Search Results For: A. D. Jain (JM)


Usha Agarwal vs. ITO (ITAT Agra)

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DATE: June 19, 2018 (Date of pronouncement)
DATE: July 10, 2018 (Date of publication)
AY: 2007-08
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CITATION:
S. 147/148: If there is nothing in the recorded reasons to suggest that the income chargeable to tax which has escaped assessment is Rs. one lakh or more, the notice issued u/s 148 of the Act beyond four years of the end of the relevant assessment year is invalid

The second point which is very important is that in regard to the cases falling under section 34(1A), action can be taken only where the income which has escaped assessment is likely to amount to Rs.1 lakh or more. In other words, it is only in regard to cases where the escaped income is of a high magnitude that the restriction of the period of limitation has been removed. Since no reasons were recorded that the escaped income is likely to be Rs.1 lac or more so that the Chief Commissioner or Commissioner may record his satisfaction under section 151, the initiation of reassessment proceedings after more than four years was clearly barred by time

Ghanshyam vs. ITO (ITAT Agra)

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DATE: June 19, 2018 (Date of pronouncement)
DATE: July 7, 2018 (Date of publication)
AY: 2008-09
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CITATION:
S. 147/ 151: If the CIT merely states "Yes, I am satisfied" while granting sanction to the reopening, it means that the sanction is merely mechanical and he has not applied independent mind. There is not an iota of material on record as to what documents he had perused and what were the reasons for his being satisfied to accord the sanction to initiate the reopening of assessment (All judgements referred)

Apparently, from the approval recorded and words used that “Yes. I am satisfied.”, it has proved on record that the sanction is merely mechanical and Addl. CIT has not applied independent mind while according sanction as there is not an iota of material on record as to what documents he had perused and what were the reasons for his being satisfied to accord the sanction to initiate the reopening of assessment u/s 148 of the Act

Deepraj Hospital (P) Ltd vs. ITO (ITAT Agra)

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DATE: June 1, 2018 (Date of pronouncement)
DATE: June 2, 2018 (Date of publication)
AY: 2010-11
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CITATION:
S. 147/148: If the reopening is based on information received from the investigation dept, the reasons must show that the AO independently applied his mind to the information and formed his own opinion. If the reopening is done mechanically, it is void. Also, if the reasons refer to any document, a copy should be provided to the assessee. Failure to do so results in breach of natural justice and renders the reopening void

No independent application of mind by the AO to the material forming the basis of the reasons recorded is evincible from the reasons. The AO, in the reasons, has just stated the information received and his conclusion about the alleged escapement of income. As to what the AO did with the information made available to him, is not discernible from the reasons. The reasons must also paraphrase any investigation report, which may form the basis of the reasons and any enquiry conducted by the AO thereon, as also the conclusions thereof. Further where the reasons make a reference to any document, such document and / or relevant portion thereof must be enclosed along with the reasons

ACIT vs. Manufax (India) S.B. (ITAT Agra)

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DATE: April 11, 2018 (Date of pronouncement)
DATE: April 19, 2018 (Date of publication)
AY: 2010-11, 2011-12
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CITATION:
S. 9(1)(i)/ 40(a)(i): Entire law on whether commission paid by an Indian entity to foreign agents can be said to accrue in India and whether the assessee is obliged to deduct TDS thereon u/s 195 explained. All relevant judgements and CBDT Circulars Nos.7 dated 22.10.2009, 23 dated 23 July 1969, 163 dated 29th May 1975 and 786 dated 7th February 2000 considered

It is not disputed that that the withdrawal of the circulars No. 23 and 786 has been made on 22.10.2009 vide CBDT Circular No. 7 of 2009 and mere withdrawal of the circular does not negate the principles of income deemed to accrue or arise in India or outside India. The CBDT has not stated that any part of the circulars is contrary to law or that the circulars were wrongly issued or that the law has undergone changes holding their withdrawal. Thus, in respect of cases, which directly follow with the situations covered by the circulars, the liability to tax should continue to be in accordance with section 9 of the Act and its intent. The relevant sections, namely section 5(2) and section 9 of the Income-tax Act, 1961 not having undergone any change in this regard, the clarification in Circular No. 23 still prevails even after the withdrawal. No tax is therefore deductible under section 195 and consequently, the expenditure on export commission payable to a non-resident for services rendered outside India is not liable for withholding tax

