Distance of the agricultural land belonging to the assessee within the meaning of S. 2(14)(iii)(b) has to be measured in terms of the approach by road and not by a straight line distance on horizontal plane or as per crow’s flight.

CIT vs. Satinder Pal Singh (2010) 33 DTR 281 (P&H)

Prizes won in entertainment programmes on television included by amendment in section 2(24) w.e.f. from 1-4-2002, and the said amendment is prospective.

Miss Lopamudra Misra vs. ACIT (2010) 40 Tax L.R. 49 (Orissa)

CIT vs. Smt. Neena Jain (2010) 36 DTR 49 (P&H)

Non–compete fee received by assessee for refraining from manufacturing and selling timepieces for a period of ten years after the sale of one unit while it was continuing with its other business activities constituted revenue receipt.

CIT vs. Tata Coffee Ltd. (2010) 229 CTR 38 (Kar.)

Nursing home run by two individuals Authorities accepting for long length of time that it was not an association of persons. No new material or fact found. Held that nursing home cannot be treated as an AOP on same facts

Dr. Narendra Prasad & Ors. vs. CIT (2010) 322 ITR 171 (Patna)

Receipts from the sale of levy free sugar and concession in the excise duty rebate were capital receipts not liable to tax.

CIT vs. Tiruttani Co-op. Sugar Mills Ltd. (2010) 322 ITR 59 (Mad.)

The assessee firm entered into an agreement for sale of a cinema building alongwith land. The agreement failed and as per terms of agreement the firm became entitled to compensation. It was held that compensation amount received on breach of contract was a capital receipt.

S. Zoraster & Co. vs. CIT (2010) 322 ITR 35 (Raj.)

Interest income earned by the assessee club from fixed deposits and other investments made by it is not exempt on the principle of mutuality.

As regard the other miscellaneous income viz hall charges, guest house charges, mike charges, etc. the High Court remanded these issues back to the Tribunal to be decided in light of Apex Court decision in the case of CIT vs. Bankipur Club Ltd. [(1997) 226 ITR 97 (SC)], as the Tribunal had not given any finding on these miscellaneous receipts.

Coimbatore Cosmopolitan Club vs. CIT (2010) 34 DTR 62 (Mad.)/229 CTR 414 (Mad.)

Member migrating from his place of origin in one area specified in section 10(26), to another area also specified therein, benefit of exemption is available.

Pradip KR Taye and Others vs. UOI (2010) 320 ITR 29 (Gauhati)(FB)

Amount received under voluntary retirement scheme exempt upto 5 lakhs under section 10(10C). Amount in excess of 5 lakhs entitled to relief under section 89.

CIT vs. T. K. Paliwal (2010) 322 ITR 101 (Raj.)

CIT vs. S. N. Sharma (2010) 322 ITR 105 (Raj.)

Sunil Kumar Ganguly & Ors vs. OIR (2010) 322 ITR 297 (Cal.)

Section 10(23C)(v) benefit cannot be denied merely because there are profits. In computing the profits, capital expenditure has to be deducted.

Pinegrove International Charitable Trust vs. UOI (P & H) Source: www.itatonline.org

Blending and repacking of tea is manufacture. Since the purpose of exemption under section 10A is to give effect to the EXIM Policy of the Government, the definition of "Manufacture" contained in the EXIM policy is applicable.

Girnar Industries vs. CIT (2010) 187 Taxman 136 (Ker.)

Assessee, an exporter of computer software was using old plant & machinery/infrastructure of another concern to develop its software. The Assessing Officer rejected the assessee’s claim under section 10B on this ground that the assessee was using old plant & machinery/infrastructure of another concern. Held that since the instant case was not a case of manufacture of any article but development & creation of intellectual property namely software programme, and the essential / main inputs for such activity were that of personnel belonging to assessee and their intellect, and hence, use of computers was not significant. Therefore assessee was entitled for deduction under section 10B.

CIT vs. Teehdrive (I) P. Ltd. (2010) 186 Taxman 208 (Del.)

Share income of assessee company from a firm in which it was partner did constitute income of the assessee under section 10(2A) and section 14A applied and therefore disallowance was justified in respect of interest free loans given to the firm.

CIT vs. Popular Vehicles & Services Ltd. (2010) 33 DTR 140 (Ker.)/228 CTR 346 (Ker.)

Allowance for attire and club membership fees would fall under perquisites, if club membership is purchased in name of employee and fee payable to such a club is reimbursed by company for personal use of employee. If membership is standing in name of company and if any guest of company is entertained by employee for business promotion of company, same cannot be treated as perquisites to such an employee.

CIT vs. Wipro Systems (2010) 188 Taxman 280 (Kar.)

The main business of the assessee was of development and sale of property and not renting of property. Hence, the rent received could be taxed under the head income from property instead of income from business.

CIT vs. Haryana Urban Development Authority (2010) 322 ITR 61 (P & H)

Rent from premises with fittings. Apportionment between business income and income from house property held to be justified.

CIT & Anr. vs. Mysore Inter Continental Hotel P. Ltd. (2010) 322 ITR 116 (Karn.)

The loss incurred by the assessee on the sale of shares held by the assessee should be treated as business loss of the assessee.

CIT & Anr. vs. Malabar Industrial Co. Ltd. (2010) 320 ITR 486 (Karn.)

Assessee received advance amount from overseas customer towards supply of particular commodity. Before the assessee could export the commodity, the Government imposed a ban on the export of that commod ity and as a result of which the assessee could not supply and had to refund the advance amount. But due to exchange rate fluctuation, the assessee had to incur a higher amount and claimed the same as business loss. Held the loss is eligible for deduction as a business loss.

Loksons Pvt. Ltd. vs. ACIT (2010) 187 Taxman 55 (Bom.)

Earth moving equipment namely JCB is eligible depreciation at 40% which rate is provided for "Motor Buses, Motor Lorries, Motor Taxis" which is used in the business of running them on hire.

