Thursday, September 30, 2010

ITR (Tribunal) ISSUE DATED 4-10-2010 Volume 5 : Part 6



> Business expenditure : Where purchase of raw material from far-off places from the premises of assessee, identity of payee and genuineness of transaction established disallowance u/s. 40A(3) not justified : Habib Agro Industries v. Addl. CIT (Bangalore) p. 531

> Unabsorbed depreciation cannot be set off against salary income : Chandrakumar v. Asst. CIT (Chennai) p. 540

> Department not entitled to raise additional grounds contrary to finding of AO : ITO v. M.M. Textiles (Mumbai) p. 547

> Rental income derived by assessee from sub-letting premises is "income from other sources" : ITO v. M. M. Textiles (Mumbai) p. 547

> AO co-relating funds contributed by partners with rate of interest on which money lent by assessee for disallowance u/s. 40A(2), not proper : ITO v. M.M. Textiles (Mumbai) p. 547

> Export : Entire direct and indirect costs deductible from sale proceeds realised in convertible foreign exchange u/s. 80HHC(3)(b) : Mectech International v. Asst. CIT (Delhi) p. 564

> Capital gains : Assessee utilising sale proceeds of shares for other purpose and purchasing property from loans taken from bank not entitled to exemption u/s. 54F : Milan Sharad Ruparel v. Asst. CIT (Mumbai) p. 570

> Income earned by exercise of profession as CA not entitled to relief u/s.80RR : Dilip K. Sheth v. ITO (Mumbai) p. 581

> Rectification : Telephone expenses allowed : Order of CIT(Appeals) confirming disallowance deleted : Dilip K. Sheth v. ITO (Mumbai) p. 581

> Sums paid voluntarily by inmates of Ashram to be treated as donations, trust entitled to approval u/s. 80G(5) : Vaidik Bhakti Sadan Asram v. CIT (Delhi) p. 590

> Right to occupy house taken on licence under agreement for period of two terms of eleven months against interest-free deposits cannot be termed to be purchase of residential house : Prafulchandra R. Shah (Late) v. Asst. CIT (Mumbai) p. 598

> Capital gains : Cost of acquisition of tenancy rights to be taken at nil u/s. 55(2) : Prafulchandra R. Shah (Late) v. Asst. CIT (Mumbai) p. 598

> Refund due to excess TDS and advance tax, assessee to be paid interest on refund u/s. 244A : Hyundai Motor India Ltd. v. Dy. CIT (Chennai) p. 611

> Reassessment : AO forming belief interest income assessable as income from other sources has jurisdiction to reassess u/s. 147 : Jagan Lamps Ltd. v. ITO (Delhi) p. 617

Wednesday, September 29, 2010

ITR HIGHLIGHTS ISSUE DATED 4-10-2010 Volume 326 : Part 3


ISSUE DATED 4-10-2010 Volume 326 : Part 3


> Membership card of Bombay stock exchange is an intangible asset entitled to depreciation : Techno Shares and Stocks Ltd. v. CIT p. 323

> Duty to deduct tax at source does not arise unless remittance contains wholly or partly taxable income : GE India Technology Centre P. Ltd. v. CIT p. 456


> Withdrawal of approval u/s 10(23C)(vi) for AY 2009-10 and show-cause notices for AY 2007-08 and 2008-09 justified : Valliammai Society v. Director General of Income-tax (Investigation) (Mad) p. 337

> Valuation of stock could not be changed where no evidence that valuation not correct : Voltamp Transformers Ltd. v. CIT (Guj) p. 360

> Excise duty liability only at time of removal of goods not includible in valuation of closing stock of finished goods at end of accounting period : Asst. CIT v. Narmada Chematur Petrochemicals Ltd. (Guj) p. 369

> Activity of import of machine and indigenizing and improving it to suit Indian market entitled to deduction u/s 35(4) : CIT v. Engineering Innovation Ltd. (HP) p. 392

> Deletion of addition justified where assessee reconciling entire material recovered during survey with return filed : CIT v. Diplast Plastics Ltd. (P&H) p. 399

> Additions to income in hands of assessee valid, where husband of assessee admitting that he carried on business and that he had suppressed sales and assessee not rebutting presumption raised : T. Radha v. Asst. CIT (Mad) p. 401

> Lump sum received after retirement from service as non-compete fee not assessable as profits in lieu of salary in AY 2001-02 : CIT v. A. Khosla (Mad) p. 406

> Tribunal confirming additions proper where donors disowning making gifts and denying acquaintance with assessee : Smt. Kusum Lata Thakral v. CIT (P&H) p. 424

> Transport subsidies shown in reserve and surplus account and not in profit and loss account in original return : Reassessment proceedings valid : CIT v. Shiv Shakti Flour Mills P. Ltd. (Gauhati) p. 430

> AO passing order of rectification on ground that assessee wrongly debited warranty claims which was an uncertain liability : Debatable issue : Rectification cannot be made : CIT v. Gemi Motors India P. Ltd. (P&H) p. 443

> Tribunal finding transaction giving rise to capital gains not business income : Finding of fact : CIT v. Rohit Anand (Delhi) p. 445

> High Court has no power to review under I. T. Act : Deepak Kumar Garg v. CIT (MP) p. 448

> Order rejecting application for waiver of penalty without proper reason not valid : Shrinath Ceramics v. CIT (MP) p. 452


> Education cess is allowable as business expenditure ? (Narayan Jain and Deepak Jain , Advocates) p. 1

> Is excise duty payable on manufactured goods includible in value of closing stock ? (M. S. Prasad, Retd. Director (A & PAC) CBDT) p. 11


> Income-tax returns filing date extended to November 30 in Jammu and Kashmir

The Central Board of Direct Taxes (CBDT) has extended the due date of filing of returns of income for the assessment year 2010-11 for all categories of cases in the State of Jammu and Kashmir to November 30, 2010. The decision was taken by the CBDT in exercise of powers conferred under section 119 of the Income-tax Act, 1961, considering the reports of disturbance of general life, caused due to the law and order problem in the State.

Accordingly, the date for obtaining and furnishing Tax Audit report under section 44AB of the Income-tax Act is also extended to November 30, 2010. [Source : dated September 23, 2010]

> Short-lived gift of extra 1% EPF interest under tax-net

The Labour Ministry has hiked the employees' provident fund, or EPF, rate to 9.5 per cent., but a Finance Ministry notification says that anything in excess of 8.5 per cent. will be taxed.

The Labour Ministry is, however, confident that the tax department will renotify the higher rate, as otherwise a lot of contentious issues will come up. The Labour Minister had declared a 9.5 per cent. bonanza on provident fund deposits on September 15-marking a one percentage point increase in the rate from the 8.5 per cent. paid in the last five years.

But even before the EPF board met under the Labour Minister, the Central Board of Direct Taxes had notified a tax-free PF rate of 8.5 per cent. for 2010-11-effective from September 1. This means that the 1 per cent. extra income (or Rs. 1,700 crore) that the Labour Ministry has projected as a gift to the workforce, would be fully taxable. This is the first time ever that income from provident fund would be taxable, if the tax department does not notify the higher rate.

Historically, the tax-free PF rate notified by the Income-tax Department has never been lower than the EPF rate declared for the year.

But levying the tax would be far from easy. The PF interest would be credited to workers' accounts at the end of the year. The trust in charge of the PF would be responsible for deducting the applicable tax at that time.

Usually, the Income-tax Department notifies a tax-free PF rate for the whole year. But this year, it is only applicable from September 1. So the 9.5 per cent. provident fund return would be tax-free from April to August, but taxable thereafter. "For company-run trusts, this would be a headache - calculating the tax liability on 1 per cent. PF income for seven months," said a senior vice president at a private consultancy firm.

But the most acute problem will be faced by the Employees' Provident Fund Organisation-which manages 5 crore PF accounts.

Firstly, EPFO simply does not have the systems in place to deduct tax at source. All PF account withdrawals before completing five years of service, are fully taxable, as per existing income-tax rules. But the rule has never been implemented because of EPFO's unreliable manual record-keeping systems.

Even if EPFO could deduct tax at source before crediting interest to members, the applicable income-tax bracket would vary for its members. For every deduction made, it would also have to give workers a Form 16 statement. [Source : dated September 25, 2010]

> Companies will soon be asked to unearth investments held abroad

The provision to tax productive assets will be implemented once the Direct Tax Code regime, which seeks to replace the Income-tax Act, 1961, is implemented from April 2012.

In short, investment by Indians in controlled foreign corporations (CFCs) will be liable to wealth tax, once DTC becomes law. Under the 20th Schedule of DTC, an entity is considered a CFC when one or more persons residing in India exercise control over a foreign company.

Wealth-tax Act in its current form charges tax only on non-productive assets such as urban car, motor vehicles, jewellery, yachts, boats, aircraft etc., at the rate of 1 per cent. on wealth exceeding 15 lakh. The productive assets such as investment with financial institutions, bank balances, land and machinery etc. are not liable for wealth tax.

DTC is proposing to cover productive assets such as investments in equity and preference shares of a CFC. Many Indian companies have investments in CFCs and DTC is proposing to tax these investments. [Source : dated September 25, 2010]

> SEZ developers to look at legitimate ways to beat DTC deadline

The deadline of March, 2014, under the proposed Direct Taxes Code (DTC) for making new special economic zone units operational if they are to get tax benefits is likely to speed up development of these SEZs by entrepreneurs, a report said.

The DTC Bill, which was tabled in Parliament in August, proposed that units in SEZs that commence commercial operations by March, 2014, shall be allowed profit-linked deductions permitted under the Income-tax Act, 1961.

