S.80IA: Industrial undertakings – Enterprises engaged in infrastructure development -Strictures – Construction of roads and other infrastructure works- Concurrent findings of fact – Department failed to establish perversity or application of an erroneous legal test – High Court cannot reappreciate evidence or substitute its view for concurrent findings of fact in the absence of a substantial question of law – Departmental appeal dismissed.- The Court observed that departmental appeals under section 260A should not be filed routinely by mechanically framing purported substantial questions of law. The Court observed that the Departmental Authorities should look into these aspects of the matter and take corrective step(s), as may be deemed necessary. Copy was forwarded to the PCIT. [S.80IA(4), 260A.]

S.195: Deduction of tax at source – Payment to non-resident – Acquisition of trademark – Assessee acquired absolute ownership of trademark “Jamawar” from a non-resident for lump-sum consideration – Assessee furnished trademark assignment agreement, proof of ownership, nature of right transferred, valuation details, commercial terms and Tax Residency Certificate of recipient – Payment was for acquisition of a capital asset and not for use of trademark or payment of royalty – Consideration for outright acquisition of trademark being capital gains in the hands of recipient, provisions of section 195 were not attracted – Assessee could not be treated as assessee-in-default under section 201(1) and interest under section 201(1A) was not leviable – Demand deleted. [S. 5, 9(1)(vi), 201, 201(1A).]

S.68: Cash credits –Strictures – Share capital and Compulsorily Convertible Debentures – Investment of Rs.55 crores by foreign investor companies incorporated in Mauritius and Cyprus – Assessee furnished investment-cum-collaboration agreement, details of foreign inward remittances, audited financial statements of investor companies and other supporting documents – TPO and FT&TR reports did not contain any adverse finding – CIT(A) and Tribunal recorded concurrent findings that investments were genuine and duly explained – Revenue failed to establish that findings were perverse –An Assessing Officer is required to objectively consider the assessee’s reply, pleas and documents, and ignoring such material amounts to a breach of principles of natural justice and procedural fairness – Addition was deleted- Order of Tribunal affirmed.[S.143(3), 260A.]

S.148: Reassessment – Notice issued in the name of non-existent amalgamating company – Amalgamation sanctioned by the Bombay High Court prior to issuance of notice under section 148 – Transferor company had ceased to exist in law – Jurisdictional notice issued against a non-existent entity was invalid – Subsequent participation by the successor company in reassessment proceedings could not confer jurisdiction on Assessing Officer – Defect was jurisdictional and not a mere mistake in description – Section 292B could not validate proceedings initiated against a non-existent person – Reassessment proceedings quashed. [S. 147, 151, 170, 292B.]

S.143(3): Assessment – Business income: Client Code Modification – Alleged shifting of losses through CCM – Mere modification of client code by broker could not establish that resultant loss was fictitious or arranged for tax purposes – Assessee not being a stock-broker could not independently undertake CCM – No material to establish that assessee instructed broker to modify client codes or that any pre-arranged understanding existed – No evidence of exchange of money, cash consideration, commission or other benefit – General investigation regarding misuse of CCM could not automatically be applied to assessee without assessee-specific corroborative material – Suspicion, however strong, could not take the place of evidence – Addition of Rs.1,06,40,281 deleted.[ S.28(i)]

S.56: Income from other sources – Immovable property – Redevelopment agreement – Permanent alternate accommodation allotted in lieu of surrender of tenancy rights – Redevelopment project incomplete and possession of alternate premises not handed over – Mere execution and registration of redevelopment agreement did not amount to receipt of immovable property – Assessee acquired only a contractual right to receive flat in future – Transaction supported by valuable consideration in the form of surrender of tenancy rights and could not be regarded as receipt of property without consideration – Section 56(2)(x) not applicable – Addition deleted.[ S. 56(2)(x) ]

S.56: Income from other sources – Purchase of immovable property below stamp duty value – Difference between actual consideration and stamp duty value – Assessee specifically disputed stamp duty valuation and requested reference to DVO – Property jointly purchased by assessee and his wife in specified shares – CIT(A) failed to refer valuation to DVO and confirmed entire difference in assessee’s hands merely because wife’s case had not been assessed – Entire difference could not be taxed in hands of assessee ignoring his specific ownership share – Matter restored to AO for reference to DVO and determination of taxable difference – Assessee’s appeal allowed for statistical purposes. [S. 50C(2)(x)(b)]

S.148: Reassessment – Validity of notice – Service of notice – Notice under section 148 affixed at an unrelated locked premises without establishing any connection of assessee with the premises – Departmental record itself indicated that assessee did not reside at the said address – Subsequent notices also returned with endorsement “LEFT” – Assessee objected to non-service before completion of assessment – Deemed service under section 292BB not applicable – Reassessment proceedings without valid service of jurisdictional notice under section 148 were invalid and assessment was quashed – Additions under sections 69C and 68 consequently deleted. [S. 68, 69C, 131, 144, 147, 282, 292BB, Rule 127.]

S. 69C: Unexplained expenditure -Unexplained expenditure – Bogus purchases – Sales accepted and books of account not rejected under section 145(3) –Furnished books of account, purchase invoices, payment details through banking channels and other supporting evidence – Addition based merely on non-response of suppliers to notices under section 133(6) and cancellation of GST registrations – Once corresponding sales were accepted, purchases could not be disbelieved or disallowed in entirety – Finding of Tribunal based on appreciation of evidence was a finding of fact – No substantial question of law arose – Revenue’s appeal dismissed. [S. 69A, 69C, 115BBE, 133(6), 145(3), 260A.]