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DCIT vs. Times Guaranty (ITAT Mumbai Special Bench)
 

Unabsorbed depreciation of AYs 1997-98 to 2001-02 not eligible for relief granted by amended s. 32(2) in AY 2002-03
Will this apply to speculation loss also ? [ 8 vs 4 years] 

http://What%20about%20Special%20bench%20matter%20pending%20@%20mumbai%20?%20[Morakhiya%20group%20cases]???

Madhur Shares & Stock Pvt. Ltd. v. ACIT [ITA Nos. 615/Ahd/2005 and 704/Ahd/2005] [2010] 5 taxmann.com 119 (AHD. - ITAT)
Once commission/brokerage is credited in P&L account of assessee broker and entire debit balance including principal and brokerage is found irrecoverable and is written off in books by assessee, same can be allowed as bad debt allowable u/s 36(1)(vii) - Where total debt debited in the account of the client is inclusive of brokerage then brokerage being part of the total debt having been taken into account in computing the income, would satisfy the provisions of sec. 36(2) and therefore, when assessee writes off such debt then he would be entitled for deduction u/s. 36(1)(vii)......

Special Bench judgement in Topman Exports reversed


In Topman Exports vs. ITO 318 ITR 87 (Mum)(SB)(AT) the Special Bench held that
for purposes of s. 80HHC only the "profit" on sale of DEPB entitlements (i.e.
the sale value less the face value) was required to be considered. In an appeal
by the department, this judgement has been reversed by the Bombay High Court
today, 29th June 2010.

???
Topman case wiil have a long lasting efect ?

Also refer Smt. Sadhana Nabera vs. ACIT (ITAT Mumbai)

:D

2010-TIOL-251-ITAT-MUM ***** can anybody give full text ?

Advocate, cop's son cook up tale to extort money
Vijay V Singh, TNN 25 December 2009, 01:36am ISTText Size:|Topics:police
advocate

MUMBAI: An advocate and the son of a retired police inspector were arrested for demanding Rs 35 lakh from a relative of a suspect for "releasing the  latter from police custody".

 ???
Dear Sirs,
Does this judgement of Bombay High Court mention anything about provisions of I Tax ACt so far as persons authorised thereunder is concerned ?
bhupendra shah

how can it exceed tax free income?

does it work?

why not?

Former Members cannot practise in CESTAT - No unregulated right of practice -
There was a time when a son would appear in court presided over by his father
and no questions were asked - Former members' writ petition dismissed: Delhi
High CourtFormer Members cannot practise in CESTAT - No unregulated right of practice -
There was a time when a son would appear in court presided over by his father
and no questions were asked - Former members' writ petition dismissed: Delhi
High Court



NEW DELHI, APR 17, 2009: IT is often said that the law acts ex-post facto. In
the instant case, the legislature has acted in pursuance of what is perceived as
undesirable - which is the right of a member/president/ vice-president of the
Customs Excise Service Tax Appellate Tribunal ('CESTAT') to appear, act and/or
plead on their demitting office before the very same Tribunal. The legislature
has sought to debar all such like persons, by insertion of sub-section (6) to
Section 129 of the Customs Act, 1962. The said provision was introduced by
Section 110 of the Finance Act, 2007 w.e.f. 11.05.2007.

Profile of the petitioners:

1. K.L. Rekhi joined Indian Customs and Central Excise Service, Class – I on
10.01.1957. On 29.09.1982 he assumed the charge as Member (Technical) in the
Tribunal. On 01.02.1989, he was promoted in his parent cadre as Chairman,
Central Board of Excise and Customs, which is when, he relinquished charge as
Member, CEGAT. On 31.01.1991 he superannuated as the Chairman of CBEC.

2. P.C. Jain joined service in July, 1963. On 01.05.1986 he assumed charge as
Member (Technical) in CEGAT. On 28.09.1999, when he demitted office, he was the
vice-chairman of CEGAT. In the interregnum, he had also obtained a bachelors
degree in law, in 1991, from University of Delhi.

