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Monday, December 19, 2011

ITR VOL 339 PART 4 AND ITR )TRIB) VOL 12 PART 8


 

INCOME TAX REPORTS (ITR)

Volume 339 : Part 4 (Issue dated 19-12-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Advance tax --Interest--Company--Book profits--Assessment under section 143/147 and later recomputation under section 143(3) pursuant to revision by Commissioner--Interest under section 234B chargeable on tax calculated on book profits--Income-tax Act, 1961, ss. 115J, 143, 147, 234B-- CIT v. Nahar Spinning Mills Ltd .

(P&H) . . . 557


Appeal to Appellate Tribunal --Powers of Tribunal--Commissioner (Appeals) directing Assessing Officer to decide question on merits--Consequent order of Assessing Officer reversed by Tribunal--Order of Tribunal--Valid--Income-tax Act, 1961, ss. 43(6), Expln. 2, 254-- CIT v. Arvind Products Ltd . (Guj) . . . 643


Assessment --Valuation of property--Reference to valuer--Reference to valuer only after rejection of books of account--Income-tax Act, 1961, s. 142A(1)-- CIT v. Lucknow Public Educational Society (All) . . . 588


Bad debt --Bank--Rural branch--Meaning of "place" in Explanation (ia) to section 36(1)(viia)--Branch in a rural area where population is less than 10,000--Income-tax Act, 1961, s. 36(1)(viia)-- CIT v. Lord Krishna Bank Ltd . (Ker) . . . 606


----Money-lending business--Finding that money-lending business had been carried on and interest had been assessed as business income--Amount written off--Deductible--Income-tax Act 1961, s. 36(1)(vii)-- CIT v. Southern Polymers P. Ltd.

(Mad) . . . 540


Capital gains --Exemption--Sale of residential property--Condition precedent for exemption--Profits to be used for purchase of residential property or deposited in specified account before due date for furnishing return--Date for furnishing return--Can be date under section 139(4)--Profits utilised for specified purpose before that date--Entire profits entitled to exemption--Income-tax Act, 1961, ss. 54, 139(4)-- CIT v. Ms. Jagriti Aggarwal (P&H) . . . 610


Charitable purposes --Charitable trust--Exemption--Condition precedent--Application of income for charitable purposes--Mandis established by State Government to help marketing of agricultural produce--Mandi samitis required to give part of collections and development cess to Agricultural Produce Market Board constituted under Mandi Act--Amounts given to Board constituted application of income for charitable purposes--Mandis entitled to exemption--Income-tax Act, 1961-- CIT v. Krishi Utpadan Mandi Samiti (All) . . . 488


----Charitable trust--Registration--Cancellation--Law applicable--Power to cancel registration under section 12A granted with effect from 1-6-2010--Registration under section 12A in December, 1974--Cancellation of registration under section 12AA by order dated 30-6-2009--Not valid--Income-tax Act, 1961, ss. 12A, 12AA-- Director of Income-tax (Exemptions) v. Mool Chand Khairati Ram Trust 

(Delhi) . . . 622


Company --Book profits--Unabsorbed depreciation lower than loss carried forward from earlier year--Depreciation to be set off under clause (iv) of Explanation to section 115J(1A)--Income-tax Act, 1961, s. 115J-- Peico Electronics and Electricals Ltd . v. CIT (Cal) . . . 506


Deduction of tax at source --Assessee engaged in transportation of building material--Hiring dumpers--Payment made to contractors for hiring dumpers--Is not rent for machinery or equipment but payment for works contract of shifting of goods from one place to another--Section 194C applicable and not section 194-I--Income-tax Act, 1961, ss. 194C, 194-I-- CIT (TDS) v. Shree Mahalaxmi Transport Co.

(Guj) . . . 484


----Assessee entering into works contracts for transport of goods belonging to assessee to clients through their vehicles--Payment not rent for machinery or equipment but payment for works contract--Tax to be deducted under section 194C--Income-tax Act, 1961, ss. 194C, 194-I-- CIT (TDS) v. Swayam Shipping Services P. Ltd .

