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S.4 : Charge of income-tax – Celebrity – Damages for reputation – Compensation received by a film actress from Coca Cola India Limited (CCIL) towards damages caused to her reputation – Cannot be assessed as any benefit, perquisites arising to her out of exercise of profession – Not liable to tax [S.2(24) 28(i)]
Allowing the appeal of the assessee, Tribunal held that additional amount of ₹ 95 lakhs received by assessee towards damages for being sexually harassed by Coca Cola India Limited (CCIL) employee, for having disparaged her professional reputation by false allegations and for repudiatory breach of contract by CCIL. Therefore such compensation could not be termed as any benefit, perquisites arising to assessee out of exercise of profession, hence, it cannot not be assessed as income either under S. 2(24) or under S. 28(i) and hence not liable to tax. (AY. 2004-05)
Sushmita Sen. v. ACIT (2019) 174 ITD 8 (Mum) (Trib.)
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S.4 : Charge of income-tax – Capital or revenue – Incentive received under Package Scheme of Incentives of Govt. of Maharashtra is capital receipt and not liable to tax
Tribunal held that sales tax incentive availed under package scheme of incentive of Government of Maharashtra is capital receipt and is not chargeable to tax. (AY 2005-06)
ACIT v. Ballarpur Industries Ltd. (2018) 64 ITR 21(SN) / 168 DTR 225 / 193 TTJ 521 (Nag.)(Trib.)
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S.9(1)(i) : Income deemed to accrue or arise in India – Business connection – Various co-ordination/facilitation services rendered – Business of developing and producing entertainment serials for audio visual platform – Consideration cannot be assessed as royalty – DTAA-India-South Africa [S.9(1)(vi),9(1) (vii), Art. 12]
Tribunal held that various co-ordination/facilitation services rendered such as arranging for locational crew, producer, transportation, paper work for various stunts to be performed and other requirements for setting up and filming series, etc., were in nature of Line Production Services, same could not be termed as technical, managerial or consultancy services. Accordingly the consideration received by assessee for rendering of aforesaid services, could not be brought to tax as FTS. Tribunal also held that the consideration cannot be taxed as royalty since ownership of copyright remained vested with Endemol India. (AY. 2012-13)
Endemol South Africa (Proprietary) Ltd. v. Dy. CIT (2018) 172 DTR 111 / 196 TTJ 594 / 67 ITR 520 / 98 taxmann.com 227 (Mum.)(Trib.)
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S.10(22) : Educational institution – Exemption cannot be denied merely on ground that it was receiving fees from foreigner students in foreign exchange abroad by way of an arrangement with an educational organisation abroad
Dismissing the appeal of the revenue the Tribunal held that exemption cannot be denied merely on ground that it was receiving fees from foreigner students in foreign exchange abroad by way of an arrangement with an educational organisation abroad. The provisions of section 10(22) for claiming exemption provides that the requirement is that the university or the educational institute must exist solely for educational purposes in India in other words, the recipient of the income must have the character of an educational institute in India and its character outside India or it being a part of university existing outside India is not relevant for deciding whether its income would be exempt under section 10(22) or not. (AY 1998-99)
DIT (E) v. American School of Bombay Education Trust (2019) 174 ITD 326 (Mum.) (Trib.)
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S.10AA : Special economic zones – Interest on capital and remuneration – Partnership deed is not providing any interest – AO cannot disallow the interest and remuneration and reduce the eligible exemption [S. 80IA]
Dismissing the appeal of the revenue the Tribunal held that when the partnership deed has not provided any interest or remuneration to partners, the AO cannot disallow the interest and remuneration and reduce the eligible exemption. (AY 2014-15)
ACIT v. Mukta Enterprise. (2019) 174 ITD 259 (Surat) (Trib.)
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S.10B : Export oriented undertakings – Delay of one month in uploading the return – System was affected by virus – Reasonable cause – Exemption cannot be denied [S.139(1)]
Allowing the appeal of the assessee the Tribunal held that when assessee had completed audit, but return was uploaded belatedly. Reason given was that computer got infected and it took some time to set it right so that assessee could upload entire data. This reasoning given was supported by certificate from computer specialist, who attended to problem. Explanation given that computers got infected was reasonable explanation given in circumstances, delay in filing return was not intentional delay but beyond reasonable control of assessee. Denial of exemption is held to be not justified. (AYs. 2008-09, 2011-12)
Bartronics India Ltd. v. Dy. CIT (2018) 65 ITR 540 (Hyd.)(Trib.)
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S.11 : Property held for charitable purposes – Accumulation of income – Application of income – Charitable trust is entitled to accumulate 15% of receipts without considering the expenditure incurred on objects of Trust – when the application of income, is more than receipts of year, excess application of income i.e., expenditure in hands of assessee, can be carried forward to succeeding year. [S.11(1)(a), 11(2)]
Allowing the appeal of the assessee the Tribunal held that Charitable trust is entitled to accumulate 15% of receipts without considering the expenditure incurred on objects of Trust – when the application of income, is more than receipts of year, excess application of income i.e., expenditure in hands of assessee, can be carried forward to succeeding year. (AY 2008-09)
Maharshi Karve Stree Shikshan Samstha Karvenagar. v. ITO (2019) 174 ITD 591 (Pune) (Trib.)
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S.11 : Property held for charitable purposes – Dividend income – Income can be taxed if the investment is in violation of the provision – Exemption cannot be denied to the Trust in respect of other income [S.11(5), 12AA,13(1) (d)]
The assessee is a charitable institution registered u/s. 12AA (1) of the IT Act. It earned dividend income, other than income eligible for exemption u/s. 11. The AO denied benefit of exemption u/s. 11(1) for the entire income for violation of provision of S. 13(1)(d) read with S. 11(5) pertaining to mode of investment. CIT (A) held that benefit of exemption for entire income could not have been denied and at best AO could have denied exemption to extent of dividend income earned. Tribunal affirmed the order of CIT(A). (AY 2010-11)
ITO v. The Times Centre For Media And Management Studies. (2018) 168 DTR 14/194 TTJ 715 (Delhi) (Trib.)
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S.14A : Disallowance of expenditure – Exempt income – When there is no exempt income, no disallowance can be made. [R. 8D]
Dismissing the appeal of the revenue the Tribunal held that when there is no exempt income, no disallowance can be made. Followed CIT v. Corrtech Energy (P.) Ltd. (2015 372 ITR 97 (Guj.) (HC) (AY 2012-13)
DCIT v. McFills Enterprise (P.) Ltd. (2019) 174 ITD 667 (Ahd.) (Trib.)
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S.23 : Income from house property – Annual letting value – Stock-in-trade – The annual letting value (ALV) of unsold units of properties lying as stock-in-trade is not assessable as income under the head Income from House Property [S.5,22, 23(4)]
Tribunal held that the annual letting value (ALV) of unsold units of properties lying as stock in trade is not assessable as income under the head “Income from House Property”. The deeming provision of S. 23 cannot be extended beyond its ambit so as to cover the heads of income to which it does not operate. Taxing hypothetical income, which is otherwise not sanctioned by any provision under Chapter IV-D, cannot be permitted. (ITA No.1914/ PUN/2018, dt. 19-2-2019)(AY 2015-16)
Shree Balaji Ventures v. ITO (Trib)(Pune), www.itatonline.org
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S.23 : Income from house property – Annual value – Vacancy allowance – Due to fall in property prices failed to let out same year after year because of which property remained vacant – Entitle to vacancy allowance [S.22, 23(1)(c)]
Allowing the appeal of the assessee the Tribunal held that, due to fall in property prices failed to let out same year-after-year because of which property remained vacant. Entitled to vacancy allowance. (AY 2012-13)
Priyananki Singh Sood. (Ms.) v. ACIT (2019) 174 ITD 371 (Delhi) (Trib.)
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S.23 : Income from House Property – Annual value – Municipal rateable value Municipal rateable value is a recognised basis for determination of ALV, the AO cannot disregard the municipal rateable value and substitute some expected rent to be received [S.22]
Allowing the appeal of the assessee the Tribunal held that Municipal rateable value is a recognised basis for determination of ALV, the AO cannot disregard the municipal rateable value and substitute some expected rent to be received. Followed Tip Top Typography (2014) 368 ITR 330 (Bom.) (HC) (AY 2012-13)
Pankaj Wadhwa. v. ITO (2019) 174 ITD 479 (Mum) (Trib.)
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S. 28(i) : Business income – Agricultural income – Contract of growing and transporting grass – Growing and extracting grass – Agricultural Income – Transporting and relaying grass – Service – Business income [S. 2(1A),10(1)]
The assessee was awarded a contract of growing and delivering grass at the venue of contract. Payment was made on the basis of milestones and not apportioned into agricultural and business activity. Partly allowing the appeal of the assessee the Tribunal held that the activity of growing and extracting grass would be considered as an agricultural activity. The subsequent activity of transporting the grass and relaying it at the fields would be in the nature of service and considered as a business activity which needed to be brought to tax. (AY 2011-12)
Hortus Consultants Pvt. Ltd. v. ITO (2018) 192 TTJ 465 / 165 DTR 147 (Hyd.) (Trib.)
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S.28(i) : Business loss – Actor – Advance of money to production house – Write-off of advances as non-recoverable – Film was not successful – Loss is allowable as business loss or as business expenditure [S.37(1)]
Tribunal held that actor advanced money to a production house run by his wife to produce films in which he acted as hero so as to boost his career, however, films were not successful and his wife suffered loss and advances given by assessee could not be recovered, money advanced by assessee was in nature of business expediency accordingly the write off is allowable as business loss or business expenditure. (AY 2009-10)
Jackie Shroff v. ACIT (2019) 174 ITD 770 (Mum.) (Trib.)
