Search Results For: 4


Siemens Public Communications Network Ltd vs. CIT (Supreme Court)

COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS: , ,
COUNSEL:
DATE: December 7, 2016 (Date of pronouncement)
DATE: December 12, 2016 (Date of publication)
AY: 1999-00
FILE: Click here to view full post with file download link
CITATION:
S. 4: Law laid down in Sahney Steel 228 ITR 253 (SC) and Ponni Sugars 306 ITR 392 (SC) regarding the taxability of subsidies as a revenue receipt does not apply to voluntary subsidies (subvention) paid by a holding company to its loss making subsidiary. The said subsidy is to protect the capital investment of the holding company and is a capital receipt in the hands of the recipient

The question of law that was presented before the High Court, namely, whether subvention was capital or revenue receipt, was sought to be answered by the High Court by making a reference to two decisions of this Court in Sahney Steel & Press Works Ltd., Hyderabad versus Commissioner of Income Tax, A.P.-I, Hyderabad [(1997) 7 SCC 764]/ 228 ITR 253 and Commissioner of Income Tax, Madras versus Ponni Sugars and Chemicals Limited [(2008) 9 SCC 337]/ 306 ITR 392 (SC). The view expressed by this Court that unless the grant-in-aid received by an Assessee is utilized for acquisition of an asset, the same must be understood to be in the nature of a revenue receipt was held by the High Court to be a principle of law applicable to all situations. The aforesaid view tends to overlook the fact that in both Ponni Sugars (supra) and Sahney Steel (supra) the subsidies received were in the nature of grant-in-aid from public funds and not by way of voluntary contribution by the parent Company as in the present cases. The above apart, the voluntary payments made by the parent Company to its loss making Indian company can also be understood to be payments made in order to protect the capital investment of the Assessee Company. If that is so, we will have no hesitation to hold that the payments made to the Assessee Company by the parent Company for Assessment Years in question cannot be held to be revenue receipts

Posted in All Judgements, Supreme Court

G. S. Homes & Hotels P. Ltd vs. CIT (Supreme Court)

COURT:
CORAM: ,
SECTION(S): , , , ,
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: August 9, 2016 (Date of pronouncement)
DATE: September 21, 2016 (Date of publication)
AY: 1996-97
FILE: Click here to view full post with file download link
CITATION:
Refundable deposits received by a housing company for allotment of flats and future maintenance is business income. However, share capital received for allotment of flats is a capital receipt and not income. The principles of mutuality does not apply to such transactions

The Karnataka High Court held, following Shree Nirmal Commercial vs. CIT 193 ITR 694 (Bom) and 213 ITR 361 (FB), that share capital and refundable deposits received by a housing company from its shareholders in consideration of allotting area to them is assessable as business profits. It was also held that the principles of mutuality are not applicable. It was also held that deposits received from the shareholders for future maintenance is assessable as business income. On appeal to the Supreme Court HELD

Posted in All Judgements, Supreme Court

Hatkesh Co.op. Housing Society Ltd vs. ACIT (Bombay High Court)

COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: August 22, 2016 (Date of pronouncement)
DATE: September 5, 2016 (Date of publication)
AY: 2007-08
FILE: Click here to view full post with file download link
CITATION:
Order of the Tribunal in refusing to follow judgement of the co-ordinate bench in the assessee’s own case (holding that transfer fees and TDR premium received by a cooperative society is not taxable on principles of mutuality) without giving reasons is not justified and is breach of principles of judicial discipline

We are of the view that when an identical issue, which had earlier arisen before the Coordinate Bench of the Tribunal on identical facts and a view has been taken on the issue then judicial discipline would demand that a subsequent bench of the Tribunal hearing the same issue should follow the view taken by its earlier Coordinate Bench. No doubt this discipline is subject to the well settled exceptions of the earlier order being passed per incurim or sub silentio or in the meantime, there has been any change in law, either statutory or by virtue of judicial pronouncement. If the earlier order does not fall within the exception which affects its binding character before a coordinate bench of the Tribunal, then it has to follow it. However, if the Tribunal has a view different then the view taken by its Coordinate Bench on an identical issue, then the order taking such a different view must record its reasons as to why it does not follow the earlier order of the Tribunal on an identical issue, which could only be on one of the well settled exceptions which affect the binding nature of the earlier order. It could also depart from the earlier view of the Tribunal if there is difference in facts from the earlier order of Coordinate Bench but the same must be recorded in the order. The impugned order is blissfully silent about the reason why it chooses to ignore the earlier decision of the Tribunal rendered after consideration of Sind Co. Op. Hsg. Society (supra), and take a view contrary to that taken by its earlier Coordinate Bench

