Surplus consideration on sale of agricultural land always partakes the character of agricultural Income, even though surplus consideration is tainted with expression "on money", as true colour of that "on money" is Agricultural Income.

ITO vs. Koshy George (Dr.) (2010) 190 Taxman 4 (Cochin)

Income of the association of flat owners is not taxable on the principle of mutuality, despite the fact that most of the flats are let out and tenants are paying the contribution. Interest earned from bank on surplus funds deposited in the bank is also not taxable on the principle of mutuality.

Wellington Estate Condominium vs. ITO, ITAT ‘I’ Bench, Delhi, ITA No. 2846/Del/07, dated 16-10-10, BCAJ p. 47, Vol. 42-A, Part 3, June, 2010

Entire amount of time-share membership fee receivable by the assessee upfront at the time of enrolment of a member cannot be charged to tax in the initial year on account of contractual obligation that is fastened to the receipt to provide services in future over the term of contract; it has to be spread over the ensuing years.

ACIT vs. Mahindra Holidays & Resorts (India) Ltd. (2010) 40 DTR 1 (Chennai) (SB) (Trib.)

When the bank gives guarantee for period extending the close of the year and there is no obligation to refund the amount in case such guarantee is revoked prior to the prescribed period, the entire commission accrues to it at the time of giving guarantee and no part of such commission can be said to be deferred to next year.

Dy. Director of IT vs. Chohung Bank (2010) 40 DTR 75 (Mum.) (Trib.)

200. S. 9(1)(vii) – Income deemed to accrue arise in India – Fees for technical services – International Taxation

Income deemed to accrue or arise in India. Service rendered outside India. Fees for Technical Services, even if rendered outside India, are taxable.

Ashapura Minichem vs. ADIT (ITAT Mumbai) (Source: www.itatonline.org)

Assessee having a diploma holder in textile technology who has extensive knowledge and experience in the filed of textile manufacturing and yarn manufacturing machines having produced documentary evidence showing that he was actively involved in providing consultation for erecting spinning plants etc, in the course of his employment with an Indian company was entitled for exemption under section 10(5B).

ACIT vs. Andreas Beising (2010) 130 TTJ 100 (Del.) (UO)

Editorial Note:- Section omitted by the Finance Act, 2002 w.e.f. 1-4-2003.

Scholarship/stipend received by a student from College/Government for pursuing higher studies cannot be termed as salary and therefore, same would be exempt under section 10(16).

Rahul Tugnait (Dr.) vs. ITO (2010) 124 ITD 480 (Chd.)

Change in the name of the entity at the time when the shares of such undertaking are sold does not affect the claim of exemption under section 10(23G).

Jaykay Fineholdings (India) (P) Ltd. vs. Addl. CIT (2010) 38 DTR 302 (Mum.) (Trib.)

Exporter having entered in to forward contracts in respect of foreign exchange receivable as a result of export of turnover, the profit from forward contract could not be included in the profits of business of the undertaking for the purpose of computing deduction under section 10B. Such profit assessable as profit from speculation business.

ACIT vs. K. Mohan & Co. (Exports) (P) Ltd. (2010) 39 DTR 97 (Bang.) (Trib.)

Benefit of section 10B has to be allowed to an assessee before setting–off brought forward loss and unabsorbed depreciation.

Patspin India Ltd. vs. CIT (2010) 38 SOT 369 (Kochi)

For claiming deduction under section 10B, it is not requirement that assessee company should it self own plant and machinery or equipment and manufacture or produce computer software on same in order to be eligible for exemption.

ITO vs. Techdrive (India) (P) Ltd. (2010) 124 ITD 249 (Delhi)

Editorial Note:- Affirmed by Delhi High Court, CIT vs. Techdrive (I) P. Ltd (2010) 186 Taxman 208 (Del.)

Assessee – exporter having entered into forward contracts in respect of foreign exchange receivable as a result of export in respect of the export turnover and settled the same without actual delivery, the profit from such forward contracts is assessable as profit from speculation business in view of Expln. 2 to section 28 r.w.s. 43(5) and speculation business not being the business of assessee’s undertaking profit from forward contracts could not be included in the profits of the business of the undertaking for the purposes of computing deduction under s. 10B.

ACIT vs. K. Mohan & Co. (Exports) (P) Ltd. (2010) 39 DTR 97 (Bang.) (Trib.)

E.O.U.s- Benefit of section 10B to be allowed to an assessee before setting off of brought forward loss and unabsorbed depreciation.

In the present case it has been held in various cases decided earlier that the benefit of section 10 B has to be allowed to an assessee before setting off of brought forward loss and unabsorbed depreciation. Therefore, in the instant case the impugned direction of the Commissioner was not sustainable in law.

Patspin India Ltd. vs. CIT (2010) 38 SOT 369 (Cochin)

Application of income should result and should be for the purpose of charitable purposes in India and application need not be in India. Expenditure incurred at an event at Hannover, Germany is eligible for exemption.

National Association of Software & Services Companies (NASSCOM) vs. Dy. CIT (2010) 38 DTR 105 (Delhi) (Trib.)

Charitable or religious trust- perpetual succession in appointment of trustees- could not give it colour of a private trust- Hence was entitled to registration.

NLB Charitable Trust vs. CIT (2010) 38 SOT 291 (Del.)

Rejection of registration on grounds of (a) genuineness of appellant, and (ii) alleged violation of section 13(1)(b) is no sustainable. The compliance with the provisions of section 13(1)(b) were not relevant at the time of considering the application for registration.

JITO Administrative Training Foundation vs. DIT (Exemption), ITAT ‘J’ Bench, Mumbai, ITA No. 4126/M/09, dated 18-3-10, BCAJ p. 49, Vol. 42-A, Part 3, June, 2010

Section 14A, is not applicable in the case of insurance business, which is governed by specific provisions of section 44.

Bajaj Alliance General insurance Co. Ltd. vs. Addl. CIT (2010) 38 DTR 282 / 130 TTJ 398 (Pune) (Trib.)

Section 44 provides for application of special provisions for computation of profits and gains of insurance business in accordance with Rule 5 of Sch. I and, therefore, it is not permissible to the Assessing Officer to travel beyond section 44 and Sch. I and make disallowance by applying section 14A.

Oriental Insurance Co. Ltd. vs. ACIT (2010) 38 DTR 273 (Del..) (Trib.)

Value of shares issued to the assessee-director by the employer company as consideration in terms of restrictive covenant whereby the assessee agreed to desist from participating in a similar or competitive business for a period of ten years after termination of his employment or association with the company assessable as "profit in lieu of salary". Receipt cannot be construed as capital receipt.

