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Attachment is decision of Pune ITAT on 80IA(4) in BT Patil matter. Most welcome relief.


http://www.mediafire.com/view/?0ogzyeeqd4m00n6

I could not paste the text as it was giving the formatting issue.

Facts of Case:
1. A grandfather formed a private discretionary trust to make his grandson its sole beneficiary upon 5th birthday of grandson. He gifts assets comprising a building, some bonds to trust. Trust has its own PAN and assessed as an AOP. (No assessment order passed by AO)

2. All these assets are to be transferred to his grandson upon his attaining 18 years of age.(Market value as on creation of trust Rs. 50 Lacs)

3. Till then father of grandson, i.e. son of founder of trust is trustee. He cannot dispose any property. He can only ensure smooth transfer of assets.

4. As on today, founder grandfather is no more and grandson has attained 18 years of age and all the assets are going to be transferred in name of grandson. (Current market Value 18 Crores)

Issue :

Whether receipt assets from such trust will be taxable u/s 56 in light of express provisions in hands of Grandson???

Text of decision being too much could not be pasted. So link to download the same is as under:
http://www.mediafire.com/file/yn2dekgml5m/BOM HC on settlement commission.pdf

http://www.mediafire.com/file/gjn2umxz0nn/Spl bench on 115JB_rain_commodities.pdf

Attachment is special bench decision on 115JB. Text being to much could not be copied and pasted here.

In the matter of CIT v Apar Industries Ltd (ITA.No. 1036 of 2009) Hon Bombay High Court has held as under :

(i) MAT credit under Section 115JAA is credit for tax paid under Section 115JA;

(ii) The sum represented by the available MAT credit would fall within the expression "tax ... already paid under any provision of this Act" in Section 140A(1);

(iii) The expression "such tax" in Section 140A(1) would mean the tax payable on the return, minus, the available MAT credit which represents the tax already paid under a provision (section 115JA) of the Act;

(iv) The expression tax paid "otherwise" in Section 234B(2) would take within its sweep any tax paid under a provision of the Act including the MAT credit which is available under Section 115JAA;

(v) The amendment to Explanation (1) of Section 234B by the Finance Act of 2006 is clarificatory;

(vi) The tax credit which is allowed to the assessee and obtained in a particular year is a part of the Minimum Alternative Tax of that year. It represents tax paid by the assessee to the exchequer. In the year in which such tax credit is sought
to be set off in terms of Section 115JA, the tax credit is available on the first day of that year and hence the tax deducted to the extent it can be set off represents tax already paid and available as credit at the beginning of the year;

(vii) The assessee cannot, therefore, be charged interest on something which he has already paid;

(viii) The provisions of Section 234A are compensatory. Since the tax due to the extent of available MAT credit stands
paid, the levy of interest under Section 234A thereon would not arise

Judgment of the Hon Delhi High Court in Commissioner of Income Tax V/s. Jindal Exports Limited 314 ITR 137 has been followed

and hence

interest u/s. 244A of the Income Tax Act, 1961 was allowable on the refundable taxes arrived after giving credit of brought forward MAT from the gross demand

Copy of judgment is as under:

http://www.mediafire.com/file/mmht1qeyzdw/BOM HC on MAT credit for 234A B C.pdf

Hon Apex Court has held as under :

    *  Once section 249(4)(a) is treated as a mandatory condition for filing an appeal before CIT (Appeals) and once that condition stood satisfied at the time of his filing an appeal to CIT (Appeals), then, there was no necessity for the assessee to once again pay the admitted tax due as a condition precedent to his filing the appeal before the Appellate Tribunal under section 253(1)(b)

in CIT v. Pawan Kumar Laddha [Civil Appeal Nos. 8914-8922 of 2003] [2010]

Copy of judgment is as under:

http://www.mediafire.com/file/ondtonflzto/Pramod_Kumar_Ladda_SC_Tax on returned income need not be paid.pdf

There has been long standing debate on the levy of the interest under section 234D for the assessment year prior to AY 2004-05.

Special bench of Hon. ITAT, in the matter of M/s Ekta Promoters Pvt Ltd 113 ITD 719 has held as under:


  interest under section 234D is chargeable from assessment year 2004-05 and it could not be charged for earlier years even though regular assessments for these years are framed after 1-6-2003 or the refund was granted for those years after the said date.

This decision has been followed consistently.



However, Hon Kerala High Court in the matter of  THE COMMISSIONER OF INCOME TAX,

Vs


M/S KERALA CHEMICALS & PROTEINS LTD., ITA.No. 1692 of 2009

has held as under:

However, we vacate the finding of the Tribunal that Section 234D is applicable only from the assessment year 2004-05 onwards. The view taken by the assessing officer that Section applies from 1.6.2003 is the correct position


Copy of all the judgments are available at following links:

http://www.mediafire.com/file/gmzmzotyzrl/234D by Kerala High Court.pdf

http://www.mediafire.com/file/mgwm0jqck22/ekta promoters.xps

http://www.mediafire.com/file/0tiym2dcv2n/MUM ITAT on 234D SBI capital market.pdf

Hon.Bombay High Court has held as under:

1.The question as to whether a reimbursement for expenses would form part of the taxable income is not res integra insofar as this Court is concerned.


