Search Results For: ITAT Delhi


Anubhav Jain vs. ITO (ITAT Delhi)

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DATE: November 26, 2018 (Date of pronouncement)
DATE: November 28, 2018 (Date of publication)
AY: 2014-15
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CITATION:
Bogus Capital gains: Reliance by the AO on statements of third parties without giving the assessee an opportunity of cross-examination is a gross failure of the principles of natural justice and renders the assessment order a nullity

Not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected

Arun Kumar vs. ACIT (ITAT Delhi)

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DATE: November 5, 2018 (Date of pronouncement)
DATE: November 9, 2018 (Date of publication)
AY: 2014-15
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S. 10(38)/68 Bogus long-term capital gains from penny stocks: It cannot be inferred that the assessee has manipulated the share price merely because it moved up sharply. The AO has to produce material/evidence to show that the assessee/ brokers did price rigging/manipulation of shares. The AO must also show that the relevant evidence produced by the assessee in the form of bills, contract notes, demat statement, bank account etc to prove the genuineness of the transactions are false or fictitious or bogus (All judgements considered)

We note that in the absence of material/evidence the allegations that the assessee/brokers got involved in price rigging/manipulation of shares must therefore also fail. At the cost of repetition, we note that the assessee had furnished all relevant evidence in the form of bills, contract notes, demat statement and bank account to prove the genuineness of the transactions relevant to the purchase and sale of shares resulting in long term capital gain. These evidences were neither found by the AO nor by the ld. CIT(A) to be false or fictitious or bogus. The facts of the case and the evidence in support of the evidence clearly support the claim of the assessee that the transactions of the assessee were genuine and the authorities below was not justified in rejecting the claim of the assessee that income from LTCG is exempted u/s 10(38)

DCIT vs. Moni Kumar Subba (ITAT Delhi)

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DATE: October 12, 2018 (Date of pronouncement)
DATE: October 15, 2018 (Date of publication)
AY: 2006-07
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CITATION:
S. 23(1)(b), 50C: Law explained on (i) whether notional interest on interest-free security deposit can be added while computing annual value u/s 23(1)(b) & (ii) whether the interest-free security deposit can be treated as 'full value of consideration' u/s 50C as it was included in 'assessable value' by the Stamp Duty Valuation Authority

The object of Section 2(47)(vi) appears to be to bring within the tax net a de facto transfer of any immovable property. The expression “enabling the enjoyment of” takes colour from the earlier expression “transferring”, so that it is clear that any transaction which enables the enjoyment of immovable property must be enjoyment as a purported owner thereof the idea is to bring within the tax net, transactions, where, through title may not be transferred in law, there is, in substance, a transfer of title in fact

Rajat Exports Import (India) Pvt. Ltd vs. ITO (ITAT Delhi)

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DATE: October 1, 2018 (Date of pronouncement)
DATE: October 10, 2018 (Date of publication)
AY: 2004-05
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S. 68 Bogus share capital: Failure by the AO to offer cross-examination of the persons whose statements are relied upon means that no adverse inference can be drawn against the assessee. Dept's plea for a remand is not acceptable if the assessee has discharged primary onus (Nova Promoters 342 ITR 169 (Del) & Jansampark Advertising 375 ITR 373 (Del) distinguished). Paradise Inland 98 CCH 0417 followed

The assessee was supplied with the seized material at the fag end of the assessment proceedings and assessee sought opportunity to cross examine these persons for rebuttal of the allegation. However, the AO did not provide any opportunity to the assessee to cross examine these persons on behalf of assessee to find out the truth. Therefore, such statements cannot be read in evidence against the assessee. We rely upon decision of the Supreme Court in the case of Kishanchand Chelaram 125 ITR 713 (SC) and of Bombay High Court in case of Paradise Inland Shipping Pvt. Ltd

ACIT vs. RJ Corp Ltd (ITAT Delhi)

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DATE: October 1, 2018 (Date of pronouncement)
DATE: October 6, 2018 (Date of publication)
AY: 2009-10
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CITATION:
Tax Planning: The fact that the assessee bought and sold shares of groups concerns with a view to book loss and off-set the capital gains from another transaction does not mean that the loss can be treated as bogus if the documentation is in order. The loss cannot be treated as "speculation loss" under the Explanation to s. 73 because the shares were held as investments

The claim of assessee-company is supported by the documents on record. Therefore, Ld. CIT(A) rightly came to the finding that the assessee-company has genuinely entered into purchase and sale of shares and if any, loss have been suffered by the assessee-company, A.O. cannot treat the same as non-genuine due to extraneous considerations or irrelevant reasons in the assessment order

Rakesh Kumar vs. CIT (ITAT Delhi)

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DATE: August 13, 2018 (Date of pronouncement)
DATE: September 15, 2018 (Date of publication)
AY: 2009-10
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S. 194-H TDS: The law in Idea Cellular 325 ITR 148 (Del) that there is a principal-agent relationship between the telecom company and the dealers does not mean that a similar relationship can be inferred between the dealers and the sub-dealers. The incentive paid by the dealers to sub-dealers cannot be equated with commission as stipulated u/s194H and so there is no requirement for deducting TDS

