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Tuesday, May 3, 2016

Pranayama – To avoid high altitude sickness

Pranayama – To avoid high altitude sickness

Pranayama – the correct way to breathe is to inhale through the nose and the stomach has to expand, then exhale through the nose while contracting the muscles of the stomach. Contrary to what most Physical Education teachers or instructors today teach. That's just one of the lessons learnt in a Rig Veda class.

Tips when you are up there at the peak – Breath right, eat well, plan right!

Pranayama is a breathing technique introduced by the sages (ancient time scientist, enlighten soul) for general well-being after mediating for years in the Himalayas.

Pranayama is best to avoid high altitude sickness and other respiratory problems when you are at a higher altitude.

Breath right! Breathing is essential for lengthening life and staying alive. Thin but clean air will change you with positive thoughts and free you from pollution. Also, due to the beauty of the peaks you might go breathless. Anyway, inhale with stomach OUT and exhale with stomach IN! Breath right like a baby.
"Follow the baby not the Mummy!"

High altitude might catch you when you are on top before that get fit before you head up!
Plan yourself well with daily breathing exercise and be physically fit. Breath in with stomach OUT and breath out with stomach IN.
Eating garlic and drinking lots of water will help you further to self- sustain at the peak. Also, to be safe get your group a breathing aid. Oxygen tank for a group will do depending on individuals.

In short,

  • Breath right
  • Plan right
  • Eat well

 

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

F

ITR (TRIB) Volume 47 : Part 5 (Issue dated : 2-5-2016)



 

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

ONLINE EDITION

SUBJECT INDEX TO CASES REPORTED

Business expenditure --Disallowance--Brokerage--Assessee submitting invoice of broking company containing full particulars--Disallowance not permissible on basis of presumptions--Relief granted by Commissioner (Appeals) confirmed--Disallowance sustained by Commissioner (Appeals)--Matter remanded--Income-tax Act, 1961, s. 37-- Fatema Jaffer Ghadiali allias Fatema Yusuf Rajkotwala v. ITO
(Mumbai) . . . 456

----No objection certificate charges for sale of flats--Allowable--Income-tax Act, 1961, s. 48-- Fatema Jaffer Ghadiali allias Fatema Yusuf Rajkotwala v. ITO
(Mumbai) . . . 456

Capital gains --Exemption--Investment of gains in residential property--Discrepancy in date of payment--Matter remanded for verification--Income-tax Act, 1961, s. 54-- Fatema Jaffer Ghadiali allias Fatema Yusuf Rajkotwala v. ITO
(Mumbai) . . . 456

----Long-term capital gains or short-term capital gains--Flat allotted to assessee in 2006--Assessee obtaining right to hold property and period of holding to be reckoned from that date--Holding period of flat sold by assessee more than 36 months--Long-term capital gains--Income-tax Act, 1961-- Fatema Jaffer Ghadiali allias Fatema Yusuf Rajkotwala v. ITO(Mumbai) . . . 456

Depreciation --Purchase of business by assessee as going concern including trade mark--Person in whose name trade mark registered assigning rights to assessee--That assessee not registered owner not material--Assessee entitled to depreciation in respect of trade mark--Income-tax Act, 1961, s. 32-- Trio Elevators Co. (India) Ltd. v. Asst. CIT (Ahd) . . . 435

Export --Exemption--Approval granted by designated officer under Software Technology Park Scheme--Constitutes satisfaction of requirements contemplated under section 10B--Quoting wrong provision of law not reason to deny relief--Assessee entitled to exemption under section 10A too--Income-tax Act, 1961, ss. 10A, 10B-- ITO v. Wizard Enterprises P. Ltd. (Kolkata) . . . 442

Speculation transaction --Speculative loss--Assessee, a diamond exporter--Loss in cancellation of foreign currency forward contracts--Integral or incidental to export activity of assessee--Transactions not speculative--Loss deductible--Income-tax Act, 1961, s. 43(5)--Hiraco India P. Ltd. v. Deputy CIT (Mumbai) . . . 467

 

PRINT EDITION

Volume 47 : Part 5 (Issue dated : 2-5-2016)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Advance tax --Interest--Book profit--Inclusion of amounts in terms of Explanation 1(i) to section 115JB with retrospective effect from 1-4-2001--No interest can be charged by virtue of retrospective amendment under section 115JB--Income-tax Act, 1961, ss. 115JB, 234B--NHPC Ltd. v. Asst. CIT (Delhi) . . . 561

Business expenditure --Disallowance--Foreign bank--Head office expenditure--Offshore remuneration to expatriate employees rendering services in Indian branches of assessee--Assessing Officer to verify whether expenditure included for purposes of section 44C--Income-tax Act, 1961, ss. 37, 44C-- Royal Bank of Scotland N. V. v. Deputy DIT (International Taxation) (Kolkata) . . . 513

----Staff welfare expenses and repair and maintenance expenses--Expenses not incurred for personal benefit--Authorities to consider claim in reasonable and practical manner--Disallowance not proper--Income-tax Act, 1961, s. 37(1)-- Mahendra Kumar Saha v. Asst. CIT (Cuttack) . . . 590

Capital or revenue expenditure --Lease rentals--Right to use assets for which lease rentals paid--Treatment of lease rental in books of account is of no relevance--Deductible--Income-tax Act, 1961-- Royal Bank of Scotland N. V. v. Deputy DIT (International Taxation) (Kolkata) . . . 513

Charitable purpose --Computation of income--Depreciation--Cost of assets allowed earlier as application of income--Assessee not entitled to depreciation on opening balance of written down value of assets--Income-tax Act, 1961, ss. 11, 32-- Sri Ram Samaj v. Joint DIT (Exemptions) (Chennai) . . . 629

----Exemption--Receipts from letting out community hall and marriage hall--For and on behalf of trust and not business held under trust--Not incidental to attainment of objects--Business income--Section 11(4A) applicable--Assessee not entitled to exemption--Income-tax Act, 1961, ss. 2(15), 11, 11(4A), 12AA-- Sri Ram Samaj v. Joint DIT (Exemptions) (Chennai) . . . 629

----Registration--Pre-qualification for claiming exemption--Educational institution--Failure by authorities to show objects of trust not charitable or not genuine--Assessee establishing that it was created for charitable purposes including educational activity and using its funds for purpose of educational activities--Eligible for registration--Income-tax Act, 1961, s. 12A--Shree Balaji Educational Trust v. CIT
(Delhi)
 . . . 595

Deduction of tax at source --Foreign bank--Interest paid to head office and other branches outside India--Jurisdictional High Court in assessee's own case for earlier years holding no tax need to be deducted at source--Bank deducting tax at source for subsequent years and remitting to Exchequer--Bank entitled to refund--Matter remanded--Income-tax Act, 1961, s. 195-- Royal Bank of Scotland N. V. v. Deputy DIT (International Taxation) (Kolkata) . . . 513

Depreciation --Higher rate of depreciation--Automated teller machine--Computerised machines not only allowing customers to withdraw money but check account balance, pay bills, purchase goods and services and linked with main server--Entitled to higher rate of depreciation--Income-tax Act, 1961-- Royal Bank of Scotland N. V. v. Deputy DIT (International Taxation) (Kolkata) . . . 513

