Section 92C of the Income-tax Act, 1961 - Transfer pricing - Computation of arm's length price

IT/ILT : Where Commissioner (Appeals) in TP adjustment had calculated 6 per cent mark up after excluding value of raw material supplied to assessee free of cost by AE, in accordance with course of action adopted by department in immediate preceding year, same was to be upheld
■■■
[2014] 52 taxmann.com 476 (Mumbai - Trib.)
IN THE ITAT MUMBAI BENCH 'K'
Assistant Commissioner of Income-tax, 8 (1), Mumbai
v.
Cherokee India (P.) Ltd.*
I.P. BANSAL, JUDICIAL MEMBER
AND RAJENDRA, ACCOUNTANT MEMBER
IT APPEAL NO. 7737 (MUM.) OF 2012
[ASSESSMENT YEAR 2008-08]
NOVEMBER  20, 2014
Section 92C of the Income-tax Act, 1961 - Transfer pricing - Computation of arm's length price (Comparables and adjustments) - Assessment year 2008-09 - Commissioner (Appeals) while calculating TP adjustment for purpose of calculating 6 per cent mark up excluded value of raw material supplied to assessee free of cost by AE - Whether since Commissioner (Appeals) had calculated TP adjustment in accordance with course of action adopted by Department in respect of immediate preceding year i.e. for assessment year 2007-08, same was to be upheld - Held, yes[Para 5][In favour of assessee] 

Section 92C of the Income-tax Act, 1961, read with rule 46A of the Income-Tax Rules, 1962

IT/ILT : Where TPO included a different percentage while calculating arithmetic mean of OP/TC of comparable companies and Commissioner (Appeals) substituted same with correct OP/TC as was given to TPO by assessee, there was no admission of additional evidence at end of Commissioner (Appeals)
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[2014] 52 taxmann.com 396 (Delhi - Trib.)
IN THE ITAT DELHI BENCH 'I'
Assistant Commissioner of Income-tax, Circle 3 (1), New Delhi
v.
Convergys India Service (P.) Ltd.*
R.S. SYAL, ACCOUNTANT MEMBER
AND I.C. SUDHIR, JUDICIAL MEMBER
IT APPEAL NO. 206 (DELHI) OF 2010
[ASSESSMENT YEAR 2005-06]
NOVEMBER  28, 2014
Section 92C of the Income-tax Act, 1961, read with rule 46A of the Income-Tax Rules, 1962 - Transfer pricing - Computation of arm's length price (Comparables and adjustments) - Assessment year 2005-06 - Whether, where assessee calculated unadjusted operating profit/total cost of companies and detailed calculation was given to Transfer Pricing Officer and without adversely commenting on such calculation, Transfer Pricing Officer included different percentages while calculating arithmetic mean of operating profit/total cost of comparable companies and Commissioner (Appeals) substituted correct operating profit/total Cost as was given to Transfer Pricing Officer, there was no admission of any additional evidence at Commissioner (Appeals)'s end in contravention of rule 46A(3) - Held, yes [Paras 4 and 6] [In favour of assessee] 

Section 271 of the Companies Act, 2013/Section 433 of the Companies Act, 1956

CL : Where appellant company had given cheques to respondent company but same were dishonoured of appellant-company failed to discharge its onus to prove that it had no liability to pay to respondent, winding up petition against it was to be admitted
■■■
[2015] 53 taxmann.com 329 (Calcutta)
HIGH COURT OF CALCUTTA
SSS Loha Marketing (P.) Ltd.
v.
Bibby Financial Service India (P.) Ltd.
ASHIM KUMAR BANERJEE AND ASHIS KUMAR CHAKRABORTY, JJ.
A.P.O. NOS. 302 & 452 OF 2014†
C.P. NO. 552 OF 2013
DECEMBER  2, 2014
Section 271 of the Companies Act, 2013/Section 433 of the Companies Act, 1956, read with Section 138 of the Negotiable Instruments Act, 1881 - Winding up - Circumstances in which a company may be wound up - Appellant company had given cheques to respondent company but same were dishonoured - Respondent filed winding up petition against appellant - Whether since appellant had failed to discharge its onus that it had no liability to pay to respondent and had failed to give particulars of payment allegedly made, appellant-company having admitted its liability was to be ordered to be wound up - Held, yes [Paras 17 and 18]

Section 48 of the Uttar Pradesh Value Added Tax Act, 2008 - Goods - Power to seize

CST & VAT : U.P. VAT : Where Authorised Officer intercepted a new chassis and owner told that he was taking same from Jaipur to Moradabad for getting its body built, seizure of chassis on ground that it was being taken to Moradabad for sale by evading payment of tax was patently illegal
■■■
[2014] 51 taxmann.com 496 (Allahabad)
HIGH COURT OF ALLAHABAD
Raphik Mohammad
v.
Commissioner of Commercial Tax, U.P.*
SUDHIR AGARWAL, J.
SALES/ TRADE TAX REVISION NO. 102 OF 2014
APRIL  17, 2014
Section 48 of the Uttar Pradesh Value Added Tax Act, 2008 - Goods - Power to seize - Authorised Officer intercepted a new chassis of goods carrier with temporary registration number near Ghaziabad - Driver, who was also owner of chassis, on enquiry told that he was taking chassis from Jaipur to Moradabad for getting its body built and not for sale - Except temporary registration certificate and insurance certificate, driver did not possess any other document - Authorised Officer forming an opinion that chassis was being taken to Moradabad or elsewhere in U.P. for sale by evading payment of tax seized same and demanded a cash security for releasing it - Whether seizure of chassis from its very inception was patently illegal and amounted to gross abuse of process of law - Held, yes [Para 6] [In favour of assessee]

Section 69B, read with section 142A, of the Income-tax Act, 1961 - Undisclosed investments

T : Where there was minor difference in valuation report of DVO and assessee's valuer regarding cost of construction, addition made as undisclosed investment could not be sustained
IT : Addition made on account of undisclosed investment in purchase of land solely on basis of DVO's report was not proper
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[2014] 52 taxmann.com 54 (Gujarat)
HIGH COURT OF GUJARAT
Commissioner of Income-tax-I
v.
Jayendra N. Shah*
AKIL KURESHI AND MS. SONIA GOKANI, JJ.
TAX APPEAL NOS. 27 TO 29 OF 2014†
JANUARY  17, 2014
I- Section 69B, read with section 142A, of the Income-tax Act, 1961 - Undisclosed investments (Cost of construction) - Assessment years 2008-09 to 2010-11 - Following search proceedings, Assessing Officer found that there was undisclosed investment in cost of construction of bunglow shown by assessee - He accordingly referred matter to DVO and based on report of DVO made addition to income of assessee - Commissioner (Appeals) having found that there was hardly any substantial difference between valuation report of DVO and assessee's valuer, deleted addition - Whether there was no infirmity in impugned order - Held, yes [Para 8] [In favour of assessee]
II- Section 69B of the Income-tax Act, 1961 - Undisclosed investments (Investment in immovable property) - Assessment years 2008-09 to 2010-11 - Assessing Officer made addition on account of undisclosed investment in purchase of land - Whether since addition was made merely on basis of DVO's report without there being any other material, same was to be deleted - Held, yes [Para 9] [In favour of assessee]
K.M. Parikh, Advocate for the Appellant.

