Page 20 - Banking Finance January 2022

LEGAL UPDATE

The assessee is a web-based platform and the Prime Minister expressed an- 65-year-old law continues to discrimi-
of 'Snapdeal', which serves vendors and guish over frequent interference in nate against women in matters of
customers for online purchase of policy decisions by the judiciary, the property succession requiring the Su-
goods. The assessee has incurred ex- Supreme Court said the cardinal rule preme Court to intervene and ask so-
penditure on advertising, sales promo- for the courts is not to interfere with licitor general Tushar Mehta to provide
tion and publicity, claiming it to be rev- the government's economic and regu- the Centre's views on a flawed provi-
enue expenditure. In contrast, the As- latory policies. sion of the Hindu Succession Act.
sessing Officer held that half of such
Upholding a decision of the Reserve Amicus Curiae Meenakshi Arora laid
spending is capital expenditure as it has
Bank of India to decline permission to bare before a bench of Justices D Y
helped the assessee maintain and cre- an Indian merchant, Akshay N Patel, Chandrachud and A S Bopanna the glar-
ate a 'Snapdeal' brand. from entering into an agreement to ing inequality in property succession as
However, on appeal before the Com- facilitate export of Chinese-made PPEs provided under the Act-on the death
missioner of Income Tax (Appeals), he to US, a bench of Justices D Y of an issueless Hindu married male, his
held that the above expenditure could Chandrachud, Vikram Nath and B V properties would vest with his parents;
not be said to be a capital expenditure. Nagarathna said the deference of the in case of the death of an issueless
RBI to the government policy banning
He relied upon several judicial prece- widow, her properties, excluding those
dents that had held that the incurring export of PPEs was justified as it was inherited by her from her parents, will
of advertisement, publicity and sales in the public interest to stop shortage vest not with her parents, but with her
promotion expenditure is wholly neces- of PPEs during the pandemic. husband's parents or relatives.
sitated for business purpose, though It said that exports from a foreign The preference in succession given to
enduring in the long term cannot be country to yet another country may not the husband's relatives on the proper-
held to be of capital expenditure. have caused shortage of PPEs in India
ties of a childless widow, even if the
Therefore, he deleted the above addi- but would surely have depleted the
properties were gifted to her by her
tion. Aggrieved by this, the Income Tax stocks in the world, which could have
parents or blood relatives, after her
Department moved to ITAT. been grabbed by rich countries for death appeared "clearly discrimina-
After hearing all the arguments and hoarding and reduced India's share to tory" to the bench headed by Justice
going through the facts placed on import PPEs. Chandrachud, which asked the SG to
record, ITAT said that there was noth- Writing the judgment, Justice get the government's view on this
ing in the Income-tax Act, as well as Chandrachud examined in detail the within four weeks.
there wasn't any material on record regulatory role of RBI in sync with the
Interestingly, if the issueless widow sells
suggestive of the fact that the asses- economic as well as regulatory policies
her property, which was inherited
see could not claim these expenses as of the government to nuance the role
revenue expenditure. "The fact re- of the constitutional courts in issues from her parents, and buys another
mained that as the assessee is operat- involving such policies. property utilising that money, then
ing in online marketing business as The three-judge bench said the consti- that newly acquired property would
aggregator which is a highly competi- tutional courts must be circumspect not be categorised as inherited prop-
tive consumer market, the assessee that "the rights and freedoms guaran- erty to vest with her parents after her
had to stay ahead of its competition death.
teed under the Constitution do not
and thus engage itself in brand promo- become a weapon in the arsenal of Mehta said the flaws in the succession
tional activities and has necessity to law pointed out by the court concern-
private businesses to disable regulation
incur these expenses," it said. ing an issueless widow may require
enacted in the public interest."
legislative intervention by Parliament.
Cardinal rule for courts is Succession provision in The bench agreed with the SG and
not to interfere with govt Hindu Act flawed: SC said the discrepancy, which has re-
mained in the statute books for so
policies: SC Two decades after India celebrated long, needs correction either through

Less than a week after the President the year of women empowerment, a judicial or legislative intervention. T

20 | 2022 | JANUARY | BANKING FINANCE