Connect us       New User?     Subscribe Now
Confirm your Email ID for Updates
01.04.2019 - Voice of CA presents - Latest Updates
Monday, April 1, 2019

  I. Headlines Today:   

  1. Cut-off date for linking PAN and Aadhaar is extended till 30.09.2019  (Click for detail)
  2. MCA notifies amendment for accounting of 'uncertain tax treatment' under Ind AS 12 and others  (Click for detail)
  3. New Ind AS on Leases notified, effective from April 1, 2019  (Click for detail)
  4. How to deal with a GST demand notice  (Click for detail)
  5. From income tax to GST, seven changes from April 1  (Click for detail)
  6. Tax Refund in the Works for Exports to US  (Click for detail)
  7. RBI norms on bank exposure come into effect from Monday  (Click for detail)
  8. SEBI issue procedure for limited review of entities whose accounts are to be consolidated with listed entity  (Click for detail)
  9. ICAI: FAQs on UDIN for Bank Audit  (Click for detail)

  II. Direct Taxes Case Laws: 

1.  New Amazing Shiksha Society Vs. ITO, I.T.A. No. 3550/Del/2018, Date of Pronouncement: 26.02.2019, ITAT -  Delhi

Whether exemption u/s 10(23)(iiiad) of the Act can be denied only on the basis that surplus arises to the assessee?

Held: No

Brief facts:
The assesseeis a society, registered under Society Registration Act and has been claiming exemption u/s 10(23C)(iiiad) of the Income Tax Act, 1961.During the concerned year, the appellant has disclosed total receipts which includes sale of books &sale of dress against which expenses are claimed and surplus is shown and claimed exempted. The Ld. AO made an addition alleging that the purchase and sale of books and uniforms are not educational activity by considering the surplus generated as business income.The hon’ble CIT (A)contended that the entire surplus made during the year is chargeable to taxas the appellant did not work solely for educational purposes but for profit only and dismissed the appeal of the assessee.Being aggrieved, the assessee filed an appeal before Hon’ble ITAT.

It was held that the exemption u/s 10(23)(iiiad) of the Income TaxAct, 1961 should not be denied to the assessee as selling of books anduniform to the students of assessee is part of educational activity only. Moreover, surplus was merely 12% which is considered as legitimate for charitable purposes.Therefore, the addition should be deleted.For these reasons, the question is answered in favour of assessee and against the revenue.
Hence, the appeal was held in favour of theassessee and against therevenue.

Cases cited:

  • Association of School Vendors &Orsvs. Central Board of Secondary Education &Ors, WP(C) No. 7414/2017, Date of Pronouncement: 21/02/2018(Delhi- HC)
  • Queen's Educational Society Vs Commissioner of Income-tax [2015] 372ITR 699 (SC)
  • St. LawrenceEducational Society (Regd.) vs. CIT (2013) 353 ITR 320 (Delhi)
  • CIT vs.Surat Art Silk Clothes Manufacturers Association (1980) 121 ITR 1(SC)
  • Pinegrove InternationalCharitable Trust vs. UOI 188 taxmann 402 (2010) (P&H)
  • CIT vs. Delhi Kannada Education Society (2000) 246 ITR731 (Delhi- HC)

(Please click here for judgment)

2.  Mahavir Jhanwar Vs. ITO, I.T.A. No. 2474/Kol./2018, Date of Pronouncement: 01.02.2019, ITAT - Kolkata

Was the Ld. AO justified in drawing conclusion only on the basis of report of Investigation Wing without controverted the evidences filed by the assesseein support of the genuineness of the transactions?

Held: No

Brief facts:
The assesseehad earned Long Term Capital Gains onpurchase and sale of the shares. The Ld. AO made an addition on account of bogus long-term capital gain on the basis ofreport of Investigation Wing and on general observations. The assessee was never confronted with any statement or material on the basis on which conclusion were drawn against him. The evidence produced by the assessee in support of the genuinenessof the transaction remains unchallenged & uncontroverted. The CIT(A) has relied upon “circumstantial evidence” and“human probabilities” to uphold the findings of the Ld. AO.Being aggrieved, the assessee filed an appeal before the Hon’ble ITAT.

It washeld that decision in such cases should be based on evidence and not on generalisation, human probabilities, suspicion,conjectures and surmises.the assessee has filed all necessary evidences in support of the transactions. Some ofthese evidences are (a) evidence of purchase of shares, (b) evidence of payment forpurchase of shares made by way of account payee cheque, copy of bank statements, (c)copy of balance sheet disclosing investments, (d) copy of demat statement reflectingpurchase, (e) copy of merger order passed by the High Court , (f) copy of allotment ofshares on merger, (g) evidence of sale of shares through the stock exchange, (h) copy ofdemat statement showing the sale of shares, (i) copy of bank statement reflecting salereceipts, (j) copy of brokers ledger, (k) copy of Contract Notes etc.For these reasons, the question is answered in favour of theassessee and against the revenue.
Hence, the appeal was held in favour of the assesseeandagainst therevenue.

Cases Referred:

  • DICT vs. Sunita Khemka, ITA No.714 to 718/Kol/2011, ITAT- Kolkata
  • CIT vs. Carbo Industrial Holdings Ltd., 214 ITR 244 HC- Calcutta
  • CIT vs. Shri Mukesh RatilalMarolia, ITA No.456 of 2007,HC- Bombay
  • Manish Kumar Baid vs. ACIT, ITA No.1236-1237/KOL/2017, ITAT- Kolkata

(Please click here for judgment)


Golden Rules:

  "Opportunities and obstacles are equal for all.
But the difference is that,
a positive person gives results and
a negative person gives reasons" 


Thanks & Regards


Voice of CA 

« Back
Online Poll
Connect Us       New User?     Subscribe Now