Category: High Court

Archive for the ‘High Court’ Category


Mehsana District Central Co-op Bank Ltd vs. ACIT (Gujarat High Court)

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DATE: June 19, 2017 (Date of pronouncement)
DATE: June 27, 2017 (Date of publication)
AY: 2007-08
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CITATION:
S. 147/148: Law on validity of reopening of assessment when the AO is acting on the dictates of the audit party and is not applying his own mind explained

Nevertheless, if we see entire sequence, it becomes clear that the Assessing Officer was clearly acting under the dictates of the audit party. Even after issuing the notice, he still maintained an opinion that no income chargeable to tax had escaped assessment. If that be so, he ought to have dropped the assessment proceedings, at least at that stage when the petitioner raised the objections which even without such objections, the Assessing Officer was convinced, were valid

Posted in All Judgements, High Court

B.A.Mohota Textiles Traders Pvt. Ltd vs. DCIT (Bombay High Court)

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DATE: June 12, 2017 (Date of pronouncement)
DATE: June 21, 2017 (Date of publication)
AY: 1995-96
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CITATION:
Capital Gains: While a family arrangement/settlement does not amount to a "transfer" u/s 2(47) as it only recognizes "pre-existing rights" between the parties, the same applies only to members of the families and not to transfers made by corporate entities. The corporate veil can never be lifted at the instance of the company itself because that would amount to its denying its own corporate existence. The fact that the Company is wholly owned by the members of the family is irrelevant

There is no dispute before us that a family arrangement/settlement would not amount to a transfer. So far as the members of Mohota family are concerned, who are parties to the family settlement, any transfer inter se between them on account of family settlement would not result in a transfer so as to attract the provisions of the Capital gain tax under the Act. However, in the present case, we are not concerned with the members of Mohota family who were parties to the family settlement, but with transfer of share done by the Company incorporated under the Companies Act having separate/independent corporate existence, perpetual succession and common seal. This Company is independent and distinct from it’s members

Posted in All Judgements, High Court

CIT vs. Mettler Toledo India Pvt. Ltd (Bombay High Court)

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DATE: June 7, 2017 (Date of pronouncement)
DATE: June 21, 2017 (Date of publication)
AY: -
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CITATION:
S. 92C +/- 5%: The contention that there is an error because mere mathematical calculation shows that the arm's length purchase price as worked out by the TPO falls beyond (+)/(-) 5% range and consequently falls outside the scope of the second proviso to s. 92C(2) cannot be considered if it was not raised before the CIT(A) & ITAT

Whether on the facts and circumstances of the case and in law, the ITAT is correct in directing the Assessing Officer to allow benefit of +/5% to the assessee without considering Explanation (2A) to Section 92C(2) inserted by Finance Act 2012 w.e.f. 1.4.2002, whereby deduction of 5% earlier being allowed by appellate authorities has been explicitly prohibited w.e.f. 1.4.2002 and therefore, the ITAT ought not to have issued such directions to the A.O. as are in contravention of the provisions of the statute

Posted in All Judgements, High Court

CIT vs. Historic Infracon (Delhi High Court)

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DATE: May 19, 2017 (Date of pronouncement)
DATE: June 2, 2017 (Date of publication)
AY: -
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CITATION:
Condonation of delay: Government departments are under a special obligation to ensure that they perform their duties with diligence and commitment. Condonation of delay is an exception and should not be used as an anticipated benefit for Government departments. The mere fact that the AO was busy in other time-bearing assessments is not an excuse for delay particularly given the fact that s. 260A provides a long time period of 120 days. Every day’s delay has to be explained

In our view, it is the right time to inform all the government bodies, their agencies and instrumentalities that unless they have reasonable and acceptable explanation for the delay and there was bonafide effort, there is no need to accept the usual explanation that the file was kept pending for process. The government departments are under a special obligation to ensure that they perform their duties with diligence and commitment. Condonation of delay is an exception and should not be used as an anticipated benefit for the Government Departments. The law shelters everyone under the same light and should not be swirled for the benefit of a few

Posted in All Judgements, High Court

DIT vs. Rolls Royce Industrial Power India Ltd (Delhi High Court)

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DATE: May 18, 2017 (Date of pronouncement)
DATE: May 27, 2017 (Date of publication)
AY: 1998-99, 1999-00, 2001-02
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CITATION:
S. 147/148 reassessment has to be based on "fresh material". A reopening based on reappraisal of existing material is invalid. The assessee's duty is only to disclose facts and not to make inferences. Consolidated Photo 281 ITR 394 (Del) is not good law

The reopening was not based on any fresh material. By revisiting the same materials the successor AO now concluded that the payments received by the Assessee pursuant to the O&M Agreements should be treated as FTS. In the circumstances, the view taken by a successor AO on the same material was indeed nothing but a mere change of opinion. It is a well-settled legal proposition, as explained in Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191(SC) that once an Assessee has discharged the burden of not only producing the account books and other documents, but also the specific material relevant to the assessment, “it is for the Income-tax Officer to draw the proper inferences of fact and law therefrom and the Assessee cannot further be called upon to do so for him.” In Indian Oil Corporation v. ITO [1986] 159 ITR 956 the Court pertinently observed “it is for the taxing authority to draw inference. It is not necessary for the Assessee to draw inference.” These observations apply on all fours to the case on hand

Posted in All Judgements, High Court

Ameeta Mehra vs. ADIT (Delhi High Court)

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DATE: May 16, 2017 (Date of pronouncement)
DATE: May 27, 2017 (Date of publication)
AY: 2006-07 to 2011-12
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CITATION:
S. 132/153A: Important law explained on the preconditions necessary for the department to initiate valid search and seizure action u/s 132 and whether the assessee is entitled to challenge the same. Consequences of the search being declared void on the s. 153A assessment also explained

