Sunday, August 30, 2015

Supreme Court Stays Bar Council's Directive On Advocates' Verification

 

Dear Subscriber,

Supreme Court Stays Bar Council's Directive On Advocates' Verification

A Writ Petition No. 17361 of 2015 was filed by A. P. Ranganathan in the Karnataka High Court to challenge the Certificate and place of Practice (Verification) Rules, 2015. (copy of Writ Petition is available here). The High Court passed an order dated 24.04.2015 grating interim relief as prayed for "only in so far as the petitioner is concerned". A similar Writ Petition in the case of MOHANAN L Vs. BAR COUNCIL OF INDIA (Writ Petition Civil 17467 of 2015) was filed in the Kerala High Court. The Kerala High Court's interim order is not available. The Bar Council of India moved a Transfer Petition Nos. 1233-1243 of 2015 in the Supreme Court. In the said Transfer Petition, the Supreme Court has passed the following order dated 26.08.2015


Regards,

 

Editor,

 

itatonline.org

---------------------

Latest:

Hasmukh N. Gala vs. ITO (ITAT Mumbai)

S. 54: Giving advance to builder constitutes "purchase" of new house even if construction is not completed and title to the property has not passed to the assessee within the prescribed period


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Tuesday, August 18, 2015

Supreme Court Resolves Conflict Over Levy Of S. 234B Advance-Tax Interest + Opinion Of Legal Luminaries


 

Dear Subscriber,

CIT vs. Bhagat Construction Co. Pvt. Ltd (Supreme Court)

S. 234B interest is automatic if conditions are met. Form I.T.N.S. 150 is a part of the assessment order and it is sufficient if the levy of interest is stated there

It will be seen that under the provisions of Section 234B, the moment an assessee who is liable to pay advance tax has failed to pay such tax or where the advance tax paid by such an assessee is less than 90 per cent of the assessed tax, the assessee becomes liable to pay simple interest at the rate of one per cent for every month or part of the month. The levy of such interest is automatic when the conditions of Section 234B are met. The facts of the present case are squarely covered by the decision contained in Kalyankumar Ray's case inasmuch as it is undisputed that contained a calculation of interest payable on the tax assessed. This being the case, it is clear that as per the said judgment, this Form must be treated as part of the assessment order in the wider sense in which the expression has to be understood in the context of Section 143, which is referred to in Explanation 1 to Section 234B


Opinion Of Eminent Legal Luminaries On Controversial Issues

Eminent legal luminaries have answered queries relating to highly controversial issues. The answers are given with reference to the judgements on the point. The feature will prove very useful to all tax professionals.


Regards,

 

Editor,

 

itatonline.org

---------------------

Latest:

Eminent Senior Tax Advocate Appointed To Top SEBI Post


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C B D T Notification 10, Judgments and Notification and Infomration [1 Attachment]


---------- Forwarded message ----------
From: Dipak Shah djshah1944@yahoo.com [SolapurCAs] <SolapurCAs@yahoogroups.com>
Date: Mon, Aug 17, 2015 at 9:11 PM
Subject: Message from EGroup of SolapurCAs C B D T Notification 10, Judgments and Notification and Infomration [1 Attachment]
To: SolapurCAs@yahoogroups.com


 
[Attachment(s) from Dipak Shah djshah1944@yahoo.com [SolapurCAs] included below]





What Are The Capital Gains Implications Of Redevelopment Of Property?

QUERY: In case of redevelopment of property the consideration takes in the form of corpus, which is a real cash inflow and fair market value of the property to be developed, which is a deemed consideration for the purpose of exchange. Thus, there is exchange of property. Now, the question is in which year capital gain arises and when can exemption be claimed either under Section 54 or under section 54F?
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S): , ,
GENRE:
CATCH WORDS: , ,
In case of development of property the capital gain arises as per terms of the agreement. Generally, the agreement provides that the developer has right to enter and construct on the land of owner and owner parts with land only on receipt of certain portion of building to be constructed
Posted in Income-tax

How To Compute Cost Of Indexation For Legal Heirs?

QUERY: A person acquired inherited property before Independence. Thereafter, he had obtained, the court order for legal heirship in the Financial Year 1991/92, At that time stamp duty was paid amounting to Rs. 1,98,840/-. Can it be considered as cost for indexation?
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S):
GENRE:
CATCH WORDS: , ,
Section 49(1) provides that where the capital asset acquired by an assessee by way of inheritance, the cost of acquisition of the asset shall be deemed to be the cost for which the previous owner of the property acquired it
Posted in Income-tax

Can Depreciation As Per Companies Act Be Based On Useful Life Of Asset?

