Latest Judicial Decisions

► National Travel Service vs. CIT (Supreme Court) decision on S.220(2): Deemed Dividend 

Jaipur ITAT Decision on Section-145(2)

International court of justice decision of JADHAV

Supreme court very important decision on section 40 (a)(ia) dilivered on 03.05.2017 : M/s Palam Gas Secrices Vs. CIT

 S. 220(6): CBDT's instruction dated 29.02.2016 on stay of demand by the AO does not require the assessee to make a pre-deposit of 15% of the disputed demand. As per the Instruction, if the AO requires the assessee to pay less, or more, than 15% of the demand, the sanction of the Pr. CIT is required. If the AO demands 15% to be paid, the assessee is entitled to approach the Pr CIT for review of the AO's decision: Jagdish Gandabhai Shah vs. Pr CIT (Gujarat High Court)

Supreme court today's order on sec.50 versus slump sale assessee fav order  : The Commissioner of Income Tax, Ahmedabad Vs Equinox Solution Pvt. Ltd. : Posted on 22.04.2017

 Once the rate is applied provision of Section 40(a)(ia) can not be applied : Supreme Court in the case of  M/S PRADEEP SINGH WAZIR Vs COMMISSIONER OF INCOME TAX AND ANR. : Posted on 22.04.2017

Supreme important verdict on division of income for undisclosed income found at the time of search :Commissioner of Income Tax, Salem VS. Rekha Bai Posted on 22.03.2017 

CBDT Clarifies Imp Law On Cash Transaction Limits Imposed By Sections 269ST And 271DA

Copy of finance bill as passed by the Lok Shabha

►S. 147: Entire law on reopening of assessments pursuant to audit objections explained in the context of the corresponding provisions of the Bihar Finance Act. If the AO disagrees with the information/ objection of the audit party and is not personally satisfied that income has escaped assessment but still reopens the assessment on the direction issued by the audit party, the reassessment proceedings are without jurisdiction : Larsen & Toubro Ltd vs. State of Jharkhand (Supreme Court) Posted on 22.03.2017

►S. 32: Title to immovable property cannot pass when its value is more than Rs.100/- unless it is executed on a proper stamp paper and is also duly registered with the sub-Registrar. Accordingly, a lessee cannot be said to be the "owner" for purposes of claiming depreciation. Under Explanation 1 to s. 32, the lessee is entitled to depreciation on the cost of construction incurred by him but not on the cost incurred by the owner and reimbursed by the lessee : Mother Hospital Pvt. Ltd vs. CIT (Supreme Court) Posted on 22.03.2017

►S. 220(6) stay of demand: CBDT Circular dated 29.2.2016 does not supersede Instruction No.1914 but modifies it. Both have to be read together. The AO and CIT cannot straightaway demand payment of 15% of the dues but have to grant complete stay if the assessment is “unreasonably high pitched” or the demand for depositing 15% of the disputed demand leads to "genuine hardship" to the assessee” :  Flipkart India Private Limited vs. ACIT (Karnataka High Court) posted on 19.03.2017

► S. 143(3): Loose papers which do not have full details are "dumb documents" and have no evidentiary value. The fact that the assessee sold goods at a concession does not mean that that the difference between sale value and market value can be assessed as income. The onus is on the AO to make inquiries from the buyers and bring incriminating evidence on record to show that the assessee sold flats at a higher rate : Nishant Construction Pvt. Ltd vs. ACIT (ITAT Ahmedabad) Posted on 19.03.2017

Supreme Court Decision section 32(Leasehold Improvement) Posted on 17.03.2017

S. 194-I: S. 105 of the Transfer of Property Act distinguishes between 'premium' for acquiring the lease and 'rent' for enjoying user of the property. Payment towards 'premium' for the lease (even if paid annually) is a capital payment and is not subject to s. 194-I TDS. CBDT Circular No. 35/2016 dated 13.10.2016 referred; Rajesh Projects (India) Pvt. Ltd vs. CIT (Delhi High Court) Posted on 10.03.2017

S. 271(1)(c): Entire law explained on whether levy of penalty is automatic if return filed by the assessee u/s 153A discloses higher income than in the return filed u/s 139(1) in the context of the law as it stood prior to, and after, the insertion of Explanation 5 to s. 271(1)(c);Pr. CIT vs. Neeraj Jindal (Delhi High Court) Posted on 10.03.2017

