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Posted on by editor
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DATE: February 2, 2016 (Date of pronouncement)
DATE: April 19, 2016 (Date of publication)
AY: 1992-93, 1993-94
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CITATION:
S. 244A(1)(b) is a residual provision under which interest on refund of excess payment of self-assessment tax is payable to the assessee. Such interest is also payable on the principles of restitution and unjust enrichment. Engineers India 373 ITR 377 (Del) is not good law

In these circumstances the principle of restitution would be squarely attracted and the revenue is also statutorily bound to pay interest u/s.244A(1)(b) to the assessee. The apex court in South Eastern Coalfield –Vs- State of M. P. reported in 2003 (8) SCC 648 has categorically held that once the doctrine of restitution is attracted, the interest is often a normal relief given. Restitution sometimes refers to “disgorging of something which has been taken” and sometimes refers to “compensation for injury done”

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Posted on by shreesh
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DATE: March 16, 2016 (Date of pronouncement)
DATE: April 15, 2016 (Date of publication)
AY: 2007-08 to 2012-13
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CITATION:
S. 220(6): An order disposing off a stay application has to objectively consider the prima facie case on merits, financial hardship and balance of convenience and give reasons for the rejection

We find that neither the Assessing Officer in the impugned orders dated 13th October, 2015 nor the Commissioner of Income Tax (Exemptions) in the order dated 25.2.2016 has dealt with the Petitioner’s primary contentions that the amounts received as lease premium and shown as deposits, cannot be taxed as income. This Court has time again set out parameters to be kept in mind while considering the stay application under Section 220(6) of the Act. the Commissioner of Income Tax (Exemptions) has completely misunderstood the scope of her powers and issues to be considered while disposing of the stay applications. In the above view, we set aside the orders dated 13th October, 2015 of the Assessing Officer and order dated 25th February, 2016… However, the Petitioner’s stay application is restored to the file of the Commissioner of Income Tax (Exemptions) for fresh disposal in accordance with law and after considering, prima facie, merits of the Petitioner’s case and in accordance with law

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Posted on by editor
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DATE: April 5, 2016 (Date of pronouncement)
DATE: April 15, 2016 (Date of publication)
AY: 2006-07
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CITATION:
S. 147: Though assessee claims that she is a non-resident & that onus is on the revenue to show that the money in the HSBC Geneva account is taxable in India, the non-cooperation with the Revenue by signing the consent waiver form shows that she has something to hide and makes it an unfit case for exercise of writ jurisdiction

In the normal course of human conduct if a person has nothing to hide and serious allegations /questions are being raised about the funds a person would make available the documents which would put to rest all questions which seem to arise in the mind of the Authorities. The conduct on the part of the Petitioner and her uncle, in not being forthcoming, to our mind leads us to the conclusion that this is not a fit case where we should exercise our extra ordinary writ jurisdiction and/or interfere with the orders passed by the authorities under the Act. If a person has nothing to hide, we believe the person would have cooperated in obtaining the Bank Statements

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Posted on by shreesh
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DATE: March 29, 2016 (Date of pronouncement)
DATE: April 13, 2016 (Date of publication)
AY: 2007-08
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CITATION:
S. 45/ 48: Deferred consideration dependent on a contingency does not accrue unless the contingency has occurred and is not liable to capital gains tax in year of transfer

The contention of the Revenue that the impugned order is seeking to tax the amount on receipt basis by not having brought it to tax in the subject assessment year, is not correct. This for the reason, that the amounts to be received as deferred consideration under the agreement could not be subjected to tax in the assessment year 2006-07 as the same has not accrued during the year. As pointed out above, accrual would be a right to receive the amount and the assessee alongwith its co-owners have not under the agreement dated 25th January, 2006 obtained a right to receive Rs.20 crores or any specified part thereof in the subject assessment year. In the above view there could be no occasion to bring the maximum amount of Rs. 20 crores, which could be received as deferred consideration to tax in the subject assessment year as it had not accrued to the assessee.

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Posted on by SUDHEENDRA B R
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DATE: August 24, 2015 (Date of pronouncement)
DATE: April 10, 2016 (Date of publication)
AY: 2005-06
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CITATION:
S. 147: An assessment cannot be reopened for the purpose of making a fishing and roving enquiry

Section 147/148 of the Act is not meant for reopening an already concluded assessment by first issuing notice and then proceeding to investigate and find out if there was any lacuna in the accounts. If such further investigation, by reopening a concluded assessment, is permitted, it, would give rise to fishing and rowing enquiries, because, in every case, the Assessing Officer can then issue notice for the purpose of investigation, and thus reopen any concluded assessment

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Posted on by editor
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DATE: March 18, 2016 (Date of pronouncement)
DATE: March 30, 2016 (Date of publication)
AY: 1997-98
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CITATION:
S. 37(1): Distinction between "application software" and "system software" explained. Expenditure on "application software" is revenue as it allows efficient carrying on of business and requires to be constantly updated due to rapid advancements in technology and increasing complexity of the features

