Showing posts with label Compilations of case law. Show all posts
Showing posts with label Compilations of case law. Show all posts

Sunday, December 18, 2011

Compilations of case law : SALE OF LAND

INCOME – CHARGEABILITY AND COMPUTATION


SALE OF LAND



When a person acquires land with a view to selling it later, after developing it, he is carrying on activity resulting in profit and the activity can only be described as a business venture.


Raja J. Rameswar Rao Vs CIT (SC) 42 ITR 179



Joint purchase of land by 4 persons and joint sale thereof – Land fit only for house sites – Adventure in the nature of trade.


Smt. Parvathi Devi & Ors. Vs CIT (AP) 164 ITR 675



Purchase of large plot of land with a dilapidated building – sale after converting into smaller plots – No evidence that purchase of land made with intention to re-sell – Profit assessable as capital gain.


CIT Vs Mohammed Mohideen (Mad) 176 ITR 393



Sale of land after plotting – Business venture


CIT Vs R. Ramaiah & ors. (Kar) 146 ITR 39


P. Kannan Vs CIT (Kar) 154 ITR 441


Indramani Bai & Another Vs Addl. CIT (SC) 200 ITR 594


Addl. CIT Vs Chikkaveerayya Lingaiah (Kar) 164 ITR 41


Raja Rameswara Rao Bahadur Vs CIT (AP) 32 ITR 552; (SC) 42 ITR 179


G. Venkataswami Naidu & Co. Vs CIT (SC) 35 ITR 594.



Agriculturist purchasing lands in a series of transactions and selling them within a reasonably short period – adventure in the nature of trade.


Hemchand Hirachand Shah Vs CIT ( Guj ) 206 ITR 55



Land purchased had potentiality of being developed into building site – No agricultural operations were carried out on land by the assessee – Adventure in the nature of trade.


Badrilal Bholaram Vs CIT (MP) 139 ITR 207


CIT Vs B. Narasimha Reddy (Kar) 150 ITR 347


CIT Vs M. Krishna Rao (AP) 120 ITR 101


Sawandas Devram Vs CIT (MP) 150 ITR 576

Wednesday, December 14, 2011

Compilations of case law : RECEIPTS DURING DISCONTINUANCE OF BUSINESS

INCOME – CHARGEABILITY AND COMPUTATION


RECEIPTS DURING DISCONTINUANCE OF BUSINESS



No purchase and sale after certain date and employees discharged- Mere realization and payment for some time – Discontinuance of business


Ghanshyam Das Gangadhar Vs CIT (Pat) 19 ITR 349



When assessee's business has come to a close or when the assessee let out the assets with the intention of closing the business, the property which at one time was a commercial asset would cease to be so and the income from letting out of such an asset would not be business income.


New Savan Sugar & Gur Refining Co. Ltd. Vs CIT (SC) 74 ITR 7


Metal Products of India Vs CIT (P&H) 293 ITR 618



After discontinuing business, machinery and vehicles let to sister concerns - Hire charges received is income from other sources – Let out property with amenities – Air conditioning charges received is income from other sources.


Express News papers Pvt. Ltd. Vs CIT (Mad) 227 ITR 325


Madras Silk & Rayon Mills P. Ltd. Vs ITO & Anr.(Mad) 262 ITR 122 – rental income


from factory building.



Assessee not carrying on any business during the year – lease rent of machinery – Other Sources income.


CIT Vs K. Narendra (Del) 246 ITR 579



Business closed and quarters attached to factory let out – Rental income – Not business income.


CIT Vs Ramdas & Sons (Patna) 236 ITR 786; 225 ITR 416


The Saswad Mali Sugar Factory Limited Vs CIT (Bom) 236 ITR 706


Narain Swadeshi Weaving Mills Vs Comm. Of Excess profits Tax (SC) 26 ITR 765 (Plant & Machinery let out)


Universal Plast Limited etc. Vs CIT (SC) 237 ITR 454



Monday, December 12, 2011

Compilations of case law : RECEIPT OF RENT

INCOME – CHARGEABILITY AND COMPUTATION


RECEIPT OF RENT



Assessee is the proposed purchaser of property – Rent received before actual purchase of property – Other Sources income.


Peninsular Plantations Ltd. Vs CIT (Ker) 227 ITR 490



Income from letting out kutcha plinths on open land to FCI – Income from other sources


Gowardhan Das & Sons Vs CIT (P&H) 288 ITR 481



Income from leasehold property, without raising a structure thereon – Income from Other Sources.


CIT Vs Supreme Credit Corporation Ltd. (Cal) 230 ITR 700



Letting out of premises to different tenants and collection of rent – Not business activity – Only house property income.


CIT Vs Indian Metal & Metallurgical Corporation (Mad) 215 ITR 424


Shambu Investment P. Ltd. Vs CIT (SC) 263 ITR 143


Indian Overseas Bank Vs CIT (Mad) 246 ITR 206


CIT Vs Chennai Properties & Inv. Ltd. (Mad) 274 ITR 117



Owner of the property – Income from letting out will fall under House Property income.


CIT Vs Podar Cement P. Ltd. & others (SC) 226 ITR 625


S.G. Mercantile Corporation (P) Ltd. Vs CIT (SC) 83 ITR 700


D.R. Puttanna & Sons (P) Ltd. Vs CIT (Kar) 162 ITR 468



Owner of property is liable to House Property income – It does not depend on the power of the owner to let the property as also not depend on the capacity of the owner to receive the rent.


D.M. Vakil Vs CIT (Bom) 14 ITR 298


Indian City Properties Ltd. Vs CIT (Cal) 55 ITR 262


East India Housing and Land Dev. Trust Ltd. Vs CIT (SC) 42 ITR 49



A single act of constructing a godown and letting it out year after year – Not a business.


CIT Vs Veerabhadra Industries (AP) 240 ITR 5



If bifurcation of rent and service charges is there in lease deed itself, assess rent as House Property income and service charges as income from other sources.


CIT Vs Sankaranarayana Hotels (P) Ltd. (Kar) 201 ITR 138



Business premises sub-leased to bank – Merely because advancement of loan by that Bank to the firm is mentioned in the same agreement, it cannot be said that activity of leasing was closely connected with loan – Rental income is income from House Property.


CIT Vs Arvindkumar Odhavji (Bom) 213 ITR 551



Godown rent received was incidental to contract business – Not property income.


Mercantile and Marine Services Vs CIT (Ker) 233 ITR 257



Letting out godowns and factories – Rental income is House Property income.


Narayandas Kishandutt Vs CIT (MP) 149 ITR 636


Property under mortgage – owner derives some benefit from property – Annual value liable to tax


S. Ujjannappa Vs CIT (Kar) 255 ITR 455



Sale of flat to Non-Resident having not materialized due to refusal by Reserve Bank of India – Flat let out – House property income.


