Since redemption of preference shares does not result in reduction of share capital as per Sec 80 of the Companies Act,1956 , the redemption value cannot be taxed as deemed dividend as the distribution of profits if at all there may be is not resulting in reduction of capital.
Just because the assessee has not filed its income tax returns in earlier years, it can not be said that the activities of the assessee are not genuine. It has been held that non-filing of return cannot be one of the reasons for denying registration under section 12A of the Act.
ITAT held that simultaneous trading of shares in cash segment and arbitrage in derivative segment by assessee company cannot be splitted into speculative and non-speculative transactions . So, as soon as it is found that assessee is trading in shares , the entire trading activity to be treated as speculative business as per explanation to Sec 73 which clearly state that if any part of assessee’s business is trading in shares then the same trading to be treated as speculative business.
The assessee is registered u/s. 12A of the Income Tax Act, 1961 (hereinafter referred the Act) and has been claiming exemption u/s. 11 of the Act which has been denied by the Assessing Officer mainly on the ground that the assessee is involved in commercial activities as the assessee receives coaching fees from the students of CA while giving coaching to the CA students.
Stand alone AIR Information is not sufficient to hold that cash deposits constitute income. Cash deposits in bank account may or may not be Income. Hence when the treatment of the amount as Income is itself doubt , it definitely can not constitute Income escaping assessment and, therefore, it shall be too far fetched to hold that AIR Information constitutes Reason to believe that Income has escaped assessment.
The ITAT Mumbai held that the provisions of Sec 50C is applicable only to transfer of land of which the assessee is absolute and legal owner and cannot be applicable to the transfer of leasehold rights in land.Thus, the transfer value cannot be benchmarked to stamp duty value.
Surplus funds not immediately required for day to day banking were kept in Bank deposits. The income earned there from thus would be income from banking business eligible for deduction u/s 80P(2)(a)(i).
Purchase of a license to use shelf/shrink-wrapped software is purchase of a product and not a copyright. Wherever the Government of India intended to include consideration for the use of software as ‘Royalties’, it explicitly provided so in the DTAA with the concerned country (e.g. India-Malaysia DTAA).
The ITAT Mumbai in the above cited case held that raising of invoices per se doesn’t result in accrual of income rather an income can be considered to have been accrued only when there is a corresponding liability of the other party to pay the amount to the assessee and there is realistic probability of realization of the income to the assessee.
As regards applicability of TDS provisions, not two but three views exist on the impugned issue – (i) TDS u/s 194H – which was discussed by AO in the assessment order dt. 18/3/2012; TDS u/s 194C – which was discussed and upheld by AO in the assessment order dt. 18/3/2012; TDS u/s.194A – (which the assessee does not agree with) and not sought to be taken by CIT. Revision of order u/s 263 cannot be done if two views are possible on the issue.
