Search Results For: Bombay High Court


CIT vs. Tata Power Solar Systems Ltd (Bombay High Court)

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DATE: December 16, 2016 (Date of pronouncement)
DATE: August 9, 2017 (Date of publication)
AY: 2008-09
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CITATION:
Transfer Pricing: A party is not barred in law from withdrawing from its list of comparables a company found to have been included on account of mistake of fact. The Transfer Pricing Mechanism requires comparability analysis to be done between like companies and controlled and uncontrolled transactions by carrying out of FAR analysis. The assessee's submission in arriving at the ALP is not final. It is for the TPO to examine and find out the companies listed as comparables which are in fact comparable

We find that the impugned order of the Tribunal holding that a party is not barred in law from withdrawing from its list of comparables, a company, if the same is found to have been included on account of mistake as on facts, it is not comparable. The Transfer Pricing Mechanism requires comparability analysis to be done between like companies and controlled and uncontrolled transactions. This comparison has to be done between like companies and requires carrying out of FAR analysis to find the same. Moreover, the Assessee’s submission in arriving at the ALP is not final. It is for the TPO to examine and find out the companies listed as comparables which are, in fact comparable

Posted in All Judgements, High Court

Premlata Purshottam Paldiwal vs. CIT (Bombay High Court)

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DATE: August 1, 2017 (Date of pronouncement)
DATE: August 9, 2017 (Date of publication)
AY: 1998-99, 1999-00, 2000-01, 2001-02
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CITATION:
Interest on interim compensation received pending final disposal by the High Court is income if there is no direction given by the Court. The source of funds to earn income cannot determine the taxability of the income. The fact that the assessee may have to return the compensation and interest on the principle of restitution as provided under S. 144 of the Civil Procedure Code is not relevant because restitution is not a certainty. Paragon Construction 274 ITR 413 (Del) distinguished

The source of funds to earn income cannot determine the taxability of the income earned on the capital amount which has been invested. This in the absence of any statutory mandate otherwise. The income earned would be chargeable to tax irrespective of the source of the funds from which the income has been earned. In the mercantile system of accounting, income accrues when the right to receive the same arises, even though the actual receipt could be at a later date. In the present case it is an accepted position that the right to receive the interest from the fixed deposits already accrued to the assessee. In such circumstances, the interest on the fixed deposit would be chargeable to tax, as sought to be done by the Assessing Officer under the head income from other sources

Posted in All Judgements, High Court

CIT vs. Diamond Dye Chem Ltd (Bombay High Court)

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DATE: July 7, 2017 (Date of pronouncement)
DATE: July 29, 2017 (Date of publication)
AY: 2008-09
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CITATION:
S. 145A: Irrespective of the method of accounting followed, the unutilized Cenvat credit does not constitute income and cannot be directly added to the closing stock. The assessee is entitled to follow the exclusive method and value the closing stock by excluding the modvat credit

Merely because the Modvat credit was irreversible credit offered to manufacturers upon purchase of duty paid raw materials, that would not amount to income which was liable to be taxed under the Act. It is also held that whichever method of accounting is adopted, the net result would be the same

Posted in All Judgements, High Court

Indermal Manaji vs. CIT (Bombay High Court)

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DATE: July 6, 2017 (Date of pronouncement)
DATE: July 27, 2017 (Date of publication)
AY: 1982-83
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CITATION:
S. 271(1)(c): If the basis on which penalty is initiated by the AO and the basis on which the quantum is confirmed on merits by the Tribunal are different, penalty cannot be levied

Explanation (1) to Section 271(1)(c) of the Act states that if a person fails to offer an explanation or offers an explanation which is found by the Assessing Officer to be false or such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then, the amount added or disallowed in computing the total income of such person, as a result thereof shall for the purpose of Clause (c) of the said SubSection be deemed to represent the income in respect of which particulars have been concealed. In the present case, no addition of the amount has been made, nor is a case of disallowance. Even the Tribunal had accepted the case of the assessee that he is carrying on the business of Draft Discounting. It is also observed that in many cases, the Tribunal has taken a view that in case of Draft Discounting, income is considered at Rs.1/per thousand and in some cases, at Rs.2/per thousand. In the present case, it considered to Rs.2/per thousand. The assessee, therefore, was not required to give any explanation as his case was accepted by the Tribunal in Appeal. As such, for all the above reasons, Explanation (1) to Section 271(1)(c) of the Act would not be attracted

