Non Filing of Partnership Deed :Remuneration to partners cannot be disallowed

Remuneration to partners cannot be disallowed due to non-filing of reconstituted partnership deed

CIT VS M/s SR Batliboi & Associate (Calcutta High Court), ITA No. 190/2015, Date of Decision: 24.02.2015

Issue before court:

The only issue before Hon’ble Court is that whether assessee can claim deduction on account to remuneration paid to partners when certified copy of instrument of change of partnership deed is not filed along with the return.

Brief Facts:

CBDT extends due date of filing return

CBDT extends due date of filing return from July 31, 2015 to August 31, 2015

SECTION 119 OF THE INCOME-TAX ACT, 1961 - INCOME-TAX AUTHORITIES - INSTRUCTIONS TO SUBORDINATE AUTHORITIES - EXTENSION OF DUE DATE OF FILING RETURN OF INCOME FOR ASSESSMENT YEAR 2015-16

ORDER [F.NO.225/154/2015/ITA.II], DATED 10-6-2015

The Central Board of Direct Taxes, in exercise of powers conferred under section 119 of the Income-tax Act, 1961, hereby extends the 'due-date' for filing Returns of Income, in terms of clause (c) of Explanation 2 to sub-section (1) of section 139 of the Income-tax Act, 1961, for Assessment Year 2015-16 from 31st July, 2015 to 31st August, 2015 in respect of income tax assessees concerned.

Section 2(15), Protecting cows are charitable purposes

Protecting, maintaining and developing Indian breed of cows are charitable purposes

[2015] 58 taxmann.com 37 (Guwahati - Trib.)

IN THE ITAT GUWAHATI BENCH

Bharatiya Govansh Rakshan Samvardhan Parishad

v.

Commissioner of Income-tax, Guwahati

Section 2(15), read with section 12AA, of the Income-tax Act, 1961 - Charitable purpose (Objects of general public utility/Maintenance of Gaushalas) - Whether where assessee-trust was established with object to protect, preserve, maintain and develop Indian breed of cows and its progeny, it was to be regarded as charitable purpose within meaning of section 2(15) - Held, yes [Para 10][In favour of assessee]

Default of deductor :AO not to raise direct demand against an assessee

AO not to raise direct demand against an assessee wherein TDS credit mismatch arises due to default of deductor: CBDT

SECTION 199 OF THE INCOME-TAX ACT, 1961 - DEDUCTION OF TAX AT SOURCE - CREDIT FOR TAX DEDUCTED - NON-DEPOSIT OF TAX DEDUCTED AT SOURCE

INSTRUCTION NO.275/29/2014-IT-(B), DATED 1-6-2015

Grievances have been received by the Board from many taxpayers that in their cases the deductor has deducted tax at source from payments made to them in accordance with the provisions of Chapter-XVII of the Income-tax Act, 1961 (hereafter 'the Act') but has failed to deposit the same into the Government account leading to denial of credit of such deduction of tax to these taxpayers and consequent raising of demand.

2. As per Section 199 of the Act credit of Tax Deducted at Source is given to the person only if it is paid to the Central Government Account. However, as per section 205 of the Act the assessee shall not be called upon to pay the tax to the extent tax has been deducted from his income where the tax is deductible at source under the provisions of Chapter- XVII. Thus the Act puts a bar on direct demand against the assessee in such cases and the demand on account of tax credit mismatch cannot be enforced coercively.

3. This may be brought to the notice of all the Assessing Officers in your region so that if the facts of the case so justify, the assessees are not put at any inconvenience on account of default of deposit of tax into the Government account by the deductor.

4. This issues with the approval of Chairperson, CBDT.

Section 22 :Taxability of Income from letting out shops in a complex

Income from letting out shops in a complex without any incidental services is taxable as income from house property

[2015] 58 taxmann.com 12 (Delhi - Trib.)

IN THE ITAT DELHI BENCH 'A'

A.B. Hotels Ltd.

v.

Assistant Commissioner of Income-tax, Central Circle -3, New Delhi

Section 22, read with section 28(i), of the Income-tax Act, 1961 - Income from house property - Chargeable as (Business income v. House property income) - Assessment year 2010-11 - Assessee-company constructed a commercial complex consisting of hotel building and shops - During relevant year assessee let out shops to different parties and declared rental income as 'income from house property' - Assessing Officer having drawn parity between renting out space in commercial plaza and in renting out hotel rooms, concluded that rental income was to be taxed as 'business income' - Commissioner (Appeals) confirmed assessment order - Tribunal in assessee's own case in earlier assessment year, held that it was a case of renting simplicitor and services incidental to letting out did not constitute such complex character so as to render it as a business by itself - Tribunal accordingly concluded that physical proximity of hotel and commercial complex did not really matter and rental income was to be taxed as income from house property - Whether in absence of any change in circumstances, following aforesaid of co-ordinate bench of Tribunal, receipt in question was to be taxed as income from house property for assessment year in question as well - Held, yes [Para 5][In favour of assessee]

Section 57: Interest earned taxable on net Basis after reducing expenses

Interest earned by society on deposits made with banks was taxable on net basis after reducing admin expenses thereon

[2015] 58 taxmann.com 35 (Karnataka)

HIGH COURT OF KARNATAKA

Totgars Co-Operative Sale Society Ltd.

v.

Income-tax officer, Ward -1, Sirsi

Section 57, read with section 56 and section 80P(1) of the Income-tax Act, 1961 - Income from other sources - Deductions (Administrative and other expenses) - Assessment years 1991-92 to 1999-2000 - Assessee was a co-operative society engaged in business of marketing agricultural produce and was also providing credit facilities to its members - It claimed benefit of deduction under section 80P(2)(a)(i) in respect of interest, earned on deposits kept with scheduled banks, Indra Vikas Patra, NSC etc. - Assessing Officer rejected assessee's claim and brought said interest income to tax under section 56 as 'Income from other sources' - Tribunal confirmed Assessing Officer's order - Assessee filed instant appeal seeking direction to pass fresh order by giving permissible deduction under section 57 - Whether on facts, only net interest income, i.e., interest income reduced by administrative expenses and other proportionate expenses to earn said income had to be brought to tax under section 56 - Held, yes [Para 12] [Partly in favour of assessee]

Section 127 :When Transfer of case to new jurisdiction is held as Invalid

Order passed by AO to transfer case to new jurisdiction was invalid as it was made without an order of CIT

[2015] 57 taxmann.com 164 (Delhi - Trib.)

IN THE ITAT DELHI BENCH 'D'

KIE Infrastructures & Projects (P.) Ltd.

v.

Income-tax Officer, Ward-5 (3), New Delhi

Section 127 of the Income-tax Act, 1961 - Income-tax authorities - Power to transfer cases (Conditions precedent) - Assessment year 2008-09 - Assessee-company filed its return through e-filing - On basis of PAN allotted to assessee, Assessing Officer Ward 4, Agra assumed jurisdiction and issued notice under section 143(2) - In Form 49A, assessee filled up office address at New Delhi where registered office of assessee was situated - Even though in assessee's case Assessing Officer at ward 4 Agra and Assessing Officer at ward 5 New Delhi were under jurisdiction of different CCIT as well as different Commissioners, Assessing Officer at ward 4 Agra himself transferred assessee's case to jurisdiction of Assessing Officer, ward 5, New Delhi - Whether since there was no transfer order passed by Chief Commissioner or Commissioner, it was a case of violation of provisions of section 127 and, therefore, impugned assessment order passed by Assessing Officer, ward 5 New Delhi was to be regarded as invalid and void ab initio - Held, yes [Para 14] [In favour of assessee]