INCOME TAX REPORTS (ITR)
Volume 338 : Part 5 (Issue dated 14-11-2011)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Advance tax --Interest--Company--Book profits--Interest can be charged where tax calculated on book profits--Income-tax Act, 1961, ss. 115JA, 234B, 234C-- Amtek Auto Ltd . v. CIT (P&H) . . . 550
Book profits --Computation--Provision for bad and doubtful debts, whether includible--Change of law--Matter remanded--Income-tax Act, 1961, s. 115JB-- CIT v. Hutchison Max Telecom P. Ltd. (P&H) . . . 614
----Computation--Provision for diminution in value of investments--Change of law--Law applicable--Amount set aside as provision for diminution in value of assets will not reduce book profits--Income-tax Act, 1961, s. 115JB(2)-- CIT v. Steriplate P. Ltd . (P&H) . . . 547
Company --Book profits--Advance tax--Interest payable by assessee--Effect of section 115JB and Circular No. 13 of 2001--Computation of income under section 115JB--Company liable to pay advance tax--Interest leviable under sections 234B and 234C--Income-tax Act, 1961, ss. 115JB, 234B, 234C-- CIT v. Sankala Polymers P. Ltd . (Karn) . . . 617
----Dividend--Deemed dividend--Loan to shareholder--Scope of section 2(22)(e)--Gratuitous loan deemed to be dividend--Loan in return to advantage conferred by shareholder--Not deemed dividend--Shareholder permitting his immovable property to be mortgaged to bank enabling it to obtain loan--Loan by company to shareholder--Not deemed dividend--Income-tax Act, 1961, s. 2(22)(e)-- Pradip Kumar Malhotra v. CIT (Cal) . . . 538
Deduction of tax at source --Salary--Meaning of--Tips collected by hotel and disbursed to employees constitute salary--Tax deductible at source on such tips--Assessee under bona fide belief that tax was not deductible--Cannot be treated as assessee in default under section 201--Interest under section 201(1A) compensatory and to be paid--Income-tax Act, 1961, ss. 15, 16, 17, 192, 201-- CIT (TDS) v. ITC Ltd. (Delhi) . . . 598
Income from undisclosed sources --Burden of proof--Gifts--Proof of identity of donors, their creditworthiness and genuineness of gifts--Value of gifts not assessable as income from undisclosed sources--Income-tax Act, 1961-- CIT v. Ms. Mayawati (Delhi) . . . 563
Rectification of mistakes --Failure to apply provisions of law--Mistake which can be rectified--Income-tax Act, 1961, s. 154-- CIT v. Sankala Polymers P. Ltd .(Karn) . . . 617
Revision --Commissioner--Assessment order allowing set off of business losses of earlier years against dividend income without discussing how dividend income was business income--Order of revision holding order of Assessing Officer erroneous and prejudicial to interests of Revenue--Tribunal to adjudge validity of order of Commissioner and not to go into question of nature of income--Matter remanded--Income-tax Act, 1961, ss. 56, 72-- CIT v. Nalwa Investments Ltd . (Delhi) . . . 552
Search and seizure --Block assessment--Undisclosed income--Meaning of--Tax deducted at source from income and advance tax paid by recipient--Income not undisclosed--Income of partners--Firm disclosing remuneration to partners and deducting tax at source on them--No undisclosed income in hands of partners--Income-tax Act, 1961, s. 158BC-- CIT v. H. E. Mynuddin Pasha (Karn) . . . 533
Words and phrases --"Salary"-- CIT (TDS) v. ITC Ltd . (Delhi) . . . 598
Non-resident --Agreement with Indian company for development of software--All software developed by Indian company assigned to non-resident--Settlement of dispute arising out of breach of covenant as to inventor's assignment by Indian company--Sum paid by Indian company thereunder including consideration for licensing of right to use patent and software comprised therein--Balance payment capital receipt but not capital gains taxable in India--Interest on sums placed in escrow account in India--Is income accruing in India to non-resident--Decision of New York court that payment to be subject to tax deduction at source--Parties to be governed by ruling of court and of order on appeal therefrom--Income-tax Act, 1961, ss. 9(1)(vi), 195-- Upaid Systems Limited , In re . . . 517
