INCOME TAX DECISIONS
Higher rate of
depreciation available for
leasing companies : Hon'ble
Delhi High Court in the
matter of Commissioner
of Income Tax Vs M.G.F.
(India) Limited held that there
was no dispute that the vehicles
which are subject to lease
agreements were in fact given
by the assessee to third parties.
To this extent, the requirement
of law had been met. There
was no additional requirement
on the assessee to show that
the third parties had used
those vehicles for hire. Therefore,
the assessee was entitled to
depreciation at forty percent on
the vehicles given on lease. [285 ITR 142]
Auditors' Report is not mandatory to be furnished along-with Return of Income to claim exemption u/s 11 : Hon'ble Andhra Pradesh High Court in the matter of CIT Vs Andhra Pradesh State Road Transport Corporation held that provision of section 12A(b) of the Income Tax Act, 1961 are directory in the nature and not mandatory. Auditors' Report not furnished along-with Return of Income but furnished before assessment was made, assessee entitled to exemption under section 11 of the Income Tax Act, 1961. [285 ITR 147]
The High Court observed that Penalty u/s 271B not attracted if audit report u/s 44AB is filed along with the return after the due date for filing return of income under section 139(4) but before issue of notice by the Assessing Officer under section 142(1). CIT v. K.K. Spun Pipe (2006) 284 ITR 0301 (P&H)
Premium collected by the company on issue of share capital is not capital employed in business for purpose of deduction u/s 35D. Berger Paints India Ltd. V. CIT [2006] 154 Taxman 293 (Del.) 1.5
Expenditure incurred on remodelling of generator is revenue expenditure. CIT v. Salem Co-operative Spinning Mills Ltd. [2006] 284 ITR 621 (Mad.)
Interest on deposits with banks not taxable for societies : Hon'ble Income Tax Appellate Tribunal, Delhi Bench in the matter of Shivalik Group Housing Society Ltd Vs Income Tax Officer held that interest income earned by mutual society on surplus funds deposited with banking institution is covered by principle of mutuality and hence, no addition could be made in the hands of society on account of such interest income. [101 ITD 391]
Corporate E Return Portal Launched: Income Tax Department has released utility to file the Income Tax and Fringe Benefit Tax Returns digitally. Assessees can upload their income tax return directly to income tax department's website i.e. www.incometaxindiaefiling.gov.in
Interest is not leviable u/s 234B and 234C in case of an assessment of a company on basis of book profits u/s 115J (Now 115 JB) CIT v. Kwality Biscuits Ltd. [2006] 284 ITR 434 (SC).
For a five star hotel, though general repairs (even if it runs into few crores) are revenue expenditure, but expenditure incurred on renovation and refurbishment of hotel is not allowable as revenue expenditure. Asian Hotels Ltd. V. DCIT [2006] 101 ITD 247 (Del).
Restriction on allowance of deduction U/s 44C : The High Court held that allowance under section 44C is allowed if both the parameters stated therein fulfilled. In the absence of any one of the parameters, the entire section 44C becomes not available. The entire head office expenditure will be allowable under section 37(1). CIT v. Deutsche Bank A.G. (2006) 284 ITR 463 (Bom.)
Restriction on allowance of deduction U/s 44C : The High Court held that allowance under section 44C is allowed if both the parameters stated therein fulfilled. In the absence of any one of the parameters, the entire section 44C becomes not available. The entire head office expenditure will be allowable under section 37(1). CIT v. Deutsche Bank A.G. (2006) 284 ITR 463 (Bom.)
The assessment has been completed but A.O. failed to initiate penalty proceedings under section 271B for failure to obtain audit report within the specified time. The High Court held that failure to initiate penalty proceedings does render the order of the assessing authority erroneous and prejudicial to the interest of revenue. Therefore, notice u/s 263 can be issued in such case. CIT v. Ganeshi Lal Ram Krishna (2006) 154Taxman 238 (All.)
Auditors' Report is not mandatory to be furnished along-with Return of Income to claim exemption u/s 11 : Hon'ble Andhra Pradesh High Court in the matter of CIT Vs Andhra Pradesh State Road Transport Corporation held that provision of section 12A(b) of the Income Tax Act, 1961 are directory in the nature and not mandatory. Auditors' Report not furnished along-with Return of Income but furnished before assessment was made, assessee entitled to exemption under section 11 of the Income Tax Act, 1961. [285 ITR 147]
The High Court observed that Penalty u/s 271B not attracted if audit report u/s 44AB is filed along with the return after the due date for filing return of income under section 139(4) but before issue of notice by the Assessing Officer under section 142(1). CIT v. K.K. Spun Pipe (2006) 284 ITR 0301 (P&H)
Premium collected by the company on issue of share capital is not capital employed in business for purpose of deduction u/s 35D. Berger Paints India Ltd. V. CIT [2006] 154 Taxman 293 (Del.) 1.5
Expenditure incurred on remodelling of generator is revenue expenditure. CIT v. Salem Co-operative Spinning Mills Ltd. [2006] 284 ITR 621 (Mad.)
Interest on deposits with banks not taxable for societies : Hon'ble Income Tax Appellate Tribunal, Delhi Bench in the matter of Shivalik Group Housing Society Ltd Vs Income Tax Officer held that interest income earned by mutual society on surplus funds deposited with banking institution is covered by principle of mutuality and hence, no addition could be made in the hands of society on account of such interest income. [101 ITD 391]
Corporate E Return Portal Launched: Income Tax Department has released utility to file the Income Tax and Fringe Benefit Tax Returns digitally. Assessees can upload their income tax return directly to income tax department's website i.e. www.incometaxindiaefiling.gov.in
Interest is not leviable u/s 234B and 234C in case of an assessment of a company on basis of book profits u/s 115J (Now 115 JB) CIT v. Kwality Biscuits Ltd. [2006] 284 ITR 434 (SC).
For a five star hotel, though general repairs (even if it runs into few crores) are revenue expenditure, but expenditure incurred on renovation and refurbishment of hotel is not allowable as revenue expenditure. Asian Hotels Ltd. V. DCIT [2006] 101 ITD 247 (Del).
Restriction on allowance of deduction U/s 44C : The High Court held that allowance under section 44C is allowed if both the parameters stated therein fulfilled. In the absence of any one of the parameters, the entire section 44C becomes not available. The entire head office expenditure will be allowable under section 37(1). CIT v. Deutsche Bank A.G. (2006) 284 ITR 463 (Bom.)
Restriction on allowance of deduction U/s 44C : The High Court held that allowance under section 44C is allowed if both the parameters stated therein fulfilled. In the absence of any one of the parameters, the entire section 44C becomes not available. The entire head office expenditure will be allowable under section 37(1). CIT v. Deutsche Bank A.G. (2006) 284 ITR 463 (Bom.)
The assessment has been completed but A.O. failed to initiate penalty proceedings under section 271B for failure to obtain audit report within the specified time. The High Court held that failure to initiate penalty proceedings does render the order of the assessing authority erroneous and prejudicial to the interest of revenue. Therefore, notice u/s 263 can be issued in such case. CIT v. Ganeshi Lal Ram Krishna (2006) 154Taxman 238 (All.)
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