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Saturday, July 31, 2010

DUE DATE 31ST JULY OF FILING OF IT RETURN EXTENDED

 
DUE DATE OF IT RETURN

The CBDT has decided to extend the due date of filing of Income Tax returns from 31st July 2010 to 4th August 2010. All paper returns or e-returns filed on or before 4th August, 2010 would be considered as filed within the due. Refer www.incometaxindiaefiling.gov.in
-CA.RAJU SHAH 

Thursday, July 22, 2010

COST INFLATION INDEX OF 2010-11

 
Good Morning !!!!
 
COST INFLATION INDEX FOR F.Y. 2010-11 is 711
 
Regards,
CA NARESH DHARIA

Sunday, July 18, 2010

Auditors responsibility to Launching of Prosecution Circular of Co-op. Department.

DEAR MEMBERS,

 

The Co-operative department issued circular dated 14th July, 2010 on "Launching of prosecution on account of misutilisation and Misappropriation of Funds of Cooperative Societies".

 

It has been stated in said circular that "when departmental auditors do "Special or Test Audit" they are reporting the misutilisation and misappropriation of funds of Co-operative Societies. However, Statutory Audit report does not reflect misutilisation and misappropriation of funds of the same year.

 

The circular is really bad in test and we should strongly condemn the abrupt conclusion / allegations made in said circular.

 

The pdf file is attached herewith.

 


Regards,
-------
CA.C.V.PAWAR
0253-2319641. M-9423961209

 

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For latest Updates visit Blogspot : http://canews1.blogspot.com

 

Tuesday, July 13, 2010

NEWS, INFORMATION....

Results of the Chartered Accountants Final and Final (New Course) Examinations held in May, 2010 and Common Proficiency Test (CPT) held in June, 2010 are likely to be declared on Monday, the 19th July, 2010

 

Individual and HUF required to get their account audited need to file ITR 4 online

 

Jul 10, 2010 Income Tax

 

Income-tax (Seventh Amendment) Rules, 2010 – Amendment in rule 12

 

Notification No. 49/2010[F.No.142/15/2010-TPL], dated 9-7-2010

 

In exercise of the powers conferred by section 295 read with section 139 of Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely : –

 

1. (1) These rules may be called the Income-tax (7th Amendment) Rules, 2010.

 

(2) They shall come into force from the date of their publication in the Official Gazette.

 

 

2. In the Income-tax Rules 1962, in rule 12, in sub-rule (3), in the proviso, for clause (a), the following clauses shall be substituted, namely :-

 

"(a) a firm required to furnish the return in Form ITR-5 and to whom provisions of section 44AB are applicable shall furnish the return in the manner specified in clause (ii) or clause (iii);

 

(aa) an individual or HUF required to furnish the return in Form ITR-4 and to whom provisions of section 44AB are applicable shall furnish the return for Assessment Year 2010-11 and subsequent Assessment Years in the manner specified in clause (ii) or clause (iii);

 

(ab) a company required to furnish the return in Form ITR-6 shall furnish the return for Assessment Year 2010-11 and subsequent Assessment Years in the manner specified in clause (ii)'

 

Supreme Court rules taxpayers can legally reduce their liability through dividend-stripping

 

Jul 9, 2010 Income Tax

 

 

In a significant ruling, the Supreme Court has ruled that taxpayers can legally reduce their liability through dividend-stripping, a term used for selling mutual fund units at a discount post-dividend. An apex court bench headed by Chief Justice SH Kapadia has said there is nothing wrong in dividend-stripping after getting the tax benefits. The bench further said such dividend stripping after availing of the tax rebates cannot be termed as abuse of law.

 

"Even assuming that the transaction was pre-planned there is nothing to impeach the genuineness of the transaction," said the bench agreeing with an earlier Bombay High Court order.

 

Dividend-stripping is purchase of shares just before a dividend is paid, and sale of the same after that payment, when they go ex-dividend. This is often done by investors and corporate houses as an investment strategy to avoid/reduce income tax liability.

 

The court further said the income tax department cannot term the loss occurred after such transaction is not a valid transaction as it has been pre-planned one.

 

The bench further said the interest/dividend received on such investments are regarded as "return on investment and not return of investment".

 

The court also said only in certain cases where the purchase price includes the right to receive "crystallised and accrued dividend, that have already accrued and become due for payment before the date of purchase of the units, that the same has got be reduced from the purchase of the investment".

 

But mere receipt of dividend subsequent to purchase of units "merely on the basis of a person holding units at the time of the declaration of the dividend on the record date cannot go to offset the cost of acquisition of the units", pointed out the court.

 

 

The order came over a petition filed by the IT department challenging the orders of the Bombay High Court. The case dates back to 2000, when the brokerage house Walfort Share & Stock had bought tax-free dividends from Chola Freedom Technology Mutual Fund at a unit price of Rs 17.23. As per the terms and conditions, the brokerage house got 40 percent tax concession from the deal.

 

Three days after the deal, they sold it at Rs 13.23 a unit, thus incurring losses. When the firm filed its annual returns then it got the benefits under section 10 (33) of the Income Tax Act, but the department declined to adjust the loss suffered in dividend-stripping, contending that it was not a business transaction but a pre-designed artificial loss.

 

Direct tax code: Relief to investors on capital gains tax

 

Equity investors should remain invested despite the new direct tax code proposing the return of the long term capital gains tax. At least that's what the government wants investors to believe, finance ministry officials have told NDTV.

 

Investors holding long term shares till March 31, 2011, will not be subjected to the long-term capital gains tax. And April 1, 2011 may become the new cutoff date, to begin the calculation of the long-term capital gains.

 

This means, stock prices as on April 1, 2011 will be the new base price for computing capital gains tax.

 

The government will also be providing abatement on the calculation of long-term capital gains, which means only a certain percentage of the capital gains, will be taxable.

 

This rate of abatement will lower the tax burden on equity investors considerably.

 

Similarly, even short term equity investors, will have the option to roll over their investments.

