The Delhi High Court held that assessing officer can initiate the notice for re-assessment with the reasons to believe and with reference to any fresh tangible material.
The writ petitions under Article 226 /227 of the Constitution of India are directed against the notice issued by respondent No.1 under Section 148 of the Income Tax Act for the assessment year (AY) 2012-13 and the orders disposing of the objections filed by the respective petitioners and also the proceedings emanating therefrom.
The petitioner is a private limited company engaged in the business of construction-development projects. Pursuant to a scheme of amalgamation approved by this Court vide order dated 20.12.2012, M/s. Experion Developers International Pvt. Ltd amalgamated with M/s. Experion Developers Pvt. Ltd
During the financial year relevant to the assessment year under consideration i.e. AY 2012-13, (FY 2011-12) the Petitioner and the erstwhile-assessee, EDIPL, were separate/independently assessable assessees.
For the assessment year under consideration, i.e., AY 2012-13, as Petitioner (EDPL) was the only surviving entity, it alone filed return of income declaring loss of Rs.7,82,95,075/-. The return of income was selected for scrutiny and after making certain disallowances, the total income was assessed at Rs. 90,15,239/- and assessment order dated 19.03.2015 was passed under Section 143(3) of the Act.
The said order is presently a subject matter of a pending appeal.
The division bench comprising of Justice Vipin Sanghi and Justice Sanjeev Narula pronounced the judgment based on a writ petition filed by Experion Developers Private Limited.
Section 147 and 148 of Income Tax Act is a well-designed weapon for the Income Tax Department empowering it to assess, re-assess or re-compute income, turnover, etc, which has escaped assessment. Assessment and Re-assessment is a procedure adopted to determine the correctness of the income disclosed by the assessee and tax payable thereon.
The expression “reason” in Section 147 of the Act means a “cause” or “justification”. The Assessing Officer can be said to have reason to believe that income has escaped assessment if he has a cause or justification to know or suppose, that income has escaped assessment.
The bench observed that the tangible material in the present case is information received by the AO from DIT. The relevant portion of the said report revealed that “Gold Singapore” does not appear to be carried out regular business activities in Singapore.
The bench also observed the series of transactions undertaken through complex legal arrangements among entities spread across various jurisdictions to fund investments made in India, justifies the AO to form a “reason to believe” to investigate the genuineness of the funds and creditworthiness of the investing entities.
While dismissing the writ petition court opined that the AO had sufficient tangible materials and was justified in issuing the notice for re-assessment.
Subscribe Taxscan Premium to view the JudgmentThe Central, Excise and Service Tax Appellate Tribunal ( CESTAT ), Chandigarh held that the appellant is not liable to pay service tax for membership subscription as a levy of service tax in respect of services provided under ‘Club & Association Services’.
The appellant is providing the service of Mandap Keeper Services, Exhibition Services, Management Consultancy Services, Sponsorship Services and Club and Association Services, Advertising & Conventions Services, they were paying service tax thereon.
During the course of Audit, it was found that the appellant was collecting membership subscription from its members but started paying service tax only, but prior to that the membership subscription they have not paid service tax under the category of ‘Club & Association Services’ during the period 16.06.2005 to 31.12.2008.
Therefore, the show cause notice was issued to the appellant and demand on service tax was confirmed against them. Against the said order, the appellant filed an appeal.
The Appellate Tribunal includes Judicial Member, Ashok Jindal, and Technical Member, Sanjiv Srivastava pronounced the order based on an appeal filed by M/s Confederation of Indian Industry.
In the light of the judgment in the case of State of West Bengal & Ors. Vs. Calcutta Club Limited and Federation of Surat Textile Traders Association vs. UOI the tribunal came into the conclusion that the appellant is not liable to pay service tax for membership subscription as a levy of service tax in respect of services provided by the appellant to its member is not liable to pay service tax.
While allowing the appeal the CESTAT said that no service tax is payable on membership subscription paid by the members of the appellant for providing services by the appellant to its members, therefore, the appellant is not liable to pay service tax.
