Article on Vodafone ruling published last Sunday

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Date: Fri, Jan 27, 2012 at 11:20 AM

 

 

22  January 2012

 

Offshore Comes Closer Home

 

What the Vodafone tax ruling means for business & taxmen

 

:: NC Hegde

 

   The Vodafone tax case, on which the Supreme Court pronounced its longawaited judgement on Friday, is exceptional. No Indian tax case has engendered so much passion and debate amongst tax professionals across the world. This is the first Indian tax case that was so keenly followed by international business and investor community.
However, the argument that this case was to be a measure of India's business climate was always incorrect. One has only to look to the circular issued by Chinese authorities to tax similar transfers to see why the Vodafone case wasn't an exception. The Supreme Court of course held that no tax was payable for a transaction between two non-residents involving sale of shares of a foreign company. India's taxmen had argued that it was necessary to look through the provisions of the statute. Because in substance there was a transfer of Indian assets and therefore it was a taxable transaction. The Supreme Court did not accept this, ruling that the structure used to invest in India was bona fide and of a long standing and could not be disregarded.
   This judgement could have far reaching implications. Certain key takeaways are:

For Dealmakers

There are offshore M&A deals like Vodafone's that have come under the scanner of the tax department. The tax claims that are in courts will certainly be viewed in the light of the Vodafone ruling. What if the Direct Tax Code (DTC) introduces taxation of indirect transfers, as has been reported? In that case, too, investors will clearly factor in the tax cost. There will be less uncertainty.

For Mauritius Route

The ruling upholds the right of a nonresident investor to use the Mauritius route — if the transaction is genuine, the court has said, the court cannot go behind it to find some supposed underlying substance. This should give some degree of comfort to the foreign investor. But DTC may reduce that comfort.

For Tax Planners

The judgement blesses the right of the tax payer to take advantage of legitimate means of tax planning within the framework of law. It distinguishes between a genuine business transaction and one arranged in with the sole objective of taking advantage of loopholes in law. A holding structure for a business transaction can be challenged if, for example, it is used for circular trading or round tripping or to paying bribes, etc. Then, such transactions, though having a legal form, should not be viewed as genuine for the purposes of revenue collection.
   These ground rules would give reasonable comfort to the global investor. Genuine business transactions will perhaps not be challenged unnecessarily.

For Non-resident Business

The court has implicitly confirmed the obligation of a non-resident to check whether the recipient of payments has tax liabilities in India, even if the recipient is also a non-resident. Though the minority judgement expresses a different view on this finding, the stand of the tax department has been vindicated. So, for this limited purpose the extra-territorial jurisdiction of Indian Income Tax Act has been confirmed.
   Therefore, there is a huge onus on nonresidents to examine the Indian taxability of a non-resident recipient. The key point here is the one made by the court: if the transaction does not give rise to any taxable income in India, there's no tax obligation. But if there's taxable income, the fact that two non-residents are involved in a transaction does not mean no taxed need be paid.

For Policymaking

The court has made a plea to the government to adopt policies that provide for certainty and clarity. With the government already having incorporated some of these suggestions in DTC provisions, there is no doubt that the Indian tax system will increasingly mirror those of the Western world.
The writer is Partner, Deloitte Haskins & Sells. Views are personal

 

 

ITR VOL 340 PART 5 and ITR (TRIB) VOL 13 PART 4

 

INCOME TAX REPORTS (ITR)

Volume 340 : Part 5 (Issue dated 30-1-2012)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

SUPREME COURT

Export of computer software --Computation of profits--Special deduction--Has to be worked out on the basis of adjusted book profits--Income-tax Act, 1961, ss. 80HHE, 115JA-- CIT v. Bhari Information Tech. Sys. P. Ltd. . . . 593

HIGH COURTS

Capital gains --Other sources--Capital gains or income from other sources--Sale of property in public auction--Purchaser given possession as lessee--Purchaser allowed to pay part of price and balance in instalments--Interest payable on such balance--Lump sum paid towards interest--Sale certificate issued after entire sale consideration including interest received--No transfer of property till entire sale consideration received--Interest part of sale price--Assessable as capital gains--Income-tax Act, 1961, s. 2(28A) (47)-- Cauvery Spinning and Weaving Mills Ltd. (in liquidation) v. Deputy CIT ( Mad) . . . 550

