Database NewsLetters

Taxsutra Database Bulletin : Deemed dividend u/s. 2(22)(e) on business transactions, TCS on Tahbazari-Lease or license of toll plaza; CBDT Updates and more ...!

Issue No. 153/ Oct 3rd, 2018

Key Takeaways from Handpicked rulings

1. [TS-8277-ITAT-2018(VISAKHAPATNAM)-O] : Applicability of deemed dividend u/s. 2(22)(e) to business transactions : Business transactions do not attract the rigor of deemed dividend u/s. 2(22)(e) - ITAT dismisses Revenue’s appeal that the transaction of issue of cheques by one company for purchase of land that were registered in the name of its sister concern, having common shareholders, with substantial interest, is taxable as deemed dividend u/s. 2(22)(e); Upholds CIT(A)’s finding that the transaction is purely business and trade transaction and beyond the purview of the deemed dividend u/s 2(22)(e);

Click here to read the Ruling Copy

2. [TS-7569-ITAT-2018(AHMEDABAD)-O]: Filing of TDS statements-Validity of Sec. 234E prior to June 2015 : Sec. 234E is a charging provision creating a charge for levying fee for defaults in filing the statements, fees prescribed u/s. 234E could be levied even without a regulatory provision of sec. 200A for computation of fees - Ahmedabad ITAT upholds order u/s. 154 dt. Sept 3, 2014 levying late filing fees of TDS statements u/s. 234E for AYs 2013-14 to 2015-16; Rejects assessee's stand that there was no enabling provision in law prior to first June, 2015 for raising a demand in respect of fees u/s. 234E; Follows Jurisdictional HC in the case of Rajesh Kourani [TS-5895-HC-2017(Gujarat)-O]

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3. [TS-6828-HC-2018(ALLAHABAD)-O] : TCS on Tahbazari - Lease or license of toll plaza : Tahbazari is not a toll; License to collect the same is not covered u/s. 206(1C), not liable to TCS provisions - HC reverses ITAT order, rules in favour of assessee; Refers to Sec. 206C(1C) which provides for collection of tax at source along with lease rentals, by a person who grants license or lease, any parking lot or toll plaza or mine or quarry, from the lessee and notes that “Tahbazari is not an item which is provided under this Section for collecting TCS. If a licence or lease is issued in favour of any other person for collecting the Tahbazari, it cannot be said that lessee is collecting toll on such licence or lease”; Tahbazari is collected by persons authorised/licensed by assessee (Apar Mukhya Adhikari, constituted under the UP Kshettra Panchayats and Zila Panchayats Adhiniyam) in order to regulate its functions

Click here to read the Ruling Copy

4. [TS-5401-SC-2018-O] : Share trading – business income vs capital gains : Gains from trading of only 10 scrips, without frequent buying and selling for quick money is not business income - SC dismisses Revenue’s SLP against HC order wherein HC had confirmed ITAT and CIT(A) order and had held income derived from the sale of shares to be short term capital income; HC noted CIT(A)’s observation that only 10 scripts are traded and it was not a case of the repeated sale of the same script nor was it a case of frequent buying and selling to make quick money;

Click here to read the Ruling Copy

5. [TS-5404-SC-2018-O] : Tax on notional interest on NPAs : When an asset becomes non-performing, it ceases to yield income and no notional interest accrues that is liable to tax, even if the assessee is following mercantile system of accounting - SC dismisses Revenue’s SLP against HC ruling; HC had in its order rejected Revenue’s contention that even though NPAs do not yield any income, assessee has to pay tax on the revenue which has accrued notionally as it has adopted mercantile system of accounting; It followed coordinate bench decisions in Shri Siddeshwar Co-Operative Bank Limited [TS-5341-HC-2016(Karnataka)-O] and Canfin Homes Limited [TS-5497-HC-2011(Karnataka)-O] wherein it was held that “ Once a particular asset is shown to be a non-performing asset, then the assumption is it is not yielding any revenue. When it is not yielding any revenue, the question of showing that revenue and paying tax would not arise.”

