{"id":7839,"date":"2014-04-08T21:24:33","date_gmt":"2014-04-08T15:54:33","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?page_id=7839"},"modified":"2014-04-08T21:24:33","modified_gmt":"2014-04-08T15:54:33","slug":"digest-of-important-case-laws-january-2014","status":"publish","type":"page","link":"https:\/\/itatonline.org\/archives\/digest-of-important-case-laws-january-2014\/","title":{"rendered":"Digest Of Important Case Laws &#8211; January 2014"},"content":{"rendered":"<div id=AddressingEnvelope>\n<a href=\"https:\/\/i0.wp.com\/itatonline.org\/archives\/wp-content\/uploads\/2008\/10\/ksalegal.gif\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/itatonline.org\/archives\/wp-content\/uploads\/2008\/10\/ksalegal.gif?resize=157%2C133\" alt=\"\" title=\"ksalegal\" width=\"157\" height=\"133\" class=\"alignleft size-full wp-image-183\" \/><\/a><\/p>\n<div id=MainEnvelope>\nNo time to read through voluminous case reports?<\/p>\n<div id=RSVP>\nCan\u2019t separate the wheat from the chaff?\n<\/div>\n<div id=Invite>\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<p><DIV class=team>Compiled By: KSA Legal Research Team<\/DIV><\/p>\n<\/div>\n<p><DIV class=clear-simple><\/DIV>\n<\/div>\n<div class=\"clock\">\n<table border=\"0\">\n<tr>\n<td colspan=\"2\"><strong>Digest of important case law &#8211; January 2014 <\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"264\" rowspan=\"2\" valign=\"top\">\n<script type=\"text\/javascript\"><!--\ngoogle_ad_client = \"ca-pub-6440093791992877\";\n\/* DLCenter_336x280 *\/\ngoogle_ad_slot = \"7705834990\";\ngoogle_ad_width = 336;\ngoogle_ad_height = 280;\n\/\/-->\n<\/script><br \/>\n<script type=\"text\/javascript\"\nsrc=\"http:\/\/pagead2.googlesyndication.com\/pagead\/show_ads.js\">\n<\/script><\/p>\n<\/td>\n<td width=\"271\" valign=\"top\">\n<script type=\"text\/javascript\"><!--\ngoogle_ad_client = \"ca-pub-6440093791992877\";\n\/* DLCenter_336x280 *\/\ngoogle_ad_slot = \"7705834990\";\ngoogle_ad_width = 336;\ngoogle_ad_height = 280;\n\/\/-->\n<\/script><br \/>\n<script type=\"text\/javascript\"\nsrc=\"http:\/\/pagead2.googlesyndication.com\/pagead\/show_ads.js\">\n<\/script><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\"><\/td>\n<\/tr>\n<tr>\n<td>Download Monthly <strong>January 2014<\/strong> Digest in pdf format<\/td>\n<td align=\"right\">Download <strong>Consolidated Digest<\/strong> (Jan 2013 to November 2013) in pdf format<\/td>\n<\/tr>\n<tr>\n<td align=\"left\" valign=\"top\"><a href=\"https:\/\/itatonline.org\/archives\/?dl_id=1221\" onclick=\"if (event.button==0) \r\n     setTimeout(function () { window.location = 'http:\/\/itatonline.org\/downloads.php?varname=dl_id=1221&varname2=Monthly_Digest_January_2014.pdf'; }, 100)\" ><strong>Click here to download the judgement (Monthly_Digest_January_2014.pdf) <\/strong> <\/a><\/p> <\/td>\n<td align=\"right\" valign=\"top\"><a href=\"https:\/\/itatonline.org\/archives\/?dl_id=1187\" onclick=\"if (event.button==0) \r\n     setTimeout(function () { window.location = 'http:\/\/itatonline.org\/downloads.php?varname=dl_id=1187&varname2=Consolidated_Digest_Jan_Nov_2013.pdf'; }, 100)\" ><strong>Click here to download the judgement (Consolidated_Digest_Jan_Nov_2013.pdf) <\/strong> <\/a><\/p> <\/td>\n<\/tr>\n<tr>\n<td colspan=\"2\">\n<div class=\"journal2\">Download <strong>Consolidated Digest<\/strong> (Jan 2012 to December 2012) in pdf format <a href=\"https:\/\/itatonline.org\/archives\/?dl_id=1087\" onclick=\"if (event.button==0) \r\n     setTimeout(function () { window.location = 'http:\/\/itatonline.org\/downloads.php?varname=dl_id=1087&varname2=Consolidated_Digest_Jan_Dec_2012.pdf'; }, 100)\" ><strong>Click here to download the judgement (Consolidated_Digest_Jan_Dec_2012.pdf) <\/strong> <\/a><\/p><\/div>\n<\/td>\n<\/tr>\n<tr>\n<td colspan=\"2\"><a href=\"http:\/\/itatonline.org\/archives\/index.php\/digest-of-important-case-laws-january-to-december-2013\/\">Looking for the Previous Month&#8217;s digest? Click here.<\/a> <\/td>\n<\/tr>\n<\/table>\n<\/div>\n<p><script type=\"text\/javascript\"><!