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Database updates
Judgments
Commissioner of Income Tax, Thiruvanathapuram vs Joseph Valakuzhy
[SUPREME COURT OF INDIA, 06 May 2008]
Income Tax Act, 1961, s. 260 - Assessee claming benefit of carry forward of Rs.39, 43, 830/- as amortization expenses - Held, r. 9A provides for deduction of expenditure incurred on production of feature films - R. 9A would appropriately be applicable to the present case, as the respondent is doing the business of producing feature films - Deduction for expenditure incurred on production of feature films is appropriately governed by r. 9A - If a film is not released for exhibition on a commercial basis at least 180 days before the end of such previous year, the cost of production of the film insofar as it does not exceed the amount realized by the film producer by exhibiting the film on a commercial basis, is to be allowed as a deduction in computing the profits and gains of such previous year and the balance, if any, is to be carried forward to the next following previous year and allowed as a deduction in that year - Appeal dismissed.
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Kvaverner John Brown Engineering (India) Private Limited vs Assistant Commissioner of Income Tax, Bangalore
[SUPREME COURT OF INDIA, 29 Apr 2008]
Income-tax Act, 1961 - Whether appellant-assessee was liable to pay additional tax on account of adjustment on its return for the assessment year 1996-97 and 1997-98 under s. 143(1)(a) r/w s. 143(1A) vide order dated 17.12.1997? - Held, when there were conflicting judgments on interpretation of s. 80-O, prima facie adjustments contemplated under s. 143(1)(a) was not applicable and, therefore, consequently appellant was not liable to pay additional tax under s. 143(1A) - Appeals allowed.
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Deputy Commissioner of Income Tax, Ahmedabad vs N.K. Industries Limited
[SUPREME COURT OF INDIA, 22 Apr 2008]
Income Tax Act, 1961 - Plea that for allowance of deduction for depreciation, the asset must not only be owned by the assessee but it must also be used for the purposes of business or profession of the assessee - Held, Tribunal has examined the statements of certain witnesses and after analysing the material on record, it has come to the conclusion on facts that there is nothing to show that the machinery, namely, expellers remained idle for the entire block period 1-4-1988 to 24-2-1999 - Appeal dismissed.
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Dr.C.M.K.Reddy vs (1) Settlement Commission (It/Wt), Additional Bench, Anna Salai, Nandanam, Chennai; (2) Deputy Commissioner of Income Tax, Range XIV, Chennai; (3) Commissioner of Income Tax-X, Chennai; (4) Commissioner of Income Tax, (Appeals-XII), Chennai
[MADRAS HIGH COURT, 17 Apr 2008]
Income Tax Act, 1961 - s. 245C(1) - Writ petition filed for issuance of writ of certiorarified mandamus to quash order of Settlement Commission dismissing application filed by petitioner u/s. 245D(1) of the Act and to direct first respondent to take up application and proceed further for settlement of disputes - Application dismissed on grounds that applicant had not made "full and true" disclosure of his income and therefore, did not satisfy conditions for admission of application filed u/s. 245C(1) and there was no 'case' within the meaning of s. 245A(B) of the Act therefore, application u/s. 245C was not maintainable - Settlement Commission had opined that the document produced though claimed to be a will, was really a gift deed as the sum of Rs.12.5 lakhs has been paid by the testator during her lifetime itself, i.e., on the date of the execution of the deed and petitioner had not filed any gift tax return and in absence of any evidence as to source of amount Commission came to conclusion that source of the amount remained unproved - Whether order of the Settlement Commission was legally sustainable? - Held, assessee who makes an application should make a full and true disclosure of the income which is not disclosed before the assessing officer and the manner in which such income has been derived, which is a pre condition or a mandatory requirement for maintaining an application under section 245-C read with Rule 44C 44CA - Application made by the petitioner under section 245C, in the absence of full and true disclosure of the income which the petitioner has not disclosed before the assessing officer and the manner in which it was derived could not be regarded as an application as required under section 245C(1) - Petition dismissed.
