Malicious Prosecution |
By : BAPOO M. MALCOLM on 24 November 2014   Print this |
 A case for prosecuting the prosecutors Regular readers of Moneylife, and others, will recall an article called "Who will guard the Guardians?" ….."Quis custodiet ipsos custodes".In that piece we had mentioned that a Public Prosecutor, though convinced that the complaint filed against our clients was false, was too scared to stop the prosecution. He felt that an enquiry would be instituted against him. The good news is that our clients, half a dozen, were acquitted some time back. But they had to attend court 33 times, over six years. One of them was a double law graduate and all of them stood firm against bribes. The complanant, worried about being exposed in court, simply did not turn up for cross-examination. But does their acquittal solve the problem? After all, the accused ranged in ages from 60 to 85 years.Is there any recourse? Yes, there is. It lies in prosecuting the complainant for malicious prosecution. Did the clients opt for that? No. People are wary of courts. Each of us expects the other to fight for him. We, as a people, want to have our rights handed to us on a platter. And protected by the sweat of others. YOU BE THE JUDGE. One may well ask why we did not ask our clients to take the matter forward. The truth is, as advocates, we cannot ask people to file cases, even pro bono. But the surprising thing is that it's not just the layman who shies away. Even Supreme Court judges act the same. Today's paper carries a lead article featuring a retired judge's complaint, about a corrupt judge, falling on deaf ears. While no names are mentioned and a lot of it is hearsay, one fails to understand why the complaining judge himself did not act more decisively when on the bench? The author is a very small man but faced with such a situation, his choice would have been to resign. It's no great shakes to leave the bench. To our mind it was a dereliction of duty. But there are other cases too, where judges show more spunk. A common tactic to avoid an unfavourable order is to ask for another judge to be assigned to the case. It's not easy. Cogent reasons need to be given. More often than not, if the judge has an interest in the case, however minor, he recuses himself. But what of outright accusations? Recently, if one read between the lines, one of the parties, obviously fearing the worst, wanted a change of scene. Rather stupidly, it accused the judge of corruption, hoping that the judge would give up the matter. This judge, fortunately, was made of sterner stuff and refused to budge asking the complainant to seek relief further up the hierarchy. The case would, the judge said, go on till orders came from above. The complainant had to apologise;we hope it is not the end of the matter. At Moneylife's seminars, we have often stressed on the fact that too many cases are filed by the crooked. They seek the court's backing to their nefarious activities. They clog the system with frivolous litigation. They have the money to spend. The other side is dragged to court and peeled alive of all he has. Even the shirt on his back. Can nothing be done? As stated above the solution lies in a counter attack for either frivolous litigation or malicious prosecution. The process requires the court's permission but it can be procured. Once perpetrators realise that filing false complaints can lead them into hot waters, very hot waters with hefty fines, the pressures on the courts will drop. And justice will be delivered faster. Courtesy: Moneylife |
What is the colour of my money - Black or White? |
| By : Guest on 24 November 2014 Print this |
 Arjuna (Fictional Character): Krishna, why is there such a lot of confusion over on the colour of money? Supreme Court, Government and citizens are all busy in the discussion of the law pertaining to Black money. Let's discuss its different aspects. Krishna (Fictional Character): Arjuna, Money has no colour. But it gets its colour depending on whose hands it is in. It can be said that a person collecting money according to the law and legitimate means has white money and the person who doesn't follow has black money. Black money has no definition in any Act. In India out of the 125 Crore people only approx. 3 to 4 crores of people are taxpayers. That's why the matter of black money has become so complicated. But a person's greed makes it never ending. There are many laws to deal with this but the important one is Income Tax. It is necessary to follow the provisions of Income tax to have control over black money. More information regarding this can be obtained from "White paper on Black Money" published in May 2012 by Government. Arjuna: Krishna, from where does this black money arise? Krishna: Arjuna, Black Money can be generated by mainly two ways 1) Money earned through illegitimate activities i.e. by crime, drug trade, corruption, terrorism etc. 2) And by failing to pay the Income tax and other statutory dues e.g. Transaction kept out of the books of accounts, not maintaining books of accounts, manipulating the books which means to paying less taxes, sales being shown at less values, expenses being shown at higher values by creating bogus bills etc. creates black money. Black money can be generated simply by evading taxes. E.g. Foreign bank accounts in tax heaven countries, unexplained wealth, etc. Generally Black money is used in following ways: 1) Land and Real estate transaction 2) Bullion and jewelry transaction 3) Cash transaction. Presently many people are dependent on farming and at many