{"id":5483,"date":"2012-08-30T15:10:20","date_gmt":"2012-08-30T15:10:20","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?page_id=5483"},"modified":"2012-08-30T15:10:20","modified_gmt":"2012-08-30T15:10:20","slug":"digest-of-important-case-law-july-2012","status":"publish","type":"page","link":"https:\/\/itatonline.org\/archives\/digest-of-important-case-law-july-2012\/","title":{"rendered":"Digest of important case law – July 2012"},"content":{"rendered":"
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\nNo time to read through voluminous case reports?<\/p>\n
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\nFret Not! The KSA Legal team will bring you up-to-speed with the choicest of case-law so you can focus your attention only on the important ones. This section is updated on a monthly basis so make sure you bookmark this page.\n<\/div>\n

Compiled By: Ajay R. Singh, Paras S. Savla, Rahul K. Hakani and Sujeet S. Karkal, Advocates<\/DIV><\/p>\n<\/div>\n

<\/DIV>\n<\/div>\n

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Digest of important case law – July 2012 <\/strong><\/td>\n <\/td>\n<\/tr>\n
Download monthly<\/strong> (July 2012) digest in pdf format <\/td>\n Click here to download the judgement (digest_important_case_laws_july_2012.pdf) <\/strong> <\/a><\/p> <\/td>\n<\/tr>\n
Download Consolidated Digest<\/strong> (Jan 2012 to June 2012) in pdf format <\/td>\n <\/td>\n<\/tr>\n
Looking for the Previous Month’s digest? Click here.<\/a> <\/td>\n Click here to download the judgement (consolidated_digest_of_case_laws_jan_2012_june_2012.pdf) <\/strong> <\/a><\/p> <\/td>\n<\/tr>\n<\/table>\n<\/div>\n
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Journals Referred <\/strong>: BCAJ, CTR, DTR, ITD, ITR, ITR (Trib), Income Tax Review, SOT, Taxman, Taxation, TLR, TTJ, BCAJ, ACAJ, www.itatonline.org\n <\/div>\n

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S.2(14): Definitions-Capital asset – Personal effects- Household items. In the absence of nature and full description consideration received on sale of carpets, paintings cannot be considered as personal asset. (S.68 ) <\/strong><\/p>\n

  <\/p>\n

The assessee sold certain carpets, paintings, collector items, household items which were claimed to have been inherited or received as gift from his grandfather, father and uncle. The assessee claimed that those articles were in personal use of the assessee or his dependent family members and therefore fell within the meaning of ‘personal effects’ u\/s 2(14). It was held that in absence of nature and full description of each household articles or furniture and collector items sold and there being no evidence of intimate connection between the effects and person of assessee, items sold could not be held to be personal effects within the meaning of Section 2(14) and thus, they were not excluded from the definition of capital asset. (AY 2002-03)<\/p>\n

  <\/p>\n

ACIT v. Faiz Murtuza Ali (2012) 52 SOT 358 (Delhi)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.2(31):Definitions- Person- Minor-Income clubbed in hands of parents – Exemption allowable. (S.54EC,64 )<\/strong><\/p>\n

  <\/p>\n

Minor is an assessable entity  even though his income is clubbed in his parents. When income is clubbed with parents all deductions are to be allowed including the exemption under section 54EC.(A.Y. 2007-08)  <\/p>\n

  <\/p>\n

Dy.CIT v. Rajeev Goyal (2012) 52 SOT 335 (Kol.) (Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.<\/strong>4: Charge of income-tax-Income- Accrual-Retention money-Retention money in the contract is assessable only in the year of receipt  that too after clearance of the defect liability.(S.5 )<\/strong><\/p>\n

  <\/p>\n

The issue referred for the consideration of Third Member was whether the retention money is accrued in the year of retention or in the year of actual receipt of the retention amount from the contractee s departments after the clearance of effect liability claims .The third member held that assessee had no right to receive the money by virtue of the contract between parties and the assessee also had no right to enforce the payment and therefore the  assessing officer could not  include the retention money in the assessment year when actually this amount had not been paid to the assessee. The Tribunal held that the retention money in the contract is assessable only in the year of receipt , that too after clearance of the defect liability.(A.ys.2003-04 to 2005-06)<\/p>\n

  <\/p>\n

ACIT v. Chandragiri Construction Co ( 2012) 147 TTJ 249\/73 DTR 20(TM ) (Cochin)(Trib.). <\/em><\/strong><\/p>\n

  <\/p>\n

S.4: Income–Principle of mutuality – Co-operative Housing Society – TDR Premium – TDR Premium received by Co-op Hsg. Society from its members is exempt on ground of “mutuality”<\/strong> <\/p>\n

  <\/p>\n

 The assessee, a Co-operative Housing Society formed of plot owners, passed a resolution to the effect that if any member desired to avail of the benefit of Transferable Development Rights (TDR) for carrying out construction or additional construction on his plot, he should apply for a No Objection Certificate which would be granted on payment of a premium calculated at the rate of Rs.250 per sq.ft. The Society received a premium of Rs.18.75 lakhs from its members for this purpose and claimed that the receipt was not chargeable to tax on the grounds of mutuality. The AO rejected this plea on the ground that the TDR premium was in reality a “profit sharing arrangement of commercial nature<\/em>” and was chargeable to tax. The CIT (A) & Tribunal upheld the assessee’s plea. On appeal by the department to the High Court, held dismissing the appeal:<\/p>\n

  <\/p>\n

 In Mittal Court Premises Co-op Society<\/strong><\/a> (2010) 320 ITR 414 (Bom) it was held in the context of non-occupancy charges that the principle of mutuality would apply to a co-op society. The same principle<\/strong> applies to the TDR premium<\/strong> paid by a member to the Society of which he is a member as consideration for being permitted to make an additional utilization of FSI on the plot allotted by the Society. There is a complete mutuality between the Society and its members<\/strong> and the TDR premium is not chargeable to tax. (A.Y. 2005-06) <\/p>\n

  <\/p>\n

CIT v. Jai Hind CHS Ltd (Bom.) (High Court)<\/em><\/a>www.itatonline.org<\/em><\/a><\/h2>\n

S.9: Income deemed to accrue or arise in India –Permanent establishment-Outbound and inbound consignment- India-Singapore DTAA- Receipts from outbound and inbound consignments attributable to PE.(Art.5)<\/strong><\/p>\n

  <\/p>\n

Wholly owned subsidiary of AX group, which is facilitating the overseas express shipment business carried on by the said group in India through the applicant, a Singapore company, by securing orders, collecting articles, transporting them and delivering the same to addresses in various countries through the group entities is PE of applicant in India within the meaning of art. 5 of Indo-Singapore DTAA and, therefore the receipts by applicant from outbound and inbound consignments attributable to PE in India are taxable in India. <\/p>\n

  <\/p>\n

Aramex International Logistics (P.) Ltd. In re, (2012) 251 CTR 9\/208 Taxman 355 (AAR)   <\/em><\/strong><\/p>\n

  <\/p>\n

S.9(1)(i): Income deemed to accrue or arise in India – Sale of cars in India –Permanent establishment- DTAA-India-Germany- Delivery of goods took place outside India and payment was also made outside India – Held no business connection in India and thus, income from sale not chargeable to tax. [Art  5(2)(b), 5(2)(a)]<\/strong><\/p>\n

  <\/p>\n

The assessee, a German company was engaged in the business of manufacture and sale of automobiles. It entered into a joint venture with company for manufacture\/ assembly and sale of cars in India. For direct sales to customers in India, the assessee rendered certain assistance services. It was held that delivery of goods took place outside India and payment was also being made for purchase of goods outside India and there was no business activity carried out by the assessee regarding sale of cars directly are not taxable in India. The said transaction does not give rise to a business connection in India. (AY 1997-98, 2000-01, 2002-03 and 2005-06)<\/p>\n

  <\/p>\n

ACIT v. Daimler Chrysler AG (2012) 52 SOT 93(Mum)(Trib.)   <\/em><\/strong><\/p>\n

  <\/p>\n

S.9(1)(vi):Income deemed to accrue or arise in India – Royalty – DTAA-India –Korea- Payment for Shrink wrapped software held to be royalty.[Art. 12(3)]<\/strong><\/p>\n

  <\/p>\n

The assessee is a company engaged in the development of computer software and exported such software to its head office located in South Korea. The AO held that the payment made by the assessee constituted royalty u\/s 9(1)(vi) and thus, liable for deduction of tax at source. It was held that the payment was made for by assessee to the non-resident for having imported shrink wrapped software\/off-shelf software. It was clear from the material on record that what was transferred was the right to use software, an exclusive right which the owner of the copyright owned and what was transferred was only right to use copy of the software for the internal business. It was held that right for transfer would constitute “royalty” within the meaning of article 12(3) of the DTAA and the provisions of S. 9(1)(vi) of the Act. (AY 1999-2000 to 2001-02)<\/p>\n

  <\/p>\n

CIT v. Samsung Electronics Co. Ltd. (2012) 345 ITR 494 (Karn.) (High Court)<\/em><\/strong><\/p>\n

  <\/p>\n

S.9(1)(vi): Income deemed to accrue or arise in India –Software-Data card- Payment for actual cost for purchases\/ upgrades made, including data cards, application, support software and OS\/OS upgrades – Matter restored to file of CIT (A) as agreement and other material not on record and nature of software not examined<\/strong><\/p>\n

  <\/p>\n

The assessee is a resident company engaged in the providing employment background screening services to its clients, which consists of checks such as education screening, employment screening, address verification. The assessee entered into an agreement with a US associate as per which the assessee had to pay US company actual cost for various purchases\/ upgrades made by said company which included data cards, application, support software and OS\/OS upgrades. The AO opined that the payment made amounted to royalty u\/s 9(1)(vi). The matter was restored back to file of CIT(A) on the premise that the assessee had reimbursed the expenses, and had not examined the nature of software acquired by the assessee, as the agreement and other material were not on record. (AY 2008-09 and 2009-10) <\/p>\n

  <\/p>\n

ACIT v. First Advantage (P.) Ltd. (2012) 52 SOT 406 (Mum)(Trib.)  <\/em><\/strong><\/p>\n

  <\/p>\n

S.9(1)(vii):  Income deemed to accrue or arise in India-Fees for technical services- Technical repairs-<\/strong> Fees for “routine technical repairs” not assessable as “fees for technical services”.<\/strong> <\/strong><\/p>\n

  <\/p>\n

The assessee paid sums to foreign parties for repairing and refurbishment of equipment. The AO held that the payments constituted “fees for technical services<\/em>” u\/s 9(1)(vii) and that the assessee ought to have deducted TDS u\/s 195 r.w.s. 201 though the assessee argued that as there was no intellectual aspect<\/em> involved in the repairs and refurbishment activity, it was no assessable as “fees for technical services<\/em>”. The CIT (A) allowed the claim. On appeal by the department to the Tribunal, Held dismissing the appeal:<\/p>\n

  <\/p>\n

The activities carried out by the foreign parties involved assembly, disassembly, inspection, reporting and evaluation. These are routine maintenance repairs and do not involve services of technical nature so as to be assessable as “fees for technical services” u\/s 9(1)(vii). Routine repairs do not constitute ‘FTS’ as they are merely repair works and not technical services. Technical repairs are different from ‘technical services’<\/em> (Lufthansa Cargo India Pvt. Ltd. v Dy. CIT (2005) 274 ITR (AT) 20 (Delhi)(Trib.) followed; Mannesmann Demag Lauchhammer v CIT (1988)26 ITD 198(Hyd.)(Trib.) distinguished)(AY 2001-02 to 2006-07)<\/p>\n

  <\/p>\n

ADIT v. BHEL-GE-Gas Turbine Servicing ( Hyd.)(Trib.) www.itatonline.org<\/em><\/strong><\/p>\n

  <\/p>\n

S.9(I)(vii):Income deemed to accrue or arise in India-Royalty- DTAA-India-Germany-Consideration for use of process or formula developed by research member   would be  assessable as royalty.(Art .12.3 )<\/strong><\/p>\n

  <\/p>\n

The applicant is a German company  engaged  in the business of executing contracts for assembly and supervision of paint  shop, including supply of materials and supervision of installation for various automobile companies . A group of companies are its affiliates .The group companies has formulated a research and development policy . As per the policy all Research and development activities for A  group is co –ordinate through applicant. Entire cost is to be shared by the parties to the agreement based on key allocation. The  participants are allowed  a royalty –fee unlimited access  to the research results including any intellectual Property Rights  generated from the research  and development. Though all are joint owners of the Intellectual Rights, the rights are registered in the name of the applicant. The applicant approached the Authority for a ruling whether the payments  made to the applicant by “A” India, in terms of the Cost allocation Agreement can be treated as income in the hands of  the applicant and whether it is not  merely reimbursement of the expenses incurred for the Research and Development .The Authority held that in terms of agreement it appears that it is only an agreement to share  product of research and development allegedly without payment of royalty , but paying a consideration for use described as contribution costs of research incurred by researching party. This payment occurs only on use  of product of research and  not otherwise. Thus on facts ,payment made by any party to the applicant can only be understood as a consideration for use of process or formula developed by researching  member  and thus, would satisfy definition of royalty under Explanation 2 to section 9(1)(vii), therefore, payment received by applicant from “ A” India under agreement would be royalty in terms of article 12.3 and section 9(1)(vii). The question is answered in favour of revenue.<\/p>\n

  <\/p>\n

‘A’ Systems, In re( 2012)345 ITR 479\/ 208 Taxman 137\/74 DTR 305 (AAR)         <\/em><\/strong><\/p>\n

  <\/p>\n

S. 10(10CC):Exemption- Perquisite-Employee- Tax on employees’ salary is a “non-monetary” perquisite exempt u\/s 10(10CC)(S.17(2)(iv))<\/strong> <\/strong><\/p>\n

  <\/p>\n

The assessee-employer entered into agreements with the employees pursuant to which it agreed to bear the income tax payable by the employees on their salary<\/em>. The question was whether such tax payment was “income in the nature of a perquisite, not provided for by way of monetary payment, within the meaning of clause (2) of section 17<\/em>” so as to be exempt in the hands of the employee. Held by the High Court:<\/p>\n

  <\/p>\n

The tax on the salary paid by the employer was a “perquisite<\/em>” u\/s 17(2)(iv) because it was paid in respect of the employees’ obligation and it was not by way of monetary payment to the employees concerned but for or on their account to the Income-tax department. Consequently, it is a “non-monetary” payment of a perquisite to the employee which is eligible for exemption u\/s 10(10CC). <\/p>\n

  <\/p>\n

DIT v. Sedco Forex International Drilling Inc (Uttarakhand) (High Court) www.itatonline.org<\/em><\/strong><\/p>\n

  <\/p>\n

S.10(23C)(vi):Exempt incomes-Approval-Rejection of application-Opportunity of hearing must be given before rejecting the application.<\/strong><\/p>\n

  <\/p>\n

The assessee trust made an application seeking approval under section 10 (23C)(vi) of the Act. The prescribed authority called certain information which was furnished by the assessee. The prescribed authority rejected the application , without giving any opportunity of hearing .The action of the prescribed authority rejecting the application was challenged in a Writ petition before the Court. The Court held that it is necessary that the petitioner are afforded an opportunity of responding to the grounds on which their application has been rejected . Accordingly the petition was allowed . The prescribed authority is directed to pass a reasoned order , after hearing the petitioner.<\/p>\n

  <\/p>\n

Rukmanrani Education Foundations v. CCIT (2012) 74 DTR  218 (Bom.) (High Court)    <\/em><\/strong><\/p>\n

  <\/p>\n

S.10A:<\/strong> Newly established undertakings- Free trade zone-Section 10A<\/strong> (9) applied prospectively but its omission has retrospective effect.<\/strong> <\/strong><\/p>\n

  <\/p>\n

Till AY 2003-04, the assessee’s shares were held by British Airways and Warburg Pincus. In AY 2003-04, there was a change in the beneficial interest in the shareholding<\/em>. For AY 2004-05, the assessee claimed s. 10A deduction of Rs. 19 crores in respect of its STPs which were set up pre-2000. The CIT took the view that the s. 10A deduction was not allowable for AY 2003-04 & 2004-05 in view of s. 10A(9) which was introduced in AY 2001-02 to provide that if the “beneficial interest” in the undertaking was transferred, s. 10A deduction would not be allowed<\/em>. For AY 2003-04, the CIT’s stand was upheld<\/em> by the Tribunal. However, for AY 2004-04, Held by the Tribunal, reversing<\/em> the CIT:<\/p>\n

  <\/p>\n

(i) Circular No.8 of 2002 dated 27.8.2002 states that s. 10A(9) was inserted in AY 2001-02 to “to curb trading in incentives by shell companies and to discourage unscrupulous shopping of EOUs and STPs and not to discourage genuine business re–organizations<\/em>“. On facts, the change in the assessee’s shareholding was by way of global re–organization of the business and cannot be said to be non-genuine;<\/p>\n

  <\/p>\n

(ii) When s. 10A(9) was omitted in AY 2004-05, the Finance Minister said in the budget speech that the provision was “illogical” and had to be removed. Given the object & purpose of the omission, it can be held that the omission has retrospective effect and applies to change in the ownership in AY 2003–04. Further, sub–section (9) was omitted without any saving clause and it is not a case of repeal. If a provision in a statute is unconditionally omitted without any saving clause in favour of the pending proceedings, all actions must stop where such an omission is found. As s. 10A(9) has been omitted, it is as if the sub-section never existed in the statute (G.E. Thermo Matrix (ITAT B’lore followed);<\/p>\n

  <\/p>\n

(iii) Though for AY 2003–04, the Tribunal upheld the CIT’s stand, this cannot be followed as a precedent because (a) while in AY 2003-04, s. 10A(9) was on the statue and there was a change in shareholding, in AY 2004-05, it was not, (b) In Zycus Infotech (2011) 331 ITR 72 (Bom) it was held that s. 10A(9) does not have retrospective effect and is applicable only to undertakings set up after 1.4.2001. As the assessee’s STP undertakings were set up before that date, s. 10A(9) had no application. (AY 2004-05)<\/p>\n

  <\/p>\n

WNS Global Services Pvt. Ltd v. ITO ( Mum.)(Trib.) www.itatonline.org<\/em><\/strong><\/p>\n

  <\/p>\n

S.10B:Newly established hundred per cent export-oriented undertakings-Export or transfer of film software –Deduction under both section is not allowable.(S. 80HHF)<\/strong><\/p>\n

  <\/p>\n

Assessee set up an EOU unit. It claimed deduction u\/s 10B. With regard to its other businesses it claimed deduction under section 80HHF. While computing deduction u\/s 80HHF it included export profit of EOU. The Commissioner (Appeals), however, reduced profit derived from EOU on ground that profit derived by EOU was exempt from tax under section 10B. The Tribunal held that the express intention of Legislature with regard to sections 10B and 80HHF is not to allow deduction under both sections and further, both of said sections expressly prohibits to allow deduction other than allowable under respective sections. Therefore, order of Commissioner (Appeals) was confirmed (A.Y. 2001 – 2002) <\/p>\n

  <\/p>\n

ACIT v. Sri Adhikari Brothers Television Network Ltd. [2012] 137 ITD 154 (Mum.)(Trib.)<\/em><\/strong> <\/strong><\/p>\n

  <\/p>\n

S.11:<\/strong>:Charitable or religious purposes-Application of income- Commercial principles-Annual subscription-One time admission fess – Accumulation o of income- Provision for doubtful debts- Taxes paid was treated as application of income- Amount spent in Germany could not be considered as application of income of the Trust in India for charitable purposes. Annual subscription fee paid to keep the membership alive  cannot be assessable as business income . One time admission fee paid by members is corpus donation hence not assessable as income. Option to accumulate the income has to be applied before expiry of time allowed under section 139(1) there is no provision to condone the delay. [S. 28(iii), 36(i)(vii) , 36(2)(i),139(1)]  <\/strong><\/p>\n

  <\/p>\n

The assessee is a trust registered  under section 12A of the Act. Assessee had filed declaration on income and paid the taxes under Voluntary Disclosure of Income Scheme, 1997. The assessee claimed the payment of taxes as application of income . The assessee also incurred the expenses outside India (Hanover ,Germany), the assessee claimed the said expenses as application of income. The Assessing Officer  held that the expenditure incurred outside India cannot be considered as application of income in India for charitable purpose. The view of Assessing Officer was confirmed by the Commissioner of income –tax (Appeals). On appeal to the Tribunal, the Tribunal held that, the payment of taxes  under VDIS should be treated as application of income of the trust. As regards the expenditure incurred in Germany is concerned, the Tribunal was of the view that the words “is applied to such purpose in India” appearing in section 11(1)(a) of the Act only mean that the purpose of the Trust should be in India and that application of the Trust need not be in India .The Tribunal has accepted the contention of assessee. On appeal by revenue, the court  after referring the Circular no 5 dated June 19, 1968  held  that taxes  paid under the VDIS 1997  was to be deducted before arriving at the commercial income of the Trust available for application of income. As regards the amount spent at Germany the  Court held that the requirement of provision is that the income of the trust should be applied not only to charitable purposes, but also applied in India to such purposes. Therefore, on a proper interpretation of section 11(1)(a) of the Act, the amount spent by assessee –trust in Germany could not be considered as application of income of the Trust for charitable purpose.  <\/p>\n

