance by defendants on Entertainment Network (India) Ltd. [2008 (5) TMI 671 - SUPREME COURT] in this respect is apposite. It was held that the Copyright Act seeks to maintain a balance between the interest of the owner of copyright in protecting his works on the one hand and interest of the public to have access to the works, on the other.
Whether the actions of the defendant no. 2 University are to be tested on the anvil of Clauses (h),(i),(j) of Section 52(1) which deal with acts in relation to education or also on the anvil of Clause (a) of Section 52(1) which deals with an acts for purposes of private or personal use, criticism or review or reporting of current events, if in fair dealing with the work? - HELD THAT:- The settled principle of interpretation of statutes is that the legislature is to be deemed to have used the language in the context of the prevailing laws and societal situations to which the legislation is intended. Education in the country though at one time pursued in Guru-Shishya parampara (Teacher – disciple tradition) has for long now been institutionalised, both at school and post - school level, with imparting of education by a teacher individually having no recognition. There is no reason to interpret Section 52(1)(i) as providing for an individual teacher and an individual pupil and which, neither at the time of inclusion thereof in the statute nor now exists in the society - The phrase ‘purposes of teaching, research or scholarship’ vide Section 32(6) Explanation (d), though for the purpose of that Section only, has been defined as including “purposes of instructional activity at all levels in educational institutions, including Schools, Colleges, Universities and tutorial institutions” and “purposes of all other types of organized educational activity”. There are no reason to hold that the legislature intended to exclude teacher and pupil in an educational institution as defendant no. 2 University is, from ambit thereof. Thus, merely because imparting of education by teachers today is as part of an institution as the defendant no. 2 University and it is the defendant no. 2 University which on behalf of its teachers is reproducing any copyrighted work by making photocopies thereof, would not mean that Section 52(1)(i) would not be applicable. The counsel for the plaintiffs also, to be fair to him, has not contended so.
The use of the word ‘publication’ in Section 52(1)(h) as distinct from the word ‘reproduction’ in Section 52(1)(i) further brings out the difference between the two words. While the word ‘publication’ used in Section 52(1)(h) connotes making available to the public ‘for the first time’ or by way of ‘further editions’ or ‘re-print’ i.e. the activity in which plaintiffs are involved, the word ‘reproduction’ used in Section 52(1)(i) entails ‘copying’ for limited use i.e. for an individual or for a class of students being taught together by a teacher.
The word ‘instruction’, as commonly understood and defined in dictionaries, means ‘something that someone tells you to do’ or ‘a direction or order’ or ‘detailed information about how something should be done or operated’ or ‘the action or process of teaching’. Thus the word ‘instruction’ in the context of a teacher would mean something which a teacher tells the student to do in the course of teaching or detailed information which a teacher gives to a student or pupil to acquire knowledge of what the student or pupil has approached the teacher to learn - the use of the word “instruction” preceded with the words “in the course of” would mean in the course of instruction being imparted and received.
Though it is held that Section 52(1)(a) to be not applicable to the action of the defendant no. 2 University of making photocopies of copyrighted works but the issuance by the defendant no. 2 University of the books purchased by it and kept in its library to the students and reproduction thereof by the students for the purposes of their private or personal use, whether by way of photocopying or by way of copying the same by way of hand would indeed make the action of the student a fair dealing therewith and not constitute infringement of copyright. The counsel for the plaintiffs also on enquiry did not argue so.
All that is happening in the present case is that instead of the defendant No. 2 University issuing the book which may be sought after by a large number of students, to each one of them individually for limited period or limited hours and enabling each student to photocopy the passages or the contents thereof required by him “in the course of instruction” and thereby exposing the book to damage, the defendant No. 2 University itself is supplying the said photocopies. It cannot be lost sight of that we are a country with a bulging population and where the pressure on all public resources and facilities is far beyond that in any other country or jurisdiction. While it may be possible for a student in a class of say 10 or 20 students to have the book issued from the library for a month and to laboriously take notes therefrom, the same is unworkable where the number of students run into hundreds if not thousands.
What is permissible for a small number of students cannot be viewed differently, merely because the number of students is larger. Merely because instead of say 10 or 20 copies being made by students individually or by the librarian employed by the University, 100 or 1000 copies are being made, the same would not convert, what was not an infringement into an infringement.
The engagement by the defendant No. 2 University of defendant No. 1 does not convert the action of defendant No. 2 University to be not amounting to infringement of copyright in books, to infringement.
Suit dismissed.
