INCOME TAX REPORTS (ITR)
Volume 335 : Part 4 (Issue dated 25-7-2011)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
HIGH COURTS
Appeal to Appellate Tribunal --Powers of Tribunal--Discretion to allow new question to be raised--Question regarding validity of notice cannot be raised--Income-tax Act, 1961, s. 254-- Aravali Engineers P. Ltd . v. CIT (P&H) . . . 508
----Tribunal accepting order annulling assessment on ground of limitation--High Court holding in favour of Revenue--Application to recall Tribunal's order and to decide remaining issues--Tribunal required to remand case to Commissioner (Appeals) for adjudication on merits--Income-tax Act, 1961, ss. 254, 260-- CIT v. Satpal Pandit and Co . (P&H) . . . 568
Cash credit --Burden of proof--Assessee must prove identity of creditor, his capacity to lend and genuineness of transaction--Firm doing construction work--New firm with two new partners formed to continue business--Expenses of old firm credited to erstwhile partners--No unexplained credit--Addition of amount under section 68--Not valid--Income-tax Act, 1961, s. 68-- CIT v. S. K. Banerjee, J. V. Transport Plaza (Bom) . . . 563
----Construction business--Trade purchases--Assessing Officer rejecting books while deciding purchase transactions not genuine but relying on return accepting profit--Assessing Officer ought to have proceeded under section 144--Addition under section 68 not justified--Income-tax Act, 1961, ss. 68, 144, 145(3)-- Amitabh Construction P. Ltd . v. Addl. CIT (Jharkhand) . . . 523
----Finding by Tribunal that credits not genuine--Amounts includible in total income under section 68--Income-tax Act, 1961, s. 68-- Saraswati Tractors Corporation v. CIT (P&H) . . . 468
Charitable purposes --Charitable trust--Effect of registration of trust under section 12AA--Trust entitled to exemption under section 11--Assessing Officer not entitled to go into whether trust fulfills conditions for applicability of sections 11 and 12--Recovery of tax not permissible--Income-tax Act, 1961, ss. 11, 12A--A hmedabad Urban Development Authority v. Deputy Director of Income-tax (Exemption) (Guj) . . . 575
Deduction of tax at source --Non-resident sportsmen--International cricket tournament--Matches held in India--Amounts paid to foreign teams for participation as prize money or administrative expenses deemed to accrue in India under section 115BBA--Tax deductible at source on such amounts under section 194E--Provisions of sections 115BBA and 194E not barred by Double Taxation Avoidance Agreements--Match referees and umpires not sportsmen--Tax not deductible at source on payments to them--Income-tax Act, 1961, ss. 115BBA, 194E, 194J-- INDCOM v. CIT (TDS) (Cal) . . . 485
Depreciation --Actual cost--Depreciation cannot be determined on the basis of estimate--Assessing Officer could rely on the report of the DVO--Income-tax Act, 1961, s. 32-- CIT v. Star Resorts (P) Ltd . (P&H) . . . 587
Export --Special deduction under section 80HHC--Computation of export turnover for purpose of section 80HHC--Freight and insurance charges deducted at first instance cannot be deducted again--Income-tax Act, 1961 s. 80HHC-- CIT v. HJS Stones Ltd. (Karn) . . . 500
----Special deduction--Determination of business profits--Interest from banks and intercorporate deposits--Finding that investment of funds part of business of assessee--Interest includible in business profits--Income-tax Act, 1961, s. 80HHC-- CIT v. Sociedade de Fomento Industrial Ltd . (Bom) . . . 472
Income from property --Deductions--Only deduction allowed under section 24--Brokerage not deductible--Income-tax Act, 1961, s. 24-- Aravali Engineers P. Ltd . v. CIT (P&H) . . . 508
Interest-tax --Charge of tax--Credit institution--Assessee providing and arranging for loans and taking brokerage and syndication fees--Assessee is a credit institution within meaning of section 2(5A)--Brokerage and syndication fees not chargeable as interest-tax--Other interest chargeable to tax--Interest-tax Act, 1974, s. 2(5A), (5B), (7)-- Peerless Financial Services Ltd. v. Commissioner of Interest-tax (Cal) . . . 452
Loss --Speculative transaction--Set-off of loss--Loss from speculative transaction cannot be set off against income from property--Income-tax Act, 1961, ss. 43, 73-- Aravali Engineers P. Ltd . v. CIT (P&H) . . . 508
