Category Archives: Judgements

Notice sent by registered post is deemed to be served if it was returned back with postal endorsement

This Court in catena of cases has held that when a notice is sent by registered post and is returned with postal endorsement “refused” or “not available in the house” or “house locked” or “shop closed” or “addressee not in station”, due service has to be presumed Jagdish Singh v. Natthu Singh [1992] 1 SCC… Read More »

No Vat on Consumable used in Provision of Service

Facts of the Case Soaps, detergent, chemicals and solvents are deposited in the store of the Contractee (Railways) by Petitioner  to ensure that adequate quantity is used by the petitioner for the execution of the awarded work. Then said soaps/detergent/chemical/solvent are issued from Railways store to Petitioner Issue whether the consumable chemicals/solvents used in the… Read More »

Disclosure of unaccounted income due to search – No Penalty – Delhi High Court

Issue For the relevant assessment year 2005-06, Assessee reported its income through a return under Section 139(1) of the Act, declaring an income of Rs.1,72,799/- on 30.12.2005 A search and seizure operation under Section 132(4) of the Act was carried out on 11.01.2007 in the premises of the assessee’s group companies and directors of the… Read More »

Spread interest over to relevant financial years before deducting TDS – High Court to Insurance Company

Issue :- Insurance Company deposited with Workmen’s Compensation Commissioner Rs. 2,46,600/- after deducting, by way of TDS Rs.15,793/- original claimant filed application before the Workmen’s Compensation Commissioner with the grievance that the said amount of Rs.15,793/- could not have been deducted and he is entitled for full amount and interest as awarded by the judgment dated… Read More »

Credit can not be denied to purchaser for non payment of tax by Seller

Held The default of the selling dealer in not filing returns or not paying tax at his end cannot result in the denial of credit to the purchasing dealer. In such circumstances, if the selling dealer fails to remit the tax, the statute provides adequate machinery for recovery of the tax from the seller, who… Read More »

Holding period of Property to be computed from allotment letter issue date

Issue Learned CIT (Appeal) has erred in not considering the fact that the rights, title and interest in the property was itself acquired and held from the date of Allotment letter dated 11-04-2005 by the Appellant and as such the Period of Holding and indexation cost were not properly considered.” Held Holding period should be… Read More »

Rental income Taxable under Business head if objective was to carry on business

Held Main objective of the assessee firm as manifest from the partnership deed was to carry on business in construction of different types of buildings such as godowns, residential or commercial buildings, flats, shops etc., and lease them out as a part of its business activity but not as exploitation of the property as an… Read More »

Issue considered by AO in scrutiny assessment can not be reopened u/s 147 , it is Change of Opinion

Held when it is found that the entire issue was gone into by the Assessing Officer while framing the scrutiny assessment under Section 143(3) of the Act and thereafter reopening of the assessment on the very issue can be said to be change of opinion, which is not permissible, HIGH COURT OF GUJARAT Manan Exports… Read More »

Who can impound a passport – Judgment

Impounding of passport Held Even the Court cannot impound a passport. Though, no doubt, Section 104 Cr.P.C. states that the Court may, if it thinks fit, impound any document or thing produced before it, in our opinion, this provision will only enable the Court to impoundany document or thing other than a passport. This is… Read More »

Time to file revised return lapsed – Sec. 54F relief can be claimed under sec. 264

HIGH COURT OF DELHI Rajesh Kumar Aggarwal v. Commissioner of Income-tax, Delhi-VIII S. RAVINDRA BHAT AND NAJMI WAZIRI, JJ. W.P. (C) NO. 4111 OF 2014 C.M. APPEAL NO. 8240 OF 2014 JANUARY  3, 2017 Dr. Rakesh Gupta, Somil Agarwal, Rohit Kumar Gupta and Ms. Monika Ghai, Advs. for the Petitioner. Rahul Chaudhary, Sr. Standing Counsel… Read More »

Additional depreciation allowed even if acquisition & installation is not in same year

Issue Whether additional depreciation claim of Rs. 2,18,50,976/= @ 20% under Section 32 [1](iia) of the Income-tax Act 1961 , allowed on the machinery purchased before 31st March 2005, but installed after 31st March 2005 ?” Revenue Contention In the present case the twin conditions of installation and use in the year under consideration has… Read More »

No TDS liability on Provisions at year end if payee not identifiable : ITAT

Held When the tax deductor cannot ascertain the payee who is the beneficiary of a credit of tax deduction at source, the mechanism of Chapter XVII-B cannot be put into service. In view of the above, we, respectfully agreeing with the views of ITAT Chennai Bench in the case of Dishnet Wireless Ltd. (supra), set… Read More »

