Himachal Pradesh HC

HC penalises advocate for Professional Misconduct

Nirmla Devi Vs State of H.P. (Himchal Pradesh, Shimla High Court)

Nirmla Devi Vs State of H.P. (Himchal Pradesh, Shimla High Court) It is more than settled that practice of law is not akin to any other business or profession as it involves a dual duty – nay a primary duty to the Court and then a duty to the litigant with the privilege to address […]...

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Employee Who Retired on 31st not eligible to Increment due on 1st of Next Month

Hari Prakash Vs State of Himachal Pradesh & Ors. (Himachal Pradesh High Court)

Hari Prakash Vs State of Himachal Pradesh & Ors. (Himachal Pradesh High Court) The petitioner, a Junior Basic Teacher, with 01.03.1958 as his date of birth was due for superannuation on 29.02.2016. The date of his annual increment was 1st March of every year. He being a State awardee was granted an extension of one […]...

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Delayed Payment of Interest on Delayed Refund is Part of Principal Amount & Eligible for Interest u/s 244A

PCIT Vs Solan District Truck Operators Transport Co-op. Society (Himachal Pradesh High Court)

The issue under consideration is whether the delayed payment of interest on delayed refund becomes part of the principal amount will be eligible for interest under Section 244A?...

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Substantive input tax credit cannot be denied on procedural grounds

Jay Bee Industries Vs. Union of India (Himachal Pradesh High Court)

Jay Bee Industries Vs. Union of India (Himachal Pradesh High Court) It has been held that GST is a new progressive levy. One of the progressive ideal of GST is to avoid cascading taxes. GST Laws contemplate seamless flow of tax credits on all eligible inputs. The input tax credits in TRAN-1 are the credits […]...

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Delayed payment of interest on refund will be eligible for interest U/S 244A 

PCIT Vs Ambuja Darla Kashlog Mangoo Transport Co-operative Society (Himachal Pradesh HC)

In view of the ratio laid down by the Hon’ble Supreme Court in the judgment supra, the interest on the delayed refund becomes part of the principle amount and the delayed interest includes the interest for not refunding the principle amount...

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Notify Commissioner (Appeal) GST in Himachal Pradesh: HC

M/s Scott Edil Pharmacia Limited Vs Assistant Commissioner, State Taxes and Excise and others (Himachal Pradesh High Court)

Aggrieved party cannot be left remedy less merely because the State Government has not notified the Appellate Forum. The Writ Petition is accordingly disposed of with a direction to the Additional Chief Secretary-cum-Financial Commissioner, State Taxes and Excise, to notify the Appellate Forum within one week. ...

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Alternative remedy of statutory appeal must be availed before filing Writ in HC

M/s Austees Hydro Power & Construction Company (P) Ltd Vs Union of India and others (Himachal Pradesh HC)

Once the petitioner has got efficacious alternative remedy of statutory appeal, the same ought to have been availed by it before invoking the writ jurisdiction of this Court....

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HC explains concept of initial assessment year & substantial expansion U/s. 80-IC

Stovekraft India Vs. CIT (Himachal Pradesh High Court)

The moot issue involved in these appeals, inter alia, is as to whether an undertaking or an enterprise, established after 7th January, 2003, carrying out substantial expansion within specified window period, i.e. between 7.1.2003 and 1.4.2012, would be entitled to deduction on profits @ 100%, under Section 80-IC of the Income Tax Act. Als...

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No Respite to Himachal CM Virbhadra Singh from HC in Income Tax Case

Shri Virbhadra Singh (HUF) through its Karta Shri Virbhadra Singh Vs. Principal Commissioner of Income Tax (Himachal Pradesh High Court)

Section 263 confers sufficient powers upon the Commissioner to decide all issues of law, after recording its satisfaction that the order passed by the Assessing Officer is erroneous and prejudicial to the interest of the Revenue. ...

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Interest Tax on interest on securities / head office investment a/c not applicable before 14.3.1995

CIT Vs M/s H.P. State Co-operative Bank Ltd (Himachal Pradesh High Court at Shimla)

Interest on securities and interest on head office investment account was made chargeable pursuant to Board’s instructions No. 1923 dated 14.3.1995 and as such, this Court sees no occasion for assessee Bank to declare same in its profit and loss account, wherein it had declared interest of Rs. 39.98 Crores, on approved securities for th...

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Sec 2(29BA) Process of drawing wire of thinner gauge from thicker gauge would amount to manufacture

Commissioner of Income Tax Vs Pawan Agarwal and others (Himachal Pradesh High Court)

Himachal Pradesh High Court in the case of CIT vs. Pawan Agarwal and others that the activity of drawing wires of thinner gauges from wires and rods of thicker gauges amount to manufacture as the paper insulated wires ...

