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DATE: July 9, 2018 (Date of pronouncement)
DATE: July 14, 2018 (Date of publication)
AY: 2012-13
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CITATION:
S. 2(1A) Agricultural income: Mushroom is not a ‘vegetable’, ‘plant’, 'fruit' or ‘animal’ but is a ‘fungus’. Anything which is produced by performing basic operations on the soil is an "agricultural product" and the income therefrom is "agricultural income". The nature of the product and the fact that it is not a ‘plant’, ‘flower’, ‘vegetable’ or ‘fruit’ is irrelevant. The only relevant aspect is whether the production is by performing some basic operations on the soil (All judgements considered)

It is clear that we cannot restrict the word “product” to ‘plants’, ‘fruits’, ‘vegetables’ or such botanical life only. The only condition is that the “product” in question should be raised on the land by performing some basic operations. Mushroom produced by the assessee is a product. This product is raised on land/soil, by performing certain basic operation. The product draws nourishment from the soil and is naturally grown, by such operation on soil which require expenditure of “human skill and labour”. The product so raised has utility for consumption, trade and commerce and hence would qualify as an “agricultural product” the sale of which gives rise to agricultural income.

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DATE: May 29, 2018 (Date of pronouncement)
DATE: June 11, 2018 (Date of publication)
AY: 2007-08
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Bogus Long-term capital gains: As neither the statement of Mukhesh Choksi was provided to the assessee nor cross-examination was allowed and it was not even placed on record, the action of the AO in treating the LTCG and STCG as income from other sources was not warranted

A.O. was of the opinion that capital gains declared by the assessee was bogus. In this regard, A.O. also observed that he received information from the office of Chief Commissioner of Income Tax, Mumbai that M/s. Alliance Intermediaries and Network Pvt Ltd., one of the group companies of Mr. Mukesh Choksi, and also other companies of this group have provided accommodation entries to various persons, including the assessee. Though the assessee has furnished purchase bills of shares, cash receipts for payment of share purchases, account copies of M/s. Alliance Intermediaries and Network Pvt Ltd, the A.O. noticed that the Intermediary i.e., M/s. Alliance Intermediaries and Network Pvt Ltd., was proved to have neither affiliated to Mumbai Stock Exchange nor affiliated to National Stock Exchange which clearly indicates that the transactions were never carried out.

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DATE: July 12, 2017 (Date of pronouncement)
DATE: July 26, 2017 (Date of publication)
AY: 2007-08
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CITATION:
S. 254(2): The period of limitation for filing a rectification application is six months from the end of the month in which the “order is passed” and not from the date of “receipt of the order”. Even if a liberal view is taken, it can be considered as the date of uploading of the order on the ITAT website. The uploaded orders can be accessed by the assessee and constitutes service of the order upon the assessee

Section 254(2) of the Act refers to the period of limitation reckoning from the end of the month in which the order Is passed’ and not from the ‘date of receipt of the order’. As rightly pointed out by the Ld DR, the expressions “passed” “initiated” and “served / received” are not interchangeable and the Legislature in its wisdom expressly used the phraseology depending on the intention. In the instant case, the expression “passed” cannot be stretched to mean that the period of limitation should be reckoned from the date of receipt of the order. Even if a liberal view has to be taken, it can be considered as the date of uploading of the order. Ordinarily anything which is uploaded in the public domain can be accessed by the public at large and even the assessee would have access to the order and such a date always be treated as the service of the order

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DATE: February 13, 2017 (Date of pronouncement)
DATE: February 22, 2017 (Date of publication)
AY: 2011-12
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CITATION:
S. 206AA does not have an overriding effect over the other provisions of the Act. By virtue of s. 90(2), the provisions of the Treaty override s. 206AA to the extent they are beneficial to the assessee. Consequently, the payer cannot be held liable to deduct tax at higher of the rates prescribed in s. 206AA in case of payments made to non-resident persons in spite of their failure to furnish the PAN

