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21.01.2017 - Voice of CA presents - Updates
Saturday, January 21, 2017

I. Headlines Today    

  1. Govt. notifies 8% interest rate on Non-Govt. PF, Superannuation Fund and Gratuity Fund for fourth quarter  (Click for detail)
  2. Notes ban: I-T dept gets over Rs 300 crore declarations under PMGKY  (Click for detail)
  3. Gaar may Spoil Tax Treaty Benefit for FPIs  (Click for detail)
  4. Govt Asks Cooperative Banks Not to Take Deposits Under PMGKDS  (Click for detail)
  5. SC to hear plea to postpone Union Budget on Jan. 23  (Click for detail)
  6. Norms Issued for Derivatives Trading on Commexes  (Click for detail)
II.  Direct Taxes Case Laws: 

1.  Surya Prakash Toshniwal (HUF) Vs. ITO, I.T.A. No. 1213/2016, Date of order: 11.01.2017, ITAT - Kolkata

Whether the LTCG claimed as exempt by an assessee on sale of securities to a company, that has been directed by SEBI not to carry out any transaction, be considered as bogus income?

Held: No

Brief Facts:
The assessee had purchased shares of M/s Rohon Financial and Securities Ltd. (RFSL) and the same shares were sold to M/s Ahilya Commercial Pvt. Ltd. (ACPL) by assessee resulting in capital gain. The AO, observed that there was a sharp rise in price of shares of RFSL and accordingly verified the transactions from the online portal of SEBI which revealed that ACPL was directed by SEBI not to enter into any transaction in securities, in any manner. It was also observed that ACPL had not filed financial statement before SEBI. Thus, the AO held the transactions as bogus and accordingly treated the same as income of assessee from undisclosed source. The CIT(A) upheld the order of Ld. AO and being aggrieved by that assessee preferred an appeal before Hon’ble ITAT.

In this regard, the Hon’ble ITAT held that the AO should have issued notices and summons to M/s RFSL and ACPL to produce the financial information before rejecting the claim of the assessee as all the necessary information which were available with the assessee had been brought on record before the lower authorities. Further, in case ACPL has not filed the financial statements with the stock exchange then the assessee cannot be held guilty for the fault of ACPL. Also, the transactions for the sale and purchase of the shares have been made through a valid stock broker and it was thus held that the lower authorities had not brought on record sufficient reasons for disallowing the claim of the assessee and that there was no fault on the part of the assessee.
Therefore, the appeal of the assessee is allowed.

(Please click here for judgment)


2.  M/s Evershine Films Private Limited Vs. ACIT (TDS), I.T.A. No. 1386-1389/Mum/2013, Date of Judgement: 18.01.2017, ITAT - Mumbai

Whether penalty u/s 272A(2)(c) of the Income Tax Act, 1961 can also be levied for non-filing of TDS return, where penalty u/s 271C of the Act has been levied for non-deduction of TDS by the assessee during the relevant financial year?

Held: No

Brief Facts:
The assessee is engaged in the business of production of feature films. A survey operation u/s. 133A of the Act was conducted at the premises of the assessee on 3.8.2006. During survey, it was noticed that the assessee has not deducted tax at source from certain payments in both the years under consideration. Further the assessee has also not remitted the tax, which it had deducted from certain payments. Therefore, AO levied penalty u/s 271C of the Act for both years. Since the assessee did not file the “Annual return of TDS” prescribed under the Act, the Assessing Officer also levied penalty u/s. 272A(2)(c) of the Act till the date of his respective orders passed in both the years. The assessee preferred the appeals before the learned CIT(A) challenging the penalties levied in both the years. However, the ld. CIT(A) dismissed the appeals filed by the assessee. Therefore, assessee preferred an appeal before the Hon’ble ITAT.

In respect of penalty levied u/s 271C of the Act, the Hon’ble ITAT has confirmed the order passed by Ld. CIT(A) in both years confirming the penalty levied u/s 271C of the Act. In respect of penalty levied u/s 272A(2)(c) of the Act, the Hon’ble ITAT held that the assessee did not file “Annual return of TDS”, since it has not remitted the amount of TDS deducted by it. In our view, non-remittance of TDS amount would be a reasonable cause for non-furnishing of Annual return of TDS. The question of filing of Annual return of TDS would arise, only if the assessee has deducted TDS and remitted the same to the credit of Government. In this view of the matter, we are of the view that the learned CIT(A) was not justified in confirming the penalty levied by the Assessing Officer u/s. 272A(2)(c) of the Act. Accordingly, we set aside the order passed by the learned CIT(A) on this issue in both the years under consideration and direct the Assessing Officer to delete penalty u/s 272A(2)(c) of the Act.
Therefore, the appeal of the assessee is partly allowed.

(Please click here for judgment)  

III. Useful Presentations:

1.  Step by Step Online Filing of Appeals before FAA (First Appellate Authority) Under Income Tax Act, 1961

(Please click here for detail)

2.  CIT(Appeals) - Practice, Procedure & Law

(Please click here for detail)

(Contribution by CA. Sidharth Jain and contributor is available at eMail-id: 

 Golden Rules:

  "Finding each other is the begining,
staying together is the process,
Working together is the success"


  Thanks & Regards


Voice of CA 

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