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Rangalatchumi Educational Trust and P.S.N.A.College of Engineering and Technology, Represented By Its Chair Person, K.Dhanalakshmi, Dindigul vs (1) Secretary To Government, Rural Development (C2)Department, Chennai; (2) District Collector, Dindigul; (3) Block Development Officer, Reddiar Chatram Panchayat Union Reddiar Chatram, Dindigul; (4) Silvarpatty Panchayat, Represented By Its President, Silvarpatti, Dindigul
[MADRAS HIGH COURT, 16 Apr 2008]
Writ petition to seek grant of exemption from payment of property tax for the buildings of the institution which was an Engineering College run on self-financing pattern by the trust and the buildings were used for educational purposes - Division Bench confirmed the judgment of 'Kamraj College of Engineering and Technology' in 'Sriram Education Trust' wherein it was held that on a plain reading of Rule 15C of the Tamil Nadu Village Panchayat (Assessment and Collection of Taxes) rules, 1999, the dominant object or use of the buildings for educational purposes alone should be considered for granting exemption and nothing more or less is required, since the said rule is in unqualified terms - Held, matter is covered by the judgment of the Division Bench - Petition allowed.
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Commissioner of Income Tax Delhi-Xiii, New Delhi vs Yogender Sharma, E-34, Krishan Nagar, Delhi
[DELHI HIGH COURT, 11 Apr 2008]
Income-tax Act, 1961 - s. 32A - Whether ITAT was correct in law in directing the ITO to grant investment allowance on purchase of X-ray machine to the assessee, practicing Radiologist, in terms of s. 32A of the Income-tax Act, 1961? - Held, expression industrial undertaking must be read in the context of the Income Tax Act and not in the context of the Industrial Disputes Act - Machinery or plant must be installed first of all in a small scale industrial undertaking and secondly it must be used for the purposes of business of manufacture or production of any article or thing - It may be that a machine or a plant within a clinic or a hospital or a diagnostic centre may manufacture or produce an article or thing; but that would not convert a clinic or a hospital or a diagnostic centre into an industrial undertaking; primary condition is not met inasmuch as the clinic of the Assessee cannot be said to be an industrial undertaking, if that be so, it is of no consequence whether the X-ray machine manufactures or produces an article or a thing - Petition disposed of.
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Sahara India (Firm), Lucknow vs Commissioner of Income Tax, Central-I and Another
[SUPREME COURT OF INDIA, 11 Apr 2008]
The Judgment was delivered by : HON'BLE JUSTICE D. K. JAIN1. Leave granted.2. These matters have been placed before the three-Judge Bench in view of a common order dated 14th December, 2006, passed by a two-Judge Bench of this Court. The Order reads
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Dynavision Limited, Represented By Its Managing Director, P.Vijayakumar Reddy, Chennai vs (1) Income Tax Appellate Tribunal, Madras Bench A, Chennai; (2) President, Income Tax Appellate Tribunal, Madras Bench A, Chennai; (3) Commissioner of Income Tax, Central Circle II (1) Madras; (4) Income Tax Officer (Osd), Company Circle-I, Chennai; (5) Assistant Commissioner of Income Tax Company Circle-I (4), Chennai; (6) Manager, Indian Overseas Bank, Thiruvanmuyur Branch, Chennai; (7) Manager, State Bank of India, Securities and Services Division, Chennai Main Branch, Chennai
[MADRAS HIGH COURT, 09 Apr 2008]
Income Tax Act, 1961 - s. 255(4) - Writ petition to challenge order passed by Third member against assessee by formulating questions on his own - Petitioner submitted that Third member had no right to go beyond the scope of reference in a matter of difference of opinion between the Judicial Member and the Accountant Member and had to consider only the difference of opinion stated by the Members and Third Member had exceeded his jurisdiction, order passed by him had to be set aside - Held, reading of s. 255(4) makes it clear that whenever the members of a Bench differ in opinion on any point, the point shall be decided according to the opinion of the majority, if there is a majority; if the members are equally divided, they shall state the point or points on which they differ, and the case shall be referred by the President of the Appellate Tribunal for hearing on such point or points by one or more of the other members of the Appellate Tribunal, and such point or points shall be decided according to the opinion of the majority of the members of the Appellate Tribunal who have heard the case including the person, who first heard it - Order of reference to the Third Member shall contain the difference of opinion between the Members of the Bench - President or the Third Member has no right to go beyond the scope of reference and they have to consider only the difference of opinion stated by the Members of the Bench; s. 255(4) does not vest such power with the President or the Third Member; framing the question on their own goes beyond the jurisdiction - Petition disposed of.
