- The Chamber of Tax Consultants

.
THE CHAMBER OF TAX CONSULTANTS
3, Rewa Chambers, Ground Floor, 31, New Marine Lines, Mumbai - 400 020
Tel.: 2200 1787 / 2209 0423 Fax: 2200 2455 E-mail: office@ctconline.org
Visit us at: Website: http://www.ctconline.org
CA DINESH R SHAH
Study Group Meeting
Date: 9/04/2015
DIRECT TAXES JUDGEMENT.
CAPITAL GAIN.
1.
Sale of Shares held Under ESOP: Short termer Long term (?)
Kamlesh Baheddia V/s. Assistant CIT
(2015) 116DTR (Del) Tribunal 185 (52)
Sale of Shares held under ESOP Right in question is not a share held by the
assessee and hence the period of 12 months does not apply in this case. It is not
in dispute that the assessee has sold the shares on the date of exercising the
option itself. Hence the transaction of sale of share is a short term Capital gain.
2.
Non Resident Investment Income Short Term Capital Gains.
CIT V/s. Sham L. Chellaram
(2015) 116 DTR (Bombay H.C) 118 (49)
Income arising on sale of assets leading to Short term Capital Gains is not income
derived from foreign Exchange asset so as to qualify as Investment Income within
meaning of Se. 115E.
3.
Transfer Under Se.2 (47): (V) read with Se.53A of TPA
Asst CIT V/s. R. Srinivasan Rao.
(2015) 152 ITD 887 (6)
When developer has not performed or there is unwillingness to perform his part of
contract it can not be conducted that there is transfer of Capital asset in terms with
Se.2(47) (v) read with Section 53A of TPA Act 1882 merely because assessee has
1
entered in to a development agreement or even handed over possession of land to
developer during assessment year in question.,
4.
Stamp duty valuation V/s D.V.O Valuation
(2015) 372 ITR 83 (Calcutta High Court)
Capital Gains- Computation- Valuation by Department Valuation Officer. Scope of
Section 50C. Sale of land- Stamp duty assigning higher valuation to the handmatter to be referred to departmental valuation officer I.T Act 1961 Se.50C.
CHARITABLE TRUST.
5.
Charitable Trust : Registration Under S.12A. Effect of non passing of order within
the time limit of Six months.
CIT V/s. Muzafar Nagar Development Authority
(2015) 116 DTR (Allahbad H.C) (Full Bench) 33 (47)
Non- disposal of an application for Registration by granting or refusing registration,
before the expiry of six months as provided under S.12AA (2) would not result in a
deemed grant off registration.
6.
Charitable Trust: Cash Credit Se.68
IT (Exemption V/s Charanjiv Charitable Trust
ITROL Volume 4 Page 180
Identity of donors and their credit worthiness.
Established- Addition of donations under Section 68 not justified. I.T Act 1961.
7.
Charitable Purpose.
Indian Trade Promotion organization V/s Director.
General of Income tax(Exemption)
(2015) 371 ITR Page 333 (Delhi H.C)
Exemption u/s 10 (23C) Definition of Charitable Purpose in Section 2 (15)
amendment of Section 2 (15) by Finance Act 2008 Validity of amendment to be
read down. Primary and Dominant object of institution to advance General Public
utility- Income generated by commercial activities incidental Charitable Institution
entitled to exemption I.T Act 1961 Se.2 (15) & 10 (23C) (10) Interpretation of
Taxing Statutes interpretation upholding validity- Reading down of provisions
(Please read whole case laws]
2
8.
Registration of Trust. (2015) 38 ITR (Tribunal) 195 Hydrabad.
IP India Foundation V/s Director of IT (Exemption)
Registration of Trusts- Assessee’s primary purpose advancement of objects of
general public utility. Remains Charitable even if activity incidental or ancillary to
main purpose profitable in nature. Denial of registration not justified Se.12AA.
9.
Registration
Andhra Pradesh Pollution Centrol Board V/s DIT (Exemptions)
(2015) 38 ITR Tribunal 539 Hydrabad.
