RENTING - Delhi High Court Judgement [1 Attachment]

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From: Rebecca Andrews <rebecca.andrews88@yahoo.in>
Date: Fri, Sep 23, 2011 at 5:16 PM
Subject: Message from EGroup of SolapurCAs RENTING - Delhi High Court Judgement [1 Attachment]
To:

 

[Attachment(s) from Rebecca Andrews included below]

Delhi High Court goes the way P&H, Orissa, Gauhati, Bombay & Gujarat High Courts. Upholds the constitutionality & retrospectivity of renting as a service effective 1.6.2007. Assessees will now have to pay tax with interest. Excerpts : 75. In view of the aforesaid analysis, we proceed to enumerate our  conclusions in seriatim as follows: (a) The provisions, namely, Section 65(105)(zzzz) and Section 66 of  the Finance Act, 1994 and as amended by the Finance Act, 2010, are intra vires the Constitution of India. (b) The decision rendered in the first Home Solution case does not  lay down the correct law as we have held that there is value  addition when the premises is let out for use in the course of orfurtherance of business or commerce and it is, accordingly  overruled. (c) The challenge to the amendment giving it retrospective effect is  unsustainable and, accordingly, the same stands repelled and the  retrospective amendment is declared as constitutionally valid. 76. Consequently, the writ petitions, being sans substratum, stand  dismissed without any order as to costs. CHIEF JUSTICE A.K. SIKRI, J. SANJIV KHANNA, J. 23.09.11 Kind regards, Rebecca Andrews

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Attachment(s) from Rebecca Andrews

1 of 1 File(s)

DMA23092011CW33982010.pdf

ITR VOL 337 PART 3 ITR (TRIB) VOL 11 PART 5

 

 

INCOME TAX REPORTS (ITR)

Volume 337 : Part 3 (Issue dated 26-9-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Advance tax --Interest payable by assessee--Default in payment of advance tax--Withdrawal of investment allowance--Fiction under section 32A(5) applicable to levy of interest --Income-tax Act, 1961, ss. 32A(5), 234B-- I. C. I. India Ltd . v. CIT (Cal) . . . 327

Assessing Officer --Powers of Assessing Officer--Remand by Commissioner (Appeals) in respect of specific issues--Assessing Officer has no power to consider a new issue--Income-tax Act, 1961, ss. 32A, 43(3), 250-- Deputy CIT (Asstt.) v. Surat Electricity Co. Ltd. (Guj) . . . 271

Bad debt --Condition precedent for allowance--Effect of amendment of section 36 w.e.f. 1-4-1989--Writing off amount is sufficient--Assessee need not prove that debt had been bad--Income-tax Act, 1961, s. 36(1)(vii), (2)(iii)-- Asst. CIT v. Pullen Pump Industries (Guj) . . . 294

Capital gains --Business income--Purchase of shares and sale within a short time--Finding that shares had been purchased as investment--Gains assessable as capital gains--Income-tax Act, 1961, ss. 28, 45-- CIT v. Consolidated Finvest and Holding Ltd . (Delhi) . . . 264

Current repairs --Business expenditure--Meaning of current repairs--Capital or revenue expenditure--Breakdown of machinery after long use--Expenditure on overhauling and reconditioning machinery--Not deductible as current repairs or revenue expenditure--Expenditure on minor repairs of many machines--Deductible--Income-tax Act, 1961, ss. 31, 37-- Bharat Gears Ltd. v. CIT (Delhi) . . . 368

Depreciation --Rate of depreciation--Motor vehicle--Difference between lease and hire--Assessee leasing motor vehicles to clients--Not engaged in business of hire--Not entitled to higher rate of depreciation--Income-tax Act, 1961, s. 32--Income-tax Rules, 1962, Appendix I-- Bhagwati Appliance v. ITO (Guj) . . . 286

Exemption --Difference between sections 10 and 11--Agricultural marketing committee--Law applicable--Effect of insertion of clause (26AAB) in section 10 w.e.f. 1-4-2009--Provision not retrospective--Committee entitled to exemption under section 10(26AAB) from 1-4-2009--Income-tax Act, 1961, ss. 10, 11-- CIT v. Agriculture Market Committee (AP) . . . 299

Interpretation of taxing statutes --Rule against retrospectivity--Declaratory legislation-- CIT v. Agriculture Market Committee (AP) . . . 299

Investment allowance --Withdrawal of allowance--Conditions precedent--Transfer of entire division in slump sale within eight years--No price separately indicated for plant and machinery--Section 32A(5) applicable--Withdrawal of investment allowance--Justified--Income-tax Act, 1961, s. 32A(5)-- I. C. I. India Ltd . v. CIT (Cal) . . . 327

Penalty --Concealment of income--Failure to furnish return of income when amounts to concealment--Effect of Explanation 3 to section 271(1)--Conditions enumerated in the Explanation are cumulative--Notice under section 148 within period stipulated in section 153(1)--Explanation not applicable--Penalty could not be levied--Income-tax Act, 1961, s. 271-- Chhaganlal S Uteriya v. ITO (Guj) . . . 350

Precedent --Effect of decision of Supreme Court in CIT v. Gupta Global Exim P. Ltd. [2008] 305 ITR 132 (SC)-- Bhagwati Appliance v. ITO (Guj) . . . 286

Residence --Requirement of stay in India for specified period in previous year--Effect of Explanation (a) to section 6(1)(c)--Employment includes self-employment--Indian citizen doing business in foreign country and staying in India for one hundred and seventy-seven days in the previous year--To be treated as non-resident--Income-tax Act, 1961, s. 6(1)(c)-- CIT v. O. Abdul Razak (Ker) . . . 267

Revision --Application for revision--Rejection of application without considering merits--Levy of penalty not valid--Rejection of application not justified--Income-tax Act, 1961, s. 264-- Chhaganlal S Uteriya v. ITO (Guj) . . . 350

Search and seizure --Assessment of third person--Condition precedent--Satisfaction of Assessing Officer that undisclosed income found during search belonged to third person--Cash belonging to third person seized from his employee in premises of searched person--No evidence to indicate satisfaction of Assessing Officer that cash seized belonged to third person--Notice under section 158BD to third person--Not valid--Income-tax Act, 1961, s. 158BD-- Chandrakantbhai Amratlal Thakkar v. Deputy CIT (Guj) . . . 258

----Block assessment--Penalty--Scope of section 158BFA--Substantial addition to income returned under section 158BC--Tax not paid--Penalty to be levied--Commissioner allowing payment of tax in instalments--Not relevant--Income-tax Act, 1961, s. 158BFA-- CIT v. Heera Construction Co. P. Ltd. (Ker) . . . 359

AUTHORITY FOR ADVANCE RULINGS

Non-resident --Transfer to non-resident subsidiary of shares in Indian company without consideration--Not taxable in India--Transfer pricing provisions not applicable--No requirement of deduction of tax at source--But liable to file return--Income-tax Act, 1961, ss. 45, 47(iii), 92 to 92F, 139, 195-- Deere and Company, In re. . . 277

