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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) 14071 (HC-BOMBAY)
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S. 23 House Property Income: Common Area Maintenance Charges and non-occupancy charges paid by the assessee to the Society are deductible from the rent while computing the 'Annual Letting Value' u/s 22
DCIT vs. Yogen D. Sanghvi
(2017) TaxCorp(LJ) 14068 (ITAT-MUMBAI) · Sections 22, 23
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S. 147/ 292B: Sanction for issuing a reopening notice cannot be mechanical but has to be on due application of mind. Sanction accorded despite mention of non-existent section in the notice is prima facie evidence of non application of mind on the part of the sanctioning authority. S. 292B cannot cure such defect
Kalpana Shantilal Haria vs. ACIT
(2017) TaxCorp(LJ) 14067 (HC-BOMBAY) · Sections 147, 292B
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S. 80-IA(5): Only losses of the years beginning from the initial assessment year are to be brought forward for set-off against profits of the eligible unit. Losses of earlier years which are already set off against income cannot be brought forward notionally for set-off. The fiction in s. 80-IA(5) is created only for a limited purpose and cannot be extended
CIT vs. Hercules Hoists Ltd
(2017) TaxCorp(LJ) 14066 (HC-BOMBAY) · Section 80-IA(5)
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S. 54: Acquisition of new flat in an apartment under construction should be considered as a case of “Construction” and not “Purchase”. The date of commencement of construction is not relevant for purpose of s. 54. The fact that the construction may have commenced prior to the date of transfer of the old asset is irrelevant. If the construction is completed within 3 years from the date of transfer, the exemption is available
Mustansir I Tehsildar vs. ITO
(2017) TaxCorp(LJ) 14043 (ITAT-MUMBAI) · Section 54
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Coercive Tax Recovery: The AO wanted to preempt the Tribunal from dealing with the Stay application. The Act and conduct of the Revenue officials is against judicial conscience. Canons of law, justice and ethics have been broken down by the officials of the Department. An effort has been made to render the provisions of the law inoperative, debarring the assessee from availing any remedy from the higher forum
Greater Mohali Area Development Authority vs. DCIT
(2017) TaxCorp(LJ) 14042 (ITAT-CHANDIGARH)
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S. 11(1)(a) vs. 32: Even if the entire expenditure incurred for acquisition of a capital asset is treated as application of income for charitable purposes u/s 11(1)(a) of the Act, the assessee is also entitled to depreciation u/s 32. The argument that the grant of depreciation amounts to giving double benefit to the assessee is not acceptable. S. 11(6) which bars depreciation on expenditure applied for charitable purposes is prospective and applies only from AY 2015-16
CIT vs. Rajasthan And Gujarati Charitable Foundation Poona
(2017) TaxCorp(LJ) 14041 (SC) · Sections 11(1)(a), 32
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S. 2(47)(v): Immovable property can be regarded to have been transferred on the date of execution of the Development Agreement and irrevocable General Power of Attorney only if the terms indicate that complete control is given to the developer. If the entire consideration is not received by the assessee and physical possession of the property is not parted with, there is no transfer u/s 2(47)(v)
CIT vs. Dr. Arvind S. Phake
(2017) TaxCorp(LJ) 14040 (HC-BOMBAY) · Section 2(47)(v)
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Bogus LTCG from Penny stocks: The assessee has not tendered cogent evidence to explain how the shares in an unknown company worth Rs.5 had jumped to Rs.485 in no time. The fantastic sale price was not at all possible as there was no economic or financial basis to justify the price rise. the assessee had indulged in a dubious share transaction meant to account for the undisclosed income in the garb of long term capital gain. The gain has accordingly to be assessed as undisclosed credit u/s 68
Sanjay Bimalchand Jain vs. Pr CIT
(2017) TaxCorp(LJ) 14009 (HC-BOMBAY) · Section 68
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Taxability of subsidies: Supreme Court stays judgement of the Delhi High Court in CIT vs. Bhushan Steels And Strips which held that if the recipient has the flexibility of using it for any purpose and is not confined to using it for capital purposes, the subsidy is revenue in nature and is taxable as profits
Bhushan Steel vs. CIT
(2017) TaxCorp(LJ) 14000 (SC)
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Taxability of subsidies: A subsidy granted by the Govt to achieve the objects of acceleration of industrial development and generation of employment is capital in nature and not revenue. The fact that the incentives are not available unless and until commercial production has started, and that the incentives are not given to the assessee expressly for the purpose of purchasing capital assets or for the purpose of purchasing machinery is irrelevant. The object has to be seen and not the form in which it is granted
CIT vs. Chaphalkar Brothers Pune
(2017) TaxCorp(LJ) 13999 (SC)
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S. 80-IB: The incentive meant for small scale industrial undertakings cannot be availed by undertakings which do not continue as small scale industrial undertakings during the relevant period. Each assessment year is a different assessment year. The fact that the object of legislature is to encourage industrial expansion does not mean that the incentive should remain applicable even where on account of industrial expansion, the small scale industrial undertakings ceases to be small scale industrial undertakings. The fact that in the initial year eligibility was satisfied is irrelevant
DCIT. vs. Ace Multi Axes Systems Ltd.
