Tax updates March, '19

TAX UPDATES – MARCH ‘19 ROUND UP
BY CA. REETIKA G AGARWAL
NEWS
1. Signing of Inter-Governmental Agreement for
exchange of country by country reports
between India and the United States of
America-Press release dated 27.03.2019.
2. CBDT notifies ‘Nodal Officer, PM-KISAN’ for
furnishing specified information u/s 138
[Ref:-Notification S.O. 1065(E) [NO.12/2019
(F.NO.FEMA 20(R)5/2019-RB)], Dated 27-2-
2019]
3. CBDT extends term of Task Force on Direct Tax
by 3 months to May 31, 2019
[Ref:-Office Order
[F.NO.370149/230/2017], Dated 28-2-2019]
4. Co’s fulfilling conditions of ‘Angel Tax
Notification’ eligible for Sec. 56(2)(viib) relief
[Ref:-Notification no. SO 1131(E) [NO.13/2019
(F.NO. 370142/5/2018-TPL(PT))], Dated 5-3-
2019]
5. CBDT notifies certain entities for the purpose of
sec. 35 relief
[Ref:-Notification No.
17/2019[F.NO.203/10/2018/ITA-II], Dated 11-
3-2019]
6. ‘Prayagraj Mela Pradhikaran’ notified under
section 10(46)
[Ref:-Notification No. SO 1372(E) [NO.22/2019
(F.NO.300196/14/2019-ITA-I)], Dated 14-3-
2019]
7. Govt. notifies ‘HUDCO’ for the purpose of TDS
exemption u/s 194A
[Ref:-Notification No. SO 1399(E) [NO.26/2019
(F.NO.275/15/2018-IT(B)], Dated 20-3-2019]
8. B.S. Yedyurappa can’t be held guilty for making
payments to BJP leaders on basis of xerox
papers
[Ref:-PIB PRESS RELEASE, Dated 22-3-2019]
9. Income Tax Department carries out more
search actions in the J&K Region
[Ref:-Press Release New Delhi, Dated 29th
March, 2019]
10. CBDT notifies SEBI (Mutual Finds), Regulations,
1996 as ‘specified regulations’ for sec. 9A
purpose
[Ref:-Notification No.1272 New Delhi, Dated
20th March 2019]
11. CBDT enables filing of revised return online for
ITRs filed manually
[Ref:-
https://www.taxmann.com//topstories/22233
0000000018199/cbdt-enables-filing-of-revised-
return-online-for-itrs-filed-manually.aspx]
12. CBDT increases tax free gratuity limit from Rs.
10 lakh to Rs. 20 lakh
[Ref:-Notification No. SO 1213(E) New Delhi,
Dated 8th March 2019]
13. India and Brunei sign Tax Information Exchange
Agreement.
**************

OECD
1. The Kingdom of the Netherlands and Georgia
deposit instruments of acceptance or
ratification for the Multilateral BEPS
Convention.
[Ref:-http://www.oecd.org/tax/beps/the-
kingdom-of-the-netherlands-and-georgia-
deposit-instruments-of-acceptance-or-
ratification-for-the-multilateral-beps-
convention.htm]
2. Global Forum on tax transparency reveals
compliance ratings for further seven
jurisdictions.
[Ref:-http://www.oecd.org/tax/global-forum-
on-tax-transparency-reveals-compliance-
ratings-for-further-seven-jurisdictions.htm]
3. Public consultation on the tax challenges of
digitalization.
[Ref:-http://www.oecd.org/tax/beps/public-
consultation-tax-challenges-of-digitalisation-
13-14-march-2019.htm]
4. OECD and United Arab Emirates renew
partnership to strengthen tax co-operation.
[Ref:-http://www.oecd.org/tax/oecd-and-
united-arab-emirates-renew-partnership-to-
strengthen-tax-co-operation.htm]
5. Public comments received on the possible
solutions to the tax challenges of digitalization.
[Ref:-http://www.oecd.org/tax/beps/public-
comments-received-on-the-possible-solutions-
to-the-tax-challenges-of-digitalisation.htm]
6. Cameroon and Morocco launch new South-
South co-operation programme under the Tax
Inspectors without Borders initiative.
[Ref:-http://www.oecd.org/tax/cameroon-
and-morocco-launch-new-south-south-co-
operation-programme-under-the-tax-
inspectors-without-borders-initiative.htm]
7. Morocco joins the Inclusive Framework on
BEPS.
