Home › Archive for High Court › Page 29
Category: High Court

Archive for the ‘High Court’ Category

This section is now closed. Click here for new judgements


Posted on by editor
COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS: , ,
COUNSEL:
DATE: December 16, 2016 (Date of pronouncement)
DATE: August 9, 2017 (Date of publication)
AY: 2008-09
FILE: Click here to view full post with file download link
CITATION:
Transfer Pricing: A party is not barred in law from withdrawing from its list of comparables a company found to have been included on account of mistake of fact. The Transfer Pricing Mechanism requires comparability analysis to be done between like companies and controlled and uncontrolled transactions by carrying out of FAR analysis. The assessee's submission in arriving at the ALP is not final. It is for the TPO to examine and find out the companies listed as comparables which are in fact comparable

We find that the impugned order of the Tribunal holding that a party is not barred in law from withdrawing from its list of comparables, a company, if the same is found to have been included on account of mistake as on facts, it is not comparable. The Transfer Pricing Mechanism requires comparability analysis to be done between like companies and controlled and uncontrolled transactions. This comparison has to be done between like companies and requires carrying out of FAR analysis to find the same. Moreover, the Assessee’s submission in arriving at the ALP is not final. It is for the TPO to examine and find out the companies listed as comparables which are, in fact comparable

Read more ›

Posted on by editor
COURT:
CORAM: ,
SECTION(S): , , ,
GENRE:
CATCH WORDS: ,
COUNSEL: ,
DATE: August 1, 2017 (Date of pronouncement)
DATE: August 9, 2017 (Date of publication)
AY: 1998-99, 1999-00, 2000-01, 2001-02
FILE: Click here to view full post with file download link
CITATION:
Interest on interim compensation received pending final disposal by the High Court is income if there is no direction given by the Court. The source of funds to earn income cannot determine the taxability of the income. The fact that the assessee may have to return the compensation and interest on the principle of restitution as provided under S. 144 of the Civil Procedure Code is not relevant because restitution is not a certainty. Paragon Construction 274 ITR 413 (Del) distinguished

The source of funds to earn income cannot determine the taxability of the income earned on the capital amount which has been invested. This in the absence of any statutory mandate otherwise. The income earned would be chargeable to tax irrespective of the source of the funds from which the income has been earned. In the mercantile system of accounting, income accrues when the right to receive the same arises, even though the actual receipt could be at a later date. In the present case it is an accepted position that the right to receive the interest from the fixed deposits already accrued to the assessee. In such circumstances, the interest on the fixed deposit would be chargeable to tax, as sought to be done by the Assessing Officer under the head income from other sources

Read more ›

Posted on by editor
COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: January 25, 2017 (Date of pronouncement)
DATE: August 4, 2017 (Date of publication)
AY: -
FILE: Click here to view full post with file download link
CITATION:
For purposes of filing a rectification application, the period of limitation of six months commences from the date of receipt of the order sought to be rectified by the assessee and not from the date of passing of the order

The second part of the Section requires that the Tribunal shall make such amendments if the mistake is brought to its notice by either party to the appeal before it. The party to the appeal can bring the fact of apparent mistake on record only after going through the order made by the tribunal. Therefore, to read that the period of limitation has to computed at any time within six months from the date of the order does not fit in either with legislative intent or the language employed by the provision.

15. There is another angle from which the matter can be approached. It is only the party to the appeal who finds that the order contains a mistake apparent from the record and is aggrieved by such mistake, would be in a position to move an application seeking rectification of the order. Therefore also, unless and until a party to the appeal is in a position to go through and study the order it would not be possible, nor can it be envisaged, that a party can claim to be aggrieved by the mistake apparent from the record. Hence, even on this count the period of limitation has to be read and understood so as to mean from the date of the receipt of the order

