Taxation Law - Income Tax Act - Transfer Pricing – Selection of Most Appropriate Method – RPM vs. TNMM – ITAT’s Decision Upheld – The Revenue challenged the ITAT’s finding that Resale Price Method (RPM) was the correct method for determining the arm’s length price (ALP) of the assessee's international transactions, arguing that Transactional Net Margin Method (TNMM) should have been applied – The assessee, a pure distributor of solar products, purchased goods from its Associate Enterprise (AE) and resold them without any value addition – The Court held that RPM is the preferred method for distribution activities where no significant value is added to the goods before resale – Held: ITAT correctly applied RPM, and the High Court found no substantial question of law requiring interference [Paras 12-14].

Transfer Pricing – Aggregation of Transactions – Purchase Price and Warranty Cost Claim are Unrelated – The Revenue argued that the warranty cost claim and reimbursement of expenses should be aggregated with the purchase of solar products, justifying the application of TNMM – The Court rejected this argument, holding that the warranty cost was reimbursed by the AE and was not an additional service provided by the assessee – Held: Transactions were not inextricably linked and should not be clubbed together for transfer pricing purposes [Paras 13-14].

Functional Profile – Distributor vs. Manufacturer – RPM Confirmed as the Appropriate Method – The assessee acted as a pure distributor and did not engage in manufacturing or value addition – The Court emphasized that RPM is the most suitable method for distributors who simply purchase and resell goods without modification – Citing Burberry India Pvt. Ltd. (2024) and Matrix Cellular (2018), the Court reiterated that TNMM is more appropriate for value-adding entities, not for distribution businesses – Held: ITAT correctly applied established jurisprudence in selecting RPM over TNMM [Paras 15-16].

Income Tax – No Substantial Question of Law – High Court Declines to Interfere with ITAT’s Findings – The Court held that the Revenue’s appeal did not raise a substantial question of law, as ITAT’s decision was based on settled legal principles and factual appreciation – Held: The ITAT's order was well-reasoned, and the High Court found no grounds to interfere under Section 260A of the Income Tax Act [Paras 19-20].

Decision: Appeal Dismissed – The High Court upheld the ITAT’s order and dismissed the Revenue’s appeal – ITAT correctly determined RPM as the most appropriate method for benchmarking the assessee’s international transactions – No costs awarded [Paras 19-20].
 

Taxation Law – Transfer Pricing – International Transaction with Overseas Branches – Valid Reference to TPO – Petition Dismissed – Axis Bank contended that transactions between head office and foreign branches were not international transactions requiring ALP benchmarking – Held: In view of deeming fiction under Section 92F and judicial precedent, foreign branches treated as separate enterprises – Reference valid [Paras 37–44, 51].

CBDT Instruction No. 3/2016 – Procedural Compliance – Satisfaction and Approval Found Proper – Petitioner claimed breach of Instruction due to lack of speaking order – Held: Assessing Officer passed detailed speaking order and recorded satisfaction regarding income impact – Principal Commissioner validly approved reference – No procedural breach [Paras 17–24, 30–35].

Natural Justice – Reasonable Opportunity Given – No Prejudice Shown – Petitioner alleged denial of hearing due to late-night notice – Court held: Petitioner submitted objections which were duly considered and addressed by a speaking order – No breach of natural justice [Paras 16, 24, 29–30].

Taxability – Global Income and Credit – Deeming Fiction Upheld – Petitioner argued no tax impact due to global income consolidation – Court rejected, holding: Tax credit mechanisms and differential tax rates may affect revenue; transactions must be benchmarked to avoid base erosion [Paras 40–44, 51].

Premature Challenge – Maintainability of Writ – Rejected – Respondent contended petition was premature since TPO had not yet passed final order – Court held that since all legal issues had been raised and heard, writ was maintainable though ultimately dismissed on merits [Paras 36–38].

Decision: Writ Petition dismissed – Reference to TPO held valid – Transactions between Indian head office and overseas branches considered international transactions under Income Tax Act – Procedural and legal compliance affirmed – No costs awarded [Paras 51–53].
 

Regular Bail - NDPS Act  - Compliance with Section 50 – Procedural Violation Alleged – Petitioner alleged that search of vehicle and subsequent dissent memo were recorded in violation of Section 50, NDPS Act and Apex Court guidelines – Search was conducted before informing accused of his rights – Held: Prima facie violation noted but court refrains from making conclusive opinion on merits [Paras 3-4].

Drug Recovery – Non-commercial Quantity – Applicability of Bail Principles – Alleged recovery of 100 grams of heroin falls under non-commercial quantity – Court emphasized that pre-trial detention in such cases needs cautious approach due to Article 21 rights and delay in trial progress – Held: No justification to keep petitioner incarcerated indefinitely [Paras 4-5].

