SEBI reconstitutes Takeover Panel; PM 'concerned' over domestic airlines' predatory pricing
SEBI reconstitutes Takeover Panel; PM 'concerned' over domestic airlines' predatory pricing
Future Group-Bharti Retail's Rs 750 crore deal gets CCI nod, to have 570 retail stores in 243 cities
AHMEDABAD, AUG 28, 2015: THE issue before the Bench is - Whether income from sale of property acquired in the past can be claimed as capital gain, when the assessee engaged in the business of development of housing project has continuously failed to record such acquisition in his books of account which is audited every year. NO is the verdict.
Facts of the case
The assessee is an individual. He filed his return for A.Y. 2007-2008 declaring total income at Rs.19,86,268/-. The case was selected for scrutiny by issuing notice u/s 143(2). In computation of total income, the assessee stated to have earned income from business, other sources, agricultural, and Capital Gain. The assessee declared Rs.12,12,220/- as net agricultural income. To substantiate the agricultural income, the assessee submitted the copy of the bills of M/s.Parshwa Trading Co. and M/s.Harsh Corporation. The assessee stated to have sold Drum Stick of Rs.97,500/-. The assessee also declared Long Term Capital Gain on sale of Revenue Survey and declared Rs.68,50,473/- as Long Term Capital Gain. The assessee declared Long Term Capital Gain at Rs.NIL after claiming deduction u/s 54EC. The A.O. did not accept the claim of the assessee with respect to agricultural income as well as Long Term Capital Gain with respect to income from land transactions. Thus, while finalizing the assessment, the A.O. held income from land transaction as business income and not Capital Gain, as claimed by the assessee and therefore made addition of Rs.1,42,97,628/- to the total income of the assessee, disallowing the Long Term Capital Gain being business income.
On appeal, the CIT(A) partly allowed the appeal and deleted the addition made by the AO with respect to the sale of Revenue Survey No.91 treating it as Capital Gain but confirmed the addition of Rs.32,55,053/- made by the A.O. on sale of property bearing Revenue Survey No.287 by treating the income derived from the sale of Revenue Survey No.287 as income from business. The Tribunal quashed and set aside the orders passed by the CIT(A) and restored the respective assessment orders and treated the income from sale of Revenue Survey Nos.91 and 287 as business income and confirmed the addition made by the AO.
Having heard the parties, the HC held that,
++ it is noted that the assessee has treated the income received on sale of Revenue Survey No.91 as capital gain. It was the case on behalf of the assessee that he along with others acquired the said land by way of Will executed by the original owner. The said land was acquired through Will more than 20 years back and therefore, on its sale, the income derived therefrom is to be treated as capital gain. On appreciation of evidence and the material on record, the tribunal has not accepted the case on behalf of the assessee. The Tribunal also noted that the assessee has claimed deduction u/s 80IB for the development of Housing Project, meaning thereby he was engaged in the business of development of Housing Project in the year under consideration. The tribunal while confirming the findings recorded by the AO that profit from sale of land bearing Survey No.91 as business income, observed that the land was received by him more than 20 years back, but it is also a fact that the aforeasid land was not disclosed in the balance-sheet of the assessee after its acquisition. When the assessee is maintaining the Books of Accounts and had got the same audited, no valid justification has been offered for not showing the land acquired through inheritance from the F.Y 1997-98 onwards in the balance-sheet;
++ this court is in complete agreement with the view taken by the Tribunal holding the income from sale of land bearing Survey No.91 as business income and not as capital gain as claimed by the assessee. Further, cogent reasons have been assigned by the Tribunal in holding the income derived from sale of land bearing Survey No.91 as business income. With respect to land bearing Revenue Survey Nos.287 and 485 is concerned, at the outset it is required to be noted that the aforesaid parcels of land were held as "Stock-in-trade" by M/s.Satyanarayan Traders and even the same were also shown in the Balance-sheet of M/s.Satyanarayan Traders. It is a fact that the said parcels of land were not recorded in the individual balance-sheet of the assessee. It was assessee's case that due to mistake in maintaining accounts, the same were not mentioned in his balance-sheet. However, as rightly observed by the CIT(A) as well as the Tribunal, the assessee did not demonstrate as to how the said mistake continued for so many years, more so when accounts of the firm and the assessee were audited year after year. Therefore, this court is in complete agreement with the view taken by the tribunal as well as CIT(A).
