New Notifications, Business Expenditure, Return, Refund, Exemption u/s.10(23C), Search and Seizure

---------- Forwarded message ----------

From: CA Saiprasad Bagrecha <saiprasadbagrecha@gmail.com>
Date: Wed, Dec 28, 2011 at 11:21 AM
Subject: {jalgaoncas} New Notifications, Business Expenditure, Return, Refund, Exemption u/s.10(23C), Search and Seizure
To:


Dear All,

Find enclosed text on the above topics.

http://www.indiantaxhome.com/2011/12/notification-fno-1-10-2011-ns-ii-dated.html

Notification F.No. 1-10-2011-NS-II dated 25 November 2011

It is notified for general information that the sale of Kisan Vikas Patras shall be discontinued

with effect from the close of business on Wednesday, the 30th November, 2011.

 

 

Notification F.No. 1-12-2011-NS-II, dated 25 November 2011

 

In exercise of the powers conferred by clause (1) of article 283 of the Constitution, the President

hereby makes the following further amendments in the National Small Savings Fund (Custody

and Investment) Rules, 2001, namely:-

 

 

http://www.indiantaxhome.com/2011/12/exemption-under-s-1023c.html

 

Exemption under s 10(23C)

 

The assessee, Delhi Music Society, teaching and promoting all forms of music and dance, western, Indian or any other, is entitled to an exemption under s 10(23C), as held by DelHC in Delhi Music Society v Director General of Income Tax — In favour of: The assessee; WP (C) No 4726/2011.

 

http://www.indiantaxhome.com/2011/12/section-194c-vis-vis-s-194-i.html

 

Section 194C vis-à-vis s 194-I

 

 

The contract for transportation in respect of chartering a helicopter/aircraft does not attract TDS under s 194-I and TDS is liable to be deducted under s 194C, as held by MumTrib in SKIL Infrastructure Ltd v ITO — In favour of: The assessee.

 

 

http://www.indiantaxhome.com/2011/12/appeal.html

 

Appeal

 

Findings of facts which do not give rise to a substantial question of law are not liable to be interfered with in an appeal under s 260A, as held by PHHC in CIT, Ludhiana v Ashok Kumar Dhir — In favour of: The assessee; ITA No 598 of 2010 (O&M).

 

http://www.indiantaxhome.com/2011/12/refund.html

 

Refund

 

If an issue is decided in favour of the assessee giving rise to a refund in an earlier year, that refund cannot be adjusted under s 245 on account of the demand on the same issue in a subsequent year, as held by DelHC in Maruti Suzuki India Limited v Dy CIT — In favour of: The assessee; Writ Petition (Civil) No 2252/2011.

 

 

http://www.indiantaxhome.com/2011/12/business-expenditure.html

 

Business expenditure

 

The expenditure incurred on maintenance and repair on the personal property cannot be set-off and allowed as business expenditure under s 37, as held by DelHC in Mira Kulkarni v ACIT — In favour of: The revenue; ITA 199/2010.

 

Where the assessee failed to show that expenses incurred were wholly and exclusively for the purposes of the hotel business, the same cannot be allowed under s 37(1).

 

 

http://www.indiantaxhome.com/2011/12/exemption-under-s-10a.html

 

 

Exemption under s 10A

 

 

The method of headcount followed by the assessee cannot be discarded merely because there can be more than one method of apportioning the common expenses between the STP and non-STP domestic units, particularly when the same has been followed consistently by the assessee in the past and has also been accepted by the department, as held by DelHC in CIT v EHPT India P Ltd — In favour of: The assessee; ITA Nos 1172, 1194/2008.

 

http://www.indiantaxhome.com/2011/12/exemption-under-s-1023c_27.html

 

Exemption under s 10(23C)

 

 

Merely because some students have challenged the admission in the medical college run by the trust and the High court declaring certain admissions as illegal would not come in the assessee's claim for an exemption under s 10(23C), particularly when the SLP against such an order is pending before the Apex Court and where the assessee has been granted an exemption in subsequent years, as held by RajHC in Geetanjali University Trust v CCIT and Anr — In favour of: The assessee; SB Civil Writ Petition No 11799/2010.

 

 

http://www.indiantaxhome.com/2011/12/deduction-under-s-80-ib.html

 

Deduction under s 80-IB

 

Filing of an audit report in Form 10CCB for claiming a deduction under s 80-IB.

 

Cash credits — Where the identity and creditworthiness of the companies who had allegedly paid the share application money and the genuineness of the transaction had not been proved, the AO was justified in making an addition under s 68, as held by MadHC in CIT v AKS Alloys (P) Ltd — In favour of: The assessee.

 

 

http://www.indiantaxhome.com/2011/12/depreciation.html

 

Depreciation

 

 

Benefit of s 32 is available only to owner of asset — Since assessee was not owner of machinery, he is not entitled to claim depreciation on machinery bought by it on hire purchase basis and leased by him to third party, held by DelHC in Sai Industries Ltd v ACIT — In favour of: The revenue.

 

 

http://www.indiantaxhome.com/2011/12/business-expenditure_27.html

 

Business Expenditure

 

Disallowance under s 14A — Matter remitted to consider issue of disallowance since assessee failed to discharge onus placed upon him in establishing that borrowed funds had indeed been utilised for purpose of their business purposes nor had assessee proved that aforesaid investment had been made in shares out of their own interest-free funds, held by DelTrib in DCIT v Jay Pee Ventures (P) Ltd — In favour of: Others.

 

 

http://www.indiantaxhome.com/2011/12/return.html

 

Return

 

Filing — If assessee rectifies defect in return even after expiry of fifteen days or further period allowed, but before assessment is made, AO may condone delay and treat return as valid return, held by MumHC in Crawford Bayley & Co v Union of India & Ors — In favour of: The assessee.

 

http://www.indiantaxhome.com/2011/12/search-and-seizure.html

 

Search and seizure

 

Quashing of warrant of authorisation — In absence of any relevant material with authorities, which would have enabled them to have "a reason to believe" that action under s 132(1) of Act was essential, warrant of authorisation for conducting search is liable to be quashed and consequently notice under s 153A is also bad in law, held by MumHC in Spacewood Furnishers (P) Ltd and Others v DGIT and Others — In favour of: The assessee.

