Saturday, July 15, 2006


Right to refund of wrong deduction Hon'ble Delhi High Court in the matter of Reiter India Pvt. Ltd. Vs. Addl. CIT held that where deduction is made from the salaries of the persons who were not liable to pay tax, the deductor assessee was entitled to refund of tax, wrongly deducted and deposited with the Government provided deductee has not claimed the benefit of TDS. [283 ITR 322]

Where cash loans are genuine - no penalty u/s 271D Where there is a reasonable explanation for acceptance of cash in violation of the requirement of Section 269SS penalty u/s 271D is not exegible
as was found in CIT Vs. Kundrathur Finance & Chit Co. [283 ITR 329 ][Madrs].

Writing off of Bad Debts Hon'ble Mumbai Appellate Tribunal in the matter of DCIT Vs. Oman International Bank held that as per existing provisions of Section 36(1)(vii), after its amendment with effect from 1-4-1989, it is not obligatory on part of the assessee to prove that debt written off by him is indeed a bad debt for purpose of allowance under the aforesaid section. [100 ITR 285 ].

Deduction is allowed on Gross Income where the business of the assessee is one and indivisible and there were common overhead expenses, it was not possible to bifurcate the expenses qua exempted and non- exempted activities, deduction is allowable on gross income and not net income held under CIT v. Jamnagar Jilla Sahakari Kharidvechan Sangh Ltd. (2006) 283 ITR 116 (Guj.).

Deduction U/s. 35AB Hon'ble Income Appellate Tribunal Pune Bench in the matter of Mercedez Benz India Limited Vs. CIT held that shares issued in consideration for acquisition of know-how
was eligible for tax deduction u/s 35AB of the Income Tax Act.

Tribunal can't enhance Assessed Income Tribunal cannot enhance income originally assessed except as provided in section 251 of the Income Tax Act.

Speculation Income sec. 73 explanation Loss suffered by dealer in shares from sale of shares applied for by a dealer and allotted to it in public issue is to be taken as a speculative loss within the meaning of explanation to section 73. The same way held under AMP Spg. & Wvg. Mills Pvt. Ltd. v. ITO (2006) ITD 142 (Ahd.).


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