Upholds Company Court order confirming 'highest bidder', rejects subsequent increase in property-value
SC sets-aside Gujarat HC Division Bench order that recalled Company Court order whereby highest bidder (appellant) was confirmed to purchase freehold land of co. under winding-up; Rejects respondent's contention that Company Court only 'accepted highest bid' but did not 'confirm the sale' and that Court can decline such confirmation taking in account subsequent developments, opines that "mere absence of the expression 'that the sale is confirmed' in order is not determinative of the question", considers the 'totality of the circumstances'; Notes that though freehold land became more valuable as Govt. increased Floor Space Index (FSI), however opines that "it is not a relevant consideration in determining the legality of the Company Court order…. allowing such recall would rob the sales conducted by the Courts of all sanctity"; Further observes that highest bid was accepted by the Company Court, wherein all stake-holders of the company in liquidation were heard and no person (including respondent) ever objected about any fraud / irregularity in the sale or price offered; Rejects respondent's contention about subsequent change in appellant company's share-holding pattern which would change successful bidder's nomination, holds that there was no such ground raised earlier to recall the order, holds that"respondent kept on adding new grounds from stage to stage for attacking the company court order" :SC
ITR'S TRIBUNAL TAX REPORTS (ITR (Trib)) HIGHLIGHTS
F Where services not involving human interface, payments not fees for technical services as envisaged u/s. 194J, not liable for tax deduction at source : iGate Computer Systems Ltd. v. Deputy CIT (TDS) (Pune) p. 50
F Where undertaking approved as research and development company from Department of Scientific and Industrial Research, entitled to deduction u/s. 80-IB(8A) of 1961 Act : Deputy CIT v. B. A. Research India Ltd. (Ahd) p. 149 (31-7-2015)
F Liability to pay tax by way of advance tax in case of capital gains arises only after transaction takes place, Assessing Officer to recompute interest : Gautam Vinod Daftary v. Deputy CIT (Mumbai) p. 170 (29-7-2015)
F Where an assessee not a co-operative bank under Banking Regulation Act, 1949, but a co-operative society, entitled to deduction u/s. 80P(2)(a)(i) of 1961 Act : Sikar Sahakari Bhoomi Vikas Bank Ltd. v. ITO (Jaipur) p. 176 (17-7-2015)
F Nature of head office expenses must fall within illustration given in Explanation (iv) to section 44C : Lloyd's Register Asia (India Branch Office) v. Asst. CIT (OSD) (Mumbai) p. 186 (10-6-2015)
F Special deduction : Where co-operative bank failed to show source of dividends, matter remanded for fresh adjudication : Bundi Central Co-operative Bank Ltd. v. Asst. CIT (Jaipur) p. 199 (5-6-2015)
F Where assessee providing credit period of sixty days to all associated enterprises and additional credit period beyond sixty days without charging interest, LIBOR based interest rate to be taken as arm's length interest : Asst. CIT v. Information Systems Resource Centre P. Ltd. (Mumbai) p. 203
F Where no privity of contract between assessee and truck owners on hiring vehicles on commission basis for transport contract, no liability to deduct tax at source : Abdul Samad v. Asst. CIT (Agra) p. 214 (24-7-2015)
F Charitable purpose : Merely because assessee generating surplus during course of carrying on ancillary objects cannot alter character of its main objects, assessee entitled to exemption u/s. 11 : Institute for Development and Research in Banking Technology v. Asst. DIT (Exemption) (Hyd) p. 219 (30-6-2015)
F Income of assessee to be computed on commercial principles, pre-operative expenses allowable as deduction : Institute for Development and Research in Banking Technology v. Asst. DIT (Exemption) (Hyd) p. 219
F Provision for taxation allowable only in year in which actual payment made : Institute for Development and research in Banking Technology v. Asst. DIT (Exemption) (Hyd) p. 219
F Depreciation allowable as application of income to charitable purposes : Institute for Development and Research in Banking Technology v. Asst. DIT (Exemption) (Hyd) p. 219
F Penalty to be imposed on assessee concealing income and furnishing inaccurate particulars of income : ITO v. Bhansali Trading Corporation (Jaipur) p. 254 (5-6-2015)
F Carried forward loss of earlier assessment year cannot be rectified in present assessment year : Asst. CIT v. Asian Entertainments (Hyd) p. 262 (26-6-2015)
F Where provision for wages pending finalisation, liability accruing from effective date of commencement not contingent liability, provision to be allowed as deduction : Gail India Ltd. v. CIT (Delhi) p. 265
