New PAN application with instruction w.e.f. 01-11-2011 with excel utility from taxguru.in

 

[Attachment(s) from GIRISH KULKARNI included below]

Income Tax department has notified new PAN application form. New form is applicable from 01.11.2011. Now there will two set of Form.

1. First is Form 49A to be used by Indian Citizen ,HUF,Companies ,firm, AOP, BOI, LLP ,Trusts registered in India 
2. Second 49AA is to be used by person not a Indian Citizen and Companies,Firms,LLP,BOI,AOP,trust  not registered in India 

Further a New reason to obtain the Pan form has been added ie  in the case of a person who is entitled to receive any sum or income or amount , on which tax is deductible under Chapter XVII-B in any financial year, before the end of such financial year."

There is no more significant changes in new forms except few minor changes.

1. download Pan Application form
2. Instruction.
3. Notification. 
4. Download pan application Instruction notification (all three above)

INSTRUCTIONS FOR FILLING FORM 49A

1. Form to be filled legibly in BLOCK LETTERS and preferably in BLACK INK.
2. Each box, wherever provided, should contain only one character (alphabet /number /punctuation sign) leaving a blank box after each word.
3. Individual' applicants should affix two recent colour photographs (size 3.5 cm x 2.5 cm) in the space provided on the form. The photographs should not be stapled or clipped to the form.The clarity of image on PAN card will depend on the quality and clarity of photograph affixed on the form.
4. Signature / Left hand thumb impression should be provided across the photo affixed on the left side of the form.
5. Signature /Left hand thumb impression should be within the box provided on the right side of the form. The signature should not be on the photograph affixed on right side of the form. If there is any mark on this photograph such that it hinders the clear visibility of the face of the applicant, the application will not be accepted. 
6. Thumb impression, if used, should be attested by a Magistrate or a Notary Public or a Gazetted Officer under official seal and stamp. 
7. AO code (Area Code, AO Type, Range Code and AO Number) must be filled up by the applicant. These details can be obtained from the Income Tax Office or TIN Facilitation Centre (TIN‐FC) may assist in doing so. 
8. Applicant can also search for AO details on www.tin‐nsdl.com

GENERAL INFORMATION FOR PAN APPLICANTS

1. Applicants may obtain the application form for PAN (Form 49A) from TIN‐Facilitation Centres (TIN‐FCs) / PAN Centres, any other stationery vendor providing such forms or download from the TIN website (www.tin‐nsdl.com).
2. The fee for processing PAN application is Rs. 85/‐ (plus service tax, as applicable). 
3. Those already allotted a ten digit alphanumeric PAN shall not apply again as having or using more than one PAN is illegal. However, request for a new PAN card with the same PAN or/and Changes or Correction in PAN data can be made by filling up 'Request for New PAN Card or/and Changes or Correction in PAN Data' form available from any source mentioned in (a) above. The cost of application and processing fee is same as in the case of Form 49A.
4. Applicant will receive an acknowledgment containing a 15–digit unique number on acceptance of this form. This acknowledgment number can be used for tracking the status of the application.
5.  For more information / Application status enquiry – Visit us at www.tin‐nsdl.com – Call TIN Call Centre at 020‐27218080 – e‐mail us at tininfo@nsdl.co.in – 
6. SMS NSDLPANAcknowledgement No. & send to 57575 to obtain application status.
7. Write to: INCOME TAX PAN SERVICES UNIT (Managed by National Securities Depository Limited), 3rd Floor, Sapphire Chambers, Near Baner Telephone Exchange,Baner, Pune ‐ 411 045.

INSTRUCTIONS FOR FILLING FORM 49AA (To be used by QFIs only)
(a) Form to be filled legibly in BLOCK LETTERS and preferably in BLACK INK.
(b) Each box, wherever provided, should contain only one character (alphabet /number /punctuation sign) leaving a blank box after each word.
(c) 'Individual' applicants should affix two recent colour photographs (size 3.5 cm x 2.5 cm) in the space provided on the form. The photographs should not be stapled or clipped to the form.The clarity of image on PAN card will depend on the quality and clarity of photograph affixed on the form.
(d) Signature /Left hand thumb impression should be provided across the photo affixed on the left side of the form. 
(e) Signature /Left hand thumb impression should be within the box provided on the right side of the form. The signature should not be on the photograph affixed on right side of the form. If there is any mark on this Photograph such that it hinders the clear visibility of the face of the
applicant, the application will not be accepted.
(f) Thumb impression, if used, should be attested by a Magistrate or a Notary Public or a
Gazetted Officer under official seal and stamp.
(g) AO code (Area Code, AO Type, Range Code and AO Number) must be filled up by the
applicant. These details can be obtained from the Income Tax Office or TIN Facilitation Centre
(TIN‐FC) may assist in doing so.

Read more: NEW PAN APPLICATION FORM 49A AND 49AA WEF 01.11.11 | Income Tax India http://www.itaxindia.org/2011/10/new-pan-application-form-49a-and-49aa.html#ixzz1cHC8P2xj

High Lights in Instructions or in New Forms

1. Form to be filled in Black Ink preferably earlier it was mandatory. 
2. Now Two recent colour photographs will be affixed instead of One pcs.
3. Signature/Left Hand thumb impression should be provided across the photo affixed on the left side of the form.
4. Signature /Left hand thumb impression should be within the box provided on the right side of the form.  The signature should not be on the photograph affixed on right side of the form.   
5. Abbreviation will not be used in First Name and Last Name.
6. The full name as mentioned in the application will be printed on the PAN Card.
7. Now, Trusts for Date of Creation of Trust Deed. also added in the field of Date of Birth/Incorporation/Agreement/Partnership or trust Deed/Formation of Body of Individuals/Association of Perons. 
8. ZIPCODE.   In case, a foreign address is provided then it is mandatory to provide Country Name alongwith ZIPCODE.
9. Office address is required in case of Individuals having source of Income as salary [Item No.12].
10. Name of Office and Address is mandatory in case of Firm,company, local Authority and Trusts. 
11. Now Country Code is also required alongwith STD Code.  (i.e. 91 is Country Code for India.). 
12. Telephone Number/Mobile Number is required. Earlier only Telephone Number was required.
13. Application Status updates are sent using the SMS facility on the Mobile Numbers mentioned in the Application Form. 
14. In case of 'Limited Liability Partnership', the PAN will be allotted in "Partnership Firm" status. 
15. It will be mandatory to indicate at least one of source of incomes, as mentioned in the form.  In case, the income from Business/Profession is selected by the applicant then an appropriate business profession code should be mentioned.  (i.e.  Code = 01, Business/Profession = Medical Profession and Business)
16. Name and Address of Representative :- Column No. 1 to 12 will contain details of assessee on whose behalf this application is submitted. 
17. KYC Details:- It is mandatory to provide KYC details.   Please refer the guideliness issued by SEBI and Prevention of Money Laundering Act for filling these details. 

