Tuesday, December 29, 2009
Thursday, December 10, 2009
ITR VOL 328 PART 4 AND ITR (TRIB) VOL 6 PART 3
INCOME TAX REPORTS (ITR)
Volume 328 : Part 4 (Issue dated 15-11-2010)
Assessment --Books of account of assessee not rejected--Assessing Officer cannot refer matter to Departmental Valuation Officer-- Sargam Cinema v. CIT . . . 513
Reassessment --Information--Opinion of District Valuation Officer--Cannot be basis for reopening assessment--Income-tax Act, 1961, s. 147-- Asst. CIT v. Dhariya Construction Co . . . . 515
Advance tax --Interest payable by assessee--Compensation and interest on acquisition of land--Failure to pay advance tax--Interest can be levied under section 234B--Income-tax Act, 1961, s. 234B-- Deputy CIT v. Gopal Ramnarayan Kasat (Bom) . . . 556
Appellate Tribunal --Tribunal holding that assessee produced all relevant documents before Assessing Officer--Finding of fact--Income-tax Act, 1961-- CIT v. Sikka Overseas P. Ltd. (Delhi) . . . 641
Assessment --Reference to Valuation Officer--Opinion of Valuation Officer--Not sufficient basis without anything further to make addition--Income-tax Act, 1961-- CIT v. Naveen Gera (Delhi) . . . 516
----Valuation of property--Reference to Valuation Officer for valuation of investment--Not permissible where assessment made prior to September 30, 2004--Income-tax Act, 1961, s. 142A-- CIT v. Naveen Gera (Delhi) . . . 516
Business --Adventure in the nature of trade--Purchase of plots of land demarcated for acquisition by Government--Subsequent acquisition and receipt of compensation--Transaction adventure in the nature of trade--Gains assessable as business income--Income-tax Act, 1961, ss. 2(13), 28-- Deputy CIT v. Gopal Ramnarayan Kasat (Bom) . . . 556
----Business income--Cessation of liability--Interest on loans deducted in prior years--Credit entries transferred to capital accounts of partners of assessee-firm--Liability to pay interest ceased--Interest credited to accounts of creditors in assessment year assessable under section 41(1)--Income-tax Act, 1961, s. 41(1)-- Sree Hanuman Trading Co . v. ITO (Ker) . . . 662
----Other sources--Interest on compensation--Assessable as business income--Income-tax Act, 1961, s. 28-- Deputy CIT v. Gopal Ramnarayan Kasat (Bom) . . . 556
Business expenditure --Capital or revenue expenditure--Expenditure incurred in setting up new unit--Finding that new unit was separate and independent--Expenditure not deductible--Income-tax Act, 1961, s. 37-- CIT v. Vadilal Dairy International Ltd . (Guj) . . . 544
----Capital or revenue expenditure--Expenditure on foreign travel--Foreign travel for purposes of setting up new unit--Expenditure capitalised by assessee--Expenditure not deductible--Income-tax Act, 1961, s. 37-- CIT v. Vadilal Dairy International Ltd. (Guj) . . . 544
----Disallowance--Payments in cash exceeding specified limit--Distributor of lottery tickets--Explanation that Government insisted on payments in cash or demand drafts--Contention that Government agents were coming for collection of cash--Explanation contrary to contention--Commissioner (Appeals) and Tribunal not justified in setting aside disallowance--Matter remanded--Income-tax Act, 1961, s. 40A(3)-- ITO v. K. N. Pramod (Karn) . . . 669
Capital gains --Capital loss--Assessee in October 1992 acquiring convertible debentures for shares hold--Renunciation of right--Loss incurred--Deductible as short-term capital loss--Income-tax Act, 1961, s. 55-- Asst. CIT v. Acropolish Investments Ltd .(Guj) . . . 664
----Liability to tax--Land and building brought to firm as capital contribution by partners--Depreciation on land and buildings allowed to firm for a number of years--Dissolution of firm and assets distributed among partners--Transaction covered by section 45(4)--Gains assessable--Reference to valuer under section 55A justified--Income-tax Act, 1961, ss. 45(4), 55A--CIT v. Kumbazha Tourist Home (Dissolved) (Ker) . . . 600
Charitable purpose --Exemption--Money advanced for purchase of land--Peaceful and vacant possession of property handed over and irrevocable general power of attorney executed in assessee's favour--Assessee entitled to exemption--Income-tax Act, 1961, s. 11-- Director of Income-tax (Exemptions) v. Maharaja Agarsen Technical Education Society (Delhi) . . . 551
----Registration--Truck operators association--Welfare activities as in business organizations--Assessee not formed for advancement of general public utility--Assessee not entitled to benefit of registration--Income-tax Act, 1961, ss. 2(15), 12AA-- CIT v. Truck Operators Association (P&H) . . . 636
Deduction of tax at source --Writ--Works contract--Supply of eggs to Government in terms of specification contained in contract--Transaction whether works contract or sale is a question of fact--Assessee having alternative remedies under Income-tax Act--Writ would not issue to quash order for deduction of tax at source--Income-tax Act, 1961, s. 194C--Constitution of India, art. 226-- Mani Muthusamy v. Personal Assistant to Collector (Mad) . . . 588
Export --Special deduction under section 80HHC--Computation of turnover--Conversion charges not includible in turnover--Income-tax Act, 1961, s. 80HHC-- CIT v. Coimbatore Twisters Pvt. Ltd. (Mad) . . . 609
Income --Accrual of income--Time of accrual--Interest on compensation--Assessable in year of receipt--Income-tax Act, 1961-- Deputy CIT v. Gopal Ramnarayan Kasat (Bom) . . . 556
Income from undisclosed sources --Investment in property--Burden of proof to prove understatement is on Revenue--No evidence found at search to suggest payment over and above consideration mentioned in registered purchase deed--Addition solely on basis of report of Valuation Officer--Not justified--Income-tax Act, 1961-- CIT v. Smt. Suraj Devi (Delhi) . . . 604
----Long-term capital gains--Assessees belonging to a group purchasing and selling shares of similar companies--Assessing Officer holding transactions sham as sale through same broker and not at market rate--Tribunal finding transactions genuine--Finding of fact--Income-tax Act, 1961, s. 68-- CIT v. Jamnadevi Agrawal (Bom) . . . 656
Interest on borrowed capital --Capital used for setting up new business--Law applicable--Proviso to section 36(1)(iii) effective from 1-4-2004--Interest deductible in assessment year 1993-94--Income-tax Act, 1961, s. 36(1)(iii)-- CIT v. Vadilal Dairy International Ltd. (Guj) . . . 544
Loss --Business loss--Lease transaction found to be bogus--Claim for business loss arising from such transaction--Not allowable--Income-tax Act, 1961-- CIT v. English Indian Clays Ltd. (Ker) . . . 647
Offences and prosecution --Wilful attempt to evade tax--Penalty set aside by competent court--Prosecution based on same facts cannot continue--Income-tax Act, 1961, ss. 276C, 278B-- Harkawat and Company v. Union of India (MP) . . . 624
Penalty --Concealment of income--Additions on account of disallowance of certain expenses--Not a case of concealment of income or furnishing inaccurate particulars--Tribunal deleting penalty on finding disallowance on an estimate basis without pointing out any specific defect in explanation of assessee--Findings of fact--Income-tax Act, 1961, s. 271(1)(c)-- CIT v. SSP Ltd. (P&H) . . . 643
----Concealment of income--Claim for deduction of loss--Details regarding claim furnished--Claim rejected--No furnishing of inaccurate particulars or concealment of income--Cancellation of penalty--Valid--Income-tax Act, 1961, s. 271(1)(c)-- CIT v. IFCI Ltd. (Delhi) . . . 611
----Disallowance--Not a ground for levying penalty--Income-tax Act, 1961, s. 271(1)(c)--CIT v. SSP Ltd. (P&H) . . . 643
Precedent --Effect of decision of Supreme Court in Assistant CIT v. Rajesh Jhaveri Stock Brokers P. Ltd. [2007] 291 ITR 500-- CIT v. Chandrasekhar Balagopal (Ker) . . . 619
----Effect of decision of Supreme Court in State of A. P. v. Kone Elevators [2005] 3 SCC 389-- Mani Muthusamy v. Personal Assistant to Collector (Mad) . . . 588
----Effect of Supreme Court decision in Deputy CIT v. Core Health Care Ltd. [2008] 298 ITR 194-- CIT v. Vadilal Dairy International Ltd. (Guj) . . . 544
Professional income from foreign sources --Special deduction--Dress designer--Is an artist--Design fees received in convertible foreign exchange--Eligible for deduction under section 80RR--Income-tax Act, 1961, s. 80RR-- CIT v. Tarun R. Tahiliani (Bom) . . . 629
Purchase of immovable property by Central Government --Transactions cited by transferor and transferee not considered--No good reason for valuation fixed by Appropriate Authority--Order of pre-emptive purchase--Not valid--Income-tax Act, 1961, s. 268UD(1)-- Dattaram Bhikai Telge v. Appropriate Authority (Bom) . . . 580
Reassessment --Limitation--Exclusion from limitation--Reassessment consequent on finding in appellate order--Effect of sections 150(1) and 153(1)--Order of Commissioner (Appeals) in 1996 that capital gains was assessable in assessment year 1983-84 --Notice under section 148 based on order--Not barred by limitation--Income-tax Act, 1961, ss. 148, 150, 153-- Kalyan Ala Barot v. M. H. Rathod (Guj) . . . . 521
