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DATE: July 27, 2016 (Date of pronouncement)
DATE: August 5, 2016 (Date of publication)
AY: 2010-11
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CITATION:
S. 50C: Valuation is a matter of estimation and some degree of difference is bound to be there. If the difference between the stamp duty valuation and the declared sale consideration is less than 10%, addition u/s 50C should not be made

Valuation is always a matter of estimation where some degree of difference is bound to occur. The difference between the valuation adopted by the Stamp Valuation Authority and declared by the assessee is less than 10%

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DATE: July 27, 2016 (Date of pronouncement)
DATE: August 4, 2016 (Date of publication)
AY: 2006-07
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CITATION:
Writ Petition: A Writ Petition filed little after four months of receipt of impugned order suffers from “delay”. If the Writ Petition does not explain the reasons for the “delay”, it is liable to be dismissed

We find that the impugned order of the Tribunal was passed on 4th December, 2015, received by the petitioner on 28th December, 2015. This petition has been filed on 29th April, 2016. The petition states that according to the petitioner, there is no delay in filing the petition. However, if this Court is of the view that there is a delay and delay may be condoned. However, no reasons with particulars are specified in the petition. In view of the fact that the petition itself does not explain the reason for the delay, the petition is liable to be dismissed

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DATE: July 20, 2016 (Date of pronouncement)
DATE: August 4, 2016 (Date of publication)
AY: 2008-09
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CITATION:
S. 147: S. 148 reopening notice issued to a private trust which received contributions of Rs. 6.58 crore on the ground that it has not obtained a PAN or filed a return of income is not valid. The AO cannot assume all receipts are income and issue the reopening notice

Mere non filing of return of income does not give jurisdiction to the Assessing Officer to re-open the assessment unless the person concerned has total income which is assessable under the Act exceeding maximum amount which is not chargeable to Income Tax. This is provided in Explanation 2 to Section 147 of the Act. This is for the reason that in terms of Section 139(1) of the Act the obligation to file a return of income is only when the total income of a person exceeds the maximum amount not chargeable to tax. So also the obligation to obtain PAN only arises on the income being in excess of the maximum amount not chargeable to tax. Therefore, non filing of return of income and/or not obtaining of PAN does not ipso facto give jurisdiction to reopen an assessment under Section 147/148 of the Act

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DATE: June 13, 2016 (Date of pronouncement)
DATE: August 4, 2016 (Date of publication)
AY: 2006-07
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CITATION:
S. 9(1)(vi)/ Article 12: Consideration received for sale of computer software programme in CD Rom is not assessable as “royalty”. The retrospective amendment in Explanation 4 to section 9(1)(vi) to tax such receipts as royalty has no application to DTAA if the definition of the term “royalty” in the DTAA has remained unchanged

The retrospective amendment brought into statute with effect from 01.06.1976 cannot be read into the DTAA, because the treaty has not been correspondingly amended in line with new enlarged definition of ‘royalty’. The alteration in the provisions of the Act cannot be per se read into the treaty unless there is a corresponding negotiation between the two sovereign nations to amend the specific provision of “royalty” in the same line. The limitation clause cannot be read into the treaty for applying the provisions of domestic law like in Article 7 in some of the treaties, where domestic laws are made applicable. Here in this case, the ‘royalty’ has been specifically defined in the treaty and amendment to the definition of such term under the Act would not have any bearing on the definition of such term in the context of DTAA. A treaty which has entered between the two sovereign nations, then one country cannot unilaterally alter its provision

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DATE: July 20, 2016 (Date of pronouncement)
DATE: August 3, 2016 (Date of publication)
AY: 1991-92
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CITATION:
S. 132(4): Admission of undisclosed income by assessee is not conclusive if no evidence is found to support the admission. A retraction, though belated, is valid. Failure to provide cross-examination to assessee of persons whose statements are relied up is fatal to the addition. CBDT Directive F.No.286/98/2013 IT (INV.II] dated 18/12/2014 prohibits additions on the basis of confession

Admission made by the assessee is not a conclusive proof and such admission can be used as an evidence unless it is not retracted. The assessee in this case has already retracted the statement which in our opinion is a valid retraction. Although there had been search in the case of Gokul Corporation and its partner Shri Suresh A Patel on which the Revenue has relied for making the additions in the case of the assessee but the Revenue could not bring any evidence or material except the statement of the assessee which was recorded on 8.1.96 and also the statements of Shri Subhash Pandey and Shri Kashyap Thakore and these statements were although recorded at the back of the assessee. When the assessee has asked for their cross-examination, the cross examination was not given to the assessee, although the statement of the assessee was recored in consequence of the said statement

