INCOME TAX REPORTS (ITR)--PRINT AND ONLINE EDITION
Appeal to Appellate Tribunal --Rectification of mistakes--Failure to deduct tax at source--Amendment allowing benefit where payee has paid tax on receipts effective from 1-4-2013--Tribunal relying on decision of jurisdictional High Court rejecting application for rectification--Assessee to pursue remedy by filing appeal before High Court--Writ petition not maintainable--Income-tax Act, 1961, ss. 254(2), 260A-- Thomas John Muthoot v. Asst. CIT (Ker) . . . 525
Assessment --Additional tax--Rectification of mistakes--Appeal--Deletion of disallowance on appeal--Assessing Officer can delete additional tax in rectification proceedings--Income-tax Act, 1961, ss. 143, 154, 250, 254-- CIT v. Redico Khaitan Ltd. (All) . . . 424
Business --Income from house property--Business income or income from house property--Rent from letting out buildings with amenities in software technology park--Assessable as business income--Income-tax Act, 1961, ss. 22, 28-- CIT v. Information Technology Park Ltd. (Karn) . . . 460
Capital gains --Long-term capital gains--Full value of consideration--Distress sale--Assessee objecting to value adopted by stamp valuation authority--Assessing Officer instead of referring valuation to Valuation Officer estimating capital gains tax confirmed by Tribunal--Specific claim that Assessing Officer should have referred matter to Valuation Officer for valuation of capital asset in terms of section 50C(2)--Mere assertion by assessee suffice for attraction of section 50C(2)--Assessing Officer directed to work out capital gains by adopting market value under section 50C(2)--Income-tax Act, 1961, s. 50C(1), (2)-- Appadurai Vijayaraghavan v. Joint CIT (OSD) (Mad) . . . 486
----Long-term capital gains--Full value of consideration--Distress sale--Specific objection for adopting market value--Authorities instead of referring valuation to District Valuation Officer adopting guideline value relating to property sold--Assessing Officer directed for working out capital gains--Income-tax Act, 1961, s. 50C-- S. Muthuraja v. CIT (Mad) . . . 483
----Sale of agricultural lands--Classification of lands in revenue records as agricultural lands--Adangal and letter of tahsildar satisfying other conditions of section 2(14)--Adjacent lands divided into plots for sale not a reason that lands sold by assessee were for purposes of development of plots--Record showing lands are agricultural lands classified as dry lands for which kist has been paid--Entitled to exemption--Income-tax Act, 1961, s. 2(14)-- Mrs. Sakunthala Vedachalam v. Asst. CIT (Mad) . . . 558
Charitable purposes --Charitable trust--Cricket Association--Registration--First application not traceable--Defective second application not cured despite opportunities--Condonation of delay--Not a matter of right--Failure to provide satisfactory explanation--Tribunal justified in declining plea--Another application with retrospective effect--Commissioner could not grant registration with retrospective effect since rejection of defective application for registration with retrospective effect attaining finality--Income-tax Act, 1961, s. 12A-- Kerala Cricket Association v. Addl. CIT (Ker) . . . 528
----Charitable trust--Education society--Registration--Assessee collecting capitation fee for admission in addition to regular fees--Assessee not carrying on any charitable activities entitling it for registration--Income-tax Act, 1961, s. 12AA-- Travancore Education Society v. CIT (Ker) . . . 534
----Charitable trust--Registration--Employees’ pension fund trust--Pensionary benefit to employees of GCDA from corpus created out of contributions made by employees of GCDA--Activity not general public utility--Not entitled to registration--Income-tax Act, 1961, ss. 2(15), 12AA-- GCDA Employees’ Pension Fund Trust v. CIT (Ker) . . . 532
Deduction of tax at source --Transmission transaction charges to Gas Authority of India for supplying gas--GAIL not only showing transaction as sale in its relevant records but paying due tax thereon--Contract for supply of gas was for sale of goods and not works contract or contract for rendering technical services--Transaction outside purview of sections 194C and 194J--No liability for tax deduction at source--Income-tax Act, 1961, ss. 194C, 194J-- CIT (TDS) v. Samtel Glass Ltd. (Raj) . . . 392
