Sunday, November 20, 2011

Compilations of case law: STATUS OF ASSESSEE ; AOP / BOI

Distinction between AOP & BOI
CIT Vs Deghamwala Estates (Mad) 121 ITR 684

Business carried on by individual – Death – Business continued by wife on her behalf and on behalf of minor children – BOI.
Meera & Company etc. Vs CIT (SC) 224 ITR 635
CIT Vs Renuka Ganguly & Ors. (Cal) 240 ITR 889
Sakinabai Ibrahim & Sons Vs CIT (Mad) 101 Taxman 473

AOP consisting of an adult and a minor – No evidence that guardian of minor had given his consent to minor's membership in AOP – AOP was not valid.
Bhupindra Food and Malt Industries Vs CIT (HP) 229 ITR 496

Business conducted by Mohammedan – Heirs desiring to continue business – suit for partition – Receivers appointed – Status AOP
Mohamed Noorullah Vs CIT (SC) 42 ITR 115

Agreement to share the prize money was entered into between A & O after A had already purchased the prize winning lottery ticket – There was no AOP as there was no consensus ad idem.
CIT Vs O.K. Arumugham Chettiar & Anr.(Mad) 224 ITR 391

By deed of indenture R gifted her 50% of 1/3 share of a trust to her sons M & J on principle of joint and survivorship as a BOI – Status is BOI – Tax at normal rates – Sec.167B applicable to AY 89-90
M.J. Associates Vs ACIT (ITAT, Ahd) 91 Taxman (Mag) 225

Mutual concerns – Automobile association – Publishing magazine – Advertisement charges received from member & non-members – Profit of association chargeable to IT.
Automobile Association of Bengal Vs CIT (Cal) 69 ITR 878

Principle of mutuality is confined to transactions with members – Interest on FD with banks is assessable income.
Sports Club of Gujarat Ltd. Vs CIT (Guj) 171 ITR 504
Rajpath Club Ltd.Vs CIT (Guj) 211 ITR 379
CIT Vs Bangalore Club (Kar) 287 ITR 263

Floor charges collected from non-members on the basis of transaction in purchase and sale of shares by them – No mutuality – Taxable.
Investors Club Vs ITO (ITAT, Coch) 84 ITD 273

House Property owned by member's club – No rent received – Not occupied by Club for business or vocation – Principle of mutuality does not arise – Annual value liable to tax.
Chemford Club Ltd. CIT Vs (Del) 200 ITR 493

Mutual concern - complete identity between contributors and participators in fund mandatory - Right to contribute not enough
Wankaner Jain Social Welfare Society Vs CIT (Mad) 260 ITR 241


Amalgamation of subsidiary companies with assessee-company – Property, rights and powers of subsidiary companies transferred and vested in assessee-company – All liabilities and debts of subsidiary companies to become liabilities and debts of assessee Company as from take of amalgamation – Net assets of amalgamating companies taken over by assessee much less / more in value than value of shares held by assessee in subsidiary companies – Diff. is not capital loss or capital gains
Shaw Wallace & Co. Ltd. Vs CIT (Cal) 119 ITR 399
Forbes Campbell & Co. Ltd. Vs CIT (Cal) 150 ITR 529
Alembic Chemical Works Co. Ltd. Vs ACIT (ITAT, Ahd) 72 ITD 251

AY 84-85 – PY ended on 1.1.84 – Entire business of assessee taken over by holding company under an agreement dated 10.12.83 and registered deed executed on 29.12.83 – Business carried on by assessee and not holding company during the year – income assessable in the hands of assessee company.
Ponds Exports Ltd. Vs ITO (ITAT, Mad) 58 ITD 417

Closure of business of amalgamating company – No rehabilitation of workers of amalgamating company – carry forward and set off of loss of amalgamating company not allowed against profits of amalgamated company.
Indian Metals & Ferro Alloys Ltd,. Vs union of India & ors. (Ori) 262 ITR 553

Unabsorbed depreciation of amalgamating company added to the opening Written Down value of it for the year of depreciation and the claim of depreciation for the year was worked out on this basis – This was claimed as set off against profits of amalgamated company – Not correct – Expl. 2 to Sec. 43(6)© will apply
ACIT Vs McDowell & Co. Ltd. (ITAT, Bang) 83 ITD 221

During the period of effective date as provided in the scheme of amalgamation to the date of the order of High Court approving such scheme, amalgamating company is deemed to have conducted business on behalf of the amalgamated company
Marshall Sons & Co. (India) Ltd. Vs ITO (SC) 223 ITR 809

When two companies are merged and are so joined as to form a third company or one is absorbed into one or blended with another, the amalgamating company loses its identity and the amalgamated company acquires a new status
Saraswati Industrial Syndicate Ltd. Vs CIT (SC) 186 ITR 278

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