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From: Kapil Goel <advocatekapilgoel@gmail.com>
To: CA.KAPIL GOEL <kapilnkgoelandco@gmail.com>
Sent: Monday, 4 March 2013 12:30 AM
Subject: [Gzb_CA Group -CA. VINAY MITTAL] Delhi; P&h; Bombay; Allahabad & Gujarat: Reopening (supply of reasons and curable error 292B concept) Partnership firm retirement cap. gains; Concealment for inadvertent punching error; Real estate: assessment period; TDS based income assessment; Municipality meaning agricultural land (sec. 2(14); penalty reply
From: Kapil Goel <advocatekapilgoel@gmail.com>
To: CA.KAPIL GOEL <kapilnkgoelandco@gmail.com>
Sent: Monday, 4 March 2013 12:30 AM
Subject: [Gzb_CA Group -CA. VINAY MITTAL] Delhi; P&h; Bombay; Allahabad & Gujarat: Reopening (supply of reasons and curable error 292B concept) Partnership firm retirement cap. gains; Concealment for inadvertent punching error; Real estate: assessment period; TDS based income assessment; Municipality meaning agricultural land (sec. 2(14); penalty reply
Included in this update:
a) Allahabad high court on reopening u/s 148: non supply of reasons fatal error; mere non mention of ASST. YEAR is not fatal to notice;
b) Gujarat high court: non consideration of assessee's penalty reply: vitiates the penalty order
c) Delhi High Court TDS based income assessment (rectifiable error)
d) Bombay high court on Capital gains (retirement partnership case); Concealment (punching error : inadvertent mistake) ; Real estate : year of taxability of extra money;
e) P&H High court comprehensive order agricultural land (urban or rural section 2(14) Income tax Act, 1961)
a) Allahabad high court on reopening u/s 148: non supply of reasons fatal error; mere non mention of ASST. YEAR is not fatal to notice;
b) Gujarat high court: non consideration of assessee's penalty reply: vitiates the penalty order
c) Delhi High Court TDS based income assessment (rectifiable error)
d) Bombay high court on Capital gains (retirement partnership case); Concealment (punching error : inadvertent mistake) ; Real estate : year of taxability of extra money;
e) P&H High court comprehensive order agricultural land (urban or rural section 2(14) Income tax Act, 1961)
INCOME TAX APPEAL No. - 94 of 2009:- M/S V.S.R.S.Securities(P) Ltd.
HIGH COURT OF JUDICATURE AT ALLAHABAD Having heard the learned counsel for the parties and in view of the finding recorded by the CIT(A) that the reasons were not supplied to the assessee-respondent, we do not find any fault in the impugned order. The appeal is concluded by the finding of facts and is dismissed accordingly.
Besides above,� we find that the authorities below had examined the merits of the case also and held that the addition made under Section 68 of the Act was not called for as the depositors were known being registered companies.
HIGH COURT OF JUDICATURE AT ALLAHABAD Having heard the learned counsel for the parties and in view of the finding recorded by the CIT(A) that the reasons were not supplied to the assessee-respondent, we do not find any fault in the impugned order. The appeal is concluded by the finding of facts and is dismissed accordingly.
Besides above,� we find that the authorities below had examined the merits of the case also and held that the addition made under Section 68 of the Act was not called for as the depositors were known being registered companies.
HIGH COURT OF JUDICATURE AT ALLAHABAD
INCOME TAX APPEAL No. - 28 of 2011:- M/S Shyam Cold Storage,The existence of a valid notice under Section 148 of the Act is a condition precedent, which has been complied with herein. The I.T.A.T. has set aside the reassessment order as in the reasons there is omission of the assessment year.
In our considered view, the aforesaid section is fully attracted on the facts of the case. The argument of the learned counsel for the respondent-assessee that merely participation of the assessee will not validate the reassessment proceeding if the notice is invalid, is of no help, in view of the fact that the question of validity of notice under Section 147 of the Act is not in issue. The only defect which could be pointed out is that the assessment year was not mentioned in the reasons recorded by the Assessing Officer. Unless it is shown that assessee was misled by not mentioning the assessment year in the reasons recorded, we are of the view that if the reasons recorded relate to a particular year, the reassessment proceeding initiated relate to that particular year and the assessee participated in the reassessment proceeding without raising any objection, such an objection cannot be raised by the assessee at a subsequent stage of the proceeding. In view of the above, the order of the Tribunal cannot be sustained. In the result the substantial questions of law as framed in the memo of appeal are decided in favour of the Department and against the assessee by holding that the reasons recorded by the Assessing Officer are not vitiated by not mentioning the assessment year therein. Since the Tribunal has not examined the case on merit, the matter is restored back to the Tribunal to examine the case on merits and decide the appeal accordingly.
