Hello,
I am starting posting the materials for sharing.
Today, I will start with my core interests, interesting case judicial pronouncements by various courts on Income Tax Law, 1961.
April 2008
High Court: Gujarat Section: 143 Topic: Scope on Remand
Citation: Synthetics (P) Ltd. Vs. CIT (2008) 215 CTR (Guj) 343
Particulars: Any Set aside of assessment does not involve a proposal of enhancement does not expand the scope of the powers available to the AO while making the fresh assessment to include a new source of income; Appellate authority having set aside the assessment with directions in relation to and in the context of the grounds raised in the appeal, AO could not have processed a new source of income in the course of fresh assessment, which did not form subject matter of assessment in the first round.
May 2008
High Court: Allahabad Section: 37(1) Topic: Business Expenditure
Citation: CIT Vs. Pt. Vishwanath Sharma (2008) 216 CTR (All) 281
Particulars: Sec. 37(1) allows expenditure wholly and exclusively incurred for the purpose of the business or the profession in computing the income chargeable under the head “Profits or gains of business or profession”. The explanation thereof disallowed an expenditure, which is incurred by an assessee for a purpose which is an offence or which is prohibited by law. The explanation thus makes it clear that such expenditure shall not be treated to be a business or professional expenditure. Accordingly, amount paid by way of commission to Government doctors for prescribing medicines manufactured by assessee being an illegal gratification, which is an offence punishable under the Prevention of Corruption Act, 1988, is hit by the said Explanation to Section 37(1), hence not an allowable business expenditure.
High Court: Delhi Section: 143(2) & 282 Topic: Service of Notice
Citation: CIT Vs. Silver Streak Trading (P) Ltd. (2008) 216 CTR (Del) 260
Particulars: Revenue having adduced no material to show that the impugned notice under section 143(2), dated 28th Nov., 1998, was in fact served upon the assessee within the prescribed time, the affidavit filed by the assessee before the Assessing officer that it has not received any notice prior to the notice dt. 21st Oct., 1999, has to be accepted.
High Court: Punjab & Haryana Section: 271(1)(c) Topic: Concealment Penalty
Citation: CIT Vs. Sangrur Vanaspati Mills Ltd. (2008) 216 CTR (P&H) 92
Particulars: AO having made addition towards estimated unaccounted sales and same having been upheld by CIT (A) and Tribunal simply by applying the yield of the preceding year to the year under consideration, Tribunal was justified in deleting the penalty under section 271(1)(c) holding that there was no conclusive evidence that the assessee has, in fact, concealed income; no substantial question of law arises.
Court:Supreme Court of India Section: 69 Topic: Income - Cash Credit
Citation: CIT Vs. Lovely Exports (P) Ltd. (2008) 216 CTR (SC) 195
Particulars: If the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the Assessing Officer, then the Department is free to proceed to reopen their individual assessments in accordance with law, but it cannot be regarded as undisclosed income of the assessee company.
Court:Supreme Court of India Section: 142(2A) Topic: Special Audit
Citation: Sahara India (Firm) Vs. CIT. (2008) 216 CTR (SC) 303
Particulars: An Order under section 142(2A) entails civil consequences, even after the obligation to pay auditor’s fees and incidental expenses has been taken over by the Central Government, and therefore the rule of audi alteram pattern is required to be observed and assessee has to be provided a reasonable opportunity of being heard before passing an order u/s 142(2A).
June 2008
High Court:Karnataka Section: 37(1) Topic: Business Expenditure
Citation: CIT Vs. Sagar Talkies (2008) 217 CTR (Kar) 74
May 2008
High Court: Allahabad Section: 37(1) Topic: Business Expenditure
Citation: CIT Vs. Pt. Vishwanath Sharma (2008) 216 CTR (All) 281
Particulars: Sec. 37(1) allows expenditure wholly and exclusively incurred for the purpose of the business or the profession in computing the income chargeable under the head “Profits or gains of business or profession”. The explanation thereof disallowed an expenditure, which is incurred by an assessee for a purpose which is an offence or which is prohibited by law. The explanation thus makes it clear that such expenditure shall not be treated to be a business or professional expenditure. Accordingly, amount paid by way of commission to Government doctors for prescribing medicines manufactured by assessee being an illegal gratification, which is an offence punishable under the Prevention of Corruption Act, 1988, is hit by the said Explanation to Section 37(1), hence not an allowable business expenditure.
