[CASE NUMBER] IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION NO. 302 of 2014 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE [ENTITY] and HONOURABLE MR.JUSTICE [ENTITY] 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the [ACT] or any order made thereunder ? [ENTITY] Petitioner(s) Versus [ENTITY] & 4 Respondent(s) Appearance: MR.PARTH CONTRACTOR, ADVOCATE for the Petitioner(s) No. 1 MR [ENTITY], ADVOCATE for the Respondent(s) No. 1 MR.MANISH BHATT, ADVOCATE with MRS [ENTITY], ADVOCATE for the Respondent(s) No. 4 MS [ENTITY], ADVOCATE for the Respondent(s) No. 1 RULE SERVED for the Respondent(s) No. 2 - 3 , 5 CORAM: HONOURABLE MR.JUSTICE [ENTITY] and HONOURABLE MR.JUSTICE [ENTITY] Date : 20/06/2017 Page 1 of 23 [ACT] Page 1 of 23 Created On Sat Aug 19 00:21:21 IST 2017 [CASE NUMBER] ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE [ENTITY])
1. Thispetitionisfiledbyanindividual.Hehas [ACT] ('the Act' for short) and has also challenged the demand of fee in terms of the said provisionraisedundersection200AoftheAct. The petitioner has also challenged the validity of [SECTION] of the [ACT] ('the Rules' for short).
2. [ENTITY].
3. ThepetitionerisaproprietorofoneM/sSaiBaba Textiles which is engaged in the manufacture and trading of ladies garments. In course of the business, the petitioner would make payments to individualsandagencies,manyofwhichwouldrequire deductingtaxatsource.TheprovisionsundertheAct wouldfurtherrequirethepetitionertofileperiodic statements of such tax deducted at source and depositingthetaxintheGovernmentwithinthetime prescribed.Witheffectfrom01.07.2012,section234E wasintroducedintheActforlevyingfeefordefault [ACT] Page 2 of 23 Created On Sat Aug 19 00:21:21 IST 2017 [CASE NUMBER] in furnishing the statement of tax deducted or collectedatsource. Asperrule31AoftheRules, thepersonresponsiblefordeductionoftaxinterms ofsubsection(3)ofsection200wouldhavetofile quarterlystatementsinprescribedform.[SECTION] wouldhavetobefiled.
4. Section200AoftheActpertainstoprocessingof statementsoftaxdeductedatsource.Thisprovision providesforprocessingthestatementfiledbyperson deducting the tax. Prior to 01.06.2015, this provision did not contain any reference to the adjustment of fee to be computed in accordance with the provisions of [SECTION] of the Act. This provisionwasmadeonlywitheffectfrom01.06.2015.
5. In the petition, the petitioner has raised followingthreefoldgrievances:
I. Thatsection234EoftheActisultravires andunconstitutional.
II. [SECTION] of the Rules insofar as it prescribes longer period for the Government to file the statements as compared to the other [ACT] Page 3 of 23 Created On Sat Aug 19 00:21:21 IST 2017 [CASE NUMBER] assessees is discriminatory and arbitrary and thereforeunconstitutional.
III. Prior to 01.06.2015, [SECTION] did not authorize the Assessing Officer to make adjustmentofthefeetobeleviedunder[SECTION]. Thisprovisionintroducedwith effect from 01.03.2016 is not retrospective and therefore,fortheperiodbetween01.07.2002i.e. whensection234EwasintroducedintheActand 01.06.2015 when proper mechanism was provided undersection200AoftheActforcollectionof fee,thedepartmentcouldnothavechargedsuch fee.
6. Appearing for the petitioner, learned advocate Shri [ENTITY] at the outset, stated that in viewofthejudgmentoftheBombayHighCourtincase ofRashmikantKundaliaandanotherv.UnionofIndia and Others reported in [2015] 373 ITR 268, he has instructions not to press the challenge to constitutionality of [SECTION] of the Act. He howevermadedetailedsubmissionswithrespecttothe othertwogrievancesofthepetitioner.Regarding[SECTION]oftheRules,hepointedoutthatthelegislature [ACT] Page 4 of 23 Created On Sat Aug 19 00:21:21 IST 2017 [CASE NUMBER] has prescribed different time limits for filing statements for the Government and the rest of the assessees. The special concession to the Government agencieswaswhollyunnecessaryandnotbasedonany rational.Thesamedifficultiesandcomplexitieswhich arefacedbyGovernmentagencieswouldalsobefaced bytheindividualassessees.