[Ref:-Http://www.oecd.org/tax/beps/inclusive
-framework-on-beps-composition.pdf]
8. New Beneficial Ownership Toolkit will help tax
administrations tackle tax evasion more
effectively.
[Ref:-http://www.oecd.org]
**************

DOMESTIC TAX CASE LAWS
SUPREME COURT
1. Sec. 80HH deduction is available out of gross
profit without deduction of dep. & investment
allowance. [Vijay Industries v CIT [2019] 103
taxmann.com 454 (SC)]
2. Where assessee had taken loan from a bank
and it instead of payment of interest liability
accrued during year obtained further loan from
bank and sought to adjust interest liability in
said loan and further it claimed deduction of
interest liability, Explanation 3C to section 43B
was squarely applicable in facts of instant case
and Assessing Officer had rightly disallowed
deduction as claimed by assessee. [CIT v
Gujarat Cypromet Ltd [2019] 103 taxmann.com
346 (SC)]
3. The provisions of section 142(2C), as they stood
prior to the amendment whereby words 'suo
motu' were inserted in sub-section (2C) of
section 142 with effect from 1-4-2008 by the
Finance Act, 2008, did not preclude the exercise
of jurisdiction and authority by the Assessing
Officer to extend time for the submission of the
audit report directed under sub-section (2A) of
section 142 without an application by assessee
and the said amendment was intended to
remove an ambiguity and is clarificatory in
nature. [CIT v Ram Kishan Dass [2019] 103
4. Where High Court upheld Tribunal's order that
in absence of any exempt income, disallowance
under section 14-A of any amount was not
permissible, SLP filed against said decision was
to be dismissed. [Pr. CIT v Oil Industry
Development Board [2019] 103 taxmann.com
326 (SC)]
5. Where High Court concluded that wherever
appeal could not be decided by Tribunal due to
pressure of pendency of cases and delay in
disposal of appeal was not attributable to
assessee in any manner, interim protection of
stay could continue beyond 365 days in
deserving cases, SLP filed against said decision
was to be dismissed. [Pr. CIT v Comverse
Network Systems India (P.) Ltd. [2019] 103
6. Entire/whole amount of difference between
Statutory Minimum Price (SMP) and Additional
Price (SAP) fixed for sugarcane cannot be said to
be an appropriation of profit, only component
of profit worked out while determining final
price can be said to be an appropriation of
profit and rest of amount is to be considered as
deductible expenditure. [CIT v Tasgaon Taluka
S.S.K. Ltd [2019] 103 taxmann.com 57 (SC)]
7. Ex-Chairman's health ailment was sufficient
cause shown by appellant for condonation of
delay of 224 days in filing appeals, High Court
ought to have accepted same. [Aakash Lavlesh
Leisure (P.) Ltd. v ITO [2019] 103 taxmann.com
248 (SC)]
8. SetCom rightly rejected application if assessee
failed to offer any explanation about nature of
exp. Claimed. [Rashmi Infrastructure
Developers Ltd. v ITSC [2019] 103
9. Income from letting out shops in mall along
with various amenities is taxable as business
income. [CIT v Oberon Edifices & Estates (P.)
Ltd. [2019] 103 taxmann.com 413 (Kerala- HC)]
10. SC granted SLP against HC's ruling refusing
condonation of delay in filing of revenue's
appeal. [CIT v Progressive Education Society
[2019] 103 taxmann.com 163 (SC)]
11. Where High Court upheld Tribunal's order that
in view of copies of invocies and challans, proof
of payments, bank statements, transportation
payments, vouchers for movement of goods
etc, it could be concluded that purchase
transactions between assessee and 'D' were not
bogus or fraudulent and, thus, addition could
not be made under section 69C, SLP filed
against decision of High Court was to be

dismissed. [CIT v Century Plyboards (I) Ltd.
[2019] 103 taxmann.com 179 (SC)]
12. Where High Court upheld order passed by
Tribunal deleting disallowance made under
section 14A holding that explanation of
assessee and amount offered to tax could not
have been rejected by Assessing Officer in
arbitrary manner, SLP filed against said decision
was to be dismissed. [Pr. CIT v Hero Corporate
Service Ltd. [2019] 103 taxmann.com 200 (SC)]
13. SLP dismissed against High Court ruling that for
purpose of computing capital gains under
section 45(3), value of assets recorded in books
of firm on date of transfer would be deemed to
be full value of consideration received or
accrued as a result of transfer. [Pr. CIT v Dr. D.
