Thursday, February 15, 2007


  •  Property in the name of the assessee’s wife could not be included in total income of the assessee : Hon’ble Madras High Court in the matter of Commissioner of Income Tax Vs. S.M. Anandvel (HUF), held that if the revenue failed to prove that the said property was purchased by the assessee in the name of his wife, the assessee’s wife alone was the real owner, as such income from said house property, was not taxable in the hands of the assessee. [ 288 ITR 286 ] 
  • Differences between cost shown by the assessee and estimates by departmental valuation officer is not a ground for re-assessment : Hon’ble Madras High Court in the matter of Commissioner of Income Tax Vs. V.T. Rajendran held that the report of the Valuation Officer could not be the basis for re-assessment because the valuation cannot be arithmetical appreciation of the materials used for the construction or the expenses incurred by the assessee in that regard. [ 288 ITR 312]
  • Penalty for concealment u/s 271(1)(c) : Hon’ble Delhi High Court in the matter of Commissioner of Income Tax Vs. International Audio Visual Co. held that if the assessee has disclosed primary facts but later on claim found erroneous, penalty for concealment cannot be levied. In another case, Commissioner of Income Tax Vs. Nath Bros. Exim International Limited, the Hon’ble Court held that whether there was a full disclosure of all relevant material but wrong claim for special deduction is not a concealment of income and penalty cannot be levied. [288 ITR 570 & 670]
  • FII investment is not business : Hon’ble Authority for Advance Ruling in the matter of Fidility Northstar and others given a ruling that non-resident, registered as Foreign Institutional Investor (FII) investing in securities in India under regulation can only be for earning dividend, capital gains, etc. and not for trading in securities. [ 288 ITR 641]
  • Basis of notice under sec. 148 : Hon’ble Income Tax Appellate Tribunal Delhi Bench in the matter of Income Tax Officer Vs. Smt. Gurinder Kaur held that Notice u/s 148 of the Income Tax Act, 1961 on the basis of information gathered by investigation Department of income tax is valid. [288 ITR (AT) 207] 
  • Nursing Home is a business : The activities of a Nursing Home constituted business and not profession and since the turnover of the assessee was below the limit of Rs. 40 Lacs prescribed in clause (a) of section 44AB, assessee was not required to get its accounts audited in terms of section 44AB – Shalini Hospitals v. ACIT [2006] 10 SOT 622 (ITAT – Hyd) 
  • Section 14A dis allowances : Even in case it is not possible to identify expenses incurred in earning income which does not form part of total income, dis allowance u/s 14A has to be made on some basis – DCIT v. SREI International Finance Ltd. [2006] 10 SOT 722 (ITAT – Del)  
  • Car received by the assessee on the basis of scratch card on purchase of refrigerator fell within the definition of ‘lottery’ u/s 2(24)(ix) read with Explanation to the said section and is not a gift. – D.N. Thakur v. ITO [2006] 10 SOT 751 (ITAT – Chd.)
  • Share of profit from firm credit to P&L A/c is to be reduced from net profit for computing income u/s 115JA – DCIT v. Metro Exporters Ltd. [2006] 10 SOT 647 (ITAT- Mum) 


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