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Wednesday, February 3, 2016

ITR Volume 380 : Part 5 (Issue dated : 1-2-2016)


 

INCOME TAX REPORTS (ITR)--PRINT AND ONLINE EDITION

ONLINE EDITION

SUBJECT INDEX TO CASES REPORTED

HIGH COURTS

Company --Computation of book profits under section 115JA--Effect of amendment with retrospective effect by Finance (No. 2) Act, 2009--Provision for bad debts--Not deductible from book profits--Income-tax Act, 1961, s. 115JA-- CIT v. Shriram Investment Ltd. (Mad) . . . 53

----Computation of book profits under section 115JA--Overdue charges not includible in book profits--Income-tax Act, 1961, s. 115JA-- CIT v. Shriram Investment Ltd. (Mad) . . . 53

Non-resident --Taxability in India--Damages on account of fraud--Authority for Advance Rulings rendering its ruling based on wrong premise that receipts were in nature of revenue receipts--Authority to examine afresh whether receipts capital or revenue receipts and to determine whether those receipts chargeable to income tax in India in light of section 195--Matter remanded--Income-tax Act, 1961, s. 195-- Bernstein Litowitz Berger and Grossmann LLP v. Union of India (Delhi) . . . 49

 

PRINT EDITION

ITR Volume 380 : Part 5 (Issue dated : 1-2-2016)

SUBJECT INDEX TO CASES REPORTED

HIGH COURTS

Income --Disallowance of expenditure relating to exempt income--Burden of proof--Onus on Assessing Officer to record satisfaction that interest bearing funds used for investment to earn tax-free income--No tangible material on record that could have enabled Assessing Officer to record satisfaction in terms of section 14A--No disallowance--Income-tax Act, 1961, s. 14A--Income-tax Rules, 1962, r. 8D-- CIT v. Abhishek Industries Ltd. (P&H) . . . 652

Loss --Carry forward and set off of losses--Condition precedent--Shares carrying fifty-one per cent. of voting power at close of financial year in which loss suffered should be held by same persons on last day of previous year in which loss to be set off--Change of hundred per cent. shareholding and beneficial ownership of shares in assessee--No question of piercing veil at instance of assessee to show ultimate beneficial ownership with parent company arises--Income-tax Act, 1961, s. 79-- Yum Restaurants (India) P. Ltd. v. ITO(Delhi) . . . 637

Reassessment --Notice after four years--Conditions precedent--Assessing Officer in original assessment proceedings considering each and every document and explanation given by assessee on seized documents--Tribunal finding categorically that assessee disclosed all material facts necessary for making assessment and no failure on his part--Notice after four years not valid--Income-tax Act, 1961, ss. 147, 148-- CIT v. Hemkunt Timbers Ltd. (All) . . . 658

----Notice after four years--Limitation--Provision at relevant time was ten years--Notice could be issued on or before 31-5-2001--Notice issued on 11-4-2001--Not barred by limitation--Income-tax Act, 1961, s. 149-- CIT v. Hemkunt Timbers Ltd. (All) . . . 658

Search and seizure --Assessment in search cases--Share application money--No incriminating evidence related to share capital issued found during course of search--Deletion of addition under section 68--Justified--Income-tax Act, 1961, ss. 68, 153A--Principal CIT v. Kurele Paper Mills P. Ltd. (Delhi) . . . 571

----Assessment of third person--Condition precedent--Discovery of incriminating material showing undisclosed income of third person--Documents seized--Affidavits of person in respect of whom search conducted that documents belonged to him--No other evidence of undisclosed income--Proceedings under section 153C not valid--Income-tax Act, 1961, s. 153C-- CIT v. RRJ Securities Ltd. (Delhi) . . . 612

----Assessment of third person--Condition precedent--No satisfaction recorded by Assessing Officer that assets, documents seized belong to some other person--No incriminating material attributable to assessee seized during course of search at premises searched--Assessing Officer cannot assume jurisdiction and transmit items to another file concerning that person without recording satisfaction--Income-tax Act, 1961, ss. 153A, 158BD-- CIT v. Mechmen (MP) . . . 591

----Assessment of third person--Condition precedent--Recording of satisfaction by Assessing Officer having jurisdiction over person in respect of whom search conducted that money or assets discovered during search belong to third person--Recording of satisfaction necessary even if Assessing Officer of both persons same--Income-tax Act, 1961, s. 153A-- CIT v. Mechmen (MP) . . . 591

----Assessment of third person--Condition precedent--Satisfaction of Assessing Officer that undisclosed income found during search belongs to third person--No satisfaction recorded before initiating proceedings under section 153C--Assessment not valid--Income-tax Act, 1961, s. 153C-- CIT v. Nirmala Keshwani (Smt.) (All) . . . 566

----Assessment of third person--Limitation--Limitation starts from date on which assets or documents received by Assessing Officer of third person--Assessing Officer of third person also assessee of person in respect of whom search conducted--Limitation will start on date of recording of satisfaction that incriminating material belonged to third person--Satisfaction recorded on 8-9-2010--Assessments for assessment years 2003-04 and 2004-05 barred by limitation--Income-tax Act, 1961, s. 153C-- CIT v. RRJ Securities Ltd. (Delhi) . . . 612

----Block assessment--Undisclosed income--General principles--Assessments completed on date of search--No incriminating materials found during search--Block assessment not valid--Income-tax Act, 1961, ss. 132, 153A-- CIT v. Kabul Chawla (Delhi) . . . 573

----Procedure for assessment of third person--Special procedure of assessment of search cases--No dissimilarity--Power of Assessing Officer having jurisdiction in both cases identical--Income-tax Act, 1961, ss. 153C, 158BD-- CIT v. Mechmen (MP) . . . 591

Transfer pricing --International transactions--Arm’s length price--Advertising, marketing and promotion expenses--Bright line method not legally permissible method--Need for detailed examination of operating agreement between assessee and its associated enterprise and franchisees to ascertain if any part of expenses was for purpose of creating marketing intangibles for associated enterprise of assessee--Determination of arm’s length price only thereafter--Matter remanded--Income-tax Act, 1961, s. 92B-- Yum Restaurants (India) P. Ltd. v. ITO (Delhi) . . . 637

 

AUTHORITY FOR ADVANCE RULINGS

Non-resident --Taxability in India--Capital gains--Capital asset--Non-resident acquiring shares in Indian company between September, 1995 and January, 2005--Proposing to transfer them in favour of group entity in Singapore as part of group re-organisation--Non-resident not having permanent establishment in India--Transaction not for avoidance of tax--Shares to be treated as capital asset not stock-in-trade--Profits not business income but capital gains--Not taxable in India--Even if treated as business income not taxable in absence of permanent establishment--Provisions relating to minimum alternate tax, transfer pricing and deduction of tax at source not applicable--Non-resident not bound to file return in India--Income-tax Act, 1961, ss. 2(14), 92 to 92F, 115JB, 139, 195--Double Taxation Avoidance Agreement between India and Mauritius, arts. 5, 13-- Dow AgroSciences Agricultural Products Ltd. , In re . . . 668

 

SECTIONWISE INDEX TO CASES REPORTED

Double Taxation Avoidance Agreement between India and Mauritius :

