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74. Appellate Tribunal –
Additional Ground – S. 254(1)
Where neither during the
assessment proceedings, nor during the appellate proceedings before the CIT(A),
the revenue had invoked the provisions of section 14A of the Act with respect
to expenditure incurred for earning exempt dividend income and further, there
was no material before the Tribunal, which would have permitted it to take up
the additional ground pertaining to section 14A, the Hon’ble High Court on
theses facts held that the Tribunal was justified in rejecting the plea of the
revenue to raise additional ground pertaining to section 14A of the Act for
disallowing expenditure incurred for earning exempt dividend income.
CIT vs. Hindustan Tin Works
Ltd. (2009) 24 DTR 88 (Del.) (A.Y.: 2001 – 02)
75. Assessment – Prima facie
adjustment – S. 143(1)(a)
Issue as to funding of
outstanding interest by a fresh loan would or would not amount to payment of
interest is a debatable issue. Disallowance under section 43B cannot be made
by way of prima facie adjustment under section 143(1)(a) of the Act.
Vinir Engineering (P) Ltd.
(2009) 22 DTR 107 (Karn.) (A.Y. 1997-98)
76. Audit Report – S. 10B(5)
Filing of Audit Report under
section 10B(5) along with the return is directory and not mandatory.
CIT vs. Web Commerce (I) P.
Ltd. (2008) 178 Taxman 310 (Del).
77. Bad debts – S.
36(1)(vii)
The Assessing Officer
disallowed the claim of bad debt which was written off by the assessee. But
the learned CIT(A) deleted the said disallowance. Further, the Hon’ble ITAT
confirmed the said deletion.
On appeal by the Department
in High Court, the Court held that the provisions of section 36(1)(vii) of the
Income-tax Act, 1961 were to be read with the Board Circular No. 551 dt.
23-1-1990 and if the assessee had written off the debt as a bad debt, that
would satisfy the purpose of the section. The High Court dismissed the appeal.
CIT vs. Star Chemicals
(Bombay) P. Ltd. (2009) 313 ITR 126 (Bom.)
Amendment to section
36(1)(vii) of the Income-tax Act, 1961. Whether obligatory for the assessee to
prove that debt has become bad as long as writing off was bonafide.
The High Court held that to
treatment of the debt as a bad debt had to be a commercial or business
decision of the assessee depending on the relevant material in possession of
the assessee.
Once the assessee records
debts as bad debt in the books of account that would prima facie prove that it
was a bad debt unless the Department for good reasons holds to the contrary.
Once that is accepted, then
the assessee would not be called upon to discharge any further burden. After
the amendment, it was neither obligatory nor the onus on the assessee to prove
that the debt written off it was in reality a bad debt as long as it was
bonafide and based on commercial wisdom or expediency.
The Hon’ble High Court
affirmed the view of the Special Bench decision in Dy. CIT vs. Oman
International Bank Saog.
Director of Income-tax
(International Taxation) vs. Oman International Bank (2009) 313 ITR 128 (Bom.)
(Asst. Years: 1994-95, 2000-01) (2007) 223 CTR 382 (Bom.)
78. Block assessment –
Limitation – S. 158BE
Search action in case of the
assessee was concluded on 5-8-2000 and panchnama seizing stock was also
prepared on the same day. Thereafter, on 20-9-2000 the authorities had only
inspected the seals and again prepared a panchnama. The Hon’ble High Court on
these set of facts held that the second panchnama was prepared by the revenue
authority to just overcome the limitation period and the block assessment
order passed by the assessing officer was barred by limitation.
CIT vs. Plastika Enterprises
(2009) 23 DTR 333 (Bom.)
79. Block assessment –
Notice – Ss. 143(2), 158BC
In case of block assessment
if the assessing officer is not inclined to accept the return of undisclosed
income filed by the assessee, then the prescribed procedure under section
143(2) of the Act is to be followed. Thus, the assessment order passed by the
assessing officer without issuing notice under section 143(2) of the Act,
would be invalid and not merely irregular.
CIT vs. Pawan Gupta & Ors.
