Sunday, March 28, 2010

INCOME TAX REPORTS (ITR) HIGHLIGHTS ISSUE DATED 29-3-2010 Volume 322 : Part 1

INCOME TAX REPORTS (ITR) HIGHLIGHTS

ISSUE DATED 29-3-2010

Volume 322 : Part 1

 

 

SUPREME COURT JUDGMENTS


>> Premium paid to bank to ensure delivery of foreign exchange on stipulated dates at predetermined rates not admissible as interest on capital borrowed for purposes of business : Asst. CIT v. Elecon Engineering Co. Ltd. p. 20


>> Making incorrect claim does not amount to concealment of "particulars" for attracting penalty u/s 271(1)(c) : CIT v. Reliance Petroproducts P. Ltd. p. 158

HIGH COURT JUDGMENTS


>> Personnel deputed to foreign country for fulfilment of contract for design and testing of software in foreign country entitled to deduction u/s 80HHE : CIT v. Information Architects (Bom) p. 1

 

>> Roll over premium to mitigate risk due to fluctuation in foreign exchange rate deductible u/s 36(1)(iii) : Elecon Engineering Co. Ltd. v. Asst. CIT (Guj) p. 11



>> Canteen for workers inside factory premises constitutes factory building entitled to higher rate of depreciation : CIT v. Bajaj Auto Ltd. (Bom) p. 29



>> Advertisement for appointment of dealer not akin to advertisement for recruitment of personnel not covered by s 37(3B)(ii) : CIT v. Bajaj Auto Ltd. (Bom) p. 29



>> Amount received as compensation is capital receipt : S. Zoraster and Co. v. CIT (Raj) 35



>> Valuation of property determined for AY 1971-72 and attaining finality : Same valuation applicable for subsequent years : CIT v. Rawal Rajeshwarsingh of Samod (Raj) p. 39



>> Deeming provision that where any part of company's business consists of purchase and sale of shares, company deemed to carry on speculation business applies whether loss or profit arises from such transaction : CIT v. Lokmat Newspapers P. Ltd. (Bom) p. 43



>> In the case of companies under liquidation, s 104 has no application : CIT v. Golecha Properties P. Ltd. (Raj) p. 51



>> Loss of earlier assessment year to be set off against profit of assessment year 1993-94 to determine claim of deduction u/s 80-I : Daya Engineering Works Ltd. v. CIT (Patna) p. 55



>> Amount received on sale of levy free sugar is capital receipt not assessable : CIT v. Tiruttani Co-operative Sugar Mills Ltd. (Mad) p. 59



>> Rent received by assessee engaged in development and sale of property assessable as income from property : CIT v. Haryana Urban Development Authority (P&H) p. 61


>> Beneficial owner of buses entitled to depreciation : CIT v. Smt. A. Sivakami (Mad) p. 64


>> AO to proceed whether revision was justified depending upon pending decision of Settlement Commission : CIT v. Vysya Bank (Karn) p. 69


>> Tribunal deleting additions on ground exact material in support of assessment not brought on record : Finding of fact : CIT v. Dr. A. P. Bahal (Raj) p. 71


>> Wrong claim for deduction does not amount to concealment of income : CIT v. Shahabad Co-op. Sugar Mills Ltd. (P&H) p. 73


>> Petitioner guarantor for loan taken by director of sister company for that company, recovery from petitioner valid : Molly Trading Co. P. Ltd. v. UOI (Bom) p. 76


>> No deliberate default where assessee on realising mistake committed by counsel accepting decision of AO : CIT v. Sidhartha Enterprises (P&H) p. 80


>> Assessee deducted tax at source and deposited with Government and tax deduction certificates sent to persons on next day : Penalty cannot be imposed : CIT v. Ashapura Garments P. Ltd. (Bom) p. 83


>> Assessee not maintaining accounts : Penalty cannot be levied u/s 271B : CIT v. S. K. Gupta and Co. (All) p. 86