Ramamurthy [2019] 103 taxmann.com 24 (SC)]
14. SLP dismissed against High Court ruling that
where seized documents were not in name of
assessee, no action could be undertaken in case
of assessee under section 153C and further
entire decision being based on huge amounts
revealed from seized documents not being
supported by actual cash passing hands,
additions under section 69C were not
sustainable. [Pr. CIT v Krutika Land (P.) Ltd.
[2019] 103 taxmann.com 9 (SC)]
15. Where High Court upheld Tribunal's order
quashing reassessment proceedings on ground
that reasons recorded by assessing authority for
reopening assessment were never
communicated to assessee, SLP filed against
said decision was to be dismissed. [Pr. CIT v V.
Ramaiah [2019] 103 taxmann.com 202 (SC)]
16. SLP dismissed against High Court ruling that in
case of sale of property, assessee was required
to offer capital gain only in respect of amount
actually received by him as per sale deed even
though a part of sale consideration was also
received by confirming party. [Pr. CIT v
Lalitaben Govindbahi Patel [2019] 103
17. SLP dismissed against order of High Court
holding that deduction under section 80-I
should be given on profit without reducing
deduction under section 80HH. [CIT v
Hindustan Level Ltd [2019] 103 taxmann.com
89 (SC)]
18. No SLP against order of HC deleting penalty on
ground that assessee had made full and true
disclosure. [Pr. CIT v Samir Suryakant Sheth
[2019] 103 taxmann.com 198 (SC)]
19. Where High Court upheld Tribunal's order
holding that interest earned by assessee on
sums lent to contractor constituted its business
income, SLP filed against decision of High Court
was to be dismissed. [Pr. CIT v Nabinagar
Power Generating Co. (P.) Ltd. [2019] 103
20. Where High Court confirmed penalty order
passed by Tribunal rejecting assessee's
explanation that it had claimed deduction in
respect of tax paid on basis of wrong advice
given by Chartered Accountant, SLP filed against
decision of High Court was to be dismissed.
[Jivanlal and Sons v Asst CIT [2019] 103
21. No reassessment to disallow pension paid to
retiring partner in accordance with partnership
deed. [Dy. CIT v Deloitte Haskins & Sells
Chartered Accounts [2019] 102 taxmann.com
443 (SC)]
22. Where High Court refused to condone delay in
filing revenue's appeal and dismissed same
being barred by limitation, in view of fact that
main cause of delay was difference of opinion
between two officers and ultimately legal
opinion was taken and, it was decided to file
appeal, it was opined that High Court should
have heard appeal on merits and, therefore, SLP
filed against decision of High Court was to be
granted. [CIT v Progressive Education Society
[2019] 102 taxmann.com 402 (SC)]

23. Where Settlement Commission passed an order
under section 245D(4) making certain additions
and waiving interest chargeable under sections
234A, 234B and 234C, matter was remanded
back to Settlement Commission for deciding
issue relating to waiver of interest payable
under sections 234A, 234B, and 234C afresh
keeping in view scope and extent of powers of
Settlement Commission in relation to waiver of
interest as laid down in two decisions of
Supreme Court. [Kakadia Builders (P.) Ltd. v
ITO [2019] 103 taxmann.com 53 (SC)]
24. Where assessee received share
capital/premium, however there was failure of
assessee to establish creditworthiness of
investor companies, Assessing Officer was
justified in passing assessment order making
additions under section 68 for share capital /
premium received by assessee company. [Pr.