-CA.RAJU SHAH

Wednesday, July 7, 2010

ITR VOL 325 PART 1

 

INCOME TAX REPORTS (ITR)

Volume 325 : Part 1 (Issue dated 12-7-2010)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Accounting --Rejection of accounts--Onus on Revenue to show accounts incorrect or incomplete--Assessing Officer rejecting book results on low net profit--Finding that accounts maintained by assessee neither defective nor incomplete--Findings of fact--Income-tax Act, 1961, s. 145(3)-- CIT v. Paradise Holidays (Delhi) . . . 13

Appeal to High Court --Amount received on dissolution of partnership--Question regarding assessability considered by High Court--Question regarding quantum not raised before Tribunal--High Court could not consider question--Income-tax Act, 1961, s. 260A-- Davangere Maganur Bassappa and Sons v. ITO (Karn) . . . 139

----Power of court to admit new ground--Tribunal holding sum in question not taxable under section 28(i)--Appeal by Department seeking to tax sum under section 28(iv)--Facts before court and not disputed--Pure question of law--Can be raised--Income-tax Act, 1961, ss. 28(i), (iv), 260A-- CIT v. Jindal Equipments Leasing and Consultancy Services Ltd. (Delhi) . . . 87

Assessment --Orders under section 143(1)(a)--Claim for investment allowance beyond period of limitation--Claim for prior period expenses without specifying provision under which claim was made--Assessing Officer justified in disallowing amounts--Income-tax Act, 1961, s. 143(1)(a)-- CIT v. Vanaja Textiles Ltd. (Ker) . . . 132

Association of persons --No provision for assessing member independently--Income-tax Act, 1961, s. 3(1)(b), (f)-- Pradeep Trust v. CIT (Cal) . . . 1

Bad debts --Classification of debts as bad--Change of law--Assessee writing off debts as bad debts in books was in compliance with requirement of section 36(1)(vii)--Income-tax Act, 1961, s. 36(1)(vii)-- CIT v. Omprakas B. Salecha (Bom) . . . 24

Business --Business income--Business expenditure--Steel plant not commencing production--Income from deposits--Tribunal assessing as business income and allowing expenditure thereagainst--Relief granted without considering all points--Matter remanded--Income-tax Act, 1961, s. 2(13)-- CIT v. Jindal Vijaya-nagar Steel Ltd . (Karn) . . . 144

Business income --Benefit or perquisite arising in course of business of nature other than cash or money--Assessee an investment company--Loan taken from another company partially written off by creditor--Sum written off--Not income having regard to nature of assessee's business--Not taxable--Income-tax Act, 1961, ss. 28(i), (iv), 41(1)-- CIT v. Jindal Equipments Leasing and Consultancy Services Ltd . (Delhi) . . . 87

----Deemed income--Remission of liability--Liability still outstanding--Addition under section 41(1) not valid--Income-tax Act, 1961, s. 41(1)-- CIT v. GP International Ltd. (P&H) . . . 25

Capital gains --Computation of capital gains--Deductions--Cost of acquisition of asset--Interest on amount borrowed for purchase of property--Part of cost of acquisition of property--Deductible--Income-tax Act, 1961-- CIT v. Sri Hariram Hotels P. Ltd . (Karn) . . . 136

----Exemption--Investment in specified security within six months of transfer--Date of investment would be date of payment and receipt by National Housing Bank--Income-tax Act, 1961, s. 54EC-- Hindustan Unilever Ltd . v. Deputy CIT (Bom) . . . 102

----Firm--Assets taken over by assessee on dissolution of firm--Sale within three days of dissolution--Short-term capital gains--Income-tax Act, 1961, ss. 2(42A), 45(4), 49(1)(iii)(b)--Partnership Act, 1932, s. 14-- P. P. Menon v. CIT (Ker) . . . 122

----Transfer--Distribution of capital assets on dissolution of firm--Amounts to transfer--Gains assessable--Income-tax Act, 1961, s. 45-- Davangere Maganur Bassappa and Sons v. ITO (Karn) . . . 139

Capital or revenue expenditure --Amount deposited for acquisition of distribution rights of products of a company--Failure of company to produce article--Part of deposit written off--Not deductible as revenue expenditure--Income-tax Act, 1961, s. 37-- Cochin Malabar Estates and Industries Ltd . v. CIT (Ker) . . . 129

----Theatre--Change of sound system--Change not resulting in increased income--Expenditure incurred thereon revenue expenditure--Income-tax Act, 1961, s. 37-- CIT v. Sagar Talkies (Karn) . . . 133

Deduction of tax at source --Business expenditure--Disallowance--For failure to deposit tax deduction at source--Provision valid--Constitutional validity--Income-tax Act, 1961, ss. 40(a)(ia), 200(1)--Constitution of India, art. 14-- Rakesh Kumar and Co. v. Union of India (P&H) . . . 35

----Commission--Meaning of commission--Assessee providing cellular telephone network--Appointing distributors for selling pre-paid SIM cards--Discount allowed by assessee to distributor constituted commission--Assessee liable to deduct tax at source on such commission--Income-tax Act, 1961, s. 194H-- CIT v. Idea Cellular Ltd. (Delhi) . . . 148

----Salary--Perquisite--Reimbursement of club membership fees and allowance on soft furnishings--Assessee obtaining corporate membership for its benefit--Failure by Assessing Officer to take note of materials produced by assessee and treating sums as perquisites liable to deduction of tax at source--Matter remanded--Income-tax Act, 1961, ss. 17(2), 201(1A)-- Asst. CIT v. Brooke Bond Lipton India Ltd. (Karn) . . . 141

Depreciation --Leasing of trucks and buses--Depreciation allowable at higher rate--Income-tax Act, 1961--Income-tax Rules, 1962, Appendix I, Part A, item III, entries (2), (3)(ii)-- CIT v. Punjab Leasing (P.) Ltd. (P&H) . . . 29

Export --Deduction under section 10B--Law applicable--Effect of amendment by Finance Act, 2000--Provision now for deduction--Loss in eligible unit could be set off against profits of business--Income-tax Act, 1961, s. 10B-- Hindustan Unilever Ltd. v. Deputy CIT (Bom) . . . 102

----Special deduction--Interest--Interest on FDRs--To be included in total turnover--Income-tax Act, 1961, s. 80HHC-- CIT v. Shriram Pistons and Rings Ltd. (Delhi) . . . 46

Gift-tax --Deemed gift--Assessee purchasing non-cumulative preference shares above market value--Assessee acquiring no interest in property at that stage as no transfer is involved--Company cannot issue shares under discount under company law--No evidence that assessee purchased shares as colourable device to reduce tax liability--Gift-tax cannot be imposed--Companies Act, 1956, s. 69--Gift-tax Act, 1958, s. 4(1)(a), proviso-- CGT v. Rockman Cycle Industries P. Ltd. (P&H) . . . 18

