S. 9(1)(i) : Income deemed to accrue or arise in India – Concept of “source rule” vs. “residence rule” explained. Definition of expression “fees for technical services” in s. 9(1)(vii) explained with reference to “consultancy” services. [S.9(1)(vii)]
The assessee paid fees to a non-resident (NRC). The obligation of the NRC was to: (i) Develop comprehensive financial model to tie-up the rupee and foreign currency loan requirements of the project. (ii) Assist expert credit agencies world-wide and obtain commercial bank support on the most competitive terms. (iii) Assist the appellant company in loan negotiations and documentation with the lenders. The assessee claimed that as the fees were paid for services rendered outside India, the same were not chargeable to tax in India and that the assessee was under no obligation to deduct TDS u/s. 195. However, the AO and CIT rejected the claim of the assessee. The High Court (228 ITR 564) held that the said payment was not assessable u/s. 9(1)(i) but that it was assessable u/s. 9(1)(vii). The assessee claimed that s. 9(1)(vii) was constitutionally invalid as it taxed extra-territorial transactions. However, this claim was rejected by the Constitution Bench of the Supreme Court in 332 ITR 130. On merits, the matter was remanded to the Division Bench of the Supreme Court. HELD by the Division Bench dismissing the appeal:
(i) Re S. 9(1)(i): The NRC is a Non-Resident Company and it does not have a place of business in India. The revenue has not advanced a case that the income had actually arisen or received by the NRC in India. The High Court has recorded the payment or receipt paid by the appellant to the NRC as success fee would not be taxable under section 9(1)(i) of the Act as the transaction/activity did not have any business connection. The conclusion of the High Court in this regard is absolutely defensible in view of the principles stated in
C.I.T. v. Aggarwal and Company 56 ITR 20, C.I.T. v. TRC 166 ITR 1993 and Barendra Prasad Roy v. ITC 129 ITR 295.
(ii) Re S. 9(1)(vii): The principal provision is Clause (b) of section 9(1)(vii) of the Act. The said provision carves out an exception. The exception carved out in the latter part of clause (b) applies to a situation when fee is payable in respect of services utilized for business or profession carried out by an Indian payer outside India or for the purpose of making or earning of income by the Indian assessee i.e. the payer, from a source outside India.
(iii) Re “Source Rule” in s. 9(1)(vii): Clause (b) of section 9(1)(vii), it lays down the principle that is basically known as the “source rule”, that is, income of the recipient to be charged or chargeable in the country where the source of payment is located, to clarify, where the payer is located. The Clause further mandates and requires that the services should be utilized in India.
(iv) Re “Source Rule” vs. “Residence Rule”: The two principles, namely, “Situs of residence” and “Situs of source of income” have witnessed divergence and difference in the field of international taxation. The principle “Residence State Taxation” gives primacy to the country of the residency of the assessee. This principle postulates taxation of world-wide income and world-wide capital in the country of residence of the natural or juridical person. The “Source State Taxation” rule confers primacy to right to tax a particular income or transaction to the State/nation where the source of the said income is located. The second rule, as is understood, is transaction specific. To elaborate, the source State seeks to tax the transaction or capital within its territory even when the income benefit belongs to a non-residence person, that is, a person resident in another country. The aforesaid principle sometimes is given a different name, that is, the territorial principle. It is apt to state here that the residence based taxation is perceived as benefiting the developed or capital exporting countries whereas the source based taxation protects and is regarded as more beneficial to capital importing countries, that is, developing nations. Here comes the principle of nexus, for the nexus of the right to tax is in the source rule. It is founded on the right of a country to tax the income earned from a source located in the said State, irrespective of the country of residence of the recipient. It is well-settled that the source based taxation is accepted and applied in international taxation law.
(v) Re meaning of the expression, managerial, technical or consultancy service in s. 9(1)(vii): The expression “managerial, technical or consultancy service” have not been defined in the Act, and, therefore, it is obligatory on our part to examine how the said expressions are used and understood by the persons engaged in business. The general and common usage of the said words has to be understood at common parlance. Technical services, mean in this context services requiring expertise in technology. Consultancy services, mean in this context advisory services. The category of technical and consultancy services are to some extent overlapping because a consultancy service could also be technical service. However, the category of consultancy services also includes an advisory service, whether or not expertise in technology is required to perform it. The word “consultancy” has been defined in the dictionary as “the work or position of a consultant; a department of consultants.” “Consultant” itself has been defined, inter alia, as “a person who gives professional advice or services in a specialized field.” It is obvious that the word “consultant” is a derivative of the word “consult” which entails deliberations, consideration, conferring with someone, conferring about or upon a matter.
