INCOME TAX REPORTS (ITR)
Volume 335 : Part 3 (Issue dated 18-7-2011)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Acquisition of immovable property by Central Government --Conditions precedent--Reason to believe understatement of consideration--Existence of material to support such belief--Income-tax Act, 1961, Chapter XX-A, s. 269D-- CIT v. Green Valley Agro Mills Ltd. (Delhi) . . . 347
Advance tax --Interest--Waiver--Conditions precedent--CBDT Circular--Waiver only if assessee squarely falls within scope of circular--Income-tax Act, 1961, ss. 119(2)(a), 234B, 234C-- Priya Aqua Farms v. Director General of Income-tax (Inv.) (AP) . . . 428
Appeal to Appellate Tribunal --Powers--Power to remand--Reassessment set aside on merits by Commissioner (Appeals)--Tribunal holding service of notice not valid and remanding matter--Tribunal should have considered issues on merits--Order of remand--Not valid--Income-tax Act, 1961, s. 254-- Satnam Singh v. CIT
Business income --Remission or cessation of trading liability--Law applicable--Amount received on remission by successor-in-interest of business in accounting year relevant to assessment year 1986-87--Not assessable in his hands--Income-tax Act, 1961, s. 41(1)-- CIT v. Uttaranchal Transport (All) . . . 339
Capital gains --Firm--Clause in partnership deed that on dissolution business should vest in partner or partners who offered highest price--Dissolution of firm--Sale under order of court to three of erstwhile partners--Transfer for purposes of section 45--Transaction not a slump sale--Erstwhile partners liable to pay tax on capital gains--Income-tax Act, 1961, s. 45-- B. Raghurama Prabhu Estate v. Joint CIT (Asstt.)
Cash credits --Burden of proof--Subscription to share capital --Assessee discharging onus regarding veracity of transactions --Addition under section 68 not justified--Lower authorities accepting genuineness of transactions--Finding of fact--Income-tax Act, 1961, s. 68-- CIT v. Gangour Investment Ltd . (Delhi) . . . 359
Depreciation --Entry in Schedule--Gas cylinder including valves and regulators--Liquefied petroleum gas cylinder mounted on chassis of truck--Is gas cylinder entitled to depreciation at 100 per cent.--Cannot be treated as motor vehicle merely because mounted on one--Income-tax Act, 1961, s. 32--Income-tax Rules, 1962, r. 5 ; Appx. I, Part I, item III(ii)F(4)-- CIT v. Anantha Gas Supplies [FB] (AP) . . . 334
----Plant--Meaning of--Poultry shed is not a plant--Not entitled to depreciation at higher rate--Income-tax Act, 1961, s. 32-- CIT v. Padmavathi Hatcheries P. Ltd.
Export --Special deduction--Disclaimer in favour of supporting manufacturer--Reassessment on ground assessee not eligible for deduction--Deduction granted earlier added back--Interest--Waiver of interest rejected as conditions in CBDT circular not satisfied--Writ--Proper remedy is appeal against assessment order--Income-tax Act, 1961, ss. 80HHC, 119(2)(a), 147, 148, 234B, 234C--Constitution of India, art. 226--CBDT circulars dated 17-1-2006 and 26-6-2006-- Priya Aqua Farms v. Director General of Income-tax (Inv.) (AP) . . . 428
----Special deduction--Total turnover--Computation--Sale of scrap in domestic market--Includible in total turnover--Income-tax Act, 1961, s. 80HHC-- CIT v. Bicycle Wheels (India) (P&H) . . . 384
Income or capital --Subsidy--Subsidy granted by State Government for expansion of capacity, modernization and improving marketing capacity--Capital receipt--Fact that subsidy was equal to 90 per cent. of sales tax not conclusive--Income-tax Act, 1961-- CIT v. Rasoi Ltd. (Cal) . . . 438
Interpretation of taxing statutes --Strict construction-- CIT v. Anantha Gas Supplies [FB] (AP) . . . 334
Penalty --Concealment of income--Failure to offer compensation for land on ground of pendency of further proceedings--Issue debatable--Penalty cannot be levied--Income-tax Act, 1961, s. 271(1)(c)-- CIT v. Bharat Lal Dagar (HUF)