Lottery --Winnings from lottery--Effect of section 115BB--Distributor of lottery tickets earning prize from unsold ticket in stock--Amount assessable under section 115BB--Income-tax Act, 1961, ss. 2(13), 56(2)(ib), 115BB-- CIT v. Manjoo and Co. (Ker) . . . 527
Penalty --Concealment of income--Assessee agreeing to addition to income to avoid litigation--No finding of concealment of income or furnishing of inaccurate particular in return--Penalty could not be imposed--Income-tax Act, 1961, s. 271(1)(c)-- CIT v. Ample Properties Ltd. (Mad) . . . 460
----Concealment of income--Satisfaction of Assessing Officer regarding concealment--Omission to use particular words not conclusive--Satisfaction to be inferred from findings in assessment order--Income-tax Act, 1961, s. 271(1)(c)-- CIT v. Smt. Parmatma Kaur (P&H) . . . 589
----Concealment of income and furnishing of inaccurate particulars--Assessee claiming set off of unabsorbed business losses against capital gains--Making incorrect claim not amount to furnishing of inaccurate particulars unless with mala fide intention--Tribunal deleting penalty finding claim not amount to deliberate concealment or furnishing of inaccurate particulars--Justified--Income-tax Act, 1961, s. 271(1)(c)-- CIT v. Rubber Udyog Vikas P. Ltd. (P&H) . . . 558
Precedent --Effect of decision in CIT v. Pearey Lal and Sons (EP) Ltd. [2009] 308 ITR 438 (P&H)-- CIT v. Smt. Parmatma Kaur (P&H) . . . 589
Reassessment --Notice after four years--Tribunal in appeal from block assessment deleting addition on account of bogus purchases, holding purchases not bogus--Notice for reassessment on ground that purchases bogus--Not permissible--Income-tax Act, 1961, s. 147-- Connection v. ITO (Guj) . . . 465
Reference --Circular--Monetary limits prescribed for litigation by Revenue--Also applicable to old references which are undecided--CBDT Circular dated 27-3-2000-- CIT v. P. S. Jain and Co. (Delhi) . . . 591
Residence --Resident but not ordinarily resident--Law applicable--Amendment of section 6(6) w.e.f. 1-4-2004--Amendment not retrospective--Assessment years 1998-99 and 1999-2000--Assessee not resident for three years of ten previous years--Assessable as "resident but not ordinarily resident"--Income-tax Act, 1961, s. 6(6)-- CIT v. Karan Bihari Thapar (Delhi) . . . 541
Revision --Industrial undertaking--Finding that fabrication charges on job-work done for others amounted to manufacture--Finding that assessee had not received any real income on account of insurance claim--Assessment order not erroneous or prejudicial to the interests of Revenue--Revision to disallow--Not proper--Income-tax Act, 1961, ss. 80-IB, 263-- CIT v. Vallabh Yarns P. Ltd. (P&H) . . . 518
Search and seizure --Advance tax--Retention of seized assets--Release of assets on deposit of money--Assessing Officer failing to accede to request of assessee and adjust advance tax against deposits--Interest under section 234B and 234C for default in payment of advance tax cannot be levied--Income-tax Act, 1961, ss. 234B, 234C-- Vishwanath Khanna v. Union of India (Delhi) . . . 548
----Block assessment--Settlement of cases--Effect of section 245-I--Finality only in respect of matters stated--Quantum of income determined in block assessment and surcharge considered by Settlement Commission--Interest under section 158BFA not an issue raised before Settlement Commission--Charge of interest under section 158BFA--Valid--Income-tax Act, 1961, ss. 158BFA, 245-I-- Dr. Attukal Radhakrishnan v. A sst. CIT (Ker) . . . 533
----Block assessment--Surcharge--Surcharge to be levied--Income-tax Act, 1961, s. 113-- Rupa and Co. Ltd. v. CIT (Cal) . . . 478
----Block assessment--Undisclosed income--No suppression of stocks detected-- Discounts given by assessee to its customers at different rates--Discounts not found to be bogus--Addition on basis of average of discounts--Not valid--Income-tax Act, 1961, s. 158BB-- Rupa and Co. Ltd . v. CIT (Cal) . . . 478
----Block assessment--Unexplained income--Tribunal merely relying on order of Assessing Officer to restore addition--Assessee contending that money seized during search against sales bill not considered by Tribunal--Matter remanded --Income-tax Act, 1961, s. 158BC-- Brij Mohan Bhatia v. ITAT (P&H) . . . 580
----Settlement of cases--Refund--Retention of seized assets--Release of assets on deposits of money--Order of assessment consequent of settlement of case--Amount refunded to assessee--Delay in paying refund--Interest payable under section 132B--Income-tax Act, 1961-- Vishwanath Khanna v. Union of India (Delhi) . . . 548
