Union of India v. Azadi Bachao Andolan

263 ITR 706Supreme Court of India2003#79 most cited

What is Union of India v. Azadi Bachao Andolan authority for?

A citizen is free to carry on business within the law, and mere tax planning without a motive to evade taxes through colorable devices is not frowned upon. The liability to taxation, for the purpose of tax treaty application, is a legal situation, not the fiscal fact of actual payment.

691

judgments rely on this decision, according to BharatTax’s citation analysis of 367,154 Indian tax judgments — from 2008 to 2026.

Also referred to as

Union of India v. Azadi Bachao Andolan · section 90 · treaty benefits · tax planning · colourable devices · liability to taxation · payment of tax · Article 4 · tax treaty

Also reported as

132 Taxmann.com 373

Sections most often in play

Section 143(3)Section 139(1)Section 90Section 234BSection 143(2)Section 143(1)Section 142(1)Section 148
Read the full judgment

Issues it is cited on

section 286(9)section 90(1)(b)principal purpose testsection 2(ma)multilateral instrumentsection 286azadi bachao andolansection 90(1)treaty benefitssection 295section 28(i)ppt

Judgments citing Union of India v. Azadi Bachao Andolan

ACIT, New Delhi vs. M/S. Shri Hari Investment, New Delhi

In the result appeal of the revenue for both the assessment years are dismissed

ITA 6062/DEL/2014[2010-11]Status: DisposedITAT Delhi02 Jan 2018AY 2010-11

Bench: Shri Amit Shukla & Shri Prashant Maharishi

For Appellant: NoneFor Respondent: Shri SS Rana, CIT DR
Section 10

…to the partners who are corporate entities is one and the same. 18. Reliance of the Assessing Officer on Me Dowell & Co. vs. CTO (supra) is of no relevance in view of the decision of the Supreme Court in Union of India vs. Azadi Bachao Andolan & Others (2003) 263 ITR 706 (SC), wherein the court held that an act, which is otherwise valid in law, cannot be treated as non-est, merely on the basis of some underlying motive supposedly resulting in some economic detriment or prejudice to the national interest as per perception of the revenue. When the principles laid down in this case are applied to the facts of the pr…

ACIT, New Delhi vs. M/S. Shri Hari Investment, New Delhi

In the result appeal of the revenue for both the assessment years are dismissed

ITA 6063/DEL/2014[2011-12]Status: DisposedITAT Delhi02 Jan 2018AY 2011-12

Bench: Shri Amit Shukla & Shri Prashant Maharishi

For Appellant: NoneFor Respondent: Shri SS Rana, CIT DR
Section 10

…to the partners who are corporate entities is one and the same. 18. Reliance of the Assessing Officer on Me Dowell & Co. vs. CTO (supra) is of no relevance in view of the decision of the Supreme Court in Union of India vs. Azadi Bachao Andolan & Others (2003) 263 ITR 706 (SC), wherein the court held that an act, which is otherwise valid in law, cannot be treated as non-est, merely on the basis of some underlying motive supposedly resulting in some economic detriment or prejudice to the national interest as per perception of the revenue. When the principles laid down in this case are applied to the facts of the pr…

Creation Publicity Pvt. Ltd., Mumbai vs. ITO Ward - 2(1)(2), Mumbai

In the result, all the three appeals of the assessee are dismissed

ITA 999/MUM/2017[2011-12]Status: DisposedITAT Mumbai30 Nov 2017AY 2011-12

Bench: Shri D.T. Garasia

For Appellant: Shri Hero Rai, A.RFor Respondent: Smt. N. Hemalatha, D.R

…ax, it is too well settled that an assessee is not bound to pay the maximum amount of tax and he can arrange his affairs in a manner so as to reduce his liability. If at all required, reliance in this regard is placed upon the decision of the Supreme Court in 263 ITR 706, UOI v Azadi Bachao Andolan. This argument made therefore, should not make any difference whatsoever. M/s. Creation Publicity Pvt. Ltd. In the light of the above, it is submitted that the claim of the assessee deserves acceptance.” 5. The Ld. D.R. orally argued as well as filed the written submissions which read as under: “At the outset it is st…

