HIGH COURT RULING (INCOME TAX)

Transcription

1 HIGH COURT RULING (INCOME TAX) 2013-TIOL-653-HC-KAR-IT CIT Vs Shri K Srinivasulu Reddy (Dated: July 17, 2013) Income Tax Act, Sections 260A, 269T & 271E - banking - creditor - cheque. - Whether when a case is remanded to the Revenue, any interference is warranted from the High Court in such a case TIOL-652-HC-KAR-IT CIT Vs State Bank of Mysore (Dated: July 11, 2013) Income Tax Act, Sections 10(10C), 35DDA, 263, Rule 2BA - capital expenditure - voluntary retirement scheme - public sector bank - Whether Rule 2BA is applicable to the provisions of section 35DDA TIOL-651-HC-ALL-IT M/s Shivji Palace Hotel & Club (P) Ltd Vs CIT & Another (Dated: August 20, 2013) Income Tax Act, Sections 131(3), 142(1) & (2), 148, 271(1)(b) & (c) - limitation period - seizure - company - books of accounts - successor directors. Whether the statutory limitation gets extended even when the attention of the High Court is not drawn to the facts that the assessment was going to be barred by time and that the High Court had not consciously applied its mind to accept the request or make such extension - Whether when certain documents were seized by the Revenue authorities and were not made available to the assessee would by itself render an assessment wrong irrespective of the fact whether such documents were relevant for assessment TIOL-650-HC-ALL-IT-LB CIT Vs Intezar Ali (Dated: July 26, 2013) Income Tax - Section 68 - ipsi dixit, ulterior motive, undisclosed income, agricultural land, deficiency of stamp duty, overwhelming evidence - Whether when the assessee has not only deposited the portion of the sales consideration received in cash in his bank account, but also informed the registering authority of the deficiency of the stamp in the sale deed, such deposited amount cannot be considered as income from undisclosed source in the absence of any strong evidence - Whether when the deposition of witness of the sale deed, the Bank Manager and the evidence filed with regard to valuation of the property were all in favour of the assessee, the burden of the assessee can be said to be sufficiently discharged - Whether if the AO still discards such overwhelming evidence produced by the assessee without any reasons, has he then exceeded his authority and framed assessment with ulterior motive.

2 2013-TIOL-649-HC-MAD-IT Altius Securities Trading (P) Ltd Vs DCIT (Dated: July 22, 2013) Income Tax - Section 111A - business income, mistake apparent on the face of the record, rectification, cash segment, futur and options segment, stock in trade - Whether merely because the rectification petition filed before the Tribunal was not challenged in the manner known to law, the order of the Tribunal would reach a finality - Whether the Tribunal in an appeal filed before it, can hold that the facts brought out by the AO remained disputed, without considering the findings rendered by the CIT(A) which had allowed the assessee's appeal - Whether if the Tribunal decides that the findings of the CIT(A) was without any material, nothing prevented the Tribunal from going into those facts and the findings to arrive at a finding based on the records - Whether when the specific case of the assessee was that the income arising from the sale of shares could not be treated as income from business, the Tribunal ought to have considered the same in detail to arrive at a factual finding TIOL-647-HC-DEL-IT Moser Baer India Ltd Vs DCIT (Dated: August 22, 2013) Income Tax - Sections 10A, 14A, 143(3), 148, 154, Rule 8D. Whether when Revenue had issued notice against the assesssee for reopening of assessment on the ground that deduction under Section 10B had resulted in underassessment of the assessee's income, and the deduction on account of deferred revenue expenditure being expenditure on technical know-how, was inadmissible and should have been disallowed, it amounted to tangible material which had live link to validate a legitimate formation of opinion. Also see analysi of the Order 2013-TIOL-646-HC-DEL-IT Replika Press Pvt Ltd Vs DCIT (Dated: August 5, 2013) Income Tax Act, Writ - Sections 10B, 147, 148 & text books - printing - constructive exports - export oriented unit - audit - change of opinion. Whether when the AO had formed an erroneous legal opinion in the original assessment order, the case can be made subject of reassessment proceedings under Section 147 or whether the only available remedy is to initiate proceedings under section Whether when new facts, material or information come to the knowledge of the AO, which were not on record and available at the time of the assessment order, the principle of change of opinion will apply 2013-TIOL-645-HC-DEL-IT Surinder Madan Vs ACIT (Dated: August 22, 2013) Income tax Section 30(a)(i) Capital or Revenue Expenditure Whether the expenditure incurred for replacing entire floor of factory and office is capital expenditure and cannot be treated as revenue in nature.