Undisclosed investment --Addition on basis of report of District Valuation Officer--No evidence suggesting assessee made any payment above consideration mentioned in return--Books of account not rejected--Addition not permissible--Income-tax Act, 1961, s. 69B-- CIT v. Bajrang Lal Bansal (Delhi) . . . 572
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Income-tax Act, 1961 :
S. 2(13) --Lottery--Winnings from lottery--Effect of section 115BB--Distributor of lottery tickets earning prize from unsold ticket in stock--Amount assessable under section 115BB-- CIT v. Manjoo and Co. (Ker) . . . 527
S. 6(6) --Residence--Resident but not ordinarily resident--Law applicable--Amendment of section 6(6) w.e.f. 1-4-2004--Amendment not retrospective--Assessment years 1998-99 and 1999-2000--Assessee not resident for three years of ten previous years--Assessable as "resident but not ordinarily resident"-- CIT v. Karan Bihari Thapar (Delhi) . . . 541
S. 11 --Charitable purposes--Charitable trust--Effect of registration of trust under section 12AA--Trust entitled to exemption under section 11--Assessing Officer not entitled to go into whether trust fulfills conditions for applicability of sections 11 and 12--Recovery of tax not permissible--A hmedabad Urban Development Authority v. Deputy Director of Income-tax (Exemption) (Guj) . . . 575
S. 12A --Charitable purposes--Charitable trust--Effect of registration of trust under section 12AA--Trust entitled to exemption under section 11--Assessing Officer not entitled to go into whether trust fulfills conditions for applicability of sections 11 and 12--Recovery of tax not permissible--A hmedabad Urban Development Authority v. Deputy Director of Income-tax (Exemption) (Guj) . . . 575
S. 24 --Income from property--Deductions--Only deduction allowed under section 24--Brokerage not deductible-- Aravali Engineers P. Ltd . v. CIT (P&H) . . . 508
S. 32 --Depreciation--Actual cost--Depreciation cannot be determined on the basis of estimate--Assessing Officer could rely on the report of the DVO-- CIT v. Star Resorts (P) Ltd . (P&H) . . . 587
S. 43 --Loss--Speculative transaction--Set-off of loss--Loss from speculative transaction cannot be set off against income from property-- Aravali Engineers P. Ltd . v. CIT (P&H) . . . 508
S. 56(2)(ib) --Lottery--Winnings from lottery--Effect of section 115BB--Distributor of lottery tickets earning prize from unsold ticket in stock--Amount assessable under section 115BB-- CIT v. Manjoo and Co. (Ker) . . . 527
S. 68 --Cash credit--Burden of proof--Assessee must prove identity of creditor, his capacity to lend and genuineness of transaction--Firm doing construction work--New firm with two new partners formed to continue business--Expenses of old firm credited to erstwhile partners--No unexplained credit--Addition of amount under section 68--Not valid-- CIT v. S. K. Banerjee, J. V. Transport Plaza (Bom) . . . 563
----Cash credit--Construction business--Trade purchases--Assessing Officer rejecting books while deciding purchase transactions not genuine but relying on return accepting profit--Assessing Officer ought to have proceeded under section 144--Addition under section 68 not justified-- Amitabh Construction P. Ltd . v. Addl. CIT (Jharkhand) . . . 523
----Cash credits--Finding by Tribunal that credits not genuine--Amounts includible in total income under section 68-- Saraswati Tractors Corporation v. CIT (P&H) . . . 468
S. 69B --Undisclosed investment--Addition on basis of report of District Valuation Officer--No evidence suggesting assessee made any payment above consideration mentioned in return--Books of account not rejected--Addition not permissible-- CIT v. Bajrang Lal Bansal (Delhi) . . . 572
S. 73 --Loss--Speculative transaction--Set-off of loss--Loss from speculative transaction cannot be set off against income from property-- Aravali Engineers P. Ltd . v. CIT (P&H) . . . 508
S. 80HHC --Export--Special deduction--Determination of business profits--Interest from banks and intercorporate deposits--Finding that investment of funds part of business of assessee--Interest includible in business profits-- CIT v. Sociedade de Fomento Industrial Ltd . (Bom) . . . 472