Section 37(1) of the Income-tax Act, 1961 - Business expenditure

IT : Expenditure incurred by assessee on construction of storage sheds on leasehold land is revenue in nature
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[2015] 53 taxmann.com 148 (Chennai - Trib.)
IN THE ITAT CHENNAI BENCH 'A'
Jayakrishna Flour Mills (P.) Ltd.
v.
Assistant Commissioner of Income-tax, Co. Circle, Salem*
DR. O.K. NARAYANAN, VICE-PRESIDENT
AND VIKAS AWASTHY, JUDICIAL MEMBER
IT APPEAL NO. 700 (MDS.) OF 2013
[ASSESSMENT YEAR 2009-10]
OCTOBER  27, 2014
Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of (Construction expenses) - Assessment year 2009-10 - Assessee was running a floor mill - It was allotted four storage depot, i.e., open land, without sheds, on leasehold basis - It contributed for construction of sheds on that space which helped it to secure lower monthly lease rents - Whether expenditure incurred by assessee on construction of sheds would be revenue expenditure - Held, yes [Para 6] [In favour of assessee]

Show cause notice to assessee issued by CIT u/s 263

IT : Where show cause notice to assessee issued by CIT u/s 263 set out grounds for revision as 'inadmissible deductions', revision order cannot be made by CIT on the grounds of 'lack of proper inquiries' by AO. A revision order can only be, made on the ground on which assessee has been given a reasonable opportunity of being heard. It is not open to the CIT to set out one reason for revising the order in show cause notice but actually revise the order on some other ground
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[2015] 53 taxmann.com 402 (Delhi - Trib.)
IN THE ITAT DELHI BENCH 'A'
B.S. Sangwan
v.
Income-tax Officer, Ward -2, Sonipat
PRAMOD KUMAR, ACCOUNTANT MEMBER
AND C.M. GARG, JUDICIAL MEMBER
IT APPEAL NO. 2680 (DELHI) OF 2011
[ASSESSMENT YEAR 2007-08]
JANUARY  21, 2015
Naveen C. Gupta for the Appellant. A. Mishra for the Respondent.

Twitter outrage as Facebook, Instagram, Tinder go down worldwide

Facebook, Tinder and Instagram are in the midst of a worldwide outrage following disruptions in services on Tuesday. According to Mashable, mobile apps and website versions of the sites have gone down for some users, while others have been experiencing intermittent issues since 12:10 a.m. EST, according to downdetector.com, which monitors disruptions to Facebook's services.
Representational Image File Photo
Facebook, Tinder and Instagram are in the midst of a worldwide outrage following disruptions in services on Tuesday. According to Mashable, mobile apps and website versions of the sites have gone down for some users, while others have been experiencing intermittent issues since 12:10 a.m. EST, according to downdetector.com, which monitors disruptions to Facebook's services.

Angry users took to Twitter to lash out at the social media platforms after Facebook and Instagram crashed suddenly. Facebook, which also owns Instagram, issued a statement saying "We're aware that many people are currently having trouble accessing Facebook and Instagram. We're working to get things back to normal as quickly as possible," the report added.Source:http://www.dnaindia.com/

Section 12A, read with sections 12AA and 2(15) of the Income-tax Act, 1961

IT: Where assessee had complied with all conditions necessary for grant of registration under section 12AA and since assessee was only a single entity but consisted of different colleges/institutions, operating under such single entity, assessee company was to be granted registration under section 12AA
■■■
[2015] 53 taxmann.com 166 (Hyderabad - Trib.)
IN THE ITAT HYDERABAD BENCH 'A'
Mahindra Educational Institutions
v.
Director of Income-tax (Exemptions), Hyderabad*
P.M. JAGTAP, ACCOUNTANT MEMBER
AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER
IT APPEAL NO. 1338 (HYD.) OF 2014
NOVEMBER  28, 2014
Section 12A, read with sections 12AA and 2(15) of the Income-tax Act, 1961 - Charitable or religious trust - Registration of (Conditions precedent) - Assessee a private limited company, applied for registration under section 12AA - DIT(E) held that as per statutory Form No. 10A and also under sections 12A and 12AA assessee had to be single institution i.e, single entity, and since name of assessee-company indicated a cluster of institutions, registeration was refused - Whether once Commissioner is satisfied about genuineness of activities of trust and objects of trust, he shall grant registration - Held, yes - Whether since assessee had complied with all conditions necessary for grant of registration under section 12AA and since 'institutions' was used as singular noun rather than to bring more than one entity and also that assessee was only a single entity but consisted of different colleges/institutions operating under such single entity, DIT(E) was to be directed to grant registration to assessee company under section 12AA - Held, yes [Paras 10 & 11] [In favour of assessee]

Rule 8 of the Central Excise Rules, 2002 read with section 11A of the Central Excise Act, 1944

Excise & Customs : Tribunal, being a creature of statute, cannot go into vires of provisions of Central Excise Rules, 2002
■■■
[2014] 52 taxmann.com 389 (Mumbai - CESTAT)
CESTAT, MUMBAI BENCH
Bhadramaruti Concost (P.) Ltd.
v.
Commissioner of Central Excise, Aurangabad*
P.R. CHANDRASEKHARAN, TECHNICAL MEMBER
AND ANIL CHOUDHARY, JUDICIAL MEMBER
ORDER NO. M/667/14/EB/C-II
APPLICATION NO. E/MODF/92306/2014
APPEAL NO. E/88690/2013
FEBRUARY  19, 2014
Rule 8 of the Central Excise Rules, 2002 read with section 11A of the Central Excise Act, 1944 - Payment - Withdrawal of Facility of Monthly Payment of Excise Duty - Stay Order - On default in payment of duty beyond 30 days, Department asked assessee to pay all duties in cash without using CENVAT - Tribunal ordered pre-deposit - Assessee filed a modification application seeking modification in pre-deposit relying upon SNE India (P.) Ltd. v. CCE [2014] 43 taxmann.com 86 (New Delhi - CESTAT), wherein a difference of opinion arose whether assessee should be directed to make payment in cash where payment of duty had been in default for more than 30 days - HELD : A difference of opinion is not order at all - Further, while passing impugned order, Tribunal took cognizance of decision of High Courts of Karnataka and Madras, wherein it had been held that if there is a default in payment of excise duty for more than 30 days, assessee cannot avail benefit of CENVAT Credit - Order of High Court prevails over any order of Tribunal - Hence, assessee's plea was unacceptable but time-limit to make pre-deposit was extended [Paras 1 & 2] [In favour of revenue]

