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2021-11-26
Issue No. 250 / November 26th, 2021
Dear Professionals,
We are glad to present to you the 250th edition of ‘Taxsutra Database Bulletin’, where we keep you updated with current trends in the tax arena!
Status of Journals Updated
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ITR Vol 438 PART 4
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Dated 8th Nov 2021
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ITR-Trib Vol 91 Issue 5
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Dated 1st Nov 2021
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CTR Vol. 322 Issue 43
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Dated 12th Nov 2021
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DTR Vol 206 Issue 197
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Dated 28th Oct 2021
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TAXMAN Vol. 282 Part 6
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Dated 06th Nov 2021
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ITD Vol.191 Issue 2
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Dated 10th Nov 2021
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TTJ Vol. 213 Issue 43
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Dated 09th Nov 2021
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Expert Column
The term “Assessment” under the Income-tax law covers a wide range of functions depending on the nature of assessment to be carried out, and the specific provisions in law governing the same.
CA Dindayal Dhandaria in his article covers implications wherein assessments are required to be partially modified or required to be made de novo. He examines the meaning of “quashing”, “setting aside” and “annulled” as directed by various courts in the context of assessments, in the light of various judicial precedents. He opines that there exists an erroneous view that an Assessing Officer can make a fresh assessment whenever an assessment order is set aside irrespective of the fact whether the concerned Authority has permitted him to do so or not and states that if such a view is upheld, the words “in pursuance of an order” appearing in Section 153(3) would become otiose.
He further expounds on the issue in the context of recent rulings in faceless assessments, analysing certain judicial precedents related to it, and concludes stating that even in circumstances where the Judicial authority directs the Revenue to make a fresh assessment, the same cannot be done in absence of an enabling provision in the Act.
Click here to read an article titled, “Assessments: T20 or Test Match?”
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Key Takeaways from Handpicked Rulings
1) ITAT: MCI regulations on ‘freebies’ inapplicable to pharma companies, allows deduction u/s 37(1) - ITAT allows Assessee’s appeal, holds CBDT cannot issue circulars enlarging scope of MCI regulations to pharmaceutical industry; Assessee-Company’s case was selected for scrutiny for AY 2015-16 whereby Revenue observed it claimed deduction of certain expenses in violation of CBDT Circular No. 5/2012, based on Medical Council of India’s notification of amendment of Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations 2002, and held such expenses as inadmissible u/s 37(1) which were upheld by the CIT(A); ITAT refers to the coordinate bench ruling in Aristo Pharmaceuticals Pvt. ltd. wherein it was held that as per Indian Medical Council Act, 1956 the scope of misconduct was restricted only to persons registered as medical practitioners under it, and it did not regulate pharmaceutical companies or allied health sector industries; ITAT observes that Aristo Pharma ruling also relied on Pitampura v. Medical Council of India wherein it was concluded that even if Assessee had incurred expenditure on distribution of "freebies" to doctors and medical practitioners, since the Indian Medical Council (Professional Conduct, Etiquette and Ethics) regulations, 2002 only regulates the code of conduct of the medical practitioners, there was no prohibition on pharma companies incurring expenses on sales promotion and ………………..Click here to read and download ITAT Order
2) HC: Directs TDS refund on compensation for acquisition of agricultural land - HC directs Revenue to refund Rs. 26,984 along with applicable interest, deducted as tax at source on the compensation paid on acquisition of Assessee’s agricultural land by the Special Land Acquisition Officer; Assessee was paid compensation of Rs.2.61 lacs for acquisition of its agricultural land and on issue of Form 16A was made aware of TDS on compensation amount; HC refers to Division Bench ruling in Shamrao Sitaram Adhe where it was held that the compensation received on account of acquisition of agricultural land was not assessable to income tax and the petitioners being poor farmers should not be required to engage services of Chartered Accountants to recover an amount to which they are entitled by law; HC also refers to the Division Bench ruling in Urmila Sanjay Pawar wherein amount deducted by the Special Land Acquisition Officer as T.D.S. on the compensation amount shown in the award, was directed to be returned with interest at the rate of 15 % p.a.; HC observes that there cannot be TDS on compensation paid for ……………Click here to read and download HC Judgment copy