Read more: New Notification for PAN Application (Form 49A and Form 49AA) ~ Tds Tax India http://www.tdstaxindia.com/2011/10/new-notification-for-pan-application.html#ixzz1cHCYqaxt 

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ITR (TRIB) VOL 12 PART 1

 

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

Volume 12 : Part 1 (Issue dated : 31-10-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Business expenditure --Disallowance on account of excessive consumption of raw material and other direct expenses disproportionate to production as compared to earlier years--Discontinuance of manufacturing activity and stocks held at end of year sold over succeeding years--Addition to be deleted--Income-tax Act, 1961-- Lakshmi Udyog Mandir P. Ltd. v. Deputy CIT (Chandigarh) . . . 36

Business income --Overdue interest from customers and interest on staff loans--Only net amount of interest income having nexus with interest bearing fund to be excluded--Matter remanded--Income-tax Act, 1961-- Purolator India Ltd. v. Deputy CIT (Delhi) . . . 46

Charitable trust --Registration--Cancellation of registration--Assessee engaging manufacturing and trading activities--Assessee converting incidental objects as main objects--Assessee not satisfying first condition of section 11(4A)--Cancellation of registration valid--Income-tax Act, 1961, ss. 11(4A), 12A-- Aurolab Trust v. CIT (Chennai) . . . 74

Export --Special deduction--Computation--Interest on fixed deposits for availing of credit facilities from bank--No immediate nexus with export business--To be treated as income from other sources--Income-tax Act, 1961, s. 80HHC-- Purolator India Ltd. v. Deputy CIT (Delhi) . . . 46

----Special deduction--Computation--Profits on transfer of DEPB credits--Not profits of business includible in computing deduction under section 80HHC--Income-tax Act, 1961, ss. 28(iiib), 80HHC-- Purolator India Ltd. v. Deputy CIT (Delhi) . . . 46

Industrial undertaking --Special deduction--Condition precedent for deduction--Profits must be derived from industrial undertaking--"Derived from", meaning of--Repairs and maintenance not manufacturing activity--Profits therefrom not eligible for deduction--Income-tax Act, 1961, s. 80-IB-- Deputy CIT v. Rajesh Kr. Drolia [SB] (Kolkata) . . . 1

Non-resident --Fees for technical services--Assessee stated to be leader of consortium but co-operation agreement specifying share of assessee at only 3 per cent. of total consideration--Activities entailing rendering technical service only--Department accepting receipt of consideration at 3 per cent.--Bound to accept scope of activities outlined in co-operation agreement --Receipts taxable at 10 per cent. as fees for technical services, not as business profits--Permanent establishment of assessee in relation to another project not connected to income in question--Income-tax Act, 1961, ss. 9(1)(vii), Expln. 2, 44DA, 115A(1)(b), (BB), 144C(1)--Double Taxation Avoidance Agreement between India and Russia, arts. 5, 7-- Joint Stock Company Zangas v. Addl. Director of Income-tax (International Taxation) (Ahmedabad) . . . 57

Penalty --Failure to deduct tax at source--Interest--Assessee disclosing payment of interest in return--No concealment of facts--Recipients showing receipt of interest in their returns and paying tax thereon within time prescribed--No loss to Government--Penalty cannot be levied--Income-tax Act, 1961, s. 271C-- Muthoot Bankers v. Joint CIT (Cochin) . . . 40

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Double Taxation Avoidance Agreement between India and Russia :

Art. 5 --Non-resident--Fees for technical services--Assessee stated to be leader of consortium but co-operation agreement specifying share of assessee at only 3 per cent. of total consideration--Activities entailing rendering technical service only--Department accepting receipt of consideration at 3 per cent.--Bound to accept scope of activities outlined in co-operation agreement--Receipts taxable at 10 per cent. as fees for technical services, not as business profits--Permanent establishment of assessee in relation to another project not connected to income in question-- Joint Stock Company Zangas v. Addl. Director of Income-tax (International Taxation) (Ahmedabad) . . . 57

Art. 7 --Non-resident--Fees for technical services--Assessee stated to be leader of consortium but co-operation agreement specifying share of assessee at only 3 per cent. of total consideration--Activities entailing rendering technical service only--Department accepting receipt of consideration at 3 per cent.--Bound to accept scope of activities outlined in co-operation agreement --Receipts taxable at 10 per cent. as fees for technical services, not as business profits--Permanent establishment of assessee in relation to another project not connected to income in question-- Joint Stock Company Zangas v. Addl. Director of Income-tax (International Taxation) (Ahmedabad) . . . 57

Income-tax Act, 1961 :

S. 9(1)(vii), Expln. 2 --Non-resident--Fees for technical services--Assessee stated to be leader of consortium but co-operation agreement specifying share of assessee at only 3 per cent. of total consideration--Activities entailing rendering technical service only--Department accepting receipt of consideration at 3 per cent.--Bound to accept scope of activities outlined in co-operation agreement --Receipts taxable at 10 per cent. as fees for technical services, not as business profits--Permanent establishment of assessee in relation to another project not connected to income in question-- Joint Stock Company Zangas v. Addl. Director of Income-tax (International Taxation) (Ahmedabad) . . . 57

S. 11(4A) --Charitable trust--Registration--Cancellation of registration--Assessee engaging manufacturing and trading activities--Assessee converting incidental objects as main objects--Assessee not satisfying first condition of section 11(4A)--Cancellation of registration valid-- Aurolab Trust v. CIT (Chennai) . . . 74

S. 12A --Charitable trust--Registration--Cancellation of registration--Assessee engaging manufacturing and trading activities--Assessee converting incidental objects as main objects--Assessee not satisfying first condition of section 11(4A)--Cancellation of registration valid-- Aurolab Trust v. CIT (Chennai) . . . 74

S. 28(iiib) --Export--Special deduction--Computation--Profits on transfer of DEPB credits--Not profits of business includible in computing deduction under section 80HHC-- Purolator India Ltd. v. Deputy CIT (Delhi) . . . 46

S. 44DA-- Non-resident--Fees for technical services--Assessee stated to be leader of consortium but co-operation agreement specifying share of assessee at only 3 per cent. of total consideration--Activities entailing rendering technical service only--Department accepting receipt of consideration at 3 per cent.--Bound to accept scope of activities outlined in co-operation agreement--Receipts taxable at 10 per cent. as fees for technical services, not as business profits--Permanent establishment of assessee in relation to another project not connected to income in question-- Joint Stock Company Zangas v. Addl. Director of Income-tax (International Taxation) (Ahmedabad) . . . 57

S. 80-IB --Industrial undertaking--Special deduction--Condition precedent for deduction--Profits must be derived from industrial undertaking--"Derived from", meaning of--Repairs and maintenance not manufacturing activity--Profits therefrom not eligible for deduction-- Deputy CIT v. Rajesh Kr. Drolia [SB] (Kolkata) . . . 1

S. 80HHC --Export--Special deduction--Computation--Interest on fixed deposits for availing of credit facilities from bank--No immediate nexus with export business--To be treated as income from other sources-- Purolator India Ltd. v. Deputy CIT (Delhi) . . . 46

----Export--Special deduction--Computation--Profits on transfer of DEPB credits--Not profits of business includible in computing deduction under section 80HHC-- Purolator India Ltd. v. Deputy CIT (Delhi) . . . 46

