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Oct 16, 2019

Show-cause notice issued under section 26(1) of Prohibition of Benami Property Transactions Act, 1988 is not appealable under the court of law.

-         Vide Decision of High court of Delhi in Initiating officer Vs. Appellate tribunal under ther prohibition of Benami Property transactions. Facts of the case: Instant writ petition was filed challenging the order of the Appellate Tribunal.The challenge raised was that no appeal could have been filed before the Appellate Tribunal against show-cause notice issued by the Adjudicating Authority under section 26 of the Prohibition of Benami Property Transactions Act, 1988 as the said provision does not permit such an appeal challenging a show-c.....

Oct 16, 2019

Not releasing the refund of income tax for the reason of technical glitch in the system is not tenable.

Vide Decision of High Court of Bombay in Vodafone Idea Limited Vs. Commissioner of Income-tax Facts of the Case: This petition is filed for a direction to the respondents-the Income Tax authorities to refund an amount of Rs.149,98,21,407/- with statutory interest.The petitioner is a public limited company and is engaged in providing telecommunication services. For the period relevant to assessment year 2014-15, the petitioner had suffered sizable deduction of tax at source, at the hands of payees, which was in excess of Rs.204/- crores. The return filed by the assessee for the said asse.....

Jan 21, 2020

Revised Return of Income of companies to be accepted by the authorities which are in case of scheme of arrangement for amalgamation etc.

It is incumbent upon Department to assess total income of successor in respect of previous assessment year after date of succession. Thus, where predecessor companies/transferor companies had been succeeded by appellants / transferee companies who had taken over their business along with all assets, liabilities, profits and losses etc. in the scheme of amalgamation, in view of provisions of section 170(1), Department was required to assess income of appellants after taking into account revised Returns filed after amalgamation of companies. -         .....

Feb 21, 2020

Unutilized credit under MODVAT scheme does not qualify for deductions under section 43B

Vide Decision of Supreme court of India in Maruthi Suzuki India Limited Vs. Commissioner of Income Tax Facts of the case: The  Assessee, a Company, has been engaged in the manufacturing and sale of various Maruti Cars and also trades in spares and components of the vehicles. It acquires exiceable raw materials and inputs which are used in the manufacturing of the vehicles.The assessee had also been taking benefit of MODVAT credit on the raw material and inputs used in the manufacturing.At the end of the Assessment Year, 1999-2000 was left as unutilized MODVAT credit.In the return, it w.....

Oct 17, 2020

Where assessee's application as to whether it was liable to pay tax on buy-back of shares under section 115-O was pending before AAR, impugned communication addressed by department treating assessee to be 'assessee-in-default' on account of non-payment of tax was to be treated as show-cause notice and, thus, the matter was to be remanded back for disposal on merits

Vide Decision of Supreme court of India in Cognizant Technology Solutions India (P.) Ltd. Vs. Deputy Commissioner of Income Tax Facts of the case: The department addressed a communication to assessee that payments made to shareholders, under the purchase of shares through a scheme of 'arrangement and compromise' was dividend within the meaning of section 2(22)(d)/2(22)(a), requiring it to remit tax to the Government account under section 115-O.Since the company failed to remit the taxes within the stipulated period, the company was 'deemed to be an assessee-in-default', under section 11.....

Oct 17, 2020

Where charge over the property was created much prior to the issuance of the recovery notice under Rule 2 of Schedule II to the Income-tax Act, it would remain valid through the sale of the property was conducted after issuance of attachment order by tax recovery officer.

Vide decision of Supreme court of India in Connectwell Industries (P.) Ltd. Vs Union of India Facts of the case: The Appellant filed the Writ Petition in the High Court of Judicature at Bombay seeking a restraint order against the Tax Recovery Officer for enforcing the attachment made under the Income Tax Act, 1961 for recovery of the dues. The Writ Petition was dismissed by the High court, aggrieved by which the Appeal has been filed.Biowin Pharma India Ltd. (BPIL) - herein obtained a loan from the Union Bank of India. Property (land along with Plant and Machinery, building) was mortga.....

