Month: December 2010

Archive for December, 2010


Lachman Dass Bhatia Hingwala vs. ACIT (Delhi High Court – Full Bench)

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DATE: (Date of pronouncement)
DATE: December 30, 2010 (Date of publication)
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This view is now not tenable in view of the judgements of the Supreme Court in Honda Siel Power Products 295 ITR 466 and Saurashtra Kutch Stock Exchange 262 ITR 146 where it was held that the power of rectification has been conferred on the tribunal to see that no prejudice is caused to either of the parties appearing before it by its decision based on a mistake apparent from the record. It was held that atonement to the wronged party by the court or the tribunal for the wrong committed by it has nothing to do with the concept of inherent power to review. The Supreme Court clearly stated that it was the fundamental principle is that no party appearing before the tribunal should suffer on account of any mistake committed by the Tribunal and no prejudice should be caused to either of the parties before the Tribunal which is attributable to the Tribunal’s mistake, omission or commission and if the same error is a manifest error, then the Tribunal would be justified to recall

Posted in All Judgements, High Court

Indo Tech Electric Co vs. DCIT (Madras High Court)

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DATE: (Date of pronouncement)
DATE: December 29, 2010 (Date of publication)
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Both the Tribunal and the AO have held that what was done by the assessee is clearly an attempt to evade tax in order to get over s. 55(2). It is a well settled principle of law that what is permissible is avoidance but not evasion. When an attempt is made by a company to evade tax it is the bounden duty of the authorities to lift the corporate veil and find out the real intention behind the same. It is the duty of the Court in every case, where ingenuity is expended to avoid taxing and welfare legislation, to get behind the smoke screen and discover the true state of affairs. The Court is not to be satisfied with form and leave well alone the substance of a transaction

Posted in All Judgements, High Court

Vodafone Essar Ltd vs. Dispute Resolution Panel (Delhi High Court)

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DATE: (Date of pronouncement)
DATE: December 27, 2010 (Date of publication)
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When a quasi judicial authority like the DRP deals with a lis, it is obligatory on its part to ascribe cogent and germane reasons as the same is the heart and soul of the matter. And further, the same also facilitates appreciation when the order is called in question before the superior forum

Posted in All Judgements, High Court

GAP International Sourcing India Pvt. Ltd vs. DCIT (ITAT Delhi)

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DATE: (Date of pronouncement)
DATE: December 26, 2010 (Date of publication)
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S. 144C empowers the DRP to issue directions for the guidance of the AO to enable him to complete the assessment. It can confirm, reduce or enhance the variations proposed in the draft order. However, as against the provisions of s. 144C, the DRP has passed a very laconic order. Though voluminous submissions were made before the DRP against the draft assessment order, the DRP brushed aside everything without even a whisper of the assessee’s objections and submissions. The directions of the DRP are too laconic to be left uncommented. The directions given by the DRP almost tantamounts to supervising the AO’s draft order and in that sense it can be equated that appellate jurisdiction being exercised. It was held in Sahara India (Farms) vs. CIT 300 ITR 403 (SC) that even “an administrative order has to be consistent with the rules of natural justice

Posted in All Judgements, Tribunal

AIA Engineering Ltd vs. Dispute Resolution Panel (Gujarat High Court)

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DATE: (Date of pronouncement)
DATE: December 26, 2010 (Date of publication)
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The DRP’s order suffers from the vice of being contrary to the record as well as non-application of mind and causes immense prejudice to the assessee. The assessee had never sought withdrawal of the objections filed by it but had requested the DRP for consent to approach the AO to issue the final order so as to file an appeal before the CIT (A). If the DRP was of the view that it did not have the jurisdiction to give such consent or that the objections could not be withdrawn, it could have rejected the application but ought to have dealt with the objections on merits. The result of the DRP’s stand was that all doors for the assessee were closed because its objections had not been considered by the DRP, an appeal against the assessment order could not be filed before the CIT (A) and even an appeal against the DRP’s order would be an exercise in futility. This is not sustainable. Accordingly the objections are restored to the DRP with direction to consider on merits within 3 months

Posted in All Judgements, High Court

Hotel Leela Venture vs. Ag. ITO (Kerala High Court)

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DATE: (Date of pronouncement)
DATE: December 25, 2010 (Date of publication)
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No coercive recovery if first appeal ready for hearing

Posted in All Judgements, High Court

KEC International Limited vs. ACIT (ITAT Mumbai)

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DATE: (Date of pronouncement)
DATE: December 25, 2010 (Date of publication)
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CITATION:

The Supreme Court’s observations in Dunlop cannot be interpreted to mean that the Tribunal is denuded of the powers to grant stay until case for financial stringency is successfully made out by the applicant. There is no conflict in holding this view as also adhering to the settled principles governing grant of stay which lay down that financial constraints of the applicant are important, even if not sole of qualifying, consideration in entertaining a stay application, besides considerations like existence of strong prima facie case, balance of convenience and possibilities of Revenue’s rights of recovery being prejudiced by waiting till the outcome of appeals

Posted in All Judgements, Tribunal

Arif Akhatar Hussain vs. ITO (ITAT Mumbai)

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DATE: (Date of pronouncement)
DATE: December 24, 2010 (Date of publication)
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CITATION:

The argument that transfer of development rights does not amount to transfer of land or building and therefore s. 50C is not applicable is not acceptable because u/s 2(47)(v) the giving of possession in part performance of a contract as per s. 53A of the Transfer of property Act is deemed to be a “transfer”. When the assessee received the sale consideration and handed over possession of the property vide the development agreement, the condition prescribed in s. 53A of the Transfer of Property Act was satisfied and u/s 2 (47) (v) the transaction of transfer was completed. The fact that the assessee’s name stands in the municipal records does not change the nature of the transaction

Posted in All Judgements, Tribunal

Zylog Systems vs. ITO (ITAT Chennai Special Bench)

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DATE: (Date of pronouncement)
DATE: December 24, 2010 (Date of publication)
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one limb of the Government cannot be allowed to defeat the operation of the other limb. While s. 10B requires the foreign exchange to be brought to India within the prescribed period, the RBI permits the assessee to retain the said foreign exchange abroad for specific purposes. RBI is the competent authority for s. 10B as well. The result is that the reinvestment of export earning is deemed to have been received in India and thereafter to have been repatriated abroad (principle in J.B. Boda & Co 223 ITR 271 followed)

Posted in All Judgements, Tribunal

In Re Vodafone Essar Gujarat Ltd (Gujarat High Court)

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DATE: (Date of pronouncement)
DATE: December 20, 2010 (Date of publication)
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Considering all these aspects, it is foregone conclusion that the avoidance of tax is taking place only if the present scheme is sanctioned by the Court, otherwise not. The transferee is nothing but a paper company being only intermediate for transferring Passive Infrastructure assets from transferor companies to Indus for the purpose of tax evasion. This is clear from the fact that it has only paid up capital of Rs. 5 lacs especially when it is to hold assets worth Rs. 15,000 cr post sanction of the scheme. (Wood Polymer Ltd 47 Comp Cases 597 (Guj) and McDowell & Co 154 ITR 148 (SC) followed)

Posted in All Judgements, High Court
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