Subscribe Taxscan Premium to view the JudgmentA couple of problems now awaits those who have not linked their Aadhaar card with their pan card. The income tax department had earlier announced that all unlinked PAN cards will be declared as “inoperative” and now, it has issued a new notification saying that such Permanent Account Holders cardholders shall face consequences under the Income Tax Act for not furnishing PAN. As per the notification, If one fails to link your PAN card with Aadhaar card within the deadline of March 31, then the income tax department might impose a penalty of ₹10,000 on you for using an inoperative Permanent Account Number.
The Supreme Court of India in 2018 had declared Aadhaar as constitutionally valid and held that the biometric ID would remain mandatory for the filing of income tax returns and allotment of PAN cards.
Section 139 AA (2) of the Income Tax Act says that every person having Permanent Account Number as on July 1, 2017, and eligible to obtain Aadhaar, must intimate his Aadhaar number to the tax authorities.
TaxScan had earlier reported about the Gujarat High Court order where the court had held that the permanent account number cannot be declared inoperative due to the non-linking of Aadhaar or Aadhaar number. This notification is now prima facie in violation of the said judgment.
Guide to link PAN with Aadhaar:
There are two ways to link your PAN card to your Aadhaar card: through SMS and/or through the IT department website.
Send this message — UIDPAN <space> <12-digit-Aadhaar no.> <space> <Alphanumeric 10-digit PAN number> — either to 567678 or 56161.
Step 1: Visit the Income Tax Department e-filing portal – incometaxindiaefiling.gov.in
Step 2: Go to ‘Link Aadhaar’ option on the left side of the homepage
Step 3: Enter your Permanent Account Number, Aadhaar numbers and your name as per AADHAAR
Step 4: Mark ‘I have the only year of birth in Aadhaar card,’ if you have only the birth year on the Aadhaar
Step 5: Mark ‘I agree to validate my Aadhar details with UIDAI,’ if you agree to do so
Step 6: Enter the captcha code on your screen
Step 7: Click on ‘Link Aadhaar’ option to request linking of PAN and Aadhaar
The National Anti-Profiteering Authority (NAA) held that Supertech limited not guilty of profiteering ratio of Input Tax Credit to turnover in a post- GST period was lower than the pre-GST period
The brief facts of the present case are that the Applicant No. 1 had filed an application before the Standing Committee on Anti-Profiteering under Rule 128 of the Central Goods & Services Tax (CGST) Rules, 2017.
The Applicant No. 1 had stated in his application that the Respondent had resorted to profiteering in respect of the supply of construction services related to the purchase of Flat J-66C, in the Respondent’s project “Officer Enclave”.
The Applicant No. 1 had also alleged that the Respondent Supertech limited had not passed on the benefit of Input Tax Credit (ITC) by way of commensurate reduction in the price of the apartment purchased by him, on implementation of GST
The said application was examined by Standing Committee on Anti-Profiteering and forwarded with its recommendation to the DGAP for detailed investigation under Rule 129(1) of the CGST Rules, 2017 to investigate whether the benefit of reduction in the rate of tax or ITC had been passed on by the Respondent to his recipients.
Thereafter, the DGAP had issued a notice to the Respondent calling upon the Respondent to reply as to whether he admitted that the benefit of ITC had not been passed on to the Applicant No. 1 by way of commensurate reduction in price with respect to the project mentioned in his Application
The Coram comprising of Chairman, B.N Sharma and two Technical Members, J C Chauhan and Amand Shah pronounced the order based on an application filed against M/s Super tech Limited.
“Explanation:- For the purpose of this section 171, the expression “profiteered” shall mean the amount determined on account of not passing the benefit of reduction in rate of tax on supply of goods or services or both or the benefit of input tax credit to the recipient by way of commensurate reduction in the price of the goods or services of both.”
The authority has observed that the provisions of Section 171 of the Act had been contravened and also said that in the present case, as evident from the DGAP Report, the Respondent has not contravened the provisions of Section 171 of the Act.
Subscribe Taxscan Premium to view the JudgmentThe Securities and Exchange Board of India (SEBI) has issued clarifications on Operating Guidelines for Investment Advisers in the International Financial Services Centre (IFSC).
Based on the representation received from the stakeholder regarding the said circular, the net worth requirement for registered Investment Adviser in IFSC is revised to UD 700,000.
