INCOME TAX REPORTS (ITR)
Volume 324 : Part 4 (Issue dated 28-6-2010)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Advance ruling --Binding nature--Income-tax Act, 1961, s. 245S-- Prudential Assurance Company Ltd. v. Director of Income-tax (Bom) . . . 381
Appeal to High Court --Delay in filing appeal--Application for condonation of delay--Application cannot be made under section 5 of Limitation Act--Income-tax Act, 1961, s. 260A--Limitation Act, 1963, s. 5-- Shergarh Co-op. L and C Society Ltd . v. ITO (P&H) . . . 408
Business expenditure --Disallowance--Payment otherwise than by crossed cheque or crossed demand draft of sum exceeding prescribed limit--Payments by banker's cheques, pay orders and call deposit receipts issued in favour of public sector undertaking--Instruments within definition of bill of exchange--Payments found to be genuine--Payments could not be disallowed--Negotiable Instruments Act, 1881, ss. 5, 6--Income-tax Rules, 1962, r. 6DD(d)(iv)--Income-tax Act, 1961, s. 40A(3)-- CIT v. Vijay Kumar Goel (Chhattisgarh) . . . 376
Central Board of Direct Taxes --Power to issue instructions--Circular stating that failure to deduct tax at source under section 194J would necessarily attract penalty--Interference with discretion of authority--To that extent invalid--Income-tax Act, 1961, ss. 119, 194J, 271C, 273B--CBDT Circular No. 8 of 2009 dated November 24, 2009-- Dedicated Health Care Services TPA (India) Pvt. Ltd. v. Asst. CIT (Bom) . . . 345
Company --Book profit--Depreciation--Assessing Officer adopting straight line method--Tribunal allowing WDV method adopted by assessee--Commissioner (Appeals) for subsequent assessment year directing Assessing Officer to exclude depreciation for determination of book profits--Order attaining finality as no appeal filed--Principle of consistency applies--Income-tax Act, 1961, s. 115J-- CIT v. Prakash Industries Ltd . (P&H) . . . 391
Deduction of tax at source --Liability to deduct tax at source--Fees for professional services--Third party administrator licensed by insurance authority providing cashless service through network hospitals and settlement or reimbursement of claims--Insurance companies entering into service level agreements for settling claims--Insurance companies depositing certain amounts available to TPA--TPA liable to deduct tax on amounts paid to hospitals--Income-tax Act, 1961, s. 194J-- Medi Assist India TPA P. Ltd. v. Deputy CIT (TDS) (Karn) . . . 356
----Professional services--Scope of expression--Third party administrator providing services to holders of health insurance policies--Payments to hospitals--Are payments for professional services--Liable to tax deduction at source--Income-tax Act, 1961, s. 194J--CBDT Circular No. 8 of 2009 dated November 24, 2009 (319 ITR (St.) 22)-- Dedicated Health Care Services TPA (India) Pvt. Ltd. v. Asst. CIT (Bom) . . . 345
Income from undisclosed sources --Excess stock of diamonds found owing to difference between closing stock as shown by assessee and as estimated by Commissioner for earlier year--Difference merely in rate adopted by Commissioner for valuation--Finding that additions not warranted and assessee actually declared higher figure of closing stock and hence higher profit--Shortage of stocks of silver, silver moulds and precious stones--Finding that Commissioner did not consider relevant material--Findings of fact-- CIT v. Lalsons Enterprises (Delhi) . . . 426
Industrial undertaking --Special deduction under section 80-IB allowed after examining facts--Commissioner could not withdraw special deduction in revision proceedings--Income-tax Act, 1961, ss. 80-IB, 263-- CIT v. Deepak Mittal (P&H) . . . 411
Interest on borrowed capital --Assessee advancing interest free funds to sister concern from borrowed funds--Tribunal disallowing since no case of commercial expediency made out--Findings of fact--Income-tax Act, 1961, s. 36(1)(iii)-- Punjab Stainless Steel Inds. v. CIT (Delhi) . . . 396
----Disallowance on ground of diversion of funds to sister concern--Finding of mutual advances between assessee and sister concern in course of business and no interest charged by either party--Interest paid to bank not to be disallowed--Income-tax Act, 1961, s. 36(1)(iii)-- CIT v. Lalsons Enterprises (Delhi) . . . 426