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2016 (9) TMI 1677
Prayer for winding up proceedings pending before this Court, be not proceeded with further in view of the proceedings pending for revival of the respondent before the Board for Industrial & Financial Reconstruction (BIFR) - Rule 9 of Company Court Rules, 1959 read with Section 22(1) of Sick Industrial Companies (Special Provisions) Act, 2002 - HELD THAT:- A perusal of the record shows that in fact, the stage for this exercise never came about, and all that has come on the record so far is merely the company’s acceptance of the debt and its conditional offer to pay on the aforesaid terms. Even the specific acceptance of these terms by the petitioning creditor, which would have been a precursor for the Court to examine the proposal keeping in mind other relevant aspects that have been referred to below, is not there; and that offer is now no longer on the table.
The so-called, “consent”, by the company to pay is merely a unilateral offer on the aforesaid terms. There is no mutuality. It is also not as if the petitioner had consented to any offer by the company, to indicate that the consensus ad idem claimed by the petitioner’s counsel had come about. There was thus no agreement at all. Even assuming, contrary to the facts, that the agreement claimed had come about, it was also clearly conditional upon the actual release of funds by the lenders in terms of the CDR, which never happened. Consequently, it follows that even in this view of the matter, the obligations of the company to pay the petitioner never fructified.
The instant winding up proceedings pending before this Court against the respondent company shall be kept in abeyance in the light of the bar under Section 22(1) of SICA; and the petition and all pending applications shall stand adjourned sine die; with liberty to the parties to apply in case they are so advised, and as per law - Application allowed.
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2016 (9) TMI 1676
Bogus transactions - addition on account of purchase of paintings from different parties - HELD THAT:- The decision of Hon‟ble jurisdictional High Court in the case of Nikunj Eximp Enterprises (P.) Ltd [2013 (1) TMI 88 - BOMBAY HIGH COURT] wherein it was observed when the sales of purchased goods were not doubted when copies of bank statement showing entries of payment through bank cheques to the suppliers are present then the purchases made by the assessee cannot be a bogus one. Therefore, we decide that the purchases in both the assessment years made by the assessee were found to be genuine and therefore, set aside the orders of the authorities below and delete the impugned additions on account of bogus purchases. Appeal of the assessee is allowed.
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2016 (9) TMI 1675
TDS u/s 194C - TDS on payments termed as "grant" by NHAI to concessionaires - HELD THAT:- The contention of the assessee in substance is that from the terms of the agreement it can be inferred that the payments made to the concessionaires in the form of ‘Grant’ would not attract the provisions of section 194C. Essentially these payments are in the nature of contribution in the joint venture.
We have gone through the terms of the agreement. The inference drawn by the AO is that the ‘Grant’ is nothing but payment to the contractor is mis-placed. As per section 194C, the payment is required to be made to the contractor but in the given case payment is not made to the contractor. The agreement cannot be stated to be purely a contract agreement but it is a contract agreement of joint venture. Hence, we do not see any infirmity in the order of ld. CIT (A), therefore, the same is hereby upheld. Decided in favour of assessee.
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2016 (9) TMI 1674
Seeking prohibition on respondents No. 2 to 4 from sharing, in any manner whatsoever, details and data of every kind of the subscribers / users of WhatsApp with any entity including Facebook or its family of companies - Protection and safety of privacy of WhatsApp users - HELD THAT:- Having regard to the complete security and protection of privacy provided by the Respondent No. 2 initially while launching "WhatsApp" and keeping in view that the issue relating to the existence of an individual's right of privacy as a distinct basis of a cause of action is yet to be decided by a larger Bench of the Supreme Court in K.S. Puttaswamy [2015 (8) TMI 526 - SUPREME COURT] it is considered appropriate to issue the following directions to protect the interest of the users of "WhatsApp":
i) If the users opt for completely deleting "WhatsApp" account before 25.09.2016, the information/data/details of such users should be deleted completely from "WhatsApp" servers and the same shall not be shared with the "Facebook" or any one of its group companies.
ii) So far as the users who opt to remain in "WhatsApp" are concerned, the existing information/data/details of such users upto 25.09.2016 shall not be shared with "Facebook" or any one of its group companies.
iii) The respondent Nos. 1 and 5 shall consider the issues regarding the functioning of the Internet Messaging Applications like "WhatsApp" and take an appropriate decision at the earliest as to whether it is feasible to bring the same under the statutory regulatory framework.
Petition disposed off.
