Home › View all posts by editor › Page 249
Author: editor

Author Archive

This section is now closed. Click here for new judgements


Posted on by editor
COURT:
CORAM:
SECTION(S):
GENRE:
CATCH WORDS:
COUNSEL:
DATE: (Date of pronouncement)
DATE: July 28, 2011 (Date of publication)
AY:
FILE: Click here to view full post with file download link
CITATION:

The department’s objection that the assessee has received bonus shares without investing any convertible foreign exchange is not correct because as the original shares were acquired by investing convertible foreign exchange, it cannot be said that the bonus shares were acquired without taking into consideration the original shares. In accordance with Dalmia Investment 52 ITR 567 (SC) the cost of acquisition of the original shares is closely interlinked with the bonus shares. Once bonus shares are issued, the averaging out formula has to be followed with regard to all shares. Accordingly, bonus shares are covered by s. 115C(b) and eligible for benefit u/s 115F

Read more ›

Posted on by editor
COURT:
CORAM:
SECTION(S):
GENRE:
CATCH WORDS:
COUNSEL:
DATE: (Date of pronouncement)
DATE: July 26, 2011 (Date of publication)
AY:
FILE: Click here to view full post with file download link
CITATION:

For purposes of s. 149, the expression “notice shall be issued” means that the notice should go out of the hands of the AO. On facts, though the notice was signed on 31.3.2010, it was sent to the speed post center for booking only on 7.4.2010. Considering the definition of the word “issue”, merely signing the notices on 31.3.2010 cannot be equated with “issuance of notice” as contemplated u/s 149. The date of issue would be the date on which the same was handed over for service to the proper officer, which in the present case would be the date on which the notices was actually handed over to the post office for the purpose of booking for the purpose of effecting service on the assessee. Till the point of time the envelopes are properly stamped with adequate value of postal stamps, it cannot be stated that the process of issue is complete. As the notice was sent for booking to the Speed Post Center on 7.4.2010, the date of “issue” of the notice would be 7.4.2010 and not 31.3.2010, which is beyond the limitation period. Consequently, the reassessment cannot be sustained

Read more ›

Posted on by editor
COURT:
CORAM:
SECTION(S):
GENRE:
CATCH WORDS:
COUNSEL:
DATE: (Date of pronouncement)
DATE: July 23, 2011 (Date of publication)
AY:
FILE: Click here to view full post with file download link
CITATION:

However, as the DIT-II was exercising supervisory functions over the AO, the real likelihood of “official bias” cannot be ruled out. Even if the officer is impartial and there is no personal bias or malice, nonetheless, a right minded person would think that in the circumstances, there could be a likelihood of bias on his part. In that event, the officer should not sit and adjudicate upon the matter. He should recuse himself. This follows from the principle that justice must not only be done but seen to be done. In order to ensure that no person should think that there is a real likelihood of bias on the part of the officer concerned, the CBDT is directed to ensure that a jurisdictional Commissioner is not nominated as a member of the DRP under Rule 3 (2) of the Rules. By doing this, the principle that justice must not only be done but seen to be done would be ensured

Read more ›

Posted on by editor
COURT:
CORAM:
SECTION(S):
GENRE:
CATCH WORDS:
COUNSEL:
DATE: (Date of pronouncement)
DATE: July 23, 2011 (Date of publication)
AY:
FILE: Click here to view full post with file download link
CITATION:

Thus, in our view, it is a fit case of awarding cost u/s. 254(2B) of the Act, but at the same time, we appreciate the approach of the assessee as discussed hereinabove that they are not interested in the awarding of the cost but their whole purpose in making such request in awarding the cost is only to bring the high handedness of the A.O against the assessee to the notice of the Tribunal. Under the circumstances, we though restrain ourselves from awarding the cost as wished by the assessee, but at the same time, we are inclined to record over here before parting with the order that A.O should have confined himself in making just and proper assessment only, as per the provisions of the law and harassment of the assessee which is not permitted under the Statute should have been avoided at all cost

Read more ›

Posted on by editor
COURT:
CORAM:
SECTION(S):
GENRE:
CATCH WORDS:
COUNSEL:
DATE: (Date of pronouncement)
DATE: July 18, 2011 (Date of publication)
AY:
FILE: Click here to view full post with file download link
CITATION:

The real intention of the parties in entering into the sale and lease agreement has to be gathered from the words in the agreement in a tangible and in an objective manner and not upon a hypothetical assessment of the supposed motive of the assessee to avoid tax.The lease agreement and invoice show that the ownership of the equipment was that of the assessee. There was a transfer of title. The fact that the transaction was entered into by HSEB in order to raise finance for its day-to-day needs and that HSEB decided to go in for tapping the system of sale and lease back assets as a mode of raising finance at a lower cost does not bind the assessee. HSEB’s intention in going in for the transaction cannot be transposed onto the assessee (Industrial Development Corporation of Orissa 268 ITR 130 (Ori), Rajasthan State Electricity Board 204 CTR 415 (Raj) and Gujarat Gas Company 308 ITR 243 (Guj) followed)