----Concealment of income--Surrender of income on condition no penalty would be levied--No evidence of concealment--Penalty could not be levied--Income-tax Act, 1961, s. 271(1)(c)-- CIT v. Subhash Kumar Jain (P&H) . . . 364
----Failure to furnish return in time--Interest--Waiver of penalty and interest--Discretion of Commissioner--Factors to be considered--Commissioner not to go into question of reasonable cause for delay in filing return--Discretion must be exercised in a judicial manner--Rejection of application for waiver on grounds that assessee had no reasonable cause for delay in filing return and that she had already paid penalty and interest--Rejection not justified--Income-tax Act, 1961 ss. 271(1)(a), 273A-- Shayama Sanjay Shah v. CIT (Guj) . . . 446
Precedent --Effect of decision of Supreme Court in CIT v. Hukumchand Mohanlal [1971] 82 ITR 624-- CIT v. Uttaranchal Transport (All) . . . 339
----Effect of decision of Supreme Court in CIT v. Venkateswara Hatcheries P. Ltd. [1999] 237 ITR 174 (SC)-- CIT v. Padmavathi Hatcheries P. Ltd.
Refund --Advance tax--Interest--Assessment set aside by Tribunal but restored by High Court--Amount refunded pursuant to order of Tribunal--Interest payable under sections 214 and 244(1A) for period between refund pursuant to order of Tribunal and recovery in accordance with order of High Court--Income-tax Act, 1961, ss. 214, 244(1A)-- CIT v. Pioneer Sports Works P. Ltd. (P&H) . . . 435
Revision --Surrender of income on condition no penalty would be levied--Failure to levy penalty--Order not erroneous--Order could not be revised--Income-tax Act, 1961, ss. 143(3), 263, 271(1)(c)-- CIT v. Subhash Kumar Jain (P&H) . . . 364
----Validity--Assessee paying for purchase of non-agricultural produce in cash exceeding prescribed limit--Payments to transport contractors without deducting tax at source--Assessing Officer not applying provision of section 40A(3) and 40(a)(ia)--Order of Assessing Officer erroneous--Revision of order valid--Income-tax Act, 1961, ss. 40(a)(ia), 40A(3), 263-- Raja and Co. v. CIT (Ker) . . . 381
Search and seizure --Block assessment--Undisclosed income--Income which would not have been disclosed--Factors to be considered--Capital gains disclosed in return filed after search after time prescribed under section 139(1)--No other act such as payment of advance tax to show intent to disclose--Amount assessable as undisclosed income--Income-tax Act, 1961, ss. 139(1), (4), 158BC, 158BD-- CIT v. A. T. Invofin India P. Ltd . (Delhi) . . . 370
Exploration of mineral oils --Special provision for computation--Scope of--Non-resident--Off-shore oil exploration block--Providing geophysical services to oil and gas exploration industry--Taxable part of revenue in India--Computation--Income-tax Act, 1961, s. 44BB-- OHM Ltd ., In re . . . 423
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Art. 226 --Export--Special deduction--Disclaimer in favour of supporting manufacturer--Reassessment on ground assessee not eligible for deduction--Deduction granted earlier added back--Interest--Waiver of interest rejected as conditions in CBDT circular not satisfied--Writ--Proper remedy is appeal against assessment order--CBDT circulars dated 17-1-2006 and 26-6-2006-- Priya Aqua Farms v. Director General of Income-tax (Inv.) (AP) . . . 428
S. 32 --Depreciation--Entry in Schedule--Gas cylinder including valves and regulators--Liquefied petroleum gas cylinder mounted on chassis of truck--Is gas cylinder entitled to depreciation at 100 per cent.--Cannot be treated as motor vehicle merely because mounted on one-- CIT v. Anantha Gas Supplies [FB] (AP) . . . 334
----Depreciation--Plant--Meaning of--Poultry shed is not a plant--Not entitled to depreciation at higher rate-- CIT v. Padmavathi Hatcheries P. Ltd.