Impact of Police Target-Driven Anti-Drug Drive – Apprehension of Misuse – Court took judicial notice of recent DGP's press statement assigning ‘targets’ to police officers for drug arrests – Held: Quantified target-based assessment of police performance may encourage wrongful implication of innocent persons – Directed the State to adopt a balanced approach ensuring public confidence [Paras 4-5].

Criminal Antecedents – Effect on Bail – Court held that pendency of other cases alone cannot be a ground for denial of bail unless evidence in the present case independently supports such denial – Held: Prosecution must prove case-specific facts for opposing bail, not rely merely on antecedents [Para 5].

Bail – Right to Speedy Trial – Bail Granted – Charges already framed, no prosecution witness examined so far, trial likely to take long – Court applied Article 21 jurisprudence and Apex Court ratio in Dataram Singh and Hussainara Khatoon – Held: Bail granted subject to conditions [Paras 4-5].
 

Criminal Law - Murder Trial – Acquittal Challenged – Eyewitness Evidence Unreliable – Appeal Dismissed – The trial Court acquitted all accused in the murder of Mahadevan, citing contradictions, lack of corroboration, and absence of credible eyewitness testimony – The High Court held that the prosecution witnesses were inconsistent, lacked credibility, and their accounts contradicted the medical and forensic evidence – Appeal against acquittal dismissed [Paras 6–10, 39–40].

Section 302 IPC – Eyewitness Testimony Contradictory – No Direct Witness to Murder – The alleged eyewitnesses to Mahadevan's murder (PW1–PW5) gave conflicting accounts – Independent witnesses turned hostile – Trial Court rightly held that no conclusive evidence established guilt – Appellate Court declined to interfere with acquittal [Paras 33–36].

Trespass and Property Damage – Partial Proof – Damage Established but Accused Not Identified – While evidence (PW2, PW3) and recovered materials supported property damage at deceased’s home, identity of persons who caused damage was not proven – Held: Charges under TNPPDL Act failed for lack of credible identification [Paras 27–33].

Conspiracy Allegation – No Supporting Evidence – Accused A10 and A11 Added Later – Alleged conspiracy to murder at cashew grove uncorroborated – Prosecution failed to establish motive or link with actual assault – Trial Court rightly found conspiracy charge under Section 120B IPC not proved [Paras 16–25].

Evidentiary Gaps – FIR Registration Doubtful – Timeline Discrepancy – Altered complaint and delayed registration of FIR, lack of corroboration from medical/investigative records for claimed injuries of key witnesses (PW20, PW23), weakened prosecution case significantly [Paras 17, 22, 37].

Decision: Criminal appeal dismissed – No perversity or illegality found in trial Court’s acquittal order – Prosecution failed to prove charges beyond reasonable doubt – View taken by trial Court held plausible – No interference warranted [Paras 39–40].

Partnership Law – Bar Under Section 69(2) – Suit Maintainable as Firm Was Registered Before Filing – The trial court dismissed the suit, holding that the appellant firm was not registered at the time of filing, making the suit non-maintainable under Section 69(2) of the Partnership Act. The High Court examined Exhibit-8, a memorandum from the Registrar of Firms, proving the firm's registration before the suit was filed. The Court held that the bar under Section 69(2) applies only if the firm is unregistered on the date of filing, not at the time of transactions. Held: Suit maintainable, as the firm was duly registered before filing [Paras 30-42].

Limitation – Cause of Action Arose on Denial of Payment – Suit Filed Within Time – The respondent argued that the transactions occurred between 2005 and 2007, and the suit filed in 2010 was barred. The Court ruled that the limitation period starts from the date of denial of payment, not from the transaction date. Since the respondent partially admitted the claim and denied balance payments on August 1, 2008, the suit filed on June 5, 2010, was within the three-year limitation period. Held: Suit is not barred by limitation [Paras 26-29].

Admissibility of Additional Evidence – Certified Copies from Registrar of Firms Allowed – The appellant sought to introduce certified copies of firm registration records under Order XLI Rule 27 CPC to corroborate Exhibit-8. The Court held that these were public documents admissible under Sections 65 and 74 of the Evidence Act. The additional evidence did not create a new right but merely corroborated an existing document, thus meeting the test for admission. Held: Additional evidence admitted in appeal [Paras 31-40].

Validity of Respondent’s Written Statement – Procedural Defect Rendered It Invalid – The respondent’s written statement was filed by a director (D.W.1) in his personal capacity without stating he was acting on behalf of the company, nor was it stamped with the company seal. Under Order XXIX Rule 1 CPC, pleadings for a company must be signed and verified by an authorized person. The respondent failed to cure this defect or provide proper authorization. Held: Respondent’s written statement is procedurally defective and not valid in law [Paras 61-65].

