Advocate Bharat Agarwal

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Licence/ Royalty fees to facilitate Trading Operation & Effective Management is Revenue in Nature

DCIT Vs Hitz FM Radio India Ltd. (ITAT Delhi) - ITAT Delhi held in case of DCIT v Hitz FM Radio India Ltd. that expenditure related to licence fee and royalty which helps merely in facilitating the assessee’s trading operations or enabling the management to be carried more effectively is revenue in nature even if advantage may endure for an ind...

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Security services by Trust in confirmation to its objects for general public utility will be considered as “charitable” in Nature

Gujarat Industrial Security Force Society Vs Dy. DIT (Exemption), (ITAT Ahmedabad) - In the case of Gujarat Industrial Security Force Society v Dy. DIT (Exemption) it was held that the activity related to providing security services whose objective was to provide employment to youth and retired army personnel will not be treated as business activity but an activity which is charita...

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Gifting of property will entitle assessee to claim exemption u/s 54 if left with only one

ITO Vs Shri Sameer jasuja (ITAT Delhi) - ITAT Delhi held in case of ITO v Shri Sameer Jasuja the property has been gifted by the person to his wife, then Assessee will entitled to the exemption u/s 54F if he is left with one property. It further held that section 64(1)(iv) will not operate to nullify gift and would operate only to club inc...

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Notice u/s 153C invalid if no satisfaction been recorded by Assessing Officer

M/s Shiv Associates Vs DCIT (ITAT-Ahmedabad) - ITAT-Ahmedabad In the case of M/s Shiv Associates v DCIT quashed the notice u/s 153C relying on the Judgment of the similar case related to the assessee in which the notices u/s 153C were quashed as no satisfaction was recorded by the AO....

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Mutual Transactions can’t come under section 2(22)(e)

ITO Vs Smt. Gayatri Chakroborty (ITAT Kolkata) - ITAT Kolkata held in case of ITO v Smt. Gayatri Chakroborty that where the transactions are mutual in nature or there is benefit or no benefit to each other, then these kind of transactions will not come under the purview of section 2(22)(e)....

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Recent Posts in "Advocate Bharat Agarwal"

Licence/ Royalty fees to facilitate Trading Operation & Effective Management is Revenue in Nature

DCIT Vs Hitz FM Radio India Ltd. (ITAT Delhi)

ITAT Delhi held in case of DCIT v Hitz FM Radio India Ltd. that expenditure related to licence fee and royalty which helps merely in facilitating the assessee’s trading operations or enabling the management to be carried more effectively is revenue in nature even if advantage may endure for an indefinite future....

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Security services by Trust in confirmation to its objects for general public utility will be considered as “charitable” in Nature

Gujarat Industrial Security Force Society Vs Dy. DIT (Exemption), (ITAT Ahmedabad)

In the case of Gujarat Industrial Security Force Society v Dy. DIT (Exemption) it was held that the activity related to providing security services whose objective was to provide employment to youth and retired army personnel will not be treated as business activity but an activity which is charitable in nature....

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Gifting of property will entitle assessee to claim exemption u/s 54 if left with only one

ITO Vs Shri Sameer jasuja (ITAT Delhi)

ITAT Delhi held in case of ITO v Shri Sameer Jasuja the property has been gifted by the person to his wife, then Assessee will entitled to the exemption u/s 54F if he is left with one property. It further held that section 64(1)(iv) will not operate to nullify gift and would operate only to club income in the hands of donor assessee....

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Notice u/s 153C invalid if no satisfaction been recorded by Assessing Officer

M/s Shiv Associates Vs DCIT (ITAT-Ahmedabad)

ITAT-Ahmedabad In the case of M/s Shiv Associates v DCIT quashed the notice u/s 153C relying on the Judgment of the similar case related to the assessee in which the notices u/s 153C were quashed as no satisfaction was recorded by the AO....

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Mutual Transactions can’t come under section 2(22)(e)

ITO Vs Smt. Gayatri Chakroborty (ITAT Kolkata)

ITAT Kolkata held in case of ITO v Smt. Gayatri Chakroborty that where the transactions are mutual in nature or there is benefit or no benefit to each other, then these kind of transactions will not come under the purview of section 2(22)(e)....

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Without any supporting material A.O. cannot substitute market value

DCIT Vs Rama Capital and Financial Services Ltd. (ITAT Mumbai)

ITAT Mumbai held in the case of DCIT v. Rama Capital and Financial Services Ltd. that without any substantive ground reopening cannot be done on the basis of change of opinion. It Further held that without any supporting material, the A.O. cannot substitute market value....

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Principal of Consistency should be followed on principal laid down in case of Assessee’s Sister Concern

DCIT Vs The Indian Hotels Co. Pvt. Ltd. (ITAT-Mumbai)

ITAT Mumbai held In the case of DCIT v. The Indian Hotels Co. Pvt. Ltd. that principle of consistency should be followed when there were similar issues and the similar principal was laid down in the case of Assessee’s Sister Concern....

