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28.05.2014 - Voice of CA presents - Updates
Wednesday, May 28, 2014
I. A Helpful Presentation:

[ Contribution by CA. Sanjay Agarwal, Founder - Voice of CA; and contributor is available at ]

"Income from Other Sources U/s  56 of the Income Tax Act, 1961"

(Please click here)  


II.  Direct Tax Case Laws:

1.  Binjusaria Properties (P.) Ltd. Vs. Assistant Commissioner of Income Tax, Central Circle-4, IT Appeal No. 157 (Hyd.) of 2011, Date of Order: 04.04.2014, ITAT - HYD

Capital gains could not be brought to tax merely on basis of signing of development agreement, where developer had not done anything to discharge obligations cast on it

Held that since there was no developmental activity on the land which is subject matter of development agreement. The process of construction has not been even initiated and no approval for the construction of the building is obtained. Thus, the sale consideration in the form of developed area has not been received. Mere receipt of refundable deposit cannot be termed as receipt of consideration. Further, as submitted , the Assessing Officer calculated the capital gain on the entire land, even though the assessee has retained 38% share to itself. The valuation was also disputed.

There is, therefore, no accrual of income in favour of the assessee as per S.48 of the Act. Due to lapse on the part of the transferee, the construction has not taken place in the year under consideration, and it has not commenced even now. In the facts and circumstances of the present case, wherein while the assessee has fulfilled its part of the obligation under the development agreement, the developer has not done anything to discharge the obligations cast on it under the develop agreement, the capital gains cannot be brought to tax in the year under appeal, merely on the basis of signing of the development agreement during this year.

(Please click here for judgment)

2.   Commissioner of Income Tax, Kol-III Vs. Baljit Securities (P) Ltd, ITAT No. 215 of 2013, Date of Order: 12.03.2014, High Court of Calcutta

U/S. 73(1), assessee bieng a share broker is entitled to set off loss incurred in transactions of derivatives and day trading of shares against its profits and gains from purchase and sale of shares on delivery basis

That where an assessee, being the company, besides dealing in other things also deals in purchase and sale of shares of other companies, the assessee shall be deemed to be carrying on a speculation business. The assessee, in the present case, principally is a share broker, as already indicated. The assessee is also in the business of buying and selling of shares for self where actual delivery is taken and given and also in buying and selling of shares where actual delivery was not intended to be taken or given. Therefore, the entire transaction carried out by the assessee, indicated above, was within the umbrella of speculative transaction. There was, as such, no bar in setting off the loss arising out of derivatives from the income arising out of buying and selling of shares. This is what the learned Tribunal has done.

(Please click here for judgment)

  III. Today's Headlines:    

  1. Preparations for Budget kick-off with new FM Arun Jaitley  (Click for detail)
  2. Jaitley to do balancing act on inflation-growth dynamics  (Click for detail)
  3. Press Release: Union Cabinet nods to constitution of SIT on black monies stashed abroad  (Click for detail)
  4. Corporate Affairs Ministry to be clubbed with Finance Ministry  (Click for detail)
  5. Govt goes all out to woo investors  (Click for detail)


 Golden Rules:

  "The size of our problems is nothing
as compared to our ability to solve them.
We always over-estimate problems and
under-estimate our ability"


  Thanks & Regards


Voice of CA 

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