It also proposed that SEZs notified on or before March 31, 2012, will get income-tax benefits.

With SEZs attracting investments of over Rs. 1.66 lakh crore, industry sources said the income-tax benefit provided in the SEZ Act, 2005, is the major attraction for investors.

ASSOCHAM further said that demand for offices in the SEZs is expected to be low in the next 3-6 months, as occupiers are likely to rework their real estate strategies in the wake of the new time lines proposed in the DTC.

"The real estate market in India is likely to adjust to the changing circumstances once DTC comes into force and then see a sustained demand momentum until 2014 from developers as well as occupiers," the report said.

The Government has given formal approval for setting up about 580 SEZs, of which 122 have become operational. [Source : dated September 23, 2010]

> Supreme Court launches tax evasion plea

The special leave petition of a telecom major has been listed for hearing before a three-judge bench headed by Chief Justice SH Kapadia. The apex court will decide whether the Income-tax Department has the jurisdiction to tax the company's $11.2-billion purchase of 67% controlling interest in the Indian company in February 2007.

The Income-tax Department slapped a show-cause notice on the company's Netherlands-based subsidiary, seeking $1.7 billion as capital gains tax. It also sought to impose penalty for the company's failure to deduct tax at source for the transaction. This was contested by the telecom company in the Bombay High Court, but its petition was dismissed.

The dissident approached the Supreme Court, but the apex court refused to entertain the special leave petition of the telecom giant. The court expressed its displeasure over major's refusal to divulge the details of the agreement of such transaction. "Why the details were not disclosed to the High Court (Bombay High Court). It is not even shown to us (apex court)", a bench comprising Justice SB Sinha (now retired) and Justice MK Sharma had said.
The apex court, however, asked the assessing authority to decide on the issue of whether the Revenue Department has the jurisdiction to demand capital gain tax on the deal which was carried outside the country. The Department, after hearing it afresh, served an order on the telecom company, saying it had the jurisdiction to tax the deal and once again approached the High Court, which ruled in favour of the Department. [Source : dated September 27, 2010]

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Tuesday, September 28, 2010

Aayurved : खट्टे नींबू के 10 मीठे गुण

1 शुद्ध शहद में नींबू की शिकंजी पीने से मोटापा दूर होता है।

2 नींबू के सेवन से सूखा रोग दूर होता है।

3 नींबू का रस एवं शहद एक-एक तोला लेने से दमा में आराम मिलता है।

4 नींबू का छिलका पीसकर उसका लेप माथे पर लगाने से माइग्रेन ठीक होता है।

5 नींबू में पिसी काली मिर्च छिड़क कर जरा सा गर्म करके चूसने से मलेरिया ज्वर में आराम मिलता है।

6 नींबू के रस में नमक मिलाकर नहाने से त्वचा का रंग निखरता है और सौंदर्य बढ़ता है।

7 नौसादर को नींबू के रस में पीसकर लगाने से दाद ठीक होता है।

8 नींबू के बीज को पीसकर लगाने से गंजापन दूर होता है।

9 बहरापन हो तो नींबू के रस में दालचीनी का तेल मिलाकर डालें।

10 आधा कप गाजर के रस में नींबू निचोड़कर पिएँ, रक्त की कमी दूर होगी।
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HC (BOM): Circumstances subject to exercise of jurisdiction U/s 263

Where the Assessing Officer took a possible view, while passing an order of assessment, the Commissioner exceeded his jurisdiction in seeking recourse to his power under section 263.

HIGH COURT OF BOMBAY Grasim Industries Ltd. vs. CITITR No. 113 of 1990


11. Section 263 of the Income Tax Act, 1961 empowers the Commissioner to call for and examine the record of any proceedings under the Act and, if he considers that any order passed therein, by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the Revenue, to pass an order upon hearing the assessee and after an enquiry as is necessary, enhancing or modifying the assessment or cancelling the assessment and directing a fresh assessment. The key words that are used by Section 263 are that the order must be considered by the Commissioner to be "erroneous in so far as it is prejudicial to the interests of the Revenue". This provision has been interpreted by the Supreme Court in several judgments to which it is now necessary to turn. In Malabar Industrial Co. Ltd. vs. CIT, 1 the Supreme Court held that the provision "cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer" and "it is only when an order is erroneous that the Section will be attracted" The Supreme Court held that an incorrect assumption of fact or an incorrect application of law, will satisfy the requirement of the order being erroneous. An order passed in violation of the principles of natural justice or without application of mind, would be an order falling in that category. The ex-pression "prejudicial to the interests of the Revenue", the Supreme Court held, it is of wide import and is not confined to a loss of tax. What is prejudicial to the interest of the Revenue is explained in the judgment of the Supreme Court:

"The phrase "prejudicial to the interests of the Revenue" has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the Revenue. For example, when an Income tax Officer adopted one of the courses permissible and the Income tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue, unless the view taken by the Income tax Officer is unsustainable in law."

The principle which has been laid down in Malabar Industrial Co. Ltd. (supra) has been followed and explained in a subsequent judgment of the Supreme Court in Commissioner of Income Tax vs Max India Ltd . 2 While interpreting the provisions of Section 80HHC(3), the Supreme Court noted that the statutory provision had been amended eleven times and different views existed on the day when the Commissioner passed his order under Section 263.

The Court observed that "the mechanics of the section have become so complicated over the years that two views were inherently possible." Consequently, the subsequent amendment to the statutory provision, even though it was retrospective, would not attract the provisions of Section 263 particularly when the provision of law, as it stood, on the date when the Commissioner passed the order under Section 263, would have to be taken into account.

12. In Commissioner of Income Tax vs. Gabriel India Ltd.,3 a Division Bench of this Court observed that Section 263 does not confer an arbitrary or uncharted power on the Commissioner. In considering as to whether an order is erroneous in so far as it is prejudicial to the interests of the Revenue, the Commissioner must be guided by the material on the record. The power of suo motu revision under Section 263(1), is in the nature of supervisory jurisdiction. Two circumstances must exist in order to enable the Commissioner to exercise the power, namely, (i) the order must be erroneous; and (ii) by virtue of the order being erroneous, prejudice must have been caused to the interests of the Revenue.

Section 263 does not empower the Commissioner to substitute his judgment for that of the Assessing Officer, unless the decision is held to be erroneous. Both the conditions for the exercise of the power must be fulfilled. The order, in other words, sought to be revised, must be erroneous and must be prejudicial to the interests of the Revenue.

13 .The question as to whether the Commissioner has acted within the fold of his jurisdiction under Section 263 or outside it, in the present case, must be decided with reference to the principles which have been laid down by the Supreme Court and by this Court. Section 41(1) provides that where an allowance or deduction has been made in the assessment for any year in respect of a loss, expenditure or trading liability incurred by the assessee and subsequently during any previous year, the assessee obtained whether in cash or in any other manner, any amount in respect of such loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation thereof, the amount obtains or the value of the benefit accruing shall be deemed to be profits and gains of business or profession and would accordingly be chargeable to income as the income of that previous year. The State Legislature enacted the Kerala Forest Produce (Fixation of Selling Price) Act, 1978. Section 3(1) empowers the Government to fix the selling price of forest produce for the following financial year. Section 5 stipulated that after the publication of the notification under Section 3, no forest produce shall be sold by the Government at a price which is less than the notified selling price. On 9th March 1979, the Government of Kerala issued notifications in exercise of its power under the Act of 1978 for the period ending 31st March 1981 and also for the period commencing from 1st April 1981, being the previous year relevant to Assessment Year 1982 83. The assessee had been allowed a deduction of an amount of Rs.1.75 crores during the Assessment Years 1980 81, 1981 82 and 1982 83. The notifications that were issued by the State Government were challenged by the assessee before the Kerala High Court. By its judgment dated 15th April 1981, the High Court struck down the notifications in so far as they related to eucalyptus, on the ground that in fixing the prices for eucalyptus, the State Government had not followed the procedure prescribed by the Act. The Kerala High Court held that matters which were required to be considered had not been placed before the Committee which was statutorily to be constituted under the provisions of the Act and the Committee had failed to consider relevant material before making its recommendations, in regard to the price of eucalyptus. The judgment of the Kerala High Court, therefore, set aside the notifications on the ground that the mandate of the Act in fixing the price of forest produce had not been followed and that relevant consideration had not been borne in mind by the Committee. The liability of the assessee to pay arose by virtue of the provisions of Section 5 of the Act, under which, no forest produce could be sold by the Government at a price, which was less than the selling price; the selling price being de1` 1fined to mean that the price of forest produce fixed by the Government under Section 3. The judgment of the Kerala High Court did not prohibit the government from issuing a fresh notification. After the decision of the Kerala High Court, the Expert Committee constituted under the provisions of Section 4, convened for the purposes of deciding afresh, the selling price of eucalyptus upto 31st March 1982. The Committee held its meeting on 25th March 1982, which was six days before the end of the relevant period here, and recommended the fixation of the selling price of eucalyptus between Rs.328/  to Rs.384/  per metric ton between 1978 and 1981. The Special Secretary to the State Government in the Forest and Minor Irrigation Department recorded in a note dated 27th March 1982 that the Kerala Forest Produce (Fixation of Selling Price) Rules, 1978 had been amended on 28th May 1981. Some doubt was expressed as to whether these Rules could fasten a liability with retrospective effect in the absence of an amendment to the parent legislation. The State Government, in pursuance of the judgment of the Kerala High Court proceeded to issue fresh notifications on 31st March 1981, 29th April 1981 and 29th May 1981. By the notification dated 29th May 1981, the Government refixed the selling price in the year 1981 82 with effect from 1st June 1981. On 31st March 1982, selling prices were notified for the period from 1st April 1982. These notifications were once again challenged by the assessee in a Writ Petition before the Kerala High Court. The Petition was allowed by the Division Bench of the Kerala High Court on 28th May 1994 and the notifications were set aside with a declaration that the prices fixed of bamboo, reed and eucalyptus were not payable by the Petitioner. The judgment of the Kerala High Court did not conclude the proceedings. Special Leave Petitions were filed before the Supreme Court in which, while granting leave, interim orders were passed by the Supreme Court, directing the assessee to pay the price of forest produce at 60% of the rate fixed in the notification issued by the State Government under Section 3(e) of the Act, less the price already paid. The Bank Guarantees furnished by the assessee were allowed to be encashed to the aforesaid extent. The Supreme Court expressed the hope that the parties would be able to arrive at a settlement which may be "beneficial to all concerned, having regard to the checkered history of the litigation with its attendant uncertainties, and to avoid further long drawn out litigation." Eventually, a settlement was arrived at between the Government of Kerala and the assessee on 27th October 1988. By the settlement, a series of matters set out in the schedule, came to be settled and parties agreed that no payment will be due by either party to the other in respect of any of the matters mentioned in the schedule.