Art. 5 --Non-resident--Taxability in India--Capital gains--Capital asset--Non-resident acquiring shares in Indian company between September, 1995 and January, 2005--Proposing to transfer them in favour of group entity in Singapore as part of group re-organisation--Non-resident not having permanent establishment in India--Transaction not for avoidance of tax--Shares to be treated as capital asset not stock-in-trade--Profits not business income but capital gains--Not taxable in India--Even if treated as business income not taxable in absence of permanent establishment--Provisions relating to minimum alternate tax, transfer pricing and deduction of tax at source not applicable--Non-resident not bound to file return in India-- Dow AgroSciences Agricultural Products Ltd. , In re . . . 668

Art. 13 --Non-resident--Taxability in India--Capital gains--Capital asset--Non-resident acquiring shares in Indian company between September, 1995 and January, 2005--Proposing to transfer them in favour of group entity in Singapore as part of group re-organisation--Non-resident not having permanent establishment in India--Transaction not for avoidance of tax--Shares to be treated as capital asset not stock-in-trade--Profits not business income but capital gains--Not taxable in India--Even if treated as business income not taxable in absence of permanent establishment--Provisions relating to minimum alternate tax, transfer pricing and deduction of tax at source not applicable--Non-resident not bound to file return in India-- Dow AgroSciences Agricultural Products Ltd. , In re . . . 668

Income-tax Act, 1961 :

S. 2(14) --Non-resident--Taxability in India--Capital gains--Capital asset--Non-resident acquiring shares in Indian company between September, 1995 and January, 2005--Proposing to transfer them in favour of group entity in Singapore as part of group re-organisation--Non-resident not having permanent establishment in India--Transaction not for avoidance of tax--Shares to be treated as capital asset not stock-in-trade--Profits not business income but capital gains--Not taxable in India--Even if treated as business income not taxable in absence of permanent establishment--Provisions relating to minimum alternate tax, transfer pricing and deduction of tax at source not applicable--Non-resident not bound to file return in India-- Dow AgroSciences Agricultural Products Ltd. , In re . . . 668

S. 14A --Income--Disallowance of expenditure relating to exempt income--Burden of proof--Onus on Assessing Officer to record satisfaction that interest bearing funds used for investment to earn tax-free income--No tangible material on record that could have enabled Assessing Officer to record satisfaction in terms of section 14A--No disallowance-- CIT v.Abhishek Industries Ltd. (P&H) . . . 652

S. 68 --Search and seizure--Assessment in search cases--Share application money--No incriminating evidence related to share capital issued found during course of search--Deletion of addition under section 68--Justified-- Principal CIT v. Kurele Paper Mills P. Ltd.(Delhi) . . . 571

S. 79 --Loss--Carry forward and set off of losses--Condition precedent--Shares carrying fifty-one per cent. of voting power at close of financial year in which loss suffered should be held by same persons on last day of previous year in which loss to be set off--Change of hundred per cent. shareholding and beneficial ownership of shares in assessee--No question of piercing veil at instance of assessee to show ultimate beneficial ownership with parent company arises-- Yum Restaurants (India) P. Ltd. v. ITO (Delhi) . . . 637

S. 92 to 92F --Non-resident--Taxability in India--Capital gains--Capital asset--Non-resident acquiring shares in Indian company between September, 1995 and January, 2005--Proposing to transfer them in favour of group entity in Singapore as part of group re-organisation--Non-resident not having permanent establishment in India--Transaction not for avoidance of tax--Shares to be treated as capital asset not stock-in-trade--Profits not business income but capital gains--Not taxable in India--Even if treated as business income not taxable in absence of permanent establishment--Provisions relating to minimum alternate tax, transfer pricing and deduction of tax at source not applicable--Non-resident not bound to file return in India-- Dow AgroSciences Agricultural Products Ltd. , In re . . . 668

S. 92B --Transfer pricing--International transactions--Arm’s length price--Advertising, marketing and promotion expenses--Bright line method not legally permissible method--Need for detailed examination of operating agreement between assessee and its associated enterprise and franchisees to ascertain if any part of expenses was for purpose of creating marketing intangibles for associated enterprise of assessee--Determination of arm’s length price only thereafter--Matter remanded-- Yum Restaurants (India) P. Ltd. v. ITO(Delhi) . . . 637

S. 115JB --Non-resident--Taxability in India--Capital gains--Capital asset--Non-resident acquiring shares in Indian company between September, 1995 and January, 2005--Proposing to transfer them in favour of group entity in Singapore as part of group re-organisation--Non-resident not having permanent establishment in India--Transaction not for avoidance of tax--Shares to be treated as capital asset not stock-in-trade--Profits not business income but capital gains--Not taxable in India--Even if treated as business income not taxable in absence of permanent establishment--Provisions relating to minimum alternate tax, transfer pricing and deduction of tax at source not applicable--Non-resident not bound to file return in India-- Dow AgroSciences Agricultural Products Ltd. , In re . . . 668

S. 132 --Search and seizure--Block assessment--Undisclosed income--General principles--Assessments completed on date of search--No incriminating materials found during search--Block assessment not valid-- CIT v. Kabul Chawla (Delhi) . . . 573

S. 139 --Non-resident--Taxability in India--Capital gains--Capital asset--Non-resident acquiring shares in Indian company between September, 1995 and January, 2005--Proposing to transfer them in favour of group entity in Singapore as part of group re-organisation--Non-resident not having permanent establishment in India--Transaction not for avoidance of tax--Shares to be treated as capital asset not stock-in-trade--Profits not business income but capital gains--Not taxable in India--Even if treated as business income not taxable in absence of permanent establishment--Provisions relating to minimum alternate tax, transfer pricing and deduction of tax at source not applicable--Non-resident not bound to file return in India-- Dow AgroSciences Agricultural Products Ltd. , In re . . . 668

S. 147 --Reassessment--Notice after four years--Conditions precedent--Assessing Officer in original assessment proceedings considering each and every document and explanation given by assessee on seized documents--Tribunal finding categorically that assessee disclosed all material facts necessary for making assessment and no failure on his part--Notice after four years not valid-- CIT v. Hemkunt Timbers Ltd. (All) . . . 658

S. 148 --Reassessment--Notice after four years--Conditions precedent--Assessing Officer in original assessment proceedings considering each and every document and explanation given by assessee on seized documents--Tribunal finding categorically that assessee disclosed all material facts necessary for making assessment and no failure on his part--Notice after four years not valid-- CIT v. Hemkunt Timbers Ltd. (All) . . . 658

S. 149 --Reassessment--Notice after four years--Limitation--Provision at relevant time was ten years--Notice could be issued on or before 31-5-2001--Notice issued on 11-4-2001--Not barred by limitation-- CIT v. Hemkunt Timbers Ltd. (All) . . . 658

S. 153A --Search and seizure--Assessment in search cases--Share application money--No incriminating evidence related to share capital issued found during course of search--Deletion of addition under section 68--Justified-- Principal CIT v. Kurele Paper Mills P. Ltd.(Delhi) . . . 571

----Search and seizure--Assessment of third person--Condition precedent--No satisfaction recorded by Assessing Officer that assets, documents seized belong to some other person--No incriminating material attributable to assessee seized during course of search at premises searched--Assessing Officer cannot assume jurisdiction and transmit items to another file concerning that person without recording satisfaction-- CIT v. Mechmen (MP) . . . 591

----Search and seizure--Assessment of third person--Condition precedent--Recording of satisfaction by Assessing Officer having jurisdiction over person in respect of whom search conducted that money or assets discovered during search belong to third person--Recording of satisfaction necessary even if Assessing Officer of both persons same-- CIT v.Mechmen (MP) . . . 591