QUERY: As per Schedule II of the Companies Act, 2013 the useful life of Plant and Machinery and in generation of power is 40 years, but as per the company, useful life is much less. What the company should do?
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S):
GENRE:
CATCH WORDS: , ,
Posted in Company Law

Do Corporate Social Responsibility (CSR) Expenses Have To Be Provided On Accrual Basis?

QUERY: Whether it is necessary to provide (Corporate Social Responsibility) CSR expenses in the books of account on accrual basis, considering AS–29 "Provisions, Contingent Liabilities and Contingent Assets"?
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S):
GENRE:
CATCH WORDS: , ,
Section 128 of the Companies Act, 2013 mandates every company to maintain its books of account on accrual basis. As per AS-1 "Disclosure of Accounting Policies" in accrual basis cost and revenue are accrued that is recognised as they are incurred or earned and recorded in the financial statements of the periods to which they relate
Posted in Company Law

Will Non-Claim Of Cenvat Credit By A Charitable Trust Result In Withdrawal Of S. 11 Exemption?

QUERY: (a) As we are charitable organisation / trust involved in education related activities. We are paying service tax on the fees collected from students. However, no Cenvat on input services is available while making payment of service tax as the head of organisation is of strong opinion that it will invite unnecessary audit queries and attention from the service tax department. The Cenvat credit for F.Y. 2012-13 works out to around Rs. 20,00,000/-. Section 13 of the Income- tax Act, 1961 provides for protection of property of the Trust and hence not claiming Cenvat of Rs. 20,00,000/- is a violation of the section?

(b) In charitable organisation, the trustees have given full authority to Director General and consequently Director General is also very vigilant in sanctioning any payments. Out of abandon caution and moral, ethical responsibility, Director General would like that payment made to him or his relative should be approved by the trustees. Whether his contention is right?

(c) A charitable trust involved in medical related facilities have received part income tax refund from department and that also without interest. The head of the organization is not in favour of writing a letter asking for part refund as well as interest on refund fearing any harassment from Income-tax Department. Whether such stand would invite section 13 of the Income tax Act, 1961?
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S): , ,
GENRE:
CATCH WORDS: ,
In view of the above, if CENVAT credit of Rs. 20/- lakhs or part of the income tax refund or interest on the said refund not claimed by the Trust, the trustee/s would be liable under section 36A of the Bombay Public Trust Act, 1950 for not protecting the property of the trust. However, the trust can not lose the exemption under section 3 of the Act as the amount is receivable from the Government
Posted in Income-tax

What Is The Impact Of The Amendment To S. 2(15) For Charitable Trusts?

QUERY: Clause 3 of Finance Bill 2015 proposes amendment to section 2(15) of Income-tax Act, 1961 wherein certain proposals are being incorporated to restrict the activities of Charitable Trusts rendering any service in relation to any trade, commerce or business for a cess or fee or any other consideration. What is the impact of such proposal?
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S):
GENRE:
CATCH WORDS:
The advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity
Posted in Income-tax

Can An Existing Firm Claim Deduction u/s 35AD For Set Up Of New Hospital?

QUERY: The assessee is a partnership firm carrying on medical profession. At present it is carrying on Gynic Branch only for the last several years. It decided to set up 200 bedded multi-specialty hospital and accordingly started the project in May, 2012 under the same partnership firm as a separate unit in order to avail under section 35AD @ 150% of eligible capital expenditure:

(a) Whether this unit can claim deduction under this section though the place of business and the nature of services will be different? No old machinery etc. will be transferred to new building/unit.

(b) Whether the income of both the units owned by the firm will be consolidated for the purpose of applicability of section 115JC or separate treatment?

(c) Can there be any difficulty to claim deduction under section 35AD in case if old unit (Gynic) is also shifted to new Hospital? The new unit may start operation by April-May, 2015.
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S): ,
GENRE:
CATCH WORDS: , ,
Yes, the partnership firm can claim deduction under section 35AD @ 150% on capital expenditure incurred for setting up and operating hospital anywhere in India with more than 100 beds for patients
Posted in Income-tax

What Is The Law Regarding Impartible Estate Of HUF Property?

QUERY: What is the Law laid down by Hon. Supreme Court in respect of impartible estate of HUF property?
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S):
GENRE:
CATCH WORDS: , ,
an estate, which is impartible by custom, cannot be said to be the separate or exclusive property of the holder of the estate. If the holder has got the estate as an ancestral estate and he is succeeded to it by primogeniture, it will be part of the joint estate of the undivided Hindu family
Posted in Allied Laws

When Does A Transfer Take Place In An Agreement For Sale Of Immovable Property For Capital Gains Purposes?