Proof of Monetary Claim – VAT Adjustments and Purchase Register Confirm Transactions – The appellant relied on Exhibit-4 series (bills and challans) and Exhibit-7 series (respondent’s purchase register) to prove supply of goods. The respondent failed to produce VAT return records, despite adjusting VAT for the disputed transactions. Under Section 114(g) of the Evidence Act, adverse inference was drawn against the respondent for withholding crucial documents. Held: Transactions sufficiently proved, and appellant entitled to recover dues [Paras 43-52].

Respondent’s Defense of Fraudulent Collusion – No Evidence Against Ex-Director – The respondent alleged collusion between the appellant and its former director, Tarak Nath Mitra. However, D.W.1 (respondent’s own witness) admitted that no complaint, criminal case, or internal action was ever taken against Tarak. The Court found this defense to be an afterthought to avoid liability. Held: No evidence of fraudulent collusion; defense rejected [Paras 53-56].

Decision: Appeal Allowed – Trial Court Judgment Set Aside. The High Court held that the appellant’s suit was maintainable as the firm was registered before filing. The suit was within limitation, as the cause of action arose on August 1, 2008. Additional evidence from the Registrar of Firms was admissible. The respondent’s written statement was invalid, affecting its defense. The appellant sufficiently proved the monetary claim.

The respondent is directed to pay ₹24,36,105/- (Rupees Twenty-Four Lakh Thirty-Six Thousand One Hundred Five Only) with 6% interest per annum from June 5, 2010, until realization. The amount must be paid within 90 days, failing which execution proceedings will be allowed. Stay granted for four weeks to allow the respondent to appeal [Paras 77-82].
 

Service Law – Pension Entitlement – Deemed Opt-in Under Office Order – Pension Benefits Granted – The respondent, a retired Deputy Manager (Personnel) in Delhi Transport Corporation (DTC), did not explicitly opt for either the CPF Scheme or the GPF-cum-Pension Scheme within the prescribed period under the 1992 Office Order – As per para 9 of the 1992 Order, an employee who failed to exercise an option within 30 days was deemed to have opted for the Pension Scheme – The High Court, following the Supreme Court’s ruling in University of Delhi v. Shashi Kiran (2022) 15 SCC 325, held that the deeming clause in the 1992 Office Order automatically shifted the respondent to the Pension Scheme, irrespective of the fact that he continued contributing to CPF – Held: The respondent is entitled to pension benefits under the Pension Scheme [Paras 6-10, 28].

Retirement Benefits – Effect of Receiving CPF Benefits – No Estoppel Against Pension Claim – The DTC argued that the respondent continued contributing to CPF throughout his service and accepted CPF benefits on retirement, which should preclude him from switching to the Pension Scheme – The Court rejected this argument, holding that mere receipt of CPF benefits does not override the deemed pension opt-in provision in para 9 of the 1992 Order – Held: The respondent’s claim to pension remains valid, but he must return the CPF amount received upon retirement before receiving pension benefits [Paras 11-14, 29-31].

Applicability of Supreme Court Rulings – Deemed Pension Enrollment Irrevocable – S.L. Verma and Shashi Kiran Followed – The High Court relied on the Supreme Court’s ruling in S.L. Verma v. Union of India (2006) 12 SCC 53, which held that where a government notification or office order automatically transfers employees to a pension scheme unless they explicitly opt out, such transfer is irrevocable – The Court reiterated the principle from Shashi Kiran that any employee who did not exercise an option to remain in CPF by the cut-off date automatically shifted to the Pension Scheme, irrespective of subsequent contributions to CPF – Held: The DTC’s challenge is without merit as the legal fiction created by para 9 of the 1992 Order is binding [Paras 27-33].

Doctrine of Acquiescence and Estoppel – Not Applicable to Mandatory Legal Fiction – DTC contended that the respondent’s failure to claim pension earlier, coupled with acceptance of CPF funds, amounted to acquiescence and estoppel – The Court rejected this argument, holding that estoppel does not apply against statutory entitlements and legal fictions – Held: Pension entitlement arises from statutory rules and employer-issued office orders, and cannot be waived merely by conduct [Paras 34-35].

Reimbursement of CPF Amount – Condition for Pension Entitlement – While granting relief to the respondent, the Court directed that before receiving pension benefits, the respondent must refund the CPF amount received upon retirement, along with applicable interest – Held: Pension payments shall commence only upon reimbursement of CPF dues as per the conditions stipulated in the 1992 Office Order [Paras 36-37].

Decision: Writ Petition Dismissed – The High Court affirmed the CAT's orders dated 23 December 2015 and 8 February 2016 – DTC directed to extend pension benefits to the respondent in accordance with the GPF-cum-Pension Scheme – The respondent must return the employer's CPF contribution before receiving pension benefits – No order as to costs [Paras 38-40].
 

