Source: http://aiftponline.org/journal/2016/november-2016/tribunals-5/
Timestamp: 2018-06-18 11:41:17
Document Index: 27220047

Matched Legal Cases: ['Art.23', 'Art. 2', 'Art. 13', 'Art.13', 'Art. 4', 'Art.13']

127. S.2(28A) : Interest – Loan processing fees – Tax deduction at source provisions will not apply to loan processing fees paid to any banking company to which Banking Regulations Act, 1949 applies [S.194A, 194J]
Definition of interest as given in S. 2(28A) will include any service fee or any other charge in respect of money borrowed; thus, loan, processing fee falls within such definition and, therefore, it cannot be reckoned as payment for rendering of any managerial services by bank. Loan processing fees paid to any banking company to which Banking Regulations Act, 1949 applies, is not liable to deduction of TDS. (AY. 2010-11)
DCIT v. Laqshya Media (P.) Ltd. (2016) 160 ITD 35 (Mum.)(Trib.)
128. S.9 (1)(i) : Income – Deemed to accrue or arise in India – corporate guarantee – Extended credit facilities by branch of said bank, guarantee commission received by assessee did not accrue in India [Art.23]
Assessee, a French company, had given corporate guarantee to French bank on behalf of its Indian subsidiaries. Extended credit facilities by branch of said bank, guarantee commission received by assessee did not accrue in India. Article 23 had no applicability-India-France. (AY 2012-13)
Capgemini SA v. DCIT (2016) 160 ITD 13 (Mum.)(Trib.)
129. S.9(1)(vi) : Income deemed to accrue or arise in India – Royalty – 10% and rate of tax cannot be enhanced by including surcharge and education cess separately- DTAA – India- France [Art. 2, 13 ]-
Provisions of Article 13 of Indo-French DTAA prescribing a cap of 10% on rate of tax, read with Article 2 thereof, would prevail over provisions of domestic income-tax and thus tax liability on royalty income shall be capped at 10% and rate of tax @ 10% cannot be enhanced by including surcharge and education cess separately (AY 2012-13)
130. S.9(1)(vi) : Income deemed to accrue or arise in India – Royalty- fees for technical services – Payments received by the assessee from Indian entities on account of connectivity charges are not taxable in India either as royalty or as fees for technical services – DTAA – India-UK [S. 90, Art. 13]
The Tribunal held that, use of virtual voice network is standard facility provided by the assessee in the course of its business of providing international telecommunication network connectivity to various telecom operators with the help of certain scientific equipment whereby no technology is made available. Therefore, the payments received by the assessee from Indian entities on account of connectivity charges are not taxable in India either as royalty or as fees for technical services under Art.13 of Indo-UK DTAA (AY 2009-10).
Interroute Communication Ltd. v. DDIT(IT) (2016) 179 TTJ 355 (Mum.)(Trib.)
131. S.9(1)(vii) : Income deemed to accrue or arise in India -Fees for technical services – There is a difference between “effectively connected” with the permanent establishment and “legally connected” with it. Only those activities necessary for the functioning of the PE are “effectively connected” with the PE – Concept of “make available” technical knowledge etc. – DTAA-India-UK [S. 44DA, Art. 4, 7, 13]
Dismissing the appeal of assessee, the Tribunal held that the appeal of the assessee as under:
(a.) With respect to ground Nos. 2, 3, 4, 5 and 6 of the appeal of the assessee we hold that that (a) the receipts from the services rendered outside India of
Rs. 23,77,50,181/- are chargeable to tax as Fees for Technical Services in terms of Article 13(4)(c) as it makes available the technology to the recipient of services and further the provisions of Article 13(6) of the Indo-UK Double Taxation Avoidance Agreement does not apply to this sum, as it does not “arise through” and also not “effectively connected” with the permanent establishment of the appellant.
(b) With respect to the ground Nos. 7 and 8 of the appeal we hold that income of
Rs. 23,77,50,181/-is chargeable to tax under section 9(1)(vii)(b) of the Income-tax Act as fees for technical services and it does not fall into the exception thereof.