The SEBI also clarified that existing recognized entities in the International Financial Services Centre (IFSC) can also apply for IA registration without forming a separate company or LLP.
This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
Subscribe Taxscan Premium to view the JudgmentThe Tamil Nadu Budget 2020 has proposed a reduction of Stamp Duty for rental agreements to promote voluntary compliance and to enable both the landlords and tenants to realize the full benefits of registration.
The reduction is applicable for rental agreements for residential property for a period of up to five years, from the current 1 percent to 0.25 percent. The Registration Charges on such agreements will also be reduced from 1 percent to 0.25 percent subject to a maximum of Rs.5,000.
The Tamil Nadu Regularization of Rights of Landlords and Tenants Act, 2017 has come into force and all existing tenancies need to be registered under the Act before the extended date of 19th September 2020. Stamp duty is payable on all rental agreements including those which are of less than one year.
All tenancy acts are regulated under the TNRRRLT Act which has come into force on Feb 22nd, 2019. An exclusive portal www.tenancy.tn.gov.in has also been launched along with it to ensure better felicitation of housing opportunities and to safeguard the rights of property owners and tenants of the State.
The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) has held that the provisions of section 68 of the Income Tax Act, 1961 would not be applicable in case of swapping of company shares in lieu of shares by the shareholders.
During the assessment proceedings, the Assessing Officer noted that the assessee has raised share capital including share premium to the tune of Rs.5,01,00,000/-. The AO added back the said amount of share capital including premium raised treating the same as unexplained cash credit under section 68 of the Act.
On the first appeal, the Commissioner of Income Tax (Appeals) confirmed the said order.
We have heard rival submissions and gone through the facts and circumstances of the case. The addition u/s. 68 of the Act was reported by the AO and confirmed by the Ld. CIT(A) on the share capital and premium of Rs.5,01,00,000/-.
Before the Tribunal, the assessee contended that no sum of money has been collected for transfer of shares, whereas shares have been received by the assessee in lieu of exchange of its shares and therefore, no addition under section 68 of the Act can be made.
The Tribunal, while holding in favor of the assessee, observed that there is no cash transferred for the shares by the assessee.
“We note that the assessee had swapped shares in lieu of shares. In the facts and circumstances of the case and respectfully following the aforesaid judicial precedents relied upon hereinabove, we hold that the AO had erroneously invoked the provisions of section 68 of the Act to the facts of the instant case, which, in our considered opinion, are not at all applicable herein. This is a simple case of acquiring shares of certain companies from certain shareholders without paying any cash consideration and instead, the consideration was settled through the issuance of shares to the respective parties. Hence we hold that provisions of section 68 of the Act are not applicable in the instant case,” the ITAT said.
Subscribe Taxscan Premium to view the JudgmentThe Ministry of Corporate Affairs ( MCA ) has exempted the experienced Key Managerial Personnel and Directors from Online Test on the appointment of Independent Directors.
The Central Government has proposed amended rules regarding appointment and qualification of company independent directors and thereafter published in the Gazette of India.
In exercise of the powers conferred by section 149 read, with section 469 of the Companies Act,2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Appointment and Qualification of Directors) Rules, 2014.
The principal rules were published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i) aide notification dated on 31″t March 2074 and were last amended vide notification dated the 22 October 2019.
These rules may be called the Companies (Appointment and Qualification of Directors) Amendment Rules, 2020 and it will come into force after publication of official gazette.
The Companies (Appointment and Qualification of Directors) Rules, 2014, in rule 6, in sub-rule (1), in clause (a), for the words ”three months” the words “five months” shall be substituted;
The following proviso has been substituted, “Provided that an individual shall not be required to pass the online proficiency self-assessment test, when he has served as a director or key managerial personnel, for a total period of not less than ten years, as on the date of inclusion of his name in the databank, in one or more of the following, namely:-
(a) Listed public company; or
(b) An unlisted public company having a paid-up share capital of rupees ten crores or more; or
(c) Body corporate listed on a recognized stock exchange”.
(ii) In the second proviso, for the word ‘companies’ the words “companies or bodies corporate” shall be substituted.
