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II. Direct Tax Case laws:
1. CIT Vs. H.B. Leasing & Financing Ltd., ITA No. 6/2000, Date of Decision: 04.07.2013, Delhi High Court
Section: 32 of Income Tax Act, 1961
Issue 1:
Whether a gas cylinder attached to the truck shall be considered as a part of truck or considered as gas cylinder only.
The Hon’ble High Court placed reliance on the decision pronounced in the case of CIT vs. Goyal MG Gases Ltd., (2008) 296 ITR 72 (Delhi)
wherein it was held that a tanker or a gas cylinder attached to the
body of a truck continues to be a gas cylinder and is accordingly
entitled to depreciation as applicable to gas cylinder in Appendix I to
the Income-tax Rules. In other words, the gas cylinders even in such
cases are entitled to 100% depreciation.
Issue 2:
Whether
the vehicles being leased out shall be eligible for the depreciation at
a higher rate even the assessee was not carrying on the business of
running them on hire.
Held: Yes
The
assessee being engaged in the business of leasing and financing, leased
out trucks which were used by the lessee. The Hon’ble High Court by
considering the facts of the case held that the assessee is eligible for
depreciation at a higher rate as the pre-requisites required for such
claim are fulfilled, i.e. the assessee being the owner of the trucks and
they are being used for business purposes. Hon’ble High Court also
stated that the use of such trucks by the lessee was a matter of concern
which was overlooked by the AO in the given case.
(Please click here for judgment)
2. CIT Vs. Silver Oak Laboratories P. Ltd., Petition(s) for
Special Leave to Appeal (Civil) No(s).18012/2009, Date of Order:
17/08/2010, Supreme Court of India
Section 194C of the Income Tax Act, 1961
Whether
the provisions of section 194C of the Act are applicable on contract
for sale and assessee is liable for tax and interest u/s 201(1) &
201(1A) of the Act.
Held: No
The
provisions of Section 194C are not applicable on contract for sale. The
Hon’ble Supreme Court held that on examination of the terms and
conditions, invoices, purchase orders as well as the challans indicating
payment of excise duty, there is no material on record to indicate that
the transaction in question is a "contract for carrying out works".
Further, the amendment in Section 194C made by Finance (No. 2) Act, 2009
which defines "work" to include manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from such customer, is applicable only w. e. f. 01/10/2009.
Therefore,
the Hon’ble Supreme Court upheld the decision of the High Court and
dismissed the SLP. The High Court dismissed the department’s appeal by
following decision pronounced in the case of Reebok India 306 ITR 124 (Del).
(Please click here for judgment)
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