Amounts received towards reimbursement of expenses can, under no circumstances, be regarded as a revenue Receipt and is not chargeable to income-tax;
A non-resident earning long-term capital gains on transfer of listed securities is entitled to the benefit of the lower tax rate in the proviso to section 112(1) in addition to the benefit granted by the first proviso to s. 48.
Where the income is actually received or has accrued in India, the resort to deeming provision is not warranted and s. 5(2) is sufficient to create a charge in respect of non-resident’s income. Clause (b) to Explanation 1 makes no difference to this position.
An allotment of shares is a “creation” of shares and not a “transfer” of shares. There is a vital difference between the two. An “allotment” is the creation of shares by appropriation out of the unappropriated share capital to a particular person. A share is a chose in action. A chose in action implies existence of some person entitled to the rights in action in-contradistinction from rights in possession. There is a difference between issue of a share to a subscriber and the purchase of a share from an existing shareholder. The first case is that of creation whereas the second case is that of transfer of chose in action. An allotment is not a transfer and does not attract s. 4(1)(a) of the Gift-tax Act.
The word `production’ or `produce’ when used in juxtaposition with the word `manufacture’ takes in bringing into existence new goods by a process, which may or may not amount to manufacture. It also takes in all the byproducts, intermediate products and residual products, which emerge in the course of manufacture of goods. The conversion of Jumbo rolls of photographic films into small flats and rolls in the desired sizes amounts to manufacture/production for purposes of ss. 32AB, 80HH and 80I.
While merely because in some cases revenue has not preferred an appeal that does not operate as a bar for the revenue to prefer an appeal in another case where there is just cause for doing so or it is in public interest to do so or for a pronouncement by the higher court when divergent views are expressed by the different High Courts, this is NOT SO in a case where the fact situation in all the assessment years is the same. Where the fact situation is the same, the revenue cannot prefer an appeal if they have not done so in the other cases.
As the undertaking was transferred as a going concern and there was no evidence on record to show that the compensation had been arrived at on an item-wise allocation of the various assets of the undertaking and there was no “cost of acquisition” of the undertaking, capital gains was not chargeable.
In view of the Proviso to s. 147, merely having a reason to believe that income had escaped assessment is not sufficient to reopen assessments but it must be specifically alleged by the AO in the recorded reasons that the escapement was on account of the failure of the assessee to make a full and true disclosure of material facts. In the absence of such allegation, the reopening is without jurisdiction;
Where the assessee was a company incorporated in the Netherlands and its main activity was operation of aircrafts in international traffic both for transport of passengers and cargo and its income was exempt under the Double Taxation Avoidance Agreement between India and the Netherlands and it recovered charges from an Indian company which on facts was found to be arising from the activity of cargo handling and was directly and inextricably linked to such activity, held the same was exempt. Also held in the alternative that even if the recovery of rent was to be treated as an income from other sources at the hands of the assessee, since an identical amount was paid to the Airport Authority of India, the same would be entirely offset u/s 57 (iii) against each other because there was a direct nexus between the receipt and the payment.
The words “in relation to” in s. 14A encompass not only the direct expense but also the indirect expense which has any relation to the exempt income. The argument that the words contemplate a “direct and immediate connection” between the expenditure and the exempt income cannot be accepted. Accordingly, the argument that s. 14A cannot apply to shares held as stock-in-trade cannot be accepted. The fact that the dividend income is “incidental” to the purchase of shares is also irrelevant. The question as to whether the onus is on the assessee or the AO for bringing an item of expenditure within s. 14A is also irrelevant in view of Rule 8D;