----Notice--Notice after four years on ground assessee not entitled to deduction claimed--Assessee disclosing fully and truly all material facts necessary for assessment and Assessing Officer applying mind thereto--No case for reopening assessment beyond four years--Income-tax Act, 1961, s. 148-- Hindustan Petroleum Corporation Ltd. v. Deputy CIT (Bom) . . . 534
----Notice--Returns filed between 1-10-1991 and 30-9-2005--Notice issued under section 143 after twelve months--Reassessment proceedings valid--Income-tax Act, 1961, ss. 143(2), 147, 148-- Deputy CIT v. Gopal Ramnarayan Kasat (Bom) . . . 556
----Notice--Validity of notice--Law applicable--Effect of amendment of sections 143 and 147 with effect from 1-4-1989--Failure to make assessment based on return--Notice of reassessment not barred--Notice valid--Income-tax Act, 1961, ss. 143, 147, 148-- CIT v. Chandrasekhar Balagopal (Ker) . . . 619
Reference --Finality of findings of fact--Income-tax Act, 1961, s. 256-- Deputy CIT v. Gopal Ramnarayan Kasat (Bom) . . . 556
Rejection of books of account --Assessing Officer rejecting books of account, making assessment by applying gross profit at a higher rate--Finding by appellate authorities that no justification for rejecting books of account since assessee given explanation for decrease in sale and no defect in valuation of stock and assessee following same method of valuation consistently for many years--Findings of fact--Income-tax Act, 1961-- CIT v. Patiala Distt. Co-op. Milk Producers' Union Ltd . (P&H) . . . 615
Undisclosed investment --Purchase of property disclosed in declaration under Voluntary Disclosure Scheme--No evidence found in course of search to show payment of any sum over that declared--No addition permissible--Voluntary Disclosure of Income Scheme, 1997-- CIT v. Naveen Gera (Delhi) . . . 516
Art. 226 --Deduction of tax at source--Writ--Works contract--Supply of eggs to Government in terms of specification contained in contract--Transaction whether works contract or sale is a question of fact--Assessee having alternative remedies under Income-tax Act--Writ would not issue to quash order for deduction of tax at source-- Mani Muthusamy v. Personal Assistant to Collector (Mad) . . . 588
S. 2(13) --Business--Adventure in the nature of trade--Purchase of plots of land demarcated for acquisition by Government--Subsequent acquisition and receipt of compensation--Transaction adventure in the nature of trade--Gains assessable as business income-- Deputy CIT v. Gopal Ramnarayan Kasat (Bom) . . . 556
S. 2(15) --Charitable purpose--Registration--Truck operators association--Welfare activities as in business organizations--Assessee not formed for advancement of general public utility--Assessee not entitled to benefit of registration-- CIT v. Truck Operators Association (P&H) . . . 636
S. 11 --Charitable purpose--Exemption--Money advanced for purchase of land--Peaceful and vacant possession of property handed over and irrevocable general power of attorney executed in assessee's favour--Assessee entitled to exemption-- Director of Income-tax (Exemptions) v. Maharaja Agarsen Technical Education Society (Delhi) . . . 551
S. 12AA --Charitable purpose--Registration--Truck operators association--Welfare activities as in business organizations--Assessee not formed for advancement of general public utility--Assessee not entitled to benefit of registration-- CIT v. Truck Operators Association (P&H) . . . 636
S. 28 --Business--Adventure in the nature of trade--Purchase of plots of land demarcated for acquisition by Government--Subsequent acquisition and receipt of compensation--Transaction adventure in the nature of trade--Gains assessable as business income-- Deputy CIT v. Gopal Ramnarayan Kasat (Bom) . . . 556
----Business--Other sources--Interest on compensation--Assessable as business income-- Deputy CIT v. Gopal Ramnarayan Kasat (Bom) . . . 556
S. 36(1)(iii) --Interest on borrowed capital--Capital used for setting up new business--Law applicable--Proviso to section 36(1)(iii) effective from 1-4-2004--Interest deductible in assessment year 1993-94-- CIT v. Vadilal Dairy International Ltd. (Guj) . . . 544
S. 37 --Business expenditure--Capital or revenue expenditure--Expenditure incurred in setting up new unit--Finding that new unit was separate and independent--Expendi-ture not deductible-- CIT v. Vadilal Dairy International Ltd . (Guj) . . . 544
----Business expenditure--Capital or revenue expenditure--Expenditure on foreign travel--Foreign travel for purposes of setting up new unit--Expenditure capitalised by assessee--Expenditure not deductible-- CIT v. Vadilal Dairy International Ltd. (Guj) . . . 544
S. 40A(3) --Business expenditure--Disallowance--Payments in cash exceeding speci-fied limit--Distributor of lottery tickets--Explanation that Government insisted on payments in cash or demand drafts--Contention that Government agents were coming for collection of cash--Explanation contrary to contention--Commissioner (Appeals) and Tribunal not justified in setting aside disallowance--Matter remanded-- ITO v. K. N. Pramod (Karn) . . . 669
S. 41(1) --Business--Business income--Cessation of liability--Interest on loans deducted in prior years--Credit entries transferred to capital accounts of partners of assessee-firm--Liability to pay interest ceased--Interest credited to accounts of creditors in assessment year assessable under section 41(1)-- Sree Hanuman Trading Co . v. ITO (Ker) . . . 662
S. 45(4) --Capital gains--Liability to tax--Land and building brought to firm as capital contribution by partners--Depreciation on land and buildings allowed to firm for a number of years--Dissolution of firm and assets distributed among partners--Transaction covered by section 45(4)--Gains assessable--Reference to valuer under section 55A justified--CIT v. Kumbazha Tourist Home (Dissolved) (Ker) . . . 600
S. 55 --Capital gains--Capital loss--Assessee in October 1992 acquiring convertible debentures for shares hold--Renunciation of right--Loss incurred--Deductible as short-term capital loss-- Asst. CIT v. Acropolish Investments Ltd . (Guj) . . . 664
S. 55A --Capital gains--Liability to tax--Land and building brought to firm as capital contribution by partners--Depreciation on land and buildings allowed to firm for a number of years--Dissolution of firm and assets distributed among partners--Transaction covered by section 45(4)--Gains assessable--Reference to valuer under section 55A justified--CIT v. Kumbazha Tourist Home (Dissolved) (Ker) . . . 600
S. 68 --Income from undisclosed sources--Long-term capital gains--Assessees belonging to a group purchasing and selling shares of similar companies--Assessing Officer holding transactions sham as sale through same broker and not at market rate--Tribunal finding transactions genuine--Finding of fact-- CIT v. Jamnadevi Agrawal (Bom) . . . 656
S. 80HHC --Export--Special deduction under section 80HHC--Computation of turnover--Conversion charges not includible in turnover-- CIT v. Coimbatore Twisters Pvt. Ltd. (Mad) . . . 609
S. 80RR --Professional income from foreign sources--Special deduction--Dress designer--Is an artist--Design fees received in convertible foreign exchange--Eligible for deduction under section 80RR-- CIT v. Tarun R. Tahiliani (Bom) . . . 629
S. 142A --Assessment--Valuation of property--Reference to Valuation Officer for valuation of investment--Not permissible where assessment made prior to September 30, 2004-- CIT v. Naveen Gera (Delhi) . . . 516
S. 143 --Reassessment--Notice--Validity of notice--Law applicable--Effect of amendment of sections 143 and 147 with effect from 1-4-1989--Failure to make assessment based on return--Notice of reassessment not barred--Notice valid-- CIT v. Chandrasekhar Balagopal (Ker) . . . 619
S. 143(2) --Reassessment--Notice--Returns filed between 1-10-1991 and 30-9-2005 --Notice issued under section 143 after twelve months--Reassessment proceedings valid-- Deputy CIT v. Gopal Ramnarayan Kasat (Bom) . . . 556
S. 147 --Reassessment--Information--Opinion of District Valuation Officer--Cannot be basis for reopening assessment-- Asst. CIT v. Dhariya Construction Co .(SC) . . . 515
----Reassessment--Notice--Returns filed between 1-10-1991 and 30-9-2005--Notice issued under section 143 after twelve months--Reassessment proceedings valid-- Deputy CIT v. Gopal Ramnarayan Kasat (Bom) . . . 556
----Reassessment--Notice--Validity of notice--Law applicable--Effect of amendment of sections 143 and 147 with effect from 1-4-1989--Failure to make assessment based on return--Notice of reassessment not barred--Notice valid-- CIT v. Chandrasekhar Balagopal (Ker) . . . 619