Industrial undertaking --Special deduction--Option of choosing initial assessment year wholly upon assessee--Losses can be set off against income of assessee--No notional carry forward up to initial assessment year--Income-tax Act, 1961, s. 80-IA-- Deputy CIT v. Yamuna Power and Infrastructure Ltd.
(Chandigarh) . . . 533

Non-resident --Taxability--Rate of tax--Foreign bank registered as scheduled bank in India having permanent establishment--Taxable under relevant Finance Act--Double Taxation Avoidance Agreement between India and the Netherlands, art. 7--Income-tax Act, 1961--Royal Bank of Scotland N. V. v. Deputy DIT (International Taxation) (Kolkata) . . . 513

Penalty --Search and seizure--Undisclosed income--Disclosure petition--Immunity--Additional income not disclosed in original return--Disclosure petition filed after search substantiating reasons for offering additional income--Assessee entitled to immunity from levy of penalty--Income-tax Act, 1961, ss. 132(4), 271AAA(2)-- Deputy CIT v. Salasar Stock Broking Ltd.(Kolkata) . . . 616

Rectification of mistake --Book profit--Computation of income under section 115JB--Change of law--Provision for deduction of bad and doubtful debts considered and decided by Commissioner (Appeals)--Rectification to be made by Commissioner (Appeals) only--Assessing Officer cannot invoke rectification provisions--Order passed under section 154 invalid--Income-tax Act, 1961, ss. 115JB, 154(1A)-- NHPC Ltd. v. Asst. CIT (Delhi) . . . 561

Revision --Commissioner--Condition precedent--Amalgamation of companies--No provision for communication of factum of amalgamation to Commissioner--Amalgamating company loses its identity and no proceedings can be taken in its earlier name--Initiation of revision proceedings against amalgamating company after date of amalgamation--Not valid--Income-tax Act, 1961, s. 263-- Milestone Tradelinks P. Ltd. v. ITO (Ahd) . . . 606

Search and seizure --Assessment of third person--Undisclosed income--Addition on ground assessee did not have sufficient income--Failure by Department to prove claim of assessee factually incorrect--Addition not sustainable--Income-tax Act, 1961, s. 153C-- Asst. CIT v. Goodview Trading P. Ltd. (Delhi) . . . 555

Transfer pricing --International transactions--Arm's length price--Procedure to be followed by Assessing Officer to pass a draft assessment order is mandatory--No option to Assessing Officer to pass or not to pass draft assessment order--No draft order provided to assessee before passing final order--Order not valid--Income-tax Act, 1961, s. 144C-- Asst. CIT v. Getrag Hi Tech Gears Pvt. Ltd. (Chandigarh) . . . 545

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Double Taxation Avoidance Agreement between India and the Netherlands

Art. 7 --Non-resident--Taxability--Rate of tax--Foreign bank registered as scheduled bank in India having permanent establishment--Taxable under relevant Finance Act-- Royal Bank of Scotland N. V. v. Deputy DIT (International Taxation)
(Kolkata) . . . 513

Income-tax Act, 1961

S. 2(15) --Charitable purpose--Exemption--Receipts from letting out community hall and marriage hall--For and on behalf of trust and not business held under trust--Not incidental to attainment of objects--Business income--Section 11(4A) applicable--Assessee not entitled to exemption-- Sri Ram Samaj v . Joint DIT (Exemptions)
(Chennai) . . . 629

S. 11 --Charitable purpose--Computation of income--Depreciation--Cost of assets allowed earlier as application of income--Assessee not entitled to depreciation on opening balance of written down value of assets-- Sri Ram Samaj v . Joint DIT (Exemptions) (Chennai) . . . 629

----Charitable purpose--Exemption--Receipts from letting out community hall and marriage hall--For and on behalf of trust and not business held under trust--Not incidental to attainment of objects--Business income--Section 11(4A) applicable--Assessee not entitled to exemption--Sri Ram Samaj v . Joint DIT (Exemptions)
(Chennai) . . . 629

S. 11(4A) --Charitable purpose--Exemption--Receipts from letting out community hall and marriage hall--For and on behalf of trust and not business held under trust--Not incidental to attainment of objects--Business income--Section 11(4A) applicable--Assessee not entitled to exemption-- Sri Ram Samaj v . Joint DIT (Exemptions)
(Chennai) . . . 629

S. 12A --Charitable purposes--Registration--Pre-qualification for claiming exemption--Educational institution--Failure by authorities to show objects of trust not charitable or not genuine--Assessee establishing that it was created for charitable purposes including educational activity and using its funds for purpose of educational activities--Eligible for registration-- Shree Balaji Educational Trust v. CIT
(Delhi)
 . . . 595

S. 12AA --Charitable purpose--Exemption--Receipts from letting out community hall and marriage hall--For and on behalf of trust and not business held under trust--Not incidental to attainment of objects--Business income--Section 11(4A) applicable--Assessee not entitled to exemption-- Sri Ram Samaj v . Joint DIT (Exemptions)
(Chennai) . . . 629

S. 32 --Charitable purpose--Computation of income--Depreciation--Cost of assets allowed earlier as application of income--Assessee not entitled to depreciation on opening balance of written down value of assets-- Sri Ram Samaj v . Joint DIT (Exemptions) (Chennai) . . . 629

S. 37 --Business expenditure--Disallowance--Foreign bank--Head office expenditure--Offshore remuneration to expatriate employees rendering services in Indian branches of assessee--Assessing Officer to verify whether expenditure included for purposes of section 44C-- Royal Bank of Scotland N. V. v. Deputy DIT (International Taxation) (Kolkata) . . . 513

S. 37(1) --Business expenditure--Staff welfare expenses and repair and maintenance expenses--Expenses not incurred for personal benefit--Authorities to consider claim in reasonable and practical manner--Disallowance not proper-- Mahendra Kumar Saha v. Asst. CIT (Cuttack) . . . 590

S. 44C --Business expenditure--Disallowance--Foreign bank--Head office expenditure--Offshore remuneration to expatriate employees rendering services in Indian branches of assessee--Assessing Officer to verify whether expenditure included for purposes of section 44C-- Royal Bank of Scotland N. V. v. Deputy DIT (International Taxation) (Kolkata) . . . 513

S. 80-IA --Industrial undertaking--Special deduction--Option of choosing initial assessment year wholly upon assessee--Losses can be set off against income of assessee--No notional carry forward up to initial assessment year-- Deputy CIT v. Yamuna Power and Infrastructure Ltd. (Chandigarh) . . . 533

S. 115JB --Advance tax--Interest--Book profit--Inclusion of amounts in terms of Explanation 1(i) to section 115JB with retrospective effect from 1-4-2001--No interest can be charged by virtue of retrospective amendment under section 115JB-- NHPC Ltd. v. Asst. CIT (Delhi) . . . 561

----Rectification of mistake--Book profit--Computation of income under section 115JB--Change of law--Provision for deduction of bad and doubtful debts considered and decided by Commissioner (Appeals)--Rectification to be made by Commissioner (Appeals) only--Assessing Officer cannot invoke rectification provisions--Order passed under section 154 invalid-- NHPC Ltd. v. Asst. CIT (Delhi) . . . 561