 

--

=======================================================================================
CA Saiprasad P. Bagrecha 

Mob:- +91- 98235 26824 / + 91-82750 32822

CBEC had extended the date of submission of half yearly return for the period April 2011 to September 2011, from 26th Dec. 2011 to 6th Jan. 2012

---------- Forwarded message ----------
From: CA. Hardik P. Shah <hpshah_1999@yahoo.com>
Date: Fri, Dec 30, 2011 at 11:09 AM
Subject: CBEC had extended the date of submission of half yearly return for the period April 2011 to September 2011, from 26th Dec. 2011 to 6th Jan. 2012

CBEC had extended the date of submission of half yearly return for the period April 2011 to September 2011, from 26th Dec. 2011 to 6th Jan. 2012

https://docs.google.com/open?id=1oQZfLjvzFmoB4aoLCr8MRp0de_q9pYmCPu-Xrl1FqV7FkQoLXC0R530blxiG

ITR VOL 340 PART 1

 

INCOME TAX REPORTS (ITR)

Volume 340 : Part 1 (Issue dated 2-1-2012)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

SUPREME COURT

Reassessment --Notice after four years--Validity--Supreme Court--Notice valid--Assessee at liberty to raise contentions on merits--Income-tax Act, 1961, ss. 14A, 147-- Honda Siel Power Products Ltd. v. Deputy CIT . . . 64

Transfer of property --Immovable property--Registered deed of conveyance only mode of legal transfer--General power of attorney sales or sale agreement/general power of attorney/will transfers--Not valid mode of transfer and not to create title to or interest in property--Genuine powers of attorney not affected--Transfer of Property Act, 1882, ss. 5, 53A, 54--Indian Stamp Act, 1899, s. 27--Registration Act, 1908, s. 17-- Suraj Lamp and Industries Pvt. Ltd . v. State of Haryana . . . 1

HIGH COURTS

Agricultural income --Process ordinarily employed to send produce fit for market--Conversion of raw peas to pea seeds was such a process--Income derived from pea seeds constituted agricultural income--Income-tax Act, 1961, s. 2(1A)(b)(ii), (iii)-- CIT v. Rana Gurjit Singh (P&H) . . . 108

Business --Capital gains--Purchase and sale of shares--Finding that transaction constituted business--Finding based on frequency, magnitude and volume of transactions--Finding justified--Profits on transactions assessable as business income--Income-tax Act, 1961, ss. 2, 28, 45, 111A-- P. V. S. Raju v. Addl. CIT (AP) . . . 75

Business expenditure --Disallowance of expenditure paid for unlawful purpose--Director of company kidnapped while on business tour--Amount paid as ransom--Deductible--Income-tax Act, 1961, s. 37(1), Expln.-- CIT v. Khemchand Motilal Jain, Tobacco Products P. Ltd. (MP) . . . 99

----Provision for warranty claims--Provision made on basis of scientific method--Allowable as business expenditure--Income-tax Act, 1961, s. 37-- Kone Elevator India Pvt. Ltd. v. Asst. CIT (Mad) . . . 46

----Tribunal allowing expenditure being one-time expenditure in view of decision of board of directors--Findings of fact--Income-tax Act, 1961-- CIT v. Housing Board, Haryana (P&H) . . . 67

Charitable purposes --Charitable trust--Registration--Objects of trust should be charitable--Activities must be genuine--Income-tax Act 1961, s. 12AA-- CIT v. Lucknow Educational and Social Welfare Society (All) . . . 86

Company --Dividend--Deemed dividend--Legal fiction in section 2(22)(e) cannot be extended to shareholder--Loan received by assessee-company from another company--Persons having substantial interest in assessee-company and company which gave loan--Assessee-company not shareholder of company which gave loan--Loan not assessable as deemed dividend--Income-tax Act, 1961, s. 2(22)(e)-- CIT v. Ankitech P. Ltd . (Delhi) . . . 14

Income --Computation of income--Law applicable--Effect of section 14A--Disallowance of expenditure in respect of tax-free income--Proviso to section 14A does not bar original assessment on the basis of section 14A--Income-tax Act, 1961, s. 14A-- Honda Siel Power Products Limited v. Deputy CIT (Delhi) . . . 53

Income from undisclosed sources --Amount shown as profit from purchase and sale of shares--Facts showing that transaction was not genuine--Addition of amount to income of assessee--Justified--Income-tax Act, 1961-- CIT v. Rana Gurjit Singh

(P&H) . . . 108

Interpretation of taxing statutes --Legal fiction--CBDT Circular--Circulars not binding on High Court-- CIT v. Ankitech P. Ltd . (Delhi) . . . 14

Precedent --Effect of decision of Supreme Court--Effect of decision in CIT v. Narendra Doshi [2002] 254 ITR 606-- Haralal Harendralal Roy Estates Ltd . v. Union of India (Cal) . . . 69

Reassessment --Notice--Dividend--Disallowance of expenditure relating to exempted income--Restriction on reopening assessments completed before 1-4-2001--Reassessment for assessment year 2001-02 to disallow expenditure to earn exempt income--Notice not valid--Income-tax Act, 1961, ss. 14A, 147, 148-- CIT v. PNB Finance and Industries Ltd. (Delhi) . . . 50

----Reassessment after four years--Failure to disclose material facts necessary for assessment--Failure to disclose that expenses related to tax-free income--Reassessment proceedings--Valid--Income-tax Act, 1961, ss. 14A, 147-- Honda Siel Power Products Limited v. Deputy CIT (Delhi) . . . 53

----Validity--Reasons for reassessment not furnished to assessee before completion of assessment--Reassessment not valid--Income-tax Act, 1961, s. 147-- CIT v. Videsh Sanchar Nigam Ltd . (Bom) . . . 66

----Validity--Reassessment not for correction of errors--Assessee earning income from dealership in oil and plying oil tanker--Return disclosing income from both sources and assessment after considering evidence--Reassessment to recompute income from plying oil tanker--Not valid--Income-tax Act, 1961, ss. 147, 148-- Kumar Stores v. CIT