S. 115A(1)(b)(BB) --Non-resident--Fees for technical services--Assessee stated to be leader of consortium but co-operation agreement specifying share of assessee at only 3 per cent. of total consideration--Activities entailing rendering technical service only--Department accepting receipt of consideration at 3 per cent.--Bound to accept scope of activities outlined in co-operation agreement --Receipts taxable at 10 per cent. as fees for technical services, not as business profits--Permanent establishment of assessee in relation to another project not connected to income in question-- Joint Stock Company Zangas v. Addl. Director of Income-tax (International Taxation) (Ahmedabad) . . . 57

S. 144C(1) --Non-resident--Fees for technical services--Assessee stated to be leader of consortium but co-operation agreement specifying share of assessee at only 3 per cent. of total consideration--Activities entailing rendering technical service only--Department accepting receipt of consideration at 3 per cent.--Bound to accept scope of activities outlined in co-operation agreement --Receipts taxable at 10 per cent. as fees for technical services, not as business profits--Permanent establishment of assessee in relation to another project not connected to income in question-- Joint Stock Company Zangas v. Addl. Director of Income-tax (International Taxation) (Ahmedabad) . . . 57

S. 271C --Penalty--Failure to deduct tax at source--Interest--Assessee disclosing payment of interest in return--No concealment of facts--Recipients showing receipt of interest in their returns and paying tax thereon within time prescribed--No loss to Government--Penalty cannot be levied-- Muthoot Bankers v. Joint CIT (Cochin) . . . 40

 

CA. RAJU SHAH

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ITR VOL 338 PART 2

 

INCOME TAX REPORTS (ITR)

Volume 338 : Part 2 (Issue dated 24-10-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Accounting --Rejection of accounts--Hybrid system--Assessee publishing magazines showing receipts from subscriptions and advertisements on cash basis and income from sales of magazines on accrual basis--System accepted by Revenue--Change in accounting system to comply with provisions of company law--Not relevant--Assessee could continue hybrid system for income-tax purposes--Income-tax Act, 1961, s. 145-- Cyber Media (India) Ltd. v. CIT (Delhi) . . . 177

Appeal to Appellate Tribunal --Competency of appeal--CBDT Circular/Instruction prescribing monetary limits for appeals--Clarification allowing clubbing of tax arrears in common order--Tax arrears after clubbing above monetary value--Appeals maintainable--CBDT Instruction No. 1979, dated 27-3-2000 and clarification dated 29-6-2000--Income-tax Act, 1961-- CIT v. Eapen Nainan (Mad) . . . 263

Business expenditure --Disallowance--Excessive or unreasonable payments--Raw materials supplied to subsidiary company by holding company, a non-resident--Assessee furnishing proof that payment was reasonable--No material to show that payment was excessive--No part of payment could be disallowed--Income-tax Act, 1961, s. 40A(2)(b) -- CIT v. Samsung India Electronics Ltd. (Delhi) . . . 186

Depreciation --Higher rate of depreciation--Equipment purchased and leased back to vendor--No evidence that transaction a colourable device--Assessee entitled to depreciation on equipment--Income-tax Act, 1961, s. 32-- CIT v. Cosmo Films Ltd . (Delhi) . . . 266

Exemption --Hospital--Application under section 10(23C)(via) filed beyond time--Accounts not maintained properly--No evidence regarding activities--Registration under section 80G and exemption under section 12A in prior years not conclusive--Rejection of application--Justified--Income-tax Act, 1961, s. 10(23C)(via)-- All India J. D. Educational Society v. Director General of Income-tax (Exemptions)  (Delhi) . . . 218

----Local authority--Criteria for local authority--U. P. Jal Nigam constituted under Water Supply and Sewerage Act, 1975--Local authority--Income-tax Act, 1961, s. 10(20)--General Clauses Act, 1897, s. 3-- U. P. Jal Nigam v. CIT  (All) . . . 248

Export --Tea--Blending of tea--Amounts to processing--Export of blended tea--Assessee entitled to special deduction under section 80HHC--Income-tax Act, 1961, s. 80HHC-- Stewart Holl (India) Ltd. v. CIT (Cal) . . . 194

Insurance business --Computation of income--Provision for solvency margin--Deductible--Loss in Jeevan Suraksha Fund to be taken into account--Income-tax Act, 1961, s. 44, Sch. I, r. 2-- CIT v. Life Insurance Corporation of India Ltd .  (Bom) . . . 212

Loss --Business loss--Loss due to theft--No evidence that theft had not occurred--Inability of police to recover articles--Not relevant--Loss deductible--Income-tax Act, 1961-- Dheeraj Associates P. Ltd . v. CIT (Cal) . . . 207

Non-resident --Presumptive tax--Mineral oil--Reimbursement of mobilization charges outside India--Includible in gross income--Reimbursement of expenses--Includible in gross revenue--Income-tax Act, 1961, s. 44BB-- CIT v. Atwood Oceanics Pacific Ltd. (Uttarakhand) . . . 156

----Presumptive tax--Mineral oil--Revenue received from charter of rig--Amount attributable to transportation of rigs outside territorial waters of India--Includible in gross income--Income-tax Act, 1961, s. 44BB-- CIT v. Sundowner Offshore International (Burmuda) Ltd. (Uttarakhand) . . . 147

----Presumptive tax--Mineral oil--Scope of section 44BB--Mobilization/demobilization charges in respect of voyage in Indian territorial waters or outside--Part of gross revenue--Income-tax Act, 1961, s. 44BB-- CIT v. R and B Falcon Drilling Co.  (Uttarakhand) . . . 152

Penalty --Concealment of income and furnishing inaccurate particulars--Assessee claiming loss on receipt of debit notes twice--Explanation not bona fide--Assessee deliberately furnished inaccurate particulars of income--Penalty to be imposed--Income-tax Act, 1961, s. 271(1)(c)-- Sethi Industries Corporation v. Deputy CIT  (P&H) . . . 243

----Failure to furnish annual information return regarding financial transactions--First notice issued on 17-12-2008 and second notice issued on 11-9-2009--Return filed on 12-10-2009--Assessee could not plead ignorance of law after first notice--Penalty leviable for period commencing from date of first notice--Income-tax Act, 1961, ss. 271FA, 285BA,-- Patan Nagrik Sahakari Bank Ltd . v. Director of Income-tax (CIB) (Guj) . . . 167

Precedent --Effect of decision of Supreme Court in Chowgule and Co. v. Union of India [1981] 47 STC 124-- Stewart Holl (India) Ltd. v. CIT (Cal) . . . 194

----Effect of decision of Supreme Court in Union of India v. R. C. Jain, AIR 1981 SC 951-- U. P. Jal Nigam v. CIT (All) . . . 248

Res judicata --Principle not applicable to income-tax law-- All India J. D. Educational Society v. Director General of Income-tax (Exemptions)  (Delhi) . . . 218

Search and seizure --Block assessment--Assessment of third person--Action under section 158BD must be taken before completion of assessment of person searched--Satisfaction under section 158BD recorded after completion of block assessment under section 158BC--Proceedings against third person not valid--Income-tax Act, 1961, ss. 158BC, 158BD-- CIT v. Calcutta Knitwears (P&H) . . . 239