----Export--Special deduction under section 80HHC--Computation of export turnover for purpose of section 80HHC--Freight and insurance charges deducted at first instance cannot be deducted again-- CIT v. HJS Stones Ltd. (Karn) . . . 500
S. 80-IB --Revision--Industrial undertaking--Finding that fabrication charges on job-work done for others amounted to manufacture--Finding that assessee had not received any real income on account of insurance claim--Assessment order not erroneous or prejudicial to the interests of Revenue--Revision to disallow--Not proper-- CIT v. Vallabh Yarns P. Ltd. (P&H) . . . 518
S. 113 --Search and seizure--Block assessment--Surcharge--Surcharge to be levied-- Rupa and Co. Ltd. v. CIT (Cal) . . . 478
S. 115BB --Lottery--Winnings from lottery--Effect of section 115BB--Distributor of lottery tickets earning prize from unsold ticket in stock--Amount assessable under section 115BB-- CIT v. Manjoo and Co. (Ker) . . . 527
S. 115BBA --Deduction of tax at source--Non-resident sportsmen--International cricket tournament--Matches held in India--Amounts paid to foreign teams for participation as prize money or administrative expenses deemed to accrue in India under section 115BBA--Tax deductible at source on such amounts under section 194E--Provisions of sections 115BBA and 194E not barred by Double Taxation Avoidance Agreements--Match referees and umpires not sportsmen--Tax not deductible at source on payments to them-- INDCOM v. CIT (TDS) (Cal) . . . 485
S. 144 --Cash credit--Construction business--Trade purchases--Assessing Officer rejecting books while deciding purchase transactions not genuine but relying on return accepting profit--Assessing Officer ought to have proceeded under section 144--Addition under section 68 not justified-- Amitabh Construction P. Ltd . v. Addl. CIT (Jharkhand) . . . 523
S. 145(3) --Cash credit--Construction business--Trade purchases--Assessing Officer rejecting books while deciding purchase transactions not genuine but relying on return accepting profit--Assessing Officer ought to have proceeded under section 144--Addition under section 68 not justified-- Amitabh Construction P. Ltd . v. Addl. CIT (Jharkhand) . . . 523
S. 147 --Reassessment--Notice after four years--Tribunal in appeal from block assessment deleting addition on account of bogus purchases, holding purchases not bogus--Notice for reassessment on ground that purchases bogus--Not permissible-- Connection v. ITO (Guj) . . . 465
S. 158BB --Search and seizure--Block assessment--Undisclosed income--No suppression of stocks detected--Discounts given by assessee to its customers at different rates--Discounts not found to be bogus--Addition on basis of average of discounts--Not valid-- Rupa and Co. Ltd . v. CIT (Cal) . . . 478
S. 158BC --Search and seizure--Block assessment--Unexplained income--Tribunal merely relying on order of Assessing Officer to restore addition--Assessee contending that money seized during search against sales bill not considered by Tribunal--Matter remanded-- Brij Mohan Bhatia v. ITAT (P&H) . . . 580
S. 158BFA --Search and seizure--Block assessment--Settlement of cases--Effect of section 245-I--Finality only in respect of matters stated--Quantum of income determined in block assessment and surcharge considered by Settlement Commission--Interest under section 158BFA not an issue raised before Settlement Commission--Charge of interest under section 158BFA--Valid-- Dr. Attukal Radhakrishnan v. A sst. CIT (Ker) . . . 533
S. 194E --Deduction of tax at source--Non-resident sportsmen--International cricket tournament--Matches held in India--Amounts paid to foreign teams for participation as prize money or administrative expenses deemed to accrue in India under section 115BBA--Tax deductible at source on such amounts under section 194E--Provisions of sections 115BBA and 194E not barred by Double Taxation Avoidance Agreements--Match referees and umpires not sportsmen--Tax not deductible at source on payments to them-- INDCOM v. CIT (TDS) (Cal) . . . 485
S. 194J --Deduction of tax at source--Non-resident sportsmen--International cricket tournament--Matches held in India--Amounts paid to foreign teams for participation as prize money or administrative expenses deemed to accrue in India under section 115BBA--Tax deductible at source on such amounts under section 194E--Provisions of sections 115BBA and 194E not barred by Double Taxation Avoidance Agreements--Match referees and umpires not sportsmen--Tax not deductible at source on payments to them-- INDCOM v. CIT (TDS) (Cal) . . . 485
