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TMI Updates - Newsletter dated: January 20, 2018



  1. Income Tax : Conduct of the Income Tax officials - First raising unsustainable, illegal and high pitched demands and then seeking to coercively recover the same even showing scant regard to the orders passed by highest Tribunal under the Act and for that invoking the writ jurisdiction to seek support to their such effort is nothing but an utterly irresponsible and unfair behaviour. - HC

  2. Income Tax : Taxation of profits arisen on handing over of possession of development rights together with land in terms of the shareholders agreement - The benefits represent, at best, a hypothetical income which may or may not materialise and its money value is, therefore, not the income of the assessee. - Tri

  3. Income Tax : Penalty u/s 271(1)(c) - whether the assessee’s application of the TNMM in the given circumstances, can be considered as done in good faith and with due diligence? - Held Yes - No penalty - Tri

  4. Income Tax : TDS liability u/s 195 - Income of non-resident agents cannot be considered to accrue or arise or deemed to be received in India when the services rendered by the non-residents and the agents were outside India and the commission was also payable or paid to them outside India. - Tri

  5. Income Tax : MAT computation - amount disallowed under Sec. 14A cannot be added to arrive at the book profit for the purposes of Sec. 115JB - Tri

  6. Companies Law : Removal of the company from the Register of Companies - Condonation of Delay Scheme-2018 eligibility - HC allows the appellant to comply with the conditions and formalities to avail the benefit of CODS-2018 Scheme.

  7. Companies Law : Composition of certain offences - Even otherwise, the appellant has been able to place on record sufficient facts to prima facie justify as to why the delay took place in conveying the AGM and subsequent filing of the necessary documents before the ROC. In my opinion, it is a fit case where company law board ought to have allowed the petition under section 621A for compounding. - HC

  8. Central Excise : CENVAT credit - input sold as such - there is no provision for reversal of credit of service tax on return of goods - Tri



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Case Laws:

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  1. 2018 (1) TMI 895

    Computation of House Property Income - determining letting value as per provisions of Section 23(1) (a) in place of provisions of 23(1)(c) - CIT(A)) confirming the addition of deemed gross rent as against the actual casual gross rent received during the short period - Held that - In case of a property which remained vacant for a part of the year, then Annual Letting Value (ALV) shall be deemed to be the actual rent received by the assessee in cas....... + More

  2. 2018 (1) TMI 896

    Penalty u/s 271(1)(c) - Held that - Undisputedly, no penalty proceedings have been initiated by the AO during the course of assessment proceedings. During the appellate proceedings, the ld CIT(A) has enhanced the income of the assessee and satisfaction has been recorded to initiate the penalty proceedings in relation to such enhancement of income by issuance of notice u/s 274 of the Act. The Coordinate Bench in the quantum proceedings, as we have....... + More

  3. 2018 (1) TMI 892

    Revenue recognized from the project - Method of accounting followed - Held that - In the present case, the assessee is following Mercantile system of accounting therefore, the assessee was required to disclose the profit which accrued corresponding to the part of the work of the project executed by the assessee. BR BR AO was required to examine the agreement to sale for units and record whether any specified area of plot of land was allocated to ....... + More

  4. 2018 (1) TMI 893

    Revision u/s 263 - whether twin conditions viz. erroneous and prejudicial to the interest of the revenue as envisaged by the provisions of Section 263 are, prima-facie, fulfilled or not? - Held that - The perusal of the quantum order reveals that AO has nowhere discussed the allowability / admissibility of the six items as enumerated by Ld. CIT in the show-cause notice - CIT, after perusal of Tax Audit Report, noted that these items were required....... + More

  5. 2018 (1) TMI 894

    Penalty u/s 271(1)(c) - defective notice - Held that - The show cause notice issued in the present case u/s 274 of the Act does not specify the charge against the assessee as to whether it is for concealing particulars of income or furnishing inaccurate particulars of income. The show cause notice u/s 274 does not strike out the inappropriate words. We are of the view that imposition of penalty cannot be sustained. The plea of the the assessee wh....... + More

  6. 2018 (1) TMI 891

    Reopening of assessment - reasons to believe - Held that - On this issue with the newly introduced Explanation-3 to Section 147 of the Act, with retrospective effect from 01.04.1989, where some courts held that the AO has to restrict the reassessment proceedings only to the issue in respect of which reasons have been recorded for reopening the assessment, and that it is not open to him to touch upon any other issue for which no reasons have been ....... + More