----Search and seizure--Block assessment--Undisclosed income--General principles--Assessments completed on date of search--No incriminating materials found during search--Block assessment not valid-- CIT v. Kabul Chawla (Delhi) . . . 573

S. 153C --Search and seizure--Assessment of third person--Condition precedent--Discovery of incriminating material showing undisclosed income of third person--Documents seized--Affidavits of person in respect of whom search conducted that documents belonged to him--No other evidence of undisclosed income--Proceedings under section 153C not valid-- CIT v.RRJ Securities Ltd. (Delhi) . . . 612

----Search and seizure--Assessment of third person--Condition precedent--Satisfaction of Assessing Officer that undisclosed income found during search belongs to third person--No satisfaction recorded before initiating proceedings under section 153C--Assessment not valid-- CIT v. Nirmala Keshwani (Smt.) (All) . . . 566

----Search and seizure--Assessment of third person--Limitation--Limitation starts from date on which assets or documents received by Assessing Officer of third person--Assessing Officer of third person also assessee of person in respect of whom search conducted--Limitation will start on date of recording of satisfaction that incriminating material belonged to third person--Satisfaction recorded on 8-9-2010--Assessments for assessment years 2003-04 and 2004-05 barred by limitation-- CIT v. RRJ Securities Ltd. (Delhi) . . . 612

----Search and seizure--Procedure for assessment of third person--Special procedure of assessment of search cases--No dissimilarity--Power of Assessing Officer having jurisdiction in both cases identical-- CIT v. Mechmen (MP) . . . 591

S. 158BD --Search and seizure--Assessment of third person--Condition precedent--No satisfaction recorded by Assessing Officer that assets, documents seized belong to some other person--No incriminating material attributable to assessee seized during course of search at premises searched--Assessing Officer cannot assume jurisdiction and transmit items to another file concerning that person without recording satisfaction-- CIT v. Mechmen(MP) . . . 591

----Search and seizure--Procedure for assessment of third person--Special procedure of assessment of search cases--No dissimilarity--Power of Assessing Officer having jurisdiction in both cases identical-- CIT v. Mechmen (MP) . . . 591

S. 195 --Non-resident--Taxability in India--Capital gains--Capital asset--Non-resident acquiring shares in Indian company between September, 1995 and January, 2005--Proposing to transfer them in favour of group entity in Singapore as part of group re-organisation--Non-resident not having permanent establishment in India--Transaction not for avoidance of tax--Shares to be treated as capital asset not stock-in-trade--Profits not business income but capital gains--Not taxable in India--Even if treated as business income not taxable in absence of permanent establishment--Provisions relating to minimum alternate tax, transfer pricing and deduction of tax at source not applicable--Non-resident not bound to file return in India-- Dow AgroSciences Agricultural Products Ltd. , In re . . . 668

Income-tax Rules, 1962 :

R. 8D --Income--Disallowance of expenditure relating to exempt income--Burden of proof--Onus on Assessing Officer to record satisfaction that interest bearing funds used for investment to earn tax-free income--No tangible material on record that could have enabled Assessing Officer to record satisfaction in terms of section 14A--No disallowance-- CIT v.Abhishek Industries Ltd. (P&H) . . . 652

 

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Posted by: CA RAJU SHAH <shahmars@hotmail.com>

ITR (TRIB) Volume 45 : Part 5 (Issue dated : 1-2-2016)


 

ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))--PRINT AND ONLINE EDITION

ONLINE EDITION

SUBJECT INDEX TO CASES REPORTED

Business expenditure--Deduction only on actual payment--Failure by assessee to deposit value added tax into Government account before close of year or before date of audit report--Whether amount deposited before due date of filing return of income as prescribed under section 139(1)--Matter remanded for verification--Income-tax Act, 1961, ss. 43B, 145A--Munaf Ibrahim Memon v. ITO (Pune) . . . 47

Capital gains--Long-term capital gains--Failure by assessee to produce document regarding transfer of property in his favour and document in support of cost of acquisition--Assessee himself admitting encroachment upon adjacent plot meant for primary school--Assessee not having title to property--Capital gains accrue only through sale or transfer of capital asset--Income cannot be taxed as long-term capital gains--Income-tax Act, 1961, ss. 2(14), 45-- ITO v. Bhagwan T. Fatnani (Mumbai) . . . 56

Words and phrases--"Any kind"--"Held"--Meanings of-- ITO v. Bhagwan T. Fatnani (Mumbai) . . . 56

 

PRINT EDITION

Volume 45 : Part 5 (Issue dated : 1-2-2016)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Accounting --Method of accounting--Assessee following cash basis of accounting for income arising from profession and mercantile system of accounting for income arising from business consistently--Not hybrid method of accounting--Two method of accounting allowable for two sources of income--Income-tax Act, 1961, s. 145-- Vishwanath Acharya v. Asst. CIT (Mumbai) . . . 554

Appeal to Appellate Tribunal --Additional evidence--Admission and consideration of ledger account as additional evidence--Assessee placing copy of ledger account during first appellate proceedings and assessment proceedings--No dispute regarding outstanding amount in ledger account--Ledger account not additional evidence in case of assessee--No requirement of invoking provisions of rule 29--Income-tax Act, 1961--Income-tax (Appellate Tribunal) Rules, 1963, r. 29-- Vipin Malik v. Asst. CIT
(Delhi) . . . 589

Appeal to Commissioner (Appeals) --Powers of Commissioner (Appeals)--Power to enhance assessment and travel beyond subject matter of appeal--Income-tax Act, 1961, s. 251(2)-- Sundaram Medical Foundation v. Deputy DIT (Exemptions) I
(Chennai) . . . 500

Business expenditure --Employees' stock option plan--Discount--Excess of public issue price over price charged to employees would qualify as discount--Difference allowable as discount--Income-tax Act, 1961, s. 37-- HDFC Bank Ltd. v. Deputy CIT
(Mumbai) . . . 529

Cash credits --Share transactions--No direct or material evidence against assessee to hold share transactions not genuine--General statement of director of another company before investigation wing--Assessee not provided opportunity to confront director in relation to transactions related to assessee--Additions under section 68 not warranted--Income-tax Act, 1961, s. 68-- Yamuna Estate P. Ltd. v. ITO (Mumbai) . . . 517

Charitable purpose --Computation of income--Carry forward of excess application of funds to subsequent years--Not permissible--Loss on transfer of assets--Purchase cost of assets allowed as application of funds in year of purchase--Loss on sale thereof not to be treated as application of funds again--Sale proceeds income of assessee to be applied for objects of trust--Depreciation on assets full cost of which allowed as application of funds--Not allowable--Bad debts--Mercantile system of accounting--If receivables on which claim made earlier treated as income of trust to be allowed as application of funds when they become bad and are written off in books of account--Income-tax Act, 1961, s. 11-- Sundaram Medical Foundation v. Deputy DIT (Exemptions) I
(Chennai) . . . 500

----Exemption--Definition--Provision of medical relief--Is charitable activity--Generation of surplus does not disqualify assessee--Corpus donations not to be treated as income--Income-tax Act, 1961, ss. 2(15), 11-- Sundaram Medical Foundation v. Deputy DIT (Exemptions) I (Chennai) . . . 500

