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S. 147 Reopening: High Court should decide (i) validity of s. 148 notice where assessment is made u/s 143(1) & not u/s 143(3), (ii) whether notice can be said to be based on change of opinion if there is no foundation to form any such opinion, (iii) Whether requirements of s. 148 are satisfied, namely, that it contains the facts constituting the "reasons to believe" and furnishes the necessary details for assessing the escaped income and (iv) whether finding recorded by ITAT on merits is legally sustainable
PCIT vs. Nokia India Pvt. Ltd
(2019) TaxCorp(LJ) 18018 (SC) · Section 147
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S. 68 Bogus Share Premium: No reason to interfere. SLP dismissed. High Court held there is no limitation on the amount of premium that can be charged. The AO cannot question the transaction merely because he thinks the investor could have managed by paying a lesser amount as share premium. It is the prerogative of the Board of Directors to decide the premium and it is the wisdom of the shareholder whether they want to subscribe to shares at such a premium or not. S. 68 does not apply as the funds were received through banking channels and the identity, creditworthiness and genuineness of the investors was established
PCIT vs. Chain House International (P) Ltd
(2019) TaxCorp(LJ) 18017 (SC) · Section 68
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S. 14A/ Rule 8D: In the absence of any exempt income, disallowance u/s 14A & Rule 8D of the Act of any amount is not permissible (Essar Teleholdings 401 ITR 445 (SC) followed, Cheminvest 378 ITR 33 (Del) approved)
PCIT vs. Oil Industry Development Board
(2019) TaxCorp(LJ) 17997 (SC) · Section 14A
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Articles 136, 141: Entire law on legal effect of dismissal of a Special Leave Petition (SLP) by a speaking/ non-speaking order explained. If the dismissal is by a speaking order & reasons are given, the same is a declaration of law which is binding under Article 141. The findings are also binding by way of judicial discipline. However, this does not mean that the order of the lower court has merged in the dismissal order of the Supreme Court
Khoday Distilleries Ltd vs. Sri Mahadeshwara Sahakara Sakkare Kharkhane Ltd
(2019) TaxCorp(LJ) 17994 (SC)
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SC - SLP Dismissed - HC had rejected assessee's Sec. 12A registration claim with retrospective effect.
KERALA CRICKET ASSOCIATION Vs COMMISSIONER OF INCOME TAX
(2019) TaxCorp(LJ) 17941 (SC) · Section 12A
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SC - Deduction u/s.36(1)(iii) available with respect to funds given to subsidiaries where the interest free funds available to assessee were sufficient to meet its investment.
Reliance Industries Ltd Vs COMMISSIONER OF INCOME TAX
(2019) TaxCorp(LJ) 16902 (SC) · Section 36(1)(iii)
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SC - SLP Dismissed - The attempt to blame the Chartered Accountant cannot result in the assessee's exoneration, the penalty u/s 271(1)(c) was rightly imposed.
M/S. JIVANLAL AND SONS VERSUS ASSISTANT COMMISSIONER OF INCOME TAX 13 (2)
(2019) TaxCorp(LJ) 16896 (SC) · https://taxcorp.in/FileOpenDT.aspx?ID=75623&Category=Judgment&CategoryType=Zip
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S. 14A/ 36(1)(iii): If the interest free funds available to the assessee are sufficient to meet its investment, it could be presumed that the investments are made from the interest free funds available with the assessee and not from borrowed funds
CIT vs. Reliance Industries Limited
(2019) TaxCorp(LJ) 16893 (SC) · Section 14A/ 36(1)(iii)
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Defunct companies: The fact that the assessee company stands dissolved as a defunct company u/s 560(5) of the Companies Act, 1956 does not mean that income-tax proceedings & appeals become infructuous. The liability against such companies has to be dealt with in accordance with s. 506(5) proviso (a) of the Companies Act and Chapter XV of the Income Tax Act which deal with "liability in special cases" and "discontinuance of business or dissolution"
CIT vs. Gopal Shri Scrips Pvt. Ltd
(2019) TaxCorp(LJ) 16844 (SC)
