Romancing the Taxation...... New case Law 269ss&T CIT V. DINESHCHANDRA SHANTILAL SHAH (HUF) (2013)

Disbursement of cash to farmers through discounting of cheque doesn't violate sec. 269SS or sec. 269T

When it was not proved that by cheque discounting business assessee had taken any loan or deposit from agriculturists and/or he had repaid any loan to agriculturists, neither section 269SS nor section 269T were attracted

CIT V. DINESHCHANDRA SHANTILAL SHAH (HUF) (2013)

Romancing the Taxation .....MASCON TECHNICAL SERVICES LTD. V. CIT (2013)

MASCON TECHNICAL SERVICES LTD. V. CIT(2013)

Share issue exp. remains a capital expenditure even if SEBI disapproves of issue of shares; no sec. 37(1) allowance

Share issue expenses cannot be allowed as revenue expenditure even when shares could not be issued due to non-approval by SEBI

MGF Automobiles Ltd vs. ACIT (ITAT Delhi)

S. 153A: In case of completed assessments, addition can be made only if incriminating document found during search.

All Cargo Global Logistics 137 ITD 287 (Mum)(SB)

here are three possible circumstances that emerge on the date of initiation of search u/s 132 (1): (a) proceedings are pending; (b) proceedings are not pending but some incriminating material found in the course of search indicating undisclosed income and/or assets and (c) proceedings are not pending and no incriminating material has been found. 

In circumstance (a), since the proceedings are pending, they are abated and the AO gets a free hand to make the assessment. In circumstance (b), there is no question of abatement as the proceedings are not pending and the AO has to pass an assessment order u/s 153A to assess the undisclosed income. In circumstance (c), the AO has to pass an assessment order though as there is no incriminating material no income can be assessed. 

On facts, as the assessments were completed and there was no incriminating material found during the search, the AO was not entitled to make any addition 

Romancing the Taxation new case law Sec.50B

S. 50B: Transfer of assets via amalgamation without monetary consideration is not a “slump sale” 

R.R. Ramakrishna Pillai 66 ITR 725 & Avaya Global Connect 26 SOT 397 (Mum) followed)(ITAT hyderabad)

S. 2(42C) defines a ‘slump sale’ to mean the transfer of one or more undertakings as a result of the sale for a lump sum consideration without values being assigned to the individual assets and liabilities in such sales.

A plain reading of s. 2(42C) makes it clear that to qualify as a slump sale, two conditions have to be satisfied viz., (i) there must be transfer of one or more undertakings as a result of sale and (ii) the sale should be for a lump sum consideration without values being assigned to the individual assets and liabilities. 

 The presence of money consideration is an essential element to a transaction of sale. 

If the consideration is not money but some other valuable consideration it may be an exchange or barter but not a sale. In the present case, as no monetary consideration was received by the assessee for transfer of the assets and liabilities of the manufacturing division to Novapan Industries Ltd, the transaction is not a “slump sale” and does not attract s. 50B. 

Romancing the Taxation.... Romancing The New case Law

CIT vs Rajendra Kumar/Naresh kumar (Delhi high court)

Sec. 40(a)(ia) TDS: Amendment by Finance Act 2010 permitting TDS payment till due date of ROI is 'retrospective'. 

The intention behind s. 40(a)(ia) is to ensure that TDS is deducted and paid. The object of introduction of s. 40(a)(ia) is to ensure that TDS provisions are scrupulously implemented without default in order to augment recoveries. It is not to penalise an assessee when payment has been made within the time stated. Failure to deduct TDS or deposit TDS results in loss of revenue and may deprive the Government of the tax due and payable. 

sec. 40(a)(ia), prior to the insertion of the proviso by the Finance Act 2010, was not free from interpretative difficulties and problems. The amended provisions are clear and free from any ambiguity and doubt and will help curtail litigation. The amended provision clearly support the view that the expression “said due date” used in clause A of proviso to the un-amended section refers to the time specified in s. 139(1) of the Act. The amended s. 40(a)(ia) expands and further liberalises the statue when it stipulates that deductions made in the first eleven months of the previous year but paid before the due date of filing of the return, will constitute sufficient compliance. Consequently, the proviso to s. 40(a)(ia) must be treated as retrospective in operation.