Income --Accrual--Assessee receiving professional advances from its clients to meet expenses for and on behalf of its clients--Assessee keeping advance receipts in separate ledger account in name of client where all expenses deposited from time to time including professional bills--Assessee transferring professional fees to profit and loss account and carry forward credit balance in advance account to next year as sundry creditors--Professional advance received not income in hands of assessee--Income-tax Act, 1961--Vipin Malik v. Asst. CIT (Delhi) . . . 589

----Disallowance of expenditure in relation to exempt income--Dividend--Assessee maintaining same books of account for every activity--Dividend earned incidental to normal business activities of assessee--Disallowance under section 14A should not exceed quantum of exempt income--Income-tax Act, 1961, s. 14A--Income-tax Rules, 1962, r. 8D-- K. Ratanchand and Co. v. ITO (Ahd) . . . 608

----Disallowance of expenditure relating to exempt income--General principles--That assessee utilised its own funds in making investments not relevant to whether assessee incurred expenditure in relation to earning exempt income--Investment in securities made out of common pool of funds--Tax-free investments acquired over the years in the course of its business--Failure by assessee to establish exact funding of tax-free investments with reference to accounts--No case on facts or finding that securities formed part of assessee's stock-in-trade--Disallowance proper--Income-tax Act, 1961, s. 14A--Income-tax Rules, 1962, r. 8D-- HDFC Bank Ltd. v. Deputy CIT
(Mumbai) . . . 529

----Expenditure in relation to income not includible in taxable income--Dividend--Assessee not making suo motu disallowance--To be presumed that assessee claiming no expenditure incurred by him in relation to income not forming part of total income-- Disallowance of dividend proper--Income-tax Act, 1961, s. 14A--Income-tax Rules, 1962, r. 8D-- Vipin Malik v. Asst. CIT (Delhi) . . . 589

Income from house property --Annual letting value--Assessing Officer computing annual letting value based on notional rent on cost of properties--Failure by Department to consider additional evidence produced by assessee vitiating principles of natural justice--Assessing Officer to determine afresh income from house properties in accordance with provisions of sections 22 and 23 and to follow principles laid down by court--Matter remanded--Income-tax Act, 1961, ss. 22, 23-- Vishwanath Acharya v. Asst. CIT
(Mumbai) . . . 554

Penalty --Concealment of income or furnishing inaccurate particulars of income--Assessee computing taxable income on book profits and giving full and complete details of short-term loss accrued and dividend earned--Failure to give effect to section 94(7) has no bearing on payment of tax to be paid--No evasion of tax liability--Penalty under section 271(1)(c) not leviable since income assessed under section 115JB--Income-tax Act, 1961, ss. 94(7), 115JB, 271(1)(c)-- Compucom Software Ltd. v. Deputy CIT
(Jaipur) . . . 619

Precedent --Authority only for what it actually decides not what may remotely or even logically follow from it-- HDFC Bank Ltd. v. Deputy CIT (Mumbai) . . . 529

Reassessment --Income escaping assessment--Search operations in premises of third person--Documents found belonging to persons in respect of whom search conducted and not to assessee--Reopening on basis of loose papers containing name of assessee as person to whom accommodation entries provided--Condition precedent for issuance of notice under section 153C not satisfied--Reopening of assessment rightly done under section 147--Income-tax Act, 1961, ss. 147, 153C-- Yamuna Estate P. Ltd. v. ITO (Mumbai) . . . 517

Unexplained cash credit --Advance received against sale of accommodations in name of close family members of assessee--Accommodations stated to be acquired out of undisclosed income of assessee and brought to tax as undisclosed income in hands of assessee--Capital gains arising on sale of accommodations to be charged in hands of assessee--Assessing Officer to compute capital gains arising out of accommodations--Matter remanded--Income-tax Act, 1961, s. 68-- Vishwanath Acharya v. Asst. CIT
(Mumbai) . . . 554

----Cash deposits--Failure by assessee to substantiate deposits with evidence before Assessing Officer--Assessee not well versed with terms of accountancy, tax and other laws and regulations--Assessee's accountant leaving employment without handing over charge of books of account and assessee travelling while assessment proceedings going on--Sufficient cause shown for non-production of evidence--Assessing Officer to admit additional evidence and decide issue afresh on merits--Matter remanded--Income-tax Act, 1961, s. 68-- Vishwanath Acharya v. Asst. CIT (Mumbai) . . . 554

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961

S. 2(15) --Charitable purpose--Exemption--Definition--Provision of medical relief--Is charitable activity--Generation of surplus does not disqualify assessee--Corpus donations not to be treated as income-- Sundaram Medical Foundation v. Deputy DIT (Exemptions) I (Chennai) . . . 500

S. 11 --Charitable purpose--Computation of income--Carry forward of excess application of funds to subsequent years--Not permissible--Loss on transfer of assets--Purchase cost of assets allowed as application of funds in year of purchase--Loss on sale thereof not to be treated as application of funds again--Sale proceeds income of assessee to be applied for objects of trust--Depreciation on assets full cost of which allowed as application of funds--Not allowable--Bad debts--Mercantile system of accounting--If receivables on which claim made earlier treated as income of trust to be allowed as application of funds when they become bad and are written off in books of account-- Sundaram Medical Foundation v. Deputy DIT (Exemptions) I (Chennai) . . . 500

----Charitable purpose--Exemption--Definition--Provision of medical relief--Is charitable activity--Generation of surplus does not disqualify assessee--Corpus donations not to be treated as income-- Sundaram Medical Foundation v. Deputy DIT (Exemptions) I (Chennai) . . . 500

S. 14A --Income--Disallowance of expenditure in relation to exempt income--Dividend--Assessee maintaining same books of account for every activity--Dividend earned incidental to normal business activities of assessee--Disallowance under section 14A should not exceed quantum of exempt income-- K. Ratanchand and Co. v. ITO
(Ahd) . . . 608

----Income--Disallowance of expenditure relating to exempt income--General principles--That assessee utilised its own funds in making investments not relevant to whether assessee incurred expenditure in relation to earning exempt income--Investment in securities made out of common pool of funds--Tax-free investments acquired over the years in the course of its business--Failure by assessee to establish exact funding of tax-free investments with reference to accounts--No case on facts or finding that securities formed part of assessee's stock-in-trade--Disallowance proper-- HDFC Bank Ltd. v. Deputy CIT (Mumbai) . . . 529

----Income--Expenditure in relation to income not includible in taxable income--Dividend--Assessee not making suo motu disallowance--To be presumed that assessee claiming no expenditure incurred by him in relation to income not forming part of total income-- Disallowance of dividend proper-- Vipin Malik v. Asst. CIT
(Delhi) . . . 589

S. 22 --Income from house property--Annual letting value--Assessing Officer computing annual letting value based on notional rent on cost of properties--Failure by Department to consider additional evidence produced by assessee vitiating principles of natural justice--Assessing Officer to determine afresh income from house properties in accordance with provisions of sections 22 and 23 and to follow principles laid down by court--Matter remanded-- Vishwanath Acharya v. Asst. CIT (Mumbai) . . . 554

S. 23 --Income from house property--Annual letting value--Assessing Officer computing annual letting value based on notional rent on cost of properties--Failure by Department to consider additional evidence produced by assessee vitiating principles of natural justice--Assessing Officer to determine afresh income from house properties in accordance with provisions of sections 22 and 23 and to follow principles laid down by court--Matter remanded-- Vishwanath Acharya v. Asst. CIT (Mumbai) . . . 554

