Search Results For: 56


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

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DATE: August 9, 2016 (Date of pronouncement)
DATE: September 21, 2016 (Date of publication)
AY: 1996-97
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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

Praful Chandaria vs. ADIT (ITAT Mumbai)

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DATE: August 26, 2016 (Date of pronouncement)
DATE: September 20, 2016 (Date of publication)
AY: 2002-03
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Entire law on whether consideration for alienation of rights under a "Call Option agreement" for shares is taxable as "capital gains" or as "income from other sources" in the context of the India-Singapore DTAA explained

In common parlance, a call option is reckoned as a contract in which the holder (buyer) has the right (but not an obligation) to buy a specified quantity of a security/shares at a specified price (strike price) within a fixed period of time. For the writer (seller) of a call option, it represents an obligation to sell the underlying security at the strike price if the option is exercised. The call option writer is paid a premium for taking on the risk associated with the obligation. Here in the present case, there is very peculiar agreement/ arrangement, where the strike price has been mentioned as US $ 1 and the fixed period of time for exercising the call option has been fixed for 150 years. This factum itself means that the call option in the shares have been given for perpetuity. Not only that, an irrevocable power of attorney has also been executed in favour of the ING Bank in respect of all the shares in PHIL confirming that, assessee will not at any time purport to revoke the same, which inter-alia shows that assessee has alienated a substantive and valuable rights as an owner of the shares in perpetuity, albeit without dejure alienating the shares itself

Posted in All Judgements, Tribunal

DCIT vs. KDA Enterprises Pvt. Ltd (ITAT Mumbai)

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DATE: March 11, 2015 (Date of pronouncement)
DATE: March 23, 2015 (Date of publication)
AY: 2009-10
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Companies, if authorized by the MoA & AoA, are competent to make and receive gifts. Natural love and affection is a not necessary requirement for a gift. The gift is neither taxable as income s. 56 (pre-amendment) nor as capital gain nor as income u/s.2(22)(e) nor u/s.115JB

Three elements are essential in determining whether or not a gift has been made, a) delivery. b) donative intent,’ and c) acceptance by the donee. Companies are competent to make and receive gifts and natural love and affection are not necessary requirement. Only requirement for company is to make gifts as per respective memorandum and article of association, which authorize the company for the same

Posted in All Judgements, Tribunal

Manpreet Singh vs. ITO (ITAT Delhi)

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DATE: January 6, 2015 (Date of pronouncement)
DATE: January 12, 2015 (Date of publication)
AY: 2009-10
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S. 22: Rent received from mobile phone company for use of terrace to install antenna is taxable as "Income from house property" and not as "Other sources"

The true test is whether the space rented out is part of the building or land appurtenant thereto. The rent is not for the antenna but for the space for installation of antenna. It is not the case of the Assessing Officer that the rent is for the antenna, and, therefore, it is wholly irrelevant whether antenna is part of the building or land appurtenant thereto. What is relevant is the space which has been rented out and, therefore, as long as the space, which has been rented out, is part of the building, the rent is required to be treated as “income from house property”.

Posted in All Judgements, Tribunal

K. Raheja IT Park (Hyderabad) P. Ltd vs. CIT (ITAT Hyderabad)

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DATE: November 7, 2014 (Date of pronouncement)
DATE: November 11, 2014 (Date of publication)
AY: 2006-2007, 2007-2008 & 2009-2010
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Law on whether income from rent for lease of space in technology park and income from operation and management of facilities is assessable as "business profits" or "income from house property" explained

Assessee has been consistently offering the incomes under the head “Income on House Property” as far as the receipts of rents are concerned and under the head “Business” as far as the service fee and management fee on maintenance are

Posted in All Judgements, Tribunal