Depreciation --Enhanced depreciation--Notification confining benefit of enhanced depreciation for year 2009-10 to only such commercial vehicles as have been purchased and put to use during period 1-4-2009 to 30-9-2009--Assessee, an advocate, purchasing a car outside the period for accelerated depreciation--Accelerated depreciation conferred taking into account the policy decision of Union Government to stimulate country’s economy--Not discriminatory--Not violative of fundamental rights--Constitution of India, art. 14--Income-tax Act, 1961, s. 32-- R. Surendran v. Union of India (Ker) . . . 536
----Exercising of option--Returns filed under section 139(1) and exercised option in form prescribed therein--No separate letter or request or intimation with regard to exercise of option required--Option once exercised will continue to subsequent years--Income-tax Rules, 1962, r. 5(1A)--Income-tax Act, 1961, ss. 32, 139(1)-- CIT v. Kikani Exports P. Ltd. (No. 2 ) (Mad) . . . 500
----Higher rate of depreciation--Plant--Neither includes “building†nor includes “roadâ€--â€Road†is a “building†and not a “plantâ€--Toll road is a capital asset and not an implement or a tool used by assessee for his business--Would not qualify as a “plantâ€--Not entitled to a higher rate of depreciation--Income-tax Rules, 1962, Appex. I--Income-tax Act, 1961, s. 32(1)-- Moradabad Toll Road Co. Ltd. v. Asst. CIT (Delhi) . . . 403
----Investment allowance--Carry forward and set off--Unabsorbed depreciation against capital gains--Allowable but restricted to two-thirds of such allowance--Matter remanded to Assessing Officer to recompute unabsorbed depreciation--Income-tax Act, 1961, s. 34A-- CIT v. Madras Forging and Allied Industries (CBE) Ltd. (In liquidation) (Mad) . . . 552
Double taxation avoidance --Non-resident--Income deemed to accrue or arise in India--Royalty--Danish company supplying equipment and information regarding installation of such equipment--Consideration received not royalty--Not assessable in India--Income-tax Act, 1961, s. 9(1)(vi)--Double Taxation Avoidance Agreement between India and Denmark-- Director of Income-tax (International Taxation) v. Haldor Topsoe (Bom) . . . 453
Exemption --Development of computer software--Conditions precedent--Customs bonding not a condition precedent--Assessee fulfilling conditions laid down in section 10A--Entitled to exemption--Income-tax Act, 1961, s. 10A-- CIT v. Caritor (India) P. Ltd. (Karn) . . . 463
Export --Special deduction under section 80HHC--Computation of turnover for purposes of section 80HHC--Service charges must be included--Income-tax Act, 1961, s. 80HHC-- CIT v. Nahar Spinning Mills Ltd. (P&H) . . . 467
Housing projects --Special deduction under section 80-IB(10)--Conditions precedent--Not necessary that developer should own the land--Income-tax Act, 1961, s. 80-IB -- CIT v. Shital Corporation (Guj) . . . 476
Income from undisclosed sources --Amounts claimed to be gifts from foreign residents--No relationship between assessee and donors--No occasion for gift--Addition of amounts as undisclosed income of assessee--Justified--Income-tax Act, 1961-- CIT v. Sandeep Goyal (P&H) . . . 471
Interest-tax --Interest on debentures--Notional interest--Not chargeable interest--Interest-tax Act, 1974, s. 2(7)-- CIT v. Golden Investments Ltd. (Mad) . . . 544
International transactions --Transfer pricing--Arm’s length price--Assessee issuing equity shares to its non-resident associated enterprises--Income of assessee would not include income on account of adjustment for short receipt of price for issued additional share capital--Transfer pricing provisions not applicable--Income-tax Act, 1961, s. 92CA(3)-- Shell India Markets P. Ltd. v. Asst. CIT (LTU) (Bom) . . . 516
----Transfer pricing--Arm’s length price--Issue of shares at premium by assessee to its non-resident holding company--Does not give rise to income in an international transaction--Capital receipts arising out of capital account transaction--Transfer pricing provisions not applicable--Income-tax Act, 1961, s. 92CA(3)-- Vodafone India Services P. Ltd. v. Union of India (Bom) . . . 511
Interpretation of taxing statutes --Literal interpretation-- CIT v. Shital Corporation (Guj) . . . 476
