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S. 56(2)(vii) Taxability of gifts as income: Meaning of the term "relative" in the context of a Hindu Undivided Family (HUF), and whether if the donor is the mother of the Karta of the HUF, a gift by the mother to the HUF is a gift from a "relative" so as to avoid attracting tax liability explained. All judgements on the subject considered
Subodh Gupta (HUF) vs. Pr. CIT
(2018) TaxCorp(LJ) 14192 (ITAT-DELHI) · Section. 56(2)(vii)
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Stay of demand: Pr CIT & ACIT directed to pay personal costs for filing frivolous writ petition to challenge ITAT stay order. Raising unsustainable, illegal and high pitched demands and enforcing coercive recovery and challenging stay orders shows utterly irresponsible and unfair behaviour. Thereafter, seeking adjournments by the Dept of the hearing in the ITAT adds insult to the injury. Irresponsible and uncoordinated manner of the Dept strongly deprecated
ACIT. vs. Epson India Pvt. Ltd.
(2018) TaxCorp(LJ) 14153 (HC-KARNATAKA)
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S. 12A: CIT is not justified in rejecting registration on the ground that the non-production of books and vouchers means that the genuineness of the charitable activities cannot be verified. The CIT is entitled only to examine the objects of the trust at the stage of registration and not the books of account
Vidyadayani Shiksha Samiti vs. CIT
(2018) TaxCorp(LJ) 14141 (ITAT-DELHI) · Section 12A
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S. 271(1)(c) Penalty: Under Explanation 7 to s. 271(1)(c), the onus on the assessee is only to show that the ALP is computed in accordance with the scheme of s. 92 C in good faith and due diligence. The fact that the TPO changes the method of computation of ALP does not mean it is a fit case for imposition of penalty if there is no dishonesty is found in the conduct of the assessee
Halcrow Consulting India Pvt. Ltd. vs. DCIT
(2018) TaxCorp(LJ) 14125 (ITAT-DELHI) · Section. 271(1)(c)
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S. 271(1)(c) Penalty: The law in Maharaj Garage (Bom) that it is not necessary for the penalty notice to frame a specific charge cannot be followed in the context of whether the notice should specify 'concealment' vs. 'inaccurate particulars' because the judgement does not consider SSA’s Emerald Meadows (SC) and is contrary to Samson Perinchery (Bom)
Aditya Chemicals Ltd. Vs. ITO
(2018) TaxCorp(LJ) 14124 (ITAT-DELHI) · Section. 271(1)(c)
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S. 68 Bogus share capital: Share application money cannot be treated as unexplained credit if the AO does not make any investigation on the documentary evidences filed by the assessee or ask for the production of the investors for examination u/s 131 or if adverse material is found during search to prove that share application money is bogus or an arranged affair of the assessee
ACIT vs. TRN Energy Pvt. Ltd
(2018) TaxCorp(LJ) 14121 (ITAT-DELHI) · Section 68
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S. 271(1)(c) Penalty: In the absence of any overt act, which disclosed conscious and material suppression, invocation of Explanation 7 to s. 271(1)(c) in a blanket manner could not only be injurious to the assessee but ultimately would be contrary to the purpose for which it was engrafted in the statute. It might lead to a rather peculiar situation where the assessees who might otherwise accept such determination may be forced to litigate further to escape the clutches of Explanation 7
Pr CIT vs. Verizon India Pvt. Ltd
(2018) TaxCorp(LJ) 14120 (HC-DELHI) · Section 271(1)(c)
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S. 271(1)(c): Concealment of income and furnishing of inaccurate particulars are distinct and separate charges. A nebulous notice which contains both charges is null and void ab initio (All judgements on the topic relied upon by the assessee and the department have been referred to and discussed)
Sachin Arora vs. ITO
(2018) TaxCorp(LJ) 14110 (ITAT-AGRA) · Section 271(1)(c)
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S. 14A/ 115JB: Amount disallowed u/s 14A of the Act cannot be added to arrive at book profit for purposes of section 115JB of the Act
CIT vs. Bengal Finance & Investments Pvt. Ltd
(2018) TaxCorp(LJ) 14109 (HC-BOMBAY) · Sections 14A, 115JB
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ITAT - Exemption u/s 10B - apportionment of expenditure between EOU and non EOU - the processing is done by both the units, and the processing work done by the non EOU unit, by no stretch of logic, is less than the processing work done by the EOU unit - allocation of equal profits to EOU and non EOU unit on an equal basis is quite fair and reasonable.
