Thursday, March 5, 2015

ITR (TRIB) Volume 38 : Part 2 (Issue dated : 2-3-2015)

 

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

 

ONLINE EDITION

SUBJECT INDEX TO CASES REPORTED

Capital or revenue receipt --Receipt on sale of carbon credit--Capital in nature--Income-tax Act, 1961-- Prabhu Spinning Mills P. Ltd. v. Deputy CIT (Chennai) . . . 209

International transactions --Transfer pricing--Arm’s length price--Determination--Transactional net margin method--Automobile design and engineering services rendered by U. K. company--Selection of comparables--Indian and foreign transfer pricing regulations accepting non-domestic comparables--Failure by Transfer Pricing Officer to take into account comparable analysis of foreign companies--Matter remanded to Transfer Pricing Officer to examine transfer pricing adjustment afresh--Income-tax Rules, 1962, r. 10B-- Tata Motors European Technical Centre Plc. v. Asst. DIT (International Taxation) (Mumbai) . . . 195

 

PRINT EDITION

Volume 38 : Part 2 (Issue dated : 2-3-2015)

SUBJECT INDEX TO CASES REPORTED

Accounting --Rejection of accounts--Low gross profit rate as compared to previous year--Change in market causing change in gross profit rate--Deletion of disallowance proper--Income-tax Act, 1961-- Himson International P. Ltd. v. Deputy CIT (Ahd) . . . 218

Assessment --Appeal to Commissioner (Appeals)--Disallowances made by Assessing Officer resulting in positive income--Denial of opportunity to claim exemption under section 10A--Claim made for first time before Commissioner (Appeals)--Duty of Assessing Officer to grant exemption statutorily allowable to assessee--Matter remanded to Assessing Officer--Income-tax Act, 1961, ss. 10A, 143(3)-- Himson International P. Ltd. v. Deputy CIT (Ahd) . . . 218

Business expenditure --Disallowance--Foreign travel expenditure--No doubt in details of expenses--Disallowance cannot be made on flimsy ground--Income-tax Act, 1961-- Parle Agro P. Ltd. v. Asst. CIT (Mumbai) . . . 203

----Capital or revenue expenditure--Technical consultancy charges to a foreign company--No material to show no enduring benefit obtained by assessee--Expenditure capital in nature--Income-tax Act, 1961-- Himson International P. Ltd. v. Deputy CIT (Ahd) . . . 218

----Disallowance--Payments liable to deduction of tax at source--Disallowance cannot be made for amounts paid before end of relevant accounting year--Income-tax Act, 1961, ss. 40(a)(ia), 194C-- Ushodaya Enterprises Ltd. v. Deputy CIT (Hyd) . . . 148

----Disallowance--Payments to non-resident--Failure to deduct tax at source--Usance charges on import of raw material--Are interest within provisions of section 2(28A) and accrue in India--Section 195 applicable--Assessee not deducting tax at source--Assessing Officer justified in disallowing payment--Income-tax Act, 1961, ss. 40(a)(i), 195-- Asst. CIT v. Indian Furniture Products Ltd. (Panaji) . . . 174

----Employees’ contribution towards Employees State Insurance--Contribution made before due date for filing return of income--Disallowance cannot be made--Income-tax Act, 1961, s. 139(1)-- Universal Precision Screws v. Asst. CIT (Delhi) . . . 233

----Expenditure incurred towards product development including design charges--Revenue expenditure--Whether expenses pertains to subsequent year or year in question--Must be proved with concrete evidence--Income-tax Act, 1961-- Parle Agro P. Ltd. v. Asst. CIT(Mumbai) . . . 203

----Festival expenses--Assessing Officer cannot step into shoes of businessman to decide whether a particular expenditure necessary or not--Disallowance not sustainable--Income-tax Act, 1961-- Universal Precision Screws v. Asst. CIT (Delhi) . . . 233

----Prior period expenses to be allowed as deduction--Income-tax Act, 1961-- Ushodaya Enterprises Ltd. v. Deputy CIT (Hyd) . . . 148

----Travelling and conveyance expenses--Failure by assessee to produce bills and vouchers supporting expenses incurred--Disallowance restricted--Income-tax Act, 1961-- Himson International P. Ltd. v. Deputy CIT (Ahd) . . . 218

Business loss --Bad debt--Amounts advanced to for purchase of capital assets--Cannot be allowed as bad debts or business loss--Income-tax Act, 1961-- Hindustan Times Ltd. v. Deputy CIT (Delhi) . . . 165

Capital or revenue expenditure -- Expenditure towards permission from Government for using factory premises for other purposes--Factory premises already in use of assessee--Expenditure towards payment including interest cannot be capitalised--Expenditure revenue in nature--Income-tax Act, 1961, s. 37-- Deputy DIT v. Micron Instruments P. Ltd. (Delhi) . . . 242

----Artwork charges--Artwork mainly for advertisement and for use for short duration--No enduring advantage--Not capital expenditure--Income-tax Act, 1961-- Parle Agro P. Ltd. v. Asst. CIT (Mumbai) . . . 203

----Extension of existing business--Failure by authorities to find nature of project undertaken--Suspension of capitalisation of borrowing requiring examination of facts--Matter remanded to Assessing Officer--Income-tax Act, 1961, s. 37-- Hindustan Times Ltd. v. Deputy CIT(Delhi) . . . 165

----Market research expenses for deciding market strategy for promoting its products--Expenses for sustaining market and to push up sales--Revenue expenditure--Income-tax Act, 1961-- Parle Agro P. Ltd. v. Asst. CIT (Mumbai) . . . 203

Charitable purpose --Registration of trusts--Assessee’s primary purpose advancement of objects of general public utility--Remains charitable even if activity incidental or ancillary to main purpose profitable in nature--Denial of registration not justified--Income-tax Act, 1961, s. 12AA-- IP India Foundation v. DIT (Exemptions) (Hyd) . . . 195

Depreciation --Rate of depreciation--Computers--Printers, scanners, modems and routers come within ambit of expression “computer†when used along with computer--Entitled to higher rate of depreciation--Income-tax Act, 1961, s. 32-- Ushodaya Enterprises Ltd. v. Deputy CIT (Hyd) . . . 148

Exemption --Export oriented undertaking--Export turnover--Profits arising out of fluctuation of rates of foreign exchange--Form part of export turnover--Assessee dealing in manufacture and export of fasteners--Sale of scrap--Proceeds not includible in turnover--Income-tax Act, 1961, s. 10B-- Universal Precision Screws v. Asst. CIT (Delhi) . . . 233

