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1. Accounts Valuation of
Stock S. 145
Valuation of slow moving and
obsolete items of stock at 10 per cent of the cost was held to be justified
especially when some the stock was sold in the subsequent year at 8.43 per
cent of the cost.
CIT vs. Wolkem India Ltd.
(2009) 18 DTR 190 (Raj)
2. Accounting S.144, 145
The Tribunal had noticed the
deficiencies pointed out by the Assessing Officer in the books of account
stating the principle that a certain amount of guess work had to be applied in
such cases. On appeal it was held, dismissing the appeal, that once the
authorities had come to the conclusion that the books of account were not
properly maintained and suffered from deficiencies, the Assessing Officer was
justified in computing income on a reasonable basis in an appropriate manner.
National Plastics Inds. vs.
ITO (2009) 309 ITR 191 (Bom)
3. Accrual of Income
Interest S.5
Accrued interest which was
receivable by the assessee only after the end of the previous year cannot be
assessed to tax in the current year even though the assessee is following
mercantile system of accounting.
CIT vs. FAL Industries Ltd.
(2009) 17 DTR 308 (Mad)
4. Appeal Block Assessment
246 A (1) & 253 (1) Block Period: 1-4-1985 to 26-9-1995
Appeal against the order of
the assessing officer simply giving effect to the order of the Tribunal would
only lie before the Tribunal and not before the CIT (A) u/s. 246A(1) of the
Act.
However, the High Court held
that though the Tribunal was right in holding that the appeal was not
maintainable before the CIT (A), it ought to have decided the assessees case
on merits and not simply dismiss the appeal.
Paras Rice Mills vs. CIT &
Anr. (2009) 18 DTR 149 (P&H)
5. Appeal CIT (A) Powers
S. 250
Additional Ground challenging
the assessment on the ground of limitation can be raised first time before the
CIT (A) in appeal against the fresh assessment order passed on remand, even
though it was not raised either before the assessing authority or the CIT (A)
in the first round of proceedings.
CIT vs. Smt. Madhu Patani
(2009) 18 DTR 110 (Ker)
6. Appeal to Commissioner
(Appeals) S.143(1)
It was held that the appeal
against intimation u/s. 143(1) relating to the assessment for the A.Y. 1996-97
was maintainable.
Balmukund Acharya vs. Dy. CIT
(2009) 310 ITR 310 (Bom)
7. Appellate Tribunal
Powers S. 254 (1)
Where the revenue authorities
had challenged the action of the CIT (A) granting a partial relief to the
assessee before the Tribunal and there was no appeal or cross objection filed
by the assessee in absence of such appeal or cross objection, Tribunal could
not grant 100 per cent relief to the assessee in appeal filed by the revenue.
CIT vs. Sisodia Marble &
Granite (P) Ltd. (2009) 18 DTR 147 (Raj)
8. Appeal to Appellate
Tribunal Request for adjournment in absence of respective counsel. S.254(1)
Where both the parties
request for adjournment in the absence of their respective counsels, the
Tribunal can consider their request or proceed to decide the case on the
merits instead of dismissing the case. The technicalities should take a back
seat as far as determination of rights of the parties are concerned. The
parties should be afforded opportunity to address arguments on the merits
instead of dismissing the case for default.
CIT vs. Avon Cycles Ltd.
(2009) 309 ITR 247 (P&H)
9. Assessment Partition
HUF S. 171
Provisions of section 171 of
the Act, deal with assessment after the division of the Hindu Undivided Family
(HUF). Thus, before provisions of section 171 of the Act can be invoked, to
assess the property even after partition, as a HUF, it should have been
assessed as HUF before such partition also.
Tirlochan Singh vs. CIT & Anr.
(2009) 19 DTR 277 (P&H)
10. Block Assessment Agent
of non resident Block Assessment not valid in the absence of satisfaction of
any condition mentioned in section 163(1) S. 158BD, 163(1)
During the course of search
and seizure action at the residential premises of the Assessee it was found
that Assessees non resident brother was maintaining some bank accounts. As
the source of deposits in those banks was not explained assessment order under
section 158BD was framed treating the Assessee as agent of his brother under
section 163(1). The CIT(A) set aside the assessment order. Tribunal confirmed
the same. Honble Court held that neither assessee had any business connection
with his non resident Indian brother, nor any income had come into existence
as having been received by non-resident Indian so as to attract provisions of
section 163(1)(c).