S. 40(a)(ia) --Revision--Validity--Assessee paying for purchase of non-agricultural produce in cash exceeding prescribed limit--Payments to transport contractors without deducting tax at source--Assessing Officer not applying provision of section 40A(3) and 40(a)(ia)--Order of Assessing Officer erroneous--Revision of order valid-- Raja and Co. v. CIT (Ker) . . . 381
S. 40A(3) --Revision--Validity--Assessee paying for purchase of non-agricultural produce in cash exceeding prescribed limit--Payments to transport contractors without deducting tax at source--Assessing Officer not applying provision of section 40A(3) and 40(a)(ia)--Order of Assessing Officer erroneous--Revision of order valid-- Raja and Co. v. CIT (Ker) . . . 381
S. 41(1) --Business income--Remission or cessation of trading liability--Law applicable--Amount received on remission by successor-in-interest of business in accounting year relevant to assessment year 1986-87--Not assessable in his hands-- CIT v. Uttaranchal Transport (All) . . . 339
S. 44BB --Exploration of mineral oils--Special provision for computation--Scope of--Non-resident--Off-shore oil exploration block--Providing geophysical services to oil and gas exploration industry--Taxable part of revenue in India--Computation-- OHM Ltd ., In re (AAR) . . . 423
S. 45 --Capital gains--Firm--Clause in partnership deed that on dissolution business should vest in partner or partners who offered highest price--Dissolution of firm--Sale under order of court to three of erstwhile partners--Transfer for purposes of section 45--Transaction not a slump sale--Erstwhile partners liable to pay tax on capital gains-- B. Raghurama Prabhu Estate v. Joint CIT (Asstt.) (Karn) . . . 394
S. 68 --Cash credits--Burden of proof--Subscription to share capital--Assessee discharging onus regarding veracity of transactions --Addition under section 68 not justified--Lower authorities accepting genuineness of transactions--Finding of fact-- CIT v. Gangour Investment Ltd . (Delhi) . . . 359
S. 80HHC --Export--Special deduction--Disclaimer in favour of supporting manufacturer--Reassessment on ground assessee not eligible for deduction--Deduction granted earlier added back--Interest--Waiver of interest rejected as conditions in CBDT circular not satisfied--Writ--Proper remedy is appeal against assessment order--CBDT circulars dated 17-1-2006 and 26-6-2006-- Priya Aqua Farms v. Director General of Income-tax (Inv.) (AP) . . . 428
----Export--Special deduction--Total turnover--Computation--Sale of scrap in domestic market--Includible in total turnover-- CIT v. Bicycle Wheels (India)
S. 119(2)(a) --Advance tax--Interest--Waiver--Conditions precedent--CBDT Circular--Waiver only if assessee squarely falls within scope of circular-- Priya Aqua Farms v. Director General of Income-tax (Inv.) (AP) . . . 428
----Export--Special deduction--Disclaimer in favour of supporting manufacturer--Reassessment on ground assessee not eligible for deduction--Deduction granted earlier added back--Interest--Waiver of interest rejected as conditions in CBDT circular not satisfied--Writ--Proper remedy is appeal against assessment order--CBDT circulars dated 17-1-2006 and 26-6-2006-- Priya Aqua Farms v. Director General of Income-tax (Inv.) (AP) . . . 428
S. 139(1) --Search and seizure--Block assessment--Undisclosed income--Income which would not have been disclosed--Factors to be considered--Capital gains disclosed in return filed after search after time prescribed under section 139(1)--No other act such as payment of advance tax to show intent to disclose--Amount assessable as undisclosed income-- CIT v. A. T. Invofin India P. Ltd . (Delhi) . . . 370
S. 139(4) --Search and seizure--Block assessment--Undisclosed income--Income which would not have been disclosed--Factors to be considered--Capital gains disclosed in return filed after search after time prescribed under section 139(1)--No other act such as payment of advance tax to show intent to disclose--Amount assessable as undisclosed income-- CIT v. A. T. Invofin India P. Ltd . (Delhi) . . . 370
