IT : Section 54 and section 54F are independent provisions and assessee can claim exemption under both sections for investment in same house
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[2013] 32 taxmann.com 157 (Hyderabad - Trib.)
IN THE ITAT HYDERABAD BENCH 'A'
Venkata Ramana Umareddy
v.
Deputy Commissioner of Income-tax, Circle-3(3), Hyderabad*
CHANDRA POOJARI, ACCOUNTANT MEMBER
AND SAKTIJIT DEY, JUDICIAL MEMBER
AND SAKTIJIT DEY, JUDICIAL MEMBER
IT Appeal No. 552 (Hyd.) of 2012
[ASSESSMENT YEAR 2008-09]
[ASSESSMENT YEAR 2008-09]
JANUARY 18, 2013
Section 54, read with section 54F, of the Income-tax Act, 1961 - Capital gains - Profit on sale of property used for residential house [Section 54/54F deduction] - Assessment year 2008-09 - Whether sections 54 and 54F are independent provisions having application under different situations and there is also no specific bar either under sections 54 and 54F or any other provision of Act prohibiting allowance of exemption under both sections in case conditions of provisions are fulfilled - Held, yes - Whether where long-term capital gain arose from sale of two distinct and separate assets, viz., residential house and plot of land, and assessee had invested entire capital gain in purchase of a new residential house, he was entitled to claim exemption under both sections - Held, yes [In favour of assessee]
FACTS
Facts
| ■ | During the relevant financial year, the assessee had earned long-term capital gain out of transfer of two distinct and separate assets; one being a plot of land and the other being a house property. He claimed that the entire long-term capital gain arising from the sale of the two assets was invested in purchase of the new residential house and, hence, he was entitled to avail exemption under sections 54 and 54F. | |
| ■ | The Assessing Officer rejected such claim by holding that for claiming exemption under sections 54 and 54F the assessee had to invest in two houses. | |
| ■ | The Commissioner (Appeals) dismissed the assessee's appeal. |
Issue for consideration
| ■ | Whether assessee can claim exemption under both section 54 and section 54F against investment in same residential property? |
HELD
| ■ | Sections 54 and 54F are independent of each other. Section 54 provides exemption of capital gain in case of transfer of a long-term capital asset being a residential house, the income of which is chargeable under the head 'income from house property' and the assessee within the prescribed time has purchased or constructed a new residential house. Section 54F provides exemption of capital gain in case of transfer of any long-term capital asset, not being a residential house and assessee within the prescribed time has purchased or constructed new residential house. | |
| ■ | A reading of sections 54 and 54F makes it clear that they are independent of each other and operate in respect of long-term capital gain arising out of transfer of distinct and separate long-term capital assets. However, both the sections allow exemption only on purchase or construction of a new residential house. | |
| ■ | In the instant case, the assessee had sold two distinct and separate long-term capital assets, viz., one is a residential house which comes under section 54 and the other is a plot of land coming within ambit of section 54F. The assessee has also purchased a residential house within the prescribed period in terms of both sections 54 and 54F for a price much more than the total long-term capital gain. | |
| ■ | The only reasoning on which the lower authorities have rejected assessee's claim of exemption under section 54 is that the assessee cannot claim exemption under both the sections towards investment in a single house. According to the lower authorities, for claiming exemption both under sections 54 and 54F the assessee has to invest in two houses. | |
| ■ | Such an interpretation of the provisions is totally misconceived and misplaced. The restriction imposed under the proviso to section 54F(1) clearly debars exemption if the assessee purchases or constructs more than one residential house. [Para 8] | |
| ■ | There is also no specific bar either under sections 54 and 54F or any other provision of the Act prohibiting allowance of exemption under both the sections in case the conditions of the provisions are fulfilled. In the facts of the instant case, since long-term capital gain arises from sale of two distinct and separate assets, viz., residential house and plot of land and the assessee has invested the entire capital gain in purchase of a new residential house, he is entitled to claim exemption both under sections 54 and 54F. [Para 9] |
Roopanjali for the Appellant. M.H. Naik for the Respondent.
ORDER
Saktijit Dev, Judicial Member - The assessee has filed this appeal being aggrieved by the order dated 31-1-2012 of CIT (A)-IV, Hyderabad passed in appeal No.205/DCIT 3(3)/CIT(A)-IV/10-11 pertaining to the assessment year 2008-09.
2. Ground Nos. 1 and 7 are general in nature, hence needs no adjudication. In ground Nos. 2 to 5, the assessee has challenged the denial of exemption claimed u/s 54 of the Act by the lower authorities on the ground that the assessee cannot claim exemption both u/s 54 and 54F for investment in the same house.
3. Briefly the facts are, the assessee is an individual. For the impugned assessment year the assessee filed his return of income on 29-9-2008 declaring income of Rs. 53,60,050/- and agricultural income of Rs. 3,17,628. Initially the return was processed u/s 143(1) of the Act. However, subsequently assessee's return was selected for scrutiny by issuing a notice u/s 143(2) of the Act. During the assessment proceeding the AO noticed that the assessee during the relevant financial year has transferred land to a developer under a development agreement and has earned long term capital gain of Rs. 49,19,513. The assessee has also sold a house along with land and earned long term capital gain of Rs. 44,05,302. Assessee had claimed the entire amount of long term capital gain of Rs. 93,24,815/- exempt u/s 54 and 54F of the Act towards investment in a new house at Sagar Society, Banjara Hills, Hyderabad which was purchased for a total price of Rs. 1,43,26,665. The AO on interpreting sec. 54 and 54F came to a conclusion that for claiming exemptions under both the sections i.e., 54 and 54F, the assessee has to invest in two houses. On the aforesaid basis the AO disallowed exemption claimed u/s 54 of the Act and added back an amount of Rs. 44,05,302/- to the total income.
4. The assessee being aggrieved of the addition made filed an appeal before the CIT(A). In course of hearing of appeal before the CIT(A), the assessee contended that section 54 and 54F are independent provisions and are not mutually exclusive. It was submitted that sec. 54 provides for exemption when the asset transferred is a residential house property whereas sec. 54F applies when the asset transferred is an asset other than a residential house property. However, both the sections require investment in a new house. It was submitted, neither sec. 54 and 54F nor any other provision of the Act restrict the assessee from claiming exemption under both the aforesaid sections against investment in the same residential property. It was submitted that the Act does not require that for claiming exemption u/s 54 and 54F of the Act, the assessee has to invest in two separate houses. The assessee also made an alternative submission that the entire long term gain of Rs. 93,24,815 should have been allowed as exemption u/s 54F of the Act as the property on transfer of which exemption was claimed u/s 54 was in fact only a land having a watchman's room admeasuring 200 sq. ft. The constructed room occupies an insignificant portion of the plot. It was further submitted that the property supposed to be transferred as prescribed by sec. 54 is a residential house, the income of which is chargeable under the head income from house property. However, in assessee's case it cannot be considered to be a residential house as the room constructed over the plot of land was small room not capable of being let out. The assessee also relied upon various decisions in support of his contention.
5. The CIT(A) however rejected both the contentions of the assessee by holding in the following manner:-
"6. I have gone through the facts of the case and the submissions of the appellant. From the provisions f sections 54 and 54F it is clear that the incentive intent. While the purpose of both these sections is to give a fillip to the Housing Sector, evidently, different sources for investment in a residential house have been envisaged there under. Under the circumstances, it is clear that both these sections are not only independent, but mutely exclusive too. In fact, the conditions regarding ownership of another residential house at the time of investment in new asset clearly show that the two are meant to operate in a exclusive manner and cannot be clubbed together for getting a bigger advantage of exemption on account of bigger investments. Under the circumstances, I do not find any infirmity in the view taken by the AO that the appellant could not have claimed deduction both u/s 54 and 54 F against the same new asset.
6.1 As regards the alternative argument f the representative of the appellant that the exemption claimed u/s 54F also should have been considered u/s 54 itself, as the watchman's room, admeasuring 200 sq. ft., built on the plot of land sold by the appellant could not have been considered as a house property chargeable to tax under the head 'income from house property', it is clear that the appellant had himself shown the said property as such a property in the return of income filed by him under due verification. Beside, the claim so made was not revised on any subsequent occasion by way of a revised return. Therefore, in the light of the decision of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. (284 ITR 323), the alternative ground so raised cannot be accepted at this stage, as there is no provision in the Act allowing an amendment in the return without a revised return. In the light of the above discussion, the grounds raised in this appeal are decided against the appellant.
6. The learned AR reiterating the stand taken before the CIT(A) submitted before us that, sec. 54 and 54F deal with sale of different assets and call for investment in house property. While sec. 54 provides for exemption of capital gain on transfer of a residential house if invested in another residential house, sec. 54F provides for exemption of capital gain arising out of transfer of other assets if invested in residential house. The learned AR submitted that both these sections are independent and operate in isolation. Though these sections deal with different scenarios and call for investment in a residential house while operating in that particular scenario. The learned AR submitted that the interpretation of the lower authorities that as these two sections are separate and call for investment in one residential house and therefore the assessee should have invested in two different house is not a correct interpretation. The learned AR submitted that no double deduction is claimed as the entire capital gain arising out of sale of residential house is invested in the part of the new residential house and the sale consideration received from sale of plot of land is invested in another part of the new house. The learned AR submitted that these sections have to be interpreted liberally in order to maintain the assessee of the contention of the legislature which is invested in a new residential house.
7. The learned DR supported the orders of the lower authorities.
8. We have considered submissions of the parties and perused the materials on record. We have also applied our mind to the various decisions cited before us. Facts which are undisputed are, the assessee during the relevant financial year had earned log term capital gain out of transfer of two distinct and separate assets. One is a plot of land and the other is a house property. The total long term capital gain on transfer of these two assets is Rs. 93,24,815. The assessee had purchased a new residential house within the prescribed time for a consideration of Rs. 1,43,26,665/-. It is the claim of the assessee that the entire long term capital gain arising from the sale of the two assets were invested in purchase of the new residential house hence the assessee is entitled to avail exemption u/s 54 and 54F of the Act whereas the AO has rejected such claim by holding that for claiming exemption u/s 54 and 54F the assessee has to invest in two houses. At this stage it is profitable to examine the provisions as contained in the aforesaid two sections. Section 54 provides exemption of capital gain in case of transfer of a long term capital asset being a residential house, the income of which is chargeable under the head income from house property and the assessee within the prescribed time has purchased or constructed a new residential house. Sec. 54F provides exemption of capital gain in case of transfer of any long term capital asset, not being a residential house and assessee within the prescribed time has purchased or constructed new residential house. A reading of section 54 and 54F makes it clear that they are independent of each other and operate in respect of long term capital gain arising out of transfer of distinct and separate long term capital assets. However, both the sections allows exemption only on purchase or construction of a new residential house. In the appeal before us the assessee had sold two distinct and separate long term capital assets viz., one is a residential house which comes under section 54 and the other is a plot of land coming within the ambit of section 54F. The assessee has also purchased a residential house within the prescribed period in terms with both sec. 54 and 54F for a price much more than the total long term capital gain. The only reasoning on which the lower authorities have rejected assessee's claim of exemption u/s 54 is that the assessee cannot claim exemption under both the sections towards investment in a single house. According to the lower authorities for claiming exemption both u/s 54 and 54F the assessee has to invest in two houses. In our view, such an interpretation of the provisions is totally misconceived and misplaced. The restriction imposed under the proviso to section 54F(1) clearly debars exemption if the assessee purchases or constructs more than one residential house.
9. At the cost of repetition, we would like to reiterate that sec. 54 and 54F apply under different situations. While sec. 54 applies to long term capital gain arising out of transfer of long term capital asset being a residential house, sec. 54F applies to long term capital gain arising out of transfer of any long term capital asset other than a residential house. However the condition for availing exemption under both the sections is purchase or construction of a new residential house within the stipulated period. There is also no specific bar either u/s 54 and 54F or any other provision of the Act prohibiting allowance of exemption under both the sections in case the conditions of the provisions are fulfilled. In the facts of the present case, since long term capital gain arises from sale of two distinct and separate assets viz., residential house and plot of land and the assessee has invested the entire capital gain in purchase of a new residential house, in our view, he is entitled to claim exemption both u/s 54 and 54F of the Act. We therefore direct the AO to delete the addition of Rs. 44,05,302/-. Hence, these grounds are allowed.
10. Ground No.6 reads as under:-
"Without prejudice to the above grounds, the AO failed to take note of the fact that exemption claimed u/s 54 could have been allowed u/s 54F, as the property sold was basically a plot consisting of a watchman's room admeasuring 200 sq.ft."
In view of our decision in ground Nos. 2 to 5 (supra), ground No.6 has become merely academic and needs no adjudication, hence is dismissed.
11. In the result, the appeal filed by the assessee is allowed in part as indicated above.
Regards,
Pawan Singla
BA (Hon's), LLB
Audit Officer
INCOME TAX REPORTS (ITR)
Volume 352 Part 3 (Issue dated 22-4-2013)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
HIGH COURTS
Capital gains --Business income--Trading or investment--Long-term capital gains--Assessee treating land as fixed asset for a long time and using it for agricultural purposes--No evidence that assessee purchased land by funds borrowed--Sale proceeds resulting long-term capital gains and not business income--Income-tax Act, 1961-- CIT v. Delhi Apartments Pvt. Ltd. (Delhi) . . . 322
Capital or revenue expenditure --Company--Expenditure on debenture--Debenture to be converted subsequently to shares--Expenditure deductible--Income-tax Act, 1961, s. 37-- CIT v . Havells India Ltd . (Delhi) . . . 376
----Expenditure on installation of new unit--Finding that new unit constituted extension of existing business and there was common management--Expenditure deductible--Income-tax Act, 1961, s. 37-- CIT v. Havells India Ltd .
(Delhi) . . . 376
----Expenditure relating to voluntary retirement scheme in respect of two units of assessee--Closure of two units not resulting in closure of business of assessee--Expenditure incurred for purpose of restructuring to achieve modernisation--Allowable as revenue expenditure--Income-tax Act, 1961, s. 37(1)-- CIT v. Foseco India Ltd .
