Month: July 2012

Archive for July, 2012


Columbia Sportswear Company vs. DIT (Supreme Court)

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DATE: (Date of pronouncement)
DATE: July 31, 2012 (Date of publication)
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CITATION:

The ruling should in the first instance be challenged before the High Court instead of directly in the Supreme Court. To avoid the matter remaining pending in the High Court for years, which would defeat the objective of enabling the applicant to get an expeditious ruling, the matter should be heard directly by a Division Bench of the High Court and decided as expeditiously as possible

Posted in All Judgements, Supreme Court

CIT vs. Societex (Delhi High Court)

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DATE: (Date of pronouncement)
DATE: July 26, 2012 (Date of publication)
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CITATION:

As regards depreciation, the property was let out for the first time in the latter part of the AY. As such, the benefit of inadvertence or mechanical or repetitive claim being made can be given to the assessee. As regards the provision for taxation, the assessee made a claim for deduction of the provision for the first time in the year under appeal. There was no history of furnishing such accurate particulars by the assessee for the previous years. Accordingly, s. 271(1)(c) penalty is not leviable

Posted in All Judgements, High Court

Aztec Software & Technology Services Ltd vs. ACIT (Karnataka High Court)

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DATE: (Date of pronouncement)
DATE: July 24, 2012 (Date of publication)
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CITATION:

We notice that in this appeal, the assessee has raised as many as 30 substantial questions of law. In our considered opinion, it is not really necessary to consider any of these questions, as in the first instance, the order of the Tribunal is not at all adverse to the interest of the appellant but is one to set aside the order passed by the Lower Appellate Authority and remanding the matter. We notice that all questions are left open, for redetermination by the Lower Appellate Authority

Posted in All Judgements, High Court

Madhu Jayanti International Ltd vs. DCIT (ITAT Kolkota Special Bench)

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DATE: (Date of pronouncement)
DATE: July 23, 2012 (Date of publication)
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CITATION:

The assessee was exclusively engaged in blending and packing of tea for export and was not manufacturing or producing any other article or thing. It was recognised as a 100% EOU division and the Department had no case that the assessee’s unit engaged in export of tea bags and tea packets was not a 100% EOU. If exemption was denied on the ground that products exported were not produced or manufactured in the industrial unit of the assessee’s 100% EOU, it would defeat the very object of s. 10B of the Act. When the products for which the assessee’s unit is recognized as a 100% EOU are tea bags, tea in packets and tea in bulk packs and the assessee is exclusively engaged in blending and packing of tea for export may not be manufacturer or producer of any other article or thing in common parlance. However, for purposes of s. 10A, 10AA & 10B, the definition of the word “manufacture” as defined in s. 2(r) of SEZ Act, Exim Policy, Food Adulteration Rules, 1955, etc have to be considered. The definition of ‘manufacture’ as per s. 2(r) of SEZ Act, 2005 is incorporated in s. 10AA of the I. T. Act w.e.f. 10.02.2006. This amendment is clarificatory in nature. The definition of ‘manufacture’ under the SEZ Act etc is much wider than what is the meaning of the term ‘manufacture’ under the Income-tax Act

Posted in All Judgements, Tribunal

ACIT vs. GE Plastics India Ltd (ITAT Ahmedabad)

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DATE: (Date of pronouncement)
DATE: July 20, 2012 (Date of publication)
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CITATION:

The AO’s objection that a non-compete right is not an “intangible asset” u/s. 32(1)(ii) on the ground that (a) it is not “any other business or commercial right of a similar nature” and (b) it is not capable of transfer like other intangible assets is not acceptable because (i) the right of absence of competition or the ‘non-compete right’ is an asset which is capable of being transferred and is of a similar nature as the other items referred to. This is shown by the fact that the right was transferred by the assessee at the time of its amalgamation and (ii) the expenditure resulted in the acquisition of an unrivaled and non-competed business territory for 10 years which brought advantages in the capital field. Though in Srivatsan Surveyors 125 TTJ 286 (Chennai), it was held that a restrictive covenant is a “right in persona” and not a “right in rem”, a contrary view was taken in ITO vs. Medicorp Technologies India Ltd 30 SOT 506 (Chennai). When two views are possible, the view favourable to the assessee should be followed held in CIT vs. Vegetable Products Ltd. 88 ITR 192 (SC).