  <\/p>\n

As regards the option to accumulate the income for future application to charitable purpose has to be exercised by the trust in writing before the expiry  of the time allowed under section 139(1) for furnishing the return of income, as provided in Explanation (iib) below section 11(1) of the Act .In respect all years under consideration  the time has expired and there was no provision to condone the delay . As the assessee has not made the application  with in time the assessee could not be granted time to make good the shortfall in the application of the income  of the trust by permitting the  assessee to apply for accumulation of the amount in shortfall for future application. <\/p>\n

  <\/p>\n

As regards the receipt of annual subscription fees, the assessee trust had not been shown to have performed any specific services  to the members. Whereas the annual  subscription fee were recurring receipt, receivable by the assessee –trust by mere efflux of time irrespective of whether any services were rendered or not to the members, what is contemplated in section 28(iii) is the receipt of fees from particular members to whom specific services have been rendered by trust . The annual subscription fee was paid merely to keep the membership alive on yearly basis. The distinction between the two being clear, and in the absence of any evidence to show that the assessee received fees from members as “quid pro quo” for specific services rendered to them, the tribunal was right in holding that the annual subscriptions fees were not assessable under the section. <\/p>\n

  <\/p>\n

As regards  the one -time admission fee paid by members  they were aware that it could be spent by the assessee only for the purpose of acquiring  a capital asset  therefore the amount must be held to be a corpus donation, not taxable as  income .Income of the trust available for application to charitable purposes in India should be computed not in accordance with the strict provisions of the Act  but should be computed in accordance with commercial principles .Under commercial principle it  has always been reognised that a provision reasonably made for a loss or an outgoing , can be  deducted  from the income if there is apprehension that the debt might became bad . As there was nothing on   record to show that the provision was not made bonafide . Therefore while computing  the income available to the trust for application to charitable purpose in India in accordance with section 11(1)(a) the provision for doubtful debts must be deducted . (A.ys  1988-89, 2002-03to 2006-07)<\/p>\n

  <\/p>\n

DIT v. National Association of Software and Services Companies (2012) 345 ITR 362 \/ 208 Taxman 178 (Delhi) (High Court)         <\/em><\/strong><\/p>\n

  <\/p>\n

S.12A: <\/strong>Trust or institution-Registration-Charitable purposes <\/strong>– TDS deducted on donation made, by the donor – Held the assessee eligible for registration as mere deduction of TDS does not change the nature of donation to commercial receipt. [S. 2(15)]<\/strong><\/p>\n

  <\/p>\n

The assessee was a Trust created with the object of carrying out research in the field of medicines. The assessee received donations from the donors which was utilized in holding conference for doctors in hotels. The said donors had deducted TDS on the said donations. It was held that merely because donors are pharmaceutical companies and they deducted TDS, it would not convert a donation into a commercial receipt on the basis of presumptive inference as long as assessee had credited amount as donations and also issued donation receipts. Thus, the assessee was eligible for grant of registration. <\/p>\n

  <\/p>\n

Heart Care Management v. DIT (IT) (2012) 52 SOT 277 (Delhi)(Trib)<\/em><\/strong><\/p>\n

  <\/p>\n

S.<\/strong>14A: Business expenditure-Disallowance-Exempt income-Stock in trade-DTAA-India-USA-Section <\/strong> 14A applies even if the securities are held as stock-in-trade. Article 7(3) limitation applies to all expenditure  and  not only to s. 44C H.O. expenditure. [S.44C, Art. 7 (3)]<\/strong> <\/strong><\/p>\n

  <\/p>\n

The Tribunal had to consider two issues (i) Whether the provision in Article 7(3) of the India-USA DTAA that a deduction for expenses, including a reasonable allocation of executive and general administrative expenses, would be allowed “in accordance with, and subject to the limitations of, the taxation laws of India<\/em>” would apply to all expenses or only to executive & general admin expenses and (ii) whether s. 14A applied to tax-free income on securities held as stock-in-trade. Held by the Tribunal:<\/p>\n

  <\/p>\n

(i) The qualification in Article 7(3) of the DTAA that the expenses will be allowed “in accordance with the provisions of and subject to the limitations of the taxation laws of that State<\/em>” applies to all expenditure incurred for the business of the PE and not merely to s. 44C alone. The fact that the assessee’s interpretation was accepted in earlier year does not mean that it cannot be departed with;<\/p>\n

  <\/p>\n

(ii) S. 14A talks of making disallowance of expenses incurred in relation to an income not chargeable to tax. No exception, such as the dividend being main or incidental income, has been carved out in the provision. The relation of expenses for disallowance is with the exempt income irrespective of the source or nature of the exempt income. When the legislature in its wisdom has not spelt out any exception coming in the way of applicability of s. 14A, it is wholly impermissible to artificially find any such exception contrary to the language of the provision and the intention of the legislature. Accordingly. s. 14A applies even if the securities are held as stock-in-trade (CIT v Leena Ramachandran<\/a>(Smt)(2011)339 ITR 296 (Ker) (High Court)distinguished). (AY 1997-98)<\/p>\n

  <\/p>\n

JCIT v. American Express Bank Ltd. (Mum.)(Trib.) www.itatonline.org<\/em><\/strong><\/p>\n

  <\/p>\n

S.17(2):  Salary-Perquisite-Tax on salary paid by employer-Rent free accommodation- Tax component of such perquisite value cannot be included in computation of perquisite value of rent free accommodation. (Income –Tax Rules, 1962, Rule 3)<\/strong><\/p>\n

  <\/p>\n

 In an appeal before the High Court the revenue raised the question whether the tax paid by the employer (Japan Airlines International Company Ltd ) is a “Perquisite” within the meaning of  section 17(2) and, therefore , in terms of rule 3 of the Income-Tax Rules 1962 , cannot be taken in to consideration for computing the value of  the perquisite “rent free accommodation”. While dismissing the appeal of revenue the court held that payment of income-tax by the employer  is payment of  employee who has taxable income as an assessee is liable to pay tax. His income is chargeable to tax. It is the obligation of the employee as an assessee to pay tax . Its  this obligation which is being discharged and paid by the employer .Therefore , it would fall within the ambit of section 17(2) (iv). Thus the tax component paid by the employer towards and as income-tax , when an employee is entitled to tax free salary , is a perquisite within the meaning of section 17 (2) and the monetary value of such tax free salary , that is tax component could not be included in computing the perquisite value of rent free accommodation provided by the employer to the employees.(A.Y. 2006-07)<\/p>\n

  <\/p>\n

CIT v. Telsuo Mitera (2012) 345  ITR 256 \/208 Taxman 344(Delhi) (High Court)<\/em><\/strong><\/p>\n

  <\/p>\n

CIT v. Isao Sakai (2012) 345 ITR 256 (Delhi) (High Court)<\/em><\/strong><\/p>\n

  <\/p>\n

CIT v. Yoshimi Kamano (2012) 345 ITR 256(Delhi) (High Court)<\/em><\/strong><\/p>\n

  <\/p>\n

CIT v. Yuji Horikawa (2012) 345 ITR 256 (Delhi) (High Court)<\/em><\/strong><\/p>\n

  <\/p>\n

CIT v. Hidechito Shiga (2012) 345 ITR 269 (Delhi)(High Court)    <\/em><\/strong><\/p>\n

  <\/p>\n

S.23:Income from House Property – Annual Value – property is not let out at all during previous year – no vacancy allowance can be given [S. 23(1)(c )]<\/strong><\/p>\n

  <\/p>\n

Vacancy allowance to be given only when property is let and vacant for part of the year and thus, in a case, where property is not let out at all during previous year, no vacancy allowance can be given under section 23(1)(c ). (AY 2006-07)<\/p>\n

  <\/p>\n

Indra S. Jain (Smt) v. ITO (2012) 52 SOT 270 (Mum) (Trib) <\/em><\/strong><\/p>\n

  <\/p>\n

S.28(i):Business income-Interest on security deposit-Income from other sources- Interest on NSCs and fixed deposit which was kept for securing contract is assessable as business income.(S. 56,145(3)<\/strong><\/p>\n

  <\/p>\n

The assessee is a civil contractor  firm derived its income from contract work for  Government  departments .The assessing Officer rejected the books of account and estimated the income . In appeal the Commissioner (Appeals) held that interest of Rs 3,11, 956 had to be assessed as income from other sources. On appeal to the Tribunal , the Tribunal disallowed the interest and depreciation . On appeal by the assessee to the High Court the Court held that the Tribunal  as well as  the authorities below had erred in holding that interest accrued on security deposits to the extent used for the purpose of securing contract  work would be assessable as income from other sources . The interest income is to be assessed as business income.(A.Y. 2003-04)<\/p>\n

  <\/p>\n

Shyam Bihari v. CIT (2012) 345  ITR 283 (Patna) (High Court)       <\/em><\/strong><\/p>\n

  <\/p>\n

S.28(i):Business Income – Income from undisclosed source – Unexplained sales and expenditure – No addition where no independent evidence brought on record to show assessee suppressed production and made sale of unaccounted production <\/strong><\/p>\n

  <\/p>\n

The assessee was engaged in the manufacture of ingots from iron scrap and its trading. On the basis of information regarding the show-cause notice issued by the Central Excise Department, the AO worked out the unaccounted profit earned by the assessee and added it to the income of the assessee. It was held that there was no merit in any addition being made in the hands of the assessee on the account of the alleged suppression in production and also alleged investment in the purchase of raw materials as there was no independent evidence brought on record to establish that assessee had suppressed its production and made sale of its unaccounted production, outside the books of accounts.  (AY 2004-05) <\/p>\n

  <\/p>\n

ACIT v. A.K. Alloys (2012) 17 ITR 424 (Chandigarh)(Trib) <\/em><\/strong><\/p>\n

  <\/p>\n

S.28(iv): Business income- Perquisite-Amalgamation-Excess fair value cannot be assessed as any benefit or perquisite arising from business or profession.<\/strong><\/p>\n

  <\/p>\n

During relevant assessment year, a company, SIFL, got amalgamated with assessee-company. Pursuant to amalgamation, assets and liabilities and rights and obligations of SIFL vested with assessee-company and those items had been recorded at their fair values. Excess of fair value of net assets taken over by assessee-company over paid-up value of allotted equity shares worked out to Rs. 2,899.68 lakhs and the said surplus amount was transferred by assessee to its General Revenue Account.  Held that the sum of Rs. 2,899.68 lakhs was only a balancing figure arising out of entries passed in books of account as a result of amalgamation and same could not be treated as income taxable u\/s 28(iv) (A.Y. 2002 – 2003) <\/p>\n

  <\/p>\n

Spencer & Co. Ltd. v. ACIT [2012] 137 ITD 141(TM)(Chennai)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.32:Depreciation- Goodwill-Intangible- “Goodwill” is an intangible asset eligible for depreciation.<\/strong> <\/strong><\/p>\n

  <\/p>\n

Pursuant to an amalgamation of another company with the assessee, the difference between the consideration paid by the assessee and the net value of assets of the amalgamating company was treated by the assessee as “goodwill” and depreciation of Rs. 54 lakhs was claimed thereon u\/s 32(1)(ii). The AO rejected the claim on the ground that (i) “goodwill” was not an “intangible asset” as defined in Explanation 3 to s. 32(1) and (ii) the assessee had not paid anything for the same. The Tribunal and High Court upheld the assessee’s claim. On appeal by the department to the Supreme Court, Held dismissing the appeal:<\/strong><\/p>\n

  <\/p>\n

Explanation 3 to s. 32 states that the expression “asset” shall mean an intangible asset, being know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature. The words “any other business or commercial rights of similar nature” in clause (b) of Explanation 3 indicates that goodwill would fall under the expression “any other business or commercial right of a similar nature“. The principle of ejusdem generis would strictly apply while interpreting the said expression which finds place in Explanation 3(b). Consequently, “Goodwill” is an asset under Explanation 3(b) to s. 32(1) & eligible for depreciation. Though the AO held that the assessee had not “paid” anything for the goodwill, this cannot be accepted because (a) the CIT (A) & Tribunal (correctly) held that that the difference between the cost of an asset and the amount paid in the process of amalgamation constituted “goodwill” and (b) this aspect was not challenged by the department before the High Court.(A.Y.   ) <\/p>\n

  <\/p>\n

CIT v. Smifs Securities Ltd. (SC) www.itatonline.org. <\/em><\/strong><\/p>\n

  <\/p>\n

S.32(2):Depreciation- Set off –Unabsorbed depreciation-Unabsorbed depreciation of AYs 1997-98 to 2001-02 is eligible for relief granted by amended s. 32(2) in AY 2002-03.<\/strong> <\/strong><\/p>\n

  <\/p>\n

 In AY 2006-07, the assessee claimed a set-off of the unabsorbed depreciation brought forward from AY 1997-98, 1999-2000, 2000-01 & 2001-02. The AO allowed the claim u\/s 143(3). Subsequently, within four years from the end of the AY he reopened the assessment on the ground that pursuant to the amendment to s. 32(2) by the Finance Act No.2 of 1996 w.e.f. AY 1997-98, the unabsorbed depreciation for AY 1997-98 could be carried forward up to a maximum period of 8 years from the year in which it was first computed and this period expired in AY 2005-06 and could not be allowed in AY 2006-07. The assessee filed a Writ Petition to challenge the reopening in which it claimed (a) that the reopening was based on a “change of opinion” and (b) that as s. 32(2) was amended in AY 2002-03 to remove the time period of 8 years, the claim for unabsorbed depreciation of AY 1997-98 was allowable without any time limit. Held  by the High Court upholding the assessee’s plea:<\/p>\n

  <\/p>\n

(i)         There must be “tangible material” to reopen the assessment and it cannot be done because he has drawn another inference from the documents already considered by him because it would amount to a change of opinion. The assessee had disclosed the facts and if the AO drew a wrong legal inference, he cannot take benefit of his own wrong & reopen u\/s 147. <\/p>\n

  <\/p>\n

 (ii)       Prior to the Finance Act No.2 of 1996 unabsorbed depreciation could be carry forward indefinitely. The Finance Act No.2 of 1996 restricted the period of carry forward & set-off of unabsorbed depreciation to 8 years from AY1997-98. Circular No.762 dated 18.2.1998 clarified that the brought forward depreciation for the earlier years would be added to the depreciation for AY 1997-98 and the period of 8 years would begin from AY 1997-98 onwards. S. 32 (2) was amended by Finance Act, 2001 w.e.f. AY 2002-03 to restore the position as it was prevailing prior to the Finance Act No. 2 of 1996 and the period of 8 years was done away with. In Circular No.14 of 2001, the CBDT clarified that the removal of the 8 year time period was “with a view to enable the industry to conserve sufficient funds to replace plant and machinery“. The effect of the amendment is that the unabsorbed depreciation available to an assessee on 1.4.2002 (AY 2002-03) has to be dealt with in accordance with the s. 32(2) as amended by the Finance Act, 2001 and not by s. 32(2) as it stood before the said amendment. Had the intention of the Legislature been to allow unabsorbed depreciation allowance worked out in AY 1997-98 only for eight subsequent assessment years even after the amendment of s. 32(2) by Finance Act, 2001 it would have incorporated a provision to that effect. However, it does not contain any such provision and so a purposive and harmonious interpretation has to be taken. Therefore, the unabsorbed depreciation pertaining to AY 1997-98 can be carried forward for set-off indefinitely.(A.Y.2006-07) <\/p>\n

  <\/p>\n

General Motors India Pvt. Ltd v. DCIT (Guj.)(High Court) www.itatonline.org <\/em><\/strong><\/p>\n

  <\/p>\n

S. 36(1)(iii):Deductions-Interest on borrowed capital-Pre-construction interest-<\/strong> Funds invested by the assessee and the interest earned were <\/strong>inextricably linked<\/strong> with the setting up of the power plant and, therefore, the interest earned on fixed deposit of amounts borrowed cannot be treated as a revenue receipt. <\/strong><\/p>\n

  <\/p>\n

The assessee was in the process of expansion of its business by setting up new units for generation of power. It borrowed funds for the project and incurred interest expenditure which was capitalized. A part of the funds were invested in temporary deposits and in deposits by way of margin or giving advances<\/em> etc. for the purpose of expansion. Such deposits earned interest of Rs.331.58 lakhs. The assessee claimed, relying on CIT v. Bokaro Steel Ltd <\/strong> (1999 )236 ITR 315 (SC) that the interest earned had to be reduced from the interest paid on the borrowings and was not assessable as “income”. The CIT(A) accepted the claim but the Tribunal rejected it on the ground that CIT v. Bokaro Steel<\/strong> Ltd (1999)236 ITR 315 (SC) and the other judgements on the point were not good law<\/em> in view of the Proviso to s. 36(1)(iii) inserted w.e.f. 1.4.2004. On appeal by the assessee to the High Court, Held   reversing the Tribunal:<\/p>\n

  <\/p>\n

In Indian Oil Panipat Power Consortium Limited  v. ITO<\/strong> (2009 )315 ITR 255 (Delhi)(High Court) it was held that if the interest received was “<\/strong>inextricably linked<\/strong>”<\/strong> with the setting up of the plant, it could not be treated as income from other sources. This reasoning is in line with Bokaro Steel Ltd<\/strong>, <\/strong>CIT v. <\/strong>Karnataka Power<\/strong>Corp (2001)<\/strong> 247 ITR 268 (SC) & Bongaigaon Refinery<\/strong> and Petro chemicals Ltd  v.CIT (2001251 ITR 329(SC). Though the proviso to s. 36(1)(iii) enacts that any amount of the interest paid towards (“in respect of”) capital borrowed for acquisition of an asset or for extension of existing business regardless of its capitalization in the books or otherwise, “for any period beginning from the date on which the capital was borrowed for acquisition of the asset till the date on which such asset was first put to use<\/em>” would not qualify as deduction<\/strong>, in all these cases, when the interest was received by the assessee towards interest paid for fixed deposits when the borrowed funds could not be immediately put to use for the purpose for which they were taken, the Courts held that if the receipt is “inextricably linked<\/strong>”<\/strong> to the setting up of the project, it would be capital receipt not liable to tax<\/strong> but ultimately be used to reduce the cost of the project. By the same logic, in the present case too, the funds invested by the assessee and the interest earned were inextricably linked<\/strong> with the setting up of the power plant and, therefore, the interest earned on fixed deposit of amounts borrowed cannot be treated as a revenue receipt.(A.Y.   )<\/p>\n

  <\/p>\n

NTPC SAIL Power Company Ltd v. CIT (Delhi)(High Court) www.itatonline.org<\/em><\/h2>\n

S. 36(1)(iii):Deductions-Interest on borrowed capital-Share capital- No interest –bearing funds were utilized by the assessee for subscribing to the share capital of its subsidiary, hence  additions cannot be made.<\/strong><\/p>\n

  <\/p>\n

The assessee demonstrated that working capital loan was not utilized for investment   with the subsidiary . The Tribunal held that though the assessee had failed to prove that the investment with the subsidiary is for the purpose of business , it has utilized interest free , funds for making  the said investment as the assessee’s  shareholders’ fund comprising of share capital and reserves and surplus , and also cash profits during the relevant year are much more than the amount invested by the assessee in the share capital of its subsidiary during the year and therefore , no part of interest on borrowings could be disallowed.(A.Y.2007-08)<\/p>\n

  <\/p>\n

Visen Industries Ltd v. Addl. CIT (2012) 74 DTR 57(TM)(Mum.)(Trib.)         <\/em><\/strong><\/p>\n

  <\/p>\n

 S.37(1): Business expenditure-Cost of production of feature film-Producer of feature film-Even if Rule 9A is applied , the assessee is entitled to claim the un recouped cost of production as loss. (Rule 9A)<\/strong><\/p>\n

  <\/p>\n

The Assessing Officer   disallowed  the excess un re recouped cost of production of film . In appeal the Commissioner of Income –tax(Appeals)  allowed the claim. On further appeal to Tribunal  by the revenue the Tribunal held that  the Tribunal held that the assessee being producer of feature film is entitled to claim the un recouped  cost of production in terms of Rule 9A(3)  as also de hors the provisions of Rule 9A.(A.Y.2005-06)<\/p>\n

  <\/p>\n

Addl.CIT v. Nitin M. Panchamiya (2012) 73 DTR 202 (Mum.)(Trib.)  <\/em><\/strong><\/p>\n

  <\/p>\n

S.37(1): Business expenditure – Capital or revenue expenditure – Expenditure on purchase of furniture in leasehold premises – Held that expenditure incurred for capital asset thus, not allowable as revenue expenditure –Depreciation allowed. (S. 32)<\/strong><\/p>\n

  <\/p>\n

Huge expenditure incurred by the assessee on purchase of plywood, furniture, etc. for making partitions, cabins, cubicles, desks, etc. in its leasehold premises was expenditure incurred for capital asset and, therefore, it was not allowable as deduction but is subject to allowance of depreciation in terms of Explanation. 1 to 32. (AY 2001-02 to 2004-05)<\/p>\n

  <\/p>\n

Free India Assurance Services Ltd. v. Dy. CIT (2012) 147 TTJ 423 (Mum.) (Trib.) <\/em><\/strong><\/p>\n

  <\/p>\n

S.37(1): Business expenditure – Expenditure for increase in share capital after commencement of business – Held expenditure of revenue nature <\/strong><\/p>\n

  <\/p>\n

Expenditure incurred for increase in share capital of company after commencement of business is not capital expenditure but a regular business expenditure of revenue nature. (AY 2005-06)<\/p>\n

  <\/p>\n

Dy. CIT v. Raj Laxmi Stone Crusher (P.) Ltd. (2012) 52 SOT 112 (Delhi)(Trib.)  <\/em><\/strong><\/p>\n