(vi) Re Facts: On facts, the NRC had acted as a consultant. It had the skill, acumen and knowledge in the specialized field i.e. preparation of a scheme for required finances and to tie-up required loans. The nature of service referred by the NRC, would come within the ambit and sweep of the term ‘consultancy service’ and, therefore, it has been rightly held that the tax at source should have been deducted as the amount paid as fee could be taxable under the head ‘fee for technical service’. Once the tax is payable the grant of ‘No Objection Certificate’ was not legally permissible. Ergo, the judgment and order passed by the High Court are absolutely impregnable. (Civil Appeal No. 7796 of 1997, dt. 18-2-2015)
GVK Industries Ltd. v. ITO (2015) 275 CTR 121 (SC), www.itatonline.org
S. 10(23C)(iiiad) : Educational institution – Mere surplus does not mean institution is existing for making profit. The predominant object test must be applied. The AO must verify the activities of the institution from year to year. [S.11]
Court held that:(1) Where an educational institution carries on the activity of education primarily for educating persons, the fact that it makes a surplus does not lead to the conclusion that it ceases to exist solely for educational purposes and becomes an institution for the purpose of making profit.
(2) The predominant object test must be applied – the purpose of education should not be submerged by a profit making motive.
(3) A distinction must be drawn between the making of a surplus and an institution being carried on “for profit”. No inference arises that merely because imparting education results in making a profit, it becomes an activity for profit.
(4) If after meeting expenditure, a surplus arises incidentally from the activity carried on by the educational institution, it will not be cease to be one existing solely for educational purposes.
(5) The ultimate test is whether on an overall view of the matter in the concerned assessment year the object is to make profit as opposed to educating persons.
(6) The correct tests which have been culled out in the three Supreme Court judgments, namely, Surat Art Silk Cloth 121 ITR 1 (SC), Aditanar Educational Institutional 224 ITR 310 (SC), and American Hotel and Lodging 301 ITR 86, would all apply to determine whether an educational institution exists solely for educational purposes and not for purposes of profit.
(7) In addition, that the 13th proviso to section 10(23C) is of great importance in that assessing authorities must continuously monitor from assessment year to assessment year whether such institutions continue to apply their income and invest or deposit their funds in accordance with the law laid down. Further, it is of great importance that the activities of such institutions be looked at carefully. If they are not genuine, or are not being carried out in accordance with all or any of the conditions subject to which approval has been given, such approval and exemption must forthwith be withdrawn. All these cases were disposed of making it clear that revenue is at liberty to pass fresh orders if such necessity is felt after taking into consideration the various provisions of law contained in section 10(23C) read with section 11 of the Income-tax Act.(CA. No. 5167 of 2008, dated 16-3-2015)(AY. 2000-01, 2001-02)
Queen’s Educational Society v. CIT (2015) 372 ITR 699 / 275 CTR 449 / 117 DTR 1 (SC);
UOI v. Pinegrove International charitable Trust & Ors. 275 CTR 449 / 117 DTR 1 (SC);
Editorial: Decision in
CIT v. Quuen’s Educational Society (2009) 319 ITR 160 (Uttarakhand)(HC) is reversed.
S.28(i) : Business income – Income from house property – Letting of property was held to be assessable as business income and not was income from house property.[S.22]
The Supreme Court had to consider whether the income from letting of property is assessable as “profits and gains of business” or as “income from house property” and what are the tests to be applied. HELD by the Supreme Court:
(i) A mere entry in the object clause showing a particular object would not be the determinative factor to arrive at a conclusion whether the income is to be treated as income from business and such a question would depend upon the circumstances of each case, viz., whether a particular business is letting or not.
(ii) Each case has to be looked at from a businessman’s point of view to find out whether the letting was the doing of a business or the exploitation of his property by an owner. A thing can not by its very nature be a commercial asset. A commercial asset is only an asset used in a business and nothing else, and business may be carried on with practically all things. Therefore, it is not possible to say that a particular activity is business because it is concerned with an asset with which trade is commonly carried on. There is nothing to support the proposition that certain assets are commercial assets in their very nature.