(Patna) . . . 90

Refund --Interest--Delay in paying interest--Interest payable on interest--Income-tax Act, 1961, s. 244(1A)-- Haralal Harendralal Roy Estates Ltd . v. Union of India (Cal) . . . 69

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act 1961 :

S. 2 --Business--Capital gains--Purchase and sale of shares--Finding that transaction constituted business--Finding based on frequency, magnitude and volume of transactions--Finding justified--Profits on transactions assessable as business income-- P. V. S. Raju v. Addl. CIT (AP) . . . 75

S. 2(1A)(b)(ii), (iii) --Agricultural income--Process ordinarily employed to send produce fit for market--Conversion of raw peas to pea seeds was such a process--Income derived from pea seeds constituted agricultural income-- CIT v. Rana Gurjit Singh

(P&H) . . . 108

S. 2(22)(e) --Company--Dividend--Deemed dividend--Legal fiction in section 2(22)(e) cannot be extended to shareholder--Loan received by assessee-company from another company--Persons having substantial interest in assessee-company and company which gave loan--Assessee-company not shareholder of company which gave loan--Loan not assessable as deemed dividend-- CIT v. Ankitech P. Ltd .

(Delhi) . . . 14

S. 12AA --Charitable purposes--Charitable trust--Registration--Objects of trust should be charitable--Activities must be genuine-- CIT v. Lucknow Educational and Social Welfare Society (All) . . . 86

S. 14A --Income--Computation of income--Law applicable--Effect of section 14A--Disallowance of expenditure in respect of tax-free income--Proviso to section 14A does not bar original assessment on the basis of section 14A-- Honda Siel Power Products Limited v. Deputy CIT (Delhi) . . . 53

----Reassessment--Notice--Dividend--Disallowance of expenditure relating to exempted income--Restriction on reopening assessments completed before 1-4-2001--Reassessment for assessment year 2001-02 to disallow expenditure to earn exempt income--Notice not valid-- CIT v. PNB Finance and Industries Ltd.

(Delhi) . . . 50

----Reassessment--Notice after four years--Validity--Supreme Court--Notice valid--Assessee at liberty to raise contentions on merits-- Honda Siel Power Products Ltd. v. Deputy CIT (SC) . . . 64

----Reassessment--Reassessment after four years--Failure to disclose material facts necessary for assessment--Failure to disclose that expenses related to tax-free income--Reassessment proceedings--Valid-- Honda Siel Power Products Limited v. Deputy CIT (Delhi) . . . 53

S. 28 --Business--Capital gains--Purchase and sale of shares--Finding that transaction constituted business--Finding based on frequency, magnitude and volume of transactions--Finding justified--Profits on transactions assessable as business income-- P. V. S. Raju v. Addl. CIT (AP) . . . 75

S. 37 --Business expenditure--Provision for warranty claims--Provision made on basis of scientific method--Allowable as business expenditure-- Kone Elevator India Pvt. Ltd. v. Asst. CIT (Mad) . . . 46

S. 37(1), Expln. --Business expenditure--Disallowance of expenditure paid for unlawful purpose--Director of company kidnapped while on business tour--Amount paid as ransom--Deductible-- CIT v. Khemchand Motilal Jain, Tobacco Products P. Ltd. (MP) . . . 99

S. 45 --Business--Capital gains--Purchase and sale of shares--Finding that transaction constituted business--Finding based on frequency, magnitude and volume of transactions--Finding justified--Profits on transactions assessable as business income-- P. V. S. Raju v. Addl. CIT (AP) . . . 75

S. 111A --Business--Capital gains--Purchase and sale of shares--Finding that transaction constituted business--Finding based on frequency, magnitude and volume of transactions--Finding justified--Profits on transactions assessable as business income-- P. V. S. Raju v. Addl. CIT (AP) . . . 75

S. 147 --Reassessment--Notice--Dividend--Disallowance of expenditure relating to exempted income--Restriction on reopening assessments completed before 1-4-2001--Reassessment for assessment year 2001-02 to disallow expenditure to earn exempt income--Notice not valid-- CIT v. PNB Finance and Industries Ltd.

(Delhi) . . . 50

----Reassessment--Notice after four years--Validity--Supreme Court--Notice valid--Assessee at liberty to raise contentions on merits-- Honda Siel Power Products Ltd. v. Deputy CIT (SC) . . . 64

----Reassessment--Reassessment after four years--Failure to disclose material facts necessary for assessment--Failure to disclose that expenses related to tax-free income--Reassessment proceedings--Valid-- Honda Siel Power Products Limited v. Deputy CIT (Delhi) . . . 53

----Reassessment--Validity--Reasons for reassessment not furnished to assessee before completion of assessment--Reassessment not valid-- CIT v. Videsh Sanchar Nigam Ltd . (Bom) . . . 66

----Reassessment--Validity--Reassessment not for correction of errors--Assessee earning income from dealership in oil and plying oil tanker--Return disclosing income from both sources and assessment after considering evidence--Reassessment to recompute income from plying oil tanker--Not valid-- Kumar Stores v. CIT

(Patna) . . . 90

S. 148 --Reassessment--Notice--Dividend--Disallowance of expenditure relating to exempted income--Restriction on reopening assessments completed before 1-4-2001--Reassessment for assessment year 2001-02 to disallow expenditure to earn exempt income--Notice not valid-- CIT v. PNB Finance and Industries Ltd.