CIT vs. Gaylord Constructions, Kachappilly House, Angamaly (2010) 40 TAX L.R. 85 (Ker.)

Owner is a person who is entitled to receive income from the property in his own right. In order to claim benefit of sec. 32 it is not necessary that the assessee should be a complete owner. The buses on which the assessee had claimed depreciation were not registered in her name, however the assessee producer all the documents relating to loans obtained, insurance etc. relating to the business to establish that she was beneficial owner and received income. It was held she was entitled to depreciation.

CIT vs. A. Sivakami & Anr. (Smt.) (2010) 322 ITR 64 (Mad.)

Canteen for workers inside factory premises, constitutes factory building. Entitled to higher rate of depreciation.

CIT vs. Bajaj Auto Ltd. (2010) 322 ITR 29 (Bom.)

Assessee is entitled to claim depreciation and investment allowance on increased cost of plant and machinery resulting from increase in liability to repay foreign currency loans taken for purchase of such plant and machinery.

Century Enka Ltd. vs. ACIT (2010) 188 Taxman 282 (Cal.) (A.Y. 1988-89)

Where extra shift allowance has to be calculated, it is not in respect of any particular item or machinery. If any portion of the plant has worked extra shift, then benefit would be available in respect of entire plant.

CIT vs. Shivalik Hatcheries (2010) 186 Taxman 79 (HP)

Assessee is not required to prove that the debt has become bad. Assessee only to write off the debt as bad in its books. Law with effect from Assessment Year 1989-90.

Lawlys Enterprises Pvt. Ltd. vs. CIT (2010) 214 Taxation 256 (Patna)

Where share broker purchasing shares for its clients and paying money against purchase and money receivable from client becoming bad and treated as bad bed. Held that brokerage payable by client is part of bad debt to be taken into account.

CIT vs. Bonanza Portfolio Ltd. (2010) 320 ITR 178 (Delhi)

Amount paid by assessee (a stock broker) on behalf of sub-broker, which could not be recovered, is eligible for being claimed as bad debt. However the deduction was to be reduced by the amount of shares which were purchased and with held by the assessee.

CIT vs. DB (India) Securities Ltd. (2010) 187 Taxman 161 (Del.)

Set on liability under section 15 of the Payment of Bonus Act, is a contingent liability and hence, not an allowable deduction under section 37 of the Income Tax Act, 1961.

Ingersoll Rand (I) Ltd. vs. CIT (2010) 320 ITR 513 (Bom.)

Amount paid by assessee financial corporation for the development of model village in Mysore District under AG’s Mysore Zilla Panchayath was to promote the business of the assessee and therefore deduction was allowable.

CIT & Anr. vs. Karnataka Financial Corporation (2010) 33 DTR 145 (Kar.)

Where one of the four units of the assessee was closed down. As per Tribunal findings the units was continuing to carry on business. Expenditure incurred on payment of retrenchment compensation, interest on monies borrowed for making such payment and for payment of provident fund was allowable.

CIT vs. D.C.M. Ltd. (2010) 320 ITR 307 (Delhi)

Assessee maintaining office, retaining staff for export business though export sales substantially gone down. It was a case of full in business activities and not closure of business. Hence, the expenditure was allowable.

CIT vs. Anita Jain (2010) 214 Taxation 180 (Delhi)

Expenditure for restructuring and viability study and preparation of restructuring proposal is a revenue expenditure.

CIT vs. JCT Electronics Ltd. (2010) 188 Taxman 191 (P & H)

Legal expenses incurred on obtaining advice as to feasibility of acquiring a new unit is a revenue expenditure.

CIT vs. United Breweries Ltd. (2010) 36 DTR 80 (Kar.)

Consultancy fee paid by assessee for carrying out detailed operational efficiency and profitability study of the assessee was allowable as revenue expenditure even though the said assignment was terminated before conclusion of the study, though there was no written agreement.

Indo Rama Synthetics (I) Ltd. vs. CIT (2010) 228 CTR 278 (Del.)

Expenditure on upgrading computers is revenue expenditure.

CIT vs. Sundarm Clayton Ltd. (2010) 321 ITR 69 (Mad.)

Expenditure towards payment of advisory services for regulatory compliance in relation to buy-back of Shares by is allowable revenue expenditure.

CIT vs. Selan Exploration Technology Ltd. (2010) 188 Taxman 1 (Del.)

A commission agent, incurred expenditure towards gifts to officials and customers for sale of various products, free samples, prize distribution for the purpose of sales promotion in army/navy/CSD canteens. Held the amounts are deductible as being incurred for the purpose of business and out of business expediency.

CIT vs. C.B.K.R. Enterprises (2010) 186 Taxman 14 (Del.)

The discount on bonds has to be spread proportionately for the no. of years for which the bonds are issued.

CIT vs. Himachal Finance Corporation (2010) 186 Taxman 105 (HP)

The new project set up by the assessee company was held to be a mere expansion of the assessee’s existing business, as there was unity of control, common management and funds as well as interlacing of two businesses. Accordingly, the expenditure incurred on rent, salaries, travelling, etc. in relation to new project is allowable as revenue expenditure.

CIT vs. Honda Siel Power Products Ltd. (2010) 36 DTR 456 (Del.)

Expenditure incurred by the assessee on diversification and expansion of new product range which included expenditure on acquisition of machinery to aid such expansion is allowable as revenue expenditure.

CIT vs. Escorts Auto Components Ltd. (2010) 34 DTR 280 (P&H)

Amounts paid by the assessee to its employees toward overseas maintenance allowance. These amount constituted only reimbursement for the expenses incurred by the employees and would not form part of the salary in the hands of recipient. Sub- clause (iii) of clause (a) of section 40 would not be applicable.

CIT vs. Information Architects (2010) 322 ITR 1 (Bom.)

The fact that the liability was old would not make any ground for addition. So long as there was no cessation of liability by writing back same no addition could be made under section 41(1).

