1.      CYBER MEDIA INDIA VS. COMMISSIONER OF INCOME TAX-1 & ANR., INCOME TAX APPEAL NO. 67 OF 1999, DATE OF DELIVERY OF JUDGEMENT : 07.02.2011, HIGH COURT OF DELHI

The appellant is aggrieved by the impugned judgment in as much as the authorities below have disallowed the deduction claimed by the assessee towards advertisement income accrued but not received in cash. The assessee sought deduction of the aforementioned income predicated on the fact that the method of accounting regularly followed by it, for income tax purposes, was “cash” basis. On consideration of the material on record, what emerges is that: (i) the assessee had been following hybrid system of accounting till the preceding assessment year i.e., Assessment Year 1988-1989; (ii). the assessee had been accounting for income received from advertisement on cash basis, which admittedly had been accepted by the revenue in the preceding years ending with Assessment Year 1988-1989; and (iii). the Tribunal has returned a finding of fact, in favour of the assessee, that the assessing officers observation that because expenses against advertisement and publicity had been recorded on accrual basis while, income from the said sources had been recorded on cash basis had created an “imbalance” was without merit.

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2.      COMMISSIONER OF INCOME TAX VS. M/S ESCORTS LIMITED, INCOME TAX APPEAL NO. 14 OF 1999, DATE OF DELIVERY OF JUDGEMENT : 01.02.2011, HIGH COURT OF DELHI

The CIT by virtue of this order disallowed the claim of the assessee in respect of the capital loss on transactions relating to purchase and sale of units issued by the Unit Trust of India, which were ubiquitously referred to at the relevant point in time as Unit-64. Besides this, by the same order, the CIT also directed the Assessing Officer to verify whether any expenditure had been incurred in regard to the impugned transactions towards brokerage and administrative expenses, and that if it were so found, the expenditure incurred was required to be adjusted against the dividend income earned in respect of the said units, for the purpose of computation of reliefs claimed by the assessee under section 80 M of the Act.

It was contended that the genesis of the notice issued by the CIT under section 263 of the Act was the enquiry made by the Assessing Officer with regard to the purchase and sale of the units by the assessee in the subsequent assessment year i.e., Assessment Year 1993-1994; which resulted in the Assessing Officer disallowing the claim of short term capital loss, on the ground that it constituted “speculative loss”.

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3.   [Contribution by  CA. Manoj Gupta, and contributor is available on Mobile No. 9350760606 / email-id: mgupta2803@gmail.com ]

An Article on " POSITIVE ATTITUDE "

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What's New

• RBI/ 2010-11/407 - Master Circular on Micro Credit  (Click for detail)

• Public Notice No. 29 - Incorporation of a new provision as paragraph 4.7A in the HBP. v1 to allow access to duty free inputs based on actuals, for pharmaceutical products manufactured through Non-Infringing process  (Click for detail)

• Public Notice No. 30 - Amendment in paragraph 4.24A related to Advance Authorisation for Annual Requirement in HBP v1  (Click for detail)

• Public Notice No. 31 - Amendment in Appendix – 30 A relating to Export Obligation Period under Advance Authorization/DFIA Schemes  (Click for detail)

• Policy Circular No. 20 - Restriction on export of Cotton yarn  (Click for detail)

• Notification No. 22 - Amendment of paragraph 4.1.3 of Foreign Trade Policy (FTP) to allow access to duty free inputs based on actuals to manufacturer of pharma products through Non-Infringing process  (Click for detail)

         

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