CIT vs. Rakeshchander Goel
(2009) 177 Taxman 15 (Punj & Har)
11. Block Assessment
Penalty 158 BFA (2)
Levy of penalty u/s. 158 BFA
(2) is discretionary and not mandatory.
CIT vs. Satyendra Kumar Dosi
(2009) 18 DTR 236 (Raj)
12. Business Expenditure
Administrative Expenses S. 37(1)
Administrative Expenses
incurred in connection with the modernization and expansion of the assessees
existing units is allowable as revenue expenditure even though the assessee
had capitalised these expenses in its books of accounts.
CIT vs. Triveni Engineering &
Industries Ltd. (2009) 19 DTR 274 (Del)
13. Business Expenditure
Advice for 7 years Revenue Expenditure
The Honble Court held the
expenditure as revenue on following reasons (i) under agreement assessee had
acquired only access to technical information, that is, know-how related to
process of manufacture, which was not related to any secret process or patent
rights or even right to use a trademark or trade name under agreement; (ii)
there was no transfer of ownership with respect to process and know-how in
favour of assessee; and (iii) under agreement the licenser was obliged to give
advice only for a period of 7 years, payment made by assessee to it would be
treated as revenue expenditure.
CIT vs J. K. Synthetics Ltd.
(2009) 176 Taxman 355 (Del.)
14. Business Expenditure
Capital or Revenue Expenditure incurred on development of website is revenue
expenditure S. 37(1)
The Assessee engaged in
travel business, incurred certain expenditure towards development of website
for the purposes of its business. This expenditure was claimed as revenue
expenditure. The A. O treated the same as capital expenditure. Tribunal
accepted the claim of the Assessee. The Honble High Court upheld the
Tribunals Order with the observation that merely because a particular
expenditure may result in an enduring benefit would not make such an
expenditure of capital nature as what is to be seen is real intent and purpose
of expenditure and as to whether there is accretion of fixed capital of
Assessee. As expenditure on website would not change the fixed capital of an
assessee, even though website might provide enduring benefit to Assessee,
expenditure incurred has to be regarded as revenue expenditure.
CIT vs. Indian Visit Com. (P)
Limited. (2009) 176 Taxman 164 (Del.)
15. Business Expenditure
Corporate Membership Fee S. 37(1)
Admission fees paid towards
corporate membership of a club is allowable as expenditure for the purpose of
assessees business.
CIT vs. Samtel Color Ltd.
(2009) 19 DTR 295 (Del)
16. Business Expenditure
Excessive and unreasonable payments. S.37(1)
Assessee apart from paying
handling charges at the rate of 9.5 per cent to its sister concerns had paid
handling charges at the same rate to other agents also.
Revenue had allowed similar
rate in earlier years. Sister concerns paying tax at a higher rate. Hence it
is not a case of evasion of tax. Under Board Cir. No. 6-P dated July 1968, no
disallowance was a to be made under sec. 40A(2) in respect of payment made to
the relatives and sister concern where there was no attempt to evade tax.
CIT vs. Indo Saudi Services
(Travel) P.Ltd. (2009) 310 ITR 306 (Bom)
17. Business Expenditure
Incentive bonus is deductable expenditure S.37(1)
The production incentive
bonus is liable to be deducted while computing business income, but it would
be allowed only when payment of bonus is made in assessment year in question.
CIT vs. Kisan Sahakari Chini
Mills Ltd. (2009) 176 Taxman 265 (Uttarakhand)
18. Business Expenditure
Interest S.40 A (2)
Where the interest paid by
assessee to close relative and associate concern is not more than the rate at
which interest was paid to other creditors the interest so paid cannot be
disallowed by invoking the provisions of section 40 A (2).