Subscribe Taxscan Premium to view the JudgmentThe Central Government of India extended the term of appointment of Mr. Ajay Tyagi as a Chairman of the Securities and Exchange Board of India (SEBI) for another six months.
The central government through a notification dated February 28, 2020, issued in the name of Joint Secretary, Mr. Anand Mohan Bajaj. The notification extended the tenure of Mr. Ajay Tyagi whose term at the helm was ending on February 28, 2020. The central government announced the extension of the term of appointment to 6 months of Mr. Ajay Tyagi as a Chairman of the Securities and Exchange Board of India (SEBI).
Mr. Ajay Tyagi was an Indian Administrative Service officer of Himachal Pradesh cadre and will continue to head the regulator until the government finds a successor. Mr. Tyagi was an additional secretary at the finance ministry before taking on the role as Chairperson of Chairman of Securities and Exchange Board of India (SEBI) in March 2017.
It is also said that the government received about 2 dozen applications from the candidate for the Chief of Securities and Exchange Board of India (SEBI).
Mr. Tyagi in his regime focussed primarily on the enforcement of the law. Mr. Tyagi was often named as media-shy as he did not appear before the camera in spite of solving various high profile cases pertaining to alleged malpractice by Price Waterhouse in the Satyam Computer Services scam, unfair access to select brokers on the National Stock Exchange’s co-location platform and brokers in the NSEL scandal.
With this notification issued by the central government, Mr. Tyagi will have the third-longest tenure at the helm of the stocks market regulator, trailing that of only DR Mehta whose tenure was from February 21, 1995, to February 20, 2002, and UK Sinha whose tenure was from February 18, 2011, to March 01, 2017.
Subscribe Taxscan Premium to view the JudgmentThe Central Board of Indirect Tax and Customs (CBIC) has implemented an automatic Clearance of Bills of entry on a pilot basis at the Chennai Customs House and Jawaharlal Nehru Customs House.
The notice was issued on February 28, 2020, in the name of OSD Customs, Mr Eric C Lallawmpuia addressing all the commissioners and chief commissioners of Customs and Central Tax.
The subject matter of the circular pertained to implementation of CBIC Automated Clearance on all post basis registrations and the pilot basis is implemented on 2 customs locations i.e. Chennai Customs
House and Jawaharlal Nehru Customs House. Moreover, it was reviewed by the Central Board of Indirect Tax and Customs (CBIC).
On the basis of the reviews taken by the Board it was decided that the CBIC automatic clearance of bills of entry to all the customs formation, wherever, the facility of customs EDI System is operational. The board has decided that it shall take effect from March 5, 2020.
The salient features of the customs clearance of bills were as follows:
The Income Tax Appellate Tribunal (ITAT), Pune bench has held that the IT support services rendered by a French Company to an Indian Company would not constitute a fee for technical services to as per section 9(1)(vi) of the Income Tax Act, 1961.
The assessee, a French Company and a tax resident in France is engaged in the computerization of systems, office automation and utilization of personal computers. It helps the Indian entity to equip (Software, Hardware, and Networks) and implementation of systems.
During the relevant assessment year, the assessee received income of Rs.7,07,19,334/- from IT support cost (Global Information Support Allocation Charges).
The Assessing Officer raised tax demand on the receipt received from the IT support cost is in the nature of fees for technical services and within the meaning of section 9(1)(vii) of the Act r.w. Article 13 of the DTAA between India and France
The assessee objected to the above assessment on the basis of the service agreement entered into Faurecia Systems D‟echappement and Faurecia Emissions Control Technologies Center India Private Limited and submitted an identical issue arose between Faurecia Systems D‟echappement and Faurecia Emissions Control Technologies Center India Private Limited which are sister concerns of the assessee.
The assessee also relied on Tribunal order for A.Y. 2011-12 and submitted that the Tribunal held in favor of assessee.
On perusal of the said order, the ITAT found that this Tribunal in the case of M/s. Faurecia Automotive Holding discussed the identical issue in detail from para 15 and held that the IT support services rendered by the assessee, which are otherwise technical in nature, do not involve any imparting of information concerning technical, industrial, or commercial knowledge to Faurecia, India.