  <\/p>\n

S.40(a)(ia) : Amounts not deductible – Deduction at source – Non-resident –One non-resident to another non-resident-Hiring charges for transponder- Outright sale  television programme. (S.9(1) (vi),195 )<\/strong><\/p>\n

  <\/p>\n

The assessee, a Mauritius company, made payment to Panamsat, USA, for hire of a “transponder satellite”. The AO held that the said hire charges constituted “royalty” and that the assessee ought to have deducted TDS u\/s 195 and that as it had not done so, the amount was to be disallowed u\/s 40(a)(ia).The Tribunal held that payment of hiring charges for transponder made by assessee a foreign company , to a US Company is not in the nature of royalty within the meaning Indo –US DTAA as a no technology is “made available” in the hiring of transponder and therefore  assessee is not required to deduct tax at source under section 195. The Tribunal also held that payment has been made by one non-resident to another non-resident outside India on the basis of contract  executed outside India .Accordingly addition was deleted .Similarly payment made  by the assessee foreign company to another Mauriitian company  being payment for outright sale of Television programmes and not merely for broad casting rights of such programmes , assessee was not required to deduct tax at source. The Tribunal also held that consideration paid for sale, distribution or exhibition of cinematographic films does not fall within the  term “ royalty” in view of explanation 2 to section 9 (1) (vi), hence payments made by the assessee are not liable to  deduct tax in India, hence provision of section 195 is not applicable.(A.Y. 2002-03)<\/p>\n

  <\/p>\n

B4U International Holdings Ltd v. DCIT(2012)74 DTR 162 (Mum.)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.40(a)(ia): Amounts not deductible-Deduction at source-Production of feature film- Individual- Since the provisions of section 194C  were not applicable to individuals prior to Ist April ,2007 , the assessee is under no obligation to deduct tax at source  hence no disallowance can be made.(S.194C, 194J )<\/strong><\/p>\n

  <\/p>\n

The assessee who is an individual engaged in the business of production of cinematographic  films  made payments to director of film . The assessee  deducted the  tax for the  assessment year 2005-06  at 2.2%  treating the said payment as payment to contractor.   The Assessee contended that  he is not liable to deduct the tax at source  by mistake he has deducted  tax at  source  the assessee  should not be held liable for disallowance. The  Assessing  Officer held that the payments falls under the head fees for technical services hence provision of section 194J is applicable  hence the assessee should have deducted the tax  at 5.23% hence  he disallowed the  payment by applying the provisions of section 40(a)(ia) . In appeal Commissioner of Income-tax (appeals) also confirmed the order of assessing officer. The Tribunal  held that the payments made by the assessee falls under the expression “work” hence fall under the provisions of section 194C. Since  the provisions of section 194C  of the Act is not applicable to individuals prior to 1st April, 2007, the assessee was under no obligation to deduct tax at source  for the period under consideration  therefore disallowance made under section 40(a)(ia) of the Act cannot be sustained .(A.Y.2005-06)<\/p>\n

  <\/p>\n

Nitin M.Panchamiya v. Addl.CIT ( 2012) 73 DTR 202 (Mum.)(Trib.) <\/em><\/strong><\/p>\n

  <\/p>\n

S.40(b):Amounts not deductible- Limits- Non business income <\/strong>– For s. 40(b)(v) limits, P&L A\/c profits (including non-business income<\/em>) have to be taken & not only “profits & gains of business” as computed u\/s 28 to 43D (S. 28, to 43D)<\/strong> <\/strong><\/p>\n

  <\/p>\n

S. 40(b)(v) permits a firm to claim deduction of remuneration paid to a working partner upto certain limits of the “book profit<\/em>“. The term “book profit” is defined in Explanation 3 to mean “the net profit, as shown in the profit and loss account for the relevant previous year, computed in the manner laid down in Chapter IV-D … <\/em>“. The High Court had to consider whether the term “book profit” meant the profit as per the P&L A\/c (which included non-business income<\/em>) or the “Profits & gains of business as computed under Chapter IV-D<\/em>“. Held by the High Court:<\/p>\n

  <\/p>\n

The said chapter nowhere provides that method of accounting for the purpose of ascertaining net profit should be the only income from business alone and not from other sources. S. 29 provides how the income from profits and gains of business should be computed and this has to be done as provided u\/s 30 to 43D. By virtue of s. 5 that total incomes of any previous years includes all income from whatever source derived. Thus for the purpose of s. 40(b)(v) read with the Explanation, there cannot be a separate method of accounting for ascertaining net profit and\/or book-profit. The said section nowhere provides that the net profit as shown in the P&L A\/c is not the profit computed under the head profit and gains of business. Following the principle laid down in Apollo Tyres Ltd v CIT (2002) 255 ITR 273 (SC), the AO is not entitled to recompute the P&L profits. Even if income from other sources is included in the P&L A\/c, to ascertain the net profit qua book-profit for computation of remuneration of the partners the same cannot be discarded.(AY 1995-96 to 1998-99)<\/p>\n

  <\/p>\n

Md. Serajuddin & Brothers v. CIT (Cal.)(High Court) www.itatonline.org<\/em><\/strong><\/p>\n

  <\/p>\n

S.40A(2)(b):Expenses or payments not deductible- Excessive or unreasonable-Market price- Disallowance can be made only if the payment made was excess of market price.  <\/strong><\/p>\n

  <\/p>\n

Disallowance u\/s 40A(2)(b) can be made only to extent payment for services is excessive or unreasonable vis-a-vis market price of such services, but what is essentially required is that market price of these services is established and then amount paid in excess of such market price is to be disallowed. During year, assessee paid salary to his son at rate of Rs. 20,000 per month and claimed deduction of Rs. 2.40 lakhs as business expenditure. Assessing Officer found that assessee’s son rendered services but opined that assessee had paid excess salary to his son. He, therefore, estimated salary of son at rate of Rs. 5,000 per month and disallowed a sum of Rs. 1.80 lakhs u\/s 40A(2)(b). Since no findings were given by Assessing Officer that payment made by assessee was excessive or unreasonable vis-a-vis market price, estimate of salary made by Assessing Officer at rate of Rs. 5,000 per month was against express provisions of section 40A(2)(b). Disallowance of Rs. 60,000 u\/s 40A(2)(b) would meet ends of justice. (A.Y. 2007 – 2008)<\/p>\n

  <\/p>\n

Vinod Kumar v. JCIT [2012] 137 ITD 48 (Chandigarh)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.41(1):Profits chargeable tax-Remission or cessation of trading liability-Liability  shown in books of account – Even in respect of time barred debts  provision of section 41(1) cannot  be applied.<\/strong><\/p>\n

  <\/p>\n

The Assessing Officer noticed that the liability shown in the balance sheet are more than one year  hence brought to tax by applying the provisions of section 41(1) of the Act. In appeal Commissioner of Income-tax (Appeals)  also confirmed addition . The Tribunal held that even in respect of time barred debt provision of section 41(1) cannot be applied . On the facts the liabilities were only of one year old  therefore addition confirmed by the Commissioner  of  Income-tax (Appeals) were deleted .(A,Y. 2005-06)    <\/p>\n

  <\/p>\n

Nitin M. Panchamiya v. Addl.CIT ( 2012) 73 DTR 202 ( Mum.)(Trib.) <\/em><\/strong><\/p>\n

  <\/p>\n

S.41(1):<\/strong>Profits chargeable tax-<\/strong>Remission or Cessation of liability –Liabilities of four months-All liabilities were maximum 4 months old, 95% of the unclaimed balances arose only during the last four months  it was held that the  Assessing Officer  was not justified in writing back to the income of the assessee for the same year<\/strong><\/p>\n

  <\/p>\n

Section 41 is applicable in the year in which there was a remission or cessation of a trading liability incurred in an earlier year. It was recorded that all liabilities of the assessee were maximum 4 months old and 95% of the unclaimed balances arose only during the last four months, the Assessing Officer  was not justified in writing back to the income of the assessee for the same year. Thus addition was deleted as the department had not brought on record any evidence to establish that there was any remission or cessation of liability. (A.Y.2005-06)<\/p>\n

  <\/p>\n

Dy.CIT v. Bax Global India P. Ltd, (2012) 17 ITR 414 (Delhi) (Trib.) <\/em><\/strong> <\/strong><\/p>\n

  <\/p>\n

S.41(1):Profits chargeable to tax – Remission  or Cessation of Liability –Blocked account to reserve account- Amount in transferred from inter-branch transaction blocked accounts to reserves through P&L a\/c, as the primary condition of sum being allowed as deduction in earlier years not fulfilled, hence provisions of section 41 could not be invoked. <\/strong><\/p>\n

  <\/p>\n

The amount was lying in the accounts which were known as inter-branch account. It was expected that all these inter-branch accounts should get squared up on consolidation. Due to human error of accounting or lack of proper advice from different branches, the amount in question remained either in debit or credit in different inter branch accounts and the bank had admittedly not reconciled for over a long period of time. It was held that in case of such sum section 41 could not be invoked as department failed to prove that sum in question forming part of so- called inter-branch transaction was earlier allowed as deduction. (AY 2005-06) <\/p>\n

  <\/p>\n

Punjab National Bank v. Addl.CIT (2012) 17 ITR 462 (Delhi)(Trib.) <\/em><\/strong><\/p>\n

  <\/p>\n

S.43(5):Definitions – Speculative transactions –Actual delivery taken by agent- Purchase and sale of shares by the agent of the assessee ,loss on the transaction  cannot be  held to be speculative. <\/strong><\/p>\n

  <\/p>\n

Where the actual delivery of shares was not taken by assessee herself but was given or received by an agent of the assessee, it was held that loss from such transaction was not a speculative loss within the meaning of section 43(5). (AY 2008-09)<\/p>\n

  <\/p>\n

Dy. CIT v.  S. Thilagavathy (Dr.) (2012) 17 ITR 506 ( Chennai) (Trib.) <\/em><\/strong><\/p>\n

  <\/p>\n

S.44AD: Civil construction- Computation- Interest on security deposit- Gross contract receipt above 40 lakhs –Provision is not applicable.<\/strong><\/p>\n

  <\/p>\n

The assessee is a civil contractor  firm derived its income from contract work for  Government  departments . The Assessing Officer applied the provision of section 145 (3) and calculated the net profit at the rate of 8 percentage of the gross receipt  after consideration of expenses debited in the trading account  depreciation and interest and salary paid to partners. In appeal the Commissioner (Appeals)  held that the net profit of 6 percent of  contract receipt, subject to conditions of section 40(b) . The Commissioner (Appeals) held that interest of Rs.3,11,956 had to be assessed as income from other sources. On appeal the Tribunal disallowed the interest and depreciation. On appeal by the assessee to the High Court the Court held that the Tribunal  as well as  the authorities below had erred in holding that interest accrued on security deposits to the extent used for the purpose of securing contract  work would be assessable as income from other sources. The interest income is to be assessed as business income. The Court also held that Tribunal  and authorities below had been guided by the provisions of section 44AD, when the said section is clearly not applicable to the assessee as its gross contract receipts were  above 40 lakhs. As per the circular  dated 31st  1965, the gross profit should be estimated and deduction and allowances including the depreciation allowance should be separately deducted from the gross profit . If the net profit is required to be estimated , it should be estimated subject to the allowance for depreciation and depreciation allowance should be deducted there from . The High Court remitted the matter back to the Assessing Officer  for passing a fresh order.(A.Y. 2003-04)<\/p>\n

  <\/p>\n

Shyam Bihari v. CIT (2012) 345  ITR 283 (Patna)(High Court)       <\/em><\/strong><\/p>\n

  <\/p>\n

S.44B: Shipping business-Non-residents-Computation-Slot  charter-Voyage charter-DTAA-INDIA-UK-  Income from “slot charter” is exempt as income from “operation of ships” as per Article 9.(Art  9 )<\/strong><\/strong> <\/p>\n

  <\/p>\n

The assessee, a UK company, engaged in the international transportation of goods by sea, entered into Slot Hire Agreements with Orient Express Lines Mauritius (“OEL”), under which OEL provided container slot spaces to the assessee on its ships. Availing the slot hire facility, the assessee arranged for the transportation of the goods from ports in India to their international destinations. The assessee claimed that the income from the “slot hire charges” was exempt under Article 9<\/em> of the India-UK DTAA. The AO rejected the claim on the ground that Article 9 dealt with “income from the operation of ships<\/em>” and that slot hire charges were not covered. However, the CIT(A) and the Tribunal allowed the claim. On appeal by the department to the High Court, Held dismissing the appeal:<\/p>\n

  <\/p>\n

 There is no distinction in principle between a slot charter and a voyage charter of a part of a ship. They are both in a sense charterers of a space in a ship. The phrase “operation of ships” in Article 9 must be understood in the context of the phrase “the business of operation of ships” in s. 44B. As income from slot hire agreements falls within s. 44B it must be held to be within the ambit of Article 9(1)<\/strong>.<\/strong> Article 9 does not require the ship to be owned<\/strong> <\/strong>by an the assessee. It merely requires the income to be “from the operation of ships in international traffic”. A charter is certainly contemplated by Article 9 and an enterprise that controls the management\/operation of the ship<\/strong> would be included in Article 9 even if it does not own the ship (<\/strong>DIT v. KLM Royal Dutch Airlines (2009)<\/strong> 178 Taxman 291\/(2010) 325 ITR 300(2008) 220 CTR 268\/15 DTR 113. (Dellhi)(High Court)) followed)<\/p>\n

  <\/p>\n

DIT v. Balaji Shipping UK Ltd (Bom.)(High Court) <\/em>www.itatonline.org<\/em><\/a><\/h2>\n

S.45:Capital gains- Business income-Investment in shares- Tests laid down to distinguish shares gains as LTCG\/STCG vs. business profits.(S 28(i) )<\/strong> <\/strong><\/p>\n

  <\/p>\n

The assessee offered the gains from buying and selling shares as LTCG\/ STCG. The AO held that the assessee was “dealing heavily in shares<\/em>” with high frequency and magnitude<\/em> and that the gains were assessable as business profits. This was reversed by the CIT (A) and Tribunal. On appeal by the department to the High Court, Held dismissing the appeal:<\/p>\n

  <\/p>\n

In CIT v Rewashanker A. Kothari (2006) 283 ITR 338 (Guj) six objective tests have been laid down to distinguish between capital gains and business profits on sale of shares. From this, it is clear that where number of transactions of sale and purchase of shares takes place, the most important test<\/em> is the volume, frequency, continuity and regularity of transactions of purchase and sale of the shares. However, where there is repetition and continuity, coupled with magnitude of the transaction, bearing reasonable proportion to the strength of holding<\/em>, then an inference can be drawn that activity is in the nature of business. Learned counsel for the revenue from the records could not demonstrate that there were large number of transactions which had frequency, volume, continuity and regularity and fell within the tests laid down by the Division Bench of this Court. Consequently, the income earned by the assessee from trading in shares under the head long term capital gain \/ short term capital gain was correctly shown. <\/p>\n

  <\/p>\n

CIT v. Vaibhav J. Shah (HUF) (Guj.)(High Court) www.itatonline.org<\/em><\/strong><\/p>\n

  <\/p>\n

S.45:Capital gains–Ownership of land-Firm-Partner-Capital gains assessable in the hands of partner. <\/h2>\n

Assessee-firm had filed its return declaring certain income as long-term capital gains generated out of sale of land. Later on, assessee filed a revised return wherein it was explained that land sold actually belonged to ‘J’ a partner of assessee-firm, and, therefore, long-term capital gain was accountable in his hands. Assessing Officer took a view that capital gain was taxable in hands of Assessee firm and not in hands of ‘J’ as individual on ground that land and buildings were shown in balance-sheet of firm as its assets and assessee-firm had claimed depreciation on buildings. On appeal, it was noted that one ‘JM’had carried on a business – After death of JM, business was carried on by his four sons including ‘J’ by constituting assessee-firm. Land property in question belonging to estate of ‘JM’ was not specifically assigned to partnership firm either by act, deed or conduct as wives of partners were also co-owners. However, same was used by firm for business. Subsequently, at time of dissolution of firm, a release deed was executed whereby land in question came to share of ‘J’ after paying certain amount to other partners. It was thereafter ‘J’ sold land property. Thus on facts, it was apparent that property belonged to ‘J’ in his individual capacity and, therefore, capital gain arising on sale of said property was assessable to tax in his hands and not in hands of assessee-firm. (A.Y. 2007 – 2008) <\/strong><\/p>\n

  <\/p>\n

DCIT v. South India Pulverising Mills [2012] 137 ITD 1(TM) (Chandigarh)(Trib.)<\/em><\/strong> <\/strong><\/p>\n

  <\/p>\n

S.47:Capital gains- Transaction not regarded as transfer-Amalgamation- Excess value cannot be assessed as business income. [S. 2(27), S. 28(iv)]<\/strong><\/p>\n

  <\/p>\n

During relevant assessment year, a company, SIFL, got amalgamated with assessee-company. Pursuant to amalgamation, assets and liabilities and rights and obligations of SIFL vested with assessee-company and those items had been recorded at their fair values. Excess of fair value of net assets taken over by assessee-company over paid-up value of allotted equity shares worked out to Rs.2,899.68 lakhs and the said surplus amount was transferred by assessee to its General Revenue Account. Held that the assessee had acquired business of another company through medium of amalgamation, and in view of provisions of section 47(vi), there was no transfer as such of any capital asset. Therefore, question of taxing capital gains did not arise.(A.Y. 2002 – 2003)<\/p>\n

  <\/p>\n

Spencer & Co. Ltd.v. ACIT [2012] 137 ITD 141 (TM)(Chennai)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.48:Capital gains-Cost of improvement-PMS fee-Investment portfolio- PMS fee held to be deductible expenditure.(S.45 )<\/strong> <\/strong><\/p>\n

  <\/p>\n

The assessee entered into an investment management (Portfolio Management Scheme) agreement with ENAM AMC pursuant to which it paid Rs. 2.11 crores as “performance fees\/ maintenance fee”. This was treated as a cost of purchase of the shares. The AO disallowed the claim & the CIT (A) confirmed it on the basis that the as the PMS gains were assessable as “capital gains”, the expenditure was neither cost of investment or improvement nor an expenditure incidental to sale. Before the Tribunal, the assessee relied on its own case (KRA Holding & Trading Pvt Ltd vs. DCIT<\/a>) where it had been held (dissenting<\/em> from Davendra Kothari 136 TTJ 188 (Mum.)(Trib.) that as there was a nexus between the expenditure and the acquisition of shares<\/em>, the same was allowable u\/s 48. The department relied on Homi K. Bhabha vs. ITO<\/a> which had (dissenting <\/em>from KRA Holdings<\/a>) held that PMS fees is not deductible against capital gains. Held by the Tribunal:<\/p>\n

  <\/p>\n

The Mumbai Bench declined to follow the decision of the Pune Bench of the Tribunal. It is the settled proposition of law that when two view are possible on the same issue the view which is favourable to the assessee has to be followed (CIT vs. Vegetable Products (1973) 88 ITR 192 (SC)). Further, as the Tribunal in the assessee’s own case has already taken a view in favour of the assessee, that has to be followed unless it is reversed by a higher court. (AY 2007-08)<\/p>\n

  <\/p>\n

KRA Holding & Trading Pvt. Ltd v. DCIT (Pune)<\/em><\/a>(Trib.) www.itatonline.org<\/em><\/h2>\n

S. 50B: Capital Gains –<\/strong> Slump Sale- <\/strong>Lump-sum compensation received on transfer of business for discontinuance of business – Held to be long term capital gain <\/strong><\/p>\n

  <\/p>\n

The assessee was a proprietor of a going concern engaged in providing consultancy services. The concern was taken over by a company. The assessee received a compensation of Rs. 1,20,00,000 for discontinuance of the business. It was held that the lump- sum compensation so received was in nature of long term capital gain chargeable to tax as it was case of transfer of business was for lump-sum consideration. The intention of assessee was eloquently clear from the disclosure of accounting policies. (AY 2008-09)<\/p>\n

  <\/p>\n

ACIT v.  Sangeeta Wij (Smt)(2012) 17 ITR 162 (Delhi)(Trib.)  <\/em><\/strong><\/p>\n

  <\/p>\n

S.54EC: Capital gains-Investment in bonds- Exemption-<\/strong> Fact that s. 54EC bonds were available during the 6 months & that there were alternative bonds available irrelevant if the bonds not available on the last date.<\/strong> <\/strong><\/p>\n

  <\/p>\n

The assessee sold factory building on 22.3.2006 and earned LTCG of Rs.49.36 lakhs. The LTCG was invested in s. 54EC bonds of Rural Electrification Corporation (“REC Bonds”) on 31.1.2007, beyond the period of 6 months<\/em> (21.9.2006) specified in s. 54EC. The assessee claimed that the delay was due to the fact that for the period from 4.8.2006 to 22.1.2007, the bonds were not available<\/em> and the investment was made when available. The Tribunal allowed the assessee’s claim (included in file<\/em>). Before the High Court, the department argued that (a) even if the bonds were not available for a part of the period, they were available<\/em> for some time in the period after the transfer (1.7.2006 to 3.8.2006) and the assessee ought to have invested then & (b) the s. 54EC bonds issued by National Highway Authority<\/em> (NHAI) were available and the assessee could have invested in them. Held by the High Court dismissing the appeal: <\/p>\n