Section 3, read with section 42, of the Foreign Exchange Management Act

FEMA : Order imposing penalty upon appellant-director for contravention of section 8 of FERA was set aside when appellant was not a director incharge of company at relevant time when offence was committed
■■■
[2015] 53 taxmann.com 132 (Delhi)
HIGH COURT OF DELHI
Umesh K. Modi
v.
Deputy Director of Enforcement
S. MURALIDHAR, J.
CRL. A. NO. 568 OF 2008†
JULY  31, 2014
Section 3, read with section 42, of the Foreign Exchange Management Act, 1999/Section 8, read with section 68, of the Foreign Exchange Regulation Act, 1973 - Restrictions on dealing in foreign exchange - Whether where appellant was not a director incharge of company when contravention of section 8 took place and also had discharged his burden in terms of section 68(2), order imposing penalty upon appellant for contravention of sections 8 and 68 was to be set aside - Held, yes [Paras 18, 19 & 20]

Section 43B of the Income-tax Act, 1961 - Business disallowance

IT: Section 43B applicable to both employees' and employer's contributions
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[2015] 53 taxmann.com 141 (Bombay)
HIGH COURT OF BOMBAY
Commissioner of Income-tax, (Central), Pune
v.
Ghatge Patil Transports Ltd.*
S.C. DHARMADHIKARI AND A.K. MENON, JJ.
IT APPEAL NOS. 1002 & 1034 OF 2012
OCTOBER  14, 2014
Section 43B of the Income-tax Act, 1961 - Business disallowance - Certain deductions to be allowed only on actual payment (Employees' contribution) - Whether both employees' and employer's contributions are covered under amendment to section 43B and judgment of Supreme Court in CIT v. Alom Extrusions Ltd. [2009] 319 ITR 306/185 Taxman 416 - Held, yes - Whether thus Tribunal was right in holding that payments thereof are subject to benefits of section 43B and hence, deduction was allowable - Held, yes [Para 16][In favour of assessee]

Section 24 of the Income-tax Act, 1961 - Income from house property - Deductions (Interest)

IT : Interest payable to sundry creditors, who supplied material for construction of property, is an allowable deduction under section 24(b)
■■■
[2015] 53 taxmann.com 168 (Delhi - Trib.)
IN THE ITAT DELHI BENCH 'D'
Jyoti Metal & Allied Industries (P.) Ltd.
v.
Income-tax Officer, Ward 4(2), New Delhi*
S.V. MEHROTRA, ACCOUNTANT MEMBER
AND A.T. VARKEY, JUDICIAL MEMBER
IT APPEAL NOS. 1824 & 3473 (DELHI) OF 2010
[ASSESSMENT YEARS 2005-06 & 2007-08]
OCTOBER  31, 2014
Section 24 of the Income-tax Act, 1961 - Income from house property - Deductions (Interest) - Assessment year 2005-06 - Whether interest payable to sundry creditors, who supplied material for construction of property, is an allowable deduction under section 24(b) - Held, yes [Paras 3 and 4] [Matter remanded]
Words and Phrases : 'Borrowed capital' as occurring in section 24(b) of the Income-tax Act, 1961

Sebi to exempt promoters of SpiceJet from open offer

The Securities and Exchange Board of India (Sebi) is expected to exempt the new promoters of the beleaguered low-cost carrier SpiceJet from making an open offer to minority shareholders if the ministry of civil aviation gives it the necessary nod.
A senior Sebi official pointed out that a mere request from the ministry would not suffice and it would need to refer the case to it as an ‘appropriate order’ under The Aircraft Act.
On January 15, SpiceJet informed the BSE that Kalanithi Maran and his associates had decided to transfer the ownership and management control of the airline to Ajay Singh, former promoter and his associates. Singh has submitted a revival plan for the airline to the ministry and is expected to infuse R1,500 crore in tranches, into the loss-making airline.
Singh met the capital market regulator to make a case for an exemption from an open offer. The SpiceJet stock closed at 23, up 0.45%, on the Bombay Stock Exchange on Tuesday.
“If the ministry recommends that the promoters be excused from making an open offer because the airline is terminally ill and that such an exemption would be in the larger interest of the public,” we are likely to support that,” the official told FE. He explained that if the company concerned was a BIFR case, the law specifically exempts promoters from making an open offer. Since SpiceJet is close to being a BIFR case, Sebi would have no objection to extending to the same dispensation to the new promoters.

Sebi orders broker to refund money within 7 days

Cracking down on a illegal money pooling activity running into an estimated Rs 5,000 crore, Sebi today barred an individual broker from mobilising funds from public while also asking him to refund investors money within a period of seven days.

Sameer S Joshi, a sub-broker with trade name Shreesurya Investments, has also been restrained from dealing in the securities market, till further directions.



A preliminary probe by Securities and Exchange Board of India (Sebi) found that Joshi was soliciting money from clients under various schemes by making "unrealistic claims of high returns".

Shreesurya Investments has allegedly cornered more than Rs 5,000 crores from 6,000 investors.

According to the regulator's findings, Joshi was promising investors in Nagpur to double their money within 15-28 months or pay 50 per cent interest rate per annum on quarterly basis besides providing free foreign trips.

Push for 'Make in India': Government set to correct taxation anomalies

To make it more attractive to produce a range of products from diapers to LED lamps and boilers to textiles and electronics in India, the government is looking to correct anomalies in the taxation structure that make it cheaper to import such products than manufacture them locally.

With an eye on boosting the Make In India programme, the finance ministry has asked the Tariff Commission to examine the industry's submissions about inverted duty structures in a range of sectors such as textiles, capital goods, engineering products, aluminium, steel and copper products, and yes, diapers.

Inverted duties occur when the import duties on a finished product are lower than the import duties on its raw materials that local manufacturers need to rely on.

The basic customs duty on diapers, for instance, is 10.64% with a countervailing duty of 6.18%. However, the import duties on the raw materials for diapers — poly film, lycra thread, waist elastic and super-absorbent material — are far higher. Imports from the Asean countries, which enjoy a special customs duty of just 3% on diapers, become more competitive.

"Such a duty structure means the Indian manufacturer can't compete with imported alternatives," said an official, adding that there is a significant surge in imports in such sectors at the cost of idling domestic capacities.

