Dear Subscriber,
The following important judgements are available for download at itatonline.org.
Sasi Enterprises vs. ACIT (Supreme Court)
Prosecution for offence u/s 276CC for failure to file ROI can be initiated during the pendency of assessment proceedings. The statement in the individual returns of the partners that the firm has not filed a ROI as its’ accounts are not finalized does not absolve the firm of prosecution for non-filing of ROI
The assessee, a registered partnership firm, of which Ms. J. Jayalalitha and Mrs. N. Sasikala are partners, did not furnish returns of income despite several opportunities. The AO made a best judgement assessment u/s 144 and filed a complaint with the Megistrate against the assessee for committing offences punishable u/s 276CC. The assessee challenged the filing of the complaint on the ground that as the assessment had not attained finality no offence had taken place and so the complaint was pre-mature. It was also pointed out that in the individual returns of the partners it was stated that as the accounts of the assessee-firm had not been finalized, its return of income could not be filed. The Magistrate and High Court dismissed the challenge to the complaint. On appeal by the assessee to the Supreme Court, HELD dismissing the appeal:
Shree Cement Ltd vs. ACIT (ITAT Jaipur)
Carbon Credit receipts are not chargeable to tax as “income”. For s. 80-IA(8) if there are multiple “market values” assessee has the right to choose
(i) Carbon credit is in the nature of ‘an entitlement’ received to improve world atmosphere and environment reducing carbon, heat and gas emissions. The entitlement earned for carbon credits is a capital receipt and cannot be taxed as a revenue receipt. It is not generated or created due to carrying on business but it is accrued due to ‘world concern’. It has been made available assuming character of transferable right or entitlement only due to world concern. The source of carbon credit is world concern and environment. Due to that the assessee gets a privilege in the nature of transfer of carbon credits. Thus, the amount received for carbon credits has no element of profit or gain and it cannot be subjected to tax in any manner under any head of income. My Home Power Ltd 151 TTJ 616 (Hyd), Velayudhaswamy Spinning Mills 40 taxmann.com 141 (Chennai) & Ambika Cotton Mills Ltd (Chennai) followed. Also, in Vodafone International Holdings 341 ITR 1 the Supreme Court has held that treatment of any particular item in different manner in the 1961 Act and Direct Tax Code (“DTC”) serves as an important guide in determining the taxability of said item. Since DTC specifically provides for taxability of carbon credit as business receipt and Income Tax Act does not do so, it means that carbon credits are not taxable under the Act
ITO vs. Narain Prasad Dalmia (ITAT Kolkata)
For s. 14A/ Rule 8D(2)(ii), interest expenditure on loans taken for taxable business purposes has to be excluded
Rule 8D(2)(ii) is very clear that the expenditure on account of payment of interest would be covered in the said Rule only if it is not directly attributable to any particular income or receipt. If the assessee is able to demonstrate that the payment of interest is directly attributable to the assessee’s business, it cannot be considered under Rule 8D(2)(íi) of the I.T. Rules and has to be excluded while computing the disallowance u/s 14A
Regards,
Editor,
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Latest:CIT vs. Sadia Shaikh (Bombay High Court At Goa)
S. 2(47)(v): Mere execution of a development agreement is not a “transfer” if possession as per s. 53A of the Transfer of Property Act is not given
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