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III. Useful Case Laws:
1. CIT Vs. Shri Kamal Wahal, ITA No. 4/2013, Date of Decision: 11-01-2013, High Court of Delhi
Deduction u/s 54F was available on the portion of investment made in the name of the assessee’s wife.
The new
residential property was acquired in the joint names of the assessee and
his wife. The income tax authorities restricted the deduction under
Section 54F to 50% on the footing that the deduction was not available
on the portion of the investment which stands in the name of the
assessee’s wife. This view was disapproved by this Court. It noted that
the entire purchase consideration was paid only by the assessee and not a
single penny was contributed by the assessee’s wife. It also noted that
a purposive construction is to be preferred as against a literal
construction, more so when even applying the literal construction, there
is nothing in the section to show that the house should be purchased in
the name of the assessee only. As a matter of fact, Section 54F in
terms does not require that the new residential property shall be
purchased in the name of the assessee; it merely says that the assessee
should have purchased/constructed “a residential house”.
(Please click here for judgment)
2. Rambagh Palace Hotels Pvt. Ltd. Vs. Dy. CIT, W.P.(C) 7023/2010, Date of Decision : 10-01-2013, High Court of Delhi
Whether a
complaint filed by one of the directors before the Common Law Board
alleging irregularities such as illegal siphoning off of the company’s
funds by two other directors constitutes tangible material, on the
basis of which reopening U/s 147 is possible?
Held:
If
the complaint can constitute tangible material for reopening the
assessments of the hotel, it can equally constitute tangible material
giving rise to the belief that the amounts allegedly siphoned off by the
present petitioners from the hotel had escaped assessment in their
hands. It must be remembered that we are not at this stage concerned
with the merits of the matter. We are at this stage concerned only with
the question whether a prima facie belief regarding escapement of income
can be entertained by the respondent on the basis of the complaint
filed by the Company Law Board by Raj Kumar Devraj, one of the directors
of the hotel. Our answer is in the affirmative. Accordingly, we uphold
jurisdiction of the respondent to reopen the assessments of the
petitioners.
(Please click here for judgment)
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