We are glad to present to you the 221st 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!
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Judicial forward & backward reference
1) Vembu Vaidyanathan (2019) 176 DTR 446 (Bombay) affirmed in, [TS-5198-SC-2019-O] on date of allotment for determining holding period of the property.
2) GULSHAN MALIK (2014) 102 DTR 354 (DELHI) affirmed in, [TS-5072-SC-2015-O] on “Booking rights” in flat shall be treated as acquired upon execution of buyer’s agreement with builder.
3) Reliance Petroproducts Pvt. Ltd. [2010] 322 ITR 158 (SC) relied in[TS-5185-HC-2020(BOMBAY)-O] on wrong claim is not at par with concealment.
4) Sudha Prasad [2005] 275 ITR 135 (Jharkhand) distinguished in, [TS-5232-HC-2020(DELHI)-O] on statutory obligation on legal heirs
5) Magadh Stock Exchange Association Patna HC followed Exide Industries [TS-5031-SC-2020-O], Clause (f) of Sec 43B, stands affirmed by SC
6) Foundation of Ophthalmic and Optometry Research Education Centre [2013] 355 ITR 361 (Delhi) affirmed in[TS-5037-SC-2020-O] on registration u/s.12AA subject to CIT's satisfaction of charitable 'objects'
7) P. M. S. Diesels v. CIT [2015] 374 ITR 562 (P&H) approved in[TS-5097-SC-2020-O] on Sec 40(a)(ia) disallowance for TDS default
8) Gujarat Narmada Valley Fertilizer and Chemicals Ltd. [2019] 416 ITR 144 (Guj) followed in[TS-6191-HC-2019(GUJARAT)-O] on Capital or revenue expenditure - Replacement of components of machinery
9) United Electrical Co. P. Ltd. v. CIT [2002] 258 ITR 317 (Delhi) relied on[TS-5539-HC-2020(Madras)-O] on Notice u/s 148, reopening the assessment
10) Jagran Prakashan Ltd. v. Deputy CIT (TDS) [2012] 345 ITR 288 (All) distinguished in[TS-5501-HC-2020(KERALA)-O] on proviso to Section 201, defaulted in deducting tax at the time of payment of interest
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Key Takeaways from Handpicked Rulings
1) HC: Time period of six months for filing rectification applications is from the date of passing the order u/s 245D and not from its date of receipt - HC dismisses assessee writ, holds that Section 245D(6B) creates an embargo on making an application for rectification after expiry of six months from the end of the month in which an order was passed; Notes that the order u/s 245D(4) was passed by the Settlement Commission on 28.11.2016; Thus, six months from the end of the month in which the order ..........Click here to read and download HC Judgment
2) ITAT: Accepts taxpayer's computation of cost inflation of asset from the date of allotment, not date of issue of possession certificate - ITAT rules in favour of assessee, reverses CIT(A) order, directs AO to consider the date of allotment of property i.e. 20.5.1986 for the purpose of determining the cost of inflation of the assets, while computing the cost of acquisition of property in terms of section 49; Notes that SC judgement relied by CIT(A) in the case Balbir Singh Maini have no application and it was delivered on different context with reference to Section 2(47)(v), taxability of capital gain on entering into a Joint Development Agreement (JDA); ITAT observes that it is not necessary that to constitute a capital asset the assessee must be the owner .............Click here to read and download ITAT Order
3) ITAT: Provisions of section 56(2)(vii) not applicable to plots of lands held as stock-in-trade - ITAT holds that stock-in-trade falls in the exclusion clause of the definition of ‘capital asset’ provided under section 2(14); Notes that the term ‘capital asset’ has been defined in section 2(14) of the IT Act and as per clause (a) of section 2(14) any stock-in-trade, consumable stores or raw material held for the purpose of business or profession is excluded from the definition of ‘capital asset’; Clarifies that once the properties in question did not fall in the definition ........ Click here to read and download ITAT Order
4) ITAT: Provisions of section 194-I not applicable when rent paid separately to each co-owner who have entered into a joint partnership agreement - ITAT holds that assessee should not be treated as assessee in default for short deduction of tax on rent payment to M/s. Sadhana Enterprises since the assessee has rightly deducted, collected and paid the tax on share of the rent paid to each of the co-owners; Notes that under a "Joint partnership agreement scheme" between the assessee and Sadhana Enterprises (Co-owners), rent of Rs.32,61,989/- was paid during the year and the payment was not made to .............Click here to read and download ITAT order
5) ITAT: Time limit for passing an order u/s 201(1) is two years from end of financial year in which statement of tax deducted at source filed - ITAT rules in favour of assessee, follows [TS-5170-HC-2016(Gujarat)-O] wherein it has been held that prior to section 201 was amended by Finance Act No. 2 of 2009, no time limit was provided for passing a order u/s 201(1). W.e.f. 01.04.2010 the time limit was provided that such order shall be passed within the two years from the end of the ...............Click here to read and download ITAT order
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Expert Column
Deduction u/s 80JJAA is a Game changer since Budget 2016 as the amended law is with a view to encourage employment generation.
Author CA Sunil Maloo (Managing Partner, Sunil Maloo & Co.) highlights that the benefit u/s. 80JJAA is an additional deduction of 30% of additional employee cost incurred in the previous year, for three AYs and a total Benefit of 90% including the relevant AY to the previous year in which such employment is provided. The author brings out certain differences pre and post benefit available in 2016 such as the fact that before 2016, benefit was available only if there is an increase of at least 10% in total number of workmen, which now stands removed. The author then discusses the applicability criteria and thereafter discusses definitions of key words such as Additional Employee Cost, Additional Employee Emoluments etc. The author signs off by stating that since Section 80JJAA has many technical conditions to be complied with, an attempt is made to decode the same in simple manner.
Click here to readarticle titled - “Tax Benefits on Employment Generation” - Deduction u/s 80JJAA – A must take incentive
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About Taxsutra Database!
“Taxsutra Database”, a true Income-tax research tool, is an archive of over110070+ 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;
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· 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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Author CA Sunil Maloo (Managing Partner, Sunil Maloo & Co.) highlights that the benefit u/s. 80JJAA is an additional deduction of 30% of additional employee cost incurred in the previous year, for three AYs and a total Benefit of 90% including the relevant AY to the previous year in which such employment is provided. The author brings out certain differences pre and post benefit available in 2016 such as the fact that before 2016, benefit was available only if there is an increase of at least 10% in total number of workmen, which now stands removed. The author then discusses the applicability criteria and thereafter discusses definitions of key words such as Additional Employee Cost, Additional Employee Emoluments etc. The author signs off by stating that since Section 80JJAA has many technical conditions to be complied with, an attempt is made to decode the same in simple manner.