Income --Income from tea--Computation of income--Effect of rule 8--Forty per cent. of income liable to tax--Expenditure and losses to be taken into account in calculating that income--Income-tax Act, 1961--Income-tax Rules, 1962, r. 8-- Hindustan Unilever Ltd . v. Deputy CIT (Bom) . . . 102

Income from undisclosed sources --Company--Share application money--Identity of contributors established--Failure by some of them to respond to notice under section 133--Not relevant--Amount not assessable as income of assessee--Income-tax Act, 1961-- CIT v. GP International Ltd. (P&H) . . . 25

Income-tax --General principles--Liability crystallizes on last day of previous year-- Pradeep Trust v. CIT (Cal) . . . 1

Intercorporate dividend --Special deduction--Assessee incurring expenditure for earning dividend income--Tribunal finding no basis for estimating expenditure and reducing it from dividend income--Amount of dividend and disallowance negligible--Not to be interfered with--Income-tax Act, 1961, s. 80M-- CIT v. Federal Bank Ltd. (Ker) . . . 128

International treaties --Government--Writ--Public interest litigation--Requirement to place before Parliament--Matter to be left to Government and Parliament--Court cannot adjudicate upon--Treaty to be in conformity with constitutional provisions--Constitution of India, art. 226--Income-tax Act, 1961, s. 90-- Shiva Kant Jha v. Union of India (Delhi) . . . 51

Offences and prosecution --Wilful attempt to evade tax--Firm--Partner conducting business of firm--Discrepancy in stocks of firm not explained--Conviction of partner--Valid--Income-tax Act, 1961, s. 276C-- Puran Chand v. R. K. Suman, ITO (P&H) . . . 38

Penalty --Concealment of income--Assessee director and shareholder with substantial interest in company--Assessee also partner in firm--Loan by firm to company and by company to assessee--Loan treated as deemed dividend--Consequent levy of penalty--Tribunal not justified in cancelling penalty without considering facts relied on by Assessing Officer--Matter remanded--Income-tax Act, 1961, s. 271(1)(c)-- CIT v. Alkesh K. Patel (Bom) . . . 118

----Interest--Advance tax--Delay in filing returns--Waiver of penalty and interest--Discretion to be used judiciously and fairly--Belated return filed voluntarily and taxes paid--Rejection of application for waiver--Not valid--Matter remanded--Income-tax Act, 1961, s. 273A-- Vasantbhai Jethalal Lathiwala v. CIT (Bom) . . . 41

Precedent --Effect of order of Supreme Court in Malabar Industrial Co. v. CIT [2000] 243 ITR 83-- Jewel of India v. Asst. CIT (Bom) . . . 92

Previous year --Separate previous years for separate sources of income permissible-- Pradeep Trust v. CIT (Cal) . . . 1

Reassessment --Agricultural income--Assessee having possession of certain lands--Entering into agreement to earmark lands in its possession for scheme of growing teak trees--Under agreement shifting responsibility of growing and maintaining trees to another concern--Resultant surplus not income derived from agriculture or agricultural operations--But from not encroaching upon use of land for a specific purpose--Assessee returning income earned is agricultural income--Reassessment valid--Income-tax Act, 1961, ss. 2(1A)(a), (b), 147-- Papaya Farms Pvt. Ltd. v. Deputy CIT (Mad) . . . 60

----Previous year--Joint venture business carried on by assessee with another person as association of persons--Assessee taking over business as sole proprietor on January 1, 1982--Previous year for business ending on December 31, 1981, but that of branch ending on March 31, 1982--Association of persons not including business of branch for period ending March 31, 1982 in return for 1982-83--Assessee including it in return for 1983-84--Commissioner (Appeals) approving of this and order becoming final--No justification for reopening assessment--Income-tax Act, 1961, ss. 3(1)(b), (f), 147, 148-- Pradeep Trust v. CIT (Cal) . . . 1

----Rectification of mistake--Simple computational error by Assessing Officer--Error should be rectified--Reassessment proceedings to correct error--Not valid--Income-tax Act, 1961, ss. 147, 154--H industan Unilever Ltd. v. Deputy CIT (Bom) . . . 102

----Reopening on ground suppression detected during search and seizure operations--Income disclosed in return filed prior to search--Reassessment not justified--Income-tax Act, 1961, s. 147-- Pradeep Trust v. CIT (Cal) . . . 1

Revision --Condition precedent--Order of Assessing Officer should be erroneous and also prejudicial to Revenue--Order found to be erroneous but no finding that it was prejudicial to Revenue--Order could not be revised--Income-tax Act, 1961, s. 263-- Jewel of India v. Asst. CIT (Bom) . . . 92

----Conditions precedent--Order should be erroneous and prejudicial to Revenue--Assessing Officer allowing set off of speculation loss against speculation profits in first instance--Order in accordance with CBDT circular and applying decision of High Court--Order not erroneous--Order could not be revised--CBDT Circular No. 23 (XXXIX-4)D of 1960, dated September 12, 1960--Income-tax Act, 1961, s. 263-- CIT v. Pradeep Kumar Todi (Cal) . . . 96

----Powers of Commissioner--Change in law by Finance Act, 1989, with retrospective effect from 1-6-1988--Commissioner can invoke power under section 263 even if order of assessment subject-matter of appeal--Income-tax Act, 1961, s. 263-- CIT v. Ganesh Steel Indus. (P&H) . . . . 99

Search and seizure --Block assessment--Undisclosed income--Finding that assessee had suppressed sales--Additions justified--Income-tax Act, 1961-- CIT v. Kallada Wines (Ker) . . . 125

----Seizure of jewellery from locker--Explanation given by assessee not considered--Matter remanded--Income-tax Act, 1961-- Smt. Urmila Gambhir v. CIT (Delhi) . . . 171

----Undisclosed income--Addition on account of loose sheet of paper found during search--Assessee failing to discharge onus to prove contents of paper--Concurrent findings that amount mentioned undisclosed income--Proper--Income-tax Act, 1961, ss. 132, 158BC-- Smt. Urmila Gambhir v. CIT (Delhi) . . . 171

Valuation of closing stock --Additions on account of discrepancies in record--No proof of perversity in not appreciating evidence in form of comparative results of other mill owners--Tribunal finding additions made due to absence of proper and complete record--Finding of fact--Income-tax Act, 1961-- Amba Rice Mills v. CIT (P&H) . . . 33

AUTHORITY FOR ADVANCE RULINGS

Deduction of tax at source --Reimbursement of expenses--No deduction of tax at source--Income-tax Act, 1961, s. 195-- HMS Real Estate P. Ltd., In re. . . 71