Supreme Court Judgment on Sasikala & jayalalitha in corruption case

STATE OF KARNATAKA … … APPELLANT(S) : Versus: SELVI J. JAYALALITHA & ORS. … RESPONDENT(S) WITH CRIMINAL APPEAL NOS. 304-307 OF 2017 (Arising out of SLP(Crl.) Nos.6294-6297 of 2015) Download Complete Judgment on Sasikala & jayalalitha in corruption case

No capital gain tax on capital contribution made in partnership firm by Partners

Facts of the case On 2nd May, 1979, the applicant assessee converted certain plots of land and shares hitherto held as investments into its stock in trade. On 8th May, 1979, the applicant assessee entered into the partnership firm with six others to trade in land, stock and shares by executing a partnership deed. The… Read More »

Supreme court judgement on attachment of Aamby Valley property of Sahara

SUPREME COURT OF INDIA S.E.B.I. v. Sahara India Real Estate Corpn. Ltd. DIPAK MISRA, RANJAN GOGOI, A.K. SIKRI, JJ. I.A. NOS. 83-85,104-106 AND 131 OF 2015 AND OTHERS FEBRUARY  6, 2017 ORDER   On 12th January, 2017, this Court, after referring to the earlier order dated 28th November, 2016, dismissed the application for extension of… Read More »

Co-operative Bank considered as Co-operative Society u/s 80P of Income Tax

PCIT Vs. The Totagars Co-operative Sale Society, I.T.A. No. 100069/2016, Date of order: 05.01.2017, High Court of Karnataka Issue: Whether for the purpose of Section 80P(2)(d) of the Income Tax Act,1961, a Co-operative Bank should be considered as a Co-operative Society? Held: Yes Brief Facts: The assessee filed its return of income, and claimed a… Read More »

No addition on basis of loose papers recovered during search of third parties

Held In the present case, the solitary basis for addition of over Rs. 1.67 crores was the chart recovered from the premises of Mr. B. K. Dhingra. Whatever be the facial indications, one thing is apparent i.e. that it revealed some amounts were paid by the third parties. The details of cheques and other particulars… Read More »

Mobile Charger sold with Mobile- Taxable at separate rate of tax : HC

Issue Rate of tax applicable under the Karnataka Value Added Tax Act, 2003, on the sale of mobile battery chargers, which are sold in the same package as the mobile phones and separately also Held ” . . . . . The mobile/cell phone charger is an accessory to cell phone and is not a… Read More »

Income from flowers & petals in pots is agriculture income : exempt from Tax u/s 10

HIGH COURT OF MADRAS Commissioner of Income-tax, Chennai v. K.N. Pannirselvam S. MANIKUMAR AND D. KRISHNAKUMAR, JJ. TAX CASE (APPEAL) NO. 617 OF 2016 SEPTEMBER  1, 2016 T. RaviKumar for the Appellant. JUDGMENT D. Krishnakumar, J. – The present appeal has been filed by the Revenue under Section 260A of the Income Tax Act 1961… Read More »

Sale through Flipkart – Interstate sale or Intrastate Sale- Issue decided by High Court

Issue whether the retail sale of mobile phones, computer spare parts, personal healthcare products, car accessories, cameras etc., done by the petitioner via the online portal would qualify as an inter-state sale or a local sale within the union territory of Puducherry. Contention of Revenue  Revenue would contend that the consignment moved from Karnataka… Read More »

Assessee acquires new house on credit , Benefit of Section 54 is available

Held Even if an assessee acquires a new house on credit i.e. the payment for which may be made in future, the assessee cannot be denied the benefit of deduction u/s 54 because what is required by sub-clause (i) is that cost of new house should be equal to or more than the amount of… Read More »

TDS Default- Payer Liable to pay Interest even if Payee furnishes NIL Income Tax Return

Issue “Whether a person who fails to deduct at source under section 194C is not liable to pay interest under section 201(1A) if the payee of such amounts has files a nil return or a return showing a loss? Held The language of Section 201 is clear and unqualified. It indeed does not permit an… Read More »

Commission paid to doctors for MRI and CT scan of patients disallowed : HC

Held it is clear that though the assessee had claimed deduction of amounts allegedly paid to doctors towards commissions, the assessee did not produce the vouchers or any other supporting documents to substantiate the claim. The assessee did not even disclose the names of the recipients. In other words, these are cases where the assessee… Read More »

Full time Employment – No certificate of practice to advocate can be granted : HC

Held In view of the conditions of the service contract of the 1st respondent with the Gujarat Industrial Development Corporation, we are convinced that the service of the 1st respondent is full-time employment and she is not entitled for grant of an temporary certificate HIGH COURT OF GUJARAT Bar Council of Gujarat v. Jalpa Pradeepbhai… Read More »

