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Saturday, July 30, 2011

IMPORTANT ANNOUNCEMENTS OF ICAI


DEAR MEMBERS,

FOLLOWING ARE THE TWO IMPORTANT ANNOUNCEMENT OF ICAI; hosted on www.icai.org

ANNOUNCEMENT :1
Announcements - Definition of Relative in Chapter-IV of the Council General Guidelines, 2008 - (29-07-2011)
ANNOUNCEMENT
No. ICAI/ESB//2011/02

All the members of the Institute of Chartered Accountants of India (ICAI) are hereby informed that in terms of its decision taken at the 299th Meeting of the Council held on 27th – 28th October, 2010, it has been decided that the term "relative" for the purpose of Chapter-IV of Council General Guidelines, 2008 (Opinion on Financial Statements when there is substantial interest) will have the same meaning as assigned to it in AS-18.

Accordingly, the Chapter IV of the Council General Guidelines, 2008 as appended to the ICAI publication titled "The Chartered Accountants Act, 1949 " is modified and modified version shall read as under -

"Chapter IV
Opinion on financial statements when there is substantial
interest


4.0 A member of the Institute shall not express his opinion on financial statements of any business or enterprise in which one or more persons who are his "relatives" within the meaning of Accounting Standard (AS - 18) has / have, either by themselves or in conjunction with such member, a substantial interest in the said business or enterprise.

Explanation: For this purpose and for the purpose of compliance of Clause (4) of Part I of the Second Schedule to the Chartered Accountants Act, 1949, the expression "substantial interest" shall have the same meaning as is assigned thereto under Appendix (9) to the Chartered Accountants Regulations, 1988. "

This decision shall be in force with effect from 28th June, 2011
========================================================
ANNOUNCEMENT :2

Announcements - Amendment in Council General Guidelines , 2008 - (29-07-2011)
ANNOUNCEMENT
No. ICAI/ESB/2011/01

All the members of Institute of Chartered Accountants of India (ICAI) are hereby informed that in terms of the Council decision taken at its 306th Meeting held on 7th - 8th June, 2011, the Chapter-XII (Minimum Audit Fee in respect of Audit) of the Council General Guidelines, 2008 appended to the ICAI publication titled " The Chartered Accountants Act, 1949" has been repealed with effect from 7th June, 2011




MEF for the year 2011-12 is hosted on http://www.meficai.org/



DEAR MEMBERS,
 
Multipurpose Empanelment Form for the year 2011-12 is hosted on http://www.meficai.org/
 
 

Welcome to The Institute of Chartered Accountants of India

Multipurpose Empanelment Form for the year 2011-12 is an on line application instead of offline application Members can fill up the application form directly in the site it self and Upload it.

Members can view the Application and can Edit the Application in different stages.

However after submission of the application form members will not be able to edit the application,They would be able to view the details submitted through the Aplication Form and take print out of declaration, acknowledgement and of the whole application form.

Note : Please use Internet Explorer 6.0 or later version to fill MEF 2011-12.

Click Here to fill Multipurpose Empanelment Form 2011-12

Friday, July 29, 2011

Deduction under s 80P(2)(a)(i) & Exemption under s 115F

---------- Forwarded message ----------
From: CA Saiprasad Bagrecha <saiprasadbagrecha@gmail.com>


Dear All,
Please find enclosed text on the above topics.Deduction under s 80P(2)(a)(i) & Exemption under s 115F

 

http://www.indiantaxhome.com/2011/07/deduction-under-s-80p2ai_29.html

Interest income received by the co-operative bank from advance rent is eligible for a deduction under s 80P(2)(a)(i), as held by MumHC in CIT v The Maratha Mandir Co-op Bank Ltd — In favour of: The assessee; ITA No 4125 of 2010.

http://www.indiantaxhome.com/2011/07/exemption-under-s-115f.html

Bonus shares received by the assessee are eligible for an exemption under s 115F even if the original shares were acquired in foreign currency, as held by MumTrib in Sanjay Gala v ITOIn favour of: The assessee; ITA No 2989/Mum/2008: (AY 2005–2006).



