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DATE: March 5, 2018 (Date of pronouncement)
DATE: March 13, 2018 (Date of publication)
AY: -
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CITATION:
Certain Advocates have forgotten the code of eithcs. They facilitate the unethical misadventures of their clients, encouraging their clients' dishonest practices, causing grave stress to the Judiciary, and bringing the entire judicial system to disrepute. It has become a vicious and despicable cycle wherein dishonest litigants with malafide intentions seek out unethical Advocates, who for hefty fee and the lure of attracting similar new and unscrupulous clients, choose to disregard all ethics and the code of conduct enjoined upon this august profession

This malicious and mala-fide Notice of Motion sets out/alleges totally baseless and contemptible allegations against this Court, which are completely unacceptable and are a mere shenanigan to circumvent the action of contempt of Court. This reprehensible attempt at intimidating and manipulating this Court into not taking any action under the Law of Contempt calls for censure in the strongest terms. In an attempt to cover up the mala-fide intent, which is crystal clear and amply evident, the litigant Shri Vilas Chandrakant Gaokar dishonestly/falsely reiterates in the Application that he holds the Court in the highest esteem and respects its integrity. It will not be out of place to mention here that in an earlier matter before me, in which Mr. Mathew Nedumpurra appeared for one of the parties, he, after repeatedly reiterating that he holds the Court in the highest esteem and respects its integrity, had proceeded to pray that I recuse myself from all the matters in which he appears

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DATE: March 7, 2018 (Date of pronouncement)
DATE: March 13, 2018 (Date of publication)
AY: 2006-07, 2007-08, 2009-09
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CITATION:
Transfer Pricing: The Comparable Uncontrolled Price (CUP) method is not the Most Appropriate Method for determining the Arm's Length Price (ALP) in respect of the transactions of (sales of goods and sales commission) with Associated Enterprises (AEs) if there are geographical differences, volume differences, timing differences, risk differences and functional differences. If it is not shown that the selection of TNMM as the Most Appropriate Method is perverse, the same cannot be challenged

The TPO has while stating that FAR analysis has to be carried out, does not indicate that it was carried out. On the contrary, we find that the Tribunal in the impugned order has done the necessary FAR analysis. This is so as it has compared the risk and functional differences involved in finished goods being sold to AEs as against those sold to third parties as we have enumerated above to come to the conclusion that the prices at which the finished goods sold to the third parties are not comparables to the prices at which the goods sold to the AEs inter alia on the FAR analysis. We note that the finished goods are customized goods and the geographical differences, volume differences, timing differences, risk differences and functional differences, came to a conclusion that the CUP method would not be the MAM to determine the ALP

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DATE: February 23, 2018 (Date of pronouncement)
DATE: March 8, 2018 (Date of publication)
AY: 1993-94
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CITATION:
S. 143(1)(a): Submission of Dept that decisions of Courts and Tribunals interpreting a provision is to be ignored by the AO will ring the death knell of Rule of law in the Country. It ignores the hierarchical system of jurisprudence in our country. The AO is bound by the views of the Court. Law on s. 36(1)(viii) (Bad debts) explained

“Litera Leges, certainty concept and on the concept that there is no equity on fiscal law irrespective of any judgment of any Hon’ble Court or Tribunal a go by cannot be given to the aforesaid interpretations given in this written submission”.

The above submission that decision of the Court and / or Tribunal interpreting a provision is to be ignored by the Assessing Officer, if accepted will ring the death knell of Rule of law in the country. The Assessing Officer is bound by the views of the Court. The above submission ignores the hierarchal system of jurisprudence in our country.

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DATE: February 24, 2018 (Date of pronouncement)
DATE: March 8, 2018 (Date of publication)
AY: 2004-05
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CITATION:
Law on reopening u/s 147 pursuant to an audit objection opposed by the AO explained in the context of (i) the notice being silent on whether it was issued pursuant to the audit objection, (ii) there being a gap between the AO's opposition and the issue of notice and (iii) the reasons for reopening being supported by a subsequent Supreme Court judgement

The decision of the Apex Court in Liberty India (Supra) was rendered on 31st August 2009 and the notice seeking to reopen the Assessment year for Assessment Year 2004-05 was issued on 18th March 2009. Therefore, at the time when the reasons for issue of reopening notice was recorded by the Assessing Officer, he could not have had any reasonable belief on the basis of Apex Court decision in Liberty India (Supra) to come to a prima facie view that income chargeable to tax has escaped assessment. In this appeal we are concerned with the issue of jurisdiction of the Assessing Officer to issue the reopening notice and not with the merits of the dispute. Thus when the reopening notice was issued in March 2009, the Apex Court decision was not available and there was a divergence of views. This has to be read in the context of the Assessing Officer’s response to the audit objection on the above issue duly supported by case law

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DATE: February 27, 2018 (Date of pronouncement)
DATE: March 6, 2018 (Date of publication)
AY: -
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CITATION:
No more adjournments. No more ‘tareek pe tareek’. Enough is enough. That a Court will endlessly grant adjournments is not something that parties or advocates can take for granted. Nor should they assume that there will be no consequences to continued defaults and unexplained delay

The time has gone when a Court could, would or should pick up some utterly random figure like Rs.5,000 or Rs.25,000, a number wholly without tether to the actual days of delay. Fixing ad hoc figures like this is counter-productive. Parties believe that even if the delay is inordinate, the costs of that delay will be negligible; and hence they continue to extend the delay. The costs must be real. They must be sufficient to convey the message that non-compliance with our orders brings consequences; that these consequences are inevitable and unavoidable; and the consequences are not some piffling trifle

