Search Results For: ITAT Mumbai


DDIT vs. Reliance Communication Ltd (ITAT Mumbai)

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DATE: January 3, 2018 (Date of pronouncement)
DATE: January 4, 2018 (Date of publication)
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CITATION:
Taxability of software payments as royalty: The fact that there is a conflict of judicial opinion on whether payments for software are assessable as royalty or not does not entitle the Dept to seek a reference to the Special Bench. The Tribunal has to follow judicial discipline. Also, if a reference is made to the Special Bench it will violate the principle in Vegetable Products 188 ITR 192 (SC) that if there are two possible views, the view favourable to the assessee must be adopted

So far as Constitution of special Bench is concerned, a reference to constitute a Special Bench flows from the members and not from the parties to the case. Furthermore, such a reference can be made by the members when they do not agree with the view taken by the earlier order of the Tribunal. However, in the instant cases before us, it is not a situation, only after hearing, the matter afresh by the division bench in terms of direction of Hon’ble High Court dated 08.08.2017, the bench may decide the issue to agree or disagree with the view already taken by the earlier bench. Furthermore merely on the conflict view .of the decision of the High Court, a reference cannot be made to constitute Special Bench. If the present application of the Revenue is accepted, the process of reference to a Special Bench / larger Bench would never reach an end. Reference to Special Bench would continue to be moved by the parties upon every subsequent non-jurisdictional High Court decision, thus, leading to a number of cases being referred to constitute Special Bench. However, correct decision is to follow the judicial hierarchy and maintain judicial discipline. Furthermore, if the applications of the Revenue were to be allowed, it would lead to the violation of the principle laid down by the Hon’ble Supreme Court in the case of CIT Vs. Vegetable Products (1973) (188 ITR 192) (SC)

Pest Control India Pvt Ltd vs. DCIT (ITAT Mumbai)

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DATE: October 31, 2017 (Date of pronouncement)
DATE: December 30, 2017 (Date of publication)
AY: 2012-13
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CITATION:
S. 14A/ Rule 8D: By no stretch of imagination can s. 14A or Rule 8D be interpreted so as to mean that entire tax exempt income is to be disallowed. Also, the disallowance cannot exceed the exempt income

The Hon’ble Delhi High Court in the case of Joint Investment Private Limited in ITA.No. 117/15 dated 25.02.2015 held that by no stretch of imagination can section 14A or Rule 8D be interpreted so as to mean that entire tax exempt income is to be disallowed. Similarly, Punjab and Haryana High court in the case of PCIT v. Empire Package Private Limited in ITA.No. 415/2015 held that disallowance should not exceed exempt income

DCIT vs. Yogen D. Sanghvi (ITAT Mumbai)

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DATE: November 1, 2017 (Date of pronouncement)
DATE: December 29, 2017 (Date of publication)
AY: 2010-11
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CITATION:
S. 23 House Property Income: Common Area Maintenance Charges and non-occupancy charges paid by the assessee to the Society are deductible from the rent while computing the 'Annual Letting Value' u/s 22

What s. 22 attempts to assess is the annual value of the property consisting of any building or land appurtenant thereto, of which the appellant is the owner,, and which has not been put to use for the purposes of its business or profession by it. The rent being charged by the appellant, if so, is only a surrogate measure of the said annual value. The expenditure on the aforesaid items, i.e., the salary (including bonus) to the maintenance staff of the facilities as electric motors, lift, caning, etc., as well as that on the electricity consumed in respect of any common area and the electric motors, is not attributable directly to the house property as such, but to its enjoyment by the tenants/users thereof

Mustansir I Tehsildar vs. ITO (ITAT Mumbai)

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DATE: December 18, 2017 (Date of pronouncement)
DATE: December 22, 2017 (Date of publication)
AY: 2013-14
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CITATION:
S. 54: Acquisition of new flat in an apartment under construction should be considered as a case of “Construction” and not “Purchase”. The date of commencement of construction is not relevant for purpose of s. 54. The fact that the construction may have commenced prior to the date of transfer of the old asset is irrelevant. If the construction is completed within 3 years from the date of transfer, the exemption is available

For the purpose of sec. 54 of the Act, we have to see whether the assessee has completed the construction within three years from the date of transfer of old asset. In the instant case, there is no dispute that the assessee took possession of the new flat within three years from the date of sale of old residential flat. Accordingly, we are of the view that the assessee has complied with the time limit prescribed u/s 54 of the Act. Since the amount invested in the new flat prior to the due date for furnishing return of income was more than the amount of capital gain, the requirements of depositing any money under capital gains account scheme does not arise in the instant case. Further, the Hon’ble High Court has held in the case of ITO Vs. K.C.Gopalan (2000)(162 CTR 0566) that there is no requirement that the sale proceeds realised on sale of old residential house alone should be utilised

Nilesh Janardan Thakur vs. ITO (ITAT Mumbai)

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DATE: November 17, 2017 (Date of pronouncement)
DATE: December 2, 2017 (Date of publication)
AY: 2008-09
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CITATION:
Taxability of Gifts u/s 56(2)(vi): A receipt cannot be taxed u/s 56(2)(vi) merely on conjecture or surmises. The AO has to prove beyond doubt that a particular receipt is taxable as income. Merely because the person who paid the amount does not initiate any action for recovery of money is not sufficient for making addition