(iii) Where there is a letting out of premises and collection of rents the assessment on property basis may be correct but not so, where the letting or sub-letting is part of a trading operation. The dividing line is difficult to find; but in the case of a company with its professed objects and the manner of its activities and the nature of its dealings with its property, it is possible to say on which side the operations fall and to what head the income is to be assigned. (Civil Appeal No. 4494 of 2004, dated 9-4-2015.) (AY.1986-87)(AY. 1979-80, 1983-84, 1984-85)
Chennai Properties & Investment Ltd. v. CIT (SC), www.itatonline.org
Editorial: CIT v. Chennai Properties & Investments Ltd. (2004) 135 Taxman 509/ 186 CTR 680 (Mad.)(HC) & CIT v. Chennai Properties & Investments Ltd (2004) 266 ITR 685 (Mad.)(HC) is approved.
S. 28(i) : Business income – Capital gains – Investment in share – Selling shares frequently – Volume and magnitude was very high – Assessable as business income.[S.45]
Assessee declared income arising from sale of shares as short-term capital gain. Tribunal found that assessee had regularly dealt in purchase and sale of shares which indicated period of holding to be very short and that he earned only a meagre amount of dividend while gains from sale of shares was Rs. 65.45 lakhs. High Court upheld order of Tribunal that income arising from sale of shares was assessable as business income. Special leave petition filed against impugned order was dismissed. [S. 28(i)] (SLA (C) No. 20307 of 2014 dated 11-8-2014)(AY. 2007-08)
Manoj Kumar Samdaria v. CIT (2014) 52 taxmann.com 247 / (2015) 228 Taxman 63 (SC)
Editorial: Judgment of Delhi High Court in
Manoj Kumar Samdaria v. CIT (2014) 223 Taxman 245 (Mag)(Delhi)(HC) is affirmed.
S. 36(1)(iii) : Interest on borrowed capital – Upfront fee – Interest on debenture holder – Allowable in the first year or to be spread over a period of five years – Method of accounting – Matching concept. [S. 35D, 37(1), 43, 145]
The assessee issued debentures in which two options as regards payment of interest were given to the subscribers/debenture holders. They could either receive interest periodically, that is every half yearly @ 18% per annum over a period of five years, or else, the debenture holders could opt for one time upfront payment of Rs. 55 per debenture. In the second alternative, 55 per debenture was to be immediately paid as upfront on account of interest. At the end of five years period, the debentures were to be redeemed at the face value of Rs. 100. The assessee paid to the debenture holder the upfront interest payment and claimed the same as a deduction. In the accounts, the interest expenditure was shown as deferred expenditure. However, the AO, CIT(A), ITAT and High Court rejected the assessee’s claim and held that though the amount was paid, the same was only allowable as a deduction over the tenure of the debentures. On appeal by the assessee to the Supreme Court HELD allowing the appeal:
Held that normally revenue expenditure incurred in a particular year has to be allowed in that year and if the assessee claims that expenditure in that year, the Department cannot deny the same. Fact that assessee has deferred the expenditure in the books of account is irrelevant. However, if the assessee himself wants to spread the expenditure over a period of ensuing years, it can be allowed only if the principle of ‘Matching Concept’ is satisfied. Once a return in that manner was filed, the AO was bound to carry out the assessment by applying the provisions of that Act and not to go beyond the said return. There is no estoppel against the statute and the Act enables and entitles the assessee to claim the entire expenditure in the manner it is claimed.(Civil Appeal Nos. 6366-6368 of 2003) (AY. 1996-97, 1997-98, 1998-99)
Taparia Tools Ltd. v. JCIT (2015) 372 ITR 605 / 276 CTR 1(SC)
S. 37(1) : Business expenditure – Commission – Agreement – AO has to consider relevant facts and determine according to law – On facts the disallowance of commission was held to be justified, mere existence of agreement was not sufficient.