Pragati Construction Co. Vs DCIT (ITAT, Del) 60 ITD 541



Lights, fans, partitions, Lifts etc. are part and parcel of building – income from letting out – House Property income.


ACIT Vs Farida Begum Tazudeen (ITAT, Mad) 63 ITD 298


Neelam Cable Mfg. Co. Vs ACIT (ITAT, Del) 63 ITD 1



Assessee is owner of building on leasehold land – Income from House Property eventhough letting out is an objective of company.


Maharashtra Fert. & Chem Vs CIT (Bom) 150 ITR 317


Tinsukia Development Corporation Ltd. Vs CIT ( Cal ) 120 ITR 466


CIT Vs Mithila Properties Publication & Contractor Enterprises P. Ltd. ( Pat ) 228 ITR 713



License fee received for allowing film shooting – House Property income.


B.M. Chinai Vs ITO (ITAT, Mum) 63 ITD 77



Construction of hotel not completed during the year nor hotel business commenced – Rental income received from property assessable under " Income from House Property "


CIT Vs Hotel Ratanada International P. Ltd. (Raj) 293 ITR 557



Assessee engaged in development, construction, sale and lease of immovable property – Properties treated as stock-in-trade – Rental income earned is business income.


CIT Vs Neha Builders P. Ltd. (Guj) 296 ITR 661

Saturday, December 10, 2011

Compilations of case law : HEAD OF INCOME

INCOME – CHARGEABILITY AND COMPUTATION


HEAD OF INCOME



Under which head, the transaction to be assessed ?



RECEIPT OF INTEREST



Interest earned before commencement of business on short term deposit with banks out of term loan secured from financial institutions - Other Sources


Tuticorin Alkali Chemicals and Fertilizers Limited Vs CIT (SC) 227 ITR 172


CIT Vs Petrofils Co-operative Ltd. (Guj) 241 ITR 139


CIT Vs Cochin Ship Yard Ltd. (Ker) 158 CTR 208


CIT Vs Rassi Cement Ltd (AP) 232 ITR 554


South India Shipping Corporation Vs CIT ( Mad ) 240 ITR 24


CIT Vs Kisan Sahakari Chini Mills ( All ) 280 ITR 617


Chandpur Sugar Co. Ltd. Vs CIT ( All ) 280 ITR 612


Bokaro Steel Ltd. Vs CIT (Patna) 170 ITR 545


CIT Vs Coromandel Cements Ltd, (SC) 234 ITR 412


CIT Vs Autokast Ltd. (SC) 248 ITR 110


Consolidated Fibres & Chemicals Ltd. Vs CIT (Cal) 273 ITR 353



Interest earned on short term deposits of share capital – Other sources income – cannot be set off against interest paid on capital borrowed for setting up industry.


Eskayef Ltd. Vs DCIT (ITAT, Bang) 71 ITD 419


Godavari Fertilizers and Chemicals Ltd,. Vs CIT (AP) 198 ITR 388


CIT Vs Hindustan Electro Graphites Ltd. (MP) 177 ITR 465


CIT Vs Tamil Nadu Industrial Development Corpn. Ltd. (Mad0 189 ITR 670


CIT Vs New Central Jute Mills Co. Ltd. (Cal) 118 ITR 1005


CIT Vs V.P. Gopinathan (SC) 248 ITR 449


CIT Vs Manipur Spinning Mills Corpn. Ltd. (Gau) 226 ITR 551



Money lying idle deposited in Bank – Interest – Other Sources.


Collis Line P. Ltd. Vs CIT (Ker) 135 ITR 390


Traco Cable Co. Ltd. Vs CIT (Ker) 72 ITR 503


Madhya Pradesh State Industries Copn. Ltd. Vs CIT (MP) 69 ITR 824


CIT Vs Cochin Refineries Ltd (Ker) 154 ITR 345


CIT Vs L and T McNeil Ltd. (Bom) 202 ITR 662


IAC Vs S.Khushwant Singh (ITAT, Del) 18 ITD 540


CIT Vs Monarch Tools (Mad) 260 ITR 258


CIT Vs Assam Plantation Crops Dev. Corpn. Ltd. (Gau) 221 ITR 392



Interest on debentures issued by co-operative land mortgage bank – Assessable as income from Other Sources.


CIT Vs Lakshmi Vilas Bank Ltd.(Mad) 234 ITR 796



Unpaid sale consideration – can be treated as loan – interest accruing thereon – Income from other sources.


Mount Stuart Tea Estate & Amar Coffee Plantation Vs CIT (Mad) 239 ITR 489



Taking FDRs and pledging them as securities for taking loans are two separate transactions – FDRs pledged as securities in bank for taking loans for business – Interest on such FDRs is Income from Other Sources


DCIT Vs Allied Construction (ITAT, Del-SB) 105 ITD 1

Thursday, December 8, 2011

Compilations of case law : SALE OF SHARES

INCOME – CHARGEABILITY AND COMPUTATION


SALE OF SHARES



Cumulative effect of all factors to be seen – It is Business income if in earlier years, sale of shares treated as business of assessee - Nothing on record to show that purchase of shares was for non-commercial purposes Purchase of shares not for getting controlling interest of company - Shares sold within a short period - Manner in which shares are shown in the Balance sheet is not conclusive


CIT Vs Karam Chand Thapar & Bros P. Ltd. (SC) 176 ITR 535


New Era Agencies Pvt. Ltd. Vs CIT (SC) 68 ITR 585


CIT Vs Amalgamations P. Ltd. (Mad) 108 ITR 895



Magnitude of purchase and sale of shares shows that it is business income


Raja Bahadur Visheshwara Singh & Ors. Vs CIT (SC) 41 ITR 685



Dealing in shares authorized by Article of Association of Company – Business income


Dalmia Cement ltd. Vs CIT (Pat) 12 ITR 50



Memorandum of Association of Company did not authorize purchase and sale of shares – Purchased shares to get controlling interest of company – Capital Gains arises on transfer


Kishan Prasad & Co. Ltd. Vs CIT (SC) 27 ITR 49



Purchase and sale of shares a solitary transaction – No dividend received – Capital gains arises on transfer


CIT Vs Jagarnath Prasad Chhawchharia (Pat) 176 ITR 217



Annual report of company shows investment in shares is for capital appreciation – Capital gains arises on transfer


India Nut Co. Ltd. Vs CIT (Ker) 39 ITR 234



Shares were never treated as stock-in-trade – held for earning dividend only – Transfer results in Capital Gains only


CIT Vs N.S.S. Investments (P.) Ltd. (Mad) 277 ITR 149


Vr. Kr. S. Firm Vs CIT (Mad) 61 ITR 661



It is not established that assessee was holding shares as stock-in-trade – Therefore shares held as investment – Dividend income is income from Other Sources. Holding of investments by itself is not business.


