Wednesday, November 30, 2011

Some important cases


If the expenditure in question has a relation or connection with or pertains to exempt income, it cannot be allowed as a deduction even if it otherwise qualifies under the other provisions of the said Act.

Information on tax matters to be sought by field officers of the Income Tax Department from countries/jurisdictions with which India has Double Taxation Avoidance Agreement (DTAA) or Tax Information Exchange Agreement (TIEA) under the relevant “Exchange of Information” Article of DTAA/TIEA

Merely because the assessee made claim of deduction under a wrong head, would not mean that the claim was false for imposition of penalty under s 271(1)(c) — as held by DelHC in CIT v Sumangal Overseas Ltd — In favour of: The assessee.

No disallowance under s 14 or Rule can be made unless AO records a finding that the assessee’s calculation is wrong — as held by DelHC in Maxopp Investment Ltd v CIT — In favour of: Others.

Parties to the appeal shall not be entitled to produce additional evidence, either oral or documentary, before the Tribunal as a matter of right as — held by PHHC in CIT v Avinash Chander Ghai HUF and Others — In favour of: The assessee.

Powers under s 250(4) and Rule 46A — If the CIT(A) exercises his powers under s 250(4) to call for additional evidence, the AO need not be given an opportunity to show-cause; however, if the CIT(A) acts on an application under r 46A, then the requirement of giving the AO an opportunity as per r 46A(3) is mandatory — as held by DelHC in CIT v Manish Build Well Pvt Ltd — In favour of: Others.

Retail space rentals in India may go up as big global players try to expand rapidly in the country in the medium to long term following the government's decision to relax FDI norms in the sector further, according to realty consultants. "A lot of international brands will look at entering India and scout for retail spaces.

The government proposes to establish a National Financial Reporting Authority (NFRA) for better monitoring of corporate financial management, going by the revised Companies Bill, 2011. NFRA is, in fact, the renamed version of the earlier proposed National Advisory Committee on Accounting and Auditing Standards.

The government today said that it is concerned about frequent hike in prices of petroleum products but does not plan to reduce taxes on oil goods. "No, Sir. There is no such proposal (to reduce or withdraw taxes imposed on petroleum products) at this stage," Minister of State for Finance S S Palanimanickam told Lok Sabha. The Government, he added, was concerned about the frequent hike in prices

The omission to apply the judgment of the Supreme Court is a glaring and obvious mistake of law which can be corrected under s 154 — as held by DelHC in CIT v Satish Kumar Agarwal — In favour of: The revenue.

When the shareholding of the assessee in the company who has advanced the payments to the assessee is less than 10%, provisions of s 2(22)(e) is not attracted — as held by AhdTrib in ACIT v Medical Technologies Pvt Ltd — In favour of: The assessee.

Where AO has granted depreciation on aircraft owned by assessee at 40% in accordance with the provisions of the Rule, therefore, such grant of depreciation cannot be considered to be a claim not supported by law, as the department cannot straightaway show that such claim of depreciation was not in accordance with the law and, in such, circumstances, the powers under s 263 could not be invoked — as held by DelTrib in SRC Aviation (P) Ltd v DCIT — In favour of: The assessee.

Where the original assessment order dated 28 February 1997 was set aside by the ITAT, once the fresh assessment order is passed dated 24 December 2006, the demands arising therefrom would not relate back to the date of service of the original demand notice and interest under s 220(2) would be leviable after thirty days of the service of the demand notice dated 24 December 2006 — as held by MumHC in CIT v Chika Overseas Pvt Ltd — In favour of: The assessee.

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