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DATE: August 31, 2018 (Date of pronouncement)
DATE: September 7, 2018 (Date of publication)
AY: -
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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 23, 2018 (Date of pronouncement)
DATE: September 3, 2018 (Date of publication)
AY: 2009-10
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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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DATE: August 28, 2018 (Date of pronouncement)
DATE: September 1, 2018 (Date of publication)
AY: -
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CITATION:
Securities Transaction Tax: CBDT's clarification that where a derivative contract is being settled by physical delivery of shares, the transaction would not be any different from transaction in equity share where the contract is settled by actual delivery or transfer of shares and the rates of STT as applicable to such delivery based equity transactions shall also be applicable to such derivative transaction takes care of the grievance of the stake holders

In a nutshell, CBDT is of the view that where a derivative contract is being settled by physical delivery of shares, the transaction would not be any different from transaction in equity share where the contract is settled by actual delivery or transfer of shares and the rates of STT as applicable to such deliverybased equity transactions shall also be applicable to such derivative transaction

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DATE: August 21, 2018 (Date of pronouncement)
DATE: August 30, 2018 (Date of publication)
AY: -
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These Petitions have been filed challenging a somewhat curious and unforeseen development. We do not know in what circumstances the Chairman flew down to Mumbai and invited the members for discussion in relation to some cases or related issues. It would be highly risky if such discussions in relation to judicial orders and judicial matters are held in a close-door meeting or in the privacy of the chambers of the members of the Settlement Commission. There is a uncalled for interference in judicial proceedings and none including the Chairman can direct a particular course of action to be taken or a particular order being passed in pending judicial proceedings

The Petitioners are not precluded from challenging the manner in which the Chairman intervened in this matter at a later stage. We would not like to interfere with the pending proceedings for then we would commit the same mistake, if at all, committed by the learned Chairman. It would not be proper to presume at this stage that the Proceedings are necessarily going to an end, with final orders, but adverse to the Petitioners’ interests. For all we know the settlement may go through to the satisfaction of all parties before the Settlement Commission. In the event the apprehension comes true and the Chairman’s meeting and discussion with the members of the Commission results in an adverse order as apprehended, then, while challenging such final orders and if they are found to be influenced by the Chairman’s alleged uncalled for and undue intervention, the Petitioners can raise appropriate pleas and urge before this Court that they have not been dealt with fairly by the Settlement Commission. There is a uncalled for interference in judicial proceedings and none including the Chairman can direct a particular course of action to be taken or a particular order being passed in pending judicial proceedings

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DATE: August 20, 2018 (Date of pronouncement)
DATE: August 29, 2018 (Date of publication)
AY: 2007-08
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CITATION:
Gains from sale of shares whether capital gains or business profits: Short period of holding shows that intention of assessee is to earn profit at earliest possible occasion. Assessee is moving as per stock market trend and selling shares at first available opportunity. This type of activity of sale and purchase is rightly termed, not as investment, but as trading

In fact, trend is that majority transactions have feature in holding of shares from one day to seven days. assessee sold shares within period of one week from date of purchase in more than eighty per cent of cases. It is this trend which resulted in concurrent finding against assessee. Intention of assessee in indulging in these transactions is to earn profit at earliest possible occasion and when there is rise in price. assessee is moving as per stock market trend

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DATE: June 7, 2018 (Date of pronouncement)
DATE: August 29, 2018 (Date of publication)
AY: 2010-11
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S. 159/ 292B: There is no obligation on the part of the legal representatives of a deceased assessee to intimate the death of the assessee or take steps to cancel the PAN registration. A notice issued in the name of a dead person is unenforceable in law. The fact that the Revenue had no knowledge about the death of the assessee does not change the law. The defect is fatal and is not curable u/s 292B. The legal representatives are liable u/s 159 only if proceedings have already been initiated when the assessee was alive and are continued against the legal heirs

Nothing has been placed before this Court by the Revenue to show that there is a statutory obligation on the part of the legal representatives of the deceased assessee to immediately intimate the death of the assessee or take steps to cancel the PAN registration.