Non-resident --Not having permanent establishment in India--Agreement for provision of architectural designs--Fees for "included services"--Payment to be treated as for "included services" under article 12 of DTAA--Taxable in India--Rate of tax--Lesser rate of ten per cent.--Income-tax Act, 1961, s. 115A(1)(b)(BB)--Agreement for Avoidance of Double Taxation between India and the USA, art. 12(4)(b)-- HMS Real Estate P. Ltd. , In re . . . 71

Rate of tax --Lesser rate of ten per cent.--Income-tax Act, 1961, s. 115A(1)(b)(BB)-- HMS Real Estate P. Ltd. , In re . . . 71

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Agreement for Avoidance of Double Taxation between India and the USA :

Art. 12(4)(b) --Non-resident--Not having permanent establishment in India--Agreement for provision of architectural designs--Fees for "included services"--Payment to be treated as for "included services" under article 12 of DTAA--Taxable in India--Rate of tax--Lesser rate of ten per cent.-- HMS Real Estate P. Ltd. , In re (AAR) . . . 71

Companies Act, 1956 :

S. 69 --Gift-tax--Deemed gift--Assessee purchasing non-cumulative preference shares above market value--Assessee acquiring no interest in property at that stage as no transfer is involved--Company cannot issue shares under discount under company law--No evidence that assessee purchased shares as colourable device to reduce tax liability--Gift-tax cannot be imposed-- CGT v. Rockman Cycle Industries P. Ltd. (P&H) . . . 18

Constitution of India :

Art. 14 --Deduction of tax at source--Business expenditure--Disallowance--For failure to deposit tax deduction at source--Provision valid--Constitutional validity-- Rakesh Kumar and Co. v. Union of India (P&H) . . . 35

Art. 226 --International treaties--Government--Writ--Public interest litigation--Requirement to place before Parliament--Matter to be left to Government and Parliament--Court cannot adjudicate upon--Treaty to be in conformity with constitutional provisions-- Shiva Kant Jha v. Union of India (Delhi) . . . 51

Gift-tax Act, 1958 :

S. 4(1)(a), proviso --Gift-tax--Deemed gift--Assessee purchasing non-cumulative preference shares above market value--Assessee acquiring no interest in property at that stage as no transfer is involved--Company cannot issue shares under discount under company law--No evidence that assessee purchased shares as colourable device to reduce tax liability--Gift-tax cannot be imposed-- CGT v. Rockman Cycle Industries P. Ltd. (P&H) . . . 18

Income-tax Act, 1961 :

S. 2(1A)(a), (b) --Reassessment--Agricultural income--Assessee having possession of certain lands--Entering into agreement to earmark lands in its possession for scheme of growing teak trees--Under agreement shifting responsibility of growing and maintaining trees to another concern--Resultant surplus not income derived from agriculture or agricultural operations--But from not encroaching upon use of land for a specific purpose--Assessee returning income earned is agricultural income--Reassessment valid-- Papaya Farms Pvt. Ltd. v. Deputy CIT (Mad) . . . 60

S. 2(13) --Business--Business income--Business expenditure--Steel plant not commencing production--Income from deposits--Tribunal assessing as business income and allowing expenditure thereagainst--Relief granted without considering all points--Matter remanded-- CIT v. Jindal Vijayanagar Steel Ltd .(Karn) . . . 144

S. 2(42A) --Capital gains--Firm--Assets taken over by assessee on dissolution of firm--Sale within three days of dissolution--Short-term capital gains-- P. P. Menon v. CIT (Ker) . . . 122

S. 3(1)(b), (f) --Association of persons--No provision for assessing member independently-- Pradeep Trust v. CIT (Cal) . . . 1

----Reassessment--Previous year--Joint venture business carried on by assessee with another person as association of persons--Assessee taking over business as sole proprietor on January 1, 1982--Previous year for business ending on December 31, 1981, but that of branch ending on March 31, 1982--Association of persons not including business of branch for period ending March 31, 1982 in return for 1982-83--Assessee including it in return for 1983-84--Commissioner (Appeals) approving of this and order becoming final--No justification for reopening assessment-- Pradeep Trust v. CIT (Cal) . . . 1

S. 10B --Export--Deduction under section 10B--Law applicable--Effect of amendment by Finance Act, 2000--Provision now for deduction--Loss in eligible unit could be set off against profits of business-- Hindustan Unilever Ltd. v. Deputy CIT (Bom) . . . 102

S. 17(2) --Deduction of tax at source--Salary--Perquisite--Reimbursement of club membership fees and allowance on soft furnishings--Assessee obtaining corporate membership for its benefit--Failure by Assessing Officer to take note of materials produced by assessee and treating sums as perquisites liable to deduction of tax at source--Matter remanded-- Asst. CIT v. Brooke Bond Lipton India Ltd. (Karn) . . . 141

S. 28(i), (iv) --Appeal to High Court--Power of court to admit new ground--Tribunal holding sum in question not taxable under section 28(i)--Appeal by Department seeking to tax sum under section 28(iv)--Facts before court and not disputed--Pure question of law--Can be raised-- CIT v. Jindal Equipments Leasing and Consultancy Services Ltd. (Delhi) . . . 87

----Business income--Benefit or perquisite arising in course of business of nature other than cash or money--Assessee an investment company--Loan taken from another company partially written off by creditor--Sum written off--Not income having regard to nature of assessee's business--Not taxable-- CIT v. Jindal Equipments Leasing and Consultancy Services Ltd .(Delhi) . . . 87

S. 36(1)(vii) --Bad debts--Classification of debts as bad--Change of law--Assessee writing off debts as bad debts in books was in compliance with requirement of section 36(1)(vii)-- CIT v. Omprakas B. Salecha (Bom) . . . 24

S. 37 --Capital or revenue expenditure--Amount deposited for acquisition of distribution rights of products of a company--Failure of company to produce article--Part of deposit written off--Not deductible as revenue expenditure-- Cochin Malabar Estates and Industries Ltd . v. CIT (Ker) . . . 129

----Capital or revenue expenditure--Theatre--Change of sound system--Change not resulting in increased income--Expenditure incurred thereon revenue expenditure-- CIT v. Sagar Talkies (Karn) . . . 133

S. 40(a)(ia) --Deduction of tax at source--Business expenditure--Disallowance--For failure to deposit tax deduction at source--Provision valid--Constitutional validity-- Rakesh Kumar and Co. v. Union of India (P&H) . . . 35

