Gujarat High Court

Reimbursement of expense cannot be treated as loan or deposit to attract Section 269SS or 269T

Income-tax Officer Vs Hostel (Gujarat High Court)

In the present case, both, the Commissioner (Appeals) as well as the Tribunal have found that the transactions in question are neither in the nature of loans or deposits. Under the circumstances, the provisions of sections 269SS and 269T of the Act would not be applicable. Consequently, the question of contravention of such provisions att...

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Mere possession of valuable items not sufficient to form a belief that same not been or would not be disclosed

LKS Bullion Import and Exort Pvt Ltd Vs Director General of Income Tax(Gujrat High Court at Ahmedabad)

Mere possession of money, bullion, jewelery or such valuable article or thing per-se would not be sufficient to enable the competent officer to form a belief that the same had not been or would not be disclosed for the purpose of the Act. What is required is some concrete material to enable a reasonable person to form such a belief. ...

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Refund of Service Tax paid ignorantly if its burden not passed on to customer?

Commissioner of Central Excise & Service Tax Vs Modest Infrastructure Ltd. (Gujarat High Court)

Tribunal were correct in taking the view that the refund was liable to be paid to the present respondents as service tax was not passed on to the buyers/customers and there was no unjust enrichment. ...

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Company Liquidation – Applicant not to suffer because of lapses of Official Liquidator

Indian Oil People's Cooperative Group Housing Ltd. Vs Official Liquidator in Charge of Ahmedabad Manufacturing (Gujarat High Court)

It cannot be understood by the Court how such glaring lapses can be casually explained away as 'inadvertence' and 'oversight'. It is the bounden duty of the Official Liquidator to ensure and carry out a proper, detailed investigation regarding the properties in question, especially pertaining to the location of the immovable properties, s...

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Highest bidder do not get a vested right in property sold during auction by Income Tax Department

Jadeja Jitendrasinh Chandrasinh Vs Tax Recovery Officer, Range 3 & 2 (Gujarat High Court)

The proclamation of sale and holding a public auction are only the initial steps towards sale of immovable property of a tax defaulter to recover such amount through sale of his properties. The highest bidder, whose offer is accepted, during such public auction, has the responsibility to deposit 25 per cent of the purchase money on spot, ...

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Delay in filing appeal required to be construed liberally – HC

Commissioner of Customs Vs Karan Monomers P. Ltd. (Gujarat High Court)

The expression 'sufficient cause' may be required to be construed liberally, provided adequate and proper reasons exist. Liberal approach is advocated in condoning the delay and not being liberal to sufficiency of the cause where it does not exist....

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If debt itself is disputed than winding petition deserve to be dismissed

Asim Pharmachem Industries Vs Nilsin Ultrachem Ltd. (Gujarat High Court)

It is therefore necessary that there must be debt due and the company must be unable to pay it. If the debt is a disputed debt and the defence is substantial one order of winding up should not be passed. It is also note worthy that after the petitions were admitted no other persons have raised any claim and, therefore, this Court finds th...

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Extended limitation period u/s. 73 is not invokable if existence of bona fide belief is proved

Commissioner of Central Excise, Ahmedabad Vs Nita Textiles & Industries (Gujarat High Court)

In the show-cause notice it was conveyed that the assessee had not registered itself with a view to evading duty and that therefore larger period of limitation would be invoked. It may be that such issue of allegation was not in so many words denied by the assessee. ...

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Disallowance U/s. 40(a)(ia) cannot be made for non submission of Form No.15-I

Commissioner of Income Tax Vs Valibhai Khanbhai Mankad (Gujarat High Court)

In our view, therefore, once the conditions of further proviso of section 194C(3) are satisfied, the liability of the payee to deduct tax at source would cease. The requirement of such payee to furnish details to the income tax authority in the prescribed form within prescribed time would arise later and any infraction in such a requireme...

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Valuation Officer report cannot form the foundation for rejection of books of account

Goodluck Automobiles (P.) Ltd. Vs Assistant Commissioner of Income-tax (Gujarat High Court)

On a conjoint reading of the provisions of section 69 and section 142A of the Act, it appears that for the purpose of resorting to the provisions of section 142A of the Act, the Assessing Officer would first be required to record a satisfaction that the assessee has made investments which are not recorded in the books of account. ...

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No S. 80(IB)(10) denial for mere delay in permission for business

Commissioner of Income-tax - IV Vs Tarnetar Corporation (Gujarat High Court)

In the present case, therefore, the fact that the assessee had completed the construction well before 31st March, 2008 is not in doubt. It is, of course, true that formally BU permission was not granted by the Municipal Authority by such date. It is equally true that explanation to clause (a) to section 80-IB(10) links the completion of t...

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Loan Disclosed under VDIS can be claimed as bad debt if same become irrecoverable

Commissioner of Income-tax Vs Garden Finance Ltd. (Gujarat High Court)

Amount written off was a loan advanced during the course of business and that the interest thereon had been taxed as business income by the Department in accordance with the assessee's declaration under VDIS. The Tribunal also recorded a finding that the certificate accepting the VDIS declaration was issued by the Commissioner after consu...

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Section 10A does not contemplate any break in period of five assessment year

Expo Packaging Vs Assistant Commissioner of Income-tax (Gujarat High Court)

Sub-section (3) of section 10A either before or after its substitution does not contemplate a break in the five succeeding assessment years in relation to which an assessee is entitled to avail of benefit under section 10A of the Act. Thus, in case of an assessee who had already started availing the benefit of section 10A of the Act in an...

