SUPREME COURT RULING

Transcription

1 SUPREME COURT RULING 2012-TIOL-109-SC-IT Regional Director, Ongc Ltd & Anr Vs Association Of Scientific & Technical Officers, Ongc Ltd & Ors (Dated: November 7, 2012) Income tax - Sections 2(7)(c), 4, 17(2)(ii), 192(1), 200, 201(1A), Rule 3 - Perquisites - Concessions - 22nd Amendment Rules, TDS - Whether when the assesse is liable to deduct tax at source on salary, including the perquisites as per Rule 3, but fails to do do because of an interim order passed by the High Court, which is later vacated on the basis of the Apex Court decision, the assessee for the period when interim order was in force, can be deemed to be an assessee in default - Whether while vacating the interim order the HC allows three months period for compliance of the provisions of the I-T Act, the assessee is to be held to be in default and is also liable to pay interest from such a date as allowed while dismissing the writ TIOL-108-SC-IT CIT Vs Krishna Sahakari Sakhar Karkhana Ltd (Dated: September 25, 2012) Income tax - Appropriation of profit - Whether when a cooperative society of sugar sells certain quantity of sugar to sugarcane growers at concessional rate, the difference between the market price and the concessional price is to be included in the total income of the assessee-society TIOL-106-SC-IT ACIT Vs Torrent Cables Ltd (Dated: September 25, 2012) Income tax - Whether when the assessee follows the practice of including excise duty at the time of removal of goods, any fault can be found with the net method of valuing the closing stock TIOL-102-SC-IT CIT Vs United Glass Mfg Co Ltd (Dated: September 12, 2012) Income tax - Sections 37(1), 43B - Whether advance customs duty is eligible for deduction u/s 43B - Whether club membership fee paid by the company is admissible business expenditure.

2 2012-TIOL-93-SC-IT M/s Kennametal India Ltd Vs CIT (Dated: September 26, 2012) Income Tax - 'de-novo' - Whether there is any difference between the term 'reimbursement' and 'contribution' TIOL-90-SC-IT M K Shanmugam Vs CIT (Dated: September 24, 2012) Income tax Whether when the HC has over-ruled the decisions of lower adjudicating authorities on factual aspects, the remand is a proper recourse TIOL-89-SC-IT CIT Vs M/s Krishi Utpadan Mandi Samiti (Dated: September 27, 2012) Income Tax - Amounts transferred by the assessee to Mandi Parishad would constitute application of income for charitable purposes within the meaning of Section 11(1)(a) of the Income Tax Act, TIOL-88-SC-IT CIT Vs Shri Ram Honda Power Equipment Ltd (Dated: September 19, 2012) Income Tax - Special Leave Petition - Whether the excise duty payable on goods manufactured is an expense, or it is a constituent of stock - Whether the excise duty can be accounted for in the books of accounts at the time of clearance of goods from factory TIOL-87-SC-IT CIT Vs M/s Bannari Amman Sugars Ltd (Dated: September 26, 2012) Income Tax - Whether the assessing authority has the power to verify the valuation of stock declared by the assessee - Whether it is settled law that the closing stock of

3 incentive sugar is to be valued at the levy price - Whether in case the stock is valued at a higher value, between the levy price or cost price, the excess realisation would be a revenue receipt TIOL-86-SC-IT Morinda Cooperative Sugar Mills Ltd Vs CIT (Dated: September 26, 2012) Income Tax - Section 80P(2)(a)(iii) - Whether a conclusive test for a process to be termed as manufacture can be established - Whether the final product 'sugar' would make the assessee firm entitled to claim the benefit of Section 80P(2)(a)(iii), in respect of marketing of the agricultural produce grown by its Members TIOL-85-SC-IT M/s Escorts Tractors Ltd Vs CIT (Dated: September 18, 2012) Income tax - Section 32A, Rule 6D - Whether for the purpose of investment allowance u/s 32A(2)(b)(iii), a canteen can be said to be an 'industrial undertaking' - Whether a canteen fails to meet the statutory conditions only because it does not produce any article or thing as required under clause (iii) of Sec 32A TIOL-84-SC-IT Price Waterhouse Coopers Pvt Ltd Vs CIT (Dated: September 25, 2012) Income Tax - Sections 40A(7), 44AB, 139(6) & (6A), 143(3), 148, 271(1)(C), Rule 6G(2) - "inadvertent error", "human error", "silly mistake", "bona fide error" - Whether when it comes to filing of tax return, a high-calibre accounting firm is not expected to commit a silly mistake - Whether high-calibre and expertise provide any immunity to the assessee from making human error - Whether when a high-calibre accounting firm makes an inadvertent error in claiming deduction, which was also overlooked by the AO at the first instance, it warrants imposition of concealment penalty TIOL-83-SC-IT Kerala State Industrial Devt. Corporation Ltd Vs CIT (Dated: September 18, 2012)