Deduction under s 80M & Deduction under s 80HHC

---------- Forwarded message ----------
From: CA Saiprasad Bagrecha <saiprasadbagrecha@gmail.com>


Dear All,
Find enclosed text on Deduction under s 80M & Deduction under s 80HHC

http://www.indiantaxhome.com/2011/07/deduction-under-s-80m_28.html

 Actual expenditure made in receiving the dividend is to be deducted for the purpose of calculating the deduction under s 80M and not a notional one based on average calculation, as held by KolHC in Faridabad Investment Company Ltd v CITIn favour of: The assessee; ITA No 60 of 2004.

  http://www.indiantaxhome.com/2011/07/deduction-under-s-80hhc_28.html

If a deduction under s 80-IA has been taken, a deduction under s 80HHC is not admissible, as held by PHHC in Gupta International v CIT, KarnalIn favour of: The revenue; ITA No 174 of 2011.

 
 



Various MCA circulars

MCA has issued various circulars on following subjects.

 

General Circular No: 55/2011 dated 26.07.2011 on Scrutiny inspection and investigation in all winding up cases.

 

General Circular No: 54/2011 dated 26.07.2011 on Pro-active action in case of winding up petitions.

 

General Circular No: 53/2011 dated 26.07.2011 on Guidelines for RDs/ROCs in the matter of scheme of arrangement/amalgamation under section 391-394.

 

General Circular No: 52/2011 dated 25.07.2011 on Simplified procedure for obtaining online approval of Central Government under section 297 of the Companies Act, 1956.

 

General Circular No: 51/2011 dated 25.07.2011 on Simplified procedure for rectification of register of charges under section 141 of the Companies Act, 1956.

 

General Circular No: 50/2011 dated 25.07.2011  on Simplified procedure for obtaining confirmation of shifting of registered office from one state to another state under section 17 of the Companies Act,1956.

 

General Circular No: 49/2011 dated 23.07.2011 on Online incorporation of companies within 24 hours

 

 



Wednesday, July 27, 2011

RBI Hikes Repo, Reverse Rpo by 50 BPS each, CRR Unchanged

---------- Forwarded message ----------
From: Parthiv Mehta <parthivtmehta@gmail.com>


RBI raised interest rates by a higher-than-expected 50 basis points on
Tuesday, stepping up its fight against persistently high inflation
despite slowing growth in Asia's third-largest economy.

TheReserve Bank of India (RBI) increased therepo rate , at which it
lends to banks, to 8 per cent, exceeding market expectations that it
would raise rates by 25 basis points.

The rate increase is its 11th since March 2010, making the RBI one of
the most aggressive inflation fighters among central banks.

Still, wholesale price index inflation was 9.44 per cent in June, more
than double the central bank's comfort level, and high prices are
expected to persist in coming months.

The central bank, whose forecasts for inflation have proven optimistic
in recent quarters, increased its outlook for wholesale inflation at
the end of the fiscal year in March to 7 per cent, from 6 percent
earlier.

"Considering the overall growth and inflation scenario, there is a
need to persevere with the anti-inflationary stance," RBI Governor
Duvvuri Subbarao wrote in his quarterly policy review.

The RBI stuck with its forecast for economic growth in the current
fiscal year of around 8 per cent. While some interest-rate sensitive
sectors are showing signs of moderating growth, it said, "there is no
evidence of a sharp or broad-based slowdown as yet."

All 23 analysts in a Reuters poll last week had expected the RBI to
raise rates by 25 basis points on Tuesday, although 9 of them expected
a pause in the tightening cycle after July amid signs of slowing
domestic growth and global uncertainty.

Recent industrial output and manufacturing data was the worst in nine
months, while sales of cars have slowed sharply and loan demand is
easing, complicating the central bank's inflation-fighting task.

Subbarao said Tuesday's policy actions are expected to "maintain the
credibility of the commitment of monetary policy to controlling
inflation."

The measures are also expected to "reinforce the point that in the
absence of complementary policy responses on both demand and supply
sides, stronger monetary policy actions are required," Subbarao said
in his report.

January-March quarter growth was a worse-than-expected 7.8 percent,
with economists expecting India to grow at 7.9 per cent in the fiscal
year that began in April, according to a Reuters poll, less than the
8.5 percent growth in the fiscal year that ended in March.



Deduction under s 36(1)(iii) , Exemption under s 10(23C)(vi), Appeal under s 268A & Depreciation

---------- Forwarded message ----------
From: CA Saiprasad Bagrecha <saiprasadbagrecha@gmail.com>

 

http://www.indiantaxhome.com/2011/07/deduction-under-s-361iii.html

Interest paid by the assessee, on account of an investment in its sister concern from borrowed funds for the acquisition of shares in a subsidiary company in order to have control over that company, is eligible for a deduction under s 36(1)(iii), as held by MumHC in CIT v Phil Corporation Ltd & AnrIn favour of: The assessee; Tax Appeal No 57 of 2002.

