Messages

when the  two houses are sold and one house is purchased then a person is entitled to deduction u/s 54 or 54F. There was no need to think of any case law. If number of shares/securities are sold and one residential unit is purchased then the person is not entitled for exemption/deduction under these sections. Can  u argue that the said person is entitled to claim exemption/deduction under these sections against the capital gains arising from one share( not from different shares) only. This question is very simple and without any doubt the answer is yes. In my opinion no case law is required to support this view and the section itself communicate the same meaning.

K. G rukminiamma case by Karnataka High Court is reported

at 48 D. T. R. 377

four flats were held by assessee

The above mentioned case is also reported in 37 ITCL 558 and 331 ITR 211

During a survey u/s 133A IT authorities are not empowered to record a statement on oath.Therefore, it has no evidentiary value as has been held by various high courts which are reported in 300 ITR  157,263 ITR 101,308 ITR 83, 29 sot 449, 174 Taxman 466, 46 DTR 406 and 328 ITR 384.Statement recorded on oath u/s 132(4) can also be retracted if it is recorded during midnight and is not supported with any corroborative evidence as has been held in the case reported in 328 ITR 411. Therefore, it can be concluded that if the statement is not corroborated with any other documentary evidence, the same had no evidentiary value by itself.

Since physical possession is taken only in 2011, sec.53A of transfer of property act is not applied to the transaction in question. Therefore, the income is to be taxed under the head short term capital gains for which the benefit of sec. 54 is not available. Therefore, invariably taxes have to be paid.

this case law is not applicable to the present position as an amendment is carried out in the said section wherein the unregistered agreement is also covered as per the provisions of sec. 50C as on today

I have been observing the controversy in this regard. Both the situations given by the courts which are in favour of the assessee are correct. First of all, Sec 10A, 10B are brought into the statute as exemptions.From and for the A.Y. 2001-02, the benefit conferred under these sections were transformed as deductions. See, normally, all the deductions are dealt in Chapter VIA. But the legislature had forgotten to bring these sections also into chapter VIA and accordingly, they were retained in Chapter III which is meant for exemptions. There lies the problem. You see section 80AB which says that the deductions in Chapter VIA(c) should be calculated as per the provisions of the Act Which includes carry forward losses also. The essence of which is that the deduction conferred through these sections should be computed only after computing the income as per the provisions of Act which includes carry forward losses. This view has been upheld by even Apex Court in various cases i.e. 266 ITR 521 & 291 ITR 380 and 293 ITR 1 etc.etc., However, section 80AB is not covering section 10A/section 10B since these sections are not deductions under chapter VIA(c). So there was no need to calculate the income as per the provisions of the Act and accordingly, carry forward losses will not be adjusted before computing  the deductions available under these sections.

                 So far as second issue with regard to the losses of 10A units to be adjusted against the taxable income of the assessee also, the view taken by the courts appears to be correct. As narrated above, if it is an exemption, then one can argue that the loss incurred is exempted and such exempted loss cannot be set off because exempted income, if any, is not taxable. But here in the instant case, the benefit under these provisions is not exemption and a deduction as per amended provisions. Moreover, till 2001 the losses incurred by these units are not eligible to be set off or allowed to be carry forward to future years. As per the amended provisions of Sec. 10A(6)(ii) the losses incurred by these units are allowed to be set off and carry forward ( is it correct intention of the legislature or not ? please see the circular explanatory memorandum to the relevant finance act.).  Whether it is intentionally done or it escaped the attention of law makers nobody knows. Accordingly, I see no infirmity in the orders of the courts. The courts will interpret the provisions as they appear from the language. Since no other logic can be inferred from these provisions,  the courts are giving judgments in favour of the taxpayers in both the situations. I think, it is high time that the sections like Sec.10A or any other deduction like sec 10A/10B which are now in Chapter III must be lifted from there and brought into chapter VIA to neutralize the undue(?) benefit granted. Unless this change is made, the situation remains the same and it continues to looks awkward atleast for the people like U.

Have a nice time.     

         The information given in the earlier reply is very informative. However, the issue involved is not widely discussed. I think everybody was under the impression that subsection 3 of section 268A was in favour of the department. But to my understanding it is not so. Why that section has been introduced in statute. Because government is losing cases, when it tried to pursue the cases before courts even though it has not filed any further appeal on the same issue earlier. But supreme court struck down the issues stating that department had no locus standi to file appeal now when it has not filed appeal on the same issue on earlier occasions. The meaning of which is on same set of facts there cannot be two different judgements thereby equanimity will not be lost in legal matters. Everybody before the law is equal. If one assessee is benefited earlier on the same issue because of the act of government for not filing appeal, that benefit should be extended to all others on the same issue and therefore, various courts rejected the appeal on the same issue in subsequent cases.
   