3 2013-TIOL-643-HC-ALL-IT CIT Vs M/s Gail (India) Ltd (Dated: August 19, 2013) Income tax - Sections 139A(5A) & (5B), 194C, 194J, 203, 272B, 273B, Rules 114B to 114D - Form 16A, Form 26C, TDS Certificate, non-mentioning of PAN, penalty, reasonable cause for failure - Whether penalty u/s 272B is discretionary - Whether penalty can be imposed merely because it is lawful to do so - Whether penalty u/s 272B is to be imposed on the deductor even if the fault of non-furnishing of PAN lies with the deductee - Whether when the deductee has furnished PAN details but the deductor has failed to mention the same in Form 16A, it warrants penalty u/s 272B. Also see analysi of the Order 2013-TIOL-642-HC-ALL-IT Mahak Singh Vs CIT & Another (Dated: August 12, 2013) Income Tax Act, Sections 143(1), 143(3), 269SS, 271(1)(c), 271B, 271D & 273B, Circular no 387 of mortgage - property - loan - cash transactions - bona fide transaction - reasonable causes. Whether even when the transaction is established to be genuine and bonafide, it may still violate the provisions of Section 269SS and thereby warrant penalty proceedings under the Act - Whether the Tribunal is the last forum to examine whether the assesse had "reasonable cause" for not complying with the provisions of Section 269SS in order to avoid the penalty proceeding under section 271D TIOL-641-HC-DEL-IT CIT Vs M/s Prakash Tubes Ltd (Dated: August 21, 2013) Whether the assessee is entitled to carry forward its losses when its taxable income had been assessed on the basis of book profits under Section 115-J and not under the normal provisions - Whether when an order by the Revenue authorities has attained finality, the same can be altered by the Appellate Authority in a subsequent appeal by the Revenue TIOL-640-HC-DEL-IT CIT Vs Airline Allied Services Ltd (Dated : August 8, 2013) Income tax - Section AS-12 Accounting Standards, Government grant - Whether when the assessee is sanctioned a grant by the Government for operational purposes for a period of five years, the entire sum is to be treated as receipt in the same year - Whether any fault can be found with the assessee compling with the AS-12 Accounting Standards - Whether when inventories amount is reflected in the Annual Report, any addition is warranted in the same regard. Also see analysi of the Order

4 2013-TIOL-639-HC-DEL-IT CIT Vs Elegant Travels Pvt Ltd (Dated : August 5, 2013) Income Tax Act, Sections 158BD, block assessment - natural justice - reassessment - Whether the AO can reopen assessment even if the issue was not remanded by the Tribunal, which set aside the CIT(A) order on merit TIOL-638-HC-KAR-IT M/s Unique Shelters Pvt Ltd Vs UoI (Dated : July 31, 2013) Income Tax Act, Sections 10(10C), 35DDA, Rule 2BA - capital expenditure - voluntary retirement scheme - public sector bank - Whether Rule 2BA is applicable to the provisions of section 35DDA TIOL-637-HC-AHM-IT Vaghjibhai S Bishnoi Vs ITO (Dated : July 9, 2013) Income tax Writ - Sections 139(1), 143(1), 154 Whether when the TDS credit is reflected in 26AS, AO is expected to give the credit even without waiting for an application by the assessee u/s Whether in an electronic regime, Revenue is expected to be more proactive in facilitating refunds of TDS Credit reflected in 26AS. Also see analysi of the Order 2013-TIOL-633-HC-MUM-IT Hiranandani Foundation Vs JDIT (Dated : August 12, 2013) Income Tax Act, Writ - Sections 12A(b), 12A(1)(b) & 142 (2A) - related party transaction - trust - statutory auditor - special audit - Whether a special audit is warranted under section 12A(b) when the assessee had failed to report its related party transactions in its audit report and the assessee is involved in relatively large number of transactions - Whether prima facie this would satisfy the condition of complexity of the accounts as required by section 12A(b). Also see analysi of the Order 2013-TIOL-632-HC-KAR-IT CIT Vs Sri Manish Kumar Bothra (Dated : July 4, 2013) Income tax - Sections 154, 245(4) - Whether when the Settlement Commission has considered only a part of the amount as explained by the sister concern and the balance amount is considered as relating to assessee, ITAT has wrongly deleted the addition in the hands assessee who himself offered the amount in the return of income filed.

