Home › Archive for Tribunal › Page 19
Category: Tribunal

Archive for the ‘Tribunal’ Category

This section is now closed. Click here for new judgements


Posted on by editor
COURT:
CORAM: ,
SECTION(S): , ,
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: July 2, 2018 (Date of pronouncement)
DATE: July 18, 2018 (Date of publication)
AY: 2004-05
FILE: Click here to view full post with file download link
CITATION:
S. 147/ 143(2): If the notice u/s 143(2) is issued prior to the furnishing of return by the assessee in response to notice u/s 148, the notice issued u/s 143(2) is not valid and the reassessment framed on the basis of said notice has to be quashed. S. 292BB does not save the assessment (All judgements considered)

The proposal to reopen an assessment under section 147 of the Income-tax Act, 1961, is to be based on reasons to be recorded by the Assessing Officer. Such reasons have to be communicated to the assessee. Merely because the assessee participates in the proceedings pursuant to such notice under section 148 of the Act, it does not obviate the mandatory requirement of the Assessing Officer having to issue to the assessee a notice under section 143(2) of the Act before finalizing the order of reassessment. A reassessment order cannot be passed without compliance with the mandatory requirement of notice being issued by the Assessing Officer to the assessee under section 143(2). The requirement of issuance of such notice is a jurisdictional one. It does go to the root of the matter as far as the validity of the reassessment proceedings under section 147/148 of the Act is concerned

Read more ›

Posted on by editor
COURT: ,
CORAM: , ,
SECTION(S):
GENRE:
CATCH WORDS: ,
COUNSEL: ,
DATE: July 9, 2018 (Date of pronouncement)
DATE: July 14, 2018 (Date of publication)
AY: 2012-13
FILE: Click here to view full post with file download link
CITATION:
S. 2(1A) Agricultural income: Mushroom is not a ‘vegetable’, ‘plant’, 'fruit' or ‘animal’ but is a ‘fungus’. Anything which is produced by performing basic operations on the soil is an "agricultural product" and the income therefrom is "agricultural income". The nature of the product and the fact that it is not a ‘plant’, ‘flower’, ‘vegetable’ or ‘fruit’ is irrelevant. The only relevant aspect is whether the production is by performing some basic operations on the soil (All judgements considered)

It is clear that we cannot restrict the word “product” to ‘plants’, ‘fruits’, ‘vegetables’ or such botanical life only. The only condition is that the “product” in question should be raised on the land by performing some basic operations. Mushroom produced by the assessee is a product. This product is raised on land/soil, by performing certain basic operation. The product draws nourishment from the soil and is naturally grown, by such operation on soil which require expenditure of “human skill and labour”. The product so raised has utility for consumption, trade and commerce and hence would qualify as an “agricultural product” the sale of which gives rise to agricultural income.

Read more ›

Posted on by editor
COURT:
CORAM:
SECTION(S): , ,
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: June 19, 2018 (Date of pronouncement)
DATE: July 10, 2018 (Date of publication)
AY: 2007-08
FILE: Click here to view full post with file download link
CITATION:
S. 147/148: If there is nothing in the recorded reasons to suggest that the income chargeable to tax which has escaped assessment is Rs. one lakh or more, the notice issued u/s 148 of the Act beyond four years of the end of the relevant assessment year is invalid

The second point which is very important is that in regard to the cases falling under section 34(1A), action can be taken only where the income which has escaped assessment is likely to amount to Rs.1 lakh or more. In other words, it is only in regard to cases where the escaped income is of a high magnitude that the restriction of the period of limitation has been removed. Since no reasons were recorded that the escaped income is likely to be Rs.1 lac or more so that the Chief Commissioner or Commissioner may record his satisfaction under section 151, the initiation of reassessment proceedings after more than four years was clearly barred by time

Read more ›

Posted on by editor
COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS: , ,
COUNSEL:
DATE: June 27, 2018 (Date of pronouncement)
DATE: July 9, 2018 (Date of publication)
AY: 2012-13
FILE: Click here to view full post with file download link
CITATION:
S. 23 ALV: Unsold flats which are held by a builder as stock in trade cannot be brought to tax under the head 'income from house property'. They are only assessable as business profits when sold (All judgements considered)

In the case on hand before us it is an undisputed fact that both assessees have treated the unsold flats as stock in trade in the books of account and the flats sold by them were assessed under the head ‘income from business’. Thus, respectfully following the above said decisions we hold that the unsold flats which are stock in trade when they were sold they are assessable under the head ‘income from business’ when they are sold and therefore the AO is not correct in bringing to tax notional annual letting value in respect of those unsold flats under the head ‘income from house property’. Thus, we direct the AO to delete the addition made under Section 23 of the Act as income from house property.”