Non-resident --Deduction of tax at source--Firm function services--Assessee applying for nil tax withholding certificate in respect of payments received for firm function services rendered to Indian branches--Orders passed under section 264 by Commissioner and under section 197 by Assessing Officer specifying tax withholding rates for other years--Assessing Officer without valid reasons deviating from position adopted by Commissioner--Certificate to be issued under section 197(1)--Income-tax Act, 1961, s. 197(1)-- McKinsey and Company Inc. v. Union of India (Bom) . . . 367
Reassessment --Grounds for reassessment--Notice--Investment in construction of building--Effect of section 142A--Reference to Departmental Valuer valid--Reassessment proceedings on basis of report of Departmental Valuer--Valid--Income-tax Act, 1961, ss. 142A, 147, 148-- Sunder Carpet Industries v. ITO (All) . . . 417
----Notice--Valuation of stock--Valuation by Revenue in earlier years based on provisional accounts in spite of availability of final audited accounts--Mode of valuation could not be changed in relevant assessment year--Income-tax Act, 1961, ss. 147, 148-- CIT v. Punjab State Warehousing Corporation (P&H) . . . 406
----Notice--Writ--High Court can consider whether there was material for belief that income had escaped assessment--Sufficiency of material cannot be considered--Income-tax Act, 1961, ss. 147, 148--Constitution of India, art. 226-- Sunder Carpet Industries v. ITO (All) . . . 417
Revision --Commissioner--Erroneous and prejudicial to the interests of the Revenue--Assessing Officer following a binding ruling of Authority for Advance Rulings in assessee's own case--Invocation of jurisdiction under section 263 on basis of ruling in another case--Improper--Income-tax Act, 1961, ss. 245S, 263-- Prudential Assurance Company Ltd. v. Director of Income-tax (Bom) . . . 381
----Powers of Commissioner--Commissioner cannot reappraise evidence and record a different finding on the same facts--Income-tax Act, 1961, s. 263-- CIT v. Deepak Mittal (P&H) . . . 411
Search and seizure --Writ petition for release of gold jewellery--Jewellery sold for recovery of tax dues--Claim made after ten years--Writ petition dismissed--Income-tax Act, 1961, s. 132--Constitution of India, art 226-- Smt. Krishna Devi v. Chief CIT (P&H) . . . 415
Undisclosed income --Loan transactions--Genuineness of transactions--Tribunal finding genuineness not established--Finding of fact--Additions on account of undisclosed income justified--Income-tax Act, 1961, s. 68-- Toby Consultants P. Ltd. v. CIT (Delhi) . . . 338
Words and phrases --"Professional services"-- Dedicated Health Care Services TPA (India) Pvt. Ltd. v. Asst. CIT (Bom) . . . 345
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Art. 226 --Reassessment--Notice--Writ--High Court can consider whether there was material for belief that income had escaped assessment--Sufficiency of material cannot be considered-- Sunder Carpet Industries v. ITO (All) . . . 417
----Search and seizure--Writ petition for release of gold jewellery--Jewellery sold for recovery of tax dues--Claim made after ten years--Writ petition dismissed-- Smt. Krishna Devi v. Chief CIT (P&H) . . . 415
S. 36(1)(iii) --Interest on borrowed capital--Assessee advancing interest free funds to sister concern from borrowed funds--Tribunal disallowing since no case of commercial expediency made out--Findings of fact-- Punjab Stainless Steel Inds. v. CIT (Delhi) . . . 396
----Interest on borrowed capital--Disallowance on ground of diversion of funds to sister concern--Finding of mutual advances between assessee and sister concern in course of business and no interest charged by either party--Interest paid to bank not to be disallowed-- CIT v. Lalsons Enterprises (Delhi) . . . 426
S. 40A(3) --Business expenditure--Disallowance--Payment otherwise than by crossed cheque or crossed demand draft of sum exceeding prescribed limit--Payments by banker's cheques, pay orders and call deposit receipts issued in favour of public sector undertaking--Instruments within definition of bill of exchange--Payments found to be genuine--Payments could not be disallowed-- CIT v. Vijay Kumar Goel (Chhattisgarh) . . . 376
S. 68 --Undisclosed income--Loan transactions--Genuineness of transactions--Tribunal finding genuineness not established--Finding of fact--Additions on account of undisclosed income justified-- Toby Consultants P. Ltd. v. CIT (Delhi) . . . 338