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Commissioner of Wealth Tax, Bombay City-I, Bombay vs Sona Properties Private Limited, Bombay
[BOMBAY HIGH COURT, 07 Apr 2008]
Wealth Tax Act, 1957 - Whether ITAT was justified in holding that the Assessing Officer was not justified in re-opening the Assessment on the basis of the valuation report obtained by him subsequent to the date of completion of assessment? - Can the report called from the DVO before the Assessment order was passed but received after the order was passed, constitute material for "reason to believe" based on which notice u/s. 17, could have been issued for reopening the assessments already completed? - Held, where the report was called for during the pendency of the proceedings but received subsequent to the completion of assessment the law would be that such report/order can be the basis for issuing notice for reopening the assessment under Section 17(1) of the Wealth Tax Act - Appeals disposed of.
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Director of Income Tax (Exemption), New Delhi vs Jaipur Golden Charitable Clinical Laboratory Trust, New Delhi
[DELHI HIGH COURT, 03 Apr 2008]
Income Tax Act, 1961 - Appeal filed u/s. 260A of the Act to challenge order holding that donation amount could not be treated as income of the Assessee- a charitable trust, as it was optional for the consulting doctors to contribute donation of Rs. 10, 000/- and the said donations were not forced donations - Whether Tribunal was correct in law in holding that donation of Rs.6, 10, 000/- received by the Assessee from doctors towards corpus holding were voluntary in nature in view of the provisions laid down in ss. 11 and 12 of the Act? - Held, it was optional for the consulting doctors to contribute donations which are also apparent from the fact that only 61 doctors opted for such arrangement out of 141 doctors working for the Assessee; clause neither binds nor forces the doctors; it only gives the option to give or arrange donations in case he wants less deduction from the professional fee payable to him. Considering - Donations by the doctors have been given of its own volition and without any force - Voluntary contributions did not constitute income in the hands of the recipient trust; Assessee had received voluntarily contribution towards corpus of the fund and consequently the sum of Rs.6, 10, 000/- could not be treated as income of the Assessee - Appeal dismissed.
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P. Soundarya vs Income Tax Officer, Tamil Nadu
[SUPREME COURT OF INDIA, 01 Apr 2008]
Income Tax Act, 1961 - High Court confirmed the conviction and sentence imposed on appellant under ss. 420 r/w s. 511 IPC and s. 193 IPC r/w s. 136 of 1961 Act - Appeal against - Held, having regard to the peculiar facts and circumstances of the case that the appellant has been acquitted under ss. 276-C(1) and 277 of the Act and that the matter relates to the Assessment Year 1983-1984 ends of justice will be sub- served if the appellant's sentence is reduced to the period already undergone - Appeal disposed of.
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(1) Sales Tax Practitioners' Association of Maharashtra and Tushar P. Joshi; (2) Bar Council of Maharashtra and Goa; (3) Bombay Small Scale Industries Association and Raksh Pal Abrol, President, The Bombay Small Scale Industries Association; (4) Maharashtra State Tax Practitioner Associations Federation, A Society Registered Under The Provisions of The Indian Societies Act Through Its President, Shri. Tukaram Baburao Shinde vs (1) State of Maharashtra Through Revenue Secretary, Ministry of Finance; (2) State of Maharashtra Through The Department of Finance and The Commissioner of Sales Tax
[BOMBAY HIGH COURT, 28 Mar 2008]
The Judgment was delivered by : F. I. REBELLO1. All these petitions are being disposed of by this common judgment as the main challenge in all the petitions is to the constitutional validity of Section 61(1) and the explanation thereto, of the
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L.N. Hota and Company vs Commissioner of Income Tax and Another
[SUPREME COURT OF INDIA, 26 Mar 2008]
Income Tax Act, 1961, s. 148 - Held, though question of applicability of s. 143 (2) was specifically raised throughout, prima facie, no finding based on the law as it stands, has been recorded - Matter needs to be remitted to the High Court - Appeal disposed of.