(Guj) . . . 647


----Payment to sub-contractors--Union of truck operators procuring contracts for its members--No sub-contracts--Tax not deductible at source--Income-tax Act, 1961, s. 194C-- CIT v. Truck Operators' Union (P&H) . . . 532

Exemption --Dividend--No expenditure in fact incurred in earning dividend income--No disallowance permissible--Income-tax Act, 1961, s. 14A-- CIT v. Reliance Industries Ltd. (Bom) . . . 632


Gift --Transfer of immovable property by assessee to her husband stated to be out of love and affection--Marriage subsisting at time of gift--No evidence that husband bought property with his funds--Gift-tax rightly imposed--Gift-tax Act, 1958, s. 16-- K. Meenakumari v. ITO (Mad) . . . 580


Gift-tax --Deemed gift--Firm--Property brought in as capital contribution by partners--Subsequent retirement of partners and withdrawal of property from firm--Difference in value not as deemed gift--Gift-tax Act, 1958, s. 4(1)(a)-- CIT v. Smt. Jayalakshmamma (Karn) . . . 546


Income --Exemption--Club--Principle of mutuality--Interest on fixed deposits, dividend, income from Government securities and profit on sale of investments--Principle of mutuality applies--Not chargeable to tax--Income-tax Act, 1961-- CIT v. Delhi Gymkhana Club Ltd. (Delhi) . . . 525


----Income or capital--Sales tax incentive--Purpose test--Capital receipt--Income-tax Act, 1961-- CIT v. Reliance Industries Ltd . (Bom) . . . 632


----Mutual concern--Co-operative society--Finding that there was complete identity between contributors and participators--Income of society not taxable--Income-tax Act, 1961-- CIT v. Talangang Co-op. Group Housing Society Ltd.

(Delhi) . . . 518


Industrial undertaking --Special deduction under section 80-IA--Manufacture of identity cards--Finding that activity involved making of a new final product from data with which it started and amount to manufacture or production of an article or thing--Assessee entitled to deduction--Income-tax Act, 1961, s. 80-IA-- CIT v. Haryana State Electronics Development Corporation Ltd. (P&H) . . . 615


----Special deduction under section 80-IB--Condition precedent--Manufacture of goods employing more than ten workers--Meaning of "worker"--Worker would include persons employed indirectly by contractor--Assessee entitled to special deduction under section 80-IB--Income-tax Act, 1961, s. 80-IB(2)(iv)-- CIT v. Jyoti Plastic Works Private Limited (Bom) . . . 491


Interest-tax --Charge of tax--Effect of sections 5 and 6--Interest on loans and advances under bills rediscounting scheme from banks to which Banking Regulation Act applies--Not chargeable to tax--Interest-tax Act, 1974, ss. 5, 6-- National Insurance Co. Ltd. v. CIT (Cal) . . . 573


Precedent --Effect of decision of Supreme court in Sargam Cinema v. CIT [2010] 328 ITR 513 (SC)-- CIT v. Lucknow Public Educational Society (All) . . . 588


Reassessment --Limitation--Effect of section 149(1)(b)--Period extended where alleged escaped income exceeds prescribed limit--Section 149 does not override provisions of section 147--Notice after four years--Failure to disclose material facts necessary for assessment must exist--Income-tax Act, 1961, ss. 147, 149-- Sayaji Hotels Ltd . v. ITO (Guj) . . . 498


----Notice--Change of opinion by succeeding Assessing Officer--Not a ground for reassessment--Income-tax Act, 1961, ss. 144, 147, 148-- H. K. Buildcon Ltd . v. ITO

(Guj) . . . 535


----Validity--Tax payable on reassessment less than tax paid under regular assessment--Reassessment proceedings--Not valid--Income-tax Act, 1961, ss. 147, 148-- PKM Advisory Services P. Ltd. v. ITO (Guj) . . . 585