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Rejection of books of accounts merely for inconsistent GP ratio is bad in law: HC

CIT Vs M/s Swastik Food Products (Himachal Pradesh High Court)

The Hon'ble Himachal Pradesh High Court in the case of CIT vs. Swastik Foods held that the rejection of basis by merely expressing a doubt about the correctness of profit declared taking inconsistent GP ratio as basis cannot be a said to be rejection of books for incompleteness or incorrectness....

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Execution of outsourced transportation work by third parties without assistance of outsourcer is sub-contract liable to TDS

M/s Palam Gas Service Vs Commissioner of Income Tax (Himachal Pradesh High Court)

Himachal Pradesh High Court in the case of M/s Palam Gas Service Vs. CIT held that execution of outsourced transportation work without any assistance from the outsourcer is a clear case of sub-contracting making the person outsourcing his contract liable to deduct tax on the payments made to sub-contractors u/s 194C....

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Merely having same partners or employees doesn't mean that a new entity is formed by splitting of existing business

CIT Vs M/s Yash International Inc (Himachal Pradesh High Court)

The Hon'ble Himachal Pradesh High Court in the case of CIT vs. M/s Yash International Inc. held that the fact that the new firm has almost the same partners and some workers of existing firm shifted to new firm’s unit cannot make the new entity arising as result of splitting up of the existing one....

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Reversal of excess provision for doubtful debts deductible in book profit calculation

CIT Vs M/s Himachal Pradesh State Industrial Development Corporation Ltd. (Himachal Pradesh High Court)

High Court in the case of CIT vs. M/s Himachal Pradesh State Industrial Development Corporation Ltd. held that the excess provision for bad and doubtful debts written back by way of credit to Profit and Loss A/c is deductible while arriving at the book profits....

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Sec 80IB- Workers need to be employed for substantial period of time to satisfy minimum workers criteria

CIT Vs M/s Indus Cosmeceuticals (Himachal Pradesh High Court)

Himachal Pradesh High Court in the case of CIT vs. M/s Indus Cosmeceuticals held that the condition of employing atleast 10 workers as required to be complied with for claiming deduction u/s 80IB cannot be deemed to have complied by employing workers for a small part of year. ...

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Non-disclosure of precise material relied on transferring the case from one jurisdiction to other is against principles of natural justice

Anand Chauhan & Others Vs CIT (Himachal Pradesh High Court)

Himachal Pradesh High Court in the case of Anand Chauhan & others held that not providing assessee with the precise reason for transfer of his case from one jurisdiction to other amounts to violating the principles of natural justice as non-disclosure take away his right of putting forward his objections effectively....

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Assessee cannot be compelled to claim depreciation as Exp. 5 to Sec 32(1)(ii) is not retrospective

CIT Vs M/s Shree Triveni Foods (Himachal Pradesh High Court)

Himachal Pradesh High Court in the case of CIT vs. M/s Shree Triveni Foods held that the claim of depreciation for assessment years under dispute was not mandatory and therefore, the assessee could not be compelled to exercise the option as an obligation....

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TDS non-deduction notification has an automatic effect and deductor is not under an obligation to specifically apply for claiming it

Commissioner of Income Tax (TDS) Vs State Bank of Patiala, IT (Himachal Pradesh High Courts)

Himachal Pradesh High Court in the case of CIT vs. State Bank of Patiala held that the exemption notification issued by Central Govt. allowing non-deduction of TDS in case of certain deductees has an automatic effect as soon as the same is issued and there is no such requirement in the act to obliging deductor to specifically apply for av...

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Business information instrumental in carrying on newly acquired business and expense on such info eligible for depreciation

Commissioner of Income Tax Vs RFCL Ltd. (Himachal Pradesh High Court)

Himachal Pradesh High Court in the case of RFCL Limited vs. CIT held that the important business information acquired by assessee in the course of business purchase are intangible assets as the same are in the nature of business or commercial rights of similar nature on which the assessee is eligible to claim depreciation. ...

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Manufacturing of Route Marker entitled for deduction u/s 80IC as it’s covered in definition of manufacture – HC

CIT Vs Ms Megha Dadoo (Himachal Pradesh High Courts at shimla)

High Court held In the case of CIT vs. Ms Megha Dadoo that the product (Route Marker) produced by the assessee was commercially different from its raw material and also a commercially different product known in the market. ...

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AO can reject books of accounts if same not present a true view of accounts & not show correct income – HC

CIT Vs Rakesh Mahajan (Himachal Pradesh High Court at Shimla)

High Court held In the case of CIT vs. Rakesh Mahajan that the income or profits as ascertained and determined by the assessee himself cannot always be accepted as correct because it is the duty of the A.O. to consider whether the books disclose the true state of accounts and whether the correct ...