Posted in All Judgements, High Court

Jitendra Kumar Soneja vs. ITO (ITAT Mumbai)

COURT:
CORAM:
SECTION(S): ,
GENRE:
CATCH WORDS: , ,
COUNSEL:
DATE: August 12, 2016 (Date of pronouncement)
DATE: September 5, 2016 (Date of publication)
AY: 2007-08
FILE: Click here to view full post with file download link
CITATION:
Compensation received by flat owner from builder for hardship caused due to redevelopment of the building is a non-taxable receipt and has to be reduced from the cost of the flat. Amount received from builder to meet rental costs during the redevelopment is also not taxable as income

It is elementary that the connotation of income howsoever wide and exhaustive, take into account only such capital receipts are specifically taxable under the provisions of the Income tax Act. Section 2(24)(vi) provides that income includes “any capital gains chargeable under section 45”, and, thus, it is clear that a capital receipt simplicitor cannot be taken as income. Hon’ble Supreme Court in the case of Padmraje R. Kardambande vs CIT (195 ITR 877) has observed that “..,, we hold that the amounts received by the assessee during the financial years in question have to be regarded as capital receipts, and, therefore, (emphasis supplied by us), are not income within meaning of section 2(24) of the Income tax Act….” This clearly implies, as is the settled legal position in our understanding, that a capital receipt in principle is outside the scope of income chargeable to tax and a receipt cannot be taxed as income unless it is in the nature of revenue receipt or is brought within the ambit income by way of a specific provision in the Act

Posted in All Judgements, Tribunal

Aerens Developers and Engineers Ltd vs. ACIT (ITAT Delhi)

COURT:
CORAM: ,
SECTION(S): ,
GENRE:
CATCH WORDS:
COUNSEL:
DATE: August 12, 2016 (Date of pronouncement)
DATE: September 2, 2016 (Date of publication)
AY: 2007-08
FILE: Click here to view full post with file download link
CITATION:
Compensation for breach of promise to provide land to the assessee is not compensation for loss of profits but is for injury caused to the profit making apparatus. Such compensation is a capital receipt not chargeable to tax

The injury was caused to the profit making apparatus as the land which was profit making apparatus for the assessee was not supplied by JMA Buildcom (P) Ltd. as per the agreement entered into between the assessee and associates, and JMA Buildcom (P) Ltd. Appreciating the same, compensation was awarded in the arbitration proceedings initiated against JMA Buildcom.(P) Ltd. In other words, the basis of award remained the lost profit due to non-supply of the land i.e. profit making apparatus and not on loss of profit. We thus find that the only inference can be drawn is that the compensation received by way of reward due to non-supply of land by JMA Buildcom (P) Ltd. under the agreement was capital receipt

Posted in All Judgements, Tribunal

CIT vs. Goodwill Theatres Pvt. Ltd (Bombay High Court)

COURT:
CORAM: ,
SECTION(S): , ,
GENRE:
CATCH WORDS: , , ,
COUNSEL:
DATE: June 6, 2016 (Date of pronouncement)
DATE: July 8, 2016 (Date of publication)
AY: 2008-09
FILE: Click here to view full post with file download link
CITATION:
Mesne profits (amount received from a person in wrongful possession of property) is a capital receipt and not chargeable to tax either as income or as "book profits" u/s 115JB. As the department has implicitly accepted Narang Overseas vs. ACIT 100 ITD (Mum) (SB), it cannot file an appeal on the issue in the case of other assessees

The Special Bench of the Tribunal in Narang Overseas Pvt. Ltd held that the same is capital in nature. There is no doubt that the issue arising herein is also with regard to the character of mesne profits received by the Assessee. In this case also, the amounts are received by the Assessee from a person in wrongful possession of its property i.e. after the relationship of landlord and tenant has come to an end. Once the Special Bench order of the Tribunal in Narang Overseas Pvt. Ltd has taken a view on the character of mesne profits, then unless the Revenue challenges the order of the Special Bench of the Tribunal it would be unfair of the Revenue to pick and choose assessees where it would follow the decision of the Special Bench of the Tribunal in Narang Overseas Pvt. Ltd. The least that is expected of the State which prides itself on Rule of Law is that it would equally apply the law to all assessees’s

Posted in All Judgements, High Court

CIT vs. Shree Balaji Alloys (Supreme Court)