Sachin Arora vs. ITO (ITAT Agra)

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DATE: September 7, 2017 (Date of pronouncement)
DATE: January 5, 2018 (Date of publication)
AY: 2008-09
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CITATION:
S. 271(1)(c): Concealment of income and furnishing of inaccurate particulars are distinct and separate charges. A nebulous notice which contains both charges is null and void ab initio (All judgements on the topic relied upon by the assessee and the department have been referred to and discussed)

It is quite clear, that `suppressio vari’, or ‘suppression of truth’, which has, in section 271(1)(c) of the IT Act, as its equivalent, `concealment of income’, and `suggestio falsi’, literally, ‘suggesting or stating a falsehood’, which manifests itself as ‘furnishing of inaccurate particulars thereof, are two distinctly separate charges; that leveling of either of these charges has to be explicitly brought to the notice/knowledge of the assessee, sans which, the assessee, under a nebulous notice containing both these charges, is rendered incapable of defending the charge per se. This would be in utter violation of the principles of natural justice, such notice being null and void ab initio. It is also pertinent to note at this juncture that the notice u/s 274 is a mandatory statutory notice without which, the initiation of penalty proceedings would be nugatory, nay, non est in the eye of the law

DCIT vs. Alstom Projects Ltd (ITAT Mumbai)

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DATE: October 28, 2015 (Date of pronouncement)
DATE: May 26, 2016 (Date of publication)
AY: 2007-08 & 2008-09
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CITATION:
(i) Important law laid down on applicability of transfer pricing provisions to non-AEs, Law on (ii) deductibility of unpaid service-tax u/s 43B and (iii) carry forward of losses of amalgamating company u/s 72A and Rule 9C explained

Disallowance of unpaid service tax could not be made under section 43B where the assessee did not claim the same in its Profit and Loss account. Where the assessee fulfilled all the conditions prescribed under Section 72A read with Rule 9C, the AO could not deny the claim of carry forward of losses pertaining to the amalgamating company

Gurpreet Kaur vs. ITO (ITAT Amritsar)

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DATE: March 24, 2016 (Date of pronouncement)
DATE: April 15, 2016 (Date of publication)
AY: 2011-12
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S. 143(3): In an AIR scrutiny assessment, the AO is not entitled to widen the scope of scrutiny without approval of the CIT as per CBDT's Instruction. Such an assessment order is not sustainable

In fact, what the AO did was to widen the scrutiny. Now, para 2 of CBDT Instruction is specific when it states that where it is felt that apart from the AIR information, there is potential escapement of income more than Rs. 10 lakhs, the case may be taken up for wider scrutiny with the approval of the administrative Commissioner. So, the proper course for the AO before making these additional enquiries would have been to take approval from the administrative Commissioner to widen the scrutiny. This, however, was not done and therefore, the action of the AO is violative of the CBDT Instruction

DCIT vs. Tata Consultancy Services Ltd (ITAT Mumbai)

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DATE: November 4, 2015 (Date of pronouncement)
DATE: November 17, 2015 (Date of publication)
AY: 2005-06
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CITATION:
Transfer Pricing: (i) If the AO & CIT make a mechanical reference to the TPO without applying mind to the TP report & other data filed by the assessee, the reference is invalid, (ii) A transfer pricing adjustment cannot be made if the assessee's income is exempt u/s 10A or 80HHE or (iii) if the AE is assessed at a rate of tax higher that tax rate in India