S. 271(1)(c): If the quantum appeal is admitted by the High Court, it means that the issue is debatable and penalty cannot be levied; CIT vs. Advaita Estate Development Pvt. Ltd (Bombay High Court) Posted on 10.03.2017

Madras High Court section 271(1)(c) Mak Data sc explained sc assessee fav; Commissioner of Income Tax Vs.Smt. Anita Kumaran posted on 07.03.2017

Rajasthan high court 10(23c)(iiiad) Assessee FavourJunjhunu Academy Sammittee Versus Income Tax Officer Jhunjhunuh posted on 07.03.2017

Rajasthan High Court Commission Expense Assessee Favour Detailed: PRINCIPAL COMMISSIONER OF I T(CENTRAL) Versus M/S ASHIANA ISPAT LTD posted on 07.03.2017

 Hon,ble Gujrat High Court on reopening u/s 148 Assessee Favour : VINODBHAI SHAMJIBHAI RAVANI....Versus DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, Posted on 01.03.2017

 CBDT Issues SOP For Verification Of Cash Transactions Relating To Demonetisation To Curb Malpractices & Tax Evasion

 Whether on the facts and circumstances of the case and in law, the Tribunal was justified in deleting the penalty imposed under section 271(1)(c) ? -  YES  The Commissioner of Income Tax-21 vs M/s.Advaita Estate Development Pvt. Ltd. IN THE HIGH COURT OF JUDICATURE AT BOMBAY : Posted on 22.02.2017

 Mere receipt of information from any source would not by itself tantamount to reason to believe that income chargeable to tax has escaped assessment. Piramal Enterprises Ltd.Versus Deputy Commissioner of Income Tax : Posted on 22.02.2017

 When the assessee has surrendered the income to purchase peace of mind, then levy of the panelty under section 271(1))c) is  not justified . : Dr. G. D. Tripath Vs Commissioner of Income Tax (III) The Rajasthan High Court : Posted on 22.07.2016

 The Commissioner and his officials are playing a blame game. To cover up their lapses and deficiencies, they turned around and blamed their Advocates .. We are sorry to say that this is not what was expected from the Commissioner of Service Tax. If the officers are unaware of legal procedures, then, they have to be in touch with their Advocates and periodically. They cannot expect that the Advocate himself comes to their office and apprise them as to what further has to be done after the filing of an Appeal : CCE vs. Vansum Industries (Bombay High Court) : Posted on 21.02.2017

CBDT issues Revised Guidelines for stay of demand at the First Appeal Stage; Decision of the Board to provide significant relief to the taxpayers in matters relating to grant of stay and recovery of demand by reducing arbitrariness in the disposal of stay petitions where the tax demand is contested at the First Appellate stage. :  Important

The CBDT has issued Office memorandum dated 29.02.2016 by which it has revised Instruction No. 1914 dated 21.03.1996 and issued fresh guidelines for stay of demand at the first appeal stage

S. 153C: The requirement that the documents found during search should “belong” to the assessee is a condition precedent and a jurisdictional issue. The non-satisfaction of the condition renders the entire proceedings null and void. The fact that the searched person and the assessee are alleged to be “hand in glove” is irrelevant : CIT vs. Arpit Land Pvt. Ltd (Bombay High Court) Posted on 15.02.2017

S. 143(2)/ 292BB: The issue of a notice u/s 143(2) bearing the wrong (old) address of the assessee does not amount to a valid service of the notice u/s 282 r.w.s. 27 of the General Clauses Act. The non-service of a notice u/s 143(2) before the expiry of 12 months from the end of the month in which the return was filed renders the assessment void. As the assessee objected to the same before completion of proceedings, the assessment order is not saved by s. 292BB : CIT vs. Abacus Distribution Systems (India) Pvt. Ltd (Bombay High Court)  Posted on 15.02.2017

S. 14A Rule 8D: No disallowance with respect to exempt income can be made if the securities are held as stock-in-trade. CBDT Circular No. 5/2014 dated 11.02.2014 referred : CIT vs. G K K Capital Markets (P) Limited (Calcutta High Court) Posted on 15.02.2017