Section 92C of the Income-tax Act, 1961 - Transfer pricing

IT/ILT : Where loans taken by assessee from its AE were interest free for initial period of seven years and when said period of moratorium was taken into account, effective rate of interest incurred by assessee was lower than arm's length rate of interest considered by TPO, adjustment made to assessee's ALP on aforesaid ground was to be set aside
IT/ILT : Where rate of interest paid by assessee to its AE in respect of Extra Commercial Borrowing (ECB) was lower than rate of interest paid by said AE to an independent concern, transaction of payment of interest in question was to be regarded as carried out at arm's length price
IT/ILT : In respect of import of capital goods from AE, Commissioner (Appeals) was justified in making addition to assessee's ALP by adopting 10 per cent markup over and above cost of capital goods
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[2015] 53 taxmann.com 169 (Pune - Trib.)
IN THE ITAT PUNE BENCH 'B'
Goodyear South Asia Tyres (P.) Ltd.
v.
Assistant Commissioner of Income-tax, Circle-1, Aurangabad*
G.S.PANNU, ACCOUNTANT MEMBER
AND R.S. PADVEKAR, JUDICIAL MEMBER
IT APPEAL NOS. 1431 (PN.) OF 2010,1868 & 1869,1882 & 1883 (PN.) OF 2012
[ASSESSMENT YEARS 2005-06 TO 2007-08]
NOVEMBER  28, 2014
I. Section 92C of the Income-tax Act, 1961 - Transfer pricing - Computation of arm’s length price (Comparables and adjustments**) - Assessment years 2005-06 to 2007-08 - Assessee-company was engaged in business of manufacture and sale of automotive tyres, tubes, flaps etc. - Assessee raised technical knowhow loan and foreign currency cash loan against import of capital goods from its AE carrying interest rate at 12 per cent per annum - TPO compared international transaction of payment of interest on aforesaid loans with ceiling prescribed by Reserve Bank of India (RBI) for payment of interest on ECB loans for previous year under consideration, which stood at LIBOR plus 2 per cent and, accordingly, made addition to assessee's ALP - It was noted that loans raised by assessee were interest free for initial period of seven years and when said period of moratorium was taken into account, effective rate of interest incurred by assessee was lower than arm's length rate of interest considered by TPO - Whether in view of above, impugned adjustment made by TPO was to be set aside - Held, yes [Para 22] [In favour of assessee]

Section 2(h), read with section 4, of the Competition Act, 2002 - Enterpris

Competition Act : Registrar of co-operative society while discharging its regulatory and statutory mandate cannot be said to fall within purview of terms enterprise as defined in section 2(h)
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[2015] 53 taxmann.com 272 (CCI)
COMPETITION COMMISSION OF INDIA
Malwa Industrial & Marketing Ferti-chem Co-operative Society Ltd. (MIFCO)
v.
Registrar, Co-operative Societies, Punjab
ASHOK CHAWLA, CHAIRPERSON
S.L. BUNKER, SUDHIR MITAL,
AUGUSTINE PETER AND U.C. NAHTA, MEMBER
CASE NO. 31 OF 2014
NOVEMBER  18, 2014
Section 2(h), read with section 4, of the Competition Act, 2002 - Enterprise - Definition of - Whether regulatory functions are not per se amenable to jurisdiction of Commission - Held, yes - Whether Registrar of co-operative society while discharging its regulatory and statutory mandate cannot be said to fall within purview of terms enterprise as defined in section 2(h) - Held, yes [Paras 16, 17, 18 & 19]

Section 142 of the Income-tax Act, 1961 - Inquiry before assessment

IT: Where revenue failed to indicate complexity in accounts of assessee-company, order appointing special auditor to audit assessee's account was unjustified
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[2015] 53 taxmann.com 144 (Bombay)
HIGH COURT OF BOMBAY
Nickunj Eximp Enterprises (P.) Ltd.
v.
Assistant Commissioner of Income-tax, Range 1(2)*
M. S. SANKLECHA AND N. M. JAMDAR, JJ.
WRIT PETITION NO. 2798 OF 2012
SEPTEMBER  30, 2014
Section 142 of the Income-tax Act, 1961 - Inquiry before assessment (Special Audit) (Books of account) - Assessment year 2009-10 - Whether where revenue did not indicate any reasons why accounts of assessee-company were found complex for relevant year, non-furnishing of reasons would cause prejudice to assessee, which would lead to breach of principles of natural justice - Held, yes - Whether, therefore, order appointing special auditor to audit assessee's account was unjustified - Held, yes [Para 5] [In favour of assessee]

Section 92CA, read with section 263, of the Income-tax Act, 1961 - Transfer pricing

IT: When no return is pending for consideration by AO, reference by him to TPO will be bad; if TPO finds no fault with ALP determined by AO, revision was unjustified
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[2014] 51 taxmann.com 296 (Karnataka)
HIGH COURT OF KARNATAKA
Commissioner of Income-tax, Bangalore
v.
SAP Labs (P.) Ltd.*
N. KUMAR AND MRS. RATHNAKALA, JJ.
IT APPEAL NOS. 842 OF 2008 & 339 OF 2010†
AUGUST  25, 2014
Section 92CA, read with section 263, of the Income-tax Act, 1961 - Transfer pricing - Reference to TPO (Revision) - Assessment year 2002-03 - Whether where on day reference was made by Assessing Authority to Transfer Pricing Authority, there is no return pending for consideration by Assessing Authority, reference made to Transfer Pricing Authority (TPA) was bad - Held, yes - Whether otherwise, where TPA did not find fault with adjudication of determining arms length price by Assessing Authority, Commissioner committed an error in exercising power under section 263 - Held, yes [Para 4] [In favour of assessee]

Section 143 of the Income-tax Act, 1961 - Assessment - General (Completion

IT : Issue of intimation under section 143(1) cannot amount to completion of assessment under section 139(5) disabling assessee from filing a revised return
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[2014] 52 taxmann.com 480 (Calcutta)
HIGH COURT OF CALCUTTA
Tata Metaliks Ltd
v.
Commissioner of Income-tax,- III, Kolkata*
SOUMITRA PAL AND ARINDAM SINHA, JJ.
IT APPEAL NO. 301 OF 2005†
SEPTEMBER  22, 2014
Section 143 of the Income-tax Act, 1961 - Assessment - General (Completion) - Assessment year 1999-2000 - Whether issue of intimation under section 143 for assessment cannot be said to be completion of assessment within meaning of section 139(5); hence, assesee would not be disabled from filing a revised return - Held, yes [Para 11] [In favour of assessee]

Section 19, read with section 49, of the Foreign Exchange Management Act

FEMA : If within sunset period under section 49(3) of FEMA, a revision petition was filed under section 52(4) of FERA, such revision petition would continue before Appellate Tribunal even after repeal of FERA
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[2015] 53 taxmann.com 133 (Delhi)
HIGH COURT OF DELHI
Rakesh Jain
v.
Union of India
S. MURALIDHAR, J.
CRL. A. NOS. 630,756 & 818 OF 2008†
SEPTEMBER  24, 2014
Section 19, read with section 49, of the Foreign Exchange Management Act, 1999/Section 52 of the Foreign Exchange Regulation Act, 1973 - Appellate Board - Appeal to - Whether if within sunset period under section 49(3) of FEMA, a revision petition was filed under section 52(4) of FERA, such revision petition would continue before Appellate Tribunal even after repeal of FERA - Held, yes [Para 18]
Section 42 of the Foreign Exchange Management Act, 1999/Section 68 of the Foreign Exchange Regulation Act, 1973 - Offences by companies - Whether for purposes of section 68 where contravention is by a company, liability cannot be fastened on its directors if company itself is not proceeded against - Held, yes [Para 25]

Section 2(29A), read with section 2(42A), of the Income-tax Act, 1961 - Capital gains

