INCOME TAX REPORTS (ITR)
Volume 340 : Part 1 (Issue dated 2-1-2012)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Reassessment --Notice after four years--Validity--Supreme Court--Notice valid--Assessee at liberty to raise contentions on merits--Income-tax Act, 1961, ss. 14A, 147-- Honda Siel Power Products Ltd. v. Deputy CIT . . . 64
Transfer of property --Immovable property--Registered deed of conveyance only mode of legal transfer--General power of attorney sales or sale agreement/general power of attorney/will transfers--Not valid mode of transfer and not to create title to or interest in property--Genuine powers of attorney not affected--Transfer of Property Act, 1882, ss. 5, 53A, 54--Indian Stamp Act, 1899, s. 27--Registration Act, 1908, s. 17-- Suraj Lamp and Industries Pvt. Ltd . v. State of Haryana . . . 1
Agricultural income --Process ordinarily employed to send produce fit for market--Conversion of raw peas to pea seeds was such a process--Income derived from pea seeds constituted agricultural income--Income-tax Act, 1961, s. 2(1A)(b)(ii), (iii)-- CIT v. Rana Gurjit Singh (P&H) . . . 108
Business --Capital gains--Purchase and sale of shares--Finding that transaction constituted business--Finding based on frequency, magnitude and volume of transactions--Finding justified--Profits on transactions assessable as business income--Income-tax Act, 1961, ss. 2, 28, 45, 111A-- P. V. S. Raju v. Addl. CIT (AP) . . . 75
Business expenditure --Disallowance of expenditure paid for unlawful purpose--Director of company kidnapped while on business tour--Amount paid as ransom--Deductible--Income-tax Act, 1961, s. 37(1), Expln.-- CIT v. Khemchand Motilal Jain, Tobacco Products P. Ltd. (MP) . . . 99
----Provision for warranty claims--Provision made on basis of scientific method--Allowable as business expenditure--Income-tax Act, 1961, s. 37-- Kone Elevator India Pvt. Ltd. v. Asst. CIT (Mad) . . . 46
----Tribunal allowing expenditure being one-time expenditure in view of decision of board of directors--Findings of fact--Income-tax Act, 1961-- CIT v. Housing Board, Haryana (P&H) . . . 67
Charitable purposes --Charitable trust--Registration--Objects of trust should be charitable--Activities must be genuine--Income-tax Act 1961, s. 12AA-- CIT v. Lucknow Educational and Social Welfare Society (All) . . . 86
Company --Dividend--Deemed dividend--Legal fiction in section 2(22)(e) cannot be extended to shareholder--Loan received by assessee-company from another company--Persons having substantial interest in assessee-company and company which gave loan--Assessee-company not shareholder of company which gave loan--Loan not assessable as deemed dividend--Income-tax Act, 1961, s. 2(22)(e)-- CIT v. Ankitech P. Ltd . (Delhi) . . . 14
Income --Computation of income--Law applicable--Effect of section 14A--Disallowance of expenditure in respect of tax-free income--Proviso to section 14A does not bar original assessment on the basis of section 14A--Income-tax Act, 1961, s. 14A-- Honda Siel Power Products Limited v. Deputy CIT (Delhi) . . . 53
Income from undisclosed sources --Amount shown as profit from purchase and sale of shares--Facts showing that transaction was not genuine--Addition of amount to income of assessee--Justified--Income-tax Act, 1961-- CIT v. Rana Gurjit Singh
Interpretation of taxing statutes --Legal fiction--CBDT Circular--Circulars not binding on High Court-- CIT v. Ankitech P. Ltd . (Delhi) . . . 14