Neville Tuli vs. ITO (2010) 38 DTR 325 (Mum.)

Income of the association of flat owners is not taxable on the principle of mutuality, despite the fact that most of the flats are let out and tenants are paying the contribution. Interest earned from bank on surplus funds deposited in the bank is not taxable on the principle of mutuality.

Wellington Estate Condominium vs. ITO, ITAT ‘I’ Bench Delhi, ITA No. 2846/Del./2007, dated on 16-10-2009 (BCAJ 42-A, June 2010 pg. 346)

Group companies of assessee situated abroad incurred certain expenditure on its behalf, at time of repayment, due to fluctuation in exchange rate Amount payable became more than what was accounted for in terms of dollar rate on date of incurring. Since transactions of assessee with group companies were on trading account loss incurred on account of fluctuation in foreign exchange rate is allowable deduction.

C. B. Richard Ellis Mauritius Ltd. vs. Dy. DIT (2010) 38 SOT 236 (Delhi)

Loss on revaluation of unquoted shares was not allowable as business loss.

Catholic Syrian Bank Ltd. vs. ACIT (2010) 38 SOT 553 (Cochin)

Deposit given to Calcutta stock exchange to become corporate member of exchange was written off as business loss. The assessee entitled to deduction as business loss.

Parlight Securities Ltd. (2010) 3 ITR 628 (Ahd.) (Trib.)

Securities held by bank in the nature of current investments automatically became the stock-in-trade of the bank and therefore, loss arising from the sale of "current investments" is a business loss.

Dy. Director IT vs. Chohung Bank (2010) 40 DTR 75 (Mum.) (Trib.)

Loans advanced to subsidiaries cannot be allowed as bad debt or business loss. The loss is capital loss.

Jt. CIT vs. Rallies India Ltd. (2010) 3 ITR 1 (Mum.) (Trib.)

Assessee dealer in shares can also hold certain shares as investment. When shares are sold from investment portfolio which were purchased two three years back the same is chargeable to tax as capital gains and not as business income.

Saranath Infrastructure (P) Ltd. vs. ACIT (2010) 124 ITD 71 (Luck.)

Assessee company having not acquired any special rights of business of commercial nature in the course of amalgamation of three group companies with it, the goodwill appearing in its books of account as a balancing figure for the assets acquired and the price paid is goodwill simpliciter and therefore, it is not eligible for depreciation.

Borker Packaging (P) Ltd. vs. ACIT (2010) 40 DTR 29 (Panaji) (Trib.)

Where the assessee company had taken over the business of the firm with IPR at the value determined by the valuers and such value was made part of the agreement as the cost of consideration which passed on from the company to the firm and the cost so determined was the real amount then it is wrong to presume that there was a notional amount which was transacted between the parties; assessee was entitled to claim depreciation on the value of such IPR.

Modular Infotech (P) Ltd. vs. Dy. CIT (2010) 40 DTR 172 (Pune) (Trib.)

Goodwill is not an intangible asset within the meaning of section 32(1)(ii) hence, not entitled to depreciation.

Modular Infotech P. Ltd. vs. Dy. CIT (2010) 40 DTR 172 (Pune) (Trib.)

Unabsorbed depreciation relating to assessment year 1997-98 to 1999-2000, cannot be set off in 2003-04 and 2004-05 against income from other sources.

Dy. CIT vs. Times Guaranty Ltd. (2010) 4 ITR 210 (Mum.) (Trib.) (SB)

In case of block of assets, in order to allow assessee’s claim under section 32(1), use of individual asset for purpose of its business can be examined only in first year when asset is purchased and subsequent years use of block of assets is to be examined. Existence of an individual asset in block of assets itself amounts to use for purpose of business and therefore, depreciation is allowable on it, even though said asset is not actually used in course of business during relevant assessment year.

Swati Synthetics Ltd. vs. ITO (2010) 38 SOT 208 (Mum.)

Assessee following mercantile system of accounting, agreement providing for lump sum consideration for know–how is deductible, considering the meaning of "paid" in section 43(2).

Amco Power Systems Ltd. vs. ITO (2010) 3 ITR 775 (Trib.) (Bang.)

Contributions made to approved employees pension fund account based on actuarial valuation is allowable deduction.

Catholic Syrian Bank Ltd. vs. ACIT (2010) 38 SOT 553 (Kochi)

As per the amended provisions if debt has been written off as irrecoverable in accounts of assessee, it would be sufficient for claiming it as bad debts subject to condition that amount so written off has already been accounted for as income in relevant year or in earlier years.

C. B. Richard Ellis Mauritius Ltd. vs. Dy. DIT (2010) 38 SOT 236 (Delhi)

Disbursement of grants and royalty by corporation or body corporate constituted or established by Central, State or Province Act for the objects and purpose authorized by Act would be allowable as deduction under section 36(1)(xii).

Oil Industry Development Board vs. ACIT (2010) 123 ITD 67 (Delhi)

Unless the commercial expediency of the firm is demonstrated, expenditure incurred by the firm on foreign education of a partner cannot be treated as incurred wholly and exclusively for the purposes of the business of the firm but is to be treated as personal expenditure and not allowable under section 37(1).

Kohinoor Cloth Stores vs. ACIT (2010) 40 DTR 60 (Pune) (Trib.)

The assessee was engaged in the survey of ships whereby assessee’s employees would inspect various mechanical and electrical equipments in ship and ultimately issue a fitness certificate.

As the training was a continuous process because technology was fast paced and moving, expenditure incurred towards training could not be termed as fees for technical services’ and it was allowable as a business expenditure.

Lloyds Register Industrial Services (India) (Pvt.) Ltd. vs. ACIT (2010) 36 SOT 293 (Mum.)

Assessee firm acquired a premises on lease from PHPL. It paid certain amount to PHPL towards renovation and alterations carried out in premises on its behalf. The expenditure being capital in nature not allowable. The PHPL has offered the said amount as income is immaterial consideration for the assessee.

ITO vs. Pritam Juice (2010) 124 ITD 237 (Mum.)

Held, disallowance of expenditure without pointing out any specific defect, and that too when Gross Profit rate was higher that the rate in immediately preceding previous year, on ground that proper linkage of expenses was not established, cannot be sustained.

ACIT vs. Poddar Associates (2010) 189 Taxman 39 (Jaipur)

Expenditure incurred on developing and designing of the technology for substituting the existing one, to meet the ever changing needs on technological fronts, without any exclusive right, was held to be of revenue nature, despite the enduring benefit attached to the expenditure.

Unidyne Energy Env Systems (P) Ltd. vs. ITO (2010) 189 Taxman 37 (Mum.)

Interest paid for delayed payment of Service Tax is compensatory and has the same character as service tax and, therefore, it is allowable as deduction.

