The cessation of liability to repay the loan taken for purchase of a car is not assessable as income u/s 41(1) in accordance with Mahindra and Mahindra Ltd 261 ITR 501 (Bom). Though in Solid Containers Ltd 308 ITR 407 (Bom) it was held that waiver of a loan taken for trading activity would become the assessee’s income and be subject to tax even if the assessee had never claimed a deduction for the loan, that decision is not applicable because there the loan was taken for "trading purposes" and not for purchase of a capital asset. In the alternative, the waiver of a loan is not taxable u/s 28(iv) as that provision applies only when a benefit or perquiste is received in kind and not in cash

Hindusthan Tobacco Company vs. CIT (Calcutta High Court) Plea of natural justice breach/ cross-examination should be raised at the earliest opportunity The principles of natural justice cannot be construed in isolation from the factual matrix of the case. Though the …

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As regards the profits on supply of equipment, the legal position is that the places of negotiation, the place of signing of agreement or formal acceptance thereof or overall responsibility of the assessee are irrelevant circumstances. The only relevant & determinative factor is as to where the property in the goods passes. As the goods were manufactured outside India and the sale has taken place outside India, even in a “composite contract“, the supply has to be segregated from the installation and only then would question of apportionment arise to determine the extent to which it arises in India u/s 9 (1) (i). The department’s argument, based on Roxar Maximum (AAR) & Alstom Transport (AAR) that Ishikawajima-Harima (and Hyundai Heavy Industries 291 ITR 482 (SC)) are “overruled” by the “look at” and not “look through” doctrine in Vodafone 345 ITR 1 (SC) and that composite contracts cannot be split so as to exempt supply profits, is not acceptable

The reason given in the affidavit regarding the arrears outstanding against the assessee is not correct because there were in fact no demands due pursuant to the Tribunal’s order. There is inordinate delay and serious laches on the part of the AO in dealing with the assessee’s application & there is no explanation why the application submitted on 22.06.2009 was taken up for the first time for consideration towards the fag end of FY 2009-10 and rejected on a wrong ground of non-payment of outstanding dues. Such action is in strong>contravention of CBDT’s Circular No.F.No.20/23/67 IT(A-I) which states that application filed by charitable trusts for issuance of Nil/low TDS certificates should be expeditiously processed. The rejection is also in violation of the Court’s earlier order where the department did not raise the stand that the s. 197 certificate could not be issued as the FY was over and instead agreed to consider the issue of the certificate. Obviously the department’s action are not bona fide and does not speak well of its attitude. Mala fides are writ large because new grounds supporting the rejection have been taken in the counter affidavit though such action is not permissible as per Mohinder Singh Gill vs. CEC AIR 1978 SC 851. The Department cannot take advantage of its own inaction and lapses and say that the certificate cannot be issued as the FY is over. Such action would lead to unnecessary complication for the assessee and the parties dealing with it. As held in Dabur India Ltd State of UP AIR 1990 SC 1814, the Govt. cannot be permitted to play “dirty games” with the citizens of the country to coerce them in making payments which the citizens were not legally obliged to make. If any money is due to the Govt., it should take appropriate steps, but it should not take extra legal steps or adopt the course of maneuvering. The Dept. has to be careful in future not to indulge in such avoidable circumstances which create an impression that the intention of the Department is not to help the assessee but to harass them. This matter needs to be inquired into by the concerned CCIT and appropriate action should be initiated against the erring officer

Though the High Court’s order was communicated to the department directing a release of the truck without any conditions, the department wrongly demanded 100% cash security and 100% Bond for the said release. The act of issuing show cause notice to avoid giving release is in direct confrontation with the judicial order of the Court. The plea raised with respect to investigation and confiscation is “absolutely frivolous and ridiculous” and has been raised to save from punishment of contempt. Also, the act of justifying the action and simultaneously tendering unqualified apology is a “double faced stance” which is against the settled principle of law. The Asst/Dy Commissioner, Customs, being a senior officer, should have known his limits and by crossing those limits, he has committed gross contempt. He is accordingly punished with simple imprisonment of three months & fine of Rs. 2,000. Also, as the act may constitute “corrupt practice”, the CBEC may consider prosecuting him