----Export oriented undertaking--Profits eligible for exemption--Interest from fixed deposit receipts placed for maintaining margin money--Close nexus with business activity of assessee--To be treated as business income--Eligible for deduction under section 10B--Income-tax Act, 1961, s. 10B-- Universal Precision Screws v. Asst. CIT (Delhi) . . . 233

Income from house property --Deductions--Interest on borrowings--Interest on loan taken for acquiring property--Allowable--Income-tax Act, 1961, s. 24(b)-- Universal Precision Screws v. Asst. CIT (Delhi) . . . 233

Industrial undertaking --Special deduction under section 80-IC--Profits of undertaking--Subsidies such as transport, power, interest and insurance are part of business profits and gains from industrial undertaking--Deduction allowable--Income-tax Act, 1961, s. 80-IC--Meghalaya Mineral Products v. Asst. CIT (Guwahati) . . . 186

Penalty --Acceptance of loan or deposit otherwise than by account payee cheque or account payee draft--Acceptance of cash by husband from his wife cannot be treated as loan or advance in strict sense--Order cancelling penalty levied under section 271D justified--Income-tax Act, 1961, ss. 271D, 269SS-- Asst. CIT v. Vardaan Fashion (Delhi) . . . 247

----Acceptance of loan or deposit otherwise than by account payee cheque or account payee draft--Firm accepting cash from partner otherwise than by account payee cheque--Firm and partner not two different persons--Payment not of character of loan or deposit in general law--Section 269SS not applicable--Order cancelling levy of penalty under section 271D justified--Income-tax Act, 1961, ss. 271D, 269SS-- Asst. CIT v. Vardaan Fashion(Delhi) . . . 247

----Acceptance of loan or deposit otherwise than by account payee cheque or account payee draft--Scope of section 269SS--No monetary transaction between assessee and creditors--No violation of section 269SS--Order deleting penalty justified--Income-tax Act, 1961, ss. 269SS, 271D-- Asst. CIT v. Vardaan Fashion (Delhi) . . . 247

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961

S. 10A --Assessment--Appeal to Commissioner (Appeals)--Disallowances made by Assessing Officer resulting in positive income--Denial of opportunity to claim exemption under section 10A--Claim made for first time before Commissioner (Appeals)--Duty of Assessing Officer to grant exemption statutorily allowable to assessee--Matter remanded to Assessing Officer-- Himson International P. Ltd. v. Deputy CIT (Ahd) . . . 218

S. 10B --Exemption--Export oriented undertaking--Export turnover--Profits arising out of fluctuation of rates of foreign exchange--Form part of export turnover--Assessee dealing in manufacture and export of fasteners--Sale of scrap--Proceeds not includible in turnover--Universal Precision Screws v. Asst. CIT (Delhi) . . . 233

----Exemption--Export oriented undertaking--Profits eligible for exemption--Interest from fixed deposit receipts placed for maintaining margin money--Close nexus with business activity of assessee--To be treated as business income--Eligible for deduction under section 10B--Universal Precision Screws v. Asst. CIT (Delhi) . . . 233

S. 12AA --Charitable purpose--Registration of trusts--Assessee’s primary purpose advancement of objects of general public utility--Remains charitable even if activity incidental or ancillary to main purpose profitable in nature--Denial of registration not justified-- IP India Foundation v. DIT (Exemptions) (Hyd) . . . 195

S. 24(b) --Income from house property--Deductions--Interest on borrowings--Interest on loan taken for acquiring property--Allowable-- Universal Precision Screws v. Asst. CIT (Delhi) . . . 233

S. 32 --Depreciation--Rate of depreciation--Computers--Printers, scanners, modems and routers come within ambit of expression “computer†when used along with computer--Entitled to higher rate of depreciation-- Ushodaya Enterprises Ltd. v. Deputy CIT (Hyd) . . . 148

S. 37 --Capital or revenue expenditure-- Expenditure towards permission from Government for using factory premises for other purposes--Factory premises already in use of assessee--Expenditure towards payment including interest cannot be capitalised--Expenditure revenue in nature-- Deputy DIT v. Micron Instruments P. Ltd. (Delhi) . . . 242

----Capital or revenue expenditure--Extension of existing business--Failure by authorities to find nature of project undertaken--Suspension of capitalisation of borrowing requiring examination of facts--Matter remanded to Assessing Officer-- Hindustan Times Ltd. v. Deputy CIT (Delhi) . . . 165

S. 40(a)(i) --Business expenditure--Disallowance--Payments to non-resident--Failure to deduct tax at source--Usance charges on import of raw material--Are interest within provisions of section 2(28A) and accrue in India--Section 195 applicable--Assessee not deducting tax at source--Assessing Officer justified in disallowing payment-- Asst. CIT v. Indian Furniture Products Ltd. (Panaji) . . . 174

----Business expenditure--Disallowance--Payments liable to deduction of tax at source--Disallowance cannot be made for amounts paid before end of relevant accounting year--Ushodaya Enterprises Ltd. v. Deputy CIT (Hyd) . . . 148

S. 80-IC --Industrial undertaking--Special deduction under section 80-IC--Profits of undertaking--Subsidies such as transport, power, interest and insurance are part of business profits and gains from industrial undertaking--Deduction allowable-- Meghalaya Mineral Products v. Asst. CIT (Guwahati) . . . 186

S. 139(1) --Business expenditure--Employees’ contribution towards Employees State Insurance--Contribution made before due date for filing return of income--Disallowance cannot be made-- Universal Precision Screws v. Asst. CIT (Delhi) . . . 233

S. 143(3) --Assessment--Appeal to Commissioner (Appeals)--Disallowances made by Assessing Officer resulting in positive income--Denial of opportunity to claim exemption under section 10A--Claim made for first time before Commissioner (Appeals)--Duty of Assessing Officer to grant exemption statutorily allowable to assessee--Matter remanded to Assessing Officer-- Himson International P. Ltd. v. Deputy CIT (Ahd) . . . 218

S. 194C --Business expenditure--Disallowance--Payments liable to deduction of tax at source--Disallowance cannot be made for amounts paid before end of relevant accounting year-- Ushodaya Enterprises Ltd. v. Deputy CIT (Hyd) . . . 148

S. 195 --Business expenditure--Disallowance--Payments to non-resident--Failure to deduct tax at source--Usance charges on import of raw material--Are interest within provisions of section 2(28A) and accrue in India--Section 195 applicable--Assessee not deducting tax at source--Assessing Officer justified in disallowing payment-- Asst. CIT v. Indian Furniture Products Ltd. (Panaji) . . . 174