“Mere rendering of services, cannot be brought within the scope of section 9(1)(vi) of the Act and the receipt thereon under IT support services does not fall within the ambit of section 9(1)(vi) of the Act. Therefore, it clear the IT support services received by the Indian entity from assessee do not involve any imparting of information concerning technical, industrial or commercial knowledge and the receipt cannot be held as fees for technical services. Therefore, following the same we hold that the receipts received by the assessee from the Indian entity are not a receipt to be taxed under fees for technical services. The final assessment order passed by the AO is set aside and we direct the AO not to tax the receipt under IT support services as taxable in India in the hands of assessee,” the Tribunal said.
Subscribe Taxscan Premium to view the JudgmentThe CGST Delhi East has busted the Fake Invoice Racket worth Rs. 436 crores. Officers of Anti-Evasion, Central GST Delhi East Commissionerate have unraveled a major operation of Circular Trading, involving the use of fake invoices to claim fraudulent refunds of Input Tax Credit.
Shri Asif Khan, Shri Rajeev Chhatwal and Shri Arjun Sharma operating a total of 17 fake firms procured invoices without actual supply of goods and availed as well as passed on ITC fraudulently, to the tune of Rs. 436 crores. The fraudulently availed ITC was used by them to file refund claims to the tune of Rs. 11.55 crores under Inverted Duty Structure. The said refund claims were also filed by fake firms floated by the accused persons.
The accused persons are related to each other by marriage and were evading investigation for the last month. During the investigation, it came to light that a major Hawala operation was being run by the accused persons in connivance with certain Bank employees (under investigation). The said 17 firms, as stated above, existed only on paper and had been floated for the express purpose of passing on ITC by a generation of fake invoice racket. Companies on both sides of the transactions, recipients as well as suppliers, were found to be non-existent.
Certain businessmen are also under investigation for taking entries from the accused persons for the purpose of money laundering. It was further learned that Shri Asif Khan was running a similar operation even during the erstwhile VAT regime. It came to light that the trio was planning to spread its operations to other States at the time they were apprehended.
Shri Asif Khan, Shri Rajeev Chhatwal and Shri Arjun Sharma appear to have knowingly committed offenses under Section 132(1)(b) and 132(1)(c) of CGST Act, 2017 which are cognizable and non-bailable offenses as per the provisions of Section 132(5) and punishable under clause (i) of Subsection (1) of Section 132 of the Act ibid. They also appear to have committed an offence under Section 132(1)(e) of the Act. Accordingly, the said persons were arrested on 01.03.2020 under Section 69(1) of the CGST Act,2017 and remanded to judicial custody till 13.03.2020 by the Chief Metropolitan Magistrate in Patiala House Court.
Further investigation in the matter is under progress.
The Income Tax Appellate Tribunal (ITAT), Delhi bench has recently deleted the addition for unexplained Investment made by the tax department as there was no evidence to prove that the assessee has paid more than what is mentioned in the Sale agreement.
During the assessment proceedings, the Assessing Officer noticed the assessee has purchased two properties during the year and both the properties were situated in the slum area and were very old and tenanted properties. Since he found that there is a huge difference in the purchase price and circle rate, the AO asked the assessee to explain with evidence as to how the properties were purchased at such a lower value as against the higher circle rate. An addition under section 69 of the Income Tax Act was framed by him against the assessee.
The Tribunal noted that the AO has conducted independent inquiry by recording the statement of the seller of both the properties wherein he has categorically admitted by stating the reason for selling the property at price below the prevalent circle rates.
“Further nothing has been brought on record to prove that the assessee has paid anything extra over and above the value of agreement in any other form of consideration. Nothing has been brought on record that money has emanated from the assessee’s coffers,” the Tribunal observed.
The ITAT noted that the sole reliance in the instant case is the basis of estimates made by the DVO in the valuation report. Referring to a catena of decisions, the Tribunal also noted that additions cannot be made on the basis of surmises and conjectures in the absence of any tangible material on record.