places there are still no banks. This leads to increase in cash transactions and also ends up contributing to the generation of Black money. And also black money is being used in businesses by using a lot of tricks. Arjuna: Krishna, What efforts does the government take to reduce this black money? Krishna: Arjuna, Government is always taking efforts to reduce black money. Recently the government has acquired the information of Swiss bank Accounts, etc. Special Investigative Team has been incorporated on this matter. This is a very big step. And government is also taking efforts by amending the Income Tax, Excise, Banking, Companies Act, Double Tax Avoidance Agreement (DTAA). E.g. Income Tax department has increased enquires, checking, survey and raids. Limitations have been put together on cash transactions; restrictions are levied on foreign transaction and computerized reporting and compulsion of PAN Etc. has been made. Still lot needs to be done to reduce it; intention of officers and citizens of India is at stake. Arjuna: Krishna, under which provision of income tax is Black money liable to taxation? Krishna: Arjuna, in income tax, the unexplained income is taxable directly @ 30% in the following manner: 1) Where a sum is found credited in the books maintained by an assessee for any previous year and the assessee offers no explanation about the nature and source thereof, then the said amount is taxable in Income Tax under section 68. 2) If the assessee has made any investments which are not recorded in the books of accounts and the assessee offers no explanation about the nature and source thereof, then the said amount of Investment is taxable in Income tax under section 69. 3) When in any financial year assessee is found to be the owner of any money, bullion, jewellery, or any valuable articles which is not recorded in the books of accounts and the assessee offers no explanation about the nature and source thereof, then the said amount is taxable in Income tax under section 69A. 4) And according to section 69B if any investment made by assessee is recorded at value less than the amount expended over it then the excess may be deemed to be the income of the assessee for that financial year. If the assessee has made any expenditure and he offers no explanation about the expenditure made then the amount covered by such expenditure shall be deemed to be the income of the assessee. Also there are other provisions according to which Income tax, Interest and penalty can be collected. Arjuna: Krishna, who has black money? Krishna: Arjuna, this is the most difficult question. Every person may have Black money; it may be more or less on a given time. E.g. if salaried people have paid tax on total income but invested the income in fixed deposit and hasn't shown the interest on such fixed deposit it; similarly if funds are provided by company for travel and bills worth more the expenses are given then the remaining amount can be termed black money, it applies for all businessmen's in case of business expenditures. Also the claim of medical allowance and house rent allowance, etc. In India 75% of the population is engaged in farming business which is tax free but what about the income generated through non agri business like dairy farming, poultry, bank interest on FDR made out of agricultural income? There are so many big and small examples. It is easy to blame big foreigners, politicians, businessmen's but everyone should check their own pockets and ponder over what is the color of their money? In these transactions of black money, a person whose black money gets exposed becomes bad man whereas the person whose black money is still hidden is deemed to be good man. This is a very dangerous thing for the financial growth of the country. Arjuna: Krishna, what should one learn from the colour of money? Krishna: Arjuna, in this generation, a rich person rich is considered honorable. Earning money by any means possible has become the utmost intention. The nature of every person affects their deeds. Just like water has no colour, similarly money also has no colour. It gets its colour based on how you use it. If one behaves according to the law, you won't be tarnished by any colour and live a spotless life. But in the hassles of earning money, lives of many people end up colourless! Dear CACLUBINDIA lovers your views on this topic is very important please share. By: CA Umesh Sharma Originally shared in CAclubindia.com |
Arvind Datar and breach of promises |
| By : BAPOO M. MALCOLM on 27 November 2014 Print this |
| ArvindDatar and Moneylife had a wonderful session at the Yacht Club some time back. It was preceded by the launch of Kanga and Palkhiwalla's latest edition of the Income Tax tome, Datar editing. Datar started his talk on Corporate Frauds by explaining to the audience what the word 'fraud' meant. He said that in terms of a contract, it involved deceit, concealment, an intention not to fulfil an obligation, even silence when disclosure is necessary. This led us to apply these standards to love and marriage. The papers are filled with stories of "rape" as alleged by spurned lovers. Women, thinking that the man is serious enough to culminate their relationship in marriage, have allowed one thing to lead to another. When the truth finally dawns on them, naturally all hell breaks loose. Congrave, in 'The Mourning Bride', used prophetic words when he wrote that"Hell hath no fury like a woman scorned". We bring to you some famous cases of breach of promise and ask you to decide. YOU BE THE JUDGE. A) A man courts a