In view of the above discussion, we are of the view that the provisions of section 206AA of the Act will not have a overriding effect for all other provisions of the Act and the provisions of the Treaty to the extent they are beneficial to the assessee will override sect ion 206AA by virtue of section 90(2). In our opinion, the assessee therefore cannot be held liable to deduct tax at higher of the rates prescribed in section 206AA in case of payments made to non-resident persons having taxable income in India in spite of their failure to furnish the Permanent Account Numbers

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DATE: February 29, 2016 (Date of pronouncement)
DATE: March 11, 2016 (Date of publication)
AY: 2001-02 to 2007-08
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CITATION:
S. 68/ 69/69A: Law relating to assessment of undisclosed income, based on disputed documents found in the premises of the assessee during search explained. Also, the law on admission of additional evidence sourced from foreign countries, onus of the assessee and onus of the revenue and law on 'telescoping' of additions also explained

The Revenue, to proceed against the assessee, must have definite information with regard to the assessee being in possession of monies or holding investment. This is in view of the salutary principle of common law jurisprudence, embodied u/s.110 of the Evidence Act, i.e., that possession implies ownership, so that the onus of proving that the possessor is not the owner is on the person so alleging. This principle is also applicable to tax proceedings, incorporated in the Act (under Chapter VI), so that the principle would be attracted to a set of circumstances that satisfies its conditions. The expression ‘income’ under the Act, a term of wide import, is applicable to section 69A, among others, of the Act (refer: Chuharmal vs. CIT [1988] 172 ITR 250 (SC)). The assessee, claiming to have no foreign bank accounts, concedes subsequently (on the basis of a report by UBS AG, Zurich – which has been taken as part of the record) to have a limited banking relationship with UBS AG, Zurich. The said report, for the reasons afore-discussed, cannot be considered as completely reliable.

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DATE: October 14, 2015 (Date of pronouncement)
DATE: October 30, 2015 (Date of publication)
AY: 2009-10
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CITATION:
Correctness of law laid down by Bombay High Court in Ace Builder 281 ITR 210 that deduction u/s 54EC is available to short-term capital gains computed u/s 50 doubted by Tribunal

By virtue of the deeming provision of section 50, cost of a long-term capital asset (LTCA), i.e., as per section 2(29A), where depreciable, forming part of a block assets on which depreciation stands claimed, the capital gain on its transfer would have to be computed in terms thereof, i.e. by treating the WDV of the relevant block of assets (or, as the case may be, the relevant asset) as its cost of acquisition. The second deeming per the provision of section 50 is qua the nature of such capital gains, i.e., as capital gains arising from the transfer of a STCA. Section 54EC is available on capital gain arising on the transfer of a LTCA, i.e., which is not a STCA by definition. The same shall, therefore, not apply to capital gains computed u/s.50

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DATE: September 23, 2015 (Date of pronouncement)
DATE: October 8, 2015 (Date of publication)
AY: 2008-09
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CITATION:
S. 14A/ Rule 8D: (i) Presumption laid down in HDFC Bank 366 ITR 505 (Bom) and Reliance Utilities 313 ITR 340 (Bom) that investments in tax-free securities must be deemed to have come out of own funds and (ii) Law laid down in India Advantage (Bom) that s. 14A and Rule 8D does not apply to securities held as stock-in-trade cannot be applied as both propositions are contrary to Godrej & Boyce 328 ITR 81 (Bom)