QUERY: 'P' had to sold her property in order to finance her daughter's medical expenses.

The agreement for sale was entered for Rs. 50/- lakh. She received only Rs. 35/- lakh due to dispute with the buyer. No possession of the property was given. She does not have money to invest in order to claim exemption u/s. 54. The AO passed the order levying tax on Rs. 50/- lakh. Whether AO is right?
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S): , ,
GENRE:
CATCH WORDS: ,
In this case transfer is not complete, because of property has not been given and therefore there is no question of investing in another house to claim exemption under section 54
Posted in Income-tax

Can Sale Of Land & Building Be Split Into Long-Term & Short-Term Capital Gains?

QUERY: 'A' has purchased a plot in March, 2010 for Rs. 10/- lakh and spent Rs. 5/- lakh for construction during F.Y. 2011-12, and Rs. 5/- lakh during the F. Y. 2012-13. He sold the entire house in December, 2014 for Rs. 50 /- lakh Whether it is long-term or short-term gain?
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S): ,
GENRE:
CATCH WORDS: , ,
Section 2(29A) defines "Long term capital asset" which means a capital asset which is not a short term capital asset. Section 2 (42A) defines "Short term capital asset" which means a capital asset held by an assessee for not more than thirty six months, other than listed shares. In that case, a period of not more than the twelve months to be considered for short term capital asset

Can Legal Heir Claim Exemption From Capital Gains For New House U/s 54?

QUERY: The assessee sold residential house and planned to construct a new house for claiming exemption u/s. 54. The assessee expired in April, 2014. Can legal heir who has to file Return of Income can claim benefit u/s. 54 of the Act, and how?
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S):
GENRE:
CATCH WORDS: , ,
Thus, it is clear from the above judgments that legal heir steps in the shoes of deceased and entitled for deduction under section 54 of the Act.
Posted in Income-tax

Can TDS Not Paid To Govt By Deductor Be Recovered From The Deductee?

QUERY: A demand has been raised on 'X' for the short credit in 26AS in respect of TDS deducted by the deductor but not paid to the Government. Whether 'X' is liable to pay the demand.
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S): ,
GENRE:
CATCH WORDS: ,
Complete machinery is provided under the Act for recovery of TDS from the person who has deducted such tax at source and the Revenue was barred from recovery of the amount from the person from whose income tax has been deducted at source
Posted in Income-tax

If Stamp Duty Value S. 50C Is Invested In New House Is S. 54F Exemption Available?

QUERY: A flat was sold. The AO adopted stamp duty value. The assessee invested full stamp duty value in another flat. Whether the assessee is entitled for deduction under section 54F?
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S):
GENRE:
CATCH WORDS: , ,
where capital gain is assessed on notional basis under section 50C, whatever amount is invested in new residential house within prescribed period under section 54F would get benefit of deduction irrespective of the fact that funds from other sources are utilised for new residential house
Posted in Income-tax

We have made a capital profit of Rs. 10 crores. Can we exclude it from MAT book profits for s. 115JB?

QUERY: We have made a capital profit of Rs. 10 crores from sale of our property. We have been advised that the profits being capital in nature can be directly credited to the capital reserves account in the balance sheet and need not be routed through the P & L A/c. As the profits are not a part of the P&L A/c, can we avoid paying MAT book profits u/s 115JB?
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S):
GENRE:
CATCH WORDS: ,
No! Even if capital profits are credited to the capital reserves a/c in the balance sheet, they have to be added to the "book profits" for purposes of s. 115JB.
Posted in Income-tax

I borrowed funds to buy a new house u/s 54. Will the s. 54 exemption be denied to me?

QUERY: I sold my residential property and made a long-term capital gain of Rs. 50 lakhs. I used the sale proceeds to purchase a commercial gala. Subsequently, within two years of sale of the residential property, I purchased another residential property by borrowing funds from the bank and relatives. Can I claim that the long-term capital gain is exempt u/s 54 even though the sale proceeds of the old house were not used for purchase of the new house?
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S):
GENRE:
CATCH WORDS: , ,
No! The only requirement for availing deduction u/s 54 is that the new residential house must be purchased or constructed within the period specified in the section. The source of funds is irrelevant.
Posted in Income-tax

Are the sums offered by the builder for redevelopment of our co-op hsg society taxable?

