Legal News & Views

1. Commissioner of Income-tax, Allahabad vs. Smt. Rama Rani Kalia [2013] 38 taxmann.com 176 (Allahabad) Converting a leasehold property into freehold improves title of asset; holding period reckoned from date of lease -IT: Conversion of rights of lessee in property from leasehold right into freehold only results in improvement of his/her rights over property and it would not have any effect on taxability of gain from such property, which is related to period over which property is held. 2. Commissioner of Wealth Tax, Patiala vs. Industrial Cables (India) Ltd. [2013] 38 taxmann.com 126 (Punjab & Haryana) Land adjoining factory utilized for industrial purposes wouldn't be liable to wealth tax -IT : Land adjoining factory utilized for industrial purposes would not be liable to wealth tax 3. Commissioner of Income-tax, Delhi vs. H.B. Leasing & Finance Ltd. [2013] 38 taxmann.com 121 (Delhi) Higher depreciation to be allowed on vehicle given on lease -IT: Where assessee e

Supreme Court today said courts' decision should be backed by reason and they should give rationale for deciding a case in favour or against any party. "We are of the opinion that while recording the decision with clarity, the court is also supposed to record sufficient reasons in taking a particular decision or arriving at a particular conclusion. "The reasons should be such that they demonstrate that the decision has been arrived at on an objective consideration," a bench of justices K S Radhakrishnan and A K Sikri said. The bench set aside the order of the Orissa High Court which had delivered its verdict but did not give any reasoning behind the judgement. The apex court referred the case back to High Court to decide the case afresh. "It is nowhere suggested by us that the judgement should be too lengthy or prolix and disproportionate to the issue involved. However, it is to be borne in mind that the principal objective in giving judgement is to mak

ISSUE OF FOREIGN CURRENCY CONVERTIBLE BONDS AND ORDINARY SHARES (THROUGH DEPOSITARY RECEIPT MECHANISM) (AMENDMENT) SCHEME, 2013 - AMENDMENT IN PARAGRAPH 3 NOTIFICATION NO.GSR 684(E) [F.NO.4/13/2012-ECB] ,  DATED 11-10-2013 Central Government hereby amend the Foreign Currency Convertible Bonds and Ordinary Shares (Through Depositary Receipt Mechanism) Scheme, 1993, namely:— 1.  This Scheme may be called the issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depositary Receipt Mechanism) (Amendment) Scheme, 2013. 2.  The Scheme shall be deemed to have come into force from the date of publication of Notification; and 3.  In the "Foreign Currency Convertible Bonds and Ordinary Shares (Through Depositary Receipt Mechanism) Scheme, 1993; In Paragraph 3(1)(B) the words "Unlisted Indian Companies Issuing Global Depository Receipts/Foreign Currency Convertible Bonds shall be required to simultaneously list in the Indian stock Exchanges(s)" shal

Holding that it was playing 'hide and seek' and cannot be trusted any more, the Supreme Court today directed the Sahara group to hand over title deeds of its properties worth Rs 20,000 crore to SEBI warning that failure to comply would mean Subrata Roy cannot leave India. Making it clear that there is no "escape" from depositing the investors' money with the market regulator, the apex court also asked the group to also give valuation reports of the properties to SEBI which will verify worth of assets. A bench of justices K S Radhakrishnan and J S Khehar, which was about to restrain Roy from leaving the county till documents are handed over, however, said that he will not be allowed to go abroad without its permission if order is not complied in three weeks. Roy's counsel had, earlier, pleaded that his reputation and business will be hit. "You have driven everybody round. From day one restraint was ours," the bench replied when Roy's cou

Bharat Petroleum Corporation Ltd vs. ITAT (Bombay High Court) The assessee’s appeal was fixed for hearing before the Tribunal on 4.12.2007. As nobody appeared for the assessee, the Tribunal dismissed the appeal for want of prosecution. The assessee filed a Miscellaneous Application before the Tribunal on 6.8.2012 seeking to recall the exparte order. The Tribunal dismissed the MA on the ground that the application for recall had been filed beyond a period of 4 years from the date of the ex-parte order. The assessee filed a Writ Petition contending that (a) the Tribunal had no power under Rule 24 to dismiss an appeal for want of prosecution, (ii) an application for recall of an ex-parte order does not fall u/s 254(2) and the time limit of 4 years does not apply to it. It was also contended that the Tribunal ought to allow the system of “mentioning” matters as is done in the High Court. HELD by the High Court dismissing the Petition. (i) It is a little strange that the Tribunal does

