Search Results For: B. R. Baskaran (AM)


Kamla Devi S. Doshi vs. ITO (ITAT Mumbai)

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DATE: May 22, 2017 (Date of pronouncement)
DATE: June 2, 2017 (Date of publication)
AY: 2006-07
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CITATION:
Bogus penny stocks capital gain: The s. 131 statement implicating the assessee is not sufficient to draw an adverse inference against the assessee when the documentary evidence in the form of contract notes, bank statements, STT payments etc prove genuine purchase and sale of the penny stock. Failure to provide cross-examination is a fatal error

The A.O had chosen to merely rely on the stand alone statement of Sh. Mukesh Choksi (supra) and taking the same as gospel truth, had therein drawn adverse inferences in the hands of the assessee by merely referring to the said statement of Sh. Mukesh Choksi (supra). We though do not approve of the reliance placed by the A.O on the stand alone statement of Sh. Mukesh Choksi (supra) for drawing of adverse inferences in respect of the share transactions carried out by the assessee during the year under consideration, but rather find that even no cross examination of Sh. Mukesh Choksi (supra), whose statement was so heavily being relied upon by the A.O, was ever provided to the assessee. We find that the failure on the part of the A.O to provide cross examination of the person, relying on whose statement adverse inferences are drawn in the hands of the assessee goes to the very root of the validity of such adverse inferences drawn in the hands of the assessee, had been looked into by the Hon’ble High Court of Bombay in the case of CIT-13 Vs. M/s Ashish International (ITA No 4299 of 2009; dated. 22.02.2011), wherein the order of the Tribunal was affirmed by the Hon’ble High Court. We thus in the backdrop of our aforesaid observations, are neither able to persuade ourselves to subscribe to the adverse inferences drawn by the lower authorities in respect of the share transactions of the assessee by referring to the stand alone statement of Sh. Mukesh Choksi, as the same as observed by us hereinabove, suffer from serious infirmities, and as such cannot be summarily accepted, nor are able to dislodge the genuineness of the purchase and sale of shares of the aforesaid 10,200 shares of M/s Talent Infoways Ltd., which we find had been duly substantiated by the assessee on the basis of material made available on record, which we find had not been dislodged by the lower authorities

Dr. Sarita Milind Davare vs. ACIT (ITAT Mumbai)

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DATE: December 21, 2016 (Date of pronouncement)
DATE: December 30, 2016 (Date of publication)
AY: 2009-10
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CITATION:
S. 271(1)(c): The law in Dilip Shroff 291 ITR 519 (SC) & Kaushalya 216 ITR 660 (Bom) requires a show-cause notice u/s 274 to be issued after due application of mind. The non-specification in the notice as to whether penalty is proposed for concealment or for furnishing of inaccurate particulars reflects non-application of mind and renders it void. The fact that the assessee participated in the penalty proceedings does not save it u/s 292B/292BB

A combined reading of the decision rendered by Hon’ble Bombay High Court in the case of Smt. B Kaushalya and Others (216 ITR 660) and the decision rendered by Hon’ble Supreme Court in the case of Dilip N Shroff (supra) would make it clear that there should be application of mind on the part of the AO at the time of issuing notice. In the case of Lakhdir Lalji (supra), the AO issued notice u/s 274 for concealment of particulars of income but levied penalty for furnishing inaccurate particulars of income. The Hon’ble Gujarat High Court quashed the penalty since the basis for the penalty proceedings disappeared when it was held that there was no suppression of income. The Hon’ble Kerala High Court has struck down the penalty imposed in the case of N.N.Subramania Iyer Vs. Union of India (supra), when there is no indication in the notice for what contravention the petitioner was called upon to show cause why a penalty should not be imposed. In the instant case, the AO did not specify the charge for which penalty proceedings were initiated and further he has issued a notice meant for calling the assessee to furnish the return of income. Hence, in the instant case, the assessing officer did not specify the charge for which the penalty proceedings were initiated and also issued an incorrect notice. Both the acts of the AO, in our view, clearly show that the AO did not apply his mind when he issued notice to the assessee and he was not sure as to what purpose the notice was issued