(Delhi) . . . 50

----Reassessment--Validity--Reassessment not for correction of errors--Assessee earning income from dealership in oil and plying oil tanker--Return disclosing income from both sources and assessment after considering evidence--Reassessment to recompute income from plying oil tanker--Not valid-- Kumar Stores v. CIT

(Patna) . . . 90

S. 244(1A) --Refund--Interest--Delay in paying interest--Interest payable on interest-- Haralal Harendralal Roy Estates Ltd . v. Union of India

(Cal) . . . 69

Indian Stamp Act, 1899 :

S. 27 --Transfer of property--Immovable property--Registered deed of conveyance only mode of legal transfer--General power of attorney sales or sale agreement/general power of attorney/will transfers--Not valid mode of transfer and not to create title to or interest in property--Genuine powers of attorney not affected-- Suraj Lamp and Industries Pvt. Ltd . v. State of Haryana (SC) . . . 1

Registration Act, 1908 :

S. 17 --Transfer of property--Immovable property--Registered deed of conveyance only mode of legal transfer--General power of attorney sales or sale agreement/general power of attorney/will transfers--Not valid mode of transfer and not to create title to or interest in property--Genuine powers of attorney not affected-- Suraj Lamp and Industries Pvt. Ltd . v. State of Haryana (SC) . . . 1

Transfer of Property Act, 1882 :

Ss. 5, 53A, 54 --Transfer of property--Immovable property--Registered deed of conveyance only mode of legal transfer--General power of attorney sales or sale agreement/general power of attorney/will transfers--Not valid mode of transfer and not to create title to or interest in property--Genuine powers of attorney not affected-- Suraj Lamp and Industries Pvt. Ltd . v. State of Haryana (SC) . . . 1

 

CA. RAJU SHAH

RBI PENALISES 19 BANKS

---------- Forwarded message ----------
From: Ramachandran Mahadevan <ramachandran.mahadevan@gmail.com>
Date: Thu, Dec 22, 2011 at 5:36 PM


Moneylife » newsviewer » companies-sectors »
rbi-penalises-19-banks-for-flouting-derivative-norms-govt RBI
penalises 19 banks for flouting derivative norms: GovtDecember 21,
2011 08:25 AM |  Moneylife Digital Team

The RBI had imposed penalties on 19 commercial banks for contravention
of various instructions issued by the central bank in respect of
derivatives such as failure to carry out due diligence in regard to
suitability of products and selling derivatives products to users not
having risk management policies
New Delhi: The Reserve Bank of India (RBI) has imposed penalties on 19
commercial banks, including SBI, HDFC Bank, ICICI Bank and Citibank,
for violating norms on derivatives, reports PTI.
The RBI has informed that it had imposed penalties on 19 commercial
banks on 26 April 2011, for contravention of various instructions
issued by RBI in respect of derivatives such as failure to carryout
due diligence in regard to suitability of products and selling
derivatives products to users not having risk management policies,
minister of state for finance Namo Narain Meena said in a written
reply in the Rajya Sabha.
RBI has issued show-cause notices to banks. In response to this, banks
submitted their written replies, he said.
"On a careful examination of the banks' written replies and the oral
submissions made during the personal hearings, the RBI found that the
violations were established and the penalties were thus imposed," he
said.
While a fine of Rs15 lakh each was slapped on Axis Bank, Barclays,
HDFC Bank, ICICI Bank, Kotak Mahindra and Yes Bank, Rs10 lakh each was
imposed on Citibank, BNP Paribas, SBI, Credit Agricole -CIB,
Development Credit Bank, ING Vysya Bank, Royal Bank of Scotland and
Standard Chartered Bank, he said.
Besides, a fine of Rs5 lakh each was slapped on Bank of America, DBS
Bank, Deutsche Bank, HSBC and J P Morgan Chase Bank, he added.
Mr Meena also said that RBI has informed that the estimated loss of
Rs33,000 crore in the foreign exchange derivative transaction may not
be the actual losses but the gross Market to Market (MTM) gains or
losses to the customers.
MTM gains or losses are basically an accounting concept wherein the
financial institutions would record the value of outstanding financial
contracts at fair value while preparing financial statements, he added

--


CA Ramachandran Mahadevan,M.Com.,F.C.A.,
I-708,Mantri Tranquil,Subramanyapura Post,
Bangalore-560061
Karnataka,India.
+91 80 42011024

CA Amendment Bill, 2010 - as passed by Lok Sabha

---------- Forwarded message ----------
From: Shree Guru Kripa's Institute of Management - G Sekar, FCA gsekar@shrigurukripa.com

Chartered Accountants (Amendment) Bill, 2010

(as passed by Lok Sabha on 19.12.2011)

 

Dear Professional Colleagues,

 

The Lok Sabha passed on 19.12.2011 the much awaited Chartered Accountants (Amendment) Bill, 2010, which provides for the following:

 

Firstly, to enable the Members of the Institute of Chartered Accountants of India to form Multi Disciplinary firms i.e Partnership with other recognised professions and offer Multi Professional services in a competitive and commercial manner. It permits to enter into partnership with prescribed profession.

 

Secondly, to extend the benefits of the Limited Liability Partnership Act, 2008 to the Firms of Chartered Accountants under the Chartered Accountants Act, 1949.

 

Though the amendments are brought in the Chartered Accountants Regulations, the existing Companies Act 1956 requires an amendment as follows, till the New Companies Bill is enacted.

Section 226 of Companies Act, 1956

Clause 141 of the New Companies Bill

226(1) A person shall not be qualified for appointment as auditor of a company unless he is a chartered accountant within the meaning of the Chartered Accountants Act, 1949 (38 of 1949): Provided that a firm whereof all the partners practising in India are qualified for appointment as aforesaid may be appointed by its firm name to be auditor of a company, in which case any partner so practising may act in the name of the firm.

141(1) A person shall be eligible for appointment as an auditor of a company only if he is a chartered accountant:   Provided that a firm whereof majority of partners practising in India are qualified for appointment as aforesaid may be appointed by its firm name to be auditor of a Company

The Chartered Accountants Act (as passed in the Parliament) permits Partnership with SPECIFIED PROFESSIONS. Specified Professions are already notified by the Council which includes (a) Company Secretary; (b) Cost Accountant; (c) Advocate; (d) Engineer; (e) Architect; (f) Actuary; and (g) Members of Professional Bodies outside India relating to accountancy and recognized council.

 If the partnership as per above is entered, the firm cannot be appointed as Auditor for a Company as the existing act requires all the partners in the Firm to be a practicing CAs. Whereas in the New Companies Bill, the corresponding provision is carefully worded as a firm whereof majority of partners practicing in India.

 

Since, the Companies Bill did not find its way in the present winter session (as per the press announcements), the existing Companies Act will see the amendments soon.

