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INCOME TAX ACT, 1961: Capital receipt -Assessment year 1997-98 -Payment received under an agreement not to compete (negative covenant) -Held: Compensation attributable to a negative/restrictive covenant during the relevant assessment year was a capital receipt not taxable under the Act -It became taxable only w.e.f. 1.4.2003 -A liability cannot be created restrospectively-s.28 (va) is a mandatory and not clarificatory. During the assessment year 1997-1998, the assessee received Rs. 50 lakhs as non-competition fee in consideration of an agreement that contained prohibitive/restrictive covenant. The assessee agreed to transfer its trade marks to transferee company and in consideration of such transfer on the terms and conditions appearing in the agreement, the assessee agreed that it would not carry on directly or directly business that was being carried on by it till that time. The Commissioner of Income Tax (Appeals) while overruling the decision of the AO held that the amount received by the assessee from transferee company was a capital receipt not taxable under the Income Tax Act, 1961. The decision was affirmed by the Tribunal. The High Court reversed the judgment of the Tribunal. In the appeal filed by the Revenue, the question for consideration before the Court was: whether a payment under an agreement not to compete (negative covenant agreement) is a capital receipt or a revenue receipt. Allowing the appeal, the Court HELD: 1.1. The position in law is clear and well settled. There is a dichotomy between receipt of compensation by an assessee for the loss of agency and receipt of compensation attributable to the negative/restrictive covenant. The compensation received for the loss of agency is a revenue receipt whereas the compensation attributable to a negative/restrictive covenant is a capital receipt. [Para 5] [903-D-E] Gillanders Arbuthnot and Co. Ltd. v. CIT, Calcutta 53 ITR 283 – relied on. 1.2. The High Court has misinterpreted the judgment of this Court in Gillanders’ case. In the instant case, the Department has not impugned the genuineness of the transaction. The High Court has erred in interfering with the concurrent findings of fact recorded by the CIT (A) and the Tribunal. [Para 7] [904-D-E] 1.3. One more aspect needs to be highlighted. Payment received as non- competition fee under a negative covenant was always treated as a capital receipt till the assessment year 2003-04. In order to put an end to such litigations, Parliament stepped in to specifically tax such receipts under non-competition agreement with effect from 1.4.2003. It is only by Finance Act, 2002 with effect from 1.4.2003 that the said capital receipt is now made taxable [Section 28(va)]. The Finance Act, 2002 itself indicates that during the relevant assessment year compensation received by the assessee under non-competition agreement was a capital receipt, not taxable under the 1961 Act. It became taxable only with effect from 1.4.2003. It is well settled that a liability cannot be created retrospectively. In the instant case, compensation received under Non-Competition Agreement became taxable as a capital receipt and not as a revenue receipt by specific legislative mandate by s. 28(va) and that too with effect from 1.4.2003. Therefore, the said s. 28(va) is amendatory and not clarificatory. [Para 7] [904-E-H] Commissioner of Income-Tax, Nagpur v. Rai Bahadur Jairam Valji, 35 ITR 148 -referred to. 1.4. The impugned judgment of the High Court is set aside and the order of the Tribunal restored. [Para 8] [905-D] Case Law Reference: 53 ITR 283 approved para 4 35 ITR 148 referred to para 7 CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2522 of 2011 From the Judgment & Order dated 29.10.2009 of the High Court of Karnataka, Circuit Bench at Dharwad in ITA No. 985 of 2006. B. Bhattacharya, ASG, Porus, F. Kaka, R.P. Bhatt, Manish Kanth, Rustom B. Hathikhanawala, Fuzail Ahmad Ayyubi, Naresh Kaushik, Arijit Prasad, Ajay Singh, B.V. Balram Das, Ajay Singh, K. Sampath and Rani Chhabra for the appearing parties.
REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.2522 OF 2011 (arising out of S.L.P. (C) No. 6081 of 2010) Guffic Chem P. Ltd. … Appellant(s) versus C.I.T., Belgaum & Anr. … Respondent(s) WITH Civil Appeal No.2523 of 2011 (arising out of S.L.P. (C) No. 222 of 2011) J U D … Continue reading
the Court would not normally interfere with the policy decision and in matters challenging the award of contract by the State or public authorities. In view of the above, the appellant has failed to establish that the same was contrary to public interest and beyond the pale of discrimination or unreasonable. We are satisfied that to have the best of the equipment for the vehicles, which ply on road carrying passengers, the 2nd respondent thought it fit that the criteria for applying for tender for procuring tyres should be at a high standard and thought it fit that only those manufacturers who satisfy the eligibility criteria should be permitted to participate in the tender. As noted in various decisions, the Government and their undertakings must have a free hand in setting terms of the tender and only if it is arbitrary, discriminatory, mala fide or actuated by bias, the Courts would interfere. The Courts cannot interfere with the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical. In the case on hand, we have already noted that taking into account various aspects including the safety of the passengers and public interest, the CMG consisting of experienced persons, revised the tender conditions. We are satisfied that the said Committee had discussed the subject in detail and for specifying these two conditions regarding pre-qualification criteria and the evaluation criteria. On perusal of all the materials, we are satisfied that the impugned conditions do not, in any way, could be classified as arbitrary, discriminatory or mala fide.
REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION 1 2 CIVIL APPEAL NO. 5898 OF 2012 3 (Arising out of SLP (C) No. 25802 of 2008 M/s Michigan Rubber (India) Ltd. …. Appellant (s) Versus The State of Karnataka & Ors. …. Respondent(s) J U D G M E N T P. … Continue reading
the payment of wages – The appellant remained in Tihar Central Jail, New Delhi from 24.03.2007 to 23.12.2010 i.e., for a period of 3 years and 10 months after grant of remission. During this period, she was allotted work in Medical Inspection (MI) room as ‘Sewadar’ (Assistant) for assisting the Doctors in OPD of Jail No. 6. Apart from that, she was also taking care of the cleanliness of the said room till her release.It is the simple case of the appellant that during her actual custody, viz., 3 years 10 months, she was assigned work in M.I. room as Sewadar (Assistant) which includes assisting Doctors in OPD and ‘Mulhiza’ and additional labour was also allotted to her and except for the above mentioned period, she was not paid any wages. On the other hand, it is the definite case of the jail authorities that for the work done, the convict had been paid wages as per the circulars/orders applicable to her. In view of the conflicting stand taken by both the sides and assertion of the appellant about her signature and certain entries in the Ledger, in order to do substantial justice, we permit the appellant to make a fresh representation to the visiting Judge giving all the details about the work done during the period of custody within a period of 4 weeks from today. On receipt of the representation, we direct the visiting Judge to inspect and peruse the Ledgers/documents with the assistance of the jail authorities in the presence of the appellant duly assisted by Supreme Court Legal Services Committee, preferably, Ms. Prachi Bajpai, and pass an order within a period of 3 months thereafter. The said decision has to be communicated to the appellant and the respondent-Jail Authorities. In the ultimate inquiry, if it is found that the appellant is entitled to any amount in addition to the amount already settled as wages, the same shall be paid within a period of 4 weeks thereafter. It is further made clear that except highlighting the grievance of the appellant and various circulars/orders of the Jail Authorities, we have not expressed anything on the merits of the claim of either party. 11) The appeal is disposed of with the above direction.
REPORTABLE IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION 1 CRIMINAL APPEAL NO. 1186 OF 2012 (Arising out of S.L.P. (Crl.) No. 2853 of 2012) Phool Kumari …. Appellant(s) Versus Office of the Superintendent Central Jail, Tihar, New Delhi and Anr. …. Respondent(s) 2 O R D E R P.Sathasivam,J. 1) Leave … Continue reading
service matter – punishment of removal from service that was imposed on him by the Cantonment Board, Jammu. It may be noticed, at the outset, that the High Court had allowed the Writ Petition of the respondent on the ground that the order of the Officer Commanding-in-Chief, the Command, affirming the order of the Cantonment Board removing the respondent from service was passed on the basis of an invalid reference made to the Officer Commanding- in-Chief, the Command, under the provisions of the Cantonments Act, 1924 (hereinafter referred to as the ‘Act’). The power to interfere with any decision of the Board is vested in the Officer Commanding-in-Chief, the Command, and the provisions of Section 52 merely enumerate the slightly different modes of exercise of the power in the different circumstances contemplated therein.We have noticed that certain questions with regard to the merits of the order dated 22.11.2001 passed by the Officer Commanding-in-Chief, the Command, were raised in the writ petition. As the writ petition as well as the LPA arising therefrom were decided on the question of jurisdiction of the Officer Commanding-in-Chief, the Command, to pass the impugned order dated 22.11.2001, the High Court had no occasion to go into the said questions raised. We, therefore, remand the matter to the High Court for consideration of all the other contentions raised in the writ petition by the respondent herein which issues will now be decided by the High Court as expeditiously as possible.