 S. 80-IB(10 ): The profits of an undertaking eligible for deduction cannot be treated as "inflated" in the absence of material on record to show that there is an arrangement between the eligible unit and the non-eligible unit to generate more than ordinary profits for the eligible unit. The mere fact that there are common customers of both the units does not by itself indicate transfer of profits to the eligible unit.: Malay N. Sanghvi vs. Income Tax Officer 8(3)2 (Bombay High Court)  Posted on 09.02.2017 

►  S. 254(2) ;    Plea that the appeal was mistakenly withdrawn on the advice of Counsel and that the same should be restored should be backed by evidence. If the assessee voluntarily withdraws the appeal, he cannot seek restoration on the ground that the withdrawal was an apparent mistake : Jayant D. Sanghavi vs. ITAT (Bombay High Court)  : Posted on 09.02.2017

S. 69C Bogus Purchases: Purchases cannot be treated as bogus merely on the basis of the statements and affidavits filed by the alleged vendors before the sales-tax department. The said statements cannot be relied upon without cross-examination of the parties. The fact that the parties did not respond to the s. 133(6) notices is not relevant if the assessee filed copies of purchase invoices, extracts of stock ledger showing entry/exit of materials, copies of bank statements to evidence that payments for these purchases were made through normal banking channels, etc to establish genuineness of the aforesaid purchases. ACIT vs. Mahesh K. Shah (ITAT Mumbai) Posted on 09.02.2017

S. 68: Even if the premium at which the shares are issued defies commercial prudence, the receipt cannot be assessed as "unexplained credit" if the identity of the payer, genuineness of the transaction and capacity of the subscriber are not disputed. Interest earned on short-term fixed deposits is assessable as "profits and gains of business" and not as "income from other sources" : CIT vs. Green Infra Limited (Bombay High Court) 16.01.2017 (Latest) posted on 07.02.2017

Bogus purchases: A statement by the alleged vendor that the transactions with the assessee are only accommodation entries and that there are no sales or purchases cannot be relied upon by the AO unless the assessee is given the opportunity to cross-examine the vendor : CIT vs. Ashish International (Bombay High Court) 02.02.2017 (latest) posted on 07.02.2017

CIT vs. Axis Pvt. Equity Ltd (Bombay High Court) S. 28/29: There is a distiction between "setting up of business" and "commencement of business". All expenditure after "setting up" is deductible business expenditure even if the business has not commenced. A business is "set up" when steps are taken to recruit employees and take premises etc

Hon'ble Suprememe court in the case of Southern Motors vs State Of Karnataka & Ors on 18 January, 2017 Trade Discount case law

Balakrishnan vs. UOI (Supreme Court) : S. 10(37) Capital Gains: Meaning of "compulsory acquisition" under the Land Acquisition Act, 1894 explained. The fact that the assessee entered into a settlement with the Collector regarding the compensation amount does not mean that the  acquisition was not "compulsory" if the prescribed procedure was followed. Info Park Kerala vs. ACIT (2008) 4 KLT 782 overruled.

► ITAT Mumbai : Bogus purchases: As a direct one to one relationship/nexus between the purchases and sales has not been established by the assessee, the purchases have to be treated as bogus and 12% of the purchase cost is assessable as profits (law on the subject noted)

 Delhi High Court approves Delhi ITAT decision in case of Jatin Investments ( i.e. Sec.68 is not applicable on shares sale without  revenue discharging its burden) : This can apply in case of  Penny stock also

► Landmark supreme court order in context of capital gains exemption u/s10(37)

CBDT GAAR-Press-Release Circular

Madras High Court writ assessment order

Bombay High Court decision on section 148 :- In favour of Assessee

Bombay High Court on Reopening u/s 147 for which order giving appeal effect issued by CIT passed by AO:- In favour of Assessee

Madras High Court on Royalti sec 9(1)(vi)

Delhi High Court on Section 151

Supreme Court Decision on Sahara/Birla loose papers

Supreme Court on 271 (1)(c):- In favour of Assessee

Rajasthan High Court on Sec.43B (Employees P.F. disallowance) :- In favour of Assessee


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