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2016 (9) TMI 1673
Validity of Reopening of assessment - Ingenuine share transactions - As decided by HC [2016 (6) TMI 747 - GUJARAT HIGH COURT] in the reasons recorded, the AOhas mentioned that such amount is received by the assessee during the assessment year 2010-11/2011-12 which is not genuine transaction. This one statement cannot be picked out of context and appreciated in isolation to argue that the Assessing Officer is not clear as to in which year such income should be taxed. The notice for the reopening was issued for the assessment year 2010-11, majority of transactions are relevant to such assessment year. If a small portion of the entries related to the subsequent assessment year, it would not mean that the assessment cannot be reopened for the year during which majority of these transactions actually took place.
HELD THAT:- Exemption from filing certified copy of the impugned judgment is granted.
We do not find any legal and valid ground for interference. The Special Leave Petitions are dismissed.
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2016 (9) TMI 1672
Cauvery water disputes between the States of Karnataka and Tamil Nadu - seeking assistance from the Attorney General of India to facilitate discussions between the two States to find a solution - HELD THAT:- ll authorities in the territory of India are bound to act in aid of the Supreme Court. Needless to say, they are bound to obey the orders of the Supreme Court and also, if required, render assistance and aid for implementation of the order/s of this Court, but, unfortunately, the State of Karnataka is flouting the order and, in fact, creating a situation where the majesty of law is dented.
This opportunity is granted as the last chance and it is repeated at the cost of repetition that this order is passed despite the resolution passed by the Joint Houses of State Legislature of the State of Karnataka.
Call on 6th October, 2016 at 2.00 p.m.
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2016 (9) TMI 1671
Applicability of provision of Section 22 and 23 to the properties owned by the Assessee - As decided by HC [2016 (11) TMI 208 - DELHI HIGH COURT] levy of income tax in the case of one holding house property is premised not on whether the Assessee carries on business as landlord, but on ownership, thus decided in favour of revenue - HELD THAT:- To be heard along with Civil Appeal and other connected matters.
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2016 (9) TMI 1670
Seeking a direction to the opposite parties to proceed with the final assessment and complete the same within a reasonable period in respect of the transactions - no opportunity to the petitioners to participate in any hearing leading to any final assessment or determination of the export value for the purpose of arriving at the conclusive expert value and determination of the duty payable thereon - violation of principles of natural justice - HELD THAT:- It is clear from the documents appended to the writ application that in each of these transactions, bonds have been taken from the exporter (petitioners herein) and it is obvious that such bonds have been taken at the point of export, since, the exporting officer was satisfied that having regard to the circumstance of the case such thing cannot be done before such export or clearance, without detriment to that person (the term such thing obviously refers to the ultimate determination of duty on such exports) and even in transaction No. 12 as contend ed by the learned Standing Counsel a bond has been taken and such bond has been taken in terms of Section 143.
There is no evidence on record to indicate that there has been any ultimate determination of the export value of the goods till date and the claim by the department that the determination has been done but admittedly without affording opportunity of hearing, as well as, opportunity of producing documents to the petitioner cannot stand on the law and is also obviously in non-compliance of the principles of Res Judicata as well as rules framed under the Customs Act (i.e. Customs Valuation (Determination of Value of Export Goods) Rules, 2007).
The ends of justice would be best met, if the opposite parties are directed to appear before the Assessing Officer/appropriate officer on 17.10.2016 along with all necessary documents in support of their contentions, if any, on which date, the Assessing Officer/appropriate officer shall do well to fix up a date for oral hearing in the matter and determine the export value of the export goods in accordance with the Customs Act and Rules made thereunder within a further period of two months thereof - application allowed.
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2016 (9) TMI 1669
Maintainability of a recall application - Condonation of delay u/s 5 of Limitation Act, 1908 - applicant has not argued the case - recall could not be sought and in absence of such assertion - Power of review.
Condonation of delay u/s 5 of Limitation Act, 1908 - HELD THAT:- There are substance in the submissions of learned counsel for the petitioner as once the application under Section 5 of Limitation Act was filed, the restoration application could not be decided on merit unless the delay was condoned and the application filed under Section 5 of Limitation Act was allowed or the finding was recorded to the effect that there was no need of filing Section 5 application and the application was within time - Here in this case, admittedly, the recall application was barred by time and it was accompanied with an application for condonation of delay, therefore, unless the delay was condoned, the recall application could not have been decided.