S. 143(3) --Revision--Surrender of income on condition no penalty would be levied--Failure to levy penalty--Order not erroneous--Order could not be revised-- CIT v. Subhash Kumar Jain (P&H) . . . 364
S. 147 --Export--Special deduction--Disclaimer in favour of supporting manufacturer--Reassessment on ground assessee not eligible for deduction--Deduction granted earlier added back--Interest--Waiver of interest rejected as conditions in CBDT circular not satisfied--Writ--Proper remedy is appeal against assessment order--CBDT circulars dated 17-1-2006 and 26-6-2006-- Priya Aqua Farms v. Director General of Income-tax (Inv.) (AP) . . . 428
S. 148 --Export--Special deduction--Disclaimer in favour of supporting manufacturer--Reassessment on ground assessee not eligible for deduction--Deduction granted earlier added back--Interest--Waiver of interest rejected as conditions in CBDT circular not satisfied--Writ--Proper remedy is appeal against assessment order--CBDT circulars dated 17-1-2006 and 26-6-2006-- Priya Aqua Farms v. Director General of Income-tax (Inv.) (AP) . . . 428
S. 158BC --Search and seizure--Block assessment--Undisclosed income--Income which would not have been disclosed--Factors to be considered--Capital gains disclosed in return filed after search after time prescribed under section 139(1)--No other act such as payment of advance tax to show intent to disclose--Amount assessable as undisclosed income-- CIT v. A. T. Invofin India P. Ltd . (Delhi) . . . 370
S. 158BD --Search and seizure--Block assessment--Undisclosed income--Income which would not have been disclosed--Factors to be considered--Capital gains disclosed in return filed after search after time prescribed under section 139(1)--No other act such as payment of advance tax to show intent to disclose--Amount assessable as undisclosed income-- CIT v. A. T. Invofin India P. Ltd . (Delhi) . . . 370
S. 214 --Refund--Advance tax--Interest--Assessment set aside by Tribunal but restored by High Court--Amount refunded pursuant to order of Tribunal--Interest payable under sections 214 and 244(1A) for period between refund pursuant to order of Tribunal and recovery in accordance with order of High Court-- CIT v. Pioneer Sports Works P. Ltd. (P&H) . . . 435
S. 234B --Advance tax--Interest--Waiver--Conditions precedent--CBDT Circular--Waiver only if assessee squarely falls within scope of circular-- Priya Aqua Farms v. Director General of Income-tax (Inv.) (AP) . . . 428
----Export--Special deduction--Disclaimer in favour of supporting manufacturer--Reassessment on ground assessee not eligible for deduction--Deduction granted earlier added back--Interest--Waiver of interest rejected as conditions in CBDT circular not satisfied--Writ--Proper remedy is appeal against assessment order--CBDT circulars dated 17-1-2006 and 26-6-2006-- Priya Aqua Farms v. Director General of Income-tax (Inv.) (AP) . . . 428
S. 234C --Advance tax--Interest--Waiver--Conditions precedent--CBDT Circular--Waiver only if assessee squarely falls within scope of circular-- Priya Aqua Farms v. Director General of Income-tax (Inv.) (AP) . . . 428
----Export--Special deduction--Disclaimer in favour of supporting manufacturer--Reassessment on ground assessee not eligible for deduction--Deduction granted earlier added back--Interest--Waiver of interest rejected as conditions in CBDT circular not satisfied--Writ--Proper remedy is appeal against assessment order--CBDT circulars dated 17-1-2006 and 26-6-2006-- Priya Aqua Farms v. Director General of Income-tax (Inv.) (AP) . . . 428