CIT vs. Sita Devi Juneja (Smt.) (2010) 187 Taxman 96 (P & H)

CIT vs. Jaipur Jewellers (Exports) (2010) 187 Taxman 169 (Delhi)

Contribution towards employee’s gratuity fund was allowable if paid before filing of the return of income.

CIT vs. Popular Vehicle & Services Ltd. (2010) 228 CTR 346 (Ker.)

Even employees’ contribution to PF paid before due date of filing ROI is allowable under section 43B.

CIT vs. Aimil Limited (2010) 321 ITR 508, 229 CTR 418, 35 DTR 68 188 taxman 265 (Delhi)

Where building has been designed specifically to further cause of manufacture or production, then the same would be considered as a "plant", for the purpose of depreciation.

CIT vs. Shivalik Hatcheriers (P) Ltd. (2010) 188 Taxman 291 (HP)

Assessee’s outstanding interest against loan from State Finance Corporation for period pertaining to Asst. Years. 1994-95 & 1995-96, was rescheduled by the finance corporation and the same was sourced by means of a fresh loan which had a repayment schedule over three years. Assessee claimed deduction for such interest in it’s return. Held that such rescheduling amounts to deemed payment of interest and is hence deductible under section 43B, even if not actually paid.

Vinir Engineering P. Ltd. vs.Dy. CIT (2010) 186 Taxman 72 (Karn.)

Mobilisation charges received by the assessee in connection with supply of plant and machinery used in prospecting/extraction or production of mineral oils forms part of gross receipts for computation of income under section 44BB.

R & B Falcon Drilling Co. vs. ACIT (2010) 188 Taxman 50 (Uttarakhand)

Matter regarding taxability of amount received for transfer of patent, copyright, etc. is remanded for reconsideration as the Tribunal had not examined the facts and circumstances of the case vis-à-vis decision in CIT vs. B. C. Srinivasa Setty (1981) 128 ITR 294 (SC) case, bearing in mind that the assessee himself had offered to tax, as an amount capable of being ascertained for capital gain and on his own shown an initial cost of acquisition of asset as nil.

CIT & Anr. vs. P. R. Seshadri (2010) 228 CTR 334 (Kar.)

When there were only four partners, first change in June 1994 when two partners retired and two new partners inducted. Second change in 2004 when remaining two partners also retired and two more partners, who have brought the capital. The Court held that the provisions of section 45(4) is applicable as it amounts to transfer Hence, capital gain is applicable.

CIT vs. Gurunath Talkies (2010) 214 Taxation 729 (Kar.)

A membership card of stock exchange which confers right upon its member to trade at the exchange is ‘an asset’ and falls within the definition of the term ‘capital asset’ as defined in section 2(14) of the Act. Accordingly, any gain arising on sale of the membership card in auction by the Stock Exchange in pursuant to default committed by the member in terms of the stock exchange rules is chargeable to tax under the head ‘Capital Gain’.

CDR P. J. Mathew vs. ITO (2010) 36 DTR 352 (Ker.)

Transfer of assessee’s shares to its subsidiary companies. Surplus realized on sale of shares. No Capital Gains to be leviable.

CIT vs. Shahibaug Enterprises P. Ltd. (2010) 320 ITR 695 (Guj.)

Assessee would be entitled to claim capital loss that had arisen due to transfer of rights issue to partly convertible debentures.

CIT vs. New Ambadi Investments (P) Ltd. (2010) 188 Taxmann 67 (Mad.)

Where the asset / property was purchased by the assessee out of the loans taken from its directors and the interest due thereon for the relevant previous year was not actually paid to the directors. The interest payable on such loans was held by the court to be included in the cost of acquisition of the property for the purpose of computing capital gains even though the interest was not paid by the assessee till the asset / property was sold / disposed off.

CIT & Anr. vs. Sri Hariram Hotels (P) Ltd. (2010) 34 DTR 162 (Karn.)

Provisions of section 50C can be applied only to find out the true value of a capital asset and not for computing business income hence the same cannot be applied when sale of stock in trade.

CIT vs. Thiruvengadam Investments (P) Ltd. (2010) 34 DTR 81 / 320 ITR 345/ 229 CTR 284 (Mad.)

Report of the Tehsildar having certified that the assessee’s land was 8 kms, away from the municipal limits the land constituted agricultural land hence, the assessee is entitled to exemption under section 54B.

CIT vs. Lal Singh & Ors. (2010) 228 CTR 575 (P & H)

There is no legal basis to assume that to recognize the gift to be genuine, there should be any blood relationship, or any close relation-ship, between the donor and the donee. When assessee produced the affidavit, gift deed in the absence of anything to show that the gift was by way of money laundering addition under section 68 as cash credit not justified.

CIT vs. Padama Sungh Chauhan (2010) 214 Taxation 792 (Raj.)

Confession made by the assessee during survey proceedings is not conclusive and it is open to the assessee to establish that the same was not true and correct by filing cogent evidence. Additions deleted by the Tribunal was justified.

ITO vs. Vijay Kumar Kesar (2010) 36 DTR 13 (Chhattisgarh)

Assessing officer doubted the sale of shares made by the assessee and hence issued inquiry letters to some of those persons under section 133(6). A few of those persons responded while others failed to respond and hence the Assessing Officer made additions of Rs. 15 Lakhs by treating sources of share capital of those persons as ‘unexplained’. Held merely because some of the persons did not respond to the notice issued by the Assessing Officer, it could not be said that the transaction was not genuine.

CIT vs. GP International Ltd. (2010) 186 Taxman 229 (P & H)

Powers under section 142A do not extend to estimating amount of unexplained expenditure referred to under section 69C

CIT vs. Aar Pee Apartments P. Ltd. (2010) 188 Taxman (Del.)

Where purchases are duly recorded in the books, the entire undisclosed sales cannot be assessed as income; only the net profit rate can be treated as income.

Man Mohan Sadani vs. CIT (2010) 188 Taxman 277 (MP).

