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.

HUSBAND WILL GET THE HOUSE RENT ALLOWANCE EXEMPTION ON RENT PAID TO WIFE.

HRA SEC.10(13)

HUSBAND WILL GET THE HOUSE RENT ALLOWANCE EXEMPTION ON RENT PAID TO WIFE.

In the instant case the AO disallowed assessee's claim for HRA exemption on the ground that assessee and his wife were living together and claim of payment of rent by assessee to his wife was made to reduce his tax liability. The CIT(A) confirmed the addition on the ground the tenant (i.e., assessee) and landlord (i.e., his wife) were staying together which indicated that the whole arrangement was a colourable device. Aggrieved assessee filed the instant appeal.

The section 10(13A) provides that exemption would be allowable to an assessee for any allowance granted to him by his employer to meet expenditure actually incurred on payment of rent in respect of residential accommodation occupied by the him;

The assessee had submitted the rent receipt(s) and payments had been duly verified. Therefore, the assessee had fulfilled the twin requirements of the provision, i.e., occupation of the house and the payment of rent. Thus, he was entitled to exemption under section 10(13A) - BAJRANG PRASAD RAMDHARANI V. ACIT (2013) (Ahmedabad - Trib.)

cost inflation index

Romancing the Taxation

Cost inflation index - AY 14-15 -939

Romancing The Taxation- Ramdev baba's Divya Yog's Income

Romancing The Taxation- Ramdev baba's Divya Yog's Income...

YOG TRUST IS TAX EXEMPT: ITS MAIN OBJECT IS TO IMPART TRAINING IN YOGA, FOR EDUCATION AND CURING OF DISEASE

The predominant object of imparting Yoga training through well structured Yoga shivirs is to provide medical relief and impart education, which fall under the category of charitable objects defined under section 2(15).
Yoga can be safely accepted as a system that fits into the definition of medical relief.The predominant objective of the assessee-trust was to provide medical relief through Ayurveda and propagation of Yoga for the purpose of curing various diseases;

The proviso to section 2(15) applies only to trusts falling in the last limb of the definition of charitable purpose, that too if such trust carries on commercial activities in the nature of business, trade or commerce. The said proviso does not apply to a trust providing education and medical relief. Thus, revenue was not justified in refusing the exemption claimed by assessee-trust under sections 11 and 12 - DIVYA YOG MANDIR TRUST V. JCIT

Romancing the new caselaw CIT vs. Syed Ali Adil (Andhra Pradesh High Court)

Romancing the new caselaw

CIT vs. Syed Ali Adil (Andhra Pradesh High Court)

June 7th, 2013

The expression “a residential house” in s. 54 (1) has to be understood in the sense that the building should be of residential nature and “a” should not be understood to indicate a singular number. Where an assessee had purchased two residential flats, he is entitled to exemption u/s 54 in respect of capital gains on sale of its property on purchase of both the flats, despite the fact that the flats were purchased by separate sale deeds. Deduction is allowable even if the flats are on different floors. On facts, as the two flats purchased by the assessee are adjacent to one another and have a common meeting point, the deduction cannot be denied (D. Ananda Basappa 309 ITR 329 (Kar), K. G. Rukminiamma 331 ITR 211 (Kar) followed; Susheela M. Jhaveri 107 ITD 327 (Mum) (SB) held not good law)