CIT Vs West Coast Electric Supplies Corporation Ltd. (Mad) 243 ITR 565.



Purchase & sale of shares in a Private Company within a short period – Adventure in the nature of trade.


V. Amirtham Ammal Vs CIT (Mad) 74 ITR 739


Burnside Investment & Holdings Ltd Vs CIT (ITAT, Mad) 61 ITD 501



Sale of shares of subsidiary company – Capital gains arises


CIT Vs Calcutta Discount Co. (P.) Ltd. ( Cal) 162 ITR 680



Shares purchased with borrowed funds – sale made not to liquidate debts and proceeds were kept in bank – Adventure in the nature of trade.


CIT Vs Sutlej Cotton Mills Supply Agency Ltd (SC) 100 ITR 706


Atlas Corporation Vs ITO (ITAT, Bom) 57 ITD 139


Neerja Birla Vs ACIT (ITAT, Mum) 66 ITD 148

Tuesday, December 6, 2011

Compilations of case law : SALE OF OTHER ASSETS

INCOME – CHARGEABILITY AND COMPUTATION


SALE OF OTHER ASSETS



Purchase of silver bars when prices were going to rise due to war and sales made at rising levels – Adventure in the nature of trade.


Tribhuvandas Vallabhdas Vs CIT (Bom) 61 ITR 518


Wisdom Vs Chamberlain (CA) 74 ITR 306



Rosewood trees after felling were dressed and sold - Assessee not a dealer in trees - isolated transaction - capital gains only and not business


C.G. Thimmaiah Vs CIT (Kar ) 148 ITR 741



Import of 4 Cement Plants – Intention of re-sale was there – Adventure in the nature of trade


Dalmia Cement Ltd Vs CIT (SC) 105 ITR 633



Transactions of acquiring leases and granting sub-leases of coal mines, were in the nature of trading - Salami received is revenue receipt.


Karanpura Development Co. Ltd. Vs CIT (SC) 44 ITR 362



Purchased mortgage decree – As a result of execution proceedings, realized excess money-Business profit.


Jaldu Manikyala Rao Vs CIT (Mad) 28 ITR 220, 54 ITR 409.



Assessee took over the liability to pay the shareholders of a company controlled by him knowing that claims will not be made by the share holders – Adventure in the nature of trade – Business income.


R. Dalmia Vs CIT (Del) 137 ITR 665



Assessee advancing money to another to further litigation with a condition that in case of borrower succeeds, the assessee should get a share in the proceeds – Business.


Goyaprasad & Chotey Lal, IN RE (All) 3 ITR 177

Sunday, December 4, 2011

Compilations of case law: STATUS OF ASSESSEE ; CLUBBING OF INCOME

CLUBBING OF INCOME


Inclusion of income of minor child from firm – Parent need not be a partner.
CIT Vs Dhanushkodi (Mad) 252 ITR 794


Clubbing of income of minor with that of father eventhough source of investment is not from father.
Chandrakala Bai Naila Vs CIT (MP) 178 ITR 341
CIT Vs Bajrangal (AP) 176 ITR 334
CIT Vs Chinabai M. Modi (Guj) 69 ITR 76
CIT Vs K.R. Natarajan (Mad) 236 ITR 402
P. Alwarsamy Vs CIT ( Mad ) 98 Taxman 19
CIT Vs S.J.S. Selvalakshmi Ammal (Mad) 240 ITR 934
CIT Vs P. Murugesan (Mad) 245 ITR 301
CIT Vs Pelleti Sridevamma ( SC ) 216 ITR 826


Inclusion of income of minor child from firm – father need not have any income.
CIT Vs Krishna Iyer (Decd) (Mad) 249 ITR 498


Property given by an oral gift by a Mohammedan to his wife out of natural love and affection is not for adequate consideration or under an agreement to live apart. Hence Sec. 64 applicable – Clubbing.
N.P. Syed Sadique JT 1998(8) SC 32 (105 Taxman (Mag) 81)


Assets transferred to wife – Capital Gains derived by wife by selling the assets – to be clubbed in the hands of assessee, husband.
Sevantilal Maneklal Sheth Vs CIT (SC) 68 ITR 503


Transfer of house property by assessee to his wife – 64(1)(iv) attracts – clubbing .
Syed Sadique & Ors Vs CIT (SC) 239 ITR 263


Income of step-child can be clubbed u/s.64(1)(iii).
CIT Vs Abdul Rahim Khan M. Pathan (Guj) 243 ITR 409


Cash transferred to wife – amount invested in firm – income from firm was includible in the Total Income of husband
Kaushalyabai Vs CIT (MP) 238 ITR 1008
H.P. Dandiwala Vs CIT (All) 231 ITR 281


Clubbing of income of spouse / minor child – No separate deduction u/s.80L for clubbed income.
ITO Vs Yogi H. Aggarwal (ITAT, Mum) 96 ITD 288


Assessee routed certain sales through a sister concern to make that concern earn profit – Actual delivery made by assessee directly to ultimate purchaser – Sister concern situated in the same premises, has no godown, incurred no freight and transportation charges – colourable device – Profit shown to have been earned by sister concern assessed in the hands of assessee.
Bansal Ispat (Lucknow)(P) Ltd. Vs ACIT (ITAT, All) 61 ITD 246


Assessee managing affairs of firm – Benami of assessee – Income to be included in the hands of assessee
CIT Vs G.M. Dharia ( Kar ) 243 ITR 104
Assessing giving gifts to wife – wife invested this amount in firm A – Later on, wife withdrew the amount from firm A and invested it in firm B in which assessee is a partner – Clubbed in the hands of 'a' u/s.64(1)
CIT Vs Harkishdas (MP) 228 ITR 289


Assessee purchased lease rights of a firm for 5 years – sold within 5 months to minor grand daughter – Took back on lease – assessee did not work – sham transaction – income of minor grand daughter clubbed with assessee as benami.
G. Krishnammal Vs DCIT (ITAT, Mad) 66 ITD 83


Cross-gifts to be included for clubbing purposes.
CIT Vs C.M. Kothari (SC) 49 ITR 107
Om Dutt Vs CIT (P&H) 277 ITR 63


Finding that firm's business was actually being conducted by another firm – Firm was not genuine
Oswal Trading Co. Vs CIT (MP) 233 ITR 385


Firm carrying on money lending business – Three ladies closely related to partners of the firm forming another firm for carrying on similar business – Finding that business was actually carried on by original firm – Partnership formed by ladies not genuine – Clubbing of income of both firm.
Sri Krishna Finance Corporation Vs CIT (AP) 169 ITR 611


Spouse must have technical or professional qualification and income must be solely attributable to the application of his / her technical or professional knowledge and experience – Otherwise, income to be clubbed
J.M. Mokashi Vs CIT (Bom) 207 ITR 252