S. 234B --Search and seizure--Advance tax--Retention of seized assets--Release of assets on deposit of money--Assessing Officer failing to accede to request of assessee and adjust advance tax against deposits--Interest under section 234B and 234C for default in payment of advance tax cannot be levied-- Vishwanath Khanna v. Union of India (Delhi) . . . 548
S. 234C --Search and seizure--Advance tax--Retention of seized assets--Release of assets on deposit of money--Assessing Officer failing to accede to request of assessee and adjust advance tax against deposits--Interest under section 234B and 234C for default in payment of advance tax cannot be levied-- Vishwanath Khanna v. Union of India (Delhi) . . . 548
S. 245-I --Search and seizure--Block assessment--Settlement of cases--Effect of section 245-I--Finality only in respect of matters stated--Quantum of income determined in block assessment and surcharge considered by Settlement Commission--Interest under section 158BFA not an issue raised before Settlement Commission--Charge of interest under section 158BFA--Valid-- Dr. Attukal Radhakrishnan v. A sst. CIT (Ker) . . . 533
S. 254 --Appeal to Appellate Tribunal--Powers of Tribunal--Discretion to allow new question to be raised--Question regarding validity of notice cannot be raised-- Aravali Engineers P. Ltd . v. CIT (P&H) . . . 508
----Appeal to Appellate Tribunal--Tribunal accepting order annulling assessment on ground of limitation--High Court holding in favour of Revenue--Application to recall Tribunal's order and to decide remaining issues--Tribunal required to remand case to Commissioner (Appeals) for adjudication on merits-- CIT v. Satpal Pandit and Co . (P&H) . . . 568
S. 260 --Appeal to Appellate Tribunal--Tribunal accepting order annulling assessment on ground of limitation--High Court holding in favour of Revenue--Application to recall Tribunal's order and to decide remaining issues--Tribunal required to remand case to Commissioner (Appeals) for adjudication on merits-- CIT v. Satpal Pandit and Co . (P&H) . . . 568
S. 263 --Revision--Industrial undertaking--Finding that fabrication charges on job-work done for others amounted to manufacture--Finding that assessee had not received any real income on account of insurance claim--Assessment order not erroneous or prejudicial to the interests of Revenue--Revision to disallow--Not proper-- CIT v. Vallabh Yarns P. Ltd. (P&H) . . . 518
S. 271(1)(c) --Penalty--Concealment of income--Assessee agreeing to addition to income to avoid litigation--No finding of concealment of income or furnishing of inaccurate particular in return--Penalty could not be imposed-- CIT v. Ample Properties Ltd. (Mad) . . . 460
----Penalty--Concealment of income--Satisfaction of Assessing Officer regarding concealment--Omission to use particular words not conclusive--Satisfaction to be inferred from findings in assessment order-- CIT v. Smt. Parmatma Kaur (P&H) . . . 589
----Penalty--Concealment of income and furnishing of inaccurate particulars--Assessee claiming set off of unabsorbed business losses against capital gains--Making incorrect claim not amount to furnishing of inaccurate particulars unless with mala fide intention--Tribunal deleting penalty finding claim not amount to deliberate concealment or furnishing of inaccurate particulars--Justified-- CIT v. Rubber Udyog Vikas P. Ltd. (P&H) . . . 558
Interest-tax Act, 1974 :
S. 2(5A), (5B), (7) --Interest-tax--Charge of tax--Credit institution--Assessee providing and arranging for loans and taking brokerage and syndication fees--Assessee is a credit institution within meaning of section 2(5A)--Brokerage and syndication fees not chargeable as interest-tax--Other interest chargeable to tax-- Peerless Financial Services Ltd. v. Commissioner of Interest-tax (Cal) . . . 452
ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))
Volume 10 : Part 4 (Issue dated : 25-07-2011)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Appellate Tribunal --Rectification of mistakes--Scope of jurisdiction--No power to review--Tribunal considering case law and provisions--Non-consideration of judgment cited by party--Not a mistake apparent from record--Income-tax Act, 1961, s. 254(2)-- Asianet Communications Ltd. v. Deputy CIT (Chennai) . . . 441