Read more ›

Posted on by editor
COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS: , ,
COUNSEL: ,
DATE: July 7, 2017 (Date of pronouncement)
DATE: July 29, 2017 (Date of publication)
AY: 2008-09
FILE: Click here to view full post with file download link
CITATION:
S. 145A: Irrespective of the method of accounting followed, the unutilized Cenvat credit does not constitute income and cannot be directly added to the closing stock. The assessee is entitled to follow the exclusive method and value the closing stock by excluding the modvat credit

Merely because the Modvat credit was irreversible credit offered to manufacturers upon purchase of duty paid raw materials, that would not amount to income which was liable to be taxed under the Act. It is also held that whichever method of accounting is adopted, the net result would be the same

Read more ›

Posted on by editor
COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS: , ,
COUNSEL:
DATE: July 6, 2017 (Date of pronouncement)
DATE: July 27, 2017 (Date of publication)
AY: 1982-83
FILE: Click here to view full post with file download link
CITATION:
S. 271(1)(c): If the basis on which penalty is initiated by the AO and the basis on which the quantum is confirmed on merits by the Tribunal are different, penalty cannot be levied

Explanation (1) to Section 271(1)(c) of the Act states that if a person fails to offer an explanation or offers an explanation which is found by the Assessing Officer to be false or such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then, the amount added or disallowed in computing the total income of such person, as a result thereof shall for the purpose of Clause (c) of the said SubSection be deemed to represent the income in respect of which particulars have been concealed. In the present case, no addition of the amount has been made, nor is a case of disallowance. Even the Tribunal had accepted the case of the assessee that he is carrying on the business of Draft Discounting. It is also observed that in many cases, the Tribunal has taken a view that in case of Draft Discounting, income is considered at Rs.1/per thousand and in some cases, at Rs.2/per thousand. In the present case, it considered to Rs.2/per thousand. The assessee, therefore, was not required to give any explanation as his case was accepted by the Tribunal in Appeal. As such, for all the above reasons, Explanation (1) to Section 271(1)(c) of the Act would not be attracted

Read more ›

Posted on by editor
COURT:
CORAM: ,
SECTION(S): ,
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: July 18, 2017 (Date of pronouncement)
DATE: July 27, 2017 (Date of publication)
AY: 2004-05
FILE: Click here to view full post with file download link
CITATION:
S. 115JB: The AO is not entitled to add to the "book profits" the amounts arising from sale of land which are directly credited to the Capital Reserve Account in the balance sheet rather than routing it through Profit and Loss Account in the manner provided as per Part II and Part III of Schedule VI to the Companies Act, 1956

The learned counsel for the Appellant submits that Tribunal was not justified in not accepting the reworking of the book profits by the Assessing Officer as per the provisions of Section 115JB of the Income Tax Act. The Assessee had directly credited the profit of Rs.2,84,84,000/ arising from sale of land to Capital Reserve Account in the balance sheet rather than routing it through Profit and Loss Account in the manner provided as per Part II and Part III of Schedule VI to the Companies Act, 1956

Read more ›

Posted on by editor
COURT:
CORAM: ,
SECTION(S): , , ,
GENRE:
CATCH WORDS: ,
COUNSEL: ,
DATE: July 17, 2017 (Date of pronouncement)
DATE: July 24, 2017 (Date of publication)
AY: -
FILE: Click here to view full post with file download link
CITATION:
S. 12AA(3): The CIT is not entitled to withdraw s. 12A registration on the ground that the activities of the trust are no longer charitable after the insertion of the proviso to s. 2(15). The registration can be withdrawn only if a finding is given that the activities of the institution are not genuine or that the activities carried out are not in consonance with the object of the institution

It is apparent from the record that the Commissioner has invoked its powers under Section 12(AA)(3) of the Act. The said powers are circumscribed by the limitations imposed under Sub Section 3 of Section 12AA of the Act. The Commissioner, nowhere has given the finding that the activities of the Respondent institution are not genuine one or that the said activity carried out are not in consonance with the object of the institution. The Commissioner has merely relied on proviso to Sub-Section 2 of Section 15 of the Act, as it stood then