Click here to read the Ruling Copy

6. [TS-5405-SC-2018-O] : Amendment to Section 40(a)(ia) by the Finance Act, 2010 with retrospective effect from 1st April 2005 : Amendment to Sec.40(a)(ia) by the Finance Act, 2010 is only an amendment in continuation of the earlier amendment made in the Finance Bill, 2008 with retrospective effect from 01.04.2005 - SC dismisses Revenue’s SLP against HC order wherein HC had deleted the disallowance made u/s. 40(a)(ia) by ITAT following HC decisions in CIT vs Harish Chand Ahuja [TS-6167-HC-2014(Rajasthan)-O], Piu Ghosh vs Dy CIT [TS-5593-HC-2016(Calcutta)-O].

Click here to read the Ruling Copy

CBDT Updates

1. CBDT notifies ‘Petroleum and Natural Gas Regulatory Board’, New Delhi, as a Board for purpose of exemption u/s. 10(46) - Notification No. 45/2018

2. CBDT notifies ‘Kandla Special Economic Zone Authority’, Kutch, as a body for purpose of exemption u/s. 10(46) - Notification No. 47/2018

3. CBDT notifies ‘Gujarat Water Supply and Sewerage Board’, Gandhinagar, as a Board for purpose of exemption u/s. 10(46) - Notification No. 48/2018

4. CBDT notifies ‘Tripura Electricity Regulatory Commission’, as a commission for purpose of exemption u/s. 10(46) - Notification No. 49/2018

5. CBDT notifies ‘M/s Indian Council of Medical Research’ as an approved organisation for the purpose of clause (ii) of sub-section (1) of section 35 - Notification No. 54/2018

6. CBDT notifies Ex-Servicemen Contributory Health Scheme of the Department of Ex-Servicemen Welfare, Ministry of Defence for purpose of deduction under clause (a) of sub section (2) of section 80D - Notification No. 55/2018

7. CBDT notifies ‘Chhattisgarh State Electricity Regulatory Commission’, Raipur, as a commission for purpose of exemption u/s. 10(46) - Notification No. 56/2018

8. CBDT notifies ‘Uttarakhand Real Estate Regulatory Authority’, Dehradun, as an authority for purpose of exemption u/s. 10(46) - Notification No. 57/2018

9. CBDT notifies ‘Tamil Nadu Pollution Control board’, as a Board for purpose of exemption u/s. 10(46) - Notification No. 58/2018

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Taxsutra Database Bulletin : LTCG exemption u/s 10(38) on share sale with 3000+% profits; Deduction u/s. 80IB(10) - unutilised FSI; CBDT Updates and more...!

Issue No. 151 / Sept 24th, 2018

Key Takeaways from Handpicked rulings

1. [TS-8147-ITAT-2018(CHANDIGARH)-O] : Denial of exemption on share sale with extraordinary profits : ITAT denies LTCG exemption u/s. 10(38) on share sale with 3000+% profits in absence of proof of genuineness of transaction - ITAT dismisses assesssee’s appeal for AY 2011-12, denies LTCG exemption u/s. 10(38) claimed by assessee on share sale; Observes that the assessee has failed to establish that the genuineness of purchase and sale transactions of shares of a non-descript, small company which earned him a gain of 3072% profit within a period of 17 months; States that “This cannot be a case of intelligent investment or a simple case of tax planning to gain benefit of long term capital gains…..The earnings @ 3072% over a period of 17 months breaks the ceiling of any record of return on investment which is beyond the human probability and beyond the business logics of any enterprise.”;

Click here to read the Ruling Copy

2. [TS-8206-ITAT-2018(Kolkata)-O] : Relevant date of ‘transfer’ for exemption u/s. 54 : Date of sale, not date of registration to be reckoned for granting exemption u/s. 54 - ITAT grants exemption u/s. 54 based on the unregistered sale deed, entered into within one year after to date of purchase of a new flat, states that “an unregistered agreement to sell cannot be looked into for seeking benefit of part performance u/s. 53A of Transfer of property Act….however, an unregistered agreement to sell can always be a basis for a suit for specific performance in view of sec. 49 of Registration Act”;

