The matter was remanded to the Tribunal for fresh consideration in terms of the clause in the letter of employment providing that the emoluments paid by the assessee were subject to deduction of tax as per applicable laws. Therefore, the Commissioner (Appeals) ought to have examined the provisions of the Citizens Individual Inhabitant Act, which was a Japanese law, and ought to have analysed the provisions of that law, particularly when the question as to the nature of the levy as being an overriding charge had to be decided.

CIT vs. NHK Japan Broadcasting Corporation (2010) 322 ITR 628 (SC)

Rule 3 of the Income Tax Rules, 1962 dealing with the method of computing valuation of perquisites under section 17(2), of the Income Tax Act 1961, is not invalid after it was amended by the Income Tax Act (twenty second amendment) Rules 2001. It is not inconsistent with the parent Act, nor is it ultra vires article 14 of the Constitution of India.

BHEL workers Union and another vs. UOI (2010) 324 ITR 26 (SC)

In the absence of factual matrix to decide the question whether the interest income received by the assessee on short-term fixed deposits constituted business income under section 28 or income from other sources under section 56, the matter was remanded to the Appellate Tribunal for fresh consideration in accordance with law.

CIT vs. Producing P. Ltd. (2010) 322 ITR 270 (SC)

After insertion of Expl. to section 36(1)(vii), assessee is required to not only debit Profit & Loss Account but simultaneously reduce loans and advances or debts from the Assets side of Balance Sheet to the extent of corresponding amount so that at the end of the year, the amount of loans and advances is shown as net of provision for the impugned debt – It is not necessary to close the individual account of each debtor in the books.

Vijaya Bank vs. CIT (2010) 231 CTR 209 / 323 1 TR 166/37 DTR 401 (SC)

Matter is remanded to CIT(A) to decide whether the differential payment made by the assessee to cane growers after the close of the financial year / balance sheet date constitute an expenditure or distribution of profit, after taking into account the resolution of the State Government modalities and the manner in which SAP and SMP are decided, the timing difference which will arise on account of the difference in the accounting years, etc.

Dy. CIT vs. Shri Satpuda Tapi Parisar SSK Ltd. (2010) 231 CTR 224 / 38 DTR 89 (SC)

The loss claimed by the appellant on account of fluctuation in the rate of foreign exchange as on the date of the balance-sheet was allowable as expenditure under section 37(1). The appellant was entitled to adjust the actual cost of imported assets acquired in foreign currency on account of fluctuation in the rate of exchange at each of the relevant balance-sheet dates, pending actual payment of the liability under section 43A prior to its amendment by the Finance Act, 2002.

Oil and Natural Gas Corporation Ltd. vs. CIT (2010) 322 ITR 180 / 5 SCC 468 / 189 Taxman 292 (SC).

When assessee files confirmation, and establishes the capacity addition cannot be made under section 68.

CIT vs. Asha Hampannavar, SLP rejected (2009) 319 ITR (St.) 5

Refer ITA No. 1108 of 2008 dt. 26-9-2008 (Bombay High Court)

ITA No. 5319/Mum/2007 Bench ‘A’ dt. 30-6-2008 Asst. Year 2003-04.

The Assessing Officer ought to have called for the bye-laws of the assessee to determine (i) whether a weaver could have become a member of the apex society, and (ii) whether the assessee was engaged in cottage industry. The Department was
directed to decide the applicability of section 80P keeping in mind the bye-laws of the assessee and the Scheme.

CIT vs. Rajasthan Rajya Bunkar S. Samiti Ltd. (2010) 323 ITR 365 (SC)

Composite charges for processing, ginning and pressing of cotton as well as storage of bales were paid to the assessee federation by the members. Department adopted an ad hoc measure of attributing 50% of the charges payable to the assessee as rental income. The court held that it has not taken into account various factors namely, provisions of Cotton Ginning and Pressing Factories Act, 1925, expenses incurred towards payment of labour charges, etc. Rule of 50% cannot be applied as across the board principle. Department was directed to examine the total income of the assesee and determine the amount allocable as rental income in the composite charge received by it by applying the principle of proportionality.

CIT vs. Baba Saheb Kedar Ginning & Pressing Co-operative Society Ltd. (2010) 38 DTR 153 (SC)

As important question of law arose as to whether credit of Minimum Alternative Tax should be given effect to under section 115JA, before charging interest or after charging interest under section 234B and 234C, registry is directed to incorporate in weekly boards and also website.