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S.28(i) : Business loss – Write-off of advances made for running and development of business is held to be allowable as deduction. [S.37(1)]
Tribunal held that basic analogy for allowing write-off was to consider real nature of transaction. Advances were made for running of business and expenditure was not incurred for new project, neither it was totally disconnected with business activities carried out by assessee. Accordingly, Tribunal held that amount was advanced for tractor division of assessee in normal course of business and is allowable . (AY. 2002-03, 2003-04)
Mahindra & Mahindra Ltd. v. Dy CIT (2018) 193 TTJ 618 (Trib.) (Mum.)(Trib.)
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S.28(i) : Business Loss – Write-off of stores and parts – Imported goods were lying in custody of port authorities in bonded warehouse – Relinquishing its right and title to goods – Goods lost their life for use in its business – loss is incidental to business and allowable as business loss [S.37(1)]
The expenses incurred when materials were imported, such expenses incurred for such import were for the purpose of business pending capitalisation, i.e., utilisation thereof. However, the assessee relinquished the right and title to those goods in accordance with the Customs Act, 1962 considering the goods so lying with the port authorities had lost their life for use in the assessee’s business. Further the payments towards insurance, warehouse rent and other charges would become uneconomic in true commercial sense. It is a business loss which is allowable as deduction. (AY 2005-06)
ACIT v. Ballarpur Industries Ltd. (2018) 64 ITR 21 (SN)/ 168 DTR 225 / 193 TTJ 521 (Nag.)(Trib.)
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S.32 : Depreciation – Paper Brand – Trade marks – Intangible assets – Eligible depreciation [S.32(1) (ii)]
Relying on the order dt. 11-5-2017 in ITA No. 2263/Del/2012 (AY 2008-09) in case of ABC Paper Ltd., Tribunal held that the definition of “intangible assets” under S. 32(1)(ii) is an inclusive definition which not only includes know-how, patents, copyrights, trademarks, licences, franchises but also any other business or commercial rights of similar nature. Therefore, the interpretation of the AO, that since “brand” is not specifically mentioned in S.32(1)(ii), it cannot be equated with “trade mark” and hence, depreciation on the same is not admissible is not proper. (AY. 2006-07 to 2013-14)
DCIT v. Kuantum Papers Ltd. (2018) 62 ITR 439 (Delhi) (Trib.)
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S.37(1) : Business expenditure – Brand building – Advertisement expenses – Held to be revenue expenditure
Expenditure incurred in making advertisement of the products by the assessee is in the course of earning of profit without touching the capital asset. Therefore, the expenditure incurred by the assessee is revenue. (AYs. 2009-10, 2010-11, 2012-13)
ACIT v. Jansons Industries Ltd. (2018) 194 TTJ 19 (UO)(Chennai)(Trib.)
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S.37(1) : Business expenditure – Capital or revenue – Royalty and logo fees are allowable as revenue expenditure
Tribunal held that payment made for use of technical know-how and trademark and not for transferring the full ownership of know-how and thus the expenditure is revenue in nature. (AY 2011-12)
GKN Driveline (India) Ltd. v. DCIT (2018) 62 ITR 784 (Delhi) (Trib.)
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S.37(1) : Business expenditure – Corporate Social responsibility (CSR)expenses are allowable as business expenditure – Amendment in S. 37(1) for disallowing CSR expenses referred to in S. 135 of Companies Act, 2013 would not apply to earlier years
Expenditure incurred on social responsibility is incurred wholly and exclusively for the purpose of business or profession and also the amendment in S.37(1) for disallowing CSR expenses referred to in section 135 of Companies Act, 2013 would not apply to earlier years. (AY 2011-12)
DCIT v. Godawari Power & Ispat Ltd. (2018) 68 ITR 19 (SN) (Raipur)(Trib.)
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S. 37(1) : Business expenditure – Charity/Pooja and festival expenses are allowable as deduction
Expenses on charity/pooja and festivals is held to be allowable as business expenditure. (AY. 2011-12)
DCIT v. Godawari Power & Ispat Ltd. (2018) 68 ITR 19 (SN) (Raipur)(Trib.)
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S.37(1) : Business expenditure – Payment made to doctors Convention fees is allowable expenditure – Not prohibited by law
Tribunal held that Medical Council of India guidelines apply only to doctors and do not govern other entities and thus the guidelines cannot decide the allowability or otherwise of an expenditure under the Income-tax Act. Payment made to doctors convention fees is allowable expenditure. (AY 2011-12)
India Medtronic P. Ltd. v. DCIT (2018) 64 ITR 9 (SN)/ 95 taxmann.com 21 (Mum.) Trib.)
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S.37(1) : Business expenditure – Ad hoc expenditure – Company – No personal expenses – car running and telephone expenses – Disallowances cannot be made
Tribunal held that in case of company there might not be any personal expenses incurred by the assessee on account of car running and telephone expenses. The ad hoc addition made by the Assessing Officer without pointing out any specific inadmissible expenses incurred by the assessee was wholly unjustified and it was to be deleted. (AY 2012-13)
ITO v. Jaidka Woolen and Hosiery Mills P. Ltd. (2018) 68 ITR 216 (Delhi) (Trib.)
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S.37(1) : Business expenditure Disallowances cannot be made Interest paid to income-tax department on delayed payment of Tax Deduction at Source is allowable as deduction, it is not personal tax [S. 40(a)(ii)]
Tribunal held that interest paid to Income-tax department on delayed payment of Tax Deduction at Source is allowable as deduction, it is not personal tax. Matter was remanded for verification. (AY 2004-05)
Mukand Ltd. v. ITO (2019) 174 ITD 605 (Mum.) (Trib.)
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S.40(a)(i) : Amounts not deductible – Deduction at Source Disallowances cannot be made Non-resident – Engaged in distribution of recharge pens of various DTH providers via online network – Servers of USA based company Amazon for which it paid web hosting charges – No control over server or servers space being deployed by Amazon, while providing e-services as per agreement – Not royalty – Not liable to deduct tax at source – Amendment, if any, to scope of royalty by an amendment in 2012 by Finance Act with retrospective effect cannot fasten assessee with liability to withhold tax for the years which have already been closed prior to insertion of amendment – DTAA-India – USA [S.9(1)(vi), Art. 12]
AO held that web hosting charges for use of servers, was nothing but charges paid for use of commercial equipments within meaning of section 9(1)(vi), read with Explanation 2
and Explanation 5 of the said clause, thereby, assuming character of royalty, hence liable to deduct tax at source. On appeal the Tribunal held that since assessee did not possess and did not have any control over server or servers space being deployed by Amazon, while providing e-services as per agreement, then there was no scope to construe that e-service charges paid to Amazon could be described as royalty. Accordingly the assessee is not liable to deduct tax at source hence no disallowances can be made. Amendment, if any, to scope of royalty by an amendment in 2012 by Finance Act with retrospective effect cannot fasten assessee with liability to withhold tax for the years which have already been closed prior to insertion of amendment. (AY 2011-12)
EPRSS Prepaid Recharge Services India (P.) Ltd. v. ITO (2018) 196 TTJ 529 / 100 taxmann.com 52 / (2019)173 DTR 308 (Pune)(Trib.)
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S.40(a)(i) : Amounts not deductible – Deduction at source Disallowances cannot be made Non-resident – Amount not claimed as expenditure – No disallowance can be made – Exemption certificate for non deduction of tax at source – Once certificate has been issued no disallowances can be made – If income is not chargeable to tax in India – No disallowance can be made – Once it is held that income is not chargeable to tax in India, no disallowance can be made [S.195, 197]
Tribunal held that if no deduction is claimed for an expenditure, there can be no question of disallowance. Once the department has issued certificate for non-deduction of tax at source, there can be no disallowance. Once it is held that income is not chargeable to tax in India, no disallowance (AYs. 2004-05 to 2009-10)
Delhi Tourism & Transport Development Corp. Ltd. v. Dy. CIT (2018) 194 TTJ 305 (Delhi)(Trib.)
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S.40(a)(ia) : Amounts not deductible – Deduction at source – Project competition method – Provision for expenses – When the payee is not known it is not possible to deduct tax at source on estimated expenditure – Not liable to deduct tax at source – No disallowance can be made [S.145]
Tribunal held that since the expenditure was only estimated and work would be executed against these expenses in subsequent years, the payee was not known. Hence it was not possible for the assessee to deduct tax at source on the estimated expenditure on work which was to be completed in years to come. The financial statements of a particular project were to be made once in the life of the project, on completion of substantial activity and therefore, the assessee did not have any option but to make estimate for expenses on minor/ miscellaneous work. On facts the disallowance made by the Assessing Officer was directed to be deleted based on the fact that the assessee had paid tax at source on or before submission of the return (AY 2012-13)
Bengal Peerless Housing Development Co. Ltd. v. DCIT (2019) 69 ITR 217 (Kol.) (Trib.)
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S.40A(2) : Expenses or payments not deductible – Excessive or unreasonable – Provisions are not applicable to co-operative society [S.40A(2)(b)]
Provision of S.40A(2) are not applicable to co-operative society, accordingly no disallowance can be made for alleged excess payment. (AY 2009-10)
DCIT v. Ganesh Khand Udyog Sahakari Mandali Ltd. (2019) 174 ITD 135 (Surat) (Trib.)