       In view of the above position, the legislature in its wisdom wanted to come out of the said situation and incorporated one more section whereby  it saved "only the cases" those cases where appeal is not filed in earlier occasions because of the monetary limits prescribed by it. Which in other way that if appeal is not filed on earlier occasions not because of monetary limits but because the department thinks that there is no legal case to fight, then the Apex Courts decision cited in the question are still applicable and Courts will definitely struck down the same. Had the legislation intention is to affirm that one person cannot take the plea that the same issue was not pursued further in case of one assessee and therefore, it cannot be pursued in his case also, then there would not be any sub section (1) of Sec. 268A. Section 268A saves only the cases where department is prevented because of the monetary limits prescribed in subsection(1) of Sec. 268A. Two or three readings of the section clearly communicates this meaning.  Dont believe this. See Singhania analysis on this subject. He also supported the same. When the courts are knocking down the issues why not the assessee fight that no addition was made in case of other assessee and why should he be only bothered with the demand on the same issue against which the other person could escape tax liability. I think nobody is thinking in this line. What is the wrong in thinking in this line.     

carbon credits were not taxed in the hands of one assessee. However, the same AO, in next year taxed the same in case of other assessee and reopened the case of first assessee u/s 148. Accordingly reopened assessment was also completed in the case of first assessee bringing to tax the said carbon credits. When an appeal is filed before appellate authorities against the reopened assessment, it was argued that the AO had changed his opinion and it is not permissable u/s 147 as per the Supreme Court decision in the case of Kelvinator India. The appellate authorities have held that no tangible material has come into the possession of the AO and as argued the AO had changed his opinion which is not permissable u/s147. RElying on the decision cited, the assessment was held as bad in law and therefore, the reassessment was cancelled. Accordingly, the carbon credits were not taxed in the hands of the first mentioned person.

              Now the second mentioned person without going into merits, can take the argument that since the same carbon credits were not taxed in the hands of one assessee it cannot be taxed in his hands also. He wanted to place reliance on Sec. 268A of the IT Act which was brought into the statute only to overcome the supreme Courts decision reported in 266 ITR 99. He further wanted to support his argument with the Apex Courts decisions reported in 229 ITR 219, 229 bITR 221, 254 ITR 606, 308 ITR 161. What are the chances of the assessee to win his appeal if he takes this argument without going into merits.

can the deduction/exemption u/s 54F or 54EC can be denied on the ground that the assessee is a non resident.

The issue had not reached to that stage. However, a special bench decision is known to me. The same is reported in 318 ITR 417.

I think the head note of the case law communicate the opposite meaning. For ready reference, I am copying the conclusion of the said case law here. Please go through and arrive at right conclusion.

                "In the circumstances, while allowing the appeal, we answer the question of law by holding that the Tribunal was not justified in coming to the conclusion that the amount to be reduced under clause (iv) of Explanation 1 to Section 115JB in respect of the profits eligible for deduction under Section 80HHC has to be computed with reference to the net profits in the profit and loss account and not according to the profits of the business computed under the head of profits and gains of business or profession."

When I study the above mentioned case law, I understood it in quite opposite way. That is .......... deduction to be reduced u/s 80HHC from the book profits is to be computed as per the income computed under normal provisions i.e. computed as per the proceedure to arrive at the income under the head profits of business and profession but not the net profit as per profit and loss account. which view is correct. whether the above mentioned case law has supported the decision of Kerala High Court decision in the case of GTN textiles 248 ITR 372 or it differs from that case law. I am confused. please some one may clarify this issue.

Since long I have been thinking on this. However, I will express my opinion. Since after adjustment of losses with general reserves nothing is left out. Therefore, there is nothing to adjust in the current year. Further, MAT tax is on book profits. the losses stated were not carried forward to future years and and were absorbed against the profits earned earlier. I think this situation is not envisaged in MAT tax. or else the problem is compounded. to take into consideration of the losses how long we have to travel back in case after adjustment of depreciation loss every year there is no loss or no profit. This question really requires an answer.

if the firm is formed only for construction and its business is construction of properties and getting rent on those properties then the receipts are to be taxed under the head business income not under the head income from house property. Therefore, the remunaration and interrest is allowable.

Infact, I am very much surprised with Topman decision. I could not subscribe to the argument the expenditure not really incurred should be allowed to arrive at the profit on sale of DEPB treating that the same is notionally incurred. Ultimately, the logic appears to be taken care of . At lease till the time the Apex Court decides otherway around..