CIT v NRA Iron & Steel (P.) Ltd [2019] 103
25. Where AO having rejected assessee claim for
exemption under sections 11 and 12, passed a
penalty order under section 271(1)(c) for raising
a false claim, in view of fact that assessee
succeeded in quantum appeal and, thus, High
Court set aside penalty order as well, SLP filed
against said decision was to be dismissed. [CIT v
Ahmedabad Urban Development Authority
[2019] 103 taxmann.com 82 (SC]
Tribunal allowing weighted deduction under
section 35(2AB) to assessee on account of
expenses incurred for lunch, refreshment etc. of
visiting scientists after treating same as
expenses incurred for R&D activity, SLP filed
against said order was to be dismissed. [Pr. CIT
v Sun Pharmaceutical Industries Ltd. [2019]
103 taxmann.com 87 (SC)]
Tribunal allowing assessee's claim for
registration under section 12AA having regard
to fact that assessee was constituted by
Government for imparting training to various
officers /officials involved in criminal justice
system with no profit motive at all, SLP filed
against decision of High Court was to be
dismissed. [CIT v Institute of Correctional
Adminstration [2019] 103 taxmann.com 85
(SC)]
*****************

HIGH COURT
28. Where assessee against order of assessment
filed appeal before Commissioner (Appeals) and
also filed application before Assessing Officer
for stay of recovery of demand and Assessing
Officer dismissed application on plea that mere
filing of appeal against assessment order was
not a ground for stay of demand, since
Assessing Officer had merely rejected
application for stay by way of a non-speaking
order, he was to be directed to pass orders de
novo after hearing assessee. [Mrs. Kannammal
v ITO [2019] 103 taxmann.com 364 (Madras-
HC)]
29. ICAI has jurisdiction to entertain complaint
against CA for sexual harassment. [Lalit Agrawal
v ICAI [2019] 102 taxmann.com 466 (Delhi-HC)]
30. No reassessment after 4 years if assessee had
duly disclosed facts of acquisition and transfer
of asset. [CIT v Marhatta Chamber of
Commerce Industries and Agriculture [2019]
103 taxmann.com 74 (Bombay-HC)]
31. Issue pertaining to section 80-IC deduction
could not be re-examined by Commissioner in
proceedings under section 263 as Assessing
Officer's order on said issue had merged with
Commissioner (Appeals) order. [Pr. CIT v Oil
India Ltd. [2019] 103 taxmann.com 339
(Gauhati-HC)]
32. Cost of acquisition of shares on conversion of
FCCB is closing price of shares on NSE on date of
conversion. [Kingfisher Capital CLO Ltd. v CIT
[2019] 103 taxmann.com 446 (Bombay-HC)]
33. Where assessee failed to place on record
relevant material before Assessing Officer to
prove creditworthiness and capacity of his
nephew, who was a salaried person, to advance
a gift of huge cash amount to assessee who was
an affluent businessman, addition made under
section 68 in respect of such gift amount was to
be confirmed. [Narendra Kumar Sakaria v Asst
CIT [2019] 102 taxmann.com 473 (Madras-HC)]
34. HC justified in denial of sec. 54B relief by ITAT
relying on spot inquiry report of income-tax
inspector. [Rajiv Dass v Dy.CIT [2019] 103
taxmann.com 192 (Delhi-HC)]
35. Where assessee received loan from two
companies which were substantially involved in
money lending business, Tribunal rightly
concluded that proviso (ii) to section 2(22)(e)
would apply to assessee's case and addition of
deemed dividend made to assessee's income
was to be deleted. [CIT v Bharat Hotels Ltd.
[2019] 103 taxmann.com 295 (Delhi-HC)]
36. Purchase of jewellary in cash rightly disallowed
as assessee failed to justify his compulsion for
cash payment. [Natesan Krishnamurthy v ITO
[2019] 103 taxmann.com 342 (Madras-HC)]
37. HC directed revenue to not to pass penalty
order during pendency of 'Uber' appeal against
TDS demand. [Uber India Systems (P.) Ltd. v Jt.
CIT [2019] 103 taxmann.com 336 (Bombay-
HC)]
38. Banks are allowed to claim share issue expenses
as preliminary expenses. [Dhanalakshmi Bank
Ltd. v CIT [2019] 102 taxmann.com 442 (Kerala-
HC)]
39. Sec. 12AA registration couldn't be cancelled just
because society was engaged in propagating
Christianity. [CIT v Emmanuel Bible Institute
Samiti Dadwada, Kota [2019] 103
taxmann.com 294 (Rajasthan-HC)]
40. Where assessee, a registered trust, filed return
disclosing NIL income after taking benefit of
section 11 and Assessing Officer passed
assessment order under section 143(3)
accepting declared income and subsequently he
reopened said assessment for reason that
assessee had received sizable donation from
one 'H', which was also a registered trust, and

spent such sum on officers/directors of 'H' and
claimed same as reimbursement of expenditure
and such receipt was hit by section 13(3)(b),
reopening of assessment was justified. [Hinduja
Foundation v ITO [2019] 103 taxmann.com 337
(Bombay-HC)]
41. In terms of Rule 127, when Assessing Officer
issues reassessment notice, he is under a duty
to access available PAN data base of addressee
or address available in last income return filed
by addressee. [Veena Devi Karnani v ITO [2019]
102 taxmann.com 470 (Delhi-HC)]
42. Audit objection being only an information,
reassessment notice based on said audit
objection is not sustainable. [FIS Global
Business Solutions India (P.) Ltd. v Asst CIT
[2019] 102 taxmann.com 471 (Delhi-HC)]
43. Where assessee had not raised dispute
regarding taxability of Government subsidy,
received by it under a Government scheme,
during entire settlement proceedings till
settlement order was passed, assessee could
not urge Commissioner to examine such an
issue in exercise of revisional powers.