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961 :

S. 6(1)(c) --Residence--Requirement of stay in India for specified period in previous year--Effect of Explanation (a) to section 6(1)(c)--Employment includes self-employment--Indian citizen doing business in foreign country and staying in India for one hundred and seventy-seven days in the previous year--To be treated as non-resident-- CIT v. O. Abdul Razak (Ker) . . . 267

S. 10 --Exemption--Difference between sections 10 and 11--Agricultural marketing committee--Law applicable--Effect of insertion of clause (26AAB) in section 10 w.e.f. 1-4-2009--Provision not retrospective--Committee entitled to exemption under section 10(26AAB) from 1-4-2009-- CIT v. Agriculture Market Committee (AP) . . . 299

S. 11 --Exemption--Difference between sections 10 and 11--Agricultural marketing committee--Law applicable--Effect of insertion of clause (26AAB) in section 10 w.e.f. 1-4-2009--Provision not retrospective--Committee entitled to exemption under section 10(26AAB) from 1-4-2009-- CIT v. Agriculture Market Committee (AP) . . . 299

S. 28 --Capital gains--Business income--Purchase of shares and sale within a short time--Finding that shares had been purchased as investment--Gains assessable as capital gains-- CIT v. Consolidated Finvest and Holding Ltd .(Delhi) . . . 264

S. 31 --Current repairs--Business expenditure--Meaning of current repairs--Capital or revenue expenditure--Breakdown of machinery after long use--Expenditure on overhauling and reconditioning machinery--Not deductible as current repairs or revenue expenditure--Expenditure on minor repairs of many machines--Deductible-- Bharat Gears Ltd. v. CIT (Delhi) . . . 368

S. 32 --Depreciation--Rate of depreciation--Motor vehicle--Difference between lease and hire--Assessee leasing motor vehicles to clients--Not engaged in business of hire--Not entitled to higher rate of depreciation-- Bhagwati Appliance v. ITO (Guj) . . . 286

S. 32A --Assessing Officer--Powers of Assessing Officer--Remand by Commissioner (Appeals) in respect of specific issues--Assessing Officer has no power to consider a new issue-- Deputy CIT (Asstt.) v. Surat Electricity Co. Ltd. (Guj) . . . 271

S. 32A(5) --Advance tax--Interest payable by assessee--Default in payment of advance tax--Withdrawal of investment allowance--Fiction under section 32A(5) applicable to levy of interest-- I. C. I. India Ltd . v. CIT (Cal) . . . 327

----Investment allowance--Withdrawal of allowance--Conditions precedent--Transfer of entire division in slump sale within eight years--No price separately indicated for plant and machinery--Section 32A(5) applicable--Withdrawal of investment allowance--Justified-- I. C. I. India Ltd . v. CIT (Cal) . . . 327

S. 36(1)(vii) --Bad debt--Condition precedent for allowance--Effect of amendment of section 36 w.e.f. 1-4-1989--Writing off amount is sufficient--Assessee need not prove that debt had been bad-- Asst. CIT v. Pullen Pump Industries (Guj) . . . 294

S. 36(2)(iii) --Bad debt--Condition precedent for allowance--Effect of amendment of section 36 w.e.f. 1-4-1989--Writing off amount is sufficient--Assessee need not prove that debt had been bad-- Asst. CIT v. Pullen Pump Industries (Guj) . . . 294

S. 37 --Current repairs--Business expenditure--Meaning of current repairs--Capital or revenue expenditure--Breakdown of machinery after long use--Expenditure on overhauling and reconditioning machinery--Not deductible as current repairs or revenue expenditure--Expenditure on minor repairs of many machines--Deductible-- Bharat Gears Ltd. v. CIT (Delhi) . . . 368

S. 43(3) --Assessing Officer--Powers of Assessing Officer--Remand by Commissioner (Appeals) in respect of specific issues--Assessing Officer has no power to consider a new issue-- Deputy CIT (Asstt.) v. Surat Electricity Co. Ltd. (Guj) . . . 271

S. 45 --Capital gains--Business income--Purchase of shares and sale within a short time--Finding that shares had been purchased as investment--Gains assessable as capital gains-- CIT v. Consolidated Finvest and Holding Ltd .(Delhi) . . . 264

----Non-resident--Transfer to non-resident subsidiary of shares in Indian company without consideration--Not taxable in India--Transfer pricing provisions not applicable--No requirement of deduction of tax at source--But liable to file return-- Deere and Company, In re (AAR) . . . 277

S. 47(iii) --Non-resident--Transfer to non-resident subsidiary of shares in Indian company without consideration--Not taxable in India--Transfer pricing provisions not applicable--No requirement of deduction of tax at source--But liable to file return-- Deere and Company, In re (AAR) . . . 277

Ss. 92 to 92F --Non-resident--Transfer to non-resident subsidiary of shares in Indian company without consideration--Not taxable in India--Transfer pricing provisions not applicable--No requirement of deduction of tax at source--But liable to file return-- Deere and Company, In re (AAR) . . . 277

S. 139 --Non-resident--Transfer to non-resident subsidiary of shares in Indian company without consideration--Not taxable in India--Transfer pricing provisions not applicable--No requirement of deduction of tax at source--But liable to file return-- Deere and Company, In re (AAR) . . . 277

S. 158BD --Search and seizure--Assessment of third person--Condition precedent--Satisfaction of Assessing Officer that undisclosed income found during search belonged to third person--Cash belonging to third person seized from his employee in premises of searched person--No evidence to indicate satisfaction of Assessing Officer that cash seized belonged to third person--Notice under section 158BD to third person--Not valid-- Chandrakantbhai Amratlal Thakkar v. Deputy CIT (Guj) . . . 258

S. 158BFA --Search and seizure--Block assessment--Penalty--Scope of section 158BFA--Substantial addition to income returned under section 158BC--Tax not paid--Penalty to be levied--Commissioner allowing payment of tax in instalments--Not relevant-- CIT v. Heera Construction Co. P. Ltd. (Ker) . . . 359

S. 195 --Non-resident--Transfer to non-resident subsidiary of shares in Indian company without consideration--Not taxable in India--Transfer pricing provisions not applicable--No requirement of deduction of tax at source--But liable to file return-- Deere and Company, In re (AAR) . . . 277

S. 234B --Advance tax--Interest payable by assessee--Default in payment of advance tax--Withdrawal of investment allowance--Fiction under section 32A(5) applicable to levy of interest-- I. C. I. India Ltd . v. CIT (Cal) . . . 327

S. 250 --Assessing Officer--Powers of Assessing Officer--Remand by Commissioner (Appeals) in respect of specific issues--Assessing Officer has no power to consider a new issue-- Deputy CIT (Asstt.) v. Surat Electricity Co. Ltd. (Guj) . . . 271

S. 264 --Revision--Application for revision--Rejection of application without considering merits--Levy of penalty not valid--Rejection of application not justified-- Chhaganlal S Uteriya v. ITO (Guj) . . . 350