Precedent --Effect of decision of Supreme Court--Effect of decision in CIT v. Narendra Doshi [2002] 254 ITR 606-- Haralal Harendralal Roy Estates Ltd . v. Union of India (Cal) . . . 69
Reassessment --Notice--Dividend--Disallowance of expenditure relating to exempted income--Restriction on reopening assessments completed before 1-4-2001--Reassessment for assessment year 2001-02 to disallow expenditure to earn exempt income--Notice not valid--Income-tax Act, 1961, ss. 14A, 147, 148-- CIT v. PNB Finance and Industries Ltd. (Delhi) . . . 50
----Reassessment after four years--Failure to disclose material facts necessary for assessment--Failure to disclose that expenses related to tax-free income--Reassessment proceedings--Valid--Income-tax Act, 1961, ss. 14A, 147-- Honda Siel Power Products Limited v. Deputy CIT (Delhi) . . . 53
----Validity--Reasons for reassessment not furnished to assessee before completion of assessment--Reassessment not valid--Income-tax Act, 1961, s. 147-- CIT v. Videsh Sanchar Nigam Ltd . (Bom) . . . 66
----Validity--Reassessment not for correction of errors--Assessee earning income from dealership in oil and plying oil tanker--Return disclosing income from both sources and assessment after considering evidence--Reassessment to recompute income from plying oil tanker--Not valid--Income-tax Act, 1961, ss. 147, 148-- Kumar Stores v. CIT
Refund --Interest--Delay in paying interest--Interest payable on interest--Income-tax Act, 1961, s. 244(1A)-- Haralal Harendralal Roy Estates Ltd . v. Union of India (Cal) . . . 69
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
S. 2 --Business--Capital gains--Purchase and sale of shares--Finding that transaction constituted business--Finding based on frequency, magnitude and volume of transactions--Finding justified--Profits on transactions assessable as business income-- P. V. S. Raju v. Addl. CIT (AP) . . . 75
S. 2(1A)(b)(ii), (iii) --Agricultural income--Process ordinarily employed to send produce fit for market--Conversion of raw peas to pea seeds was such a process--Income derived from pea seeds constituted agricultural income-- CIT v. Rana Gurjit Singh
S. 2(22)(e) --Company--Dividend--Deemed dividend--Legal fiction in section 2(22)(e) cannot be extended to shareholder--Loan received by assessee-company from another company--Persons having substantial interest in assessee-company and company which gave loan--Assessee-company not shareholder of company which gave loan--Loan not assessable as deemed dividend-- CIT v. Ankitech P. Ltd .
S. 12AA --Charitable purposes--Charitable trust--Registration--Objects of trust should be charitable--Activities must be genuine-- CIT v. Lucknow Educational and Social Welfare Society (All) . . . 86
S. 14A --Income--Computation of income--Law applicable--Effect of section 14A--Disallowance of expenditure in respect of tax-free income--Proviso to section 14A does not bar original assessment on the basis of section 14A-- Honda Siel Power Products Limited v. Deputy CIT (Delhi) . . . 53
----Reassessment--Notice--Dividend--Disallowance of expenditure relating to exempted income--Restriction on reopening assessments completed before 1-4-2001--Reassessment for assessment year 2001-02 to disallow expenditure to earn exempt income--Notice not valid-- CIT v. PNB Finance and Industries Ltd.
