Search Results For: Arvind Datar


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DATE: April 3, 2020 (Date of pronouncement)
DATE: April 3, 2020 (Date of publication)
AY: 2008-09
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S. 147/ 148 Reopening: (i) Merely because the original assessment is a detailed one, the powers of the AO to reopen u/s 147 is not affected, (ii) Information which comes to the notice of the AO during proceedings for subsequent AYs can definitely form tangible material to reopen the assessment, (iii) As regards "full & true disclosure of material facts", the assessee has the duty to disclose the "primary facts". It is not required to disclose the "secondary facts". The assessee is also not required to give any assistance to the AO by disclosure of other facts. It is for the AO to decide what inference should be drawn from the facts, (iv) If the AO intends to rely upon the second Proviso to s. 148 for the extended period of 16 years limitation, the same should be stated either in the notice or in the reasons in support of the notice. It cannot be done in the order rejecting the objections or at a later stage (All imp judgements considered)

In our view the assessee disclosed all the primary facts necessary for assessment of its case to the assessing officer. What the revenue urges is that the assessee did not make a full and true disclosure of certain other facts. We are of the view that the assessee had disclosed all primary facts before the assessing officer and it was not required to give any further assistance to the assessing officer by disclosure of other facts. It was for the assessing officer at this stage to decide what inference should be drawn from the facts of the case. In the present case the assessing officer on the basis of the facts disclosed to him did not doubt the genuiness of the transaction set up by the assessee. This the assessing officer could have done even at that stage on the basis of the facts which he already knew. The other facts relied upon by the revenue are the proceedings before the DRP and facts subsequent to the assessment order, and we have already dealt with the same while deciding Issue No.1. However, that cannot lead to the conclusion that there is nondisclosure of true and material facts by the assessee

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DATE: July 25, 2019 (Date of pronouncement)
DATE: July 27, 2019 (Date of publication)
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S. 35AC(7) is prospective in nature. A plea of promissory estoppel is not available to an assessee against the exercise of legislative power nor any vested right accrues to an assessee in the matter of grant of any tax concession to him. In a taxing statute, a plea based on equity or/and hardship is not legally sustainable. The constitutional validity of any provision and especially taxing provision cannot be struck down on such reasoning. In tax matters, neither any equity nor hardship has any role to play while deciding the rights of any taxpayer qua the Revenue

As rightly argued by the learned counsel for the respondent (Revenue), a plea of promissory estoppel is not available to an assessee against the exercise of legislative power and nor any vested right accrues to an assessee in the matter of grant of any tax concession to him. In other words, neither the appellant nor the assessee has any right to set up a plea of promissory estoppel against the exercise of legislative power

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DATE: July 8, 2019 (Date of pronouncement)
DATE: July 20, 2019 (Date of publication)
AY: -
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S. 80IB(10)(a): There shall be stay of judgement in Global Reality 379 ITR 107 (MP) where it was held that issuance of completion certificate, after the cut off date by the Local Authority but, mentioning the date of completion of project before the cut off date, does not fulfill the condition specified in clause (a) of Section 80IB (10) read with Explanation (ii) thereunder

We accordingly hold that issuance of completion certificate, after the cut off date by the Local Authority but, mentioning the date of completion of project before the cut off date, does not fulfill the condition specified in clause (a) of Section 80IB (10) read with Explanation (ii) thereunder. We reject the argument of the assessee that the effect of amended clause (a) of sub-Section 10 of Section 80IB, which has come into force with effect from 1st April, 2005, has retrospective effect or that it is unjust in any manner or incapable of compliance at all

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DATE: February 20, 2019 (Date of pronouncement)
DATE: February 22, 2019 (Date of publication)
AY: -
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S. 80-IC: An assessee availing exemption of 100% tax on setting up of a new industry, which is admissible for 5 years, and either on the expiry of 5 years or thereafter (but within 10 years) from the date when these assessees started availing exemption, they carried out substantial expansion of its industry, from that year the assessees become entitled to claim exemption @ 100% again (Classic Binding Industries 407 ITR 429 held not good law and reversed)

We have no hesitation to accept this mistake which occurred in Commissioner of Income Tax vs. M/s. Classic Binding Industries 407 ITR 429. The Court specifically dealt with ‘initial assessment year’ and came into conclusion that there cannot be two initial assessment years within a span of 10 years which is the maximum period for allowing deduction as per sub-section (6) of Section 80-IC. As the issue directly concerned with initial assessment year, its definition contained in that very Section was missed out. To that extent, there is an error in the judgment dated 20th August, 2018 in Classic Binding Industries case