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Vicarious liability of director of a private company for ‘tax due’ u/s. 179(1) from it does not extend to interest & penalty

Maganbhai Hansrajbhai Patel Vs Assistant Commissioner of Income-tax (Gujarat High Court)

Section 179(1) provides for a vicarious liability of the director of a public company for payment of tax dues which cannot be recovered from the company. However, such liability could be avoided if the director proves that the non recovery cannot be attributed to any gross negligence, misfeasance or breach of duty on his part in relation ...

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Circumstances when Court to sanction proposal for reduction of capital

In re Radhe Developers (India) Ltd. In re (Gujarat High Court)

Court finds that the petitioner has followed the required procedure as contemplated under Sections 100 and 101 of the Act for the proposed reduction of capital. The Court also finds that Article 8 of the Articles of Association of the petitioner-Company permits reduction of capital. It also appears that as there was no outlay of funds, th...

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Limitation period not applies to Refund of Service tax paid twice

C C Patel & Associates (P.) Ltd. Vs Union of India & 2 (Gujarat High Court)

The petitioner having already paid up the service tax even before collection in a particular quarter, cannot be asked to pay such tax all over again in the following quarter on the same service on the ground that such tax had to be deposited in the later quarter but was deposited earlier. Any such action would be without authority of law....

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Expense on sub-division of shares is revenue expenditure as No enduring benefit

G.S.F.C. Ltd. Vs Deputy Commissioner of Income-tax (Asstt.) (Gujarat High Court)

In the present case, the expenditure is incurred for the purpose of sub-division of the shares. However, we do not see how the observations made by the Apex Court in the ratio laid down in case of General Insurance Corporation (supra) can be distinguished in view of such difference in facts. In case of sub-division of the shares also, the...

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Benefit u/s. 11 cannot be denied if trust files accumulation request of income till framing of assessment order

Assistant Commissioner of Income-tax Vs Stock Exchange Ahmedabad (Gujarat High Court)

Assessee filed Form No. 10 under rule 17 of the Rules at the time of filing revised returns in respect of each of the assessment years under consideration. Thus, evidently, the requirements of section 11(2) of the Act had been complied with before the completion of the assessments. Therefore, while completing the assessments for the asses...

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Reassessment valid if income is inflated to claim higher deduction u/s. 80IA

Sun Pharmaceutical Industries Ltd. Vs Deputy Commissioner of Income-tax (Gujarat High Court)

Only primary fact was that the assessee had earned interest income. We are, however, of the opinion that in the context of the close connection between the petitioner and Aditya Medisales, the fact that the assessee was eligible for deduction under section 80IA of the Act and the interest income received from the sister concern had relev...

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Assessee can avail Benefit of reduced penalty at appellate stage also

Commissioner of Central Excise & Customs, Surat-I Vs Rita Dyeing & Printing Mills (P.) Ltd. (Gujarat High Court)

In the aforesaid view, no illegality is committed by the Tribunal in giving option to the respondent-assessee under the Proviso to section 11AC of the Act. It is held that the benefit of payment of reduced penalty can be availed by the assessee at the appellate stages also and it is not the import of the said provision that such benefit c...

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HC refer applicability of Monetary Appeal Filing Limit Instruction to Larger bench

Commissioner of Income-tax, Central-II Vs Shambhubhai Mahadev Ahir (Gujarat High Court)

Whether the view taken by this Court in case of Sureshchandra Durgaprasad Khatod (HUF) (supra) that the instructions of 2011 of the Board providing for revised monetary limits for filing the appeals to the Tribunals, High Courts and Supreme Court, would apply to all pending cases irrespective of the date of filing of such appeals is corre...

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Net wealth not to include forfeited assets despite pendency of appeal on valuation date

Wealth Tax Officer Vs Lallubhai Jogibhai Patel (Gujarat High Court)

The Appellate Tribunal was right in law and facts in holding that the value of silver bars which stood confiscated under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 could not be added to the wealth of the assessee despite the fact that the confiscation order was subsequently set aside in appeal and t...

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Section 80-IB – Ceiling on commercial area not applies to projects approved before 01.4.05

Manan Corporation Vs ASSTT Commissioner of Income Tax (Gujarat High Court at Ahmedabad)

Section 80-IB(10) as amended by inserting clause (d) with effect from April 1, 2005 should be applied retrospectively is also without any merit, because, firstly, clause (d) is specifically inserted with effect from April 1, 2005 ...

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CBDT cannot take away exemption granted by statute by issuing a circular

Gujarat Urban Co-operative Bank Federation Vs Union of India (Gujarat High Court)

The impugned circular issued by the Board came up for consideration before the Bombay High Court and it has struck down the circular holding that powers under section 119 would not empower the Board to issue clarification which would take away the exemption which has been granted by the statute. There was no reason to take a different vie...

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Assessee can claim Refund of TDS paid twice or excess

FAG Bearings India Ltd. Vs Chief Commissioner of Income-tax (Gujarat High Court)

Since no provision is made in the Act or the Rules for claiming refund of excess TDS deducted with respect to remittance to the foreign company, CBDT issued its circular No. 769, dated 6-8-1998 and made provision for granting such refund to the Indian assessee deductee under the following circumstances:...

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Strong financial no ground to reject winding up petition filed against company defaulting in payments

Baader Beteiligungs GMBH Vs Parsoli Motor Works (P.) Ltd. (Gujarat High Court)

Even if a company which has good and solid financial foundation and also has capacity to pay, cannot avoid its obligation to pay and be allowed to neglect its financial obligations and when a company which is really financially sound and healthy does not make and neglects to make payment of the amount due and payable by it then the Court ...

