Budget Highlights (Key Features) 2015-2016

Section 220, read with section 264, of the Income-tax Act, 1961 - Collection and recovery of tax

IT: Where petitioner had been called upon to pay interest under section 220(2), demand having been raised consequent to order passed by Settlement Commission, computation of period for purpose of levy of interest could not be adjudicated in a writ petition and, hence, petitioner was to be directed to file a revision before Commissioner under section 264
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[2015] 54 taxmann.com 315 (Madras)
HIGH COURT OF MADRAS
Vaata Infra Ltd.
v.
Income-tax Officer, Company Ward-III (1), Chennai*
T.S. SIVAGNANAM, J.
W.P. NO. 8604 OF 2014
OCTOBER  27, 2014
Section 220, read with section 264, of the Income-tax Act, 1961 - Collection and recovery of tax - When assessee deemed in default (Interest under section 220(2)) - Consequent to order passed by Settlement Commission, impugned proceedings were passed calling upon petitioner to pay interest under section 220(2) - Petitioner contended that respondents had admitted that demand had been paid on various dates and was fully paid in July 2007; therefore, question of demanding interest consequent to order of Commission in 2008 did not arise - Whether since demand had been raised consequent to order passed by Settlement Commission, computation of period for purpose of levy of interest could not be adjudicated in a writ petition and, hence, petitioner was to be directed to file a revision before Commissioner under section 264 - Held, yes [Paras 10, 18, 19 & 25][In favour of revenue]

Section 32AB of the Income-tax Act, 1961 - Investment deposit account (Audit report)

IT : Deduction under section 32AB claimed by assessee cannot be disallowed on ground that assessee had not filed audit report along with return
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[2015] 54 taxmann.com 321 (Madras)
HIGH COURT OF MADRAS
Commissioner of Income-tax, Chennai
v.
Ramani Realtors (P.) Ltd.*
R. SUDHAKAR AND R. KARUPPIAH, JJ.
T.C.(A) NO. 730 OF 2014†
DECEMBER  22, 2014
Section 32AB of the Income-tax Act, 1961 - Investment deposit account (Audit report) - Assessment year 2005-06 - Whether filing of audit report along with return is only directory and not mandatory; deduction claimed by assessee under section 32AB(5) could not be disallowed only on ground that assessee had not filed audit report along with return - Held, yes [Para 7] [In favour of assessee]

Budget must fix GST timelines

The expectations from the Budget FY16 are high, given the government’s pro-industry and pro-growth attitude. On February 28, we will see how and to what extent the government can ‘walk the talk’.
On the indirect tax front, changes in median tax rates under service tax and central excise seem unlikely. An upward revision would probably cause massive unrest and a lowering of the rate seems unaffordable. There would be some specific alterations in product-specific duty rates under central excise and customs to address trade challenges and inverted duty structures.
However, there are some provisions that need to be reviewed as they are causing considerable hardship to industry. For example, the CenVAT credit rules were amended to introduce a time limit of six months from the date of the invoice to avail of the credit on inputs and input services. This, ironically, was done by the BJP government at the time of their first Budget. There is no legitimate reason for the government to require that input tax credits be used within a given time-frame. If a taxpayer claims credit for an invoice that is more than six months old, the delay in claiming credit only costs the taxpayer, not the government. On the other hand, there are a number of legitimate reasons why a customer is unable to use the credits within six months. An invoice may be disputed for over a year. If a person is building a new factory, he might have input credits that he cannot use for 2-3 years until the factory is completed and commences production. Therefore, this provision should be deleted.
Similarly, there is a need to revisit the provision governing distribution of CenVAT credit by an input service distributor which restricts the allotment of common credit by the corporate office to its taxpaying units. Since the distribution of CenVAT credit is revenue neutral, the eligible credit after adjusting for exempt/non-taxable turnover should be allowed to be distributed without any restriction.
In service tax, interest rates on delayed payment of tax have been changed to a variable rate scheme ranging from 18% to a high of 30% in case the tax remains due for more than a year. This is not a subtle way of discouraging any service provider from disputing any tax liability or tax demand raised by the department. This is not at all in keeping with the business-friendly image that the government is keen to portray, in order to jump-start the economy. If there is a law in which effectively there is no appeal mechanism against an unjust tax demand, this is hardly in keeping with the pro-business and pro-development image that the government is keen to portray.
Then, there are provisions that are in practice subject to conflicting interpretations. In customs, the valuation rules provide that all payments made by the buyer as a ‘condition of sale’ of the imported goods should be added to the transaction value for purposes of customs valuation. In a typical MNC scenario, an importer might be sourcing multiple goods related to its manufacturing process from its parent company. Quite frequently, the parent provides the subsidiary company with proprietary technical know-how to enable it to manufacture the product. The department invariably assumes all royalty and technical services fees have been paid by the buyer as a condition for sale of goods that are supplied. This is irrespective of the fact that product ‘X’ was imported and royalty payment was towards technical know-how supplied in relation to the manufacturing process of the end product ‘A’. The recent history of case laws involving evaluation of ‘condition for sale’ scenario suggest that in majority of the cases the tribunal or the court, as the case may be, held the approach followed by the importer as correct. This, however, has not slowed the spate of tax demands.
Therefore, it seems desirable that a clarification be issued explaining that the technology fee should be added to the import value of goods only where it relates to the goods that are imported.
As far as indirect tax reforms are concerned, a lot is expected from this Budget with respect to implementation of GST. Now that the Constitutional Amendment Bill has been tabled in Parliament and is due for discussion in the coming Budget session, a clear roadmap for the implementation of GST should be shared with the country. This would include setting timelines for the Constitutional Amendment, the release of draft GST legislation up to the final enactment of GST and the expected ‘go-live’ date.
(Supported by Tajinder Singh)
The author is partner and leader, Indirect Tax, PwC India.
Vivek Mishra Source:http://www.financialexpress.com/

Retailers look to GST for growth boost

Want Centre to end differentiatingmulti-brand and single brand retail
India’s brick-and-mortar retail players such as Shoppers Stop and Croma hope that the coming Budget will put more money in the hands of consumers, encouraging them to spend more.

In the e-commerce category, companies are looking for greater clarity on policy, as to which law will govern them.

Retailers are hoping for implementation of the much-awaited Goods and Services Tax (GST).

Some other demands are easier clearances, licences, and clarity on service tax to do business.

National clearance

Expectations are that the Government will take steps in the Budget that will help improve consumer sentiment and infrastructure. Rajat Wahi, Partner, Management Consulting, KPMG India, said there is a need to move away from state-wise clearance to national clearance for multi-brand retail.

The number of licences and permits required (up to 84) by retailers should also be reduced and a single window clearance be introduced.

“The Government needs to look at allowing 100 per cent FDI in multi-brand retail and moving away from differentiation between single-brand and multi-brand. It should reduce sourcing norms from the current 30 per cent for both single-brand and multi-brand retailers and also ease the mandatory $100 million investment in back-end infrastructure by retailers,” he added.

