Thursday, December 10, 2009

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)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
HIGH COURTS
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
----Ratio of case when applicable-- CIT v. P. R. Seshadri (Karn) . . . 377
----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
Words and phrases --Meaning of "manufacture"-- CIT v. Alfa Lamination (Guj) . . . 348
----Meaning of "manufacture"-- CIT v. Janak Raj Bansal (HP) . . . 417

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Constitution of India :
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
Finance Act, 1983 :
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
Income-tax Act, 1961 :
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
ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))
Volume 6 : Part 7 (Issue dated : 13-12-2010)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
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

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Double Taxation Avoidance Agreement between India and the U. K :
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
Income-tax Act, 1961 :
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