The assessee, engaged in shipping business, owned a barge which was included in the block of assets. The barge met with an accident and sank on 6.3.2000 (AY 2000-01). As efforts to retrieve the barge were uneconomical, the barge was sold on as-is-where-is in May 2001 (AY 2002-03). As the barge was non-operational and not used for business at all in AY 2001-02, the AO denied depreciation. The CIT (A) upheld the stand of the AO. On appeal by the assessee, the Tribunal took the view that after the insertion of the concept of “block of assets” by the T. L. (A) Act, 1988 w.e.f 1.4.1988 individual assets had lost their identity and only the “block of assets” had to be considered. It was held that the test of “user” had to be applied upon the block of assets as a whole and not on individual assets. On the appeal by the Revenue, the High Court dismissed the appeal holding that the issue was squarely covered by its earlier judgements in Whittle Anderson 79 ITR 613 and G. N. Agrawal 217 ITR 250.
The judgement of the Full Bench of the Delhi High Court in CIT vs. Kelvinator of India Ltd. 256 ITR 1 where it was held that when an order u/s 143 (3) is passed, a presumption is raised that it has been passed on application of mind and that the Revenue cannot support reopening on the ground of non-application of mind because that would amount to giving a premium to an authority to take benefit of its own wrong cannot be followed as it is contrary to the law laid down by the Supreme Court in Kalyanji Mavji 102 ITR 286, Indian Eastern Newspaper Society 119 ITR 996 and A. L. A. Firm 189 ITR 285 where it was held that if the AO had not considered the material on record and subsequently came across it, the case fell within the scope of s. 147(b) and could be reopened. The Full Bench also did not consider the effect of Explanations 1 & 2 to s. 147.
The assessee, a Third party Administrator (“TPA”) licensed by IRDA, engaged in providing “cashless” health insurance claim services is required to deduct tax at source under section 194J of the Act when making payment to hospitals out of funds provided by the insurance company.
The Income-tax Act is a complete Code in itself. While the Commissioner, Commissioner (Appeals) and Tribunal have been given power to condone delay, no such power has been conferred upon the High Court u/s 260A. In the absence of a provision in s. 260A conferring jurisdiction to condone delay in filing the appeal, the Limitation Act would not apply and the delay cannot be condoned.
There cannot be two opinions about the irresistible conclusion that the orders of the settlement commission having been passed without a reasonable hearing, examination of records and due application of mind is in violation of s.245-D(4) and not sustainable.
Share broker is eligible to claim “bad debts” u/s 36 (1) (vii) / 36 (2) The assessee, a broker, purchased shares of the value of Rs.1,06,10,247 on behalf of its sub-broker. The sub-broker made payment of Rs.64 lakhs. As the …
CIT vs. DB (India) Securities (Delhi High Court) Read More »
Though the term ‘licences’ is a very wide term and includes permission to carry on any trade, business, profession, etc, it is used in s. 32(1)(ii) in a restricted sense. S. 32 restricts depreciation to a class of tangible & intangible assets specifically enumerated therein. All intangible assets enumerated in s. 32(1)(ii) (except the term ‘licences’) belong to the class of intellectual properties. As the expression ‘licences’ in s. 32(1)(ii) is preceded by the expressions know-how, patents, copyrights, trade marks and succeeded by the expression ‘franchises’ which are all relatable to intellectual property rights, the term ‘licences’ in s. 32(1)(ii) is, applying the principle of Noscitur a sociis, intended to be used restrictively and as applying only to licences relating to acquisition / user of intellectual property rights.
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.
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.
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.