Gist of latest important caselaws

Below are the recent important tax caselaws related to Income tax, Service tax in brief. The citation is made available for your benefit :

 INCOME TAX

SECTION 2(42A)

CAPITAL GAINS – SHORT-TERM CAPITAL ASSETS/GAINS

Period of holding as de facto owner should be considered for computing holding period of capital asset u/s 2(42A) - Commissioner of Income-tax v. A. Suresh Rao (2014) 41 taxmann.com 475 (Karnataka)     SECTION 10(23C) EDUCATIONAL INSTITUTIONS Where assessee, running a college for Arabic language affiliated to Madras University, claimed exemption under section 10(23C)(iiiad), said claim could not be rejected merely on ground that its students had to pray daily along with religious leader and they had specific dress code accordingly to Islamic specifications - Deputy Director of Income-tax (Exemptions)-III v. Madarasa E-Bakhiyath-Us- Salihath Arabic College (2014) 41 taxmann.com 8 (Chennai - Trib.)       SECTION 28(v) BUSINESS INCOME - NON-COMPETE FEE Position prior to 1-4-2003 : Since amendment in Finance Act, 2002 was not clarificatory but amendatory in nature, non-competition fee received under a negative covenant is taxable only with effect from 1-4-2003, and not retrospectively - Commissioner of Income-tax v. Prakash Ladhani (2014) 41 taxmann.com 22 (Karnataka) SECTION 32 DEPRECIATION - ALLOWANCE/RATE OF Foreign exchange rate difference : Assessee was entitled to depreciation in respect of an amount representing addition to cost of plant and machinery on account of foreign exchange rate difference - Additional Commissioner of Income-tax v. Gujarat Narmada Valley Fertilizers Co. Ltd. (2013) 40 taxmann.com 481 (Gujarat)       SECTION 54F CAPITAL GAINS - EXEMPTION OF, IN CASE OF INVESTMENT IN RESIDENTIAL HOUSE Owning more than one residential house : Where an assessee on date of transfer of original asset, owns more than one residential house, he is not eligible for deduction under section 54F, even if other residential house is owned by assessee wholly or partially - Income-tax Officerv.Apsara Bhavana Sai (2013) 40 taxmann.com 528 (Hyderabad - Trib.)       SECTION 237 REFUNDS TDS : In pursuance of order passed by Supreme Court that shares allotted to employees under Employees Stock Option Scheme did not amount to perquisite and, thus, there was no liability to deduct tax at source in respect of same, amount so deducted in case of assessee-employee on aforesaid ground was to be refunded along with interest - K. Parthasarathy v. Commissioner of Income-tax (2014) 41 taxmann.com 16 (Madras)       SERVICE TAX SECTION 65(75) ON-LINE INFORMATION AND DATABASE ACCESS OR RETRIEVAL SERVICES Where assessee had only hired out infrastructure of broadband for use of customer and had not provided any data or information to customer, said activity did not amount to 'online information and data base access and/or retrievable services' - Gujarat State Petroleum Corpn. Ltd. v. Commissioner of Central Excise (2014) 41 taxmann.com 291 (Ahmedabad - CESTAT)

Recent important tax caselaws / judgements

SECTION 2(15)

CHARITABLE OR RELIGIOUS PURPOSE

Land dealings : Where assessee-trust was carrying out following activities: purchase of land at nominal cost, then level and clear it, cut into plots and sell of plots at much higher prices, and charging of fees and fines, activities of assessee were not charitable in nature within meaning of proviso to section 2(15) - Improvement Trust v. Commissioner of Income-tax (2014) 41 taxmann.com 403 (Amritsar - Trib.)     SECTION 10(23C) CHARITABLE/RELIGIOUS INSTITUTIONS University not tax-exempt under Art 289(1) of the Constitution as 'State' in Art 289 doesn't include University - Visvesvaraya Technological University v. Assistant Commissioner of Income-tax (2014) 42 taxmann.com 237 (Karnataka)       SECTION 45 CAPITAL GAINS - CHARGEABLE AS Business income v. Capital gains - Share dealings : Where assessee-corporation along with private entrepreneurs made investment in shares of companies which were formed with object of promoting agro/horticulture based industry in State, income arising from subsequent sale of those shares was to be taxed as 'capital gain' and not as a 'business income' - Commissioner of Income-tax v. Punjab Agro Industries Corporation Ltd. (2014) 41 taxmann.com 328 (Punjab & Haryana)       SECTION 268A FILING AN APPEAL BY INCOME-TAX AUTHORITY Monetary limit : Appeal cannot be dismissed without considering merits of case, solely on ground of low tax effect, where notional tax effect exceeds monetary limit prescribed by Board - Commissioner of Income-tax v. Anjani Fabrics Ltd (2014) 41 taxmann.com 361 (Gujarat)    Source : Taxmann