Friday, December 2, 2011

Compilations of case law: STATUS OF ASSESSEE : TRUST: EXEMPTION

EXEMPTION


Registration of a Trust u/s 12A is a condition precedent to claim exemption u/s 11 & 12
U.P. Forest Corporation Vs DCIT (SC) 297 ITR 1


Charitable Trust carrying on educational activities – But not conducting any courses in formal education – Not affiliated to / registered by any authority – No exemption.
Saurashtra Education Foundation Vs CIT (Guj) 273 ITR 139
Bihar Institute of Mining & Mine Surveying Vs CIT (Pat) 208 ITR 608


Assessee conducting examinations for recruitment to various public sector banks – Income earned not exempt u/s 10(22)
Institute of Banking Personnel Selection Vs ADIT (ITAT, Mum) 67 ITD 160


Exemption u/s. 10(22) – Assessee granting scholarships to deserving Parsi students – Not entitled for exemption.
CIT Vs Sorabji Nusserwanji Parekh (Guj) 201 ITR 939


Assessee running hospital, income of which is exempt u/s 10(22) – Interest income from banks, UTI, gift shop income etc. not entitled to exemption.
National Health & Education Society Vs ADIT (Exemption) (ITAT, Mum) 70 ITD 330


Trust advanced money to a company in which trustees were Directors – Advance was for construction of hospital but amount not utilized during relevant accounting year – Amount not entitled to exemption.
CIT Vs V.G.P. Foundation (Mad) 262 ITR 187


Huge sums of money advanced to company having substantial interest in Trust – No interest charged nor adequate security taken – violation u/s 13(3) – Denial of exemption upheld
Kanahya Lal Punj Charitable Trust Vs DIT (Exem) (Del) 297 ITR 66


Property of trust let out at meager rent to a firm in which one of the trustees is partner – No exemption.
Ram Bhawan Dharamshala Vs State of Rajasthan (Raj) 258 ITR 725


Trust – Payments made to interested persons – No exemption.
CIT Vs Nagarathu Vaisiyargal Sangam (Mad) 246 ITR 164


Refrigerator purchased by Trust and placed in residence of managing trustee till trust buildings were ready – No exemption to Trust.
Agappa Child Centre Vs CIT (Ker) 226 ITR 211


Object to conduct stock exchange – No prohibition against declaration of dividends to share holders or dealing with its profits in any manner it liked – No exemption.
Delhi Stock Exchange Association Ltd. Vs CIT (SC) 225 ITR 235
Bihar State Forest Department Corporation Vs CIT (Pat) 224 ITR 757


Donation received from associated companies used for the benefit of children of Trustees – No exemption u/s 11
Concast (India) Educational Trust Vs ITO (ITAT, Bom) 57 ITD 599



A part of Trust income was being used directly or indirectly for benefits of its founder and Managing Director – No exemption u/s 11 or 10(22).
Skin Institute & Public Services Charitable Trust Vs ADIT (Exemption) (ITAT, Del) 65 ITD 125
Chandrika Educational Trust Vs CIT (Ker) 139 CTR 96


Charitable and non-charitable objects – Trustees can apply income to any of these objects – No exemption u/s 11.
Daulat Ram Public Trust Vs CIT (Del) 244 ITR 514


Manner in which trust property was to be utilized, not indicated in trust deed – Not entitled to exemption.
Assembly Rooms Vs CIT (Mad) 241 ITR 76


Proviso to Sec. 13 of IT Act and Sec. 21A of WT Act lays down that exemption will not be denied if part of the income is applied for benefit of a person referred to in Sec. 13(3), if such use or application is in compliance to mandatory terms of Trust which is created before 1.4.62 – Mandatory terms should have existed before 1.4.62 – Subsequent amendment of Trust deed imposing such a term – No exemption.
CIT Vs Rattan Trust (SC) 227 ITR 356


Certain amount set apart as provision was not actually applied for charitable purposes – Not entitled to exemption u/s. 11.
Nachimuthu Industrial Association Vs CIT (SC) 156 CTR 187


Trust must be for public benefit – Only those subscribing to fund continuously or their dependents eligible to benefit in this case – Benefit conferred is not public but private – Not entitled to exemption.
CIT Vs BEL Employees Death Relief Fund and Service Benefit Fund Association (Kar) 225 ITR 270.
CIT Vs ITI Employees Death and Superannuation Relief Fund) (Kar) 234 ITR 308


Interest on investments received by Trust would not be covered by principle of mutuality – not entitled to exemption.
CIT Vs ITI Employees Death and Superannuation Relief Fund (Kar) 234 ITR 308


Surplus earned by organizing exhibition, is business income – No separate books for this business, but can be deciphered from common books of the institution →not amount to 11(4A)
Indian Machine Tools Mfrs. Association Vs ADIT (Exemption) (ITAT, Mum) 70 ITD 304.


Rent received from exhibition hall hiring, meeting hall hiring, parking fee – Income from business.
Visveswaraya Ind. Res. Dev. Centre Vs DCIT (ITAT, Mum) 59 ITD 156


Since assessee could not prove that donors were able to give direction before / at time of donation to corpus funds nor assessee was maintaining separate accounts for this purpose, Assessing Officer was right in denying exemption.
Shri Digambar Jain Naya Mandir Vs ADIT (ITAT, Cal) 70 ITD 121


Donation sent to assessee Trust with specific directions to be spent on organizing 'kisan rally' - To be treated as income of assessee.
Khemraj Nemichand Shrishrimal Charitable Trust Vs CIT (MP) 231 ITR 43
Trust founded by members of family – Income earned by Trust from family concern in AY 80-81 but given to trust only in 1984 – Sums remained with firm – Not used for charitable purposes – No exemption.
CIT Vs Muthoottu Charitable Trust (Ker) 227 ITR 203


Chit business carried on by Trust was not in the course of actual carrying out the primary purpose of the trust – No exemption u/s 11.
Dasa Balinjika Seva Sangam Vs CIT (Mad) 240 ITR 863


Deemed income u/s 11(3) – not eligible for accumulation for further period
The Trustees, The B.N. Gamadia Parsi Hunnarshala Vs ADIT (Exemption) (ITAT, Mum) 77 TTJ 274


If the surplus is a regular feature and is a result of intentional charging of abnormal high fee not commensurate with the expenditure, exemption u/s 10(22) cannot be allowed
ACIT Vs Bal Bharti Nursery School (ITAT, All) 82 ITD 71
All India Personality Enhancement & Cultural Centre for Scholars, AIPECS Society Vs DCIT (ITAT, Del) 91 ITD 240


Objective of Trust is carrying on business of race club and scientific breeding of horses – Registration refused
Hyderabad race Club Vs CIT (AP) 153 ITR 521