The concept of enduring benefit must respond to the changing economic realities of the business. The expenses incurred by installation of software packages in the present computer world, which revolves on the modern communication technology, enables the assessee to carry on its business operations effectively, efficiently, smoothly and profitably. However, such software itself does not work on a standalone basis. It has to be fitted to a computer system to work. Such software enhances the efficiency of the operation. It is an aid in the manufacturing process rather than the tool itself. Therefore, the payment for such application software, though there is an enduring benefit, does not result in acquisition of any capital asset and it merely enhances the productivity or efficiency and hence, has to be treated as revenue expenditure

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Posted on by ananyakapoor
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DATE: March 3, 2016 (Date of pronouncement)
DATE: March 28, 2016 (Date of publication)
AY: -
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CITATION:
Section 147, reopening, reopening on factually erroneous premise, not permissible, change of opinion

Since the action of the Revenue was based on a factually erroneous premise, the Court is of the view that the reopening of the assessments for the said AYs is not sustainable in law. The Court is also satisfied that the requirement of the law, as explained by the Court in Commissioner of Income Tax. v. Kelvinator of India Limited (2010) 320 ITR 561 (SC), and reiterated in the later decisions, has not been fulfilled in the present case

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Posted on by editor
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DATE: March 17, 2016 (Date of pronouncement)
DATE: March 28, 2016 (Date of publication)
AY: 2012-13
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CITATION:
Strictures passed against high-handed and unfair approach of AO (IRS Officer) in refusing to give an acknowledgement of stay application. Chief CIT directed to ensure such behaviour is not repeated. Dept directed to nominate another AO to hear stay application

We find this conduct on the part of the Assessing Officer to accept a stay application and not immediately give acknowledgement of its receipt is unacceptable. The least that is expected of a civil servant is to be fair and civil. In the absence of the above, his conduct is not one becoming of an Officer belonging to the prestigious Indian Revenue Service. The least that is expected of an Officer is that when a person files an application / letter, which is accepted by him, an acknowledgement should be forthwith given to the party filing the application or letter. In case he refuses to accept the letter he should endorse on the letter / application the reason why it is not being accepted with a line or two for the refusal to accept. In case he does accept it and give an acknowledgment he can deal with the applications/ letters as is appropriate in accordance with law. We believe that what has happened in this case is an aberration. However, the Chief Commissioner of Income Tax would ensure that his Officers do not behave in such an high handed and unfair manner, not expected of civil servants

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Posted on by editor
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DATE: March 17, 2016 (Date of pronouncement)
DATE: March 28, 2016 (Date of publication)
AY: -
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CITATION:
S. 220(6): Dept directed to redeposit moneys collected illegally by attachment of assessee’s bank account during pendency of stay application. A order passed on a stay application must give reasons for the refusal to stay the demand

Thus, any action to recover taxes adopting coercive means is not permissible till the petitioner’s application for stay under Section 220(6) of the Act is disposed of. Therefore, the action of the Assessing Officer in attaching the petitioners’ bank accounts under Section 226(3) of the Act as well as subsequent withdrawal of the attached amounts from the bank accounts is without jurisdiction and bad in law. The petitioners have a statutory right to its stay application being heard and disposed of before the Revenue can adopt any coercive proceedings on the basis of the Notice of demand under Section 156 of the Act issued to the assessee. This action on the part of the Assessing Officer, if permitted, would lead Section 220(6) of the Act becoming redundant. In the above view, the Notice under Section 226(3) of the Act issued by the Assessing Officer to the petitioners’ bankers are quashed and set aside. Further, the Assessing Officer is directed to deposit the amount of Rs.7,59,185 in HDFC Bank, Fort, Mumbai and Rs.34,265/in State Bank of India, Byculla, Mumbai within a period of one week from today

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Posted on by editor
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DATE: March 7, 2016 (Date of pronouncement)
DATE: March 25, 2016 (Date of publication)
AY: 2009-10
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CITATION:
S. 195/ 40(a)(ia): Controversy whether in view of retrospective amendment to s. 195 to provide that s. 195 applies whether or not the non-resident person has a residence or place of business or business connection in India, even commission to non-resident agents for services rendered outside India is liable for TDS u/s 195 and has to suffer disallowance u/s 40(a)(ia) to be reconsidered by ITAT

In Gujarat Reclaim & Rubber Products Ltd it has been, inter alia, held that before effecting deduction at source one of the aspects to be examined is whether such income is taxable in terms of the Income Tax Act. This aspect has not been considered by the Tribunal while concluding that the Appellant has committed a default in not deducting the tax at source. As the said learned Division Bench Judgment was not available while passing the impugned order by the learned Tribunal, we find it appropriate, in the interest of justice, to quash and set aside the impugned order of the learned Tribunal to the extent it holds that the Appellant has defaulted in not deducting tax at source and remand the matter to the Tribunal to examine the said aspect afresh in the light of the judgment of this Court after hearing the parties in accordance with law

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