Company --Book profits--Minimum alternate tax--Computation of profits under section 115JA/115JB--Export--Special deduction under section 80HHC--Special deduction allowable on the basis of book profits--Income-tax Act, 1961, ss. 80HHC, 115JA, 115JB-- CIT v. C. P. S. Textiles P. Ltd . (Mad) . . . 590

Heads of income --Business income or income from house property--Assessee-company formed to carry on business in real estate and develop property--Taking on lease land and building owned by director, constructing commercial complex and receiving rental income--Finding that assessee did no other business since that year--No exploitation of business asset--Income taxable as income from house property--Income-tax Act, 1961, ss. 22, 28-- CIT v. Ideal Garden Complex P. Ltd. (Mad) . . . 609

Industrial undertaking --Special deduction--Allowance of deduction in preceding year--Denial of deduction in year in question without further material on ground unit was reconstruction of another business--Not permissible--Quantum of deduction--Important aspect to be considered and examined--Tribunal not considering aspect in spite of facts stated in assessment order--Matter remanded--Income-tax Act, 1961, s. 80-IC-- CIT v. Visual Technologies India Pvt. Ltd. (Delhi) . . . 565

Penalty --Furnishing inaccurate particulars of income--Bad debt--Disallowance of claim to deduction--Sum deposited with company as share application money converted by assessee into loan by unilateral act upon failure by company to allot shares--No interest charged from company or offered to tax in any earlier year--No explanation for this--No material to show debt taken into account in earlier year--Particulars furnished by assessee not complete, and therefore, inaccurate--Levy of penalty proper--Income-tax Act, 1961, ss. 36(2)(i), 271(1)(c)-- Kanchenjunga Advertising P. Ltd . v. CIT  (Delhi) . . . 595

----Loan exceeding prescribed limit in cash--No reasonable explanation for such loan--Penalty leviable--Income-tax Act, 1961, ss. 269SS, 271D, 273B-- P. Baskar v. CIT  (Mad) . . . 560

Precedent --Effect of Supreme Court decision in Ajanta Pharma Ltd. v. CIT [2010] 327 ITR 305-- CIT v. C. P. S. Textiles P. Ltd. (Mad) . . . 590

Reassessment --Change of law--Amendment with effect from 1-4-1989--Effect--Original assessment under section 143(1)(a)--Reassessment whether justified--Income-tax Act, 1961, ss. 143(1)(a), (3), 147-- CIT v. Ideal Garden Complex P. Ltd .  (Mad) . . . 609

----Notice--Regular assessment allowing deduction under section 80HHC/80-IA after examining answers to questionnaire--Assessee justifying claim furnishing documentary evidence or proof--Reassessment on ground deduction wrongly claimed--Is a change of opinion and not permissible--Income-tax Act, 1961, ss. 80HHC, 80-IA, 147, 148-- CIT v. Raj Kumar Mahajan (Delhi) . . . 570

Recovery of tax --Interest--Principles governing--Notice of demand--Part payment of demand--Appeal against assessment--Partial relief granted pursuant to order in appeal--Tribunal restoring order of assessment--Effect--Revival of demand--Interest payable by assessee for entire period on tax as computed in assessment order--Relief granted in first appeal does not affect liability--Income-tax Act, 1961, s. 220(2A)--Taxation Laws (Continuation and Validation of Recovery Proceedings) Act, 1964, s. 3(b)(iii)-- Girnar Investment Ltd. v. CIT (Delhi) . . . 529

Refund --Interest on excess refund--Assessment for period prior to date of coming into force of provision for charging interest made after that date--Interest chargeable--Income-tax Act, 1961, s. 234D-- CIT v. Infrastructure Development Finance Co. Ltd . (Mad) . . . 580

----Interest on refund--Period for which interest is to be given--Period of delay caused by assessee to be excluded--Assessee making belated claim for deduction which was allowed by Commissioner (Appeals)--No delay caused by assessee--Interest payable from beginning of relevant assessment year till date of grant of refund--Income-tax Act, 1961, s. 244A-- CIT v. South Indian Bank Ltd . (Ker) . . . 574

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961 :

S. 2(28A), (47) --Capital gains--Other sources--Capital gains or income from other sources--Sale of property in public auction--Purchaser given possession as lessee--Purchaser allowed to pay part of price and balance in instalments--Interest payable on such balance--Lump sum paid towards interest--Sale certificate issued after entire sale consideration including interest received--No transfer of property till entire sale consideration received--Interest part of sale price--Assessable as capital gains-- Cauvery Spinning and Weaving Mills Ltd. (in liquidation) v. Deputy CIT  (Mad) . . . 550

