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DATE: April 13, 2021 (Date of pronouncement)
DATE: April 24, 2021 (Date of publication)
AY: 2013-14
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CITATION:
S. 56(2) (viib): The object of s. 56(2)(viib) is to tax excessive share premium received unjustifiably by private companies on issue of shares without carrying underlying value. However, shares issued to shareholders of an amalgamating company in terms of a scheme of amalgamation does not fall within the sweep of the deeming provisions of s. 56(2) (viib). The so-called excess value of assets vested on amalgamation cannot be notionally termed as premium over the face value for the purposes of the deeming provision (AS-14 issued by the ICAI & CBDT Circular No 3/2012 dated 12-6-2012 referred)

To summarise, in our view, the issue of shares at ‘face value’ by the amalgamated company (assessee) to the shareholders of amalgamating company in pursuance of scheme of amalgamation legally recognized in the Court of Law neither falls with scope & ambit of clause (viib) to S. 56(2), when tested on the touchstone of objects and purpose of such insertion i.e. to deem unjustified premiums charged on issue of shares as taxable income; nor does it fall in its sweep when such deeming clause is subjected to interpretative process having regard to the scheme of the Act

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DATE: October 24, 2019 (Date of pronouncement)
DATE: November 28, 2019 (Date of publication)
AY: 2006-07, 2007-08, 2008-09
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S. 92 Transfer Pricing: Even if an assessee is eligible for tax exemption at the rate of hundred percent under section 10A/10B of the Act, then also the arm’s length price on international transactions deserve to be determined under section 92C of the Act (all imp judgements referred)

The provisions of chapter X are not impeding with the manner of the computation of exemption under section 10A of the Act, but it is to work out the true ALP qua the sale price of the impugned international transaction. Therefore we disregard the contentions of the ld. AR for the assessee that no reference to the TPO can be made for determining the ALP

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DATE: November 14, 2018 (Date of pronouncement)
DATE: December 3, 2018 (Date of publication)
AY: 2007-08
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CITATION:
S. 148/ 151: If the AO issues the notice for reopening the assessment before obtaining the sanction of the CIT, the reopening is void ab initio. The fact that the sanction was given just one day after the issue of notice makes no difference

No doubt in the present case, the ld.AO has applied for such approval which was granted on 29.3.2017, but before grant of approval, the ld.AO has already issued notice on 28.3.2014 which is without any jurisdiction. He can issue notice only after getting approval. Thus, the ld.CIT(A) has rightly quashed the assessment because the very foundation for issuance of notice under section 148 is the approval from the competent authority, i.e. Commissioner of Income Tax, and in the absence of such, such notice is void ab initio

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DATE: September 26, 2017 (Date of pronouncement)
DATE: October 4, 2017 (Date of publication)
AY: 2008-09
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CITATION:
S. 140A/ 221(1): Law explained on whether an assessee who defaults on paying self assessment tax u/s 140A while filing the return of income is liable for penalty u/s 221(1) if he files a revised return of income and pays the tax thereon at the time of filing the revised return of income

As a plain reading of the above statutory provisions would show, the lapse, referred to in section 140A(1), is the failure “to pay such (admitted) tax together with interest payable under any provision of this Act for any delay in furnishing the return or any default or delay in payment of advance tax, before furnishing the return” and the lapses punishable under section 221(1) are the lapses in respect of “default in making a payment of tax”. The default triggering the penal liability under section 221(1) is the default in making payment of tax, and that the default in payment is tax is with reference to the filing of the income tax return. Viewed thus, default is committed at the point of time when a return of income is filed without making payment of the admitted tax liability. Clearly, therefore, the assessee committed a default in not paying the admitted tax liability when it filed the original income tax return, without payment of admitted tax liability, on 30th September 2008. To this extent, there is no dispute or ambiguity at all.The question then arises as to what is the impact of filing a revised income tax return

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DATE: March 28, 2016 (Date of pronouncement)
DATE: March 28, 2016 (Date of publication)
AY: A.Y 2006-07
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CITATION:
An order of revision passed on a non-existing entity, even though the power of attorney and the adjournment and the reply to show cause notice was signed by the erstwhile company, is invalid. The Tribunal held that the case of estoppel relied on by the department cannot be applied to instant case as assessee did not behave in a notorious way to mislead the department. Taking cognizance of the intimation filed by the assessee to the jurisdictional AO that the company is not is existence, during the assessment proceedings, of the intervening assessment years, and there being no provision in law to intimate the CIT regarding the facts of merger, the ITAT held the order to be invalid.