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
S. 2(22)(e) --Company--Dividend--Deemed dividend--Loan to shareholder--Scope of section 2(22)(e)--Gratuitous loan deemed to be dividend--Loan in return to advantage conferred by shareholder--Not deemed dividend--Shareholder permitting his immovable property to be mortgaged to bank enabling it to obtain loan--Loan by company to shareholder--Not deemed dividend-- Pradip Kumar Malhotra v. CIT (Cal) . . . 538
S. 9(1)(vi) --Non-resident--Agreement with Indian company for development of software--All software developed by Indian company assigned to non-resident--Settlement of dispute arising out of breach of covenant as to inventor's assignment by Indian company--Sum paid by Indian company thereunder including consideration for licensing of right to use patent and software comprised therein--Balance payment capital receipt but not capital gains taxable in India--Interest on sums placed in escrow account in India--Is income accruing in India to non-resident--Decision of New York court that payment to be subject to tax deduction at source--Parties to be governed by ruling of court and of order on appeal therefrom-- Upaid Systems Limited , In re(AAR) . . . 517
S. 15 --Deduction of tax at source--Salary--Meaning of--Tips collected by hotel and disbursed to employees constitute salary--Tax deductible at source on such tips--Assessee under bona fide belief that tax was not deductible--Cannot be treated as assessee in default under section 201--Interest under section 201(1A) compensatory and to be paid-- CIT (TDS) v. ITC Ltd. (Delhi) . . . 598
S. 16 --Deduction of tax at source--Salary--Meaning of--Tips collected by hotel and disbursed to employees constitute salary--Tax deductible at source on such tips--Assessee under bona fide belief that tax was not deductible--Cannot be treated as assessee in default under section 201--Interest under section 201(1A) compensatory and to be paid-- CIT (TDS) v. ITC Ltd. (Delhi) . . . 598
S. 17 --Deduction of tax at source--Salary--Meaning of--Tips collected by hotel and disbursed to employees constitute salary--Tax deductible at source on such tips--Assessee under bona fide belief that tax was not deductible--Cannot be treated as assessee in default under section 201--Interest under section 201(1A) compensatory and to be paid-- CIT (TDS) v. ITC Ltd. (Delhi) . . . 598
S. 56 --Revision--Commissioner--Assessment order allowing set off of business losses of earlier years against dividend income without discussing how dividend income was business income--Order of revision holding order of Assessing Officer erroneous and prejudicial to interests of Revenue--Tribunal to adjudge validity of order of Commissioner and not to go into question of nature of income--Matter remanded-- CIT v. Nalwa Investments Ltd . (Delhi) . . . 552
S. 72 --Revision--Commissioner--Assessment order allowing set off of business losses of earlier years against dividend income without discussing how dividend income was business income--Order of revision holding order of Assessing Officer erroneous and prejudicial to interests of Revenue--Tribunal to adjudge validity of order of Commissioner and not to go into question of nature of income--Matter remanded-- CIT v. Nalwa Investments Ltd . (Delhi) . . . 552
S. 115JA --Advance tax--Interest--Company--Book profits--Interest can be charged where tax calculated on book profits-- Amtek Auto Ltd . v. CIT (P&H) . . . 550
S. 115JB --Book profits--Computation--Provision for bad and doubtful debts, whether includible--Change of law--Matter remanded-- CIT v. Hutchison Max Telecom P. Ltd. (P&H) . . . 614
----Company--Book profits--Advance tax--Interest payable by assessee--Effect of section 115JB and Circular No. 13 of 2001--Computation of income under section 115JB--Company liable to pay advance tax--Interest leviable under sections 234B and 234C-- CIT v. Sankala Polymers P. Ltd . (Karn) . . . 617