Click here to read the Ruling Copy

3. [TS-8178-ITAT-2018(Delhi)-O] : Penalty - search before return filing due date: Penalty under Expln. 5A of Sec. 271(1)(c) not leviable when search is conducted before due date of filing return of income and the assessee has not furnished the return as on the search date - ITAT quashes CIT(A)'s penalty order u/s. 271(1)(c) for non-filing of return u/s. 139 for AY 2014-15, Holds that "the deeming provisions of Explanation 5A cannot be applied because at the time of search for the relevant previous year under appeal, the due date of filing of the return of income had not expired"; Notes that assessee has correctly filed return of income on 31.8.2016 in response to notice u/s. 153A as pursuant to search conducted on 16.10.2014, all assessments for the year under appeal stood abated; Accepts assessee's argument that since due date of filing of the return u/s. 139 has not expired on the date of the search, assessee could not have filed the return of income u/s. 139 and as per law, assessee was required to file return of income u/s. 153A only;

Click here to read the Ruling Copy

4. [TS-6808-HC-2018(Gujarat)-O] : Underutilisation of FSI : Deduction u/s. 80IB(10) is allowable only to the extent of permissible FSI that is utilised for construction of houses - HC allows Revenue's appeal, restricts deduction u/s.80IB(10) to the extent of utilised permissible FSI and disallows deduction claimed towards the unutilised FSI; Notes that assessee's eligibility for deduction u/s. 80IB(10) was not disputed, however, in each of the projects, the assessee had utilized about 20% or less of the permissible FSI; Relies on coordinate bench decision in case of Moon Star Developers [TS-196-HC-2014(GUJ)-O]

Click here to read the Ruling Copy

5. [TS-8159-ITAT-2018(Delhi)-O] : Taxability in shareholder’s hands - Deemed dividend u/s. 2(22)(e) : Deemed Dividend taxable in the hands of the shareholder, not the borrower - ITAT deletes deemed dividend addition u/s. 2(22)(e) arising from a loan transaction between two subsidiaries with a common holding company (assessee being the borrower); Holds that though the amount borrowed amounts to “deemed dividend” u/s. 2(22)(e), it is to be taxed in the hands of the shareholder and not the borrower;

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6. [TS-6820-HC-2018(Karnataka)-O] : Coercive tax recovery : AO not entitled to recover the entire tax after passing of order by CIT(A), before completion of the statutory time limit to file an appeal against the said order of CIT(A) - HC allows assessee's writ, orders refund of about Rs. 15 crores recovered from the bank account of the assessee within one week of receipt of its order; Holds that the AO has acted beyond the scope of the provision of the Act in high handed manner and recovered the amount in excess of prescribed minimum limit which is required to be deposited by the assessee while challenging the order of CIT(A);

Click here to read the Ruling Copy

CBDT Updates:

https://ci5.googleusercontent.com/proxy/cICQffTpQFTthn9CGLXCqLTzFer_Z4qyAIy5uUxuIWkIFdHxPkHeZ2egMZDwjgyfoEtqCU8vTxYfAyNrQYwGDp9hWUY=s0-d-e1-ft#https://ymlpsend3.com/imgz/f33j_unnamed--10.jpg

1. CBDT clarifies treatment of telecommunication, freight, etc. for Sec 10A purpose following HCL ruling - Circular No. 4/2018

2. CBDT clarifies on immunity provided u/s. 270AA from penalty / prosecution - Circular No. 5/2018

3. CBDT: Defers GAAR & GST reporting under amended Tax Audit Form till March 31, 2019 - Circular No. 6/2018

4. CBDT notifies ‘Uttar Pradesh Electricity Regulatory Commission’, Lucknow, as a commission for purpose of exemption u/s. 10(46) - Notification No. 44/2018

5. CBDT notifies ‘Rajasthan State Dental Council’, Jaipur, as a body for purpose of exemption u/s. 10(46) - Notification No. 46/2018

6. CBDT notifies ‘West Bengal State Council of Science & Technology’, Kolkata, as a society for purpose of exemption u/s. 10(46) - Notification No. 50/2018

7. CBDT notifies ‘Jharkhand State Electricity Regulatory Commission’, Ranchi, as a commission for purpose of exemption u/s. 10(46) - Notification No. 51/2018

8. CBDT notifies ‘Tamil Nadu Water Supply and Drainage Board’, as a board for purpose of exemption u/s. 10(46) - Notification No. 52/2018

9. CBDT notifies State Load Despatch Centre Unscheduled Interchange Fund- West Bengal State Electricity Transmission Company Limited, as a trust for purpose of exemption u/s. 10(46) - Notification No. 53/2018

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Taxsutra Database Bulletin : Cash consideration for property purchase, ‘Net consideration’ u/s. 54F where Sec 50C applies; CBDT Updates and other handpicked rulings...

