Supreme Court’s decision on bad debts to cheer taxpayers

No Need To Prove The Debt Is Bad, Write-Off In Books Is Sufficient, Says Apex Court

In a recent decision in the case of TRF Ltd v/s CIT, the apex court has categorically held that after the amendment to section 36 (1) (vii) effective from April 1, 1989, the position in law is well-settled. When a bad debt occurs, the bad debt account is debited and the customer’s account is credited, thus, closing the account of the customer. In the case of companies, the provision for doubtful debts is deducted from sundry debtors.

This judgement will happily conclude hundreds thousands of appeals pending before various appellate forums all over the country and also relieve the business community from the agony of large disallowances being made in their assessments by incometax officers, on the ground that the deduction for bad debts written off could not be allowed since they had not been proved as bad.

In Gujarat, this issue had become a severe headache for taxpayers after the decision in the case of Dhall Enterprise rendered by the high court in favour of the department.

The business community will heave a sigh of relief with the Supreme Court holding that for securing a deduction for tax purposes, a mere writing off of bad debts in the taxpayer’s books of accounts is sufficient and it is not necessary for the taxpayer to prove that such debt has become actually irrecoverable.

COURTS CAN ORDER CBI PROBE WITHOUT STATES’ CONSENT: APEX COURT

It, however, cautions high courts to use the power in only rare cases

NEW DELHI: The Supreme Court on Wednesday ruled that courts have powers to order CBI probe without the consent of state governments.
In a unanimous verdict, a five-judge Constitution bench headed by Chief Justice K G Balakrishnan said such powers have to be exercised cautiously by the apex court and high courts.

JUDICIARY & JURISDICTION

THE BENCH — which also comprised Justices R V Raveendran, D K Jain, P Sathasivam and J M Panchal — also said that such powers have to be used sparingly in exceptional and extraordinary circumstances in cases having national and international ramifications.
Such powers are vested with the apex court and high courts to ensure protection of fundamental rights under Article 21 of the Constitution, it said. The verdict came on a bunch of petitions filed by West Bengal government and others who contended that CBI could conduct a probe in a state only after getting consent of the concerned government.
The question of whether higher courts are empowered to order a CBI probe was referred to the Constitution bench on March 22, 2007. AGENCIES

Supreme Court slams couple for seeking quick-fix divorce

New Delhi: The Supreme Court has castigated a chartered accountant-doctor couple for seeking to abuse the judicial process to obtain a quick divorce without waiting for the mandatory sixmonth cooling period.


“This case reveals a very sorry state of affairs that the parties being highly qualified have claimed to be higher and above the law and have a vested right to use, misuse and abuse the process of the court,” a bench of Justices Aftab Alam and B S Chauhan said in an order.

The apex court passed the order while dismissing the appeal of

Manish Goel, a chartered accountant, who sought divorce from his estranged doctor wife Rohini Goel (MD, radio diagnosis) even though the matrimonial court had granted the couple six months time for reconcillation.

The bench said it was not inclined to exercise its extraordinary powers to waive the statutory six month period provided under the Hindu Marriages Act Section 13-B(1) and asked the couple to wait till the end of the cooling period provided under the law for reconciliation.

Goel filed a divorce suit in a Gurgaon court in 2008 against his wife who, in turn, filed a complaint of harassment and domestic violence against him and his family members.

The couple, however, arrived at a compromise and thereafter, filed another suit for divorce under “mutual consent” (Section 13-B(1) before a court in Delhi on November 13, 2009.

The couple then filed an application to waive the statutory six months period provided under Section 13-B(1), which was rejected by the matrimonial court which held such waiver can be provided only by the apex court. PTI

‘Rape victim’s statement not gospel’

Don’t Presume Victim Is Telling Ultimate Truth: SC


New Delhi: The Supreme Court has held that in rape cases the testimony of the victim cannot be considered to be the gospel truth, though in normal circumstances her statement has to be relied upon.

A bench of justices H S Bedi and J M Panchal said while primacy has to be given to victims statement, there can be no presumption that she is telling the ultimate truth as the charge has to be proved beyond reasonable doubt as in any other criminal case.

The court passed the observation while acquitting one of the three accused Abbas Ahmad Chowdhary charged with raping a minor girl.

It was the case of the prosecution that on September 15, 1997, the accused Md. Mizazul Haq, Abbas Ahmad Chowdhury and one Ranju Das (absconding) had raped the victim after forcibly taking her to a tea estate in Jalalpur. The sessions court in Assam convicted two of the accused Chowdhary and Haq for rape. The Guwhati High Court upheld the conviction following which the duo appealed before the apex court. The apex court, however, gave benefit of doubt to Chowdhary as there were variations in the statements made by the victim.

It must first be borne in mind that in her statement recorded on 17th September, 1997, the prosecutrix had not attributed any rape to Abbas Ahmad Chowdhary. Likewise, she had stated that he was not one of those who kidnapped her and taken to Jalalpur Tea Estate and on the other hand she categorically stated that while she along with Ranju Das were returning to the village he had joined them somewhere along the way but had still not committed rape.

It is true that in her statement in court she has attributed rape to Abbas Ahmad Chowdhary as well, but in the light of the aforesaid contradictions some doubt is created with regard to his involvement. Some corroboration of rape could have been found if Abbas Ahmad Choudhary too had been apprehended and taken to the police sta-tion by Ranjit Dutta the constable, the apex court said.

The apex court pointed out that the victims original statement was corroborated by the investigating officer that only two of the appel-lants Ranju Das and Md Mizalul Haq along with the prosecutrix had been brought to the police station as Abbas Ahmad Chowdhary had run away while en route to the police station.