Posted in All Judgements, High Court

Pr CIT vs. Bhagwan Industries Ltd (Bombay High Court)

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DATE: July 18, 2017 (Date of pronouncement)
DATE: July 27, 2017 (Date of publication)
AY: 2004-05
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CITATION:
S. 115JB: The AO is not entitled to add to the "book profits" the amounts arising from sale of land which are directly credited to the Capital Reserve Account in the balance sheet rather than routing it through Profit and Loss Account in the manner provided as per Part II and Part III of Schedule VI to the Companies Act, 1956

The learned counsel for the Appellant submits that Tribunal was not justified in not accepting the reworking of the book profits by the Assessing Officer as per the provisions of Section 115JB of the Income Tax Act. The Assessee had directly credited the profit of Rs.2,84,84,000/ arising from sale of land to Capital Reserve Account in the balance sheet rather than routing it through Profit and Loss Account in the manner provided as per Part II and Part III of Schedule VI to the Companies Act, 1956

Posted in All Judgements, High Court

CIT vs. The Mumbai Metropolitan Regional Iron and Steel Market Committee (Bombay High Court)

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DATE: July 17, 2017 (Date of pronouncement)
DATE: July 24, 2017 (Date of publication)
AY: -
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CITATION:
S. 12AA(3): The CIT is not entitled to withdraw s. 12A registration on the ground that the activities of the trust are no longer charitable after the insertion of the proviso to s. 2(15). The registration can be withdrawn only if a finding is given that the activities of the institution are not genuine or that the activities carried out are not in consonance with the object of the institution

It is apparent from the record that the Commissioner has invoked its powers under Section 12(AA)(3) of the Act. The said powers are circumscribed by the limitations imposed under Sub Section 3 of Section 12AA of the Act. The Commissioner, nowhere has given the finding that the activities of the Respondent institution are not genuine one or that the said activity carried out are not in consonance with the object of the institution. The Commissioner has merely relied on proviso to Sub-Section 2 of Section 15 of the Act, as it stood then

Posted in All Judgements, High Court

KSS Petron Private Ltd vs. ACIT (Bombay High Court)

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DATE: October 3, 2016 (Date of pronouncement)
DATE: July 20, 2017 (Date of publication)
AY: 2003-04
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CITATION:
S. 147: If the AO does not follow the law laid down in GKN Driveshafts 259 ITR 19, the reopening proceedings have to be quashed. There is no reason to restore the issue to the AO to pass a further/fresh order because it would give a licence to the AO to pass orders on reopening notice, without jurisdiction (without compliance of the law in accordance with the procedure), yet the only consequence, would be that in appeal, it would be restored to the AO for fresh adjudication after following the due procedure. This would lead to unnecessary harassment of the assessee by reviving stale/ old matters

Once the impugned order finds the Assessment Order is without jurisdiction as the law laid down by the Apex Court in GKN Driveshafts (India) Ltd., v/s. ITO 259 ITR 19 has not been followed, then there is no reason to restore the issue to the Assessing Officer to pass a further/fresh order. If this is permitted, it would give a licence to the Assessing Officer to pass orders on reopening notice, without jurisdiction (without compliance of the law in accordance with the procedure), yet the only consequence, would be that in appeal, it would be restored to the Assessing Officer for fresh adjudication after following the due procedure. This would lead to unnecessary harassment of the Assessee by reviving stale/ old matters

Posted in All Judgements, High Court

CIT vs. Orchid Industries Pvt. Ltd (Bombay High Court)