Issue No. 150 / Sept 11th, 2018

Key Takeaways from Handpicked rulings

1. [TS-8135-ITAT-2018(Lucknow)-O] : ‘Net consideration’ u/s. 54F where Sec 50C applies: The ‘net consideration’ u/s. 54F is the actual consideration received by the assessee and not net consideration as determined under section 50C based on the stamp duty authority valuation; Provisions of section 50C can only be applied to the extent of computation of capital gains u/s. 48 and cannot be extended to Sec. 54F - ITAT allows exemption u/s. 54F to assessee for having invested the entire sum received on sale of 2 plots in a residential house, in conformity with the provisions of Sec. 54(1)(a); Deletes addition made by AO, sustained by CIT(A), made on the ground that the value u/s. 50C as determined by the DVO is higher than the sale consideration received by the assessee; Citing Doctrine of impossibility of performance, states that “Assessee cannot be expected to do more than whatever he has received; meaning thereby, assessee can invest that amount only which he has actually physically received from transfer of long term capital asset other than residential house as provided under section 54F of the Act.”;

Click here to read the Ruling Copy

2. [TS-8115-ITAT-2018(Delhi)-O] : Appeal before CIT(A) cannot be withdrawn: Assessee’s quantum appeal before ITAT having been allowed and re-assessment order been quashed, CIT(A) should have cancelled the penalty order appealed before him instead of dismissing the appeal as ‘withdrawn’; Assessee having once filed an appeal cannot withdraw it - ITAT accepts and allows assessee’s appeal against CIT(A) order dismissing assessee’s appeal as withdrawn; Holds that “...there were no justification for Ld. CIT(A) to dismiss the appeal of assessee-company as withdrawn because it is well settled Law that assessee-company having once filed an appeal cannot withdraw it.”; Notes that the assessee made a mistake by filing a letter for withdrawal of appeal pursuant to quashing of the re-assessment order by ITAT and deletion of addition therein and holds that CIT(A) should not have allowed withdrawal of the appeal by the assessee’s counsel and was required by law to follow the order of the Tribunal to do substantial justice between the parties;

Click here to read the Ruling Copy

Editorial Note: Bombay HC in the case of Jagmohandas Gokaldas [TS-5068-HC-1963(Bombay)-O] had held that though an appellant cannot as a matter of right claim to withdraw an appeal, but there is nothing illegal in doing so with the permission of the appellate authority

3. [TS-7842-ITAT-2018(Bangalore)-O] : Time limit for filing a miscellaneous petition : An amendment in a procedural statute, if it affects the vested rights adversely, has to be construed as prospective - ITAT allows assessee's Miscellaneous Application (MA) for AY 2008-09 filed after 3 years of passing the original order (passed ex-parte), rejects objection of the Registry that the MA is time barred in view of the amendment to Sec. 254(2) vide Finance Act 2016, w.e.f. 1.4.2016 (which reduced the time limit for filing of an MA from 4 years to 6 months from the date of passing the order); Holds that "the MA though filed after 1.6.2016 will continue to be governed by the law of limitation laid down u/s.254(2) on the date when the order against which the MA is sought to be filed was passed and not law as per the law as amended by the amendment w.e.f. 1.6.2016";

Click here to read the Ruling Copy

4. [TS-8134-ITAT-2018(Delhi)-O] : Cash consideration for property purchase / Unexplained investment : Assessee is liable to explain the source of investment made in cash to purchase a property - ITAT dismisses assessee’s appeal for AY 2014-15; Upholds addition of unexplained investment made in cash for purchase of property from her mother; States that "The Income Tax Department is concerned with the source of the investment in purchase of property at the end of the assessee. There is nothing wrong for the Income Tax Department to seek explanation of assessee regarding source of investment in property."; Rejects claim the assessee that the transaction was indeed one of a gift and terms it to be an afterthought;

Click here to read the Ruling Copy

CBDT Updates:

1. CBDT approves M/s. C.B.C.I. Society for Medical Education, Bengaluru for the purpose of section 35(1)(ii) and section 35(1)(iii) - Notification No. 40/2018