IT : Where assessee had entered into an agreement with builder for purchase of undivided share of land and construction, date of allotment of undivided share in land was to be adopted as date of acquisition for computing capital gain instead of date of sale deed
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[2015] 53 taxmann.com 107 (Madras)
HIGH COURT OF MADRAS
Commissioner of Income-tax, Salary Circle, Chennai
v.
S.R.Jeyashankar*
R. SUDHAKAR AND R. KARUPPIAH, JJ.
TAX CASE (APPEAL) NO. 976 OF 2014†
NOVEMBER  25, 2014
Section 2(29A), read with section 2(42A), of the Income-tax Act, 1961 - Capital gains - Long term capital gains (Land and building) - Assessment year 2009-10 - Whether where assessee had entered into an agreement with builder for purchase of undivided share of land and construction, date of allotment of undivided share in land was to be adopted as date of acquisition for computing capital gain instead of date of sale deed - Held, yes [Para 10] [In favour of assessee]
Circulars and Notifications : Circular No. 471 dated 15-10-1986

Section 2(47), read with sections 45, 142 and 143, of the Income-tax Act, 1961 - Capital gains

IT : Where assessees divested possession of land to developer and in lieu of that assessees would receive consideration in form of 50 per cent constructed area, capital gain accrued to assessees on account of transfer of land
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[2014] 52 taxmann.com 511 (Bangalore - Trib.)
IN THE ITAT BANGALORE BENCH 'A'
Income-tax Officer, Ward 7 (2), Bangalore
v.
N.S. Nagaraj*
RAJPAL YADAV, JUDICIAL MEMBER
AND ABRAHAM P. GEORGE, ACCOUNTANT MEMBER
IT APPEAL NO. 676 (BANG.) OF 2011
C.O. NO. 45 (BANG.) OF 2013
[ASSESSMENT YEAR 2007-08]
DECEMBER  1, 2014
Section 2(47), read with sections 45, 142 and 143, of the Income-tax Act, 1961 - Capital gains - Transfer (Land) - Assessment year 2007-08 - Assessing Officer found that assessees were owner and in possession of land and they entered into a joint development agreement with a company - Assessing Officer was of view that as per agreement transfer of land had taken place and assessees were assessable for long term capital gain - Assessees submitted that on execution of said agreement, no transfer had taken place - However, assessees had relinquished their rights in land upon which developer had incurred cost of construction and developed property and in lieu of that assessees would receive 50 per cent constructed area as a consideration - Whether therefore, transfer of land had taken place according to section 2(47)(v) - Held, yes [Paras 12,13 and 15] [In favour of revenue]

Section 144C, read with section 263, of the Income-tax Act, 1961

IT/ILT : Non-compliance of provisions of section 144C itself proves that there is error in order passed by Assessing Officer and said order tantamounts to order being erroneous and prejudicial to interest of revenue
IT/ILT : When assessment order was very much in existence and assessee had come in appeal against order passed under section 263, Tribunal did not have jurisdiction to hold assessment order illegal and void
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[2015] 53 taxmann.com 30 (Panaji - Trib.)
IN THE ITAT PANAJI BENCH
Gigabyte Technology (India) (P.) Ltd.
v.
Commissioner of Income-tax, Goa*
P.K. BANSAL, ACCOUNTANT MEMBER
AND D.T. GARASIA, JUDICIAL MEMBER
IT APPEAL NOS. 51 & 52 (PNJ.) OF 2012
[ASSESSMENT YEAR 2006-07]
OCTOBER  31, 2014
Section 144C, read with section 263, of the Income-tax Act, 1961 - Dispute Resolution Panel (Revision) - Assessment year 2006-07 - Whether non-compliance of provisions of section 144C, i.e, providing opportunity of hearing to assessee, itself proves that there is error in order passed by Assessing Officer and said order tantamounts to order being erroneous and prejudicial to interest of revenue - Held, yes [Para 4.8] [In favour of revenue]
Section 254, read with sections 263 and 144C, of the Income-tax Act, 1961 - Appellate Tribunal - Powers of (Revision, effect of) - Assessment year 2006-07 - Whether when assessment order was very much in existence and assessee had come in appeal against order passed under section 263, Tribunal did not have jurisdiction to examine and hold that assessment order passed by Assessing Officer in violation of section 144C(2) was illegal and void - Held, yes [Para 4.7] [In favour of revenue]

Section 9, read with section 195, of the Income-tax Act, 1961 read with article 11 of the OECD

IT/ILT : Where interest payment made by Indian branch of assessee to its head office abroad was allowed as deduction in computing profits of assessee's branch in India, therefore, section 195 would not be applicable on said payment
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[2015] 53 taxmann.com 105 (Calcutta)
HIGH COURT OF CALCUTTA
Bank of Tokyo Mitsubishi Ltd.
v.
Director of Income-tax, International Taxation, Mumbai*
SOUMITRA PAL AND ARINDAM SINHA, JJ.
IT APPEAL NO.175 OF 2004†
NOVEMBER  17, 2014
Section 9, read with section 195, of the Income-tax Act, 1961 read with article 11 of the OECD Model Convention - Income - Deemed to accrue or arise in India (Interest) - Assessment year 1995-96 - Whether interest payment made by Indian branch of assessee to its head office abroad was to be allowed as deduction in computing profits of assessee's branch in India - Held, yes - Whether assessee was not liable to pay any tax on said payment under section 195 - Held, yes [Para 2] [In favour of assessee]

Reopening of assessment on basis of valuation of godown constructed by assessee

IT: Reopening of assessment on basis of valuation of godown constructed by assessee, by valuation cell could not be said to be without any basis
IT: If on any aspect of appeal, appellate forum is silent, it can be deemed to have concurred with view expressed by forum from which order under appeal has arisen and it would not be considered as mistake apparent from record
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[2015] 53 taxmann.com 36 (Andhra Pradesh)
HIGH COURT OF ANDHRA PRADESH
Pothina Venkateswara Swamy*
v.
Assistant Commissioner of Income-tax, Central Circle, Vijayawada
L. NARASIMHA REDDY AND T. SUNIL CHOWDARY, JJ.
ITTA NOS. 125 & 126 OF 2002†
SEPTEMBER  5, 2014
Section 69B, read with section 147, of the Income-tax Act, 1961 - Undisclosed investments (Construction expenses) - Assessment year 1992-93 - Assessees jointly constructed a godown and showed certain cost of construction in their returns - Assessments were made accordingly - Thereafter, Assessing Officer reopened assessments on ground that valuation cell of department determined cost of construction at higher figure - He made addition under section 69B of amount of difference between cost of construction admitted in assessment and value determined by valuation cell - Whether reopening of assessment was justified - Held, yes [Para 7][In favour of revenue]
Section 254 of the Income-tax Act, 1961 - Appellate Tribunal - Powers of (Power to rectify mistake) - Assessment year 1992-93 - Whether Tribunal should be deemed to have taken into account every aspect of appeal that is placed before it, and if on any aspect of appeal appellate forum is silent, it can be deemed to have concurred with view expressed by forum from which order under appeal has arisen and it would not be deemed to be mistake apparent from record - Held, yes [Paras 11 & 13][In favour of revenue]