Reassessment --Limitation--Exclusion from limitation--Finding or direction by appellate or revisional authority, etc.--Appellate order that an amount was not assessable in a particular assessment year but was assessable in an earlier year--Order constitutes finding or direction--Consequent order not barred by limitation--Income-tax Act, 1961, ss. 150, 153-- CIT v. PP Engineering Work (Delhi) . . . 433
----Notice after four years--Condition precedent--Satisfaction of Commissioner or Chief Commissioner--No sanction or permission of Commissioner obtained--Reassessment not valid--Income-tax Act, 1961, ss. 148, 151(1)-- Reliable Finhold Ltd. v. Union of India (All) . . . 419
----Validity--Reassessment based on retrospective amendment of provision--Reassessment accepted by assessee--Subsequently retrospective amendment held invalid in an appeal filed by another assessee--Consequent appeal against reassessment after five years--Reassessment not rendered invalid--Income-tax Act, 1961, ss. 80HHC, 147, 148-- CIT v. Kultar Exports (Delhi) . . . 440
Rectification of mistakes --Mistake apparent from record--Export--Special deduction--Intimation to assessee--Claim debatable or doubtful--Disallowance part of claim not on basis of settled principles--No notice issued under sub-section (2) of section 143--Rectification pursuant to direction by Commissioner (Appeals)--Appellate authorities right in deleting disallowance--Income-tax Act, 1961, ss. 80HHC, 139, 154-- CIT v. Mekins Agro-Products Ltd. (T & AP) . . . 495
Search and seizure --Block assessment--Undisclosed income--Assessment of third person--Condition precedent--Recording of satisfaction that undisclosed income belonged to third person--Limitation--Satisfaction must be recorded within two year time period stipulated in section 158BE(1)--Income-tax Act, 1961, ss. 158BD, 158BE-- Raghav Bahl v. CIT (Delhi) . . . 447
Sikkim --Charge of tax--Application of Act--Extension of Income-tax Act, 1961, to State of Sikkim with effect from 1-4-1990--Effect--Repeal of Sikkim State Tax Manual by necessary implication--Assessments made under Sikkim Tax Manual for assessment years 1997-98 to 2005-06 not valid--State directed to refund amount--Constitution of India, art. 371F(n)--Sikkim State Income-tax Manual, 1948, cl. 4(i)--Income-tax Act, 1961-- Sikkim Manipal University v. State of Sikkim (Sikkim) . . . 567
Unexplained investment --No evidence regarding investment--Addition of amounts--Not justified--Income-tax Act, 1961-- CIT v. Gian Gupta (Delhi) . . . 428
Art. 14 --Depreciation--Enhanced depreciation--Notification confining benefit of enhanced depreciation for year 2009-10 to only such commercial vehicles as have been purchased and put to use during period 1-4-2009 to 30-9-2009--Assessee, an advocate, purchasing a car outside the period for accelerated depreciation--Accelerated depreciation conferred taking into account the policy decision of Union Government to stimulate country’s economy--Not discriminatory--Not violative of fundamental rights-- R. Surendran v. Union of India (Ker) . . . 536
Art. 371F(n) --Sikkim--Charge of tax--Application of Act--Extension of Income-tax Act, 1961, to State of Sikkim with effect from 1-4-1990--Effect--Repeal of Sikkim State Tax Manual by necessary implication--Assessments made under Sikkim Tax Manual for assessment years 1997-98 to 2005-06 not valid--State directed to refund amount-- Sikkim Manipal University v. State of Sikkim (Sikkim) . . . 567
S. 2(14) --Capital gains--Sale of agricultural lands--Classification of lands in revenue records as agricultural lands--Adangal and letter of tahsildar satisfying other conditions of section 2(14)--Adjacent lands divided into plots for sale not a reason that lands sold by assessee were for purposes of development of plots--Record showing lands are agricultural lands classified as dry lands for which kist has been paid--Entitled to exemption-- Mrs. Sakunthala Vedachalam v. Asst. CIT (Mad) . . . 558
S. 2(15) --Charitable purposes--Charitable trust--Registration--Employees’ pension fund trust--Pensionary benefit to employees of GCDA from corpus created out of contributions made by employees of GCDA--Activity not general public utility--Not entitled to registration-- GCDA Employees’ Pension Fund Trust v. CIT (Ker) . . . 532