When the assessee collects money over and above the fees prescribed by the Government, it amounts to selling the education and the element of charity no longer remain in the activities of the assessee – Not eligible for exemption
Vodithala Education Society Vs ADIT (Exem) 2008-TIOL-139-ITAT-HYD

Wednesday, November 30, 2011

Compilations of case law: STATUS OF ASSESSEE ; TRUST

TRUST
Amendment to Trust deed has no retrospective effect.
Bhriguraj Charitable Trust Vs CIT (Del) 228 ITR 50


For 80G registration, Trust should qualify for exemption u/s 11.
Mundakapadam Mandirams Society (Ker) 258 ITR 395


Assessee Trust not carrying out any charitable activity but using funds for construction of shopping complex – Renewal of 80G approval rejected by CIT.
Madani Musafir Khamar Welfare Society Vs CIT & Anr. (Patna) 264 ITR 481


Donation to charitable trust – Trust for religious purposes also – Trustees could spend the entire income of trust for religious purpose – Donation to such trust not entitled to 80G deduction.
Upper Ganges Sugar Mills Ltd Vs CIT (SC) 227 ITR 578
Arsha Vijnana Trust Vs D.P. Sharma, DIT(Exemptions ) (AP) 295 ITR 437


Charitable Trust – Income used for religious purpose, temple construction – CIT denies renewal of recognition.
KirtichandTarawati Charitable Trust Vs DIT (Exemption) & Ors. (Del) 232 ITR 11


Trust for propagation of a particular religion – Not a public charitable Trust.
M.P. Santhivarma Jain Vs State of Kerala & Anr. (Ker) 265 ITR 385


Trust created by members of family for upkeep of temples - Not public trust.
Kizhakke Kovilakam Trust Vs ACIT (Ker) 256 ITR 238


Sole beneficiary is minor – As per Trust deed, he is not entitled to any income when he is a minor – Assessment on Trust u/s 164(1) upheld.
ITO Vs Sheetal Sunder Trust (ITAT, Bang) 96 ITD 128


Trust not specifying shares of beneficiaries – Subsequent rectification deed specifying shares – Does not relate back – Prior to rectification, trust assessable as discretionary Trust
Ranga rao Lottery Agencies Vs CIT (MP) 287 ITR 542

Option to assess trust or beneficiary directly.
CIT Vs Bharti Devi Sarabhai (SC) 231 ITR 526
CIT Vs Dr. Anand Sarabhai Trust (SC) 231 ITR 524


When Assessing Officer assessed Trust, in fact, it was made on Trustees who were representing beneficiaries as representative assessees u/s 160(1)(iv) – Sec. 161(1A) overrides provisions of Sec. 166—It was the duty of Assessing Officer to tax the right person – Hence eventhough assessments were made on beneficiaries on the basis of return filed by Trustees on behalf of beneficiaries, Assessing Officer can assess the right person i.e., Trustees as representative assessee on whole of income consisting of profits & gains of business at maximum marginal rate.
DCIT Vs Manilal Bapalal Family Benefit Trust (ITAT, Mad) 66 ITD 179


Business carried on in terms of Trust deed – Tribunal correct in holding that trustees were not assessable as AOP.
CIT Vs K. Shyamaraju (Trustees) & Ors. (Kar) 189 ITR 392
As per Trust deed, Trustees had no discretion with regard to choice of beneficiary – all assets held by them were meant to be held solely for benefit of one solitary beneficiary – Maximum marginal rate applicable.
CIT Vs Saroja Raman & T.G. Ranjini Trust (Mad) 104 Taxman 163.


Trust deed named grand daughter of author of Trust as beneficiary entitled to Trust income on attaining majority – Not attained majority – Hence payment was left to absolute discretion of trustees, beneficiary is unknown and share indeterminate – Tax at maximum rate.
Anasuya Muthanna Vs CIT (Mad) 232 ITR 561


Since rights of beneficiaries to get corpus of trust fund come into existence only on a future date, interest of beneficiaries is indeterminate or unknown – contingent – Sec. 21(4) of WT Act attracted –Interest of beneficiaries to be assessed.
A.V. Reddy Trust & Ors. Vs CWT (SC) 240 ITR 409


Will comes into operation on the death of testator and not "in presenti" - Since the deed came into effect on the date of execution, it is not Will – Since only 10% income went to the benefit of relatives and balance went to charitable purposes, it cannot be said to be solely for the benefit of relatives.
Not covered by provisions (ii) & (iii) to 164(1)- To be taxed at 65%.
Chintamani Ghosh Trust Vs CIT (All) 222 ITR 578


Trust deriving income from business – assessment to be made in the hands of trustee.
CIT Vs Manoranjitham Thanga Maligai Trust (Mad) 260 ITR 143


Trust created by or on behalf of minor without prior sanction of Civil Court – Not a valid Trust.
T.A.V. Trust Vs CIT (SC) 236 ITR 788


Distribution received by beneficiary from various discretionary trust can be assessed in the hands of beneficiary.
CIT Vs Anand Sarabhai Trust (SC) 231 ITR 524


Amount collected in the name of God / deities, but utilized for benefit of family concerns – Trust to be assessed as AOP at maximum marginal rate.
ITO Vs Shri Radha Dharmarth Trust (ITAT, Del) 66 ITD 253


Not only objects of trust, but application of its income for charitable purposes, is also important.
Al Madeena Charitable Trust Vs ACIT (ITAT, Coch) 76 ITD 214


Even prior to amendment in 1972, under Sec. 12(1) voluntary contribution themselves were taxable if they were not applied solely for charitable or religious purposes.
R.B. Shreeram Religious & Charitable Trust Vs CIT (SC) 233 ITR 53


Local authority constituted for planned development of State – For carrying out its objects, assessee is acquiring lands at nominal rates and selling the same after developing it to general public at higher rates – Assessee is not allotting houses to poor masses free of cost – Objects not of charitable nature but more of commercialised nature involving profit motive
Punjab Urban Planning & Development Authority Vs CIT ( ITAT, Chd ) 103 TTJ 988
Income to be arrived at in a commercial manner without classification under various heads.
CIT Vs Rao Bahadur Calavala Cunnan Chetty Charities (Mad) 135 ITR 485


Amount credited to the account of beneficiaries cannot be treated as loan – Interest paid to such beneficiaries cannot be allowed as deduction.
Arun Family Trust Vs CIT (Guj) 165 Taxman 15

Monday, November 28, 2011

Compilations of case law: STATUS OF ASSESSEE ; PARTNERSHIP FIRM

PARTNERSHIP FIRM

Firm is not an independent entity – Partners are real owners of assets of firm.
N. Khadervali Saheb & Anr. v. N. Gudu Sahib (Decd) & Ors. (SC) 261 ITR 1


