Monday, November 28, 2011

Direct Tax Laws Oct 19 & 20

Assessability of rental income from plinths and godowns as business income - [2011] 15 taxmann 292 (Delhi - Trib.)

Conversion of aluminium sheets into bottle caps is manufacturing, eligible for deduction under section 80-IB - [2011] 15 taxmann 314 (Chennai - Trib.)

Co-ordinated investigation is valid ground for transfer of case under section 127 from one Assessing Officer to another.Writ petition is not maintainable against notice issued under section 153A - [2011] 15 taxmann 311 (Rajasthan)

Date of commencement of housing project is date when assessee actually started development and not date when project was first approved by local authoritymercial use of residential units by purchaser would not disentitle developer benefit of section 80-IB - [2011] 15 taxmann 287 (Mumbai - Trib.)

Entire amount received towards Duty Entitlement Pass Book (DEPB) and Duty Free Remission Scheme (DFRS) inclusive of face value premium would constitute profit chargeable under section 28(iiid) and section 28(iiie) - [2011] 15 taxmann 317 (Amritsar - Trib.)

Expenses incurred wholly and exclusively on prospecting of minerals are to be amortised and rest of unconnected expenses are eligible for deduction in normal course - [2011] 15 taxmann 288 (Mumbai - Trib.)

High Court has power to deal with substantial question of law not formulated at time when appeal was admitted - [2011] 15 taxmann 324 (Madras)

If sufficient reserve has been created on date of claiming deduction of investment allowance, deduction would be allowed to assessee - [2011] 15 taxmann 294 (Karnataka)

If tax is deducted at source but there is only some shortfall due to difference of opinion about provisions applicable, assessee can be declared to be an assessee-in-default under section 201 but no disallowance can be made invoking section 40(a)(ia) - [2011] 15 taxmann 289 (Kolkata - Trib.)

In course of appellate proceedings, Commissioner (Appeals) can appoint independent Government approved valuer so as to determine cost of construction incurred by assessee - [2011] 15 taxmann 304 (Jodhpur - Trib.)

In order to get benefit of section 54F, assessee should, inter alia, purchase a house and merely because he has included name of his wife and purchased property in joint names would not make any difference - [2011] 15 taxmann 307 (Delhi)

Interest expenditure incurred on loan taken for purchase of motor car cannot be included while working out fringe benefits under section 115WB - [2011] 15 taxmann 300 (Pune - Trib.)

Legal effect of transaction cannot be displaced by probing into 'substance of transaction' and taxing authority must not look at matter from their own viewpoint but that of a prudent businessman - [2011] 15 taxmann 306 (Punjab and Haryana) (FB)

Levy of penalty where certain addition was made to assessee's income only on account of divergent views taken by revenue authorities - [2011] 15 taxmann 302 (Delhi - Trib.)

Mere denial of assessee's claim of set off of business loss against capital gains would not be ground to levy penalty under section 271(1)(c) - [2011] 15 taxmann 303 (Delhi - Trib.)

No addition under section 68 was warranted where four companies had purchased shares of assessee-company and had issued confirmation letters regarding purchase of shares from assessee and had also quoted their PAN - [2011] 15 taxmann 316 (Jabalpur - Trib.)

Once Assessing Officer records a prima facie reason that certain income has escaped assessment, in such a case, mere fact that for earlier assessment years issue in dispute has been decided by Commissioner (Appeals) in assessee's favour cannot be a fetter to Assessing Officer in exercising his jurisdiction under section 147 - [2011] 15 taxmann 318 (Chennai - Trib.)(TM)

Premium paid by assessee-company on keyman's insurance policy of two of its director who were rendering their services in course of carrying on its business, was to be allowed as deduction - [2011] 15 taxmann 291 (Delhi - Trib.)

Rule 63 of Schedule II to Act does not contemplate order of confirmation of sale to be a conclusive order and, thus, an appeal lies against it under rule 86 of Schedule II to Act - [2011] 15 taxmann 310 (Allahabad)

Subsidy received from Government does not partake character of payment either directly or indirectly to meet actual cost of an asset under section 43(1) - [2011] 15 taxmann 320 (Allahabad)

Sufficiency of materials cannot be gone into by High Court in case of search proceedings and, thus, once there is a rational opinion and application of mind, High Court in its writ jurisdiction cannot interfere in said proceedings - [2011] 15 taxmann 305 (Madhya Pradesh)

Tribunal is duty bound to consider reasons given by appellate authority for its decision before upsetting order made by appellate authority - [2011] 15 taxmann 315 (Gujarat)

Where assessee had neglected opportunity provided by Assessing Officer to explain adverse documents, it was necessary for Commissioner (Appeals) to have strictly complied with rule 46A of Income-tax Rules, 1962 while accepting additional evidences in appeals - [2011] 15 taxmann 297 (Mumbai - Trib.)