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DATE: July 22, 2016 (Date of pronouncement)
DATE: August 3, 2016 (Date of publication)
AY: 1996-97
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CITATION:
S. 43B: Issue of debentures to fund the interest liability does not amount to “actual payment” of the interest so as to qualify for deduction under Explanation 3C to Section 43-B

The question which has to be decided is whether the decision of this court in CIT vs. M. M. Aqua Technologies Ltd, which held that because of Explanation 3C to Section 43-B, any adjustment other than actual payment does not qualify for deduction under Section 43-B. As is evident from the discussion, the assessee’s review is premised on two major arguments, i.e. that the judgments of the Supreme Court in Standard Chartered Bank v Andhra Bank, 2006 (6) SCC 94 and Sunrise Associates vs Govt. of NCT of Delhi & Ors. 2006 (5) SCC 603, have categorically held that debentures (issued in favour of the bank, in this case to discharge interest liability) amounted to payment and that such debentures, being actionable claims and securities, were to be deemed paid once issued

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DATE: July 12, 2016 (Date of pronouncement)
DATE: July 19, 2016 (Date of publication)
AY: -
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CITATION:
Strictures passed against department for casual and careless representation despite huge revenue implications. Dept directed to take remedial measures such as updating the website, appointment of meritorious advocates, proper evaluation of work done by the advocates, ensuring even distribution of work amongst advocates etc. Prevailing practice of evaluating competence of advocates on basis of "cases won or lost" deplored

Instruction No.3/2012 dated 11th April, 2012 of the CBDT also sets out the parameters of performance of the counsel for renewal of his appointment, one of the criteria mentioned therein is the number of cases won by the Counsel for the Income Tax department. This can never be a measure of competence of an Advocate i.e. an officer of the Court. In fact, the quality of the Advocate would be best judged by his performance and not in the result of the litigation. This evaluation can take place only when the Advocate is seen in action. We find that when the Advocates appear before us, very rarely are the Assessing Officer or other Officers involved in the litigation present in Court. In case, they are present, they would be able to give feedback to the Commissioner of Income Tax which could be factored in while briefing him and / or renewing his engagement

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DATE: July 11, 2016 (Date of pronouncement)
DATE: July 14, 2016 (Date of publication)
AY: 2009-10, 2010-11
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CITATION:
S. 9(1)(vi): Though in Infrasoft 220 Taxman 273 (Del) the impact of the amendment to s. 9(1)(vi) on the question whether consideration received for sale of pre-packaged software was “royalty” or “fee for technical services” or "business income" was not examined, it is not required to be examined because u/s 90 (3) provides that the Act prevails only if it is more beneficial compared to the DTAA

The short question considered by the Court in Director of Income Tax v. Infrasoft Limited (2014) 220 Taxman 273 (Del) was whether the term “royalty” covered by Article 12 (3) of the DTAA would apply in the context of sale of pre-packaged copyrighted software. The Court stated that it has not examined the effect of the subsequent amendment to Section 9 (1) (vi) of the Act and also whether the amount received for use of software would be royalty in terms thereof for the reason that the Assessee is covered by the DTAA, the provisions of which are more beneficial

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DATE: June 27, 2016 (Date of pronouncement)
DATE: July 14, 2016 (Date of publication)
AY: 2006-07, 2007-08
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CITATION:
An assessment made u/s 153A only on the basis of pre-search enquiries and because the parties did not appear in response to s. 133(6) summons is not valid if no incriminating material was found in search. A s. 143(1) Intimation is deemed to be a completed assessment if no notice u/s 143 (2) has been issued prior to the date of search. The ratio of CIT vs. Kabul Chawla 380 ITR 173 (Del) has to be understood by perusing the judgment in entirety and not by picking up the favourable sentences and by ignoring the unfavourable ones

The AO has not made assessment on the basis of incriminating material unearthed during search and seizure operation conducted u/s 132 rather proceeded u/s 153A of the Act on the basis of some pre-search enquiries to make an addition as has specifically been recorded in para 6 of the assessment order that, “Pre search enquiries revealed that M/s Jaipuria Infrastructure Developers Pvt. Ltd., the flagship company involved in the real estate business of the S.K. Jaipuria group is indulged in inflating the cost of the project by debiting bogus expenses by raising bills from the non-existing parties or the entry providers.

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DATE: June 29, 2016 (Date of pronouncement)
DATE: July 12, 2016 (Date of publication)
AY: 1989-90
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CITATION:
S. 2(42A)/ 45: An agreement to purchase property merely creates a right to seek specific performance. The asset cannot be considered to be "held" from the date of the agreement so as to constitute long-term capital gains

Consequent to the vendor not honouring the agreement dated 18th May, 1980, all that the appellant had was a right to seek specific performance which he sought to enforce by filing the suit. The appellant did not have possession of the said land. It is only on the Consent Terms being filed in Court that the appellant got ownership and possession

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