Subsequent commercial-use cannot disentitle Sec 54F exemption if building
constructed for residential-purpose: Relevant factor to judge is
whether construction is made for residential house or commercial purpose, merely
because building used as a school cannot change nature and character of building
from residential to commercial; Also holds that law is settled that ‘a
residential house’ does not mean a single residential house; Sec 54F exemption
entitled even where assessee constructs or receives a number of flats adjacent
to each other or in different floor of same building; Relies on jurisdictional
HC ruling in Syed Ali Adil. [N. Revati v. ITO (ITA 67/Hyd/2013) (Hyd ITAT) dated
2 April 2014]
<!--[if !supportLists]-->2. 30 days
share-holding period, a yardstick distinguishing between business income &
STCG: ITAT rules that profit on sale of shares held for less than 30
days should be treated as ‘business income’ and if held for more than 30 days
should be treated as STCG; Observes that differentiation of share transactions
as business income or capital gains is a vexed issue, stresses that devising
yardstick to distinguish between trading and investment activity based on
periodicity of holding is important especially in case of assessee maintaining
dual portfolio. [Gurumukh J Sukhwani (ITA 79/PN/2011) (Pune ITAT) dated 30 April
2014]
<!--[if !supportLists]-->3.
<!--[endif]-->Assessee’s accounts cannot determine income accrual, no tax
liability on hypothetical income: Income cannot accrue merely on ground
that assessee follows mercantile system of accounting; mere tax deduction at
source cannot be a test for determining income; Accrual happens when assessee
has legal right to claim the income, where no income has accrued, there cannot
be tax liability on hypothetical income; While Schedule VI to Companies Act
requires income accrued but not due to be part of profits for accounts, concept
of “accrued but not due” contradictory for IT Act purpose as what was not due
could not have accrued; Relies on Madras HC ruling in Lucas Indian Services Ltd.
[Addl CIT v. Shri Vinay V. Kulkarni (ITA 2363/PN/2012) (Pune ITAT) dated 29
April 2014]
<!--[if !supportLists]-->B.
<!--[endif]--> High Court
<!--[if !supportLists]-->4.
<!--[endif]-->Holds share income as capital gains, weighs 'investment'
approach over short duration: HC holds income from share sale-purchase
transaction as capital gains considering entire facts, applying frequency,
object, volume etc tests; Reiterates that no straight jacket formula available
to decide transactions' nature, all facts, circumstances ought to be considered;
Relies on SC ruling in P. Mohammed Mirakhan. [CIT v. Devasan Investment Pvt Ltd
(ITA 1102/2011) (Del HC) dated 16 April 2014]
<!--[if !supportLists]-->5. Lays
down principles on PMS (Portfolio Management Scheme) income-classification;
Rules taxation under capital gains: HC lays down tests / principles to
determine characterization of share transactions under discretionary PMS;
Agreement terms do not indicate investor's intention to make profits, at best
embodies intention to appoint an agent with limited liability, who will invest
on behalf of the investor and nothing more; Assessee’s intention must be
inferred holistically, from the conduct of the assessee, the circumstances of
the transactions, and not just from the seeming motive at the time of depositing
money. [Radials International v. ACIT (ITA No.485/2012) (Del HC) dated 25 April
2014]
<!--[if !supportLists]-->6.
<!--[endif]-->Section 68 - Addition could not be on account of share
application money, only on basis of any third party statement: Addition
under section 68 on basis of statement made by third parties stating that the
alleged companies were engaged in providing accommodation entries in lieu of
commission; However, said third party statement was made behind back of assessee
and no opportunity of being heard or cross-examining third parties was provided
to assessee; Assessing Officer could not bring any material to disapprove
genuineness of confirmation, affidavits and various details furnished by
assessee; [CIT v. Supertech Diamond Tools (P) Ltd [2014] 44 taxmann.com 460
(Rajasthan HC) dated 12 December 2013]
<!--[if !supportLists]-->7.
<!--[endif]-->Upholds disallowance on cross cheque payment; Account payee
cheque mandated u/s 40A(3): RBI circular dated January 23, 2006,
directs banks that 'account payee cheques' to be credited to payee's account
only, unlike crossed cheques which is negotiable and can be endorsed; In view of
intention of legislature to trace the constituent of money, Sec. 40A(3) made
more stringent by way of amendment substituting 'crossed cheque' with 'account
payee cheque' w.e.f. July 13, 2006. [Rajmoti Industries v. ACIT (Tax Appeal
105/2014) (Guj HC) dated 1 April 2014]
<!--[if !supportLists]-->C.
<!--[endif]--> Supreme Court
<!--[if !supportLists]-->8.
<!--[endif]-->Dismisses Revenue's SLP; HC held computer peripherals
entitled to 60% depreciation: SC dismisses Revenue’s SLP against Delhi
HC judgment; HC had allowed assessee’s depreciation claim @ 60 % on computer
peripherals like CD writer, Printer, Network Cables, Switches, isolators etc; HC
had relied on its own ruling in BSES Rajdhani Power Limited [CIT v. Birlasoft
Ltd (SLP (Civil) 20645/ 2012) dated 14 February 2014]
<!--[if !supportLists]-->9.
L<!--[endif]-->ays down law on criminal proceedings for non-filing of tax
return: SC dismisses appeals filed by Sasi Enterprises and its partners
Jayalalitha (Tamil Nadu Chief Minister) and N. Sasikala against initiation of
criminal proceedings; IT Dept initiated criminal proceedings u/s 276CC of Income
Tax Act for non filing of firm's income tax return; SC interprets scope of Sec
276CC and its proviso, says benefit of proviso available only on 'voluntary
filing' and not after detection of failure to file return. [Sasi Enterprises v.
ACIT [2014] 41 taxmann.com 500 (SC) dated 30 January 2014]
<!--[if !supportLists]-->10.
<!--[endif]-->Confirms 271(1(c) penalty; Holds “voluntary disclosure”,
“amicable settlement” as irrelevant plea: Statute does not recognize
defences like ‘avoiding litigation’ and ‘buying peace of mind’ under Explanation
1 to Sec 271(1)(c); AO shall not be carried away by assessee's plea like
"voluntary disclosure", "buy peace", "avoid litigation", "amicable settlement",
etc. to explain away its conduct; Burden to rebut the presumption of concealment
raised by Expl. 1 to Sec. 271(1)(c) was on assessee; Principles laid in SC
rulings of Dharmendra Textile Processors and Atul Mohan Bindal correctly applied
by Revenue; SC confirms HC ruling [Mak Data P. Ltd. v. CIT (358 ITR 593) dated
30 October 2013]
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