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. 68: Cash credits- Share premium-The AO cannot assess the share premium as income on the ground that it is “excessive”. The share premium worked out in the Valuation Certificate is the minimum amount that can be collected by the assessee under RBI regulations- There is no bar on collecting higher amount as share premium-There are several factors that are taken into consideration while issuing the equity shares to shareholders/investors, such as Venture capital funds and Private Equity funds- The premium is determined between the parties on the basis of commercial considerations and cannot be questioned by the tax authorities-The AO is not entitled to sit on the arm chair of a businessman and regulate the manner of conducting business .

DCIT v. Varsity Education Management Pvt. Ltd. (Mum)(Trib)www.itatonline.org

S. 139 : Return of income – Extension of due date- Levy of interest- CBDT is directed to consider the representation of the association and take decision on extension of date by another 15 days – Extension of due date for the purpose of Explanation 1 to S. 234A for waiver of interest and decide the same by passing speaking order preferable before 10 th October , 2018 .[ S. 119, 139(1), 234A ]

Rajasthan Tax Consultants Association v .UOI ( 2018) 170 DTR 273/ 304 CTR 985 / 259 Taxman 94( Raj)(HC)

S. 251 : Appeal – Commissioner (Appeals) – Powers –Enhancement- Notional trading loss-Set –off against income under different head –Enhancement on the basis of annual report and statement enclosed to return cannot be considered as new source of income – Disallowance of notional trading loss by valuing shares at lesser amount without any basis and also set-off said loss against income under different head- Enhancement and disallowance is held to be justified . [ 73 ]

Fincity Investments (P.) Ltd. v. ACIT (2018) 172 ITD 240 / 196 TTJ 755(Hyd) (Trib.) Veeyes Investments ( P) Ltd v. ACIT ( 2018) 172 ITD 218/( 2019) 197 TTJ 261 /175 DTR 109(Hyd) (Trib)

S. 197 : Deduction at source – Certificate for lower rate –When tax was deducted on the basis of certificate issued by the AO ie on handling and transport charges under S.194C and on, ware housing charges under S.194I, the ITO (TDS) was unjustified in holding assessee in default for short deduction of tax on grounds that assessee was liable to deduct TDS on entire amount under S.194I.[ s.194C, 194I, 201 ]

Kribhco Shyam Fertilizers Ltd. v. ITO (TDS) (2018) 172 ITD 319 (Luck) (Trib.)

S. 145 : Method of accounting –Project completion method-Land owner-Project completion method consistently followed by the assessee cannot be rejected on the ground that the percentage completion method is followed by its developer . [ AS.7 ]

Ashoka Hi-Tech Builders (P.) Ltd. v. DCIT (2018) 172 ITD 231 / 172 DTR 225/ 196 TTJ 196(Indore) (Trib.)

S. 153A : Assessment – Search- Set -off of brought forward loss- No incriminating material was found in course of search relating to those expenses, claim raised by assessee was to be allowed. [ S.132 ]

HBN Dairies & Allied Ltd. v. ACIT (2018) 172 ITD 43 / 170 DTR 273/ 195 TTJ 969 ( TM ) (Delhi) (Trib.)

S. 124 : Jurisdiction of Assessing Officer – Reassessment – Survey-Notice was issued by Joint Commissioner – Objection was not raised within time provided under section 124(3)(b) from date of issuance of said notice, jurisdiction of Joint Commissioner stood confirmed- Since Assessing Officer had completed reassessment with presumption that assessee did not have registration under section 12AA, however, fact remained that assessee was granted registration under section 12AA, issue in assessment orders was to be re-adjudicated afresh after considering registration granted to assessee under section 12AA .[ S.12AA, 120 , 148 ]

Karandhai Tamil Sangam v. JCIT (2018) 172 ITD 272 (Chennai) (Trib.)

S. 115JAA : Book profit – Deemed income – Tax credit – Amount of MAT tax credit available from earlier year, inclusive of surcharge and education cess etc., should be reduced from amount of tax determined on total income of current year after adding surcharge and education cess, etc. [ S. 234B, 234C ]

Consolidated Securities Ltd. v. ACIT (2018) 172 ITD 163 (Delhi) (Trib.)

S.115BBE: Tax on income referred in section 69-Survey -Surrender of excess stock – Prevailing price of gold had fallen as on 31-3-2013- Unexplained investments – Loss is allowed to be set off against income disclosed in the course of survey -Provision is applicable with effect from 1-4-2017 which h is prospective and not prior to that -Remanded for verification whether entire excess stock found in the course of survey remained unsold as on 31-03 -2103 .[ S. 69 , 133A ]

ACIT v. Satish Kumar Agarwal. (2018) 172 ITD 143 (Jaipur) (Trib.)

S. 72 : Carry forward and set off of business losses -Business loss incurred in earlier year could not be set off against income under head income from other sources during relevant year- However, current year’s operational expenditure is to be allowed as set-off as per the provisions of the Act . [ S. 37(1), 56, 70, 71 ]

GVK Airport Developers Ltd. v. ITO (2018) 172 ITD 109/195 TTJ 246 / 66 ITR 9 ( SN) / 169 DTR 209 (Hyd) (Trib.)