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DATE: February 13, 2015 (Date of pronouncement)
DATE: February 16, 2015 (Date of publication)
AY: 2009-10
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CITATION:
S. 43(5): Transaction of call/put options in foreign currency are "derivatives" and loss suffered therein is not a "speculation" loss

“Derivatives” include foreign currency call option/ put option. These transactions are of derivative markets and cannot be termed as speculative in nature

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DATE: January 28, 2015 (Date of pronouncement)
DATE: February 16, 2015 (Date of publication)
AY: 2009-10
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CITATION:
Law on applicability of s. 271AAA penalty in the context of a voluntary disclosure u/s 132(4) explained. Difference between s. 271(1)(c) and 271AAA also explained

For s. 271AAA, a finding as to the impugned incomes being undisclosed incomes is a pre-requisite for the application of the provision. Further, each of the three ingredients as specified u/s. 271AAA(2) would need to be separately examined for their satisfaction by the assessee if the penalty there-under is not to be levied and, thus, sustained. The admission u/s.132(4) is to specify the undisclosed income, or at least the manner in which it is to be arrived at; the whole premise for extending immunity from the penalty, statutorily mandated, being that the assessee commits himself, providing the necessary details under a condition of oath.

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DATE: February 13, 2015 (Date of pronouncement)
DATE: February 16, 2015 (Date of publication)
AY: 2002-03 & 2004-05
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CITATION:
S. 153A: Assessments which have attained finality cannot be disturbed or varied if no incriminating material is found qua the addition made

Since the assessment had attained finality before the date of search and does not get abated in view of second proviso to section 153A, therefore, without there being any incriminating material found at the time of search, no addition over and above the income which already stood assessed can be made

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DATE: February 13, 2015 (Date of pronouncement)
DATE: February 16, 2015 (Date of publication)
AY: 2010-11
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CITATION:
Service PE: Establishing subsidiary in other treaty country does not result in creating PE of a foreign holding company in the third country. As the employees of SRSIPL are not providing services to the assessee as if they were the employees of the assessee, there is no "service PE"

The AO is not right in (i) treating the assessee as having a Dependent Agency Permanent Establishment; (ii) laying down that the assessee has a business connection in India; (iii) treating SRSIPL as service PE and (iv) treating SRSIPL as Agency PE

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DATE: February 3, 2015 (Date of pronouncement)
DATE: February 13, 2015 (Date of publication)
AY: 2007-08
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CITATION:
Transfer Pricing: Dept is not entitled to challenge the ITAT's decision to determine the interest rate ALP of funds advanced to AE as per Euribor if the earlier ITAT judgements relied upon by ITAT have not been challenged by the Dept

The Revenue has not preferred any appeal against the decision of the Tribunal in “VVF Ltd. Vs. DCIT” (supra) and “DCIT Vs. Tech Mahindra Ltd.”(supra) on the above issue. No reason has been shown to us as to why the Revenue seeks to take a different view in respect of the impugned order from that taken in “VVF Ltd. Vs. DCIT” (supra) and “DCIT Vs. Tech Mahindra Ltd.”(supra). The Revenue not having filed any appeal, has in fact accepted the decision of the Tribunal in “VVF Ltd. Vs. DCIT” (supra) and “DCIT Vs. Tech Mahindra Ltd.”(supra). In view of the above we see no reason to entertain the present appeal as in similar matters the Revenue has accepted the view of the Tribunal which has been relied upon by the impugned order

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DATE: January 2, 2015 (Date of pronouncement)
DATE: February 13, 2015 (Date of publication)
AY: 2003-04
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CITATION:
S. 147/151: Non-mentioning in the reasons that approval has been obtained from the CIT vitiates the reopening

Another major discrepancy noticed during the course of arguments is that there is no mention of authorization of a higher authority to initiate the current reassessment proceedings. Since there is no mention of the approval sought from the CIT on the reasons, as recorded by the AO to initiate reassessment proceedings, the entire initiation has been vitiated and become bad in law

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DATE: January 7, 2015 (Date of pronouncement)
DATE: February 13, 2015 (Date of publication)
AY: 2004-05
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CITATION:
S. 271(1)(c): Revised ROI filed after issue of s. 143(2) notice amounts to voluntary disclosure if AO has not sought specific particulars in the notice

Even though the assessed filed the revised return of income after the receipt of notice u/s 143(2) of the Act, yet the admitted fact remains that the assessing officer did not seek any type of particulars in that notice. Hence the mistake in the Long term Capital gain could not have come to the notice of the AO at that point of time, meaning thereby, it should be construed that the assessee has declared the higher amount of Long term capital gain voluntarily upon its detection

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DATE: February 4, 2015 (Date of pronouncement)
DATE: February 12, 2015 (Date of publication)
AY: 2006-07
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CITATION:
Unaccounted Sales: The entire unaccounted sales cannot be assessed as undisclosed income particularly if the purchases have been accounted for. Only the net profit on such unaccounted sales can be taken as income

The CIT(A) and Tribunal have came to the concurrent finding that the purchases have been recorded and only some of the sales are unaccounted. Thus, in the above view, both the authorities held that it is not the entire sales consideration which is to be brought to tax but only the profit attributable on the total unrecorded sales consideration which alone can be subject to income tax. The view taken by the authorities is a reasonable and a possible view

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DATE: February 3, 2015 (Date of pronouncement)
DATE: February 12, 2015 (Date of publication)
AY: 2006-07
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CITATION:
S. 263: Fact that assessment order is silent on a point does not mean that there is no application of mind by AO if he has raised a query during the assessment proceedings and assessee has replied

This Court in the case of “Idea Cellular Ltd. Vs. Deputy Commissioner of Income Tax & Ors., [(2008) 301 ITR 407 (Bom.)]” has held that if a query is raised during assessment proceedings and responded to by the assessee, the mere fact that it is not dealt with in the assessment Order would not lead to a conclusion that no mind had been applied to it

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COURT:
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SECTION(S):
GENRE:
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COUNSEL:
DATE: February 4, 2015 (Date of pronouncement)
DATE: February 12, 2015 (Date of publication)
AY: 2006-07
FILE: Click here to view full post with file download link
CITATION:
Uniformity in treatment is the basis premise of rule of law. The Dept cannot arbitrarily pick and choose which orders of the ITAT should be challenged in the High Court. If ITAT has followed an order which is not challenged by the Dept then an affidavit must be filed explaining the distinguishing features which warrants the different view

When the Revenue challenges the order of the Tribunal which in turn relies upon another decision rendered by it on the same issue, then in cases where the Revenue has accepted the order by not preferring any Appeal against the earlier order, the Revenue should not challenge the subsequent order on the same issue. In case an appeal is preferred from the subsequent order, then the Memo of appeal must indicate the reasons as to why an appeal is being preferred in later case when no appeal was preferred from the earlier order of the Tribunal which has merely been followed in the later case. In any case, the Officer concerned must atleast file an Affidavit before the matter comes up for admission, pointing out distinguishing features in the present case from the earlier case, warranting a different view in case the appeal is being pressed

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