S. 271 --Penalty--Concealment of income--Failure to furnish return of income when amounts to concealment--Effect of Explanation 3 to section 271(1)--Conditions enumerated in the Explanation are cumulative--Notice under section 148 within period stipulated in section 153(1)--Explanation not applicable--Penalty could not be levied-- Chhaganlal S Uteriya v. ITO (Guj) . . . 350

Income-tax Rules, 1962 :

Appendix I --Depreciation--Rate of depreciation--Motor vehicle--Difference between lease and hire--Assessee leasing motor vehicles to clients--Not engaged in business of hire--Not entitled to higher rate of depreciation-- Bhagwati Appliance v. ITO (Guj) . . . 286

 

 

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

Volume 11 : Part 5 (Issue dated : 26-09-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

 

Charitable purposes --Registration--Society running educational institutions--No proof that funds applied for non-charitable or religious purposes--Direction to grant to retrospective registration--Income-tax Act, 1961, s. 12AA-- Karandhai Tamil Sangam v. CIT (Chennai) . . . 430

Charitable trust --Registration--Denial of registration as activities confined to one religion--Finding that activities not only religious but also charitable--Assessee to be given status of religious and charitable trust--Income-tax Act, 1961, s. 12A-- Kasyapa Veda Research Foundation v. CIT (Cochin) . . . 468

Company --Computation of profits under section 115JB--Provision for bad debts--Amount to be added to book profits--Income-tax Act, 1961, s. 115JB-- Magnum Power Generation Ltd. v . Deputy CIT (Delhi) . . . 493

Income from house property --Business income--Income from property or business income--Assessee constructing residential units and dealing in them--Amount received on lease of some units--Not from business--Income from property--Income-tax Act, 1961, ss. 22, 28-- Roma Builders P. Ltd. v. Joint CIT (Mumbai) . . . 503

Income from undisclosed sources --Survey in premises of assessee--Defects in books of account--No nexus between un-accounted profit earned and investment made in properties outside books of account--Set off allowed--Amounts to reducing additional income declared by assessee--Set off not justified--Income-tax Act, 1961-- V. R. Textiles v. Joint CIT (Ahmedabad) . . . 476

Income-tax survey --Accounting--Rejection of books of account--Defects in books of account--Entire undisclosed sales cannot be treated as profit of assessee--Commissioner (Appeals) applying gross profit rate--Proper--Income-tax Act, 1961, s. 145-- V. R. Textiles v. Joint CIT (Ahmedabad) . . . 476

Industrial undertaking --Generation and supply of power--Amount received from sale of scrap and writing back of credit balances--No finding whether credit balances related to business and whether scrap was generated by industrial undertaking--Matter remanded--Income-tax Act, 1961, s. 80-IA-- Magnum Power Generation Ltd. v. Deputy CIT (Delhi) . . . 493

----Generation and supply of power--Special deduction under section 80-IA--Agreement for supply of power--Agreement providing that if power not required compensation charges to be paid--Amount received for deemed generation of power--Entitled to special deduction under section 80-IA--Income-tax Act, 1961, s. 80-IA-- Magnum Power Generation Ltd. v. Deputy CIT (Delhi) . . . 493

Non-resident --Advance tax--Interest--Not payable where entire income liable to deduction of tax at source--Income-tax Act, 1961, ss. 195, 234B-- Samsung Heavy Industries Co. Ltd. v. Addl. DIT (International Taxation) (Delhi) . . . 513

----Taxability in India--Turnkey project in India--Permanent establishment--Project office in Mumbai involved in activities of project from commencement--Contract indivisible--No material to show project office concerned only with activities outside India--Mode of accounting of expenses of project office not decisive--Mumbai office constituted permanent establishment--Ad hoc attribution of percentage of income to permanent establishment not permissible--Matter remanded for determination on basis of material --Income-tax Act, 1961, s. 144C--Double Taxation Avoidance Agreement between India and Korea, art. 5-- Samsung Heavy Industries Co. Ltd. v. Addl. DIT (International Taxation) (Delhi) . . . 513

Penalty --Concealment of income--Discrepancy in accounts--Amount surrendered because auditors raided and books of account could not be produced--Explanation of assessee reasonable--Penalty cannot be levied--Income-tax Act, 1961, s. 271(1)(c)-- ITO v. Dr. V . Muralikrishnan (Chennai) . . . 443

Perquisites --Employees stock option--Equity warrant certificates--Not by themselves securities but merely granting option to obtain shares--Date of exercise of option is date of acquisition of shares not date of certificate--Warrrant issued in February 1999 and assessee exercising option in April 1999--Perquisites arise and taxable in financial year 1999-2000 relevant to assessment year 2000-01--Income-tax Act, 1961, s. 17(2)(iiia) -- Deputy CIT v. Vijay Gopal Jindal (Delhi) . . . 451

Reassessment --Notice--Notice after four years--Validity--No failure to disclose material facts necessary for assessment--Returns accompanied by audited accounts--Special deduction under section 80HHC allowed after considering material on record--Reassessment proceedings after four years to reduce special deduction--Barred by limitation--Income-tax Act, 1961, ss. 80HHC, 147, 148-- Deputy CIT v. Purolator India Ltd. (Delhi) . . . 434

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Double Taxation Avoidance Agreement between India and Korea :

art. 5 --Non-resident--Taxability in India--Turnkey project in India--Permanent establishment--Project office in Mumbai involved in activities of project from commencement--Contract indivisible--No material to show project office concerned only with activities outside India--Mode of accounting of expenses of project office not decisive--Mumbai office constituted permanent establishment--Ad hoc attribution of percentage of income to permanent establishment not permissible--Matter remanded for determination on basis of material-- Samsung Heavy Industries Co. Ltd. v. Addl. DIT (International Taxation) (Delhi) . . . 513

Income-tax Act, 1961 :

S. 12A --Charitable trust--Registration--Denial of registration as activities confined to one religion--Finding that activities not only religious but also charitable--Assessee to be given status of religious and charitable trust-- Kasyapa Veda Research Foundation v. CIT (Cochin) . . . 468

S. 12AA --Charitable purposes--Registration--Society running educational institutions--No proof that funds applied for non-charitable or religious purposes--Direction to grant to retrospective registration-- Karandhai Tamil Sangam v. CIT (Chennai) . . . 430

S. 17(2)(iiia) --Perquisites--Employees stock option--Equity warrant certificates--Not by themselves securities but merely granting option to obtain shares--Date of exercise of option is date of acquisition of shares not date of certificate--Warrrant issued in February 1999 and assessee exercising option in April 1999--Perquisites arise and taxable in financial year 1999-2000 relevant to assessment year 2000-01-- Deputy CIT v. Vijay Gopal Jindal (Delhi) . . . 451

S. 22 --Income from house property--Business income--Income from property or business income--Assessee constructing residential units and dealing in them--Amount received on lease of some units--Not from business--Income from property-- Roma Builders P. Ltd. v. Joint CIT (Mumbai) . . . 503

