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S. 69C Bogus Purchases: Purchases cannot be treated as bogus merely on the basis of the statements and affidavits filed by the alleged vendors before the sales-tax department. The said statements cannot be relied upon without cross-examination of the parties. The fact that the parties did not respond to the s. 133(6) notices is not relevant if the assessee filed copies of purchase invoices, extracts of stock ledger showing entry/exit of materials, copies of bank statements to evidence that payments for these purchases were made through normal banking channels, etc to establish genuineness of the aforesaid purchases
ACIT vs. Mahesh K. Shah
(2017) TaxCorp(LJ) 12088 (ITAT-MUMBAI) · Section 69C
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Bogus purchases: A statement by the alleged vendor that the transactions with the assessee are only accommodation entries and that there are no sales or purchases cannot be relied upon by the AO unless the assessee is given the opportunity to cross-examine the vendor
CIT vs. Ashish International
(2017) TaxCorp(LJ) 12087 (HC-BOMBAY)
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S. 271(1)(c): Failure by the AO to specify in the s. 274 notice whether the penalty is being initiated for 'furnishing of inaccurate particulars of income' or for 'concealment of income' is fatal. It reflects non-application of mind and renders the levy of penalty invalid (Manjunatha Cotton 359 ITR 565 (Kar) followed)
CIT vs. Samson Perinchery
(2017) TaxCorp(LJ) 12079 (HC-BOMBAY) · Section 271(1)(c)
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S. 28/29: There is a distiction between "setting up of business" and "commencement of business". All expenditure after "setting up" is deductible business expenditure even if the business has not commenced. A business is "set up" when steps are taken to recruit employees and take premises etc
CIT vs. Axis Pvt. Equity Ltd
(2017) TaxCorp(LJ) 12078 (HC-BOMBAY) · Sections 28, 29
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S. 234C: Though levy of interest for deferment of advance-tax is mandatory and cause & justification for the deferment are irrelevant, the same is not leviable if the income was not predictable and the assessee could not have anticipated its receipt e.g. the receipt of a gift
Kumari Kumar Advani vs. ACIT
(2017) TaxCorp(LJ) 12077 (ITAT-MUMBAI) · Section 234C
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ITAT - Assessee had incurred expenditure of repair and renovations only to preserve and maintain the existing asset and that the expenditure was not of a nature which brought into being a new asset or created a new advantage of an enduring nature. The expenditure is revenue in nature.
M/s Sarang and Associates Versus Dy. Commissioner of Income Tax, Central Circle-36, Mumbai
(2017) TaxCorp(LJ) 12041 (ITAT-MUMBAI) · http://taxcorp.in/FileOpenDT.aspx?ID=54343&Category=ITAT&CategoryType=Zip
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ITAT - In case the nature of business, which indicates that it cannot be done solely by crossed cheque or bank draft and the payment is proven from bills and cash memos, exceptional circumstances could be inferred u/s.40A(3).
M/s Raj Wines, C/o P.N. Subramanian & Co. Versus ITO, Ward-4 (3), Thane
(2017) TaxCorp(LJ) 12040 (ITAT-MUMBAI) · http://taxcorp.in/FileOpenDT.aspx?ID=54346&Category=ITAT&CategoryType=Zip
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ITAT - To hold the transactions as mere accommodation entries and not real purchases is quite different from saying that the sources of expenditure for the purchases have not been explained in the context of Sec. 69C. No addition.
ITO, Ward-19 (2) (2), Mumbai Versus Shri Karsan Nandu and Vice-Versa
(2017) TaxCorp(LJ) 12039 (ITAT-MUMBAI) · http://taxcorp.in/FileOpenDT.aspx?ID=54337&Category=ITAT&CategoryType=Zip
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HC - Assessment u/s 144 without issuing notice was patently illegal.
M/s Wishwa Mittar Bajaj & Sons Versus Income Tax Officer -IV (4) Lucknow
(2017) TaxCorp(LJ) 12038 (HC-ALLAHABAD) · http://taxcorp.in/FileOpenDT.aspx?ID=68360&Category=Judgment&CategoryType=Zip
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S. 68 Bogus capital gains: A transaction cannot be treated as fraudulent if the assessee has furnished documentary proof and proved the identity of the purchasers and no discrepancy is found. The AO has to exercise his powers u/s 131 & 133(6) to verify the genuineness of the claim and cannot proceed on surmises
Pr. CIT. vs. Jatin Investment Pvt. Ltd.