Assessee filing application for registration on last day of previous year. Entitled
to exemption from assessment year to which previous year relates I.T Act 1961
SS11,12, 12A(1) 12AA.
TDS, T.CS. PROVIISION.
10.
TDS Salary vis- a vis Professional fees
CIT V/s. Grant Medical Foundations.
(2015) 116 DTR (Bombay H.C) 45 (47)
Doctors were not entitled to provident Fund. Retirement benefit, etc., and they
were free to carry on their private practice but beyond the hospital timings
contract as a whole showed that there was no employer- employee relationship
between the assessee and doctors tax was rightly deducted under Section194J.
11.
Credit of tax under Se.115JA vis-à-vis cess and surcharge.
CIT V/s Vacment India
(2015)
116 DTR (Allahbad H.C) 62 (47)
For the A.Y. 2011-12 as per ITR 6 (Part B-TTI) tax payable under entry 5 is to be
arrived at by deducting the credit under Section 115JAA (Under entry 5 is to be
arrived at by deducting the credit under s. 115JAA (Under entry 3) from the gross
tax payable (Under entry 4) surcharge is computed on the amount reflected in
entry 5.
12.
TDS/ TCS Foreign Taxation.
Hill Wood Furniture (P) Ltd V/s ITO
Whether TCS Provision (206C) is applicable to sale of Imported Timber (?)
(2015) 116 DTR (Kerala H.C) 257 (55) Se. 206 C.
3
The Sale of Imported Timber will be covered under the provision of Se.206C
as section specified timber obtained by any mode other than under a forest lease
as envisaged under the relevant provisions of law.
13.
Prepayment discount.
Dy CIT V/s Food & Fragrances
(2015) 152 ITD 880
Prepayment discount given by assessee to foreign buyers in absence of any
mention in purchase contract that assessee was obliged to give said discount, was
in nature of interest and tax was deductible at source under Section 195.
14
Payment made to casual Laborers through senior work man was not liable to TDS
under Section 194 C.
ITO Ward 6 (2) Jaipur V/s. Tulsi Ram Modi
(2015) 67 SOT 313 Jaipur.
In terms of main contract with principal company, assessee was barred from hiring
any sub- contractor whether assessee was not liable to TDS Held YES.
15.
Which Section override Se.90 (2) or Section 206AA of IT Act (?)
Dy Director of IT Tax (IT-11) Pune V/s Serum Institute of India Ltd. ITA No 792/
DN/ 2013 A.Y. 2011-12. Date of Order 30/3/2015.
Where the tax has been deducted on the strength of the beneficial provisions of
Se. DTAA’s (Se.90(2)] the provisions of Section 206AA of the Act cannot be
invoked by the Assessing Officer to insist on the tax deduction @ 20% having
regard to the overriding nature of the provisions of section 90 (2) of the Act. The
CIT (A) in our view correctly inferred that Se. 206AA of the Act does not override
the provisions of Se.90 (2) of the Act and that in the impugned cases of payments
made to non-residents, assessee correctly applied the rate of tax prescribed under
the DTAA and not as per Section 206AA of the Act because the provisions of the
DTAAS was more beneficial.
16.
Payment to non-executive directors.
Dy CIT V/s. Zee Entertainment Enterprises Ltd.
(2015) 38 ITR Tribunal (Mumbai Tribunal) 636
4
Salary- Payment to non executive directors- No employer- employee relationshipNo pecuniary benefits payment not salary- Income tax Act 1961 . Se. 194J.
BUSINESS INCOME
17.
Manufacture or production:- Se. 10B A.Y. 2007 – 08. a.Y. 2008-09
CIT V/s AAR ESS EXIM (P) Ltd.
(2015) 116 DTR (Del.HC) 145 (51)
Assessee’s activities of preparation of Engineering drawings. Inspection . In house
fabrication assessembling etc. of goods and final Export from India and erection at
the site abroad amounted to manufacture or production entitled to exemption under
Section 10B.
18.
Late filing fees payable for forms to the Registrar of Company for .Whether
Penalty disallowable under Se.37 of I.T Act (?)