S. 28 --Income from house property--Business income--Income from property or business income--Assessee constructing residential units and dealing in them--Amount received on lease of some units--Not from business--Income from property-- Roma Builders P. Ltd. v. Joint CIT (Mumbai) . . . 503

S. 80-IA --Industrial undertaking--Generation and supply of power--Amount received from sale of scrap and writing back of credit balances--No finding whether credit balances related to business and whether scrap was generated by industrial undertaking--Matter remanded-- Magnum Power Generation Ltd. v. Deputy CIT (Delhi) . . . 493

----Industrial undertaking--Generation and supply of power--Special deduction under section 80-IA--Agreement for supply of power--Agreement providing that if power not required compensation charges to be paid--Amount received for deemed generation of power--Entitled to special deduction under section 80-IA-- Magnum Power Generation Ltd. v. Deputy CIT (Delhi) . . . 493

S. 80HHC --Reassessment--Notice--Notice after four years--Validity--No failure to disclose material facts necessary for assessment--Returns accompanied by audited accounts--Special deduction under section 80HHC allowed after considering material on record--Reassessment proceedings after four years to reduce special deduction--Barred by limitation-- Deputy CIT v. Purolator India Ltd. (Delhi) . . . 434

S. 115JB --Company--Computation of profits under section 115JB--Provision for bad debts--Amount to be added to book profits-- Magnum Power Generation Ltd. v. Deputy CIT (Delhi) . . . 493

S. 144C --Non-resident--Taxability in India--Turnkey project in India--Permanent establishment--Project office in Mumbai involved in activities of project from commencement--Contract indivisible--No material to show project office concerned only with activities outside India--Mode of accounting of expenses of project office not decisive--Mumbai office constituted permanent establishment--Ad hoc attribution of percentage of income to permanent establishment not permissible--Matter remanded for determination on basis of material-- Samsung Heavy Industries Co. Ltd. v. Addl. DIT (International Taxation) (Delhi) . . . 513

S. 145 --Income-tax survey--Accounting--Rejection of books of account--Defects in books of account--Entire undisclosed sales cannot be treated as profit of assessee--Commissioner (Appeals) applying gross profit rate--Proper-- V. R. Textiles v. Joint CIT (Ahmedabad) . . . 476

S. 147 --Reassessment--Notice--Notice after four years--Validity--No failure to disclose material facts necessary for assessment--Returns accompanied by audited accounts--Special deduction under section 80HHC allowed after considering material on record--Reassessment proceedings after four years to reduce special deduction--Barred by limitation-- Deputy CIT v. Purolator India Ltd. (Delhi) . . . 434

S. 148 --Reassessment--Notice--Notice after four years--Validity--No failure to disclose material facts necessary for assessment--Returns accompanied by audited accounts--Special deduction under section 80HHC allowed after considering material on record--Reassessment proceedings after four years to reduce special deduction--Barred by limitation-- Deputy CIT v. Purolator India Ltd. (Delhi) . . . 434

S. 195 --Non-resident--Advance tax--Interest--Not payable where entire income liable to deduction of tax at source-- Samsung Heavy Industries Co. Ltd. v. Addl. DIT (International Taxation) (Delhi) . . . 513

S. 234B --Non-resident--Advance tax--Interest--Not payable where entire income liable to deduction of tax at source-- Samsung Heavy Industries Co. Ltd. v. Addl. DIT (International Taxation) (Delhi) . . . 513

S. 271(1)(c) --Penalty--Concealment of income--Discrepancy in accounts--Amount surrendered because auditors raided and books of account could not be produced--Explanation of assessee reasonable--Penalty cannot be levied-- ITO v. Dr. V. Muralikrishnan (Chennai) . . . 443

CA. RAJU SHAH

RBI Circulars

RBI Circulars

Gift in Rupees by Resident Individuals to NRI close relatives

Loans in Rupees by resident individuals to NRI close relatives

Repayment of loans of Non-resident close relatives by residents

Meeting of Medical expenses of NRIs close relatives by Resident Individuals

RBI circulars

RBI notifications

Savings Bank account maintained by residents in India -Joint holder - liberalisation

NRIs/PIOs holding NRE/ FCNR(B) accounts jointly with Indian resident close relative - liberalisation

Foreign Investments in India - Transfer of security by way of gift -Liberalisation

Exchange Earners Foreign Currency (EEFC) Account and Resident Foreign Currency (RFC) account - Joint holder - liberalisation

Credit of sale proceeds of Foreign Direct Investments in India to NRE/FCNR (B) accounts - Clarification

ITR (TRIB) VOL 11 PART 4

Bad debt --Deduction--Condition precedent--Writing off in accounting year--Resolution for writing off in subsequent year not relevant--Amount deductible as bad debt--Income-tax Act, 1961, s. 36-- Sashak Noble Metals Ltd. v. ITO (Mumbai) . . . 335

Business income --Remission or cessation of trading liability--Transfer of loan from sister-concern--No trading transaction--Creditor not acknowledging debt--Amount not assessable under section 41--Outstanding liability due to trading transaction becoming subsequently non-payable--Section 41 applicable--Amount to be added to business income of assessee--Income-tax Act, 1961, s. 41-- Sashak Noble Metals Ltd. v. ITO (Mumbai) . . . 335

Capital gains --Computation--Full value of consideration--Reference to Valuation Officer under section 142A for valuation of market value--Not permissible--No material to show assessee had received any sum in excess of that shown in sale deed--No material to show whether value shown in sale deed was higher or lower than stamp value--Direction to adopt value in accordance with section 50C--Income-tax Act, 1961, ss. 48, 50C, 142A-- Sumit Khurana v. Asst. CIT (Delhi) . . . 377

Charitable purpose --Charitable trust--Exemption--Registration of trust--Authorities to satisfy themselves about genuineness of activities of trust but not nature of activity by which income derived by trust--Trust formed to run hospital earnings from which to be used for charitable purpose--Assessee entitled to registration--Income-tax Act, 1961, ss. 12A, 12AA-- Guru Harkishan Medical Trust v. Director of Income-tax (Exemptions) (Delhi) . . . 361

Co-operative society --Special deduction--Interest received from credit facilities to members--Assessee not a credit society-- Not entitled to deduction--Income-tax Act, 1961, s. 80P(2)(a)(i)-- ITO v. Modern Engineers Construction Co-op. Society (Chennai) . . . 393

Penalty --Concealment of income--Additions made by Assessing Officer on account of disallowance of expenditure--No material to show concealment by assessee--Penalty not imposable--Income-tax Act, 1961, s. 271(1)(c)-- Deputy CIT v. Eagle Iron and Metal Industries Ltd. (Mumbai) . . . 384

