----- Forwarded Message -----
From: Kapil Goel <advocatekapilgoel@gmail.com>
To: CA.KAPIL GOEL <kapilnkgoelandco@gmail.com>
Sent: Tuesday, 21 May 2013 11:48 AM
Subject: [Gzb_CA Group -CA. VINAY MITTAL] Fwd: Kol. bench ITAT on 14A Rule 8D Satisfaction of AO must (same mumbai bench ITAT); Capital gains section 48 allowable compensation by seller to earlier prospective buyer; Gift genuine case revenue's onus; CAPITAL RECEIPT; 15% accumulation unfettered right of charitable trust 12AA; 69A vs. books rejected
From: Kapil Goel <advocatekapilgoel@gmail.com>
To: CA.KAPIL GOEL <kapilnkgoelandco@gmail.com>
Sent: Tuesday, 21 May 2013 11:48 AM
Subject: [Gzb_CA Group -CA. VINAY MITTAL] Fwd: Kol. bench ITAT on 14A Rule 8D Satisfaction of AO must (same mumbai bench ITAT); Capital gains section 48 allowable compensation by seller to earlier prospective buyer; Gift genuine case revenue's onus; CAPITAL RECEIPT; 15% accumulation unfettered right of charitable trust 12AA; 69A vs. books rejected
Gist of the orders
IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH: KOLKATA I.T.A No. 1809/Kol/2012 /) Assessment Year: 2009-10
Ashish Jhunjhunwala Date of pronouncement: 14.05.2013
We find from the facts of the above case that the AO has not examined the accounts of the assessee and there is no satisfaction recorded by the AO about the correctness of the claim
of the assessee and without the same he invoked Rule 8D of the Rules. While rejecting the claim of the assessee with regard to expenditure or no expenditure, as the case may be, in relation to exempted income, the AO has to indicate cogent reasons for the same. From the facts of the present case it is noticed that the AO has not considered the claim of the assessee and straight away embarked upon computing disallowance under Rule 8D of the Rules on
presuming the average value of investment at ½% of the total value. In view of the above and respectfully following the coordinate bench decision in the case of J. K. Investors (Bombay) Ltd., supra, we uphold the order of CIT(A). This appeal of revenue is dismissed.
THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES "B", MUMBAI Bakliwal Financial Services (I) P.
Ltd. 19 ITA No. 4885/Mum/2011 : Asst.Year 2007-2008 &
ITA No. 2991/Mum/2012 : Asst. Year 2008-2009 17. After considering the rival submissions, we are of the opinion that invoking Rule 8D does not arise as there was no satisfaction recorded by the AO under section 14A(2). More over, the assessee stock in trade cannot be considered as investment for disallowance
under Rule 8D following the Principles laid down by the Hon'ble Karnataka High Court in the case of CCI Ltd. (supra). Stock in Trade cannot be considered as investment for the purpose of working out disallowance at half percent also under Rule 8D(iii). There is only an investment of Rs.10,500/- as per the balance sheet which can only be considered for this purpose. Therefore, since the dividend earned
is incidental to the business activity of the assessee, we restrict the disallowance to 5% on the amount earned as dividend under section 14A which should meet the ends of justice on the facts of the case. AO is directed to work out the disallowance under section 14A
IN THE INCOME TAX APPELLATE TRIBUNAL "C" BENCH: KOLKATA I.T.A No. 1112/Kol/2011 /) Assessment Year: 2007-08 Satyabrata Dey 14.05.2013
We have heard rival submissions and gone through facts and circumstances of the case. The facts are that the assessee received two flats i.e. 3B and 3C at 5, Loudon St., Kolkata on sub-lease from Bhagyalakshmi Commercial Co. Pvt. Ltd. vide agreement dated 02.09.2004 falling FY 2004-05 relevant to AY 2005-06. During financial year 2005-06, on 05.05.2005, relevant to Assessment Year 2006-07 assessee entered into an agreement with Onkar Management Pvt. Ltd. for transfer of this property for a consideration of Rs.90 lakh. Subsequently, on 04.08.2006, assessee transferred the above said property in faovur of one
Mrs. Poonam Agarwal instead of Onkar Management Pvt. Ltd. for a onsideration of Rs.2.20 cr. In turn, Onkar Management Pvt. Ltd. filed an arbitration claim petition and claimed sum of Rs.1,31,10,000/- as penalty for breach of terms and conditions of contract. As noted above, Arbitrator appointed by Hon'ble High Court has passed an award paying compensation of Rs.72 lakh. In such circumstances whether Onkar Management Pvt. Ltd. was having rights in
the above stated two flats by virtue of which Arbitrator allowed to pay compensation of Rs.72 lakh vide his order dated 30.09.2007. These facts are not disputed or not controverted by revenue. Only allegation of revenue is that these are self made documents and are bogus. But they are unable to prove the same as bogus by any cogent evidence From the above proposition of law laid down by Hon'ble Supreme Court and considering the facts of the present case, we are of the view that where the title is defective, incomplete or imperfect, the cost of making the title complete and perfect can be treated as the 'cost of acquisition' falling u/s. 48 of the Act. In such circumstances, we allow the claim of the
assessee as deductible u/s. 48 of the Act. We order accordingly. 9. In the result, appeal of assessee is allowed.