4 Income tax - Sections 36(1)(vii), 36(2)(i)(b) - Whether when the assessee, an industrial developlment arm of the State Govt, advances loans to a JV, which is declared sick by the BIFR, applying the commercial test and business exigency test, it can be said that the assessee satisfies the twin conditions for claiming deduction of bad debt TIOL-82-SC-IT Dinosaur Steels Ltd Vs JCIT (Dated: September 13, 2012) Income tax - Sections 72, 80HH, 80I, 80IA, 143(1)(a), Whether when an allowance claimed by the assessee involves a question of law, the same cannot be disallowed by treating it as a mistake u/s Whether when the assessee claims Sec 80IA benefits before adjusting carry-forward losses based on a HC decision, although the issue was later settled against the assessee, it can be said that allowing the assessee's claim was a mistake and the same can be corrected u/s TIOL-81-SC-IT M/s Samtel India Ltd Vs CIT (Dated: September 19, 2012) Income tax - Sections 32(2), 72, 80HHC(3), 143(1), (2) & (3), Whether when the Revenue, which had allowed higher deduction u/s 80HHC(3) in the original assessment, reduces the exports benefits as it also sets off losses of earlier years and adjusts unabsorbed depreciation after the assessee files an application u/s 154, any fault can be found with the Revenue in its computation and treatment of deductions under various heads TIOL-80-SC-IT M/s Sandur Manganese And Iron Ores Ltd Vs CIT (Dated: September 18, 2012) Income tax - Sections 37(1), 40A(9) - Whether when the assessee makes payments to certain schools other than the school and society floated by it for providing education to its employees' children, such payments can be treated as reimbursements - Whether any dichotomy exists between the terms 'contribution' and 'reimburesement' TIOL-79-SC-IT

5 M/s Northland Dev. & Hotel Corporation Vs CIT (Dated: September 18, 2012) Income tax - Section 271(1)(c) - NPA - Whether when assessee errs in computing interest on loan taken from the bank and thus, the decree sum happens to be less than the outstanding amount shown in the loan account, the difference sum is to be construed as waiver of the loan by the bank - Whether penalty is warranted in such a peculiar case TIOL-78-SC-IT DIT Vs Citi Bank N A (Dated: September 14, 2012) Income Tax - Appeals - Inordinate Delay in filing appeals in High Court and Supreme Court: In cases, where huge revenue/demand from the Department is involved, invariably, there is inordinate delay in filing appeals before the High Court under Section 260A of the Income Tax Act, 1961, and in filing special leave petitions before this Court. This aspect needs to be looked into. This aspect has been brought to the notice of the learned Attorney General as well as the Ministry of Law in the past. This is one such case. Even in the past, this Court has raised a similar query. Moreover, once a matter is dismissed on the ground of delay, it has a ricocheting effect TIOL-77-SC-IT Rakesh Shantilal Mardia Vs DCIT (Dated: September 13, 2012) Income tax - Whether when the assessee earns interest income as the difference between the purchase price of debenture and redemption price, such income is required to be taxed on accrural basis in the year of allotment or spread-over basis TIOL-76-SC-IT CIT Vs P R Ganapathy (Dated: September 12, 2012) Income tax - Sec 68 - Whether when the Revenue questions the financial capacity of the NRI donors to make gift, onus is on the assessee to prove the same TIOL-75-SC-IT CIT Vs Amtrex Appliances Ltd (Dated: September 11, 2012) Income tax - Sections 35AB, 37 - Whether payment made for imported technical knowhow is revenue expenditure u/s 37.

