Bulletin No.A116 dated 27 May 2020

BULLETIN(Issue No.116)DT.27-05-2020

Compiled by Vinod Kumar Goel, Advocate


Smt. Alka Jain Vs. Assistant Commissioner of Income-tax, [2020] 116 taxmann.com 413 (Delhi-Trib.)

INCOME TAX: The word "assessable " inserted in section 50C with effect from 01-10-2009, is prospective in nature and, thus, where assessee sold her immovable property by way of agreement to sell dated 01-04-2009, provisions of section 50C were not applicable and, in such circumstances, deemed sale consideration as per stamp valuation authorities could not be invoked for determining long term capital gain arising from sale of said property

Vodafone Idea Ltd. Vs. Assistant Commissioner of Income, [2020] 116 taxmann.com 393 (SC)

INCOME TAX: In respect of assessment years ending on 31-3-2017 or before, if a notice was issued in conformity with requirements stated in section 143(2), it would not be necessary to process refund under section 143(1); insofar as returns filed in respect of assessment years commencing on or after 1-4-2017, a different regime has been contemplated by Parliament and section 241-A requires a separate recording of satisfaction on part of Assessing Officer that grant of refund is likely to adversely affect revenue, whereafter, with previous approval of Principal Commissioner or Commissioner and for reasons to be recorded.

Alankar Saphire Developers Vs. Deputy Commissioner of Income, [2020] 116 taxmann.com 389 (Delhi - Trib.)

INCOME TAX : Where assessee had already filed original return of income accompanied with Profit and Loss Account, Balance Sheet and such assessment had completed prior to date of search and no assessment was abated, as no new/incriminating material was unearthed during course of search, no addition could be made u/s 153A

Basir Ahmed Sisodia Vs. Income Tax Officer, [2020] 116 taxmann.com 375 (SC)

INCOME TAX: Where Assessing Officer during assessment for assessment year 1998-99 made additions of Rs. 2.26 lakhs to income of assessee treating said amount as cash credits under section 68 as said credits were shown in name of 15 persons and no proof/evidence had been produced by assessee with respect to income of creditors and source of income, however, factual basis on which Assessing Officer formed his opinion in assessment order in regard to addition of Rs. 2.26 lakhs stood dispelled by affidavits and statements of concerned unregistered dealers in penalty proceedings and appellate authority had not only accepted explanation offered by appellant/assessee but also recorded a clear finding of fact that there was no concealment of income or furnishing of any in accurate particulars of income by appellant/assessee. Thus, addition of Rs. 2.26 lakhs made by Assessing Officer under section 68, towards cash credit amount shown against names of concerned unregistered.

Yum Restaurants (Marketing) (P.) Ltd. Vs. Commissioner of Income Tax, [2020] 116 taxmann.com 374 (SC)

INCOME TAX: Where assessee was incorporated with approval of Secretariat for Industrial Assistance for purpose of economisation of cost of advertising and promotion of member companies, to be operated on a non-profit basis on principles of mutuality but it accepted contributions both from members and non-members and one member was vested with powers to control functioning and interests of other members, such an assimilation could not be termed as a social intercourse devoid of commerciality; assessee, being not a mutual concern, could not be entitled to tax exemption

Kesharwani Sheetalaya Sahsaon Vs. Commissioner of Income-tax, [2020] 116 taxmann.com 382 (Allahabad)

INCOME TAX: Where partners of assessee-firm were all identifiable and separately assessed to tax and they had shown sufficient agricultural income in their personal returns of past years which had been accepted by department as such, source of investment by those partners in assessee firm having been explained, no addition could be made in hands of firm.

Niyasha Barman Vs. Income Tax Officer [2020] 116 taxmann.com 371 (Calcutta)

Section 220 of the Income-tax Act, 1961 - Collection and recovery of tax - When tax payable and when assessee deemed in default (Stay) - Petitioners were retired personnel - Being aggrieved by order of assessment, both petitioners filed individual appeals - During pendency of appeal along with stay application, revenue authorities issued notices for recovery and had attached bank accounts of petitioners - Whether in view of prevailing COVID-19 pandemic in country, interest of justice would be subserved by directing banks of petitioners to allow petitioners to operate bank accounts subject to bankers' of petitioner setting aside a sum of Rs. 5 lakhs - Hed, yes - Whether since, a sum of Rs. 2 lakhs has already been paid by banker of one of aforesaid petitioners to revenue authorities, it would be appropriate to permit such petitioner to operate his bank account - Held, yes - [Paras 6 to 8] [Partly in favour of assessee]