(Bom) . . . 320
Deduction of tax at source --Non-resident--Effect of section 9(1)(vii)(b)--Meaning of source of income--Manufacture of products in India--Payment to US company for certification facilitating export--Source of income within India--Section 9(1)(vii) applicable--Question of liability under DTAA between USA and India not considered--Matter remanded--Income-tax Act, 1961, ss. 9(1)(vii), 40(a)(ia), 195-- CIT v . Havells India Ltd. (Delhi) . . . 376
Exemption --Educational institution--Denial of exemption under section 10(23C)(vi)--Registration under section 12A cannot be cancelled on basis of order denying exemption--Exemption can be claimed without applying for registration--Both are independent proceedings--Income-tax Act, 1961, ss. 10(23C)(vi), 12A-- CIT v . Society of Advanced Management Studies (All) . . . 269
Export --Special deduction--Different units of assessee engaged in manufacturing of different goods--Does not make separate units of assessee separate and different assessable units--Loss of one division to be adjusted against profit of other division for purposes of computation of deduction under section 80HHC--Income-tax Act, 1961, s. 80HHC-- Madhav Marbles and Granites Ltd. v. Asst. CIT (Raj) . . . 331
Income --Accrual of income--No transfer of possession during previous year relevant to assessment year 2006-07 but only receipt of advance--Execution of sale deed in following year--Amount received as advance not taxable in assessment year 2006-07--Income-tax Act, 1961-- CIT v . Delhi Apartments Pvt. Ltd . (Delhi) . . . 322
Penalty --Concealment of income--Transactions disclosed in return--Claim of expenditure to be revenue--Disallowance of claim--Assessee not liable for penalty--Income-tax Act, 1961, s. 271(1)(c)-- CIT v . Amtek Auto Ltd . (P&H) . . . 394
----Deposit in cash exceeding prescribed limit--Limitation--Six months from date of initiation of action for levy of penalty--Period to be reckoned from date of issue of first show cause for penalty and not from issue of first show cause by Joint Commissioner--Income-tax Act, 1961, ss. 269SS, 271D, 275(1)(c)-- CIT v . Jitendra Singh Rathore
(Raj) . . . 327
Reassessment --Limitation--Requirements only that reasons be recorded and notice be issued before expiry of time limit--Delay in supplying reasons recorded by Assessing Officer to assessee would not invalidate reassessment proceedings--Income-tax Act, 1961, ss. 147, 148, 149-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
----Notice--Validity--Original assessment granting special deduction under section 80-IA(4) after detailed enquiry--Reassessment proceedings to withdraw special deduction on ground that assessee not entitled to special deduction--Mere change of opinion--Notice not valid--Income-tax Act, 1961, ss. 80-IA, 147, 148-- Parixit Industries P. Ltd . v . Asst. CIT (OSD) (Guj) . . . 349
----Notice after four years--Conditions precedent--Information regarding transport subsidy available in audited accounts and statements furnished by assessee to Assessing Officer with assessee’s return--Reassessment adding transport subsidy as taxable income of assessee--Not valid--Income-tax Act, 1961, ss. 147, 148-- CIT v. Sonitpur Solvex Ltd. (Gauhati) . . . 305
----Notice after four years--Failure by assessee to disclose material facts--Documents attached to return only statutory auditor’s report and final accounts--Nothing disclosing specifically receipt of share capital of Rs. 4,50,000 from Q--Report of investigation wing on basis of which assessment reopened containing specific information that assessee received as accommodation entry Rs. 4,50,000 from Q with bank account particulars and instrument number--Reopening of assessment proper--Income-tax Act, 1961, ss. 147, 148-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
Recovery of tax --Provisional attachment--Assessment thereafter completed--Revenue not justified in attaching entire amount standing to the credit of assessee over and above demand raised against assessee--Income-tax Act, 1961, s. 281B-- Nirmal Singh v . Union of India (P&H) . . . 396
Return of income --Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes--Income-tax Act, 1961, ss. 143(1), 154, 201, 203, 244A, 245-- Court on its own Motion v . CIT
(Delhi) . . . 273
Revision --Commissioner--Powers--
Rectification of mistakes--Order rejecting application in absence of revised return--Natural justice--Non-speaking order rejecting revision on ground of availability of alternative remedy of appeal not valid--Commissioner to decide petition on merits--Income-tax Act, 1961, ss. 154, 263-- Universal Packaging v. CIT (Bom) . . . 398
Search and seizure --Refund of excess amounts seized--Interest on refund--Period for which interest payable--Refund as a result of appellate order--Interest payable from date of original assessment order--Adjustment of tax liability of brother of assessee not justified--Assessee entitled to interest for amount seized--Income-tax Act, 1961, s. 132B(3)-- G. L. Jain v . CIT (Delhi) . . . 339
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Income-tax Act, 1961 :
S. 9(1)(vii) --Deduction of tax at source--Non-resident--Effect of section 9(1)(vii)(b)--Meaning of source of income--Manufacture of products in India--Payment to US company for certification facilitating export--Source of income within India--Section 9(1)(vii) applicable--Question of liability under DTAA between USA and India not considered--Matter remanded-- CIT v . Havells India Ltd. (Delhi) . . . 376
S. 10(23C)(vi) --Exemption--Educational institution--Denial of exemption under section 10(23C)(vi)--Registration under section 12A cannot be cancelled on basis of order denying exemption--Exemption can be claimed without applying for registration--Both are independent proceedings-- CIT v . Society of Advanced Management Studies (All) . . . 269
S. 12A --Exemption--Educational institution--Denial of exemption under section 10(23C)(vi)--Registration under section 12A cannot be cancelled on basis of order denying exemption--Exemption can be claimed without applying for registration--Both are independent proceedings-- CIT v . Society of Advanced Management Studies
(All) . . . 269
S. 37 --Capital or revenue expenditure--Company--Expenditure on debenture--Debenture to be converted subsequently to shares--Expenditure deductible-- CIT v . Havells India Ltd . (Delhi) . . . 376
----Capital or revenue expenditure--Expenditure on installation of new unit--Finding that new unit constituted extension of existing business and there was common management--Expenditure deductible-- CIT v. Havells India Ltd . (Delhi) . . . 376
S. 37(1) --Capital or revenue expenditure--Expenditure relating to voluntary retirement scheme in respect of two units of assessee--Closure of two units not resulting in closure of business of assessee--Expenditure incurred for purpose of restructuring to achieve modernisation--Allowable as revenue expenditure-- CIT v. Foseco India Ltd .
(Bom) . . . 320
S. 40(a)(ia) --Deduction of tax at source--Non-resident--Effect of section 9(1)(vii)(b)--Meaning of source of income--Manufacture of products in India--Payment to US company for certification facilitating export--Source of income within India--Section 9(1)(vii) applicable--Question of liability under DTAA between USA and India not considered--Matter remanded-- CIT v . Havells India Ltd. (Delhi) . . . 376
S. 80HHC --Export--Special deduction--Different units of assessee engaged in manufacturing of different goods--Does not make separate units of assessee separate and different assessable units--Loss of one division to be adjusted against profit of other division for purposes of computation of deduction under section 80HHC-- Madhav Marbles and Granites Ltd. v. Asst. CIT (Raj) . . . 331
S. 80-IA --Reassessment--Notice--Validity--Original assessment granting special deduction under section 80-IA(4) after detailed enquiry--Reassessment proceedings to withdraw special deduction on ground that assessee not entitled to special deduction--Mere change of opinion--Notice not valid-- Parixit Industries P. Ltd . v . Asst. CIT (OSD) (Guj) . . . 349
S. 132B(3) --Search and seizure--Refund of excess amounts seized--Interest on refund--Period for which interest payable--Refund as a result of appellate order--Interest payable from date of original assessment order--Adjustment of tax liability of brother of assessee not justified--Assessee entitled to interest for amount seized-- G. L. Jain v . CIT (Delhi) . . . 339
S. 143(1) --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273
S. 147 --Reassessment--Limitation--Requirements only that reasons be recorded and notice be issued before expiry of time limit--Delay in supplying reasons recorded by Assessing Officer to assessee would not invalidate reassessment proceedings-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
----Reassessment--Notice--Validity--Original assessment granting special deduction under section 80-IA(4) after detailed enquiry--Reassessment proceedings to withdraw special deduction on ground that assessee not entitled to special deduction--Mere change of opinion--Notice not valid-- Parixit Industries P. Ltd . v . Asst. CIT (OSD)
(Guj) . . . 349
----Reassessment--Notice after four years--Conditions precedent--Information regarding transport subsidy available in audited accounts and statements furnished by assessee to Assessing Officer with assessee’s return--Reassessment adding transport subsidy as taxable income of assessee--Not valid-- CIT v. Sonitpur Solvex Ltd.
(Gauhati) . . . 305
----Reassessment--Notice after four years--Failure by assessee to disclose material facts--Documents attached to return only statutory auditor’s report and final accounts--Nothing disclosing specifically receipt of share capital of Rs. 4,50,000 from Q--Report of investigation wing on basis of which assessment reopened containing specific information that assessee received as accommodation entry Rs. 4,50,000 from Q with bank account particulars and instrument number--Reopening of assessment proper-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
S. 148 --Reassessment--Limitation--Requirements only that reasons be recorded and notice be issued before expiry of time limit--Delay in supplying reasons recorded by Assessing Officer to assessee would not invalidate reassessment proceedings-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
----Reassessment--Notice--Validity--Original assessment granting special deduction under section 80-IA(4) after detailed enquiry--Reassessment proceedings to withdraw special deduction on ground that assessee not entitled to special deduction--Mere change of opinion--Notice not valid-- Parixit Industries P. Ltd . v . Asst. CIT (OSD)
(Guj) . . . 349
----Reassessment--Notice after four years--Conditions precedent--Information regarding transport subsidy available in audited accounts and statements furnished by assessee to Assessing Officer with assessee’s return--Reassessment adding transport subsidy as taxable income of assessee--Not valid-- CIT v. Sonitpur Solvex Ltd.
(Gauhati) . . . 305
----Reassessment--Notice after four years--Failure by assessee to disclose material facts--Documents attached to return only statutory auditor’s report and final accounts--Nothing disclosing specifically receipt of share capital of Rs. 4,50,000 from Q--Report of investigation wing on basis of which assessment reopened containing specific information that assessee received as accommodation entry Rs. 4,50,000 from Q with bank account particulars and instrument number--Reopening of assessment proper-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
S. 149 --Reassessment--Limitation--Requirements only that reasons be recorded and notice be issued before expiry of time limit--Delay in supplying reasons recorded by Assessing Officer to assessee would not invalidate reassessment proceedings-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
S. 154 --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273
----Revision--Commissioner--Powers--Rectification of mistakes--Order rejecting application in absence of revised return--Natural justice--Non-speaking order rejecting revision on ground of availability of alternative remedy of appeal not valid--Commissioner to decide petition on merits-- Universal Packaging v. CIT (Bom) . . . 398
S. 195 --Deduction of tax at source--Non-resident--Effect of section 9(1)(vii)(b)--Meaning of source of income--Manufacture of products in India--Payment to US company for certification facilitating export--Source of income within India--Section 9(1)(vii) applicable--Question of liability under DTAA between USA and India not considered--Matter remanded-- CIT v . Havells India Ltd. (Delhi) . . . 376
S. 201 --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273
S. 203 --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273
S. 244A --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273
S. 245 --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273
S. 263 --Revision--Commissioner--Powers--Rectification of mistakes--Order rejecting application in absence of revised return--Natural justice--Non-speaking order rejecting revision on ground of availability of alternative remedy of appeal not valid--Commissioner to decide petition on merits-- Universal Packaging v. CIT
(Bom) . . . 398
S. 269SS --Penalty--Deposit in cash exceeding prescribed limit--Limitation--Six months from date of initiation of action for levy of penalty--Period to be reckoned from date of issue of first show cause for penalty and not from issue of first show cause by Joint Commissioner-- CIT v . Jitendra Singh Rathore (Raj) . . . 327
S. 271(1)(c) --Penalty--Concealment of income--Transactions disclosed in return--Claim of expenditure to be revenue--Disallowance of claim--Assessee not liable for penalty-- CIT v . Amtek Auto Ltd . (P&H) . . . 394
S. 271D --Penalty--Deposit in cash exceeding prescribed limit--Limitation--Six months from date of initiation of action for levy of penalty--Period to be reckoned from date of issue of first show cause for penalty and not from issue of first show cause by Joint Commissioner-- CIT v . Jitendra Singh Rathore (Raj) . . . 327
S. 275(1)(c) --Penalty--Deposit in cash exceeding prescribed limit--Limitation--Six months from date of initiation of action for levy of penalty--Period to be reckoned from date of issue of first show cause for penalty and not from issue of first show cause by Joint Commissioner-- CIT v . Jitendra Singh Rathore (Raj) . . . 327
S. 281B --Recovery of tax--Provisional attachment--Assessment thereafter completed--Revenue not justified in attaching entire amount standing to the credit of assessee over and above demand raised against assessee-- Nirmal Singh v . Union of India
(P&H) . . . 396
Volume 352 Part 3 (Issue dated 22-4-2013)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
HIGH COURTS
Capital gains --Business income--Trading or investment--Long-term capital gains--Assessee treating land as fixed asset for a long time and using it for agricultural purposes--No evidence that assessee purchased land by funds borrowed--Sale proceeds resulting long-term capital gains and not business income--Income-tax Act, 1961-- CIT v. Delhi Apartments Pvt. Ltd. (Delhi) . . . 322
Capital or revenue expenditure --Company--Expenditure on debenture--Debenture to be converted subsequently to shares--Expenditure deductible--Income-tax Act, 1961, s. 37-- CIT v . Havells India Ltd . (Delhi) . . . 376
----Expenditure on installation of new unit--Finding that new unit constituted extension of existing business and there was common management--Expenditure deductible--Income-tax Act, 1961, s. 37-- CIT v. Havells India Ltd .
