Legal News & Views

CIT vs. Syed Ali Adil (Andhra Pradesh High Court) S. 54/54F deduction allowable for purchase of multiple independent house unitsThe assessee offered long term capital gains on sale of property and claimed s. 54 deduction on the ground that he had purchase two adjacent residential flats. The AO held that the deduction could not be given for both flats on the ground that they were independent units, separated by a strong wall. The CIT(A) and Tribunal allowed the claim on the basis that s. 54 deduction was available for purchase of multiple flats, even if the flats were on different floors. On appeal by the department to the High Court, HELD dismissing the appeal: The expression “a residential house” in s. 54 (1) has to be understood in the sense that the building should be of residential nature and “a” should not be understood to indicate a singular number. Where an assessee had purchased two residential flats, he is entitled to exemption u/s 54 in respect of capital gains on sale o...

Giving respite to a man accused of burning his pregnant wife to death over suspicion of adultery, the Nagpur bench of Bombay High Court has held that the lady's dying declaration was not free of doubt and, therefore, unsafe to rely upon. "There cannot be any dispute on the proposition of law that dying declarations can be basis for conviction and there is no need of corroboration, but those must be free from any doubt and it must be inspiring the confidence," a division bench comprising justices Ravindra Chavan and Prasanna Varale observed. The bench set aside the conviction of a Buldhana resident, who had been awarded lifer by the sessions court based on the two dying declarations by his wife. Petitioner Vilas Bilawar had entered into wedlock with Sarla in 2004 and initial period was smooth till they were blessed with a male child named Vishal. Afterwards, Vilas and his parents started picking up quarrels with Sarla on trifle issues, which led to their separation. Sh...

An insurance company cannot make changes unilaterally or surreptitiously to the disadvantage of the insured , observed a consumer forum as it directed the New India Assurance Company Ltd to pay the insured amount of Rs 1.59 lakh along with Rs 69,000 compensation to a Chowpatty-based man, Kaushik Pandya, after it wrongly repudiated his wife's mediclaim. Pandya had told the forum that he had obtained information under the RTI Act about the number of claims received and paid by the insurance company for treatment similar to that undergone by his wife. "It was revealed that of the total 125 claims reported, the company had paid 28 claims and rejected 97 during the year 2009-10," he said. Pandya told the forum that his wife, Rupa, suffered from age-related macular degeneration in her left eye from 1989 and was unable to see with that eye. In 2009 Rupa had to undergo treatment for the illness in her right eye, which remained bandaged for 24 hrs. As she also suffered fro...

Realty major Unitech Ltd has been directed by the apex consumer commission to reimburse nearly Rs 14 lakh spent by a customer on rent after the flat for which he paid over Rs 1.37 crore in 2007 was not handed over to him till date. The National Consumer Disputes Redressal Commission (NCDRC) also pulled up the real estate major and its top officials, Executive Chairman Ramesh Chandra and Managing Directors Sanjay Chandra and Ajay Chandra, saying "even after lapse of six years the flats are not ready". "It is clear that the opposite parties (Unitech and its officials) want to have benefit of both the worlds. They have received the entire price of the apartment at the time of execution of the agreement. Even after the lapse of six years, the flats are not ready. "The opposite parties have offered peanuts for delaying construction of work. They have to honour their commitment," a bench headed by Justice J M Malik said, giving six months time to Unitech to han...

In an order that will send a warning signal to fraudulent developers and errant bankers, the AP state consumer disputes redressal commission told M/s Maytas Properties Pvt Ltd to refund the entire amount it had collected from three aggrieved customers, who paid hefty amounts ranging from Rs 50 lakh to Rs 80 lakh towards flats in the company's proposed Hill County venture at Bachupalli in Rangareddy district. Though the flats were not constructed, the banks granted loans to customers and handed over the total money to Maytas and started deducting the same from the customers. Blasting the banks for releasing amounts despite construction having not taken place at Maytas Hill County, the commission said, "You (banks) have to release the loan amount in a phased manner based on the progress of the construction. In the current case, you gave the amount to developer without the latter making any progress in construction of flats,'' the commission said, and directed the banks...