>> Tribunal finding additions to income were adjusted against value of closing stock and explanation of assessee was not false : Cancellation of penalty justified : CIT v. Hindustan Computers Ltd. (All) p. 88


>> Notice for reassessment not valid where no material to show such escapement : Shankarlal Nagji and Co. v. ITO (Guj) p. 90


>> Deletion of additions did not represent undisclosed income : Justified : CIT v. Digvijay Chemicals (All) p. 95


>> Tribunal not considering reasons forming basis of order of Commissioner : Matter remanded : CIT v. KNR Patel (JV) (Bom) p. 97


>> Amount received under voluntary retirement scheme in excess of five lakhs of rupees entitled to relief u/s 89 : CIT v. T. K. Paliwal (Raj) p. 101, CIT v. S. N. Sharma (Raj) p. 105 and CIT v. Rabindranath Lal (Raj) p. 119


>> Commissioner directing payment of 50 per cent. of demand till disposal of appeal by CIT (Appeals) : Release of attachment subject to compliance with direction of Commissioner : Jagdish Sharma v. Union of India (Raj) p. 108


>> Rent : Apportionment between business income and income from house property : Finding of fact : CIT v. Mysore Intercontinental Hotels P. Ltd. (Karn) p. 116


>> Single donation of more than five per cent. for construction of one room in a hostel managed by particular community not a ground to deny renewal of approval of institution : Shri Sardarmal Sancheti Charitable Trust v. Union of India (Raj) p. 167


>> Department accepting nursing home run by two individuals not an AOP : No new materials discernible nursing home cannot be treated as an AOP : Dr. Narendra Prasad v. CIT (Patna) p. 171

AUTHORITY FOR ADVANCE RULINGS


>> Non-resident not liable to tax in India for marketing licensed software products through independent, non-exclusive, third party resellers : Dassault Systems K. K., In re p. 125

STATUTES


From our Reporter at the Supreme Court :


>> Appeal to High Court : Whether order for earlier year taken on appeal p. 1


>> Appeal to High Court : Dismissal on grounds of delay : Matter remitted to consider question of law p. 1


>> Bad debt : Whether writing off in books of assessee sufficient p. 2


>> Block assessment : Cross examination of witness p. 2


>> Block assessment : Income disclosed in regular assessment p. 2


>> Block assessment : Last panchnama for purpose of reckoning limitation p. 3


>> Block assessment : Mistake in computation of undisclosed income p. 3


>> Block assessment : Evidence relatable to search whether available for addition and penalty whether justified p. 3


>> Block assessment : Whether barred by time reckoning from date of last panchnama p. 4


>> Block assessment : Mere revocation of prohibitory order whether relevant for reckoning limitation p. 4


>> Book profits : Scope of interference by Assessing Officer p. 4


>> Book profits : Annual value of property : Whether rent paid by sub-lessee includible p. 4


>> Deduction : Whether allowable on income from dividend p. 4


>> Business : Single or multiple businesses p. 5


>> Business : When business set up p. 5


>> Business expenditure : Increased liability to interest on external commercial borrowings p. 5


>> Business expenditure : Liability owing to fluctuation in foreign exchange rate p. 5


>> Business expenditure : Travelling expenses of directors : Corporate club membership fees p. 6


>> Business expenditure : Whether salary, stamp duty, transfer fees and safe custody charges directly related to earning of dividend for the purpose of section 80M p. 6


>> Business expenditure : Commission payment p. 6


>> Business expenditure : Commission whether deductible p. 7


>> Business expenditure : Disallowance under section 14A on estimate p. 7


>> Business income : Interest from surplus funds temporarily invested in loans and advances p. 7


>> Business loss : Whether loss was trading loss p. 7


>> Capital gains : Eligibility for deduction under section 54EC on gains from sale of factory shed p. 8


>> Capital gains : Exemption whether allowable where proceeds invested in two flats p. 8


>> Capital gains : Purchase of two residential units p. 8

 

>> Cash credits : Persons to whom summons issued delaying proceedings, whether ground to make addition in hands of assessee p. 8

 

 

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