S. 148 --Reassessment--Limitation--Exclusion from limitation--Reassessment consequent on finding in appellate order--Effect of sections 150(1) and 153(1)--Order of Commissioner (Appeals) in 1996 that capital gains was assessable in assessment year 1983-84 --Notice under section 148 based on order--Not barred by limitation-- Kalyan Ala Barot v. M. H. Rathod (Guj) . . . 521
----Reassessment--Notice--Notice after four years on ground assessee not entitled to deduction claimed--Assessee disclosing fully and truly all material facts necessary for assessment and Assessing Officer applying mind thereto--No case for reopening assessment beyond four years-- Hindustan Petroleum Corporation Ltd. v. Deputy CIT (Bom) . . . 534
----Reassessment--Notice--Returns filed between 1-10-1991 and 30-9-2005--Notice issued under section 143 after twelve months--Reassessment proceedings valid-- Deputy CIT v. Gopal Ramnarayan Kasat (Bom) . . . 556
----Reassessment--Notice--Validity of notice--Law applicable--Effect of amendment of sections 143 and 147 with effect from 1-4-1989--Failure to make assessment based on return--Notice of reassessment not barred--Notice valid-- CIT v. Chandrasekhar Balagopal (Ker) . . . 619
S. 150 --Reassessment--Limitation--Exclusion from limitation--Reassessment consequent on finding in appellate order--Effect of sections 150(1) and 153(1)--Order of Commissioner (Appeals) in 1996 that capital gains was assessable in assessment year 1983-84 --Notice under section 148 based on order--Not barred by limitation-- Kalyan Ala Barot v. M. H. Rathod (Guj) . . . 521
S. 153 --Reassessment--Limitation--Exclusion from limitation--Reassessment consequent on finding in appellate order--Effect of sections 150(1) and 153(1)--Order of Commissioner (Appeals) in 1996 that capital gains was assessable in assessment year 1983-84 --Notice under section 148 based on order--Not barred by limitation-- Kalyan Ala Barot v. M. H. Rathod (Guj) . . . 521
S. 194C --Deduction of tax at source--Writ--Works contract--Supply of eggs to Government in terms of specification contained in contract--Transaction whether works contract or sale is a question of fact--Assessee having alternative remedies under Income-tax Act--Writ would not issue to quash order for deduction of tax at source-- Mani Muthusamy v. Personal Assistant to Collector (Mad) . . . 588
S. 234B --Advance tax--Interest payable by assessee--Compensation and interest on acquisition of land--Failure to pay advance tax--Interest can be levied under section 234B-- Deputy CIT v. Gopal Ramnarayan Kasat (Bom) . . . 556
S. 256 --Reference--Finality of findings of fact-- Deputy CIT v. Gopal Ramnarayan Kasat (Bom) . . . 556
S. 268UD(1) --Purchase of immovable property by Central Government--Transactions cited by transferor and transferee not considered--No good reason for valuation fixed by Appropriate Authority--Order of pre-emptive purchase--Not valid-- Dattaram Bhikai Telge v. Appropriate Authority (Bom) . . . 580
S. 271(1)(c) --Penalty--Concealment of income--Additions on account of disallowance of certain expenses--Not a case of concealment of income or furnishing inaccurate particulars--Tribunal deleting penalty on finding disallowance on an estimate basis without pointing out any specific defect in explanation of assessee--Findings of fact-- CIT v. SSP Ltd. (P&H) . . . 643
----Penalty--Concealment of income--Claim for deduction of loss--Details regarding claim furnished--Claim rejected--No furnishing of inaccurate particulars or concealment of income--Cancellation of penalty--Valid-- CIT v. IFCI Ltd. (Delhi) . . . 611
S. 276C --Offences and prosecution--Wilful attempt to evade tax--Penalty set aside by competent court--Prosecution based on same facts cannot continue-- Harkawat and Company v. Union of India (MP) . . . 624
S. 278B --Offences and prosecution--Wilful attempt to evade tax--Penalty set aside by competent court--Prosecution based on same facts cannot continue-- Harkawat and Company v. Union of India (MP) . . . 624
Advance tax --Refund--Interest--Assessee entitled to interest from date of regular assessment till date of grant of refund on amount of prepaid tax found in excess of tax assessed under section 251 and further interest from date of payment of regular tax till date of grant of refund--Income-tax Act, 1961, s. 244(1A)-- Deputy CIT v. Simbhaoli Sugar Mills Ltd. (Delhi) . . . 247
----Refund--Interest--Assessee entitled to receive interest under section 214(1A) on difference between advance tax and tax assessed under section 251 from the first day of assessment year till day of passing regular assessment under section 143(3)--Income-tax Act, 1961, s. 214(1A)-- Deputy CIT v. Simbhaoli Sugar Mills Ltd. (Delhi) . . . 247
Appeal to Appellate Tribunal --Decision by Division Bench--Difference of opinion between members of Division Bench regarding admission of additional grounds of appeal--Additional ground considered by only one of members--No decision on merits by Division Bench--Matter remanded--Income-tax Act, 1961-- Everwin Export Corporation v. ITO (Chennai) . . . 287
----Procedure--Additional grounds of appeal--No specific procedure to be followed --Additional ground raised in petition--Space provided in petition form to mention additional ground left blank--Mistake in stating appeal number--Not relevant--Additional ground to be considered by Tribunal--Income-tax Act, 1961-- Everwin Export Corporation v. ITO (Chennai) . . . 287
Business expenditure --Capital or revenue expenditure--Expenses incurred on site development--Agreement between assessee and VGS for development of site and portal for VGS--Assessee already in software development business and development of portal--No asset acquired--Expenditure incurred in connection with business of assessee--Revenue expenditure--Income-tax Act, 1961, s. 37-- Asst. CIT v. Jupiter Corporate Services Ltd. (Ahmedabad) . . . 264
----Disallowance--Payments in cash exceeding specified limit--Payments made to truck drivers for hiring trucks--Payments made against vouchers signed by driver--Section 40A(3) prior to amendment applicable--Single payment not exceeding Rs. 20,000--Not to be disallowed--Income-tax Act, 1961, s. 40A(3)-- Leader Transport Co. v. ITO (Ahmedabad) . . . 229
----Interest on borrowed capital--Investment in property for business purposes in earlier year reclassified as "loans and advances"--Explanation that investment in property out of share capital of company prior to its amalgamation with assessee--No evidence as regards interest bearing funds of assessee invested in interest-free advances to director--Amalgamation of company with assessee a business transaction and outstanding amount against director related to business--Interest paid allowable--Income-tax Act, 1961, s. 37-- Asst. CIT v. Jupiter Corporate Services Ltd. (Ahmedabad) . . . 264
----Parking fees--Vehicles not owned by assessee--Payment made only in one branch--Claim of expenses on notional basis--To be disallowed--Income-tax Act, 1961 -- Leader Transport Co. v. ITO (Ahmedabad) . . . 229
Business income --Income earned from money lending business--Assessed as business income in preceding and subsequent years--No change in facts of present year--To be assessed as business income--Income-tax Act, 1961-- Asst. CIT v. Jitender Kumar Gupta (Delhi) . . . 256
----Profits chargeable to tax--Remission or cessation of trading liability--Conversion of sales tax collected into loan liability under deferral scheme--Entire sales tax deferral liability from loan liability discharged on payment of lesser amount--Difference amount is income of assessee for assessment year in which liability is discharged--Income-tax Act, 1961, s. 41(1)-- Schenectady Specialities Asia Pvt. Ltd. v. Asst. CIT (Mumbai) . . . 300
Capital gains --Capital asset--Definition--Exclusion--Agricultural land outside specified distance from municipality--Meaning of "municipality" in section 2(14)--Notification that land within two kilometres from local limits of Phagwara Municipality would be considered within its jurisdiction--Agricultural land outside specified limit--Transfer of such land did not give rise to capital gains--Income-tax Act, 1961, ss. 2(14), 45--Notification No. 9447/F. No. 164/3/87-ITA-I, dated 6-1-1992-- Deputy CIT v. Capital Local Area Bank Ltd. (Amritsar) . . . 314
Capital loss --Purchase and sale of shares--No record to justify purchase price and sale price--Matter remanded-- Asst. CIT v. Jitender Kumar Gupta (Delhi) . . . 256
Capital or revenue receipt --Foreign institutional investor--Compensation on non-pari passu shares--Is capital receipt--Not liable to tax--Income-tax Act, 1961-- Advantage Advisors Inc. v. Deputy Director of Income-tax (International Taxation) (Mumbai) . . . 235
Deduction --Disallowance of expenditure in relation to income which does not form part of total income--Investment in shares yielding dividend income--Dividend income declared in earlier years and no disallowance made--Investment in shares by company which merged with assessee later on--Investments taken over by assessee--Disallowance not justified--Section 14A not applicable--Income-tax Act, 1961, s. 14A-- Asst. CIT v. Jupiter Corporate Services Ltd. (Ahmedabad) . . . 264
