CCE vs. Punjab Fibres (Supreme Court) – In the context of s. 35 of the Excise Act, held (1) Where the statute confers on the authority concerned a limited power of condonation of delay or does not provide any such power, the authority has no power to condone delay beyond the prescribed period; (2) unless a new statute expressly or by necessary implication says so, it will not be presumed that it deprives a person of an accrued right. On the ther hand, a law which is procedural in nature, and does not affect the rights, is retrospectively applicable;
Munjal Sales vs. CIT (Supreme Court) – (i) A firm seeking to claim deduction of interest paid on capital from its partners has to first satisfy the requirements of s. 36(1)(iii) and thereafter the limits imposed by s. 40(b)(iv). The fact that the said capital is not loans or advances is irrelevant.
Imagic Creative (P.) Ltd. v. Commissioner of Commercial Taxes Payments of service tax as also the VAT are mutually exclusive. Therefore, they should be held to be applicable having regard to the respective parameters of service tax and the sales tax as envisaged in a composite contract as contradistinguished from an indivisible contract. It may consist of different elements providing for attracting different nature of levy. It was, therefore, difficult to hold that in a case of instant nature, sales tax would be payable on the value of the entire contract, irrespective of the element of service provided. The approach of the assessing authority, thus, appeared to be correct.
ITO vs. Ellora Silk Mills (ITAT Mumbai) – Where the AO had accepted in the past that the warehousing charges received by the assessee was business income, he was not justified in reopening the assessment to assess the charges as property income in the absense of any change in the facts and circumstances.
Rupee Finance vs. ACIT (ITAT Mumbai) The contention of the assessee that the sales of shares by certain companies are not transfers as they are part of a family arrangement cannot be accepted as the company’s assets are different from the family assets. It is a distinct juristic entity and its assets cannot be mixed up with the assets of a shareholder. The corporate veil cannot be lifted and it cannot be assumed that the assets of the controlled companies are the assets of the family members; The mere fact that the transferor has received less than the market value of the asset does not mean that he can be assessed on the basis of the FMV In the absense of evidence to show that he has received more than the stated consideration.
1. Hasan Ali Khan vs. ITSC (Bombay High Court) – (i) The Chairman of the Settlement Commission has the power to constitute a Special Bench and he is not required to give reasons or produce the material in support thereof. (ii) It is not as if the moment an application is made and there is compliance of the requirements of Section 245-D that the Commission is bound to entertain the application and allow it. The Commission has then to consider whether the application is invalid under Section 245-D(2C). The Settlement Commission can treat the application as invalid meaning thereby non – est if the Applicant has not made a true and full disclosure and further must disclose how the income has been derived. If on the material it arrives at a conclusion even prima facie that there was no true and full disclosure it has then the right to declare the application as invalid.
Interest paid on borrowings made for purchase of capital assets “not put to use” in the concerned financial year is eligible for income tax deductions, the Supreme Court has ruled. The apex court said that all that was required is that the capital borrowed must be for the purpose of business for which interest was also paid. A bench of Justices S H Kapadia and B Sudershan Reddy passed the ruling while dismissing an appeal filed by the Income Tax department. The department had filed the appeal after the appellate tribunal and the Gujarat High Court had held that the assessee company M/s Core Health Limited was not entitled to deductions under Section 36(1) and (III) of the Income Tax Act, 1961.
: A search and seizure was conducted by the revenue (respondents) in the premises of the appellants (KCC software Ltd), pursuant to warrants of authorization dated 3.8.2005. On 4.8.2005 certain assets including jewellery, cash and fixed deposit receipts were seized. On that very day, appellants received a letter from the HDFC Bank at B-28, Community Centre, Janakpuri, New Delhi that operation of five bank accounts of appellant No.1 had been restrained by order issued under Section 132 (3) of the Income Tax Act, 1961 (in short the Act). The Income Tax Department on 4.10.2005 issued two fresh warrants of authorization under Section 132 of the Act in respect of the bank accounts. On 5.10.2005 the bank accounts of the appellants were searched and seized through withdrawal of cash by demand drafts.
ADDITIONAL Commissioners of Income Tax as assessing officers? Not a rare sight, indeed! It is a common practice in the Income Tax Department. And the reasons could be anything from dearth of staff, burdensome workload to the sensitive nature of cases. But whatever could be the reasons, their jurisdiction has come under the radar of questioning! The spinal question is : Do they have legitimate jurisdiction to do such assessments? If yes, where is the CBDT order and the procedure laid down for allowing such delegation of such powers?
WITH India getting rapidly integrated to the global economy, making payments either for services or reibursement to a non-resident company or individual has become common for the India Inc. But what has not become common is the practice of deducting tax at source (TDS) under Sec 195. And this case is illustrated best in the latest decision of the ITAT which has held that it is obligatory for the payer to a non-resident company to deduct TDS u/s 195 without going into any other aspect with regard to nature and taxability of the payment and rejected assessee i.e. payer’s contention that reimbursements made by it were not in the nature of income in the hands of payee. As to the consequences of such non-deduction of TDS, it held that provisions of Sec 40(a)(i) are attracted as per which, any claim of such amount will not be allowed as deduction during computation of income of payer and can be claimed only on deduction and deposition of such tax which though is subject to subsequent assessment by the A.O.