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S.45 : Capital gains – Penny Stocks – Capital gains cannot be treated as bogus solely on the basis that the price of the shares has risen manifold and the reason for astronomical rise is not related to any fundamentals of market Disallowances cannot be made – If the transactions are duly proved by trading from stock exchange and the documentation is proper, the gains cannot be assessed as unexplained credit or as unexplained money [S.10 (38), 68, 69]
Allowing the appeal of the assessee the Tribunal held that capital gains cannot be treated as bogus solely on the basis that the price of the shares has risen manifold and the reason for astronomical rise is not related to any fundamentals of market. If the transactions are duly proved by trading from stock exchange and the documentation is proper, the gains cannot be assessed as unexplained credit or as unexplained money. (ITA No. 2766/Del/2018, dt. 26-11-2018)(AY 2014-15)
Mukta Gupta v. ITO (Delhi)(Trib.), www.itatonline.org
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S.45 : Capital gains – Cash credits – Bogus long-term capital gains – Penny stocks – Filed evidences for (a) purchase of shares, (b) payment by account payee cheque, (c) balance sheet disclosing investments, (d) demat statement (e) evidence of sale of shares through stock exchange, (e) bank statement reflecting sale receipts, (f) brokers ledger, (g) Contract notes etc., the gains cannot be treated as bogus on human probabilities, suspicion, conjectures and surmises – Addition as cash credits is deleted [S.10(38), 68]
Allowing the appeal of the assessee the Tribunal held that the assessee has filed all necessary evidences in support of the transactions. Some of these evidences are (a) evidence of purchase of shares, (b) evidence of payment for purchase of shares made by way of account payee cheque, copy of bank statements, (c) copy of balance sheet disclosing investments, (d) copy of demat statement reflecting purchase, (e) copy of merger order passed by the High Court, (f) copy of allotment of shares on merger, (g) evidence of sale of shares through the stock exchange, (h) copy of demat statement showing the sale of shares, (i) copy of bank statement reflecting sale receipts, (j) copy of brokers ledger, (k) copy of contract notes etc. Accordingly the addition as cash credit is held to be not justified. (ITA No. 2474/Kol/2018, dt. 1-2-2019)(AY. 2014-15)
Mahavir Jhanwar v. ITO (Kol.)(Trib.), www.itatonline.org
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S.45: Capital gains – Unexplained investment – Long term capital gains – Penny stocks – Sale of shares – Accommodation entries – Purchase and sale of shares had been made through Bombay Stock Exchange and through DEMAT account – Sale proceeds to be assessed as long term and cannot be assessed as unexplained investment – Eligible exemption [S. 10(38), 69, 131]
Allowing the appeal of the assessee the Tribunal held that assessee had purchased and sold shares of a company which amalgamated into another company by order of High Court. AO held that the scrips of Kailash were used by entry providers for providing bogus accommodation entries and that in some other matter in course of proceedings before Investigation Wing, Chartered Accountant had confirmed that he had provided accommodation entry in scrip of Kailash and, consequently, AO treated long-term capital gains under S. 69 of the Act. Allowing the appeal of the assessee the Tribunal held that the assessee had duly shown transaction in cheques right from purchase to sale of shares and all transactions had been routed through DEMAT account in Bombay Stock Exchange as per quoted price as on that date. SEBI did not find any prima facie material for manipulation in price of scrip of Kailash. Further, statement of Chartered Accountant could not be sole ground to implicate assessee and justify additions especially when, nowhere assessee had been found to be beneficiary of any kind of accommodation entry in any inquiry by Investigation Wing or any such material had been unearthed by department. Accordingly the long-term capital gains shown by assessee was genuine and, consequently liable for exemption under S 10(38) of the Act. (AY 2014-15)
Vidhi Malhotra. v. ITO (2019) 174 ITD 655 (Delhi) (Trib.)
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S.45 : Capital gains – Transfer – Capital asset – Deemed transfer – Amount received on assignment of by virtue of unregistered agreement of leasehold rights – After the Amendment Act 2001 – Not liable to capital gains tax. [S. 2(14), 2(47(v), Transfer of Property Act, 1882 S.53A, Registration Act, 1908, S.17, 49]
Allowing the appeal of the assessee the Tribunal held that assignment of leasehold rights is not registered, after the Amendment Act 2001, unless the document is registered have no effect in law for the purpose of section 53A of Transfer of Property Act and sections 17 and 49 of the Indian Registration Act. By the aforesaid amendment the words “the contract, though required to be registered, has not been registered, or” in section 53A of 1882 Act have been omitted. Simultaneously, sections 17 and 49 of Registration Act, 1908 have been amended, clarifying that unless the documents containing the contract to transfer for consideration any immovable property is registered, it shall not have any effect in law; other than for being received as evidence of a contract for specific performance or as evidence of any collateral proceedings not required to be effected by a registered instrument. Accordingly the amount received is not liable to capital gains tax. (AY 2008-09)
Mallika Investment Co. (P.) Ltd. v. ITO (2019) 174 ITD 386 (Kol) (Trib.)
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S.45 : Capital Gains – Joint Development Agreement (JDA) – Mere licence to builder to enter property for purpose of carrying out development – Cannot be regarded as transfer – Capital gains tax is not leviable [S.2(47) (v), Transfer of Property Act, 1882 S.53A]
Tribunal held that mere licence to builder to enter property for purpose of carrying out development, cannot be regarded as transfer. The mere fact that development of the property be done without possession, cannot be the basis to come to a conclusion that possession was delivered in part performance of the agreement for sale in the manner laid down in S. 53A of the Transfer of Property Act. Such possession is on behalf of the assessee and not in the independent capacity of purchaser of the property. Accordingly capital gains tax is not leviable. (AY 2006-07)
Lakshmi Swarupa. (Smt.) v. ITO (2019) 174 ITD 54 (SMC)(Bang.) (Trib.)
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S.47(vii) : Capital gains – Business income – Income from other sources – Transfer by a shareholder in a scheme of amalgamation – Increase in general reserve on transaction related to the composite Scheme of Arrangement and Amalgamation – An anti-abuse provision which applies only to cases of bogus capital building and money laundering – It does not apply to an amalgamation where shares are allotted at alleged undervaluation. Increase in general reserves due to recording of assets of amalgamating company at FMV not give rise to any real income to the assessee – It is capital in nature – Amendment to s. 47(vii) by FA 2012 w.e.f. 1-4-2003 is clarificatory and retrospective – Addition is held to be not valid [S.28(iv) 56(2) (viia)]
The question before the Tribunal was whether the AO/DRP has erred in making addition u/s. 28(iv) of the Act on account of increase in general reserves on transaction related to the Composite Scheme of Arrangement and Amalgamation and investment received on Composite Scheme of Arrangement and Amalgamation considered as income u/s. 56(2) (viia) of the Act. Tribunal held that anti-abuse provision which applies only to cases of bogus capital building and money laundering. It does not apply to an amalgamation where shares are allotted at alleged undervaluation. Increase
in general reserves due to recording of assets of amalgamating company at FMV did not give rise to any real income to the assessee. It is capital in nature. Amendment to s. 47(vii) by FA 2012 w.e.f. 1-4-2003 is clarificatory & retrospective. (ITA No. 1148/Del/2017, dt. 22- 2-2019) (AY 2012-13)
Aamby Valley Ltd. v. ACIT (2019) 102 taxmann. com 38(Delhi)(Trib.), www.itatonline.org
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S.47(xiiib) : Capital gains – Transaction not regarded as transfer – Conversion of firm in to LLP – Transfer – On cumulative satisfaction of conditions (a) to (f) of proviso to section 47(xiiib) would not be chargeable to capital gains [S.45]
Transaction involving conversion of a private limited company or unlisted public company to an LLP as contemplated in section 47(xiiib) would though be a transfer on cumulative satisfaction of conditions (a) to (f) of proviso to section 47(xiiib) would not be chargeable to capital gains. (ITA No. 3637/Mum/2015 & C.O No.2/Mum/2016, dt. 16-11-2018) (AY 2010-11)
ACIT v. Celerity Power LLP (2019) 174 ITD 433/197 TTJ 45 (Trib.), www.itatonline.org
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S.47A : Capital gains – Withdrawal of exemption – Conversion of firm into LLP – Provision will apply only for purpose of withdrawing an exemption earlier availed by an assessee and not for determination of exemption under section 47(xiiib) of the Act [S. 45 47A(4)]
Provision of S. 47A(4) will apply only for purpose of withdrawing an exemption earlier availed by an assessee and could not have been applied for determining whether the assessee is not eligible for claim of exemption under section 47(xiiib) in year of raising of such claim itself. (ITA No. 3637/Mum/2015 & CO No. 2/ Mum/2016, dt. 16-11-2018) (AY 2010 -11)
ACIT v. Celerity Power LLP (2019) 174 ITD 433/197 TTJ 45 (Mum.) (Trib.) www.itatonline.org
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S.48 : Capital gains – Computation – Full value of consideration – Conversion of a private limited company into assessee-LLP – Book value – Book value was to be regarded as full value of consideratzion for purpose of computation of capital gains. [S.45, 47]
Upon conversion of a private limited company into assessee-LLP entire undertaking of erstwhile company got vested into assessee LLP, no separate cost other than ‘book value’ would be attributable to individual assets and liabilities, hence such ‘book value’ could only be regarded as full value of consideration for purpose of computation of capital gain (ITA No. 3637/Mum/2015 & C.O No. 2/Mum/2016, dt. 16-11-2018). (AY 2010-11)
ACIT v. Celerity Power LLP (2019) 174 ITD 433/197 TTJ 45 (Mum.) (Trib.) www.itatonline.org
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S.49 : Capital gains – Previous owner – Cost of acquisition – Shares received on dissolution of Trust – Period of holding of the previous owner i.e., the Trust to be considered – Sale consideration received on sale of shares has to be assessed as long term capital gains [S.45, 49(1)(iii)(b), 54F, 68]
Dismissing the appeal of the revenue the Tribunal held that the AO was not justified in treating the sale consideration in the hands of the beneficiary as short term capital gains in respect of shares received on the date of dissolution of Trust. For computing capital gains, period of holding of the previous owner ie. the Trust to be considered. Sale consideration received on sale of shares has to be assessed as long term capital gains.