Avijit Mitra, Chief Finance Officer, Infiniti Retail Ltd, which runs the nationwide retail chain Croma, said: “The current tax structure in our country is very cumbersome. The GST, if passed, will be a game changer. We hope for this change to come through as the new tax structure will lead to smooth operations for all retailers. The benefits will be manifold.” Echoing a similar thought, Govind Srikhande, Managing Director, Shoppers Stop, said the announcement of the GST will help make trading seamless across categories and states, and will also help retailers offset the service tax on rent, which is a big cost for the retailers.

Kumar Rajagopalan, CEO of the Retailers Association of India (RAI), said GST will finally help retailers create supply chain methods based on transportation models rather than taxation models.

Talking about FDI in retail, he said, “India is the only country that distinguishes retail by brands (multi-brand and single-brand). There is an urgent need to create a retail policy that addresses FDI in such a way that it creates a level-playing field.”Source:http://www.thehindubusinessline.com/

Section 36(1)(iii), read with section 147, of the Income-tax Act, 1961 - Interest on borrowed capital

IT : Assessing Officer having allowed deduction in respect of assessee's claim for payment of interest, could not initiate reassessment proceedings merely on basis of change of opinion that interest expenditure in question was capital in nature
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[2015] 54 taxmann.com 70 (Bombay)
HIGH COURT OF BOMBAY
Business India
v.
Joint Commissioner of Income-tax, 12 (1)*
M.S. SANKLECHA AND N. M. JAMDAR, JJ.
WRIT PETITION NOS. 1360 & 1526 OF 2006
SEPTEMBER  22, 2014
Section 36(1)(iii), read with section 147, of the Income-tax Act, 1961 - Interest on borrowed capital (Reassessment) - Assessment years 1998-99 and 1999-2000 - Whether where Assessing Officer allowed assessee's claim for deduction of payment of interest in absence of any failure on assessee's part to disclose fully and truly all material facts necessary for assessment, he could not initiate reassessment proceedings merely on basis of change of opinion that interest expenditure in question was capital in nature - Held, yes [Para 11] [In favour of assessee]

Section 145 of the Income-tax Act, 1961 - Method of accounting - Estimation of income

IT : Where Commissioner (Appeals) had reduced net profit rate to 7.75 per cent from 12.5 per cent as applied by Assessing Officer, following Tribunal's order in immediately preceding year, no interference was required with Tribunal's order
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[2015] 54 taxmann.com 64 (Jodhpur - Trib.)
IN THE ITAT JODHPUR BENCH
Income-tax Officer
v.
Shri Ram Traders*
HARI OM MARATHA, JUDICIAL MEMBER
AND N.K. SAINI, ACCOUNTANT MEMBER
IT APPEAL NO. 183 (JODH.) OF 2014
[ASSESSMENT YEAR 2009-10]
AUGUST  7, 2014
Section 145 of the Income-tax Act, 1961 - Method of accounting - Estimation of income (Estimation of income) - Assessment year 2009-10 - Assessing Officer rejected assessee's books of account on ground that it had not maintained various documents, e.g., stock register, works register, etc., and various expenses were not properly vouched and adopted net profit rate of 12.5 per cent - Commissioner (Appeals) upheld rejection of books of account but reduced net profit rate to 7.75 per cent - Whether since Commissioner (Appeals) had followed Tribunal's order for preceding assessment year in assessee's case, order of Commissioner (Appeals) could not be interfered with - Held, yes [Para 2.5] [In favour of assessee]

Section 40(a)(ia), read with section 194C, of the Income-tax Act, 1961 - Business disallowance

IT : Where assessee had disclosed relevant particulars at time of original assessment, but they are found to be untrue on basis of material discovered by a later date by Assessing Officer, assessment would be validly re-opened section 147(a)
IT : Scope of disallowance of expenses contemplated by section 40(a)(ia) is not limited to those expenses alone which fall under sections 30-38 but covers all those expenses which are specifically enumerated in section 40
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[2015] 54 taxmann.com 220 (Cochin - Trib.)
IN THE ITAT COCHIN BENCH
Konthiyaparambil Coir Rubber Products
v.
Income-tax Officer, Ward-2, Alappuzha*
N.R.S. GANESAN, JUDICIAL MEMBER
AND CHANDRA POOJARI, ACCOUNTANT MEMBER
IT APPEAL NO. 813 (COCH.) OF 2013
[ASSESSMENT YEAR 2006-07]
AUGUST  28, 2014
Section 40(a)(ia), read with section 194C, of the Income-tax Act, 1961 - Business disallowance - Interest, etc., paid to resident without deduction of tax at source (Payment to contractors) - Assessment year 2006-07 - Whether scope of disallowance of expenses contemplated by section 40(a)(ia) is not limited to those expenses alone which fall under sections 30 to 38 but covers all those expenses which are specifically enumerated in section 40 - Held, yes - Whether where assessee-manufacturer made payment towards labour-contract work to its employees in pursuance of a contract, but did not deduct TDS under section 194C, said payment was to be disallowance under section 40(a)(ia) - Held, yes [Paras 9 and 13] [In favour of revenue]
Section 147 of the Income-tax Act, 1961 - Income escaping assessment - Non-disclosure of primary facts (Conditions precedent) - Assessment year 2006-07 - Whether where assessee had disclosed relevant particulars at time of original assessment, but they are found to be untrue on basis of material discovered by a later date by Assessing Officer, assessment would be validly re-opened under section 147(a) because in such a case, assessee would have failed to disclose truly and fully all material facts necessary for assessment and it would not be a case of mere change of opinion - Held, yes [Para 5] [In favour of revenue]
Words and Phrases - The term 'any expenditure' as occurring in section 37(1) of the Income-tax Act, 1961

Section 132, read with section 158BD, of the Income-tax Act, 1961 - Search and seizure

IT: Where authorization under section 132 was not issued in name of assessee-firm, Assessing Officer could not proceed under section 158BD
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[2014] 41 taxmann.com 303 (Allahabad)
HIGH COURT OF ALLAHABAD
Commissioner of Income-tax (Central)
v.
Vishwanath Prasad Ashok Kumar Sarraf*
SUNIL AMBWANI AND SURYA PRAKASH KESARWANI, JJ.
IT APPEAL NO. 62 OF 2003†
JULY  15, 2013
Section 132, read with section 158BD, of the Income-tax Act, 1961 - Search and seizure - General [Warrant for search] - Block period 1987-88 to 1997-98 - Whether where authorization under section 132 was issued in name of person other than assessee and business premises of assessee-firm was searched, Assessing Officer was justified to proceed under section 158BD - Held, no [Para 8] [In favour of assessee]

Section 13, read with section 11, of the Income-tax Act, 1961 - Charitable or religious trust