3. V.K. Aggarwal joined service on 13.11.1967. He assumed charge as Member
(Technical) CEGAT on 02.03.1998. On 13.05.2005 he demitted office as a member
CESTAT. Unlike others, Shri. Aggarwal had won a bachelors degree in law even
before he entered service, having passed out, from Lucknow University in 1965.

4. N K Bajpai, entered service on 24.05.1960 with a bachelor's degree in law
having passed out from Allahabad University in 1956. He assumed charge as Member
(Technical) CEGAT on 01.11.1990, and on 07.03.1993, he demitted office as
Member.

A perusal of the above facts would show that except for Sh. K.L. Rekhi, the
other three petitioners, that is, P.C. Jain. V.K. Aggarwal, and N.K. Bajpai are
law graduates. On demitting office, it is stated that Sh. Rekhi had been
appearing for litigants before the Tribunal as an authorised representative of
his clients.

The High Court observed,

There was a time when a son would appear in the court presided over by his
father and no questions were asked. It is said Boswell earned most part of his
income at the Scottish Bar appearing before his father Lord Auchinleck

The legislative wisdom ideally caters to times we live in and the social mores
and norms that surround us. Alas! as is often found steps towards what the law
makers consider a desirable goal, which is wisdom that courts accord to a
legislature, are often agonisingly slow.

The petitioners are aggrieved and perhaps justifiably as they have been in
practice, since demitting office, for periods ranging from two(2) years in the
case of Sh. V.K. Aggarwal to sixteen(16) years, in the case Sh. K.L. Rekhi
before the date on which the impugned provision was brought on to the statute
book i.e. 11.05.2007.

But the validity of a statute cannot be judged only on the basis rights of an
individual when an individual's right are pitted against a greater public weal.
Individual rights have to give way to a greater public interest. And who best
knows the public interest but the legislature unless shown otherwise - while
always bearing in mind that the courts as the sentinel of the Constitution are
fully empowered to defend and protect an individual's fundamental rights, if an
act of the Parliament trenches upon inalienable right of an individual which are
in conflict with interest of the majority. The burden is heavy. There is a
presumption of constitutionality in respect of an Acts of a legislature.

A court's authority is based on the public perception especially that of the
litigants appearing before it, that the process of administration of justice is
far removed, from even the remotest possibility of bias creeping into the
decision making process.

Discrimination vis-a-vis ITAT: the purported discrimination claimed by the
petitioners on account of the fact that members of tribunals such as the Income
Tax Appellate Tribunal and the Appellate Tribunal for Foreign Exchange are not
visited with such disability, is untenable. The fact that a beginning has been
made by incorporating such like provisions in respect of some tribunals, such
as, the CESTAT, the Central Administrative Tribunal constituted under the
Administrative Tribunal Act, 1985 (see Section 11(f)) would only lead us to
conclude that the impugned provision is not discriminatory.

Unconstitutional? The submission of the counsel for the petitioners is that the
restriction contained in the impugned provision is unreasonable and not in the
interest of general public as contemplated under Article 19(6) of the
Constitution, on account of the fact that petitioners who are experts in their
respective fields would enhance public interest by making themselves available
not only to further the cause of the assessees but also that of the Revenue.
This submission misses the wood from the trees. The predominant rationale for
introduction of this provision is to strengthen the cause of administration of
justice. To remove what the legislature in its wisdom feels is a perceived class
bias. If that be so, then the restriction cannot be said to be unreasonable. It
would pass the test of Article 19(6) of the Constitution. There is no gainsaying
that the petitioners have acquired expertise in the field of law pertaining to
customs, excise and service tax. That being said the impugned provision does not
completely prohibit them from practicing their profession. The prohibition is
with respect to a forum. The petitioners' expertise can and ought to be applied
in superior forums, such as, the High Courts and also the Supreme Court.

But what about Mr. Rekhi who does not have a Law degree? The petitioner Sh. K.L.
Rekhi, is not in any manner constrained in making use of the experience gained
by him as a member of the then CEGAT like the other petitioners. If, however, he
wishes to practice as a legal practitioner, he would be required to obtain a
degree in law and then be free to appear before all such forums except the
CESTAT.

