THE CHAMBER OF TAX CONSULTANTS

THE CHAMBER OF TAX CONSULTANTS 3, Rewa Chambers, Ground Floor, 31, New Marine Lines, Mumbai - 400 020 Tel.: 2200 1787 / 2209 0423 Fax: 2200 2455 E-mail: office@ctconline.org Website: www.ctconline.org CA DINESH R SHAH Study Group Meeting RECENT DIRECT TAXES JUDGEMENTS 30/03/2017 1. Business Expenditure Penalty, fine etc. Shyam Sel Ltd V/s Dy CIT (Calcutta HA) (2017) 148 DTR 167 (52) Payment for failure to install pollution control device payment recovered from the Assessee by the State Pollution Control Board for the Assessee s failure to install pollution control device within the prescribed time was expenditure incurred for the purpose of business not hit by explanation 1 to Se.37 (1). 2. Income- Cash Credit:- Lakshmanan Magendiran V/s ITO (2017) 148 DTR (Madras H.C) 158 (51) Opportunity of being heard vis-à-vis deposits in bank account- No opportunity was given to the assessee to explain the amount standing to the Assessee s credit in a bank in a bank account, hence order of A.O making addition by recourse to Se. 115BBE was not sustainable. 3. Intangible Asset: Goodwill:- Hinduja Foundries Ltd V/s Asst CIT (2017) 148 DTR (Tribunal) Chennai A) 158 (51) Depreciation is allowable on the payment relatable to goodwill. 4. Applicability of Explanation to Se.73 vis-à-vis derivative transactions. Sucon India Ltd V/s Asst. CIT Del G. (2017) 148 DTR (Tribunal) 145 (51) Loss Incurred on derivative transactions is not a speculative Loss and is to be adjusted against business Income. 1

5. Depreciation. Additional Depreciation under Se.32 (1) (iia) Asst. CIT V/s D.A Jhaveri (2017) 148 DTR (Mumbai Tribunal) 132 (50) Cutting and Polishing of diamonds: Activity of cutting and Polishing of diamonds amounts to manufacture eligible for additional depreciation u/s 32 (1) (iia) 6. Income- Cash Credit: Genuineness:- Hero s Education and Welfare Society V/s Asst. CIT (2017) 148 DTR (Indore ITAT) 119 (50) Assessee- Society is eligible for exemption under Se. 10 (23c) (iiiad). Further, assessee has filed confirmations of the creditors explaining the source of source, who in turn, obtained loans from the persons, who are also facing court cases for non return of such loans. That apart the amount has been invested by the society in land and building- Therefore, addition made on account of unexplained cash credit is deleted. 7. Charitable Trust- Registration Under S.12A:- Cancellation under s.12aa(3):- CIT V/s Institute Management Committee of Industrial Training Institute. (2017) 148 DTR (Bombay H.C) 74 (49) Cancellation of the Registration on the ground that the Institutions do not satisfy the meaning of charitable purpose as given in Se.2 (15) was not justified. Excise of power u/s 12AA(3) can only be done. If at least one of the two conditions specified therein- i.e. activities of the trust or is not genuine or activities of the trust is not being carried on accordance with the object of the trust are found satisfied. 8. Recovery: Attachment of immovable Property: Validity. Prajakta M.Shah V/s TRO (2017) 148 DTR (Gujarat H.C) 101 (49) Petitioner being a bonafide purchaser of property for consideration without notice of arrears of tax or erstwhile owners, attachment of such property by the Department was invalid. More so, when the property was under mortgage with bank long before service of notice of arrears on defaults. 9. Applicability of Se.50C vis a vis of Development Rights Voltas Ltd V/s ITO (2017) 148 DTR Mumbai (Tribunal F) 84 (48) Term Capital Asset mentioned in Se.50C. Specifically refers and confines its meaning to land or building or both sale of developments right in land is not covered by Se.50C. Assessee having transferred development rights in the land, to the developer and not the land itself provisions of Se.50C can not be applied for computing the Capital gains:- 2