--\ngoogle_ad_client = \"ca-pub-6440093791992877\";\n\/* DLCenter_728x90 *\/\ngoogle_ad_slot = \"3275635396\";\ngoogle_ad_width = 728;\ngoogle_ad_height = 90;\n\/\/-->\n<\/script><br \/>\n<script type=\"text\/javascript\"\nsrc=\"http:\/\/pagead2.googlesyndication.com\/pagead\/show_ads.js\">\n<\/script><\/p>\n<div class=\"journal\">\n<p><strong>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<div>\n<div style='float:left; margin-top:5px ; margin-left:5px ; margin-right:10px ; margin-bottom:5px ;'>\n<\/div>\n<p><strong>S.2(22)(e): Deemed dividend&ndash;Not  a share holder-Loans or advances from another company cannot be treated as  deemed dividend merely on the ground that there was common shareholder in both  the companies. <\/strong><br \/>\n  The  assessee company had received loan from another company. The assessee was not a  shareholder of the other company. However, there was a common shareholder  (individual) who held more than 50% in both the companies. In view of the above  facts the AO held that the amount received by the assessee from an another  company was a deemed dividend u\/s 2(22)(e) of the Act. The CIT(A) upheld the  AO&rsquo;s order. On further appeal, the Tribunal deleted the addition made by AO  following the decision of the jurisdictional High Court in CIT v. Ankitech (P.)  Ltd. 340 ITR 14 (Delhi) where it has been held that deemed dividend provisions  cannot be invoked merely because there are common shareholders between the two  companies. The High Court followed the aforesaid judgment and dismissed  revenue&rsquo;s appeal. (AY. 2006-07)<br \/>\n  <strong>CIT .v. AR Magnetics (P.) Ltd. (2014) 220 Taxman 209 (<\/strong><strong>Delhi<\/strong><strong>)(HC)<\/strong><\/p>\n<p><strong>S.2(22)(e): Deemed dividend&ndash;Not a share holder-Inter-corporate deposit-Where  assessee had received a deposit from a company but did not own any share of  that company it could not be treated as a deemed dividend.<\/strong><br \/>\n  The Assessee received a deposit of Rs. 25  lakhs from Amigo Brushes Pvt. Ltd. During the assessment, the Assessing Officer  treated the deposits as a loan and consequently deemed to be a deemed dividend  under Section 2(22)(e) of the Act&nbsp; from  Amigo Brushes Pvt. Ltd.&nbsp; The assessee  contended that it did not hold a share in other company from which it had  received deposit and, accordingly, it could not be treated to be a deemed  dividend under Section 2(22)(e) of the Act . The CIT(A) uphold the order of the  AO. On appeal, the tribunal reversed the order of CIT(A). The High Court  decided the issue in favour of the assessee, relying on the decision of the  Division Bench of the High Court in <em>CIT <\/em>v.<em> Ankitech (P.) Ltd. <\/em>(2012) 340  ITR 14 (Del) wherein it was held that if the assessee-company does  not hold a share in other company from which it had received deposit then it  cannot be treated to be a deemed dividend under Section 2(22)(e) of the Act.  (AY. 2000-01)<br \/>\n  <strong>CIT .v. Daisy Packers (P.) Ltd. (2014) 220 Taxman 331 (Guj)(HC)<\/strong><\/p>\n<p><strong>S.2(22)(e): Deemed dividend-Not a  registered share holder-Where assessee-company received share application money  from another company, the amount in question could not be taxed as deemed  dividend in its hands as the assessee was not a registered shareholder of said  company.<\/strong> <br \/>\n  The  assessee had derived income from trading in shares. During the course of  assessment proceedings, it was revealed that the assessee had received a sum of  Rs.23.00 lacs from M\/s. Japanwala Jewellers (P.) Ltd., Jaipur as share application  money. The assessing authority, after taking note of Section 2(22)(e) and  available records, observed that the share application money received by the  assessee company was in the nature of an unsecured loan and further treated it  to be deemed dividend in the hands of the assessee company under the provisions  of Section 2(22)(e). The High Court upholding the order of the CIT(A) and  Tribunal hold that liability of tax as deemed dividend would be attracted in  the hands of the individuals who were shareholders of the said company and not  in the hands of the company.