The law in relation to searches under Section 132 of the Act has been explained in a large number of decisions of the Supreme Court and the High Courts. The jurisdictional facts that have to be established before a search under Section 132 (1) of the Act can be authorised are that (i) the authority issuing the authorisation is in possession of some credible information, other than surmises and conjectures (ii) that the authority has reason to believe that the conditions stipulated in clauses (a), (b) and (c) of Section 132 (1) qua the person searched exist; and (iii) the said information has nexus to such belief. The Courts have laid emphasis on the mandatory nature of the above requirement to be fulfilled under Section 132 (1) of the Act

Posted in All Judgements, High Court

Pr CIT vs. Meetu Gutgutia (Delhi High Court)

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DATE: May 25, 2017 (Date of pronouncement)
DATE: May 26, 2017 (Date of publication)
AY: 2000-01 to 2004-05
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CITATION:
S. 153A: Entire law explained on whether concluded assessments can be reopened u/s 153A even in the absence of incriminating material found during the search in the light of the apparently conflicting verdicts in CIT vs. Kabul Chawla 380 ITR 573 (Del) and Dayawanti Gupta v. CIT 390 ITR 496 (Del)

Section 153A of the Act is titled “Assessment in case of search or requisition”. It is connected to Section 132 which deals with ‘search and seizure’. Both these provisions, therefore, have to be read together. Section 153A is indeed an extremely potent power which enables the Revenue to re-open at least six years of assessments earlier to the year of search. It is not to be exercised lightly. It is only if during the course of search under Section 132 incriminating material justifying the re-opening of the assessments for six previous years is found that the invocation of Section 153A qua each of the AYs would be justified. The question whether unearthing of incriminating material relating to any one of the AYs could justify the re-opening of the assessment for all the earlier AYs was considered both in CIT v. Anil Kumar Bhatia and CIT v. Chetan Das Lachman Das. Incidentally, both these decisions were discussed threadbare in the decision of this Court in Kabul Chawla 380 ITR 573 (Del)

Posted in All Judgements, High Court

CIT vs. M/s Carpet Mahal (Rajasthan High Court)

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DATE: May 10, 2017 (Date of pronouncement)
DATE: May 25, 2017 (Date of publication)
AY: -
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CITATION:
Bogus purchases: In view of the Supreme Court’s order in Vijay Proteins Ltd vs. CIT whereby the verdicts of the Gujarat High Court in Sanjay Oilcake Industries vs. CIT 316 ITR 274 (Guj) and N.K. Industries Ltd vs. Dy. CIT were confirmed, the AO has to accept the law and verify whether the transaction is genuine or not on the basis of the aforesaid three judgments

Considering the law declared by the Supreme Court in the case of Vijay Proteins Ltd. Vs. Commissioner of Income Tax, Special Leave to Appeal decided on 06.04.2015 whereby the Supreme Court has dismissed the SLP and confirmed the order dated 09.12.2014 passed by the Gujarat High Court and other decisions of the High Court of Gujarat in the case of Sanjay Oilcake Industries Vs. Commissioner of Income Tax (2009) 316 ITR 274 (Guj) and N.K. Industries Ltd. Vs. Dy. C.I.T., Tax Appeal No.240/2003 decided on 20.06.2016, the parties are bound by the principle of law pronounced in the aforesaid three judgments

Posted in All Judgements, High Court

CIT vs. Laxman Industrial Resources Pvt.Ltd (Delhi High Court)

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DATE: March 14, 2017 (Date of pronouncement)
DATE: May 20, 2017 (Date of publication)
AY: 2002-03
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CITATION:
Bogus share capital: Fact that the investigation wing’s report alleged that the assessee was beneficiary to bogus transactions and that the identity of shareholders, genuineness etc was suspect is not sufficient. The AO is bound to conduct scrutiny of documents produced by the assessee and cannot rest content by placing reliance on the report of the investigation wing

The assessee had provided several documents that could have showed light into whether truly the transactions were genuine. It was not a case where the share applicants are merely provided confirmation letters. They had provided their particulars, PAN details, assessment particulars, mode of payment for share application money, i.e. through banks, bank statements, cheque numbers in question, copies of minutes of resolutions authorizing the applications, copies of balance sheets, profit and loss accounts for the year under consideration and even bank statements showing the source of payments made by the companies to the assessee as well as their master debt with ROC particulars. The AO strangely failed to conduct any scrutiny of documents and rested content by placing reliance merely on a report of the Investigation Wing. This reveals spectacular disregard to an AO’s duties in the remand proceedings which the Revenue seeks to inflict upon the assessee in this case

Posted in All Judgements, High Court

CIT vs. Pashupati Nath Agro Food Products Pvt. Ltd (Allahabad High Court)

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DATE: May 4, 2017 (Date of pronouncement)
DATE: May 13, 2017 (Date of publication)
AY: -
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CITATION:
S. 145: If the AO has not rejected the books of account, it means that the assessee has maintained the books of accounts in accordance with the prescribed standards as per s. 145 of the Act. If so, the AO is not entitled to make any addition on account of sale of goods out of books or for investment in stock out of undisclosed sources

On perusal of the impugned judgment and order of the Tribunal dated 27.10.2009 reveals that the assessee has maintained the books of accounts in accordance with the prescribed standard as per Section 145 of ‘the Act’. The account books have not been rejected by the assessing officer. In view of the above, the Tribunal formed an opinion where once the account books are expected to be maintained in the prescribed accounting standard, the assessing officer could not have made any additions towards the sale of rice treating it to be outside the books of accounts or towards investing in stock of rice and wheat outside the books of accounts

Posted in All Judgements, High Court