ITR (TRIB) VOL 7 PART 3

 

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

Volume 7 : Part 3 (Issue dated : 17-1-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Appeal --Appeal to Appellate Tribunal--Additional grounds--Legal grounds not requiring fresh material, facts or evidence for adjudication--Permissible--Income-tax Act, 1961-- Nippo Batteries Co. Ltd. v. Asst. CIT (Chennai) . . . 303

Appeal to Appellate Tribunal --Fees--Rate dependent on total income determined --Total income determined at more than Rs. 2 lakhs--Fees of Rs. 10,000 payable--Income-tax Act, 1961, s. 253(6)(c)-- M. M. Bagawan and Brothers v. Asst. CIT (Bangalore) . . . 298

Appeal to Commissioner (Appeals) --Delay in filing appeal--Condonation of delay --No evidence of satisfaction of Commissioner (Appeals) with regard to sufficient cause --No documentary evidence suggesting sufficient cause of delay in filing appeal--Order of Commissioner (Appeals) condoning delay annulled--Income-tax Act, 1961, s. 249(3) -- Deputy CIT v. K. Prabhakar Rao (Bangalore) . . . 209

Bad debts --Balance sale consideration outstanding on balance-sheet date--Receipt of balance amount before filing return--No debt recoverable--Disallowance proper--Income-tax Act, 1961, s. 36(1)(vii)-- Embassy Classic P. Ltd. v. Asst. CIT (Bangalore) . . . 287

Business expenditure --Capital or revenue expenditure--Assessee entering into technical collaboration agreement without acquiring any exclusive right but only licence to manufacture specific product in its patent name for limited period--Royalty cannot be bifurcated without any provision in agreement--Entire payment revenue expenditure and allowable as deduction--Income-tax Act, 1961, s. 37-- Nippo Batteries Co. Ltd. v. Asst. CIT (Chennai) . . . 303

----Commission for services--Payment by account payee cheque in accordance with agreement and receipt independently confirmed by payee--Mere involvement of payee in different line of business not sufficient ground to disallow commission--Failure to summon witnesses--Deduction allowable --Income-tax Act, 1961, s. 37-- Mobile Communication (India) P. Ltd. v. Deputy CIT (Delhi) . . . 219

----Disallowance on ground that no manufacturing activity and sale by assessee--Business existing during year under consideration--Expenses necessary to maintain business and assets of company--To be allowed--Income-tax Act, 1961, s. 37-- Deputy CIT v. Fortune Garments Ltd. (Delhi) . . . 243

Deduction of tax at source --Business expenditure--Disallowance--Labour charges --Payments made to labourers directly--Section 194C not applicable--Income-tax Act, 1961, ss. 40(a)(ia), 194C-- Asst. CIT v. Kalindi Agro Biotech Ltd. (Delhi) . . . 249

----Payments to contractors--Purchase of printed material for manufacturing footwear from suppliers charging value added tax--Transaction of purchase and sale--Purchaser not liable to deduct tax at source--Income-tax Act, 1961, s. 194C-- ITO (TDS) v. Bata India P. Ltd. (Delhi) . . . 246

----Payments to farmers for cultivation--Operations carried out by farmers purely agricultural operations and not in nature of works contract--Section 194C not applicable--Income-tax Act, 1961, ss. 40(a)(ia), 194C-- Asst. CIT v. Kalindi Agro Biotech Ltd. (Delhi) . . . 249

Penalty --Concealment of income--Penalty not automatic--Assessing Officer--Judicial discretion to levy penalty--Assessee surrendering income to buy peace--Whether penalty leviable--Income-tax Act, 1961, s. 271(1)(c)-- Asst. CIT v. Malu Electrodes P. Ltd. (Nagpur) . . . 256

----Concealment of income--Share application money--Statement of director of assessee that transactions bogus--Documentary evidence showing amount given by respective shareholders--No enquiry conducted by Assessing Officer directly from such shareholders--Addition on basis of such statement and levy of penalty--Not proper--Income-tax Act, 1961, s. 271(1)(c)-- Asst. CIT v. Malu Electrodes P. Ltd. (Nagpur) . . . 256

Reassessment --Reassessment beyond four years--Condition precedent--Assessee disclosing fully and truly all material facts at time of original assessment--Records not revealing existence of any new information or material that income escaped assessment--Assessment barred by limitation--Income-tax Act, 1961, ss. 143(3), 147, prov., 148-- Nippo Batteries Co. Ltd. v. Asst. CIT (Chennai) . . . 303

----Rectification of mistakes--Capital gains--Rectification order determining long-term capital gains applying section 50C--Commissioner (Appeals) holding rectification order cannot be passed on debatable issue and section 50C not applicable to sale transaction prior to introduction of section in statute--Tribunal confirming order in toto--Reassessment proceedings cannot be initiated on same issue--Reassessment invalid--Income-tax Act, 1961, ss. 147, 154--Letter No. 153/91/2002/TPL, dated August 27, 2002 -- Ashutosh Bhargava v. Deputy CIT (Jaipur) . . . 268