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DATE: September 10, 2018 (Date of pronouncement)
DATE: September 13, 2018 (Date of publication)
AY: 2011-12
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S. 147/ 56(2)(vii): Law explained on (i) reopening of assessment by issue of s. 148 notice at the 11th hour and based on "stale" material, (ii) nature of sanction to be accorded by the CIT u/s 151 and (iii) scope of s. 56(2)(vii) and whether difference between 'fair market value' and face value of unquoted shares can be assessed as income. All important judgements referred

When the assessees acquired the shares through allotment, the taxing event, as it were, occurred on account of the differential between what is said to be market value and what was value paid by them. As a result, it is held that the primary obligation to disclose about the acquisition of shares, was not relieved by virtue of the notification under Section 25 (6) of the (now repealed) Companies Act, 1956. It is, therefore, held that prima facie, there is no merit in this argument; it cannot be said that the effect of the exemption notification was to relieve the assessees from their obligation to disclose about the acquisition of the shares, which appears to be the taxing event (on account of the differential between the acquisition cost and the fair market value).

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DATE: March 13, 2018 (Date of pronouncement)
DATE: March 14, 2018 (Date of publication)
AY: -
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Foreign law firms and foreign lawyers cannot practice profession of law in India either in the litigation or in non-litigation side though they can "fly in and fly out" for the purpose of giving legal advice to their clients in India regarding foreign law. The expression “fly in and fly out” will only cover a casual visit not amounting to “practice”. If the Rules of Institutional Arbitration apply or the matter is covered by the provisions of the Arbitration Act, foreign lawyers are not debarred from conducting arbitration proceedings arising out of international commercial arbitration but will be governed by code of conduct applicable to the legal profession in India. B.P.O. Companies providing wide range of customized and integrated services and functions to its customers like word processing, secretarial support, transcription services, proof reading services, travel desk support services, etc. may come within the purview of the Advocates Act, 1961 or the Bar Council of India Rules if in pith and substance the services amount to practice of law

We uphold the view of the Bombay High Court and Madras High Court in para 63 (i) of the judgment to the effect that foreign law firms/companies or foreign lawyers cannot practice profession of law in India either in the litigation or in nonlitigation side. We, however, modify the direction of the Madras High Court in Para 63(ii) that there was no bar for the foreign law firms or foreign lawyers to visit India for a temporary period on a “fly in and fly out” basis for the purpose of giving legal advice to their clients in India regarding foreign law or their own system of law and on diverse international legal issues. We hold that the expression “fly in and fly out” will only cover a casual visit not amounting to “practice”. In case of a dispute whether a foreign lawyer was limiting himself to “fly in and fly out” on casual basis for the purpose of giving legal advice to their clients in India regarding foreign law or their own system of law and on diverse international legal issues or whether in substance he was doing practice which is prohibited can be determined by the Bar Council of India. However, the Bar Council of India or Union of India will be at liberty to make appropriate Rules in this regard including extending Code of Ethics being applicable even to such cases

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DATE: June 9, 2017 (Date of pronouncement)
DATE: June 10, 2017 (Date of publication)
AY: -
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S. 139AA (inserted by the Finance Act 2017) which mandates quoting of Aadhaar number with the PAN is constitutionally valid under Articles 14 and 19(1)(g). The proviso to s. 139AA(2) (which deems the PAN void ab initio if the Aadhaar number is not quoted) is also valid. However, as the challenge under Article 21 is pending before the Constitution Bench, a partial stay is granted. Those who are already enrolled under the Aadhaar scheme should comply with s. 139AA (2). Those who are not enrolled need not do so for the time being and their PAN will not be treated as invalid. The said proviso to s. 139AA(2) cannot be read retrospectively as it takes away vested rights. It will only have prospective effect