7. Withrespecttotheamendmentinsubsection(1) ofsection200A,counselsubmittedthatpriortosuch amendment,therewasnomechanismprovidedunderthe Actforcollectionoffeeundersection234Eofthe Act. TheAssessingOfficerthereforecouldnothave adjustedsuchfeeintermsofsection200AoftheAct. Counsel drew our attention to an intimation sent by theAssessingOfficer,purportedtobeunder[SECTION]oftheAct,inwhich,hehadadjustedasumof Rs.33,123/ by way of late filing fee under [SECTION].CounselreliedonadecisionofPune Bench of ITAT in case of [PRECEDENT], reported in [2016] 73 taxmann.com 380 (Pune - Trib.), in which, the Tribunal held that prior to 01.06.2015, the Assessing Officer was not [ACT] Page 5 of 23 Created On Sat Aug 19 00:21:21 IST 2017 [CASE NUMBER] empoweredtochargefeeunder[ACT] [PRECEDENT], in which, the Court has taken a view that the amendment in [SECTION] with effect from 01.06.2015cannothaveretrospectiveeffect.
8. On the other hand learned counsel Shri [ENTITY] for the department opposed the petition contendingthattwodifferenttimelimitsforfiling statementsunderrule31AareforGovernmentandnon Government agencies. Looking to the multilayered system of operation of the Government agencies and overall workload, the legislature thought it fit to grant 15 days additional time to the Government agencies to file the statements. This is therefore notacaseofdiscrimination,butacaseofreasonable classification.
9. With respect to the amendment in [SECTION], counsel submitted that the charging provision is [ACT] a mechanism. Such a provision cannot govern the [ACT] Page 6 of 23 Created On Sat Aug 19 00:21:21 IST 2017 [CASE NUMBER] charging provision. Even in absence of amendment in [SECTION], the Assessing Officer was always authorizedtolevyfeeintermsofsection200Eofthe Act. At best, the amendment in the said provision should be seen as clarificatory or providing a mechanism which till then was missing. Counsel referred to the decision of Rajasthan High Court in caseof [PRECEDENT], where,inthecontextofchallengetothevirestothe section234EoftheAct,incidentallythisissuealso cameupforconsideration.
10. Inordertoappreciatetherivalcontentions,we may take a closer look at the statutory provisions applicable. Section200oftheActpertainstoduty ofthepersondeductingtaxandimposesadutyona persondeductingtaxinaccordancewiththeforegoing provisions of chapterXVII to pay such sum to the credit of the Central Government within the time prescribed. [SECTION] requires such a person to prepare such statements for the prescribed periods and to file the same within the prescribed time. [SECTION] of the Act makes [ACT] Page 7 of 23 Created On Sat Aug 19 00:21:21 IST 2017 [CASE NUMBER] similarprovisionforthepersonresponsibleforthe collectionoftaxatsourcetodepositthesamewith theGovernmentrevenueandtofileastatementwithin theprescribedtime.
11. Section200AoftheActpertainstoprocessingof statementsoftaxdeductedatsource.Wewouldnotice theprovisionsofthissectionpriorto01.06.2015and the changes made therein by virtue of [ACT],wewould takenoteofprovisionsof[ACT] Forthetimebeing,wemaynoticethatsection200A provides for a mechanism for processing a statement filed under [SECTION] of the Act and enables the Assessing Officer to make some adjustments and to intimatethefinaloutcometotheassessee.
12. Section234Ewhichpertainstofeefordefaultin furnishingthestatementswasintroducedforthefirst time by the [ACT], with effect from 01.07.2015.Section234Ereadsasunder:
"Feefordefaultinfurnishingstatements.
234E.(1) Without prejudice to the provisions of theAct,whereapersonfailstodeliverorcause to be delivered a statement within the time [ACT] Page 8 of 23 Created On Sat Aug 19 00:21:21 IST 2017 [CASE NUMBER] prescribedinsubsection(3)ofsection200or theprovisotosubsection(3)ofsection206C, heshallbeliabletopay,bywayoffee,asum oftwohundredrupeesforeverydayduringwhich thefailurecontinues.
(2) Theamountoffeereferredtoinsubsection (1)shallnotexceedtheamountoftaxdeductible orcollectible,asthecasemaybe.
