S. 2(47), 45 Capital reduction

When the assessee’s shareholding in TTSL was diminished as a result of a scheme of arrangement and restructuring, with no consideration being paid by TTSL to the assessee, the long-term capital loss arising from the reduction of capital should be permitted or offset against any other capital gain. Tata Sons Ltd. v. CIT [2024] 158 taxmann.com 601 (Mumbai - Trib.)

S. 28(ii) Non-renewal of contract is not Termination

The non-renewal of a contract should not be equated with termination. Consequently, the compensation received by the employee, in the absence of contract renewal, is considered a result of mutual agreement. Therefore, it falls outside the scope of taxation under section 28(ii). The provisions of section 56(xi) of the Act is also not applicable for the same reason Ms. Padma Rao v. CIT [2024] 159 taxmann.com 30 (Delhi - Trib.)

S. 54 Investment in new house in the name of spouse

When a non-resident individual, the assessee, sells a property in India and reinvests the sale proceeds in acquiring a new residential property in the name of her spouse, the assessee remains eligible for claiming a deduction under section 54. This eligibility stems from the fact that the sale proceeds have been appropriately invested in the acquisition of a new property within the stipulated time frame allowed by the relevant provisions.

In the cases of CIT v. Kamal Wahal [2013] 351 ITR 4 (Delhi) and CIT v. Ravinder Kumar Arora [2012] 342 ITR 38 (Delhi), has held that new house purchased in the name of the spouse of the assessee was eligible for claiming deduction under section 54F. The provisions of section 54F are pari-materia with the provisions of section 54 of the Act and thus, the principle derived equally applies to section 54 as well. The Hon’ble Jurisdictional High Court has also held in the various judgments that Purposive construction is to be preferred as against the literal construction, more so when even literal construction also does not say that the house should be purchased in the name of the assessee only. Section 54F/54 of the Act are the beneficial provisions which should be interpreted liberally in favour of the exemption/deduction to the taxpayer and deduction should not be denied.

Simran Bagga v. ACIT [2024] 158 taxmann.com 265 (Delhi - Trib.)

56(2)(vii)(b) Date of valuation

In a scenario where the assessee entered into an agreement in 2010, specifying the consideration for the purchase of immovable property, and the actual registration occurred in 2013, with a partial payment made by cheque in 2010 before the agreement date, it should be determined that the stamp value as of the agreement date in 2010 is relevant for the application of section 56(2)(vii)(b). Shyamkumar Madhavdas Chugh v. ACIT [2024] 158 taxmann.com 513 (Delhi - Trib.)

S 119 Condonation of application in Form 10

It was stated that, the delay in submitting Form 10 in this case was due to the oversight of the petitioner’s (Bar Council of India) officials who failed to notice the amendments. The assessment year 2016-17 marked the initial instance post these amendments. There is no evident reason to doubt the explanation provided by the petitioner to elucidate the delay in filing Form 10. Moreover, it is unclear how the petitioner would gain any advantage by delaying the submission of Form 10. It is the opinion that the Commissioner did not appropriately exercise the discretion granted for condoning the delay. Bar Council of India v. CIT [2024] 158 taxmann.com 311 (Delhi)

S 119 Condonation in filing return of Income o

The foreign company, as the assessee, hold back filing its income tax return for the pertinent assessment years due to a genuine belief that such filing might lead to the rejection of its applications before the AAR. Subsequently, upon receiving a ruling that confirmed the taxation of income in India, the company filed its return. In these circumstances, the delay in filing the return should be condoned under section 119(2)(b). Tiong Woon Project & Contracting (P.) Ltd. v. CBDT [2024] 158 taxmann.com 656 (Madras)

S 119 Condonation application

The assessee erroneously included the compensation received for the compulsory acquisition of its land in the taxable income and subsequently filed a revised return to rectify this error. The genuine belief held by the assessee that they paid more tax than what was actually due constitutes a ‘genuine hardship.’ The relevant authority should have, therefore, condoned the delay and considered the matter on its merits. K. S. Bilawala v. PCIT

S. 138 Providing Information to third party

Section 138(1)(b) of the Income-tax Act mandates that information relating to an assessee can only be supplied subject to the satisfaction of Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be. Hence Section 138(2) of the IT Act would prevail over Section 22 of the RTI Act. The CIC does not have the jurisdiction to direct furnishing of information, provided for in Section 138 of the IT Act. CPIO/Deputy Commissioner of Income-tax, HQ. Exemption v. Girish Mittal [2024] 158 taxmann.com 549 (Delhi)