----Block assessment--Effect of section 158BB --Depreciation can be claimed--Income-tax Act, 1961, s. 158BB-- CIT v. Smt. C. Sabira (Ker) . . . 226

----Block assessment--Special audit--Appointment of special auditor under section 142(2A)--Permissible--Income-tax Act, 1961, ss. 142, 158BC-- Madhurapuri Chits and Finance Co. P. Ltd . v. CIT (Ker) . . . 202

----Block assessment--Special audit--Report of special auditor--Correctness of undisclosed income not considered--Matter remanded--Income-tax Act, 1961, ss. 142, 158BC-- Madhurapuri Chits and Finance Co. P. Ltd . v. CIT  (Ker) . . . 202

----Block assessment--Undisclosed income--Addition only on basis of material discovered during search--Estimate of excess of cost of construction of property--Not valid--Finding that amount shown in particular entry erroneous--Amount not assessable as undisclosed income--Income-tax Act, 1961, Chap. XIV-B-- CIT v. Smt. C. Sabira  (Ker) . . . 226

Writ --Powers of High Court--High Court cannot re-evaluate evidence--Constitution of India, art. 226-- All India J. D. Educational Society v. Director General of Income-tax (Exemptions) (Delhi) . . . 218

AUTHORITY FOR ADVANCE RULINGS

Non-resident --Exploration and production of mineral oils in India--Services connected with--Special provisions--Seismic data acquisition and processing--Income from services taxable under special provision--Income cannot be split up--Income-tax Act, 1961, ss. 9(1)(i), (vii), Expln. 2, 44BB--CBDT Instruction No. 1862 dated 22-10-1970-- Western Geco International Limited , In re . . . 161

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Constitution of India :

Art. 226 --Writ--Powers of High Court--High Court cannot re-evaluate evidence-- All India J. D. Educational Society v. Director General of Income-tax (Exemptions) (Delhi) . . . 218

General Clauses Act, 1897 :

S. 3 --Exemption--Local authority--Criteria for local authority--U. P. Jal Nigam constituted under Water Supply and Sewerage Act, 1975--Local authority-- U. P. Jal Nigam v. CIT (All) . . . 248

Income-tax Act, 1961 :

S. 9(1)(i), (vii), Expln. 2 --Non-resident--Exploration and production of mineral oils in India--Services connected with--Special provisions--Seismic data acquisition and processing--Income from services taxable under special provision--Income cannot be split up--CBDT Instruction No. 1862 dated 22-10-1970-- Western Geco International Limited , In re (AAR) . . . 161

S. 10(20) --Exemption--Local authority--Criteria for local authority--U. P. Jal Nigam constituted under Water Supply and Sewerage Act, 1975--Local authority-- U. P. Jal Nigam v. CIT (All) . . . 248

S. 10(23C)(via) --Exemption--Hospital--Application under section 10(23C)(via) filed beyond time--Accounts not maintained properly--No evidence regarding activities--Registration under section 80G and exemption under section 12A in prior years not conclusive--Rejection of application--Justified-- All India J. D. Educational Society v. Director General of Income-tax (Exemptions) (Delhi) . . . 218

S. 32 --Depreciation--Higher rate of depreciation--Equipment purchased and leased back to vendor--No evidence that transaction a colourable device--Assessee entitled to depreciation on equipment-- CIT v. Cosmo Films Ltd . (Delhi) . . . 266

S. 40A(2)(b) --Business expenditure--Disallowance--Excessive or unreasonable payments--Raw materials supplied to subsidiary company by holding company, a non-resident--Assessee furnishing proof that payment was reasonable--No material to show that payment was excessive--No part of payment could be disallowed-- CIT v. Samsung India Electronics Ltd. (Delhi) . . . 186

S. 44 --Insurance business--Computation of income--Provision for solvency margin--Deductible--Loss in Jeevan Suraksha Fund to be taken into account-- CIT v. Life Insurance Corporation of India Ltd . (Bom) . . . 212

S. 44BB --Non-resident--Exploration and production of mineral oils in India--Services connected with--Special provisions--Seismic data acquisition and processing--Income from services taxable under special provision--Income cannot be split up--CBDT Instruction No. 1862 dated 22-10-1970-- Western Geco International Limited , In re (AAR) . . . 161

----Non-resident--Presumptive tax--Mineral oil--Reimbursement of mobilization charges outside India--Includible in gross income--Reimbursement of expenses--Includible in gross revenue-- CIT v. Atwood Oceanics Pacific Ltd.  (Uttarakhand) . . . 156

----Non-resident--Presumptive tax--Mineral oil--Revenue received from charter of rig--Amount attributable to transportation of rigs outside territorial waters of India--Includible in gross income-- CIT v. Sundowner Offshore International (Burmuda) Ltd. (Uttarakhand) . . . 147

----Non-resident--Presumptive tax--Mineral oil--Scope of section 44BB--Mobilization/demobilization charges in respect of voyage in Indian territorial waters or outside--Part of gross revenue-- CIT v. R and B Falcon Drilling Co.  (Uttarakhand) . . . 152

S. 80HHC --Export--Tea--Blending of tea--Amounts to processing--Export of blended tea--Assessee entitled to special deduction under section 80HHC-- Stewart Holl (India) Ltd. v. CIT (Cal) . . . 194

S. 142 --Search and seizure--Block assessment--Special audit--Appointment of special auditor under section 142(2A)--Permissible-- Madhurapuri Chits and Finance Co. P. Ltd . v. CIT (Ker) . . . 202

----Search and seizure--Block assessment--Special audit--Report of special auditor --Correctness of undisclosed income not considered--Matter remanded-- Madhurapuri Chits and Finance Co. P. Ltd . v. CIT (Ker) . . . 202

S. 145 --Accounting--Rejection of accounts--Hybrid system--Assessee publishing magazines showing receipts from subscriptions and advertisements on cash basis and income from sales of magazines on accrual basis--System accepted by Revenue--Change in accounting system to comply with provisions of company law--Not relevant--Assessee could continue hybrid system for income-tax purposes-- Cyber Media (India) Ltd. v. CIT (Delhi) . . . 177

Chap. XIV-B --Search and seizure--Block assessment--Undisclosed income--Addition only on basis of material discovered during search--Estimate of excess of cost of construction of property--Not valid--Finding that amount shown in particular entry erroneous--Amount not assessable as undisclosed income-- CIT v. Smt. C. Sabira  (Ker) . . . 226

S. 158BB --Search and seizure--Block assessment--Effect of section 158BB --Depreciation can be claimed-- CIT v. Smt. C. Sabira (Ker) . . . 226

S. 158BC --Search and seizure--Block assessment--Assessment of third person--Action under section 158BD must be taken before completion of assessment of person searched--Satisfaction under section 158BD recorded after completion of block assessment under section 158BC--Proceedings against third person not valid-- CIT v. Calcutta Knitwears (P&H) . . . 239

----Search and seizure--Block assessment--Special audit--Appointment of special auditor under section 142(2A)--Permissible-- Madhurapuri Chits and Finance Co. P. Ltd . v. CIT (Ker) . . . 202