High Court: Delhi Section: 143(2) & 282 Topic: Service of Notice
Citation: CIT Vs. Silver Streak Trading (P) Ltd. (2008) 216 CTR (Del) 260
Particulars: Revenue having adduced no material to show that the impugned notice under section 143(2), dated 28th Nov., 1998, was in fact served upon the assessee within the prescribed time, the affidavit filed by the assessee before the Assessing officer that it has not received any notice prior to the notice dt. 21st Oct., 1999, has to be accepted.
High Court: Punjab & Haryana Section: 271(1)(c) Topic: Concealment Penalty
Citation: CIT Vs. Sangrur Vanaspati Mills Ltd. (2008) 216 CTR (P&H) 92
Particulars: AO having made addition towards estimated unaccounted sales and same having been upheld by CIT (A) and Tribunal simply by applying the yield of the preceding year to the year under consideration, Tribunal was justified in deleting the penalty under section 271(1)(c) holding that there was no conclusive evidence that the assessee has, in fact, concealed income; no substantial question of law arises.
Court:Supreme Court of India Section: 69 Topic: Income - Cash Credit
Citation: CIT Vs. Lovely Exports (P) Ltd. (2008) 216 CTR (SC) 195
Particulars: If the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the Assessing Officer, then the Department is free to proceed to reopen their individual assessments in accordance with law, but it cannot be regarded as undisclosed income of the assessee company.
Court:Supreme Court of India Section: 142(2A) Topic: Special Audit
Citation: Sahara India (Firm) Vs. CIT. (2008) 216 CTR (SC) 303
Particulars: An Order under section 142(2A) entails civil consequences, even after the obligation to pay auditor’s fees and incidental expenses has been taken over by the Central Government, and therefore the rule of audi alteram pattern is required to be observed and assessee has to be provided a reasonable opportunity of being heard before passing an order u/s 142(2A).
June 2008
High Court:Karnataka Section: 37(1) Topic: Business Expenditure
Citation: CIT Vs. Sagar Talkies (2008) 217 CTR (Kar) 74
Particulars: Expenditure incurred by assessee in replacing old worn out mono-sound system with a new stereo system in its cinema theatre which neither resulted in increase in its seating capacity nor increase in tariff rate, was allowable as revenue expenditure.
Authority:AAR Section: DTAA Topic: Permanent Establishment
Citation: KnoWerX Education (India) P. Ltd., in RE Authority for Advance Rulings (2008) 217 CTR (AAR) 50
Court:Supreme Court of India Section: 10(23C) Topic: Exemption to Educational Institution
Citation: Americal Hotel & Lodging Association Educational Institute Vs. CBDT (2008) 216 CTR (SC) 377
Authority:AAR Section: DTAA Topic: Permanent Establishment
Citation: KnoWerX Education (India) P. Ltd., in RE Authority for Advance Rulings (2008) 217 CTR (AAR) 50
Particulars: Applicant engaged in the promotion of professional examination/ certification programmes of US entities APICS and AST&L, with no authority to conclude any contract on behalf of APICS and AST&L or to bind them in any way in the conduct of their examinations in India, and also carrying on variety of other activities besides promoting examinations cannot be deeded to be a PE of APICS or AST&L in India either in terms of para 4 or para 5 of art. 5 of Indo-US DTAA and, therefore, examination fees collected by the applicant for APICS and AST&L and remitted to them is not taxable in India in view of para 1 of Art. 7 and the applicant is not required to deduct tax at source from such payments.
Court:Supreme Court of India Section: 10(23C) Topic: Exemption to Educational Institution
Citation: Americal Hotel & Lodging Association Educational Institute Vs. CBDT (2008) 216 CTR (SC) 377
Particulars: While granting approval under s. 10(23C)(vi), the prescribed authority has only to see that the applicant fulfils the threshold precondition of actual existence of an educational institution and can impose stipulations that certain percentage of accounting income would be utilized for impartation of education in India, although, there is no requirement in the third proviso to s. 10(23C)(vi) that the application of income must be made in India; order passed by CBDT rejecting the appellant’s application for approval on the ground that it has not applied its income for the purpose of education in India is set aside and the matter is remitted to CBDT for fresh consideration in accordance with law.
Thats all for the day, will keep on posting tomorrow.
Thats all for the day, will keep on posting tomorrow.