S. 37 --Business expenditure--Employees' stock option plan--Discount--Excess of public issue price over price charged to employees would qualify as discount--Difference allowable as discount-- HDFC Bank Ltd. v. Deputy CIT (Mumbai) . . . 529

S. 68 --Cash credits--Share transactions--No direct or material evidence against assessee to hold share transactions not genuine--General statement of director of another company before investigation wing--Assessee not provided opportunity to confront director in relation to transactions related to assessee--Additions under section 68 not warranted-- Yamuna Estate P. Ltd. v. ITO (Mumbai) . . . 517

----Unexplained cash credit--Advance received against sale of accommodations in name of close family members of assessee--Accommodations stated to be acquired out of undisclosed income of assessee and brought to tax as undisclosed income in hands of assessee--Capital gains arising on sale of accommodations to be charged in hands of assessee--Assessing Officer to compute capital gains arising out of accommodations--Matter remanded-- Vishwanath Acharya v. Asst. CIT (Mumbai) . . . 554

----Unexplained cash credit--Cash deposits--Failure by assessee to substantiate deposits with evidence before Assessing Officer--Assessee not well versed with terms of accountancy, tax and other laws and regulations--Assessee's accountant leaving employment without handing over charge of books of account and assessee travelling while assessment proceedings going on--Sufficient cause shown for non-production of evidence--Assessing Officer to admit additional evidence and decide issue afresh on merits--Matter remanded-- Vishwanath Acharya v. Asst. CIT (Mumbai) . . . 554

S. 94(7) --Penalty--Concealment of income or furnishing inaccurate particulars of income--Assessee computing taxable income on book profits and giving full and complete details of short-term loss accrued and dividend earned--Failure to give effect to section 94(7) has no bearing on payment of tax to be paid--No evasion of tax liability--Penalty under section 271(1)(c) not leviable since income assessed under section 115JB-- Compucom Software Ltd. v. Deputy CIT (Jaipur) . . . 619

S. 115JB --Penalty--Concealment of income or furnishing inaccurate particulars of income--Assessee computing taxable income on book profits and giving full and complete details of short-term loss accrued and dividend earned--Failure to give effect to section 94(7) has no bearing on payment of tax to be paid--No evasion of tax liability--Penalty under section 271(1)(c) not leviable since income assessed under section 115JB-- Compucom Software Ltd. v. Deputy CIT (Jaipur) . . . 619

S. 145 --Accounting--Method of accounting--Assessee following cash basis of accounting for income arising from profession and mercantile system of accounting for income arising from business consistently--Not hybrid method of accounting--Two method of accounting allowable for two sources of income-- Vishwanath Acharya v. Asst. CIT (Mumbai) . . . 554

S. 147 --Reassessment--Income escaping assessment--Search operations in premises of third person--Documents found belonging to persons in respect of whom search conducted and not to assessee--Reopening on basis of loose papers containing name of assessee as person to whom accommodation entries provided--Condition precedent for issuance of notice under section 153C not satisfied--Reopening of assessment rightly done under section 147-- Yamuna Estate P. Ltd. v. ITO (Mumbai) . . . 517

S. 153C --Reassessment--Income escaping assessment--Search operations in premises of third person--Documents found belonging to persons in respect of whom search conducted and not to assessee--Reopening on basis of loose papers containing name of assessee as person to whom accommodation entries provided--Condition precedent for issuance of notice under section 153C not satisfied--Reopening of assessment rightly done under section 147-- Yamuna Estate P. Ltd. v. ITO (Mumbai) . . . 517

S. 251(2) --Appeal to Commissioner (Appeals)--Powers of Commissioner (Appeals)--Power to enhance assessment and travel beyond subject matter of appeal-- Sundaram Medical Foundation v. Dy. DIT (Exemptions) I (Chennai) . . . 500

S. 271(1)(c) --Penalty--Concealment of income or furnishing inaccurate particulars of income--Assessee computing taxable income on book profits and giving full and complete details of short-term loss accrued and dividend earned--Failure to give effect to section 94(7) has no bearing on payment of tax to be paid--No evasion of tax liability--Penalty under section 271(1)(c) not leviable since income assessed under section 115JB-- Compucom Software Ltd. v. Deputy CIT (Jaipur) . . . 619

Income-tax (Appellate Tribunal) Rules, 1963

R. 29 --Appeal to Appellate Tribunal--Additional evidence--Admission and consideration of ledger account as additional evidence--Assessee placing copy of ledger account during first appellate proceedings and assessment proceedings--No dispute regarding outstanding amount in ledger account--Ledger account not additional evidence in case of assessee--No requirement of invoking provisions of rule 29-- Vipin Malik v. Asst. CIT (Delhi) . . . 589

Income-tax Rules, 1962

R. 8D --Income--Disallowance of expenditure in relation to exempt income--Dividend--Assessee maintaining same books of account for every activity--Dividend earned incidental to normal business activities of assessee--Disallowance under section 14A should not exceed quantum of exempt income-- K. Ratanchand and Co. v. ITO
(Ahd) . . . 608

----Income--Disallowance of expenditure relating to exempt income--General principles--That assessee utilised its own funds in making investments not relevant to whether assessee incurred expenditure in relation to earning exempt income--Investment in securities made out of common pool of funds--Tax-free investments acquired over the years in the course of its business--Failure by assessee to establish exact funding of tax-free investments with reference to accounts--No case on facts or finding that securities formed part of assessee's stock-in-trade--Disallowance proper-- HDFC Bank Ltd. v. Deputy CIT (Mumbai) . . . 529

----Income--Expenditure in relation to income not includible in taxable income--Dividend--Assessee not making suo motu disallowance--To be presumed that assessee claiming no expenditure incurred by him in relation to income not forming part of total income--Disallowance of dividend proper-- Vipin Malik v. Asst. CIT
(Delhi) . . . 589

__._,_.___

Posted by: CA RAJU SHAH <shahmars@hotmail.com>

Sunday, January 31, 2016

IEC code can now be applied with only Two Documents

IEC code can now be applied with only Two Documents

(TO BE PUBLISHED IN THE GAZETTE OF INDIA EXTRAORDINARY PART-II, SECTION – 3, SUB-SECTION (II))

GOVERNMENT OF INDIA
MINISTRY OF COMMERCE AND INDUSTRY
DEPARTMENT OF COMMERCE
DIRECTORATE GENERAL OF FOREIGN TRADE
NEW DELHI

NOTIFICATION NO. 34/2015-20, Dated: January 29, 2016

Subject: Amendment in para 2.05 (c) of Foreign Trade Policy (2015-20)

In exercise of powers conferred by Section 3 of FT (D&R) Act, 1992, read with paragraph 1.02 and 2.01 of the Foreign Trade Policy, 2015-2020, as amended from time to time, the Central Government hereby amends the existing para 2.05 (c) of Foreign Trade Policy(2015-20) and introduces a new provision, part (d) under para 2.05. The existing para reads as under:

2.05 Importer-Exporter Code (IEC)

(c) Briefly, following are the requisite details /documents (scanned copies) to be submitted/ uploaded along with the application for IEC:

(i) Details of the entity seeking the IEC:

(1) PAN of the business entity in whose name Import/Export would be done (Applicant individual in case of Proprietorship firms).

(2) Address Proof of the applicant entity.

(3) LLPIN /CIN/ Registration Certification Number (whichever is applicable).

(4) Bank account details of the entity. Cancelled cheque bearing entity's preprinted name or Bank certificate in prescribed format ANF-2A (I).