S. 132(4) --Penalty--Search and seizure--Undisclosed income--Disclosure petition--Immunity--Additional income not disclosed in original return--Disclosure petition filed after search substantiating reasons for offering additional income--Assessee entitled to immunity from levy of penalty-- Deputy CIT v. Salasar Stock Broking Ltd. (Kolkata) . . . 616

S. 144C --Transfer pricing--International transactions--Arm's length price--Procedure to be followed by Assessing Officer to pass a draft assessment order is mandatory--No option to Assessing Officer to pass or not to pass draft assessment order--No draft order provided to assessee before passing final order--Order not valid-- Asst. CIT v. Getrag Hi Tech Gears Pvt. Ltd. (Chandigarh) . . . 545

S. 153C --Search and seizure--Assessment of third person--Undisclosed income--Addition on ground assessee did not have sufficient income--Failure by Department to prove claim of assessee factually incorrect--Addition not sustainable-- Asst. CIT v. Goodview Trading P. Ltd. (Delhi) . . . 555

S. 154 --Rectification of mistake--Book profit--Computation of income under section 115JB--Change of law--Provision for deduction of bad and doubtful debts considered and decided by Commissioner (Appeals)--Rectification to be made by Commissioner (Appeals) only--Assessing Officer cannot invoke rectification provisions--Order passed under section 154 invalid-- NHPC Ltd. v. Asst. CIT (Delhi) . . . 561

S. 195 --Deduction of tax at source--Foreign bank--Interest paid to head office and other branches outside India--Jurisdictional High Court in assessee's own case for earlier years holding no tax need to be deducted at source--Bank deducting tax at source for subsequent years and remitting to Exchequer--Bank entitled to refund--Matter remanded-- Royal Bank of Scotland N. V. v. Deputy DIT (International Taxation) (Kolkata) . . . 513

S. 234B --Advance tax--Interest--Book profit--Inclusion of amounts in terms of Explanation 1(i) to section 115JB with retrospective effect from 1-4-2001--No interest can be charged by virtue of retrospective amendment under section 115JB-- NHPC Ltd. v. Asst. CIT (Delhi) . . . 561

S. 263 --Revision--Commissioner--Condition precedent--Amalgamation of companies--No provision for communication of factum of amalgamation to Commissioner--Amalgamating company loses its identity and no proceedings can be taken in its earlier name--Initiation of revision proceedings against amalgamating company after date of amalgamation--Not valid--Milestone Tradelinks P. Ltd. v. ITO (Ahd) . . . 606

S. 271AAA(2) --Penalty--Search and seizure--Undisclosed income--Disclosure petition--Immunity--Additional income not disclosed in original return--Disclosure petition filed after search substantiating reasons for offering additional income--Assessee entitled to immunity from levy of penalty-- Deputy CIT v. Salasar Stock Broking Ltd. (Kolkata) . . . 616

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ITR Volume 383 : Part 2 (Issue dated : 2-5-2016)



 

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

ONLINE EDITION

SUBJECT INDEX TO CASES REPORTED

HIGH COURTS

Capital gains --Liability to tax--Gains on transfer of trade mark--Effect of amendment of section 55(2) w. e. f. 1-4-2002--Amendment not retrospective--Gains on transfer of trade mark in accounting year relevant to assessment year 1996-97--Not liable to tax under section 45--Income-tax Act, 1961, ss. 45, 55-- CIT v. Associated Electronics and Electrical Industries (Bangalore) Pvt. Ltd. (Karn) . . . 471

----Liability to tax--Transfer of goodwill--Difference between trade mark and goodwill--Transfer of trade mark--Business continued--Agreement showing that transfer of trade mark was not accompanied by transfer of goodwill--Gains in accounting year relevant to assessment year 1996-97--Not liable to tax under section 45--Income-tax Act, 1961, s. 45--CIT v. Associated Electronics and Electrical Industries (Bangalore) Pvt. Ltd. (Karn) . . . 471

Cash credits --Cash deposits in bank--No explanation called for by Assessing Officer--Finding that balance in bank account matches with balance-sheet and cash book--No addition permissible--Income-tax Act, 1961, s. 68-- CIT v. Wellworth Construction Udyog Ltd. (Delhi) . . . 464

----Share application money--Applicants genuine business concerns with good turnovers--Finding of Commissioner (Appeals) that identity and creditworthiness of share applicants proved--No adverse comments in remand report--Reasonable inference drawn by Commissioner (Appeals) and Tribunal that addition unsustainable--No question of law arose--Income-tax Act, 1961, s. 68-- CIT v. Wellworth Construction Udyog Ltd. (Delhi) . . . 464

Income --Assessability--Co-operative society manufacturing and selling salt--Sale proceeds transferred to “distributable pool account†--Amount transferred not deductible--Co-operative society assessable on profits from business--Income-tax Act, 1961-- CIT v.Nagarbail Salt-owners Co-operative Society Limited (Karn) . . . 482

Interpretation of taxing statutes --Strict interpretation-- CIT v. Nagarbail Salt-owners Co-operative Society Limited (Karn) . . . 482

 

PRINT EDITION

ITR Volume 383 : Part 2 (Issue dated : 2-5-2016)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

SUPREME COURT

Export --Special deduction--Computation of profits--Ninety per cent. of net interest included in profits, and not of gross interest to be deducted--Income-tax Act, 1961, s. 80HHC, Expln. (baa) -- Liberty Footwear Co. v. CIT . . . 195

Industrial undertaking --Special deduction--Profits derived from business--Test--Direct nexus between profits and business--Immediate source of profits not relevant--Transport, interest and power subsidies given by Government--Go to reimbursement of cost in production of goods--Form part of profits of business--Do not fall under “Income from other sources†--Income-tax Act, 1961, ss. 28(iii)(b), 56, 80-IB, 80-IC-- CIT v. Meghalaya Steels Ltd. . . . 217

Interest-tax --Charge of tax--Chargeable interest--Definition--Interest payable “on loans and advances made in India†--Interest payable on default in payment of amounts due under discounted bill of exchange--Not interest payable on loan or advance--Not chargeable interest--Interest-tax Act, 1974, s. 2(7)-- State Bank of Patiala v. CIT . . . 244

Interpretation of taxing statutes --Aids to construction--Budget speech of Finance Minister--CIT v. Meghalaya Steels Ltd. . . . 217

Taxation --Only by clear statutory provision-- State Bank of Patiala v. CIT . . . 244

HIGH COURTS

Appeal to High Court --Competency of appeal--Decision of Tribunal following earlier decision--No appeal from earlier decision--No affidavit explaining reasons for appeal--Appeal not competent--Income-tax act, 1961, s. 260A-- CIT v. Gujarat Reclaim and Rubber Products Ltd. (Bom) . . . 236

----Substantial question of law--Question not raised before Tribunal--Cannot be raised before court--Income-tax Act, 1961, s. 260A-- CIT v. Air India Ltd. (Bom) . . . 284

Appellate Tribunal --Procedure--Application to Tribunal for recall of order--Limitation--Assessee, a public sector undertaking--Dismissal of Department’s appeal by Tribunal for failure to obtain approval of Committee on Disputes--Not an order rejecting memorandum of appeal under rule 12 of Income-tax (Appellate Tribunal) Rules, 1963 but an order under section 254(1)--Supreme Court decision later doing away with requirement of approval of Committee on Disputes--Application thereafter by Department for recall of order after five years--Limitation for applications under section 254(2) applicable--Refusal by Tribunal to recall order on ground application beyond limitation proper--Income-tax Act, 1961, s. 254(2)--Income-tax (Appellate Tribunal) Rules, 1963, rr. 7, 12-- CIT v. Air India Ltd. (Bom) . . . 284