(c) With respect to ground No. 9 of the appeal we hold that receipt of the appellant satisfies the “make available” test as provided under Article 13(4)(c) of the India-UK DTAA as fees for technical services. (ITA No. 1613/Del/2015, dt. 4-10-2016)(AY 2010-11)
International management Group (UK) Ltd. v. ACIT (Delhi) (Trib.), www.itatonline.org
132. S.10B : Export oriented undertakings – Export of Legal Services by a law firm to its overseas clients by transfer of customised electronic data constitutes export of “computer software” as per Explanation 2 to s. 10B and is eligible for deduction
Dismissing the appeal of Revenue the Tribunal held that Export of Legal Services by a law firms to its overseas clients by transfer of customised electronic data constitutes export of “computer software” as per Explanation 2 to s. 10B and is eligible for deduction. Tribunal also held that the customs bonding which was never mentioned by the authorities as a condition for grant of registration can never be made a pre-condition for registration after 3 years. (ITA No. 6604/Mum/012, dt. 19-8-2016)(AYs 2004-05 to 2008- 09)
ACIT v. Majmudar & Co. (Mum.)(Trib.); www.itatonline.org
133. S.12AA : Procedure for registration – Trust or institution – Advocate’s Welfare Fund – Bar Council and Advocates’ welfare fund are two separate legal entities; they require separate registration for claiming income-tax exemption [Ss. 2(15), 11]
Bar Council is constituted under Advocate Act, 1961 while Advocate Welfare Fund is constituted under Advocates’ Welfare Fund Act, 2002; these are separate legal entities and, thus, for claiming income tax exemption u/s. 11, registration is to be obtained separately. (AY. 2003-04 to 2010-11).
Advocate Welfare Fund of Bar Council of Tamil Nadu v. DIT (2016) 160 ITD 66 (Chennai) (Trib.)
134. S.23 : Income from house property – Annual value – Failed to let out the property – ALV to be treated as nil [Ss. 23(ia), 23(1)(c)]
ALV of property remaining vacant for whole year has to be computed with reference to s. 23(1)(c). Therefore, where assessee intended to let property and took appropriate efforts in letting property but ultimately failed to let same, in terms of s. 23(1)(c) its ALV had to be treated as nil being less than sum referred to in s. 23(1)(a). (AY 2009-10)
Vikas Keshav Garud v. ITO (2016) 160 ITD 7 (Pune)(Trib.)
135. S.24 : Income from house property – Interest on borrowed capital – Until house property is self-occupied, interest expenditure would not be allowed [S 23, 24(b)]
Assessee claimed to have purchased a residential property bungalow DM by taking loan and claimed deduction of interest paid to bank on borrowed amount. Bungalow DM was not ready for self-occupation, assessee was not entitled for deduction of interest expenditure u/s. 24(b). (AY 2008-09)
Madanlal F. Jain v. DCIT (2016) 160 ITD 1 (Ahd.)(Trib.)
136. S.28(i) : Business loss – Open derivative contracts – Loss in open derivative contracts due to valuation on basis of mark to market values was to be allowed [S. 145]
Assessee Company is share broking, trading and investment in shares and securities booked losses on open derivative contracts by marking them to market value as at year end. Said ‘loss’ was to be allowed in current year while AO would be at liberty to withdraw said loss on settlement date(s); likewise, brought forward ‘gain’ from contracts would stand to be taxed in its entirety on settlement. (A 2008-09)
Mili Consultants & Investment (P.) Ltd. v. DCIT (2016) 160 ITD 72 (Mum.)(Trib.)
137. S.32 : Depreciation – Additional depreciation – Electricity Manufacturing and production – Generation of electricity amounted to manufacturing/production of article or thing, assessee who had set up hydel power and thermal power plants would be entitled to additional depreciation
Assessee, a public sector undertaking was engaged in business of generation and distribution of electricity. Assessee established hydel power and thermal power plant, wherein water and coal were converted into electricity during manufacturing process. Generation of electricity amounted to manufacturing and production of article or thing and, thus, assessee was entitled for claiming additional depreciation. (AY 2011-12)
Damodar Valley Corporation v. DCIT (2016) 160 ITD 78 (Kol.)(Trib.)
