CA-M16-DT Laws-ICAI Notified Significant case laws

1 Track sheet for significant case laws This case law track sheet enables the reader to locate commentary on specific provisions. All significant case laws notified by the “Institute of Chartered Accountants of India” August 2015 Edition are incorporated in this sheet to recapitulate the day before the examination relevant for May 2016 examinations. Opposite to each case law an issue involved along with page numbers highlighted in the text at which the relevant commentary appears in “Direct Tax Laws – Quick Insight”. Case laws Year Held Issue involved Page  Amco Power Systems Ltd 2015 Kar Lumpsum consideration used in Sec. 35AB 90  Amarnath Agrawal 2015 All Conversion from leasehold to freehold 223  Bhagat Construction Co. Pvt. Ltd 2015 SC Tax paid by such an assessee is < 90% of the assessed tax 23  Chennai Properties Investments Ltd 2015 SC The letting or sub-letting is part of a trading operation 88  Dharmpur Sugar Mill (P) Ltd 2015 All Expenditure aiding efficient conduct of its business 252  Hero Cycles (P) Ltd 2015 SC Nexus between the expenditure and the purpose of business 88  IVF Advisors Private Limited 2015 ITAT Foreign currency call option/ put option 103  Joint Investments Pvt. Ltd 2015 Del Disallowance is indicated in Section 14A 144  Japan airline Co. Ltd 2015 SC Charges for use of land would be adopting naive approach 32  Muthoot Financiers 2015 Del The transaction was bona fide and not aimed to avoid any tax 100  Mangalore Ganesh Beedi Works 2015 SC Acquisition of know-how is acquisition of a capital nature 108  M.Venkateswara Rao 2015 AP Capital cont. of partners as income of firm by invoking sec. 68 104  SMS Infrastructure Limited 2015 Bom Contract is awarded to the Joint Venture 88  Somerset Place Co-op Housing Society Ltd 2015 Bom No ground for reviewing a previous judgment 231  Sati Oil Udyog Ltd 2015 SC The object of Sec. 143 (1A) is the prevention of tax evasion. 46  Taparia Tools Ltd 2015 SC Sec. 36(1)(iii) - the interest was “actually incurred” 96  Zuari Estate Development & Invest ment Co Ltd 2015 SC Intimation u/s. 143(1)(a) was deemed to be a notice u/s. 156 46 Case laws Year Held Issue involved Page  Amarshiv construction Pvt. Ltd 2014 Guj Mere receipt of income is not the sole test of chargeability 205  Calcutta knitwears 2014 SC Taxing statute should be strictly construed 18  Chironjilal Sharma HUF 2014 SC Sec. 132b(4)(b) deals with pre-assessment period 60  Controls & Switchgear Contractors Ltd 2014 Del Payment of com. Cannot be taken as payment of dividend 95  D. L. Nandagopala Reddy (Individual) 2014 Kar Assessee had given a portion of the property to his wife 86  Estate of Late HMM Vikramsinghji of Gondal 2014 SC Beneficiary no right to any part of the income 168  Gujarat State Road Transport Corpn. 2014 Guj Extended time limit u/s. 43b cannot be applied for employee’s contr. 97  Govindbhai Mamaiya 2014 SC AOP formed when two or more persons voluntarily combined 162  Handicrafts and Handlooms Export 2014 Del Subsidy received by subsidiary of government company 205  Hindustan Lever Ltd 2014 Kar Sec. 194b – tds where the winnings are wholly in kind 30  Hemant Kumar Sindhi 2014 All Existing liability postulates a liability that is crystallized 60  Intervet India P Ltd 2014 Bom Sales promotion boost sales by way of product discounts 26  Indus Towers Ltd 2014 Del Telecom tower attract 2% TDS treated as plant & machinery 32  IBM Global Services India P Ltd 2014 Kar The expenditure incurred was for use of data base – sec. 37 252  Kathiroor service co-op bank ltd 2014 SC Sec.133(6) refers