Taxation Law - Bad Debt – Section 10(2)(xi), Income-tax Act – Debt of Earlier Firm Taken Over into Assessee’s Money-Lending Business – Deduction Allowed – On dissolution/closing of a prior partnership, assessee took his half share in a decree debt (₹8,197), opened debtor’s account in his own HUF money-lending books, credited later recoveries, and wrote off ₹...
Taxation – Business expenditure – Non-resident – Lull in business vs cessation – Assessee, a French drilling company with ONGC contract till 1993, maintained continuous correspondences and bid activity with ONGC during 1993–1998, ultimately securing a fresh contract in October 1998 (formalised January 1999) – Held: Such sustained efforts show intention to carry ...
Tax Exemption – Meaning of ‘Investment’ – Small Scale Industrial Unit – Term “investment” under Notification No. 1428-F.T. dated 26.05.1994 and Rule 41 of West Bengal Sales Tax Rules, 1995 interpreted as actual capital outlay on plant and machinery – Depreciation not deductible in computing investment – Expression “investment” denot...
Taxation Law - Income from Property – Section 9(1)(iv) – “Annual charge not being a capital charge” – Deductibility of Bombay municipal property tax and urban immovable property tax – The assessee, an investment company, claimed deduction of municipal property tax and urban immovable property tax paid during the year – Held: Both levies are annual liabilit...
Income Tax – Section 43B – Deduction Disallowed – Bottling Fee – Actual Payment Required – Held that furnishing of bank guarantee does not amount to “actual payment” under Section 43B – Requirement is for actual outflow of funds to the exchequer – Bottling fees are not tax, duty, cess or fee but consideration for exclusive privilege under excis...
Taxation Law - Section 25(4) Income Tax Act - Relief – Date of “Succession in such capacity” – Executors carrying on business after death pending sale – Held: Succession occurs on death, not on later sale – The testator’s shipping agency business was directed by will to be continued by executors as a going concern for up to one year pending sale – He...
Income Tax – Accrual of Income – Mercantile System – Reduction of Commission – Assessee-firm, acting as managing agents of two shipping companies, originally entitled to 10% commission on freight, agreed during the accounting year to reduce the rate to 2½% – Larger commission shown in books but reduced by agreement before close of year – Held: Mere book e...
Income Tax – Accrual of Income – Mercantile System – Reduction of Commission – Assessee-firm, managing agents of two shipping companies, originally entitled to 10% freight commission, agreed during the accounting year to reduce commission to 2½% – Entries showing full commission made in books but reduced commission accepted before close of year – Held: Me...
Constitutional Law – Legislative Competence – Entry 49 List II – “Taxes on Lands and Buildings” – Scope – Challenge to U.P. Large Land Holdings Tax Act, 1957 on ground that “lands” in Entry 49 does not include agricultural land – Held: Word “lands” in Entry 49 is of wide amplitude and includes agricultural land – Constit...
Customs – Duty Drawback – DEPB Scheme – Re-export of Defective Goods – Refund Mechanism – Appellant imported watch parts, paid duty via DEPB debit – Upon finding parts defective, re-exported the same and claimed duty drawback under Section 74 – Department rejected claim on ground that duty was not paid in cash – Held: Once goods are re-exported, asse...