CIT v. Qatar Airways (332 ITR 253) – The agents of the assessee (airline) were entitled to sell tickets at any price between the fixed commercial price and the published price. As a result the assessee would have no information regarding the final rates at which tickets were sold. It would be impracticable and unreasonable to accept the assessee to collect feedback from its numerous agents on the prices at which tickets are sold. Thus, it was held that the difference between the commercial price and the published price could neither be considered as commission or brokerage in the hands of the agents and hence was not liable to TDS
Exchange traded derivative transactions carried on by the assessee during AY 2003-04 are speculative transactions covered under Section 43(5) of the Act and the loss incurred in those transactions are liable to be treated as speculative loss and not business loss. We further hold that clause (d) inserted to the proviso to Section 43(5) with effect from 1/4/2006 is prospective in nature and the ITAT was in error in holding that clause (d) to the proviso to Section 43(5) applied retrospectively so as to apply to the transactions carried on by the assessee during AY 2003-04. CIT vs. Bharat R. Ruia (Bombay High Court)
Cadila Pharmaceuticals Limited. vs Sami Khatib Of Mumbai (Medley Pharmaceuticals Limited). A division bench of the Bombay high court last week dismissed the appeal of Cadila Pharmaceuticals against the judgement of a single judge bench restraining Cadila from manufacturing, marketing or exporting medicinal preparations under the trade mark “Hb TONE”/ “HB TONE” or any other mark deceptively similar to the trademarks of another company, Medley Pharmaceuticals, namely “ARBITONE”, “RB TONE” or “HB RON”. The complaint was that Cadila was “passing off” the products with similar names.
Jayant Agro Chemicals Ltd v ITO and Others – As per the proviso to s 147 of the Act, the assessment can be reopened beyond four years from the end of the relevant assessment year, only if there is failure on the part of the assessee to disclose fully and truly all material facts. In the present case, the assessment is sought to be reopened beyond the period of four years and there is no material on record to suggest that there was failure on the part of the assessee to disclose fully and truly all material facts. From the reasons recorded for reopening of the assessment, it cannot even remotely be said that there is failure to disclose fully and truly all material facts. Presumption on the part of the AO that the assessee has failed to achieve 82% value addition is not even case of the licensing authority who has imposed the condition regarding value addition. The notice impugned in the petition for reopening of the assessment cannot be sustained.
The Bombay HC last week quashed the decision of the Customs, Excise, Service Tax Appellate Tribunal which held the Director General of Foreign Trade (DGFT), the licensing authority under the Foreign Trade (Development & Regulation) Act, did not have the powers to amend licences with retrospective effect. The CESTAT ruling was challenged by Bhilwara Spinners Ltd, manufacturers of yarn, which were granted ‘export promotion capital goods’ licence to import capital goods. The terms had to be changed due to market circumstances.
The Bombay high court last week quashed the office memorandum / press release dated November 11 and policy circular dated December 22 last year as they were not issued under the provisions of the Foreign Trade (Development and Regulation) Act, and, therefore, the restrictions contained in them were contrary to law.
Since export turnover has been defined by Parliament and there is a specific exclusion of freight and insurance, the expression “export turnover” cannot have a different meaning when it forms a constituent part of the total turnover for the purposes of the application of the formula prescribed by section 10A(4).
Where Parliament has intended to make a specific provision imposing a liability to pay penalty apart from the tax which is due and payable, a specific provision to that effect has been made; the expression “tax due” in section 179(1) cannot comprehend within the meaning of that expression a liability to pay a penalty that may have been imposed on the company.
The third proviso under section 15(1) of the SICA relieves the specified strength of secured creditors from shackle of taking consent of the BIFR and permits them to pursue their remedy under the provisions of Securitisation Act, which have been introduced as a special enactment, to further the cause of financial sector and the financial institutions to which the same is applicable.
It would be entirely arbitrary for the Assessing Officer to reopen the entire assessment under Section 147 to rectify an error or mistake which can be rectified under Section 154; an arbitrary exercise of power is certainly not a consequence which Parliament contemplates.