Business expenditure --Disallowance--Failure to deduct tax at source--Non-resident--Payment of commission to non-resident agent--Commission not income deemed to accrue or arise in India--Tax need not be deducted at source from such commission--Income-tax Act, 1961, s. 40(a)(i)-- CIT v. Gujarat Reclaim and Rubber Products Ltd. (Bom) . . . 236

Capital gains --Transfer--Conversion of firm to private limited company with same partners having same shareholding in company as in firm--Revaluation and transfer of capital assets from firm to company--No dissolution of partnership--No consideration accrued or received on transfer of assets--Transaction not transfer giving rise to capital gains--Income-tax Act, 1961, ss. 45(1), (4), 47-- CADD Centre v. Asst. CIT (Mad) . . . 258

Capital or revenue expenditure --Expenditure incurred on renovation of leased office premises--Tribunal bifurcating expenditure as renovation of building and renovation which brought into existence new item of enduring nature-- Failure by Department to show change in rate of taxation after lapse of thirteen years--Even if substantial amount capitalised, entire amount would have been allowed as deduction on account of depreciation and case would be revenue neutral--Bifurcation of renovation expenses by 70 per cent. as revenue and 30 per cent as capital justified--Income-tax Act, 1961, s. 32(1), Expln. 1 -- CIT v. Glaxo Smithkline Consumer Health Care Ltd. (P&H) . . . 290

Charitable purpose --Test--Premises let for running educational institutions--Auditorium let out to outsiders for commercial purpose--Incidental to principal object of promotion of educational activities--Will not fall in category of “advancement of any other object of general public utility†in section 2(15)--Cancellation of registration not justified--Income-tax Act, 1961, ss. 2(15), 12A-- DIT (Exemptions) v. Lala Lajpatrai Memorial Trust (Bom) . . . 345

Depreciation --Charitable purpose--Amount spent on purchase of capital assets claimed exempt as application of income to objects--Depreciation allowable on such capital assets--Income-tax Act, 1961, ss. 11, 32-- CIT v. Jawaharlal Nehru Port Trust (Bom) . . . 339

Exemption --Medical institution--Meaning of “institution†--Private limited company--Can come within purview of “institution†--Eligible for exemption--Income-tax Act, 1961, s. 10(22A)--Companies Act, 1956, s. 25-- CIT v. Apeejay Medical Ltd. (Cal) . . . 297

Interest on borrowed capital --Amount advanced to sister concerns without interest--Finding that assessee had other funds for making advance--Interest deductible--Income-tax Act, 1961, s. 36(1)(iii)-- CIT v. Gujarat Reclaim and Rubber Products Ltd. (Bom) . . . 236

Precedent --Effect of decision of Supreme Court in CIT v.   Toshoku Ltd. [1980] 125 ITR 525 (SC)-- CIT v. Gujarat Reclaim and Rubber Products Ltd. (Bom) . . . 236

Reassessment --Notice after four years--Change of opinion--Assessment order indicating Assessing Officer conducted detailed examination--No reason to believe income escaped assessment--Assessing Officer examining statement of computation of loss and recording satisfactory finding--No material indicating accounts, vouchers or details provided by assessee inaccurate or false--Notice for reopening assessment on account of change of opinion liable to be quashed--Income-tax Act, 1961, ss. 147, 148-- BBC Worldwide Ltd. v.Asst. DIT (International Taxation) (Delhi) . . . 197

Refund --Deduction of tax at source--Exemption--Interest on foreign loan--Loan agreement providing for payment of penal interest as condition for condoning breach of terms--Deduction of tax at source on payments of penal interest--Payment of penal interest not for breach of terms of conditions--Penal interest not paid as result of violation of agreement--Payment of penal interest approved by Government and exempt--Assessee entitled to refund of tax erroneously deducted thereon--Income-tax Act, 1961, ss. 2(28A), 10(15)(iv)(c), 195--CEAT Ltd. v. CBDT (Delhi) . . . 300

Search and seizure --Block assessment--Undisclosed income--Sale of flats--No material on basis of which Assessing Officer applied standard rate of Rs. 4,800 per square feet for all floors--Mere fact that print out stated that flats on second and third floors had been sold did not necessarily mean that they were sold at rates indicated therein--Assessee offering plausible explanation for document--Not open to Assessing Officer to draw inference on basis of projection of sale of flats in document--Burden of proof on Department to show how rate at which flats on second and third floors sold higher than that indicated in sales register or sale deeds--Income-tax Act, 1961, ss. 142(1), 158BC--CIT v. Vatika Landbase P. Ltd.(Delhi) . . . 320

----Requisition--Cash and silver seized from car by police--Neither police nor Income-tax Department having any information regarding ownership of cash and silver--Order of requisition of cash and silver not justified--Lower court justified in imposing conditions for requisition--Income-tax Act, 1961, s. 132A-- Deputy DIT (Investigation) v. Nayan Kothari(MP) . . . 276

Words and phrases --“Institution†--Meaning of-- CIT v. Apeejay Medical Ltd. (Cal) . . . 297

Writ --Jurisdiction--Territorial jurisdiction--Communication of order by Deputy Commissioner Mumbai--Central Board of Direct Taxes passing order at Delhi--Part of cause of action arising within jurisdiction of court at Delhi--Objection raised for first time at stage of argument--Objection not sustainable--Constitution of India, art. 226--Income-tax Act, 1961-- CEAT Ltd. v.CBDT (Delhi) . . . 300

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Companies Act, 1956 :

S. 25 --Exemption--Medical institution--Meaning of “institution†--Private limited company--Can come within purview of “institution†--Eligible for exemption-- CIT v. Apeejay Medical Ltd. (Cal) . . . 297

Constitution of India :

Art. 226 --Writ--Jurisdiction--Territorial jurisdiction--Communication of order by Deputy Commissioner Mumbai--Central Board of Direct Taxes passing order at Delhi--Part of cause of action arising within jurisdiction of court at Delhi--Objection raised for first time at stage of argument--Objection not sustainable-- CEAT Ltd. v. CBDT (Delhi) . . . 300

Income-tax Act, 1961 :

S. 2(15) --Charitable purpose--Test--Premises let for running educational institutions--Auditorium let out to outsiders for commercial purpose--Incidental to principal object of promotion of educational activities--Will not fall in category of “advancement of any other object of general public utility†in section 2(15)--Cancellation of registration not justified--DIT (Exemptions) v. Lala Lajpatrai Memorial Trust (Bom) . . . 345

S. 2(28A) --Refund--Deduction of tax at source--Exemption--Interest on foreign loan--Loan agreement providing for payment of penal interest as condition for condoning breach of terms--Deduction of tax at source on payments of penal interest--Payment of penal interest not for breach of terms of conditions--Penal interest not paid as result of violation of agreement--Payment of penal interest approved by Government and exempt--Assessee entitled to refund of tax erroneously deducted thereon-- CEAT Ltd. v. CBDT (Delhi) . . . 300