Depreciation --User of asset in business of assessee--Earning of income not sole criterion--Lease of hotel by assessee--Disputes between assessee and lessee referred to arbitration--Assessee not receiving licence fee for a particular year by virtue of arbitration award--Depreciation cannot be denied--Income-tax Act, 1961, s. 32-- ELEL Hotels and Investments Ltd. v. Deputy CIT (Delhi) . . . 272
Foreign institutional investor --Special provision for computation of capital gains from investment in securities--Capital loss on sale of securities--Eligibility to avail of benefit of indexation not sine qua non to apply for concessional rate of tax--Benefit of indexation not available--General provisions not applicable for computation of capital loss by foreign institutional investor--Income-tax Act, 1961, ss. 48, prov. 2, 112, prov., 115AD--Circular No. 657, dated 30-8-1993-- Advantage Advisors Inc. v. Deputy Director of Income-tax (International Taxation) (Mumbai) . . . 235
Income --Accrual of income--Lease--Disputes with respect to responsibility for repair and maintenance of assets referred to arbitration--Award holding assessee not entitled to lease amounts for certain years--Income does not accrue-- ELEL Hotels and Investments Ltd. v. Deputy CIT (Delhi) . . . 272
Other sources --Deductions--Cost incurred by assessee to purchase bonds--Finding that assessee being intermediate purchaser expenses to be allowed from sale proceeds--Proper--Income-tax Act, 1961-- Asst. CIT v. Jitender Kumar Gupta (Delhi) . . . 256
----Deductions--Expenditure for earning income--Similar expenditure allowed in subsequent year--To be allowed--Income-tax Act, 1961, s. 57(iii)-- Asst. CIT v. Jitender Kumar Gupta (Delhi) . . . 256
S. 2(14) --Capital gains--Capital asset--Definition--Exclusion--Agricultural land outside specified distance from municipality--Meaning of "municipality" in section 2(14)--Notification that land within two kilometres from local limits of Phagwara Municipality would be considered within its jurisdiction--Agricultural land outside specified limit--Transfer of such land did not give rise to capital gains--Notification No. 9447/F. No. 164/3/87-ITA-I, dated 6-1-1992-- Deputy CIT v. Capital Local Area Bank Ltd. (Amritsar) . . . 314
S. 14A --Deduction--Disallowance of expenditure in relation to income which does not form part of total income--Investment in shares yielding dividend income--Dividend income declared in earlier years and no disallowance made--Investment in shares by company which merged with assessee later on--Investments taken over by assessee --Disallowance not justified--Section 14A not applicable-- Asst. CIT v. Jupiter Corporate Services Ltd. (Ahmedabad) . . . 264
S. 32 --Depreciation--User of asset in business of assessee--Earning of income not sole criterion--Lease of hotel by assessee--Disputes between assessee and lessee referred to arbitration--Assessee not receiving licence fee for a particular year by virtue of arbitration award--Depreciation cannot be denied-- ELEL Hotels and Investments Ltd. v. Deputy CIT (Delhi) . . . 272
S. 37 --Business expenditure--Capital or revenue expenditure--Expenses incurred on site development--Agreement between assessee and VGS for development of site and portal for VGS--Assessee already in software development business and development of portal--No asset acquired--Expenditure incurred in connection with business of assessee--Revenue expenditure-- Asst. CIT v. Jupiter Corporate Services Ltd. (Ahmedabad) . . . 264
----Business expenditure--Interest on borrowed capital--Investment in property for business purposes in earlier year reclassified as "loans and advances"--Explanation that investment in property out of share capital of company prior to its amalgamation with assessee--No evidence as regards interest bearing funds of assessee invested in interest-free advances to director --Amalgamation of company with assessee a business transaction and outstanding amount against director related to business--Interest paid allowable-- Asst. CIT v. Jupiter Corporate Services Ltd. (Ahmedabad) . . . 264
S. 40A(3) --Business expenditure--Disallowance--Payments in cash exceeding specified limit--Payments made to truck drivers for hiring trucks--Payments made against vouchers signed by driver--Section 40A(3) prior to amendment applicable--Single payment not exceeding Rs. 20,000--Not to be disallowed-- Leader Transport Co. v. ITO (Ahmedabad) . . . 229
S. 41(1) --Business expenditure--Profits chargeable to tax--Remission or cessation of trading liability--Conversion of sales tax collected into loan liability under deferral scheme--Entire sales tax deferral liability from loan liability discharged on payment of lesser amount--Difference amount is income of assessee for assessment year in which liability is discharged-- Schenectady Specialities Asia Pvt. Ltd. v. Asst. CIT (Mumbai) . . . 300
S. 45 --Capital gains--Capital asset--Definition--Exclusion--Agricultural land outside specified distance from municipality--Meaning of "municipality" in section 2(14)--Notification that land within two kilometres from local limits of Phagwara Municipality would be considered within its jurisdiction--Agricultural land outside specified limit--Transfer of such land did not give rise to capital gains--Notification No. 9447/F. No. 164/3/87-ITA-I, dated 6-1-1992-- Deputy CIT v. Capital Local Area Bank Ltd. (Amritsar) . . . 314
S. 48, prov. 2 --Foreign institutional investor--Special provision for computation of capital gains from investment in securities--Capital loss on sale of securities--Eligibility to avail of benefit of indexation not sine qua non to apply for concessional rate of tax--Benefit of indexation not available--General provisions not applicable for computation of capital loss by foreign institutional investor--Circular No. 657, dated 30-8-1993-- Advantage Advisors Inc. v. Deputy Director of Income-tax (International Taxation) (Mumbai) . . . 235
S. 57(iii) --Other sources--Deductions--Expenditure for earning income--Similar expenditure allowed in subsequent year--To be allowed-- Asst. CIT v. Jitender Kumar Gupta (Delhi) . . . 256
S. 112, prov. --Foreign institutional investor--Special provision for computation of capital gains from investment in securities--Capital loss on sale of securities--Eligibility to avail of benefit of indexation not sine qua non to apply for concessional rate of tax--Benefit of indexation not available--General provisions not applicable for computation of capital loss by foreign institutional investor--Circular No. 657, dated 30-8-1993-- Advantage Advisors Inc. v. Deputy Director of Income-tax (International Taxation) (Mumbai) . . . 235
S. 115AD --Foreign institutional investor--Special provision for computation of capital gains from investment in securities--Capital loss on sale of securities--Eligibility to avail of benefit of indexation not sine qua non to apply for concessional rate of tax--Benefit of indexation not available--General provisions not applicable for computation of capital loss by foreign institutional investor--Circular No. 657, dated 30-8-1993-- Advantage Advisors Inc. v. Deputy Director of Income-tax (International Taxation) (Mumbai) . . . 235
S. 214(1A) --Advance tax--Refund--Interest--Assessee entitled to receive interest under section 214(1A) on difference between advance tax and tax assessed under section 251 from the first day of assessment year till day of passing regular assessment under section 143(3)-- Deputy CIT v. Simbhaoli Sugar Mills Ltd. (Delhi) . . . 247
S. 244(1A) --Advance tax--Refund--Interest--Assessee entitled to interest from date of regular assessment till date of grant of refund on amount of prepaid tax found in excess of tax assessed under section 251 and further interest from date of payment of regular tax till date of grant of refund-- Deputy CIT v. Simbhaoli Sugar Mills Ltd. (Delhi) . . . 247
ITR VOL 329 PART 3 AND ITR (TRIB) VOL 6 PART 7
INCOME TAX REPORTS (ITR)
Volume 329 : Part 3 (Issue dated 13-12-2010)
Advance tax --Interest--Company--Assessment on book profits basis--No liability to pay advance tax--No interest leviable for default in payment of advance tax--Income-tax Act, 1961, ss. 115J, 115JA, 207, 208, 234B, 234C-- Binani Industries Ltd. v. CIT (Cal) . . . 323
Appeal to High Court --Powers of High Court--Finding of fact cannot normally be set aside--Income-tax Act, 1961, s. 260A-- CIT v. Forech India Ltd. (Delhi) . . . 336
----Powers of High Court--Point not raised before lower authorities cannot be considered by High Court--Income-tax Act, 1961, s. 260A-- CIT v. Chand Ratan Bagri (Delhi) . . . 356