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Commissioner of Income Tax, Delhi-IV, New Delhi vs Eicher Limited, (Previously Royal Enfield Motors Limited), Commercial Complex, New Delhi
[DELHI HIGH COURT, 20 Mar 2008]
Income Tax Act, 1961 - Second appeal filed u/s. 260A of the Act to challenge order dismissing appeal filed to challenge order setting aside assessment order and holding expenditure incurred was business expenditure - Assessee had negotiated a non-compete agreement with VCPL and himself whereby Assessee paid a sum of Rs.4 crores to VCPL so that VCPL and he would not carry out any business activity with regard to two wheelers, which amount was claimed by Assessee as business expenditure - Held, whether expenditure of this nature is capital expenditure or not would depend on facts of case, however, it is necessary to know whether advantage derived by payer is of enduring nature, and for this one of the considerations is length of time for which non-compete agreement would operate although that is not decisive; length of time should not be so brief as to virtually be transitory - Assessee did not acquire any capital asset by making payment of non-compete fee; it merely eliminated competition in two wheeler business; it is not clear how long the restrictive covenant was to last, but it was neither permanent nor ephemeral, in that sense, the advantage was not of an enduring nature; there is also nothing to show that the amount of Rs. 4 crores was drawn out of the capital of the Assessee - Appeal dismissed.
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Rohitasava Chand, New Delhi vs Commissioner of Income Tax, New Delhi
[DELHI HIGH COURT, 20 Mar 2008]
Income Tax Act, 1961 - Whether the Income Tax Appellate Tribunal was correct in law in holding that the non-compete fee received by the Assessee in terms of the agreement was a capital receipt in the hands of the Assessee? - Held, where an amount is received by way of compensation under a restrictive covenant or under a non-compete agreement, it would amount to a capital receipt in the hands of the recipient but a lot would depend on the agreement entered into between the parties - Appeal disposed of.
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Synco Industries Limited vs Assessing Officer, Income Tax, Mumbai and Another
[SUPREME COURT OF INDIA, 13 Mar 2008]
Income Tax Act, 1948 - Order that that gross total income must be determined by setting off against the income, the business losses of the earlier years, before allowing deduction under Chapter VI-A and if the resultant income is ''Nil'', then the assessee cannot claim deduction under Chapter VI-A - Appeals against - Held, gross total income of the assessee has got to be computed in accordance with the Act after adjusting losses etc. and if the gross total income so determined is positive then the question of allowing deductions under Chapter VI-A arises, but not otherwise - Appeals dismissed.
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Kerala Road Lines vs Commissioner of Income Tax, Cochin
[SUPREME COURT OF INDIA, 12 Mar 2008]
Income-tax Act, s. 37 - Questions referred to the High Court in at the instance of the assessee were answered in favour of the revenue and against the assessee relying upon its own earlier decision - Since, the special leave petitions against the relied on judgment were dismissed by this Court, not inclined to interfere with the order passed by the High Court - Appeals disposed of.