138. S.32 : Depreciation – Amenities for which payment was made are not tools for carrying out the business, hence depreciation is not allowable
The amenities for which the payment is made by the assessee are not the tools for carrying out the business of assessee, therefore the assessee is not eligible for depreciation on the amount paid by the assessee (AYs 2006-07, 2007-08, 2009-10, 2010-11).
Hinduja Foundries Ltd. ACIT (2016) 178 TTJ 88 (Chennai)(Trib.)
139. S.37(1) : Business expenditure – Capital or revenue – Setting up of new units on similar business was held to be allowable as revenue expenditure
The assessee was manufacturing iron castings new units established by the assessee are also admittedly manufacturing iron castings. Therefore, expenditure incurred by the assessee in connection with setting up of new units is allowable as revenue expenditure. (AYs 2006-07, 2007-08, 2009-10, 2010-11).
140. S.40(a)(ia) : Amounts not deductible – Deduction at source – Discount on prepaid charges, held the tax was not deductible at source [S. 194H]
The Tribunal while holding in favour of assessee concluded that in view of the findings of the Guwahati and Jaipur Benches of the Tribunal in assessee’s own case that the provisions of
S. 194H is not applicable to the discount allowed to the distributors in respect of prepaid cards, there was no amount on which TDS was deductible and, therefore s.40(a)(ia) cannot come into play. (AY 2006-07, 2008-09).
Bharti Hexacom Ltd. v. ACT(2016) 179 TTJ 25 (Delhi)(Trib)
141. S.45 : Capital gains – Transfer -entering into a “joint development agreement” with the builder and handing over possession/power of attorney amounts will not amount to a “transfer” and gives rise to capital gains. [S. 2(47) (v), Transfer of Property Act, 1882, S.53A, Indian Registration Act, 1908, S. 17(IA).]
Dismissing the appeal of Revenue, the Tribunal held that Entering into a “joint development agreement” with the builder and handing over possession/power of attorney amounts will not amount to a “transfer” and gives rise to capital gains. (ITA No. 1844/Mum/2012, dt. 28-9-2016)(AY 2008-09).
ACIT v. Jawaharla Agicha (Mum.)(Trib.), www.itatonline.org
142. S.45 : Capital gains – Consideration for alienation of rights under a “Call Option agreement” for shares is not taxable as “capital gains” or as “income from other sources” – DTAA – India-Singapore DTAA [Ss. 5(2), 9(1), 48, 56 Art.13]
Allowing the appeal of assessee the Tribunal held that the consideration received has to be taxed under the head “capital gain” as there is a transfer of an asset/property. The taxability of a capital gain under India-Singapore DTAA has been given in Article 13. So far as conditions and factors mentioned in paragraphs 1, 2 & 3 of Article 13, surely same would not be applicable here in this case. As regards the alienation of shares as mentioned in paras 4 and 5, the same again will not be applicable because here no actual shares which has been transferred or alienated albeit a substantive and valuable right has been given in the shares, which has to reckoned as capital asset or property as per our discussion herein above. Hence, it is gains from the alienation of an asset or property and any gain from alienation of such kind of “property” will fall within the scope of para 6 of Article 13, whereby, the taxing right has been given to the resident State, that is, the State of the alienator, which here in this case is Singapore. The allocation of taxing right under Article 13(6) cannot be attributed to India but to the resident state. Thus, on the facts and circumstances of the case as discussed above, we hold that, firstly, the consideration received by the assessee is arising from the assignment of substantive and valuable rights in the shares of an Indian company which is assessable under the head “capital gain”; and secondly¸ such a capital gain cannot be held to be taxable in India in terms of para 6 of para 13 of India-Singapore-DTAA. With these observation, the addition made by the AO and as confirmed by the CIT(A) is directed to be deleted. (ITA No. 4313/Mum/2011,
dt. 26-8-2016) (AY. 2002-03)
Praful Chandaria v. ADIT (Trib)(Mum), www.itatonline.org
143. S.50C : Capital gains – Full value of consideration – Stamp valuation – Investment in new house – For exemption entire investment in new house to be considered irrespective of source of funds [S. 45, 54F]
Dismissing the appeal of revenue the Tribunal held that, for the purpose of exemption u/s 54F the consideration determined as per section 50C is to be adopted. For exemption entire investment in new house to be considered irrespective of source of funds. (ITA No. 848/Hyd/2015 dt. 13-5-2016) (AY. 2010-11)
ITO v. Kondal Reddy Mandal Reddy (2016) BCAJ -June.P.53 (Hyd.)(Trib.)
