In the return of income, the assessee claimed deduction u/s 80HHE before setting off of brought forward business loss and unabsorbed depreciation from the gross total income. Before the Assessing Officer it was contended that section 80HHE is the self-contained section and contains the definition of profits of the business, export turnover, total turnover etc. Section 80AB refers to the nature of income entitled for deduction u/s VIA and include in the gross total income. Section 80HHE does not refer to any income included in the gross total income.
THE Special Bench decided on a substantial question of Law. A bench of the Tribunal decides an issue in favour of the assessee. The Revenue goes in appeal to the High Court, which dismisses the appeal as there was no substantial question of law. Is this decision of the High Court a binding precedent on the Special bench? `Yes’, ruled the Bench.
One Vivek Bansal, Liberty House, Karnal had originally purchased deep discount bonds 1997 of Industrial Development Bank of India (I.D.B.I) @ of Rs. 5500/- each (the original purchaser). From him the assessee-respondent purchased those bonds @ Rs.9700/- each on 01.01.2001 for total value of Rs.19,40,000/ – (the assessee secondary purchaser). The original purchaser filed his return for the assessment year 2001-02 and reflected the difference in amount of purchase and the sale. Thus, a sum of Rs. 9,40,000/- became long term capital gain in respect of the original assessee. It is undisputed that the bonds were subject to accruing of interest year to year although, no income was received annually by the bond holder. The condition was modified by issuance of a press note later. The assessee-secondary purchaser received a draft of Rs. 19,08,200/-. This amount has been accounted for by the assessee-secondary purchaser.
The Supreme Court has disapproved of the view of the Guwahati High Court and upheld the opinion of the Calcutta High Court on the question of applicability of Section 80HHC deduction under the Income Tax Act for companies which do both agriculture and trade.The tax authorities had appealed to the Supreme Court against the high court judgments in a large batch of companies engaged in growing, manufacturing and exporting tea.
The Tribunal held that even if the amount received by the assessee on redemption of share appreciation right is held to be not taxable under the head `income from salaries’ this fact, by itself would not take the same outside the ambit of taxable income, since, in such an eventuality, the said amount will be taxable under the head `income from other sources’. Even if it is held that amount in question is received from a person other than the employer of the assessee, and that in order for an income to be taxed under the head `income from salaries it is a condition precedent that the salary, benefit or the consideration must flow from employer to the employee, the amount received by the assessee on redemption of stock appreciation rights will still be taxable – though under the head `Income from other sources’. The plea raised by the assessee that the amount in question cannot be taxed as `income from salaries’ is thus irrelevant.
The Madurai Bench of the Madras High Court has ruled that as per the Payment of Bonus Act, if a workman had worked for 30 days in a relevant period, he was eligible for a pro rata bonus. Therefore,once the management was ready to pay bonus as per the law for the period 1991-92 (and it had so notified), it could not refuse to pay ex-gratia amount to workers.
THE Mumbai tribunal has recently said that for the purpose of scrutinising the assessee’s income, the assessing officer (AO) can issue a notice only for the limited scope as against loss, exemption and allowance or relief, which in his opinion is inadmissible, and not beyond that.The assessee filed the return declaring the income earned from sub-letting a premises as income from business. The AO selected the case for scrutiny and issued a notice for assessing the income as income from other sources.
EAGERNESS to appropriate the refund claim against pending dues was best observed in the case of Birla Copper vs. CCE, Vadodara . In that case, against an order-in-original of June 2003, the assessee had obtained an Unconditional Stay from the Tribunal in the month of August 2003. Later, in the month of June 2005, the Tribunal extended the Stay by stipulating “pending disposal of the appeal”. Incidentally, the matter came to be referred to the Third Member in view of difference in opinion.
When agreements are entered into for purchase of property, rights are created in favour of the parties to the agreement. Failure to honour the agreement can lead to breach of contract and claims for damages or specific performance. Quite often, such breach of contract ultimately results in a compromise settlement of the dispute and monies are paid as quits. Will the receipt of such compensation for breach result in tax consequences?
THE jinxed tax that is Service Tax on GTA , is haunting the tax administration, courts and the hapless assessees for more than a decade. While the net collection from this tax would be less than peanut, the amount of litigation it has generated, must have cost the nation heavily – the Government should seriously consider doing away with this tax or maybe levying a flat 2% without credit.
