Apex Law Journal
Apex Law Journal
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Editor

Neha Goel, Advocate

Advisory Board

S.C. Khunger, Advocate

Rohit Bansal, Advocate

Varinder Singh Kanwar, Advocate

Hittan Nehra, Advocate

Judgments on Income Tax Act, 1961

Saturday, June 26, 2010
Income Tax Act, 1961

Income Tax Act, 1961 — Section 147 — Direct Tax Laws (Amendment) Act, 1987 — Direct Tax Laws (Amendment) Act, 1989 — Circular No.549 dated 31st October, 1989 — Power to re-open the assessment — Held, Assessing Officer has power to re-open the assessment only where he has reason to believe that income has escaped assessment — Post-1st April, 1989, power to re-open is much wider — However, one needs to give a schematic interpretation to the words “reason to believe” failing which, we are afraid, Section 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of “mere change of opinion”, which cannot be per se reason to re-open.

 
Income Tax Act, 1961

Income Tax Act, 1961 — Section 147 — Direct Tax Laws (Amendment) Act, 1987 — Direct Tax Laws (Amendment) Act, 1989 — Circular No. 549 dated 31st October, 1989 — The concept of “change of opinion” stood obliterated with effect from 1st  April, 1989, i.e. after substitution of s.147 of the Act by Direct Tax Laws (Amendment) Act, 1989. 

 
Income Tax Act, 1961

Income Tax, 1961 — Difference between power to review and power to re-assess — Held, there is conceptual difference between power to review and power to re-assess — The Assessing Officer has no power to review; he has the power to re-assess — But re-assessment has to be based on fulfillment of certain pre-condition.

 
Income Tax Act, 1961

Income Tax Act, 1961 — Section 147 — Direct Tax Laws (Amendment) Act, 1987 — Direct Tax Laws (Amendment) Act, 1989 — Circular No.549 dated 31st October, 1989 — Power to re-open the assessment — Held, after 1st April, 1989, Assessing Officer has power to re-open, provided there is “tangible material” to come to the conclusion that there is escapement of income from assessment — Reasons must have a live link with the formation of the belief.

 
Monday, February 15, 2010
Income Tax Act, 1961

Income Tax Act, 1961 — Sections 153 BC(b), 142(2), 142(3) and  158 BC(a) — Expression “So far as may be” in Section 153 BC(b) — Contention that the expression ‘so far as may be apply’ indicates that it is not expected to follow the provisions of Section 142, sub-sections 2 and 3 of Section 143 strictly for the purpose of Block assessments — Held, not tenable — Where the assessing officer in repudiation of the return filed under Section 158 BC(a) proceeds to make an enquiry, he has necessarily to follow the provisions of Section 142, sub-sections (2) and (3) of Section 143 — There is no reason to restrict the scope and meaning of the expression ‘so far as may be apply’.

 
Income Tax Act, 1961

Income Tax Act, 1961 — Section 143(2) — Notice — Whether issue of notice under Section 143(2) of the Act within the prescribed time for the purpose of block assessment under Chapter XIV-B of the Act is mandatory for assessing undisclosed income detected during search conducted under Section 132 of the Act ? — Held, yes.  

 
Wednesday, January 13, 2010
Income Tax Act, 1961

Income Tax Act, 1961 — Section 43-B, second proviso — Finance Act, 2003 — Whether omission [deletion] of the second proviso to Section 43-B of the Income Tax Act, 1961, by the Finance Act, 2003, operated with effect from 1st April, 2004, or whether it operated retrospectively with effect from 1st April, 1988? — Held, it operated retrospectively with effect from 1st April, 1988.  

 
Friday, August 14, 2009
Income Tax Act, 1961

Income Tax Act, 196 — Section 45(5) — Land Acquisition Act, 1894, Sections 23(1A), 23(2), 28 and 34 — Whether additional amount under Section 23(1A), solatium under Section 23(2), interest paid on excess compensation under Section 28 and interest under Section 34 of the 1894 Act, could be treated as part of the compensation under Section 45(5) of the 1961 Act? — Held, interest under Section 28 unlike interest under Section 34 is an accretion to the value, hence it is a part of enhanced compensation or consideration which is not the case with interest under Section 34 of the 1894 Act — So also additional amount under Section 23(1A) and solatium under Section 23(2) of the 1894 Act forms part of enhanced compensation under Section 45(5)(b) of the 1961 Act — Further held, the year in which enhanced compensation is received is the year of taxability.

 
Income Tax Act, 1961

Income Tax Act, 1961 — Section 45 — Taxing a transaction as capital gains — The following conditions need to be satisfied for taxing a transaction as capital gains, viz., the subject-matter must be a capital asset, the transaction must fall in the definition of “transfer”, there must be profit or loss called “Capital Gains” and that the taxpayer has claimed exemption in whole or in part by complying with legal provisions (Like Section 54F).  

 
Income Tax Act, 1961

Income Tax Act, 1961 — Section 45 — From Section 45 it is clear that capital gains are not income accruing from day to day — It is deemed income which arises at a fixed point of time, viz, date of transfer.

 
Income Tax Act, 1961

Income Tax Act, 1961 — Section 45(5) — Held, Section 45(5) of the 1961 Act deals with transfer(s) by way of compulsory acquisition and not by way of transfers by way of sales etc — covered by Section 45(1) of the 1961 Act — Secondly, Section 45(5) of the 1961 Act talks about enhanced compensation or consideration which in terms of L.A. Act 1894 results in payment of additional compensation.  

 
Sunday, September 14, 2008
Income Tax Act, 1961

Income Tax Act, 1961 — Section 271(1)(c) read with amendment made by Finance Act, 2002 (in short `Finance Act') w.e.f. 1.4.2003 in Explanation 4 to Section 271(1)(c)(iii) of the Act — Whether the penalty under Section 271 (1) (c) of the Income Tax Act, 1961 can be levied if the returned income is a loss? — Held, yes — Explanation 4(a) to Section 271(1) (c) intended to levy the penalty not only in a case where after addition of concealed income, a loss returned, after assessment becomes positive income but also in a case where addition of concealed income reduces the returned loss and finally the assessed income is also a loss or a minus figure.

 
Saturday, July 12, 2008
Income Tax Act, 1961

Income Tax Act, 1961 — Section 269 SS and Section 271D — Any advance taken by way of any loan of more than Rs.20,000/-, held, is to be made by way of an account payee cheque only — Failure to comply with the provisions of Section 269 SS will attract penalty as provided under Section 271D of the Income Tax Act, 1961.

 
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