The question that was posed by the High Court was whether acceptance of the agreements, affidavits and proof of payment would debar the assessing authority to go into the question whether the expenses claimed would still be allowable under section 37 of the Act. This is a question which the High Court held was required to be answered in the facts of each case in the light of the decision of this Court in Swadeshi Cotton Mills Co. Ltd. v. CIT (1967) 63 ITR 57 (SC) and Lachminarayan Madan Lal v. CIT l (1972) 86 ITR 439 (SC). In Lachminarayan it was held that “The mere existence of an agreement between the assessee and its selling agents or payment of certain amounts as commission, assuming there was such payment, does not bind the Income Tax Officer to hold that the payment was made exclusively and wholly for the purpose of the assessee’s business. Although there might be such an agreement in existence and the payments might have been made. It is still open to the Income tax Officer to consider the relevant facts and determine for himself whether the commission said to have been paid to the selling agents or any part thereof is properly deductible under Section 37 of the Act.” There were certain Government Circulars which regulated, if not prohibited, liaisoning with the government corporations by the manufacturers for the purpose of obtaining supply orders. The true effect of the Government Circulars along with the agreements between the assessee and the commission agents and the details of payments made by the assessee to the commission agents as well as the affidavits filed by the husbands of the partners of M/s. R.J. Associates were considered by the High Court. In performing the said exercise the High Court did not disturb or reverse the primary facts as found by the learned Tribunal. Rather, the exercise performed is one of the correct legal inferences that should be drawn on the facts already recorded by the learned Tribunal. The questions reframed were to the said effect. The legal inference that should be drawn from the primary facts, as consistently held by this Court, is eminently a question of law. No question of perversity was required to be framed or gone into to answer the issues arising. In fact, as already held by us, the questions relatable to perversity were consciously discarded by the High Court. We, therefore, cannot find any fault with the questions reframed by the High Court or the answers provided. Civil appeal of assessee was dismissed. (Civil Appeal No. 1569 of 2007, dated 10-3-2015.)
Premier Breweries Ltd. v. CIT (SC); www.itatonline.org
S. 80HHC : Export business – It is a prerequisite that there must be profits from the export business – If the exports business has suffered a loss, deduction cannot be allowed from domestic business.
The Supreme Court had to consider two facets of s. 80HHC: (i) whether the view that deduction is permissible under section 80HHC only when there are profits from the exports of the goods or merchandise is correct or it is open to the assessee to club the income from export business as well as domestic business and even if there are losses in the export business but after setting off those losses against the income/profits from the business in India, still there is net-profit of the business, the benefit under section 80HHC will be available? (ii) Whether, while applying the formula, we have to see what would comprise “total turnover”? HELD by the Supreme Court:
(i) It stands settled, on the co-joint reading of IPCA (2004) 12 SCC 742 and A.M. Moosa (2007) 9 SCR 831, that where there are losses in the export of one type of goods (for example self-manufactured goods) and profits from the export of other type of goods (for example trading goods) then both are to be clubbed together to arrive at net profits or losses for the purpose of applying the provisions of section 80HHC of the Act. If the net result was loss from the export business, then the deduction under the aforesaid Act is not permissible. As a fortiori, if there is net profit from the export business, after adjusting the losses from one type of export business from other type of export business, the benefit of the said provision would be granted.
(ii) In the assessee’s case, in so far as export business is concerned, there are losses. The assessee’s argument relying upon section 80HHC(3)(b) to contend that the profits of the business as a whole i.e. including profits earned from the goods or merchandise within India will also be taken into consideration and that the losses in the export business, but profits of indigenous business outweigh those losses and the net result is that there is profit of the business, then the deduction under section 80HHC should be given is not acceptable. From the scheme of section 80HHC, it is clear that deduction is to be provided under sub-section (1) thereof which is “in respect of profits retained for export business”. Therefore, in the first instance, it has to be satisfied that there are profits from the export business. That is the prerequisite as held in IPCA and A.M. Moosa as well. Sub-section (3) comes into picture only for the purpose of computation of deduction. For such an eventuality, while computing the “total turnover”, one may apply the formula stated in clause (b) of subsection (3) of Section 80HHC. However, that would not mean that even if there are losses in the export business but the profits in respect of business carried out within India are more than the export losses, benefit under Section 80HHC would still be available. In the present case, since there are losses in the export business, question of providing deduction under section 80HHC does not arise and as a consequence, there is no question of computation of any such deduction in the manner. (CA. No. 8912 of 2003, dated 1-4-2015)
Jeyar Consultant & investment Pvt. Ltd. v. CIT (2015) 117 DTR 369 (SC); www.itatonline.org
S. 80-IB (10) : Housing project – If the project is approved by local authority as housing project with convenience shopping the assessee is entitled to deduction – Prior to 1-4-2005 – Clause (d) inserted to Section 80-IB(10) with effect from 1-4-2005 is prospective and not retrospective and hence cannot be applied for the period prior to 1-4-2005.