S. 22 --Heads of income--Business income or income from house property--Assessee-company formed to carry on business in real estate and develop property--Taking on lease land and building owned by director, constructing commercial complex and receiving rental income--Finding that assessee did no other business since that year--No exploitation of business asset--Income taxable as income from house property-- CIT v. Ideal Garden Complex P. Ltd. (Mad) . . . 609

S. 28 --Heads of income--Business income or income from house property--Assessee-company formed to carry on business in real estate and develop property--Taking on lease land and building owned by director, constructing commercial complex and receiving rental income--Finding that assessee did no other business since that year--No exploitation of business asset--Income taxable as income from house property-- CIT v. Ideal Garden Complex P. Ltd. (Mad) . . . 609

S. 36(2)(i) --Penalty--Furnishing inaccurate particulars of income--Bad debt--Disallowance of claim to deduction--Sum deposited with company as share application money converted by assessee into loan by unilateral act upon failure by company to allot shares--No interest charged from company or offered to tax in any earlier year--No explanation for this--No material to show debt taken into account in earlier year--Particulars furnished by assessee not complete, and therefore, inaccurate--Levy of penalty proper-- Kanchenjunga Advertising P. Ltd . v. CIT (Delhi) . . . 595

S. 80HHC --Company--Book profits--Minimum alternate tax--Computation of profits under section 115JA/115JB--Export--Special deduction under section 80HHC--Special deduction allowable on the basis of book profits-- CIT v. C. P. S. Textiles P. Ltd . (Mad) . . . 590

----Reassessment--Notice--Regular assessment allowing deduction under section 80HHC/80-IA after examining answers to questionnaire--Assessee justifying claim furnishing documentary evidence or proof--Reassessment on ground deduction wrongly claimed--Is a change of opinion and not permissible-- CIT v. Raj Kumar Mahajan  (Delhi) . . . 570

S. 80HHE --Export of computer software--Computation of profits--Special deduction--Has to be worked out on the basis of adjusted book profits-- CIT v. Bhari Information Tech. Sys. P. Ltd. (SC) . . . 593

S. 80-IA --Reassessment--Notice--Regular assessment allowing deduction under section 80HHC/80-IA after examining answers to questionnaire--Assessee justifying claim furnishing documentary evidence or proof--Reassessment on ground deduction wrongly claimed--Is a change of opinion and not permissible-- CIT v. Raj Kumar Mahajan (Delhi) . . . 570

S. 80-IC --Industrial undertaking--Special deduction--Allowance of deduction in preceding year--Denial of deduction in year in question without further material on ground unit was reconstruction of another business--Not permissible--Quantum of deduction--Important aspect to be considered and examined--Tribunal not considering aspect in spite of facts stated in assessment order--Matter remanded-- CIT v. Visual Technologies India Pvt. Ltd. (Delhi) . . . 565

S. 115JA --Company--Book profits--Minimum alternate tax--Computation of profits under section 115JA/115JB--Export--Special deduction under section 80HHC--Special deduction allowable on the basis of book profits-- CIT v. C. P. S. Textiles P. Ltd . (Mad) . . . 590

----Export of computer software--Computation of profits--Special deduction--Has to be worked out on the basis of adjusted book profits-- CIT v. Bhari Information Tech. Sys. P. Ltd. (SC) . . . 593

S. 115JB --Company--Book profits--Minimum alternate tax--Computation of profits under section 115JA/115JB--Export--Special deduction under section 80HHC--Special deduction allowable on the basis of book profits-- CIT v. C. P. S. Textiles P. Ltd .  (Mad) . . . 590

S. 143(1)(a), (3) --Reassessment--Change of law--Amendment with effect from 1-4-1989--Effect--Original assessment under section 143(1)(a)--Reassessment whether justified-- CIT v. Ideal Garden Complex P. Ltd . (Mad) . . . 609

S. 147 --Reassessment--Change of law--Amendment with effect from 1-4-1989--Effect--Original assessment under section 143(1)(a)--Reassessment whether justified-- CIT v. Ideal Garden Complex P. Ltd . (Mad) . . . 609

----Reassessment--Notice--Regular assessment allowing deduction under section 80HHC/80-IA after examining answers to questionnaire--Assessee justifying claim furnishing documentary evidence or proof--Reassessment on ground deduction wrongly claimed--Is a change of opinion and not permissible-- CIT v. Raj Kumar Mahajan (Delhi) . . . 570

