ITR :ISSUE DATED 10-8-2009 Volume 315 : Part 1

ITR :ISSUE DATED 10-8-2009 Volume 315 : Part 1: HIGHLIGHTS

SUPREME COURT JUDGMENTS
1. Amount of enhanced compensation is deemed to be income of previous year in which it is received even if received under orders of court pending decision and assessee has to offer security : CIT v. Ghanshyam (HUF) p. 1.
2. Assessee keeping controlled commodities in its godown and delivering to retailer shops : Commission from State Government not entitled to deduction u/s 80P(2)(e) : Udaipur Sahkari Upbhokta Thok Bhandar Ltd. v. CIT p. 21
HIGH COURT JUDGMENTS

1. Order of pre-emptive purchase quashed where Appropriate Authority following empirical method and finding fair market value exceeded consideration : Ross Murarka (India) P. Ltd. v. Appropriate Authority, S. K. Laul, Member (Bom) p. 41
2. Society running a school entitled to grant of approval u/s 10(23C)(vi) where no evidence to prove surplus earned utilised for personal profit or gain of anyone including founder-manager/director : City Montessori School (Regd.) v. UOI (All) p. 48
3. Sea freight for transportation of goods not entitled to weighted deduction : CIT v. Roadmaster Industries of India P. Ltd. [FB] (P&H) p. 66
4. Sale of right to purchase open plot : Issue whether income to be treated as capital gain or casual income not decided while passing assessment order : AO justified in issuing notice for reassessment : Yuvraj v. UOI (Bom) p. 84
5. Additional commission : Expenditure allowable where assessee satisfactorily establishing that expenditure incurred exclusively for purpose of business : CIT v. Textool Co. Ltd. (Mad) p. 91
6. Expenditure on advertisement and sales promotion not entitled to weighted deduction : CIT v. Zenith Steel Pipes and Industries Ltd. (Bom) p. 95
7. Proportionate charges pertaining to printing and stationery expenses not entitled to weighted deduction : CIT v. Zenith Steel Pipes and Industries Ltd. (Bom) p.
8. Surtax not deductible u/s 37 : CIT v. Zenith Steel Pipes and Industries Ltd. (Bom) p. 95
9. Fees paid to Registrar of Companies : Capital expenditure : CIT v. Zenith Steel Pipes and Industries Ltd. (Bom) p. 95
10. Interest u/s 201(1A) not a penalty : Interest paid to be split and spread over from date interest directed to be paid till payment : CIT v. Oriental Insurance Co. Ltd. (Karn) p. 102
11. Tribunal finding sum in question was assessee's income from undisclosed sources : Addition of credit and disallowance of interest proper : Mangilal Jain v. ITO (Mad) p. 105
12. Tribunal justified in annulling assessment where notice u/s 143(2) issued after expiry of 12 months from filing of return : CIT v. PL. Gandhi (Mad) p. 110
13. Assessee filing return and represented by auditor : : Tribunal directing hearing afresh : No interference : Sumitra Menon v. Asst. CIT (Mad) p. 111
APPELLATE TRIBUNAL ORDERS

1. Contribution to employees' provident fund before due date for filing return entitled to deduction : Harrisons Malayalam Ltd. v. Asst. CIT (Cochin) p. 1
2. Book profit : Profits on sale of rubber estate excludible : Harrisons Malayalam Ltd. v. Asst. CIT (Cochin) p. 1
3. Sale of every asset attributable to specified sum of consideration not a slump sale : Harrisons Malayalam Ltd. v. Asst. CIT (Cochin) p. 1
4. Profits arising on sale of agricultural land : Surplus not a capital asset : Harrisons Malayalam Ltd. v. Asst. CIT (Cochin) p. 1
5. Shares held by assessee as investments : Loss is capital loss : Entitled to set off : Harrisons Malayalam Ltd. v. Asst. CIT (Cochin) p. 1
6. Replanting expenditure : Disallowance merely because expenditure incurred attributable to agricultural operations not justified : Harrisons Malayalam Ltd. v. Asst. CIT (Cochin) p. 1
7. Licence fee : Deletion of disallowance based on earlier deletion by Tribunal's order justified : Harrisons Malayalam Ltd. v. Asst. CIT (Cochin) p. 1
8. Sale of rubber trees not a case of capital gains : Harrisons Malayalam Ltd. v. Asst. CIT (Cochin) p. 1
9. Computation of business income at surplus earned over fair market value as on 15-1-1998 : Fair market value on that date not available on record : Matter restored for recomputing income : Smt. Naynaben R. Desai v. ITO (Ahd) p. 19
10. Export or transfer of film software, etc. : Assessee receiving only service charges and not having proprietary rights in the product : Deduction u/s 80HHF not available : Deputy CIT v. Kas Movie Makers P. Ltd. (Delhi) p. 25
11. Public undertaking under bona fide belief that gift coupons given to employees to commemorate prestigious awards earned by it not in nature of payment of salary : Employees paying regular taxes on coupons as perquisites : Penalty not exigible : Indian Petrochemicals Corp. Ltd. v. Joint CIT (Ahd) p. 40
12. Loss on cancellation of forward contracts claimed as business expenditure : Disallowance of small part of commission payments for want of confirmation letters : Penalty not exigible : Indian Petrochemicals Corp. Ltd. v. Joint CIT (Ahd) p. 40
13. Shipping company in UK engaged in transportation of cargo in international traffic on ships chartered by it and on ships operated by other enterprises under slot chartering arrangements : Not liable to tax in India : Deputy Director of I. T. (International Taxation) v. Balaji Shipping (UK) Ltd. (Mumbai) p. 62
14. Meaning of "operation of ships : Deputy Director of I. T. (International Taxation) v. Balaji Shipping (UK) Ltd. (Mumbai) p. 62
15. Interpretation of double taxation avoidance agreements : Deputy Director of I. T. (International Taxation) v. Balaji Shipping (UK) Ltd. (Mumbai) p. 62