  <\/p>\n

(i)         The department’s contention that the assessee ought to have invested in the period that the S. 54EC bonds were available (1.7.2006 to 3.8.2006) after the transfer is not well founded. The assessee was entitled to wait till the last date (21.9.2006) to invest in the bonds. As of that date, the bonds were not available. The fact that they were available in an earlier period after the transfer makes no difference because the assessee right to buy the bonds upto the last date cannot be prejudiced. Lex not cogit impossibila<\/em> (law does not compel a man to do that which he cannot possibly perform) and impossibilum nulla oblignto est<\/em> (law does not expect a party to do the impossible) are well known maxims in law and would squarely apply to the present case;<\/p>\n

  <\/p>\n

(ii)        The department’s contention that the assessee ought to have purchased the alternative s. 54EC NHAI bonds is also not well founded because if s. 54EC confers a choice investing either in the REC bonds or the NHAI bonds, the revenue cannot insist that the assessee ought to have invested in the NHAI bonds. <\/p>\n

  <\/p>\n

CIT v. Cello Plast (Bom.)(High Court) www.itatonline.org<\/em><\/strong><\/p>\n

  <\/p>\n

S. 54EC: Capital Gains – <\/strong>Investment in bonds- Exemption-<\/strong>– Purchase of REC Bond prior to sale of property – Exemption disallowed as the investment was made before the date of transfer.<\/strong><\/p>\n

  <\/p>\n

As per Section 54EC of the Act the investment in specified bond is to be made ‘within specified six months after date of such transfer’. Thus, exemption claimed on the ground that assessee had purchased REC bonds prior to sale of property was disallowed as the investment was made before the date of transfer.(A.Y.2008-09)<\/p>\n

  <\/p>\n

Dakshaben R. Patel (Smt) v. ACIT (2012) 52 SOT 212 (Ahd.) (Trib.)  <\/em><\/strong><\/p>\n

  <\/p>\n

S. 54EC: Capital Gains –<\/strong> Investment in bonds- <\/strong> Exemption – Investment out of total capital gains in REC bonds, deduction cannot be denied on the ground that the assessee has availed the exemption u\/s 54F also against a part of the capital gain. (S.54F )<\/strong><\/p>\n

  <\/p>\n

As per Section 54EC, expression ‘the whole or any part of capital gains in long term specified assets’ makes it clear that the exemption u\/s 54EC is available even when the part of capital gain is invested in specified long term  asset. There is no dispute that the assessee has invested out of total capital gain in REC bonds within the prescribed period of time as provided u\/s 54EC. Therefore, once the conditions as prescribed u\/s 54EC are complied with, then the deduction cannot be denied on the ground that the assessee has availed the exemption u\/s 54F also against a part of the capital gain. (AY 2007-08) <\/p>\n

  <\/p>\n

ACIT v. Deepak S. Bheda (2012) 52 SOT 327 (Mum.) (Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S. 54EC: Capital Gains –<\/strong> Investment in bonds- <\/strong> Exemption-Beneficial owners-Clubbing of income- Separate exemption is available in respect of income clubbed  under section 64. (S.64 )   <\/strong><\/p>\n

  <\/p>\n

The assessee earned long term capital gain on sale of shares. The two children of assessee, being beneficial owners also earned LTCG on sale of beneficial shares. The assessee along with his minor children invested amount of long term capital gain in REC bonds and claimed deduction u\/s 54EC. The AO clubbed the income of the minor children in the hands of the assessee but disallowed the claim of deduction on account of minor children. It was held that the in case of clubbing of minor\/ spouse, all deductions are to be allowed while computing income of minor\/spouse and only net taxable to be clubbed u\/s 64. Therefore, where income of assessee’s minor children was clubbed with his income, assessee was eligible for deduction u\/s 54EC on investment in REC capital gain bonds on account of minor’s income from long-term capital gains separately. (AY 2007-08)   <\/p>\n

  <\/p>\n

Dy. CIT v. Rajeev Goyal (2012) 52 SOT 335 (Kol.) (Trib.) <\/em><\/strong><\/p>\n

  <\/p>\n

S.54F:Capital Gains –<\/strong> Investment in residential house- <\/strong> Exemption – Investment in four 4 flats – Held that exemption allowed as requirement of assessee family met-out only by enlarging residential unit by merging 4 flats and that too prior to handing over of the possession of said residential unit<\/strong><\/p>\n

  <\/p>\n

The assessee earned capital gain from sale of ancestral property. The assessee claimed exemption u\/s 54F in respect of amount invested towards purchase of four flats which were converted into one residential unit. The AO allowed exemption only in respect one flat by holding that flat were separate and independent residential unit having separate kitchen and entrance and thus, according to him flat could not be said as adjacent flats even though builders had referred them as composite unit. It was held by the Tribunal that, if requirement of assessee family was met-out only by enlarging residential unit by merging 4 flats and that too prior to handing over of the possession of said residential unit, then said converted residential unit would be treated as a residential house as stipulated u\/s 54F and thus, claim of the assessee was allowed. (AY 2007-08) <\/strong><\/p>\n

  <\/p>\n

ACIT v. Deepak S. Bheda (2012) 52 SOT 327 (Mum.) (Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.68:Cash Credits – Affidavit-Source of income – Addition deleted as no independent inquiry was made by AO to disprove the creditworthiness of creditors.<\/strong><\/p>\n

  <\/p>\n

Where no independent inquiry was made by AO to disprove the creditworthiness of creditors, as established by affidavits and statements showing source of income, etc. Thus, CIT(A) justified in deleting the addition u\/s 68. (AY 1990-91)<\/p>\n

  <\/p>\n

CIT v. Abdul Aziz (2012) 251 CTR 58 (Chatt.)(High Court)<\/em><\/strong><\/p>\n

  <\/p>\n

S.68: Cash Credits – undisclosed income – burden on department to show that the investment made by the subscribers actually emanated from the coffers of the assessee<\/strong><\/p>\n

  <\/p>\n

Where the assessee discharged the onus by establishing the identity of the shareholder and along with the nature and source of the money. The assessee also filed the confirmation letter, also it was accepted by the AO in the assessment order that identity of share applicant was not in doubt. Thus addition under the said provision was deleted relying on the judicial pronouncement that the department must show that the investment made by the subscribers actually emanated from the coffers of the assessee and then to be treated as undisclosed income u\/s 68. (AY 2006-07)<\/p>\n

  <\/p>\n

ACIT v. ETC Industries Ltd. (2012) 52 SOT 159 (Indore)(Trib.) <\/em><\/strong><\/p>\n

  <\/p>\n

S.68:Cash Credits – loan received from directors – No addition where assessee proved the identity as well as creditworthiness of the lenders who are its directors<\/strong><\/p>\n

  <\/p>\n

The assessee received loans during the year from three directors. AO though treated majority of loans as genuine, but made part addition of part amount as these amounts are deposited in cash in bank account of creditors. It was held that the assessee having proved the identity as well as creditworthiness of the lenders who are its directors, addition u\/s 68 could not be made in respect of part of the deposits simply because cash deposit of similar amounts were made in the accounts of the lenders. ( 2003-04) <\/p>\n

  <\/p>\n

Moongipa Investment Ltd. v. ITO (2012) 147 TTJ 378 (Delhi)( Trib.) <\/em><\/strong><\/p>\n

  <\/p>\n

S.68:Cash credits – Loans-PAN- Lender assessed to tax  and confirmation is filed addition is held  not justified.  <\/strong><\/p>\n

  <\/p>\n

Assessing Officer treated cash credits in name of one ‘G’ as unexplained cash credits. Commissioner (Appeals) deleted addition on grounds that ‘G’ had furnished required certificate before Assessing Officer and latter did not consider same, that ‘G’ was assessed to income-tax and that he had confirmed loan granted to assessee and quoted his PAN number. Since Commissioner (Appeals) had decided issue on foundation of requisite material on record, he was justified in his action. (A. Y. 2006-07) <\/strong><\/p>\n

  <\/p>\n

ITO v. Bhagwan Dass,[2012] 137 ITD 120\/17 ITR 446 (Chandigarh)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.68: Cash credits – Loans-Account payee cheque-Assessee need not prove the source of source.  <\/strong><\/p>\n

  <\/p>\n

Assessee-firm was engaged in business of manufacture of sugar. During previous year, it obtained loans from parties by means of cheques. Assessing Officer accepted part of loans and treated balance amount as unexplained cash credits and added same to income of assessee. Record showed that creditors had explained sources of their deposits in bank. No material was brought on record by Assessing Officer to show that assessee had any other source of income which could have been routed in form of loan given by a third party. On other hand interest payable by assessee on said loans was allowed by Assessing Officer. Held that since initial onus placed upon assessee stood discharged and there was no material to prove that sources explained by creditors were not genuine. Assessing Officer was not justified in calling upon assessee to prove source of source. Therefore, impugned addition made under section 68 was liable to be deleted.                (A. Y. 2005-06) <\/strong><\/p>\n

  <\/p>\n

Dwarikadhish Sugar Industries v. ITO [2012] 137 ITD 200 (TM)(Lucknow)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.68:Cash credits – Loans –Examination of creditors- Addition made on assumption without examining the creditors is held to be not justified. <\/strong><\/p>\n

  <\/p>\n

Assessee received unsecured loans from three parties through account payee cheques. Assessee proved identity, genuineness of transactions and also creditworthiness of creditors by producing their respective bank accounts. Assessing Officer did not examine creditors and made addition on assumption that they would not have saved any money to advance loans. Held that, the Assessing Officer should not have come to any conclusion without examining the cash creditors. The assessee cannot be aware of the source of creditors, which would be within the personal knowledge of the creditors. Mere doubt with regard to the creditworthiness should not automatically reflect in disbelieving the case of the assessee to make addition under section 68 without showing that the assessee would have earned more income from any specific source, in the light of the expression may’ used in section 68. In the instant case, the Assessing Officer examined the books of account of the assessee but did not make any comment on possibility of earning of any additional income from trading business or from any other source and, thus, addition cannot be made in a routine manner. (A.Y. 2006 – 2007)<\/p>\n

  <\/p>\n

Vishnu Jaiswal v. CIT(A)-I(2012) 137 ITD 259(TM) (Lucknow)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.74: Losses –Capital gains- Option to set off-<\/strong> Right to set-off capital loss is a “vested right” not affected by amendment.<\/strong> <\/strong><\/p>\n

  <\/p>\n

In AY 2003-04, the assessee earned short-term capital gains (“STCG”) of Rs. 2.21 crores and set it off against the long-term capital loss (“LTCL”) relating to AY 2001-02. S. 74 was amended w.e.f. AY 2003-04 to provide that brought forward LTCL could only be set-off against LTCG and not against STCG<\/em>. The assessee claimed, relying on CIT v Shah Sadiq & Sons (1987) 166 ITR 102 (SC) that the amendment to s. 74 w.e.f. AY 2003-04 did not affect the assessee’s vested right<\/em> in AY 2001-02 to have the LTCL set-off against the STCG. The AO & CIT(A) relied on Reliance Jute Industries<\/a> v. CIT (1979) 120 ITR 921 (SC) where it was held that the assessment for one AY cannot be affected by the law in force in another AY and that the law prevailing in AY 2003-04 alone had to be considered. On appeal to the Tribunal, the issue was referred to a Special Bench. Held  by the Special Bench: <\/p>\n

  <\/p>\n

(i) S. 74(1), as substituted w.e.f. 01.04.2003, uses the present tense and refers to the long-term capital loss of the current year. It applies to the long-term capital loss of AY 2003-04 onwards and not to the long-term capital loss relating to the period prior to AY 2003-04. The set-off of long-term capital loss relating to a period prior to AY 2003-04 is governed by s. 74(1) as it stood in that AY;<\/p>\n

  <\/p>\n

(ii) The assessee’s contention, relying on Shah Sadiq<\/a>, that it had a “vested right<\/em>” in AY 2001-02 to carry forward the LTCL & set it off against the STCG and that this right cannot be defeated without express language in the statute is also acceptable. In Govinddas  and Others(1976)103 ITR 123 (SC) it was held that unless the terms of a statute expressly so provide or necessarily require it, retrospective operation should not be given to a statute so as to take away or impair an existing right otherwise than as regards the matters of procedure (Reliance Jute Industries<\/a> v CIT (1979)120 ITR 921 (SC) distinguished; CIT v SSC Shoes (2003) 259 ITR 674 (Mad) followed; Geetanjali Trading<\/a> (ITAT Mumbai) approved)(AY 2003-04)<\/p>\n

  <\/p>\n

Kotak Mahindra Capital Co. Ltd v. ACIT(SB)(Mum.)(Trib.) (www.itatonline.org)<\/em><\/strong><\/p>\n

  <\/p>\n

S.80G:Deduction – Donation- Charitable institutions-Approval granted shall continue . <\/strong><\/p>\n

  <\/p>\n

Assessee filed its application for renewal of exemption under section 80G on 27-12-2010. Subsequently, assessee vide its application dated 4-2-2011, requested Commissioner to treat application filed for renewal of exemption under section 80G as withdrawn. Commissioner (Appeals) however rejected assessee’s request, held that exemption under section 80G could not be allowed to assessee society. On appeal, assessee submitted that in view of omission of proviso to section 80G(5)(vi) by Finance (No. 2) Act, 2009, approval once granted shall continue to be valid in perpetuity and even if assessee by ignorance or inadvertently filed an application for renewal, Commissioner was required to decide same in accordance with amended provisions. The Tribunal held that, the approval under section 80G(5) already granted to assessee would continue unless and until concerned authority takes appropriate action in accordance with law. Hence, the impugned order passed by Commissioner (Appeals) was set aside.  <\/strong><\/p>\n

  <\/p>\n

Association for Advocacy and Legal Initiatives v. CIT [2011] 130 ITD 573 (Luck.) followed.(A.Y.2011-2012)  <\/strong><\/p>\n

  <\/p>\n

VishavNamdhariSangatv v. ACIT [2012] 137 ITD 74 (Chandigarh)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.80HHB: Deduction – Projects outside India –Foreign currency-Used to repay the loan- Eligible for deduction. <\/strong><\/p>\n

  <\/p>\n

The assessee executed certain contracts in Oman and Qatar and the foreign currency earned from the project was partially used for repaying the loan taken in foreign currency in foreign country for executing the project. It was held that the loan amount was paid in foreign currency and even if the entire foreign currency was brought into India, the assessee would have been required to remit the foreign currency to discharge the loan taken in foreign currency for executing the project. Therefore the assessee was entitled to claim deduction u\/s 80HHB in respect of entire foreign currency earned from the project. <\/p>\n

  <\/p>\n

CIT v. Essar Oil Ltd. (2012) 345 ITR 443 (Bom.)(High Court)      <\/em><\/strong><\/p>\n

  <\/p>\n

S. 80HHC: Deduction – Export business-Turnover-Export house-Held can not be considered as turnover of assessee. <\/strong><\/p>\n

  <\/p>\n

Exports through export houses cannot be treated as export turnover of the assessee for the purpose of second proviso to section 80HHC(3); since the export turnover of the assessee from direct exports is less than Rs. 10 crores, it is entitled to benefit of second proviso to S. 80HHC(3).  (AY 2001-02) <\/p>\n

  <\/p>\n

Baby Marine Products v. ACIT (2012) 147 TTJ 385 \/ 73 DTR 169 (TM)(Cochin)(Trib. ) <\/em><\/strong><\/p>\n

  <\/p>\n

S.80HHF:Deduction-Export or transfer of film software- EOU- Deduction is not available in both the sections.(S. 10B)<\/strong><\/p>\n

  <\/p>\n

Assessee set up an EOU unit. It claimed deduction u\/s 10B. With regard to its other businesses it claimed deduction under section 80HHF. While computing deduction u\/s 80HHF it included export profit of EOU. The Commissioner (Appeals), however, reduced profit derived from EOU on ground that profit derived by EOU was exempt from tax under section 10B. The Tribunal held that the express intention of Legislature with regard to sections 10B and 80HHF is not to allow deduction under both sections and further, both of said sections expressly prohibits to allow deduction other than allowable under respective sections. Therefore, order of Commissioner (Appeals) was confirmed (A.Y. 2001 – 2002) <\/p>\n

  <\/p>\n

ACIT v. Sri Adhikari Brothers Television Network Ltd. [2012] 137 ITD 154 (Mum.)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.80IA:<\/strong> Deductions-Industrial undertakings-Infrastructure development- Profit earned from related parties more in relation to unrelated parties, allowance of deduction u\/s 80IB not to be restricted to same proportion at which profit was derived from unrelated parties – working of deduction to be made on individual basis and not on an average basis. (S.80IB)<\/strong><\/p>\n

  <\/p>\n

The assessee company was engaged in the business of generation and distribution of power. The assessee claimed deduction u\/s 80IA. The AO by invoking Section 80IA(10) restricted the allowance of deduction by determining the difference between the average price at which power was sold to sister concern and to other related parties. It was held that this section does not provide that if assessee earns more profit from related parties in relation to unrelated parties, then allowance of deduction u\/s 80IB is to be restricted to same proportion at which profit was derived from unrelated parties, even in circumstances where profits derived from related parties were such that it could be expected to arise to such eligible business as ordinary profit. It was further held that working for provisions of section 80IA(10) has to be made on individual basis and not on an average basis. (AY 2008-09) <\/p>\n

  <\/p>\n

OPG Energy (P.) Ltd. v. Dy.CIT (2012) 52 SOT 321 (Chennai) (Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.80-IA: Deductions-Industrial undertakings –Manufacture-Conversion of HDPE bags in to laminated HDPE bags will amount to manufacture or production of goods.<\/strong><\/p>\n

  <\/p>\n

The assessee is a small scale industrial undertaking located in back word area which is engaged in the manufacturing of laminated sacks. The assessee claimed deduction under section 80IA  The Assessing  Officer held  that the activity of assessee cannot be considered as manufacturing of article or things hence disallowed the claim. This was confirmed by the Tribunal. On appeal to the High Court held that, process under taken by the assessee brings about a structural change in semi finished HDPE bags and brings in to existence laminated HDPE bags which are put entirely different kind of use and thus assessee was manufacturing an article or thing and therefore , was entitled to section 80IA deduction .(A.Y.1995-96)<\/p>\n

  <\/p>\n

Jhaveri Coaters (P) Ltd v. ACIT (2012) 74 DTR 145 (Guj.)(High Court) <\/em><\/strong><\/p>\n

  <\/p>\n

S.80P:Deduction- Co-operative societies – Banking Regulation Act, 1949-Primary business is not banking hence not entitled to deduction.<\/strong><\/p>\n

  <\/p>\n

Assessee was a society engaged in business of providing credit facilities to its members by granting loans for purposes like business, housing, vehicles, etc. Deduction u\/s 80P was denied by Assessee Officer in view of amendment brought into section 80P whereby co-operative banks were excluded from purview of section 80P with effect from 1-4-2007. The Tribunal held that on facts, none of assessee’s aims and objects allowed assessee to accept deposits of money from public for purpose of lending or investment, hence it could not be said that principal business of assessee was banking business. Therefore, assessee could not be regarded as a primary co-operative bank and, hence, was entitled to deduction under section 80P(2)(a)(i). (A. Y. 2007-08 to 2009-10) <\/strong><\/p>\n

  <\/p>\n

DCIT v. Jayalakshmi Mahila Vividodeshagala Souharda Sahakari Ltd. [2012] 137 ITD 163 (Panaji)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.90:<\/strong> Double taxation relief-Fees for Technical Services –DTAA-India-Singapore- Amount received for rendering technical services. (Art.5.6 ) <\/strong><\/p>\n

  <\/p>\n

The assessee, a Singaporean company received an amount for technical service rendered to it by its wholly owned Indian subsidiary, the which constitutes service PE of the assessee within the meaning of Art 5.6(b) of the Indo-Singapore DTAA, is assessable under Article 7 of DTAA by virtue of para 6 of art. 12. (AY 2003-04 & 2004-05) <\/p>\n

  <\/p>\n

Addl. DIT (IT) v. Bunge Agribusiness Singapore Pte. Ltd. (2012) 147 TTJ 507 (Mum)(Trib)<\/em><\/strong><\/p>\n

  <\/p>\n

S.80I: Deduction – New Industrial undertaking- Computer data processing-–Activity of computer data processing services and sale of computer stationary amounted to manufacture or production of any article or thing, thus deduction allowed. <\/strong><\/p>\n

  <\/p>\n

The assessee is an industrial undertaking carrying out activity of computer data processing services and sale of computer stationary amounted to manufacture or production of any article or thing. It was held that assessee was entitled to special deduction u\/s 80I. (AY 1989-90 and 1990-91)<\/p>\n

  <\/p>\n

CIT v. Business Information Processing Services (2012) 345 ITR 548 (Raj.)(High Court) <\/em><\/strong><\/p>\n

  <\/p>\n

 S. 90: Double taxation relief-  Salary-Indian subsidiary- DTAA-– India – UK – – Salary paid to employee of UK based company by its Indian subsidiary – Taxable in India as condition under Article 16(2) not satisfied. [Art 16(2)]<\/strong><\/p>\n

  <\/p>\n

The assessee is an employee in a company in UK, and works for its subsidiary in India and is treated as employee of the subsidiary. It was held that the salary paid by the Indian company which also issued the TDS Certificate is not exempt from income tax in India as the condition (b) of Article 16(2) of DTAA is not satisfied. (AY 2001-02)<\/p>\n

  <\/p>\n

CIT v. Ravi Rajagopal (2012) 251 CTR 44 (Mad.)(High Court) <\/em><\/strong><\/p>\n