(3) The amount of fee referred to in subsection (1) shall be paid before delivering or causing to be delivered a statement in accordancewithsubsection(3)ofsection200or theprovisotosubsection(3)ofsection206C.
(4)Theprovisionsofthissectionshallapplyto a statement referred to in subsection(3) of section200ortheprovisotosubsection(3)of section206Cwhichistobedeliveredorcaused tobedeliveredfortaxdeductedatsourceortax collected at source, as the case may be, on or afterthe1stdayofJuly,2012."
13. Witheffectfrom01.07.2012,thelegislaturealso introducedsection271HoftheActprovidingpenalty forfailuretofurnishstatementsrequiredtobefiled undersubsection(3)ofsection200orunderproviso tosubsection(3)ofsection206CoftheAct.Asper subsection(2)ofsection271Hincaseofdefaultto file the statements, the assessee may be liable to penaltyofnotlessthanrupeestenthousandbutnot morethanrupeesonelakh. [SECTION],suchpenaltywouldbeavoidedif theassesseeprovesthathehadpaidthetaxdeducted [ACT] Page 9 of 23 Created On Sat Aug 19 00:21:21 IST 2017 [CASE NUMBER] orcollectedalongwithinterestandhehadfiledthe necessary statement within one year from the time prescribed for filing such statements. We may also [SECTION] statementwithinthetimespecifiedinsubsection(3) ofsection200ortheprovisotosubsection(3)of section206Catarateofrupeesonehundredforevery date during which the failure continues. However, with effect from 01.07.2012, a proviso was added limitingtheeffectofthisprovisionupto01.07.2012. In other words, after 01.07.2012, the penalty provisionofsection271Hwouldapplyinsuchcasesof defaults.
14. [SECTION] of the Act prior to 01.06.2015 providedasunder:
[SECTION] "Processing of statements of tax deducted at source.
200A. (1) Where a statement of tax deduction at source[oracorrectionstatement]hasbeenmadeby apersondeductinganysum(hereafterreferredto in this section as deductor) under [SECTION], suchstatementshallbeprocessedinthefollowing manner,namely:
(a)the sums deductible under this Chapter shall be computed after making the following adjustments,namely:
[ACT] Page 10 of 23 Created On Sat Aug 19 00:21:21 IST 2017 [CASE NUMBER]
(i)any arithmetical error in the statement; or
(ii)an incorrect claim, apparent from any informationinthestatement;
(b)theinterest,ifany,shallbecomputedonthe basisofthesumsdeductibleascomputedinthe statement;
(c)the sum payable by, or the amount of refund dueto,thedeductorshallbedeterminedafter adjustmentofamountcomputedunderclause(b) against any amount paid under [SECTION] and section 201, and any amount paid otherwise by wayoftaxorinterest;
(d)an intimation shall be prepared or generated and sent to the deductor specifying the sum determinedtobepayableby,ortheamountof refunddueto,himunderclause(c);and
(e)amount of refund due to the deductor in pursuance of the determination under clause shallbegrantedtothedeductor:
(f)theamountofrefundduetothedeductorin pursuanceofthedeterminationunderclause(d) shallbegrantedtothedeductor:] Provided that no intimation under this sub section shall be sent after the expiry of one yearfromtheendofthefinancialyearinwhich thestatementisfiled.
Explanation. For the purposes of this sub section,"anincorrectclaimapparentfromany information in the statement" shall mean a claim, on the basis of an entry, in the statement
(i) of an item, which is inconsistent with anotherentryofthesameorsomeotheritem insuchstatement;
(ii)in respect of rate of deduction of tax at source,wheresuchrateisnotinaccordance withtheprovisionsofthisAct;
(2) Forthepurposesofprocessingofstatements undersubsection(1),theBoardmaymakeascheme [ACT] Page 11 of 23 Created On Sat Aug 19 00:21:21 IST 2017 [CASE NUMBER] for centralised processing of statements of tax deductedatsourcetoexpeditiouslydeterminethe taxpayableby,ortherefunddueto,thedeductor asrequiredunderthesaidsubsection." With effect from 01.06.2015, [SECTION]. Intheamendedform,the sameprovisionreadsasunder:
[SECTION] "Processing of statements of tax deducted at source.