IT: Where assessee-trust apart from propagation of Jain philosophy and idealogy, was also engaged in spreading religious and dharmik knowledge and providing amenities and facilities to pilgrims and renovation of Jain temples all over India, it was to be regarded as public charitable trust performing activities of general public utility and, thus, benefit of exemption could not be denied to it by invoking provisions of section 13(1)(a) and 13(1)(b)
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[2014] 41 taxmann.com 492 (Gujarat)
HIGH COURT OF GUJARAT
Director of Income-tax (Exemption)
v.
Sheth Jivandas Godidas Shankheshwar Parshwanathji Jain*
V.M. SAHAI AND N.V. ANJARIA, JJ.
TAX APPEAL NO. 1380 OF 2011†
JUNE  20, 2012
Section 13, read with section 11, of the Income-tax Act, 1961 - Charitable or religious trust - Denial of exemption [Religious trust] - Assessment year 2007-08 - Assessee was a Jain Derasar Trust registered under Bombay Public Trust Act, 1950 - It claimed exemption under section 11 - Assessing Officer held that claim was disallowable in view of provisions of section 13(1)(a) and 13(1)(b) because activities of trust were confined to a particular community - Tribunal relying upon order passed in assessee's own case relating to earlier assessment year, allowed assessee's claim - it was noticed from records that in earlier assessment order Tribunal had observed that in assessee's case apart from religious activities i.e. propagation of Jain philosophy and ideology, trust was also engaged in spreading religious and dharmik knowledge and providing amenities and facilities to pilgrims and renovation of Jain temples all over India - Thus, it was concluded that assessee was a public charitable trust performing activities of general public utility - Whether, since, for assessment year under consideration, facts remained same and there was no factor or circumstance shown to dislodge character of assessee as public charitable trust which was accepted by revenue authorities themselves in past years, there was no reason to deny benefit of exemption to assessee by invoking provisions of section 13(1)(a) and 13(1)(b) - Held, yes [Para 6] [In favour of assessee]
CASES REFERRED TO

CIT v. Chandra Charitable Trust [2007] 294 ITR 86/[2006] 156 Taxman 19 (Guj.) (para 5) and Radhasoami Satsang v. CIT [1992] 193 ITR 321/60 Taxman 248 (SC) (para 6.1).
Mrs. Mauna M. Bhatt for the Appellant.

Section 115-O, read with sections 115P and 263, of the Income-tax Act, 1961

IT : Provision for dividend made in accounts or recommendation of board of director regarding proposed dividend can not be considered as declaration of dividend
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[2015] 54 taxmann.com 135 (Kolkata - Trib.)
IN THE ITAT KOLKATA BENCH 'B'
BMW Industries Ltd.
v.
Commissioner of Income-tax, Central-II, Kolkata*
MAHAVIR SINGH, JUDICIAL MEMBER
AND SHAMIM YAHYA, ACCOUNTANT MEMBER
IT APPEAL NO. 1762 (KOL.) OF 2013
[ASSESSMENT YEAR 2004-05]
DECEMBER  11, 2014
Section 115-O, read with sections 115P and 263, of the Income-tax Act, 1961 - Divident Distribution Tax (Dividend declared) - Assessment year 2004-05 - Whether provision for dividend made in accounts or recommendation of board of director regarding proposed dividend can not be considered as declaration of dividend - Held, yes - Whether where assessee-company paid dividend distribution tax on dividend declared in AGM, assessee could not be held liable under section 115-O - Held, yes [Para 6.4] [In favour of assessee]

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

IT/ILT : Where while computing ALP of transaction of purchase of books by assessee from its AEs, TPO had not adopted profit margin of distributors on basis of actual figures or undisputed discount policies on cover prices but based on certain hypothesis which was based on misconception of facts, impugned ALP adjustment is unsustainable in law
IT/ILT: Expenditure incurred for upgrading of software that assessee was using would be revenue expenditure
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[2015] 54 taxmann.com 14 (Delhi - Trib.)
IN THE ITAT DELHI BENCH 'I'
Assistant Commissioner of Income-tax, Circle 12 (1), New Delhi
v.
Harper Collins Publishers India Ltd.*
PRAMOD KUMAR, ACCOUNTANT MEMBER
AND C.M. GARG, JUDICIAL MEMBER
IT APPEAL NO. 4790 (DELHI) OF 2010
[ASSESSMENT YEAR 2004-05]
OCTOBER  13, 2014
I - Section 92C of the Income-tax Act, 1961 - Transfer pricing - Computation of arm's length price (Comparables and Adjustments/RPM) - Assessment year 2004-05 - Assessee was engaged in import of books primarily from its AEs and distribution of same in India - It used resale price method for benchmarking its international transactions of purchase of books and claimed that its purchase was at arm's length - TPO noted that assessee had received 75.15 per cent discount on UK cover price from AE, whereas it gave 30 per cent discount on its India cover price to wholesale distributor - TPO, using wholesale distributor's margin as a valid comparable for application of RPM, and treating UK published price and Indian MRP as same, recomputed ALP - It was uncontroverted claim of assessee that UK cover price of book and Indian cover price was not same - Whether since TPO had not adopted profit margin by wholesale distributors on basis of actual figures or undisputed discount policies on cover prices but based on certain hypothesis which turned out to be based on misconception of facts, impugned ALP adjustment was unsustainable in law - Held, yes [Para 16][[In favour of assessee]
II - Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of (Software expenses) - Assessment year 2004-05 - Whether expenditure incurred for upgrading of software, that assessee was using, would be revenue expenditure - Held, yes [Para 6][In favour of assessee]

Section 333, read with sections 279 and 283, of the Companies Act, 2013

CL : Where business of company in liquidation was sold to appellant with an express stipulation that property of respondent was to be handed over before stipulated date, Official Liquidator was to be directed to hand over vacant possession of property to respondent
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[2015] 53 taxmann.com 498 (Calcutta)
HIGH COURT OF CALCUTTA
SST Media (P.) Ltd.
v.
Official Liquidator
ASHIM KUMAR BANERJEE AND ASHIS KUMAR CHAKRABORTY, JJ.
A.P.O. NOS. 442 & 444 OF 2014†
CP NO. 39 OF 2009
CS NO. 74 OF 2008
DECEMBER  16, 2014
Section 333, read with sections 279 and 283, of the Companies Act, 2013/Section 535, read with sections 446 and 456, of the Companies Act, 1956 - Winding up - Disclaimer of onerous property in case of a company which is being wound up - Whether right of landlord to invoke sections 535 and 446 for recovery of possession of a property from Official Liquidator is a statutory right for public benefit - Held, yes - Respondent had let out a property to company-in-liquidation but it failed to pay monthly occupation charges - In disclaimer proceedings initiated by respondent, Company Judge by impugned order directed Official Liquidator to hand over vacant possession of property to respondent - Appellant had purchased business of company-in-liquidation - Whether since Official Liquidator sold business of company in terms of order of Company Judge with express stipulation that appellant had to vacate said property before stipulated date, appellant was estopped from challenging impugned order and Official Liquidator was to be directed to hand over vacant possession of said property to respondent -Held, yes [Paras 22,23,32,33 & 35]

