Recent INCOME TAX Cases
Income Tax - THE COMMISSIONER OF INCOME TAX-V versus RELIANCE ELECTRONICS INDUSTRIES INDIA LIMITED = 2008
Date of Decision: July 16, 2008 - HIGH COURT DELHI
Addition on account of obsolete stock - assessee was in the business of mfg. television sets which required electronic components in respect of which technical obsolescence was a well-known fact - tribunal is justified in concluding that the assessee had valued its closing stock at the approximate market value as estimated by a qualified Chartered Engineer and AO could not point out any defect in the valuation report - no substantial question of law arises – revenue appeal dismissed
Income Tax - THE COMMISSIONER OF INCOME TAX DELHI (CENTRAL)-III versus M/S D. D. SALES CORPORATION = 2008 - TMI - 30048Date of Decision: July 22, 2008 - HIGH COURT DELHI
Question was with regard to the bar of limitation in making an assessment order u/s 158 BC - search having been conducted on 29.08.96 /30.08.96, the assessment made on 31.10.1997, is barred by limitation in view of the provisions contained in Section 158 BE - impugned order having been passed beyond the period of one year from the end of the month in which the last authorization for search had been executed - no substantial question of law arises – revenue’s appeal is dismissed
Income Tax - M/S KESHAV SHARES and STOCKS LIMITED versus INCOME TAX OFFICER AND OTHERS = 2008 Date of Decision: July 2, 2008 - HIGH COURT DELHI
Assessment u/s 143 - demand on account of income tax & interest raised - prior to the making of assessment order, no speaking order was passed by AO in respect of the objections taken by the assessee in its letter dated 17.09.07– in view of decision in Smt Kamlesh Sharma v. B.L. Meena, Income-Tax Officer case & inasmuch as the directives of the Supreme Court in GKN Driveshafts we set aside the assessment order – AO is directed to pass a speaking order and then proceed with assessment
Income Tax - COMMISSIONER OF INCOME TAX, DELHI-V. versus RBG INVESTMENT and FINANCE LTD. = 2008 Date of Decision: July 21, 2008 - HIGH COURT DELHI
Arrangement made between assessee & certain mutual funds with regard to subscription of fully convertible debentures, offered as a rights issue by the assessee’s sister concern - mutual funds were assured fixed rates of returns & assessee was able to obtain the fully convertible debentures of sale debentures only to make profits – so these can’t be treated as non business transaction - service charges were allowable expenses u/s 37 as they were wholly and exclusively expended for the business
Income Tax - COMMISSIONER OF INCOME TAX DELHI (CENTRAL)-III versus J.P.M FARMS (PVT.) LTD. = 2008 Date of Decision: July 18, 2008 - HIGH COURT DELHI
Levy of surcharge - proviso to Section 113 of the Income Tax Act, 1961 was inserted w.e.f 1.6.2002 whereby surcharge was sought to be levied by revenue on tax payable on undisclosed income determined in a block assessment year (1.4.1990 to 19.3.2001) - ITAT was correct in law in holding that the surcharge U/S 113 of the Income Tax Act, 1961 was not leviable in the present case - issue does not require any further investigation
Income Tax - COMMISSIONER OF INCOME TAX, DELHI-X versus M/S PRIMA INDIA PRODUCTS = 2008 Date of Decision: July 11, 2008 - HIGH COURT DELHI
Commissioner’s order u/s 263 requiring further investigation as Income-tax Officer had failed to enquire into the source of deposits/investments – Commissioner’s order merely raise doubts & suspicion - Tribunal is justified in concluding that the investments made by the assessee and its partners had a direct nexus with the sum disclosed by the assessee before the Settlement Commission - no further examination was required by the Income-tax Officer – revenue appeal dismissed
Income Tax - MALABAR AND PIONEER HOSIERY P. LTD. Versus COMMISSIONER OF INCOME-TAX = 2008 Date of Decision: January 16, 2008 - KERALA HIGH COURT
Preliminary expenditure incurred for construction of a shopping complex cannot be anything other than a capital expenditure as it goes to add to the capital of the project - Obviously, impugned expenditure is capital in nature & cannot be treated as revenue expenditure - rectification carried out u/s 154 of the Income-tax Act is perfectly justified - Tribunal rightly dismissed the assessee’s appeal on the validity of rectification as well as against disentitlement for the claim
Income Tax - COMMISSIONER OF INCOME-TAX Versus KARTAR SINGH AND CO. = 2008 Date of Decision: January 29, 2008 - PUNJAB AND HARYANA HIGH COURT
Issue whether deduction of interest & salary paid to partners could be disallowed or not in a case where the assessment was completed u/s 144(on status of registered firm), is highly debatable – AO rectified the assessment order on ground that since assessment was completed u/s 144, the status of firm was required to be taken as association of persons & hence disallowed deduction claim of assessee – impugned mistake is not apparent from record, hence rectification order is not valid
