Income Tax Laws – Tips (with reference to Case laws ) – 1


The investment allowancenot allowable to hotel being not an industry. The Indian Hotels Co. Ltd. v. The Income Tax officer Mumbai, JT 2000(9) (SC) 139 : AIR 2000 SC 2645.

Sec. 269 UC – Rule 48 – L – Form 37 – I. When the authority can extent the time for filing the statement then it is only directory and not mandatory. DLF – Universal Ltd. v. Appropriate Authority, JT 2005(5) (SC) 469 : AIR 2000 SC 1985.

Yarn is covered by textile. The Commissioner of Income Tax Madra v. M/s. Sundaran Spining Mills, JT 1999(10) (SC) 32.


Compounding of the offence is discretion of the authorities and not the right of the accused. Union of India v. Banwari lal Aggarwal, 1999(1) RCR(Cri.) 290 (SC).

S. 181 IPC/193 IPC – Income Tax Officer is not the Court and cannot examine any person on oath – So, no offence under Penal code is attracted if some one gave false statement on oath before him. 3(1998) CCR 127 Bomb.

Prosecution for not filing of return in time. No Prior notice is to be given to the accused. Union of India v. Banwari Lal Agarwal, JT 1998(7) (SC) 384 : 1999(1) RCR (Cri.) 290 : AIR 1999 SC 196.

Loan exceeding the amount from Rs. 10,000/- given in cash. It will not attract Sec. 269 & 276 E as the provision is applicable only on deposits. Baidya Nath Plastic Industries (P.) Ltd. v. K.L. Anand, ITO, Co. World 2(2), New Delhi, 1998(1) RCR (Cri.) 716 (Delhi).

Tax not paid and no permit of plying the vehicle. Vehicle taken in custody by the taxation authority. Criminal Court cannot release the vehicle on superdari. State of M.P. v. Rakesh Kumar Gupta, 1998(4) RCR(Cri.) 485 M.P. FB

What is capital – Business asset is capital 1997(2) Supreme 5: 1997(2) Supreme 61.

Donation in public welfare benefit of exemption will be given. 1997(1) Supreme 104.

S. 40 is not applicable on the interest paid to the partner acting as Karta of respective HUF. 1997(3) Supreme 118.

There should be registration of the partnership firm with the I.T.O of the area. 1997(3) Supreme 489.

Penalty under the Income Tax Act and criminal proceedings both should not run parallel M/s Shastri Sales Corpn. v. Income Tax officer, 1996 Cri.L.J. 449(Bombay).

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