&nbsp; <br \/>\n  <strong>CIT .v. Suram Holding (P.) Ltd. (2014) 220 Taxman 327 (Raj.)(HC)<\/strong><\/p>\n<p><strong>S.2(14):  Capital asset-Agricultural land-Capital gains-land situated within limits of 8  Kms from any municipality would be a capital asset, sale of which would attract  capital gain. [S.45]<\/strong><br \/>\n  The assessee  owned a piece of land which was situated at Village Islampur, District  Pathankot. The same was sold on 29.8.2005. She claimed that since the land is  an agricultural land, therefore, it does not attract any capital gain. Before  the Assessing Officer, a certificate issued by the Tehsildar, Pathankot was  filed to the effect that the land is at a distance of 9 KMs from Pathankot and  thus not a capital asset. The Assessing Officer took a note of the fact that  Government of Punjab vide notification dated 31.11.2004 extended the Municipal  Limits of Municipal Council, Sujanpur upto Malikpur and that the said Municipal  Council has established Octroi post at Malikpur and the land sold was situated  inside the Octroi post. Thus, it was said to be a capital asset. The CIT(A) and  the Tribunal set aside the order passed by the Assessing Officer. On an appeal  by the department, the High Court decided the issue in favour of the revenue by  relying on the judgment of CIT v. Smt. Anjana Sehgal (ITA No. 276\/2004)  (P&amp;H) and held that since the land is situated within the Municipal limits  of Municipal Council, Sujanpur, it is a capital asset and hence subject to  capital gains. <br \/>\n  <strong>CIT .v. Neeru Aggarwal (Smt.) (2014) 220 Taxman 329 (P&amp;H)(HC)<\/strong><\/p>\n<p><strong>S.2(14): Capital  asset-Agricultural land- Transfer of land on as it is and where it is basis to  a developer- Neither assessable as capital gains nor business income. [S.10(1),  28(i), 45]<\/strong><br \/>\n  The assessee is engaged in agricultural  operations on land classified as agricultural land in&nbsp; revenue records. The land was situated in  rural area outside municipal limits. Assessee transferred the said land to developer  on &ldquo;as is and where is&rdquo; basis to a developer. Tribunal held that profit earned  on sale of land was agricultural income. Hence, it is exempt from tax. It is  neither assessable as capital gains nor business income. (AY.2006-07)<br \/>\n  <strong>Harniks<\/strong><strong> <\/strong><strong>Park<\/strong><strong> (P.) Ltd. .v. ITO (2014) 62 SOT 15(URO)\/41 taxmann.com 109 (Hyd.)(Trib.)<\/strong><\/p>\n<p><strong>S.2(24):  Income-Capital or revenue-Carbon credit-Receipt on account of carbon credit is  capital receipt hence not liable to tax.&nbsp;&nbsp;  [S.4, 28(iv), 45]<\/strong><br \/>\n  The amount received  for carbon credits has no element of profit or gain and it cannot be subjected  to tax in any manner under any head of income.&nbsp;(AY. 2007-08 to 2009-10)<br \/>\n  <strong>Shree Cement Ltd. v. <\/strong><strong>ACIT<\/strong><strong>(2014)100  DTR 33 (Jaipur)(Trib.) <\/strong><br \/>\n  <strong>&nbsp;&nbsp;&nbsp; <\/strong> <br \/>\n  <strong>S.2(47)(v):  Transfer-Capital gains-Mere execution of a development agreement is not a  &ldquo;transfer&rdquo; if possession as per s. 53A of the Transfer of Property Act is not  given.[S.45, Transfer of Property Act , 53A]]<\/strong> <br \/>\n  Though the  development agreement was executed in AY 2003-04, the possession as  contemplated in Section 53A of the Transfer of Property Act was in fact not  handed over by the assessee to the developer. The agreement only permitted the  development to be carried out by the said developer. The entire control over the  property was in fact with the assessee inasmuch as the licence to construct the  property was also in the name of the assessee and the occupancy certificate was  also given to the assessee. Therefore, the execution of the agreement could not  amount to transfer as contemplated under Section 53A of the Transfer of  Property Act. The agreement was subsequently specifically modified and the  assessee was liable to pay the capital gain as per the last agreement i.e. for  assessment year 2008-09.