(2009) 22 DTR 291 (Del.) (Block period: 1-4-1986 to 10-10-1996)
80. Block assessment –
Undisclosed income – S. 158B
Where the assessee had
maintained regular books of account and the returns of income were filed
regularly before the date of search and no incriminating documents were found
during the course of search addition on account of peak credit of farmer’s
account was beyond the scope of block assessment and liable to be deleted.
CIT vs. Rajendrakumar (2009)
24 DTR 191 (MP) (Block Periods: 1-4-1995 to 5-12-2001)
81. Block Assessment –
Issues of Notice – S. 158BC
Where the amount is received
by the assessee on sale of plot of land through proper banking channel and the
gain on such sale was depicted in her return prior to issue of notice under
section 158BC of the Act the income could not be treated as unexplained
deposit.
CIT vs. Smt. Shakuntala Devi (2009) 23 DTR 238 (Del.) (A.Y. 2002-03)
82. Business Expenditure –
Termination of lease – S. 37
Amount paid to landlord for
premature termination of lease is an expenditure on account of commercial
expediency and hence entitled for deduction under section 37.
Microsoft Corporation of
India (2009) 210 Taxation 161 (Del). (A.Y. 2000-01)
83. Business Expenditure –
Capital or Revenue – S. 37(1)
Advance lease rental (Rs. 48
crores) paid by the assessee for acquiring land on lease for ninety nine (99)
years was allowable as revenue expenditure.
Dy. CIT vs. Sun
Pharmaceutical Ind. Ltd. (2009) 24 DTR 262 (Guj.) (A.Y. 1994-95)
84. Business Expenditure –
Capital or Revenue – Consultation charges – S. 37(1)
Consultation charges paid by
the assessee in connection with the expansion of assessee’s existing project
were held to be allowable as revenue expenditure.
Jyoti Ltd. vs. CIT (2009) 24
DTR 177 (Guj.) (A.Y. 1985-86)
85. Business Expenditure –
Capital or Revenue – S. 37(1)
Where there is no finding
that the assessee acquired any enduing benefit or that the software will not
become outdated due to passage of time, expenditure incurred by the assessee
on computer software was allowable as revenue expenditure.
CIT vs. Varinder Agro
Chemicals Ltd. (2009) 22 DTR 127 (P & H) (A.Y.: 2002-03)
86. Business expenditure –
Genuineness –
S. 37(1)
Where the assessee had made
payments for purchase of raw material by account payee cheques and the same
were found to be credited into the bank accounts of respective parties, the
payments made to these parties cannot be disallowed merely because summons
issued upon these parties after the lapse of a considerable time could not be
served upon them at the given address. The Court further observed that as the
bank statements of the parties to whom the payments were made by the assessee
were available with the assessing officer, he could have made endeavour to
serve summons to these parties on the address given to the banks and verified
the fact of payments.
CIT vs. Hi Lux Automotive (P)
Ltd. (2009) 23 DTR 385 (Del.) (A.Y.: 1996-97)
87. Business Expenditure –
Revenue or Capital – Development of Computer Software – S. 37
Whether the expenses made
towards the development of computer software is a Revenue Expenditure – Held,
yes. Any expenses made towards computer software are Revenue expenditures.
CIT vs. Varinder agro
Chemicals Ltd. (2009) 224 CTR 326 (P & H)
88. Business Expenditure –
Labourers or workers – S. 37
Payments made to workers
through labourers or worker’s union. The said expenses incurred during the
course of business as per trade practice.
CIT vs. Konkan Marine Agency
(2009) 313 ITR 308 (Kar.) (Asst. Year: 1996-97)
89. Business expenditure –
Actual Payment – Ss. 43B, 2(24)(x) r.w.s. 36(1)(va)
The assessee company claimed
deductions for the Asst. Year 1990-91 in respect of contributions made to the
provident fund, Employee’s provident fund and ESIC.
Income-tax Tribunal allowed
all of them. On appeal by the Department High Court, the Hon’ble High Court
held as under.
The assessment in question
was Asst. Year 1990-91. The amendment is made applicable from the Asst. Year
2004-05 as far as provident fund dues are concerned. However, the section as
it stood earlier was that the Employer’s contribution to provident fund if not
paid within the due date the employer was not entitled to deduction.
The Hon’ble High Court
further held that the contribution of provident fund dues after closing of the
accounting period, but before due date of filing returns are made, then also
it was not allowable as deduction.