S. 9(1)(vi) --Double taxation avoidance--Non-resident--Income deemed to accrue or arise in India--Royalty--Danish company supplying equipment and information regarding installation of such equipment--Consideration received not royalty--Not assessable in India-- Director of Income-tax (International Taxation) v. Haldor Topsoe (Bom) . . . 453
S. 10A --Exemption--Development of computer software--Conditions precedent--Customs bonding not a condition precedent--Assessee fulfilling conditions laid down in section 10A--Entitled to exemption-- CIT v. Caritor (India) P. Ltd. (Karn) . . . 463
S. 12A --Charitable purposes--Charitable trust--Cricket Association--Registration--First application not traceable--Defective second application not cured despite opportunities--Condonation of delay--Not a matter of right--Failure to provide satisfactory explanation--Tribunal justified in declining plea--Another application with retrospective effect--Commissioner could not grant registration with retrospective effect since rejection of defective application for registration with retrospective effect attaining finality-- Kerala Cricket Association v. Addl. CIT (Ker) . . . 528
S. 12AA --Charitable purposes--Charitable trust--Education society--Registration--Assessee collecting capitation fee for admission in addition to regular fees--Assessee not carrying on any charitable activities entitling it for registration-- Travancore Education Society v. CIT (Ker) . . . 534
----Charitable purposes--Charitable trust--Registration--Employees’ pension fund trust--Pensionary benefit to employees of GCDA from corpus created out of contributions made by employees of GCDA--Activity not general public utility--Not entitled to registration-- GCDA Employees’ Pension Fund Trust v. CIT (Ker) . . . 532
S. 22 --Business--Income from house property--Business income or income from house property--Rent from letting out buildings with amenities in software technology park--Assessable as business income-- CIT v. Information Technology Park Ltd. (Karn) . . . 460
S. 28 --Business--Income from house property--Business income or income from house property--Rent from letting out buildings with amenities in software technology park--Assessable as business income-- CIT v. Information Technology Park Ltd. (Karn) . . . 460
S. 32 --Depreciation--Enhanced depreciation--Notification confining benefit of enhanced depreciation for year 2009-10 to only such commercial vehicles as have been purchased and put to use during period 1-4-2009 to 30-9-2009--Assessee, an advocate, purchasing a car outside the period for accelerated depreciation--Accelerated depreciation conferred taking into account the policy decision of Union Government to stimulate country’s economy--Not discriminatory--Not violative of fundamental rights-- R. Surendran v. Union of India (Ker) . . . 536
----Depreciation--Exercising of option--Returns filed under section 139(1) and exercised option in form prescribed therein--No separate letter or request or intimation with regard to exercise of option required--Option once exercised will continue to subsequent years-- CIT v. Kikani Exports P. Ltd. (No. 2 ) (Mad) . . . 500
S. 32(1) --Depreciation--Higher rate of depreciation--Plant--Neither includes “building†nor includes “roadâ€--â€Road†is a “building†and not a “plantâ€--Toll road is a capital asset and not an implement or a tool used by assessee for his business--Would not qualify as a “plantâ€--Not entitled to a higher rate of depreciation-- Moradabad Toll Road Co. Ltd. v. Asst. CIT (Delhi) . . . 403
S. 34A --Depreciation--Investment allowance--Carry forward and set off--Unabsorbed depreciation against capital gains--Allowable but restricted to two-thirds of such allowance--Matter remanded to Assessing Officer to recompute unabsorbed depreciation-- CIT v. Madras Forging and Allied Industries (CBE) Ltd. (In liquidation) (Mad) . . . 552
S. 50C --Capital gains--Long-term capital gains--Full value of consideration--Distress sale--Specific objection for adopting market value--Authorities instead of referring valuation to District Valuation Officer adopting guideline value relating to property sold--Assessing Officer directed for working out capital gains-- S. Muthuraja v. CIT (Mad) . . . 483