Where the assessee was able to show from its books of account maintained by it in the course of its regular business and which was supported by the vouchers, etc., addition under section 69 of the Act cannot be made with respect to such inflated statement given to the bank of the stock which was hypothecated with it merely to obtain higher credit facility.

CIT vs. Arrow EXIM (P) Ltd. (2010) 35 DTR 280 (Guj.)

Process of converting limestone in to lime powder is a manufacturing activity within the meaning of section 80IA and 80IB.

CIT vs. Janak Raj Bansal (2010) 33 DTR 30 (HP)

Freight subsidy provided to the industries set up in remote areas where rail facilities are not available is not income derived from the business of the industrial undertaking and cannot be included in the profits eligible for deduction under section 80IA.

CIT vs. Kiran Enterprises (2010) 228 CTR 101 (HP)

Interest received by the assessee on overdue payments from customers is eligible for deduction under section 80IA.

CIT vs. Advance Detergents Ltd. (2010) 188 Taxman 15 (Del.).

Project relocation expenses which could be treated exclusively as domestic expenses and were, therefore, not to be taken into account for apportioning the same between the foreign expenses and domestic expenses while allowing deduction under section 80-O.

CIT vs. KSA Technopak (India) (P) Ltd. (2010) 33 DTR 148 (Delhi)

Single donation of more than 5% for construction of one room in a hostel managed by particular community – Not ground to deny renewal. Matter remanded for fresh consideration.

Shri Sardarmal Sancheti Charitable Trust vs. UOI & Ors. (2010) 322 ITR 167 (Raj.)

For explanation (baa) to section 80HHC, netting of income from expenditure is not allowed. (90% of Gross interest to be considered)

CIT vs. Asian Star Co. (Bom.) Source: www.itatonline.org

Decision of Special Bench Lalson Enterprise vs. Dy. CIT (2004) 89 ITD 25 (SB), not approved.

CIT vs. Shri Ram Honda Power Equip (2007) 289 ITR 475 (Delhi), dissented.

The assessee had a contract for design, development and testing of software outside India. Under the contract the scope of work involved the provision of analysis, programming and testing skills. The assessee had deputed qualified personnel under the contract. Held that the assessee was engaged in onsite development of computer software outside India. The nature of work involved was technical services in the development of Software. The assessee was eligible for special deduction under section 80HHE.

CIT vs. Information Architects (2010) 322 ITR 1 (Bom.)

For the purpose of determining the deduction under section 80-IA, the eligible deduction in terms of section 80-IA(5), has to be reduced from the total income computed under the provisions of the Act, after setting off loss in another unit and if the total income is less than the eligible amount, deduction under section 80-IA has to be limited to such amount.

CIT vs. Accel Transmatic Sysyems Ltd. (2010) 230 CTR 206 (Ker.)

Initial assessment year for the purpose of section 80-IA is the assessment year relevant to the previous year in which the commercial production is started and not the assessment year in which there was only a trial production.

CIT vs. Nestor Pharmaceuticals Ltd. (2010) 36 DTR 200 (Del.)

Additional income surrendered by the assessee firm having been added to the income of the business itself, it is to be considered while working the deduction under section 80-IB.

CIT vs. Allied Industries (2010) 229 CTR 462 (HP)

Assessee having merely converted extensive educational materials in to concise form in CDs and books for better and easy understanding and exported the same to students abroad for coaching them is not entitled to deduction under section 80O as no new invention or design is made by the assessee in respect of educational material.

P. C. Thomas vs. ACIT (2010) 36 DTR 47 (Ker.)

Poultry farming cannot be treated as manufacturing activity for purposes of deduction under sections 80HHA, 80-I.

CIT vs. J. D. Farms (2010) 187 Taxman 151 (Delhi)

Deduction under section 80-IB is not allowable in respect of duty draw back, export entitlement and DEPB licence.

Exchange rate difference arises out of and is directly related to sale involving export of the industrial undertaking, hence entitled to deduction under section 80IB.

CIT vs. Rachana Udhyog (2010) 35 DTR 65 (Bom.) Liberty India (2009) 317 ITR 218 (SC), considered.

Where the surplus funds not immediately required for day to day banking were kept voluntarily reserves and invested in KVP / VP, the interest income received from KVP / VP would be income from banking business eligible for deduction under section 80P(2)(a)(i).

CIT vs. Solapur Nagari Audyogic Sahakari Bank Ltd. (2010) 229 CTR 73 (Bom.)

Amount received by the assessee as advance from customers and later forfeited by the assessee would not be eligible for deduction under section 80-IA of the Act.

CIT vs. Jackson Engineers Ltd. (2010) 36 DTR 168 (Del.)

Deduction under section 80-I of the Act is to be allowed on the gross total income, without reducing from it the deduction allowed under section 80HH of the Act.

CIT vs. K.P. Solvex Ltd. (2010) 36 DTR 443 (All)

Tax planning is valid. McDowell and Co. Ltd. vs. CTO (1985) 154 ITR 148 (SC)(5 Judges) has been explained in UOI vs. Azadi Bachao Andolan (2003) 263 ITR 706 (SC)(2 Judges), the latter judgment is binding. Loss on sale units has to be set off.

Porrits & Spencer (Asia) vs. CIT (P & H) Source: www.itatonline.org

Interest under section 234B is chargeable though computation of income is made under section 115JB, a difficulty or impossibility as pleaded by the assessee cannot be accepted only because it is a liability under the provisions of section 115JB.

CIT & Anr. vs. Brindavan Beverages Ltd. (2010) 228 CTR 1 (Kar.) 321 ITR 197 (Kar)

In a case of MAT assessment, deduction under section 80HHC is to be worked out on the basis of the adjusted book profit under section 115JB.

CIT vs. Ambika Cotton Mills Ltd. & Ors. (2010) 33 DTR 183 (Mad.)

Failure to pay advance tax as per Book profit the assessee is liable to interest under section 234B.

CIT vs. Brindavan Beverages Ltd. (2010) 321 ITR 197 (Karn.)

Deduction under section 80HHC of the Act is to be worked out on the basis of the adjusted book profits under section 115JB.