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Penalty Proceedings can’t be initiated without any corroborative evidence

Dasrathbhai Narandas Patel Vs ITO (ITAT Ahmedabad)

In the Case of the Dasrathbhai Narandas Patel v ITO, ITAT-Ahmedabad held that the assessment Proceedings are completely different from Penalty Proceedings and before initiating the penalty proceedings there should be some convincing and corroborative evidence....

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Revenue Must have Tangible Material to initiate income escaping Assessment

Coperion Ideal Private Limited Vs Commissioner of Income Tax (Delhi High Court)

In the case of Coperion Ideal Private Limited v. CIT, Delhi High Court while giving the decision in the favour of the assessee, held that there should be some tangible material available with the Revenue, whenever they want to conclude that Assessee have escaped Assessment. ...

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Revised computation sufficient for mistake in currency conversion for computation of exemption U/s. 10A: HC

E-Funds International India Private Limited Vs PR. Commissioner of Income Tax (Delhi High Court)

The Delhi High Court held in the case of E-Funds International India Private Limited v. PR. CIT, while dismissing the appeals of the Revenue that revised computation was sufficient in the place of furnishing revised returns as there was only a minor technical fault as the figure of USDs was not changed into Rupees while computing the ded...

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Appeals filed by revenue without Proper reasons/explanations not maintainable: HC

CIT Vs Proctor and Gamble Home Products Ltd. (Bombay High Court)

CIT v Proctor and Gamble Home Products Ltd- Bombay HC observed that the appeals filed by the Revenue was in a very causal manner without indicating the basis of the challenge. Further, it was observed that Rule of law implies certainty of law....

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Writ Petition could be allowed if there is procedural lapse by Authorities: HC

TNT India private Limited Vs Principal Commissioner of Customs (Bombay High Court)

The Bombay High Court has held in the case of TNT India private Limited v. Principal CIT that Writ Petition could be allowed if the due procedure have not been followed while suspending the registration under Regulation 14 of Courier Imports and Exports (Clearance) Regulations, 1998....

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Completion of reassessment without issue of reasons is invalid: HC

CIT Vs Trend Electronics (Bombay High Court)

In the case of CIT v Trend Electronics, Bombay Court held that before issuance of reopening notice for assessment, the Revenue have to furnish the reasons for it. Otherwise, the notice will be considered as bad in Law....

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Benefit of exemption notification only for goods covered in notification & cannot be extended to similar goods: SC

M/s Larsen & Toubro Limited Vs CCE (Supreme Court of India)

Supreme Court in the case of M/s Larsen & Toubro Limited v CCE held that the particular product which has been manufactured by the assessee for captive consumption will only be considered for any kind of exemption if covered by any exemption notification. ...

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Distinct or Different use in an article after transformation is Manufacture : SC

CCE Vs M/s Fitrite Packers, Mumbai (Supreme Court of India)

In case of CCE v M/s Fitrite Packers, Hon’ble Supreme Court held that the product could be termed as 'Manufactured' only when there is a transformation in the original article and this transformation should bring out a distinctive or different use in the article....

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CVD payable on import of Concentrates: SC

M/s Star Industries Vs Commissioner of Customs (Import) (Supreme Court of India)

In case of M/s Star Industries v Commissioner of Customs (Import), Hon'ble Supreme Court while interpreting Notification No.4/2006-CE held that it is an exemption notification where only 'Ores' were exempted and if after the process of manufacture...

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Place of Delivery could not be termed as Place of Removal: SC

CCE Vs M/s Ispat Industries (Supreme Court of India)

In the present case the Hon’ble Supreme Court held that the place of delivery could not be termed as place of removal for the relevant time mentioned in the show cause notices with respect to section 4 of Excise Act and Rule 5 of Excise Valuation Rules. ...

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Assisting Domestic Client by receiving Services of Re-Insurer Abroad is Export of Service

Suparesh General Insurance Services and Brokers Pvt. Ltd. Vs Commissioner of Service Tax (Madras High Court)

In the case of Suparesh General Insurance Services and Brokers Pvt. Ltd. v Commissioner of Service Tax, Hon’ble Madras High Court held that whenever, a transaction of rendering services is taken out by the re- insurance broker in India in order to get the services of re-insurer abroad for assisting the client in India...

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Penalties u/s 114 of Customs Act could be invoked for Export made u/s 113

Commissioner of Customs v Kamalabhai (Madras High Court)

In the case of Commissioner of Customs v Kamalabhai, Madras High Court held that the exported goods u/s 113 can’t be confiscated but the penalties in section 114 related to “Attempt to make exports” will be applied as Attempt is a step to actual export....