200A. (1) Where a statement of tax deduction at source[oracorrectionstatement]hasbeenmadeby apersondeductinganysum(hereafterreferredto in this section as deductor) under [SECTION], suchstatementshallbeprocessedinthefollowing manner,namely:
(a)the sums deductible under this Chapter shall be computed after making the following adjustments,namely:
(i)any arithmetical error in the statement; or
(ii)an incorrect claim, apparent from any informationinthestatement;
(b)theinterest,ifany,shallbecomputedonthe basisofthesumsdeductibleascomputedinthe statement;
(c)the fee, if any, shall be computed in accordance with the provisions of [SECTION];
(d)the sum payable by, or the amount of refund dueto,thedeductorshallbedeterminedafter adjustmentoftheamountcomputedunderclause
(b) and clause (c) against any amount paid under [SECTION] or section 201 or [SECTION] and any amount paid otherwise by way of taxorinterestorfee;
(e)an intimation shall be prepared or generated and sent to the deductor specifying the sum [ACT] Page 12 of 23 Created On Sat Aug 19 00:21:21 IST 2017 [CASE NUMBER] determinedtobepayableby,ortheamountof refunddueto,himunderclause(d);and
(f)theamountofrefundduetothedeductorin pursuanceofthedeterminationunderclause(d) shallbegrantedtothedeductor:] Provided that no intimation under this sub section shall be sent after the expiry of one yearfromtheendofthefinancialyearinwhich thestatementisfiled.
Explanation. For the purposes of this sub section,"anincorrectclaimapparentfromany information in the statement" shall mean a claim, on the basis of an entry, in the statement
(i) of an item, which is inconsistent with anotherentryofthesameorsomeotheritem insuchstatement;
(ii)in respect of rate of deduction of tax at source,wheresuchrateisnotinaccordance withtheprovisionsofthisAct;
(2) Forthepurposesofprocessingofstatements undersubsection(1),theBoardmaymakeascheme for centralised processing of statements of tax deductedatsourcetoexpeditiouslydeterminethe taxpayableby,ortherefunddueto,thedeductor asrequiredunderthesaidsubsection."
15. In view of such statutory provisions, we may considerthepetitioner'stwochallenges. Comingto thequestionofdiscriminatorynatureofrule31Aof theRules,itcanbeseenthatsubrule(1)of[SECTION]oftheRulesprovidesforfilingofthestatements inprescribedformsasrequiredundersubsection(3) ofsection200. Subrule(2)ofrule31Alaysdown [ACT] Page 13 of 23 Created On Sat Aug 19 00:21:21 IST 2017 [CASE NUMBER] the time limit for filing such quarterly statements andprovidesasunder:
"(2)Statementsreferredtoinsubrule(1)forthe quarter of the financial year ending with the date specifiedincolumn(2)oftheTablebelowshallbe furnishedby
(i)theduedatespecifiedinthecorrespondingentry incolumn(3)ofthesaidTable,ifthedeductoris anofficeofGovernment;and
(ii) theduedatespecifiedinthecorrespondingentry incolumn(4)ofthesaidTable,ifthedeductorisa personotherthanthepersonreferredtoinclause(i) TABLE Sl.Dateof Duedate Duedate No. endingof quarterof financial year (1) (2) (3) (4) 1 30thJune 31stJulyofthe 15th July of the financialyear financialyear 2 30th 31stOctoberofthe15th Octoberofthe September financialyear financialyear 3 31st 31stJanuaryofthe15th Januaryofthe December financialyear financialyear 4 31stMarch 15th May of the15th May of the financial yearfinancial year immediately immediately following thefollowing the financial year infinancial year in which thewhichthededuction deductionismade. ismade.