CIT vs. Ambika Cotton Mills Ltd. (2010) 321 ITR 448 (Mad.) CIT vs. Ajanta Pharma Ltd. (2009) 318 ITR 252 (Bom.), dissented.

While computing profit under section 115JB, deduction under section 80HHC is to be allowed on basis of book profits under section 115JB and not on the basis of eligible profits under section 80HHC as per normal computation.

CIT vs. Futura Polyester Ltd. (2010) 186 Taxman 51 (Mad.)/ SPEL Semiconductor Ltd. (2010) 188 Taxman 130 (Mad.)

Bad debts written off by the assessee in earlier years now, recovered by the assessee cannot be included as a part of, ‘book profit’ under section 115JA as it does not fall within any one of the items enumerated in the explanation to section 115 JA (2) of the Act.

CIT vs. Premium Taxcons (P) Ltd. (2010) 34 DTR 115 (Uttarakhand)

Where the notice issued and return filed pursuant thereto, proceedings dropped on ground of lack of jurisdiction and transferred to another officer. Held that transfer not permissible without following procedure.

Subhas Chandra Bhaniramka vs. ACIT (2010) 320 ITR 349 (Cal.)

Where the assessee vide its detailed reply objected to the show cause notice proposing to transfer his case for a coordinate investigation and the Commissioner passed an order under section 127(2) of the Act transferring the petitioners case without considering the reply of the assessee, the impugned order passed by the Commissioner was held to be in breach of principles of natural justice and liable to be quashed.

Dhoot Developers (P) Ltd. vs. CIT & Ors. (2010) 35 DTR 175 (Cal.)

Assessee voluntarily surrendering certain amount as undisclosed income, retraction after about two years held not permissible.

ACIT vs. Hukumchand Jain (2010) (March) Vol. 40 Tax L.R. 144 (Chhattisgarh)

Signing of return by secretary was curable irregularity and when managing director had signed and filed the return, it relates back to date when the original return was filed under the signature of company secretary.

CIT vs. Haryana Sheet Glass Ltd. (2010) 188 Taxman 7 (Delhi)

Notice served by affixture on last date after office hours is not valid service and assessment framed in pursuance of such notice is not valid, it is immaterial that the assessee appeared in the assessment proceedings.

CIT vs. Vishnu & Co. (P) Ltd. (2010) 230 CTR 62 (Del.)

In the absence of service of notice the Assessing Officer had no jurisdiction to make assessment.

CIT vs. Cebon India Ltd. (2010) 34 DTR 119 / 229 CTR 188 (P&H)

Where a particular position has been accepted by the Department in earlier assessment years, the same should not be deviated from unless there is a change in facts, even though the principle of resjudicata is not applicable.

CIT vs. Gopal Purohit (2010) 188 Taxman 140 (Bom.).228 CTR 582 (Bom), 34 DTR 52

Assessing Officer rejected the books of account of the assessee on ground that assessee had not maintained indoor patient registers. Assessment completed under section 145 making addition under different head. The CIT(A) deleted the addition on ground that no material was brought on record for estimating the income. The Tribunal and High Court upheld the order of CIT(A).

CIT vs. Bahal (AP) (Dr.) (2010) 322 ITR 71 (Raj.)

Assessee is entitled to change the method of valuation of government securities to market value from cost and claim depreciation on the difference in the diminution of value.

CIT vs. Karur Vysya Bank Ltd. (2010) 33 DTR 244 (Mad.)

The assessee was not obliged to provide for hire charges and lease rental on non-performing assets in view of R.B.I.’s guidelines, accordingly to which income relating to sub standard assets or non-performing assets which was outstanding for more than six months, was not to be considered as income / profits. Hence, appeal of the department is dismissed.

CIT vs. Kailash Auto Finance Ltd. (2010) 320 ITR 394 (All)

Even under Mercantile system of accounting followed by assessee not interest on loan had actually not accrued since loan amount had become irrecoverable and therefore, no interest was assessable.

CIT vs. Eicher Ltd. (2010) 320 ITR 410 (Delhi)

Reopening under section 147 not valid if there is no finding regarding failure to disclose material facts.

Bhavesh Developers vs. Assessing Officer (2010) 224 CTR 160 (Bom.)/34 DTR 125 Source : www.itatonline.org

Assessing Officer having arrived at the conclusion that the amount received by the assessee–partner on his retirement from the firm of solicitors has escaped assessment on the basis of wrong interpretation of clause 35 of the deed of partnership which in fact not applicable to the asseesee’s case and wrongly opined that the said amount was taxable under section 28(iv), there was no tangible material before the Assessing Officer to form the belief that the income had escaped assessment and therefore, reopening of assessment under section 147 was not valid.

Balakrishna Hiralal Wani vs. ITO (2010) 36 DTR 161 (Bom.)

No material to show escapement of income from tax – Notice of reassessment not valid.

Shankarlal Nagji & Co. & Ors. vs. ITO (2010) 322 ITR 90 (Guj.)

When there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment, the reopening of assessment was not valid. Power to reopen an assessment beyond a period of four years but up to six years under section 149(1)(b) is also subject to the requirement spelt out in the proviso to section 147.

Anil Radha Krishna Wani vs. ITO (2010) 36 DTR 185 (Bom.)

Even if there is no assessment under section 143(3), reopening under section 147 is bad if there are no proper "reasons to believe". Assessing Officer cannot go beyond the recorded reasons.

Prashant S. Joshi vs. ITO (Bom.) Source: www.itatonline.org

Validity of section 147 reopening has to be determined on the basis of law prevailing on date of issue of section 148 notice and not on retrospectively amended law.

Rallis India vs. ACIT (Bom.) Source: www.itatonline.org

Assessing Officer having reopened assessee’s assessment after expiry of four years from the relevant assessment year by placing reliance on a commencement certificate of housing projects undertaken by the assessee which was furnished to the Assessing Officer in the course of assessment proceedings under section 143(3) itself and was already on record, it cannot be said that the assessee had failed to disclose relevant documents or material facts and therefore recourse to the provisions of section 147 cannot be sustained.

