Bulletin No.A113 dated 23 October 2019

BULLETIN(Issue No.113)DT.23-10-2019

Compiled by Vinod Kumar Goel, Advocate



NOTIFICATION NO. SO 3266(E) [NO. 63/2019 (F.NO. 370142/11/2019-TPL)], DATED 12-9-2019

In exercise of the powers conferred by clause (v) of the Explanation to section 48 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following further amendments in the notification of the Government of India, Ministry of Finance (Department of Revenue), Central Board of Direct Taxes, published in the Official Gazette, vide number S.O. 2413(E), dated the 13th June, 2018, namely:—

2. In the said notification, in the Table, after serial number 18 and the entries relating thereto, the following serial number and entries, shall be inserted, namely:—

Sl. No.

Financial Year

Cost Inflation Index








3. This notification shall come into force with effect from the 1st day of April, 2020 and shall accordingly apply to the Assessment Year 2020-2021 and subsequent years.



Glaxo Smithkline Consumer Healthcare Ltd. Vs. Assistant Commissioner of Income-tax [2019] 107 taxmann.com 177 (Punjab & Haryana)

Section 43B of the Income-tax Act, 1961 - Business disallowance - Certain deductions to be allowed only on actual payment (Excise duty) - Assessment year 1997-98 - Whether advance deposit of central excise duty constitutes actual payment of duty within meaning of section 43B and, therefore, assessee would be entitled to benefit of deduction of said amount - Held, yes [Para 7][In favour of assessee]

C. Naveen Kumar Vs. Income-tax Officer, Ward-3 [2019] 108 taxmann.com 219 (Madras)

Section 159, read with sections 144 and 147, of the Income-tax Act, 1961 - Legal representatives (Liability of) - Whether liability of a legal representative under Act is limited to extent to which estate is capable of meeting said liability - Held, yes - Whether, therefore, where assessee did not inherit anything from his father and, moreover, he had nothing to do with his father's bank account, impugned assessment order passed under section 144, read with section 147, on ground that there were huge deposits in said account in relevant year prior to death of his father, was not sustainable and, thus, same deserved to be set aside - Held, yes [Paras 20 and 21] [In favour of assessee]

Bihar Police Building Construction Corporation (P.) Ltd. Vs. Principal Chief Commissioner of Income-tax, Patna [2019] 108 taxmann.com 48 (Patna)

Section 143 of the Income-tax Act, 1961 - Assessment (Notice u/s. 143(2)) - Assessment year 2004-05 - For relevant year, assessee filed its return on 30-9-2004 - It was undisputed that in financial year 2004-05 ending on 31-3-2005, six months period prescribed in proviso to section 143(2) would end on 30-9-2005 - However, Assessing Officer himself admitted that notice under section 143(2), read with section 142(1) was issued on 8-8-2006 - Whether in view of proviso to section 143(2), notice was issued after expiry of prescribed time period and, thus, same was clearly hit by limitation - Held, yes - Whether, therefore, entire proceedings including assessment order passed by Assessing Officer under section 143(3) deserved to be quashed - Held, yes [Paras 7 and 9] [In favour of assessee]

Principal Commissioner of Income-tax Vs. Haryana State Industrial and Infrastructure Development Corpn. Ltd. [2019] 108 taxmann.com 540(Punjab & Haryana)

Where Tribunal took a view that profit arising from sale of share was taxable as capital gain because said claim of assessee had never been disputed by revenue in earlier years and there was no change in circumstances in respect of impugned assessment year, since finding recorded by Tribunal was a finding of fact, no substantial question of law arose therefrom.

Harjeet Surajprakash Girotra Vs. Union Bank of India [2019] 108 taxmann.com 491(Bombay)

Section 282, read with section 148, of the Income-tax Act, 1961 and rule 127 of the Income-tax Rules, 1962 - Service of notice - General (Reassessment) - Assessment year 2011-12 - Assessee individual, a widowed lady being a housewife, had never filed return of income since she did not have any taxable income - Assessing Officer issued a reopening notice against assessee on grounds that during period relevant to assessment year in question, assessee had entered into various high value transactions such as cash deposits in bank account, purchase of mutual funds, sale and purchase of immovable properties, etc. but did not file her return of income - Said notice was despatched for delivery through post - It was returned by postal authority with a remark 'left' - Department took no further steps - On basis of such notice and postal despatch, Assessing Officer carried on assessment and made additions to income of assessee - Whether when delivery of notice could not be made at address of assessee available in PAN database, by virtue of proviso to sub-rule (2) of rule 127, communication had to be delivered at address of assessee as available with banking company - Held, yes - Whether since revenue failed to do so, even when department had access to assessee's bank account, service of notice was not complete, thus, impugned reassessment order making additions to income of assessee was unjustified - Held, yes [Para 18] [In favour of assessee]