to information relation to points or matters 62  Kone Elevator India Pvt Ltd 2014 SC The works contract is an indivisible contract 88  Kirloskar Oil Engines Ltd 2014 Bom The purpose test is to be applied for subsidy determination 205  Dr. Manoj Kabra 2014 All In order to declare a transfer as fraudulent u/s. 281 54  Mehak Finvest P Ltd 2014 PH Sec. 147 nowhere postulates ao cannot make addition 223  K and Co 2014 Del Interest income received on funds kept as margin money 252  Wizcraft Intern. Entertainment P. ltd 2014 Bom Treatment of com. To overseas agent; reimbursement exps 35  New Delhi Hotels Ltd 2014 Del Rental income derived from unsold flats 83  Peterplast Synthetics P Ltd 2014 Guj Period of limitation for receipt of order by assessee - sec. 254 69  Punjab Stainless Steel Industries 2014 SC Turnover means only the amount of sale proceeds received 26  Puttur Petro Products P. Ltd 2014 Kar The process of bottling of gas into gas cylinders 154  Ramoji Foundation 2014 AP Amend, alter, change or modify the objects of the trust deed 168  Samsung India Electronics P. Ltd 2014 Del Notice u/s 148 is issued, action for the notice 223  Sanjeev Lal 2014 SC Agreement to sell entered into within the prescribed period 132  Tata Chemicals Ltd 2014 SC Interest on refund has calculated from date of payment 38  TVS Motors Ltd 2014 Mad “Moulds & dies” are not independent of plant and machinery 89 [ United commercial bank 2014 SC Financial institutions mai ntain accounts in terms of the RBI Act 104  Vir Vikram Vaid 2014 Bom Personal capacity of director, let out remises to the company 140 Track sheet for significant case laws – Compiled by Chakravarthi Murali 2 Send an e-mail to quickinsightdt@gmail.com for full direct tax notes Case law Year Held Issue involved Page  Ajmer Vidyut Vitran Nigam Ltd 2013 AAR Section 9(1)(vii) transmission and wheeling charges 34  Amit Jain 2013 Del Treatment of the income fell under some other head 49  Bhartia Industries Ltd 2013 Cal Circular is in conflict with the law of the land 41  Birla VXL Ltd 2013 Guj Sales tax waiver or deferment 205  Celetronix Power India P. Ltd 2013 Bom Penalty u/s 271(1)(c) 302  Credit Suisse First Boston (Cyprus) Ltd 2013 Bom Consideration received in respect of sale of securities 180  Classic share & stock broking service ltd 2013 Bom Once the AO had given effect to order of Tribunal 46  Dewan Chand Satyapal 2013 Del Facilities provided by a diagnostic centre 153  Dixon Technologies (I) (P.) Ltd 2013 ITAT Air conditioner, DVD, microwave are 'manufacture' 156  Dresdner Bank AG 2013 ITAT Interest received by a NR banking co. From its HO 205  Ford India (P) Ltd 2013 ITAT Special incentive for boosting mega investments 205  Great City Manufacturing Co. 2013 All Remuneration is within the limits prescribed u/s 40(b)(v) 159  Groz Beckert Asia Ltd 2013 P&H Corporate membership fees 205  Hardayal Charitable & Educational Trust 2013 All Registration u/s 12AA for exemption u/s 11 and 12 168  I.C.D.S. Ltd 2013 SC Section 32 reference to ownership and usage for business 107  Jananamandal Ltd 2013 All Books cannot be rejected without pointing out specific defects 253  Jeans Knit P. Ltd 2013 Kar Refund of tax due to assessee adjusted 38  Jitendra Singh Rathore 2013 Raj Penalty proceedings u/s 271D 100  Kari mangalam onriya pengal semipu amaipu Ltd 2013 Mad Section 12AA – deemed registration applicability 168  Kichha sugar co. Ltd 2013 Utrkh Sec. 43B - due date referred for EPF employee contribution 97  Kodak India P. Ltd 2013 ITAT Modelling services are person specific covered u/s 194C 33  Meenakshi Amma Endowment trust 2013 Kar