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S. 80-IB Process of conversion of limestone into lime and lime dust is a manufacturing process

Commissioner of Income-tax, Shimla Vs Smt. Supriya Gill (Himachal Pradesh High Court)

As far as conversion of limestone into limestone powder is concerned, The Apex Court has clearly held that the conversion into lime and lime dust or concrete by stone crushers can legitimately be considered to be a manufacturing process while the mere mining of limestone and marble and cutting the same would not be so considered. The obse...

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CBDT Circular disallowing expenditure on freebies to medical practitioners is valid

Confederation of Indian Pharmaceutical Industry (SSI) Vs . The Central Board of Direct Taxes (CBDT) (Himachal Pradesh High Court)

If the assessee satisfies the assessing authority that the expenditure is not in violation of the regulations framed by the medical council then it may legitimately claim a deduction, but it is for the assessee to satisfy the assessing officer that the expense is not in violation of the Medical Council Regulations referred to above....

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Employee & Employer’s contribution to PF /ESI fund allowable if Paid before Due Date of ROI

Commissioner of Income-tax, Shimla Vs Nipso Polyfabriks Ltd. (Himachal Pradesh High Court)

We are dealing with cases where though the amount was not deposited by the due date under the Welfare Acts, it was definitely deposited before furnishing the returns. We see no reason to make any distinction between the employees' contribution or the employers' contribution....

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Salary to wife cannot be allowed for mere possession of knowledge if the same is not been applied

Yashwant Chhajta Vs Deputy Commissioner of Income-tax (Himachal Pradesh High Court)

In the instant case, as noticed hereinabove, the assessee's wife though was in possession of technical qualification but the assessee was required to prove conclusively that his wife Smt. Nanda Chhajta was in fact looking after plans for execution work and was taking administrative decisions. ...

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Interest earned on deposits out of non-SLR funds is eligible for deduction u/s. 80P(2)(a)(i)

Commissioner of Income-tax, Shimla Vs Kangra Central Cooperative Bank Ltd. (Himachal Pradesh High Court)

There can be no dispute with the proposition that the word 'attributable' is much wider in scope than 'derived'. The Legislature has used the words 'attributable to' in conjunction with the phrase 'anyone or more of such activities'. The investment of the funds by the banks including the non-reserves was part of the banking activities si...

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If Assessment order Silent, Interest U/s. 234B cannot be charged in demand notice

Commissioner of Income-tax, Shimla Vs Ruchira Papers Ltd. (Himachal Pradesh High Court)

No doubt, payment of interest under Sections 234A, 234B and 234C is mandatory but it is for the Assessing Authority while passing the original assessment order or while passing the reassessment or rectification order to direct payment of interest. ...

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Mere pendency of writ petition should not disentitle petitioner from benefits flowing out of order under challenge

Delhi through its Secretary Vs Shakti Ram son of Shri Melar Ram, SS Gr III (ID-40881), (Himachal Pradesh High Court)

The facts, as disclosed from the record, in a nut-shell are that the original applicant was initially recruited as Supporting Staff Grade-I on 25.7.1979 by the 1st respondent and subsequently promoted as Supporting Staff Grade-II on 4.10.1996. In the meanwhile, he acquired matriculation qualification in the year 1995 while in service....

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Assessee can take credit in respect of inputs which are used in manufacture of exempted goods

Commissioner, Central Excise Vs M/s Ansysco (Himachal Pradesh High Court)

Whether a manufacturer is required to reverse/pay the amount equivalent to the CENVET credit taken by him in respect of inputs which are proved to have been used in the manufacture of goods which have been cleared under exemption from excise duty, in view of the specific provisions of Rule 6(1) of CENVAT Credit Rules, 2002 (now 2004) read...

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Wealth tax Payable on property deemed to be belonging to assessee

Commissioner of Wealth-tax Vs H.P. Small Industries & Export Corp. (Himachal Pradesh High Court)

The words 'belonging to' have to be read along with the Explanation of section 4 and under this Explanation the expression 'transfer' includes any agreement or arrangement. The assessee, in the instant case, was allotted the land by the State Government. It constructed sheds thereupon and rented out the same and derived income therefrom. ...

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Pre amendment Marketing board is not local authority U/s.10(20)

CIT Vs H.P. Marketing Board (Himachal High Court)

CIT Vs H.P. Marketing Board (Himachal High Court)- Marketing board is not a local authority within the meaning of section 10(20) prior to the amendment made in section 10(20) when the word `local authority' was not defined in the Income tax Act and the definition of `local authority' as defined in section 3(31) of the General Clause Act ...

