Some Important ITAT Judgments

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Some Important Judgments – ITAT

Hoarding payment : Whether TDS Required u/s 194C or u/s 194I ?

As per CBDT, Circular 715 dated 8-8-1999 a contract for putting up a hoarding is in nature of advertising contract and provisions of section 194C would be applicable.

However, if a person has taken a particular space on rent and thereafter sub-lets same, fully or in part, for putting-up a hoarding, such payments would be liable for tax deduction at source under section 194-I and not under section 194C
[2018] 93 taxmann.com 398 (Mumbai – Trib.)
IN THE ITAT MUMBAI BENCH ‘A’
Accord Advertising (P.) Ltd.

Tax treatment of advance received against land offered for Development: Pune Tribunal

Where assessee had given land for development and was entitled to receive 18 per cent on gross sales under terms of development agreement, advance received by assessee from developer towards flat booking shall not be taxable in relevant year 2009-10 on receipt basis, but in subsequent assessment year when project was completed and tenements / flats were handed over to prospective buyers.
Advance booking amount received by assessee is an advance receipt because right to collect said amount would crystallize on day when tenants or portion of land is sold by developer to prospective buyers. Moreover, developer recognized completion and sale of developed portion in subsequent assessment year 2011-12, consequently, business profits arising to assessee were taxable in such year.
Further, since amount is not assessable to tax as his business profits in 2009-10, capital gains arising on conversion of capital asset into stock-in-trade is also not to be taxed in hands of assessee in 2009-10 but in year in which business profits are to be taxed. Furthermore, capital gains have to be worked out on basis of fair market value of property as on date of conversion and not on basis of market value of property.
[2018] 93 taxmann.com 465 (Pune – Trib.)
IN THE ITAT PUNE BENCH ‘B’
Income-tax Officer, Ward 2(1), Pune
v.
Vilas Babanrao Rukari (HUF)

Despite 40A(2)(b), Excessive salary paid to Doctors is allowable as deduction

Where assessee-company paid higher salaries to doctors who were reputed professionals in their fields, payment of salaries could not be held to be excessive and unreasonable

[2018] 93 taxmann.com 272 (Ahmedabad – Trib.)
IN THE ITAT AHMEDABAD BENCH ‘B’
Income-tax Officer, Ward- 2(1)(3), Ahmedabad
v.
Hemato Oncology Clinic (Ahmedabad) (P.) Ltd


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