 

Thanks and Regards,

G Sekar, FCA 

Chennai

 

www.shrigurukripa.com

To Download the Copy of CA Amendment Bill, 2010: CLICK HERE - CA BILL, 2010

 

Case Law - Eligibility of deduction under section 54

---------- Forwarded message ----------
From: CA. Rahul Bajaj ca.rahulbajaj@gmail.com

Eligibility of deduction under section 54 where new house purchased after due date prescribed under section 139(1) but before period prescribed under section 139(4)

Where the assessee purchased new house after due date of return prescribed under section 139(1) but before the period prescribed under section 139(4), then the deduction under section 54 was available to the assessee.– Vide CIT v. Jagriti Aggarwal (2011) 42(I) ITCL 348(P&H-HC)

Procedure for activation TAN account at TIN.

---------- Forwarded message ----------
From: CA UMESH MALVADE caumesh20@gmail.com

 

Dear Professionals,

 

Tax Information Network (TIN) has always been providing various facilities to deductors.

 

One such facility provided under TIN is authenticated login (TAN account) provided to deductors/collectors at TIN website. Under this login, following functions are provided:

 

·         Online request of consolidated TDS/TCS file: Useful for preparation of correction statement.

·         Online generation of Form 16A for valid PANs.

·         Online download of default details generated by Income Tax Department.

·         Bulk upload of Form 15CA records.

·         Update of TAN account contact details.

 

As you may be aware, for creating authenticated login (TAN account), deductor/ collector has to register TAN online at TIN website. Based on the feedback received from the deductors as well as Income Tax Department, the procedure for registering as well as getting the various facilities is simplified/modified regularly. We have now made some changes in the TAN registration process. You are requested to go through the same very carefully. Very soon, preparation of correction statement will have to be made mandatorily using consolidated file provided by TIN. In view of the same, you are requested to create and activate the TAN account at TIN and avail the aforementioned facilities offered by TIN, if not done already.

 

Detailed revised procedure for creating "TAN Account" and activation of TAN account is as under.

 

·         On registration, an e-mail containing link will be sent to registered e-mail ID (s).

·         User will be required to click on the link for activating the TAN account. This link is sent for verifying the validity of e-mail ID.

·         On clicking the link, user will be prompted to provide TAN and corresponding 12 digit TAN registration number.

·         If the TAN & TAN registration number matches, then TAN account will be activated within 24 hours.

·         TAN account will be active if at least one of the e-mail ID is verified.

·         TAN account will not be activated, If the user does not click link or does not provide respective TAN and TAN registration number and the same is verified.

·         If user has provided two e-mail ID (s) on registration/ re-registration, then the TAN account will be activated even if the user clicks on the link (as mentioned above) sent at any one of the registered e-mail ID.

·         On activation of TAN account, an e-mail containing the user ID in password protected PDF file will be sent to registered e-mail ID (s). On receipt of this e-mail, user can login to TAN account.

 

Further the user may re-register the TAN if user has:

·         Forgotten the TAN account details like user ID, TAN registration no. (12 digit alphanumeric number) or

·         Would like to update the contact details of TAN account ,wherein the user does not know the login credentials of TAN account,

 

Procedure for activation of TAN account on re-registration of TAN would be the same as applicable on first time registration of TAN (as above). For detailed procedure for registration of TAN online, online request of consolidated file/ Form 16A file and default details you may download the e-tutorial available at TIN website under the download section.

 

This is system generated mail. Please do not reply to this email ID. For any query related to the above you may contact TIN Call centre at:

 

Tel: 91-20-2721 8080.

Fax: 91-20-2721 8081.

Email ID: tin_returns@nsdl.co.in 

 

On behalf of Tax Information Network of the Income Tax Department.

 

 

ITR VOL 339 PART 3

 

INCOME TAX REPORTS (ITR)

Volume 339 : Part 3 (Issue dated 12-12-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Business expenditure --Disallowance--Payment in cash exceeding prescribed limit--No evidence to indicate that assessee made any payment in excess--Section 40A(3) not applicable merely on basis of estimate-- Income-tax Act, 1961, s. 40A(3)-- CIT v. Ratanlal Vyaparilal Jain (Guj) . . . 351

Capital or revenue expenditure --Expenditure on dismantling of cell room and construction of new cell room--Capital expenditure--Expenditure on transformer, pumping set and motors--Revenue expenditure--Income-tax Act, 1961, s. 37-- CIT v. Modi Industries Ltd. (Delhi) . . . 467

----Expenditure on setting up new sugar units--Expansion of existing business--Is revenue expenditure--Income-tax Act, 1961, ss. 36, 37-- CIT v. Sakthi Sugars Ltd .(Mad) . . . 400

----Renovation of house property --Assessing Officer not giving credit to investment disclosed by assessee and others-- Tribunal reducing addition considering expenditure disclosed in returns--Findings of fact--Income-tax Act, 1961-- CIT v. Ratanlal Vyaparilal Jain (Guj) . . . 351

Deduction of tax at source --Failure to deduct--Registered office of assessee at New Delhi--Assessee filing returns and assessed at New Delhi--Notice under sections 201 and 201(1A) by Assessing Officer, Mumbai for not deducting tax at source on lease premium paid to MMRDA--Assessing Officer, Mumbai has no jurisdiction--Competent authority at New Delhi has jurisdiction--Income-tax Act, 1961, s. 201(1A)-- Indian Newspaper Society v. ITO (TDS) (Bom) . . . 365

Exemption --Educational institution--Application for exemption--Delay in application--Delay cannot be condoned--Income-tax Act, 1961, s. 10(23C), fourteenth proviso-- R. R. M. Educational Society v. Chief CIT (AP) . . . 323

----Educational institution--Application for exemption--Law applicable--Effect of fourteenth proviso to section 10(23C) inserted w.e.f. 1-6-2006--Limitation laid down for application--Delay in application cannot be condoned--Income-tax Act, 1961, s. 10(23C)(vi)-- Aurora Educational Society v. Chief CIT (AP) . . . 333