CIT vs. Amrit Soap Co. (2009)
17 DTR 350
(P& H)
19. Business Expenditure
Penalty Fine S.37 (1)
Penalty, fines, etc paid by
the assessee to State Electricity Board for violating power regulation
(drawing extra load in peak hours) was allowable deduction u/s. 37 (1) of the
Act. The Court further observed that if penalty is not for deliberate
violation of law the same should be allowed as deduction.
CIT vs. Hero Cycles Ltd.
(2009) 17 DTR
281 (P&H)
20. Business Expenditure
Production of Advertisment film S. 37 (1)
Expenditure incurred on
production of an advertisement film for promoting / marketing the assessees
products was allowable as revenue expenditure.
CIT vs. Geoffrey Manners &
Co. Ltd. (2009) 19 DTR 249 (Bom)
21. Business Expenditure
Sales tax deferred S. 43 B
Amount of sales tax deferred
under the State Governments Deferment Scheme could not be disallowed u/s. 43
B of the Act.
CIT vs. Jyoti Jain (2009) 17 DTR (Raj) 286
22. Business Income
vis-a-vis Capital Gain S.28,45
Property held for several
years in Capital Account and shown in Balance Sheet as a Capital Asset
Profit on sale of impugned property is to be assessed as Capital Gains and not
as Business Income.
CIT vs. Dcm Ltd. (2009) 221
CTR (Del) 513
23. Capital Gain Loan on
Tenancy right S. 45
Gain / loss arising on sale
of a tenancy right in respect of a building which is held by a real estate
dealer for a long time (more than 5 years) would be assessed as Capital gain /
loss, even though the same was shown as stock in trade in its books of
accounts.
CIT vs. Hitashi Estates Ltd. (2009) 18 DTR 206 (Del)
24. Capital Gain Immovable
property S. 45
Capital gain on sale of
immovable property was chargeable to tax in the year in which actual physical
possession of the property is given to the purchaser even though the agreement
is entered into in earlier year.
CIT vs. Geetadevi Pasari
(2009) 17 DTR 280 (Bom)
25. Capital or Revenue:
Foreign Exchange Rate Fluctuation: S.37
It was held that loss on
account of foreign exchange rate fluctuation allowable.
CIT vs. L. G. Electronics
India P. Ltd. (2009) 309 ITR 265 (Delhi)
26. Cash Credits Burden of
Proof Gift. S. 56
Donee to establish not only
the identity of donor but also his capacity to make a gift and actual receipt
from him. Financial position of donor not suggesting his capacity to make gift
or source from where gift made. Donor never visited house of assessee. Hence
there was no love and affection. Transaction was not genuine, hence amount
claimed as gift assessable as income of assessee.
Yash Pal Goel vs. CIT (2009)
310 ITR 75 (P&H)
27. Cash Credit Capital
contribution by partners S. 68, 69
Capital contribution made by
the partners on the first day of the commencement of the business could not be
added in the hands of the firm. However, if the partners fail to discharge the
onus of proving the source of such deposits by them in the firm, then the same
could be added to the income of the partners concerned in term of section 69
of the Act.
CIT vs. Kewal Krishan &
Partners (2009) 18 DTR 121 (Raj)
28. Cash Credit Rejects of
Books of accounts S. 68, 145(3)
Where the assessing officer
rejected the books of accounts maintained by the assessee and estimated the
income by invoking provisions of section 145 (3) of the Act, no separate
addition of cash credit u/s. 68 of the Act can be made in such case even
though the assessee has failed to discharge the onus of explaining the credits
in its books of account.
CIT vs. G.K. Contractor
(2009) 19 DTR 305 (Raj)
29. Cash Credit Share
Application money S. 68
(i) Share Application money
Existence of applicants accepted. Assessing Officer has not shown that the
Applicants did not have means to make the investments and that such
investments actually had come from the coffers of the Assessee Company.
Addition is rightly deleted.
CIT vs. Value Capital Service
(P) Ltd. (2009) 221 CTR (Del) 511
(ii) Where the identity and
creditworthiness of the subscriber to the shares and the genuineness of the
transaction is established, share application money received by the assessee
cannot be added u/s. 68 of the Act as unexplained cash credit.
CIT vs. Samir Bio Tech P.