Business expenditure --Capital or revenue expenditure--Lease rent paid to State Industrial Development Corporation for use of land for ninety-nine years--Registration of lease deed not relevant--Land not acquired by assessee--Payment made to carry on business--Lease rent deductible--Income-tax Act, 1961, s. 37-- Deputy CIT v. Sun Pharmaceuticals Ind. Ltd. (Guj) . . . 479
Capital gains --Computation of capital gains--Gains on transfer of intellectual property rights--Tribunal not justified in blindly applying B. C. Srinivasa Setty's case and concluding capital gains could not be computed--Matter remanded--Income-tax Act, 1961, ss. 45, 48-- CIT v. P. R. Seshadri (Karn) . . . 377
----Exemption--Investment of net consideration in residential house--Fact that land was owned by assessee's spouse and she had used construction for mortgage purposes--Not relevant--Finding that house had been constructed--Assessee entitled to benefit of section 54F--Income-tax Act, 1961, s. 54F-- CIT v. P. R. Seshadri (Karn) . . . 377
Capital or revenue expenditure --Fees paid to foreign company for designs and drawings and expenses on foreign technicians for training assessee's personnel--Expenditure for facilitating process of manufacture--Expenses incurred are revenue expenditure--Income-tax Act, 1961-- CIT v. Munjal Showa Ltd. (Delhi) . . . 449
Deduction of tax at source --Certificate for non-deduction--Assesssee claiming income was exempt under section 11--Amendment of section 2(15) w.e.f. 1-4-2009 not challenged--Union of India not impleaded as a party--Effect of amendment of section 2(15) could not be considered--Refusal to issue certificate for non-deduction of tax at source--Justified--Income-tax Act, 1961, ss. 2(15), 11, 197-- Infoparks Kerala v. Deputy CIT (Ker) . . . 404
Depreciation --Plant--Poultry sheds--Building specifically designed with a view to protecting birds from disease--Building designed proper and scientific feeding arrangement, proper water system, proper arrangement for collection of manure and droppings, proper arrangement for medication and vaccination--Building specifically designed to further the cause of manufacture or production--Is plant--Entitled to depreciation and investment allowance--Income-tax Act, 1961, s. 43(3)-- CIT v. Shivalik Hatcheries P. Ltd. (HP) . . . 432
----Poultry sheds, fencing, water and water tank--Entitled to extra shift allowance--Income-tax Act, 1961-- CIT v. Shivalik Hatcheries P. Ltd. (HP) . . . 432
Exemptions --Educational institution--Registered society running schools--Society granted exemption under section 10(23C) up to assessment year 2001-02--Law applicable--Effect of amendment of section 10(23C)--Condition regarding application of funds--Applicability of condition--Exemption already being granted could not be refused for assessment years 2002-03 to 2004-05--Income-tax Act, 1961, s. 10(23C)(vi)-- Digember Jain Society for Child Welfare v. Director General of Income-tax (Exemptions) (Delhi) . . . 459
Export --Special deduction under section 80HHC--Computation of export turnover--Freight and insurance not includible in export turnover--Income-tax Act, 1961, s. 80HHC-- CIT v. King Metal Works (Bom) . . . 426
----Special deduction under section 80HHC--Computation of special deduction--Meaning of profits of business--Entire sale consideration on transfer of DEPB credit assessable under section 28(iiid)--Income-tax Act, 1961, ss. 28, 80HHC-- CIT v. King Metal Works (Bom) . . . 426
Income from undisclosed sources --Additions to income on basis of admission by assessee and consideration of material on record--Deletion of addition without adequate consideration--Not valid--Matter remanded--Income-tax Act, 1961-- CIT v. Swastik India (Karn) . . . 473
Industrial undertaking --Special deduction under section 80-IA--Condition precedent--Manufacture of article--Meaning of "manufacture"--Conversion of limestone into limestone powder constitutes manufacture--Assessee entitled to special deduction under section 80-IA--Income-tax Act, 1961, s. 80-IA-- CIT v. Janak Raj Bansal (HP) . . . 417
----Special deduction under section 80-IB--Condition precedent--Manufacture of article--Meaning of manufacture--Process of making transformer core from cold rolled coils amounts to "manufacture"--Assessee entitled to special deduction under section 80-IB--Income-tax Act, 1961, s. 80-IB-- CIT v. Alfa Lamination (Guj) . . . 348
Industrial undertaking in backward area --Special deduction--Finding that industrial undertaking was situated in district notified as a backward area--Assessee entitled to special deduction under section 80HH--Notification No. S. O. 165(E), dated December 19, 1986--Income-tax Act, 1961, s. 80HH-- CIT v. Guffic Chem P. Ltd .(Karn) . . . 470
Interpretation of taxing statutes --Literal interpretation-- CIT v. King Metal Works (Bom) . . . 426
Loss --Short-term capital loss--Forfeiture of amount paid towards convertible warrants--Loss deductible as short-term capital loss--Income-tax Act, 1961-- CIT v. Chand Ratan Bagri (Delhi) . . . 356
Non-resident --Income deemed to accrue or arise in India--Royalty--Agreement between Indian company and foreign company for supply of plant know-how and product know-how--Agreement concluded and data delivered abroad--Purchase of drawings and documents abroad--Transaction was one of sale--No income could be deemed to accrue or arise to non-resident--Income-tax Act, 1961, s. 9(1)(vi)-- CIT v. Maggronic Devices P. Ltd. (HP) . . . 442
Penalty --Concealment of income--Search and seizure--Additional income offered by assessee and assessed on estimate--Levy of penalty not permissible without detailed discussion of documents and explanation for offer of additional income--Income-tax Act, 1961, s. 271(1)(c)-- CIT v. Suresh Chand Bansal (Cal) . . . 330
Precedent --Effect of decision of Supreme Court in Lucky Minmat v. CIT [2000] 245 ITR 830-- CIT v. Janak Raj Bansal (HP) . . . 417
----Effect of decisions of Supreme Court in American Hotel and Lodging Association Educational Institute v. CBDT [2008] 301 ITR 86 and Aditanar Educational Institution v. Additional CIT [1997] 224 ITR 310-- Digember Jain Society for Child Welfare v. Director General of Income-tax (Exemptions) (Delhi) . . . 459
----Supreme Court--One-line order of Supreme Court dismissing appeal after it is admitted and heard--Binding--Constitution of India, arts. 136, 141-- Binani Industries Ltd. v. CIT (Cal) . . . 323
Reassessment --Limitation--Law applicable--Effect of amendment of section 143 w.e.f. 1-4-1989--Return filed on 24-1-2003 in response to notice under section 148--No notice issued under section 143(2) but assessee having opportunity to be heard--Order of reassessment passed on 26-3-2004--Barred by limitation--Income-tax Act, 1961, ss. 143, 148--Circular No. 549 dated 31-10-1989-- CIT v. Deep Baruah (Gauhati) . . . 362
----Notice--Notice beyond four years--Condition precedent--Failure to disclose material facts necessary for assessment--Facts relating to sale of shares disclosed and assessment after enquiry--Notice after four years on ground that transaction not genuine--Notice not valid--Income-tax Act, 1961, ss. 147, 148-- Smt. Raj Rani Gulati v. Union of India (All) . . . 370
----Notice--Oral direction not to proceed with enquiry--Enquiry without affording an opportunity to assessee--Assessment order set aside--Matter remanded--Income-tax Act, 1961, ss. 147, 148-- Vira Properties (Madras) Pvt. Ltd. v. Asst. CIT (Mad) . . . 389
----Writ--Writ court cannot consider facts--Return submitted by assessee--Survey showing undisclosed income--Notice of reassessment was valid--Income-tax Act, 1961, ss. 147, 148--Constitution of India, art. 226-- Dr. Lata Chouhan v. ITO (MP) . . . 400
Rectification of mistake --Mistake apparent from record--Search and seizure--Refund--Interest on refund--Assessee entitled to interest--Assessee to seek rectification --Income-tax Act, 1961, ss. 132, 154-- CIT v. Sri Krishna Saraf (Mad) . . . 342
Search and seizure --Addition on account of documents found at premises of a relative of assessee--Investment in purchase of car and interest--Tribunal remanding the matter to Assessing Officer--Findings of fact--Income-tax Act, 1961, s. 158BFA(1)-- CIT v. Harjit Singh (P&H) . . . 422
----Penalty--No concealment of income--No failure to furnish inaccurate particulars of income--Assessing authority not justified in levying penalty--Income-tax Act, 1961, s. 271(1)(c)-- CIT v. Sri Krishna Saraf (Mad) . . . 342
----Search at premises of third person--Seizure and recovery from safe deposits belonging to assessee--Issue of notice under section 142(1) after search revealing search having nexus with assessee--Assessment under section 143(3)--Assessee entitled to seek necessary relief under section 132B(4)--Income-tax Act, 1961, ss. 132, 132B(4), 143-- CIT v. Sri Krishna Saraf (Mad) . . . 342
Undisclosed stock --Books of account incomplete at time of survey--Finding of Commissioner (Appeals) and Tribunal that stock related to import purchases verifiable from customs records--Accounts reconciled later--Finding of fact--Income-tax Act, 1961-- CIT v. Forech India Ltd. (Delhi) . . . 336