F Where excess stock found at time of search taken into account for arriving at income of assessee, not a case of concealment of income : Asst. CIT v. Ram Thanga Nagai Maligai (Chennai) p. 275 (10-6-2015)
F No penalty can be imposed on debatable issue : Asst. CIT v. Moradabad Toll Road Co. Ltd. (Delhi) p. 280 (2-6-2015)
F Expenses excluded from export turnover to be excluded from total turnover too : Asst. CIT v. Severn Glocon (India) P. Ltd. (Chennai) p. 285 (19-6-2015)
F Export oriented undertaking : Approval of Board constituted under IDRA, 1951 necessary regarding exemption : Asst. CIT v. Severn Glocon (India) P. Ltd. (Chennai) p. 285
F Telephone charges, communication expenses, freight outward and commission expenses excluded from export turnover to be excluded from total turnover too : Asst. CIT v. Severn Glocon (India) P. Ltd. (Chennai) p. 285
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CCI: Dismisses complaint against DLF imposing one-sided conditions in buyers' agreement, absent dominance
CCI rejects Delhi based buyers' complaint against M/s DLF Universal Limited and M/s DLF Home Developers Limited ('DLF'), alleging DLF's anti-competitive/ unfair practices & abuse of dominance;Notes informant\'s allegation that DLF had imposed one sided/ unfair conditions in buyers' agreement, made false representations regarding delivery schedule, concealed information relating to requisite approvals/ sanctions etc; Delineates relevant market as 'market of provision of services relating to development and sale of residential apartment in Delhi'; Observes that in Delhi, DLF is just one of the real estate developers engaged in the provision of services relating to development and sale of residential apartment; Notes the presence of other players like Delhi Development Authority, Ansal API, Umang Realtech etc that pose competitive constraints to DLF in relevant market; Thus, holds DLF not dominant in relevant market :CCI
CCI: AICTE approving a subscription agent doesn't make it dominant, rejects complaint
CCI dismisses 'abuse of dominance' complaint against Global Information Systems Technology Pvt. Ltd ('opposite party'), India's leading subscription agent; Informant alleged that All India Council for Technical Education (AICTE) mandated subscription of e-journals available with opposite party by technical educational institutions which made opposite party dominant and abusing its dominance, it charged exorbitant prices for such journals; To examine opposite party's dominant position, CCI delineates relevant market as "the market of services for providing subscription of e-journals to technical institutions as prescribed by AICTE in India"; As per the information available in public domain, observes that there are other players like Allied Publishers Pvt. Limited, Balani Infotech., Informatics Limited etc. in relevant market which provide same product i.e. subscription of e-journals. Further, notes that technical educational institutions also have option of subscribing directly from website of e-journals as prescribed by AICTE; Thus, holds that opposite party not in dominant position in relevant market :CCI
CCI: Rejects complaint against sanitary-ware manufacturer, absent dominance in presence of other market-players
CCI rejects informant's (Jaipur based trader in sanitary ware & bathroom fittings) complaint against sanitary ware manufacturer - Jaquar & Co. P. Ltd (spelt as Jaguar by informant, Opposite Party, 'OP') alleging abuse of dominance; Notes informant's allegation that OP refused to appoint him as its dealer in Jaipur & also instructed other dealers in Jaipur to stop supply to informant; Delineates relevant product market as "market for branded sanitary-ware and bathroom fitting" and defines geographical market as whole of India, as prices of branded sanitary-ware and bathroom fittings do not vary from one place to another;Notes sales revenue and value of consolidated assets of major manufacturers in relevant market, observes that OP is a leading player in terms of sales revenue only, but not in terms of value of assets, thus, could not be said to be dominant; Further notes that there are many players in relevant market indicating that consumers have a wide variety of options, thus holds that OP neither has a position of strength, which gives it power to act / operate independently of its competitors nor has the ability to affect its competitors / consumers in relevant market and has no position of dominance:CCI
CCI approves acquisition of TE Connectivity's broadband network solutions business by CommScope