Ltd. (2009) 17 DTR 224 (Del)
(iii) Where the identity of
the shareholders were established, all the shareholders were income tax
assessees and disclosed the transaction in their accounts which were reflected
in their income tax return also, simply because the monies were received as
share application money by a private limited company in cash, the same cannot
be treated as cash credit under section 68 of the Act.
Bhav Shakti Steel Mines (P)
Ltd. vs. CIT (2009) 18 DTR 194 (Del)
(iv) Share application money
was received by the assessee through account payee cheque from a Company which
is regularly assessed to tax and having a substantial amount of paid up
capital. Further, the subscribing Company was also a member of the National
Stock Exchange (NSE) and involved in purchase and sale of shares of other
Companies. The onus in respect of veracity and genuineness of the transaction
was held to be established and additions u/s. 68 of the Act was not
sustainable.
CIT vs. Gangour Investments
Ltd. (2009) 18 DTR 242 (Del)
30. Charitable Purpose S.
11 & 13
Assessee a charitable trust
constructed a building by borrowing funds from outside as well as investing
its own corpus funds. The building so constructed was let out to a concern in
which its trustees were directors. The rental income so received by the trust
was utilised for the purpose of repaying the loan. A.O. held that the assessee
was not entitled to benefit u/s. 11 and 12 of the Act as the rental income
received by the assessee was not utilised for the object of the trust and also
that the building so constructed was let out to the concerned in violation of
section 13 (1) (c) of the Act. On these facts the Honble High Court held that
the income derived from renting out the building was used for repayment of
loans with the ultimate object of applying the income, after the loans had
been fully repaid, towards charitable objects of the trust. Therefore the
application of rental income for the repayment of loan was towards charitable
object. Further, the rent received by the trust was more than the standard
rent as computed under the rent control laws, as such, no benefit was derived
by any interested person, therefore provisions of section 13 (1) (c) were also
not attracted.
DIT (Exemption) vs. Span
Foundation (2009) 17 DTR 283 (Del)
31. Charitable Trust S. 11
The CIT rejected the
application for condonation of delay in filing Form No. 10, before the expiry
of time allowed u/s. 139 (1) of the Act, being notice for accumulation of
income by the trust. On writ filed by the assessee trust the High Court
considering the fact that the assessee was a State Government undertaking and
has been registered u/s. 12A of the Act since many years and also the fact
that the delay in filing Form No. 10 was because the chartered accountant of
the trust was not able to finalize the accounts in time, the High Court
quashed the order of the CIT and directed him to pass appropriate orders.
Kerala Rural Employment &
Welfare Society vs. Asstt. Director of Income-tax & Anr. (2009) 18 DTR 300 (Ker)
32. Deduction Audit Report
Industrial Undertaking S.80 IA
For the purpose of claming
deduction u/s. 80 IA of the Act, the prescribed audit report in Form No. 10
CCD is to be furnished along with the return of income itself. Deduction
cannot be allowed to the assessee if the same is filed during the course of
assessment proceedings before the assessing officer.
CIT vs. Jyoti Jain (2009) 17
DTR (Raj) 286
33. Deduction Old unit
merging with a larger new unit Eligible for deduction S. 80IA
The true test to claim
deduction under Section 80-IA is not whether new industrial undertaking
connotes expansion of existing business of assessee but whether it is all the
same a new and identifiable undertaking, separate and distinct from existing
business. The reconstruction of business or an industrial undertaking must
necessarily involve concept that original business or undertaking does not
cease functioning and its identity is not lost or abandoned. The Section 80IA
approves a situation in which an old existing smaller industrial undertaking
is absorbed by a new and much bigger industrial undertaking.
CIT vs. Mahaan Foods Ltd.
(2009) 177 Taxman 274 (Delhi)
34. Deduction Industrial
undertaking Revised return S. 80IB
The Assessee inadvertently
not claimed the deduction in its return though documents such as Form No. 10
CCB were furnished during assessment proceeding. Deduction is admissible even
in the absence of a revised return.
CIT Vs. Ramco Intl. (2009)
221 CTR (P & H) 491
35. Depreciation condition
precedent use of machinery: S.32
It was held that where
machinery is installed but found defective it will amount to use of machinery.