2. In CIT v. Siemens Aktiongesellschaft [2009] 177 Taxman 81 (Bom.),  a Division Bench of this Court held that sharing of expenses of the research utilised by the subsidiaries as well as the head office organization would not be income which would be assessable to tax.

3. Appeal of Revenue is dismissed

Copy of judgment is available at following link:

http://www.mediafire.com/file/3n4ymmoz2km/BOM%20HC%20ON%20REIMBURSEMENT_KRUPP.pdf

Hon. Mum Tribunal has held as under :

(i) S. 153A does not authorize the making of a de novo assessment. While under the 1st Proviso, the AO is empowered to frame assessment for six years, under the 2nd Proviso, only the assessments which are pending on the date of  initiation of search abate. The effect is that complete assessments do not abate. There can be two assessments for the same assessment year. Assessments which are not pending before the AO on the date of search but are pending before an appellate authority will survive.  


(ii)  An assessment can be said to be "pending" only if the AO is statutorily required to do something further. If a s.143(2) notice has been issued, the assessment is pending. However, the assessment in respect of a return processed u/s 143(1) is not "pending" because the AO is not required to do anything further about such a return.  


(iii) The power given by the Proviso to "assess" income for six assessment years has to be confined to the undisclosed income unearthed during search and cannot include items which are disclosed in the original assessment proceedings.  (iv) On facts, s the returns had been processed u/s 143(1), the assessments were not "pending" and as no material was found during the search, the additions could not be sustained.    

We delete all the additions made and allow the appeals of the assessee.

In the result, all the appeals of the assessee are allowed.

Copy of judgement is too long to be put here link is provided as under:

http://www.mediafire.com/file/zmannmnmnz2/MUM%20ITAT%20ON%20153A.pdf

CIT Vs. KNR Patel - Feb 25 2010


Citation:


Honourable Judges: D.Y. Chandrachud and J.P. Devadhar, JJ.

Issue: Income Tax Act, 1961 -Section 263, 80(IA(4)
   
        Date Of Judgment: Feb 25 2010
   Case No: Income Tax Appeal No. 2197 of 2009
   Cases Referred: Patel Engineering V/s. DCIT [(2005) 94 ITD 411 (Mum)]

Judgment:



D.Y. Chandrachud, J.


1) Admit.

2) The appeal arises out of an order passed by the ITAT on 27th February, 2009 pertaining to assessment years 2003-04. By the order of the Tribunal, proceedings initiated by the Commissioner of Income Tax under Section 263 of the Income Tax Act, 1961 have been set aside.

3) The Revenue has formulated the following questions of law in an appeal under Section 260A:¬

a) Whether on the facts and circumstances of the case and in law, the ITAT is correct in setting aside the order passed under Section 263 by the Commissioner of Income Tax, without discussing the facts of the case and the clauses of the agreement between NHAI and the assessee?

b) Whether on the facts and circumstances of the case and in law, the ITAT is correct in ignoring relevant facts and findings in the order under appeal?

c) Whether on the facts and circumstances of the case and in law, the ITAT is correct in allowing the deduction u/s. 80IA(4) of the Income Tax Act, 1961 in view of the provisions and clarifications of Section 80IA with retrospective effect from 01-04-2000 of the Income Tax Act, 1961?

4) In the assessment proceedings relating to assessment year 2003-04, the assessee claimed the benefit of a deduction under Section 80IA. The Assessing Officer by his order dated 30th December, 2005 granted to the assessee the benefit of the deduction claimed under Section 80IA(4), save and except for certain items to which it may not be necessary to advert for the purpose of this proceeding.

On 28th March, 2008 the CIT invoked the provisions of Section 263 and was of the view that the order passed by the Assessing Officer was erroneous as it was prejudicial to the interests of the Revenue. In arriving at this view, the CIT based his order on the following foundation:

(i) The assessee is not a developer of the project since it has not invested its own funds for development and it was the National Highway Authority of India (NHAI) which had invested its funds and had been entrusted with the task of completing and maintaining the Highway infrastructure by the Union Government;

(ii) There was a lack of application of mind on the part of the Assessing Officer who had passed the assessment order, to this issue;

(iii) The assessment order was mainly based on the decision of the Mumbai Bench of the Appellate Tribunal in Patel Engineering V/s. DCIT [(2005) 94 ITD 411 (Mum)]. However, the decision in Patel Engineering was distinguishable on facts;

(iv) In any event, the retrospective amendment to Section 80IA (4) by Finance Act of 2007 would lead to the conclusion that the order passed by the Assessing Officer was erroneous.

The CIT has adverted to the provisions of Section 263 and after relying upon the judgment of the Supreme Court in CIT V/s. Shree Manjunatheshware Packing Products and Camphor1 held that the record would include the explanation to Section 80IA.