(Delhi) . . . 376
----Expenditure relating to voluntary retirement scheme in respect of two units of assessee--Closure of two units not resulting in closure of business of assessee--Expenditure incurred for purpose of restructuring to achieve modernisation--Allowable as revenue expenditure--Income-tax Act, 1961, s. 37(1)-- CIT v. Foseco India Ltd .
(Bom) . . . 320
Deduction of tax at source --Non-resident--Effect of section 9(1)(vii)(b)--Meaning of source of income--Manufacture of products in India--Payment to US company for certification facilitating export--Source of income within India--Section 9(1)(vii) applicable--Question of liability under DTAA between USA and India not considered--Matter remanded--Income-tax Act, 1961, ss. 9(1)(vii), 40(a)(ia), 195-- CIT v . Havells India Ltd. (Delhi) . . . 376
Exemption --Educational institution--Denial of exemption under section 10(23C)(vi)--Registration under section 12A cannot be cancelled on basis of order denying exemption--Exemption can be claimed without applying for registration--Both are independent proceedings--Income-tax Act, 1961, ss. 10(23C)(vi), 12A-- CIT v . Society of Advanced Management Studies (All) . . . 269
Export --Special deduction--Different units of assessee engaged in manufacturing of different goods--Does not make separate units of assessee separate and different assessable units--Loss of one division to be adjusted against profit of other division for purposes of computation of deduction under section 80HHC--Income-tax Act, 1961, s. 80HHC-- Madhav Marbles and Granites Ltd. v. Asst. CIT (Raj) . . . 331
Income --Accrual of income--No transfer of possession during previous year relevant to assessment year 2006-07 but only receipt of advance--Execution of sale deed in following year--Amount received as advance not taxable in assessment year 2006-07--Income-tax Act, 1961-- CIT v . Delhi Apartments Pvt. Ltd . (Delhi) . . . 322
Penalty --Concealment of income--Transactions disclosed in return--Claim of expenditure to be revenue--Disallowance of claim--Assessee not liable for penalty--Income-tax Act, 1961, s. 271(1)(c)-- CIT v . Amtek Auto Ltd . (P&H) . . . 394
----Deposit in cash exceeding prescribed limit--Limitation--Six months from date of initiation of action for levy of penalty--Period to be reckoned from date of issue of first show cause for penalty and not from issue of first show cause by Joint Commissioner--Income-tax Act, 1961, ss. 269SS, 271D, 275(1)(c)-- CIT v . Jitendra Singh Rathore
(Raj) . . . 327
Reassessment --Limitation--Requirements only that reasons be recorded and notice be issued before expiry of time limit--Delay in supplying reasons recorded by Assessing Officer to assessee would not invalidate reassessment proceedings--Income-tax Act, 1961, ss. 147, 148, 149-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
----Notice--Validity--Original assessment granting special deduction under section 80-IA(4) after detailed enquiry--Reassessment proceedings to withdraw special deduction on ground that assessee not entitled to special deduction--Mere change of opinion--Notice not valid--Income-tax Act, 1961, ss. 80-IA, 147, 148-- Parixit Industries P. Ltd . v . Asst. CIT (OSD) (Guj) . . . 349
----Notice after four years--Conditions precedent--Information regarding transport subsidy available in audited accounts and statements furnished by assessee to Assessing Officer with assessee’s return--Reassessment adding transport subsidy as taxable income of assessee--Not valid--Income-tax Act, 1961, ss. 147, 148-- CIT v. Sonitpur Solvex Ltd. (Gauhati) . . . 305
----Notice after four years--Failure by assessee to disclose material facts--Documents attached to return only statutory auditor’s report and final accounts--Nothing disclosing specifically receipt of share capital of Rs. 4,50,000 from Q--Report of investigation wing on basis of which assessment reopened containing specific information that assessee received as accommodation entry Rs. 4,50,000 from Q with bank account particulars and instrument number--Reopening of assessment proper--Income-tax Act, 1961, ss. 147, 148-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
Recovery of tax --Provisional attachment--Assessment thereafter completed--Revenue not justified in attaching entire amount standing to the credit of assessee over and above demand raised against assessee--Income-tax Act, 1961, s. 281B-- Nirmal Singh v . Union of India (P&H) . . . 396
Return of income --Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes--Income-tax Act, 1961, ss. 143(1), 154, 201, 203, 244A, 245-- Court on its own Motion v . CIT
(Delhi) . . . 273
Revision --Commissioner--Powers--
Rectification of mistakes--Order rejecting application in absence of revised return--Natural justice--Non-speaking order rejecting revision on ground of availability of alternative remedy of appeal not valid--Commissioner to decide petition on merits--Income-tax Act, 1961, ss. 154, 263-- Universal Packaging v. CIT (Bom) . . . 398
Search and seizure --Refund of excess amounts seized--Interest on refund--Period for which interest payable--Refund as a result of appellate order--Interest payable from date of original assessment order--Adjustment of tax liability of brother of assessee not justified--Assessee entitled to interest for amount seized--Income-tax Act, 1961, s. 132B(3)-- G. L. Jain v . CIT (Delhi) . . . 339
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Income-tax Act, 1961 :
S. 9(1)(vii) --Deduction of tax at source--Non-resident--Effect of section 9(1)(vii)(b)--Meaning of source of income--Manufacture of products in India--Payment to US company for certification facilitating export--Source of income within India--Section 9(1)(vii) applicable--Question of liability under DTAA between USA and India not considered--Matter remanded-- CIT v . Havells India Ltd. (Delhi) . . . 376
S. 10(23C)(vi) --Exemption--Educational institution--Denial of exemption under section 10(23C)(vi)--Registration under section 12A cannot be cancelled on basis of order denying exemption--Exemption can be claimed without applying for registration--Both are independent proceedings-- CIT v . Society of Advanced Management Studies (All) . . . 269
S. 12A --Exemption--Educational institution--Denial of exemption under section 10(23C)(vi)--Registration under section 12A cannot be cancelled on basis of order denying exemption--Exemption can be claimed without applying for registration--Both are independent proceedings-- CIT v . Society of Advanced Management Studies
(All) . . . 269
S. 37 --Capital or revenue expenditure--Company--Expenditure on debenture--Debenture to be converted subsequently to shares--Expenditure deductible-- CIT v . Havells India Ltd . (Delhi) . . . 376
----Capital or revenue expenditure--Expenditure on installation of new unit--Finding that new unit constituted extension of existing business and there was common management--Expenditure deductible-- CIT v. Havells India Ltd . (Delhi) . . . 376
S. 37(1) --Capital or revenue expenditure--Expenditure relating to voluntary retirement scheme in respect of two units of assessee--Closure of two units not resulting in closure of business of assessee--Expenditure incurred for purpose of restructuring to achieve modernisation--Allowable as revenue expenditure-- CIT v. Foseco India Ltd .
(Bom) . . . 320
S. 40(a)(ia) --Deduction of tax at source--Non-resident--Effect of section 9(1)(vii)(b)--Meaning of source of income--Manufacture of products in India--Payment to US company for certification facilitating export--Source of income within India--Section 9(1)(vii) applicable--Question of liability under DTAA between USA and India not considered--Matter remanded-- CIT v . Havells India Ltd. (Delhi) . . . 376
S. 80HHC --Export--Special deduction--Different units of assessee engaged in manufacturing of different goods--Does not make separate units of assessee separate and different assessable units--Loss of one division to be adjusted against profit of other division for purposes of computation of deduction under section 80HHC-- Madhav Marbles and Granites Ltd. v. Asst. CIT (Raj) . . . 331
S. 80-IA --Reassessment--Notice--Validity--Original assessment granting special deduction under section 80-IA(4) after detailed enquiry--Reassessment proceedings to withdraw special deduction on ground that assessee not entitled to special deduction--Mere change of opinion--Notice not valid-- Parixit Industries P. Ltd . v . Asst. CIT (OSD) (Guj) . . . 349
S. 132B(3) --Search and seizure--Refund of excess amounts seized--Interest on refund--Period for which interest payable--Refund as a result of appellate order--Interest payable from date of original assessment order--Adjustment of tax liability of brother of assessee not justified--Assessee entitled to interest for amount seized-- G. L. Jain v . CIT (Delhi) . . . 339
S. 143(1) --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273
S. 147 --Reassessment--Limitation--Requirements only that reasons be recorded and notice be issued before expiry of time limit--Delay in supplying reasons recorded by Assessing Officer to assessee would not invalidate reassessment proceedings-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
----Reassessment--Notice--Validity--Original assessment granting special deduction under section 80-IA(4) after detailed enquiry--Reassessment proceedings to withdraw special deduction on ground that assessee not entitled to special deduction--Mere change of opinion--Notice not valid-- Parixit Industries P. Ltd . v . Asst. CIT (OSD)
(Guj) . . . 349
----Reassessment--Notice after four years--Conditions precedent--Information regarding transport subsidy available in audited accounts and statements furnished by assessee to Assessing Officer with assessee’s return--Reassessment adding transport subsidy as taxable income of assessee--Not valid-- CIT v. Sonitpur Solvex Ltd.
(Gauhati) . . . 305
----Reassessment--Notice after four years--Failure by assessee to disclose material facts--Documents attached to return only statutory auditor’s report and final accounts--Nothing disclosing specifically receipt of share capital of Rs. 4,50,000 from Q--Report of investigation wing on basis of which assessment reopened containing specific information that assessee received as accommodation entry Rs. 4,50,000 from Q with bank account particulars and instrument number--Reopening of assessment proper-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
S. 148 --Reassessment--Limitation--Requirements only that reasons be recorded and notice be issued before expiry of time limit--Delay in supplying reasons recorded by Assessing Officer to assessee would not invalidate reassessment proceedings-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
----Reassessment--Notice--Validity--Original assessment granting special deduction under section 80-IA(4) after detailed enquiry--Reassessment proceedings to withdraw special deduction on ground that assessee not entitled to special deduction--Mere change of opinion--Notice not valid-- Parixit Industries P. Ltd . v . Asst. CIT (OSD)
(Guj) . . . 349
----Reassessment--Notice after four years--Conditions precedent--Information regarding transport subsidy available in audited accounts and statements furnished by assessee to Assessing Officer with assessee’s return--Reassessment adding transport subsidy as taxable income of assessee--Not valid-- CIT v. Sonitpur Solvex Ltd.
(Gauhati) . . . 305
----Reassessment--Notice after four years--Failure by assessee to disclose material facts--Documents attached to return only statutory auditor’s report and final accounts--Nothing disclosing specifically receipt of share capital of Rs. 4,50,000 from Q--Report of investigation wing on basis of which assessment reopened containing specific information that assessee received as accommodation entry Rs. 4,50,000 from Q with bank account particulars and instrument number--Reopening of assessment proper-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
S. 149 --Reassessment--Limitation--Requirements only that reasons be recorded and notice be issued before expiry of time limit--Delay in supplying reasons recorded by Assessing Officer to assessee would not invalidate reassessment proceedings-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
S. 154 --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273
----Revision--Commissioner--Powers--Rectification of mistakes--Order rejecting application in absence of revised return--Natural justice--Non-speaking order rejecting revision on ground of availability of alternative remedy of appeal not valid--Commissioner to decide petition on merits-- Universal Packaging v. CIT (Bom) . . . 398
S. 195 --Deduction of tax at source--Non-resident--Effect of section 9(1)(vii)(b)--Meaning of source of income--Manufacture of products in India--Payment to US company for certification facilitating export--Source of income within India--Section 9(1)(vii) applicable--Question of liability under DTAA between USA and India not considered--Matter remanded-- CIT v . Havells India Ltd. (Delhi) . . . 376
S. 201 --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273
S. 203 --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273
S. 244A --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273
S. 245 --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273
S. 263 --Revision--Commissioner--Powers--Rectification of mistakes--Order rejecting application in absence of revised return--Natural justice--Non-speaking order rejecting revision on ground of availability of alternative remedy of appeal not valid--Commissioner to decide petition on merits-- Universal Packaging v. CIT
(Bom) . . . 398
S. 269SS --Penalty--Deposit in cash exceeding prescribed limit--Limitation--Six months from date of initiation of action for levy of penalty--Period to be reckoned from date of issue of first show cause for penalty and not from issue of first show cause by Joint Commissioner-- CIT v . Jitendra Singh Rathore (Raj) . . . 327
S. 271(1)(c) --Penalty--Concealment of income--Transactions disclosed in return--Claim of expenditure to be revenue--Disallowance of claim--Assessee not liable for penalty-- CIT v . Amtek Auto Ltd . (P&H) . . . 394
S. 271D --Penalty--Deposit in cash exceeding prescribed limit--Limitation--Six months from date of initiation of action for levy of penalty--Period to be reckoned from date of issue of first show cause for penalty and not from issue of first show cause by Joint Commissioner-- CIT v . Jitendra Singh Rathore (Raj) . . . 327
S. 275(1)(c) --Penalty--Deposit in cash exceeding prescribed limit--Limitation--Six months from date of initiation of action for levy of penalty--Period to be reckoned from date of issue of first show cause for penalty and not from issue of first show cause by Joint Commissioner-- CIT v . Jitendra Singh Rathore (Raj) . . . 327
S. 281B --Recovery of tax--Provisional attachment--Assessment thereafter completed--Revenue not justified in attaching entire amount standing to the credit of assessee over and above demand raised against assessee-- Nirmal Singh v . Union of India
(P&H) . . . 396
IN THE INCOME TAX APPELLATE TRIBUNAL "NAGPUR", BENCH, (E-COURT), MUMBAI
BEFORE SHRI R.K.GUPTA, JM & SHRI D.KARUNAKARA RAO, AM
I T A N o.1 64/Nag/ 20 12
( Ass ess me nt Year 2008-09 )
Shri Prakash Laxminarayan Vs. ACIT, Cir-5, Nagpur-440 001
Soni, 74, Shriniketan, Ramdaspeth, Nagpur-12
P AN No . : AEWPS 2001 P
(Appellant)
..