S. 10(15)(iv)(c) --Refund--Deduction of tax at source--Exemption--Interest on foreign loan--Loan agreement providing for payment of penal interest as condition for condoning breach of terms--Deduction of tax at source on payments of penal interest--Payment of penal interest not for breach of terms of conditions--Penal interest not paid as result of violation of agreement--Payment of penal interest approved by Government and exempt--Assessee entitled to refund of tax erroneously deducted thereon-- CEAT Ltd. v. CBDT (Delhi) . . . 300

S. 10(22A) --Exemption--Medical institution--Meaning of “institution†--Private limited company--Can come within purview of “institution†--Eligible for exemption-- CIT v.Apeejay Medical Ltd. (Cal) . . . 297

S. 11 --Depreciation--Charitable purpose--Amount spent on purchase of capital assets claimed exempt as application of income to objects--Depreciation allowable on such capital assets-- CIT v. Jawaharlal Nehru Port Trust (Bom) . . . 339

S. 12A --Charitable purpose--Test--Premises let for running educational institutions--Auditorium let out to outsiders for commercial purpose--Incidental to principal object of promotion of educational activities--Will not fall in category of “advancement of any other object of general public utility†in section 2(15)--Cancellation of registration not justified--DIT (Exemptions) v. Lala Lajpatrai Memorial Trust (Bom) . . . 345

S. 28(iii)(b) --Industrial undertaking--Special deduction--Profits derived from business--Test--Direct nexus between profits and business--Immediate source of profits not relevant--Transport, interest and power subsidies given by Government--Go to reimbursement of cost in production of goods--Form part of profits of business--Do not fall under “Income from other sources†-- CIT v. Meghalaya Steels Ltd. (SC) . . . 217

S. 32 --Depreciation--Charitable purpose--Amount spent on purchase of capital assets claimed exempt as application of income to objects--Depreciation allowable on such capital assets-- CIT v. Jawaharlal Nehru Port Trust (Bom) . . . 339

S. 32(1), Expln. 1 --Capital or revenue expenditure--Expenditure incurred on renovation of leased office premises--Tribunal bifurcating expenditure as renovation of building and renovation which brought into existence new item of enduring nature-- Failure by Department to show change in rate of taxation after lapse of thirteen years--Even if substantial amount capitalised, entire amount would have been allowed as deduction on account of depreciation and case would be revenue neutral--Bifurcation of renovation expenses by 70 per cent. as revenue and 30 per cent as capital justified-- CIT v. Glaxo Smithkline Consumer Health Care Ltd. (P&H) . . . 290

S. 36(1)(iii) --Interest on borrowed capital--Amount advanced to sister concerns without interest--Finding that assessee had other funds for making advance--Interest deductible--CIT v. Gujarat Reclaim and Rubber Products Ltd. (Bom) . . . 236

S. 40(a)(i) --Business expenditure--Disallowance--Failure to deduct tax at source--Non-resident--Payment of commission to non-resident agent--Commission not income deemed to accrue or arise in India--Tax need not be deducted at source from such commission-- CIT v.Gujarat Reclaim and Rubber Products Ltd. (Bom) . . . 236

S. 45(1), (4) --Capital gains--Transfer--Conversion of firm to private limited company with same partners having same shareholding in company as in firm--Revaluation and transfer of capital assets from firm to company--No dissolution of partnership--No consideration accrued or received on transfer of assets--Transaction not transfer giving rise to capital gains--CADD Centre v. Asst. CIT (Mad) . . . 258

S. 47 --Capital gains--Transfer--Conversion of firm to private limited company with same partners having same shareholding in company as in firm--Revaluation and transfer of capital assets from firm to company--No dissolution of partnership--No consideration accrued or received on transfer of assets--Transaction not transfer giving rise to capital gains-- CADD Centre v. Asst. CIT (Mad) . . . 258

S. 56 --Industrial undertaking--Special deduction--Profits derived from business--Test--Direct nexus between profits and business--Immediate source of profits not relevant--Transport, interest and power subsidies given by Government--Go to reimbursement of cost in production of goods--Form part of profits of business--Do not fall under “Income from other sources†-- CIT v. Meghalaya Steels Ltd. (SC) . . . 217

S. 80HHC, Expln. (baa) --Export--Special deduction--Computation of profits--Ninety per cent. of net interest included in profits, and not of gross interest to be deducted-- Liberty Footwear Co. v. CIT (SC) . . . 195

S. 80-IB --Industrial undertaking--Special deduction--Profits derived from business--Test--Direct nexus between profits and business--Immediate source of profits not relevant--Transport, interest and power subsidies given by Government--Go to reimbursement of cost in production of goods--Form part of profits of business--Do not fall under “Income from other sources†-- CIT v. Meghalaya Steels Ltd. (SC) . . . 217

S. 80-IC --Industrial undertaking--Special deduction--Profits derived from business--Test--Direct nexus between profits and business--Immediate source of profits not relevant--Transport, interest and power subsidies given by Government--Go to reimbursement of cost in production of goods--Form part of profits of business--Do not fall under “Income from other sources†-- CIT v. Meghalaya Steels Ltd. (SC) . . . 217

S. 132A --Search and seizure--Requisition--Cash and silver seized from car by police--Neither police nor Income-tax Department having any information regarding ownership of cash and silver--Order of requisition of cash and silver not justified--Lower court justified in imposing conditions for requisition-- Deputy DIT (Investigation) v. Nayan Kothari (MP) . . . 276

S. 142(1) --Search and seizure--Block assessment--Undisclosed income--Sale of flats--No material on basis of which Assessing Officer applied standard rate of Rs. 4,800 per square feet for all floors--Mere fact that print out stated that flats on second and third floors had been sold did not necessarily mean that they were sold at rates indicated therein--Assessee offering plausible explanation for document--Not open to Assessing Officer to draw inference on basis of projection of sale of flats in document--Burden of proof on Department to show how rate at which flats on second and third floors sold higher than that indicated in sales register or sale deeds--CIT v. Vatika Landbase P. Ltd. (Delhi) . . . 320

S. 147 --Reassessment--Notice after four years--Change of opinion--Assessment order indicating Assessing Officer conducted detailed examination--No reason to believe income escaped assessment--Assessing Officer examining statement of computation of loss and recording satisfactory finding--No material indicating accounts, vouchers or details provided by assessee inaccurate or false--Notice for reopening assessment on account of change of opinion liable to be quashed-- BBC Worldwide Ltd. v. Asst. DIT (International Taxation)(Delhi) . . . 197

S. 148 --Reassessment--Notice after four years--Change of opinion--Assessment order indicating Assessing Officer conducted detailed examination--No reason to believe income escaped assessment--Assessing Officer examining statement of computation of loss and recording satisfactory finding--No material indicating accounts, vouchers or details provided by assessee inaccurate or false--Notice for reopening assessment on account of change of opinion liable to be quashed-- BBC Worldwide Ltd. v. Asst. DIT (International Taxation)(Delhi) . . . 197

