Income Tax Judgment of SC, HC and ITAT

  • Jul
  • 28
  • 2015

Department cannot take different view on same issue in absence of change in facts

The Hon’ble Delhi High Court in the case of CIT vs. Om Prakash Khaitan held that In the absence of change in system of accounting consistently followed by the assessee and accepted by the department, the department cannot take different stand for the subsequent years. Such change in stand if allowed would create confusing situation as far as assessee is concerned

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  • Jul
  • 28
  • 2015

Sec. 9(1)(vii) Commission for procuring order & recovering payments is not a Technical services

ITAT Lucknow in the case of ACIT vs. M/s Northern Tannery held that The commission paid to the non- resident agent for procuring order and recovering payments on the behalf of assessee could not be treated as the payment made for availing technical services as the services rendered by the agent not required any specialized skill set or expertise to execute the tasks. Thus, the aforesaid services are not technical services as defined u/s 9(1)(vii) and consequently not liable for tax deduction u/s 195.

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  • Jul
  • 28
  • 2015

Refund of excise and custom duties on Purchase of Raw Material and Capital Equipment used in Capital WIP is Capital Receipt

Delhi High Court in the case of Maithon Power Ltd. vs. CIT held that The expenditure incurred to set up operations forms the part of capital work in progress and thus, the subsequent reimbursement of any part thereof would be a capital receipt which will get reduced from the amount capitalized under the capital WIP.

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  • Jul
  • 28
  • 2015

Income from subletting of property is to be assessed as business income

In the case of Bhuvan Leasing and Infrastructures Vs ITO, ITAT Mumbai has held that where it is the intention of the assessee to lease out various premises and then sublet the same on leave and licence basis to different parties, then such activity carried on by the assessee in line with its objects is business activity undertaken by the assessee.

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  • Jul
  • 28
  • 2015

Deduction u/s 80IA(4) cannot be disallowed, merely on the ground that assessee is not the owner of infrastructure facilities

In the case of En-Vision Enviro Engineers (P) Ltd. Vs DCIT, it was held that deduction u/s 80IA(4) cannot be disallowed, merely on the ground that the assessee must be owner of the infrastructure facilities and the assess should be a developer and not contractor.

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  • Jul
  • 28
  • 2015

Welfare bodies formed under state statute eligible for registration u/s 12AA despite charging fees for their services

In the case of Pune District Security Guards Board vs CIT, ITAT Pune held that welfare bodies formed under Maharashtra Private Security Guards (Regulation of Employment and Welfare) Act, 1981 were eligible for registration under section 12AA even though they charge fee for their services.

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  • Jul
  • 28
  • 2015

Onus is on assessee to prove identity / creditworthiness of creditors & genuineness of transactions

In the case of Xerces Technologies Pvt. Ltd. Vs DCIT, ITAT Pune held that assessee to prove the identity of the creditors, their creditworthiness and the genuineness of the transactions. Mere furnishing of the particulars is not enough. Mere payment by account payee cheque cannot make a non- genuine transaction genuine.

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  • Jul
  • 28
  • 2015

If provisions of section 14A is to be invoked, disallowance is to be computed as per rule 8D

In the case of ACIT vs M/s.Goel Investments Ltd., ITAT Lucknow affirmed the earlier order of ITAT in a similar case of the same assessee that once provisions of section 14A of the IT Act are to be invoked, the disallowance is to be computed as per rule 8D of the IT rules.

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  • Jul
  • 28
  • 2015

Monopoly, continuous functioning and large orders at hand are sufficient basis for valuation of goodwill

In the case of CIT vs M/s.Motherson Auto P. Ltd, Delhi High Court held that the monopoly enjoyed by the assessee in respect of the product manufactured, the continuous functioning, the large volume of orders at hand when the collaboration transaction took place, were sufficient basis for valuation.

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  • Jul
  • 28
  • 2015

Rent cannot be increased for mere increase in prices of land

In the cited case, ITAT inter-alia held that merely because prices of land has gone up, rent cannot be increased particularly to persons covered u/s 40A(2)(b) of the I.T Act without looking into agreement in respect of rent for the earlier years and for the present year, it cannot be accepted the increase in rent is proper and as per the agreement.

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