The right to life and human dignity under art 21 of the Constitution also incorporates the right to have food articles and beverages which are free from harmful residues such as pesticides and insecticides, the Supreme Court has ruled. The apex court said that food articles which are harmful and injurious to public health had the potential of striking at the fundamental right to life guaranteed by the Constitution and it was the government’s responsibility to take steps for protection of life and health.A bench of Justices K.S. Radhakrishnan and DipakMisra directed the Food Safety and Standards Authority of India (FSSAI) to “gear up their resources with their counterparts in all the states and union territories and conduct periodical inspection and monitoring of major fruits and vegetable markets.” In the words of the apex court, “We may emphasise that any food article which is hazardous or injurious to public health is a potential danger to the fundamental right to life guarantee

In a landmark ruling, a Supreme Court bench of justices CK Prasad and Jagdish Singh Khehar directed the Shipping Corporation of India (SCI) to reinstate 41 year old Edward D’Cunha even though he suffers from schizophrenia, ending 13 long years of wait for justice. While he was on his duty in Visakhapatnam in 1997, Edward got his first schizophrenic attack which was diagnosed by doctors at the SCI. This was four years after he joined the SCI as a trainee nautical officer. The company forced him to resign after his fifth schizophrenic attack in 2000 when he asked for three months’ leave and threatened of blacklisting him if he did not. The company was taken to court by Edward’s father, Stanley. On March 3, 2010, the SCI and the chief commissioner was criticized by the Bombay High Court for their insensitive attitude in dealing with a schizophrenic patient and gave the SCI six weeks time to reinstate Edward by offering him a suitable post in their onshore office and also asked SCI t

The Madras High Court has come to the rescue of a 34-year-old man who suffered permanent disability after a jeep hit his vehicle eight years ago, by awarding a compensation of Rs.2,00,800 with 7.5 per cent interest. Earlier, the Motor Accident Claims Tribunal, Salem, in March 2009 dismissed the claim petition after the police filed a report of ‘mistake of fact.’ Setting aside the tribunal’s order, Justice S.Vimala directed the authorities to deposit the sum within six weeks. After the sum is deposited, the claimant could withdraw it. The Judge said the tribunal is expected to peruse the oral and documentary evidence adduced before it and come to an independent conclusion. It should adopt a proactive approach. It was vested with powers to call anybody to ascertain any fact and arrive at the correct conclusion. Instead of actively involving itself in ascertaining the truth, the tribunal just accepted the police’s report. On August 28, 2005, Baskar was riding his motorcycle near

IT : In computing long term capital gains on sale of inherited asset, indexed cost of acquisition is to be computed with reference to year first held by previous owne HIGH COURT OF GUJARAT Commissioner of Income-tax -I v. Gautam Manubhai Amin Section 48, read with section 49, of the Income-tax Act, 1961 - Capital gains - Computation of [Inherited property] - Assessment year 2006-07 - Whether for purpose of computing long-term capital gains in hands of an assessee who has acquired an asset under inheritance, indexed cost of acquisition of such capital asset is to be computed with reference to year in which previous owner first held said asset - Held, yes [Para 7] [In favour of assessee] FACTS   ■   The assessee inherited property along with his brother on the demise of their father on 23-12-1998. The property was sold for a consideration of Rs. 3.35 crores. The assessee calculated his share of capital gain at Rs. 21,24,438 taking the benefit of "Cost Inf

