Legal News & Views

Indu Lata Rangwala vs. DCIT Whereas in a case where the initial assessment order is under Section 143 (3), and it is sought to be reopened within four years from the expiry of the relevant assessment year, the AO has to base his ‘reasons to believe’ that income has escaped assessment on some fresh tangible material that provides the nexus or link to the formation of such belief. In a case where the initial return is processed under Section 143 (1) of the Act and intimation is sent to the Assessee, the reopening of such assessment no doubt requires the AO to form reasons to believe that income has escaped assessment, but such reasons do not require any fresh tangible material

Lahoti Overseas Ltd vs. DCIT In every case of delay, there can be some lapses on the part of the litigant concern. That alone is not enough to turn down the plea and to shut the doors against him, unless and until, it makes a mala-fide or a dilatory statutory, the court must show utmost consideration to such litigant. In matters concerning the filing of appeals, in exercise of the statutory right, a refusal to condone the delay can result in a meritorious matter being thrown out at the threshold, which may lead to miscarriage of justice. Since the employee who was earlier handling the tax matters of the assessee company, while leaving the job of the assessee company, did not handover the relevant papers either to the assessee or to the next person, a fact which caused the delay, the delay was liable to be condoned by taking a lenient view. Article referred: http://itatonline.org/archives/2016/05/page/2/

Arvind Asmal Mehta vs. ITO The purchase of shares in the immediately preceding year was accepted by the Department in an order u/s 147 r.w.s 143(3) of the Act. The shares were evidenced by entries in the demat statement and consideration was received through banking channel. There was no clinching material to say that the impugned transaction was bogus. Also, the statement recorded during the search on M/s Alliance Intermediaries & Network Pvt. Ltd. does not contain any infirmity qua the impugned transaction. Therefore, the addition as income from undisclosed income was liable to be deleted. Article referred: http://itatonline.org/archives/2016/05/page/2/

For allowing / disallowing any expenditure under Section 37 of the Act, the basic thing to be seen as to whether the expenditure was incurred for furtherance of business interest of the Assessee or not. It is a fact that in this case because of the expenditure incurred no new assets came into existence. The expenditure was incurred considering the old relation with the supplier and to avoid future business complications. If an assessee makes payment which is compensatory nature, it has to be allowed. In this case, the payment was made in pursuance of an agreement and that was of compensatory nature i.e.it was not penal, hence it was to be allowed Article referred: http://itatonline.org/archives/2016/05/

Larsen & Toubro Limited vs. UOI No officer is acting independently and following judgments of this Court, but waiting for the superiors to give them a nod. Even the superiors are reluctant given the status of the assessee and the quantum of the demand or the refund claim. We are sure that some day we would be required to step in and order action against such officers who refuse to comply with the Court judgments and which are binding on them as they fear drastic consequences or unless their superiors have given them the green signal. If there is such reluctance, then, we do not find any enthusiasm much less encouragement for business entities to do business in India or with Indian business entitles. Such negative reactions / responses hurt eventually the National pride and image. It is time that the officers inculcate in them a habit of following and implementing judicial orders which bind them and unmindful of the response of their superiors. That would generate the right suppor...

The Gujarat High Court, observing that there is no fundamental right to consume intoxicants, has upheld the Resolution by Home Department of the state by which it had prohibited and discontinued the supply of Poppy Capsules by Government authorities. Justice N.V. Anjaria also observed that the ban amounts to redemption of the Directive Principles of State Policy under Article 47 of the Constitution. Article referred: http://www.livelaw.in/no-fundamental-right-consume-intoxicant-drugs-gujarat-hc/

In Vohra Sadikbhai Rajakbhai & Ors. Vs. State of Gujarat & Ors., the matter came up before the Hon'ble Supreme Court whether gross negligence in not maintaining particular level of water in the dam by the respondents; that has resulted into damage and destruction to the plantation of the appellants, causing loss of livelihood, could be said to be an 'Act of God'?" It so happened that the respondents had constructed and maintained a dam. 60,000 cusecs of water from this dam was released, which flooded the land of the appellants and destroyed the plantation therein. The Hon'ble court while accepting the State's argument that the water was released in public interest to avert a greater disaster as the excessively heavy rain which is an Act of God had increased water level in the dam to a dangerous level, found merit in the Appellant's argument that not keeping the level of the water low in preparation of rainy season was negligence. Article referre...