1. CIT Vs. Dr. M.A.M. Ramaswamy, T.C. (A) No. 649 of 2006, Date of Decision: 10.12.2014, High Court of Madras
Issue:
Whether business loss could be set-off from winnings from betting and
gambling income, as they would be taxed on gross basis as per section
115BB, read with section 58(4) of the Income-tax Act? Held: no
Brief facts:
The assessee is a breeder and owner of race horses. For the assessment
year 1998-99, the assessee filed return of income declaring a total
income of Rs.28,01,55,597/-. The assessee has shown betting income of
Rs.31,24,28,980/- and while computing the total income, the assessee has
adjusted the losses suffered under the head "business" against the
income earned under other heads, including betting income, and after
setting off such losses, betting income of Rs.28,52,18,347/- was brought
to tax by the assessee at the flat rate of 40% as prescribed under
Section 115BB of the Act, as against the total betting income of
Rs.31,24,28,980/-. The Assessing Officer held that the total winnings
are to be taxed under Section 115BB of the Act and losses cannot be set
off against such income.
Held:
We are, therefore, of the considered view that the total winnings from
betting of the assessee should be brought to tax at the rate of 40% as
contemplated under Section 115BB of the Act. The order passed by the
Tribunal, which affirmed the order of the Commissioner of Income Tax
(Appeals), is liable to be set aside.
(Please click here for judgment)
2. B.S. Sangwan Vs. ITO, I.T. Appeal No. 2680 (Delhi) of 2011, Date of Decision: 21.01.2015. ITAT - Delhi
Issue:
whether it is open to the CIT to set out one reason for revising the
order u/s 263 in show cause notice but actually revise the order on some
other ground? Held:No
Brief fact: The
assessee is a railway contractor and had filed his return of income,
for the assessment year 2007-08 disclosing a taxable income of Rs
4,92,380. This income tax return was subjected to the scrutiny
assessment proceedings u/s 143(3) of the Act, the Assessing Officer
assessed the at Rs 5,82,380. On 14th February 2011, learned Commissioner
issued a show cause notice to the assessees which are (a) difference in
work in progress (b) Depreciation and (c) non deduction of TDS on few
expenses. Learned counsel for the assessee elaborate arguments on merits
on each of the point set out in learned Commissioners show cause
notice. However the Commissioner had simply restored the assessment
order to the file of the Assessing Officer for fresh adjudication after
making "proper enquiries”.
Held: “That's
not permissible under the scheme of the law, as a revision order can
only be passed on the ground on which the assessee has been given
reasonable opportunity of being heard, and as it is not open to
Commissioner to set out one reason for revising the order but actually
revise the order on some other ground. In our humble understanding, lack
of proper inquiries, which an Assessing Officer ought to have conducted
on the facts of the said case, is altogether a different reason from
inadmissibility of a claim of deduction or an income which ought to have
been brought to tax. In view of the above discussions, as also bearing
in mind entirety of the case, we are of the considered view that the
impugned revision order is contrary to the scheme of law, and should be
quashed for this reason alone.”
(Please click here for judgment)