14. The narration of facts would thus show that the liability of the assessee in respect of the payment due for the supply of forest produce, under the Kerala Forest Produce (Fixation of Selling Price) Act, 1978, was not concluded by the judgment of the Kerala High Court dated 15th April 1981. The notifications fixing the price of eucalyptus were set aside by the Kerala High Court, on the ground that the Committee statutorily constituted under the Act, had not applied its mind to the relevant material. The liability of the assessee to pay at the price notified, arose under the Act, for the supplies of forest produce effected by the State Government to the assessee . The liability arose as a result of the supply of forest produce the quantification of liability was liable to be made by the instrument of the notifications issued in accordance with the provisions of the Act. The view that there was no remission or cessation of the liability during the previous year, relevant to Assessment Year 1982- 83, was a possible view having regard to the circumstances, which transpired after the judgment of the Kerala High Court.

These circumstances included the following:

(i) The recommendations made by the Expert Committee on 25th March 1982 for the refixation of prices of forest produce six days before the end of the financial year; (ii) The issuance of fresh notifications by the State Government; (iii) The challenge by the assessee to the fresh notifications; (iv) The judgment of the Kerala High Court dated 28th May 1984, setting aside the second set of notifications; (v) The filing of Special Leave Petitions before the Supreme Court challenging the judgment of the Kerala High Court in the second round; and (vi) The interim order passed by the Supreme Court requiring the assessee to pay at the rate of 60% of the prices/notifications and allowing encashment of Bank Guarantees for that purpose; and (vii) The eventual resolution of the dispute by a settlement of 27th October 1988.

15. In these circumstances, when the Assessing Officer took a possible view, while passing an order of assessment, the Commissioner exceeded his jurisdiction in seeking recourse to his power under Section 263. At the least, it must be held that the question as to whether the liability of the assessee had ceased in the previous year relevant to the Assessment Year 1982 83, was an issue on which a possible view was that there was no final or irrevocable remission or cessation of liability, within the meaning of Section 41(1) of the Act, during Assessment Year 1982 83. This view could not, by any stretch of logic, be regarded as being insustainable in law. The condition precedent to the exercise of jurisdiction under Section 263, is that the order sought to be revised must be erroneous in so far as it is prejudicial to the interests of the Revenue. Following the judgments of the Supreme Court in Malabar Industrial Co. and Max India Ltd. (supra), it is now a settled principle that where the Assessing Officer has adopted one of the courses permissible in law or where two views are possible and the Assessing Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the Assessing Officer is unsustainable in law. In the present case, two views were inherently possible and the assessee therefore, cannot be subjected to the exercise of the jurisdiction under Section 263. The Tribunal, with respect, has adopted a rather simplistic view of the matter, in coming to the conclusion that the liability had ceased to exist, consequent upon the judgment of the Kerala High Court, dated 15th Apri1981. This clearly overlooks the checkered history of the litigation. The fact that the litigation had a checkered history was noted in the interim order of the Supreme Court, which also referred to the "attendant uncertainties" and to the possibility of a "further long drawn out litigation".

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Monday, September 27, 2010


Vodafone tax case: Supreme Court declines to stay High Court order

NDTV Correspondent & Agencies, 27 September, 2010

The Supreme Court on Monday refused relief to Vodafone in the Rs. 12,000 crore tax case, in a ruling that will have far-reaching consequences on how the future cross-border transactions are carried out in India.

Declining to stay the Bombay High Court order, the apex court has directed the Income Tax Department to decide within four weeks the liability to be paid by Vodafone.

The Supreme Court said that Vodafone has to deposit a certain amount based on the apportioned sum decided by the income tax department.  Britain's Vodafone on September 13 moved the Supreme Court challenging a Bombay High Court order that upheld the Income Tax Department's demand of Rs. 12,000 crore tax on the company's over $11 billion deal with Hong Kong-based Hutchison in 2007.

The Bombay High Court had earlier dismissed Vodafone International's petition challenging the Indian tax authorities' demand of Rs. 12,000 crore in tax over the Hutchison deal.

The High Court division bench held that Indian income-tax authorities had the jurisdiction to tax the transaction.

The Income Tax department has held Vodafone liable for not deducting tax at source from payment made to Hutchison and claimed around Rs. 12,000 crore in tax and penalty in the 2007 deal.

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Saturday, September 25, 2010

Ram janmabhumi Babri masjid Vivad!! keep cool

24 sep ko ram janambhumi -babri msjid ka fsla ane wala hai,ho skta he is faisle se kuch vivad ho?
Alag alag dharmik prty apko uksaye mandir or masjid ki bat kare
        tab 1 bat yadd rakhna k dango me mrne wala n hindu hota hai na muslman wo sirf kisika bhai ,kisi ka beta ya kisika Pati or kisi k ghar ka chirag hota hai,or isi insaniyat ke khatir is mail ko aage bhejte raho ,kyuki hum sub pehle hindustani hai.
jay hind

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Thursday, September 23, 2010

ITR (Trib)) HIGHLIGHTS Vol 5, Part 5. issue dated 27-9-2010


ISSUE DATED 27-9-2010 Volume 5 : Part 5


> Assessee not entitled to claim that no tax was liable to TDS as contract for supply of material, once tax deducted assessee bound to pay it u/s. 201(1A) : Block Development Officer v. ITO (Delhi) p. 426

> Search and seizure: Reassessment: Failure to make out any case of escapement of income by AO, reassessment quashed : Shukla Construction Co. v. Asst. CIT (Indore) p. 432

> Loss suffered by assessee in trading of shares speculative loss : Priyasha Meven Finance Ltd. v. ITO (Mumbai) p. 441

> Housing project comprising some units of area exceeding 1500 sq.ft. not eligible for deduction u/s.80-IB(10) : Asst. CIT v. Viswas Promoters P. Ltd. (Chennai) p. 449

> Assessee failed to prove net realisable value of closing stock less than average cost : AO making additions on undervaluation of closing stock of polished diamonds proper : D. Subhashchandra and Co. v. Asst. CIT (Ahd.) p. 452

> Valuation of stock: Rejection of method of valuation without proper reasons and addition to income, not valid : Pankaj Diamond v. Asst. CIT (Ahd.) p. 469

> Receipt of consideration by non-resident for purchase of shares by assessee after TDS; assessee can be treated as agent : Utkal Investments Ltd. v. Asst. DIT (International Taxation) (Mumbai) p. 481

> Fees : CIT(Appeals) dismissing appeal on ground of non-maintainability, sum of Rs. 500 payable as fee : Dr. A. Naresh Babu v. ITO (Hyd.) p. 485

> Where assessee providing bona fide explanation in relation to seized cash as accumulated income and furnishing returns of income, penalty cannot be imposed : Dhanya Kumar Jain v. ITO (Indore) p. 497

Sunday, September 19, 2010

The Two Most Important Management Secrets: The Pygmalion and Galatea Effects

Your expectations of people and their expectations of themselves are the key factors in how well people perform at work. Known as the Pygmalion effect and the Galatea effect, respectively, the power of expectations cannot be overestimated. These are the fundamental principles you can apply to performance expectations and potential performance improvement at work.

You can summarize the Pygmalion effect, often known as the power of expectations, by considering:

  • Every supervisor has expectations of the people who report to him.
  • Supervisors communicate these expectations consciously or unconsciously.
  • People pick up on, or consciously or unconsciously read, these expectations from their supervisor.
  • People perform in ways that are consistent with the expectations they have picked up on from the supervisor.

The Pygmalion effect was described by J. Sterling Livingston in the September/October, 1988 Harvard Business Review. "The way managers treat their subordinates is subtly influenced by what they expect of them," Livingston said in his article, Pygmalion in Management.

The Pygmalion effect enables staff to excel in response to the manager's message that they are capable of success and expected to succeed. The Pygmalion effect can also undermine staff performance when the subtle communication from the manager tells them the opposite. These cues are often subtle. As an example, the supervisor fails to praise a staff person's performance as frequently as he praises others. The supervisor talks less to a particular employee.

Livingston went on to say about the supervisor, "If he is unskilled, he leaves scars on the careers of the young men (and women), cuts deeply into their self-esteem and distorts their image of themselves as human beings. But if he is skillful and has high expectations of his subordinates, their self-confidence will grow, their capabilities will develop and their productivity will be high. More often than he realizes, the manager is Pygmalion."