S. 244(1A) --Refund--Advance tax--Interest--Assessment set aside by Tribunal but restored by High Court--Amount refunded pursuant to order of Tribunal--Interest payable under sections 214 and 244(1A) for period between refund pursuant to order of Tribunal and recovery in accordance with order of High Court-- CIT v. Pioneer Sports Works P. Ltd. (P&H) . . . 435
S. 254 --Appeal to Appellate Tribunal--Powers--Power to remand--Reassessment set aside on merits by Commissioner (Appeals)--Tribunal holding service of notice not valid and remanding matter--Tribunal should have considered issues on merits--Order of remand--Not valid-- Satnam Singh v. CIT (P&H) . . . 342
S. 263 --Revision--Surrender of income on condition no penalty would be levied--Failure to levy penalty--Order not erroneous--Order could not be revised-- CIT v. Subhash Kumar Jain (P&H) . . . 364
----Revision--Validity--Assessee paying for purchase of non-agricultural produce in cash exceeding prescribed limit--Payments to transport contractors without deducting tax at source--Assessing Officer not applying provision of section 40A(3) and 40(a)(ia)--Order of Assessing Officer erroneous--Revision of order valid-- Raja and Co. v. CIT
Chapter XX-A --Acquisition of immovable property by Central Government--Conditions precedent--Reason to believe understatement of consideration--Existence of material to support such belief-- CIT v. Green Valley Agro Mills Ltd.
S. 269D --Acquisition of immovable property by Central Government--Conditions precedent--Reason to believe understatement of consideration--Existence of material to support such belief-- CIT v. Green Valley Agro Mills Ltd. (Delhi) . . . 347
S. 271(1)(a) --Penalty--Failure to furnish return in time--Interest--Waiver of penalty and interest--Discretion of Commissioner--Factors to be considered--Commissioner not to go into question of reasonable cause for delay in filing return--Discretion must be exercised in a judicial manner--Rejection of application for waiver on grounds that assessee had no reasonable cause for delay in filing return and that she had already paid penalty and interest--Rejection not justified-- Shayama Sanjay Shah v. CIT
S. 271(1)(c) --Penalty--Concealment of income--Failure to offer compensation for land on ground of pendency of further proceedings--Issue debatable--Penalty cannot be levied-- CIT v. Bharat Lal Dagar (HUF) (P&H) . . . 345
----Penalty--Concealment of income--Surrender of income on condition no penalty would be levied--No evidence of concealment--Penalty could not be levied-- CIT v. Subhash Kumar Jain (P&H) . . . 364
----Revision--Surrender of income on condition no penalty would be levied--Failure to levy penalty--Order not erroneous--Order could not be revised-- CIT v. Subhash Kumar Jain (P&H) . . . 364
S. 273A --Penalty--Failure to furnish return in time--Interest--Waiver of penalty and interest--Discretion of Commissioner--Factors to be considered--Commissioner not to go into question of reasonable cause for delay in filing return--Discretion must be exercised in a judicial manner--Rejection of application for waiver on grounds that assessee had no reasonable cause for delay in filing return and that she had already paid penalty and interest--Rejection not justified-- Shayama Sanjay Shah v. CIT
r. 5 ; Appx. I, Part I, item III(ii)F(4) --Depreciation--Entry in Schedule--Gas cylinder including valves and regulators--Liquefied petroleum gas cylinder mounted on chassis of truck--Is gas cylinder entitled to depreciation at 100 per cent.--Cannot be treated as motor vehicle merely because mounted on one-- CIT v. Anantha Gas Supplies [FB] (AP) . . . 334
ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))
Volume 10 : Part 3 (Issue dated : 18-07-2011)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Accounting --Rejection of accounts--Book profits--Accrual basis followed under Companies Act and cash basis under Income-tax Act--Rejection of accounts and additions to income--Not justified--Income-tax Act, 1961, s. 115JB-- Asst. CIT v. Shriram Transport Finance Co. Ltd. (Chennai) . . . 277