S. 158BC --Search and seizure--Block assessment--Undisclosed income--Sale of flats--No material on basis of which Assessing Officer applied standard rate of Rs. 4,800 per square feet for all floors--Mere fact that print out stated that flats on second and third floors had been sold did not necessarily mean that they were sold at rates indicated therein--Assessee offering plausible explanation for document--Not open to Assessing Officer to draw inference on basis of projection of sale of flats in document--Burden of proof on Department to show how rate at which flats on second and third floors sold higher than that indicated in sales register or sale deeds--CIT v. Vatika Landbase P. Ltd. (Delhi) . . . 320

S. 195 --Refund--Deduction of tax at source--Exemption--Interest on foreign loan--Loan agreement providing for payment of penal interest as condition for condoning breach of terms--Deduction of tax at source on payments of penal interest--Payment of penal interest not for breach of terms of conditions--Penal interest not paid as result of violation of agreement--Payment of penal interest approved by Government and exempt--Assessee entitled to refund of tax erroneously deducted thereon-- CEAT Ltd. v. CBDT (Delhi) . . . 300

S. 254(2) --Appellate Tribunal--Procedure--Application to Tribunal for recall of order--Limitation--Assessee, a public sector undertaking--Dismissal of Department’s appeal by Tribunal for failure to obtain approval of Committee on Disputes--Not an order rejecting memorandum of appeal under rule 12 of Income-tax (Appellate Tribunal) Rules, 1963 but an order under section 254(1)--Supreme Court decision later doing away with requirement of approval of Committee on Disputes--Application thereafter by Department for recall of order after five years--Limitation for applications under section 254(2) applicable--Refusal by Tribunal to recall order on ground application beyond limitation proper-- CIT v. Air India Ltd.(Bom) . . . 284

S. 260A --Appeal to High Court--Competency of appeal--Decision of Tribunal following earlier decision--No appeal from earlier decision--No affidavit explaining reasons for appeal--Appeal not competent-- CIT v. Gujarat Reclaim and Rubber Products Ltd. (Bom) . . . 236

----Appeal to High Court--Substantial question of law--Question not raised before Tribunal--Cannot be raised before court-- CIT v. Air India Ltd. (Bom) . . . 284

Interest-tax Act, 1974 :

S. 2(7) --Interest-tax--Charge of tax--Chargeable interest--Definition--Interest payable “on loans and advances made in India†--Interest payable on default in payment of amounts due under discounted bill of exchange--Not interest payable on loan or advance--Not chargeable interest-- State Bank of Patiala v. CIT (SC) . . . 244

Income-tax (Appellate Tribunal) Rules, 1963 :

Rr. 7, 12 --Appellate Tribunal--Procedure--Application to Tribunal for recall of order--Limitation--Assessee, a public sector undertaking--Dismissal of Department’s appeal by Tribunal for failure to obtain approval of Committee on Disputes--Not an order rejecting memorandum of appeal under rule 12 of Income-tax (Appellate Tribunal) Rules, 1963 but an order under section 254(1)--Supreme Court decision later doing away with requirement of approval of Committee on Disputes--Application thereafter by Department for recall of order after five years--Limitation for applications under section 254(2) applicable--Refusal by Tribunal to recall order on ground application beyond limitation proper-- CIT v. Air India Ltd.(Bom) . . . 284

 

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Posted by: CA RAJU SHAH

Monday, April 18, 2016

ITR (TRIB) Volume 47 : Part 1 (Issue dated : 4-4-2016)



 

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

ONLINE EDITION

SUBJECT INDEX TO CASES REPORTED

Appeal to Commissioner (Appeals) --Additional ground--Provision for bad and doubtful debts and advances--Claim to deduction from book profits made for first time--No material to show whether sums added back to book profits in earlier years--Assessing Officer to verify--Income-tax Act, 1961, s. 115JA-- Asst. CIT v. Philips Electronics India Ltd. (Kolkata) . . . 269

Charitable purpose --Exemption--Restoration of registration--Claim of exemption to be decided afresh by Assessing Officer--Matter remanded--Income-tax Act, 1961, ss. 11, 12A--Bombay Chamber of Commerce and Industry v. ITO (Exemption) 
(Mumbai) . . . 260

----Registration of trusts--Cancellation of registration--No change in main object of assessee subsequent to grant of registration--No material to show activities of assessee not genuine or not carried out in accordance with its object--Cancellation of registration not proper--Income-tax Act, 1961, ss. 2(15), 12A, 12AA(3)-- Bombay Chamber of Commerce and Industry v. ITO (Exemption) 
(Mumbai) . . . 260

Company --Book profits--Ascertained liability--Provision for incremental wages based on actual workings and based on minimum liability--Negotiations with labour union would only result in payment of higher wages or result in wages already provided--Ascertained liability--Not includible--Income-tax Act, 1961, s. 115JA-- Asst. CIT v. Philips Electronics India Ltd.(Kolkata) . . . 269

----Book profit--Computation--Retrospective amendment in section 115JA--Provision for doubtful debts and advances--Includible--Income-tax Act, 1961, s. 115JA, Expln-- Asst. CIT v. Philips Electronics India Ltd. 
(Kolkata) . . . 269

----Book profits--Dividend--Disallowance under section 14A not debited into profit and loss account--Artificial disallowance--Not includible--Income-tax Act, 1961, s. 115JA-- Asst. CIT v. Philips Electronics India Ltd. (Kolkata) . . . 269

----Book profits--Provision--Provision for loss on proposed restructuring of business--Not a provision but only amount actually restated in books by bringing value of fixed assets to the extent of its realisable value--Not includible--Income-tax Act, 1961, s. 115JA-- Asst. CIT v. Philips Electronics India Ltd. (Kolkata) . . . 269

Income --Income or capital--Foreign currency transactions--Restatement at end of accounting year on basis of fluctuation in rate of foreign exchange--Gains not taxable if foreign currency transactions undertaken on capital account but taxable if on revenue account--Actual payment not relevant--Assessing Officer to re-do assessment--Matter remanded--Income-tax Act, 1961-- R Systems International Ltd. v. Asst. CIT 
(Delhi) . . . 289

Reassessment --Notice--Assessing Officer--Powers--No power to make addition other than on grounds stated in reasons recorded--Income-tax Act, 1961, ss. 147, 148-- Gennex Cresa Partners Consultants Pvt. Ltd. v. ITO (Mumbai) . . . 294

----Notice--Subjective satisfaction of Assessing Officer on basis of relevant material sufficient--Conclusion of escapement of income ascertained finally--Income-tax Act, 1961, ss. 147, 148-- Asst. CIT v. Philips Electronics India Ltd. 
(Kolkata) . . . 269

 

PRINT EDITION

Volume 47 : Part 1 (Issue dated : 4-4-2016)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Anonymous donations --Special rate of tax--Exception--Religious trust--Trust for religious and charitable purposes--Religious purpose includes relief to poor, education and medical relief--No anonymous donation received with specific direction--Special rate not attracted--Income-tax Act, 1961, s. 115BBC-- Deputy CIT v. All India Pingalwara Charitable Society(Amritsar) . . . 1

Business expenditure --Disallowance--Excessive and unreasonable payments--Processing of material and handling charges--Payments to sister concerns not more than fair market value--Activities under supervision of Excise Department--Recipient company paying maximum marginal rate of tax--Similar claim allowed in subsequent year--Expenses allowable--Income-tax Act, 1961, s. 40A(2)(b)-- JLC Electromet P. Ltd. v. Addl. CIT (Jaipur) . . . 85