COURT:
CORAM: ,
SECTION(S): , ,
GENRE:
CATCH WORDS: , , ,
COUNSEL:
DATE: April 19, 2016 (Date of pronouncement)
DATE: July 7, 2016 (Date of publication)
AY: -
FILE: Click here to view full post with file download link
CITATION:
Subsidy by way of refund of excise duty and interest for setting up a new industrial undertaking is a capital receipt & not taxable as income. Alternatively, such receipts are "derived" from the industrial undertaking and are deductible u/s 80-IB

The issue raised in these appeals is covered against the Revenue by the decision of this Court in “Commissioner of Income Tax, Madras Vs. Ponni Sugars and Chemicals Ltd.”, reported in (2008) 9 SCC 337, or in the alternate, in “Commissioner of Income Tax Vs. M/s Meghalaya Steels Ltd.“, reported in (2016) 3 SCALE 192 (383 ITR 217 (SC)). The appeals are, therefore, dismissed

Posted in All Judgements, Supreme Court

Tamil Nadu State Transport Corporation (Salem) Ltd vs. Chinnadurai (Madras High Court)

COURT:
CORAM:
SECTION(S):
GENRE:
CATCH WORDS: , ,
COUNSEL:
DATE: June 2, 2016 (Date of pronouncement)
DATE: June 4, 2016 (Date of publication)
AY: -
FILE: Click here to view full post with file download link
CITATION:
Compensation awarded by the Motor Accident Claims Tribunal, and interest accruing thereon, is to ameliorate the sufferings of the victims and does not have the character of "income". If there is a conflict between a social welfare legislation and a taxation legislation, the social welfare legislation will prevail since it subserves larger public interest. CBDT Circular dated 14.10.2011 is not good law

While going through the said provisions of law, one comes to the inescapable conclusion that the mandate of the said provisions does not apply to the accident claim cases and the compensation awarded under the Motor Vehicles Act cannot be said to be taxable income. The compensation is awarded in lieu of death of a person or bodily injury suffered in a vehicular accident, which is damage and not income. The Circular, dated 14.10.2011, issued by the Income Tax Authorities, whereby deduction of income Tax has been ordered on the award amount and interest accrued on the deposits made under the orders of the Court in Motor Accident Claims Cases, is quashed

Posted in All Judgements, High Court

Girish Bansal vs. UOI (Delhi High Court)

COURT:
CORAM: ,
SECTION(S): , ,
GENRE:
CATCH WORDS: , ,
COUNSEL:
DATE: April 28, 2016 (Date of pronouncement)
DATE: June 4, 2016 (Date of publication)
AY: 1993-94, 1994-95
FILE: Click here to view full post with file download link
CITATION:
Entire law on concept of "revenue receipt", "capital receipt" and "casual income" explained in the context of taxability of compensation received for cancellation of a sale deed of immovable property. If the AO claims that the receipt is a capital gain, he cannot change his stand to contend that it is a revenue receipt

The sum of Rs.20 lakhs received by the Assessees was in the context of the cancellation of the sale certificate and the sale deed executed in their favour in relation to an immovable property and neither Assessee was dealing in immovable property as part of his business. While it could if at all be said to be in the nature of a capital receipt, what is relevant for the present case is that the Revenue has been unable to make out a case for treating the said receipt as of a casual and non-recurring nature that could be brought to tax under Section 10(3) read with Section 56 of the Act. Following the decision in Cadell Weaving Mill (supra), there can be no manner of doubt that what is in the nature of capital receipt, cannot be sought to be brought to tax by resorting to Section 10(3) read with Section 56 of the Act

Posted in All Judgements, High Court

CIT vs. Air Cargo Agents Association Of India (Bombay High Court)

COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS:
COUNSEL:
DATE: March 31, 2016 (Date of pronouncement)
DATE: April 22, 2016 (Date of publication)
AY: 2007-08
FILE: Click here to view full post with file download link
CITATION:
Concept of mutuality in the light of Bangalore Club 350 ITR 509 (SC) explained

The contributions made by the members to the assessee cannot be a subject matter of tax merely because the part of its excess of income over expenditure is invested in mutual funds. It is also not the case of the Revenue that the dividend received from mutual funds have not been offered to tax by the assessee. The concept of Mutual concerns not being subject to tax is based on the principle of no man can profit out of itself. Therefore the test to be satisfied before an association can be classified as a Mutual concern are complete identity between the members i.e. contributors and the participants, the action of the mutual concern must be in furtherance of its objectives and there must be no scope of profiteering by the contributors from a fund. These tests have in fact been reiterated in Bangalore Club v/s. CIT 350 ITR 509 (SC)

Posted in All Judgements, High Court