Dy. CIT vs. Messee Dusseldorf India (P) Ltd. (2010) 129 TTJ 81 (Del.)

Fees paid by assessee telecom company to department of telecommunication for use of licence was to be allowed as revenue expenditure.

ACIT vs. Vodafone Essar Gujarat Ltd. (2010) 38 SOT 51 (Ahd.)

The amount paid for handsets and for talktime charges were not capital in nature.

Radical Marketing Pvt. Ltd. vs. ITO, ITAT ‘SMC’ Bench, Mumbai, ITA No. 3868/Mum/2008, decided on 19-5-2009 (BCAJ 42-A, May 2010 p. 171)

Travelling and incidental expenditure in finalization of project for existing business allowable as revenue expenditure.

Jt. CIT vs. Rallies India Ltd. (2010) 3 ITR 1 (Mum.) (Trib.)

Cash payments made by the assessee for purchases of land from villagers who are engaged in farming activities and residing at places which are not served by any bank and who have no bank accounts anywhere are covered by exception under rule 6DD(h) and, therefore, same cannot be disallowed under section 40A(3).

PACL India Ltd. vs. ACIT (2010) 38 DTR 1 (JP) (Trib.)

Payment for SAP software could not be charged to tax in India as interest or royalty or fee for technical services. Even otherwise because of non-discriminatory clause 24(1) of DTAA with India and Germany, foreign national could not be subjected to provisions of section 40(a)(i). As regards depreciation which is allowable under section 32 provisions of section 40(a)(i) are not applicable.

SMS Demag (P) Ltd. vs. Dy. CIT (2010) 38 SOT 496 (Delhi)

The presence of the clause which empowered the partners to lower the remuneration or to not pay the remuneration, did not erase the other clauses which clearly laid down the amount of remuneration payable and hence such clause would not render remuneration unqualified for deduction.

Shabro International vs. Addl. CIT, ITAT E Bench, Mumbai, ITA No. 6629/M/2008, dated 20-3-2010, BCAJ p. 25, Vol. 42-A, Part 1, April 2010.

Assessee received advance money against an order which remaining unclaimed. The creditor under liquidation. Held that Assessing Officer was not justified in treating the unclaimed sum as income as it was not a trading liability.

Nash Machines & Electronics P. Ltd. vs. Jt. CIT, ITA No. 163/Pn/08, dt. 30-11-2009, ITAT `A’ Bench Pune, BCAJ p. 24, Vol. 42-A, Part 1, April 2010.

When assessee incurred loss, income cannot be computed under section 44BBA as the said section is machinery section.

Royal Jordanian Airlines vs. Dy. DIT (2010) 3 ITR 181 (Delhi)(Trib.)

Barge hire charges amounts to ‘royalty’ within the meaning of section 9(1)(vi) and under Art. 12 of DTAA, between India and Mauritius and is liable to tax in India under section 44BB. In terms of Art 5(2)(i), of DTAA between India and Mauritius each of the building site, construction project, assembly project or supervisory activities in connection therewith is to be viewed on stand alone basis and where the duration of work under each such separate contracts does not exceed the period of nine months, the assessee cannot be said to have a PE in India, even otherwise, none of the contracts were such that those could be viewed as interconnected or independent so as to call for aggregation of their duration.

Asst. Director of IT vs. Valentine Maritime (Mauritius) Ltd. (2010) 38 DTR 117 / 130 TTJ 417 (Mum.) (Trib.)

The assessee who was engaged in providing traveling and tour related services in India, entered into an agreement with a foreign company called SCNL, which was operating cruises on international waters. – As per terms of the contract, assessee was to sell cruise packages of SCNL in India and the amount collected was to be remitted back to SCNL. It was held that no Income had accrued to SCNL in India in terms of section 9 read with section 5 of the Act. Therefore the assessee was not liable to pay tax under the provisions of section 44 B of the Income-Tax Act and consequential levy of tax and interest under section 201 (1) and 201 (1A) was not justified.

Dy. IT (International Tax) vs. Star Cruises (India) Travel Services (Pvt.) Ltd. (2010) 39 SOT 18 (Mum.)

Salary paid by assessee’s head office outside India to expatriates who were actually working with the assessee outside India, is not covered by section 44C and is allowable as deduction under section 37(1).

Dy. Director of IT vs. Chouhung Bank (2010) 40 DTR 75 (Mum.) (Trib.)

Fees received by non-resident for performing services in India through a PE are taxable in accordance with Article 7 of DTAA. If Article 7 applies, S. 9(1)(vii), 44D and 115A would not apply.

Rio Tinto Technical Services vs. Dy. CIT, ITA No. 3399/Del./2002, 5372/Del./2003, 4742/Del./2004, (BCAJ 42-A, June 2010 p. 352)

Income from sale of investments by insurance company is not taxable after deletion of sub r(b) of r 5 of first schedule.

Bajaj Allianz General Insurance Co. Ltd. vs. Addl. CIT (2010) 38 DTR 282 / 130 TTJ 398 (Pune) (Trib.)

When in stock in trade is converted into capital asset, the holding period of capital asset for the purpose of computing capital gains is to be reckoned from the date of conversion of stock in trade into capital asset because prior to that date, the asset was not held as capital assets; after conversion of stock in trade of shares into capital assets, shares were not held for 12 months before sale and therefore exemption under section 10(38) was not allowable.

Lohia Metals (P) Ltd. vs. ACIT (2010) 40 DTR 246 (Chennai) (Trib.)

Where the assessee has investment in shares under the head "investment" in the balance sheet for many years and the same is accepted by the Assessing Officer in the past, there is no justification for treating the activity of the assessee of purchase and sale of shares as "business" mainly on the reason of the volume of transactions, particularly when no money has been borrowed for making investment in shares.

Bharat Kunverji Kenia vs. Addl. CIT (2010) 130 TTJ 86 (Mum.) (UO)

Transfer of shares being at face value and it is also not the case of the department that over and above that assessee has received any amount, no capital gains chargeable to tax accrued to the assessee.

Reliance Communications Infrastructure Ltd. vs. CIT (2010) 40 DTR 186 (Mum.) (Trib.)

For charging income under the head `Capital gains’ it is not necessary for an assessee to be owner of the asset transferred.

Asian PPG Inds. Ltd. vs. Dy. CIT, ITAT `A’ Bench, Mumbai, ITA No. 648/M/09, dated 9-2-2010, BCAJ p. 26, Vol. 42-A, Part 1, April, 2010

Sale of industrial unit by the assessee firm as a "going concern", in its entirety on "as is where is" basis for a lump sum sale consideration which was arrived at by profit capitalization method and is not allocable to individual assets was a slump sale of the business and not a case of itemized sale.