Read more ›

Posted on by editor
COURT:
CORAM:
SECTION(S):
GENRE:
CATCH WORDS:
COUNSEL:
DATE: (Date of pronouncement)
DATE: July 18, 2011 (Date of publication)
AY:
FILE: Click here to view full post with file download link
CITATION:

As regards the argument of learned counsel for the respondents that having not assailed the correctness of some of the orders passed by the Tribunal and a decision of the High Court of Karnataka, the revenue cannot be permitted to adopt the policy of pick and choose and challenge the orders passed in the cases before us, it would suffice to observe that such a proposition cannot be accepted as an absolute principle of law, although we find some substance in the stated grievance of the assessees before us, because such situations tend to give rise to allegations of malafides etc. Having said so, we are unable to hold that merely because in some cases revenue has not questioned the correctness of an order on the same issue, it would operate as a bar for the revenue to challenge the order in another case. There can be host of factors, like the amount of revenue involved, divergent views of the Tribunals/High Courts on the issue, public interest etc. which may be a just cause, impelling the revenue to prefer an appeal on the same view point of the Tribunal which had been accepted in the past. We, may however, hasten to add that it is high time when the Central Board of Direct and Indirect Taxes comes out with a uniform policy, laying down strict parameters for the guidance of the field staff for deciding whether or not an appeal in a particular case is to be filed. We are constrained to observe that the existing guidelines are followed more in breach, resulting in avoidable allegations of malafides etc on the part of the officers concerned

Read more ›

Posted on by editor
COURT:
CORAM:
SECTION(S):
GENRE:
CATCH WORDS:
COUNSEL:
DATE: (Date of pronouncement)
DATE: July 18, 2011 (Date of publication)
AY:
FILE: Click here to view full post with file download link
CITATION:

For the GAAR in s. 245 to apply, three aspects have to be satisfied (a) the assessee must obtain a “tax benefit” from a “transaction” or “series of transactions”, (b) the transaction(s) must be an “avoidance transaction” in the sense of not having been “arranged primarily for bona fide purposes other than to obtain the tax benefit” and (c) the avoidance transaction(s) must be abusive of the provisions of the Act, the burden being on the AO to establish the abuse

Read more ›

Posted on by editor
COURT:
CORAM:
SECTION(S):
GENRE:
CATCH WORDS:
COUNSEL:
DATE: (Date of pronouncement)
DATE: July 15, 2011 (Date of publication)
AY:
FILE: Click here to view full post with file download link
CITATION:

Aditya Birla Nuvo’s argument that the shares of Idea Cellular were beneficially owned by AT&T Mauritius and that the gains would not be taxable in India under the India-Mauritius DTAA is not acceptable because under the JV agreement, AT&T Mauritius was merely the “permitted transferee” and acted “for and on behalf” of NSWS, USA. It was NCWS, USA which was the “beneficial owner” of the shares of idea Cellular and not AT&T Mauritius. Accordingly, Azadi Bachao Andolan 263 ITR 706 (SC) has no application

Read more ›

Posted on by editor
COURT:
CORAM:
SECTION(S):
GENRE:
CATCH WORDS:
COUNSEL:
DATE: (Date of pronouncement)
DATE: July 14, 2011 (Date of publication)
AY:
FILE: Click here to view full post with file download link
CITATION:

The CIT(A)’s view that the gains could be treated as either STCG or business profits depending on whether they had been held for a period of 30 days or shorter is not proper because the holding period is only one of the several criteria that has to be applied to determine whether the transaction is on trading or investment account. The principles that have to be applied are (a) the intention of the assessee at the time of purchase, (b) whether borrowed funds were used, (c) the frequency of purchase and sales, (d) the treatment in the books etc. No single criteria is conclusive and an overall view has to be taken (Associated Industrial Development 82 ITR 586 (SC) & Holck Larsen 160 ITR 67 (SC) followed)

Read more ›

Posted on by editor
COURT:
CORAM:
SECTION(S):
GENRE:
CATCH WORDS:
COUNSEL:
DATE: (Date of pronouncement)
DATE: July 12, 2011 (Date of publication)
AY:
FILE: Click here to view full post with file download link
CITATION:

The issues as to (i) whether the word “contractor” is synonymous with “developer” within the meaning of s. 80-IA(4)(i) and (ii) whether the condition in clause (c) is applicable to a developer who is not carrying on the business of operating and maintaining the infrastructural facilities are covered by the judgement in ABG Heavy Industries 322 ITR 323 (Bom). There, it was held that the department’s contention that since the assessee was not “operating and maintaining the facility”, he was not eligible for s. 80-IA(4) deduction was wrong because a harmonious reading of s. 80-IA(4) led to the conclusion that the deduction was available to an assessee who (i) develops or (ii) operates and maintains or (iii) develops, operates and maintains the infrastructure facility. The 2001 amendment made it clear that the three conditions of development, operation and maintainence were not intended to be cumulative in nature. The result is that even a contractor who merely develops but does not operate or maintain the infrastructure facility is eligible for s. 80-IA(4) deduction (B.T.Patil & Sons Belgaum vs. ACIT 126 TTJ 577 (Mum) impliedly held not good law)

Read more ›