----Educational institution--Condition precedent--Institution should exist solely for purposes of education--Institution having other objects--Amendment of objects in August 2009--No certificate from Registrar of Societies regarding such alteration--Institution not entitled to exemption for assessment years 2004-05 to 2008-09--Income-tax Act, 1961, s. 10(23C)(vi)-- Aurora Educational Society v. Chief CIT (AP) . . . 333

----Educational institution--Condition precedent for exemption under section 10(23C)(vi)--Institution must exist solely for purposes of education--Assessee having eradication of unemployment as one of its objects--Not entitled to exemption--Income-tax Act, 1961, s. 10(23C)(vi)-- R. R. M. Educational Society v. Chief CIT (AP) . . . 323

----Export--Condition precedent for claiming exemption under section 10B--Law applicable--Effect of amendment of section 10B w.e.f. 1-4-1994--No condition regarding quantum of export prior to 1-4-1994--Income-tax Act, 1961, s. 10B-- CIT v. BAEHAL Software Ltd. (Karn) . . . 368

Export --Special deduction under section 80HHC--"Processing" of goods--Meaning of "processing"--Cleaning and grading of cardamom do not amount to processing--Assessee not entitled to special deduction under section 80HHC--Income-tax Act, 1961, s. 80HHC-- CIT v. Midland Rubber and Produce Co. Ltd . (Ker) . . . 436

Industrial park --Special deduction--Industrial park scheme--Three categories of industrial parks : those engaged in developing ; those engaged in developing and operating ; and those engaged in maintaining and operating--Assessee engaged in development of industrial park--Assessee providing infrastructural facilities and dividing plot into small units and selling all of them within specified period--Approval obtained from Government--Units not starting production--Not a ground for withdrawal of approval--Notice for such withdrawal can be quashed--Income-tax Act, 1961, s. 80-IA--Industrial Park Scheme, 2002, clause 9--Constitution of India, art. 226-- Ganesh Housing Corporation Ltd . v. Padam Singh, Under Secretary (Guj) . . . 441

Interest-tax --Credit institution--Loans and advances--Meaning of--Trade advance for purchase of goods--Advance adjusted against purchase price and never returned to assessee--Interest on such advance for delay in delivery of goods--Not interest on loan or advance liable to interest-tax--Interest-tax Act, 1974, s. 2(5B)-- CIT v. Integrated Finance Co. Ltd . (Mad) . . . 391

Method of accounting --Rule of consistency--Mercantile system of accounting--Prior period expenses debited in following year--Method consistently followed by assessee and accepted by Department--No evidence of distortion of profits--Method could not be rejected--Income-tax Act, 1961, s. 145-- CIT v. Jagatjit Industries Ltd .(Delhi) . . . 382

Penalty --Concealment of income--Furnishing of inaccurate particulars--Advance on account of development agreement--Assessee disclosing receipt but not offering to tax in return--Assessee also disclosing amounts received from time to time in relevant years--Assessing Officer not sure as to whether assessee liable to pay capital gains tax and if so in which assessment year and under which head of income--Penalty cannot be imposed--Income-tax Act, 1961, s. 271(1)(c)-- Metal Rolling Works Ltd . v. CIT (Bom) . . . 373

Salary --Profits in lieu of salary--Meaning of expression before insertion of clause (iii) of section 17(3) w.e.f. 1-4-2002--Ex gratia payment by employer on termination of service in accounting year relevant to assessment year 2001-02--Not assessable as profits in lieu of salary--Income-tax Act, 1961, s. 17(3)(i), (iii)-- CIT v. Deepak Verma (Delhi) . . . 475

Search and seizure --Block assessment--Undisclosed income--Assessment on estimation--Gross profit--Commissioner (Appeals) working out gross profit at 6 per cent. whereas Tribunal at 5 per cent.--Finding of fact--Income-tax Act, 1961-- CIT v. Ratanlal Vyaparilal Jain (Guj) . . . 351

----Block assessment--Undisclosed income--Cheque discounting and bill discounting--Tribunal finding no separate addition on bill discounting required as it already included in cheque discounting--Findings of fact--Income-tax Act, 1961-- CIT v. Ratanlal Vyaparilal Jain (Guj) . . . 351

----Block assessment--Undisclosed income--Debit interest--Addition on basis of seized paper--Assessee not claiming interest as deduction--Issue not to be adjudicated--Income-tax Act, 1961-- CIT v. Ratanlal Vyaparilal Jain (Guj) . . . 351

----Block assessment--Undisclosed income--Jewellery--Tribunal finding source of jewellery held by family in consonance with general practice in Hindu families--Justified--CBDT Circular No. 1916 dated 11-5-1994-- CIT v. Ratanlal Vyaparilal Jain (Guj) . . . 351

----Prohibitory order under section 132(3)--Condition precedent--Prohibitory order on bank accounts--No evidence that deposits in banks constituted undisclosed income of assessee--Prohibitory order--Not valid--Income-tax Act, 1961, s. 132-- Maa Vaishnavi Sponge Ltd. v. Director General of Income-tax (Investigation) (Orissa) . . . 413

Voluntary disclosure of income --Conditions precedent for benefit under Scheme--Declaration of undisclosed income on or before 31-12-1997--Payment of tax on such income along with declaration or within three months--Declaration to be made before Commissioner--Declaration before Assessing Officer made on 30-12-1997--Declaration forwarded to Commissioner on 31-12-1997--Payment of tax on 31-3-1998--Assessee not entitled to benefit of Scheme--Finance Act, 1997, ss. 66, 67--Voluntary Disclosure of Income Scheme, 1997-- S. Sudarsana Babu v. ITO (Ker) . . . 424

----Conditions precedent for benefit under Scheme--Declaration of undisclosed income on or before 31-12-1997--Payment of tax on such income along with declaration or within three months--Meaning of "month"--Declaration must be made before Commissioner--Declaration before Assessing Officer on 30-12-1997--Declaration forwarded to Commissioner on 31-12-1997 and receipt signed by him--Payment of tax on 31-3-1998--Date of receipt of declaration by Commissioner relevant--Tax paid within time--Assessee entitled to benefit of Scheme--Finance Act, 1997, ss. 62(2), 66, 67, 68(2)--Voluntary Disclosure of Income Scheme, 1997-- S. Sudarsana Babu v. ITO (Ker) . . . 428