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S. 37(1)/40A(2) Business expenditure vs. sharing of profit: The AO has to take into account the manner in which the business works, the modalities and manner in which SAP/additional purchase price/final price are decided and determine what amount forms part of the profit. Whatever is the profit component is sharing of profit/distribution of profit and the rest is deductible as expenditure
CIT vs. Tasgaon Taluka S.S.K. Ltd
(2019) TaxCorp(LJ) 16805 (SC) · Section 37(1)/40A(2)
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S. 226 illegal Recovery - Strictures against DCIT: High Court was not justified in its remarks against the DCIT and in issuing directions that (i) ‘deadwood’ should be weeded out (ii) personal costs of Rs. 1.5 lakh should be imposed (iii) adverse entry should be made in the Annual Confidential Report (iv) Denial of promotion etc. The directions were wholly unnecessary to the lis before the Court & are expunged
Sanjay Jain vs. Nu Tech Corporate Service Ltd
(2019) TaxCorp(LJ) 16772 (SC) · Section 226
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S. 80-HH/ 80-I/ 80-AB: There is a difference between 'income' referred to in s. 80-AB and 'profits & gains' referred in s. 80-HH/80-I. Deduction u/s 80-HH/ 80-I has to be computed on the ‘profits and gains’, without deducting therefrom ‘depreciation’ and ‘investment allowance’ & not from ‘income’ as computed under the Act. S. 80AB is prospective. Motilal Pesticides 243 ITR 26 (SC) reversed
M/s Vijay Industries vs. CIT
(2019) TaxCorp(LJ) 16771 (SC) · Sections 80-HH/ 80-I/ 80-AB
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S. 68 Bogus share capital/ premium: The practice of conversion of un-accounted money through cloak of Share Capital/Premium must be subjected to careful scrutiny especially in private placement of shares. Filing primary evidence is not sufficient. The onus to establish credit worthiness of the investor companies is on the assessee. The Assessee is under legal obligation to prove the receipt of share capital/premium to the satisfaction of the AO, failure of which, would justify addition of the said amount to the income of the Assessee
PCIT vs. NRA Iron & Steel Pvt. Ltd
(2019) TaxCorp(LJ) 16764 (SC) · Section 68
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SC - SLP dismissed - HC had held that two Initial Assessment Year is permissible in 80IC for 100 % deduction.
PR. COMMISSIONER OF INCOME TAX VERSUS M/S STOVEKRAFT INDIA
(2019) TaxCorp(LJ) 16743 (SC) · http://taxcorp.in/FileOpenDT.aspx?ID=75847&Category=Judgment&CategoryType=Zip
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SC - Amendment made in Section 80AB, inserted by Finance (No. 2) Act, 1980 with effect from 1st April, 1981 have prospective effect.
M/S. VIJAY INDUSTRIES VERSUS COMMISSIONER OF INCOME TAX
(2019) TaxCorp(LJ) 16742 (SC) · http://taxcorp.in/FileOpenDT.aspx?ID=75848&Category=Judgment&CategoryType=Zip
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SC - Sec. 80HH deduction is available on gross profits without deducting depreciation and investment allowances.
M/S. VIJAY INDUSTRIES Vs COMMISSIONER OF INCOME TAX
(2019) TaxCorp(LJ) 16735 (SC) · Section 80HH
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SC - SLP Dismissed - Sub-section [1A] of Sec. 244A (inserted w.e.f June 1, 2016) not meant to have retrospective effect.
Nima Specific Family Trust Vs ASSISTANT COMMISSIONER OF INCOME TAX
(2019) TaxCorp(LJ) 16734 (SC) · Section 244A(1A)
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SC - SLP Dismissed - 'Factual error' pointed out by Audit party would not constitute objectionable/tangible material for AO to initiate re-assessment.
FIS GLOBAL BUSINESS SOLUTIONS Vs ASSTT. COMMISSIONER OF INCOME TAX
(2019) TaxCorp(LJ) 16733 (SC)
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SC - HC's order remanded as it did not contain the reason(s)/ground(s) for arriving at a particular conclusion.
Rashtradoot (HUF) Vs Commissioner of Income TaxI
(2019) TaxCorp(LJ) 16725 (SC)
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S. 80-IC: An assessee availing exemption of 100% tax on setting up of a new industry, which is admissible for 5 years, and either on the expiry of 5 years or thereafter (but within 10 years) from the date when these assessees started availing exemption, they carried out substantial expansion of its industry, from that year the assessees become entitled to claim exemption @ 100% again (Classic Binding Industries 407 ITR 429 held not good law and reversed)
PCIT vs. Aarham Softronics
(2019) TaxCorp(LJ) 16668 (SC) · Section 80-IC
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