[Mandhana Industries Ltd. v Pr. CIT [2019] 103
taxmann.com 301 (Bombay-HC)]
44. HC upholds constitutional validity of section
234E imposing fee for delayed filing of TDS
statements. [Biswajit Das v UOI [2019] 103
taxmann.com 290 (Delhi-HC)]
45. Failure to attend proceedings can't be a ground
to reject application for condonation of delay.
[Durgeshwari Hi-Rise & Farms (P.) Ltd. v CCIT
46. Where assessee firm decided to re-organise its
business whereby couple of partners were
retired and fresh partners were inducted but
assets and liabilities relating to business
remained with assessee-firm, it was a case of
reconstitution of firm and thus, no capital gains
could be said to arise under section 45(4). [G.H.
Reddy & Associates v Asst CIT [2019] 102
taxmann.com 399 (Madras-HC)]
47. Where assessee raised a plea that addition
made to its taxable income under section 68 in
respect of bogus share capital should be
restricted to a lower amount because said
amount kept rotating in relevant year, in view
of fact that amount in question was not
returned or refunded, plea raised by assessee
deserved to be rejected. [Alfa Bhoj Ltd. v Dy.
CIT [2019] 102 taxmann.com 392 (Delhi-HC)]
48. Delay in depositing tax under IDS, 2016 couldn't
be condoned on account of personal reasons.
[Sadhana R. jain v CBDT [2019] 103
49. In case of assessee, a 100 per cent export-
oriented unit, engaged in manufacture and
export of garments, claim for exemption under
section 10A was to be allowed in respect of
income earned from sale of export quota and
interest on margin money deposited for
opening Letters of Credit. [Camiceria Apparels
India (P.) Ltd. v Asst CIT [2019] 103
taxmann.com 238 (Madras-HC)]
50. Where director of assessee-company obtained
cash in excess of Rs. 20,000 as loan from a
financier and same was deposited by him in
cash in bank account of company, merely
because director took cash loans from financier,
and deposited it in current account of assessee-
company on very same day and assessee
utilized it to pay salaries, rent and EMI
commitments could never be a ground to be
taken as a mitigating factor to escape from
rigour of levy of penalty under section 271D.
[Vasan Healthcare (P.) Ltd. v Addl CIT [2019]
103 taxmann.com 26 (Madras-HC)]
51. Income-tax Act prevails over Canon Law; Salary
received by Nuns/Missionaries is taxable. [UOI v
Society of Mary Immaculate (Tamil Nadu),
Madras [2019] 103 taxmann.com 333 (Madras-
HC)]

52. Where assessee sold its entire sahreholding in
its subsidiary UHEL to a third party and, AO took
a view that it was a case of slump sale 2(42C), in
view of fact that what was transferred were
mere shares of assessee in UHEL and there had
been no transfer of an undertaking of UHEL,
such change in mere pattern of shareholding of
UHEL would not make it a case of slump sale,
and,thus, impugned order passed by AO was to
be set aside. [Pr. CIT v UTV Software
Communication Ltd. [2019] 103 taxmann.com
12 (Bombay-HC)]
53. Compensation paid by developers to allottees
of flats for surrendering their rights is allowable
exp. [Gopal Das Estates & Housing (P.) Ltd. v
CIT [2019] 103 taxmann.com 334 (Delhi-HC)]
54. Notice to be issued in name of legal heir in case
of reopening of assessment of deceased person,
[Sumit Balkrishna Gupta v Asst CIT [2019] 103
55. HC deleted additions as no order was passed by
Rent Control Tribunal fixing higher rent of
assessee’s premises. [Pr. CIT v Seth Properties
56. No coercive action against payee if payer failed
to deposit TDS collection with Govt. [Pushkar
Prabhat Chandra Jain v UOI [2019] 103
57. Sec. 10(23C)(vi) exemption can't be denied if
institution exists solely for educational purposes
and not for profit. [Malco Vidyalaya
Matriculation Higher Secondary School v CCIT
[2019] 103 taxmann.com 104 (Madras-HC)]
58. Interest on refund allowed from year of tax
deduction and not from year of filing of return if
PCM method is followed. [Pr. CIT v Kumagai
Skanska HCC ITOCHU Group [2019] 102
59. Addition made under Sec. 69A is justified where
bills are manipulated to increase stock or
reduce sales. [Clarity Gold (P.) Ltd. v Pr. CIT
[2019] 102 taxmann.com 421 (Rajasthan-HC)]
60. Expenditure incurred by assessee-company
towards repairs and renovation of its hotel
properties such as dismantling mangalore tiles,
laying laterite stones, laying plaster, plaster of
paris and painting, waterproofing, replacement
of tiles and plumbing was allowable revenue
expenditure. [Pr. CIT v Goa Tourism
Development Ltd [2019] 102 taxmann.com 437
(Bombay-HC)]
61. Where Tribunal rejected assessee's cross-
objection and assessee did not appeal and
when High Court decided revenue's appeal in
Revenue's favour, assessee filed rectification
application before Tribunal regarding earlier
cross-objection, same would be barred by
principle of finality. [Pr. CIT v N.R. Portfolio (P.)