Read more ›

Posted on by editor
COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: July 18, 2017 (Date of pronouncement)
DATE: July 22, 2017 (Date of publication)
AY: -
FILE: Click here to view full post with file download link
CITATION:
GST on legal services: Finance Ministry directed to explain legal sanctity of Press Release dated 15th July 2017 that all legal services will be governed by Reverse Charge Mechanism. In the interim no coercive action would be taken against advocates providing legal services for non compliance with any legal requirement under the CGST, DGST, or IGST Act

In view of the Press Release issued by the Ministry of Finance as shown to the Court today, and the instructions given to Mr. Narula to the effect that the legal position that existed under the Finance Act, 1994 as regard legal services being amenable to service tax under the reverse charge mechanism continuing even under the CGST, DGST or IGST Acts, till further orders, all legal services provided by advocates, law firms of advocates, or LLPs of advocates will be continued to be governed by the reverse charge mechanism unless of course any such legal service provider wants to take advantage of input tax credit and seeks to continue with the voluntary registration under Section 25 (3) of the CGST Act and the corresponding provisions of IGST or DGST Act

Read more ›

Posted on by editor
COURT:
CORAM: ,
SECTION(S): ,
GENRE:
CATCH WORDS:
COUNSEL:
DATE: October 3, 2016 (Date of pronouncement)
DATE: July 20, 2017 (Date of publication)
AY: 2003-04
FILE: Click here to view full post with file download link
CITATION:
S. 147: If the AO does not follow the law laid down in GKN Driveshafts 259 ITR 19, the reopening proceedings have to be quashed. There is no reason to restore the issue to the AO to pass a further/fresh order because it would give a licence to the AO to pass orders on reopening notice, without jurisdiction (without compliance of the law in accordance with the procedure), yet the only consequence, would be that in appeal, it would be restored to the AO for fresh adjudication after following the due procedure. This would lead to unnecessary harassment of the assessee by reviving stale/ old matters

Once the impugned order finds the Assessment Order is without jurisdiction as the law laid down by the Apex Court in GKN Driveshafts (India) Ltd., v/s. ITO 259 ITR 19 has not been followed, then there is no reason to restore the issue to the Assessing Officer to pass a further/fresh order. If this is permitted, it would give a licence to the Assessing Officer to pass orders on reopening notice, without jurisdiction (without compliance of the law in accordance with the procedure), yet the only consequence, would be that in appeal, it would be restored to the Assessing Officer for fresh adjudication after following the due procedure. This would lead to unnecessary harassment of the Assessee by reviving stale/ old matters

Read more ›

Posted on by editor
COURT:
CORAM: ,
SECTION(S): , , ,
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: July 14, 2017 (Date of pronouncement)
DATE: July 20, 2017 (Date of publication)
AY: 2003-04
FILE: Click here to view full post with file download link
CITATION:
S. 292C: An addition cannot be made on the basis of a handwritten loose paper which does not indicate if it pertains to the assessee and if AO has not brought on record any forensic evidence to prove the handwriting of the assessee. An addition cannot be made on the basis of suspicion and guesswork and without bringing corroborative material on record

The ITAT in the impugned order noted that the said document “does not indicate if it pertains to the assessee nor the address and location of the property is mentioned therein nor such property has been located by the AO during the assessment proceedings. The AO has also not brought on record any forensic evidence to prove the handwriting of the loose paper relied upon by him to make the addition, which is exclusively made on the basis of suspicion and guesswork. Even no corroborative material has brought on record by the AO to substantiate the addition nor the CIT(A) has called for any remand report seeking corroborative evidence, if any.” In the considered view of the Court, the addition of Rs. 49 lakhs to the returned income of the Assessee was based on surmises and conjectures and that too on the basis of a single document without making any further enquiry. No attempt was made by the AO to find out if in fact it constituted the construction expenses of any project of the aforementioned company of which the Assessee was a director

Read more ›