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29.03.2018 - Voice of CA presents - Latest Updates
Thursday, March 29, 2018

  I. Headlines Today:   

  1. Govt. extends due date of filing GST TRAN-2 till June 30, 2018  (Click for detail)

  2. CBDT extends due date for linking Aadhaar with PAN till June 30, 2018  (Click for detail)

  3. Income tax offices, Ayakar Seva Kendras to remain open on March 29-31 for returns filing  (Click for detail)

  4. FY18 divestment receipts exceed revised budgetary target of Rs 1 lakh crore: Arun Jaitley  (Click for detail)

  5. Aadhaar deadline for welfare services u/s 7 extended  (Click for detail)

  6. Govt. issues clarification reg. requirement for furnishing of Country-by Country Report u/s 286(4) of IT Act, 1961  (Click for detail)

  7. Fake LoUs: PNB agrees to honour Rs 65 bn of other banks' pending claims  (Click for detail)

  8. RBI to banks: Audit SWIFT transactions by June 30  (Click for detail)

  II. Direct Taxes Case Laws: 

1.  Salora International Ltd. Vs. Commissioner of Income Tax, I.T.A. No. 799/2005, Date of Pronouncement: 20.02.2018, High Court of Delhi

Whether an order passed by ITAT permitting the withdrawal of Appeal pursuant to application filed by Appellant for withdraw the appeal would be considered as adjudicatory order for the purpose of deciding period of limitation under section 275 of the Income Tax Act, 1961”.

Held - No

Brief Facts:
The assessee is a limited company engaged in manufacture and sale of TV sets and their components. Pursuant to assessment order the ld. AO issued notice u/s 271(1)(c) of the Act on 12.08.1997 for concealment of income. The assessee argued that penalty proceedings were barred in view of Section 275(1)(a) of the Act as a valid penalty could be imposed only within six months of the end of the month of receipt of order of Ld. CIT(A) i.e. on or before 31.07.1994. The revenue had contended that against the order of Ld. CIT(A), second appeal was filed before ITAT, however the same was withdrawn. The decision was communicated to assessee through letters dated 29.12.1995 and 04.01.1996. The order of the Hon’ble ITAT permitting the withdrawal was made on 31.03.1997. Assessee submitted that neither was the pendency of the appeal to the Hon’ble ITAT notified nor was the withdrawal order communicated to the assessee. However, penalty order was passed by the Ld. AO on 25.11.1997. Ld. CIT(A) accepted the contentions of assessee and deleted the penalty. The Hon’ble ITAT set aside the order of Ld. CIT on appeal filed by the revenue. Aggrieved with the same, the assessee has preferred this appeal before Hon’ble High Court.

The Hon’ble High Court held that a plain and textual reading of Section 275 clarifies that the expiry of six months prescribed is to be reckoned “from the date of completion of proceedings or from the end of the month in which the order of the CIT(A) or as the case may be the appellate tribunal is received.” The order as referred in Section 275 mean an adjudicatory order (i.e. an order that determines inter alia the rights of the parties finally) which shall form the beginning of period of limitation for penalty proceedings. The period of limitation would not extend in the eventuality of withdrawal of second appeal by the Revenue as no adjudicatory order is being passed. As such, it was incumbent upon the revenue to complete the penalty proceedings and pass order within the six months period of the receipt of order of CIT(A).
The appeal was held in favour of the assessee and against the revenue.

(Please click here for Judgment)

2.  Gyanchand M. Bardia Vs. ITO, I.T.A. No. 1072/2016, Date of Pronouncement: 21.02.2018, ITAT - Ahmedabad

Issue: Whether the amount received by a member of HUF from HUF will be considered as a gift exempt u/s 56(2)(vii) of the Income Tax Act, 1961?

Held: No

Brief Facts:
The assessee is a member of HUF and received a sum of money from HUF during relevant year through banking channel and shown it as a gift. The ld. AO made an addition of Rs. 1,02,00,000 u/s 68 of the Act. The assessee claimed the said amount to be a gift without consideration covered u/s 56(2)(vii) of the Act contending that it is implied when gift from member to HUF is exempt from tax, same way gift from HUF to Member is also tax free. The ld. AO rejected the claim of the appellant assessee and treated the income as income from other sources and the CIT(A) confirmed the action of ld. AO. Being aggrieved, assessee has filed an appeal before Hon’ble Tribunal.

The Hon’ble ITAT explained the definition of ‘relative’ and concluded that an HUF does not come under the specified category of a relative in section 56(2)(vii) as applicable w.e.f. 01.10.2009. It is stated that the legislative intent is very clear that an HUF is not to be taken as a donor in case of an individual recipient. The assessee’s former plea of having received a valid gift from his HUF is therefore declined.
Hence, appeal was held against the assessee and in the favour of revenue.

(Please click here for Judgment)

Golden Rules:

  "Every day starts with an expectation and ends with an experience.
So praise every moment of your life.
There is always a hidden lesson in it" 


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