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DATE: July 24, 2009 (Date of publication)
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Sale & Lease back transactions are not a “sham” The assessee, a State Electricity Board, sold energy saving devices on which 100% depreciation was permitted and took the same assets on lease and claimed a deduction for the lease rent. …

CIT vs. Punjab State Electricity Board (Punjab & Haryana High Court) Read More »

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DATE: (Date of pronouncement)
DATE: July 21, 2009 (Date of publication)
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Replacement expenditure is neither “current repairs” nor “revenue” The assessee incurred expenditure on replacement of machinery in a textile mill and claimed the same as revenue expenditure on the ground that it was merely for replacement of spare parts in …

CIT vs. Sri Mangayarkarasi Mills (Supreme Court) Read More »

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DATE: (Date of pronouncement)
DATE: July 18, 2009 (Date of publication)
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Para 13.1 of Accounting Standard 7 (AS-7) mandates that a foreseeable loss on the entire contract should be provided for in the financial statements irrespective of the amount of work done and the method of accounting followed; The fact that AS-7 has not been notified by the Central Government as an accounting standard for purposes of s. 145 (2) is not relevant; In principle, anticipated losses on incomplete projects are allowable as a deduction subject to their being calculated as per AS-7.

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DATE: (Date of pronouncement)
DATE: July 17, 2009 (Date of publication)
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A Co-op housing society is a mutual association and even transfer fees received from transferee members is exempt on the ground of mutuality because the fee can be appropriated only if the transferee is admitted to membership. If the transferee is not admitted, the moneys will have to be refunded. However, if an amount is received more than what is chargeable under the Bye-laws or Government directions, the society is bound to repay the same and if it retains the same it will be in the nature of profit-making and that amount will be chargeable to tax.

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DATE: (Date of pronouncement)
DATE: July 16, 2009 (Date of publication)
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The judgment in Dharmendra Textile cannot be read as laying down that in every case where particulars of income are inaccurate, penalty must follow. What has been laid down is that qualitative difference between criminal liability u/s 276C and penalty u/s 271(1) ( c) had to be kept in mind and approach adopted to the trial of a criminal case need not be adopted while considering the levy of penalty. Even so, the concept of penalty has not undergone change by virtue of the said judgment. Penalty is imposed only when there is some element of deliberate default and not a mere mistake. In view of the finding that the furnishing of inaccurate particulars was simply a mistake and not a deliberate attempt to evade tax, penalty was not leviable.

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DATE: (Date of pronouncement)
DATE: July 15, 2009 (Date of publication)
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Although at the time of hearing, the initial impression was to write a reference to the President for constituting a larger Bench the fact that an appeal has been filed in the Bombay and Delhi High Courts against Daga Capital mean that (as per the decision of the President in Star India) a reference to a larger bench cannot be made. However, the appeals should be blocked for 6 months or till the disposal of appeal by the Bombay High Court in Daga Capital whichever is earlier.

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DATE: July 14, 2009 (Date of publication)
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Once the Apex Court in Hongo India 236 E.L.T. 417 has held that the High Court has no power to condone delay in filing Appeal under s. 35 G of the Excise Act, we have no option but to hold that this Court has no power to condone delay under s. 260 A because s. 260 A is pari materia with s. 35 G of the Excise Act. As the appeals were delayed, they had to be dismissed

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DATE: (Date of pronouncement)
DATE: July 9, 2009 (Date of publication)
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Prior to 1.4.1988, Ss. 41(1) and 41(2) both existed on the statute book. S. 41(1) deals with recoupment of trading liability while s. 41(2) deems balancing charge to be business income. Both operate in different spheres. If the argument of the department that balancing charge should be read as falling within the scope of s. 41(1) is accepted then it was not necessary for Parliament to enact S. 41(2) in the first instance. Section 41(1) alone would have sufficed.

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DATE: July 8, 2009 (Date of publication)
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Under Article 217(2) (b) “right to practice” is the prerequisite constitutional requirement of the eligibility criteria and not “actual practice”. There is a basic difference between “eligibility” and “suitability”. The process of judging the fitness of a person to be appointed as a High Court Judge falls in the realm of “suitability” and is governed by Article 217(1). “Eligibility” is an objective factor and falls within the scope of judicial review. However, the question as to who should be elevated, which essentially involves the aspect of “suitability” and evaluation of the worth and merit of a person, stands excluded from the purview of judicial review.

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DATE: (Date of pronouncement)
DATE: July 6, 2009 (Date of publication)
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In view of the retraction of the statement and the decision of the Supreme Court in Vinod Solanki V/s. UOI 2008 (16) Scale 31, the retracted confession can be relied upon only if there is independent and cogent evidence to corroborate the confession

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