Income Tax Judgements

Chandigarh ITAT pronounces 165 pages ruling on development agreement taxability involving over 2 dozen appeals; Capital gains on land taxable in the year when Joint Development Agreement (JDA) entered; JDA alongwith irrecoverable power of attorney & handing over of possession, results into transfer of capital asset; Definition of transfer as per clause (v) of Sec…

In absence of any independent material, statement of assessee’s son recorded during survey would not form a valid basis for reopening assessment of assessee. Held by Gujarat HC in the case of Shardaben K. Modi. For complete text of judgement shardaben k modi-gujarat HC

Part share sale consideration kept with Bank as ‘Escrow’ under Share Purchase Agreement (SPA), cannot be demanded by AO towards tax liabilities of the Company whose shares are transferred; A company is independent entity completely distinct from its shareholders; Neither SPA nor Escrow Agreement provides for any contingency which would enable company whose shares are…

Assessee must exhaust alternate remedy before filing writ petition; Gujarat HC wrong to have entertained writ petition of assessee at initial stage of issuance of show cause notice; Sets aside Gujarat HC order quashing the show cause notices, directs assessee to file reply to notice; Assessee to exhaust all available remedies under Income Tax Act…

The Hon’ble Allahabad HC in the case of CIT vs. Vector Shipping Services P. Ltd. decided on 09.07.2013 has laid down as under : “It is to be noted that for disallowing expenses from business and profession on the ground that TDS has not been deducted, the amount should be payable and not which has…

Certificate of registration as “Income Tax Practitioner” (ITP) issued by CIT, mandatory to practice before Revenue authorities and ITAT; Mere possession of educational qualification or passing prescribed exams not sufficient; Without certificate of registration from CIT, person not authorised to appear before Revenue and ITAT; Filing of combined power of attorney by advocate and ITP,…

Block assessment u/s 158BC not valid in case of consequential search on assessee based on material found in search of another person; Provisions of Sec. 158BD applicable in such case; Revenue not permitted to follow time limit applicable to assessment u/s 158BD in respect of assessment made u/s 158BC; Sec. 292B cannot cure every irregularity,…

Loss from trading of derivatives in shares held as ‘deemed speculative’; When underlying asset (i.e. shares) is covered by Sec 73 explanation, derivatives deriving its values from shares falls within the Explanation to Sec 73(4); Overrules ITAT ruling; Exclusion of derivatives from definition of speculative transactions u/s 43 limited to computation of business income; It…

Exemption u/s 54EC for investment in specified bonds available on long term capital gains (LTCG) before set-off of long term capital loss (LTCL); Rejects Revenue’s contention that effect of Sec 70(3) (loss set off) to be given before Sec. 54EC; Sec. 54EC not on different footing vis-a-vis similar sections (like Sec. 54/ 54EA/ 54EB) despite…

During the year only an amount of 4 lakh was invested out of total investment of 3.39 crores. In the earlier years the assessment of the assessee  were complete u/s 143(3) and the AO did not make any disallowance u/s 14A. the term loan taken by the assessee was for specific purposes and it cannot…