INCOME TAX RECENT CASE LAWS

The Commissioner of Income Tax Versus M/s. Dodsal Ltd. - 2008 TMI - 4603 - HIGH COURT BOMBAY
Income Tax - Deletion of penalty levied u/s158 BFA(2) - 1st proviso to Sec. 158 BFA(2) is directory or mandatory - Merely because the expression used is shall not be less than the amount of tax leviable or not exceeding three times the tax, doesn’t result in reading the first part of the section as mandatory - C.I.T. & I.T.A.T. have recorded reasons for exercise of their discretion - uphold the decision of I.T.A.T. that the section is directory, not mandatory & that the word “may” cannot be read as “shall”

COMMISSIONER OF INCOME-TAX Versus. FRONTLINE SOFTWARE AND SERVICES P. LTD. - 2008 TMI - 4591 - MADHYA PRADESH HIGH COURT

Income Tax - Assessee is utilising the technical know-how for imparting training in the computer operation for coaching the students, which is neither manufacture nor processing of goods - this activity as such is also not an activity of a mine, oil well or other sources of mineral deposits (including the searching for, discovery or testing of deposits or the winning of access thereto) – hence it is not a capital expenditure in terms of section 35AB

RELLA RAM SANT RAM Versus COMMISISONER OF INCOME TAX - 2008 TMI - 4590 - DELHI HIGH COURT

Income Tax - AO observed that Assessee has not been maintaining any stock register for any of the F.Y. comprised with the block period & the closing stock was being worked out by the Assessee only as a balancing figure, so inventory prepared by Assessee after the date of search has no meaning – additions on account of undervaluation of stock is justified – at the time of the search inventory was prepared by dept. with the aid of Asseessee’s partner, hence such valuation can’t be challenged by assessee

MEWA LAL DWARIKA PRASAD Versus COMMISSIONER OF INCOME-TAX - 2008 TMI - 4589 - ALLAHABAD HIGH COURT

Income Tax - Taxability of seized goods – held that seized goods u/s 132(5) are treated as security for the demand – assessee remains owner of seized goods & only possession is taken away by dept. – hence value of seized goods has to be reflected in the balance sheet & profit and loss account as before – seized goods bear the character of stock-in trade in hands of assessee, hence liable to be valued for the purposes of computing the taxable income of assessee


COMMISSIONER OF INCOME-TAX Versus USHA STUD AGRICULTURAL FARM LTD. - 2008 TMI - 4566 - DELHI HIGH COURT

Income Tax - Assessee failed to confirm that advance received by him was received towards advance breeding charges – detailed not furnished by assessee – held that credit balance appearing in the accounts of the Assessee, does not pertain to the year under consideration, under these circumstances, the Assessing Officer was not justified in making the impugned addition under Section 68 - no fault can be found with the order of the Tribunal which has endorsed the decision of the CIT(A)