Hence assessee was entitled to depreciation.
CIT vs. Chamundeshwari Sugar
Ltd. (2009) 309 ITR 326 (Karn.)
36. Depreciation Dumper
S. 32
Where a civil contractor was
required to transport earth from one place to another and its business receipt
includes charges for transportation of such earth. The assessee was entitled
to higher rate of depreciation on trucks / dumper.
CIT vs. S.C. Thakur & Bros.
(2009) 18 DTR 271 (Bom)
37. Depreciation Ready to
use S. 32
Assessee is entitle to claim
deprecation on emergency spare parts of machinery, which are kept ready for
use but, were not actually used during the relevant year.
CIT vs. Insilco Ltd. (2009)
20 DTR 65 (Del)
38. Double Taxation
Avoidance Treaty will prevail over provisions of Income Tax Act. S.90
It was held, income from
receipt of royalties as set out in sec. 9(1) (vi) are taxable in India whether
or not the non-resident has a place of residence, or place of business or
business connection in India. However, the correct interpretation of the
Double Taxation Avoidance Agreement would be to include the royalties from
patents, copyrights or trade marks and the like within the expression
industrial or commercial profits. This income would not be royalties
within the meaning of the Double Taxation Avoidance Agreement but would fall
under the expression commercial or industrial profits. In the absence of a
permanent establishment, such income would not be taxable in India.
CIT vs. Siemens
Aktiongesellschaft (2009) 310 ITR 320 (Bom), (2009) 177 Taxman 81 (Bom)
39. Exemption Export
oriented undertaking S.10 B
Activity of cutting,
polishing and sizing of granites amounts to production in case of assessee
engaged in activity entitled to exemption u/s. 10 B of the Act.
CIT vs. Fateh Granite (P)
Ltd. (2009) 20 DTR 257 (Bom)
40. Expenses Training fee
before installation of plant to be capitalised S. 32
The expenses incurred by
Assessee towards training fees of its personnel before setting up of plant
were to be capitalized as part of plant and machinery and depreciation was to
be allowed in respect of the same.
CIT vs. Gujarat Guardian Ltd.
(2009) 177 Taxman 434 (Del.)
41. Export Deduction S.
80 HHC
Amount received by the
assessee towards quality claim for raw materials does not form part of the
total turnover for the purpose of calculating deduction u/s. 80 HHC of the
Act.
CIT vs. Smt. K.R. Ushasree
(2009) 18 DTR 113 (Ker)
42. Export Deduction
Local Sales S.80 HHC
For the purpose of computing
deduction u/s. 80 HHC of the Act, local sales does not form part of the total
turnover.
CIT vs. FAL Industries Ltd.
(2009) 17 DTR 308 (Mad)
43. Income Accrual Duty
draw back S. 5
Duty drawback and cash
assistance could not be charged to tax on accrual basis.
CIT vs. Bajaj Auto Ltd.
(2009) 20 DTR 241 (Bom)
44. Income from other source
Relinquishing right S. 56
Receipt by the assessee a
partner for relinquishing his right in the firm so as to enable the firm to
sell its land, pending the final decree for dissolution was liable to be
assessed as income from other sources.
Smt. Visalakshy Kumaran vs.
CIT (2009) 18 DTR 139 (Ker)
45. Income from House
Property S. 22
Where the assessee had sold
the flat, received entire sale consideration and handed over the possession of
the flat to the purchaser however, registered sale deed was still not
executed, under these circumstance, it was held that the assessee ceases to be
the owner of the flat for the purpose of section 22 of the Act.
Pallonji M. Mistry (Decd.)
vs. CIT (2009) 19 DTR 286 (Bom)
46. Income from other
sources / business income hotel S.28, 56
Lease of Hotel under
agreement for 33 years with option of further renewal for 33 years Assessee
had no intention to resume hotel business. It was held that amount received by
assessee is income from other sources and not business income.
East West Hotels Ltd vs. Dy.