5 2013-TIOL-629-HC-MAD-IT M/s S M J Housing Vs CIT (Dated : July 1, 2013) Income Tax - Sections 143(3), 153A(a), 153C, 271(1)(c). Whether when the assessee's return was not yet due on the date of the search conducted on the premises of its partner, the Revenue is justified to initiate penalty proceedings as assessee's return was filed subsequent to the search - Whether when penalty proceedings were initiated against the assessee firm, Explanation 5 to section 271(1)(c) was applicable when there were no materials seized during the search indicating deemed concealment of income by the assessee. Also see analysis of the Order 2013-TIOL-628-HC-MUM-IT CIT Vs M/s Lark Chemicals Ltd (Dated : August 6, 2013) Income Tax - Sections 143, 147, 148, keywords - revisionary jurisdiction, limitation period, time barred - Whether revisionary jurisdiction can be exercised to reassess issues which have already been admitted by virtue of an intimation u/s 143(1) Whether revisionary jurisdiction can be exercised beyond the prescribed limitation period when the assessee has defrauded the State Whether the Tribunal or the High Court can ignore the statutory limitation period for exercising revisionary powers Whether reassessment order can be passed on issues which were not subject matter of consideration while passing the reassessment order but a part of the original assessment order TIOL-627-HC-DEL-IT CIT Vs Pearl Intercontinent al (Dated : August 6, 2013) Income Tax Act, Sections 69C, 80HHC & 260A - manufacturing expenses - sister concern - Whether when a question of law has been determined on merits by the appellate authorities in earlier assessment years, the appeal of the Revenue on the same transaction is sustainable TIOL-626-HC-MAD-IT ADIT Vs A Khader Mohideen (Dated : July 29, 2013) Income Tax Act, Section Indian Penal Code - Section 41(2) - Code of Criminal Procedure - Section seize - cash- magistrate - interim order - Whether the magistrate has the jurisdiction to pass an interim order indicating partial return of money to the Revenue in a case of seizure of unexplained cash amount from an assessee TIOL-623-HC-MAD-IT

6 CIT Vs J Mahalingam (Dated : July 8, 2013) Income Tax - Sections 2(47)(v), 45 - Transfer of Property Sections 5, 53-A keywords "patta", "part performance", "trustee", "professional income", "capital gains tax" - Whether when the sale agreement makes it very clear that the transfer of 3 grounds of land to the assessee, an advocate by profession, was intended as by way of consideration for securing patta and lay-out, the income earned on sale of such plots by the assessee amounts to professional income - Whether when the plots were given to the assessee as part performance for his services and not in the capacity of advocate, the same is subject to capital gains tax Whether the mere incident of the assessee being a practicing advocate, he is disentitled to claim the receipt as income assessable under capital gains. Also see analysis of the Order 2013-TIOL-622-HC-DEL-IT M/s Microsoft Corporation (I) Pvt Ltd Vs DCIT (Dated : May 23, 2013) Income Tax Sections 43B, 143(3), 147, 234B Whether if there is a full and true disclosure in the course of the assessment proceedings, that will have to be regarded as a disclosure for the purpose of the proviso to Section 147 of the said Act Whether AO would not be entitled to reopen the assessment on the self made computational error in the original assessment Whether merely having a reason to believe that income had escaped assessment is not sufficient for reopening the assessment beyond the four year period TIOL-619-HC-DEL-IT Select Vacations Pvt Ltd Vs ITO (Dated : July 31, 2013) Income Tax Sections - 147, 148, keywords - reasons to believe, nexus - Whether reassessment provisions are wide, but not plenary Whether when the AO in the first or original round of assessment was fully conscious and aware of the method of accounting followed by the assessee, cannot later raise a question that due to such accounting practice, there has been an under assessment of income Whether reassessment proceedings are warranted when the AO in response to the said audit objection has informed that he has fully examined the difference in the value on which TDS was deducted and the income declared during the course of assessment proceedings and has stated there was no loss of revenue Whether there should be a link and nexus between the reasons and the evidence/material available with the AO for initiation of re-assessment proceedings Whether reopening of assessment can be sustained, when there is failure on the part of the AO to examine the original assessment record and ascertain the method of accounting adopted by the assessee 2013-TIOL-617-HC-DEL-IT CIT Vs Hcil Kalindee Arsspl (Dated : July 29, 2013) Income Tax Act, Sections 80IA, 80IA(13), 271(1)(c) - Forms No 3CB & 3CD, works contract - penalty - furnishing of inaccurate particulars - CA report. Whether no penalty u/s 271(1)(c) is warranted even if assessee makes false claim of Sec 80IA benefits on sub-contracted work and also furnishes a CA Certificate in this regard - Whether the onus of establishing that the explanation was bonafide and the facts and

