"12 May 2018" Archive

Explanation 3 to section 147 has no application In relation to issue cropped up subsequent to original assessment on new set of facts

CIT Vs . Swarna Andhra Ijmii Integrated Township Development (P) Ltd. (Andhra Pradesh High Court At Hyderabad)

Explanation 3 will be applicable in case where live issue, which was subsisting at the time of original assessment and if such issue has escaped the determination of the assessing officer, can be a ground for reopening. Any new issue that has cropped up subsequently on new set of facts, the aforesaid Explanation has no application. ...

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Registration U/s. 12A of trust cannot be denied merely because it consists of Urologist Doctors

Commissioner Of Income Tax Vs. Chhattisgarh Urology Society (Chhattisgarh High Court)

The Chhattisgarh High Court, in the case of Commissioner of Income Tax Central Revenue v. Chhattisgarh Urology Society recently announced that a society consists of urologist doctors eligible for registration under Section 12A of the Income Tax Act....

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ITAT explains when Share premium can be assessed as undisclosed income

Cornerstone Property Investments Pvt. Ltd Vs. ITO (ITAT Bangalore)

Share premium received can be assessed as undisclosed income if (a) directors are allotted shares at par while others are allotted at premium, (b) the high premium is not justified by a valuation report, (c) the high premium is not supported by the financials, (d) based on financials the value of shares is less and no genuine investor wou...

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Notice U/s. 274 r.w.s. 271(1)(c) is untenable if issued without application of mind

D.C.I.T Vs. M/s. Pennzoil Quaker State India Ltd. (ITAT Mumbai)

D.C.I.T Vs. M/s. Pennzoil Quaker State India Ltd. (ITAT Mumbai) On a perusal of the notice issued u/s. 271(1)(c) of the Act for initiation of proceedings we find that the Assessing Officer did not strike off and specify the charge/limb for which he is proposing to initiate penalty proceedings. However, in the Assessment Order, Assessing [...

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Rent received by Association of Co-Owners Whose only Objective is to Derive Income from Letting out of Property is Taxable as ‘Income from House Property’

Manek Lodge Properties Vs. Additional Commissioner of Income Tax (ITAT Mumbai)

Manek Lodge Properties Vs. Additional Commissioner of Income Tax (ITAT Mumbai) In the present case the assessee is nothing but association of co-owners of certain properties whose only objective is to derive income from letting out of property and nothing more. The bench also held that if the contention of Assessee is to be accepted, [&he...

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No more adjournments, No more ‘tareek pe tareek’: Bombay HC

Ram Nagar Trust No. 1 Vs. Mehtab L Sheikh (Bombay High Court)

No more adjournments. No more tareek pe tareek. Enough is enough. That a Court will endlessly grant adjournments is not something that parties or advocates can take for granted. Nor should they assume that there will be no consequences to continued defaults and unexplained delay...

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Addition U/s. 68 for bogus share capital not justified for mere non-response by shareholders to summon U/s. 133(6)

Umbrella Projects Pvt. Ltd Vs. ITO (ITAT Delhi)

We are of the view that no adverse inference can be drawn against the assessee merely because reply has not been received by the AO in response to notice issued under Section 133(6). The AO having issue the notice and such notice having been served on the person concerned, the AO has to take the process to the logical end. He cannot draw ...

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In absence of business activities Interest on borrowed capital not allowable

Coffee day Enterprises Ltd. Vs. ITO (ITAT Bangalore)

As no activity was undertaken by the assessee which could be said to be business activity, no deduction was allowable under section 36(1)(iii). Thus, AO was justified in disallowing the interest paid on borrowed capital to assessee....

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Assessment framed by AO on non-existent amalgamated company is void ab initio

Genpact Infrastructure Vs. DCIT (ITAT Delhi)

In the case of Genpact Infrastructure (Bhopal) Pvt. Ltd, Delhi bench of Income Tax Appellate Tribunal ( ITAT ) recently held that addition cannot be made since the assessment framed by the Assessing Officer (AO) on the non-existent amalgamated company and not on the amalgamating company. ...

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Investments held as stock-in-trade do not attract disallowance U/s. 14A

Dy. CIT Vs. Infina Finance (P) Ltd. (ITAT Mumbai)

Assessee was engaged in the business of investment in shares and securities, financing and granting loans and advances against shares. The assessee earned exempt dividend income and made suo moto dis allowance against the same under section 14A. ...

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