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Alternative Remedy is a Bar to invoke extraordinary powers under Article 226

M/s. Nepa Agency Co. Pvt. Ltd & Anr Vs Union of India (Calcutta High Court)

In the case of M/s. Nepa Agency Co. Pvt. Ltd & Anr v Union of India, Hon’ble Calcutta High Court held that whenever in a statute a remedy is provided or an alternative remedy is there, then there is no need to entertain the Writ Petitions....

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Search & seizure Proceeding against a Person without issue of Search Warrant is Bad in Law

CIT Vs Smt. Priyanka Singhania (Delhi High Court)

Delhi High Court held in the case of CIT v Smt. Priyanka Singhania that if the search warrant was issued in the name of the father of Assessee, then the proceedings of the search and seizure against the assessee was totally void and bad in Law....

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Liability u/s 132(5) can be determined only if proper Assessments is made

CIT Vs Sri Chand Gupta (Delhi High Court)

In the case of CIT v Sri Chand Gupta, Delhi High Court held that during search and seizure under section 132, any declarations made by the assessee could not discharge his liability to the extent of cash seized as Section 132(5) of the Act does not deal with appropriation of the assets seized....

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No TDS on reversal of Royalty Payment according to Government Policy

DIT Vs M/s Ericsson Communications Ltd. (Delhi High Court)

In the Case of DIT v M/s Ericsson Communications Ltd. , Delhi High Court held that when the Industrial policy of Government of India mentions that there should be no royalty paid to the parent foreign collaborator company by the Indian wholly subsidiary company then the reversal ...

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Unspent Amount of subsidy received from Holding Company cannot be treated as Income

CIT Vs Canon India Pvt. Ltd. (Delhi High Court)

In the case of CIT v Canon India Pvt. Ltd., Hon’ble High Court held that whenever a subsidiary company is getting subsidy from it’s holding company, then the amount of subsidy which has not been spent will not be considered as income of the Assessee....

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Approval u/s 80G(5) could be granted if certificate u/s 12A is not withdrawn

Govats Foundation Vs ITO (Exemption) (ITAT Hyderabad)

In the case of Govats Foundation v ITO (Exemption) it is held by ITAT-Hyderabad that the approval u/s 80G(5) could be granted to charitable institution if the certificate granted u/s 12A has not been withdrawn....

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Interest u/s 234C is to be levied on Assessed or Returned income whichever is less

Abhishekh Cotspin Mills Ltd. Vs ACIT (ITAT Pune)

In the case of Abhishek Cotspin Mills Ltd. v ACIT it is held by ITAT Pune that whenever the Assessee declares the returned income which is higher than the actual Asseessed Income, then interest would be charged under section 234C on the assessed Income and In case assessed income is higher than returned Income Than such Interest will be...

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Valuation u/s 50C should be Preferably handed to the Valuation Officer in the event of dispute

Masud Ahmed Qureshi Vs ITO (ITAT Pune)

In the case of Masud Ahmed Qureshi v ITO it was held by ITAT Pune that whenever, there is a dispute regarding the valuation u/s 50C, it would be better to refer the matter to the Valuation Officer so that the proper report could be furnished regarding it....

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Section 148 could not be invoked in absence of any Tangible Material

DCIT Vs M/s. Sri Balasubramania Mills Ltd. (ITAT Chennai)

ITAT Chennai held in the case of DCIT vs M/s. Sri Balasubramania Mills Ltd. that the section 148 could only be invoked whenever there is a failure on the side of Assessee to furnish all the necessary details. But, in this case the details were furnished as relevant sale deed was available with the AO ...

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TDS u/s. 194C deductible when contract amount exceeds thrash hold limit

ITO Vs Someshwar Real Estate Pvt. Ltd. (ITAT Ahmedabad)

ITAT Ahmedabad has held in the case ITO v Someshwar Real Estate Pvt. Ltd. that the TDS would be deducted u/s 194C only when the amount of single contract exceeds Rs. 20,000 or the amount exceeds Rs. 50,000 in aggregate which has been given to a particular person in a year....

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Books cannot be rejected when PAN mentioned and TDS was deducted

VV Constructions Vs ACIT (ITAT Pune)

In the case of VV Constructions v ACIT, ITAT Pune held that the Books of account cannot be rejected for only the reason that there was some over writing in one of the transactions. Also, it can’t be rejected because the Assessee have furnished the PAN numbers and made TDS in all the transactions...

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Amount paid under Amnesty scheme will be treated as an adjustment towards interest- SC

Modern Hotels Vs CCE (Supreme Court of India)

Supreme Court held In the case of Modern Hotels v CCE that the amount paid for the renewal of licence under Foreign Liquor Rules under the Amnesty scheme will be treated as an adjustment toward interest....

