10- 01 -2019 - Views: 225

Reported Judicial Decisions- Vol-161

Reported Judicial Decisions


CA. P.M.Veeramani FCA

Statute: Income Tax Act – Sec.9, 44B – Inland Haulage Charges

Decision in favour of : Assessee

Title  : Delmas SAS vs DCIT

Citation: 171 ITD 373

Bench: ITAT Mumbai

Inland Haulage Charges being part of income derived from operation of ship in international traffic is exempt under article 9 of the India – France DTAA and hence not taxable in India

Statute: Income Tax Act – Sec.10B – Garbling of Pepper

Decision in favour of : Revenue

Title  : Nishant Export  vs ACIT

Citation: 168 DTR 157

Bench: Kerala HC

Conversion of garbled pepper into fit for human consumption did not constitute manufacture or production , hence not eligible for exemption under section 10B

Statute: Income Tax Act – Sec.35(1)(ii) – Retrospective Cancellation

Decision in favour of : Assessee

Title  : P.R.Rolling Mills Private Ltd  vs DCIT

Citation: 171 ITD 683

Bench: ITAT Jaipur

Research Institution enjoying approval as on the date of receipt of donation from assesse company, on retrospective cancellation of approval of the concerned institution, weighted deduction claimed by assesse in respect of donation cannot be denied

Statute: Income Tax Act – Sec.35AD – Certificate has retrospective effect

Decision in favour of : Assessee

Title  : ACIT  vs  River View Hotels

Citation: 171 ITD 404

Bench: ITAT Ahmedabad

Once the assesse, engaged in hotel business, was granted certificate for catergorisation of its hotel as three star, entire capital expenditure incurred in respect of the hotel was to be allowed as deduction , even if such capital expenditure was incurred prior to the date of issue of certificate

Statute: Income Tax Act – Sec.54F, 50C – Eligible for deduction

Decision in favour of : Assessee

Title  : ITO  vs  Raj Kumar Parashar

Citation: 169 DTR Trib 142

Bench: ITAT Jaipur

Assessee having invested the whole of sale consideration of the property in capital gains account scheme for the purchase of the new house property, the provisons of section 54F(1)(a) stood satisfied and therefore, assesse is eligible for deduction of whole of the capital gains irrespective of the deemed consideration as determined under section 50C

Statute: Income Tax Act – Sec.56(2)(viib) vs 68 – Share premium

Decision in favour of : Revenue

Title  : Sunrise Academy of Medical Speciliaties India Private Ltd   vs  ITO

Citation: 169 DTR Ker 65

Bench: Kerala HC

Any premium received by a company on the sale of shares in excess of face value, if the company is not one in which the public has substantial interest, would be treated as income from other sources under section 56(2)(viib). This section is not controlled by the provisions of section 68; if section 68 is applicable and the proviso is not satisfied, then the entire amount credited in the books would be treated as income

Statute: Income Tax Act – Sec.90 – DTAA – Form w9 is not certificate

Decision in favour of : Revenue

Title  : Skaps Industries India Private Ltd  vs  ITO

Citation: 171 ITD 723

Bench: ITAT Ahmedabad

Form W9 under US law is given for providing correct TIN to person who is required to file an information return with IRS. It is wholly irrelevant outside United States as it is a mere declaration by an entity and not a certificate by US authority. For claiming tax benefit US Residency certificate has to be furnished.


Statute: Income Tax Act – Sec.90 – DTAA – Automated Machine is also PE

Decision in favour of : Revenue

Title  : Mastercard Asia Pacific  Pte Ltd , Singapore  In re

Citation: 406 ITR 43

Bench: Authority of Advance Rulings

Tax was required to be withheld at source at the full applicable rate at which the non-resident was subjected to tax in India. However, all the revenues received by the applicant from customers in India would not be attributed to the Indian permanent establishment since significant activities were also carried out by the applicant outside India. There was a need for attribution to be done by the Assessing Officer. On such attribution of income to the permanent establishment, the tax was required to be withheld at full applicable rate at which the non-resident is subjected to tax in India.

Even automatic equipment like server can also create a permanent establishment and there was no requirement of human intervention.

Statute: Income Tax Act – Sec.139(5) – Revised return after 143(2)

Decision in favour of : Assessee

Title  : Mahesh H Hinduja  vs  ITO

Citation: 171 ITD 471

Bench: ITAT Mumbai

There is no bar / restriction in provisions of section 139(5) that assesse cannot file a revised return after issuance of notice under section 143(2); AO cannot reject claim for deduction under section 54 raised in revised return on the ground that said return was filed after issuance of 143(2) notice

Statute: Income Tax Act – Sec.144C – Draft order mandatory in remand

Decision in favour of : Assessee

Title  : Dimension Data Asia Pacific Pte Ltd  vs DCIT

Citation: 169 DTR 145

Bench: Mumbai HC

AO is obliged to pass draft assessment order even in remand proceedings by the tribunal since order of Tribunal results in returned income being varied; then the procedure of passing draft assessment order under 144C (1) is mandatory and has to be complied with, which has not been done; impugned order is quashed and set aside

Statute: Income tax Act – Se.220(6) – Payment of 20% of demand

Decision in favour of : Assessee

Title  : Principal CIT vs LG Electronics India Private Ltd

Citation: 168 DTR 353 SC

Bench: Supreme Court of India

It is open to the authorities , on the facts of individuals cases, to grant stay against recovery of demand on deposit of a lesser amount than 20% of disputed demand pending disposal of appeal

Statute: Income Tax Act – Sec.254 – ITAT has no power to enhance

Decision in favour of : Assessee

Title  : Sanmar Speciality  Chemicals Ltd vs ITO

Citation: 168 DTR 342

Bench: Madras HC

Tribunal was not authorized to take back the benefit granted to assesse by the AO and the Tribunal has no power to enhance the assessment either in appeal or in remand . Decision of 309 ITR 434 SC followed

Statute: Income Tax Act – Sec.271(1)(c ) – No Penalty for incorrect claim

Decision in favour of : Assessee

Title  : Principal CIT vs  Smatel India Ltd

Citation: 168 DTR 322

Bench: Delhi HC

AO disallowed writing off of capital work in progress as revenue loss and levied penalty for making wrong claim . Assessee cannot be penalized for making a claim which in itself is unsustainable in law. Legislature does not intend to penalize every person whose claim is disallowed.

Statute: Income Tax Act – Sec.281 – TRO has no power

Decision in favour of : Assessee

Title  : Nitaben Harishbhai Shah  vs  TRO

Citation: 406 ITR 347

Bench: Gujarat HC

Section 281 hold certain transfers void. However, section does not empower TRO to declare a transfer as void and the status of the Department being that of a creditor , it will have file a suit for a declaration that the transaction of transfer is void.  Section does not create machinery for the Revenue to entertain disputes and declare transaction to be void , for which only a civil suit will lie

Statute: Income Tax Act – Sec.292BB – Failure to issue notice is not curable

Decision in favour of : Assessee

Title  : Principal CIT  vs  Oberoi Hotels Private Ltd

Citation: 169 DTR 179

Bench: Calcutta HC

Implicit in the wording of section 143(3) is the indispensability of a notice under section 143(2) thereof. Section 292BB must be understood to cure any defect in the service of the notice and not authorize the dispensation of a notice when the appropriate interpretation of a provision makes the notice provided for thereunder to be mandatory or indispensable

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