Section 24 of the West Bengal Value Added Tax Act, 2003 read with rules 5A and 6B

CST & VAT: West Bengal VAT - Where assessee made an application for registration in Form 1 accompanied by documents on 12-2-2013 and Assessing Authority issued certificate of registration with its validity from 10-5-2013, Assessing Authority was directed to issue registration certificate with its validity from 14-3-2013
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[2015] 54 taxmann.com 37 (WBTT)
WEST BENGAL TAXATION TRIBUNAL
JCCT, Central Registration Unit
v.
Rasha India (P.) Ltd.*
PRANAB KUMAR DEB, CHAIRMAN
AND NIRMAL KANTI SARKAR, TECHNICAL MEMBER
CASE NO. RW-8 OF 2014†
OCTOBER  29, 2014
Section 24 of the West Bengal Value Added Tax Act, 2003 read with rules 5A and 6B of the West Bengal Value Added Tax Rules, 2005 - Registration - Of dealer - Assessee made application for registration in Form 1 accompanied by documents referred to in rule 5A on 12-2-2013 - Assessing authority issued certificate of registration with its validity from 10-5-2013 - Tribunal by an order directed Assessing Authority to issue certificate of registration in favour of assessee with its validity from 14-3-2013 - Whether Tribunal was justified in its view - Held, yes [Para 3][In favour of assessee]

Arbitrator cannot decide upon issues as to an excepted dispute not arbitrable in a contract of arbitration

Arbitration : Arbitrator cannot decide upon issues as to an excepted dispute not arbitrable in a contract of arbitration
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[2015] 53 taxmann.com 399 (SC)
SUPREME COURT OF INDIA
Harsha Constructions
v.
Union of India
ANIL R. DAVE AND VIKRAMAJIT SEN, JJ.
CA NO. 534 OF 2007†
SEPTEMBER  5, 2014
Section 7 read with section 34, of the Arbitration And Conciliation Act, 1996 - Arbitration agreement - Whether arbitration arises from a contract and unless there is a specific written contract, a contract with regard to arbitration cannot be presumed - Held, yes - Whether section 7(3) clearly specifies that contract with regard to arbitration must be in writing - Held, yes - Whether where law specifically makes a provision with regard to formation of a contract in a particular manner, there cannot be any presumption with regard to a contract if contract is not entered into by mode prescribed under Act - Held, yes - Whether where a clause in a contract specifically excluded some disputes from arbitration, arbitrator was not empowered to arbitrate upon these excepted disputes - Held, yes [Paras 20, 21 & 22]

Section 271 of the Companies Act, 2013 / Section 433 of the Companies Act, 1956 - Winding up - Circumstances

CL : Where respondent-company admitted debt due to petitioner several times and failed to establish its counter claim against petitioner, winding up petition filed by petitioner as creditor was maintainable
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[2015] 53 taxmann.com 396 (Bombay)
HIGH COURT OF BOMBAY
Severn Trent Water Purification Inc.
v.
Capital Controls India (P.) Ltd.
G.S. PATEL, J.
CO. PETITION NO. 857 OF 2004
DECEMBER  18, 2014
Section 271 of the Companies Act, 2013 / Section 433 of the Companies Act, 1956 - Winding up - Circumstances in which a company may be wound up - Petitioner had filed winding up petition against respondent as a contributory but same was dismissed and petitioner was allowed to amend its petition to claim winding up as a creditor of company on failure of company to pay admitted dues - Whether since respondent company had admitted debt due several times and failed to establish its counter-claim against petitioner, defence raised by respondent was invalid and, therefore, winding up petition filed by petitioner as creditor was maintainable and admissible - Held, yes [Paras 49, 50, 51 & 52]

Section 253 of the Income-tax Act, 1961 - Appellate Tribunal - Appeals to (Condonation of delay)

IT : Where assessee's parents died even before passing order of Commissioner (Appeals), delay of 715 days in filing appeal before Tribunal could not be condoned
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[2015] 53 taxmann.com 525 (Punjab & Haryana)
HIGH COURT OF PUNJAB & HARYANA
Amolak Singh Kumar & Sons
v.
Commissioner of Income-tax-2, Jalandhar*
AJAY KUMAR MITTAL AND JASPAL SINGH, JJ.
IT APPEAL NO. 96 OF 2014 (O & M)†
JULY  4, 2014
Section 253 of the Income-tax Act, 1961 - Appellate Tribunal - Appeals to (Condonation of delay) - Assessment year 2005-06 - Whether where assessee filed appeal before Tribunal with a delay of 715 days taking a plea of death of his parents, in view of fact that assessee's parents died even before passing order of Commissioner (Appeals), Tribunal was justified in dismissing assessee's appeal being bared by limitation - Held, yes [Para 10][In favour of revenue]

Section 254 of the Income-tax Act, 1961 - Appellate Tribunal - Order of (Opportunity of hearing)

IT : In absence malafide intention on part of assessee to remain absent at time of hearing of appeal, impugned order passed by Tribunal dismissing assessee's appeal ex parte was to be set aside after imposing reasonable cost upon assessee
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[2015] 53 taxmann.com 521 (Gujarat)
HIGH COURT OF GUJARAT
Vision Corporation Ltd.
v.
Joint Commissioner of Income-tax*
M.R. SHAH AND K.J. THAKER, JJ.
SPECIAL CIVIL APPLICATION NO. 7821 OF 2014†
JULY  25, 2014
Section 254 of the Income-tax Act, 1961 - Appellate Tribunal - Order of (Opportunity of hearing) - Whether where it was prima facie apparent that there was no malafide intention on part of assessee to remain absent at time of hearing of appeal, impugned order passed by Tribunal dismissing assessee's appeal ex parte was to be set aside after imposing reasonable cost upon assessee - Held, yes [In favour of assessee]

Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income

IT : Where survey did not result in recovery of any specific amount and figures were arrived at by way of presumptive computation, there being no intention to evade tax, no penalty was to be levied under section 271(1)(c)
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[2015] 53 taxmann.com 226 (Andhra Pradesh)
HIGH COURT OF ANDHRA PRADESH
M.A. Quddus
v.
Income-tax Officer*
L. NARASIMHA REDDY AND CHALLA KODANDA RAM, JJ.
I.T.T.A. NO. 92 OF 2003†
SEPTEMBER  3, 2014
Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income (Surrender of income) - Assessment years 1986-87 and 1987-88 - Assessee was running a small private school - During survey operation, it was opined that certain amounts were not accounted for by assessee - However, survey did not result in recovery of any specific amount as such and figures were arrived at by taking into account number of students and prescribed fee even without noticing that in several cases, there would be default in payment of fee and social obligation of management of school to poor students and other important persons - It was not even alleged that assessee had any intention to evade tax or to defraud revenue - Whether, there was no justification to levy penalty under section 271(1)(c) on assessees - Held, yes [Para 6] [In favour of assessee]
P.C. Yadav for the Appellant. S.R. Ashok for the Respondent.

