Bisazza India (P) Ltd. v CIT (ITAT Ahmedabad) – We feel the restriction contained in section 80AB or section 80B(5) could not be applied in as much as carry forward of business loss or depreciation should not be first set-off leaving gross total income nil, which disentitles the assessee for deduction under other provisions of Chapter VIA-C which includes section 80HHC also. But assessees’ contention that export profit has to be computed with reference to the profit and loss account prepared under the Companies Act is equally unacceptable because there is no such provision in section 80HHC to determine export profit with reference to Profit and loss account maintained under the Companies Act.
Meredith Traders (P) Ltd. v ITO (ITAT Mumbai)- Provisions of s 79 are not applicable to company originally registered as a private company and then became a public company by virtue of the provisions of s 3(iv)(c) of the Companies Act in which public are substantially interested within the meaning of s 2(18) of the Income tax Act, 1961
ITO v Mangat Ram Norata Ram Narwana and Anr. (Supreme Court of India) – There is no statutory requirement that signature on the return has to be made in presence of the Income-tax authority. Nothing has been brought in evidence by the accused Hem Raj that signature did not belong to him on the return and the penalty was paid mistakenly. We are of the opinion that the appellate court misdirected itself in not considering the evidence in right perspective and acquitting the accused, so also the High Court which failed to correct the apparent error. This render their judgments unsustainable. Any other view may induce the appellant to compel the assessee to file return in the presence of the authority so that the signature is proved by direct evidence by such authority in trial. This will lead to a difficult situation not contemplated under the Act.
Regard being had to the language employed and the language engrafted in the circular, High Court is of the considered view that the issue raised falls in the realm of interpretation of the terms, namely – charter agreement . Factual matrix in each case has to be examined. High Court cannot examine and decide the issue in a vacuum. In praesenti , High Court is inclined to think so because the circular uses the terms – where the crew is also provided by the owners of the aircraft as in a wet lease of aircraft effective control is not transferred. Adjudication should take place first and till the adjudication is made, no coercive steps shall be taken against the members of the petitioner-association. In case members of the petitioner-association are aggrieved by any kind of adjudication, they can challenge the same before the appropriate forum in accordance with law. The issue pertaining to the validity of the circular is kept open.
Depreciation on the capital assets was allowable even when capital expenditure on the acquisition of the corresponding assets had already been allowed as ‘application of income’for the purpose of allowing the exemption under s 11.
CIT and Anr Vs R Hanumaiah Associates (Karnataka High Court) – No addition can be made on account of the unexplained investment on the basis of the DVO findings when the assessee satisfactorily explains that the difference was on account of the construction expenditure incurred, which was not considered by the DVO.
The assessee-trust registered under section 12A and also approved under section 80G(5) was found to have more then 3/4th of of its total receipt for organizing ‘Bhagwat Katha’; section 80G(5B) limits expenditure on activities of religious nature to 5% of income for year; since expenditure in instant case exceeded 5% and violated section 80G(5B), approval under section 80G was withdrawn with observation that Bhagawat Katha is religious notwithstanding its public character and being open to all castes and religions.
CIT vs. Raychem RPG Ltd (Bombay High Court) – When we apply this functional test suggested by the Special Bench of the Tribunal, we find that impugned software does not form part of the profit making apparatus of the assessee and hence the same is to be disallowed a revenue expenditure. We hold so because we find that the business of the assessee company is that of manufacturing of telecommunication and power cable accessories and trading in oil retracing system and other products and impugned software is an Enterprises Resources Planning (ERP) package and hence it facilitate the assessee’s trading operations or enabling the management to conduct the assessee’s business more efficiently or more profitably but it is not in the nature of profit making apparatus. We, therefore, decide this issue also in favour of the assessee and we hold that this expenditure of Rs.20.60 lakhs is of revenue expenditure. We hold so by following the judgment of the Special Bench of the Tribunal relied upon by the LD AR of the assessee.
These appeals are being disposed of by a common judgement since all these appeals have been admitted on the following substantial questions of law
CIT Vs Mallikarjun Geo resources Associates (Uttarakhand High Court)- The word “production” takes in all the by-products, intermediate products and residual products, which emerge in the course of manufacture of goods.