S. 41(1) --Business income--Benefit or perquisite arising in course of business of nature other than cash or money--Assessee an investment company--Loan taken from another company partially written off by creditor--Sum written off--Not income having regard to nature of assessee's business--Not taxable-- CIT v. Jindal Equipments Leasing and Consultancy Services Ltd . (Delhi) . . . 87

----Business income--Deemed income--Remission of liability--Liability still outstanding--Addition under section 41(1) not valid-- CIT v. GP International Ltd. (P&H) . . . 25

S. 45 --Capital gains--Transfer--Distribution of capital assets on dissolution of firm--Amounts to transfer--Gains assessable-- Davangere Maganur Bassappa and Sons v. ITO (Karn) . . . 139

S. 45(4) --Capital gains--Firm--Assets taken over by assessee on dissolution of firm--Sale within three days of dissolution--Short-term capital gains-- P. P. Menon v. CIT (Ker) . . . 122

S. 49(1)(iii)(b) --Capital gains--Firm--Assets taken over by assessee on dissolution of firm--Sale within three days of dissolution--Short-term capital gains-- P. P. Menon v. CIT (Ker) . . . 122

S. 54EC --Capital gains--Exemption--Investment in specified security within six months of transfer--Date of investment would be date of payment and receipt by National Housing Bank-- Hindustan Unilever Ltd . v. Deputy CIT (Bom) . . . 102

S. 80HHC --Export--Special deduction--Interest--Interest on FDRs--To be included in total turnover-- CIT v. Shriram Pistons and Rings Ltd. (Delhi) . . . 46

S. 80M --Intercorporate dividend--Special deduction--Assessee incurring expenditure for earning dividend income--Tribunal finding no basis for estimating expenditure and reducing it from dividend income--Amount of dividend and disallowance negligible--Not to be interfered with-- CIT v. Federal Bank Ltd. (Ker) . . . 128

S. 90 --International treaties--Government--Writ--Public interest litigation--Requirement to place before Parliament--Matter to be left to Government and Parliament--Court cannot adjudicate upon--Treaty to be in conformity with constitutional provisions-- Shiva Kant Jha v. Union of India (Delhi) . . . 51

S. 115A(1)(b)(BB) --Non-resident--Not having permanent establishment in India--Agreement for provision of architectural designs--Fees for "included services"--Payment to be treated as for "included services" under article 12 of DTAA--Taxable in India--Rate of tax--Lesser rate of ten per cent.-- HMS Real Estate P. Ltd. , In re (AAR) . . . 71

----Rate of tax--Lesser rate of ten per cent.-- HMS Real Estate P. Ltd. , In re (AAR) . . . 71

S. 132 --Search and seizure--Undisclosed income--Addition on account of loose sheet of paper found during search--Assessee failing to discharge onus to prove contents of paper--Concurrent findings that amount mentioned undisclosed income--Proper-- Smt. Urmila Gambhir v. CIT (Delhi) . . . 171

S. 143(1)(a) --Assessment--Orders under section 143(1)(a)--Claim for investment allowance beyond period of limitation--Claim for prior period expenses without specifying provision under which claim was made--Assessing Officer justified in disallowing amounts-- CIT v. Vanaja Textiles Ltd. (Ker) . . . 132

S. 145(3) --Accounting--Rejection of accounts--Onus on Revenue to show accounts incorrect or incomplete--Assessing Officer rejecting book results on low net profit--Finding that accounts maintained by assessee neither defective nor incomplete--Findings of fact-- CIT v. Paradise Holidays (Delhi) . . . 13

S. 147 --Reassessment--Agricultural income--Assessee having possession of certain lands--Entering into agreement to earmark lands in its possession for scheme of growing teak trees--Under agreement shifting responsibility of growing and maintaining trees to another concern--Resultant surplus not income derived from agriculture or agricultural operations--But from not encroaching upon use of land for a specific purpose--Assessee returning income earned is agricultural income--Reassessment valid-- Papaya Farms Pvt. Ltd. v. Deputy CIT (Mad) . . . 60

----Reassessment--Previous year--Joint venture business carried on by assessee with another person as association of persons--Assessee taking over business as sole proprietor on January 1, 1982--Previous year for business ending on December 31, 1981, but that of branch ending on March 31, 1982--Association of persons not including business of branch for period ending March 31, 1982 in return for 1982-83--Assessee including it in return for 1983-84--Commissioner (Appeals) approving of this and order becoming final--No justification for reopening assessment-- Pradeep Trust v. CIT (Cal) . . . 1

----Reassessment--Rectification of mistake--Simple computational error by Assessing Officer--Error should be rectified--Reassessment proceedings to correct error--Not valid--H industan Unilever Ltd. v. Deputy CIT (Bom) . . . 102

----Reassessment--Reopening on ground suppression detected during search and seizure operations--Income disclosed in return filed prior to search--Reassessment not justified-- Pradeep Trust v. CIT (Cal) . . . 1

S. 148 --Reassessment--Previous year--Joint venture business carried on by assessee with another person as association of persons--Assessee taking over business as sole proprietor on January 1, 1982--Previous year for business ending on December 31, 1981, but that of branch ending on March 31, 1982--Association of persons not including business of branch for period ending March 31, 1982 in return for 1982-83--Assessee including it in return for 1983-84--Commissioner (Appeals) approving of this and order becoming final--No justification for reopening assessment-- Pradeep Trust v. CIT (Cal) . . . 1

S. 154 --Reassessment--Rectification of mistake--Simple computational error by Assessing Officer--Error should be rectified--Reassessment proceedings to correct error--Not valid--H industan Unilever Ltd. v. Deputy CIT (Bom) . . . 102

S. 158BC --Search and seizure--Undisclosed income--Addition on account of loose sheet of paper found during search--Assessee failing to discharge onus to prove contents of paper--Concurrent findings that amount mentioned undisclosed income--Proper-- Smt. Urmila Gambhir v. CIT (Delhi) . . . 171

S. 194H --Deduction of tax at source--Commission--Meaning of commission--Assessee providing cellular telephone network--Appointing distributors for selling pre-paid SIM cards--Discount allowed by assessee to distributor constituted commission--Assessee liable to deduct tax at source on such commission-- CIT v. Idea Cellular Ltd. (Delhi) . . . 148

S. 195 --Deduction of tax at source--Reimbursement of expenses--No deduction of tax at source-- HMS Real Estate P. Ltd., In re (AAR) . . . 71

S. 200(1) --Deduction of tax at source--Business expenditure--Disallowance--For failure to deposit tax deduction at source--Provision valid--Constitutional validity-- Rakesh Kumar and Co. v. Union of India (P&H) . . . 35