Section 92C of the Income-tax Act, 1961 - Transfer pricing

IT/ILT: For Computing arm's length price, a Company under serious indictment in fraud cases is to be excluded from list of comparables on ground of unreliability of data
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[2015] 53 taxmann.com 19 (Mumbai - Trib.)
IN THE ITAT MUMBAI BENCH 'K'
Stream International Services (P.) Ltd.
v.
Assistant Commissioner of Income-tax- 7 (2), Mumbai*
N.K. BILLAIYA, ACCOUNTANT MEMBER
AND AMIT SHUKLA, JUDICIAL MEMBER
IT APPEAL NO. 8290 (MUM.) OF 2011
[ASSESSMENT YEAR 2007-08]
OCTOBER  10, 2014
Section 92C of the Income-tax Act, 1961 - Transfer pricing - Computation of arm's length price (Comparables and adjustments) - Assessment year 2007-08 - Whether where company was under serious indictment in fraud cases it should be excluded from list of comparables for computing arm's length price on ground of unreliability of data - Held, yes - Whether where a company has low employee cost to sales as compared to that of assessee and its related party transaction is 58 per cent to 59 per cent, it is to be excluded from list of comparables - Held, yes - Whether extraordinary events like merger and de-merger will impact profitability of companies and therefore such companies should be excluded from comparables - Held, yes - Whether where companies which are not functionally comparable are to be excluded from list of comparables - Held, yes [Para 13] [In favour of assessee]

Section 153, read with section 263 of the Income-tax Act, 1961 - Income escaping assessment

IT : Where pursuant to revisional order, Assessing Officer passed consequential assessment order after expiry of nine months from end of relevant year in which revisional order was passed, it was to be annulled being barred by limitation
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[2015] 53 taxmann.com 80 (Lucknow - Trib.)
IN THE ITAT LUCKNOW BENCH 'A'
Income-tax Officer
v.
Jheendu Ram*
SUNIL KUMAR YADAV, JUDICIAL MEMBER
AND A.K. GARODIA, ACCOUNTANT MEMBER
IT APPEAL NO. 565 (LKW.) OF 2013
JUNE  13, 2014
Section 153, read with section 263 of the Income-tax Act, 1961 - Income escaping assessment - Time limit for completion of reassessment (Sub-section (2A) - Assessment year 2006-07 - Whether where in pursuance of revisional order, Assessing Officer passed a consequential assessment order after expiry of nine months from end of relevant assessment year in which said revisional order was passed, in view of second proviso to sub-section (2A) of section 153, consequential order so passed was to be annulled being barred by limitation - Held, yes [Para 8] [In favour of assessee] 

Without recording requisite satisfaction under section 145(3) addition made on estimate basis was not justified

IT : Where Tribunal found that only administrative expenditure was incurred and that was estimated at 5 per cent of dividend earned, it was justified in restricting disallowance under section 14A at 5 per cent of dividend income
IT : Without recording requisite satisfaction under section 145(3) addition made on estimate basis was not justified
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[2015] 53 taxmann.com 20 (Bombay)
HIGH COURT OF BOMBAY
Commissioner of Income-tax-9, Mumbai
v.
Teletronics Dealing Systems (P.) Ltd.*
S.C. DHARMADHIKARI AND A.K. MENON, JJ.
IT APPEAL NO. 1296 OF 2012†
SEPTEMBER  25, 2014
Section 14A of the Income-tax Act, 1961, read with rule 8 of the Income-Tax Rules, 1962 - Expenditure incurred in relation to income not includible in total income (In case of certain incomes/Dividend) - Assessee earned dividend income and claimed exemption under section 10(34) - Assessing Officer worked out disallowance under section 14A by applying rule 8D - On appeal, Tribunal found that only administrative expenditure was incurred and that was estimated at 5 per cent of dividend earned - Whether Tribunal was justified in restricting disallowance under section 14A to 5 per cent of dividend income - Held, yes [Para 4] [In favour of assessee]
Section 145 of the Income-tax Act, 1961 - Method of Accounting - Rejection of books of account (Recording of reasons) - Whether without recording requisite satisfaction in terms of section 145(3) to reject books of account, Assessing Officer was not justified in making addition on estimate basis - Held, yes [Para 5] [In favour of assessee]

Section 2(14), read with section 37(1), of the Income-tax Act, 1961 - Capital gains

IT : On dissolution of firm, partners agreed to take over plots of land as co-owners and as capital assets; profit on sale of said plots would be treated as capital gain instead of business income
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[2014] 52 taxmann.com 491 (Bombay)
HIGH COURT OF BOMBAY
Arvind Shamji Chheda
v.
Commissioner of Income-tax, Mumbai City X*
S.C. DHARMADHIKARI AND A.K. MENON, JJ.
IT REFERENCE NO. 268 OF 1997
SEPTEMBER  12, 2014
Section 2(14), read with section 37(1), of the Income-tax Act, 1961 - Capital gains - Capital assets (Capital gain v. Business income) - Assessment year 1988-89 - Assessee and another partner of a construction firm purchased plots - A building was to be put upon said land but land remained vacant as nothing was done - On dissolution of firm, partners agreed to take over plots of land as co-owners and as capital assets - Whether since property did not seem to be stock in trade by execution of dissolution deed, profit on their sale would not be treated as business income; same was to be treated as capital gains - Held, yes [Paras 25 and 26] [In favour of assessee]

Assessee could not be imposed penalty under section 271(1)(b)

IT : Where assessee handed over summons to Chartered Accountant who could not appear due to his personal illness, assessee could not be imposed penalty under section 271(1)(b)
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[2014] 52 taxmann.com 405 (Allahabad)
HIGH COURT OF ALLAHABAD
Paramjeet Singh
v.
Commissioner of Income-tax, Allahabad*
TARUN AGARWALA AND DR. SATISH CHANDRA, JJ.
IT APPEAL NO. 5 OF 2006†
AUGUST  29, 2014
Section 271(1)(b) of the Income-tax Act, 1961 - Penalty (Failure to comply notice) - Assessment year 2003-04 - Assessee received summons issued by Assessing Officer personally and handed over same to Chartered Accountant who could not appear due to his personal illness - Assessing Officer levied penalty under section 271(1)(b) - Whether for fault of Chartered Accountant, assessee could not be punished and, therefore, penalty was to be deleted - Held, yes [Para 4] [In favour of assessee]

Rrevision was not justified

IT: Where assessing authority had already considered all details mentioned in computation statement which was taken from books of account maintained by assessee, revision was not justified
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[2014] 52 taxmann.com 92 (Karnataka)
HIGH COURT OF KARNATAKA
Commissioner of Income-tax, Bangalore
v.
Kurlon Ltd.*
N. KUMAR AND B. MANOHAR, JJ.
IT APPEAL NO. 404 OF 2008†
JULY  8, 2014
Section 263 of the Income-tax Act, 1961 - Revision - Of orders prejudicial to interest of revenue (General/Scope of) - Assessment year 2001-02 - In assessment order, after setting out facts and amounts under various heads Assessing Officer restricted benefit of provision of sections 80-IA(a) and 80HHC claimed by assessee - Subsequently, Commissioner initiated revision proceeding under section 263 on ground that certain expenses such as raw material, power and fuel, stores and spares etc., were prorated - Whether since assessing authority had already considered all details mentioned in computation statement which was taken from books of account maintained by assessee, Tribunal was justified in setting aside revision order passed by Commissioner - Held, yes [Para 6][In favour of assessee]