AN D
( Respondent)
I T A N o.1 65/Nag/2012
( Ass ess me nt Year 2008-09 )
Shri Rahul Prakash Soni, 74, Shriniketan, Ramdaspeth, Nagpur-12
P AN No . : AETPS 696 5 H
Vs. ACIT, Cir-5, Nagpur-440 001
(Appellant)
Assessee by
Revenue by
Date of Hearing
Respondent)
Mr. Bhupendra Shah
Dr. Millind Bhusari
15thMarch., 2013
Date of Pronouncement :
O R D E R
Per Bench :
10th April, 2013
These two appeals have been preferred by two different assessees before the ITAT Nagpur Bench, Nagpur, against the order of leaned CIT(A)-II, Nagpur (Maharashtra) relating to assessment year 2008-09, which has been heard through E-Court, Mumbai.
2. Si n c e common issues are involved in both the cases, therefore, for the sake of convenience, both these cases have been heard and disposed of by this consolidated order.
3. In both the appeals, the aforesaid assessees have raised the ground against the action of the learned CIT(A) in regard to confirming the action of the AO in holding and maintaining that the agricultural land held by these two assessees are capital asset within the meaning
ITA Nos.164 &165/Nag/2012 of Section2(14)(ii)(b) by adopting the ariel distance by straight line method instead of road distance.
4. Brief facts giving rising to both these appeals are that during the course of assessment proceeding, the AO noted that these two assessees have sold lands, in which they were having 1/4th share. The lands were purchased on 17-8-2007 admeasuring 2.58 hectare, which was sold on 31-1-2008 for a total consideration of Rs.1,88,13,156/-. These two partners were having 1/4thshare in the above stated land which was situated in Mouza Khadka village. The AO found that as per the straightline method, the distance of the agricultural lands sold are situated beyond 8 KMs from the Municipal Limits of the City of Nagpur. Therefore, he viewed that the land in question is capital asset within the meaning of Section 2(14)(iii)(b) of the Act. Accordingly, he brought the gain to tax by computing capital gain.
5. Being aggrieved, both these assessee preferred appeal before the CIT(A), wherein the CIT(A) after passing a detailed order held that the findings of the AO are correct. Hence, both these assessee are now in appeals here before the Tribunal.
6. Having heard the rival parties and perusing the material on record, we found that on similar facts in case of Sanjay Nagorao Paidlewar & Nitish Rameshchandra Chordia Vs. ACIT, listed under ITA Nos.112 & 113/Nag/2012, which was decided on 22-3-2013, wherein after considering the arguments of both the parties in detail, the Tribunal has taken a view that the distance from municipal limit has to be adopted by taking approach road distance and not on the basis of straight-line method or crow's flight.The issue has been discussed at great length and found that this is squarely covered by the decision of various Hon'ble High Courts and various benches of the Tribunal. The findings of the Tribunal have been recorded in para 9 to 21, which are as under :-
"9. We have heard rival submissions and considered them carefully. We have also considered the written submissions filed on behalf of both the parties i.e. assessees and department and have also perused the relevant material on record, on which our attentions were drawn. We have also taken into consideration the various case laws relied upon by the learned AR as well as learned CIT DR. After considering the submission and perusing the material on record, we found that the issue in respect to whether the agricultural land in question is an asset within the meaning of Section 2(14) or not, have already been decided by the Hon'ble Punjab and Haryana High Court in the case of Satinder Pal Singh(Supra). This decision of the Hon'ble Punjab and Haryana High Court has been consistently followed by various benches of the Tribunal in various parts of the country. One of us has also taken into considering this issue while sitting in Jaipur Benches of the Tribunal and found that the decision of the Hon'ble Punjab and Haryana High Court has to be followed and the distance has to measured through approach road and not through the crows flight distance. The Hon'ble Punjab and Haryana High Court in the case of Satinder Pal Singh (supra) has held that the distance of agricultural land belonging to the assessee within the meaning of Section2(14)(iii)(b) has to be measured in terms of approach road and not by a straight line distance on horizontal plane or as per crows flight. Copy of the order is also placed in the compilation at pages 1 & 2.
10. The contention raised by learned CIT(A) that the reckoning of urbanization as a factor for prescribing the distance is of significance which would yield to the principle of measuring distance in terms of approach road rather than by straight line on horizontal plane, this contention of learned CIT(A) has also been considered by the Hon'ble Punjab and Haryana High Court and has observed that the principle of measurement of distance is considered as straight line distance on horizontal plane or as per crow's flight then it would have no relationship with the statutory requirement of keeping in view the extent of urbanization. Such a course would be illusory, which is in pursuance of the aforesaid provision that Notification No.9447 dated.6thJanuary, 1994 has been issued by the Central Government. In respect of the State of Punjab, at item No.18, the sub-division Khanna has been listed at serial No.19. It has inter alia been specified that area upto 2 kms. from the municipal limits in all directions has to be regarded as other than agricultural land. Once the stator guidance of taking into account the extent and scope of urbanization of the area has to be reckoned while issuing any such notification then it would be incongruous to the argument of the Revenue that the distance of land should be measured by the method of straight line on horizontal plane or as per crow's flight because any measurement by crow's flight is bound to ignore the urbanization which has taken place. The decision of the Mumbai Bench in the case of Laukik Developers Vs DCIT, reported in (2007) 108 TTJ (Mumbai) 364, was also taken into consideration by the Hon'ble Punjab and Haryana High Court and found that the decision of the Tribunal has attained finality.
11. In case of Laukik Developers (supra), the Mumbai Bench of the Tribunal has observed that once the principle of measuring distance has been settled namely that the distance of the agricultural land belonging to the assessee-respondent has to be measured in terms of by approach road and not by a straight line distance on horizontal plane or as per crow's flight. Accordingly, the Hon'ble Punjab and Haryana High Court held that the distance has to be measured by approach road and not by straight line distance on horizontal plane or as per crow's flight. In case of Laukik Developers (supra), the assessee disputed that the distance for the purpose of Section 80IB(10) has to be measured through straight line distance on horizontal plane and not by approach road. The Mumbai Bench of the Tribunal has held that the issue regarding distance to be measured with regard to road distance or a straight line distance is covered with the decision of the Pune Tribunal in the case of Mangalam Inorganics (P) Ltd (supra), wherein it was held that the distance between the municipal limits and assessee's industrial undertaking has to be measured having regard to the road distance and not as per the crow's flight i.e., a straight-line distance as canvassed by the Revenue.
12. In case of ITO Vs. Ashok Shukla, decided in ITA No.207/Indore/2012, for assessment year 2008-09, vide order dated 31-8-2012, the issue was in respect to whether the assessee was entitled to exemption from capital gain on sale of agricultural land. This issue was examined in detail and it was found that the Tehsildar and Patwari have given a report that the land in question was agricultural land and the distance is 9.7 kms from the municipal limit. This distance was through the approach road and not by straight line distance method. Thereafter discussing the issue on merit and having taking into consideration the decision of the Tribunal in the case of Laukik Developers (supra) and considering the decision of the Hon'ble Gujarat High Court in the case of Balkrishna Hariballabhadas Vs. CIT, reported in 138 ITR 245, which was relied upon by the learned DR and found that the measurement has to be adopted by the approach road and not by straight line method. Reliance was also placed on the decision of the Hon'ble Punjab andHaryana High Court in the case of Satinder Pal Singh (supra). 13. In case of ACIT Vs. M/s Shagun Infrastructure Pvt. Ltd., decided in ITA No.209/Nag/2009, for assessment year 2006-07, vide order dated 27-6-2011, the Nagpur Bench of the Tribunal has held that the land in question which was situated more than 8 kms. from the local municipal limit and is clearly agricultural land in terms of Section 2(14)(iii) of the Act,, therefore, any income from such land including profit arising from sale of such agricultural land is not assessable as income.
14. In case of ACIT Vs. Gaurav Khandelwal, decided in ITA No.195/Agra/2010, for assessment year 2006-07, the Agra Bench of the Tribunal following the decision of Mumbai Bench in case of Laukik Developers (supra) and the decision of Hon'ble Punjab and Haryana High Court in the case of Satinder Pal Singh (supra), held that the distance of 8kms has to be measured by approach road distance and not by straight line distance on horizontal plane. Similar view has been expressed in case of Shri Mainraj Vs. ACIT, decided in ITA No.1371/Mds/2011, for assessment year 2007-08 vide order dated 18-8-2011. In this case also it has been held that the distance has to be measured by approach road and not through crow's flight or straight line method. In case of Smt. Savithri Ammal Vs. ITO, decided in ITA No.487/Mds/2012, vide order dated 12-7-2012 again it has been held that the distance has to be measured as per the approach road and not by straight line method. Similar view has been expressed in case of ITO Vs. Shri Chaganlal Lalji Aswin Business, decided in ITA No.857/Mds/2011, for the assessment year 2007-08, vide order dated 18-2-2011. In case of ITO Vs. M/s Ranjit Rattan Mehra (HUF), decided in ITA No.442/Asr/2011 for assessment year 2008-09, the Amritsar Bench of the Tribunal has taken a view that the distance of 8 kms has to be measured through the approach road and not through the straight line method. While holding so, the decision of the Hon'ble Punjab and Haryana High Court in case of Satinder Pal Singh (supra), was taken into consideration and another decision of the same High Court in case of CIT Vs. Lal Singh & Others, reported in (2010) 228 CTR 575 was also taken into consideration and has allowed the issue in favour of the assessee by holding that the distance of 8km has to be measured through approach road and not by straight line method on horizontal plane. 15. We have also taken into consideration various arguments of learned CIT DR and found that since the issue is covered by the decision of the various Benches of the Tribunal as well by Hon'ble Punjab and Haryana High Court, therefore, in view of the consistency the view taken by various benches has to be followed. There is no contrary decision is available on the same facts and, therefore, it cannot be said that the decision of the Hon'ble Punjab and Haryana High Court has only persuasive value. If there is any contrary decision is available either by the Hon'ble High Court or by any other benches of the Tribunal, then of course it can be said that the decision of other benches have persuasive value. In view of the aforesaid facts and circumstances of the case, we held that distance of 8 kms. has to be measured through approach road and not by straight line distance on horizontal plane or crow's flight. Hence, this issue is decided in favour of the assessees.
16. Regarding the issue in regard to whether the sale consideration out of agricultural income is assessable as business income or not, once we have held that this was an agricultural land and, therefore, any consideration out of sale of agricultural land, which is not assessable as the land was situated beyond 8 kms., therefore, the direction of the learned CIT(A) that the surplus may be treated as business income, has become now meaningless. Even and otherwise, this issue is also decided by various High Courts including the Hon'ble Bombay High Court. Though learned CIT(A) has placed reliance on the decision of the Hon'ble Bombay High Court in case of Gopal Ramnarayan Kasat, reported in 9 Taxman.com 236 (Bom), however, in a latest decision the Hon'ble Bombay High Court in the case of CIT Vs. Smt. Debbie Alemao, reported in (2011) 331 ITR 59, has held that the land which was shown as agricultural land in the revenue records and never sought to be used for non-agricultural purposes by the assessee till it was sold has to be treated as agricultural land, even though no agricultural income was shown by the assessee from this land and, therefore, no capital gain was taxable on the sale of the said land.
17. Facts in the case in hand are similar. The land in question was shown as agricultural land in the revenue record. Whether there was any agricultural income or not, is not the moot question to decide the issue, however, the important factor is to be decided as to whether the character of the land is agriculture or not. Undisputedly, in the revenue record and as per the Patwari certificate, the land in question is agricultural land. Therefore, the sale consideration was not taxable on the sale of said land i.e. either on account of capital gain or on account of business income.
18. Even we found that this issue has been decided by the Hon'ble Apex Court while confirming the order of the Hon'ble Delhi High Court in the case of DLF United Limited, 217 ITR 337. The facts in the case of DLF United Limited (supra) were that the DLF limited purchased agricultural land from various farmers in the ear and shown exemption, however, the AO treated the sale consideration as revenue receipt. Upto the stage of Tribunal, the order of AO was confirmed, however, the Hon'ble Delhi High Court held that the land in question was of agricultural land and therefore, any receipt on account of sale of agricultural land is not taxable. This decision of the Hon'ble Delhi High Court has been confirmed by the Hon'ble Apex Court, whereby it has been held that even and otherwise we see no merit in the Special Leave Petition and the same are accordingly dismissed on the ground of delay as well as on merits. Copies of these orders are placed in the compilation.
19. This issue has also been considered in various other decision i.e. in case of Hindustan Industrial Resources Limited Vs. ACIT, reported in 335 ITR 77, wherein it was held that in view of the finding of the Tribunal that the land in question was agricultural land at the time of purchase by the assessee as also at the time of acquisition, the land was clearly agricultural land irrespective of the fact that the assessee intended to use the land for industrial purposes and did not carry out any agricultural operations and, therefore, no capital gains could be charged on acquisition thereof under the Land Acquisition Act, 1894. While holding so, the decision in the case of DLF United Limited (supra), was taken into consideration by the Hon'ble Delhi High Court.
20. In case of Shri Satyanarayan O. Agrawal Vs. ADCIT, decided in ITA No.169/Nag/2012 for assessment year 2007-08, similar view also was taken following the various case laws and ultimately it was held that the consideration received out of sale of agricultural land was not taxable.
21. Since this issue has already been decided by various benches of the Tribunal and the Hon'ble Bombay High Court as well as the Hon'ble Delhi High Court and the decision of the Hon'ble Delhi High Court in the case of DLF United Limited (supra), which has been confirmed by the Hon'ble Supreme Court, therefore, we hold that any consideration received out of sale of agricultural land, cannot be treated as business income for the purpose of capital gain or for the purpose of business income, whatever the case may be. In view of the aforesaid facts and circumstances of the case, we allow this ground in favour of all the assessees."
Since facts are similar, therefore, following the above decision of the Tribunal in the case of Sanjay Nagorao Paidlewar & Nitish Rameshchandra Chordia Vs. ACIT, listed under ITA Nos.112 & 113/Nag/2012, decided on 22-3-2013, we allow this ground of these two assessees in both the appeals by holding that the distance of 8km has to be measured through approach road and not by straight line method on horizontal plane and if through approach road the distance is taken, then it is seen that the distance is beyond 8 km from the municipal limit. Accordingly, we hold that no capital gain is payable as the agricultural land sold is not a capital asset within the meaning of Section 2(14)(iii)(b) of the Act.
