Before answering the first question viz., as to whether the interest income of the assessee received from its corporate members on the investments of surplus funds as Fixed Deposits or Debentures etc., is exempted from tax on the concept of Mutuality, it will be worthwhile to refer to the principles laid down on the Doctrine of Mutuality in the decisions of the Hon’ble Supreme Court as well as some of the High Courts.
The assessee claimed deduction u/s 80-IB (10) which was rejected by the AO but allowed by the CIT (A). On appeal by the department, the Tribunal ruled against the assessee and held that it was not eligible for deduction. The assessee filed a MA u/s 254 (2) pointing out that it had cited a judgement of the Kolkota Bench of the Tribunal (which had been considered by the CIT (A)) and a judgement of the Kolkota High Court which had not been considered by the Tribunal when deciding the appeal and the same was a ‘mistake apparent from the record’.
It cannot be laid down as a proposition of law that once a petition is admitted, it could never be dismissed on the ground of alternative remedy; therefore, the High Court can entertain the plea whether the writ is maintainable on the ground of availability of alternative remedy, even after the writ petition was admitted and rule nisi was ordered
The First Respondent had filed a claim petition against the Petitioners before the arbitrator seeking a sum of over Rs.57 lakhs stated to be due under a hire-purchase agreement. The Petitioners raised a specific plea before the arbitrator that the claim petition was not maintainable as the first Petitioner had been declared a sick industrial company by the BIFR and that section 22 of SICA placed an embargo on the continuation of the arbitral proceedings against them.
Section 164 gets attracted only when the shares of the beneficiaries are unknown, which is manifest from the marginal heading of that section itself; so long as the trust deed gives the details of the beneficiaries and the description of the person who is to be benefited, the beneficiaries cannot be said to be uncertain, merely because wife/children cannot be known until the marriage and begetting of children by the stated beneficiaries.
CIT Vs. M/s K.G. Denim Ltd. (Madras HC) – The Assessing Officer is not entitled to touch the profit and loss account prepared by the assessee as per the provisions contained in the Companies Act, while arriving at the book profit under Section 115J and the book profit so arrived at should be the basis for taxation and therefore, the computation under Section 80HHC should be limited to the case of profits of eligible category only. The Tribunal has also come to the conclusion that in view of the non obstante clause available in Section 115JA it was clear that the provisions is a self-contained one and no other provision would have effect on it and thereby it was to be implemented as contained in the said provision.
The company in liquidation is entitled to invoke the provisions of section 171 of the Contract Act relating to general lien over the properties offered as security to cover all the loans availed by the owners’ POA and the claim of the owners seeking redemption of the title deeds in terms of section 91 of the Transfer of Property Act must yield to such right and consequently the right to claim redemption cannot be accepted.
The Appellant, a State level institution incorporated for the purpose of development of industries in the State, was an equity shareholder in the Third Respondent Company. The company was referred to the Board For Industrial Reconstruction (BIFR) for the purpose of framing a scheme for rehabilitation. The Board approved the draft revival scheme and circulated the scheme seeking suggestions and objections of the shareholders including the Appellant.
22. The primary function of the Income Tax Act is to bring the income of various kinds into the tax net. The Income Tax authorities are not concerned about the manner or means of acquiring income. The income might have been earned illegally or by resorting to unlawful means. Illegality tainted with the earning has no bearing on its taxability.
Since this appears to be the first case of its kind in India (subject to correction) where derivatives contracts are challenged as illegal and void and also since the jargon is not too familiar even to P.Ramanatha Iyer (of Law Lexicon) and Black (of Law Dictionary), a brief prelude has become necessary before we plunge into details.