S. 148 Reassessment not valid

The reassessment initiated for the assessee, lacking an independent inquiry by the Assessing Officer and solely relying on the Shah Committee Report, ought to be quashed. Especially considering the High Court’s prior determination that the observations in the Shah Commission Report were merely opinions and could not serve as the sole basis for reopening assessments that had already been finalized. Sociedade de Fomento Industrial (P.) Ltd. v. ACIT [2024] 158 taxmann.com 576 (Bombay)

S. 148 Reassessment not valid

The assessee filed returns along with a tentative profit and loss account and additional details such as cash flow statements and statements indicating the source and application of funds, which demonstrated an increase in capital and current accounts of partners. These details were thoroughly examined by the Assessing Officer during the assessment proceedings. The Assessing Officer accepted the returns as submitted by the assessee. Therefore, the Tribunal was justified in concluding that reassessments for the relevant assessment years were not warranted. Mangalam Publications v. [2024] 158 taxmann.com 564 (SC)

S. 148 Not valid

The Assessing Officer issued a reopening notice to the buyer (assessee) based on the alleged violation of Section 50C concerning a property purchase. However, it is crucial to note that Section 50C is applicable to the seller and not the buyer. Therefore, the reopening notice is to be quashed and set aside. Aruna Surulkar v. ITO [2024] 158 taxmann.com 677 (Bombay)

S. 148 Reopening is not valid

The Assessing Officer initiated a reopening notice based on the grounds that the assessee had debited certain expenditures, including delayed remittance of employees’ contributions to EPF on one occasion, consultancy for a project, registrar and share transfer agent fees, etc., which were deemed non-allowable under various provisions of the Income Tax Act. However, since the reasons recorded for reopening did not allege any failure on the part of the assessee to fully and truly disclose all material facts necessary for assessment, the reopening notice issued after four years should be nullified. Everest Kanto Cylinder Ltd. v. UOI [2024] 159 taxmann.com 51 (Bombay)

S. 148 Reopening not valid

The Assessing Officer issued a reopening notice against the assessee, citing the grounds of charging excessive share premium and lack of substantiation regarding the nature of share application money received. However, as the reasons recorded for reopening did not contest the fact that the assessee had indeed issued shares at a premium, and the Assessing Officer was only challenging the excessive share premium without doubting the underlying transaction, the impugned notice was deemed to be based solely on a change of opinion. Consequently, it should be set aside and quashed. Godrej Projects Development (P.) Ltd. v. ITO [2024] 159 taxmann.com 32 (Bombay)

S. 148 Reopening not valid

The Assessing Officer issued a reopening notice, citing that the assessee had invested from a common pool of funds and incurred common administrative and other expenditures, necessitating the application of section 14A. However, the information pertaining to these investments and shared expenditures had already been furnished by the assessee during the original assessment proceedings. The AO, having applied due consideration to this material, had subsequently passed an assessment order. Therefore, the issuance of the impugned reopening notice was deemed unjustified. Bajaj Energy Ltd. v. ACIT [2024] 158 taxmann.com 654 (Bombay)

S. 244A Interest on refund

The intimation indicated that the assessee was eligible for a refund, but the refund was not processed. Upon the assessee’s request to provide the SWIFT Code and IBAN, and considering that the delay in processing the return could not be attributed to the assessee, the revenue should be directed to pay interest on the refund amount at the rate specified in section 244A. Coda Global LLC v. DCIT [2024] 158 taxmann.com 458 (Madras)

S. 56, 263 Revision is invalid

The assessee had previously provided all relevant details regarding the issuance of a substantial share premium during the year under consideration during the original assessment proceedings. The Assessing Officer had thoroughly examined and ruled in favor of the assessee. The Commissioner, without proper justification, set aside the assessment order under section 263. The audited balance sheet has been disbelieved by the Ld. PCIT on the ground that the balance sheet as on 02/03/2015 has not been approved by the Annual General Meeting the same cannot be considered for the purpose of Rule 11UA of the Rules. The said observation of the Ld. PCIT is not supported by any of the provisions of law. On the contrary, the Rule 11UA of the Rules does not mentions the pre-condition of approval of the balance sheet by the Annual General Meeting. Therefore, the above finding of the Ld. PCIT is found to be perverse and Commissioner’s order was set aside. Vaaan Infra (P.) Ltd. v. PCIT [2024] 159 taxmann.com 29 (Delhi - Trib.)