S. 201(1A) --Deduction of tax at source--Salary--Perquisite--Reimbursement of club membership fees and allowance on soft furnishings--Assessee obtaining corporate membership for its benefit--Failure by Assessing Officer to take note of materials produced by assessee and treating sums as perquisites liable to deduction of tax at source--Matter remanded-- Asst. CIT v. Brooke Bond Lipton India Ltd. (Karn) . . . 141

S. 260A --Appeal to High Court--Amount received on dissolution of partnership--Question regarding assessability considered by High Court--Question regarding quantum not raised before Tribunal--High Court could not consider question-- Davangere Maganur Bassappa and Sons v. ITO (Karn) . . . 139

----Appeal to High Court--Power of court to admit new ground--Tribunal holding sum in question not taxable under section 28(i)--Appeal by Department seeking to tax sum under section 28(iv)--Facts before court and not disputed--Pure question of law--Can be raised-- CIT v. Jindal Equipments Leasing and Consultancy Services Ltd. (Delhi) . . . 87

S. 263 --Revision--Condition precedent--Order of Assessing Officer should be erroneous and also prejudicial to Revenue--Order found to be erroneous but no finding that it was prejudicial to Revenue--Order could not be revised-- Jewel of India v. Asst. CIT (Bom) . . . 92

----Revision--Conditions precedent--Order should be erroneous and prejudicial to Revenue--Assessing Officer allowing set off of speculation loss against speculation profits in first instance--Order in accordance with CBDT circular and applying decision of High Court--Order not erroneous--Order could not be revised--CBDT Circular No. 23 (XXXIX-4)D of 1960, dated September 12, 1960-- CIT v. Pradeep Kumar Todi (Cal) . . . 96

----Revision--Powers of Commissioner--Change in law by Finance Act, 1989, with retrospective effect from 1-6-1988--Commissioner can invoke power under section 263 even if order of assessment subject-matter of appeal-- CIT v. Ganesh Steel Indus. (P&H) . . . 99

S. 271(1)(c) --Penalty--Concealment of income--Assessee director and shareholder with substantial interest in company--Assessee also partner in firm--Loan by firm to company and by company to assessee--Loan treated as deemed dividend--Consequent levy of penalty--Tribunal not justified in cancelling penalty without considering facts relied on by Assessing Officer--Matter remanded-- CIT v. Alkesh K. Patel (Bom) . . . 118

S. 273A --Penalty--Interest--Advance tax--Delay in filing returns--Waiver of penalty and interest--Discretion to be used judiciously and fairly--Belated return filed voluntarily and taxes paid--Rejection of application for waiver--Not valid--Matter remanded-- Vasantbhai Jethalal Lathiwala v. CIT (Bom) . . . 41

S. 276C --Offences and prosecution--Wilful attempt to evade tax--Firm--Partner conducting business of firm--Discrepancy in stocks of firm not explained--Conviction of partner--Valid-- Puran Chand v. R. K. Suman, ITO (P&H) . . . 38

Income-tax Rules, 1962 :

R. 8 --Income--Income from tea--Computation of income--Effect of rule 8--Forty per cent. of income liable to tax--Expenditure and losses to be taken into account in calculating that income-- Hindustan Unilever Ltd . v. Deputy CIT (Bom) . . . 102

Appendix I, Part A, item III, entries (2), (3)(ii) --Depreciation--Leasing of trucks and buses--Depreciation allowable at higher rate-- CIT v. Punjab Leasing (P.) Ltd. (P&H) . . . 29

Partnership Act, 1932 :

S. 14 --Capital gains--Firm--Assets taken over by assessee on dissolution of firm--Sale within three days of dissolution--Short-term capital gains-- P. P. Menon v. CIT (Ker) . . . 122

 -CA. RAJU SHAH

 

Monday, July 5, 2010

Urban Co-op. Bank New Panel Marking & Partial Modification in Article Tranfer/Termination Conditions

DEAR MEMBERS,

1. The Commissioner Co-operation, Pune has intimated to the WIRC, vide letter dated 19th May, 2010 to prepare fresh panel for the Audit of Urban Co-operative Banks having deposit exceeding Rs.25 Crores. The Division-wise and District-wise panel shall be prepared by September, 2010 and the Co-operative Department will notify the panel by November, 2010. The various scoring/marking points of eligible Firms are mention in said letter. According to said letter; "The allotment of UCBs will be made according to point scored by every firm. A firm having highest score will be allotted a bank with highest working capital/deposit and in the same descending order. The said letter is attached herewith and also hosted on www.wirc-icai.org .

2. The most awaited modified conditions relating to "Transfer/Termination of Articleship" under regulation 56(1) of ICAI has been notified by ICAI on institutes website on 2nd July, 2010. The relief has been given to students who wish to take transfer within 1 year of Articleship and some of new criteria/reasons have been incorporated to allow the transfer/termination of Articleship for the period after 1 year. The said announcement is attached herewith and also hosted on www.icai.org .

 

Regards,
-------

CA.C.V.PAWAR

Friday, July 2, 2010

ITR (TRIB) VOL 4 PART 1


 

ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))

Volume 4 : Part 1 (Issue dated : 5-7-2010)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Assessment --Assessing Officer estimating income at 8 per cent. of contract receipts on basis of information during survey--Assessee not maintaining proper vouchers and relatable evidences for purchase of materials--Assessing Officer justified in rejecting accounts of assessee and estimating income on a reasonable basis--Income-tax Act, 1961-- Asst. CIT v. Skyline Builders (Cochin) . . . 48

Best judgment assessment --Addition--No defects pointed out in books of account--Low profit in a particular year by itself cannot be a ground for invoking powers of best judgment assessment--Rejection of books of account not proper--Income-tax Act, 1961, ss. 144, 145(3)-- Deputy CIT v. Paras Dyeing and Printing Mills P. Ltd. (Ahmedabad) . . . 29

Book profit --Computation--Provision made for bad and doubtful debts in assessment year 1998-99--Assessee withdrawing and crediting in profit and loss account--Assessee is correct in excluding amount while computing income under section 115JB--Income-tax Act, 1961, s. 115JB-- Kochi Refineries Ltd. v. Deputy CIT (Mumbai) . . . 95

Business expenditure --Ascertained or contingent liability--Mercantile system of accounting--Interest on loan--Liability not entered in books of account--Interest liability to be allowed since assessee following mercantile system of accounting--Income-tax Act, 1961, s. 37-- Deputy CIT v. Dune Leasing and Finance Ltd. (Delhi) . . . 65

