The following important judgements are available for download at itatonline.org.
Soma Textile & Industries Limited vs. ACIT (ITAT Ahmedabad)
Transfer Pricing: Even if the loan to the 100% subsidiary is intended to be a long term investment in the subsidiary and it has a crucial role to play in the assessee's business plans, it cannot be treated as "quasi capital". The ALP of the loan has to be determined on the basis of LIBOR interest
The expression 'quasi capital' is relevant from the point of view of highlighting that a quasi-capital loan or advance is not a routine loan transaction simplictor. The substantive reward for such a loan transaction is not interest but opportunity to own capital. As a corollary to this position, in the cases of quasi capital loans or advances, the comparison of the quasi capital loans is not with the commercial borrowings but with the loans or advances which are given in the same or similar situations
Dheeraj Amin vs. ACIT (ITAT Bangalore)
Development Agreement: Tax implications of entering into a development agreement in respect of land held as stock-in-trade explained
What the assessee has got today is only a right to sell the 1,28,940.26 fts of constructed area in the Alexandria project and the profits, howsoever certain they may appear to be, will only fructify and be realized, and can even be quantified, only when this right is exercised- in part or in full. That stage has not yet come, and until that stage comes, such profit cannot be taxed
Panna S. Khatau vs. ITO (ITAT Mumbai)
S. 56(2)/ 68: Old liabilities, even if treated as genuine in earlier years and even if on capital account, are liable to be assessed as "income" in year of write-back if assessee is unable to provide confirmations and substantiate genuineness of liabilities
When an amount, which is stated, claimed and accepted as a payable, is no longer so, the assessee gains to that extent. There is nothing unreal or notional about this gain. What is admitted though is that there has been remission/cessation of liability in-as-much as these are no longer payable. Why? No reason is advanced. It is under these circumstances that the law permits the A.O. to draw an adverse inference of it as representing the assessee's income. As regards the year, there can again be little doubt in the matter
Shri Umeya Corporation vs. ITO (ITAT Ahmedabad)
S. 80-IB(10): To be the "developer" of a housing project, the assessee has to undertake the entrepreneurship risk in execution of the project. He need not be the owner of the land. S. 40(a)(ia): The amendment is clarificatory and retrospective w.e.f. 01.04.2005
In order to answer the question as to whether the condition precedent for deduction under section 80IB has been satisfied inasmuch as whether or not the assessee is engaged in "developing and building housing projects", all that is material is whether assessee is taking the entrepreneurship risk in execution of such project. When profits or losses, as a result of execution of project as such, belong predominantly to the assessee, the assessee is obviously taking the entrepreneurship risk qua the project and is, accordingly, eligible for deduction under section 80IB(10) in respect of the same. The assumption of such an entrepreneurship risk is not dependent on ownership of the land
Maya Gupta vs. CIT (ITAT Delhi)
S. 263: In a case where there is inadequate inquiry but not lack of inquiry, the CIT must conduct inquiry and verification and record the finding how the assessment order is erroneous. He cannot simply remand the matter to the AO for verification
In cases where there is inadequate inquiry but not lack of inquiry, the CIT must give and record a finding that the order/inquiry made is erroneous. This can happen if inquiry and verification is conducted by the CIT and he is able to establish and show the error and mistake made by the AO, making the order unsustainable in law
Regards,
Editor,
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