----Writ--Reassessment after four years--Failure to disclose material facts necessary for assessment--Duty of assessee to disclose material facts fully and truly--Assessee claiming exemption under section 10B in respect of alleged new unit--Facts that exemption under section 10B had been granted earlier not disclosed--Whether facts had been disclosed fully and truly--Question could not be decided in writ proceedings--Income-tax Act, 1961, ss. 147, 148--Constitution of India, art. 226-- Sociedade De Formento Industrial P. Ltd. v. Asst. CIT (Bom) . . . 595


Search and seizure --Warrant of authorisation--Validity--Warrant based on material--Satisfaction note scrutinised by higher authorities--Warrant of authorisation valid--Income-tax Act, 1961, s. 132-- Dipin G. Patel v. Director General of Income-tax (Investigation) (Guj) . . . 636


Unexplained investment --Finding by Tribunal after considering material that investment had been explained--Finding of fact--Deletion of addition--Justified--Income-tax Act, 1961-- CIT v. R. Hanumaiah Associates (Karn) . . . 603

----Value of investment assessable under section 69--Income-tax Act, 1961, ss. 69, 69B-- Dhanush General Stores v. CIT (Chhattisgarh) . . . 651


Valuation of stock --Bank--Valuation of unquoted Government securities--Valuation according to RBI guidelines--Valid--Income-tax Act, 1961-- CIT v. Lord Krishna Bank Ltd . (Ker) . . . 606


Wealth-tax --Asset--Land taken on lease--Assessee in possession after expiry of lease--Litigation with regard to right of assessee--Order of court with regard to previous years that interest in land not assessable to wealth-tax as assessee does not have vested interest in land for a period exceeding six years--To be followed in present year also--Wealth-tax Act, 1957, s. 2(e)(2)(iii)-- George Oakes Ltd . v. Deputy CWT

(Mad) . . . 630

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART


Constitution of India ;

Art. 226 --Reassessment--Writ--Reassessment after four years--Failure to disclose material facts necessary for assessment--Duty of assessee to disclose material facts fully and truly--Assessee claiming exemption under section 10B in respect of alleged new unit--Facts that exemption under section 10B had been granted earlier not disclosed--Whether facts had been disclosed fully and truly--Question could not be decided in writ proceedings-- Sociedade De Formento Industrial P. Ltd. v. Assistant Commissioner of Income-tax (Bom) . . . 595


Gift-tax Act, 1958 :

S. 4(1)(a) --Gift-tax--Deemed gift--Firm--Property brought in as capital contribution by partners--Subsequent retirement of partners and withdrawal of property from firm--Difference in value not as deemed gift-- CIT v. Smt. Jayalakshmamma

(Karn) . . . 546


S. 16 --Gift--Transfer of immovable property by assessee to her husband stated to be out of love and affection--Marriage subsisting at time of gift--No evidence that husband bought property with his funds--Gift-tax rightly imposed-- K. Meenakumari v. ITO 

(Mad) . . . 580


Income-tax Act, 1961 :

S. 12A --Charitable purposes--Charitable trust--Registration--Cancellation--Law applicable--Power to cancel registration under section 12A granted with effect from 1-6-2010--Registration under section 12A in December, 1974--Cancellation of registration under section 12AA by order dated 30-6-2009--Not valid-- Director of Income-tax (Exemptions) v. Mool Chand Khairati Ram Trust 

(Delhi) . . . 622


S. 12AA --Charitable purposes--Charitable trust--Registration--Cancellation--Law applicable--Power to cancel registration under section 12A granted with effect from 1-6-2010--Registration under section 12A in December, 1974--Cancellation of registration under section 12AA by order dated 30-6-2009--Not valid-- Director of Income-tax (Exemptions) v. Mool Chand Khairati Ram Trust 

(Delhi) . . . 622


S. 14A --Exemption--Dividend--No expenditure in fact incurred in earning dividend income--No disallowance permissible-- CIT v. Reliance Industries Ltd. 