Mistry Lalji Narsi Development Corporation vs. ACIT (2010) 34 DTR 273 (Bom.) , 229 CTR 359 (Bom.)

Assessee was allowed deduction under section 80IA in the original assessment under section 143(3). Held when deduction under section 80IA was allowed in scrutiny assessment, then Assessing Officer cannot resort to proceedings under section 147 on the basis of mere change of opinion.

Northern Strips Ltd. vs. ITO (2010) 186 Taxman 360 (Del.)

The assessee had set apart certain amount under the directive of a statutory authority in each of the assessment years that is A.Y. 1997-98 to 1999 – 2000. This fact was disclosed by the assessee in the return of income. In all the assessment years during original assessment proceedings the issue with respect to the fund was specifically noticed by the assessing officer. On these facts the Court held that reopening of assessment of all the years on the ground that the amount spent out of the fund was not an allowable deduction amounted to a mere change of opinion which is not permissible. The Court further observed that, the assessing officer has been given power to reassess under section 147 upon certain conditions being satisfied, and the assessing officer does not have power to review. If such a change of opinion were to be permitted as a ground of reassessment then it would amount to granting a licence to the assessing officer to review his decision, which he does not have under the provision of section 147.

D.T. & T.D.C. Ltd. vs. CIT (2010) 36 DTR 1 (Del.)

Where the deduction under section 80IB of the Act was allowed to the assessee by the assessing officer in the original assessment order under section 143(3) of the Act after considering the audit report in Form 10CCB and the other details filed by the assessee, it cannot be said that there was a failure on the part of the assessee to disclose fully and truly all the facts for the assessment so as to invoke the provisions of section 147 for re-examining the deduction under section 80 IB of the Act, after expiry of four years from the end of the assessment year.

Purity Techtextile (P) Ltd. vs. ACIT & Anr. (2010) 35 DTR 257 (Bom.)

Where complete details of the bad debts claimed by the assessee under section 36(1)(viii) were furnished in the return of income and also during the original assessment proceedings it cannot be said that there was a failure on the part of the assessee to disclose fully and truly all the facts for the assessment so as to invoke the provisions of section 147.

CIT vs. Pradeshiya Industrial & Investment Corporation of U.P. Ltd. (2010) 35 DTR 267 (All)

Where the original assessment of the assessee was completed by the assessing officer after due application of his mind with respect to the issue of allowance of an item of expenditure, notice issued under section 148 of the Act stating the said expenses were not allowable by merely relying upon the existing records only was held to be invalid.

Legato Systems (India) (P) Ltd. vs. Dy. CIT (2010) 34 DTR 154 (Del.)

Notice issued without approval of concerned authority is without jurisdiction.

CIT vs. Suman Waman Chaudhary (2010) 321 ITR 495 (Bom.)

Editorial Note: SLP rejected on 12-2-2008 SLP No. 6757 of 2009 (2009) 312 ITR (St) 339.

Notice issued on the name of dead person held to be illegal. Notice issued to legal representatives beyond period of limitation hence not valid, being beyond time.

Kesar Devi (Smt.) vs. CIT (2010) 321 ITR 344 (Raj.)

Revenue Audit providing some opinion. No fresh materials brought in by the Assessing Officer. Change of opinion cannot form the basis for reopening of assessment. Proceeding becomes invalid.

Carlton Overseas (P) Ltd. vs. ITO (2010) 229 CTR 439 (Del.)

The issue as to whether the capital losses incurred by the assessee could be set off against the income assessed by the assessing officer under the block assessment under section 158 BC of the Act is a debatable issue and accordingly beyond the scope of rectification under section 154 of the Act.

CIT vs. Soora Subramanian (2010) 34 DTR 76 (Mad.)

Block assessment can only be made on the basis of evidence found during search. Where no evidence was found of unaccounted investment addition could not be made on the basis of valuation report of DVO.

CIT vs. Pramod Kumar Gupta (2010) 320 ITR 408 (Delhi)

Assessing officer having jurisdiction over the person searched had not recorded any satisfaction, as required under section 158BD, and consequently, the proceedings initiated under section 158BD were bad in law.

CIT vs. Anupam Sweets (2010) 321 ITR 485 (Delhi)

Loss and unabsorbed depreciation are to be set off against the total income in computing the undisclosed income of the block period.

H. E. Distilleries (P) Ltd. vs. Dy. CIT (2010) 229 CTR 457 (Kar.)

Search conducted on 31-10-2000 and assessment completed on 27-12-2002, revocation of prohibitory passed on 23-12-2000. Revocation order does not amount to execution of a search, as no asset seized. Period of limitation starts from 31-10-2000 hence order passed beyond limitation period (CIT vs. Deepak Agrawal (2009) 308 ITR 116 (Delhi).

CIT vs. Deepak Agrawal (SLP No. 16360 of 2009 dt. 9-7-2009.) rejected (2010) 321 ITR (St) 165. Section 271(1)(c)

Addition made by Assessing Officer was in respect of valuation of the stock of shares. The valuation had been done on the basis of stock exchange rate and there was no material before the Assessing Officer to add up the said amount.

Therefore it was held that the Tribunal was justified in deleting the additions.

CIT vs. Digvijay Chemicals (2010) 322 ITR 95 (All)

Noting on the seized paper representing payment schedule of agreement yet to be executed. Assessee establishing that noting on the seized paper was from regular books of account. Deletion was justified.

CIT vs. Tips Industries P. Ltd. (2010) 321 ITR 154 (Bom.) / (2010) 35 DTR 10 (Bom.)

The company is a juristic person having its distinct legal entity, separate from that of shareholders. The change in the shareholders or company does not change the legal identity of the company. Therefore, section 170 had no application to the facts of the case.

