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DATE: August 13, 2018 (Date of pronouncement)
DATE: September 15, 2018 (Date of publication)
AY: 2009-10
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CITATION:
S. 194-H TDS: The law in Idea Cellular 325 ITR 148 (Del) that there is a principal-agent relationship between the telecom company and the dealers does not mean that a similar relationship can be inferred between the dealers and the sub-dealers. The incentive paid by the dealers to sub-dealers cannot be equated with commission as stipulated u/s194H and so there is no requirement for deducting TDS

There is no agency agreement between the assessee and his dealers/sub-dealers. The agency relationship between the assessee and the cellular operators cannot be inferred or presumed in the transaction between the assessee and his sub-dealers. The reason being the SIM cards, vouchers belonged to the cellular operators/cellular entities and these cellular operators/telecom entities ensure that payment is received in respect of those prepaid vouchers and SIM cards which are sold to the subscribers and unsold SIM cards are returned back to them and even if such SIM cards are returned, then these cellular/telecom entities are required to be made payment against them and the SIM card stocked with the distributors are the property of service provider, i.e., the telecom/cellular entities

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DATE: September 10, 2018 (Date of pronouncement)
DATE: September 13, 2018 (Date of publication)
AY: 2011-12
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CITATION:
S. 147/ 56(2)(vii): Law explained on (i) reopening of assessment by issue of s. 148 notice at the 11th hour and based on "stale" material, (ii) nature of sanction to be accorded by the CIT u/s 151 and (iii) scope of s. 56(2)(vii) and whether difference between 'fair market value' and face value of unquoted shares can be assessed as income. All important judgements referred

When the assessees acquired the shares through allotment, the taxing event, as it were, occurred on account of the differential between what is said to be market value and what was value paid by them. As a result, it is held that the primary obligation to disclose about the acquisition of shares, was not relieved by virtue of the notification under Section 25 (6) of the (now repealed) Companies Act, 1956. It is, therefore, held that prima facie, there is no merit in this argument; it cannot be said that the effect of the exemption notification was to relieve the assessees from their obligation to disclose about the acquisition of the shares, which appears to be the taxing event (on account of the differential between the acquisition cost and the fair market value).

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DATE: September 7, 2018 (Date of pronouncement)
DATE: September 13, 2018 (Date of publication)
AY: 2012-13
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CITATION:
S. 2(47)/ 54: Though an unregistered agreement to sell does not entitle the parties to seek part performance u/s. 53A of the Transfer of Property Act, 1882, it can be a basis for a suit for specific performance in view of s. 49 of the Registration Act. Consequently, even an unregistered agreement creates a right in favour of the buyer and constitutes a "transfer" of the old property u/s 2(47) for purposes of determining whether the purchase of the new property is within one year of the date of "transfer" of the old property

Thus, a right in respect of the capital asset (old residential property in question) has been transferred by the assessee in favour of the vendee/transferee on 16.09.2011 and, therefore, since purchase of the new property on 04.10.2010 which fact has been disputed by the AO/Ld. CIT(A) the purchase of the property is well within one year from the date of transfer as per sec. 2(47) of the Act, therefore, we allow the appeal of the assesse

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DATE: August 29, 2018 (Date of pronouncement)
DATE: September 13, 2018 (Date of publication)
AY: 2014-15
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CITATION:
S. 68 Bogus capital gains from penny stocks: Reliance by AO on statements recorded by the Investigation Wing to conclude that the capital gains are bogus without giving an opportunity of cross examination is a complete violation of principles of natural justice as held in CCE Vs Andaman Timber Industries 127 DTR 241(SC). The AO has not controverted the evidence of purchase bills, payment of consideration through bank, DEMAT account, allotment of amalgamated shares, sale of shares through stock exchange at prevailing price, payment of STT etc

The Assessing Officer has not brought any material on record to controvert the fact duly established by the supporting evidence of purchase bills, payment of consideration through bank, dematerialization of shares in the DEMAT account, allotment of the shares amalgamated new entity in lieu of the earlier two companies of equal number of shares. Sale of shares from the DEMAT account through stock exchange and at the prevailing price as on the date of sale and further payment of STT on the transaction of sale has been duly established. In absence of any contrary fact, the mere reliance by the Assessing Officer on the report of Investigation Wing, Kolkata is not sufficient to establish the fact that the transaction is bogus.

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DATE: September 11, 2017 (Date of pronouncement)
DATE: September 8, 2018 (Date of publication)
AY: -
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CITATION:
Bogus Capital Gains from Penny Stocks: If the transaction is supported by documents like contract notes, demat statements etc and is routed through the stock exchange and if the payments are by account-payee cheques and there is no evidence that the cash has gone back to the assessee's account, it has to be treated as a genuine transaction and cannot be assessed as unexplained credit

When the relevant documents are available the fact of transactions entered into cannot be denied simply on the ground that in his statement the appellant denied having made any transactions in shares. The payments and receipts are made through a/c payee cheques and the transactions are routed through Kolkata Stock Exchange. There is no evidence that the cash has gone back in appellants’s account. Prima facie the transaction which are supported by documents appear to be genuine transactions