(Bom) . . . 632


S. 36(1)(vii) --Bad debt--Money-lending business--Finding that money-lending business had been carried on and interest had been assessed as business income--Amount written off--Deductible-- CIT v. Southern Polymers P. Ltd. 

(Mad) . . . 540


S. 36(1)(viia) --Bad debt--Bank--Rural branch--Meaning of "place" in Explanation (ia) to section 36(1)(viia)--Branch in a rural area where population is less than 10,000-- CIT v. Lord Krishna Bank Ltd . (Ker) . . . 606


S. 43(6), Expln. 2 --Appeal to Appellate Tribunal--Powers of Tribunal--Commissioner (Appeals) directing Assessing Officer to decide question on merits--Consequent order of Assessing Officer reversed by Tribunal--Order of Tribunal--Valid-- CIT v. Arvind Products Ltd . (Guj) . . . 643


S. 54 --Capital gains--Exemption--Sale of residential property--Condition precedent for exemption--Profits to be used for purchase of residential property or deposited in specified account before due date for furnishing return--Date for furnishing return--Can be date under section 139(4)--Profits utilised for specified purpose before that date--Entire profits entitled to exemption-- CIT v. Ms. Jagriti Aggarwal 

(P&H) . . . 610


S. 69 --Unexplained investment--Value of investment assessable under section 69-- Dhanush General Stores v. CIT (Chhattisgarh) . . . 651


S. 69B --Unexplained investment--Value of investment assessable under section 69-- Dhanush General Stores v. CIT (Chhattisgarh) . . . 651


S. 80-IA --Industrial undertaking--Special deduction under section 80-IA--Manufacture of identity cards--Finding that activity involved making of a new final product from data with which it started and amount to manufacture or production of an article or thing--Assessee entitled to deduction-- CIT v. Haryana State Electronics Development Corporation Ltd. (P&H) . . . 615


S. 80-IB(2)(iv) --Industrial undertaking--Special deduction under section 80-IB--Condition precedent--Manufacture of goods employing more than ten workers--Meaning of "worker"--Worker would include persons employed indirectly by contractor--Assessee entitled to special deduction under section 80-IB-- CIT v. Jyoti Plastic Works Private Limited (Bom) . . . 491


S. 115J --Advance tax--Interest--Company--Book profits--Assessment under section 143/147 and later recomputation under section 143(3) pursuant to revision by Commissioner--Interest under section 234B chargeable on tax calculated on book profits-- CIT v. Nahar Spinning Mills Ltd . (P&H) . . . 557


----Company--Book profits--Unabsorbed depreciation lower than loss carried forward from earlier year--Depreciation to be set off under clause (iv) of Explanation to section 115J(1A)-- Peico Electronics and Electricals Ltd . v. CIT 

(Cal) . . . 506


S. 132 --Search and seizure--Warrant of authorisation--Validity--Warrant based on material--Satisfaction note scrutinised by higher authorities--Warrant of authorisation valid-- Dipin G. Patel v. Director General of Income-tax (Investigation) 

(Guj) . . . 636


S. 139(4) --Capital gains--Exemption--Sale of residential property--Condition precedent for exemption--Profits to be used for purchase of residential property or deposited in specified account before due date for furnishing return--Date for furnishing return--Can be date under section 139(4)--Profits utilised for specified purpose before that date--Entire profits entitled to exemption-- CIT v. Ms. Jagriti Aggarwal 

(P&H) . . . 610


S. 142A(1) --Assessment--Valuation of property--Reference to valuer--Reference to valuer only after rejection of books of account-- CIT v. Lucknow Public Educational Society (All) . . . 588 


S. 143 --Advance tax--Interest--Company--Book profits--Assessment under section 143/147 and later recomputation under section 143(3) pursuant to revision by Commissioner--Interest under section 234B chargeable on tax calculated on book profits-- CIT v. Nahar Spinning Mills Ltd . (P&H) . . . 557 


