Ms.Prema Gopal Rao v DCIT (I.T.A. No.8653/Mum/2011 dated 07.01.2015) Mumbai ITAT Background: The assessee filed original return of income on 10.09.2004 declaring total income of Rs.12,16,600/-, which included Long Term Capital Gain on sale of Shares of Rs.3,60,305. The case was selected for scrutiny vide issue of notice u/s 143(2). After the receipt of the said notice, the assessee filed revised return of income, wherein the assessee revised the Long term Capital gains upwards to Rs.14,87,789/-. The AO completed the assessment as per the Revised return of income by making certain disallowances. In the penalty proceedings, the AO took the view that the assessee has revised the return of income only after the enquiry was initiated by him and accordingly, levied penalty on the upward adjustment of long term capital gains. CIT(A) also confirmed the penalty on the reasoning that filing of revised return of income was not voluntary, since it was filed after selection of the original return of income for scrutiny.
Yearly Archives: 2015
Garware Chemicals Ltd. v DCIT (IT APPEAL NO. 7819 (MUM.) OF 2010 dated 21.01.2015) Mumbai ITAT Background: The assessee is engaged in the business of manufacturing of various Petro Chemical products. During the assessment proceedings, the Assessing Officer noted that the assessee has claimed the deduction of Rs. 14 crore u/s 43B of Income Tax Act. The AO found that the claim of the assessee u/s 43B was in connection with the discharge of interest amount payable to IDBI amounting to Rs. 14 crore by way of conversion of the same into equity shares of the assessee company. The AO held that in view of the Explanation 3C of section 43B, the claim of the assessee is not allowable and accordingly rejected. The CIT(A) also did not accept the contention of the assessee and confirmed the disallowance made by Assessing Officer by following the decision of this Tribunal in the case of SRF Ltd. v. DCIT (34 SOT 1).
Allotment of equity shares in lieu of interest liability is a mode of payment allowable ...
Kancast Pvt. Ltd v ITO (ITA No.1265/PN/2011 dated 19.01.2015) – Pune ITAT Background: The assessee transferred factory land, building and shed for a consideration of Rs.3,12,04,000/- for land and building and Rs.47,96,000/- for other fixed assets. Out of the consideration of Rs 3,12,04,000 for land and building, amount of Rs 77,00,000 pertained to leasehold rights in land. The Assessing Officer noted that the value of land and building adopted by the registering authority for the purposes of stamp duty valuation under section 50C for the purpose of computing capital gains based on the Ready Reckoner rates of the State Government was Rs.5,75,93,000/-. The assessee contended that section 50C of the Act was not applicable as the assessee was only holding leasehold rights in the land and was not owner of the land. However, the Assessing Officer considered the stamp duty value of the consideration for land under section 50C at Rs.4,98,93,000/- (Rs.5,75,93,000/- minus Rs.77,00,000/-). In the first level appellate proceedings, the assessee reiterated that it did not transfer any land because it was not owning the land and therefore transfer of leasehold rights in land did not invite the provisions of section 50C of the Act. Reliance was placed on the ruling of Mumbai ITAT in the case of Atul G. Puranik vs. ITO vide ITA No.3051/Mum/2011 dated 13.05.2011. The CIT(A) dismissed the submission of the assessee and held that the Explanation below section 269UA(d)(i) of the Act makes it clear that the land, building, etc. included in the phrase ‘immovable property’ also includes any rights therein. Therefore, he upheld that the order of Assessing Officer was justified in applying the provisions of section 50C.
Provisions of section 50C not applicable on leasehold rights in land – Pune ITAT
ACIT v Sunland Metal Recycling (ITA NO.6454/Mum/2011 dated 10.12.2014) Mumbai ITAT Background: The assessee sold office premises to its sister concern for a sale consideration of Rs. 1.55 crores. The Assessing Officer considered the full sale consideration as per stamp duty authority valuation at Rs. 2,00,08,000/- in accordance with the provisions of section 50C of Income Tax Act. Accordingly, the Assessing Officer made an addition to the Short term Capital Gain. Subsequently, the Assessing Officer initiated penalty proceedings u/s 271(1)(c) for levy of penalty against the addition made to the Short term Capital Gain and levied a penalty of Rs. 22,12,069. The CIT(A) deleted the penalty by following the various decisions of Mumbai Tribunal on the point and held that there is no concealment of any particulars of income on the part of the assessee.