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DATE: April 27, 2018 (Date of pronouncement)
DATE: May 31, 2018 (Date of publication)
AY: 2013-14
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CITATION:
S. 254(2): The limitation period for filing a Rectification Application has to be computed from the date of "communication" of the order and not from the date of passing the order. The fact that the order was pronounced in open court is not relevant because the parties will not be aware of the mistakes therein until after perusal of the order.

So far as the arguments of the Ld. DR that the date of communication is to be taken either as ‘communication or knowledge, actual or constructive’ of the order sought to be reviewed’ is concerned, we are guided by the decision of the full Bench of the Hon’ble Supreme Court in the case of ‘State of Punjab Vs. Mst.Qaisar Jehan Begum and Another’ AIR 1963 SC 1604: (1964) 1 SCR 971. (Full Bench), wherein the Hon’ble Supreme Court while considering the words ‘knowledge either actually or constructively’ has held that the knowledge of award does not mean a mere knowledge of the fact that the award has been made. The knowledge must relate to the essential contents of the award. The said proposition of law can be safely applied to the case in hand. Though the operative part of the order may be in the knowledge of the assessee, however, whether there is any mistake apparent on record in the contents of the order, it can be noticed only after going through the contents of the order

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DATE: April 6, 2018 (Date of pronouncement)
DATE: April 10, 2018 (Date of publication)
AY: 2013-14
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CITATION:
Strictures passed against the Dept for confronting, showing resentment and displeasure to the Tribunal for granting interim stay against recovery of demand. The Dept is showing open defiance of, disrespect of, or of open resentment to, orders of the Tribunal, which may prove be very dangerous for the sanctity of the courts of law/Justice dispensation system of the country. Costs imposed on dept

The crux of our above discussion is that the department officials fully knowing that no useful purpose will be served either by moving the present application and even knowing that the present application was infructuous and non-maintainable even on the date of its filing, not only filed this application, but also insisted for arguments despite that the hearing on the main appeal had already been concluded on a previous date. The only motive behind this application is to confront and show resentment and displeasure to this Tribunal for granting interim stay against recovery in this matter. The wording of the opening part of the application for vacation of stay clearly reveals that the Department is showing her resentment not only about the passing of ex-parte interim stay order but also towards the directions of the Tribunal for directing her to refund the amount illegally recovered

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DATE: February 5, 2018 (Date of pronouncement)
DATE: February 12, 2018 (Date of publication)
AY: 2013-14
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CITATION:
S. 54: If agreement for purchase of new residential house is made and entire purchase price is paid within three years from the date of transfer of the old asset, exemption u/s 54 is available. It is not required that the house must be completed within 3 years. The requirement in s. 54(2) that the capital gains should be deposited in the CGAS scheme is merely an enabling provision. If the assessee shows during assessment proceedings that the capital gains have been reinvested in the new residential house, exemption cannot be denied merely the amount was not deposited in the CGAS

If the assessee at the time of assessment proceedings, proves that he has already invested the capital gains on the purchase / construction of the new residential house within the stipulated period, the benefit under the substantive provisions of section 54(1) cannot be denied to the assessee. Any different or otherwise strict construction of sub section (2), in our view, will defeat the very purpose and object of the exemption provisions of section 54 of the Act

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DATE: January 18, 2018 (Date of pronouncement)
DATE: January 23, 2018 (Date of publication)
AY: 2013-14
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CITATION:
S. 2(1A)/ 68: An assessee who understates the consideration received for sale of agricultural land to avoid payment of stamp duty is defrauding the exchequer. He cannot take advantage of his own wrong and is estopped from contending that the amount received from the purchaser is a higher amount than was stated in the agreement. The incremental amount is assessable as ‘income from other sources’ and not as ‘agricultural income’. However, penalty u/s 271(1)(c) cannot be levied for the said wrong claim

Both seller and purchaser are estopped from their act and conduct to take such a self -contradictory plea. Not only the earlier but the later authorities also are the public officers appointed for the collection of taxes contributing to the public exchequer (may be of the State or of the Union) and a person having represented the factum of the transaction in a particular manner at one stage to a public officer and getting a wrongful benefit is estopped to deny the same to the subsequent public authority, both authorities being employee and representative of the government . The principle of estoppel in the light of the provisions of section 115 of the Evidence Act gets attracted in such a case. Even otherwise, recognizing such a transaction will amount to over riding the provisions of Transfer of Property Act and Indian Registration Act. In view of the above discussion, it can be safely held that not only legally but also ethically and morally, the parties to a registered document are not allowed to deny the terms of the document until and unless the very validity or execution of such a document is disputed

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DATE: December 20, 2017 (Date of pronouncement)
DATE: December 23, 2017 (Date of publication)
AY: 2013-14, 2009-10
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CITATION:
Coercive Tax Recovery: The AO wanted to preempt the Tribunal from dealing with the Stay application. The Act and conduct of the Revenue officials is against judicial conscience. Canons of law, justice and ethics have been broken down by the officials of the Department. An effort has been made to render the provisions of the law inoperative, debarring the assessee from availing any remedy from the higher forum