No disallowance for TDS default when TDS imposed by retro-amendment

Held The taxability of a sum in the hands of the recipient on account of a subsequent retrospective amendment would not expose the payer of income to an impossible situation of requiring deduction of tax at source on the anterior date of payment of such income. Thus, on this count also, assessee cannot be held… Read More »

Service Tax paid because Client refused to Pay – Allowed Expenses under Section 37 of Income Tax

Facts of the case Some of the clients of the Respondent-Assessee did not pay the service tax as required in terms of the invoice for onward payment to the Government of India. In these circumstances, the Respondent- Assessee paid the service tax payable under the Finance Act, 1994 out of its own resources and claimed… Read More »

Income from sale of plots to be taken in year of registration of conveyance deed

Issue The appellant recognized revenue only in the year in which the plots were sold and registration of conveyance deed. The Assessing Officer is of the view that the revenue should be recognized at every stage of receipt sale consideration Held he provisions of section 2(47) of the Act have no application to the transactions… Read More »

No TDS on bank guarantee commission made to bank : ITAT

Issue Disallowance of bank guarantee charges under the provisions of section 40(a)(ia) of the Act for non-deduction of TDS u/s 194H of the Act Held “There is no principal agent relationship between the bank issuing the bank guarantee and the assessee. When bank issues the bank guarantee, on behalf of the assessee, all it does… Read More »

National Anthem Mandatory for all cinema theatres to play before movie

S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Writ Petition(s)(Civil) No(s). 855/2016 SHYAM NARAYAN CHOUKSEY Petitioner(s) VERSUS UNION OF INDIA Respondent(s) Dated 30.11.2016 Summary of Judgment “Time has come for people to realise that the national anthem is a symbol of… Read More »

Service Tax on Air Conditioned Restaurants is unconstitutional

HIGH COURT OF KERALA Kerala Classified Hotels & Resorts Association v. Union of India A.M. SHAFFIQUE, J. W.P. (C) NO. 19277 OF 2013 OCTOBER  31, 2016 V. Krishna Kumar, G. Subodhan, Surendradas B., N. Vijayan Pillai, K.V. Rajappan Pillai and K.K. Radhakrishnanfor the Petitioner. N. Nagaresh, Ramavarma Reghunathan Thamburan, John Varghese and M.M. Jasmin for… Read More »

Sec .23(1) applies if buildings let out by owner to his own company

Facts of the case The property is owned by the co-owners themselves, who are also the Directors of the lessee company which has established the Hospital. As per the lease agreement between the co-owners and the lessee company, the mutually agreed rent is Rs.1 per sq.ft. However, a portion of the very same building is… Read More »

Expenditure on advertisement on television is Revenue Expenditure

Facts of the case The Assessee incurred expenditure on advertisement on television aggregating to Rs.29.99 crores. This expenditure related to advertisements published on television relating not only to individual products manufactured by it but also towards corporate advertisement to the extent of Rs.5.47 crores. The Assessing Officer disallowed the expenditure claimed towards corporate advertisement amounting… Read More »

Switching over from cash to mercantile system is not permissible in middle of FY : HC

Question  whether the Income Tax Officer was justified in refusing to permit the assessees switching over from the cash to the mercantile system during the midst of the financial year ? Held A switch over in the midst of an accounting year, especially in such cases, could lead to skewed results. An assessee could then… Read More »

No penalty on possession of high denomination notes if period to encash expired

Facts of the case The Income-tax Officer for the assessment year, namely, 1978-79 had levied a penalty of Rs. 95,000 after completion of the assessment proceedings for the relevant assessment year by invoking the provisions under section 271(1)(c) of the Income-tax Act, 1961 (‘Act’ for short), on the ground, that though the assessee is the… Read More »

Taxation of high denomination notes encashed as undisclosed Income

Facts of the case   On January 22, 1946, Banerjee encashed high denomination notes of the value of Rs. 51,000. In his application under the Ordinance which demonetized high denomination notes, Banerjee gave the reason for the possession of the notes as follows : “I am engaged in business as colliery proprietor, contractor, under Messrs.… Read More »

High denomination notes represent concealed income ? Burden of Proof

“Whether there was any material for the finding given by the Tribunal that out of 21 high denomination notes, which were exchanged by the assessee, 13 represented income of the assessee from some undisclosed source.” Held The burden is upon the department to prove that high denomination notes represent the concealed income of an assessee… Read More »

Deposit of high denomination notes can’t be unexplained when Cash Balance is Available

Facts of the case On 19-1-1978, the assessee tendered and deposited with the State Bank of India, Calcutta, 81 high denomination notes of Rs. 1,000 each. The assessee also furnished a declaration as required at the time of tender of high denomination notes. Columns 15 and 16 of the aforesaid declaration furnished are as under… Read More »