QUERY: We have been approached by a builder for the redevelopment of our building. He says he will demolish parts of the building and reconstruct with more area. The society will be paid Rs. 1 crore while the members will be paid Rs. 25 lakhs each. He will retain a part of the area as his profit. Are the said sums chargeable to tax in the hands of the society and members?
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S): ,
GENRE:
CATCH WORDS: , ,
No. If no 'cost of acquisition' is attributable to the development rights, the gains arising on their transfer are not assessable in either the hands of the society or in the hands of the members.
Posted in Income-tax

If I deal in shares, will my gains on shares held for investment purposes become business profits?

QUERY: I am holding some shares for investment purposes and other shares for trading. I have made gains from the investment shares. Is the AO correct in treating the gains as business income?
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S): , ,
GENRE:
CATCH WORDS: , , ,
No! One has to be careful to ensure that there is a proper segregation of the shares held on investment account from the shares held on trading account. The investment shares must be valued at cost while the trading shares can be valued at market price if that is lower.
Posted in Income-tax

Am I entitled to demand the assessment records of third parties under RTI?

QUERY: I am interested in seeing the assessment records of certain third parties. Can I call for the same under the Right to Information Act?
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S):
GENRE:
CATCH WORDS: , ,
Yes! As per the recent controversial judgement of the Chief Information Commissioner in Rakesh Kumar Gupta's case.
Posted in RTI Act

If we introduce stock-in-trade as capital contribution into a firm, are we taxable?

QUERY: We are carrying on real estate business and hold land at stock-in-trade. The land cost us Rs. 50 lakhs. It is worth Rs. 2 crores today. We propose to revalue the land at its market value in the books of account and credit Rs. 1.50 crores to the P & L A/c. We shall introduce the land as our capital contribution in a firm in which we will become partners. The firm will credit our capital account by Rs. 2 crores. Are we taxable on the difference between Rs. 50 lakhs and Rs. 2 crores?
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S):
GENRE:
CATCH WORDS: , ,
Yes! As per the judgement of the majority in the Special Bench in DLF Universal vs. JCIT, stock-in-trade gets converted into a capital asset at the point of introduction into the firm and attracts s. 45(3).
Posted in Income-tax

One of our factories is shut for more than 2 years with no operations. Can we still claim depreciation?

QUERY: We have two factories, one at Bombay and the other at Delhi. The factory at Bombay is operational. However, the factory at Delhi has been shut for two years with no activity. Are we entitled to claim depreciation on the assets installed there?
ANSWER: Click here to read the full answer of the expert
EXPERT:
SECTION(S):
GENRE:
CATCH WORDS: , ,
Yes! You are entitled to claim depreciation even on assets that are not used provided they are part of a "block of assets" and the block has been used during the year. The user of the "block" is important and not that of individual assets

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Attachment(s) from Dipak Shah djshah1944@yahoo.com [SolapurCAs] | View attachments on the web

1 of 1 File(s)


Posted by: Dipak Shah <djshah1944@yahoo.com>

Judgments and Infomration [3 Attachments]

---------- Forwarded message ----------
From: Dipak Shah djshah1944@yahoo.com [SolapurCAs] <SolapurCAs@yahoogroups.com>
Date: Mon, Aug 17, 2015 at 5:45 PM
Subject: Message from EGroup of SolapurCAs Judgments and Infomration [3 Attachments]
To: SolapurCAs@yahoogroups.com


 
[Attachment(s) from Dipak Shah djshah1944@yahoo.com [SolapurCAs] included below]



No jurisdiction with Official Liquidator to ascertain Financial Corporation's claim, dismisses appeal

SC dismisses defaulter co's appeal, upholds HC Division Bench order confirming sale of co's mortgaged-assets by its secured creditors- State Financial Corporations ('respondent corporations'), pursuant to power of sale conferred to them by Section 29 of State Financial Corporations Act, 1959 ('SFC Act'); Rejects HC Single Judge observation that respondent corporations had to prove their claim before sale of assets to Official Liquidator ('OL'); Holds that OL has no jurisdiction to ascertain or adjudicate secured creditor's claim who has been permitted by Company Judge to stand outside liquidation proceeding with liberty to pursue statutory remedy under SFC Act; On appellant's contention that OL had to first quantify workmen's dues u/s 529A of Companies Act, 1956, holds that such provision does "impede statutory powers available to a secured creditor like SFCs.. but the impediment is indeed of a limited nature; its specific purpose being to protect the pari passu charge of the workmen's dues. After ensuring that this purpose is achieved or ensured, the State Financial Corporations can continue to enjoy their statutory rights as secured creditors"; Relies on SC ruling in A.P. State Financial Corporation v. OL, International Coach Builders Ltd. v. Karnataka State Financial Corpn. and Rajasthan State Financial Corpn. v. Official Liquidator and holds that OL can initiate appropriate civil proceedings to challenge claim/debt of a State financial corporationand "not to assume jurisdiction to sit in adjudication and decide entitlement of the financial corporation":SC


