Income Tax : Explore recent Supreme Court rulings (2023) on income tax issues. Highlights of key cases, analysis, and implications....
CA, CS, CMA : Discover the major changes in ITR forms for FY 2023-24 (AY 2024-2025). Highlights include new sections for retirement benefit acco...
Income Tax : Tax planning while setting up of a business with reference to location (2021-2022 A.Y, A.Y 2022-2023 , A.Y 2023-2024 and A.Y 202...
Income Tax : Recently, I was approached by a Builder Group seeking a number of clarifications, in respect of the incentive granted U/S 80-IB(10...
Income Tax : Whether nearby cities which are in 25 km from municipality are to be considered at par with metro cities for FY 2016-17? Solution:...
Income Tax : The office of the Comptroller & Auditor General (C & AG) conducts compliance as well as performance audit relating to specific are...
Income Tax : The CBDT did not have any established mechanism to assess the impact of revenue foregone on account of deduction under section 80 ...
Income Tax : Industry chamber Assocham today asked the government to re-introduce the tax exemption scheme to promote affordable housing in the...
Income Tax : Section 80-IB (10) of the Act is aimed at promoting construction of housing projects, so as to address the problem of shortage of ...
Income Tax : Sushanto Roy, CEO, Sahara Prime City, has in a pre-Budget wish list of expectations said: "Given the pent-up demand for affordable...
Income Tax : The issue was whether deduction under Section 80P is allowed when return is filed late. ITAT held that post-2018 amendment, deduct...
Income Tax : The Court held that failure to prove identity and source of creditors attracts Section 68. Such unexplained credits cannot be trea...
Income Tax : The court held that deduction under Section 80P cannot be granted where no return of income is filed. The key takeaway is that cla...
Income Tax : The Court held that losses already set off in earlier years cannot be notionally carried forward for computing deduction under Sec...
Income Tax : The Tribunal held that non-filing of Form 10CCB along with return is a curable defect. A genuine start-up cannot be denied deducti...
Income Tax : It is a settled position that revenue subsidies received from the Government towards reimbursement of cost of production/manufactu...
Income Tax : Notification No. 2/2011 - Income Tax In the notification of the Government of India in the Ministry of Finance, Department of Rev...
Income Tax : Notification No. 01/2011- Income Tax In exercise of the powers conferred by clauses (a) and (b) of sub-section (10) of section 80-...
Income Tax : Notification No. 67/2010 - Income Tax In exercise of the powers conferred by the proviso to Clause (a) and (b) of sub-section (10)...
Income Tax : Instruction No. 4/2009, dated 30-6-2009 Under sub-section (10) of section 80-IB an undertaking developing and building housing pro...
For the purposes of Section 80IB (10) it is not the mandate of the Section that the housing project must be on a vacant plot of land having minimum area of one acre and that where a new housing project is constructed on a plot of land having minimum area of one acre but with existing housing projects would qualify for Section 80IB (10) deduction.
CIT v. G.R. Developers Insofar as balconies are concerned, prior to 01.04.2005, the area covered by them has to be excluded in calculating the built-up area. As the housing project was approved on 14.06.2002 and in the said plan, all these balconies are shown and excluding those balconies, the construction put up is admittedly less than 1,500 sq. ft. After 01.04.2005, the authorities cannot add the balcony area to the built up area and deny the benefit to the assessee. Therefore, as the material on record discloses that all the 84 or 83 flats constructed are less than the 1,500 sq. ft., the assessee cannot be denied the benefit and taxed on the ground that it exceeds 1,500 sq. ft. Hence this question of law is answered in favour of the assessee and against the revenue.
Keeping in mind the fact that obstacles were put in assessees getting the benefit, the Legislature introduced the definition of built-up area in sub-section (14)(a) of section 80-IB. From a reading of the definition of built-up area, the intention is clear. In calculating the built-up area it is only the inner measurements of the residential unit on the floor level, which has to be taken into consideration. If there are any projections and balconies and if it exclusively belongs to the residential units, then that also has to be taken into consideration for deciding the built-up area.
