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DATE: March 4, 2015 (Date of pronouncement)
DATE: June 19, 2015 (Date of publication)
AY: 2007-08
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CITATION:
S. 40(a)(ia) second proviso is curative and retrospective. Legitimate business expenditure cannot be disallowed if the payee has paid tax thereon

The second proviso to section 40(a)(ia) of the Act inserted by the Finance Act, 2012 is curative in nature intended to supply an obvious omission, take care of an unintended consequence and make the section workable. Section 40(a)(ia) without the second proviso resulted in the unintended consequence of disallowance of legitimate business expenditure even in a case where the payee in receipt of the income had paid tax. It has for long been the legal position that if the payee has paid tax on his income, no recovery of any tax can be made from the person who had failed to deduct the income tax at source from such amount

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DATE: June 17, 2015 (Date of pronouncement)
DATE: June 19, 2015 (Date of publication)
AY: 2010-11
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CITATION:
S. 11, 68, 115BBC: Law on taxing of "anonymous donations" received by a charitable trust explained

To be excluded from the definition of expression “anonymous donation” the person receiving the voluntary contributions referred to in section 2(24) (iia) is required to maintain a record of identity indicating the name and address of the contributor and such other particulars as may be prescribed. Since no other particulars have been prescribed under the provisions the person receiving the donation is under obligation to maintain the identity of donors indicating the name and address only

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DATE: June 9, 2015 (Date of pronouncement)
DATE: June 15, 2015 (Date of publication)
AY: 2013-14
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CITATION:
S. 234E: Prior to the amendment to s. 200A w.e.f. 01.06.2015, the fee for default in filing TDS statements cannot be recovered from the assessee-deductor

Section 200A was amended by the Finance Act 2015 with effect from 1st June 2015 to provide that in the course of processing of a TDS statement and issuance of intimation under section 200A in respect thereof, an adjustment could also be made in respect of the fee computed in accordance with the provisions of section 234E. As the law stood prior to 1st June 2015, there was no enabling provision therein for raising a demand in respect of levy of fees under section 234E

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DATE: June 11, 2015 (Date of pronouncement)
DATE: June 15, 2015 (Date of publication)
AY: 2009-10
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CITATION:
S. 11/ 12AA(3): The Proviso to s. 2(15) has no bearing on the grant or denial of registration. The applicability of the proviso has to be evaluated on a year to year basis and it only affects the grant of exemption u/s 11

The impact of the proviso to Section 2(15) being hit by the assessee will be that, to that extent, the assessee will not be eligible for exemption under section 11 of the Act. The mere fact that the assessee is granted registration under section 12 A or 12AA as a charitable institution will have no bearing on this denial of registration. As a corollary to this legal position, the fact that the objects of the assessee may be hit by the proviso to section 2(15) cannot have any bearing on the grant, denial or withdrawal of the registration under section 12AA

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DATE: June 10, 2015 (Date of pronouncement)
DATE: June 15, 2015 (Date of publication)
AY: 2007-08 to 2010-11
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CITATION:
S. 194C: Only payments "in pursuance of a contract" are subject to TDS. Payments made under a legal obligation are not covered

It is only when payments are made “in pursuance of a contract” that the provisions of section 194C come into play. The contract may be oral or written, express or implied but there must be a contract nevertheless. In the present case, the payment is on account of legal obligation under section 24(1) of the Punjab Water Supply and Sewerage Board Act 1976. Accordingly, the provisions of section 194C did not come into play

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DATE: May 13, 2015 (Date of pronouncement)
DATE: June 10, 2015 (Date of publication)
AY: 2006-07
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CITATION:
S. 37(1): Even if no business is carried, the expenditure incurred to maintain the corporate entity has to be allowed as a deduction

There is no doubt that the assessee is a corporate entity. Even if it is not carrying on any business activity it has to incur some expenditure to keep up its corporate entity. Therefore expenditure incurred by it has to be allowed

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DATE: May 29, 2015 (Date of pronouncement)
DATE: June 10, 2015 (Date of publication)
AY: 2005-06
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CITATION:
S. 2(22)(e): loans and advances given for business transaction between the parties does not fall within the definition of “deemed dividend”

Payments made by a company through a running account in discharge of its existing debts or against purchases or for availing services, such payments made in the ordinary course of business carried on by both the parties could not be treated as deemed dividend for the purpose of section 2(22)(e). The deeming provisions of law contained in section 2(22)(e) apply in such cases where the company pays to a related person an amount as advance or a loan as such and not in any other context. The law does not prohibit business transactions between related concerns, and, therefore, payments made in the ordinary course of business cannot be treated as loans and advances

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DATE: May 29, 2015 (Date of pronouncement)
DATE: June 2, 2015 (Date of publication)
AY: 2008-09
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CITATION:
S. 143(3)/153A: Addition made solely on the basis of a disclosure and without any incriminating material is not sustainable if facts show that disclosure was under duress. CBDT Instruction dated 10.03.2003relied upon

A perusal of the CBDT instruction reveals that even Board is aware of such laconic disclosures and expects its officers to rely on incriminating evidence. Thus CBDT also is not in favor of search assessments being based only on such disclosures; it wants them to be based on incriminating material. In view the facts, circumstances, CBDT instruction and various case laws relied on by the assessee we are unable to uphold the additions solely on the basis of disclosure which doesn’t meet the eye and have been held by us to involuntary

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DATE: May 22, 2015 (Date of pronouncement)
DATE: June 2, 2015 (Date of publication)
AY: 2007-08
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CITATION:
(i) S. 48: Interest paid on moneys borrowed to acquire assets cannot be treated as the 'cost of acquisition' of the asset, (ii) S. 41(1): Unclaimed liabilities are deemed to have been remitted/ ceased and are taxable in the year of discovery by AO

The interest cost is toward the retention of the borrowing and, concomitantly, the retention or the holding of the asset under reference, i.e., is a function of the holding period. It is, thus, rightly described as a holding cost or a period cost, depending upon how one may look at it. This difference is again of relevance in-as-much as the asset may be sold/realized without the repayment of the debt, so that the interest cost continues independent of the asset. Again, the debt may be repaid/liquidated, extinguishing the interest cost, while the holding of the asset continues. That is, even the holding cost relationship is not automatic or follows as a natural corollary. The two, i.e., the interest cost and cost of the asset, are in any case independent of each other

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DATE: April 30, 2015 (Date of pronouncement)
DATE: June 2, 2015 (Date of publication)
AY: 2010-11
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CITATION:
S. 11(1)(a): Charitable institutions are eligible to a blanket deduction of 15% of the gross receipts without being required to satisfy any condition

The decision of the Hon’ble Supreme Court in A.L.N Rao Charitable Trust reported in 216 ITR 697(SC) clearly held that there is a blanket exemption with regard to the 25% (now 15%) of gross receipts as per second part of Section 11(1)(a) of the Income Tax Act. This exemption of 15% is not dependent on any other condition except that the trust or society should be registered u/s 12AA of the Income Tax Act. The only issue to be examined here is whether the provisions of section 11(1) (a) and 11(2) have been since amended and if so, whether the aforesaid decision would apply to the amended provisions also?

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