----Production of cinematograph films--Statement to be filed in Form 52A--Failure to file by due dates--Explanation that assessee under bona fide belief that form to be filed with return--Commissioner (Appeals) finding reasonable cause for delay and reducing penalty--Order attaining finality--Order of Commissioner (Appeals) confirmed--Income-tax Act, 1961, s. 272A(2)(c)-- Deputy CIT v. Dasari Narayana Rao (Chennai) . . . 403

Search and seizure --Block assessment--Assessment set aside by Tribunal with direction to decide afresh on basis of evidence found during course of search--Commissioner (Appeals) to follow directions issued by Tribunal--Income-tax Act, 1961, ss. 132(4), 158BC-- Krishna Terine P. Ltd. v. Asst. CIT (Ahmedabad) . . . 405

----Block assessment--Income-tax authorities--Jurisdiction--Central Board of Direct Taxes--Powers--Joint Director substituting Deputy Commissioner--Only case of redesignation--Board has power to authorise Deputy Commissioner to carry out necessary searches--No fresh notification required--Income-tax Act, 1961, s. 132--General Clauses Act, 1897, s. 24-- Addl. CIT v. Dr. D. P. Agarwal (Lucknow) . . . 341

----Block assessment--Last warrant of authorisation executed on 7-9-1999--Assessment order passed within limitation--Income-tax Act, 1961, ss. 132, 158BC, 158BE-- Addl. CIT v. Dr. D. P. Agarwal (Lucknow) . . . 341

----Block assessment--Search prior to June 1, 2002--Surcharge in addition to income-tax leviable on undisclosed income--Proviso to section 113 clarificatory--Income-tax Act, 1961, ss. 113, 158BC-- Krishna Terine P. Ltd. v. Asst. CIT (Ahmedabad) . . . 405

----Block assessment--Undisclosed income--Addition on unaccounted investment --No evidence found during search indicating assessee made investments--Addition to be deleted--Income-tax Act, 1961, s. 158BC-- Krishna Terine P. Ltd. v. Asst. CIT (Ahmedabad) . . . 405

----Block assessment--Undisclosed income--Addition on unaccounted receivable and investment in computer--Matter remanded--Income-tax Act, 1961, s. 158BC-- Krishna Terine P. Ltd. v. Asst. CIT (Ahmedabad) . . . 405

Trust --Creation of trust--Committee empowered to create trust to manage affairs of charitable institutions--Delhi Sikh Gurudwaras Act, 1971, s. 24(iv)-- Guru Harkishan Medical Trust v. Director of Income-tax (Exemptions) (Delhi) . . . 361

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Delhi Sikh Gurudwaras Act, 1971 :

S. 24(iv) --Trust--Creation of trust--Committee empowered to create trust to manage affairs of charitable institutions-- Guru Harkishan Medical Trust v. Director of Income-tax (Exemptions) (Delhi) . . . 361

General Clauses Act, 1897 :

S. 24 --Search and seizure--Block assessment--Income-tax authorities--Jurisdiction--Central Board of Direct Taxes--Powers--Joint Director substituting Deputy Commissioner--Only case of redesignation--Board has power to authorise Deputy Commissioner to carry out necessary searches--No fresh notification required-- Addl. CIT v. Dr. D. P. Agarwal (Lucknow) . . . 341

Income-tax Act, 1961 :

S. 12A --Charitable purpose--Charitable trust--Exemption--Registration of trust--Authorities to satisfy themselves about genuineness of activities of trust but not nature of activity by which income derived by trust--Trust formed to run hospital earnings from which to be used for charitable purpose--Assessee entitled to registration-- Guru Harkishan Medical Trust v. Director of Income-tax (Exemptions) (Delhi) . . . 361

S. 12AA --Charitable purpose--Charitable trust--Exemption--Registration of trust--Authorities to satisfy themselves about genuineness of activities of trust but not nature of activity by which income derived by trust--Trust formed to run hospital earnings from which to be used for charitable purpose--Assessee entitled to registration-- Guru Harkishan Medical Trust v. Director of Income-tax (Exemptions) (Delhi) . . . 361

S. 36 --Bad debt--Deduction--Condition precedent--Writing off in accounting year --Resolution for writing off in subsequent year not relevant--Amount deductible as bad debt-- Sashak Noble Metals Ltd. v. ITO (Mumbai) . . . 335

S. 41 --Business income--Remission or cessation of trading liability--Transfer of loan from sister-concern--No trading transaction--Creditor not acknowledging debt--Amount not assessable under section 41--Outstanding liability due to trading transaction becoming subsequently non-payable--Section 41 applicable--Amount to be added to business income of assessee-- Sashak Noble Metals Ltd. v. ITO (Mumbai) . . . 335

S. 48 --Capital gains--Computation--Full value of consideration--Reference to Valuation Officer under section 142A for valuation of market value--Not permissible--No material to show assessee had received any sum in excess of that shown in sale deed--No material to show whether value shown in sale deed was higher or lower than stamp value--Direction to adopt value in accordance with section 50C-- Sumit Khurana v. Asst. CIT (Delhi) . . . 377

S. 50C --Capital gains--Computation--Full value of consideration--Reference to Valuation Officer under section 142A for valuation of market value--Not permissible--No material to show assessee had received any sum in excess of that shown in sale deed --No material to show whether value shown in sale deed was higher or lower than stamp value--Direction to adopt value in accordance with section 50C-- Sumit Khurana v. Asst. CIT (Delhi) . . . 377

S. 80P(2)(a)(i) --Co-operative society--Special deduction--Interest received from credit facilities to members--Assessee not a credit society--Not entitled to deduction-- ITO v. Modern Engineers Construction Co-op. Society (Chennai) . . . 393

S. 113 --Search and seizure--Block assessment--Search prior to June 1, 2002--Surcharge in addition to income-tax leviable on undisclosed income--Proviso to section 113 clarificatory-- Krishna Terine P. Ltd. v. Asst. CIT (Ahmedabad) . . . 405

S. 132 --Search and seizure--Block assessment--Last warrant of authorisation executed on 7-9-1999--Assessment order passed within limitation-- Addl. CIT v. Dr. D. P. Agarwal (Lucknow) . . . 341

S. 132(4) --Search and seizure--Block assessment--Assessment set aside by Tribunal with direction to decide afresh on basis of evidence found during course of search--Commissioner (Appeals) to follow directions issued by Tribunal-- Krishna Terine P. Ltd. v. Asst. CIT (Ahmedabad) . . . 405

S. 142A --Capital gains--Computation--Full value of consideration--Reference to Valuation Officer under section 142A for valuation of market value--Not permissible--No material to show assessee had received any sum in excess of that shown in sale deed--No material to show whether value shown in sale deed was higher or lower than stamp value--Direction to adopt value in accordance with section 50C-- Sumit Khurana v. Asst. CIT (Delhi) . . . 377

S. 158BC --Search and seizure--Block assessment--Assessment set aside by Tribunal with direction to decide afresh on basis of evidence found during course of search--Commissioner (Appeals) to follow directions issued by Tribunal-- Krishna Terine P. Ltd. v. Asst. CIT (Ahmedabad) . . . 405