(AY.2008-09)( Tax Appeal No. 11 &amp; 12 of 2013, dt. 2\/12\/2013.) <br \/>\n  <strong>CIT .v. Sadia Shaikh (Bom.)(HC), www.itatonline.org<\/strong><\/p>\n<p><strong>S.4:  Income-Capital or revenue-Termination of Agreement-Compensation so received was  capital receipt and, hence, not taxable. [S.28(i)]<\/strong><br \/>\n  Compensation  was received by assessee for termination of agreement for providing back office  support services to bank. Assessee had parted with personnel who were handling  this activity of assessee company to give them on role of bank and bank handled  such activity itself. Compensation so received was capital receipt and hence  not taxable. (AYs. 2003-04 to 2006-07) <br \/>\n  <strong>3i Infotech Ltd .v. Add. CIT  (2014) 146 ITD 405 \/ (2013) 38 Taxmann.com 422 (Mum.)(Trib.)<\/strong> <br \/>\n  <strong>S.5: Scope of Total Income-Real  income-Notional interest-<\/strong><strong>Parties were agreed on not to charge  interest as per the conditions laid down in MOU, than the AO cannot compel them  to do so.<\/strong> <strong><\/strong><br \/>\n  In terms of MOU, the assessee had not  charged interest from its collection agent Sahara India, except when the delay in transmission  of funds exceeded two months. The Assessing Officer treated the amount  outstanding for less than two months as a loan to Sahara India in the form of working capital on which  no interest was charged. Accordingly, the Assessing Officer had disallowed interest  on the borrowings to the extent of interest not charged on the interest-free  loan given to Sahara India. On appeal, the CIT(A) as well as the  Tribunal deleted the addition made by the Assessing Officer. On appeal by the  Revenue, the High Court held that the parties were agreed on not to charge  interest as per the conditions laid down in MOU, than the AO cannot compel them  to do so. It is only the assessee who knows the commercial and business  relations and situation thereof and the department is not supposed to  interfere. (AYs. 1992-93 to 1994-95)<br \/>\n  <strong>CIT .v. Sahara India Mutual Benefit Co. Ltd. (2014) 220 Taxman 16  (All.)(HC)&nbsp; <\/strong><\/p>\n<table border=\"1\" cellspacing=\"0\" cellpadding=\"5\">\n<tr>\n<td width=\"90%\" valign=\"top\">The contents of this document are solely for informational purpose. It does not constitute professional advice or a formal recommendation. While due care has been taken in preparing this document, the existence of mistakes and omissions herein is not ruled out. Neither the author nor itatonline.org and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any inaccurate or incomplete information in this document nor for any actions taken in reliance thereon. No part of this document should be distributed or copied (except for personal, non-commercial use) without express written permission of itatonline.org. <\/td>\n<\/tr>\n<\/table>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>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 &hellip;<\/p>\n<p class=\"read-more\"> <a class=\"\" href=\"https:\/\/itatonline.org\/archives\/digest-of-important-case-laws-january-2014\/\"> <span class=\"screen-reader-text\">Digest Of Important Case Laws &#8211; January 2014<\/span> Read More &raquo;<\/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,"footnotes":""},"class_list":["post-7839","page","type-page","status-publish","hentry"],"acf":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/pages\/7839","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=7839"}],"version-history":[{"count":0,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/pages\/7839\/revisions"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/media?parent=7839"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}