Category Archives: Judgements

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 »

Delay in uploading return due to Technical snag on website valid excuse : HC

HIGH COURT OF MADRAS Central Board of Direct Taxes v. Regen Infrastructure & Services (P.) Ltd. NOOTY. RAMAMOHANA RAO AND DR. ANITA SUMANTH, JJ. WRIT APPEAL NO. 1314 AND C.M.P. NO. 17100 OF 2016 NOVEMBER  1, 2016 T. Ravikumar for the Appellant. JUDGMENT Nooty. Ramamohana Rao, J. – This Letters Patent Appeal is directed against… Read More »

CA name to be removed from membership for carrying business while practicing : Delhi High Court

HIGH COURT OF DELHI Council of Institute of Chartered Accountants of India v. B.K. Dhingra PRADEEP NANDRAJOG AND MS. PRATIBHA RANI, JJ. CHAT.A.REF. NO. 1 OF 2013 SEPTEMBER  22, 2016 Rakesh Agarwal and Pulkit Agarwal Advs. for the Relator. ORDER   Pradeep Nandrajog, J. – This is a reference under Section 21(5) of the Chartered… Read More »

No disallowance of Expenses because benefit of research were not shown

Held The disallowance cannot be made only on the ground that results of the research were not shown by the assessee during the year under consideration. The benefit of research may or may not yield in the year under consideration. But, that would not determine allowability of the expenses or otherwise. Thus, taking into account… Read More »

No Income Tax recovery from Purchaser when Bank sold mortgaged property without sharing sale proceeds with dept.

Did the department have a prior charge over the property which before raising of the dues of the department was already mortgaged in favour of the financial institution? Held Even if the bank had disregarded such a communication of the income-tax department and not shared with the department, proceeds of the sale of such property,… Read More »

Application us/ 10 (23(C) can be filed even prior to 1st April of relevant Assessment Year from which exemption is sought

Held The application can be filed even prior to 1st April of the relevant Assessment Year, from which the exemption is sought. HIGH COURT OF PUNJAB AND HARYANA Shri Guru Ram Dass Ji Educational Trust v. Chief Commissioner of Income-tax, Amritsar S.J. VAZIFDAR, CJ. AND DEEPAK SIBAL, J. C.W.P. NO. 14010 OF 2016 SEPTEMBER  28,… Read More »

Non filing of 15G/15H would not invoke disallowance u/s 40(a)(ia)

Held ”Since separate provisions were prescribed on default for non-filing or delayed filing of Form 15G/15H to Commissioner. non filing of such form would not invoke disallowance under section 40(a)(ia) and that where person responsible to deduct TDS received declaration in form 15G/form 15h non-filing or delayed filing of such form before Commissioner would not… Read More »

Flats held as stock in trade are not second residential house, Section 54F allowed

Held Any stock in trade by profession is excluded from the definition of capital asset and in these circumstances the contention of the Revenue is that stock in trade is also included for applicability of Section 54F of the Act, in our view, cannot be accepted. HIGH COURT OF KARNATAKA Commissioner of Income-tax, Mangalore v.… Read More »

Bank can’t go to civil court to settle property claim if covered by SARFAESI Act

Held It is possible that a suit is filed before an appropriate civil court regarding the title to an immovable property and such immovable property later becomes the subject-matter of a bank’s claim. At the time of institution of the civil suit, the bank may not have had any claim or the property may not… Read More »

Amendment to Section 28 of Contract Act is Prospective : Supreme Court

  SUPREME COURT OF INDIA Union of India v. Indusind Bank Ltd. C. NAGAPPAN AND R.F.NARIMAN, JJ. CIVIL APPEAL NOS. 9087-9089 OF 2016 SEPTEMBER  15, 2016 Ms. Manita Verma, Vibhu Shankar Mishra, R.K. Rathore, Arvind Kumar, Raj Bahadur Yadav, M.K. Maroria, Ms.Shruti Srivastava and Shreekant N. Terdal, Advs. for the Petitioner. Pranab Kumar Mullick, Mrs.… Read More »

Section 50C could not be applied to sale of development rights of land

Held The provisions of section 50C are deeming provisions. It is settled law and well accepted rule of interpretation that deeming provisions are to be construed strictly. Thus, while interpreting deeming provisions neither any words can be added nor deleted from language used expressly. We should apply the ‘Rule of Strict Interpretation’ as well as… Read More »

Burden on assessee to prove interest-free funds exceeded value of investment to escape section 14A disallowance

Held The burden is upon the assessee to show and prove that interest free fund far exceeds the value of investment and thereafter, to justify the quantification of amount of Rs. 4 lakhs towards disallowance for the exempted income. In the present case, the said burden has not been discharged satisfactorily and thereafter, the assessing… Read More »

Payment for broadcasting rights of Olympic games isn’t royalty :Federal Court of Australia

Issue is whether s 128B of the Income Tax Assessment Act 1936 (ITAA 1936) applied to payments that Seven Network Limited (Seven), a resident of Australia, paid to the International Olympic Committee (IOC), a resident of Switzerland, between March 2006 and August 2008 for the broadcasting rights to the Olympic Games. Whether s 128B of… Read More »

Computerized machines are not Computers, 60 % Depreciation not allowed

Held Increasingly organizations are moving towards computerized integrated manufacturing, where more and more computers, robots, and microprocessors are used in conjunction with the machines. But the machines cannot be called as computers even though computer is an integral and dedicated part of the whole machine. That computer in the machine cannot be used for any… Read More »