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Surrender of Advance Licence to receive products at lower rate will be treated as additional consideration-SC

CCE Vs M/s Indorama Synthetics (I) Ltd. (Supreme Court of India)

Supreme Court has held in the case of CCE v M/s Indorama Synthetics (I) Ltd. of India held that the surrendering of advance licence in order to receive the products at lower rate will be considered as “additional consideration'' under section 4 of Central Excise Act, 1944. ...

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Product could be treated as medicament if produced under Drug Licence- SC

CCE Vs Hindustan Unilever (Supreme Court of India)

Supreme Court held In the case of CCE v. Hindustan Unilever that Vaseline intensive Care Heel Guard is a medicament as it is produced under the Drug Licence and also before classifying any particular product the dominant function have to be considered....

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Whenever order of Re-assessment is passed, Period of Limitation will start from the date of Re-assessment order and not from Original Assessment order

Rastriya Ispat Nigam Limited Vs Asst. Commissioner of Income Tax (Telangana and Andhra Pradesh High Court)

Rastriya Ispat Nigam Limited v. ACIT In this case the writ petition was filed by the Assessee in which the AP High Court while dismissing the writ petition held that whenever an order is made under the re-assessment...

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Necessary Documents should be filed to prove bonafide intention when money received from overseas

Sri Som Dutt Vs ACIT (ITAT Kolkata)

ITAT Kolkata held In the case of Sri Som Dutt v ACIT that whenever, the money has been received from overseas, then the onus is on the Assessee to prove that all the transactions are bonafide when he is claiming that the amount has been received as Capital Receipt....

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Section 263 could be invoked if both the ingredients are satisfied

CIT Vs Shri Varanasi Khanta Rao (Telangana and Andhra Pradesh High Court)

While discussing the Revisional powers of CIT(A) u/s 263 it was held that the Commissioner has to be satisfied of twin conditions, namely, i) the order is erroneous; and ii) it is prejudicial to the interests of the revenue....

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Godown Rent cannot be treated as business Income as it’s not a continuous activity from year to year

The Commissioner of Income Tax Vs M/s. Sileman Khan Mahaboob Khan (Telangana and Andhra Pradesh High Court)

High Court held that Business is a continuous activity which is done year to year. Here, in this case the Assessee let out his godown and shown income as Income from Business instead of Income from property to which the High court do not agree ...

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Explanation 3C to section 43B will have retrospective effect for actual payments

CIT Vs Pennar Profiles Ltd. (Telangana and Andhra Pradesh High Court)

In the present facts of the Case the Hon’ble High Court held that Explanation 3C to section 43B is having retrospective effect from 01/04/1989. Therefore, conversion of interest amount into loan would not be actually deemed to be actual payment....

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Section 48 applies only when expenses are ‘wholly and exclusively” for property

Kanniah Photo Studio Vs ITO (Madras High Court)

Hon’ble High Court while interprating section 48 held that while calculating Capital gain the expenses made will only be considered if it is made wholly or exclusive for that property. Also, the Hon’ble High Court held that The Hon’ble Tribunal was right in taking into consideration of the Judgement of Jurisdictional High Court....

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No interest u/s 234B during Block Assessment

ACIT Vs Akhil Jain (ITAT Delhi)

In the Case of ACIT v Akhil Jain, ITAT Delhi held that no interest will be levied u/s 234B during the Block Assessment by the virtue of Section 158BF....

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No Penalty could be levied u/s 271(1)(c) if only advance is received and no actual sale is made

ITO Vs M/s Akash Enterprises (ITAT Pune)

Hon’ble Tribunal held that whenever the consideration is received in advance for the particular sale, The money will be taxed in the year in which the sale is made and not in the assessment year in which the advances are received....

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No Service Tax on the Amount received as Wharfage Charges- SC

CCE Vs M/s Gujarat Maritime Board, Jafrabad (Supreme Court of India)

In the case of CCE v M/s Gujarat Maritime Board Hon’ble Supreme Court held that no service tax will be levied if the amount is collected under the wharfage charges which is prescribed under the Statute and doesn’t come under the 'Port Services....

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Intention of Legislature and Purposive Construction should be Considered while interpreting a Notification- SC

M/s Coastal Papers Ltd. Vs CCE (Supreme Court of India)

In the case of M/s Coastal Papers v CCE,Hon’ble Supreme Court while interpreting the Notification No. 22/94-CE, held that whenever the notification is interpreted the intention of the Legislature should be considered. ...

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Risograph is a Printing Machine and will be classified accordingly – SC

HCL Limited Vs Commissioner of Customs (Supreme Court of India)

Hon’ble Supreme Court has held in the case of HCL Limited v Commissioner of Customs that Risograph is a printing machine and not a duplicating machine. ...