Can you imagine how performance will improve if your supervisors communicate positive thoughts about people to people? If the supervisor actually believes that every employee has the ability to make a positive contribution at work, the telegraphing of that message, either consciously or unconsciously, will positively affect employee performance.

And, the effect of the supervisor gets even better than this. When the supervisor holds positive expectations about people, she helps individuals improve their self-concept and thus, self-esteem. People believe they can succeed and contribute and their performance rises to the level of their own expectations.

Even more powerful than the Pygmalion effect, the Galatea effect is a compelling factor in employee performance. The manager who can assist employees to believe in themselves and in their efficacy, has harnessed a powerful performance improvement tool.

I'm sure you've heard of the words, "self-fulfilling prophecy." Applied as the Galatea effect, these words mean that the individual's opinion about his ability and his self-expectations about his performance largely determine his performance. If an employee thinks she can succeed, she will likely succeed. Consequently, any actions the supervisor can take that increase the employee's feelings of positive self-worth, will help the employee's performance improve.

I don't mean to over-simplify this concept. Many other factors also contribute to the level of an employee's performance including your company culture, the employee's life experiences, education, family support and relationships with coworkers. However, positive supervision is one of the key factors that keeps good employees on the job.


These are ways in which you can encourage positive, powerful self-expectations in employees.

  • Provide opportunities for the employee to experience increasingly challenging assignments. Make sure she succeeds at each level before moving forward.
  • Enable the employee to participate in potentially successful projects that bring continuous improvement to the workplace.
  • Provide one-to-one coaching with the employee. This coaching should emphasize improving what the employee does well rather than focusing on the employee's weaknesses.
  • Provide developmental opportunities that reflect what the employee is interested in learning.
  • Assign a successful senior employee to play a developmental mentoring role with the employee.
  • Hold frequent, positive verbal interactions with the employee and communicate consistently your firm belief in the employee's ability to perform the job. Keep feedback positive and developmental where possible.
  • Make sure the employee is receiving consistent messages from other supervisory personnel. How you speak to others about employees powerfully molds their opinions.
  • Project your sincere commitment to the employee's success and ongoing development.


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Saturday, September 18, 2010

Monthly Digest of Case Laws (August 2010)

Monthly Digest of Case Laws (August 2010)

Compiled by: Ajay Singh, Paras Savla, Rahul Hakani, Sujeeth Karkal and Rangesh Banka, Advocates, KSA Legal


S. 2(1A) : Agricultural income – Exemption - Sale of hybrid seeds.

Assessee is engaged in research, production, and sale of hybrid seeds by following method of contract farming and basic seeds sown in leasehold land. When basic as well as secondary agricultural operations carried on by assessee, entire is agricultural income.

Advanta India Ltd v DY CIT (2010) 5 ITR (Trib) 57 (Bang.)

S. 2 (14) : Capital asset - Agricultural land - Capital gains

Since assessee's land was situated beyond radius of 8 Kms from limits of municipality ,the land in question was not capital asset with in meaning of section 2 (14) (iii) (b), hence not liable to capital gain.

Srinivas Pandit (HUF) v ITO (2010) 39 SOT 350 (Hyd.)

S. 2 (14) : Capital asset – Transfer - Capital gain - forfeiture of deposit (S. 2(47)

Assessee entered in to an agreement with power attorney holder of land owners and paid certain amount as advance. Sale deed was required to be executed within six months from the date of agreement. As the assessee could not manage fund within the prescribed period, agreement was cancelled and amount paid by assessee was forfeited. Assessee claimed that amount forfeited represented short term capital loss which could be set off against long term capital gains. The tribunal held that essential requirement for charging capital gains (or allowing capital loss) is that a transfer of capital asset should be effected in the relevant previous year. In the instant case, by paying advance money assessee did not get any right which could be termed as capital asset within meaning of section 2 (14), and which was transferred within the meaning of section 2 (47), therefore the assessee claim was not allowable.

Dinesh Babulal Thakkar v Asst CIT (2010) 39 SOT 332 (Ahd.)

S. 2 (22) (e ) : Deemed dividend - advance or loan-other than share holder

Deemed dividend under section 2 (22) (e), can only be assessed in hands of person, who is share holder of lender company and not in hands of a person other than shareholder.

MTAR Technologies (P) Ltd v Asst CIT ( 2010) 39 SOT 465 (Hyd.)

S. 2 (47) : Capital gains - Transfer- shares - Broker

In case of shares, transfer by way of sale through a share broker in a stock exchange is complete only when delivery of share certificate together with instrument of transfer duly signed are delivered and consideration for transfer is paid and not when broker issues a contract note.

Suresh K. Jajoo v Asst CIT (2010) 39 SOT 514 (Mum.)

S. 4 : Income- Reimbursement of expenses-

No part of reimbursement of specific and actual expenses received by the assessee which do not involve any mark up can be treated as income of the assessee.

Linklaters LLP v ITO (2010) 132 TTJ 20 (Mumbai)

S. 4 : Income - Diversion by overriding title - creation of development fund

Matter remanded to the AO to find out whether the development fund is created by the assessee on his own or at the instance of the association pursuant to the agreement entered in to between the association and the assessee and whether the assessee is entitled to claim the development fund from the association as a matter of right and then to decide the taxability in assessee's hands.

CIT v Mahesh Bhupathi (2010) 43 DTR 159 (Kar.)

S. 4 : Income - excess cash received from customer

Excess cash received at the cash counters of the bank represents the liability to pay to the customers as and when they may demand payment, therefore such excess cash collection cannot be considered as the income of the assessee.

CIT v Bank of Rajasthan Ltd (2010) 233 CTR 530 (Bom.)

S. 5 : Income – Accrual - Interest on government securities

Interest on Government securities can be said to accrue only when it becomes due and, therefore, there cannot be a charge to such income until such time that it becomes due.

CIT v Bank of Rajathan Ltd (2010) 233 CTR 530 (Bom)

S. 6 : Residence in India - Non resident - Visit to India

Assessee already employed and deputed abroad, his status could not be taken as resident on the ground that he came on a visit to India and therefore, the period of 60 days as mentioned in section 6(1) (c), should be extended to 182 days, by ignoring his subsequent visit to India after completing the deputation, outside India. The first day in series of a day is to be excluded if the word "from" is used and since for computing of the period, one has to necessarily, import the word "from" the first day is to be excluded and so computed. Assessee's stay in India did not exceed sixty days and therefore his status had to be taken as non-resident during the relevant year.

Manoj Kumar Reddy v ITO (2010) 42 DTR (Bang) (Trib) 171.

S. 9(1)(i) : Income deemed to accrue or arise in India - Business connection - Permanent establishment - dependent agent – DTAA – India – Germany -International taxation. (S 90, Art 5 )

Sale of raw materials /CKD units to DCIL. DCIL carried out further activity of assembling the same and selling the finished cars. There were no further activities carried out by the assessee in India in this connection. Mere sale of raw materials/components would not result in business connection and even if it did as per the terms and conditions of the contract between the assessee and DCIL no income occurred to the assessee on the basis of any activities carried out on behalf of the assessee in India. Mere existence of subsidiary does not by itself constitute the subsidiary company as a PE of the parent. The DCIL was merely rendering a very insignificant auxiliary/preparatory service in the sale of CBU cars by assessee to the Indian Clients. Therefore DCIL did not constitute a dependent agent of the assessee.

DY DIT v Daimler Chrysler A.G. ( 2010) 39 SOT 418 (Mum.)

S. 9(1) (vi) : Income deemed to accrue or arise in India- Royalty- supply of soft ware- DTAA- India- USA (art 12.)

Sale of off-the shelf shrink –wrapped software by foreign companies to a company in India is sale of copyrighted article and therefore, income therefrom is not royalty either under the IT Act or under the terms of the relevant DTAA's.

Velankani Marutius Ltd v dy DIT.( 2010) 42 DTR (Bang ) (Trib) 193/132 TTJ 124 (Bang ) (Trib).

S. 9 (1) (vi) : Income deemed to accrue or arise in India- Fees for technical services- DTAA- India –UK (art. 7 ).

Services rendered by non resident lead managers to the assessee company for bringing out GDR issue , though in the nature of technical or managerial services , were not "made available " to the assessee and therefore cannot be taxed in India. Underwriting commission was neither fees for technical services under section 9 (1) (vi) nor chargeable to tax as "business profits' under art 7 of the DTAA in the absence of any PE of the non resident in India, payment towards reimbursement of expenses not being in the nature of income was not taxable.

DY DIT v Tata Iron & Steel Co Ltd ( 2010) 42 DTR (Mumbai ) ( Trib ) 204.

S. 9(1)(vi) : Income deemed to accrue or arise in India-Royalty-Permanent establishment- DTAA-India- Netherlands- International taxation-(Art 5, 7, 12)

Receipt of bare boat rentals i.e. rent for use of or payment for use of equipment cannot be brought to tax as royalty. As the assessee had no personnel located in India for purpose of execution of contract entered into by it with HAM, it could be said that it had no PE in India and lease in question was merely a dry lease of an equipment, hence receipt in question cannot be taxed in India.

DY CIT v Nederlandsche Overzee Baggermaatsehappiji bv ( 2010) 39 SOT 556 (Bom)

S.9(1)(vii) : Income deemed to accrue or arise in India- Fees for technical services-professional services rendered by foreign firm.

In view of Explanation to section 9 (1), as amended retrospectively by Finance Act, 2010, the fees for professional services earned by the assessee a UK based partnership firm, in connection with projects in India is taxable in India under the domestic law.