CIT vs. Pamwi Tissues Ltd.
(2009) 313 ITR 137 (Bom.) (Asst. Year: 1990-91)
90. Business Expenditure –
Interest on borrowed capital – S. 36(1)(iii)
The assessee company claimed
deduction of interest on borrowed capital. The Assessing Officer noted that
the sum of Rs. 213 crores was invested out of its own funds and Rs. 147 crores
was invested out of borrowed funds. Accordingly, he disallowed interest
amounting to Rs. 4.40 crores. The learned CIT(A) found that the assessee had
sufficient interest free funds at its disposal for investment and accordingly
deleted the said disallowance of Rs. 4.40 crores.
The order of the CIT(A) was
upheld by the ITAT.
On appeal by the Department
in High Court, the Hon’ble High Court held that if there were funds available
both interest free and overdraft and/or loans taken, then a presumption would
arise that investments would be out of the interest free funds generated or
available with the company, if the interest free funds were enough to meet the
investments.
In the present case, it was
proved both by CIT(A) as well as by ITAT and hence, interest was deductible
under section 36(1)(iii) of the Income-tax Act, 1961. Therefore, the appeal
filed by the Department was dismissed.
CIT vs. Reliance Utilities
and Power Ltd. (2009) 313 ITR 340 (Bom.)
91. Business Loss – Year in
which deductible – S. 28
Assessee’s goods which were
stored in godowns owned by State Warehousing Corporation, were destroyed by
fire in 1978. The assessee filed suit for recovery of loss against the
insurance company and the State Warehousing Corporation but did not claim loss
in its tax return. The suit was dismissed on 31-5-1982. Thereafter the
assessee claimed the set-off of loss for year relevant to A.Y. 1983-84. The
ITO as well as the CIT(A) and the Hon’ble ITAT held that the loss pertained to
earlier years and hence could not be claimed in year relevant to A.Y. 1983-84.
Reversing this decision the Hon’ble High Court held that since the assessee
had recognized the loss after the suit was dismissed, it was entitled to claim
the loss in year relevant to A.Y. 1983-84.
New Diwan Oil Mills vs. CIT
(2009) 178 Taxman 461 (P&H) (A.Y. 1983-84)
92. Capital gain – Business
income – S. 45
Where the assessee sold its
agricultural land which was used by it for carrying out agricultural
activities after holding the same for more than two decades, gain arising out
of sale of such land was held to be assessable as ‘Capital gain’ and not
‘Profits and gain of business or profession’.
CIT vs. S.K. Kaintal (2009)
23 DTR 68 (P&H) (A.Y. 2005-06)
93. Capital gain – Transfer
– S. 2(47)
Where the share allotted to
the assessee were forfeited by the company upon the assessee’s failure to pay
the call money, the cancellation of allotment was held to be transfer within
the meaning of section 2(47) of the Act and the consequent forfeiture of
earnest money amounted to short – term capital loss.
Dy. CIT vs. BPL Sanyo Finance
ltd. (2009) 23 DTR 75 (Karn.) (A.Y. 1998-99)
94. Capital Gains –
Surrender of tenancy rights – S. 45
Cost of improvement incurred
shown in the assessee’s books of account as stock-in-trade.
One property was taken on
rent by the assessee at Delhi. Thereafter, the assessee made improvements in
the said rented premises and retained the same for more than five years. The
assessee showed the said property as inventory in its balance sheets for
several years.
On appeal to High Court, the
High Court held that no fault could be found with the reasoning of the
Tribunal. No perversity in its findings has been pointed out consequently,
hence, the appeal is dismissed.
CIT vs. Hitesh Estates Ltd.
(2009) 313 ITR 393 (Delhi) (Asst. Year: 2002-03)
95. Capital Gains –
Exemption more than one house – S. 54
Benefit under section 54 is
not confined to one house. The word ‘a’ occurring in section 54(1) does not
indicate singular.
CIT vs. D. Ananda Basappa (2009) 180 Taxman 4 (Kar) (A.Y. 96-97)
96. Deduction – Manufacture
– S. 80IB
Activity of making
transformer core from Cold Rolled Grain Oriented (CRGO) and Cold Rolled
Non-grain Oriented (CRNO) coils involves series of processes as such the same
amounts to manufacture and entitled to deduction under section 80-IB of the
Act.