----Search and seizure--Block assessment--Special audit--Report of special auditor--Correctness of undisclosed income not considered--Matter remanded-- Madhurapuri Chits and Finance Co. P. Ltd . v. CIT (Ker) . . . 202

S. 158BD --Search and seizure--Block assessment--Assessment of third person--Action under section 158BD must be taken before completion of assessment of person searched--Satisfaction under section 158BD recorded after completion of block assessment under section 158BC--Proceedings against third person not valid-- CIT v. Calcutta Knitwears (P&H) . . . 239

S. 271(1)(c) --Penalty--Concealment of income and furnishing inaccurate particulars--Assessee claiming loss on receipt of debit notes twice--Explanation not bona fide--Assessee deliberately furnished inaccurate particulars of income--Penalty to be imposed-- Sethi Industries Corporation v. Deputy CIT (P&H) . . . 243

S. 271FA --Penalty--Failure to furnish annual information return regarding financial transactions--First notice issued on 17-12-2008 and second notice issued on 11-9-2009 --Return filed on 12-10-2009--Assessee could not plead ignorance of law after first notice--Penalty leviable for period commencing from date of first notice-- Patan Nagrik Sahakari Bank Ltd . v. Director of Income-tax (CIB)  (Guj) . . . 167

S. 285BA --Penalty--Failure to furnish annual information return regarding financial transactions--First notice issued on 17-12-2008 and second notice issued on 11-9-2009 --Return filed on 12-10-2009--Assessee could not plead ignorance of law after first notice--Penalty leviable for period commencing from date of first notice-- Patan Nagrik Sahakari Bank Ltd . v. Director of Income-tax (CIB) (Guj) . . . 167

Sch. I, r. 2 --Insurance business--Computation of income--Provision for solvency margin--Deductible--Loss in Jeevan Suraksha Fund to be taken into account-- CIT v. Life Insurance Corporation of India Ltd . (Bom) . . . 212

 

 CA.RAJU SHAH

Corporate Affairs Standards

Announcement for the Corporate Affairs Standards (CAS): The need of the hour - (18-10-2011)

The globalisation and the emerging scenario of the corporate world require specialized professionals who can provide service with excellence, professionalism & objectivity to deal with various aspects of the corporate affairs. Technicalities of Corporate laws, accounting and auditing have undergone and are undergoing important changes. Members and other stakeholders need guidance on various areas of corporate laws and practice.

While appreciating the need of the profession and the global corporate sector the Council of the Institute of Chartered Accountants of India issued the Corporate Affairs Standards (CAS) to guide the members and other stakeholders. The three Corporate Affairs Standard on Business Valuation; Auditors' appointment, retirement & removal and Certification under MCA-21 have been drafted with the view to empower the members on various areas of corporate field and to disseminate the same amongst other stakeholders and also in interpreting various Laws, Rules, Regulations, principles, practices and procedures. The main purpose of formulating Corporate Affairs Standards is not to interpret the Law but to sets out the concepts, principles, practices and procedures that underlie the corporate law compliances, corporate governance and management of corporates.

We are hopeful that the Corporate Affairs Standards prove to be an empowerment exercise for the profession and enable to equip the members to continue professional work as skilled and acclaimed professional and also have a positive impact on the economic and corporate environment, society and will contribute to good governance and management.

Service Tax Return Filing Date Extended up to 26th December 2011

---------- Forwarded message ----------
From: Bhagwan Kshirsagar <bhagwankshirsagar@gmail.com>

Dear All,

 

Find attached herewith the Order no. 1 dated 20^th October 2011

 

 

 

ORDER NO. 1 /2011 – Service Tax

 

 

In exercise of the powers conferred by Rule 7(4) of the Service Tax Rules 1994 read with notification No. 48/2011-Service Tax dated 19^th October 2011, Central Board of Excise and Customs hereby extends the date of submission of half yearly return for the period April 2011 to September 2011 from 25^th October 2011 to 26^th December 2011.

 

This is being done in view of the fact that the e-filing of service tax returns for all class of service tax assesses has been made mandatory for the first time vide notification no. 43/2011- Service Tax  dated  25.8.11, as such leaving less time for the trade to adjust to the requirement of e-filing.

 

 

 

Director (Service Tax)

CBEC, New Delhi

 

Copy to:

 

            Chief Commissioners of Central Excise & Customs (All)

            Chief Commissioners of Central Excise (All)

            Director General of Service Tax

            Commissioners of Service Tax (All)

            Commissioners of Central Excise and Service Tax

            Commissioners of Central; Excise, Customs & Service Tax

 

.

Thanks & Regards,

 

RENTING - SUPREME COURT MODIFIES STAY ORDER

---------- Forwarded message ----------

From: Rebecca Andrews <rebecca.andrews88@yahoo.in>
Date: Fri, Oct 14, 2011 at 5:09 PM
Subject: Message from EGroup of SolapurCAs RENTING - SUPREME COURT MODIFIES STAY ORDER
To:

 

Supreme Court today modified it's earlier stay order of 28.9.2011 in the SLP filed by petitioners Retailers Association of India v. UOI against the Bombay High Court order that had upheld renting as a service with retrospective effect.

Petitioners are now required to pay 50% of arrears in 3 bi-monthly instalments within 6 months, furnish surety of balance 50%  and file an undertaking before the SC to this effect.

However, it has been stated that on success petitioners  would be entitled to refund of tax already paid alongwith interest, as per message conveyed by my senior Mr. Rakesh Chitkara, Advocate.

Readers may recall that no stay had been granted on imposition     of     service        tax       under    sub-clause (zzzz)   of    clause    (105)      of   Section      65    read    with Section 66 of the Finance Act, 1994 (as amended), insofar as the future liability towards service tax with effect from 1st October, 2011 is concerned. 

This implies that the Petitioners in other cases if approach the Hon'ble Supreme Court will not be required to pay service tax for the period prior to 30.9.2011. However, liability for the period w.e.f. 01.10.2011 is required to be discharged.

 

Kind regards,

Rebecca Andrews

ITR (TRIB) VOL 11 PART 8

 

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

Volume 11 : Part 8 (Issue dated : 17-10-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Business expenditure --Accrued or contingent liability--Legal and accounting, professional fees and consultancy fees--Sums not shown to have accrued in year in question--Not allowable--Income-tax Act, 1961, s. 40(a)(ia)-- Haworth (India) P. Ltd. v. Deputy CIT (Delhi) . . . 757

Deduction of tax at source --Non-resident--Payment to foreign company for provision of personnel to supervise and advise on erection of machinery in India--Amount not chargeable to tax in hands of foreign company under Double Taxation Avoidance Agreement--Assessee not liable to deduct tax at source before making payment--Income-tax Act, 1961, ss. 9(1)(vii), Expln. 2, 195(2)--Double Taxation Avoidance Agreement between India and Italy, arts. 5(2)(j), 13-- Aditya Birla Nuvo Ltd. v. Assistant Director of Income-tax (International Taxation) (Mumbai) . . . 812

