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III. Direct Tax Case laws:
1. CIT
Vs. N.J. India Invest (P.) Ltd., Tax Appeal No. 186 of 2013, Date of
decision: 01.04.2013, High Court of Gujarat at Ahmedabad
Decision: In favour of assessee
Section: 37 of Income Tax Act, 1961
Case referred: CIT vs. Asahi India Safety Glass Limited (2011) 245 CTR 529 (Del.)
Whether
the expenditure incurred on maintenance, back-up and support services
to existing hardware and software is revenue in nature
Held Yes,
the assessee was engaged in proving maintenance and support service to
its client. The services were back up and support services to existing
hardware and software already installed by the client for the purpose of
business. The Assessing officer contended that the expenditure on such
maintenance, backups and support services to existing hardware and
software is capital in nature and disallowed the same. The CIT (A)
deleted the said addition and Tribunal upheld the said order.
On further appeal to high Court, the high court held that such expenditure is revenue in nature.
(Please click here for judgment)
2. CIT Vs. Madan Teatres Ltd., ITAT No. 62 of 2013, Date of decision: 14.05.2013, Calcutta High Court
Decision: In favour of assessee
Section: 50C r.w. 271(1)(c ) of Income Tax Act, 1961
Whether penalty u/s 271(1)(c ) of the Act can be imposed on account of deeming fiction under section 50C of the Act
Held No,
Facts:
The assessee sold a property at Rs. 2, 51, 50,000/- however as per
section 50C the same is assessed at Rs. 5, 19, 77,000/-. During the time
of assessment the AO found that the assessee has claimed Rs. 2, 51,
50,000/- as his sale consideration. The AO initiated proceedings u/s 271
(1) (c ) on the belief that the assessee has understated his income. On
appeal before Tribunal, the Tribunal set aside the order imposing
penalty.
On
appeal before the High Court, the high court held that it is only on
account of deeming provisions of section 50C, the AO has made the
addition by adopting the sale consideration of Rs.5,19,77,000/-, being
the value adopted for the purpose of stamp valuation. The revenue has
also not shown as to how the assessee could be held to have actually
received this amount which is in excess of the amount of
Rs.2,51,50,000/-. In the circumstances, the appeal of the revenue is
dismissed. Thus penalty cannot be imposed in absence of evidence against
the assessee.
(Please click here for judgment)
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