The Supreme Court on Thursday awarded a whopping Rs 5.96 crore as compensation to be paid by Kolkata- based AMRI Hospital and three doctors to a US-based Indian-origin doctor for medical negligence which led to the death of his wife in 1998. A bench of justices SJ Mukhopadhaya and V Gopala Gowda asked the hospital and the three doctors to pay the amount within eight weeks to Kunal Saha, an Ohio-based AIDS researcher. The National Consumer Dispute Redressal Commission (NCDRC) in 2011 had awarded Rs 1.73 crore to the doctor whose wife Anuradha Saha died in 1998 following faulty treatment administered at the hospital. Raising the amount of compensation, the apex court also asked the hospital to pay an interest at the rate of six per cent to Saha. The court said out of the total compensation amount, Dr Balram Prasad and Dr Sukumar Mukherjee will pay Rs 10 lakh each and Dr Baidyanath Halder will have to pay Rs 5 lakh to Saha within eight weeks. The rest of the amount, along with

Clinical trials in the country must be for the help of people here and must not be allowed for the benefits of multinational companies, the Supreme Court today said while holding that norms formulated by the Centre are "deficient" to protect the rights of the subjects. The apex court said no trial of new drugs be allowed till consent of people subjected to trial is recorded in audio/visual medium and permitted the trial for five entities but refused to pass order on 157 drugs which were allowed by the Centre. "Norms themselves are deficient to ensure that untoward incidents do not take place. You (Centre) should have a balanced approach and you cannot take one-sided view. Regime must be fool-proof. Clinical trials cannot be conducted here must help us and it must not be done for the benefit of others," a bench headed by Justice R M Lodha said. It ordered that clinical trials for the 157 drugs must be cleared by the technical and apex committees set up by the

This extremely important and sensitive matter appears to keep coming up for judgment before the Hon'ble Supreme Court, the latest being STATE OF HARYANA & OTHERS VERSUS NAVIR SINGH AND ANOTHER. In the above mentioned matter, one M/s. Ultra Tech Private, a company incorporated under the Companies Act, was sanctioned a term loan of Rs. 425 lakhs and working capital facility of Rs.99 lakhs by the Punjab National Bank (hereinafter referred to as the Bank). As agreed by the Bank, original title-deeds in respect of 19 Marlas of land belonging to Narvir Singh and 31 Marlas of land owned by Rajinder Kaur were deposited with the Bank by the borrower. In this way mortgage by deposit of title-deeds took place. It is not in dispute that this transaction had taken place in a town notified under Section 58(f) of the Transfer of Property Act. The Bank wrote to the Tahsildar, Panchkula for mutation on the basis of mortgage effected by deposit of the title-deeds. When nothing was done, the l

Residents and non-residents should pay same tax on capital gains from sale of securities, according to a Delhi High Court ruling that is expected to clear the fog on a tax question that foreign companies face. Long-term gains from off-market sale of securities attract a tax of 10% while a higher rate of 20% is charged after adjusting for inflation. The issue addressed by the court relates to Scotland-based Cairn UK Holdings which was asked to pay 20% tax by the tax office. Cairn UK Holdings faced a claim of around Rs 390 crore for the assessment year 2010-2011 from the tax department for selling shares in its India subsidiary Cairn India to Malaysia's Petronas Corp International. Cairn UK Holdings had sold 2.29% stake (or, 4,36,00,000 shares) in Cairn India to Petronas for $241,426,378 (approximately,Rs 1,100 crore at the exchange rate prevailing then). Since the share transfer was in off-market mode and not on a stock exchange, a tax of $85,584,251 (approximatelyRs 390 crore)

Offences related to banking activities are not only confined to banks but have a harmful impact on their customers and society at large, the Supreme Court has said while asking courts not to show leniency to the accused in such cases. A bench of justices S J Mukhopadhaya and Ranjan Gogoi said such offences involve moral turpitude and the accused should not be let off after refunding the money taken from the bank fraudulently. "The offences when committed in relation with banking activities including offences under Sections 420 (cheating), 471 (using forged document) have harmful effect on the public and threaten the well-being of the society. These offences fall under the category of offences involving moral turpitude committed by public servants while working in that capacity. "Prima facie, one may state that the bank as the victim in such cases but, in fact, the society in general, including customers of the bank is the sufferer," the bench said. It set aside

