Category Archives: Income Tax Judgments

Interest on FDR can not be capitalised if capital asset is not setup : Bombay HC

By | August 18, 2018

HIGH COURT OF BOMBAY Shree Maheshwar Hydel Power Corporation Ltd. v. Commissioner of Income-tax M. S. SANKLECHA AND SANDEEP K. SHINDE, JJ. IT APPEAL NO. 67 OF 2016 JULY  17, 2018 Manish Kanth and Atul Jasani for the Appellant. ORDER 1. This Appeal under Section 260-A of the Income Tax Act, 1961 (the Act), challenges the order dated 18.3.2015 passed by… Read More »

No Income tax on sale of agriculture land just because it is to be used for industrial purpose by purchaser : GUJARAT HC

By | August 16, 2018

HIGH COURT OF GUJARAT Principal Commissioner of Income Tax, Rajkot-1 v. Heenaben Bhadresh Mehta M.R. SHAH AND A Y. KOGJE, JJ. R/TAX APPEAL NO. 672 OF 2018 JUNE  26, 2018 Mrs. Mauna M Bhatt for the Petitioner. JUDGMENT M.R. Shah, J. – Feeling aggrieved and dissatisfied with the impugned judgment and order dated 06.12.2017 passed by the learned Income… Read More »

Unsecured loan/ Gifts to be added in Income if paying capacity of giver is not proved : HC

By | August 8, 2018

when the assessee failed to prove the capacity of the concerned persons who alleged to have given the unsecured loan and/or gift, it cannot be said that the learned Tribunal has committed any error in confirming the additions made by the Assessing officer and confirmed by the CIT (Appeals) of Rs.19,92,730/- as unsecured cash credit.… Read More »

ITR is invalid if no application made for condonation of delay for rectifying errors : GUJARAT HC

By | August 6, 2018

The assessee had not furnished the audit report previously. The assessee’s return was required to be accompanied by the report of the audit as referred to in section 44AB of the Act. This was clearly not done. The Assessing Officer was within his rights to raise this defect in the return and seek its rectification.… Read More »

CIT(A) could pass order on issues which weren’t raised earlier in Appeal : HC

By | August 6, 2018

The purpose and object of the orders passed under the Act is to ensure that the Act is properly implemented and the Assessee is not burdened with tax which under the law, it is not obliged to pay. Thus, the finding in the impugned order dated 2nd September, 2004 in the peculiar facts of this… Read More »

Exp. incurred on education of director’s son not allowed as Business Expense : BOMBAY HC

By | August 2, 2018

Exp. incurred on education of director’s son not allowed as Business Expense In the case in hand, Appellants-Assessee is a company manufacturing copper foils. Son of one of the directors was sent to USA for completing course in Business Administration which was ‘general’ in nature and had no direct nexus with the business activities of… Read More »

Expenses incurred on abandoned project was revenue expenses as no new Asset is created : MADRAS HC

By | August 1, 2018

The abandoned project was not a new one and it was a decision taken by the Government after about 12 years after the petitioner was invited to take over the project, which was already in existence, as they were an expert in the same line of business. Therefore, on facts, we find that the CIT… Read More »

Penalty imposed is valid for obtaining & repaying cash loans exceeding Rs. 20000 : MADRAS HC

By | August 1, 2018

In course of inspection of the books of A. Kannan, it was found that the appellant assessee had repaid loan of Rs. 20,00,000/- in cash to A. Kannan on various dates. Held Statutory provisions which prohibit acceptance of repayment of loans in cash are binding on all Income Tax payees and breach thereof attracts the… Read More »

Revised Income Tax Return filed after issuance of scrutiny notice is valid: Mumbai ITAT

By | July 31, 2018

Assessee filed the revised return of income after issuance of notice under section 143(2) of the Act, the Assessing Officer held that the said revised return of income filed by the assessee claiming deduction under section 54 of the Act being invalid is not acceptable Held There is no bar/restriction in the provisions of section… Read More »

Notice in name of deceased is invalid , No time limit for legal heirs to intimate death of assessee to Income Tax Department : MADRAS HC

By | July 26, 2018

Can the Income tax Department issue Notice in the name of dead Person ? Video Tutorial by CA Satbir Singh (Voice in Hindi , Slides in English)  explaining why Notice in name of deceased is invalid Revenue does not dispute the factum of death of the said Mr.S.Veerappan on 26.1.2010, as evidenced from the death certificate,… Read More »