S. 144 --Reassessment--Notice--Change of opinion by succeeding Assessing Officer--Not a ground for reassessment-- H. K. Buildcon Ltd . v. ITO

(Guj) . . . 535


S. 147 --Advance tax--Interest--Company--Book profits--Assessment under section 143/147 and later recomputation under section 143(3) pursuant to revision by Commissioner--Interest under section 234B chargeable on tax calculated on book profits-- CIT v. Nahar Spinning Mills Ltd . (P&H) . . . 557


----Reassessment--Limitation--Effect of section 149(1)(b)--Period extended where alleged escaped income exceeds prescribed limit--Section 149 does not override provisions of section 147--Notice after four years--Failure to disclose material facts necessary for assessment must exist-- Sayaji Hotels Ltd . v. ITO (Guj) . . . 498


----Reassessment--Notice--Change of opinion by succeeding Assessing Officer--Not a ground for reassessment-- H. K. Buildcon Ltd . v. ITO (Guj) . . . 535


----Reassessment--Validity--Tax payable on reassessment less than tax paid under regular assessment--Reassessment proceedings--Not valid-- PKM Advisory Services P. Ltd. v. ITO (Guj) . . . 585


----Reassessment--Writ--Reassessment after four years--Failure to disclose material facts necessary for assessment--Duty of assessee to disclose material facts fully and truly--Assessee claiming exemption under section 10B in respect of alleged new unit--Facts that exemption under section 10B had been granted earlier not disclosed--Whether facts had been disclosed fully and truly--Question could not be decided in writ proceedings-- Sociedade De Formento Industrial P. Ltd. v. Asst. CIT

(Bom) . . . 595

S. 148 --Reassessment--Notice--Change of opinion by succeeding Assessing Officer--Not a ground for reassessment-- H. K. Buildcon Ltd . v. ITO (Guj) . . . 535


----Reassessment--Validity--Tax payable on reassessment less than tax paid under regular assessment--Reassessment proceedings--Not valid-- PKM Advisory Services P. Ltd. v. ITO (Guj) . . . 585


----Reassessment--Writ--Reassessment after four years--Failure to disclose material facts necessary for assessment--Duty of assessee to disclose material facts fully and truly--Assessee claiming exemption under section 10B in respect of alleged new unit--Facts that exemption under section 10B had been granted earlier not disclosed--Whether facts had been disclosed fully and truly--Question could not be decided in writ proceedings-- Sociedade De Formento Industrial P. Ltd. v. Asst. CIT 

(Bom) . . . 595


S. 149 --Reassessment--Limitation--Effect of section 149(1)(b)--Period extended where alleged escaped income exceeds prescribed limit--Section 149 does not override provisions of section 147--Notice after four years--Failure to disclose material facts necessary for assessment must exist-- Sayaji Hotels Ltd . v. ITO (Guj) . . . 498


S. 194C --Deduction of tax at source--Assessee engaged in transportation of building material--Hiring dumpers--Payment made to contractors for hiring dumpers--Is not rent for machinery or equipment but payment for works contract of shifting of goods from one place to another--Section 194C applicable and not section 194-I-- CIT (TDS) v. Shree Mahalaxmi Transport Co. (Guj) . . . 484


----Deduction of tax at source--Assessee entering into works contracts for transport of goods belonging to assessee to clients through their vehicles--Payment not rent for machinery or equipment but payment for works contract--Tax to be deducted under section 194C-- CIT (TDS) v. Swayam Shipping Services P. Ltd . (Guj) . . . 647


----Deduction of tax at source--Payment to sub-contractors--Union of truck operators procuring contracts for its members--No sub-contracts--Tax not deductible at source-- CIT v. Truck Operators' Union (P&H) . . . 532


S. 194-I --Deduction of tax at source--Assessee engaged in transportation of building material--Hiring dumpers--Payment made to contractors for hiring dumpers--Is not rent for machinery or equipment but payment for works contract of shifting of goods from one place to another--Section 194C applicable and not section 194-I-- CIT (TDS) v. Shree Mahalaxmi Transport Co. (Guj) . . . 484