Resultantly, appeals of both the assessees are allowed.
Order pronounced in the open court on this 10thday of Apr. 2013.
Sd/- Sd/-
(D.KARUNAKARA RAO) (R.K.GUPTA)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai; Dated :
pkm, PS
10/04/ 2013.
Copy of the Order forwarded to :
1. The Appellant
2. The Respondent.
3. The CIT(A),Nagpur.
4. CIT
5. DR, ITAT, Mumbai/Nagpur
6. Guard file.
//True Copy//
8
ITA Nos.164 &165/Nag/2012
BY ORDER,
(Asstt. Registrar)
ITAT, Mumbai
BEFORE SHRI R.K.GUPTA, JM & SHRI D.KARUNAKARA RAO, AM
I T A N o.1 64/Nag/ 20 12
( Ass ess me nt Year 2008-09 )
Shri Prakash Laxminarayan Vs. ACIT, Cir-5, Nagpur-440 001
Soni, 74, Shriniketan, Ramdaspeth, Nagpur-12
P AN No . : AEWPS 2001 P
(Appellant)
..
AN D
( Respondent)
I T A N o.1 65/Nag/2012
( Ass ess me nt Year 2008-09 )
Shri Rahul Prakash Soni, 74, Shriniketan, Ramdaspeth, Nagpur-12
P AN No . : AETPS 696 5 H
Vs. ACIT, Cir-5, Nagpur-440 001
(Appellant)
Assessee by
Revenue by
Date of Hearing
Respondent)
Mr. Bhupendra Shah
Dr. Millind Bhusari
15thMarch., 2013
Date of Pronouncement :
O R D E R
Per Bench :
10th April, 2013
These two appeals have been preferred by two different assessees before the ITAT Nagpur Bench, Nagpur, against the order of leaned CIT(A)-II, Nagpur (Maharashtra) relating to assessment year 2008-09, which has been heard through E-Court, Mumbai.
2. Si n c e common issues are involved in both the cases, therefore, for the sake of convenience, both these cases have been heard and disposed of by this consolidated order.
3. In both the appeals, the aforesaid assessees have raised the ground against the action of the learned CIT(A) in regard to confirming the action of the AO in holding and maintaining that the agricultural land held by these two assessees are capital asset within the meaning
ITA Nos.164 &165/Nag/2012 of Section2(14)(ii)(b) by adopting the ariel distance by straight line method instead of road distance.
4. Brief facts giving rising to both these appeals are that during the course of assessment proceeding, the AO noted that these two assessees have sold lands, in which they were having 1/4th share. The lands were purchased on 17-8-2007 admeasuring 2.58 hectare, which was sold on 31-1-2008 for a total consideration of Rs.1,88,13,156/-. These two partners were having 1/4thshare in the above stated land which was situated in Mouza Khadka village. The AO found that as per the straightline method, the distance of the agricultural lands sold are situated beyond 8 KMs from the Municipal Limits of the City of Nagpur. Therefore, he viewed that the land in question is capital asset within the meaning of Section 2(14)(iii)(b) of the Act. Accordingly, he brought the gain to tax by computing capital gain.
5. Being aggrieved, both these assessee preferred appeal before the CIT(A), wherein the CIT(A) after passing a detailed order held that the findings of the AO are correct. Hence, both these assessee are now in appeals here before the Tribunal.
6. Having heard the rival parties and perusing the material on record, we found that on similar facts in case of Sanjay Nagorao Paidlewar & Nitish Rameshchandra Chordia Vs. ACIT, listed under ITA Nos.112 & 113/Nag/2012, which was decided on 22-3-2013, wherein after considering the arguments of both the parties in detail, the Tribunal has taken a view that the distance from municipal limit has to be adopted by taking approach road distance and not on the basis of straight-line method or crow's flight.The issue has been discussed at great length and found that this is squarely covered by the decision of various Hon'ble High Courts and various benches of the Tribunal. The findings of the Tribunal have been recorded in para 9 to 21, which are as under :-
"9. We have heard rival submissions and considered them carefully. We have also considered the written submissions filed on behalf of both the parties i.e. assessees and department and have also perused the relevant material on record, on which our attentions were drawn. We have also taken into consideration the various case laws relied upon by the learned AR as well as learned CIT DR. After considering the submission and perusing the material on record, we found that the issue in respect to whether the agricultural land in question is an asset within the meaning of Section 2(14) or not, have already been decided by the Hon'ble Punjab and Haryana High Court in the case of Satinder Pal Singh(Supra). This decision of the Hon'ble Punjab and Haryana High Court has been consistently followed by various benches of the Tribunal in various parts of the country. One of us has also taken into considering this issue while sitting in Jaipur Benches of the Tribunal and found that the decision of the Hon'ble Punjab and Haryana High Court has to be followed and the distance has to measured through approach road and not through the crows flight distance. The Hon'ble Punjab and Haryana High Court in the case of Satinder Pal Singh (supra) has held that the distance of agricultural land belonging to the assessee within the meaning of Section2(14)(iii)(b) has to be measured in terms of approach road and not by a straight line distance on horizontal plane or as per crows flight. Copy of the order is also placed in the compilation at pages 1 & 2.
10. The contention raised by learned CIT(A) that the reckoning of urbanization as a factor for prescribing the distance is of significance which would yield to the principle of measuring distance in terms of approach road rather than by straight line on horizontal plane, this contention of learned CIT(A) has also been considered by the Hon'ble Punjab and Haryana High Court and has observed that the principle of measurement of distance is considered as straight line distance on horizontal plane or as per crow's flight then it would have no relationship with the statutory requirement of keeping in view the extent of urbanization. Such a course would be illusory, which is in pursuance of the aforesaid provision that Notification No.9447 dated.6thJanuary, 1994 has been issued by the Central Government. In respect of the State of Punjab, at item No.18, the sub-division Khanna has been listed at serial No.19. It has inter alia been specified that area upto 2 kms. from the municipal limits in all directions has to be regarded as other than agricultural land. Once the stator guidance of taking into account the extent and scope of urbanization of the area has to be reckoned while issuing any such notification then it would be incongruous to the argument of the Revenue that the distance of land should be measured by the method of straight line on horizontal plane or as per crow's flight because any measurement by crow's flight is bound to ignore the urbanization which has taken place. The decision of the Mumbai Bench in the case of Laukik Developers Vs DCIT, reported in (2007) 108 TTJ (Mumbai) 364, was also taken into consideration by the Hon'ble Punjab and Haryana High Court and found that the decision of the Tribunal has attained finality.
11. In case of Laukik Developers (supra), the Mumbai Bench of the Tribunal has observed that once the principle of measuring distance has been settled namely that the distance of the agricultural land belonging to the assessee-respondent has to be measured in terms of by approach road and not by a straight line distance on horizontal plane or as per crow's flight. Accordingly, the Hon'ble Punjab and Haryana High Court held that the distance has to be measured by approach road and not by straight line distance on horizontal plane or as per crow's flight. In case of Laukik Developers (supra), the assessee disputed that the distance for the purpose of Section 80IB(10) has to be measured through straight line distance on horizontal plane and not by approach road. The Mumbai Bench of the Tribunal has held that the issue regarding distance to be measured with regard to road distance or a straight line distance is covered with the decision of the Pune Tribunal in the case of Mangalam Inorganics (P) Ltd (supra), wherein it was held that the distance between the municipal limits and assessee's industrial undertaking has to be measured having regard to the road distance and not as per the crow's flight i.e., a straight-line distance as canvassed by the Revenue.
12. In case of ITO Vs. Ashok Shukla, decided in ITA No.207/Indore/2012, for assessment year 2008-09, vide order dated 31-8-2012, the issue was in respect to whether the assessee was entitled to exemption from capital gain on sale of agricultural land. This issue was examined in detail and it was found that the Tehsildar and Patwari have given a report that the land in question was agricultural land and the distance is 9.7 kms from the municipal limit. This distance was through the approach road and not by straight line distance method. Thereafter discussing the issue on merit and having taking into consideration the decision of the Tribunal in the case of Laukik Developers (supra) and considering the decision of the Hon'ble Gujarat High Court in the case of Balkrishna Hariballabhadas Vs. CIT, reported in 138 ITR 245, which was relied upon by the learned DR and found that the measurement has to be adopted by the approach road and not by straight line method. Reliance was also placed on the decision of the Hon'ble Punjab andHaryana High Court in the case of Satinder Pal Singh (supra). 13. In case of ACIT Vs. M/s Shagun Infrastructure Pvt. Ltd., decided in ITA No.209/Nag/2009, for assessment year 2006-07, vide order dated 27-6-2011, the Nagpur Bench of the Tribunal has held that the land in question which was situated more than 8 kms. from the local municipal limit and is clearly agricultural land in terms of Section 2(14)(iii) of the Act,, therefore, any income from such land including profit arising from sale of such agricultural land is not assessable as income.
14. In case of ACIT Vs. Gaurav Khandelwal, decided in ITA No.195/Agra/2010, for assessment year 2006-07, the Agra Bench of the Tribunal following the decision of Mumbai Bench in case of Laukik Developers (supra) and the decision of Hon'ble Punjab and Haryana High Court in the case of Satinder Pal Singh (supra), held that the distance of 8kms has to be measured by approach road distance and not by straight line distance on horizontal plane. Similar view has been expressed in case of Shri Mainraj Vs. ACIT, decided in ITA No.1371/Mds/2011, for assessment year 2007-08 vide order dated 18-8-2011. In this case also it has been held that the distance has to be measured by approach road and not through crow's flight or straight line method. In case of Smt. Savithri Ammal Vs. ITO, decided in ITA No.487/Mds/2012, vide order dated 12-7-2012 again it has been held that the distance has to be measured as per the approach road and not by straight line method. Similar view has been expressed in case of ITO Vs. Shri Chaganlal Lalji Aswin Business, decided in ITA No.857/Mds/2011, for the assessment year 2007-08, vide order dated 18-2-2011. In case of ITO Vs. M/s Ranjit Rattan Mehra (HUF), decided in ITA No.442/Asr/2011 for assessment year 2008-09, the Amritsar Bench of the Tribunal has taken a view that the distance of 8 kms has to be measured through the approach road and not through the straight line method. While holding so, the decision of the Hon'ble Punjab and Haryana High Court in case of Satinder Pal Singh (supra), was taken into consideration and another decision of the same High Court in case of CIT Vs. Lal Singh & Others, reported in (2010) 228 CTR 575 was also taken into consideration and has allowed the issue in favour of the assessee by holding that the distance of 8km has to be measured through approach road and not by straight line method on horizontal plane. 15. We have also taken into consideration various arguments of learned CIT DR and found that since the issue is covered by the decision of the various Benches of the Tribunal as well by Hon'ble Punjab and Haryana High Court, therefore, in view of the consistency the view taken by various benches has to be followed. There is no contrary decision is available on the same facts and, therefore, it cannot be said that the decision of the Hon'ble Punjab and Haryana High Court has only persuasive value. If there is any contrary decision is available either by the Hon'ble High Court or by any other benches of the Tribunal, then of course it can be said that the decision of other benches have persuasive value. In view of the aforesaid facts and circumstances of the case, we held that distance of 8 kms. has to be measured through approach road and not by straight line distance on horizontal plane or crow's flight. Hence, this issue is decided in favour of the assessees.
16. Regarding the issue in regard to whether the sale consideration out of agricultural income is assessable as business income or not, once we have held that this was an agricultural land and, therefore, any consideration out of sale of agricultural land, which is not assessable as the land was situated beyond 8 kms., therefore, the direction of the learned CIT(A) that the surplus may be treated as business income, has become now meaningless. Even and otherwise, this issue is also decided by various High Courts including the Hon'ble Bombay High Court. Though learned CIT(A) has placed reliance on the decision of the Hon'ble Bombay High Court in case of Gopal Ramnarayan Kasat, reported in 9 Taxman.com 236 (Bom), however, in a latest decision the Hon'ble Bombay High Court in the case of CIT Vs. Smt. Debbie Alemao, reported in (2011) 331 ITR 59, has held that the land which was shown as agricultural land in the revenue records and never sought to be used for non-agricultural purposes by the assessee till it was sold has to be treated as agricultural land, even though no agricultural income was shown by the assessee from this land and, therefore, no capital gain was taxable on the sale of the said land.
17. Facts in the case in hand are similar. The land in question was shown as agricultural land in the revenue record. Whether there was any agricultural income or not, is not the moot question to decide the issue, however, the important factor is to be decided as to whether the character of the land is agriculture or not. Undisputedly, in the revenue record and as per the Patwari certificate, the land in question is agricultural land. Therefore, the sale consideration was not taxable on the sale of said land i.e. either on account of capital gain or on account of business income.
18. Even we found that this issue has been decided by the Hon'ble Apex Court while confirming the order of the Hon'ble Delhi High Court in the case of DLF United Limited, 217 ITR 337. The facts in the case of DLF United Limited (supra) were that the DLF limited purchased agricultural land from various farmers in the ear and shown exemption, however, the AO treated the sale consideration as revenue receipt. Upto the stage of Tribunal, the order of AO was confirmed, however, the Hon'ble Delhi High Court held that the land in question was of agricultural land and therefore, any receipt on account of sale of agricultural land is not taxable. This decision of the Hon'ble Delhi High Court has been confirmed by the Hon'ble Apex Court, whereby it has been held that even and otherwise we see no merit in the Special Leave Petition and the same are accordingly dismissed on the ground of delay as well as on merits. Copies of these orders are placed in the compilation.