INCOME TAX APPEAL No. - 28 of 2011:- M/S Shyam Cold Storage,The existence of a valid notice under Section 148 of the Act is a condition precedent, which has been complied with herein. The I.T.A.T. has set aside the reassessment order as in the reasons there is omission of the assessment year.
In our considered view, the aforesaid section is fully attracted on the facts of the case. The argument of the learned counsel for the respondent-assessee that merely participation of the assessee will not validate the reassessment proceeding if the notice is invalid, is of no help, in view of the fact that the question of validity of notice under Section 147 of the Act is not in issue. The only defect which could be pointed out is that the assessment year was not mentioned in the reasons recorded by the Assessing Officer. Unless it is shown that assessee was misled by not mentioning the assessment year in the reasons recorded, we are of the view that if the reasons recorded relate to a particular year, the reassessment proceeding initiated relate to that particular year and the assessee participated in the reassessment proceeding without raising any objection, such an objection cannot be raised by the assessee at a subsequent stage of the proceeding. In view of the above, the order of the Tribunal cannot be sustained. In the result the substantial questions of law as framed in the memo of appeal are decided in favour of the Department and against the assessee by holding that the reasons recorded by the Assessing Officer are not vitiated by not mentioning the assessment year therein. Since the Tribunal has not examined the case on merit, the matter is restored back to the Tribunal to examine the case on merits and decide the appeal accordingly.
VATIKA LANDBASE PVT LTD ITA 104/2013 IN THE HIGH COURT OF DELHI AT NEW DELHI This appeal by the revenue under Section 260A of the Income Tax
Act, 1961 is directed against the order dated 27.07.2012 passed by the
Income Tax Appellate Tribunal in ITA 1289/Del/2012 pertaining to the
assessment year 2003-04. The Assessing Officer has made an enhancement
of income of ` 29,12,448/- under Section 15 4 of the Income Tax Act, 1961
in the said assessment year. The Commissioner of Income Tax (Appeals)
had deleted the said enhancement. The revenue went up in appeal before
the Tribunal and the ground taken by the revenue was as under:-
?On the facts and in the circumstances of the case, the ld. CIT(A) has
erred in deleting the enhancement of income of ` 29,12,448/- made by the
AO by passing on order under section 154 of Income Tax Act, 1961 on the
ground that the assessee had failed to reconcile the claim of TDS and
income as per TDS certificates.? The Tribunal concurred with the views taken by the Commissioner of Income Tax (Appeals) in the following manner:- . The ld. Commissioner of Income Tax (A) finally observed
that the Assessing Officer failed to confront the assessee for rebuttal
and passed the order without even bringing to the notice of the assessee
as to which of the income was covered under tax deducted at source
certificate and which part of the income remained undisclosed.
Therefore, we hold that the findings of the ld. Commissioner of Income
Tax (A) are based on justified and reasonable grounds and we are unable
to see any infirmity or mistake in the impugned order.?
The findings are purely factual. No question of law, what to speak
of a substantial question of law, arises for our consideration. The
appeal is dismissed.
Act, 1961 is directed against the order dated 27.07.2012 passed by the
Income Tax Appellate Tribunal in ITA 1289/Del/2012 pertaining to the
assessment year 2003-04. The Assessing Officer has made an enhancement
of income of ` 29,12,448/- under Section 15 4 of the Income Tax Act, 1961
in the said assessment year. The Commissioner of Income Tax (Appeals)
had deleted the said enhancement. The revenue went up in appeal before
the Tribunal and the ground taken by the revenue was as under:-
?On the facts and in the circumstances of the case, the ld. CIT(A) has
erred in deleting the enhancement of income of ` 29,12,448/- made by the
AO by passing on order under section 154 of Income Tax Act, 1961 on the
ground that the assessee had failed to reconcile the claim of TDS and
income as per TDS certificates.? The Tribunal concurred with the views taken by the Commissioner of Income Tax (Appeals) in the following manner:- . The ld. Commissioner of Income Tax (A) finally observed
that the Assessing Officer failed to confront the assessee for rebuttal
and passed the order without even bringing to the notice of the assessee
as to which of the income was covered under tax deducted at source
certificate and which part of the income remained undisclosed.