Reliance Communications Ltd vs. DDIT (ITAT Mumbai)

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DATE: November 18, 2016 (Date of pronouncement)
DATE: November 26, 2016 (Date of publication)
AY: -
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CITATION:
Taxability of software license fees as royalty: Non-consideration of the verdict of the Tribunal in Solid Works Corporation (51 SOT 34) and misreading of the Delhi High Court's verdict in Ericsson AB constitutes a mistake apparent from the record u/s 254(2) and the orders have to be recalled

In the instant appeals, the Tribunal admittedly did not consider the decision rendered by co-ordinate bench in the case of Solid Works Corporation (supra), even though it was relied upon by the assessees herein. The assessees have contended that the non-consideration of the decision of co-ordinate bench, when it was specifically relied upon by the assessee would result in a mistake apparent from record and would warrant recall of the order. In support of this contention, the assessees have placed their reliance on the decision rendered by Hon’ble Supreme Court in the case of Honda Siel Power Products Ltd (supra), wherein the Hon’ble Apex Court has held that the Tribunal was justified in exercising its power u/s 254(2) when it was pointed out to the Tribunal that the judgement of co-ordinate bench was placed before the Tribunal when the original order came to be passed but it had committed a mistake in not considering the material which was already on record

H. K. Pujara Builders vs. ACIT (ITAT Mumbai)

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DATE: May 9, 2016 (Date of pronouncement)
DATE: June 2, 2016 (Date of publication)
AY: 2009-10
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CITATION:
S. 254(1): The Tribunal cannot consider new material or information which comes to the possession of the AO after passing the assessment order. The appellate procedure is designed to adjudicate matters that were originally framed in the assessment order and new material cannot be considered

Under the scheme of the Act, the order passed by the assessing officer is being contested by the assessee before Ld CIT(A) and thereafter, by both the parties before the Tribunal, if they feel aggrieved by the order passed by Ld CIT(A). After passing the assessment order, the assessing officer becomes functus officio and hence, if any material or information comes to the knowledge of the AO subsequently, then the assessing officer is required to follow the course of action provided under the Act and the Income tax Act does not provide for modification of the order that has already been passed. The appellate procedure has been designed to adjudicate the matters that were originally framed in the assessment order

Narayan Tatu Rane vs. ITO (ITAT Mumbai)

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DATE: May 6, 2016 (Date of pronouncement)
DATE: May 20, 2016 (Date of publication)
AY: 2007-08, 2008-09
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CITATION:
S. 263: There is doubt whether Explanation 2(a) to s. 263, inserted by FA 2015 w.e.f. 01.04.2015 has retrospective effect. The said Explanation does not override the law that the CIT cannot fault an assessment order without conducting his own inquiry or verification to establish that the assessment order is not sustainable in law

Even though there is a doubt as to whether the said explanation, which was inserted by Finance Act 2015 w.e.f. 1.4.2015, would be applicable to the year under consideration, yet we are of the view that the said Explanation cannot be said to have over ridden the law interpreted by Hon’ble Delhi High Court, referred above. If that be the case, then the CIT can find fault with each and every assessment order, without conducting any enquiry or verification in order to establish that the assessment order is not sustainable in law and order for revision. He can also force the AO to conduct the enquiries in the manner preferred by CIT, thus prejudicing the independent application of mind of the AO. Definitely, that could not be the intention of the legislature in inserting Explanation 2 to sec. 263 of the Act, since it would lead to unending litigations and there would not be any point of finality in the legal proceedings

Avan Gidwani vs. ACIT (ITAT Mumbai)

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DATE: April 6, 2016 (Date of pronouncement)
DATE: April 15, 2016 (Date of publication)
AY: 2007-08
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CITATION:
Rule 46A of the Income Tax Rules which regulates the admission of additional evidence by the CIT(A) cannot override the principles of natural justice

The principle “Audi alteram partem”, i.e. no man should be condemned unheard is the basic canon principles of natural justice and accordingly we find merit in the contentions of the assessee that Rule 46A of the Income Tax Rules cannot be over ride the principles of natural justice. Hence we are of the view that the learned CIT(A) was not justified in refusing to admit the various additional evidences furnished by the assessee