Unexplained investment --Assessee purchasing demand drafts and remitting to a party--No proof that sum represented bad debt or business loss--Addition as unexplained investment--Justified--Income-tax Act, 1961, s. 69-- Satish Kumar v. CIT (P&H) . . . 396
Wealth-tax --Company--Exemption--Asset used for business--Land used for internal roads and playground--Not entitled to exemption--Wealth-tax Act, 1957--Finance Act, 1983, s. 40(3)(vi)-- Motwane Manufacturing Co. Pvt. Ltd . v. CWT (Bom) . . . 413
Art. 136 --Precedent--Supreme Court--One-line order of Supreme Court dismissing appeal after it is admitted and heard--Binding-- Binani Industries Ltd. v. CIT (Cal) . . . 323
Art. 141 --Precedent--Supreme Court--One-line order of Supreme Court dismissing appeal after it is admitted and heard--Binding-- Binani Industries Ltd. v. CIT (Cal) . . . 323
S. 40(3)(vi) --Wealth-tax--Company--Exemption--Asset used for business--Land used for internal roads and playground--Not entitled to exemption-- Motwane Manufacturing Co. Pvt. Ltd . v. CWT (Bom) . . . 413
S. 2(15) --Deduction of tax at source--Certificate for non-deduction--Assesssee claiming income was exempt under section 11--Amendment of section 2(15) w.e.f. 1-4-2009 not challenged--Union of India not impleaded as a party--Effect of amendment of section 2(15) could not be considered--Refusal to issue certificate for non-deduction of tax at source--Justified-- Infoparks Kerala v. Deputy CIT (Ker) . . . 404
S. 9(1)(vi) --Non-resident--Income deemed to accrue or arise in India--Royalty--Agreement between Indian company and foreign company for supply of plant know-how and product know-how--Agreement concluded and data delivered abroad--Purchase of drawings and documents abroad--Transaction was one of sale--No income could be deemed to accrue or arise to non-resident-- CIT v. Maggronic Devices P. Ltd. (HP) . . . 442
S. 10(23C)(vi) --Exemptions--Educational institution--Registered society running schools--Society granted exemption under section 10(23C) up to assessment year 2001-02--Law applicable--Effect of amendment of section 10(23C)--Condition regarding application of funds--Applicability of condition--Exemption already being granted could not be refused for assessment years 2002-03 to 2004-05-- Digember Jain Society for Child Welfare v. Director General of Income-tax (Exemptions) (Delhi) . . . 459
S. 11 --Deduction of tax at source--Certificate for non-deduction--Assesssee claiming income was exempt under section 11--Amendment of section 2(15) w.e.f. 1-4-2009 not challenged--Union of India not impleaded as a party--Effect of amendment of section 2(15) could not be considered--Refusal to issue certificate for non-deduction of tax at source--Justified-- Infoparks Kerala v. Deputy CIT (Ker) . . . 404
S. 28 --Export--Special deduction under section 80HHC--Computation of special deduction--Meaning of profits of business--Entire sale consideration on transfer of DEPB credit assessable under section 28(iiid)-- CIT v. King Metal Works (Bom) . . . 426
S. 37 --Business expenditure--Capital or revenue expenditure--Lease rent paid to State Industrial Development Corporation for use of land for ninety nine years--Registration of lease deed not relevant--Land not acquired by assessee--Payment made to carry on business--Lease rent deductible-- Deputy CIT v. Sun Pharmaceuticals Ind. Ltd. (Guj) . . . 479
S. 43(3) --Depreciation--Plant--Poultry sheds--Building specifically designed with a view to protecting birds from disease--Building designed proper and scientific feeding arrangement, proper water system, proper arrangement for collection of manure and droppings, proper arrangement for medication and vaccination--Building specifically designed to further the cause of manufacture or production--Is plant--Entitled to depreciation and investment allowance-- CIT v. Shivalik Hatcheries P. Ltd. (HP) . . . 432
S. 45 --Capital gains--Computation of capital gains--Gains on transfer of intellectual property rights--Tribunal not justified in blindly applying B. C. Srinivasa Setty's case and concluding capital gains could not be computed--Matter remanded-- CIT v. P. R. Seshadri (Karn) . . . 377
S. 48 --Capital gains--Computation of capital gains--Gains on transfer of intellectual property rights--Tribunal not justified in blindly applying B. C. Srinivasa Setty's case and concluding capital gains could not be computed--Matter remanded-- CIT v. P. R. Seshadri (Karn) . . . 377
S. 54F --Capital gains--Exemption--Investment of net consideration in residential house--Fact that land was owned by assessee's spouse and she had used construction for mortgage purposes--Not relevant--Finding that house had been constructed--Assessee entitled to benefit of section 54F-- CIT v. P. R. Seshadri (Karn) . . . 377
S. 69 --Unexplained investment--Assessee purchasing demand drafts and remitting to a party--No proof that sum represented bad debt or business loss--Addition as unexplained investment--Justified-- Satish Kumar v. CIT (P&H) . . . 396
S. 80HH --Industrial undertaking in backward area--Special deduction--Finding that industrial undertaking was situated in district notified as a backward area--Assessee entitled to special deduction under section 80HH--Notification No. S.O. 165(E), dated December 19, 1986-- CIT v. Guffic Chem P. Ltd . (Karn) . . . 470
S. 80HHC --Export--Special deduction under section 80HHC--Computation of export turnover--Freight and insurance not includible in export turnover-- CIT v. King Metal Works (Bom) . . . 426
----Export--Special deduction under section 80HHC--Computation of special deduction--Meaning of profits of business--Entire sale consideration on transfer of DEPB credit assessable under section 28(iiid)-- CIT v. King Metal Works (Bom) . . . 426
S. 80-IA --Industrial undertaking--Special deduction under section 80-IA--Condition precedent--Manufacture of article--Meaning of "manufacture"--Conversion of limestone into limestone powder constitutes manufacture--Assessee entitled to special deduction under section 80-IA-- CIT v. Janak Raj Bansal (HP) . . . 417
S. 80-IB --Industrial undertaking--Special deduction under section 80-IB--Condition precedent--Manufacture of article--Meaning of manufacture--Process of making transformer core from cold rolled coils amounts to "manufacture"--Assessee entitled to special deduction under section 80-IB-- CIT v. Alfa Lamination (Guj) . . . 348
S. 115J --Advance tax--Interest--Company--Assessment on book profits basis--No liability to pay advance tax--No interest leviable for default in payment of advance tax-- Binani Industries Ltd. v. CIT (Cal) . . . 323
S. 115JA --Advance tax--Interest--Company--Assessment on book profits basis--No liability to pay advance tax--No interest leviable for default in payment of advance tax-- Binani Industries Ltd. v. CIT (Cal) . . . 323
S. 132 --Rectification of mistake--Mistake apparent from record--Search and seizure--Refund--Interest on refund--Assessee entitled to interest--Assessee to seek rectification-- CIT v. Sri Krishna Saraf (Mad) . . . 342
----Search and seizure--Search at premises of third person--Seizure and recovery from safe deposits belonging to assessee--Issue of notice under section 142(1) after search revealing search having nexus with assessee--Assessment under section 143(3)--Assessee entitled to seek necessary relief under section 132B(4)-- CIT v. Sri Krishna Saraf (Mad) . . . 342
S. 132B(4) --Search and seizure--Search at premises of third person--Seizure and recovery from safe deposits belonging to assessee--Issue of notice under section 142(1) after search revealing search having nexus with assessee--Assessment under section 143(3)--Assessee entitled to seek necessary relief under section 132B(4)-- CIT v. Sri Krishna Saraf (Mad) . . . 342
S. 143 --Reassessment--Limitation--Law applicable--Effect of amendment of section 143 w.e.f. 1-4-1989--Return filed on 24-1-2003 in response to notice under section 148--No notice issued under section 143(2) but assessee having opportunity to be heard--Order of reassessment passed on 26-3-2004--Barred by limitation--Circular No. 549 dated 31-10-1989-- CIT v. Deep Baruah (Gauhati) . . . 362
----Reassessment--Limitation--Law applicable--Effect of amendment of section 143 w.e.f. 1-4-1989--Return filed on 24-1-2003 in response to notice under section 148--No notice issued under section 143(2) but assessee having opportunity to be heard--Order of reassessment passed on 26-3-2004--Barred by limitation--Circular No. 549 dated 31-10-1989-- CIT v. Deep Baruah (Gauhati) . . . 362
----Search and seizure--Search at premises of third person--Seizure and recovery from safe deposits belonging to assessee--Issue of notice under section 142(1) after search revealing search having nexus with assessee--Assessment under section 143(3)--Assessee entitled to seek necessary relief under section 132B(4)-- CIT v. Sri Krishna Saraf (Mad) . . . 342