18. In such circumstances, the question would be as to whether Section 159 of the Act would get attracted. The answer to this question would be in the negative, as the proceedings under Section 159 of the Act can be invoked only if the proceedings have already been initiated when the assessee was alive and was permitted for the proceedings to be continued as against the legal heirs

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DATE: August 16, 2018 (Date of pronouncement)
DATE: August 28, 2018 (Date of publication)
AY: 2004-05
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S. 147/ 148: The revenue played a subterfuge in trying to cover up its omission and in ante dating the record. The court hereby directs the Chief Commissioner to cause an inquiry to be conducted as to the involvement of the officials or employee in the manipulation of the record, and take strict disciplinary action, according to the concerned rules and regulations. This inquiry should be in regard to the conduct of the concerned AO posted at the time, who issued the notice under Section 147/148 as well as the officers who filed the affidavits in these proceedings

It goes without saying that whilst the “reasons” shown to the court and the petitioner may ipso facto not be faulted, yet the file tells a different story; they were not recorded before the impugned notice was issued. In fact, the revenue played a subterfuge, in trying to cover up its omission, and in ante dating the record, in the attempt to establish that such reasons existed, and this court’s interference was not called for. In these circumstances, this court hereby directs the Chief Commissioner concerned to cause an inquiry to be conducted as to the involvement of the officials or employee in the manipulation of the record in this case, and take strict disciplinary action, according to the concerned rules and regulations. This inquiry should be in regard to the conduct of the concerned AO posted at the time, who issued the notice under Section 147/148 as well as the officers who filed the affidavits in these proceedings. The investigation and consequential action shall be completed within four months

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DATE: July 12, 2018 (Date of pronouncement)
DATE: August 28, 2018 (Date of publication)
AY: 2007-08
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CITATION:
S. 254(2) Time limit for filing MA: Though the Tribunal has no power u/s 254(2) to condone delay in filing the MA, the High Court has power under Articles 226 and 227 of the Constitution of India to do substantial justice by condoning the delay. Injustice was done to the assessee because the Tribunal did not follow the binding judgement in Manjunatha Cotton and Ginning Factory 359 ITR 565 on the issue of levy of penalty u/s 271(1)(c). Accordingly, the delay in fling the MA deserves to be condoned

Though under the provisions of Section 254 the Tribunal cannot go beyond the provisions of the said Section, the fact remains that the petitioner has substantiated that injustice is being done by not following the Division Bench decision of this Court. Therefore, in order to do substantial justice, this Court exercising the power under Articles 226 and 227 of the Constitution of India can condone the delay as held by the Division Bench of this Court in the case of Practice Strategic Communications India Private Limited .vs. C.S.T., Domlur, reported in 2016(45) S.T.R. 47(Kar.)

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DATE: July 31, 2018 (Date of pronouncement)
DATE: August 23, 2018 (Date of publication)
AY: -
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CITATION:
S. 40(a)(ii): Education cess is not part of tax. Accordingly, the same is allowable as a deduction and disallowance u/s 40(a)(ii) cannot be made. CBDT Circular referred

That on a plain reading of the above provision of section 40(a) (ii), it is evident that a sum paid of any rate or tax is expressly disallowed by this sub-clause in two cases : (i) where the rate is levied on the profit or gains of any business or profession, and (ii) where the rate or tax is assessed at a proportion of or otherwise on the basis of any such profits or gains. It is evident that nowhere in the said section it has been mentioned that education cess is not allowable. Education cess is neither levied on the profits or gains of any business or profession nor assessed at a proportion of, or otherwise on the basis of, any such profits or gains.

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DATE: July 23, 2018 (Date of pronouncement)
DATE: August 21, 2018 (Date of publication)
AY: 2005-06
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CITATION:
S. 147/50C: The assessment cannot be reopened (within 4 years) on the ground that the AO lost sight of a statutory provision like 50C. This amounts to a review. A.L.A. Firm 55 TM 497 (SC) distinguished on the basis that the reopening in that case was because the AO was unaware of a binding High Court judgement. Here it is not the case of the Revenue that the AO was not aware of s. 50C at the time of passing the S. 143(3) assessment order

The basis of reopening the assessment in A.L.A. Firm (Supra) was the decision in the case of G.R.Ramachari & Co. (Supra) coming to the knowledge of the Assessing Officer subsequent to the completion of assessment proceedings. In this case it is not the case of the Revenue that the Assessing Officer was not aware of Section 50C of the Act at the time of passing the Assessement Order dated 26.12.2007 under Section 143 of the Act. In this case the trigger to reopen assessment proceedings as recorded in the reasons is nonfurnishing of copy of the sale deed by the Respondent. This has been found factually to be incorrect. Therefore, once the sale deed was before Assessing Officer and enquiries were made during the assessment proceedings regarding the quantum of capital gains, it must follow that the Assessing Officer had while passing the order dated 26.12.2007 under Section 143(3) of the Act had taken view on facts and in law as in force at the relevant time. Thus, this is a case of change of opinion

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