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- 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)

S. 92C : Transfer pricing – Arm’s length price –Comparable uncontrolled price method or the transactional net margin method- Question of fact- Commission – Finding of fact . [ S.37(1) , 254(1) 260A ]

Madura Coats Pvt. Ltd. v. Dy. CIT (2020) 428 ITR 273/ ( 2021 ) 199 DTR 228/ 320 CTR 543 (Mad) (HC)

S. 92C : Transfer pricing – Arm’s length price – Instruction of CBDT is binding on revenue -Instruction No .3 of 2003 ( 2003 ) ( 261 ITR 51 (St) [ S.92CA ]

PCIT v . Obulapuram Mining Company Pvt. Limited (2020) 428 ITR 322/ ( 2021 ) 199 DTR 223/ 319 CTR 700/ 278 Taxman 89 (Karn)(HC)

S. 92C : Transfer pricing – Arm’s length price – Internal transactional net margin method -Method adopted – No question of law [ S. 92 to 94B, 260A ]

PCIT v. Gulbrandsen Chemicals Pvt. Ltd. (2020) 428 ITR 407/ (2021 ) 202 CTR 249/ 321 CTR 791 (Guj)(HC)

S. 80IA :Industrial undertakings – Infrastructure development- Appellate Tribunal – Container freight station — Part of inland port — Tribunal cannot ignore decision of co-ordinate Bench- Matter remanded to the Assessing Officer to apply the decision of Tribunal [ S. 253 , 254(1)

A. S. Shipping Agencies Pvt. Ltd. v. Dy. CIT (2020) 428 ITR 38 (Mad) (HC)