|REPORTABLE | IN THE SUPREME COURT OF INDIA CIVIL APPELATE JURISDICTION CIVIL APPEAL No. 5820 of 2012 ( Arising out of SLP (Civil) 21824 of 2007) Cantonment Board, Jammu & Ors. … Appellants Versus Jagat Pal Singh Cheema … Respondent J U D G M E N T RANJAN GOGOI, J Leave granted. 2. … Continue reading
“14. Ex.C-4 is the receipt issued by the appellant vide which ‘Safed Musli sowing material was booked in advance for Rs. 78,000/-. Ex.C-10 is the guidelines issued by the appellant through its Technical Department and the name of the supervisor was Iqbal Singh, Ex. C-12 is the advertisement vide which respondent no. 1 and others were allured to cultivate ‘Safed Musli’ and the same was got published by the appellant, being franchisee of respondent no. 2, as mentioned in this advertisement and Ex.C-13 is the copy of the News Letter issued by the appellant, further guiding the farmers for preparation of the fields. Memorandum of Understanding (MOU) Ex. C-7 is not signed by any party and mere attestation is not sufficient to bind respondent no. 2 vide this MOU, but it is clear that the appellant allured respondent no. 1 and others to cultivate the ‘Safed Musli crop and predicted huge profits. Respondent no. 1 admittedly purchased ‘Safed Musli’ seed from the appellant and under the guidance of Iqbal Singh, who was the supervisor of the appellant, the said seed was sown but later on, Iqbal Singh gave his affidavit Ex.C-3, blaming that the plants withered away as the seed was not of good quality. The appellant has sold the seeds to respondent no.1 and it was for the appellant to ensure about the quality of the Seed. The appellant was required to obtain the copy of the certification of the seeds as well as the analyst report, before alluring the farmers to go for ‘Safed Musli’ crop as mode of diversification of the crop, but nothing has been placed on record and the absence of these vital documents and the affidavit of Iqbal Singh, supervisor of the appellant definitely prove that the quality of the seed was poor and for that the respondent no.1 suffered loss. This District Forum in its well reasoned and detailed order has rejected the other claims of respondent no. 1 which he could not prove, but has allowed the claim which is justified and there is no ground to interfere with the same ” . We find no merit in the revision petition, and therefore, the same is dismissed.
NATIONAL CONSUMER DISPUTES RERESSAL COMMISSION NEW DELHI REVISION PETITION NO. 2675 OF 2012 (From the order dated 30.04.2012 in Appeal No. 562/2007 of the State Consumer Disputes Redressal Commission, Punjab, Chandigarh) Diverse Agro … Petitioner 48-B, Tagore Nagar, Ludhiana through its Partner Sukhbir Singh of Ludhiana Versus 1. Gurmeet Singh … Respondents S/o Sh. Mukhtiar Singh R/o Dhan Singh … Continue reading
Section 151 CPC and analogus to the provisions of Order 1 Rule 10 of the Code of Civil Procedure for impleadment of a party to the complaint. The complainants are the parents of Shri‘Nitin Arora’ a student of Ninth class, who used to study in ‘Mahashya Chuni Lal Saraswati Bal Mandir, Senior Secondary School, L-Block, Hari Nagar, New Delhi’. He went with the school teachers and drowned in the Saryu river while taking a bath. There is sufficient delay in filing this application but taking into consideration the fact that the complainants are the unfortunate parents of a child, who died at a very young age, we do not propose to impose any costs. Amended complaint be filed and school be summoned for 24.9.2012. School is directed to file its written statement on the date fixed.