(ii) Details of the Proprietor/ Partners/ Directors/ Secretary or Chief Executive of the Society/ Managing Trustee of the entity:

(1) PAN (for all categories)

(2) DIN/DPIN (in case of Company /LLP firm)


(iii) Details of the signatory applicant:

(1) Identity proof

(2) PAN

(3) Digital photograph


2. After amendment para 2.05 (c) would read as under:

2.05 Importer-Exporter Code (IEC)

(c) Only the following are required to be uploaded along with the application for IEC with immediate effect:

(1) Digital photograph of the signatory applicant;

(2) Copy of the PAN card of the business entity in whose name Import/Export would be done (Applicant individual in case of Proprietorship firms);

(3) Cancelled cheque bearing entity's pre-printed name or Bank certificate in prescribed format ANF-2A(I)


3. The new insertion, part (d) under Para 2.05 would read as under:

(d) Only online application for IEC /modification in IEC can be made by applicants through digital signature (Class-II or Class-III) with effect from 1.4.2016.


4. Effect of this Notification: From the date of this notification only two documents are required to be uploaded /submitted along with the digital photograph while applying for IEC. Further, applications for IEC/ modification in IEC can be made only in online mode by applicants through digital signatures with effect from 1.4.2016.

[F.No.01/89/180/20/AM-13/PC-2 (B)]

(Anup Wadhawan)
Director General of Foreign Trade

-Regards
CA. C. V. PAWAR

Thursday, January 28, 2016

ITR Volume 380 : Part 4 (Issue dated : 25-1-2016)

 

INCOME TAX REPORTS (ITR)--PRINT AND ONLINE EDITION

ONLINE EDITION

STATUTES AND NOTIFICATIONS

Notifications :

Income-tax Act, 1961 :

Notifications under section 35AC(1), Expln. clause (b) :

Eligible projects or schemes . . . 27

 

PRINT EDITION

ITR Volume 380 : Part 4 (Issue dated : 25-1-2016)

SUBJECT INDEX TO CASES REPORTED

SUPREME COURT

Deduction of tax at source --Penalty--Failure to deduct tax at source--Finding by Commissioner (Appeals) and Tribunal that tax and interest under section 201(1) and (1A) paid and no case made out for levy of penalty--No substantial question of law arises--Income-tax Act, 1961, s. 271C-- CIT v. Bank of Nova Scotia . . . 550

Settlement of cases --Change of law--Provision for abatement of proceedings where no order passed by cut-off date--To be read down--Abatement only where failure owing to reasons attributable to applicant--Order of High Court holding proceedings abated--Set aside and matter remanded to High Court for decision afresh on merits--Income-tax Act, 1961, s. 245HA(1)(iv), (3)-- CIT v. Rajendra Kumar Verma . . . 430

 

HIGH COURTS

Appeal to Appellate Tribunal --Power to rectify defects in order--Application under sections 154(1A) and 254(2) for rectification--Rejection of application under section 254(2) justified--Income-tax Act, 1961, s. 254-- Indus Finance Corporation Ltd. v. CIT (Mad) . . . 504

Capital gains --Meaning of "transfer"--Transfer includes extinguishment of rights in capital asset--Surrender of floor area ratio rights in land amounts to transfer--Income-tax Act, 1961, s. 2(47)-- CIT v. Dinesh D. Ranka (Karn) . . . 440

----Slump sale--Net worth of undertaking--Aggregate value of total assets--Definitions--Depreciable assets--Incorporation by reference of section 43(6)(c)(i)(C)--Effect--Clause (C) must be read as an integral part of clause (a) of Explanation 2 to section 50B--Actual cost to be reduced, inter alia, by depreciation as would have been allowable for years commencing on or after 1-4-1988--Depreciation actually allowed for these years not relevant--Aggregate value of total assets not to be taken at written down value of block of assets as existing--Income-tax Act, 1961, ss. 2(11), 32, 43(6)(c)(i)(C), 50B-- CIT v. Dharampal Satyapal (Delhi) . . . 527

Capital or revenue receipt --Money to be used in purchase of plant and machinery temporarily placed in fixed deposits--Inextricably linked with setting up of plant--Interest on fixed deposits--Capital receipt--Income-tax Act, 1961-- Principal CIT v. Facor Power Ltd.(Delhi) . . . 474

Deduction of tax at source --Interest--Insurance company--Death or injury--Compensation--Not a business transaction or a receipt of any charges on account of services rendered by any other party--Insurance company not required to deduct tax at source--Income-tax Act, 1961-- New India Assurance Co. Ltd. v. Sudesh Chawla (P&H) . . . 467

Depreciation --Additional depreciation--One-time benefit to encourage industrialisation--Half of twenty per cent. allowable where plant and machinery put to use after October 31, 2006 and before March 31, 2007--No restriction in claiming balance ten per cent. in next assessment year--Income-tax Act, 1961, s. 32(1)(iia)-- CIT (LTU) v. Rittal India Pvt. Ltd. (No. 2 ) (Karn) . . . 428

----Additional depreciation--One-time benefit to encourage industrialisation--Plant and machinery set up after October 31, 2006 and before March 31, 2007--Half of additional depreciation of twenty per cent. allowable--No restriction in claiming balance ten per cent. in next assessment year--Income-tax Act, 1961, s. 32(1)(iia)-- CIT v. Rittal India Pvt. Ltd. (No.1 ) (Karn) . . . 423

----Meaning of "owner"--Lease of land for ninety- nine years--Lessee constructing buildings on land and in full control of such buildings--Entitled to depreciation on buildings and on sanitary fittings installed in them--Income-tax Act, 1961, s. 32-- CIT v. Bharat Hotels Ltd.(Delhi) . . . 552

Income --Computation of income--Disallowance under section 14A--Appellate authorities finding ten per cent. of income earned could be apportioned towards expenses for earning dividend--Finding not perverse--Income-tax Rules, 1962, r. 8D--Income-tax Act, 1961, s. 14A-- CIT v. India Advantage Securities Ltd. (Bom) . . . 471

----Lease of land for ninety-nine years--Lessee constructing buildings on land--Spaces in buildings allotted to sub-lessees and interest-free deposits collected--Amount reflected in business income--No further addition could be made--Income-tax Act, 1961-- CIT v. Bharat Hotels Ltd. (Delhi) . . . 552

Income-tax --General principles--Estoppel against pursuing parallel proceedings before two different authorities for same relief-- Indus Finance Corporation Ltd. v. CIT (Mad) . . . 504

Industrial undertaking --Special deduction under section 80-IB --Year in which special deduction is available--Year of manufacture--Three machines manufactured by assessee shown in exhibition in January, 1995--All three machines sold to allied concerns--Not relevant--Manufacture started in accounting year 1994-95 relevant to assessment year 1995-96 not 1996-97--Income-tax Act, 1961, s. 80-IB-- ACE Manufacturing Systems Ltd. v.Addl. CIT (LTU) (Karn) . . . 432

International transactions --Arm’s length price--Effect of section 92CA--Amount in dispute exceeding five crores of rupees--Matter has to be referred to Transfer Pricing Officer--Income-tax Act, 1961, ss. 92CA, 144C-- Carrier Race Technologies Pvt. Ltd. v. ITO(Mad) . . . 483

Interpretation of statutes --Beneficial provision--Additional depreciation--To be construed reasonably and purposively-- CIT (LTU) v. Rittal India Pvt. Ltd. (No. 2 ) (Karn) . . . 428