S. 115JB(2) --Book profits--Computation--Provision for diminution in value of investments--Change of law--Law applicable--Amount set aside as provision for diminution in value of assets will not reduce book profits-- CIT v. Steriplate P. Ltd .(P&H) . . . 547
S. 154 --Rectification of mistakes--Failure to apply provisions of law--Mistake which can be rectified-- CIT v. Sankala Polymers P. Ltd . (Karn) . . . 617
S. 158BC --Search and seizure--Block assessment--Undisclosed income--Meaning of--Tax deducted at source from income and advance tax paid by recipient--Income not undisclosed--Income of partners--Firm disclosing remuneration to partners and deducting tax at source on them--No undisclosed income in hands of partners-- CIT v. H. E. Mynuddin Pasha (Karn) . . . 533
S. 192 --Deduction of tax at source--Salary--Meaning of--Tips collected by hotel and disbursed to employees constitute salary--Tax deductible at source on such tips--Assessee under bona fide belief that tax was not deductible--Cannot be treated as assessee in default under section 201--Interest under section 201(1A) compensatory and to be paid-- CIT (TDS) v. ITC Ltd. (Delhi) . . . 598
S. 195 --Non-resident--Agreement with Indian company for development of software--All software developed by Indian company assigned to non-resident--Settlement of dispute arising out of breach of covenant as to inventor's assignment by Indian company--Sum paid by Indian company thereunder including consideration for licensing of right to use patent and software comprised therein--Balance payment capital receipt but not capital gains taxable in India--Interest on sums placed in escrow account in India--Is income accruing in India to non-resident--Decision of New York court that payment to be subject to tax deduction at source--Parties to be governed by ruling of court and of order on appeal therefrom-- Upaid Systems Limited , In re (AAR) . . . 517
S. 201 --Deduction of tax at source--Salary--Meaning of--Tips collected by hotel and disbursed to employees constitute salary--Tax deductible at source on such tips--Assessee under bona fide belief that tax was not deductible--Cannot be treated as assessee in default under section 201--Interest under section 201(1A) compensatory and to be paid-- CIT (TDS) v. ITC Ltd. (Delhi) . . . 598
S. 234B --Advance tax--Interest--Company--Book profits--Interest can be charged where tax calculated on book profits-- Amtek Auto Ltd . v. CIT (P&H) . . . 550
----Company--Book profits--Advance tax--Interest payable by assessee--Effect of section 115JB and Circular No. 13 of 2001--Computation of income under section 115JB--Company liable to pay advance tax--Interest leviable under sections 234B and 234C-- CIT v. Sankala Polymers P. Ltd . (Karn) . . . 617
S. 234C --Advance tax--Interest--Company--Book profits--Interest can be charged where tax calculated on book profits-- Amtek Auto Ltd . v. CIT (P&H) . . . 550
----Company--Book profits--Advance tax--Interest payable by assessee--Effect of section 115JB and Circular No. 13 of 2001--Computation of income under section 115JB--Company liable to pay advance tax--Interest leviable under sections 234B and 234C-- CIT v. Sankala Polymers P. Ltd . (Karn) . . . 617
ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))
Volume 12 : Part 3 (Issue dated : 14-11-2011)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Business expenditure --Disallowance--Expenditure on labour charges--Assessing Officer disallowing 50 per cent. as excessive claim for job charges--Assessee getting processing of diamonds done by outside parties and making payment by "account payee cheque"--Expenses within reasonable limits and also within industry norms--To be allowed--Income-tax Act, 1961, s. 37-- J. B. Brothers v . Addl. CIT (Ahmedabad) . . . 293
----Disallowance--Foreign travel, postage, factory expenses etc.--Assessing Officer disallowing 10 per cent. on ad hoc basis--Assessee producing details of expenses--Expenses incurred exclusively for business--Not to be disallowed--Income-tax Act, 1961, s. 37-- J. B. Brothers v. Addl. CIT (Ahmedabad) . . . 293
