Legal News & Views

In N. Harihara Krishnan Vs J. Thomas, the Supreme Court has pronounced a point of law that the offence under Section 138 of Negotiable Instruments Act is person specific. It was also clarified that the general concept under Cr.P.C that cognizance was taken against the offence and not against the offender was not appropriate in prosecution under NI Act. The complainant in the case was issued a cheque, which was signed by one Harihara Krishnan. The cheque was drawn allegedly in discharge of balance sale consideration payable by M/s Norton Granites Pvt. Ltd. However, the cheque was in fact drawn on account of another private limited company, M/s Dakshin Granites Pvt.Ltd., in which also Harihara Krishnan was a director. The cheque was dishonoured for want of funds. Under the impression that the cheque was drawn on the account of Norton Granites Pvt. Ltd  presumably because consideration was allegedly due from them), the complaint was filed only arraying Harihara Krishnan as ...

A division bench of the Delhi High Court, in Principal Commissioner of Income Tax v. Bikram Singh, held that assesse cannot prove the genuineness of the transaction by merely establishing of the identity of the creditors and the fact that the amounts have been transferred through cheque payments. Earlier, the ITAT finding the fact that merely because the payments were through cheques, has held that the transactions were genuine. In the instant case, the department has made additions in respect of loans/advances received from eight persons, on the ground that the Assessee was unable to establish the identity, creditworthiness and genuineness of the said persons and transactions. Justice S Muralidhar and Justice Prathiba M Singh observed that the ITAT has ignored the evidence on record and did not even examine the genuineness of the transaction or the financial strength of the creditor as required in law. “Merely because the transaction was by payments through cheque, the IT...

In C. Karthikeyan Vs. The Secretary to Government Rural Development and Panchayat Raj Department and Ors., the Madras High Court while referring to the decisions of B.S.N. Joshi and Sons Ltd. v. Nair Coal Services Ltd. and Michigan Rubber (India) Ltd. v. State of Karnataka, held that in the matter of contracts, the Court cannot interfere. However, if there is an element of bias, mala fide, arbitrariness or unreasonableness, the Court can exercise its discretionary power and review the same. In the light of ratio laid down by the Apex Court in the decisions cited above, in present case, there is no arbitrariness in imposition of conditions in Clauses 3(4) and 3(5) of the General Conditions or any mala fide intention on part of Respondent authorities to favour a particular person nor any element of bias or unreasonableness in the tender notification, except that imposition of such a condition is only to ensure that the scheme is implemented without any difficulty. Further, ...

In John Fowler (India) Pvt. Ltd vs. DCIT (ITAT Mumbai), the Tribunal held that the AO is not entitled to make an addition to the sale consideration declared by the assessee if the difference between the valuation adopted by the Stamp Valuation Authority and that declared by the assessee is less than 10% and directed the AO to adopt the valuation of sale consideration as declared by the assessee. The additions made by the Assessing Officer u/s. 50C is deleted and as grounds raised by the assessee are allowed.

In Liladhar T Khushlani vs. Commissioner of Customs, the assessee filed a rectification application and claimed that it was maintainable as it was filed within six months from the date of service of notice of the order, which was sought to be rectified. However, the learned CESTAT dismissed the said application considering the starting point of limitation of rectification as the date of the order sought to be rectified. The Gujarat High Court had to consider the question whether for the purpose of filing the rectification application, period of limitation of six months would commence from the date of the order, which is sought to be rectified or from the date of receipt of the order sought to be reviewed /rectified by the concerned assessee? Referring to judgements in Vadilal Industries Ltd. Vs. Union of India reported in 2006 (197) ELT 160 (Gujarat) and Devang Kamleshbhai Mehta & Ors. Vs. State of Gujarat & Ors. the court held that for purposes of filing a re...

In CIT vs. Hindustan Petroleum Corporation Ltd, The Supreme Court had to consider whether bottling of LPG, as undertaken by the assessee, is a process which amounts to ‘production’ or ‘manufacture’ for the purposes of Sections 80HH, 80-I and 80-IA of the Act?; and if so, whether the assessees are entitled to claim the benefit of deduction under the aforesaid provisions while computing their taxable income? HELD by the Supreme Court: The word ‘production’ has a wider connotation in comparison to ‘manufacture’. Any activity which brings a commercially new product into existence constitutes production. The process of bottling of LPG renders it capable of being marketed as a domestic kitchen fuel and, thereby, makes it a viable commercial product. In the considered opinion of this Court, the aforesaid activity would definitely fall within the expression ‘production’. (1) At the outset, it needs to be emphasised that the aforesaid provisions of the Act use both the expre...

In Digipro Import & Export Pvt. Ltd vs. UOI, the Delhi High Court condemned the llegal practice of the Dept of collecting undated cheques from taxpayers after search/ survey without even quantifying the extent of duty evasion. The court said that attempt of the unscrupulous officers is to 'negotiate' the evaded duty by threats and coercion. It is not rule of law but anarchy unleashed by holders of public office. It is an abuse of law which has to be stopped.