NATIONAL CONSUMER DISPUTES RERESSAL COMMISSION NEW DELHI M.A. No. 296 OF 2012 (for impleadment of parties) IN ORIGINAL PETITION NO. 269 OF 1999 Madan Lal Arora … Complainant Versus Dharampal Ji,M.D.H. & Ors. … Opposite Parties BEFORE: HON’BLE MR. JUSTICE J.M. MALIK, PRESIDING MEMBER HON’BLE MR. VINAY KUMAR, MEMBER For the Complainant : Mr. Peeyoosh Kalra, Advocate with Mr. Ashok, Advocate For the Opp. Parties : Mr. D. K. Mehta, Advocate Pronounced … Continue reading
service matter – On 13.09.2004, the appellant, who was working on the post of District and Sessions Judge, Punna was compulsorily retired from the service in the public interest by the Government of Madhya Pradesh (for short, ‘the Government’) on the request of the Madhya Pradesh High Court (for short, ‘High Court’). The order of compulsory retirement was issued by the Government in exercise of its power under amended Rule 56(2)(a) of the Fundamental Rules, as made applicable in the State of Madhya Pradesh, Rule 14 of the Madhya Pradesh Higher Judicial Service (Recruitment and Service Conditions) Rules, 1994 (for short, ‘1994 Rules’), Rule 42(1)(b) of the Madhya Pradesh Civil Services (Pension) Rules, 1976 (for short, ‘1976 Rules’) and Rule 1-A of Madhya Pradesh District and Sessions Judges (Death- cum-Retirement Benefits) Rules, 1964 (for short, ‘1964 Rules’). In lieu of notice of three months, it was directed in the order that the appellant shall be entitled to three months’ salary and allowances which he was receiving prior to his retirement. The conduct of the appellant in involving an M.P. and the Ministry of Law, Justice and Company Affairs, in a matter of the High Court concerning an administrative review petition filed by him for expunging adverse remarks in ACRs of 1993 and 1994 is most reprehensible and highly unbecoming of a judicial officer. His conduct has tarnished the image of the judiciary and he disentitled himself from continuation in judicial service on that count alone. A Judge is expected not to be influenced by any external pressure and he is also supposed not to exert any influence on others in any administrative or judicial matter. Secondly and still worst, the appellant had an audacity to set up a plea in the rejoinder that he never made any representation to Shri R.K. Malaviya, M.P. for any purpose whatsoever. But for the appellant’s approaching Shri R.K. Malaviya and his request for help, Shri R.K. Malaviya would have never written the letter quoted above to the then Minister of State for Law, Justice and Company Affairs. On this ground also his writ petition was liable to be dismissed. In view of the above, we are satisfied that the recommendation made by the High Court to the Government for compulsory retirement of the appellant and the order of compulsory retirement issued by the Government do not suffer from any legal flaw. The order of compulsory retirement is neither arbitrary nor irrational justifying any interference in judicial review. The impugned judgment of the Division Bench is not legally unsustainable warranting any interference by this Court in an appeal under Article 136 of the Constitution of India. 44. Civil Appeal is, accordingly, dismissed with no order as to costs.
REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 5790 OF 2012 (Arising out of SLP(C) No. 1884 of 2007) R.C. Chandel …… Appellant Vs. High Court of M.P. & Anr. …… Respondents JUDGMENT R.M. LODHA, J. Leave granted. 2. On 13.09.2004, the appellant, who was working on the … Continue reading
That if the Seller applies for sale permission within the time stipulated in clause 8 above, but does not get it within 6 months, the Seller may determine this Agreement and the Seller shall refund to the Purchaser the earnest money received by him without any damages or interest, within a period of 15 days from the date of determination of the Agreement.”This, however, brings us face to face with a rather difficult situation having regard to the fact that the Agreement to Sell was executed 34 years ago on 8th September, 1978, in respect of the suit property. We cannot shut our eyes to the fact that during this period the price of real estate has escalated sharply. In addition to the above, the Appellant has not suffered any material loss, since only the earnest money of Rs.50,000/- had been paid by him to the Respondents and the balance consideration was yet to be paid when the agreement came to be terminated. Even the said sum of Rs.50,000/- was returned to the Appellant immediately upon termination of the Agreement and the said amount was duly accepted by the Appellant, though by recording his objections subsequently. The Appellant, therefore, has not suffered any monetary loss, and, on the other hand, the value of the property must have sky-rocketed during the period between the execution of the Agreement till date. In fact, that is why there is no prayer in the alternative for return of any sums advanced, which is one of the usual prayers in suits for specific performance.
