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IV. Direct Taxes Case Laws:
1. Jagan Nath Prasad & Sons Vs. ITO, I.T.A. No. 676/Del/2015, Date of Order: 05.08.2015, ITAT – Delhi
Amount received as compensation towards the damage to the land cannot to be said to be a revenue receipt.
Facts of
the case: During the year, assessee received a sum for digging of land
and laying the pipe-line from M/s Indian Oil Corporation. The amount was
received for granting the right to use the land for laying the pipeline
and damages done to the land. The land is still owned by the assessee
and there is no transfer of any asset. AO treat the said amount as
revenue receipt and also causal and non-recurring nature.
Hon’ble
ITAT held that the land has remained with the assessee and that the
assessee in future may earn profits from the said land cannot be a
ground to hold that the compensation received by the assessee in lieu of
damage caused to the land was revenue receipt. Further, land is still
owned by the assessee and there is no transfer of any asset. Therefore,
compensation received by the assessee is not eligible for capital gain
tax and cannot be said to be a revenue receipts.
Reliance was placed on the decisions of the Hon’ble Bombay High Court in the Case of Dr. (Ms) Avimay S. Hakim Vs ITO (supra)
(Please click here for judgment)
2. Shri Ketan V. Shah Vs. ACIT, I.T.A. No. 2321/Mum/2013, Date of Order: 26.06.2015, ITAT – Mumbai
Addition
cannot be made on the basis of presumption u/s 132(4) where loose paper
was not found from the premises of the assessee nor was the assessee in
possession of the said loose paper.
Merely
by making additions of all the figures mentioned in a loose paper would
not justify. The entire addition has been made on the presumption
mentioned u/s. 132(4A) of the Act. The loose paper was not found at the
premises of the assessee nor the assessee was in possession of the said
loose paper Therefore, the provisions of Sec. 132(4A) of the Act is not
applicable as the paper was not found from the possession of the
assessee. AO also suggested that the addition have been made on
protective basis so this is a protective assessment and same has been
confirmed by first appellant authority. However, there is no reference
about any case/assessee, in whose hands substantive additions have been
made.
Hon’ble
ITAT placed reliance on the judgment of the Hon’ble Allahabad High Court
in the case of CIT Vs Smt. Durgawati Singh 234 ITR 249 where it was
held that “It is settled that when there is a doubt as to which person
amongst the two was liable to be assessed, parallel proceedings may be
taken against both and alternative assessments may also be framed. It is
also equally true that while a protective assessment is permissible, it
is not open to the income-tax appellate authorities constituted under
the Act to make a protective order.”
(Please click here for judgment)
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