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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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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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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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DATE: March 16, 2015 (Date of pronouncement)
DATE: March 27, 2015 (Date of publication)
AY: 2002-03
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In applying the ‘extrapolation’ principle of Eusafali 90 ITR 271 (SC), the AO is entitled to make an estimation based on guesswork. However, the estimate must not be arbitrary and should be based on material

The ratio of the Hon’ble Supreme Court judgment in the case of Commissioner of Income Tax vs. HM Eusafali HM Abdulala (1973) 90 ITR 271 (SC) has been explained in the later judgment of this Court in Commissioner of Income Tax vs. Dr. M.K.E. Memon 248 ITR 310 (Bom.) It is open for the Assessing Officer to make an estimation and in that process there could be a certain guess work as well. That element cannot be discarded totally

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DATE: March 25, 2015 (Date of pronouncement)
DATE: March 27, 2015 (Date of publication)
AY: 2008-09
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(i) Growth mutual funds do not yield dividend and so s. 14A/ Rule 8D does not apply, (ii) S. 14A/Rule 8D disallowance for admin exp cannot exceed allocable exp debited to P&L A/c, (iii) ALP of funds lent to AE should be as per LIBOR, (iv) ALP of corporate guarantee to be at 0.5%

Growth mutual fund does not yield any dividend/exempt income, therefore, the provisions of section 14A would not apply on the investment in growth mutual funds

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DATE: March 25, 2015 (Date of pronouncement)
DATE: March 27, 2015 (Date of publication)
AY: 2007-08
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CITATION:
Transfer Pricing: Share application money cannot be treated as loan amount merely because there is a delay in issuance of shares

For transfer pricing purposes, share application money cannot be treated as loan amount merely because there is a delay in issuance of shares by the subsidiary in the name of the assesse, which was duly explained by the assesse

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DATE: March 10, 2015 (Date of pronouncement)
DATE: March 27, 2015 (Date of publication)
AY: 2010-11
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Factors to be considered for classifying gains from sale of listed shares into "short-term capital gains" versus "business profits" explained

It is an undisputed fact that the assessee took delivery of such shares after making full payment and it was not a case of settling the transaction of purchase and sale of such shares during the settlement period itself. This is another reason to indicate that the intention of the assessee to hold them as Investment

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DATE: March 11, 2015 (Date of pronouncement)
DATE: March 27, 2015 (Date of publication)
AY: 2000-01
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S. 147/ 148: If the assessee does not ask for reasons and file objections before the AO, he is not entitled to challenge the reopening proceedings

Law does not provide or mandate that the Assessing Officer shall suo motu shall supply the copy of those ‘reasons to believe’ to the assessee. It is for assessee and if assessee chooses to ask for reasons then he/she can file objection thereto. Only when such objections are filed, it becomes the duty of the Assessing Officer to dispose of all those objections first by passing a speaking order and if the objections are rejected then it gives a cause to the assessee to challenge such order by filing an appropriate writ

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DATE: March 26, 2015 (Date of pronouncement)
DATE: March 26, 2015 (Date of publication)
AY: -
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S. 80-IB(9): The Explanation to Section 80-IB(9) inserted by Finance (No. 2) Act 2009 w.r.e.f. 1.4.2000 is ultra vires to Article 14 of the Constitution of India.

It is true that legislature is entitled to depart from this meaning and can define it the way it chooses to do so. While doing so, it has to resort to the process known to and approved by law. The explanation introduced by Finance Act (No.2) of 2009 is a departure from the settled interpretative meaning given by Courts to the expression ‘Undertaking”. Any departure, therefore, has to be through the process of validation which has to be notwithstanding any law or decision

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DATE: March 17, 2015 (Date of pronouncement)
DATE: March 26, 2015 (Date of publication)
AY: -
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While an amendment to overrule a judgement is not valid, it is permissible to retrospectively alter the character of the levy so as to save it from illegality

In exercising legislative power, the legislature by mere declaration, without anything more, cannot directly overrule, revise or override a judicial decision. It can render judicial decision ineffective by enacting valid law on the topic within its legislative field fundamentally altering or changing its character retrospectively

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DATE: March 23, 2015 (Date of pronouncement)
DATE: March 26, 2015 (Date of publication)
AY: -
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S. 37(1): Expenditure on an aborted capital project is revenue in nature & can be claimed as deduction in year of abandoning the project

Expenditure made for construction/acquisition of new facility subsequently abandoned at the work-in-progress stage is allowable as incurred wholly or exclusively for the purpose of assessee’s business. It is revenue expenditure as it does not result in the acquisition of an asset or an advantage of an enduring nature

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