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. 260A : Appeal – High Court – Advocate -Objection taken to SMS from Dept Advocate that what Court is “pressurising me to do is both wrong and unethical. No Advocate of any worth would stoop so low. Sorry I am not able to comply with this rather unusual demand”. The SMS is contrary to the statement made by the learned Additional Solicitor General. The SMS either stems from not understanding our view or it is a made up indignation so as to accuse of us of pressurizing him to do an activity not expected of an Advocate. It appears to be in the second category as the SMS appears to give a completely different twist to the facts as stated to him by Associate. Copy of order sent to CBDT Chairman.

PCIT v. Starfles Sealing India Pvt. Ltd. ( No. 2) (Bom)(HC), www.itatonline.org

S. 254(2):Appellate Tribunal-Rectification of mistake apparent from the record –If there is no discussion whatsoever by the Tribunal of the various case laws detailed in the submissions filed by the assessee, the order is non-speaking and has to be recalled. The Tribunal should take into account the material and case laws relied upon by the assessee during the hearing.

Amore Kewels Private Ltd. v. DCIT ( Bom)(HC), www.itatonline.org

S. 153A : Assessment – Search- When search operations are conducted u/s 132, the obligation of the assessee to file any return remains suspended till such time that a notice is issued for such purpose u/s 153A(1)(a). If the return is filed within the reasonable time permitted by such notice u/s 153A(1)(a), the return is deemed to have been filed within the time permitted u/s 139 (1)/ 139(3) and loss can be carried forward .[ S.72, 80,139(1) , 139(3)]

Shrikant Mohta v. CIT ( Cal)(HC), www.itatonline.org

S.145:Method of accounting – Real estate construction contracts –Consistency method of accounting- Completed contract- Percentage completion- Accounting Standards AS-7 and AS-9- AO was not justified in applying the percentage completion method on the assessee merely on the basis that it was followed by the developer JSM DPL and arbitrarily making addition to the income ignored the fact that project completion method/ completed contract method of accounting has been consistently adopted by the assessee . [ S. 5,43C]

Ashok Hi – Tech Builders Pvt. Ltd. v. DCIT( Indore)(Trib), www.itatonline.org

S.145:Method of accounting – Real estate construction contracts –Consistency method of accounting- Completed contract- Percentage completion- Accounting Standards AS-7 and AS-9- AO was not justified in applying the percentage completion method on the assessee merely on the basis that it was followed by the developer JSM DPL and arbitrarily making addition to the income ignored the fact that project completion method/ completed contract method of accounting has been consistently adopted by the assessee . [ S. 5,43C]

Ashok Hi – Tech Builders Pvt. Ltd. v. DCIT( Indore)(Trib), www.itatonline.org

S. 9(1)(i):Income deemed to accrue or arise in India – Business connection -The duration of 12 months specified to constitute a PE is activity specific qua the site, construction, assembly or installation project. Preparatory work for tendering of contract cannot be included in the period. The activity qua the project comes to an end when the work gets completed and the responsibility of the contractor with respect to that activity comes to end. Onus is heavily upon the revenue to establish that that assessee’s activity had crossed the threshold period of 12 months- Accordingly no income of the assessee on the contract executed by assessee in India can be held to be taxable in terms of Article 7- DTAA-India –Cyprus [ Art .5,7 ]

Bellsea Ltd. V. ADIT ( Delhi)(Trib),www.itatonline.org

S. 2(22)(e): Deemed dividend- Both the registered and beneficial shareholders are two individuals and not the assessee-company- Addition cannot be made as deemed dividend-.The argument of the Dept, based on Gopal and Sons (HUF) v CIT ( 2017) 399 ITR 1(SC) that even though the assessee-recipient of money is neither the registered nor the beneficial shareholder of the payer company, the money should be assessed as “deemed dividend” is not correct .

DCIT v. Gilbarco veeder Root India Pvt. Ltd. ( Mum)(Trib),www.itatonline.org

S. 194I : Deduction at source – Rent -Annual rent paid under lease deed is rent – liable to deduct tax at source on the payment of lease rent to NOIDA /Greater NOIDA .[ S.10(20), (10(20A)]

New Okhla Industrial Development Authority (NOIDA) (No.2) v. CCIT ( 2018) 406 ITR 209/ 168 DTR 145/ 257 Taxman 3 / 303 CTR 553 (SC) CIT v. HDFC Ltd ( 2018) 406 ITR 209/168 DTR 145/ 303 CTR 553 ( SC) CIT v. Rajesh Projects ( India ) (P) Ltd ( 2018) 406 ITR 209/ 168 DTR 145 / 257 Taxman 3/ 303 CTR 553 ( SC) Greater Noida Industrial Development Authority v. ACIT ( 2018)406 ITR 209/ 168 DTR 145 / 303 CTR 553 ( SC) ITO v. United Bank of India ( 2018) 406 ITR 209/ 168 DTR 145 / 303 CTR 553 ( SC) Editorial: Affirmed Rajesh Projects ( India) (P) Ltd v. CIT ( 2017)392 ITR 483/ 148 DTR 33/ 293 CTR 121 ( Delhi ) (HC)

S. 10(20): Local authority – New Okhla Industrial Development Authority (NOIDA) is not local authority – Hence is not exempted from payment of income-tax under S. 10(20) and S.10(20A) . Followed , New Okhla Industrial Development Authority (NOIDA) v. CCIT ( 2018) 95 taxmann.com 58/ 303 CTR 448 / 168 DTR 48 (SC)

New Okhla Industrial Development Authority (NOIDA) (No.2) v. CCIT ( 2018) 406 ITR 209/ 168 DTR 145/ 257 Taxman 3/ 303 CTR 553 (SC) CIT v. HDFC Ltd ( 2018)406 ITR 209/ 168 DTR 145/ 303 CTR 553 ( SC) CIT v. Rajesh Projects ( India ) (P) Ltd ( 2018) 406 ITR 209/ 168 DTR 145/ 257 Taxman 3/303 CTR 553 ( SC) Greater Noida Industrial Development Authority v. ACIT ( 2018) 406 ITR 209/ 168 DTR 145 / 303 CTR 553 ( SC) ITO v. United Bank of India ( 2018) 406 ITR 209/ 168 DTR 145 / 303 CTR 553( SC)

S. 194A : Deduction at source – Interest other than interest on securities- NOIDA and Greater NOIDA are covered by the notification No .S.O. 3489 dt 22nd oct, 1970 -Interest received by them is exempt [ S.194A(3) (iii) (f) ]

New Okhla Industrial Development Authority (NOIDA) (No.2) v. CCIT ( 2018) 406 ITR 209/ 168 DTR 145/ 257 Taxman 3 / 303 CTR 553 (SC) CIT v. HDFC Ltd ( 2018) 406 ITR 209/ 168 DTR 145/ 303 CTR 553 ( SC) CIT v. Rajesh Projects ( India ) (P) Ltd ( 2018) 406 ITR 209/ 168 DTR 145 / 257 Taxman 3/ 303 CTR 553 ( SC) Greater Noida Industrial Development Authority v. ACIT ( 2018) 406 ITR 209/ 168 DTR 145/ 303 CTR 553 ( SC) ITO v. United Bank of India ( 2018) 406 ITR 209/ 168 DTR 145/ 303 CTR 553 ( SC) Editorial: Affirmed Rajesh Projects ( India) (P) Ltd v. CIT ( 2017)392 ITR 483/ 148 DTR 33/ 293 CTR 121 ( Delhi ) (HC)