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III. Direct Tax Case laws:
1. M/s
Shouri Constructions Vs. ACIT, ITA Nos. 2056 & 2057/Hyd/2011 and T.
Jaipal Reddy Vs. ACIT, ITA No. 2058/Hyd/2011, Date of Pronouncement:
28/06/2013, ITAT - Hyderabad
Section 153C of The Income Tax act, 1961
Whether
the AO in view of a document seized from third party neither mentions
the name of the assessee or bears his signature is justified in
initiating the proceedings u/s 153C of the IT Act.
Held: No
The
precedent condition for assumption of jurisdiction u/s 153C is that the
AO must be satisfied that the seized materials belong to such other
person. The word “belong” has not been defined under the Act. As per the
dictionary meaning ‘belong to’ means be the property of; be the
rightful possession of; be due to. When the document in question was
not seized from the assessee but from a third party, who admittedly has
made the entries therein and furthermore when the seized document
neither mentions the name of the assessee or bears his signature, then
by no stretch of imagination it can be said to be belonging to the
assessee. Thus, the precondition for initiating proceeding u/s 153C
is not satisfied. Therefore, the initiation of proceeding u/s 153C
against the assessee is without jurisdiction.
Further,
considered in the light of the ratios laid down in the case of
Vijaybhai N. Chandrani vs. ACIT [333 ITR 436] by Hon’ble Gujarat High
Court and in case of P. Srinivas Naik Vs. ACIT [117 ITD 201] ITAT –
Bangalore, the assumption of jurisdiction u/s 153C has to be held as
invalid and consequentially the assessment order passed must be declared
as without jurisdiction. Accordingly, the order was set aside and appeal was allowed.
(Please click here for judgment)
2. CIT Vs. M/s SAB Industries Limited, ITA No. 720 of 2008,
Date of Decision: 06.05.2013, High Court of Punjab and Haryana at
Chandigarh
Whether
the retention money is to be treated as income of the assessee for the
year in which it retained or for the year in which the obligations under
the contract are fulfilled.
Company
is engaged in construction work and the AO made additions during course
of assessment which includes disallowance on account of retention money
retained by authority on whose behalf work was carried out, awaiting
successful completion of the work. The disallowance ordered by the AO
was set aside by the CIT (Appeals). The said order was affirmed by the
Tribunal.
High Court held that in view of decisions of various high courts, wherein it was held the
right to receive retention money accrues only after the obligations
under the contract are fulfilled and therefore, it will not amount to
income of the assessee in the year in which amount is retained, We do not find any substantial question of law arises for consideration. Thus, appeal is dismissed.
(Please click here for judgment)
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