Where assessee had produced loan confirmation certificates signed by creditors, disclosing their permanent account numbers and address, loans taken by assessee could not be held to be not genuine without giving further opportunity to assessee to explain information on basis of which such conclusion was arrived at - [2011] 15 taxmann 298 (Calcutta)

Where assessee having discontinued its business of manufacturing of containers, converted its factory land into stock in trade as to carry on new business of real estate development, it was entitled to benefit of section 45(2) in respect of aforesaid conversion - [2011] 15 taxmann 286 (Mumbai - Trib.)

Where assessee maintained suspense account, only those of liabilities, which had been found to have crystallised within previous year and paid out of suspense account should have been allowed - [2011] 15 taxmann 301 (Madras)

Where assessee transferred its distributorship of products of 'A' Ltd. to one 'S' along with its dealership network, list of clients, services of skilled employees, etc., commission income earned by assessee in terms of said agreement was to be brought to tax as 'business income' - [2011] 15 taxmann 296 (Delhi - Trib.)

Where assessee, a London based recognized insurance broker, acted as an intermediary in process of finalization of reinsurer, suggesting various options to Indian insurance company for their consideration and acceptance, it could not be said that assessee was providing any technical service to Indian company and, therefore, payment in respect of same could not be brought to tax in India - [2011] 15 taxmann 285 (Delhi - Trib.)

Where assessee-company engaged in business of software development and deployment, entered into an agreement with 'D' Ltd. to provide technical advisory services and assistance for designing and development of its software product, amount paid by assessee to 'D' Ltd. allowable as business expenditure - [2011] 15 taxmann 319 (Delhi - Trib.)

Where assessee-firm in course of search proceedings declared certain undisclosed income and, thereupon paid tax thereon by filing a revised return, it had complied with provisions to clause (2) of Explanation 5 to section 271(1)(c) - [2011] 15 taxmann 323 (Karnataka)

Where assessee-HUF who was a partner in a firm had been found to have made payments of Rs. 30 lakhs to partners of firm and assessee had accumulated said sum year after year in cash from agriculture, said sum could not be treated as unexplained investment under section 69 - [2011] 15 taxmann 322 (Karnataka)

Where Commissioner (Appeals) having accepted possession and sale of cattle, sheep and goats by assessee, deleted addition made under section 69A, Tribunal in appellate proceedings could go into question as to whether sale transactions were genuine or not, but not as to sale price - [2011] 15 taxmann 321 (Andhra Pradesh)

Where education trust exists solely for educational purpose and its annual receipt is less than Rs. 1 crore, it cannot be denied section 10(23C) exemption even if it has not obtained registration under section 12A - [2011] 15 taxmann 312 (Chandigarh - Trib.)

Where issue relating to bad debts was specifically raised in original assessment proceedings and on receiving explanation from assessee it was allowed it could be said that there was no failure on part of assessee to disclose fully and truly all material facts necessary for purpose of assessment and therefore, Assessing Officer could not reopen assessment on ground that bad debt was not correctly written off under section 36(1)(vii) by assessee - [2011] 15 taxmann 290 (Bombay)

Where object of assessee-trust was to establish a number of educational institutions in a brand name and run those institutions on commercial lines, it could not be regarded a charitable activity - [2011] 15 taxmann 313 (Chennai - Trib.)

Where stamp valuation authority has adopted higher valuation of a property for payment of stamp duty, same cannot be a basis to conclude escapement of income in hands of purchaser - [2011] 15 taxmann 293 (Jodhpur - Trib.)

Where Tribunal directed Assessing Officer to determine short-term capital gain on sale of a trade mark in respect of which cost of acquisition itself was indeterminable, said direction of Tribunal being unworkable, was to be expunged - [2011] 15 taxmann 299 (Delhi - Trib.)

Without affording an opportunity of hearing assessee's application seeking registration under section 12AA could not be rejected on ground that even though objects of assessee-trust were charitable in nature, yet it had not carried out any charitable activities during relevant period - [2011] 15 taxmann 295 (Jaipur - Trib.)

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