Linklaters LLP v ITO (2010) 132 TTJ (Mumbai) 20/42 DTR (Mumbai) (Trib) 233.

S. 10 (10C) : Exemption-Employee- Reserve Bank of India- Retirement scheme.

The amount received by retiring employees of the Reserve Bank of India opting for optional early retirement scheme are eligible for exemption from income tax under section 10(10C) of the income tax Act.

Chandra Ranganathan and others v CIT (2010) 326 ITR 49 (SC)

S. 10 (20) Exemption- Local authority-Gujarat Municipality Act

Provisions of Gujarat Municipalities Act are applicable to all notified areas created under section 16 of GIDA and such notified areas have same power under the Municipalities Act, therefore a notified area for industrial development under GIDA is municipality covered by cl. (ii) of section 10(20) and its income is exempt.

ITO vs. Sachin Notified Area (2010) 42 DTR (Ahd) (Trib) 478

S. 10 (23C) : Exempted income – Charitable - religious institutions

Assessee trust maintained a hospital for philanthropic purpose. Philanthropy is not restricted to giving free treatment only to extremely poor, but it would also be philanthropy to give treatment at a concessional rate to those who, though not extremely poor yet cannot afford to pay full and normal charges. There was profit in some years and cumulative losses in earlier years, as this aspect has not been considered the matter was set aside.

Breach Candy Hospital Trust v Chief CIT (2010) 192 Taxman 98 (Bom)

S. 10A : Exemption- Export oriented unit- Computation- brought forward loss and unabsorbed depreciation.

Brought forward loss and unabsorbed depreciation of earlier years to be set off before allowing deduction under section 10A.

Intellinet Technologies India P. Ltd v ITO ( 2010) 5 ITR ( Trib) 96 (Bangalore).

S. 10A : Exemption- Computation - Freight and Insurance – Turnover - Foreign exchange fluctuation - Addition and disallowance.

Freight and insurance charges do not have an element of turnover and are to be excluded from the total turnover for the purpose of computing exemption under section 10A. Gain from foreign fluctuation realized within stipulated period forms part of the sale proceeds and is directly related with the export activities and as such gain should be considered as income derived from export activities eligible for exemption under section 10A, in the year in which export took place. Assessee is entitled to exemption, under section 10A with reference to addition of disallowance of PF/ESIC payments as the plain consequence of the disallowance and add back made by the AO is an increase in business profits of the assessee.

CIT v Gem Plus Jewellery India Ltd ( 2010) 233 CTR (Bom) 248

S. 10B : Exemption-Manufacture or Production- Blending of tea-processing.

Assessee engaged in blending and packing of tea for export which is recognized as a 100 percent export oriented unit is entitled to exemption under section 10B notwithstanding deletion of the definition of "manufacture" w.e.f. 1st April 2001, from section 10B under which "processing" was covered by "manufacture".

Tata tea Ltd v Asstt. CIT (2010) 42 DTR (Ker) 251

S. 17 (2) – Perquisites - Salary from two employers - Fair rent - Rent control Act - Notional interest on deposit (S 15, Rule 3)

Where the assessee has received salary from two employers entire salary has to be considered while determining value of perquisite. As the paid up capital of employer was more than Rs 1 crore, accommodation in question was exempt from the provisions of Rent Control Act, and in such situation, fair rental value of accommodation could not be limited to standard rent, therefore in addition to monthly rent a sum equivalent to notional interest on deposits kept with land lord had to be taken in to account in computing fair rent in order to determine perquisite value of accommodation.

Pratim B. Mukerjea ( 2010) 39 SOT 268 (Mum).

S. 28 - Business income or property income- warehousing - (S. 22)

Income from warehousing would be business income if dominant purpose was commercial activity and it would be income from property if dominant object was to lease property.

Nutan warehousing P Ltd v Dy CIT (2010) 326 ITR 94 (Bom.)

S. 28(1) - Business income - Trading receipts - Trade advances (S. 4)

Assessee having admitted the liability in respect of outstanding trade advances received against exports which was enforceable under the law and eventually repaid the amount with RBI's permission, there was no cessation of liability and therefore the same cannot be treated as assessee's income, even though the assessee had utilized the said money for other purposes i.e. investment in real estate during lull period.

ITO v Eurostar Distilleries (P) Ltd (2010) 42 DTR (Coch)(TM) (Trib) 1

S. 28(i) : Business Income – Transaction in Shares – Stock in Trade – Investment (S. 45)

Assessee company having reflected its entire shareholding in various shares, including the shares in question, as stock-in-trade all along in the past and the revenue authorities having come to the finding of fact that the shares of the same company were purchased by the assessee by way of trading and not by way of investment, income derived from sale of shares is to be treated as business income and not as capital gains.

Ankita Deposits & Advances (P) Ltd. v. CIT (2010) 43 DTR 92 (HP)

S. 32 : Depreciation - Plant ready for use

Assessee company was entitled depreciation in respect of gas sweetening plant which was kept ready for use but could not be actually used due to lack of availability of raw material during relevant assessment years.

ACIT v Chennai Petroleum Corporation (2010) 125 ITD 396 (Chennai) (TM)

S.32 : Depreciation – BSE Membership Card – Intangible Asset – Eligibility.

BSE Card is an "intangible asset" and eligible for depreciation u/s 32(1) (ii).

Editorial : CIT v Techno Shares & Stocks Ltd (2010) 323 ITR 69 (Bom ) reversed. CIT v Techno shares & Stocks Ltd (2006) 101 TTJ 349 (Mum) upheld.

S. 32 : Depreciation- Block of assets - Individual machinery

Once it is found that assets are used for business, it is not necessary that all the items falling within the block of assets have to be simultaneously used for being entitled to depreciation.

CIT v. Sonal Gum Industries (2010) 42 DTR (Guj) 159.

S. 32 : Depreciation – Plant - Office interiors - S. 43 (3)

Designs and interior decoration work carried out in its office by the assessee carrying on the business of interior designing for the purpose of demonstrating its work to the prospective clients and exhibition purpose cannot partake the character of "furniture and fittings" but is "Plant" and is entitled to depreciation applicable to plant.

Asst CIT v Eskay Agencies (2010) 42 DTR (Chennai) (Trib) 366.

S. 36(1) (viia) - Bad debts- provision for bad debts- Banks

Banks which are entitled to claim deduction of provision for bad debts in terms of clause (viia) of section 36(1), are covered by the proviso to clause (vii) irrespective of the nature of advances with respect to

which the bad debt written off is claimed as deduction . Bad debt is allowable as deduction under section 36 (1) (vii), and the excess provision is allowable under section 36 (1) (viia).

CIT v South Indian Bank Ltd (2010) 42 DTR (Ker) (FB) 109.

S. 36 (1) (viii).Business expenditure-interest-guarantee obligation.

Applicant is entitled to deduction under section 36 (1) (viii) in respect of interest income derived by it from the bonds issued by the State Government in discharge of the guarantee obligation undertaken by it in respect of loans given by the applicant to the State Electricity Board. Payment premium received by the applicant on repayment of loan before maturity is income from long term finance for the purpose of deduction under section 36 (1) (viii).

Rural Electrification Corporation Ltd In Re. (2010) 42 DTR (AAR) 219

S.37 (1): Capital or Revenue Expenditure – Exchange Fluctuation Loss.

Exchange Fluctuation loss on pending forward contracts is an "accrued" loss.

DCIT vs. Bank of Bahrain & Kuwait (ITAT Mumbai Special Bench)

S. 37 (1) - Business expenditure-capital or revenue- brand image-entry in the books.

Expenditure on advertisement to create brand image, partly debited in profit and loss account and balance deferred over a period of three years, expenditure allowable as revenue expenditure, entry or absence of entry does not determine allowability of expenditure.

Dy CIT v Godrej Tea Ltd (2010) 4 ITR (Trib) 649 (Mumbai).

S. 37 (1). Business expenditure- capital or revenue- commission on the basis of production/sales.

Commission payable to another company based on the quantity specified products sold by assessee , for various services rendered by that company to the assessee for various services rendered by that company to the assessee to enable it to upgrade its machineries and to use better methods of production is revenue expenditure.

CRYSTAL Chemie (P) Ltd v Asst CIT (2010) 42 DTR (Ahd) (Trib) 197.

S.37 (1) : Business expenditure- Commission-

Commission was paid by account payee cheques, independent evidence were also produced such as service tax challans, and details of parties in respect of services were rendered. Commission was held to be allowable.

Mobile Communication (India) (P) Ltd v DY CIT (2010) 125 ITD 309 (Delhi).

S. 37 (1). Capital or revenue expenditure- Corporate membership fee to club.

Corporate membership fee to club, allowable as revenue expenditure. Expenditure wholly and exclusively for purposes of business and not towards capital account.

CIT v Samtel Color Ltd (2010) 326 ITR 425 (Delhi).

S. 37 (1).Capital or revenue expenditure-take over of business.

Amount paid to transfer for deprivation of business is revenue expenditure.

CIT v Hindustan Zinc Ltd (2010) 326 ITR 474 (Raj).

S. 37 (1) : Business expenditure- reimbursement of expenditure to father

Agreement entered into between the father and son wherein the son has agreed to reimburse the amount spent by his father towards his maintenance and education is unheard of under the provisions of the Hindu law and therefore son cannot claim for such payments.

CIT v Mahesh Bhupathi ( 2010) 43 DTR (Kar) 163.