----Deduction of tax at source--Assessee entering into works contracts for transport of goods belonging to assessee to clients through their vehicles--Payment not rent for machinery or equipment but payment for works contract--Tax to be deducted under section 194C-- CIT (TDS) v. Swayam Shipping Services P. Ltd . (Guj) . . . 647


S. 234B --Advance tax--Interest--Company--Book profits--Assessment under section 143/147 and later recomputation under section 143(3) pursuant to revision by Commissioner--Interest under section 234B chargeable on tax calculated on book profits-- CIT v. Nahar Spinning Mills Ltd . (P&H) . . . 557


S. 254 --Appeal to Appellate Tribunal--Powers of Tribunal--Commissioner (Appeals) directing Assessing Officer to decide question on merits--Consequent order of Assessing Officer reversed by Tribunal--Order of Tribunal--Valid-- CIT v. Arvind Products Ltd .

(Guj) . . . 643


Interest-tax Act, 1974 :

Ss. 5, 6 --Interest-tax--Charge of tax--Effect of sections 5 and 6--Interest on loans and advances under bills rediscounting scheme from banks to which Banking Regulation Act applies--Not chargeable to tax-- National Insurance Co. Ltd. v. CIT

(Cal) . . . 573


Wealth-tax Act, 1957 :

S. 2(e)(2)(iii) --Wealth-tax--Asset--Land taken on lease--Assessee in possession after expiry of lease--Litigation with regard to right of assessee--Order of court with regard to previous years that interest in land not assessable to wealth-tax as assessee does not have vested interest in land for a period exceeding six years--To be followed in present year also-- George Oakes Ltd . v. Deputy CWT (Mad) . . . 630

 

 

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


Volume 12 : Part 8 (Issue dated : 19-12-2011)


SUBJECT INDEX TO CASES REPORTED IN THIS PART


Assessment --Assessing Officer--Jurisdiction--Objection regarding lack of jurisdiction--Assessing Officer ought to have made reference to higher authorities for decision--Procedure irregular--Matter remanded--Income-tax Act, 1961, s. 124(2)-- ITO v. Subhash Chander Pahwa & Sons (HUF) (Delhi) . . . 777


Income-tax --General principles--Rule of consistency--When applicable-- Li & Fung (India) P. Ltd. v. Deputy CIT (Delhi) . . . 748


International transactions --Arm's length price--Transactional net margin method --Assessee's determination accepted in earlier years without considering certain factors --Orders for earlier years not to operate as res judicata--Associated enterprise receiving compensation on basis of free on board value while assessee compensated at cost plus 5 per cent. mark-up--Assessee providing critical functions with help of tangible and unique intangibles developed by it--Mark-up to be on free on board value of goods sourced through assessee--But adjustment not to exceed amount which could have been received by associated enterprise--Direction for distribution between assessee and associated enterprise in ratio of 80 : 20--Income-tax Act, 1961, ss. 92D, 144C--Income-tax Rules, 1962, r. 10B(1)(e)-- Li & Fung (India) P. Ltd. v. Deputy CIT (Delhi) . . . 748


Reassessment --Notice--Assessee-company dissolved and amalgamated with another company--Notice of reassessment issued to erstwhile director of assessee-company--Notice not valid--Income-tax Act, 1961, ss. 147, 148-- ITO v. Milestone Overseas P. Ltd. (Delhi) . . . 781


Revision --Conditions precedent--Exemption--Transfer of assets--Revocable transfer--Ingredients of--Sale of immovable property of assessee held by another organisation--Conditions for revocable transfer not satisfied--Assessment order neither erroneous nor prejudicial to interests of Revenue--Assessee entitled to exemption--Income-tax Act, 1961, ss. 11, 12, 263-- Services Association of Seventh day Adventists P. Ltd. v. ITO (Chennai) . . . 787

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961 :

