Month: March 2012

Archive for March, 2012


CIT vs. M/s.Vandana Properties (Bombay High Court)

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DATE: March 29, 2012 (Date of publication)
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CITATION:

S. 80IB (10)(b) specifies the size of the plot of land but not the size of the housing project. While the plot must have a minimum area of one acre, it need not be a vacant plot. The object of s. 80IB (10) is to boost the stock of houses. There can be multiple housing projects on a plot of land having minimum area of one acre

Posted in All Judgements, High Court

Gillette Group India Pvt.Ltd. vs. ACIT (ITAT Delhi)

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DATE: March 29, 2012 (Date of publication)
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U/s 14A read with Rule 8D, disallowance can be made for the expenditure incurred for earning of exempt income. From the assessee’s P&L A/c, it is evident that the total expenditure incurred was Rs. 49 lakhs only which was claimed as a deduction. The disallowance u/s 14A & Rule 8D cannot exceed the expenditure actually claimed by the assessee. Accordingly, the action of the AO & CIT (A) in making disallowance in excess of total expenditure debited to P&L A/c is unjustified

Posted in All Judgements, Tribunal

CIT vs. Machino Plastic Ltd (Delhi High Court)

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DATE: (Date of pronouncement)
DATE: March 26, 2012 (Date of publication)
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The AO should examine & compute the disallowance on the basis of what is laid down in Maxopp Investment Ltd 203 TM 364 (Del). However, the quantum of disallowance, if any, to be made by the AO will not exceed the disallowance which was made in the original assessment order as reduced by the CIT(Appeals)

Posted in All Judgements, High Court

Quippo Telecom Infrastructure Ltd vs. ACIT (ITAT Delhi)

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DATE: March 26, 2012 (Date of publication)
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Under the normal provisions of the Act, Rule 8D cannot apply till AY 2008-09 though the AO is at liberty to identify actual expenditure incurred to earn tax-free income & make disallowance. However, while computing book profit u/s 115JB, no actual expenditure was debited in the profit & loss account relating to the earning of exempt income. S. 14A cannot be imported into while computing the book profit u/s 115JB because clause (f) of Explanation to s. 115JB refers to the amount debited to the profit & loss account which can be added back to the book profit while computing book profit u/s 115JB of the Act. In Goetze (India) Ltd. vs. CIT 32 SOT 101 (Del) it was held that sub-sec. (2) & (3) of s. 14A cannot be imported into clause (f) of the Explanation to s. 115JA. Accordingly, it is held that no addition to book profit can be made on account of alleged expenditure incurred to earn exempt income while computing income u/s 115JB

Posted in All Judgements, Tribunal

UTI Mutual Fund vs. ITO (Bombay High Court)

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DATE: (Date of pronouncement)
DATE: March 22, 2012 (Date of publication)
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S. 220(6): Guidelines laid down on how stay applications should be dealt with The assessee, a mutual fund, was a beneficiary of a trust named India Corporate Loan Securitisation Trust which was set up for securitising a loan of Rs.300

Posted in All Judgements, High Court

Tata Toyo Radiators Pvt Ltd vs. UOI (Bombay High Court)

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DATE: (Date of pronouncement)
DATE: March 22, 2012 (Date of publication)
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In several judgments of this Court, the parameters for the exercise of jurisdiction u/s 220(6) of the Act have been spelt out. In KEC International Ltd. v. B.R. Balakrishnan 251 ITR 158, the importance of reasoned orders being passed on the stay applications was emphasized. The AOs consistently refuse to follow the law laid down in the judgment of this Court. The AO & the appellate authorities are duty bound to act in accordance with binding precedent and there is no reason or justification to act in the manner in which the applications for stay have been disposed of in this case

Posted in All Judgements, High Court

Nishith Madanlal Desai vs. CIT (Bombay High Court)

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DATE: (Date of pronouncement)
DATE: March 22, 2012 (Date of publication)
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The power which is vested in the AO u/s 220(6) and on the CIT (A) to grant a stay of demand is a judicial power. It is necessary for both the AO as well as the appellate authorities constituted under the Income-tax Act to have due regard to the fact that their function is not merely to act as tax gatherers, but equally as quasi judicial authorities, they owe a duty of fairness to the assessee. This seems to be lost sight of in the manner in which the authority has acted in the present case. The parameters for the exercise of the jurisdiction to grant a stay of demand has been set out in several judgments of this Court, including in KEC International vs. B.R.Balakrishnan 251 ITR 158. The assessee’s submissions on merits require consideration. The CIT (A) ought to have devoted a more careful consideration to the issue as to whether a stay of demand was warranted. As out of a total demand of Rs.1.18 crores, Rs.78 lakhs has been adjusted, the balance has to be stayed

Posted in All Judgements, High Court

UOI vs. Vodafone International Holding (Supreme Court) (Review Petition)

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DATE: (Date of pronouncement)
DATE: March 20, 2012 (Date of publication)
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We have carefully gone through the review petition filed by the Union of India on 17th February, 2012. We find no merit in the review petition. The review petition is, accordingly, dismissed

Posted in All Judgements, Supreme Court

In Re RST (AAR)

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DATE: March 20, 2012 (Date of publication)
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S. 47(iv) exempts a transfer of a capital asset by a company to its subsidiary if “the parent company or its nominees hold the whole of the share capital of the subsidiary company”. The word used is “or” and not “and”. The assessee held only 99.99% of the shareholding. The shares held by the nominees cannot be considered as held by the assessee. If, under Indian law (s. 49 (3) of the Companies Act), a company cannot by itself hold 100% of the shares in a subsidiary, it would only mean that Parliament did not intend to confer the benefit of s. 47(iv) on such a parent company. Though this approach confines the relief to a particular species of parent companies, it does not mean that the provision is unworkable. If the nominees are treated as holding the shares benami for the parent company, it would offend the Benami Transactions (Prohibition) Act, 1988 and also violate s. 49(3) of the Companies Act. The nominees can also not be regarded as a trustee in view of s. 153 of the Companies Act. The result is that the applicant does not hold 100% of the share capital of the subsidiary and so s. 47(iv) is not attracted

Posted in AAR, All Judgements

Gujarat Alkalies & Chemicals Ltd vs. CIT (Gujarat High Court)

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DATE: (Date of pronouncement)
DATE: March 17, 2012 (Date of publication)
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The principal object of s. 80-I is to encourage setting up of new industrial undertakings by offering tax incentives. A reasonable and purposive construction should be adopted. There is no logic in the argument of the department that the true test would be as to whether a new industrial undertaking can function independently of the existing industrial undertaking. If this argument is accepted, it will amount to adding a new clause in s. 80-I of the Act. The fact that the new unit is not capable of independently producing the goods without taking the assistance of the existing plant and machinery of the old unit is no ground to reject the claim u/s 80-I. The test laid down in Textile Machinery Corporation 107 ITR 195 (SC), namely that the new unit should have a “separate and distinct identity” is not violated only because the new undertaking is to a certain extent dependent on the existing unit. It all depends on the nature of the technology and the mechanism of production. One cannot ignore the fact that new machinery and new plant have been installed at an investment of Rs.7 crore and the fact that production has gone from 34000 MT to 75000 MT (Associated Cement Company 118 ITR 406 & other judgements distinguished /explained)

Posted in All Judgements, High Court
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