CIT V/.s. Vacment India (2015) 116 DTR (All) 62 (47)
In the absence of a finding by the authorities below as to have the impugned
payment of fee by the assessee to Registrar of companies for the late filing of
certain forms is in the nature of penalty for breach or infraction of law or any
public policy- Explanation on to Se.37 (1) is not attracted and therefore the said
payment can not be disallowed.
19.
Foreign Currency hedging: Whether speculative Loss (?)
Jaimin Jewellery Exports (P) ltd V/s Asst. CIT
(2015) 116 DTR (Mumbai Tribunal) Page 41 (47)
Assessee engaged in business of importing rough
diamonds and exporting
polished diamonds entering into forward contract in foreign exchange for the
purpose of hedging the anticipated loss on account of foreign exchange rate
fluctuation loss resulting from such hedging transaction is not speculative loss but
business loss eligible for set off.
20.
Motor Car Commercial Vehicles.
GERA Developers (P) Ltd V/s Joint CIT.
(2015) 116 DTR (Pune Tribunal) 290 (45)
5
Motor Car is a light Mortor Car Vehicle cover within the meaning of Commercial
Vehicles as defined in Appendix 1 to ITO Rules and therefore, it is eligible for
depreciation at enhanced rate of 50 percent as per CBDT Notification No 10/2009
dated 19th January 2009.
21. Commission Expenses not allowable (Se.37)
Premier Breweries Ltd V/s. CIT (2015) 372 ITR 180 (SC)
Assessee Manufacturers of Alcoholic Beverages, Government Corporations
exclusively marketing alcoholic Beverages in State Commission paid by assessee to
agents to obtain supply orders from Government Corporations not deductible.
22. Accounting:- Rejection of Accounts:CIT V/s Inter Continental Constructions:(2015) 372 ITR 141 ( T & AP)
Rejection of Accounts. Normal deductions allowable denial of deduction of Salaries
to partners and Interest on financial charges not justified IT Act 1961. Se. 145.
23. Estimate of Profit.
CIT V/s. Y. Ramachandra Reddy
(2015) 372 ITR 77 ( T & AP)
Estimate of Profits –depreciation and interest Assessee entitled to depreciation and
interest on such amount I.T Act 1961.
24. 14A disallowance. No claim for Exemption:CIT V/s Corrtech Engineering (P) Ltd.
(2015) 372 ITR 97 (Gujarat H.C)
Income Computation of Income- Disallowance of Expenditure relating to non-taxable
Income. No claim for exemption Expenditure relating to such amount cannot be
disallowed I.T Act 1961 Se.14A.
25. Accounting- Rejection .
CIT v/s Gupta K.N. Construction Co
(2015) 371 ITR 325 (Rajsthan H.C) (4)
Accounting Rejection of Accounts- Estimate of Income.
Estimate should be based on past History and comparable cases. No evidence to
justify additions, Addition not justified. I.T Act 1961 Se.145 of I.T Act 1961.
6
26.. Retention money in contract work when taxable (?)
CIT V/s Shankar Construction.
(2015) 371 ITR Page No 320 (T & AP High Court)
Accrual of Income- Mercantile System of Accounting.
Civil Construction- sums retained for payment after expiry of defect free periodRight to receive amount contingent upon there being no defects- Accrual only on
receipt of amount after defect free period I.T Act 1961.
27. Income from Undisclosed Sources:
CIT V/s Ram Steel Industries.
(2015) 371 ITR 373 (Punjab & Hariyana H.C)
Accounting- Rejection of accounts- Estimate of Income.
Estimate can not be based solely on consumption of Electricity Commissioner
(Appeals) and Tribunal taking other factors also into consideration and reducing
additions to Income Justified.
28. Prior Period Expenses,.
Ushodaya Enterprises Ltd. V/s. Dy. CIT
(2015) 38 ITR Tribunal Page 148 Hydrabad Tribunal
Prior period Expenses to be allowed as deduction I.T Act 1961.
29. Business Loss: V/s. Bad debt.
Hindustan Times Ltd. V/s. Dy. CIT
(2015) 38 ITR (Tribunal Delhi) 165
Bad Debt- Amounts advances to for purchase of Capital assets cannot be allowed as
Bad debts or business Loss I.T Act 1961.
