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III. Direct Taxes Case Law:
1. CIT Vs. M/s. Advaita Estate Development Pvt. Ltd., I.T.A. No. 1498 of 2014, Date of Order: 17.02.2017, High Court of Bombay
Issue:
Whether penalty can be imposed u/s 271(1)(c) of the Income Tax
Act, 1961, where substantial question of law had been admitted by the
High Court in respect of quantum proceedings?
Held: No
Brief Facts:
The Revenue challenges the impugned order in which the Tribunal
allowed the respondent-assessee's appeal and deleted the penalty imposed
on the ground that Tribunal ignored the basic document and not
admitting the additional evidence of loan creditor while deleting the
penalty. Revenue also distinguish the decision of this Court in Nayan
Builders and Developers Pvt. Ltd vs. ITO and contended that appeal from
penalty proceeding was not admitted by this Court as on merits no case
for imposition of penalty was made out.
Held:
Relying upon the decision taken by this court in Nayan Builders and
Developers Pvt.Ltd. vs. The Income Tax Officer, Appeal No. 2379/Mum/2009
in which it was held Tribunal in Nayan Builders and Developers Pvt. Ltd
(supra) had deleted the penalty only on the ground that as substantial
question of law had been admitted by this Court in quantum proceedings
the issue is debatable. Hence, When the High Court admits substantial
question of law on an addition, it becomes apparent that the addition is
certainly debatable. In such circumstances penalty, cannot be levied
u/s 271(1) (c) of the Act.
Therefore, the appeal of the Revenue is dismissed.
(Please click here for judgment)
2. DCIT Vs. M/s. Kilburn Engineering Ltd., I.T.A. No. 1987/Kol/2013, Date of Pronouncement: 01.03.2017, ITAT - Kolkata
Issue:
Whether the amount of capital gains deposited by the assessee in
the specified bank account in accordance with Capital Gain Account
Scheme, after the due date of filing of Return of Income u/s 139(1) of
the Income Tax Act, 1961 but before the due date of filing the Revised
Return u/s 139(5) of the Act would be eligible for exemption u/s 54G of
the Act?
Held_Yes
Brief Facts:
The assessee’s industrial undertaking was situated at Bhandup,
Mumbai. The assessee sold its Land & Building at Bhandup, Mumbai to
Housing Development and Infrastructure Ltd. (HDIL) during the Previous
Year 2009-10 and incurred the Long Term Capital Gains (LTCG), the
consideration for which was receivable in installments. The assessee
claimed an exemption u/s 54G of the Income Tax Act, 1961. AO partly
allowed the exemption but raised an objection on the eligibility for
exemption of a certain amount of unutilized capital gains deposited in a
specified account on 30.03.2010. The AO denied the exemption on the
above specified sum applying the provisions of the Section 54G(2) which
states that the amount of capital gains should be deposited in the
specified bank account before the due date of filing the Income Tax
Return u/s 139(1) of the Act i.e. 30.09.2009 for the relevant Assessment
Year.
On
filing of appeal by the assessee to CIT(A), the assessee had contended
that the it had deposited the amount of capital gain in the specified
bank account with in time limit specified in u/s 139(5) of the Act.
Section 54G states that amount of unutilized capital gain has to be
deposited in the account on or before the date of furnishing the return
of income u/s 139 of the Act. Section 54G(2) further provides that such
deposit should be made in any case not later than the due date
applicable in the case of the assessee for furnishing the return of
income under sub-section (1) of Section 139 of the Act. As assessee
filed revised return on 28.10.2010 and therefore, assessee should have
been allowed exemption u/s 54G for the same. The reason for late
deposition of the capital gains as stated by the assessee is the delayed
receipts from the buyer. Accepting the contentions of the assessee, the
appeal of the assessee was allowed by CIT(A) taking first part of the
provisions of Section 54G of the Act as base wherein the amount of the
capital gains can be deposited in the specified bank account within the
time period of filing of the Revised Income Tax Return as per Section
139(5) of the Act. Aggrieved by which, the Revenue had appealed before
the ITAT.
Held:
The Hon’ble ITAT held that the due date for furnishing the Income Tax
Return as per Section 139(1) of the Act is subject to the extended
period provided u/s 139(5) of the Act for the purpose of calculating
maximum period available to the assessee for depositing capital gains in
the specified bank account as per the provisions of Section 54G of the
Act. Also, the capital gains cannot be practically invested in the
specified asset by the assesse until the monies are received from the
buyer. In view of the same, the deposit made by the assessee is within
the time specified in Section 54G(2) of the Act and therefore, the
assesse is eligible for the exemption u/s 54G of the Act.
Therefore, the appeal of the Revenue is dismissed.
(Please click here for judgment)
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