 

http://www.indiantaxhome.com/2011/07/exemption-under-s-1023cvi.html

Matter has been remitted for consideration of issue whether the society, which has been mainly formed with the objective of carrying out an educational activity, can be denied an exemption merely on the suspicion that it may deviate from it in the future, as held by DelHC in Palam Jain Educational & Welfare v DGITIn favour: Others; Writ Petition (Civil) No 7578/2008.

 

http://www.indiantaxhome.com/2011/07/appeal-under-s-268a.html

Monetary limit — Appeal filed by the revenue would not be barred by the Board's circular even if the assessee files a loss in the return on the ground of the tax effect being "Nil" or lower than the monetary limit fixed by the Board and, in such cases, the notional tax effect should be taken into account, as held by GujHC in CIT v BD Patel Quarry Works Private LimitedIn favour of: The revenue; Tax Appeal No 621 of 2009.

 

http://www.indiantaxhome.com/2011/07/depreciation_25.html

 Depreciation on the capital assets was allowable even when capital expenditure on the acquisition of the corresponding assets had already been allowed as "application of income" for the purpose of allowing the exemption under s 11, as held by PHHC in CIT v Market Committee, TohonaIn favour of: The assessee; ITA No 186 of 2011.

 



--
=======================================================================================
CA Saiprasad P. Bagrecha 
Address :- F-7, 2nd Floor,Butte Patil Pride,Near Shivaji Statue,Chandannagar,Pune -14
Ph:020-2701 9233 Fax : 020- 2701 9233 Mob:- +91- 98235 26824 / + 91-82750 32822


Various MCA circulars

Various MCA circulars

General Circular No: 55/2011 dated 26.07.2011 on Scrutiny inspection and investigation in all winding up cases.

General Circular No: 54/2011 dated 26.07.2011 on Pro-active action in case of winding up petitions.

General Circular No: 53/2011 dated 26.07.2011 on Guidelines for RDs/ROCs in the matter of scheme of arrangement/amalgamation under section 391-394.

General Circular No: 52/2011 dated 25.07.2011 on Simplified procedure for obtaining online approval of Central Government under section 297 of the Companies Act, 1956.

General Circular No: 51/2011 dated 25.07.2011 on Simplified procedure for rectification of register of charges under section 141 of the Companies Act, 1956.

General Circular No: 50/2011 dated 25.07.2011  on Simplified procedure for obtaining confirmation of shifting of registered office from one state to another state under section 17 of the Companies Act,1956.

General Circular No: 49/2011 dated 23.07.2011 on Online incorporation of companies within 24 hours

Tuesday, July 26, 2011

New Circular , 25 July 2011

---------- Forwarded message ----------
From: CA Saiprasad Bagrecha <saiprasadbagrecha@gmail.com>

Circular No. 4/2011, Dated: 19-7-2011

Section 281 of the Income-tax Act, 1961 – Certain transfers to be Void – Guidelines for
Prior permission under section 281 to create a charge on the Assets of Business
References have been received by the Board regarding issuance of guidelines for granting of
prior permission u/s 281 of the IT Act, 1961 to transfer or create a charge on the assets of the
assessee. The Board has considered the matter and in order to have uniformity on the issue, it
has been decided that:
1. The taxpayers should apply in the prescribed form annexed hereto titled "Application u/s
281 of the IT Act, 1961" which would be available on the departmental website, as well as
with the Assessing Officers.
2. The taxpayer would have to file the form at least thirty days prior to the proposed date of
transaction.

