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10. Deduction – Telecasting
rights – Merchandise – S. 80HHC
Telecasting rights fall in
the category of articles of trade and commerce and hence within the category
of “merchandise” and would be eligible for deduction under section 80HHC.
Under Rule 9A and 9B the word
‘lease’ is included in the meaning of the word ‘sale’ and hence eligible for
deduction under section 80HHC.
CIT vs. B. Suresh (2009) 313
ITR 149 (SC)
11. Foreign exchange
fluctuation loss – Allowable – S. 37(1)
Loss suffered by the assessee
on account of fluctuation in the rate of foreign exchange as on the date of
balance sheet is an item of expenditure under section 37(1) of the Act.
CIT vs. Woodward Governor
India P. Ltd (2009) 312 ITR 254 (SC)
12. Issue Management
Expenses – Principle of consistency
The issue was of deduction of
certain expenditure “issue management expenses” and the assessee succeeded
only on the ground of consistency. Without going into the merits, the Supreme
Court remitted back the matter to the High Court holding that the High Court
should have examined the nature of the said expenditure.
CIT vs. Oswal Agro Mills Ltd.
(2009) 313 ITR 24 (SC)
13. Leave Travel Concession
– No evidence required by employer
Employer is not under any
statutory obligation to collect evidence to show that employees have actually
utilised the amount paid towards leave concession or conveyance allowance
under section 10(5).
There is no circular of the
CBDT requiring the employer to collect and examine the evidence supporting the
declaration of the employees for the purpose of deduction of tax under section
192.
CIT vs. Larsen and Toubro Ltd
& Anr. (2009) 313 ITR 1 (SC)
14. Penalty – Not leviable –
Good and sufficient reason – S. 271C
Penalty under section 271C
can only be levied on a person who does not have a good and sufficient reason
for not deduction tax at source. The burden will be on the person to prove
such good and sufficient reason.
CIT vs. Eli Lilly and Co.
(India) P. Ltd. (2009) 312 ITR 225 (SC)
15. Reopening – Jurisdiction
of High Court
The Commissioner (Appeals)
confirmed the order of the assessing officer that the income is to be assessed
as income from house property for the A.Y. 1997-98. The CIT(A) also directed
that the A.Y. 1992-93 to 1999-00 should be reopened. The Tribunal reversed the
order of the CIT(A) and held that the income is in the nature of business
income and not income from house property. The High Court in the challenge to
the reopening allowed the petition of the assessee.
On an appeal by the
department, the Supreme Court held that it was not open for the High Court to
direct by an omnibus order that all subsequent years were connected years and
that all income should be treated as business income. The Supreme Court
further held that the unit for assessment was a ‘year’ and this was not a case
of block assessment.
Dy. CIT vs. Divya Investment
P. Ltd (2009) 313 ITR 363 (SC)
16. Substantial question of
law – Freight paid by AOP – To member of AOP – Liability to TDS
The question whether freight
paid by the assessee (AOP) to truck owners who in turn are members of the said
AOP is subject to TDS under section 194C(2) is a substantial question of law
and the Supreme Court directed the High Court to decide the issue in
accordance with law.
CIT vs. Sirmour Truck
Operators Union (2009) 313 ITR 27 (SC)
17. TDS – Salary – S.
192(1), 9(ii)
The assessee was a joint
venture between a foreign company and an Indian company. Four employees were
deputed by the foreign company to work for the assessee. Salary was paid by
the foreign company. Additional salary was also paid to the employees by the
assessee, on which the assessee deducted tax at source under section 192(1).
The Supreme Court held that
the provisions of section 192(1) would be applicable to the foreign salary
received by the employees and that the assessee could be treated as an
assessee in default for non deduction of tax at source on the foreign salary.
The deductions under
provisions of chapter XVII are tentative deduction of income tax subject to
regular assessments.
CIT vs. Eli Lilly and Co.
(India) P. Ltd. (2009) 312 ITR 225 (SC)
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