ITO Vs. Hindustan Oil Exploration Co. Ltd. (ITAT Mumbai)- Definition given in Explanation to sec. 42, section 293A as well as in various clauses of Production Sharing Contract it does not require to undergo any process of any physical or composition change but after the process of separation of gas, water and other sedimentary elements become commercial commodity. Therefore, commercial production of mineral oil as per sec. 80IB (9) involves the activity of extracting oil from underneath of surface and transport it for sale and nothing else.
Praveen Soni vs Commissioner Of Income Tax (Delhi HC) – On the above issue, the Delhi High Court held that the provisions of section 80-IB nowhere stipulated a condition that the claim for deduction under this section had to be made from the first year of qualification of deduction failing which the claim will not be allowed in the remaining years of eligibility. Therefore, the deduction under section 80-IB should be allowed to the assessee for the remaining years up to the period for which his entitlement would accrue, provided the conditions mentioned under section 80-IB are fulfilled.
CIT v. Chiranjjeevi Wind Energy Ltd. (2011) 333 ITR 192 (Madras High Court)- The Supreme Court, in India Cine Agencies v. CIT(2009) 308 ITR 98, laid down that the test to determine whether a particular activity amounts to “manufacture” or not is whether new and different goods emerge having distinctive name, use and character. Further, the Supreme Court, in CIT v. Sesa Goa Ltd. (2004) 271 ITR 331, observed that the word “production” or “produce” when used in comparison with the word “manufacture” means bringing into existence new goods by a process, which may or may not amount to manufacture. It also takes in all the by-products, intermediate products and residual products, which emerge in the course of manufacture of goods.
CIT v. Meghalaya Steels Ltd. (2011) 332 ITR 91 (Gauhati High Court) -The Supreme Court, in Liberty India v. CIT [2009] 317 ITR 218, observed that section 80-IB provides for deduction in respect of profits and gains “derived from the business” of the assessee and accordingly, the Parliament intended to cover sources of profits and gains not beyond the first degree. There should be a direct nexus between the generation of profits and gains and the source of profits and gains, the latter being directly relatable to the business of the assessee. Any other source, not falling within the first degree, can only be considered as ancillary to the business of the assessee.
M/s Diamond Tool Industries Vs. JCIT (ITAT Mumbai)- Gauhati High Court in the case of Meghalaya Steels Ltd. (supra) after considering the decision of Hon’ble Supreme Court in the case of Liberty India (supra) has held that Central Excise Duty has a direct nexus with the manufacturing activity and similarly the refund of the Central Excise duty also had a direct nexus with the manufacturing activity. The issue of payment of Central Excise Duty would not arise in the absence of any industrial activity.
CIT vs. Jyoti Plastic Works Pvt Ltd (Bombay High Court) – under Section 80IB(2)(iv) what is relevant is the employment of ten or more workers and not the mode and the manner in which the said workers are employed by the assessee. In other words, irrespective of the terms of employment, condition of Section 80IB(2)(iv) would stand fulfilled if the assessee in aggregate employs ten or more workers in its manufacturing activity. The fact that the employer – employee relationship between the workers employed by the assessee differs cannot be a ground to deny deduction under Section 80IB of the Act, so long as the workers employed by the assessee in aggregate exceed ten in number.
ITO Vs Millenium Writing Products Pvt Ltd. (ITAT Kolkata) Deduction u/s. 80IB of the Act is available to an assessee whose gross total income includes any profits and gains derived from eligible business as specified in the section. Here the assessee is claiming deduction on an item of disallowance made by the Assessing Officer on account of employees’ contribution to PF, which was not deposited within the due date. This is neither an item of profit or gain of eligible business nor an item of Profit & Loss Account or manufacturing account rather it is just an employees’ contribution to PF, which assessee has to collect from its employees and to deposit with the PF authorities within the due date prescribed.