Wealth-tax --Exemption--Charitable trust--Kalyana mandapam belonging to trust let out and income applied for charitable purposes--Income held to be from property and granted exemption under Income-tax Act--Kalyana mandapam entitled to exemption under Wealth-tax Act--Wealth-tax Act, 1957, s. 5(1)(i)-- Director of Income-tax (Exemptions) v. Samyuktha Gowda Saraswatha Sabha (Mad) . . . 456

Words and phrases --Meaning of "processing"-- CIT v. Midland Rubber and Produce Co. Ltd. (Ker) . . . 436

Writ --Jurisdiction of High Court discretionary--Interference only to cure substantial injustice--Constitution of India, art. 226-- Aurora Educational Society v. Chief CIT (AP) . . . 333

----Powers of High Court--Notice can be quashed in exceptional cases--Constitution of India, art. 226-- Ganesh Housing Corporation Ltd. v. Padam Singh, Under Secretary (Guj) . . . 441

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Constitution of India ;

Art. 226 --Industrial park--Special deduction--Industrial park scheme--Three categories of industrial parks : those engaged in developing ; those engaged in developing and operating ; and those engaged in maintaining and operating--Assessee engaged in development of industrial park--Assessee providing infrastructural facilities and dividing plot into small units and selling all of them within specified period--Approval obtained from Government--Units not starting production--Not a ground for withdrawal of approval--Notice for such withdrawal can be quashed-- Ganesh Housing Corporation Ltd . v. Padam Singh, Under Secretary (Guj) . . . 441

----Writ--Jurisdiction of High Court discretionary--Interference only to cure substantial injustice-- Aurora Educational Society v. Chief CIT (AP) . . . 333

----Writ--Powers of High Court--Notice can be quashed in exceptional cases-- Ganesh Housing Corporation Ltd. v. Padam Singh, Under Secretary (Guj) . . . 441

Finance Act, 1997 :

S. 62(2) --Voluntary disclosure of income--Conditions precedent for benefit under Scheme--Declaration of undisclosed income on or before 31-12-1997--Payment of tax on such income along with declaration or within three months--Meaning of "month"--Declaration must be made before Commissioner--Declaration before Assessing Officer on 30-12-1997--Declaration forwarded to Commissioner on 31-12-1997 and receipt signed by him--Payment of tax on 31-3-1998--Date of receipt of declaration by Commissioner relevant--Tax paid within time--Assessee entitled to benefit of Scheme--Voluntary Disclosure of Income Scheme, 1997-- S. Sudarsana Babu v. ITO (Ker) . . . 428

S. 66 --Voluntary disclosure of income--Conditions precedent for benefit under Scheme--Declaration of undisclosed income on or before 31-12-1997--Payment of tax on such income along with declaration or within three months--Declaration to be made before Commissioner--Declaration before Assessing Officer made on 30-12-1997--Declaration forwarded to Commissioner on 31-12-1997--Payment of tax on 31-3-1998--Assessee not entitled to benefit of Scheme--Voluntary Disclosure of Income Scheme, 1997-- S. Sudarsana Babu v. ITO (Ker) . . . 424

----Voluntary disclosure of income--Conditions precedent for benefit under Scheme--Declaration of undisclosed income on or before 31-12-1997--Payment of tax on such income along with declaration or within three months--Meaning of "month"--Declaration must be made before Commissioner--Declaration before Assessing Officer on 30-12-1997--Declaration forwarded to Commissioner on 31-12-1997 and receipt signed by him--Payment of tax on 31-3-1998--Date of receipt of declaration by Commissioner relevant--Tax paid within time--Assessee entitled to benefit of Scheme--Voluntary Disclosure of Income Scheme, 1997-- S. Sudarsana Babu v. ITO (Ker) . . . 428

S. 67 --Voluntary disclosure of income--Conditions precedent for benefit under Scheme--Declaration of undisclosed income on or before 31-12-1997--Payment of tax on such income along with declaration or within three months--Declaration to be made before Commissioner--Declaration before Assessing Officer made on 30-12-1997--Declaration forwarded to Commissioner on 31-12-1997--Payment of tax on 31-3-1998--Assessee not entitled to benefit of Scheme--Voluntary Disclosure of Income Scheme, 1997-- S. Sudarsana Babu v. ITO (Ker) . . . 424

----Voluntary disclosure of income--Conditions precedent for benefit under Scheme--Declaration of undisclosed income on or before 31-12-1997--Payment of tax on such income along with declaration or within three months--Meaning of "month"--Declaration must be made before Commissioner--Declaration before Assessing Officer on 30-12-1997--Declaration forwarded to Commissioner on 31-12-1997 and receipt signed by him--Payment of tax on 31-3-1998--Date of receipt of declaration by Commissioner relevant--Tax paid within time--Assessee entitled to benefit of Scheme--Voluntary Disclosure of Income Scheme, 1997-- S. Sudarsana Babu v. ITO (Ker) . . . 428

S. 68(2) --Voluntary disclosure of income--Conditions precedent for benefit under Scheme--Declaration of undisclosed income on or before 31-12-1997--Payment of tax on such income along with declaration or within three months--Meaning of "month"--Declaration must be made before Commissioner--Declaration before Assessing Officer on 30-12-1997--Declaration forwarded to Commissioner on 31-12-1997 and receipt signed by him--Payment of tax on 31-3-1998--Date of receipt of declaration by Commissioner relevant--Tax paid within time--Assessee entitled to benefit of Scheme--Voluntary Disclosure of Income Scheme, 1997-- S. Sudarsana Babu v. ITO (Ker) . . . 428

Income-tax Act, 1961 :

S. 10B --Exemption--Export--Condition precedent for claiming exemption under section 10B--Law applicable--Effect of amendment of section 10B w.e.f. 1-4-1994--No condition regarding quantum of export prior to 1-4-1994-- CIT v. BAEHAL Software Ltd. (Karn) . . . 368

S. 10(23C), fourteenth proviso --Exemption--Educational institution--Application for exemption--Delay in application--Delay cannot be condoned-- R. R. M. Educational Society v. Chief CIT (AP) . . . 323