Penalty --Concealment of income--Income from sale of plants and trees claimed as agricultural income--Assessing Officer holding that composite sale along with land and taxing as capital gains--Difference in treatment of receipt--Not a case of concealment of income--Penalty to be deleted--Income-tax Act, 1961, s. 271(1)(c)-- Abhinav Ajmera v . Asst. CIT (Delhi) . . . 290
Reassessment --Notice--Information that assessee raised bogus loans--Addition made on account of receipts of sale of fabrics--No addition on account of any bogus loans or share capital in assessment order--Proceedings initiated mechanically on vague grounds and without application of mind--Not valid--Income-tax Act, 1961, s. 147-- ITO v . Lakshya Exim P. Ltd. (Delhi) . . . 303
Revision --Commissioner invoking jurisdiction in view of additions made by Assessing Officer based on statement of director--Additional Commissioner considering and dealing with relevant aspects and giving directions under section 144A--Direction part of assessment proceedings and therefore part of assessment order--Direction not prejudicial to interests of Revenue--Order under section 263 to be cancelled--Income-tax Act, 1961, ss. 144A, 263-- ITO v. Arora Alloys Ltd. (Chandigarh) . . . 263
Unexplained expenditure --Addition based on statement of director recorded by Central excise authorities--Addition not supported by evidence--Additions not justified--Income-tax Act, 1961, s. 69C-- ITO v. Arora Alloys Ltd. (Chandigarh) . . . 263
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
S. 37 --Business expenditure--Disallowance--Expenditure on labour charges--Assessing Officer disallowing 50 per cent. as excessive claim for job charges--Assessee getting processing of diamonds done by outside parties and making payment by "account payee cheque"--Expenses within reasonable limits and also within industry norms--To be allowed-- J. B. Brothers v. Addl. CIT (Ahmedabad) . . . 293
----Business expenditure--Disallowance--Foreign travel, postage, factory expenses etc.--Assessing Officer disallowing 10 per cent. on ad hoc basis--Assessee producing details of expenses--Expenses incurred exclusively for business--Not to be disallowed-- J. B. Brothers v. Addl. CIT (Ahmedabad) . . . 293
S. 69C --Unexplained expenditure--Addition based on statement of director recorded by Central excise authorities--Addition not supported by evidence--Additions not justified-- ITO v. Arora Alloys Ltd. (Chandigarh) . . . 263
S. 144A --Revision--Commissioner invoking jurisdiction in view of additions made by Assessing Officer based on statement of director--Additional Commissioner considering and dealing with relevant aspects and giving directions under section 144A--Direction part of assessment proceedings and therefore part of assessment order--Direction not prejudicial to interests of Revenue--Order under section 263 to be cancelled-- ITO v. Arora Alloys Ltd. (Chandigarh) . . . 263
S. 147 --Reassessment--Notice--Information that assessee raised bogus loans--Addition made on account of receipts of sale of fabrics--No addition on account of any bogus loans or share capital in assessment order--Proceedings initiated mechanically on vague grounds and without application of mind--Not valid-- ITO v. Lakshya Exim P. Ltd. (Delhi) . . . 303
S. 263 --Revision--Commissioner invoking jurisdiction in view of additions made by Assessing Officer based on statement of director--Additional Commissioner considering and dealing with relevant aspects and giving directions under section 144A--Direction part of assessment proceedings and therefore part of assessment order--Direction not prejudicial to interests of Revenue--Order under section 263 to be cancelled-- ITO v. Arora Alloys Ltd. (Chandigarh) . . . 263
S. 271(1)(c) --Penalty--Concealment of income--Income from sale of plants and trees claimed as agricultural income--Assessing Officer holding that composite sale along with land and taxing as capital gains--Difference in treatment of receipt--Not a case of concealment of income--Penalty to be deleted-- Abhinav Ajmera v. Asst. CIT (Delhi) . . . 290
CA. RAJU SHAH
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