19. This issue has also been considered in various other decision i.e. in case of Hindustan Industrial Resources Limited Vs. ACIT, reported in 335 ITR 77, wherein it was held that in view of the finding of the Tribunal that the land in question was agricultural land at the time of purchase by the assessee as also at the time of acquisition, the land was clearly agricultural land irrespective of the fact that the assessee intended to use the land for industrial purposes and did not carry out any agricultural operations and, therefore, no capital gains could be charged on acquisition thereof under the Land Acquisition Act, 1894. While holding so, the decision in the case of DLF United Limited (supra), was taken into consideration by the Hon'ble Delhi High Court.
20. In case of Shri Satyanarayan O. Agrawal Vs. ADCIT, decided in ITA No.169/Nag/2012 for assessment year 2007-08, similar view also was taken following the various case laws and ultimately it was held that the consideration received out of sale of agricultural land was not taxable.
21. Since this issue has already been decided by various benches of the Tribunal and the Hon'ble Bombay High Court as well as the Hon'ble Delhi High Court and the decision of the Hon'ble Delhi High Court in the case of DLF United Limited (supra), which has been confirmed by the Hon'ble Supreme Court, therefore, we hold that any consideration received out of sale of agricultural land, cannot be treated as business income for the purpose of capital gain or for the purpose of business income, whatever the case may be. In view of the aforesaid facts and circumstances of the case, we allow this ground in favour of all the assessees."
Since facts are similar, therefore, following the above decision of the Tribunal in the case of Sanjay Nagorao Paidlewar & Nitish Rameshchandra Chordia Vs. ACIT, listed under ITA Nos.112 & 113/Nag/2012, decided on 22-3-2013, we allow this ground of these two assessees in both the appeals by holding that the distance of 8km has to be measured through approach road and not by straight line method on horizontal plane and if through approach road the distance is taken, then it is seen that the distance is beyond 8 km from the municipal limit. Accordingly, we hold that no capital gain is payable as the agricultural land sold is not a capital asset within the meaning of Section 2(14)(iii)(b) of the Act.
Resultantly, appeals of both the assessees are allowed.
Order pronounced in the open court on this 10thday of Apr. 2013.
Sd/- Sd/-
(D.KARUNAKARA RAO) (R.K.GUPTA)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai; Dated :
pkm, PS
10/04/ 2013.
Copy of the Order forwarded to :
1. The Appellant
2. The Respondent.
3. The CIT(A),Nagpur.
4. CIT
5. DR, ITAT, Mumbai/Nagpur
6. Guard file.
//True Copy//
8
ITA Nos.164 &165/Nag/2012
BY ORDER,
(Asstt. Registrar)
ITAT, Mumbai
ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))
Volume 23 : Part 2 (Issue dated : 22-4-2013)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Advance tax --Interest--Assessee not liable to pay interest--Income-tax Act, 1961, s. 234B-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239
Appeal to Appellate Tribunal --Power to admit additional grounds--Legal grounds not requiring investigation into facts--To be admitted--Income-tax Act, 1961, s. 254-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239
----Rectification of mistake--Exemption--Export-
oriented undertaking--Tribunal inadvertently miscalculating number of assessment years for which exemption available--Mistake to be rectified--Change of year goes to root of order--Earlier order recalled--Income-tax Act, 1961-- Assistant CIT v. Qmax Test Equipments P. Ltd. (Chennai) . . . 187
Appeal to Commissioner (Appeals) --Power to enhance income--Income from different products manufactured under same licence agreement--Commissioner (Appeals) entitled to enhance income--Income-tax Act, 1961, s. 251-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239
Capital gains --Agreement for development of property cancelled and agreement for sale and irrevocable power of attorney executed within same party--Device to reduce tax--Advance received under first agreement and forfeited and sums received as damages together constitute part of consideration for sale--Taxable as capital gains--Income-tax Act, 1961-- Hyderabad Bottling Co. Ltd. v. Deputy CIT (Hyderabad) . . . 175
----Business income--Purchase of land for agricultural purposes--No evidence that borrowed capital used for purchase--Land held as an asset--Surplus realised on asset to be taxed as capital gains--Not business income--Income-tax Act, 1961-- Additional CIT v. Delhi Apartment P. Ltd. (Delhi) . . . 217
----Transfer of asset--Date of transfer--No agreement signed or possession delivered in relevant year--Gains cannot be taxed in that year--Income-tax Act, 1961, ss. 2(47), 45-- Additional CIT v. Delhi Apartment P. Ltd. (Delhi) . . . 217
Non-resident --Burden of proof--Income deemed to accrue or arise in India--Conditions precedent--Business carried on in India--Sale to party in India without operations carried out in India not business in India--Licence granted by assessee of patented CDMA technology to non-resident original equipment manufacturers to make and sell CDMA handsets and wireless equipment in consideration for royalty--Royalty determined with reference to net selling price of product to unrelated wireless carriers worldwide--Sale of products manufactured using patented technology to wireless carriers located in India for sale to end users in India--Licence not specific to any particular country--Licence not used in India--Not established that patents licensed by assessee used for installation activities in India--Patents having nothing to do with functionality of handsets--Original equipment manufacturers themselves not brought to tax--Title to equipment passing in high seas--Mere passing of title does not result in income being attributable in India--Software not provided as part of licensing of assessee’s patents--Source of royalty was place where patent exploited which was outside India--Indian telecom operators not source of income for original equipment manufacturers--Not established that original equipment manufacturers used assessee’s patents for carrying on business in India or making or earning income from source in India--Royalty paid by original equipment manufacturers to assessee not taxable--Income-tax Act, 1961, s. 9(1)(vi)(c)--Double Taxation Avoidance Agreement between India and the United States of America, art. 12(7)(b)-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239
----Fees for technical services--Payments to non-resident divers under contract for provision of underwater services in Saudi Arabia--Technical fee paid to carry out business outside India for earning income from a source outside India--Assessee not liable for tax deducted at source--Income-tax Act, 1961, s. 9(1)(vii)-- Aqua Omega Services P. Ltd. v. Assistant CIT (Chennai) . . . 191
Penalty --Failure to file return of tax deducted at source within specified time--Penalty levied unilaterally without finding whether banks need to file statements--Statements produced by assessee uploaded by franchisee in single day for all four quarters--Particulars uploaded by franchisee without permanent account numbers of deductees--Levy of penalty not justified--Income-tax Act, 1961, s. 272A(2)(k)-- Branch Manager (TDS), UCO Bank v. Additional CIT (Cuttack) . . . 209
Reassessment --Reason to believe income escaped assessment--Sufficient if one ground out of many tenable--Facts contradicting basis of belief subsequently surfacing later in course of assessment not to vitiate proceedings--No stipulation that Assessing Officer to furnish reasons for reopening with notice--Newspaper reports can constitute information or material--Income-tax Act, 1961, ss. 147, 148-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239
----Reason to believe that income escaped assessment--Tax deducted at source--No presumption that there was no escapement of income--Income-tax Act, 1961, s. 147-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239
----Sanction of Commissioner--Findings of Additional Director typed--Does not mean sanction accorded without application of mind--Joint Director authorised to exercise power of Additional Commissioner--Sanction for issue of notice was by an appropriate authority--Income-tax Act, 1961, ss. 2(28C), 151-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239
Return of income --Failure to file--Interest--Levy of interest under section 234A proper--Income-tax Act, 1961, s. 234A-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239
Revision --Commissioner--Erroneous and prejudicial to Revenue--Order passed without application of mind--Liable to be revised--Industrial undertaking--Special deduction--Assessing Officer accepting nil return of assessee and allowing claim to deduction under section 80-IA without enquiry whether assessee fulfilled conditions for eligibility therefor--Revision proper--Income-tax Act, 1961, ss. 80-IA, 263-- Vodafone Essar Ltd. v. CIT (Chandigarh) . . . 147
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Double Taxation Avoidance Agreement between India and the United States of America :
Art. 12(7)(b) --Non-resident--Burden of proof--Income deemed to accrue or arise in India--Conditions precedent--Business carried on in India--Sale to party in India without operations carried out in India not business in India--Licence granted by assessee of patented CDMA technology to non-resident original equipment manufacturers to make and sell CDMA handsets and wireless equipment in consideration for royalty--Royalty determined with reference to net selling price of product to unrelated wireless carriers worldwide--Sale of products manufactured using patented technology to wireless carriers located in India for sale to end users in India--Licence not specific to any particular country--Licence not used in India--Not established that patents licensed by assessee used for installation activities in India--Patents having nothing to do with functionality of handsets--Original equipment manufacturers themselves not brought to tax--Title to equipment passing in high seas--Mere passing of title does not result in income being attributable in India--Software not provided as part of licensing of assessee’s patents--Source of royalty was place where patent exploited which was outside India--Indian telecom operators not source of income for original equipment manufacturers--Not established that original equipment manufacturers used assessee’s patents for carrying on business in India or making or earning income from source in India--Royalty paid by original equipment manufacturers to assessee not taxable-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239
Income-tax Act, 1961 :
S. 2(28C) --Reassessment--Sanction of Commissioner--Findings of Additional Director typed--Does not mean sanction accorded without application of mind--Joint Director authorised to exercise power of Additional Commissioner--Sanction for issue of notice was by an appropriate authority-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239
S. 2(47) --Capital gains--Transfer of asset--Date of transfer--No agreement signed or possession delivered in relevant year--Gains cannot be taxed in that year-- Additional CIT v. Delhi Apartment P. Ltd. (Delhi) . . . 217
S. 9(1)(vi)(c) --Non-resident--Burden of proof--Income deemed to accrue or arise in India--Conditions precedent--Business carried on in India--Sale to party in India without operations carried out in India not business in India--Licence granted by assessee of patented CDMA technology to non-resident original equipment manufacturers to make and sell CDMA handsets and wireless equipment in consideration for royalty--Royalty determined with reference to net selling price of product to unrelated wireless carriers worldwide--Sale of products manufactured using patented technology to wireless carriers located in India for sale to end users in India--Licence not specific to any particular country--Licence not used in India--Not established that patents licensed by assessee used for installation activities in India--Patents having nothing to do with functionality of handsets--Original equipment manufacturers themselves not brought to tax--Title to equipment passing in high seas--Mere passing of title does not result in income being attributable in India--Software not provided as part of licensing of assessee’s patents--Source of royalty was place where patent exploited which was outside India--Indian telecom operators not source of income for original equipment manufacturers--Not established that original equipment manufacturers used assessee’s patents for carrying on business in India or making or earning income from source in India--Royalty paid by original equipment manufacturers to assessee not taxable-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239
S. 9(1)(vii) --Non-resident--Fees for technical services--Payments to non-resident divers under contract for provision of underwater services in Saudi Arabia--Technical fee paid to carry out business outside India for earning income from a source outside India--Assessee not liable for tax deducted at source-- Aqua Omega Services P. Ltd. v. Assistant CIT (Chennai) . . . 191
S. 45 --Capital gains--Transfer of asset--Date of transfer--No agreement signed or possession delivered in relevant year--Gains cannot be taxed in that year-- Additional CIT v. Delhi Apartment P. Ltd. (Delhi) . . . 217
S. 80-IA --Revision--Commissioner--Erroneous and prejudicial to Revenue--Order passed without application of mind--Liable to be revised--Industrial undertaking--Special deduction--Assessing Officer accepting nil return of assessee and allowing claim to deduction under section 80-IA without enquiry whether assessee fulfilled conditions for eligibility therefor--Revision proper-- Vodafone Essar Ltd. v. CIT (Chandigarh) . . . 147
S. 147 --Reassessment--Reason to believe income escaped assessment--Sufficient if one ground out of many tenable--Facts contradicting basis of belief subsequently surfacing later in course of assessment not to vitiate proceedings--No stipulation that Assessing Officer to furnish reasons for reopening with notice--Newspaper reports can constitute information or material-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239
----Reassessment--Reason to believe that income escaped assessment--Tax deducted at source--No presumption that there was no escapement of income-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239
S. 148 --Reassessment--Reason to believe income escaped assessment--Sufficient if one ground out of many tenable--Facts contradicting basis of belief subsequently surfacing later in course of assessment not to vitiate proceedings--No stipulation that Assessing Officer to furnish reasons for reopening with notice--Newspaper reports can constitute information or material-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239
S. 151 --Reassessment--Sanction of Commissioner--Findings of Additional Director typed--Does not mean sanction accorded without application of mind--Joint Director authorised to exercise power of Additional Commissioner--Sanction for issue of notice was by an appropriate authority-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239
S. 234A --Return of income--Failure to file--Interest--Levy of interest under section 234A proper-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239
S. 234B --Advance tax--Interest--Assessee not liable to pay interest-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239
S. 251 --Appeal to Commissioner (Appeals)--Power to enhance income--Income from different products manufactured under same licence agreement--Commissioner (Appeals) entitled to enhance income-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239
S. 254 --Appeal to Appellate Tribunal--Power to admit additional grounds--Legal grounds not requiring investigation into facts--To be admitted-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239
S. 263 --Revision--Commissioner--Erroneous and prejudicial to Revenue--Order passed without application of mind--Liable to be revised--Industrial undertaking--Special deduction--Assessing Officer accepting nil return of assessee and allowing claim to deduction under section 80-IA without enquiry whether assessee fulfilled conditions for eligibility therefor--Revision proper-- Vodafone Essar Ltd. v. CIT (Chandigarh) . . . 147
S. 272A(2)(k) --Penalty--Failure to file return of tax deducted at source within specified time--Penalty levied unilaterally without finding whether banks need to file statements--Statements produced by assessee uploaded by franchisee in single day for all four quarters--Particulars uploaded by franchisee without permanent account numbers of deductees--Levy of penalty not justified-- Branch Manager (TDS), UCO Bank v. Additional CIT (Cuttack) . . . 209
INCOME TAX REPORTS (ITR)
Volume 352 Part 3 (Issue dated 22-4-2013)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
HIGH COURTS
Capital gains --Business income--Trading or investment--Long-term capital gains--Assessee treating land as fixed asset for a long time and using it for agricultural purposes--No evidence that assessee purchased land by funds borrowed--Sale proceeds resulting long-term capital gains and not business income--Income-tax Act, 1961-- CIT v. Delhi Apartments Pvt. Ltd. (Delhi) . . . 322
Capital or revenue expenditure --Company--Expenditure on debenture--Debenture to be converted subsequently to shares--Expenditure deductible--Income-tax Act, 1961, s. 37-- CIT v . Havells India Ltd . (Delhi) . . . 376
----Expenditure on installation of new unit--Finding that new unit constituted extension of existing business and there was common management--Expenditure deductible--Income-tax Act, 1961, s. 37-- CIT v. Havells India Ltd .
