Legal Reference Library

In Business Strategy Group v. ACIT, the ITAT, Delhi held that the loan obtained from a Company wherein the partners of the Assessee-Firm are the shareholders cannot be termed as ‘deemed dividend’ of the Firm and therefore, it is not taxable in the hands of the Firm under the provisions of Income Tax Act. Assessee-Firm is engaged in the business of rendering Management Consultancy Services. The partners of the Firm are equal share holders in a Private Ltd Company, i.e, M/s TMI Associates Pvt. Ltd. The AO found that the assessee firm had shown a loan of Rs. 3 lakhs from M/s TMI Associates Pvt. Ltd and treated the same as the deemed dividend which is taxable in the hands of the assessee-Firm. Before the Trbunal, the assessee contended that it is not a share holder in the said Company and Section 2(22)(e) has no application to the amounts received from a Company by the non-shareholder. The bench noted the decision in Assistant Commissioner Of Income Tax Vs. Bhaumik Colour (P) Ltd wherein i...

The Gujarat High Court has held that when a complaint under Section 138 Negotiable Instruments Act, does not name the Partnership firm as accused, but only the partners, Section 319 of the Code of Criminal Procedure cannot be invoked to implead the Partnership firm as the accused, to save such a serious infirmity in the complaint. Justice J.B. Pardiwala observed that when a complaint under Section 138 of the Act has the initial defect in its sustainability, such a defect cannot be cured by amending the proceedings by virtue of an application under Section 319 of the Cr. P.C. Background In a Section 138 complaint, the complainant named six individuals as accused being partners of a partnership firm running in the name of ‘Swastik Construction’, but the partnership firm, as a legal entity or juristic person, was not arraigned as an accused. The Chief Judicial Magistrate took cognizance upon the said complaint and ordered issue of process against all the six partners named as accused in t...

Arising out of SLP (Crl.) No. 6134-6135 of 2005] WITH CRIMINAL APPEAL NO. 951 OF 2006 [Arising out of SLP (Crl.) No. 6252 of 2005] S.B. SINHA, J : Sabitha Ramamurthy & Anr vs R.B.S. Channabasavaradhya on 13 September, 2006 Section 138 of the Negotiable Instruments Act provides that where a cheque drawn by a person is returned by the bank unpaid on the grounds specified therein, the person who had drawn the said cheque shall be deemed to have committed an offence thereunder. Section 139 provides for a presumption in favour of a holder of a negotiable instrument. Section 141 of the Act provides for offences by a company. Sub-section (1) of Section 141 reads as under: "141. Offences by companies.(1) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be...

2014 STPL(Web) 1503 DELHI [2014 (2) DCR 470] DELHI HIGH COURT (HON'BLE MR. V. K. JAIN, J.) VIJAY POWER GENERATORS LTD. Petitioner VERSUS SUMIT SETH Respondent Crl. A. No. 1432, 1433, 1434, 1435 and 1436 of 2013-Decided on 9-5-2014 (A) Negotiable Instruments Act, 1881—Section 139, 118(a) - Acquittal Set aside - Evidence - Appeal against acquittal in complaint of dishonour of cheque - Acquittal on ground that cheque issued for advance payment - Complainant produced accounts showing sale and payment due - Sales tax forms issued by accused for purchase of goods - No rebuttal of evidence by complainant - Nor any evidence in favour of defence pleas - Presumption of consideration with complainant - Acquittal set aside - Conviction. [Para 10, 11, 12 & 15] (B) Negotiable Instruments Act, 1881—Section 138 - Advance Payment - Dishonour of cheque - When offence not made out - Liability - Held: For the purpose of Section 138 of the Act, the drawl of the cheque should be in ...