----Search and seizure--Block assessment--Last warrant of authorisation executed on 7-9-1999--Assessment order passed within limitation-- Addl. CIT v. Dr. D. P. Agarwal (Lucknow) . . . 341

----Search and seizure--Block assessment--Search prior to June 1, 2002--Surcharge in addition to income-tax leviable on undisclosed income--Proviso to section 113 clarificatory-- Krishna Terine P. Ltd. v. Asst. CIT (Ahmedabad) . . . 405

----Search and seizure--Block assessment--Undisclosed income--Addition on unaccounted investment--No evidence found during search indicating assessee made investments--Addition to be deleted-- Krishna Terine P. Ltd. v. Asst. CIT (Ahmedabad) . . . 405

----Search and seizure--Block assessment--Undisclosed income--Addition on unaccounted receivable and investment in computer--Matter remanded-- Krishna Terine P. Ltd. v. Asst. CIT (Ahmedabad) . . . 405

S. 158BE --Search and seizure--Block assessment--Last warrant of authorisation executed on 7-9-1999--Assessment order passed within limitation-- Addl. CIT v. Dr. D. P. Agarwal (Lucknow) . . . 341

S. 271(1)(c) --Penalty--Concealment of income--Additions made by Assessing Officer on account of disallowance of expenditure--No material to show concealment by assessee--Penalty not imposable-- Deputy CIT v. Eagle Iron and Metal Industries Ltd. (Mumbai) . . . 384

S. 272A(2)(c)--Penalty--Production of cinematograph films--Statement to be filed in Form 52A--Failure to file by due dates--Explanation that assessee under bona fide belief that form to be filed with return--Commissioner (Appeals) finding reasonable cause for delay and reducing penalty--Order attaining finality--Order of Commissioner (Appeals) confirmed--Deputy CIT v. Dasari Narayana Rao (Chennai) . . . 403

 

 

CA. RAJU SHAH

Fwd: iT Matter September-2011

---------- Forwarded message ----------
From: <admin@zawarassociate.com>

Dear Sir,

"Have a Great Day"

Please find the "iT Matter September-2011" We look forward to your valuable feedback/suggestion, as it will help us to improve & cover topics desired by you.

Available at this link :

https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=1Qfq57pY2JPQzupZUQ8--xpavDx1ndFYpyBv04d3xReuDMVHs2HhL-GihU5Dz&hl=en

Regard

 

Shri. Rajendra G. Zawar

Fwd: Circular

---------- Forwarded message ----------
From: Mukund Chouhan <mukundchouhan@gmail.com>
Date: Thu, Sep 15, 2011 at 6:08 PMFrom

MUKUND CHOUHAN & Co.

CENVAT Credit (Fourth Amendment) Rules, 2011 - Amendments in Rule 9A, 12 and 17

CENVAT Credit (Fourth Amendment) Rules, 2011 - Amendments in Rule 9A, 12 and 17

[(TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (1) ]

Government of India

Ministry of Finance

Department of Revenue

Notification No. 21/2011-Central Excise (N.T)

New Delhi, the 14th September, 2011

G.S.R ( E ) . – In exercise of the powers conferred by section 37 of the Central Excise Act, 1944 ( 1 of 1944), the Central Government hereby makes the following rules further to amend the Central Excise Rules, 2002, namely :-

1. Short title and commencement.- (1) These rules may be called the Central Excise(Fourth Amendment ) Rules, 2011.

(2) They shall come into force on the 1st day of October, 2011.

2. In the Central Excise Rules, 2002, –

(a) in rule 12, -

(i) in sub-rule (1), the fourth proviso shall be omitted;

(ii) in sub-rule (2), the proviso to clause (a) shall be omitted;

(iii) after sub-rule (4), the following sub-rule shall be inserted, namely :-

"(5) Every assessee other than assessees availing the exemption under notification No. 49/2003-Central Excise, dated the 10th June 2003 or notification No. 50/2003-Central Excise, dated the 10th June 2003, shall file electronically the return or the statement, as the case may be, specified in this rule."

(b) in rule 17,-

(i) in sub-rule (3), after the words "The unit shall," the word "electronically" shall be inserted.

(ii) the proviso to sub-rule (3) shall be omitted.

F.N0. 201/10/2011-CX.6

(V.P.Singh)

Under Secretary to the Government of India

Note: The principal rules were published in the Gazette of India, Extraordinary, Part II , Section 3, sub-section (i), dated 1st March, 2002 vide Notification No. 4/2002-Central Excise (N.T) dated the 1st March, 2002, [GSR 143(E), dated the 1st March, 2002] and were last amended, vide Notification No. 19/2011-Central Excise (N.T) dated 28th July,2011.

______________________________________

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

Notification No. 22 / 2011-Central Excise (N.T.)

New Delhi, the 14th September, 2011

G.S.R. (E).- In exercise of the powers conferred by section 37 of the Central Excise Act, 1944 (1 of 1944) and section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the CENVAT Credit Rules, 2004, namely:-

1. Short title and commencement .- (1) These rules may be called the CENVAT Credit ( Fourth Amendment) Rules, 2011.

(2) They shall come into force on the 1st day of October, 2011.

2. In the CENVAT Credit Rules, 2004,-

(a) in rule 9A, -

(i) in sub-rule (1), the second proviso shall be omitted;

(ii) in sub-rule(3), the proviso shall be omitted;

(iii) after sub-rule (4), the following sub-rule shall be inserted, namely :-

"(5) Every assessee shall file electronically, the declaration or the return, as the case may be, specified in this rule."

[F.No.201/10/2011-CX 6]

(V.P.Singh)

Under Secretary to the Government of India

Note.- The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, sub-section (i) dated the 10th September,2004 vide notification No. 23/2004-Central Excise (N.T.) dated the 10th September 2004, [G.S.R.600(E), dated the 10th September,2004] and last amended by notification No. Notification No.13/2011-Central Excise (N.T.) dated 31st March, 2011.

Limited Liability Partnership (Second Amendment) Rules, 2011 - Notification for making the form 8 into STP mode

Limited Liability Partnership (Second Amendment) Rules, 2011 - Notification for making the form 8 into STP mode

In exercise of the powers conferred by sub-sections (1) and (2) of section 79 of the Limited Liability Partnership Act, 2008 (6 of 2009), the Central Government hereby makes the following rules, further to amend the Limited Liability Partnership Rules, 2009 namely:-

1. Short title and commencement.-

(1) These rules may be called the Limited Liability Partnership (Second Amendment) Rules, 2011.

(2) They shall come into force with effect from the 15-9-2011.

2. In the Limited Liability Partnership Rules, 2009, for Form 8, the following Form shall be substituted, namely

Gift tax , Income of shipping companies , Exemption under s 11

---------- Forwarded message ----------
From: CA Saiprasad Bagrecha <saiprasadbagrecha@gmail.com>
Date: Wed, Sep 14, 2011 at 4:29 PM
Subject: {jalgaoncas} Gift tax , Income of shipping companies , Exemption under s 11
To:

Dear All,

 

Please find enclosed text on above topics.