S. 80-IB --Industrial undertaking--Special deduction under section 80-IB allowed after examining facts--Commissioner could not withdraw special deduction in revision proceedings-- CIT v. Deepak Mittal (P&H) . . . 411
S. 115J --Company--Book profit--Depreciation--Assessing Officer adopting straight line method--Tribunal allowing WDV method adopted by assessee--Commissioner (Appeals) for subsequent assessment year directing Assessing Officer to exclude depreciation for determination of book profits--Order attaining finality as no appeal filed--Principle of consistency applies-- CIT v. Prakash Industries Ltd . (P&H) . . . 391
S. 119 --Central Board of Direct Taxes--Power to issue instructions--Circular stating that failure to deduct tax at source under section 194J would necessarily attract penalty--Interference with discretion of authority--To that extent invalid--CBDT Circular No. 8 of 2009 dated November 24, 2009-- Dedicated Health Care Services TPA (India) Pvt. Ltd. v. Asst. CIT (Bom) . . . 345
----Central Board of Direct Taxes--Power to issue instructions--Circular stating that failure to deduct tax at source under section 194J would necessarily attract penalty--Interference with discretion of authority--To that extent invalid--CBDT Circular No. 8 of 2009 dated November 24, 2009-- Dedicated Health Care Services TPA (India) Pvt. Ltd. v. Asst. CIT (Bom) . . . 345
S. 132 --Search and seizure--Writ petition for release of gold jewellery--Jewellery sold for recovery of tax dues--Claim made after ten years--Writ petition dismissed-- Smt. Krishna Devi v. Chief CIT (P&H) . . . 415
S. 142A --Reassessment--Grounds for reassessment--Notice--Investment in construction of building--Effect of section 142A--Reference to Departmental Valuer valid--Reassessment proceedings on basis of report of Departmental Valuer--Valid-- Sunder Carpet Industries v. ITO (All) . . . 417
S. 147 --Reassessment--Grounds for reassessment--Notice--Investment in construction of building--Effect of section 142A--Reference to Departmental Valuer valid--Reassessment proceedings on basis of report of Departmental Valuer--Valid-- Sunder Carpet Industries v. ITO (All) . . . 417
----Reassessment--Notice--Valuation of stock--Valuation by Revenue in earlier years based on provisional accounts in spite of availability of final audited accounts--Mode of valuation could not be changed in relevant assessment year-- CIT v. Punjab State Warehousing Corporation (P&H) . . . 406
----Reassessment--Notice--Writ--High Court can consider whether there was material for belief that income had escaped assessment--Sufficiency of material cannot be considered-- Sunder Carpet Industries v. ITO (All) . . . 417
S. 148 --Reassessment--Grounds for reassessment--Notice--Investment in construction of building--Effect of section 142A--Reference to Departmental Valuer valid--Reassessment proceedings on basis of report of Departmental Valuer--Valid-- Sunder Carpet Industries v. ITO (All) . . . 417
----Reassessment--Notice--Valuation of stock--Valuation by Revenue in earlier years based on provisional accounts in spite of availability of final audited accounts--Mode of valuation could not be changed in relevant assessment year-- CIT v. Punjab State Warehousing Corporation (P&H) . . . 406
----Reassessment--Notice--Writ--High Court can consider whether there was material for belief that income had escaped assessment--Sufficiency of material cannot be considered-- Sunder Carpet Industries v. ITO (All) . . . 417
S. 194J --Central Board of Direct Taxes--Power to issue instructions--Circular stating that failure to deduct tax at source under section 194J would necessarily attract penalty--Interference with discretion of authority--To that extent invalid--CBDT Circular No. 8 of 2009 dated November 24, 2009-- Dedicated Health Care Services TPA (India) Pvt. Ltd. v. Asst. CIT (Bom) . . . 345
----Deduction of tax at source--Liability to deduct tax at source--Fees for professional services--Third party administrator licensed by insurance authority providing cashless service through network hospitals and settlement or reimbursement of claims--Insurance companies entering into service level agreements for settling claims--Insurance companies depositing certain amounts available to TPA--TPA liable to deduct tax on amounts paid to hospitals-- Medi Assist India TPA P. Ltd. v. Deputy CIT (TDS) (Karn) . . . 356