10. Rent and Lease Rent or lease premium:- Rajesh Projects (India) (P) Ltd V/s CIT (2017) 148 DTR (Delhi H.C) 33 (47) Amounts paid as part of the lease premium in terms of the time- schedule(s) to the lease deeds executed between the assessee and Gnoida- (Authority) or biannal or annual payments for a limited / specific period towards acquisition of lease hold rights are not subject to TDS being capital payments. However, amounts constituting annual lease rent, expressed in terms of percentage (e.g. one percent) of the total premium for the duration of the lease, are rent, and therefore subject to TDS. 11. Income from undisclosed source: Addition under Se.69C: Alleged Bogus Purchases:- Asst CIT v/s Mahesh K. Shah (2017) 148 DTR (Mumbai B)O Tribunal] Page 1 (46) Assessee having filed copies of purchase Invoices. Extracts of Stock Registrar Ledger Showing entry/ Exist of materials copies of bank statements evidencing that the payments for the impugned purchases were made through normal banking channels and the A.O having not doubted the sales effected by the assessee, said purchases could not be treated as bogus and, therefore, A.O was not justified in making addition under Se.69C by merely relying on some information received from the sales tax Department. 12. Se.14A: Share hold as Stock in trade: Principal CIT V/s State Bank of Patiala. (2017) 147 DTR (P& H High Court) 290 Se 14A was not applicable to the assessee bank whose dividend or interact Income was earned from Shares and Securities held as stock in trade. 13. Share hold as Stock in trade:- CIT V/s. GKK Capital Markets (P) Ltd. (2017) 147 DTR (Calcutta H C) 330 In view of the clear finding of fact regarding the exempt Income claimed treated to be business Income and shares held by the assessee having been treated as Stock- in trade. 14. Capital gains Agricultural Land:- How to measure distance. CIT V/s Smt. Shakunthala Rangrajan (2017) 147 DTR (Madras H.C) 220 Measurement of distance under 2 (14) (iii) (b) For the purposes of Se 2 (14) (iii) (b) distance between agricultural land and nearest municipal council has to 3

be measured only through the public access road and not in a straight line or horizontal plane. 15. Income from undisclosed Sources. Addition on money Parmanand Builders (P) Ltd. V/s CIT (2017) 147 DTR (Bombay H.C) 248 On- money received on sale of flat vis-à-vis accounting method. Where the assessee offered on-money for last two years on the basis of project completion Method but the A.O spread over the on money to eight years of project and also adopted a different rate of on-money assessed by AO being Rs.1,25,78,000 Rs.66,00,000 offered by assessee stood. Substituted and could not be assessed in addition. 16. TDS Credit for TDS. CIT V/s Ganesh Narayan Brijlal Ltd. (2017) 147 DTR (Calcutta H.C) 136 Income passed on to Co-owners. Assessee owner of part of building after deduction of tax at source and paying the share of Co. owners inclusive of amount of TDS is entitled to benefit of entire tax deducted at source through it offered for tax only its own share of rental Income.. 17. Account Rejection. Deluxe Enterprises V/s ITO (2017) 147 DTR (Tribunal) (Chd) 247 Estimation of net profit,. Assessee having neither produced books of Account despite repeated opportunities nor furnished any reasonable basis for estimating the net profit, nor demonstrated with comparable instances as to how The net profit rate of 5 percent estimated by the A.O was incurred it has to be held that the same is not unreasonable and therefore the impugned addition made by applying the said net profit is upheld. 18. Disallowance u/s 40 A (3) Anurag Radheshyam Attal V/s ITO (2017) 147 DTR (Tribunal) (Pune ITAT) 207 Applicability of 6DD (K) In view of report of A.O made to CIT (A) that cash payment was made by assessee to formers through four persons whom he was paying commission CIT (A) was justified in deleting the addition., 4

19. Income tax Authorities: Territorial jurisdiction of ITO. Deluxe Enterprises V/s ITO(2017) 147 DTR Tribunal (Chd) 247 Place of business vis-à-vis filing of return- ITO at SOLAN had requisite jurisdiction to make assessment of the assessee firm by virtue of Se 124 (1) as it is carrying on business only at SOLAN. Merely because the assessee has given address at Delhi and files return there. The territorial jurisdiction is not conferred on the AO located in Delhi. 20. Re-assessment validity:- Absence of notice u/s 143 (2). Dy CIT V/s Indo American Hybrid Seeds India (P) ltd. (2017) 147 DTR (Tribunal) (Bangalore C Bench) 265 A.O having given categorical finding in the assessment order that notice u/s 143 (2) was issued and the assessee having participated in the assessment proceedings and raised no objection before the completion of the assessment about non- Service of notice under Se 143 (2) the Provision of Se 292 BB are squarely applicable and therefore, the assessee is precluded from taking this objection at a later stage. There was valid issue and service of notice u/s 143 (2). 21. Return Revised Return:- Validity. Original Innovative Logistic India (P) Ltd V/s Jt. CIT (2017) 147 DTR (Chennai) A 89. Revised filed by assessee to claim Loss from conversion of Stock of shares from Investment to Stock in trade as business loss instead of Loss under head Capital Gains was valid when the auditor and chartered Accountant appeared before A.O and confirmed such conversion through in Audit report, against relevant column No 12A. Such conversion was shown as NIL but in the notes on account it was stated that the assessee had converted certain Investment in to stock in trade. 22. Charitable Purpose registration of trusts:- Chamber of Commerce Trust V/s CIT (2017) 54 ITR (Tribunal) 19. Cancellation of Registration Commissioner not considering explanation given by assessee in respect of donations. Commissioner not verifying property whether function hall used only for general Public or particular section of people CIT to verify donation received and utilization of function hall. 23. Co-operative Society Special deduction. K. Service Co-operative Bank V/s ITO (2017) 54 ITR Tribunal 6. Cochin. Primary agricultural Credit Society entitled to special deduction u/s 80P. Belated filing of return does not disentitle society to benefit of deduction. 5