  <\/p>\n

S.92C: Avoidance of tax- Transfer pricing-Arms’ length price-Interest free loan to overseas associated concern-Interest free loan to overseas concern   falls within the ambit of international transaction.  <\/strong><\/p>\n

  <\/p>\n

The assessee made advances to its wholly owned subsidiary . The assessee contended that lending of interest free funds to subsidiaries is a normal and acceptable business practice and thus, the existence of such interest free loans does not fall within the ambit of international transaction. The Tribunal held that grant of interest free –loan to overseas associated concerns comes within the ambit of international transaction, therefore assessee having made interest free advances to its wholly owned subsidiary, a German company, EURIBOR  rate is be applied  for arriving at the ALP of the interest free loan.(A.Y.2007-08)<\/p>\n

  <\/p>\n

Tata  Autocomp  Systems  Ltd v. ACIT (2012) 73 DTR 220 (Mum.)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S. 92C: Avoidance of tax- Transfer pricing-Arm’s length price-International transaction-<\/strong>Average<\/strong> of percentage of expenditure incurred by 17 pharmaceutical companies on advertisement and marketing –  no analysis as to type of drug, nature of market, period of advertisement – held not to be TNMM as per provisions of the Act <\/strong><\/p>\n

  <\/p>\n

The assessee company was engaged in the business of manufacture and export of pharmaceutical products. The assessee ultimately sold products in Ukraine but routed the same through its Associated Enterprise located in Cyprus as Ukraine was politically and economically very unstable in that period. The assessee adopted CUP method for determining arm’s length price for reimbursement of business promotion expenses to the associated enterprise. The TPO rejecting the CUP method without any cogent reason and applied the mean of percentage of expenditure incurred by 17 pharmaceutical companies on advertisement and marketing and termed the same as ALP arrived by using TNMM. It was held that the said method applied by TPO was not TNMM and what was sought to be compared was only average of expenditure incurred by 17 pharma companies, without any analysis as to type of drug, nature of market, period of advertisement, etc. Thus, as TPO had not applied the TNMM in accordance with the provisions of the act and had adopted ad-hoc method to disallow capital expenditure under guise of transfer pricing provision, impugned adjustment was held to be set-aside. (AY 2004-05)<\/p>\n

  <\/p>\n

ACIT v. Genom Biotech (P.) Ltd. (2012) 52 SOT 147 (Mum.)(Trib.) <\/em><\/strong><\/p>\n

  <\/p>\n

S.92C:Avoidance of tax- Transfer pricing-Arms’ length price-Reference to TPO does not give presumption that the payment is allowable under section 37.(S.37)<\/strong><\/p>\n

  <\/p>\n

Assessee was a joint venture company between Deloitte and Mastek, formed for establishment and operation of an offshore development centre for provision of both offshore and on site information technology and other related services. As per joint venture agreement Deloitte assisted assessee in generation of sales, management and delivery of projects, and in managing and maintaining customer relationships. For that purpose, three senior managers had been assigned by Deloitte to undertake full-time marketing only for assessee. Cost incurred on assignment of said managers consisting of their salary and related expenditure, was charged by Deloitte on actual basis. TPO held that marketing costs incurred and allocated by Deloitte to assessee did not result in rendering of any service to assessee and, therefore, determined arm’s length price for same, at nil. It was very imperative on part of assessee, to establish before TPO, that payments made were commensurate to volume and quality of services and such costs were comparable. When assessee had not furnished evidence to prove that those three personnel had rendered marketing services to it and, in fact, assessee-company had no revenue which had been derived as a result of those marketing expenses, TPO was justified in determining ALP of marketing expenses at nil. ‘ALP’ has to be determined irrespective of any contractual obligation undertaken by parties. If transactions are, in opinion of TPO, not at arm’s length, required adjustment has to be made, as provided in Act, irrespective of fact that expenditure is allowable under other provisions of Act. In view of CBDT instructions dated 20-5-2003, Assessing Officer is bound to refer all transactions beyond specified limit to IPO for determining ALP and mere reference to TPO by Assessing Officer does not raise presumption that amount in question has been allowed under section 37(1). (A. Y. 2002-03 to 2006-07) <\/strong><\/p>\n

  <\/p>\n

Deloitte Consulting India (P.) Ltd.v. DCIT [2012] 137 ITD 21 (Mum.)(Trib.)<\/em><\/strong> <\/strong><\/p>\n

  <\/p>\n

S.92C:Avoidance of tax- Transfer pricing-Arms’ length price-Comparables-Matter remanded to decide fresh . <\/strong><\/p>\n

  <\/p>\n

Assessee-company was mainly engaged in providing various kinds of software and services for Internet Protocol, wire line, mobility and cable networks, helping various communications companies. For providing said services, assessee earned a compensation which equalled to its total operating cost of providing services plus a mark-up of 15 per cent. For establishing arm’s length price relating to software development and related services, assessee adopted ‘Transaction Net Margin Method’ (TNMM) as most appropriate method. As per assessee’s TP report it had identified 18 comparable companies engaged in software development services. During transfer pricing proceedings, TPO rejected most of comparables selected by assessee and adopted some fresh comparables. Based on comparables selected by TPO, certain adjustment was made to ALP determined by assessee. DRP rejected various objections raised by assessee. On appeal, it was noted that some of comparables were rightly selected by TPO whereas objections were rightly raised by assessee in respect of some of comparables. On facts, matter was to be remanded back to Assessing Officer for determining arm’s length price afresh after taking into consideration arithmetic mean of profit ratio of all finally tested comparables(A. Y. 2007-08)<\/p>\n

  <\/p>\n

Telcordia Technologies India (P.) Ltd. v. ACIT [2012] 137 ITD 1 (Mum.)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.92C: Avoidance of tax- Transfer pricing-Arms’ length price-Controlled transaction- A “controlled transaction” can never be regarded as “comparable” even if at ALP.<\/strong><\/p>\n

  <\/p>\n

In determining the comparable parties for purposes of TNMM, the TPO selected a wholly owned subsidiary<\/em> of the assessee called ICB Contractors India Pvt Ltd (“ICB”) even though there were related party transactions between ICB and another AE<\/em> called JTS Contracting Co. Malta. The TPO justified the selection on the ground that the transactions between ICB and the AE were at arms’ length and so the distinction between controlled and uncontrolled transactions stood obliterated<\/em>. In appeal before the Tribunal, the AM held that as there were controlled transactions<\/em> between ICB and the AE, ICB could not be taken as a comparable party<\/em>. However, the JM took the view as the transactions entered into by ICB was found to be at arms’ length, it was an internal comparable which could not be ignored. The Third Member had to consider whether “the net margin realized from a transaction with an AE found and accepted at ALP could be taken as a comparable being an internal comparable for computation of ALP an international transaction with another AE<\/em>?” Held by the Third Member:<\/p>\n

  <\/p>\n

The entire scheme in the Act & Rules for determining the ALP of an international transaction is based on making comparison with certain comparable uncontrolled transactions. The various methods prescribed for determining ALP clearly divulge that the comparison is always sought to be made of the assessee’s international transactions with comparable ‘uncontrolled transactions’. An ‘uncontrolled transaction<\/em>‘is defined under Rule 10A(a) to mean ‘a transaction between enterprises other than associated enterprises whether resident or non-resident<\/em>‘. A transaction between two associated enterprises goes out of the ambit of ‘uncontrolled transaction’ under Rule l0A. There is no statutory sanction for roping in a comparable controlled transaction for the purposes of benchmarking. If the view that a controlled transaction should not be shunted out for the purposes of benchmarking, is accepted, then all the relevant provisions contained in Chapter X in this regard, will become otiose. The argument that once controlled transactions are verified by the TPO and found at ALP, then the difference between controlled and uncontrolled transactions is obliterated cannot be accepted because it is possible that higher\/lower prices for India may have been charged to reduce the overall incidence of tax. The TPO may accept that the transaction does not require adjustment if it benefits India even though the transaction may not be at ALP and cannot be used as a benchmark for purposes of making comparison in other cases. That is why the legislature has ignored controlled transactions, even though at ALP, and restricted the ambit only to uncontrolled transactions for computing ALP in respect of international transactions between two AEs. (A Y 2005-06)<\/p>\n

  <\/p>\n

Tecnimont ICB Private Limited v. ACIT(TM)(Mum.)(Trib.)<\/em><\/strong> www.itatonline.org<\/em><\/strong><\/p>\n

  <\/p>\n

S. 115JB:Company-Book profit- Computation –Foreign exchange fluctuation-Companies Act-Reduction of amount held to be not justified. <\/strong><\/p>\n

  <\/p>\n

The assessee is a company engaged in the business of running multiplex theatre. The assessee while computing MAT reduced an amount pertaining to “foreign exchange fluctuation due to restated term loan at the yearend”. It was held that the provisions of S. 115JB were a code by themselves therefore, the adjustments can be made as prescribed within this code. Under this code, if a profit and loss account has been made in terms of companies Act, then no adjustment or tinkering is allowable except as provided in the Explanation. The assessee had not demonstrated that under Schedule VI to the companies Act, the income was beyond the scope of profit of the company. By very adoption and inclusion of the income in the profit of the company it had been affirmed by the auditor that it had come within the ambit of “book profit”. Thus, held that assessee was not justified in reducing the amount while computing book profit. (AY 2005-06)<\/p>\n

  <\/p>\n

City Gold Media Ltd. v. ITO (2012) 17 ITR 192 (Ahd.) (Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.115JB:Company-Book profit-Computation-Interest- Adjustment by the Assessing  Officer is held to be not justified. <\/strong><\/p>\n

  <\/p>\n

Assessing Officer disallowed assessee’s claim of interest expenditure observing that amount of interest had been described as ‘interest capitalized’ in earlier years written off during current year and added said amount to book profit for computation of tax under section 115JB. Held that amount of interest would not fall under provisions of section 115JB(2) and Explanation 1 thereunder. Therefore, Assessing Officer was wrong in adding amount of interest to book profit under section 115JB.   <\/a>(A. Y. 2008-09) <\/strong><\/p>\n

  <\/p>\n

JCIT v. Shreyans Industries Ltd. [2012] 137 ITD 79 (Chandigarh)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S. 143(2): Assessment- Notice- Served on person, not authorized to receive-Assessee participated in   assessment proceedings, therefore   the   assessment  is held to be valid.(S.282,292BB ) <\/strong><\/p>\n

  <\/p>\n

Notice was served  on a person who was not authorized to receive. The assessee’s  authorized representative appeared before the Assessing  Officer. The issue of notice as challenged before the Commissioner of income tax (Appeals), who up held the validity of assessment, however gave relief on merit. Revenue filed an appeal before the Tribunal and the assessee  has filed the cross objection challenging the jurisdiction to make the assessment without issue of notice. Tribunal quashed the assessment order on the ground that there was no valid issue of notice.  As the assessment was quashed, the Tribunal has not decided the issue on merits. On appeal by revenue, the Court held that as notice under section 143(2) having been served on a person, though not authorized to receive the same, assessee’s representative  participated in assessment proceedings on the basis of that notice, assessment order passed thereafter could not be said to be invalid. Accordingly the order of tribunal in ACIT v.Vision Inc (2010) 130 TTJ 696 (Delhi)(Trib.) is set aside.(A.Y. 2003-04 )<\/p>\n

  <\/p>\n

CIT v. Vision Inc ( 2012) 73 DTR 201\/208 Taxman 153 (Delhi) (High Court) <\/em><\/strong><\/p>\n

  <\/p>\n

S. 143(3): Assessment- Set aside order by Tribunal- Fresh assessment- In fresh assessment passed pursuant to remand by ITAT, assessee cannot be worse off than what he was in the original assessment order. [S254(1)]<\/strong> <\/strong><\/p>\n

  <\/p>\n

The AO passed a s. 143(3) assessment order in which he disallowed 50% of the expenditure on an ad-hoc basis. This was reduced to 25% by the CIT (A). On further appeal by the assessee, the Tribunal set aside the matter to the AO to examine the issue afresh<\/em>. In the second round of appeal, the AO disallowed 100% of the expenditure<\/em> on the ground that the assessee had already claimed the same expense under some other head and that there was a claim for double deduction<\/em>. This was upheld by the CIT(A). Before the Tribunal, the assessee argued that once a matter has been set aside by the Tribunal, the assessee cannot be put into a worse situation<\/em> than what it was at the time of original assessment. Held by the Tribunal upholding the plea:<\/p>\n

  <\/p>\n

It is a settled proposition of law that the Tribunal u\/s 254(1) has no power to take back the benefit conferred by the AO or enhance the assessment. Once the matter has been restored by the Tribunal, the income cannot be enhanced from what was determined at the time of original assessment proceedings, which was the subject matter of dispute before the Tribunal. This proposition of law has been upheld by the Supreme Court in Hukumchand Mills Ltd (   )62 ITR 232 (SC) and reiterated in Mcorp Global v CIT (2009) 309 ITR 434 (SC). Therefore, the enhancement of assessment by making 100% disallowance in respect of free food allowance cannot be sustained and the same is restricted to 50%, as was made by the AO in the original round of proceedings.(A.Y. 2002-03)<\/p>\n

  <\/p>\n

Kellogg India Pvt. Ltd v. ACIT (Mum.)(Trib.) www.itatonline.org<\/em><\/strong><\/p>\n

  <\/p>\n

S.145:Assessment- Method of accounting- Estimation of Profit-Rejection of books of account is   held to be justified. <\/strong><\/p>\n

  <\/p>\n

For relevant assessment, assessee declared gross profit rate at 12.67 percent as compared to gross profit rate at 15.07 per cent shown in immediate preceding year. He pointed out that main reason for fall in gross profit rate was that during year receipts of fabrication charges were substantially reduced. He did not maintain stock register of raw material, work-in-progress, consumable and finished products. He also did not give any plausible explanation regarding fallin gross profit rate particularly when turnover had remained almost consistent as per past year. Assessing Officer applied provisions of section 143(5)and estimated gross profit rate at 14 per cent. Held that, Assessing Officer had correctly applied provisions of section 145(3). Since Assessing Officer had partly accepted contention of assessee that main reason for fall in gross profit rate was reduction in receipts of fabrication charges, gross profit rate deserved to be reduced to 13 percent. (A.Y. 2007 – 08) <\/strong><\/p>\n

  <\/p>\n

Vinod Kumar v. JCIT [2012] 137 ITD 48 (Chandigarh)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.145:Assessment-Method of accounting-Rejection of accounts- Manufacturing results could be ascertained properly hence rejection of books of account is held to be justified. <\/strong><\/p>\n

  <\/p>\n

Assessee derived income from manufacture and sale of cattle feed, oils, oil cakes etc. In course of assessment, Assessing Officer found that although quantity of cotton seed, mustard and ground nut crushed during previous year were shown separately but yield of oil and oil cakes had been given in consolidated form. Further, sales of oil and oil cakes had been shown in manufacturing account in consolidated form although there was a wide variation in market price of those products. Thus, Assessing Officer asked assessee to explain reasons for mixing up cotton, mustard and groundnut oil seeds in same category when there was vast variation in market price of those types of oil seeds and other products. In reply assessee stated that there was not much difference in market price of both these oils and, therefore, he made sales of khal and oil of both these varieties jointly. On facts, unless yield of oil obtained on crushing of three types of oil seeds was separately given, manufacturing results could not be appreciated in their proper perspective. Therefore, books of account of assessee had correctly been rejected under section 145(3). (A.Y. 2008 – 09)<\/p>\n

  <\/p>\n

Pawan Kumar v. ITO [2012] 137 ITD 85 (Chandigarh)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.147: Reassessment – Reopening after expiry of four years – Mere “change of opinion” is not permissible for reopening of assessment <\/strong> <\/p>\n

  <\/p>\n

In the instant case, the assessee claimed a deduction which was allowed by the AO in s. 143(3) assessment. Subsequently, after the expiry of 4 years, the AO reopened the assessment u\/s 147 on the ground that the said loss was a “speculative loss<\/em>” and could not be allowed as a deduction. It was held by the apex court that the assessee had disclosed full details in the Return of Income in the matter of its dealing in stocks and shares. According to the assessee, the loss incurred was a business loss, whereas, according to the Revenue, the loss incurred was a speculative loss. It was therefore held that rejection of the objections of the assessee to the re-opening of the assessment by the Assessing Officer vide his Order dated 23rd June, 2006, was clearly <\/strong>based on change of opinion and thus, reopening of assessment merely on change of opinion was not maintainable.(A.Y.   )<\/p>\n

  <\/p>\n

ACIT v. ICICI Securities Primary Dealership Ltd. (SC) (<\/em><\/strong>www.itatonline.org<\/em><\/strong><\/a>)<\/em><\/strong> <\/strong><\/p>\n

  <\/p>\n

S.147: Reassessment- Beyond four years- Depreciation on capital expenditure- Application of income-There has to be vital link between the reasons and evidence, unless the Assessing Officer establishes that there was failure on the part of assessee to discloses, reassessment is bad in law.(S. 148, Constitution  of India  Art 226 )<\/strong><\/p>\n

  <\/p>\n

The assessment of the assessee was completed under section 143(3). The notice for reopening of assessment  under section 148 was issued beyond period of four years. One  of the reason for reopening was  the assessee claimed the depreciation on capital expenditure and also  treated the capital expenditure as application of income under section 11(1)(a) of the Act. The assessee challenged the reassessment by way of Writ. The  court held that  as the reopening of the assessment has taken place beyond period of four years, the jurisdictional requirement in such a case is that  there must be a failure on the part of assessee to fully and truly disclose all material facts necessary for the assessment for that assessment year. On the facts there was full disclosure of facts  before the assessing Officer  and the Assessing officer has not established vital link between the reasons and evidence , the reassessment notice was quashed and  writ petition was allowed. (A.Y. 2004-05)<\/p>\n

  <\/p>\n

Bombay Stock Exchange  Ltd v. Dy.DIT (E) (2012) Vol. 114(4) Bom. L.R. 2061 (Bom.)(High Court)<\/em><\/strong><\/p>\n

  <\/p>\n

S.147: Reassessment –Reason to believe-   Depreciation – Reason to believe to be tested on the material as at the time of when reasons were recorded.<\/strong><\/p>\n

  <\/p>\n

Order of Tribunal deleting the addition on the basis of reopening of assessment held to be cryptic. It was held that the reason to believe to be tested on the material as at the time of when reasons were recorded. Matter remanded back to the Tribunal. (AY 2001-02)<\/p>\n

  <\/p>\n

CIT v. Jagson International Ltd. (2012) 345 ITR 414 (Delhi) (High Court)  <\/em><\/strong><\/p>\n

  <\/p>\n

S.147: Reassessment-Change of opinion-Investment in share-Trade-Assessing Officer accepting the transfer of share form stock in trade as investment, in reassessment change of stand as trade held to be not valid.<\/strong><\/p>\n

  <\/p>\n

In the original  assessment proceedings the  Assessing Officer accepted the stand of assessee treating  the transfer of stock in trade to invests was assessable as short term capital gains. The  assessment was reopened on the ground that the same is assessable as business income. The assessee challenged the said notice before High Court , the court held that a change of opinion could not clothe the Assessing  Officer with the jurisdiction to initiate the proceeding under section 147 of the Act. An error of judgment also did not confer such a jurisdiction on the Assessing Officer.Accordingly proceedings initiated under section 148 was quashed.(A.Y.2005-06)<\/p>\n

  <\/p>\n

Ritu  Investments  P. Ltd v. Dy.CIT (2012) 345 ITR 214 (Delhi) (Court)  <\/em><\/strong><\/p>\n

  <\/p>\n

S.147: Reassessment- Intimation –Tangible material-Intimation under section 143(1), cannot be reopened u\/s 147 in absence of “tangible material”.(S.143(1),143(2),148, )<\/strong> <\/p>\n

  <\/p>\n

 For AY 2002-03, the Assessing Officer issued an Intimation u\/s 143(1) accepting the return. Subsequently, based on objections raised by the audit, he issued a s. 148 notice to reopen the assessment. The Assessing Officer  set out four issues in the recorded reasons and for two he stated that the reopening was to “verify<\/em>” the expenditure. The assessee filed a Writ Petition to challenge the reopening inter alia on the ground that there was no reason to believe that income had escaped assessment. Held by the High Court:<\/p>\n

  <\/p>\n

 Even in a case where only a s. 143(1) Intimation is passed, the power to reopen can be exercised only where there is “reason to believe that income has escaped assessment” and not merely to “scrutinize” the return<\/strong> or “<\/strong>verify<\/strong>”<\/strong> the expenditure. Further, even in case of reopening of an assessment which was previously accepted u\/s 143(1) without scrutiny, the AO would have power to reopen the assessment, provided he had some tangible material<\/strong> <\/strong>on the basis of which he could form a reason to believe that income chargeable to tax had escaped assessment. Such reason to believe need not necessarily be a firm final decision of the Assessing Officer. This safeguard is necessary to prevent arbitrary exercise of powers<\/strong> u\/s 147 to circumvent the scrutiny proceedings<\/strong> which could not be framed in view of notice u\/s 143(2) having become time barred. On facts, in respect of two issues, the Assessing Officer  reopened the assessment to verify the claims. For mere verification of the claim, power of <\/strong>reopening <\/strong>of assessment cannot be exercised<\/em>. The AO in the guise of power to reopen an assessment cannot seek to undertake a fishing or roving inquiry<\/strong> and seek to verify the claims as if it were a scrutiny assessment.(A.Y.2002-03)<\/p>\n

