Sunday, January 31, 2016

Income-tax Officer, Ward 8(1), Ahmedabad v. Sanghvi Fincap Ltd

IT : Where assessee, engaged in trading of shares, purchased certain shares but same could not be transferred in its name due to some dispute and accordingly payment towards said shares was also not made, in spite of lapse of 12-13 years, there being nothing to suggest that there was remission or cessation of said liability during previous year, no addition could be made under section 41(1) on account of cessation of said liability
IT : Where Assessing Officer noticing shortage of closing stock of shares by 500 shares, added amount of said shares as unaccounted sales, in view of fact that such shortage was on account of transaction of purchase of certain shares in last month of year out of which there was short delivery of 500 shares at year end, addition was not justified
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[2016] 65 taxmann.com 220 (Ahmedabad - Trib.)
IN THE ITAT AHMEDABAD BENCH 'D'
Income-tax Officer, Ward 8(1), Ahmedabad
v.
Sanghvi Fincap Ltd.*
SHAILENDRA KR. YADAV, JUDICIAL MEMBER
AND ANIL CHATURVEDI, ACCOUNTANT MEMBER
IT APPEAL NO. 536 (AHD.) OF 2011
[ASSESSMENT YEAR 2007-08]
MAY  14, 2015
I. Section 41(1) of the Income-tax Act, 1961 - Remission or cessation of trading liability (Applicability of) - Assessment year 2007-08 - Assessee, engaged in business of trading of shares and securities, had purchased certain shares from various parties and same were delivered to it in physical form - However, same could not be subsequently transferred in name of assessee-company on account of certain disputes between parties and, therefore, payment towards said shares was not made and it remained outstanding in books of assessee since 1996-97 - Assessing Officer held that said liability had ceased - Whether provisions of section 41(1) would apply where there had been remission or cessation of liability during year under consideration and since instant case, it was not case of Assessing Officer that assessee-company had received any cash or benefit in respect of trading liability by way of remission or cessation thereof and assessee had filed various details and explanation in respect of outstanding creditors showing that liability was outstanding till date, addition made under section 41(1) was to be deleted - Held, yes [Para 2.1][In favour of assessee]
II. Section 69 of the Income-tax Act, 1961 - Unaccounted investments (Unaccounted sales) - Assessment year 2007-08 - Assessee was engaged in business of shares and securities - On verification of record, Assessing Officer noticed that assessee should have shown 62,272 shares of Spectra as closing stock while it had been showing 61,772 shares - He added amount of balance shares as unaccounted sales - Facts revealed that certain shares were purchased on 29-3-2007 and there was short delivery to extent of difference noticed by Assessing Officer at year end - Whether there was no reason for additions on basis of shortage of delivery since contra account of broker also showed stock at 62,272 shares - Held, yes [Para 4] [In favour of assessee]

Punjab Cricket Association v. Commissioner of Income-tax-II, Chandigarh

IT : Commissioner is empowered to cancel registration granted to a society under section 12A from assessment year 2011-12 onwards, he cannot assume such power for earlier assessment years
IT : Consideration of first proviso to section 2(15) has no role to play in matters relating to registration of a trust or institution under section 12A in respect of granting or declining or cancelling registration
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[2016] 65 taxmann.com 239 (Chandigarh - Trib.)
IN THE ITAT CHANDIGARH BENCH
Punjab Cricket Association
v.
Commissioner of Income-tax-II, Chandigarh*
H.L. KARWA, VICE-PRESIDENT
AND MS. RANO JAIN, ACCOUNTANT MEMBER
IT APPEAL NO. 834 (CHD.) OF 2012
OCTOBER  19, 2015
Section 12AA, read with sections 12 and 2(15), of the Income-tax Act, 1961 - Charitable or religious trust - Registration procedure (Cancellation of) - Assessment year 2009-10 - Whether amendment to section 12AA(3) giving power to Commissioner to cancel registration granted under section 12A has been conferred by Finance Act, 2010, which explicitly provides that said powers are available to Commissioner with effect from 1-6-2010 and same accordingly can be applied for assessment year 2011-12 and subsequent assessment years and, in view of this, Commissioner, could not assume jurisdiction to cancel registration of assessee society from assessment year 2009-10 onwards - Held, yes - Whether consideration of first proviso to section 2(15) has no role to play in matters relating to registration of a trust or institution under section 12A in respect of granting or declining of registration or in respect of cancellation - Held, yes - Whether amendment to proviso to section 2(15) brought by Finance Act, 2008 cannot be basis for cancellation of registration already granted in earlier year under section 12A - Held, yes - Whether where Commissioner had not given findings that activities of assessee were not genuine or not being carried out in consonance with objects of assessee, action of Commissioner in cancelling registration was not as per law - Held, yes [Paras 13 & 14] [In favour of assessee]
Circulars and Notifications : Circular No. 1/2011, dated 6-4-2011