Assessment --Scope of section 143(1)(a)--Prima facie adjustments--Not permissible in respect of debatable issues--Whether interest earned during pre-operative period to be taxed, or to be set off against expenses--Question of debatable nature--Beyond scope of prima facie adjustments--Income-tax Act, 1961, ss. 143(1)(a), 154-- Asst. CIT v. Haryana Telecom Ltd. (Delhi) . . . 428
Business expenditure --Commission--Disallowance--Effect of section 36(1)(ii)--Commission in lieu of dividend--Not deductible--Commission paid to all three employee directors also owned shares of assessee-company--Finding that commission was paid in order to reduce taxes--Amount payable as dividend--Amount not deductible under section 36--Amount not also deductible under section 37--Income-tax Act, 1961, ss. 36(1)(ii), 37(1)-- Dalal Broacha Stock Broking P. Ltd. v. Addl. CIT [SB] (Mumbai) . . . 357
Charitable trust --Registration --"Charitable purpose", meaning of--Object of trust to establish number of educational institutions and run them on commercial lines--Fees structure establishing profit motive--Application for registration to be rejected--Income-tax Act, 1961, s. 12AA-- Rajah Sir Annamalai Chettiar Foundation v. Director of Income-tax (Exemptions) (Chennai) . . . 424
Income from undisclosed sources --Claim that sum received under agreement to sell land--Lack of details in respect of agreement--Assessee failing to produce source of receipt--Addition confirmed--Income-tax Act, 1961-- Neeraj Sharma v. Deputy CIT (Delhi) . . . 381
Penalty --Concealment of income--Denial of claim to set off unabsorbed business loss against capital gains--Assessee furnishing all particulars of income--Wrong claim for set off does not amount to concealment of income--Penalty cannot be imposed--Income-tax Act, 1961, s. 271(1)(c)-- Rubber Udyog Vikas P. Ltd. v. Asst. CIT (Delhi) . . . 418
----Concealment of income--Reassessment quashed--Penalty does not survive--Income-tax Act, 1961, ss. 147, 148, 271(1)(c)-- Gaekwad Investment Corporation P. Ltd. v. Asst. CIT (Ahmedabad) . . . 388
Reassessment --Income escaping assessment--Loans taken by assessee--Failure to furnish details of loans on account of litigations between assessee and lender--Matter remanded to Commissioner (Appeals)--Income-tax Act, 1961, ss. 147, 148-- Ms. Rainee Singh v. ITO (Delhi) . . . 457
----Notice on basis of information received from investigation department that claim of capital gains bogus--Relevant and sufficient material to form reason to believe income escaped assessment--Grant of approval of Commissioner to initiate reassessment proceedings on application of mind--Capital gains not disclosed in regular return--No original assessment under section 143(3) of Act with respect to capital gains--Reassessment not based on change of opinion--Reassessment valid--Declaration in Voluntary Disclosure of Income Scheme not relevant to income pertaining to assessment year--Addition justified--Income-tax Act, 1961, ss. 143(3), 147, 148, 151(2)-- Ms. Rainee Singh v. ITO (Delhi) . . . 457
----Reassessment beyond four years--Four years to be reckoned from end of assessment year, not date of assessment order--Condition precedent--Assessee mentioning liability to interest for earlier period in note to balance sheet and Assessing Officer considering--No failure by assessee to disclose all material facts necessary for assessment--Reassessment barred by limitation--Income-tax Act, 1961, ss. 147, 148-- Gaekwad Investment Corporation P. Ltd. v. Asst. CIT (Ahmedabad) . . . 388
Search and seizure --Block assessment--Undisclosed income--Determination of undisclosed income must be on basis of evidence found as a result of search--Estimate of income not based on material found during search--Not valid--Assessee not liable to prove liabilities shown in accounts--Amount cannot be treated as undisclosed income--Returns for assessment years 1999-2000 and 2000-01 filed beyond time--Amounts returned to be treated as undisclosed income but credit to be given for tax deducted at source and advance tax--Income-tax Act, 1961, ss. 158B, 158BB, 158BC-- Asst. CIT v. Kalyan Chandra Dey (Gauhati) . . . 399
Words and phrases --"Reason to believe", meaning of-- Ms. Rainee Singh v. ITO (Delhi) . . . 457
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Income-tax Act, 1961 :