Section 12A – registration time limit 168  Model Exims 2013 All Section 195 – service of procurement of export order 35  Madan Theatres Ltd 2013 Cal Actual amount received was offered for taxation 49  Mascon Technical Services ltd 2013 Mad Public issue expenses for expansion of the capital base 253  MAK Data P. Ltd 2013 SC Surrender of income is not voluntary 49  Orchev Pharma P. Ltd 2013 SC Duty drawback treated as profit u/s 80-IB 154  Orient ceramics and industries ltd 2013 Del Glow-sign board displayed at dealers outlets 253  Pardesi Developers and Infra Pvt. Ltd 2013 Del Notice u/s. 148 is not established even ex facie 224  Pramod Mittal 2013 Del Loss suffered by an dissolved firm 160  Rassi Cement Ltd. 2013 AP Purpose should determine the nature of the receipt 205  Smt. Rama Rani Kalia 2013 All Difference between STCA and LTCA 122  S.P. Suguna Seelan 2013 Mad The incentive scheme of the NSC is not a lottery 205  Softworks computers P. ltd 2013 Bom Waiver of loan taken for relocation of office premises 205  Supreme Agro Foods Private Ltd 2013 P&H Consideration means independent examination of the evidence 73  Tripti Menthol Industries 2013 Guj Excise duty refunded for creation of industrial atmosphere 205  V. Sivakumar 2013 Mad Section 269SS applicability of firm 106  UTI Bank Ltd 2013 Guj Reasonableness of the expenditure has to be adjudged 224  Yatish Trading Co. Pvt. Ltd 2013 Bom Conversion of shares held as stock-in-trade into investment 119 Case law Year Held Issue involved Page  Areva T and D India Ltd. 2012 Del Other business or commercial rights of similar nature 109  Bell Granito Cermica Ltd 2012 Guj Excise duty is included only twin condition satisfied 253  Catholic Syrian Bank Ltd 2012 SC Bad debts write off in respect of urban advances 98  Cello Plast 2012 Bom The time to invest in the bonds get automatically extend 134  Darshan Securities (P.) Ltd 2012 Bom Unabsorbed speculation loss can be set off 103  Delite Enterprises 2012 Bom The interest on the borrowed funds 159  EKL Appliances Ltd 2012 Del TPO has no power to question business transaction 187  Enam Securities P. Ltd 2012 Bom Non-cumulative preference shares cannot be a bond 126  ICICI Bank Ltd 2012 Bom Doctrine of merger cannot be applied for re-assessment 224  ICICI Securities Primary Dealership Ltd 2012 SC Re-opening the assessment is clearly a change of opinion 224  J.K. Investors 2012 Bom Service agreement is dependent upon the rental agreement 83  Jagran Prakashan Ltd 2012 All Discount was not commission 31  Kan Construction and Colonizers (P) Ltd 2012 All Investment in purchase and sale of plots by builder 126  Kap Scan and Diagnostic Centre P. Ltd 2012 P&H Commission paid to doctors for referring patients 253  KJS India P. Ltd 2012 Del Suspension of business activities 206  Naidunia News and Networking (P) Ltd 2012 MP Foreign education of a regular employee outside India 253  Nalwa Sons Investment Ltd 2012 SC No concealment if book profit is assessed u/ s 115JB 49  Pine Packaging (P) Ltd 2012 Del Standing charges paid by the client 156  Price Waterhouse Coopers Pvt. Ltd 2012 SC Genuine mistake penalty u/s 271(1)(c) restricted to 100% 302  Pruthvi Brokers & Shareholder 2012 Bom Additional grounds before the ITAT 69  Qualcomm Incorporated 2012 ITAT A stay of the demand u/s 254(2A) 69  Radhe Developers 2012 Guj Deduction for housing project u/s 80-IB 165 3 Track Sheet for Significant Case Laws – Complied by Chakravarthi Murali Send an e-mail to quickinsightdt@gmail.com for full direct tax notes Case laws Year Held Issue involved Page  Rajendra Kumar Dabriwala 2012 Cal Interest paid on the