S. 148 --Reassessment--Notice--Regular assessment allowing deduction under section 80HHC/80-IA after examining answers to questionnaire--Assessee justifying claim furnishing documentary evidence or proof--Reassessment on ground deduction wrongly claimed--Is a change of opinion and not permissible-- CIT v. Raj Kumar Mahajan

(Delhi) . . . 570

S. 220(2A) --Recovery of tax--Interest--Principles governing--Notice of demand--Part payment of demand--Appeal against assessment--Partial relief granted pursuant to order in appeal--Tribunal restoring order of assessment--Effect--Revival of demand--Interest payable by assessee for entire period on tax as computed in assessment order--Relief granted in first appeal does not affect liability-- Girnar Investment Ltd. v. CIT (Delhi) . . . 529

S. 234D --Refund--Interest on excess refund--Assessment for period prior to date of coming into force of provision for charging interest made after that date--Interest chargeable-- CIT v. Infrastructure Development Finance Co. Ltd . (Mad) . . . 580

S. 244A --Refund--Interest on refund--Period for which interest is to be given--Period of delay caused by assessee to be excluded--Assessee making belated claim for deduction which was allowed by Commissioner (Appeals)--No delay caused by assessee--Interest payable from beginning of relevant assessment year till date of grant of refund-- CIT v. South Indian Bank Ltd . (Ker) . . . 574

S. 269SS --Penalty--Loan exceeding prescribed limit in cash--No reasonable explanation for such loan--Penalty leviable-- P. Baskar v. CIT (Mad) . . . 560

S. 271(1)(c) --Penalty--Furnishing inaccurate particulars of income--Bad debt--Disallowance of claim to deduction--Sum deposited with company as share application money converted by assessee into loan by unilateral act upon failure by company to allot shares--No interest charged from company or offered to tax in any earlier year--No explanation for this--No material to show debt taken into account in earlier year--Particulars furnished by assessee not complete, and therefore, inaccurate--Levy of penalty proper-- Kanchenjunga Advertising P. Ltd . v. CIT (Delhi) . . . 595

S. 271D --Penalty--Loan exceeding prescribed limit in cash--No reasonable explanation for such loan--Penalty leviable-- P. Baskar v. CIT (Mad) . . . 560

S. 273B --Penalty--Loan exceeding prescribed limit in cash--No reasonable explanation for such loan--Penalty leviable-- P. Baskar v. CIT (Mad) . . . 560

Taxation Laws (Continuation and Validation of Recovery Proceedings) Act, 1964 :

S. 3(b)(iii) --Recovery of tax--Interest--Principles governing--Notice of demand--Part payment of demand--Appeal against assessment--Partial relief granted pursuant to order in appeal--Tribunal restoring order of assessment--Effect--Revival of demand--Interest payable by assessee for entire period on tax as computed in assessment order--Relief granted in first appeal does not affect liability-- Girnar Investment Ltd. v. CIT (Delhi) . . . 529

 

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

Volume 13 : Part 4 (Issue dated : 23-1-2012)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Business expenditure --Disallowance--Discount allowed to associated enterprises--No records to prove discount not arm's length discount--Disallowance to be deleted--Income-tax Act, 1961, s. 37-- Dresser-Rand India P. Ltd. v. Addl. CIT (Mumbai) . . . 422

----Disallowance--Payments liable to deduction of tax at source--Payment towards cost contribution agreement--Not established that payee has tax liability in respect of income embedded in payment--Disallowance not proper--Income-tax Act, 1961, s. 40(a)(i)--Double Taxation Avoidance Agreement between India and the U. S. A, art. 5 -- Dresser-Rand India P. Ltd. v. Addl. CIT (Mumbai) . . . 422

----Firm--Insurance premium on keyman insurance policy to insure life of partner--Allowable--Income-tax Act, 1961, ss. 10(10D), 37-- Asst. CIT v. Paramount Impex (Chandigarh) . . . 374

----Prior period expenses--Failure to establish that expenses actually crystallised during year--Expenses not allowable--Income-tax Act, 1961-- Deputy CIT v. Cosmo Films Ltd. (Delhi) . . . 340

Business income --Deemed profit--Remission or cessation of trading liability--Refund of value added tax--Claim of assessee to refund not yet adjudicated by commercial tax authority--Refund shown as "receivable" not taxable--Income-tax Act, 1961, s. 41(1)-- ITO v. Binayak Hi-Tech Engineering Ltd. (Kolkata) . . . 369