Having said so, it becomes clear from the aforesaid discussion that those who are not PAN holders, while applying for PAN, they are required to give Aadhaar number. This is the stipulation of sub-section (1) of Section 139AA, which we have already upheld. At the same time, as far as existing PAN holders are concerned, since the impugned provisions are yet to be considered on the touchstone of Article 21 of the Constitution, including on the debate around Right to Privacy and human dignity, etc. as limbs of Article 21, we are of the opinion that till the aforesaid aspect of Article 21 is decided by the Constitution Bench a partial stay of the aforesaid proviso is necessary. Those who have already enrolled themselves under Aadhaar scheme would comply with the requirement of sub-section (2) of Section 139AA of the Act. Those who still want to enrol are free to do so. However, those assessees who are not Aadhaar card holders and do not comply with the provision of Section 139(2), their PAN cards be not treated as invalid for the time being. It is only to facilitate other transactions which are mentioned in Rule 114B of the Rules. We are adopting this course of action for more than one reason. We are saying so because of very severe consequences that entail in not adhering to the requirement of sub-section (2) of Section 139AA of the Act. A person who is holder of PAN and if his PAN is invalidated, he is bound to suffer immensely in his day to day dealings, which situation should be avoided till the Constitution Bench authoritatively determines the argument of Article 21 of the Constitution. Since we are adopting this course of action, in the interregnum, it would be permissible for the Parliament to consider as to whether there is a need to tone down the effect of the said proviso by limiting the consequences

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DATE: April 24, 2017 (Date of pronouncement)
DATE: April 26, 2017 (Date of publication)
AY: -
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Article 5 India-UK DTAA: Entire law on what constitutes a "permanent establishment" in the context of the 'Formula One Grand Prix of India' event explained after extensive reference to case laws, OECD Model Convention and commentary by Philip Baker, Klaus Vogel and other experts

The term “place of business” is explained as covering any premises, facilities or installations used for carrying on the business of the enterprise whether or not they are used exclusively for that purpose. It is clarified that a place of business may also exist where no premises are available or required for carrying on the business of the enterprise and it simply has a certain amount of space at its disposal. Further, it is immaterial whether the premises, facilities or installations are owned or rented by or are otherwise at the disposal of the enterprise. A certain amount of space at the disposal of the enterprise which is used for business activities is sufficient to constitute a place of business. No formal legal right to use that place is required. Thus, where an enterprise illegally occupies a certain location where it carries on its business, that would also constitute a PE. Some of the examples where premises are treated at the disposal of the enterprise and, therefore, constitute PE are: a place of business may thus be constituted by a pitch in a market place, or by a certain permanently used area in a customs depot (e.g. for the storage of dutiable goods). Again the place of business may be situated in the business facilities of another enterprise. This may be the case for instance where the foreign enterprise has at its constant disposal certain premises or a part thereof owned by the other enterprise. At the same time, it is also clarified that the mere presence of an enterprise at a particular location does not necessarily mean that the location is at the disposal of that enterprise

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DATE: December 8, 2016 (Date of pronouncement)
DATE: December 19, 2016 (Date of publication)
AY: -
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S. 147/ 148: A Writ Petition to challenge the issue of a reopening notice u/s 148 is maintainable as per the law laid down in Calcutta Discount 41 ITR 191 (SC). The law laid down in Chhabil Dass Agarwal 357 ITR 357 (SC) deals with the maintainability of a Writ to challenge the reassessment order and does not apply to a challenge to the reassessment notice

The High Courts dismissed the writ petitions preferred by the assessee challenging the issuance of notice under Section 148 of the Income Tax Act, 1961 and the reasons which were recorded by the Assessing Officer for reopening the assessment. The writ petitions were dismissed by the High Courts as not maintainable. The aforesaid view taken is contrary to the law laid down by this Court in Calcutta Discount Limited Company vs. Incom Tax Officer, Companies District I, Calcutta & Anr. [(1961) 41 ITR 191 (SC)]

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DATE: July 1, 2015 (Date of pronouncement)
DATE: July 4, 2015 (Date of publication)
AY: 1985-86
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S. 44BB vs. 9(1)(vii)/44D: The "pith and substance" test has to be applied to determine the dominant purpose of each agreement. If the dominant purpose is mining, the income is assessable only u/s 44BB and not as "fees for technical services" u/s 9(1)(vii) & 44D

The pith and substance of each of the contracts/agreements is inextricably connected with prospecting, extraction or production of mineral oil. The dominant purpose of each of such agreement is for prospecting, extraction or production of mineral oils though there may be certain ancillary works contemplated thereunder. If that be so, we will have no hesitation in holding that the payments made by ONGC and received by the non-resident assessees or foreign companies under the said contracts is more appropriately assessable under the provisions of Section 44BB and not Section 44D of the Act