J. B. Electronics vs. Jt. CIT (2010) 38 DTR 393 (Pune) (TM) (Trib.)

Where buyer could not acquire any right of ownership, use or possession in corpus of property or income arising therefrom due to unauthorized occupants, provisions of section 2(47)(v), would not be attracted.

ITO vs. Satyawati Devi Verma (2010) 124 ITD 467 (Delhi)

Foreign institutional investor is assessable as per section 1115AD, and is not entitled to the benefit of indexation on the transactions resulting in long term capital gain/loss.

Advantage Advisors Inc. vs. Dy. CIT (2010) 39 DTR 217 (Mum.)(Trib.)

When interest bearing funds are utilized for making an application for allotment of shares and the number of shares allotted is less than the number of shares applied for, the entire interest is to be treated as cost of acquisition of shares allotted.

Neera Jain (Smt.) vs. ACIT, ITAT ‘B’ Bench, Mumbai, ITA No. 1861/Mum./2009, decided on 22-2-2010 (BCAJ 42-A, June 2010 p. 347)

Where itemized sale of assets and liabilities of an undertaking takes place, the nomenclature of "slump sale’’ cannot be assigned thereto and in such a case short term capital gain is to be computed in accordance with the provisions of section 50.

Harvey Heart Hospitals Ltd. vs. ACIT (2010) 130 TTJ 700 (Chennai)

Sale of industrial unit by the assessee firm as a ‘going concern’ in its entirety on ‘as is where is’ basis for a lump sum sale consideration which was arrived at by profit capitalization method and is not allowable to individual assets was a slump sale of the business and not a case of itemized sale.

J. B. Electronics vs. Jt. CIT (2010) 38 DTR 393 (Pune)(TM) (Trib.)

Assessee having sold self occupied flat and purchased a new residential house partly by taking bank loan and repaid the bank loan partly in the relevant year out of sale proceeds of the original flat, he is entitled for exemption under section 54.

Ishar Singh Chawla vs. Dy. CIT (2010) 130 TTJ 108 (Mum.) (UO)

The assessee had not incurred any cost of acquisition on a capital asset and as each ‘capital asset’ did not fall into the category of ‘capital assets’ specified in section 55(2). No capital gain would be brought to tax on sale/ transfer of it. As the assessee had not incurred any cost of acquisition in respect of additional FSI and also the revenue failed to point out any particular asset as specified in section 55 (2) which would include right to additional FSI no capital gains could be charged on its transfer by assessee.

New Shailaja Co-operative Housing Society Ltd. vs. ITO (2010) 36 SOT 19 (Mumbai) (URO.)

Assessee having borrowed money from group company and invested the same in a sister concern managed by her close associates and relative which is running in loss, the expenditure towards interest on loan cannot be said to have been laid out wholly and exclusively for the purpose of making earning income but was a colourable device, to utilize the funds of one company in the other sister concern and therefore, the interest on loan is not allowable deduction under section 57(iii).

CIT vs. Swapna Roy (Smt.) (2010) 40 DTR 193 (All)

Section 50C creates a legal fiction for taxing capital gains in lands of seller and it cannot be extended for taxing difference between apparent consideration and valuation done by stamp authorities as undisclosed investment under section 69 and 69B.

ITO vs. Harley Street Pharmaceuticals Ltd. (2010) 38 SOT 486 (Hyd.)

Where assessee company was engaged in business of financing, trading in paper, shares and real estate and highest funds were employed in investment activities while principal business was of granting loans and advances, merely because income / loss in dealing in shares in a particular year was more than income/loss from principal business of granting loans and advances, assessee was not covered by deeming provisions of explanation to section 73.

ITO vs. Bijay Paper Traders & Investments Ltd. (2010) 38 SOT 578 (Delhi)

For the purpose of deciding wheather the case of assessee is covered by exception provided in explanation to S. 73, speculation loss is to be excluded while computing business income and arriving at the gross total income.

Paramount Information Systems Pvt. Ltd. vs. ITO ITAT ‘K’ Bench, Mumbai, ITA No. 921/Mum/2008, decided on 24-2-2010 (BCAJ 42-A, May 2010 p. 169)

Any speculation loss computed for A. Y. 2006-07 and latter assessment years alone would be hit by the amendment made w.e.f. 1-4-2006 by Finance Act 2005 to section 73(4). Limit of carry forward of subsequent assessment years applies only to such loss.

Virendra Kumar Jain vs. ACIT, ITA No. 1009/Mum/2010 Asst. Year 2006-07 Bench ‘B’ dt. 31-5-2010. (BCAJ July P. 42 (493 (2010) 42A BCAJ)

Section 79 of the Act is applicable if 51% of the voting power is beneficially held during the year under reference by persons who held such voting power during the year in which the loss had incurred. Since the board of directors of APIL were controlled by ABL, holding company the voting power of APIL was controlled by ABL and beneficially held by ABL, the assessee was entitled to set-off of carry forward business loss.

Amco Power Systems Ltd. vs. ITO (2010) 3 ITR 775 (Bang.) (Trib.)

For computing deduction under section 80HHC the amount of deduction allowed under section 80-IB has to be reduced from the eligible profits.

ITO vs. Neetee Clothing (P) Ltd. (2010) 129 TTJ 342 (Del.)

Deduction under section 80HHC would not be available on the counter sale to the foreigner in convertible foreign exchange unless customs clearance in India is proved by the assessee.

Tribhuvandas Bhimji Zaveri (Delhi) vs. CIT (2010) 123 ITD 31 (Mum.)

Expansion of production capacity of the existing unit by merely adding some equipments when raw material finished products, employees electric connection, maintenance of books of account etc. are all common and cannot be identified with new or old plant, did not constitute setting up of new industrial undertaking eligible for deduction under section 80HH and 80I.

Jt. CIT vs. Thirani Chemicals Ltd. (2010) 38 DTR 137 (Del.) (SB) (Trib.)

Assessee not being the owner of the software that came to be developed as a result of the services provided by it in connection with the production of a film produced by the foreign company, there was no export or transfer of film software by the assessee and therefore, it is not entitled to deduction under section 80HHF in respect of the fixed fee received for the services rendered by it.

Kas Movie Makers (P) Ltd. vs. CIT (2010) 38 DTR 121 (Del.)

Service income, income from music were operational income hence entitled to deduction under section 80HHF.

ACIT vs. Set India Pvt. Ltd. (2010) 3 ITR 454 (Mum.) (Trib.)