----Disallowance--Payments for unlawful purpose--Clearing and forwarding agent--Dock workers--Commission--Assessee making payments on behalf of its clients as an incentive to dock workers to get loading and unloading done quickly--Books of account not sole determinative factor to decide nature of expenditure--No prohibition in law to make such payments--Factum of amount paid not disproved--Payments deductible--Income-tax Act, 1961, s. 37(1), Expln -- D. H. Patkar and Co. v. ITO
(Mumbai) . . . 82

----Interest charged by bank on fixed deposits prematurely encashed--Liability pertained to earlier year but claim in subsequent year--Matter remanded--Income-tax Act, 1961, s. 37--JLC Electromet P. Ltd. v. Addl. CIT (Jaipur) . . . 85

----Prior period expenses--Failure to prove whether expenses crystallised--Not allowable--Income-tax Act, 1961, s. 37-- JLC Electromet P. Ltd. v. Addl. CIT
(Jaipur) . . . 85

----Staff welfare expenses--Assessee producing bills and vouchers--Disallowance on conjectures and surmises--Impermissible--Income-tax Act, 1961, s. 37-- JLC Electromet P. Ltd. v. Addl. CIT (Jaipur) . . . 85

Exemption --Educational institution--Scope of section 10(23C)--Assessee a school managed by education board and filing returns in status of association of persons--Meaning of word “institution†includes school--Assessee an “institution†--Entitled to exemption--Income-tax Act, 1961, s. 10(23C)(vi)-- Sengunthar Matriculation Higher Secondary School v. Chief CIT (Chennai) . . . 107

Housing project --Special deduction--Appeal to Appellate Tribunal--Whether manufacturing process carried on by assessee with aid of power--Tribunal remanding matter without finding in absence of technical expert opinion--Authorities after remand finding assessee carried on manufacturing process without aid of power--Additional evidence in the form of certificate issued by Institute of Chemical Technology--Evidence admitted as vital and essential for resolving controversy and going to root of matter for resolving dispute--Income-tax Act, 1961, ss. 80-IB, 255(6)--Income-tax (Appellate Tribunal) Rules, 1963, r. 29-- Kishore Ramchandani v . ITO (Mumbai) . . . 134

Income from house property --Deductions--Interest--No condition property must be acquired as well as constructed with borrowed capital--Acquisition of property by borrowing loan--Interest deductible--Income-tax Act, 1961, s. 24(b)-- Mrs. Samiksha Mahajan v. Asst. CIT(Delhi) . . . 59

International transactions --Arm’s length price--Determination--Claim that total adjustment made to arm’s length price should be restricted to overall income earned by associated enterprises from third parties--Absence of necessary information such as average selling expenses in line of commercial activity--Matter remanded for re-examination--Income-tax Act, 1961-- Fortune Infotech Ltd. v. Asst. CIT
(Ahd) . . . 113

----Arm’s length price--Determination--Selection of comparables--Claim of exclusion of three comparables--Order of Dispute Resolution Panel reaching finality--Claim academic--Comparables cannot be excluded--Income-tax Act, 1961-- Fortune Infotech Ltd. v. Asst. CIT(Ahd) . . . 113

----Arm’s length price--Determination--Selection of comparables--Higher employee cost--Failure by assessee to prove underutilised capacity with reasonable precision and quantification--Adjustment cannot be made--Income-tax Act, 1961-- Fortune Infotech Ltd. v. Asst. CIT (Ahd) . . . 113

----Arm’s length price--Determination--Selection of most appropriate method--Availability, coverage and reliability of data necessary for application of method--Single comparable and assessee continuing to work for associated enterprise in spite of huge loss--Data not reliable--Internal transactional net margin method not most appropriate method on facts of case--Income-tax Act, 1961, s. 92C--Income-tax Rules, 1962, r. 10C-- Fortune Infotech Ltd. v. Asst. CIT (Ahd) . . . 113

Penalty --Concealment of income--Deemed dividend--Advance from sister concern--Disclosure of particulars of shareholding pattern, advances taken and given in return--Advances in course of regular business--Not deemed dividend--Debatable issue--Penalty cannot be imposed--Income-tax Act, 1961, ss. 2(22)(e), 271(1)(c)-- Trimurty Buildcon P. Ltd. v. Deputy CIT (Jaipur) . . . 50

----Failure to deduct tax at source--Royalty and fees for technical services--Technology must be made available--Payments for engineering and draughting services--Technology not made available--Payments not fees for technical service--Payments for purchase of shrink wrapped software--Contradictory decisions of High Courts and Benches of Tribunal as to whether tax deductible on payments therefor--Assessee based upon certificate of chartered accountant taking one of possible views--Reasonable cause for not deducting tax at source on payments--Penalty not imposable--Income-tax Act, 1961, ss. 271C, 273B-- Addl. DIT (International Taxation) v. Leighton Welspun Contractors P. Ltd. (Mumbai) . . . 97

Reassessment --Notice--No fresh tangible material in possession of Assessing Officer when recording reasons--Reassessment not valid--Income-tax Act, 1961, ss. 147, 148--Motilal R. Todi v . Asst. CIT (Mumbai) . . . 149

----Notice after four years--Condition precedent--No indication in reasons recorded about failure on part of assessee to disclose fully and truly all material facts necessary for assessment--Reassessment not valid--Income-tax Act, 1961, ss. 147, 148-- Apeejay Education Society v. Asst. CIT (Amritsar) . . . 33

----Procedure--Reasons for reassessment must be furnished to assessee before completion of reassessment--Pre-requisite condition--No reasons available in assessment record--Nothing to show that certified copy of reasons provided to assessee, despite request--Reassessment invalid--Income-tax Act, 1961, ss. 147, 148-- Muller and Philpps (India) Ltd. v. ITO (Mumbai) . . . 69

Special deduction --Repayment of loan for acquisition or construction of residential property--Property acquired and constructed by borrowing loan--Repayment of loan--Deductible--Income-tax Act, 1961, s. 80C-- Mrs. Samiksha Mahajan v. Asst. CIT
(Delhi) . . . 59

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961

S. 2(22)(e) --Penalty--Concealment of income--Deemed dividend--Advance from sister concern--Disclosure of particulars of shareholding pattern, advances taken and given in return--Advances in course of regular business--Not deemed dividend--Debatable issue--Penalty cannot be imposed-- Trimurty Buildcon P. Ltd. v. Deputy CIT (Jaipur) . . . 50

S. 10(23C)(vi) --Exemption--Educational institution--Scope of section 10(23C)--Assessee a school managed by education board and filing returns in status of association of persons--Meaning of word “institution†includes school--Assessee an “institution†--Entitled to exemption-- Sengunthar Matriculation Higher Secondary School v. Chief CIT (Chennai) . . . 107

S. 24(b) --Income from house property--Deductions--Interest--No condition property must be acquired as well as constructed with borrowed capital--Acquisition of property by borrowing loan--Interest deductible-- Mrs. Samiksha Mahajan v. Asst. CIT
(Delhi) . . . 59

S. 37 --Business expenditure--Interest charged by bank on fixed deposits prematurely encashed--Liability pertained to earlier year but claim in subsequent year--Matter remanded--JLC Electromet P. Ltd. v. Addl. CIT (Jaipur) . . . 85