Allow filing of ITR without furnishing Aadhaar No : Delhi High Court Judgment

By | July 25, 2018

IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Order: July 24, 2018 + W.P.(C) 7444/2018, C.M. APPL. No. 28499/2018 SHREYASEN, & ANR. ….. Petitioner Through: Ms. Tripti Poddar, Advocate versus UNION OF INDIA & ORS. ….. Respondent Through: Ms. Amrita Prakash, CGSC with Mr. Harishankar Sharma, Advocate for respondent No.1 Mr. Ruchir… Read More »

No reassessment because assessee failed to disclose bank a/c if it was submitted during assessment : Bombay High Court

By | July 24, 2018

HIGH COURT OF BOMBAY Akshar Developers v. Assistant Commissioner of Income-tax, Central Circle-3, Thane M.S. SANKLECHA AND SANDEEP K. SHINDE, JJ. WRIT PETITION NO. 11441 OF 2017 JUNE  7, 2018 Ms. Ritika Agarwal, and Salman Balbale, Adv. for the Petitioner. Sham Walve, Adv. for the Respondent. JUDGMENT 1. Ms. Agarwal, Learned Counsel appearing for the petitioner seeks to amend the petition by… Read More »

No Tax on Interest awarded on enhanced compensation of compulsory acquisition of agriculture land : ITAT

By | July 21, 2018

IN THE ITAT BANGALORE BENCH ‘A’ Income Tax Officer, Ward I & TPS v. Basavaraj M Kudarikannur N.V. VASUDEVAN, JUDICIAL MEMBER AND INTURI RAMA RAO, ACCOUNTANT MEMBER IT APPEAL NOS. 1747 AND 1750 (BANG.) OF 2017 [ASSESSMENT YEAR 2013-14] JUNE  1, 2018 Sandeep Goel, Addl. CIT (DR) for the Appellant. ORDER N.V. Vasudevan, Judicial Member – These are… Read More »

Depreciation can be claimed on goodwill : ITAT

By | July 20, 2018

IN THE ITAT SPECIAL BENCH, NEW DELHI CLC & Sons (P.) Ltd. v. Assistant Commissioner of Income-tax, Circle- 3 (1), New Delhi G.D. AGRAWAL, PRESIDENT R.S. SYAL, VICE-PRESIDENT AND BHAVNESH SAINI, JUDICIAL MEMBER IT APPEAL NO. 1976 DELHI OF 2006 [ASSESSMENT YEAR 2001-02] JULY  19, 2018 Rohit Jain, Adv. Deepesh Jain and Mrs. Meenal Goyal, CA’s for the Appellant. Vijay Varma for the… Read More »

Assessing officer can make preliminary inquiries before issuing notice of reassessment : GUJARAT HC

By | July 19, 2018

We see no fetters on an Assessing Officer carrying out preliminary inquiries even before issuance of notice of reopening in order to collect information on the basis of which, he may either form a belief that income chargeable to tax had escaped assessment or abandon any further inquiry, upon being satisfied that no such belief… Read More »

Penalty justified if no reasonable cause for cash loan taken in contravention of Sec. 269SS : ITAT

By | July 18, 2018

The goods were not shipped either on 01-10-2007 or on 05-10-2007, i.e., on the dates on which the impugned loans were taken. The question of payment of customs duty etc., would arise only upon shipment or receipt of goods. In fact, the assessee admits that the goods were expected to be shipped on the second… Read More »

Not necessary to submit Evidence at the time of seizure , can be submitted in Assessment : Bomaby HC

By | July 18, 2018

The entire basis of the Revenue’s case is the statement made on the date of the seizure. The voluminous evidence filed by the respondent during the course of the assessment proceedings has been completely ignored on the ground that the same was not produced when the seizure was made. There is no requirement in law… Read More »

No reassessment without considering assessee’s explanation about cash deposit :GUJARAT HC

By | July 17, 2018

The Assessing Officer formed a belief that income chargeable to tax has escaped assessment, on the ground that noticing a big mismatch between the returned income and cash transactions in the assessee’s bank accounts, queries were raised, which remained un-replied. This is contrary to the facts on record. The assessee had also furnished a copy… Read More »

Trust Registration deemed to be granted if CIT failed to dispose off sec. 12AA Application within 6 months : BANGALORE ITAT