In our view, it was incumbent on the parties to have brought its’ decision in the case of Godrej & Boyce to the notice of the Hon’ble Court in HDFC Bank Ltd.. We are conscious that we are deciding an appeal in the case of the same assessee. So, however, we are deciding a purely legal issue, i.e., whether, in view of the statutory presumption cast by section 14A, a non obstante provision, a presumption on facts could obtain, or that the assessee shall have to establish the same with reference to its accounts, in terms of section 14A(2) r/w s. 14A(3), leading to a satisfaction or otherwise of the assessing authority, arrived at objectively, only to find the earlier decision in Godrej & Boyce (supra) as having addressed the said issue. Further, that the facts in Reliance Utilities and Power Ltd., which was even otherwise in respect of allowance of expenditure u/s.36(1)(iii) – a provision which does not mandate any apportionment per se, stood established, with in fact the said decision having been considered in Godrej & Boyce. As such, there being no estoppel against law, we consider ourselves as legally justified in following the said decision by the Hon’ble jurisdictional High Court, address as it does, in our opinion, the issue at hand, and is thus squarely applicable, even as found in Dhanuka & Sons (supra), D. H. Securities (P) Ltd. (supra); and Damani Estates & Finance (P.) Ltd. (supra). These also constitute the binding reasons for not following the decision by the tribunal in Dy. CIT (OSD) vs. Shri Durga Capital Ltd. (in ITA No. 7405/Mum/2011 dated 03.08.2015/copy on record), also relied upon before us, in-as-much as we find no statement of law ascribed to India Advantage Securities Ltd. (supra); the Hon’ble Court therein holding the appeal before it to not raise any substantial question of law. Further, there is, no reference to the binding decision by the Hon’ble jurisdictional High Court in Godrej & Boyce (supra), or by the tribunal in D. H. Securities (P) Ltd. (supra) as well as Damani Estates & Finance (P.) Ltd. (supra), explaining the said decision, as well as its bearing on the decision by the larger bench of the tribunal in Daga Capital Management Pvt. Ltd. (infra), in Shri Dura Capital Ltd

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DATE: September 4, 2015 (Date of pronouncement)
DATE: September 9, 2015 (Date of publication)
AY: 1994-95, 1996-97
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CITATION:
Strictures passed against ICAI By ITAT for alleged “deteriorating standards” and “losing its grip over the Income tax matters” toned down on the basis that they were made in the context of a "hypothetical situation" and were not "intended to criticize the functioning of the ICAI"

The Income tax Appellate Tribunal, being a part of Government of India, should not shut its eyes when it is noticed that certain developments occurring in the Country may affect the Country as a whole, more particularly when the reputation of particular profession, from whom the Tribunal is getting assistance in the dispensation of justice, is at stake. Accordingly, we sincerely believe that it is the bounden duty of not only the Tribunal, but also the duty of one and all to point out and discuss about such kind of developments, when it is noticed that the same may affect the public at large. There cannot be any controversy that the interest of our Country is Supreme and no citizen can or should compromise on the same

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DATE: August 7, 2015 (Date of pronouncement)
DATE: August 13, 2015 (Date of publication)
AY: 1997-98, 1998-99, 1999-00
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CITATION:
S. 271(1)(c): Claim that interest income is eligible for s. 10B exemption, though upheld by the ITAT for an earlier year, is so implausible that it attracts penalty for concealment/ furnishing inaccurate particulars of income

We, in view of the foregoing, find no merit in the assessee’s case. It, to our mind, has not adduced any explanation, much less substantiated it, except for a bald assertion (i.e., of the said interest income as being a part of the assessee’s business income). The reliance on the decisions by the hon’ble jurisdictional high court, which we have found to be in fact supportive of the Revenue’s case, with the law in the matter being, in fact, well settled, is only a false plea or a ruse. Reliance on the decision by the tribunal for a subsequent year (AY 2000-01) is, under the circumstances, again, completely misplaced. A plausible explanation towards its’ claim/s saves penalty u/s. 271(1)(c), in view of, again, the settled law in the matter which though is completely missing in the present case

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DATE: July 17, 2015 (Date of pronouncement)
DATE: July 21, 2015 (Date of publication)
AY: 2009-10
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CITATION:
S. 282: Law on validity of service of notices by "Speed Post" instead of "Registered Post A/D" explained

Registered post would take within its sweep not only ‘speed post’ but also all other mails forming part of the establish system of mails in which their receipt and movement is recorded to assure safe delivery. All the principal attributes of ‘registered post’ were inherently present in ‘speed post’, so that the two were of the same genus. The term registered post being not defined, it could only be so in terms of its elements, which the tribunal gathered from the dictionary meaning of the word ‘registered’; its common parlance meaning; and its substance

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