CIT vs. Alfa Lamination
(2009) 22 DTR 161 (Guj.) (A.Y. 2001-02)
97. Deduction – Refund of
Excise Duty
– S. 80-IB
The assessee’s undertaking
was entitled for exemption from excise duty and hence, assessee received
excise duty refund. Held that excise duty refund is includible in the profits
entitled for deduction under section 80-IB
CIT vs. Dharam Pal PremChand
Ltd. (2009) 180 Taxman 557 (Del.) (A.Y. 2000-01)
98. Deduction – Interest –
S. 10B
Interest received from sister
concern for advances made for purchases, is eligible for deduction under
section 10B.
CIT vs. Hycon India Ltd.
(2009) 210 Taxation 289 (Raj.)
99. Deduction – Audit Report
– S. 80I
If the assessee files audit
report after filing the return of income but before the completion of
assessment, then the assessees right to rely upon the same cannot be taken
away.
CIT vs. Jenson Nicholson
India Ltd. (2009) 23 DTR 289 (Cal.) (A.Y.: 1991-92)
100. Deduction – Audit
Report – S. 80IA
The condition of filing audit
report along with the return of income filed by the assessee is not mandatory
but directory and if the audit report is filed by the assessee at any time
before the completion of assessment the requirement of section 80IA(7) would
be complied with.
CIT vs. Contimeters
Electricals (P) Ltd. (2009) 22 DTR 158 (Del.) (A.Y.: 2003 – 04)
101. Deduction – Scope – S.
80O
Supply of information to
foreign shipowners and receipt of foreign exchange, the commercial information
is provided outside India and consideration earned is in foreign exchange for
the use of such information, the Assessee is entitled to benefit under section
80O, Held Yes.
CIT vs. Chakiat Agencies (P)
Ltd. (2009) 224 CTR 286 (Mad.)
102. Deemed dividend – Trade
Advance – S. 2(22)(e)
Trade advances which are in
the nature of money transacted to give effect to commercial transaction do not
fall within the ambit of provisions of section 2(22)(e) of the Act.
CIT vs. Raj Kumar (2009) 23
DTR 304 (Del.) (A.Y.: 1996-97)
103. Depreciation – Spares –
Ready for use – S. 32
Depreciation is allowable on
spares which are not actually used but are kept ready for use. The expression
‘used for the purpose of business’ includes ‘ready for use’. The spares which
are specific to a particular machine may become useless once the machine is
discarded even if not actually used but kept ready for use.
CIT vs. Insilco (2009) 179
Taxman 55 (Del.) (A.Y. 2000-01)
104. Depreciation – Lease –
S. 32
Where the assessee is in the
business of leasing and in the course of its business it had leased assets and
received lease rentals from the lessee’s. Depreciation on the leased assets
cannot be denied to the assessee merely on the ground that the assets were not
put to use by the lessee’s during the year under consideration.
CIT vs. Kotak Mahindra
Finance Ltd. (2009) 23 DTR 299 (Bom.) (A.Y.: 1992-93)
105. Depreciation –
Defective machineries – S. 32
Defective machineries found
during trial run – Whether depreciation is allowable on machineries which were
brought for business purpose and found to be defective after the trial
installation. Held, yes. The defective machineries cannot be said that they
were not for business purposes. Hence, the claim is allowable.
CIT vs. Sri. Chmundeshwari
Sugar Ltd. (2009) 223 CTR 423 (Kar.)
106. Developer vis-à-vis
contractor – In a deduction under s. 80-IA – S. 5
Deduction under s. 80-IA is
available to a ‘developer’ and not to a ‘contractor’; in the absence of
factual details, matter remanded to AO for fresh adjudication.
Dy. CIT vs. East Coast
Constructions & Industries Ltd. (2009) 23 DTR 225 (Chennai) (Trib.) (Asst.
Year: 2003-04)
107. Export – Deduction – S.
80HHC
Where business of the
assessee consists of export business as well as domestic business, then
section 80HHC(3)(b) applies and not 80HHC(3)(a). Therefore, deduction is
allowable on pro rata basis. Rathore Bros (2002) 254 ITR 656 (Mad.) dissented
from; Indian Spices Company (2004) 267 ITR 445 (Ker.) followed.