30. Business Expenditures Disallowance Payment in Cash exceeding specified limit.
Hi Tech Land Developers and Builders V/s.
Addl. CIT (2015) 38 ITR Tribunal 355 Chandigarh.
Assessee making payment for purchase of land on Sunday Exceptional
Circumstances Covered under rule 6Dd (j) Disallowance not proper- IT Act 1961 Se.
40A (3).
31
Cash Credits:
Pushpak Auto Centre V/s ITO
7
(2015) 38 ITR Tribunal (Delhi) 447
Assessee dealing in resale of Petroleum products- Creditors mainly agriculturists
depositing cash to ensure regular supply of diesel- Deposits genuine Addition not
justified I.T Act 1961.
32
Expenditure for Increasing Share Capital. (Revenue V/s Capital)
Navi Mumbai Sez (P) Ltd V/s Asst. CIT 7 (1) Mumbai
Se.37 (1), (Share Capital Expenses to Increase) A.Y. 2008-09. Whether Where
assessee incurred certain expenditure for increase in Share capital, in view of fact
that entire Incremental share Capital was used for purchase of trading stock
expenditure in question was to be allowed as revenue expenditure Held YES.
33.
Cash Credit Bank Account.
Dineshbhai Dhansukhlal Mithaiwala
(2015) 152 ITD 874
Where aggregate Credits in undisclosed bank Account of assessee were
considered as cash sales, entire sales could not be considered as Income but only
profit embedded in it could be considered as Income of assessee.
34.
Bogus Purchases:
Ramesh Kumar & Co V/s The ACIT 21 (1)
ITA No 2959/ Mum/2014 date of order 28/11/2014.
D. Bench of Income tax Appellate Tribunal Mumbai
A.Y. 2010-11
The A.O made an addition of Rs.4,98,80,892/- under Section 69C on Account of
Alleged Bogus Purchases. The Assessee was contractor. The Assessee has
shown G.P 14.2% and Net Profit at 9.72%.
The Purchases supported by Bills, Payment made by payees A/c cheques. There
was no evidence that the assessee received back money. The additions were
deleted.
35.
Bogus Purchases.
The Income tax Officer 25 (3) 92) V/s Shri Deepak Popatlal Gala.
ITA No 5920/M/.2013. A.Y. 20910-11 & ITA No 6203/M/2013 Shri Deepak
Popatlal Gala V/s ITO 25 (3) (2).
8
Date of Order 27/3/2015.
(b) Alleged Bogus Purchases u/s 69C Rs.38.69 lakhs.
By following (1) Ramesh Kumar & Co. (II) DCIT V/s. Shri Rajeev G. kalathil in
ITA 6727/M/2012 20/8/2014.
(c) Shri Ganpatraj A. Sanghvi V/s. ACIT in ITA No 2826/M/2013 dated 5/11/2014
(d) CIT V/s M.K. Brothers 163 ITR 249 & ITO V/s Premanand (2008) 25 SOT 11
Jodhpur.
The Assessee was not given cross examination opportunity
Ponkunnam Trader 83 ITR 508, 102 ITR 366. The addition made u/s 69C
deleted.
ASSESSMENT – REASSESSMENT APPEALS.
36.
Re assessment Limitation Under Se.149
Lalchand Agarwal V/s CIT
(2015) 116 DTR (Allahbad H.C) 65 (48) A.Y. 1998-99.
Fresh notice issued after the limitation period is invalid and it could not be taken as
valid one and in continuation of earlier notice issued within limitation period but
received back unnerved assessment order passed by the A.O under Section 147 is
quashed.
37.
Set off of Capital Gain against Exempt Capital Losses u/s 10 (38) of I.T Act
Kishorebhai Bhikabhai Virani V/s. Assistant CIT
(2015) 116 DTR (Gujrat H.C) 284 (55)
Se.10 (38) 70 (3) & 74
Capital Loss arising from Sale of Shares eligible for exemption under Se.10 (38)
can not be set off against Capital gain in terms of Se.70 (3)
38.
