Case Law: Lally Motors India (P.) Ltd vs. PCIT (ITAT Amritsar)

Disallowance u/s 14A & Rule 8D has to be made even if the assessee has not earned any tax-free income on the investment. Cheminvest 378 ITR 33 (Del) is not binding on the AO as it is a non-jurisdictional High Court. CBDT’s Circular 5/2014 is in accordance with Godrej & Boyce Mfg. Co. Ltd 394 ITR 449 (SC) & Maxopp Investment Ltd 402 ITR 640 (SC) Read the rest of this entry »

Advertisements

Case Law: Mitchell Drilling India Private Limited vs. DCIT (ITAT Delhi)

Transfer Pricing: The “international transaction” as defined in s. 92F(v) has to be a genuine transaction. Transfer pricing provisions do not apply to non-genuine or sham transactions

It is elementary that the ALP is determined of an `international transaction’, which has been defined in section 92B of the Act. The term `transaction’, for the purposes of the Chapter–X containing transfer pricing provisions, has been defined in clause (v) of section 92F to include an arrangement, understanding or action in concert. It shows that the ALP is always determined of an international transaction, which is genuine, but may be formal or in writing and whether or not intended to be enforceable by legal proceeding. If a transaction itself is not genuine, there can be no question of applying the transfer pricing provisions to it. In such an eventuality of a supposed genuine transaction turning out to be non-genuine, all the consequences which would have flowed for a real transaction, are reversed. In other words, certain deductions which would have been otherwise allowed in case of a genuine international transaction, are denied. Nitty-gritty of the matter is that only a declared and accepted genuine international transaction can be subjected to the transfer pricing regulations. If an international transaction is proved to be not genuine, the transfer pricing provisions are not triggered Read the rest of this entry »

Case Law: Pr CIT vs. Grasim Industries Ltd (Bombay High Court)

The CBDT should reconsider the practice of appointing retired revenue officers as panel counsel. While the retired officials have domain expertise and do render assistance, they lack the skill and conduct required to appear as an Advocate. They also lack the objectivity expected from officers of the court. The CBDT could consider holding of a training programme, where leading Advocates could address the domain expert on the ethics, obligation and standard expected of Advocates before they start representing the State. The CBDT should lay down a standard procedure in respect of manner in which the Departmental Officer/ Assessing Officer assist the Counsel for the Revenue while promoting/ protecting Revenue’s cause so that the Revenue’s Counsel are not left to fend for themselves

We have for a long time, taken into account that many of these are fresh entrants to the bar and in due course, would learn the standard expected of an Advocate. However, to our disappointment, many of them are refusing to learn. Therefore, the CBDT could consider holding of a training programme, where leading Advocates could address the domainexpert on the ethics, obligation and standard expected of Advocates before they start representing the State. This is only a suggestion and it is entirely for the CBDT to take appropriate steps to ensure that the Revenue is properly represented to serve the greater cause of justice and fair play. In any case, we would expect the CBDT to lay down a standard procedure in respect of manner in which the Departmental Officer/ Assessing Officer assist the Counsel for the Revenue while promoting/ protecting Revenue’s cause. We find in most cases, atleast during the final hearing, Revenue’s Counsel are left to fend for themselves and that even papers at times are borrowed from the other side or taken from the Court Records. If the mind set of the Revenue Officer changes and they attend to the case diligently till it is disposed of, only then would it be ensured that the State is properly represented Read the rest of this entry »

HAPPY HOLI

images

Case Law: Abicor and Binzel Technoweld Pvt. Ltd vs. UOI (Bombay High Court)

GST Network: The regime is not tax friendly. GST was highly publicised and termed as popular but there has been great hue and cry because assessees are unable to obtain access to the GST website. Those in charge of implementation and administration must wake up and put in place the requisite mechanism to preserve the image, prestige and reputation of this country, particularly when we are inviting and welcoming foreign investment in the State and the country

We do not think that these are satisfactory state of affairs. A tax like Goods and Services Tax was highly publicised and termed as popular. We had yet not seen a celebration of New Tax regime, but that has followed with great hue and cry. These celebrations mean nothing. The special sessions of Parliament or special or extraordinary meetings of Council would mean nothing to the assessees unless they obtain easy access to the website and portals. The regime is not tax friendly. We hope and trust that those in charge of implementation and administration of this law will at least now wake up and put in place the requisite mechanism. This is necessary to preserve the image, prestige and reputation of this country, particularly when we are inviting and welcoming foreign investment in the State and the country. We hope and trust that such petitions are rarity and the Court will not be called upon to administer the implementation of the law, leave alone monitoring and supervising the working of the individual officials, howsoever high ranking he may be Read the rest of this entry »

Case Law: Seema Sabharwal vs. ITO (ITAT Chandigarh)

S. 54: If agreement for purchase of new residential house is made and entire purchase price is paid within three years from the date of transfer of the old asset, exemption u/s 54 is available. It is not required that the house must be completed within 3 years. The requirement in s. 54(2) that the capital gains should be deposited in the CGAS scheme is merely an enabling provision. If the assessee shows during assessment proceedings that the capital gains have been reinvested in the new residential house, exemption cannot be denied merely the amount was not deposited in the CGAS

If the assessee at the time of assessment proceedings, proves that he has already invested the capital gains on the purchase / construction of the new residential house within the stipulated period, the benefit under the substantive provisions of section 54(1) cannot be denied to the assessee. Any different or otherwise strict construction of sub section (2), in our view, will defeat the very purpose and object of the exemption provisions of section 54 of the Act Read the rest of this entry »

Case Law: Pr CIT vs. Shree Gopal Housing & Plantation Corporation (Bombay High Court)

S. 271(1)(c) Penalty: The law in Nayan Builders 368 ITR 722 (Bom) does not mean as a matter of rule that in case where the High Court admits an appeal relating to quantum proceedings ipso facto i.e. without anything more, the penalty order gets vitiated. The question of entertaining an appeal from an order imposing / deleting penalty would have to be decided on a case to case basis. There can be no universal rule to the effect that no penalty can be levied if quantum appeal is admitted on a substantial question of law

Each appeal in respect of the order deleting / imposing a penalty by the Tribunal would have to be considered in relation to the facts arising therein and also in the quantum proceedings. It cannot be said as a matter of rule that in case where this Court admits an appeal relating to quantum proceedings ipso facto i.e. without anything more, the penalty order get vitiated. Thus, the question of entertaining an appeal from an order imposing / deleting penalty would have to be decided on a case to case basis. There can be no universal rule to the effect that no penalty, if quantum appeal is admitted on a substantial question of law Read the rest of this entry »