Saturday, November 15, 2008

recent Income Tax Cases

2008 SUPREME COURT

UNION OF INDIA AND OTHERS Versus DHARAMENDRA TEXTILE PROCESSORS AND OTHERS

Income Tax - Penalty u/s 271(1)(c) is a civil liability - Wilful concealment is not an essential ingredient for attracting civil liability as is the case in the matter of prosecution under Section 276C - Section 11AC of Central Excise Act and Rules 96ZQ and 96ZO have no scope for any discretion – Wilful concealment is not an essential ingredient for imposing penalty thereunder

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2008 - BOMBAY HIGH COURT

CHANDRAKANT KANTILAL SHAH AND ANOTHER Versus S.K. LAL AND OTHER

Income Tax - Purchase of immovable property - appropriate authority failed to consider the merits and demerits of the case pointed out by the petitioners. In these circumstances, it is difficult to hold that the sale instances relied upon by the Appropriate Authority were comparable and consequently, it is difficult to hold that the flat in question sought to be purchased by the petitioners has been undervalued by 15% or more than the fair market value – order of pre-emptive purchase is invalid

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2008 GUJARAT HIGH COURT

HARIKRISHNA FAMILY TRUST Versus COMMISSIONER OF INCOME-TAX

Income Tax - Taxability of rental income from sub-lessee – assessee-trust lesee of property had sub-let the property - assessee trust at no point of time indulged in any systematic business activity, hence income is not taxable as “Income from Business”.– assessee is not a owner of property, so income is not assessable as “Income from House Property” - income is liable to be taxed as “Income from other Sources” and not as “Income from House Property” or “Income from Business”

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2008 BOMBAY HIGH COURT

SHAMIM BANO G. RATHI AND ANOTHER Versus ORIENTAL BANK OF COMMERCE LTD. AND OTHERS

Income Tax - Recovery of tax - Attachment and sale – dept. ordered that sale of properly was fraudulent - Held that in the absence of a declaration by a civil court the order declaring the sale deed, as null and void, was an order without jurisdiction and consequently had to be set aside - Consequently the order of attachment dated is quashed and set aside - As the sale is legal and valid, respondent no.1 was bound to issue the TDS certificate in favour of the petitioners from 30.7.2002 onwards

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2008 KERALA HIGH COURT

COMMISSIONER OF INCOME-TAX Versus SOUTHERN TUBES

Income Tax - “Transfer” - Section 2(47) - tax on capital asset u/s 45(4) – dissolution of firm consisting of two partners – held that the transaction resulted in dissolution of the firm and partner or partners getting rights over the immovable property. Subsequent reconstitution of the firm does not affect the liability of the dissolved firm to be assessed for capital gains in terms of Section 45 (4) - hold that the transaction in both the cases is transfer within the meaning of Section 2(47)(vi)

GOLDEN QUOTE

Always have something beautiful in sight, even if it’s just a daisy in a glass.