Read more ›

Posted on by editor
COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: June 19, 2018 (Date of pronouncement)
DATE: July 9, 2018 (Date of publication)
AY: 2006-07
FILE: Click here to view full post with file download link
CITATION:
S. 68 HSBC Black Money: The assessee being non-resident is not liable to tax in respect of money lying in the foreign country unless the AO bring something on record to show that assessee has not fulfilled the test of taxability of non-resident under the provisions of the Act

We found that CIT(A) as dealt with the issue threadbare and after applying judicial pronouncements laid down by High Court and Supreme Court reached to the conclusion that assessee being non-resident is not liable to tax in respect of money lying in the foreign country unless AO bring something on record to show that assessee has not fulfilled the test of taxability of non-resident under the provisions of the Act. The detailed finding so recorded by CIT(A) are as per material on record and do not require any interference on our part

Read more ›

Posted on by editor
COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: June 1, 2018 (Date of pronouncement)
DATE: July 9, 2018 (Date of publication)
AY: 2003-04
FILE: Click here to view full post with file download link
CITATION:
S. 68 HSBC Black Money: The suspicion of the AO that the deposits in the foreign bank account have Indian origin is not unfounded because the assessee used his Indian passport to open the a/c. The intent of the assessee is not above board. Matter requires investigation because the narrations in the bank accounts do not give any clue that these amounts originate from India

At the time of opening of the bank account in Geneva, the assessee was a US citizen and resident and he was holding a US passport. Still the assessee chose to open the account in HSBC bank account in Geneva by using the address and proof thereof by way of his Indian passport which was no longer valid when he has accepted the US nationality by surrendering Indian citizenship. Here the assessee instead of surrendering his invalid Indian passport has used it to open a bank account in HSBC bank, Geneva. Further, the assessee is not responding that this bank account has been disclosed to the US tax authorities. In such circumstances, the suspicion that the deposits in this bank account have Indian origin is not unfounded

Read more ›

Posted on by editor
COURT:
CORAM:
SECTION(S): , ,
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: June 19, 2018 (Date of pronouncement)
DATE: July 7, 2018 (Date of publication)
AY: 2008-09
FILE: Click here to view full post with file download link
CITATION:
S. 147/ 151: If the CIT merely states "Yes, I am satisfied" while granting sanction to the reopening, it means that the sanction is merely mechanical and he has not applied independent mind. There is not an iota of material on record as to what documents he had perused and what were the reasons for his being satisfied to accord the sanction to initiate the reopening of assessment (All judgements referred)

Apparently, from the approval recorded and words used that “Yes. I am satisfied.”, it has proved on record that the sanction is merely mechanical and Addl. CIT has not applied independent mind while according sanction as there is not an iota of material on record as to what documents he had perused and what were the reasons for his being satisfied to accord the sanction to initiate the reopening of assessment u/s 148 of the Act

Read more ›

Posted on by editor
COURT:
CORAM:
SECTION(S): , ,
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: July 4, 2018 (Date of pronouncement)
DATE: July 7, 2018 (Date of publication)
AY: 2013-14
FILE: Click here to view full post with file download link
CITATION:
S. 50C is a deeming provision and applies only to the transfer of land or building. It does not apply to the transfer of "booking rights" and to right to purchase flats in a building

It is essential that for application of Sec. 50C that the transfer must be of a capital asset, being land or building or both. If the capital asset under transfer cannot be described as “land or building or both” then section 50C will cease to apply. Booking advance cannot be equated with the capital asset and therefore section 50C cannot be invoked

Read more ›

Posted on by editor
COURT:
CORAM: ,
SECTION(S): ,
GENRE:
CATCH WORDS: , ,
COUNSEL:
DATE: May 30, 2018 (Date of pronouncement)
DATE: July 7, 2018 (Date of publication)
AY: 2010-11
FILE: Click here to view full post with file download link
CITATION:
S. 45/ 48: Portfolio Management Scheme (PMS) fees paid by the assessee to the PMS Manager neither falls under the category of transfer fees nor cost of acquisition/improvement. Consequently it is not deductible while computing capital gains from sale of the shares (All judgements referred)

In the instant case, the deduction on account of fees paid for PMS had been claimed by the assessee as deduction in computing capital gains arising from sale of shares and securities. He however had failed to explain as to how the said fees could be considered as cost of acquisition of the shares and securities or the cost of any improvement thereto. He had also failed to explain as to how the said fees could be treated as expenditure incurred wholly and exclusively in connection with sale of shares and securities. On the other hand, the basis on which the said fees was paid by the assessee showed that it had no direct nexus with the purchase and sale of shares and as rightly contended by the revenue, the said fees was payable by the assessee going by the basis thereof even without there being any purchase or sale of shares in a particular period

Read more ›

Posted on by editor
COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS: ,
COUNSEL: ,
DATE: June 29, 2018 (Date of pronouncement)
DATE: July 5, 2018 (Date of publication)
AY: 2014-15
FILE: Click here to view full post with file download link
CITATION:
S. 56(2)(viia) is a counter evasion mechanism to prevent laundering of unaccounted income under the garb of gifts. The primary condition for invoking S. 56(2)(viia) is that the asset gifted should become a “capital asset” and property in the hands of recipient. If the assessee-company has purchased shares under a buyback scheme and the said shares are extinguished by writing down the share capital, the shares do not become capital asset of the assessee-company and hence s. 56(2)(viia) cannot be invoked in the hands of the assessee company

The provisions of sec. 56(2)(viia) should be applicable only in cases where the receipt of shares become property in the hands of recipient and the shares shall become property of the recipient only if it is “shares of any other company”. In the instant case, the assessee herein has purchased its own shares under buyback scheme and the same has been extinguished by reducing the capital and hence the tests of “becoming property” and also “shares of any other company” fail in this case. Accordingly we are of the view that the tax authorities are not justified in invoking the provisions of sec. 56(2)(viia) for buyback of own shares

Read more ›