In the case of SNEH GUPTA VERSUS DEVI SARUP & OTHERS [2009 (2) TMI 744 - SUPREME COURT], the Apex Court has held that in absence of any application for condonation of delay, the court has no jurisdiction in terms of S. 3, Limitation Act, 1963 to entertain the application filed for setting aside of decree after expiry of period of limitation.
Power of review - HELD THAT:- The power of review of quasi judicial authority in absence of specific provision under the statute has been dealt with in several cases of this Court as well as by the Apex Court. The Apex Court in the case of Dr. (Smt.) Kuntesh Gupta v. Management of Hindu Kanya Mahavidyalaya, Sitapur, U.P. and Ors., [1987 (9) TMI 302 - SUPREME COURT] has held that unless power of Review is expressly conferred on the authority by any statute under which it derives its' jurisdiction, the authority concerned has no power to Review its' earlier order.
It is well settled that an order without jurisdiction is a nullity and no legal consequences can flow such orders - petition allowed.
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2016 (9) TMI 1668
Addition u/s 115(BBC) r/w Section 68 - anonymous donation - HELD THAT:- Questions No. 1 and 2 does not arise since Section 115 (BBC) itself was inserted in the Income Tax Act, 1961 w.e.f. 01.04.2007 and assessment year in question is 2005-06.
Addition U/s. 69 on account of unexplained investment in property - addition was made on the basis of cogent documentary evidences found during the course of survey proceedings - ITAT deleted addition - As could not be disputed that same are covered by Supreme Court's judgment in Sargam Cinema[2009 (10) TMI 569 - SC ORDER] wherein similar question has been answered in favour of Assessee. Hence, Questions also answered against Revenue and in favour of Assessee.
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2016 (9) TMI 1667
Dismissal of the writ petition and the application for clarification - declination to interfere with the decision taken by the Respondents to treat the bid submitted by the Appellants as non-compliant with the conditions of Invitation for Bids (IFB) - HELD THAT:- The Appellant No. 1 had not filed an application for grant of registration. It was Appellant No. 2 who had filed it. Be that as it may, the decision dated 31.03.2015 was taken by the Registration Committee of CIB to approve the registration subject to the condition DAC granting permission for commercialization. That apart, the decision taken by the concerned authority, even if it is put on the website, despite the astute submission of Mr. Singh, would not tantamount to grant of registration certificate. The amendment was made, as we perceive, to clarify the position.
The use of the word "must" adds a great degree of certainty to the same; it is a requisite parameter as thought of by the Respondent No. 1. The tender was floated for purchase which is needed for the nation. The first Respondent along with Respondent Nos. 2 and 3 were taking immense precaution. In such a circumstance, needless to emphasize, public interest is involved. It cannot succumb to private interest. The action on the part of the Respondent Nos. 1 to 3 cannot be regarded as arbitrary or unreasonable. By no stretch of imagination it can be construed to be an act which is not bonafide or to have been done to favour the fourth Respondent. Nothing has been pleaded that the fourth Respondent is not eligible or qualified.
The essential condition of tender being not met with, the tenderer, the Appellants herein, were ineligible and the tender was non-responsive. That apart, the amendment was applicable to all. Additionally, the High Court in the first round of litigation had not held that the registration certificate granted on 31.03.2015 would enure to the benefit of the writ Petitioners from the date of the decision of the registration authority, and it had rightly not said so.
There are no substance in the grounds raised in this appeal - appeal dismissed.
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2016 (9) TMI 1666
Attachment of property - monies were transferred, siphoned off, fraudulent documents were prepared and liabilities were transferred - HELD THAT:- Perusal of Order 21 Rule 58 clearly reveals that legislature in its wisdom has ensured that if a claim is made by third party, claiming to be the owner of the property which is attached, he can, instead of filing separate suit, file his objection under Order 21 Rule 58 and such an objection has to be considered by the Court. It will be necessary here to point out that sufficient power has been given to the Executing Court to decide the application and it has been clearly mentioned in the proviso to Rule 58(1) of order 21 that no such claim or objection shall be entertained - (a) where, before the claim is preferred or objection is made, the property attached has already been sold; or (b) where the Court considers that the claim or objection was designedly or unnecessarily delayed. Therefore, the Executing Court has power to regulate the procedure before deciding the claims or objections which are filed by the third parties. Keeping that in mind, the learned Single Judge has made those observations in para 4 of the said order.