(ITA No. 583 /Mum/2016 dt. 18-1-2019, ITA No. 584/Mum/2016 dt. 18-1 -2019 (AY. 2006 -07)
ACIT v. Dhruv Khaitan (Mum.) (Trib.) (UR)
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S.49 : Capital gains – Previous owner – Cost of acquisition – Conversion of Private Limited Company into LLP – Capital assets become property of assessee by succession, inheritance or devolution, cost of acquisition of assets shall be deemed to be cost for which previous owner of property had acquired same [S. 2(42A)45, 49(1) (iii)]
Conversion of Private Limited Company to LLP, capital assets become property of assessee by succession, inheritance or devolution, cost of acquisition of assets shall be deemed to be cost for which previous owner of property had acquired same. (ITA No. 3637/Mum/2015 & CO No.2/Mum/2016, dt. 16-11-2018) (AY 2010 -11)
ACIT v. Celerity Power LLP (2019) 174 ITD 433/197 TTJ 45 (Mum.) (Trib.), www.itatonline.org
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S.50C : Capital gains – Full value of consideration – Stamp valuation – Property not freehold property but occupied by tenants and court cases to get premises vacated pending – Kanpur Development Authority issuing letters to assessee proposing to take over certain portion of his property in connection with road widening – Addition on account of difference in stamp duty and sale deed is not justified [S.45]
Allowing the appeal of the assessee the Tribunal held that the property was not freehold property but was occupied by tenants and there were court cases going on to get the premises vacated. The assessee objected that the Kanpur Development Authority had issued letters to him to take over a certain portion of his property in connection with road widening. The property deed mentioned that it was occupied by tenants and it was proved since court cases were going on against them. The Valuation Officer had not dealt with the issue as to why benefit should not be given to the assessee when the Kanpur Development Authority took away some portion of the property for road widening. The Valuation Officer had also not dealt with the impact on the valuation of the property already being occupied by tenants and court cases going on. The Valuation Officer had simply applied the circle rate available and made the report. As the case wherein the sale deed value was declared and independent valuation done by the authorised valuer but the subordinate authorities had not categorically dealt with the submissions of the assessee nor had brought out any material on record to support why the Valuation Officer’s report should be taken into consideration. Accordingly the addition is deleted. (AY. 2008-09)
Atul Kumar Garg, HUF v. ITO (2018) 64 ITR 72 (SN) (Luck.)(Trib.)
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S.54F : Capital gains – Investment in a residential house – Though new asset purchased within prescribed period had been let out would still be entitled to claim deduction [S.45]
Dismissing the appeal of the revenue the Tribunal held that though new asset purchased within prescribed period had been let out would still be entitled to claim deduction. The amendment to proviso to S. 54F made by Finance Act, 2000 as clarified by Circular No. 794, dt. 9-8-2000 (2000) 245 ITR 121 (St) which is the Explanatory Note to Finance Act, 2000. (AY 2013-14)
ACIT v. Ishita Mohatta (Mrs.) (2019) 174 ITD 407 (Kol) (Trib.)
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S.55 : Capital gains – No cost of acquisition – Transfer of trade mark – Cost of acquisition is not ascertainable – Not liable to tax [S.2(14), 4, 45, 48, 55(2)(a)]
Dismissing the appeal of the revenue the Tribunal held that though the trade mark is a capital asset which was transferred by an agreement for a period of two years, as the cost of acquisition is not ascertainable receipt is capital receipt and not liable to capital gains tax. (AY 1998-99)
ITO v. Modern Home Care Products Ltd. (2019) 174 ITD 209 (Delhi) (Trib.)
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S.56 : Income from other sources – Agricultural land – Gift – Agricultural land is an immovable property – Stamp valuation – It is immaterial whether they fall under definition of capital asset or stock-in-trade – Chargeable as gifts [S.2(14), 50C, 56(2)(viib), 69]
Tribunal held that provisions of S. 56(2)(vii)(b) refer to any immovable property and same is not circumscribed or limited to any particular nature of property. Accordingly the agricultural lands fall under definition of an immovable property for the purpose of S. 56(2)(vii)(b) of the Act. It is immaterial whether they fall under definition of capital asset or stock-in-trade. Accordingly the addition made as unexplained investment is affirmed. (AY. 2014-15)
ITO v. Trilok Chand Sain (2019) 174 ITD 729 (Jaipur) (Trib.)
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S.56 : Income from other sources – Shareholder – Close relatives – Transactions between close relatives provisions of S. 56(2) (vii)(c) is not applicable – Revision on the basis of audit objection is held to be not valid [S.56 (2) (vii)(c), 263]
The assessee was holding 76 per cent of total shareholder in Jai Maakali Poultry Products Pvt. Ltd. There were total seven shareholders in the company and all of them were close relatives either legal ascendants or descendants. Company issued shares at rate of ₹ 100 per share under rights issue. Assessee alone had applied for rights issue and company had allotted shares to assessee. Fair market value of shares was ₹ 416.38 per share. PCIT passed the revisional order on the ground that the assessee had received shares for value lesser than book value, therefore, provisions of section 56(2)(vii) (c) would be attracted and differential amount between book value and price paid by assessee for shares required to be brought to tax under head income from other sources. On appeal the Tribunal held that in the instant case, transaction of transfer of shares was within family and close relatives, proviso to section 56(2)(vii)(c) could not be applied. Tribunal also held that revision on the basis of audit objection is held to be not valid. (AY 2013-14)
Kumar Pappu Singh. v. DCIT (2019) 174 ITD 465 (Visakh.) (Trib.)
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S.68 : Cash credits – Share capital- Share premium – Directors were examined – Documents filed – Deposits were made before issue of cheque – Failed to establish creditworthiness and genuineness of the transaction – Addition is confirmed
Allowing the appeal of the revenue the Tribunal held that though the directors were examined and documents were filed, on examination of the profit and loss account and balance sheet the Tribunal observed that the companies have shown meagre profit and there was deposit before issue of cheques. Considering the surrounding circumstances and referring the judgment of Supreme Court in PCIT v. NRA Iron and Steel Pvt. Ltd. (2019 )103 taxmann.com 48 (SC) upheld the addition made by the AO (AY 2006-07)(ITA No. 4778/Del/2013 dt. 8-3-2019)
ITO v. Synergy Finlease Pvt. Ltd. (Delhi) (Trib) (UR)
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S.68 : Cash credits – Bogus Capital gains – Penny Stocks – Though the AO did not find any mistake in the documentation furnished by the assessee, there is need for finding of fact on (i) the nature of the shares transactions; (ii) make- believe nature of paper work; (iii) Camouflage the bogus nature; and, (iv) the relevance of human probabilities etc. – Addition is confirmed as cash credits [S.10(38) 45]
The assessee purchased 300 shares of Pyramid Trading Finance Ltd. now known as Misha Finance & Trading Ltd. The said shares were transferred to Tohee Trading Agencies Pvt. Ltd. As per SEBI’s website the said company i.e.,
Misha Finance & Trading Ltd was one of the delisted Companies. Purchase price was ₹ 0.37 and the sale price was ₹ 45 per share increase of 120 times within 24 months. The assessee claimed exemption u/s. 10 (38) of the Act which was disallowed by the AO and assessed as cash credits. On appeal, CIT(A) also confirmed the addition. On appeal to the Tribunal dismissing the appeal of the assessee the Tribunal held that though the AO did not find any mistake in the documentation furnished by the assessee, there is need for finding of fact on (i) the nature of the shares transactions; (ii) make-believe nature of paper work; (iii) Camouflage the bogus nature and, (iv) the relevance of human probabilities etc. – Addition is confirmed as cash credits. Followed PCIT v. NDR Promoters Pvt. Ltd. (2019) 410 ITR 379 (Delhi) (HC) (ITA No. 1875/PUN/2018, dt. 1-3-2019) (AY 2015-16)
Shamim Imtiaz Hingora v. ITO (SMC) (Pune) (Trib), www.itatonline.org.
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S.68 : Cash credits – Shares – Purchase of shares held to be genuine – Sale consideration cannot be assessed as assessee’s own unaccounted money [S.45]
Dismissing the appeal of the revenue the Tribunal held that when the Assessing Officer had accepted purchase of shares as genuine transaction, sale consideration received on sale of shares cannot be assessee’s own unaccounted money. (AY 2013-14)
ACIT v. Navneet Kumar Sureka (2019) 174 ITD 320 (Delhi) (Trib.)