Bad debt --Non-banking financial company--Bona fide writing off of debt in conformity with Reserve Bank directions--To be allowed--Income-tax Act, 1961, s. 36(1)(vii) -- Asst. CIT v. Shriram Transport Finance Co. Ltd. (Chennai) . . . 277
Business expenditure --Provision for warranty made on scientific basis--Allowable --Income-tax Act, 1961, s. 37-- Asst. CIT v. Simpson and Co. Ltd. (Chennai) . . . 283
Business income --Assessee carrying on business of distribution of computer products--Taking business decision to transfer distribution to another company and earn commission--Memorandum of association of assessee permitting assessee to make arrangement with any company to achieve its objects--Income from commission is business income, not income from other sources--Income-tax Act, 1961, ss. 28, 56-- Deputy CIT v. FX Info Technologies P. Ltd. (Delhi) . . . 250
Capital gains --Capital loss--Loss on divestment of shares in sister concern--Commercial transaction between two separate legal entities though belonging to same group--Disallowance not based on valid grounds--To be allowed--Income-tax Act, 1961-- Asst. CIT v. Shriram Transport Finance Co. Ltd. (Chennai) . . . 277
Capital or revenue expenditure --Assessee running tannery business--Assessee to make necessary provisions for disposal of effluents to prevent pollution under Government regulations--Compliance with Pollution Control Board to run unit--Amount paid to agent and other boards for treating effluents--Expenditure on account of business exigency--Revenue expenditure--Income-tax Act, 1961, s. 37-- Asst. CIT v. T. M. Abdul Rahman and Sons (Chennai) . . . 272
----Expenditure on designing charges of telecom equipment--Technical improvement a recurring necessity in the line of manufacturing of telecom equipment--Is revenue expenditure--Income-tax Act, 1961-- Matrix Telecom P. Ltd. v. Asst. CIT (Ahmedabad) . . . 258
Charitable trust --Charitable purpose--Definition--Donation for charitable purposes--Special deduction under section 80G--Approval of institution--Trust for construction and maintenance of Brij Chaurasi Kos Parikrama way and construction and maintenance of dharamshala, tents, etc. for tourists coming to have parikrama--Object of general public utility--No evidence that object was religious--Trust entitled to approval for purposes of section 80G--Income-tax Act, 1961, ss. 2(15), 80G(5)-- Brij Vikas Trust v. CIT (Agra) . . . 310
Income from house property --Deduction--Assessee's father mortgaging property for business purposes--Assessee inheriting property with subsisting mortgage--Assessee offering same property as collateral security and taking loan for investment in shares and in firms--Assessee taking second loan to pay off all previous loans--Original loans taken by father and assessee not for purpose of construction or acquisition of house property--Interest paid on loan--Not deductible--Income-tax Act, 1961, s. 24(1)(vi)-- K. S. Kamalakannan v. Asst. CIT (Chennai) . . . 321
Income-tax --General principles--Rule of consistency-- ITO v. Anjani Synthetics Ltd. (Ahmedabad) . . . 291
Interest on borrowed capital --No nexus between borrowed funds and investments made for non-business purpose--Interest allowed in earlier years--Rule of consistency--Interest to be allowed--Income-tax Act, 1961, s. 36(1)(iii)-- ITO v. Anjani Synthetics Ltd. (Ahmedabad) . . . 291
Non-resident --Agent--French company entering into agreement with Indian company--French company obtaining services of associate company--Employees of associate company working in India--French company cannot be treated as agent of such employees--Income-tax Act, 1961, s. 163-- Pride Foramer S. A. S. v. Asst. CIT (Delhi) . . . 340
Penalty --Concealment of income--Cash credits--Amounts shown as loans assessed as income--Assessee not able to prove genuineness of loans--Imposition of penalty--Valid--Income-tax Act, 1961, s. 271(1)(c)-- STS Chemicals Ltd. v. Asst. CIT (Mumbai) . . . 303