woman for a long time. He asks for her hand in marriage, Mom-in-law being present. The very 'shy' miss demurs. In other words, she murmurs not a bit. Dead silence. B) A man sends a lady a newspaper cutting with the words, inscribed on it, "READ IT". The article is an amorous one. The sender of the clipping, however, later refused to marry the girl, denying any amorous intent. C) "Call me uncle", said the gent to the boy, a nephew of a certain maiden. Was this a proposal of marriage? Could it even be considered one? D) Some time back this page had carried a story of how a dear old widow was tricked into a scheme of 'marrying someone rich'. But what about a widower? One such bereaved ex-husband got a lady to pay attention to him. So did he manage with another. Number two was obviously the better filly in the stakes. But the man was devious. He mentioned to the prior love that people "would talk", the whole episode being so close to his wife's death. He prepared a draft note and the woman copied it, affixed her signature and was relieved to "find such a gentleman". The note said that the two were, in effect, meeting as "friends", and that there was no more to it. When she realised that the widower was now remarried, she sued. YOU BE THE JUDGE. On the four cases above. How would you decide in each case? For the woman or the man? In all the four cases, the courts held for the woman. It decided that there was a distinct breach of promise. It gave new meaning to the saying, 'led up the garden path'. Admittedly the cases are old ones and social mores were different. But thinking of what Datar said of corporate promises, one has to recognise that non-disclosure, even of eventual intentions, is an act worthy of punishment. But why is that so? The law believes, very, very sadly, that people speak the truth. It believes that a person's word is his bond. And so are his actions. Behaving in a way that induces another to believe a certain thing, and that which is within the knowledge of the person so behaving not to be true, is sufficient to have a court find a breach. It is based on the belief that all persons need to trust their fellowmen. And women. To assume otherwise will be impossible in running a civilised society. To be sure, men reading this must be thinking of the day when they were jilted by their girlfriends. After all the money spent on the movies,and restaurants, and presents! Technically speaking, a woman who drops a man, after letting him believe of her "true" interest, can and should be sued. But then, men are chivalrous and damsels are so easily hurt. Or at least that is what we were taught to believe. Anyway, do NOT post page three reports. And if you do, write instead, 'WITHOUT PREJUDICE'. |
How do you manage corporate credit cards?
We always tend to be a little casual with our business or corporate credit cards for the simple reason that the company tends to reimburse or pay the credit card bills. However, at the end of the month when you send the statement to your company's executive most of the times you are left scratching your heads. The simple reason is the expenses seem to overshoot the bills you have. This is because not that you have used it for your personal expense but you just did not figure out a way to keep track of the expense or you did not practice due diligence while swiping the card.
Maintain the balance
One of the reasons most small- to mid-sized business struggle is simply because they do not know how to manage and take care of their daily transactions. They are so focussed on the business that they forget that the money that runs the business also requires utmost importance. To be a good business, you need to make sure that your business has good credit history not only for future financing, but for getting loans or getting investment as well.
Have multiple accounts
It is always advisable to share the burden especially with respect to managing the expenses. It would be a good idea to have multiple cards and entrust the respective employee to manage their expenses. Let the purchase manager look after his expense while the logistics bills their own expenses etc. However, make sure you have a way of tracking these expenses in a phased and timely manner. Make sure that you have also given strict and clear instructions on the responsibility and the using of the card. This way you have will have some of the burden off your shoulders and help you manage the credit card easily.
Make sure you have the right credit limit
It is not always possible to know the right credit limit right away but at least after up and running your business, get in touch with your bank and make sure you have either increased or decreased the limit based on your business requirement. This shows that you exactly know the big picture though it seems very simple.
Avoid the unnecessary
There are always small but unnecessary expenses that crop up like the door handle or the toilet blockage or the water leak in the office. Be serious about your business and use it for strictly business purpose and not business related purposes. This helps you to focus exactly on business transaction and not pile up your expenses in the long run.
Enjoy the Rewards
Unlike personal cards, corporate credit cards are high on transactions, penalties and high on rewards as well. If you are aware of the rewards in your corporate credit cards it only shows that the expertise you have on using your card to the maximum advantage and definitely the motivation as well in exchange for the rewards. Just make sure you do not go overboard with it.