Oct 17, 2020

Where State Government undertaking is engaged in wholesale and retail trade of beverages within State, levy of Gallonage Fee, Licence Fee and Shop Rental (kist) with respect to FL-9 licences granted with respect to wholesale of foreign liquor will clearly fall within purview of Section 40(a)(iib) and, hence, amount paid in this regard is liable to be disallowed while similar amounts paid with respect to FL-1 licences granted with respect to retail business in foreign liquor is not an exclusive levy on appellant and, hence, not liable to be disallowed; Surcharge on sales tax and turnover tax is not a 'fee or charge' coming within scope of Section 40(a)(iib) and is not an amount which can be disallowed under said provision

Vide Decision of High court of Kerala in Kerala State Beverages (Manufacturing and Marketing) Corporation Limited Vs. Assistant Commissioner of Income Tax. Facts of the case: Appellant is a company registered under the Companies Act, engaged in wholesale and retail trade of beaverages within the State of Kerala, and is a 'State Government Undertaking' falling within the 'Explanation' provided under section 40(a)(iib) of the Income Tax Act, 1961.It is engaged in wholesale and retail trade of beverages within State of Kerala - Assessee is holding FL-1 Licence with respect to sale of forei.....

Oct 17, 2020

The assessing officer or the appellate authority while exercising the power of appeal or stay of the assessment proceedings under section 226 of the Income Act 1961 are enjoined obligation to give regard and respect to the directions of the Hon’ble High Court. In other words, it would not be necessary that the payment of 20% can be dispensed with only if there is an order of the high court.

Vide decision of High Court of Kerala in Aranattukara Oriental Service Co-Operative Bank Ltd. Vs Commissioner of Income Tax Facts of the case: Petitioner is a primary Co-operative Agricultural Credit Society registered under the Kerala Co-operative Societies Act. Petitioner is an assessee on the file of the Commissioner of Income tax. While so, the Commissioner issued a notice under Section 156 of the Income tax Act pertaining to the assessment year 2017-18.Aggrieved by the assessment order petitioner preferred appeal before the Income tax Officer along with a stay application. It is su.....

Oct 17, 2020

Where during Income-tax search and seizure proceedings, Assessing Officer stumbled upon contraband substance, it did not amount to seizure under Narcotic Drugs and Psychotropic Substances Act, 1985 and thus it could not be that search and seizure operation by officer was not empowered or authorized under NDPS Act and was without mandate of law

Vide decision of High Court of Bombay in Ananth Vardhan Pathak Vs Union of India Facts of the case:  On 7-1-2014, a search and seizure operation was conducted by Income Tax Department at a particular room in Taj Palace Hotel, Mumbai in connection with affairs of Yash Birla Group Companies. Applicant, who was President of Corporate Affairs of said group was found in said room along with co-accused.In course of said search and seizure operation, the co-accused was found in possession of eight small self-knotted transparent polythene pouches containing white powdery substance kept in .....

Oct 17, 2020

Income Tax I : Where assessee engaged in business of manufacturing ATMs and distribution of NCR books products, took a premises on lease for a period of three years and incurred expenditure on improvement of said premises such as improvement of interiors and electrical works, ceiling work for networking of computers in connection with set up of office etc., expenditure so incurred was to be allowed as revenue expenditure Income Tax II: ATM can be regarded as a computer and thus it is eligible for higher rate of depreciation Income Tax III: Where assessee changed revenue recognition method during relevant assessment year, in view of fact that departmental authorities failed to prove that changed method was not correct and it distorted profits of relevant year, impugned order passed by Assessing Officer rejecting new method of accounting was not sustainable

Vide Decisions of High court of Karnataka in Commissioner of income tax Vs. NCR Corporation (p.) limited. Facts of the case: Assessee is engaged in the business of manufacture of automated teller machines (ATMs) and distribution of NCR book products and commissions in India.The assessee filed the return of income on 1-12-2003 declaring taxable income of Rs. 4,66,32,670/-. The return was processed under section 143(1) and was selected for scrutiny and notice under section 143(2) of the Act was issued..The assessee had taken premises on lease for a period of three years. The assessee clai.....

Oct 17, 2020

For purpose of allowing benefit of deduction under section 54(1), expression 'a residential house' includes within its ambit plural numbers as well and, thus, it cannot be construed as one residential house only

Vide decision of High Court of Karnataka in Arun K. Thaigarajan Vs Commissioner of Income Tax (Appeals)-II Facts of the case: The assessee was the owner of a residential property.The said property was sold vide registered sale deed dated 9-10-2002 for a consideration of Rs. 2,68,89,375/-.The assessee filed return of income on 9-7-2003 for Assessment year 2003-04 declaring income of Rs. 1,68,52,920/-, under the head income from salary, house property, capital gains and income from other sources and paid tax of Rs. 49,57,706/.The assessing officer issued a notice under section 148 of the .....