S. 147 --Constitution of India, art. 226--Reassessment--Writ--Writ court cannot consider facts--Return submitted by assessee--Survey showing undisclosed income--Notice of reassessment was valid-- Dr. Lata Chouhan v. ITO (MP) . . . 400
----Reassessment--Notice--Notice beyond four years--Condition precedent--Failure to disclose material facts necessary for assessment--Facts relating to sale of shares disclosed and assessment after enquiry--Notice after four years on ground that transaction not genuine--Notice not valid-- Smt. Raj Rani Gulati v. Union of India (All) . . . 370
----Reassessment--Notice--Oral direction not to proceed with enquiry--Enquiry without affording an opportunity to assessee--Assessment order set aside--Matter remanded-- Vira Properties (Madras) Pvt. Ltd. v. Asst. CIT (Mad) . . . 389
S. 148 --Constitution of India, art. 226--Reassessment--Writ--Writ court cannot consider facts--Return submitted by assessee--Survey showing undisclosed income--Notice of reassessment was valid-- Dr. Lata Chouhan v. ITO (MP) . . . 400
----Reassessment--Notice--Notice beyond four years--Condition precedent--Failure to disclose material facts necessary for assessment--Facts relating to sale of shares disclosed and assessment after enquiry--Notice after four years on ground that transaction not genuine--Notice not valid-- Smt. Raj Rani Gulati v. Union of India (All) . . . 370
----Reassessment--Notice--Oral direction not to proceed with enquiry--Enquiry without affording an opportunity to assessee--Assessment order set aside--Matter remanded-- Vira Properties (Madras) Pvt. Ltd. v. Asst. CIT (Mad) . . . 389
S. 154 --Rectification of mistake--Mistake apparent from record--Search and seizure--Refund--Interest on refund--Assessee entitled to interest--Assessee to seek rectification-- CIT v. Sri Krishna Saraf (Mad) . . . 342
S. 158BFA(1) --Search and seizure--Addition on account of documents found at premises of a relative of assessee--Investment in purchase of car and interest--Tribunal remanding the matter to Assessing Officer--Findings of fact-- CIT v. Harjit Singh (P&H) . . . 422
S. 197 --Deduction of tax at source--Certificate for non-deduction--Assesssee claiming income was exempt under section 11--Amendment of section 2(15) w.e.f. 1-4-2009 not challenged--Union of India not impleaded as a party--Effect of amendment of section 2(15) could not be considered--Refusal to issue certificate for non-deduction of tax at source--Justified-- Infoparks Kerala v. Deputy CIT (Ker) . . . 404
S. 207 --Advance tax--Interest--Company--Assessment on book profits basis--No liability to pay advance tax--No interest leviable for default in payment of advance tax-- Binani Industries Ltd. v. CIT (Cal) . . . 323
S. 208 --Advance tax--Interest--Company--Assessment on book profits basis--No liability to pay advance tax--No interest leviable for default in payment of advance tax-- Binani Industries Ltd. v. CIT (Cal) . . . 323
S. 234B --Advance tax--Interest--Company--Assessment on book profits basis--No liability to pay advance tax--No interest leviable for default in payment of advance tax-- Binani Industries Ltd. v. CIT (Cal) . . . 323
S. 234C --Advance tax--Interest--Company--Assessment on book profits basis--No liability to pay advance tax--No interest leviable for default in payment of advance tax-- Binani Industries Ltd. v. CIT (Cal) . . . 323
S. 260A --Appeal to High Court--Powers of High Court--Finding of fact cannot normally be set aside-- CIT v. Forech India Ltd. (Delhi) . . . 336
----Appeal to High Court--Powers of High Court--Point not raised before lower authorities cannot be considered by High Court-- CIT v. Chand Ratan Bagri (Delhi) . . . 356
S. 271(1)(c) --Penalty--Concealment of income--Search and seizure--Additional income offered by assessee and assessed on estimate--Levy of penalty not permissible without detailed discussion of documents and explanation for offer of additional income-- CIT v. Suresh Chand Bansal (Cal) . . . 330
----Search and seizure--Penalty--No concealment of income--No failure to furnish inaccurate particulars of income--Assessing authority not justified in levying penalty-- CIT v. Sri Krishna Saraf (Mad) . . . 342
Advance tax --Interest--Entire income of non-resident liable to deduction of tax at source--No interest chargeable--Income-tax Act, 1961 , ss. 195, 234B-- Rolls Royce Industrial Power Ltd. v. Asst. CIT (Delhi) . . . 722
Business expenditure --Assessee marketing fertiliser--Insurance premium created for welfare of farmers who purchased fertiliser--Has nexus with assessee's business--Allowable--Income-tax Act, 1961, s. 37-- Asst. CIT v. KRIBHCO (Delhi) . . . 686
----Prior period expenses--Expenses allowed in original assessment--No reasons given for disallowance--Disallowance to be deleted--Income-tax Act, 1961, s. 37-- Deputy CIT v. Pasupati Spinning and Weaving Mills Ltd. (Delhi) . . . 689
Business income --Technical services--Carrying out work giving rise to business income--Not a case of making available technical knowledge--Income-tax Act, 1961, s. 9(1)(vii), Expln. 2-- Rolls Royce Industrial Power Ltd. v. Asst. CIT (Delhi) . . . 722
Capital gains --Depreciable assets--Sale of asset forming part of block--If after crediting sale proceeds written down value of block reduced not to be taxed separately--If written down value of block exceeded profit to be taxed as short-term capital gains --Income-tax Act, 1961, s. 50-- Rolls Royce Industrial Power Ltd. v. Asst. CIT (Delhi) . . . 722
Capital or revenue receipt --Foreign exchange fluctuation--Profit or loss arising out of capital asset is capital receipt--If arising out of trading business, trading receipt-- Rolls Royce Industrial Power Ltd. v. Asst. CIT (Delhi) . . . 722
Double taxation relief --Assessee having only current account in India--Interest arising out of bank accounts in U. K.--To be excluded--Double Taxation Avoidance Agreement between India and the U. K., art. 12(2)-- Rolls Royce Industrial Power Ltd. v. Asst. CIT (Delhi) . . . 722
Income --Expenditure incurred in relation to income not forming part of total income --Disallowance--Deduction of income derived by co-operative society under section 80P--Not a case of "exempt income" but of "deduction from income"--Section 14A not applicable--Income-tax Act, 1961, ss. 10, 14A, 80P-- Asst. CIT v. KRIBHCO (Delhi) . . . 686
Income-tax --General principles--Corporate entity is single entity--Assessee not bound to file tax audit reports for each separate business--Income-tax Act, 1961, s. 44AB-- Rolls Royce Industrial Power Ltd. v. Asst. CIT (Delhi) . . . 722
Income-tax Department --Taking view that contract not one for rendering service for purpose of certificate of nil deduction of tax at source--Not entitled to take contrary stand in assessment where no change in facts-- Rolls Royce Industrial Power Ltd. v. Asst. CIT (Delhi) . . . 722
Non-resident --Agreement for erection, commissioning, supervision, operation and maintenance of power plants--Activities carried on through permanent establishment--Operation involving huge costs--No technical knowledge made available nor activity ancillary or subsidiary to enjoyment of right, property or information--Income not fees for technical services or royalty but business income--Not to be taxed on gross basis--Deduction of expenses of permanent establishment allowable--Assessee protected by "non-discrimination" clause in Double Taxation Avoidance Agreement--Assessee entitled to set-off of both unabsorbed depreciation and unabsorbed loss--Income-tax Act, 1961, ss. 9(1)(vii), Expln. 2, 44AB, 44D, 90(2), 115A--Double Taxation Avoidance Agreement between India and the U. K., arts. 7, 12(2), 13, 26--Circular No. 202 dated July 5, 1976-- Rolls Royce Industrial Power Ltd. v. Asst. CIT (Delhi) . . . 722
Reassessment --Income escaping assessment--Reassessment after four years--General principles--Income-tax Act, 1961, s. 147, prov.-- Rolls Royce Industrial Power Ltd. v. Asst. CIT (Delhi) . . . 722
----No claim for special deduction under section 80HHC in original assessment because of absence of business income--Reassessment withdrawing deductions--Business income arising as a consequence--Assessee entitled to claim special deduction under section 80HHC in reassessment proceedings--Income-tax Act, 1961, ss. 80HHC, 147-- ITO v. Tamilnadu Minerals Ltd. (Chennai) . . . 698
----Validity--Reopening on ground objection raised by audit--Assessing Officer satisfied with details furnished by assessee in original assessment--Reassessment on change of opinion--Not valid--Income-tax Act, 1961, ss. 143(3), 147-- Deputy CIT v. Pasupati Spinning and Weaving Mills Ltd. (Delhi) . . . 689
Refund --Interest on excess refund--Chargeable from assessment year 2004-05--Income-tax Act, 1961, s. 234D-- Rolls Royce Industrial Power Ltd. v. Asst. CIT (Delhi) . . . 722