  <\/p>\n

Inductotherm (India) Pvt. Ltd v. DCIT (Guj.)(High Court) www.itatonline.org<\/em><\/h2>\n

S.147: Reassessment- Audit objection- Reopening of assessment  based solely on audit department’s objection is held to be  void.(S.148 )<\/strong> <\/strong><\/p>\n

  <\/p>\n

For AY 2006-07, the AO passed an assessment order. The revenue audit raised an objection<\/em> that the AO had wrongly allowed the assessee’s claim on several items. Based on this, the AO reopened the assessment within 4 years<\/em> from the end of the AY. The assessee challenged the reopening on the ground that (a) it was based on the audit objection and without independent application<\/em> of the AO’s mind & (ii) all the facts were already on record<\/em>, there was no new material and it was a case of “change of opinion<\/em>“. Held upholding the challenge: <\/p>\n

  <\/p>\n

(i) The belief u\/s 147 that income has escaped assessment has to be the reasonable belief of the AO himself and cannot be an opinion and\/or belief of some other authority. The AO cannot blindly follow the opinion of an audit authority for the purpose of arriving at a belief that income has escaped assessment. On facts, the recorded reasons are identical to the objection of the audit authority. The reasons do not rely upon any tangible material in the audit report but merely upon an opinion and the existing material already on record. This itself indicates that there was no independent application of mind by the AO before he issued the s. 148 notice (India & Eastern Newspaper Society v CIT (1979) 119 ITR 996 (SC) followed). <\/p>\n

  <\/p>\n

 (ii) Further, though the power to reopen an assessment within 4 years is very wide, yet there must be “tangible material” to justify the reopening and it cannot be based on a “review“. Once all the material with regard to particular issue is before the AO and he chooses not to deal with the same, it cannot be said that he had not applied his mind to all the material before him. A presumption can be raised that he applied his mind to all the facts involved in the assessment (Idea Cellular v Dy.CIT (2008) 301 ITR 407 (Bom), CIT v Kelvinator (2002) 256 ITR 1 (Del)(FB) & CIT v Kelvinator (2010) 320 ITR 561 (SC) followed).(AY 2006-07)<\/p>\n

  <\/p>\n

ICICI Home Finance Co. Ltd v. ACIT (Bom.)(High Court) www.itatonline.org<\/em><\/strong><\/p>\n

  <\/p>\n

S.147:Reassessment-Intimation-New material-Non-compete fee-Depreciation-Assessment under section 143(1)  cannot be reopened u\/s 147 in absence of “new material”. (S.143(1)<\/strong> <\/strong><\/p>\n

  <\/p>\n

The assessee filed a ROI in which it claimed deduction for non-compete fees and depreciation on leased premises which was accepted by the AO vide Intimation u\/s 143(1). Thereafter, he issued a notice u\/s 148 seeking to reopen the assessment on the ground that the expenses were not allowable. The assessee challenged the reopening on the ground that (a) the AO had not given a copy of the recorded reasons and (b) there was no fresh material to justify the reopening. Before the Tribunal, though the division bench agreed that there was no new material, the AM held that in the case of a s. 143(1) intimation, new material was not required while the JM took the contrary view. On a reference to the Third Member Held by the Third Member:<\/p>\n

  <\/p>\n

(i) If the recorded reasons are not furnished to the assessee, it is fatal to the validity of the s. 148 notice issued for reopening the assessment (CIT v. Videsh Sanchar Nigam (2012) 340 ITR 66 (Bom.) (SLP dismissed) followed);<\/p>\n

  <\/p>\n

(ii) The law laid down by the Supreme Court in CIT v Kelvinator of India Ltd. (2010) 320 ITR 561 does not cover only a case where a s. 143(3) assessment is passed but also covers a case where only a s. 143(1) intimation is passed. The Supreme Court interpreted the words “reason to believe” and held that the AO did not have the power to review. While in that case of a s. 143(1) intimation, the assessee cannot challenge the reopening on the ground of ‘change of opinion”, he can challenge it on the ground that there were no “reasons to believe” that income had escaped assessment or that the said reasons did not have a live link with the formation of the belief. Even in the case of a s. 143(1) intimation, the AO must have “tangible material” that income has escaped assessment. On facts, there was no “tangible material” to support the belief that non-compete fees and depreciation had resulted in escapement of income chargeable to tax (ACIT v Rajesh Jhaveri stock Brokers (P) Ltd.(2007) 291 ITR 500 (SC) distinguished).(AY 1998-99)<\/p>\n

  <\/p>\n

Telco Dadajee Dhackjee Ltd v. DCIT(TM ) ((Mum.)(Trib.)www.itatonline.org<\/em><\/strong><\/p>\n

  <\/p>\n

S.147:Reassessment-Change of opinion-Claim not considered- If claim not considered by Assessing Officer , there is no “change of opinion”.(S. 148)<\/strong> <\/strong><\/p>\n

  <\/p>\n

For AY 2002-03, the AO issued a notice u\/s 148 to reopen the assessment (within 4 years) on the ground that the assessee had been wrongly allowed exemption u\/s 10(23G) on certain bonds that had been acquired out of surplus funds and not by way of loans & advances. The assessee filed a Writ Petition to challenge the reopening on the ground that the issue had been considered at the stage of the original assessment and that the reopening was based on a “change of opinion”. Held by the High Court after a comprehensive review of the law on the subject:<\/p>\n

  <\/p>\n

(i)         An assessment can be reopened within a period of four years if the AO has some tangible material at his command on which he has reason to believe that income has escaped assessment. Reopening on a “change of opinion” is not possible. The term “opinion” means a “view, judgment or appraisal” formed in the mind about a particular matter. Consequently, if in the original assessment, the AO did not examine the claim of the assessee, did not raise queries or elicit answers, it cannot be stated that merely because the AO did not reject such a claim in the final order of assessment, he should be deemed to have expressed an opinion with respect to such a claim. As long as there is some tangible material to support the belief that income chargeable to tax has escaped assessment, reopening is permissible. Such tangible material need not be “new” or be alien to the record;<\/p>\n

  <\/p>\n

(ii)        The assessee’s argument that as the Full Bench judgement in CIT v. Kelivinator of India Ltd (2002) 256 ITR 1 (Delhi)(FB) was approved by the Supreme Court,CIT v. Kelvinator of India Ltd (2010) 320 ITR 561, the observations made by the Full Bench must be regarded as the ratio of the Supreme Court is not correct because the question before the Supreme Court was whether the concept of “change of opinion” stands obliterated with effect from 1.4.1989 or not. The Supreme Court did not hold that the tangible material must be that which did not form part of the original record of the assessment proceedings. The ratio of the decision of the Supreme Court is what the judgement lays down and not what the decisions of the High Court under challenge held. Further, it is doubtful whether even the Full Bench in Kelvinator meant to convey that a certain claim which has not been examined by the AO in the original assessment, cannot be a subject matter of reopening on the basis of material already on record. Now, the Delhi High Court has itself referred the matter for reconsideration to another Full Bench in Usha International<\/a>;<\/p>\n

  <\/p>\n

(iii) If the AO notices the claim, raises queries and extracts a response from the assessee, the fact that he is silent in the assessment order does not mean that he has not applied his mind to the issue. The assessee has no control over the manner in which the assessment order is to be written. A reopening in this situation would be based on a “change of opinion” and not be permissible. The wide observations in Praful Chunilal Patel v. ACIT (1999) 236 ITR 832 (Guj.), cannot be understood to mean that even where a particular claim had been examined by the AO in the original assessment, reopening is permissible because this would be counter to, CIT v. Kelvinator  of India Ltd (2010)320 ITR 561;(A.Y. 2002-03)<\/p>\n

  <\/p>\n

Gujarat Power Corporation Ltd v. ACIT (Guj)( High Court) www.itatonline.org <\/em><\/strong><\/p>\n

  <\/p>\n

S.148:Reassessment- Notice –Jurisdiction-No universal proposition that notice can never be served when time for issue of notice under section 143 (2) has not expired.(S.143(2), 147)<\/strong><\/p>\n

  <\/p>\n

The assessee filed its return of income for the assessment year 2009-10 under section 139(4) of the  Act on October 6, 2010.The Assessing Officer issued notice for reassessment under section 148 on July 5, 2011. In a writ petition the assessee challenged the notice on the ground that the return of income could have been taken up for scrutiny by issue of notice under section 143 (2) of the Act and that the Assessing Officer cannot issue reassessment notice under section 148 of the Act , during the period when the Assessing Officer could have issued notice under section 143 (2) of the Act. On  the facts of the case the court held that the assessee deliberately keeping matter pending and continuing to appear and neither protesting nor objecting . The assessing officer is not prevented nor barred from recording in writing and issuing fresh notice under section 148.Undertaking by department to withdraw notice with liberty to issue fresh notice. The Court also observed that there is no universal proposition that notice can never be served when time for issue of notice under section 143(2) has not expired.(A.Y.2009-10)<\/p>\n

  <\/p>\n

Acorus Unitech Wireless P. Ltd  and another v. Dy.CIT (2012) 345  ITR 228 (Delhi) (High Court)<\/em><\/strong><\/p>\n

  <\/p>\n

S.148:Reassessment-Notice-Time limit- Notice issued on 30-3-2009, amended provisions of section 149 would apply hence the impugned  notice was held to be time barred . Time period \/limitation period in the Act on date of issue of notice would apply. (S.147, 149 )<\/strong><\/p>\n

  <\/p>\n

The assessee filed the return of income for the assessment year 1998-99 on 20-11-1998,The assessment  for the assessment year was passed under section 143 (3) on 28-2-2001.The reassessment notice under section 148 was issued on 30-3-2009 .i.e. after the expiry of nine years from the assessment year in which the return of income for the assessment year 1998-99  was filed .The assessee challenged the validity of notice under section 148 contending that same  was barred by limitation Revenue contended that limitation period prescribed on first day of assessment year would determine time period for issue of notice under section 147\/148 and thus amendment made in section 149 by Finance Act , 2001 with effect from 1-6-2001 , restricting time period for issuance of notice under section  148 to six years was not applicable. The Court held that the issue involved is procedural, hence time period in which assessment or reassessment proceedings could be initiated and therefore, time period of limitation period as prescribed in Act on the date of issue of notice would apply. On the facts notice under section 148 was issued on 30-3-2009, amended provisions of section 149 would apply and consequently, the notice was quashed being barred by limitation. (A.Y. 1998-99)<\/p>\n

  <\/p>\n

C.B. Richrds Ellis Mauritius Ltd  v. ACIT ( 2012) 208 Taxman 322 (Delhi) (High Court)  <\/em><\/strong><\/p>\n

  <\/p>\n

S.153A: Assessment- Search or requisition-Assessment completed-De novo assessment- S. 153A applies if incriminating material is found even if assessments are completed<\/strong><\/p>\n

  <\/p>\n

Pursuant to a search u\/s 153A, the AO passed an assessment order in which he assessed various amounts. The Tribunal {(2010)1 ITR (Trib) 484} upheld the assessee’s appeal on the ground that (a) no “incriminating material<\/em>” was found in the course of search and (b) as ROIs for the said 6 years disclosed the particulars of the subject additions and these had been accepted by the AO u\/s 143(1), no assessment was pending so as to have abated. It was held that s. 153A was not a de novo assessment<\/em> or a normal\/ regular assessment and the additions made therein have to be necessarily restricted to the undisclosed income unearthed during the search. On appeal by the department to the High Court, Held reversing the Tribunal:<\/p>\n

  <\/p>\n

(i)         U\/s 153A, the AO is empowered to assess or reassess the “total income” (which includes the disclosed & undisclosed income) of 6 years. This is a significant departure from the earlier block assessment scheme (s. 158BC) in which only the undisclosed income could be assessed. U\/s 153A, there can be only one assessment order in respect of each of the six assessment years, in which both the disclosed and the undisclosed income would be brought to tax. If the assessment proceedings are pending completion when the search is initiated, they will abate making way for the AO to determine the total income of the assessee in which the undisclosed income would also be included. If the assessment proceedings have already been completed, there is no question of any abatement since no proceedings are pending & the AO will have to reopen the assessments (without having the need to follow the strict provisions or complying with the strict conditions of s. 147, 148 & 151<\/em>) and determine the total income of the assessee;<\/p>\n

  <\/p>\n

(ii)        The Tribunal’s view that since the returns filed by the assessee for the six years had been processed u\/s 143(1)(a) before the search took place, s. 153A cannot be invoked is not correct. The AO has the power u\/s 153A to make assessment for all the six years and compute the total income of the assessee, including the undisclosed income, notwithstanding that ROIs were filed which stood processed u\/s 143(1)(a);<\/p>\n

  <\/p>\n

(iii)       On facts, the Tribunal’s finding that no material was found during the search is factually unsustainable since the entire case and arguments had proceeded on the basis that the document embodying the transaction was recovered from the assessee. If a document is found in the course of the search, s. 153A is triggered & it is mandatory for the AO to complete the assessment u\/s 153A. (AY 2000-01, 2002-03 to 2005-06)<\/p>\n

  <\/p>\n

CIT v. Anil Kumar Bhatia (Delhi)(High Court) www.itatonline.org<\/em><\/strong><\/p>\n

  <\/p>\n

S.153D: Assessment- Search and seizure- Approval-Obtaining the approval is mandatory. (S.153C)<\/strong><\/p>\n

  <\/p>\n

An assessment order under section 153C can be passed by Assessing Officer only after obtaining prior approval under section 153D of Joint Commissioner inasmuch as compliance of section 153D requirement is mandatory.  (A. Y. 2001-02 to 2004-05)<\/p>\n

  <\/p>\n

Akil Gulamali Somji v. ITO [2012] 137 ITD 94 (Pune)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S. 154:<\/strong> Assessment-Rectification of mistake- Retrospective amendment of law ,rectification  order is justified.<\/strong><\/p>\n

  <\/p>\n

The assessment was the subject matter of appeal before the first appellate authority and in accordance  with the directions of the first appellate authority the Assessing Officer  recomputed the claim under section 80HHC allowing the deduction. The  Assessing Officer noted the Taxation Laws (Amendment),Act , 2005 has brought amendments in section 80HHC with retrospective effect whereby assessee having export turnover exceeding Rs 10 Crores is entitled to benefit  of second proviso to section 80HHC(3),only if the assessee has necessary evidence to prove that he had an option to choose either duty draw back or DEPB scheme. On the facts  as the turnover was more than 10 crores, it had no such  option  other than DEPB , accordingly the Assessing Officer passed the order under section 154  based on retrospective amendment to section 80HHC.In an appeal before the Tribunal the Tribunal held that rectification under section 154 can be done on the retrospective amendment made by the legislature.(A.Y.2001-02)<\/p>\n

  <\/p>\n

Baby Marine Products v.ACIT (2012) 147 TTJ 385 \/ 73 DTR 169 (TM )(Cochin)(Trib.) <\/em><\/strong><\/p>\n

  <\/p>\n

S.158B:Block assessment- Definitions-<\/strong>  Search and Seizure – Addition for short- accounting the payments received by the assessee from the distributor, Addition is held to be  justified on the ground of accounts evidence collected in the course of search. <\/strong><\/p>\n

  <\/p>\n

On the basis of accounts seized, evidence collected from the film distributor and the statements recorded from him, AO was justified in making addition for short- accounting the payments received by the assessee from the distributor. (AY <\/strong>1988-89 to 1997-98)<\/strong><\/p>\n

  <\/p>\n

CIT v. A.H. Khais (2012) 74 DTR 54 (Ker.)(High Court)<\/em><\/strong><\/p>\n

  <\/p>\n

S.158BB: Block assessment-Computation of income-Undisclosed income- Search and seizure. <\/strong><\/p>\n

  <\/p>\n

Tribunal cannot cancel the assessment of undisclosed income if the same is based on tenable and acceptable evidence recovered in the course of search and which is not disproved by the assessee; when the department relies on the seized records for estimating undisclosed income, there is no reason why expenditure stated therein should be disbelieved. (AY 1988-89 to 1997-98)<\/p>\n

  <\/p>\n

CIT v. P.D. Abraham Alias Appachan & Anr. (2012) 74 DTR 34 (Ker.)(High Court)<\/em><\/strong><\/p>\n

  <\/p>\n

S.158BFA:Block assessment-Concealment penalty- Search and Seizure –  Penalty is payable on the differential amount. <\/strong><\/p>\n

  <\/p>\n

Penalty u\/s 158BFA(2) is payable on the differential amount i.e. income that is shown by the assessee in the return and that ultimately assessed; however, most of the addition being estimate of profits from the film industry, penalty is sustained in respect of two additions only.  (AY 1988-89 to 1997-98)<\/p>\n

  <\/p>\n

CIT v. P.D. Abraham Alias Appachan & Anr. (2012) 74 DTR 34 (Ker.)(High Court)<\/em><\/strong><\/p>\n

  <\/p>\n

S.172(3):Non-residents-Shipping business<\/strong>– Freight payment-Agent of ship-DTAA-  India –UAE – Double taxation relief—<\/strong>  Claim of freight payment by the agent of ship ,owner of the ship is a resident of UAE – Held that as  no scope of taxing the income of the ship in any of the ports in India in view of Art. 8 of DTAA. (S.90,Art .8)<\/strong><\/p>\n

  <\/p>\n

The assessee is an agent of the ship registered in UAE. The assessee furnished return u\/s 172(3) of the Act claiming that no tax was payable as final freight beneficiary was the shipping company, a resident of UAE which was not liable for tax under Article 9 of DTAA. But the AO rejected assessee’s claim. It was held that the owner of the ship being admittedly a resident of UAE, there was no scope of taxing the income of the ship in any of the ports in India in view of Art. 8 of DTAA between India and UAE; assessee company therefore could not be assessed as agent of UAE company. <\/p>\n

  <\/p>\n

DIT (IT) v. Venkatesh Karrier Ltd. (2012) 74 DTR 141 \/ 251 CTR 170 (Guj.) (High Court)<\/em><\/strong><\/p>\n

  <\/p>\n

S. 194C: Deduction  at  source – Work Contracts – agreement for lease of dumpers and JCBs only and not executing any work or contract – held not work contract and thus, not required to deduct tax u\/s 195 and hence no disallowance u\/s 40(a)(ia) [S. 40(a)(ia)]<\/strong><\/p>\n

  <\/p>\n

The assessee paid lease rentals for taking dumpers and JCBs on lease from two companies. The Assessing Officer disallowed the rent u\/s 40(a)(ia) on the ground that the lease rentals were paid towards transport contract\/work contract for transportation of goods and moving and shifting of materials and thus the assessee defaulted in deducting TDS u\/s 194C.  It was held that the agreement was for lease of dumpers and JCBs only and not executing any work or contract. Thus, the lease agreement could not be classified as work or service contract and therefore assessee was not required to deduct tax while making payment of lease rental. (AY 2005-06) <\/p>\n

  <\/p>\n

Dy.CIT v. Raj Laxmi Stone Crusher (P) Ltd. (2012) 52 SOT 112 (Delhi) (Trib.) <\/em><\/strong><\/p>\n

  <\/p>\n

S.199: Deduction at source- Credit for tax deducted-Year of credit-Credit to be given in the year of receipt.<\/strong><\/p>\n

  <\/p>\n

One ‘G’ desired to take the franchisee of ‘T’, a brand belonging to the assessee-company. For said purpose, the franchisee needed to take some property on rent. The property which was so chosen belonged to five members of’S’ family. Since the landlords did not know the franchisee very well, they did not prefer to enter into a direct agreement with ‘G’. As such, a rent agreement was executed between ‘A’ Ltd., a sister-concern of the assessee and the franchisee in terms of which ‘G’ paid the rent to the assessee after deduction of tax at source. The assessee paid over the gross amount of rent to ‘A’ Ltd., on gross basisand ‘A’ Ltd., paid the rent to the landlords after deduction of tax at source at the rate applicable. The assessee filed its return declaring total loss of Rs. 7.72 crore. On the basis of the AIR information for CASS-08, it transpired that the assessee-company received rent of Rs. 39 lakh. The Assessing Officer observed that the assessee had claimed credit for tax deducted at source without offering the amount of rent for taxation from which such tax was deducted. On being called upon to explain as to why the said rental income was not offered for taxation, it was submitted that the assessee and ‘A’ Ltd., were only the link between landlords of the property and the franchisee. That was stated to be the reason for which the assessee had not shown any rental income. The Assessing Officer, on going through the assessee’s explanation, agreed that the assessee did not receive any rental income. He, therefore, did not make any addition on this account. However, he held that the amount of TDS could not be refunded to the assessee as the assessee had not shown any income from rent. Held that, in case where amount on which tax was deducted at source is not at all chargeable to tax, command of section 199 will have to be harmoniously and pragmatically read as providing for allowing credit for tax deducted at source in year of receipt of amount, in which tax was deducted at source. Since assessee received amount after deduction of tax at source from ‘G’and such amount was not admittedly chargeable to tax in its hands, credit for tax deducted at source was to be allowed in instant year.(A.Y. 2007 – 08) <\/strong><\/p>\n

  <\/p>\n

ArvindMurjani Brands (P.) Ltd.v.ITO [2012] 137 ITD 173 (Mum.)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

 S.201:Deduction at source-Failure to deduct o r pay-Payment of tax by recipient- Before assessing the assessee to be in default ,under section , 201 for TDS Liability, Assessing Officer  to show that recipient has not paid the  tax.(S.194C )<\/strong><\/p>\n

