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Income Tax - High Court - Case Laws
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- 2020 (12) TMI 1201 - KARNATAKA HIGH COURT
Revision u/s 263 - Characterization of income - As per CIT AO has not satisfied itself that the assessee was engaged in the business of purchase and sale of plots and has not brought any material on record to show that investment in the property was made for the purposes of trading - income assessed as income from business in respect of sale of properties as income from capital gains to disallow interest on loan of purchase of property as deduction from sale consideration, to direct the Assessing Officer to adopt guidance value of sub registrar in respect of one property as deemed sale value and to bring to tax the difference and to allow deduction under Section 80C - HELD THAT:- Commissioner of Income Tax as well as the tribunal has failed to appreciate that the Assessing Officer had put 36 questions to the assessee to ascertain the natu....... + More
- 2020 (12) TMI 1161 - KARNATAKA HIGH COURT
Computation of deduction u/s 10A - telecommunication expenses and traveling expenses incurred in foreign currency reduced from export turnover has to be reduced from total turnover for computing deduction - HELD THAT:- The first substantial question of law has already been answered against the revenue by a decision of the Supreme Court in HCL TECHNOLOGIES LTD.' [2018 (5) TMI 357 - SUPREME COURT]. The aforesaid aspect of the matter could not disputed by the learned counsel for the revenue. In view of the decision of the Supreme Court, the first substantial question of law involved in this appeal is answered against the revenue and in favour of the assessee. TP Adjustment - Arms length price adjustment on account of interest on external commercial borrowings - loans or external commercial borrowings between the cross border entities res....... + More
- 2020 (12) TMI 1160 - KARNATAKA HIGH COURT
Disallowance u/s 40(a)(ia) in respect of depreciation on intellectual property rights - Failure to deduct TDS - HELD THAT:- Section 40 refers to the outgoing amount chargeable under this Act and subject to TDS under Chapter XVII-B. The deduction under Section 32 is not in respect of the amount paid or payable which is subjected to TDS; but is a statutory deduction on an asset which is otherwise eligible for deduction of depreciation. Section 40(a)(i) and (ia) of the Act provides for disallowance only in respect of expenditure, which is revenue in nature, therefore, the provision does not apply to a case of the assessee whose claim is for depreciation, which is not in the nature of expenditure but an allowance. The depreciation is not an outgoing expenditure and therefore, provisions of Section 40(a)(i) and (ia) of the Act are not applicab....... + More
- 2020 (12) TMI 1086 - DELHI HIGH COURT
Validity of order u/s 144C - Failure to pass a draft assessment order under Section 144C(1) - Non adhere to the mandatory procedure prescribed under Section 144C - HELD THAT:- This issue is no longer res integra. It is now settled law that failure to adhere to the mandatory procedure prescribed under Section 144C of the Act would vitiate the entire proceedings and the same cannot be treated as an irregularity/ curable defect. In the present case, in complete contravention of Section 144C, the Assessing Officer wrongfully assumed the jurisdiction and passed the final assessment order without passing a draft assessment order and without giving the respondent/assessee an opportunity to raise objections before the Dispute Resolution Panel. See ESPN Star Sports Mauritius S.N.C. ET Companies [2016 (4) TMI 45 - DELHI HIGH COURT] wherein held as ....... + More
- 2020 (12) TMI 1085 - DELHI HIGH COURT
Rectification petition u/s 254 - period of limitation - HELD THAT:- Address of the appellant mentioned in the appeal before the ITAT by the respondent/Department was its former address and not the new address, which had been mentioned in the appeal filed by the petitioner before the Commissioner, Income Tax (Appellate) in form No. 35. Consequently, the petitioner was never served in the appeal filed by the Department before the ITAT. This Court is also of the view that the ITAT has erroneously concluded that the miscellaneous application filed by the petitioner was barred by limitation under Section 254(2) of the Act inasmuch as the petitioner had filed the miscellaneous application within six months of actual receipt of the order. If the petitioner/assessee had no notice and no knowledge of the order passed by the ITAT, it cannot be said....... + More
