Circulars issued for reducing litigation and for withdrawing appeals on issues

accepted by the Department

No. Circular Date Section Issue
1 16/2015 06.10.15 Rule 9A Expenditure incurred in respect of abandoned films to be
allowed as revenue expenditure not to be treated as capital
expenditure
2 17/2015 06.10.15 2(14)(iii) Distance from municipal limits for ascertaining whether
agricultural land is capital asset is to be measured by shortest
road distance up to AY 13-14. Amendment to S.2(14)(iii) to
measure it aerially will be effective form 1.4.14.
3 18/2015 02.11.15 57(i) & Treatment of interest on non-SLR securities as business income
80P(2)(a)(i) and not as income from other sources may be accepted and
therefore expenses relatable to such investment to be allowed
u/s 57(i) and deduction u/s 80P(2)(a)(i) to be allowed.
4 21/2015 10.12.15 Revision of Appeals/ SLPs shall not be filed in cases where the tax effect
monetary does not exceed the monetary limits
limit for Before I.T.A.Tribunal 10,00,000/-
filing appeal Before High Court 20,00,000/-
Before Supreme Court 25,00,000/-
5 22/2015 17.12.15 43B(b) SC judgment accepted- Deletion of second proviso and
amendment of first proviso of section 43B(b) is curative and
applicable retrospectively w.e.f 1.4.88 . Accordingly, there will be
no disallowance u/s 43B, in respect of any sum payable by the
assessee as employer to any provident fund, superannuation
fund, gratuity fund etc.
6 23/2015 28.12.15 No 194A in Interest on FDRs, made in the name of Registrar General of the
FDRs with Court of the depositor of the fund on the directions of the Court
Court will not be subject to TDS till the matter is decided by the Court
7 24/2015 31.12.15 158BD/ SC judgment accepted For section 158BD recording of
153C satisfaction note is a pre-requisite. SN must be prepared by the
Recording AO before he transmits the record to the other AO having
Satisfaction jurisdiction over such person u/s 158BD. Even if the AO of the
searched person and the other person is same, then also he is
required to record his satisfaction.
8 25/2015 31.12.15 271(1)(c) Prior to 1.04.16, where income tax payable on total income as
MAT Tax> computed under the normal provisions of the Act is less than the
Tax tax payable on the book profit u/s 115JB, penalty u/s 271(1)(c)
determined not attracted with reference to additions/ disallowances made
under normal provisions.
9 1/2016 15.02.16 80IA An assessee who was eligible for claiming deduction u/s 80IA
has the option to choose the initial assessment year/ first year
out of the 15/20 years. He can claim deduction for ten
consecutive years beginning from the year in respect of which
he has exercised such option. Total number of years for claiming
 deduction should not transgress the prescribed slab of fifteen or
twenty years, and the period of claim should be in continuity.
10 3/2016 26.02.16 115QA, Consideration received on buy-back of shares from 1.4.00 to
2(22)(iv), 31.5.13 would be taxed as capital gains in the hands of the
46A recipient in accordance with section 46A and no such amount
shall be treated as dividend in view of provisions of section 2
(22)(iv). Section 115QA which provide that any amount of
distributed income by a company on buy-back of unlisted shares
will be liable to additional Income-tax @ 20% of the distributed
income is operative from 1.6.13.
11 5/2016 29.02.16 194C TDS is not attracted on payments made by television channels/
newspaper companies to the advertising agency for booking or
procuring of or canvassing for advertisements. It is also further
clarified that commission referred to in Q.27 of the Boards
Circular No. 715 dated 8.8.95 does not refer to payments by
media companies to advertising companies for booking of
advertisements but to payments for engagement of models,
artists, photographers, sportspersons.
12 6/2016 29.02.16 Capital gain In addition to parameters laid down through Instruction no. 1827
or business dt 31.8.89 and Circular no. 4/2007 dt 15.6.07 to distinguish
income? shares held as investment from shares held as stock-in-trade,
following parameters added-
(a) When shares are stock-in-trade, the income on their transfer
would be business income irrespective of holding period.
(b) In respect of listed shares and securities held for a period of
more than 12 months, if the assessee treats the income on their
transfer as Capital Gain, AO shall not dispute but it should be
followed consistently in following years.
Above not to apply in case of non-genuine transactions.
