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Archive for the ‘Supreme Court’ Category

CIT vs. M/s Veena Developers (Supreme Court)


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DATE: April 30, 2015 (Date of pronouncement)
DATE: May 2, 2015 (Date of publication)
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CITATION:
S. 80-IB(10): Law on availability of deduction for "housing projects" explained

There was much debate on the answer given in para (b) above. It was argued by Mr. Gurukrishna Kumar, learned senior counsel, that a project which is cleared as “residential plus commercial” project cannot be treated as housing project and therefore, this direction is contrary to the provisions of Section 80(I)(B)(10) of the Act. However, reading the direction in its entirety and particularly the first sentence thereof, we find that commercial user which is permitted is in the residential units and that too, as per DCR. Examples given before us by the learned counsel for the assessee was that such commercial user to some extent is permitted to the professionals like Doctors, Chartered Accountants, Advocates, etc., in the DCRs itself. Therefore, we clarify that direction (b) is to be read in that context where the project is predominantly housing/ residential project but the commercial activity in the residential units is permitted


All Judgements, Supreme Court | 2 Comments »

Jeyar Consultant & Investment Pvt. Ltd vs. CIT (Supreme Court)


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DATE: April 1, 2015 (Date of pronouncement)
DATE: April 8, 2015 (Date of publication)
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S. 80HHC: It is a pre-requisite that there must be profits from the export business. If the exports business has suffered a loss, deduction cannot be allowed from domestic business

From the scheme of Section 80HHC, it is clear that deduction is to be provided under sub-section (1) thereof which is “in respect of profits retained for export business”. Therefore, in the first instance, it has to be satisfied that there are profits from the export business. That is the pre-requisite as held in IPCA and A.M. Moosa as well. Sub-section (3) comes into picture only for the purpose of computation of deduction. For such an eventuality, while computing the “total turnover”, one may apply the formula stated in clause (b) of subsection (3) of Section 80HHC. However, that would not mean that even if there are losses in the export business but the profits in respect of business carried out within India are more than the export losses, benefit under Section 80HHC would still be available


All Judgements, Supreme Court | 3 Comments »

ACIT (Agr. IT) vs. Netley ‘B’ Estate (Supreme Court)


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DATE: March 17, 2015 (Date of pronouncement)
DATE: March 26, 2015 (Date of publication)
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CITATION:
While an amendment to overrule a judgement is not valid, it is permissible to retrospectively alter the character of the levy so as to save it from illegality

In exercising legislative power, the legislature by mere declaration, without anything more, cannot directly overrule, revise or override a judicial decision. It can render judicial decision ineffective by enacting valid law on the topic within its legislative field fundamentally altering or changing its character retrospectively


All Judgements, Supreme Court | 3 Comments »

CIT vs. Sati Oil Udyog Ltd (Supreme Court)


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DATE: March 24, 2015 (Date of pronouncement)
DATE: March 25, 2015 (Date of publication)
AY: 1989-90, 1991-92
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S. 143(1A): As the object of s. 143 (1A) is to prevent tax evasion, it can apply only to tax evaders and not to honest assessees. The burden of proving that the assessee stated a lesser amount in the return in an attempt to evade tax is on the revenue

The object of Section 143 (1A) is the prevention of tax evasion. Read literally, both honest asessees and tax evaders are caught within its net. We feel that since the provision has the deterrent effect of preventing tax evasion, it should be made to apply only to tax evaders. Section 143 (1A) can only be invoked where it is found on facts that the lesser amount stated in the return filed by the assessee is a result of an attempt to evade tax lawfully payable by the assessee. The burden of proving that the assessee has so attempted to evade tax is on the revenue


All Judgements, Supreme Court | 4 Comments »

Taparia Tools Ltd vs. JCIT (Supreme Court)


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DATE: March 23, 2015 (Date of pronouncement)
DATE: March 24, 2015 (Date of publication)
AY: 1996-97
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S. 36(1)(iii)/ 37(1): Normally revenue expenditure incurred in a particular year has to be allowed in that year and if the assessee claims that expenditure in that year, the Department cannot deny the same. Fact that assessee has deferred the expenditure in the books of account is irrelevant. However, if the assessee himself wants to spread the expenditure over a period of ensuing years, it can be allowed only if the principle of 'Matching Concept' is satisfied

U/s 36(1)(iii) when the interest was actually incurred by the assessee, which follows the mercantile system of accounting, the assessee would be entitled to deduction of full amount in the assessment year in which it is paid. The High Court wrongly applied the “Matching Concept” to deny the deduction of the upfront interest payment in the first year.


