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DATE: March 31, 2015 (Date of pronouncement)
DATE: April 13, 2015 (Date of publication)
AY: 2007-08
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CITATION:
S. 253(2): There is no judicial impropriety in the CIT filing an appeal before the Tribunal against his own order as CIT(A) deciding the appeal in favour of the assessee

The plea of the assessee that there was judicial impropriety in the case was not established because the present Commissioner of Income Tax Administration as Commissioner of Income Tax (Appeals) had passed the order and decided the issues on the basis of various case laws. However, when acting as Commissioner of Income Tax Administration and in view of the facts that there was no legal precedent by the Hon’ble Supreme Court or by the Hon’ble jurisdictional High Court on the said issue, directed the Assessing Officer to file appeal against the impugned order. It is not a case where the present person was setting in judgment of the earlier order passed by him but was acting in the capacity of administrator wherein the issues were put before higher forum to adjudicate the same

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DATE: March 26, 2015 (Date of pronouncement)
DATE: April 6, 2015 (Date of publication)
AY: 2010-11
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CITATION:
Tranfer Pricing: While an adjustment for working capital investment is required, the transaction of sale of goods and receivables arising therefrom can be aggregated. If the differential impact of working capital has been factored in the pricing of the transaction of sale, no further adjustment can be made

Any separate adjustment on the pretext of outstanding receivables while accepting the comparables and transfer price of underlying transaction i.e. sale of goods by application of TNMM is unjustified. The differential impact of working capital of the assessee vis-a-vis its comparables has already been factored in the pricing/ profitability of the assessee and therefore, any further adjustment to the margins of the assessee on the pretext of outstanding receivables is unwarranted and wholly unjustified

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DATE: March 31, 2015 (Date of pronouncement)
DATE: April 6, 2015 (Date of publication)
AY: -
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CITATION:
S. 11/12A: Assessee's plea that poor patients do not come forward to avail of free medical treatment is not believable. The overall conduct of the assessee suggests that it is conducting its affairs in a commercial manner & not in a charitable manner

The plea of the assessee that the poor people do not come forward and avail free medical services, the assessee could not be blamed, is not sustainable. It is a matter of common knowledge that the poor patients are not given admission for treatment by private hospitals as they cater to only the elite class of the society. These private hospitals have been made in a five star style and they do not allow even the entry to the poor people in its corridors. In the government hospitals, the poor patients are lying in verandahs and in open space in wait for their turn for admission for days together and it is not believable that they will not come forward for treatment in the hospital providing all modern facilities free of cost

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DATE: April 1, 2015 (Date of pronouncement)
DATE: April 6, 2015 (Date of publication)
AY: 2006-07
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CITATION:
S. 68: Even if the issue share capital is bogus, no addition can be made in assessee's hands if identity of shareholder is established. Assessee is not required to show source of shareholder's funds

Once the identity of the share holder have been established, even if there is a case of bogus share capital, it cannot be added in the hands of company unless any adverse evidence is not on record. It is a certain law that the assessee is to prove the genuineness of transaction as well as the creditworthiness of the creditor must remain confined to the transactions which have taken place between the assessee and the creditor. It is not the business of assessee to find out the source of money of creditors

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DATE: March 30, 2015 (Date of pronouncement)
DATE: April 1, 2015 (Date of publication)
AY: 2011-12
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CITATION:
S. 206AA: Even in the absence of PAN payer not required to deduct TDS at 20% if case covered by DTAA

Section 206AA of the Act is not a charging section but is a part of a procedural provisions dealing with collection and deduction of tax at source. Therefore, where the tax has been deducted on the strength of the beneficial provisions of section DTAAs, the provisions of section 206AA of the Act cannot be invoked by the Assessing Officer to insist on the tax deduction @ 20%, having regard to the overriding nature of the provisions of section 90(2) of the Act

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DATE: March 27, 2015 (Date of pronouncement)
DATE: April 1, 2015 (Date of publication)
AY: 2010-11
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CITATION:
Addition towards bogus purchases cannot be made solely on the basis of statements of seller before sales-tax authorities. The AO has to conduct own enquiries and give assessee opportunity to cross-examine the seller

Where the AO has made addition merely on the basis of observations made by the Sales tax dept and has not conducted any independent enquiries for making the addition especially in a case where the assessee has discharged its primary onus of showing books of account, payment by way of account payee cheque and producing vouchers for sale of goods, such an addition could not be sustained

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DATE: November 28, 2014 (Date of pronouncement)
DATE: April 1, 2015 (Date of publication)
AY: 2010-11
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CITATION:
AO is not entitled to treat all purchases as bogus merely because sales-tax department has called the seller a "Hawala dealer". The AO ought to have verified the bank details of the assessee and the seller and other evidence before treating the purchases as bogus

The AO has made the addition as some of the suppliers of the assessee were declared Hawala dealer by the Sales tax Department. This may be a good reason for making further investigation but the AO did not make any further investigation and merely completed the assessment on suspicion. Once the assessee has brought on record the details of payments by account payee cheque, it was incumbent on the AO to have verified the payment details from the bank of the assessee and also from the bank of the suppliers to verify whether there was any immediate cash withdrawal from their account

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DATE: March 13, 2015 (Date of pronouncement)
DATE: March 31, 2015 (Date of publication)
AY: 1997-98
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CITATION:
S. 147/ 148: Failure to comply with the procedure prescribed in G.K.N. Drive Shaft (India) Ltd. vs. ITO 259 ITR 19 (SC) renders the assessment order invalid & void ab initio

The AO was required to first decide the objection of the assessee filed u/s 148 and serve a copy of the order on assessee. And after giving some reasonable time to the assessee for challenging his order, it is open to him to pass an assessment order. Since such compliance has not been made by the Assessing Officer in the present case, the assessment order is not valid and is void ab initio

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DATE: March 4, 2015 (Date of pronouncement)
DATE: March 31, 2015 (Date of publication)
AY: 2005-06, 2006-07
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CITATION:
S. 40(a)(ia): Merilyn Shipping 136 ITD 23 (SB) should be followed in view of approval by Allahabad HC and dismissal of SLP by Supreme Court. In any event as two views are possible, view in favour of assessee should be followed. Amounts already paid without TDS cannot be disallowed

Though there are contrary decisions of the other Hon’ble High Courts, i.e. Hon’ble Calcutta High Court and Hon’ble Gujarat High Court, in the light of the decision of the Hon’ble Allabahad High Court it can be said the there can be two views possible in this matter in which event the one which is in favour of the assessee has to be followed in the light of the decision of the Hon’ble Supreme Court in the case of Vegetable Products Ltd. 88 ITR 192

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DATE: March 4, 2015 (Date of pronouncement)
DATE: March 31, 2015 (Date of publication)
AY: 2007-08
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CITATION:
S. 271(1)(c): Disallowance of expenditure for failure to deduct TDS does not attract penalty

The disallowance of expenditure was attracted due to non-deduction of TDS and it cannot be said to be a case of concealment of income or furnishing of inaccurate particulars of income. The levy of penalty u/s.271(1)(c) of the Act is not attracted

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