Commissioner of Income-tax(Central) v. Keti Construction Ltd

IT: Where assessee had not paid self assessment tax in return of income under sections 153A and 143(2), application for settlement was not valid
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[2016] 65 taxmann.com 263 (Madhya Pradesh)
HIGH COURT OF MADHYA PRADESH
Commissioner of Income-tax(Central)
v.
Keti Construction Ltd.*
P.K. JAISWAL AND J.K. JAIN, JJ.
WRIT PETITION NO. 6313 OF 2014
JULY  7, 2015
Section 245C of the Income-tax Act, 1961 - Settlement Commission - Application for settlement of cases (Validity of) - Assessment years 2006-07 to 2012-13 - In respect of assessment years in question respondent assessee made an application to Settlement Commission for settlement of case - In such an application, respondent declared an undisclosed income of Rs. 1.58,00,000 - For said years, respondent had filed returns of income under section 139(1) and after issue of notices under section 153A for said years, he had offered to tax Rs. 34,74,39,663, which was total amount admitted under section 132(4) for aforesaid years, but tax and interest computed suo moto was not paid and was shown as payable - Whether respondent was required to deposit additional tax on Rs. 34,74,39,663 and due to non-payment of taxes due therein application under section 245D(2C) would not be valid - Held, yes [Para 33] [In favour of revenue]

Flextronics Software Systems Ltd. v. Deputy Commissioner of Income-tax, Circle-11(1), New Delhi

IT/ILT : Where in support of genuineness of payments of administrative/corporate charges made to AE, assessee brought on record some additional evidence in course of appellate proceedings, matter was to be remanded back for disposal afresh in light of evidence so produced
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[2016] 65 taxmann.com 264 (Delhi - Trib.)
IN THE ITAT DELHI BENCH 'I-1'
Flextronics Software Systems Ltd.
v.
Deputy Commissioner of Income-tax, Circle-11(1), New Delhi*
S.V. MEHROTRA, ACCOUNTANT MEMBER
AND A.T. VARKEY, JUDICIAL MEMBER
IT APPEAL NO. 5550/DELHI/2011
[ASSESSMENT YEAR 2007-08]
JANUARY  7, 2016
Section 92C of the Income-tax Act, 1961 - Transfer pricing - Computation of arm's length price (Comparables and adjustments/Adjustments - Administrative expenses) - Assessee-company was engaged in business of production of computer software products and provision of software development services for communication industry - Assessee entered into international transactions relating to software development services with its AEs - In transfer pricing proceedings, TPO proposed an addition on ground that administrative/corporate charges paid by assessee to its AE had no recognizable value and, thus, arm's length price in respect of said transaction was taken at Nil - DRP set aside objections raised by assessee - In appellate proceedings, assessee submitted additional evidence in support of genuineness of payments in question - Whether on facts, impugned addition was to be set aside and, matter was to be remanded back for disposal afresh in light of new evidence produced by assessee - Held, yes [Para 16] [Matter remanded]

RBL Bank Ltd. v. Income-tax Officer (TDS), Ward-1, Belgaum

IT: Where recipient, to whom assessee-bank paid interest without deducting tax at source, had shown such interest income in its return of income but had not paid tax thereon claiming same to be exempt, assessee could not be treated as assessee-in-default
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[2016] 65 taxmann.com 219 (Panaji - Trib.)
IN THE ITAT PANAJI BENCH
RBL Bank Ltd.
v.
Income-tax Officer (TDS), Ward-1, Belgaum*
N.S. SAINI, ACCOUNTANT MEMBER
AND GEORGE MATHAN, JUDICIAL MEMBER
IT APPEAL NOS. 329 TO 331 (PNJ) OF 2015
[ASSESSMENT YEARS 2011-12 TO 2013-14]
NOVEMBER  24, 2015
Section 201, read with section 194A, of the Income-tax Act, 1961 - Deduction of tax at source - Consequence of failure to deduct or pay (Assessee-in-default) - Assessment years 2011-12 to 2013-14 - Assessee-bank paid interest to a university (recipient) without deducting TDS - Assessing Officer treated bank as assessee-in-default - Recipient of interest showed nil income treating all income as exempt and, thus, did not pay any tax - Whether where no tax was paid by recipient of income because as per recipient, its entire income was exempt or on which no tax was payable, then unless it was shown that due tax could not be recovered by department from recipient, assessee-payer could not be treated as 'assessee-in-default' - Held, yes [Para 13] [In favour of assessee/Matter remanded]
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