In view of judgment in R.J Wood. The Court held that receipts towards mesne profits should be taxed in the year of their receipt. The revenue had not however, re-opened the assessment in respect of the year of receipt of the amounts, in this case.
We find from the records that the assessee has computed his interest income arising on the difference between purchase price of the debenture and redemption price after six years and calculated the income on amortization basis.
There is nothing whatsoever in the order of TPO which required or recommended any adjustment to the value of the international transactions. TPO did not deem it necessary to effect any revision of the sales price as shown by the assessee in its books.
Increase in rates of Entry Tax by 0.5% under the Punjab Tax on Entry of Goods into Local Areas Act, 2000 and amendment in Schedule C and E through Public Notice dated 18.09.2012. Punjab Government has increased the rate of entry tax by 0.5% w.e.f. 18.09.2012 vide public notice dated 18.09.2012 beside this the Punjab Govt. has amended Schedule C and E appended to the Punjab Value Added Tax Act, 2005 to increase the VAT rates on Dals(Pulses) and unbranded besan from 1% to 1.5% w.e.f. 18.09.2012 which has effected the backbone of the society.
We see no error in the observation made by the Division Bench of the High Court in the impugned judgement that once limitation period of four years provided under Section 147/149(1A) of the Income Tax Act, 1961, [for short, `the Act’] expires then the question of reopening by the Department does not arise.
On going through the records, we find that an important query was raised by the Department as to whether these two donors had the financial capacity to make the gift(s) in favour of the assessees herein. This query has not at all been answered by the Income Tax Appellate Tribunal [‘ITAT’, for short].
The case of the revenue is that section 234D as introduced on 1st June, 2003 was retrospective in operation by necessary implication. However, as doubts were raised about its retrospectivity, the same was clarified by adding an explanation to section 234D by Finance Act, 2012.
The issue arising in this case stand covered by the decision of this Court in the matter of Mahindra & Mahindra (supra).The decision of this court in the matter of Solid Containers (supra) is on completely different facts and inapplicable to this case. In the matter of Solid Containers (supra) the assessee therein had taken a loan for business purpose.
It is an accepted position of law that the re-valuation of assets in the books of the assessee does not lead to generation of income as no transaction has been taken up with an outside party. In other words, a person cannot make profit from himself by merely making some entries in the books of account.
There is nothing in the said section to treat, inter alia, the assessee as defaulter where there is a shortfall in deduction. With regard to the shortfall, it cannot be assumed that there is a default as the deduction is not as required by or under the Act, but the facts is that this expression, ‘on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction has not been paid on or before the due date specified in sub-section (1) of section 139’.