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Penalty cannot be escaped by payment of taxes before initiation of Penalty Proceedings or for financial hardship/diverse location

Reliance Industries Ltd. Vs CIT (Bombay High Court)

In, the present case the Hon’ble High Court held that the deposit of tax before the initiation of penalty proceedings will not help Assessee in escaping the penalty proceedings u/s 221. Also, the point of Financial hardship, diverse locations and lack of computerization will not give any relief to the assessee. ...

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Judicial Functions should not be performed in Arbitrary Manner- HC

Hinduja Global Solutions Ltd. Vs Union of India (Bombay High Court)

In the present case the Hon’ble High Court while accepting the Writ filed by the assessee, restored the matter back to the Tribunal by observing that the Judicial Functions should not be performed in the arbitrary manner....

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No malafide intention no penalty

CIT Vs Dalmia Dyechem Industries Ltd. (Bombay High Court)

In, the present facts of the Case the Hon’ble High Court held that no penalty could be levied until it is proved that there was an active concealment or there is deliberate furnishing of inaccurate particulars....

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Appeals filed u/s 260A should not be casual and callous

DIT Vs M/s Credit Agricole Indosuez (Bombay High Court)

Filing of appeal under Section 260A of the Act is a serious issue. The parties who seek to file such appeals must do so after due application of mind and not raise frivolous / concluded issues. This is certainly expected of the State....

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Amount received as a Restrictive Covenant is a Capital Receipt but taxable w.e.f. 1.4.2003

CIT Vs Bisleri Sales Ltd. (Bombay High Court)

In the present facts of the Case there were two vital issues contended by the Revenue which were dismissed by the Hon’ble High Court by observing that the amount received as restrictive covenant is a capital receipt and is taxable only as a revenue receipt w.e.f. 1/4/2003. ...

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Notice served by ‘speed post’ is as valid as ‘registered post’ in the eyes of Law

Color Craft Vs ITO (ITAT Mumbai)

ITAT Mumbai In the case of Color Craft v ITO held that the notice sent through the 'speed post' is totally valid in the eyes of law as 'registered post'. The Hon’ble Tribunal while substantiating their decision relied on section 27 of General Clauses Act which mentions about 'service by post'...

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Valuation of Derivatives can be done at cost or market price whichever is lower

DCIT Vs M/s ECAP Equities Ltd. (ITAT Mumbai)

In the present facts of the Case the Hon’ble Tribunal completely relied on the Judgment of M/s. Indsec Securities & Finance Ltd., ITA No. 4236/M/2012, where it was observed that Derivatives are also Stock-in-trade and accordingly the valuation will be done....

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Penalty not invokable if barred by limitation or there is absence of mala fide intention

Smt. Parin K. Rajwani Vs JCIT (ITAT Mumbai)

The ld. Counsel for the assessee for the year AY 2007-08 regarding the imposition of penalty contended that the Assessee were not aware of the provisions of Law in which the receipt of loan through cheque or bank draft was required. ...

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Section 263 could be invoked if proper investigation not made

M/s. Shoreline Hotels Pvt. Ltd. Vs CIT (ITAT Mumbai)

ITAT Mumbai has in the case of M/s Shoreline Hotels Pvt. Ltd. v CIT held that CIT was justified in invocation of Section 263 when AO has not made any inquiry with regard to the expenses claimed in respect of accommodation bill obtained by assessee that reduced profit of assessee by 100% instead of 15% considered by AO....

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Addition based on mere loose papers not justified

Ketan V Shah Vs ACIT (ITAT Mumbai)

The Hon’ble Tribunal observed that the basis for making the addition of Rs. 19.98 crores is the loose paper which doesn’t make any sense. Merely by making additions of all the figures mentioned in the loose paper would not justify the addition of Rs. 19.98 crores. ...

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Section 68 can’t be invoked if Transactions made are through proper Banking Channel & Assessee proves Identity & Genuineness

KLR Industries Ltd. Vs DCIT (ITAT Hyderabad)

In the present case there were the three issues which were decided by the Hon’ble Tribunal where it was held that whenever the transactions have been made through proper banking channel, then invocation of section 68 will not be valid....

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Physical meeting of Commissioners not required u/s 86(2) of Finance Act, 1994

Commissioner of Service Tax Vs Japan Airlines International Co. Ltd. (Delhi High Court)

The Hon’ble High Court held that the Section 86(2) does not state as to the manner in which Committee of Commissioners have to arrive at a decision as to whether an appeal should be preferred against the order of Commissioner of Central Excise....

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Estoppel does not apply against a Statute

HCL Technologies Vs. ACIT (Delhi High Court)

In the present case the Hon’ble High court while deciding two vital issues held that the estoppels does not apply against a statute and Mere expansion of the Existing Units can’t be termed as a separate undertaking in order to claim deductions under section 10A....