144. S.50C : Capital gains – Full value of consideration – Stamp valuation – The proviso to s. 50C inserted by the Finance Act, 2016 w.e.f. 1-4-2017 – It should accordingly be given retrospective effect from 1st April, 2003, i.e. the date effective from which s. 50C was introduced [S.45]
The proviso to s. 50C inserted by the Finance Act, 2016 w.e.f. 1-4-2017 to provide that the stamp duty valuation of property on the date of execution of the agreement to sell should be adopted instead of the valuation on the date of execution of the sale deed is curative and intended to remove an undue hardship to the assessee and an apparent incongruity. It should accordingly be given retrospective effect from 1st April, 2003, i.e. the date effective from which s. 50C was introduced. (ITA No. 1237/Ahd/2013, dt. 30-9-2016) (AY. 2008-09)
Dharamshibhai Sonani v. DCIT (Ahd)(Trib), www.itatonline.org
145. S.68 : Cash credits – Share application money – loans – Investment in plot and construction – Addition was held to be not justified [S. 69]
Tribunal held that the assessee having produced PAN card, bank statements and confirmation of the individual shareholders, it has discharged the onus cast upon it and therefore, AO was not justified in making the addition under section 68 in respect of the share application money received by the assessee.
Tribunal held that the assessee has filed the names, addresses, details, etc. of all loan creditors and even filed their confirmations. Therefore, the assessee had discharged the onus cast upon him and there is no infirmity in the order of CIT(A), hence, the same is upheld.
The Tribunal held that the assessee having made the investments in the plot and construction through banking channel as is evident from its bank statements, the impugned addition under section 69 cannot be sustained.
The Tribunal held that the assessee having paid the installments for purchase of plots through DD, no addition could be made under section 69 simply because the assessee was unable to produce its books of account which were in the custody of the CBI. (AY. 2007-08)
ITO v. A. I. Developer (P) Ltd. (2016) 178 TTJ 332 (Delhi)(Trib.)
146. S.69C : Unexplained expenditure – Bogus purchases – The AO cannot treat purchases as bogus (accommodation entries) merely on the basis of information received from the sales -tax department and without conducting independent inquiries [S. 37(1)]
Dismissing the appeal of revenue the Tribunal held that the AO cannot treat purchases as bogus (accommodation entries) merely on the basis of information received from the sales tax department and without conducting independent inquiries especially when the assessee has discharged its primary onus of showing books of account, payment by way of account payee cheque and producing bills for purchase of goods. (ITA No. 5149/Mum/2014, & ITA No. 4260/mum/2015 dt. 16-9-2016)(AY. 2011-12 & 2010-11)
DCIT v. Shivshankar R. Sharma (Mum.)(Trib.), www.itatonline.org
147. S.80P : Co-operative societies – Interest and dividend earned by a co-op. society on investments with other co-operative societies is eligible for deduction. [S. 80P(2)(d)]
Allowing the appeal of assessee the Tribunal held that interest and dividend earned by a co-op. society on investments with other co-operative societies is eligible for deduction. The question whether the co-op. society is engaged in the business of banking for providing credit facilities to its members and the head under which the income is assessable is not material. (ITA No. 3566/Mum/2014, dt. 15-1-2016)
(AY 2009-10)
Land End Co-operative Housing Society Ltd. v. ITO (Mum.)(Trib); www.itatonline.org
