Section 172 — the law in short
What the courts have decided on section 172, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
-
Union of India v Gosalia Shipping P Ltd
Supreme CourtHelps taxpayer
Our principal time-chartered a ship and loaded its own cargo at an Indian port. Is the hire paid to the shipowner taxable as an amount paid on account of carriage of goods?
No. The Supreme Court held that under a time charter the payment is for the use and hire of the ship, and is due whether or not the charterer carries anything at all, so it cannot be an amount paid on account of the carriage of goods within section 172(2). Nor did the charterers receive anything on that account, because they loaded their own cargo rather than sub-letting the ship or carrying a third party's goods. The character of the payment does not change with the use the charterer makes of the vessel or because it happened to load in India. The appeal was dismissed.
-
Sesa Goa Ltd v JCIT
High CourtHelps taxpayerOverruled
The Tribunal disallowed my education cess. Does s.40(a)(ii) actually cover cess?
The High Court said no — s.40(a)(ii) as enacted contains no reference to 'cess' and there is no scope to read one in, so education and secondary cess were deductible, and the claim could be entertained even though it was not made in the original return. The Supreme Court reversed that order.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.