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J.K.Kashyap vs Assistant Commissioner of Income Tax
[DELHI HIGH COURT, 11 Mar 2008]
Income Tax Act, 1961 - Appeal filed u/s. 260A of the Act to challenging order holding that Assessee was liable to pay capital gain tax u/s. 45 of the Act r/w s. 2(47) of the Act - Assessee paid a sum of Rs.3.7 lacs as part payment to Sh.J.K.Guha out of total consideration of Rs. 25 lacs for acquiring 1/3rd share in property, however, due to litigation, sale could not be materialised and subsequently an agreement was entered with new vendee and since property had not yet been transferred in name of Assessee, so he became party to this agreement as a confirming party having acquired interest in property by virtue of earlier agreement - Assessee contended that u/s. 2(47) of the Act, a person cannot be held liable to pay capital gains tax for payment received in context of property transactions, without a finding as to what is precise right in property of Assessee that has been extinguished and which extinguishment is sought to be made basis of fastening capital gains tax liability on Assessee, since transfer of property had not taken place and that he was not owner of property and he was only confirming party to sale if at all sale finally took place - Held, transfer of capital asset is not confined to transfer of immovable property only but its scope is much wider for purpose of the Act - S. 45(1) of the Act would apply even if consideration is received from a party other than one in whose favour transfer is effected - Word transfer under S. 2(47) has a very wide meaning and its meaning cannot be narrowed down by referring to provisions of other statues - Even if Assessee has not become owner of property due to litigation, fact remains that he received consideration for acquiring interest in property and that interest was ultimately relinquished by him in favour of new vender by virtue of an agreement dated 16th September, 1995 and consideration received by him for relinquishing his right in property, thus, attracts provisions of Section 45(1) of the Act, making him liable to capital gains tax - Appeal dismissed.
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Karun Dube L-6, Kailash Colony New Delhi vs Assistant Commissioner of Income Tax
[DELHI HIGH COURT, 10 Mar 2008]
Income Tax Act, 1961 - s. 260A - Appeal filed u/s. 260A of the Act, to challenge order pertaining to block assessment period from 1st April, 1990 to 10th August, 2000 - Appellant submitted that document seized was having only names and figures but no dates, no units and there were nothing to indicate receipts or expenditures - Appellant/ Assessee had declared Rs.47, 00, 000/- as unaccounted income and had surrendered the same and later on tried to retract statement given by him - Held, statement given by Assessee cannot be allowed to be withdrawn - A document has to be accepted or rejected in toto; it cannot be said that part of document is true whereas other part is false - In view of concurrent findings of facts, given by statutory authorities, that Assessee surrendered Rs.47, 00, 000/- after due considerations, no infirmity in order passed by Tribunal - Order of Tribunal does not give rise to question of law to fall within limited purview of s. 260A of the Act, which is confined to entertaining only such appeals against order which involves substantial question of law - Appeal dismissed.
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L.P.Hospitality Private Limited New Delhi vs Assistant Commissioner of Income Tax, Circle-4(1), New Delhi
[DELHI HIGH COURT, 10 Mar 2008]
Appeal filed u/s. 260(A) of Income Tax Act, 1961 to challenge order dismissing appeal filed by Assessee - Petitioner submitted that assets were owned by Assessee and had been utilized for purpose of business; M/s Moet's Kababs acted as caterer for supplying and servicing all food without bringing any assets including furniture fixture and assets of Assessee and Moet's was taking away 85% of total receipts from bar as well as from restaurant of Assessee - Held, as Moet's was carrying away 85% of gross receipts of Assessee, that clearly shows that Assessee did not use its fixed assets exclusively for its own business purposes, thus, no fault can be found with order passed by Tribunal since it is finding of fact given by Assessing Officer, there is no infirmity in impugned order - Appeal dismissed.
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Commissioner of Income Tax Delhi-IV, New Delhi vs Espn Software India Private Limited, New Delhi
[DELHI HIGH COURT, 10 Mar 2008]
Income Tax Act, 1961 - Whether Income Tax Appellate Tribunal was right in allowing deduction of expenditure incurred by Assessee on or after 15th August, 1995 holding that business had commenced on this very date - Assessee claimed that date of incorporation was to be treated as date of commencement of business and hence all expenses were to be treated as Revenue expenses - Appellant contended that Assessee had obtained license on 15th August, 1995, however, it had appointed MEN as sole distributor only on 1st October, 1995, moreover, no business activity of revenue nature was carried out by Assessee during the year and merely getting incorporation certificate did not mean that business had commenced - Held, according to s. 3, it is 'setting up' of business and not 'commencement of the business' that is to be considered; business is commenced as soon as an essential activity of that business is started - Business is nothing more than continuous course of activities and for commencement of business all activities which go to make up the business need not be started simultaneously; as soon as activity which is essential activity in course of carrying on business is started, business must be said to have commenced - Since Assessee has acquired license on 15th August, 1995, and after getting license, Assessee was in position to start business, so, Assessee has commenced his business on or after 15th August, 1995 - Appeal dismissed.