Tenancy Law - Eviction on Grounds of Bona Fide Requirement – Death of Landlord – Continuation of Need – The tenant contended that the eviction petition was not maintainable after the original landlord’s death – The Court held that the bona fide need of the landlord’s dependents, as pleaded in the eviction petition, survives even after the landlord’s demise – Held: The eviction petition remained valid, and the successor landlords could continue the proceedings [Paras 5, 13].

Landlord’s Bona Fide Need – Bequest of Property Irrelevant – The tenant argued that the property was bequeathed to one of the respondents, not the intended business beneficiaries (the landlord’s son and grandson), which indicated a lack of bona fide need – The Court rejected this argument, holding that a landlord's decision on ownership and business use are separate matters – Held: A bequest to one family member does not negate the bona fide requirement for another family member’s business [Paras 7-8].

Non-Production of Will – No Adverse Inference – The tenant sought to draw an adverse inference from the landlord’s failure to produce the Will in court – The Court held that an adverse inference can only be drawn if a party refuses to comply with a direct court order to produce evidence, which was not the case here – Held: The non-production of the Will did not affect the validity of the eviction order [Paras 11-12].

Tenant’s Failure to Prove Alternative Accommodation Unavailable – Under the first proviso to Section 11(3), a tenant can resist eviction by proving that no suitable alternative premises are available – The Court found that the tenant failed to provide such proof – Held: The tenant did not meet the burden of proof to invoke the protection under Section 11(3) [Paras 10-11].

Tenant’s Conditional Stay – Undertaking to Vacate Within Six Months – The Court granted the tenant six months to vacate the premises, subject to conditions – The tenant was required to file an undertaking before the Rent Control Court within two weeks and deposit any rent arrears within one month – Held: Non-compliance with these conditions would automatically cancel the extension and allow the landlord to execute the eviction order immediately [Paras 14-16].

Decision: Revision petition dismissed. Tenant permitted to remain in possession for six months under specified conditions.
 

Family Law - Senior Citizens Act – Eviction Power – Jurisdictional Limits – Order Set Aside – Respondent No.2 (father) sought eviction of daughter under the 2007 Act based on GPA and agreement to sell – Held: GPA and sale agreement do not confer ownership or title – Only owners of property can seek eviction under the Act – Impugned order passed without jurisdiction [Paras 13–18].

Ownership of Property – GPA and Agreement to Sell – No Title Conferred – Senior citizen claimed property through irrevocable GPA and sale agreement – Held: Supreme Court has clarified that such documents do not confer ownership or title – Property remains in name of third party – Eviction cannot be sought under 2007 Act on this basis [Paras 14–15].

Alternative Remedy – Possession Claims via Civil Suit – Held: If possession is to be claimed by GPA holder, remedy lies before Civil Court and not under 2007 Act – Direction issued to respondent to avail proper legal forum if he wishes to claim possession [Paras 19–20].

Eviction of Daughter – Improper Invocation of 2007 Act – Application Under Act Misconceived – Held: Since property was not transferred by the senior citizen to petitioner, provisions of Section 23 of the Act not attracted – Eviction order unsustainable [Paras 17–19].

Decision – Writ Petition Allowed – Eviction Order Set Aside – Court held that authorities under the 2007 Act overstepped their jurisdiction in passing eviction directions – Order dated 07.04.2016 set aside – Liberty granted to senior citizen to approach Civil Court for possession claim if so advised [Paras 20–21].
 

Medical Fitness – Recruitment of Constable – Scoliosis Diagnosis – Appellant declared medically unfit by Civil Surgeon, Sirsa, based on diagnosis of “right dorso-lumbar spine scoliosis” – No specific opinion declaring unfitness by PGIMS Rohtak or PGIMER Chandigarh – Appellant cleared physical tests and Medical Board of PGIMER, consisting of seven specialists, found appellant fit to perform duties of Constable – Held: Medical Board's conclusive finding prevails; denial of appointment solely based on speculative future complications not sustainable [Paras 8-14].

Doctrine of Lis Pendens – Protection of Candidate's Right – Respondents’ plea of non-availability of post rejected – Court applied doctrine of lis pendens observing that filling up posts during pendency of writ petition cannot prejudice appellant's right – Held: Appointment to be considered despite subsequent appointments during litigation [Para 15-16].

Recruitment Rules – Application of Punjab Police Rules – Rule 12.16(1) requires specific and reasoned medical opinion to declare a candidate unfit – Absence of such finding in appellant's case – Held: Mere presence of 15-degree spinal curvature does not amount to a disqualification without an adverse medical finding [Paras 12-14].

Relief – Appeal allowed – Appellant directed to be considered for appointment as Constable with notional seniority from date candidates lower in merit were appointed – Actual benefits to accrue from date of judgment – Exercise to be completed within one month [Paras 17-18].