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DATE: September 27, 2019 (Date of pronouncement)
DATE: October 25, 2019 (Date of publication)
AY: 2004-05
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CITATION:
S. 2(15)/11 "Charitable Purpose": The fact that the carrying on of charitable activities results in a surplus does not mean that assessee exists for profit. “Profit” means that owners have a right to withdraw the surplus for any purpose including personal purpose. However, if the surplus is ploughed back into the same charitable activities, the assessee cannot be said to be carrying out commercial activities in the nature of trade, commerce or business. The fact that the assessee has dealings with, & share of profits from, BCCI (a commercial entity) does not affect its charitable status

It is not in dispute that the three Associations have not distributed any profits outside the organization. The profits, if any, are ploughed back into the very activities of promotion and development of the sport of cricket and, therefore, the assessees cannot be termed to be carrying out commercial activities in the nature of trade, commerce or business.(iii) It is not correct to say that as the assessees received share of income from the BCCI, their activities could be said to be the activities of the BCCI. Undoubtedly, the activities of the BCCI are commercial in nature. The activities of the BCCI is in the form of exhibition of sports and earn profit out of it.However, if the Associations host any international match once in a year or two at the behest of the BCCI, then the income of the Associations from the sale of tickets etc., in such circumstances, would not portray the character of commercial nature

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DATE: October 3, 2019 (Date of pronouncement)
DATE: October 23, 2019 (Date of publication)
AY: 2005-06
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CITATION:
Writ Petition for non-grant of refund: Though an order refusing to issue refund is not an appeallable order u/s 246A, it is subject to revision u/s 264. As the alternate remedy of revision is available, the Writ is not maintainable (Larsen & Toubro 326 ITR 514 (Bom) referred)

If one contrasts section 264 of the Act with section 246A of the Act which provides for appeal, it would be noticed that unlike section 246A of the Act which specifies sections of the Act from which an appeal would lie, section 264 of the Act provides for revision from `any order’ under the Act. This is another indication that the Commissioner of Income Tax has very wide powers to correct any order passed by an officer subordinate to him

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DATE: September 25, 2019 (Date of pronouncement)
DATE: October 12, 2019 (Date of publication)
AY: 2009-10
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CITATION:
Taxability of loan waivers u/s 28(iv), 41(1): Argument of Revenue that loan taken from agents/ dealers is on revenue account or that on waiver of the loan, its character undergoes a change and it becomes on revenue account is not correct. S. 28(iv) & 41(1) cannot apply if the loan is on capital account and the assessee has never claimed any deduction therefor in the past (Solid Containers 308 ITR 417 (Bom) distinguished, Mahindra and Mahindra Ltd 404 ITR 1 (SC) followed)

Sine-qua-non for application of Section 41(1) of the Act, is that there should have been allowance or deduction claimed by the Assessee in any Assessment Year as a loss, expenditure or trading liability incurred by the Assessee. Subsequently, if any remission or waiver is granted in respect of which such an allowance/deduction has been claimed, then the Assessee is liable to pay t ax on the amount waived/ remitted under Section 41(1) of the Act. This, as the Court held is only to ensure that Assessee does not keep double benefit – one by way of deduction and another by waiver of the amount, which has already been deducted in computing the tax

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DATE: January 15, 2019 (Date of pronouncement)
DATE: October 12, 2019 (Date of publication)
AY: 2006-07
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CITATION:
Bogus loss from Client Code Modification (CCM): Even if the Revenue's theory of the assessee having enabled the clients to claim contrived losses is correct, the Revenue had to bring on record some evidence of the income earned by the assessee in the process, be it in the nature of commission or otherwise. Adding the entire amount of doubtful transactions by way of assessee's additional income is wholly impermissible. The fate of the individual investors in whose cases the Revenue could have questioned the artificial losses is not known

The Tribunal accepted the assessee’s explanation and discarded the Revenue’s theory that profit of the assessee’s company were passed on to the clients. It was also noticed that the Revenue has not contended that the client code modification facility is often misused by the assessee to pass on losses to the investors, who may have sizable profit arising out of commodity trading against which such losses can be set off. The Revenue normally points out number of such instances of client code modifications as well as nature of errors in filling of the client code

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DATE: February 28, 2019 (Date of pronouncement)
DATE: October 9, 2019 (Date of publication)
AY: 2013-14
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CITATION:
Stay of demand u/s 220(6)/254(2A): The Dept is not right in relying upon the decision of the Supreme Court in Asian Resurfing of Road Agency vs. CBI (AIR 2018 SC 2039) to contend that any stay against recovery granted would automatically lapse after six months. This is neither the purport of the judgment of the SC, nor the observations made in the said judgment in the context of civil and criminal litigation can be imported in present set of quasi judicial proceedings. The power of the AO to review the situation every six months, would not authorize him to lift the stay previously granted after full consideration and insist on full payment of tax without the assessee being responsible for delay in disposal of the appeal or any other such similar material change in circumstances