CIT vs. Jindal Fine
Industries (2009) 210 Taxation 1 (P & H) (A.Y. 1988-89)
108. Export – Deduction –
Separate books
– S. 80HHC
Where the assessee was
maintaining separate books of accounts for its export business and local
business deduction under section 80HHC of the Act is to be determined on the
basis of the total turnover and profits of export division alone and not on
the total turnover and the profits of the entire business of the assessee,
including local business.
CIT vs. Sivagami Match
Industries (2009) 24 DTR 109 (Mad.) (A.Y. 2003-04)
109. Export – Special
deduction – S. 80HHC
Licence for overseas
exhibition or broadcasting rights for cinematographic films is export of
merchandise or goods for the purpose of section 80HHC of the Income-tax Act,
1961.
CIT vs. Firoz Khan (2009) 313
ITR 123 (Bom.)
110. Income from House
Property – Ownership – S. 22
Registration of conveyance
deed is not imperative for the assessee to claim that he is not the owner and
not chargeable under section 22. The assessee conveyed the property by way of
conveyance deeds which were otherwise executed correctly but were not
registered. The Department contended that since the deeds were not registered
the title was not conveyed and hence the assessee continued to be owner and
therefore was taxable under section 22. Held [following Podar Cements P. Ltd.
226 ITR 625 (SC)] that registration of the deeds under the Registration Act is
not necessary to hold that the assessee is not the owner.
Pallonji Mistry vs. CIT
(2009) 178 Taxman 341 (Bom.)
111. Interest – MAT – S.
115JA, 234B, 234C
In a case of computation of
income under the provisions of section 115JA of the Act, the provisions of
sections 234B & 234C are not applicable.
For the purpose of assessing
the tax under section 115J, first of all the profit as computed under the
Income-tax Act has to be prepared and thereafter the book profits as
contemplated by the provisions of section 115J are to be determined and then
the tax has to be levied.
The liability for payment of
tax under section 115J arises if the total income as computed under the
provision of Act is less than 30 per cent of its book profits and that can be
computed only after the end of the relevant accounting year.
The Court held that, since
the entire exercise of computing the income or that of book profit could be
only at the end of the accounting year, the provisions of sections 209, 210
cannot be made applicable, unless and until the accounts are audited and the
balance sheet is prepared as even the assessee may not be knowing whether the
provision of section 115J would be applicable or not.
Snowchem India Ltd. vs. Dy. CIT (2009) 313 ITR 170 (Bom.)
112. Minimum Alternative Tax
– S. 115 JAA
Minimum Alternative Tax (MAT)
credit under section 115JAA should be given effect to before charging interest
under sections 234B and 234C of the Act.
CIT vs. Chemplast Sanmar Ltd.
& Ors. (2009) 22 DTR 241 (Mad.)
113. Penalty – Concealment –
S. 271(1)(c)
Whether penalty is leviable
on surrender of additional income in return filed pursuant to notice under
section 148. Held, no. The penalty under section 271(1)(c) of the act was not
leviable as the Revenue has not placed any evidence on record to discharge the
onus of proving concealment and also the Assessee has offered the additional
income for tax in goodfaith to buy peace. Therefore, the penalty under section
271(1)(c) deserves to be deleted.
CIT vs. Rajiv Garg & Ors.
(2009) 224 CTR 321 (P&H)
114. Penalty – Non filing of
audit report
– S. 271B
Where the assessee a
co-operative society whose income was exempt under section 80P of the Act
under a bonafide belief that as its income is exempt it was not required to
get its accounts audited did not get its accounts audited within the time
prescribed under the Act. On appeal the High Court held that as there was no
intention on the part of the assessee to conceal its income or deprive the
Government of revenue as the entire income was exempt under section 80P of the
Act, as such the penalty under section 271B of the Act was not leviable in the
assessee’s case.
CIT vs. Iqbalpur Co-operative
Cane Development Union Ltd. (2009) 23 DTR 60 (Uttarakhand) (A.Y. 1999-2000)
115. Prosecution – Partners
of firm – S. 278B
Complaints for offences under
sections 276C, 277 and 278B was filed against the firm and all the partners.