CIT vs. Panchratan Hotels (P) Ltd. (2010) 188 Taxman 299 (HP)

Assessee having not been assessed as an HUF ever before the assessment year in question, provision of section 171 could not be invoked to make assessment in the status of HUF.

Tirlochan Singh vs. CIT & Anr. (2010) 228 CTR 390 (P&H)

Once decree is passed, it is a judgment debtor of the Court, which culminates in to final decree being passed which has to be discharged only on payment of amount due under said decree and therefore judgment debtor is not liable to deduct tax at source on interest component of decree.

Madhusudan Shrikrishna vs. Emkay Exports (2010) 188 Taxman 195 (Bom.)

Tests laid down to determine when contract manufacturing will amount to a contract of sale for section 194C TDS.

CIT vs. Glenmark Pharmaceuticals (Bom.) Source: www.itatonline.org

Assessee, a cooperative society was formed by the truck owners and it entered into contracts with companies for transportation. The company deducted TDS @ 2%. Thereafter the assessee-society paid the amount to the truck owners on the basis of work done after deducting a nominal amount for administrative expenses. The relationship between assessee and its members was NOT that of a contractor and a sub-contractor. The assessee was formed as a matter of convenience. The society was nothing more than a conglomeration of truck operators themselves. The truck owners were virtual owners of the society even though the society was a distinct legal entity. The society was formed only because the companies were not ready to deal with individual truck owners. The society did not even retain profits. There was no sub-contract hence not liable to deduct tax at source.

Ambuja Darla Kashlog Mangu Transport Coop. Society vs. CIT (2010) 188 Taxman 134 (HP)

Discount offered by the assessee a cellular operator to the distributors on payments made by the distributors for the SIM cards / recharge coupons which are ultimately sold to the subscribers at list price is in the nature of commission and is subject to tax deduction at source (TDS) under section 194H of the Act.

CIT vs. Idea Cellular Ltd. (2010) 35 DTR 219 (Del.)

Where the appeal against order under section 195(1) and 201 was made, Appellate authorities cannot decide whether payment was assessable or not.

CIT & Anr. vs. Samsung Electronics Co. Ltd. (2010) 320 ITR 209 (Kar.)

Editorial Note : SLP admitted by supreme courts

Where the deductor had already discharged tax liability payable under section 201(1A) of the act and no further interest could be claimed by the revenue from the deductee-employee either under section 234A or section 234B or section 234C.

CIT vs. Emilio Ruiz Berdejo (2010) 320 ITR 190 (Bom.) / 228 CTR 145

Discretion to waive interest should be exercised judicially. The order should give reasons and rejection of application for waiver without giving reasons is held to be not valid.

Mani vs. CIT (2010) 320 ITR 472 (Mad.)

The property of the assessee in default was attached by the revenue authorities for recovery of its tax dues. During the pendency of the attachment, a civil suit was instituted by a third party in a Civil Court, claiming the ownership of the attached property. In these facts the Court held that the attachment of the assessee’s property for recovery of tax dues was valid and should be continued so that the interest of the revenue is protected however, the court directed the revenue authorities not to take further steps to sell / dispose of the property until the rights of the assessee and third party with respect to the ownership of the property is decided by the Civil Court.

Maxworth Home Ltd. vs. U. Yamunakumari & Anr. (2010) 36 DTR 72 (Mad.)

The court’s power of judicial review on the decision of the Settlement Commission is very restricted. The court can only consider whether the order of the settlement commission is contrary to the provisions of the Income Tax Act.

Mahavir Rolling Mills Pvt. Ltd. vs. Income Tax Settlement Commission & Anr. (2010) 40 TLR 18 (Guj.)

Appeal lies before the Commissioner of Income-tax (Appeals) under section 246A of the Act, against the order passed by the assessing officer in pursuant to the order passed / direction given by the Commissioner of Income-tax under section 263 of the Act.

Azhimala Beach Resorts (P) Ltd. vs. CIT (2010) 35 DTR 238 (Ker.)

Assessing Officer should be given opportunity to examine documents produced by assessee. Rule embodies provision of natural justice and it is mandatory, when assessee produced additional evidence first time before the CIT(A).

CIT vs. Shree Kangra Steel Pvt. Ltd. (2010) 320 ITR 691 (HP)

CIT (A) has not passed any order whatsoever on the stay application filed along with the appeal even after lapse of two and half months. Inaction on the part of CIT (A), is deprecated. CIT (A), is directed to hear the stay application and dispose of the same within period of 15 days and meanwhile no coercive action is to be taken against the assessee. CBDT is directed to issue a circular if necessary for disposal of stay application.

Smita Agrarwal (HUF) vs. CIT (2010) 230 CTR 173 (All)

The appellate Tribunal need not blindly follow earlier decision if it did not reflect the correct position of law.

CIT vs. HI Tech Arai Ltd. (2010) 321 ITR 477 (Mad.)

One bench cannot differ from the view of another co-ordinate Bench. Judicial discipline requires reference to larger bench in case of difference in views between benches on identical facts.

Mercedes Benz India Pvt. Ltd. vs. UOI (2010) 252 E.L.T. 168 (Bom.) / Source: www.itatonline.org

It is obligatory on the part of Tribunal to pass reasoned order and adjudicate the list on merits, by ascribing cogent and germane reasons after dealing with the factual issue in detail.

Rajesh Maheshwari vs. ACIT (2010) 36 DTR 43 (MP)

Income Tax Appellate Tribunal should dispose off stay granted appeals with in time limit prescribed under section 254(2A) i.e., not beyond 365 days from the stay order.

Shri Jethmal Faujimal Soni vs. ITAT (Bom.) Source: www.itatonline.org

As the Tribunal is final fact-finding authority, the Tribunal should deal with the issues both on facts and law, with reference to submissions urged and then write its own reasoning. The Tribunal is not justified in quoting the findings of the CIT(A) and simply upholding the same.