148. S.92C : Transfer pricing – Arm’s length price – Interest – Commercial expediency of a loan to subsidiary is wholly irrelevant in ascertaining arm’s length interest on such a loan – No bar on anyone advancing an interest free loans to anyone but when such transactions are covered by international transactions between AEs S. 92C mandates that income from such transactions are to be computed on basis of arm’s length price
AO by adopting an arm’s length interest on this loan made ALP adjustment to income of assessee and brought it to tax in hands of assessee. Assessee contended since there was no erosion of tax base in India by Assessee Company giving an interest free loan to its Indian AE, provisions of transfer pricing could not have been pressed into service. Commercial expediency of a loan to subsidiary is wholly irrelevant in ascertaining arm’s length interest on such a loan. There is indeed no bar on anyone advancing interest free loans to anyone but when such transactions are covered by international transactions between AEs S. 92C mandates that income from such transactions is to be computed on basis of arm’s length price. Computation of income on basis of arm’s length price does not require that assessee must report some income first, and only then it could be adjusted for ALP. When no income was reported in respect of an item in nature of income, such as interest, but, substitution of transaction price by arm’s length price resulted in an income, it could very well be brought to tax u/s. 92. (AYs. 2003-04, 2004-05)
Instrumentarium Corporation Ltd. v. ADIT (2016) 160 ITD 1 / 49 ITR(T) 589 / 179 TTJ 665 (SB) Kol.)(Trib.)
150. S.92C : Transfer pricing – Arm’s length price – Company having turnover more than ten times that of assessee, could not be accepted as comparable while determining ALP
Assessee-company was rendering software development services to its AE, companies having turnover more than ten times that of assessee, could not be accepted as comparables while determining ALP. Company developing its own software products was also not acceptable as comparable.
DCIT v. Sunquest Information Systems (India) (P.) Ltd. (2016) 160 ITD 49 (Bang.) (Trib.)
151. S.112 : Tax on long term capital gains – Capital gains – Non-resident – Rate applicable would be 10 % and not 20%. [S. 48, 112(1), Proviso]
Dismissing the appeal of revenue the Tribunal held that as per the mandate of proviso to S. 112(1), where the tax is payable in terms of long-term capital gains exceeds 10 per cent before computation under second proviso to S. 48, then such excess shall be ignored and the tax rate will be restricted to 10 per cent. The Tribunal decided in favour of assessee and held that second proviso to s. 48 not being applicable to capital gain arising to a non-resident from the transfer of shares of an Indian company, such case is restricted to first proviso alone and capital gain in such case is covered by the proviso to 112(1) and consequently, tax rate of 10 per cent should be applied. (AY. 2010-11)
DIT v. Mitsubishi Motors Corporation (2016) 179 TTJ 25 (UO) (Delhi) (Trib))
152. S.139 : Return of income (Defective return) – Return of income could not be declared as invalid for belated receipt of Form ITR-V for denying benefit of carry forward losses [S. 80]
AO declared return of income filed by assessee as invalid for non-receipt of ITR-V within prescribed time and, accordingly, denied benefit of carry forward losses. Since AO had not intimated any defect in return of income filed, to assessee, he was not justified in treating original return of income as invalid for belated receipt of Form ITR-V and denying benefit of determined business losses for future years. (AY 2008-09 2009-10)
Fibres & Fabrics International (P.) Ltd. v. DCIT (2016) 160 ITD 102 (Bang.)(Trib.)
