AMAN BIR PAL SINGH KAHLON V. UNION OF INDIA AND ORS

LPA/269/2008

AI Insights

The case revolves around the eligibility criteria for an LPG distributorship allotted to respondent No.6, which required the applicant's gross family income not to exceed Rs.2,00,000 in the last financial year (1999-2000). The appellant contested the eligibility based on the auditor's report of M/s Amar Foundry and Engineering Works, which showed gross profits of Rs.5,15,647.50. However, the court clarified that 'gross family income' refers to the net income of all family members from all sources, not just the gross profits of a business. The court found that after deducting expenses, the net income was Rs.92,498.50, which was below the threshold, and thus respondent No.6 was eligible.

• Counselvise Citation: [2009] 140 COUNSELVISE.COM (IT) 732102 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 25-09-2009
• Assessment Year: misc
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: KANWALJIT SINGH; M S KAHLON
• Keywords: Auditor's report; Eligibility criteria; Income verification; LPG Distributorship; Gross family income

Judgement Text

"LPA No.269 of 2008 1 IN THE HIGH COURTOF PUNJAB AND HARYANA, CHANDIGARH. LPA No.269 of 2008 in CWP No. 12925 of 2001 Date of decision: 25.9.2009 Aman Bir Pal Singh Kahlon ..Appellant vs. Union of India and others. ..Respondents. CORAM: HON'BLE MR.JUSTICE J.S.KHEHAR. HON'BLE MR.JUSTICE NAWAB SINGH. --- Present: Mr.Kanwaljit Singh,Senior Advocate, with Mr. M.S.Kahlon,Advocate, for the appellant. -- J.S.KHEHAR,J. (Oral) Through the instant Letters Patent Appeal the appellant is seeking to impugn the order passed by this Court on 11.8.2008, while disposing of CWP No.12925 of 2001. During the course of hearing of CWP No.12925 of 2001, the appellant had raised two pleas. First, pertaining to the gross income of the respondent, and the second, relating to the violation of the condition of making available a plot of land to be used for storing LPG cylinders. During the course of hearing of the instant Letters Patent Appeal, learned counsel for the appellant has pressed the first of the aforesaid two pleas. The necessary condition for eligibility on the issue of income, which was incorporated in the terms and conditions of allotment of distributorship of LPG (BPCL) at Batala was, that the applicant should “have gross family income (family as defined in the application form) not more than Rs.2,00,000/- in the last financial year (1999-2000)”. In so far as the aforesaid condition is concerned, it is the plea of the learned counsel for LPA No.269 of 2008 2 the appellant, based on the auditor's report (copy whereof is available on the record of the instant appeal as Annexure R6/5), that the gross profits of M/s Amar Foundry and Engineering Works, G.T.Road, Simble Chowk, Batala, was Rs.5,15,647.50. Based on the aforesaid auditor's report, it is the submission of the learned counsel for the appellant, that the family income of respondent No.6 i.e., the candidate chosen and allotted the LPG distributorship, was in excess of Rs.2,00,000/- per year. In this behalf it is clarified, that in the aforesaid M/s Amar Foundry and Engineering Works, the husband of respondent No.6 was of 50% shareholder. In response to the assertion made at the hands of the petitioner in CWP No.12925 of 2001, the express stance adopted by respondent No.6 was depicted in paragraph 4 of the preliminary objections, in the written statement filed on her behalf. Paragraph 4 of the written statement, is being extracted hereunder:- “ The basic challenge of the petitioner is that the answering respondent's income alongwith that of her husband Shri Vivek Sekhri and that of her minor children exceeds about Rs.2 lacs. for the financial year 1999-2000, which is relevant for the purposes of allotment. The position regarding income of the answering respondent and her family is given below:- “Answering respondent Ruby Sekhri did not file any return for the financial year 1999-2000, as she had no income. In this regard, the copy of the notice, dated 25.1.2001 from the Income Tax Officer, Batala to the answering respondent is attached as Annexure R-6/2 and the reply thereto sent by the Advocate of the answering respondent on 2.3.2001 is attached as Annexure R-6/3. The income of Shri Vivek Sekhri, the husband of the answering respondent for the financial year 1999-2000 LPA No.269 of 2008 3 including interest income of Rs.38,224/- from Fixed Deposit Receipt of the minor children was Rs.65,640/-. In this regard, the copy of the order of the Income Tax Department alongwith the computation sheet, showing the income are attached as Annexure R-6/4 (Collectively). During the Financial year 1999-2000 M/s Amar Foundary and Engineering Works had a nominal profit of Rs.6000/- as per the Income Tax return and profit and loss and trading account, copy of which is attached as Annexure R- 6/5. The answering respondent had started a concern called M/s BEEARR Castings in April,2000. In this regard, the copy of the certificate, dated 14.6.2000 issued by the General Manager, District Industries Centre, Batala is attached as Annexure R-6/6. There was no income of this concern during the financial year 1999-2000. Thus, the total income of the answering respondent, her husband and her minor children is far below the ceiling of Rs.2 lakhs prescribed by the advertisement. Even in the financial year 1998-99, the position of the income of the answering respondent and her family was well below Rs.2 lakhs. The answering respondent had no income in the financial year 1998-99. Her husband Sh.Vivek Sekhri had a total income of Rs.32,676/-. In this regard, the copy of the Income Tax Return of Sh. Vivek Sekhri, alongwith computation in support thereof are collectively attached as Annexure R-6/7. The income of the Fixed Deposit Receipt and of the children of the answering respondent is also reflected in the Income Tax return of