Creation Publicity Pvt. Ltd., Mumbai vs. ITO Ward - 2(1)(2), Mumbai

In the result, all the three appeals of the assessee are dismissed

ITA 998/MUM/2017[2010-11]Status: DisposedITAT Mumbai30 Nov 2017AY 2010-11

Bench: Shri D.T. Garasia

For Appellant: Shri Hero Rai, A.RFor Respondent: Smt. N. Hemalatha, D.R

…ax, it is too well settled that an assessee is not bound to pay the maximum amount of tax and he can arrange his affairs in a manner so as to reduce his liability. If at all required, reliance in this regard is placed upon the decision of the Supreme Court in 263 ITR 706, UOI v Azadi Bachao Andolan. This argument made therefore, should not make any difference whatsoever. M/s. Creation Publicity Pvt. Ltd. In the light of the above, it is submitted that the claim of the assessee deserves acceptance.” 5. The Ld. D.R. orally argued as well as filed the written submissions which read as under: “At the outset it is st…

Creation Publicity Pvt. Ltd., Mumbai vs. ITO Ward - 2(1)(2), Mumbai

In the result, all the three appeals of the assessee are dismissed

ITA 1000/MUM/2017[2011-12]Status: DisposedITAT Mumbai30 Nov 2017AY 2011-12

Bench: Shri D.T. Garasia

For Appellant: Shri Hero Rai, A.RFor Respondent: Smt. N. Hemalatha, D.R

…ax, it is too well settled that an assessee is not bound to pay the maximum amount of tax and he can arrange his affairs in a manner so as to reduce his liability. If at all required, reliance in this regard is placed upon the decision of the Supreme Court in 263 ITR 706, UOI v Azadi Bachao Andolan. This argument made therefore, should not make any difference whatsoever. M/s. Creation Publicity Pvt. Ltd. In the light of the above, it is submitted that the claim of the assessee deserves acceptance.” 5. The Ld. D.R. orally argued as well as filed the written submissions which read as under: “At the outset it is st…

Tata Industries Ltd, Mumbai vs. Asst CIT RG 2(3), Mumbai

The appeal of the assessee stands partly allowed

ITA 6750/MUM/2014[2007-08]Status: DisposedITAT Mumbai10 Nov 2017AY 2007-08
For Appellant: Shri Dinesh VyasFor Respondent: Shri Samuel Darse-CIT-DR
Section 10Section 143(3)Section 14ASection 254(1)

…that on 19/05/1995 the entity received Tax Residency Certificate (TRC) from the Mauritius incomes Department,that in June, 2006 an agreement was entered into between Apex and Birla group for transfer of shares of Idea. He relied upon the cases of Azadi Bacho(263 ITR 706), Serco BPO(P)Ltd.(379 ITR 256),JSH Mauritius(84taxmann.com.37)Saraswati Holding Corporation 6750&6440/M/14- Tata Industries Ltd. (111 TTJ 334)and Vodafone International (326 ITR 276) and referred to stupidity circular number 333, dated 02/04/1982,CBDT circular 682 dtd. 30/03/1994, CBDT circular 789, dated 30/04/2000, Press release dated 01/03/…

DCIT, New Delhi vs. M/S Dlf Ltd., New Delhi

In the result, the appeal of the assessee is partly allowed and the appeal of the Revenue is dismissed

ITA 4342/DEL/2012[2007-08]Status: DisposedITAT Delhi01 Nov 2017AY 2007-08

Bench: Shri B.P. Jain & Shri K.N. Chary.

For Appellant: Shri R.S. Singhvi, CAFor Respondent: Ms. Renu Amitabh, CIT-DR
Section 142Section 143(3)Section 14ASection 250Section 40

…IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘B’ BENCH, NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER AND SHRI K.N. CHARY, JUDICIAL MEMBER. ITA No. 3846/DEL/2012 [A.Y. 2007-08] DLF Limited Vs. The Additional C.I.T DLF Centre (9th Floor) Range - 10 Sansad Marg, New Delhi New Delhi PAN : AAACD 3494 N ITA No. 4342/DEL/2012 [A.Y. 2007-08] The Additional C.I.T Vs. DLF Limited DLF Centre (9th Floor) Range – 10 New Delhi Sansad Marg, New Delhi PAN : AAACD 3494 N [Appellant] [Respondent] Date of Hearing : 03.08.2017 Date of Pronouncement : 01.11.2017 Assessee by : Shri R.S. Singhvi, CA Revenue by : Ms. Re…

Dlf Ltd., New Delhi vs. Addl. CIT, New Delhi

In the result, the appeal of the assessee is partly allowed and the appeal of the Revenue is dismissed

ITA 3846/DEL/2012[2007-08]Status: DisposedITAT Delhi01 Nov 2017AY 2007-08

Bench: Shri B.P. Jain & Shri K.N. Chary.