Section 92C of the Income-tax Act, 1961, read with rule 10B of Income-tax Rules, 1962

IT/ILT : Capacity underutilization by enterprises is certainly an important factor affecting net profit margin in open market because lower capacity utilization results in higher per unit costs, which, in turn, results in lower profits
IT/ILT : If a comparable is being sought to be rejected on ground of its differences vis-à-vis tested party, similar criteria must be adopted for deciding suitability of other comparables as well
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[2014] 42 taxmann.com 420 (Delhi - Trib.)
IN THE ITAT DELHI BENCH 'I'
Deputy Commissioner of Income-tax, Circle 14(1), New Delhi
v.
Panasonic AVC Networks India Co. Ltd.*
PRAMOD KUMAR, ACCOUNTANT MEMBER
AND RAJPAL YADAV, JUDICIAL MEMBER
IT APPEAL NO. 4620 (DELHI) OF 2011
[ASSESSMENT YEAR 2004-05]
FEBRUARY  21, 2014
I. Section 92C of the Income-tax Act, 1961, read with rule 10B of Income-tax Rules, 1962 - Transfer pricing - Computation of arm’s length price (Comparables and adjustments) - Assessment year 2004-05 - Whether capacity underutilization by enterprises is certainly an important factor affecting net profit margin in open market because lower capacity utilization results in higher per unit costs, which, in turn, results in lower profits and, thus, adjustment of capacity utilization is to be made to determine ALP of international transaction - Held, yes [Para 5] [In favour of assessee/Matter remanded]
II. Section 92C of the Income-tax Act, 1961 - Transfer pricing - Computation of arm’s length price (Comparables and adjustments) - Assessment year 2004-05 - Whether if a comparable is rejected on ground of its differences vis-à-vis tested party, similar criteria must be adopted for deciding suitability of other comparables as well - Held, yes - Whether it cannot be open to any judicial authority to reject a comparable on ground that comparable has significant differences vis-à-vis tested party, unless differences are broad enough of general application - Held, yes [Para 9] [In favour of revenue/Matter remanded]

Section 214, read with section 244A, of the Income-tax Act, 1961 - Advance tax - Interest payable by Governmen

IT: For delay in refund to assessee, it is only interest provided for under statute which may be claimed by an assessee; only for inordinate delay of decade(s) compensation is to be paid
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[2014] 42 taxmann.com 1 (SC)
SUPREME COURT OF INDIA
Commissioner of Income-tax, Gujarat
v.
Gujarat Fluoro Chemicals*
H.L. DATTU, SUDHANSU JYOTI MUKHOPADHAYA AND M.Y. EQBAL, JJ.
SPECIAL LEAVE PETITION (C) NOS. 11406 OF 2008 AND OTHERS
SEPTEMBER  18, 2013
Section 214, read with section 244A, of the Income-tax Act, 1961 - Advance tax - Interest payable by Government [Interest on interest] - Whether interest is payable by Revenue to assessee if aggregate of instalments of advance tax or TDS paid exceeds assessed tax - Held, yes - Whether in Sandvik Asia Ltd. v. CIT [2006] 280 ITR 643/150 Taxman 591 (SC) Supreme Court had concluded that, where there is an inordinate delay of decade(s) on part of Revenue in refunding certain amount which included statutory interest, Revenue has to pay compensation for same; not an interest on interest - Held, yes [Paras 7 & 8] [Partly in favour of revenue]
Section 244A of the Income-tax Act, 1961 - Refunds - Interest on [Interest on interest] - Whether section 244A provides for interest on refunds under various contingencies and it is only that interest provided for under statute which may be claimed by an assessee from Revenue and no other interest on such statutory interest - Held, yes [Para 8] [In favour of revenue]
CASES REFERRED TO

Sandvik Asia Ltd. v. CIT [2006] 280 ITR 643/150 Taxman 591 (SC) (para 1).
Rajiv Dutta for the Petitioner. Arijit Prasad, Rahul Kaushik and Ms. Sadhna Sandhu for the Respondent.

Gains arising from sale of a shares of a company incorporated overseas

IT/ILT : There can be no recourse to Explanation 5 to enlarge scope of section 9(1) so as to bring to tax gains or income that may arise from transfer of an asset situated outside India, which does not derive bulk of its value from asset situated in India
IT/ILT : Gains arising from sale of a shares of a company incorporated overseas, which derives less than 50 per cent of its value from assets situated in India would not be taxable under section 9(1)(i) read with Explanation 5 thereto
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[2014] 49 taxmann.com 125 (Delhi)
HIGH COURT OF DELHI
Director of Income-tax (International Tax)
v.
Copal Research Ltd., Mauritius*
S. RAVINDRA BHAT AND VIBHU BAKHRU, JJ.
W.P. (C) NOS. 2033,2470,2590, & 2597 OF 2013†
AUGUST  14, 2014
Section 9 of the Income-tax Act, 1961, read with article 13 of Model OECD Convention - Income - Deemed to accrue or arise in India (Capital gains) - Whether there can be no recourse to Explanation 5 to enlarge scope of section 9(1) so as to bring to tax gains or income that may arise from transfer of an asset situated outside India which does not derive bulk of its value from assets situated in India - Held, yes - Whether gains arising from sale of a share of a company incorporated overseas, which derives less than 50 per cent of its value from assets situated in India, would not be taxable under section 9(1)(i) read with Explanation 5 thereto - Held, yes [Paras 28 and 33] [In favour of assessee]

Section 36A of the Monopolies And Restrictive Trade Practices Act, 1969 - Unfair trade practic

Competition Law : Non-delivery of possession of plot allotted to complainant and demand of additional price amounts to unfair trade practice; complainant entitled to refund of excess amount and interest from date of deposit till date of actual refund
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[2015] 53 taxmann.com 490 (CAT - New Delhi)
COMPETITION APPELLATE TRIBUNAL, NEW DELHI
Praveen Kumar Mendiratta
v.
Chief Administrator, Haryana Urban Development Authority
JUSTICE G.S. SINGHVI, CHAIRMAN
UTPE NO.26 OF 2007
CA NO. 81 OF 2007
DECEMBER  11, 2014
Section 36A of the Monopolies And Restrictive Trade Practices Act, 1969 - Unfair trade practice - Definition of - In response to an advertisement issued by respondent-builders, complainant had applied for a residential plot - After about four months, a plot was allotted to complainant but possession thereof was not given to him on pretext of pending litigation - While complainant was waiting for delivery of possession, respondent demanded additional payment in lieu of enhanced compensation allegedly paid to land owners - Whether respondents were guilty of unfair trade practice inasmuch as they had made false promise about availability of vacant plots and not only they failed to give possession of plots allotted to complainant, but also demanded additional price from him despite the fact that no award had been passed in respect of acquired land - Held, yes - Whether thus complainant was entitled to refund of excess amount and interest from date of deposit till date of actual refund - Held, yes[Paras 37 & 38] 

