Court has held that amendment made in section 40(a)(ia) by Finance Act, 2010 is retrospective in nature and would apply from 01.04.2005. The said amendment provides that no disallowance under section 40(a)(ia) could be made where the TDS has been paid before the due date of filing of return of income. This is first ruling of any High Court on this issue.
Shah Pulp & Paper Mills Limited Vs. UOI (Delhi HC) – In considering the challenge to the validity of paragraph 7(iii), it has become necessary for the Court to advert in some detail to the background underlying the promulgation of the scheme. The scheme, when it was issued initially on 24 November 2005 was designed to promote an expeditious facilitation of import cargo. The scheme seeks to balance the need of the trade and industry for facilitation on the one hand with the enforcement concerns of the department. An importer who is registered as an accredited client becomes entitled under the scheme to a clearance of the cargo on the basis of self assessment.
CIT Vs. Sumangal Overseas Ltd. (Delhi HC) – The Court held that where no appeal is preferred by the assessee against the quantum order, yet, while deciding the penalty appeal, it is open to the Tribunal to look into the transaction to see as to whether the claim was bona fide or it was bogus and result of falsehood. From that angle, when the Tribunal examined the matter, it found that on the facts of this case when advances given to the suppliers were not written off as irrecoverable, the same was allowable under Section 28 of the Act. A trading loss has a wider connotation than a bad debt. A bad debt may also be a trading loss, but a trading loss need not necessarily be a bad debt. There may be a bad debt which may not fall within the purview of Section 36(1)(vii) of the Act, but may well be regarded as one eligible for deduction incurred in the course of carrying on business will come under that category and will naturally enter into computing the net total income as the real profit chargeable to tax cannot be arrived at without setting off legitimate trading loss.
CIT Vs. Kas Movie Pvt. Ltd (Delhi HC) – For the purpose of claiming benefit under Section 80HHF of the Act, ownership of goods is not essential as held by the Supreme Court in the case of Sea Pearl Industries and Others Vs. Commissioner of Income Tax, 247 ITR 578. Thus, when two views were possible and the assessee made the claim on the basis of advice of the consultants, it was not a case where the penalty should have been imposed.
CIT vs. Moderate Leasing & Capital Services Ltd. (Delhi HC) – The Court, on the facts of the case held that where two portfolios are maintained by the assessee, i.e., investment portfolio and stock in trade, then, if the shares sold during the particular year pertains to investment portfolio and there happens to be loss, then such loss would be capital loss; and not the revenue loss.
In view of the order dated 23rd August, 2011 passed in Co. Appl. 1633/2011 in Co. Pet. No. 265/1998 as well as the fact that sale deeds in the present applications have been executed and some payments have been paid only after appointment of Provisional Liquidator, this Court finds no infirmity in the decision rendered by the One Man Committee. It is pertinent to mention that the sale deeds have been executed contrary to a specific injunction order dated 05th June, 1998 and the payments made by the applicants after the appointment of Provisional Liquidator have not been received by the Official Liquidator. Further, no transparent procedure of sale/auction has been followed as is normally done in cases after appointment of Provisional Liquidator. Consequently, this Court is of the opinion that even though the applicants are entitled in law to invoke the jurisdiction of the Court under Section 536(2) of the Companies Act, 1956, yet keeping in view the totality of the facts of the case, this Court is not inclined to grant any relief under the said Section.
CIT vs. Manish Build Well Pvt Ltd (Delhi High Court)-In the present case, the CIT (A) has observed that the additional evidence should be admitted because the assessee was prevented by adducing them before the assessing officer. This observation takes care of clause (c) of sub-rule (1) of Rule 46A. The observation of the CIT (A) also takes care of sub-rule (2) under which he is required to record his reasons for admitting the additional evidence. Thus, the requirement of sub-rules (1) and (2) of Rule 46A have been complied with.
Maxopp Investment Ltd vs. CIT (Delhi High Court) – Even for the pre-Rule8D period, whenever the issue of section 14A arises before an Assessing Officer, he has, first of all, to ascertain the correctness of the claim of the assessee in respect of the expenditure incurred in relation to income which does not form part of the total income under the said Act. Even where the assessee claims that no expenditure has been incuured in relation to income which does not form part of total income, the assessing officer will have to verify the correcteness of such claim.
Atma Ram Properties Pvt Ltd vs. DCIT (Delhi High Court) – In the present case, as already noticed, the Income-tax Officer, Azamgarh, subsequent to the completion of the original assessment proceedings, on making an enquiry from the jurisdictional Income-tax Officer at Calcutta, learnt that the Calcutta company from whom the assessee claimed to have borrowed the loan of Rs. 50,000 in cash had not really lent any money but only its name to cover up a bogus transaction and, after recording his satisfaction as required by the provisions of section 147 of the Act, proposed to reopen the assessment proceedings.
CIT vs. Jyoti Plastic Works Pvt Ltd (Bombay High Court) – under Section 80IB(2)(iv) what is relevant is the employment of ten or more workers and not the mode and the manner in which the said workers are employed by the assessee. In other words, irrespective of the terms of employment, condition of Section 80IB(2)(iv) would stand fulfilled if the assessee in aggregate employs ten or more workers in its manufacturing activity. The fact that the employer – employee relationship between the workers employed by the assessee differs cannot be a ground to deny deduction under Section 80IB of the Act, so long as the workers employed by the assessee in aggregate exceed ten in number.