All Judgements, Supreme Court | 4 Comments »

Queens Educational Society vs. CIT (Supreme Court)


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DATE: March 16, 2015 (Date of pronouncement)
DATE: March 18, 2015 (Date of publication)
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S. 10(23C)(v) & (vi): Mere surplus does not mean institution is existing for making profit. The predominant object test must be applied. The AO must verify the activities of the institution from year to year

The 13th proviso to Section 10(23C) is of great importance in that assessing authorities must continuously monitor from assessment year to assessment year whether such institutions continue to apply their income and invest or deposit their funds in accordance with the law laid down. Further, it is of great importance that the activities of such institutions be looked at carefully. If they are not genuine, or are not being carried out in accordance with all or any of the conditions subject to which approval has been given, such approval and exemption must forthwith be withdrawn. All these cases are disposed of making it clear that revenue is at liberty to pass fresh orders if such necessity is felt after taking into consideration the various provisions of law contained in Section 10(23C) read with Section 11 of the Income Tax Act


All Judgements, Supreme Court | 1 Comment »

Premier Breweries Ltd vs. CIT (Supreme Court)


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DATE: March 10, 2015 (Date of pronouncement)
DATE: March 12, 2015 (Date of publication)
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S. 37(1): principles for deduction of business expenditure reiterated

The question that was posed by the High Court was whether acceptance of the agreements, affidavits and proof of payment would debar the assessing authority to go into the question whether the expenses claimed would still be allowable under Section 37 of the Act. This is a question which the High Court held was required to be answered in the facts of each case in the light of the decision of this Court in Swadeshi Cotton Mills Co. Ltd. Vs. Commissioner of Income Tax 1967 (63) ITR 57 and Lachminarayan Madan Lal vs. Commissioner of Income Tax West Bengal 1972 (86) ITR 439


All Judgements, Supreme Court | 1 Comment »

GVK Industries Ltd vs. ITO (Supreme Court)


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DATE: February 18, 2015 (Date of pronouncement)
DATE: February 19, 2015 (Date of publication)
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CITATION:
S. 9(1)(i) & (vii): Concept of “source rule” vs. "residence rule" explained. Definition of expression "fees for technical services" in s. 9(1)(vii) explained with reference to "consultancy" services

The nature of service referred by the NRC, can be said with certainty would come within the ambit and sweep of the term ‘consultancy service’ and, therefore, it has been rightly held that the tax at source should have been deducted as the amount paid as fee could be taxable under the head ‘fee for technical service’. Once the tax is payable paid the grant of ‘No Objection Certificate’ was not legally permissible


All Judgements, Supreme Court | 2 Comments »

The Indian Hume Pipe Co Ltd vs. ACIT (Supreme Court)


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DATE: July 20, 2012 (Date of pronouncement)
DATE: February 19, 2015 (Date of publication)
AY: 2004-05
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S. 147: Verdict of Bombay High Court in The Indian Hume Pipe Co Ltd vs. ACIT 348 ITR 439 that “full & true disclosure of material facts” means “specific” disclosure of “each” fact nullified

We make it clear, that on the validity of Notice under Section 148 of the Income Tax Act, 1961, it would be open to the assessee as well as the Department to put forth their respective contentions before the Appellate Authority and the Appellate Authority will decide this issue also along with other issues without being influenced by the observations made by the High Court in the impugned order


All Judgements, Supreme Court | 4 Comments »

Inturi Rama Rao vs. UOI (Supreme Court)


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DATE: September 23, 2014 (Date of pronouncement)
DATE: October 8, 2014 (Date of publication)
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As the UOI has continued the process of appointment of Tribunal Members without amending the Rules, the Petitioner, who was wait-listed in 2007, deserves to be considered for appointment within 30 days

The Selection Committee finalized a list of 18 persons, 13 for the post of Accountant Member and 5 for the post of Judicial Member. The Petitioner, Inturi Rama Rao, was placed in a ‘Waiting List’ appointment as Accountant Member. The Select List was approved by the Appointment Committee of the Cabinet (ACC) and 11 vacancies […]


Supreme Court | 13 Comments »


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