S. 37 (1). Business expenditure- Expenses relating to fans associations-

The tribunal was justified in granting deduction to the extent of 80 percentage of the expenses claimed to have been incurred by cine actor on Rasigar Manrams (fans club/association). It is well known fact that popular cine artists promote their Rasigar Manrams for the purpose of promoting their films among the public at large and for that purpose, when it is claimed that substantial amount was spent towards dress, food etc at the time of release of the new films as well as the regular maintenance of the Rasigar Manram activities, it cannot be said that it was not part of their professional activities namely acting in cine filed.

CIT v A.Vijaykant (2010) 43 DTR (Mad ) 175.

S. 37 (1) Business expenditure- Retrenchment compensation-Closure of one unit.

When there was interdependence and a unity of control between the three units established by the existence of common management, a common business organization , administration and fund , closure of one unit did not involve the closure of the business and retrenchment compensation paid to workmen was therefore allowable deduction.

CIT v Pfizer Ltd (2010) 233 CTR (Bom) 521.

S. 41 (1) : Business income- Profit chargeable to tax- Remission or cessation of trading liability.

Sales tax Tribunal having upheld the decision of the assessing authority to grant credit of the payment made by the assessee to SICOM (Implementing agency) towards discharge of present value of the deferred sales tax liability and Dy CTO having issued a notice for the full amount, it cannot be said that there was a remission or cessation of liability and consequently section 41 (1) is not applicable.

SI Group India Ltd v Asst CIT (2010) 42 DTR 1 (Bom ) / 192 Taxman 91 (Bom).

S. 43(5): Capital Loss – Speculative Loss – Purchase and Sale of Shares (S. 45)

Assessee having entered into transactions of purchase and sale of shares and settled the same by delivery of shares through demat account, same cannot be regarded as speculative transactions and therefore, loss arising therefrom is not speculative loss, and it is to be treated as capital loss.

Jahanganj Cold Storage v. Asst. CIT (2010) 43 DTR 238 (Agra) (TM) (Trib)

S. 45: Capital Gains – Genuineness of Share Transactions

Assesssee having submitted copies of contract notes, bills, share certificates along with details of demand draft issued from the account of the broker to substantiate the sale of shares made by her, and the AO having failed to establish that the assessee had introduced her own unaccounted money in the shape of sale proceeds of shares, the transaction of sale of shares cannot be treated as non genuine for the reason that the broker made contradictory statements and the assessee was not allowed cross examination and therefore the sale consideration declared by the assessee is assessable as capital gain and not as income from undisclosed sources.

ITO v Bibi Rani Bansal (Smt.) (2010) 43 DTR 279 (Agra) (TM) (Trib)

S. 45 : Loss- long term and short term- sale of shares-consideration as Rs 1 per share as per memorandum of understanding.

Amount introduced by financial institution in terms of memorandum of understanding to discharge liability of company , amount received by promoter of company repayment of loan and not part of sale consideration on equity shares. Assessing officer directed to accept the long term and short term capital loss as computed by the assessee.

Voltas Ltd v Asst CIT (2010) 4 ITR (Trib) 721 (Bom).

S. 48: Capital Gains – Cost of Acquisition – Fair Market Value - S. 55(2)(b)

Market rate of agricultural land cannot be made the basis for ascertaining the fair market value of commercial land for computation of capital gains; fair market value of the land as on 1st April, 1981, estimated by the assessee by applying the cost inflation index to the sale value of land for stamp duty purposes in the reverse order was sustainable.

Jahanganj Cold Storage v. Asst. CIT (2010) 43 DTR 238 (Agra) (TM) (Trib)

S. 49 (1) (ii). Capital gains- Cost with reference to certain mode of acquisition- deemed gift.

The assessee contended that the expression "gift" in section 49 includes a deemed gift with in meaning of section 4 (1) (a) of Gift tax Act, 1958 and thus actual value of property, relinguished by her children should be taken as cost to her instead of taking in to consideration price paid by her under relinguishment deed . The Tribunal held that the definition in section 2 (xii) or section 4(1) of the 1958 Act, cannot be

imported for the purpose of construing the word "gift" occurring in section 47 (iii) , since the scope of the two Acts is different.

M. Suseela v ITO (2010) 125 ITD 253 (Visakhaptanam)

S. 50. Capital gains- Depreciable assets- S. 2 (11)

Where the CIT (A) and the Tribunal have drawn conclusion of the facts that the property sold by the assessee was not used as a Hotel and hence under section 50 (2), the set off of the sale proceeds of such property was available to the assessee against the purchase cost of new property falling under the same block of assets, no substantial question of law arises.

CIT v Scindia Investment (P) Ltd ( 2010) 233 CTR (Bom) 458.

S. 69A. Unexplained money-Gift from Donor residing USA- Creditworthiness not proved-No occasion or reason to gift.

As the explanation offered by the assessee was not satisfactory and as there was no direct confirmation from the Donor, credit worthiness of Donor was not proved through independent sources, particularly about his assets from record of US Revenue authorities, as there was no occasion or reason for giving gift , addition was confirmed as unexplained money.

Dinesh Babulal Thakkar v Asst CIT (2010) 39 SOT 332 (Ahd).

S. 80HHC: Deduction –Export earnings- Book Profits.-Company. (S 115JB).

Computing the book profits under S. 115JB have to be reduced by deduction "eligible" u/s. 80HHC & not "actual" deduction.

Ajanta Pharma Ltd. vs. CIT (Supreme Court)

Editorial: CIT v Ajanta Pharma Ltd ( 2009) 318 ITR 252 (Bom), reversed

View of special Bench CIT v Syncome Formulations (I) Ltd (2007) 292 ITR (AT) 144 (Mum) (SB) is upheld.

S. 80HHC : Deduction- profits of the business-receipt of insurance claim on account of stock in trade.

The insurance claim for loss of stock in trade must stand on the same footing as the income that would have been realized by the assessee on the sale of the stock in trade. Insurance claim on account of stock in trade does not constitute an independent income or a receipt of a nature similar to brokerage, commission, interest, rent or charges, hence such a receipt would not be subject to a deduction of ninety percent under clause (1) of Expln (baa).

CIT v Pfizer Ltd (2010) 233 CTR (Bom ) 521.

S. 80IA: Deduction – Adjustment – Brought Forward Losses

Assessee has option to opt for the initial years and the deduction under s. 80IA shall have relevance to that initial year only and conditionality under s. 80IA(5) shall be applicable from such initial year and therefore losses pertaining to year prior to the year in which the assessee opted to claim deduction could not be adjusted against the eligible income.

Rangamma Steels & Malleables v Asst. CIT (2010) 43 DTR 137 (Chennai) (Trib)

S. 80IA: Deduction – Windmill Power Generation – separate undertaking.

Co-generation plant (windmill) installed in different years has to be considered as a separate undertaking and the profit/loss cannot be clubbed in order to compute the deduction under s. 80-IA.

Rangamma Steels & Malleables v Asst. CIT (2010) 43 DTR 137 (Chennai) (Trib)

S. 80IB. Deduction- Industrial undertaking- job work done by others.

Assessee deriving income from its own manufacturing and from job works done for others , the assessee entitled for deduction under section 80IB.

CIT v Impel Forge and allied Industries Ltd (2010) 326 ITR 27 (P&H)

S. 80 HHC. Deduction- Export- Profits of business- gross or net interest.

While computing deduction under section 80HHC, 90 percent of gross interest is to be reduced from the profits of the business in terms of cl (baa) of Explanation to section 80 HHC.

CIT v Gem Plus Jewellery India Ltd ( 2010) 233 CTR ( Bom ) 248.

S.90. Double Taxation Relief- Royalty –Permanent establishment.( S, 9,195, 201, art 12.)

Where payment of royalty is made by a tax resident of singapore to another tax resident of Singapore, the same does not arise in India in terms of art. 12(7) of DTAA between India and Singapore; there being no economic link between the payment of royalty and PE in India, the royalty does not arise in India having regard to the provisions of art. 12(7) of the treaty.

Set Satellite (Singapore) PTE Ltd v Add. D IT (2010) 43 DTR 311 (Mum) (Trib)

S. 90. Double taxation relief- Permanent establishment- India- UK- International taxation- (art 5 (2), 7 (1) ).

Items specified in clauses (j) and (k) of art 5 (2) of Indo –UK , DTAA belong to a different genus of PEs i.e. extension of the basic rule set out in art 5 (1) and thus, these clauses are applicable independent of art 5 (1) . Assessee UK based partnership firm , having rendered legal service to certain clients whose

operations extended to India , and fulfilled the 90 days duration test envisaged in art 5 (2) (k), it did have a PE in India under art 5 (2 ) (k), and accordingly profits attributable to the PE are taxable under art 7.

Inclusion of "Profits indirectly attributable to PE" in article 7 (1) of Indo UK DTAA clearly incorporates a force of attraction principle in the tax treaty and therefore in addition to taxability of income in respect of the services rendered to an Indian Project which is similar to the services rendered by the PE is also to be taxed in India ,irrespective of the fact whether such services are rendered through the PE or directly by the general enterprise.

Linklaters LLP v ITO (2010) 132 TTJ (Mumbai) 20./42 DTR (Mumbai) (Trib ) 233.

S.90. Double taxation relief-Capital gains- DTAA-India- Mauritius. ( 2 (14), 47 (iv), art 13.)

Shares held by the applicant as investment in the books of accounts are treated as capital asset. Applicant is not liable to be taxed in India on the proposed transfer of said shares to its wholly –owned subsidiary company in India in view of section 47 (iv) or under art 13 of India Mauritius treaties.

Praxair Pacific Ltd In RE (2010) 42 DTR (AAR) 177.