  <\/p>\n

The Assessing Officer has passed an order u\/s 201 in which he held the assessee to be in default for failure to deduct TDS u\/s 194C on payments made to contractors. The assessee’s argued that in view of Hindustan Coca Cola Beverages(p) Ltd. v CIT (2007) 293 ITR 226 (SC), the tax could not be recovered from it as it must have been recovered from the recipient was rejected on the ground that the onus was on the assessee to prove that the recipient had paid the taxes. On appeal by the assessee to the Tribunal, held, allowing the appeal: In view of the judgment of the Allahabad High Court in Jagran Prakashan<\/a> Ltd v.DCIT (TDS)(2012) 345 ITR 288 (All.)(High Court), there is a paradigm shift in the manner in which recovery provisions u\/s 201(1) can be invoked. S. 201 is intended to make good the loss of revenue suffered by the revenue as a result of non-deduction of tax. However, the question of making good the loss arises only when the recipient of income has not paid tax and, therefore, the department has to establish that the recipient of income has not paid due taxes thereon. The non payment of taxes by the recipient is a condition precedent to invoking s. 201(1) & the onus is on the AO to demonstrate that the condition is satisfied. The assessee has to submit all such information about the recipient as he is obliged to maintain under the law. Once this information is submitted, it is for the AO to ascertain whether or not the taxes have been paid by the recipient of income. (A.Y. 2005-06,2006-07and 2008-09)<\/p>\n

  <\/p>\n

Ramakrishna Vedanta Math v. ITO (Kol.)(Trib.)www.itatonline.org<\/em><\/strong><\/p>\n

  <\/p>\n

S.214:Advance tax<\/strong>–  Interest payable by government –Tax deducted at source- Aggregate of advance tax\/ TDS paid exceeds the assessed tax, advance tax or tax deducted at source loses its identity as soon as it is adjusted against the liability created by the assessment order and becomes tax paid pursuant to the assessment order  hence the Judgement of Sandvik Asia requires reconsideration.<\/strong><\/p>\n

  <\/p>\n

Issue under consideration before the apex court was whether interest is payable by the Revenue to the assessee if the aggregate of installments of Advance Tax\/TDS paid exceeds the assessed tax. The assessee relied upon Sandvik Asia Limited v. CIT (2006 )280 ITR 643(SC) where it was held that the assessee was entitled to be compensated by the Revenue for delay in paying to it the amounts admittedly due. The apex court doubting the correctness of Sandvik Asia (supra) held that the judgement in Modi Industries Ltd  and others v.CIT (1995) 216 ITR 759(SC) correctly laid down that advance Tax or TDS loses its identity as soon as it is adjusted against the liability created by the assessment order and becomes tax paid pursuant to the assessment order. If Advance Tax or TDS loses its identity and becomes tax paid on the passing of the Assessment Order, then, is the assessee not entitled to interest under the relevant provisions of the Act? The apex court thus held that the view taken in Sandvik Asia was not correct and thus, directed the Registry to place this matter before Hon’ble the Chief Justice on the administrative side for appropriate orders. <\/p>\n

  <\/p>\n

CIT v. Gujarat Flouro Chemicals (SC) (<\/em>www.itatonline.org<\/em><\/a>) <\/em><\/h2>\n

\n S.234A: Interest-Default in furnishing return of income-Tax paid before due date of filing return- Interest cannot be levied in respect of tax paid  before due date of filing of return.(S.234A, 234C) <\/strong><\/p>\n

  <\/p>\n

The return was due on 30 th August 1996. The assessee has paid self assessment tax of Rs 10 lacs under section 140A on 30 the August 1996. The return was filed on 27 th March 1998. The assesses tax was Rs 14, 82 941 after adjusting the tax deducted at source. The revenue demanded interest on entire amount of Rs 14,82, 941  though the assessee had deposited the self assessment tax of Rs 10,0000.  The Assessee challenged the action of revenue authorities in determining the interest under section 234A and 234C of the   Income –Tax Act . The court held that permitting the revenue to collect interest on the entire amount ,though admittedly tax of Rs 10 lacs was already paid before due date of filing of return would render the provisions of section 234A penal in  nature and expose it to challenge of its vires, therefore the interest could be charged only on Rs 4,82, 941 and not entire tax of Rs 14,82,941. Accordingly the petition was allowed.(A.Y.2006-07)<\/p>\n

  <\/p>\n

Bhartbhai B. Shah v. ITO (2012) 74 DTR 68 (Guj.) (High Court) <\/em><\/strong><\/p>\n

  <\/p>\n

S.245R: Advance rulings-Procedure-Application<\/strong>– Mere filing of Return of Income disbars an advance ruling application.(S.139(1))<\/strong><\/strong><\/p>\n

  <\/p>\n

For AY 2009-10, the assessee filed a return of income u\/s 139(1) on 31.3.2010. On 17.06.2010, it filed an application before the AAR seeking a ruling in respect of the transactions that had been entered into in that year. The AAR rejected the application on the ground that as the assessee had filed a ROI, the questions raised in the application were “already pending<\/em>” before an income-tax authority and so the application was not maintainable under the proviso to s. 245R(2). The assessee filed a Writ petition contending that (a) the mere filing of a ROI did not mean that all possible questions were “pending<\/em>” if the AO had not raised the issue and (b) as the AAR had in the past admitted applications even though ROIs were filed, it could not change its stand. Held dismissing the Petition:<\/p>\n

  <\/p>\n

Upon a return of income being filed, the matter is “pending”<\/em>, in the sense that the AO has the right to take such steps, including issuance of notice. The rationale for the bar in the Proviso to s. 245R(2) is that if the applicant wishes to plan its affairs and transactions in advance, it is free to do but once it proceeds to file a return, the AAR’s jurisdiction to entertain the application for advance ruling is taken away, because the AO would then be seized of the matter, and would possess a multitude of statutory powers to examine and rule on the return. The fact that in the past the AAR followed a different practice is irrelevant because there is no estoppel against a statute. <\/p>\n

  <\/p>\n

Netapp BV vs. The AAR (Delhi)(High Court) www.itatonline.org<\/em><\/strong><\/p>\n

  <\/p>\n

S. 250(5): Appeal-Commissioner  of income -tax(Appeals)-Additional ground-Retrospective amendment of law – Additional ground in view of retrospective amendment could be raised before the Commissioner of income -tax (Appeals).<\/strong><\/p>\n

  <\/p>\n

Before the Commissioner of income-tax (Appeals), the assessee raised an additional ground praying for allowability of  expenditure in respect of which TDS was paid before due date of filing of return in view of the retrospective amendment in law amending section 40(a)(ia). The Commissioner of income-tax (Appeals), rejected the claim relying on Goetze (India) Ltd  v. CIT (2006) 284  ITR  323 (SC).The Tribunal held that in view of retrospective amendment  of law additional ground could be raised before the CIT (A)  and directed the CIT (A) to entertain the claim. (A.Y. 2005-06)<\/p>\n

  <\/p>\n

Nitin M.Panchamiya v. Addl.CIT ( 2012) 73 DTR 202(Mum.)(Trib.)    <\/em><\/strong><\/p>\n

  <\/p>\n

S.251:Appeal-Commissioner (Appeals)-Powers – Admission of additional evidence is held to be justified.(Rule 46A)<\/strong><\/p>\n

  <\/p>\n

Assessee had already filed requisite details before Assessing Officer and further detail was to be filed before Assessing Officer, but latter refused to accept same. Such new evidence that was to be filed by assessee was from Government agency and same was essential for disposal of appeal. The Tribunal observed that the CIT(A) had considered the new evidence and the facts and circumstances of the case in entirety and after recording reasons admitted the new evidences. Hence, admission of new evidence by CIT(A) was justified.  (A. Y.2006-07)<\/p>\n

  <\/p>\n

ITO v. Bhagwan Dass, [2012] 137 ITD 120\/17 ITR 446 (Chandigarh)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.253: Appeal- Appellate Tribunal- Non –payment of admitted tax- Stay-Appeal is maintainable before the Tribunal . Assessee has shown a prima facie, an arguable case, stay was granted with certain conditions. (S.220(6), 249(4) )<\/strong><\/p>\n

  <\/p>\n

In an appeal filed by the assessee the revenue contended that as the admitted tax was not paid by the assessee the appeal is not maintainable .The appellate Tribunal after refrying the Judgment of supreme Court in CIT v. Pawn Kumar Laddha ( 2010) 324 ITR 324 (SC), held that the appeal is maintainable  because the provisions of section 249(4) in chapter XX-A relating to filing of appeal before the Commissioner (Appeals) cannot be read in to section 253(1)(b) in Chapter XX-B of the Income-tax Act  which relating to filing of an appeal before the Tribunal Accordingly,  the Tribunal held that the appeal is maintainable. On the facts the Tribunal has found that the  Assessing  Officer has raised  huge demand by passing and order under section 201(1) and 201(IA)  when  the bank accounts of assessee was  attached. The Tribunal also  found that for fraction of financial  year 2011-12 demand was raised, which is not permissible . Accordingly the Tribunal granted stay with certain conditions.(A.Y.  2010 to 2012-13)<\/p>\n

  <\/p>\n

Kingfisher Airlines Ltd  v. ACIT ( 2012) 73 DTR 257 (Bang.)(Trib.)   <\/em><\/strong><\/p>\n

  <\/p>\n

S.254(1):Appellate Tribunal-Orders –Power-Tribunal has the power to stay proceedings to give effect to s. 263 revision order. Plea as to jurisdiction of AO\/CIT, even if given up, can always be raised.(S.263 )<\/strong><\/p>\n

  <\/p>\n

The CIT passed an order u\/s 263 by which he set-aside the assessment order and directed the AO to frame a fresh assessment. The assessee challenged the s. 263 order in a Writ Petition. The Court directed the CIT to pass a fresh order u\/s 263. The assessee challenged the High Court’s verdict in the Supreme Court. In the meanwhile, the CIT passed the s. 263 order and so the assessee withdrew the SLP<\/em> before the Supreme Court and filed an appeal before the Tribunal. The assessee also filed a stay application<\/em> that a stay may be granted to prevent the AO from giving effect to the revision order<\/em> as there would be multiplicity of proceedings<\/em> if the AO passed a fresh assessment order which would be futile if the appeal was allowed. The Tribunal granted stay of the assessment proceedings pending before the AO and also directed production of papers relating to initiation of the s. 263 proceedings. The department filed a Writ Petition to challenge the order of the Tribunal on the ground that (a) as the assessee had challenged the initiation of the s. 263 proceedings before the High Court & Supreme Court and then withdrawn the challenge<\/em> (SLP), it was estopped from arguing the poin<\/em>t before the Tribunal and (b) the Tribunal has no power to stay the assessment proceedings. Held dismissing the Petition: <\/p>\n

  <\/p>\n

(i) Where the jurisdiction of an authority is challenged, neither the question of res judicata nor the rule of estoppel can be invoked so as to restrain the challenge. Neither consent nor waiver can confer jurisdiction upon the AO\/ CIT where it does not exist and so no importance can be attached to the fact that the assessee, in the first round of proceedings, expressly gave up the plea against the erroneous assumption of jurisdiction by the authority. Consequently, even assuming that there was a consent\/ waiver by the assessee to the assumption of jurisdiction by the Tribunal, he was still entitled to challenge it before the Tribunal (P. V. Doshi v CIT (1978 ) 113 ITR 22 (Guj.)(High Court) & other decisions followed);<\/p>\n

  <\/p>\n

(ii)   It is well settled by the judgment in ITO v. Mohd. Kunhi (1969) 71 ITR 815 (SC) that the Tribunal has the power to ensure that the fruits of success are not rendered futile or nugatory and can pass appropriate orders of stay. The assessment orders pending before the AO pursuant to a s. 263 order can also be stayed {ITO v Khalid Mehdi Khan (1977) 110 ITR 79 (AP) followed}.(A.Y. )<\/p>\n

  <\/p>\n

CIT v. Income Tax Appellate Tribunal & Ors. (Delhi)(High Court)www.itatonline.org<\/em><\/strong><\/p>\n

  <\/p>\n

S.254(1):Appellate Tribunal-<\/strong> Orders-<\/strong> Binding precedent<\/strong>–Decision of co-ordinate bench- When facts of the case are same,Tribunal to either follow decision of earlier bench or refer the matter to larger bench <\/strong><\/p>\n

  <\/p>\n

Where the facts of the case are same the Tribunal to follow the decision of another bench. The only alternative is to refer the matter to the larger bench if the member of the bench are not willing to follow the earlier order.(A.Ys. (2003-04 to 2005-06) <\/p>\n

  <\/p>\n

ACIT v. Chandragiri Construction Co. (2012) 147 TTJ 249 (TM )(Cochin) (Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.254(1): Appellate Tribunal- Power- Issues relating to  in respect of another assessment year-Tribunal has no power  to decide an  issue in respect of assessment year which are not before it .<\/strong><\/p>\n

  <\/p>\n

The issue raised before the third member was whether the Tribunal has power to decide the issue in respect of assessment years which were not before the Tribunal. The third member held that under the Income-tax Act, each assessment year is a separate unit and the decision of Assessing Officer given in a particular year cannot operate as res judicata in the matter of assessment of subsequent years , therefore the Jurisdiction of Tribunal in the hierarchy created by the same Act is no higher than that of the Assessing Officer and hence the Tribunal also to confine to the year of assessment . The Tribunal has no power to decide the issue in respect of assessment years which are not before it. (A.Ys. (2003-04 to 2005-06) <\/strong><\/p>\n

  <\/p>\n

 ACIT v. Chandragiri Construction Co. (2012) 147 TTJ 249 (TM )(Cochin) (Trib.) <\/em><\/strong><\/p>\n

  <\/p>\n

S.254(1):Appellate Tribunal-Powers-Cross objection- Legal ground in respect of independent and separate issue was not allowed in revenues appeal Rule 27 of Income Tax Appellate Tribunal Rules 1963 or under cross objection.(Rule 27) <\/strong><\/p>\n

  <\/p>\n

In revenue’s appeal against order of Commissioner (Appeals), assessee filed cross-objections challenging initiation of proceedings under section 153C. Cross-objections were time-barred and, therefore, same were dismissed. Assessee was, however, given liberty to argue same points at time of disposal of departmental appeals. Accordingly, during hearing of appeal before Tribunal, assessee invoked provisions of rule 27 and challenged initiation of proceedings under section 153C. Held that, when validity of invocation of section 153C was decided by Commissioner (Appeals) in favour of revenue and assessee had not filed appeal on said legal ground, assessee could not be allowed to raise such legal ground in revenue’s appeal by invoking rule 27. If cross-objections were not withdrawn, even then, such a legal issue was beyond scope of adjudication through a cross-objection under section 253(4) because impugned legal issue was altogether an independent as well as a separate issue. (A.Y. 1998 – 1999 to 2003 – 2004) <\/strong><\/p>\n

  <\/p>\n

DCIT v. Sandip M. Patel [2012] 137 ITD 104 (Ahd.)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S. 254(2):<\/strong> Appellate Tribunal- Orders- Rectification of mistake apparent from the record-Order cannot be rectified when on merit the decision was taken by Tribunal.   <\/strong><\/p>\n

  <\/p>\n

The Tribunal having found as a fact that assessee, instead of investing the amount of long term capital gains in purchase of residential house purchased the same with borrowed funds and denied relief u\/s 54F on that ground. The order of Tribunal cannot be said to be a misstate apparent on record. Application of assessee u\/s 254(2)  was rejected on the ground that  review of the said order on merit was not maintainable. (AY 2006-07)<\/p>\n

  <\/p>\n

 V. Kumuda (Smt) v. Dy. CIT (2012) 147 TTJ 636 (Hyd.)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.254(2): Appellate Tribunal – Orders- Rectification of mistake apparent from the record –Miscellaneous application filed beyond four years was dismissed. <\/strong><\/p>\n

  <\/p>\n

Assessee filed miscellaneous petitions on 4-4-2012 which was beyond four years against ex-parte order dated 23-2-2007 of Tribunal. Held that Tribunal was not enshrined with judicial power of entertaining such petition after expiry of relevant period, and condonation of delay was beyond jurisdiction of Tribunal. The miscellaneous application was dismissed. (A.Y. 1997-98) <\/p>\n

  <\/p>\n

Agni Briquette (P.) Ltd v. ACIT (2012) 137 ITD 147 (Ahd.)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.255(4): Appellate Tribunal-Procedure- Third member-Jurisdiction- Third member has no right to express third opinion.<\/strong><\/p>\n

  <\/p>\n

The third member held that jurisdiction of the Third member of the Tribunal is confined only to agreeing with either  of two opinions available before him given by the dissenting Members who heard the appeal first.  Third member has no right to express at a third opinion on the point of difference even if he is fully convinced about the correctness of such third opinion.(A.Y.2007-08)<\/p>\n

  <\/p>\n

Visen Industries  Ltd v. Addl. CIT (2012) 74 DTR 57(TM )(Mum.)(Trib.) <\/em><\/strong><\/p>\n

  <\/p>\n

S.260A:Appeal High Court-Review of judgment-Review  cannot be done on the ground that later contrary decision was not considered.  <\/strong><\/p>\n

  <\/p>\n

Review of the judgment on the ground that the court did not take into account the later contrary decision of the Karnataka High Court is not permissible. Court having its own way considered the scope of the amended provisions applicable to the case rendered by it, not being based merely on an earlier decision of the Karnataka High Court, there is no mistake or any other ground warranting interference with the judgment simply on the ground that the court has not taken into account the later contrary decision of the Karnataka High Court. <\/p>\n

  <\/p>\n

Patspin India Ltd. v. CIT (2012) 251 CTR 63 (Karn.) (High Court) <\/em><\/strong><\/p>\n

  <\/p>\n

S.260A:Appeal- High Court-Tax effect less than 10 lakhs- Low Tax Effect Circular  no. 3 \/2011 dated 9-2-2011 is retrospective and  applies to pending appeals.(S.268A )<\/strong><\/p>\n

  <\/p>\n

The department filed an appeal in June 2000, the tax effect of which was less than Rs. 10 lakhs. The assessee claimed, relying on Instruction No. 3\/2011 dated 9.2.2011<\/a>, that as the tax effect was less than Rs. 10 lakhs, the appeal was not maintainable. The department opposed the plea on the ground that the said Instruction was prospective<\/em> and did not apply to appeals filed before 9.2.2011. Held by the High Court dismissing the appeal:<\/p>\n

  <\/p>\n

S. 268A was inserted by the Finance Act 2008 w.r.e.f. 1.4.1999 to reduce litigation in small cases and regulate the right of Revenue to file or not to file appeal. Instruction no.3\/2011 dated 9.2.2011<\/a> has been issued by the CBDT  pursuant to this power. Though clause 11 provides that the instruction would apply to appeals filed on or after 9.2.2011 and appeals filed that date would be governed by the instructions operative at the time the appeal was filed, in a number of cases, it has been interpreted to mean that the monetary limits specified in the Instruction would apply to pending appeals as well (Vijaya V. Kavekar (Bom) followed (included in file<\/em>).(AY 1986-87)<\/p>\n

  <\/p>\n

CIT v. Virendra & Co (Bom.)(High Court) www.itatonline.org<\/em><\/strong><\/p>\n

  <\/p>\n

 <\/p>\n

  <\/p>\n

S.260A: Appeal- High Court-Penalty – Less than 10 lakhs- Low Tax Effect Circular  no. 3 \/2011 dated 9-2-2011 is retrospective and  applies to pending appeals.<\/strong><\/p>\n

  <\/p>\n

The department filed an appeal in the High Court where the tax effect was less than Rs. 10 lakhs. The assessee argued that in view of Instruction No. 3 of 2011 dated 9.2.2011<\/a>, the appeal was not maintainable. The department argued that the said Instruction made it clear that it applied only to appeals filed the date of its issue and had no retrospective effect. Held by the High Court dismissing the appeal:<\/p>\n

  <\/p>\n

The question about applicability of Instruction No.3 of 2011<\/a> has been considered in several judgements including Smt. Vijaya V. Kavekar<\/strong><\/a> (Bom) and Ranka & Ranka<\/strong><\/a> (Kar) and the view is that Instruction No.3 of 2011 dated 9.2.2011 would also apply to pending appeals<\/strong>. We are in agreement with this view and so tax appeals filed by the department which are below the tax effect of Rs.10 lakhs are not maintainable.<\/p>\n

  <\/p>\n

CIT v. Sureshchandra Durgaprasad Khatod (HUF) (Guj.) (High Court)<\/em><\/a>www.itatonline.org<\/em><\/a><\/h2>\n

S.263:<\/strong> Commissioner- Revision of orders prejudicial to revenue-<\/strong> Order found to be erroneous and prejudicial to interest of revenue – Commissioner to revise any order passed by any subordinate authority.<\/strong><\/p>\n

  <\/p>\n

Section 263 authorizes a Commissioner to revise any order passed by any subordinate authority, which is to be found erroneous and prejudicial to the interest of revenue. The order passed by the authority to give to the orders of the Tribunal is “any order” passed by assessing authority, who is subordinate to the commissioner. Thus, invoking of power of Revision u\/s 263 by Commissioner was within the permissible limits of the law. (AY 2002-03 and 2003-04) <\/p>\n

  <\/p>\n

Pentamedia Graphics Ltd. v. ACIT (2012) 17 ITR 302 (Chennai) (Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.263:Commissioner-Revision of orders prejudicial to revenue-Issue not considered by the Assessing Officer can be brought  within the jurisdiction of Commissioner.( S. 147)<\/strong><\/p>\n