There is no agency agreement between the assessee and his dealers/sub-dealers. The agency relationship between the assessee and the cellular operators cannot be inferred or presumed in the transaction between the assessee and his sub-dealers. The reason being the SIM cards, vouchers belonged to the cellular operators/cellular entities and these cellular operators/telecom entities ensure that payment is received in respect of those prepaid vouchers and SIM cards which are sold to the subscribers and unsold SIM cards are returned back to them and even if such SIM cards are returned, then these cellular/telecom entities are required to be made payment against them and the SIM card stocked with the distributors are the property of service provider, i.e., the telecom/cellular entities

Young Indian vs. ADIT (ITAT Delhi)

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DATE: August 30, 2018 (Date of pronouncement)
DATE: September 7, 2018 (Date of publication)
AY: 2011-12
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S. 272A(1)(c) Penalty: The argument that penalty u/s 272A(1)(c) can be levied only for non-compliance of s. 131(1) and not s. 131(IA) is not correct because s. 131(1A) has to be read with s. 131(1). On facts, the penalty is justified because the conduct of the assessee is not bona fide. There is deliberate and complete defiance to the summons issued u/s 131(1A)

So far as the arguments of the ld. counsel for the assessee that there was a reasonable cause on the part of the assessee in not submitting the details as called for by the ADIT (Investigation) is concerned, we find from the record that there was a deliberate defiance on the part of the assessee for non- submission of the same under the pretext that some of the details are available in the records of the Income Tax Department or some of the details are available in the Website of the Ministry of Corporate Affairs

Pee Aar Securities Ltd vs. DCIT (ITAT Delhi)

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DATE: August 23, 2018 (Date of pronouncement)
DATE: August 30, 2018 (Date of publication)
AY: 2005-06
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S. 68 Bogus share capital: A private limited co cannot say that it has no clue about the subscribers to its share capital. The genuineness of the transaction has to be determined by ground realities and not by documents like PAN cards, board resolutions, share certificates etc. Even shell cos have these documents. If the assessee is not able to produce the brains behind these companies and the documents with respect to their financials, the transaction cannot be regarded as genuine

As the things stand now, genuineness of transactions is to be examined in the light of the prevailing ground realities, and that is precisely what we have done. We are of the considered view that there is nothing to establish genuineness of the share subscription transactions on the facts of this case. The assessee does not know anything about these companies or these persons. The assessee has no documents about their financial activities or their balance sheets. The assessee is a private limited company and these entities could not have therefore been rank outsiders like walk in investors and yet the assessee does not throw enough light on these entities. A lot of emphasis is placed on bank transactions, on PAN cards and on board resolutions but all these factors have to be present in the cases of shell companies involved in money laundering as well. Nothing, therefore, turned on these documents so far as genuineness aspect is concerned. It is also a settled legal position that the onus of the assessee, of explaining nature and source of credit, does not get discharged merely by filing confirmatory letters, or demonstrating that the transactions are done through the banking channels or even by filing the income tax assessment particulars

Moet Hennessy India Pvt Ltd vs. ACIT (ITAT Delhi)

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DATE: August 23, 2018 (Date of pronouncement)
DATE: August 30, 2018 (Date of publication)
AY: 2009-10
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CITATION:
S. 92B Transfer Pricing of AMP Expenditure: In the absence of material to suggest that there was an "arrangement, understanding or action in concert" with respect of the AMP expenditure incurred by the assessee, the TPO is not justified in coming to the conclusion that there was an international transaction u/s 92B and that the assessee should have recovered an amount from its AE. The request of the Dept for a remand to the TPO is not acceptable. A remand to the assessment stage cannot be a matter of routine; it has to be so done only when there is anything in the facts and circumstances to so warrant or justify

On a careful consideration of all these factors, including the inconsistency in the approach of the AO/TPO with respect to the AMP expenditure being in the nature of an international transaction as expenditure incurred on behalf of the assessee, including the quantum and nature of expenditure and including lack of any material to suggest that there was “an arrangement, understanding or action in concert” with respect of the expenditure incurred by the assessee and including the fact that, in our considered view, the expenditure incurred by the assessee was in nature of bonafide business expenditure in furtherance of its legitimate business interests, we are of the considered view that there is no legally sustainable basis for the TPO coming to the conclusion that there was an international transaction, under section 92B, on the facts of this case

Priyatam Plaschem Pvt. Ltd vs. ITO (ITAT Delhi)

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DATE: August 10, 2018 (Date of pronouncement)
DATE: August 15, 2018 (Date of publication)
AY: 2014-15
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CITATION:
S. 68/ 56(2)(viib)/ Rule 11 UA(2)(a): Law on whether share capital/ share premium received by a Company from investors can be assessed as 'unexplained cash credit' explained in the light of judgements of the Courts and Tribunal (All imp judgements referred)

The A.O. failed to conduct scrutiny of the documents at assessment stage and merely suspected the transactions in question on the irrelevant reasons. The A.O. did not make any enquiry from the Banker of the Investor and Income Tax record of the Investor Company. The valuation report filed by the assessee support explanation of assessee that shares were issued at premium which were below the fair market value per share of Rs.1221. The assessee, thus, proved the identity of the Investor, its creditworthiness and genuineness of the transaction in the matter. No material has been produced before us to rebut the explanation of assessee. We, therefore, did not find any justification to sustain the addition

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