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III. Direct Tax Case law:
1. Ambuja Cement India Private Limited Vs. Dy. CIT, ITA No. 3619/Mum/2012, Date of Pronouncement: 21.06.2013, ITAT - Mumbai
Issue:
Whether penalty u/s 271(1)(c) (explanation 4) can be imposed, where
enhancement in assessment has been fully absorbed by brought forward
business loss?
Held: No
The assessee’s
case before us was based primarily on the decision by the hon’ble Delhi
High Court in the case of CIT vs. Nalwa Sons Investments Ltd. [2010]
327 ITR 543 (Del). It stands explained therein that notwithstanding the
increase in the assessed income vis-à-vis as returned, under the regular
provisions of the Act, the same has no tax impact inasmuch as the tax
paid and assessed is in terms of ‘book profit’, which remains unchanged
on assessment. There is consequently no tax that could be said to have
been evaded even on invoking Explanation (4) to the provision. The
matter, thus, stands effectively concluded in favour of the assessee and
against the Revenue.
(Please click here for judgment)
2. Karan R. Bahl Vs. ITO, ITA No. 7334/Mum/2011, Date of Pronouncement: 21.06.2013, ITAT - MUMBAI
Issue:
Whether shares can be classified as trading stock as well as capital
asset, where all the shares have been bought by the assessee in the
regular course of his business?
Held: No
The
categorization as to whether the scrip acquired is as an investment or
as a part of the assessee’s trading stock is primarily one of intention
with which the share is purchased / held and, accordingly, gets to be
decided at the stage of or upon acquisition itself. In the instant case,
there is no such classification done by the assessee, the onus of which
is only on it, being required to demonstrate, i.e., in a cognizable
manner, with reference to its accounts/records, that the share
classified as a long term capital asset was indeed bought/acquired as an
investment. On the contrary, the books of account of the assessee’s
business, point it to being one, composite business of trading in shares
and, in fact, the only business carried on by the assessee. To contend
or assert, or even state of some share as, in fact, representing
investments for the purpose of returning income under the Act, would be
of no moment. We decide accordingly.
(Please click here for judgment)
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