funds borrowed subject to section 14A 96  Ravinder Kumar Arora 2012 Del House should be purchased by the assessee u/s 54F 132  Sahara Hospitality Ltd 2012 Bom A reasonable opportunity of being heard u/s 127(1) 46  Sanchit Software and Solutions Pvt. Ltd 2012 Bom Circular always be borne in mind by the officers 231  Sardar Sarovar Narmada Nigam Ltd 2012 ITAT One of categories of its business is started 252  Senior Manager, SBI 2012 All Co-owned property threshold limit 32  Shree Ram Lime Products Ltd 2012 ITAT Panchnama documents the conclusion of a search 60  Singapore Airlines Ltd 2012 Mad Runway by an aircraft analogy of a road 32  SREI Infrastructure Finance Ltd 2012 Del Approved scheme by court u/s 391of the Companies Act 195  Steel Authority of India Ltd 2012 Del 43(1) cover s only a case of subsidy, grant or reimbur sement 110  Sundaram Finance Ltd 2012 SC Contingent deposit from its customers 88  Swarnagiri Wire Insulations Pvt. Ltd 2012 Kar Set off of depreciation on windmill 153  Tecnimont ICB Private Limited 2012 ITAT ALP comparison with uncontrolled transactions 187  Telco Dadajee Dhackjee Ltd 2012 ITAT Decision of the third member order is not a final order 69  Topman Exports 2012 SC Excess of the DEPB is his profits on transfer of the DEPB 88  Triumph International Finance (I.) Ltd 2012 Bom Repayment of loan by passing book adjustment entries 101  Triveni Engg. & Industries Ltd 2012 Del Security deposits given to the landlord 206  Vandana Properties 2012 Bom Size of the plot of land minimum 1 acre u/s 80-IB 155 Case law Year Held Issue involved Page  B. Raveendran Pillai 2011 Kar Depreciation is allowable on goodwill 109  Bharat Gears Ltd. 2011 Del Outlived machinery treatment 89  Cable Corporation of India Ltd. 2011 Bom WDV is fair market value in case of scrap of an asset 111  Chiranjjeevi Wind Energy Ltd. 2011 Mad Manufacture refers bringing new goods by a process. 154  Gavin Nagar Sugar Ltd 2011 Del Carrying forward of unabsorbed depreciation 41  H. K. Buildcon Ltd 2011 Guj Reassessment subject to fulfilment of certain precondition 224  Indcom 2011 Cal Non-resident match referees are professionals 33  ITC Hotels Ltd 2011 Kar Expenditure for issue convertible debenture 253  Jagatjit Industries Ltd 2011 Delhi The nature of receipts determines the source of funds 205  K.G.Rukminiamma 2011 Kar Joint development agreement with builder 131  Kisan Sahkari Chini Mills Ltd 2011 All Incentive for capital employed 205  Lachman Dass Bhatia Hingwala (P) Ltd 2011 Del Tribunal inherent power of review 68  Manjoo and Co. 2011 Ker Unsold lottery tickets cease to be stock-in-trade 137  Meghalaya Steels Ltd. 2011 Gau Direct nexus with the manufacturing activity 154  Modi Industries ltd 2011 Del Demolition and re-erection of a cell room 89  Parle Plastics Ltd 2011 Bom Substantial part of the business u/s 2(22) (e) 140  Praveen Soni 2011 Del Claim for deduction u/s 80-IB 154  Priya Village Road shows Ltd. 2011 Del Feasibility study conducted for examining proposals. 253  Rajiv Shukla 2011 Del Computation of capital gain in case of depreciable asset 134  Ranbaxy Laboratories Ltd 2011 Del The word 'such income' used u/s 147 224  Rollatainers Ltd 2011 Del Waiver of term loan principal and interest element 102  Shanthi Bhushan 2011 Del Whether Heart is considered as plant and machinery 89  Shree Balaji Alloys 2011 J&K Refund of excise duty and grant of interest subsidy 205  Shree Mahalaxmi Transport Co 2011 Guj Transportation of building material 32  Subhash Kumar Jain 2011 P&H Order on an agreement cannot give rise to grievances 67  Tulip Star Hotels Ltd. 2011 Del Aim of