1.    Ajay Guliya Vs. ACIT, ITA No. 423/2012, Date of Decision: 16/07/ 2012, High court of Delhi

Capital gain was chargeable u/s 145 of Income Tax Act, in the year of transfer irrespective of condition in Share Purchase Agreement that balance sale consideration was payable over a period of two years.

Held:

45(1) provides that the profits or gains arising from the transfer of a capital asset affected in the previous year shall be chargeable to income tax under the head “capital gains”, and shall be deemed to be the income of the year in which transfer takes place. In present case capital assets were transferred on a particular date the assessee passed on the execution of the agreement. There is no material on the record or in the agreement suggesting that even if the entire consideration or part is not paid the title to the shares will revert to the seller.  In that sense the controlling expression of “transfer” in the present case is conclusive as to the true nature of the transaction. The fact that the appellant assessee adopted a mechanism in the agreement that the transferee would defer the payments would not in any manner detract from the chargeability when the shares were sold.

(Please click here for judgment)

2.   Agility Logistics Private Limited Vs. Dy. CIT, ITA No. 1552/Mum/2012, Date of Pronouncement: 06-06-2012, ITAT – Mumbai

Penalty proceedings under section 271(1)(c) of the Act, cannot be levied on account of transfer pricing adjustment u/s. 92CA(3) in relation to professional fees and I.T. implementation fees.

As per Explanation – 7 to section 271(1) (c), any amount added or disallowed under section 92CA (2) shall be deemed to represent income in respect of which particulars have been concealed or inaccurate particulars have been filed unless assessee proves that price charged for such transfer was in accordance to provisions contained in section 92C and in the manner prescribed under that section. It is a settled legal position that penalty proceedings are different from assessment proceedings and finding given in the assessment though it may constitute good evidence, is not conclusive in penalty proceedings. CIT (A) has not examined the detailed contentions of the assessee in relation to arm’s length price which is necessary to arrive at a fair conclusion in the matter. It has only been stated that the assessee has not proved to satisfaction that international transactions had been computed in accordance with the provisions of section 92C but no reasons have been given as to how the assessee had not proved and whether satisfaction had been arrived at objectively, after considering all relevant facts and circumstances of the case which were subject matter of remand proceedings before AO. Therefore, in our view, the matter requires fresh examination at the level of CIT (A).

(Please click here for judgment)

Key of Success :

"Touching the sky only doesn't define the success.
Real success story will be if we don't take our feet off the ground,
while touching the sky" 

Thanks for your valuable time

"Voice of CA"