Sh.Vivek Sekhri. M/s Amar Foundary and engineering Works suffered a loss of Rs.2,01,170/-, as per copy of the Income Tax Return for the financial year 1998- 99, copy annexed as Annexure R-6/8”. The only issue to be considered by us, to record a conclusion on the LPA No.269 of 2008 4 contention advanced by the learned counsel for the appellant is, whether the factual position depicted in paragraph 4, extracted hereinabove, should be taken as correct, or in the alternative whether Annexure R/6/5, referred to hereinabove, depicting the gross profits should be taken into consideration for determining the gross family income of respondent No.6. The share of the husband depicted in the auditor's report, as has been pointed out by the learned counsel for the appellant is in excess of Rs.2,00,000/- if gross profits are to be taken into consideration. And as such, respondent No.6 would be ineligible for consideration for allotment of distributorship. The aforesaid limited issue emerges from the fact, that it is not the case at the hands of the appellant-petitioner, that respondent No.6 had any other income besides the income depicted in the auditor's report Annexure R6/5. The auditor's report, referred to hereinabove, pertains to M/s Amar Foundry and Engineering Works, Batala. It admittedly depicts the gross profits as Rs.5,15,647.50. However, this depiction is without accounting for the expenses referred to in the profit and loss account for the year 1999-2000 (i.e., the year ending on 31.3.2000). The aforesaid auditor's report after having made deductions of expenses etc., records a net profit of Rs.92,498.50 in the aforesaid financial year. It is the emphatic submission of the learned counsel for respondents No.6 that while determining the present controversy, a sum of Rs.92,498.50 was shown as the net profits earned by M/s Amar Foundry and Engineering Works,Batala, in the auditor's report. It is the submission of the learned counsel for respondent No.6 that the aforesaid income alone, can be taken into consideration for determining the eligibility of respondent No.6. Whereas, according to the learned counsel for the appellant, Rs.92498.50 constitutes the net income of LPA No.269 of 2008 5 M/s Amar Foundry and Engineering Works,Batala, because the eligibility clause refers to “gross family income”. It is, therefore, the submission of the learned counsel for the appellant, that gross profits depicted in the auditor's report at Rs.5,15,647.50, should be treated as the “gross family income” of the husband of respondent No.6, by dividing the same equally between the husband of respondent No.6, and his father who were admittedly the only two shareholders of M/s Amar Foundry and Engineering Works,Batala. Thus viewed, according to the learned counsel representing the appellant, the gross family profits of the husband of respondent No.6, was in excess of Rs.2,00,000/- in the financial year under reference. It is not possible for us to accept the submission of the learned counsel for the appellant. Learned counsel seems to be advancing his submission under the impression that “profits” and “income” are synonyms. Whereas, only when a deduction of expenses incurred, is made from gross profits, the resultant amount is the “net income” earned. In our considered view “gross family income” means income derived from all the members of a family, i.e.,income earned by a family from all quarters. Illustratively, a family may derive income by way of interest, rental income, income from business pursuits and salary income etc.etc. In other words, net income of all family members when added together, will lead to the determination of “gross family income”. Again, Illustratively there may be more than a couple of members of a family, including the spouse and children etc. In our view, the term “gross” refers to income from all sources, of all family members. LPA No.269 of 2008 6 In the present case however, income is shown only from the two sources,namely, from the business carried out under the name and style of M/s Amar Foundry and Engineering Works, as also on account of interest on FDRs (also reflected in the auditor's report of M/s Amar Foundry and Engineering Works Batala). Both those were taken into consideration in the auditor's report Annexure R6/5, and on the collective determination thereof, it was sought to be concluded in the auditor's report, that the income for the financial year 1999-2000 totalled Rs.92,498.50. Thus viewed, we are satisfied, that what was described as “gross family income” in the conditions of eligibility must be deemed to be the aforesaid income of Rs.92,498.50 in so far as the determination of the present controversy is concerned. Interpretation of the term “gross family income” as suggested by the learned counsel for the appellant, is clearly unacceptable,because the actual income earned can be determined only when a deduction of expenses etc. is made from gross profits. In the present case, even the aforesaid income of Rs.92,498.50, cannot be deemed to be the “gross family income” of respondent No.6, as the same was to be equally apportioned between the husband of respondent No.6 and his father; as the father of the husband of respondent No.6 does not fall in the definition of “family” of respondent No.6. Thus viewed, the “gross family income” of respondent No.6 did not make her ineligible. There is no material whatsoever on the record of this case on the basis of which it can be concluded that the “gross family income” of respondent No.6 comprised of any income other than that depicted in the auditor's report, or was in excess of Rs.2,00,000/- in the financial year 1999-2000. Accordingly, we affirm the conclusion recorded by the learned Single Judge. LPA No.269 of 2008 7 For the reasons recorded hereinabovem we find no merit in the instant appeal, and the same is accordingly dismissed. ( J.S.Khehar) Judge (Nawab Singh) Judge September 25, 2009 rk "