“Since in the instant case assessee has purchased old tenanted properties situated in slum areas, filed copies of sale deeds of properties in the similar vicinity at about the same time which were sold at price below the circle rate also filed valuation report of registered valuer and the seller of the properties has appeared before the AO and has confirmed to have sold the property at the price mentioned in the sale deed only and there is no material available before the revenue authorities that assessee has paid anything more than what is mentioned in the sale deed, therefore, the ITAT has opined that no addition is warranted against unexplained investment in the instant case by invoking the provisions of section 69 of the Act, IT 1961. We, therefore, set aside the order of the CIT(A) and direct the AO to delete the addition,” the ITAT observed.
Subscribe Taxscan Premium to view the JudgmentIn a recent ruling, the Income Tax Appellate Tribunal (ITAT), Delhi bench has held that the provisions of section 50C of the Income Tax Act, 1961 will not be applicable if the assessee is the buyer of the property and not the seller.
The Assessee, an individual, purchased two properties during the year. During the proceedings, the Assessing Officer found a huge difference in the purchase price and circle rate and asked the assessee to explain with evidence as to how the properties were purchased at such a lower value as against the higher circle rate.
The AO further referred the matter to DVO and based on the report, he made an assessment under section, 1961.
Before the authorities, the assessee had filed sale deeds of properties in a similar vicinity at about the same time which were also sold at a price below the circle rate. The assessee submitted that the provisions of section 50C are not applicable in the present case as the assessee is the buyer of the property and not seller of the property. According to the assessee, the provision of section 50C is applicable only in the hands of the seller of the land or building or both and not in the hands of the buyer of the property. Similarly, it was contended that the provisions of section 56 (2) (vii) (b) of the Income Tax Act are also not applicable to the assessee since these provisions were introduced by the finance bill 2013 w.e.f. 01.04.2014 whereas the assessment year involved in the assessment year 2011-12.
While considering the second appeal, the Tribunal held that “In the present case since the assessee is a buyer of the property and not the seller of the property, therefore, the provisions of section 50C are not applicable. Similarly, the assessment year involved is 2011-12 and, therefore, the provisions of section i.e. 56 (2)(vii) (b), which were introduced by finance bill 2013 w.e.f. 01.04.2014 are also not applicable. As per the said amendment if the immovable properties are purchased /received for inadequate consideration, i.e. less than stamp duty value by Rs.50,000/- or more, then the difference between the stamp duty value and inadequate consideration shall be taxable in the hands of the individual or HUF as income from other sources.”
Subscribe Taxscan Premium to view the JudgmentThe Kerala State Goods and Service Tax (KSGST) Department found a way out to address the Goods and Service Tax (GST) Grievances by the way of establishing a Structured Grievance Redressal Mechanism.
On February 20, 2020, in the 38th meeting decided to establish a Structured Grievance Redressal Mechanism in order to address the Goods and Service Tax (GST) which can be either general or specific or general in nature.
In order to resolve the Goods and Service Tax (GST) Grievances a committee namely Grievance Redressal Committee is consented by the Goods and Service Tax (GST) Council at the Zonal level comprising members of both the state as well as central level who must be the representatives of Trade and Industry and other Goods and Service Tax (GST) Stakeholders.
Grievance Redressal Committee will comprise of the Chief Commissioner of Central Tax (Co-chair), Commissioner of State Tax (Co-chair). Representatives of Trade Associations up to 12 nos., Representatives of prominent Association of Tax professionals up to 4 nos., Central and State Nodal officers of ITGRC (IT Grievance Redressed Cell), Representatives of GSTN assigned to the State, Additional Joint Commissioner Central and State (Secretaries of GRC) and Any other member with the permission of the Co-chairs.
Various function of the committee was prescribed in the meeting, wherein it was discussed that the committee meeting will be commenced at least once in the span of 4 months or as decided by the Co-chairs. In order to handle the grievance, GSTN will develop a portal in order to record all such grievance and their disposal.
Subscribe Taxscan Premium to view the JudgmentThe Income Tax Department conducted a Search in the case of a prominent business group based in Chennai dealing in the business of nonferrous metal processing in lead, copper and aluminium and Money Lending activities. The group is said to have reported a turnover of more than a thousand crore and engaged in a number of businesses such as plastic manufacture and financing activities.