This rule thus, while laying down the last date by which such statements should be filed, draws two categories; in case of deductor is an office of [ACT] Page 14 of 23 Created On Sat Aug 19 00:21:21 IST 2017 [CASE NUMBER] governmentandincaseofadeductorisapersonother thantheofficeofthegovernment.Consistently,the officeofthegovernmentisgranted15daysextratime ascomparedtotheotherdeductors.Forexample,the statementforthedateofthequarterendingon30th June, an ordinary deductor would have to file a statement latest by 15th July of the same year, whereasfortheGovernmentoffice,thelastdatefor filingsuchstatementwouldbe31st Julyofthesaid year.This15daysextratimeisaconsistentfeature inallfourquarters.Theshortquestionis,didthe legislature discriminate in doing so? It is well settledthatArticle14doesnotprohibitreasonable classificationbutfrownsuponclasslegislation.In the affidavit in reply filed, the respondents have pointed out that multiple agencies are involved in every transaction in the Government offices and the same therefore cannot be compared with the private individualsorbusinesshouses.Wedonotfoundthat theextratimeof15daysfortheGovernmenttofilea returnofdeductionoftaxatsourceisinanymanner either unreasonable or discriminatory. If the legislature found it appropriate to grant slightly [ACT] Page 15 of 23 Created On Sat Aug 19 00:21:21 IST 2017 [CASE NUMBER] longer period to the government agencies looking to the complex nature of transactions involved, the volumeandturnoverofsuchtransactionsandfiltering necessarystatementsrequiredatmanystages,inour opinion,thesamewasperfectlylegitimate. Looking tothedifferencesbetweentheGovernmentagenciesand privateassesseesinthecontextofprovidingthelast date for filing the statements, do not form a homogeneousclasswhichcannotbefurtherbifurcated.
16. Wenowcometothepetitioner'scentralchallenge viz.ofnonpermissibilitytolevyfeeunder[SECTION] of the Act till [SECTION] of the Act was amendedwitheffectfrom01.06.2015.Wehavenoticed therelevantstatutoryprovisions. Thepicturethat emergesisthatpriorto01.07.2012,theActcontained a single provision in [SECTION] providing for penaltyincaseofdefaultinfilingthestatementsin termsofsection200orprovisotosection206C.Such penaltywasprescribedattherateofRs.100forevery dayduringwhichthefailurecontinued. Witheffect from01.06.2012,threemajorchangeswereintroduced intheAct.Section234Easintroducedforthefirst timetoprovideforchargingoffeeforlatefilingof [ACT] Page 16 of 23 Created On Sat Aug 19 00:21:21 IST 2017 [CASE NUMBER] thestatements.Suchfeewouldbeleviedattherate ofRs.200/foreverydayoffailuresubjecttothe maximumamountoftaxdeductibleorcollectibleasthe casemaybe.Section271Hwasalsointroducedforthe firsttimeforlevyingpenaltyforfailuretofurnish thestatements.Suchpenaltywouldbeintherangeof Rs.10,000/ and Rs.1 lakh. No penalty would be imposedifthetaxisdepositedwithfeeandinterest andthestatementisfiledwithinoneyearofthedue date. With addition to these two provisions prescribingfeeandpenaltyrespectively,[SECTION] became redundant and by adding a proviso to the said section, this effectwasthereforelimitedupto01.07.2012.
17. Inessence,section234Ethusprescribedforthe firsttimechargingofafeeforeverydayofdefault in filing of statement under [SECTION] or any proviso to [SECTION] makingthecomplianceofdeductionandcollectionof taxatsource,depositingitwithGovernmentrevenue andfilingofthestatementsmorestringent.
[ACT] Page 17 of 23 Created On Sat Aug 19 00:21:21 IST 2017 [CASE NUMBER]
18. Inthiscontext,wemaynoticethatsection200A which pertains to processing of statements of tax deductedatsourceprovidesfortheprocedureoncea statementofdeductionoftaxatsourceisfiledby the person responsible to do so and authorizes the Assessing Officer to make certain adjustments which are primafacie or arithmetical in nature. The officerwouldthensendanintimationofastatement totheassessee.Priorto01.06.2015,thisprovision didnotincludeanyreferencetothefeepayableunder [ACT], thenewclausecpermitstheauthoritytocomputethe fee, if any, payable by the assessee under [SECTION]andbyvirtueofclaused,adjustthe said sum against the amount paid under the various provisionsoftheAct.
19. In plain terms, [SECTION] of the Act is a machineryprovisionprovidingmechanismforprocessing a statement of deduction of tax at source and for making adjustments, which are, as noted earlier, arithmetical or primafacie in nature. With effect from01.06.2015,thisprovisionspecificallyprovides for computing the fee payable under [SECTION] of [ACT] Page 18 of 23 Created On Sat Aug 19 00:21:21 IST 2017 [CASE NUMBER] the Act. On the other hand, [SECTION] is a chargingprovisioncreatingachargeforlevyingfee forcertaindefaultsinfilingthestatements.Under nocircumstancesamachineryprovisioncanoverrideor overruleachargingprovision. Weareunabletosee thatsection200AoftheActcreatesanychargeinany manner.Itonlyprovidesamechanismforprocessinga statement for tax deduction and the method in which thesamewouldbedone.Whensection234Ehasalready createdachargeforlevyingfeethatwouldthereafter not been necessary to have yet another provision creating the same charge. Viewing [SECTION] as creatinganewchargewouldbringaboutadichotomy. Inplainterms,theprovisioninourunderstandingis a machinery provision and at best provides for a mechanismforprocessingandcomputingbesidesother, feepayableundersection234Eforlatefilingofthe statements.
