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IV. Direct Taxes Case Laws:
1. CIT Vs. Edward Keventer (Successors) Pvt. Ltd., I.T.A. No. 489/2014, Date of Order: 20.08.2015, High Court of Delhi
Whether
the transactions of transfer of properties resulted in capital gains or
business income in the hands of the assessee, where the properties were
initially purchased with the object of dairy farming and for production
of milk, however the venture never took off, because the requisite
permission for the same was not given by the New Delhi Municipal
Council.
High
Court and Tribunal both upheld the Decision of CIT(A) granted in favour
of assessee, The CIT(A), after examining the case law, which was
presented before him, and also facts of the case, came to the conclusion
that the intention of the assessee, at the time of purchase of the
property in 1952 was to establish a dairy farm in which it would produce
milk. The said property was held as an asset and shown as a fixed asset
in the books of the assessee from 1952 onwards. The CIT (A) also
observed that no contrary fact had been brought on record by the
Assessing Officer and that successive assessments from the date of
purchase of the land accepted the treatment of the asset as a fixed
asset in the books of the assessee. The CIT (A) also observed that there
had been no sale or purchase of land by the assessee throughout all
these years from 1952 except for the two transactions, which are subject
matter of the present appeal. The CIT (A) held that the original
intention of the assessee in purchasing the property was clear which was
to hold it as a fixed asset.
Finally,
the CIT (A) concluded that he had no hesitation in holding that the two
residential bungalows sold on 27.05.2005 to the existing occupiers of
the same by the assessee, would result only in long term capital gain
and not in any income under the head of business.
(Please click here for judgment)
2. CIT Vs. M/s Sunder Forging, I.T.A. No. 242 of 2012, Date of Decision: 30.07.2015, High Court of Punjab and Haryana
Whether
the Hon’ble ITAT was right in allowing the deduction u/s 80IB during
the year under consideration i.e. 2007-08 when the assessee lost the
status of Small Scale Industrial Unit in the previous year and even did
not claim deduction u/s 80IB in the A.Y. 2006-07?
Held Yes
That
once an assessee is entitled to a deduction under Section 80-IB, the
assessee is entitled to the same for ten consecutive years. Sub-section
(3) of Section 80-IB entitles the assessee to the deduction “for a
period of ten consecutive assessment years …….”. The deduction is
subject to the assessee’s fulfilling the conditions mentioned therein.
It is not contended that the assessee has not fulfilled the conditions
stipulated in clause (ii) of sub-section (3). Sub-section(3) does not
provide that in the event of the assessee subsequently not being a small
scale industry within the meaning of Section 80- IB(14)(g), the
assessee would cease to be entitled to the deduction. There is nothing
in the section that persuades us to imply such a condition even assuming
we are entitled to do so. Had that been the intention, the legislature
would have undoubtedly specified the same.
(Please click here for judgment)
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