Search Results For: Ram Lal Negi (JM)


ACIT vs. Mahesh K. Shah (ITAT Mumbai)

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DATE: January 31, 2017 (Date of pronouncement)
DATE: February 8, 2017 (Date of publication)
AY: 2010-11
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CITATION:
S. 69C Bogus Purchases: Purchases cannot be treated as bogus merely on the basis of the statements and affidavits filed by the alleged vendors before the sales-tax department. The said statements cannot be relied upon without cross-examination of the parties. The fact that the parties did not respond to the s. 133(6) notices is not relevant if the assessee filed copies of purchase invoices, extracts of stock ledger showing entry/exit of materials, copies of bank statements to evidence that payments for these purchases were made through normal banking channels, etc to establish genuineness of the aforesaid purchases

Mere reliance by the AO on information obtained from the Sales Department or on statements/affidavits of the 12 parties before the Sales Tax Department or that these parties did not respond to notices issued under section 133(6) of the Act, would not in itself suffice to treat the purchases as bogus and make the addition under section 69C of the Act. If the AO doubted the genuineness of the said purchases, it was incumbent upon him to cause further inquiries in the matter in order to ascertain the genuineness or otherwise of these transactions. Without causing any further enquiries to be made in respect of the said purchases, the AO cannot make the addition under section 69C of the Act by merely relying on information obtained from the Sales Tax Department, the statements/ affidavits of third parties, without the assessee being afforded any opportunity of cross examination of those persons for non-response to information called for under section 133(6) of the Act

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Kumari Kumar Advani vs. ACIT (ITAT Mumbai)

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DATE: July 13, 2016 (Date of pronouncement)
DATE: February 3, 2017 (Date of publication)
AY: 2012-13
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CITATION:
S. 234C: Though levy of interest for deferment of advance-tax is mandatory and cause & justification for the deferment are irrelevant, the same is not leviable if the income was not predictable and the assessee could not have anticipated its receipt e.g. the receipt of a gift

The liability to pay advance tax enshrined under the Act is based on the principle of ‘pay as you earn’, as has been aptly noted by the Delhi High Court in the case of Bill and Peggy Marketing India Pvt. Ltd. vs. ACIT, 350 ITR 465 (Del). Section 234C of the Act prescribes that the advance tax is payable in installments on the dates falling within financial year itself. Any failure or shortfall in payment of such installments attracts interest under section 234C of the Act. In the present case, the assessee has been charged interest under section 234C of the Act primarily on the ground that the requisite installments were not paid on the specified dates of 15/9/2011 and 15/12/2011. The assessee resists the levy on the ground that the income which has prompted the Revenue to levy interest was not received by the assessee on such specified dates, but it was received on 17/12/2011. Ostensibly, the income in question is by way of gifts received, which has been received by the assessee after the date of instalments due on 15/9/2011 and 15/12/2011. Quite clearly, assessee could not have anticipated the receipt or accrual of such income before the event, and such event has taken place after the due dates of instalments

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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

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Gujarat Pipavav Port Limited vs. ITO (ITAT Mumbai)

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DATE: March 23, 2016 (Date of pronouncement)
DATE: May 26, 2016 (Date of publication)
AY: 2008-09
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CITATION:
Installation services provided by a foreign enterprise which are inextricably connected to the sale of goods are not assessable as "fees for technical services" or as "business profits" under the DTAA

Though service of installation is covered by the FTS clause as well as Installation PE clause of the India China treaty and though the installation contract (including period of after sales service) exceeded 183 days, the income from installation activity was neither taxable as FTS nor as business income since (i) the service of installation was inextricably connected to sale of goods, the same could not be treated as FIS or FTS (ii) specific installation PE clause in India China Treaty will override General FTS clause (iii) the aforesaid threshold limit of 183 days would have to be applied to the actual period of installation (which was less than 183 days) and not the contractual period

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Neo Sports Broadcast Pvt Ltd vs. CIT (ITAT Mumbai)

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DATE: February 19, 2016 (Date of pronouncement)
DATE: April 13, 2016 (Date of publication)
AY: 2010-11 & 2011-12
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CITATION:
S. 263: As issue of whether TDS should bee u/s 194C or 194H is subject to two views, revision is not possible

