Sunday, February 22, 2009

SC cases - 2008 - CA -May 2009 exam

Case laws - 2008

Supreme court
1 Malayala Manorama Co. Ltd. v. CIT Companies — Minimum Alternate Tax — In respect of company consistently following the practice of debiting the depreciation at the rates prescribed by the Income-tax Rules, the Assessing Officer cannot for the purposes of S. 115J rework the net profit by substituting depreciation at the rates prescribed in Schedule XIV to the Companies Act, 1956.
2 Sahara India (Firm) v. CIT Special audit of accounts — Order u/s. 142(2A) cannot be passed without giving reasonable opportunity of being heard.
3 ACIT v. Surat City Gymkhana Appeal — Appeals of Revenue cannot be entertained if it has accepted and not challenged the ruling of the High Court passed on the issue.
4 CIT v. Xpro India Ltd. Substantial question of law — Whether credit for MAT is to be allowed before charging of interest u/s.234B and u/s.234C of the Act is a question of law.
5 Munjal Sales Corporation v. CIT Business expenditure — Interest on borrowings — Assessee has to establish, in the first instance, its right to claim deduction under one of the Sections between S. 30 to S. 38 and in the case of the firm if it claims special deduction, it has also to prove that it is not disentitled to claim deduction of applicability of S. 40(b)(iv).
6 Kerala Road Lines v. CIT Business expenditure — If income from an activity is assessed as an income, expenditure incurred in respect of that activity should be allowed.
7 Synco Industries Ltd. v. CIT New Industrial Undertaking — Special deduction — The gross total income of the assessee has first got to be determined after adjusting losses, etc., and if the gross total income of the assessee is ‘nil’, the assessee would not be entitled to deductions under Chapter VI-A of the Act.
8 K. C. C. Software Ltd. v. DIT (Inv) Search and seizure — Amounts lying in the bank account cannot be withdrawn and seized.
9 Hindustan Zinc Ltd. v. CIT Valuation of closing stock — Application to review the decision in CIT v. Hindustan Zinc Ltd. — Rejected
10 Honda Siel Power Products Ltd. v. CIT Rectification of mistake — Non-consideration of material on record amounts to mistake apparent from record.
11 G. K. Chokshi & Co. v. CIT Depreciation — A firm of chartered accountants carries on ‘profession’ and does not carry on ‘business’ and therefore is not entitled to initial depreciation u/s.32(1)(iv).
12 CIT v. Max India Ltd. Revision — Revision cannot be made where two views are possible on the date of passing of the order in revision — Retrospective amendment will not attract the provision of S. 263.
13 Enterprising Enterprises v. DCIT Capital or revenue expenditure — Amount paid for acquiring leasehold rights is a capital expenditure.
14 DGIT v. Diamondstar Exports Ltd. and Others Search and seizure — Illegal — Revenue should pay costs to the assessee.
15 CIT v. Alagendran Finance Ltd. Revision — The period of limitation commences from the date of the original assessment and not from the date of reassessment where the issue involved in revision was not the subject matter of the reason for reopening the assessment.
16 CIT v. Tara Agencies Manufacture or production — The activity of purchasing different grades and brands of tea and blending them amounts only to ‘processing’ and does not amount to ‘manufacture’.
17 T. Ashok Pai v. CIT Penalty — If an explanation given by an assessee with regard to the mistake committed by him is treated to be bona fide and it is found as a fact that he had acted on the basis of wrong legal advice, the question of his failure to discharge his burden in terms of the Explanation to S. 271(1)(c) of the Act would not arise.
Tribunal-Rept. Cases
1 ACIT v. Jehangir T. Nagree S. 45 of the Income-tax Act, 1961 — Conversion of shares into stock-in-trade would be valid u/s.45(2) even if the assessee was not carrying on the business of shares and securities before such conversion.
2 Sunita Finlease Ltd. v. Dy. CIT S. 37(1) of the Income-tax Act, 1961 — In view of CBDT Circular No. 762, dated 18th February 1998, premium on Keyman Insurance Policy is allowable business expenditure.

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