In absence of any specific allegation against the partners of the firm other
than those who had verified the return of the firm that they were responsible
for the conduct of the business of the firm, prosecution against these
partners was held to be not sustainable.
Onkar Chand & Co. & Ors. vs.
Income-tax Department (2009) 22 DTR 57 (HP)
116. Reassessment – Validity
– S. 147
Where the assessment was
completed by the revenue under section 143(3) of the Act and the assessee had
disclosed all the material facts pertaining to the goodwill in its balance
sheet and the notes forming part of the accounts for the year. The
reassessment notice issued to verify the nature of goodwill, after the expiry
of four year from the assessment year and the consequential order passed by
the assessing officer under section 147 r.w.s. 143(3) both were held liable to
be quashed and set aside.
Supreme Treves (P) Ltd. vs.
Dy. CIT (2009) 23 DTR 215 (Bom.) (A.Y. 2002-03)
117. Reassessment – Primary
Objections
– S. 148
Reassessment framed by the
assessing officer without disposing of the primary objection raised by the
assessee to the issue of reassessment notice issued by him was liable to be
quashed.
MGM Exports vs. Dy. CIT
(2009) 23 DTR 356 (Guj.) (A.Y.: 2001-02)
118. Reassessment – Validity
– S. 148
In the absence of no new
material brought in by the Assessing Officer, recourse to reassessment
proceeding becomes invalid for it being a clear case of change of opinion –
The Assessee had claimed deduction u/s. 80-O which was allowed by the
Assessing Officer after examing the entire particulars. As Assessee has not
suppressed any material, the re-opening is bad-in-law.
CIT vs. Chakiat Agencies (P)
Ltd. (2009) 224 CTR 286 (Mad.)
119. Rectification –
Interests – S. 154
Intimation issued under
section 143(1)(a) of the Act cannot be rectified by the assessing officer
under section 154 of the Act after issue of notice under section 143(2) to
frame regular assessment.
CIT vs. Nicco Corporation
Ltd. (2009) 24 DTR 271 (Cal.)
120. Revision – Inquiry by
AO – S. 263
Where the assessing officer
during the scrutiny assessment proceeding raised a query which was answered by
the assessee to the satisfaction of the assessing officer but the same was not
reflected in the assessment order by him, a conclusion cannot be drawn by the
Commissioner that no proper enquiry with respect to the issue was made by the
assessing officer, and enable him to assume jurisdiction under section 263 of
the Act.
Further, the High Court also
held that revision order passed by the Commissioner under section 263 of the
Act on a ground in addition to the grounds mentioned in his show cause notice
issued cannot be sustained.
CIT vs. Ashish Rajpal (2009)
23 DTR 266 (Del.) (A.Y.: 2002-03)
121. Revision – Scope – S.
263
Revision order passed by the
Commissioner under section 263 of the Act on a ground not mentioned in his
show cause notice issued cannot be sustained.
CIT vs. Contimeters
Electricals (P) Ltd. (2009) 22 DTR 158 (Del.) (A.Y. 2003-04)
122. Tax Deduction at Source
– Commission – S. 194C
Air tickets sold by assessee,
an airline company to its travel agent at a concessional rates was held to be
a sale transaction on principal to principal basis, does not amount to payment
of commission to the agent as such the assessee is not liable to deduct tax at
source (TDS) under the provisions of section 194H of the Act.
CIT vs. Singapore Airlines
Ltd. & Ors. (2009) 22 DTR 129 (Del.) (A.Y.: 2001 – 02)
123. Tax Deduction at Source
– S. 194C
The word ‘work’ used in
section 194C has to be given a limited meaning and cannot cover those cases
where a hotel renders certain services/ facilities to its customers
East India Hotels Ltd. vs.
CBDT (2009) 179 Taxman 17 (Bom.)
124. Tax Deduction at Source
– Salary
– S. 192
Assessee liable to deduct tax
at source (TDS) from the salaries paid to its employees, shall not be treated
as assessee in default, to the extent of the amount of gratuity which is
exempt under section 10(10) of the Act, even if gratuity is paid under the
provisions of the Payment of Gratuity Act, 1972 or otherwise.