While computing deduction under section 80IA(4C), attributing the income in the ratio of old and new telephone exchanges is not proper, in view of complete revolution after 1995 in the telephone sector, most of the income is attributable to new exchanges and therefore, seventy five percent of the income from various services to be treated as having been served by virtue of new exchanges and 25 percent of the income to be attributed to the old exchanges.

Mahanagar Telephone Nigam Ltd. vs. ACIT (2010) 130 TTJ 497, 39 DTR 57 (Delhi) (Trib.)

Deduction in respect of profit of power generating undertaking generated by eligible unit captively consumed valuation at market price. Rates charged by the State Electricity Board, including the electricity tax levied thereon, adopted as a benchmark to arrive at the market value and CIT was not right in excluding the electricity tax to arrive at the market value.

DCW vs. ACIT, ITAT ‘D’ Bench Mumbai, ITA No. 126/Mum./2008, decided on 29-1-2010 (BCAJ 42-A, May 2010 p. 170)

Profit made by assessee by assignment of its deferred sales-tax liability being chargeable to tax under section 41(1), is in the nature of business income and the assessee having set up its industrial undertaking in that area in order to reap the benefit of the deferred sales-tax scheme formulated by the State Government, such gain has to be treated as derived from the industrial undertaking and, therefore, assessee is entitled to deduction under section 80IA thereon.

MIRC Electronics Ltd. vs. Dy. CIT (2010) 38 DTR 441 (Mum.) (Trib.)

Assessee having entered in to an agreement with OSHB, lessee of a plot, on principal to principal basis for constructing a multi–storeyed residential complex whereby it was assigned the right to use, develop, construct. sell or transfer the saleable area, it was not a contractor at all and therefore, deduction under section 80IB(10), is allowable to the assessee, notwithstanding the fact that the approval for developing the housing project was given by the competent authority in favour of OSHB.

KZK Developers vs. CIT (2010) 130 TTJ 57 (Cuttack) (UO)

Assessee constructing residential units some of which were above specified limit and some below such limit. Assessee entitled to deduction in respect of residential units below specified area.

SJR Builders vs. ACIT (2010) 3 ITR 569 (Bang.) (Trib.)

Assessee undertaking engaged in development of housing projects could not be denied deduction under section 80IB, on the ground that it failed to fulfill all conditions of "industrial undertaking", as prescribed by sub section (2) of section 80IB. In cases where the built up area of flats exceeded 1000 square feet, the exemption can not be denied entirely, assessee will be eligible for proportionate deduction.

C. V. Corporation vs. ITO (2010) 38 SOT 174 (Mum.)

There was a complete transformation of original raw materials so as to produce a commercially different product, the assessee was entitled to deduction under section 80-IB of the Act.

ACIT vs. Vinayagar Silks (P.) Ltd. (2010) 39 SOT 51 (Chennai)

Assembling activity of wind mill of the assessee were covered under the definition of "manufacture" and "production". All workers whether permanent or causal, employed by the assessee in the manufacturing process as well as in subsidiary activities are to be counted for determining compliance with the requirement of Act. If ten or more workers were employed for substantial part of the working period of factory, it would be sufficient compliance with the condition. The section talks of workers and not employees.

Chiranjjeevi Wind Energy Ltd. vs. ACIT (2010) 4 ITR 9 (Chennai) (Trib.)

Since funds kept in bank could be said to be ready for utilization by assessee in its business for providing credit facilities to its members, income from monies kept in bank could be said to be attributable to business of providing credit facilities so as to fall within ambit of section 80P(2)(a)(i).

Punjab State Co-operative Federation of Housing Building Societies Ltd. vs. ACIT (2010) 38 SOT 284 (Chd.)

Deduction under section 80HHC is not available to non-resident.

Mustaq Ahmed vs. ADIT (2010) 124 ITD 312 (Chennai)

Since the agent is only performing the functions of soliciting orders for sale of assessee’s products and promoting the sales, while all other main or core activities regarding arrangement or acquisition of products are performed in Singapore at least 10 per cent of the profit earned from the activities of sale of spares by the assessee company to Indian customers can be said to be attributable to PE in India.

Rolls Royce Singapore (P) Ltd. vs. Addl Director of IT (2010) 40 DTR 289 (Del.) (Trib.)

Despite cessation of PE, gains on transfer of PE asset taxable under Act and DTAA

Cartier Shipping vs. DDIT (ITAT Mumbai) (Source: www.itatonline.org)

In terms of Art. 5(2)(i) of DTAA between India and Mauritius, each of the building site, construction project, assembly project or supervisory activities in connection therewith is to be viewed on standalone basis and where the duration of work under each such separate contracts does not exceed the period of nine months, the assessee cannot be said to have a PE in India, even otherwise, none of the contracts were such that those could be viewed as interconnected or interdependent so as to call for aggregation of their duration.

Asstt. Director of IT vs. Valentine Maritime (Mauritius) Ltd. (2010) 38 DTR 117 (Mum.) (Trib.)

For the purpose of determining the applicability of the threshold time-limit under Art. 5(2)(i), of the Indo-Mauritius DTAA, what is to be taken in to account is the duration of the activities of the foreign enterprise on a particular site or a particular project or supervisory activity connected therewith, on a standalone basis and not all the activities in a tax jurisdiction as a whole.

JRAY McDermott Eastern Hemisphere Ltd. vs. Jt. CIT (2010) 38 DTR 161 (Mum.) (Trib.)

No PE under DTAA if three criteria are not fulfilled.

Airlines Rotables Ltd. vs. JDIT (2010) 40 DTR 226 / 131 TTJ 385 (Mum.) (Trib.)

Income of assessee, a tax resident of Singapore having been taxed in India, denying the benefits of Article 8, without examining the issue whether the assessee had a PE in India within the meaning of Article 7, matter remanded for examining the issue of PE and assessment accordingly.

J. M. Baxi & Co. vs. Dy. Director of IT (2010) 39 DTR 1 (Mum.) (Trib.)

It is not necessary that unless a person be taxed in the UAE that person cannot claim the benefits of Indo-UAE tax treaty in India, what is really relevant to see is whether or not the recipient was resident of the UAE.

Hindustan Petroleum Corporation Ltd. vs. ADIT (2010) 130 TTJ 518 (Mum.)

No income arises to the foreign company in India in the course of deputing personnel to an Indian company, who work under the control and supervision of the Indian company and thus become employee of the Indian company. Amount of salary of deputed employees reimbursed to the foreign company is not taxable in India.

DDIT vs. Tekmark Global Soutions LLC, ITAT Mumbai, ITA No. 671/2007, decided on 23-2-2010, (BCAJ 42-A, May 2010 p. 171)

Activity which is directly related to transportation of passengers by assessee as owners / lessee / charter of aircraft would alone fall within the ambit of para. 2(b) of Article 8 of Indo-US Treaty. Deposit of amount in FDR could not be said to be connected with operation of aircrafts para 5 of Article 8 would not apply.

