Gist of Important tax caselaws / judgements

INCOME TAX ACT

SECTION 2(14)

CAPITAL GAINS - CAPITAL ASSET

Agricultural land : Where assessee claimed that during previous year he in terms of an agreement entered with a promoter of land had sold his agricultural land and said land was situated at a distance of more than eight kilometres from nearest panchayat, profit derived on sale of land was not liable to capital gain tax, because land was not a capital asset by virtue of section 2(14)(iii) - Income-tax Officer, Business Ward -IV (3), Chennai v. P. Prakasam (2014) 41 taxmann.com 79 (Chennai - Trib.) SECTION 41(1) REMISSION OR CESSATION OF TRADING LIABILITY Conditions precedent : If amount of advance received for making export stood as a liability in books of account, and same had not been written of, it could not be said that liability had ceased to exist; additions under section 41(1) could not be made - Aasia Business Ventures (P.) Ltd.v.Income Tax Officer (2014) 41 taxmann.com 84 (Mumbai - Trib.)  SECTION 55 CAPITAL GAINS - COST OF ACQUISITION Goodwill : Sale of goodwill of profession would not as such come within ambit of provisions of section 55(2)(a); same is not taxable as LTCG - Dr. K. Premraj v. Deputy Commissioner of Income-tax (2014) 41 taxmann.com 81 (Chennai - Trib.) SECTION 68 CASH CREDITS Loan : Where in respect of loan transaction, it was apparent that amount was advanced through account payee cheques and lender had got sufficient balance in their bank account before issuing cheques, said transaction was to be regarded as genuine and, thus, loan amount could not be added to assessee's income under section 68 merely on ground that lenders were related to a person who was involved in providing accommodation entries - Commissioner of Income-tax -1, Agra v. Rahul Vineet Traders (2014) 41 taxmann.com 86 (Allahabad) SECTION 194-I DEDUCTION OF TAX AT SOURCE – RENT Hire of vehicles : Where assessee entered into an agreement with a contractor for hiring of vehicles and made use of vehicles and equipment and paid hire charges on basis of number of hours of use, section 194-I, and not section 194C, would be attracted - Three Star Granites (P.) Ltd. v. Assistant Commissioner of Income-tax (2014) 41 taxmann.com 91 (Kerala) SECTION 260A HIGH COURT - APPEAL TO Condonation of delay : Where delay in filing appeal was due to negligence of advocate and also negligence of assessee who did not enquire about filing of appeal for more than two and half years, application for condonation of delay was to be rejected - Dr. G.G. Dhir v. Deputy Commissioner of Income-tax (2014) 41 taxmann.com 88 (Allahabad) Source : Taxmann