  7. 2018 (1) TMI 890

    Addition on account of income from house property - Held that - There is no basis or evidence on record to estimate the rental income as done by the AO. In the result, addition so made by the AO is clearly on an adhoc basis and cannot be sustained in the eyes of law and the same are hereby deleted. In the result, ground of appeal is allowed. BR BR Addition on account of commission & brokerage - Held that - There is no basis or evidence on rec....... + More

  8. 2018 (1) TMI 888

    Capital gains - transfer u/s 2(47) - Taxation of profits arisen on handing over of possession of development rights together with land in terms of the shareholders agreement - Legal transfer given u/s 2(47)(v) - income accrued to assessee - Held that - Even if it is assumed that the assessee was entitled to the benefits under the advance licences as well as under the duty entitlement passbook, there was no corresponding liability on the Customs A....... + More

  9. 2018 (1) TMI 889

    Levy of penalty u/s 271(1)(c) - disallowing claim of depreciation on know-how, patents and trademarks - Held that - The Tribunal in assessee s own case 2018 (1) TMI 12 - ITAT PUNE as of the view that slump price had to be bifurcated over the cost of tangible assets and balance consideration has to be attributed to goodwill, know-how, patents and trademarks. The Tribunal after taking into consideration the factual and legal aspects of the case and....... + More

  10. 2018 (1) TMI 885

    Transfer pricing addition in respect of Software development segment - comparability analysis - Held that - Assessee is engaged in development, testing and maintenance of internal company software in respect of testing infrastructure capability and of specified data to be used by its A.E., thus companies functionally dissimilar with that of assessee need to be deselected from final list. BR BR Penalty u/s 271(1)(c) - whether the assessee s applic....... + More

  11. 2018 (1) TMI 886

    Penalty U/s 271B - assessee failed to keep its account audited - Held that - As AR submitted that a consolidated audit of all the shops to whom license was granted by the Excise department, was carried out at Udaipur by the Chartered Accountant and a consolidated audit report was furnished by him in the name of AOP M/s Umrao Singh & Party (Kota Bundi) group, Udaipur and the consolidated audit report was prepared after taking into account all ....... + More

  12. 2018 (1) TMI 887

    Addition on account of direct expenses by invoking provisions of section 145(3) - Held that - We find force in the submission of the assessee that when rejection of books of account by the Assessing officer u/s.145(3) is not sustained by the CIT(A), there is no ground to estimate the income by the Assessing Officer. - Decided in favour of assessee....... + More

  13. 2018 (1) TMI 882

    Writing off the inventory acquired by the assessee on amalgamation - Method of valuation of inventory at lower of cost or net realizable value - disallowing deduction being difference between cost and net realizable value of certain inventory items - AO further adding the said amount to the book profits u/s 115JB by wrongly concluding it as provision for diminution in value of asset - Held that - The assessee had demonstrated at length the specif....... + More

  14. 2018 (1) TMI 883

    Rectification under Sec. 254(2) - Held that - The non-consideration of the CBDT Circular No. 789, dated 13th April, 2000 in the backdrop of the judgment in the case of Azadi Bachao Andolan Vs. DCIT (2003 (10) TMI 5 - SUPREME Court) and that in the case of DIT Vs. Universal International Music B.V. (2013 (4) TMI 641 - BOMBAY HIGH COURT) without confronting the same to the assessee at the time of hearing of the appeal, had thus to the said extent r....... + More

  15. 2018 (1) TMI 884

    Disallowance u/s 40(a)(i) - commission paid to non-resident commission agents by the assessee - non deduction of tds - PE in India existence - income accrued in India - Held that - Commission was paid for services provided to the assessee out of India which was remitted directly outside India and was not received by them or on their behalf by any third party. It is also a matter of record that the assessee has furnished Form 15CA in terms of Rule....... + More

  16. 2018 (1) TMI 897

    Stay against the recovery of the demand - dogged approach of the Revenue to multiply the litigations in the Constitutional Courts- Held that - The entire demand raised by the authorities below prima facie was not even sustainable when once the controversy was apparently covered by the decision of the Delhi High Court and also the Bench of the Tribunal itself at Bengaluru, in favour of assessee. Therefore, the grant of absolute stay against the re....... + More

