AO erred in disallowing relief on pretext of siphoning off funds without identifying the actual facts
IT : Where Assessing Officer rejected assessee's application under section 10(22) on ground that it had made payment to 'C' with an intention to siphon away its funds, in view of fact that Assessing Officer neither called upon assessee to produce 'C' nor did he examine as to how said amount was adjusted by 'C' in her return of income, impugned order was to be set aside and, matter was to be remanded back for disposal afresh
June 18th, 2014
 |
S. 263: The CIT can revise an assessment only if he can show unmistakably that the order of the AO is unsustainable. Fact that the AO has passed a non-speaking order does not mean that he has not applied his mind
The High Court had to consider the extent of jurisdiction of the CIT to revise an assessment u/s 263 of the Act. HELD by the High Court:
(i) If the AO has taken a possible view, it cannot be said that the view taken by him is erroneous nor the order of the AO in that case can be set aside in revision. It has to be shown unmistakably that the order of the AO is unsustainable. Anything short of that would not clothe the CIT with jurisdiction to exercise power u/s 263 of the Act.
(ii) Whether the assessment order was passed without application of mind is basically a question of fact. The records of the assessment including the order sheets go to show that appropriate enquiry was made and the assessee was heard from time to time. In deciding the question Court has to bear in mind the presumption in law laid down in Section 114 Clause – e of the Evidence Act "that judicial and official acts have been regularly performed;" Therefore, the Court has to start with the presumption that the assessment order was regularly passed. There is evidence to show that the AO had required the assessee to answer 17 questions and to file documents in regard thereto. It is difficult to proceed on the basis that the 17 questions raised by him did not require application of mind. When the AO was satisfied that the return, filed by the assessee, was in accordance with law, he was under no obligation to justify as to why he was satisfied. On the top of that the AO did not adversely affect any right of the assessee nor was any civil right of the assessee prejudiced. He was as such under no obligation in law to give reasons. If the AO cannot be shown to have violated any form prescribed for writing an assessment order, it would not be correct to hold that he acted illegally or without applying his mind.
June 18th, 2014
|
S. 40(a)(ia): If an amount is made taxable by a retrospective amendment, the payer cannot be held liable to deduct TDS on a payment made earlier and to suffer disallowance u/s 40(a)(ia)
The assessee paid an amount of Rs.163.30 lakhs as "Pay Channel charges" to satellite channel companies on which TDS was not deducted. The AO held that the said payment constituted "royalty" and that the assessee ought to have deducted TDS u/s 195. As the assessee had failed to do so, the expenditure was disallowed u/s 40(a)(ia). Before the Tribunal, the Department argued that though the said charges did not constitute "royalty", and the assessee was not obliged to deduct TDS, as per the law laid down in Asia Satellite 332 ITR 340 (Del), the same was not good law in view of the retrospective insertion of Explanation 6 to s. 9(1)(vi) which treats payment for transmission by satellite as "royalty" defines the expression "process". It was argued by the department that the effect of the retrospective amendment is that the assessee ought to have deducted TDS and that as it had failed to do so, the expenditure had to be disallowed. HELD by the Tribunal:
In view of the retrospective insertion of Explanation 6 by the Finance Act, 2012, the payment made by the assessee as "Pay Channel Charges" constitutes "royalty" as defined in clause (i) of Explanation 2 to s. 9(1) of the Act. However, as the decision of the assessee not to deduct TDS was supported by Asia Sat, the assessee cannot be held to be liable to deduct tax at source by relying on the subsequent amendments made in the Act with retrospective effect (Channel Guide 139 ITD 49 (Mum), Sonata Information Technology & Infotech Enterprises followed)
INCOME TAX REPORTS (ITR) HIGHLIGHTS
F Transactions in derivatives : Loss cannot be set off against business income : CIT v. DLF Commercial Developers Ltd. (Delhi) p. 508
F Appeal from Commissioner (Appeals) dismissed as not maintainable : Tribunal not justified in allowing rectification application and directing Commissioner (Appeals) to pass fresh order : CIT v. Parmar Kanubhai Somabhai (Guj) p. 517
F Book profits much higher than income computed under normal provisions : Question of furnishing inaccurate particulars does not result into evasion of tax : CIT v. Aleo Manali Hydro Power P. Ltd. (All) p. 524
F Sections 115JA and 115JAA not violative of article 14 : Provision for alternate method of computing income valid : Ester Industries Ltd. v. Union of India (Delhi) p. 528