S. 12AA --Charitable trust--Registration--"Charitable purpose", meaning of--Object of trust to establish number of educational institutions and run them on commercial lines--Fees structure establishing profit motive--Application for registration to be rejected-- Rajah Sir Annamalai Chettiar Foundation v. Director of Income-tax (Exemptions) (Chennai) . . . 424
S. 36(1)(ii) --Business expenditure--Commission--Disallowance--Effect of section 36(1)(ii)--Commission in lieu of dividend--Not deductible--Commission paid to all three employee directors also owned shares of assessee-company--Finding that commission was paid in order to reduce taxes--Amount payable as dividend--Amount not deductible under section 36--Amount not also deductible under section 37-- Dalal Broacha Stock Broking P. Ltd. v. Addl. CIT [SB] (Mumbai) . . . 357
S. 37(1) --Business expenditure--Commission--Disallowance--Effect of section 36(1)(ii)--Commission in lieu of dividend--Not deductible--Commission paid to all three employee directors also owned shares of assessee-company--Finding that commission was paid in order to reduce taxes--Amount payable as dividend--Amount not deductible under section 36--Amount not also deductible under section 37-- Dalal Broacha Stock Broking P. Ltd. v. Addl. CIT [SB] (Mumbai) . . . 357
S. 143(1)(a) --Assessment--Scope of section 143(1)(a)--Prima facie adjustments--Not permissible in respect of debatable issues--Whether interest earned during pre-operative period to be taxed, or to be set off against expenses--Question of debatable nature--Beyond scope of prima facie adjustments-- Asst. CIT v. Haryana Telecom Ltd. (Delhi) . . . 428
S. 143(3) --Reassessment--Notice on basis of information received from investigation department that claim of capital gains bogus--Relevant and sufficient material to form reason to believe income escaped assessment--Grant of approval of Commissioner to initiate reassessment proceedings on application of mind--Capital gains not disclosed in regular return--No original assessment under section 143(3) of Act with respect to capital gains--Reassessment not based on change of opinion--Reassessment valid--Declaration in Voluntary Disclosure of Income Scheme not relevant to income pertaining to assessment year--Addition justified-- Ms. Rainee Singh v. ITO (Delhi) . . . 457
S. 147 --Penalty--Concealment of income--Reassessment quashed--Penalty does not survive-- Gaekwad Investment Corporation P. Ltd. v. Asst. CIT (Ahmedabad) . . . 388
----Reassessment--Income escaping assessment--Loans taken by assessee--Failure to furnish details of loans on account of litigations between assessee and lender--Matter remanded to Commissioner (Appeals)-- Ms. Rainee Singh v. ITO (Delhi) . . . 457
----Reassessment--Notice on basis of information received from investigation department that claim of capital gains bogus--Relevant and sufficient material to form reason to believe income escaped assessment--Grant of approval of Commissioner to initiate reassessment proceedings on application of mind--Capital gains not disclosed in regular return--No original assessment under section 143(3) of Act with respect to capital gains--Reassessment not based on change of opinion--Reassessment valid--Declaration in Voluntary Disclosure of Income Scheme not relevant to income pertaining to assessment year--Addition justified-- Ms. Rainee Singh v. ITO (Delhi) . . . 457
----Reassessment--Reassessment beyond four years--Four years to be reckoned from end of assessment year, not date of assessment order--Condition precedent--Assessee mentioning liability to interest for earlier period in note to balance sheet and Assessing Officer considering--No failure by assessee to disclose all material facts necessary for assessment--Reassessment barred by limitation-- Gaekwad Investment Corporation P. Ltd. v. Asst. CIT (Ahmedabad) . . . 388
S. 148 --Penalty--Concealment of income--Reassessment quashed--Penalty does not survive-- Gaekwad Investment Corporation P. Ltd. v. Asst. CIT (Ahmedabad) . . . 388
----Reassessment--Income escaping assessment--Loans taken by assessee--Failure to furnish details of loans on account of litigations between assessee and lender--Matter remanded to Commissioner (Appeals)-- Ms. Rainee Singh v. ITO (Delhi) . . . 457