S. 92C. Transfer pricing- Computation- arm's length price-International Taxation-applicability of proviso.

For the purpose of computing ALP, 5 percent variation from arithmetical mean is allowed and even after the amended provision , the CBDT circular no 12 of 2001 in this regard being not withdrawn is still applicable . AO was not justified in making addition by computing ALP without any material to suggest that price shown by the assessee is not justified.

Shanker Exporters v Addl CIT (2010) 132 TTJ (JP) 107/42 DTR (JP) (Trib) 441.

S. 115JB. Book Profits- Company- Deduction- Export- (S 80HHC).

While computing the book profit under section 115JB have to be reduced by deduction "eligible" under section 80HHC and not "actual" deduction.

Ajanta Pharma Ltd v CIT (Supreme court)

Editorial . CIT v Ajanta Pharma Ltd (2009/ 318 ITR 252 (Bom ) reversed.

View of Special Bench in CIT v Syncome Formulations (I) Ltd ( 2007) 292 ITR (AT) 144 (Mum) (SB) is up held.

S. 115JB.Book profit-Company- Deduction- Export- (S. 80HHC.).

For the purposes of cl(iv) of Expln 1 to section 115JB (2), the extent of the reduction admissible towards profit exempt under section 80HHC has to be computed strictly in accordance with the provisions of section 80HHC . Submission of the assessee that in applying the formula under sub section (3) of section

80HHC the expression "profits of the business" would need to be substituted by book profits cannot be accepted.

CIT v AL –Kabeer Exports Ltd (2010) 233 CTR (Bom ) 443.

Editorial : In view of ratio of Ajanta Pharma Ltd (SC) the judgment may not be good law.

S. 120.Jurisdiction- Non resident.

Where the assessee claims the status as non resident, then the AO (International Taxation) had the jurisdiction to make the assessment.

Manoj Kumar Reddy v ITO (2010) 42 DTR (Bang ) (Trib) 171.

S.132B (1) (i).Search and Seizure- Release of seized assets- after expiry of 120 days.

Petitioner having made an application within the permissible time limit for release of seized gold ornaments and jewellery explaining the nature and source of acquisition thereof, respondents have no authority to retain these assets after the prescribed period of 120 days by rejecting the petitioner's application after the expiry period, the respondent authorities are directed to release the seized ornaments and jewellery forthwith.

Mitaben R. Shah v DY CIT (2010) 42 DTR (Guj) 124.

S. 142A. Assessment- Audit-Special audit-remuneration.

The remuneration for special auditor to be fixed by the Commissioner as per the scale approved by the ICAI , subject to maximum of Rs 30 lakhs per year. Ad hoc remuneration of Rs.20 lakhs fixed by the Commissioner was set aside.

Dhanesh Gupta & Co v CIT (2010) 42 DTR (Del) 7.

S. 143 (2). Assessment-Notice-Block assessment .(S.158BC.).

Omission on the part of the assessing authority to issue notice under section 143 (2), within prescribed time cannot be a mere procedural irregularity and the same not curable , as the notice under section 143(2), was issued beyond the period of limitation ,the proceedings initiated pursuant to the notice are vitiated.

CIT v Pai Vaibhav Hotels (P) Ltd (2010) 42 DTR (Kar) 121.

S. 145. Assessment- income-addition-

Addition could not be made in the case of the assessee carrying on the business of purchase and sale of milk and milk products arbitrarily on the basis of difference in the fat content which is explained by the assessee ,when such fat content compared favourably with other dairy units in the same business.

Gayatri Dairy Products (P) Ltd v Asst CIT (2010) 42 DTR (Guj) 19.

S. 145 Method of accounting- Income –Accrual- advance receipt.

Where the Tribunal has affirmed the finding of fact of the CIT (A) that the change in the method of accounting with respect to accounting of commission, exchange and discount and locker rent on accrual basis though received in advance was bona fide and consistently followed and as such a change was not detrimental to the interest of the Revenue , no interference was called for.

CIT v Bank of Rajasthan Ltd (2010) 233 CTR (Bom) 530.

S. 147: Reassessment – Beyond Four Years – Material Facts.

Reopening beyond 4 years on basis of Supreme Court's judgement not justified if assessee has not failed to disclose material facts.

CIT vs. Baer Shoes (Madras High Court))

S. 147. Reassessment- full and true disclosure-after expiry of four years-issue subject matter of appeal.

Where there was a full and true disclosure of the facts by the assessee and a due application of mind by the AO, the condition precedent to the exercise of the jurisdiction to reopen the assessment beyond four years from the end of the relevant assessment year has not been fulfilled. Further very issue on which the assessment is sought to be reopened was canvassed in appeal and was determined in the appellate proceedings by the CIT (A), and therefore in terms of the second proviso to section 147 the assessment could not have been reopened.

Prashant Projects Ltd v Asst CIT (2010) 42 DTR (Bom) 257.

S. 147. Reassessment- Writ jurisdiction- maintainability.

Question as to whether in view of the failure to disclose the fact that exemption under section 10B had been allowed to the other EOU of the petitioner, the disclosure made by the petitioner can be said to be a true disclosure vis-à-vis its claim for exemption under section 10B in respect of the alleged new unit can conveniently dealt with in the proceedings under the IT Act, rather than a writ petition under art 226 of the Constitution of India, and therefore writ petition challenging the reopening of petitioner's assessment is dismissed .

Sociedade De Formento Industrail (P) Ltd v Asst CIT ( 2010) 43 DTR (Bom) 167.

S. 158BB.Block assessment- Undisclosed income-Firm- Partner.

In view of proviso to clause (b) of Explanation of section 158BB(1), if an income is earned by firm or on behalf of firm , whether disclosed or undisclosed ,it has to be assessed in hands of firm only and as such

an assessment cannot be made merely because said income is not disclosed in account of firm or it is pocketed by partner.

Asst CIT v K.T.Joseph ( 2010) 125 ITD 235 (Cochin ) (TM) 235

S. 158BD.Block assessment- Search and Seizure- Service of notice- Civil procedure code, rule 17 order V.

When there was no evidence of any local person having been associated with an identifying the place of business of the assessee and the report is not witnessed by any person at all , service of notice by affixture was not valid.

CIT v Naveen Chander (2010) 42 DTR (P&H) 156.

S. 194. Deduction of tax at source.-Dividend.

When payment is made to a non shareholder section 194 does not apply.

MTAR Technologies (P) Ltd v Asst CIT (2010) 39 SOT 465 (HYD).)

S. 195: Tax Deducted at Source – Shares – Foreign Company – Acquisition (S.9)

The purchase of shares of a foreign company by one non-resident from another non-resident attracts Indian tax if the object was to acquire the Indian assets held by the foreign company.

Vodafone International Holdings B.V. vs. UOI (Bombay High Court)

S. 195. Tax deduction at source-Legal expenses- GDR issue.

Payment of legal charges to the firm of solicitors in connection with the assessee's GDR issue is covered with in the ambit of "fees for technical services " as per provisions of section 9 (1) (vi) and is liable to TDS under section 195.

DY DIT v Tata Iron & Steel Co Ltd ( 2010 ) 42 DTR (Mumbai ) (Trib ) 204.

S.195(1): Tax Deducted at Source – Non Resident Recipient.

TDS obligation u/s 195(1) arises only if the payment is chargeable to tax in the hands of non-resident recipient.

GE India Technology Centre vs. CIT (Supreme Court)

S. 201 (1). Assessee in default- Limitation- TDS.

Maximum time limit for passing the order under section 201 (1 ) or (1A), is the same as prescribed under section 149 i.e. Four years or six years from the end of the relevant assessment year , as the case may be depending upon the amount of income in respect of which the person responsible is sought to be treated as assessee in default.

DY DIT v Tata Iron and Steel Co Ltd ( 2010) 42 DTR (Mumbai) (Trib) 204.

S. 234B – Settlement Commission – Liability to Pay Interest

Even if no interest under S. 234B was levied on the assessee in the original order of assessment, the assessee is liable to any interest for that portion of the income forming part of the total income as determined by the settlement commission words, "the interest shall be increased", would contemplate both a situation where interest had been levied on the assessee in the first instance, and a situation where no interest has been levied on the assessee in the original order of assessment.

Akbar Travels of India (P) Ltd. v Income tax settlement Commission & Ors. (2010) 43 DTR 49 (Bom.)

S. 237 : Refund- TDS- Amount recovered from employer (S. 240)

Where assessability of the perquisite value of stock option was held as not justified and not in accordance with the law by apex court, TDS recovered from assessee by employer company was refundable to the assessee.

Ramaa Sivaram (Smt) v Chief CIT (2010) 42 DTR (Mad) 215.

S. 245C - Settlement commission-power to grant immunity from penalty and prosecution (S. 245D)

Assessee can go before the settlement commission at any stage, even after investigation /detection of concealed income by the assessing authority. The matter remanded back to the settlement commission to consider the immunity from penalty and prosecution

CIT v The Vyaya Bank Ltd ( 2010) 42 DTR 97 (Kar)

S. 245C: Settlement Commission – Revision – Undisclosed Income.

Revision of undisclosed income in Settlement Application is not permissible.

Ajmera Housing Corporation vs. CIT (Supreme Court)

S. 245F: Settlement Commission – Rectification of Mistakes – Charge Interest

Settlement commission committed an error apparent by not following the decision of the special bench of Settlement Commission which was confirmed by the Gujarat High Court and therefore Settlement

Commission was justified in exercising the power under s. 154 and in allowing the miscellaneous application of the department for charging interest under s. 234B

Akbar Travels of India (P) Ltd. v Income tax settlement Commission & Ors. (2010) 43 DTR 49 (Bom.)