Jan 23, 2021

- Section 40(a)(i) and (ia) provides for disallowance only in respect of expenditure, which is revenue in nature and therefore, provision does not apply to a case of assessee whose claim is for depreciation, which is not in nature of expenditure but an allowance. Depreciation is not an outgoing expenditure and, therefore, provisions of section 40(a)(i) and (ia) are not applicable - Vide Decision of High court of Karnataka in Principal Commissioner of Income Tax Vs. Tally Solutions (P.) Ltd.

Facts of the case: The Assessee is engaged in business of software development and sale of software product licence, software maintenance and training in software.The assessee filed the return of income for the Assessment Year 2009-10 after claiming brought forward losses and declared its income as XNIL'. The return of income was processed on 30-10-2010 and the case was selected for scrutiny and notices under section 143(2) and Section 142(1) of the Act were issued. The Assessing Officer by an order dated 27-3-2013 concluded the assessment by making certain additions and disallowed a sum o.....

Mar 19, 2021

Where petitioner-university, with a view to avail exemption under section 10(23C)(vi) for assessment year 2019-20 and onwards, filed related application in Form No. 56D before Commissioner (Exemptions), however, same was rejected by him on ground that application was filed beyond prescribed time-limit and that he had no jurisdiction to condone delay in filing of such delayed application, since there is no provision for extension of limitation period or for condonation of delay in filing application for grant of exemption under section 10(23C), Commissioner (Exemptions) was justified in rejecting said application for assessment year 2019-20. However, he certainly fell in error in not considering said application for subsequent assessment years. Because even if said application was filed with delay for assessment year 2019-20, it was before prescribed date for subsequent assessment year. Vide Decision of High court of Bombay in Sanjay Ghodawat University, Kolhapur, Vs. Commissioner of Income Tax (Exemptions)

Facts of the case: The assessee is a university called Sanjay Ghodawat University, Kolhapur established by an act of the State Legislature of Maharashtra and which became operational on and from 13-7-2017. 2. It is stated that because of heavy rainfall and resultant food in different parts of the country, Central Board of Direct Taxes (CBDT) passed an order dated 27-9-2019 under section 119 of the Income-tax Act, 1961 (briefly "the act" herein-after) extending the due date for fling of income tax returns as well as reports of audit for the assessment year 2019-20 from 30-9-2019 to 31-10-20.....

Mar 19, 2021

Where assessee had invested sale consideration on transfer of Capital Asset in purchasing a new residential property in name of his married widowed daughter, Assessing Officer to grant exemption under section 54F on such amount invested in his daughter's name. Vide Decision of Income Tax Appellate Tribunal of Bangalore in Krishnappa Jayaramaiah Vs. Income Tax Officer, Ward 6(3)(4), Bangalore

Facts of the case: 1. The assessee filed Return of Income declaring total income at Rs. 2,96,430 under the head 'house property', 'income from capital gain' and 'income from other sources'. 2. The assessee claimed deduction u/s 54F of the Act for the investment made in a residential property, in the name of his widowed daughter Smt. J. Shylaja. 3. The assessee submitted before the A.O. that the property under question was received by inheritance by way of partition. The legal heirs of the property are the assessee, his wife, son and widowed daughter. All legal heirs have executed sale dee.....

Sep 15, 2021

There is no requirement for a notice to be issued under section 143(2) for completion of an assessment under section 153C and thus, question of adhering to time limit prescribed under proviso to section 143(2) does not arise

vide Decision of High Court of Madras in B. Kubendran v. Deputy Commissioner of Income Tax, Central Circle 2(1), Chennai. Facts of the case: 1. The petitioner, an assessee challenges six orders of assessment passed by the Deputy Commissioner of Income Tax, Central Circle 2 (1)(respondent). The petitioner splits the impugned orders into two batches, 2012-13, 2013-14, 2014-15 and 2017-18 being batch I and 2015-16, 2016-17 being batch II. 2. A search was conducted in the premises of C. Vijayabaskar on 7-4-2017. All files relating to the searched entity as well as those associated to him were cen.....