153. S.151 : Reassessment – Sanction for issue of notice – Notice was issued after obtaining the sanction of the Commissioner, instead of Joint Commissioner of Income-tax- Reassessment was held to be void ab-initio. [S. 147, 148 ]
Allowing the appeal of assessee following the ratio in Ghansham K.Khabrani v. ACIT (2012) 346 ITR 443 (Bom.)(HC), the court held that, on the facts of the case the notice was issued after obtaining the sanction of the Commissioner, instead of Joint Commissioner of Income tax hence, reassessment was held to be void ab-initio. (ITA No. 4717/Mum/2011, dt. 26-8-2016) (AY. 2002-03)
Purse Holdings India P. Ltd v. ADDIT(IT) (Trib.)(Mum), www.itatonline.org
154. S.153A : Assessment – Search -Even in a case where only a S. 143(1) assessment is made, additions cannot be made without the backing of incriminating material if the S. 143(1) assessment has not abated [S. 143(1)]
Allowing the appeal of assessee, the Tribunal held that even in a case where only a s. 143(1) assessment is made, additions cannot be made without the backing of incriminating material if the s. 143(1) assessment has not abated. (ITA No. 638/Mum/2011, dt. 31-8-2016) (AYs 2002-03 to 2005-06)
Anil Mahavir Gupta v. ACIT (Trib.)(Mum.), www.itatonline.org
155. S. 158BE : Block assessment – Time limit – A panchnama for purposes of opening a locker and vacating S. 132(3) prohibitory orders does not amount to conclusion of the search for purposes of extending limitation for passing the block assessment order [Ss. 132. 158BC]
Allowing the appeal of assessee the Tribunal held that a panchnama for purposes of opening a locker and vacating S. 132(3) prohibitory orders does not amount to conclusion of the search for purposes of extending limitation for passing the block assessment order. (ITA No. 05/Mum/2004, dt. 15-9-2016)
Rajendra Agarwal v. DCIT (Mum.)(Trib.), www.itatonline.org
156. S.147 : Reassessment – Affixture at a wrong address – Absence of valid service of notice, reassessment was held to be bad in law [S. 148]
Tribunal held that the notice under section 148 by affixture at a wrong address where the assessee was not residing, it cannot be said that notice under section 148 was served upon the assessee and therefore the reassessment proceedings were invalid and bad in law. (AY. 2006-07)
ITO v. Om Prakash Kukreja (2016) 159 ITD 190/ 178 TTJ 1 (Chd.)(Trib.)
157. S. 147 : Reassessment – Change of opinion – Judgment of Supreme Court was already available at the time when original assessment was made – Reassessment was held to be not valid [S. 148]
The Tribunal held that the assessment made under Section 143(3) could not be reopened simply by relying on a ruling of the Supreme Court which was already available at the time when the AO made the original assessment. (AY. 2007-08)
Sanwar Mal Jangid v. ITO (2016) 178 TTJ 25 (Jodh.)(UO)(Trib.)
158. S.153C : Block assessment – An order passed without obtaining the approval of the JCIT u/s. 153D is without jurisdiction and void [S. 158BD]
Allowing the appeal of assessee the Tribunal held that, an order passed without obtaining the approval of the JCIT u/s. 153D is without jurisdiction and void. (ITA Nos. 926 to 931/mum/2013, dt. 30-9-2016)(AYs 2002-03 to 2007-08)
HiKlass Moving Picture Pvt. Ltd. v. ACIT (Mum.)(Trib.), www.itatonline.org
159. S.190 : Deduction of tax at source – Capitalised expenditure – Once an expenditure had been capitalised, there would be no requirement for deducting TDS
Payment on hoarding and display expenses, the CIT(A) has directed the AO to remove the expenditure which has been capitalised by the assessee in its books of account. The ITAT held that once an item of expenditure has been capitalized then there is no requirement for deducting the TDS.
160. S.194H : Deduction of tax at source – Commission or brokerage – Guarantee fee paid to bank is not in nature of commission or brokerage under ambit of s. 194H as there exists no principal-agent relationship hence not liable to deduct tax at source
Assessee sought its banks to issue guarantee in its favour for which bank had charged certain amount as guarantee fee. Contract of guarantee did not give rise to principal-agent relationship; therefore, consideration received by bank could not be treated as commission. (AY. 2010-11)
DCIT v. Laqshya Media (P.) Ltd. (2016) 160 ITD 35 (Mum.) (Trib.)