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Unabsorbed depreciation for and up to AY 1996–1997 could be carried forward and set-off against income chargeable under any head of income in any subsequent year

CIT Vs Kriti Resorts Pvt. Ltd. (Himachal Pradesh High Court)

These appeals are being disposed of by a common judgement since all these appeals have been admitted on the following substantial questions of law...

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In group cases also, each single case must be taken up individually to decide the monetary limits for filing appeal before High Court

CIT Vs Steinle Machine Fabric India (Himachal Pradesh High Court)

CIT v Steinle Machine Fabric India - The Circular is specific that in group cases also, each single case must be taken up individually to decide the monetary limits. It appears that these instructions were issued to avoid unnecessary litigation and also litigation where the tax effect was much less and it waste time and money recovering s...

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Poultry Sheds used for the business of hatching constitutes ‘Plant’ for the purpose of depreciation under section 32

CIT Vs Shivalik Hatcheries Pvt. Ltd. (Himachal Pradesh High Court)

CIT v Shivalik Hatcheries Pvt. Ltd. - ITAT, on the basis of the material placed before it came to the conclusion that the building of the poultry shed has been specifically designed with a view to protect the birds from disease. It has been designed to ensure proper lighting and circulation of air; proper and scientific feeding arrangem...

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Circular specifying that partnership deed should specify the remuneration, is invalid

M/s Durga Dass Devki Nandan Vs. Income-tax Officer (Himachal Pradesh High Court)

M/s Durga Dass Devki Nandan vs. ITO (HP High Court) - The CBDT circular can only be held to be valid if it is in terms of the main section. As held above, the Section 40(b)(v) only lays down that either the working partner should be paid an amount specified in the partnership deed or it should not exceed the amount laid down in the Sectio...

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When assessee is engaged in business of buying and selling shares, profit or loss on such shares would be profit and loss of such business unless assessee establishes that shares in question were bought as a long term investment

Ankita Deposits and Advances Pvt. Ltd. Vs. CIT (Himachal Pradesh High Court)

In a case where a company is dealing in the sale and purchase of shares, prima-facie the profits derived from the sale and purchase of shares would be treated to be business income of the assessee since the assessee is a trader in shares, that does not mean that a trading firm cannot make long term investment in shares and income from sal...

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Transport subsidy received by an industrial undertaking under a scheme of Central Government is not eligible for deduction u/s 80-IA

Supriya Gill Vs CIT (Himachal Pradesh High Court)

Whether the ITAT was right in law in holding that Freight Subsidy received from the Govt. by the assessee is allowed to be included as profits derived from the industrial undertaking and eligible for deduction under Section 80- 1A of the Income Tax Act, 1961...

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Remuneration allowable even if Partnership not specifies remuneration payable to each individual working partner

CIT Vs. Anil Hardware Store (Himachal Pradesh High Court)

In a case where the partnership deed does not specify the remuneration payable to each individual working partner but lays down the manner of fixing the remuneration, would the assessee- firm be entitled to deduction in respect of remuneration paid to partners?...

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Society not liable to deduct TDS on payments made to the truck owners who are also members of the society

CIT Vs. Ambuja Darla Kashlog Mangu Transport Co-op. Society (Himachal Pradesh High Court)

The concept of sub-contract is intrinsically linked with section 194C(2); if there is no sub-contract then the person making payment is not liable to deduct tax at source even if payment is being made to a resident....

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Payment made to foreign company for outright purchase of plant and know-how cannot be considered as ‘Royalty’

CIT v. Maggronic Devices Pvt. Ltd. (Himachal Pradesh High Court)

Recently, the Himachal Pradesh High Court in the case of CIT v. Maggronic Devices Pvt. Ltd. [2009-TIOL-568-HC-HP-IT] held that payment made by the taxpayer to a Singapore company for outright purchase of plant and product knowhow cannot be considered as ‘Royalty’ within the provisions of the Income-tax Act, 1961. Accordingly, no tax w...

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Outright purchase of plant know-how in the form of technical / engineering data, design, drawings is not royalty subject to withholding taxes

CIT Vs. M/s Maggronic Devices Pvt Ltd. (Himachal Pradesh High Court)

Himachal Pradesh High Court holds that Outright purchase of plant knowhow in the form of technical / engineering data, design, drawings etc. is not royalty / fee for technical service, subject to withholding taxes ...

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No “succession of business” u/s. 170 even on 100% sale of shares

CIT, Shimla Vs Panchratan Hotels Pvt. Ltd, Manali (Himachal Pradesh High Court)

Even if it is accepted that by a transfer of shares u/s 2(47), there is a transfer in the right to use the capital assets of the company, still s. 170 is not attracted because there is no “transfer of business”. A company is a juristic person and owns the business. The share holders are not the owners of the company. By a transfer of ...

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