Month: February 2019

Archive for February, 2019


PCIT vs. BLB Cables And Conductors Pvt. Ltd (Calcutta High Court)

COURT:
CORAM: ,
SECTION(S): ,
GENRE:
CATCH WORDS: , , ,
COUNSEL:
DATE: June 19, 2018 (Date of pronouncement)
DATE: February 23, 2019 (Date of publication)
AY: 2009-10
FILE: Click here to view full post with file download link
CITATION:
S. 68 Bogus transactions: The AO cannot treat losses from off market commodity transactions as bogus and inadmissible in the eyes of the law if the transactions through the broker are duly recorded in the books of the assessee. The broker has also declared in its books of accounts and offered for taxation. To hold a transaction as bogus, there has to be some concrete evidence where the transactions cannot be proved with the supportive evidence. The fact that the broker was expelled from the commodity exchange cannot be the criteria to hold the transaction as bogus

To hold a transaction as bogus, there has to be some concrete evidence where the transactions cannot be proved with the supportive evidence. Here in the case the transactions of the commodity exchanged have not only been explained but also substantiated from the confirmation of the party. Both the parties are confirming the transactions which have been duly supported with the books of accounts and bank transactions. The ld. AR has also submitted the board resolution for the trading of commodity transaction. The broker was expelled from the commodity exchange cannot be the criteria to hold the transaction as bogus

Balaji Health Care Pvt. Ltd. vs. ITO (ITAT Jaipur)

COURT:
CORAM: ,
SECTION(S): , ,
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: January 30, 2019 (Date of pronouncement)
DATE: February 23, 2019 (Date of publication)
AY: 2006-07, 2007-08
FILE: Click here to view full post with file download link
CITATION:
S. 147 Reopening of s. 143(1) Intimation for Bogus share capital: The AO cannot reopen without establishing prima facie that assessee's own money has been routed back in form of share capital. While he can rely on the report of the Investigation Wing, he has to carry out further examination and analysis in order to establish the nexus between the material and formation of belief that income has escaped assessment. In absence thereof, the assumption of jurisdiction u/s 147 has no legal basis and resultant reassessment proceedings deserve to be set-aside

Based on perusal of the report of the DIT, Investigation Wing, New Delhi, the Assessing officer has formed not merely a prima facie belief but has reached a conclusion that the assessee has routed back his undisclosed income in the form of share capital. For reaching such a decisive finding that it is assessee’s undisclosed income which has reached the investor company and thereafter, the latter has invested the amount so received in the assessee’s company by way of share capital, there is nothing which has been stated in the reasons so recorded. As we have noted above, the satisfaction of the Assessing officer should be discernable from the reasons so recorded only and nothing can be added or supplemented to the reasons.

M/s. Shree Balaji Ventures vs. ITO (ITAT Pune)

COURT:
CORAM:
SECTION(S): ,
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: February 19, 2019 (Date of pronouncement)
DATE: February 23, 2019 (Date of publication)
AY: 2015-16
FILE: Click here to view full post with file download link
CITATION:
S. 22/ 23(4): The annual letting value (ALV) of unsold units of properties lying as stock in trade is not assessable as income under the head "Income from house property". The deeming provision of s. 23 cannot be extended beyond its ambit so as to cover the heads of income to which it does not operate. Taxing hypothetical income, which is otherwise not sanctioned by any provision under Chapter IV-D, cannot be permitted

it is apparent that the view point bolstered by the authorities that Annual Letting Value in respect of unsold properties lying with the assessee as a stock in trade, should be determined u/s. 23 of the Act, cannot be countenanced in the hue of the later judgments of the Hon’ble Summit Court.

PCIT vs. Aarham Softronics (Supreme Court)

COURT:
CORAM: , ,
SECTION(S):
GENRE:
CATCH WORDS: , , ,
COUNSEL:
DATE: February 20, 2019 (Date of pronouncement)
DATE: February 22, 2019 (Date of publication)
AY: -
FILE: Click here to view full post with file download link
CITATION:
S. 80-IC: An assessee availing exemption of 100% tax on setting up of a new industry, which is admissible for 5 years, and either on the expiry of 5 years or thereafter (but within 10 years) from the date when these assessees started availing exemption, they carried out substantial expansion of its industry, from that year the assessees become entitled to claim exemption @ 100% again (Classic Binding Industries 407 ITR 429 held not good law and reversed)

We have no hesitation to accept this mistake which occurred in Commissioner of Income Tax vs. M/s. Classic Binding Industries 407 ITR 429. The Court specifically dealt with ‘initial assessment year’ and came into conclusion that there cannot be two initial assessment years within a span of 10 years which is the maximum period for allowing deduction as per sub-section (6) of Section 80-IC. As the issue directly concerned with initial assessment year, its definition contained in that very Section was missed out. To that extent, there is an error in the judgment dated 20th August, 2018 in Classic Binding Industries case

Turner General Entertainment Networks India Pvt. Ltd vs. ITO (Delhi High Court)

COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS:
COUNSEL:
DATE: January 22, 2019 (Date of pronouncement)
DATE: February 22, 2019 (Date of publication)
AY: 2011-12
FILE: Click here to view full post with file download link
CITATION:
S. 220(6) Stay of demand: The AO cannot impose the per se condition that pending consideration of the application for stay of demand, certain minimum amount (15%/ 20%) has to be deposited by the assessee as prescribed by the CBDT. He has apply his mind and decide the application for stay of demand

