Face trial for not filing IT returns; Settlement under VSVS; TDS on purchase of software license; “Judicial forward & backward reference" and ....lots more!
We are glad to present to you the 218th edition of ‘Taxsutra Database Bulletin’, with a new feature “Judicial forward & backward reference”. This new feature aims to update readers about the judicial impact of a ruling in terms of the other rulings where it has been relied on, followed, distinguished etc. Every issue of the Database Bulletin will contain 10 rulings with judicial forward & backward references along with updates of current trends in the tax arena!
2) CIT v. Ghanshyam (HUF) [2009] 315 ITR 1 (SC) distinguished in[TS-5298-HC-2020(Punjab & Haryana)-O] on interest received on compensation or enhanced compensation
3) RICHA GLOBAL EXPORTS PVT. LTD [2012] 54 SOT 185 (Delhi) Assessee`s appeal admitted by Delhi HC in as reported in [TS-5987-HC-2013(Delhi)-O]on Whether surcharge and education cess eligible for MAT credit u/s 115JAA?
4) GARG DYEING & PROCESSING INDUSTRIES vs ACIT (2013) 212 TAXMAN 0160 (DELHI) followed in[TS-6344-ITAT-2020(DELHI)-O] on income from composite letting of property, furniture etc.. should be assessed as income from other sources or income from house property
5) Kishanchand Chellaram vs CIT (1980) 125 ITR 0713 (SC) & Andaman Timber Industries vs CCE (2015) 127 DTR 241 (SC) relied in[TS-6370-ITAT-2020(DELHI)-O] on right of cross-examine.
6) (2002) 174 CTR 0090 (Guj) followed in, [TS-6628-ITAT-2015(Mumbai)-O] Relied in[TS-6628-ITAT-2015(Mumbai)-O] on invokes 5th proviso to Sec.32(1) and also refer recent Karnataka HC ruling [TS-523-HC-2020(KAR)] HC allows depreciation on 'revalued' intangibles to successor-company, rejects invocation of Sec.32(1) proviso
7) Umicore Finance Luxmeborg (2010) 36 DTR 0249 (AAR) approved in [TS-6127-HC-2016(Bombay)-O] on conversion of a partnership firm to a private limited company
9) TRF Ltd (2010) 35 DTR 0156 (SC) distinguish in[TS-6411-ITAT-2017(MUMBAI)-O] on written off the bad debt as irrecoverable in accounts
10) Virmani Industries Pvt. Ltd (1995) 83 TAXMAN 0343 (SC) followed in[TS-5551-HC-2020(BOMBAY)-O] on carry forward of depreciation of the following previous year.
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Key Takeaways from Handpicked Rulings
1) HC: Settlement under VSVS is to be considered on the basis of the rectified assessment order – HC allows petitioner writ, directs the competent authority officiating on behalf of Principal Commissioner Income Tax to rectify and pass appropriate order with reference to the petitioner’s claim for One Time Settlement under Vivad Se Vishwas Scheme [VSVS] strictly in accordance with the terms of Circular No.9/2020 dated 22.04.2020; Assessee submitted before the HC that as per Circular, several guidelines are issued with reference to the manner in which the assessment is required to be completed under VSVS; HC observes that as per the records there was an error while passing the assessment order for the relevant period, which is subsequently rectified vide order dated 18.03.2020 by the Assessing Officer.........Click here to read and download HC order
2) HC: Face trial for not filing IT returns, it was obligatory on the part of the petitioner to file ROI and then claim exemption u/s. 54F - HC rejects assessee’s writ to quash prosecution proceedings u/s 276CC, grants liberty to raise all the grounds before the trial Court; Notes that Revenue has filed a complaint against the petitioner for the offence u/s 276CC under the IT ACT, alleging that the petitioner has not filed return of income [ROI] against income from sale of property and even after the Revenue issued two notices, calling upon the petitioner to file her ROI, the petitioner failed to file the ROI and hence, a show cause notice was issued on 29.04.2016 and upon receipt of the same the petitioner submitted her return stating that she had reinvested the entire sale consideration in a residential property and therefore, the income was exempted from tax u/s 54F and there was no taxable income..........Click here to read and download HC Judgment
Note: SC in [TS-43-SC-2014-O] lays down law on criminal proceedings for non-filing of tax return and interprets scope of Sec 276CC and its proviso, says benefit of proviso available only on 'voluntary filing' and not after detection of failure to file return; Recently Madras HC in [TS-5064-HC-2020(Madras)-O] quashes prosecution initiation, held that failure to pay self-assessment tax along with returns, no 'offence' for purpose of prosecution u/s 276C.
3) SC: Issue of notice on same issue as examined in original assessment proceedings is change of opinion and hence, without jurisdiction - SC rules in assessee`s favour, notes that as per the record certain queries were raised by the AO during the assessment proceedings which were responded by the Assessee and after considering said responses, the assessment order was passed by the AO.........Click here to read and download SC judgment
4) ITAT: MCI Regulations applicable only for medical practitioners and not for pharmaceutical companies, holds that pharma company’s 'freebies' to doctors allowable deduction u/s 37 - Notes that MCI Regulations are applicable only to the doctors/medical practitioners and not to pharmaceutical companies; Therefore, the MCI Regulations cannot be brought into play to invoke Explanation to section 37(1) of the Act for disallowing expenditure claimed by the assessee.........Click here to read and download ITAT order
Note: In [TS-5878-HC-2010(PUNJAB & HARYANA)-O] HC held that commission paid by Diagnostic Centre to private Doctors for referring patients for diagnosis not allowed as business expenses.
5) ITAT:Liability to deduct tax at source cannot be fastened on the basis of retrospective amendment to the Act or a subsequent ruling of a Court - ITAT quashes order u/s.201(1) holding as assessee-in-default for failure to deduct TDS on purchase of software license from non-resident for AY 2010-11; Follows co-ordinate ITAT bench ruling wherein it was held that 'assessee’ was not in default for TDS non-deduction on software purchase........Clickhere to read and download ITAT order
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About Taxsutra Database!
“Taxsutra Database”, a true Income-tax research tool, is an archive of over109400+ 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:
· Comprehensive coverage of all latest cases powered by an advanced search engine to provide a seamless user experience;
· Effective search results supported by active filters around Court Level, Location, Case Numbers and Citation;
· Enhanced search feature, using the Unique Bulls Eye Application, by including "Exact words", "Any of these", "none of these" options.
· Judicial “forward & backward reference”
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