CIT (2009) 309 ITR 149 (Karn)
47. Income from undisclosed
sources S. 69A
Addition u/s 69A in respect
of unexplained jewellery and unaccounted sales Assessing Officer makes the
addition merely by relying on the findings of Directorate of Revenue
Intelligence and Commissioner of Customs. In the absence of any independent
enquiry made by the Assessing Officer, no addition is sustainable.
CIT vs. Vignesh Kumar
Jewellers. (2009) 222 CTR (Mad) 79
48. Interest S. 234 B
Where the payer fails to
deduct tax at source on the payments made by him to the payee, no interest
u/s. 234 B of the Act can be imposed on the payee.
Director of Income tax
(International Taxation) vs. NCG Network Asia LLC (2009) 18 DTR 203 (Bom),
(2009) 222 CTR 86 (Bom)
49. Interest Tax Act, 1974
S. 4 (2)
Interest earned on
refinancing operations is not taxable interest under the Interest tax Act,
1974.
HP State Industrial
Development Corporation ltd. vs. CIT (2009) 17 DTR 26 (HP)
50. Interest Income S. 56
Interest income which accrued
to the assessee during the pre operative period on the funds kept with the
bank which, were specifically earmarked for purchase of capital asset
constitute capital receipt and could not be taxed under the head income from
other source.
Indian Oil Panipat Power
Consortium Ltd. vs. I.T.O. (2009) 20 DTR 107 (Del)
51. Loss Carry forward
Return filed S. 72
The assessee claimed a lesser
amount of loss in its return filed. Subsequently, during the assessment
proceeding before the assessing officer claimed a higher amount of loss. The
High Court held that the claim of the assessee of a higher loss was correct
and allowed the assessee to carry forward and set off the same in subsequent
years.
CIT vs. Nalwa Investments
Ltd. (2009) 19 DTR 235 (Del)
52. Method of Accounting
S.145
FIFO Method changed to
average cost method on account of practical difficulties faced by assessee it
was held that it was a reasonable ground for changing method of accounting.
CIT vs. H.P. State Civil
supplies Corpn. Ltd. (2009) 309 ITR 102 (HP)
53. Mistake apparent on
record Non consideration of provision of Act error apparent on record S.154
It was held that the
Assessing Officer had not taken into consideration clause (v) of the
Explanation to sub sec. (2) of sec. 115JA of the Act. The assessees being
industrial undertakings located in a backward state or district were entitled
to 100 per cent, exemption in terms of sec. 80IB and 80IA of the Act. The
orders passed by the assessing officer suffered from error apparent on the
face of the record having been passed without considering the provisions of
the Act.
CIT vs. Kushal Bagh Minerals
P. Ltd. (2009) 310 ITR 125 (Raj)
54. Penalty Block
Assessment S. 158 BFA (2)
(i) Levy of penalty is
discretionary and not mandatory. As the undisclosed income represents the
estimation of opening capital prior to the block period and the said capital
cannot be treated as undisclosed income for the first assessment year in the
block period, the Tribunal is right in deleting the penalty.
CIT vs. Satyendra Kumar Doshi
(2009) 222 CTR ( Raj) 258
(ii) Search and Seizure
Determination of undisclosed income with regard to surrender of income Levy
is discretionary and not mandatory. As block assessment is made on the basis
of bonafide surrender by the Assessee de hors any evidence of undisclosed
income found during search, the levy of penalty u/s 158 BFA (2) is not
sustainable.
CIT vs. Harkarandas Ved Pal
(2009) 222 CTR (Del) 438
55. Penalty Concealment
S. 271(1)(c)
The Tribunal had held that
penalty u/s. 271 (1) (c) of the Act was not leviable because of a bona fide
claim of deduction by the assessee u/s. 80 HHC of the Act supported by the
certificate of a Chartered Accountant. The Tribunal also noted that when the
claim was preferred by the assessee there was a conflicting judicial opinion
on the issue. On these undisputed facts recorded by the Tribunal and also by
the CIT (A), the High Court declined to hold that the order of the Tribunals
erroneous.
CIT vs. Lakhani India Ltd.