Section 138, read with section 142, of the Negotiable Instruments Act, 1881 - Dishonour of cheque

Negotiable Instruments Act: Complaint under section 138 can be filed through power of attorney holder
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[2015] 53 taxmann.com 465 (SC)
SUPREME COURT OF INDIA
Vinita S. Rao
v.
Essen Corporate Services (P.) Ltd.
SMT. RANJANA PRAKASH DESAI AND N.V. RAMANA, JJ.
CRIMINAL APPEAL NOS. 2065 -2066 OF 2014†
SEPTEMBER  17, 2014
Section 138, read with section 142, of the Negotiable Instruments Act, 1881 - Dishonour of cheque for insufficiency etc., of funds in account - Whether complaint under section 138 can be filed through power of attorney holder - Held, yes - Whether non-mentioning of power of attorney is not unusual and on this basis, no conclusion can be drawn that said document was not on record - Held, yes - Whether where appellant/complainant due to her bad health executed power of attorney in favour of her husband to file complaint under section 138 against respondent, complaint filed by appellant through power of attorney was maintainable - Held, yes [Paras 14, 19 & 24]

Where borrowed fund was used for capital work in progress, interest on said fund is allowable under section 36(1)(iii)

IT : Carry forward and set off of business loss is allowable against lease rental income derived from commercial assets
IT : Where borrowed fund was used for capital work in progress, interest on said fund is allowable under section 36(1)(iii)
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[2014] 52 taxmann.com 20 (Allahabad)
HIGH COURT OF ALLAHABAD
Commissioner of Income-tax
v.
Translam Ltd.*
TARUN AGARWALA AND DR. SATISH CHANDRA, JJ.
IT APPEAL NOS. 195 OF 2005 & 568 & 591 OF 2011†
SEPTEMBER  17, 2014
I. Section 72, read with section 28(i), of the Income-tax Act, 1961 - Losses - Carry forward and set-off of business losses (Rental income) - Assessment years 1995-96 to 1997-98 - Whether change in mode and manner of deriving income by exploiting commercial assets either by self or by leasing same would not change character of income and such income would continue to be 'Business income' - Held, yes - Whether carry forward and set-off of business loss is allowable against lease rental income derived from commercial asset - Held, yes [Para 8] [In favour of assessee]
II. Section 36(1)(iii) of the Income-tax Act, 1961 - Interest on borrowed capital (Capital work in progress) - Assessment years 1995-96 to 1997-98 - Assessee had borrowed some funds for acquisition of assets on which interest was paid - Assessing Officer disallowed deduction on account of interest as funds were not utilized for desired purpose as no new unit was started by assessee during year - Whether borrowed fund being used for capital work in progress, interest on said fund was allowable - Held, yes [Para 13] [In favour of assessee]
III. Section 145 of the Income-tax Act, 1961 - Method of accounting - Estimation of income (G.P. rate) - Assessment years 1995-96 to 1997-98 - Assessing Officer had made addition by observing that GP rate was lower in comparison to earlier years - In earlier years, excise duty was separately credited to excise duty payable account, whereas, during assessment year under consideration, excise duty was included in sale price - Whether no defects being pointed out by Assessing Officer in books addition was to be deleted - Held, yes [Para 16] [In favour of assessee]

Section 10A of the Income-tax Act, 1961 - Free Trade Zone (Human Resource Services)

IT : Where assessee-company provide recruitment services to its foreign client using information technology, it would be entitled to benefit under section 10A
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[2014] 51 taxmann.com 453 (Delhi)
HIGH COURT OF DELHI
Commissioner of Income-tax-II, New Delhi
v.
ML Outsourcing Services (P.) Ltd.*
SANJIV KHANNA AND V. KAMESWAR RAO, JJ.
IT APPEAL NO. 1255 OF 2011†
SEPTEMBER  3, 2014
Section 10A of the Income-tax Act, 1961 - Free Trade Zone (Human Resource Services) - Assessment year 2007-08 - Assessee-company was engaged in providing human resource services to a US based company - It claimed deduction under section 10A - Assessing Officer denied deduction alleging that services were that of a recruitment agent and not IT enabled services - It was found that assessee-company provide recruitment services by extensively using information technology - It was using information technology in scanning data, processing it, conducting online tests for short-listed candidate, and analysing their results - Even list of selected candidate also took place using CATS application software - Whether these activities were covered under Notification bearing No. SO 890(E), dated 26-9-2000, i.e., human resource service - Held, yes - Whether, therefore assessee would be entitled to benefit under section 10A - Held, yes [Paras 18 & 19] [In favour of assessee]
Circulars & Notifications : Notification No. SO 890(E), dated 26-9-2000.

Income from house property - Deemed Owner (Lease) - Assessee was a tenant of a house

IT : Where High Court and Tribunal without considering period of lease held assessee as deemed owner of a premises under section 27, matter was to be remanded for reconsideration
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[2014] 52 taxmann.com 157 (SC)
SUPREME COURT OF INDIA
Nahalchand Laloochand (P.) Ltd.
v.
Assistant Commissioner of Income-tax, Mumbai*
R.M. LODHA, CJ.
AND KURIAN JOSEPH, J.
CIVIL APPEAL NO. 1930 OF 2007†
SEPTEMBER  24, 2014
Section 27, read with section 269UA, of the Income-tax Act, 1961 - Income from house property - Deemed Owner (Lease) - Assessee was a tenant of a house - It had let out premises of that house to a bank - Tribunal and High Court considering assessee as deemed owner under section 269UA(f)(i) held that income received by assessee from that house property will be taxable under section 27(iiib) - However coming to above conclusion High Court and Tribunal did not take into consideration period of lease of that premises which is an essential pre condition under section 269UA(f)(i), i.e. twelve years - Whether in such circumstances matter was to be remanded to Tribunal for reconsideration - Held, yes [Paras 4 and 6] [Matter remanded/In favour of assessee]

Section 4 of the Competition Act, 2002 - Prohibition of abuse of dominant position

Competition Act : Presence of other builders offering residential flats in relevant market rules out dominance of opposite party
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[2014] 52 taxmann.com 153 (CCI)
COMPETITION COMMISSION OF INDIA
Anil K Jain
v.
Yamuna Expressway Industrial Development Authority
M.L. TAYAL, S.L. BUNKER, SUDHIR MITAL,
AUGUSTINE PETER AND U.C. NAHTA, MEMBER
CASE NO. 48 OF 2014
OCTOBER  1, 2014
Section 4 of the Competition Act, 2002 - Prohibition of abuse of dominant position - Whether where informants, allottees of residential plot developed by Opposite Party No. 1, contended that it devised a scheme for permitting 'transfers' of allotments of non-existent plots on which they collected 'transfer charges' and 'stamp duty' as well, in view of fact that there were other developers also in relevant market, opposite party could not be said to be in a dominant position and, thus, question of abuse of dominant position by it within meaning of provisions of section 4 did not arise - Held, yes