6 2012-TIOL-74-SC-IT M/s Sundaram Finance Ltd Vs ACIT (Dated: September 11, 2012) Income Tax - Section 28 - 'contingent deposit' - 'Imprest' - 'Legal character' - 'substance over form' - 'principle of mutuality' - Whether while deciding the taxability of a receipt, the legal character of a transaction need not be reckoned with - Whether when the assessee collects certain sums from its customers as contingent deposit against some future tax liability but fails to keep that sum in a separate interestbearing bank account, such deposits counted as part of the turnover is to be treated as taxable income - Whether substance of a transaction should prevail over the form TIOL-73-SC-IT M/s Drilcos (India) Pvt Ltd Vs CIT (Dated: September 6, 2012) Income Tax - Sections 35AB, 37 - 'Licence and Technical Assistance Agreement' - Whether once Sec 35AB comes into play, then Sec 37 has no application for claiming deduction of expenditure incurred on transfer of technical knowhow - Whether the word 'knowhow' means any industrial information TIOL-71-SC-IT Karanvir Singh Gossal Vs CIT (Dated: September 6, 2012) Income tax - Sections 234A, 234B, 234C - Whether assessee is entitled to waiver of interest u/s 234A, B & C in view of CBDT Notification No 400/234/95-IT(B) dated 23rd May, 1996, vesting such powers in CCITs and DGITs TIOL-70-SC-IT M/s India Comnet International Vs ITO (Dated: September 6, 2012) Income tax - Sections 10A, 56 - Whether when assessee is engaged in the business of export of software, the interest income earned on Foreign Currency Deposits is to be assessed as 'income from other sources' u/s 56.

7 2012-TIOL-69-SC-IT CIT Vs Bongaigaon Refinery And Petrochemical Ltd (Dated: September 5, 2012) Income tax - Sections 80HH(5), 80I(7), 143(3), Whether when the assessee has three industrial undertakings eligible for Ss 80HH & 80I benefits, it is obligatory for the assessee to maintain unit-wise books for claiming the benefits TIOL-68-SC-IT CIT Vs Ahmedabad Stamp Vendors Association (Dated: September 6, 2012) Income Tax - Section 194H - Whether when cash discount is offered on sale of stamps, such discount can be construed as commission and hence, attracts provisions of Sec 194H TIOL-66-SC-IT ACIT Vs M/s Gebilal Kanhaialal HUF (Dated: September 4, 2012) Income tax - Sections 132(4), 139(1), 142(1)(ii), 271(1)(c) - Whether clause (2) of Explanation 5 to Sec 271(1)(c) prescribes any time limit within which assessee is required to deposit tax with interest TIOL-65-SC-IT M/s Godwin Steels Pvt Ltd Vs CIT (Dated: September 7, 2012) Income tax Sections 245C, 245D - Settlement Commission passes the order accepting the contention of the assessee and without application of mind and also without appreciating the objections raised by the CIT - HC quashes the order for not following proper procedure. On appeal, the Supreme Court dismisses the petition of the assessee TIOL-63-SC-IT M/s Vijay Granities Pvt Ltd Vs CIT (Dated: September 4, 2012)

8 Income Tax - Section 32A - Whether the process of mining and polishing of granites amounts to 'production' as per the provisions of Sec 32A TIOL-62-SC-IT M/s Arisudana Spinning Mills Ltd Vs CIT (Dated: September 5, 2012) Income Tax - Sections 80IA, 143(1)(a), 143(2) - Manufacturing Activity - Whether when the assessee fails to maintain separate account for its manufacturing activity, it is not entitled to claim benefit of Sec 80IA TIOL-61-SC-IT CIT Vs M/s Dynavision Ltd (Dated: August 30, 2012) Income Tax - Sections 143(3) - Whether non-inclusion of excise duty in the valuation of closing stock would lead to undervaluation TIOL-60-SC-IT CIT, Delhi Vs M/s Gold Tex Furnishing Industries (Dated: August 30, 2012) Income Tax - Demand Notice - Question of Law - Whether the Apex Court can dismiss an appeal, leaving the question of law open, on the ground of vagueness TIOL-59-SC-IT CIT, Kolkata Vs M/s Vasudhara Holdings Ltd (Dated: August 28, 2012) Income Tax - Section 56 - consent decree - takeover code - Letter of Offer - Whether compensation received as consent decree in a court case can be taxed as income from 'other sources' TIOL-57-SC-IT ACIT, Mumbai Vs ICICI Securities Primary Dealership Ltd (Dated: August 22, 2012)