IN THE INCOME TAX APPELLATE TRIBUNAL "C" BENCH: KOLKATA Indra Chand Agarwal Vs. Addl. Commissioner of Income-tax
(PAN: ACCPA8179Q) 14.05.2013
12. We have heard rival submissions and gone through facts and circumstances of the case. We find that the admitted facts are that the (SS) Building was owned by 8 co-owners and that also undivided share having floor area of 1,29,802 sft. i.e. 6+1 storied, acquired in 1984 to 1986. The cost, of construction as well as purchase of land, was paid by 8 co-owners including assessee. It is also a fact that various companies entered into several lease agreements with assessee including co-owners of building for letting out the property on rent and service
charges. It is also a fact that rent and service charges were paid by these companies proportionately to the co-owners. Taxes were deducted i.e. TDS and TDS certificates were issued in the names of 8 co-owners separately. This rental income and service charges are assessed to income tax from last about 15/20 years and there is no dispute about it. During the year under consideration, out of 8 co-owners, the 4 co-owners namely, mother of the assessee Smt. Benarashi Devi Agarwal and three brothers namely Shri Kishore Kr. Agarwala, Shri
Narayan Prasad Agarwala and Shri Prakash Chand Agarwala made gift of their undivided share in the above house property, the (SS) Building, out of natural love and affection to the assessee vide separate gift deeds duly registered with Sub-registrar on 08.08.2005. This (SS) Building was purchased and constructed in 1984 to 1986 and there is no dispute about sources. About the ownership of these 8 co-owners there is no dispute that they are having 1/8th share each in
the above building. These 4 co-owners, blood relations with the assessee, have gifted their undivided share i.e. 1/8th share each to the assessee. It means the requirement of gift i.e. (i) it is between relations within the meaning of definition of relatives, (ii) all donors are assessed to income tax and gifts are by way of gift deed registered with Sub-registrar on 08.08.2005 i.e. separate gift deeds of 1/8th undivided share of each of 4 co-owners, (iii) gift is disclosed by donors in their return of income by reducing the capital account and by donee by including in
his capital account. The gift is made on account of their love and affection. The source of gift in the hands of donor is explained. It means that all the ingredients of gift has been explained and met with. The only issue raised by AO and by CIT, DR that the undivided share cannot be gifted. For this, he referred to the decision of Hon'ble Supreme Court in the case of Thamma Venkat Subbamma Thamma Rattamma, AIR 1987 SC 1775, wherein it is stated that the undivided interest in the coparceners property i.e. HUF property cannot be transferred by way
of gift. Further, the Ld. CIT, DR as well as the AO referred to the decision of Hon'ble M. P. High Court in the case of Balchand Malaiya (HUF) Vs. CIT 227 ITR 651 (as referred in AO's order). In the facts and circumstances
of the instant case, apart from circumstances which by themselves could be said to be neutral, there was no material to doubt the nature of the transaction and to hold that the same was income of the assessee. Every gift made or in regard to which no quid pro quo has been made in the absence of the same automatically the income from transaction cannot be made as income of the assessee u/s. 69 of the Act
IN THE INCOME TAX APPELLATE TRIBUNAL "C" BENCH: KOLKATA I.T.A No. 894/Kol/2012 Chanakya Finvest (P) Ltd. 14.05.2013 have heard rival submissions and gone through facts and circumstances of the case.
First of all, it is to be seen that what is the chronology of events, as recorded by the AO in his
remand report given, during course of appellate proceedings before CIT(A). The chronology of
events is as under:
Date Happening
1. 04.01.10 Order u/s l27 passed by the Ld. CIT, Delhi-I, New Delhi.
2. 23.03.10 Proposal to re-open the case was sent to Ld. Addl. CIT, Range-3, Delhi.
3. 25.03.10 Ld. Addl.CIT, Range-3, accorded the approval for re-open the case.