 

 

http://www.indiantaxhome.com/2011/09/gift-tax_14.html

 

Once, in the income-tax proceedings, it is accepted that the transactions are genuine and bona fide, the additions made in the proceedings under the Gift Tax Act on the ground that the transaction was a colourable device cannot be accepted, as held by MumHC in CGT v Ajay Bajaj — In favour of: The assessee.

 

 

http://www.indiantaxhome.com/2011/09/income-of-shipping-companies_14.html

 

 

Tonnage income from the business of operating qualifying ships — Receipts emanating from the activities, which do not have a direct and necessary nexus with the shipping/dredging activities of the assessee-company, cannot be exempted under the tonnage tax scheme, as held by VisakhapatnamTrib in Dredging Corpn of India Ltd v ACIT — In favour of: The revenue (partly).

 

 

http://www.indiantaxhome.com/2011/09/exemption-under-s-11.html

 

 

The generation of surplus out of the fees collected would not indicate a profit motive and the activity of the assessee cannot be said to be tainted with an element of commerciality to disentitle the trust from claiming the exemption under s 11, as held by CuttackTrib in ITO v Human Resource Development and Management Trust (ASBM Trust) — In favour of: The assessee.

--

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

ITR VOL 337 PART 2

 

INCOME TAX REPORTS (ITR)

Volume 337 : Part 2 (Issue dated 19-9-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Capital gains or business income --Consideration received on transfer of rights of trade mark, brands, copyrights in journals and publications--Business given up distinct from business continued--Consideration not arising out of business but is long-term capital gains--Section 28(va) does not apply--Income-tax Act, 1961, s. 28(va)-- CIT v. Mediworld Publications Pvt. Ltd. (Delhi) . . . 178

Income from other sources --Compulsory acquisition of agricultural land--Enhanced compensation--Interest on delayed payment--Claim to spread over on accrual basis but interest for two years alone disclosed--Inference of cash system of accounting--Interest taxable in year of receipt--Land Acquisition Act, 1894, s. 34--Income-tax Act, 1961, s. 145-- CIT v. Karambir Singh (P&H) . . . 159

Income from undisclosed sources --Assessee failing to prove capacity of creditor and genuineness of transaction--Finding that transaction bogus and sustaining addition--Disallowance of excess claim on account of loss of bardana--Findings of fact--Income-tax Act, 1961-- Papneja Traders v. CIT (P&H) . . . 172

Offences and prosecution --Compounding of offences--Guidelines issued by CBDT--Compounding permissible for technical offences--Compounding not possible after filing of complaint--Income-tax Act, 1961, s. 276B-- Anil Batra v. Chief CIT (Delhi) . . . 251

Penalty --Concealment of income--Search and seizure--Assessee making disclosure statement under section 132(4)--Time for filing return not expired--Income included in return and tax paid--Not a case of concealment of particulars of income--Penalty cannot be imposed--Income-tax Act, 1961, s. 271(1)(c), Expln. 5-- CIT v. Bhandari Silk Store (P&H) . . . 153

Reassessment --Notice after four years--No failure to disclose material facts necessary for assessment--Deduction allowed in original assessment after considering facts--Reassessment proceedings after four years to disallow deduction on ground it was capital expenditure--Not valid--Income-tax Act, 1961, ss. 147, 148-- Parle Sales and Services P. Ltd. v. ITO (Guj) . . . 203

Search and seizure --Block assessment--Assessment of third person--Condition precedent--Satisfaction of Assessing Officer of person searched that undisclosed income discovered during search belonged to third person--Meaning of satisfaction--Letter by Assessing Officer of person searched that assessee acted as mediator in bogus accommodation transactions--No evidence that assessee had given cash to person searched or had received commission--Condition not fulfilled--Block assessment of assessee--Not valid--Income-tax Act, 1961, ss. 158B, 158BD-- CIT v. Radhey Shyam Bansal (Delhi) . . . 217

----Block assessment--Undisclosed income--Addition permissible only in respect of material discovered during search--Estimate of expenditure on house by Valuation Officer--No material recovered in search showing expenditure beyond that recorded in books--Addition solely on basis of estimate--Not valid--Income-tax Act, 1961, s. 158BD-- CIT v. Kantilal B. Kansara (HUF) (Guj) . . . 187

----Block assessment--Undisclosed income--Statement under section 132(4)--Admissibility--Addition based on confessional statement made by assessee and counter-signature by his sons--Failure by assessee to prove that confession was as a result of intimidation, duress and coercion--No evidence that confession made as a result of mistaken belief of law or facts--Addition justified--Income-tax Act, 1961, s. 132(4)-- Asst. CIT v. Hukum Chand Jain (Chhattisgarh) . . . 238

AUTHORITY FOR ADVANCE RULINGS

Non-resident --Prospecting for or extraction of mineral oils--Services in connection therewith--Special provisions for computation of income--Tax resident of Norway providing sea logistics services for ONGC--Not technical services but transportation--Fall within purview of special provisions--But under DTAA notional income restricted to 7.5 per cent. of receipts and tax limited to 50 per cent. of tax imposed by India--No deduction for service tax--Income-tax Act, 1961, ss. 9(1)(vii), 44BB--Finance Act, 1994, s. 68--Double Taxation Avoidance Agreement between India and Norway, art. 23(4)-- Siem Offshore Inc ., In re . . . 207

----Rate of tax--Prospecting for, or extraction or production of, mineral oils--Service of conducting seismic surveys and providing onshore seismic data acquisition and other associated services--Taxable under special provision--Entire receipts subject to deeming provision--Income cannot be split--Income-tax Act, 1961, s. 44BB-- Bergen Oilfield Services AS, Norway , In re . . . 167

----Taxability in India--Deduction of tax at source--Employees of non-resident company deputed to Indian subsidiary for performing managerial functions--Salary and benefits paid to expatriate employees by non-resident employer and reimbursed by Indian company--Are fees for included services accruing to non-resident company--Requirement of "making available" technical know-how not applicable--Tax deductible at source--Income-tax Act, 1961, ss. 9(1)(vii), Expln. 2, 195--Double Taxation Avoidance Agreement between India and the U.S.A., art. 12(4)(b)-- Verizon Data Services India Private Ltd ., In re . . . 192

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Double Taxation Avoidance Agreement between India and Norway :

Art. 23(4) --Non-resident--Prospecting for or extraction of mineral oils--Services in connection therewith--Special provisions for computation of income--Tax resident of Norway providing sea logistics services for ONGC--Not technical services but transportation--Fall within purview of special provisions--But under DTAA notional income restricted to 7.5 per cent. of receipts and tax limited to 50 per cent. of tax imposed by India--No deduction for service tax-- Siem Offshore Inc ., In re (AAR) . . . 207

Double Taxation Avoidance Agreement between India and the U.S.A. :