24. Deduction of tax at source:- Condition precedent for provisions to apply: Apollo tyres Ltd V/s Dy CIT (2017) 54 ITR (Tribunal Delhi) Page1. Identification of person from whose account Income tax deducted at Source- Person to whose account credit for such tax deducted at source to be given not identifiable- Provisions of tax deduction at source not applicable- AO to verify whether payee identifiable and amount payable to him ascertainable. 25. Exemption: L Charitable Trust. Momjeet Kaur Memorial Premier Institute of Education V/s ITO. (2017) 54 ITR Tribunal (Delhi) 3 Capital asset built with borrowed fund generating Income from enabling trust to perform charitable activities- Provisions applicable for computing Income from House Property not attracted while determing Income of trust for purpose of claiming exemption u/s 11 Expenditure incurred on blood donation repayment of Loan and depreciation amounted to application of Income for Charitable purpose. 26. Income tax Survey:- Additional Income:- Narendra Kothari (Late) V/s ITO (2017) 54 ITR Tribunal (Chennai Bench) 30 No evidence with A.O other than letter from purchaser. Third Party evidence without opportunity to Cross examine. A.O accepting offer made by assesse3e in his statement during course of Survey- can not enquire with purchaser- Addition not sustainable Se.133A. 27. Attachment and sale of Property:- Arvindkumar Kuberbhai Patel V/s Deputy CIT (2017) 391 ITR (Gujarat H.C) 103 Recovery of tax Transfer to defraud Revenue Bonafide purchase without notice and for adequate consideration order declarating purchase void in breach of principles of natural justice and is to be quashed. 28. Block Assessment: Search and Seizure. Notice failure to Serve notice u/s 143 (2):- Effect (?) Kiran Prakshan V/s Department of I.T. (2017) 391 ITR (Patna H.C) 31 Commissioner (Appeal) upholding assessment relying on Supreme Court decision on different subjects and holding decision in Asst. CIT V/s Hotel Blue Moon (2010) 321 ITR 362 per in curium- untenable order to be set aside. 6

29. Cash Credit Share Application Money:- Principal CIT V/s N.C. Cables Ltd. (2017) 391 ITR Delhi (HC) 11 Assessee furnishing documents to evidence genuineness of transaction and identity and credit worthiness of parties - failure by A.O to conduct adequate and proper inquiry in to materials while invoking 68. No addition can be made under Section 68. 30. C.B.D.T Circular:- Karnataka State Beverages Corp. Ltd V/s CIT (2017) 391 ITR (Karnataka H.C) 185 Circular binding on Income tax authorities. 31. Concealment of Income or furnishing in accurate particulars thereof:- Penalty:- Principal CIT V/s Atotech India Ltd (2017) 391 ITR (P&H) 117 Penalty set off of Loss- Assessing claiming set off under different head in course of assessment proceedings- Appellant Tribunal not finding anything clandestine in manner of seeking opinion from Chartered Accountants does not amount to furnishing inaccurate or concealment of Income. 32. Higher compensation received on compulsory of agricultural land:- Balkrishnan V/s Union of India. (2017) 391 ITR (Supreme Court) 178 Compensation received on compulsory acquisition of agricultural land. Notification under section 4 and declaration u/s 6 of Land acquisition Act issued in respect of assessee s Land Acquisition Act issued in respect of assessee s land Award passed thereafter by collector fixing compensation Assessee entering into negotiations for higher compensation Does not change character of transaction to voluntary sale. Assessee entitled to exemption I.T Act 1961 Se.10 (37). 33. Hindu Undivided Family Gopal and Sons (HUF) V/s CIT (2017) 391 ITR (SC) Page 1. Deemed Dividend. Loan to shareholder- Payment made by family for purchase of shares constituting substantial interest in company share certificates issued in name of karta. Karta having more than 20 percent interest in and entitled to not less than 20 percent of Income of family Loan from company is deemed dividend in hands of family. 7