Apex court stays levy of Service Tax on lawyers for unconstitutionality

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The apex court has issued a stay against  an order  of the Hon'ble High Court of Bombay, dated 15.12.2014, in the matter of PC Joshi Vs. Union of India.  The petition before the High Court of Bombay had challenged the levy of service tax on lawyers.
The petitioner, before the High Court of Bombay,  raised the issue that there should be no levy of service tax on services provided by the advocates as stated in Section 65 of the Finance Act, 1994, which is violative of the constitutional provision of providing justice to all. The case was initially pending and finally an order was passed by the Hon'ble High Court on 15th December, 2014, dismissing Advocate P C Joshi's petition.
Section 65 (105) of the Finance Act, 1994: Levy of Service Tax
Rendering Services
(zzzzm) (i) to any person, by a business entity, in relation to advice, consultancy or assistance in any branch of law, in any manner;
(ii) to any business entity, by any person, in relation to representational services before any court, tribunal or authority;
(iii)to any business entity, by an arbitral tribunal, in respect of arbitration. Explanation:- For the purposes of this item, the expressions "arbitration" and "arbitral tribunal" shall have the meanings respectively assigned to them in the Arbitration and Conciliation Act, 1996 (26 of 1996);]
Eventually the impugned order was challenged by the Bombay Bar Association before the Supreme Court, who by virtue of Article 136 of the Constitution of India, took up the matter for hearing.
The petition stated that the imposition of the tax is oppressive, unjust, unreasonable and ultra vires (beyond legal authority) of the right to equality and freedom to carry on a trade or profession and  thus,  unconstitutional in nature. It argued that the relationship between a client and lawyer must not be seen as that of a service provider and a client as the lawyer is merely a representative of his client.
However, on such grounds of representation being made, the Supreme Court finally on 10th August, 2015 stayed the Bombay High Court order dismissing  the petition challenging  the levy of service tax on lawyers and the matter is listed for further court proceedings.
Please click on the below link to read the Bombay High Court Judgement.

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Attachment(s) from Dipak Shah djshah1944@yahoo.com [SolapurCAs] | View attachments on the web

3 of 3 File(s)


Posted by: Dipak Shah <djshah1944@yahoo.com>

Fwd: Vegetables Home Delivery



---------- Forwarded message ----------
From: bhajicart.com | A group of farmer | Vaibhav Dhage <bhajicart@gmail.com>
Date: Mon, Aug 17, 2015 at 8:37 PM
Subject: Vegetables Home Delivery
To: 


Hi.....

I am Vaibhav Dhage (CA FINAL STUDENT)
A farmer����
I pleased to inform you that we have started  new business of online booking & free home delivery of vegitables, fruites,

 milk & grains through my website www.bhajicart.com

��We deliver order to your address free of cost.��

��Minimum purchases of Rs.49 is required for free delivery. Otherwise delivery charges will be Rs.10

��Order should be placed a day before up to 10.00 pm. Emergency orders will also be accept.

��Your Order will be delivered during 7.30 am to 10.30 am & 5.00 pm to 9.00 pm as convenient to you.

��Starting from following areas:-
College road,
Gangapur road,
Anandwalli,
Mahatma nagar,
Kamgar nagar,
Pandit colony,
Sharanpur road,
Racca colony etc,

Pipeline road,

Savarkar nagar,


Other part of city will also get covered from upcoming month.

��You can get other information from our website www.bhajicart.com.

��Contact person
Vaibhav Bajirao Dhage
9545999288
9545999388
Whtsapp 9422314919

Options for making regular orders
Log on to www.bhajicart.com

e-mail at bhajicart@gmail.com


Saturday, August 15, 2015

Fwd: Link of Rachnatmak Sankalp

---------- Forwarded message ----------
From: "Rachnatmak Sankalp" <rachnatmaksankalp@yahoo.com>
Date: Aug 15, 2015 12:33 PM
Subject: Link of Rachnatmak Sankalp
To:
Cc:

"इंस्टीट्यूट ऑफ चार्टर्ड एकाउंटेंट्स की सेंट्रल काउंसिल के सदस्य एसबी जावरे ने रीजनल काउंसिल के लिए यशवंत कसार की उम्मीदवारी को प्रस्तुत करवा कर अपनी जो दिलचस्पी व सक्रियता दिखाई है, उसने पुणे की चुनावी राजनीति को खासा दिलचस्प बना दिया है" शीर्षक रिपोर्ट पढ़ने के लिए Please click the Link :  http://rachnatmaksankalp.blogspot.in/2015/08/blog-post_14.html

