Category: Tribunal

Archive for the ‘Tribunal’ Category


ITO vs. Mohanraj Trading & Exchange (ITAT Mumbai)

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DATE: July 2, 2018 (Date of pronouncement)
DATE: November 3, 2018 (Date of publication)
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CITATION:
S. 250/ 254: If a decision is challenged by the assessee both on the issue of jurisdiction as well as on merits, the appellate authority has to decide both issues. He cannot decline to decide one of the issues on the basis that the decision on the other issue renders it academic. This approach leads to multiplication of proceedings and leads to delay

Examining the present case on the touchstone of above said case law, we find that the order of the ld. CIT(A) here directly falls under the ambit of Hon’ble High Court’s order as above. The ld. CIT(A) has decided one issue and has left undecided another issues duly raised before him. Hence, we are of the considered opinion that these issues relating to validity of reopening were duly raised, which have been left undecided by the ld. CIT(A) and need to be remitted to the file of the ld. CIT(A). The ld. CIT(A) is directed to complete his appellate order by deciding on these issues regarding the validity of reopening which were duly raised before him by the assessee

Sri Dashmesh Academy Trust vs. CIT (Exemptions) (ITAT Chandigarh)

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DATE: October 31, 2018 (Date of pronouncement)
DATE: November 3, 2018 (Date of publication)
AY: -
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CITATION:
S. 12A Charity Registration: Exemplary cost of Rs. 1 lakh levied upon trust for fraud in wrongly seeking exemption on basis that it is controlled & managed by the Govt. The ITAT is deemed to be a Civil Court and its proceedings are deemed to be judicial proceedings within the meaning of s. 193 & 228 & of the Indian Penal Code. Any attempt to play fraud on the ITAT by way of conveying wrong and false facts and pleadings is required to be strictly dealt with

We are further pained to note here that identical contentions as were raised by the representatives of the Trust before the lower authorities that the Trust is controlled and managed by the Government or that its funds and properties otherwise belong to the Government, have been raised by the counsel for the assessee Trust before us also and further that even otherwise, dissolution clause has been added vide the amended resolution. This, in our view, is a clear and visible attempt on behalf of the trust to mislead this Bench of the Tribunal by way of concealing the real and true facts that the Members of the Trust have, by not extending the term of Board of Governors, conveniently entrusted unto themselves the control and management of the Trust. Had the case of the Trust been not carefully examined, these important and relevant facts would have remained wrapped under the carpet, and the Trust could have managed to get the relief of exemption from taxation by presenting wrong and false facts

ITO (TDS) vs. The Distt. Manager, Punjab State Warehousing Corporation (ITAT Chandigarh)

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DATE: October 30, 2018 (Date of pronouncement)
DATE: November 3, 2018 (Date of publication)
AY: 2012-13
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CITATION:
S. 194C TDS: Law on whether the by-product allowed to be retained by the miller can be regarded as consideration 'paid' in kind by the procurement agency so as to create an obligation to deduct TDS thereon explained in the light of Kanchanganga Sea Foods Ltd. vs CIT 325 ITR 549 (SC) & other judgements

Though, before the milling of the paddy, the Government / procurement agencies remain the owner of the paddy, however, the moment the paddy is milled, the Government / procurement agencies lose their ownership and control over the paddy and the by-product but have right only on the ‘milled rice’ for which they pay a stipulated amount of Rs. 15/- as milling charges. The relevant words in the clause (8) of the Agreement that “the Government / Procuring Agency shall have no right or responsibility in this regard” speaks that to retain the by-product cannot always said to be ‘right’ over a thing but sometimes it becomes a ‘responsibility’ also and the Government / Procurement Agencies are not willing to own this responsibility.

Deepak B Shah vs. ACIT (ITAT Mumbai)

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DATE: October 31, 2018 (Date of pronouncement)
DATE: November 2, 2018 (Date of publication)
AY: 2006-07, 2007-08
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CITATION:
S. 69A Black Money: If the assessee is a discretionary beneficiary of the HSBC Bank Account and is not the owner, addition u/s 69A cannot be sustained. In the case of a discretionary trust, the income of the trust cannot be added in the hands of the beneficiary. The trustees are the representative assessees who are liable to be taxed for the income of the trust (All judgements considered)

We find that addition has been made by the AO U/s 69A of the Act to justify the addition on account of peak balance. We agree with the contentions of the Ld. AR that it is sine qua non for invoking section 69A of the IT Act., the assessee must be found to be the owner of money, bullion, jewellery or other valuable articles and whereas in the present case the money is owned and held by Mr. Dipendu Bapalal Shah a foreign resident in an account HSBC, Geneva and also admitted that he is the owner of the money in the HSBC Account Geneva

DCIT vs. Varsity Education Management Pvt. Ltd (ITAT Mumbai)

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DATE: October 24, 2018 (Date of pronouncement)
DATE: October 31, 2018 (Date of publication)
AY: 2012-13
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CITATION:
S. 68 Bogus share premium: The AO cannot assess the share premium as income on the ground that it is "excessive". The share premium worked out in the Valuation Certificate is the minimum amount that can be collected by the assessee under RBI regulations. There is no bar on collecting higher amount as share premium. There are several factors that are taken into consideration while issuing the equity shares to shareholders/investors, such as Venture capital funds and Private Equity funds. The premium is determined between the parties on the basis of commercial considerations and cannot be questioned by the tax authorities. The AO is not entitled to sit on the arm chair of a businessman and regulate the manner of conducting business (All judgements considered)