(2009) 17 DTR 304 (P&H)
56. Penalty Concealment of
Income Non filing of Return S.271(1)(c)
It was held that penalty can
be imposed for concealment for the non-filing of return by an assessee who had
been assessed for several A.Y. prior to the A.Y. 1984-85.
CIT vs. U.P. State Handloom
Corpn. (2009) 310 ITR 54 (All)
57. Prosecution S. 276 CC
& 278 B
Where the delay in filing the
return was explained by the accused firm due to the illness of the old part
time accountant of the accused firm, the cause shown by the accused firm was
held to be a reasonable cause for delay in filing the return of its income.
UOI vs. Bhavecha Machinery & Ors. (2009) 17 DTR 387 (MP)
58. Reassessment Interest
Tax S. 10
Reopening of assessment to tax interest on accrual basis instead of receipt
basis was held to be invalid. Further the High Court held that the order
passed by the CIT (A) in another assessees case cannot be a reason to reopen
the assessment of the assessee.
HP State Industrial
Development Corporation ltd. vs. CIT (2009) 17 DTR 26 (HP)
59. Reassessment
Opportunity to cross examine S.148
There was reassessment on
basis of statements made by certain individuals. Assessee was not given
opportunity to cross examine those individuals. It was held that proceedings
were valid up to the point of time of recording statements, and the
proceedings after recording statements of individuals were set aside.
CIT vs. Sanjeev Kumar Jain
(2009) 310 ITR 178 (P&H)
60. Reassessment Service
of Notice S. 148
Service of notice u/s. 148 of
the Act upon the assessee is the precondition for framing assessment u/s. 147
of the Act. Thus, where the notice was not served upon the assessee for
reassessment for the year 2001 02 the reassessment framed u/s. 147 of the
Act was held to be bad in law. The court further held that the provisions of
section 292 BB of the Act cannot be invoked by the revenue in the assessees
case as the provisions were introduced from 1-4-2008 which were not applicable
to assessment year under consideration.
CIT vs. Mani Kakar (2009) 18
DTR 145 (Del)
61. Recovery Civil S.
281
Where the Department desires
to declare the transaction entered into by the assessee in default as void
under the provisions of section 281 (1) of the Act, the department being in
the position of a creditor has to file a civil suit for a declaration that the
transfer is void.
Ryan Plast vs. I.T.O. & Ors.
(2009) 19 DTR 285 (Bom)
62. Rectification Mistake
Apparent on Record Tribunal S. 254 (2)
Where the Tribunal rejected
the Appeal and also the rectification application relying upon the decisions
which were neither cited by the departmental representative nor the assessee
who had any notice of the same and also without taking into consideration the
vital statements, the High Court on writ filed by the assessee remanded the
matter to the Tribunal to decide it afresh after hearing both the parties in
accordance with law.
Naresh K. Pahuja vs. I.T.A.T.
& Ors. (2009) 19 DTR 273 (Bom)
63. Rectification of mistake
apparent on record Levy of surcharge on tax under section 113 was a debatable
issue on the date when tribunal passed the order S. 113, 254(1)
The Assessing Officer, after
passing the Assessment Order realized that surcharge leviable on tax under
section 113 has not been charged. The Assessing Officer passed an order under
section 154 levying the surcharge. The order passed under section 154 was
upheld in appeal by CIT(A). On an appeal, Tribunal vide its order dated
6-5-2005 held that non charging of surcharge could not be stated to be a
mistake apparent from record, and that any issue which was debatable one,
could not be subject matter of an order under Section 154. On an appeal by the
Department the department relied on the decision of the Apex Court in the case
of CIT vs. Suresh N. Gupta (2008) 297 ITR 322 (SC). The Honble Court held
that when the Tribunal passed the order the issue before it was a debatable
one. Therefore, Tribunal order did not require any interference.
CIT vs. Kirti kumar Shah
(2009) 176 Taxman 29 (Raj.)
64. Refund Interest S.
244A
Assessee is entitled to
interest on the amount of interest allowable u/s. 244A of the Act.
CIT vs. H.E.G. Ltd. (2009) 19
DTR 316 (M.P.)
