1.   IN THE CASE OF DIRECTOR INCOME TAX Vs. BASANTI DEVI & SHRI CHAKHAN LAL GARG  EDUCATION TRUST.- Corpus Amount- Charitable purpose.

It has been held that the donations received towards corpus of the trust would be capital receipt and not revenue receipt chargeable to tax.

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2.   ITA NO 467/2007 CIT VS KNORR BREMSE INDIA LTD.- DELHI HC- Section 36(1)(iii)

It has been held that when the assessee have sufficient funds in his books to      invest in the shares then mere allegation of the AO that the funds which were     borrowed for the purpose of investment in plant and machinery were invested in shares is not sufficient to disallow the interest component on such funds.

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Also see the judgment of the Apex court in the case of Core Health reported in 298 ITR 194(SC).

    

3.  In the case of CIT Vs Eastern Medikit Ltd- DELHI HC - Penalty under section 271(1) (c) - contravention of section 80HHC- Not leviable.

It has been held that when the judgment of the IPCA, upon which the AO relied and levied the penalty, was pronounced the assessee has already filed its return of income and hence it can be not said that the assessee has contented any settled law. It has been further affirmed that when two views are possible then penalty under section 271(1)(c) is not leviable.

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4.   WNS GLOBAL SERVICES PVT LTD Vs ITO (Bom)-Section 263, 10A(9)- Change of owner ship of the firm and allowability  of deduction under section 10A.

It has been held that if the AO fails to considered the provisions of section 10A(9), which debars an assessee from claiming deduction if the owner ship of the business has been changed, then the order of the AO is prejudicial to the interest of revenue and action of CIT(A) under section 263 is permissible.

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"Voice of CA"

CA. Kapil Goel, Moderator-Direct Taxes, Mob:9910272806, cakapilgoel@gmail.com

CA. Sidharth Jain, Co-Moderator, Mob: 9810418700, sidhjasso@yahoo.com

CA. Mukesh K Bansal, Co-Moderator-FEMA, mkak@rediffmail.com