No unregulated right of practice: The contention that an advocate enrolled under
the Advocates Act, 1961 has an absolute right to practise before all Courts and
Tribunals can hardly be accepted. Such a right is no doubt conferred by Section
30 of the Advocates Act. But unfortunately for the legal profession, Section 30
has not been brought into force so far though the Act has been on the Statute
Book for the last 22 years. A person enrolled as an advocate under the Advocates
Act is not ipso facto entitled to a right of audience in all Courts unless
Section 30 of that Act is first brought into force.

So all the petitions are dismissed

case was represented by CA BHUPENDRA Shah




There exist no provision in section 56(2)(v) of IT Act to treat
loans, which may not be repaid, as income of assessee



A loan transaction has to be treated as a loan transaction only and
it should be examined in the light of provisions of section 68 and
not under provisions of section 56(2)(v).









ITAT, MUMBAI BENCHES `C'

:)
Chandrakant H. Shah



v.



ITO



ITA NO. 3966/MUM/2008



JANUARY 12, 2008



RELEVANT EXTRACTS :



** ** **
** ** **



11. We have considered the submissions made by both the parties,
material on record and orders of the authorities below. It is noted
that the assessee is an individual and aged about 50 years. The
assessee has income from salary and other sources both aggregating
to Rs. 2.62 lakhs. It is also noted that the assessee was received
salary from M/s Nav Bharat Education Society where he is working as
a senior clerk. It is also noted that he has received a sum of Rs.
92,950 as consultation charges from Nirmal Developers to whom he has
rendered consultancy services as Site Supervisor. It is also not in
dispute that 4 concerns from whom the assessee has taken the loan
are the sister/connected concerns and these are engaged in the real
estate development & construction activities. It is also not in
dispute that such loan has been utilized for purchase of residential
flat, constructed by the concern wherein such lenders have direct or
indirect interests. It is also noted that the Assessing Officer,
vide its Notice under section 142(1) dated 6-11-2006 required the
assessee to furnish the copy of the Agreement for Purchase of Flat
along with the sources thereof which was not complied with, hence,
the Assessing Officer issued another Notice on 24-1-2007. The
assessee, vide it's letter dated 13-2-2007, submitted copy of the
Agreement for purchase of flat and also stated that the possession
of the said flat was taken in the Financial Year 2006-07. It was
also stated that payment for purchase of flat was made out of loans
so received and for which confirmatory letters were also submitted.
The Assessing Officer vide its letter dated 23-5-2007 made further
enquiries in respect of the loans taken by the assessee from M/s
Nirmal Lifestyle and M/s Utkanth Trading Corporation which was
submitted by the assessee vide its Letter dated 28-6-2006. The
assessee vides its Letter dated 9-8-2007 also explained to the
Assessing Officer regarding the nature of extra payment to the
builder against the sale consideration of Flat. Thereafter, the
Assessing Officer has not issued any other notice, as is evident
from the 1st paragraph of the assessment order. Thus, the above
chronological evidences show that at no stage, the assessee was made
aware of the intention of the Assessing Officer to make the impugned
addition so that the assessee could have made legal submissions. In
our opinion, if such an opportunity should have been granted by the
Assessing Officer, then, loans to the extent of Rs. 27,70,000 would
not have been added at all under section 56(2)(v) of the Act as
income of the assessee as these were received prior to 1-9-2004 (as
evident from the loan confirmations and bank transactions details
submitted to the Assessing Officer as such provisions have been made
applicable with effect from the above mentioned date. Further to
this manner of completion of the assessment proceedings, the Ld.
Commissioner (Appeals) has also ignored the relevant contentions of
the assessee by holding that these were not raised before the
Assessing Officer, whereas he could have examined the assessment
records to verify claim of the assessee that no opportunity was
given by the Assessing Officer to make these submissions. Thus, in
our opinion, the Ld. Commissioner (Appeals) is not justified in not
deleting the addition to the extent of Rs. 27,70,000. It is also
noted that all these loans have been shown in the Balance Sheet
submitted along with the Return of income as loans and the lenders
have also confirmed the same as such. Thus, in our opinion,
apparently, it is a case of loan transactions and not a case of gift
as held by the Assessing Officer. It is also noted that loan taken
from M/s Utkanth Trading Pvt. Ltd. has been repaid on 27-3-2004,
itself i.e., before passing of the assessment order which is also a
material fact so as to rebut the presumption of the Assessing
Officer that assessee was not under any obligation to repay the
loans and this fact also proves the assessee's claim that no
opportunity was granted by the Assessing Officer to the assessee
before making such addition. We are also of the view that it can
not be a case of assessee's on accounted or undisclosed income being
brought into the hands of the assessee as loans because even
according to Revenue Authorities the assessee is not a person of
sound financial status. We also find that the Assessing Officer has
not made any enquiries from the lenders to ascertain the true nature
of the transactions and to find out as to why these sums were given
without interest. It is also noted that the Assessing Officer has
held that the assessee was not under an obligation to repay the loan
and the ld. Commissioner (Appeals) has also confirmed the addition
for this reason as well as for the reason that the assessee had no
assets/business plans to repay the loan. We are, however, unable to
find any material being brought on record by the revenue to support
these findings, hence, the orders of Revenue authorities appear to
be passed on assumptions and presumptions and, particularly, when
apparently, there exist no provision in the section 56(2)(v) to
treat loans, which may not be repaid, as income of the assessee. In
this regard, we consider it pertinent to refer to provisions of 4(1)
(b) of the erstwhile Gift Tax Act, 1958 which provided for deemed
gift in case consideration for a transfer was not paid or not
intended to be paid and also to provisions of section 4(1)(c) of
that Act which provided for deeming a gift made by the person who
was responsible for the release, discharge, surrender, forfeiture or
abandonment of any debt, contract or actionable claim or of any
interest in property by any person without bonafide reasons to the
extent of value of such release, discharge, surrender, forfeiture or
abandonment. No such kind of situations have been prescribed under
section 56(2)(v) of the Act, hence, if this view of Revenue
Authorities is accepted, then, it would amount to re-writing of
provisions of this section and which is not in the domain of
executive or judicial forum. Hence, in view of above discussion, we
are of the prima facie opinion that this addition is not correct in
law.