Asst. DIT vs. Delta Airlines Inc. (2010) 124 ITD 114 (Mum.)

While determining ALP by adopting TNMM against retail price method adopted by the assessee, the tax authorities below have not conducted the independent study by choosing their own comparables and in relying on six comparables out of seven comparables used by the assessee for applying retail price method have not done proper screening of such comparables and therefore, the matter is restored to the Assessing Officer for de novo consideration.

AXALTO Cards & Terminals India Ltd. vs. ACIT (2010) 40 DTR 113 (Del.) (Trib.)

Merely because a comparable is making losses, it cannot be excluded for purposes of computation of arm’s length price. Even at the stage of appeal before the Tribunal the assessee is entitled to raise the plea that the comparable was wrongly taken. Matter was remanded to Assessing Officer to re-do the assessment done.

Dy. CIT vs. Quark Systems (P) Ltd. (2010) 38 SOT 307 (Chd.)(SB)

In view of parameters prescribed in Rule 10B, bad debt written off cannot be a factor to determine arm’s length price of any international transaction.

CA Computer Associates (P) Ltd. vs. Dy. CIT (2010) 37 SOT 306 (Mum.)

TPO in the instant case had not followed the mandate of the Act. No method has been specified. Under these circumstances, the adjustment made by the TPO under section 96A(3) could not be sustained. Even on merits assessee had not charged interest on fees receivable by it from WSN, where as it had charged interest on loan granted to NCWN. On facts charging of interest on loan granted is different from charging interest on bills raised for services rendered. Both are not comparable. Thus additions were deleted.

Nimbus Communications Ltd. vs. ACIT (2010) 38 SOT 246 (Mum.)

Economic and market conditions of Thailand and Vietnam being totally different, adjustments for volume offtake, credit period and credit risk though material are not sufficient to make the sale price to AE in Thailand comparable with the sale price to unrelated party in Vietnam, unless suitable adjustments are made for disparity between the two transactions and therefore, matter is set aside to the CIT(A) for deciding the same afresh.

Intervet India (P) Ltd. vs. ACIT (2010) 38 DTR 422 (Mum.) (Trib.)

Assessee earned service fees from principal at 12.5% of net advertisement revenue receipt. In the case of principal the same has been accepted at arm’s length price. Computation at 15% of gross revenue receipt not justified.

ACIT vs. Set India Pvt. Ltd. (2010) 3 ITR 454 (Mum.) (Trib.)

Assessee’s TP study cannot be rejected lightly, "comparables" have to be comparable on all parameters, no incentive to shift profits offshore if tax rates there are higher.

Dy. CIT vs. Indo American Jewellery (2010) 40 DTR 386 / 131 TTJ 163 (Mumbai) (Trib.)

The conditions spelt out in clauses(a), (b) and (c) are cumulative and not alternative. Purchase of units within a period of less than three months from the record date, but sale beyond a period of three months loss cannot be ignored.

CIT vs. Alka Bhosle (Smt.) (2010) July BCAJ 49 ITA No. 2656 of 2009 dt. 9-6-2010 (Bombay High Court) 500 (2010) BCAJ 42A.

For the A. Y. 2005-06, in view of introduction of section 111A, choice has been left over to the assessee in taking decision about setting off of short term capital loss from one transaction against any other short term capital gain whether within or outside the cut-off date.

First State Investments (Hongkong) Ltd. vs. Asst. Director IT (2010) 40 DTR 415 (Mum.) (Trib.)

A company registered under section 25 of the companies Act, whose income is exempt under principles of mutuality cannot be brought within the purview of section 115JB.

Delhi Gymkhana Club Ltd. vs. Dy. CIT (2010) 39 DTR 48 (Del.) (Trib.)

Defect of not signing the return by proper person makes the return defective and not invalid. The matter restored to remove the defect.

Morgan Stanley Asset Management Inc vs. Dy. CIT (2010) 39 DTR 240 (Mum.) (Trib.)

Assessing officer had issued notice under section 143(2), after expiry of twelve months from the end of month in which return was filed, notice issued was barred by limitation and therefore, assessment made in pursuance of said notice was quashed.

Dy. CIT vs. National Refinery (P) Ltd. (2010) 38 SOT 36 (Mum.)

Assessee, a Foreign company, having maintained its accounts on mercantile basis in respect of all its transactions, it has to determine its taxable income in India only on the basis of mercantile system of accounting.

Rolls Royce Singapore (P) Ltd. vs. Addl. Director of Income Tax (2010) 40 DTR 289 (Del.)(Trib.)

(i) Deduction under section 80HHC could be claimed in re-assessment, as the business income turned into positive business income due to certain disallowances under section 43B and 14A, eventhough the deduction was not claimed in the original return as there was no positive business income. In the circumstances it is well within its right to file the required audit report at the time of making such claim.

(ii) Section 147 being for the benefit of the revenues, the assessee cannot be permitted to convert the reassessment proceeding into an appeal or revision in disguise, and seek relief in respect of items earlier rejected or claim relief in respect of items not claimed in the original assessment proceedings, unless relatable to escaped income.

ITO (OSD) vs. Tamilnadu Minerals Ltd. (2010) 124 ITD 156 (Chennai)(TM)

Inflated profits shown in Profit and Loss filed with bankers to avail credit facility cannot be treated as Income escaping Assessment under section 147, and it is not proper to treat documents filed with banks as always sacrosanct, as Assessing Officer has to make his own Assessment.

ACIT vs. Mangalam Publications (2010) 190 Taxman 1 (Kochi)

Reassessment completed by an Assessing Officer on the basis of a notice under section 148 issued by another Assessing Officer who had no jurisdiction over the assessee is not valid.

K.B. Kumar Dr. (Mrs.) vs. ITO, ITAT ‘D’ Bench Delhi, ITA No. 4436/Del/09, dated 20-1-2010, BCAJ p. 49, Vol. 42-A, Part 3, June, 2010 p. 348

Once the assessee has disclosed fully and truly all material facts then notice under section 148 after four years is not valid.

C. D. Singh vs. ITO (2010) 129 TTJ 495 (Ahd.)

Joint warrant in name of assessee and another party is permissible. Search in purulent of search is valid.

Rajat Tradecom India Pvt. Ltd. vs. Dy. CIT (2010) 3 ITR 321 (Indore) (Trib.)

