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14.07.2012 - Voice of CA Presents - Updates
Saturday, July 14, 2012

I.  Today's News:   


II.  Useful Case laws :

1.    CIT Vs. M/s Fernhill Laboratories and Industrial Establishment, ITA NO. 5615 OF 2010, Date of order: 12/06/2012, High court of Bombay

The Tribunal was correct in confirming the order of CIT (A) in holding that amount received for sale of trade mark and design were not taxable for the Assessment year 1999-2000?

From the circular no. 14/2001 issued by CBDT, it would be clear that the amendment bringing self generated intangible assets such as trademark to capital gains tax only with effect from Assessments Year 2002-03 onwards. In this case, we are concerned with Assessment Year 1999-2000 and therefore, the amendment would not have any effect. Further as held by the Supreme Court in the matter of Dy. CIT v/s. Core Health Care ltd. reported in 298 ITR 194 that a provision introduced with effect from a particular date would not have retrospective effect unless it is expressly stated to be so. Consequently, the sale of self generated trade marks during the Assessment year 1999-2000 is not chargeable to capital gains tax. So far as the sale of self generated designs (i.e. not acquired) the same is also not chargeable to capital gains tax not only for the reasons applicable to trade marks but for the fact that even till this date, no amendment has been made to Section 55(2) of the said Act defining cost of acquisition of design as in the case of trademark goodwill etc.

(Please click here for judgment)


2.   CIT Vs. Suresh R. Shah, ITA NO. 1974 OF 2011, Dated: 20/06/2012, High court of Bombay

Despite speculation activity and short period of holding, shares gain is STCG & not business profits.

Held that the respondent was an investor in shares and entitled to be taxed under the head capital gains in respect of purchase and sale of shares. The Tribunal after examining the facts found that the respondent had not borrowed any funds for its investments and that the long terms gains were attributable to only shares of 4 companies and 3 of them were held for a period of about 5 to 12 years. So far as short terms capital gains were concerned the Tribunal held that about 93% of the short terms gain/loss was attributable to shares of six companies and in any case all the shares were held for periods ranging in excess of 1 month. With regard to the fact that the respondent had returned speculation loss in his return, the Tribunal followed the decision of this Court in the matter of CIT V/s. Gopal Purohit reported in 228 CTR (Bom.) 582 to hold that there is no bar for an assessee to maintain two separate portfolios, one relating to investment in shares and another relating to business activities involving dealing in shares.

(Please click here for judgment)


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"Difficulties and problems are like  huge cotton bags.
They look huge for those who only look at it,
but they feel light for those who actually handle it


Thanks for your valuable time


"Voice of CA"  

CA. Sanjay 'Voice of CA' Agarwal
Mob: 9811080342,      
CA. Sidharth Jain, Co-Moderator  
CA. Mukesh K Bansal, Co-Moderator-FEMA 

CA. Avinash Gupta, Co-Moderator-International Taxation 


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