Ltd. [2019] 103 taxmann.com 17 (Delhi-HC)]
62. Filing of revised return for re-computation of
deduction claimed under section 10A
permissible. [Pr. CIT v Oracle (OFSS) BPO
Services Ltd. [2019] 102 taxmann.com 396
(Delhi-HC)]
63. No defence can be based on any right in regard
to property held benami. [Rajeev Tandon v
Smt. Rashmi Tandon [2019] 103 taxmann.com
7 (Delhi-HC)]
64. Where assessee filed appeal before High Court
with a delay of 507 days and sought
condonation of delay stating that ex-employee
of assessee who received order of Tribunal put
it in his drawer and left company without
informing anybody about such orders and it was
only about a month before filing of instant
appeal when his substitute new employee
found papers from drawer, there was no
sufficient explanation for delay. [Vama
Apparels (India) (P.) Ltd. v Asst CIT [2019] 102
***************

INCOME TAX APPELLATE TRIBUNAL
65. In case of sale of flat it is date of allotment of
flat and not date of giving possession of flat
which has to be considered as date for
computing holding period of 36 months. [Richa
Bagrodia v Dy. CIT [2019] 103 taxmann.com 73
(Mumbai - Trib.)]
66. Compensation received for termination of
construction of railway siding was capital
receipt. [Dy. CIT v Rishabh Infrastructure (P.)
Ltd. [2019] 103 taxmann.com 14 (Raipur -
Trib.)]
67. Where assessee-company had provided balance
sheet of investor companies along with their
profiles and subscriber companies themselves
had provided bank statements and their
respective PAN details, no section 68 addition
was called for on account of increase in share
application money. [Floursih Builders &
Developers (P.) Ltd. v Dy. CIT [2019] 103
taxmann.com 72 (Delhi - Trib.)]
68. No denial of sec. 54B relief if land sold by
assessee was classified as agricultural land in
revenue record. [Murtuza Shabbir
Jamnagarwala v ITO [2019] 103 taxmann.com
166 (Pune - Trib.)]
69. If under provision of section 4 an amount does
not bear character of income and, hence, not
chargeable to tax then same cannot be
converted into an 'income' only because payer
of sum deducts tax under misconception of law.
[Administrator of Estate of Lt. Edulji Framroze
Dinshaw v CIT [2019] 103 taxmann.com 452
(Mumbai - Trib.)]
70. Where assessee purchased shares as stock-in-
trade for purpose of trading, mere fact that
assessee incidentally received dividend on
those shares as declared by Investee Company,
no case was made out for invoking provisions of
section 14A. [Nice Bombay Transport (P.) Ltd. v
Asst. CIT [2019] 103 taxmann.com 338 (Delhi -
Trib.)]
71. Sum received by partner on retirement from
firm is exempt from tax. [James P. D'Silva v Dy.
CIT [2019] 103 taxmann.com 167 (Mumbai -
Trib.)]
72. Sec. 10(23C) exemption was available if
assessee was conducting skill training
programmes for students. [Process-Cum-
Product Development Centre v Addl. CIT
[2019] 103 taxmann.com 191 (Delhi - Trib.)]
73. ITAT remanded matter back to TPO for
determination of ALP of royalty paid for use of
‘Vodafone’ trademark. [Vodafone India Ltd. v
Asst CIT [2019] 103 taxmann.com 390 (Delhi -
Trib.)]