Rachana Finance & Investments Pvt Ltd vs. CIT (ITAT Mumbai)

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DATE: March 23, 2016 (Date of pronouncement)
DATE: April 1, 2016 (Date of publication)
AY: 2004-05
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CITATION:
S. 263 revision cannot be initiated to conduct roving inquiries whether share application money share premium constitute undisclosed income

The scope of interference u/s 263 is not to set aside merely unfavaourable orders and bring to tax some more money to the treasury nor is the section meant to get at sheer escapement of revenue which is taken care of by other provisions in the Act. Power under Section 263 cannot be exercised for starting fishing and roving enquiries. In the garb of exercising power
under Section 263, the Commissioner cannot initiate proceedings with a view to
starting fishing and roving enquires in matters or orders which are already concluded

M/s. Maruti Impex vs. JCIT (ITAT Mumbai)

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DATE: March 9, 2016 (Date of pronouncement)
DATE: March 30, 2016 (Date of publication)
AY: 2009-10
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CITATION:
Bogus Purchases: Theory that transaction "defies human probabilities" cannot be applied to purchases in isolation but has to be applied to the entire transaction in the light of documentary evidence produced by the assessee

The tax authorities have not accepted the claim of purchases of diamonds from TTPL on the reasoning that the said transaction defies the human probabilities. The tax authorities have, accordingly, rejected the various evidences furnished by the assessee in support of claim of purchases. We also notice that the tax authorities have arrived at such a conclusion only by considering the purchase transaction and did not prefer to examine the claim of export of same goods in the succeeding year and re-import of the same goods thereafter. In our view, the surrounding circumstances and human probabilities attached to a transaction should be examined by considering the transactions as a whole. Examination of part of transactions alone in the context of human probabilities/surrounding circumstances, some times, would give misleading results

Radiant Premises Pvt. Ltd vs. ACIT (ITAT Mumbai)

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DATE: June 5, 2015 (Date of pronouncement)
DATE: February 8, 2016 (Date of publication)
AY: 2010-11
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CITATION:
S. 23(1)(b): Brokerage paid to give out premises on rent and to earn lease rent is not deductible in computing the Income from house property

The word ‘rent’ connotes a return given by the tenant or occupant of the land or corporeal hereditaments to the owner for the possession and use thereof. It is a sum agreed between the tenant and the owner to be paid at fixed intervals for the usage of such property. The phrase rent received and receivable contemplates the amount received for the enjoyment of the property and certain rights in the said property by the tenant. If there is charge directly related to the rental income or for the property without which the rights in the property cannot be enjoyed by the tenant then it can be construed as part and parcel of enjoyment of the property from where rent is received then such charges can be held to be allowable from the rent received or receivable. However, the brokerage paid to the third party has nothing to do with the rental income paid by the tenant for enjoying the property to the owner. Brokerage cannot be said to be a charge that has been created in the property for enjoying the rights and at best it is only an application of income received/receivable from rent

ITO vs. Hiranandani Builders (ITAT Mumbai)

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DATE: October 28, 2015 (Date of pronouncement)
DATE: November 5, 2015 (Date of publication)
AY: 2009-10
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CITATION:
S. 80-IA: Interest on TDS refund, interest from lessees, interest on FDRs and Tender fees are all “derived” from the undertaking and are eligible for deduction. If items of income are not eligible, it should be netted off against expenditure and only balance can be disallowed

The TDS deduction from lease rental income was beyond the control of the assessee and also due to the delay in getting no-deduction certificate from the AO. In view of the same, the assessee was deprived of funds to the extent of TDS amount, which would have otherwise used for the purpose of business purposes including repayment of loan taken for construction of IT parks and SEZ. The Income tax department was required to pay interest only due to the delay in granting refund of TDS. In the case of Liberty India Ltd, relied upon by the AO, the assessee therein received DEPB credits as per the scheme framed by the Government of India. Hence the Hon’ble Supreme Court held that the primary source of the DEPB receipt is the scheme framed by the Government. However, in the instant case, TDS deduction is integral part connected with the receipt of lease income and the same cannot be separted from the activity carried on by the assessee

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