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Recent Income Tax Judgments

1.     Commissioner of Income-tax-1, Mumbai vs. Yatish Trading Co. (P.) Ltd.
      
         Fact that assessee was trading in shares would not estop assessee from dealing in shares as investment and to offer such gain for tax under head 'capital gains'.      

       Held: Gain from sale of shares held as investment to be taxed as capital gains and not as business income -IT


2.     Commissioner of Income-tax, Udaipur vs. Banswara Synthetic Ltd.

       Lease rentals paid are allowable as business expenditure and not as interest by treating cost of leased assets as loan amount

        Held: Sum paid as rent is a business exp.; can’t be treated as interest by taking cost of leased assets as loan -IT


3. Narasimha Raju Rudra Raju vs. Assistant Commissioner of Income-tax, Circle
         Sec. 54F exemption allowed on mere investment even if transactions not completed within stipulated time -IT : Assessee would be entitled to benefit under section 54F if he had invested amount of capital gain in purchasing or constructing residential house, even though transaction is not complete within period stipulated

4. Edwise Consultants (P.) Ltd. vs. Additional Commissioner of Income-tax
         High incentives to directors merely on pretext of higher earning in particular year isn’t justified -IT: Payment of high incentives to directors was not justifiable, merely because assessee company had earned high profits in current year

5. Mrs. Lalitha Rathnam vs. Income-tax Officer [2013] 35 taxmann.com
         Relinquishment of rights in property in family settlements in lieu of cash is 'transfer'; chargeable to cap gains -IT: Relinquishment of right over property in case of a family settlement falls under definition of 'transfer' and exigible to capital gains


6. Director of Income-tax (Exemption) vs. Panna Lalbhai Foundation
         Trust registration couldn’t be denied because of non-commencement of charitable activities -IT : Only because trust has not commenced activities, Commissioner would have no authority to ipso facto reject application for registration under section 12AA


7. Commissioner of Income-tax vs. Bhushan Capital & Credits Services (P.) Ltd.
          Share trading loss was genuine if unquoted shares were valued on net worth basis both at the time of purchase and sale -IT : Where shares were not quoted shares and valuation of shares both at time of purchase as well as at time of sale was made on networth basis which had not been challenged, transaction was to be held valid


8. Mahesh Investments vs. Assistant Commissioner of Income-tax, Circle - 1(1)
         Income from letting out of a commercial complex is ‘Income from house property’ and not a business income -IT : Income earned by assessee-firm from letting out a commercial complex was to be assessed as income from house property and not as business income

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