3. The circumstances under which prior permission u/s 281 should be granted by the
Assessing Officers are as follows:
(i) If there is no demand outstanding and there is no likelihood of demand arising in
the next six months, then the permission should be granted.
(ii) If undisputed demand is outstanding and there is no likelihood of demand arising
in next 6 months, then the taxpayer should pay the same along with interest due
thereon and then permission should be granted.
(iii) If there is disputed demand outstanding, then the taxpayer should obtain stay for
the same and indemnify the outstanding demand by way of bank guarantee or
sufficient assets or by Department retaining the first charge on the assets proposed to
be transferred or on which such charge is being created, to the extent of such demand.
Thereafter, the permission u/s 281 would be granted by the A.O.
(iv) If demand is likely to arise in the next six month, then the A.O. should explore
the possibility of action prescribed u/s 281B.
4. There would be only one level of intervention i.e., at the level of the range head for
granting permission. The cases in which A.O. would require such approval would be where
(a) value of assets being transferred or on which charge is being created, or
(b) the amount of charge being created is Rs. Ten crores or more.
5. The timelines for granting/refusing permission u/s 281 by the A.O. are as follows:
(i) If there is no demand outstanding and there is no likelihood of demand arising in
the next six months, then the A.O. should grant the permission within ten working
days of the receipt of the application.
(ii) If undisputed demand is outstanding and there is no likelihood of demand arising
in next 6 months, then the A.O. should grant permission within ten working days of
payment as in para 3(ii) above.
(iii) If there is disputed demand outstanding and the taxpayer has obtained stay and
indemnified the demand, then the A.O. should grant the permission within ten
working days of the indemnification of the demand.
(iv) If demand is likely to arise in the next six months and the A.O. is considering
actions prescribed u/s 281B for the assets excluding the asset under consideration,
then the A.O. should grant the permission within fifteen working days of the receipt
of the application.
(v) If the taxpayer does not pay the undisputed outstanding demand or his application
for stay of disputed demand is rejected or he is unable to indemnify the outstanding
demand, the application shall be disposed of within a period of ten working days. In
case the permission is not being granted, a speaking and reasoned order conveying
refusal would be issued with the approval of the Range head within ten working days
of expiry of time given to the taxpayer to pay the undisputed demand or rejection of
his stay application, as the case may be.
These time limits should be followed scrupulously by the A.Os.
6. The validity of the letter granting permission u/s 281 would be:
(i) One hundred and eighty days from the date of issue of approval, or
(ii) Service of order of attachment u/s 281B whichever is earlier.
7. Once the asset is transferred or charge is created, the taxpayer should submit the
documents, in this regard, to the A.O. for his record.
8. This circular shall come into force with immediate effect.
Form I.T.N.S. 281 Application u/s 281 of IT Act,
1961
DATE OF APPLICATION
To,
The Assessing Officer,
………………………..
………………………..
………………………..
I/M/S ……………………………………………………………………. (name of the assesse
in block letters) son/daughter of …………………….do, hereby, request that permission may
be granted under clause (ii) of the proviso to section 281 creating a charge on, or to part with
the possession (by way of sale, mortgage, gift, exchange or any other mode of transfer
whatsoever) of asset(s) given in D4 of Part D below in favour of person(s) to be mentioned in
D1 of Part D below.

Sunday, July 24, 2011

Case Laws on Penalties / Costs levied on Department for harassment of Assessee

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

ITO vs. Audyogik Tantra Shikshan (ITAT Pune)


AO reprimanded for harassing the assessee by wrongly levying penalty

 

The AO levied penalty u/s 271(1)(c) which was deleted by the CIT(A). The AO filed an appeal before the Tribunal. The assessee filed a CO in which it was inter alia argued that in the assessment order which had been supplied to the assessee, there was no direction for initiating penalty though in the assessment order filed by the department with the memo of the appeal, there was a reference to the issue of notice u/s 271(1)(c). The assessee demanded costs u/s 254(2B). HELD by the Tribunal upholding the assessee's plea:

 

"… we are surprised to note that contents of assessment orders meant for the same A.Y. 2004-05 in the case of the same assessee, are different. Both the assessment orders are stated to have been passed by the A.O on 25.11.2006 …… The copy of assessment order filed by the assessee with its cross objection is a certified true copy by the ITO and further certified as true copy by the assessee. The above stated facts and circumstances suggest that the A.O has tried to cover up its lapses in not mentioning his satisfaction that it is a fit case for levy of penalty u/s. 271(1)(c) and recording of the initiation of penalty proceedings in the assessment order, which cannot in any way be appreciated. Under these circumstances, there is no reason to doubt the allegation of the assessee that the A.O was adamant to harass the assessee. Thus, in our view, it is a fit case of awarding cost u/s. 254(2B) of the Act, but at the same time, we appreciate the approach of the assessee as discussed hereinabove that they are not interested in the awarding of the cost but their whole purpose in making such request in awarding the cost is only to bring the high handedness of the A.O against the assessee to the notice of the Tribunal. Under the circumstances, we though restrain ourselves from awarding the cost as wished by the assessee, but at the same time, we are inclined to record over here before parting with the order that A.O should have confined himself in making just and proper assessment only, as per the provisions of the law and harassment of the assessee which is not permitted under the Statute should have been avoided at all cost."




