01- 08 -2018 - Views: 27

Reported Judicial Decisions

Statute: Income Tax Act – Sec.2(22)(e ) – Recipient company not shareholder

Decision in favour of : Assessee

Title  : CIT vs Madhur Housing & Development Co

Citation: 163 DTR SC 519

Bench: Supreme Court of India

Loan given to a company in which the persons who are having substantial interest also held majority shares in the lender company is not assessable as deemed dividend in the hands of the recipient company.


Statute: Income Tax Act – Sec.4 – Mutuality – Collection from members

Decision in favour of : Assessee

Title  : ITO vs Venkatesh Premises Co-operative Society Ltd

Citation: 163 DTR SC 465

Bench: Supreme Court of India

Receipt by a co-operative society from its members i.e. non-occupancy charges, transfer charges, common amenity fund charges and certain other charges are exempt from income tax based on doctrine of mutuality.


Statute: Income Tax Act – Sec.5 – Interest on NPA of NBFC

Decision in favour of : Assessee

Title  : CIT vs Vasisth Chay Vyapar Ltd

Citation: 163 DTR SC 169

Bench: Supreme Court of India

Since the ICD given by the assesse NBFC has become NPA as per prudential norms issued by RBI and no interest has been received even in the succeeding years, High Court was justified in holding that interest income of NPA cannot be said to have accrued to the assesse.


Statute: Income Tax Act – Sec.32 (1)(ii) – Brand Value

Decision in favour of : Assessee

Title  : DCIT  vs  Kuantum Papers Ltd

Citation: 62 ITR Trib 439

Bench: ITAT Delhi

Issue relating to allowing the depreciation on paper brand was squarely covered by the decision of the Tribunal which had held that the interpretation of the Assessing Officer that since “brand” was not specifically mentioned in section 32(1)(ii) , it could not be equated with “trade mark” and hence, depreciation was not admissible was not sustainable because the section specifically included not only “trade mark” but also “any other business or commercial rights of similar nature”. 


Statute: Income Tax Act – Sec.40(a)(ia) – FA 2012 amendment retrospective

Decision in favour of : Assessee

Title  : Principal CIT  vs  Manoj Kumar Singh

Citation: 402 ITR 238

Bench: Allahabad HC

When a provision is made in fiscal statute for the benefit of the assessee, in the absence of any express provision or a provision which by necessary implication gives a different impression, such provision which is beneficial to the assessee must be read and given effect to retroactively.

The second proviso to section 40(a)(ia) of the Income-tax Act, 1961 introduced by the Finance Act, 2012 (which provides that where an assessee fails to deduct the whole or any part of the tax in accordance with the provisions of Chapter XVII-B but is not deemed to be an assessee-in-default under the first proviso to section 201(1) , i. e., the payee has filed a return taking into account such sum for computing his income, has paid the tax due on such income declared and furnishes a certificate to this effect from an accountant, the assessee shall not be subject to disallowance in respect of such sum has retrospective application.


Statute: Income Tax Act – Sec.143(2) – Service of Notice

Decision in favour of : Assessee

Title  : CIT vs V.V.Devassy

Citation: 163 DTR 76

Bench: Kerala HC

Proviso to section 143(2) speaks of ‘service’ of notice and it cannot be any interpretative process, be understood as ‘issued’. It cannot be at all said the Honourable Supreme Court in the case of ACIT vs Hotel Blue Moon had laid down that what is contemplated in section 143(2) is only issuance of notice and not service within the expiry of 12 months from the end of the month in which return is furnished; failing which it would be hit by limitation. Revenue had admitted the service of notice was three days after limitation period and there could be no further proceedings taken.


Statute: Income Tax Act – Sec.144 C(5) – Writ challenge not possible

Decision in favour of : Revenue

Title  : Hyundai Motor India Ltd  vs ITO

Citation: 163 DTR 430

Bench: Madras HC

Directions issued by DRP under section 144C(5) are not amenable to writ jurisdiction since factual aspects are involved and an appeal lies to Tribunal against order of assessment made in compliance with such directions


Statute: Income Tax Act – Sec.153A – Extrapolation of income

Decision in favour of : Assessee

Title  : Ashoka Infrastructure Ltd  vs  ACIT

Citation: 163 DTR Trib 321

Bench: ITAT Pune

Evidence found during search indicating that full income were not recorded in the books of account for certain period can be utilized for extrapolation of income of the relevant financial year; however, the said material cannot be made the basis for working the income for other years for which no incriminating documents or entries in any cash book or note books were found during search


Statute: Income Tax Act – Sec.234B(3) – Interest on income as per re-assessment

Decision in favour of : Revenue

Title  : CIT vs Baby Marine Exports

Citation: 163 DTR 503

Bench: Kerala HC

Reasoning of Tribunal that when there is no liability to interest under sub section (1), there could no liability under sub section (3) is not sustainable; in the present case, the entire tax assessed on regular assessment was set aside and advance tax paid with TDS was refunded to the asssessee. Looking at the compensatory aspect of interest, department is directed to compute the interest paid to the assesse, in ordering refund, on which a demand would be raised, which would paid by the assesse .


Statute: Income Tax Act – Sec.271(1)(c ) – No penalty in MAT cases

Decision in favour of : Assessee

Title  : Principal CIT vs Internatonal Institute of Nuero Sciences and Oncology Ltd

Citation: 402 ITR 188

Bench: Punjab & Haryana HC

Where the income computed in accordance with the normal procedure is less than the income determined by legal fiction namely the book profits under section 115JB and the income of the assessee is assessed under section115JB and not under the normal provision, the tax is paid on the income assessed under section 115JB of the Act, and concealment of income would have no role to play and would not lead to tax evasion. Therefore, penalty cannot be imposed on the basis of disallowance or additions made under the regular provisions.

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