All these special leave petitions are filed by the Revenue/ Department of Income Tax against the judgments rendered by various High Courts deciding identical issue which pertains to the deduction under section 80-IB(10) of the Income- tax Act, as applicable prior to 1-4-2005. We may mention at the outset that all the High Courts have taken identical view in all these cases holding that the deduction under the aforesaid provision would be admissible to a “housing project”.
All the assessees had undertaken construction projects which were approved by the municipal authorities/local authorities as housing projects. On that basis, they claimed deduction under Section 80-IB(10) of the Act. This provision as it stood at that time, i.e., prior to 1-4-2005 reads as under: – Section 80-IB(10) [as it stood prior to 1-4-2005]
“(10) The amount of profits in case of an undertaking developing and building housing projects approved before the 31st day of March, 2005 by a local authority, shall be hundred per cent of the profits derived in any previous year relevant to any assessment year from such housing project if,
(a) such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October, 1998;
(b) the project is on the size of a plot of land which has a minimum area of one acre; and
(c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the cities of Delhi or Mumbai or within twenty-five kilometres from the municipal limits of these cities and one thousand and five hundred square feet at any other place.”
However, the Income Tax authorities rejected the claim of deduction on the ground that the projects were not “housing project” inasmuch as some commercial activity was also undertaken in those projects. This contention of the Revenue is not accepted by the Income Tax Appellate Tribunal as well as the High Court in the impugned judgment. The High Court interpreted the expression “housing project” by giving grammatical meaning thereto as housing project is not defined under the Income- Tax Act insofar as the aforesaid provision is concerned. Since sub-section (10) of section 80-IB very categorically mentioned that such a project which is undertaken as housing project is approved by a local authority, once the project is approved by the local authority it is to be treated as the housing project. We may also point out that the High Court had made observations in the context of Development Control Regulations (hereinafter referred to as ‘DCRs’ in short) under which the local authority sanctions the housing projects and noted that in these DCRs itself, an element of commercial activity is provided but the total project is still treated as housing project. On the basis of this discussion, after modifying some of the directions given by the ITAT, the conclusions which are arrived at by the High Court are as follows: –
“30. In the result, the questions raised in the appeal are answered thus: –
a) Up to 31-3-2005 (subject to fulfilling other conditions), deduction under section 80-IB(10) is allowable to housing projects approved by the local authority having residential units with commercial user to the extent permitted under DC Rules/ Regulations framed by the respective local authority.
b) In such a case, where the commercial user permitted by the local authority is within the limits prescribed under the DC Rules/Regulation, the deduction under Section 80-IB(10) up to 31-3-2005 would be allowable irrespective of the fact that the project is approved as ‘housing project’ or ‘residential plus commercial’.
c) In the absence of any provisions under the Income-tax Act, the Tribunal was not justified in holding that up to 31-3-2005 deduction under section 80-IB(10) would be allowable to the projects approved by the local authority having residential building with commercial user up to 10% of the total built-up area of the plot.
d) Since deductions under section 80-IB(10) is on the profits derived from the housing projects approved by the local authority as a whole, the Tribunal was not justified in restricting section 80-IB(10) deduction only to a part of the project. However, in the present case, since the assessee has accepted the decision of the Tribunal in allowing section 80-IB(10) deduction to a part of the project, we do not disturb the findings of the Tribunal in that behalf.
e) Clause (d) inserted to section 80-IB(10) with effect from 1-4-2005 is prospective and not retrospective and hence cannot be applied for the period prior to 1-4-2005.”
We are in agreement with the aforesaid answers given by the High Court to the various issues. We may only clarify that insofar as answer at para (a) is concerned, it would mean those projects which are approved by the local authorities as housing projects with commercial element therein.
There was much debate on the answer given in para (b) above. It was argued by Mr. Gurukrishna Kumar, learned senior counsel, that a project which is cleared as “residential plus commercial” project cannot be treated as housing project and therefore, this direction is contrary to the provisions of section 80(I)(B)(10) of the Act. However, reading the direction in its entirety and particularly the first sentence thereof, we find that commercial user which is permitted is in the residential units and that too, as per DCR. Examples given before us by the learned counsel for the assessee was that such commercial user to some extent is permitted to the professionals like Doctors, Chartered Accountants, Advocates, etc., in the DCRs itself.