No addition under section 69 without disproving said evidences

IT : Where assessee explained source of bank deposit as sale proceed of agricultural land and produced copies of sale/purchase agreements, no addition under section 69 without disproving said evidences
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[2014] 51 taxmann.com 537 (Jodhpur - Trib.)
IN THE ITAT JODHPUR BENCH
Income-tax Officer
v.
Satish Kumar*
HARI OM MARATHA, JUDICIAL MEMBER
AND N.K. SAINI, ACCOUNTANT MEMBER
IT APPEAL NO. 357 (JODH.) OF 2013
CO. NO. 39 (JODH) OF 2013
[ASSESSMENT YEAR 2009-10]
APRIL  30, 2014
Section 69 of the Income-tax Act, 1961 - Unexplained money (Bank deposit) - Assessment year 2009-10 - Whether when any addition is proposed under provisions of section 69, it becomes bounden duty of Assessing Officer himself to prove that explanation of assessee is not correct - Held, yes - Assessee had made certain deposit in bank account - Before Assessing Officer, he explained that said amount was mainly out of sale proceeds of an agricultural land - He also produced agreements for purchase and sale of said land - However, Assessing Officer doubted said agreements noticing certain defects therein and added entire amount of bank deposit under section 69 - Whether agreements could not be treated as fabricated without there being any contrary evidence to wit and, therefore, addition was not justified - Held, yes [Para 6][In favour of assessee]

Assessee had made payment to its AE for providing reinsurance business without deducting tax at source ■■■

IT/ILT : Assessment order passed by Assessing Officer in case of assessee engaged in general insurance business after making detailed inquiries could not be revised on ground that assessee had made payment to its AE for providing reinsurance business without deducting tax at source
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[2014] 52 taxmann.com 471 (Mumbai - Trib.)
IN THE ITAT MUMBAI BENCH 'L'
ICICI Lombard General Insurance Co. Ltd.
v.
Assistant Commissioner of Income-tax, Range-10 (1), Mumbai*
D. MANMOHAN, VICE-PRESIDENT
AND N.K. BILLAIYA, ACCOUNTANT MEMBER
IT APPEAL NO. 5777 (MUM.) OF 2011
[ASSESSMENT YEAR 2005-06]
NOVEMBER  14, 2014
Section 9, read with sections 195 and 263, of the Income-tax Act, 1961 and article 7 of the DTAA between India and Singapore - Income - Deemed to accrue or arise in India (Business profits) - Assessment year 2005-06 - Whether where in case of assessee, engaged in general insurance business, Assessing Officer completed assessment under section 143(3) after making detailed enquiries, assessment order so passed could not be set aside by Commissioner in exercise of revisional power on ground that assessee had made payment to its AE for providing reinsurance business without deducting tax at source and thus said payment was liable to be disallowed - Held, yes [In favour of assessee]
Circulars and Notifications : Circular No. 759, dated 18-11-1997 and Circular No. 10, dated 9-10-2002

Where none was present on behalf of assessee, neither any adjournment was sought, appeals filed by assessee was to be dismissed

IT: Where none was present on behalf of assessee, neither any adjournment was sought, appeals filed by assessee was to be dismissed
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[2014] 51 taxmann.com 536 (Chandigarh - Trib.)
IN THE ITAT CHANDIGARH BENCH 'A'
Susham Singla
v.
Assistant Commissioner of Income-tax*
T.R. SOOD, ACCOUNTANT MEMBER
AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER
IT APPEAL NOS. 915 TO 921 (CHD.) OF 2013
[ASSESSMENT YEARS 2001-02 TO 2007-08]
JUNE  5, 2014
Section 253 of the Income-tax Act, 1961 read with rule 19(2) of the Income-tax (Appellate Tribunal) Rules, 1962 - Appellate Tribunal - Appeals to (Dismissal of) - Assessment years 2001-02 to 2007-08 - Whether, where none was present on behalf of assessee for hearing, neither any adjournment was sought, appeals filed by assessee was to be dismissed keeping in view provisions of rule 19(2) of Income-tax (Appellate Tribunal) Rules - Held, yes [Paras 6 & 7] [In favour of revenue]

Advancement of interest free loan by a charitable institution to other having similar objects is not in violation of provisions of section 13(1)(d)

IT-I : Advancement of interest free loan by a charitable institution to other having similar objects is not in violation of provisions of section 13(1)(d)
IT-II : Voluntary contribution made with a specific direction that it shall form part of corpus of trust cannot be treated as income of trust even if purpose for which such donation is given has not been specified
IT-III : While working out application of income as prescribed in relation to purposes/objectives of a trust in terms of section 11(1)(a) in computation of taxable income, no disallowance of depreciation could be made
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[2014] 51 taxmann.com 248 (Chennai - Trib.)
IN THE ITAT CHENNAI BENCH 'D'
Joint Commissioner of Income-tax (OSD) (Exemptions)
v.
Bhaktavatsalam Memorial Trust*
A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER
AND CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER
IT APPEAL NOS. 1796 & 1819 (MDS.) OF 2012
[ASSESSMENT YEAR 2009-10]
DECEMBER  20, 2013
I. Section 13, read with section 11, of the Income-tax Act, 1961 - Charitable or religious trust - Denial of exemption (Sub-section (1)(d)) - Assessment year 2009-10 - Whether advancement of interest free loan by a charitable institution to other charitable institutions registered under section 12A having similar objects is not in violation of provisions of section 13(1)(d), read with section 11(5) - Held, yes [Para 7][In favour of assessee]
II. Section 11 of the Income-tax Act, 1961 - Charitable or religious trust - Exemption of income from property held under (Voluntary Contributions) - Assessment year 2009-10 - Whether where voluntary contributions are made with a specific direction that it shall form part of corpus of trust, said amount cannot be treated as income of trust even if purpose for which such donation is given has not been specified - held, yes [Para 17][In favour of assessee]
III. Section 11 of the Income-tax Act, 1961 - Charitable or religious trust - Exemption of income from property held under (Application of income) - Assessment year 2009-10 - Whether while working out application of income as prescribed in relation to purposes/objectives of a trust in terms of section 11(1)(a) in computation of taxable income, no disallowance of depreciation could be made - Held, yes [Para 11] [In favour of assessee]