F Expenditure on distribution of free samples deductible : CIT v. Bazaar Decor (India) P. Ltd. (P&H) p. 389
F Charitable purpose : Donation disclosed as income not to be added as cash credits : CIT v. Uttaranchal Welfare Society (All) p. 398
F Revenue accepting that liability to sundry creditors paid in subsequent years : Section 41(1) not applicable in relevant assessment year : CIT v. Speedways Tyre Ltd. (22-4-14) (P&H) p. 401
F AO making fresh assessment and directing refund but omitting to grant interest : Appeal against such order maintainable : CIT v. Biswanath Pasari (29-1-2014) (Cal) p. 404
F Application for settlement of cases after time limit for issue of notice under section 143(2) had elapsed but before completion of assessment valid : CIT v. ITSC (Bom) p. 410
F Subsequent search and seizure operation conducted in premises of third person showing assessee suppressed material before Settlement Commission : Revenue to approach Settlement Commission for declaration that its previous order was a nullity : Omaxe Ltd. v. Deputy CIT (15-4-14) (Delhi) p. 423
F Settlement Commission finding assessee accounted for full value of one third share in property : No perverse finding : CIT v. Vineeta Gupta (6-5-14) (Delhi) p. 440
F Settlement Commission interpreting receipt as principal of loans taken by assessee : High Court cannot substitute its view in place of that of Settlement Commission : CIT v. Gopal Gupta (16-5-14) (Delhi) p. 446
F Authority restrained from enforcing demand during pendency of appeal : Showa Corporation v. Deputy DIT (International Taxation) 30-4-14) (Delhi) p. 460
F Expenditure on replacing entire flooring of office and factory premises with marble flooring : Expenditure of capital nature : Surinder Madan v. Asst. CIT (Delhi) p. 461
F Registration denied on ground intention of trust to benefit particular religious minority justified : Tellicherry Minority Welfare Trust v. CIT (7-2-2014) (Ker) p. 472
F Supply of water from partially constructed dam : Business had been set up in year when water was supplied : CIT v. Sardar Sarovar Narmada Nigam Ltd. (Guj) p. 477
F Mixed questions of law and fact : Constitution of Special Bench to consider question valid : CIT v. Sardar Sarovar Narmada Nigam Ltd. (Guj) p. 477
F Assessee converting and transferring shares under investment : Shares sold two years after conversion : Assessee entitled to exemption : CIT v. Express Securities P. Ltd. (Delhi) p. 488
F Block assessment becoming time barred : Power of jurisdiction of Settlement Commission to pass final order not affected : Ashwani Kumar Goel v. ITSC (10-2-14) (Delhi) p. 492
F Provision for warranty liability deductible : CIT v. Hewlett Packard India Sales P. Ltd. (3-3-14) (Karn) p. 499
F High Court remanding matter to Tribunal to consider question as to whether "reasons to believe" based upon mere change of opinion : Non application of mind to directions : Matter remitted to Tribunal : Central Warehousing Corporation v. CIT (22-1-14) (Delhi) p. 503
F Surpluses generated for purposes of modernising activities and building of necessary infrastructure to serve object of assessee : Assessee entitled to exemption : Council for the Indian School Certificate Examinations v. Director General of Income-tax (23-5-14) (Delhi) p. 508
F Tax Recovery Officer has no power to declare sale deed void : Dr. Manoj Kabra v. ITO (22-5-14) (All) p. 541
F MAT credit must be given before charging interest under sections 234B and 234C : CIT v. B. P. L. Ltd. (10-2-14) (Karn) p. 544
F C. B. D. T. Criculars :
Circular No. 9 of 2014, dated 23rd April, 2014-Clarification regarding treatment of expenditure incurred for development of roads/highways in BOT agreements under Income-tax Act, 1961-regarding . . . 1
Circular No. 10 of 2014, dated 6th May, 2014-Eligibility of deduction under section 80-IA for the unexpired period-reg. . . . 15
F Rules :
Income-tax (Fifth Amendment) Rules, 2014 . . . 3
F Notifications :
F Income-tax Act, 1961 :
Notification under section 10(48) :
Exemption to foreign company on account of sale of crude oil subject to conditions . . . 14
F Does section 44AB apply to a partner's remuneration ?-Hiten Kishore Chande, Chartered Accountant . . . 1
F Retirement of partner-Liability to capital gains in the hands of firm and partner-Pankaj R. Toprani, Advocate . . . 4
F Tax liability in case of a mutual concern-Pankaj R. Toprani, Advocate . . . 9
F Taxability on sale of agricultural land-Pankaj R. Toprani, Advocate . . . 15
| COMPANY LAW INSTITUTE OF INDIA PVT. LTD. No. 2, Vaithyaram Street, T.Nagar, Chennai - 600017. Phone: (044) 24350752 - 55 Fax: (044) 24322015 info@cliofindia.com |
ITR'S TRIBUNAL TAX REPORTS (ITR (Trib)) HIGHLIGHTS
F Loss in course of acquisition of capital asset is capital loss not allowable for deduction : Apollo Tyres Ltd. v. Dy. CIT (Cochin) p. 722