An insurance company will have to pay nearly Rs 3 lakh as compensation to a Vidyavihar resident after it wrongly rejected his father's life insurance claim on the grounds that the latter had concealed a pre-existing disease while taking the policy in 2007. Observing that the onus was on the insurance company to prove that there was material concealment of a disease which directly proved to be fatal, the South Mumbai District Consumer Disputes Redressal Forum also told Aviva Life Insurance to pay the heir of the deceased the insured amount of Rs 10.67 lakh. The forum held that the deceased, Balakrishan Makwana, was over 45 years old when he had obtained the policy and a mandatory medical check-up should have been conducted. Balakrishan had subscribed to a policy plan called "Save Guard", under which he was to pay an annual premium of Rs 3 lakh and was promised an assured amount of Rs 15 lakh. After paying two premiums, Balakrishna requested the company in January 200...

 A Kolkata-based business school has won its battle against a post-graduate programme applicant with the apex consumer court reversing a subordinate commission’s direction to refund Rs.34,000 out of the admission fee deposited by her. The National Consumer Disputes Redressal Commission offered relief to Globsyn Business School and held that it was not wrong in refusing to refund the admission fee received from Mayuri Ghosh, a resident of Kolkata’s Durga Charan Doctor Road area. Ghosh deposited Rs.35,000 as admission fee in April 2009 for a post-graduate course but sought a refund a month later citing a financial crunch and inability to pursue the course, which required a total fee of Rs.535,000. “Admission fee deposited by complainant was not refundable and the complainant was not entitled to seek refund only on the ground of severe financial crises,” said national commission Presiding Member K.S. Chaudhari and Member B.C. Gupta. The top consumer commission, in a recent ord...

Y. P. Trivedi vs. JCIT (ITAT Mumbai) The assessee filed an appeal before the Tribunal which was delayed by 496 days. In the application for condonation of delay, the assessee claimed that he had handed over the papers to his Chartered Accountant and that the latter had mixed up the papers with other papers in his office which led to the delay. The department opposed the application on the ground that there was “gross negligence” on the part of the assessee and that sufficient cause for the delay was not explained. HELD by the Tribunal: The facts do not suggest that the assessee has acted in a malafide manner or that the reasons explained are only a device to cover an ulterior purpose. It is a settled proposition of law that Courts should take a lenient view on the matter of condonation of delay provided the explanation and the reason for delay is bonafide and not merely a device to cover an ulterior purpose or an attempt to save limitation in an underhand way. The Court should be l...

National Consumer Disputes Redressal Commission (NCDRC) has directed a woman to pay a total of Rs 40,000 to seven doctors and an ayurvedic clinic for pursuing a meritless case for 10 last years against them. In a recent order, the NCDRC directed the woman to pay Rs 5,000 to each of the parties, and said, "During the last 10 years, the petitioner has taken the respondents to different consumer fora by filing one petition or the other, just to cause harassment to them." The complainant, Raika Bandukwalla, had filed the complaint along with her now deceased aunt Mohsena. According to the complaint, Mohsena was suffering from breathlessness, leg pain and skin discolouration. In 2002, influenced by the advertisements of Coimbatore-based Ayurvedic Trust and Research Centre, Mohsena got admitted for a 35-day treatment at their Calicut centre. Her niece reportedly paid Rs 1.26 lakh for the treatment. Bandukwalla alleged that following the treatment, Mohsena's condi...

