“Section 8(5)”
The decision most relied on for Section 8(5) is Shyam Sunder v. Ram Kumar, (2001) 8 SCC 24 (para 44); Brij Mohan Das Laxman Das v. CIT (5 SCC 482), cited in 261 judgments on BharatTax.
Leading authorities on Section 8(5)
For income to be assessable under the head 'Income from House Property' as per Section 22 of the Income Tax Act, 1961, beneficial ownership or the right to enjoy the property is sufficient; legal ownership is not a mandatory prerequisite.
Exemption provisions under Chapter III, such as Section 10B(8), must be interpreted strictly, and any claim for such exemptions must be made in the return of income. The principles governing Chapter III (incomes not forming part of total income) differ from those for Chapter VIA (deductions in computing total income).
An employer is not statutorily obligated to collect evidence from employees regarding the actual utilization of amounts paid towards leave travel concession or conveyance allowance, unless specific requirements are mandated by law or a CBDT circular.
Assessing Officers and appellate authorities must consider and grant correct deductions for fresh legal claims or revised computations made during assessment or appellate proceedings, subject to due verification.
The case establishes that in the modern virtual world, an entity's virtual presence, rather than just physical presence, is key to determining its operational extent, especially when equipment is placed at customer premises. This principle guides the characterization of payments to non-residents, often as royalty, attracting withholding tax under Section 195, considering statutory explanations for deemed accrual of income.
The 'use or right to use' of an asset, which is a condition for royalty income, is satisfied when possession and control are given to the hirer for their beneficial use, even if the owner retains ultimate ownership.
The levy of interest under the Income Tax Act is part of the assessment process and can be challenged in an appeal if the assessee disputes the chargeability of interest itself. However, claims for waiver or reduction of interest cannot be challenged in appeal and must be pursued through revisional jurisdiction.
The eligibility for deductions under sections 80-IB and 80-IA, and related issues like the initial assessment year, demerger, and resulting company status, are significant considerations in the context of company restructuring and tax benefits.