For Appellant: Shri R.S. Singhvi, CAFor Respondent: Ms. Renu Amitabh, CIT-DR
Section 142Section 143(3)Section 14ASection 250Section 40

…IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘B’ BENCH, NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER AND SHRI K.N. CHARY, JUDICIAL MEMBER. ITA No. 3846/DEL/2012 [A.Y. 2007-08] DLF Limited Vs. The Additional C.I.T DLF Centre (9th Floor) Range - 10 Sansad Marg, New Delhi New Delhi PAN : AAACD 3494 N ITA No. 4342/DEL/2012 [A.Y. 2007-08] The Additional C.I.T Vs. DLF Limited DLF Centre (9th Floor) Range – 10 New Delhi Sansad Marg, New Delhi PAN : AAACD 3494 N [Appellant] [Respondent] Date of Hearing : 03.08.2017 Date of Pronouncement : 01.11.2017 Assessee by : Shri R.S. Singhvi, CA Revenue by : Ms. Re…

DDIT, New Delhi vs. M/S Shin Satellite Public Co. Ltd., New Delhi

ITA 3593/DEL/2011[2005-06]Status: DisposedITAT Delhi16 Oct 2017AY 2005-06

Bench: Shri H.S.Sidhu & Shri Prashant Maharishi

For Appellant: Shri F V Irani, AdvFor Respondent: Shri TS Shivkumar, CIT DR
Section 143(3)Section 144C(1)Section 234BSection 9Section 9(1)

…indefensible. 42. It takes little imagination to comprehend the extent and length of negotiations that take place when two nations decide to regulate the reach and application of their legitimate taxing powers. In Union of India v. Azadi Bachao Andolan [2003] 263 ITR 706 (SC), where the Indo-Mauritius Double Taxation Avoidance Convention was before the Supreme Court, the court said the following of the essential nature of these treaties (page 751) : "An important principle which needs to be kept in mind in the interpretation of the provisions of an international treaty, including one for double taxation relief is…

Trends Pharma, Mumbai vs. ITO 24(3)(4), Mumbai

In the result, appeal filed by the assessee for the assessment year 2010-

ITA 7132/MUM/2014[2010-11]Status: DisposedITAT Mumbai10 Aug 2017AY 2010-11

Bench: Shri B.R. Baskaran (Am) & Shri Ram Lal Negi (Jm) Assessment Year: 2010-2011 M/S Trends Pharma, The Income Tax Officer-24(3)(4), 6Th Floor, Matharu Arcade, C-11, Pratyakasha Kar Bhavan, Subhash Road, Vile Parle (E), Bandra Kurla Complex, Mumbai - 400057 Vs. Bandra (E), Mumbai Pan: Aaaft2250K (Appellant) (Respondent)

For Appellant: Shri Kirit S Sanghvi (AR)For Respondent: Shri Rajesh Kumar Yadav (DR)
Section 143(3)

…a commercial transaction. Hence, the impugned order is liable to be set aside. The Ld. counsel relied on the following decisions to substantiate his arguments:- i) CIT vs.Sekhsaria Sons Pvt. Ltd. 138 ITR 419,(Bom.) ii) Union of India vs. Azadi Bachao Andolan, 263 ITR 706, (SC), iii) Rapport Trading Ltd. vs. Dy. CIT, 98 Taxman, 278, (Ahd. Trib.) 4 Assessment Year: 2010-2011 6. On the other hand, the Ld. Departmental Representative (DR) relying on the concurrent findings of the authorities below submitted that the Ld. CIT (A) has passed the order on the basis of evidence on record and in accordance with the prin…