CCI approves proposed combination relating to acquisition of Broadband Network Solutions ('BNS') business by CommScope from TE Connectivity Ltd. ('TE'), which relates to designing, manufacturing of fibre, and wireless infrastructure components, cabling and systems for telecommunications & enterprise customers; Notes that there are no overlaps in parties' activities in India, as CommScope does not currently sell any broadband products in India; Further notes that CommScope is engaged in segments of SCS and other enterprise products such as Data Centres on Demand & Data Centre Infrastructure Management, whereas TE is engaged in SCS segment only; Observes that despite parties' high combined market shares, individual components used in provisioning of SCS, the combination is not likely to cause an appreciable adverse effect on competition due to other factors relevant to competition such as standardized nature of product, presence of other competitors, countervailing buyer power with distributors/channel partners and end users, and competitive constraints from imports:CCI
GOODS AND SERVICE TAX REPORTS (GSTR) HIGHLIGHTS
F "Close-up Whitening" not toothpaste and classifiable under sub-heading 3306 90 : CCE v. Global Health Care Products p. 1
F sub-classification of similarly situated beneficiaries under exemption notification not permissible : Union of India v. N. S. Rathnam and Sons p. 38
F Promotors holding 50:50 equity shares in assessee and exclusive buyer of goods produced by assessee not related person : CCE v. Goodyear South Asia Tyres P. Ltd. p. 57
F No arrangement to depress price between holding and subsidiary companies price of holding company cannot be adopted as assessable value : CCE v. Goodyear South Asia Tyres P. Ltd. p. 57
F Finding of clandestine removal based on statements made by two persons wrongly construed as admissions set aside : Maan Aluminium Ltd. v. CCE p. 65
F Process of assembling of components resulting in product known as water purification and filtration system amounts to manufacture : Poonam Spark P. Ltd. v. CCE p. 79
F Service provider awarding contract for supply of goods and laying pipelines entitled to Cenvat credit of service tax paid by contractor : GSPL India Transco Ltd., In re p. 30
F Carrier of currency belonging to third person for monetary consideration not entitled to benefit of section 125 : Ram Kumar v. Commissioner of Customs (Delhi) p. 11
F Merchant overtime tax not payable when stuffing done in factory of assessee under supervision of jurisdictional Central Range Officers during working hours : CCE v. Rajasthan Textile Mills (Raj) p. 18
F Order directing deposit of 50 per cent. of duty set aside and assessee directed to deposit lesser amount : Simplex Electronics P. Ltd. v. Commissioner of Customs, Central Excise and Service Tax (Uttarakhand) p. 74
F Where duty paid on goods not attracting duty, refund cannot be denied on ground that assessment of bill of entry not challenged : Oil and Natural Gas Corporation Ltd. v. Commissioner of Customs (Trib.-Mum) P. 21
F Notifications :
Additional Duties of Excise (Goods of Special Importance) Act, 1957 : Notification under section 3(3) : Exemption to specified goods of First Schedule : Amendments p. 13
Central Excise Act, 1944 : Notification under section 5A(1) : Concessional rate of duty on specified goods : Amendment p. 11
Exemption to goods falling under First Schedule : Amendment p. 10
Exemption to goods required for National AIDS Control Programme funded by GFATM p. 12
Notification under section 5A(1) and (2A) : Concessional rate of duty on specified goods : Amendments p. 14
Exemption to specified goods of First Schedule : Amendments p. 13, 14
Notification under section 37 : Cenvat Credit (Second Amendment) Rules, 2015 : Corrigendum p. 10
Conditions, safeguards and procedures for digitally signed invoices p. 16
Central Excise Rules, 2002 : Notification under rule 9(2) : Exemption to manufacture of aluminium roofing panel of First Schedule p. 16
Notification under rules 10(5) and 11(9) : Conditions, safeguards and procedures for digitally signed invoices p. 16
Customs Act, 1962 : Notification under section 14(2) : Rates of basic duty on specified goods : Amendments p. 3, 5, 6
Notification under section 25(1) : Effective rates of basic duties for specified goods : Amendments p. 3
Exemption for cut and polished diamonds imported by specified agencies in Foreign Trade Policy p. 1
Customs Tariff Act, 1975 : Notification under section 9A(1) and (5) : Anti-dumping duty on import of phenol from South Africa p. 8
Finance Act, 1994 : Notification under section 94(1) and (2) : Conditions, safeguards and procedures for digitally signed invoices p. 16
Finance Act, 2005 : Notification under section 85(3) : Exemption to goods falling under First Schedule : Amendment p. 10
Service Tax Rules, 1994 : Notification under rules 4C(2) and 5(5) : Conditions, safeguards and procedures for digitally signed invoices p. 16
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