S. 10(23C)(vi) --Exemption--Educational institution--Application for exemption--Law applicable--Effect of fourteenth proviso to section 10(23C) inserted w.e.f. 1-6-2006 --Limitation laid down for application--Delay in application cannot be condoned-- Aurora Educational Society v. Chief CIT (AP) . . . 333

----Exemption--Educational institution--Condition precedent for exemption under section 10(23C)(vi)--Institution must exist solely for purposes of education--Assessee having eradication of unemployment as one of its objects--Not entitled to exemption-- R. R. M. Educational Society v. Chief CIT (AP) . . . 323

----Exemption--Educational institution--Condition precedent--Institution should exist solely for purposes of education--Institution having other objects--Amendment of objects in August 2009--No certificate from Registrar of Societies regarding such alteration--Institution not entitled to exemption for assessment years 2004-05 to 2008-09-- Aurora Educational Society v. Chief CIT (AP) . . . 333

S. 17(3)(i), (iii) --Salary--Profits in lieu of salary--Meaning of expression before insertion of clause (iii) of section 17(3) w.e.f. 1-4-2002--Ex gratia payment by employer on termination of service in accounting year relevant to assessment year 2001-02--Not assessable as profits in lieu of salary-- CIT v. Deepak Verma (Delhi) . . . 475

S. 36 --Capital or revenue expenditure--Expenditure on setting up new sugar units--Expansion of existing business--Is revenue expenditure-- CIT v. Sakthi Sugars Ltd .(Mad) . . . 400

S. 37 --Capital or revenue expenditure--Expenditure on dismantling of cell room and construction of new cell room--Capital expenditure--Expenditure on transformer, pumping set and motors--Revenue expenditure-- CIT v. Modi Industries Ltd. (Delhi) . . . 467

----Capital or revenue expenditure--Expenditure on setting up new sugar units--Expansion of existing business--Is revenue expenditure-- CIT v. Sakthi Sugars Ltd .(Mad) . . . 400

S. 40A(3) --Business expenditure--Disallowance--Payment in cash exceeding prescribed limit--No evidence to indicate that assessee made any payment in excess--Section 40A(3) not applicable merely on basis of estimate-- CIT v. Ratanlal Vyaparilal Jain (Guj) . . . 351

S. 80HHC --Export--Special deduction under section 80HHC--"Processing" of goods--Meaning of "processing"--Cleaning and grading of cardamom do not amount to processing--Assessee not entitled to special deduction under section 80HHC-- CIT v. Midland Rubber and Produce Co. Ltd . (Ker) . . . 436

S. 80-IA --Industrial park--Special deduction--Industrial park scheme--Three categories of industrial parks : those engaged in developing ; those engaged in developing and operating ; and those engaged in maintaining and operating--Assessee engaged in development of industrial park--Assessee providing infrastructural facilities and dividing plot into small units and selling all of them within specified period--Approval obtained from Government--Units not starting production--Not a ground for withdrawal of approval--Notice for such withdrawal can be quashed-- Ganesh Housing Corporation Ltd . v. Padam Singh, Under Secretary (Guj) . . . 441

S. 132 --Search and seizure--Prohibitory order under section 132(3)--Condition precedent--Prohibitory order on bank accounts--No evidence that deposits in banks constituted undisclosed income of assessee--Prohibitory order--Not valid-- Maa Vaishnavi Sponge Ltd. v. Director General of Income-tax (Investigation) (Orissa) . . . 413

S. 145 --Method of accounting--Rule of consistency--Mercantile system of accounting--Prior period expenses debited in following year--Method consistently followed by assessee and accepted by Department--No evidence of distortion of profits--Method could not be rejected-- CIT v. Jagatjit Industries Ltd . (Delhi) . . . 382

S. 201(1A) --Deduction of tax at source--Failure to deduct--Registered office of assessee at New Delhi--Assessee filing returns and assessed at New Delhi--Notice under sections 201 and 201(1A) by Assessing Officer, Mumbai for not deducting tax at source on lease premium paid to MMRDA--Assessing Officer, Mumbai has no jurisdiction--Competent authority at New Delhi has jurisdiction-- Indian Newspaper Society v. ITO (TDS) (Bom) . . . 365

S. 271(1)(c) --Penalty--Concealment of income--Furnishing of inaccurate particulars--Advance on account of development agreement--Assessee disclosing receipt but not offering to tax in return--Assessee also disclosing amounts received from time to time in relevant years--Assessing Officer not sure as to whether assessee liable to pay capital gains tax and if so in which assessment year and under which head of income--Penalty cannot be imposed-- Metal Rolling Works Ltd . v. CIT (Bom) . . . 373

Interest-tax Act, 1974 :

S. 2(5B) --Interest-tax--Credit institution--Loans and advances--Meaning of--Trade advance for purchase of goods--Advance adjusted against purchase price and never returned to assessee--Interest on such advance for delay in delivery of goods--Not interest on loan or advance liable to interest-tax-- CIT v. Integrated Finance Co. Ltd .(Mad) . . . 391

Wealth-tax Act, 1957 :

S. 5(1)(i) --Wealth-tax--Exemption--Charitable trust--Kalyana mandapam belonging to trust let out and income applied for charitable purposes--Income held to be from property and granted exemption under Income-tax Act--Kalyana mandapam entitled to exemption under Wealth-tax Act-- Director of Income-tax (Exemptions) v. Samyuktha Gowda Saraswatha Sabha (Mad) . . . 456

Industrial Park Scheme, 2002 :

Clause 9 --Industrial park--Special deduction--Industrial park scheme--Three categories of industrial parks : those engaged in developing ; those engaged in developing and operating ; and those engaged in maintaining and operating--Assessee engaged in development of industrial park--Assessee providing infrastructural facilities and dividing plot into small units and selling all of them within specified period--Approval obtained from Government--Units not starting production--Not a ground for withdrawal of approval--Notice for such withdrawal can be quashed-- Ganesh Housing Corporation Ltd . v. Padam Singh, Under Secretary (Guj) . . . 441