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.
TILL a few months back, it used to be a rare event in which the Delhi High Court used to impose costs on the Income Tax Department. And this is what perhaps encouraged the Revenue to keep filing appeals indiscriminately and virtually in all cases. But such a cosy run has evidently run out of luck now. So much exasperated is the High Court over the Department’s thick-skinned approach to curb frivolous appeals that it can now be seen imposing costs in most of the cases. And it happened even in this case where the issue revolves around allowance of bad debts and stock damages. While computing book profits u/s 115JA, the AO added back the provisions of doubtful debts and stock damages as he felt that such provisions cannot be categorised as ascertained liabilities in advance.
WHETHER the charges collected towards the services for evolution of prototype conceptual design (i.e. creation of concept), on which service tax had been paid under the Finance Act, 1994 as amended from time to time is liable to tax under the Karnataka Value Added Tax Act, 2003 is the question involved in this appeal before the Supreme Court.
In the facts and circumstances of the case and in law, whether the rent and deposits received by the intermediary tenant from the ultimate user of the premises or the rent and deposit received by the assessee from the intermediary tenant, who never occupied the premises is to be taken for the computation of the net wealth of the assessee for valuation under Rule 3 of part B of Schedule III of the Wealth Tax Act, 1957 ?