161. S. 234E: Fee – Default in furnishing the statements – Prior to the amendment to s. 200A w.e.f. 1-6-2015, the fee for default in filing TDS statements cannot be recovered from the assessee-deductor [S. 200A(1)]
Allowing the appeal of assessee the Tribunal held that prior to the amendment to s. 200A w.e.f. 1-6-2015, the fee for default in filing TDS statements cannot be recovered from the assessee-deductor. (ITA No. 258/Coch/2016, dt. 9.-9-2016) (AY. 2013-14)
Little Servants of Divine Providence Charitable trust v. ITO (Kochi) (Trib.), www.itatonline.org
162. S. 234E : Fee – Default in furnishing the statements – Fee for late filing of TDS returns cannot be levied prior to 1-6-2015 [S.200A(3)]
Allowing the appeal the Tribunal held that ; the amendment to section 200A(1) of the Act is procedural in nature and in view thereof, the Assessing Officer while processing the TDS statements / returns in the present set of appeals for the period prior to 1-6-2015, was not empowered to charge fees under Section 234E of the Act. Hence, the intimation issued by the Assessing Officer under Section 200A of the Act in all these appeals does not stand and the demand raised by way of charging the fees under Section 234E of the Act is not valid and the same is deleted. The intimation issued by the Assessing Officer was beyond the scope of adjustment provided under Section 200A of the Act and such adjustment could not stand in the eye of law. (ITA Nos. 1292 & 1293/PN/2015, dt. 23-9-2016) (AY. 2013-14)
Gajanan Constructions v. DCIT (Pune)(Trib.), www.itatonline.org
163. S.246A : Appeal – Commissioner (Appeals) – Intimation issued u/s 200A is appealable [Ss. 156, 200A, 234E]
Commissioner (Appeals) has held that the appeal is not maintainable against the order of Assessing Officer passed while processing the TDS returns / statements and charging of fees under Section 234E of the Act. no appeal is provided against the intimation issued under Section 200A of the Act. Allowing the appeal the Tribunal held that; such intimation issued by the Assessing Officer after processing the TDS returns is appealable. The demand raised by way of charging of fees under section 234E of the Act is under Section 156 of the Act and any demand raised under Section 156 of the Act is appealable under section 246A(1)(a) and (c) of the Act. (ITA Nos. 1292 & 1293/PN/2015,
dt.23-9-2016) (AY.2013-14)
164. S.271(1)(c) : Penalty – Concealment – Penalty cannot be imposed if the AO does not specify whether the penalty is for “concealment of income” or for “furnishing inaccurate particulars
Allowing the appeal of assessee the Tribunal held that; penalty cannot be imposed if the AO does not specify whether the penalty is for “concealment of income” or for “furnishing inaccurate particulars”. Penalty cannot be imposed in respect of income surrendered by the assessee if the AO does not link the income to incriminating documents. (ITA Nos. 7034 to 7038/Del/2014, dt. 19-9-2016)(AY 2006-07 to 2010-11)
M. G. Contractors Pvt. Ltd. v. DCIT (Delhi)(Trib.), www.itatonline.org
165. S.271(1)(c) : Penalty – Concealment – Difference in pricing methodology adopted by assessee and AO, levy of penalty was held to be not justified
Allowing the appeal the Tribunal held that addition having been made due to difference in the pricing methodology adopted by AO for determining the expected profits from international transaction and not on account of inaccuracy, discrepancy or concealment found in information furnished by the assessee for determining ALP of the international transaction, it cannot be held that the computation of the price charged in the international transaction made as per s.92C lacked in good faith or due diligence and, therefore, assessee is not liable for penalty under S. 271(1)(c) r/w Expl. 7 thereto. The tribunal noted that it is not open to for the AO to hold assessee guilty under S. 271(1)(c) in one year and not in preceding two years under identical circumstances. (AY. 2008-09)
Cherokee India (P) Ltd. v. Dy.CIT (2016) 179 TTJ 92 (Mum.)(Trib.)
166. S. 271(1)(c) : Penalty – Concealment – Additional income declared in statement not disclosed in return – Levy of penalty was held to be not justified
The Tribunal held that no money, bullion jewellery or any other valuable article was found during the course of search. Therefore, Expl. to s. 271(1)(c) cannot be involved in this case. Merely because addition has been sustained in quantum proceedings, the same cannot be a ground for levy of penalty under section 271(1)(c). This is not a fit case for levy of penalty under section 271(1)(c). (AY. 1990-91)
ITO v. Talwalkar Bhalerao & Mate (2016) 178 TTJ 1 (Pune)(UO)(Trib.)