7 material relating to computation of his income disclosed, is on the assessee, so that penalty is not attracted - Whether penalty for concealment can be imposed and is justified when interpretation or claim of the assessee is rejected. Also see analysis of the Order 2013-TIOL-616-HC-GUW-IT CIT Vs Jugal Kishore Mahanta (Dated : May 9, 2013) Income Tax Act, Sections 33B, 260A, 268 & 271B, Instruction No 05/ tax effect - Whether, in view of the CBDT Instruction for fixing monetary limnits, there is any inherent limitation on the Revenue's right to file appeal under section 260A read with Sec 268A TIOL-615-HC-ALL-IT M/s Jai Guru Jewellers Vs UoI (Dated : July 15, 2013) Income tax Act, Writ - Sections 245D (4A)(I) & 245HA (1) (iv) - Settlement - abatement of proceedings. Whether the amendments made by the Finance Act, 2007 in Chapter XIX-A of the Income Tax Act, 1961 are ultra vires the Constitution of India - Whether Bombay HC decision in Star TV News case is the correct law TIOL-614-HC-MAD-IT S Muthuraja Vs CIT (Dated : July 22, 2013) Income Tax Act, Sections 50C(1) & (2) - Whether the AO should refer to the DVO, the valuation of a capital asset, when the assessee rejects the AO's valuation TIOL-613-HC-MAD-IT CIT Vs M/s Relco Pvt Ltd (Dated : July 25, 2013) Income Tax Act, Section 10B - EOU - MOU - chips - foreign collaborators. Whether an assessee, recognised as an EOU, can be denied the exemption under section 10B only when there is conclusive evidence that the assessee had violated the conditions of the licence TIOL-605-HC-MAD-IT CIT Vs M/s Deco De Trend (Dated: July 2, 2013) Income Tax Section 10B - keywords - "export", "splitting", "manufacture", "laquering", "common parlance", "potpourri", "dried plants" Whether the activities of moulding, cleaning, grading and undertaking a detailed line of processing for exporting drie d plants and potpourri involves any manufacturing Whether deduction