34. Income tax General Principles:- Kanaiyalal Dhanshukhlal Sopariwala V/s District Valuation Officer. (2017) 391 ITR (Gujarat H.C) 56 Income tax Authority having jurisdiction- Reference to wrong provision of law would not invalidate jurisdiction. 35. Loss:- Business Expenditures- Business Set up of Business. CIT V/s Axis (P) Equity Ltd. (2017) 391 ITR (Bombay H C) Finding whether business set up is finding of fact. Assessment management company finding that assessee took steps for commencing business engaged legal and financial advisors incurred expenditure to decide approximate tax efficient structure for funds and employed necessary personnel for running business- finding that assessee set up business in relevant previous year. Expenditure allowable as business loss. 36. Power of High Court:- Dix Francis V/s ITSC (2017) 391 ITR Madras H.C 401 High Court will interfere only in case of violation of provisions of Income tax Act or violation of principle of natural justice. 37. Cash Credits: Gift:- State of Karnataka V/s Selvi J. Jayalalitha. (2017) 392 ITR (S.C) Gift- Process of Income tax Assessment only determines. Whether or not receipt is Income from undisclosed Sources- not related to lawfulness of sources or of receipt- IT Act 1968 prevention of corruption Act 1988 Se. 13 38. Business Income. Commencement of business:- CIT V/s Green Infra Ltd. (2017) 392 ITR 7 (Bombay) (1) Business Income. Business Income or Income from Other Sources. Commencement of Business- Funds placed in Short term Deposit till deployed in business- finding that business had commenced. Interest from short term deposits Assessable as Business Income. Se.28 & 56 (CIT V/s Indo Swiss Jewels Ltd. (2006) 284 ITR 389 (Bombay H.C) 39. Co-operative Society Special deduction under Section 80P. Principal CIT V/.s Totagars Co-operative sale Society. (2017) 392 ITR (Karnataka H C) 74 Meaning of Co-operative Society- Co. operative Society includes Co-operative Bank- Interest earned from deposits in Co-operative Bank- deductible I.T Act 1961. S. 80P (2) (d). 8

40. Penalty u/s 271 (1) ( c) of I.T Act 1961. CIT V/s Samson perinchery (2017) 392 ITR (Bombay) 4. Concealment of Income- furnishing of inaccurate particulars of Income. AO initiating penalty proceeding for furnishing of inaccurate particulars of Income and imposing penalty for concealment of Income order imposing penalty to be made only on ground on which penalty proceedings initiated and not on fresh grounds of which assessee had no notice- Penalty to be deleted. 41. Return Revised Return:- CBDT Circular Sevugan Chettiar V/s Principal CIT. (2017) 392 ITR (Madras H C) 63. Revised return- Writ Limitation- Assessee claiming exemption in terms of supreme court decision and CBDT Circular Revised return filed beyond time- High Court has power to direct condonation of delay and granting of exemption I.T Act 1961 SS10, 119, 139. 42. Appeal to Appellate Tribunal Ottar Club V/s DIT (Exemptions) 392 ITR (Bombay H.C) 244 (2) Orders of Appellate Tribunal- Rule requiring order to be pronounced within ninety days of conclusion of hearing Tribunal passing order beyond period of 90 days from date of conclusion of its hearing- Assessee seeking rectification on ground delay operated to its prejudice- Tribunal to consider rectification application a fresh I.T Act 1961 Se 254 (1) I.T Rule (Appellate Tribunal) Rules 1963 rule 34 (5) (c ) 34 (8) 43. Business: Business Income or Income from House Property. Principal CIT V/s Sri Bharathi Warehousing Corporation. (2017) 392 ITR (T & AP) 160 Main business activity of assessee consisting of construction of different types of building and leasing them out. Not Exploitation of property- as owner- Income will fall under head Income from business- I.T Act 1961. 44. Representative Assessee- Trustee. CIT V/s India Advantage Fund VII (2017) 392 ITR (Karnataka H.C) 209 (2) Trustee Assessment- Effect of Section 164 (1) and circular No 281 dated 22-9- 1980. Sufficient if beneficiaries identifiable and share capable of being determined based on trust deed I.T Act 1961 SS.161 & 164. 9