----Deduction of tax at source--Professional services--Scope of expression--Third party administrator providing services to holders of health insurance policies--Payments to hospitals--Are payments for professional services--Liable to tax deduction at source--CBDT Circular No. 8 of 2009 dated November 24, 2009 (319 ITR (St.) 22)-- Dedicated Health Care Services TPA (India) Pvt. Ltd. v. Asst. CIT (Bom) . . . 345
S. 197(1) --Non-resident--Deduction of tax at source--Firm function services--Assessee applying for nil tax withholding certificate in respect of payments received for firm function services rendered to Indian branches--Orders passed under section 264 by Commissioner and under section 197 by Assessing Officer specifying tax withholding rates for other years--Assessing Officer without valid reasons deviating from position adopted by Commissioner--Certificate to be issued under section 197(1)-- McKinsey and Company Inc. v. Union of India (Bom) . . . 367
S. 245S --Advance ruling--Binding nature-- Prudential Assurance Company Ltd. v. Director of Income-tax (Bom) . . . 381
----Revision--Commissioner--Erroneous and prejudicial to the interests of the Revenue--Assessing Officer following a binding ruling of Authority for Advance Rulings in assessee's own case--Invocation of jurisdiction under section 263 on basis of ruling in another case--Improper-- Prudential Assurance Company Ltd. v. Director of Income-tax (Bom) . . . 381
S. 260A --Appeal to High Court--Delay in filing appeal--Application for condonation of delay--Application cannot be made under section 5 of Limitation Act-- Shergarh Co-op. L and C Society Ltd . v. ITO (P&H) . . . 408
S. 263 --Industrial undertaking--Special deduction under section 80-IB allowed after examining facts--Commissioner could not withdraw special deduction in revision proceedings-- CIT v. Deepak Mittal (P&H) . . . 411
----Revision--Commissioner--Erroneous and prejudicial to the interests of the Revenue--Assessing Officer following a binding ruling of Authority for Advance Rulings in assessee's own case--Invocation of jurisdiction under section 263 on basis of ruling in another case--Improper-- Prudential Assurance Company Ltd. v. Director of Income-tax (Bom) . . . 381
----Revision--Powers of Commissioner--Commissioner cannot reappraise evidence and record a different finding on the same facts-- CIT v. Deepak Mittal (P&H) . . . 411
S. 271C --Central Board of Direct Taxes--Power to issue instructions--Circular stating that failure to deduct tax at source under section 194J would necessarily attract penalty--Interference with discretion of authority--To that extent invalid--CBDT Circular No. 8 of 2009 dated November 24, 2009-- Dedicated Health Care Services TPA (India) Pvt. Ltd. v. Asst. CIT (Bom) . . . 345
S. 273B --Central Board of Direct Taxes--Power to issue instructions--Circular stating that failure to deduct tax at source under section 194J would necessarily attract penalty--Interference with discretion of authority--To that extent invalid--CBDT Circular No. 8 of 2009 dated November 24, 2009-- Dedicated Health Care Services TPA (India) Pvt. Ltd. v. Asst. CIT (Bom) . . . 345
R. 6DD(d)(iv) --Business expenditure--Disallowance--Payment otherwise than by crossed cheque or crossed demand draft of sum exceeding prescribed limit--Payments by banker's cheques, pay orders and call deposit receipts issued in favour of public sector undertaking--Instruments within definition of bill of exchange--Payments found to be genuine--Payments could not be disallowed-- CIT v. Vijay Kumar Goel (Chhattisgarh) . . . 376
S. 5 --Appeal to High Court--Delay in filing appeal--Application for condonation of delay--Application cannot be made under section 5 of Limitation Act-- Shergarh Co-op. L and C Society Ltd . v. ITO (P&H) . . . 408
Negotiable Instruments Act, 1881 :
Ss. 5, 6 --Business expenditure--Disallowance--Payment otherwise than by crossed cheque or crossed demand draft of sum exceeding prescribed limit--Payments by banker's cheques, pay orders and call deposit receipts issued in favour of public sector undertaking--Instruments within definition of bill of exchange--Payments found to be genuine--Payments could not be disallowed-- CIT v. Vijay Kumar Goel (Chhattisgarh) . . . 376
-CA.RAJU SHAH
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