ITO, New Delhi vs. M/S Core Agencies Pvt. Ltd., New Delhi

The appeals of the Revenue are dismissed

ITA 1905/DEL/2011[1997-98]Status: DisposedITAT Delhi14 Jul 2017AY 1997-98

Bench: Shri I. C. Sudhir & Shri L. P. Sahui.T. Appeal Nos. 1590 & 1905/Del/2011 Assessment Years : 1996-97 & 1997-98. Income Tax Officer, M/S. Core Agencies Pvt. Ltd., Ward : 3 (4), Vs. 401–Padma Tower–Ii, New Delhi. 22, Rajendra Place, N E W D E L H I 110 008. Pan : Aaacc 2712 Q (Appellant) (Respondent)

For Appellant: Shri Satyen Sethi, AdvFor Respondent: Shri Anil Kumar Sharma, Sr. D.R
Section 143(1)Section 143(3)

…all and it will incur loss. • No tax has been avoided because no tax was payable. • Legal effect of transaction cannot be ignored. Transactions cannot be ignored on the basis of alleged motive. 22 Hon’ble Supreme Court in UOI v. Azadi Bachao Andolan (2005) 263 ITR 706, had occasion to consider the issue of act of incorporation of “shell companies" by Foreign Institutional Investors under the Mauritius Act as a “sham” and “a device” actuated by improper motives. Considering this issue from the prospective of device, the Hon’ble Apex Court having considered the entire law on this issue, observed at page 762 that…

ITO, New Delhi vs. M/S Core Agencies Pvt. Ltd., New Delhi

The appeals of the Revenue are dismissed

ITA 1590/DEL/2011[1996-97]Status: DisposedITAT Delhi14 Jul 2017AY 1996-97

Bench: Shri I. C. Sudhir & Shri L. P. Sahui.T. Appeal Nos. 1590 & 1905/Del/2011 Assessment Years : 1996-97 & 1997-98. Income Tax Officer, M/S. Core Agencies Pvt. Ltd., Ward : 3 (4), Vs. 401–Padma Tower–Ii, New Delhi. 22, Rajendra Place, N E W D E L H I 110 008. Pan : Aaacc 2712 Q (Appellant) (Respondent)

For Appellant: Shri Satyen Sethi, AdvFor Respondent: Shri Anil Kumar Sharma, Sr. D.R
Section 143(1)Section 143(3)

…all and it will incur loss. • No tax has been avoided because no tax was payable. • Legal effect of transaction cannot be ignored. Transactions cannot be ignored on the basis of alleged motive. 22 Hon’ble Supreme Court in UOI v. Azadi Bachao Andolan (2005) 263 ITR 706, had occasion to consider the issue of act of incorporation of “shell companies" by Foreign Institutional Investors under the Mauritius Act as a “sham” and “a device” actuated by improper motives. Considering this issue from the prospective of device, the Hon’ble Apex Court having considered the entire law on this issue, observed at page 762 that…

Lal Chand Meena, Jaipur vs. ITO, Ward 7-3, Jaipur

In the result, the appeal of the assessee is partly allowed

ITA 515/JPR/2015[2008-09]Status: DisposedITAT Jaipur27 Jun 2017AY 2008-09
For Appellant: Shri P.C. Parwal (CA)For Respondent: Shri Rajendra Singh (Addl.CIT)
Section 148Section 45(3)Section 50CSection 69C

…llegation of the AO is baseless and without any substance. The Supreme Court in McDowell’s case 154 ITR 148 relied by the AO has held that tax planning is legitimate provided that it is within the framework of law. Again the SC in case of Azadi Bachao Andolan 263 ITR 706 after considering the McDowell’s case held that one could not accept the ITA No. 515/JP/15 Lalchand Meena, vs. ITO, Ward 7(3), Jaipur submission that an act which is otherwise valid in law can be treated non est merely on the basis of some underlined motive supposedly resulting in some economic detriment or prejudice to the national interest. Aga…

DCIT Cent. Cir. - 13, Mumbai vs. M/S. Lotus Investments Ltd., Mumbai

In the result, the appeal of the assessee is partly allowed and that of

ITA 3612/MUM/2005[1998-1999]Status: DisposedITAT Mumbai30 May 2017AY 1998-1999

Bench: Shri P K Bansal, Vp & Shri Ravish Sood, Jm

For Appellant: Shri Stany SaldanhaFor Respondent: Shri Shri Pratap Singh (CIT –DR)
Section 250(4)