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S.68 : Cash credits – Share premium – The fact that the premium is abnormally high as per test of human probabilities is not sufficient – The AO has to lift the corporate veil & determine whether any benefit is passed on to the shareholders/ directors. Directions issued to AO to establish whether assessee company was used as a vehicle to pass on the benefit to shareholders/directors – Tribunal directed the AO to verify all the funds and cash flow management of the company for both AYs. 2009-10 & 2010-11. AO should not resort to rely on circumstantial evidence or on test of human probabilities but on factual evidence of passing on benefit to the shareholders/directors- Addition was deleted subject to verification [S.28(iv), 56]
The appellant contended before the Tribunal that, the representatives from investor companies were examined on oath and have confirmed making the investment at premium. Complete details and confirmation of transaction available and are not contradicted in any way that shares were acquired at a premium as continued to be reflected in books of accounts of Appellant Company. Quantity of share premium on shares of private company are not regulated by law and is based on commercial negotiations. Share premium money received is fully accounted and continues to remain in the company to date fully compliant with section 78 of companies Act. Allegations that the same could be towards services by promoters are totally baseless and not supported by any material. Amount of share premium is permitted to be negotiated between investor and company and there are no restrictions on the quantum. Bharati Cement Corporation Limited as legal entity is distinct and separate from promoters or shareholders, presumptions made in impugned order are contrary to settled principles of law, unlawful, factually baseless and invalid. As no amount of share premium is alleged or even shown to have been allowed as pass through by the company there is no basis for suspicions and wild allegations. Without prejudice, even if lifting of corporate veil is permissible, the consequence would not lead to taxation of share premium in the hands of Appellant Company. The Tribunal held that the fact that the premium is abnormally high as per test of human probabilities is not sufficient to the AO to lift the corporate veil. Presumptions of some service/benefits being allowed by Government of State of Andhra Pradesh to investor companies, even if presumed to be true for argument sake cannot justify taxation of any amount in the hands of Appellant company, as being a legal entity Appellant Company was neither in business of providing such services or was actually involved in any way. Details provided also establish that the entire sum and even subsequent share premium amount received from PARFICM remains invested in Appellant’s business as on date of this hearing. AO brought impugned share premium to tax under S. 28 (iv) and S. 68 but the learned CIT(A) has confirmed that the same is taxable under S. 56. Department is not in appeal against learned CIT(A) order. The subsequent amendment by way of S. 56 2(viib) effective 1-4-2013 i.e., AY 2013-14 cannot be applied for impugned transactions completed during AY 2009-10 and 2010-11. On record confirm that S. 68 and S. 28 (iv) have no application at all. Tribunal directed the AO to verify all the funds and cash flow management of the company for both AYs 2009-10 & 2010-11. AO should not resort to rely on circumstantial evidence or on test of human probabilities but on factual evidence of passing on benefit to the shareholders/directors. Hence, grounds of appeal raised by the assessee are allowed for statistical purposes. (ITA Nos. 696 & 697/Hyd/2014, dt. 10-8-2018) (AY 2009-10, 2010-11)
Bharathi Cement Corporation Pvt. Ltd. v. ACIT (Hyd.) (Trib.), www.itatonline.org
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S.68 : Cash credits – Deposit in bank account – Not maintaining books of account – Presumptive taxation – Return was accepted – Addition as cash credit is held to be not valid [S.44AF]
Tribunal held that since the assessee has not maintained the books of account and return filed under presumptive taxation has been accepted. Mismatch in the gross receipt and net income, amount deposited in the bank account, addition cannot be made as cash credits. (AYs .2010-11 to 2012-13)
Babbal Bhatia (Smt.) v. ITO (2018) 65 ITR 532 (Delhi) (Trib.)
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S.69 : Unexplained investments – Hindu Undivided Family – Agricultural land – Partition – Fixed deposits – Benami names of family members – Retraction of statement – No assessment is made in larger Hindu Undivided Family – Additions can be made in the hands of smaller HUF – Investments in fixed deposits to be considered as unexplained investments of smaller HUF in equal shares – Matter remanded. [S.132(4), 171]
Tribunal held that merely on the basis of statement addition cannot be made especially when the statement was retracted within reasonable time. On facts the HUF was not assessed to tax hence no order u/s. 171 is required to be passed. As the property was apportioned, additions can be made only in the hands of smaller HUFs and not in the hands of larger HUF. Fixed deposits can be assessed only in the hands of smaller HUFs in equal shares., in different years. Matter remanded. (AY 1999-2000 to 2009-10 )
DCIT v. E. Ramesh Upadhyay, HUF (2019) 69 ITR 164 (Bang.)(Trib.)
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S.72A : Carry forward and set-off of accumulated loss – Conversion of private limited company to LLP – Failure to satisfy conditions laid down in proviso – Carry forward of losses of erstwhile company by LLP is not entitled. [S.47 xiiib), 72A (6A), Limited Liability Partnership Act, 2008, S. 56, 58 (4)]
Assessee had failed to satisfy conditions laid down in proviso to clause (xiiib) of S. 47 carry forward and set off of accumulated losses of erstwhile company by assessee LLP is not entitled (ITA No. 3637/Mum/2015 & CO No.2/ Mum/2016, dt. 16-11-2018). (AY 2010-11)
ACIT v. Celerity Power LLP (2019) 174 ITD 433 /197 TTJ 45 (Mum.) (Trib.), www.itatonline.org
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S.80IA : Industrial undertakings – Audit report – Filing of an audit report is procedural and directory in nature – It can also be filed before Appellate Authority [Form No. 10CCB]
Dismissing the appeal of the revenue the Tribunal held that filing of an audit report is procedural and directory in nature. It can also be filed before Appellate Authority, CIT(A) has rightly admitted the Audit report filed by the assessee during the course of the appellate proceedings and allowing the claim u/s. 80IA of the Act. (ITA No. 3637/Mum/2015 & C.O No.2/Mum/2016, dt. 16-11-2018)(AY. 2011-12)
ACIT v. Celerity Power LLP (2019) 174 ITD 433 /197 TTJ 45 ( Mum.)(Trib.), www.itatonline.org
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S.80IC : Special category States – Profit on each undertaking has to be treated separately – Profits and losses of all eligible undertakings are not to be netted for purpose of calculating deduction – Each undertaking is to be taken on a standalone basis – Where the assessee availed deduction for a period of 5 years at rate of 100 per cent on substantial expansion, deduction for remaining 5 assessment years will be at rate of 30 per cent and not at rate of 100 per cent [S. 80IC (2), 80IC (5), 80IC (7)]
Tribunal held that while calculating the deduction, profit on each undertaking has to be treated separately. Profits and losses of all eligible undertakings are not to be netted for purpose of calculating deduction. Each undertaking is to be taken on a stand-alone basis. Assessee availed deduction for a period of 5 years at rate of 100 per cent on substantial expansion, deduction for remaining 5 assessment years will be at rate of 30 per cent and not at rate of 100 per cent. (AYs 2010-11 to 2012-13)
Milestone Gears (P.) Ltd. v. ACIT (2019) 174 ITD 702 (Chd.) (Trib.)
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S.92B : Transfer pricing – International Transaction – Advertising Marketing and Promotion (AMP) expenses is not an international transaction – Adjustment is held to be not justified [S.92C]
Tribunal held that Advertising Marketing and Promotion (AMP) expenses is not an international transaction following the order for the AY 2010-11 (I.T.A./1600/Mum/2015 dtd. 17-1-2018) wherein it had held that AMP is not an international transaction as there was no ‘prior arrangement’. (AY 2011-12)
India Medtronic Private Limited v. DCIT (2018) 64 ITR 9 (SN)/ 95 taxmann.com 21 (Mum.) (Trib.)
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S.92C : Transfer pricing – Inter group services – Payments in accordance with the written agreements – Adjustment is held to be not justified [S.92CA]
An agreement entered into between parties cannot be disregarded without assigning cogent reasons. The services, by their very nature, are intangible and therefore, the evidences regarding availing such services and benefits received as a result of availing such services can be best demonstrated by narration and descriptions as evidenced by supportive emails. Practice was accepted since AY 2007-08. Adjustment is held to be not valid. (AY 2014-15)
Avery Dennison (India) Pvt. Ltd. v. ACIT (2018) 68 ITR 486 (Delhi)(Trib.)
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S.92C : Transfer pricing – Arm’s length price – CUP method – Interest free loan to subsidiary – Shares were allotted – Adjustment is held to be not justified
Advancing interest free loans must not necessarily be deemed to be interest earning activity and activity to capitalise opportunity cost for investing in new territories – The funds were raised for the purpose of investment in subsidiaries and on the fact that these funds were interest free and ultimately, shares were allotted, it shows that there is no adjustment to be made, on the CUP method adopted by the AO/TPO, even if the transaction is considered as one that of international transaction. (AY 2008-09 to 2011-12)
Bartronics India Ltd. v. Dy. CIT (2018) 65 ITR 540 (Hyd.)(Trib.)
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S.92C : Transfer pricing – Arm’s length price – Royalty paid to associated enterprises was same as assessed when it was an independent entity – No adjustment to be made
Tribunal held that the two parties were independent at time of signing agreement for payment of royalty and, subsequently, when concern became associated enterprise in a later period, price paid to associated enterprises was same as assessed when it was an independent entity.
Moreover, payment of royalty to AE had been accepted in preceding and succeeding assessment years and payment of royalty had been made to AE at rates approved by RBI and therefore, Tribunal had deleted the adjustment made by the TPO on account on payment of royalty to the AE. (AYs 2003-04, 2005-06)
DCIT v. Kalyani Hayes Lemmerz Ltd. (2018) 193 TTJ 938 /167 DTR 36 (Pune) (Trib)
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S.92C : Transfer pricing – Arm’slength price – Resale of goods – RPM method is most appropriate – Foreign exchange gain/loss arising out of revenue transactions is required to be considered as an item of operating revenue/cost, both for assessee as well as comparables – Granting adjustment on account of import duty paid because it incurred higher import duty in comparison with comparable companies – No adjustment on account of separate items resulting into computation of gross profit can be permitted
Tribunal held that where assessee imported finished goods from its Associated Enterprises (AEs) and resold same to non-AEs without any value addition, RPM was most appropriate method in respect of distribution activities undertaken by assessee. Foreign exchange gain/loss arising out of revenue transactions is required to be considered as an item of operating revenue/cost, both for assessee as well as comparables. As regards imported finished goods from its Associated enterprises (AEs) and resold same to non-AEs without any value addition. Granting adjustment on account of import duty paid because it incurred higher import duty in comparison with comparable companies. Whether import duty has been paid or not or paid to lower extent by comparables cannot have any effect over computation of gross profit margin of comparables, no adjustment on account of separate items resulting into computation of gross profit can be permitted. (AY 2011-12)
Fresenius Kabi India (P.) Ltd. v. ACIT (2018) 172 DTR 129 / 196 TTJ 1023 / 68 ITR 27 / 100 taxmann.com 134 (Pune)(Trib.)