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Interest on Share Application Money till allotment is taxable in hands of applicant

Gujarat Power Corporation Ltd. Vs Income-tax Officer (Gujarat High Court)

Though a total sum of Rs. 5 crores was placed by the State Government at the disposal of the assessee-company for allotment of shares, such sum was not utilized for the purpose for which the same was transferred. As per the understanding between the assessee and the State Government pending allocation of shares, whatever interest was earn...

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Service tax on import of services applicable only from 18.4.2006

Commissioner of Central Excise and Customs Vs Bayer's Diagnostics (I) Ltd. (Gujarat High Court)

In view of Hon'ble Supreme Court judgments in various cases the service tax liability on any taxable service provided by a non resident or a person located outside India, to a recipient in India, would arise w.e.f. 18.4.2006, i.e., the date of enactment of section 66A of the Finance Act, 1994. The Board has accepted this position. Accor...

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Reopeing of Assessment to verify compliance with provisions amended in future is invalid

Dishman Pharmaceuticals & Chemicals Ltd. Vs Deputy Commissioner of Income-tax (OSD)(Gujarat High Court)

From the facts on records, it is apparent that the impugned notice under section 148 has been issued after the expiry of a period of four years from the end of the relevant assessment year in a case where earlier an assessment had been framed under section 143(3) of the Act. Under the circumstances, the proviso to section 147 would be att...

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Deduction u/s. 35(1) for scientific research available even for unsuccessful research

Deputy Commissioner of Income-tax (Asstt.) Vs Mastek Ltd. (Gujarat High Court)

Scientific research in the context of the deduction allowable under section 35(1) of the Act would include wide variety of activities. It can also be appreciated that every scientific research need not necessarily result into the ultimate goal with which it may have been undertaken. Often times in the field of research and invention, the ...

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Demerger without transfer of liabilities is valid unless sole motive for the same is tax avoidance

Vodafone Essar Gujarat Ltd. Vs Department of Income-tax (Gujarat High Court)

The main contention of the Income Tax Department is that the Scheme is floated with the sole object to avoid tax liability. Except the Income Tax Department no objections were raised by anyone against sanctioning the Scheme. ...

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Assessment cannot be reopened u/s 147 in absence of tangible material

Inductotherm (India) Pvt. Ltd (Formerly Inductotherm India) Vs M. Gopalan, DY.Commissioner Income Tax Or His Successor(Gujarat High Court at Ahmedabad)

In the present case, we notice that in two out of four reasons recorded by the Assessing Officer for reopening the assessment, he stated that he need to verify the claims. In the second ground, he had recorded that admissibility of the bad debts written off required to be verified. In the fourth ground also, he had recorded that admissibi...

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If claim not considered by AO, there is no change of opinion

Gujarat Power Corporation Ltd Vs Assistant Commissioner of Income Tax (Gujarat High Court at Ahmedabad)

Assessee put forth his claim for exemption under section 10(23G) of the Act with respect to three different incomes, namely, (1) interest from SSNNL bonds, (2) interest from GIPCL bonds, and (3) capital gain from sale of shares by GPEC. Such claim was supported by the notes forming part of the return of income. It is not as if the Assessi...

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Assessee can set-off capital loss arising from sale of shares to sister concern

Assistant Commissioner of Income-tax Vs Biraj Investment (P.) Ltd. (Gujarat High Court)

In the present case, it is not even the case of the Revenue that shares were sold at a price lower than the market rate. If that be so, the question of inflating the loss by transferring the shares to group company would not arise. Under ordinary circumstances, it is always open to the assessee in his own wisdom to either hold on to certa...

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TDS not deductible by Individual & HUF if Turnover not exceeded Tax Audit Limit in preceding Financial year

Harshadbhai Naranbhai Bagadia Vs Assistant Commissioner of Income-tax (Gujarat High Court)

Sub-section (2) of Section 194C under ordinary circumstances does not cover an individual or Hindu Undivided family for the liability of deducting tax at source on the payments credited or made to the sub-contractor. However, proviso brings such individual or HUF within the fold of sub-section (2) if in the financial year immediately prec...

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Six Rules to distinguish share gains as LTCG/STCG vs. business profits

Commissioner of Income Tax Vs Vaibhav J Shah (HUF) (Gujarat High Court at Ahmedabad)

[a] The first test is whether the initial acquisition of the subject matter of transaction was with the intention of dealing in the item, or with a view to finding an investment. If the transaction, since the inception, appears to be impressed with the character of a commercial transaction entered into with a view to earn profit, it would...

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S. 272B – No Penalty for non production of Data at the time of survey for genuine reasons

ITO Vs Adinath Cooperative Bank Ltd. (Gujarat High Court)

The Tribunal while examining this issue went purely by the facts of the case and held that the difficulties in non-production of the documents as was required under the statute was on account of shifting of branch of the bank shortly before the date of the survey and afterwards within a period of two weeks they were furnished before the A...

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WT – Property subject to ULCA restrictions cannot be valued at market value

Aims Oxygen Pvt. Ltd.Vs Commissioner of Wealth-Tax (Gujarat High Court at Ahmedabad)

Land in question was declared surplus land under the Urban Land [Ceiling & Regulation] Act, 1976 which was having depressing effect on the value of the asset, the valuation had to be made on the basis of assumption that the purchaser would be able to enjoy the property as the holder, but with restrictions and prohibitions contained in the...

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S. 80HHC Amendment cannot be from retrospective date

Avani Export & Others Vs Commissioner of Income Tax Rajkot & ORS. (Gujarat High Court at Ahmedabad)

In the present case, according to the Finance Minister presenting the Bill, a valid piece of legislation has been wrongly interpreted by the Tribunal. We have already pointed out that according to the existing law, if a valid piece of legislation is wrongly interpreted by the Tribunal, the aggrieved party should move higher judicial forum...

