Search Results For: Ravindra Bhat J


BSES Rajdhani Power Ltd vs. Pr CIT (Delhi High Court)

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DATE: November 8, 2017 (Date of pronouncement)
DATE: November 11, 2017 (Date of publication)
AY: 2010-11
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CITATION:
S. 263 Revision: The failure to issue notice on any particular issue does not vitiate the exercise of power u/s 263, as long as the assessee is heard and given opportunity. The lack of opportunity at the revisional stage does not vitiate the entire order, or the proceedings. It is a curable defect. The CIT has power to consider all aspects which were the subject matter of the AO’s order, if in his opinion, they are erroneous, despite the assessee’s appeal on that or some other aspect

It is in the context of the above position that this Court has repeatedly held that unlike the power of reopening an assessment under Section 147 of the Act, the power of revision under Section 263 is not contingent on the giving of a notice to show cause. In fact, Section 263 has been understood not to require any specific show cause notice to be served on the assessee. Rather, what is required under the said provision is an opportunity of hearing to the assessee. The two requirements are different; the first would comprehend a prior notice detailing the specific grounds on which revision of the assessment order is tentatively being proposed

CIT vs. Bhushan Steels And Strips Ltd (Delhi High Court)

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DATE: July 13, 2017 (Date of pronouncement)
DATE: July 17, 2017 (Date of publication)
AY: 1995-96
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Whether subsidy is a capital receipt or a revenue receipt: If the recipient has the flexibility of using it for any purpose and is not confined to using it for capital purposes, it means that the policy makers envision greater profitability as an incentive for investors to expand units. Such subsidy is revenue in nature and is taxable as profits

How a state frames its policy to achieve its objectives and attain larger developmental goals depends upon the experience, vision and genius of its representatives. Therefore, to say that the indication of the limit of subsidy as the capital expended, means that it replenished the capital expenditure and therefore, the subsidy is capital, would not be justified. The specific provision for capital subsidy in the main scheme and the lack of such a subsidy in the supplementary scheme (of 1991) meant that the recipient, i.e. the assessee had the flexibility of using it for any purpose. Unlike in Commissioner of Income Tax v. Ponni Sugars & Chemicals [2008] 306 ITR 392 (SC), the absence of any condition towards capital utilization meant that the policy makers envisioned greater profitability as an incentive for investors to expand units, for rapid industrialization of the state, ensuring greater employment. Clearly, the subsidy was revenue in nature

CIT vs. Laxman Industrial Resources Pvt.Ltd (Delhi High Court)

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DATE: March 14, 2017 (Date of pronouncement)
DATE: May 20, 2017 (Date of publication)
AY: 2002-03
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CITATION:
Bogus share capital: Fact that the investigation wing’s report alleged that the assessee was beneficiary to bogus transactions and that the identity of shareholders, genuineness etc was suspect is not sufficient. The AO is bound to conduct scrutiny of documents produced by the assessee and cannot rest content by placing reliance on the report of the investigation wing

The assessee had provided several documents that could have showed light into whether truly the transactions were genuine. It was not a case where the share applicants are merely provided confirmation letters. They had provided their particulars, PAN details, assessment particulars, mode of payment for share application money, i.e. through banks, bank statements, cheque numbers in question, copies of minutes of resolutions authorizing the applications, copies of balance sheets, profit and loss accounts for the year under consideration and even bank statements showing the source of payments made by the companies to the assessee as well as their master debt with ROC particulars. The AO strangely failed to conduct any scrutiny of documents and rested content by placing reliance merely on a report of the Investigation Wing. This reveals spectacular disregard to an AO’s duties in the remand proceedings which the Revenue seeks to inflict upon the assessee in this case

Pr. CIT vs. Neeraj Jindal (Delhi High Court)