Expenses towards IT system maintenance in respect of restructuring of a company

IT : Where expenses towards IT system maintenance in respect of restructuring of a company was not having enduring benefit and as no asset was brought into existence on such expenses, said expenditure could not be capital in nature
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[2014] 51 taxmann.com 517 (Gujarat)
HIGH COURT OF GUJARAT
Commissioner of Income-tax-I
v.
Gujarat Urja Vikas Ltd.*
MS. HARSHA DEVANI AND MS. SONIA GOKANI, JJ.
TAX APPEAL NO. 820 OF 2014†
AUGUST  26, 2014
Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of (IT system maintenance) - Assessment year 2006-07 - Whether where fees paid for IT system maintenance in respect of restructuring of company was not having enduring benefit and as no asset was brought into existence on such payment, it could not be cateogorised as capital in nature - Held, yes [Paras 8.1 & 11] [In favour of assessee]

Assessment on dissolved/amalgamated company is invalid

IT: Assessment on dissolved/amalgamated company is invalid
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[2014] 52 taxmann.com 356 (Delhi)
HIGH COURT OF DELHI
Commissioner of Income-tax-III
v.
Dimension Apparels (P.) Ltd.*
S. RAVINDRA BHAT AND VIBHU BAKHRU, JJ.
IT APPEAL NOS. 327 TO 330 & 332 OF 2014†
C.M. NOS. 10527,10528,10641 & 10690 OF 2014
JULY  8, 2014
Section 292B of the Income-tax Act, 1961 - Return of income not to be invalid on certain grounds (Assessment of non-existent entity) - Assessment years 2003-04 to 2008-09 - Whether assessment on a company which has been dissolved/amalgamated under sections 391 and 394 of Companies Act, 1956 is invalid - Held, yes - Whether framing assessment on a non-existent entity is a jurisdictional defect which cannot be cured under section 292B - Held, yes - Whether participation by amalgamated company in assessment proceedings would cure such defect - Held, no [Paras 16, 19 & 22] [In favour of assessee]

Where understatement of sale consideration by assessee in terms of section 50C was prima facie established, Assessing Officer was empowered to reopen assessment

IT : Where understatement of sale consideration by assessee in terms of section 50C was prima facie established, Assessing Officer was empowered to reopen assessment
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[2014] 51 taxmann.com 567 (Hyderabad - Trib.)
IN THE ITAT HYDERABAD BENCH 'A'
Rupakula Srinivas
v.
Income-tax, Ward-1 (1), Hyderabad*
B. RAMAKOTAIAH, ACCOUNTANT MEMBER
AND SAKTIJIT DEY, JUDICIAL MEMBER
IT APPEAL NO. 1859 (HYD.) OF 2012
[ASSESSMENT YEAR 2007-08]
AUGUST  13, 2014
I. Section 50C, read with section 147, of the Income-tax Act, 1961 - Capital gains - Special provision for computation of full value consideration (Reassessment) - Assessment year 2007-08 - Assessing Officer noticed that sale consideration as mentioned in sale deed submitted by assessee in earlier year was at lower side as compared to FMV adopted by SRO for stamp value purposes - Whether understatement in terms of section 50C being prima facie established, Assessing Officer was empowered to reopen assessment - Held, yes [Para 8] [In favour of revenue]
II. Section 50C of the Income-tax Act, 1961 - Capital gains - Special provision for computation of full value consideration (Valuation) - Assessment year 2007-08 - Assessing Officer noticed that sale consideration of a property in sale deed was at lower side as compared to FMV determined by DVO for stamp duty purposes - He adopted FMV determined by DVO, as deemed sale consideration and computed short-term capital gain and made addition - It was found that DVO had considered comparable sale instances of subsequent period and though he accepted specific issues raised by assessee, namely, non-utilization of part of land, vaastu defects etc., but he had not properly given discount towards same - Whether, therefore, matter was to be remitted for reconsideration - Held, yes [Para 17] [In favour of assessee/Matter remanded]

Exemption claimed under section 11 by assessee was not to be denied by Assessing Officer

IT : Exemption claimed under section 11 by assessee was not to be denied by Assessing Officer merely on ground that in previous assessment year claim of assessee was allowed on technical grounds but not on merits
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[2014] 52 taxmann.com 329 (Bombay)
HIGH COURT OF BOMBAY
Director of Income-tax (Exemption)
v.
Maharashtra Housing & Area Development Authority (MHADA)*
S. C. DHARMADHIKARI AND B.P. COLABAWALLA, JJ.
IT APPEAL NO. 656 OF 2012†
AUGUST  8, 2014
Section 11, read with sections 10(20), 10(20A), 10(23C) and 12AA, of the Income-tax Act, 1961 - Charitable or religious trust - Exemption of income from property held under (Housing and Area Development Authority) - Assessment year 2007-08 - Assessee applied for registration under section 12AA and same was granted - However Assessing Officer disallowed exemption under section 11 - Assessee submitted that for assessment years 2003-04 to 2006-07, claim had been allowed by Commissioner (Appeals) and Tribunal, hence same order should be followed - Assessing Officer disallowed claim on ground that appeal of revenue was not dismissed on merits but on technical grounds in said assessment years - Whether exemption was not to be denied merely on basis that view of Assessing Officer was not reversed or set aside by Tribunal on merits - Held, yes [Para 8] [In favour of assessee]

Formula in rule 6(3A) of CENVAT Credit Rules, 2004 uses 'total credit taken' and not 'common credit'

Cenvat Credit : Formula in rule 6(3A) of CENVAT Credit Rules, 2004 uses 'total credit taken' and not 'common credit'; hence, while making reversal, total credit (including that relating exclusively to taxable goods/services) will be used
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[2014] 52 taxmann.com 418 (Mumbai - CESTAT)
CESTAT, MUMBAI BENCH
Thyssenkrupp Industries (I) (P.) Ltd.
v.
Commissioner of Central Excise, Pune*
P.R CHANDRASEKHARAN, TECHNICAL MEMBER
ANIL CHOUDHARY, JUDICIAL MEMBER
ORDER NO. S/459/14/EB/C-II
APPLICATION NO. E/S/94212/14
APPEAL NO. E/86112/14
JULY  18, 2014
Rule 6 of the Cenvat Credit Rules, 2004 - CENVAT Credit - Exempted and Dutiable Goods or Exempted and Taxable Services, Obligation of assessee - Period April 2011 to March 2012 - Stay Order - Assessee took input service credit of : (a) tax Rs. 20.6 crores used only in taxable goods/services; (b) tax Rs. 2.1 crores relating to common input services used for taxable and exempt goods/services - While making formula-based reversal as per rule 6(3A), assessee used common input service credit of Rs. 2.1 crores - Department used total input service credit of Rs. 22.7 crores - HELD : Factor "P" used in Rule 6(3A)(c)(iii) denotes 'total Cenvat Credit taken on input services during financial year' and not 'credit of common input services' and factors 'M' and 'N' also relate to total turnovers - Same principle applies to monthly reversal of provisional amounts - If formula results in anomalous situation, it is for Legislature to amend law - Hence, prima facie, demand was to be determined by using total input service credit of Rs. 22.7 crores - However, if assessee had chosen not to avail Credit on common input services, liability would only be Rs. 2.1 crores and since Rs. 0.7 had already been deposited, pre-deposit was ordered at Rs. 1.4 crores [Para 5] [In favour of assessee]