S. 269SS --Penalty--Acceptance of loan or deposit otherwise than by account payee cheque or account payee draft--Acceptance of cash by husband from his wife cannot be treated as loan or advance in strict sense--Order cancelling penalty levied under section 271D justified--Asst. CIT v. Vardaan Fashion (Delhi) . . . 247

----Penalty--Acceptance of loan or deposit otherwise than by account payee cheque or account payee draft--Firm accepting cash from partner otherwise than by account payee cheque--Firm and partner not two different persons--Payment not of character of loan or deposit in general law--Section 269SS not applicable--Order cancelling levy of penalty under section 271D justified-- Asst. CIT v. Vardaan Fashion (Delhi) . . . 247

----Penalty--Acceptance of loan or deposit otherwise than by account payee cheque or account payee draft--Scope of section 269SS--No monetary transaction between assessee and creditors--No violation of section 269SS--Order deleting penalty justified-- Asst. CIT v. Vardaan Fashion (Delhi) . . . 247

S. 271D --Penalty--Acceptance of loan or deposit otherwise than by account payee cheque or account payee draft--Acceptance of cash by husband from his wife cannot be treated as loan or advance in strict sense--Order cancelling penalty levied under section 271D justified--Asst. CIT v. Vardaan Fashion (Delhi) . . . 247

----Penalty--Acceptance of loan or deposit otherwise than by account payee cheque or account payee draft--Firm accepting cash from partner otherwise than by account payee cheque--Firm and partner not two different persons--Payment not of character of loan or deposit in general law--Section 269SS not applicable--Order cancelling levy of penalty under section 271D justified-- Asst. CIT v. Vardaan Fashion (Delhi) . . . 247

----Penalty--Acceptance of loan or deposit otherwise than by account payee cheque or account payee draft--Scope of section 269SS--No monetary transaction between assessee and creditors--No violation of section 269SS--Order deleting penalty justified-- Asst. CIT v.Vardaan Fashion (Delhi) . . . 247

 


Section 10B ITAT Special Bench Verdict Approved + Imp Verdict On Chapter VI-A Deductions

 

Dear Subscriber,

 

The following important judgements are available for download at itatonline.org.


CIT vs. Hritnik Exports Pvt. Ltd (Delhi High Court)

S. 10B(4): All business profits of the undertaking are eligible for deduction and it is not necessary to show that they have a "direct nexus" with the undertaking

Sub-section (4) of s. 10B does not require an assessee to establish a direct nexus with the business of the undertaking and once an income forms part of the business of the undertaking, the same would be included in the profits of the business of the undertaking. Thus, once an income forms part of the business of the eligible undertaking, there is no further mandate in the provisions of section 10B to exclude the same from the eligible profits


CIT vs. J. B. Boda & Co.P. Ltd (Bombay High Court)

Chapter VI-A deductions are not limited to the business profits but are available to the extent of the Gross Total Income

The only question sought to be canvassed is that out of these deductions the admissible deduction under section 80-O ought to be limited to the extent of Rs.69,70,127 which represents business income. In other words, the income from interest and dividend shall not form part of the gross total income as defined under section 80B(5) of the Act. The submission is misconceived


Regards,

 

Editor,

 

itatonline.org

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Latest:

Budget 2015: Download Finance Bill 2015


Wednesday, March 4, 2015

HOW TO CLAIM REFUND OF LBT. LBT REFUND IF GOODS SOLD OUTSIDE LOCAL LIMITS(OUTSIDE NASHIK)

IN CASE OF GOODS RE-SOLD OUTSIDE NASHIK WITHIN 6 MONTHS (LOCAL LIMITS); THE DEALER / TRADER CAN CLAIM REFUND OF LBT OR EVEN ADJUST AGAINST THE LBT PAYABLE FOR OTHER MONTHS.

HOWEVER, THE DEALER HAS TO KEEP PROPER RECORDS OF MOVEMENTS OF GOODS AND FOLLOW THE PROCEDURE PRESCRIBED UNDER LBT RULES FOR THIS PURPOSE.

FURTHER, IF WHILE DOING THE ACCOUNTING THE SEPARATE LEDGER ARE MAINTAINED FOR LOCAL PURCHASES AND OUTSIDE PURCHASE, LOCAL SALES AND OUTSIDE SALES; THE SAME IS ALSO USEFUL.

MANY DEALERS/TRADERS ARE NOT AWARE ABOUT THIS PROVISION.

THERE WERE NO SUCH PROVISION UNDER OCTROI.

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

Income Tax Slabs & Rates FOR FY 2015-16

Budget 2015 & Income Tax
Slabs & Rates for
AY 2016-17 ( FY 2015-16 )
AY 2014-15 ( FY 2013-14 )

Income Tax Slabs & Rates
for Assessment Year 2015-16


Please click on the links below to view the Income Tax Slabs and Rates for the Assessment Year 2015-16 (applicable on income earned during 01.04.2014 to 31.03.2015) for various categories of Indian Income Tax payers.
Individual resident (Age below 60 Yrs.) or any NRI/ HUF/ AOP/ BOI/ AJPFirm
Senior CitizenLocal Authority
Super Senior CitizenDomestic Company
Co-operative SocietyOther Company

  1. Individual resident aged below 60 years (i.e. born on or after 1st April 1955) or any NRI/ HUF/ AOP/ BOI/ AJP*

    Income Tax :Tax Calculator : AY 2015-16
    Income SlabsTax Rates
    i.Where the taxable income does not exceed Rs. 2,50,000/-.NIL
    ii.Where the taxable income exceeds Rs. 2,50,000/- but does not exceed Rs. 5,00,000/-.10% of amount by which the taxable income exceeds Rs. 2,50,000/-.
    Less ( in case of Resident Individuals only ) : Tax Credit u/s 87A - 10% of taxable income upto a maximum of Rs. 2000/-.
    iii.Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-.Rs. 25,000/- + 20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.
    iv.Where the taxable income exceeds Rs. 10,00,000/-.Rs. 125,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-.
    Surcharge : 10% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)
    Education Cess : 3% of the total of Income Tax and Surcharge.
    Abbreviations used :
       NRI - Non Resident Individual; HUF - Hindu Undivided Family; AOP - Association of Persons; BOI - Body of Individuals; AJP - Artificial Judicial Person

  2. Senior Citizen (Individual resident who is of the age of 60 years or more but below the age of 80 years at any time during the previous year i.e. born on or after 1st April 1934 but before 1st April 1954)

    Income Tax :Tax Calculator : AY 2015-16
    Income SlabsTax Rates
    i.Where the taxable income does not exceed Rs. 3,00,000/-.NIL
    ii.Where the taxable income exceeds Rs. 3,00,000/- but does not exceed Rs. 5,00,000/-10% of the amount by which the taxable income exceeds Rs. 3,00,000/-.
    Less : Tax Credit u/s 87A - 10% of taxable income upto a maximum of Rs. 2000/-.
    iii.Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-Rs. 20,000/- + 20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.
    iv.Where the taxable income exceeds Rs. 10,00,000/-Rs. 120,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-.
    Surcharge : 10% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)
    Education Cess : 3% of the total of Income Tax and Surcharge.