Take the risk only if it is worth it
Business at some stage or the other is all about taking the big plunge but however with a lot of confidence and preparedness than just plain adrenaline and Déjà vu. So be 100 percent sure if it is worth swiping the entire amount of your corporate credit card and only if you are prepared to face the backlash or have a plan B
Input Service credit on Inputs lost during manufacturing
Inputs lost during manufacturing does not amount to receipt of Inputs in short quantity and accordingly whatever tax has been paid by Assessee on Inward Transportation service is entitled for Input Service credit
Mahanagar Gas Ltd. Vs. Commissioner of Central Excise, Mumbai-V [014-TIOL-2341-CESTAT-MUM]
Mahanagar Gas Ltd. (the Appellant) was procuring gas from Gas Authority of India Ltd. (GAIL) through pipelines and the same was supplied through petrol pumps or through pipelines to the consumers.
The Appellant was availing Cenvat credit on Inputs and on Inward Transportation service and was paying duty on their final product.
At the end of the year, the Appellant maintained a Balance Sheet and an account for Measurement Tolerance in their Balance Sheet showing shortage of gas lost during the supply as final product.
The Revenue contended that since the shortage has occurred of Inputs, consequently the Input Service credit on transportation of such shortage Inputs stands denied to the Appellant. Accordingly, proceedings were initiated and demand was confirmed against the Appellant.
Being aggrieved, the Appellant preferred an appeal before the Hon'ble CESTAT, Mumbai and submitted that Cenvat credit on Inputs have not been denied on account of shortages but Input Service credit on transportation of these inputs have been denied by the Department which is not permissible. Moreover, the Measurement Tolerance has occurred on account of receipt of Inputs and supply of final products. In these circumstances, whatever shortage may occur that may be lost during the process of manufacturing. Therefore, Cenvat credit cannot be denied.
The Hon'ble CESTAT, Mumbai held that when there is no dispute regarding receipt of Inputs, therefore, whatever transportation has been paid by the
Appellant on Inward Transportation service are entitled for Input Service credit. It was further held that the Measurement Tolerance is on account of receipt of Inputs and supply of final products and in these terms, it cannot be said that the Appellant have received the Inputs in short quantity. Therefore, the Appellant is rightly entitled for full Cenvat credit of Service tax paid on Inward Transportation service.
Show Cause Notice after retrospective amendment is not sustainable
When at the time of retrospective amendment, no proceedings were pending, Show Cause Notice issued for recovery of Service tax after retrospective amendment is not sustainable
PSL Ltd. Vs. Commissioner of Central Excise, Daman [2014 (11) TMI 84 – CESTAT Ahmedabad]
In the instant case, demand of Service tax is raised against PSL Ltd. (the Appellant) as recipient of Goods Transport Agency (GTA) services for the period from November 16, 1997 to June 2, 1998, by issuing a Show Cause Notice dated July 31, 2007 i.e. after retrospective amendment in the relevant provisions. Later, the Adjudicating Authority confirmed the demand against the Appellant along with imposition of penalties.
The Appellant relying upon the following decisions of the Hon'ble High Court:
- CCE Vs. Hiren Aluminium Ltd. [2010-TIOL-682-High Court-AHM-ST]
- CCE Vs. Eimco Elecon Ltd. [2010-TIOL-665-AHM-ST]
- Precot Mills Ltd.Vs. UOI [2011 (24) S.T.R. 283 (Ker.)]
- CCE Vs. Hindalco Industries Ltd. [2014 (33) S.T.R. 366 (All.)]
Filed an appeal before the Hon'ble CESTAT, Ahmedabad and contended that if a Show Cause Notice is issued for recovery of Service tax after the retrospective amendment, the same is not sustainable.
The Hon'ble CESTAT, Ahmedabad also relied upon the decisions of the Hon'ble High Court in the stated cases and held that when at the time of retrospective amendment, no proceedings were pending against the Appellant in respect of Service tax, demand of Service tax along with Penalty raised by issuing a Show Cause Notice after the retrospective amendment is not sustainable.
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Show Cause Notice after retrospective amendment is not s... When at the time of retrospective amendment, no proceedings were pending, Show Cause Notice issued for recovery of Service tax after retrospective am... | |||||||
Kirit Dahyabhai Patel Expln 5 Sec 271 (1)(c) decided by Guj High Court in favour of assessee by reversing ITAT Third Member order.copy of order will be issued by High Court after a week's time. I will send you a copy as soon as it is made available. The Court is working
on fast track basis and therefore, all orders are not released on the
same date though verdict is annouced in open court.
on fast track basis and therefore, all orders are not released on the
same date though verdict is annouced in open court.
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