Finance Act, 2002

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…

Mahim Patram Private Ltd., a contractor printing examination papers for entities outside Uttar Pradesh, was assessed sales tax on its works contracts for AY 2002‑03 and 2003‑04. The Central Sales Tax Act, 1956 had been amended to bring works contracts within the definition of "sale" but no Central rule prescribed the m…

The Supreme Court considered whether assessees engaged in broadcasting television signals to subscribers are liable to pay both entertainment tax under State enactments (Entry 62, List II of the Constitution) and service tax under the Finance Act, 1994 (Entry 97, List I). The Court held that the activity of broadcastin…

The Agricultural Produce Market Committee (AMC) of Narela claimed exemption from income tax under section 10(20) of the Income Tax Act, 1961, asserting it was a "local authority". The Finance Act, 2002 added an exhaustive Explanation to section 10(20) defining "local authority" as a Panchayat, Municipality, Municipal C…

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…

The Commissioner of Income Tax, Rajkot appealed against M/s Gujarat Siddhi Cement Ltd.'s claim of an investment allowance for additional costs incurred on plant and machinery due to foreign exchange rate fluctuations for the assessment year 1993-94. The assessing officer disallowed the claim, holding that the assets we…

The case concerned a block assessment of undisclosed income for the period 01‑04‑1989 to 10‑02‑2000, where the Assessing Officer failed to levy surcharge under Section 113 of the Income‑Tax Act. The Commissioner of Income Tax sought to levy surcharge retrospectively, relying on a proviso inserted in Section 113 by the …

The Urban Improvement Trust (UIT) of Kota, created under the Rajasthan Urban Improvement Act, 1959, claimed exemption from income tax under Section 10(20) of the Income Tax Act, 1961, asserting that it qualified as a "local authority" within the meaning of clause (iii) of the explanation – i.e., a Municipal Committee. …

Prism Cement Ltd., a unit that had been granted an absolute tax exemption under the Package Scheme of Incentives 1993 (PSI 1993) through an Eligibility Certificate (20‑02‑1998) and an Entitlement Certificate (24‑03‑1998), challenged the Maharashtra State's attempt to withdraw that benefit after the Finance Act, 2002 am…

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…

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…

Ashok Leyland Ltd., a manufacturer of commercial vehicles, filed Form F under Section 6A(2) of the Central Sales Tax Act, 1956 claiming that transfers of goods to its regional offices were stock transfers, not inter‑State sales. The Tamil Nadu assessing authority accepted the Form F, but later reopened the assessment, …

Virtual Soft Systems Ltd. filed a loss return for AY 1996-97 which was later reduced to a loss of Rs. 11,02,255 after disallowances and adjustments. The Assessing Officer levied a penalty of Rs. 31,71,692 under Section 271(1)(c)(iii) for concealment of income, despite the fact that no tax was payable. The ITAT deleted …

The Gujarat Maritime Board (GMB), a statutory authority created under the Gujarat Maritime Board Act, 1981 to develop minor ports, applied to be registered as a charitable institution under Section 12A of the Income‑Tax Act, 1961 to claim exemption under Section 11. The Commissioner of Income Tax rejected the applicati…

M/s. Jaswal Neco Ltd., a pig‑iron manufacturer, imported low‑ash metallurgical coke between June and August 1998 under export‑obligation exemptions. It failed to fulfill the export condition and was assessed a demand of Rs 7.21 crore comprising basic customs duty, special customs duty, special additional duty, and anti…

The Adityapur Industrial Area Development Authority (the Authority) challenged a notice issued by the Income Tax Department requiring the bank to deduct TDS on interest earned on its fixed deposits, arguing that its income was exempt under Article 289 of the Constitution and Section 10(20) of the Income Tax Act as a lo…

The New Okhla Industrial Development Authority (NOIDA), created under the U.P. Industrial Area Development Act, 1976, challenged income‑tax notices on the ground that it qualified as a "local authority" and was therefore exempt under section 10(20) of the Income Tax Act, 1961 as amended by the Finance Act, 2002. The ce…

Rajesh Projects entered a 90‑year lease with the Greater Noida Industrial Development Authority (GNIDA) and paid an upfront lease premium plus annual lease rent. The Income‑Tax Department issued notices for non‑deduction of tax at source (TDS) under Section 194‑I on the lease rent, the company contending that GNIDA, be…

The Supreme Court examined whether the provision of telephone services by telecom operators constitutes a sale of goods, a service, or a composite contract of both, and consequently whether State governments can levy sales tax under Entry 54 of List II. The petitioners argued that the transaction is purely a service, i…