ACIT vs. Bright Star Investment (ITAT Mumbai) – Where the assessee had converted stock-in-trade into investments at their book value and later sold them and offered to tax the difference between the indexed book value and the sale proceeds as capital gains and the AO took the view that the difference between the book value and the FMV on the date of conversion had to be assessed as business income, Held:
Mysodet (P) Ltd vs. CIT (Supreme Court) -Where in respect of the asst. year 1990-91, the assessee claimed deduction under section 80-HHC on traded goods on the proportion that the export turnover bore to the total turnover even though there were no profits from the export activity and the High Court held, relying on IPCA Laboratories vs. CIT 266 ITR 521 (SC), that in the absence of export profits deduction u/s 80-HHC was not available,
Mahendra D. Jain vs. ITO (Bombay High Court) – Where the assessee is carrying on an illegal activity which is treated as a business, any loss arising in such business as a result of confiscation by the authorities is an allowable loss. However, where the assessee is carrying on a lawful business, any loss arising as a result of infraction of the law is not allowable.
SET Satellite (Singapore) vs. DDIT (Bombay High Court) – Where the assessee had a ‘Dependent Agency Permanent Establishment’ (‘DAPE’) (“SET India”) in India and it was admitted by the Revenue that the assessee had paid ‘arms length’ remuneration to the said dependent agent but the Tribunal still held (106 ITD 75) that notwithstanding the taxability of the said dependent agent in accordance with domestic law, the assessee had to be assessed in respect of the profits attributable to the said DAPE, held, reversing the judgment of the Tribunal that
ITO vs. Lotia Co.op Hsg. Soc. (ITAT Mumbai) – Where the assessee was a co.op society and it and its members entered into a development agreement with a builder pursuant to which Tranferable Development Rights (TDR) entitled to be received under the Development Control Regulations was assigned to the developer for the repairs and redevelopment of the building and the construction of additional floors, held that the TDRs were owned by the flat owners individually and as no consideration for the transfer of the TDRs was received by the assessee society nor any area in the constructed portion was allocated to the assessee society, it was not chargeable to tax.