(2017) TaxCorp(LJ) 13965 (SC) · Section. 80-IB
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Taxability of mesne profits: High Court's approach of dismissing the Dept's appeal only because the Tribunal relied on Narang Overseas 111 ITD 1 (Mum) (SB) and the appeal against which had been dismissed for non-removal of defects is not correct. The High Court ought to decide the question on merits
Goodwill Theatres Pvt. Ltd.
(2017) TaxCorp(LJ) 13964 (SC)
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S. 80-IC: Entire law on concept of "initial assessment year" and "substantial expansion" explained. Also, law on interpretation of statutes which confer incentives for promoting development explained. Law on interpretation when there is doubt also explained. Law on whether CBDT Circulars are mere external aids in interpretation of a statute or more also explained
Stovekraft India vs. CIT
(2017) TaxCorp(LJ) 13963 (HC-HP) · Section. 80-IC
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S. 263 Revision: Explanation 2 to s. 263 inserted w.e.f. 01.06.2015 does not override the law as interpreted by the various High Courts whereby it is held that the CIT cannot treat the AO's order as being erroneous and prejudicial to the interest of revenue without conducting an enquiry and recording a finding. If the Explanation is interpreted otherwise, the CIT will be empowered to find fault with each and every assessment order and also to force the AO to conduct enquiries in the manner preferred by the CIT, thus prejudicing the mind of the AO, This will lead to unending litigation and no finality in the legal proceedings which cannot be the intention of the legislature in inserting the Explanation
Amira Pure Foods Pvt. Ltd vs. Pr CIT
(2017) TaxCorp(LJ) 13947 (ITAT-DELHI) · Section 263
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S. 271(1)(c) Penalty: The requirement to obtain previous approval of the IAC is mandatory as it is to safeguard the interests of the assessee against arbitrary exercise of power by the AO. Non-compliance may vitiate the penalty order. However, the requirement in s. 274 that the assessee must be given a reasonable opportunity of being heard cannot be stretched to the extent of framing a specific charge or asking the assessee an explanation in respect of the quantum of penalty proposed to be imposed
Maharaj Garage & Company vs. CIT
(2017) TaxCorp(LJ) 13946 (HC-BOMBAY) · Section 271(1)(c)
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S. 194H, 201(1): An obligation to deduct TDS u/s 194H arises only if the relationship is that of "principal and agent" and if a "payment" is made. As the relationship between the assessee and the distributor was that of "principal to principal" and as the "discount" did not amount to a "payment", there was no liability to deduct TDS
Hindustan Coca Cola Beverages Pvt. Ltd vs. CIT
(2017) TaxCorp(LJ) 13945 (HC-RAJASTHAN) · Sections 194H, 201(1)
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S. 68 Bogus share capital: Law laid down in Subhlakshmi Vanijya Pvt. Ltd vs. CIT 155 ITD 171 (Kol), Rajmandir Estates 386 ITR 162 (Cal) etc that the CIT is entitled to revise the assessment order u/s 263 on the ground that the AO did not make any proper inquiry while accepting the explanation of the assessee insofar as receipt of share application money is concerned cannot be interfered with
Daniel Merchants Private Limited vs. ITO
(2017) TaxCorp(LJ) 13944 (SC) · Section 68
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S. 271(1)(c) penalty can be levied only where the charge is unequivocal and unambiguous. The AO must specify whether the charge is of concealment of particulars of income or furnishing of inaccurate particulars thereof and which one of the two is sought to be pressed into service. He is not permitted to club both by interjecting an ‘or’ between the two. The ambiguity in the show-cause notice compounded by the confused finding of the AO that he was satisfied that the assessee was guilty of both renders the proceedings void (K. P. Madhusudhanan 251 ITR 99 (SC) & MAK Data 358 ITR 593 (SC) distinguished
Pr CIT vs. Baisetty Revathi
(2017) TaxCorp(LJ) 13943 (HC-AP) · Section 271(1)(c)
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Taxability of Gifts u/s 56(2)(vi): A receipt cannot be taxed u/s 56(2)(vi) merely on conjecture or surmises. The AO has to prove beyond doubt that a particular receipt is taxable as income. Merely because the person who paid the amount does not initiate any action for recovery of money is not sufficient for making addition
Nilesh Janardan Thakur vs. ITO
(2017) TaxCorp(LJ) 13942 (ITAT-MUMBAI) · Section. 56(2)(vi)
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