13 7/2016 07.03.16 Taxability of Consortium arrangement for executing EPC/ Turnkey contracts
consortium which has the following attributes may not be treated as an AOP:
members a. each member is independently responsible for executing its
as AOP part of work and also bears the risk of its scope of work
b. each member earns profit or incurs losses, based on
performance of the contract within its scope of work.
c. the men and materials used for any area of work are under
the risk and control of respective consortium members
d. control and management of the consortium is not unified and
common management is only for the inter-se coordination
between the consortium members;
14 8/2016 17.03.16 Audit Instruction no. 9/2006 dated 7.11.2006 modified - Remedial
objection action need not be taken where Pr.CIT does not accept the audit
objection. If after careful scrutiny, adverse order of the CIT(A) is
found to be justified on facts or on law, no appeal is required.
15 09/DV/ 26.04.16 Limitation in Formation on Departmental View on limitation for imposition of
2016 27ID, 27IE penalty under sections 27ID and 27IE - Such proceedings can
be set to have commenced with the issuance of notice by the
Joint Commissioner to the assessee to which he has filed his
reply and not on the passing of the order of assessment by the
AO which even though erroneously mentions that proceedings
u/s 271D and 271E are initiated.
16 10/2016 26.04.16 Limitation in Penalty u/s 271D and 271E is independent of the assessment.
27ID, 27IE Therefore, as per section 275(1((c), limitation period would be
the expiry of the F.Y. in which the proceedings in the course of
which action for the imposition of penalty has been initiated) are
completed, or six months from the end of the month in which
action for imposition of penalty is initiated, whichever period
expires later. The limitation period is not dependent on the
pendency of appeal against the assessment or other order
referred to in section 275(1)(a) of the Act.
17 11/2016 26.04.16 195 & 244A If resident deductor is entitled for refund of tax deposited u/s
195, interest has to be paid u/s 244A from the date of payment
of such tax
18 12/2016 30.05.16 36(1)(vii) No appeal to be filed, if bad debt is written off as irrecoverable in
the books of accounts of the assessee for that previous year and
it fulfills the conditions in sub section (2) of sub-section 36(2).
19 15/2016 19.05.16 32(1)(iia) Printing and publishing activity is a manufacturing activity and
therefore, assessee is eligible for grant of additional depreciation
u/s 32(l)(iia).
20 Letter F.No.225/ Capital gain Income arising from transfer of unlisted shares to be considered
12/2016/ITA-II dt. or business under the head 'Capital Gain', irrespective of period of holding.
2/5/2016 income? This will not apply in case of non-genuine transaction or in case
of transfer of control of management.
21 35/2016 13.10.16 194-I Payment of lump sum lease premium or one-time upfront lease
charges, which are not adjustable against periodic rent, paid or
payable for acquisition of long-term leasehold rights over land or
any other property are not payments in the nature of rent within
the meaning of S.194-I and are not liable for TDS u/s 194-I.
22 37/2016 02.11.16 Ch.VI-A Disallowances made under sections 32, 40(a)(ia), 40A(3), 43B,
deduction etc. of the Act and other specific disallowances, related to the
on business activity result in enhancement of the profits of the
enhanced eligible business, and that deduction under Chapter VI-A is
profits admissible on the profits so enhanced by the disallowance.
23 38/2016 22.11.16 37, Expl. to In case of a firm, premium paid by the firm on the Keyman
10(10D) Insurance Policy of a partner, to safeguard the firm against a
disruption of the business, is an admissible expenditure u/s 37.
24 39/2016 29.11.16 Ch.VI-A Revenue subsidies received from the Government towards
deduction reimbursement of cost of production/ manufacture or for sale of
 on revenue the manufactured goods are part of profits and gains of business
subsidies derived from the Industrial Undertaking/ eligible business, and
are thus, admissible for deduction under Chapter VI-A of the Act.
25 5/2017 23.01.17 Clarification Even on issues mentioned in para 8 (challenge of validity of
of circular Section, Rule, Boards order, Notification, Instruction or Circular;
21/2015 Revenue Audit Objection not accepted by the Dept.; additions of
undisclosed foreign assets/ bank accounts), appeals against the
adverse judgment should only be filed on merits.
26 16/2017 25.04.17 Rental or In the case of an undertaking which develops, develops and
business operates or maintains and operates an industrial park/SEZ, the
income- income from letting out of premises/ developed space in an
80IA(4)(iii) industrial park/SEZ is to be treated as business income provided
the conditions proscribed under the schemes are met.