S. 54/54F: Two flats, even though acquired under different agreements & from different sellers, are one residential unit if there is a common kitchen
The department’s argument that the law laid down by the Tribunal in ITO v/s Sushila M. Jhaveri 107 ITD 327 (Mum)(SB) and confirmed by this Court in CIT v/s Raman Kumar Suri (Income Tax Appeal No.6962 of 2010, decided on 27.11. 2012) on the availability of exemption u/s 54 is applicable only when the house purchased is a single unit and not where two flats, one acquired in the assessee’s name and another jointly in the names of the assessee and his wife but under two distinct agreements and from different sellers have been taken into consideration is not acceptable. Though these flats were acquired under two distinct agreements and from different sellers, the map of the general layout plan as well as internal layout plan in regard to flat Nos.103 and 104 indicate that there is only one common kitchen for both the flats. The flats were constructed in such a way that adjacent units or flats can be combined into one. The admitted fact is that the flats were converted into one unit and for the purpose of residence of the assessee. Thus, though the acquisition of the flats may have been done independently but eventually they are a single unit and house for the purpose of residence
S. 201 TDS: Even if the statute does not lay down a time limit, proceedings must be completed within a limited period
S. 201 of the Act does not prescribe any limitation period for the assessee being declared as an assessee in default. If no period of limitation is prescribed, a statutory authority must exercise its jurisdiction within a reasonable period. What should be the reasonable period depends upon the nature of the statute, rights and liabilities thereunder and other relevant factors. Insofar as the IncomeTax Act is concerned, s. 153(1)(a) prescribes the time limit for completing the assessment, which is two years from the end of the assessment year in which the income was first assessable. It is well known that the assessment year follows the previous year and, therefore, the time limit would be three years from the end of the financial year. This seems to be a reasonable period as accepted u/s 153 of the Act, though for completion of assessment proceedings. Even though the period of three years would be a reasonable period as prescribed by s. 153 of the Act for completion of proceedings, the Income Tax Appellate Tribunal has taken the view that four years would be a reasonable period of time for initiating action, in a case where no limitation is prescribed. The rationale for this seems to be quite clear if there is a time limit for completing the assessment, then the time limit for initiating the proceedings must be the same, if not less. Nevertheless, the Tribunal has given a greater period for commencement or initiation of proceedings (NHK Japan Broadcasting Corp 305 ITR 137 (Del) & Hutchison Essar Telecom 323 ITR 230 (Del) followed;Bhura Exports (Cal HC) dissented from)
S. 37(1): Expenditure on education of director is personal expenses & not allowable deduction. Assessee mto pay costs of Rs. 50,000 to dept
The expenditure incurred for the education of the Director of the assessee viz. Mr Krishna Kachalia was out of personal consideration and not commercial consideration. The judgement in Sakal Papers 114 ITR 256 (Bom) has been considered in D.C. Mehta v/s. ITO (Income Tax Appeal No.840 of 2012). In that case, the assessee, Mr. D. C. Mehta, an Advocate by profession claimed a deduction of Rs.22L as expenditure incurred for higher education for his daughter, Hemali. The justification for the said deduction was that she joined the Appellant’s firm of Advocates and gave an undertaking that on attaining higher qualification and degree from the University abroad, she would join the firm for a minimum period of five years and thus, the said expenditure was incurred for the business of the assessee and was allowable as a deduction. It was found that the daughter Hemali joined the assessee and immediately was sent for education abroad. The assessee had not been able to bring on record anything and particularly the scheme for higher education abroad for employees and associates. Despite other associate Advocates working in the firm of the Assessee, none were given an opportunity to go abroad for higher education despite the fact that some were working with him for the last 15 years. Despite the aforesaid, within a period of two to three months, after the daughter Hemali became an Advocate and joined the firm as an Associate, she went abroad. In this view of the matter, the Division Bench upheld the contention of the authorities below in disallowing the deduction. The judgment in Sakal Papers must be seen in the peculiar facts and background and the cumulative impact of all events & circumstances must be seen. Only because there was no commitment or contract or bond taken from the trainee, the expenditure cannot be disallowed to the assessee, particularly when as a result of that expenditure, the trainee had secured both, a degree and training which would be of assistance to the assessee Company. The facts of the present case are totally different from that of Sakal Papers and almost identical to that in D. C. Mehta’s case (Chandulal Keshavlal 38 ITR 601 (SC), S.A. Builders 288 ITR 1 (SC) distinguished). The assessee to pay costs of Rs.50,000 to the Respondents
CPC hauled up for harassing assessee by imposing tax of 60% on LTCG & refusing to rectify
In the entire Income-tax Act, there is no provision charging a tax rate of 60% on long term capital gains. The Delhi High Court has issued remedial directions to improve hardships faced by tax payers while processing the e-returns at CPC, Bangalore. The Court has discussed the background that in order to fasten the processing of returns, the revenue has introduced electronic filing of income tax returns, TDS returns, e-tax payments and it operates Centralised Processing Centre (CPC) at Bangalore. This is manned by Higher Ranking Officers of Income Tax Department. The problem is faced by tax payers, when demand is raised or refund reduced on account of either suo motu adjustment by the Income Tax Department and refund against tax demands or mismatch of TDS credit or any other adjustment or disallowance of claim made by tax payer in the return and uploaded by the assessee in its e-returns. This is a general grievance among the tax payers that the AOs do not adhere to the time limit specified for the disposal of rectification applications and tax payers are invariably called upon to file duplicate application or new application. Further, no record or no receipt counters or registers for receipt of such applications are maintained. Thus, there is no record/register remained with the AO with details or particulars of rectification application made u/s. 154 of the Act as is evident from the present case. Similar directions were issued by the Delhi High Court in the case of its own motion Vs. CIT, WP(C) No. 2659/2012 dated 14.03.2013. The Delhi High Court vide para 18 has issued dictum as under: “18. Each application under Section 154 has to be disposed of and decided by a speaking order. This is the mandate of the Act. The order has to be communicated to the assessee and there is a relevant column to be filled in the register, which is now required to be maintained. The Board should issue specific directions to ensure that there is full compliance of the said requirements and directions by the Assessing Officers, Dak counters and Aayakar Sewa Kendras. This is the first mandamus or direction we have issued in the present judgment“. As the facts in the present case are very clear that charging of long term capital gain can only be @ 20% in assessment year 2011-12 and not @ 60% as charged in intimation u/s 143(1) of the Act by CPC, Bangalore which according to the provisions of the Income Tax Act is not legal. Hence, we quash the intimation and appeal of assessee is allowed. The jurisdictional AO is directed to amend the intimation issued by CPC, Bangalore, while giving appeal effect to this order.