Once the AO was satisfied with the identity and credit worthiness of the investor and genuineness of transactions, the assessee can be said to have proved the “nature and source” of the cash credits. The amounts received as Share premium are in the nature of capital receipts as per the decision rendered by Hon’ble Bombay High Court in the case of Vodafone India Services P Ltd (supra) and the assessee has also discharged the onus placed upon it u/s 68 of the Act. In fact, the AO himself accepted the share premium to the extent of Rs.672/- per share as Capital receipt. Hence the “nature” of alleged excess share premium amount cannot be considered as receipt of income nature

Dimension Data Asia Pacific Pte. Ltd vs. DCIT (ITAT Mumbai)

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DATE: October 12, 2018 (Date of pronouncement)
DATE: October 31, 2018 (Date of publication)
AY: 2012-13
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CITATION:
S. 90(2): If a non-resident assessee derives income from multiple sources in India, it is entitled to adopt the provisions of the Act for one source and the DTAA for the other source, whichever is more beneficial to it, even though the payer is common for both sources

As per Section 90(2), the assessee is entitled to claim benefits of the Double Tax Avoidance Agreement to the extent the same are more “beneficial” as compared to the provisions of the Act. While doing so, in cases of multiple sources of income, an assessee is entitled to adopt the provisions of the Act for one source while applying the provisions of the DTA for the other. This view of ours is supported by the order of this ITAT Bangalore Bench in the case of IBM world Trade Corporation v ADIT (IT) (2015) 58 taxmann.com 132 (Bang) and IMB World Trade Corpn v DDIT (IT) (2012) 20 taxmann.com 728 (Bang)

Omni Lens Pvt. Ltd vs. DCIT (ITAT Ahmedabad)

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DATE: October 16, 2018 (Date of pronouncement)
DATE: October 26, 2018 (Date of publication)
AY: 2014-15
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CITATION:
S. 254/ 36(1)(vii): If the AO has failed to discharge his obligation to conduct a proper inquiry, it is the obligation of the ITAT to ensure that effective inquiry is carried out. The AO has not examined the crucial aspect whether the bad debts claimed by the assessee due to the NSEL scam constitutes a "speculative transaction" u/s 43(5) and whether Explanation to s. 73(1) applies

A perusal of the order of the lower authorities gives an infallible impression that such crucial aspect has not been addressed. Without understanding the fate of the goods purchased purportedly in the custody of or on behalf of the assessee, it will not be possible to determine the issue. Where the purchase with delivery is settled by cross contract of sale with delivery at future date against sale proceeds, the entire debt turning bad is rather innocuous

ITO vs. Iraisaa Hotels Pvt. Ltd (ITAT Mumbai)

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DATE: October 10, 2018 (Date of pronouncement)
DATE: October 18, 2018 (Date of publication)
AY: 2007-08
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CITATION:
S. 68 Bogus share capital: The ITAT is an adjudicator and not an investigator. It has to rely upon the investigation / enquiry conducted by the AO. The Dept cannot fault the ITAT's order and seek a recall on the ground that an order of SEBI, though available, was not produced before the ITAT at the hearing. The negligence or laches lies with the Dept and for such negligence or laches, the order of the ITAT cannot be termed as erroneous u/s 254(2)

After the passing of the order of the Tribunal the Department has come forward with the final order of the SEBI by stating that, though, it was available at the time of hearing of appeal but it could not be brought to the notice of the Tribunal. Thus, as could be seen whatever negligence or laches for not bringing the final order of SEBI to the notice of the Tribunal lies with the Department and for such negligence or laches of the Department, the appeal order passed by the Tribunal cannot be termed as erroneous to bring it within the ambit of section 254(2) of the Act.

Sudhir Menon vs. ACIT (ITAT Mumbai)

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DATE: October 3, 2018 (Date of pronouncement)
DATE: October 18, 2018 (Date of publication)
AY: 2010-11
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CITATION:
S. 148: A notice u/s 143(2) issued by the AO before the assessee files a return of income has no meaning. If no fresh notice is issued after the assessee files a return, the AO has no jurisdiction to pass the reassessment order and the same has to be quashed

In view of consistent view of jurisdictional High Court and Delhi High Court, in the absence of pending return of income, the provisions of section 143(2) of the Act is clear that notice can be issued only when a valid return is pending for assessment. Accordingly, this notice has no meaning

Sunshine Metals & Alloys vs. ITO (ITAT Mumbai)

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DATE: October 12, 2018 (Date of pronouncement)
DATE: October 16, 2018 (Date of publication)
AY: 2008-09
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CITATION:
S. 68 Bogus share capital: If (a) the assessee has furnished the Name, Address, PAN no and Share Application Form to prove that the shares were allotted to the applicants and (b) the bank statement show that money was received through banking channels and there were no immediate withdrawals to suggest that the share application amounts have been returned back to these parties in cash, it means the assessee has discharged the primary onus cast upon it to prove the identity, capacity and genuineness of transactions

The assessee has furnished the Name, Address, PAN no and Share Application Form to prove that the shares were allotted to the applicants. The assessee has also furnished its bank statement to show that the money was received through banking channels and there were no immediate withdrawals from the banks which shows that the share application amounts have not been returned back to these parties in cash. Thus, the assessee has discharged the primary onus cast upon it to prove the identity, capacity and genuineness of transactions. We also find that the CIT(A) provided opportunity to assessee to cross examine Shri Mukesh Choksi by sending the matter to AO for remand report. During remand proceeding, the AO provided opportunity to assessee to cross examine Shri Mukesh Choksi and who in turn during cross examination admitted having invested in assessee company by these two concerns

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