  <\/p>\n

Income-escaping assessment order passed u\/s 143(3), r.w.s. 147, is an assessment order passed by Assessing Officer and therefore, any issue, which Commissioner thinks that Assessing Officer has not considered in said assessment, can be brought to life by Commissioner in exercise of his powers u\/s 263. In such a case, revisional power of Commissioner cannot be denied on ground that issue considered in income-escaping assessment and issue proposed to be considered in revisional proceedings are different (A.Y. 2002 – 2003) <\/p>\n

  <\/p>\n

Spencer & Co. Ltd.v. ACIT [2012] 137 ITD 141 (TM)(Chennai)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S. 263:<\/strong> Commissioner- Revision of orders prejudicial to revenue-Tax effect is  nil- Order not open to revision even if erroneous and prejudicial to the interest of revenue<\/strong><\/p>\n

  <\/p>\n

Where tax effect because of an order passed by the AO is NIL, such order even if erroneous being prejudicial to the interest of the revenue, is not open to revision u\/s 263 of the Act. (AY 2006-07) <\/p>\n

  <\/p>\n

Punjab Wool Syndicate v. ITO (2012) 17 ITR 439 (Chandigarh)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.269T:Repayment of loans and deposits – Otherwise than by account payee cheque or account payee bank draft-Debit by journal entries-Repayment through journal entries is in contravention of provision, however as the assessee had  shown reasonable cause the levy of penalty is not justified. (S.269SS,271D,271E, 273B)<\/strong><\/p>\n

  <\/p>\n

The assessee company has accepted the loan by account payee cheques. While repaying the loan the assessee settled the account by making  journal entries in respect  of sale price of shares  and balance amount  was paid by cheque. The Assessing Officer levied the penalty on the ground that the assessee had repaid the loan in contravention of section 269T. In appeal  Commissioner (Appeals) confirmed the levy of penalty. On appeal before the Tribunal, the Tribunal held that the payment through journal entries did not fall within the ambit  of section 269SS or 269T, hence consequently no penalty could be levied either under section 271 D or section 271E of the Act. On  appeal by revenue the Court held that repayment by debit of account through journal entries is in contravention of provision hence penalty can be levied. On facts the assessee had a reasonable cause and the assessee had no intention to evade tax hence the deletion of  penalty by Tribunal is justified. (A.S. 2003-04)<\/p>\n

  <\/p>\n

CIT v. Triumph International Finance (I) Ltd. (2012) 345 ITR 270\/74 DTR 57\/208 Taxman 299 (Bom.)(High Court)             <\/em><\/strong><\/p>\n

  <\/p>\n

S.271(1)(c): Penalty-Concealment- Ignorance of law- Bonafide belief-Ignorance of law caused by complicated provisions amounts to “bona fide belief”, deletion of penalty held to be justified.<\/strong> <\/strong><\/p>\n

  <\/p>\n

The assessee, a foreign national, was an employee of Sandvik AB, Sweden. He was deputed to India and appointed Managing Director of Sandvik Asia Ltd. In addition to the salary from Sandvik Asia, he received an amount from Sandvik AB, Sweden, being the difference between the tax rates in India and Sweden. In the ROI, the assessee did not offer the amount received from Sandvik AB to tax even though it was taxable in India. On being asked by the AO, the assessee offered the same to tax and paid tax thereon for all years including the earlier and subsequent AYs. The AO levied penalty on the ground that the assessee was assisted by tax experts and so ignorance of the law was no excuse. However, the Tribunal deleted the penalty on the ground that (i) there were multiple amendments to the statutory provisions (s. 10(b)(vii)) and the concept of grossing-up embedded therein is of a technical nature and out of the scope of common knowledge of the tax payers, (ii) the possibility of mistake by even tax experts cannot be ruled out; (iii) the assessee relied on the tax experts and signed the ROI, (iv) the conduct of the assessee in paying up the taxes for all the years including those that were beyond reassessment showed his bona fides, (v) the claim of bona fide belief need not be substantiated with documentary evidence but can also be substantiated by circumstantial evidence; (vi) penalty is not an automatic consequence of addition to income; (vii) concealment implies that the person is hiding, covering up or camouflaging an income; penalty is not leviable in case where assessee is able to provide a ‘bona fide’ explanation; penalty is not leviable in cases where assessee made errors,under bona fide beliefs. On appeal by the department to the High Court, HELD dismissing the appeal:<\/p>\n

  <\/p>\n

In the ROI, the assessee had not offered the above reimbursed amount to tax under the bonafide belief that the same were not taxable. However, when a query was raised by the AO during the assessment proceedings, the assessee immediately offered that amount to tax for all the years. The penalty imposed u\/s 271(1)(c) by the AO was deleted by the ITAT after recording detailed reasons that it was a case of bonafide mistake and that there was no intention to evade tax. The discretion exercised by the ITAT in accepting the explanation given by the assessee is reasonable and we see no reason to interfere with the decision of the Tribunal which is based on finding of facts.<\/p>\n

  <\/p>\n

CIT v. Hans Christian Gass (Mum.)(High Court) www.itatonline.org<\/em><\/strong><\/p>\n

  <\/p>\n

S. 271(1)(c):Penalty- Concealment –Revised return-Survey-Penalty for concealment cannot be levied  if revised ROI filed after survey  but before issue of s. 148 notice.(S. 133A,148)<\/strong> <\/p>\n

  <\/p>\n

It is the settled law that if a revised return offering additional income is filed after investigation has started<\/strong> <\/strong>but <\/strong>before the issue<\/strong> of the s. 148 notice, s. 271(1)(c) penalty is not leviable. In CIT v.Sureshchand Mittal(2001)<\/strong> 251 ITR 9, (SC)the Supreme Court held that even where the assessee surrendered additional income<\/strong> by way of a revised return after persistent queries<\/strong> by the AO, once the revised ROI has been regularized<\/strong> by the revenue, the assessee’s explanation that he had declared the additional income to buy peace<\/strong> had to be treated as bona fide<\/strong> and s. 271(1)(c) penalty could not be levied. On facts, as the assessee filed a revised ROI after survey<\/strong> but before the issue<\/strong> of the s. 148 notice, hence penalty was not leviable.(A.Y. 2005-06)<\/p>\n

  <\/p>\n

Radheshyam Sarda v. ACIT (Indore)(Trib.)www.itatonline.org<\/em><\/h2>\n

S.271(1)(c ): Penalty – Concealment- Advice of counsel-Bona-fide act on advice of counsel, no penalty could be levied as no concealment of income.  <\/strong><\/p>\n

  <\/p>\n

Where the assessee had bona-fide acted on advice of his counsel in respect of claim of exemption under particular provisions of the Act, and which are at variance even under same chapter, where assessee so acted, the claim of the assessee could at the best be called a bona-fide mistake. Thus, penalty u\/s 271(1)(c) could not be levied. (A.Y.2006-07)<\/p>\n

  <\/p>\n

Majorjit Singh v. ACIT (2012) 17 ITR 183 (Chandigarh)(Trib.) <\/em><\/strong><\/p>\n

  <\/p>\n

S.271(1)(c):Penalty–Concealment-<\/strong>Confirming addition in quantum appeal-Mere fact of making or confirming the addition in quantum cannot ipso facto lead to inference that there has been concealment of income or furnishing of inaccurate particulars of such income by assessee so as to levy penalty under section 271(l)(c).<\/strong> <\/strong><\/p>\n

  <\/p>\n

Assessee entered into a licence agreement with NOPL in terms of which it was permitted to run a fast food restaurant in premises of NOPL for eleven months. Shareholding of assessee-company as well as NOPL comprised of certain members of ‘N’ family. Some dispute on distribution of properties, was going on amongst them. A settlement was arrived through which NOPL was allotted to ‘R’ who wanted assessee to vacate premises. In legal proceedings, city civil court directed assessee-company to deliver vacant possession of premises. Assessee filed an appeal before High Court against above order of city civil court and obtained an order of stay on operation of decree till disposal of appeal subject to condition that assessee would pay a sum of Rs.10 lakhs towards arrears and continue to deposit a sum of Rs.1.25 lakhs per month with effect from 1-8-1993. Thereupon, ‘R’ filed suit before the High Court praying for possession of premises and also certain amount as mesne profits for illegal occupation of premises by assessee-company. Subsequently, a consent was arrived at in terms of which assessee had to pay a Rs.34.57 crores to NOPL.  Since assessee had already paid a sum of Rs.1.10 crores over a period to NOPL as per directive of High Court, assessee reduced this sum from total agreed amount of Rs.34.57 crores and paid the remaining amount of Rs.33.47 crores to NOPL. Assessee’s claim for deduction in respect of said payment was rejected on ground that it was a capital expenditure. Further, Assessing Officer passed a penalty order under section 271(l)(c) for raising a false claim in respect of lump-sum payment of Rs.34.57 crores. Mere fact of making or confirming the addition in quantum cannot ipso facto lead to inference that there has been concealment of income or furnishing of inaccurate particulars of such income by assessee so as to levy penalty under section 271(l)(c).Since it was apparent from records that prior to making payment in terms of consent decree assessee had made interim payments of similar nature as per order of High Court which had been allowed, claim raised by assessee in respect of lump-sum payment was bonafide. Since assessee had made a proper disclosure of facts material to claim in question, there was no concealment of particulars of income or furnishing of inaccurate particulars of such income by assessee so as to attract levy of penalty under section 271(l)(c).(A.Y. 2002 – 2003) <\/p>\n

  <\/p>\n

Narangs International Hotels (P.) Ltd. v. DCIT [2012] 137 ITD 53 (TM)(Mum.)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.271(1)(c):Penalty – Concealment –  Death of the assessee- Revised return –Order passed on dead person without bringing on record of legal heir held to be bad in law. As the amount of gift was disclosed in revised return levy of penalty held to be not justified.    <\/strong><\/p>\n

  <\/p>\n

During pendency of penalty proceedings assessee died and, thereupon Assessing Officer without issuing a fresh notice to legal heir of deceased-assessee passed a penalty order. The Tribunal held that the order so passed was not sustainable being violative of principles of natural justice. Assessee filed revised return wherein he disclosed a gift of Rs. one lakh received from one ‘B’. Assessee’s case was that though sum of Rs. 1 lakh was given by way of gift by ‘B’, when he was asked to give in writing for income tax purpose, he showed his inability to furnish details and hence assessee surrendered amount in revised return. Assessing Officer took a view that assessee had filed revised return because Investigation wing had already started investigation in many cases in respect of assessee. However, Assessing Officer had not brought any material on record to indicate that revenue was aware of non-genuineness of gift received by assessee. Assessing Officer had not made any effort to prove either by obtaining statement from donor or otherwise, that gift was not genuine. The Tribunal held that it was not a case of furnishing inaccurate particulars of income and, therefore, no penalty could be levied.(A.Y. 2001-02) <\/strong><\/p>\n

  <\/p>\n

Jai NarainUpadhyay v.ACIT (2012) 137 ITD 241(TM)(Lucknow)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.271(1)(c):Penalty–Concealment–Book Profits–<\/strong>Penalty under section 271(l)(c) cannot be levied on additions made under normal provisions of Act when income in assessment has been finally computed on basis of book profit.<\/strong>( S. 73, 115JB)<\/strong><\/p>\n

  <\/p>\n

Assessee claimed short-term capital gain on sale of shares. However, Assessing Officer rejected said claim and treated gain as speculative business income under section 73. Assessee submitted that it was not engaged in share trading business and that it purchased those shares for investment purposes and, it was under bona fide belief that income from sale of share was taxable as capital gains. The said explanation was rejected by the Assessing Officer and penalty proceedings were initiated on ground that in quantum proceedings assessee had failed to substantiate its claim under head ‘capital gains’ instead of speculation income. Held that the assessment order is not a final word in penalty proceedings and howsoever good findings may be in assessment proceedings, they are not conclusive so far as penalty proceedings are concerned. Since assessee was carrying out business of infrastructure development and sale and purchase of shares was only ancillary, assessee could not be held to be guilty of furnishing inaccurate particulars of income and hence penalty was deleted. (A.Y. 2007-08) <\/strong><\/p>\n

  <\/p>\n

BSEL Infrastructure Realty Ltd. v. ACIT (2012) 137 ITD 61 (Mum.)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

Wealth Tax Act<\/strong><\/p>\n

  <\/p>\n

S. 2(ea):Definitions-Asset-Building –Let out of factory building and plant -Wealth tax cannot be levied as it remained as commercial asset.<\/strong><\/p>\n

  <\/p>\n

The assessee was carrying on business of manufacturing for two years , however  the same was  leased thereafter and earned the lease rentals. The Wealth tax Officer levied the wealth tax, which was confirmed in appeal. On appeal to the Tribunal the Tribunal held that  even though the assessee is receiving lease rent from lessee, the property i.e. building ,plant  and machinery, etc remained commercial assets exploited for the purpose of carrying on manufacturing business, therefore, such assets did not attract levy of wealth –tax. (A.Y. 1997-98 & 1998-99)<\/p>\n

  <\/p>\n

Vyline Glass Works Ltd. v. ACWT (2012) 147 TTJ 642 (Chennai)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.2(ea):Definitions – Assets – Commercial establishment or complex-Leasing of premises- Leasing of premises cannot be considered as commercial establishment hence liable to wealth tax.  <\/strong><\/p>\n

  <\/p>\n

Where assessee was not in business of letting out of its office premises and intention of letting out same was not to exploit business assets in relation to its business, said premises would not fall in category of commercial establishment or complex as per provisions of section 2(ea)(i)(5) and therefore, above premises was assessable to wealth-tax (A.Y. 2006-07) <\/p>\n

  <\/p>\n

Naturell (India) (P.) Ltd.v. ACWT [2012] 137 ITD 136 (Mum.)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.7:Valuation of assets- Residential premises – Rule 3 of Schedule III-Benefit of third proviso is available as the option is with assessee.<\/strong><\/p>\n

  <\/p>\n

Assessee owned a property. He had valued said property on basis of capitalization of net maintainable rent as per third proviso to Rule 3 of Schedule III of Act. The Assessing Officer having noticed that assessee had not occupied property in question for residential purpose for period of 12 months ending on 31-3-2001 valued property as per second proviso to Rule 3 of Schedule III. It was held that the language of third and fourth provisos to rule 3 of Schedule III makes it clear that there may be more than one house belonging to assessee and exclusively used by assessee for his own residential purpose and in that case assessee may not stay in all house, but still benefit of third proviso is available to assessee at his option to one of such house and staying in house is not a mandatory condition. Since property in question was residential house which had not been let out or used for purpose other than residential, conditions as enumerated in third proviso to rule 3 of Schedule III were satisfied by assessee. (A. Y. 2001-02) <\/strong><\/p>\n

  <\/p>\n

Ramesh D. Hariani v.WTO[2012] 137 ITD 128 (Mum.)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.17:Reassessment – Reason to believe – No WT returns were filed by assessee – Assessee cannot challenge notice issued under Section 17<\/strong><\/p>\n

  <\/p>\n

Assessee cannot challenge notice issued under Section 17 on the ground of change of opinion where no WT returns were filed by assessee.  (AY 1997-98 & 1998-99)<\/p>\n

  <\/p>\n

Vyline Glass Works Ltd. v. ACWT (2012) 147 TTJ 642 (Chennai)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

S.17:Reassessment –Information- Tangible material-Information in income tax proceedings constitute a tangible material for reassessment.(S.143 (3))  <\/strong><\/p>\n

  <\/p>\n

Information and material found during course of assessment proceedings under section 143(3) of Income-tax Act, 1961 constitute a tangible material for forming a belief that net wealth of assessee assessable to tax has escaped assessment. (A.Y. 2006-07) <\/u><\/strong><\/p>\n

  <\/p>\n

Naturell (India) (P.) Ltd. v. ACWT [2012] 137 ITD 136 (Mum.)(Trib.)<\/em><\/strong><\/p>\n

  <\/p>\n

Kar  Vivad  Samadhan Scheme-1998.<\/strong><\/p>\n

  <\/p>\n

S.90: Settlement of  tax arrear-Pendency of  revenue’s appeal-Once final determination is made, hearing of any pending appeal before the appellate forum for passing order on merit is not possible. (S.92) <\/strong><\/p>\n

  <\/p>\n

The assessee opted for the benefit of Kar Vivad Samadhan Scheme .The Authority has passed the order   final tax  arrear.  When the application was filed the assessee was not aware  whether the department has filed an appeal before the Tribunal. On appeal before the Tribunal, the revenue contended that  the benefit of Kar Vivad Samadhan Scheme  is not available to the appellant in respect of the Departmental appeal . The Tribunal accepted the argument of revenue and held that the assessee is not eligible for benefit of Kar Vivad Scheme in respect of departmental appeal. On appeal to the  High Court, the Court held that once determination is made under section  90 of Finance (No.2) Act, 1998, towards full and  final  settlement of tax arrears, there is nothing to be treated as pending for final consideration before any authority , including an appeal at the instance of the Revenue  before the Tribunal. Accordingly the order of Tribunal set-a-side and appeal was decided in favour of assessee.(A.Y.1993-94)<\/p>\n

  <\/p>\n

S. Jagtrakshagan (Dr) v.DCIT ( 2012) 73 DTR 214 (Mad) (High Court)<\/em><\/strong><\/p>\n

  <\/p>\n

Interpretation-<\/p>\n

  <\/p>\n

Doctrine of merger –Appeal –Dismissal of appeal on ground of limitation.<\/strong><\/p>\n

  <\/p>\n

 <\/strong>The court held that if for any reason an appeal is dismissed on the ground of limitation and not on merits , that order would not merge with the orders passed by the first appellate authority.<\/p>\n

  <\/p>\n

Raja Mechanical Co.(P) Ltd  v. CCE (2012) 345 ITR 356 9(SC) <\/em><\/strong><\/p>\n

  <\/p>\n

Notification.<\/strong><\/p>\n

  <\/p>\n

S.90: Agreement between the Government of Republic of  India and the Government of Nepal for the Avoidance of Double Taxation and the prevention of fiscal evasion with respect to taxes on income .( 2012) 345 ITR  128(ST).<\/p>\n

  <\/p>\n

Articles.<\/strong><\/p>\n

  <\/p>\n

S.9: Form and spirit of “Business connection” under the Income-Tax Act 1961 by Prateek  Shanker  Srivastava (2012) 345 ITR 19 (Journal)<\/p>\n

  <\/p>\n

S.14A: Business expenditure-  Ready for dissection  by Minu Agrwal (2012) 251 CTR (Articles) 17<\/p>\n

  <\/p>\n

S.32: Depreciation-Additional depreciation for  Wind mils – A clarificatory amendment .by R.Raghunathn  (2012) 251 CTR (Articles) 32<\/p>\n

  <\/p>\n

S.37: Business expenditure – Deductibility of  foreign tax-by Samir  S. Shah  and Darsahna  A. Shah ( 2012) 251 CTR (Articles) 37<\/p>\n

  <\/p>\n

S.69C: Income\/Undisclosed sources- Section 69C –Is it draconian provision  by P.C.Chadga (2012) 251 CTR (Articles) 27<\/p>\n

  <\/p>\n

S.147:Reassessment- Vodafone will be un affected by retrospective Legislation-No reopening is possible in their case  by  Gopal Nathani (2012) 345 ITR 27(Journal) <\/p>\n

  <\/p>\n

S.194J: Deduction at source- To invoke TDS provision factum of payment by assessee has to be proved by D.C. Agrawal ( 2012) 208 Taxman 67 (Mag) (Article) <\/p>\n

  <\/p>\n

S.199:Refund- Tax payers’ night mares in getting credit for TDS by T.N.Pandey (2012) 251 CTR 20<\/p>\n

  <\/p>\n

General<\/p>\n

  <\/p>\n

A.<\/p>\n

  <\/p>\n

Amalgamation of a partnership firm with a company under 391 of the Companies Act , 1956 –Study of income –tax and accounting  aspects  by  Omkar v.Deosthale  (2012) 208 Taxman 60 (Mag) (Article)<\/p>\n

  <\/p>\n

F.<\/p>\n

  <\/p>\n

Family arrangement\/Settlement –Important aspects  by S.Krishnan  (2012) 208 Taxman 57 (Mag) (Article )<\/p>\n

  <\/p>\n

G.<\/p>\n

  <\/p>\n

GAAR- FAQS  on GAAR Guidelines  by Sinivasan Anand G. (2012) 208 Taxman  70 (Mag) (Article)<\/p>\n

  <\/p>\n

Gifts under Muslim law and the requirement of registration :A study in the light of Supreme Court’s decision in Hafeez Bibi & Others (AIR 2011 SC 1695) by :Prof.(Dr) Mukund  Sarda, Principal & Dean of the Bharti Vidya Peet University, New law college, Pune. (2012) AIR Journal 129 <\/p>\n

  <\/p>\n\n\n
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No time to read through voluminous case reports? Can\u2019t separate the wheat from the chaff? Fret Not! The KSA Legal team will bring you up-to-speed with the choicest of case-law so you can focus your attention only on the important …<\/p>\n

Digest of important case law – July 2012<\/span> Read More »<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"open","ping_status":"closed","template":"","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"footnotes":""},"class_list":["post-5483","page","type-page","status-publish","hentry"],"acf":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/pages\/5483","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/comments?post=5483"}],"version-history":[{"count":0,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/pages\/5483\/revisions"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/media?parent=5483"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}