Today's cases – TIOL @ speed of light
IMPORTANT judgements have been delivered by the Supreme Court which we cannot hold till tomorrow and so we bring them for you today.
Income tax - Sec 10(33) - Revenue disallows loss arising out of dividend-stripping transaction prior to 1.4.2002 on ground that it was artificial transaction - NO, it is genuine and allowable, says Supreme Court:
THE dividend-stripping has been a hot topic in the domain of taxation for a long time. When the ITAT Special Bench decision in the case of M/s Walfort Share & Stock Brokers Pvt Ltd came, many revenue observers felt that it may slow down litigation. But it did not happen, and Revenue went to Bombay High Court. After losing there the Revenue filed an SLP before the Apex Court which has finally ruled against the Revenue and settled the issue in favour of assessee. The issue before the Bench was - Whether the loss arising in the course of dividend stripping transaction taking place prior to 1.4.2002 was disallowable on the ground that such loss was artificial as the dividend stripping transaction was not a business transaction. [this judgement was delivered by the Supreme Court on 06/07/2010]
Central Excise – Appeals – CESTAT dismisses assessee's appeal; Later Revenue come up with an appeal against the same order – Doctrine of Merger not applicable as the issues in the two appeals are different – Supreme Court :
The doctrine would have no application for the plain and simple reason that the subject matter of the appeal filed by the assessee against the adjudicating authority's order in original was limited to disallowance of two out of eight deductions claimed by the assessee. The Tribunal was in that appeal concerned only with the question whether the adjudicating authority was justified in disallowing deductions under the said two heads. It had no occasion to examine the admissibility of the deductions under the remaining six heads obviously because the assessee's appeal did not question the grant of such deductions. Admissibility of the said deductions could have been raised only by the Revenue who had lost its case qua those deductions before the adjudicating authority. Dismissal of the appeal filed by the assessee could consequently bring finality only to the question of admissibility of deductions under the two heads regarding which the appeal was filed. The said order could not be understood to mean that the Tribunal had expressed any opinion regarding the admissibility of deductions under the remaining six heads which were not the subject matter of scrutiny before the Tribunal. That being so, the proceedings instituted by the Commissioner, Central Excise brought up a subject matter which was distinctively different from that which had been examined and determined in the assessee's appeal no matter against the same order, especially when the decision was not rendered on a principle of law that could foreclose the Revenue's case. [this judgement was delivered by the Supreme Court on 06/07/2010]
Income Tax – TDS – Payment made to foreign Company for fishing vessels – Liable to deduct TDS and if not deducted, to be treated as in Default – Supreme Court
: total income of non-resident company shall include all income from whatever source derived received or deemed to be received in India. It also includes such income which either accrues, arises or deem to accrue or arise to a non-resident company in India. The legal fiction created has to be understood in the light of terms of contract. [this judgement was delivered by the Supreme Court on 07/07/2010 – yesterday and can be accessed from www.taxindiainternational.com)