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In case of Multiple Appeal for an A.Y. tax effect of all appeals to be considered to Compute Appeal Filing Limit

CIT Vs Manekbaug Co-operative Housing Society Ltd. (Gujarat High Court)

After taking into consideration the Instruction No. 5 of 2008, it is found that by virtue of the said Instruction, the revenue was prohibited from pre...

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Acceptance of records bars AO to make addition due to non-production of books

CIT Vs Jay Enterprise (Gujarat High Court)

We find that during original assessment proceedings the Assessing Officer himself had accepted the position that the assessee had maintained quantitative details and that the general profit was on the higher side. We further find that in remand report also, the Assessing Officer could not justify the lump-sum addition other than making a ...

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Merely because creditors were many years old & no interest been paid on loans, no addition can be made u/s. 41(1)

Commissioner of Income-tax-II Vs Nitin S. Garg (Gujarat High Court)

In the case before us, it is not been established that the assessee has written off the outstanding liabilities in the books of account. The Appellate Tribunal is justified in taking the view that as assessee had continued to show the admitted amounts as liabilities in its balance sheet the same cannot be treated as assessment of liabilit...

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Valuation accepted for Wealth-tax Act, should also be adopted under Income-tax Act

Deceased Shantadevi Gaekwad Vs Dy Commissioner of Income Tax, Circle (Gujarat High Court at Ahmedabad)

Revenue having accepted the declaration of the valuation of the selfsame jewellery given by the assessee as on 31st March, 1989 as correct valuation for the purpose of Wealth Tax Act, there is no reason why the same valuation should not be treated to be a reliable base for the purpose of computing the capital gain under the Act by the pro...

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Whether section 127(2) transfer order is invalid for want of reasons referred to Full Bench

Millennium Houseware Vs Commissioner of Inome Tax (Gujarat High Court at Ahmedabad)

Whether the decision of the three-judge-bench of the Supreme Court in the case of Ajantha Industries reported in [1976] 102 ITR 281 so far as it lays down the law that the requirement of recording reasons under section 127(1) of the Income tax Act is a mandatory direction under the law and non-communication thereof is not saved by showing...

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Benefit of ‘nil’ annual value u/s 23(2) available to HUFs also

Commissioner of Income Tax Vs Hariprasad Bhojnagarwala (Gujarat High Court)

Provisions of section 23(2) make it clear that benefits of relief in respect of self-occupied property is available only to owner who can reside in his own residence, that means, benefit of relief is available to self-occupied property only to an individual assessee and not to an imaginary assessable entity/fictional entity such as a part...

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S. 80I Dependent Unit Can be New Industrial Undertaking

Gujarat Alkalies & Chemicals Ltd Vs. CIT (Gujarat High Court)

In the present case it is not the case of the Revenue that the new unit by itself is not capable of production of goods but the case of the Revenue is that it takes help of the old existing unit. We are of the view that, that itself should not be the reason to reject the claim under Section 80-I of the Act. Thus, whether an undertaking i...

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Reopening U/s. 147 even within 4 years, on basis of retrospective amendment invalid

Ganesh Housing Corporation Ltd Vs. DCIT (Gujarat High Court)

The fact that the Assessing Officer in the assessment proceedings under section 143(3) of the Act did not give any opinion regarding the allowability or otherwise of deduction u/s 80IB (10) of the Act is not a ground of invoking Section 147 of the Act....

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S.80IB deduction not available in absence of Factory License

CIT Vs. Jolly Polymer (Gujarat High Court)

HC held that the benefit of Sec 80IB was not available where the assessee had not applied for Factory License before April 1st 2004. How¬ever, HC also clarified that in other cases where the assessee had applied for Factory License before April 1st 2004 but was granted the same later, deduction shall be allowable and such cases shall be ...

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Retrospective amendment no basis to reopen beyond 4 years – HC Disapproves AO’s Practice to Delay Passing Objection Orders

Doshion Ltd. Vs Income Tax Officer (Gujarat High Court)

Doshion Ltd. Vs. ITo (Ahmedabad HC)- Having thus heard learned counsel for the parties and having perused the documents on record, it clearly emerges that the assessment previously framed after scrutiny is sought to be reopened beyond the period of 4 years from the end of relevant assessment year. In the reasons recorded, the Assessing Of...

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CIT Vs. Radhe Developers (HC of Gujrat at Ahemdabad)

The Commissioner of Income Tax- I Vs Radhe Developers (Gujarat High Court)

CIT Vs. Radhe Developers (HC of Gujrat at Ahemdabad)- In the present case, we find that the assessee had, in part performance of the agreement to sell the land in question, was given possession thereof and had also carried out the construction work for development of the housing project. Combined reading of Section 2(47)(v) and Section 53...

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Mere opinion of the Audit Party cannot form the basis for the Assessing Officer to reopen the closed assessment

Cadila Healthcare Ltd. Vs Asst. Commissioner Of Income Tax (Gujarat High Court)

Cadila Healthcare Ltd vs. ACIT (Gujarat High Court) -Assessing Officer was of the opinion that no part of the income of the assessee has escaped assessment. In fact, after the audit party brought the relevant aspects to the notice of the AO, she held correspondence with the assessee. Taking into account the assessee's explanation regardin...