Depreciation --Rate of depreciation--Uninterrupted power supply system and printers--Are computer peripherals eligible for depreciation at 60 per cent.--Income-tax Act, 1961, s. 32-- Haworth (India) P. Ltd. v. Deputy CIT (Delhi) . . . 757

International transactions --Transfer pricing--Arm's length price--Comparison of uncontrolled transaction--Data relating to current year to be used--Single comparable instance sufficient--"Net profit margin realised", means actual profits--Assumptions not permissible--Pre-operational expenses, how far to be considered--Expenses must have nexus with operation--Functional comparability--Company having substantial other segments not a comparable--Assumption with regard to capacity utilisation in case of comparable must be supported by evidence--Only one price determined by most appropriate method--Benefit of 5 per cent. adjustment not available--Income-tax Act, 1961, ss. 92C(iii), 144C--Income-tax Rules, 1962, rr. 10B(1)(e)(i), (4), 10D(1)(k)-- Haworth (India) P. Ltd. v. Deputy CIT (Delhi) . . . 757

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Double Taxation Avoidance Agreement between India and Italy :

Art. 5(2)(j) --Deduction of tax at source--Non-resident--Payment to foreign company for provision of personnel to supervise and advise on erection of machinery in India--Amount not chargeable to tax in hands of foreign company under Double Taxation Avoidance Agreement--Assessee not liable to deduct tax at source before making payment-- Aditya Birla Nuvo Ltd. v. Assistant Director of Income-tax (International Taxation) (Mumbai) . . . 812

Art. 13 --Deduction of tax at source--Non-resident--Payment to foreign company for provision of personnel to supervise and advise on erection of machinery in India--Amount not chargeable to tax in hands of foreign company under Double Taxation Avoidance Agreement--Assessee not liable to deduct tax at source before making payment-- Aditya Birla Nuvo Ltd. v. Assistant Director of Income-tax (International Taxation) (Mumbai) . . . 812

Income-tax Act, 1961 :

S. 9(1)(vii), Expln. 2 --Non-resident--Payment to foreign company for provision of personnel to supervise and advise on erection of machinery in India--Amount not chargeable to tax in hands of foreign company under Double Taxation Avoidance Agreement--Assessee not liable to deduct tax at source before making payment-- Aditya Birla Nuvo Ltd. v. Assistant Director of Income-tax (International Taxation) (Mumbai) . . . 812

S. 32 --Depreciation--Rate of depreciation--Uninterrupted power supply system and printers--Are computer peripherals eligible for depreciation at 60 per cent.-- Haworth (India) P. Ltd. v. Deputy CIT (Delhi) . . . 757

S. 40(a)(ia) --Business expenditure--Accrued or contingent liability--Legal and accounting, professional fees and consultancy fees--Sums not shown to have accrued in year in question--Not allowable-- Haworth (India) P. Ltd. v. Deputy CIT (Delhi) . . . 757

S. 92C(iii) --Transfer pricing--Arm's length price--Comparison of uncontrolled transaction--Data relating to current year to be used--Single comparable instance sufficient--"Net profit margin realised", means actual profits--Assumptions not permissible--Pre-operational expenses, how far to be considered--Expenses must have nexus with operation--Functional comparability--Company having substantial other segments not a comparable--Assumption with regard to capacity utilisation in case of comparable must be supported by evidence--Only one price determined by most appropriate method--Benefit of 5 per cent. adjustment not available-- Haworth (India) P. Ltd. v. Deputy CIT (Delhi) . . . 757

S. 144C --Transfer pricing--Arm's length price--Comparison of uncontrolled transaction--Data relating to current year to be used--Single comparable instance sufficient--"Net profit margin realised", means actual profits--Assumptions not permissible--Pre-operational expenses, how far to be considered--Expenses must have nexus with operation--Functional comparability--Company having substantial other segments not a comparable--Assumption with regard to capacity utilisation in case of comparable must be supported by evidence--Only one price determined by most appropriate method--Benefit of 5 per cent. adjustment not available-- Haworth (India) P. Ltd. v. Deputy CIT (Delhi) . . . 757

S. 195(2) --Deduction of tax at source--Non-resident--Payment to foreign company for provision of personnel to supervise and advise on erection of machinery in India--Amount not chargeable to tax in hands of foreign company under Double Taxation Avoidance Agreement--Assessee not liable to deduct tax at source before making payment-- Aditya Birla Nuvo Ltd. v. Assistant Director of Income-tax (International Taxation) (Mumbai) . . . 812

Income-tax Rules, 1962 :

R. 10B(1)(e)(i) --International transactions--Transfer pricing--Arm's length price--Comparison of uncontrolled transaction--Data relating to current year to be used--Single comparable instance sufficient--"Net profit margin realised", means actual profits --Assumptions not permissible--Pre-operational expenses, how far to be considered--Expenses must have nexus with operation--Functional comparability--Company having substantial other segments not a comparable--Assumption with regard to capacity utilisation in case of comparable must be supported by evidence--Only one price determined by most appropriate method--Benefit of 5 per cent. adjustment not available---- Haworth (India) P. Ltd. v . Deputy CIT (Delhi) . . . 757

R. 10B(4) --International transactions--Transfer pricing--Arm's length price--Comparison of uncontrolled transaction--Data relating to current year to be used--Single comparable instance sufficient--"Net profit margin realised", means actual profits--Assumptions not permissible--Pre-operational expenses, how far to be considered--Expenses must have nexus with operation--Functional comparability--Company having substantial other segments not a comparable--Assumption with regard to capacity utilisation in case of comparable must be supported by evidence--Only one price determined by most appropriate method--Benefit of 5 per cent. adjustment not available-- Haworth (India) P. Ltd. v . Deputy CIT (Delhi) . . . 757

R. 10D(1)(k) --International transactions--Transfer pricing--Arm's length price--Comparison of uncontrolled transaction--Data relating to current year to be used--Single comparable instance sufficient--"Net profit margin realised", means actual profits--Assumptions not permissible--Pre-operational expenses, how far to be considered--Expenses must have nexus with operation--Functional comparability--Company having substantial other segments not a comparable--Assumption with regard to capacity utilisation in case of comparable must be supported by evidence--Only one price determined by most appropriate method--Benefit of 5 per cent. adjustment not available-- Haworth (India) P. Ltd. v . Deputy CIT (Delhi) . . . 757

 

 CA.RAJU SHAH

ITR VOL 338 PART 1

 

INCOME TAX REPORTS (ITR)

Volume 338 : Part 1 (Issue dated 17-10-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Business --Business income--Remission of liability--Unclaimed balances--Deposits by assessee on behalf of its customers with Mumbai Port Trust--Amounts refunded by Mumbai Port Trust lying with assessee for more than three years offered for taxation--Entire amount of refund not assessable--Income-tax Act, 1961-- CIT v. Modest Maritime Services P. Ltd. (Bom) . . . 64

Business expenditure --Disallowance--Expenditure on guest house--Guest house maintained exclusively for employees of assessee--Expenditure would be deductible if conditions laid down in the second proviso to section 37(4) are fulfilled--Matter remanded--Income-tax Act, 1961, s. 37(4)-- Goodricke Group Ltd. v. CIT (No. 1 ) (Cal) . . . 97

