Interest couldn't be levied under Secs 234A/234B/23 if

Interest couldn't be levied under Secs 234A/234B/234C if AO didn’t mention relevant provision in assessment order

[2015] 57 taxmann.com 259 (Allahabad)

HIGH COURT OF ALLAHABAD

Commissioner of Income-tax

v.

Oswal Exports

Section 234A, read with sections 234B and 234C, of the Income-tax Act, 1961 - Interest, chargeable as (Conditions precedent) - Assessment year 1990-91 - In assessment order, Assessing Officer had merely directed that "interest would be charged as per rules" - Whether in order to levy interest under sections 234A, section 234B or section 234C, Assessing Officer is required to mention specific section of charging interest failing which, no interest could be levied - Held, yes [Para 14] [In favour of assessee]

Section 68 :Gift not to be deemed as unexplained

Gift not to be deemed as unexplained when gift deed and bank certificate were furnished to prove its genuineness

[2015] 57 taxmann.com 176 (Gujarat)

HIGH COURT OF GUJARAT

Smt. Neelamben Gopaldas Agrawal

v.

Income-tax Officer

Section 68 of the Income-tax Act, 1961 - Cash credit (Gifts) - Assessment year 1996-97 - Whether, where assessees received certain amount as gift from NRI through cheque and they produced bank certificate and gift deed regarding same, addition as unexplained income under section 68 was not justified - Held, yes [Para 6] [In favour of assessee]

Section 54F:Tenancy rights giving possession,control and transferable rights in flat

Purchase of tenancy rights giving possession, control and transferable right in flat would provide sec. 54F relief

[2015] 57 taxmann.com 23 (Mumbai - Trib.)

IN THE ITAT MUMBAI BENCH 'A'

Archana Parasrampuria

v.

Income-tax Officer, Ward-24 (1) (3), Mumbai

Section 54F, of the Income-tax Act, 1961 - Capital gains - Exemption of, in case of investment in residential house (Owner) - Assessment year 2005-06 - Assessee earned long-term capital gains on sale of shares - She claimed exemption under section 54F on plea that she had purchased a residential flat - Assessing Officer noted from transfer deed that assessee had "transferable tenancy rights" and "not ownership" of flat, therefore disallowed claim under said section – Whether, where rights of assessee in flat were not mere tenancy rights but were substantial rights giving assessee dominion, possession and control over said property with transferable rights, which were almost identical to that of an owner of property, assessee was entitled for exemption - Held, yes [Para 5][In favour of assessee]

When the Funds remitted by Non Resident to India are held to be not taxable

Funds remitted by NR to India out of income accrued outside India aren't taxable in India

[2015] 57 taxmann.com 262 (Hyderabad - Trib.)

IN THE ITAT HYDERABAD BENCH 'A'

Deputy Commissioner of Income-tax, Circle-16 (1), Hyderabad

v.

Madhusudan Rao

Section 5, read with sections 68 and 69, 69A and 69B, of the Income-tax Act, 1961 - Income - Accrual of (Conditions precedent) - Assessment year 2011-12 - Whether provision of section 5 does not permit taxation of amounts remitted to India from sources outside India which are not incomes under provisions of Act - Held, yes - Whether where assessee, an NRI, received a certain sum from his own account outside India through proper banking channels with necessary statutory approvals, income could not be said to accrue or arise in India - Held, yes - Whether provisions of section 68 or 69 would be applicable in case of non-resident only with reference to those amounts whose origin of source can be located in India - Held, yes - Whether assessee being a non-resident invoking provisions of sections 68 and 69 had its own limitations - Held, yes - Whether since assessee had remitted his own funds abroad to India, said inward remittance could not be considered as unaccounted income of assessee under sections 68 and 69 - Held, yes - Whether where assessee transferred his own fund, said fund could not represent his unexplained investment under section 69A - Held, yes [Paras 16 - 19] [In favour of assessee]

Circulars and Notifications : Circular No.5, dated 20-2-1969

Section 68 :Firm needed not to explain source of income of partners

Firm needed not to explain source of income of partners who had made capital contribution; sec. 68 additions deleted

[2015] 57 taxmann.com 373 (Andhra Pradesh and Telangana)

HIGH COURT OF ANDHRA PRADESH AND TELANGANA

Commissioner of Income-tax

v.

M. Venkateswara Rao

Section 68, of the Income-tax Act, 1961 - Cash credit (Firm, in case of) - Assessment year 1993-94 - Whether contribution made by partners to capital of assessee-firm would constitute very substratum for business of firm and it is difficult to treat pooling of such capital, as credit; It is only when entries are made during course of business that can be subjected to scrutiny under section 68- Held, yes - Whether partnership firm is not required to explain source of income for partners regarding amount contributed by them towards capital of firm - Held, yes [Paras 8 & 10] [In favour of assessee]

Section 271(1)(c) No penalty on seizure of gold if:-

No penalty on seizure of gold if assessee admitted that it was derived out of undisclosed income and paid taxes thereon

[2015] 57 taxmann.com 382 (Andhra Pradesh and Telangana)

HIGH COURT OF ANDHRA PRADESH AND TELANGANA

L. Giridharlal & Co.

v.

Income-tax Officer

Section 271(1)(c), read with sections 69A and 271, of the Income-tax Act, 1961 - Penalty - For concealment of income (Explanation 5) - Assessment year 1986-87 - Search was conducted in assessee's premises and gold was seized - Assessing Officer did not accept explanation of assessee regarding unaccounted gold and initiated penalty proceedings - However, it was found that assessee had made statements under section 132(4) regarding said gold and explained manner in which same was derived - Further, value of seized gold was treated as income of assessee and assessee paid tax thereon - Whether assessee's case fitted into clause (2) of Explanation 5 of section 271(1) which brought immunity to assessee and, hence, penalty was not to be levied - Held, yes [Paras 10,11 and 12] [In favour of assessee]

Income from share : Business Income

Income from share transactions is taxable as business income if assessee is dealing with large volume of shares

[2015] 57 taxmann.com 327 (Mumbai - Trib.)

IN THE ITAT MUMBAI BENCH 'F'

Assistant Commissioner of Income-tax 25(3), Mumbai

v.

Vinod K. Sharda

Section 28(i), read with section 45, of the Income-tax Act, 1961 - Business income - Chargeable as (Share dealings, income from) - Assessment year 2007-08 - Whether where assessee was dealing in large volume of shares for which one has to devote considerable time and resources and has to carry out activities in a systematic manner, assessee was not an investor but a trader of shares and income from share transactions was to be assessed as business income and not as capital gain - Held, yes [Para 5] [In favour of assessee]