AJB Developers case update

Re-designating land from stock in trade to capital asset

Case: AJB Developers Pvt. Ltd. vs DCIT, (ITAT Delhi) Background: Assessee company was engaged in the business building and infrastructure development. Company sold one of its land properties, held in its books as stock in trade, as a capital asset, and offered the income for taxation under long term capital gain with indexation. AO sought to … Continue reading Re-designating land from stock in trade to capital asset

SH. JAI PAL GABA vs ITO Case Summary

One-time settlement of debt by the bank cannot be treated as benefit from the business if loan was a separate transaction

The Chandigarh bench of ITAT has held in the case of Sh. Jai Pal Gaba vs ITO, W-III (2) that one-time settlement of debt by the bank cannot be treated as benefit from the business if such loan granted to assessee was a separate transaction. Brief Summary: The assessee took over a dissolved proprietorship concern … Continue reading One-time settlement of debt by the bank cannot be treated as benefit from the business if loan was a separate transaction

CIT vs Reliance Life Insurance Co. Ltd.

TDS not payable on outsourcing expenses which are for clerical services

In the case of CIT vs Reliance Life Insurance Co. Ltd., the Bombay High Court has held that TDS is not payable on outsourcing expenses which are clerical in nature. Revenue’s Arguments: The Revenue argued that the assessee had deducted tax under Section 194C of the act which was related to payments made to contractor … Continue reading TDS not payable on outsourcing expenses which are for clerical services

DCIT vs Bhaijee Portfolio Pvt. Ltd.

Reassessment proceedings without approval is illegal

In the case of DCIT vs Bhaijee Portfolio Pvt. Ltd. the Income Tax Appellate Tribunal’s Delhi bench has held that the re-opening of an assessment without the approval of designated authority is not allowable under Income Tax Act. Revenue’s Arguments: The re-assessment proceeding was initiated by the Assessing Officer against the Assessee by recording reasons … Continue reading Reassessment proceedings without approval is illegal

Ravi Jain vs ACIT case summary and update

Capital gain exemption to be given to more than one house, when HUF property is sold

The Delhi bench of ITAT has held in the case of Ravi Jain vs ACIT that when an HUF’s residential house is sold, the capital gain can be invested for the purchase of more than one residential house and the benefit of exemption cannot be denied under s. 54(1) of the IT Act. Assessee’s Arguments: … Continue reading Capital gain exemption to be given to more than one house, when HUF property is sold

Case update - DCIT vs BMR

Remuneration paid to Director independent of shareholding cannot be considered dividend

The Delhi bench of ITAT has held in the case of DCIT vs BMR Business Solutions Pvt. Ltd. that the remuneration paid to the Director of a company commensurate with his experience which has no bearing on his shareholding, cannot be considered ‘dividend’ under the Income Tax Act. Revenue’s Arguments: The revenue argued that as … Continue reading Remuneration paid to Director independent of shareholding cannot be considered dividend

Subscription fee paid to access online database is in the nature of business income

The Mumbai bench of the ITAT has held in the case of Elsevier Information Systems vs. DCIT that the subscription fee paid to access an online database would amount to business income and not royalty or fees for technical services. Revenue’s Arguments: The AO held that providing access to a curated online database of was … Continue reading Subscription fee paid to access online database is in the nature of business income

Rehlan constryction vs. ACIT

Possibility of personal use cannot be a reason to disallow depreciation claim

The Income Tax Appellate Tribunal’s Delhi bench has held in the case Ralhan Construction Company vs. ACIT that the mere possibility of personal use would have no role to play while granting depreciation on any vehicle under Section 32 of the Income Tax Act, 1961. Revenue’s Actions: In the present case, since the assessee had … Continue reading Possibility of personal use cannot be a reason to disallow depreciation claim

Repute Logistics Pvt. Ltd. vs. ITO - Case update

Lapsed VAT Credit cannot be written off as bad debt

The Income Tax Appellate Tribunal’s Chennai bench has held in the case of Repute Logistics Pvt. Ltd. vs. ITO that VAT Credit which has lapsed in the hand of the assessee cannot be allowed as a deduction. Assessee arguments: Since the input VAT Credit had lapsed, it had been written off in the books of … Continue reading Lapsed VAT Credit cannot be written off as bad debt

Addition made to the income of the assessee (without cross-examination) cannot be sustained

In the case of Shakuntala Agencies Pvt. Ltd. vs. ITO, search and seizure operations at the premise of a third party uncovered incriminating material related to the assessee. The AO and CIT(A) both rejected the assessee’s request to cross examine the relevant person.Tribunal holding: Addition made to the income of an assessee on the basis of … Continue reading Addition made to the income of the assessee (without cross-examination) cannot be sustained