In the instant case, admittedly, sale deed was executed in favour of the respondent-director in the year 1989, while purchasing the land on behalf of the company. The property was mortgaged by the respondent-director in his individual capacity. The parties also came to know about the property being in the name of the respondent-director, when the suit was filed and got settled by respondent-director by redeeming the property.
Subsequently, a tripartite agreement was entered into on 27.10.1994 between the vendors P. Srinivsan, R. Dhanapal, T.T.V. Dhinakaran T.R. Harikrishnan G. Balasundaram, R. Annamalai, K. Sadagopal and M.K. Saravanan represented by the Power of Attorney M/s. Emerald Promoters Pvt. Ltd., who in turn also appeared as a confirming party and M/s. Sudsun Housing I Ltd. as a purchaser, wherein the above said vendors agreed to convey the balance of 83.96% undivided share of the lands in favour of the purchaser.
It cannot be said that all tax planning is illegal/ illegitimate/impermissible. Applying the rationale of this decision to the case on hand, in the absence of any material to pronounce on the genuineness of the transaction herein, the mere fact that what had been purchased had been leased out to the vendor or that vendor had undertaken to pay the hire charges on behalf of the assessee to the hire purchase company, per se, cannot lead to a conclusion that the transaction is a sham one. In the circumstances, even invoking the decision in McDowell case, we do not find any ground to accept the plea of the Revenue that the claim of the assessee has to be rejected as a sham one.
SUMMARY OF MISTAKES IN THE CA FINAL NOVEMBER 2011 EXAMS CONDUCTED BY INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA (A BODY ESTABLISHED UNDER THE ACT OF PARLIAMENT) (Mistakes /Errors committed by respondent 2 while setting and evaluating the papers which would have a direct impact on the marks obtained by the students)
the assessee had not obtained any depreciation after the asset became an asset of the partnership firm constituted under the deed dated June 16, 1977. In this context reference may usefully be made to the decision of the Calcutta High Court in the case of CIT v. Bhupender Singh Atwal [1983] 140 ITR 928, delivered by Sabyasachi Mukharji J., as he then was, who, speaking for the Bench, held that after an asset has become the property of a new firm the cost of acquisition by the firm is to be taken into account for computing the capital gains, and not the written down value of the asset on the date of dissolution of the old firm. Section 50 would only apply to the cases where the assessee had obtained the depreciation.
Section 50 of the Income-tax Act, 1961 – Capital gains – Computation of, in case of depreciable assets – Assessment year 1994-95 – Whether for purpose of section 50(2), where 100 per cent depreciation had been allowed on assets, whole of amount received by assessee on sale of those depreciated assets is required to be treated as capital gain arising from transfer of short-term capital assets – Held, yes
A.K. Balaji Vs. GOI (Madras High Court)- This writ petition has been filed under Article 226 of the Constitution of India for the issuance of a Writ of Mandamus directing the respondents to take appropriate action against respondents or any other Foreign Law Firm or Foreign Lawyers, who are illegally practising the Profession of Law in India, and for a further direction to forbear them from having any legal practice either on the litigation side or in the field of non-litigation and commercial transactions, in any manner whatsoever within the territory of India.
Iskraemeco Regent Ltd. v. CIT (Madras High Court) The assessee company, engaged in the business of development, manufacturing and marketing of electro-mechanical and static energy meters, took a bank loan for purchase of capital assets. The grant of bank loan for purchase of a capital asset is a capital receipt and not a trading receipt. The provisions of section 41(1) are attracted only in case of remission of a trading liability. Since the loan was taken for purchase of capital assets, waiver of a portion of principal would not amount to remission of a trading liability to attract the provisions of section 41(1). Further, such waiver cannot be treated as a benefit arising out of business and consequently, section 28(iv) will not apply in respect of such loan transaction.
CIT v. Chiranjjeevi Wind Energy Ltd. (2011) 333 ITR 192 (Madras High Court)- The Supreme Court, in India Cine Agencies v. CIT(2009) 308 ITR 98, laid down that the test to determine whether a particular activity amounts to “manufacture” or not is whether new and different goods emerge having distinctive name, use and character. Further, the Supreme Court, in CIT v. Sesa Goa Ltd. (2004) 271 ITR 331, observed that the word “production” or “produce” when used in comparison with the word “manufacture” means bringing into existence new goods by a process, which may or may not amount to manufacture. It also takes in all the by-products, intermediate products and residual products, which emerge in the course of manufacture of goods.
The first respondent filed a claim petition before the second respondent seeking payment of gratuity for the period, which he has rendered services to the petitioner’s lorry transport, from 01.04.1991 to 19.04.2007, on which date he had voluntarily stopped himself from services. He claimed gratuity for a period of 10 years and a monthly salary of Rs.3,600/-. The total gratuity claim was Rs.28,800/-. The said application filed by the first respondent was taken on file by the second respondent as P.G.No.90 of 2007 and notice was issued to the petitioner.