Interpretation of taxing statutes --Additional depreciation--Beneficial legislation--Liberal construction-- CIT v. Rittal India Pvt. Ltd. (No. 1 ) (Karn) . . . 423

----Definition-- CIT v. Dinesh D. Ranka (Karn) . . . 440

----Incorporation of provision by reference-- CIT v. Dharampal Satyapal (Delhi) . . . 527

Penalty --Concealment of income--Furnishing inaccurate particulars of income--Discretionary power of Tribunal to set aside penalty--Foreign gifts--Factum of gifts mentioned in note in return--When explanation called for further particulars not furnished on account of sour relationship--Tribunal cancelling penalty--No substantial question of law--Income-tax Act, 1961, s. 271(1)(c)-- CIT v. Sunila Sharma (P&H) . . . 462

Precedent --Effect of decisions of Supreme Court in Podar Cement case and Mysore Minerals case-- CIT v. Bharat Hotels Ltd. (Delhi) . . . 552

Reassessment --Notice after four years--Condition precedent--Failure to disclose material facts necessary for assessment--Deductions granted in original assessment after enquiry--Reassessment proceedings after four years to withdraw deduction--No failure to disclose material facts necessary for assessment--Notice not valid--Income-tax Act, 1961, ss. 147, 148-- E-Infochips Ltd. v. Deputy CIT (Guj) . . . 449

----Notice after four years--Condition precedent--Failure to disclose material facts necessary for assessment--Treatment of unutilised Cenvat credit for valuing stock examined by Assessing Officer in original scrutiny assessment--Notice after four years to recompute value of stock--No failure to disclose material facts necessary for assessment--Notice not valid--Income-tax Act, 1961, ss. 147, 148-- Tirupati Foam Ltd. v. Deputy CIT (Guj) . . . 493

Rectification of mistakes --Effect of section 154(1A)--Power to rectify matter not considered in original order of rectification--Lease deed found to be bogus in search proceedings--Disallowance of depreciation in block assessment--Lease income assessed as income from financing transaction--No appeal against such assessment or disallowance of depreciation--Earlier application for rectification given up--Application under section 154(1A) to delete income from lease--Not valid--Income-tax Act, 1961, s. 154-- Indus Finance Corporation Ltd.v. CIT (Mad) . . . 504

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961 :

S. 2(11) --Capital gains--Slump sale--Net worth of undertaking--Aggregate value of total assets--Definitions--Depreciable assets--Incorporation by reference of section 43(6)(c)(i)(C)--Effect--Clause (C) must be read as an integral part of clause (a) of Explanation 2 to section 50B--Actual cost to be reduced, inter alia, by depreciation as would have been allowable for years commencing on or after 1-4-1988--Depreciation actually allowed for these years not relevant--Aggregate value of total assets not to be taken at written down value of block of assets as existing-- CIT v. Dharampal Satyapal (Delhi) . . . 527

S. 2(47) --Capital gains--Meaning of "transfer"--Transfer includes extinguishment of rights in capital asset--Surrender of floor area ratio rights in land amounts to transfer-- CIT v. Dinesh D. Ranka (Karn) . . . 440

S. 14A --Income--Computation of income--Disallowance under section 14A--Appellate authorities finding ten per cent. of income earned could be apportioned towards expenses for earning dividend--Finding not perverse-- CIT v. India Advantage Securities Ltd. (Bom) . . . 471

S. 32 --Capital gains--Slump sale--Net worth of undertaking--Aggregate value of total assets--Definitions--Depreciable assets--Incorporation by reference of section 43(6)(c)(i)(C)--Effect--Clause (C) must be read as an integral part of clause (a) of Explanation 2 to section 50B--Actual cost to be reduced, inter alia, by depreciation as would have been allowable for years commencing on or after 1-4-1988--Depreciation actually allowed for these years not relevant--Aggregate value of total assets not to be taken at written down value of block of assets as existing-- CIT v. Dharampal Satyapal (Delhi) . . . 527

----Depreciation--Meaning of "owner"--Lease of land for ninety- nine years--Lessee constructing buildings on land and in full control of such buildings--Entitled to depreciation on buildings and on sanitary fittings installed in them-- CIT v. Bharat Hotels Ltd. (Delhi) . . . 552

S. 32(1)(iia) --Depreciation--Additional depreciation--One-time benefit to encourage industrialisation--Half of twenty per cent. allowable where plant and machinery put to use after October 31, 2006 and before March 31, 2007--No restriction in claiming balance ten per cent. in next assessment year-- CIT (LTU) v. Rittal India Pvt. Ltd. (No. 2 ) (Karn) . . . 428

----Depreciation--Additional depreciation--One-time benefit to encourage industrialisation--Plant and machinery set up after October 31, 2006 and before March 31, 2007--Half of additional depreciation of twenty per cent. allowable--No restriction in claiming balance ten per cent. in next assessment year-- CIT v. Rittal India Pvt. Ltd. (No. 1 ) (Karn) . . . 423

S. 43(6)(c)(i)(C) --Capital gains--Slump sale--Net worth of undertaking--Aggregate value of total assets--Definitions--Depreciable assets--Incorporation by reference of section 43(6)(c)(i)(C)--Effect--Clause (C) must be read as an integral part of clause (a) of Explanation 2 to section 50B--Actual cost to be reduced, inter alia, by depreciation as would have been allowable for years commencing on or after 1-4-1988--Depreciation actually allowed for these years not relevant--Aggregate value of total assets not to be taken at written down value of block of assets as existing-- CIT v. Dharampal Satyapal (Delhi) . . . 527

S. 50B --Capital gains--Slump sale--Net worth of undertaking--Aggregate value of total assets--Definitions--Depreciable assets--Incorporation by reference of section 43(6)(c)(i)(C)--Effect--Clause (C) must be read as an integral part of clause (a) of Explanation 2 to section 50B--Actual cost to be reduced, inter alia, by depreciation as would have been allowable for years commencing on or after 1-4-1988--Depreciation actually allowed for these years not relevant--Aggregate value of total assets not to be taken at written down value of block of assets as existing-- CIT v. Dharampal Satyapal (Delhi) . . . 527

S. 80-IB --Industrial undertaking--Special deduction under section 80-IB --Year in which special deduction is available--Year of manufacture--Three machines manufactured by assessee shown in exhibition in January, 1995--All three machines sold to allied concerns--Not relevant--Manufacture started in accounting year 1994-95 relevant to assessment year 1995-96 not 1996-97-- ACE Manufacturing Systems Ltd. v. Addl. CIT (LTU) (Karn) . . . 432

S. 92CA --International transactions--Arm’s length price--Effect of section 92CA--Amount in dispute exceeding five crores of rupees--Matter has to be referred to Transfer Pricing Officer-- Carrier Race Technologies Pvt. Ltd. v. ITO (Mad) . . . 483

S. 144C --International transactions--Arm’s length price--Effect of section 92CA--Amount in dispute exceeding five crores of rupees--Matter has to be referred to Transfer Pricing Officer-- Carrier Race Technologies Pvt. Ltd. v. ITO (Mad) . . . 483

S. 147 --Reassessment--Notice after four years--Condition precedent--Failure to disclose material facts necessary for assessment--Deductions granted in original assessment after enquiry--Reassessment proceedings after four years to withdraw deduction--No failure to disclose material facts necessary for assessment--Notice not valid-- E-Infochips Ltd. v.Deputy CIT (Guj) . . . 449