In the Income Tax Act, there is no provision to communicate this fact to the Commissioner. The assessee has already informed the AO. We have extracted the copy of the letter written by the assessee. We have also made reference of the assessment order vide which the AO has taken cognizance of this fact while he issued notice under section 143(2) of the Income Tax Act. In the order of the ITAT, Kolkata Bench itself has observed that legally when a company amalgamates with another, it loses its identity and no proceedings can be taken in its earlier name. The Bench had taken a different view on account of notorious facts available in that case. No such circumstances are before us. Apart from above, we are of the view that even if the assessee gave consent for taking up the proceedings under section 263 against it, that would not infuse jurisdiction in the ld.Commissioner. In other words, this adjournment application, reply to show cause notice would not infuse jurisdiction to ld.Commissioner. Jurisdiction should be by virtue of operation of the Act and not by the consent of an assessee. A perusal of section 263 would indicate that before taking any action under section 263, the ld.Commissioner has to pursue record and record would include the communication made by the assessee to the AO on 23.7.2013 intimating about the fact of amalgamation

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DATE: October 9, 2015 (Date of pronouncement)
DATE: October 19, 2015 (Date of publication)
AY: 2011-12
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CITATION:
Law on applicability of Article 24 of the India-Singapore DTAA (Limitation of Benefits) to a case where the income is not remitted to, or received in Singapore, explained

The benefit of treaty protection is restricted to the amount of income which is eventually subject matter of taxation in the source country. This is all the more relevant for the reason that in a situation in which territorial method of taxation is followed by a tax jurisdiction and the taxability for income from activities carried out outside the home jurisdiction is restricted to the income repatriated to such tax jurisdiction, as in the case of Singapore, the treaty protection must remain confined to the amount which is actually subjected to tax. Any other approach could result in a situation in which an income, which is not subject matter of taxation in the residence jurisdiction, will anyway be available for treaty protection in the source country

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DATE: June 24, 2015 (Date of pronouncement)
DATE: June 30, 2015 (Date of publication)
AY: 2007-08 to 2009-10
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CITATION:
S. 271(1)(c): Law on levy of penalty in a case where satisfaction is recorded in s. 153C/153D assessments by AO who is common to the searched party and the assessee explained

The attempt at the end of the assessee is that there should be a straight jacket system, whereby the satisfaction recorded even by the same AO then, that should be placed in the file of searched person and if it is placed in some other cupboard in his room by the AO then, there cannot be any satisfaction, we fail to appreciate that technical approach at the end of the assessee. The law does not require the manner and the procedure of keeping the files. The section only requires that a satisfaction be recorded and it should be during the period propounded by Hon’ble S.C. in CIT vs. Calcutta Knitwears 362 ITR 673

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DATE: December 5, 2014 (Date of pronouncement)
DATE: December 8, 2014 (Date of publication)
AY: 2008-09 to 2010-11
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(i) S. 153A: Even in non-pending assessments where no incriminating material is found, AO is not limited to assessing “undisclosed” income, (ii) revenue expenditure on leased premises is not hit by sub-section (1A) to s. 32 or Explanation 1 to s. 32, (iii) Even income voluntarily disclosed in search is liable for 2. 234B/C interest

(i) The circumstance where proceedings are not pending and no incriminating material is found in the course of search has been left unanswered by the Delhi High Court in Anil Kumar Bhatia 352 ITR 493 (Del). In this case, the …

M/s. Nandini Delux vs. ACIT (ITAT Bangalore) Read More »

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DATE: November 28, 2014 (Date of pronouncement)
DATE: November 29, 2014 (Date of publication)
AY: 2009-10
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CITATION:
Profits on sale of carbon credits is not a taxable revenue receipt

Carbon credit is in the nature of “an entitlement” received to improve world atmosphere and environment reducing carbon, heat and gas emissions. The entitlement earned for carbon credits can, at best, be regarded as a capital receipt and cannot be …

Subhash Kabini Power Corporation Ltd vs. CIT (ITAT Bangalore) Read More »

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DATE: October 22, 2014 (Date of pronouncement)
DATE: November 7, 2014 (Date of publication)
AY: 2001-02
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CITATION:
S. 147/ 151: Sanction by the CIT with word "approved" without recording satisfaction note renders reopening invalid

(i) A simple reading of the provisions of Sec. 151(1) with the proviso clearly show that no such notice shall be issued unless the Commissioner is satisfied on the reasons recorded by the AO that it is a fit case …

ITO vs. N. C. Cables Ltd (ITAT Delhi) Read More »