S. 153A order void if search warrant in improper status. Assessee can retract admission of undisclosed income.

Mansukh Kanjibhai Shah (Dr). vs. ACIT (ITAT Ahmedabad) (Source: www.itatonline.org)

Assessing Officer having not examined the alleged donor nor put specific question in respect of such credit to his father, addition could not be made by treating the gift as bogus.

M. Balakrishna Hegde vs. Dy. CIT (2010) 38 DTR 345 (Bang.) (Trib.)

Assessing officer of searched person should record his satisfaction that undisclosed income found during search belonged to such person. If no satisfaction recorded block assessment was invalid.

Dy. CIT vs. Flair Builders P. Ltd. (2010) 3 ITR 158 (Delhi) (Trib.)

When it is mentioned in the block assessment order that "penalty proceedings have already been initiated separately" there is a valid initiation of penalty proceedings under section 158BFA(2).

Sunil Dua vs. Dy. CIT (2010) 130 TTJ 313 (Del.)

When non-resident does not remain in India and therefore, proceedings under section 160 to 163 are taken to fasten on its agent in respect of income which non-resident is entitled to assessee carried on business of asset management. It had made payments to non-residents upon redemption of units of a debt scheme of Birla Mutual fund without any deduction at source. Since payments were made through assessee to non-residents in terms of section 163(1)(c), assessee was to be treated as agent of said non-residents so that assessment proceedings could be taken against assessee in regard to tax liability of non-resident investor.

Birla Sunlife Asset Management Co. Ltd. vs. ITO (2010) 38 SOT 523 (Mum.)

Business of the erstwhile firm having been taken over and continued by a company there was no discontinuation of business and therefore, the amount of arbitration award pertaining to the claim made by the firm cannot be taxed in the hands of partners by invoking the provisions of section 176(3A). Section 189 also would not be invoked said award cannot be taxed also in the hands of alleged AOP.

ITO vs. Jalamsingh B. Barad (2010) 130 TTJ 573 (Ahd.)

Finance agreement of assessee with producer/director of films is not a contract within the meaning of section 194C, but only a financing arrangement therefore neither section 194C nor section 194J is applicable for composite contracts for financing film project.

Entertainment One India Ltd. vs. ITO (2010) 39 DTR 26 (Mum.) (Trib.)

When payment made to labourer through their representative, single payment not exceeding Rs. 20000/-. Tax need not be deducted at source.

Dy. CIT vs. Laxmi Protein Products P. Ltd. (2010) 3 ITR 768 (Ahd.)(Trib)

Discount allowed by the company to it’s distributors, called as PMAs, for prepaid calling services would not fall under the definition of ‘commission or brokerage’ as the contract was in the nature of sale and not a contract of agency and therefore, no liability to deduct tax at source under the provisions of section 194H on such payments.

Idea Cellular Ltd. vs. Dy. CIT (2010) 123 ITD 620 (Delhi)

License fee paid towards utilization of production facilities including use of all facilities, utilities, machines, factory, office premises, tools, equipments and residential quarters with right to sub-let or under-let whole or part of the premises would fall within the definition of ‘rent’ as prescribed in Explanation (i) to section 194-I.

J. C. Bansal vs. Tax Recovery Officer (2010) 123 ITD 245 (Indore)

Grossing up was done by Assessing Officer presumably on the basis that advance tax paid by employer, where as it was paid by assessee himself and therefore, grossing up of tax liability was not valid.

CIT vs. Tadashi Murakami (2010) 40 DTR 191 (Del.)

Despite TDS under section 195, payer is liable as "agent" under section 163. However, if payee is assessed, payer cannot be assessed as "representative assessee".

Hindalco Industries vs. Dy. CIT (ITAT Mumbai) (Source: www.itatonline.org)

Logistic services rendered off-shore though utilized in India. Indian company not liable to deduct tax at source.

Sun Microsystems India Pvt. Ltd. vs. ITO (2010) 3 ITR 808 / 130 TTJ 597 / 39 DTR 69 (Bang.) (Trib.)

Relying upon the ratio laid down by the Hon’ble Supreme Court, in case of Padmasunddara Rao vs. State of Tamil Nadu (2002) 255 ITR 147, that " A statute is the edict of the Legislature. The language employed in the statute is a determinative factor of Legislature intent. The first and primary rule of construction is that the intention of the Legislature must be found in the words used by Legislature itself.", it could be said that the provisions of section 195 would not apply to payment made to a resident of foreign country for supply of any material or engine with its invention, technical know-how etc. as it would not be deemed payment of fee for technical services within the meaning of Explanation 2 to section 9(1)(vii).

Hindustan Aeronautics Ltd. vs. ITO (2010) 123 ITD 575 (Bang.)

When a particular income is received by assessee after deduction of tax at source and TDS has been duly deposited with Government and assessee received requisite certificate to this effect, on production of certificate assessee becomes entitled to credit of TDS, even if assessee has not directly offered said income for tax as assessee considers that same is not liable to tax.

Supreme Renewable Energy Ltd. vs. ITO (2010) 124 ITD 394 (Chennai)

Assessee is not liable to pay interest under section 234B when by retrospective amendment made later the amount becomes taxable. Administrative relief canbe obtained by the assessee cannot erode the powers of the tribunal while dealing with the valid appeal laid before it.

Sun Petrochemicals Pvt. Ltd. vs. ITO, ITAT ‘D’ Bench, Ahmedabad ITA No. 1010/Ahd./2009, decided on 5-6-2009 (BCAJ 42-A, May 2010 p. 168)

Appeal against assessment made consequent to order passed under section 264 is maintainable under section 246A, but only to the extent of issues which have not attained finality in order passed under section 264.

A. Naresh Babu (Dr.) vs. ITO (2010) 124 ITD 28 (Hyd.)

What the Assessing Officer could have done but omitted to do, now can be done by the CIT(A) while disposing of the appeal; validity of return could be considered by CIT(A) from different angle than that done by Assessing Officer.

Morgan Stanley Asset Management Inc. vs. Dy. CIT (2010) 39 DTR 240 (Mum.) (Trib.)

An appellate authority cannot give direction or finding in respect of other years, direction or finding can be given only in respect of year or period which is before the authority.

Sun Metal Factory (I) (P) Ltd. vs. ACIT (2010) 124 ITD 14 (Chennai)

Cross objection at assessee’s instance in its own appeal is not maintainable.

Vidya Institute vs. CIT (2010) 3 ITR 491 (Delhi) (Trib.)

Where the delay in filing the appeal before the Tribunal was caused due to the pendency of the application under section 154 before the CIT(A) and the assessee has shown just and sufficient cause for the delay in filing the appeal, Tribunal was not justified in refusing to condone the delay.