It is evident that the concerned authorities and tax officials have to apply their mind to decide an application for stay of demand. This does not, however, mean that any particular AO in a given case has to impose a per se condition that pending consideration of the application for stay of demand, certain minimum amount has to be deposited

Mukta Gupta vs. ITO (ITAT Delhi)

COURT:
CORAM:
SECTION(S):
GENRE:
CATCH WORDS: ,
COUNSEL: ,
DATE: November 26, 2018 (Date of pronouncement)
DATE: February 22, 2019 (Date of publication)
AY: 2014-15
FILE: Click here to view full post with file download link
CITATION:
S. 10(38) Bogus LTCG from Penny Stocks: Capital gains cannot be treated as bogus solely on the basis that the price of the shares has risen manifold and the reason for astronomical rise is not related to any fundamentals of market. If the transactions are duly proved by trading from stock exchange and the documentation is proper, the gains cannot be assessed as unexplained credit or as unexplained money

Nowhere it has been found that assessee was in any manner found to be beneficiary of any accommodation entry under any inquiry or investigation. Once all these transactions are duly proved by trading from stock exchange, then to hold the sale of shares as unexplained credit or as unexplained money cannot be upheld

Cenveo Publisher Services India Ltd vs. UOI (Bombay High Court)

COURT:
CORAM: ,
SECTION(S): ,
GENRE:
CATCH WORDS:
COUNSEL: ,
DATE: February 1, 2019 (Date of pronouncement)
DATE: February 16, 2019 (Date of publication)
AY: 2011-12
FILE: Click here to view full post with file download link
CITATION:
S. 147 Reopening: If the assessee delays filing objections to the reasons and leaves the AO with little time to dispose of the objections and pass the assessment order before it gets time barred, it destroys the formula provided in Asian Paints 296 ITR 90 (Bom) that the AO should not pass the assessment order for 4 weeks. A writ petition to challenge the reopening will not be entertained

Asian Paints Ltd. Vs. Dy. Comm. Of Income Tax & Ors. reported in 296 ITR 90 Bom has provided that if the Assessing Officer does not accept the objections of the assessee, he shall not proceed further in the matter within a period of four weeks from the date of receipt of said order of objections. The petitioner by its conduct destroyed this formula provided by the Court in the case of Asian Paints (supra), making it impossible for the assessing officer to wait for four weeks after disposal of objections without running the risk of allowing the assessment to be time barred

Mahavir Jhanwar vs. ITO (ITAT Kolkata)

COURT:
CORAM:
SECTION(S):
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: February 1, 2019 (Date of pronouncement)
DATE: February 16, 2019 (Date of publication)
AY: 2014-15
FILE: Click here to view full post with file download link
CITATION:
S. 10(38) Bogus long-term capital gains from penny stocks: If the assessee has filed evidences for (a) purchase of shares, (b) payment by account payee cheque, (c) balance sheet disclosing investments, (d) demat statement (e) evidence of sale of shares through stock exchange, (e) bank statement reflecting sale receipts, (f) brokers ledger, (g) Contract Notes etc, the gains cannot be treated as bogus on human probabilities, suspicion, conjectures and surmises (All contra judgements distinguished)

The proposition of law laid down in these case laws by the Jurisdictional High Court as well as by the ITAT Kolkata on these issues are in favour of the assessee. These are squarely applicable to the facts of the case. The ld. Departmental Representative, though not leaving his ground, could not controvert the claim of the ld. Counsel for the assessee that the issue in question is covered by the above cited decisions of the Hon’ble Jurisdictional Calcutta High Court and the ITAT. I am bound to follow the same

Ram Siromani Tripathi vs. State of U.P. (Supreme Court)

COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS:
COUNSEL:
DATE: February 7, 2019 (Date of pronouncement)
DATE: February 14, 2019 (Date of publication)
AY: -
FILE: Click here to view full post with file download link
CITATION:
An adjournment cannot be sought on the ground that Counsel is out of station. The appeal has to be dismissed for non-prosecution. Under no circumstances, application for restoration shall be entertained

The appeals are dismissed for non-prosecution in terms of the signed order. We make it clear that since we have not found it to be a good ground for adjournment, under no circumstances, application for restoration shall be entertained

ITO vs. Yadu Steels & Power Pvt. Ltd (ITAT Delhi)

COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: February 12, 2019 (Date of pronouncement)
DATE: February 14, 2019 (Date of publication)
AY: 2009-10
FILE: Click here to view full post with file download link
CITATION:
S. 68 Bogus share capital: In the case of a private company, Onus is on assessee to prove identity, creditworthiness of subscribers and most importantly genuineness of transactions. Even if AO does not make inquiry, CIT(A) should do so. Relief cannot be given merely on basis of Ration Card, Share Application forms, Voter ID etc of the subscribers

Under Section 68 onus is upon assessee to prove three ingredients, i.e., identity and creditworthiness of credit entries. As to how onus can be discharged would depend on facts and circumstances of each case. It is expected of both sides – assessee and Ld.AO, to adopt reasonable approach. Assessee before us is a private limited company. It cannot issue shares in manner in which a public limited company does. It generally depend on persons known to its directors or shareholders directly or indirectly to buy its shares. Once monies are received and shares are issued, it is not as if share-subscribers and assessee lose touch with each other and become incommunicado. Onus thus is upon assessee to prove identity, creditworthiness of subscribers and most importantly genuineness of transactions under section 68

Top