Therefore, we hold that the findings of the ld. Commissioner of Income
Tax (A) are based on justified and reasonable grounds and we are unable
to see any infirmity or mistake in the impugned order.?
The findings are purely factual. No question of law, what to speak
of a substantial question of law, arises for our consideration. The
appeal is dismissed.
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 482 of 2012 JAY KISHORE CHATURVEDI Issue pertains to penalty imposed by the Assessing Officer confirmed by the CIT [A] under Section 271[1](c) of the Incometax
Act, 1961.
On further appeal, the Tribunal, however, deleted the penalty observing that
none of the authorities below have taken into consideration the explanation
furnished by the assessee. The Tribunal observed that the penalty proceedings
and the assessment proceedings are separate proceedings. The explanation of
the assessee had to be considered without which the penalty could not have
been imposed. On such basis, the penalty was deleted by the Tribunal When the assessee, as is apparent from the order of the Tribunal, during
the penalty proceedings, had offered explanation, surely the same had to be
considered. Penalty proceedings being quasijudicial
in nature, the assessee had
a right to offer explanation and without its consideration, no penalty could
have been levied. We find that the Tribunal has committed no error in allowing
the appeal of the assessee
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INCOME TAX APPEAL (LOD) NO.1889 OF 2012 Oman International
Bank 26TH FEBRUARY, 2013 So far as question (i) is concerned, the question as framed is misconceived. The question as framed is in respect of payment of interest by PE to GE when issue is interest earned by the PE from its head office. The Tribunal by the impugned order allowed the
respondent-assessee's claim for deduction on the ground that one
cannot earn income from oneself. In view of the above, we see no
reason to entertain the question (i) as framed (Whether on the facts and circumstances of the case and in law,
the Tribunal is correct in holding that the addition has been
wrongly made without appreciating the fact that the PE in India
has to be treated as separate entity and the interest payable by the said PE is to be taxed in India in the hands of GE as
income ?
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INCOME TAX APPEAL (LOD) NO.2117 OF 2012 M/s. Bennett Coleman & Co. Ltd. So far as question (i) is concerned, the respondentassessee
has claimed deduction of interest on tax free bonds of
Rs.5,60,11,644/-. During the course of the assessment proceedings,
the assessee was asked to give details of interest on tax free bonds.
While preparing the said details, it was noticed that 6% Government of
India Capital Index Bonds purchased during the year had inadvertently
been categorized as tax free bonds and, therefore, interest of
Rs.75,00,000/- earned on such bonds had also inadvertently escaped
tax. The assessing officer levied penalty under Section 271(1)(c) of
the Income Tax Act, 1961 (the Act). The CIT(A) upheld the order of
the Assessing Officer. On further appeal, the Tribunal in the impugned
order records a finding of fact that by inadvertent mistake interest @
6% on the Government of India Capital Index Bonds was shown as tax
free bonds. In view of the fact that the decision of the Tribunal is based on finding of fact that there was an
inadvertent mistake on the part of the assessee in including the interest
received of 6% on the Government of India Capital Index Bonds as
interest received on tax free bonds. It is not contended by the
Revenue that above finding of fact by the Tribunal is perverse. In
these circumstances, we see no reason to entertain the proposed
question (i). The assessing officer considered the said premium received on
redemption of debentures to be taxable under the head income from
other sources while the respondent-assessee considered the same to
be taxable under the head capital gains. In view of the fact that there
is only a change of head of income and in the absence of any facts that
the claim of the assessee was not bonafide, the Tribunal deleted the
penalty imposed under Section 271(1)(c) of the Act. The revenue has
not been able to point out that the finding of the Tribunal is perverse.
In these circumstances, we see no reason to entertain the proposed question (ii).
