Deposits collected from public by Sahara is Capital Receipt

Held It may be mentioned that the matter has come up before this Hon’ble Court in the assessee’s case reported in CIT v.Sahara Investment India Ltd. [2004] 266 ITR 641 (All.), where it was held that “When a person deposits some money in a back that amount does not become the income of the bank but it rather the capital of the bank in the form of borrowed capital. Income is ordinarily that which fRead More…

cost plus method

Sale to related party can not be valued at cost plus method,to be valued at price charged from unrelated parties

Where assessee’s entire sales are below cost owing to international market prices being very low, sales to related parties cannot be value on basis of ‘cost plus method’ and are to be valued as per best judgment principle at ‘price charged from unrelated parties’ SUPREME COURT OF INDIA Tamil Nadu Petroproducts Ltd. v. Commissioner, Central Excise, Chennai A.K. SIKRI AND ROHINTON FALRead More…

Reassessment at instance of audit party unjustified

Whether reassessment at instance of audit party on account of non-inclusion of excise duty refund in total income was unjustified ? Held, yes HIGH COURT OF GUJARAT Raajratna Metal Industries Ltd. v. Assistant Commissioner of Income-tax M.R. SHAH AND K.J. THAKER, JJ. SPECIAL CIVIL APPLICATION NO. 7140 OF 2014 JULY  30, 2014 B.S. Soparkar for the Petitioner. Varun K. Patel for the ResRead More…

Damage awarded by Trial Court for Specific performance

Damage awarded by Trial Court for Specific performance Q  What is the Taxability of damage awarded by Trial Court for Specific performance  ? Section 4, read with section 263 of the Income-tax Act, 1961 Subject :  Changeability of Income received as  Damages Assessment year 1995-96 Assessee had entered into an oral agreement with ECL  to purchase factory premises to give it on leRead More…

Taxability of Interest on FDR by Govt company acting as nodal agency

Taxability of Interest on FDR by Govt company acting as nodal agency of State Govt Q: Govt company, acting as nodal agency of state govt, kept the funds in Fixed Deposit, whether the interest earned will be treated as income of Govt company ? Section 4 of the Income-tax Act, 1961 Subject  Chargeablility of Interest Income Assessment year 2008-09 Facts of the Case  Assessee was a GovernmeRead More…

Premium received by society on transfer of plot Not Taxable

Premium received by society on transfer of plot Q :Whether premium collected by Society collected on transfer of plots is a capital Receipt and hence not taxable ? Section 4 of the Income-tax Act, 1961  Subject: Whether Income on Transfer of plots is Capital reciept or revenue reciept Assessment year 1986-87 Facts of the case : Assessee co-operative housing society had given its plots onRead More…

Amount of Shares Received for Non Compete fee not taxable

Amount of Shares Received for Non Compete fee not taxable Q Where as per the agreement between the parties consideration was in respect of two independent assets negative covenant in and shares, Whether shares received for negative covenant are capital receipt and hence not taxable ? Section 4, read with section 48, of the Income-tax Act, 1961 Subject :Income Chargeable as (Non compete fee)
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Interest Free Loan to wife under wealth tax act

Interest Free Loan to wife under wealth tax Act Q : Can the Assessee give interest free loan to his wife and When  this loan will not be clubbed in the hands of husbands under wealth tax act? Where assessee had given interest free loan to his wife who purchased residential house and jewellery and Assessee’s wife had independent source of income later on paid a part of loan, impugned loan amounRead More…

Taxability of Premium received by society on transfer of plots

Taxability of Premium received by society on transfer of plots : Not  Taxable Where assessee-society received contribution from outgoing members as premium on sale of plot, since said amount was to be utilised for benefits of members of society, it could not be regarded as ‘taxable income’ in hands of assessee HIGH COURT OF GUJARAT Commissioner of Income-tax v. Prabhukunj Co-op. Housing SociRead More…