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IV. Useful Case Laws:
1. Shibani Dutta Vs. CIT, ITA No. 169/2012, Date of Decision: 12th July, 2012, High Court of Delhi
Notice issued u/s. 158BC (a) cannot be equated to a notice issued u/s.148 to reopen an assessment
In our opinion and for the above reasons the Tribunal erred in relying on clause (iii) of the Explanation-1 to Section 158BE to hold that the block assessment order passed on 30.07.2002 is within the period of limitation. It failed to note that neither Section 129 nor its proviso is attracted to the case.
Its further reasoning that the first proviso to Section 158BC (a) required no notice under Section 148 for making a block assessment, merely because the notice required to be issued under Section 158BC (a) calling for the block return is analogous to the notice under Section 148 to reopen an assessment, is without any basis, either on principle or on authority. The Tribunal has erroneously equated the notice issued under Section 158BC (a) to a notice issued under Section 148 to reopen an assessment and erred in further understanding the words “the time taken in reopening the whole or any part of the proceeding” appearing in clause (iii) of Explanation-1 to mean a reopening of the assessment under Section 148. With respect, the reasoning appears to be convoluted and untenable. The reopening of the proceeding referred to in clause (iii) of Explanation-1 is the reopening of the proceedings for the assessment which have been completed in part by an earlier incumbent of office, and not the reopening of the assessment under Section 148. This much should have been clear to the Tribunal since the said clause in the Explanation clearly refers to the proviso to Section 129. The logic embodied in the clause has been completely missed by the Tribunal.
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2. Ivory Finvest Ltd. Vs. ITO, ITA Nos. 179/Kol/2012, Date of pronouncing the Order: 28.05.2012, ITAT- Kolkata
Whether the ratio of expenditure disallowance in lieu of interest payments u/s 14A has to be in the ratio of dividend income to the total turnover?
Held:
Once it is not in dispute that the facts of the case are materially similar to the facts of ISG Traders Ltd. vs. CIT, WB-II, Kolkata (I.T,A No.264 of 2003-2011- TIOL-621-HC-KOL-IT). And that the said decision applies in this case, the computation of disallowance has to be done on the same basis as was accepted by Their Lordships in ISG Traders Ltd.’s case (supra). As learned counsel rightly points out, the ratio of allocation accepted by Their Lordships is of dividend income to total turnover. In view of this position, we deem it fit and proper to uphold the grievance of the assessee and to remit the matter to the file of the Assessing Officer for recomputation of disallowance u/s.14A in the light of above directions. The assessee gets the relief accordingly.
(Please click here for judgment)
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