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Karnataka High Court

Profit arising to mediator from Purchase & sale of land to be taxed in his hands

October 14, 2012 1266 Views 0 comment Print

From statement of one of assessees, it is clear that in respect of 39.19 acres of land, the transaction is complete and the assessees have received full consideration from ‘N’ as per the MOU. Hence, the transaction in respect of 39.19 acres is completed and each of the assessees have got the income of Rs. 25,07,508 in the said transaction. Hence, the said amount has to be treated as income from the real estate and liable to be brought under tax.

Low Tax Effect Circular not applies to pending appeals – Karnatka HC

October 3, 2012 1009 Views 0 comment Print

When Clause 11 of the instruction No.3/11 dated 09.02.2011 issued by the Board, specifically says that it will be applicable to the cases filed on or after 9.2.2011, the courts holding that it is applicable to the pending cases is against the provision under Section 268A of the Act, Public Interest and the Public Policy.

AO should consider document provided by forest authority for determining FMV of trees as on 1-4-1981

September 24, 2012 870 Views 0 comment Print

Insofar as eucalyptus and other trees are concerned, the cost of acquisition on the basis of the judgment of the Kerala High Court made in Pullengode Rubbers & Produce Co. Ltd. case, (supra) the capital gain was worked out at 30% of the sale proceeds. The Assessing Officer rejected the appellant’s method of arriving at the cost of rosewood and silver oak trees relying upon the judgment of the Kerala High Court, uniformly m respect of rosewood, silver oak, eucalyptus and other trees.

Commission to partner not authorised by partnership deed is not deductible

September 24, 2012 11539 Views 0 comment Print

A partner is not entitled to receive remuneration for taking part in the conduct of the business under section 13 of the Partnership Act. This rule is subject to the contract to the contrary. In other words, if there is a contract between partners to receive remuneration for taking part in the conduct of the business, this rule is not applicable. Section 40(b) recognizes this rule. It provides for making payment to a partner subject to the condition mentioned therein being fulfilled. The said conditions are:-

Subsidy towards power generation plant is to be reduced from actual cost of plant for allowing depreciation u/s. 32

August 31, 2012 1555 Views 0 comment Print

According to Explanation 10 and proviso to sub-section (1) of section 43, the subsidy amount shall be deducted in the actual cost of the asset of the assessee. Thus, the contention of the assessee that the subsidy received towards the power generation plant would not be reduced from the actual cost of the assets was not correct.

No Section 54 exemption If assessee himself demolishes building before sale

August 28, 2012 3210 Views 0 comment Print

As per the Development Agreement entered into between the parties, the assessee and his brothers have demolished the existing residential building and handed over the vacant space to an extent of 16800 sq ft. to the Developer for construction of the apartment. Since the residential building has already been demolished by the assessee and his brothers themselves, they are not entitled to claim benefit under section 54 of the Act.

Income from solitary sale of shares is not business income

August 23, 2012 1228 Views 0 comment Print

To implement the objects of the company two of the shareholders gifted 25000 shares of M/s. Infosys Technologies Limited. The said shares were shown as investment. Merely because the company has earned profits by selling some of the shares, that doesn’t mean that the company is engaged in shares trading.

Exemption U/s. Sec. 54EA available if initial amount received in kind is eventually invested

August 16, 2012 5706 Views 0 comment Print

Reading of section 54EA of the Act makes it very clear that in case, the whole or any part of the net consideration of sale is invested in Specified Securities within a period of six months after the date of transfer, the deduction under section 54EA is available. The Net Consideration has been defined in Explanation to section 54EA of the Act.

AO’s power u/s. 142A to refer matter to valuation officer to estimate cost of construction

August 13, 2012 2274 Views 0 comment Print

In view of the amendment to the IT Act, the Assessing Officer has got power to refer the matter to the DVO for the purpose of valuation. Further, the Tribunal has committed an error in holding that CPWD rates adopted by the DVO were not correct without assigning any reason to arrive at such a conclusion. Hence, the order passed by the Tribunal cannot be sustained.

Mere suppression of turnover do not lead to taxable income in the head of Assessee

August 8, 2012 5974 Views 0 comment Print

The suppression of turnover is different from the suppression of income. If there is suppression of turn-over, there is liability to pay excise duty. Merely because the excise duty is paid, there is no presumption that it leads to taxable income in the hands of the assessee. The tax under the Income Tax Act is payable for the income in excess of the limit prescribed under the Act.

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