Art. 12(2) --Double taxation relief--Assessee having only current account in India--Interest arising out of bank accounts in U. K.--To be excluded-- Rolls Royce Industrial Power Ltd. v. Asst. CIT (Delhi) . . . 722
Arts. 7, 12(2), 13, 26 --Non-resident--Agreement for erection, commissioning, supervision, operation and maintenance of power plants--Activities carried on through permanent establishment--Operation involving huge costs--No technical knowledge made available nor activity ancillary or subsidiary to enjoyment of right, property or information--Income not fees for technical services or royalty but business income--Not to be taxed on gross basis--Deduction of expenses of permanent establishment allowable--Assessee protected by "non-discrimination" clause in Double Taxation Avoidance Agreement--Assessee entitled to set-off of both unabsorbed depreciation and unabsorbed loss--Circular No. 202 dated July 5, 1976-- Rolls Royce Industrial Power Ltd. v. Asst. CIT (Delhi) . . . 722
S. 9(1)(vii), Expln. 2 --Business income--Technical services--Carrying out work giving rise to business income--Not a case of making available technical knowledge-- Rolls Royce Industrial Power Ltd. v. Asst. CIT (Delhi) . . . 722
----Non-resident--Agreement for erection, commissioning, supervision, operation and maintenance of power plants--Activities carried on through permanent establishment--Operation involving huge costs--No technical knowledge made available nor activity ancillary or subsidiary to enjoyment of right, property or information--Income not fees for technical services or royalty but business income--Not to be taxed on gross basis--Deduction of expenses of permanent establishment allowable--Assessee protected by "non-discrimination" clause in Double Taxation Avoidance Agreement--Assessee entitled to set-off of both unabsorbed depreciation and unabsorbed loss--Circular No. 202 dated July 5, 1976-- Rolls Royce Industrial Power Ltd. v. Asst. CIT (Delhi) . . . 722
S. 10 --Income--Expenditure incurred in relation to income not forming part of total income --Disallowance--Deduction of income derived by co-operative society under section 80P--Not a case of "exempt income" but of "deduction from income"--Section 14A not applicable-- Asst. CIT v. KRIBHCO (Delhi) . . . 686
S. 14A --Income--Expenditure incurred in relation to income not forming part of total income--Disallowance--Deduction of income derived by co-operative society under section 80P--Not a case of "exempt income" but of "deduction from income"--Section 14A not applicable-- Asst. CIT v. KRIBHCO (Delhi) . . . 686
S. 37 --Business expenditure--Assessee marketing fertiliser--Insurance premium created for welfare of farmers who purchased fertiliser--Has nexus with assessee's business--Allowable-- Asst. CIT v. KRIBHCO (Delhi) . . . 686
----Business expenditure--Prior period expenses--Expenses allowed in original assessment--No reasons given for disallowance--Disallowance to be deleted-- Deputy CIT v. Pasupati Spinning and Weaving Mills Ltd. (Delhi) . . . 689
S. 44AB --Income-tax--General principles--Corporate entity is single entity--Assessee not bound to file tax audit reports for each separate business-- Rolls Royce Industrial Power Ltd. v. Asst. CIT (Delhi) . . . 722
----Non-resident--Agreement for erection, commissioning, supervision, operation and maintenance of power plants--Activities carried on through permanent establishment--Operation involving huge costs--No technical knowledge made available nor activity ancillary or subsidiary to enjoyment of right, property or information--Income not fees for technical services or royalty but business income--Not to be taxed on gross basis--Deduction of expenses of permanent establishment allowable--Assessee protected by "non-discrimination" clause in Double Taxation Avoidance Agreement--Assessee entitled to set-off of both unabsorbed depreciation and unabsorbed loss--Circular No. 202 dated July 5, 1976-- Rolls Royce Industrial Power Ltd. v. Asst. CIT (Delhi) . . . 722
S. 44D --Non-resident--Agreement for erection, commissioning, supervision, operation and maintenance of power plants--Activities carried on through permanent establishment--Operation involving huge costs--No technical knowledge made available nor activity ancillary or subsidiary to enjoyment of right, property or information--Income not fees for technical services or royalty but business income--Not to be taxed on gross basis--Deduction of expenses of permanent establishment allowable--Assessee protected by "non-discrimination" clause in Double Taxation Avoidance Agreement--Assessee entitled to set-off of both unabsorbed depreciation and unabsorbed loss--Circular No. 202 dated July 5, 1976-- Rolls Royce Industrial Power Ltd. v. Asst. CIT (Delhi) . . . 722
S. 50 --Capital gains--Depreciable assets--Sale of asset forming part of block--If after crediting sale proceeds written down value of block reduced not to be taxed separately--If written down value of block exceeded profit to be taxed as short-term capital gains -- Rolls Royce Industrial Power Ltd. v. Asst. CIT (Delhi) . . . 722
S. 80HHC --Reassessment--No claim for special deduction under section 80HHC in original assessment because of absence of business income--Reassessment withdrawing deductions--Business income arising as a consequence--Assessee entitled to claim special deduction under section 80HHC in reassessment proceedings-- ITO v. Tamilnadu Minerals Ltd. (Chennai) . . . 698
S. 80P --Income--Expenditure incurred in relation to income not forming part of total income--Disallowance--Deduction of income derived by co-operative society under section 80P--Not a case of "exempt income" but of "deduction from income"--Section 14A not applicable-- Asst. CIT v. KRIBHCO (Delhi) . . . 686
S. 90(2) --Non-resident--Agreement for erection, commissioning, supervision, operation and maintenance of power plants--Activities carried on through permanent establishment--Operation involving huge costs--No technical knowledge made available nor activity ancillary or subsidiary to enjoyment of right, property or information--Income not fees for technical services or royalty but business income--Not to be taxed on gross basis--Deduction of expenses of permanent establishment allowable--Assessee protected by "non-discrimination" clause in Double Taxation Avoidance Agreement--Assessee entitled to set-off of both unabsorbed depreciation and unabsorbed loss--Circular No. 202 dated July 5, 1976-- Rolls Royce Industrial Power Ltd. v. Asst. CIT (Delhi) . . . 722
S. 115A --Non-resident--Agreement for erection, commissioning, supervision, operation and maintenance of power plants--Activities carried on through permanent establishment--Operation involving huge costs--No technical knowledge made available nor activity ancillary or subsidiary to enjoyment of right, property or information--Income not fees for technical services or royalty but business income--Not to be taxed on gross basis--Deduction of expenses of permanent establishment allowable--Assessee protected by "non-discrimination" clause in Double Taxation Avoidance Agreement--Assessee entitled to set-off of both unabsorbed depreciation and unabsorbed loss--Circular No. 202 dated July 5, 1976-- Rolls Royce Industrial Power Ltd. v. Asst. CIT (Delhi) . . . 722
S. 143(3) --Reassessment--Validity--Reopening on ground objection raised by audit--Assessing Officer satisfied with details furnished by assessee in original assessment--Reassessment on change of opinion--Not valid-- Deputy CIT v. Pasupati Spinning and Weaving Mills Ltd. (Delhi) . . . 689
S. 147 --Reassessment--No claim for special deduction under section 80HHC in original assessment because of absence of business income--Reassessment withdrawing deductions--Business income arising as a consequence--Assessee entitled to claim special deduction under section 80HHC in reassessment proceedings-- ITO v. Tamilnadu Minerals Ltd. (Chennai) . . . 698
----Reassessment--Validity--Reopening on ground objection raised by audit--Assessing Officer satisfied with details furnished by assessee in original assessment--Reassessment on change of opinion--Not valid-- Deputy CIT v. Pasupati Spinning and Weaving Mills Ltd. (Delhi) . . . 689
S. 147, prov. --Reassessment--Income escaping assessment--Reassessment after four years--General principles-- Rolls Royce Industrial Power Ltd. v. Asst. CIT (Delhi) . . . 722
S. 195 --Advance tax--Interest--Entire income of non-resident liable to deduction of tax at source--No interest chargeable-- Rolls Royce Industrial Power Ltd. v. Asst. CIT (Delhi) . . . 722
S. 234B --Advance tax--Interest--Entire income of non-resident liable to deduction of tax at source--No interest chargeable-- Rolls Royce Industrial Power Ltd. v. Asst. CIT (Delhi) . . . 722
S. 234D --Refund--Interest on excess refund--Chargeable from assessment year 2004-05-- Rolls Royce Industrial Power Ltd. v. Asst. CIT (Delhi) . . . 722
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