Rectification of Mistake: Se. 10B 143 (1) 154
International Components India Ltd. V/s. Asst. CIT
(2015) 372 ITR 190 Madras High Court.
Rectification of mistakes , mistake apparent from Record grant of deduction of
Interest under Se.10B a mistake apparent from record.
Intimation under
Section143 (1) can be rectified in rectification proceedings- IT Act 1961.
39.
Industrial Undertaking: Special deduction.
9
CIT V/s Tejpal Singh Kohli
(2015) 371 ITR 11 Delhi High Court (1)
LCD Monitors description of information and communication Technology devicesA.O without rejecting the accuracy of books of Account or inspecting wages paid.
Electricity Bill generated nature of plant and machinery rejecting assessee’s claim
to deduction rejection of claim merely on doubts and surmises assessee entitled to
deduction, IT Act 1961 Se.,801C.
40..
When No Cross Appeal File before ITAT
Self knitting works V/s CIT
(2015) 116 DTR (P & H) 319 (56)
Where the respondent is aggrieved against any disallowances or addition
sustained by the CIT (A) which is not under challenge at the behest of the
appellant rule 27 cannot be invoked.
41
Mistake Apparent vis-a vis non consideration or improper consideration of issue:Bharat Biotech International Ltd. V/s Dy. CIT
(2015) 116 DTR (Hydrabad Tribunal) 313 (56)
Tribunal in Revenue’s appeal. While rejecting the claim of assessee under Section
35 (a) having failed to consider the applicability of Se. 35 (3) even though not
raised in appeal or cross objection by assessee there was a mistake apparent
rectifiable under Se.254 (2)
42.
Power of High Court.
Premier Breweries Ltd V/s CIT Section 256 of I.T Act 1961
(2015) 116 DTR (SC) 233 (54)
Reference – Power of High court setting aside of Tribunal order High Court has no
power to set aside the order of the Tribunal in exercise of reference jurisdiction
Sarathy Mudaliar V/s CIT (1966) 62 ITR 576 (SC) followed.
43.
Interest under Se.244A:CIT V/s Engineers India Ltd.
(2015) 116 DTR (Del) 242 (54)
Assessee is not entitled to Interest Under Se.244A
10
In respect of refund of excess Self-assessment tax paid.
44.
Delay in filing Appeal: Condonation .
KGN MMVO Education research & Analysis Society V/s. ITO
(2015) 116 DTR (JP) Tribunal 273 (54)
Assessee Society having only filed a vague and general affidavit of its chartered
Account admitting his lapse in filing the Instant appeals in time which uterly lacks
any specific contentions and fails to explain day to day delay in a reasonable
manner it can not be accepted that there sufficient case for the delay of 347 days
in filing the appeals and therefore, the delay in filing these appeals is not
condoned.
45
Appeal- Tribunal Power.
CIT V/s Shah Ravindra Derogarh.
(2015) 116 DTR (Gujrat H.C) 210 (52)
Order of Tribunal accepting rectification application under Section 254 (2) in an
appeal against rejecting application under Section119 (2) (b) (i.e. application for
condonation of delay in filing return being non appealable] for condonation of delay
in filing return though without jurisdiction not interfered with in writ jurisdiction.
(Note Tribunal directed not to entertain rectification application in such matter in
future.
46.
Kamlesh Bahedia V/s. Asst. CIT
(2015) 116 DTR (Delhi Tribunal 185 (52)
CIT (A) was wrong in dismissing appeal against ordr under Section 154 on the
ground that the order stood merger with the order under Section 147.
47.
Appeal to Appellate Tribunal” precedent
CIT V/s. Janapriya Engineers Syndicate.
(2015) 371 ITR 439 (T & AP) (4)
Order of Special Bench binding- that appeal there from pending before High CourtNot a ground to direct A.O to re decide issue after disposal of appeal by High Court
Tribunal either to follow or not to follow special Bench.
Tribunal to decide matter a fresh.
11
Ref: Merilyn Shipping and transport V/s Addln. CIT
(2012) 16 ITR Tribunal 1 (Visakhapatnam) S.B.