----Disallowance--Payments made to staff club--Expenditure incurred for business purpose--Not to be disallowed under section 40A(9)--Income-tax Act, 1961, s. 37-- Kochi Refineries Ltd. v. Deputy CIT (Mumbai) . . . 95

Capital gains --Capital loss--Capital asset--Transfer--Lease of land--Asset held by assessee need not be his own--Assessee acquiring possession of land under an agreement for consideration and later surrendering with a request to transfer its interest under another agreement to third party--Assessee a party to that agreement--Surrender of rights of assessee amounts to extinguishment of his rights in land/capital asset--Is capital loss allowable in hands of assessee--Income-tax Act, 1961, s. 2(14), (47)-- Asian PPG Industries Ltd . v. Deputy CIT (Mumbai) . . . 17

----Long-term capital gains--Computation--Cost of acquisition--Assessee inheriting property--Previous owner acquiring property prior to 1981-82--Indexation to be with reference to 1981-82--Income-tax Act, 1961, s. 48, Expln. (iii)-- Asst. CIT v. Syed Maqbul Hussain (Chennai) . . . 44

----Long-term capital gains--Computation--Determination of cost of acquisition--Inheritance of property in 1993--Property acquired by previous owner prior to 1981--Direction to adopt cost of acquisition as on April 1, 1981 justified--Income-tax Act, 1961, ss. 48, Expln. (iii), 55(2)(b)-- Asst. CIT v. Syed Maqbul Hussain (Chennai) . . . 44

Capital or revenue expenditure --Expenditure incurred for repairs of plant and machinery--Is revenue expenditure--Income-tax Act, 1961 s. 37-- Kochi Refineries Ltd. v. Deputy CIT (Mumbai) . . . 95

----Expenditure on feasibility studies--Allowed as revenue expenditure in earlier years--To be allowed in present year also--Income-tax Act, 1961-- Kochi Refineries Ltd. v. Deputy CIT (Mumbai) . . . 95

Capital or revenue receipt --Amount received for surrender of marketing rights--Assessee having no exclusive marketing rights over controlled products and composite agreement entered into for supply of fixed quantity--Compensation received for loss of income--Is revenue receipt--Income-tax Act, 1961-- Kochi Refineries Ltd. v. Deputy CIT (Mumbai) . . . 95

Company --Book profits--Computation--Assessing Officer cannot reopen audited and certified account passed in general body meeting filed before Registrar of Companies--Interest income not credited to accounts--Addition of interest income to profit and loss account--Interest income cannot be added to book profit --Income-tax Act, 1961, s. 115JB-- Deputy CIT v. Dune Leasing and Finance Ltd. (Delhi) . . . 65

Co-operative society --Special deduction--Interest income earned on deposits --Not deductible--Income-tax Act, 1961, s. 80P-- Sri Laxminarayana Swamy Co-operative Society Ltd. v. ITO (Bangalore) . . . 27

----Special deduction--Mutual concern--Objective of registered co-operative society to make profits and declare dividends to its members--Society not entitled to exemption on concept of mutuality--Income-tax Act, 1961, s. 80P-- Sri Laxminarayana Swamy Co-operative Society Ltd. v. ITO (Bangalore) . . . 27

----Special deduction--Operational income--Claim on ground society carrying out specified activity for common benefit of members--Assessing authority to verify activities of assessee--Income-tax Act, 1961, s. 80P(2)(a)(iii), (iv)-- Sri Laxminarayana Swamy Co-operative Society Ltd. v. ITO (Bangalore) . . . 27

Double Taxation Avoidance --American company deputing personnel to Indian company on hire basis--No permanent establishment of American company in India--Deputed personnel under control and supervision of Indian company--No technical services rendered by American company--Indian company reimbursing salary advanced by American company to deputed personnel--No business income from deputation of personnel to Indian company--Double Taxation Avoidance Agreement between USA and India, art. 5(2)(l)-- Deputy Director of Income-tax (International Taxation) v. Tekmark Global Solutions LLC (Mumbai) . . . 1

Income from undisclosed sources --Cash credits--Genuineness of transaction--Amount shown as receipt of share application money--Share applicants not found at given addresses--No further proof of existence of share applicants--Failure to conduct necessary enquiries by authorities--Matter remanded to examine nature of credit--Income-tax Act, 1961, s. 68-- ITO v. Omega Biotech Ltd. (Delhi) . . . 72

Industrial undertaking --Special deduction--Manufacture--Assembling activity amounts to manufacturing activity--Activity requiring more than ten workers --Conditions under section 80-IB fulfilled--Assessee entitled to deduction--Income-tax Act, 1961, s. 80-IB(iii), (iv)-- Chiranjjeevi Wind Energy Ltd. v. Asst. CIT (Chennai) . . . 9

Inter-corporate dividend --Special deduction under section 80M--State Government undertaking investing in companies promoted by it and those encouraged by it--Activities constituted single indivisible business--Special deduction available on gross dividend--Income-tax Act, 1961, s. 80M-- Deputy CIT v. Tamilnadu Industrial Development Corporation Ltd. (Chennai) . . . 79

Interest on borrowed funds --Funds utilised in investment to earn dividend income--Disallowance of 10 per cent. of dividend as expenses incurred for earning dividend under section 14A--No separate disallowance under section 36(1)(iii) required--Income-tax Act, 1961, ss. 14A, 36(1)(iii)-- Asian PPG Industries Ltd. v. Deputy CIT (Mumbai) . . . 17

Refund --Interest on excess refund--Levy of interest applicable from 1-6-2003 --Refund pertaining to assessment year 2001-02--Not applicable--Income-tax Act, 1961, s. 234D-- Kochi Refineries Ltd. v. Deputy CIT (Mumbai) . . . 95

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Double Taxation Avoidance Agreement between USA and India :

Art. 5(2)(l) --Double Taxation Avoidance--American company deputing personnel to Indian company on hire basis--No permanent establishment of American company in India--Deputed personnel under control and supervision of Indian company--No technical services rendered by American company--Indian company reimbursing salary advanced by American company to deputed personnel--No business income from deputation of personnel to Indian company-- Deputy Director of Income-tax (International Taxation) v. Tekmark Global Solutions LLC (Mumbai) . . . 1

Income-tax Act, 1961 :