(Delhi) . . . 376
----Expenditure relating to voluntary retirement scheme in respect of two units of assessee--Closure of two units not resulting in closure of business of assessee--Expenditure incurred for purpose of restructuring to achieve modernisation--Allowable as revenue expenditure--Income-tax Act, 1961, s. 37(1)-- CIT v. Foseco India Ltd .
(Bom) . . . 320
Deduction of tax at source --Non-resident--Effect of section 9(1)(vii)(b)--Meaning of source of income--Manufacture of products in India--Payment to US company for certification facilitating export--Source of income within India--Section 9(1)(vii) applicable--Question of liability under DTAA between USA and India not considered--Matter remanded--Income-tax Act, 1961, ss. 9(1)(vii), 40(a)(ia), 195-- CIT v . Havells India Ltd. (Delhi) . . . 376
Exemption --Educational institution--Denial of exemption under section 10(23C)(vi)--Registration under section 12A cannot be cancelled on basis of order denying exemption--Exemption can be claimed without applying for registration--Both are independent proceedings--Income-tax Act, 1961, ss. 10(23C)(vi), 12A-- CIT v . Society of Advanced Management Studies (All) . . . 269
Export --Special deduction--Different units of assessee engaged in manufacturing of different goods--Does not make separate units of assessee separate and different assessable units--Loss of one division to be adjusted against profit of other division for purposes of computation of deduction under section 80HHC--Income-tax Act, 1961, s. 80HHC-- Madhav Marbles and Granites Ltd. v. Asst. CIT (Raj) . . . 331
Income --Accrual of income--No transfer of possession during previous year relevant to assessment year 2006-07 but only receipt of advance--Execution of sale deed in following year--Amount received as advance not taxable in assessment year 2006-07--Income-tax Act, 1961-- CIT v . Delhi Apartments Pvt. Ltd . (Delhi) . . . 322
Penalty --Concealment of income--Transactions disclosed in return--Claim of expenditure to be revenue--Disallowance of claim--Assessee not liable for penalty--Income-tax Act, 1961, s. 271(1)(c)-- CIT v . Amtek Auto Ltd . (P&H) . . . 394
----Deposit in cash exceeding prescribed limit--Limitation--Six months from date of initiation of action for levy of penalty--Period to be reckoned from date of issue of first show cause for penalty and not from issue of first show cause by Joint Commissioner--Income-tax Act, 1961, ss. 269SS, 271D, 275(1)(c)-- CIT v . Jitendra Singh Rathore
(Raj) . . . 327
Reassessment --Limitation--Requirements only that reasons be recorded and notice be issued before expiry of time limit--Delay in supplying reasons recorded by Assessing Officer to assessee would not invalidate reassessment proceedings--Income-tax Act, 1961, ss. 147, 148, 149-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
----Notice--Validity--Original assessment granting special deduction under section 80-IA(4) after detailed enquiry--Reassessment proceedings to withdraw special deduction on ground that assessee not entitled to special deduction--Mere change of opinion--Notice not valid--Income-tax Act, 1961, ss. 80-IA, 147, 148-- Parixit Industries P. Ltd . v . Asst. CIT (OSD) (Guj) . . . 349
----Notice after four years--Conditions precedent--Information regarding transport subsidy available in audited accounts and statements furnished by assessee to Assessing Officer with assessee’s return--Reassessment adding transport subsidy as taxable income of assessee--Not valid--Income-tax Act, 1961, ss. 147, 148-- CIT v. Sonitpur Solvex Ltd. (Gauhati) . . . 305
----Notice after four years--Failure by assessee to disclose material facts--Documents attached to return only statutory auditor’s report and final accounts--Nothing disclosing specifically receipt of share capital of Rs. 4,50,000 from Q--Report of investigation wing on basis of which assessment reopened containing specific information that assessee received as accommodation entry Rs. 4,50,000 from Q with bank account particulars and instrument number--Reopening of assessment proper--Income-tax Act, 1961, ss. 147, 148-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
Recovery of tax --Provisional attachment--Assessment thereafter completed--Revenue not justified in attaching entire amount standing to the credit of assessee over and above demand raised against assessee--Income-tax Act, 1961, s. 281B-- Nirmal Singh v . Union of India (P&H) . . . 396
Return of income --Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes--Income-tax Act, 1961, ss. 143(1), 154, 201, 203, 244A, 245-- Court on its own Motion v . CIT
(Delhi) . . . 273
Revision --Commissioner--Powers--
Rectification of mistakes--Order rejecting application in absence of revised return--Natural justice--Non-speaking order rejecting revision on ground of availability of alternative remedy of appeal not valid--Commissioner to decide petition on merits--Income-tax Act, 1961, ss. 154, 263-- Universal Packaging v. CIT (Bom) . . . 398
Search and seizure --Refund of excess amounts seized--Interest on refund--Period for which interest payable--Refund as a result of appellate order--Interest payable from date of original assessment order--Adjustment of tax liability of brother of assessee not justified--Assessee entitled to interest for amount seized--Income-tax Act, 1961, s. 132B(3)-- G. L. Jain v . CIT (Delhi) . . . 339
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Income-tax Act, 1961 :
S. 9(1)(vii) --Deduction of tax at source--Non-resident--Effect of section 9(1)(vii)(b)--Meaning of source of income--Manufacture of products in India--Payment to US company for certification facilitating export--Source of income within India--Section 9(1)(vii) applicable--Question of liability under DTAA between USA and India not considered--Matter remanded-- CIT v . Havells India Ltd. (Delhi) . . . 376
S. 10(23C)(vi) --Exemption--Educational institution--Denial of exemption under section 10(23C)(vi)--Registration under section 12A cannot be cancelled on basis of order denying exemption--Exemption can be claimed without applying for registration--Both are independent proceedings-- CIT v . Society of Advanced Management Studies (All) . . . 269
S. 12A --Exemption--Educational institution--Denial of exemption under section 10(23C)(vi)--Registration under section 12A cannot be cancelled on basis of order denying exemption--Exemption can be claimed without applying for registration--Both are independent proceedings-- CIT v . Society of Advanced Management Studies
(All) . . . 269
S. 37 --Capital or revenue expenditure--Company--Expenditure on debenture--Debenture to be converted subsequently to shares--Expenditure deductible-- CIT v . Havells India Ltd . (Delhi) . . . 376
----Capital or revenue expenditure--Expenditure on installation of new unit--Finding that new unit constituted extension of existing business and there was common management--Expenditure deductible-- CIT v. Havells India Ltd . (Delhi) . . . 376
S. 37(1) --Capital or revenue expenditure--Expenditure relating to voluntary retirement scheme in respect of two units of assessee--Closure of two units not resulting in closure of business of assessee--Expenditure incurred for purpose of restructuring to achieve modernisation--Allowable as revenue expenditure-- CIT v. Foseco India Ltd .
(Bom) . . . 320
S. 40(a)(ia) --Deduction of tax at source--Non-resident--Effect of section 9(1)(vii)(b)--Meaning of source of income--Manufacture of products in India--Payment to US company for certification facilitating export--Source of income within India--Section 9(1)(vii) applicable--Question of liability under DTAA between USA and India not considered--Matter remanded-- CIT v . Havells India Ltd. (Delhi) . . . 376
S. 80HHC --Export--Special deduction--Different units of assessee engaged in manufacturing of different goods--Does not make separate units of assessee separate and different assessable units--Loss of one division to be adjusted against profit of other division for purposes of computation of deduction under section 80HHC-- Madhav Marbles and Granites Ltd. v. Asst. CIT (Raj) . . . 331
S. 80-IA --Reassessment--Notice--Validity--Original assessment granting special deduction under section 80-IA(4) after detailed enquiry--Reassessment proceedings to withdraw special deduction on ground that assessee not entitled to special deduction--Mere change of opinion--Notice not valid-- Parixit Industries P. Ltd . v . Asst. CIT (OSD) (Guj) . . . 349
S. 132B(3) --Search and seizure--Refund of excess amounts seized--Interest on refund--Period for which interest payable--Refund as a result of appellate order--Interest payable from date of original assessment order--Adjustment of tax liability of brother of assessee not justified--Assessee entitled to interest for amount seized-- G. L. Jain v . CIT (Delhi) . . . 339
S. 143(1) --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273
S. 147 --Reassessment--Limitation--Requirements only that reasons be recorded and notice be issued before expiry of time limit--Delay in supplying reasons recorded by Assessing Officer to assessee would not invalidate reassessment proceedings-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
----Reassessment--Notice--Validity--Original assessment granting special deduction under section 80-IA(4) after detailed enquiry--Reassessment proceedings to withdraw special deduction on ground that assessee not entitled to special deduction--Mere change of opinion--Notice not valid-- Parixit Industries P. Ltd . v . Asst. CIT (OSD)
(Guj) . . . 349
----Reassessment--Notice after four years--Conditions precedent--Information regarding transport subsidy available in audited accounts and statements furnished by assessee to Assessing Officer with assessee’s return--Reassessment adding transport subsidy as taxable income of assessee--Not valid-- CIT v. Sonitpur Solvex Ltd.
(Gauhati) . . . 305
----Reassessment--Notice after four years--Failure by assessee to disclose material facts--Documents attached to return only statutory auditor’s report and final accounts--Nothing disclosing specifically receipt of share capital of Rs. 4,50,000 from Q--Report of investigation wing on basis of which assessment reopened containing specific information that assessee received as accommodation entry Rs. 4,50,000 from Q with bank account particulars and instrument number--Reopening of assessment proper-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
S. 148 --Reassessment--Limitation--Requirements only that reasons be recorded and notice be issued before expiry of time limit--Delay in supplying reasons recorded by Assessing Officer to assessee would not invalidate reassessment proceedings-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
----Reassessment--Notice--Validity--Original assessment granting special deduction under section 80-IA(4) after detailed enquiry--Reassessment proceedings to withdraw special deduction on ground that assessee not entitled to special deduction--Mere change of opinion--Notice not valid-- Parixit Industries P. Ltd . v . Asst. CIT (OSD)
(Guj) . . . 349
----Reassessment--Notice after four years--Conditions precedent--Information regarding transport subsidy available in audited accounts and statements furnished by assessee to Assessing Officer with assessee’s return--Reassessment adding transport subsidy as taxable income of assessee--Not valid-- CIT v. Sonitpur Solvex Ltd.
(Gauhati) . . . 305
----Reassessment--Notice after four years--Failure by assessee to disclose material facts--Documents attached to return only statutory auditor’s report and final accounts--Nothing disclosing specifically receipt of share capital of Rs. 4,50,000 from Q--Report of investigation wing on basis of which assessment reopened containing specific information that assessee received as accommodation entry Rs. 4,50,000 from Q with bank account particulars and instrument number--Reopening of assessment proper-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
S. 149 --Reassessment--Limitation--Requirements only that reasons be recorded and notice be issued before expiry of time limit--Delay in supplying reasons recorded by Assessing Officer to assessee would not invalidate reassessment proceedings-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
S. 154 --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273
----Revision--Commissioner--Powers--Rectification of mistakes--Order rejecting application in absence of revised return--Natural justice--Non-speaking order rejecting revision on ground of availability of alternative remedy of appeal not valid--Commissioner to decide petition on merits-- Universal Packaging v. CIT (Bom) . . . 398
S. 195 --Deduction of tax at source--Non-resident--Effect of section 9(1)(vii)(b)--Meaning of source of income--Manufacture of products in India--Payment to US company for certification facilitating export--Source of income within India--Section 9(1)(vii) applicable--Question of liability under DTAA between USA and India not considered--Matter remanded-- CIT v . Havells India Ltd. (Delhi) . . . 376
S. 201 --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273
S. 203 --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273
S. 244A --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273
S. 245 --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273
S. 263 --Revision--Commissioner--Powers--Rectification of mistakes--Order rejecting application in absence of revised return--Natural justice--Non-speaking order rejecting revision on ground of availability of alternative remedy of appeal not valid--Commissioner to decide petition on merits-- Universal Packaging v. CIT
(Bom) . . . 398
S. 269SS --Penalty--Deposit in cash exceeding prescribed limit--Limitation--Six months from date of initiation of action for levy of penalty--Period to be reckoned from date of issue of first show cause for penalty and not from issue of first show cause by Joint Commissioner-- CIT v . Jitendra Singh Rathore (Raj) . . . 327
S. 271(1)(c) --Penalty--Concealment of income--Transactions disclosed in return--Claim of expenditure to be revenue--Disallowance of claim--Assessee not liable for penalty-- CIT v . Amtek Auto Ltd . (P&H) . . . 394
S. 271D --Penalty--Deposit in cash exceeding prescribed limit--Limitation--Six months from date of initiation of action for levy of penalty--Period to be reckoned from date of issue of first show cause for penalty and not from issue of first show cause by Joint Commissioner-- CIT v . Jitendra Singh Rathore (Raj) . . . 327
S. 275(1)(c) --Penalty--Deposit in cash exceeding prescribed limit--Limitation--Six months from date of initiation of action for levy of penalty--Period to be reckoned from date of issue of first show cause for penalty and not from issue of first show cause by Joint Commissioner-- CIT v . Jitendra Singh Rathore (Raj) . . . 327
S. 281B --Recovery of tax--Provisional attachment--Assessment thereafter completed--Revenue not justified in attaching entire amount standing to the credit of assessee over and above demand raised against assessee-- Nirmal Singh v . Union of India
(P&H) . . . 396
--
Volume 352 Part 3 (Issue dated 22-4-2013)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
HIGH COURTS
Capital gains --Business income--Trading or investment--Long-term capital gains--Assessee treating land as fixed asset for a long time and using it for agricultural purposes--No evidence that assessee purchased land by funds borrowed--Sale proceeds resulting long-term capital gains and not business income--Income-tax Act, 1961-- CIT v. Delhi Apartments Pvt. Ltd. (Delhi) . . . 322
Capital or revenue expenditure --Company--Expenditure on debenture--Debenture to be converted subsequently to shares--Expenditure deductible--Income-tax Act, 1961, s. 37-- CIT v . Havells India Ltd . (Delhi) . . . 376
----Expenditure on installation of new unit--Finding that new unit constituted extension of existing business and there was common management--Expenditure deductible--Income-tax Act, 1961, s. 37-- CIT v. Havells India Ltd .
