Income Tax Judgment of SC, HC and ITAT

  • Aug
  • 30
  • 2015

If building is constructed by trust on land owned by trustee; the provisions of sec 13(1) does not gets attracted

Madras High Court in M/s Natya sankalpaa Vs DIT Exemptions held that if the trustee would compensate the trust with the amount which trust had applied on the property of the trustee then it could not be said that the income of trust had applied to the benefit of trustee and exemption of sec 13(1) could not be denied.

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  • Aug
  • 30
  • 2015

No wealth tax on land which remains vacant as per construction Plan

Madras High Court held in CIT Vs M/s MIL Industries Ltd that the vacant land left on constructed property as per the construction plan of that property would not be treated as a vacant urban land because the vacant land left was the requirement of the construction plan, failing which was not possible to construct the property.

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  • Aug
  • 30
  • 2015

For computing income u/s 80I or 80 IA only losses and deductions of eligible business has to be considered from initial A.Y.

Madras High Court in CIT Vs K Rajinikanth (Madras High Court) held that for computing the income for calculating the deduction u/s 80IA, only the profits & Losses of the eligible business had to be taken into consideration as if it was the only business of the assessee. Further once the Losses were adjusted against the other income of the business enterprise, the same would not be reopened again for calculating the income for deduction u/s 80IA.

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  • Aug
  • 30
  • 2015

Re-assessment proceedings cannot be initiated u/s 147 just because of change in opinion

Madras High Court held in CIT Vs M/s Schwing Stetter India P Ltd that the case only be opened for re-assessment u/s 147 only if there was a tangible material in the hand of AO , it could not be opened just because of the change in the opinion of AO.

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  • Aug
  • 30
  • 2015

In case of failure to issue proper notice to assessee, ITAT has right to review its own order

Madras High court in CIT Vs M/s Sea Rose Marines Pvt Ltd (Madras High Court) held that if the notice was not issued to the assessee properly then the ITAT had the right to review its own order. The ITAT had recalled the order and gave new decision after reviewing its own order by relying on the decision given in Rathore Brothers (2002 (254) ITR 656 (Mad).

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  • Aug
  • 30
  • 2015

sec 80HHC- Taxation Laws (2nd Amendment) Act, 2005 have prospective effect

Madras High Court held in CIT V/s Ms Orient Express that the amendment to sec 80HHC would have prospective effect from 2005 not retrospective effect.

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  • Aug
  • 30
  • 2015

Income from sell of land is capital gain, if purchase and sell of land is not the business of Assessee

Madras High Court held in CIT Vs Ms Vidya Thangakumar that it would vary from case to case that whether the land in the hand of assessee is a capital asset or business stock. In the present case the assessee had got the land under settlement and it had to sell the land, it was not the business of the assessee to purchase and sell the land. So the income from selling the land would be taxable under head capital gain.

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  • Aug
  • 30
  • 2015

Donor’s Identity, Relationship & Occasion of Gift are essential to prove genuineness of Gift

Case Law Citation: Shri L. Syed Ibrahim Bahadusha Vs I.T.O (Bangalore ITAT), I.T.A No. 406/Bang/2014 A.Y. 2004-05, Date of decision –24-08-2015 Facts of the Case A sum of Rs.7 lakhs, shown to have been received as gift from Shri Jamaluddin Sheik Fareed, was treated as unexplained cash credit in the hands of the assessee on […]

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  • Aug
  • 30
  • 2015

Expenses related with improvement in operations of existing business product line is revenue expense

Madras High Court in the case of CIT Vs M/s Southern Petrochemicals Industries Corporation Ltd held that market research expense incurred to increase the efficiency of the existing business product line, the same should be treated as revenue expense. Neither the new plant had been installed nor the new product had been launched so the market research expense should be treated as revenue expense.

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  • Aug
  • 30
  • 2015

Only operational income related with main business activity of assessee will qualify for deduction u/s 80HHC

Madras High Court held in CIT Vs Funskool (I) Ltd (Madras High Court) that for calculating the cost of the finished product the process of designing or stickering which had been used to design or give a final look to the finished product which was finally sold in the market should also be included in the total cost of final product not under the advertisement cost.

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