  3. Super Senior Citizen (Individual resident who is of the age of 80 years or more at any time during the previous year i.e. born before 1st April 1934)

    Income Tax :Tax Calculator : AY 2015-16
    Income SlabsTax Rates
    i.Where the taxable income does not exceed Rs. 5,00,000/-.NIL
    ii.Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.
    iii.Where the taxable income exceeds Rs. 10,00,000/-Rs. 100,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-.
    Surcharge : 10% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)
    Education Cess : 3% of the total of Income Tax and Surcharge.

  4. Co-operative Society

    Income Tax :Tax Calculator : AY 2015-16
    Income SlabsTax Rates
    i.Where the taxable income does not exceed Rs. 10,000/-.10% of the income.
    ii.Where the taxable income exceeds Rs. 10,000/- but does not exceed Rs. 20,000/-.Rs. 1,000/- + 20% of income in excess of Rs. 10,000/-.
    iii.Where the taxable income exceeds Rs. 20,000/-Rs. 3.000/- + 30% of the amount by which the taxable income exceeds Rs. 20,000/-.
    Surcharge : 10% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)
    Education Cess : 3% of the total of Income Tax and Surcharge.

  5. Firm

    Tax Calculator : AY 2015-16
    Income Tax : 30% of taxable income.
    Surcharge : 10% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)
    Education Cess : 3% of the total of Income Tax and Surcharge.

  6. Local Authority

    Income Tax : 30% of taxable income.
    Surcharge : 10% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)
    Education Cess : 3% of the total of Income Tax and Surcharge.

  7. Domestic Company

    Tax Calculator : AY 2015-16
    Income Tax : 30% of taxable income.
    Surcharge : The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge
    • At the rate of 5% of such income tax, provided that the taxable income exceeds Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)
    • At the rate of 10% of such income tax, provided that the taxable income exceeds Rs. 10 crores.
    Education Cess : 3% of the total of Income Tax and Surcharge.

  8. Company other than a Domestic Company

    Income Tax :Tax Calculator : AY 2015-16
    • @ 50% of on so much of the taxable income as consist of (a) royalties received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March, 1961 but before the 1st day of April, 1976; or (b) fees for rendering technical services received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 29th day of February, 1964 but before the 1st day of April, 1976, and where such agreement has, in either case, been approved by the Central Government.
    • @ 40% of the balance
    Surcharge :
    The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge as under
    • At the rate of 2% of such income tax, provided that the taxable income exceeds Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)
    • At the rate of 5% of such income tax, provided that the taxable income exceeds Rs. 10 crores.


    Education Cess : 3% of the total of Income Tax and Surcharge.

Marginal Relief in Surcharge

When an assessee's taxable income exceeds Rs. 1 crore, he is liable to pay Surcharge at prescribed rates mentioned above on Income Tax payable by him. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of Rs. 1 crore by more than the amount of increase in taxable income.
Example :
In case of an individual assesseee (< 60 years) having taxable income of Rs. 1,00,01,000/-
1.Income TaxRs. 28,30,300
2.Surcharge @10% of Income TaxRs. 2,83,030
3.Income Tax on income of Rs. 1 croreRs. 28,30,000
4.Maximum Surcharge payable
(Income over Rs. 1 crore less income tax on income over Rs. 1 crore)
Rs. 700/- (1000 - 300)
5.Income Tax + Surcharge payableRs. 28,31,000
6.Marginal Relief in SurchargeRs. 2,82,330/- (2,83,030 - 700)

Disclaimer :

All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.
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

FIRST CUT HIGHLIGHTS OF BUDGET 201

First cut Highlights of Budget 2014                                                

28/02/2015

 

·       Mudra Bank (with 20000 crore capital) to finance Micro Financing activity for priority to entrepreneurs in SC & ST category in SME sector.

·        Bringing fresh Bankruptcy code in this fiscal year.

·       To utilise vast Postal network for Banking venture.

·       Creating universal securities system for poor and unprivileged. PMs Insurance Scheme Accident death insurance Rs. 2 Lacs for Rs. 12 per year for poor.

·       Atal Pension Fund  aimed at Indians above 60 years.

·       PMs Jeevan Bima – Rs. 2 Lacs – premium Rs. 330 per year.

·       Sr. Citizen Welfare Fund via unclaimed PPFs – living below Poverty Line.

·       Poor Sr. Citizen shall get free medical equipments

·       Visa on arrival scheme to be increased to 150 nations.

·       NBFCs above Rs. 500 cr to be covered under SARFAESI.

·       Tax free Infra bonds in Rail, Road and Infrastructure to be issued.

·       FMC to be merged with SEBI to strengthen regulation.

·       Amendment in RBI Act in this Fiscal w.r.t. monetary policy.

·       To amend section 6 of FEMA for capital account transactions.

·       Alternate Investment Funds – for facilitating domestic investment- to allow foreign investment in AIF. To do away with distinction between FPI &  FDI.

·       EPF contribution to be voluntary.

·       Gold monetisation scheme to allow depositors earn interest.

·       PSU bank Broad Bureau to be set up this year.

Taxation

·       GST to be implemented from 1st April, 2016

·       Rate of Corporate tax to be at 25% over next four years from present 30%, with phased removal of exemptions from next financial year.

·       Comprehensive new law to track black money, which is stashed in foreign countries.

·       Undisclosed foreign assets / income shall be looked up very rigorously and shall be prosecuted.

·       More comprehensive law for prosecuting domestic Black Money.

·       FEMA will be rejigged to include black money provisions.

·       PAN is compulsory for sale above Rs. 1 Lakh for immovable property. Cash not allowed over Rs. 20,000/-.

·       GAAR applicability deferred for next 2 year.

·       To facilitate technology – tax on royalty reduced from 25% to 10%.