formation of subsidy company 95 Case law Year Held Issue involved Page  Assam Mineral Development Corp. Ltd 2010 Gau Section 234B,234C is an integral part of assessment 48  Bhavecha Machinery and Others 2010 MP The term willful used u/s 276CC. 41  DCM Ltd. 2010 Del Closure of one textile mill unit 253  Dolat Investment Ltd 2010 Mum Access to confidential information by ITA 72  Dr. Aswath N. Rao 2010 Kar Date of sale transaction was complete 109  East India Hotels Ltd. 2010 Bom The term carrying out any work extend only to services 30  Hindustan unilever ltd 2010 Bom Date of payment is relevant criteria for deposit. 134  Hindustan Zinc Ltd 2010 Raj Expenditure for alteration of the dam 253  Lodhi Property Company Ltd 2010 Del Avoid genuine hardship in case delay in filing return. 41 Track sheet for significant case laws – Compiled by Chakravarthi Murali 2 Send an e-mail to quickinsightdt@gmail.com for full direct tax notes Case law Year Held Issue involved Page  Navin Jindal 2010 SC Renunciation of right to subscribe for additional shares. 123  Nestor Pharmaceuticals Ltd. 2010 Del 80-IB deduction is available even during trail run 154  Reliance Petro Products Pvt. Ltd. 2010 SC Details supplied by the assessee in its return are incorrect 303  Saurashtra Cement Ltd. 2010 SC Compensation for sterilization of the profit earning source 205  T.R.F. Ltd. 2010 SC Bad debts are written off as irrecoverable in the accounts 97 SHORT FORM – ABREVIATIONS Short Form Abbreviation Short Form Abbreviation AAR Authority for Advance Ruling MAT Minimum Alternate Tax ALP Arm's Length Price MF Mutual Fund AMT Alternate Minimum Tax MOA Memorandum of Association AOA Articles of Association NABARD National Bank f or Agriculture and Rural Development AOP Association of Persons NBFC Non Banking Financial Corporation CBDT Central Board of Direct Taxes NHAI National Highways Authority of India CFE Convertible Foreign Exchange OECD Organisation f or Economic Co-operation and Development CG Central Government PAN Permanent Account Number DEPB Duty Entitlement Passbook Schem e PE Permanent Establishment DRP Dispute Resolution Panel PF Provident Fund DTAA Double Taxation Avoidance Agreement PFI Public Financial Institution EC Education Cess PY Previous Year EOU Export Oriented Unit RBI Reserve Bank of India ESI Employee State Insurance REC Rural Electrification Corporation Limited ESOP Employee Stock Option Plan ROI Return of Income FBT Fringe Benefit Tax RPF Recognized Provident Fund FEMA Foreign Exchange Management Act SBI State Bank of India FII Foreign I nstitutional Investor SC Surcharge FMV Fair Market Value SEZ Special Economic Zone GDR Global Depository Receipt SG State Government HRA House Rent Allowance SHEC Secondary and Higher Education Cess HUF Hindu Undivided Family STCG Short Term Capital Gain IHP Income from House Property STT Security Transaction Tax IRDA Insurance Regulatory Developm ent Authority TCS Tax Collected at Source ITA Income Tax Authority TDS Tax Deducted at Source LIC Life Insurance Corporation of India TP Transfer Pricing LLP Limited Liability Partnership TRC Tax Residence Certificate LTA Leave Travel Allowance TAN Tax Deduction Account Number LTCG Long Term Capital Gain TIN Tax Information Network u/s Under Section ZCB Zero Coupon Bonds Case law citation related All Allahabad Mad Madras ITAT Income Tax Appellate Tribunal AP Andhra Pradesh Cal Calcutta Bom Bombay Gau Gauhathi HP Himachal Pradesh J&K Jammu and Kashmir P&H Punjab & Haryana MP Madhya Pradesh AAR Authority for Advance Ruling SC Supreme Court Ker Kerala Chhat Chhattisgarh Ori Orissa Kar Karnataka Utrkh Uttarkhand