Tax Law

General principles of tax

 E I tobacco v. st of ap (tax imposed on virginia tobacco, held it can be imposed as it
property)

Income tax
 CIT v. Karthikeyan (car rally, he won prize amount, AO taxed him, tribunal said it is
not income, sc held it is income has he earned it based on his talent, taxable)
 Mehboob production pvt ltd v. CIT (movie co., had given exception from
entertainment tax by st govt, where there was even treatment to director of flim in
us during shooting, and assesse claimed this can be included in his income u/s
10(4a), hc held in favor of assesse)
 CIT v. sunil kinariwala (assesse is member of trustee holding 10% share, this had a
over riding title on trust, so he was considered as part of trust and tax was levied on
him by seeing the entire amount of trust, AO imposed tax, tribunal reversed, SC
reversed)
 UP Bhumi sundhar nigam v. CIT (In case of diversion of income by overriding title,
person in whose favour income is to diverted should be aware about exact amount
of such income which it has earned. If such fact is not proved to the satisfaction of
Assessing Officer, such income shall be taxable in the hands of the recipient)
 CIT v. gopal naikar (gifts were received by assesse from devotee, tax levied, held it
cant be, but now it can be u.s 56(2)(vii))
Agriculture Income (s (1a))
 Bacha f v. CIT, Bombay (shareholders in tea company claimed excemption saying
it is agriculture income, held not agri income u/s 16(2))
 Dooars tea co. ltd v. CIT (growing tea, and some other products, production
through labor, his income increased based on other products, here they imposed
tax, he said that he using them for production of tea and not selling them so cant
be taxed, appeal dismissed u/s s 2(1)(b)(1) saying non sold agriculture product
also taxable)
 CIT V. benoy Kumar (sale of jungle produce of spontaneous, where he is also
planting new trees, he claimed such activity is not taxable as agriculture income,
tribunal held that it is agriculture income, sc upheld)
 Nagi reddy v. CIT (
 K. Lakshmanan & Co. v. CIT (rearing silkworms, held taxable)
 Anil Plantations (P.) Ltd. v. CIT (land was taken by govt for railways, assesse
claimed money given by govt on agriculture land is also agriculture income, held
agriculture income)

Person
 CIT v. Calcutta Stock Exchange Association Ltd (stock exchange business, co. facilitate
transaction of business of Calcutta stock exchange and earned, taxed, tribunal
upheld, hc reversed, sc reversed)
 CIT v. Bombay Oilseeds & Oil Exchange Ltd (principle of mutuality, laga receipts,
taxable, tribunal decision upheld)

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  CIT v. Adarsh cooperative housing society ltd (giving lands for lease and all and
earining income, tribunal held cant be taxed as commissioner said, sc upheld saying
under mutuality principle and also the other income was also from the members of
society)
 CIT v. Delhi Gymkhana Club Ltd. (recreation club claming exception based on
doctrine of mutuality, invested in surplus funds, he contested this is not taxable, held
valid)
 The Citizens Cooperative Society Ltd v. ACIT (section 80p, assesse made liable,
deduction of income was done)
 CIT v. Royal Western India Turf Club Ltd (co. doing several activities like racing and all
co. received amount for tickets from members and non members where tribunal
said that it is not taxable, hc said 3 activities are not taxable, sc said all are
taxable)daily admission, horse race, pvt boxes, season admission

Residential status individual company

 V.V.R.N.M. Subbayya Chettiar v. CIT (JHF, living in sri lanka had properties in india, he
came to india and AO taxed, tribunal revered, hc reversed, sc upheld as he is in
india and earing out in india and he will be a resident and his income can be treated
as foreign income)
 Narottam and Parekh Ltd. v. CIT, Bombay City (Ceylon based co. established in india,
and it was registered in Bombay and them work was also done at same place, held it
taxable)

