Nihilent Technologies Private Limited Vs DCIT & Anr. (Mumbai High Court)- A division bench of the Bombay high court has quashed the reopening of the income tax assessment of Nihilent Technologies Ltd after four years. The software company had shares held by Hatch Investments (Mauritius) Ltd.
CIT Vs Phil Corporation Ltd. & Anr. (High Court of Bombay) – interest paid on borrowings utilized for the purchase of shares in order to retain managing agency by the assessee company was held allowable as business expenditure. We find that the reasoning of the ITAT that the overdraft was not operated only for investing in the shares of subsidiary company and the fact that it was also used for investment in the shares of the subsidiary company to have control over that company and, therefore, the element of interest paid on the overdraft was not susceptible of bifurcation and therefore, the respondent no.1 is entitled to the deduction under section 36(1)(iii) of the Income Tax Act is correct and deserves to be accepted.
In all these three appeals the assessee is the same and even the issue is identical, which pertains to three different assessment years, the factual premise on which such an issue has arisen for consideration is somewhat different. Therefore, we propose to first take up the facts of ITA No.14/2005 to understand and appreciate the question of law on which this appeal is admitted.
Palam Jain Educational & Welfare Society Vs DGIT (Delhi High Court)- When the assessee is already granted exemption u/s 10(23C)(vi), the fresh application of exemption cannot be rejected in view of third proviso to section 10(23C)(vi) as the exemption can be withdrawn only in the event that conditions under which the exemption is granted are not fulfilled and not before that.
Sanjay Ghai Vs Dy. CIT (Delhi High Court)- Impugned order dated 14th November, 2007 is set aside with a direction that the petitioner or his authorised representative will appear before the Deputy Commissioner of Income Tax, Circle 7(1), New Delhi on 29th August, 2011 at 2 p.m.
Rajendra G. Shah V/s Maharashtra State Electricity Distributiohn Company Limited (Bombay High Court) -The petitioner had thus admitted even in the plaint in the suit that the premises were used exclusively for the purpose of office not only by him but were shared with another advocate principally practicing in Mumbai. In view of the fact that the suit premises are exclusively used for the purpose of office, the petitioner is not entitled to claim that he should be charged for electricity consumed at the rate meant for domestic use, i.e. LT I – Residential use. The user of the suit is clearly a non-domestic and non-residential. The executing Court below therefore did not commit any error in holding that the decree which was passed in RCS No. 194 of 2000 was non-executable in view of the fact that the revised tariff had been fixed by the MERC which make the classification of the tariff only on the basis of domestic and non-domestic uses and not on the basis of residential use as opposed to commercial use.
CIT Vs B D Patel Quarry Works Private Limited (Gujrat High Court)- Appeal filed by the revenue would not be barred by the Board’s circular even if the assessee files a loss in the return on the ground of the tax effect being “Nil” or lower than the monetary limit fixed by the Board and, in such cases, the notional tax effect should be taken into account.
Hive Communications Pvt. Ltd. Vs CIT (Delhi High Court) – It is not for the Assessing Officer to dictate what the business needs of the company should be and he is only to judge the legitimacy of the business needs of the company from the point of view of a prudent businessman. The benefit derived or accruing to the company must also be considered from the angle of a prudent businessman.
CIT Vs Prem Gandhi (Delhi High Court) – In view of the amendment to section 132(1) of the Income Tax Act which has retrospective effect from 1.6.1994, Additional Director of Income Tax (Investigation) is duly authorised to issue warrants of search. Thus, the impugned order passed by the Tribunal is set aside and the matter is remitted back to the Tribunal to decide the appeal of the respondent herein on merits.
All Grow Finance and Investment Pvt Ltd v CIT (Delhi HC) If the debt is not advanced in the ordinary course of business, it would not qualify for deduction as a bad debt. We are of the view that the only condition laid down in second part of sub-section (2) of Section 36 of the Act is that the amount should be advanced in the ordinary course of business which by itself proves its revenue nature and no further conditions are required to be satisfied which are only applicable with regard to debt qualifying as bad debt in the first part of sub-section (2).