Dissolution of firm on death of one of the partners .
Dahi Laxmi Dal Factory Vs CIT & Anr. (All) 103 ITR 517
Narayanan Chettiar Vs Umayal Achi AIR 1959 Mad 283
CIT Vs Seth Govindram Sugar Mills (SC) 57 ITR 510
Mavukkarai (N) Estate Tea Factory Vs Addl. CIT (Mad) 112 ITR 715
CIT Vs Sukh Dayal Sobh Raj (All) 218 ITR 309
CIT Vs Sherally Meherally and Sons (Bom) 230 ITR 120
ITO Vs Kalyan Das Madan Mohan (All) 230 ITR 191
CIT Vs Madhavdas Lalchand (Mad) 230 ITR 877
Nandlal Sohanlal Vs CIT (P & H) 110 ITR 170
CIT Vs Surya Bhagavan Vastralayam (AP) 227 ITR 304


For transferring immovable property by a firm to its partners, registered document is necessary.
CIT Vs Dadha & Co. (Mad) 142 ITR 792
CIT Vs Palaniappa Enterprises (Mad) 234 ITR 635
Jansons Vs CIT (Kar) 154 ITR 432
Ram Narain & Brothers Vs CIT (All) 73 ITR 423
S.N. Syed Mohammed Saheb & Bros. Vs CIT (Ker) 68 ITR 791


For transferring immovable property by a firm to its partners, registered document is not necessary.
Sunil Siddharthbhai Vs CIT (SC) 156 ITR 509


When individual property is converted to partnership property, there is transfer of property.
Addl. CIT Vs M.A.J. Vasanaik (Kar) 116 ITR 110


Firm dissolved on death of a partner- two assessments to be made
CIT Vs Ayyanarappan & Co. & Anr. (SC) 236 ITR 410


A partner in a firm cannot be employee of that firm.
S. Magnas Vs CIT (Bom) 33 ITR 538


144 Order –Firm assessed as AOP – No interest / salary to partners allowed.
Rama Boiled Modern Rice Mill Vs ITO (ITAT, Hyd) 97 ITD 379


Interest paid to partners u/s.40(b) – calculate in Reducing Balance method.
Architectural Associates Vs ACIT (ITAT, Hyd) 92 ITD 479


Interest to partners disallowed u/s 40(b) eventhough firm purchased goods from proprietary concern of partner and interest pertains to outstanding balance in that account.
Shakuntala Industries Vs CIT (Raj) 216 ITR 507


Interest paid to partner – claim that transactions carried out through partner's bank account and that interest actually paid to bank – No material to support claim – disallowance justified.
CIT Vs Thulasidhar & Co. (Mad) 229 ITR 425


A deity cannot be a partner of a valid partnership firm
Ramakrishna Chit Fund Co. Vs ITO (ITAT, Hyd) 106 ITD 350
Gift entries made in books to circumvent 40(b) provisions and interest paid to family members of partners – Transaction not genuine – interest disallowed u/s 40(b)
Auto Sales Vs CIT (All) 227 ITR 790


Minors admitted as full partners – Partnership deed not signed by guardians of minors – No valid partnership.
Kumar Financing Corpn. Vs CIT (Cal) 122 ITR 192
Addl. CIT Vs Uttam Kumar Pramod Kumar (All) 115 ITR 796
CIT Vs Khetan & Co. (Cal) 45 ITR 170


Adult admitted to benefits of partnership – No valid partnership
CIT Vs B. Pandiah & Co. (AP) 143 ITR 464
CIT Vs Shankar Cottons (Mad) 222 ITR 445
CIT Vs J.B. Coal Traders (Patna) 164 ITR 450


Deed not specifying share of one partner – No valid partnership
K.S. Badrinarayana Rao Vs CIT (Kar) 152 ITR 159


On the date of execution of partnership deed, one of the partners, who was signatory to the deed, was a minor – No valid partnership
Udayalakshmi Hardware Stores Vs CIT (SC) 180 ITR(St)39
CIT Vs Oriental T. Maritime (AP) 227 ITR 244


Some partners held to be benamidars – Firm not genuine
S.P. Gramaphone Co. Vs CIT (SC) 158 ITR 313
CIT Vs Jayalakshmi Oil Farm (AP) 228 ITR 443


Duty of ITO to find whether firm was genuine – Failure to produce partners of firm on demand by ITO – firm held not genuine.
Frontier Construction Vs CIT (Gau) 221 ITR 878


One partner acting as consultant, not contributing capital, not taking interest in the business, not entitled to share in profits / losses, paid fixed commission and to be indemnified against claim for damage - No genuine firm
CIT Vs Ravi Constructions (AP) 169 ITR 662


The execution of a partnership deed is not by itself a talisman which can entitle a firm to be registered - There must be circumstances and facts to who that it had come into existence and that it had carried on business.
CIT Vs S.S.A.M. Shanmugha Nadar Financing Corpn. (Mad) 141 ITR 656


No business carried on – No partnership firm.
Sudarshan & Company Vs CIT (Mys) 89 ITR 85
CIT Vs Ferozepur Ice Manufacturers' Association (P&H) 84 ITR 607


Letting out building & collecting rent do not amount o carrying on of business, but are only incidental to ownership – No valid partnership – assessed as AOP.
CIT Vs Phabiomal & Sons (AP) 158 ITR 773
CIT Vs Veerabhadra Industries (AP) 240 ITR 5
Ramniklal Sunderlal Vs CIT (Bom) 36 ITR 464


Partnership formed with object of purchasing lottery tickets and sharing prize money – No business was carried on.
CIT Vs S. Mariappan (Mad) 238 ITR 826
State Abkari Act prohibiting licensee from selling or otherwise transferring his license – Licensee entering into partnership – Partnership not valid
CIT Vs Narayanan & Co.(Ker-FB) 223 ITR 209, 234 ITR 133
Biharilal Jaiswal etc. Vs CIT (SC) 217 ITR 746
Motilal Chunilal Vs CIT (SC) 234 ITR 472


Gold Control Act prohibits transfer of license – Dealing in Gold by firm on the basis of license obtained by partner – Partnership not valid.
CIT Vs Koonan's Jewellery (Ker) 226 ITR 588


Only salary actually paid or provided in accounts can be allowed as deduction and not the maximum limit worked out as per sec. 40(b)
Sri Balaji Agencies Vs ITO (ITAT, Chennai) 106 ITD 419


Saturday, November 26, 2011

Compilations of case law: STATUS OF ASSESSEE ; DEVOLUTION OF PROPERTY

DEVOLUTION OF PROPERTY


Properties inherited by widow as sole heir on the death of her husband – Adoption by widow subsequently – Does not divest widow of properties – Properties do not become joint family properties – Female cannot throw property into family hotchpot.
R. Rajathy Ammal Vs CWT (Mad) 164 ITR 605
Punithavalli Ammal Vs Ramalingam AIR 1970 SC 1730


