Saturday, October 11, 2014



BAR & BENCH (a  quick peep, out of sheer curiosity)

< Read Comment by MEHER, et al  (For a bird's eye view, even if not believed to be from a 'legal eagle')

Dec 19

 Passage of crucial Bills uncertain

Sporadic Reaction

"....also issued whips to their members to be present at all times in the House to ensure that no Bills were passed in their absence, an Opposition MP told The Hindu."

This is a certainly a  mind numbing stance , not befitting a kicking, so- claimed-to-be-a -major democracy  ; stopping  short of a mature democracy , does not speak well of the calibre of the mindsets SITTING IN the Opposition. On the contrary,  in a way, goes to betray the confidence and faith placed on them by that section of the electorate, of THE PEOPLE  whom they are supposed to represent positively and for the national interest. Any  hope of future for good governance even in the farthest  sight ?

Dec 5

Supreme Industries Ltd vs. ACIT (Bombay High Court) on!

Impromptu (personal view)

A well reasoned judgment, more founded, rightly so to fit into our modern times, on sound principles of natural justice, as opposed to strict ‘legality’ or ‘THE LETTER’ but de hors “THE SPIRIT” of the law. May be, this is an instance in which the judiciary has chosen to be aided by the not-so-familiar Rule of “Updating Construction”
In a manner of speaking, the long standing soulful lamentations of a law legend, in the person of N A Palkhivala, are reflected in reported judgment.
To quote : –
“ The bewildering complexity of tax laws is coupled with the hyper-technical spirit in which the laws are being administered. The words, “the letter killeth” should be inscribed over the portals of every income-tax officer”.
To Re quote:
(Source: Nani’s published speeches/ articles)

      No Fear Shakespeare: The Merchant of Venice: Act 4 ...


Taxmann Daily
A Tax & Corporate Laws Daily

I-T returns and info provided to tax authorities are exempt from disclosure under RTI Act
Whether the Income-tax returns and other information provided to Income Tax Authorities by a taxpayer are personal and confidential in nature and, therefore, cannot be placed in public domain through RTI Act?
The High Court held as under-
1) Income-tax returns and other information provided to Income Tax Authorities by individuals and unincorporated assessees are confidential in nature and cannot be placed in public domain, as it would be exempt under section 8(1)(j) of Right to Information Act, 2005 (RTI Act).
2) In cases of widely held companies, most information relating to their income and expenditure would be in public domain and, therefore, it is only confidential information that would be exempt from disclosure under section 8(1)(d) of RTI Act.
3) Information furnished by an assessee in income-tax return can be disclosed only where it is necessary thing to do so in public interest and where such interest outweighs in importance any possible harm or injury to assessee or any other third party. However, information furnished by corporate assessees that neither relates to another party nor is exempt under section 8(1)(d) RTI Act can be disclosed - Naresh Trehan v. Rakesh Kumar Gupta (2014) 51 548 (Delhi)

 SC: 'BIFR' is sole authority to decide whether a sick company can be moved out of its jurisdiction

[2014] 51 368 (SC)
Ghanshyam Sarda
Shiv Shankar Trading Co.
ANIL R. DAVE AND Uday Umesh Lalit, JJ.
Civil Appeal Nos. 10221 to 10226 of 2014
Contempt Pet. (C) Nos. 338 and 375 of 2014
NOVEMBER  13, 2014 

< .......The aspects of revival of such company being completely within its exclusive domain, it is the BIFR alone, which can determine the issue whether such company now stands revived or not. The jurisdiction of the civil court in respect of these matters stands completely excluded.

29. Insofar as the recovery of money is concerned, the matter is completely covered by Section 22(1) of the Act. The language employed in Section 22(1) of the Act refers to the entirety of the period beginning from the inquiry under Section 16 till the implementation of sanctioned scheme for revival. Section 22(1) bars any suit for recovery of money or for the enforcement of any security against the industrial company without the express consent of the Board....>

 Cross Refer (to reconcile)>


Posted: 23 Nov 2014 04:08 AM PST
[The following post is contributed by Prachi Narayan of Vinod Kothari & Company. She can be contacted at]

.... KSL Industries Ltd vs. Arihant Threads Ltd on October 27, 2014 finally settled the position of law over the vexed issue of precedence of two special enactments, the Sick Industrial Companies (Special Provisions) Act, 1985 (“SICA”) and the Recovery of Debt Due to Banks & Financial Institutions Act, 1993 (“RDDBFI”).