Revenue receipt and capital receipt

 National Cement Mines Industries Ltd. v. CIT (mining, fixed amount was paid for
trouble and expenses, tribunal said this revenue receipt, hc said this commercial
transaction from the profits of co. so revenue, sc upheld)
 CIT v. Saurashtra Cement Ltd (additional cement plant was purchased, delivery of
machinery delayed, then amount was received by him as there was delay, AO said it
is capital receipt, tribunal upheld, hc reversed, sc said it is capital receipt)
 ACIT v. Meenakshi Khanna (alimony was received by assesse, held that cant be
taxed)
 CIT v. Rani Shankar Mishra ( amount received by Assessee as compensation for not
being job offered, held this is capital receipt)
 T.Kannan, Madurai v. Department Of Income Tax (purchased a land, of 2 and half
acers, capital receipt)
 Slide 29

Section 9 (royalty, Fees for Technical Services (FTS), Characterization of Income, Permanent
Establishment(PE) or Business Connection)
 Sanofi Pasteur Holdings SA v. dept of revenue, GOI (two French co. MA and GIMD
had purchased shares of shanH, and they also bought shares of Shanta a Indian co.
and transferred to shanH and then shanH was sold to SFH another French co., here
they claimed MA and GIMD are taxable in india as they sold their shares, ap hc said
cant be taxed under india French treaty)

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  CIT v. Samsung Electronics Co. Ltd. & Others (taxpayer made agreement with
Samsung for software shaing, ao said this is royalty, cit upheld, tribunal said it is not
royality, hc reversed, sc reversed)
 Asia Satellite Telecommunications Co. v. DIT (foreign co., AO taxed u/s. 142(1),
where CIT said that amount paid to appellant by his customers was royalty and
should pay, tribunal upheld, sc said that he is part of tax net as he is giving tele
services and tribunal decision set aside saying it is not royalty)
 CIT v. Neyveli Lignite Corporation Ltd. (mining, bought a steam generating plant,
went to contract with hungary co. for supply of goods, here he paid for design as
well, ito held paying for design to a forgien co. is income, CIT reversed, Tribunal
upheld, sc held not royalty)
 Ishikawajima-Harima Heavy Industries Ltd. v. DIT (Offshore supply and offshore
services, Transfer of property in goods as well as the payment, were carried on
outside the Indian soil, the transaction could not have been taxed in India)
 CIT v. M/s Kotak Securities Limited (charges paid to stock exchange, claimed tds, AO
rejected, hc said tds can be given u/s 194j, sc upheld)

Section 10 to 13a (
 Ram Kanwar Rana v. ITO (reteired from CCSU, ao held was not govt employee so s10
will nt apply, cit upheld, there are 2 conditions one he should be in a civil post under
state, sc said CCSU was governed by parliament so it is state and reversed the orders
of cit)
 Manish Chhabra v. CIT (assessee was providing his services to co., he was later
appointed as partner and then he was retired and amount was given as leave
encashment, he claimed gratuity u/s 10(10aa), ao disallowed as he was not retiered
he resigned, this was reversed by tribunal)

Section 15 16 17 (
 The Commissioner of Income Tax v. C J International Hotels Ltd (owning and
operating hotels, here he gave tips to employees and AO treated it as salary, and
said to deduce taxes u/s 192, tribunal upheld)

Section 22 (income from household property)

 CIT v. Poddar Cement Pvt Ltd (flat bought by assessee, but title was not transferred,
given for rent, assesse included it in other income u/s 56, ito taken the annual letting
value of those flats at Rs. 1, 31, 268 on the basis of rent receivable in respect of flats
from an adjoining building, cit upheld, tribunal said it is other income not house
income, sc reversed)
 Chennai Properties and Investment Limited v. CIT (receiving income from rents, hc
said it is income from house property, taxpayer said it is part of business as it is his
sole business and not income from house property, sc held it is business income as it
their sole source of income) income from business and gain or income from
household property? HC- business, SC- case to case basic, business and gain.