1.   The Commissioner of Income-Tax, Panchkula Versus M/s Haryana State Co-op Apex Bank Ltd. - Punjab & Haryana High Court

Haryana Co-op Society: Section 80-P Scope: Income Tax REFUND – Interest thereon: UpHeld “The Tribunal while upholding the order of the Commission of Income Tax(appeal) has reached the conclusion that the assessee-respondent, which is a cooperative apex bank, cannot be subjected to income tax in respect of the interest received by it on the refund of excess income tax paid. It has further been found that the assessee-respondent would be entitled to deduction under Section 80P(2)(a)(i) of the Act. TheTribunal has also placed reliance on a judgment of the Madras High Court in the case of “CIT Vs. Madhurai District Cooperative Bank Ltd.” (1999)239, ITR 700. It has come on record that the respondent bank has been carrying on business of banking and also provide credit facility to its members. We are not impressed with the argument that the interest on refund of income tax paid in excess was not attributable to the income derived from the business of banking within the meaning of Section 80P(2)(a)(i) of the Act. Once the income tax paid was derived from the business income then interest income would part-ake the character of the principal amount because the interest paid to the assessee-respondent is compensation on account of deprivation of the use of money.”

(Click here for judgment)

   

2.    Director of Income Tax (Exemption). Vs. Lilavati Kirtilal Mehta Medical Trust. - Bombay High Court

Charitable Trust Taxation: Held .“In the present case, the Assessing Officer held that the assessee was not entitled to the benefit of Section 11on the basis that the capital expenditure of Rs.12.19 crores was not liable to be taken into account in reckoning as to whether income in excess of 85% had been applied for charitable objects. The Tribunal was justified in holding that the capital assets acquired during the course of the year were in furtherance of the charitable purpose for which the Trust has been constituted. Consequently, the amount of Rs.12.19 crores towards capital assets is correctly regarded as expenditure incurred in furtherance of the charitable purposes of the Trust. Hence, the Tribunal has correctly come to the conclusion that the net profit of the Trust was not 16.95% as was the reasoning of the Assessing Officer, but would be between 6 and 7%. The grant of exemption under Section 11 for the assessment year in question was in order. In the circumstances, there is no merit in the appeal which does not raise any substantial question of law. The appeal is dismissed.”

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What's New 

a.   Nasscom to push for changes in DTC on SEZs  (Click for detail)

b.   TDS returns under taxman scrutiny  (Click for detail)

c.   EZ developers scramble to meet March 31 deadline  (Click for detail)

d.   Depreciation cannot be allowed on membership card of Stock Exchange  (Click for detail)

e.   Penalty proceedings: Mere submitting a claim which is incorrect in law would not amount to giving inaccurate particulars of income of assessee, but if claim besides being incorrect in law is malafide, Explanation 1 to section 271(1)(c) comes into play and work to disadvantage of assessee  (Click for detail)

f.    Service Tax Notification Nos. 36 to 42 issued  (Click for detail)

 

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