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DATE: February 9, 2017 (Date of pronouncement)
DATE: March 9, 2017 (Date of publication)
AY: 2005-06, 2006-07
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CITATION:
S. 271(1)(c): Entire law explained on whether levy of penalty is automatic if return filed by the assessee u/s 153A discloses higher income than in the return filed u/s 139(1) in the context of the law as it stood prior to, and after, the insertion of Explanation 5 to s. 271(1)(c). Also, the law on levy of penalty on revised returns explained

When the A.O. has accepted the revised return filed by the assessee under Section 153A, no occasion arises to refer to the previous return filed under Section 139 of the Act. For all purposes, including for the purpose of levying penalty under Section 271(1)(c) of the Act, the return that has to be looked at is the one filed under Section 153A. In fact, the second proviso to Section 153A(1) provides that “assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this sub-section pending on the date of initiation of the search under Section 132 or making of requisition under Section 132A, as the case may be, shall abate.” What is clear from this is that Section 153A is in the nature of a second chance given to the assessee, which incidentally gives him an opportunity to make good omission, if any, in the original return. Once the A.O. accepts the revised return filed under Section 153A, the original return under Section 139 abates and becomes non-est. Now, it is trite to say that the “concealment” has to be seen with reference to the return that it is filed by the assessee. Thus, for the purpose of levying penalty under Section 271(1)(c), what has to be seen is whether there is any concealment in the return filed by the assessee under Section 153A, and not vis-a vis the original return under Section 139

Rajesh Projects (India) Pvt. Ltd vs. CIT (Delhi High Court)

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DATE: February 16, 2017 (Date of pronouncement)
DATE: March 9, 2017 (Date of publication)
AY: -
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S. 194-I: S. 105 of the Transfer of Property Act distinguishes between 'premium' for acquiring the lease and 'rent' for enjoying user of the property. Payment towards 'premium' for the lease (even if paid annually) is a capital payment and is not subject to s. 194-I TDS. CBDT Circular No. 35/2016 dated 13.10.2016 referred

That brings the court to the next question, which is as to the nature of the payments made towards lease. Do they constitute rent so as to attract Section 194-I? The court is of opinion that clearly these payments are not “rent”. That they are annual payments cannot be doubted. Yet, part of the payment is clearly capital in nature. Clause 1 of the lease deeds entered into in each of the cases, clearly points to the fact that a small percentage of the agreed amounts were paid as part of the lease premium and were towards acquisition of the asset; they fell, consequently in the capital stream and were not “rents”. The balance of such premium payments were spread over a period of 8 to 10 years, in specified annual or bi-annual installments. Here, distinction between a single payment made at the time of the settlement of the demised property and recurring payments made during the period of its enjoyment by the lessee is to be made. This distinction is clearly recognized in Section 105 of the Transfer of Property Act, which defines both premium and rent. Such payments were held to constitute capital and not “rent” or advance rent,

Pr. CIT vs. Jatin Investment Pvt. Ltd (Delhi High Court)

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DATE: January 18, 2017 (Date of pronouncement)
DATE: January 31, 2017 (Date of publication)
AY: 2003-04
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CITATION:
S. 68 Bogus capital gains: A transaction cannot be treated as fraudulent if the assessee has furnished documentary proof and proved the identity of the purchasers and no discrepancy is found. The AO has to exercise his powers u/s 131 & 133(6) to verify the genuineness of the claim and cannot proceed on surmises

The assessee has adduced the documentary evidences in support of the transaction in question. The identity of the purchasers of the shares was established as it was borne on the record of the Income Tax Department. The purchasers have PAN card as well. Turning to the shares which were sold by the appellant as per its version, there is no evidence or material to even suggest, as pointed out as on behalf of the assessee, that the cheques directly or indirectly emanated from the assessee so that it could be said that the assessee’s own money was brought back in the guise of sale proceeds of the shares. Though, the purchasers of the shares could not be examined by the AO, since they were existing on the file of the Income Tax Department and their Income Tax details were made available to the AO, it was equally the duty of the AO to have taken steps to verify their assessment records and if necessary to also have them examined by the respective AOs having jurisdiction over them which has not been done by him

