Reliance in this connection can be placed on the decision of Hon’ble Delhi High Court in case of Suresh Kumar Bansal vs UOI [W.P.(C) 2235/2011] wherein levy of Service Tax on the value of flats sold during construction stage has been held unconstitutional, if such value includes the value of Land.
Shanti Bhushan vs. CIT (Delhi High Court) -Delhi High Court has disallowed the income tax deduction for expenses incurred on heart surgery by eminent lawyer Mr. Shanti Bhushan. It was argued by Mr. Bhushan that he suffered a heart attack due to professional work and the expenditure incurred by him on a heart operation must be deductible under Section 31 of the Income Tax (I-T) Act.
CIT v Radhey Shyam Bansal and Others (Delhi HC) In the instant case, the referring AO has not recorded satisfaction that any undisclosed income belongs to the assessee. In the letter/communication dated 15 July 2003 by the referring AO to the AO of the assessee, there is no allegation that the assessee was provided with accommodation book entries or the amounts belong to the respondent-assessee. Book entries were provided to third parties. Though the referring AO wrote a letter to the assessee’s AO informing him that the assessee was providing bogus accommodation book entries and the quantum of transactions was given as per the Annexures, the Annexures were missing from the file. Thus, the appellant-revenue has not discharged the onus that there was valid satisfaction as required under s 158 BD. Therefore, the irresistible conclusion is the prerequisite of “satisfaction” as engrafted under s 158B for the purpose of the initiation of the block assessment proceeding is non-existent or absent.
The expenditure is to be fully allowed in the year in which the same is incurred provided it fulfills the test laid down under s 37, and only in exceptional cases can the expenditure be allowed to be spread over, that too, when the assessee chooses to do so as held by Delhi High Court in CIT v Citi Financial Consumer Finance Ltd — In favour of : The Assessee ; ITA Nos. 1820, 1974/2010 and 5/2011.
KASTURI & SONS LTD, CHENNAI Versus UNION OF INDIA & others (Madras High Court)- Dated: 24-02-2011 – Service Tax – Based on the impugned circular of the second respondent, the third respondent is insisting for payment of service tax on maintenance charges payable to the company in Denmark and therefore, the impugned circular is challenged on various grounds including that the same is ultra vires section 83 of the Finance Act, 1994 and section 37B of the Central Excise Act, 1944, that when the section itself takes away the maintenance of software from the purview of service tax, the second respondent cannot by virtue of such circular impose service tax, that it is ultra vires Article 265 of the Constitution of India, since it seeks to impose service tax through a circular which is not permissible in law and therefore, it affect Articles 19(1)(g) and 14 of the Constitution of India.
The unit in question is situated at Nashik, Maharashtra within the jurisdiction of this Court. The said unit was initially administered by the LTU at Delhi and it is only as an afterthought the revenue is contending that the unit in question would not be governed by the LTU scheme for the period where there was no specific approval. If mere forwarding of the consent letter entitles the large tax payer to avail the benefits of the LTU scheme then the benefits of the LTU cannot be denied where the consent is impliedly given by submitting ER-1 returns regularly. The show cause noticed is issued by the LTU, Delhi to the petitioner’s unit at Nashik. Thus, in the facts of the present case, it cannot be said that this Court has no jurisdiction to entertain the Writ Petition filed by the petitioner to challenge the show cause notice issued by the LTU, Delhi to the unit of the petitioner set up at Nashik.
Aayojan Developers vs ITO (Ahemdabad High Court) -Merely because of the fact that the assessee had asserted that it is a developer in the returns filed by him, it cannot be said that there is any failure on the part of the petitioner to disclose fully and truly all material facts. At best, the petitioner has made a claim along with supporting documents, namely, development agreements for construction of housing projects, etc. and based upon the said documents, the Assessing Officer had formed an opinion and granted deduction under section 80-IB(10) of the Act. As to whether in a given set of facts, the assessee is a developer or a works contractor is a matter of inference. Hence, the assertion that the petitioner is a developer, without anything more cannot be said to be an incorrect disclosure of facts, as is sought to be contended on behalf of the revenue. In the circumstances, in the absence of any failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment for the assessment year under consideration, the assumption of jurisdiction under section 147 of the Act after the expiry of four years from the end of the relevant assessment year is illegal and invalid. The proceedings under section 147 of the Act which have been initiated by issuance of the impugned notice under section 148 of the Act, therefore, cannot be sustained.
The contention that under section 80-I(6) the profits derived from one industrial undertaking cannot be set off against loss suffered from another and the profit is required to be computed as if profit making industrial undertaking was the only source of income, has no merit.
CIT Vs. Nestle India Ltd. -The Delhi high court last week dismissed the appeal of the Commissioner of Income Tax in a dispute over the deduction claimed by IT return in respect of remuneration/royalty paid by it to other subsidiaries and holding companies. The assessing officer disallowed the claim and the tax appellate tribunal held that the revenue authorities were wrong, leading to the appeal. The company, which makes food products and beverages, had debited a huge amount on account royalty payable to two overseas companies, namely Nestec S.A. and Societe Des Produits Nestle S.A., Switzerland. These payments were claimed as business expenditure on account of technical assistance rendered by the two companies to the Indian company. The authorities felt that the deduction was excessive. The high court upheld the ruling of the tribunal, which stated that the revenue authorities have not specified as to how much ordinary profit was supposed to be and the basis of its determination, before treating royalty payment as excessive and unreasonable.
CIT Vs Dalmia Dairy Industries Ltd (Delhi High Court) – Income tax – Capital or Revenue Receipt – Rule 115 – Whether, if assessee receives a sum on account of non-performance of the terms of the agreement by the purchaser under an arbitration award and keep it in the capital account, the surplus arising on account of fluctuation in foreign exchange is taxable as revenue receipt or should be considered as capital receipt – Whether profit and loss arising on account of appreciation or depreciation in the value of foreign currency is taxable only when there is actual conversion of foreign currency – Case Remanded
