Ransom for executive deductible expense of company

A division bench of the Madhya Pradesh high court has ruled that ransom paid to a dacoit to release a kidnapped director of a company is “general expense” and is deductible in income tax assessment. In this case, CIT vs Tobacco Products Ltd, a director was kidnapped in Sagar who had gone there to buy tendu leaves. The police was unable to give help. So the company paid Rs 5.5 lakh to get him back. In the income tax returns, the company, manufacturer of bidis, showed this as general expense. It was rejected by the authorities. After travelling several ladder of tribunals, the question was referred to the high court. It ruled in favour of the company stating that it was allowable deduction under Section 37(1) of the Income-tax Act. The authorities argued that payment of any amount which is prohibited by law is not business expenditure. The high court rejected this contention and stated that the director was on business tour and was staying in government guest house from where he was kidnapped. No fault could be found in the claim of the company for deducting the ransom money.

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Employers flouting labour laws through subterfuges

Employers are resorting to subterfuges to defeat labour laws these days, the Supreme Court has lamented. In this case, Bhilwara Dugdh Utpadak Sahakari vs Vinod Kumar, the employer showed that the employees were those of his contractor. Criticising this practice which is adopted in the name of globalization and liberalization, the court remarked: “Labour statutes were meant to protect the employees because it was realised that the employers and the employees are not on an equal bargaining position. Hence, protection of employees was required so that they may not be exploited. However, this new technique of subterfuge has been adopted by some employers in recent years in order to deny the rights of the workmen under various labour statutes by showing that the concerned workmen are not their employees but are those of a contractor, or that they are merely daily wage or short-term or casual employees when in fact they are doing the work of regular employees.”

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Repacking gas attracts excise duty

Buying gas in bulk from market and repacking them in smaller cylinders after tests and giving different grades to it to be sold in open market would attract excise duty, the Supreme Court stated while dismissing the appeal of the manufacturer in the case, Air Liquide North India Ltd vs Commissioner. The company supplied helium gas to customers according to the specifications of its customers. It bought gas by its generic name and after tests and analysis sold them to different customers based on their specific requirements at a profit margin. The process was not revealed by the company as it claimed that it was its “trade secret”. The court held that the process of tests and categorization gave the gas different marketability and amounted to manufacture, attracting duty.

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Pay excise duty on laminated particle board : SC

The Supreme Court last week ruled that manufacturers of laminated particle board will be liable to pay a higher excise duty as after processing, the product becomes a distinct marketable commodity different from the original one. The panels, after lamination, become water resistant, scratch resistant and look attractive due to printed design paper. 

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No separate action from centre for Compulsory registration of marriages

The process for compulsory registration of marriages in the wake of the Supreme Court order of 2006 is being worked out by State Governments and Union Territories and hence, no separate action by the Central Government is considered necessary, Salman Khurshid, Union Minister of Law & Justice has said.

The Supreme Court vide its judgment dated 14.02.2006 in Seema Vs. Ashwani Kumar (AIR 2006 S.C 1158) has directed the State Governments and the Central Government that marriages of all persons who are citizens of India belonging to various religious denomination should be made compulsorily registrable in their respective States where such marriages are solemnized.

The minister in written reply to a question in the Rajya Sabha this week said that “it is not correct to say that the process of registration of marriages is cumbersome. The process for compulsory registration of marriage is worked out by respective State Governments and the Union Territory Administrations by making suitable legislation/ rules or by amending existing legislation/ rules on the basis of the situation obtained in their respective territories to make the process simple and easier. Hence, no separate action by the Central Government is considered necessary.”

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Offence committed by an Indian in a foreign country can be tried by a court in India

An offence committed by an Indian in a foreign country can be tried by a court in India, the Supreme Court has held.

A three-judge Bench of J. Altamas Kabir, J. Cyriac Joseph and J. S.S. Nijjar said “the provisions of Indian Penal Code have been extended to offences committed by any citizen of India in any place within and beyond India by virtue of Section 4 thereof.”

The Bench, however said that offences committed by an Indian citizen in a foreign country would be amenable to provisions of IPC subject to the limitation imposed under Section 188 Cr.PC, viz seeking the prior consent of the Central government.

In the present case, the appellant Thota Venkateswarlu was married to Parvatha Reddy Suneetha in November 2005 as per Hindu traditions and customs in Ongole in Andhra Pradesh. At the time of marriage Rs. 12 lakh in cash, 45 sovereigns of gold and Rs. 50,000 as ‘Adapaduchu katnam' was alleged to have been given to the husband, mother-in-law, and other relatives of the husband.

According to Suneetha, her husband left for Botswana in January 2006 and she later joined him. While in Botswana, she was allegedly severely ill-treated and various demands were made including a demand for additional dowry of Rs. 5 lakh. Unable to withstand the torture she sent a complaint to the Superintendent of Police, Ongole for dowry offences under IPC as well offences under the Dowry Prohibition Act.

The magistrate, to whom the complaint was forwarded took cognisance and issued summons to the husband and others, who were questioned on their arrival to India. While the Andhra Pradesh High Court quashed proceedings against the appellant's mother and two others, it dismissed his plea. The present appeal by Venkateswaralu is directed against this order.

The appellant's wife argued that part of the offence relating to dowry was committed in Indian soil and part of the offence was committed abroad. Hence the offence could be tried in Indian courts. However, the appellant argued that he could not be tried without the previous sanction from the Central government.

J. Kabir pointed out that it was clear that the case relating to the alleged dowry offences were committed outside India. But since part of the offence was committed in India, the court here could try the appellant and the High Court was correct in rejecting his plea to quash the proceedings. The Bench while asking the trial court to take up the case said, the trial would not proceed without the sanction of the Central government as envisaged in Section 188 Cr.P.C.

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CBI may reinvestigate the Haren Pandya Murder Case

The Central Bureau of Investigation (CBI) will reinvestigate the Haren Pandya Murder Case, if so desired by the Supreme Court.

The CBI got the green signal from the home minister to move a special leave petition in the Supreme Court of India to challenge last month's Gujarat High Court judgment which acquitted 12 accused of the murder charge.

Stung by the HC's castigation of CBI for its sloppy investigation, CBI chief A P Singh met Chidambaram on Monday to discuss further course of action. Sources said Singh gave a detailed half-hour presentation in the presence of a legal expert where he admitted to loopholes in the investigation resulting in gross miscarriage of justice.

The discussed veered around to the view that the agency should not shy away from re-investigation, if directed by the Supreme Court. This is a demand which has already been raised by the victim's family members. Interestingly, the Brahma Samaj in Gujarat has also jumped into the fray and has demanded that a fresh probe be ordered. Leaders of the Brahmin community are scheduled to state a protest at Law Garden on Wednesday evening, at the same spot where Pandya was shot dead on the morning of March 26, 2003. The community is also expected to intervene in the case, when the CBI approaches the SC, and had already lined up a senior lawyer for the purpose.

Meanwhile, three senior Congress leaders of Gujarat - Shankarsinh Vaghela, Shaktisinh Gohil and Arjun Modhvadia - also met Chidambaram in New Delhi on Tuesday and represented the feelings of family members and the community. They added that even the Gujarat government had suggested on the day of HC judgment that CBI should go to the apex court.

While Chidambaram promised to expedite the matter, a highly-placed CBI source said there were sufficient grounds for re-investigation as fresh leads had been obtained about the Pandya killers during subsequent investigations of fake encounters in Gujarat.

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