New Delhi Television Ltd. Vs. Deputy Commissioner of Income Tax [2020] 116 taxmann.com 151 (SC)

Section 69A, read with section 147, of the Income-tax Act, 1961 - Unexplained moneys - (Step UP Coupon Bonds) - Assessment year 2008-09 - Assessee-company namely, NDTV, invested in a number of foreign subsidiaries, primarily in UK and Netherlands - In course of assessment, Assessing Officer found that NNPLC, an indirect subsidiary of assessee incorporated in UK, raised funds by issuing $ 100m Step Up Coupon Convertible Bonds for which assessee furnished corporate guarantee - These bonds were to be redeemed at a premium of 7.5 per cent after expiry of period of 5 years, however, these bonds were redeemed in advance at a discounted price of US $74.2 million - Assessing Officer issued notice to assesee to reopen its assessment based on order of DRP for subsequent year, wherein DRP had held that though amount was introduced through its subsidiary companies in Netherlands, it ultimately reached coffers of assessee through circuitous round tripping - Assessee, however, claimed that transaction of step up bonds was a legal and valid transaction and Assessing Officer had no valid reasons to believe that income of assessee had escaped assessment - Whether at stage of issuance of notice, Assessing Officer is to only form a prima facie view that income had escaped assessment and since material disclosed in assessment proceedings for subsequent years was sufficient to form such a view, it was to be held that there were reasons to believe that income had escaped assessment in instant case - Held, yes - Whether however, since during original assessment assessee had made a disclosure about having agreed to stand guarantee for transaction by NNPLC and it had also disclosed factum of issuance of convertible bonds and their redemption, there being no failure on part of assessee to disclose all material facts, notice issued to assessee after a period of 4 years was to be quashed and set aside - Held, yes [Paras 23, 34, 35, 43 and 44][In favour of assessee]

Section 149, read with sections 147 and 148 of the Income-tax Act, 1961 - In income escaping assessment - Time limit for issuance of notice (Sub section (1)(c)) - Assessment year 2008-09 - Whether where reassessment notice issued to assessee and supporting reasons therein did not invoke provisions of second proviso of section 147, revenue could not later on at stage of proceedings before High Court, have been permitted to take benefit of second proviso and urge that limitation of sixteen years in terms of section 149(1)(c) would apply - Held, yes [Paras 40 to 43][In favour of assessee]

[2020] 116 taxmann.com 701 (Delhi)

INCOME TAX : Where assessee succeeded before CIT(A) in ultimate analysis and was, thus, not an aggrieved party, in Revenue's appeal, ITAT committed a mistake by not permitting assessee (respondent before it) to support final order of CIT(A) by assailing findings of CIT(A) on issues that had been decided against him

Modern Malleables Ltd. VS. Deputy Commissioner of Income Tax [2020] 116 taxmann.com 425 (Kolkata - Trib.)

INCOME TAX : Where in course of search proceedings carried out in case of one "A", Assessing Officer made addition to assessee's income under section 68 in respect of share capital received by them on two basis, firstly, "A" had admitted that he was running a bogus company through which amount in question was given and secondly, director of said alleged bogus company also admitted that he did not have any knowledge of any Joint Venture (JV) allegedly entered into with assessee in terms of which money was paid to them, in view of the fact that statement of "A" was riddled with infirmities like amount, nature of transactions etc. and, assessee was not allowed to cross examine "A" which vitiated his statement and, moreover, assessee had also brought on record certain documents to establish that a joint venture was duly executed between them in terms of which amount in question was received but, subsequently, when said joint venture did not materialize, assessee returned said amount through cheques to alleged bogus company, it could not be concluded that assessee had infused their own funds through accommodation entry provider and, thus, impugned addition was to be[2020] 115 taxmann.com 330 (SC).

Rajasthan State Electricity Board Vs. Deputy Commissioner of Income Tax [2020] 115 taxmann.com 330 (SC)

INCOME TAX : Section 143(1A) can only be invoked when lesser amount stated in return filed by assessee is a result of an attempt to evade tax lawfully payable by assessee, thus, where there was no observation to effect claim of 100 per cent depreciation by assessee, 25 per cent of which was disallowed was with intend to evade tax, section 143(1A) could not have been applied deleted.