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DATE: February 20, 2018 (Date of pronouncement)
DATE: March 3, 2018 (Date of publication)
AY: -
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CITATION:
S. 271(1)(c): Voluntary surrender of income after survey by filing a revised income does not save the assessee from levy of penalty for concealment of income in the original return if there is no explanation as to the nature of income or its source. SAS Pharmaceuticals 335 ITR 259 (Del) is not good law after MAK Data 358 ITR 593 (SC)

The assessee merely made a voluntary surrender; she did not offer any explanation as to the nature of income or its source. The observations in MAK Data (supra) are that the authorities are not really concerned with the statement- whether voluntarily or otherwise and have to see whether there was any non disclosure of material facts, or income. The complete failure to furnish any details with respect to the income, which if given could have been the only reasonable basis for deletion of penalty, in the opinion of the court, reinforced the views of the AO and CIT (A) that the revised return was an afterthought, based on the subsequent event of disclosure of Rs 2,00,00,000/-

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DATE: February 5, 2018 (Date of pronouncement)
DATE: February 20, 2018 (Date of publication)
AY: -
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CITATION:
S. 206AA TDS: The requirement (pre amendment) that TDS should be deducted at 20% on payments to non-residents even though the income is chargeable to tax at a lower rate under the DTAA is not acceptable because the DTAA has primacy over the Act. S. 206AA (as it existed) has to be read down to mean that where the non-resident payee is resident in a territory with which India has a Double Taxation Avoidance Agreement, the rate of taxation would be as dictated by the provisions of the treaty

Having regard to the position of law explained in Azadi Bachao Andolan Vs. Union of India, (2003) 263 ITR 706 (SC) and later followed in numerous decisions that a Double Taxation Avoidance Agreement acquires primacy in such cases, where reciprocating states mutually agree upon acceptable principles for tax treatment, the provision in Section 206AA (as it existed) has to be read down to mean that where the deductee i.e the overseas resident business concern conducts its operation from a territory, whose Government has entered into a Double Taxation Avoidance Agreement with India, the rate of taxation would be as dictated by the provisions of the treaty

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DATE: January 25, 2018 (Date of pronouncement)
DATE: February 17, 2018 (Date of publication)
AY: -
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CITATION:
Service-tax on maintenance of property: Under the MOFA, the builder/ developer is under a statutory obligation to look after the day-to-day upkeep, maintenance and repair of the property till conveyance to the co-op society. Such maintenance of the structure is not rendering a taxable service as per s. 65 (64) of the Finance Act, 1994

The promoter has to maintain, safeguard and protect the property and look after the day-to-day wear and tear. Therefore, when he maintains the structure or repairs it, he is not rendering a taxable service in the sense envisaged by the Financial Act, 1994. If one loses complete focus or sight of the backdrop in which the so called service is rendered, then, the conclusion as erroneous and suggested by the Revenue will be reached. The deposit or the monies themselves are held and appropriated towards payment of taxes, etc., popularly known as outgoings. The building and the Flats therein has to stand intact till all the Flats or units are sold and the statutory obligations are fully discharged. This is not a service of the nature understood by Section 65 (64) of the Finance Act, 1994. It is not a contractor simplicitor of maintenance of immovable property. It is not as if there is a existing building comprising of Flats, fully occupied, the maintenance and upkeep of which is handed over under a contract. It is a statutory obligation superimposed on a contract to sell a Flat/unit in a building to be constructed on a piece or parcel of land. That cannot be confused with a taxable service as defined under the Finance Act, 1994. The day-to=day upkeep, maintenance and repair is till the statutory duty is fully performed as noted above.

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DATE: February 6, 2018 (Date of pronouncement)
DATE: February 16, 2018 (Date of publication)
AY: -
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CITATION:
GST Network: The regime is not tax friendly. GST was highly publicised and termed as popular but there has been great hue and cry because assessees are unable to obtain access to the GST website. Those in charge of implementation and administration must wake up and put in place the requisite mechanism to preserve the image, prestige and reputation of this country, particularly when we are inviting and welcoming foreign investment in the State and the country

We do not think that these are satisfactory state of affairs. A tax like Goods and Services Tax was highly publicised and termed as popular. We had yet not seen a celebration of New Tax regime, but that has followed with great hue and cry. These celebrations mean nothing. The special sessions of Parliament or special or extraordinary meetings of Council would mean nothing to the assessees unless they obtain easy access to the website and portals. The regime is not tax friendly. We hope and trust that those in charge of implementation and administration of this law will at least now wake up and put in place the requisite mechanism. This is necessary to preserve the image, prestige and reputation of this country, particularly when we are inviting and welcoming foreign investment in the State and the country. We hope and trust that such petitions are rarity and the Court will not be called upon to administer the implementation of the law, leave alone monitoring and supervising the working of the individual officials, howsoever high ranking he may be

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DATE: January 29, 2018 (Date of pronouncement)
DATE: February 16, 2018 (Date of publication)
AY: 2009-10
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CITATION:
S. 40(a)(i) TDS disallowance: A party cannot be called upon to perform an impossible Act i.e. to comply with a provision not in force at the relevant time but introduced later by retrospective amendment. S. 40(a)(i) disallowance can be made only if the royalty falls under Explanation 2 to s. 9(1)(vi) but not if it falls under Explanation 6 to s. 9(1)(vi)

The view taken by the Tribunal that a party cannot be called upon to perform an impossible Act i.e. to comply with a provision not in force at the relevant time but introduced later by retrospective amendment. This is in accord with the view taken by this Court in CIT v/s. Cello Plast (2012) 209 Taxmann 617 – wherein this Court has applied the legal maxim lex non cogit ad impossibilia (law does not compel a man to do what he cannot possibly perform)

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