HC explains ‘application of income’ vs. ‘diversion of income by overriding title’

PCIT Vs M/s. Chamundi Winery and Distillery (Karnataka High Court)  It is clear that the Courts and the Tax Authorities can look into the real purpose of the commercial arrangements and transactions to reach the truth and the transactions having the sole purpose of tax avoidance may be held to be having no effect on the actual tax liability of the tax payer. Thus, we feel that there is no need of multiplying the authorities and some of which we have discussed above, we are fortified in our view that in the present case, the entire income from manufacture and sale of Liquor in the present case...