48.
P.A Chacho Muthalaly V/s. Assistant CIT
(2015) 116 DTR (Mumbai Tribunal) 301 (55)
If the notice u/s 143 (2) is sent through post and delivered within the statutory
time limit at the correct address, it is a proper service. In such case it is not open
to the assessee to say that the said post was received by some other person.
49.
Appeal (High court Condonation of delay:Somerset Place Co.operative H.S. Ltd. V/s ITO
(2014) 116 DTR (Bombay H.C) 345 (57)
Assessee having initially taken a well considered decision not to pursue further
proceedings against the adverse order of the Tribunal, decision rendered by the
High Court in favour of the assessee on the same issue in a later assessment
year can not be said to be sufficient cause for condoning the delay of five years in
filing appeal before the court.
50.
Assessment : Claim before CIT (A)
Himson International (P) Ltd V/s Dy CIT
(2015) 38 ITR (Tribunal) Ahmedabad 218
Appeal to CIT (A) Disallowances made by A.O resulting in positive Income Denial
opportunity to claim exemption. Under Section 10A claim made for first time before
CIT (A). Duty of A.O to grant exemption statutory allowable to assessee.
PENALTY.
51.
Penalty under Section 271D: Contravention of Se.269SS
CIT V/s. Muthoot Financiers.
(2015) 371 ITR 408 Delhi H.C) or (2015) 116 DTR Delhi H.C 292 (59)
Section 269SS would not be voilative when money is exchanged interse between
the partners and partnership firm further, transaction was bonafide and not aimed
to avoid any tax liability and therefore S.273B would be applicable.
52.
Penalty under Se.271B of I.T Act 1961 (Se.44AB, 271B & 273B) is Esquire Fin
mark (P) Ltd. V/.s Assistant CIT
12
(2015) 116 DTR (Mumbai Tribunal) 176 (51)
Assessee builders belief that advances received by it from customers would not
form Part of “ Gross turnover” for purposes of filing Audit Report under Se.44AB is
bonafide constituting reasonable cause for the failure hence by application of
Se.273B Penalty under Se.271B is not leviable.
53.
Penalty under Se./ 271 (1) ( c)
Mula Pravara Electric Co.operative S.Ltd. V/s Dy CIT
(2015) 116 DTR (Pune) Tribunal 91 (49)
Assessee having declared the benefit accruing to its vide Government Resolution
dt. 21/5/99 reducing assessee’s liability towards purchase price of Electricity
payable to MSEB by filing revised return for A.Y. 1995-96 to 1999-2000 and partly
in the original return for A.Y. 2000-01 without considering the applicability of Se.
41 (1) under bonafide belief that the benefit has to be spread over the entire period
covered by the said GR the said GR the said explanation can not be treated as
false or non-genuine within the meaning of explanation1 (A) or 1 (B) to Se. 271 (1)
( c) as the assessee had placed all the relevant facts on record and therefore
penalty under Se. 271 (1) ( c ) is not leviable on the assessee simply because The
Tribunal has sustained the addition 1 made by the A.O by invoking Se. 41 (1) in
the relevant assessment year 2001-03.
54
Penalty under Se. 271 (1) ( c)
S.S. Foods Industries V/s. Asst. CIT
(2015) 110 DTR (Chd.Tribunal) 35 (47)
Assessee having made claim for deduction under Se.801C.
In respect of Export Incentives and Interest Income in the wake of conflicting
decisions of two high courts on this issue and the Supreme Court having decided
the issue against the assessee only a few days before the filing of return by the
assessee. Which probably went unnoticed, be said that the claim of deduction was
debatable at the time of the return and, therefore, penalty under Section 271 (1) (
c) is not leviable more so as the assessee had disclosed all the particulars of
Income and claimed deduction under bonafide belief on the basis of advice of a
Chartered Accountant.
13
55.
Penalty: Loan or deposit in cash exceeding prescribed limit:
CIT V/s Muthoot Financiers.
(2015) 371 ITR 408 (Delhi H.C)
Firm- Payments from Partners in Cash- firm and Partners are not different entities
penalty can not be imposed under Section 271 D of I.T Act 1961.
