Reported Judicial Decisions - Direct Tax
Statute: Income Tax Act
Sec.10(4)(ii) – Interest on NRE account
Decision in favour of : Revenue
Title : Baba Shankar Rajesh vs ACIT
Citation: 180 ITD 160
Bench: ITAT Chennai
Where assesse who was a non-resident earlier, stayed in India for relevant financial year for 283 days for taking up employment, he would become resident in India as per FEMA: thus he would not be entitled to exemption u/s 10(4)(ii) on the interest in his NRE deposits
Statute: Income Tax Act
Sec.11 – Facilities hired from corporates
Decision in favour of : Assessee
Title : Devki Devi Foundation vs DIT (E)
Citation: 180 ITD 417
Bench: ITAT Delhi
Charitable trust having retained control and supervision of hospital run by it, entering into agreement for availing services of corporates for running hospital does not disentitle from exemption under section 11 or face cancellation under 12AA(3)
Statute: Income Tax Act
Sec.40b – Allowable when profit estimated
Decision in favour of : Assessee
Title : Mayasheel Construction vs DCIT
Citation: 77 ITR Trib SN 8
Bench: ITAT Delhi
Interest and remuneration to working partners is allowable as deduction even after estimation of net profit of the frim as a percentage of gross receipts
Statute: Income Tax Act
Sec.46A – Capital gain on buy back
Decision in favour of : Revenue
Title : Acciona Wind Energy Private Ltd vs DCIT
Citation: 185 DTR Trib 280
Bench: ITAT Bangalore
Section 45 and 46A operate in different fields. Sec.45 is applicable regarding transfer of a capital asset whereas section 46A is applicable in respect of consideration from any company for purchase of its own shares. Since there is no requirement in section 46A that there has to be a transfer of shares, section 47(iv) is not applicable in connection with the issue covered by section 46A. Further the there are two shareholders in the company, one being its parent and the other another associate concern and such associate concern is not holding the share as nominee of parent company and hence the claim that it is a wholly owned subsidiary is not acceptable.
Statute: Income Tax Act
Sec.73 – No distinction for delivery based
Decision in favour of : Assessee
Title : Lohia Securities Ltd vs DCIT
Citation: 180 ITD 1 TM
Bench: ITAT Kolkatta
Where assesse , a sharing broking company, treated entire activity of purchase and sale of shares, which comprised of both delivery based and non-delivery based trading as one composite business and accordingly claimed set of loss incurred in delivery based trading against profit derived from derivative trading, same was to be allowed
Statute: Income Tax Act
Sec.80G(5) – Approval cannot be denied
Decision in favour of : Assessee
Title : Sabtera Foundation vs CIT (E )
Citation: 77 ITR Trib 296
Bench: ITAT Chandigarh
Approval cannot be denied only for the reason that the trust was formed by another company for complying with the CSR requirements especially because registration u/s 12A was already granted and no doubt raised about charitable objects of the assesse or fulfillment of conditions for 80G approval
Statute: Income Tax Act
Sec.143(2) – Notice by affixture
Decision in favour of : Assessee
Title : Tourism India Management Enterprises Private Ltd vs DCIT
Citation: 77 ITR Trib 311
Bench: ITAT Delhi
Notice by way of affixation was only to be served when the correct address was not available or the assesse had refused to accept the service of notice. Since notice was never issued to the correct address, affixation will not be valid and consequently assessment framed u/s 143(3) was void ab initio
Statute: Income Tax Act
Sec.194 H – Credit card commission
Decision in favour of : Assessee
Title : PCIT vs Hotel Leela Venture Ltd
Citation: 420 IR 385
Bench: Bombay HC
Charges collected by bank for providing credit card services at the establishment did not amount of commission warranting TDS under section 194 H. No disallowance attracted
Statute: Income Tax Act
Sec.194 I – Lounge services at airport
Decision in favour of : Assessee
Title : CIT vs Jet Airways India Ltd
Citation: 420 ITR 399
Bench: Bombay HC
Payment made by airline company for use of airport lounge facilities by its customers while in transit does not fall within the meaning of rent attracting TDS under section 194 I since such premises was not in the exclusive usage of the assesse or its customers . However the same could fall under the section 194 C which the assesse has complied with
Statute: Income Tax Act
Sec.251(1)(a) – CIT(A) has to dispose appeal on merits only
Decision in favour of : Asseessee
Title : Deekay Gears vs ACIT
Citation: 77 ITR Trib 150
Bench: ITAT Mumbai
Even when the assesse has filed application for withdrawal of appeal, CIT(A) has to consider the appeal and dispose on merits. CIT(A) not justified in dismissing appeal in limine based on assesse application
Statute: Income Tax Act
Sec.263 – Failure to convert limited scrutiny
Decision in favour of : Revenue
Title : Baby Memorial Hospital Ltd vs ACIT
Citation: 77 ITR Trib Coch 484
Bench: ITAT Cochin
Even in cases of limited scrutiny, AO is duty bound to make prima facie enquiry as to whether there is any other item which requires examination and in the assessment, the potential escapement of income thereof exceeded Rs.10 lakhs. AO having failed to convert limited scrutiny into a complete scrutiny, is an erroneous order calling for revision under section 263.
Statute: Income Tax Act
Sec.271(1)(c ) – Income declared in survey
Decision in favour of : Assessee
Title : PCIT vs Shree sai Developers
Citation: 186 DTR 105
Bench: Gujarat HC
Assessee having declared undisclosed income during survey filed return including such and said return accepted by AO in assessment u/s 143(3), there is no filing of inaccurate particulars attracting penalty
Statute: Income Tax Act
Sec.271G – No penalty when no specific defect
Decision in favour of : Assessee
Title : Procter & Gamble Home Products (P) Ltd vs DCIT
Citation: 180 ITD 194
Bench: ITATMumbai
TPO levy of penalty stating that sufficient documents prescribed under rule 10D was not maintained by the assesse but the notice did not mention any specific document / record which was not maintained. Unless and until a specific defect is pointed out in the documents, penalty could not be levied
Statute: Income Tax Act
Sec.276C,277-No action when quantum of penalty is reduced
Decision in favour of : Assessee
Title : K M Mammen vs DGIT
Citation: 186 DTR 78
Bench: Madras HC
Once penalty for concealment stood reduced by CIT(A), section 279(1A) applied and prosecution under 276 C and 277 could not be launched.