…TR 486 (Cal.) (c) Banyan and Berry V. CIT, 222 ITR 831 (Guj.) (d) Valbhappan (M.V.) V. I.T.O., 170 ITR 238 (Mad.) The AR also stated that the McDowell's case has also been explained and distinguished by the Supreme Court in the case of Azadi Bachao Aandolan.-263 ITR 706. It has therefore been contended that considering the totality of the facts and circumstances, the ratio of Supreme Court decision in McDowell's case (154 ITR 148) and other cases cited in the assessment order are not applicable to the present case. Taking into consideration the observations made by the AO, the facts brought out by appellant in…

DCIT (It) 3(2)(2), Mumbai vs. Msc Mediteranean Shipping Co. Sa, Mumbai

In the result, the appeal of the Revenue and the cross objection of the assessee are dismissed

ITA 539/MUM/2015[2011-12]Status: DisposedITAT Mumbai25 May 2017AY 2011-12

Bench: Shri R.C.Sharma, Am & Shri Sandeep Gosain, Jm Dcit(It)3(2)(2), Mumbai – Vs. M/S. Msc Mediterranean 400 038 Shipping Co. Sa C/O. Msc Agency India (India) Pvt. Ltd., Msc House, Andheri – Kurla Road, Andheri – East, Mumbai – 400 059 Pan/Gir No. Aaccm4945P Appellant) .. Respondent) Co No.137/Mum/2015 (Assessment Year :2011-12) M/S. Msc Vs. Dcit(It)3(2)(2), Mumbai – 400 Mediterranean Shipping 038 Co. Sa C/O. Msc Agency India (India) Pvt. Ltd., Msc House, Andheri – Kurla Road, Andheri – East, Mumbai – 400 059 Pan/Gir No. Aaccm4945P Appellant) .. Respondent) Revenue By Shri Narendra Kumar Assessee By Shri Nishant Thakkar

Section 144CSection 44B

…application of the said Article is explicitly clear. 34. It is pertinent to note here that the purpose of tax treaties is to allocate taxing jurisdiction as held, inter alia, by the Hon'ble Supreme Court in the case of Union of India vs. Azadi Bachao Aandolan 263 ITR 706 and only when an Article provides for tax treatment i.e. to distribute taxing right of a particular type of income, then it can be said that it deals with such item of income. If there is no article providing for such tax treatment to distribute jurisdiction to tax a particular income like the shipping profits the present case, then it cannot be…

M/S Stylish Construction Pvt. Ltd vs. DCIT, New Delhi

In the result, appeal of the assessee is partly allowed

ITA 2512/DEL/2013[2008-09]Status: DisposedITAT Delhi18 May 2017AY 2008-09

Bench: Shri H. S. Sidhu & Shri Prashant Maharishistylish Construction Pvt. Ltd, Dcit, 1027, Top Floor, Ward No. 8, Circle-9(1), Vs. Mehra Chowk, Mehrauli New Delhi Pan: Aaics4664H (Appellant) (Respondent)

For Appellant: Sh. Ashwani Kumar, CAFor Respondent: Sh. NK Bansal, Sr DR
Section 143(3)Section 14ASection 250Section 73

…ITR 1/ 204 Taxman 408 /71 taxmann.com 202 (SC) reported in wherein the ratio of the decision in the case of McDowell & Co. Ltd. (supra) came up for consideration in view of the later decision of the Apex Court in the case of UOI v. Azadi Bachao Andolan [2003] 263 ITR 706/ 132 Taxman 373. 11. On the other hand, learned counsel Shri Bandish Soparkar for the respondent assessee contended that this is not a case of colourable device. The assessee in its own wisdom desired to dispose of certain loss making shares. No provision of the Act or any other provision of law prohibits the assessee from disposing of such asset…

Asst CIT 16(3), Mumbai vs. Nishith M. Desai, Mumbai

In the result, appeals of the Revenue are dismissed and appeal of the assessee is partly allowed