North West Karnataka Road
Transport Corporation vs. Dy. Labour Commissioner & Ors. (2009) 22 DTR 237 (Karn.)
125. TDS – Technical
Services – S. 194J
The assessee paid
interconnection and port charges to MTNL/BSNL for connecting the network of
the assessee with that of the networks of other service providers, which was
thru MTNL/BSNL. This was without deduction of TDS. Held that the word
‘technical’ has to be read by applying the principle of ‘noscitur a sociis’,
in company of the words ‘managerial and ‘consultancy’. Hence, technical
services are covered under section 194J only if human element is involved. The
principle of ‘noscitur a sociis’ means that if a word is used in company of
other words having a specific meaning, then that word takes its colour from
the other words in whose company the word is used. To apply this principle to
this case, since the word ‘technical’ has been used along with the words
‘managerial and ‘consultancy’ and there cannot be any ‘managerial and/or
‘consultancy’ unless they are rendered by a human being ‘technical’ service
would also mean a service which is provided by a human being. Technical
services without the human element are outside the scope of section 194J
CIT vs. Bharti Cellular Ltd.
(2009) 210 Taxation 420 (Del.)
126. Tribunal – Stay – S.
254(1)
Assessee challenged the order
passed by CIT rejecting the application under section 273A by way of writ
petition before the High Court and also sought stay of recovery of penalty
imposed on him. Court granted stay of recovery of demand on certain conditions
but the same was subsequently vacated on default of the assessee. Assessee was
seeking stay of recovery of penalty and interest in the appeal filed before
the Tribunal against levy of said penalty. It was held that though the
jurisdiction of the High Court in the writ petition and that of the Tribunal
in the appeal before it might be different, the question whether the recovery
of demand should be stayed was identical and in the light of the said
direction of the High Court, it would be highly improper for the Tribunal to
grant stay of recovery of demand and start parallel proceedings.
G. Venkateshwaran vs. Dy. CIT
(2009) 23 DTR 290 (Mad.) (Trib.) (A.Y.: 1985-86)
127. Waiver – Interest – S.
234A, 234B & 234C
Where the assessee filed his
return voluntarily and paid the taxes due thereon, the Court held that as the
assessee who was a singer by profession working for sixteen hours a day the
overbusy schedule of the assessee during the relevant assessment years
constituted ‘unavoidable circumstances’, within the meaning of clause 2 (e) of
the notification issued by the C.B.D.T. with respect to waiver of interest
under sections 234A, 234B and 234C of the Act.
S. Nagoor Babu Mano vs. CCIT
& Anr. (2009) 24 DTR 193 (Mad.) (A.Y. 1993-94 to 1996 – 97)
128. Wealth Tax – Debt owed
– S. 2(m)
Tax liability with respect to
earlier year which is determined upon a settlement arrived at between the
assessee and the revenue during the year under consideration was held to be an
allowable deduction under section 2(m) (iii) of the Wealth – tax Act, 1957 for
the purpose of computing net wealth.
CWT vs. Manna Lal Surana
(2009) 24 DTR 105 (Raj) (A.Y.: 1976-77)
129. Wealth Tax – Exemption
– Firm – Jewellery business – S. 5(1)(xxxii)
Manufacturing of jewellery
and ornaments, whether firm was on Industrial undertaking for the purpose of
wealth tax. The assessee was a partner in a firm which carried on business in
gold jewellery and precious and semi-precious stones, and consequently the
assessee’s interest in the firm is exempted under section 5(1)(xxxii) of the
Wealth Tax.
According to the Wealth Tax
Officer, firm was not an industrial undertaking. On appeal to CIT(A) it was
considered as an Industrial undertaking and he granted exemption under section
5(1)(xxxii) of the Act. The ITAT also upheld the order of CIT(A).
On a reference by the
Department to High Court, it was held that the firm fell in the same category
of firms being part of the gem industry and the activity of processing of gems
beginning with the raw material and ending in marketable product was no
different and hence, the value of the assessee’s interest in the firm was
exempt under section 5(1)(xxxii) of the Act.
CWT vs. Shyam Mohan (2009)
313 ITR 416 (Raj.)
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