Rectification of mistake --Mistake apparent from record--Assessing Officer while giving effect to Tribunal's order finding minimum alternate tax liability more than tax liability determined under normal provisions--Mistake apparent from record requiring rectification--Revised claim of nil tax liability under section 115JB categorically rejected by Assessing Officer due to expiry of time under section 139(5)--Revised calculation by assessee under section 115JB not adjudicated by Commissioner (Appeals) or Tribunal--Rectification justified--Income-tax Act, 1961, ss. 115JB, 154-- Deputy CIT v. Wintac Ltd. (Bangalore) . . . 318

Search and seizure --Special procedure for assessment--Entry in seized material not supported by corroborative evidence--Material contradictions in statements of purchaser of property--Deletion of addition in hands of company justified--No different approaches in relation to on-money payments to assessee-company and its director--Addition to be deleted--Income-tax Act, 1961, ss. 132, 153A-- Embassy Classic P. Ltd. v. Asst. CIT (Bangalore) . . . 287

----Warrant of authorisation--Validity--Common search warrant specifying names and addresses of persons residing at different places--Assessment valid--Income-tax Act, 1961, ss. 132, 153A-- Embassy Classic P. Ltd. v. Asst. CIT (Bangalore) . . . 287

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961 :

S. 36(1)(vii) --Bad debts--Balance sale consideration outstanding on balance-sheet date--Receipt of balance amount before filing return--No debt recoverable--Disallowance proper-- Embassy Classic P. Ltd. v. Asst. CIT (Bangalore) . . . 287

S. 37 --Business expenditure--Capital or revenue expenditure--Assessee entering into technical collaboration agreement without acquiring any exclusive right but only licence to manufacture specific product in its patent name for limited period--Royalty cannot be bifurcated without any provision in agreement--Entire payment revenue expenditure and allowable as deduction-- Nippo Batteries Co. Ltd. v. Asst. CIT (Chennai) . . . 303

----Business expenditure--Commission for services--Payment by account payee cheque in accordance with agreement and receipt independently confirmed by payee--Mere involvement of payee in different line of business not sufficient ground to disallow commission--Failure to summon witnesses--Deduction allowable-- Mobile Communication (India) P. Ltd. v. Deputy CIT (Delhi) . . . 219

----Business expenditure--Disallowance on ground that no manufacturing activity and sale by assessee--Business existing during year under consideration--Expenses necessary to maintain business and assets of company--To be allowed-- Deputy CIT v. Fortune Garments Ltd. (Delhi) . . . 243

S. 40(a)(ia) --Deduction of tax at source--Business expenditure--Disallowance--Labour charges--Payments made to labourers directly--Section 194C not applicable-- Asst. CIT v. Kalindi Agro Biotech Ltd. (Delhi) . . . 249

----Deduction of tax at source--Payments to farmers for cultivation--Operations carried out by farmers purely agricultural operations and not in nature of works contract --Section 194C not applicable-- Asst. CIT v. Kalindi Agro Biotech Ltd. (Delhi) . . . 249

S. 115JB --Rectification of mistake--Mistake apparent from record--Assessing Officer while giving effect to Tribunal's order finding minimum alternate tax liability more than tax liability determined under normal provisions--Mistake apparent from record requiring rectification--Revised claim of nil tax liability under section 115JB categorically rejected by Assessing Officer due to expiry of time under section 139(5)--Revised calculation by assessee under section 115JB not adjudicated by Commissioner (Appeals) or Tribunal--Rectification justified-- Deputy CIT v. Wintac Ltd. (Bangalore) . . . 318

S. 132 --Search and seizure--Special procedure for assessment--Entry in seized material not supported by corroborative evidence--Material contradictions in statements of purchaser of property--Deletion of addition in hands of company justified--No different approaches in relation to on-money payments to assessee-company and its director--Addition to be deleted-- Embassy Classic P. Ltd. v. Asst. CIT (Bangalore) . . . 287

----Search and seizure--Warrant of authorisation--Validity--Common search warrant specifying names and addresses of persons residing at different places--Assessment valid-- Embassy Classic P. Ltd. v. Asst. CIT (Bangalore) . . . 287

S. 143(3) --Reassessment--Reassessment beyond four years--Condition precedent--Assessee disclosing fully and truly all material facts at time of original assessment--Records not revealing existence of any new information or material that income escaped assessment--Assessment barred by limitation-- Nippo Batteries Co. Ltd. v. Asst. CIT (Chennai) . . . 303