By | July 17, 2018

Undisputedly, the trust was created on 01-04-1998 and application was moved on 25-05-1999. There was delay of 1 month 25 days for which assessee has moved an application requesting therein that the delay may be condoned and registration may be granted from the date of its inception. Though the Revenue was required to dispose off… Read More »

Sale of land taxable as capital gains even if depreciation claimed on quarters built on it : ITAT Mumbai

By | July 16, 2018

Issue  Property sold by the assessee comprises of staff quarters on which assessee had claimed depreciation. As per Assessing officer , it has to be treated as short term capital gain as per Section 50(1) of the Act It is the claim of the assessee that the property sold is land, hence it has to… Read More »

Exemption to be allowed even if not claimed in Income Tax return : HYDERABAD ITAT

By | July 13, 2018

Hon’ble Madras High Court, in the case of CIT v. Indian Express (Madurai) (P.) Ltd. [1983]140 ITR 705 at page 722, observed that unlike a law suit in civil appeals, in tax litigation, it cannot be treated as a “lis” between two rival parties but the job of the Assessing Officer is to arrive at the correct taxable income. Therefore,… Read More »

AO Jurisdiction couldn’t be questioned after expiry of 1 month from date of service of reassessment notice : Delhi HC

By | July 10, 2018

HIGH COURT OF DELHI Abhishek Jain v. Income-tax officer, Ward-55(1), New Delhi SANJIV KHANNA AND CHANDER SHEKHAR, JJ. WRIT PETITION (CIVIL) NO. 11844 OF 2016 JUNE  1, 2018 Arvind Kumar and Harsh Vardhan Sharma, Advs. for the Petitioner. Ashok K. Manchandani, Sr. Standing Counsel for the Respondent. JUDGMENT Sanjiv Khanna, J. – Abhishek Jain, as an individual, has filed the present writ petition… Read More »

No reassessment because capital gain shown by another co-owner is different : GUJARAT HC

By | July 10, 2018

The Assessing Officer examined the petitioner’s declaration of sale of immovable property and resultant loss, which she claimed. The Assessing Officer called for the purchase and sale deeds as also supporting evidence for computation of the capital gain. The assessee produced such documents and the approved valuer’s report assessing the value of property as on… Read More »

No Penalty for Cash Loan Taken from Wife by Husband : ITAT Delhi

By | July 9, 2018

Whether Cash Loan can be taken from Wife by Husband for the purchase of house ? Video Explanation by CA Satbir Singh in Hindi Facts of the case : The assessee has taken cash loan of Rs. 1 lakh and 3 lakhs on 01.04.2006 and 30.09.2006 respectively from Meena Sood for which penalty proceedings u/s… Read More »

No ‘ Anticipatory Bail ‘ against Income tax recovery notice because assessee was ‘ defaulter ’ & not an ‘ offender ’: HC

By | July 7, 2018

The petitioner in the instant case is not an ‘offender’ but a ‘defaulter’ as defined in the Second Schedule of the Income Tax Act . Rule 73 specifically provides that no order for the arrest and detention in a civil prison of a defaulter could be made unless the Tax Recovery Officer has issued and… Read More »

Son was legal representative of deceased father : Tax Recovery can be done

By | July 7, 2018

HIGH COURT OF CALCUTTA Arvind Kayan v. Union of India DEBANGSU BASAK, J. WP NO. 504 OF 2017 AUGUST  30, 2017 Koushik Chowdhury, Adv. and Ms. Sumita Shaw, Adv. for the Petitioner. Kaushik Chandra, ld. ASG, Md. Nizumuddin, Adv. and Ms. Smita Das De, Adv. for the Respondent. ORDER 1. The Court : The petitioner assails an order dated May 18, 2016 passed by… Read More »

NOIDA is not local authority , No Income Tax Exemption : Supreme Court

By | July 5, 2018

The submission of the appellant is that the appellant is covered by Clause (ii) of the Explanation i.e. “Municipality as referred to in clause (e) of Article 243P of the Constitution”. We, while discussing above provisions, have already held that the appellant is not covered by the word/expression of “Municipality” in clause (e) of Article… Read More »

Income Tax Notice served on security guard is Valid if Director appeared before AO : Delhi High Court

By | July 4, 2018

Held  Notices were sent by registered post as well as through Inspector. Service was affected at the factory office of the respondent-assessee. The case of the respondent-assessee is that notice was served on the security guard and not on the director or authorised person. Director of the respondent-assessee had thereafter appeared before the Assessing Officer… Read More »