The AO has observed in his assessment order that SPCL has not taken any action for recovery of the amount, even after lapse of three years from the date of payment. The AO further observed that though the assessee has procured various immovable properties in his personal name, the company has failed to initiate necessary proceedings to get the land procured in their name or return the money given to the assessee. No interest has been charged on money paid to the assessee. All these facts goes to prove undisputed fact that the transactions are not genuine, therefore, the AO opined that impugned amount is taxable under the provisions of section 56(2)(vi) of the Act. We do not find any merit in the findings of the A.O. for the reason that merely because the person, who paid the amount does not initiate any action for recovery of money should not be not a reason for making addition towards amount received as assessee’s income. The AO has to prove beyond doubt a particular receipt is taxable in the given circumstances within the meaning of the said provision

DCIT vs. Studio Aethletic Health & Hospitality Pvt. Ltd (ITAT Mumbai)

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DATE: November 15, 2017 (Date of pronouncement)
DATE: December 2, 2017 (Date of publication)
AY: 2010-11
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CITATION:
Undisclosed income found in search: Law on whether statement obtained u/s 132(4) admitting earning of undisclosed income, which is allegedly retracted, can be used for making assessment explained in the light of P.V. Kalyanasundaram 294 ITR 49 (SC), S. Kadar Khan 352 ITR 480 (SC) and CBDT’s Circular

From the above, it is apparent that the ld. Commissioner of Income Tax (Appeals)’s reliance upon the so called retraction of the admission during search is not cogent. Similarly, the ld. Commissioner of Income Tax (Appeals) reliance upon the CBDT Circular of not obtaining confession is also out of place. It is clear that the registers were found which clearly detailed about undocumented surgeries performed by Dr. Ashok Chopra and unaccounted cash receipts. Based upon this Dr. Ashok Chopra has admitted offer of Rs.1.74 crores. Dr. Ashok Chopra had also accepted the working of this figure. As already noted there was never any retraction whatsoever by Dr. Ashok Chopra. The said admission of Dr. Ashok Chopra was also duly accepted and corroborated by Smt. Madhu Chopra, the director of the company. Under these circumstances, the ld. Commissioner of Income Tax (Appeals)’s contradictory acceptance that no incriminating documents were found, is not at all acceptable

ACIT vs. Af-taab Investment Company Limited (ITAT Mumbai)

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DATE: November 16, 2017 (Date of pronouncement)
DATE: November 30, 2017 (Date of publication)
AY: 2010-11
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CITATION:
S. 14A/ Rule 8D: Imp principles law down reg (i) disallowance for single segment companies being investors and dealers in shares and having to incur all business expenses under normal circumstances, (ii) strategic investments, (iii) securities held as stock-in-trade, (iv) inclusion of securities which have not yielded any exempt income and (v) whether diminution in value of securities constitutes "expenditure" for disallowance

Strategic investments/stock in trade have to be excluded for computing disallowance under 14A. The AO should keep in mind that the assessee is a single segment company being an investor and dealer in shares & securities and consequently all the business expenses ought to have been incurred towards this segment under normal circumstances unless otherwise shown

ITO vs. Shreedham Construction Pvt Ltd (ITAT Mumbai)

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DATE: November 14, 2017 (Date of pronouncement)
DATE: November 30, 2017 (Date of publication)
AY: 2008-09
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CITATION:
S. 68 Bogus share capital: In the case of credit as share capital by corporate entity, whose existence is shown by its registration with Registrar of companies and its filing of tax returns, adverse conclusion is not justified merely because its directors are not produced personally before the AO by the assessee. The AO has to demonstrate with specific evidence that the assessee has in reality obtained accommodation entries by showing cash deposits linked to the investors

Section 68 casts the initial burden of proof on the assesse to show prima facie and to explain the nature and source of credit found in its books. When the statute places the burden of proof in income tax cases on the tax payer, it is understood to be only the initial burden. When the tax payer explains the credit by providing evidence of identity, confirmation and credit worthiness, the burden shifts on the revenue to show that the explanation is not satisfactory or incorrect. In the case of credit as share capital by corporate entity, whose existence is shown by its registration with Registrar of companies and its filing of tax returns, adverse conclusion is not justified merely because its directors are not produced personally before the assessing officer by the tax payer

Late Shri Gordhandas S. Garodia vs. DCIT (ITAT Mumbai)

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DATE: November 1, 2017 (Date of pronouncement)
DATE: November 28, 2017 (Date of publication)
AY: 2010-11
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CITATION:
S. 45/ 48: The scheme of the Act is to assess real income and not hypothetical income. The word "accrue" in "full value of consideration received or accruing" in s. 45 means that the assessee has a legally enforceable right to receive the sum. An amount which is payable only on fulfillment of conditions does not create an enforceable right and has to be excluded while computing capital gains

The expression “full value of consideration received or accruing” would mean the amount actually received by the assessee or consideration which has accrued to the assessee. The expression “accrue” means a right acquired by the assessee to receive income. Unless, a debt due by somebody has been created in favour of assessee, it cannot be said that he has acquired a right to receive the income or that income has accrued to him. An amount can accrue to assessee if he acquires a legally enforceable right to receive it from the debtor. The entire purpose of the Income Tax Act, 1961 is to assess the real income of the assessee. Therefore, the Departmental Authorities cannot assess any hypothetical or notional income to tax

M/s Sainath Enterprises vs. ACIT (ITAT Mumbai) (Third Member)

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DATE: November 18, 2016 (Date of pronouncement)
DATE: November 25, 2017 (Date of publication)
AY: 2007-08
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CITATION:
Withdrawal of appeal: The Petitioner/ Plaintiff is the ‘dominus litis’ and it is open to him to pursue or abandon his case. Withdrawal cannot be denied except when the person making the prayer has obtained some advantage/ benefit which he seeks to retain

Withdrawal of appeal: The Petitioner/ Plaintiff is the ‘dominus litis’ and it is open to him to pursue or abandon his case. Withdrawal cannot be denied except when the person making the prayer has obtained some advantage/ benefit which he seeks to retain

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