Expenditure incurred in relation to income not includible in total income

IT : Where assessee-bank earned tax free income in form of dividends, interest on tax free bonds etc. since said income was directly credited to assessee's account by way of bank transfer, impugned disallowance made by revenue authorities representing 2 per cent of gross total income on account of expenditure incurred in realising said income was to be deleted
IT : Where assessee was a trustee of a mutual fund which did not perform well and, in order to preserve its fair name and goodwill in market, assessee purchased units of said mutual fund at a price higher than their market price for redemption, excess amount so paid by assessee was to be allowed as business expenditure
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[2014] 52 taxmann.com 162 (Karnataka)
HIGH COURT OF KARNATAKA
Canara Bank
v.
Assistant Commissioner of Income-tax, Circle-11(2), Bangalore*
N. KUMAR AND MRS. RATHNAKALA, JJ.
IT APPEAL NOS. 1397 & 1416 OF 2006 AND 723 & 834 OF 2007†
NOVEMBER  12, 2013
I. Section 14A of the Income-tax Act, 1961 - Expenditure incurred in relation to income not includible in total income (Interest of) - Assessment years 1998-99, 2000-01 and 2001-02 - Whether where assessee-bank earned tax free income in form of dividends, interest on tax free bonds and interest on long-term finance, in view of fact that said income was directly credited to assessee's account by way of bank transfer, impugned disallowance made by revenue authorities representing 2 per cent of gross total income on account of expenditure incurred in realising said income was to be deleted - Held, yes [Para 12] [In favour of assessee]
II. Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of (Mutual funds) - Assessment year 2001-02 - Whether where assessee was a trustee of a mutual fund which did not perform well and, in order to preserve its fair name and goodwill in market, assessee purchased units of said mutual fund at a price higher than their market price for redemption, excess amount so paid by assessee was to be allowed as business expenditure - Held, yes [Para 27] [In favour of assessee]

Assessee to demonstrate its claim that no mark up adjustment was required

IT/ILT : Where TPO made addition to assessee's ALP by applying mark up of 15.27 per cent on reimbursement of AMP expenses incurred to promote brand name of parent company, impugned addition was to be set aside and, matter was to be remanded back with a direction to assessee to demonstrate its claim that no mark up adjustment was required
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[2015] 53 taxmann.com 299 (Delhi - Trib.)
IN THE ITAT, DELHI BENCH 'I'
BMW India (P.) Ltd.
v.
Assistant Commissioner of Income-tax, Range-I, Gurgaon*
SMT. DIVA SINGH, JUDICIAL MEMBER
AND T.S. KAPOOR, ACCOUNTANT MEMBER
IT APPEAL NO. 385 (DELHI) OF 2014
[ASSESSMENT YEAR 2009-10]
OCTOBER  21, 2014
Section 92C of the Income-tax Act, 1961 - Transfer pricing - Computation of arm's length price (Comparables and adjustments) - Assessment year 2009-10 - Assessee was a subsidiary of BMW, Germany which was engaged in manufacturing of automobiles - During relevant year, assessee incurred AMP expenses to promote brand name of its parent company in India - In transfer pricing proceedings, TPO having applied mark up of 15.27 per cent on reimbursement of AMP expenses, made certain addition to assessee's ALP - Whether in view of order passed by co-ordinate Bench of Tribunal in assessee's own case relating to earlier assessment year, impugned addition was to be set aside and, matter was to be remanded back with a direction to assessee to demonstrate its claim that no mark up adjustment was required - Held, yes [Paras 11 and 11.1] [Matter remanded]

Section 68 of the Income-tax Act, 1961 - Cash Credit (Share application money)

IT: Where all companies making payment of share application money and share premium money, addition as unexplained credit was unwarranted
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[2014] 51 taxmann.com 198 (Madras)
HIGH COURT OF MADRAS
Commissioner of Income-tax, Chennai
v.
Pranav Foundations Ltd.*
R. SUDHAKAR AND G. M. AKBAR ALI, JJ.
T. C. (A.) NO. 262 OF 2014†
AUGUST  12, 2014
Section 68 of the Income-tax Act, 1961 - Cash Credit (Share application money) - Assessment year 2007-08 - Assessee received share application money and share premium money from four parties - Assessing Officer treated said money as unexplained credit under section 68 - However all four parties were limited companies and enquiries were made and received from four companies and all companies accepted their investment - Whether where assessee had categorically established nature and source of said sum, addition of such subscription as unexplained credit under section 68 was unwarranted - Held, yes [Para 6][In favour of assessee]

Section 69, read with sections 55A and 131, of the Income-tax Act, 1961

IT: Where Tribunal passed order on assumption that DVO's report was under section 55A and, therefore, binding on Assessing Officer, once said premise and reasoning was erased, appeal required complete re-consideration and fresh hearing
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[2014] 52 taxmann.com 165 (Delhi)
HIGH COURT OF DELHI
Deepika Jain
v.
Income Tax Appellate Tribunal*
SANJIV KHANNA AND V. KAMESWAR RAO, JJ.
IT APPEAL NOS. 245 & 246 OF 2002
SEPTEMBER  18, 2014
Section 69, read with sections 55A and 131, of the Income-tax Act, 1961 - Unexplained investments (Property) - Assessment year 1994-95 - Assessees had jointly purchased a property - Assessing Officer made a reference under section 131 to DVO and on basis of his report, made addition under section 69 - Tribunal held that report of Valuation Cell was binding on Assessing Officer and only Commissioner (Appeals) had power to give relief - Assessee filed rectification application on ground that reference to DVO was made under section 131 and not under section 55A and, therefore, it was not binding on Assessing Officer - Whether since entire premise and foundation of Tribunal's order was on assumption that DVO's report was under section 55A and once said premise and reasoning was erased, appeal before Tribunal required complete re-consideration and fresh hearing.

