S. 80-IB Of Income Tax Act - Assessee Not Entitled To Deduction Under On Profit Derived From DEPB And Duty Drawback Schemes: Supreme Court

The Supreme Court has ruled that the assessee is not entitled to deduction under Section 80- IB of the Income Tax Act, 1961 on the amount received / profit derived from the Duty Entitlement Pass Book Scheme (DEPB) and the Duty Drawback Schemes.The bench of Justices M.R. Shah and B.V. Nagarathna held that the profit from DEPB and the Duty Drawback claims cannot be said to be an income “derived from” the industrial undertaking. The court added that even otherwise, such an income is chargeable to...

Income Tax Act | For A Company To Be A "Resident" In India, Domicile Or Registration Irrelevant; Test Is Where De Facto Control Lies : Supreme Court

The Supreme Court has ruled that under the Income Tax Act, 1961, the domicile or the registration of the company is not at all relevant, and the determinate test is the place where, the sole right to manage the company and the control of the company lies. The place where the “head and seat” and the “directing power” of the affairs of the company and the control and management is shown, must not merely be theoretical control and power, i.e., not de jure control and power. Rather, in order to hold...

Mere Delay In Remittance Of TDS Doesn’t Attract Penalty Under S 271C Income Tax Act: Supreme Court

The Supreme Court has ruled that no penalty is leviable under Section 271C of the Income Tax Act, 1961 on mere delay in remittance of the tax deducted at source (TDS) after the same has been deducted by the assessee.The bench of Justices M.R. Shah and C.T. Ravikumar observed that the relevant words used in Section 271C(1)(a) are “fails to deduct”, and the same does not speak about belated remittance of the TDS. The words “fails to deduct” occurring in Section 271C(1)(a) cannot be...

Section 263 Income Tax Act | Erroneous Order Of Assessing Officer Causing Prejudice To Revenue Is Revisable By CIT : Supreme Court

The Supreme Court has held that the Commissioner of Income Tax can exercise revision powers under Section 263 of the Income Tax Act over the orders of the Assessing Officer which cause prejudice to the interest of the revenue.The Top Court set aside the Bombay High Court’s order where the High Court had ruled that the amount paid by the assessee to its shareholders in lieu of settlement of litigation in pursuance of an arbitral award, was deductible from the sale proceeds of the property...

Income Tax Act - Date Of Panchnama Last Drawn Starting Point Of Limitation For Completing Block Assessment Proceedings: Supreme Court

The Supreme Court has held that the date on which the Panchnama was last drawn is the starting point of the two-year limitation for completing the block assessment proceedings under the Income Tax Act 1961.The division bench of Justice M.R. Shah and Justice C.T. Ravikumar has upheld the order of the Delhi High Court in which it was held that the date of the Panchnama last drawn would be the relevant date for considering the period of limitation of two years and not the last date of...

Exemption Of Newspaper’s Income Utilised For Charity: Supreme Court Remands The Matter To AO

The Supreme Court has remanded the appeal in respect of the exemption of newspaper income used for charity.The division bench of Justice S. Ravindra Bhat and Justice Dipankar Datta has relied on the decision of CIT vs. Ahmedabad Urban Development Authority and remitted the matter to the AO for fresh consideration of the nature of receipts in the hands of the assessee, which is engaged, inter alia, in publishing a newspaper, and to render fresh findings on the issue of whether the assessee is a...

S.153A Income Tax Act| Can Assessments Be Reopened If No Incriminating Material Is Found During Search? Supreme Court Reserves Judgment

The Supreme Court on Thursday reserved its judgment on whether in an assessment under section 153A of the Income Tax Act, besides the incriminating material found during search, such materials which the Assessing Officer has on hand and the third party records available can be relied on to assess total income, or whether the assessment has to confined only to the incriminating material seized during the search. The Court also discussed the issue whether there is no incriminating material seized...

Income Tax Act - For Block Assessment, Normals Procedure Not Applicable; Interest Can Be Levied Without Sec 158BC Notice : Supreme Court

The Supreme Court recently held that revenue was justified in levying interest under Section 158BFA(1) of the Income Tax Act for late filing of the return for the block period even in absence of any notice under Section 158BC of the Act and for the period prior to 01.06.1999.A Bench comprising Justice M.R. Shah and Justice C.T. Ravikumar was considering a batch of petitions dealing with the same issue. Factual Background Since the Court was dealing with a batch of similar petitions, it only...

Income Tax Act | Writ Petition Can Be Entertained To Examine If Conditions To Issue Section 148 Notice Are Satisfied : Supreme Court

The Supreme Court recently set aside an order of the Punjab and Haryana High Court which dismissed a writ petition filed by an assessee against a notice issued under Section 148A of the Income Tax Act 1961 for reopening assessment.The High Court had dismissed the writ petition on the ground of availability of alternative remedy. Taking exception to the High Court's approach, the Supreme Court observed that writ petitions have been entertained to examine whether the conditions for the...

Income Tax Dept. Can't Initiate Reassessment Proceedings During The Pendency Of The Rectification Proceedings: Supreme Court

The Supreme Court has held that the income tax department cannot initiate the reassessment proceedings during the pendency of the rectification proceedings.The division bench of Justice M.R. Shah and Justice C.T. Ravikumar has observed that the Punjab and Haryana High Court has committed a serious error in holding that the notice under Section 154 was invalid as it was beyond the period of limitation. The proceedings under Section 154 of the Income Tax Act were not the subject matter before the...

Section 45(4) Of Income Tax Act Applicable To Cases Of Subsisting Partners Of A Partnership Transferring The Assets In Favour Of A Retiring Partner: Supreme Court

A Supreme Court bench comprising Justices M.R. Shah and M.M. Sundresh held that Section 45(4) of the Income Tax Act was applicable to not only the cases of dissolution but also cases of subsisting partners of a partnership, transferring the assets in favour of a retiring partner.The respondent assessee, a partnership firm originally consisted of four partners (all brothers) engaging in the business of Dyeing and Printing, Processing, Manufacturing, and Trading in Clothing. Under the family...

Supreme Court Dismisses Department's SLP Against HC Decision Holding That Entrance Fees Received By Club From Its Member Is Capital Receipts

The Supreme Court bench of Chief Justice of India, Justice D.Y. Chandrachud, and Justice Hima Kohli has dismissed the special leave petition of the department challenging the decision of the Bombay High Court. The Bombay High Court has held that any sum paid by a member of a club to acquire the rights of a club is a capital receipt and not a revenue receipt.The assessee or respondent runs the race course in Bombay. During the assessment year 2009-10 and in the years prior, the assessee used to...