Year: 2020

Archive for 2020


DIT v. Morgan Stanley & Co. (2007) 292 ITR 416/210 CTR 419/162 Taxman 165/201 Taxation 160 (SC)

S. 92C: Avoidance of tax – Transfer pricing – Arms’ length price –Transactional Net Margin Method is the appropriate method in the case of service PE as it apportions the total operating profit arising from the transaction on the basis of sales, costs, assets, etc -Attribution of profit to permanent establishment – DTAA – India-USA. [S.9(1) , 90 , 92B , Art. 7]

UOI v. Azadi Bachao Andolan (2003) 263 ITR 706/132 Taxman 373/184 CTR 450 (SC)

S. 90 : Double taxation relief – India – Mauritius DTAA – Circular No. 789 ( 2000) 243 ITR (St) 57 , not ultra vires the provisions of the Income-tax Act [S.2(17, 5(2) , 6(3) , 119 , Art .3, 4, 13(4) ]

CIT v. P.V.A.L. Kulandagan Chettiar (2004) 267 ITR 654/137 Taxman 460/189 CTR 193 (SC)

S. 90 : Double taxation relief – Business income arising out of rubber plantations in Malaysia cannot be taxed in India – capital gains derived from immovable property is not taxable in India as the property being situated in Malaysia – In case of conflict between Income-tax Act and the provisions of DTAA, provisions of DTAA would prevail over the provisions of Income-tax Act – DTAA India – Malaysia [S. 4, 5, 28(i), 45, Art . 4, 5, 6, 7 & 22]

CIT v. Veena Developers (2015) 277 CTR 297/119 DTR 237/66 taxmann.com 353 (SC)

S. 80IB(10) : Housing Projects – If the project is approved by local authority as housing project with convenience shopping the assessee is entitled to deduction – Prior to
1-4-2005 – Clause (d) inserted to Section 80IB(10) with effect from 1-4-2005 is prospective and not retrospective and hence cannot be applied for the period prior to 1-4-2005.

CIT v. Chetak Enterprises Pvt. Ltd (2020) 423 ITR 267/313 CTR 489/187 DTR 351/115 taxmann.com 108 / 272 Taxman 509(SC)

S. 80IA: Industrial undertaking – Conversion of a partnership firm into a company – Part IX of Companies Act – As per S. 575 of the Companies Act, the conversion of a partnership firm into a company under Part IX causes a statutory vesting of all assets of the firm into the company without the need for a conveyance – The business of the firm is carried on by the company and the latter is eligible for the benefits of S. 80IA(4) of the Act. [S. 80IA(4), Companies Act, 1956 , S. 575 ]

India Cine Agencies v. CIT (2008) 175 Taxman 361/220 CTR 223/(2009) 308 ITR 98/15 DTR 121/209 Taxation 410 (SC) Computer Graphics Ltd. v. CIT (2008) 175 Taxman 361/220 CTR 223/(2009) 308 ITR 98/15 DTR 121/209 Taxation 410 (SC)

S. 80HH: Newly established industrial undertakings – Backward areas – Manufacture – Conversion of Jumbo rolls into small flat and rolls amounts to manufacture . [S. 2(29B), 32AB ,80I]

CIT v. Bongaigaon Refinery & Petrochemical Ltd. (2012) 349 ITR 352/210 Taxman 229/79 DTR 8/254 CTR 98 (SC)

S. 80HH: Newly established industrial undertakings – Maintenance of separate books of accounts unit wise is not mandatory – Neither section 80HH, nor section 80I statutorily obliged assessee to maintain accounts unit wise – Consolidated accounts held to be valid and revision held not valid. [S. 80I, 263]

Purshottam Khatri v. CIT (2019) 419 ITR 475/267 Taxman 503/(2020) 312 CTR 323/185 DTR 177 (SC)

S. 69 : Unexplained investments – Income from undisclosed sources – Non-Resident – Deposit in NRI Accounts – Deletion of addition by the Tribunal based on the evidences – Reversal of the order of Tribunal by the High Court is held to be not valid – Oder of the Tribunal is affirmed. [S. 158BB, 158BC 260A, Foreign Exchange Regulation Act, 1973, S.13]

PCIT v. NRA Iron & Steel Pvt. Ltd. (2019) 412 ITR 161/262 Taxman 74/175 DTR 289/307 CTR 353 (SC).

S. 68 : Cash credits-Bogus share capital / premium-The assessee is under legal obligation to prove the receipt of share capital / premium to the satisfaction of the Assessing officer , failure of which, would justify addition of the said amount to the income of the assessee-Mere mention of income tax file number of an investor is not sufficient to discharge the onus-Credit worthiness of the investor companies was not discharged- In present case in wake of field inquiries made by ‘AO’ revealing non existence of investor companies and the onus to establish the identity of the investor companies, was not discharged by the assessee– Addition under section 68 of Rs. 17,60,00,000 was restored. [ S. 131 ]

CIT v. J. H. Gotla (1985) 156 ITR 323/48 CTR 363/23 Taxman 14 (SC) 1985 AIR 1698

S.64: Clubbing of income – Clubbing of the share of ‘income’ of wife and minor children – Income include loss- Loss can be clubbed and carried forward like income – Though equity and taxation are often strangers, attempts should be made that these do not remain always so and if a construction results in equity rather than in in-justice, then such construction should be preferred to the literal construction if strict literal construction leads to an absurd result i.e. result not intended to be subserved by the object of the legislation found out in the manner indicated before, and if another construction is possible apart from strict literal construction then that construction should be preferred to the strict literal construction- The scheme of the Act has to be considered in holistic manner which in this case is, to counteract, the effect of the transfer of assets so far as computation of income of the assessee is concerned .[S. 70 , 71 , 72 , Income tax Act, 1922 , S. 16(3) 24(2) ]