----Concealment of income--Claim to set off carried forward business loss of earlier years of firm in which assessee a partner--Claim untenable and not bona fide--Penalty leviable--Income-tax Act, 1961, s. 271(1)(c)-- Asst. CIT v. Dinesh Goel (Delhi) . . . 330
----Concealment of income--Order of Supreme Court holding interest on price realised from levy sugar payable--Claim to deduction of provision made for interest--No mala fide intention to evade payment of tax--Assessee establishing claim bona fide--Penalty not leviable--Income-tax Act, 1961, s. 271(1)(c)-- Mawana Sugars Ltd. v. Deputy CIT (Delhi) . . . 266
Reassessment --Notice--Reassessment after four years--Assessee disclosing facts truly and fully--Reassessment proceedings after four years on change of opinion--Not valid--Income-tax Act, 1961, ss. 147, 148-- Asst. CIT v. Simpson and Co. Ltd. (Chennai) . . . 283
Revision --Condition precedent--Order of Assessing Officer should be erroneous and prejudicial to Revenue--Assessing Officer allowing deduction after considering facts--Order not erroneous--Order cannot be revised because Commissioner has different opinion--Income-tax Act, 1961, s. 263-- Aditi Developers v. Asst. CIT (Mumbai) . . . 241
Search and seizure --Block assessment--Undisclosed income--Penalty--Assessee filing belated voluntary return after search and offering capital gains--Assessing Officer charging tax at 60 per cent. and imposing penalty--Penalty cannot be imposed--Income-tax Act, 1961, s. 158BFA(2)-- K. Ramakrishnan (HUF) v. Deputy CIT (Chennai) . . . 269
Words and phrases --"Religion","Religious community"-- Brij Vikas Trust v. CIT (Agra) . . . 310
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
S. 2(15) --Charitable trust--Charitable purpose--Definition--Donation for charitable purposes--Special deduction under section 80G--Approval of institution--Trust for construction and maintenance of Brij Chaurasi Kos Parikrama way and construction and maintenance of dharamshala, tents, etc. for tourists coming to have parikrama--Object of general public utility--No evidence that object was religious--Trust entitled to approval for purposes of section 80G-- Brij Vikas Trust v. CIT (Agra) . . . 310
S. 24(1)(vi) --Income from house property--Deduction--Assessee's father mortgaging property for business purposes--Assessee inheriting property with subsisting mortgage--Assessee offering same property as collateral security and taking loan for investment in shares and in firms--Assessee taking second loan to pay off all previous loans--Original loans taken by father and assessee not for purpose of construction or acquisition of house property--Interest paid on loan--Not deductible-- K. S. Kamalakannan v. Asst. CIT (Chennai) . . . 321
S. 28 --Business income--Assessee carrying on business of distribution of computer products--Taking business decision to transfer distribution to another company and earn commission--Memorandum of association of assessee permitting assessee to make arrangement with any company to achieve its objects--Income from commission is business income, not income from other sources-- Deputy CIT v. FX Info Technologies P. Ltd. (Delhi) . . . 250
S. 36(1)(iii) --Interest on borrowed capital--No nexus between borrowed funds and investments made for non-business purpose--Interest allowed in earlier years--Rule of consistency--Interest to be allowed-- ITO v. Anjani Synthetics Ltd. (Ahmedabad) . . . 291
S. 36(1)(vii) --Bad debt--Non-banking financial company--Bona fide writing off of debt in conformity with Reserve Bank directions--To be allowed-- Asst. CIT v. Shriram Transport Finance Co. Ltd. (Chennai) . . . 277
S. 37 --Business expenditure--Provision for warranty made on scientific basis--Allowable-- Asst. CIT v. Simpson and Co. Ltd. (Chennai) . . . 283