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Standby Maintenance Charges could not be termed as technical services u/s 9(1)(vii)

Flag Telecom Group Limited Vs Dy. DIT,( ITAT Mumbai)

In the present case HC held that standby maintenance charges are not technical services within the meaning of section 9(1)(vii). On the issue of Restoration Activities High court held that amount received from restoration activities cannot be termed as business income as the large portion of the cable Network was outside the Jurisdiction...

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Liability to pay additional duty allowable in the year in which such liability arises

Tupperware India Pvt. Ltd. Vs CIT (Delhi High Court)

Even though the excise duty was for manufacturing activity that occurred earlier, the liability to pay such additional duty did not exist in the previous years and as a result, could not have been claimed by the assessee as expenditure in the concerned previous years. ...

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Businessman is best judge to decide its commercial expediency

ACIT Vs Shri Milan N. Shah,(ITAT Mumbai)

In the present facts of the Case, the Hon’ble tribunal held that businessman is the best Judge to find out what is the best for his business and to whom he should employ as the Commercial Expediency is only known to him....

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TNMM is a right method to arrive at ALP when assessee have not taken Substantial Risks

CIT Vs Marubeni India Pvt. Ltd. (Delhi High Court)

In the present facts of the case the Hon’ble High Court held that as the assessee have not taken substantial risks and was a mediator in the international transactions. Hence, Transactional Net Margin Method is a right method instead of Profit Split method....

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Proceedings u/s 263(1) could only be invoked after satisfaction of its Ingredients

Ranglal Bagaria (HUF) Vs CIT (ITAT Kolkata)

In the present case the Hon’ble Tribunal held that for invoking section 263 both the conditions that the order of AO is erroneous as well prejudicial to the interest of Revenue should be satisfied...

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Private Limited Company is an Inanimate Person and no Personal Expenditure could be Attributed to it

Rajasthan Patrika Vs ACIT, (ITAT-Jaipur)

In the present facts of the Case there are three vital issues in which the Hon’ble Tribunal held that expenses like Telephone expenses, Diwali Expenses, Travelling Expenses, Vehicle Running, Event management Expenses...

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Functionally Different Companies can’t be compared under transfer Pricing

Net Cracker Technology Solutions (India) Pvt. Ltd. Vs ACIT (ITAT Hyderabad)

In the present case the Hon’ble Tribunal held that assessee can’t be compared with other companies when they are totally different in functions. Also, the Intellectual property Rights, Brand Value have to be seen while making comparisons under Transfer Pricing....

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Reassessment could be Initiated if True Facts not Disclosed Earlier

CIT Vs Velocient Technologies Ltd. (Delhi High Court)

In the present case, the Hon’ble High court held that the proceedings of re-assessment could be made if full and true facts have not been disclosed earlier. Also, it was held that section 68 could be invoked if the genuineness of parties are not proved....

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Forex gains are eligible for deduction u/s 10B

Yodeva Plastics Pvt. Ltd. Vs DCIT (ITAT Hyderabad)

In the present case the Hon’ble Tribunal held that the Forex gains or losses after the sale receipts would be treated as an amount which will be eligible for deduction under section 10B. On the second issue...

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Making of Advances without Interest is not Contrary to Law

Shiv Nandan Buildcon Pvt. Ltd. Vs CIT (Delhi High Court)

Shiv Nandan Buildcon Pvt. Ltd. vs. CIT (Delhi High Court) In the present case the Hon’ble High Court have deleted the addition on account of a notional income when advances were made without charging of any interest....

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The JV can’t be Termed as an Association and would not be Taxed Accordingly

CIT Vs M/s Oriental Structural Engineers Pvt. Ltd. (Delhi High Court)

Delhi High Court in the case of CIT vs. M/s Oriental Structural Engineers Pvt. Ltd. held that the Joint Venture was not an Association of Persons and could not be taxed on that basis, where the JV was formed only to secure the contract...

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Advances made from Mixed Funds will be presumed as Utilization of it’s own Funds

CIT Vs M/s. DD Industries Ltd. (Delhi High Court)

The Delhi High Court in the case of held CIT vs. M/s. DD Industries Ltd. that when the assessee is possessed of mixed funds which include its own funds in sufficient quantity, a presumption that its own funds were utilized for the advances is to be drawn...

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Penalty Proceedings can’t be initiated in the Absence of Proper Investigation

CIT Vs M/s Jain Export Private Ltd (Delhi High Court)

Delhi High Court in the case of CIT vs. M/s Jain Export Private Ltd. held that, to initiate proceedings under Section 271(1)(c), it requires proper investigation and higher satisfaction of proof, which confirmed the basis for the initiation of necessary proceedings....

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Admission u/s 132(4) would suffice to initiate necessary Proceedings

JRD Stock Brokers (P) Ltd. Vs CIT (Delhi High Court)

Delhi High court in the case of JRD Stock Brokers (P) Ltd. vs. CIT. held that the admission of assessee under Section 132(4) where he admitted about the possession of incriminating material would suffice to initiate the necessary proceedings....

