Taxability of mesne profits: High Court's approach of dismissing the Dept's appeal only because the Tribunal relied on Narang Overseas 111 ITD 1 (Mum) (SB) and the appeal against which had been dismissed for non-removal of defects is not correct. The High Court ought to decide the question on merits
The 5-Member Special Bench in Narang Overseas vs. ACIT (ITAT Mumbai 5 Member Special Bench) (2008) 111 ITD 1 (Mum) (SB) laid down important principles of law regarding the taxability of mesne profits. The Special Bench overruled the 3-Member Special Bench in Sushil Kumar 88 ITD 35 (Kol) (SB).
The Department filed an appeal in the High Court against the order of the Special Bench. The High Court dismissed the appeal for non-removal of objections.
In Goodwill Theatres, the High Court dismissed the appeal of the Department on the ground that the Tribunal had merely followed Narang Overseas vs. ACIT.
On appeal by the Department to the Supreme Court HELD reversing the High Court:
|