The application for issuance of precept under section 46 is taken out firstly in cases where the property is situated outside the jurisdiction of the Court and, secondly, if the property which is to be attached is a movable property then order of attachment is passed, so that the execution does not become infructuous. The learned Single Judge therefore, in our view, has correctly followed the procedure laid down under CPC. It is therefore clarified that if such a remedy is available to the Appellant under Order 21 Rule 58, Appellant can also exhaust that remedy and the learned Judge before whom such an application is made shall accordingly decide it in accordance with law.
Appeal dismissed.
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2016 (9) TMI 1665
Speed money Payments - Disallowance of wages - cash payment to gang leaders - allowable business expenditure or not? - Tribunal restricting addition to 1.6% in respect of an expenditure which is of such nature as covered by section 37(1) - HELD THAT:- Tribunal while deciding the appeal, has casually proceeded to sustain the order passed by the AO - None of the major points decided by the Appellate Commissioner are answered by the Tribunal while setting aside the order passed by the Appellate Commissioner. Though the order passed by the Tribunal runs to number of pages, the crux of the matter is not adverted to by the Tribunal while arriving at the conclusion.
On careful perusal of the order passed by the Tribunal, we are of the opinion that the order of the Tribunal cannot be sustained inasmuch as the Tribunal has not applied its mind judiciously to the facts and circumstances of the case. In view of the same, interest of justice requires that the matter has to be re-dealt by the Income Tax Appellate Tribunal, Bangalore. By the said process, no prejudice would be caused to either of the parties.
Accordingly order passed by the Income Tax Appellate Tribunal, stands set aside. The matter restored to the file of the Income Tax Appellate Tribunal, Bangalore Bench 'A' for fresh disposal in accordance with law.
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2016 (9) TMI 1664
Addition on account of investment in shares made u/s 14A read with rule 8D - as DR contended that the assessee had diverted interest bearing fund for non-business purposes, therefore, the Assessing Officer was justified in invoking the provisions of Section 14A - HELD THAT:- We find that in the assessee’s own case for the assessment year 2008-09 the matter travelled to the Tribunal and the Tribunal after elaborately discussing the issue [2013 (9) TMI 1300 - ITAT INDORE] as held assessee has made investment in shares of group companies as a matter of commercial expediency. We also found that the assessee was having huge reserve as well as surplus funds available out of its profit. However, to show that investment in shares of Associate concerns have been made out of non interest bearing funds, is on the assessee and burden lies on him to demonstrate before the Departmental Authorities that no interest bearing fund has been used.
It is also a matter of record that since investment has been made under commercial necessities, the proposition laid down in the case of S. A. Builders Limited [2006 (12) TMI 82 - SUPREME COURT] is required to be considered before disallowing interest expenditure having been incurred on the funds borrowed for the purpose of business - investment in group companies were having taxable income and assessee has offered substantial long term and short term capital gains in the returns of subsequent years.
Thus we direct the AO to decide the matter afresh in terms of the above observations of the Tribunal. We direct accordingly.
Addition of prior period expenses - assessee company has claimed prior period expenses related to reversal of monthly toll charges under settlement with SPV Company Path Oriental Highways Ltd and income has been offered in respective year whereas there is no income received to the assessee - HELD THAT:- Tribunal in its order in the assessee’s own case for the assessment year 2008-09 [2013 (9) TMI 1300 - ITAT INDORE] has restored this issue to the file of the Assessing Officer as held As per the accounting standard, in case of construction contractor, the contract revenue would accrue or arise only in respect of initial amount of revenue agreed in the contract. However, in respect of variations of claim and incentive, the revenue would accrue and arise only in the situation, when there is not only probability of acceptance of claim but also when variations, claim or inventive are reliably measurable. Both the conditions enjoyed in respect of variations, claim or incentive payment are cumulative and unless both the conditions are met out together, no revenue claim or incentive can be recognized in the books of account. In the instant case, the claim of the assessee company has been rejected by POHL at thrash hold only and even the process of negotiations have not got commenced during the year under consideration.
As the alleged amount of proforma invoice has neither been received nor accrued to the assessee during the relevant assessment year under consideration. Therefore, there is no justification in the action of CIT(A) for bringing to tax net such amount during the year under consideration. However, the Department is at liberty to tax such income in the year of actual receipt, in any subsequent year. Accordingly, we restore the matter back to the file of Assessing Officer to verify and tax this income in the year of actual receipt.
Thus Assessing Officer is directed to verify the claim of prior period expenses and decide the same as per the above judgment of the Tribunal. Therefore, we restore this issue as per the above direction.
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9911796707