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Service Tax – Security Services provided at residential quarters of workers is not input service

Commissioner of Central Excise & Customs Vs M/s. Gujarat Heavy Chemicals Ltd. (Gujarat High Court)

In the present case, the act of providing residential quarters by the manufacturer to its employees was voluntary. Providing further security service in such residential quarters was also an act voluntary in nature. No connection between the security service provided by the manufacturer in the residential quarters maintained for the work...

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Service Tax – Section 78 permits benefit of reduction in penalty subject to assessee paying entire amount of tax determined with interest and 25% penalty within 30 days of communication of the order

Commissioner of Central Excise And Custr, Surat- 1 Vs M/s. S G Mundra (Gujarat High Court)

Provision under which the penalty was levied by the original adjudicating officer permits benefit of reduction in the penalty; subject to party paying the entire amount of tax determined interest and 25% of the penalty within 30 days of the communication of the order. As provision appears to be pari materia to Section 11AC and the order o...

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HC upheld 25% addition for receipt of goods from the parties other than the persons who had issued the bills of such goods

Commissioner of Income Tax- III Vs Sanjay Kumar Mansukhlal Dhabba (Gujarat High Court)

CIT Vs. Sanjaykumar Mansukhlal Dhabba (Gujrat HC)- In the said case of Sanjay Oilcake Industries [Supra], the Division Bench of this Court upheld the view of the Tribunal limiting the additions to 25%, where it was found that the goods were received from the parties other than the persons who had issued the bills of such goods. Though th...

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Allowability of commission paid to sole selling agent

CIt Vs. Sayaji Industries Ltd (Gujarat High Court)

CIt Vs. Sayaji Industries Ltd (Gujarat High Court)- There were voluminous records suggesting that the LGDA is not only the sole selling agent of the assessee, but it also does not undertake any other task except to promote the sales of the assessee company. Additionally, the assessee has larger number of customers and the LGDA supports su...

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Entitlement of assessee of any deduction cannot depend on existence or absence of such entries in the books of accounts

General Co- Operative Bank- Through Liquidator Vs Assistant Commissioner Of Income Tax- Circle- 7 (Gujarat High Court)

As held in the case of Kedarnath Jute Mfg. Co. Ltd. vs. Commissioner of Income-tax (supra) entitlement of assessee of any deduction cannot depend on the treatment accorded to such entries by the assessee. And, existence or absence of entries in the books of accounts is not determinative of such claim, but, that is depended on the provisio...

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HC upheld Application of GP on unaccounted sales to make additions

Commissioner of Income Tax- III Vs V R Textiles (Gujarat High Court)

CIT Vs. V R Textiles (Ahmedabad High Court) - On the ground that the entire undisclosed sales could not be treated as profit of the assessee, relying on the judgment of this Court in the case of CIT v. President Industries Limited, [258 ITR 654 (Guj)], it upheld the findings of the CIT [A] which applies the gross profit ratio against the ...

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If assessee have enough interest Free Fund, No interest amount can be disallowed for amount advanced to sister concerns

Commissioner of Income Tax Vs Raghuvir Synthetics Ltd. (Gujarat High Court)

CIT Vs. Raghuvir Synthetics Ltd. (Ahmedabad High Court) - Factually, it found huge funds were available without any interest liability with the assessee and that there was no evidence to hold that the borrowed money was utilized for the purpose of advance to the sister concern. All these aspects cumulatively led the Tribunal to hold that...

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Notice U/s. 148 is invalid In absence of any live link with the reasons recorded and the belief formed

Prasad Koch Technik Tech Pvt. Ltd. Vs Assistant Commissioner of Income Tax (OSD)- Tax (Gujarat High Court)

The Assessing Officer supplied reasons he had recorded for reopening the assessment, which read as under:- “The assessee company filed its return of income on 22.12.2006, declaring total income of Rs.1,00,86,370/-. The assessment u/s.143(3) was finalized on 18.06.2008 determining the taxable income of Rs.1,00,86,370/-. It is seen that t...

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Whether Tribunal is right in law in rejecting the alternative contentions of claim of deduction u/s. 11 of the Income-Tax Act,1961 as an aspect of Revenue’s appeal without adjudicating on the same on the ground of limitation

Udyog Bharti Vs Income Tax Officer (Gujarat High Court)

Udyog Bharati Vs ITO (Ahmedabad High Court)- In the first place it was not necessary for the appellant to file a cross-objection. As already noted, the assessee had raised an alternative contention of exemption under Section 11 of the Act before the CIT(A). The CIT(A) in view of his opinion that the benefit of Section 10(23) of the Act i...

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Gujrat HC decides at what stage it can be held that there had been an international transaction between taxpayer and its Associated Enterprises

Veer Gems v. ACIT (Gujarat High Court)

HC decides at what stage it can be held that there had been an international transaction between taxpayer and its Assocaited Enterprises...

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Merely because the benefit under the notification was not claimed before the original Adjudicating Authority is no ground for denying benefit under the notification if the assessee is otherwise entitled to the same

Commissioner of Service Tax Vs. M/s Bacha Fin-lease (Gujarat High Court)

Facts are not in dispute. It is an admitted position that the aggregate value of services in the case of the assessee as quantified by the department is Rs. 1,98,543/-. Notification No. 6/2005-Service Tax dated 1st March, 2005 exempts taxable services of aggregate value not exceeding four lakh rupees in any financial year from the [&helli...

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Canteen services which are indispensable in relation to manufacture of the final products would fall within the ambit of input service

Commissioner of Central Excise Vs Ferromatik Milacron India Ltd. (Gujarat High Court)

Under the provisions of section 46 of the Factories Act, it is mandatory for the employer to provide canteen services to the staff. Thus, provision of canteen services is a statutory requirement. Provision of canteen services being indispensable, it is incumbent on a manufacturer of goods, to provide the same if he desires to run his fact...

