Search Results For: N. K. Billaiya (AM)


Pioneer Town Planners Pvt. Ltd vs. DCIT (ITAT Delhi)

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DATE: August 6, 2018 (Date of pronouncement)
DATE: August 10, 2018 (Date of publication)
AY: 2009-10
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CITATION:
S. 147/ 151: (i) Sanction granted by writing "Yes, I am satisfied" is not sufficient to comply with the requirement of s. 151 because it means that the approving authority has recorded satisfaction in a mechanical manner and without application of mind, (ii) If information is received from investigation wing that assessee was beneficiary of accommodation entries but no further inquiry was undertaken by AO, said information cannot be said to be tangible material per se and, thus, reassessment on said basis is not justified (All imp judgements referred)

This shows that the AO proceeded to initiate reassessment proceedings on the basis of borrowed satisfaction without any application of mind and exercise on the information received from the Investigation Wing of the Department. Therefore, we have no hesitation to hold that the AO proceeded to initiate reassessment proceedings u/s. 147 of the Act and to issue notice u/s. 148 of the Act on the basis of borrowed satisfaction and without any application of mind and examination of the so called material and information received from the investigation wing to establish any nexus, even prima facie, with the such information

DCIT vs. Sterling Ornaments (P) Ltd (ITAT Delhi)

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DATE: June 27, 2018 (Date of pronouncement)
DATE: July 3, 2018 (Date of publication)
AY: 2011-12
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S. 9/ 195(1) TDS: Law on whether commision paid to non-resident agents for services rendered outside India accrues in India and whether the assessee is liable to deduct TDS thereon explained (All judgements referred)

Section 195 of the Act has to be read alongwith the charging Section 4,5 and 9 of the Act. One should not read Section 195 of the Act to mean that the moment there is a remittance, the obligation to deduct tax automatically arises. Section 195 of the Act clearly provides that unless the income is chargeable to lax in India, there is no obligation to withhold tax. In order to determine whether the income could be deemed to accrue or arise in India, section 9 of the Act is the basis

Sunil Agarwal vs. ITO (ITAT Delhi)

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DATE: May 24, 2018 (Date of pronouncement)
DATE: May 26, 2018 (Date of publication)
AY: 2008-09
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CITATION:
S. 147/ 151: If the AO reopens on the basis of information received from another AO without further inquiry, it means he has proceeded "mechanically" and "without application of mind". If the CIT does not give reasons while according sanction, it implies that he has also not applied his mind. Both render the reopening void (All imp judgements referred)

Section 151 of the Act clearly stipulates that the CIT(a), who is the competent authority to authorize the reassessment notice, has to apply his mind and form an opinion. The mere appending of the expression ‘approved’ says nothing. It is not as if the CIT(A) has to record elaborate reasons for agreeing with the noting put up. At the same time, satisfaction has to be recorded of the given case which can be reflected in the briefest possible manner. In the present case, the exercise appears to have been ritualistic and formal rather than meaningful, which is the rationale for the safeguard of an approval by a higher ranking officer

Sunita Jain vs. ITO (ITAT Ahmedabad)

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DATE: March 9, 2017 (Date of pronouncement)
DATE: April 7, 2017 (Date of publication)
AY: 2008-09
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CITATION:
Bogus penny stock capital gains: Failure to provide a copy of the statement relied upon and of cross-examination renders the assessment order void. The claim of capital gains from penny stocks cannot be denied on presumption and surmises by disregarding direct evidences relating to the sale/purchase transactions of shares supported by broker’s contract notes, confirmation of receipt of sale proceeds through regular banking channels and the demat account

There is no denying that consideration was paid when the shares were purchased. The shares were thereafter sent to the company for the transfer of name. The company transferred the shares in the name of the assessee. There is nothing on record which could suggest that the shares were never transferred in the name of the assessee. There is also nothing on record to suggest that the shares were never with the assessee. On the contrary, the shares were thereafter transferred to demat account. The demat account was in the name of the assessee, from where the shares were sold. In our understanding of the facts, if the shares were of some fictitious company which was not listed in the Bombay Stock Exchange/National Stock Exchange, the shares could never have been transferred to demat account. Shri Mukesh Choksi may have been providing accommodation entries to various persons but so far as the facts of the case in hand suggest that the transactions were genuine and therefore, no adverse inference should be drawn

Nishant Construction Pvt. Ltd vs. ACIT (ITAT Ahmedabad)

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DATE: February 14, 2017 (Date of pronouncement)
DATE: March 18, 2017 (Date of publication)
AY: 2011-12
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CITATION:
S. 143(3): Loose papers which do not have full details are "dumb documents" and have no evidentiary value. The fact that the assessee sold goods at a concession does not mean that that the difference between sale value and market value can be assessed as income. The onus is on the AO to make inquiries from the buyers and bring incriminating evidence on record to show that the assessee sold flats at a higher rate

