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II. Direct Taxes Case Laws:
1. Surya Prakash Toshniwal (HUF) Vs. ITO, I.T.A. No. 1213/2016, Date of order: 11.01.2017, ITAT - Kolkata
Issue:
Whether the LTCG claimed as exempt by an assessee on sale of
securities to a company, that has been directed by SEBI not to carry out
any transaction, be considered as bogus income?
Held: No
Brief Facts:
The assessee had purchased shares of M/s Rohon Financial and
Securities Ltd. (RFSL) and the same shares were sold to M/s Ahilya
Commercial Pvt. Ltd. (ACPL) by assessee resulting in capital gain. The
AO, observed that there was a sharp rise in price of shares of RFSL and
accordingly verified the transactions from the online portal of SEBI
which revealed that ACPL was directed by SEBI not to enter into any
transaction in securities, in any manner. It was also observed that ACPL
had not filed financial statement before SEBI. Thus, the AO held the
transactions as bogus and accordingly treated the same as income of
assessee from undisclosed source. The CIT(A) upheld the order of Ld. AO
and being aggrieved by that assessee preferred an appeal before Hon’ble
ITAT.
Held:
In this regard, the Hon’ble ITAT held that the AO should have issued
notices and summons to M/s RFSL and ACPL to produce the financial
information before rejecting the claim of the assessee as all the
necessary information which were available with the assessee had been
brought on record before the lower authorities. Further, in case ACPL
has not filed the financial statements with the stock exchange then the
assessee cannot be held guilty for the fault of ACPL. Also, the
transactions for the sale and purchase of the shares have been made
through a valid stock broker and it was thus held that the lower
authorities had not brought on record sufficient reasons for disallowing
the claim of the assessee and that there was no fault on the part of
the assessee.
Therefore, the appeal of the assessee is allowed.
(Please click here for judgment)
2. M/s Evershine Films Private Limited Vs. ACIT (TDS), I.T.A. No. 1386-1389/Mum/2013, Date of Judgement: 18.01.2017, ITAT - Mumbai
Issue:
Whether penalty u/s 272A(2)(c) of the Income Tax Act, 1961 can
also be levied for non-filing of TDS return, where penalty u/s 271C of
the Act has been levied for non-deduction of TDS by the assessee during
the relevant financial year?
Held: No
Brief Facts:
The assessee is engaged in the business of production of feature
films. A survey operation u/s. 133A of the Act was conducted at the
premises of the assessee on 3.8.2006. During survey, it was noticed that
the assessee has not deducted tax at source from certain payments in
both the years under consideration. Further the assessee has also not
remitted the tax, which it had deducted from certain payments.
Therefore, AO levied penalty u/s 271C of the Act for both years. Since
the assessee did not file the “Annual return of TDS” prescribed under
the Act, the Assessing Officer also levied penalty u/s. 272A(2)(c) of
the Act till the date of his respective orders passed in both the years.
The assessee preferred the appeals before the learned CIT(A)
challenging the penalties levied in both the years. However, the ld.
CIT(A) dismissed the appeals filed by the assessee. Therefore, assessee
preferred an appeal before the Hon’ble ITAT.
Held:
In respect of penalty levied u/s 271C of the Act, the Hon’ble ITAT
has confirmed the order passed by Ld. CIT(A) in both years confirming
the penalty levied u/s 271C of the Act. In respect of penalty levied u/s
272A(2)(c) of the Act, the Hon’ble ITAT held that the assessee did not
file “Annual return of TDS”, since it has not remitted the amount of TDS
deducted by it. In our view, non-remittance of TDS amount would be a
reasonable cause for non-furnishing of Annual return of TDS. The
question of filing of Annual return of TDS would arise, only if the
assessee has deducted TDS and remitted the same to the credit of
Government. In this view of the matter, we are of the view that the
learned CIT(A) was not justified in confirming the penalty levied by the
Assessing Officer u/s. 272A(2)(c) of the Act. Accordingly, we set aside
the order passed by the learned CIT(A) on this issue in both the years
under consideration and direct the Assessing Officer to delete penalty
u/s 272A(2)(c) of the Act.
Therefore, the appeal of the assessee is partly allowed.
(Please click here for judgment)
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