74. Sum received from sale of rights of ‘Technical
Concept’ to safeguard website is taxable u/s
28(va). [Ashish Tandon v Asst CIT [2019] 103
taxmann.com 315 (Ahmedabad - Trib.)]
75. Books of account couldn't be rejected for one
source of income while retaining same for other
source. [Shiv & Company v ITO [2019] 103
taxmann.com 341 (Ahmedabad - Trib.)]
76. Law doesn't restrict corporates to make gifts;
no capital gain on shares gifted by NBFC to
group concerns. [Jayneer infrapower &
Multiventures (P.) Ltd. v Dy. CIT [2019] 103
taxmann.com 118 (Mumbai - Trib.)]
77. Issue of shares to director to comply with a
covenant in loan agreement with bank couldn't
be taxed u/s 56(2)(vii). [Asst CIT v Subhodh
Menon [2019] 103 taxmann.com 15 (Mumbai -
Trib.)]
78. No TDS was required on exp. recorded on
estimated basis if assessee was following
project completion method. [Bengal Peerless
Housing Devet. Co. Ltd. v Dy. CIT [2019] 103
taxmann.com 298 (Kolkata - Trib.)]
79. Loss on account of premium paid to banks in
order to be secure against Forex fluctuations

isn't speculation loss. [SC Johnson Products (P.)
Ltd. v Dy. CIT [2019] 103 taxmann.com 64
(Delhi - Trib.)]
80. Payments to various artists participating in
reality shows are liable for sec. 194C TDS & not
sec. 194J TDS. [Malayalam Communications
Ltd. v ITO [2019] 103 taxmann.com 63 (Cochin
- Trib.)]
81. No question of accumulation of income if trust
had spent more than 100% of its income during
the year. [Dy. CIT v Shree Surat Jilla Leuva
Patidar Samaj Trust [2019] 103 taxmann.com
395 (Surat-Trib.)]
82. Additional evidences such as ledger account,
bank statement, contractor's bills necessary to
decide issue of unexplained investment in
proper perspective to be admitted by Tribunal,
even if the assessee failed to furnish these
evidences earlier before lower authorities.
[Dharmendra Sevantilal Shah v ITO [2019] 103
taxmann.com 394 (Surat-Trib.)]
83. Assessing Officer could not make additions to
income of assessee-company only on basis of
sworn statement of its managing director
recorded under section 131 during course of
survey without support of any corroborative
evidence. [ITO v Toms Enterprises [2019] 103
taxmann.com 289 (Cochin - Trib.)]
84. Sec. 69 additions couldn't be made in respect of
investments made in earlier years. [Km. Preeti
Singh v ITO [2019] 103 taxmann.com 293
(Delhi - Trib.)]
85. Where assessee engaged in business of
bottling-cum-manufacturing of soft drink,
received advances/deposits towards security
against bottles & cases which was written off
during relevant assessment year, in view of fact
that amount received in advance was being
treated as non-trading liabilities as depreciation
was allowed thereon and, moreover, no benefit
was received during relevant year in respect of
amount so written off, provisions of section
41(1) could not be invoked in assessee's case.
[Poona Bottling Company (P.) Ltd v Asst CIT
[2019] 103 taxmann.com 239 (Pune - Trib.)]
86. Credit in bank account simply or any other raw
information available to Assessing Officer can't
be loosely called as books of account under
section 68. Invocation of section 68 sans valid
and proper books of account of assessee is
invalid and accordingly addition made by
Assessing Officer as sustained by Commissioner
(Appeals) based on same was incorrect and had
to be reversed. [Vinesh Maheswari v ITO
87. Where entries in assessee's trading account
including quantitative tally of purchases,
opening stock, sales and closing stock were
found to be correct, no addition on account of
unexplained purchases could be made. [Manoj
Sharma v ITO [2019] 103 taxmann.com 105
(Delhi - Trib.)]
88. Mumbai ITAT waves off concealment penalty
levied on ‘SRK’ on deemed rental income of
gifted Dubai Villa. [Dy. CIT Shahrukh Khan
[2019] 103 taxmann.com 252 (Mumbai - Trib.)]
89. No sec. 13(1)(c) violation if trustee was
exclusively working for trust; sec. 11 exemption
allowable. [Apne Aap Women Worldwide
(India) Trust v ITO [2019] 102 taxmann.com
400 (Mumbai - Trib.)]
90. Period of holding of ESOPs shall be counted
from date of grant even assessee didn’t have
vesting rights, [N.R. Ravikrishnan v Asst CIT
[2019] 102 taxmann.com 418 (Bangalore -
Trib.)]