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Supply of goods to offshore installations i.e. EEZ will not be subject to sales tax, especially Central Sales Tax, since EEZ does not form part of territory of India

Larsen & Toubro Ltd Vs Union of India (Gujarat High Court)

Larsen & Toubro Ltd Vs Union of India (Gujarat High Court)- The High Court examined in detail the provisions of the Maritime Zones of India Act, 1976 (MZA) and observed that Union of India had no sovereignty over the EEZ. The Union of India only had certain sovereign rights over the EEZ. The High Court […]...

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Once the CIT grants approval for registration of the trust u/s 12A, the AO not required to re-examine the the object and purpose of the trust

Commissioner of Income Tax- I Vs Saurashtra Kutch Stock Exchange Ltd. (Gujarat High Court)

CIT Vs Saurashtra Kutch Stock Exchange Ltd. (High Court of Gujarat at Ahmedabad ) -Section 11 of the Act envisages exemption of certain income of the trust registered under Section 12A of the Act. This itself may require certain scrutiny and applicability of the exemption at the hands of the Assessing Officer. Despite registration under S...

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Whether expenses incurred on replacement of body of dumpers is revenue in nature ?

Commissioner of Income Tax- I Vs Manoj B Mansukhani (Gujarat High Court)

CIT Vs Manoj B Mansukhani (Gujarat High Court)- Whether where the assessee submits all the details to prove the expenses correctly, no dis-allowance can be made merely on the basis that stamp duty authority stating that the vouchers were stamped subsequently?...

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Immovable properties used primarily for business purpose cannot be taxed under the Wealth Tax Act

Commissioner of Income Tax Vs Gujarat State Petroleum Corporation Ltd.(Gujarat High Court)

CIT Vs Gujarat State Petroleum Corporation Ltd. (Ahmedabad High Court)- In the instant case, the assessee-company has let out only a very small portion (i.e. less than 10%) of its office premises to the Directorate of Petroleum. Department of Energy and Petrochemicals and that too under directions from the Government. ...

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Depreciation at the rate of 50% cannot be claimed in respect of vehicles given on lease

Dy. CIT Vs Pradip N Desai (Gujarat High Court)

Dy. CIT Vs Pradip N Desai (Gujarat High Court)- The assessee company is a leasing company which is engaged in leasing of plant and machinery, motor cars, etc. to its client. It is neither the case of the assessee nor is there anything on record to indicate that the assessee uses the vehicles in question in its business of transportation o...

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In case of business liability, deduction is to be allowed even if it is to quantified and discharged at a future date

Commissioner of Income Tax- I Vs Alembic Glass Industries Limited (Gujarat High Court)

CIT Vs Alembic Glass Industries Limited (Gujarat High Court)- If a business liability has definitely arisen in the accounting year, the deduction should be allowed although the liability may have to be quantified and discharged at a future date. What should be certain is the incurring of the liability. It should be capable of being estima...

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Gujarat HC upholds constitutional validity of service tax on renting of immovable property

Cine max India Limited Vs Union Of India & Anr. (Gujarat High Court)

Cine max India Limited Vs Union Of India & Anr. (Gujarat High Court)- While upholding Sec.65[105][zzzz] of Finance Act, 1994 as amended by Sec.75[5][h] and Sec.76 of the Finance Act, 2010, we hold that the provision of Sec. 65[105][zzzz] introducing service tax is not attracted if...

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Whether when assessee files loss return, Revenue’s appeal is not sustainable on the ground of tax effect being Nil or lower than the monetary limit fixed by the Board ?

CIT Vs B D Patel Quarry Works Private Limited (Gujarat High Court)

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 ...

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EPF – Mere filing of appeal without obtaining any relief from the Appellate authority shall not preclude or prohibit the authorities to proceed further in the matter for recovery of the amount

Employees Provident Fund Organization Vs Roll Well forge Ltd. & 1 (Gujarat High Court)NA (01/08/2011)

Please find enclosed herewith a copy of judgement dated 15/6/2011 delivered by Honourable Division Bench of Gujarat High Court in the matter of EPFO Vs. Roll well Forge Ltd. on the issue of initiating recovery action before expiry of limitation period of appeal prescribed under Sec.7-1 of the Act. While overturning the decision of Single ...

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Notice u/s. 148 of the Income Tax Act,1961 Invalid If Delivered Late To Post Office

Kanubhai M. Patel HUF Vs Hiren Bhatt (Gujarat High Court)

Kanubhai M. Patel HUF Vs Hiren Bhatt (Gujarat High Court)- In the present case, the impugned notices have been signed on 31.03.2010, whereas the same were sent to the speed post centre for booking only on 07.04.2010....

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Assessee not entitled to waiver of interest under s 234B and 234C on account of the non-adjustment of seized cash by the department against the tax liability

Manharbhai Muljibhai Kakadia Vs Union of India (Gujarat High Court)

Manharbhai Muljibhai Kakadia Vs UoI (Gujrat HC at Ahemdabad) Whether the assessee is entitled to waiver of interest u/s 234B & 234C relying on the circular dated 23.05.2006 in which waiver is given on account of non-adjustment of seized cash by the department against the tax liability though at the time of making of application of waiver ...

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If the company has undertaken certain activities as mentioned in its original objects, then it is sufficient to conclude that the business has commenced and that the expenditure incurred by the assessee is allowable

Commissioner of Income Tax Vs Gujarat Urban Development Opment Co. Ltd. (Gujarat High Court at Ahmedabad)

CIT Versus Gujarat Urban Development Co. Ltd. (HC of Gujrat at Ahemdabad) - The tribunal however, was of the opinion that the assessee company had undertaken activities in earlier year in accordance with its main objects contained in memorandum of Articles of Association of the company....