< Section 22 (1) provides that “Where in respect of an industrial company, an inquiry under section 16 is pending or any scheme referred to under section 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal under section 25 relating to an industrial company is pending, then, notwithstanding, anything contained in the Companies Act, 1956 (1 of 1956) or any other law or the memorandum and articles of association of the industrial company or any other instrument having effect under the said Act or other law, no proceedings for the winding up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof and no suit for the recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loans or advance granted to the industrial company shall lie or be proceeded with further, except with the consent of the Board or, as the case may be, the Appellate Authority.” >


Calling it a tax on foreign direct investment, Shell India moved the Bombay High Court in April last year. The court rejected the tax department’s argument that the Shell case was distinguishable from Vodafone’s case, which won a similar reprieve in October.

“The Shell India case is significant. It follows the earlier Vodafone judgment — the principle being that issuance of shares by an Indian company to its foreign parent is not exigible to transfer-pricing provisions, as there is no income arising therefrom,” said Mukesh Butani, managing partner of BMR Legal, which represented Shell India.

The Bombay High Court judges, M S Sanklecha and S C Gupte, set aside the tax department’s order over jurisdiction and did not get into the valuation of the shares.

A unique blend of judicial virtues
Justice Krishna Iyer, who enters his hundredth year today, took the Supreme Court in a new direction while evolving radical principles

Also Read:


Madras Bar Association vs. UOI (Supreme Court – Constitution Bench)

 <> It is worth recalling and drawing keen attention to the following matters given publicity long ago:

So far as is known, there has been no further development , notably significant  at that, to move forward determinately on the lines then envisaged .

May be, the new law minister will do well to give the topmost priority that deserves, in the interests of the legal fraternity, more importantly of the tax 'clients' and the Revenue as well.

The referred matter, no need to specially add, has assumed greater priority than hitherto, rather the utmost urgency. in the aftermath of the SC 5 member-bench verdict in re. 

>Lawyers oppose draft bill on Legal Practitioners Act - The ... › CitiesVijayawada


Revisiting penalty clauses in contract

Penalty, as a legal concept, more so according to well settled position in law in India, connotes, -

Ø  “A punitive measure that the law imposes for the performance of an act that is proscribed, or for the failure to perform a required act.

Ø  Penalty is a comprehensive term with many different meanings. It entails the concept of punishment—either corporal or pecuniary, civil or criminal—although its meaning is usually confined to pecuniary punishment. The law can impose a penalty, and a private contract can provide for its assessment. Pecuniary penalties are frequently negotiated in construction contracts, in the event that the project is not completed by the specified date.” (PER FREE DICTIONARY)

Back home, that such is the long accepted proposition may be found categorically endorsed by the judiciary in, eminently so, not only tax cases, but also in civil or common law disputes.

With the foregoing in the backdrop, the write-up discussing the court cases decided under the  foreign law, one strongly feels, ought not to be considered to even remotely suggest to be taken as a guide for domestic purposes.


Monthly (June 2014) + Consolidated (Jan to June 2014) Digest Of Imp Case Laws


<(3) In case of taxing statutes, in the absence of the provision by itself being susceptible to two or more meanings, it is not permissible to forgo the strict rules of interpretation while construing it. It was not open to the DRP to seek aid of the supposed intent of the Legislature to give a wider meaning to the word ‘Income';>

< 9) W.e.f. 1 April 2013, the definition of income u/s 2(24)(xvi) includes within its scope the provisions of s. 56(2) (vii-b) of the Act. This indicates the intent of the Parliament to tax issue of shares to a resident, when the issue price is above its fair market value. In the instant case, the Revenue’s case is that the issue price of equity share is below the fair market value of the shares issued to a non-resident. Thus Parliament has consciously not brought to tax amounts received from a non-resident for issue of shares, as it would discourage capital inflow from abroad.>


NB: Each one of the grounds on which the court  has concluded in asses see's favor calls for a critical analysis; albeit, even if done so, one's intuitive / gut feeling is,  the conclusion reached could  possibly be no different but might be in assessee's favor..

Consider : Real x Unreal 'income' - Is not the very concept of unreal income an oxymoron to the legislation on TR

To be precise, at the grassroots of TRP, the philosophy is to tax 'unreal income'

The TRP legislation has been conceived of and thrust upon, wholly on the excuse of global practice, knowing fully well that it it is fundamentally an unscientific theory, making a mockery of the constitutional principle of taxing 'income', only if it has the basic characteristics  ; never taxing a 'no income', in the sense that never accrued or arose or received to/by taxpayer.
is there any taker (s) willing to embark on such a study ?!

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