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DATE: March 16, 2016 (Date of pronouncement)
DATE: April 15, 2016 (Date of publication)
AY: 2007-08 to 2012-13
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CITATION:
S. 220(6): An order disposing off a stay application has to objectively consider the prima facie case on merits, financial hardship and balance of convenience and give reasons for the rejection

We find that neither the Assessing Officer in the impugned orders dated 13th October, 2015 nor the Commissioner of Income Tax (Exemptions) in the order dated 25.2.2016 has dealt with the Petitioner’s primary contentions that the amounts received as lease premium and shown as deposits, cannot be taxed as income. This Court has time again set out parameters to be kept in mind while considering the stay application under Section 220(6) of the Act. the Commissioner of Income Tax (Exemptions) has completely misunderstood the scope of her powers and issues to be considered while disposing of the stay applications. In the above view, we set aside the orders dated 13th October, 2015 of the Assessing Officer and order dated 25th February, 2016… However, the Petitioner’s stay application is restored to the file of the Commissioner of Income Tax (Exemptions) for fresh disposal in accordance with law and after considering, prima facie, merits of the Petitioner’s case and in accordance with law

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DATE: April 5, 2016 (Date of pronouncement)
DATE: April 15, 2016 (Date of publication)
AY: 2006-07
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CITATION:
S. 147: Though assessee claims that she is a non-resident & that onus is on the revenue to show that the money in the HSBC Geneva account is taxable in India, the non-cooperation with the Revenue by signing the consent waiver form shows that she has something to hide and makes it an unfit case for exercise of writ jurisdiction

In the normal course of human conduct if a person has nothing to hide and serious allegations /questions are being raised about the funds a person would make available the documents which would put to rest all questions which seem to arise in the mind of the Authorities. The conduct on the part of the Petitioner and her uncle, in not being forthcoming, to our mind leads us to the conclusion that this is not a fit case where we should exercise our extra ordinary writ jurisdiction and/or interfere with the orders passed by the authorities under the Act. If a person has nothing to hide, we believe the person would have cooperated in obtaining the Bank Statements

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DATE: March 29, 2016 (Date of pronouncement)
DATE: April 13, 2016 (Date of publication)
AY: 2007-08
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CITATION:
S. 45/ 48: Deferred consideration dependent on a contingency does not accrue unless the contingency has occurred and is not liable to capital gains tax in year of transfer

The contention of the Revenue that the impugned order is seeking to tax the amount on receipt basis by not having brought it to tax in the subject assessment year, is not correct. This for the reason, that the amounts to be received as deferred consideration under the agreement could not be subjected to tax in the assessment year 2006-07 as the same has not accrued during the year. As pointed out above, accrual would be a right to receive the amount and the assessee alongwith its co-owners have not under the agreement dated 25th January, 2006 obtained a right to receive Rs.20 crores or any specified part thereof in the subject assessment year. In the above view there could be no occasion to bring the maximum amount of Rs. 20 crores, which could be received as deferred consideration to tax in the subject assessment year as it had not accrued to the assessee.

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DATE: March 17, 2016 (Date of pronouncement)
DATE: March 28, 2016 (Date of publication)
AY: 2012-13
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CITATION:
Strictures passed against high-handed and unfair approach of AO (IRS Officer) in refusing to give an acknowledgement of stay application. Chief CIT directed to ensure such behaviour is not repeated. Dept directed to nominate another AO to hear stay application

We find this conduct on the part of the Assessing Officer to accept a stay application and not immediately give acknowledgement of its receipt is unacceptable. The least that is expected of a civil servant is to be fair and civil. In the absence of the above, his conduct is not one becoming of an Officer belonging to the prestigious Indian Revenue Service. The least that is expected of an Officer is that when a person files an application / letter, which is accepted by him, an acknowledgement should be forthwith given to the party filing the application or letter. In case he refuses to accept the letter he should endorse on the letter / application the reason why it is not being accepted with a line or two for the refusal to accept. In case he does accept it and give an acknowledgment he can deal with the applications/ letters as is appropriate in accordance with law. We believe that what has happened in this case is an aberration. However, the Chief Commissioner of Income Tax would ensure that his Officers do not behave in such an high handed and unfair manner, not expected of civil servants

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DATE: March 17, 2016 (Date of pronouncement)
DATE: March 28, 2016 (Date of publication)
AY: -
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CITATION:
S. 220(6): Dept directed to redeposit moneys collected illegally by attachment of assessee’s bank account during pendency of stay application. A order passed on a stay application must give reasons for the refusal to stay the demand