- 2020 (12) TMI 1084 - DELHI HIGH COURT
Certificate under Section 197 denied - refusing to grant a certificate of deduction of tax at source at NIL rate, on payments to the petitioner company by its customers - HELD THAT:- Rule shows that the considerations and parameters prescribed under clause (2) are mandatory and the department is bound to take the same into consideration for the purpose of computation of existing and estimated liability referred in sub-rule (1). As perused the impugned reasons furnished by the Revenue in support of the impugned Lower Tax Deduction Certificate and note that as opposed to estimation of tax liability, the assessing officer has instead rejected the estimates provided by the assessee, on a broad and generalized reasoning. Thus, in absence of determination, as provided under the above-noted Rule, the reasons for rejections cannot be termed as va....... + More
- 2020 (12) TMI 1083 - DELHI HIGH COURT
Rectification application u/s 254 - Admissibility and consider the additional evidence furnished by the appellant under Rule 29 of the ITAT Rules - HELD THAT:- This Court would not entertain an appeal under Section 260A of the Act if an application for rectification under Section 254(2) of the Act is pending consideration as there is some overlap and if the order is recalled by the Tribunal, then the initial appeal would become infructuous. But in the present case, as the last date for availing the benefit of amnesty scheme being ‘Vivad se Vishwas Scheme’ is 31st December, 2020 and despite all efforts, the Tribunal is not deciding the application for rectification under Section 254(2) of the Act and learned counsel for respondent has stoutly opposed passing of any order in the present appeal to expedite disposal of the applica....... + More
- 2020 (12) TMI 1082 - DELHI HIGH COURT
Penalty u/s 271(1)(c) - Debatable assessment - HELD THAT:- This Court is of the view that the ITAT was right in deleting the penalty levied under Section 271(1)(c) of the Act. It has to be noted that penalty proceedings are an outcome of assessment and if the assessment itself is debatable, the penalty proceedings cannot survive. Levy of penalty cannot be a matter of course, as sought to be contended by the Revenue. It can only be levied in cases where the concealment of income has been proven. If the quantum order itself has been challenged and this Court has framed substantial questions of law in the appeal preferred by the respondent-assessee, it shows that the alleged concealment is not final and the issue is disputable. Consequently, the penalty levied by the assessing officer cannot survive in such a case. This Court in CIT Vs. Liqu....... + More
- 2020 (12) TMI 1081 - MADRAS HIGH COURT
Computation of capital gain - Cost of acquisition- diversion of the sale proceeds towards redeeming the interest of the mortgagor - whether no part of the consideration for sale was received by the appellant and same was directly paid to the Bank by the purchaser in discharge of the mortgage amount - claim that amount paid to bank towards clearing the cloud over the title should be deducted as provided u/s 48 as expenditure incurred wholly and exclusively in connection with such transfer - HELD THAT:- Issue decided in TMT. D. ZEENATH [2019 (4) TMI 817 - MADRAS HIGH COURT] mortgage deed was never registered and State Bank of India, Pondicherry did not have a right to bring the property to sale. The assessee in the present case, continued to have title over the property along with her co-owners. They brought the property to sale through Ban....... + More
- 2020 (12) TMI 1079 - MADRAS HIGH COURT
Reopening of assessment u/s 147 - Revision u/s 263 - Whether Department had not produced any record to show that there was a tangible material available to reopen the assessment and more so when all the 14 lease transactions were the subject matter of block assessment, which was set aside and thereafter, it was the subject matter of the directions issued by the CIT under Section 263? - material for the CIT to exercise his jurisdiction under the said provision to deny the assessee on the deduction as well as on the depreciation claim considered by the Assessing Officer in the assessments related to the relevant assessment years - HELD THAT:- Notices have been issued after getting the prior approval of the CIT. In fact, the CIT passed an order under Section 263 of the Act, which was quashed. Once over again, he granted approval for issuance....... + More