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No Notice could be Served to Transferor Company after Amalgamation

CIT Vs Micra India Pvt Ltd (Delhi High Court)

In the present case, the Hon’ble High Court held that notice could not be served to transferor company after the Amalgamation have been done. As, it will be contrary to law to serve the notice to a non-existing company....

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Licence fee and Interest on it after 31st July 1999 would be treated as Revenue Expenditure

CIT Vs Microwave Communications Ltd. (Delhi High Court)

The Hon’ble High Court, in the present case held that the licence fee payable after 31st July 1999 should be treated as revenue expenditure. Similarly, if the interest was payable on license fee for the period post 31st July, 1999, it should be treated as revenue in nature. ...

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Procedural Lapse could not create Hindrance in Deliverance of Justice

CIT Vs M/s Relcom (Delhi High Court)

The Hon’ble High Court held that Rule 37BA will not apply in this case as there is only minor procedural lapse and procedure is the handmaid of justice, and it cannot be used to hamper the cause of justice....

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Assembling of Cassettes from Finished Components is Manufacture

CIT Vs M/s. Tony Electronics Ltd. (Delhi High Court)

The Hon’ble High Court in the present case held that when the assessee claimed and was granted modvat credit under Rule 57H of the Central Excise Rules at the relevant time itself indicates that for purposes of excise, the assembling of cassettes amounted to manufacture....

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Deduction u/s 80-IB(10) Would be Allowed to Developer working on behalf of Government

CIT Vs M/s. VRM India Ltd. (Delhi High Court)

The Hon’ble High court in the present case held that the assessee developed an infrastructure facility/project and was not required to maintain or operate, it was entitled to cost, plus the margin of income or profit. Assesee would be entitled to deduction under section 80-IB (10)....

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Conclusion Should be on Clear Findings, Not on just Presumptions

R.L.Traders Vs ITO (Delhi High Court)

The Hon’ble High Court in this case held that when there is an assumption that the assessee did not maintain quantitative details of ingredients such as mixing gum, starch and oil, the conclusion could not be affirmed. As, decisions can’t be on the basis of Assumptions or Presumptions....

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Estate of deceased person can be assessed by adopting the procedure prescribed u/s.159

Smt. Jharna Ghosh v. ITO (ITAT Kolkata)

The Hon’ble Tribunal held that the property in question was sold by assessee’s late husband before his death and the receipts out of the sale proceeds are deposited in a joint bank account that of assessee and her late husband. Once this is the position the entire receipts are to be assessed in the hands of late husband although throu...

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Orders passed U/s. 201(1)/201(1A) should comply by time limit prescribed under proviso to section 201(3)

M/s. Vamona Developers Pvt. Ltd. Vs DCIT (ITAT Pune)

Appeals filed by the assessee were withdrawn. The Revenue filed the appeal. Facts of the case were that the assessee company was engaged in the business of running a mall. A TDS survey was conducted on 15-11-2012 during which it was observed that the assessee company had deducted tax on professional fees u/s.194J at lower rate than as req...

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Penalty proceedings can’t be initiated when there is reasonable cause of not complying with section 269S

Sri Venkateswara Reddy Kasireddy Vs ITO (ITAT Hyderabad)

During the course of the assessment proceedings, it was noticed that the assessee had received a loan of Rs.30.00 lakhs in cash on 10.05.2009 thereby violating the provisions of section 269S of the I.T. Act. Accordingly, penalty notice u/s 271D of the I.T. Act was issued to the assessee on 25.04.2013 which was duly served on the assessee....

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Seizure of blank cheques during search can’t be treated as an unexplained investments in absence of Additional Evidence

Sri Laxmi Narayan Agarwal Vs ACIT (ITAT Hyderabad)

The Hon’ble Tribunal held that all the persons questioned have confirmed that cheques have been handed over to the appellant only as a measure of security for supply of scrap or for the purpose of obtaining the loan, but all of them have denied having obtained any loan from the appellant. The statements given by those people remains unc...

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Passing of ex-parte without giving hearing to Assessee would constitute violation of natural Justice

Shri Sanjay Gupta Vs ITO (ITAT Delhi)

When reassessment proceedings were started and ended by passing a reassessment order u/s 147/143(3) of the Act, then original assessment order passed u/s 143(3) of the Act and appeal against that order does not survive for adjudication and the same was correctly dismissed by the CIT(A). ...

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TDS not deductible on Shipment Charges Paid as Reimbursement U/S 194C

M/s. Cipro Pharmaceuticals Vs A.C.I.T. (ITAT Hyderabad)

The Hon’ble Tribunal agreeing to the contentions of the assessee held that regarding GBR, payments made to them were only towards reimbursement of shipment charges and therefore, no tax was deducted at source. Assessee did not attract the provisions of section 40(a)(ia) of the Act as reimbursement of expenses do not consist the income o...