56.
Penalty Under Se.271 (1) ( c) of I.T Act 1961
Amrut Tube Well Company V/s Asst. CIT
(2015) 115 DTR (Gujarat H.C) PageNo.1 (320
Addition to Income by AO can not impose penalty in case of an assessee
mechanically, merely on ground of addition of certain amount over and above the
amount already declared by the assessee.
57.
Penalty under Section 271 (1) ( c) :
Inadmissible deduction.
Mitsuba Systems (India) (P) ltd. V/s Dy CIT
(2015) 115 DTR (Mumbai Tribunal) Page 145 (36)
Assessee having consciously claimed deduction of Interest paid under Section
234A, 234B & 234C business expenditure. It is clearly a misrepresentation and not
a mistake and therefore it is liable for penalty u./s 271 (1) ( c) in respect of the said
claim.
58.
Acceptance of loan or deposit otherwise than by account payee cheque.
Asst. CIT V/s Vardaan Fashion (2015) 38 (ITR Tribunal) 247
Acceptance of cash by husband from his wife cannot be treated as loan or
advance in strict sense order canceling penalty levied under Section 271D justified.
OTHERS.
59.
Settlement Commission.
CIT V/s. Income Tax Settlement Commissions.
(2015) 116 DTR (Bombay H.C) 301 (59)
Settlement Commission acted without jurisdiction in allowing the settlement
application to be proceeded with and postponding the examination of validity of
application to a later date.
14
60.
Reference to D.V.O by CIT (A) u/s 250 (4) whether valid
Rallis India Ltd. V/s. CIT (A) & Others.
(2015) 116 DTR (Bombay) High Court (53)
CIT (A) during the appellate proceedings before him can exercise powers under
Se.55A and can make enquiry in term of Se.250(4) either himself or direct the A.O
to do so and report in terms of Se.250 (4) impugned notices to the DV O not having
been issued under Se.55A according to the Revenue, are quashed and set aside
however, The CIT (A) is at liberty to exercise powers under Se.250 (4) read with
Section 55A, if he is of the opinion that the conditions for its invocation are satisfied
after the assessee on the above aspect.
61.
Waiver of Interest under Section 234A & 234B
Deliza Residency V/s. Chief CIT
(2015) 116 DTR (Kerala H.C) 180 (51)
When the additions to the Income disclosed by the assessee in its returns have
been sustained to a particular extent by the appellant forum (authorities) then the
finality of the assessment Indicates that the amount sustained against the
assessee is the Income on which he ought to have paid tax at the very outset
waiver or reduction of interest under Section 234A & 234B was rightly declined.
62.
Income from other Sources: Family Settlement.
Dy CIT V/s Paras D. Gundecha.
(2015) 116 DTR (Mumbai Tribunal) 281 (55)
Property received by the assessee out of family settlement cannot be treated as
Income as it is off shoot of the capital assets of the Joint family; further, property
which was already in existence where in assessee was having a right share and
therefore, the same can not be treated as Income under Section 56 (2) (v) in the
hands of the assessee.
63
Deemed Dividend.
Dy CIT V/s. N. Rjagopal
(2015) 152 ITD 884
Where assessee a shareholder and director of a company collected certain amount
from customers of company in ordinary course of business and kept in his saving
15
Account which was finally remitted to company within a gap of short period same
could not be added to assessee’s taxable Income as deemed dividend.
64.
Disallowance u/s 14A: Where no exempt Income earned(?)
Asst CIT V/.s. M. Baskaran
(2015) 152 ITD 844 (A.Y. 2009- 10)
Disallowance cannot be made under Section 14A where assessee had not
earned/ received any exempt Income during relevant year.
65
Share Application Money.
ITO V/s. Anmol Marmo Granti (P) Ltd.
(2015) 67 SOT 480 (6)
Where Share Application money received by assessee company from another
company was through proper banking channel, addition made on account of
unexplained share application money unjustified.
66.