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S.115JA : Book profit – Debenture Redemption Reserve – Ascertained liability – Deductible for computing book profits – Order of Assessing Officer as per the ratio of jurisdictional High Court Revision is bad in law on merit and law [S. 263]
Allowing the appeal of the assessee the Tribunal held that there being a decision by the jurisdictional High Court allowing the deduction of debenture redemption reserve above, it would be binding on the PCIT. PCIT cannot hold that the order of Jurisdictional High Court is per incurium. The revision was based on a mere change of opinion and not because the original order was prejudicial to the interests of the revenue. Hence, the order of the PCIT is liable to be quashed on merits also. Followed CIT v. Raymond Ltd (2009) 2009 Taxman 65 (Bom.) (HC) and Grasim Industries Ltd. v. CIT (2010) 321 ITR 92 (Bom) (HC). (ITA. No. 3530/Mum/2018 dt. (ITA. No. 3530/Mum/2018 / 3531 dt. 10-1-2019 (AY 2009-10, 2010-11)
Housing Development and Infrastructure Ltd. v. PCIT (Mum.) (Trib.) (UR)
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S.143(3) : Assessment – Limited verification – The AO has to consider the claim of the assessee to make correct assessment –Matter remanded
Tribunal held that the AO has to consider the claim of the assessee to make correct assessment. The Department could not take advantage of the ignorance of the assessee to collect more tax than is legitimately due in view of Circular No. 14 dated April 11, 1955. Therefore according to Circular No. 7 of 2017 there is a bar on the jurisdiction of the Assessing Officer to go beyond the subject issue under limited scrutiny cases, but he is not restrained from adjudicating issues raised by the assessee. Accordingly the matter remanded. (AY 2014-15)
Thakurraj Kumar v. DCIT (2019) 69 ITR 79 (Amritsar) (Trib.)
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S.143(3) : Assessment – Assessment of amalgamating company – Notices were issued prior to the amalgamation with another company – Assessment proceedings cannot be held to be invalid [S.142(1) 143(2)]
As the notices under sections 142(1) & 143(2) were issued prior to the amalgamation with another company the assessment proceedings cannot held to be invalid. The AO can proceed with the assessment proceedings by transposing the amalgamating company as the assessee and issuing fresh notice under section 142(1) and complete the assessment proceedings. (AYs. 2004-05, 2006-07 2007-08)
Cyient Ltd. v. Dy. CIT (2018) 194 TTJ 69 (Hyd.) (Trib.)
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S.144C : Reference to dispute resolution panel – Not an eligible assessee – Draft assessment order is invalid [S.92CA(3)]
Held, dismissing the appeal of the revenue the Tribunal held that according to the provisions of S. 144C(15)(b), the assessee must be a foreign company or an assessee in whose case there was any variation arising out of or in consequence of an order passed by the Transfer Pricing Officer in terms of S.92CA(3). There was no variation as a consequence of any order passed by the Transfer Pricing Officer as there was no adjustment made in the case of the assessee. As the assessee had not fulfilled any of the conditions to become an “eligible assessee” in terms of S. 144C(15)(b), the draft assessment order was invalid and the final assessment order was without jurisdiction and null and void. (AY 2010-11)
ACIT v. Espn Star Sports Mauritius SNCET Companie (2019) 69 ITR 153 (Delhi) (Trib.)
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S.144C : Reference to dispute resolution panel – In terms of sub-section (1) of section 144C, issuance of draft assessment order is a sine qua non before Assessing Officer can pass a regular assessment order under section 143(3) [S.143(3) 292B]
Tribunal held that the AO had passed a regular assessment order along with notice of demand under section 156 of the Act, notice under section 274 read with section 271 was issued to the assessee.
Tribunal noted that undoubtedly, if draft assessment order was wrongly titled an assessment order, section 292B should have come to the rescue of the AO. However given the fact that resultant tax demand and penalty proceedings have been initiated, it was a final assessment order which has been passed by the AO in substance and in effect. Thus the Tribunal concluded that since the AO had failed to follow the mandate of the provisions of section 144C of the Act whereby he was required to pass a draft assessment order which is mandatory and is prescribed by the statute where order is passed under section 92CA proposing transfer pricing adjustment, the final assessment order passed was without jurisdiction. Further, the issuance of a show-cause notice cannot be equated and treated as a draft assessment order as the same would make the provisions of section 144C redundant. Accordingly, the impugned assessment order was set aside and assessee’s appeal was thus allowed. (AY 2011-12)
DCIT v. Jaipur Rugs Company P. Ltd. ( 2018)193 TTJ 49 (UO)/ 64 ITR 128 (Jaipur)(Trib.)
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S.145 : Method of accounting – Project completion – Profit and loss account and Balance sheet is prepared on completion of project, provision for expenses in respect of ancillary work yet to be completed has to be taken into consideration – When the payee is not known it is not possible to deduct tax at source on estimated expenditure – Not liable to deduct tax at source – No disallowance can be made [S.40(a)(ia)]
Tribunal held that since in the project completion method, the entire expenses and the entire sales should be shown, it was necessary for the assessee to make provision for estimated expenditure to be incurred in subsequent years on account of minor or miscellaneous work. Accordingly the treatment of the assessee in respect of the estimated expenditure like expenses on minor or miscellaneous work, in its books of account was proper. Since the assessee had disclosed its entire project receipts of its project in the assessment year 2012-13, all the expenses incurred or to be incurred in connection with the project were also taken into account so as to arrive at the correct net profit from this project. When the payee is not known it is not possible to deduct tax at source on estimated expenditure the assessee is not liable to deduct tax at source hence no disallowance can be made (AY 2012-13 )
Bengal Peerless Housing Development Co. Ltd. v. DCIT (2019) 69 ITR 217 (Kol.) (Trib.)
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S.145 : Method of accounting – Cash system – Tax Deduction at Source – Mismatch of professional receipts appearing in Form No. 26AS – Credit for tax deduction at source was claimed – Corresponding professional receipts cannot be assessed to tax if such receipts were otherwise not assessable as income for the relevant year [S. 194A, 194J, 199 R.37BA, Form 26AS]
Tribunal held that when the assessee following cash system of accounting due to mismatch of professional receipts appearing in Form No. 26AS, merely because credit for tax deduction at source was claimed corresponding professional receipts cannot be assessed to tax if such receipts were otherwise not assessable as income for the relevant year. Matter was remanded to the AO to recompute income in accordance with cash system of accounting followed by the assessee. (AY 2011-12)
Dhruv Sachdeva. v. ACIT (2019) 174 ITD 504 (Delhi) (Trib.)
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S.147 : Reassessment – Intimation – Bogus share capital – Share premium – Reopening for taxing Bogus share capital –Even in assessment u/s. 143(1) intimation, the AO is not entitled to reopen on the ground that the assessee has received “huge share premium” which was not “examined” by the AO. The AO cannot reopen in the absence of tangible material that shows income has escaped assessment. [S. 68, 143(1)]
Dismissing the appeal of the revenue, the Tribunal held that even in a s.143(1) intimation, the AO is not entitled to reopen on the ground that the assessee has received “huge share premium” which was not “examined” by the AO. The AO cannot reopen in the absence of tangible material that shows income has escaped assessment. (ITA No. 1462/Mum/2017, dt. 26-9-2018) (AY 2009-10)
DCIT v. Kargwal Products P. Ltd. (Mum.) (Trib)., www.itatonline.org
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S.147 : Reassessment – Amalgamation – AO issued notice for reopening only against amalgamating company and not against assessee company which was amalgamated/successor company, assessment made in name of assessee company was void [S.148, 292B]
The Tribunal stated that notice for reopening under section 148 can be issued only against amalgamating company (NPPL) for being provided accommodation entries and not against assessee-company which was amalgamated/ successor company. As a result, the Tribunal held that assessment made in name of assessee company was void because, even after AO came to know that NPPL got amalgamated with assessee-company he did not care to issue section 148 and 143(2) notices to assessee-company which was sine qua non. Further, Tribunal held that notice issued in name of non-existent company was clearly jurisdictional defect and not mere procedural irregularity and thereby it was not curable defect and section 292B could not come to the rescue of Department. (AY. 2006-07)
Dy. CIT v. Mani Square Ltd. (2017)190 TTJ 742/ (2018) 163 DTR 34 (Kol.)(Trib.)
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S. 153A : Assessment – Search- Share Capital and Share premium – Statement recorded – No incriminating material was found in the course of search – Order is bad in law [S. 68, 132, 132(4)]
Allowing the appeal of the assessee the Tribunal held that the addition u/s 68 of share capital and share premium as unexplained cash credit, during search and seizure proceedings u/s. 132, was not based on incriminating material. The statements recorded u/s. 132(4) could not constitute as incriminating material. Hence, in the absence of any such incriminating material additions made by the learned CIT(A) in the 153A proceedings, would be void ab-initio. Followed PCIT v. Lata Jain (2016) 384 ITR 543 (Delhi) (HC) (AY 2013-14)
Hindustan Aqua Ltd. v. ACIT (2018) 195 TTJ 76 (Delhi) (Trib.)
