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Spytech Buildcon v. ACIT, Circle-6, Jaipur (Jaipur – Tribunal)

Section involved – Section 43CA of Income Tax Act, 1961

Decision – In favour of Revenue

Proposition – Transfer under provisions of section 43CA is recognized only when a registered document is executed. Even if the agreement of sale is entered before provisions of Section 43CA came into force but such agreement is executed after Section 43CA came into force, then Section 43CA is applicable and Stamp Duty Value (SDV) shall be taken as sales consideration for computation of business income if SDV exceeds actual sale consideration.

Landmark Judgments on important aspects of Income Tax Act, 1961

Commissioner of Income Tax, Salem v. Angels Educational Trust (High Court of Madras)

Section involved – Section 12AA of Income Tax Act, 1961

Decision – In favour of assessee

Proposition – Assessee was a trust established for educational purposes. It filed an application for registration under section 12AA. Commissioner noted that income of assessee for four financial years was in excess of expenditure. Thus, he concluded that trust was established with a clear motive of earning profits. Accordingly, he rejected application for registration filed by assessee. High Court held that excess of income over expenditure is not a sole ground to hold that assessee-trust was not engaged in charitable activities and was established with a motive of earning profits. Excess of income over expenditure is not the sole ground for rejection of application under Section 12AA and assessee-trust is eligible for registration as charitable trust.

Sesa Goa Ltd. v. Joint Commissioner of Income-tax, Range 1, Panaji Goa (High Court of Bombay)

Section involved – Section 40(a)(ii) of Income Tax Act, 1961

Decision – In favour of assessee

Proposition – Education Cess and Higher and Secondary Education Cess paid on business income are eligible for deduction while computing income chargeable under head of ‘profits and gains of business or profession’. The word “cess” does not come within the ambit of the expression “any rate or tax levied” appearing in Section 40(a)(ii) of Income Tax Act, 1961. Consequently cess paid in relation to business income is allowable as deduction while computing said business income.

Kohinoor Indian (P.) Ltd. v. Assistant Commissioner of Income-tax, Circle-1

Section involved – Section 32 of Income Tax Act, 1961

Decision – In favour of Revenue

Proposition – Depreciation @15% is applicable on iPad. iPad is not eligible to depreciation@40% which is applicable to computer. The reason being, iPad is not a computer. Predominate purpose of iPad is a communication and not a computing device as its main features are email, whatsapp, Facetime calls, calls, music, films etc. Though iPad may discharge some functions of computers, it is not a substitution of computer/laptop, which have various utilities/functions, though some functions may be common with iPad. In common parlance also, iPad is considered as communicating device with some additional features of computer and lastly Apple store do not sell iPad as computer device rather it is selling it as communicating/entertainment device.

Abeezar Faizullabhoy v. Commissioner of Income tax (Appeals)-28, Maharashtra

Section involved – Section 24(b) of Income Tax Act, 1961

Decision – In favour of assessee

Proposition – An assessee shall be entitled to claim deduction of any interest payable on capital borrowed by him for acquiring, constructing, repairing, renewing or reconstructing a property for claiming deduction of interest under section 24(b) and there is neither any precondition nor any eligibility criteria prescribed that assessee should have taken possession of property so purchased or acquired by him.


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July 2024