THE CHAMBER OF TAX CONSULTANTS

THE CHAMBER OF TAX CONSULTANTS 3, Rewa Chambers, Ground Floor, 31, New Marine Lines, Mumbai - 400 020 ltel.: 2200 1787 / 2209 0423 lfax: 2200 2455 le-mail: office@ctconline.org lwebsite: www.ctconline.org STUDY GROUP MEETING Thursday, 4 th August, 2016 Consultair Investments Pvt. Ltd, 20 Down Town Hall, Eros Theatre Bldg. Churchgate, Mumbai. CA Anish Thacker SUPREME COURT DECISIONS 1) CIT v. Citibank N. A. (Civil Appeal No. 1549 of 2006) dated 12 Aug 2008 Interest Paid for broken period, whether to be considered as part of purchase price or to be considered as revenue expenditure of the year of purchase of securities. 2) CIT v. Jyotsna Holdings P. Ltd. (Civil Appeal No. 1774 of 2006) decided on 8 March 2016 Interest u/ s 244 (IA) payable for the period between the date of the assessment order and date of adjustment of refund against another year s demand. 3) CIT v. Trans Asian Shipping Services P. Ltd. (Civil Appeal No. 5869 of 2016) decided on 5 July 2016 Income from slot charter, taxability under Chapter XIIG (Tonnage Tax Scheme) HIGH COURT DECISIONS 4) Principal CIT v. C Gopalaswamy [2016] 384 ITR 307 (Karn) Section 54F exemption allowable if investment in property to be constructed made within three years, even if actual construction completed after three years. 1

5) CIT v. Ramaniyam Homes P. Ltd. [2016] 384 ITR 330 ( Mad) Waiver of principal amount of loan, taxable as income u/ s 28 (iv) 6) CIT v. Goodwill Theatres P. Ltd. (ITA No 2356 of 2013) decided on 6 June Revenue cannot seek to appeal against the Tribunal s order which followed a Tribunal decision which was not challenged by it. 7) CIT v. TCL India Holdings P. Ltd. (ITA No. 2287 of 2013) decided on 12 July Tax Department must be properly represented before the Courts to enable Courts to function properly. 8) H. R. Mehta v. ACIT ( ITA no 58 of 2001) decided on 30 June Reassessment based on appraisal report in case of a third party is invalid. 9) Mrs. Bindiya H. Malkani v. CIT ( ITA No. 75 of 2001) decided on 29 June While computing long- term capital gains on sale of immovable property it must be seen if the assesse is in possession thereof as owner for more than 36 months. 10) Safari Mercantile P. Ltd. v. ITAT ( Writ Petition No. 2102 of 2008) decided on 23 June In a Miscellaneous Application, the Tribunal cannot decide on the merits of a case, but it can only rectify the mistake apparent from the record. TRIBUNAL DECISIONS 11) QPro Infotech Ltd. v. DCIT (ITA No. 2197/Mum/2013) decided on 13 July 2016 (Mum) 2

Penalty u/ s 271(1)(c) cannot be mechanically levied. AO has to come to a finding that conditions for levy of penalty are satisfied. 12) Tata Industries Ltd. v. ITO ( ITA No. 4894/Mum/2008) decided on 20 July 2016 (Mum) Interest paid for acquiring shares of subsidiaries and of associates with controlling interest, deductible u/ s 36 (1)(iii) 13) Quantum Advisors P. Ltd. v. DCIT (ITA No. 3418/Mum/2015) decided on 15 July 2016 (Mum) Advertisement expenditure incurred in the capacity as sponsor of a Mutual Fund, deductible u/ s 37(1) 14) Stock Traders P. Ltd. v. ACIT (ITA Nos. 2802, 2803 & 2808/Mum/2003) decided on 5 April 2016 (Mum) Payment made to a foreign company owned by the assesse s director, for consultancy fees, not deductible u/ s 37(1) 15) SBI DHFI Ltd. v. ACIT ( ITA No. 7433/Mum/2013) decided on 30 June 2016 (Mum) Penalty u/ s 271(1)(c) can be levied if the taxpayer s claim is not at all plausible. 16) RKP Company v. ITO ( ITA No.106/RPR/2016) decided on 24 June 2016 (Raipur) In case of a divergence of views by two non- jurisdictional High Courts, the Tribunal being a lower judicial authority cannot choose views of one High Court on its perceptions about the reasonableness of the respective viewpoints. 17) Urvi Chirag Sheth v. ITO ( ITA No.630/Ahd/2016) decided on 31 May 2016 (Ahd) Interest awarded by the Court on accident compensation, is not income and not taxable in the hand of the recipient. 3

18) YKK India P. Ltd. v. A CIT ( ITA No. 238/Del/2016) decided on 25 July 2016 ( Del) In the garb of disallowing expenditure u/ s 37 (1), the AO cannot usurp the power of the TPO to determine the Arm s Length Price ( ALP). As a corollary, where the TPO has determined the ALP, the AO cannot disallow the expense on ground of the unreasonableness of the amount thereof. OTHER DECISIONS 19) CIT v. Lok Housing Construction Ltd. [2016] 70 taxmann com 2 (5C) and CIT v. Lok Housing & Constructions Ltd. [2015] 58 taxmann com 179 (Bom) Revision of return in response to notice u/ s 142 ( 1) to exclude income not accrued whether valid. 20) Prabhat Construction Co. v. CIT [2016] 137 DTR (Pat) (Trib) 318 Can disallowance u/ s 40 ( a) ( ia) be made when income is computed on estimated basis u/ s 145A( 3) r. w. s. 144 21) LandsEnd Co. Op. Hsg. Scty. v. ITO [2016] 46 CCH 52 (Mum)(Trib) Deduction u/ s 80P (2)(d) in respect of interest earned on deposits with cooperative banks. 22) Yadwinder Singh v. ITO [2016] 48 ITR (Trib) 328 (Asr) No addition u/ s 68 can be made in case of an assessee who does not maintain books of account. 23) Dr. Arvind S. Phadke v. Addl CIT [2014] 46 taxmann com 335 (Pune) Investment of consideration for sale of property within six months of handing over of possession, section 54EC exemption available. In case of assignment of development rights to a developer for alternate accommodation was not part of consideration for the transfer of such rights and therefore not taxable. 4

24) Hindustan Plywood Co. v. ITO 2016- TIOL- 547- ITAT- DEL Second proviso to section 40 (a)(ia), whether curative and having retrospective effect. 5