*************

TRANSFER PRICING CASE LAWS
91. SLP dismissed against High Court ruling that if
there is any delay in realization of a trading
debt arising from sale of goods or services
rendered in course of carrying on of business,
assessee is liable to be visited with transfer
pricing adjustment on account of interest
income short charged/uncharged. [MC Kinsey
Knowledge Centre India (P.) Ltd. v Pr. CIT
[2019] 102 taxmann.com 439 (SC)]
92. No TP adjustments on share purchase at high
premium as it doesn't amount to revenue
receipt. [Pr. CIT v PMP Auto Components (P.)
Ltd. [2019] 103 taxmann.com 284 (Bombay-
HC)]
93. TPO can't determine ALP of specified domestic
transactions not referred to him by AO. [Times
Global Broadcasting Company Ltd. v UOI
94. TPO while determining ALP of a transaction has
got limited jurisdiction to ascertain ALP of
transaction and he cannot sit in judgment to
ascertain whether services are indeed required
by assessee or not; it is beyond scope of TPO's
jurisdiction to comment on requirement of
services by assessee. [Tata BlueScope Steel Ltd.
v Dy. CIT [2019] 103 taxmann.com 287 (Pune -
Trib.)]
95. ITAT remanded matter to consider issue of AMP
exp. in absence of any specific agreement to
incur it. [Canon India (P.) Ltd. v Asst CIT [2019]
103 taxmann.com 232 (Delhi - Trib.)]
96. Where assessee is not a foreign company and
TPO has not proposed any variation to return
filed by assessee, assessee for purposes of
section 144C(15)(b) is not an 'eligible assessee';
consequently, DRP would have no jurisdiction
to pass draft assessment order. [Asst CIT v
ESPN Star Sports Mauritius SNC et Companie
97. Where Indian subsidiary incurred AMP
expenses for promoting brand owned by French
AE, in absence of an agreement between
assessee and said AE to share/reimburse AMP
expenditure incurred by assessee in India,
transaction in question would not be an
international transaction. [L'Oreal India (P.) Ltd.
v ACIT [2019] 102 taxmann.com 378 (Mumbai -
Trib.)]
98. Application of 'cash profit margin', under
TNMM, in manufacturing industry is
appropriate for reason that same eliminates
impact on profitability of differences in respect
of technology, age of assets used in production,
capacity utilization and depreciation expenses
and its policies and interest expenses. [Dy. CIT v
Epcos Ferrites Ltd. [2019] 102 taxmann.com
422 (Kolkata - Trib.)]
99. TPO can select comparables in respect of which
results aren't available in public domain.
[Philips Medical Systems (P.) Ltd. v ITO [2019]
102 taxmann.com 441 (Kolkata - Trib.)]
100. Where TPO had changed over to CUP method
as MAM by rejecting TNMM method
consistently being applied by assessee without
any change in facts and law, adjustment made
by TPO was to be set aside. [Asst CIT v
Glenmark Pharmaceuticals Ltd [2019] 102
*************

INTERNATIONAL TAXATION CASE LAWS
101. Where ONGC had benefit of services provided
by assessee, a Dutch company, but did not gain
any technical knowledge, experience or skill
which would enable ONGC to undertake such
an endeavour independently in future without
aid and assistance of assessee, payment made
to assessee for such services would not fall
within scope of article 12 of DTAA between
India and Netherlands and would not be taxable
in India. [ONGC v ADIT [2019] 103
taxmann.com 165 (Delhi - Trib.)]
102. Buying agency commission received by
assessee, a Hong Kong based company, for
rendering buying agency services to its related
company AIMPL and other unrelated
customers, was not liable to tax in India as fee
for technical services. [Dy. Cit v Adidas
Sourcing Ltd [2019] 102 taxmann.com 469
(Delhi - Trib.)]
103. Matter of taxability of payment for licensing of
software remanded to file of DRP with a
direction to re-decide issue in light of latest
decision of Tribunal on same subject. [Cast
Software Inc v Dy. CIT [taxmann.com 417
(Delhi - Trib.)]2019] 102
104. FOX international’ not liable to pay tax on
agency commission in absence of territorial
nexus with India. [Fox International Channel
Asia Pacific Ltd. v Dy. CIT [2019] 103
*******************
Disclaimer: Above said information are taken
from publically available resources and
believed to be accurate.

Tax updates March, '19

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