2. Central Government specifies “The Press Trust of India Limited, New Delhi” as a news agency set up in India solely for collection and distribution of news, for the purpose of Sec. 10(22B) - Notification No. 41/2018

3. CBDT issues notification inserting Rule 11UAB for Determination of fair market value for inventory - Notification No. 42/2018

4. CBDT amends Circular no.3/2018 specifying the monetary limits for filing of appeals by Revenue - Circular No. 3/2018

5. CBDT issues draft notification amending Rule 114 and forms for PAN application

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Taxsutra Database Bulletin : Expert Columns Analysing a Decision under the Benami law, Allowability of Education Cess and Section 94B; and CBDT Updates

Issue No. 149 / Aug 31st, 2018

Expert Column

The Tax Department is gearing up to implement the Benami Transactions (Prohibition) Act ( the Act). Ajay Mankotia (IRS (Retd.), discusses a recent order passed by an adjudicating authority under the Act for the region of Madhya Pradesh and Chattisgarh the news of which as per the author is "not good for the Tax Department’s drive against Benami transactions". In what can be termed as a strict order in applying the provisions of the Act with respect to the Tax Department, the Authority has lifted a provisional attachment of a property allegedly held by a Benamidar (a person of meagre means, for a company) stating procedural lapses in passing of the order. The authority has pointed lapses such as reference not being filed with the Authority within the statutory time limit of 15 days, lack of reasons and non-mention of the specific sections under which the provisional attachment was made. The author ponders if the Tax Department can, to protect the interests of the revenue (since the properties now stand unattached and can be alienated), provisionally attach the property again, this time scrupulously following proper procedure as per the Authority's order. He concludes stating that the deficiencies pointed out by the Authority will certainly be taken care of by the Benami Prohibition Units (BPUs) hereinafter so that technical issues do not derail the substantive case that the BPUs build-up.

Click here to read the article titled “An analysis of a recent decision lifting Provisional Attachment under the Benami Act ”

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Following the mandate u/s. 40(a)(ii) which does not allow income-tax as an expenditure, taxpayers have as a practice, been disallowing income-tax along with surcharge and education cess. Abbas Joarawala (Chartered Accountant) analyses a recent judgment of Rajasthan HC in Chambal Fertilizers & Chemicals [TS-6741-HC-2018(Rajasthan)-O] which held that 'education cess' is not a 'tax' as envisaged under section 40(a)(ii) of the Act and hence, should not be disallowed from taxable business profits / income. Author points out that in rendering the judgment, HC has not considered SC decision in Smith Kline & French and Bombay and Goa HC decisions in Lubrizol India and Sesa Goa wherein it was held that education cess is not a fee but is a tax which is disallowable u/s. 40(a)(ii). He ponders if an argument can be made that even the 'surcharge' on income-tax should not be disallowed u/s. 40(a)(ii) considering that the Finance Act states that 'education cess' is in the nature of an additional surcharge. Further, the author states that the settled position that the term 'tax' in India's tax treaties includes 'education cess' should not be impacted by this judgment.

Click here to read the article titled “'Education Cess' on income-tax - Is it an allowable business expenditure?”

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The Finance Act 2017 introduced Sec. 94B in the Indian income tax law, in line with BEPS Action Plan 4, to overcome loss of revenue caused by thin capitalisation, by way of paying excess interest to non-resident lenders (particularly AEs). Authors CA Shweta Gupta (Partner, SGPM & Associates), CA Gaurav Garg and CA Arushi Jain explore critical aspects of the section and their impact on foreign investments in India. They highlight that unlike in case of loans taken directly from AEs wherein excess interest paid only to non-residents is disallowed, in cases of loans taken from third parties that are guaranteed or back funded by AEs, excess interest paid to both residents and non-residents is disallowed. Stating that there is no base erosion in cases of loans guaranteed by residents, and disallowing of interest in all cases of explicit guarantee is discriminatory and unreasonable, the authors point out the difficulties where there are genuine business reasons where AEs are required to grant guarantee to enable newly set up subsidiaries to avail loan. Recently, a writ petition has been filed by Seimens Gamesa Renewable Power Pvt. Ltd challenging the constitutional validity of Section 94B and seeking striking down of the proviso therein, which has been admitted by Chennai High Court.