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Business liability which may be quantified & discharged at a future date allowable if its definite

CIT Vs Alembic Glass Industries Limited (Gujarat High Court)

CIT v Alembic Glass Industries Limited (High Court of Gujarat) - The law is settled - if a business liability has definitely arisen in the accounting year, the deduction should be allowed although the liability may have to be quantified and discharged at a future date.What should be certain is the incurring of the liability. It should be ...

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Validity of charge created against the property by mortgaging the property in favour of financial institutions by the borrower Assessee during pendency of any of the proceedings under the Income-tax Act, 1961

TRO Vs Industrial Finance Corpn. of India and Ors. (Gujarat High Court)

TRO v Industrial Finance Corpn. of India and Ors. (Gujrat HC)- The charges created against the property, by the mortgaging of the property by the assessee-borrower in favour of the financial institution during the pendency of any proceedings under the Income-tax Act, 1961, cannot be declared as void against any claim in respect of income ...

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Merely because assessee failed to prove the gift in the manner required by the department, it is not possible to conclude that assessee concealed her income

CIT Vs Kokilaben A Shah (Gujarat High Court)

CIT v Kokilaben A Shah (Gujrat HC) - Tribunal observed that gift was received through normal banking channel. Identity of donor was disclosed and established. Assessee had furnished complete details of the gift. Tribunal noted that none of the departmental authorities made any attempt to find out whether the explanation of the assessee wa...

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If assessee accepts loan to meet certain business contingencies no penalty could be imposed under s 271D for violation of s 269SS

CIT Vs. Volpak Securities Ltd. (Gujarat High Court)

CIT v Volpak Securities Ltd. (Gujrat High Court)- With respect to the portion of penalty, which the CIT [A] confirmed, the same was deleted by the Tribunal observing that the assessee was liable to make payment of Rs. 1,53,000/ on 23rd June 1997 in respect of mark-to-market settlement for which purpose Rs. 1,50,000/ was accepted from Shri...

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Assessee entitled to benefit of section 11 even if certain grant is received from Government for specific purpose but purpose not stated expressly to set up a corpus fund

CIT Vs Gujarat Safai Kamdar Vikas Nigam (Gujarat High Court)

CIT v Gujarat Safai Kamdar Vikas Nigam (High Court of Gujarat at Ahmedabad) - It was a scheme envisaged for implementation of certain Government programmes in particular, to uplift the living condition of manual scavengers and other Safai Kamdars involved in similar activities. Though exact words may not have been used that the funds mad...

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Recording of satisfaction necessary for CIT before rejection of assessee’s application for waiver of Interest and Penalty

Shayama Sanjay Shah Vs CIT (Gujrat High Court)

Shayama Sanjay Shah v CIT (Gujrat High Court) - Though it is true that powers under section 273A of the Act are discretionary powers, it is equally true that powers conferred under a statute are required to be exercised in consonance with the provisions of the said statute. In the present case, as discussed hereinabove, the Commissioner i...

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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

Aayojan Developers Vs ITO (Gujarat High Court)

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 suppo...

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Penalty under s 271FA is leviable if the assessee fails to respond to the notice for failure of filing annual information return

Patan Nagrik Sahakari Bank Ltd Vs DIT(CIB) (Gujarat High Court)

Penalty under s 271FA – Failure to file annual information return — The penalty under s 271FA is leviable if the assessee fails to respond to the notice for failure of filing annual information return — as held by Gujrat High Court in Patan Nagrik Sahakari Bank Ltd v DIT(CIB); Special Civil Application No. 14675 of 2010, 22 April 20...

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Certificate under s 68(2) of Finance Act, 1997 cannot be issued if the assessee fails to deposit tax within the stipulated period provided under the VDIS Scheme

Kalpesh Ratilal Kalathia Vs CIT (Gujarat High Court)

Kalpesh Ratilal Kalathia v CIT- Following the course of action adopted by the Supreme Court in the aforesaid decision, having held that the petitioner is not entitled to the benefit of the Scheme since the payment was not made in terms of the Scheme, the respondent authority is directed to either refund or adjust the amount of Rs.4,74,584...

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Section 14A disallowance – Revenue cannot dictate assessee that how the assessee should use its own fund

CIT Vs. Gujarat Power Corporation Ltd. (Gujarat High Court)

CIT vs. Gujarat Power Corporation Ltd (Gujarat High Court) - Assessee is fully justified in arranging its affairs in such a manner where his tax liability is reduced provided the assessee does not resort to any illegal means or enter into a sham transaction for the said purpose. It is the prerogative of the assessee to use its own fund in...

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Despite Loan at High Rate of Interest, Share capital Gain can not be treated as Business Profit

Commissioner Of Income Tax-I Vs Niraj Amidhar Surti (Gujarat High Court)

Merely because the shares had been purchased from borrowed funds obtained on high rate of interest would not change the nature of the transaction from investment to one in the nature of an “adventure in the nature of trade....

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When assessee commits default under a bona fide belief which is rectified by filing a revised return, it cannot be held liable for penalty under section 271(1)(c)

CIT Vs. Backbone Enterprises (Gujarat High Court)

In the light of the concurrent findings recorded by Commissioner (Appeals) as well as the Tribunal, it is apparent that the assessee had bona fide made a claim for deduction under section 80IA of the Act, which came to be rectified by filing a revised return withdrawing the claim and that as such there was no concealment or furnishing of ...