(Delhi) . . . 376
----Expenditure relating to voluntary retirement scheme in respect of two units of assessee--Closure of two units not resulting in closure of business of assessee--Expenditure incurred for purpose of restructuring to achieve modernisation--Allowable as revenue expenditure--Income-tax Act, 1961, s. 37(1)-- CIT v. Foseco India Ltd .
(Bom) . . . 320
Deduction of tax at source --Non-resident--Effect of section 9(1)(vii)(b)--Meaning of source of income--Manufacture of products in India--Payment to US company for certification facilitating export--Source of income within India--Section 9(1)(vii) applicable--Question of liability under DTAA between USA and India not considered--Matter remanded--Income-tax Act, 1961, ss. 9(1)(vii), 40(a)(ia), 195-- CIT v . Havells India Ltd. (Delhi) . . . 376
Exemption --Educational institution--Denial of exemption under section 10(23C)(vi)--Registration under section 12A cannot be cancelled on basis of order denying exemption--Exemption can be claimed without applying for registration--Both are independent proceedings--Income-tax Act, 1961, ss. 10(23C)(vi), 12A-- CIT v . Society of Advanced Management Studies (All) . . . 269
Export --Special deduction--Different units of assessee engaged in manufacturing of different goods--Does not make separate units of assessee separate and different assessable units--Loss of one division to be adjusted against profit of other division for purposes of computation of deduction under section 80HHC--Income-tax Act, 1961, s. 80HHC-- Madhav Marbles and Granites Ltd. v. Asst. CIT (Raj) . . . 331
Income --Accrual of income--No transfer of possession during previous year relevant to assessment year 2006-07 but only receipt of advance--Execution of sale deed in following year--Amount received as advance not taxable in assessment year 2006-07--Income-tax Act, 1961-- CIT v . Delhi Apartments Pvt. Ltd . (Delhi) . . . 322
Penalty --Concealment of income--Transactions disclosed in return--Claim of expenditure to be revenue--Disallowance of claim--Assessee not liable for penalty--Income-tax Act, 1961, s. 271(1)(c)-- CIT v . Amtek Auto Ltd . (P&H) . . . 394
----Deposit in cash exceeding prescribed limit--Limitation--Six months from date of initiation of action for levy of penalty--Period to be reckoned from date of issue of first show cause for penalty and not from issue of first show cause by Joint Commissioner--Income-tax Act, 1961, ss. 269SS, 271D, 275(1)(c)-- CIT v . Jitendra Singh Rathore
(Raj) . . . 327
Reassessment --Limitation--Requirements only that reasons be recorded and notice be issued before expiry of time limit--Delay in supplying reasons recorded by Assessing Officer to assessee would not invalidate reassessment proceedings--Income-tax Act, 1961, ss. 147, 148, 149-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
----Notice--Validity--Original assessment granting special deduction under section 80-IA(4) after detailed enquiry--Reassessment proceedings to withdraw special deduction on ground that assessee not entitled to special deduction--Mere change of opinion--Notice not valid--Income-tax Act, 1961, ss. 80-IA, 147, 148-- Parixit Industries P. Ltd . v . Asst. CIT (OSD) (Guj) . . . 349
----Notice after four years--Conditions precedent--Information regarding transport subsidy available in audited accounts and statements furnished by assessee to Assessing Officer with assessee’s return--Reassessment adding transport subsidy as taxable income of assessee--Not valid--Income-tax Act, 1961, ss. 147, 148-- CIT v. Sonitpur Solvex Ltd. (Gauhati) . . . 305
----Notice after four years--Failure by assessee to disclose material facts--Documents attached to return only statutory auditor’s report and final accounts--Nothing disclosing specifically receipt of share capital of Rs. 4,50,000 from Q--Report of investigation wing on basis of which assessment reopened containing specific information that assessee received as accommodation entry Rs. 4,50,000 from Q with bank account particulars and instrument number--Reopening of assessment proper--Income-tax Act, 1961, ss. 147, 148-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
Recovery of tax --Provisional attachment--Assessment thereafter completed--Revenue not justified in attaching entire amount standing to the credit of assessee over and above demand raised against assessee--Income-tax Act, 1961, s. 281B-- Nirmal Singh v . Union of India (P&H) . . . 396
Return of income --Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes--Income-tax Act, 1961, ss. 143(1), 154, 201, 203, 244A, 245-- Court on its own Motion v . CIT
(Delhi) . . . 273
Revision --Commissioner--Powers--
Rectification of mistakes--Order rejecting application in absence of revised return--Natural justice--Non-speaking order rejecting revision on ground of availability of alternative remedy of appeal not valid--Commissioner to decide petition on merits--Income-tax Act, 1961, ss. 154, 263-- Universal Packaging v. CIT (Bom) . . . 398
Search and seizure --Refund of excess amounts seized--Interest on refund--Period for which interest payable--Refund as a result of appellate order--Interest payable from date of original assessment order--Adjustment of tax liability of brother of assessee not justified--Assessee entitled to interest for amount seized--Income-tax Act, 1961, s. 132B(3)-- G. L. Jain v . CIT (Delhi) . . . 339
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Income-tax Act, 1961 :
S. 9(1)(vii) --Deduction of tax at source--Non-resident--Effect of section 9(1)(vii)(b)--Meaning of source of income--Manufacture of products in India--Payment to US company for certification facilitating export--Source of income within India--Section 9(1)(vii) applicable--Question of liability under DTAA between USA and India not considered--Matter remanded-- CIT v . Havells India Ltd. (Delhi) . . . 376
S. 10(23C)(vi) --Exemption--Educational institution--Denial of exemption under section 10(23C)(vi)--Registration under section 12A cannot be cancelled on basis of order denying exemption--Exemption can be claimed without applying for registration--Both are independent proceedings-- CIT v . Society of Advanced Management Studies (All) . . . 269
S. 12A --Exemption--Educational institution--Denial of exemption under section 10(23C)(vi)--Registration under section 12A cannot be cancelled on basis of order denying exemption--Exemption can be claimed without applying for registration--Both are independent proceedings-- CIT v . Society of Advanced Management Studies
(All) . . . 269
S. 37 --Capital or revenue expenditure--Company--Expenditure on debenture--Debenture to be converted subsequently to shares--Expenditure deductible-- CIT v . Havells India Ltd . (Delhi) . . . 376
----Capital or revenue expenditure--Expenditure on installation of new unit--Finding that new unit constituted extension of existing business and there was common management--Expenditure deductible-- CIT v. Havells India Ltd . (Delhi) . . . 376
S. 37(1) --Capital or revenue expenditure--Expenditure relating to voluntary retirement scheme in respect of two units of assessee--Closure of two units not resulting in closure of business of assessee--Expenditure incurred for purpose of restructuring to achieve modernisation--Allowable as revenue expenditure-- CIT v. Foseco India Ltd .
(Bom) . . . 320
S. 40(a)(ia) --Deduction of tax at source--Non-resident--Effect of section 9(1)(vii)(b)--Meaning of source of income--Manufacture of products in India--Payment to US company for certification facilitating export--Source of income within India--Section 9(1)(vii) applicable--Question of liability under DTAA between USA and India not considered--Matter remanded-- CIT v . Havells India Ltd. (Delhi) . . . 376
S. 80HHC --Export--Special deduction--Different units of assessee engaged in manufacturing of different goods--Does not make separate units of assessee separate and different assessable units--Loss of one division to be adjusted against profit of other division for purposes of computation of deduction under section 80HHC-- Madhav Marbles and Granites Ltd. v. Asst. CIT (Raj) . . . 331
S. 80-IA --Reassessment--Notice--Validity--Original assessment granting special deduction under section 80-IA(4) after detailed enquiry--Reassessment proceedings to withdraw special deduction on ground that assessee not entitled to special deduction--Mere change of opinion--Notice not valid-- Parixit Industries P. Ltd . v . Asst. CIT (OSD) (Guj) . . . 349
S. 132B(3) --Search and seizure--Refund of excess amounts seized--Interest on refund--Period for which interest payable--Refund as a result of appellate order--Interest payable from date of original assessment order--Adjustment of tax liability of brother of assessee not justified--Assessee entitled to interest for amount seized-- G. L. Jain v . CIT (Delhi) . . . 339
S. 143(1) --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273
S. 147 --Reassessment--Limitation--Requirements only that reasons be recorded and notice be issued before expiry of time limit--Delay in supplying reasons recorded by Assessing Officer to assessee would not invalidate reassessment proceedings-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
----Reassessment--Notice--Validity--Original assessment granting special deduction under section 80-IA(4) after detailed enquiry--Reassessment proceedings to withdraw special deduction on ground that assessee not entitled to special deduction--Mere change of opinion--Notice not valid-- Parixit Industries P. Ltd . v . Asst. CIT (OSD)
(Guj) . . . 349
----Reassessment--Notice after four years--Conditions precedent--Information regarding transport subsidy available in audited accounts and statements furnished by assessee to Assessing Officer with assessee’s return--Reassessment adding transport subsidy as taxable income of assessee--Not valid-- CIT v. Sonitpur Solvex Ltd.
(Gauhati) . . . 305
----Reassessment--Notice after four years--Failure by assessee to disclose material facts--Documents attached to return only statutory auditor’s report and final accounts--Nothing disclosing specifically receipt of share capital of Rs. 4,50,000 from Q--Report of investigation wing on basis of which assessment reopened containing specific information that assessee received as accommodation entry Rs. 4,50,000 from Q with bank account particulars and instrument number--Reopening of assessment proper-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
S. 148 --Reassessment--Limitation--Requirements only that reasons be recorded and notice be issued before expiry of time limit--Delay in supplying reasons recorded by Assessing Officer to assessee would not invalidate reassessment proceedings-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
----Reassessment--Notice--Validity--Original assessment granting special deduction under section 80-IA(4) after detailed enquiry--Reassessment proceedings to withdraw special deduction on ground that assessee not entitled to special deduction--Mere change of opinion--Notice not valid-- Parixit Industries P. Ltd . v . Asst. CIT (OSD)
(Guj) . . . 349
----Reassessment--Notice after four years--Conditions precedent--Information regarding transport subsidy available in audited accounts and statements furnished by assessee to Assessing Officer with assessee’s return--Reassessment adding transport subsidy as taxable income of assessee--Not valid-- CIT v. Sonitpur Solvex Ltd.
(Gauhati) . . . 305
----Reassessment--Notice after four years--Failure by assessee to disclose material facts--Documents attached to return only statutory auditor’s report and final accounts--Nothing disclosing specifically receipt of share capital of Rs. 4,50,000 from Q--Report of investigation wing on basis of which assessment reopened containing specific information that assessee received as accommodation entry Rs. 4,50,000 from Q with bank account particulars and instrument number--Reopening of assessment proper-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
S. 149 --Reassessment--Limitation--Requirements only that reasons be recorded and notice be issued before expiry of time limit--Delay in supplying reasons recorded by Assessing Officer to assessee would not invalidate reassessment proceedings-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364
S. 154 --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273
----Revision--Commissioner--Powers--Rectification of mistakes--Order rejecting application in absence of revised return--Natural justice--Non-speaking order rejecting revision on ground of availability of alternative remedy of appeal not valid--Commissioner to decide petition on merits-- Universal Packaging v. CIT (Bom) . . . 398
S. 195 --Deduction of tax at source--Non-resident--Effect of section 9(1)(vii)(b)--Meaning of source of income--Manufacture of products in India--Payment to US company for certification facilitating export--Source of income within India--Section 9(1)(vii) applicable--Question of liability under DTAA between USA and India not considered--Matter remanded-- CIT v . Havells India Ltd. (Delhi) . . . 376
S. 201 --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273
S. 203 --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273
S. 244A --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273
S. 245 --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273
S. 263 --Revision--Commissioner--Powers--Rectification of mistakes--Order rejecting application in absence of revised return--Natural justice--Non-speaking order rejecting revision on ground of availability of alternative remedy of appeal not valid--Commissioner to decide petition on merits-- Universal Packaging v. CIT
(Bom) . . . 398
S. 269SS --Penalty--Deposit in cash exceeding prescribed limit--Limitation--Six months from date of initiation of action for levy of penalty--Period to be reckoned from date of issue of first show cause for penalty and not from issue of first show cause by Joint Commissioner-- CIT v . Jitendra Singh Rathore (Raj) . . . 327
S. 271(1)(c) --Penalty--Concealment of income--Transactions disclosed in return--Claim of expenditure to be revenue--Disallowance of claim--Assessee not liable for penalty-- CIT v . Amtek Auto Ltd . (P&H) . . . 394
S. 271D --Penalty--Deposit in cash exceeding prescribed limit--Limitation--Six months from date of initiation of action for levy of penalty--Period to be reckoned from date of issue of first show cause for penalty and not from issue of first show cause by Joint Commissioner-- CIT v . Jitendra Singh Rathore (Raj) . . . 327
S. 275(1)(c) --Penalty--Deposit in cash exceeding prescribed limit--Limitation--Six months from date of initiation of action for levy of penalty--Period to be reckoned from date of issue of first show cause for penalty and not from issue of first show cause by Joint Commissioner-- CIT v . Jitendra Singh Rathore (Raj) . . . 327
S. 281B --Recovery of tax--Provisional attachment--Assessment thereafter completed--Revenue not justified in attaching entire amount standing to the credit of assessee over and above demand raised against assessee-- Nirmal Singh v . Union of India
(P&H) . . . 396
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