Thus, we are of the view that although the cheque might have been duly obtained from its lawful owner i.e. the respondent-accused, it was used for unlawful reason as it appears to have been submitted for encashment on a date when it was not meant to be presented as in that event the respondent would have had no reason to ask for a loan from the complainant if he had the capacity to discharge the loan amount on the date when the cheque had been issued. In any event, it leaves the complainant’s case in the realm of grave doubt on which the case of conviction and sentence cannot be sustained.
Karnataka High Court in CIT v. Ranka & Ranka [2012] 206 Taxman 322 wherein the Division Bench has considered Instruction No.3 and the National Litigation, Policy, had held as under: (i) Instruction No.3/11 is also applicable to the pending appeals. (ii) As the tax effect in the instant case is less than Rs.10 lakhs, the appeal stands dismissed on the ground of monetary limit, without expressing any opinion on the merits of the claim, making it clear that the Department is at liberty to proceed against the assessee in future, if there any amount due from the assessee, on similar issue and if it is above the monetary limit prescribed.
In our considered view, in the light of the relationship between the assessee and her father-in-law, the Tribunal has rightly held that the genuineness of the transaction is not disputed, in which, the amount has been paid by the father-in-law for purchase of property and the source had also been disclosed during the assessment proceedings. If there was a genuine and bonafide transaction and the tax payer could not get a loan or deposit by account payee cheque or demand draft for some bona fide reason, the authority vested with the power to impose penalty has a discretion not to levy penalty.
The original assessment was made on 30-11-2006 under section 143(3). The Finance Act, 2008 inserted clause (h) of Explanation 1 to section 115JB retrospectively from 1-4-2001. The effect of this clause was to increase the book profit by the amount of deferred tax and the provision therefor. It is not in dispute that one of the reasons to believe as recorded by the respondent is that in view of the retrospective amendment, the deferred tax liability, for which a provision had been made in the accounts, was to be added back to the book profit.
In the present case, it was repeatedly emphasized that the assessee’s dividend income was confined to what it received from investment made in a sister concern, and that only one dividend warrant was received. These facts, in the opinion of this court, were material, and had been given weightage by the Tribunal in its impugned order. There is no dispute that the investment to the sister concern, was not questioned; even the Commissioner has not sought to undermine this aspect.
As regards the year of allowability, the claim has to be allowed on the basis of restatement of the liability on the balance-sheet date as held by the hon’ble Supreme Court in the case of Woodward Governor India (P.) Ltd. (supra). Thus the claim of the assessee is allowable. In case there is gain in a year and the assessee has not offered it to tax, the Revenue is free to take action under law. In these years, admittedly there is loss which is allowable as deduction.
The machinery which was purchased by the assessee in the course of expansion of new Project was installed in the year 1996-97 relevant to the Asst. Year 1997-98. There is nothing on record to suggest that the assessee had put the machinery to use during the Asst. Year 1998-99. It appears that the assessee had claimed 100% depreciation as the project was completely abandoned later in the year 1999. Since the machinery was never put to use by the assessee no depreciation is allowable for the Asst. Year 1998-99.
In the instant case, the interest is payable in respect of amounts deposited by financial institutions with the assessee by subscribing to the bonds issued by the assessee. The interest is payable in respect of certain deposits received by the assessee and not in respect of any loans, advances or borrowings made by the assessee. For the same reason, clause (e) of section 43B relating to loans and advances from a scheduled bank is also not applicable in the instant case.
By no stretch of imagination, Lakme can be considered as dominant either in the geographical market of Delhi or of Gurgaon. There are innumerable branded and non-branded saloons exclusively for women in Delhi alone looking at the population of Delhi being 1.26 crore and the same is the situation with regard to the number of exclusive saloons for women within district Gurgaon which covers a large area within it.In view of the presence of such a large number of beauty saloons exclusively for women in these areas having 7 saloons or so would not give a dominant status to Lakme under any circumstance. Thus, the question of abuse of dominance by Lakme would not arise.
