As per Explanation 7; no penalty is leviable if the assessee proves that the price charged or paid in such transaction was computed in accordance with the provisions contained in Sec. 92C and in the manner prescribed under section in good faith and with due diligence.
Per Bench – Out of this bunch of ten appeals, there are various appeals of the assessee and the revenue for different assessment years against separate orders of Ld. CIT(A) VIII, Ahmedabad. All these appeals were heard together and are being disposed off by way of this common order for the sake of convenience.
In the case of ITO v. Harley Street Pharmaceuticals Ltd. [2010] 38 SOT 486 (Ahd) it has been held that provisions of Sec.50C are applicable only for computation of capital gains in real estate transaction in respect of seller only and not for the purchaser.
As per the mandate of section 92(1), income from International transaction between AEs has to be computed having regard to ALP. Thus, there is nothing in the statutory language to suggest that the AO must demonstrate the avoidance of tax before invoking these provisions.
The issue before us is whether the interest paid on sales tax under the amnesty scheme is an allowable deduction as business expenditure. The law is well settled that the interest paid on sales tax is not of penal in nature and is therefore allowable as business expenditure. Therefore, in our opinion the interest on sales tax is an allowable business expenditure.
In the case of Harley Street Pharmaceuticals Ltd. (supra) it has been held that provisions of Sec.50C are applicable only for computation of capital gains in real estate transaction in respect of seller only and not for the purchaser. Legal fiction cannot be extended any further and has to be limited to the area for which it is created.
The question as to whether the amount constituted the corpus fund of the assessee-trust, in view of the fact that the Commissioner (Appeals) after considering declaration from all the 60 donors of the corpus fund certifying that they have donated towards corpus fund of the assessee-society and the revenue has not raised any ground of appeal against the admission of these declarations produced by the assessee before the Commissioner (Appeals), the amount in question has to be held as constituting ‘Corpus Fund’ of the assessee-society and accordingly, the order of the Judicial Member on the issue is to be confirmed.
The appellant had shown sale value as a result of transfer at Rs. 14,00,000/- whereas stamp authority has taken this value at Rs. 13,83,600/- it means that assessee had shown more sale consideration in sale deed. Thus, this case cannot be referred u/s 50C (2) of the IT Act to the DVO. The capital gain can be calculated under chapter – IV of computation of income from capital gain. Section 48 empowered to AO to calculate the capital gain. For calculation of capital gain full value of the transaction received or accruing as a result of the transfer
As far as the provisions of the Act is concerned, now it has been streamlined that deemed dividend includes any payment by a company, not being a company in which the public are substantially interested, of any sum by way of advance or loan to a shareholder being a person who is the beneficial owner of shares holding not less than 10% of the voting power.
The entire transactions of purchase/sale of securities/shares through derivatives and later on dealing with those shares/securities will determine whether an investment is made or stock-in-trade is procured.