8 u/s 10B can be claimed, when the final product was created through an irreversible process giving rise to a product commercially different from the raw materials Whether in the absence of specific definition of manufacture in section 10B, common parlance can be relied on Whether the mere presence of three of the Directors of the company as partners in the assessee firm, by itself, would make the firm as one, split up from the company, although they dealt in different line of products Whether further when some workers are working both for the company and the assessee firm, it suggests that the firm was formed through splitting of the company. Also see analysis of the Order 2013-TIOL-604-HC-ALL-IT Chief Treasury Officer Vs UoI (Dated: March 22, 2013) Income tax - Writ - Sections 133A, 194H, 221(1), 221(1A) - UP Stamp Rules - Rules 157, Indian Contract Act, Sec commission - brokerage - stamp papers - principal to principal - principal to agent - purchase - trade discount - Whether trade discount is nothing but Commission and the same is liable to TDS u/s 194H - Whether discount offered to licensed stamp vendors by the State Government is Commission and TDS obligation arises in such a case. Also see analysis of the Order 2013-TIOL-603-HC-KAR-IT Ms Latha Ramachandra Inamdar Vs DCIT (Dated: July 23, 2013) Income Tax Act, Sections 2(47) & 54F - immovable property - agricultural land - short term capital gains - STCG. Whether Sec 54F benefits can be claimed on transfer of agricultural land only on the basis of advance payment for a period of one year TIOL-601-HC-GUW-IT CIT Vs Williamson Tea (Assam) Ltd (Dated: May 22, 2013) Income Tax - Sections 37, 271(1)(C) - "foreign travel expenses", "business expenditure", "commercial expediency", "wholly and exclusively", "necessarily", "legal obligation", "publicity expenditure " - Whether when an expenditure is claimed to have been incurred by an assessee for promotion of his business, there is a legal obligation to prove that the expenditure was necessary for promotion of his business - Whether for the allowability of an expenditure u/s 37, it is relevant as to whether the benefit, expected to be accrued out of an expenditure incurred, is to accrue immediately or after a lapse of time, whether directly or indirectly - Whether the expression "wholly and exclusively", appearing in Section 37, does not mean necessarily - Whether expenditure incurred on foreign visits by directors and garden managers for promoting the sales of tea can be questioned, merely because the assessee has appointed a selling agent abroad - Whether expenditure incurred in connection with the travels of the wives of the tea estate managers can be allowed, when it is customary in the European countries for the wives to accompany their husbands - Whether the Tribunal, as a fact finding authority, having come to the finding that the expenditure, on the visits by the representative of the company abroad and expenditure as well as the visits to India by the London based officials of the assessee was for business purpose, the same cannot be again interfered with in an appeal - Whether

9 sponsorship towards centenary celebrations of clubs is allowable as publicity expenditure, when the assessee's banners, as sponsors of the events, were displayed at the said functions - Whether it is for the assessee to decide where and in what manner publicity of its business is to be done and what benefit it will derive for its business by making such publicity. Also see anlysis of the Order 2013-TIOL-600-HC-MUM-IT Satish Balan Vs UoI (Dated: July 30, 2013) Income Tax Sections 269UD Chapter XXC, keywords - "acquisition of property", "fair market value", "FSI" - Whether the High Court can exercise its writ jurisdiction in respect of orders passed by the appropriate authority under Chapter XXC of the Income Tax Act, when it finds a flaw in the decision making process of the authority Whether it is an appropriate case of flaw in the decision making process, when the authority has repeatedly passed the same assessment order in complete disregard to the instructions of the Court and valuation reports, in an acquisition proceeding pending since last 18 years Whether such action of the authority is a fit case of non application of mind, when it has done a mere cut copy paste of reasons for passing the same assessment order, every time the matter was remanded by the High Court Whether, therefore, the order passed by the authority for acquisition of property u/s 269UD of Chapter XXC of the Income Tax Act without supplying any reasons for exercise of preemptive right of purchase, is absolutely incorrect - Whether setting aside such non reasoned order is the only possible and final remedy, when remanding the proceedings to the authority would yield no purpose TIOL-599-HC-ALL-IT CIT Vs M/s Vector Shipping Service Pvt Ltd (Dated: July 9, 2013) Income Tax Act, Sections 40(a)(ia), 194C & 260(A) - TDS - Whether in case of failure to deduct tax at source disallowance can be made only if the tax is payable and not where tax is already paid TIOL-598-HC-MAD-IT M/s AKK Specific Family Trust Vs CIT (Dated: July 8, 2013) Income tax Act, Sections 161(1) & (4), 164(1), 167B - trust - association of persons - AOP - beneficiaries - Whether a question of law can be answered by the High Court even before the primary question of authenticity of the assessee's existence is to be verified TIOL-597-HC-MAD-IT CIT Vs M/s Tenneco RC India Pvt Ltd (Dated: July 1, 2013)

10 Income Tax Act, Sections 36(1)(iii) & 263. Whether the exercise of jurisdiction under section 263 is justified when the AO had failed to determine the question of commercial expediency on the loan forwarded by the assessee to its subsidiary company.