Though it is the settled position under the common law that the term “owner” means a person who has valid title legally conveyed to him after complying with the requirements of law such as Transfer of Property Act, Registration Act, etc, a different view has to be taken in the context of S. 22 of the Act having regard to the ground realities and the object of the Act, namely, “to tax the income”. Accordingly, the term “owner” means a person who is entitled to receive income from the property in his own right.” There is no requirement that there has to be a registered Deed of conveyance for a person to be treated as an owner for purposes of S. 22.
Though s. 50C has been introduced by the Legislature to check the modus operandi of understating the sale consideration in the activity of civil construction and provides that the value determined or assessed by the stamp duty authorities shall be deemed to be the “full value of consideration”, its scope is confined to property held as a “capital asset”. It has no application to property held as “stock-in-trade”. Accordingly, additions on account of s. 50C cannot be made in the case of dealers in real estate.
Where the AO made a disallowance u/s 14A by estimating 10% of the expenses as being attributable to the tax free receipts and in the appeal before the Tribunal the department argued that in view of the judgement of the Special Bench of the ITAT in Daga Capital 26 SOT 603 the matter had to be remanded to the AO for applicability of Rule 8D and the judgement in Assam Travels 199 ITR 1 (SC) was relied on to contend that the remand could result in a larger disallowance than had been calculated by the AO, HELD that:
(i) While the matter had to be remitted to the AO to recalculate the disallowance under Rule 8D as held by the Special Bench, the assessee could not be worse off than it would have been if it had not filed an appeal against the assessment order. Accordingly, the AO was directed to restrict the disallowance to the original figure.
The judgement of the Supreme Court in UOI vs. Dharmendra Textile Processors 174 TM 571 fortifies the interpretation that where the assessee offers an explanation, the onus is on the assessee to substantiate the explanation or prove the bona fides and show that there is full disclosure of all the facts relating to the explanation. The AO is not obliged to prove that there was a wilful attempt by the assessee or that the explanation of the assessee is not bona fide;
The Provio to s. 113 (which imposes surcharge on block assessments), though inserted only with effect from 1.6.2002, is applicable to searches conducted prior to that date as it is ‘clarificatory’ and ‘curative’ in nature. CIT vs. Suresh N. Gupta 297 ITR 322 (SC) followed.
“Sham” lease transactions cannot be given relief as “financial arrangements”. (1) Where the AO disallowed part depreciation on bottles leased out by the assessee on the ground of “non-user” but the Tribunal & High Court confirmed the same on the …
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S. 149, which imposes the limitation period, requires the notice to be “issued” but not “served” within the limitation period. Once a notice is issued within the period of limitation, jurisdiction becomes vested in the AO to proceed to reassess. Service is not a condition precedent to conferment of jurisdiction but it is a condition precedent to the making of the order of assessment;
Where an assessee has his own funds as well as borrowed funds, a presumption can be made that the advances for non-business purposes have been made out of the own funds and that the borrowed funds have not been used for this purpose. Accordingly, the disallowance of the interest on the borrowed funds is not justified.
Where an assessment is made u/s 115JA of the Act, an assessee is not liable to pay interest for non-payment/shortfall of advance tax u/ss 234B and 234C of the Act. CIT v. Kwality Biscuits Ltd 284 ITR 434 (SC) followed;
A person accused of commission of an offence is not expected to prove to the hilt that confession had been obtained from him by any inducement, threat or promise by a person in authority. The burden is on the prosecution to show that the confession is voluntary in nature and not obtained as an outcome of threat, etc. if the same is to be relied upon solely for the purpose of securing a conviction. With a view to arrive at a finding as regards the voluntary nature of statement or otherwise of a confession which has since been retracted, the Court must bear in mind the attending circumstances which would include the time of retraction, the nature thereof, the manner in which such retraction has been made and other relevant factors. Law does not say that the accused has to prove that retraction of confession made by him was because of threat, coercion, etc. but the requirement is that it may appear to the court as such