----Interest--Accrual of liability--Breach of contract--Arbitration--Award--Appellate award decreasing damages but increasing rate of interest--Decree made rule of court in 2000--Liability to interest did not accrue in assessment years 1996-97 to 1998-99--Not deductible--Income-tax Act, 1961-- National Agricultural Co-operative Marketing Federation of India Ltd . v. CIT (Delhi) . . . 36

Business income --Remission or cessation of trading liability--Scope of section 41(1)--Cheques not presented by creditors within validity period--No remission of liability--Amount not assessable under section 41(1)--Income-tax Act, 1961, s. 41(1)-- Goodricke Group Ltd . v. CIT (No. 2 ) (Cal) . . . 116

Capital gains --Sale of agricultural land in accounting year relevant to assessment year 1991-92--Deposit of capital gains as prescribed in section 54B--Failure to utilise capital gains for purchase of another agricultural land--Assessment of capital gains--No re-computation necessary--Amended provisions of section 48 not applicable--Assessee not entitled to deduction of indexed cost of acquisition and indexed cost of improvements--Income-tax Act, 1961, ss. 45, 54B-- CIT v. Thomy P. Chakola (Decd.) (Ker) . . . 8

Capital or revenue expenditure --Payment for use of know-how--Know-how not becoming exclusive property of assessee--Royalty payable on year to year basis--Expenditure deductible--Income-tax Act, 1961, s. 37-- CIT v. G4S Securities System (India) P. Ltd. (Delhi) . . . 46

----Replacement of membranes used to separate anode and cathode compartments in electrolyser--Membrane having life of three years--Capital expenditure--Expenditure to the extent of one-third is revenue expenditure--Income-tax Act, 1961, s. 37-- Punjab Alkalies and Chemicals Ltd . v. CIT (P&H) . . . 86

Company --Computation of book profits under section 115JB--Accounts certified by authorities under Companies Act--Assessing Officer cannot consider whether accounts had been properly kept--Income-tax Act, 1961, s. 115JB-- CIT v. Adbhut Trading Co. P. Ltd . (Bom) . . . 94

Deduction of tax at source --Non-resident--Income deemed to accrue or arise in India--Payments for business information reports--No liability to deduct tax at source on amount remitted--Income-tax Act, 1961, ss. 195, 201-- Director of Income-tax (International Taxation) v. Dun and Bradstreet Information Services India P. Ltd. (Bom) . . . 95

Gift-tax --Deemed gift--Transfer of asset without consideration--Transfer of shares in company from one group of shareholders to another group--Properties received by transferor group for waiving right to receive consideration--No deemed gift--Gift-tax Act, 1958, s. 4-- Pannalal Silk Mills P. Ltd. v. CGT (Bom) . . . 1

Interpretation of taxing statute --Purposive interpretation-- Goodricke Group Ltd. v. CIT (No. 1) (Cal) . . . 97

Investment allowance --X-ray machine, ultrasound scanner, angiography, gamma camera, stress analysis equipment--Entitled to investment allowance--Income-tax Act, 1961, s. 32A-- CIT v. Apollo Hospital Enterprises (Mad) . . . 68

Penalty --Loan or deposit exceeding prescribed limit otherwise than by account payee cheque or bank draft--Director of company offering undisclosed expenditure incurred on behalf of company for taxation--Consequent entries in books of company--No deposit or loan--Penalty could not be levied under section 271D--Income-tax Act, 1961, s. 271D-- CIT v. Motta Construction P. Ltd. (Bom) . . . 66

Precedent --Advance ruling--Decision of Authority on similar facts in respect of same subject-matter--Can be followed-- Director of Income-tax (International Taxation) v. Dun and Bradstreet Information Services India P. Ltd. (Bom) . . . 95

----Effect of decision of Supreme Court in CIT v. Sugauli Sugar Works P. Ltd. [1999] 236 ITR 518-- Goodricke Group Ltd. v. CIT (No. 2 ) (Cal) . . . 116

----Effect of decision of Supreme Court in Distributors (Baroda) P. Ltd. v. Union of India [1985] 155 ITR 120 (SC)-- Faridabad Investment Co. Ltd . v. CIT (Cal) . . . 26

Reassessment --Condition precedent--Reason to believe that income had escaped assessment--Notice based on report from Director of Income-tax that credit entry in accounts of assessee was an accommodation entry--Assessing Officer not examining evidence--Notice--Not valid--Income-tax Act, 1961, ss. 147, 148-- Signature Hotels P. Ltd. v. ITO (Delhi) . . . 51

----Depreciation--Carry forward and set off--Change of law with effect from 1-4-1997 --Effect--Unabsorbed depreciation of assessment years 1993-94 to 1996-97 by operation of law forms part of depreciation allowance for previous year relevant to assessment year 1997-98--Reassessment on ground assessee not entitled to set off unabsorbed depreciation relating to assessment years 1993-94 to 1996-97 while computing income for assessment year 1997-98--Reopening on erroneous interpretation of relevant statutory provisions--Not sustainable--Income-tax Act, 1961, ss. 32(2), 147, 148-- Devesh Metcast Ltd. v. Joint CIT (Asstt.) (Guj) . . . 130

Rectification of mistakes --Intercorporate dividends--Special deduction--No evidence regarding expenditure--Deduction of notional expenditure--Not permissible--Income-tax Act, 1961, ss. 80M, 154-- Faridabad Investment Co. Ltd. v. CIT (Cal) . . . 26

----Mistake in original return--Closing stock not taken as opening stock of following year--Mistake which can be rectified--Income-tax Act, 1961, s. 154--B ridge and Roof Co. (India) Ltd . v. CIT (Cal) . . . 15

Search and seizure --Assessment of third person--Notice under section 153C--Notice not based on seized material--Not valid--Income-tax Act, 1961, s. 153C-- CIT v. Late J. Chandrasekar (HUF) (Mad) . . . 61

----Block assessment--Assessment of third person--Satisfaction under section 158BD recorded against person searched--Block assessment of third person not valid--Income-tax Act, 1961, ss. 158BC, 158BD-- CIT v. Ramesh Kumar (P&H) . . . 126

Tea development allowance --Scope of section 33AB--Entire tea grown by assessee blended with a small amount of tea purchased from outside--Assessee entitled to deduction under section 33AB--Income-tax Act, 1961, s. 33AB-- Goodricke Group Ltd. v. CIT (No. 1 ) (Cal) . . . 97

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Gift-tax Act, 1958 :

S. 4 --Gift-tax--Deemed gift--Transfer of asset without consideration--Transfer of shares in company from one group of shareholders to another group--Properties received by transferor group for waiving right to receive consideration--No deemed gift-- Pannalal Silk Mills P. Ltd. v. CGT (Bom) . . . 1

Income-tax Act, 1961 :

S. 32(2) --Reassessment--Depreciation--Carry forward and set off--Change of law with effect from 1-4-1997--Effect--Unabsorbed depreciation of assessment years 1993-94 to 1996-97 by operation of law forms part of depreciation allowance for previous year relevant to assessment year 1997-98--Reassessment on ground assessee not entitled to set off unabsorbed depreciation relating to assessment years 1993-94 to 1996-97 while computing income for assessment year 1997-98--Reopening on erroneous interpretation of relevant statutory provisions--Not sustainable-- Devesh Metcast Ltd. v. Joint CIT (Asstt.) (Guj) . . . 130

