and contributed by the assessee to a firm towards capital contribution should be treated as stock in trade even during the course of making the transaction of transferring or contributing the land to the partnership firm as capital contribution, the surplus arising to the assessee from the said transaction of contributing stock in trade
From the above facts, it is clear that Once the society during a period of almost 12 years has not carried out any activity, except purchasing land, to construct school/college building for imparting education, which was the main object of the society the activities of the trust for granting approval under section 80G cannot be called genuine and the CIT was fully justified in refusing to grant approval u/s 80G of the Income-tax Act. Hence, the order of Commissioner of Income-tax is upheld and consequently the remaining grounds of appeal taken by the appellant society stand rejected.
In the case of Schefenacker Motherson Ltd v. ITO, ITA No. 4459/DEL/07 for AY 2003-04 and schefenacker Motherson Ltd v. DCIT, ITA No.4460/DEL/07 for AY 2004-05, the Delhi Bench of the Income-tax Appellate Tribunal (the Tribunal), held that cash profit on sales “CP/Sales” or cash profit on total cost excluding depreciation “CP/TCdep”
The assessee was engaged in the business of real estate development. It held land as stock in trade with a book value of Rs. 4.4 crs. The said land was introduced at its market value of Rs. 11.50 crs as capital contribution into a new firm. The surplus of Rs. 6.01 crore was credited to the profit and loss account. Relying on Hind Construction 83 ITR 211 (SC), it was claimed that the surplus of Rs. 6.01 crs was not liable to tax as the introduction of an asset into a partnership was not a sale.
The income attributable to the operations of developing/producing breeder seeds or hybrid germplasm or parent hybrid seed containing desired traits cannot be treated as agricultural income and should be treated as business income.
. In view of the above decision, the company whose principal business is that of granting of loans and advances, may earn a comparatively high income from some other activity in a particular year, merely because the income/loss from share trading in the year under consideration is higher than the interest income,
In view of the above, the grievance of Pride Foramer against being treated as an agent of the expatriate personnel under section 163 of the Act is found to be of merit and it is accepted as such.
In fact, the assessee has borne part of the advertisement expenditure which was to be borne in full by the Indian franchises. Hence, we are of the considered opinion that section 92 is not applicable with regard to the advertisement expenditure.
Hon’ble Madras High court in the case of A.Y.S. Paisutha Nadar v. CIT [1962] 46 ITR 1041 (Mad.) had held that section 10(2)(xv) of the Indian income-tax Act, 1922 [section 30(a)(ii) of 1961 Act.] relating to expenditure laid out or expended wholly and exclusively for the purpose of the assessee’s business, clearly indicated that the expenditure should relate to a business which is already in existence and not one that is to come into existence in the future. Hence the expenditure incurred on modifications and renovations of the building cannot be treated to have been incurred during the course of business wholly and exclusively for the purposes of business and cannot be allowed as deduction u/s 37 of the Act.
The Delhi bench of the Income-tax Appellate Tribunal (the Tribunal), in the case of Oracle India (P) Ltd. V. ACIT (2009-TIOL-540-ITAT-DEL) (the taxpayer) held that section 40A(2) of the Income-tax Act, 1961 (the Act) overrides the provisions relating to computation of business income only and thus in relation to international transactions, the specific provisions embodied in Chapter X (section 92 – 92F) shall override the general provisions embodied in section 40A of the Act. Hence, once the Transfer Pricing Officer (TPO) accepts the arm’s length character of any international transaction, the Assessing Officer (AO) could not make an adjustment in relation to that transaction under section 40A(2) of the Act.