CIT vs. Lakshmi Sarswati (Armi) (P) Ltd. (2010) 190 Taxman 160 (SC)

It is for the statutory authority, and not for the court, to decide whether the income-tax return should be filed in a particular Form. The court cannot do so even if there is paucity of time and the requisite Form is not available.

UOI vs. Income-tax Bar Association, Lucknow (2010) 324 ITR 81 (SC)

Assessing Officer issued notice under section 148 for A.Y. 1997-98 on discovery that the assessee had started production of engines in the period relevant to the A.Y. 1989-90 and consequently it was not entitled to benefit of section 80I during the A.Y. 1997-98. Writ petition filed by the assessee dismissed giving liberty to the assessee to raise all objections, including the one relating to jurisdiction of the Assessing Officer to issue notice, before the proper forum. Order of the Assessing Officer, however, reversed by the CIT(A) against which order, appeal is pending before the Tribunal. The Tribunal was directed to also examine the validity of the impugned notice under section 148 in the appeal pending before it.

Swaraj Engines Ltd. vs. ACIT (2010) 38 DTR 1 (SC)

The amount on which the interest for the period during which tax was not refunded will include the amount of tax deducted at source.

CIT vs. H. E. G. Ltd. (2010) 324 ITR 331 (SC)

Each heading of Chapter XX being a stand-alone item, the provision of section 249(4)(a) cannot be read into section 253(1)(b) and, in the absence of dis-enabling provision in section 253(1)(b), assessee’s appeal under section 253(1)(b) was maintainable despite non-payment of full amount of admitted tax. Once section 249(4)(a) is treated as a mandatory condition for filing an appeal before CIT(A) and once that condition stands satisfied at the time of filing an appeal to the CIT(A), then there is no necessity for the assessee to once again pay the tax due as a condition precedent to filing of appeal before the Tribunal under section 253(1)(b).

CIT vs. Pawan Kumar Laddha (2010) 324 ITR 324 / 38 DTR 3 (SC)

In view of the amendment of the Act, giving power to the High Court to condone the delay in filing appeals, liberty is given to the department to move the High Court by way of review of the impugned order dismissing Department’s belated appeal on the ground that it has no power to condone the delay.

CIT vs. ICICI Bank Ltd. (2010) 38 DTR 319 / 231 CTR 439 (SC)

For taking repeated adjournment the department was directed to pay the cost of Rs. 10000/- and directed to make an enquiry in that regard; if it was found that fault was with an officer, it would take necessary steps including recovery.

CIT vs. Varanashi Wines (2010) 190 Taxman 167 (SC)

The purpose behind section 271(1)(c) is to penalize the assessee for (a) concealing particulars of income, and/or (b) furnishing inaccurate particulars of such income. Whether the income returned was a profit or a loss was really of no consequence. Therefore, even if no tax was payable, penalty is still leviable.

A word occurring in different sections of the same Act can have different meanings, if the objects of the two sections are different and they operate in different fields.

Jt. CIT vs. Saheli Leasing and Industries Ltd. (2010) 324 ITR 170 (SC)

On petitions challenging the constitutional validity of the National Tax Tribunal Act, 2005, the Supreme Court held :

(i) The UoI agreed that appropriate would be made in the Act to ensure that only lawyers, Chartered Accountants and parties in person would be permitted to appear before the National Tax Tribunal.

(ii) In regard to section 5(5) dealing with the transfer of Members of the Tribunal from one State to another, the UoI agreed that the expression "consultation with the Chairperson" should be read and construed as "concurrence of the Chairperson".

(iii) In regard to section 7 providing for a selection committee comprising the Chief Justice or a judge of the Supreme Court and the Secretaries of the Ministry of Law and the Ministry of Finance, it was held that there was no question of the two Secretaries overriding the opinion of the Chief Justice or Judge, since primacy of the Chairperson was inbuilt and this aspect would be clarified.

(iv) Matters relating to the National Tax Tribunal and challenge to article 323B of the Constitution of India raising other issues had to be heard separately.

Madras Bar Association vs. UoI and Another (2010) 324 ITR 166 (SC)

Editorial Note : Refer Y. R. Gandhi (2010) 156 Company Cases 392 (SC)

Manufacture of silk thread held not to be an agricultural activity.

Special Land Acquisition Officer vs. Karigowda & Others (2010) 5 SCC 708