In McDowell 154 ITR 148, the Court nowhere said that every action or inaction on the part of the tax payer which results in reduction of tax liability to which he may be subjected to in the future, is to be viewed with suspicion and be treated as a device for avoidance of tax irrespective of legitimacy or genuineness of the act.

The issue of notice under s. 16 (2) W. T. Act {s. 143 (2) I. T. Act} is mandatory for reassessment proceedings. If notice u/s 16 (2) {143 (2)} is not issued, the assessment order passed u/s 17 {s. 147} is not valid.

The consequences arising out of invoking Chapter XIV-B of the Act are drastic and draconian. The accounts of the assessee may be re-opened for ten years and not only a legal presumption is raised against the assessee but the burden shifts on the assessee to show that it did not have any undisclosed income. Under these circumstances the Revenue should not exercise its powers in a mechanical power but should be circumspect while taking action under the provisions of Chapter XIV-B of the Act.Where the ‘satisfaction’ recorded by the AO u/s 158 BD was vague and lacking material particulars, held the proceedings were bad-in-law.

In ACIT vs. Rogini Garments 108 ITD 49, the Chennai Special Bench of the ITAT held that in view of s. 80-IA (9), relief under s. 80-IA had to be deducted from the profits and gains before computing relief u/s …

M/s SCM Creations vs. ACIT (Madras High Court) Read More »

S. 61 of the MVAT which confers right to do audit to CAs and excludes Advocates and STPs is neither discriminatory, arbitrary or unreasonable and consequently not unconstitutional. Only CAs are competent to perform audit functions having regard to the expertise achieved as a result of their academic knowledge and practical experience.

(1) Though the assessee company was the defacto owner of the shares, the dividends could not be said to have accrued to it as it was not the dejure owner of the shares. (2) If there is an accounting standard (AS-9), the same has to be accepted in the absence of any other statutory provision.

Meaning of the terms “manufacture”, “production” and “process”. The process applied to POY either for the purpose of texturising or twisting constitutes manufacture as the article produced is recognised in the trade as distinct commodity pursuant to the process it undergoes and which amounts to manufacture.

Non-compete compensation paid to an employee for an indefinite period is business expenditure and not capital expenditure as no capital asset or benefit of enduring benefit came into existence. While the lenght of the period of the covenant is important, it is not decisive. What is more important is the purpose of the payment and its intended object and effect.