Loss from derivative is not Speculative Loss , It is normal business loss, Set off allowed : ITAT

By | June 29, 2018

The loss incurred on account of derivatives would be deemed business loss under proviso to section 43(5) and not speculation loss and, accordingly Explanation to section 73 could not be applied. Their Lordships have further held that that the “loss (on account of sale of derivatives) would be allowed to be set off against income arising out… Read More »

No Reassessment on basis of disallowance in succeeding years ,if disclosure was made : ITAT Chandigarh

By | June 28, 2018

The AO could not have any reasons to believe that income had escaped assessment when the very basis of its belief, being the assessment order of a subsequent year, had been reversed by the ITAT before the recording of reasons by the AO. IN THE ITAT CHANDIGARH BENCH ‘A’ Deputy Commissioner of Income-tax, Chandigarh v.… Read More »

Indian subsidiary not permanent establishment under India-Saudi Arabia income tax treaty:

By | June 28, 2018

Indian subsidiary not permanent establishment under India-Saudi Arabia income tax treaty:  The Authority for Advance Rulings (AAR) found that the Indian subsidiary did not constitute a fixed place permanent establishment (PE) in India under Article 5(1) of the India-Saudi Arabia income tax treaty because the taxpayer (applicant) was not carrying on its main business from… Read More »

India-United States income tax treaty benefits apply without tax residency certificate

By | June 28, 2018

India-United States income tax treaty benefits apply without tax residency certificate:  The Ahmedabad Bench of the Income-tax Appellate Tribunal held that the taxpayer cannot be denied benefits under the India-United States income tax treaty because it has not furnished a tax residency. However, the taxpayer must satisfy eligibility for the tax treaty benefit, and it… Read More »

Reassessment Not Valid if Income Tax Notice not issued on officially notified address : CHHATTISGARH HC

By | June 22, 2018

A focused glance of the aforesaid provision would show that the maximum time limit for issuance of notice under Section 148 of the IT Act is six years from the end of relevant assessment year. In the present case, the relevant assessment year is 2009-10 and the impugned notice is said to have been issued… Read More »

Amount received for providing training services not “fees for technical services”

By | June 15, 2018

Amount received for providing training services not “fees for technical services” under treaty with the Netherlands: The Mumbai Bench of the Income-tax Appellate Tribunal held that consideration received by the taxpayer for providing training services and for access to a centralised reservation system (that is, common facilities provided to members of the taxpayer group) were… Read More »

Share premium received from foreign holding companies not income chargeable to tax

By | June 15, 2018

Share premium received from foreign holding companies not income chargeable to tax The Mumbai Bench of the Income-tax Appellate Tribunal held that a share premium received by the taxpayer from its non-resident holding company was a capital transaction and, thus, not income chargeable to tax in India. The case is: Finproject India (P.) Ltd. Read a June… Read More »

Expenses incurred to improve quality of existing product allowed : GUJARAT HC

By | June 5, 2018

what emerges is that the assessee who was engaged in manufacturing textile products, had expended the amount in question for product development undertaken by a sister concern of the assessee on its behalf. The research work did not involve development of a new product or even a new technique or technology to manufacture existing product… Read More »

Encashment of bank guarantee for non performance allowed as exp. :ITAT Delhi

By | June 5, 2018

Encashment of bank guarantee for non performance is Capital Expenditure or revenue Expenditure Video Tutorial by CA Satbir Singh (Voice in Hindi , Slides in English)  explaining  Encashment of bank guarantee for non performance allowed as exp under income tax Issue involved in this appeal is whether the bank guarantee encashed by the Delhi transport Corporation… Read More »

60% depreciation allowed on Printer being part of computer system : Madras HC

By | June 5, 2018

Paragraph 6 of the order passed by the Commissioner of Income Tax (Appeals), it has been stated that it can be inferred that the machines “computer printers” under consideration can either be called computers-printers, since a lot of independent functions done by the computers are done by these printers and they can be called an… Read More »

Taxability of gift of shares to “sister concern” under family realignment

By | June 2, 2018

Taxability of gift of shares to “sister concern” under family realignment The Delhi Bench of the Income-tax Appellate Tribunal addressed the taxability of a gift of shares to a sister concern under a family realignment “without consideration.” The case is: Gagan Infraenergy Ltd. Read a May 2018 report[PDF 423 KB] Read KPMG Report   Income Tax on… Read More »

Deduction allowed for payment to sugarcane grower in excess of administered price : HC

