This Digest of case laws is prepared by KSA Legal and AIFTP from judgements reported in BCAJ, CTR, DTR, ITD, ITR, ITR (Trib), Chamber's Journal, SOT, Taxman, TTJ, BCAJ, ACAJ, www.itatonline.org and other journals
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S. 147 : Reassessment –With in four years- Change of opinion -Speculative transaction — Business of manufacturing and trading of bullion and jewellery- Review of decision is impermissible – Business loss- Held to be not valid [ S.43(5), 148 ]

PCIT v. Shree Laxmi Jewellery Pvt. Ltd. (2020) 428 ITR 379 (Mad)(HC)

S. 147 : Reassessment –With in four years-Land – Agricultural land – Assessment of Co -owner is accepted u/s 143(3) of the Act – Reassessment is held to be not valid [ S .2 (14) ,54 , 54F , 143(3) ,148 ]

CIT v. Ramesh Shroff (2020) 428 ITR 499 (Mad) (HC)

S. 147 : Reassessment –With in four years- Capital gains – Advance received for transfer of capital asset – Reassessment is held to be not valid- Joint development agreement – The amount has not accrued – Addition could not be made even on merit . [ S. 2(47) (v), 45, 56 , 148 ]

CIT v .City Lubricants Pvt. Ltd. (2020) 428 ITR 109/ 195 DTR 457 (Mad) (HC)

S.147: Reassessment- After the expiry of four years- No failure to disclose material facts- Notice to withdrawal of exemption is held to be not valid . [ S.10(15) (iv), S.148 ,154,Art , 226 ]

State Bank of India v. Vineet Agrawal, ACIT (2020) 428 ITR 519 / 317 CTR 388/ 195 DTR 81 (Bom) )(HC)

S.147: Reassessment- After the expiry of four years- No failure to furnish material facts necessary for assessment — Purchase and sale of shares- Audit objection – Reply by the Assessing Officer to drop the proceedings- Notice is held to be not valid [ S. 56 (2) (vii) (a),148 ]

Madurai Power Corporation Private Limited v Dy. CIT (2020) 428 ITR 117 (AP) (HC)

S.147: Reassessment-After the expiry of four years- No failure to disclose material facts necessary for Assessment — Transfer of shares as gift – Change of opinion — Notice not valid [ S.45, 47, 148 ]

Court held that though the assessment order as such was silent on this aspect of gift of shares , the communications between the assessee and the Assessing Officer would clearly demonstrate that the assessee had disclosed all the primary facts regarding transfer of shares to E without any consideration and as a gift. In any case, it was a scrutiny assessment. It was clearly discernible that the basis for reopening the assessment were two letters of the Departmental authorities. While initially the contention of the assessee that such transfer of shares was a gift without consideration was accepted, subsequently the view was revised to treat the transfer of shares not as a gift and to tax the transaction on the market value of the shares. This was nothing but a change of opinion. Now it was not open to the Assessing Officer to take a second view on the same set of facts treating the earlier view as erroneous. The notice of reassessment after four years was not valid.( AY.2012-13)

S.145: Method of accounting -Mercantile system of accounting—Accrual of income -Retention money on contract —Cannot be included income .[ S.4 , 5 ]

CIT v. Voltech Projects Pvt. Ltd. (2020) 428 ITR 270 (Mad) (HC)

S. 144C : Reference to dispute resolution panel – Transfer pricing – Arm’s length price – Direction By Dispute Resolution Panel – Writ is not maintainable [ S.92C, Art. 136, 226 ]

Hyundai Motor India Ltd. v. Secretary, Income-Tax Department (2020) 428 ITR 545/ 195 DTR 26/ (2021) 276 Taxman 453 317 CTR 603 /0 (Mad) (HC)

S. 127 : Power to transfer cases – Transfer from Assessing Officer- Agreement between two higher authorities — Opportunity of hearing should be given . [ Art. 226 ]

Parappurathu Varghese Mathai and Sarakutty Mathai v. PCIT (2020) 428 ITR 79/ 193 DTR 337/ 316 CTR 833 (Bom) (HC) Olive Builders v. PCIT (2020) 428 ITR 79/ 193 DTR 337/ 316 CTR 833 (Bom) (HC)

S. 115JB : Book profit – Capital gains —Indexed cost of acquisition to be considered [ S.45 , 48 ]

Best Trading and Agencies Ltd. v. Dy. CIT (2020) 428 ITR 52 / 275 Taxman 550 ( 2021 ) 203 DTR 269/ 321 CTR 373 (Karn)(HC)