Posted in All Judgements, Tribunal

Sushila Suresh Malge vs. ACIT (ITAT Mumbai)

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DATE: (Date of pronouncement)
DATE: July 20, 2012 (Date of publication)
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CITATION:

It is very sad that the AO without following the principles of natural justice and inspite of clear findings of the ITAT in the order dated 18.06.2010 has repeated the same orders as was done originally way back in 1998. Inspite of levying cost of Rs. 5000 on AO there is no change in the attitude of the Revenue with reference to the assessee. By taking up the assessment at the fag end of the time barring period and by denying natural justice and not considering the evidence on record, the assessee was forced to file appeals before the ITAT unnecessarily by incurring heavy cost of not only appeal fees but also engaging Counsels to defend the case. There should be an end to this sorry state of affairs

Posted in All Judgements, Tribunal

CIT vs. PVP Ventures Limited (Madras High Court)

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DATE: (Date of pronouncement)
DATE: July 20, 2012 (Date of publication)
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CITATION:

As far as the Employees Stock Option Plan is concerned, as rightly pointed out by the Tribunal, the assessee had to follow SEBI direction and by following such directions, the assessee claimed the ascertained amount as liability for deduction. There is no error in the order of the Tribunal

Posted in All Judgements, High Court

ACIT vs. Spray Engineering Devices Ltd (ITAT Chandigarh)

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DATE: (Date of pronouncement)
DATE: July 19, 2012 (Date of publication)
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CITATION:

Though the allotment of the shares was not done as of 31.3.2006, the number of shares to be allotted to the employees as on 31.3.2006 was specified and immediately thereafter the said shares were so allotted. Consequently, the mere non-allotment of the shares pending completion of certain formalities does not merit the disallowance of said expenditure as being a contingent liability. The fact that the scheme provided for a lock in period of five years under which in case the employee left employment before the expiry of five years, the shares so allotted to him would revert to the assessee, did not make the liability contingent because where the shares were forfeited, the value thereof would be offered to tax in that year (S.S.I. Ltd. vs. DCIT 85 TTJ 1049 (Chennai) followed; Ranbaxy Laboratories 124 TTJ 771 (Del) & VIP Industries (ITAT Mum) distinguished)

Posted in All Judgements, Tribunal

CIT vs. CA Computer Associates India Pvt. Ltd (Bombay High Court)

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DATE: (Date of pronouncement)
DATE: July 19, 2012 (Date of publication)
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FILE: Click here to view full post with file download link
CITATION:

S. 92C provides the basis for determining the ALP in relation to international transactions. It does not either expressly or impliedly consider failure of the assessee’s customers to pay for the products sold to them by the assessee to be a relevant factor in determining the ALP. In the absence of any statutory provision or the transactions being colourable bad debts on account of purchasers refusing to pay for the goods purchased by them from the assessee can never be a relevant factor while determining the ALP of the transaction between the assessee and its principal. Once it is accepted that the ALP of the royalty is justified, there can be no reduction in the value thereof on account of the assessee’s customers failing to pay the assessee for the product purchased by them from the assessee. Absent a contract to the contrary, the vendor or licensor is not concerned with whether its purchaser /licensee recovers its price from its clients to which it has in turn sold /licensed such products. The two are distinct & unconnected transactions. The purchaser’s / licensee’s obligation to pay the consideration under its transaction with its vendor / licensor is not dependent upon its recovering the price of the products from its clients

Posted in All Judgements, High Court

Global Green Company Limited vs. DCIT (ITAT Delhi)

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DATE: (Date of pronouncement)
DATE: July 19, 2012 (Date of publication)
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FILE: Click here to view full post with file download link
CITATION:

Despite the insertion of sub-section (1B) to s. 271, the necessity for “prima facie satisfaction for initiation of penalty proceedings continues to be a jurisdictional fact. The AO has to record the finding that there was concealment of income. In the s. 143(3) assessment order, the AO has not mentioned a word that there was furnishing of inaccurate particulars or concealment of income. He made the addition merely on the ground that the assessee was not able to produce any evidence for writing off of the amount in the books of account. As the satisfaction that the assessee had concealed income or furnished inaccurate particulars of such income is not discernible from the assessment order, the penalty order suffers from lack of jurisdiction to impose penalty (Madhu Shree Gupta 317 ITR 107 (Del) followed)

Posted in All Judgements, Tribunal