A consumer forum has to follow a summary procedure for the adjudication of complaints. But at times, the authenticity and credibility of the evidence is challenged as fabricated. In such a situation, sometimes, a consumer forum refuses to weigh a complaint on the grounds that it involves adjudication of complicated facts. It, instead, asks the parties to approach the regular civil court. This is incorrect. In such a case, a consumer forum isn't helpless; it can obtain evidence by referring the documents for examination by experts. This significant ruling was given by a National Commission bench of judges K S Chaudhari and Suresh Chandra in revision petition number 2008 of 2012 on February 11, 2012 (The New India Assurance Co Ltd v/s Sree Sree Madan Mohan Rice Mill). The rice mill claimed a fire had broken out at its office-cum-manufacturing unit. An insurance claim was lodged for the loss. The insurance company didn't settle the claim. Aggrieved, the mill filed a complaint ...

The Motor Accident Claims Tribunal (MACT), Pune, has awarded a compensation of Rs 46.26 lakh to the husband and 13-year-old son of a 39-year-old woman who was killed in a road accident on the old Pune-Mumbai highway at Pimpri in 2009. They had filed a claim of Rs 40 lakh and the MACT awarded more compensation considering age and earning capacity of the deceased. MACT member N P Dhote ordered that the compensation be jointly paid by the truck's owner Aruna Jadhav of Pimpri and The Oriental Insurance Company Limited with seven percent interest from the date of filing the petition in 2010 till the realisation of the amount. The deceased, Swita Devraju (39) of Chinchwad, was serving as a teacher with Hindustan Antibiotics School. She was a permanent employee and earned Rs 26,595 per month. On December 7, 2009, Swita and her friend Asha Bansode were going to Chinchwad via the old Pune-Mumbai highway. Swita was driving the two-wheeler. At around 5.30 pm , a truck came from behind and...

A departmental circular cannot modify contract conditions of an insurance policy, a consumer forum here has said while directing LIC to pay over Rs 6.96 lakh for deducting surrender value from a pension plan holder's investment prior to refunding her money. The New Delhi District Consumer Disputes Redressal Forum held the state-run insurance company deficient in service for deducting an amount of Rs 6.46 lakh when the 71-year-old woman had surrendered her pension policies, saying the policy conditions clearly said no surrender value will be deducted. "We have gone through the policy document in which it is categorically mentioned - 'The policy shall not acquire any surrender value' - whereas opposite party refunded the amount to complainant after deducting surrender value which is a clear case of deficiency on its part. "No departmental circular can modify the contract conditions of policy," the bench presided by C K Chaturvedi said, adding that "d...

Facts of the case The petitioner A, a Hindu, and respondent OH, a Muslim, lived under one roof, had sexual relations, and had two children between 1994 and 1999. There was documentary proof that OH was the father of at least the second of such children. There was also proof that OH had applied for a “family card” for himself, A and the two children. However, A’s marriage to OH was not registered in the Islamic marriage register - the Nikah book. In 1999 OH deserted A and her two minor children. In 2000 she filed for maintenance of Rs 5,000 per month from him for herself and the two children, claiming that he earned Rs 25,000 per month from his business. OH denied that A was his wife, said she was a “dubious” woman who was his co-worker, and that there was no documentary proof of religious solemnisation of marriage between them. The family court judge observed that though the two children belonged to the respondent and were each entitled to a maintenance of Rs 500 per month...

There is no law that prohibits a person from signing in capital letters, the Delhi high court said while directing the Centre to consider the application of a man who was denied job for signing in capital letters. A bench of justices Gita Mittal and Deepa Sharma recently allowed the plea of Arif, who was denied appointment for the post of constable in Central Industrial Security Force (CISF) earlier this year, and asked the central government to consider his candidature, if he is otherwise eligible, within six weeks. The bench relied on the court's previous judgment on a similar issue and said "it is well settled that there is no law which prohibits a person to sign in capital letters. It has been held in the judgment of this court...that a signature is a trait which a person develops over a period of time and these traits can develop even with reference to capital letters." The court accepted Arif's claim that he was informed about the denial of job through a l...

