Category Archives: Income Tax Judgments

Not mandatory to set off business loss against capital gains as per sec. 71 : ITAT

By | December 4, 2018

IN THE ITAT CHANDIGARH BENCH ‘A’ Ajay Kumar Singhania v. Deputy Commissioner of Income Tax, CPC, Bangalore SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER IT APPEAL NO. 1650 (CHD) OF 2017 [ASSESSMENT YEAR 2016-17] OCTOBER  4, 2018 Navneet Sehgal, CA for the Appellant. Smt. Chanderkanta, Sr. DR for the Respondent. ORDER Sanjay Garg, Judicial Member – The… Read More »

Prosecution u/s sec. 276CC of Income Tax even if no tax payable under Return : HC

By | November 16, 2018

The offence under Section 276 CC of IT Act deals with failure to comply with the obligation under Sections 139 (1) or 142(1) or 148 of IT Act. Disobedience of each said provision of law itself constitutes a distinct offence. The offence under Section 276 CC, prima facie, stood constituted upon failure on the part… Read More »

Cash Purchases disallowed because banking facilities were available : BOMBAY HC

By | November 16, 2018

Income tax discourages payment of money in cash and beyond a specified limit. That is to encourage cheque transactions and banking operations. It is in these circumstances that the Assessing Officer found that out of the total consideration of Rs. 39,00,960/-, a substantial sum has been paid in cash even though banking facilities are available… Read More »

No Income Tax Exemption for PF interest on accumulated balance after retirement : ITAT

By | October 31, 2018

e are of the considered opinion that the withdrawal to the extent of the accumulated balance (viz., contributions plus interest) up to the retirement of the assessee’s i.e., 1/4/2002 of Rs.37,93,888/- is eligible for exemption u/s 10(12) of the Act . However in respect of the accrued interest of Rs. 44,07,195/-from 1/4/2002 to 11/4/2011 on the… Read More »

20% demand can’t be directed to pay during pendency of stay application: Bombay HC

By | October 28, 2018

If that demand is under dispute and is subject to the appellate proceedings, then, the right of appeal vested in the petitioner/assessee by virtue of the Statute should not be rendered illusory and nugatory. That right can very well be defeated by such communication from the Revenue/Department as is impugned before us. That would mean… Read More »

CBDT circular are binding on revenue: HC

By | October 28, 2018

HIGH COURT OF BOMBAY Principal Commissioner of Income-tax, Mumbai v. Nawany Construction Co. (P.) Ltd. S.C. DHARMADHIKARI AND B.P. COLABAWALLA, JJ. IT APPEAL NO. 1142 OF 2015 SEPTEMBER  10, 2018 Arvind Pinto for the Appellant. Sameer Dalal and Ms. Namrata Kasale for the Respondent. JUDGMENT 1. When this appeal was called out, Mr. Arvind Pinto, appearing on behalf of the Revenue in support of… Read More »

Sec. 54 deduction allowable if new house purchased within 1 year prior to date of agreement to sell: ITAT

By | October 16, 2018

IN THE ITAT KOLKATA BENCH ‘B’ Gautam Jhunjhunwala v. Income Tax Officer Ward-25(4), Kolkata A.T. VARKEY, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER IT APPEAL NO. 1356 (KOL) OF 2017 [ASSESSMENT YEAR 2012-13] SEPTEMBER  7, 2018 P.R. Kothari, FCA for the Appellant. Rabin Choudhury, Addl. CIT Sr. DR for the Respondent. ORDER A.T. Varkey, Judicial Member – This appeal… Read More »

No TDS on Internet connectivity Charges Paid for dedicated lease line : ITAT

By | October 7, 2018

The lease line charges were paid by the assessee to the internet service provider for faster internet access on dedicated lease line and as such the said payment had been made for use of telecommunication services / connectivity for transmission of voice / data facility provided by the vendors and not for use of any… Read More »