- 2020 (12) TMI 1078 - KARNATAKA HIGH COURT
Income from other sources as per Section 56(2)(vii) - whether the fair market value of bonus shares computed as per Rule 11U and Rule 11UA of the Income Tax Rules can be considered as income from other sources as per Section 56(2)(vii) ? - HELD THAT:- The issue of bonus shares by capitalization of reserves is merely a reallocation of the companies funds. There is no inflow of fresh funds or increase in the capital employed, which remains the same. The total funds available with the company remains the same and issue of bonus shares does not result in any change in respect of capital structure of the company. Thus, there is no addition or alteration to the profit making apparatus and the total funds available with the company remain the same. In substance, when a shareholder gets a bonus shares, the value of the original share held by him ....... + More
- 2020 (12) TMI 1038 - DELHI HIGH COURT
Petitioner locus standi to file present petition - PIL - issuance of a writ quashing Section 194 A(3) (ixa) of Income Tax Act, 1971 which mandates to deduct tax upon the interest accrued upon the award/Compensation granted by Motor Accident Claim Tribunal (MACT) by holding the same as unconstitutional and in the direct conflict with the object and spirit of the social welfare legislation i.e. Motor Vehicle Act, 1988 - HELD THAT:- Settled principle of law is that an aggrieved person must approach the Court. The Standing doctrine characteristic is that a potential litigant must be injured by the action it is challenging. In the opinion of this Court, the petitioner is a stranger having no right and/or fundamental right to any award/Compensation granted by Motor Accident Claim Tribunal (MACT). As the petitioner is not an aggrieved person, th....... + More
- 2020 (12) TMI 995 - CALCUTTA HIGH COURT
Rectification u/s 254 - Period of limitation - HELD THAT:- In the present case, the order was passed on September 09, 2018, and the copy of order was admittedly served upon the assessee on December 05, 2018. Tribunal should have excluded the time period between September 09, 2018, to December 05, 2018, in computing the period of limitation.Tribunal was wrong in not applying the exclusion period in computing the period of limitation and rejecting the application being barred by limitation. If Section 254(2) is read with Sections 254(3) and 268 of the Act and no hardship or unreasonableness can be found in the scheme of the Act. The Court need not make a violence to the words of Section 254(2) by substituting the word within “the end of the month in which the order was passed” by the word “the date on which the order was s....... + More
- 2020 (12) TMI 994 - MADRAS HIGH COURT
Characterization of interest income from the partnership firm as business income - Presumptive income @8% u/s 44AD - Interest and salary received by the assessee from firms in which he was a partner - Tribunal held that only remuneration and salary, received from a firm, to the extent of eligible under clause (b) of Section 40 of the Act, would be considered as profits and gains of business or profession of the recipient partner? - HELD THAT:- As already seen in Section 44AD, the words used are 'total turnover' or 'gross receipts' and it pre-supposes that it pertains to a sales turnover and no other meaning can be given to the said words and if done so, the purpose of introducing Section 44AD would stand defeated. That apart, the position becomes much clearer if we take note of sub-Section (2) of Section 44AD which states ....... + More
- 2020 (12) TMI 993 - MADRAS HIGH COURT
Capital gain deduction - Allowable deduction u/s 48 - sale was received by the appellant and same was directly paid to the Bank by the purchaser in discharge of the mortgage - whether Tribunal was right in law in not holding that there was a diversion of the sale proceeds towards redeeming the interest of the mortgagor and therefore the amount so diverted was not liable to capital gains tax? - HELD THAT:- Hon'ble Supreme Court in RM. ARUNACHALAM VERSUS COMMISSIONER OF INCOME-TAX [1997 (7) TMI 5 - SUPREME COURT] had held that where the mortgage had been created by the owner after he had acquired the property, the clearing of the mortgage by him prior to the transfer of the property would not entitle him to claim deduction under Section 48 of the Act because, in such a case he did not acquire any interest in the property subsequent to his acquiring the same.