As per Sec.14(1) of Hindu Succession Act, a widow after death of her husband became absolute owner of properties left by her husband – on adoption of a son subsequently, such rights did not get divested – On death of such a widow, these rights passed on to the adopted son.
Asst. Controller of estate duty Vs Channamma P. Jabin (ITAT, Bang) 70 ITD 194


Widow inheriting limited right in property under will in lieu of her right to maintenance – Limited right was transferred into absolute right by Sec.14(1) of H.S.A.- Gift of property by widow valid.
Beni Bai Vs Raghubir Prasad (SC) 236 ITR 898


Partner dying intestate – wife of deceased admitted as partner – Property devolved on class I heirs in individual capacity – Declaration that shares held by new partner in partnership was on behalf of her HUF, not relevant – Share income is her individual income.
CIT Vs J.R. Lalwani (Bom) 240 ITR 750


Individual property of deceased person devolves on his son in his individual capacity and not on the HUF of son and his sons.
CWT etc. Vs Chander Sen etc. (SC) 161 ITR 370
CIT Vs C.G. Venkatasubban (Mad) 240 ITR 674


Property received on partition of HUF by a single coparcenor became the HUF property on his subsequent marriage – Assessment to be in HUF status.
H.P.A.R. Rajagopalan Vs CWT (Mad) 241 ITR 344
Dr. Prakash B. Sultane Vs CIT ( Bom ) 280 ITR 593


Hindu female inherited property from her father or mother – She has no children- Dying intestate – Property would devolve on heirs of her father.
Bhagar Ram v. Teja Singh (SC) 237 ITR 364


Karta of HUF cannot gift HUF properties to member / coparcener / stranger.
DCIT Vs A. Tenzing (ITAT, Mad) 62 ITD 76


Assessee beneficiary is a Trust – No absolute right in beneficial interest – He cannot impress his beneficial interest to HUF hotch-pot.
Maharaja Bahadursingh, Kasliwal Vs WTO (ITAT, Indore) 64 ITD 305


Thursday, November 24, 2011

Compilations of case law: STATUS OF ASSESSEE ; PARTITION

PARTITION

Death of coparcenor – No ipso facto partition
CIT Vs Charan Das (HUF) (All) 280 ITR 637

No evidence that after the death of Kartha, partition by metes and bounds took place – No partition as per Expl. 1 to Sec. 6 – Sale deed executed by son of deceased Kartha on behalf of HUF – Entire property treated as that of HUF for capital gains computation – Share of deceased Kartha not to be excluded
CIT Vs Dharam Pal Singh (HUF) (All ) 280 ITR 629

In the absence of more than on coparcenor, a partition is impossible – A sole surviving coparcenor with female members – Grant of share in property to female members – could only be in the nature of settlement of property.
V.V.S. Natarajan Vs CIT (Mad) 111 ITR 539
B.T. Ravindranath Punja Vs CIT (Kar) 179 ITR 243
Sat Pal Bansal Vs CIT (P&H) 162 ITR 582

IT authorities had their own view to take and were not bound by the partition decree – A junior member can act as the karta of a HUF with the consent of all the other members.
Narendrakumar J. Modi Vs CIT (SC) 105 ITR 109

Even after death of a male coparcenor in the joint family and even after the undivided shares of the family members became defined under the Hindu Succession Act, until an order u/s.171 is passed by ITO recognizing the partition in the family on the basis of any claim made in this behalf HUF continue to be assessed to IT & WT.
Narendrakumar Modi Vs CIT (SC) 105 ITR 109
R.B. Tunki Sah Baidyanath Prasad Vs CIT (SC) 212 ITR 632.
Kalloomal Topeswari Prasad (HUF) Vs CIT (SC) 133 ITR 690.

Partition not registered – No physical division – No actual division of assets – No partition in HUF.
CIT Vs Venugopal Inani (SC) 239 ITR 514
Kanhaiyalal Thawarji Vs CIT (HP) 176 ITR 329
Satish Chandra Modi (HUF) Vs CIT & Anr. (AP) 216 ITR 717

Partial partition not valid after insertion of 171(9) w.e.f. 1.4.1980
CIT Vs Tej Cloth Weaving Factory (P&H) 178 ITR 474

Death of karta after Hindu Succession Act came into force – Female members of family entitled to definite share in family property –Female members not becoming divided from members of family.
State of Maharashtra Vs Narayana Rao Sham Rao Deshmuk & others (SC) 163 ITR 31

Proviso to sec. 6 of Hindu Succession Act does not effect a disruption in coparcenory family – No partition effected by operation of law.
Addl. CIT Vs Maharani Raj Laxmi Kumari Devei (SC) 224 ITR 582

HUF consisting of karta, wife, 2 daughters and adopted son – Karta died – Property continued to belong to HUF.
Gowli Buddanna Vs CIT (SC) 60 ITR 293

Widow's share in coparcenary property must be ascertained by adding the share to which she would be entitled at a notional partition immediately before her husband's death and the share which she would get in her husband's interest upon his death.
Gurupad Khandappa Magdum Vs Hirabai Khandappa Magdum & Ors.(SC) 129 ITR 440

Only one coparcenor – No partition possible – Karta cannot gift any HUF property to himself.
T.G.K. Raman (HUF) Vs CIT (Mad) 140 ITR 876
Balchand Malaiya HUF Vs CWT (MP) 227 ITR 651

HUF consisting of 2 brothers – No partition took place by virtue of Sec.6 of Hindu Succession Act on death of one brother – Interest of deceased in HUF cannot be excluded for assessment.
CWT Vs Chandrasinhrao D.Gaekward (Guj) 237 ITR 875

Sec. 20 applies to transactions entered into prior to enactment of WT Act – Order of WTO recording partition, mandatory.
Tatavarthi Rajah & Anr Vs CWT (SC) 225 ITR 561

Partial partition of HUF not recognized under WT Act – HUF would continue to be assessable as if no partial partition had taken place.
Lalchand Kothari Vs CWT (Raj) 225 ITR 142

Deceased and his brother coparceners in HUF – Deceased dying issueless leaving widow – His entire share in coparcenory property passes – No question of deemed parturition with wife.
Bhartiben S. Jhaveli Vs Controller of estate duty (Guj) 238 ITR 995

Setting up certain assets of HUF in respect of certain coparcener on a condition that no further claim will be allowed – Partial partition – Not recognized in IT Act.
ITO Vs P. Shankaraiah Yadav (ITAT, Hyd) 91 ITD 228

Tuesday, November 22, 2011

Compilations of case law: STATUS OF ASSESSEE ; HUF

HUF
General

Wife of Karta has taxable income – HUF to be assessed as specified as HUF.
Kushal Chand Sharma Vs CWT (Raj) 216 ITR 56
Prakash Chand Surana Vs CWT (Raj) 228 ITR 604