Income Tax Officer Versus Tonira Pharma Limited
(2018) TaxCorp(LJ) 14108 (ITAT-AHMEDABAD) · http://taxcorp.in/FileOpenDT.aspx?ID=61163&Category=ITAT&CategoryType=Zip
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ITAT - Addition on account of difference between commission receipt declared by the assessee and as per Form 26AS - assessee has miserably failed to provide a satisfactory explanation with regard to difference in commission declared by the assessee and commission receipt as per Form 26AS - additions confirmed
M/s Maru Healthcare Pvt. Ltd. Versus D.C.I.T., Central Circle-1, Jaipur
(2018) TaxCorp(LJ) 14107 (ITAT-JAIPUR) · http://taxcorp.in/FileOpenDT.aspx?ID=61159&Category=ITAT&CategoryType=Zip
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Taxability of software payments as royalty: The fact that there is a conflict of judicial opinion on whether payments for software are assessable as royalty or not does not entitle the Dept to seek a reference to the Special Bench. The Tribunal has to follow judicial discipline. Also, if a reference is made to the Special Bench it will violate the principle in Vegetable Products 188 ITR 192 (SC) that if there are two possible views, the view favourable to the assessee must be adopted
DDIT vs. Reliance Communication Ltd
(2017) TaxCorp(LJ) 14100 (ITAT-MUMBAI)
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S. 54B Exemption: The fact that the investment and document is registered is made in the name of the spouse (wife) is not a ground for disallowing exemption from capital gains u/s 54B if the funds utilized for the investment belong to the assessee. Contra view in Kalya 251 CTR 174 (Raj) not followed
Mahadev Balai vs. ITO
(2017) TaxCorp(LJ) 14099 (HC-RAJASTHAN) · Section 54B
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Sales-tax/VAT Tribunal: (i) Only legally qualified, judicially trained and experienced persons can be appointed Members. A Chartered Accountant or Commissioner cannot be appointed unless they have expertise in the subject. (ii) The Selection Committee should be headed by either a sitting Judge or a retired Judge of the High Court. (iii) It is the constitutional obligation of the State to provide proper infrastructure to the Courts, Tribunals and Judicial Officers. Financial constraint on the part of the Government is no ground to deny the adequate infrastructure to the Courts and Tribunal. (iv) For complete transparency, the Tribunal will have to ensure that its records are digitized and all orders, short or long, are uploaded on a dedicated website
Sales Tax Tribunal Bar Association vs. State of Maharashtra
(2017) TaxCorp(LJ) 14085 (HC-BOMBAY)
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S. 14A/ Rule 8D: By no stretch of imagination can s. 14A or Rule 8D be interpreted so as to mean that entire tax exempt income is to be disallowed. Also, the disallowance cannot exceed the exempt income
Pest Control India Pvt Ltd vs. DCIT
(2017) TaxCorp(LJ) 14084 (ITAT-MUMBAI) · Section 14A
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S. 32/ 43(6): The slump price paid to acquire a business has to be bifurcated between tangible and intangible assets for purposes of allowing depreciation. If the allocation is done in a systematic manner by an independent valuer and there is no fallacy, the AO is bound by the allocation. If an asset forms part of the block of assets and depreciation is allowed, it loses its identity and depreciation cannot be denied in a later year
Johnson Matthey Chemicals India Pvt. Ltd vs. DCIT
(2017) TaxCorp(LJ) 14083 (ITAT-PUNE) · Sections 32, 43(6)
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S. 32(1)(ii) Depreciation on non-compete fee: The AO should consider whether the verdict in Sharp Business System 211 TM 576 (Del) that non-compete rights are not intangible assets for depreciation can apply to a case where there is no joint venture between the person paying the non-competition fee and the recipient and both parties are outsiders. Law laid down in Nat Steel Equipments vs. CCE AIR 1988 SC 631 on the meaning of the term "similar" to be considered
DCIT vs. Caparo Engineering India P. Ltd
(2017) TaxCorp(LJ) 14082 (ITAT-DELHI) · Section 32(1)(ii)
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S. 14A/ Rule 8D: By no stretch of imagination can s. 14A or Rule 8D be interpreted so as to mean that entire tax exempt income is to be disallowed. Also, the disallowance cannot exceed the exempt income
Pest Control India Pvt. Ltd. vs. DCIT
(2017) TaxCorp(LJ) 14074 (ITAT-PUNE) · Section. 14A
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S. 32/ 43(6): The slump price paid to acquire a business has to be bifurcated between tangible and intangible assets for purposes of allowing depreciation. If the allocation is done in a systematic manner by an independent valuer and there is no fallacy, the AO is bound by the allocation. If an asset forms part of the block of assets and depreciation is allowed, it loses its identity and depreciation cannot be denied in a later year
Johnson Matthey Chemicals India Pvt. Ltd. vs. DCIT
(2017) TaxCorp(LJ) 14073 (ITAT-PUNE) · Section. 32, 43(6)
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S. 32(1)(ii) Depreciation on non-compete fee: The AO should consider whether the verdict in Sharp Business System 211 TM 576 (Del) that non-compete rights are not intangible assets for depreciation can apply to a case where there is no joint venture between the person paying the non-competition fee and the recipient and both parties are outsiders. Law laid down in Nat Steel Equipments vs. CCE AIR 1988 SC 631 on the meaning of the term "similar" to be considered
DCIT. vs. Caparo Engineering India P. Ltd.
(2017) TaxCorp(LJ) 14072 (ITAT-DELHI) · Section. 32(1)(ii)
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