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Settlement Commission: Dismissal for Missing Records Invalid if Assessee Not Involved in Reconstruction Issue: Whether the Settlement Commission can dismiss an assessee’s application solely because original case files are missing and the assessee allegedly failed to reconstruct records, when no communication was sent to the assessee for record reconstruction or for supplying copies of their… Read More »

Reassessment Notice to Dissolved Firm with Deceased Partners: Invalid Without Proper Legal Heir Notice and Order Issue: Whether a reassessment notice issued under Section 148 in the name of a dissolved partnership firm, after all its partners have expired, is valid when no speaking order is passed to determine the legal representatives of the deceased… Read More »

I. Overseas Company Shares: Assessee Not Beneficial Owner of Company’s Assets; Income Not Taxable in Shareholder’s Hands. Issue: Whether shareholders of an overseas investment holding company (CCL), including the assessee and his family members, can be considered “beneficial owners” of the company’s underlying assets (flats in London) for the purpose of Explanation 4 to Section… Read More »

I. Section 45(4) Inapplicable to Capital Contribution by Incoming Partner. Issue: Whether Section 45(4) of the Income-tax Act, 1961, which deals with capital gains on distribution of assets by a firm, is applicable when a new partner introduces capital into the firm, and no assets are transferred from the firm to the individual partners. Facts:… Read More »

I. Liquidated Damages as Business Expenditure: TATA Claim Allowed, BSNL Claim Remanded. Issue: Whether liquidated damages payable by an assessee for failing to meet contract delivery deadlines with BSNL and TATA become a real liability and are deductible under Section 37(1) of the Income-tax Act, 1961, in the year the delay occurs, even if actual… Read More »

Charitable Trust (Cow Care) Registration Application Remanded for Fresh Adjudication Due to Summary Rejection and Portal Issues. Issue: Whether a Commissioner (Exemption) can summarily reject an application for registration under Section 12A of the Income-tax Act, 1961, from a trust engaged in cow care, merely because the assessee claimed not to have filed a formal… Read More »

Charitable Trust’s Exemption Allowed Despite ITR Filing Error, Given Proper Application of Funds and 12A Registration. Issue: Whether a charitable trust, registered under Section 12A for imparting education, should be denied exemption under Section 11 of the Income-tax Act, 1961, solely because it incorrectly filled or omitted to fill a specific column in its Income… Read More »

Four Key Rulings on Interest Disallowance, TDS on Retainership Fees, and International Taxation of Services. I. Interest on Borrowed Capital – Commercial Expediency of Interest-Free Loans to Associate Concerns. Issue: Whether interest expenditure incurred by an assessee-company on inter-corporate deposits can be disallowed under Section 36(1)(iii) if it simultaneously advances interest-free loans to its associate… Read More »