S. 2(14) --Capital gains--Capital loss--Capital asset--Transfer--Lease of land --Asset held by assessee need not be his own--Assessee acquiring possession of land under an agreement for consideration and later surrendering with a request to transfer its interest under another agreement to third party--Assessee a party to that agreement--Surrender of rights of assessee amounts to extinguishment of his rights in land/capital asset--Is capital loss allowable in hands of assessee-- Asian PPG Industries Ltd . v. Deputy CIT (Mumbai) . . . 17

S. 2(47) --Capital gains--Capital loss--Capital asset--Transfer--Lease of land --Asset held by assessee need not be his own--Assessee acquiring possession of land under an agreement for consideration and later surrendering with a request to transfer its interest under another agreement to third party--Assessee a party to that agreement--Surrender of rights of assessee amounts to extinguishment of his rights in land/capital asset--Is capital loss allowable in hands of assessee-- Asian PPG Industries Ltd . v. Deputy CIT (Mumbai) . . . 17

S. 14A --Interest on borrowed funds--Funds utilised in investment to earn dividend income--Disallowance of 10 per cent. of dividend as expenses incurred for earning dividend under section 14A--No separate disallowance under section 36(1)(iii) required-- Asian PPG Industries Ltd. v. Deputy CIT (Mumbai) . . . 17

S. 36(1)(iii) --Interest on borrowed funds--Funds utilised in investment to earn dividend income--Disallowance of 10 per cent. of dividend as expenses incurred for earning dividend under section 14A--No separate disallowance under section 36(1)(iii) required-- Asian PPG Industries Ltd. v. Deputy CIT (Mumbai) . . . 17

S. 37 --Business expenditure--Ascertained or contingent liability--Mercantile system of accounting--Interest on loan--Liability not entered in books of account--Interest liability to be allowed since assessee following mercantile system of accounting-- Deputy CIT v. Dune Leasing and Finance Ltd. (Delhi) . . . 65

----Business expenditure--Disallowance--Payments made to staff club--Expenditure incurred for business purpose--Not to be disallowed under section 40A(9)-- Kochi Refineries Ltd. v. Deputy CIT (Mumbai) . . . 95

----Capital or revenue expenditure--Expenditure incurred for repairs of plant and machinery--Is revenue expenditure-- Kochi Refineries Ltd. v. Deputy CIT (Mumbai) . . . 95

S. 48, Expln. (iii) --Capital gains--Long-term capital gains--Computation--Cost of acquisition--Assessee inheriting property--Previous owner acquiring property prior to 1981-82--Indexation to be with reference to 1981-82-- Asst. CIT v. Syed Maqbul Hussain (Chennai) . . . 44

----Capital gains--Long-term capital gains--Computation--Determination of cost of acquisition--Inheritance of property in 1993--Property acquired by previous owner prior to 1981--Direction to adopt cost of acquisition as on April 1, 1981 justified-- Asst. CIT v. Syed Maqbul Hussain (Chennai) . . . 44

S. 55(2)(b) --Capital gains--Long-term capital gains--Computation--Determination of cost of acquisition--Inheritance of property in 1993--Property acquired by previous owner prior to 1981--Direction to adopt cost of acquisition as on April 1, 1981 justified-- Asst. CIT v. Syed Maqbul Hussain (Chennai) . . . 44

S. 68 --Income from undisclosed sources--Cash credits--Genuineness of transaction--Amount shown as receipt of share application money--Share applicants not found at given addresses--No further proof of existence of share applicants--Failure to conduct necessary enquiries by authorities--Matter remanded to examine nature of credit-- ITO v. Omega Biotech Ltd. (Delhi) . . . 72

S. 80-IB(iii), (iv) --Industrial undertaking--Special deduction--Manufacture--Assembling activity amounts to manufacturing activity--Activity requiring more than ten workers--Conditions under section 80-IB fulfilled--Assessee entitled to deduction-- Chiranjjeevi Wind Energy Ltd. v. Asst. CIT (Chennai) . . . 9

S. 80M --Inter-corporate dividend--Special deduction under section 80M--State Government undertaking investing in companies promoted by it and those encouraged by it--Activities constituted single indivisible business--Special deduction available on gross dividend-- Deputy CIT v. Tamilnadu Industrial Development Corporation Ltd. (Chennai) . . . 79

S. 80P --Co-operative society--Special deduction--Interest income earned on deposits--Not deductible-- Sri Laxminarayana Swamy Co-operative Society Ltd. v. ITO (Bangalore) . . . 27

----Co-operative society--Special deduction--Mutual concern--Objective of registered co-operative society to make profits and declare dividends to its members--Society not entitled to exemption on concept of mutuality-- Sri Laxminarayana Swamy Co-operative Society Ltd. v. ITO (Bangalore) . . . 27

S. 80P(2)(a)(iii), (iv) --Co-operative society--Special deduction--Operational income--Claim on ground society carrying out specified activity for common benefit of members--Assessing authority to verify activities of assessee-- Sri Laxminarayana Swamy Co-operative Society Ltd. v. ITO (Bangalore) . . . 27

S. 115JB --Book profit--Computation--Provision made for bad and doubtful debts in assessment year 1998-99--Assessee withdrawing and crediting in profit and loss account--Assessee is correct in excluding amount while computing income under section 115JB-- Kochi Refineries Ltd. v. Deputy CIT (Mumbai) . . . 95

----Company--Book profits--Computation--Assessing Officer cannot reopen audited and certified account passed in general body meeting filed before Registrar of Companies--Interest income not credited to accounts--Addition of interest income to profit and loss account--Interest income cannot be added to book profit -- Deputy CIT v. Dune Leasing and Finance Ltd. (Delhi) . . . 65

S. 144 --Best judgment assessment--Addition--No defects pointed out in books of account--Low profit in a particular year by itself cannot be a ground for invoking powers of best judgment assessment--Rejection of books of account not proper-- Deputy CIT v. Paras Dyeing and Printing Mills P. Ltd. (Ahmedabad) . . . 29

S. 145(3) --Best judgment assessment--Addition--No defects pointed out in books of account--Low profit in a particular year by itself cannot be a ground for invoking powers of best judgment assessment--Rejection of books of account not proper-- Deputy CIT v. Paras Dyeing and Printing Mills P. Ltd. (Ahmedabad) . . . 29

S. 234D --Refund--Interest on excess refund--Levy of interest applicable from 1-6-2003--Refundng to assessment year 2001-02--Not applicable-- Kochi Refineries Ltd. v. Deputy CIT (Mumbai) . . . 95

-CA.RAJU SHAH

 

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