·       Indirect taxes – Basic Custom Duty – fully exempt on RM for IT bound manufacturing.

·       Wealth Tax – to be abolished and it is replaced with 2 % surcharge on Income tax payer having income over Rs. 1 crore.

·       Domestic threshold limit increased from 5 crores to 20 crores.

·       Increase in limit of deduction of Health Insurance u/s 80D from Rs. 15000 to Rs. 25000.

·       Sr. Citizen additional deduction u/s 80D from 10k to 30k.

·       For Sr. Citizens above 80 years and not covered by health insurance – deduction of Rs.30,000 on their medical treatment every year.

·       For Sr. Citizen limit of Rs. 60000 with respect to specified decease of serious nature enhanced to Rs. 80000.

·       Additional deduction for differently abled of Rs. 25,000/- under 80DD & 80 U.

·       Additional deduction u/s 80CCD of Rs. 50,000/- for contribution to the new pension fund.

·       Transport allowance exemption increased to Rs. 1600 per month from 800 per month.

·       Individual tax benefits up to Rs.  4,44,000/-.

·       Tax relief for Yoga institutions (covered under Charitable Purpose).

·       Deduction on contribution to pension fund and the new pension scheme increased from Rs 1 lakh to Rs 1.5 lakh

·       Service tax not chargeable for Yoga classes.

·       Service tax rate set to 14%

·       Deduction of 100% under 80G for donations under Swachha Bharat Abhiyaan & Ganga Cleaning Project.

·       No Direct Tax Code.

·       Central Excise and Service Tax registration to be in done in 2 days.

·       In case of offshore fund management, mere presence of the fund manager in India will not be treated as his permanent establishment in India.



Monday, February 23, 2015

ITR Volume 371 : Part 2 (Issue dated : 23-2-2015)

From: CA RAJU SHAH shahmars@hotmail.com [NEXTGEN-CA] <NEXTGEN-CA-noreply@yahoogroups.com>


 

 

 

 

 

 

 

 

 


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

ONLINE EDITION

SUBJECT INDEX TO CASES REPORTED

HIGH COURTS

Deduction of tax at source --Non-payment of tax deducted at source--Assessing Officer has power to declare person “assessee in default†--Income-tax Act, 1961, ss. 200, 200A, 201-- CIT v. Kingfisher Airlines Ltd. (Karn) . . . 106

----Principles of natural justice--Non-payment of tax deducted at source--Person admitting liability but claiming inability to pay amount--No evidence of payment submitted to Assessing Officer or Commissioner (Appeals)--No complaint of denial of opportunity to be heard--No violation of principles of natural justice--Order passed under section 201 valid--Income-tax Act, 1961, s. 201-- CIT v. Kingfisher Airlines Ltd. (Karn) . . . 106

Reassessment --Notice--Housing project--Special deduction--Claim of assessee examined at length--Assessing Officer disallowing substantial portion of claim--Reopening on ground yet another element of claim not gone into--Impermissible--Income-tax Act, 1961, ss. 147, 148--Sarla Rajkumar Varma v. Asst. CIT (Guj) . . . 95

Unexplained expenditure --Trading in by-products of rice--Onus on assessee to produce material to establish purchase transactions--No material to substantiate payments made by cheque--Goods said to have been transported by a non-existent entity--Addition on account of purchases justified--Income-tax Act, 1961-- Rajesh Kumar v. CIT (P&H) . . . 87

PRINT EDITION

ITR Volume 371 : Part 2 (Issue dated : 23-2-2015)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Accounting --Rejection of accounts--Finding that there was no evidence that accounts were not reliable--Rejection of accounts not justified--Income-tax Act, 1961-- CIT v. Nuchem Ltd.(P&H) . . . 164

Amortisation of preliminary expenses --Expenditure on raising share capital--One-tenth of expenditure in assessment years 1994-95 to 1999-2000--Income-tax Act, 1961, s. 35D(2)(c)(iv)-- CIT v. Nuchem Ltd. (P&H) . . . 164

Appeal to Commissioner (Appeals) --Competency of appeal--Appeal maintainable only by aggrieved person--Assessee consenting to assessment--Subsequent penalty cancelled--Assessee was not an aggrieved person--Assessee not competent to appeal--Income-tax Act, 1961, s. 246A-- Deep Kukreti v. CIT (Uttarakhand) . . . 257

Appeal to High Court --Monetary ceiling limits--Exception--Revenue audit objection--No document to support--Tribunal finding appeal not maintainable on ground tax effect much less than prescribed limit--Justified--CBDT Instruction No. 3 of 2011, dated 9-2-2011--Income-tax Act, 1961, s. 268A-- CIT v. Shri Shanthinath Benefit Fund Ltd. (Mad) . . . 271

Business expenditure --Commercial expediency--Royalty payments to foreign principals--Deductible--Income-tax Act, 1961, s. 37(1)-- CIT v. Yum Restaurants India P. Ltd. (Delhi) . . . 139

----Deduction only on actual payment--Contributions to provident fund and employees’ State insurance--Provision that contribution should be paid before due date for filing return applicable to contribution by employees also--Income-tax Act, 1961, s. 43B-- CIT v. Magus Customers Dialog Pvt. Ltd. (Karn) . . . 242

----Delay in deposit of employees’ contribution to PF and ESI--Finding that there was no delay--Disallowance not justified--Income-tax Act, 1961, s. 36(1)(va)-- CIT v. Nuchem Ltd.(P&H) . . . 164

----Firm doing import and export--Foreign travel expenses of persons including a lady--Lady one of the founder partners travelling in that capacity with others--Expenditure incurred wholly and exclusively for the purpose of the business--Allowable deduction--Income-tax Act, 1961, s. 37-- CIT v. Irbaz Shoe Co. (Mad) . . . 215

----Guarantee commission--Deductible--Expenditure on maintenance of accommodation of employees--Deductible--Expenditure on inauguration of new centre--Deductible--Amount paid for market survey--Deductible--Income-tax Act, 1961, s. 37(2A), (3)-- CIT v. Nuchem Ltd.(P&H) . . . 164

----Mercantile system of accounting--Provision made based on past experience--Concurrent finding method not objectionable--Not a contingent liability--Provision allowable--Income-tax Act, 1961, s. 37-- CIT v. Yum Restaurants India P. Ltd. (Delhi) . . . 139

----Subsidiary company of assessee--Administrative expenses--Final effect is revenue-neutral--No allocation or apportionment of expenses could be made--Income-tax Act, 1961, s. 37(1)-- CIT v. Yum Restaurants India P. Ltd. (Delhi) . . . 139