Liability to deduct tax at source under section 195 can be fastened on an assessee on basis of retrospective amendment to said section

IT/ILT : Payment made by assessee, an Indian company to a US company for utilizing telecom services in USA did not constitute fee for technical services
IT/ILT : Section 10B being an exemption provision, exemption has to be allowed before set off of brought forward business losses of assessee
IT/ILT : Liability to deduct tax at source under section 195 can be fastened on an assessee on basis of retrospective amendment to said section
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[2014] 52 taxmann.com 115 (Bangalore - Trib.)
IN THE ITAT BANGALORE BENCH 'B'
Income-tax Officer, Ward 11 (1), Bangalore
v.
Clear Water Technology Services (P.) Ltd.*
N.V. VASUDEVAN, JUDICIAL MEMBER
AND JASON P. BOAZ, ACCOUNTANT MEMBER
IT APPEAL NO. 1146 (BANG.) OF 2014
[ASSESSMENT YEAR 2010-11]
SEPTEMBER  12, 2014
I. Section 9, read with sections 195 and 40(a)(i), of the Income-tax Act, 1961 and article 12 of DTAA between India and USA - Income-Deemed to accrue or arise in India (Fees for technical service) - Assessment year 2010-11 - Whether payment made by assessee, an Indian company to a US company for utilizing telecom services in USA did not constitute fee for technical services as said payments were for use of bandwidth provided for down linking signals in US; and said payments were not in nature of managerial, consultancy or technical services nor was it for use of or right to use industrial, commercial or ascientific equipment - Held, yes [Paras 10-15] [In favour of assessee]
II. Section 195, read wiht section 40(a)(i), of the Income-tax Act, 1961 - Deduction of tax at source - Payment to non-resident (Applicability of retrospective amendment) - Assessment year 2010-11 - Whether liability to deduct tax at source under section 195 can be fastened on an assessee on basis of retrospective amendment to said section - Held, yes [Para 15] [In favour of assessee]
III. Section 10B of the Income-tax Act, 1961 - Export Oriented undertaking (Computation of exemption) - Assessment year 2010-11 - Whether section 10B being an exemption provision, exemption under section 10B has to be allowed before set off of brought forward business losses of assessee - Held, yes [Para 8] [In favour of assessee]
Circulars and Notifications : Circular No. 7, dated 16-7-2013

Section 43 of the Orissa Value Added Tax Act, 2004 - Assessment

CST & VAT: Orissa VAT : A dealer is entitled to be supplied with materials intended to be used against him in assessment proceeding and his explanation with regard to those materials is bound to be considered by Assessing Officer in assessment order
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[2014] 52 taxmann.com 251 (Orissa)
HIGH COURT OF ORISSA
Deo Ispat Alloys Ltd.
v.
Commissioner of Commercial Taxes, Cuttack*
I. MAHANTY AND B.N. MAHAPATRA, JJ.
W.P. (C) NO. 6245 OF 2014
SEPTEMBER  26, 2014
Section 43 of the Orissa Value Added Tax Act, 2004 - Assessment - Turnover escaping assessment - Period 1-4-2009 to 6-9-2012 - Whether a dealer is entitled to be supplied with materials intended to be used against him in assessment proceeding for rebuttal and his explanation with regard to those materials is bound to be considered by Assessing Officer in assessment order either accepting or rejecting same - Held, yes [Para 18] [In favour of assessee/Matter remanded]

Claim of extra depreciation did not lead to tax evasion

IT : Where assessee company had paid MAT, book profit disclosed by it was not income determined under Income-tax Act; therefore claim of extra depreciation did not lead to tax evasion and, hence, no penalty could be levied
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[2014] 52 taxmann.com 259 (Allahabad)
HIGH COURT OF ALLAHABAD
Commissioner of Income-tax
v.
Jindal Polyester & Steel Ltd.*
RAJES KUMAR AND DINESH GUPTA, JJ.
IT APPEAL NO. 73 OF 2001†
APRIL  7, 2014
Section 271(1)(c), read with sections 115J and 115JB, of the Income-tax Act, 1961 - Penalty - For concealment of income (MAT, effect of) - Assessment year 1998-99 - Assessing Officer levied penalty on ground that assessee company had claimed extra depreciation under profit and loss account - Whether where assessee company paid MAT, book profit disclosed by assessee for purpose of tax liability under section 115J was relevant and not income determined under provisions of Income-tax Act - Held, yes - Whether since, concealment did not lead to tax evasion, no penalty would be levied - Held, yes [Paras 16 and 17] [In favour of assessee]

OCTOBER 19, 2011 Section 11B, read with section 12A, of the Central Excise Act, 1944, Rule 3 of the Cenvat Credit Rules, 2004,

Excise & Customs : For refund under section 11B, in addition to eligibility on merits, assessee should comply with two conditions : (i) refund claim must be filed within time-limit; and (ii) unjust enrichment should be ruled out by documents; if aforesaid two conditions are not fulfilled, authorities need not go into merits of claim
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[2014] 51 taxmann.com 441 (Madras)
HIGH COURT OF MADRAS
TVS Motor Company Ltd.
v.
Commissioner of Central Excise, Chennai-III*
D. MURUGESAN AND K. K. SASIDHARAN, JJ.
C.M.A. NO. 154 OF 2005†
OCTOBER  19, 2011
Section 11B, read with section 12A, of the Central Excise Act, 1944, Rule 3 of the Cenvat Credit Rules, 2004, Section 83 of the Finance Act, 1994 and Section 27 of the Customs Act, 1962 - Refund - General - Assessee removed inputs as such but made excess reversal than that required by law - Assessee sought refund of excess reversal of credit but department denied same on ground that : (i) refund claim was not filed within time-limit; and (ii) no document was furnished by assessee to rule out unjust enrichment and show that burden of duty was not passed onto buyer - Tribunal confirmed rejection of refund - Assessee argued that Tribunal did not go into merits/eligibility of claim - HELD : For refund under section 11B, in addition to eligibility on merits, assessee should comply with two conditions : (i) refund claim must be filed within time-limit; and (ii) unjust enrichment should be ruled out by documents - Only in event of such compliance, question as to whether assessee is entitled to refund on merits would arise - Since assessee was unable to satisfy requirements of section 11B, no grievance can be made as to failure on part of Tribunal to consider claim on merits - In view of : (a) findings of fact, (b) assessee's failure to establish right to refund in terms of section 11B, present appeal was dismissed [Para 5] [In favour of revenue]
Circulars and Notifications : Notification No. 28/95, dated 29-6-1995

Section 244A, read with section 243, of the Income-tax Act, 1961 - Refund

IT: Where interest is paid along with amount payable as refund, there is no question of payment of interest on interest
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[2014] 51 taxmann.com 81 (Cochin - Trib.)
IN THE ITAT COCHIN BENCH
Dr. R.P. Patel
v.
Assistant Commissioner of Income-tax*
N.R.S. GANESAN, JUDICIAL MEMBER
AND CHANDRA POOJARI, ACCOUNTANT MEMBER
IT APPEAL NO. 114 (COCH.) OF 2014
[ASSESSMENT YEAR 1990-91]
JULY  4, 2014
Section 244A, read with section 243, of the Income-tax Act, 1961 - Refund - Interest on (Interest on interest) - Assessment year 1990-91 - Whether when tax paid is more than what is due as a result of certain additions, etc. made by Assessing Officer and in appeal when those are deleted by appellate authority, refund of excess amount is to be made along with interest, as envisaged under section 243 - Held, yes - Whether it is only when this interest is not refunded, that assessee would become entitled to interest on said interest as well - Held, yes - Whether where interest is paid along with amount payable as refund, question of payment of interest on interest does not arise - Held, yes [Para 35][In favour of revenue]