By | May 30, 2018

Mere use of the word “advance” in the letter of the Sugarcane Growers Association by itself would not change the character of the payment, especially when the amount paid was an ascertained liability and the assessee was following mercantile system of accounting and the payment was also done during the relevant accounting year. Furthermore, the… Read More »

No Tax on sum received by partner on retirement from firm for goodwill : HC

By | May 25, 2018

HIGH COURT OF BOMBAY Principal Commissioner of Income-tax-26 Mumbai v. R.F. Nangrani HUF M.S. SANKLECHA AND SANDEEP K. SHINDE, JJ. IT APPEAL NO. 33 OF 2016 APRIL  18, 2018 A.R. Malhotra and N.A. Kazi for the Appellant. Ajaykumar R. Singh and Ravindra Poojary for the Respondent. ORDER 1. This Appeal under Section 260-A of the Income Tax Act, 1961 (the Act) challenges the order dated… Read More »

Determining when legislative changes apply retrospectively: Analysis

By | May 25, 2018

Determining when legislative changes apply retrospectively Case Law : Calcutta Export Company (Civil Appeal No 4339-4340 of 2018) The Supreme Court of India held that when the amount of withheld tax is remitted to the government after the end of the financial year but before the due date for filing the tax return, a legislative… Read More »

Payments for marketing and distribution rights is taxable royalty : ITAT

By | May 24, 2018

Payments for marketing and distribution rights held taxable royalty The Bangalore Bench of the Income-tax Appellate Tribunal held that payments for marketing and distribution rights of an “adwords” program were taxable as income. Under the adwords program’s distribution and service agreements, the taxpayer was licensed to use certain confidential information, technical know-how, trade mark, brand… Read More »

No reassessment on basis of objections raised by audit party : Bombay HC : Dated 24.04.2018

By | May 23, 2018

 The reasons recorded in support of the impugned notice was merely on the basis of borrowed satisfaction of the audit party. This also makes the impugned notice bad. HIGH COURT OF BOMBAY Commissioner of Income-tax-14, Mumbai v. Shankardas B. Pahajani M.S. SANKLECHA AND SANDEEP K. SHINDE, JJ. IT APPEAL NO. 1432 OF 2007 APRIL  24, 2018 P.C.… Read More »

Notice not served to all legal representatives to initiate reassessment proceedings against deceased person : ITAT

By | May 21, 2018

The rights and interest of the LRs in the estate of the deceased cannot be taken away from them without giving them a proper opportunity of defending their rights and interest, in accordance with the natural justice principle of audi alterem partem, as held in ‘Umedram’ It is held that the initiation of reassessment proceedings, in the… Read More »

Gift received by individual from his HUF not exempt under Income Tax : ITAT

By | May 15, 2018

HUF does not come under specified category of relative under section 56(2)(vii), Explanation (e); therefore, money received by an individual from HUF as gift would not considered as valid gift IN THE ITAT AHMEDABAD BENCH ‘D’ Gyanchand M. Bardia v. Income Tax Officer, Ward 1(2)(2), Ahmedabad S.S. GODARA, JUDICIAL MEMBER AND AMARJIT SINGH, ACCOUNTANT MEMBER IT… Read More »

Deposits in Bank from Credit card Withdrawal : No Penalty : ITAT

By | April 26, 2018

ITAT Kolkata Sri Joy Barman Vs. Income Tax Officer ITA No. 599-600/Kol/2016 Date of Judgement/Order : 07/02/2018 FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:- The above two captioned appeals are pertaining to the same assessee for assessment years 2008-09 & 2009-10. Since these appeals belong to the same assessee, therefore these have been… Read More »

Depreciation on Road constructed on BOT basis allowed as Intangible asset : ITAT

By | April 18, 2018

IN THE ITAT HYDERABAD BENCH (SPECIAL BENCH) Assistant Commissioner of Income-tax, Circle-16(2), Hyderabad v. Progressive Constructions Ltd. D. MANMOHAN, VICE-PRESIDENT J. SUDHAKAR REDDY, ACCOUNTANT MEMBER SAKTIJIT DEY, JUDICIAL MEMBER IT APPEAL NO. 1845 (HYD.) OF 2014 C.O. NO. 36 (HYD.) OF 2015 [ASSESSMENT YEAR 2011-12] FEBRUARY  14, 2017 J.V. Prasad, Sr. Standing Counsel for the Appellant. V.… Read More »