Category: All Judgements

Archive for the ‘All Judgements’ Category


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DATE: (Date of pronouncement)
DATE: September 11, 2009 (Date of publication)
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S. 158BC provides that in determining the undisclosed income, the provisions of s. 143 (2) shall apply “so far as may be”. S. 143 (2) provides that a notice shall not be issued after the expiry of 12 months from the end of the month in which the return is furnished. The question arose whether the non-issue or belated issue of s. 143 (2) notice renders the block assessment order ab initio void. In Mudra Nanavati, the Tribunal held that the issue of the s. 143 (2) notice within the stipulated period was mandatory and that failure to do so renders the block assessment order void. This decision has been approved by the High Court following Scindia HUF where it was held that non-issue of s. 16 (2) of the W. T. Act notice rendered the s. 17 order invalid.

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DATE: (Date of pronouncement)
DATE: September 7, 2009 (Date of publication)
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Under the Companies Act it is not possible for a company to have less than two shareholders. The requirement of s. 47(v) that the whole of the share capital of the subsidiary company should be held by the holding company is certainly not the same thing as the whole of the share capital being held in the name of the holding company. If one proceeds on the basis that the entire share capital of the subsidiary company should be held in the name of the holding company, there cannot be any situation in which s. 47(v) can apply. That interpretation makes the statutory provision redundant. On facts, as the holding company was the beneficial owner of the entire share capital, s. 47 (v) applied.

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DATE: (Date of pronouncement)
DATE: September 3, 2009 (Date of publication)
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The argument that the confidential asset declarations cannot be disclosed as it would entail breach of a fiduciary duty by the CJI is also not acceptable. A fiduciary relationship is one whereby a person places complete confidence in another in regard to his affairs. From this perspective, the CJI is not in a fiduciary vis-à-vis Judges of the Supreme Court. The asset information is not held by the CJI in a fiduciary capacity. The mere fact that the declaration is marked “confidential” is of no relevance.

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DATE: (Date of pronouncement)
DATE: September 2, 2009 (Date of publication)
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Though the object behind DEPB etc is to neutralize the incidence of customs duty payment on the import content of export product DEPB credit/duty drawback receipt do not come within the first degree source as the said incentives flow from Incentive Schemes enacted by the Government or from s. 75 of the Customs Act. Such incentives profits are not profits derived from the eligible business u/s 80-IB. They are ‘ancillary profits’ of such undertakings

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DATE: (Date of pronouncement)
DATE: August 31, 2009 (Date of publication)
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As the AO had not made any disallowance u/s 14A, the Tribunal could not have not touched the question of s. 14A and made observations prejudicial to the assessee while remanding the matter. It had no jurisdiction to issue directions to the AO decide afresh on the touchstone of s. 14A and Daga Capital Management Pvt. Ltd. Accordingly, the order of the Tribunal to the extent it directed consideration of applicability of s. 14A was quashed & set aside.

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DATE: (Date of pronouncement)
DATE: August 29, 2009 (Date of publication)
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CITATION:

In Ishikawakima-Harima it was held that fees for technical services was not assessable to tax u/s 9(1)(vii) if the twin conditions of it being rendered in India and utilized in India were not satified. The amendment to s. 9 (1) suggests that the criterion of residence, place of business or business connection of a non-resident in India have been done away with for fastening the tax liability. However, the criteria of rendering service in India and the utilization of the service in India as laid down in Ishikawajma-Harima to attract tax liability u/s 9(1)(vii) remains untouched and unaffected by the Explanation to s. 9(1).

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DATE: (Date of pronouncement)
DATE: August 28, 2009 (Date of publication)
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A ‘derivative’ is a security representing the value of the underlying stocks and shares and must be given the same treatment as that given to the stocks and shares. Also, s. 43 (5) uses the term “commodity” in a wide sense and covers ‘derivatives’. Further, the fact that s. 43(5)(d) exempts certain derivatives from the ambit of the definition of ‘speculative transaction’ shows that they would otherwise have come within that term as otherwise the amendment would be redundant.

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DATE: (Date of pronouncement)
DATE: August 27, 2009 (Date of publication)
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There is not a single order made by the Apex Court which relates to a dispute between Union of India and a State, or a Department of Union of India and a State, or a Public Sector Undertaking of Union of India and a State. Hence, it is not possible to expand the scope of directions made by the Apex Court so as to include a dispute between a Department of the Central Government and a State Government Undertaking.

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DATE: (Date of pronouncement)
DATE: August 21, 2009 (Date of publication)
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Where an assessee is assessed to a loss, it may be said either that he has been assessed to a nil income and is permitted to carry forward the loss or that he is assessed to the loss figure. Whichever way one looks at it the assessed income is “less” than Rs. I lakh and s. 253 (a) would apply. If, on the other hand, one takes the view that to an assessee assessed to a loss clauses (a) or (b) or (c) of s. 253 cannot apply as they postulate assessment out of a positive figure than, it is only clause (d) which applies and, even so, the fee payable would be Rs.500/.

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DATE: (Date of pronouncement)
DATE: August 19, 2009 (Date of publication)
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CITATION:

The assessee became liable to pay “penalty” for overloading wagons under the rules of the Railways. The question arose whether the said “penalty” was disallowable under the Explanation to s. 37 (1) which provides that “expenditure incurred for any purpose which is an offence or which is prohibited by law” shall not be allowable. HELD, deciding in favour of the assessee:

 

The substance of the matter had to be looked into and given preference over the form. Though the amount was termed “penalty”, it was essentially of a commercial nature and incurred in the normal course of business and was consequently allowable.