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S.153C : Assessment – Income of any other person – Search and seizure – Satisfaction note is not available – Assessment is held to be bad in law [S.153A]
The satisfaction of the AO of the person in respect of whom the search was conducted to the effect that relates to a person other than person referred to in S. 153A, is a sine qua non. In this case, no satisfaction note by the AO of the person in respect of whom the search was conducted was furnished by the Department despite categorical directions. Accordingly the order passed is held to be bad in law. (AY 2008 -09)
Avalanche Reality P. Ltd. v. ACIT (2018) 68 ITR 79 (SN) (Indore)(Trib.)
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S.153C : Assessment – Income of any other person – Search and seizure – Issue of notice is mandatory – The amendment in S.153C by the Finance Act, 2017, with effect from April 1, 2017 to the effect that the block period for the person in respect of whom the search was conducted as well as the “other person” would be the same six assessment years immediately preceding the year of search was prospective in nature – Order is held to be bad in law [S.132 , 153B(1)(b)]
Tribunal held that the search was conducted on the K group of cases on November 9, 2011. The impounded documents had been received by the AO on August 29, 2013. The satisfaction note u/s. 153C had been recorded on October 3, 2013. The AO passed the assessment order u/s. 153B(1)(b) considering the AY 2012-13 to be the year of search. However, the first proviso to S.153C of the Act provides that the six assessment years for which assessments or reassessments could be made u/s. 153C would have to be construed with reference to the date of handing over of the assets or documents to the AO of the assessee. Therefore, the AY 2014-15 would be the year of search and the six assessment years u/s. 153C of Act in the case of assessee would be assessment years 2008-09 to 2013-14. However, the AO had not issued any notice u/s. 153C before initiating the proceedings against the assessee. The amendment in S.153C by the Finance Act, 2017, with effect from April 1, 2017 to the effect that the block period for the person in respect of whom the search was conducted as well as the “other person” would be the same six assessment years immediately preceding the year of search was prospective in nature. The AO, therefore, should have framed the assessment u/s. 153C in the case of the assessee and at the time of initiating the proceeding against the assessee, issued notice u/s. 153C which had not been done in this case. The issue of notice u/s. 153C was mandatory and a condition precedent for taking action against the assessee u/s. 153C. Accordingly the assessment is illegal and bad in law. (AY 2012-13)
BNB Investment and Properties Ltd. v. Dy. CIT (2018) 68 ITR 567 (Delhi)(Trib.)
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S.153D : Assessment – Search –Income of any other person – Approval – Joint Commissioner Approved – Draft Assessment order – Letter requesting grant & grant of approval within a day – Joint Commissioner approved in mechanical manner – Approval in haste – Not proper – Order is held to be bad in law [S.153C]
The Joint Commissioner has given approval to the draft assessment order u/s. 153C. The letter requesting the grant of approval to the Joint Commissioner and the grant of approval was within a day. It was evident from the documents on record that the approval was given by the Joint Commissioner in a hasty manner without proper examination of the records as the records were in Jodhpur while the Joint Commissioner was camping at Udaipur. The Tribunal allowing the claim of the assessee stated that the Joint Commissioner had failed to grant approval in terms of S. 153D of the Act. The approval was held as mechanical and given in haste, being non sustainable. Hence, block assessment framed u/s. 153C without adherence to statutory approval S.153D, merits annulment. (AY 2005-06)
Indra Bansal v. ACIT (2018) 164 DTR 185 / 192 TTJ 968 (Jodhpur)
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S.170 : Succession to business otherwise than on death – Capital gains – Conversion of private Limited company to LLP – de hors applicability of section 47A(4), would be subject to liability of assessee LLP as a successor entity [S. 5, 45, 47A(4)]
Capital gains, if any, involved in transfer of capital assets on conversion of private limited company to assessee LLP, de hors applicability of S. 47A(4), would not be liable to be assessed in hands of assessee LLP as per S. 45 read with S.5, however, same would be subject to liability of assessee LLP as a successor entity. (ITA No. 3637/Mum/2015 & C.O No.2/Mum/2016, dt. 16-11-2018) (AY 2010-11)
ACIT v. Celerity Power LLP (2019) 174 ITD 433/197 TTJ 45 (Mum.) (Trib.), www.itatonline.org
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S.198 : Deduction at source – Tax deducted is income received – Mismatch of receipts – Balance sheet item – Service tax wrongly treated as TDS by AO cannot be considered as income [Form 26AS] Dismissing the appeal of the revenue the Tribunal held that the mismatch in receipts cannot be held as undisclosed receipts as they were balance sheet items. Further, it also noted that the assessee had submitted reconciliation statement between the service tax return and Form 26AS and there was no under-reporting of income. (ITA No. 6836/Del./2014 dt. 5-10-2017)(AY. 2010-11)
DCIT v. G.E. Capital Business Process Management Services Pvt. Ltd. (2017) 51 CCH 158 (2018) 63 ITR 337 (Delhi)(Trib.)
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S.219 : Credit for advance tax – Deduction at source – Advance received by firm – succession by company – Credit for deduction of tax at source should be allowed when the receipt or part of receipt recognised as income by company
Tribunal held that when the firm is succeeded by a company credit for deduction of tax at source should be allowed when the receipt or part of receipt recognised as income by company. (AY. 2012-13)
ITO v. Dreamax Infrastructure Developers (2018) 65 ITR 500 (Jaipur) (Trib.)
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S.221 : Penalty – Failure to pay self-assessment tax – amendment prescribing mandatory charge of interest – Amendment does not envisage penalty for non-payment of self-assessment tax. [S.140A(3), 221(1)]
The Legislature did not envisage that consequent to the amendment, the default in payment of self- assessment tax would hitherto be covered by the scope of s.221(1). s.221 remains unchanged, both during the pre and post amended s.140A(3) and even in the pre-amended situation, penalty u/s. 221 was not attracted for default in payment of self-assessment tax. Thus, without there being any requisite corresponding amendment to s. 221 in consonance with the amendments carried out in S..140A(3) with effect from April 1, 1989, the Department cannot impose penalty u/s. 140A(3) read with S..221(1) of the Act. (AY 2012-13)
Balraj Prakashchand Bansal v. Dy. CIT (2018) 64 ITR 62 (SN) (Mum.)(Trib.)
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S.249 : Appeal – Commissioner (Appeals) – Admitted tax as per return of income – Requirement of paying admitted tax before filing appeal is directory –When defect is removed, earlier defective appeal becomes valid. Accordingly the matter was remanded to CIT(A) [S.249(4)]
Tribunal held that payment of admitted tax as per return of income before filing of an appeal is directory, therefore, when defect in appeal, being non-payment of such tax, is removed, earlier defective appeal becomes valid. Accordingly the matter was remanded to CIT(A). (AY 2013-14)
Sushila Devi Malu (Smt.) v. ITO (2019) 174 ITD 627 (Bang.) (Trib.)
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S.250 : Appeal – Commissioner (Appeals) – power to admit additional evidence – Books of account and vouchers were produced before the AO – Commissioner (Appeals) can call for books of account, details and vouchers for examination – No violation of Rule 46A(4). [S.250(4) R. 46A]
Tribunal held that The Commissioner (Appeals) had verified the details and the books of account and come to the finding that the assessee had maintained proper books of account and that there were no violation of provisions relating to tax deduction at source and correctly deleted the additions. (AY 2012-13 )
ITO v. Jaidka Woolen and Hosiery Mills P. Ltd. (2018) 68 ITR 216 (Delhi) (Trib.)
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S.263 : Commissioner – Revision of orders prejudicial to revenue – Book profit – Exempt income – two views possible – Revision is held to be bad in law [S.14A, 115JB, R.8D]
The AO enhanced the suo motu disallowance made by the assessee. The Commissioner revised the order holding that the failure to include the sum in computing the book profit under the provisions of section 115JB rendered the assessment order erroneous in so far it was prejudicial to the interests of the Revenue. Allowing the appeal of the assessee the Tribunal held that in ACIT v. Vireet Investments (P.) Ltd. (2017) 165 ITD 27 /154 DTR 241/188 TTJ 1 (SB) (Delhi) (Trib.) held that the view beneficial to the assessee was to be taken while deciding the issue in terms of the decision in CIT v. Vegetable Products Ltd. (1973) 88 ITR 192(SC). Therefore the Assessing Officer had considered the issue during the original assessment proceedings and formed a view permissible under law that no disallowance relatable to exempt income could be made under section 14A read with Rule 8D while computing the book profits under section 115JB. The revision proceedings were quashed as the assessment order was neither erroneous nor prejudicial to the interests of the Revenue (AY 2012-13 )
Tata Sons Ltd. v. ACIT (2019) 69 ITR 46 (Mum.) (Trib.)
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S.263 : Commissioner – Revision of orders prejudicial to revenue – Transfer pricing officer – Transfer pricing risk parameter, fell under para 3.2 of circular dated 10-3-2016 which required reference to TPO by Assessing Officer mandatorily – Revision is held to be justified [S.92CA]
Dismissing the appeal of the assessee the Tribunal held that transfer pricing risk parameter, fell under para 3.2 of circular dated 10-3-2016 which required reference to TPO by Assessing Officer mandatorily. Accordingly revision is held to be justified. (AY 2015 -16)
Varian Medical Systems International India (P.) Ltd. v. PCIT (2019) 174 ITD 721 (Mum.) (Trib.)