45. Se.50: Capital Gains Depreciable Assets. CIT V/s V.S Dempo Company Ltd (2016) 387 ITR 354 (S.C) Block of Assets- Restricted to made of computation of gains does not alter entitlement to exemption where asset held for more than Thirty Six month [SS 2 (29b)] 45,48,49,54E] 46 Scope of total Income Interest on compensation. Shivanna M. V/s ACIT (2016) 142 DTR 319 (Karnataka H C) Interest on compensation under dispute- Chargeable to tax only upon resolution of dispute by High Court. 47 Se. 37 (1 Bogus Purchase: [ Se 69C & 260A] CIT V/s Anju Jindal (Smt) (2016) 387 ITR 418 (P & H) (H>C) Business Expenditure Bogus Purchases- paid by account payee s cheques- Sales were accepted G.P was normal. Deletion of addition by Tribunal was upheld to be justified. 48. Se.50C:- Capital Gains:- transfer of Leasehold Rights. CIT V/s. Green field Hotels and estate (P) Ltd. (2016) 389 ITR 68 (Bombay H C) Full Value of consideration- Stamp duty valuation provision will not be applicable while computing capital gains on transfer of leasehold rights in land and Buildings. (Se.2 (14) 45. 49. Se.143 (2) Assessment Notice. CIT V/s Abacus Distribution System (India) (P) Ltd (Bombay H C) (www itatonline.org) Assessment- Notice- Notice Served on the old address. Assessment was held to be void (Se 282, 292BB, General clauses Act S.27. 50 Se. 143 (3) Bogus Purchases: CIT V/s Ashish International (Bombay H C) (www.itatonline.org) Bogus Purchases Cross Examination- A Statement by the Alleged Vendor that the transactions with the assessee was only accommodation entries and that there are no sales or purchases cannot be relied upon by the A.O unless the assessee is given the opportunity to cross- examine the vendor Se.131]. 51 S.145: Method of Accounting: Weighted Averaged Method cost of valuing Stock. CIT V/s Uday M. Ghare (Bombay H.C) www.itatonline.org 10

Method of Accounting: Weighted average cost of valuing of accounting. Which is approved by Accounting Standard issued by the ICAI- AO is not entitled to disregard the Method if the assessee has consistently followed the said Method:- 52. Penalty under Se.271 (1) (c ) of I..T Act:- If quantum appeal is admitted in High Court. CIT V/s Advita Estate Development (P) Ltd. www.itatonline.org (Bombay High Court) If the quantum appeal is admitted by the High Court, it means that the issue is debatable and penalty cannot be levied (S.260A) 53. Se.2 (22) (e) Deemed Dividend: Inter corporate transactions:- Chandrasekhar Maruti V/s ACIT (2016) 159 ITD 822 (2017) 183 TTJ 459 (Mumbai Tribunal) Deemed dividend- Inter corporate transactions- Loans given by companies to each other in course of inter se business transactions could not be regarded as deemed dividend. 54. Penny Stocks. ACIT V/s Viineet Sureshchandra Agarwal Ahmedabad Tribunal. www.itatonline.org Se 30 (38) Long term Capital gains from Equity Penny Stocks Shares transactions can not be held to be bogus. 55. Se.41(1) Remission or cessation of trading Liabilities. Dy CIT V/s JSR Constructions (P) Ltd (2016) 159 ITD 749 (Bangalore (Tribunal) Best Judgement assessment- where the books of Accounts is rejected and net profit is assessed, there can not be separate additions in respect of creditors appear in such books on the basis that they ceased to exist (S.144) 56. Se 45: Capital Gains Long term or Short term (?) Letter of allotment: Anita D. Kanjani V/s ACIT (Mumbai) www.itatonline.org Letter of allotment for considering whether a n asset is a long term Capital Asset the period of holding must be computed on a defects basis. The letter of allotment, even though not ownership must be taken as the date of holding the Asset. Se. 2 (14) 2 (29A) 2 (42A) 2 (47) 54 & 54F. 57. Capital Gains: Penny Stock. Dolarri Hemani V/s ITO (Kol) Tribunal (www.itatonline.org) 11