----Reassessment--Notice after four years--Condition precedent--Failure to disclose material facts necessary for assessment--Treatment of unutilised Cenvat credit for valuing stock examined by Assessing Officer in original scrutiny assessment--Notice after four years to recompute value of stock--No failure to disclose material facts necessary for assessment--Notice not valid-- Tirupati Foam Ltd. v. Deputy CIT (Guj) . . . 493

S. 148 --Reassessment--Notice after four years--Condition precedent--Failure to disclose material facts necessary for assessment--Deductions granted in original assessment after enquiry--Reassessment proceedings after four years to withdraw deduction--No failure to disclose material facts necessary for assessment--Notice not valid-- E-Infochips Ltd. v.Deputy CIT (Guj) . . . 449

----Reassessment--Notice after four years--Condition precedent--Failure to disclose material facts necessary for assessment--Treatment of unutilised Cenvat credit for valuing stock examined by Assessing Officer in original scrutiny assessment--Notice after four years to recompute value of stock--No failure to disclose material facts necessary for assessment--Notice not valid-- Tirupati Foam Ltd. v. Deputy CIT (Guj) . . . 493

S. 154 --Rectification of mistakes--Effect of section 154(1A)--Power to rectify matter not considered in original order of rectification--Lease deed found to be bogus in search proceedings--Disallowance of depreciation in block assessment--Lease income assessed as income from financing transaction--No appeal against such assessment or disallowance of depreciation--Earlier application for rectification given up--Application under section 154(1A) to delete income from lease--Not valid-- Indus Finance Corporation Ltd. v. CIT (Mad) . . . 504

S. 245HA(1)(iv), (3) --Settlement of cases--Change of law--Provision for abatement of proceedings where no order passed by cut-off date--To be read down--Abatement only where failure owing to reasons attributable to applicant--Order of High Court holding proceedings abated--Set aside and matter remanded to High Court for decision afresh on merits-- CIT v. Rajendra Kumar Verma(SC) . . . 430

S. 254 --Appeal to Appellate Tribunal--Power to rectify defects in order--Application under sections 154(1A) and 254(2) for rectification--Rejection of application under section 254(2) justified-- Indus Finance Corporation Ltd. v. CIT (Mad) . . . 504

S. 271(1)(c) --Penalty--Concealment of income--Furnishing inaccurate particulars of income--Discretionary power of Tribunal to set aside penalty--Foreign gifts--Factum of gifts mentioned in note in return--When explanation called for further particulars not furnished on account of sour relationship--Tribunal cancelling penalty--No substantial question of law-- CIT v. Sunila Sharma (P&H) . . . 462

S. 271C --Deduction of tax at source--Penalty--Failure to deduct tax at source--Finding by Commissioner (Appeals) and Tribunal that tax and interest under section 201(1) and (1A) paid and no case made out for levy of penalty--No substantial question of law arises-- CIT v.Bank of Nova Scotia (SC). . . 550

 

Income-tax Rules, 1962 :

R. 8D --Income--Computation of income--Disallowance under section 14A--Appellate authorities finding ten per cent. of income earned could be apportioned towards expenses for earning dividend--Finding not perverse-- CIT v. India Advantage Securities Ltd. (Bom) . . . 471

 

__._,_.___

Posted by: CA RAJU SHAH <shahmars@hotmail.com>

Monday, January 25, 2016

Maharashtra VAT- Downloading of Digitally Signed Registration Certificate

Maharashtra VAT- Downloading of Digitally Signed Registration Certificate

Office of the, Commissioner of Sales Tax, 8th Floor, Vikrikar Bhavan, Mazgaon, Mumbai-400010.

TRADE CIRCULAR To No. ACST VAT-2/ Digitally Signed Registration Certificate/2015 / Trade Circular No. 19T of 2015 Mumbai. Dated 21/12/2015 Subject: Downloading of Digitally Signed Registration Certificate Ref: Trade Circular No. 7T of 2015 Dt. 19th May , 2015.

 

A dealer seeking registration under the Maharashtra Value added Tax Act, 2002 submits an online application for registration along with the required documents. The Registration Officer to whom such application gets allocated generates the TIN if the application is found to be correct and is supported with the appropriate documents. Subsequently, the Registration Officer informs the applicant through an email that the TIN has been granted and sends a printed copy of the (TIN) registration certificate to the applicant on the address mentioned in the application through Speed Post. However, it has been observed that in many cases the delivery of (TIN) registration certificates to the applicant is delayed. In order to ensure immediate availability of the (TIN) registration certificate to the applicant, a facility has been made available to download the digitally signed (TIN) registration certificate from the website of the Maharashtra Sales Tax Department i.e. www.mahavat.gov.in  . The Annexure A attached to this circular provides information about downloading of the (TIN) registration certificate. It is clarified that facility of making digitally signed certificate is made available to the dealers to whom registration certificates have been granted on or after 22nd December 2015. It may be noted that the registration officer shall continue to send the physical copy of (TIN) registration certificate to the applicant on the address mentioned in the application through India Post.

This circular cannot be made use for legal interpretation of provisions of law as it is clarificatory in nature. If any member of the trade has any doubt, the same may be referred to this office for further clarification. You are requested to bring the contents of this circular to the notice of the members of your association. (Rajiv Jalota) Commissioner of Sales Tax, Maharashtra State, Mumbai.

 

ANNEXURE "A' INFORMATION ABOUT DOWNLOADING THE (TIN) REGISTRATION CERTIFICATE

A) For VAT/CST/PTRC Certificate Download

1)  Enroll yourself on the website by using your TIN ( for the TINs generated on/after 21st December 2015)

2)  Click the button New User register here' appearing on 'My Tax Portal' or Enter the URL

3)  Click Dealer Enrollment' link

4)  Fill all the details in the form and submit the form

5)  Do not share the Password created by you during enrollment. process.

6)  Login with 11 digit TIN (DO NOT SUFFIX 'V' OR 'C' OR -P.) and password created during enrollment.

7)  Click the link -Registration Certificates‑

8)    Click the corresponding application number/s appearing on the screen to download the Registration Certificate/s 9) Save the download Registration Certificate/s

 

B) For PTEC Registration Certificate Download

1)    Go to the Downloads section of the website

2)     Click PTEC Registration Certificate

3)     Enter PTEC TIN allotted/communicated

4)     Click Submit button

5)     Download the PTEC Registration Certificate

6)    Validate the Digital Signature as described in point no. C of the Annexure

 

C) Validation of the Digital Signature :- a)    Open the Registration Certificate with Acrobat Reader b)     Click on the signature mentioned on the certificate c)    Click on Validate signature. If green coloured – mark is not seen on the signature part of the certificate, then d)   Click on signature properties e) Click on show signer's certificate f) Click on Trust Tab g)     Click on Add to Trusted Certificate tab h)     Check all the check all the boxes on the window i) Click validate signature tab j)  √ Mark in green colour will appear on Signature after successful validation

D)   Take the printout of the certificate/s and keep it in safe custody

E)   For more details kindly refer the instruction sheet for "Registration Certificate Download Instructions Sheet" available in the section "Instruction sheets for e-Services" 


Regards,
-------
CA.C.V.PAWAR
PATIL DAWARE GIRASE PAWAR & ASSOCIATES
CHARTERED ACCOUNTANTS
0253-2319641. M-9423961209

INDIAN CA - NURTURED IN INDIA, GROOMED FOR THE WORLD