The act ion of the coercive recovery on the par t of the Assessing officer was against the elementary principal of rule of law. That the state is expected to act fairly. The undue haste on the part of the Assessing officer in recovering the amount was not only contrary to the binding decision of the Court but also shocking to the judicial conscience. The entire action was directed at rendering the Tribunal and the assessee helpless so that no relief can be granted in favour of the assessee. The Tribunal could not be silent spectator of the arbitrary and illegal act ion on the part of the Assessing officer so as to frustrate the legal process provided under the Act. The grant of refund of the amount that has been coercively recovered by the department was in the exercise of the tribunal’s inherent powers to ensure that the assessee is not left high and dry only on account of illegal and highhanded actions on the part of revenue and the assessing officer

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DATE: September 26, 2017 (Date of pronouncement)
DATE: November 15, 2017 (Date of publication)
AY: 2010-11
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CITATION:
Principles of mutuality: Entire law on whether a club whose membership is also open to the persons from the public and whose management is looked after by officials of HUDA is eligible to claim the benefits of "mutuality" explained in the light of Banglore Club 350 ITR 509 (SC) and other judgements

There can not be said to be straight jacket formula to say that in every a mutual concern the members must be entitled to a share in the surplus. In the aforesaid case laws as discussed by the Hon’ble Supreme Court in Banglore Club’s case (supra), if the scheme or the mechanism of functioning of a mutual organization is so devised that a taint of commerciality is involved, the income of the organization can be subjected to tax. As observed by the hon’ble supreme court, it is difficult and vexed question as to at what point of time the relationship of mutually ends and that of trading begins. Since the affairs of the assessee trust are controlled by the serving officers of HUDA, hence it has to pass through greater scrutiny as the chances of it crossing the thin line between the mutuality and commerciality are very high

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DATE: December 28, 2016 (Date of pronouncement)
DATE: December 29, 2016 (Date of publication)
AY: 2009-10
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CITATION:
S. 73 Explanation (speculation loss): If the assessee manages his transactions of sale and purchase of shares in cash segment and in future segment as a composite business, the transactions cannot be segregated to arrive at profit or loss in each segment separately. The provisions of the Income-tax Act cannot be interpreted to the disadvantage of the assessee and to segregate the transactions in cash and future segment which will be against the spirit of the taxation law

The peculiarity of the business of the assessee is such that the transactions carried out by the assessee in cash segment and in future segment cannot be segregated. The business of the assessee survives on the ultimate resultant figure arrived at after setting off/adjusting of the profit and loss from each segment. It cannot be said that the transactions in each segment done by the assessee are independent of each other. Before parting we would like to further add that certain exceptions have been carved out under section 43(5) vide which certain transactions in derivative named as ‘eligible transactions,’ done on a recognized stock exchange, subject to fulfillment of certain requirements, are deemed to be non-speculative. The said provisions have been inserted in the Act for the benefit of the assessees keeping in view the fact that in such type transactions on recognized stock exchange, the chance of manipulating and thereby adjusting the business profits towards speculative losses by the assessee is negligible because such transactions are done on recognized stock exchange and there are less chances of manipulation of figures of profits and losses. These provisions have been inserted for the benefit of the assessee so that the assessee may be able to set off and adjust his profit and losses from derivatives in commodities against the normal business losses. These provisions are intended to ease out the assessee from the difficulties faced due to the stringent provisions separating the speculative transactions from the normal transactions

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DATE: August 31, 2016 (Date of pronouncement)
DATE: September 20, 2016 (Date of publication)
AY: 2002-03
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CITATION:
S. 153A: Even in a case where only a s. 143(1) assessment is made, additions cannot be made without the backing of incriminating material if the s. 143(1) assessment has not abated

The making of an addition in an assessment under section 153A of the Act, without the backing of incriminating material, is unsustainable even in a case where the original assessment on the date of search stood completed under section 143(1) of the Act, thereby resulting in non-abatement of such assessment in terms of the Second Proviso to section 153A(1) of the Act

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DATE: May 18, 2016 (Date of pronouncement)
DATE: May 26, 2016 (Date of publication)
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CITATION:
(i) Purchase of a license to use shelf/shrink-wrapped software is purchase of a “product” and not a “copyright”, (ii) The retrospective insertion of Explanation 4 to s. 9(1)(vi) to include “software” in the definition of “royalty” does not apply to DTAAs, (iii) In view of the conflict of views amongst the High Courts, the view in favour of the assessee should be followed, (iv) An obligation to deduct TDS u/s 195 cannot be imposed by the retrospective insertion of Explanation 4 to s. 9(1)(vi), (v) As payments for software were not “royalty” at the time of payment, the assessee cannot be held to be in default for not deducting TDS

The assessee cannot be said to have paid the consideration for use of or the right to use copyright but has simply purchased the copyrighted work embedded in the CD- ROM which can be said to be sale of “good” by the owner. The consideration paid by the assessee thus as per the clauses of DTAA cannot be said to be royalty and the same will be outside the scope of the definition of “royalty” as provided in DTAA and would be taxable as business income of the recipient. The assessee is entitled to the fair use of the work/product including making copies for temporary purpose for protection against damage or loss even without a license provided by the owner in this respect and the same would not constitute infringement of any copyright of the owner of the work even as per the provisions of section 52 of the Copyright Act,1957

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DATE: October 30, 2015 (Date of pronouncement)
DATE: April 5, 2016 (Date of publication)
AY: 2002-03
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CITATION:
Income does not accrue if the debtor is in a precarious financial position and recovery is doubtful

Income did not accrue in the hands of the assessee owing to the precarious financial condition of the debtor notwithstanding that: (a) Services were rendered and the income was recorded in the books of account of the assessee during the relevant year & (b) bad debts were claimed in subsequent years when the dispute was settled

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