Share Application Money and Section 68
Bisakka Sales (P) Ltd. V/s CIT - (2015) 152 ITD 750 (5)
Where assessee- Company received share Application money with huge and
unjustified share premium from corporate entities merely because said amount was
received through banking channel.
A.O was not justified in accepting and
translator. A.O was not justified in accepting said transactions as genuine without
making proper enquires
67.
Penalty Under Section 271 (1) ( c)
CIT V/s. S.M. Construction (Bombay H.C)
[Source ITAT on line.org]
Penalty does not apply if claim of assessee is bonfide and not in defiance of the
law.
The fact that the explanation of assessee is not accepted in quantum proceedings
would not IPSO Facto visit the assessee with penalty in he absence of the claim
being not to be bonafide the fact a letter accompanied the return of Income where
in all facts relating impugned receipt was indicated including the fact that an
amount of Rs.54 lakhs originally paid.
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68.
Capital or Revenue Expenses (?)
Binani Cement Ltd V/s CIT (Calcutta) High court.
ITA No 265 of 2009 dated 23/3/2015.
Expenditure on aborted Capital project is revenue Expenditure claimed as
deduction in the year of abandoning the project. [Source ITAT on line.org]
69.
Penalty Under Se. 271D & 271 E.
Chemfort Traders (Bombay) Pvt. Ltd. V/s. ACIT (Mumbai)
(Tribunal Source ITAT on line.org)
Loan taken and repaid from Sales man’s relative who was residing at village
having no Bank A/c. There is reasonable cause.
No Penalty if violation of Se.269ss/ 269T is deemed bonafide.
70.
Appeal Whether Monetary limits applicable to pending matter (?)
ITO V/s Garudayal Santosh Kumar
(2015) 38 ITR Tribunal 735 (Kolkata)
Monetary limits for appeals by Department CBDT Instruction applicable to pending
appeals also I.T Act 1961. S. 268A.
71.
Bad Debts.
Devendra Exports (P) Ltd. V/s Asst. CIT
(2015) 38 ITR Tribunal 744 Chennai
Simple write of in books of account sufficient for claiming Bad debts, Debt need not
be proved as Bad I.T Act 1961.
72.
Mining Lease: Capital or Revenue Exp. (?)
Dy CIT V/s Rangta Mines Ltd.
(2015) 38 ITR Tribunal 754 (Kolkata)
Capital or Revenue Expenditure. Payments for mining Lease Revenue Expenditure
I.T Act 1961.
Bikaner Gypsums Ltd. V/s CIT (1991) 187 ITR 39 (SC) applied.
73.
Non Resident Shipping Income of Switzerland Company.
MSC Mediterranean Shipping Co. S.A V/s. Dy. CIT (IT) (2015) 38 ITR Tribunal
758 Mumbai.
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Non Resident Shipping Income from International Shipping Taxability in India. No
article in DTAA Agreement between India and Switzer-land dealing with profits
from shipping- assessee covered by residuary article 22 allocating taxing rights to
country of Residence- Assessee’s Shipping Income not taxable in India.
74.
Cash Credit u/s 68.
CIT V/s. Chandela Trading Co. (P) Ltd.
(2015) 372 ITR 232 (Cal)
Failure by creditors to participate in inquiry and furnish accounts. Does not
mean that creditors lacked identity.
No material to show that amounts
advanced by creditors in reality represented money belonging to assesseesums cannot be treated as cash credits.
CIT V/s. . Daulat Ram Rawatmall (1973) 87 ITR 349 (SC)
CIT V/s. Jauharimal Goel (2008) 296 ITR 263 (All)
75.
Income General Principles:- Avoidance of tax- Business.
Non compete clause:CIT V/s Shvraj Gupta. (2015) 372 ITR 337
Business Income. Scope
of Section 28 (ii) Sale of entire business-Two
agreements on same day, one for sale of shares and another a non- compete
agreement with Managing Director- Huge Price paid for non-compete agreement
with MD. Huge price paid for non- compete agreement was in reality for control
of vendee Company- amount not assessable under section 28.
Amount
assessable in hands of erstwhile Managing director as Capital Gain on Sale of
shares I.T Act 1961 Se.28.
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