  17. 2018 (1) TMI 898

    Registration under Section 12A denied - as contended by the Revenue that the assessee provides services for which it charges users on a commercial basis and therefore, cannot fall within the charitable object, for which it was established - Held that - We notice that both the appellate authorities have concluded that the assessee s objects are charitable; it provides basic services by way of domain name registration, for which, it charges subscri....... + More

  18. 2018 (1) TMI 899

    Assessment of income from sale of plots - income from business or as capital gains - Held that - The impugned order of the Tribunal stands rectified/modified to the extent that the issue with regard to the applicability of Section 45(2) of the Act has been restored to the Assessing Officer for fresh consideration. We are informed by counsel for the parties that neither the Revenue nor the Assessee is aggrieved by the order dated 1 January 2018 pa....... + More

  19. 2018 (1) TMI 900

    Allowance of expenditure incurred towards restructuring of debenture and claim of depreciation on goodwill - revenue or capital expenditure - Held that - This issue arising herein stands concluded in favour of the Respondent-Assessee and against the Appellant-Revenue by the decision of this Court in CIT Vs. M/s. Aditya Birla Nuvo Ltd. (2017 (3) TMI 876 - BOMBAY HIGH COURT). BR BR Head Office expenses cannot be allocated to profits derived from 10....... + More

  20. 2018 (1) TMI 881

    Disallowance of interest expenditure - sufficient funds of its own for making the investments - Held that - Notably, major part of the interest free loans are continuing from the preceding assessment years and only an amount of ₹ 10,00,000/ has been advanced to one person in the impugned assessment year. It is also established on record that the assessee was having huge interest free fund available with it not only take care of the interest....... + More

  21. 2018 (1) TMI 880

    Principles of Natural Justice - stand of the department is that certain documents are not available, the rest are already on record - Held that - If the case of the petitioners is that they are in possession of copies of any of the additional documents, though the department contends that the same are not available, it would be open for the petitioners to produce the same before the adjudicating authority. BR BR The adjudicating authority shall p....... + More

  22. 2018 (1) TMI 879

    Interpretation of Statute - offence report as used in Regulation 20(1) of 2013 Regulations - time limit for issuance of Offence Report - suspension of CHA License - Held that - the suspension order dated 31.03.2017 was based upon the offence report, and therefore the show cause notice under Regulation 20, dated 14.07.2017, would be clearly barred by the limitation as it was issued more than 90 days after the offence report was submitted. BR BR Th....... + More

  23. 2018 (1) TMI 878

    Forfeiture of CHA License - revocation of security deposit - penalty - time limitation of Inquiry Report - back dated inquiry report - Held that - the Inquiry Officer had submitted his report dated 14th November, 2017, before the restraint order was passed on 17th November, 2017. This report was served on the petitioner on 23rd November, 2017 vide communication posted on 22nd November, 2017 - The counter affidavit thus accepts and admits that the....... + More

  24. 2018 (1) TMI 877

    Removal of the company from the Register of Companies - Condonation of Delay Scheme-2018 eligibility - Held that - The request of the petitioners made before us is bonafide. Given the fact that the action of the respondents for striking off the name of the company from the Register of Companies maintained by the respondent no.2 is itself pending consideration before the NCLT, the petitioners deserve to be fairly given an opportunity to avail the ....... + More

  25. 2018 (1) TMI 876

    Disregard to the law and the principles of natural justice by NCLT - application seeking initiation of contempt proceedings - not framing the formal charge or not communicating in any manner the gravamen of the allegations on which the petitioners are to answer the charge of contempt - Held that - Undoubtedly, after the facts have been gathered and process initiated and particularly in the event of cognizance eventually being taken of contempt un....... + More

  26. 2018 (1) TMI 875

    Composition of certain offences - Held that - There are no reasons as to why the matter should not have been compounded. Merely because the court did not compound the matter cannot be a ground for the CLB to not compound the offence. BR BR As in the case filed by Shri Shubhinder Singh Prem 2018 (1) TMI 830 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI that ROC appears to have taken a stand that it has no objection to compounding of the off....... + More

  27. 2018 (1) TMI 874

    Winding up petition - quantification of debt - Held that - The debt in the present case is undisputed. Only dispute is of quantification. Keeping in view the undisputed facts that there are confirmed dues payable to the petitioner company I admit the present petition. The Official Liquidator attached to this court is appointed as the Provisional Liquidator. He is directed to take over all the assets, books of accounts and records of the responden....... + More