----Capital or revenue expenditure--Assessee running tannery business--Assessee to make necessary provisions for disposal of effluents to prevent pollution under Government regulations--Compliance with Pollution Control Board to run unit--Amount paid to agent and other boards for treating effluents--Expenditure on account of business exigency--Revenue expenditure-- Asst. CIT v. T. M. Abdul Rahman and Sons (Chennai) . . . 272
S. 56 --Business income--Assessee carrying on business of distribution of computer products--Taking business decision to transfer distribution to another company and earn commission--Memorandum of association of assessee permitting assessee to make arrangement with any company to achieve its objects--Income from commission is business income, not income from other sources-- Deputy CIT v. FX Info Technologies P. Ltd. (Delhi) . . . 250
S. 80G(5) --Charitable trust--Charitable purpose--Definition--Donation for charitable purposes--Special deduction under section 80G--Approval of institution--Trust for construction and maintenance of Brij Chaurasi Kos Parikrama way and construction and maintenance of dharamshala, tents, etc. for tourists coming to have parikrama--Object of general public utility--No evidence that object was religious--Trust entitled to approval for purposes of section 80G-- Brij Vikas Trust v. CIT (Agra) . . . 310
S. 115JB --Accounting--Rejection of accounts--Book profits--Accrual basis followed under Companies Act and cash basis under Income-tax Act--Rejection of accounts and additions to income--Not justified-- Asst. CIT v. Shriram Transport Finance Co. Ltd. (Chennai) . . . 277
S. 147 --Reassessment--Notice--Reassessment after four years--Assessee disclosing facts truly and fully--Reassessment proceedings after four years on change of opinion--Not valid-- Asst. CIT v. Simpson and Co. Ltd. (Chennai) . . . 283
S. 148 --Reassessment--Notice--Reassessment after four years--Assessee disclosing facts truly and fully--Reassessment proceedings after four years on change of opinion--Not valid-- Asst. CIT v. Simpson and Co. Ltd. (Chennai) . . . 283
S. 158BFA(2) --Search and seizure--Block assessment--Undisclosed income--Penalty--Assessee filing belated voluntary return after search and offering capital gains --Assessing Officer charging tax at 60 per cent. and imposing penalty--Penalty cannot be imposed-- K. Ramakrishnan (HUF) v. Deputy CIT (Chennai) . . . 269
S. 163 --Non-resident--Agent--French company entering into agreement with Indian company--French company obtaining services of associate company--Employees of associate company working in India--French company cannot be treated as agent of such employees-- Pride Foramer S. A. S. v. Asst. CIT (Delhi) . . . 340
S. 263 --Revision--Condition precedent--Order of Assessing Officer should be erroneous and prejudicial to Revenue--Assessing Officer allowing deduction after considering facts--Order not erroneous--Order cannot be revised because Commissioner has different opinion-- Aditi Developers v. Asst. CIT (Mumbai) . . . 241
S. 271(1)(c) --Penalty--Concealment of income--Cash credits--Amounts shown as loans assessed as income--Assessee not able to prove genuineness of loans--Imposition of penalty--Valid-- STS Chemicals Ltd. v. Asst. CIT (Mumbai) . . . 303
----Penalty--Concealment of income--Claim to set off carried forward business loss of earlier years of firm in which assessee a partner--Claim untenable and not bona fide--Penalty leviable-- Asst. CIT v. Dinesh Goel (Delhi) . . . 330
----Penalty--Concealment of income--Order of Supreme Court holding interest on price realised from levy sugar payable--Claim to deduction of provision made for interest--No mala fide intention to evade payment of tax--Assessee establishing claim bona fide--Penalty not leviable-- Mawana Sugars Ltd. v. Deputy CIT (Delhi) . . . 266
CA.RAJU SHAH
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