We are prima facie of the view that the Revenue Authorities committed serious error. Against the total demand arising out of the order of assessment of Rs. 205 crore, the Assessing Officer has already recovered a total of Rs. 140 crores by now through different means. There is no allegation that the petitioner is responsible for delay in disposal of the appeal before the Commissioner. Merely relying upon the decision of the Supreme Court in the case of Asian Resurfacing of Road Agency Pvt Ltd (supra), Revenue Authorities now held a belief that any stay against the recovery granted would automatically lapse after six months

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DATE: September 19, 2018 (Date of pronouncement)
DATE: October 9, 2019 (Date of publication)
AY: -
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CITATION:
Service Tax/ GST: The collection of non-refundable deposits by the assessee from prospective flat buyers, for maintaining the building, does not result in the assessee providing management, maintenance or repair service as defined in Section 65(105)(zzg) of Finance Act 1994

The service of maintenance, management or repair, rendered by any person to any other person is a taxable service but in the context and backdrop in which the issue arises before us, we do not think that a taxable service is rendered. The Revenue does not wish to take into consideration the background in which buildings are maintained and till they are conveyed with complete title to even the land beneath. Thus, the provisions of Sections 5 and 6 and eventually the further provisions right upto Section 13 of the MOFA would make it clear that builder and developer maintains and repairs the property till it is conveyed or the title in the same is conveyed to the Flat purchasers or the legal entity which would ultimately be formed by him

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DATE: September 17, 2019 (Date of pronouncement)
DATE: October 2, 2019 (Date of publication)
AY: 2014-15
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CITATION:
S. 10(38) Bogus LTCG from Penny Stock: The analysis of balance sheet & P&L account of the Co shows that astronomical increase in share price which led to returns of 491% for assesee was completely unjustified. The EPS & other financials parameters cannot justify price at which assessee claims to have sold shares to obtain Long Terms Capital Gains. It is not explained as to why anyone would purchase said shares at such high price

The AO has worked out the glaring facts, which cannot be ignored and which are clear indicative of the non-genuine nature of the transactions. The assessee could not satisfactorily explain how the investments in the absence of any evidence as to the financials, growth and operations of the company could earn profit of 4910% over a short period of 5 months from the date of allotment of shares

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DATE: March 11, 2019 (Date of pronouncement)
DATE: September 21, 2019 (Date of publication)
AY: 2006-07
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CITATION:
S. 254: We express our pain and anxiety. The Tribunal ought not to have recorded any such concession on the part of the AR contrary to the written submissions. There is no justification on the part of the ld. Members of the Tribunal to record any such concession on behalf of the assessee. In future, if any such concession is made by any AR on behalf of the assessees, the Tribunal should take either an Affidavit or at least a written endorsement made on the record of the case duly signed by them, so that no such occasion of taking a stand contra to the alleged concession, would arise before higher Courts

Expressing again our anguish and pain on the same, we direct that in future, if any such concession is made by any Authorised Representative on behalf of the Assessees, the Tribunal should take either an Affidavit from Assessee and the counsel on behalf of the Assessee or atleast a written endorsement made on the record of the case duly signed by them, so that no such occasion of taking a stand otherwise or contra to the alleged concession made by them, would arise before the higher Courts

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DATE: January 4, 2019 (Date of pronouncement)
DATE: September 21, 2019 (Date of publication)
AY: 2010-11
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CITATION:
S. 41(1) (old & unpaid liability for sundry creditors): It is well settled through series of judgments that merely because a debt has not been repaid for over three years, would not automatically imply cessation of liability. Exhaustion of period of limitation may prevent filing of recovery proceedings in a Court of law, nevertheless it cannot be stated by itself that the liability to repay the amount had ceased. Such liability cannot be termed as bogus

It is well settled through series of judgments that merely because a debt has not been repaid for over three years, would not automatically imply cessation of liability. Exhaustion of period of limitation may prevent filing of recovery proceedings in a Court of law, nevertheless it cannot be stated by itself that the liability to repay the amount had ceased. Going by this logic itself, the Assessing Officer, in our opinion, committed an error invoking Section 41(1) of the Act

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COURT:
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DATE: August 30, 2019 (Date of pronouncement)
DATE: September 14, 2019 (Date of publication)
AY: 1997-98
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CITATION:
S. 147/148: It is mandatory for the AO to follow the procedure laid down in GKN Driveshafts 259 ITR 19 (SC) and to pass a separate order to deal with the objections. The disposal of the objections in the assessment order is not sufficient compliance with the procedure. The failure to follow the procedure renders the assumption of jurisdiction by the Assessing Officer ultra vires (Bayer Material Science 382 ITR 333 (Bom) & KSS Petron (Bom) followed)

The moot question is, therefore, the disposal of the objections by the Assessing Officer in his assessment order dated 26th March, 2004 constitutes sufficient compliance with the procedure prescribed by the Hon’ble Supreme Court in the case of GKN Driveshafts (India) Ltd. (supra) or, whether it was necessary for the Assessing Officer to have first disposed of the Appellant’s objections by passing a speaking order and only upon communication of the same to the Appellants, proceeded to reopen the assessment

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