Click here to read the article titled “Analysis of Sec. 94B limiting interest deduction”

CBDT Updates:

1. CBDT extends timeline seeking comments on 'Significant Economic Presence' threshold till September 30th

2. Press Release on Demonetisation and its impact on Tax collection and Formalisation of the Economy

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Taxsutra Database Bulletin : Decoding India`s Significant Economic Presence'; Prosecution - Limitation period for payment of compounding fees; CBDT Updates and other handpicked rulings

Issue No. 147 / Aug 22nd, 2018

Dear Professionals,

We are glad to present to you the 147th edition of ‘Orange Bulletin’ which comprises of weekly updates from tax world, where we keep you updated with recent rulings vis-a-vis their quick overview by our Orange Experts and some Landmark Rulings alongwith commentary on the respective subjects by Chaturvedi & Pithisaria’s Income Tax Law Commentary.

Expert Column:

India has introduced the concept of 'Significant Economic Presence' (SEP) for taxation of non-residents in India by amplifying the scope of the definition of "business connection" vide Finance Act, 2018. Vishal Anand (Partner, Corporate and International Tax, PWC) and Arjun Khandelwal (Director) in their article analyse the BEPS Action Plan 1 vis-a-vis the recently introduced Indian SEP. The authors articulate the global take on taxation of digital economy and state that the launch of BEPS AP 1 has accelerated the pace at which global economies are adopting ways of taxing digital businesses. Speaking of the Indian scenario before the introduction of SEP, the authors discuss certain ITAT rulings wherein fees paid for online advertisement on foreign companies' portals was held not taxable in India. Further, pointing at the interplay of SEP with Equalisation Levy (EL), authors suggest that SEP should not be applicable for transactions on which the ELis levied in line with Sec.10(50) that provides for exemption of any income that is subject to EL. The authors bring out the complexities that are likely to arise on implementation of SEP such as whether the presence of consumer base in India would be sufficient if the principle functions and risks are undertaken outside the country, what would be the attribution mechanism in the case of loss-making companies etc.

Click here to read the article titled “Decoding India's Significant Economic Presence”

Key Takeaways from Handpicked rulings

1.[TS-5657-HC-2018(ANDHRA PRADESH)-O] : Prosecution u/s 279(1) - Period of limitation for payment of the compounding fee : Compounding fee to be computed at the rate that existed on the date of filing of the application; Statute does not stipulate an inviolable period of limitation for the payment - HC dismisses assessee's plea in writ challenging the rejection of compounding application made on the ground that when there is a genuine dispute about the quantum of compounding fee payable, Revenue cannot reject the application for compounding, without resolving the dispute and prosecution sanctioned u/s. 279(1); Observes that the IT Officer issued a clarification on how the compounding fee was arrived at; Noting that assessee was granted opportunity which it did not avail, HC states that ".... the 1st respondent, realising the futility of granting opportunity, rejected the application for compounding."; Holds that the amount of compounding fee is statutorily fixed and the question of raising any dispute on the same does not arise; Notes that the CBDT Circular dt. 23/12/2014 which was relied on by the assessee for the quantum of fee, was applicable only to compounding applications filed after 01-01-2015 and was not applicable to assessee;

Click here to read the Ruling Copy

2. [TS-5611-HC-2018(Madras)-O] : Powers of High Court : Plenary powers of HC includes the power of review relating to errors apparent on the face of the record; No appeal can lie before the ITAT if the favorable order of CIT(A) is based on AO's remand report - HC reviews its order dismissing assessee's appeal against ITAT order; Rejects Revenue’s plea regarding maintainability of the Review petitions on the ground that Income Tax Act does not confer the power of Review under Section 260A(7); Refers to and relies on a host of rulings wherein it was held that High Courts in India are superior courts of record, they have original and appellate jurisdiction and they have inherent and plenary powers, unless expressly or impliedly barred and subject to the appellate or discretionary jurisdiction of the Supreme Court, the High Courts have unlimited jurisdiction;

Click here to read the Ruling Copy

3. [TS-7702-ITAT-2018(BANGALORE)-O] : Exemption u/s. 54 not claimed in ROI : Deduction u/s. 54 cannot be denied for the reason that the claim was made during appellate proceedings and not made in the ROI - ITAT allows assessee's appeal, holds that " If the assessee is entitled to deduction while computing the long term capital gain, that cannot be denied on the ground that such a claim was not before the AO."; Explains that a lawful claim of deduction cannot be denied by the revenue authorities purely on technicalities, that tax is to be levied and collected in accordance with the law; Relies on Bombay HC decision in Pruthvi Brokers & Shareholders Pvt. Ltd.[TS-463-HC-2012(BOM)-O], wherein it was held that even if a claim is not made before the AO, it can be made before the appellate authorities;