5) The order of the CIT was the subject matter of an appeal before the ITAT. The Tribunal in paragraph 3 of its order, proceeded on the basis that the revisional jurisdiction under Section 263 has been exercised by the CIT in view of the explanation inserted into Section 80IA by the Finance Act of 2007 with retrospective effect from 1st April, 2000. The Tribunal observed that but for the explanation, there is no dispute that the assessee had satisfied all the requisite conditions for claiming relief under the Section. In paragraph 5 of its judgment, the Tribunal held that the decision of the Jaipur Bench in the case of M/s. Om Metals Infraprojects Ltd. and of the Mumbai Bench in Patel Engineering (supra) arose in similar circumstances and the representative appearing on behalf of the revenue could not seriously make any distinction in the facts of the present case vis-a-vis those relied upon by the AR.

6) There is merit in the submission which has been urged on behalf of the Revenue in this proceeding that the Tribunal has ex-facie misconstrued the order of the CIT under Section 263 and has not dealt with either of the reasons which have been indicated by the CIT for exercising the jurisdiction under Section 263. As already noted earlier, the CIT, in the exercise of his jurisdiction under Section 263 observed that the assessee is not a developer within the meaning of Section 80IA; that the decision in Patel Engineering is distinguishable on facts and that in any event, the explanation to Section 80IA inserted by Finance Act of 2007 would demonstrate that the order of the Assessing Officer is erroneous. Neither of these three reasons, which form the basis of order of the CIT have been dealt with by the Tribunal. In fact, as noted earlier, the Tribunal in paragraph 3 of its decision proceeded on the basis that the revisional jurisdiction had been exercised by the CIT only on the basis of the explanation inserted into Section 80IA (13) by the Finance Act of 2007. That ex-facie is not a correct reading of the order passed by CIT. The Tribunal referred to the orders of its Jaipur Bench in Om Metals Industrial Co. Ltd. and of the Mumbai Bench in Patel Engineering Ltd. and then proceeded to observe that the DR could not seriously make any distinction in the facts of the present case vis-a-vis those relied upon by AR. That would go to suggest that an effort, as a matter of fact, was made to distinguish those cases. The Tribunal has not indicated any reasons why, if at all, it was of the view that the earlier two decisions were not distinguishable. In these circumstances, though the ultimate conclusion of the Tribunal is that the Assessing Officer had taken a possible view, we are of view that the Tribunal ought to have dealt with the reasons which had weighed with the CIT in the exercise of his jurisdiction under Section 263. Unless those reasons were found to be without any basis, a case for setting aside the exercise of jurisdiction by the CIT would not be made out.

7) Since the Tribunal has not considered the appeal in its perspective, we are of the view that it it would be appropriate and proper to remand the proceedings back to the Tribunal for a fresh decision in the light of the observations made by us earlier. In order to facilitate a fresh exercise upon remand, the impugned order dated 27th February, 2009 is set aside and the appeal pertaining to assessment year 2003-04 shall stand restored to the file of the Tribunal. In view of this, it is not necessary to render any findings on the questions of law as formulated by the Revenue. The appeal is disposed of accordingly. There shall be no order as to costs.

HELD:
Appeal is disposed off.

Advance in ordinary course of carrying on business cannot be considered as 'dividend' within meaning of section 2(22)(e) of IT Act, 1961



Once it is held that the business transactions do not fall within section 2(22)(e), one need not to go further to section 2(22)(e)(ii) to take away the basic meaning, intent and purport of the main part of section 2(22)(e)

CIT v. Creative Dyeing & Printing Pvt Ltd. ITA No. 250/2009 dated 22nd September 2009

[Therefore, the levy of interest under section 201(1A) cannot, at any rate, be construed as penalty.]

Honble Karnataka High Court in the matter of CIT v. Oriental Insurance Co Ltd [2009] 183 TAXMAN 186 {KAR} has held that

Section 201(1A) is a provision to levy interest for delayed remittance of the TDS. It is the practice of the revenue that for belated

payment of tax for any reasonable cause, the assessee is liable to pay interest at the rate of 12 per cent per annum. Similarly, 

for refunds, the revenue pays interest to the assessee. Therefore, the levy of interest under section 201(1A) cannot, at any rate, 

be construed as penalty.

Hence, it will be of immense use to rely on this case regarding the allowance of the Interest on late payment of TDS.

Thanks

There has been a special bench formed in the matter of M/s B. T patil and sons Belgaum Construction Private Limited ITA no 1408/1409/pn/03 on the issue under section 80IA(4) (Infrastructure facility). Can anyone throw some light on its progress and any further information as it has already been covered by Patel Engineering (Mum ITAT) case, Bharat Udyog Case (Mum ITAT), Om Metal Infra (Jaipur ITAT). However, explanation inserted w.r.e.f. 1st April 2000 by Finance Act 2009 has opened pandora's box.