It could not be the intention of the legislature that the benefit of s. 10 (10C) should be restricted in the case of employees who retired before 1.4.2004 only to the sum actually received while employees who retired subsequently will get the benefit also in respect of amounts payable in subsequent financial years. Accordingly, the amendment is was clarificatory and curative in nature and applies even to employees who retired prior to 1.4.2004 and received VRS in installments.
The Income-tax Act is a special law. The nature of the remedy provided therein are such that the legislature intended it to be a complete code by itself which alone should govern the several matters provided by it. The scheme of the Income-tax Act supports the conclusion that the time limit prescribed u/s 260A to file an appeal before the High Court is absolute and unextendable by court u/s 5 of the Limitation Act and the limitation cannot be extended by invoking the provisions of s. 5 of the Limitation Act. Since the appeals were filed beyond the prescribed period of 120 days they had to be dismissed on the ground of limitation.
It is beyond comprehension how expenditure incurred on the project itself can be disallowed on the ground that it was incurred prior to setting up the project office. When computing the income of the project as a whole including that part which relates to the period anterior to the setting up of the project office, there can be no question of not allowing such expenditure which is relatable to the period prior to the setting up of the project. If the expenditure is identifiable with the project, it has to be allowed as a deduction under the matching concept.
The fact that the proviso to s. 112 uses the words ‘before giving effect to the second proviso to s. 48’ does not mean that the benefit of the lower rate can be given only to those cases eligible for the indexation benefit. Even non-residents who are not eligible for indexation are eligible for the lower rate of 10%.
The Revenue’s submission that prima facie satisfaction of the AO need not be reflected at the stage of initiation is not acceptable. The presence of prima facie satisfaction for initiation of penalty proceedings was and remains a jurisdictional fact which cannot be wished away even post amendment. If an interpretation such as the one proposed by the Revenue is accepted then s. 271 (1B) will fall foul of Article 14 of the Constitution as it will then be impregnated with the vice of arbitrariness. The AO would then be in a position to pick a case for initiation of penalty merely because there is an addition or disallowance without arriving at a prima facie satisfaction with respect to infraction of s. 271 (1)(c).
The effect of Vinod Solanki vs. UOI (233) ELT 157 (S.C.) is that in criminal or quasi criminal proceedings, a person accused of commission of offence under FERA has not to prove to the hilt that confession has been obtained from him by inducement or threat by the person in authority. However, when confession had been retracted, the Court must bear in mind the attending circumstances and other relevant factors to come to conclusion whether the confession was voluntary and was not obtained by any inducement, threat or force. At the same time, mere retraction of the confession may not be sufficient to make confessional statement irrelevant for the purpose of quasi criminal proceedings and the Court is obligated to take into consideration the pros and cons of confession and retraction made by the accused.
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 »
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 »
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.
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.