Subhash Malik vs. CIT (2010) 39 DTR 245 (All)

If a member has already taken a view, it would be interest of judicial discipline to rescue himself from hearing of instant appeal. Issue of allowability of depreciation on goodwill is kept pending till the decision of High Court.

CLC & Sons (P) Ltd. vs. ACIT (2010) 38 SOT 439 (Delhi) (SB)

Assessee having claimed deduction under section 36(1)(vii), Tribunal was empowered to deal with the issue of allowability of the impugned amount as an expenditure under section 37(1).

CIT vs. Khaitan Chemicals & Fertilizers Ltd. (2010) 38 DTR 86 (Del.)

There is no impediment on the power of Tribunal to consider the issue from a different angle and it can as well examine the validity of the return; while examining the validity of return, all the aspects concerning it are open for inspection by the Tribunal.

Morgan Stanley Asset Management Inc. vs. Dy. CIT (2010) 39 DTR 240 (Mum.) (Trib.)

If facts are on record before the Assessing Officer, claim of bad debt in the form of letter has to be considered.

Franco-Indian Pharmaceutical Pvt. Ltd. vs. ITO (2010) 3 ITR 754 (Bom.) (Trib.)

Tribunal was not justified in dismissing the revenue’s appeal mechanically, merely to maintain consistency, disregarding several issues decided by the Assessing Officer, more so when the tax effect was substantial. It should have dealt with the issues adjudicated by the Assessing Officer by passing reasoned order instead of relying upon the out come of the earlier assessment year.

CIT vs. Swapna Roy (Smt.) (2010) 40 DTR 193 (All)

Retrospective amendment after passing order does not lead to "apparent mistake".

ACIT vs. GTL Ltd. (ITAT Mumbai) (Source : www.itatonline.org)

What is to be considered for computation of the capital gain is ‘full value of the consideration received or accruing’ – ‘Full value of the consideration’ is totally different than the concept of the ‘fair market value’ – After the deletion of section 52 there is no other provision, for adopting or substituting the ‘market value’ in place of the consideration or sale price of shares declared by the assessee – Where shares were transferred at face value and it is also not the case of the Department that over and above that assessee has received any amount, and the Assessing Officer determined the capital gains arising from such transfer at ‘nil’, such order not being erroneous, the CIT erred in revising the same, holding it to be erroneous and prejudicial to the interest of the Revenue.

Reliance Communications Infrastructure Ltd. vs. CIT(2010) 40 DTR 186 (Mum.) (Trib.)

Once the view taken by the Assessing Officer is one of the possible views then the order of Assessing Officer cannot be termed as erroneous.

Hindustan Shipyard Ltd. vs. Dy. CIT (2010) 130 TTJ 76 (Visakhapatnam)

(i) Mere change of head of income in assessment cannot be construed as concealment as envisaged in section 271(1)(c).

(ii) Addition on account of valuation alone cannot be the basis to construe concealment for the purpose of penalty under section 271(1)(c).

CIT vs. JMD Advisors (P.) Ltd. (2010) 124 ITD 223 (Delhi)

Assessee having entered into an artificial arrangement of so called purchase and lease back transaction to evade tax liability and the transaction having been found to be a bogus transaction, penalty under section 271(1)(c) is leviable.

Ultramarine & Pigments Ltd. vs. ACIT (2010) 38 DTR 42 (Mum.) (Trib.)

Mere fact that the Assessing Officer had treated the business loss as speculative loss did not automatically result in the inference of concealment of income justification of penalty.

CIT vs. Aretic Investment (P) Ltd. (2010) 39 DTR 243 (Del.)

Where the assessee entered into an artificial arrangement to evade tax liability and it was found to be a bogus transaction of purchase and lease back, penalty under section 271(1)(c) is leviable.

Ultramarine & Pigments Ltd. vs. ACIT (2010) 130 TTJ 31 (Mum.)

In the absence of any falsity in the details submitted by the assessee regarding computation of income, penalty under section 271(1)(c) is not leviable in respect of inadvertent wrong claim made by assessee for adjusting the long term capital loss against short term capital gains.

Mahinder Sidhu (Mrs.) vs. ACIT (2010) 39 DTR 233 (Del.)(Trib.)

Where the claim of deduction was made on the basis of advice of the tax consultant supported by tax audit report, there is no concealment or furnishing of inaccurate particulars on the part of the assessee and therefore penalty under section 271(1)(c) cannot be levied merely because the claim of deduction is disallowed in assessment proceedings.

Yogesh R. Desai vs. ACIT (2010) 38 DTR 101 (Mum.) (Trib.)

Penalty under section 271(1)(c) is not leviable on assessee for wrongly claiming deduction under section 80-IB on export incentive i.e., DEPB and duty drawback.

ITO vs. Flora Exports. (2010) 40 DTR 70 (Del.) (Trib.)

Loan was taken in cash because it wanted to purchase a piece of agricultural land for developing the same as business proposition. It was further stated that there was an advantage of negotiating for purchase of agricultural land with ready cash backing. Besides when deal fell through, assessee deposited cash in bank and issued a cheque for discharging liability of loan. As the explanation offered by the assessee could not be regarded as improbable or impossible the penalty levied was deleted.

Jitu Builders (P) Ltd. vs. Addl. CIT (2010) 124 ITD 134 (Ahd.) (TM)

Assessee taking money in cash from his parents out of business expediency, penalty under section 271D, cannot be levied.

Swapan Dutta vs. Jt. CIT (2010) Tax L.R. 166 (Kol.) (Trib.)

Invalid issuance or service of notice under section 148 cannot be said to be a procedural defect and it can not be cured by participation of the assessee in the reassessment proceedings.

Aru Lal vs. ACIT (2010) 124 ITD 85 (Agra)(TM)

Bar provided under section 80IA(3), is in relation to the formation of undertaking and once the formation is complete, the development of undertaking cannot be put under restrain of section 80IA(3). If for A. Y. 2004-05, the assessee has been granted the claim of deduction under section 80IA(4)(ii), the same cannot be denied for the subsequent assessment year by applying the restraint of section 80IA(3), further the provisions of section 80IA(3) apply to section 80IA(4)(ii), only from A. Y. 2005-06 and not retrospectively.

Tata Communications Internet Services Ltd. vs. ITO (2010) 130 TTJ 509 (Del.)

Building was held as stock in trade it could not be included in definition of "asset" as per section 2(ea) even though pending completion of sale transaction and it was given on rent to purchasing party.

Dy. CWT vs. Brilliant Estate Ltd. (Indore) (2010) 124 ITD 8 (Indore)

Debts secured on the land could not be considered as incurred in relation to such land in order to be entitled for deduction under section 2(m).

Phoenix International Ltd. v. Dy. CWT (2010) 129 TTJ 734 (Del.)