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II. Direct Taxes Case Laws:
1. Goldstar Electricals Pvt. Ltd. Vs. ACIT, I.T.A. No. 5509&5510/Mum/2013, Date of Order: 05.06.2015, ITAT - Mum
Whether penalty u/s 271D & 271E can be levied on transaction entered into through journal voucher.
Held No.
Hon’ble
Bombay High Court in the case of Triumph International Finance (I) Ltd.,
345 ITR 270, held that settling claims by making journal entries in the
respective books is also one of the recognized modes of repaying loan
or deposit. In the absence of any finding recorded in the assessment
order or in the penalty order to the effect that the repayment of loan
or deposit was not a bona fide transaction and was made with a view to
evade tax, the cause shown by the assessee was a reasonable cause and in
view of section 273B of the Act, no penalty under section 271E could be
imposed for contravening the provisions of section 269T of the Act.
Accordingly, we do not find any justification for imposition of penalty
by assuming that amount crediting in the name of assessee’s wife by
debiting assessee’s loan account, which was already there in the books
of account amounts to any contravention of provisions of Section 269SS
so as to impose penalty u/s.271D&271E. Debiting Directors account
was treated by the AO as repayment of loan and crediting his wife’s
account was treated by the AO as receipt of loan.
(Please click here for judgment)
2. M/s Radiant Premises Pvt. Ltd. Vs. ACIT, I.T.A. No. 5494/Mum/2013, Date of Order: 05.06.2015, ITAT - Mum
Whether
the Learned Commissioner of Income Tax (Appeals) has erred in not
allowing Brokerage paid for arrangement of lease, to be reduced from
Rent received for Determination of Actual Rent as per Provisions of
section 23(1)(b) of the Income tax Act.
Held No.
Brokerage
cannot be said to be a charge that has been created in the property for
enjoying the rights and at best it is only an application of income
received/receivable from rent.. ITAT Delhi Bench in the case of Tube
Rose Estates Pvt. Ltd. clearly bring out this distinction between the
brokerage and other charges payable in respect of services provided. If
such a nature of expenses like brokerage, professional fee, etc., is
held to be allowable, then numerous other expenses like salary or
commission to an employee/agent who collects the rent can also be held
to be allowable. This is not the mandate of the law. There is
distinction between maintenance charges and the brokerage paid because
such a charge is given/paid for the very maintenance of the property so
as to enjoy the property itself; whereas brokerage has nothing to do
with the property or the rent which is given to a third party who has
facilitated the landlord and the tenant on agreeable terms to rent the
property. Thus, in our opinion, the payment of brokerage cannot be
allowed as deduction either u/s. 23 or u/s. 24.
(Please click here for judgment)
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