S.245HA - Settlement Commission-Constitutional validity- Abatement of proceedings

High Court passing an interim order that proceedings will not abate, held court's interim order is valid & it would decide the constitutional validity of section 245HA. Supreme court up held the interim order.

UOI v Rajendra Construction Co (2010) 217 Taxation 273 (SC).

S. 254 : Appellate Tribunal- Duties of Tribunal to consider facts.

Tribunal mechanically following decision of High Court which was not applicable to the facts, the court held that the order of Tribunal not valid and matter remanded to the Tribunal.

CIT v Damodar Mangalji Mining Co (2010) 326 ITR 437 (Bom).

S. 254 : Appellate Tribunal- Power- (Appellate Tribunal Rule 11.).

Tribunal can examine on its own any aspect of the subject matter of appeal, whether the same has been examined by the authorities below or not. In the appeal contesting the taxability of the assessee , a UK based firm in India it is open to the Tribunal to consider the issue of admissibility of benefits of Indo –UK treaty to the assessee though not raised earlier.

Linklaters LLP v ITO (2010) 132 TTJ (Mumbai) 20.

S. 254 : Appellate Tribunal- Order- Communication.

Members of the Tribunal do not become functus officio till the order is communicated to the parties, and before that they can change it as many times as they want.

Star Drugs & Research Labs Ltd v Asst CIT (2010) 42 DTR (Chennai)(TM) (Trib) 343

S. 254 : Appellate Tribunal- additional or new ground-

In the appeal filed by the department against deletion of disallowance of unaccounted expenditure under proviso to section 69C, it is entitled to raise a fresh plea before the Tribunal to consider the allowability or otherwise of the expenditure under section 37 (1) as the subject matter of the appeal remains the same.

Asst CIT v Amarnath Reddy ( 2010) 42 DTR (Chennai)(TM) (Trib) 449.

S. 260A. Appeal to High court- Jurisdiction-Territorial Jurisdiction of High court.(Income Tax (Appellate Tribunal ),Rules ,1963 –Rule 4 (1) note 4.)

Punjab and Haryana High court has no territorial jurisdiction to entertain an appeal arising out of an order passed by the assessing officer at Bangalore, though the registered office is shifted to Punjab.

CIT v Motorala India Ltd (2010) 326 ITR 156 (P&H).

S. 260A. Appeal to High Court-Jurisdiction-Territorial jurisdiction of High Court.(Income tax (Appellate Tribunal )Rules , 1963. R. 4 (1) note 4.)

Order passed by Tribunal in Chennai, and subsequent shifting of assesse's office to Punjab. Punjab and Haryana High Court has no jurisdiction to consider appeal.

CIT v H.F.C.L.Infotel Ltd (2010) 326 ITR 167 (P&H).

S. 260A. Appeal to High Court-issue pending before supreme court-

In view of the importance and recurring nature of issue and the reference being made by Division Bench doubting the correctness of judgment pending in appeal before the Supreme court, the court can proceed to hear the case instead of deferring the same.

CIT v South Indian Bank Ltd (2010) 42 DTR (Ker) (FB) 109/233 CTR (Ker) (FB) 214.

S. 263. Revision- Judgment of Jurisdictional High Court.

When a High Court declares the law on the subject, the declaration goes back to the date of enactment of that particular law so as to state that law from the date of its enactment itself, was in the manner decided by court subsequently. Commissioner was justified in revising the order under section 263 on the basis of judgment of jurisdictional High Court.

Intellinet Technologies India P . Ltd v ITO ( 2010) 5 ITR (Trib) 96 (Bang).

S. 263. Revision- ESI – PF - Lack of proper enquiry.

AO having not made any enquiry in relation to late payment of employee's contribution towards ESI and PF , by assessee , CIT was justified in invoking the provisions of 263 and setting aside the order of the AO for redoing the same.

Star Drugs & Research Labs Ltd ( 2010)42 DTR (Chennai) ( TM ). (Trib) 343.

S. 263. Revision-Lack of proper enquiry.

AO having allowed deduction of "interest" under section 40 (b), to the assessee firm without making any enquiry or applying his mind on the aspect as to whether the interest paid by the assessee firm on capital accounts is disallowable in view of the fact that the capital accounts of the partners and that the dividend income on shares is exempt and whether the dividend income received by the partners on such shares has been entered in the P&L account of the firm or not ,order passed by the AO was erroneous and prejudicial to the interests of the Revenue , and therefore the CIT rightly invoked the provisions of section 263.

Shiv Automobiles v ITO (2010) 43 DTR (Agra)(TM) (Trib) 345.

S. 263(1): Revision – Merger with Appellate Order .

CIT (A) having deleted the addition made by the AO on the basis of Assessee's mother's will, the order of the AO on the issue of addition on the basis of will got merged with the order of the CIT(A), and therefore, CIT had no jurisdiction to invoke the provisions of S.263 on the issue of examination of veracity of bequeathal under the will.

S. K. Jain v CIT (2010) 43 DTR 1 (Agra) (TM) (Trib)

S. 269 SS : Deposits - Receiving back money from borrower in cash (S. 271D)

Provisions of section 269SS and 271D, are not applicable in case where assessee received back money from borrower in cash and not advanced money or accepted loan in cash.

Dy CIT v Ankush Rao Ingle ( 2010) 39 SOT 263 (Hyd)

S. 271 (1)(c) - Penalty- concealment- purchase invoices was fictitious

Transaction of sale was not genuine and the assessee had claimed depreciation on non existent assets. It was further noticed that the assessee was a habitual concealer of income as it had been surrendering bogus depreciation year after year when it confronted with evidence of non existence of assets. On facts it was held that assessing officer was justified in imposing penalty upon assessee.

Asstt CIT v TVS Finance & Services Ltd ( 2010) 125 ITD 341 (Chennai)( TM ).

S. 271(1) (c) : Penalty-concealment- disallowance –deeming provisions.

In a matter of interpretation of provisions of the Act, merely because certain claim has been disallowed , and allowed in subsequent year ,penalty under section 271 (1)(c), cannot be levied.

AT&T Communication Services India (P) Ltd v Dy. CIT (2010) 42 DTR (Del) (Trib) 22.

S. 271(1)(c) : Penalty – Concealment – Addition - (S. 68)

Assessee having produced confirmations for both the alleged loans, it cannot be said that the explanation of the assessee was not bonafied or that material facts were not disclosed merely because aditions under s. 68 have been confirmed for the reason that the first creditor denied that the amount was given to assessee as a loan and there was serious doubt about the genuineness of the source of source of second loan and, therefore, Expln. 1 to 271(1)(c) is not applicable and penalty is not leviable.

Bhartesh Jain v ITO (2010) 43 DTR 320 (Del) (Trib)

S. 271 (1) (c) : Penalty- Concealment- Provision for bad debts and provision for diminution in value

Assessee claimed deductions on account of provision for bad debts and provision for diminution in value of investments in express violation of provisions of law hence the revenue authorities were justified in imposing penalty under section 271(1)(c).

Gujarat State Financial Services Ltd v Asst CIT ( 2010) 39 SOT 570 (Ahd).

S. 271B – Penalty - Delay in filing audit report. (S. 44B, 264 )

When audit reports as required under section 44AB for asst years 1990-91 to 1993-94 had been obtained before due date and the same were furnished along with the return of income, penalty under section 271B was not leviable, since the amendment in section 44AB requiring to furnish the audit report by the due date was incorporated by the Finance Act, 1995, w.e.f. 1st July 1995 only.

S. V. Pathak & Company v N. C. Tiwari CIT ( 2010) 42 DTR (Bom) 227

S. 271D – Penalty - Deposit or loan - Transaction bonafide- Technical default (S. 269SS)

Accepting the share application money of Rs.20,000/-, in cash, as the transaction was bonafide, the default being technical cancellation of penalty by the tribunal was held to be justified.

CIT v Speedways Rubber Pvt Limited (2010) 326 ITR 31 (P&H).

S. 273A. Penalty- waiver- interest.

Assessee voluntary filing of return, waiver application for interest was rejected. The court held that rejection of application solely for failure to pay interest was not justified when no notice was issued by the department under section 139 or 148.

Prakash Kumari (Smt) v CIT ( 2010) 326 ITR 82 (Bom)

Writ-Clearance from COD - Order of settlement commission - writ petition by CIT.

Clearance from COD is not necessary to maintain the writ petition filed by the Revenue to quash the order passed by the settlement commission as the lis is between the revenue and the first respondent (assessee) and not between the petitioner and the settlement commission. CIT has implied powers to file writ petition questioning the order passed by the settlement commission.

CIT v The Vyasa Bank Ltd (2010) 42 DTR (Kar) 97.

Interest Tax.1974.

S. 2 (5). Interest Tax- Chargeable- refinancing operations.

Interest earned on refinancing operations to be included from chargeable interest.

CIT v Punjab State Industrial Development Corporation (2010) 326 ITR 390 (P&H).

Service tax-

Though software is "goods", its supply may be a "service" and not a "sale".

Infotech Software Dealers Association vs. UOI (Madras High Court).

Wealth Tax.

S. 4 (7). Wealth tax – asset - Flat in society- registration.

Assessee purchasing the flat before 1-4-1993, and admitted as member of society. Transfer not registered in books of society, not relevant, value of flat includible in net wealth of assessee.

Bennett Coleman and Co Ltd v Asst CIT (2010) 326 ITR 447 (Bom).

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