Business income --Income from other sources--Assessee entering into franchise agreements with various entities to operate pizza and chicken restaurants--Services provided by assessee constituting a systematic organised activity conducted with a special purpose--Income therefrom is business income--Income-tax Act, 1961-- CIT v. Yum Restaurants India P. Ltd. (Delhi) . . . 139

Capital gains --Difference between short-term and long-term capital gains--Land held on lease for more than three years--Conversion into freehold and transfer thereafter--Gains assessable as long-term capital gains--Income-tax Act, 1961, s. 45-- Amar Nath Agrawal v.CIT (All) . . . 183

Capital or revenue expenditure --Restaurant business--Developing new recipes to develop clientele--Expenses for food tasting and trials--Revenue expenditure--Income-tax Act, 1961--CIT v. Yum Restaurants India P. Ltd. (Delhi) . . . 139

Charitable purposes --Charitable trust--Registration of trust--Cancellation of registration--Finding that trust was running several educational institutions and had not violated any of the conditions for claiming exemption--Assessee entitled to registration--Income-tax Act, 1961, ss. 11, 12, 12A-- CIT v. Karnataka Lingayat Education Society (Karn) . . . 249

Depreciation --Assessee purchasing assets for its employees’ benefit--Assessee as part of its emolument policy reimbursing expenses incurred by employees--Reimbursement only to extent of employees’ entitlement--Individual identity of asset lost in block--Expenses not personal to assessee’s employees--Entitled to depreciation--Income-tax Act, 1961-- CIT v. Yum Restaurants India P. Ltd. (Delhi) . . . 139

----Rate of depreciation--Broadcasting/exhibition rights and satellite rights in feature films amount to distribution rights--Assessee entitled to 100 per cent. depreciation--Income-tax Act, 1961, s. 32--Income-tax Rules, 1962, r. 9B-- CIT v. Smt. Achila Sabharwal (Delhi) . . . 219

Estimation of income --Application of net profit rate--Tribunal upholding exercise undertaken by Assessing Officer and Commissioner (Appeals) and rejecting assessee’s complaint--Tribunal after referring to comparable cases applying net profit at 8 per cent.--Pure finding of fact--Income-tax Act, 1961-- CIT v. Ratansingh M. Rathod (Bom) . . . 135

Industrial undertaking --Special deduction--Computation--Depreciation allowance and development rebate for past assessment years fully set off against total income for those assessment years--Not to be notionally carried forward and set off against income of current year--Income-tax Act, 1961, s. 80-I-- Carborundum Universal Ltd. v. Joint CIT (Mad) . . . 275

Penalty --Concealment of income--No satisfactory explanation as regards failure by assessee to disclose in original return gifts from non-resident Indians--Disclosure in revised return only after survey operation in business premises--Genuineness of gifts not proved--Levy of penalty justified--Income-tax Act, 1961, s. 271(1), Expln. 1(B) -- R. Padmanabhan v.Deputy CIT (Mad) . . . 211

Reassessment --Notice--Limitation--Notice after four years but before six years--Condition precedent--Satisfaction of Assessing Officer that income escaping assessment was likely to exceed one lakh rupees--No recording of such satisfaction--Notice barred by limitation--Income-tax Act, 1961, ss. 148, 149-- Amar Nath Agrawal v. CIT (All) . . . 183

----Notice--Validity--Notice based on audit objection--Notice not valid--Income-tax Act, 1961, ss. 147, 148-- Raajratna Metal Industries Ltd. v. Asst. CIT (Guj) . . . 222

----Notice--Validity--Notice for assessment year 2008-09 on ground that deduction under section 10A was found to be excessive in similar circumstances for assessment year 2009-10--Tribunal holding that deduction was not excessive--Notice not valid--Income-tax Act, 1961, ss. 147, 148-- A. T. Kearney India Ltd. v. ITO (Delhi) . . . 179

----Notice after four years--Validity--Failure to disclose material facts necessary for assessment--Gains shown in returns as long-term capital gains and details regarding transfer of capital asset given--Notice after four years to treat gains as short-term capital gains--Not valid--Income-tax Act, 1961, ss. 147, 148-- Amar Nath Agrawal v. CIT (All) . . . 183

----Notice within four years--Power to reassess not a power to review--Industrial undertaking--Special deduction--Allocation of expenditure between assessees’ three manufacturing units--Assessing Officer raising queries and accepting reply--Due application of mind by Assessing Officer to facts involved and opinion formed to allow claim--Reassessment with respect to allocation of expenditure--Change of opinion--No reason to believe that income chargeable to tax has escaped assessment--Reassessment not valid--Income-tax Act, 1961, ss. 80-IA, 80-IB, 147, 148-- GKN Sinter Metals Ltd. v. Ms. Ramapriya Raghavan, Asst. CIT (Bom) . . . 225

Recovery of tax --Stay of recovery proceedings--Prima facie case against order of assessment--Finding that recovery of amount demanded would cause irreparable injury to assessee--Conditional stay granted--Income-tax Act, 1961-- Nerka Chemicals P. Ltd. v.Union of India (Bom) . . . 280

Remuneration from foreign enterprise --Special deduction--Conditions precedent--Assessee conducting services for benefit of foreign companies--Services rendered “from India†and “in India†--Distinction--Report of survey submitted by assessee not utilised within India though received by foreign agency in India--Mere submission of report within India does not take assessee out of purview of benefit--Income-tax Act, 1961, s. 80-O-- CIT v. Peters and Prasad Association (T & AP) . . . 206

Search and seizure --Block assessment--Assessment of third person--Undisclosed income--Assessing Officer satisfied that undisclosed income discovered during search belonged to third person--Notice under section 158BD to such third person--Valid--Income-tax Act, 1961, ss. 158BC, 158BD-- Gyanendra Kumar Jain v. Asst. CIT (All) . . . 244

----Block assessment--Undisclosed income--Deletion of non-genuine gifts on ground amount already included--Benefit given to certain amount as past savings--Allowing certain value of jewellery as stridhan of assessee’s wife--Deletion of addition for unexplained jewellery on ground jewellery belonged to some one else--Pure findings of fact--Income-tax Act, 1961-- CIT v. Naresh Kumar Kohli (P&H) . . . 201