S. 50C(1), (2) --Capital gains--Long-term capital gains--Full value of consideration--Distress sale--Assessee objecting to value adopted by stamp valuation authority--Assessing Officer instead of referring valuation to Valuation Officer estimating capital gains tax confirmed by Tribunal--Specific claim that Assessing Officer should have referred matter to Valuation Officer for valuation of capital asset in terms of section 50C(2)--Mere assertion by assessee suffice for attraction of section 50C(2)--Assessing Officer directed to work out capital gains by adopting market value under section 50C(2)-- Appadurai Vijayaraghavan v. Joint CIT (OSD) (Mad) . . . 486
S. 80HHC --Export--Special deduction under section 80HHC--Computation of turnover for purposes of section 80HHC--Service charges must be included-- CIT v. Nahar Spinning Mills Ltd. (P&H) . . . 467
----Reassessment--Validity--Reassessment based on retrospective amendment of provision--Reassessment accepted by assessee--Subsequently retrospective amendment held invalid in an appeal filed by another assessee--Consequent appeal against reassessment after five years--Reassessment not rendered invalid-- CIT v. Kultar Exports (Delhi) . . . 440
----Rectification of mistakes--Mistake apparent from record--Export--Special deduction--Intimation to assessee--Claim debatable or doubtful--Disallowance part of claim not on basis of settled principles--No notice issued under sub-section (2) of section 143--Rectification pursuant to direction by Commissioner (Appeals)--Appellate authorities right in deleting disallowance-- CIT v. Mekins Agro-Products Ltd. (T & AP) . . . 495
S. 80-IB --Housing projects--Special deduction under section 80-IB(10)--Conditions precedent--Not necessary that developer should own the land-- CIT v. Shital Corporation (Guj) . . . 476
S. 92CA(3) --International transactions--Transfer pricing--Arm’s length price--Assessee issuing equity shares to its non-resident associated enterprises--Income of assessee would not include income on account of adjustment for short receipt of price for issued additional share capital--Transfer pricing provisions not applicable-- Shell India Markets P. Ltd. v. Asst. CIT (LTU) (Bom) . . . 516
----International transactions--Transfer pricing--Arm’s length price--Issue of shares at premium by assessee to its non-resident holding company--Does not give rise to income in an international transaction--Capital receipts arising out of capital account transaction--Transfer pricing provisions not applicable-- Vodafone India Services P. Ltd. v. Union of India (Bom) . . . 511
S. 139 --Rectification of mistakes--Mistake apparent from record--Export--Special deduction--Intimation to assessee--Claim debatable or doubtful--Disallowance part of claim not on basis of settled principles--No notice issued under sub-section (2) of section 143--Rectification pursuant to direction by Commissioner (Appeals)--Appellate authorities right in deleting disallowance-- CIT v. Mekins Agro-Products Ltd. (T & AP) . . . 495
S. 139(1) --Depreciation--Exercising of option--Returns filed under section 139(1) and exercised option in form prescribed therein--No separate letter or request or intimation with regard to exercise of option required--Option once exercised will continue to subsequent years-- CIT v. Kikani Exports P. Ltd. (No. 2 ) (Mad) . . . 500
S. 143 --Assessment--Additional tax--Rectification of mistakes--Appeal--Deletion of disallowance on appeal--Assessing Officer can delete additional tax in rectification proceedings-- CIT v. Redico Khaitan Ltd. (All) . . . 424
S. 147 --Reassessment--Validity--Reassessment based on retrospective amendment of provision--Reassessment accepted by assessee--Subsequently retrospective amendment held invalid in an appeal filed by another assessee--Consequent appeal against reassessment after five years--Reassessment not rendered invalid-- CIT v. Kultar Exports (Delhi) . . . 440
S. 148 --Reassessment--Notice after four years--Condition precedent--Satisfaction of Commissioner or Chief Commissioner--No sanction or permission of Commissioner obtained--Reassessment not valid-- Reliable Finhold Ltd. v. Union of India (All) . . . 419
----Reassessment--Validity--Reassessment based on retrospective amendment of provision--Reassessment accepted by assessee--Subsequently retrospective amendment held invalid in an appeal filed by another assessee--Consequent appeal against reassessment after five years--Reassessment not rendered invalid-- CIT v. Kultar Exports (Delhi) . . . 440