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Advance received can’t be termed as a dividend U/s. 2(22)(e) when there was no accumulated profits available

Shri Ch. Krishna Murthy Vs D.C.I.T. (ITAT Hyderabad)

The Hon’ble Tribunal while relying on the Judgment of co-ordinate Bench in the Assessee’s own case which was having similar facts in which it was observed that the advance was treated as deemed dividend u/s 2(22)(e) because it was converted as advance in the name of assessee merely through book entries and actually no money ...

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All transactions in different bank accounts have to be taken in consideration while doing the Assessment

Shri Sama Srinivas Reddy Vs ITO (ITAT Hyderabad)

The CIT(A) remanded the matter and according to the remand report cash deposits were not explainable as there was cash in hand. Also, it was came to known that Assessee maintained one more account in Vijaya Bank which was not shown to the Department. Regarding the rental receipts it was observed by the AO ...

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Reopening of Assessment u/s 147 cannot be allowed if there is any subsequent change in Law

ACIT Vs Sahara States (ITAT Hyderabad)

Revenue submitted that there was no change of opinion as contended by assessee and accepted by the Ld.CIT(A) as assessee has not furnished 'Project Completion Certificate' nor furnished the complete details of AOP as pointed out by the AO. It was the submission that the original project has started way back in 1996 and therefore...

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Orders u/s 263 could be passed only after taking into consideration explanation offered by the Assessee

Mr. Kailash Chand Gupta Vs CIT (ITAT Hyderabad)

Impugned order has been passed by the Ld. CIT under section 263 without considering the explanation offered by the assessee and without applying his mind. The failure of the Ld. CIT, however, does not constitute any legal infirmity to make the order passed by him under section 263 invalid...

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HUF will be treated as Relative u/s 56(2)(vi)

Mr. Biravelli Bhaskar Vs ITO (ITAT Hyderabad)

The expression HUF must be construed in the sense in which it is understood under the Hindu law HUF constitutes all persons lineally descended from a common ancestor and includes their mothers, wives or widows and unmarried daughters. ...

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Duty drawback is to be allowed under section 10B

Mohini Originals v. ITO (ITAT Delhi)

Mohini Originals v. ITO (ITAT Delhi) Facts of the Case The Assessee was an EOU filed its return of income, where AO observed that they have claimed exemption under section 10B which was allowed at the time of Assessment. Deduction on duty drawback was also allowed. However, in the proceedings for the next year A.O. […]...

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Delay could be condoned on the ground of Wrong Advice of Counsel

Madan Mohan Sharma Vs ITO (ITAT Chandigarh)

Tribunal held that in order to impart justice to the employees/assesses the delay deserves to be condoned. Accordingly, the Tribunal condoned the delay in filing the appeals. Regarding the issue of Section 10(10)(C), the Hon’ble Tribunal allowed the claim of the assessee holding that the authorities below were not justified in disallowi...

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No addition is allowed if the minor difference is only 3.24% between declaration of Assessee & Calculation made by DVO

DCIT Vs Sanjay Seth (ITAT Lucknow)

The Hon’ble Tribunal held that the DVO has estimated the cost of investment at Rs.3,58,39,100/- against the cost of investment declared by the assessee at Rs.3,47,12,678/-. Therefore, the difference is about 3.24% and for this minor difference, no addition is called for. Since the difference is very nominal, no addition is called for in...

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Statement U/s. 132(4) without any supporting material does not have any evidentiary value

M/s. Avishkar Infrastructure Pvt. Ltd. Vs DCIT (ITAT Mumbai)

The sole basis of the Department to assess profit of Rs.70.00 lacs is based upon the statement recorded under section 132(4) of the Act. It is a matter of fact that by the time statement was recorded, the entire project was not sold by the assessee. Only two shops were sold....

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Deduction U/s. 10B is allowed only on “undertaking” not on “whole Business”

M/s. Unicorn Natural Products Limited Vs DCIT (ITAT Hyderabad)

The Hon’ble Tribunal observed that the company has maintained and submitted separate set of accounts. There was a confusion between the total turnover of the business and total turnover of the undertaking. The Hon’ble Tribunal held that in the proviso to section 10B, there is reference to computation of total income of Undertaking....

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Furnishing of Name, Address, PAN and Bank Statements are Sufficient compliance u/s 68

Shri Suresh Chandra (Indl.) Vs DCIT (ITAT Lucknow)

Mere cash deposit in the bank account of the creditor cannot be said that the creditor has no creditworthiness. Then by disagreeing by the other decisions the Hon’ble Tribunal held that in the present case, not even a notice was issued by the Assessing Officer to the creditors to examine and verify the case of the assessee regarding cre...

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