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DATE: April 23, 2019 (Date of pronouncement)
DATE: July 6, 2019 (Date of publication)
AY: 2009-10
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CITATION:
S. 254(1)/(2): The fact that the judges indicate a decision during the hearing or even dictate a judgement in open court gives no right to the litigant. Judges can change or alter their decision at any time until the judgement is signed & sealed. A MA on the ground that the ITAT Members stated a particular decision during the hearing but did the opposite in the order is not maintainable

The question arises as to whether the Bench while hearing the appeal has given any decision. May be the assessee got the impression in good faith. Even if the impression went to the assessee then also the same does not have any effect on the order of the Court as it is well settled law that a judge can recall the order and change his mind in extreme case where the though draft copy signed and dictated in the open, as held in the case of Kaushalbhai Ratanbhai Rohit & Ors. vs. State of Gujrat, [SLP (Criminal) 453/2014)], by the Apex Court

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DATE: April 12, 2018 (Date of pronouncement)
DATE: May 10, 2018 (Date of publication)
AY: 2012-13
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CITATION:
Disallowance u/s 14A & Rule 8D has to be made even if the assessee has not earned any tax-free income on the investment. Cheminvest 378 ITR 33 (Del) is not binding on the AO as it is a non-jurisdictional High Court. CBDT's Circular 5/2014 is in accordance with Godrej & Boyce Mfg. Co. Ltd 394 ITR 449 (SC) & Maxopp Investment Ltd 402 ITR 640 (SC)

The principle that it is the net income, i.e., net of expenditure relatable thereto, which is subject to tax and, correspondingly, not liable to tax, i.e., where it does not form part of the total income, is well established. Equally well settled is the principle that once an income is liable (or not liable) to tax, all expenditure relatable thereto is to be reckoned, and it matters little that the said expenditure has indeed resulted in a positive income, or in whatever sum. It is in fact this, i.e., the expenditure being higher than the gross income, which could be nil, that leads to the phenomenon of loss, which could therefore be across both the categories income, i.e., taxable or non-taxable, being essentially a matter of fact

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DATE: December 30, 2016 (Date of pronouncement)
DATE: January 18, 2017 (Date of publication)
AY: 2010-11
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CITATION:
S. 144C: The lapse committed by the AO in passing the assessment order without first passing a draft order, against which the assesee may file objections with the DRP, seeking its directions to the AO, is only a procedural irregularity, which does not impinge on the jurisdiction on the AO to pass the assessment order. The assessee has no vested right against procedure. However, as the lapse was held to be fatal in Vijay Television 369 ITR 113 (Mad), the same has to be followed

The lapse committed by the AO in passing the assessment order without first passing a draft order, against which the assesee may file objections with the DRP, seeking its directions to the AO, is only a procedural irregularity, which does not impinge on the jurisdiction on the AO to pass the assessment order, which he assumes on the issue of notice u/s. 143(2), even as observed by the Hon’ble jurisdictional High Court itself in a number of cases, reference to one of which, i.e., R.V. Sarojini Devi v. IAC [2000] 242 ITR 329 (Mad) stands made in the decision itself (also refer Asst. CIT v. Hotel Blue Moon [2010] 321 ITR 362 (SC)). Reference in this regard may be made to the decision in Daewon Kang Up Co. Ltd. v. DDIT Guduthur Bros. v. ITO [1960] 40 ITR 298 (SC), wherein the Apex Court clarified that the AO assumes jurisdiction to assess on issue of a valid notice, and which obtained till the same remained to be disposed of. The proceedings completed without allowing the assessee an opportunity of being heard was an illegality, vitiating the proceedings, which would relate back in time, having occurred during the course of the assessment proceedings itself. The impugned order was to be set aside, and the proceedings to commence from the stage the illegality or the irregularity had occurred

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DATE: March 8, 2016 (Date of pronouncement)
DATE: April 5, 2016 (Date of publication)
AY: 2011-12
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CITATION:
100% stay of demand has to be granted in high pitched assessments as per Instruction No. 96 of 1969

The Tribunal granted 100 percent stay of demand because (a) The assessed income was more than 10 times the returned income. (Instruction 96 of 1969 was relied upon) & (b) The stand taken by the AO was at variance with the stand taken by TPO

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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: 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: June 30, 2015 (Date of pronouncement)
DATE: July 21, 2015 (Date of publication)
AY: 2007-08, 2008-09
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CITATION:
S. 271D penalty: The limitation period has to be computed from the date of issue of the show-cause notice by the AO. Penalty should not be levied if circumstances show no intention to contravene the law

The six month period for the purpose of clause (c) of section 275(1) of the Act is to be computed from the date of issue of first show cause notice by the AO and not from the date of issue of first show cause notice issued by the Joint Commissioner

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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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