K. D. Wires Pvt. Ltd. (2010) 187 Taxman 257 (MP)

Where the Tribunal after specifically dealing with the decisions cited by the assessee and distinguished the same dismissed the assessee appeal. Thereafter, the Tribunal while dealing with the rectification application was held to be not justified in reapreciating the correctness of the same decisions once again and allowing the assessee appeal. The High Court observed that section 254(2) is not a carteblanche for the Tribunal to change its own view by substituting a view which has been taken by it earlier.

CIT vs. Earnest Exports Ltd. (2010) 36 DTR 274 (Bom.)

The Tribunal has no power to put restriction on Assessing Officer to determine income, either at figure higher than that determined by Assessing Officer under section 144 or at figure lower than that declared by assessee in original return.

CIT vs. H. P. State Forest Corporation Ltd. (2010) 320 ITR 54 (HP)

Issue not raised before the lower authorities cannot be permitted to be raised for the first time in appeal under section 260A.

CIT vs. Chand Ratan Bagri (2010) 36 DTR 244 (Del.)

Power of review has not been conferred on the High Court under the Income Tax Act, the review petition is not maintainable.

CIT vs. West Coast Paper Mills Ltd. (2010) 229 CTR 239 (Bom.)

Where a substantial question of law is raised by the revenue in the appeal filed by it before the Tribunal, which would arise in several other assesses case repeatedly, the case would fall within the exception of clause 3 of instruction No. 2 of 2005 dated 24.10.2005 and therefore, the appeal filed by the revenue was maintainable even though the tax effect is below the threshold limit prescribed by the C.B.D.T.

CWT vs. John L. Chackola (2010) 36 DTR 239 (Ker.)

CIT vs. Madhukar K. Inamdar (HUF) (2009) 27 DTR (Bom.) 132 – Dissented from

In absence of specific provision for condonation of delay in filing appeal under section 260A of the Act, High Court has no power to condone the delay in filing appeal before it under section 260A of the Act.

Shergarh Co-op. L & C Society Ltd. vs. ITO (2010) 34 DTR 193 (P&H)

Editorial Note : The law is amended now as facilitate condo nation of delay.

The condition precedent to the exercise of jurisdiction under section 263, was that the order sought to be revised must be erroneous in so far as it was prejudicial to the interest of revenue. When two views were possible, the assessment could not be revised.

Grasim Industries Ltd. vs. CIT (2010) 321 ITR 92 (Bom.) , 229 CTR 347 (Bom.) / 35 DTR 142 (Bom.)

Assessing Officer taking plausible view vis-à-vis book profit under section 115JB. As by virtue of Explanation to section 115JB and in view of SC decision in 305 ITR 409 in CIT vs. HCL Comnet Systems & Services Ltd., provision for bad and doubtful debts are not to be considered in terms of cl. (c) to the Explanation, the Order of revision by CIT was not justified.

CIT vs. DLF Power Ltd. (2010) 229 CTR 27 (Del.)

Assessee having offered an explanation as to why the impugned contract receipts could not be included in the relevant assessment year which is supported by an affidavit of his chartered accountant as well auditor’s report in Form No. 3CD, CIT(A) and the Tribunal were justified in accepting the same and setting aside the penalty under section 271(1)(c).

CIT & Anr. vs. N. Nagaraj Ballal (2010) 33 DTR 156 (Kar.)

Making a workable claim for deduction is not at par with concealment or giving inaccurate information – No penalty under section 271(1)(c).

CIT vs. Shahabad Co-op. Sugar Mills Ltd. (2010) 322 ITR 73 (P & H)

Loss suffered on sale of machinery set off against profit of business – Assessee on realizing the mistake committed accepted the decision of Assessing Officer. Mistake in furnishing of inaccurate particulars due to negligence of counsel was not a deliberate attempt to evade tax.

CIT vs. Sidhartha Enterprises (2010) 322 ITR 80 (P & H)

Where the assessment of the assessee was completed on estimated basis penalty under section 271(1)(c) of the Act was not imposable with respect to the additions made on such estimate by the assessing officer.

CIT vs. Modi Industrial Corporation (2010) 34 DTR 158 (P&H)

The requirement of getting the books of account audited could arise only where the books of account are maintained.

Assessee not maintaining books of account, penalty cannot be levied under section 271B.

CIT vs. S. K. Gupta & Co. (2010) 322 ITR 86 (All)

The tax had been deducted and deposited with the Government treasury. The TDS certificates were sent to the concerned persons by speed post on next day. Compliance under section 203. Penalty cannot be imposed.

CIT vs. Ashapura Garments P. Ltd. (2010) 322 ITR 83 (Bom.)

Service of notice under section 148 of the Act to the erstwhile accountant (Munim) of the assessee who is not an agent of the assessee empowered to accept the service of notice on behalf of the assessee, service of notice to such a person was held to be not a valid service. The Court further observed that, even the notice under section 142(1) of the Act was also served on the minor son of the assessee without verifying the age of the minor son which was also not a valid service to the assessee.

Bhagirath Rajput vs. CIT (2010) 36 DTR 372 (MP)

Land belonging to the assessee on which he has unauthorisedly constructed a farm house stands excluded from the definition of ‘urban land’ as per Expln. 1(b) to section 2(ea) as no construction was permissible on said land and therefore, it cannot be treated as an asset under the WT Act.

CWT vs. Lt. Gen. (Retd.) R. K. Mehra (2010) 228 CTR 205 (P&H)

Cash in hand in excess of Rs. 50000 held by individual assessese forms part of assets under section 2(ea)(vi).

CIT vs. K. R. Ushasree & Ors. (2010) 33 DTR 112 (Ker.)

An incomplete building under construction is not an asset and is not liable to wealth tax as it does not fall within the definition of a building nor within the purview of "urban land".

CIT vs. Neena Jain (Smt.) (2010) 36 DTR 49 (P & H)

The valuation of the property having determined for A.Y. 1971-72 and such assessments having been finalized and attained finality as it was not challenged the same would be applicable to the subsequent years.

CIT vs. Rawal Rajeshwari Singh of Samod (2010) 322 ITR 39 (Raj.)