=========================================================================

Shramjivi Nagari Sahakari Pat Sanstha vs. ACIT (ITAT Pune)


AO directed to pay costs for "recovery harassment"

 

The assessee, a credit co-operative society, contravened s. 269SS & 269T because of which penalty u/s 271E was levied. The CIT(A) confirmed the levy of penalty. Before service of the CIT(A)'s order, the assessee's bank account was attached u/s 226(3). The assessee filed a stay application and claimed that as the assessee had to bear costs owing to the illegal action of the AO, costs had to be awarded to it. HELD upholding the assessee's plea:

 

The AO's order of attaching the bank account of the assessee even before the service of the CIT(A)'s order was wrong in view of (a) the CBDT's letter dated 25.3.2004 advising that penalties u/s 271-D & 271-E for violation of s. 269-SS & 269-T should not be indiscriminately imposed without considering s. 273-B, (b) the CCIT's direction that demand arising out of penalties imposed u/s 271-D & 271-E should be stayed in cases of co-operative credit societies, (c) UOI v/s Raja Mohammed Amir Mohammed AIR 2005 SC 4383 where concern was expressed over dangerous attitude developing amongst Executive resulting in institutional damage & (d) KEC Interntional Ltd 251 ITR 158 (Bom) where it was held that generally coercive measures may not be adopted during the period provided by the Statute to go in appeal. Accordingly, the assessee was unnecessarily subjected to harassment by the actions of the lower authorities. It is thus a fit case for imposing costs u/s 254(2B) on the Revenue to compensate the harassment caused by the officers of the Revenue at fault.




======================================================================


In Re Rajendra Singh (Bihar Human Rights Commission)


If Search & Seizure action violates "human rights", officers personally liable to pay compensation

 

The income-tax department conducted search and seizure operations u/s 132 at the premises of the assessee when interrogation & recording of statement was conducted for more than 30 hours and till the odd hours of the night without any break or interval. The assessee filed a complaint alleging violation of human rights. HELD upholding the plea:

 

The Commission is of the view that the members of the raiding party may take their own time to conclude the search & seizure operations but such operations must be carried out keeping in view the basic human rights of the Individual. They have no right to cause physical and mental torture to him. If the officer-in-charge of the Interrogation/recording of statements wanted to continue with the process he should have stopped the same at the proper time and resumed it next morning. But continuing the process without any break or interval at odd hours up to 3:30 AM, forcing the applicant and/ or his family members to remain awake when it is time to sleep was torturous act which and can not be countenanced in a civilised society. It was violative of their rights relating to dignity of the individual and therefore violative of human rights. Even die-hard criminal offenders have certain human rights which can not be taken away. The applicant's position was not worse than that. In the opinion of the Commission, the Income Tax Department should ensure that the search & seizure operations at large in future are carried out without violating one's basic human rights.

 

The Department was asked to show-cause why the assessee should not be monetarily compensated – from the salary of the concerned officials.





--
warm regards,
CA. Rahul Bajaj

Thursday, July 21, 2011

Deduction under s 43B , Business of exploration, etc, of mineral oils & Remission or cessation of liability

---------- Forwarded message ----------
From: CA Saiprasad Bagrecha <saiprasadbagrecha@gmail.com>
Date: Thu, Jul 21, 2011 at 9:29 AM


 Dear All,
Find enclosed text on Deduction under s 43B , Business of exploration, etc, of mineral oils & Remission or cessation of liability
 
The benefit of s 43B(a) cannot be denied to the assessee on the ground that the excise duty was paid in advance in accordance with the mercantile system of accounting, as held by KolHC in Paharpur Cooling Towers Ltd v CITIn favour of: The assessee; ITA No 2 of 2004.
 
 

For the purposes of s 44BB, the vessels provided are covered under the definition of "plant" and the consideration received by the non-resident for supply of the vessels on hire, when used in prospecting for or extraction or production of oil and gas in India, is covered under s 44BB. The effective rate at which the tax has to be withheld from the payments would be 4.22%, as held by AAR in Bourbon Offshore Asia Pte Ltd, in Re; AAR No 937 of 2010.

There has to be a positive act on the part of the creditor in the current year which would provide the benefit to the assessee by way of a remission. In absence of such act, it cannot be held that a liability has been remitted in favour of the assessee, as held by AhdTrib in ITO v Bhavesh Prints (P) LtdIn favour of: The assessee; ITA No 1302 (Ahd) of 2010: (AY 2007–2008).




CA RAJU SHAH ITR VOL 335 PART 4 AND ITR (TRIB) VOL 10 PART 4


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

 

CA.RAJU SHAH