S. 32A --Investment allowance--X-ray machine, ultrasound scanner, angiography, gamma camera, stress analysis equipment--Entitled to investment allowance-- CIT v. Apollo Hospital Enterprises (Mad) . . . 68

S. 33AB --Tea development allowance--Scope of section 33AB--Entire tea grown by assessee blended with a small amount of tea purchased from outside--Assessee entitled to deduction under section 33AB-- Goodricke Group Ltd. v. CIT (No. 1 ) (Cal) . . . 97

S. 37 --Capital or revenue expenditure--Payment for use of know-how--Know-how not becoming exclusive property of assessee--Royalty payable on year to year basis--Expenditure deductible-- CIT v. G4S Securities System (India) P. Ltd. (Delhi) . . . 46

----Capital or revenue expenditure--Replacement of membranes used to separate anode and cathode compartments in electrolyser--Membrane having life of three years--Capital expenditure--Expenditure to the extent of one-third is revenue expenditure-- Punjab Alkalies and Chemicals Ltd . v. CIT (P&H) . . . 86

S. 37(4) --Business expenditure--Disallowance--Expenditure on guest house--Guest house maintained exclusively for employees of assessee--Expenditure would be deductible if conditions laid down in the second proviso to section 37(4) are fulfilled--Matter remanded-- Goodricke Group Ltd. v. CIT (No. 1 ) (Cal) . . . 97

S. 41(1) --Business income--Remission or cessation of trading liability--Scope of section 41(1)--Cheques not presented by creditors within validity period--No remission of liability--Amount not assessable under section 41(1)-- Goodricke Group Ltd . v. CIT (No. 2 ) (Cal) . . . 116

S. 45 --Capital gains--Sale of agricultural land in accounting year relevant to assessment year 1991-92--Deposit of capital gains as prescribed in section 54B--Failure to utilise capital gains for purchase of another agricultural land--Assessment of capital gains--No re-computation necessary--Amended provisions of section 48 not applicable--Assessee not entitled to deduction of indexed cost of acquisition and indexed cost of improvements-- CIT v. Thomy P. Chakola (Decd.) (Ker) . . . 8

S. 54B --Capital gains--Sale of agricultural land in accounting year relevant to assessment year 1991-92--Deposit of capital gains as prescribed in section 54B--Failure to utilise capital gains for purchase of another agricultural land--Assessment of capital gains--No re-computation necessary--Amended provisions of section 48 not applicable--Assessee not entitled to deduction of indexed cost of acquisition and indexed cost of improvements-- CIT v. Thomy P. Chakola (Decd.) (Ker) . . . 8

S. 80M --Rectification of mistakes--Intercorporate dividends--Special deduction--No evidence regarding expenditure--Deduction of notional expenditure--Not permissible-- Faridabad Investment Co. Ltd. v. CIT (Cal) . . . 26

S. 115JB --Company--Computation of book profits under section 115JB--Accounts certified by authorities under Companies Act--Assessing Officer cannot consider whether accounts had been properly kept-- CIT v. Adbhut Trading Co. P. Ltd .(Bom) . . . 94

S. 147 --Reassessment--Condition precedent--Reason to believe that income had escaped assessment--Notice based on report from Director of Income-tax that credit entry in accounts of assessee was an accommodation entry--Assessing Officer not examining evidence--Notice--Not valid-- Signature Hotels P. Ltd. v. ITO (Delhi) . . . 51

----Reassessment--Depreciation--Carry forward and set off--Change of law with effect from 1-4-1997--Effect--Unabsorbed depreciation of assessment years 1993-94 to 1996-97 by operation of law forms part of depreciation allowance for previous year relevant to assessment year 1997-98--Reassessment on ground assessee not entitled to set off unabsorbed depreciation relating to assessment years 1993-94 to 1996-97 while computing income for assessment year 1997-98--Reopening on erroneous interpretation of relevant statutory provisions--Not sustainable-- Devesh Metcast Ltd. v. Joint CIT (Asstt.) (Guj) . . . 130

S. 148 --Reassessment--Condition precedent--Reason to believe that income had escaped assessment--Notice based on report from Director of Income-tax that credit entry in accounts of assessee was an accommodation entry--Assessing Officer not examining evidence--Notice--Not valid-- Signature Hotels P. Ltd. v. ITO (Delhi) . . . 51

----Reassessment--Depreciation--Carry forward and set off--Change of law with effect from 1-4-1997 --Effect--Unabsorbed depreciation of assessment years 1993-94 to 1996-97 by operation of law forms part of depreciation allowance for previous year relevant to assessment year 1997-98--Reassessment on ground assessee not entitled to set off unabsorbed depreciation relating to assessment years 1993-94 to 1996-97 while computing income for assessment year 1997-98--Reopening on erroneous interpretation of relevant statutory provisions--Not sustainable-- Devesh Metcast Ltd. v. Joint CIT (Asstt.) (Guj) . . . 130

S. 153C --Search and seizure--Assessment of third person--Notice under section 153C--Notice not based on seized material--Not valid-- CIT v. Late J. Chandrasekar (HUF) (Mad) . . . 61

S. 154 --Rectification of mistakes--Intercorporate dividends--Special deduction--No evidence regarding expenditure--Deduction of notional expenditure--Not permissible-- Faridabad Investment Co. Ltd. v. CIT (Cal) . . . 26

----Rectification of mistakes--Mistake in original return--Closing stock not taken as opening stock of following year--Mistake which can be rectified--B ridge and Roof Co. (India) Ltd . v. CIT (Cal) . . . 15

S. 158BC --Search and seizure--Block assessment--Assessment of third person--Satisfaction under section 158BD recorded against person searched--Block assessment of third person not valid-- CIT v. Ramesh Kumar (P&H) . . . 126

S. 158BD --Search and seizure--Block assessment--Assessment of third person--Satisfaction under section 158BD recorded against person searched--Block assessment of third person not valid-- CIT v. Ramesh Kumar (P&H) . . . 126

S. 195 --Deduction of tax at source--Non-resident--Income deemed to accrue or arise in India--Payments for business information reports--No liability to deduct tax at source on amount remitted-- Director of Income-tax (International Taxation) v. Dun and Bradstreet Information Services India P. Ltd. (Bom) . . . 95

S. 201 --Deduction of tax at source--Non-resident--Income deemed to accrue or arise in India--Payments for business information reports--No liability to deduct tax at source on amount remitted-- Director of Income-tax (International Taxation) v. Dun and Bradstreet Information Services India P. Ltd. (Bom) . . . 95

S. 271D --Penalty--Loan or deposit exceeding prescribed limit otherwise than by account payee cheque or bank draft--Director of company offering undisclosed expenditure incurred on behalf of company for taxation--Consequent entries in books of company--No deposit or loan--Penalty could not be levied under section 271D-- CIT v. Motta Construction P. Ltd. (Bom) . . . 66

 CA.RAJU SHAH