Corporate Professional Today – October 20, 2018

376 October 20 To October 26, 2018 u Taxmann’s Corporate Professionals Today u Vol. 43 u^18

Introduction

1. The provisions of the income-tax law are so strange that
   there is no equity in taxation. For example, when a land is sold
   between unrelated parties, the difference between the apparent
   consideration and stamp duty value is chargeable to tax in the
   hands of both the parties. In the hands of transferor, it is taxable
   by adopting such excess value as deemed sale consideration and
   for the transferee it is taxable under the head ‘other sources’,
   subject to threshold limit of 50,000. Thus, a difference of 1
   lakh becomes chargeable to tax in the hands of 2 persons with
   ` 1 lakh apiece. Like this, we can reel out so many instances
   where the law is like an ass and is unpredictable.
   That is why seasoned tax practitioners do not recommend overdose
   of tax planning. The moment a tax planning exercise is carried
   out the tax administration does a microscopic examination of
   the same to catch the taxpayer. The recent case of Sonia Gandhi
   v. Asstt. CIT [2018] 97 taxmann.com 150 (Delhi) is a lesson for
   the taxpayers on sequencing of transactions and it must caution
   the other taxpayers in general to play safe in arranging their
   tax affairs.

Sonia Gandhi’s case

2. Factually, the Delhi High Court dealt with three writ petitions
   filed by the eminent public personalities against triggering of
   reassessment provisions by the tax administration. The facts are
   given in sequence as below:
   u The Indian National Congress (AICC) over a period of time
   advanced ` 90 crores to Associated Journals Ltd (AJL)
   which was the publisher of the newspaper by name “Na-
   tional Herald”. The amounts were given with a direction
   that it must be utilized for writing off its accumulated
   debts and recommence the newspaper.

Curious Case of ‘National Herald’

V.k. subRamani

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