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Assistant Commissioner of Income Tax, Company Cirlce -I (1), Chennai vs Apollo Hospitals Enterprises Limited, Represented By S.K.Venkataraman, Company Secretary-Cum Chief Financial Officer, Chennai
[MADRAS HIGH COURT, 10 Mar 2008]
The Judgment was delivered by : HON'BLE JUSTICE ELIPE DHARMA RAO1. This Writ Appeal is directed against the order passed by a learned single Judge of this Court in W.P.No.4991 of 2006 dated 8.6.2006.2. The respondent herein is running hospitals in
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Kuzhithurai Municipality, Represented By Its Commissioner, Vettuvanni, Kanyakumari vs Secretary of Kanyakumari Diocese (Csi), Nagercoil, Represented By Present Secretary, Kanyakumari
[MADRAS HIGH COURT, 06 Mar 2008]
Tamil Nadu District Municipality Act, 1920 - Revisions petition to challenge order passed by District Judge reducing property tax - Whether filing of appeal before Taxation Appeals Committee and further appeal to District Judge u/s. 89(3) of Amending Acts 65 of 1997 as amended by Act 34 of 1998 is valid as the said amending Act 65 of 1997 and 34 of 1998 were not notified? - Held, since amending Act 65 of 1997 and 34 of 1998 are not in force, consequence thereof will be provisions of Tamil Nadu District Municipality Act, 1920, de hors amending Act will be applicable, therefore in so far as property tax is concerned s. 81(2) and 91 will be applicable - Even though amending Act 65 of 1997 was not notified, Taxation Appeals Committee remains in statue by virtue by s. 23-A of Tamil Nadu District Municipality Act, 1920 - Fact that amending Act 65 of 1997 as amended by Act 34 of 1998 has not been notified, judgment and decree passed by the District Court in terms of s. 89 of Amending Act 65 of 1997 will be without any jurisdiction and therefore such invalid order cannot be sustained - Petitions allowed.
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Commissioner of Income Tax vs Xpro India Limited
[SUPREME COURT OF INDIA, 04 Mar 2008]
Income Tax Act, 1961, s. 260A - Whether on the facts and in the circumstances of the case Hon'ble High Court was right in allowing credit for MAT, u/s. 115 JAA before charging interest U/S 234B and 234C? - Held, question of interpretation of s. 234-B in the context of short payment of interest on advances tax arises for determination before the High Court which warrants interpretation of s. 115 JAA r/w s. 234-B and 234-C - Shortage in payment according to the respondent was on account of applicability of s. 115 JAA - High Court was required to decide the nature of the levy under Section 234B ' whether the levy is penal or mandatory - Appeal allowed.
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Commissioner of Income Tax (Central)-I, New Delhi vs Ansal Buildwell Limited New Delhi
[DELHI HIGH COURT, 04 Mar 2008]
Income Tax Act, 1947 - s. 158B(b) - Appeal to challenge order deleting the addition of amount of Rs 12, 50, 000/- which was added to income of assessee as undisclosed income - Appellant submitted that Tribunal was in error in interpreting broad definition of 'undisclosed income' as appearing in s. 158B(b) of the Act - Held, undisclosed income should be that which is discovered as a result, inter-alia, of document or transaction which has not been or would not have been disclosed for purpose of the Act; this pre- condition does not arise in present case admittedly document recovered during search represented disclosed transaction of sale of property that had taken place for which M/s. Televista Electronics Limited had been paid a commission - In so far as the falsity of expense or deduction or allowance is concerned, that must be necessarily be relatable to document or transaction - In present case very first requirement namely of non-disclosure of material does not arise because in fact Assessee had disclosed transaction in its account books; since first condition itself is not satisfied, the falsity of the claim being relatable to that evidence does not arise - Appeal dismissed.
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