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INCOME TAX APPEAL NO.1969 OF 201 Mr. Riyaz A. Sheikh We find that by the impugned order, the Tribunal while holding that amounts received by a partner on his retirement from
partnership firm are exempt from capital gains tax relied upon the
decision of this Court in the matter of Prashant S. Joshi V/s. Income
Tax Officer & Anr. reported in [2010] 324 ITR 154 (Bom). Counsel for
the revenue is unable to point out as to how the decision in the matter
of Prashant S. Joshi (supra) inter alia holding that no capital gains are
payable by an erstwhile partner on amounts received on retirement
would not be applicable to the present case. The only submission on
behalf of the revenue is that there was an earlier decision of this Court
in the matter of N.A. Mody V/s. CIT reported in [1986] 162 ITR 420 and
it has not been considered in the decision rendered in the matter of Prashant S. Johsi (supra).
3. In the impugned order, the Tribunal does refer to the
decision of this Court in the matter of N.A. Mody (supra) and states that
it follows the decision of this Court in the matter of CIT V/s.
Tribhuvandas G. Patel reported in 115 ITR 95 and the same has been
reversed by the Apex Court in Tribhuvandas G. Patel V/s. CIT reported
in 263 ITR 515. This Court in the matter of Prashant S. Joshi (supra)
has also referred to the decision of Tribuvandas G. Patel (supr rendered by this Court and its reversal by the Apex Court. Moreover,
the decision of this Court in the case of Prashant S. Joshi (supra) placed reliance upon the decision of the Supreme Court in the case of
CIT V/s. R. Lingamallu Rajkumar reported in [2001] 247 ITR 801,
wherein it has been held that amounts received on retirement by a
parnter is not subject to capital gains tax. In the above circumstances,
we see no reason to entertain the proposed question of law.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INCOME TAX APPEAL (L) NO.1960 OF 2012 Karda Constructions Private Limited Tribunal by the impugned order upheld the finding of
fact recorded by the CIT(A) that receipt of Rs.71.67,000/- was part of
the sale consideration of the flats sold by the respondent assessee and the same has to be taxed in the year in which the assessee has
recorded the sale of flats. The objection of the revenue is that
amount of Rs.71.68,000/- found in cash has to be taxed in the year in
which cash was received by the respondent assessee and not in the
year the sale of the flats took place. The Tribunal records a fact that
there is no dispute that unrecorded entries of cash found with the
respondent assessee were in respect of sale of flats and forming part
of consideration for sale of flats. Further the names of the buyers of
the flats and the cash receipts from the buyers were also found
during the course of the search. In these circumstances, on the basis
of the finding of fact that cash receipts were undisputedly in respect of sale of flats and the same were offered to tax in the year in which
flats were sold that the appeal of the revenue before the Tribunal was
dismissed.
3) Since the decision of the Tribunal is essentially based on
a concurrent finding of fact, we see no reason to entertain the
proposed question of law.
IN THE PUNJAB & HARYANA HIGH COURT AT
CHANDIGARH
Date of Decision: 28.02.2013 Smt. Rani Tara Devi Learned counsel for the Revenue has vehemently argued
that in view of the findings recorded by the Tribunal in respect of the
previous year that the land is not agricultural land, therefore, in view
of the judgment of this Court in the assessee's own case for the
Assessment Year 2003-04, the taxability of event shall be the year of
receipt. Therefore, the orders passed by the Commissioner of Income
Tax (Appeals) and the Tribunal are not sustainable, as the question of law already decided in favour of the revenue.
On the other hand, Ms. Suri vehemently argued that the opinion of the Tribunal was not accepted by the Hon'ble Supreme Court, therefore, such opinion cannot be taken into consideration for returning a finding, whether the land acquired is an agricultural land or not. It is argued that the opinion of the Tribunal is based upon an
order passed by this court in Income Tax Appeal No.276 of 2004 titled "Commissioner of Income Tax, Chandigarh Vs. Smt. Anjana Sehgal" decided on 01.03.2011, wherein an erroneous finding was returned that prior to constitution of Municipality of Panchkula on 25.01.2001, there was a Notified Area Committee. Therefore, neither the judgment of this Court in Anjana Sehgal's case (supra) nor the opinion of the Tribunal are relevant to determine; whether the land is agricultural or not on the date of notification under Section 4 of the Land Acquisition Act, 1894. We have heard learned counsel for the parties at length on the question; as to whether land acquired is agricultural land or a capital asset within the meaning of Section 2(14) of the Act.
