The turnover of an export firm would not include the proceeds from the sale of scraps in the local market. The Supreme Court has given a liberal interpretation of the term 'turnover' in its judgment in the appeal, Commissioner of Income Tax vs Punjab Stainless Steel Industries. The exporter of stainless steel utensils sold the scrap but did not include the proceeds in the total turnover. The revenue authorities insisted that it was part of the turnover. The firm objected to it because such an inclusion would reduce the amount deductible under section 80HHC of the Income Tax Act. Rejecting its argument, the court stated that turnover is sale proceeds of the commodity in which the business unit is dealing. "The intention behind the enactment of section 80HHC was to encourage exports," the judgment said, "So, the legislature would surely like to give more benefit to persons who are making an effort to help our nation. Once the government decides to give benefit to them, the revenue authorities should also make all possible efforts to encourage such traders or manufacturers by giving them more benefits contemplated under law."
Receiver's power to file suit
A court-appointed receiver assigned to preserve the assets of a sick company has a right to institute suits for the above purpose, the Supreme Court has stated in its judgment, Shree Ram Urban Infrastructure Ltd vs Court Receiver. In this case, the Bombay High Court appointed the receiver.
He asked the tenant-firm of a prime property in Mumbai to pay compensation and vacate the premises. The firm challenged the right of the receiver to determine the tenancy and argued that he had not obtained the court permission for filing his suit. The firm's petitions and appeals were dismissed all along. Obtaining court permission to file suit was not mandatory, but at worst only an irregularity, the judgment said.
Order to revalue acquired land
The Supreme Court has directed the land acquisition officer to re-compute the compensation for land acquired in 1969, but was caught in litigation till now. In this case, land belonging to M/s Mahamaya General Insurance was acquired by the Uttar Pradesh Industrial Development Corporation at the rate of Rs 1.33 per square yard. The firm contested the rate as a neighbouring plot was sold around the same time at the rate of Rs 2 per square yard. The land acquisition authorities claimed that firm had sold some of its adjacent land at inflated price to outsiders without disclosing the acquisition and therefore that was not the correct base price. The Allahabad High Court had rejected the contention of the land owning firm. However, on appeal, the Supreme Court found substance in the argument of the firm and stated that there was no evidence to show that the firm had inflated the price of the land to get higher compensation. The sale of the neighbouring land appeared to be genuine transactions and therefore, that rate should be taken into account for recalculation. The payment must be paid within three months, along with solatium and interest.