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DATE: July 5, 2017 (Date of pronouncement)
DATE: July 13, 2017 (Date of publication)
AY: -
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CITATION:
S. 68 Bogus share capital: Mere fact that parties to whom the share certificates were issued and who had paid the share capital money were not traceable and did not appear before the AO in response to summons does not mean that the transaction can be treated as bogus if the documentation shows the genuineness of the transaction

The Assessing Officer added Rs.95 lakhs as income under Section 68 of the Income Tax Act only on the ground that the parties to whom the share certificates were issued and who had paid the share money had not appeared before the Assessing Officer and the summons could not be served on the addresses given as they were not traced and in respect of some of the parties who had appeared, it was observed that just before issuance of cheques, the amount was deposited in their account

Posted in All Judgements, High Court

Mahavir Manakchand Bhansali vs. CIT (Bombay High Court)

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DATE: June 29, 2017 (Date of pronouncement)
DATE: July 6, 2017 (Date of publication)
AY: -
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CITATION:
S. 158BFA(1): If the delay in filing the return is completely attributable to the revenue for non-furnishing of copies of the documents and not giving inspection of the documents seized within a reasonable time after making the demand, the interest has to waived. Though s. 158BFA(1) does not (pre 2002) confer the power to waive interest, it has to be read in on equitable construction because the subject cannot be made to pay for the negligence of the Officers of the State (J. H. Gotla 4 SCC 343 followed)

This now takes us to the final issue viz. is it open under the provisions of Section 158-BFA(1) of the Act to the Assessing Officer to waive interest imposable thereunder even in the absence of any discretion provided to waive interest under Section 158-BFA(1) of the Act. There can be no dispute that bare reading of the section does not provide for any discretion to waive and/or reduce the interest imposable on account of the late filing of the return of income. It is a settled position in law that a fiscal statute has to be strictly interpreted, particularly when there is no ambiguity in the statute. The normal rule of interpreting a fiscal statute is the literal rule of interpretation. However, when the Parliament makes a law, it proceeds on the basis that the Executive i.e. the State will act fairly and not cause unjustified burden upon the subject. The provisions of Section 158BFA(1) of the Act proceeds on the above premise and it was expected of the State to grant copies of the documents seized and/or inspection of the record as expeditiously as possible, so as to enable the appellant to file his return of income. This particularly so, as to delay in filing of return, leads to levy of interest. This not having been done, as was expected under the Statute, the subject cannot be made to pay for the negligence of the Officers of the State. Therefore, in a case like this where strict construction may result in injustice, an equitable construction may be preferred

Posted in All Judgements, High Court

CIT vs. Oryx Finance and Investment Pvt. Ltd (Bombay High Court)

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DATE: July 1, 2017 (Date of pronouncement)
DATE: July 6, 2017 (Date of publication)
AY: -
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CITATION:
S. 221: A reading of s. 221 conjointly with the definition of “tax” in s. 2(43) leads to the irresistible conclusion that the phraseology “tax in arrears” in s. 221 would not take within its realm the interest component. The AO can impose penalty for default in making the payment of tax, but the same shall not exceed the amount of tax in arrears. Tax in arrears would not include the interest payable u/s 220(2) of the Act

Reading Section 221 in its entirety, it is abundantly clear that the aspect of default in payment of tax and the amount of interest payable are treated as distinct and separate components. The section categorically and specifically states that when an Assessee is in default or is deemed to be in default in making payment of tax, he shall in addition to the amount of arrears and the amount of interest payable under SubSection 2 of Section 220, be liable, to pay penalty, however the amount of penalty does not exceed the amount of tax in arrears. The terminology “default in making a payment of tax and amount of interest payable” are considered to be separate for imposition of penalty and penalty is to be levied on account of default in making a payment of tax. However, the total amount of penalty shall not exceed the amount of tax in arrears. The said penalty for non payment of the tax is in addition to the levy of interest under SubSection 2 of Section 220. Under no principle of interpretation, the arrears of tax as laid down in the said Section would include the amount of interest payable under SubSection 2 of Section 220. The amount of penalty will have to be restricted on the arrears of tax, which would not include the interest component charged under Section 220(2) of the Act

Posted in All Judgements, High Court