Specified HUF – Income of a member including income of spouse and minor child to be considered.
CIT Vs P.A. Venkatraman (Mad) 246 ITR 773

An HUF cannot exist with one member alone.
Krishna Prasad Vs CIT (SC) 97 ITR 493

Though a Hindu widow cannot be a coparcenor, she has coparcenary interest and she is also a member of the coparcenory by virtue of the rights conferred on her under Hindu Women's Right to Property Act, 1937.
Controller of Estate Duty Vs Alladi Kuppuswamy (SC) 108 ITR 439

Difference between value of corpus and aggregate shares of beneficiaries is assessable under Wealth Tax Act – Sec. 21(1A) – Trust
H.E.H. The Nizam's Jewellery Trust Vs ACWT & Ors. (AP) 227 ITR 52

Wife of Karta cannot relinquish her status as member of HUF by a unilateral declaration while retaining her marital tie.
CWT Vs M.A.R. Rajkumar (AP) 226 ITR 804

Jat Sikh is a Hindu – Ancestral property is HUF property.
Controller of estate duty Vs Homojit Singh (P&H) 223 ITR 139

The Kerala Joint Hindu Family System (Abolition) Act, 1975 has no application to assessee who is domicile in Tamil Nadu having properties in Kerala.
Dayalan Rajes Vs State of Kerala & Anr. (Ker) 231 ITR 707

Amount received by individual under accident insurance policy covering risk to life of his father – includible in his hands as Individual and not in HUF.
L. Bansi Dhar & Sons Vs CIT (Del) 157 CTR 340.

Sunday, November 20, 2011

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

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

COMPANIES – EFFECT OF AMALGAMATION

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

Friday, November 18, 2011

Compilations of case law: STATUS OF ASSESSEE ; General

STATUS OF ASSESSEE : General
Assessment can be made in a different status than what was claimed in the return.
Munilal Shivnarain Kothari Vs CIT (Raj) 149 ITR 567
Correct person to be assessed – Assessment of different persons in respect of same income will not absolve the correct person's liability
CIT Vs Sriram Jagannath ( Raj ) 250 ITR 689
S.P. Jaiswal etc. Vs CIT (SC) 224 ITR 619
CIT Vs Ch. Atchaiah (SC) 218 ITR 239
K. Bhoomiamma Vs CIT (Kar) 194 ITR 723
ACIT Vs Puri Brs (ITAT, Asr) 69 ITD 165
CIT Vs Murugesa Naicker Mansion (Mad) 244 ITR 461
Status of deity is individual.
Shri Shankar Bhagwan Estate Vs ITO (ITAT, Cal) 61 ITD 196
State Forest Corporation is not a local authority.
CIT Vs U.P. Forest Corporation (SC) 230 ITR 945
Co-operative Society has no power to make retrospective amendment to by-laws
CIT Vs Bazpur Co-operative Sugar Factory Ltd. (SC) 172 ITR 321
Private Ltd. Company becoming a Public Ltd. Company by virtue of deeming fiction under Companies Act – Articles of Association restricting transferability of shares – Company cannot be treated as a Company in which public are substantially interested.
CIT Vs Light Publications Ltd (Guj) 251 ITR 120
Trusts for the benefit of general public holds more than 50% shares in a company – But members of the Trust does not have interest in the company – So Company is not one in which public are substantially interested
Tata Sons Ltd. Vs DCIT (ITAT, Mum-TM) 104 ITD 45
Official liquidator is principal officer of company – can be directed to file I.T. Returns
ITO, Nellore Vs Official Liquidator (AP) 106 ITR 119
Official receiver is not Representative of insolvent – He hold properties on behalf of creditors of insolvent – Transfer of property by official receiver – Capital gains are assessable in his hands.
CIT Vs J. Narayana Murthy (AP) 228 ITR 99
Scheme of amalgamation specifying date of transfer – Court not modifying date of transfer – amalgamation takes effect on date of transfer specified in scheme and not on date of court's order. – From that date income of subsidiary company belongs to holding company.
Marshall Sons & Co. (India) Ltd. Vs ITO (SC) 223 ITR 809
Administrator of estate – sale of assets declared – Capital Gains arises
James Anderson Vs CIT (SC) 39 ITR 123
Firm of clearing, forwarding and shipping agents – Not professional firm.
CIT Vs International clearing & Shipping Agency (Mad) 241 ITR 172
Firm – Dissolution – Winding up under supervision of Court – Subsequent sale of assets after few years – Capital Gains assessable in the hands of firm – income earned for the period upto sale assessable in the hands of AOP.
Raghurama Prabhu Estate, Executrix, M. Kaveri Bai & Ors. Vs JCIT (Kar) 264 ITR 124
Suit for dissolution of firm – Receivers appointed to carry on the business till winding up – Receivers carried on business on behalf of erstwhile partners with their consent – Profits to be assessed as an AOP.
N.V. Shanmugham & Co. Vs CIT (SC) 81 ITR 310
The executor will continue to be assessed until the estate is distributed among the beneficiaries according to their several interests.
Navnit Lal Sakarlal Vs CIT (SC) 193 ITR 16
Mother can be natural guardian even during life time of father.
Githa Hariharan & Anr. Vs Reserve bank of India & Anr. (SC) 236 ITR 380
As per contract, export benefit received by assessee would be passed on to foreign buyers – Assessee was   treated as agent of non-resident foreign buyers u/s 163 in respect of said benefit
DCIT Vs A. Tosh & Sons Ltd. (ITAT, Kol) 89 ITD 138
Tax paid by representative assessee would be grossed up for purpose of computing taxable income in hands of beneficiary assessee.
Clouth Gummiwerke Aktiengesellschaft Vs CIT (AP) 238 ITR 861
Income arising to Non-resident through agent – Direct assessment of non-Resident in respect of other income – would not bar assessment of agent u/s.163 
CIT Vs Fertilizers & Chemicals (Travancore) Ltd. (Ker) 166 ITR 823
Assessee bed-ridden – His son was doing business using license in the name of assessee – Books of accounts and assets seized from the bedroom of son – Son to be assessed
CIT Vs Nikunja Behari das ( Cal ) 244 ITR 244
Investment by firm shown in Balance Sheet of assessee – subsequent claim that amount belonged to partners – Not relevant – Interest on investment assessable as income of firm .
G. Ramchand Vs CIT (Mad) 185 ITR 140
Liquor business – Person paying license fee and taking contract for sale of liquor – Assessment on such person on profits from liquor business justified.
Rampal Thakurdin Gupta Vs CIT (MP) 234 ITR 304
CIT Vs Oswal Enterprises (P) Ltd. (Del) 234 ITR 483
Agency in the name of assessee – Agreement to transfer income to firm – Firm not having  license to carry on  insurance  business – insurance commission income of assessee
CIT Vs L. Alagappan (Mad) 254 ITR 77