Resultantly, an inference can be rightly drawn that Abbas Ahmad Chowdhary was perhaps not in the car when the complainant and two of the appellants had been apprehended by constable Ranjit Dutta. We are, therefore, of the opinion that the involvement of Abbas Ahmad Chowdhary is doubtful, the apex court said.

However, it upheld the conviction of Mizazul Haq and dismissed his appeal. PTI

‘General list can’t fill vacancy in reserved quota’

Once All General Category Posts Filled, Wait List Redundant: SC


New Delhi: In an important development, the Supreme Court has held that general category candidates who crack competitive exams but end up getting waitlisted for want of seats cannot be accommodated against posts belonging to the reserved category even if they are lying vacant.
The merit list for general category is just for that category, the court has held in its fresh intervention in the “merit-versus-social justice” debate.
The ruling came in a case relating to appointment of district judges in the Delhi Judicial Services. It was alleged by aggrieved candidates that after filling up of the 13 posts notified for the general category, there were vacancies in the reserved category posts which were not filled and hence those on the top of the merit-cum-wait list be considered for the same.
A Bench comprising Chief Justice KG Balakrishnan and Justices Deepak Verma and B S Chauhan rejected the petitions saying it would be patently illegal to appoint persons in excess of the notified vacancies.
“Any appointment made beyond the number of vacancies advertised is without jurisdiction, being violative of Articles 14 and 16(1) of the Constitution, thus a nullity, inexecutable and unenforceable in law,” said Justice Chauhan writing the judgment for the Bench.
“In case the vacancies notified stands filled up, process of selection comes to an end. Waiting list etc cannot be used as a reservoir, to fill up the vacancies which come into existence after the issuance of notification or advertisement,” the Bench said.
In the case in hand, only 13 vacancies for general category were advertised, hence once that was filled up, there was no scope for looking at the wait list for filling any vacancy arising in the reserved category or otherwise, the Bench said. “The unexhausted select list is meant to be consigned to record room,” it said.
The Bench accepted the arguments of senior advocate A Mariarputham, who appeared for the HC. He said, “13 vacancies of general category were advertised: the same had been filled up according to merit, therefore, selection process in that respect stood exhausted.”
The HC had issued an advertisement on May 19, 2007, for 20 posts of district judges of which 13 were for general category, three for SCs and four for STs. All 13 general posts were filled up, but two posts reserved for SCs and four posts meant for STs could not be filled up for non-availability of suitable candidates.

The Delhi high court on Monday held that sex without marriage amounted to rape.

The woman stayed with her fiancé, Nikhil Prasar, in Mumbai for a few days, “where they had fun, and then went to Delhi and stayed in a hotel where they had sex”.


New Delhi: The court rejected pre-arrest bail to a man who repeatedly had sex with a woman but refused to marry her even after their engagement.
When it came to fixing a date for marriage, however, Nikhil refused, on the grounds that he had learned that she belonged to a different caste.
The woman complained to the police and a rape case was registered.
Justice VK Jain said the caste factor was an afterthought by Prasar, who then absconded. Could he marry “any girl merely because she belonged to a particular caste or sub-caste, even if he did not approve of her personality, temperament, education, culture, upbringing, and family background", the court asked.
“The answer can, obviously, be in the negative," justice Jain said.
He said it appears that the man did not intend to marry the woman and that was why he did not wait for sex even till his formal engagement with her.
If he were so orthodox and conservative that he broke the marriage owing to caste differences, he should not have hurried in for sexual intercourse before marriage, the justice said.
The court held that if it was not held as rape, it would “result in unscrupulous and mischievous persons taking undue advantage of innocent girls by promising marriage with them".
Sexual intercourse before marriage amounts to rape or it will result in victimization or exploitation of innocent girls, justice Jain said.

SC: Property of petty criminals can’t be seized

SC: Property of petty criminals can’t be seized
‘CrPC Provision Applies Only To Terrorists &  amp; Smugglers’

New Delhi: Petty criminals who acquire property from the proceeds of their illegal profession can breathe easy. For, the Supreme Court has said that police cannot invoke provisions of Criminal Procedure Code to confiscate the property of small-time criminals.
Referring to the provisions under Chapter VIIA of the code, a Bench comprising Justices V S Sirpurkar and S S Nijjar agreed with a Madhya Pradesh High Court ruling that this chapter was incorporated with the intention to curb mischief or completely eliminate terrorist activities and international crimes and would not apply to general offences.
The question about invocation of Chapter VII provisions for confiscation of property of petty criminals came in a case before Itarsi judicial magistrate, where the SHO concerned moved an application for taking over the property of Balram Mihani and others alleging that these were acquired from criminal activities. The HC had quashed the proceedings saying the confiscation provisions did not apply to local offences. MP government challenged it before the SC.
Referring to the applicability of Chapter VIIA provisions relating to international crossborder crimes, the apex court said, “It is clear that the whole chapter is relating to specific offences and has nothing to do with local offences or properties earned out of these.”
Writing the judgment for the Bench, Justice Sirpurkar said, “Chapter VIIA is one such measure to introduce stringent measures for attachment and forfeiture of properties earned by offences, by way of special arrangement in the contracting countries. However, if we accept the state’s contention that the provisions of Chapter VIIA are for all and sundry offences in India, it would be illogical.”
The Bench added, “Lastly, we cannot ignore the likely misuse of the provisions of Chapter VIIA if the whole chapter is made applicable to local offences generally. Such does not appear to be the intent of the legislature in introducing Chapter VIIA.”