The highlight of the Income Tax Search search is the discovery of hidden cloud servers other than the servers regularly used by the group for accounting, containing unaccounted transaction details often referred by the group as “kaccha” accounts. Similarly, a large amount of encrypted data was retrieved from a pen drive which was tracked and obtained from a third party premise. The pen drive and the database was decrypted to gather information about the unaccounted capital accumulated by the group. Evidences were also gathered for the introduction of unaccounted funds as bogus share premium in one of the group companies.
A large number of property documents, Promissory notes, post-dated cheques taken as collateral security, etc in the money lending business were recovered during the search and have been seized. As per evidence detected during the search, the search action resulted in cash seizure of Rs. 1 crore and detection of unaccounted income exceeding Rs. 400 crore. The investigations are still ongoing and the Department is in the process of finalizing the proceedings.
The Pune bench of the Income Tax Appellate Tribunal (ITAT) has observed that the stamp value on the date of agreement to sell shall be considered as full value of consideration for the purpose of section 50C of the Income Tax Act, 1961 only if the amount of consideration or part of such consideration was received by the assessee through banking channel on or before the date of agreement for transfer.
The assessee, an individual engaged in the business of sale of construction material and labour contract, had sold an immovable property worth Rs.77,29,177/- along with his brother. The consideration was received in F.Y. 2007-08 & 2008- 09. The valuation of the property as per stamp valuation authority was Rs.4,63,79,591/-. The Assessing Officer applied sec 50C of the Act. The difference between the consideration received and the stamp valuation authority, the value was Rs.3,86,50,414/-. As the assessee was the owner of half portion of the property, half of the amount i.e. Rs.3,86,50,414/2 was added to the income of the assessee.
Before the Tribunal, the assessee contended that the issue has been held in favour of the assessee by the Tribunal in a case relating to a different assessment year.
While perusing the order, the Tribunal remanded the matter back to the assessee and observed that “it is evident that the benefit of the first proviso would be allowed only if the condition as stipulated in the second proviso is satisfied. In other words, the stamp value on the date of agreement to sell shall be considered as the full value of consideration only if the amount of consideration or part of such consideration was received by the assessee through the banking channel on or before the date of agreement for transfer. This issue, therefore, needs detailed factual verification.”
Subscribe Taxscan Premium to view the JudgmentThe of the United States of America (U.S.A.) unanimously rules in “a curious corner of the law” in the tax refund case has a massive economic significance.US Supreme Court unanimously rules in a ‘curious corner of law in the Tax Refund case has a Massive Economic Significance
In the case of Rodriguez v. Federal Deposit Insurance Corporation (FDIC), Justice Neil Gorsuch delivered a statement and said that this case is a strange case, which he calls “a curious corner of the law”.
The dispute arises from $4 million tax refund that the IRS gave United Western Bancorp, INC (UWBI), which is its subsidiary, United Western Bank (UWB) claims to belong to it. Subsequently, both the subsidiary and the parent company filed for bankruptcy. Now, in this case, Simon Rodriguez who is the trustee for the parent corporation i.e. United Western Bancorp, INC (UWBI), is now challenging the Federal Deposit Insurance Corporation (FDIC), the receiver for the bank, saying the $4 million belong to United Western Bancorp, INC’s (UWBI) estate.
The subject matter of the case pertains to a dispute between two affiliated corporations about the allocation of $4 million return on the calculated taxes. The issue raised in this case was which corporation was entitled to get the refund amount?
The court had the option to make use of a rule named Bob Richards rules wherein it determines how a consolidated corporate tax refund is distributed in bankruptcy cases. However, this principle is taken into consideration by only a few courts and is nowhere written into any congressionally approved statute.
The Supreme Court of the US resolves circuit splits on the question of law. Bob Richard’s rules were taken by the Supreme Court to decide this case. And so it was concluded that ‘Bob Richards rules, we hold, supplies no appropriate rule of decision which is only a cautionary tale about the limits of federal common lawmaking.’
The National Institute of Wind Energy (NIWE) has proposed to recruit one post of Additional Director (Finance & Administration) vacancy of CA. The place of posting will be at Chennai on Deputation Basis for one year which is subjected to an extension.
The Institute is the technical arm of the Ministry of New and Renewable Energy, Govt. of India in the field of Wind Energy. NIWE plays a proactive role in the development of Wind Energy especially in Wind Resources Assessment, Testing/Type Certification of Wind Turbine Generators, Research & Development, and Information & Training Services.