Developers seeking to surrender Special Economic Zones will have to give an undertaking that the land will be used in accordance with the recently amended guidelines so as to prevent its misuse, the Commerce Ministry said on Tuesday. Only those applications that fulfil the criteria laid down by the government will be considered for SEZ denotification, the Ministry said. As per the amended SEZ rules, “All such proposals (for denotification) must have an unambiguous ‘No Objection Certificate’ from state government concerned. Such land parcels after denotification will conform to Land Use guidelines/master plans of the respective state governments.” State governments may also ensure that such denotified parcels of land would be utilised towards creation of infrastructure which would sub-serve the objective of the SEZ as originally envisaged, according to the rules. “These conditions are in addition with the Board of Approval may impose including refund of duties/benefits which th

Courts cannot impose a fine more than twice the amount in bounced cheques, the Supreme Court has ruled, overturning a Calcutta High Court order for overshooting the limit in one such case. “The power to levy a fine is circumscribed under the statute to twice the cheque amount. Even in a case where the court may be taking a lenient view in favour of the accused by not sending him to prison, it cannot impose a fine more than twice the cheque amount. That statutory limit is inviolable and must be respected,” a bench of Justices T.S. Thakur and Vikramajit Sen said in a recent judgment. Under the Negotiable Instruments Act (NI Act), an accused in a cheque-bounce case can be sentenced to a maximum of a year or fined twice the default amount, or both. The high court had ordered a Calcutta borrower to pay Rs 1,49,500 — more than double the sum of Rs 69,500 on his bounced cheque. The high court’s directive included a fine of Rs 69,500 over an above Rs 80,000 paid by Somnath Sarkar to t

The Supreme Court of India on 15 October 2013 ruled that co-operative societies do not fall within the ambit of Right to Information (RTI). While ruling the judgment a bench of justice KS Radhakrishnan and justice AK Sikri told that mere supervision or regulation of a body by government would not make that body a public authority. Observations of the Supreme Court of India • Societies are of course subject to the control of the statutory authorities like Registrar, Joint Registrar and the Government. But cannot be said that the state exercises any direct or indirect control over the affairs of the society which is deep and all pervasive. • Supervisory or general regulation under the statute over the co-operative societies, which are body corporate, does not render activities of the body so regulated as subject to such control of the State so as to bring it within the meaning of the State or instrumentality of the State. • The mere supervision or regulation as such by a statute

 The National Consumer Disputes Redressal Commission has ordered the railways to pay Rs 10 lakh as compensation within three months to the widow of a Delhi-based senior citizen who was allegedly drugged and robbed on a long-distance train in Uttar Pradesh in 1998. The man had a reaction to the drug and eventually died in hospital. The railways were held guilty of negligence as the train attendant was asleep and medical help was provided late. The commission also directed Northern Railway, Moradabad, to conduct an enquiry against a doctor, the railway conductor, TTE and an attendant and submit a report by next April. Holding railway employees responsible for the death of R C Chopra, the senior citizen, the Commission said, "This is a case of negligence, inaction and passivity on the part of railway authorities. Had medical aid been given to the patient at Ghaziabad station itself, it could have saved the precious life of the deceased. It is well said that a stitch in

 Parents of a married daughter can be considered her legal heirs, the Bombay high court has said. The HC was hearing a compensation claim application filed by an elderly Mumbai couple after their 19-year-old married daughter died in a road accident 13 years ago, Justice A P Bhangale asked the Motor Accidents Claims Tribunal (MACT) to rehear the case. "Reading the provision as it is, any legal heir is entitled to claim compensation awardable under the Motor Vehicles Act," said Justice Bhangale. "Prima facie, it cannot be said that the parents of the victim, though she was married, were not her legal heirs, particularly when her husband was no more living." The judge said that the question needs full consideration and directed the MACT to hear the application and decide on it within six months. On November 4, 2000, Sneha Vaikar (19) and her husband died in an accident. Their minor son suffered serious injuries. Her parents Subhayadra and Manohar Ghule filed a R

An insurance company cannot reject a claim against theft of vehicle on the grounds that the owner does not yet hold a valid registration certificate, a consumer forum here has ruled, directing United India Insurance to pay `20,000 as compensation to a Kajheri resident besides the declared value of `43,864. Holding the firm deficient in services, the forum also ordered that Pradeep Kumar be paid `7,000 as cost of litigation. "The law on the subject is clear that the insurance company is not entitled to repudiate the claim on the ground that the vehicle had not been registered," observed the district consumer disputes redressal forum, Chandigarh, in its September 10 order, terming the claim rejection "totally unjustified and illegal". Pradeep Kumar had moved the forum saying that he had got his Honda Activa scooter that had a temporary registration number at the time, insured from United India Insurance Company Limited in June 2012. The scooter was stolen on Ju

