CIT v Shivalik Hatcheries Pvt. Ltd. – ITAT, on the basis of the material placed before it came to the conclusion that the building of the poultry shed has been specifically designed with a view to protect the birds from disease. It has been designed to ensure proper lighting and circulation of air; proper and scientific feeding arrangement; proper water system; proper arrangement for collection of manure and droppings; proper arrangement for medication and vaccination; and a right environment conducive for laying of eggs by the birds. The building had been designed in a manner so as to protect the birds and increase their productivity. The argument made on behalf of the revenue that the building can be used with certain modification for certain other purposes cannot be accepted. It is how the building is designed which is the main factor which is to be taken into consideration. The law is clear that if it is found that the building has been designed specifically to further the cause of manufacture or production then the same is a plant. Applying the aforesaid test, we hold that the poultry sheds are plant within the meaning of section 243, as it then stood.
Deepak Engineering Works and Others v CIT and Others (Patna High Court)- , section 278B, makes it clear that onus lies on the Partners or Directors to prove that they are not responsible for any of the offence committed by a firm / company. First proviso to section 278B(1), quoted above, makes it clear that onus lies on the Partners or Directors to prove that they were not responsible for acts of omission or commission committed by the firm / company. The question as to whether petitioner nos. 2 to 4 were actually involved in this case or not is a question of fact which is to be determined during the trial and onus is on the petitioners to prove that they were not responsible for any act of omission or commission of the firm i.e. petitioner no.1 M/s Deepak Engineering Works. Accordingly, in view of statutory provisions contained in section 278B of the Income Tax Act (hereinafter referred to as the I.T. Act) first submission of learned counsel for the petitioner is not sustainable.
CIT vs. Dinesh Kumar Goel- The assessee running coaching classes followed mercantile system of accounting. Total fees for the entire course, which may be of two years duration was taken in advance at the time of admission of the students. For the A.Y. 1997-1998, the assessee claimed that the fees received in the relevant year were to be carried forward to the next assessment year as they related to the next financial year. The Assessing Officer rejected the claim on the ground that the assessee was following the mercantile system of accounting. The Tribunal allowed the assessee’s claim.
Ramalingam Charities Vs CIT, Salem (Madras High Court) – Tribunal considered the claim of the revenue as well as the assessee and pointed out that having regard to the fact that the Trust deed was not existing solely for the educational purposes and that the trust had engaged itself in other activities by running orphanages, Kalyana mandapam, money lending business, etc., it cannot be held that the Trust was one solely carrying on the activities of educational institutions. The Tribunal further pointed out that having regard to the fact that the assessee had not fulfilled the conditions laid down under Section 11(5) of the Act and had diverted the funds to its sister concern, the assessee was not entitled to the exemption under Section 11 and 12 of the Act. Honourable HC also held that since the assessee has not satisfied the requirement under Section 11(5) to claim benefit under Section 12 of the Act so not eligible to claim exemption u/s 11 and 12 for amount received as corpus fund.
CIT, Meerut v The District Excise Office (Allahabad High Court) – The argument of the learned senior standing counsel that Section 206C does not find place in any of its clauses of sub section (1) and therefore, the appeal is not maintainable ignores the clause referred to above in Sections 246 and/or 246A of the Act. The clause referred to above does not relate to any particular section of the Act. It will be attracted subject to fullfilment of its ingredients. It is in the nature of a residuary clause and gives a right to an assessee to challenge an order by way of appeal if he is so aggrieved subject to the condition that he denies his liability to be assessed under the Act.
Shayama Sanjay Shah v CIT (Gujrat High Court) – Though it is true that powers under section 273A of the Act are discretionary powers, it is equally true that powers conferred under a statute are required to be exercised in consonance with the provisions of the said statute. In the present case, as discussed hereinabove, the Commissioner instead of recording satisfaction or otherwise in respect of the grounds prescribed under section 273A of the Act, has rejected the petition on irrelevant grounds, firstly, on the ground that there was no reasonable cause for failure in filing the return of income belatedly, and secondly, on the ground that the petitioner had already paid the tax payable in consequence of the order of penalty, which ground in view of the provisions of section 273A of the Act should have, in fact, weighed in favour of the petitioner. Thus, the Commissioner has not exercised discretion as required under section 273A of the Act and as such the impugned order suffers from the vice of non application of mind to the relevant factors and as such cannot be sustained.
DIT Vs Brahamputra Capital Financial Services Ltd (Delhi High Court)- When assessee advances interest-bearing loans to a sister concern but declares the same as NPA in the balance-sheet as per RBI guidelines, even then interest can not be treated as realised and the same is not taxable income. The provisions of section 145 of IT Act cannot override section 5 of the Act; if income has neither actually accrued nor received within the meaning of section 5; whatever section 145 may say, such income cannot be charged to tax even though a book keeping entry may have been made recognizing such hypothetical income.
Chitranjan Jaiswal v CIT and Anr. – The order dated 9th February, 1996 clearly reveals that after initiation of the proceeding under section 147/148 of the Act of 1961, the Assessing Authority at its own has not dropped the proceeding upon satisfaction of his own without the help of the return. Admittedly, there was no regular assessment for the assessee of the year 1992-93 and petitioner was directed as well as required to submit the return in response to the notice under section 147/148 read with section 142 of the Act of 1961 and he duly submitted that return.
M/s Kone Elevator India Pvt Ltd Vs ITO (Madras High Court) – As per the decision of the Hon’ble Supreme Court, once the Assessing Officer has come to the conclusion that the taxable amount has escaped assessment, two conditions were required to be satisfied on the basis of the materials placed before him. Both these conditions were conditions precedent to be satisfied before the Assessing Officer could have jurisdiction to issue notice under section 148 read with section 147(a). But under the substituted section 147 existence of the first condition alone is suffice. In other words if the Assessing Officer has reason to believe that certain income assessable to tax has escaped assessment it confers jurisdiction to reopen the assessment. It is, however, to be noted that both the conditions must be fulfilled if the case falls within the ambit of the proviso to section 147. Hence, we are not able to appreciate the contention of the learned counsel for the appellant that the Assessing Officer has no jurisdiction to reopen the assessment.
Geofin Investment (P) Ltd vs. CIT (Delhi High Court) – Learned counsel for the petitioner Geofin Investment (P) Limited, submits that the tribunal had erred in dismissing the application under Section 254(2) of the Income Tax Act, 1961 (Act, for short) as the tribunal in its order dated 13th October, 2010, had referred to and relied upon decision of another ITAT Bench which had not not been cited at the time of hearing. He submits that the order passed by the tribunal dated 13th October, 2010 under Section 254(1) of the Act, should have been recalled. Hoourable High Court do not find any merit in the said contention. Under Section 254(2), a mistake apparent from the record can be rectified.
