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DATE: June 18, 2020 (Date of pronouncement)
DATE: June 20, 2020 (Date of publication)
AY: 2006-07
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CITATION:
S. 54F: In determining whether the assessee owns more than one residential property, the usage of the property has to be considered. If an apartment is sanctioned for residential purposes but is in fact being used for commercial purposes as a serviced apartment, it has to be treated as commercial property. Alternatively, several independent residential units in the same building have to be treated as one residential unit and there is no impediment to allowance of exemption u/s 54F(1)

The usage of the property has to be considered for determining whether the property in question is a residential property or a commercial property. It is not in dispute that the aforesaid two apartments are being put to commercial use and therefore, the aforesaid apartments cannot be treated as residential apartments. The contention of the revenue that the apartments cannot be taxed on the basis of the usage does not deserve acceptance in view of decisions of Kerala, Delhi, Allahabad, Calcutta and Hyderabad High Courts with which we respectfully concur. 11. Alternatively, we hold that assessee even otherwise is entitled to the benefit of exemption under Section 54F(1) of the Act as the assessee owns two apartments of 500 square feet in same building and 17 therefore, it has to be treated as one residential unit. The aforesaid fact cannot be permitted to act as impediment to allowance of exemption under Section 54F(1) of the Act

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DATE: (Date of pronouncement)
DATE: September 26, 2018 (Date of publication)
AY: 2010-11
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CITATION:
Entire law on "real income theory" and distinction between "application of income" vs. "diversion of income by overriding title" explained with reference to case laws. Law on whether if an amount is not treated as "diversion of income", it can be allowed as "business expenditure" u/s 37(1) or as a "trading loss" u/s 29 also explained. Issue of “Base Erosion and Profit Shifting” (BEPS) also raised in the context of "tax avoidance vs. tax evasion" and diversion of income by a MNC

Courts and the Tax Authorities can look into the real purpose of the commercial arrangements and transactions to reach the truth and the transactions having the sole purpose of tax avoidance may be held to be having no effect on the actual tax liability of the tax payer. Book entries and Method of Accounting is not determinative and conclusive for deciding the computation of ‘taxable income’ in the hands of the Assessee though they may be relevant to be considered. “Diversion of income by transfer of overriding title at source” should normally have the support of the statutory requirements or some decretal binding character of Courts of law and even though the private contractual obligations can also bring about such “diversion of income at source” but in this last sphere of private contractual obligations, the Courts and the Income Tax Authorities have to examine such aspects carefully in comparison to the above two other categories of statutory requirements and the Court decrees and then examine the real purport and object of such private arrangements and Contracts

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DATE: August 26, 2016 (Date of pronouncement)
DATE: October 10, 2016 (Date of publication)
AY: -
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S. 200A/234E: As the amendment to s. 200A has come into effect on 1.6.2015 and has prospective effect, no computation of fee for the demand or the intimation for the fee u/s 234E can be made for TDS deducted prior to 1.6.2015. Hence, the demand notices u/s 200A for payment of fee u/s 234E is without authority of law

It is hardly required to be stated that, as per the well established principles of interpretation of statute, unless it is expressly provided or impliedly demonstrated, any provision of statute is to be read as having prospective effect and not retrospective effect. Under the circumstances, we find that substitution made by clause (c) to (f) of sub-section (1) of Section 200A can be read as having prospective effect and not having retroactive character or effect. Resultantly, the demand under Section 200A for computation and intimation for the payment of fee under Section 234E could not be made in purported exercise of power under Section 200A by the respondent for the period of the respective assessment year prior to 1.6.2015. However, we make it clear that, if any deductor has already paid the fee after intimation received under Section 200A, the aforesaid view will not permit the deductor to reopen the said question unless he has made payment under protest.

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DATE: July 3, 2015 (Date of pronouncement)
DATE: November 16, 2015 (Date of publication)
AY: 2004-05
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S. 154: Even if assessee offers interest income as "Other Sources" and claims set-off of brought forward business loss against it u/s 72, AO is not permitted to rectify as issue is debatable

The Assessing Officer sought to rectify the original assessment order on the ground that carried forward business loss was to the tune of Rs. 24,23,760/- and same had been set off against the total income which was inclusive of the income earned by the assessee under the head “Income from Other Sources” and “Income from House Property” as declared by him in the return of income and carried forward loss could have been set off against “Business Income” only. As already observed by us herein above the issue as to whether the said income earned by way of interest on Fixed Deposits, NSCs, would be available to the assessee to seek for set off as business loss or not under section 72 of the Act is a debatable issue and as such we are of the considered view that said issue could not have been gone into in a proceeding under section 154 of the Act

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DATE: October 7, 2015 (Date of pronouncement)
DATE: October 29, 2015 (Date of publication)
AY: 2000-01
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CITATION:
S. 79: As the purpose of the provision is to prevent misuse of losses by transferring ownership, it should be restricted to cases of transfer of 'beneficial shareholding'. A transfer of shares of the loss-making company by the shareholder-company to its subsidiary is not hit by s. 79

The purpose of Section 79 of the Act would be that benefit of carry forward and set-off of business losses for previous years of a company should not be misused by any new owner, who may purchase the shares of the Company, only to get the benefit of set-off of business losses of the previous years, which may bear profits in the subsequent years after the new owner takes over the Company. For such purpose, it is provided under the said Section that 51% of the voting power which was beneficially held by a person or persons should continue to be held, then only such benefit could be given to the Company

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DATE: August 18, 2015 (Date of pronouncement)
DATE: August 26, 2015 (Date of publication)
AY: -
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CITATION:
S. 194C/ 194J TDS: Even if the supply contract is an integral part of a composite contract on single sale responsible basis, there is no obligation to deduct TDS. Service contracts, not being professional services, are not covered by s. 194J

The whole object of introduction of that Section is to deduct tax in respect of payments made for works contract. No division is, therefore, permissible in respect of a contract for supply of materials for carrying out the work. It is in a case of distinct contracts. The contract for supply of material being a separate and distinct contract, no division is permissible under Section 194C of the Act

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