Therefore, we clarify that direction (b) is to be read in that context where the project is predominantly housing/residential project but the commercial activity in the residential units is permitted. With the aforesaid clarification, we dispose of all these special leave petitions.(SLP No. 22450/2011, dated 30-4-2015)(AY. 2004-05 to 2005-06)
CIT v. Veena Developers (SC) www.itatonline.org
Editorial: Judgment of Bombay High Court in
CIT v. Brahma Associates (2011) 333 ITR 289 (Bom.)(HC) is approved.
S. 143(1A) : Assessment – Additional tax – As the object of S. 143(1A) is to prevent tax evasion, it can apply only to tax evaders and not to honest assessees. The burden of proving that the assessee stated a lesser amount in the return in an attempt to evade tax is on the revenue – Retrospective clarificatory amendment was held to be valid.
Section 143(1A)(a) was substituted with retrospective effect by the Finance Act of 1993 from 1-4-1989 to provide that even a reduction of loss on account of a prima facie adjustment would entail levy of additional tax. The retrospective amendment was enacted to supersede the judgments of the Delhi High Court in Modi Cement Limited v. Union of India, (1992) 193 ITR 91 and JK Synthetics Limited v. Asstt. Commissioner of Income-Tax, (1993) 2000 ITR 594, and the Allahabad High Court in Indo Gulf Fertilizers & Chemicals Corpn. Ltd. v. Union of India, (1992) 195 ITR 485 which held that losses were not within the contemplation of section 143(1A) prior to its amendment. The assessee challenged the retrospective amendment as being arbitrary and ultra vires. This was upheld by the Guwahati High Court. The High Court held that the retrospective effect given to the amendment would be arbitrary and unreasonable inasmuch as the provision, being a penal provision, would operate harshly on assessees who have made a loss instead of a profit, the difference between the loss showed in the return filed by the assessee and the loss assessed to income tax having to bear an additional income tax at the rate of 20%. On appeal by the department to the Supreme Court HELD reversing the High Court:
(i) The object of section 143(1A) is the prevention of evasion of tax. By the introduction of this provision, persons who have filed returns in which they have sought to evade the tax properly payable by them is meant to have a deterrent effect and a hefty amount of 20% as additional income tax is payable on the difference between what is declared in the return and what is assessed to tax;
(ii) The definition of “income” in section 2(24) of the Income-tax Act is an inclusive one. Further, it is settled law at least since 1975 that the word “income” would include within it both profits as well as losses. This is clear from Commissioner of Income Tax Central, Delhi v. Harprasad & Company Pvt. Ltd., (1975) 3 SCC 868;
(iii) Even on a reading of section 143 (1)(a) which is referred to in section 143 (1A), a loss is envisaged as being declared in a return made under section 139. It is clear, therefore, that the retrospective amendment made in 1993 would only be clarificatory of the position that existed in 1989 itself. All assessees were put on notice in 1989 itself that the expression “income” contained in section 143(1A) would be wide enough to include losses also.
(iv) The object of section 143(1A) is the prevention of tax evasion. Read literally, both honest assessees and tax evaders are caught within its net, an example being Commissioner of Income Tax, Bhopal v. Hindustan Electro Graphites, Indore, (2000) 3 SCC 595. We feel that since the provision has the deterrent effect of preventing tax evasion, it should be made to apply only to tax evaders. In support of this proposition, we refer to the judgment in K.P. Varghese v. ITO, (1982) 1 SCR 629. Taking a cue from K.P. Varghese v. ITO, (1982) 1 SCR 629, we therefore, hold that Section 143 (1A) can only be invoked where it is found on facts that the lesser amount stated in the return filed by the assessee is a result of an attempt to evade tax lawfully payable by the assessee. The burden of proving that the assessee has so attempted to evade tax is on the revenue which may be discharged by the revenue by establishing facts and circumstances from which a reasonable inference can be drawn that the assessee has, in fact, attempted to evade tax lawfully payable by it. Subject to the aforesaid construction of section 143(1A), we uphold the retrospective clarificatory amendment of the said Section and allow the appeals.(CA. No. 9133-9134 of 2003, dt. 24-3-2015) (AY. 1989-90, 1991-92)
CIT v. Sati Oil Udyog Ltd. (2015) 276 CTR 14 / 116 DTR 417(SC)