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III. Direct Tax Caselaws:
1. Whirlpool of India Ltd Vs.
UOI and Ors., W.P. (C) No. 3126/2010 , Date
of Decision: 28.02.2013, Delhi
High Court
Whether the amendment u/s 115JB
of income tax act 1961 by insertion of clause (i) with retrospective effect is
right in law.
In the present case, the Assessee
averred that the insertion of clause (i) by Finance Act has in fact imposed a
new tax; it is not clarificatory provision and therefore cannot be made
retrospective. The assessee said that insertion of clause (i) which states that
provision for diminution in asset should be added back to book profits for
computing minimum alternate tax should not be applied retrospectively. The High
Court rejected the plea of assessee and the case got dismissed.
(Please click here for judgment)
2. CIT Vs. Mehta Charitable Prajnalay Trust, ITA Nos. 309, 417 of 2003, Date: 20.11.2012, High Court of Delhi
If the business carried on by the trust is not in line
with the object of the trust then whether the income from the business
is liable to the exemption u/s 11.
The
object of the trust was establishing and maintaining of schools,
colleges and study circles, advancing education and research study on
the modern and ancient Indian thought etc. After the formation of the
trust, a business was commenced in the name of the trust for the
manufacture of katha. The funds for that business came from sister
concerns of the firms in which the founder-trustees were partners and
borrowings from banks and other agencies. The assessee claimed the
exemption u/s 11 is respect of its income and filed the return. The AO
disallowed the exemption, AO held provision of Sec 11(4) not applicable
whereas provision of Sec 11(4A) is applicable. CIT (Appeal) confirmed
the decision of AO. Tribunal gave its decision in favor of assessee. On
appeal to High Court, the HC held that There is no connection between
the carrying on of the katha business and the attainment of the objects
of the trust. The mere fact that whole or some part of the income from
katha business is ear-marked for application to the charitable objects
would not render the business itself being considered as incidental to
the attainment of the objects.
Therefore, the assessee-trust was not entitled to exemption under section 11.
(Please click here for judgment)
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