Sep 15, 2021

Where assessee offered capital gain on sale of a property and assessment completed accordingly but reassessment was initiated on ground registering authority had not accepted value of land as per sale deed , since manner in which sale deed was valued by assessee and stamp duty paid at time of registration as well as appeal filed under section 47A of Indian Stamp Act and actual market value prevailing during relevant point of time with reference to subject property provides new information and additional material which were not considered at time of original assessment, reopening by AO was in consonance with provisions of section 147.

vide Decision of High Court of Madras in GE T&D India Ltd. v. Deputy Commissioner of Income Tax, Chennai. Facts of the case: The petitioner is a listed Company incorporated on 13.03.1957 and is engaged in the business of manufacturing of heavy electrical equipment and0020executes projects involving transmission and distribution of power and other turnkey projects.The learned counsel appearing for the petitioner, with reference to theissues, contended that the initiation of proceedings under Section 147 of the Income Tax Act itself is untenable, in view of the fact that there is no e.....

Sep 16, 2021

- Additional Income under Section 68 of the Income tax Act was added to declared income of the assessee by the assessing officer without granting for the personal hearing of the assessee Where AO made addition to assessee's declared income under section 68 on account of unexplained unsecured loan, since it was found that assessee sought personal hearing before AO to establish genuineness of unsecured loan received by assessee which had not been granted by AO, assessee had been able to establish a prima facie case in its favour and thus impugned order is set aside to file of AO to consider assessee's reply

vide Decision of High Court of Delhi in DJ Surfactants v. National E-Assessment Center, Income Tax Department, New Delhi Facts of the case: The Assessing Officer(AO) has made an addition to the petitioner's declared income of Rs. 9,56,00,000/- under section 68 of the Income-tax Act, 1961 related to AY 2018-19. The addition has been made on account of purported unexplained, unsecured loansShow cause notice was issued to the petitioner on 1-3-2021, along with the draft assessment order of even date. As per the said show cause notice, the petitioner was required to file a response by 8-3-2.....

Sep 21, 2021

Where Public Charitable Trust, doing educational services, gave donations to charitable and religious institutions for philanthropy only, exemption under section 11 cannot be denied merely because it was donating to 'activities other than education'

vide Decision of High Court of Madras in Director of Income Tax Exemptions, Chennai v. Shanmuga Arts Facts of the case: 1. The respondent(assessee) is a Trust registered under section 12AA of the Income-tax Act, 1961. The Trust had filed the return of income for assessment year 2007-2008 on 2-11-2007 for Rs. 60,76,26,276/- and claiming exemption for Rs. 6,65,60,886/- being the amount of donation made by it under section 11 of the Act. 2. The Assessing Officer had issued a notice u/s.143(2) of the Act on 21-8-2008 through which the details of donations made during the period were called.....

Sep 22, 2021

No assessee can be compelled to continue any exemption, if it intends not to avail same. It is always open for an assessee to arrange its affairs in a manner which it feels it would be beneficial, and it cannot be compelled to continue its operations/activities in a particular manner which would be prejudicial to its interest.

vide Decision of High Court of Telangana in Telangana State Pollution Control Board, Hyderabad v. Central Board of Direct Taxes, New Delhi Facts of the case: 1. The Telangana State Pollution Control Board (for short 'TSPCB') is the petitioner constituted by the State Government under section 4 of Water (Prevention and Control of Pollution) Act, 1974 and Section 5 of the Air (Prevention and Control of Pollution) Act, 1981. 2. The petitioner is established for the purpose of administering and controlling various steps relating to reduction of pollution and hazardous waste of all kind.....

Sep 22, 2021

- Act: The Income Tax Act ,1961 When there are no findings that a trust is established with a clear motive of earning profits, the assessee cannot be rejected for registration under Section 12AA

vide Decision of High Court of Madras in Commissioner of Income Tax, Salem v. Angels Educational Trust Facts of the case: 1. The assessee is a Trust established for educational purposes and principle object of the Trust was to run an educational institution to provide education and award scholarships to poor and deserving students and to assist them in any manner of their study, research or apprenticeship. 2. In terms of clause 11 of the Deed of Trust, which deals with 'application of income and trust fund', the Trustees shall after provide for the payments mentioned in the Deed an.....

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