In the original assessment proceedings, the AO had analysed the payment in detail and then concluded that the provisions of sec. 194C are applicable. Also, not two but three views were possible viz. (i) TDS u/s 194H which was discussed by the AO in original order; (ii) TDS u/s 194C which was upheld by AO; and (iii) sec. 194A now sought to be taken by CIT. Since three views were possible, revision was not permissible. Furthermore, even on merits, it was held that view of the CIT was not correct because there was no money borrowed or debt incurred, and hence, payment made to NCL was not “income by way of interest”

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Hatkesh Co-op. Hsg. Society Ltd vs. ACIT (ITAT Mumbai)

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DATE: March 9, 2016 (Date of pronouncement)
DATE: March 29, 2016 (Date of publication)
AY: 2008-09
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CITATION:
Mutuality - TDR Premium

The learned CIT(A) relied on ITAT order for A.Y. 2006-07 (ITA No. 499/M/2011) & A.Y. 2007-08 (ITA No. 500/M/2011) and held that TDR Premium received by Society from its members was not covered by principle of Mutuality. The Tribunal for A.Y. 2008-09 reversed the order of Learned CIT(A) and held that TDR premium will be covered by the principle of mutuality. Hence, ITAT order for A.Y. 2006-07 (ITA No. 499/M/2011) and A.Y. 2007-08 (ITA No. 500/M/2011) in case of Hatkesh Co-op. Hsg. Society is no longer good law.

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Raytheon Ebasco Overseas Ltd vs. DCIT (ITAT Mumbai)

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DATE: March 11, 2016 (Date of pronouncement)
DATE: March 14, 2016 (Date of publication)
AY: 1998-99
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CITATION:
S. 9(1)(vii)/ Article 12: “Startup services”, though technical in nature, are not assessable as “fees for technical services” u/s 9(1)(vii) if they do not involve any “construction, assembly mining or like projects”. The services are also not taxable under Article 12 as they do not “make available” technical knowledge

We are of the opinion that technical services or the start-up services, provided by the assessee, did not include any construction, assembly mining or like projects and therefore the payment received by it would not constitute FTS as per the provisions of the Act. Here, we would like to refer to the decision of the Hon’ble Madras High Court delivered in the case of Neyveli Lignite Corporation (243ITR459).In that case the assessee was engaged in the mining of lignite. It had entered in to an agreement with a Hungarian company for acquiring steam generating plant for more efficient running of its business. The AO held that income had accrued to Hungarian company in India and hence the Indian company was liable for deduction of tax. The Hon’ble court decided the issue in favour of the assessee and held that receipts could not be brought to tax in India, that the payments made by it were not taxable under the provisions of section 9 of the Act. (Ichikawajama-Harima Heavy Industries Ltd (288 ITR 408) referred)

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Goldman Sachs (India) Securities Pvt. Ltd vs. ITO (ITAT Mumbai)

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DATE: February 12, 2016 (Date of pronouncement)
DATE: February 13, 2016 (Date of publication)
AY: 2011-12
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CITATION:
S. 2(22)(d)/ 46A: A buyback of shares u/s 77A of the Companies Act is not a reduction of capital u/s 100 - 104 of that Act. A buyback cannot be regarded as a "colourable transaction" and cannot be assessed as "deemed dividend" u/s 2(22)(d). The capital gains on buy-back are exempt under the India-Mauritius DTAA

Section 100-105 r.w.s. 391of the CA deal with reduction of capital and obtaining permission of the Court. Clearly, both deal with different situations. The Hon’ble Jurisdictional High Court has dealt with the schemes of buyback of shares and reduction of capital in the case of Capgemini India Private Limited (Company Scheme Petition No.434 of 2014 dated 28.04.2015) where it was held that it is open to a company to buy back its own shares by following the procedure prescribed under section 77A/Section 68 or by following the procedure prescribed under section 391 read with Sections 100 to 104 of the 1956, Act. The observations of the Hon’ble Court does not leave any doubt that buyback of shares cannot be equated with reduction of capital

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