F Advances fro manufacture not recoverable and written off, deductible as business loss : Apollo Tyres Ltd. v. Dy. CIT (Cochin) p. 722
F Export : Any sum reduced from export turnover has to be reduced from total turnover : Asst. CIT v. Chettinad Logistics P. Ltd. (Chennai) p. 309 (9-5-2014)
F Penalty : Where explanation of assessee not found to be false, not a case of concealment of income or furnishing of inaccurate particulars : Bella Premier Happy Hygiene Care P. Ltd. v. Asst. CIT (Chennai) p. 312 (23-5-2014)
F Business expenditure: Where no material to prove fictitious nature of rent document, entire expenses not disallowable : Amrut Textiles v. ITO (Ahd) p. 320 (16-5-2014)
F Business expenditure : Disallowance : Non-resident : Commission : Where limit provided under RBI guidelines for remittance of commission not relevant for determination of allowability of expenditure, circular 786 of 2000 applicable, assessee not liable to deduct TDS : Asst. CIT v. Rapid Pack Engg. P. Ltd. (Mumbai) p. 329 (23-5-2014)
F Where expenses incurred on rent, electricity and advertisement and publicity not exceeding limit prescribed u/s. 194-I, not liable to deduct TDS and disallowance not permissible u/s. 40(a)(ia) : Dutta Automobiles v. Dy. CIT (Kolkata) p. 336 (30-4-2014)
F Where assessee making complete disclosure in balance-sheet and no concealment of income, penalty cannot be imposed : Jubilant Biosys Ltd. v. ITO (Delhi) p. 343 (19-5-2014)
F Assessee obtaining registration and recognition from various Government Departments for setting up export-oriented unit for manufacture of honey and beeswax, eligible for deduction : Little Bee Impex v. Dy. CIT (Chandigarh) p. 352
F Business expenditure : Short deduction of tax not ground for disallowance u/s. 40(a)(ia) : Three Star Granites P. Ltd. v. Asst. CIT (Cochin) p. 398 (25-4-2014)
F Business expenditure : Bad debt : Where advances becoming irrecoverable and actually written off allowable : Bausch and Lomb Eyecare (India) P. Ltd. v. Addl. CIT (Delhi) p. 404 (23-5-2014)
F CSR expenditure, an application of income ? - Hiten Chande, Chartered accountant p. 33
| COMPANY LAW INSTITUTE OF INDIA PVT. LTD. No. 2, Vaithyaram Street, T.Nagar, Chennai - 600017. Phone: (044) 24350752 - 55 Fax: (044) 24322015 info@cliofindia.com |
On Wednesday, 18 June 2014 9:17 AM, "info@cliofindia.com" <info@cliofindia.com> wrote:
www.cliofindia.com info@cliofindia.com
GOODS AND SERVICE TAX REPORTS (GSTR) HIGHLIGHTS
F Words "take notice" in section 49(3) of 1999 Act referable to prima facie opinion formed before issuance of first notice : Rajesh Shantilal Adani v. Special Director, Enforcement Directorate (Guj) p. 536
F Decision of Customs authority in matter of classification and valuation final vis-a-vis Foreign Exchange authorities : Rajesh Shantilal Adani v. Special Director, Enforcement Directorate (Guj) p. 536
F Conflicting opinions regarding nature of imported goods and their price, cross-examination of witness to be permitted : Rajesh Shantilal Adani v. Special Director, Enforcement Directorate (Guj) p. 536
F Parties to whom show-cause notice issued must be made aware of allegations against them : Rajesh Shantilal Adani v. Special Director, Enforcement Directorate (Guj) p. 536
F Joint Director of Directorate of Revenue Intelligence assigned functions of proper officer under sections 17 and 28 and show-cause notice issued by him, proper : Swati Menthol and Allied Chemicals Ltd. v. Joint Director, Directorate of Revenue Intelligence (Kan) p. 625
F Duty entitlement passbook licences obtained fraudulently by exporter by overvaluing goods exported and exporter and its associates directed to make pre-deposit ; conflicting views expressed on issue of voidability of such licences, transferees of such licences granted unconditional stay and waiver from pre-deposit : Sumit Wool Processors v. Commissioner of Customs (Trib.-Mum) p. 587
F Where freight and insurance charged separately under debit notes and goods removed at factory gate, freight and insurance charges not includible in assessable value of goods : Shreyans Industries Ltd. v. Commissioner of Central Excise (Trib.-Delhi) p. 531
F Notifications :
Customs Tariff Act, 1975 : Notification under section 9A(1) and (5) : Anti-dumping duty on import of cast aluminium alloy wheels or alloy road wheels used in motor vehicles from China, Korea RP and Thailand p. 163
To Unsubscribe : Reply back with "Unsubscribe" in subject followed by the key word "ITR" or "CC" or "VST" or "CCD" or "GSTR" or "ITR (Trib)", respectively or "All" if you do not want any Email. ITR : Income Tax Reports, CC : Company Cases, VST : VAT and Service Tax Cases, CCD : Consolidated Commercial Digest, GSTR : Goods and Service Tax Reports, ITR (Trib) : ITR'S Tribunal Tax Reports. Also send your feedback or comments to info@cliofindia.com
COMPANY LAW INSTITUTE OF INDIA PVT. LTD.
No. 2, Vaithyaram Street,
T.Nagar, Chennai - 600017.
Phone: (044) 24350752 - 55
Fax: (044) 24322015
info@cliofindia.com
__._,_.___
No comments:
Post a Comment