(c) The AO erred in not himself examining the issue of Transfer Pricing and with the approval of the CIT, made a reference to the TPO u/s 92CA(1) of the Act; that the AO as well as the CIT failed to apply their mind to the TP Report filed by the assessee, or to any other material or information or document furnished. The TPO made an adjustment which was incorporated by the AO in the assessment order. Thereby, the AO as well as the CIT did not discharge necessary respective judicial functions conferred on them under sections 92C and 92CA of the Act;

(d) Further, the assessee is also correct in contending that no TP adjustment can be made in a case like the present one, where the assessee enjoys u/s 10A or 80HHE of the Act, or where the tax rate in the country of the Associated Enterprises is higher than the rate of tax in India and where the establishment of tax avoidance or manipulation of prices or establishment of shifting of profits is not possible.

Hoshiarpur Improvement Trust vs. ITO (ITAT Amritsar)

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DATE: September 10, 2015 (Date of pronouncement)
DATE: September 12, 2015 (Date of publication)
AY: 2009-10, 2011-12
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CITATION:
Even post insertion of proviso to s. 2 (15) but before 01.04.2016, s. 11 benefit cannot be denied to business activities carried by the trust in the course of actual carrying out of such advancement of any other object of general public utility. Trusts are entitled to carry out activities in the nature of trade, commerce or business etc as long as these activities are carried out in the course of actual carrying out of advancement of any other object of general public utility. On facts, activity of auctioning commercial plots for maximum revenue cannot be regarded as a profit-making exercise

This substitution of proviso to Section 2(15) may be viewed as representing a paradigm shift in the scope of the exclusion clause. The paradigm shift is this. So far as the scope of earlier provisos is concerned, the CBDT itself has, dealing with an assessee pursing “the advancement of any object of general pubic utility”, observed that “If such assessee is engaged in any activity in the nature of trade, commerce or business or renders any service in connection to trade, commerce or business, it would not be entitled to claim that its object is for charitable purposes” because “In such a case, the object of ‘general public utility’ will only be a mask or a device to hide the true purpose which is trade, commerce, or business or rendering of any service in relation to trade, commerce or business.” The advancement of any objects of general public utility and engagement in trade, commerce and business etc. were thus seen as mutually exclusive in the sense that either the assessee was pursuing the objects of general public utility or pursuing trade, commerce or business etc. in the garb of pursing the objects of general public utility

Suri Sons vs. ACIT (ITAT Amritsar)

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DATE: August 31, 2015 (Date of pronouncement)
DATE: September 11, 2015 (Date of publication)
AY: 2006-07
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CITATION:
S. 10(10D): Keyman Insurance: Even a "United Linked Endowment Assurance Plan" with the main object of guaranteed returns rather than life insurance is a "keyman insurance" as defined in s. 10(10D). The fact that policy was not termed as a "keyman insurance" and the fact that the IRDA Guidelines disapproved the issue of such policies is irrelevant

All that is required for an insurance policy to meet the requirements of Section 10(10D), therefore, has to be – (a) it should be a life insurance policy; (b) it should be taken by the assesse on the life of another person who is, or was, an employee of the assesse or is related to the business of the assesse is any manner. As long as a policy is an insurance policy, whether it involves a capital appreciation or is under any other investment scheme, it meets the tests laid down under section 10(10D). Even if such an inference is desirable, as long as it does not emerge from the plain words of the statute, it cannot be open to supply the same. The concepts of term policy, pure life policy and the IRDA guidelines find no mention in the statutory provisions. But even if these concepts ought to be incorporated in this statutory provision of the Income Tax Act to make it more meaningful and workable, it cannot be open to any judicial forum to supply these omissions. The IRDA guidelines, no matter how relevant as these guidelines may be, have no role to play in the interpretation of the statutory provisions. The fact that the insurance policies in question were not termed as keyman insurance policies is irrelevant. The keyman insurance policy is a defined concept and as long as it meets the requirements of this definition, the terminology given by the insurers have no relevance for the purposes of the Income Tax Act.

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