(2017) TaxCorp(LJ) 12037 (HC-DELHI) · Section. 68
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Permanent Establishment: Entire law explained on whether the deputation of personnel by a foreign company to assist the Indian subsidiaries in negotiations, marketing etc leads to a “fixed place PE” or a “Dependant Agent PE” under Article 5 of the DTAA and if so, the manner in which the profits of the foreign company are attributable to operations in India
GE Energy Parts Inc vs. ADIT
(2017) TaxCorp(LJ) 12036 (ITAT-DELHI)
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HC - Profits earned by international airlines from providing technical services to other airlines is not taxable in India under DTAA.
Lufthansa German Airlines Vs. Director Of Income Tax
(2017) TaxCorp(LJ) 12035 (HC-DELHI)
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ITAT - The mere fact that written submissions were filed by the assessee, it cannot be so construed that the right to be heard was given up. Ex-parte assessment u/s 147 without rejection of objections raised by the assessee not valid.
Bhupinder Singh Versus ITO, Ward-58 (2) (Old Ward-36 (1), New Delhi
(2017) TaxCorp(LJ) 12034 (ITAT-DELHI) · http://taxcorp.in/FileOpenDT.aspx?ID=54328&Category=ITAT&CategoryType=Zip
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ITAT - AO levied the maximum penalty prescribed equal to 100% without recording any satisfaction u/s 221(1), CIT(A) was right in restricting penalty to 10% of the total tax payable.
DCIT-17 (2), Mumbai Versus Prashant R. Samdani and Vice-Versa
(2017) TaxCorp(LJ) 12033 (ITAT-MUMBAI) · http://taxcorp.in/FileOpenDT.aspx?ID=54329&Category=ITAT&CategoryType=Zip
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ITAT - Levy of penalty u/s 271(1)(c) on disallowance of expenses of foreign Travel and inter city travel not justified as revenue has not rejected the explanation and merely levied the penalty on the basis that the expenses are for non-business purposes.
Subhakam Stocks and Shares P. Ltd. Versus Income Tax Officer Ward 4 (2) (3), Mumbai
(2017) TaxCorp(LJ) 12032 (ITAT-MUMBAI) · http://taxcorp.in/FileOpenDT.aspx?ID=54331&Category=ITAT&CategoryType=Zip
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ITAT - Business loss cannot be treated at par with the expenses / allowances and such business loss can be set off against any type of income (u/s 69) as section 71 do not debar from setting off such losses.
ACIT Central Circle-13, Mumbai Versus M/s. Rahil Agencies
(2017) TaxCorp(LJ) 12031 (ITAT-MUMBAI) · http://taxcorp.in/FileOpenDT.aspx?ID=54333&Category=ITAT&CategoryType=Zip
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ITAT - Provision for leave salary encashment and gratuity allowed as the same was made on the basis of actuarial valuation done by actuary and are ascertained liabilities.
The Asst. Commissioner of Income Tax-8 (3), Mumbai Versus Sanofi Synthelabo (India) Ltd.
(2017) TaxCorp(LJ) 12030 (ITAT-MUMBAI) · http://taxcorp.in/FileOpenDT.aspx?ID=54334&Category=ITAT&CategoryType=Zip
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Bogus purchases: As a direct one to one relationship/nexus between the purchases and sales has not been established by the assessee, the purchases have to be treated as bogus and 12% of the purchase cost is assessable as profits (law on the subject noted)
Kiran Navin Doshi vs. ITO
(2017) TaxCorp(LJ) 12025 (ITAT-MUMBAI)
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S. 10(38): If the AO has accepted the claim for exemption for long-term capital gains and conceded that the assessee is an "investor", he cannot change his stand and treat the assessee as a "trader" in respect of the claim of short-term capital gains alone
ITO vs. Dilip B. Desai HUF
(2017) TaxCorp(LJ) 12024 (ITAT-KOLKATA) · Section 10(38)
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S. 10(37) Capital Gains: Meaning of "compulsory acquisition" under the Land Acquisition Act, 1894 explained. The fact that the assessee entered into a settlement with the Collector regarding the compensation amount does not mean that the acquisition was not "compulsory" if the prescribed procedure was followed. Info Park Kerala vs. ACIT (2008) 4 KLT 782 overruled
Balakrishnan vs. UOI
(2017) TaxCorp(LJ) 12023 (SC) · Section 10(37)
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