----Block assessment--Undisclosed income--Statement of managing partner of assessee recorded one-and-half months after search--Cannot be brought under purview of section 132(4)--Block assessment solely on basis of discrepancy between two registers referable to Central Excise Act--Registers can be taken into account for income-tax purposes only after ascertaining facts and conclusions from officials of Excise Department--Neither Assessing Officer nor Commissioner (Appeals) recording any finding that assessee suppressed sale of steel referable to discrepancy--Block assessment just on basis of surmises--Block assessment not valid--Income-tax Act, 1961, ss. 132(4), 158BC-- CIT v.Balaji Steel Profiles (T & AP) . . . 265

Shipping business --Tonnage tax company--Tonnage tax scheme--Tonnage income--Non qualifying ships--Computation--Income from slot charter operations--Includible--Income-tax Act, 1961, ss. 115VB, 115VC, 115VD-- Trans Asian Shipping Services P. Ltd. v. CIT (Ker) . . . 194

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961 :

S. 11 --Charitable purposes--Charitable trust--Registration of trust--Cancellation of registration--Finding that trust was running several educational institutions and had not violated any of the conditions for claiming exemption--Assessee entitled to registration-- CITv. Karnataka Lingayat Education Society (Karn) . . . 249

S. 12 --Charitable purposes--Charitable trust--Registration of trust--Cancellation of registration--Finding that trust was running several educational institutions and had not violated any of the conditions for claiming exemption--Assessee entitled to registration-- CITv. Karnataka Lingayat Education Society (Karn) . . . 249

S. 12A --Charitable purposes--Charitable trust--Registration of trust--Cancellation of registration--Finding that trust was running several educational institutions and had not violated any of the conditions for claiming exemption--Assessee entitled to registration-- CITv. Karnataka Lingayat Education Society (Karn) . . . 249

S. 32 --Depreciation--Rate of depreciation--Broadcasting/exhibition rights and satellite rights in feature films amount to distribution rights--Assessee entitled to 100 per cent. depreciation--CIT v. Smt. Achila Sabharwal (Delhi) . . . 219

S. 35D(2)(c)(iv) --Amortisation of preliminary expenses--Expenditure on raising share capital--One-tenth of expenditure in assessment years 1994-95 to 1999-2000-- CIT v.Nuchem Ltd. (P&H) . . . 164

S. 36(1)(va) --Business expenditure--Delay in deposit of employees’ contribution to PF and ESI--Finding that there was no delay--Disallowance not justified-- CIT v. Nuchem Ltd.(P&H) . . . 164

S. 37 --Business expenditure--Firm doing import and export--Foreign travel expenses of persons including a lady--Lady one of the founder partners travelling in that capacity with others--Expenditure incurred wholly and exclusively for the purpose of the business--Allowable deduction-- CIT v. Irbaz Shoe Co. (Mad) . . . 215

----Business expenditure--Mercantile system of accounting--Provision made based on past experience--Concurrent finding method not objectionable--Not a contingent liability--Provision allowable-- CIT v. Yum Restaurants India P. Ltd. (Delhi) . . . 139

S. 37(1) --Business expenditure--Commercial expediency--Royalty payments to foreign principals--Deductible-- CIT v. Yum Restaurants India P. Ltd. (Delhi) . . . 139

----Business expenditure--Subsidiary company of assessee--Administrative expenses--Final effect is revenue-neutral--No allocation or apportionment of expenses could be made-- CITv. Yum Restaurants India P. Ltd. (Delhi) . . . 139

S. 37(2A), (3) --Business expenditure--Guarantee commission--Deductible--Expenditure on maintenance of accommodation of employees--Deductible--Expenditure on inauguration of new centre--Deductible--Amount paid for market survey--Deductible-- CIT v. Nuchem Ltd.(P&H) . . . 164

S. 43B --Business expenditure--Deduction only on actual payment--Contributions to provident fund and employees’ State insurance--Provision that contribution should be paid before due date for filing return applicable to contribution by employees also-- CIT v. Magus Customers Dialog Pvt. Ltd. (Karn) . . . 242

S. 45 --Capital gains--Difference between short-term and long-term capital gains--Land held on lease for more than three years--Conversion into freehold and transfer thereafter--Gains assessable as long-term capital gains-- Amar Nath Agrawal v. CIT (All) . . . 183

S. 80-I --Industrial undertaking--Special deduction--Computation--Depreciation allowance and development rebate for past assessment years fully set off against total income for those assessment years--Not to be notionally carried forward and set off against income of current year-- Carborundum Universal Ltd. v. Joint CIT (Mad) . . . 275

S. 80-IA --Reassessment--Notice within four years--Power to reassess not a power to review--Industrial undertaking--Special deduction--Allocation of expenditure between assessees’ three manufacturing units--Assessing Officer raising queries and accepting reply--Due application of mind by Assessing Officer to facts involved and opinion formed to allow claim--Reassessment with respect to allocation of expenditure--Change of opinion--No reason to believe that income chargeable to tax has escaped assessment--Reassessment not valid-- GKN Sinter Metals Ltd. v. Ms. Ramapriya Raghavan, Asst. CIT (Bom) . . . 225

S. 80-IB --Reassessment--Notice within four years--Power to reassess not a power to review--Industrial undertaking--Special deduction--Allocation of expenditure between assessees’ three manufacturing units--Assessing Officer raising queries and accepting reply--Due application of mind by Assessing Officer to facts involved and opinion formed to allow claim--Reassessment with respect to allocation of expenditure--Change of opinion--No reason to believe that income chargeable to tax has escaped assessment--Reassessment not valid-- GKN Sinter Metals Ltd. v. Ms. Ramapriya Raghavan, Asst. CIT (Bom) . . . 225

S. 80-O --Remuneration from foreign enterprise--Special deduction--Conditions precedent--Assessee conducting services for benefit of foreign companies--Services rendered “from India†and “in India†--Distinction--Report of survey submitted by assessee not utilised within India though received by foreign agency in India--Mere submission of report within India does not take assessee out of purview of benefit-- CIT v. Peters and Prasad Association (T & AP) . . . 206

S. 115VB --Shipping business--Tonnage tax company--Tonnage tax scheme--Tonnage income--Non qualifying ships--Computation--Income from slot charter operations--Includible--Trans Asian Shipping Services P. Ltd. v. CIT (Ker) . . . 194

S. 115VC --Shipping business--Tonnage tax company--Tonnage tax scheme--Tonnage income--Non qualifying ships--Computation--Income from slot charter operations--Includible--Trans Asian Shipping Services P. Ltd. v. CIT (Ker) . . . 194