11.1 Having stated so, this addition also puzzles us as to what
would happen in the case of genuine loans given and taken in the
normal course of commercial practice or on account of social
considerations. To put it in other words, if a interest free loan
cannot be added under section 68, then, such loan should be added as
income of the recipient under section 56(2)(v) of the Act which also
means that there would not be any difference between capital receipt
liability and revenue liability/receipt. This type of addition also
leads to a situation of having two provision for charging one type
of income i.e., the Legislature has provided two charging Sections
i.e., Section 68 and 56(2)(v) which can not be so as in that case
the legislation would have made the provisions of 56(2)(v) either of
overriding nature by stating that "not-withstanding anything
contained in Section 68" or by providing for applicability of
provisions of Section 56(2)(v) in any other manner, in case
provisions of Section 68 could not be invoked. In this regard, we
are further of the opinion that when a specific provision exist in
law for particular thing, then, that thing is liable to be examined
there under only and if that item cannot be taxed under that
provision, then, that thing cannot be charged to tax under other
provisions of the Act. For example, if an item falls under the
head "profits and gains of business or profession" but if the same
cannot be taxed there-under for any reason, then, that cannot be
taxed under any other head. Surprisingly, in present case, it is
not that provisions of 68 were not applicable at all, hence, the
Assessing Officer invoked the provisions of section 56(2)(v). On
the contrary, the Assessing Officer has made necessary enquiries in
that regard and the Assessing Officer has not made addition under
section 68 for the reason that all the requirements of that section
i.e., identity; creditworthiness and genuineness of transactions
have been proved. Hence, in our view, a loan transaction has to be
treated as a loan transaction only and it should be examined in the
light of provisions of Section 68 and not under provisions of
Section 56(2)(v) of the Act and for this reason alone, this addition
is liable to be deleted.



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Mon Feb 9, 2009 10:23 pm


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section 56[2][v] ******* gift vs loan *** bhupendra shah
this case was represented by CA BHUPENDRA Shah There exist no provision in section 56(2)(v) of IT Act to treat loans, which may not be repaid, as income of...  CABHUPENDRASHAH
ca.bhupendra...
   10:24 pm 

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