Ashwani Kumar v. Income-tax Officer (Punjab & Haryana High Court)
Section involved – Section 222 of Income Tax Act, 1961 read with Rules 57 and 58
Decision – In favour of Revenue
Facts of the case – Two shops of assessee were attached for recovery of tax payable by assessee. The shops were auctioned to one auction purchaser who paid only 25% of total auction amount and did not pay balance amount. Accordingly, auction failed and said amount of 25% was forfeited to account of Government.
Proposition – As per Rules 57 and 58 of Second Schedule, if auction purchaser did not pay the balance amount of installment and auction fails and property is required to be resold for recovery of tax then amount already paid is to be forfeited to Government and not credited to the account of assessee. The reason being, in case reauction is successful then assessee would have benefit of sale proceeds.
Tata Securities Limited v. Deputy Commissioner of Income-tax (ITAT Mumbai)
Section involved – Section 36(1)(v) of Income Tax Act,1961
Decision – In favour of Assessee
Facts of the case – Assessee paid certain amount towards a gratuity scheme benefit of its employees and applied for approval of gratuity scheme. There had been inordinate and unacceptable delay in disposing of assessee’s application seeking approval of gratuity scheme.
Proposition – Non-approval of said scheme even after more than 7 years, would not disentitle assessee to claim deduction and assessee would be eligible to claim deduction of contribution made towards gratuity fund of employees.
Commissioner of Income-tax Corporate Circle 3, Chennai v. Thiru Arooran Sugar Ltd. (High Court of Madras)
Section Involved – Section 37 of Income Tax Act,1961
Decision – In favour of Assessee
Proposition – One-time payment made by assessee towards pre-payment premium and interest compense to banks for agreeing to reduce rate of interest on loan pursuant to Corporate Debt Restructuring is a revenue expenditure and is allowed deduction while computing business income.
Babubhai Arjanbhai Kanani (HUF) v. Deputy Commissioner of Income-tax (ITAT Surat)
Section Involved – Section 54B of Income Tax Act,1961
Decision – In favour of Assessee
Facts of the case – Assessee-HUF sold an agricultural land and out of sale proceeds purchased another agricultural land. Accordingly, it claimed deduction under Section 54B. Same was disallowed by Assessing Officer on ground that new land was purchased by assessee in name of individual coparcener of HUF.
Proposition – When new land was purchased out of funds of Assessee-HUF and was shown in books of account of HUF and HUF was doing agricultural activities then Assessee-HUF could not be denied deduction under Section 54B merely because new land was registered in name of coparcener of HUF.
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