We find that the assessee is taking contradictory stand in the proceedings before this Court in the tax matter and in proceedings claiming enhancement of compensation. A perusal of the opinion of the Tribunal shows that identical affidavits were filed by both the assessee. A perusal of the affidavit dated 09.02.2012 filed by Smt. Rani Shakuntala Devi discloses that earlier there was a notification dated 26.06.1989 under Section 4 of the Land Acquisition Act by which part of the land owned by the assessee situated in Villages Bana Madanpur and Jhuriwala was acquired for which the Land Acquisition Collector announced Award No.5 dated 17.06.1992. Thereafter, around 184 acres of land was acquired in Village Jhuriwala and 30.47 acres of land was acquired in village Bana Madanpur in pursuance of notification dated 04.05.1995 for which Award No.6 dated 09.03.1998 was announced by the Land Acquisition Collector, the acquisition in question. With the above factual back ground, the argument of learned counsel for the assessee is required to be examined. It is argued that in terms of Section 2 (14) of the Income Tax Act, 1961, an
agricultural land is excluded from the capital asset, if it is not a land
situated in an area, which is comprised within the jurisdiction of
Municipality (whether known as Municipality, Municipal Corporation,
Notified Area Committee, Town Area Committee or "by other
name"). Sub Clause (b) of Section 2(14) of the Act contemplates
that Central Government may specify the distance of not more than 8
Km from the local limits of Municipality to be excluded from
agricultural land. It is in terms of the said provision; the Central
Government has published a notification dated 06.01.1994
contemplating that the area up to a distance of 5 Km from the
municipal limits of Panchkula in all directions shall not be an
agricultural land. Learned counsel for the assessee has vehemently argued that the Municipal Council Panchkula was constituted for the first time vide notification dated 25.01.2001 and there was no Municipality or Notified Area Committee constituted for Panchkula prior to the said date. The argument is that there was no Municipality of Panchkula in the year 1994, therefore, the said notification in respect of land within 5 Km of Panchkula Municipality is vague, ineffective and cannot be made basis for determining the nature of land in question. The notification constituted Municipal Council was published only on 25.01.2001, therefore, the notification of the Central Government cannot be taken into consideration for determining the nature of the land acquired vide notification issued in the year 1995. Therefore, the land acquired for development of Panchkula has been wrongly treated to be capital asset in Anjana Sehgal's case (supra) and that the said judgment does not lay down correct law for returning a finding that the land acquired is not a capital asset. Learned counsel for the assessee has referred to the judgments of Hon'ble Supreme Court in Commissioner of Wealth Tax, Andhra Pradesh Vs. Officer-in- Charge (Court of Wards), Paigah (1976) 105 ITR 133 and
Commissioner of Income Tax Vs. Gemini Pictures Circuit Private
Ltd. (1996) 220 ITR 43 as well as judgments of Bombay High Court
and Kerala High Court in Commissioner of Wealth-Tax, Poona Vs.
H.V. Mungale (1984) 145 ITR 208 and Commissioner of Income
Tax Vs. Murali Lodge (1992) 194 ITR 125 respectively. The expression 'Municipality' in Section 2(14) of the Act
is very wide. It is not restricted to a Municipality constituted under the
relevant Municipal Laws such as Haryana Municipal Act, but it would
include any other area known by any other name. Sub-clause (a) of
clause (iii) of Section 2 (14) deals with an area which falls within the
jurisdiction of a Municipality, whereas clause (b) enable the Central
Government to declare an area situated within 8 kms from the local
limits of any Municipality referred to in clause (a) to notify having
regard to extent and scope for urbanization of that area. The notification dated 06.01.1994 takes into its ambit an area within 5 kms
of the Municipality in the expression 'capital asset'. Therefore, the
urban area developed by the Authority forms part of a Municipality In view of the above discussion, we hold that the land,
subject matter of acquisition, is a capital asset falling within the scope
of clause (iii) of Section 2 (14) of the Act
__._,_.___
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