Extend tax audit due date for AY 2018-19 & waive off Sec. 234A interest : HC

By | October 6, 2018

HIGH COURT OF RAJASTHAN Rajasthan Tax Consultants Association v. Union of India MOHAMMAD RAFIQ AND GOVERDHAN BARDHAR, JJ. D.B. CIVIL WRIT (P.I.L) PETITION NO. 21774 OF 2018 OCTOBER  1, 2018 Siddharth Ranka, M.I. Iqbal and Saurabh Harsh for the Petitioner. R.D. Rastogi and Chandra Shekhar for the Respondent. ORDER   1. This public interest litigation has been filed by the Rajasthan Tax Consultants Association, Jaipur inter… Read More »

Interest received U/s.28 of Land Acquisition Act not taxable : ITAT

By | October 5, 2018

In case the interest is received under section 28 of the Land Acquisition Act, then same is not taxable in the hands of the assessee and in case, the interest is received under section 34 of the Land Acquisition Act, the same is taxable in the hands of the assessee. IN THE ITAT PUNE BENCH… Read More »

Occasion not necessary to receive gifts , Sec 68 addition deleted by ITAT

By | October 3, 2018

  sub-sections 56(2)(v), 56(2)(vi) & 56(2)(vii) shall not be applicable if any sum is received from any relative ( as defined in explanation (e) to section 56). There is no mention about the occasion to be a necessary condition for receiving any sum from any relative. In the instant case, the alleged gifts of Rs.50,000/-,… Read More »

Sec. 89 Income Tax relief allowed for arrears of perquisites : ITAT

By | October 3, 2018

IN THE ITAT AGRA BENCH (SMC) Rajesh Kumar v. ACIT 1(1)(1), Agra A.D. JAIN, JUDICIAL MEMBER IT APPEAL NO. 198 (AGRA) OF 2018 [ASSESSMENT YEAR 2014-15] JULY  16, 2018 Ajay Kumar Sharma, AR for the Appellant. Waseem Arshad, Sr. DR for the Respondent. ORDER   1. This is assessee’s appeal for A.Y. 2014-15 against the CIT (A)’s action of… Read More »

No penalty for concealment if property sold wasn’t residential and Sec 54 deduction disallowed : HC

By | September 22, 2018

An appeal lies under Section 260A of the 1961 Act, only when there is a substantial question of law. We find that there is no question of law involved in this appeal much less any substantial question of law. The learned Tribunal, which is the highest fact finding body, has found on facts that the… Read More »

No Tax on compensation/damage for settlement of dispute as is capital receipt : ITAT

By | September 17, 2018

In terms of the settlement deed assessee withdrew the criminal complaint filed by him and in lieu thereof received compensation of Rs. 6,77,94,580/-. Thus, as could be seen, the compensation received by the assessee was not for his professional activities but for settlement of dispute between him and some other7 party resulting in filing of… Read More »

Sec. 54 deduction available for new residential house including Land Cost : HC

By | September 17, 2018

Section 54(1) of the said Act is specific and clear. It is the cost of the new residential house and not just the cost of construction of the new residential house, which is to be adjusted. The cost of the new residential house would necessarily include the cost of the land, the cost of materials… Read More »

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

By | September 17, 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 »

Date of allotment of property is relevant for Capital Gain and not date of registration of conveyance deed. : ITAT

By | September 12, 2018

In order to determine taxability of capital gain arising from the sale of property, it is the date of allotment of property which is relevant for the purpose of computing holding period and not the date of registration of conveyance deed. The provisions of the Act nowhere states that the option of selecting self occupied… Read More »

Re-assessment notice invalid as not sanctioned by proper authority : HC

By | September 12, 2018

It is undisputed position before us that in terms of Section 151(2) of the Act, the sanctioning/ permission to issue notice under Section 148 of the Act has to be issued by the Additional Commissioner of Income Tax. We find that the Assessing Officer had not sought the approval of the Designated Officer but of… Read More »

No TDS default if TDS deducted as per certificate issued under Sec. 197 : ITAT

By | September 11, 2018

The rates prescribed in the certificate issued u/s. 197 of the Act, the deductor or the person responsible for paying has to apply the rates as per that certificate as provided u/s. 197 clause (2) of the Act. IN THE ITAT LUCKNOW BENCH ‘A’ Kribhco Shyam Fertilizers Ltd. v. Income-tax Officer, (TDS) Bareilly T.S. KAPOOR,… Read More »