Thursday, August 13, 2015

ITR Volume 376 : Part 1 (Issue dated : 10-8-2015)

 

INCOME TAX REPORTS (ITR)

ONLINE EDITION

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURT

Business income --Capital gains--Long-term capital gains--Short-term capital gains--Gains from share transactions--Assessable as short-term and long-term capital gains--Income-tax Act, 1961-- CIT v. Nita Madhu Patel (Guj) . . . 107

Capital or revenue expenditure --Expenditure incurred on filling up pond--Advantage for the enduring benefit of business of assessee--Capital expenditure--Income-tax Act, 1961--Budge Budge Co. Ltd. v. CIT (Cal) . . . 101

Depreciation --Suspension of work--Lock-out--No malice in suspension of work--Plant lying ready for use--Assessee entitled to depreciation--Income-tax Act, 1961, s. 32-- Budge Budge Co. Ltd. v. CIT (Cal) . . . 101

Search and seizure --Assessment in search cases--Undisclosed income--Voluntary offer on account of suppression of professional receipts--Payment made to third party outside books of account--Assessee trying to correlate transaction with surplus balance of cash available--No direct presumption that assessee made investment to that extent from available cash balance--Addition to that extent justified--Income-tax Act, 1961, s. 153A-- Prakash K. Kankariya v. Joint CIT (Bom) . . . 110

 

PRINT EDITION

ITR Volume 376 : Part 1 (Issue dated : 10-8-2015)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Appeal to Appellate Tribunal --Powers--Power to extend stay of demand beyond period of three hundred and sixty-five days--Tribunal to pass speaking order on each application and record satisfaction--If Revenue aggrieved by such extension in a particular case--Revenue can challenge before High Court--Income-tax Act, 1961, s. 254(2A)-- Deputy CIT (TDS) v.Vodafone Essar Gujarat Ltd. (Guj) . . . 23

----Powers of Tribunal--Constitutional validity of provisions--Power to grant stay of proceedings--Amendment of section 245 by Finance Act, 2008, empowering Tribunal to grant stay beyond 365 days even if delay not attributable to assessee--Provision violative of article 14 of Constitution--Provision struck down--Tribunal has power to grant extension of stay beyond 365 days in deserving cases--Income-tax Act, 1961, s. 254--Constitution of India, art. 14-- Pepsi Foods P. Ltd. v. Asst. CIT (Delhi) . . . 87

----Power of Tribunal to grant stay--Limited to total period of three hundred and sixty-five days from date of initial stay--Assessee’s appeal listed for hearing but not taken up for reasons not attributable to assessee--Stay continued till disposal of appeal--Tribunal directed to expedite disposal of appeal--Income-tax Act, 1961, s. 254(2A)-- New Delhi Television Ltd.v. Deputy CIT (Delhi) . . . 51

----Rectification of mistakes--Powers--Power to rectify any mistake apparent from record and make amendments--Order of Tribunal challenged in higher court--No bar either on assessee or on Revenue to invoke power of rectification--Principle of judicial propriety has no application--Income-tax Act, 1961, s. 254(2)-- R. W. Promotions P. Ltd. v. ITAT (Bom) . . . 126

----Remand--Entire matter relating to assessments considered by Assessing Officer and Dispute Resolution Panel--Remand to be made to Dispute Resolution Panel and not Assessing Officer--Income-tax Act, 1961, s. 254-- Shanghai Electric Group Co. Ltd. v. Director of Income-tax (Delhi) . . . 46

Assessment --Additional tax--Adjustment made by assessee correct according to law on date of filing return--Subsequent Supreme Court decision not permitting adjustment--Additional tax not automatic--Additional tax could not be levied--Income-tax Act, 1961, s. 143(1)(a), (1A)-- Deputy CIT (Assessment) v. Surat Electricity Company Ltd. (Guj) . . . 121

Business --Business income--Cessation of liability--Amount claimed to be loan--Forfeiture of loan--No deduction of such amount--Amount not assessable under section 41(1)--Income-tax Act, 1961, s. 41(1)-- CIT v. Velocient Technologies Ltd. (Delhi) . . . 131

Cash credits --Amount shown as loan--Burden of proof on assessee to prove genuineness of transaction--No evidence that amount received as loan--Addition of amount to income under section 68--Justified--Income-tax Act, 1961, s. 68-- CIT v. Velocient Technologies Ltd. (Delhi) . . . 131