Thus, any action to recover taxes adopting coercive means is not permissible till the petitioner’s application for stay under Section 220(6) of the Act is disposed of. Therefore, the action of the Assessing Officer in attaching the petitioners’ bank accounts under Section 226(3) of the Act as well as subsequent withdrawal of the attached amounts from the bank accounts is without jurisdiction and bad in law. The petitioners have a statutory right to its stay application being heard and disposed of before the Revenue can adopt any coercive proceedings on the basis of the Notice of demand under Section 156 of the Act issued to the assessee. This action on the part of the Assessing Officer, if permitted, would lead Section 220(6) of the Act becoming redundant. In the above view, the Notice under Section 226(3) of the Act issued by the Assessing Officer to the petitioners’ bankers are quashed and set aside. Further, the Assessing Officer is directed to deposit the amount of Rs.7,59,185 in HDFC Bank, Fort, Mumbai and Rs.34,265/in State Bank of India, Byculla, Mumbai within a period of one week from today

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DATE: April 17, 2015 (Date of pronouncement)
DATE: August 10, 2015 (Date of publication)
AY: 2007-08
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CITATION:
S. 43B: Service-tax billed to customer but not collected from him cannot be disallowed u/s 43B on ground of non-payment to treasury

Section 43B does not contemplate liability to pay the service tax before actual receipt of the funds in the account of the assesee. Liability to pay service tax into the treasury will arise only upon the assessee receiving the funds and not otherwise

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DATE: May 8, 2015 (Date of pronouncement)
DATE: May 9, 2015 (Date of publication)
AY: -
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CITATION:
S. 194-I/ 194-J: Meaning of expression "rent" and "fees for technical services" explained in the context of transmission & wheeling charges paid by electricity company

The expression rent would also entail an element of possession. In each of the instances contemplated by the explanation to Section 194-I, we see in them an element of possession, be it land, building (including factory building), land appertaining to a building, plant, equipment, furniture or fittings. The person using it has some degree of possessory control, at least momentarily, although it cannot entrust the user title to the subject matter of the charge. Even the mere right to “use” is vested with an element of possessory control over the subject matter

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DATE: April 29, 2015 (Date of pronouncement)
DATE: May 9, 2015 (Date of publication)
AY: 2001-02, 2004-05, 2005-06
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CITATION:
Indian agent of foreign company cannot be regarded as "Dependent Agent Permanent Establishment" if agent has no power to conclude contracts. If the agent is remunerated at arms' length basis, no further profit can be attributed to the foreign company. It is doubtful whether retrospective amendment to s. 9(i)(vi) can apply the DTAA. However, question is left open

The Indo-Mauritius DTAA requires that the first enterprise in the first mentioned State has and habitually exercised in that State an authority to conclude contracts in the name of the enterprise unless his activities are limited to the purchase of goods or merchandise for the enterprise is a condition which is not satisfied. Therefore, this is not a case of B4U India being an agent with an independent status. The findings of the Supreme Court judgment in Morgan Stanley & Co. that there is no need for attribution of further profits to the permanent establishment of the foreign company where the transaction between the two is at arm’s length but this was only provided that the associate enterprise was remunerated at arm’s length basis taking into account all the risk taking functions of the multinational enterprise. Thus, assuming B4U India is a dependent agent of the assessee in India it has been remunerated at arm’s length price and, therefore, no profits can be attributed to the assessee

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DATE: April 29, 2015 (Date of pronouncement)
DATE: May 9, 2015 (Date of publication)
AY: 2001-02
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CITATION:
S. 9(1)(vii)/ Article 13(4): Amount paid by Indian entities as “share of cost” of utilizing automated telecommunications system is not assessable as “fees for technical services” if there is not profit element in it

utilization of the Maersk Net Communication system was an automated software based communication system which did not require the assessee to render any technical services. It was merely a cost sharing arrangement between the assessee and its agents to efficiently conduct its shipping business. The Maersk Net used by the agents of the assessee entailed certain costs reimbursement to the assessee. It was part of the shipping business and could not be captured under any other provisions of the Income Tax Act except under DTAA

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DATE: April 21, 2015 (Date of pronouncement)
DATE: May 7, 2015 (Date of publication)
AY: 2008-09
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CITATION:
S. 153A: No addition can be made in respect of an unabated assessment which has become final if no incriminating material is found during the search. An ICD is an "infrastructural facility" for s. 80-IA(4)

Once it is held that the assessment has attained finality, then the AO while passing the independent assessment order under Section 153A read with Section 143 (3) of the I.T. Act could not have disturbed the assessment / reassessment order which has attained finality, unless the materials gathered in the course of the proceedings under Section 153A of the Income-tax Act establish that the reliefs granted under the finalised assessment/ reassessment were contrary to the facts unearthed during the course of 153A proceedings

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