Direct Tax Alert
- M/S. Icon Engineering Works Vs. The DCIT, CPC Bangalore 2022 (2) TMI 228 -ITAT Bangalore
The assessee would be entitled to deduction of employees’ contribution to PF and ESI provided that the payments were made prior to the due date of filing of the return of income u/s 139(1) – Also further held by the ITAT that amendment by Finance Act, 2021, to section 36[1][va] and 43B of the Act is not clarificatory. Therefore, the amended provisions are not applicable for the assessment years under consideration.
- Godha Realtors (P.) Ltd. v. Asstt. Commissioner of Income-tax, Circle2(2) [2022] 135 taxmann.com 24 (Bangalore – Trib.)
No capital gains arises in the year in which an agreement to sell is entered into with buyer without possession being given to buyer, as there is no “transfer” within the meaning of section 2(47).
- S.P. Velayutham v. Asstt. Commissioner of Income-tax [2022] 135 taxmann.com 43 (Madras)[28-01-2022]
Mere failure to pay tax will not qualify as ‘wilful attempt to evade tax’ when assessee made no effort to suppress his income in ITR which was accepted as correct by Department and he made no attempt to alieanate his property to evade tax liability.
- Sudesh Taneja v. Income Tax Officer, Ward-1(3) [2022] 135 taxmann.com 5 (Rajasthan)
New provisions apply to reassessment notices issued on or after 1-4-2021 for AYs prior to AY 2021-22 also. Original provisions upon their substitution stood repealed for all purposes and had no existence after introduction of the substituting provisions. We may refer to Section 6 of the General Clauses Act, 1897 which provides interalia that where the State Act or Central Act or regulation repeals any enactment then unless a different intention appears repeal shall not revive anything not in force or existing at the time at which the repeal takes effect or affect the previous operation of any enactment so repealed or anything duly done or suffered there under.
- Principal Commissioner of Income-tax (Central)-3 v. Agson Global (P.) Ltd. [2022] 134 taxmann.com 256 (Delhi)
Addition u/s 68 is not attracted when assessee-company routs its own accounted money back to itself, through other entities, as share capital/premium especially when the same is done through banking channels. AO cannot make any additions under section 68 where assessee-company loans its funds to other entities which then invest it back in assessee company as share capital unless the funds so routed back are assessee-company’s unaccounted money. Routing of assessee-company’s duly accounted money back to itself may violate other laws, but that does not attract section 68.
- Principal Commissioner of Income Tax-1, Kolkata v. Orchid Griha Nirman (P.) Ltd. [2022] 134 taxmann.com 281 (Calcutta)
No tax is attracted in the hands of firm u/s 45(3) or otherwise, where partners bring in land which is held by partners as inventory as their capital contribution and amount is recorded as capital contribution at its cost to the partners and later on the inventory of land is converted into fixed asset and revalued in order to justify the huge bank loan obtained on the security of the land.
Note: Conversion of inventory into capital asset is taxable under section 28(via) of the Act with effect from AY 2019-20. This case pertains to prior assessment year.
- Manoj Jain v. Union of India [2022] 134 taxmann.com 173 (Calcutta)
Reassessment notices issued on or after 1-4-2021 should be within the new 3 years time-limit & should comply with the procedure in new section 148A even if it pertained to past assessment years. Explanations A(a)(ii)/A(b) to the Notifications dated 31st March, 2021 and 27th April, 2021 are ultra vires the Relaxation Act, 2020 and are therefore bad in law and null to the extent that the same extend the applicability of the “provisions of Section 148, Section 149 and Section 151 of the Act, as the case may be, as they stood as on the 31st March, 2021, before the commencement of the Finance Act, 2021″ to the period beyond 31st March, 2021.
- Darshan Enterprise v. Additional/ Joint/ Deputy/ Assistant Commissioner of Income -tax Income-tax Officer [2022] 134 taxmann.com 188 (Gujarat)
Where AO’s final faceless assessment order is nothing but a mere exact reproduction of the draft assessment order without considering any submissions made by the assessee, the High Court should not hesitate to quash the assessment order as the same is non-est under section 144B(9). There is no question of relegating the assessee to alternative remedy in such cases. Section 144B(9) makes it clear that if the procedure laid down under Section 144B is not followed or complied with, the assessment would be rendered non-est.
- Government Of India Ministry Of Finance Department Of Revenue Central Board Of Direct Taxes (Cbdt) Income Tax Department, v. Karnataka State Souharda Federal Co-Operative Ltd. [2022] 134 taxmann.com 170 (Karnataka)
A comprehensive reading of the Preambles of the Karnataka Co-operative Societies Act, 1959 and the Karnataka Souharda Sahakari Act, 1997 vis-à-vis objects and reasons would indicate that both the Statutes support and promote Co-operative movement. No hyper technical view can be taken to exclude the entities registered under the Souharda Act as not falling under the definition of ‘Co-operative Society’ as defined in Section 2(19) of the Income-Tax Act,1961. Consequently, deduction under section 80P cannot be denied to the entities registered under the Souharda Act