Exemption --Educational institution--One of objects clauses providing trust could run business--No finding recorded that predominant object of trust to do business--Trust entitled to exemption--Income-tax Act, 1961, s. 10(23C)(vi)-- Harf Charitable Trust (Regd.), Malerkotla v. Chief CIT (P&H) . . . 110

Export --Special deduction--Assessee investing for a short period funds not immediately needed in regular business of export --Interest earned from such investment--No direct and proximate nexus--Assessable as “Income from other sources†--Income-tax Act, 1961, s. 80HHC-- Reliance Trading Corporation v. ITO [FB] (Raj) . . . 53

----Special deduction--Earning of income convertible from foreign exchange by way of interest--Not a test for determining whether deduction is allowable in respect of income derived from profits retained for export business--Income-tax Act, 1961, s. 80HHC--Reliance Trading Corporation v. ITO [FB] (Raj) . . . 53

----Special deduction--Insertion of sub-section (4B) excluding interest for purposes of section 80HHC--Will affect deduction of interest under section 80HHC for period prior to amendment--Income-tax Act, 1961, s. 80HHC-- Reliance Trading Corporation v. ITO [FB] (Raj) . . . 53

Loss --Business loss--Loss on sale of debentures--Finding that transactions of purchase and sale of debentures genuine--Loss deductible--Income-tax Act, 1961-- CIT v.Abhinandan Investment Ltd. (Delhi) . . . 153

Penalty --Concealment of income--Furnishing inaccurate particulars of income--Seized record showing assessee making payment to U. P. Distillers Association--Omission on part of assessee to answer question as regards payment--Presumption of concealment of income--Assessee disclosing additional income only after investigation by Director of Income-tax with certain evidence--Levy of penalty justified--Income-tax Act, 1961, s. 271(1)(c)-- CIT v.Balarampur Chini Mills Ltd. (Cal) . . .1

Reassessment --Grounds for reassessment--Failure to disclose material facts necessary for assessment--Failure to disclose details of transaction during assessment proceedings--Reassessment proceedings valid--Income-tax Act, 1961, ss. 147, 148-- CIT v. Velocient Technologies Ltd. (Delhi) . . . 131

----Notice--Validity--Restructuring arrangement between assessee-company and its subsidiary--Unexpired value of contracts transferred to subsidiary in exchange for shares--Assessment of income subsequent to transaction after enquiry by Assessing Officer and Dispute Resolution Panel--Subsequent reassessment proceedings on ground that transaction gave rise to capital gains--Change of opinion--Reassessment proceedings not valid--Income-tax Act, 1961, ss. 147, 148-- Lahmeyer Holding GmbH v. Deputy DIT (Delhi) . . . 70

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Constitution of India :

Art. 14 --Appeal to Appellate Tribunal--Powers of Tribunal--Constitutional validity of provisions--Power to grant stay of proceedings--Amendment of section 245 by Finance Act, 2008, empowering Tribunal to grant stay beyond 365 days even if delay not attributable to assessee--Provision violative of article 14 of Constitution--Provision struck down--Tribunal has power to grant extension of stay beyond 365 days in deserving cases-- Pepsi Foods P. Ltd. v. Asst. CIT (Delhi) . . . 87

Income-tax Act, 1961 :

S. 10(23C)(vi) --Exemption--Educational institution--One of objects clauses providing trust could run business--No finding recorded that predominant object of trust to do business--Trust entitled to exemption-- Harf Charitable Trust (Regd.), Malerkotla v. Chief CIT (P&H) . . . 110

S. 41(1) --Business--Business income--Cessation of liability--Amount claimed to be loan--Forfeiture of loan--No deduction of such amount--Amount not assessable under section 41(1)-- CIT v. Velocient Technologies Ltd. (Delhi) . . . 131

S. 68 --Cash credits--Amount shown as loan--Burden of proof on assessee to prove genuineness of transaction--No evidence that amount received as loan--Addition of amount to income under section 68--Justified-- CIT v. Velocient Technologies Ltd. (Delhi) . . . 131

S. 80HHC --Export--Special deduction--Assessee investing for a short period funds not immediately needed in regular business of export --Interest earned from such investment--No direct and proximate nexus--Assessable as “Income from other sources†-- Reliance Trading Corporation v. ITO [FB] (Raj) . . . 53

----Export--Special deduction--Earning of income convertible from foreign exchange by way of interest--Not a test for determining whether deduction is allowable in respect of income derived from profits retained for export business-- Reliance Trading Corporation v. ITO [FB] (Raj) . . . 53