S. 115VD --Shipping business--Tonnage tax company--Tonnage tax scheme--Tonnage income--Non qualifying ships--Computation--Income from slot charter operations--Includible--Trans Asian Shipping Services P. Ltd. v. CIT (Ker) . . . 194

S. 132(4) --Search and seizure--Block assessment--Undisclosed income--Statement of managing partner of assessee recorded one-and-half months after search--Cannot be brought under purview of section 132(4)--Block assessment solely on basis of discrepancy between two registers referable to Central Excise Act--Registers can be taken into account for income-tax purposes only after ascertaining facts and conclusions from officials of Excise Department--Neither Assessing Officer nor Commissioner (Appeals) recording any finding that assessee suppressed sale of steel referable to discrepancy--Block assessment just on basis of surmises--Block assessment not valid-- CIT v. Balaji Steel Profiles (T & AP) . . . 265

S. 147 --Reassessment--Notice--Validity--Notice based on audit objection--Notice not valid--Raajratna Metal Industries Ltd. v. Asst. CIT (Guj) . . . 222

----Reassessment--Notice--Validity--Notice for assessment year 2008-09 on ground that deduction under section 10A was found to be excessive in similar circumstances for assessment year 2009-10--Tribunal holding that deduction was not excessive--Notice not valid-- A. T. Kearney India Ltd. v. ITO (Delhi) . . . 179

----Reassessment--Notice after four years--Validity--Failure to disclose material facts necessary for assessment--Gains shown in returns as long-term capital gains and details regarding transfer of capital asset given--Notice after four years to treat gains as short-term capital gains--Not valid-- Amar Nath Agrawal v. CIT (All) . . . 183

----Reassessment--Notice within four years--Power to reassess not a power to review--Industrial undertaking--Special deduction--Allocation of expenditure between assessees’ three manufacturing units--Assessing Officer raising queries and accepting reply--Due application of mind by Assessing Officer to facts involved and opinion formed to allow claim--Reassessment with respect to allocation of expenditure--Change of opinion--No reason to believe that income chargeable to tax has escaped assessment--Reassessment not valid--GKN Sinter Metals Ltd. v. Ms. Ramapriya Raghavan, Asst. CIT (Bom) . . . 225

S. 148 --Reassessment--Notice--Limitation--Notice after four years but before six years--Condition precedent--Satisfaction of Assessing Officer that income escaping assessment was likely to exceed one lakh rupees--No recording of such satisfaction--Notice barred by limitation-- Amar Nath Agrawal v. CIT (All) . . . 183

----Reassessment--Notice--Validity--Notice based on audit objection--Notice not valid--Raajratna Metal Industries Ltd. v. Asst. CIT (Guj) . . . 222

----Reassessment--Notice--Validity--Notice for assessment year 2008-09 on ground that deduction under section 10A was found to be excessive in similar circumstances for assessment year 2009-10--Tribunal holding that deduction was not excessive--Notice not valid-- A. T. Kearney India Ltd. v. ITO (Delhi) . . . 179

----Reassessment--Notice after four years--Validity--Failure to disclose material facts necessary for assessment--Gains shown in returns as long-term capital gains and details regarding transfer of capital asset given--Notice after four years to treat gains as short-term capital gains--Not valid-- Amar Nath Agrawal v. CIT (All) . . . 183

----Reassessment--Notice within four years--Power to reassess not a power to review--Industrial undertaking--Special deduction--Allocation of expenditure between assessees’ three manufacturing units--Assessing Officer raising queries and accepting reply--Due application of mind by Assessing Officer to facts involved and opinion formed to allow claim--Reassessment with respect to allocation of expenditure--Change of opinion--No reason to believe that income chargeable to tax has escaped assessment--Reassessment not valid--GKN Sinter Metals Ltd. v. Ms. Ramapriya Raghavan, Asst. CIT (Bom) . . . 225

S. 149 --Reassessment--Notice--Limitation--Notice after four years but before six years--Condition precedent--Satisfaction of Assessing Officer that income escaping assessment was likely to exceed one lakh rupees--No recording of such satisfaction--Notice barred by limitation-- Amar Nath Agrawal v. CIT (All) . . . 183

S. 158BC --Search and seizure--Block assessment--Assessment of third person--Undisclosed income--Assessing Officer satisfied that undisclosed income discovered during search belonged to third person--Notice under section 158BD to such third person--Valid--Gyanendra Kumar Jain v. Asst. CIT (All) . . . 244

----Search and seizure--Block assessment--Undisclosed income--Statement of managing partner of assessee recorded one-and-half months after search--Cannot be brought under purview of section 132(4)--Block assessment solely on basis of discrepancy between two registers referable to Central Excise Act--Registers can be taken into account for income-tax purposes only after ascertaining facts and conclusions from officials of Excise Department--Neither Assessing Officer nor Commissioner (Appeals) recording any finding that assessee suppressed sale of steel referable to discrepancy--Block assessment just on basis of surmises--Block assessment not valid-- CIT v. Balaji Steel Profiles (T & AP) . . . 265

S. 158BD --Search and seizure--Block assessment--Assessment of third person--Undisclosed income--Assessing Officer satisfied that undisclosed income discovered during search belonged to third person--Notice under section 158BD to such third person--Valid--Gyanendra Kumar Jain v. Asst. CIT (All) . . . 244

S. 246A --Appeal to Commissioner (Appeals)--Competency of appeal--Appeal maintainable only by aggrieved person--Assessee consenting to assessment--Subsequent penalty cancelled--Assessee was not an aggrieved person--Assessee not competent to appeal--Deep Kukreti v. CIT (Uttarakhand) . . . 257

S. 268A --Appeal to High Court--Monetary ceiling limits--Exception--Revenue audit objection--No document to support--Tribunal finding appeal not maintainable on ground tax effect much less than prescribed limit--Justified--CBDT Instruction No. 3 of 2011, dated 9-2-2011-- CIT v.Shri Shanthinath Benefit Fund Ltd. (Mad) . . . 271

S. 271(1), Expln. 1(B) --Penalty--Concealment of income--No satisfactory explanation as regards failure by assessee to disclose in original return gifts from non-resident Indians--Disclosure in revised return only after survey operation in business premises--Genuineness of gifts not proved--Levy of penalty justified-- R. Padmanabhan v. Deputy CIT (Mad) . . . 211

Income-tax Rules, 1962 :

R. 9B --Depreciation--Rate of depreciation--Broadcasting/exhibition rights and satellite rights in feature films amount to distribution rights--Assessee entitled to 100 per cent. depreciation--CIT v. Smt. Achila Sabharwal (Delhi) . . . 219

 

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