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DATE: August 29, 2018 (Date of pronouncement)
DATE: September 8, 2018 (Date of publication)
AY: 2008-09
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CITATION:
Though s. 206C does not impose any limitation period for the AO to hold the assessee to be in default for collection of tax at source, a reasonable time limit of four years has to be read into the statute. Orders passed after this period are beyond the limitation and are void. The fact that the Dept became aware of the default later is irrelevant. The fact that the assessee admitted his liability is also irrelevant

There is no dispute that Section 206C or any other provisions of the Income Tax Act do not provide any limitation for passing the order by the Assessing Officer U/s 206C(6)/206C(7) of the Act holding the assessee in default due to failure to collect tax at source. However, non-providing the limitation in the statute would not confer the jurisdiction/powers to the Assessing Officer to pass order U/s 206C at any point of time disregarding the amount of time lapse from such default of collection of tax at source

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DATE: September 4, 2018 (Date of pronouncement)
DATE: September 7, 2018 (Date of publication)
AY: 2003-04, 2004-05, 2005- 06
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CITATION:
S. 271(1)(c) Penalty: If appeals with reference to the quantum proceedings have been admitted by the Court on substantial questions of law, it means that there were debatable and arguable questions raised and so penalty u/s 271(1)(c) cannot be levied (PCIT v. Shree Gopal Housing 167 DTR 236 distinguished). Penalty also cannot be levied if the claim was as per judicial precedents prevalent at the time of filing the ROI. Also, there must be a finding that the details supplied by the assessee in its return were incorrect or erroneous or false

In all these appeals, we find that the appeals with reference to the quantum proceedings have been admitted by this Honourable Court on a substantial question of law. That has also been recorded by the Tribunal in the impugned order and the same is also not disputed before us. We find that the appeals were admitted as this Court found that there were debatable and arguable questions raised in the quantum proceedings. This being the case, we find that the Tribunal, in the facts and circumstances of the present case, was fully justified in confirming the order of the CIT (A) in all the three assessment years for deleting the penalty

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DATE: August 31, 2018 (Date of pronouncement)
DATE: September 7, 2018 (Date of publication)
AY: -
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CITATION:
A co-operative housing Society is not expected to indulge into profiteering business from its members. Transfer fees cannot be charged under the pretext of "voluntary donation". Amount which is accepted above permissible limits towards transfer fee is illegal and taxable as income in the hands of the society

The Society is not expected to indulge into profiteering business from the members and if such amount is earned, then it is taxable under the law. There is no bar for any member to pay donation to the Society, however, it should be voluntary without any compulsion and coercion. No manner the transfer fees can be charged under the pretext of donation

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DATE: August 30, 2018 (Date of pronouncement)
DATE: September 7, 2018 (Date of publication)
AY: 2011-12
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CITATION:
S. 272A(1)(c) Penalty: The argument that penalty u/s 272A(1)(c) can be levied only for non-compliance of s. 131(1) and not s. 131(IA) is not correct because s. 131(1A) has to be read with s. 131(1). On facts, the penalty is justified because the conduct of the assessee is not bona fide. There is deliberate and complete defiance to the summons issued u/s 131(1A)

So far as the arguments of the ld. counsel for the assessee that there was a reasonable cause on the part of the assessee in not submitting the details as called for by the ADIT (Investigation) is concerned, we find from the record that there was a deliberate defiance on the part of the assessee for non- submission of the same under the pretext that some of the details are available in the records of the Income Tax Department or some of the details are available in the Website of the Ministry of Corporate Affairs

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DATE: August 23, 2018 (Date of pronouncement)
DATE: September 3, 2018 (Date of publication)
AY: 2009-10
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CITATION:
The Revenue has been selective in its approach. It picks either the assessee or the AYs pertaining to that assessee for challenging the orders in relation to them, before the higher forums. This results in revenue leakage or perpetuation of wrongs affecting adversely the collection of revenue. The public at large is at a loss to understand as to why the Department/Revenue consistently loses the battle in the higher Courts. This could be then termed as a deliberate or intentional act. If the Department of Revenue, Ministry of Finance, Government of India is going to conveniently overlook this and not bring the guilty persons to book by initiating disciplinary measures against them, then, no purpose will be served at all. This is not a short term exercise, but a major surgery which will have to be performed. If the Revenue Officials are prepared to take some bold decisions, then, only these state of affairs will improve and not otherwise

On numerous occasions, this Court has brought to the notice of the Department of Revenue, Ministry of Finance, Government of India through the Commissionerates that the Revenue has been selective in its approach.It picks either the assessee or the assessment years pertaining to that assessee for challenging the orders in relation to them, before the higher forums.This results in revenue leakage or perpetuation of wrongs affecting adversely the collection of revenue. The public at large is at a loss to understand as to why the Department/Revenue consistently loses the battle in the higher Courts. This could be then termed as a deliberate or intentional act.6 If the Department of Revenue, Ministry of Finance, Government of India is going to conveniently overlook this and not bring the guilty persons to book by initiating disciplinary measures against them, then, no purpose will be served at all.We know that the Appeal for the prior Assessment Year may not be properly drafted or does not contain the relevant details, much less the precise question of law and if that is dismissed, there will be definitely an impact on the Appeal relating to the Assessment Year under consideration.Hence, this is not a short term exercise, but a major surgery which will have to be performed. If the Revenue Officials are prepared to take some bold decisions, then, only these state of affairs will improve and not otherwise

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