AO couldn’t change method of accounting which was adopted consistently : ITAT

By | September 8, 2018

ld. A.O was not justified in applying the percentage completion method on the assessee merely on the basis that it was followed by the developer JSM DPL and arbitrarily making addition to the income ignored the fact that project completion method/completed contract method of accounting has been consistently adopted by the assessee and even have… Read More »

Tax Exemption available if Conversion of agricultural land after date of agreement to sell : ITAT

By | September 4, 2018

IN THE ITAT DELHI BENCH ‘SMC’ Kranti Devi v. Income-tax Officer-1(2), Rampur SMT. DIVA SINGH, JUDICIAL MEMBER IT APPEAL NO. 2132 (DELHI) OF 2016 [ASSESSMENT YEAR 2009-10] JUNE  26, 2018 K. Sampat and V. Raja Kumar, Advs. for the Appellant. Ms. Ashima Neb, Sr. DR for the Respondent. ORDER   1. The present appeal has been filed by the assessee, assailing… Read More »

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

By | September 2, 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 »

No Expenses disallowance for non-deduction of TDS if bills not received :GUJARAT HC

By | August 31, 2018

No TDS was deducted on expenses provisions as the same was contingent liability and the bills were not issued which were issued subsequently and on that the TDS was deducted as and when the final bills were received. HIGH COURT OF GUJARAT Principal Commissioner of Income-tax-4, Ahmedabad v. Sanghi Infrastructure Ltd. M.R. SHAH AND A.Y. KOGJE, JJ.… Read More »

Reassessment invalid if not proved that advance received was undisclosed income : ITAT

By | August 27, 2018

mere fact that the assessee had received this advance does not imply, or even suggest, that it constitutes an income which has escaped assessment. IN THE ITAT DELHI BENCH ‘A’ Anil Laul v. Income-tax Officer, Ward 38 (1), New Delhi PRAMOD KUMAR, ACCOUNTANT MEMBER AND SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER IT APPEAL NO. 566 (DELHI) OF 2011… Read More »

Sale of property not taxable in hands of HUF if it was sold in individual capacity : HC

By | August 24, 2018

the assessing officer made in the impugned addition because in the sale deed appellant was shown as a seller in his individual capacity, PAN number used in the sale deed was that of the individual, sale proceeds were deposited into the appellant’s bank account held in individual capacity In case the property was belonging to… Read More »

change in method of valuation of stock is allowed for computing Actual Income/loss :HC

By | August 22, 2018

HIGH COURT OF CALCUTTA United Bank of India v. Commissioner of Income Tax, W.B.-IV, Calcutta I.P MUKERJI AND AMRITA SINHA, JJ. ITR NOS. 19 OF 1999 & 7 OF 2000 JUNE  27, 2018 Abhratosh Majumdar, Sr. Adv., Avra Majumdar, and Amiya Kanti Bandyopadhyay, Advs. for the Petitioner. Md. Nizamuuddin, R.N. Bandyopadhyay, and Aniket Mitra, Advs. for the Respondent. JUDGMENT ITR No. 7 of 2000… Read More »

Specific corpus donation not taxable even if trust wasn’t registered u/s 12A : ITAT

By | August 22, 2018

The amount of Rs. 2,30,00,000/- was received by the assessee trust from Bank of India towards corpus fund. The said amount was specifically directed to be kept as a tied-up fund and only interest earned from the same was to be utilised for the furtherance of the objects of the trust corpus donations being in… Read More »

No indexation benefit on sale of tenancy rights acquired in inherited property: Bombay HC

By | August 21, 2018

HIGH COURT OF BOMBAY Dharmakumar C. Kapadia v. Assistant Commissioner of Income Tax 19(1) M.S. SANKLECHA AND SANDEEP K. SHINDE, JJ. IT APPEAL NOS. 239 & 241 OF 2016 JUNE  18, 2018 Nitesh Joshi and A.K. Jasani for the Appellant. A.R. Malhotra and N.A. Kazi for the Respondent. JUDGMENT 1. These two Appeals under Section 260-A of the Income-tax Act, 1961 (the Act), challenge the… Read More »

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 »

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 »

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 »