S. 147 --Reassessment--Rectification of mistakes--Capital gains--Rectification order determining long-term capital gains applying section 50C--Commissioner (Appeals) holding rectification order cannot be passed on debatable issue and section 50C not applicable to sale transaction prior to introduction of section in statute--Tribunal confirming order in toto--Reassessment proceedings cannot be initiated on same issue--Reassessment invalid--Letter No. 153/91/2002/TPL, dated August 27, 2002-- Ashutosh Bhargava v. Deputy CIT (Jaipur) . . . 268

S. 147, prov. --Reassessment--Reassessment beyond four years--Condition precedent--Assessee disclosing fully and truly all material facts at time of original assessment--Records not revealing existence of any new information or material that income escaped assessment--Assessment barred by limitation-- Nippo Batteries Co. Ltd. v. Asst. CIT (Chennai) . . . 303

S. 148 --Reassessment--Reassessment beyond four years--Condition precedent--Assessee disclosing fully and truly all material facts at time of original assessment--Records not revealing existence of any new information or material that income escaped assessment--Assessment barred by limitation-- Nippo Batteries Co. Ltd. v. Asst. CIT (Chennai) . . . 303

S. 153A --Search and seizure--Special procedure for assessment--Entry in seized material not supported by corroborative evidence--Material contradictions in statements of purchaser of property--Deletion of addition in hands of company justified--No different approaches in relation to on-money payments to assessee-company and its director--Addition to be deleted-- Embassy Classic P. Ltd. v. Asst. CIT (Bangalore) . . . 287

----Search and seizure--Warrant of authorisation--Validity--Common search warrant specifying names and addresses of persons residing at different places--Assessment valid-- Embassy Classic P. Ltd. v. Asst. CIT (Bangalore) . . . 287

S. 154 --Reassessment--Rectification of mistakes--Capital gains--Rectification order determining long-term capital gains applying section 50C--Commissioner (Appeals) holding rectification order cannot be passed on debatable issue and section 50C not applicable to sale transaction prior to introduction of section in statute--Tribunal confirming order in toto--Reassessment proceedings cannot be initiated on same issue--Reassessment invalid--Letter No. 153/91/2002/TPL, dated August 27, 2002 -- Ashutosh Bhargava v. Deputy CIT (Jaipur) . . . 268

----Rectification of mistake--Mistake apparent from record--Assessing Officer while giving effect to Tribunal's order finding minimum alternate tax liability more than tax liability determined under normal provisions--Mistake apparent from record requiring rectification--Revised claim of nil tax liability under section 115JB categorically rejected by Assessing Officer due to expiry of time under section 139(5)--Revised calculation by assessee under section 115JB not adjudicated by Commissioner (Appeals) or Tribunal--Rectification justified-- Deputy CIT v. Wintac Ltd. (Bangalore) . . . 318

S. 194C --Deduction of tax at source--Business expenditure--Disallowance--Labour charges --Payments made to labourers directly--Section 194C not applicable-- Asst. CIT v. Kalindi Agro Biotech Ltd. (Delhi) . . . 249

----Deduction of tax at source--Payments to contractors--Purchase of printed material for manufacturing footwear from suppliers charging value added tax--Transaction of purchase and sale--Purchaser not liable to deduct tax at source-- ITO (TDS) v. Bata India P. Ltd. (Delhi) . . . 246

----Deduction of tax at source--Payments to farmers for cultivation--Operations carried out by farmers purely agricultural operations and not in nature of works contract--Section 194C not applicable-- Asst. CIT v. Kalindi Agro Biotech Ltd. (Delhi) . . . 249

S. 249(3) --Appeal to Commissioner (Appeals)--Delay in filing appeal--Condonation of delay--No evidence of satisfaction of Commissioner (Appeals) with regard to sufficient cause--No documentary evidence suggesting sufficient cause of delay in filing appeal--Order of Commissioner (Appeals) condoning delay annulled-- Deputy CIT v. K. Prabhakar Rao (Bangalore) . . . 209

S. 253(6)(c) --Appeal to Appellate Tribunal--Fees--Rate dependent on total income determined--Total income determined at more than Rs. 2 lakhs--Fees of Rs. 10,000 payable-- M. M. Bagawan and Brothers v. Asst. CIT (Bangalore) . . . 298

S. 271(1)(c) --Penalty--Concealment of income--Penalty not automatic--Assessing Officer--Judicial discretion to levy penalty--Assessee surrendering income to buy peace--Whether penalty leviable-- Asst. CIT v. Malu Electrodes P. Ltd. (Nagpur) . . . 256

----Penalty--Concealment of income--Share application money--Statement of director of assessee that transactions bogus--Documentary evidence showing amount given by respective shareholders--No enquiry conducted by Assessing Officer directly from such shareholders--Addition on basis of such statement and levy of penalty--Not proper-- Asst. CIT v. Malu Electrodes P. Ltd. (Nagpur) . . . 256