"18 May 2012" Archive

In case of closed business Assessee must establish his intention and seriousness in reviving the business

JCIT Vs. Good Value Marketing Co.Ltd. (ITAT Mumbai)

The facts emerging out of the assessment order are that the assessee is dealing in organic manure. For the year under consideration, the return of income declaring the total income of Rs.13,50,000/- was efiled on 30.10.2007. This case was selected for scrutiny assessment and accordingly notices u/s.143(2) and 142(1) of the Act were issued...

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Anti Dumping Duty on Zinc Oxide – Notification No. 27/2012-Customs (ADD)

Notification No. 27/2012-Customs (ADD) (18/05/2012)

Notification No. 27/2012-Customs (ADD) Whereas, the designated authority vide notification No. 15/14/2011-DGAD, dated the 2nd May, 2012, published in Part I, Section 1 of the Gazette of India, Extraordinary, dated the 2nd May, 2012, had initiated review, in terms of sub-section (5) of section 9A of the Customs Tariff Act, 1975 (51 of 1975...

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Section 14A – Onus on AO to show expenditure incurred to earn tax-free income

Asstt. Commissioner of Income Tax Vs SIL Investment Ltd. (ITAT Delhi)

Disallowance u/s 14A required a finding of incurring of expenditure and where it was found that for earning exempted income, no expenditure had been incurred, disallowance u/s 14A could not stand. In the present case, as seen, the AO has not established any nexus whatsoever between the borrowed funds and the investment made. Therefore, He...

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HC Reverses Law on Supply of Reasons for Reopening – Need not be supplied within limitation period

A.G.Holdings Pvt Ltd Vs Income Tax Officer (Delhi High Court)

There is no requirement in Section 147 or Section 148 or Section 149 that the reasons recorded should also accompany the notice issued under Section 148. The requirement in Section 149(1) is only that the notice under Section 148 shall be issued. There is no requirement that it should also be served on the assessee before the period of li...

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HC dismisses Revenue Appeal for Non-Service of Notice of hearing

I.T.O. Vs. Rachana Constructions and Engineers & Contractors (ITAT Pune)

Hon'ble Supreme Court in the case of Para Laminates (P.) Ltd.'s held that the Tribunal is entitled to exercise all incidental and ancillary powers which are reasonably necessary for performing the adjudicative functions. Applying the aforesaid principles, it clearly follows that it was obligatory on the part of the I.T. authority to effec...

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Despite borrowing, gains on shares assessable as STCG & not business profits

Narendra Gehlaut Vs. JCIT (ITAT Delhi)

Coming to the revenue’s objection that the assessee borrowed the funds from Indiabulls Financial Services Ltd., in our view, this cannot constitute a factor as in none of the case laws or CBDT circular it has been held that borrowings will not be allowed in investment transactions. In our view the investment in capital assets also can b...

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Tests to determine where shares gain is capital gains or business profits

CIT Vs Vinay Mittal (Delhi High Court)

In the present case, the assessee is an employee and is in service of a company. He has salaried income. The assessee had also made purchases and had sold securities. He is maintaining two separate portfolios i.e. investment portfolio and trading portfolio. The Assessing Officer has admitted the said position in the assessment order....

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Section 14A & Rule 8D Disallowance Not Automatic

M/s. Auchtel Products Ltd Vs. Asst. Commr. of Income-tax (ITAT Mumbai)

The correct sequence, in our considered opinion, for making any disallowance u/s. 14A is to, firstly, examine the assessee’s claim of having incurred some expenditure or no expenditure in relation to exempt income. If the AO gets satisfied with the same, then there is no need to compute disallowance as per Rule 8D. It is only when the A...

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Despite concealment Penalty U/s. 271(1)(c) can not be imposed if book profits assessed U/s. 115JB

C.I.T Vs M/S Nalwa Sons Investment Ltd. (Supreme Court of India)

In the present case, the income computed as per the normal procedure was less than the income determined by legal fiction namely book profits under Section 115JB of the Act....

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Share Transactions Income – Capital Gain or Business Income – Criteria

CIT Vs Rewashanker A. Kothari (Delhi High Court)

Gujarat High Court in CIT vs. Rewashanker A. Kothari, (2006) 283 ITR 338 (Guj.), after examining earlier judgments on the question has laid down several parameters' tests which have to be applied to find out when income from transactions in shares' securities should be treated as income from business or the gain which has to be taxed unde...

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