SVKM’s Narsee Monjee Institute of Management Studies

Name of School – Kirit P. Mehta School of Law

Program: B.A., LL.B. (Hons.) 8101 & B.B.A., LL.B. (Hons.) 8102 Semester : VII
Module: Principles of Taxation I Module Code:
Teaching Scheme Evaluation Scheme
Lecture Practical Term End
Tutorial Internal Continuous
(Hours (Hours Examinations (TEE)
(Hours per Credit Assessment (ICA)
per per (Marks- 50
week) (Marks - 50)
week) week) in Question Paper)
4 0 0 4 Marks Scaled to 50 Marks Scaled to 50
Pre-requisite: Basic knowledge of accounts, Company Law and Constitution.
Objectives:
To understand
▪ How the taxation system of India has evolved.
▪ What are the taxes under the State List and Centre List.
▪ Understanding basic concepts of direct tax in India.
▪ How is an individual taxed in India- under various heads of income.
Outcomes:
▪ To identify the basic principles of taxation laws in India (PLO 1).
▪ To gain knowledge of basic income tax provisions (PLO 1).
▪ To critically analyse the cases and apply the provisions to compute
taxable income (PLO 2).
▪ To be equipped with knowledge of corporate taxation and international taxation (PLO 3).
Detailed Syllabus: ( per session plan )
Unit Description: Duration
(Hrs.)
1. Introduction to Taxation in India 3
● History of Tax Law in India
● Government Financial Policy and Tax Structure
● Nature and Characteristics of Tax
- Distinction between Direct Tax and Indirect Tax
- Tax and Fee
- Tax and cess
- Tax planning, Tax Evasion & Tax avoidance
● Legislative power to levy taxes:
- Constitutional Provisions
- Distribution of Legislative Powers between the Union and States
with particular reference to Taxing Powers
2. Basic concepts of Income-tax-I 3
● Income [Definition : S. 2(24) ]
● Capital Receipt v. Revenue Receipt -Tests to distinguish
● Legal Income v. Illegal Income Cases:
1. CIT v. Piara Singh
2. Dr. T A Qureshi v. CIT
3. Basic Concepts 2
● Assessee- Assessment year- Previous Year (S. 3)
● Person
● Total income of Assessee (Ss. 4 and 5)
4. Agricultural Income 3
● Exempt Income
 SVKM’s Narsee Monjee Institute of Management Studies
Name of School – Kirit P. Mehta School of Law
● What is agricultural income
Cases
● CIT v. Raja Benoy Kr. Sahas Roy
● CIT v. Saundarya Nursery
● K Lakshmannan v. CIT
● Bacha F. Guzdar v. CIT AIR (1955) SC 74 Basic
Reading:
[S. 2(1A), 10(1)] of ITA
5. Principle of Mutuality 3
● Concept
● Application to Income of Co-operative Societies
Cases
● Bangalore Club v. CIT
● CIT V. Chemlsford Club
● CIT v. Bankipore Sports Club
● Venkatesh Premises Co-op Society v. CIT
6. RESIDENTIAL STATUS- Individuals and HUFs 3
● Residential Status of Individuals
● ROR, RNOR, Deemed R, NR
● Incidence of tax varies with residential status of an assessee Cases:
1. CIT Vs Shaw Wallace & Co. 6ITC 178(PC)
2. Gopal Saran Narain Singh V. CIT [1953]3 ITR 237(PC)
3. CIT v. Varadarajan 224 ITR 9
7. RESIDENTIAL STATUS- Partnership Firms and Companies 3
● Control & Management
● Income deemed to accrue or arise in India (S. 9)
● Indian Income, foreign income
Cases:
1. CIT v. Deepak Family Trust
2. Union of India v. R.C. Jain
3. Raghuvanshi Mills Ltd. V. CIT
4. DIT V. Copal research Ltd. [2014] taxman 125
8. CLASS DISCUSSION : VODAFONE SAGA 2
9. Basic concepts of Income-tax- V 3
● Tax Planning
● Chargeable income: Basis of charge (Receipt, Accrual, and Arisal)
● Rate of income tax Cases
1. CIT v. Ashokbhai Chimanbhai
2. Kusumben Mahadevia v. CIT
3. CIT v. Ashok Jain
4. CIT v BC Srinivasa Setty AIR 1981 SC 972
5. CIT v Rajendra Prasad Moody (1978) 115 ITR 519 SC
10. Heads of income-Salaries 3
▪ What constitutes Salary
▪ House Rent Allowance
▪ Pension
 SVKM’s Narsee Monjee Institute of Management Studies
Name of School – Kirit P. Mehta School of Law
▪ Perquisites
▪ Tax Rates
▪ Standard Deductions/Deductions
▪ Slabs
▪ How to file IT Return: Form Saral
Cases
1. Gestetner Duplicators v. CIT
2. Vrajeshwari B. Parikh v. ITO
3. CIT v. Abdul Wahid & co.
4. Bajrang Prasad Ramdharani v. CIT
Basic Reading: Section 10 of ITA
