Finance Act, 2001

The Commissioner of Income Tax (Mumbai) appealed against the Bombay High Court's dismissal of its challenge to the applicability of Rule 8D, which provides a method for computing expenditure under Section 14A of the Income Tax Act. The issue was whether Rule 8D, introduced by the Income‑Tax (Fifth Amendment) Rules, 200…

Bajaj Auto Ltd., a manufacturing unit in Uttarakhand, was granted a ten‑year exemption from central excise duty under Notification No. 50/2003‑C. The company, however, did not pay National Calamity Contingent Duty (NCCD), Education Cess and Secondary & Higher Education Cess, which were demanded through a show‑cause not…

The Association of Leasing and Financial Service Companies challenged the levy of service tax under Section 66 of the Finance Act, 1994 (as amended) on financial leasing, equipment leasing and hire‑purchase services, arguing that Parliament lacked competence under Entry 97 of List I because Article 366(29A) treated suc…

NCC Blue Water Products Ltd., a 100% export‑oriented unit, manufactured shrimp and shrimp seeds and sold them in the domestic tariff area (OTA) without the removal authorization of the Development Commissioner, contrary to the Exim Policy. The revenue issued a notice demanding excise duty under the proviso to Section 3…

The Union of India challenged the constitutional validity of clause (f) inserted by the Finance Act, 2001 into Section 43B of the Income Tax Act, 1961, which made deductions for leave‑encashment payable only on actual payment. Exide Industries argued that the clause violated the assessee's right to choose a mercantile …

The Central Board of Income Tax, Jalandhar appealed against the order of the Punjab & Haryana High Court which had upheld the Income Tax Appellate Tribunal’s decision that surcharge could not be levied on tax assessed under a block assessment where the search was conducted before 1 June 2002. The case involved a search…

Mis. Maruti Suzuki Ltd., a motor‑vehicle manufacturer, generated electricity in its plant using naphtha and diesel and sold a portion of the surplus to its joint ventures, vendors and the grid for a price. The company claimed CENVAT credit on the duty paid on the fuel used for electricity generation, arguing that elect…

Vijaya Bank claimed deductions under Section 36(1)(vii) of the Income Tax Act, 1961 for bad debts in the assessment years 1993‑94 and 1994‑95. The bank had created a provision, debited the profit and loss account and simultaneously reduced the Loans and Advances/ Debtors on the balance sheet, but it did not close each …

The appellant, a Central Excise Superintendent, filed a complaint alleging that Reliance Industries Ltd. evaded excise duty by taking credit without complying with Rule 56A of the Central Excise Rules, 1944. After Rule 56A was omitted by a 1994 notification, the respondent sought discharge, but the trial court framed a…

The Supreme Court examined whether interest expenditure incurred by Maxopp Investment Ltd. on shares held to acquire controlling interest, or held as stock‑in‑trade, could be deducted when the dividend income from those shares is exempt under Section 10. The Court held that the dominant‑purpose test is irrelevant; Sect…

The National Co‑operative Development Corporation (NCDC) earned interest on surplus funds held in its statutory fund and used that interest to make non‑refundable grants to state and national cooperative societies. The Assessing Officer disallowed the grants as capital expenditure, but the Commissioner of Income Tax (A…

The Supreme Court heard a civil appeal filed by the Commissioner of Income Tax, Gujarat against Mis United Phosphorous Ltd. concerning two tax issues: (1) whether interest paid on borrowings for capital assets that were not put to use in the relevant financial year could be allowed as a deduction under section 36(1)(ii…

A search under Section 132 of the Income Tax Act was conducted on 17 January 2001 at the premises of Suresh N. Gupta, uncovering undisclosed income of Rs.1,62,427. The Assessing Officer levied tax at the 60% rate prescribed by Section 113 and imposed a 17% surcharge relying on the Finance Act, 2001. The assessee challe…

Unicorn Industries, a manufacturer in Sikkim, claimed that a 2003 exemption notification under Section 5A of the Central Excise Act, 1944, which exempted basic excise duty and certain additional duties, also covered the National Calamity Contingent Duty (NCCD), education cess and secondary/higher education cess imposed…

Sarla Performance Fibers Ltd., a 100% export‑oriented unit (EOU), was assessed excise duty and penalty for removing partially oriented yarn to the domestic tariff area (DTA) without permission of the Development Commissioner. The Central Excise Commissioner ordered duty under the proviso to Section 3(1) of the Central …