----Business expenditure--Prior period expenses--Failure to prove whether expenses crystallised--Not allowable-- JLC Electromet P. Ltd. v. Addl. CIT
(Jaipur) . . . 85

----Business expenditure--Staff welfare expenses--Assessee producing bills and vouchers--Disallowance on conjectures and surmises--Impermissible-- JLC Electromet P. Ltd. v. Addl. CIT (Jaipur) . . . 85

S. 37(1), Expln --Business expenditure--Disallowance--Payments for unlawful purpose--Clearing and forwarding agent--Dock workers--Commission--Assessee making payments on behalf of its clients as an incentive to dock workers to get loading and unloading done quickly--Books of account not sole determinative factor to decide nature of expenditure--No prohibition in law to make such payments--Factum of amount paid not disproved--Payments deductible-- D. H. Patkar and Co. v. ITO
(Mumbai) . . . 82

S. 40A(2)(b) --Business expenditure--Disallowance--Excessive and unreasonable payments--Processing of material and handling charges--Payments to sister concerns not more than fair market value--Activities under supervision of Excise Department--Recipient company paying maximum marginal rate of tax--Similar claim allowed in subsequent year--Expenses allowable-- JLC Electromet P. Ltd. v. Addl. CIT
(Jaipur) . . . 85

S. 80C --Special deduction--Repayment of loan for acquisition or construction of residential property--Property acquired and constructed by borrowing loan--Repayment of loan--Deductible-- Mrs. Samiksha Mahajan v. Asst. CIT (Delhi) . . . 59

S. 80-IB --Housing project--Special deduction--Appeal to Appellate Tribunal--Whether manufacturing process carried on by assessee with aid of power--Tribunal remanding matter without finding in absence of technical expert opinion--Authorities after remand finding assessee carried on manufacturing process without aid of power--Additional evidence in the form of certificate issued by Institute of Chemical Technology--Evidence admitted as vital and essential for resolving controversy and going to root of matter for resolving dispute-- Kishore Ramchandani v . ITO
(Mumbai) . . . 134

S. 92C --International transactions--Arm’s length price--Determination--Selection of most appropriate method--Availability, coverage and reliability of data necessary for application of method--Single comparable and assessee continuing to work for associated enterprise in spite of huge loss--Data not reliable--Internal transactional net margin method not most appropriate method on facts of case-- Fortune Infotech Ltd. v. Asst. CIT (Ahd) . . . 113

S. 115BBC --Anonymous donations--Special rate of tax--Exception--Religious trust--Trust for religious and charitable purposes--Religious purpose includes relief to poor, education and medical relief--No anonymous donation received with specific direction--Special rate not attracted-- Deputy CIT v. All India Pingalwara Charitable Society (Amritsar) . . . 1

S. 147 --Reassessment--Notice--No fresh tangible material in possession of Assessing Officer when recording reasons--Reassessment not valid-- Motilal R. Todi v . Asst. CIT(Mumbai) . . . 149

----Reassessment--Notice after four years--Condition precedent--No indication in reasons recorded about failure on part of assessee to disclose fully and truly all material facts necessary for assessment--Reassessment not valid-- Apeejay Education Society v. Asst. CIT (Amritsar) . . . 33

----Reassessment--Procedure--Reasons for reassessment must be furnished to assessee before completion of reassessment--Pre-requisite condition--No reasons available in assessment record--Nothing to show that certified copy of reasons provided to assessee, despite request--Reassessment invalid-- Muller and Philpps (India) Ltd. v. ITO (Mumbai) . . . 69

S. 148 --Reassessment--Notice--No fresh tangible material in possession of Assessing Officer when recording reasons--Reassessment not valid-- Motilal R. Todi v . Asst. CIT(Mumbai) . . . 149

----Reassessment--Notice after four years--Condition precedent--No indication in reasons recorded about failure on part of assessee to disclose fully and truly all material facts necessary for assessment--Reassessment not valid-- Apeejay Education Society v. Asst. CIT (Amritsar) . . . 33

----Reassessment--Procedure--Reasons for reassessment must be furnished to assessee before completion of reassessment--Pre-requisite condition--No reasons available in assessment record--Nothing to show that certified copy of reasons provided to assessee, despite request--Reassessment invalid-- Muller and Philpps (India) Ltd. v. ITO (Mumbai) . . . 69

S. 255(6) --Housing project--Special deduction--Appeal to Appellate Tribunal--Whether manufacturing process carried on by assessee with aid of power--Tribunal remanding matter without finding in absence of technical expert opinion--Authorities after remand finding assessee carried on manufacturing process without aid of power--Additional evidence in the form of certificate issued by Institute of Chemical Technology--Evidence admitted as vital and essential for resolving controversy and going to root of matter for resolving dispute-- Kishore Ramchandani v . ITO
(Mumbai) . . . 134

S. 271C --Penalty--Failure to deduct tax at source--Royalty and fees for technical services--Technology must be made available--Payments for engineering and draughting services--Technology not made available--Payments not fees for technical service--Payments for purchase of shrink wrapped software--Contradictory decisions of High Courts and Benches of Tribunal as to whether tax deductible on payments therefor--Assessee based upon certificate of chartered accountant taking one of possible views--Reasonable cause for not deducting tax at source on payments--Penalty not imposable-- Addl. DIT (International Taxation) v. Leighton Welspun Contractors P. Ltd.
(Mumbai) . . . 97

S. 271(1)(c) --Penalty--Concealment of income--Deemed dividend--Advance from sister concern--Disclosure of particulars of shareholding pattern, advances taken and given in return--Advances in course of regular business--Not deemed dividend--Debatable issue--Penalty cannot be imposed-- Trimurty Buildcon P. Ltd. v. Deputy CIT (Jaipur) . . . 50

S. 273B --Penalty--Failure to deduct tax at source--Royalty and fees for technical services--Technology must be made available--Payments for engineering and draughting services--Technology not made available--Payments not fees for technical service--Payments for purchase of shrink wrapped software--Contradictory decisions of High Courts and Benches of Tribunal as to whether tax deductible on payments therefor--Assessee based upon certificate of chartered accountant taking one of possible views--Reasonable cause for not deducting tax at source on payments--Penalty not imposable-- Addl. DIT (International Taxation) v. Leighton Welspun Contractors P. Ltd.
(Mumbai) . . . 97

Income-tax Rules, 1962

R. 10C --International transactions--Arm’s length price--Determination--Selection of most appropriate method--Availability, coverage and reliability of data necessary for application of method--Single comparable and assessee continuing to work for associated enterprise in spite of huge loss--Data not reliable--Internal transactional net margin method not most appropriate method on facts of case-- Fortune Infotech Ltd. v. Asst. CIT (Ahd) . . . 113

Income-tax (Appellate Tribunal) Rules, 1963

R. 29 --Housing project--Special deduction--Appeal to Appellate Tribunal--Whether manufacturing process carried on by assessee with aid of power--Tribunal remanding matter without finding in absence of technical expert opinion--Authorities after remand finding assessee carried on manufacturing process without aid of power--Additional evidence in the form of certificate issued by Institute of Chemical Technology--Evidence admitted as vital and essential for resolving controversy and going to root of matter for resolving dispute-- Kishore Ramchandani v . ITO (Mumbai) . . . 134