S. 11 --Revision--Conditions precedent--Exemption--Transfer of assets--Revocable transfer--Ingredients of--Sale of immovable property of assessee held by another organisation--Conditions for revocable transfer not satisfied--Assessment order neither erroneous nor prejudicial to interests of Revenue--Assessee entitled to exemption-- Services Association of Seventh day Adventists P. Ltd. v. ITO (Chennai) . . . 787


S. 12 --Revision--Conditions precedent--Exemption--Transfer of assets--Revocable transfer--Ingredients of--Sale of immovable property of assessee held by another organisation--Conditions for revocable transfer not satisfied--Assessment order neither erroneous nor prejudicial to interests of Revenue--Assessee entitled to exemption-- Services Association of Seventh day Adventists P. Ltd. v. ITO (Chennai) . . . 787


S. 92D --International transactions--Arm's length price--Transactional net margin method--Assessee's determination accepted in earlier years without considering certain factors--Orders for earlier years not to operate as res judicata--Associated enterprise receiving compensation on basis of free on board value while assessee compensated at cost plus 5 per cent. mark-up--Assessee providing critical functions with help of tangible and unique intangibles developed by it--Mark-up to be on free on board value of goods sourced through assessee--But adjustment not to exceed amount which could have been received by associated enterprise--Direction for distribution between assessee and associated enterprise in ratio of 80 : 20-- Li & Fung (India) P. Ltd. v. Deputy CIT (Delhi) . . . 748


S. 124(2) --Assessment--Assessing Officer--Jurisdiction--Objection regarding lack of jurisdiction--Assessing Officer ought to have made reference to higher authorities for decision--Procedure irregular--Matter remanded-- ITO v. Subhash Chander Pahwa & Sons (HUF) (Delhi) . . . 777


S. 144C --International transactions--Arm's length price--Transactional net margin method--Assessee's determination accepted in earlier years without considering certain factors--Orders for earlier years not to operate as res judicata--Associated enterprise receiving compensation on basis of free on board value while assessee compensated at cost plus 5 per cent. mark-up--Assessee providing critical functions with help of tangible and unique intangibles developed by it--Mark-up to be on free on board value of goods sourced through assessee--But adjustment not to exceed amount which could have been received by associated enterprise--Direction for distribution between assessee and associated enterprise in ratio of 80 : 20-- Li & Fung (India) P. Ltd. v. Deputy CIT (Delhi) . . . 748


S. 147 --Reassessment--Notice--Assessee-company dissolved and amalgamated with another company--Notice of reassessment issued to erstwhile director of assessee-company--Notice not valid-- ITO v. Milestone Overseas P. Ltd. (Delhi) . . . 781


S. 148 --Reassessment--Notice--Assessee-company dissolved and amalgamated with another company--Notice of reassessment issued to erstwhile director of assessee-company--Notice not valid-- ITO v. Milestone Overseas P. Ltd. (Delhi) . . . 781


S. 263 --Revision--Conditions precedent--Exemption--Transfer of assets--Revocable transfer--Ingredients of--Sale of immovable property of assessee held by another organisation--Conditions for revocable transfer not satisfied--Assessment order neither erroneous nor prejudicial to interests of Revenue--Assessee entitled to exemption-- Services Association of Seventh day Adventists P. Ltd. v. ITO (Chennai) . . . 787


Income-tax Rules, 1962 :

R. 10B(1)(e) --International transactions--Arm's length price--Transactional net margin method--Assessee's determination accepted in earlier years without considering certain factors--Orders for earlier years not to operate as res judicata--Associated enterprise receiving compensation on basis of free on board value while assessee compensated at cost plus 5 per cent. mark-up--Assessee providing critical functions with help of tangible and unique intangibles developed by it--Mark-up to be on free on board value of goods sourced through assessee--But adjustment not to exceed amount which could have been received by associated enterprise--Direction for distribution between assessee and associated enterprise in ratio of 80 : 20-- Li & Fung (India) P. Ltd. v. Deputy CIT (Delhi) . . . 748

 


RAJU SHAH

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