Differential treatment cannot be meted out to another co-owner while making assessment of same property
ACIT Vs. Shri Mahesh Chunilal Shah (ITAT Ahmedabad), ITA No. 210/Ahd/2011, Date of Order: 27/08/2014
Co-owned property cannot be valued at a value different from value accepted in case of another co-owner
The fact that the godown was constructed in F.Y. 1995-96 is not in dispute. The dispute is about the cost of construction. Assessee after considering the cost of acquisition at Rs. 27 lacs had worked out the capital gains which was not acceptable to AO, Ld. CIT(A) while allowing the appeal of Assessee has noted that the valuation report of the valuer had also estimated the cost of construction of the godown at Rs. 54 lacs and therefore the Assessee's share of 1/2 worked out to Rs. 27 lacs and thus he has considered the cost of acquisition of Rs. 27 lacs considered by Assessee to be in order. Before us, Revenue has not brought any material to controvert the finding of ld. CIT(A).
Further, Assessee has submitted that the balance 1/2 share which belonged to his brother and in his assessments, the cost of acquisition of the same godown has been accepted by the Revenue. Before us, no material has been brought on record to show that the valuation of the godown in the case of Assessee's brother has been challenged in appeal before Tribunal.
We further find that the Hon'ble Madras High Court in the case of CIT vs. Kumararani Meenakshi Achi (supra) has held that the differential treatment cannot be meted out to another co-owner while making the assessment of same property or while valuing the same property. In view of the aforesaid facts and relying on the aforesaid decision of Hon'ble Madras High Court, we find no reason to interfere with the order of Ld. CIT(A) and thus these grounds of Revenue are dismissed.
01.09.2014
Monday
BOARD's Circular No. 18/2006-Cus dated 05.06.2006 clarified that the SAD is payable by the importer on the imports made under DEPB scheme. The said circular was challenged before the High Court of Gujarat, which vide its order dated 25.07.2012 quashed the said Circular dated 05.06.2006. The SLP filed by Department against the said order of High Court was dismissed by the Supreme Court vide their order dated I5.02.2013.
Board received a proposal from the Commissioner of Customs, Ahmedabad for filing of Review Petition against order dated 15.02.2013 passed by the Supreme Court. The matter was examined by Board and the case was referred to the Ministry of Law & Justice regarding feasibility of filing Review Petition.
The ASG has opined against filing of Review Petition in the matter stating that no purpose will be served by filing the Review as the Supreme Court will not entertain this matter.
In an identical case, theASG has opined as under:
"Even otherwise, I am unable to understand what purpose will be served by filing a review petition in a case where the Hon'ble Supreme Court has dismissed a SLP in limine without assigning any reasons. An in limine dismissal merely means that the Hon'ble Supreme Court did not find it an appropriate case to consider the matter. Such an order does not amount to law declared under Article 141 of the Constition of India (Kunhayammed Vs State of Kerala - 2002-TIOL-50-SC-LIMITATION)"
The Board got its straw from Kunhayammed.
Now, the Board feels that since the Department have(?) prima facie a strong case on merit in its favour, field formations should take up all such cases (involving aforesaid issue) for filing of Appeal before the Courts/Tribunal.
Is it such a big issue involving hundreds of crores that they have to flog a dead horse? And is this what Modi wants from his babus? Is this an attempt to keep the Commissioners busy to justify the great cadre review?
And if the Department has (have) a strong case, why was it not able to convince the Gujarat High Court and what makes it believe that the Gujarat High Court judgement will not be followed by other High Courts and Tribunal? And what will happen if the same issue reaches the Gujarat High Court again? The Department lost because of its poor drafting skills - in fact the Gujarat High Court called the department's contention a legal fallacy.
The Board's letter is addressed to all Chief Commissioners and DGs of DRI and CEI. Maybe the super sleuths will now pounce upon anyone who had imports under DEPB.
A copy of the letter is also marked to the JS, Drawback with a request to consider suitable amendment in the relevant provisions, to safeguard revenue.
They should also convince ArunJ aitley to make the amendment retrospective.
Maybe the Board should try for a constitution amendment to remove the jurisdiction of High Courts and the Supreme Court on tax matters. The Under-Secretary in the Board should be the final authority on all matters pertaining to taxes.
Taxability of Agricultural income post amendment by Finance (No.2) Act, 2014
Agricultural income is exempt from Income Tax under section 10(1) of the Income Tax Act, 1961. However, its included, for rate purposes, in computing the Income Tax Liability if following two conditions are cumulatively satisfied:
- Net Agricultural income exceeds INR 5,000/- for P.Y. 2014-15, and
- Total income, excluding net Agricultural income, exceeds INR 2,50,000/-.
Kindly note that the aforementioned condition at Serial No.2 shall change to INR 3,00,000/- in case if the Assessee is an individual who falls in the age bracket of 60 to 79 Years during the P.Y. 2014-15, and to INR 5,00,000/- in case if the Assessee is an individual who is of the age of 80 Years or more during the P.Y. 2014-15.
Once the aforementioned conditions are satisfied then we shall compute the Tax liability in the following manner:
- First, include the Agricultural income while computing your income Tax liability. Example – Let us say that an Individual Assessee has a Total income of INR 7,50,000/- (excluding Agricultural income) and a Net Agricultural income of INR 100,000/-. Then, per this step, Tax shall be computed on INR 7,50,000/- + INR 1,00,000/- = INR 8,50,000/-. Thus, income Tax amount as per this step shall be INR 95,000/- for an individual who is below the age of 60 Years during the P.Y. 2014-15.
- Second, add the applicable basic Tax slab benefit, as applicable, to the Net Agricultural income. Thus, per our example mentioned above we shall add INR 2,50,000/- to INR 1,00,000/- as the applicable Tax slab benefit available to an individual below 60 Years of age is INR 2,50,000/-. Now we will compute income Tax on INR 3,50,000/- (Tax slab benefit 2,50,000 + Net Agricultural income 1,00,000). The amount of Tax shall be INR 10,000/-.
- Third, subtract the Tax computed in Second step from the Tax computed in First step = INR 85,000/-. Thus, this is the income Tax liability subject to deductions, Education cess etc., as applicable.
BOMBAY HIGH COURT - Income Tax
Accrual of expenditure - interest liability on excise duty - interest for the period 1.4.82 to 31.3.83 payable pursuant to the Gujarat High Court order dated 6.4.1984 – Held that:- Contingent liabilities do not constitute expenditure and cannot be the subject-matter of deduction even under the mercantile system of accounting. - There was no actual liability in praesenti - no demand was raised against the assessee - The assessee did not admit any liability and showed cause refuting the allegations made in the show-cause notices - the cause shown by the assessee was accepted by the excise authorities and proceedings initiated by the show-cause notices were dropped - the liability claimed by the assessee as a liability on account of excise duty was merely a contingent liability which cannot constitute expenditure for the purposes of income-tax – Decided against Assessee.
Customization of software as per client's needs would fall under the term 'produce' for sec. 10A relief purpose
September 1, 2014[2014] 48 taxmann.com 17 (Hyderabad - Trib.)
IT : Costomized software having passed through cumbersome process of customization, would become a different product, entitled to section 10A exemption
CIT couldn't pass revisionary order on directions of 'ITO' without recording his satisfaction under sec. 263
September 1, 2014[2014] 48 taxmann.com 53 (Jaipur - Trib.)/[2014] 161 TTJ 801 (Jaipur - Trib.)
IT: Before taking any action under section 263, Commissioner must record his satisfaction; issuance of notice under section 263 on basis of proposal made by ITO is void ab initio
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