Pr. CIT vs. N. C. Cables Ltd (Delhi High Court)

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DATE: January 11, 2017 (Date of pronouncement)
DATE: January 23, 2017 (Date of publication)
AY: 2001-02
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CITATION:
S. 147/ 151: The mere appending of the word "approved" by the CIT while granting approval u/s 151 to the reopening u/s 147 is not enough. While the CIT is not required to record elaborate reasons, he has to record satisfaction after application of mind. The approval is a safeguard and has to be meaningful and not merely ritualistic or formal

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

Triune Projects Pvt. Ltd vs. DCIT (Delhi High Court)

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DATE: November 22, 2016 (Date of pronouncement)
DATE: December 8, 2016 (Date of publication)
AY: -
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S. 2(42C)/ 50B: The fact that certain assets of the "undertaking" are left out of the sale transaction because it would cause inconvenience for the purchaser does not mean that the transaction is not a "slump sale". To expect a purchaser to buy and pay value for defunct or superfluous assets flies in the face of commercial sense

The sale transaction was reported for a total consideration of Rs.45.83 crores. The sale was for a going concern, which included ongoing service contracts, employment contracts and other tangible assets, and intangible assets such as technical know-how etc. To expect a purchaser to buy and pay value for defunct or superfluous assets flies in the face of commercial sense. Unfortunately, the Revenue’s understanding is that in a going concern the buyer is bound to pay good money, transact and purchase bad and irrecoverable debts. Not only does it fly in the face of common and commercial understanding, but it is not even a pre-condition , as is evident from the definition of “undertaking”, cited in Explanation (1) to Section 2 (19) (A) of the Act

IndiaBulls Financial Services Ltd vs. DCIT (Delhi High Court)

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DATE: November 21, 2016 (Date of pronouncement)
DATE: December 6, 2016 (Date of publication)
AY: 2009-10
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CITATION:
S. 14A Rule 8D: The fact that the AO did not expressly record his dissatisfaction with the assessee's working does not mean that he cannot make the disallowance. The AO need not pay lip service and formally record dissatisfaction. It is sufficient if the order shows due application of mind to all aspects

Undoubtedly, the language of Section 14A presupposes that the AO has to adduce some reasons if he is not satisfied with the amount offered by way of disallowance by the assessee. At the same time Section 14A (2) as indeed Rule 8D(i) leave the AO equally with no choice in the matter inasmuch as the statute in both these provisions mandates that the particular methodology enacted should be followed. In other words, the AO is under a mandate to apply the formulae as it were under Rule 8D because of Section 14A(2). If in a given case, therefore, the AO is confronted with a figure which, prima facie, is not in accord with what should approximately be the figure on a fair working out of the provisions, he is but bound to reject it. In such circumstances the AO ordinarily would express his opinion by rejecting the disallowance offered and then proceed to work out the methodology enacted

Sushila Devi vs. CIT (Delhi High Court)

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DATE: October 21, 2016 (Date of pronouncement)
DATE: November 8, 2016 (Date of publication)
AY: -
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CITATION:
Strictures: Department's recalcitrance to release the assessee's seized jewellery, even though it is so small as to constitute "stridhan" and even though no addition was sustained in the assessee's hands, is not "mere inaction" but is one of "deliberate harassment"

This court is of opinion that the respondent’s recalcitrance is not mere inaction; it is one of deliberate harassment. Unarguably, the first round of assessment proceedings culminated in no addition of the jewellery or its value in the hands of the petitioner’s husband. The matter ought to have rested there, because the further proceedings were at the behest of the petitioner’s husband who was aggrieved by the additions made (and not aggrieved by the decision on issues in his favour). The ITAT’s decision to proceed de novo, nevertheless strengthened the respondents’ obduracy and hardened their resolve not to release the jewellery. The de novo order did not result in any addition on that aspect at all; still the respondents cling to another ingenious argument- that till the petitioners’ husband’s tax demands are satisfied, they can detain the jewellery

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