Click here to read the Ruling Copy

4. [TS-5365-SC-2018-O] : Total Turnover and Export Turnover, set off of losses for purpose of Sec. 10A : Exclusion from Export Turnover to be reduced from Total Turnover for Sec 10A; STP unit’s profits for Sec 10A relief to be computed before adjusting loss and depreciation - SC dismisses Revenue's SLP against HC order which had dismissed Revenue's appeals against ITAT order; HC had noted that the issue of whether expenses reduced from the export turnover have to be reduced from the total turnover also, was covered by coordinate bench decision in case of Tata Elxsi Ltd. [TS-5561-HC-2011(Karnataka)-O] wherein it was held that any exclusion from 'export turnover' to also be excluded from 'total turnover' for Sec 10A relief;

Click here to read the Ruling Copy of Supreme Court and High Court

5. [TS-7755-ITAT-2018(DELHI)-O] : Proceedings pending before CIT(A) & Sec. 263 revision : Issue of sales promotion expenditure to doctors, part of appellate proceedings before CIT(A), cannot be considered for revision by PCIT u/s.263 - ITAT quashes revisional order of PCIT u/s. 263, terms the approach of the PCIT 'callous' and findings devoid of application of mind; Noting that the issue raised in notice u/s. 263 viz., sales promotion expenses to doctors (prohibited by Circular No.5/12) was subject matter not only of assessment but was also a part of appellate proceedings before the CIT(A), ITAT holds that the doctrine of merger was clearly established; Clarifies that "...PCIT cannot assume jurisdiction for the issues which were subject matter of appeal before the CIT(A) and have been categorically decided by the first appellate authority";

Click here to read the Ruling Copy

6. [TS-5364-SC-2018-O] : Reassessment u/s. 147/Application of mind : SC refuses to interfere with HC order upholding IT authority's order disposing assessee's objections to reopening, as reassessment order was already passed; Directs filing of statutory appeal before CIT(A) against the reassessment order - SC dismisses assessee's SLP against HC order dismissing its writ for quashing order disposing its objections to reasons for reopening; States that " Since the reassessment is already complete and the assessing officer has passed the assessment order, we do not find any reason to interfere with the impugned order passed by the High Court"; Clarifies however that it will be open to the assessee to challenge the AO's reassessment order by filing statutory appeal challenge the correctness of notice u/s. 147/148 and the appellate authority may go into the said question uninfluenced by the HC observations;

Click here to read the Ruling Copy of Supreme Court and High Court

Updates:

1. CBDT clarifies treatment of telecommunication, freight, etc. for Sec 10A purpose following HCL ruling – Circular No. 4/2018

2. CBDT clarifies on immunity provided u/s. 270AA from penalty / prosecution - Circular No.5/2018

3. CBDT defers GAAR & GST reporting under amended Tax Audit Form till March 31, 2019 – Circular No. 6/2018

4. CBDT amends IT Rules in excercise of powers conferred u/s. 44AB r/w/s 295 to effect changes in Form 3CD (Tax Audit Report) – Notification No. 33/2018

5. CBDT notifies authority for furnishing information as per Section 138(1) - Notification No. 34/2018

6. Central Government notifies India International Exchange (IFSC) Limited as a 'recognised stock exchange' for the purpose of Sec. 43(5) - Notification No. 35/2018, 36/2018

7. Central Government designates the Court of Munsiff No. 3-cum-Judicial Magistrate, 1st Class, Kamrup (M), Guwahati as the Special Court for the North Eastern Region for the purposes of Sec. 280A(1) - Notification No. 37/2018

8. CBDT notifies ‘Insolvency and Bankruptcy Board of India’ as a board established by the Central Government, for purpose of Sec. 10(46) in respect of specified income - Notification No. 38/2018

9. Central Government notifies Madhya Pradesh Real Estate Regulatory Authority, for purpose of Sec. 10(46) in respect of specified income - Notification No. 39/2018

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