ITA 4852/MUM/2015[2005-06]Status: DisposedITAT Mumbai28 Apr 2017AY 2005-06

Bench: Shri D.T. Garasia & Shri Manoj Kumar Aggarwal

For Appellant: Shri Firoze B. Andhyarujina, A.RFor Respondent: Shri N.P. Singh, D.R
Section 143(3)Section 147Section 24Section 57

…that a person cannot be taxed on the basis of inference or analogy without a provision in the statute applicable to the facts of his case. 9.20 The appellant has every right to plan his affairs to reduce the tax incidence. In the case of Azadi Bachao Andolan, 263 ITR 706 (SC), it has been held that every attempt at tax planning cannot be held to be legitimate advantages. In the case of Bunyan and Berry, 222 ITR 831 (Gujarat), while commenting on the decision in the case of McDowell & Co, 154 ITR 148 (SC), Hon'ble Gujarat High Court has observed as under: "The court (i.e. the Supreme Court in the case of McDowell…

ACIT 11(3), Mumbai vs. Nishith Desai, Mumbai

In the result, appeals of the Revenue are dismissed and appeal of the assessee is partly allowed

ITA 2562/MUM/2013[2009-10]Status: DisposedITAT Mumbai28 Apr 2017AY 2009-10

Bench: Shri D.T. Garasia & Shri Manoj Kumar Aggarwal

For Appellant: Shri Firoze B. Andhyarujina, A.RFor Respondent: Shri N.P. Singh, D.R
Section 143(3)Section 147Section 24Section 57

…that a person cannot be taxed on the basis of inference or analogy without a provision in the statute applicable to the facts of his case. 9.20 The appellant has every right to plan his affairs to reduce the tax incidence. In the case of Azadi Bachao Andolan, 263 ITR 706 (SC), it has been held that every attempt at tax planning cannot be held to be legitimate advantages. In the case of Bunyan and Berry, 222 ITR 831 (Gujarat), while commenting on the decision in the case of McDowell & Co, 154 ITR 148 (SC), Hon'ble Gujarat High Court has observed as under: "The court (i.e. the Supreme Court in the case of McDowell…

Nishith M. Desai, Mumbai vs. Addl CIT RG 11(3), Mumbai

In the result, appeals of the Revenue are dismissed and appeal of the assessee is partly allowed

ITA 2439/MUM/2013[2009-10]Status: DisposedITAT Mumbai28 Apr 2017AY 2009-10

Bench: Shri D.T. Garasia & Shri Manoj Kumar Aggarwal

For Appellant: Shri Firoze B. Andhyarujina, A.RFor Respondent: Shri N.P. Singh, D.R
Section 143(3)Section 147Section 24Section 57

…that a person cannot be taxed on the basis of inference or analogy without a provision in the statute applicable to the facts of his case. 9.20 The appellant has every right to plan his affairs to reduce the tax incidence. In the case of Azadi Bachao Andolan, 263 ITR 706 (SC), it has been held that every attempt at tax planning cannot be held to be legitimate advantages. In the case of Bunyan and Berry, 222 ITR 831 (Gujarat), while commenting on the decision in the case of McDowell & Co, 154 ITR 148 (SC), Hon'ble Gujarat High Court has observed as under: "The court (i.e. the Supreme Court in the case of McDowell…

ADIT, Dehradun vs. M/S. Hampson Russell Ltd Partnership, Mumbai

In the result, the appeal of the Revenue is allowed partly for statistical purposes

ITA 4976/DEL/2012[2009-10]Status: DisposedITAT Delhi21 Apr 2017AY 2009-10

Bench: Sh. H.S. Sidhu & Sh. O.P. Kant

Section 115ASection 44BSection 44DSection 9Section 9(1)(vi)

…eipt is not taxable as per the treaty provisions, it cannot be taxed under the provisions of the income tax Act, 1961. In support of his contention, he relied on the judgment of the Hon’ble Supreme Court in the case of Union of India Vs. Azadi Bachao Andolan, 263 ITR 706. 7. We have heard the rival submission and perused the relevant material on record. In both the appeals of the Revenue and the assessee the first issue which arises for our consideration is as follows: “Whether income from supply of software and software maintenance/ support services to entities engaged in exploration of mineral oil is squarely…