  28. 2018 (1) TMI 873

    Non-accounting of the insurance amount - non-submission of the Statement of Accounts, from the date of Original Application within 15 days of the order of the Appellate Tribunal - Action of DRAT, Chennai in directing DRT, Bangalore, to dismiss original application, for non-submission of statement of accounts to the Tribunal - Procedure to be followed by the Tribunal, when application is filed - jurisdiction conferred on the Debts Recovery Tribuna....... + More

  29. 2018 (1) TMI 906

    Corporate insolvency process - existence of dispute - Held that - In the present case, we find that there is an existence of dispute and a notice of dispute has been received by the Operational Creditor . In the aforesaid background the Adjudicating Authority rightly rejected the application filed by the appellant under Section 9 of the I & B Code........ + More

  30. 2018 (1) TMI 872

    Maintainability of petition - requirement of pre-deposit - Held that - entire service tax payable on reverse charge basis on the commission paid to the agents, has been paid. The said position is admitted and accepted by the respondents and is also not challenged and contested in the order-in-original. The contention of the respondent is that the petitioner must also pay in addition and over and above 12% service tax, the amount received from the....... + More

  31. 2018 (1) TMI 871

    Clandestine removal - chewing tobacco - compounding scheme - Held that - The appellant is not availing the compounding scheme at the time of manufacture of chewing tobacco. So, the appellant was not paying any duty - it is evident that the appellant was manufacturing the chewing tobacco without paying any duty in the clandestine manner. When it is so, then then there is no reason to interfere with the impugned order. BR BR Matter remanded to the ....... + More

  32. 2018 (1) TMI 869

    CENVAT credit - capital goods - Concrete Sleeper - Held that - the Tribunal in a recent decision in the case of Ultratech Cement Limited Vs. Commissioner of Customs & Central Excise 2016 (9) TMI 284 - CESTAT HYDERABAD on an identical situation allowed the credit on Mono Block Concrete Sleeper for Railway track - also, Hon ble Supreme Court in the case of JayaswalNcco Limited Vs. Commissioner of Central Excise, Raipur 2015 (4) TMI 569 - SUPREM....... + More

  33. 2018 (1) TMI 870

    CENVAT credit - input sold as such - GTA service in respect of Raw Petroleum Coke (RPC) - whether Service Tax credit paid on GTA on the said input is to be reversed as the Input had been sold as such instead of using it in the manufacture of final product? - Held that - The Hon ble Punjab & Haryana High Court in the case of Commissioner of Central Excise, Chandigarh-I Vs. Punjab Steels 2010 (7) TMI 252 - PUNJAB AND HARYANA HIGH COURT , reject....... + More

  34. 2018 (1) TMI 868

    Suo motu proceedings for revision - time limitation - interpretation of statute - Section 23(4)(a) of O.S.T.Act read with Rule 80 of the O.S.T.Rules - whether under Rule 80 of the Rules, revisional proceedings are to be concluded from the date of passing of the final orders passed within a period of three years sought to be revised or the proceedings if initiated within three years can be concluded beyond the period of three years? BR BR Held tha....... + More

  35. 2018 (1) TMI 867

    Principles of Natural Justice - petitioner has stated in the petition that an application for rectification of the mistake which is apparent according to her on the face of the record was not entertained. The rectification application is dated 14th July 2017 - The grievance is that the Appellate Authority as well in a short, cryptic and virtually unreasoned order dismissed the petitioner s appeal. BR BR Held that - Since the rectification applica....... + More

  36. 2018 (1) TMI 866

    Validity of assessment order - TNGST Act - penalty u/s 16(2) of the Act - grievance of the appellant / writ petitioner is that despite the fact of seizing of C.P.U. by the Central Excise Department and without giving any personal hearing or opportunity, the assessment order, dated 16.03.2009, was made by the respondent - Held that - The assessment order was issued on 27.02.2004. The pre-revision notice was issued on 28.02.2006 for which the petit....... + More

  37. 2018 (1) TMI 865

    Validity of assessment order - principles of Natural Justice - works contract - case of petitioner is that the third respondent did not afford an opportunity of personal hearing, though the revision of assessment has been done under Section 27 of the said Act - Held that - Courts have held that an opportunity of personal hearing is mandatory when revision of assessment is sought to be done under Section 27 of the said Act - In the instant case, a....... + More

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