S. 150 --Reassessment--Limitation--Exclusion from limitation--Finding or direction by appellate or revisional authority, etc.--Appellate order that an amount was not assessable in a particular assessment year but was assessable in an earlier year--Order constitutes finding or direction--Consequent order not barred by limitation-- CIT v. PP Engineering Work (Delhi) . . . 433
S. 151(1) --Reassessment--Notice after four years--Condition precedent--Satisfaction of Commissioner or Chief Commissioner--No sanction or permission of Commissioner obtained--Reassessment not valid-- Reliable Finhold Ltd. v. Union of India (All) . . . 419
S. 153 --Reassessment--Limitation--Exclusion from limitation--Finding or direction by appellate or revisional authority, etc.--Appellate order that an amount was not assessable in a particular assessment year but was assessable in an earlier year--Order constitutes finding or direction--Consequent order not barred by limitation-- CIT v. PP Engineering Work (Delhi) . . . 433
S. 154 --Assessment--Additional tax--Rectification of mistakes--Appeal--Deletion of disallowance on appeal--Assessing Officer can delete additional tax in rectification proceedings-- CIT v. Redico Khaitan Ltd. (All) . . . 424
----Rectification of mistakes--Mistake apparent from record--Export--Special deduction--Intimation to assessee--Claim debatable or doubtful--Disallowance part of claim not on basis of settled principles--No notice issued under sub-section (2) of section 143--Rectification pursuant to direction by Commissioner (Appeals)--Appellate authorities right in deleting disallowance-- CIT v. Mekins Agro-Products Ltd. (T & AP) . . . 495
S. 158BD --Search and seizure--Block assessment--Undisclosed income--Assessment of third person--Condition precedent--Recording of satisfaction that undisclosed income belonged to third person--Limitation--Satisfaction must be recorded within two year time period stipulated in section 158BE(1)-- Raghav Bahl v. CIT (Delhi) . . . 447
S. 158BE --Search and seizure--Block assessment--Undisclosed income--Assessment of third person--Condition precedent--Recording of satisfaction that undisclosed income belonged to third person--Limitation--Satisfaction must be recorded within two year time period stipulated in section 158BE(1)-- Raghav Bahl v. CIT (Delhi) . . . 447
S. 194C --Deduction of tax at source--Transmission transaction charges to Gas Authority of India for supplying gas--GAIL not only showing transaction as sale in its relevant records but paying due tax thereon--Contract for supply of gas was for sale of goods and not works contract or contract for rendering technical services--Transaction outside purview of sections 194C and 194J--No liability for tax deduction at source-- CIT (TDS) v. Samtel Glass Ltd. (Raj) . . . 392
S. 194J --Deduction of tax at source--Transmission transaction charges to Gas Authority of India for supplying gas--GAIL not only showing transaction as sale in its relevant records but paying due tax thereon--Contract for supply of gas was for sale of goods and not works contract or contract for rendering technical services--Transaction outside purview of sections 194C and 194J--No liability for tax deduction at source-- CIT (TDS) v. Samtel Glass Ltd. (Raj) . . . 392
S. 250 --Assessment--Additional tax--Rectification of mistakes--Appeal--Deletion of disallowance on appeal--Assessing Officer can delete additional tax in rectification proceedings-- CIT v. Redico Khaitan Ltd. (All) . . . 424
S. 254 --Assessment--Additional tax--Rectification of mistakes--Appeal--Deletion of disallowance on appeal--Assessing Officer can delete additional tax in rectification proceedings-- CIT v. Redico Khaitan Ltd. (All) . . . 424
S. 254(2) --Appeal to Appellate Tribunal--Rectification of mistakes--Failure to deduct tax at source--Amendment allowing benefit where payee has paid tax on receipts effective from 1-4-2013--Tribunal relying on decision of jurisdictional High Court rejecting application for rectification--Assessee to pursue remedy by filing appeal before High Court--Writ petition not maintainable-- Thomas John Muthoot v. Asst. CIT (Ker) . . . 525