The fact that the stock in thinly traded and there is unusually high gain is not sufficient to treat the long-term capital gain as Bogus when all the paper work is in order. The Revenue has to bring material on record to support its finding that there has been collusion/ connivance between the broker and the assessee for the introduction of its un accounted money. 58 Se.206AA. Requirement to Furnish PAN Number. Nagarjuna Fertilizers and Chemicals Ltd V/s ACIT (Hydrabad Tribunal) (S.B) www.itatonline.org Section does not have an overriding effect over the other provisions of the Act. Consequently the payer can not be held liable to deduct tax at a higher of the rates prescribed in Se.206AA in the case of payments made to non- resident persons in spite of their failure to furnish the PAN (Se. 90 (2) 59. Asst CIT V/s Bhavik Bhartbhai Padia. (2017) 78 taxmann.com 133 (Ahmedabad Tribunal) Where assessee had shown capital gain in share transactions and A.O concluded that purchase of shares by assessee was bogus and accordingly treated Capital gain as cash credit u/s 68 since sale of shares had been confirmed by BSE question of raising doubt as to purchase of shares did not arise and addition not justified. 60 Asst. CIT V/s Sachin R. Tendulkar. (2017) 77 taxmann.com 305 (Mumbai Tribunal) (a) Investment in shares with Portfolio Managers being a merge percentage of assessee s total Investments. Income on sale of shares was taxable under head Capital Gains and not business Income. (b) Where assessee had not claimed any Expenditure relating to exempt Income. There could not have been disallowance of expenditure under Section14A. 61. Mr. Shahrukh Khan V/s Asst. CIT Central Circle 29. ITA 623/ Mum / 2013 A.Y. 2009 10 ITA 4763 /Mum / 20134 A,Y, 2010 11 Date of order 17/3/2017) (I) Where the Assessee received fees in advance for 104 Episode and some were offered as Income in the year of receipt. But out of 104 Episodes, for 52 Episodes no shooting took place and project for cancelled and the assessee returned back fees for such 52 Episodes. Where no shooting took place and no services were rendered on the principles of commercial Expediously and same is allowable under Section 37 (1) of I.T Act 1961. 12

(II) The Assessee was having Second residential house in Dubai. A.O taxed Second house deemed Annual letting value within the meaning of Section 23 (1) (a) of the Income tax Act 1961. The CIT (A) confirmed the A.O s action and the ITAT Mumbai also confirmed the AO s order. This was taxed in view of the notification No.90 and 91/ 2008 dated 28/08/2008. In fact, the entire controversy is arising from the understanding of the expression may be taxed in that other state. As mentioned in Para I of articles 6 of the DTAA between India and UAE. In view of the aforesaid precedent. It has to be held that Income from the Dubai villa is liable to taxed in India as much as the same is includible in the return of Income and whatever taxes that may have been levied in the other contracting state, the credit thereof is required to be allowed as per law. Therefore, in view thereof we hold the issue against the assessee and direct The A.O to rework the final tax liability in accordance with aforesaid direction. 62. Collection of tax at source:- Time limit of furnishing Form 27C:- (2018) 78 taxmann.com 295 (S.C) SLP granted against High Court s ruling that no time limit is provided in section 206C (1A) to make a declaration in Form 27C collected from buyers and mere minor delay in furnishing Form 27C would not make assessee liable for noncollection of TCS. 63. Expenditure incurred in relation to Income not includible in total Income. (2017) 79 taxmann.com 39 (Mumbai Tribunal) Rule 8D of 1962 Rule is not attracted automatically to an assessee who earns exempt Income, rather, in a case where A.O after examination of books of Account under Section 14A(2) records his satisfaction that disallowance or nil disallowance made by assessee is found to be unsatisfactory, he is authorized to compute amount to be disallowed under rule 8D of 1962 Rules. 64. How to calculate period of holding Assets for Long term Capital Gain (?) Whether Registration is must (?) Anita D. Kanjani V/s ACIT 23 (1) Mumbai (H. Bench) ITA No 2291/ Mum / 2015 A.Y. 2011-12. Date of order 13/02/2017. Date of allotment- The date of Agreement and date of Registration of the document (?) 13

For the purpose of calculating period of holding u/s 2 (42A) of I.T Act 1961. The legal ownership is not materials the holding period is to be determined in view of Se 2 (42A) issue of ownership is not issue. The Tribunal held that (Para 16) we find that holding period should be computed from the date of issue of allotment letter if we do so, the holding period becomes more than 36 months and consequently, the property sold by the assessee would be long term Capital asset in the hands of the assessee. 14