- 2020 (12) TMI 992 - MADRAS HIGH COURT
Review Application - Penalty u/s 271(1)(c) imposed - non-disclosure of the capital gains - other sufficient reason which would entitle the petitioner/assessee to apply for review of the judgment passed by this Court - HELD THAT:- Unless any other sufficient reason is analogous to other two conditions, review cannot be granted. Therefore, the argument of Ms.S.Yogalakshmi, that she seeks to invoke the third limb of order 47 Rule 1(1) CPC is not acceptable, because the third limb has been explained to mean that unless any other sufficient reason is analogous to the other two conditions, viz., excusable failure to bring to the notice of the Court new and important matters or error apparent on the face of the record, a review cannot be entertained. The grounds canvassed in this review application were in fact argued in the appeal and the Court....... + More
- 2020 (12) TMI 991 - MADRAS HIGH COURT
Reopening of assessment u/s 147 - whether original assessment framed did not deal with the issue of exemption of sale of agricultural land? - as per AO as assessee had cooperated in the re-assessment proceedings and therefore, cannot object to the reopening - HELD THAT:- For validity of the reopening proceedings, we find that the reopening was made based on the facts, records and documents, which were available on the file of the Assessing Officer when the original assessment was completed. AO miserably failed to establish that the assessee had failed to disclose fully and truly all material facts necessary for the assessment for that year. The CIT(A) states that the Assessing Officer during the original assessment did not properly appreciate the documents. As held by the Hon'ble Supreme Court in Calcutta Discount Co. Ltd. [1960 (11) ....... + More
- 2020 (12) TMI 990 - MADARAS HIGH COURT
Validity of reopening of assessment - year of taxation of capital gain - change of opinion or review of the earlier order - HELD THAT:- Revenue points out that as the original processing of the ROI was only by way of intimation and no scrutiny assessment under Section 143(3) had been made, the assumption of jurisdiction under Section 147 is unassailable. It was only when the return of income for AY 2016-17 was taken up that the Officer gleaned that the appropriate year for taxing the capital gain would be 2014-15 and not 2016-17. The question of change of opinion or review of the earlier order would not arise insofar as no opinion was formed and no order passed at the first instance. Whether the assumption of jurisdiction in terms of Section 147 for AY 2012-13 is proper, particularly, seeing as the Officer only proposes a re-assessment, o....... + More
- 2020 (12) TMI 989 - MADRAS HIGH COURT
Validity of order u/s 144 - ex parte assessment order - Violation of principles of natural justice as not affording sufficient opportunity to the petitioner to raise all his contentions available to him under law - HELD THAT:- As seen from the impugned assessment order passed under Section 144 of the Income Tax Act, 1961, the petitioner has not participated in the said proceedings and the order is in the nature of ex parte assessment order. The grounds raised by the petitioner, namely, the cash amount deposited under the Pradhan Mantri Garib Kalyan Yojana Scheme, 2016, on 31.03.2017 has not been taken into consideration under the impugned assessment order. Contention of the petitioner that since he has has availed the benefit of Pradhan Mantri Garib Kalyan Yojana Scheme, 2016, the cash amount cannot be treated as an unexplained money unde....... + More
- 2020 (12) TMI 935 - BOMBAY HIGH COURT
Application u/s 132 (B) for release of 7kg of gold seized by the authorities - HELD THAT:- There is a dispute on the factual aspects of the matter regarding ownership of the seized gold, the varying versions of the parties pertaining to the vouchers on the basis of which Respondent No.5 was carrying the gold bullion when he was apprehended, examination of evidence, regarding source of the 8kg bullion, the genuineness of the transaction etc. We also observe from impugned order as also confirmed by Counsel for Respondent No.5 that the said Respondent has filed appeal against the assessment order and that the said appeal is pending before the Commissioner of Income Tax (Appeals). Copy of the memo of the said appeal in Form 35 dated 11th January, 2019 has also been placed before this Court. In view of the pendency of appeal of Respondent No.5....... + More
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