S. 260A --Appeal to Appellate Tribunal--Rectification of mistakes--Failure to deduct tax at source--Amendment allowing benefit where payee has paid tax on receipts effective from 1-4-2013--Tribunal relying on decision of jurisdictional High Court rejecting application for rectification--Assessee to pursue remedy by filing appeal before High Court--Writ petition not maintainable-- Thomas John Muthoot v. Asst. CIT (Ker) . . . 525
S. 2(7) --Interest-tax--Interest on debentures--Notional interest--Not chargeable interest-- CIT v. Golden Investments Ltd. (Mad) . . . 544
R. 5(1A) --Depreciation--Exercising of option--Returns filed under section 139(1) and exercised option in form prescribed therein--No separate letter or request or intimation with regard to exercise of option required--Option once exercised will continue to subsequent years-- CIT v. Kikani Exports P. Ltd. (No. 2 ) (Mad) . . . 500
Appex. I --Depreciation--Higher rate of depreciation--Plant--Neither includes “building†nor includes “roadâ€--â€Road†is a “building†and not a “plantâ€--Toll road is a capital asset and not an implement or a tool used by assessee for his business--Would not qualify as a “plantâ€--Not entitled to a higher rate of depreciation-- Moradabad Toll Road Co. Ltd. v. Asst. CIT (Delhi) . . . 403
Cl. 4(i) --Sikkim--Charge of tax--Application of Act--Extension of Income-tax Act, 1961, to State of Sikkim with effect from 1-4-1990--Effect--Repeal of Sikkim State Tax Manual by necessary implication--Assessments made under Sikkim Tax Manual for assessment years 1997-98 to 2005-06 not valid--State directed to refund amount-- Sikkim Manipal University v. State of Sikkim (Sikkim) . . . 567
|  ITR'S TRIBUNAL TAX REPORTS (ITR (Trib)) HIGHLIGHTS
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| GOODS AND SERVICE TAX REPORTS (GSTR) HIGHLIGHTS
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Earlier Guidelines issued by I C A I E Book was circulated by me.
UNDER REVISION?Guidance Note on Audit of Internal Financial Controls Over Financial Reporting. - (12-12-2014)
Expand Messages
- ramachandran_caToday at 5:14 PMInformation regarding Guidance Note on Audit of Internal Financial
Controls Over Financial Reporting. - (12-12-2014)
________________________________
Members may please note that the Guidance Note on Audit of Internal
Financial Controls Over Financial Reporting is under revision. A
revised version of the same will be uploaded in due course.
Inconvenience is deeply regretted
S. 37(1): Law on deductibility of expenditure incurred on legal fees to defend criminal proceedings explained
(i) The ratio of the decisions in CIT vs. Birla Brothers 82 ITR 166 (SC), CIT vs. Dhanrajgiri Raja Narsinghgiri (1973) 91 ITR 544 (SC), CIT Vs. H. Hirjee (1953) 23 ITR 427 (SC) and CIT Vs. Chaman Lal & Brothers (1970) 77 ITR 383 (Del) can be summarized as follows. In the cases where assessee is able to demonstrate positively that the claimed expenditure on legal fees and proceedings is in extricably or proximately related to caring on the business of the assessee more effectively then the same shall be allowable. However, in the cases where the given or claimed expenditure on legal fees and proceedings is remotely connected or unconnected to caring on of business of the assessee, then the same may not be allowable u/s 37 of the Act. Applying this to the facts in extant case, it can be safely inferred that expenditure to defend in custom duty evasion criminal case, having no connection with caring on of business, is held to rightly disallowed by the AO and same disallowance was upheld by the CIT(A) on cogent and reasonable basis.
(ii) As the assessee was arrested in Custom Duty Evasion criminal case by the DRI and the payment of legal expenses and fees to the lawyers was made to defend and to secure bail for the assessee in that case. In this situation following the decision of Hon'ble Supreme Court in the case of CIT Vs. H. Hirjee, we reach the logical conclusion that the authorities below were right in holding that the payment of legal fees and expenses towards defending in a criminal prosecution not allowable as business expenditure because the same was not expended wholly and exclusively for the purpose of business.
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