We are glad to present to you the 253rd edition of ‘Taxsutra Database Bulletin’, where we keep you updated with current trends in the tax arena!
Status of Journals Updated
ITR Vol No. 439 PART 5
Dated 27th Dec 2021
ITR- Trib Vol No. 92 Issue 6
Dated 27th Dec 2021
CTR Vol No. 323 Issue 48
Dated 17th Dec 2021
DTR Vol No 207 Issue 232
Dated 21st Dec 2021
TAXMAN Vol No. 283 Part 7
Dated 25th Dec 2021
ITD Vol No. 191 Issue 9
Dated 29th Dec 2021
TTJ Vol No. 214 Issue 49
Dated 21st Dec 2021
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Key Takeaways from Handpicked Rulings
1) ITAT: Upholds taxability of capital gains on execution of JDA with transaction value therein as consideration - ITAT dismisses Assessee’s appeal, upholds CIT(A)’s order taxing capital gains on execution of the JDA; Assessee-Individual entered into a JDA for Rs.2.48 Cr, Revenue relying on SC ruling in Alapati Venkatramaiah and held transaction under JDA to be a transfer u/s 2(47) and also on Section 53A of Transfer of Property Act and held that Assessee is eligible to receive future profits on the day of execution of JDA, thus liable to capital gains for AY 2013-14, which was confirmed by the CIT(A); ITAT observes that Assessee’s contention was that the SRO value of the land portion surrendered to the builder is the consideration, whereas the Revenue considered the JDA value as consideration; ITAT takes note of CIT(A)’s reasoning that JDA was executed on mutual agreement between the builder and Assessee and that project value was taken into consideration for the purpose of stamp duty; Opines that……………….Click here to read and download ITAT Order
2) ITAT: Income on short term investment prior to business commencement, taxable as income from other sources - ITAT dismisses Assessee’s appeal, rules that interest on short term bank deposits from an independent source not directly related to the construction work taxable under ‘income from other sources’; Assessee-Company engaged in the business of construction, operation and maintenance of road Projects was subjected to scrutiny assessment, whereby an addition of Rs. 87.73 Lakhs towards interest income and disallowance of Rs.17.03 Lakhs on account of interest on late payments of TDS was made, which on appeal was upheld by the CIT(A); Revenue found Assessee had not commenced its operations and held that interest income from short term deposits should be taxable under “Income from Other Sources”; of Income" and further held that no income was offered during the year and restricted TDS credit to Rs. 2.96 lacs which was also confirmed by CIT(A); ITAT notes …………….. Click here to read and download ITAT Order
3) ITAT: Upholds addition u/s 68, mere belief not sufficient, clear finding on discharge of onus necessary - ITAT allows Revenue’s appeal, holds that since the main ingredients of Section 68 were not satisfied Revenue was correct in making an addition of Rs. 4.10 Cr.; Assessee-Company was subjected to scrutiny assessment whereby Revenue found that Assessee had received share application money amounting to Rs.4.1 Cr from two individuals and contending that identity, creditworthiness of the creditors and the genuineness of the transactions was not shown by Assessee, added the said amount, which on appeal was deleted by CIT(A); ITAT finds that during assessment Assessee submitted that out of Rs.4.10 Cr, cheques of Rs.40 lacs in Jimmy Patels account and Rs. 1.55 Cr in the account of Jayantilal Patel were received on Mar 3, 2012 but cancelled on Jun 26, 2012; It was submitted that Jimmy Patel Group is in real estate business and for a JV business with BMW had brought share application money for proposed joint venture but the negotiations failed; ITAT observes that CIT(A) held that Assessee had given adequate information in order to prove the genuineness of the transaction as well as identity of the creditors and had submitted bank statement as well as ITR of the creditors and discharged its onus sufficiently to prove their creditworthiness; ITAT notes that Section 68 does not speak about a mere belief of the Revenue in regard to the proof of the genuineness of the transaction as well as identity and creditworthiness of the creditors but must have a clear finding on this aspect; ITAT holds the ingredients of Section 68 have not been satisfied and quashes the CIT(A)’s order………….Click here to read and download ITAT Order
4) ITAT: Satisfying onus u/s 68 no shield against additions based on sham transactions - ITAT dismisses Assessee’s appeal, upholds addition u/s 68 made by treating the transactions as sham transactions and holds that Assessee does not get the benefit of satisfying onus u/ s 68; Assessee-Company engaged in the business of manufacturing of laminates sheets and for AY 2010-11 issued 102750 shares to different companies with face value of Rs. 10 and premium of Rs. 390, aggregating to Rs. 400 per share; Revenue observed that these companies were managed by Prakash Bagrecha who was also the director in all the companies and in his statement u/s 131 admitted to be engaged in providing entries; Revenue finds that on 28 May 2010, all these companies transferred the shares to one company - M/s Silicon Infrapanel Ltd. which recorded the value of the shares as investment at Rs.30 Cr. in its books and did not file its returns for AYs 2010-11 to 2013-14 as there was no activity undertaken by the company and that as per Balance Sheet of the Assessee for FY 2009-10, the FMV works out at Rs. 47 only whereas the shares have been issued at an exorbitant value of Rs. 400 per share; Revenue observed that shares issued for the year under consideration was at much higher value than the fair market value and in absence of any reply to clarify the same, Revenue treated share capital received by the Assessee as bogus and added the same to the total income of the Assessee u/s 68……….. Click here to read and download ITAT Order
5) ITAT: Holds Assessee eligible for registration u/s 12AA, where ancillary objects include construction, manufacturing etc. - ITAT allows Assessee’s appeal, holds Assessee eligible for registration u/s 12AA, since its main objectives were charitable in nature, holds that if at all certain objects are carried out, which are commercial in nature, it was for the AO to verify the same; Assessee-Company registered under Section 25 of the Companies Act, 1956 as a non-profit organization was incorporated with the main objective of conducting proactive research and investigative programmes to conserve, preserve, and enhance the integrity of the natural environment and biodiversity so as to derive sustainable benefits for the human kind from the mother nature, organise and establish Research Labs and Centres etc; Assessee applied for registration u/s 12AA, whereby CIT(E) found Assessee’s ancillary objects to be commercial in nature, such as construction of roads, manufacturing, building etc and further that Assessee intended to carry out its activities outside India, contrary to provisions of section 11(1)(a) for which it needs to obtain a general or special order from CBDT which was not obtained, and rejected the application; ITAT observes that concept of enquiry of the Commissioner while granting registration u/s. 12AA has been ……..Click here to read and download ITAT Order
“Taxsutra Database”, a true Income-tax research tool, is an archive of over115530+ Income Tax Rulings reported across ITR, CTR, Taxman, DTR, ITD, TTJ, and ITR (Trib) and also includes recent ‘unreported handpicked rulings of SC, HC & ITAT’. It is a completely integrated service with the following features:
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