3) HC: TDS deducted but not remitted by deductor, not recoverable from deductee; Allows TDS credit – HC allows writ petition filed by an assessee-individual against outstanding demand as reflected on IT Portal. HC holds that the IT Department cannot deny the TDS credit of tax deducted at source by the employer of the petitioner during the relevant financial years. The petitioner- an employee of M/s. Kingfisher Airlines filed the return of income for the AYs 2009-10 and 2011-12 and claimed the TDS of Rs. 7,20,100/- and Rs. 8,70,757/- respectively as the tax paid in advance. The amount since had not been deposited by the employer-Airlines in the Central Government Account, the TDS credit when claimed by the petitioner, the same was denied by the respondent and the demand had been raised with interest. …………………. Click here to read and download HC Judgment copy
Editorial Note: Click here to read an Expert Column, "Taxes Deducted but not Deposited by the Deductor - Unravelling the Conundrum"
4) ITAT: Quashes assessment u/s 153A sans incriminating material, non-adherence to Sec.153D - ITAT allows Assessee’s appeal, holds additions towards share capital and share premium not tenable in a post-search assessment sans incriminating material; Assessee-Company was subjected to a search and in subsequent assessment proceedings, Revenue made additions by a consolidated order u/s 153A on account of share premium and payment of commissions on such share premium, opining that appropriate response was not received from the investor companies which were confirmed by the CIT(A); ITAT on perusal of the panchnama finds that no incriminating evidence qua the share application money was found and recorded and also that the statement of Director recorded by the Revenue was later retracted from by an affidavit sworn before SDM; ITAT opines that addition in the unabated assessment can only be made on the basis of incriminating material found during the search and notes that in response to SCN, Assessee had stated there is no incriminating evidences for making the said additions and then Revenue passed assessment order and placed it before JCIT for it approval; ITAT finds there is no consideration of material facts by Revenue w.r.t. Assessee’s reply in response to SCN ………….Click here to read and download ITAT Order
5) HC: Allows 30% depreciation on commercially run vehicles; Follows rule of consistency - HC dismisses Revenue’s appeal, relies on SC ruling in Radhasoami Satsang to allow Assessee’s claim for depreciation; Assessee filed return of income for AY 2005-06 declaring total income of Rs. 17.60 lacs, whereas assessed income was at Rs. 87.66 lacs, was subsequently subjected to revision proceedings wherein the PCIT held the assessment order was erroneous and prejudicial to the interest of Revenue and directed fresh orders to be passed for Assessee’s claim for depreciation to the extent of 30% on lorries, loaders etc; On appeal, CIT(A) allowed Assessee’s claim and appeal was filed by Revenue as well as cross objection by Assessee were dismissed by the Tribunal; Before HC, Revenue submitted that Assessees main activity was stevedoring and commission and forwarding agency and transporting of goods via its own vehicle or on hire and therefore in respect of such business rate of depreciation would be 15%; It was also submitted that ITAT placed reliance on Assessees case in previous AYs but res judicata was not applicable to taxation as each claim is independently adjudicated as per AY and placed reliance on CBDT Circular No. 609 and 652 as well as ……………….Click here to read and download HC Judgment
6) ITAT: Assessment u/s 153A not permissible for concluded assessments in absence of incriminating material - ITAT dismisses Revenue’s appeal, holds that since no incriminating material was found assessment u/s 153A was vitiated for assessments completed in AYs 2006-07 to 2009-10; Assessee was subjected to search and notice u/s 153A was issued, to which Assessee responded and filed return of income and assessments were framed u/s 143(3) r/w Sec. 153A for A.Ys. 2006-07 to 2011-12 whereas the assessment order for A.Y. 2012-13 was passed u/s 143(3); Revenue noticed credits in respect of share application money of Rs. 5.08 Cr. did not fulfil requirements of Section 68 and that Assessee failed to prove genuineness of applicants; It was observed that Assessee had unaccounted sales and accordingly addition of Rs.1.05 Cr was made on account of difference in production while framing the assessment order for AY 2006-07 and similar additions towards low yields were made towards low yields in other assessment years, which were deleted by the CIT(A); ITAT relies on Delhi HC ruling in Meeta Gutgutia where it was held that invocation of Section 153A to reopen concluded assessments of earlier assessment years was not permissible in the absence of incriminating material found during search qua each such earlier assessment years; ITAT notes that…………………Click here to read and download ITAT Order
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