The Bombay High Court has held that in cases of outraging modesty of women, the evidence tendered by the victim should be sufficient to nail the accused and it was not necessary to seek corroboration. The court observed this while finding a man guilty of outraging the modesty of his brother's wife. In this regard, the Judge relied entirely upon the evidence given by the victim. "Such evidence can be given only by the victim herself. The victim has been cross-examined at length. However, no discrepancies were pointed out in her evidence. "No other can depose on her behalf", the Judge noted in her order on June 10. The court dismissed an appeal filed by Ashok Ghodke against a Pune magistrate's order finding him guilty of outraging the modesty of his sister-in-law. However, he and other family members had been acquitted of charges of cruelty (section 498A) and 506 (criminal intimidation) of Indian Penal Code. The high court also upheld the lower court'...

A mere allegation of involvement in criminal offences cannot deprive a person of opportunity to be recruited in government service, the Central Administrative Tribunal (CAT) has held while setting aside cancellation of candidature of a Delhi police aspirant who was accused of molesting a woman but later acquitted of the charge. "In our considered view, there is a difference between involvement in offences involving moral turpitude like outraging the modesty of a women and mere allegation to that effect with the motive to deprive a person of his opportunity to be recruited in government service,"a CAT bench, comprising members George Paracken and Shekhar Agarwal, said. The tribunal quashed the Delhi Police order cancelling the candidature of Vipin Rathi for the post of Constable by relying on his submission that during trial of the criminal case against him, the parties agreed to settle out of court the offences which were compoundable. With regard to the rest of the alleg...

IT : Where assessee by mistake claimed interest received on Government of India Capital Index Bonds as interest received on tax free bonds, levy of penalty under section 271(1)(c) upon assessee was not justified IT : Where assessee claimed premium received on redemption of debentures as income from capital gains, whereas Assessing Officer held that said premium was assessable to tax under head 'income from other sources' and also levied penalty under section 271(1)(c) upon assessee, since there was only a change of head of income, levy of penalty was not justified HIGH COURT OF BOMBAY Commissioner of Income-tax - I, Mumbai v. Bennett Coleman & Co. Ltd.* J.P. DEVADHAR AND M.S. SANKLECHA, JJ. IT APPEAL (LOD) NO. 2117 OF 2012 FEBRUARY  26, 2013  Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income [Bona fide claim, disallowance of] - Assessment year 1999-2000 - Assessee claimed deduction of interest on tax free bonds - Assessi...

A private firm cannot be barred or blacklisted from doing business with the government or its agencies without a proper show cause notice as such actions have "serious" consequences, the Delhi High Court has said. "It is an undisputed proposition of law that since an order debarring a person from doing business with the government or its agencies carries serious civil consequences, no such order can be passed without giving notice to him, requiring him to show cause against the proposed debarring/blacklisting," Justice V K Jain said. The court's observation came in a verdict by which it quashed a circular of Delhi Development Authority (DDA). DDA blacklisted M/s Thermo Blow Engineers, engaged in manufacturing and supply of sports and fitness equipment, from taking part in future tenders on the ground that it supplied faulty belts and decks for the treadmills in 2012. DDA, in one of letters, alleged that due to faulty spares, "jerk was felt during wo...

In a significant ruling, the Bombay High Court has laid down a substantial point of law, saying the liability towards an employee engaged by a contractor or managing agent is on the principal employer. The court recently upheld the decision of 'Mumbai Commissioner for Workmen's Compensation' to award monetary relief to a worker, who died in an accident despite the fact that he was not employed by the principal employer but by a contractor. Justice A H Joshi was hearing an appeal filed by United Assurance Company Ltd, which challenged the award of compensation to a driver who was hired by M G M Motors to transport vehicles on behalf of Mahindra & Mahindra Ltd (M&M). The Judge noted that this being an appeal under The Employees' Compensation Act, the appellant has to substantiate the challenge on substantial questions of law. He directed the appellant's advocate K V Vitonde to pin point and address the court on substantial question of law whether a pri...