----Export--Special deduction--Insertion of sub-section (4B) excluding interest for purposes of section 80HHC--Will affect deduction of interest under section 80HHC for period prior to amendment--Reliance Trading Corporation v. ITO [FB] (Raj) . . . 53

S. 143(1)(a), (1A) --Assessment--Additional tax--Adjustment made by assessee correct according to law on date of filing return--Subsequent Supreme Court decision not permitting adjustment--Additional tax not automatic--Additional tax could not be levied-- Deputy CIT (Assessment) v. Surat Electricity Company Ltd. (Guj) . . . 121

S. 147 --Reassessment--Grounds for reassessment--Failure to disclose material facts necessary for assessment--Failure to disclose details of transaction during assessment proceedings--Reassessment proceedings valid-- CIT v. Velocient Technologies Ltd. (Delhi) . . . 131

----Reassessment--Notice--Validity--Restructuring arrangement between assessee-company and its subsidiary--Unexpired value of contracts transferred to subsidiary in exchange for shares--Assessment of income subsequent to transaction after enquiry by Assessing Officer and Dispute Resolution Panel--Subsequent reassessment proceedings on ground that transaction gave rise to capital gains--Change of opinion--Reassessment proceedings not valid-- Lahmeyer Holding GmbH v. Deputy DIT (Delhi) . . . 70

S. 148 --Reassessment--Grounds for reassessment--Failure to disclose material facts necessary for assessment--Failure to disclose details of transaction during assessment proceedings--Reassessment proceedings valid-- CIT v. Velocient Technologies Ltd. (Delhi) . . . 131

----Reassessment--Notice--Validity--Restructuring arrangement between assessee-company and its subsidiary--Unexpired value of contracts transferred to subsidiary in exchange for shares--Assessment of income subsequent to transaction after enquiry by Assessing Officer and Dispute Resolution Panel--Subsequent reassessment proceedings on ground that transaction gave rise to capital gains--Change of opinion--Reassessment proceedings not valid-- Lahmeyer Holding GmbH v. Deputy DIT (Delhi) . . . 70

S. 254 --Appeal to Appellate Tribunal--Powers of Tribunal--Constitutional validity of provisions--Power to grant stay of proceedings--Amendment of section 245 by Finance Act, 2008, empowering Tribunal to grant stay beyond 365 days even if delay not attributable to assessee--Provision violative of article 14 of Constitution--Provision struck down--Tribunal has power to grant extension of stay beyond 365 days in deserving cases-- Pepsi Foods P. Ltd. v. Asst. CIT (Delhi) . . . 87

----Appeal to Appellate Tribunal--Remand--Entire matter relating to assessments considered by Assessing Officer and Dispute Resolution Panel--Remand to be made to Dispute Resolution Panel and not Assessing Officer-- Shanghai Electric Group Co. Ltd. v. Director of Income-tax (Delhi) . . . 46

S. 254(2) --Appeal to Appellate Tribunal--Rectification of mistakes--Powers--Power to rectify any mistake apparent from record and make amendments--Order of Tribunal challenged in higher court--No bar either on assessee or on Revenue to invoke power of rectification--Principle of judicial propriety has no application-- R. W. Promotions P. Ltd. v. ITAT (Bom) . . . 126

S. 254(2A) --Appeal to Appellate Tribunal--Power of Tribunal to grant stay--Limited to total period of three hundred and sixty-five days from date of initial stay--Assessee’s appeal listed for hearing but not taken up for reasons not attributable to assessee--Stay continued till disposal of appeal--Tribunal directed to expedite disposal of appeal-- New Delhi Television Ltd. v. Deputy CIT (Delhi) . . . 51

----Appeal to Appellate Tribunal--Powers--Power to extend stay of demand beyond period of three hundred and sixty-five days--Tribunal to pass speaking order on each application and record satisfaction--If Revenue aggrieved by such extension in a particular case--Revenue can challenge before High Court-- Deputy CIT (TDS) v. Vodafone Essar Gujarat Ltd. (Guj) . . . 23

S. 271(1)(c) --Penalty--Concealment of income--Furnishing inaccurate particulars of income--Seized record showing assessee making payment to U. P. Distillers Association--Omission on part of assessee to answer question as regards payment--Presumption of concealment of income--Assessee disclosing additional income only after investigation by Director of Income-tax with certain evidence--Levy of penalty justified-- CIT v. Balarampur Chini Mills Ltd. (Cal) . . .1

 

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Posted by: CA RAJU SHAH <shahmars@hotmail.com>