The Sick Industrial Companies (Special Provisions) Act, 1985 is a Central Act having legal sanctity. It has got overriding effect on any other provisions of any other Act except the provisions of FERA 1973 and Urban Land (Ceiling Act & Regulation) Act, 1976. Therefore, the directions of the BIFR have to be honoured and failure of such directions will bring legal disharmony.
Section 50C of the Act is a deeming provision and ostensibly involves creation of an additional tax liability on the assessee and, therefore, notwithstanding the presence of the expression ‘may’ in section 50C(2)(a), the Assessing Officer in the instant case (where assessee had claimed in his return itself that stamp duty values exceeds FMV) ought to have referred the matter to the Valuation Officer for ascertaining the value of the capital asset in question.
It is a fact that the inaccuracy involved in instant case is of Rs. 124.04 lakhs which works out to nearly 6 per cent of the profits and the assessee describes the same as trivial and ignorable. Stand of revenue in this regard is that the Assessing Officer has only to establish the inaccuracy in the books of account maintained by the assessee and the triviality or otherwise is not the issue. The provisions are clear that in principle the Assessing Officer can assume jurisdiction under section 145 either for the reasoning of the ‘incompleteness of the books or for the reasoning of the inaccuracy of the same.
Hon’ble Supreme Court in the case of Para Laminates (P.) Ltd.’s held that the Tribunal is entitled to exercise all incidental and ancillary powers which are reasonably necessary for performing the adjudicative functions. Applying the aforesaid principles, it clearly follows that it was obligatory on the part of the I.T. authority to effect service of notice of hearing on the assessee since the service could not be effected by post at the address given by the revenue in the memorandum of appeal.
The Hon’ble Gujarat High Court in the case of N.N. Desai Charitable Trust (supra) while deliberating upon the scope of enquiry for the purpose of granting of recognition u/s.80G of the Act opined that it does not envisage the commissioner to act as an assessing authority because the actual assessment of institution would not ultimately effect the claim for deduction u/s. 80G qua the donors.
In the case of CIT Vs. SPL’s Siddharth Ltd. (Supra), before the Hon’ble Delhi High Court, the facts were that notice issued by the A.O u/s. 147 r.w.s 148 of the Act for re-opening the assessment for the A.Y. 2002-03 was set aside by the Tribunal on the ground that the requisite approval of Addl. Commissioner of Income Tax, which is mandatorily required, was not taken.
Requirement of section 54EC to the effect that investment in specified assets is to be made within a period of six months from the date of transfer, was put to some clarification by the CBDT in Circular No 791 (supra). The question arose before the CBDT regarding exemption of a long term capital asset which had arisen on conversion of a capital asset into stock-in-trade.
There is no disagreement between the taxpayer and the AO that (a) in terms of the license agreement, the taxpayer has granted only right to use of a copyrighted article and not for the use of a copyright and (b) the copyright continue to remain with the CGI. The Special Bench of the Delhi Tribunal in the case of Motorola Inc has observed that if the payment was for a copyright, it was liable to be classified as ‘royalty’ under the Act as well as under the tax treaty.
In thie case ITAT held that the non-compete fees was in the nature of capital expenditure and entitled for depreciation as intangible asset under Section 32(1 )(ii) of the Act. ITAT followed the in view of the Chennai Tribunal’s decision in the case of Real Image Tech. Export turnover of Export Oriented Unit can be included in export turnover of business while determining deduction under Section 80HHC of the Income-tax Act
ACIT Vs. Symantec Software India P. Ltd. (ITAT Pune)- Based on the specific facts of the case, the Tribunal has reiterated that the fulfillment of the conditions of section 10A(2) is of utmost importance for claiming a deduction under section 10A. A reference to the new undertaking as expansion by the STPI would not dis-entitle the assessee from claiming a deduction under section 10A of the Act.