9 Income tax - Sec Whether reassessment can be initiated on the basis of change of opinion TIOL-55-SC-IT CIT, Gujarat Vs Gujarat Flouro Chemicals (Dated: August 23, 2012) Income tax - Sections 195(1), 195A, 214, 219, 237, 243 & Constitution of India - Article Whether Revenue is liable to pay interest if the aggregate of instalments of advance tax and TDS paid exceeds the assessed tax TIOL-54-SC-IT CIT, Mumbai Vs M/s ZEE Telefilms Ltd (Dated: August 22, 2012) Income tax - Sections 33B, 80HHC, 80IA - Whether the process of making a film amounts to manufacture or processing of goods as per the Explanation to Sec 33B - Whether assessee is entitled to claim Sec 80IA benefits on film-making TIOL-53-SC-IT CIT, Kolkata Vs SMIFS Securities Ltd (Dated: August 22, 2012) Income tax - Sections 32(1), 36(1)(vii) - ''principle of ejusdem generis'' - depreciation - Whether goodwill is an asset as per Sec 32(1) - Whether goodwill is covered by the expression 'any other business or commercial right of a similar nature' in Explanation 3(b) to Sec TIOL-43-SC-IT CIT Vs M/s Nalwa Sons Investment Ltd (Dated: May 4, 2012) Income Tax Sections 80HHC, 115JB, 271(1)(c) Whether penalty can be imposed even in case of debatable additions - held, Revenue's petition dismissed.

10 2012-TIOL-42-SC-IT Addl.CIT Vs M/s Tulip Star Hotels Ltd (Dated: April 30, 2012) Income Tax - Sections 36(1)(iii), 57(iii) Whether the Assessee is entitled to deduction of interest on borrowed funds which were utilized by the assessee to subscribe to the equity capital of the subsidiary, which in turn used the said funds for the purpose of business TIOL-26-SC-IT CIT Vs M/s Virgo Marketing Pvt Ltd (Dated: January 6, 2012) Income tax - Sec 260A - HC dismisses Revenue's appeal on the ground of tax effect being less than the monetary limit fixed by the Board - Held, in view of the Para 11 of the Instruction No 3 of 2011, Revenue directed to move the HC for review within four weeks TIOL-16-SC-IT-LB Catholic Syrian Bank Ltd Vs CIT, Thrissur (Dated: February 17, 2012) Income Tax - Sections 36(1)(vii), 36(1)(viia), 36(2), 36(2)(v) - Whether a bank is eligible to claim a deduction for bad debts u/s 36(1)(vii) in respect of its (rural & urban) advances and also claim a provision for bad and doubtful debts u/s 36(1)( viia ) in respect of its rural advances: Whether findings recorded in the earlier assessment years to binding on the Department for subsequent years as well TIOL-13-SC-IT-LB M/s ACG Associated Capsules Pvt Ltd Vs CIT, Mumbai (Dated: February 8, 2012 ) Income tax - Sections 28(iiid), 44D, 80HHC - Whether while arriving at the profit of the business, ninety per cent of the gross interest and gross rent are to be excluded before allowing deduction u/s 80HHC - Whether when the wording of the law is clear and unambiguous, relying on the Explanatory Memorandum of the Finance Bill will be superfluous.

11 2012-TIOL-12-SC-IT-LB Vikas Kalra Vs CIT, New Delhi (Dated: February 8, 2012 ) Income tax - Sections 28(iiib) & (iiid), 80HHC - Whether entire sale consideration of DEPB is to be treated as profit for tax purposes or only the figure which is to be arrived at after deducting the face value of the DEPB from the sale consideration TIOL-11-SC-IT-LB M/s Topman Exports Vs CIT, Mumbai (Dated: February 8, 2012 ) Income Tax - Sections 28(iiia), 28(iiib), 28(iiid), 80HHC - DEPB is "cash assistance" receivable by a person against exports under the scheme of the Government of India and falls under clause (iiib) of Section 28 and is chargeable to income tax under the head "Profits and Gains of Business or Profession" even before it is transferred by the assessee - Supreme Court 2012-TIOL-10-SC-IT-LB UoI Vs Vijay Silk House (Bangalore) Ltd (Dated: February 3, 2012) Income Tax Validity of Section 80HHC All cases transferred to Gujarat High Court: looking to the large number of matters pending in various High Courts and since the question relates to vires, it would be more convenient and beneficial if all the matters are decided by one High Court in the Country. Maximum number of matters are pending in the High Court of Gujarat. Consequently, it is directed that all the matters which have been filed/transferred to this Court be sent to the High Court of Gujarat TIOL-09-SC-IT-LB AL- Kabeer Exports Limited Vs CIT, Mumbai (Dated: February 3, 2012) Income tax - Sections 80HHC, 80HHE, 115JA - deduction claimed by the assessee under Section 80HHE has to be worked out on the basis of adjusted book profit under Section 115JA and not on the basis of the profits computed under regular provisions of law applicable to computation of profits and gains of business.