Source: http://aiftponline.org/journal/2016/may-2016/direct-tax-supreme-court/
Timestamp: 2019-04-24 03:19:25+00:00

Document:
In Society for the Promotion of Education, Adventure Sport & Conservation of Environment v. Commissioner of Income Tax (2008) 216 CTR (All.) 167, the Allahabad High Court held that non disposal of an application for registration before the expiry of six months as provided u/s. 12AA (2) would result in deemed grant of registration. However, this was reversed by the Full Bench of the Allahabad High Court in CIT v. Muzafar Nagar Development Authority (2015) 372 ITR 209.
The Department appealed from the decision of the High Court expressing an apprehension that since the date of application was February 24, 2003, at the worst it would operate only after 6 months from the date of application. Held that there was no basis for such an apprehension since that was the only logical sense in which the Judgment could be understood. The registration under Section 12AA of the Income-tax Act would take effect from 24-8-2003.
High Court held that the Tribunal was right in law in directing the Assessing Officer to adopt the gross rent received by the assessee being lessor from the let out property for the purpose of computation of income from house property in place of much higher fetched by the lessee by sub letting the same property. On appeal by revenue, Apex Court dismissed the appeal as the tax effect was below limit prescribed in CBDT circular, leaving the question of law open. (AY. 1991-92).
Reversing the Judgment in CIT v. Kotak Securities Ltd. (2012) 340 ITR 333 (Bom.)(HC) the Court held that, fee paid to Bombay Stock Exchange as Transaction charges is not fees for technical services hence not liable to tax deduction at source. (C.A. No. 3141 of 2016, dt. 29-3-2016) (AY. 2005-06).
The Hon’ble Apex Court dismissed the Special Leave Petition filed against the order of the Gujarat High Court in the case of CIT v. Sandvik Chokshi wherein it was held that the Assessing Officer could not have invoked Explanation 3 to section 43(1) and disallowed the depreciation as, at the time of transfer of assets, there was no income for the assessee for it to reduce its tax liability and therefore, refused to interfere with the finding of the CIT(A) and ITAT.
Controversy on whether S. 80-1A(9) mandates that the amount of profits allowed as deduction u/s. 80-1A(1) has to be reduced from the profits of the business of the undertaking while computing deduction under any another provisions under heading “C” in Chapter VI-A of the Income-tax Act, 1961 is referred to larger Bench. While Hon’ble Mr. Justice Anil R. Dave took the view that the judgment of the Delhi High Court in Great Eastern Exports v. CIT  332 ITR 14 (Delhi) lays down the correct position in law and allowed the appeals of the Revenue, Hon’ble Mr. Justice Dipak Misra dissented and held that the law laid down by the Bombay High Court had in Associated Capsules Private Limited v. Dy. CIT  332 ITR 42 (Bom.) lays down the correct position in law and dismissed the appeals of the Revenue. In view of difference of opinion, the matters have been referred to a larger Bench in terms of signed reportable judgment. The Registry has been directed to place the matters before the Hon’ble the Chief Justice of India.
P. G. & W. Sawoo Pvt. Ltd. v. ACIT (SC) www.itatonline .org.
A search was conducted at the residential and business premises of Assessee. Thereafter notice for block assessment under section 158BC of the Act was issued and returns were filed which were processed under section 143(1) of the Act. Thereafter, notice under section 148 was issued by the Assessing Officer on basis of certain reasons recorded. Order was passed under section 143(3) read with section 147, of the Act, pursuant to that appeals were filed before the Commissioner on Income Tax (Appeals), Income Tax Appellate Tribunal and the High Court.
The High Court found that the reasons recorded by the Joint Commissioner, for according section, only stated “I am Satisfied”. As this action for sanction was without application of mind and was done in mechanical manner, following the law laid down in case of Arjun Singh v. ADIT (246 ITR 363)(SC), the Commissioner (Appeals) quashed the notice issued under section 148 of the Act, and the same was upheld by Tribunal and the Hon’ble High Court.
The appeal of the Revenue before the Supreme Court was dismissed.
The Court held that it is well settled that issues of fact determined by the Tribunal are final and the High Court in exercise of its reference jurisdiction should not act as an appellate Court to review such findings of fact arrived at by the Tribunal by a process of reappreciation and reappraisal of the evidence on record. Unless a specific question with regard to an issue of fact being opposed to the weight of the material on record is raised in the reference before the High Court. On merit dismissed the appeal of assessee. (AY. 1984-85).
Allowing the appeal the Court held that the Authority had wrongly compared the commercial premises which shows notice was visited by gross violation of mind. Authority also erred in holding that V had transferred property to the extent of 78 per cent to U for consideration of ` 1,00,40,000 was not in respect of built up area but for transfer of subject land. Thus the order of Appropriate Authority suffered from gross perversity. The Court also held that the High Court had failed to render a finding on the relevance of the comparable sale instances, particularly, why a sale instance in an adjusting locality had been considered valid instead of sale instance in the same locality. Accordingly the order of High Court was reversed.
The taxpayer, an HUF was co-owner of a land situated at a village in Bengaluru District. The taxpayer entered into various development agreements for the construction of residential flats. The taxpayer claimed that it had retained ownership of the land until the flats are fully constructed, and therefore, it continued to be the owner of the land for the Financial Year 1995-96 and the subsequent years till their sale. A notice under Section 17 of the Wealth Tax Act (the Act) was issued to the taxpayer, and it filed a return of wealth. The Assessing Officer held the property as urban land and brought it to tax. On Department’s appeal the High Court reversed the order of the Tribunal holding that the taxpayer was entitled to the benefit of clause (ii) to Explanation 1(b) to Section 2(e)(a)(v) of the Act, as the building had not been constructed and was still under construction during the relevant year.
On the assessee’s appeal the Supreme Court held that the ‘Urban land’ is to be included in calculating the ‘net wealth’ for the purpose of determining wealth tax under the Act. However, certain lands are not to be treated as ‘urban land’ that are mentioned in Explanation 1(b) to Section 2(e)(a)(v) of the Act.
A plain reading of the said clause makes it clear that in order to avail the benefit, the following conditions have to be satisfied: (a) The land is occupied by any building; (b) Such a building has been constructed; and (c) The construction is done with the approval of the appropriate authority.
The plain language of the provision indicates that the benefit of the said clause would be applicable only in respect of the building ‘which has been constructed’. The expression ‘has been constructed’ cannot include within its sweep a building that is not fully constructed or is in the process of construction. The opening words of clause (ii) to Explanation 1(b) to Section 2(e)(a)(v) of the Act states ‘the land occupied by any building’. The land cannot be treated to be occupied by a building where it is still under construction. Thus the Supreme Court dismissed the appeal filed by the assessee.
Giridhar G. Yadalam v. CIT (2016) 237 Taxman 392 (SC).

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