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S.263 : Commissioner – Revision of orders prejudicial to revenue – Depreciation on tenancy rights – Allowed in original assessment – Legally permissible view – Revision and disallowance by PCIT – Mere change in opinion – Revision is bad in law [S. 32(1)(ii)]
Allowing the appeal of the assessee the Tribunal held that the assessing officer has applied his mind at the time of passing the assessment order allowing the depreciation claim. The AO’s view was a legally permissible view. Hence, the original order cannot be liable to be visited with a revisionary order by the PCIT, having a different opinion. Accordingly the revision order was quashed. (Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83 (SC) State Bank of India v. Asst. CIT (WP No. 271 2018 dt. 15-6-2018) (ITAT No. 3495/Mum/2018 AY 2013-14)
Marie Gold Realtors Pvt. Ltd. v. PCIT (Mum.) (Trib.) (UR)
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S.263 : Commissioner – Revision of orders prejudicial to revenue – Debenture redemption reserve – Original Assessment u/s. 143(3) dt. 30-12-2011 – Reassessment u/s. 143(3) r.w.s 147 dt 28-12-2016 – Revision order dt. 26-3-2018 – Revision is barred by limitation [S.115JB]
Allowing the appeal of the assessee the Tribunal held that the grounds of revision, were not the subject matter of the reopening done under S. 143(3) r.w.s 147. Hence, the revision order passed by the PCIT, was barred by limitation. Followed Ashoka Buildcon Ltd. v. ACIT (2010) 325 ITR 574 (Bom) (HC), CIT v. ICICI Bank Ltd. (2012) 343 ITR 74 Bom) (HC). Revision also quashed on change of opinion and merit. (ITA. No. 3530/Mum/2018/3531 dt 10-1-2019 (AYs 2009-10, 2010-11)
Housing Development and Infrastructure Ltd. v. PCIT (Mum) (Trib) (UR)
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S.263 : Commissioner – Revision of orders prejudicial to revenue – Cash credits – Share capital – AO had made enquiry by seeking information from Switzerland Tax Authorities through proper channel of FT & TR division of CBDT, for exchange of information so as to verify identity, source of funds and creditworthiness of holding company and its promoters – Revision is held to be not justified [S.68]
Commissioner held that while completing assessment, AO had only verified identity of share applicant, however, he had failed to verify second and third limb of transactions, i.e., genuineness of transactions and creditworthiness of foreign entity. Therefore he passed a revision order u/s. 263 setting aside assessment. On appeal Tribunal held that the AO had made enquiry by seeking information from Switzerland Tax Authorities through proper channel of FT & TR division of CBDT, for exchange of information so as to verify identity, source of funds and creditworthiness of holding company and its promoters and this information was made available by Swiss Authorities from financial statements of foreign company. Besides, assessee had explained source from where its foreign holding company had made investment which was assets received from its investors by way of subordinated and conditioned loan. Transaction cannot be regarded as bogus or sham transactions. Accordingly the revision order is set aside (AYs 2006-07 to 2010-11)
Bycell Telecommunications India (P.) Ltd. v. PCIT (2018) 193 TTJ 565 /90 taxmann.com 268 (Delhi) (Trib.)
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S.263 : Commissioner – Revision of orders prejudicial to revenue – Delay of 565 days is condoned – Voluntary offer of income in revised return – Dropping of penalty proceedings – Commissioner cannot substitute his view in revision proceedings for assessing officer view for dropping penalty [S.254(1), 271(1) (c)]
Tribunal held that when the assessees offered the income voluntarily for taxation and the source of acquisition of such jewellery was also explained before the AO as the gifts from relatives, friends and parents, which were accepted. After considering the explanation the penalty proceedings were dropped. The view taken by the AO for dropping the penalty proceeding initiated was one of the possible views supported by the judgment of the Supreme Court. Therefore, the Commissioner was not justified in substituting his view for that of the AO in dropping the penalty proceeding. (AY 2012-13)
S. Ashok Kumar v. ACIT (2018) 64 ITR 57 (SN) (Chennai)(Trib.)
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S.251 : Appeal – Commissioner (Appeals) – Powers – Once appeal is filed the said appeal cannot be withdrawn by the assessee- CIT(A) has to decide the appeal on merit – Delay of 116 days in filing the appeal before the Tribunal was condoned [S. 246A, 250(4), 253, 254(1)]
In the course of hearing before CIT(A) the assessee filed an application for withdrawal. CIT(A) dismissed the appeal as withdrawn. The assessee filed an appeal before the Appellate Tribunal stating that the withdrawal was without knowing the merit of the case and consequences. It was also contended that the CIT(A) is incompetent to dismiss the appeal in limine without deciding on merits. Appellate Tribunal following the jurisdictional High Court in CIT v. Premkumar Arjundas Luthra (HUF) (2017) 297 CTR 614 (Bom.) (HC) allowed the appeal of the assessee and set aside the matter to CIT(A) to decide on merit. Cases referred, CIT v. Raj Bahadur Hardutroy Motilal Chamaria (1967) 66 ITR 443 (SC), M. Loganathan v. ITO (2013) 350 ITR 373 (Mad.) (HC). Tribunal also condoned the delay of 116 days in filing the appeal before the Appellate Tribunal. (IT No. 2366 /M/2018 dt 16-1-2019 (AY 2009-10)
Deep Gears v. ACIT (SMC) (Mum.) (Trib.) (UR)
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S. 269T : Repayment of loans and deposits – Otherwise than by account payee cheque or account payee bank draft – Provision is applicable in case of adjustment of loan towards sale of flats – Payment of interest in cash provision is not applicable. [S.271E]
Tribunal held that provision is applicable in case of adjustment of loan towards sale of flats. However payment of interest in cash provision is not applicable. (AYs. 2012-13, 2014-15)
Golla Narayana Rao. v. ACIT (2019) 174 ITD 67 (Vishakh.) (Trib.)
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S.271(1)(c) : Penalty – Concealment – Charge is not specified – Inaccurate particulars of income – Levy of penalty on concealing particulars of income – Levy of penalty is held to be void ab initio
– Explanation 5A [S.153C, 274]
Allowing the appeal of the assessee the Tribunal held that initiation of penalty on one ground and levy of penalty on another ground is impermissible in law. The AO had issued a notice u/s. 271(1)(c) on the grounds of ‘furnishing inaccurate particulars of income’. The penalty order passed by the AO was on the grounds of ‘concealing particulars of income’. This was impermissible in law. Followed CIT v. Samson Perinchery (2017)) 392 ITR 4 (Bom) (HC) Tata Communications Ltd. v. DCIT in ITA. No. 3108/M/2016 dt. 21-2-2018. (Mum.) (Trib.) (ITA.No. 515/Mum/2016/514 & 513 dt. 19-12-2018)
Kesar Realty Pvt Ltd. v. DCIT (Mum) (Trib) (UR)
Kesar Housing and Development Co. v. DCIT (Mum.) (Trib.) (UR).
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S. 271AAA : Penalty – If no search has taken place in premises of assessee – All conditions laid down fulfilled – Deletion of penalty is held to be justified [S.132, 153C]
Dismissing the appeal of the revenue the Tribunal held that the provision of S. 271AAA of the Act were not applicable to assessee since said provisions were applicable to cases where search was conducted under S. 132 of the Act and no search was carried out at premises of assessee. Further from the perusal of assessment order it was evident that assessee had surrendered income, in section 271AAA for non-levy of penalty under said provisions. (AY 2012-13)
DCIT v. Jainco Developers Pvt. Ltd. (2018) 64 ITR 458 /52 CCH 575 (Delhi)(Trib.)
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S.271AAB : Penalty where search has been initiated – Assessee recorded profits from sale of commodities in ‘other documents’ maintained in normal course, which were retrieved during search, penalty could not be levied [S.44AA(2), 132]
Dismissing the appeal of the revenue the Tribunal held that since the assessee was not engaged in business or profession, he did not require to maintain books of account as per S. 44AA or S 44AA(2). Accordingly, the Tribunal held that since the impugned income was entered in ‘other documents’ maintained by assessee in normal course, which were retrieved during search, amount offered by assessee was beyond the scope of ‘undisclosed income’ defined in S. 271AAB. Accordingly the penalty was deleted. (AY 2013-14)
Dy. CIT v. Manish Agarwala (2018) 167 DTR 369 / 194 TTJ 346 (Kol.)(Trib.)
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S.271AAB : Penalty – Search initiated on or after 1st day of July 2012 – Disclosure of undisclosed income – Disclosed manner of earning of income and paid tax along with interest – liable to pay penalty at 10% and not at 30% [S.132(4)]
Tribunal held that when the assessee suo motu admitted undisclosed income and substantiated manner in which such undisclosed income was earned and had also paid tax together with interest, assessee is liable to pay penalty at rate of 10 per cent in terms of clause (a) of section 271AAB(1) but not under clause (c) at rate of 30 per cent of section 271AAB(1). (AY 2013-14)
ACIT v. Vishal Agarwal. (2019) 174 ITD 125 (Kol.) (Trib.)
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S.271D : Penalty – Takes or accepts any loan or deposit – Business of civil construction – Adjustment of loan towards sale of flat – Provision is held to be applicable levy of penalty is held to be justified [S. 269SS, 269T]
Tribunal rejected the contention of the assessee that cash was towards capital contribution of various projects was not supported by any evidence. Tribunal held that provision is held to be applicable in respect of adjustment of loan towards sale of flats, accordingly the levy of penalty is held to be justified. (AY 2012-13, 2014-15)
Golla Narayana Rao. v. ACIT (2019) 174 ITD 67 (Visakh.) (Trib.)