11. Salary Continued : 2
● How to calculate Total Income
● How to file simple IT Return
12. Income from House Property 3
● Meaning of House Property
● Meaning of Owner and Co-owner/Deemed Owner
● Annual Value
● Deductions from Income from House Property Cases:
1. Ghansham Das v. Debi Prasad
2. ITO v. Dr. K.K Bhatnagar
3. S. Kartar Singh v. CIT
4. Estate of Ambalal Sarabhai v. CIT
5. CIT v. H.L. Gulati
13. Income from House Property- 2
• Computation of Property Income
14. Profits and gains of business or profession. 2
● Chargeability- Meaning of Business
● Corporate Taxation
● Deductions
● AMT/MAT
Cases:
1. Mazgaon Dock Ltd. V. CIT
2. CIT v. S.K Sahana & Sons Ltd.
3. CIT v. MinalRameshchandra
4. CIT v. City Mills Distributors
5. R.B Jodha Mal Kuthiala v. CIT
15. Capital gains 3
- Meaning of Capital Asset
- Cost of acquisition
- Indexed Cost
- Capital Gains exempt from Tax
- Extension of time-limit for acquiring new asset
- Short Term/Long term Capital Gains: Immovable Property & Shares
Cases:
1. Usha Vaid v. ITO
2. CIT v. Cello Plast
 SVKM’s Narsee Monjee Institute of Management Studies
Name of School – Kirit P. Mehta School of Law
3. Kapil Kr. Agarwal v. CIT
4. Arun Sunny v. CIT
Basic Reading: Section 54 of ITA
16. Capital Gains Contd: 2
Computation of Capital gains
17. Heads of income- Income from other sources 2
- Basis of charge
- Dividend
- Winnings from lotteries etc.
- Interest Income
Cases:
1. Morvi Mercantile Bank Ltd. V. CIT
2. KantilalManilal v. CIT
18. Taxation of Charitable Trusts /Section 8 Companies 2
- Assessment of Charitable Trusts
Cases:
1. Munjal Sales Corp. v. CIT
2. Income Tax v. Sheth Mafatlal Gagalbhai Foundation Trust
3. Patanjali Ayurveda v. DCIT
19. Taxation of HUF/PF/LLP 2
- Assessment of HUF
- Assessment of Partnership Firms
- Assessment of LLPs
Cases:
1. Mohanlal Shah HUF v. ITO
20. Business Restructuring 2
- Amalgamation
- Demerger
- Slump Sale
- Conversion of Firm/Pvt/ Ltd. Co. into an LLP
Cases:
1. CITv. Manjula Shah
2. ZuariInds Ltd. V. CIT
3. CIT v. Spunpipe & Construction co.
21. Income-tax Authorities and Appeal Structure 2
● Power and functions
● Search and Seizure (Ss.132, 132A, 132B)
● Settlement of grievances:
● Authorities, powers and functions
● Cases
1. D.I.T. vs. Diamondstar Exports Ltd.; (2007) 293 I.T.R. 438 SC
2. Rajesh Kumar. vs. Dy.CIT.; (2006) 157 Taxman 168 (SC)
3. ITO vs Seth Bros (1969) 74 ITR 836 SC
22. Miscellaneous- 3
● Set Off and Carry Forward of Losses
● Advance Payment of tax
● Clubbing of Income
 SVKM’s Narsee Monjee Institute of Management Studies
Name of School – Kirit P. Mehta School of Law
● Deductions under Chapter VIA (80C/80D/80E/80G/80U
● Income tax Returns and Self Assessment
23. Advance Rulings for Non-Residents 2
- Procedure for filing application
- Applicability of Advance Ruling
- Ruling to be void in certain cases
- Authority for Advance Rulings
Cases:
1. Lloyd Helicopters v. CIT Sin
Oceanic Shipping v. AAR Tiger Global
LLC Case
24. GAAR & Transfer Pricing 3
- Applicability of GAAR
- Procedure for invoking GAAR
- Taxation of international transaction
- Arms length price computation
- Advance Pricing Agreements
- Basic Concept of Transfer Pricing
Cases:
1. Diego India v. CIT
2. Development Consultants v. CIT
3. Vodafone India Services v. UOI
4. UCB India v. CIT
Total 60
Text Books:
1. T.N Manoharan, Direct tax Laws and International Taxation for AY 21-22, Snow white
Publication.
2. Dr. Vinod K. Singhania, Direct Taxes Law and Practice for AY 21-22, Taxmann
Publication.
Reference Books:
1. Kanga and Palkhiwala, The Law and Practice of Income Tax, Lexis Nexis, 2020 edition.
2. SampatIyengar’s Law of Income tax, Bharat Publication, 2017 edition.
Any other information: Latest and updated case laws to be incorporated while teaching.
Details of Internal Continuous Assessment (ICA): 50 Marks

Components Marks
Test 1 20 marks
Quiz 10 marks
Group Discussion 10 marks
Class Participation 10 marks

Devendra Vyas
Signature Signature
(Prepared by Mr. Devendra Vyas) (Approved by Dean Dr. Durgambini Patel)