Commissioner of Income-tax (Exemptions) Vs. Mahima Shiksha Samiti [2019] 108 taxmann.com 527(Rajasthan)

Section 13, read with section 11, of the Income-tax Act, 1961 - Charitable or religious trust - Denial of exemption - Assessment years 2010-11 and 2011-12 - Whether where assessee educational society made contribution to Jaipur National University (JNU) in accordance with its objectives of promotion of education, merely because certain trustees of assessee were also trustees in JNU, it could not be said that contribution was in contravention to section 13 and contribution would qualify as due application of income in hands of assessee-society - Held, yes [Paras 2 and 20] [In favour of assessee]

Commissioner of Income-tax (Exemptions) Vs. Mahima Shiksha Samiti [2019] 108 taxmann.com 527(Rajasthan)

Section 37(1), read with section 11 of the Income-tax Act, 1961 - Business expenditure - Allowability of (Foreign travel expenses) - Whether where assessee educational society incurred foreign travel expenses for putting in place a student exchange programme with schools based overseas, same were incurred for purpose of objects of trust and said expenses were to be allowed under section 37(1) - Held, yes [Paras 20 and 22] [In favour of assessee]

Principal Commissioner of Income-tax Vs. Gujarat Narmada Valley Fertilizer & Chemcals Ltd. [2019] 108 taxmann.com 541 (Gujarat)

Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of (replacement of parts and spares) - Assessment year 2009-10 - Assessee was engaged in manufacturing of fertilisers and various chemicals - In order to carry out manufacturing activities, various plants and equipment were in continuous operation in corrosive and acidic alomosphere - During relevant year, assessee claimed deduction of expenditure incurred on replacement of various components of machinery used in production - Assessing Officer taking a view that expenditure incurred was capital in nature, rejected assessee's claim - Commissioner (Appeals) found that expenditure claimed as revenue expenditure was in respect of components of machinery which could not be treated as independent machinery in itself as they were not capable of functioning independently - It was further noted that components required replacement due to normal wear and tear - He thus allowed assessee's claim for deduction under section 37(1) - Tribunal upheld order passed by Commissioner (Appeals) - Whether, on facts, no substantial question of law arose from Tribunal's order - Held, yes [Para 4] [In favour of assessee]

Commissioner of Income-tax, Madurai Vs. Sri Parameshwari Spinning Mills (P) Ltd. [2019] 108 taxmann.com 386 (Madras)

Section 40(a)(ia), read with section 194C, of the Income-tax Act, 1961 - Business disallowance - Interest, etc., paid to resident without deduction of tax at source (Form No. 26Q) - Assessment year 2012-13 - Whether where assessee made payments to contractor and had filed Form No. 26Q for claiming benefit under section 194C(6), though belatedly, there could be no disallowance under section 40(a)(ia) disentitling assessee to benefit under section 194C(6) - Held, yes [Paras 8 to 10] [In favour of assessee].

Principal Commissioner of Income-tax Vs. Jayant K. Furnishers [2019] 109 taxmann.com 52 (SC)

Section 69A, read with section 153C, of the Income-tax Act, 1961 - Unexplained money (Cash receipts) - Assessment year 2007-08 - Assessee, an interior designer, rendered services to 'S' - A search was conducted in premises of 'S' during of which certain documents were seized showing that some unaccounted cash payments were made to assessee - Accordingly, proceedings were initiated under section 153C and addition was made to assessee's taxable income - Tribunal finding that no unexplained payment was made in relevant assessment year, deleted addition made by Assessing Officer - High Court by impugned order held that since there was material on record pointing out that unexplained cash payments were made to assessee in earlier assessment year, impugned order passed by Tribunal that no addition could be made in assessment year in question, did not require any interference - Whether Special Leave Petition filed against impugned order was to be dismissed - Held, yes [Para 7] [In favour of assessee]