65. Relief u/s. 10(10C)
Voluntary Retirement S. 10(10C)
It was held that amounts up
to five lakhs of rupees received on voluntary retirement entitled to exemption
under sec. 10(10C). Amount in excess of five lakhs of rupees was entitled to
relief under sec. 89.
CIT vs. Koodathil Kallyatan
Ambujakshan (2009) 309 ITR 113 (Bom)
66. Reserves for Shipping
Business S.33AC(1)
It was held that it was clear
from sec. 33AC(1) as applicable to the A.Y. 94-95 that the only requirement
prescribed was that the assessee must be a Govt. company or a company formed
and registered in India with the main object of carrying on the business of
operation of ships. There was no such requirement that the assessee in order
to be eligible for deduction had to actually operate ships or that the amount
in respect of which deduction was to be allowed and credited to the reserve
account had to be the income earned from shipping business. It was further
held that Amendment to section 33AC with effect from April 1, 1996 was not
clarificatory or retrospective.
Gal Offshore Services Ltd vs.
CIT (2009) 309 ITR 125 (Bom)
67. Return Validity of
Return Defective Return S.139
It was held that where the
return did not bear the signature of the assessee and had not also been
verified by her, the return was an absolutely invalid return as it had a
glaring inherent defect which could not be cured in spite of the deeming
effect of sec. 292B.
CIT vs. Harjinder Kaur (2009) 310 ITR 71 (P&H)
68. Revision Power to
Revise S.263
Assessing Officer partially
disallowed claim under sec. 80-I. Commissioner (Appeals) accepted entire
claim. Commissioner (Appeals) taking different view is not a case of an order
erroneous and prejudicial to revenue. Hence Commissioner u/s. 263 could not
withdraw special deduction under sec. 80-I in revision proceedings.
CIT vs. Nirma Chemicals Works
P. Ltd. (2009) 309 ITR 67 (Guj)
69. Revision S.263
Order u/s 263 as per the
direction of earlier CIT - Assessing Officer passing the revised Order as per
the revised return filed by the Assessee. In the absence of any error or
anything unsustainable in law in the said Order, the Order could not be
revised by the subsequent CIT.
Virendra Kumar Jhamb vs. CIT
(2009) 222 CTR (Bom) 88
70. Search and Seizure S.
132(5)
It was held, that when a
public trust like the petitioner which ran a number of educational
institutions had claimed exemption in view of the provisions of sec. 10(22) of
the Act, the officer passing orders u/s. 132(5) had to find out at least prima
facie as to why and how such trust was not entitled to exemption. The order to
the extent that he refused to consider the plea of the petitioner for
exemption u/s. 10(22) of the Act was liable to be quashed.
Anjuman Hami E- Islam and
Ors. vs. CIT (2009) 310 ITR 37 (Bom)
71. Tax Deduction at Source
Liabilitity on payee Interest S.234B
Scope of chargeability
income subject to TDS When a duty is cast on the payer to deduct tax at
source, on the failure of the payer to do so, no interest can be imposed on
the payee Assessee u/s 234B
Director of IT (International
Taxation) vs. NGC Network Asia Ltd. (2009) 222 CTR 86 (Bom), 18 DTR 203 (Bom)
72. Tax Deduction at Source
Works contract S. 194 & 201 (1)
Payments made by the assessee
to the employees employed by it on daily wage basis cannot be said to be a
contractual payment, as such the assessee in such cases was not required to
deduct tax from such payments u/s. 194 C of the Act.
Where the assessee had
produced confirmation from the parties to whom payments were made, confirming
the fact that they have included the amount received from the assessee as
their income and paid taxes thereon, the assessee cannot be treated as
assessee in default under the provisions of section 201 (1) of the Act for non
deduction of tax at source.
CIT vs. Dewan Chand (2009) 17
DTR 337 (Del)
73. Transfer Pricing
Constitutional validity of provisions S.92, 92A
It was held that Chapter X
dealing with Transfer Pricing was Constitutionally Valid. Article 14 of the
Constitution applies even to a taxing statute, it does not prevent the
legislature from making classification having intelligible differentia and
nexus with the object of classification.
Coca Cola India Inc. vs. ACIT
(2009) 309 ITR 194 (P&H)
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