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Expenses incurred for setting up of a new unit in expansion of an existing business are allowable as revenue expenses

CIT Vs. Ghanashyam Steel Work Ltd. (Gujarat High Court)

Where the so called new unit set up by the assessee was merely an expansion of its existing business and was not setting up of a new business, the expenses incurred in that regard were allowable as revenue expenses....

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Application by the taxpayer to seek normal appellate remedy does not tantamount to withdrawal of DRP application

AIA Engineering Ltd Vs. Dispute Resolution Panel (Gujarat High Court)

Hon’ble Gujarat High Court (HC) held that the application made by the taxpayer before the DRP seeking its consent to approach the Assessing Officer (AO), requesting him to finalise the draft assessment order passed under Section 144C(1) of the Income-tax Act, 1961 so as to enable it to file an appeal before the CIT(A), does not tantamou...

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Constitutional validity of MAT provisions relating to set-off of lower of unabsorbed brought forward business loss and unabsorbed depreciation

Cairn Exploration (No. 7) Ltd. Vs. U01 (Gujarat High Court) [2010-TII-19-HC-AHM-INTL]-

It was held that clause (iii) of Explanation 1 to section 115JB of the Income-tax Act, 1961 ("the Act") cannot be said to be discriminatory and hence unconstitutional. This clause relates to set-off of unabsorbed business loss or unabsorbed depreciation, whichever is lower. The HC also held that the approach of reading down a provision by...

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Gujarat High Court decision on the demerger scheme between Vodafone Essar group companies

Vodafone Essar Gujarat Ltd. (Gujarat High Court)

In a recent ruling Gujarat High Court (HC) in the case of Vodafone Essar Gujarat Ltd (hereinafter referred to as VEG/ Transferor/ Tax Payer) [Company petition no. 183 of 2009] on the issue of whether a scheme of demerger of infrastructure assets between group companies for 'Nil' consideration could be sanctioned under the provisions of t...

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Reassessment beyond four years on the basis of retrospective amendment not justified

Sadbhav Engineering Ltd. Vs. DCIT (OSD) (Gujarat High Court)

Reopening of tax assessment beyond four years on the basis of a retrospective amendment is not justified, if the assessee has fully and truly disclosed all the material facts necessary during the original assessment proceedings...

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Commissioner of Central Excise and Customs Versus Genus Electrotech Limited (Gujrat High Court)

Commissioner of Central Excise and Customs Vs Genus Electrotech Limited (Gujarat High Court)

The respondent can reverse the CENVAT credit availed on capital goods treating it as undesirable credit to claim depreciation under Section 32 of the Income Tax Act, 1962, and pay duty from PLA otherwise payable after exhausting CENVAT Credit balance thereby claiming refund of the same under Notification No.39/2001-CE dated 31.07.2001....

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Service tax Penalty – Section 80 does not provide for reducing the penalty under Section 76 below the prescribed minimum

Commissioner, Central Excise & Customs Vs Port Officer (Gujarat High Court)

A plain reading of Section 76 of the Act indicates that a person who is liable to pay service tax and who has failed to pay such tax is under an obligation to pay, in addition to the tax so payable and interest on such tax, a penalty for such failure. The quantum of penalty has been specified in the provision by laying down the minimum an...

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The liability to pay sales tax by instalments cannot be treated to be beyond the provisions of section 43B of the Act

Saurashtra Cement Limited Vs The Commissioner of Income Tax (Gujarat High Court)

Whether the liability has been deferred or not has to be considered not from the simplistic point of the term 'defer' but in context of the incentive scheme for deferral, as is evident from the circular issued by Central Board of Direct Taxes. The subject matter of Circular no.496 dated 25th September, 1987 is Sales Tax Deferral Scheme an...

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SCN issued beyond six month period from knowledge date is barred by limitation

Commissioner of Central Excise Surat- I Vs Neminath Fabrics Pvt. Ltd. (Gujarat High Court)

In the facts of the present case the record indicates that the Director of the respondent has admitted shortage of Grey fabrics as well as illicit clearance thereof without issuance of central excise invoices or any other duty paying documents, without payment of central excise duty and without entering in the Daily Stock Account Register...

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Absence of reason for modification in Penalty order by tribunal will not make it Unjustifiable

CCE & C Vs S. M. VIJ (Gujarat High Court)

The present tax appeals have been field by the Commissioner of Central Excise & Customs, Surat -II under sec. 35-G of the Central Excise Act, 1944 proposing to raise the following substantial question of law : "Whether in the facts and circumstances of the case, the Tribunal has committed a substantial error of law in reducing the penalt...

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Revised return filed after intimation under section 143(1)(a) but within time limit–Duty of Assessing Officer to process

CIT Vs. Himgiri Foods Limited (Gujarat High Court)

CIT Vs Himgiri Foods Limited (Gujarat High Court)- On a plain reading of section 143(1B) it is apparent that the provision mandates that if after the issuance of intimation, a revised return is furnished by an assessee under sub-section (5) section 139 it is incumbent upon the Assessing Officer to process the revised return and amend the ...

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Rebate under Rule-18 on export made during 8.12.2006 to 17.9.2007

Welspun Gujarat Stahl Rohren Ltd & 1 Vs Union of India & 4 (Gujarat High Court)

The company being an unit located in Kutch District is entitled to the benefit of Notification No.39/2001-CE dated 8.7.2001. At the time of removal of the goods from the factory for export, the Company paid duty of excise as is evident from the statutory invoices issued by the Company. The Company accordingly applied for rebate under Rule...

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December 2020