S. 61 of the MVAT which confers right to do audit to CAs and excludes Advocates and STPs is neither discriminatory, arbitrary or unreasonable and consequently not unconstitutional. Only CAs are competent to perform audit functions having regard to the expertise achieved as a result of their academic knowledge and practical experience.

(1) Though the assessee company was the defacto owner of the shares, the dividends could not be said to have accrued to it as it was not the dejure owner of the shares. (2) If there is an accounting standard (AS-9), the same has to be accepted in the absence of any other statutory provision.

Meaning of the terms “manufacture”, “production” and “process”. The process applied to POY either for the purpose of texturising or twisting constitutes manufacture as the article produced is recognised in the trade as distinct commodity pursuant to the process it undergoes and which amounts to manufacture.

Non-compete compensation paid to an employee for an indefinite period is business expenditure and not capital expenditure as no capital asset or benefit of enduring benefit came into existence. While the lenght of the period of the covenant is important, it is not decisive. What is more important is the purpose of the payment and its intended object and effect.

Non-compete compensation received by an employee-director for agreeing not to carry on any business activity relating to software development for a period of 18 months constitutes a capital receipt as it is for loss of a source of income. See …

Rohitsava Chand vs. CIT (Delhi High Court) Read More »

Sections 153A and 153C are not unconstitutional either on the ground of discrimination or on the ground that they allegedly exclude the principles of natural justice. Related Judgements CIT vs. Narendra Desai (Bombay High Court) Receipt for agreeing to refrain from …

Saraya Industries vs. UOI (Delhi High Court) Read More »

An order passed by the AO to give consequential effect to an appeallate order of an earlier year is not an order passed under section 154 and consequently the time limit of section 154(7) does not apply.