Art. 12(4)(b) --Non-resident--Taxability in India--Deduction of tax at source--Employees of non-resident company deputed to Indian subsidiary for performing managerial functions--Salary and benefits paid to expatriate employees by non-resident employer and reimbursed by Indian company--Are fees for included services accruing to non-resident company--Requirement of "making available" technical know-how not applicable--Tax deductible at source-- Verizon Data Services India Private Ltd ., In re (AAR) . . . 192

Finance Act, 1994 :

S. 68 --Non-resident--Prospecting for or extraction of mineral oils--Services in connection therewith--Special provisions for computation of income--Tax resident of Norway providing sea logistics services for ONGC--Not technical services but transportation--Fall within purview of special provisions--But under DTAA notional income restricted to 7.5 per cent. of receipts and tax limited to 50 per cent. of tax imposed by India--No deduction for service tax-- Siem Offshore Inc ., In re (AAR) . . . 207

Income-tax Act, 1961 :

S. 9(1)(vii) --Non-resident--Prospecting for or extraction of mineral oils--Services in connection therewith--Special provisions for computation of income--Tax resident of Norway providing sea logistics services for ONGC--Not technical services but transportation--Fall within purview of special provisions--But under DTAA notional income restricted to 7.5 per cent. of receipts and tax limited to 50 per cent. of tax imposed by India--No deduction for service tax-- Siem Offshore Inc ., In re(AAR) . . . 207

S. 9(1)(vii), Expln. 2 --Non-resident--Taxability in India--Deduction of tax at source--Employees of non-resident company deputed to Indian subsidiary for performing managerial functions--Salary and benefits paid to expatriate employees by non-resident employer and reimbursed by Indian company--Are fees for included services accruing to non-resident company--Requirement of "making available" technical know-how not applicable--Tax deductible at source-- Verizon Data Services India Private Ltd ., In re (AAR) . . . 192

S. 28(va) --Capital gains or business income--Consideration received on transfer of rights of trade mark, brands, copyrights in journals and publications--Business given up distinct from business continued--Consideration not arising out of business but is long-term capital gains--Section 28(va) does not apply-- CIT v. Mediworld Publications Pvt. Ltd. (Delhi) . . . 178

S. 44BB --Non-resident--Prospecting for or extraction of mineral oils--Services in connection therewith--Special provisions for computation of income--Tax resident of Norway providing sea logistics services for ONGC--Not technical services but transportation--Fall within purview of special provisions--But under DTAA notional income restricted to 7.5 per cent. of receipts and tax limited to 50 per cent. of tax imposed by India--No deduction for service tax-- Siem Offshore Inc ., In re(AAR) . . . 207

----Non-resident--Rate of tax--Prospecting for, or extraction or production of, mineral oils--Service of conducting seismic surveys and providing onshore seismic data acquisition and other associated services--Taxable under special provision--Entire receipts subject to deeming provision--Income cannot be split-- Bergen Oilfield Services AS, Norway , In re (AAR) . . . 167

S. 132(4) --Search and seizure--Block assessment--Undisclosed income--Statement under section 132(4)--Admissibility--Addition based on confessional statement made by assessee and counter-signature by his sons--Failure by assessee to prove that confession was as a result of intimidation, duress and coercion--No evidence that confession made as a result of mistaken belief of law or facts--Addition justified-- Asst. CIT v. Hukum Chand Jain (Chhattisgarh) . . . 238

S. 145 --Income from other sources--Compulsory acquisition of agricultural land--Enhanced compensation--Interest on delayed payment--Claim to spread over on accrual basis but interest for two years alone disclosed--Inference of cash system of accounting--Interest taxable in year of receipt-- CIT v. Karambir Singh (P&H) . . . 159

S. 147 --Reassessment--Notice after four years--No failure to disclose material facts necessary for assessment--Deduction allowed in original assessment after considering facts--Reassessment proceedings after four years to disallow deduction on ground it was capital expenditure--Not valid-- Parle Sales and Services P. Ltd. v. ITO (Guj) . . . 203

S. 148 --Reassessment--Notice after four years--No failure to disclose material facts necessary for assessment--Deduction allowed in original assessment after considering facts--Reassessment proceedings after four years to disallow deduction on ground it was capital expenditure--Not valid-- Parle Sales and Services P. Ltd. v. ITO (Guj) . . . 203

S. 158B --Search and seizure--Block assessment--Assessment of third person--Condition precedent--Satisfaction of Assessing Officer of person searched that undisclosed income discovered during search belonged to third person--Meaning of satisfaction--Letter by Assessing Officer of person searched that assessee acted as mediator in bogus accommodation transactions--No evidence that assessee had given cash to person searched or had received commission--Condition not fulfilled--Block assessment of assessee--Not valid-- CIT v. Radhey Shyam Bansal (Delhi) . . . 217

S. 158BD --Search and seizure--Block assessment--Assessment of third person--Condition precedent--Satisfaction of Assessing Officer of person searched that undisclosed income discovered during search belonged to third person--Meaning of satisfaction--Letter by Assessing Officer of person searched that assessee acted as mediator in bogus accommodation transactions--No evidence that assessee had given cash to person searched or had received commission--Condition not fulfilled--Block assessment of assessee--Not valid-- CIT v. Radhey Shyam Bansal (Delhi) . . . 217

----Search and seizure--Block assessment--Undisclosed income--Addition permissible only in respect of material discovered during search--Estimate of expenditure on house by Valuation Officer--No material recovered in search showing expenditure beyond that recorded in books--Addition solely on basis of estimate--Not valid-- CIT v. Kantilal B. Kansara (HUF) (Guj) . . . 187

S. 195 --Non-resident--Taxability in India--Deduction of tax at source--Employees of non-resident company deputed to Indian subsidiary for performing managerial functions--Salary and benefits paid to expatriate employees by non-resident employer and reimbursed by Indian company--Are fees for included services accruing to non-resident company--Requirement of "making available" technical know-how not applicable--Tax deductible at source-- Verizon Data Services India Private Ltd ., In re (AAR) . . . 192

S. 271(1)(c), Expln. 5 --Penalty--Concealment of income--Search and seizure--Assessee making disclosure statement under section 132(4)--Time for filing return not expired--Income included in return and tax paid--Not a case of concealment of particulars of income--Penalty cannot be imposed-- CIT v. Bhandari Silk Store (P&H) . . . 153

S. 276B --Offences and prosecution--Compounding of offences--Guidelines issued by CBDT--Compounding permissible for technical offences--Compounding not possible after filing of complaint-- Anil Batra v. Chief CIT (Delhi) . . . 251

Land Acquisition Act, 1894 :

S. 34 --Income from other sources--Compulsory acquisition of agricultural land--Enhanced compensation--Interest on delayed payment--Claim to spread over on accrual basis but interest for two years alone disclosed--Inference of cash system of accounting--Interest taxable in year of receipt-- CIT v. Karambir Singh (P&H) . . . 159

 

CA.RAJU SHAH