----Reassessment--Notice on basis of information received from investigation department that claim of capital gains bogus--Relevant and sufficient material to form reason to believe income escaped assessment--Grant of approval of Commissioner to initiate reassessment proceedings on application of mind--Capital gains not disclosed in regular return--No original assessment under section 143(3) of Act with respect to capital gains--Reassessment not based on change of opinion--Reassessment valid--Declaration in Voluntary Disclosure of Income Scheme not relevant to income pertaining to assessment year--Addition justified-- Ms. Rainee Singh v. ITO (Delhi) . . . 457
----Reassessment--Reassessment beyond four years--Four years to be reckoned from end of assessment year, not date of assessment order--Condition precedent--Assessee mentioning liability to interest for earlier period in note to balance sheet and Assessing Officer considering--No failure by assessee to disclose all material facts necessary for assessment--Reassessment barred by limitation-- Gaekwad Investment Corporation P. Ltd. v. Asst. CIT (Ahmedabad) . . . 388
S. 151(2) --Reassessment--Notice on basis of information received from investigation department that claim of capital gains bogus--Relevant and sufficient material to form reason to believe income escaped assessment--Grant of approval of Commissioner to initiate reassessment proceedings on application of mind--Capital gains not disclosed in regular return--No original assessment under section 143(3) of Act with respect to capital gains--Reassessment not based on change of opinion--Reassessment valid--Declaration in Voluntary Disclosure of Income Scheme not relevant to income pertaining to assessment year--Addition justified-- Ms. Rainee Singh v. ITO (Delhi) . . . 457
S. 154 --Assessment--Scope of section 143(1)(a)--Prima facie adjustments--Not permissible in respect of debatable issues--Whether interest earned during pre-operative period to be taxed, or to be set off against expenses--Question of debatable nature--Beyond scope of prima facie adjustments-- Asst. CIT v. Haryana Telecom Ltd. (Delhi) . . . 428
S. 158B --Search and seizure--Block assessment--Undisclosed income--Determination of undisclosed income must be on basis of evidence found as a result of search--Estimate of income not based on material found during search--Not valid--Assessee not liable to prove liabilities shown in accounts--Amount cannot be treated as undisclosed income--Returns for assessment years 1999-2000 and 2000-01 filed beyond time--Amounts returned to be treated as undisclosed income but credit to be given for tax deducted at source and advance tax-- Asst. CIT v. Kalyan Chandra Dey (Gauhati) . . . 399
S. 158BB --Search and seizure--Block assessment--Undisclosed income--Determination of undisclosed income must be on basis of evidence found as a result of search--Estimate of income not based on material found during search--Not valid--Assessee not liable to prove liabilities shown in accounts--Amount cannot be treated as undisclosed income--Returns for assessment years 1999-2000 and 2000-01 filed beyond time--Amounts returned to be treated as undisclosed income but credit to be given for tax deducted at source and advance tax-- Asst. CIT v. Kalyan Chandra Dey (Gauhati) . . . 399
S. 158BC --Search and seizure--Block assessment--Undisclosed income--Determination of undisclosed income must be on basis of evidence found as a result of search--Estimate of income not based on material found during search--Not valid--Assessee not liable to prove liabilities shown in accounts--Amount cannot be treated as undisclosed income--Returns for assessment years 1999-2000 and 2000-01 filed beyond time--Amounts returned to be treated as undisclosed income but credit to be given for tax deducted at source and advance tax-- Asst. CIT v. Kalyan Chandra Dey (Gauhati) . . . 399
S. 254(2) --Appellate Tribunal--Rectification of mistakes--Scope of jurisdiction--No power to review--Tribunal considering case law and provisions--Non-consideration of judgment cited by party--Not a mistake apparent from record-- Asianet Communications Ltd. v. Deputy CIT (Chennai) . . . 441
S. 271(1)(c) --Penalty--Concealment of income--Denial of claim to set off unabsorbed business loss against capital gains--Assessee furnishing all particulars of income --Wrong claim for set off does not amount to concealment of income--Penalty cannot be imposed-- Rubber Udyog Vikas P. Ltd. v. Asst. CIT (Delhi) . . . 418
----Penalty--Concealment of income--Reassessment quashed--Penalty does not survive-- Gaekwad Investment Corporation P. Ltd. v. Asst. CIT (Ahmedabad) . . . 388