NGOs and private organisations, substantially financed by government or its authorities, come under the ambit of Right to Information Act making them liable to reveal information under the transparency law, the Supreme Court today said. A bench of justices K S Radhakrishnan and A K Sikri said that even though government may not have any statutory control over such organisations but they fall within the definition of public authority if they are substantially financed by it. "Government may not have any statutory control over the NGOs, as such, still it can be established that a particular NGO has been substantially financed directly or indirectly by the funds provided by the appropriate government, in such an event, that organisation will fall within the scope of Section 2(h)(d)(ii) of the RTI Act (definition of public authority). "Consequently, even private organisations which are, though not owned or controlled but substantially financed by the appropriate government

Pendency of an arbitration proceeding or a litigation cannot be a reason to deny information to an RTI applicant by any government department, the Central Information Commission has ruled. "The mere pendency of arbitration proceedings is not sufficient justification by itself for withholding the information. The RTI Act provides no exemption from disclosure requirement for sub-judice matters. "The only exemption in sub-judice matters is regarding what has been expressly forbidden by a court or a tribunal and what may constitute contempt of court," Information Commissioner Basant Seth said in his order. The case relates to an RTI petitioner who sought from MTNL, through 34 different applications, details of expenditure which are being inquired into by the authorities. The Information officer refused to disclose the information citing section 8(1)(h) of the RTI. The section prohibits disclosure of information which would impede the process of investigation or ap

In a major relief for common litigants, the Delhi High Court on 9th October, struck down the Court Fees (Delhi Amendment) Act, 2012, through which the Delhi Government had increased court fees across the board last year. A Division Bench of Justice Gita Mittal and Justice J. R. Midha quashed the government’s decision on a petition filed by the Delhi High Court Bar Association, arguing that the government lacked the jurisdiction to carry out the amendment. The Association had challenged the increase by saying the Delhi Government did not have the legislative competence to increase the fees as the law governing them was a Central legislation. The Delhi Government had defended the hike saying that the new rates had been introduced on the instructions of the High Court and that it would facilitate implementation of the e-Court project in the Capital. “We have held that the Delhi Assembly did not have the legislative competence to amend the Court Fees Act, 1870. We have also held t

 In a landmark ruling, the Madras high court has said electricity supply is a legal right and denial of power supply is a violation of human rights. Justice S Manikumar, directing the Tiruvannamalai district administration and the Tamil Nadu Electricity Board (TNEB) to give electricity supply to more than 180 families of launderers living along Girivalam (circumambulation) path in Tiruvannamalai, on Tuesday said: "Access to electricity should be construed as a human right. Denial of it would amount to violation of human rights." Noting that electricity has a bearing on education, health and family economy of the poor, Justice Manikumar said: "Lack of electricity supply is one of the determinative factors, affecting education, health and a cause of economy disparity, and consequently, inequality in society leading to poverty. Electricity supply is an aid to get information and knowledge. Children without electricity supply cannot even imagine competing with others.&q

Can cirrhosis of the liver be attributed only to drinking? Or cancer in a smoker be attributed solely to smoking? There might be several factors which could cause a particular ailment, and it is not possible to pin-point why the ailment occurred. Yet, insurance companies usually attribute a reason for an ailment which would make it convenient for them to reject the claim. The Maharashtra State Commission has recently held that jumping to such a presumption is incorrect. Suresh Chunilal Jani and his wife Purnima were insured for Rs 2.75 lakh each, under a medi-claim policy issued by National Insurance Company. During the subsistence of the policy, Suresh was admitted to Hinduja hospital for cirrhosis of the liver. The hospitalization cost for 10 days came to Rs 92,912, while the medical expanses amounted to Rs 27,022, totaling to Rs 1,19,934.He lodged a claim for reimbursements of these expenses, but his claim was rejected on the ground that the treatment was for ‘alcoholic liver dis