20. Eveninabsenceofsection200AoftheActwith introductionofsection234E,itwasalwaysopenfor the Revenue to demand and collect the fee for late filingofthestatements. Section200Awouldmerely regulatethemannerinwhichthecomputationofsuch [ACT] Page 19 of 23 Created On Sat Aug 19 00:21:21 IST 2017 [CASE NUMBER] feewouldbemadeanddemandraised.Inotherwords, we cannot subscribe to the view that without a regulatoryprovisionbeingfoundforsection200Afor computationoffee,thefeeprescribedunder[SECTION]cannotbelevied.Anysuchviewwouldamountto a charging section yielding to the machinery provision.Ifatall,[SECTION] would be in nature of clarificatory amendment. Even in absence of such provision, as noted, it was always open for the Revenuetochargethefeeintermsofsection234Eof the Act. By amendment, this adjustment was brought within the fold of [SECTION] of the Act. This wouldhaveonedirecteffect. Anorderpassedunder section200AoftheActisrectifiableundersection 154oftheActandisalsoappealableundersection 246A. Inabsenceofthepowerofauthoritytomake such adjustment under [SECTION] of the Act, any calculationofthefeewouldnotpartakethecharacter oftheintimationundersaidprovisionanditcouldbe argued that such an order would not be open to any rectification or appeal. Upon introduction of the recasted clause (c), this situation also would be [ACT] Page 20 of 23 Created On Sat Aug 19 00:21:21 IST 2017 [CASE NUMBER] obviated. Even prior to 01.06.2015, it was always open for the Revenue to calculate fee in terms of [ACT]TheKarnatakaHighCourtin caseof [PRECEDENT] (supra) heldthat[SECTION] was not merely a regulatory provision, but was conferring substantive power on the authority. The Courtwasalsooftheopinionthatsection234Eofthe Actwasinthenatureofprivilegetothedefaulterif hefailstopayfeesthenhewouldberidofrigorof thepenalprovisionofsection271HoftheAct.With boththesepropositions,withrespect,weareunable to concur. [SECTION] is not a source of substantivepower.Substantivepowertolevyfeecan betracedto[ACT]Furtherthefee undersection234EoftheActisnotinlieuofthe penalty of [SECTION] of the Act. Both are independentlevies. Section271Honlyprovidesthat suchpenaltywouldnotbelevyifcertainconditions arefulfilled.Oneoftheconditionsisthatthetax with fee and interest is paid. The additional condition being that the statement is filed latest withinoneyearfromtheduedate.
21. Counsel for the petitioner however, referred to [ACT] Page 21 of 23 Created On Sat Aug 19 00:21:21 IST 2017 [CASE NUMBER] thedecisionofSupremeCourtincaseofCommissioner of IncomeTax, Bangalore v. B C Srinivasa Setty reportedin 1981(128)ITR294, tocontendthatwhen amachineryprovisionisnotprovided,thelevyitself wouldfail.ThedecisionofSupremeCourtincaseof BCSrinivasaSetty (supra)wasrenderedinentirely differentbackground.Issueinvolvedwasofcharging capitalgainontransferofacapitalasset.Incase onhand,theassetwasinthenatureofgoodwill.The Supreme Court referring to various provisions concerning charging and computing capital gain observed that none of these provisions suggest that theyincludeanassetintheacquisitionofwhichno costcanbeconceived. Insuchacase,theassetis soldandtheconsiderationisbroughttotax,whatis chargedisacapitalvalueoftheassetandnotany profit or gain. This decision therefore would not applyinthepresentcase.
22. Intheresult,petitionfailsandisdismissed.
([ENTITY], J.) [ACT] Page 22 of 23 Created On Sat Aug 19 00:21:21 IST 2017 [CASE NUMBER] ([ENTITY], J.) ANKIT [ACT] Page 23 of 23 Created On Sat Aug 19 00:21:21 IST 2017