Income Tax Judgment of SC, HC and ITAT

  • Mar
  • 22
  • 2015

TDS on interest paid by assessee Indian branch of a Belgian bank to its head Office

Antwerp Diamond Bank NV vs. ADIT (ITAT Mumbai), ITA No. 1798/Mum/2009 (AY-2005-06), Date of Pronouncement : 04/09/2013 Interest was paid by assessee Indian branch of a Belgian bank to its head Office on subordinate debts and term borrowing. HELD, in view of domestic law as well as treaty same would not be chargeable to tax […]

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  • Mar
  • 20
  • 2015

Even though contract is awarded to assessee, the income is assessable only in the hands of person which has executed work

The assessee, a joint venture company, was awarded a project work. However the assessee did not execute the contract and the said work was done by one of its constituents namely SMS Infrastructure Limited (‘SIL’). Accordingly, receipts from the said project work were reflected in the books of account and return of income of SIL and the same was also accepted by the Assessing Officer (‘AO’) in the assessment made under section 153A read with 143(3) of the Income-tax Act, 1961.

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  • Mar
  • 19
  • 2015

An Institution ostensibly for philanthropic purpose and in reality for profit, would not qualify for Section 10(23C) deduction

A plain reading of Section 10(23C) makes it clear that the legislature has categorised for deduction income of those institutions which ‘exist solely’ for philanthropic purpose with a further stipulation that they would exist ‘not for the purpose of profit’.

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  • Mar
  • 19
  • 2015

Income derived from building was being applied for charitable purpose is to be clearly proved to avail building tax exemption- SC

 S.H. Medical Centre Hospital vs State of Kerala & ors (2014) 11 SCC 381 The Supreme Court was considering an issue as to whether income derived from a building can be said to be used for charitable purpose by running of a free medical aid to the needy and poor in the context of tax […]

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  • Mar
  • 18
  • 2015

SC: Mere surplus by educational institution does not mean that it ceases to exist solely for educational purposes

Queens Educational Society vs. CIT (Supreme Court), CIVIL APPEAL NO.5167 OF 2008, Date- March 16, 2015 SC Held that Law common to Section 10(23C) (iiiad) and (vi) may be summed up as follows: Where an educational institution carries on the activity of education primarily for educating persons, the fact that it makes a surplus does […]

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  • Mar
  • 18
  • 2015

Expenditure incurred on legal fees to defend criminal proceedings not allowable

The factual matrix of the present case is that there was a criminal case against the assessee with an allegation of custom duty evasion and he incurred impugned expenditure of legal fees for hiring lawyers to represent his criminal case before the Hon’ble High Court and Lower Courts to get the bail order.

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  • Mar
  • 18
  • 2015

Projected terrace area i.e. open to sky is not to be included in calculation of ‘built-up area’ for Sec. 80IB(10)(c)

The first and foremost issue to be decided is as to whether the area of projected terrace (open to sky) is liable to be included within the meaning of expression built-up area contained in clause (c) of section 80IB(10) of the Act.

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  • Mar
  • 18
  • 2015

If net consideration for transfer of capital asset of a charitable trust is utilized for acquiring new capital asset, then whole of capital gain is exempt

ACIT vs. Shri. Dwarikadhish Temple Trust (ITAT Lucknow),  ITA Nos.256 & 257/LKW/2011, Date of pronouncement -21/08/2014 Tribunal has held that in case the income is to be computed as per sub-section (1A) of section 11 of the Act, if the net consideration for transfer of capital asset of a charitable trust is utilized for acquiring […]

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  • Mar
  • 18
  • 2015

Deeming fiction created by virtue of sec. 50C cannot be extended to sec. 11(1A)

Assessee is a charitable society and is registered under section 12A of the Act. The question of applicability of provisions of section 50C of the Act on transfer of capital asset in the case of a charitable society was examined by the Tribunal in the case of ACIT vs. Shri. Dwarikadhish Temple Trust, Kanpur in I.T.A. No. 256 & 257/LKW/2011, in which the Tribunal has held that where the entire sale consideration was invested in other capital asset, provisions of section 50C of the Act should not be invoked.

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  • Mar
  • 17
  • 2015

Penalty cannot be levied on bonafide transaction with no intention to evade tax and where default was of technical nature

In absence of any finding recorded in the assessment order or in the penalty order to the effect that repayment of loans/ deposit was not under a bonafide transaction and was made with a view to evade tax, the cause shown by the assessee was a reasonable cause and in the view of section 273B no penalty could be imposed.

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