The AO has no power to disturb the sale price shown except in three cases. The first is under Section 145 of the Act. Where the sale of properties is part of the business of the assessee, the Assessing Officer, if he is of the opinion that the accounts are not correct and complete, may proceed to reject the books of accounts and thereafter make a best judgment assessment of the income in the manner prescribed by Section 144. The second is the case where Section 50C of the Act is invoked on the basis of the prices fixed by the Stamp Valuation Authorities of the State Government. That section, it is pointed out, however, applies only in the computation of capital gains and cannot be availed by the Revenue where the profits of the business are to be computed

Reliance Gems & Jewels Ltd vs. DCIT (ITAT Mumbai)

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DATE: October 28, 2015 (Date of pronouncement)
DATE: November 5, 2015 (Date of publication)
AY: 2008-09
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S. 37(1): A business is “set up” the moment employees are recruited for the purpose of the business. All expenditure incurred thereafter is allowable as a deduction even if the business has not commenced

Setting up of business is different from commencement of business and the expenditures are allowable on setting up of business. The assessee has recruited employees for the purpose of its business and about 16 employees are for the job of quality assurance. In our considered opinion, upon recruitment of employees, the factum that expenditure under the different heads was incurred is indicative that business was set up

Shreelekha Damani vs. DCIT (ITAT Mumbai)

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DATE: August 19, 2015 (Date of pronouncement)
DATE: September 11, 2015 (Date of publication)
AY: 2007-08
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CITATION:
S. 153A/ 153D: Approval to the assessment order granted by the Addl. CIT in a casual and mechanical manner and without application of mind renders the assessment order void

The Legislative intent is clear inasmuch as prior to the insertion of Sec.153D, there was no provision for taking approval in cases of assessment and reassessment in cases where search has been conducted. Thus, the legislature wanted the assessments/reassessments of search and seizure cases should be made with the prior approval of superior authorities which also means that the superior authorities should apply their minds on the materials on the basis of which the officer is making the assessment and after due application of mind and on the basis of seized materials, the superior authorities have to approve the assessment order. The Addl Commissioner/Joint Commissioner is required to apply his mind to the proposals put up to him for approval in the light of the material relied upon by the AO. The said power cannot be exercised casually and in a routine manner.

ACIT vs. M/s Venus Jewel (ITAT Mumbai)

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DATE: July 31, 2015 (Date of pronouncement)
DATE: September 9, 2015 (Date of publication)
AY: 2009-10, 2010-11
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CITATION:
S. 29/37(1): Loss on account of forward contract entered into by the assessee to hedge against the loss arising on account of fluctuations in foreign exchange is an allowable deduction. Contrary view in Vinod Kumar Diamonds is not good law

The assessee was exposed to the risk arising in fluctuation out of exchange rate and as a prudent business man it would like to hedge its risk. Accordingly, the assessee had booked the forward contracts and utilised the same during the year or in the succeeding years. The pattern of the assessee reflected that it entered into forward contracts during the normal course of business and utilised the same for business allowing them to run upto the date of contract. The assessee was engaged in the export of diamonds and the forwards contract was entered into in respect of foreign exchange to be received as a result of export and the same was done to avoid the risk of loss due to foreign exchange fluctuations. The claim has to allowed after taking note of the claim of forward contracts and the accounting policies, i.e. AS-11 (revised) and applying the ratio laid down by the Apex Court in the case of CIT vs. Woodward Governor India Pvt. Ltd. 294 ITR 451 (SC)

DCIT vs. Envision Investment & Finance Pvt. Ltd (ITAT Mumbai)

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DATE: August 7, 2015 (Date of pronouncement)
DATE: August 10, 2015 (Date of publication)
AY: 2006-07
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CITATION:
(i) DR can only support the AO's order and cannot set up an altogether new case before the ITAT, (ii) Loss on sale of shares, even if a speculation loss, can be set-off against the gains on sale of shares

Even if the loss claimed by the assessee relating to share transactions as well as loss resulting on valuation of closing stock is treated as speculation loss, the same is entitled to be set-off against the profit on sale of shares in view of DLF Commercial Developers Ltd. 261 CTR (Del) 127

Ketan V. Shah vs. ACIT (ITAT Mumbai)

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DATE: June 26, 2015 (Date of pronouncement)
DATE: July 21, 2015 (Date of publication)
AY: 2005-06, 2007-08
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CITATION:
S. 132(4A) presumption does not apply to loose papers found in some other person's possession. While the AO can make a protective assessment, the appellate authority cannot confirm a protective order. It has to either make it substantive or quash it

It is settled that when there is a doubt as to which person amongst the two was liable to be assessed, parallel proceedings may be taken against both and alternative assessments may also be framed. It is also equally true that while a protective assessment is permissible, it is not open to the income-tax appellate authorities constituted under the Act to make a protective order

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