Eligibility Conditions
Persons working under the Central Government or State Governments or Union territory Administrations or Public Sector Undertakings or Central Universities or recognized research institutions or Semi-Government or Autonomous Bodies or Statutory Organizations funded by Government:-
Band 3 – Rs.15600-39100 with GP of Rs.6600 of 6th CPC) or equivalent.
having adequate background and experience of relating to administrative, financial, personnel procurement and project financing matters and possessing a Master’s Degree from a Recognized University / Institution.
Educational Qualification:
A Post-graduate degree, such as Master of Business Administration OR Company Secretary OR Cost Accountant OR Chartered Accountant.
Age limit: The maximum age-limit of appointment by deputation shall not exceed 56 years as on the closing date of receipt of applications NIWE vacancy.
Pay of the selected candidate will be in the pay Level 12 of 7th CPC – Rs.78800 [Pay Band 3 – Rs.15600-39100 with GP of Rs.7600 of 6th CPC] and is fixed in the scale of the post in accordance with rules prescribed by the Government.
For more details about the NIWE vacancy, click here.
The Electronics Corporation of Tamil Nadu Limited has invited applications from the candidates who are qualified Chartered Accountant, CA(Intern) and ICWA for Direct Recruitment
The details of the vacancy are as follows:
| POST | Number of Posts | Educational Qualification | Work Experience | Scale of Pay |
| Manager (Finance & Accounts) | 2 [GT- 1, SC(A)- Woman- 1] | Chartered Accountant | 5 years with a minimum of 3 years in Junior managerial position
| Level 25 of Pay Matrix : Rs.59,300 – 1,87,700
|
| Deputy Manager (Finance & Accounts) | 4 [MBC & DC- 1, BC (other than BC Muslim) (PSTM)- 1, BC Muslim- 1, SC- 1] | CA(Inter)/ ICWA | 3 years
| Level 22 of Pay Matrix : Rs.56,100 – 1,77,500
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The Last date for submission of applications by Registered Post is up to 5.45 pm on or before 12.03.2020.Vacancy for CA/ICWA at Electronics Corporation of Tamil Nadu
For more details and the application form download, click here: https://elcot.in/index/sites/default/files/ELCOT%20Recruitment_0.pdf
The Income Tax Appellate Tribunal (ITAT) of Ahmedabad held that General Deduction allowable on Legal and Professional Fees incurred for the improvement of day to day working of Company.
During the course of assessment proceedings, the AO observed that the appellant has incurred an amount of Rs. 6,00,00,000/- on account of legal and professional fees paid to one M/s. Emerging India Investment Advisors Pvt. Ltd.
It was further found by the Ld. AO that such expenditure has been incurred for the preparation of feasibility study for improvement and set up of coal logistic business in terms of the agreement by and between the appellant and the service provider.
It was observed that such a feasibility study would primarily involve a feasibility study for setting up of new facilities or services. Such expenditure, according to the AO is covered under the provision of Sec. 35D and the same should be amortized to the extent of 1/5th of the expenditure during that year.
On that basis 1/5th of the said expenditure to the tune of Rs. 6,00,00,000/- to Rs. 1,20,00,000/- was allowed as a deduction and balance of Rs. 4,80,00,000/- was added to the total income of the assessee to be amortized in subsequent years. In an appeal, the addition was deleted by the CIT(A), Hence, Revenue AO is before the Tribunal.
The Tribunal comprising of Judicial Member, Madhumita Roy, and Accountant Member, Waseem Ahmed pronounced the judgment on an appeal filed against M/s. Adani Logistics Ltd.
The Tribunal observed that the appellant has incurred the expenditure for improving its coal logistic and the genuineness whereof has not been doubted by the AO when the said expenditure is allowable as revenue expenditure in one year without differing the same for a further period of 5 years or so on.ITAT allows Deduction on Legal and Professional Fees incurred to improve day to day working of Company
The Tribunal also observed that the nature of expenditure was for the improvement of the regular day-to-day working of the assessee-company and wholly and exclusively for the business purpose. The entire expenditure ought to have been allowed by the AO as revenue expenditure.
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