4. 25.03.10 Notice u/s 148 issued and served by ITO, Ward-3(3), New Delhì.
5. 30.11.10 Record received by the under signed from ITO, Ward-3(3), New Delhi.
6. 03.12.10 The assessee complied to the notice u/s 148 vide petition dated 03.12.10.
7. 03.12.10 Notice u/s 143(2) and 142(1) both were issued and served.
8. 29.12.10 Assessment completed u/s 147/144 as there were non-compliance
In view of the above principle regarding jurisdiction and facts of the present case, the order passed by CIT-1, Delhi, transferring jurisdiction from ITO, Ward-3(3), New Delhi on 04.01.2010, subsequent action of the AO i.e. ITO, Ward-3(3), New Delhi issuing notice u/s. 148 of the Act dated 25.03.2010 is invalid.. The CIT, Delhi-1 passed order u/s. 127 of the Act on 01.01.2010 transferring the jurisdiction of the assessee to ITO, Wd-6(1), Kolkata and the jurisdiction in respect to every action for all assessment years lies with the ITO, Wd-6(1),
Kolkata and only he is competent to issue notice u/s. 148 of the Act. In such circumstances, the notice issued u/s. 148 of the Act by the ITO, Ward-3(3), New Delhi is bad and illegal in view of the clear provisions of the Act because an order for transfer of case was validly made by CIT and the purpose for transfer was simply that all future proceedings are to be taken by ITO, Ward-6(1), Kolkata w.e.f. 04.01.2010. Hence, the notice issued u/s. 148 of the Act dated
25.03.2010 is quashed
IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH "C", KOLKATA M/s.Carnival Investments Ltd. Assessment Year : 2007-08 03.05.2013 The sole issue involved in this appeal is that whether Rs.60,59,303/- received by the assessee under the agreement dated 30.03.2005 from M/s.Tyco Electronics
Middle East FZE, Dubai was exempted income from Income Tax The main argument of the assessee was that the amount received by the
assessee in consideration of exercising its voting right in the meeting of RPG
Raychem Ltd. was a wind fall receipt in the hands of the assessee, was not in the
nature of income u/s 2(24) of the IT Act. For the above submission reliance was
placed on the decision of the Hon'ble Bombay High Court in the case of CIT vs David Lopes Menezes (supra). We find that similar to the facts of the above case in the instant case also the consideration was received by the assessee in lieu of its exercising of voting rights in a particular fashion. In the instant case also it is not in dispute that to exercise voting rights is not the business of the assessee. It is also not in dispute that similar receipt has never been received by the assessee either in the earlier years or in the subsequent years. The receipt was not of recurring in nature. The ld. DR could not point out any distinguishable facts in the instant case from the facts which were in the case of CIT vs David Lopes Menezes (supra). In absence of any distinguishable features being
pointed out we are of the considered opinion, that the Hon'ble Bombay High Court being a superior court decision of the same should be respectfully followed by us. In the absence of any other contrary decision being cited by the Revenue we following the above decision of the Hon'ble Bombay High Court held that the receipt of Rs.60,59,303/- was not in the nature of income in the hands of the assessee company. We, therefore, set aside the orders of the ld. CIT(A) on this issue and allow the grounds of appeal of the assessee.
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES 'F' MUMBAI M/s. Unicorn Textiles Pvt. Ltd 15-05-2013 We have heard the rival submissions and perused the material put before us.
It is a fact that blank signed cheques were found at the business premises of the
assessee and same were inventoried by the survey team. After considering the
submissions of both the parties, we are of the opinion that blank cheques cannot be
considered as money/ bullion/jewellery other available articles and provisions of
Section 69A are not applicable. Secondly, we endorsed view of the FAA that once
Books of Accounts are rejected and income is estimated u/s.144 of the Act, no
addition can be made u/s. 69A of the Act.
IN THE INCOME TAX APPELLATE TRIBUNAL "E" BENCH, MUMBA I.T.A. No. 5646/M/2011 Sayaj i Ubakhin Memorial Trust ,
2n d f loor, Green House, Green 17.5.2013 We observe that ld CIT(A) has relied on the decision of Hon'ble Supreme Court in
the case of A.I.N. Rao Charitable Trust (supra), wherein , it is held that exemption
available u/s.11(1)(a) i.e. 15% of income is unfettered and not subject to any
conditions. In the case before us, assessee has claimed 15% accumulation u/s.11(1)(a)
of the Act. Hence, we do not see any reason to interfere with the order of ld CIT(A) and
reject ground of appeal taken by department.
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