|REPORTABLE | IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.5787 OF 2012 (Arising out of SLP(C)No.13490 of 2009) 1 Rattan Lal (since deceased) 2 Through His Legal Representatives … Appellant Vs. 2 S.N. Bhalla & Anr. … Respondents J U D G M E N … Continue reading
the claim has been repudiated due to non-disclosure of material facts. As per Section 45 of the Insurance Act, a period of 2 years is effectively provided to the insurance company to verify the facts as mentioned in the proposal form and in case a claim is raised within the said period of 2 years as contemplated under section 45 the insurance company is entitled to reject the claim under a policy on the ground that any information as contained in the proposal form is factually incorrect, irrespective of whether the same is connected with the cause of death or otherwise.” – the assured had misrepresented facts and had deliberately concealed the material fact that he was suffering from IDDM with RLF with lymphadenitis. If this was the case, we fail to understand what prevented the revision petitioner/OP from submitting this report before the District Forum and from examining the investigator as well as the expert, whose assessment it has claimed to have relied upon. 11. A similar matter had come up for consideration in Civil Appeal No.7437 of 2011 decided by Hon’ble Supreme Court of India on 26.8.2011 (P. Venkat Naidu Branch Manager, LIC Kurnool and Anr). A Life Insurance Police of Rs.10 lakhs was taken by the insured with effect from 28.4.2002. In the proposal form for insurance, the insured had not indicated whether during the last five years he had consulted any medical practitioner for any ailment. The insured died on 19.12.2003 due to cardio respiratory failure. The claim under the policy was contested by the insurance company on the ground that the insured had suppressed facts relating to his illness at the time of taking the policy. 12. The Supreme Court has held that “Since the respondents had come out with the case that the deceased did not disclose correct facts relating to his illness, it was for them to produce cogent evidence to prove the allegation.” The respondents were found to have failed to produce any tangible evidence to prove that the deceased had withheld information about his hospitalization and treatment. Therefore, the claim under the policy was allowed. 13. For the reasons detailed above, we find that revision petition has failed to make out any case against the impugned order. It is consequently dismissed for want of merit. No orders as to costs.
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 982 OF 2011 (Against the order dated 4.2.2011 in Appeal No.76 of 2011 of the State Commission, Rajasthan) 1. Bajaj Allianz Life Insurance Co. Ltd. Through Nivedita Chakravorty State Operations Manager and Authorized Signatory Having its office at 2nd Floor, Narbda Bhawan, Station Road, Above Bank of Baroda Churu, … Continue reading
406. Punishment for criminal breach of trust.- Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both. 409. Criminal breach of trust by public servant, or by banker, merchant or agent.- Whoever, being in any manner entrusted with property, or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney or agent, commits criminal breach of trust in respect of that property, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.” Section 409 enables the Court to award imprisonment for life or imprisonment up to ten years alongwith fine. Considering the fact that the appellant was awarded imprisonment for 6 months alongwith a fine of Rs. 1,000/- only, we feel that the same is not excessive. On the other hand, we are of the view that persons dealing with the property of the Government and entrusted with the task of distribution under FFWS, it is but proper on their part to maintain true accounts, handover coupons to the Mandal Revenue Office and to execute the same fully and without any lapse. Such recourse has not been followed by the appellant. The courts cannot take lenient view in awarding sentence on the ground of sympathy or delay, particularly, if it relates to distribution of essential commodities under any Scheme of the Government intended to benefit the public at large. Accordingly, while rejecting the request of the learned senior counsel for the appellant, we hold that there is no ground for reduction of sentence. 12) Under these circumstances, we find no merit in the appeal. Consequently, the same is dismissed. In view of the dismissal of the appeal, the order granting exemption from surrender is revoked and the appellant has to surrender within four weeks and serve out the remaining period of sentence.
REPORTABLE IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION 1 2 CRIMINAL APPEAL NO. 1159 OF 2012 3 (Arising out of SLP (Crl.) No. 7526 of 2011 Sadhupati Nageswara Rao …. Appellant(s) Versus State of Andhra Pradesh …. Respondent(s) J U D G M E N T P. Sathasivam, J. 1) … Continue reading
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