----Reassessment--Notice after four years--Validity--Supreme Court--Notice valid--Assessee at liberty to raise contentions on merits-- Honda Siel Power Products Ltd. v. Deputy CIT (SC) . . . 64
----Reassessment--Reassessment after four years--Failure to disclose material facts necessary for assessment--Failure to disclose that expenses related to tax-free income--Reassessment proceedings--Valid-- Honda Siel Power Products Limited v. Deputy CIT (Delhi) . . . 53
S. 28 --Business--Capital gains--Purchase and sale of shares--Finding that transaction constituted business--Finding based on frequency, magnitude and volume of transactions--Finding justified--Profits on transactions assessable as business income-- P. V. S. Raju v. Addl. CIT (AP) . . . 75
S. 37 --Business expenditure--Provision for warranty claims--Provision made on basis of scientific method--Allowable as business expenditure-- Kone Elevator India Pvt. Ltd. v. Asst. CIT (Mad) . . . 46
S. 37(1), Expln. --Business expenditure--Disallowance of expenditure paid for unlawful purpose--Director of company kidnapped while on business tour--Amount paid as ransom--Deductible-- CIT v. Khemchand Motilal Jain, Tobacco Products P. Ltd. (MP) . . . 99
S. 45 --Business--Capital gains--Purchase and sale of shares--Finding that transaction constituted business--Finding based on frequency, magnitude and volume of transactions--Finding justified--Profits on transactions assessable as business income-- P. V. S. Raju v. Addl. CIT (AP) . . . 75
S. 111A --Business--Capital gains--Purchase and sale of shares--Finding that transaction constituted business--Finding based on frequency, magnitude and volume of transactions--Finding justified--Profits on transactions assessable as business income-- P. V. S. Raju v. Addl. CIT (AP) . . . 75
S. 147 --Reassessment--Notice--Dividend--Disallowance of expenditure relating to exempted income--Restriction on reopening assessments completed before 1-4-2001--Reassessment for assessment year 2001-02 to disallow expenditure to earn exempt income--Notice not valid-- CIT v. PNB Finance and Industries Ltd.
----Reassessment--Notice after four years--Validity--Supreme Court--Notice valid--Assessee at liberty to raise contentions on merits-- Honda Siel Power Products Ltd. v. Deputy CIT (SC) . . . 64
----Reassessment--Reassessment after four years--Failure to disclose material facts necessary for assessment--Failure to disclose that expenses related to tax-free income--Reassessment proceedings--Valid-- Honda Siel Power Products Limited v. Deputy CIT (Delhi) . . . 53
----Reassessment--Validity--Reasons for reassessment not furnished to assessee before completion of assessment--Reassessment not valid-- CIT v. Videsh Sanchar Nigam Ltd . (Bom) . . . 66
----Reassessment--Validity--Reassessment not for correction of errors--Assessee earning income from dealership in oil and plying oil tanker--Return disclosing income from both sources and assessment after considering evidence--Reassessment to recompute income from plying oil tanker--Not valid-- Kumar Stores v. CIT
S. 148 --Reassessment--Notice--Dividend--Disallowance of expenditure relating to exempted income--Restriction on reopening assessments completed before 1-4-2001--Reassessment for assessment year 2001-02 to disallow expenditure to earn exempt income--Notice not valid-- CIT v. PNB Finance and Industries Ltd.
----Reassessment--Validity--Reassessment not for correction of errors--Assessee earning income from dealership in oil and plying oil tanker--Return disclosing income from both sources and assessment after considering evidence--Reassessment to recompute income from plying oil tanker--Not valid-- Kumar Stores v. CIT
S. 244(1A) --Refund--Interest--Delay in paying interest--Interest payable on interest-- Haralal Harendralal Roy Estates Ltd . v. Union of India
S. 27 --Transfer of property--Immovable property--Registered deed of conveyance only mode of legal transfer--General power of attorney sales or sale agreement/general power of attorney/will transfers--Not valid mode of transfer and not to create title to or interest in property--Genuine powers of attorney not affected-- Suraj Lamp and Industries Pvt. Ltd . v. State of Haryana (SC) . . . 1
S. 17 --Transfer of property--Immovable property--Registered deed of conveyance only mode of legal transfer--General power of attorney sales or sale agreement/general power of attorney/will transfers--Not valid mode of transfer and not to create title to or interest in property--Genuine powers of attorney not affected-- Suraj Lamp and Industries Pvt. Ltd . v. State of Haryana (SC) . . . 1
Transfer of Property Act, 1882 :
Ss. 5, 53A, 54 --Transfer of property--Immovable property--Registered deed of conveyance only mode of legal transfer--General power of attorney sales or sale agreement/general power of attorney/will transfers--Not valid mode of transfer and not to create title to or interest in property--Genuine powers of attorney not affected-- Suraj Lamp and Industries Pvt. Ltd . v. State of Haryana (SC) . . . 1
CA. RAJU SHAH
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