Business loss --Foreign exchange--Assessee converting foreign currency assets and liabilities into rupee terms at exchange rate prevalent on date of balance sheet and reflecting loss or gain in profit and loss account from year to year--Loss allowable--Income-tax Act, 1961-- Deputy CIT v. Cosmo Films Ltd. (Delhi) . . . 340

Capital gains or business income --Sale of shares--Income from sale of shares held as investment--Assessable as capital gains--Income-tax Act, 1961, s. 45--CBDT Circular No. 4 of 2007, dated 15-6-2007-- Asst. CIT v. Smt. Gargi Shitalkumar Patel (Ahmedabad) . . . 386

Capital or revenue receipt --Sales tax subsidy--Subsidy given under Dispersal of Industries Scheme as incentive to set up industries in areas other than Bombay, Pune and Thane--Is capital receipt--Income-tax Act, 1961-- Deputy CIT v. Cosmo Films Ltd. (Delhi) . . . 340

Depreciation --Additional depreciation--Penalty--Assets installed and put to use in second half of year--Depreciation claimed at 50 per cent. of rate allowable in that year--Balance of depreciation allowable in next year--Penalty not leviable for wrong claim--Income-tax Act, 1961, ss. 32(1)(ii), (iia), 271(1)(c)-- Deputy CIT v. Cosmo Films Ltd. (Delhi) . . . 340

----Rate of depreciation--Computer accessories--Entitled to rate of sixty per cent. applicable to computers--Income-tax Act, 1961-- Deputy CIT v. Cosmo Films Ltd. (Delhi) . . . 340

Exemption --Export oriented unit--Deductions--Charity and miscellaneous expenses to be excluded from allocation of expenses--Management salary--To be allocated in proportion to sales turnover--Income-tax Act, 1961, s. 10B-- Deputy CIT v. Cosmo Films Ltd. (Delhi) . . . 340

Export --Special deduction--DEPB credit--Credit not sold in assessment year 2007-08--Not assessable as income--Income-tax Act, 1961-- ITO v. Binayak Hi-Tech Engineering Ltd. (Kolkata) . . . 369

International transactions --Arm's length price--Computation--Payment towards cost contribution agreement to parent company--Finding that transaction not genuine, no services rendered by assessee and arm's length price of services nil--Documents not scrutinised by Dispute Resolution Panel--Matter remanded--Income-tax Act, 1961, s. 92C-- Dresser-Rand India P. Ltd. v. Addl. CIT (Mumbai) . . . 422

Loss --Set off--Speculation loss--Can be set off against profits from speculation transactions--Income-tax Act, 1961, s. 73, Expln-- Synergy Entrepreneur Solutions P. Ltd. v. Deputy CIT (Mumbai) . . . 377

Revision --Commissioner--Assessee, member of association of persons--Claim to set off share of loss suffered by association of persons against other income of assessee--Assessing Officer allowing claim in view of proviso to section 86--Assessing Officer taking a possible view--Order of revision to disallow set off not valid--Income-tax Act, 1961, ss. 67, 86, 263-- Hindustan Times Ltd. v. Deputy CIT (Delhi) . . . 406

----Powers of Commissioner--Revision on ground different from that stated in show cause--Not permissible--Income-tax Act, 1961, s. 263-- Synergy Entrepreneur Solutions P. Ltd. v. Deputy CIT (Mumbai) . . . 377

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

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

Art. 5 --Business expenditure--Disallowance--Payments liable to deduction of tax at source--Payment towards cost contribution agreement--Not established that payee has tax liability in respect of income embedded in payment--Disallowance not proper-- Dresser-Rand India P. Ltd. v. Addl. CIT (Mumbai) . . . 422

Income-tax Act, 1961 :

S. 10(10D) --Business expenditure--Firm--Insurance premium on keyman insurance policy to insure life of partner--Allowable-- Asst. CIT v. Paramount Impex (Chandigarh) . . . 374

S. 10B --Exemption--Export oriented unit--Deductions--Charity and miscellaneous expenses to be excluded from allocation of expenses--Management salary--To be allocated in proportion to sales turnover-- Deputy CIT v. Cosmo Films Ltd. (Delhi) . . . 340

S. 32(1)(ii) --Depreciation--Additional depreciation--Penalty--Assets installed and put to use in second half of year--Depreciation claimed at 50 per cent. of rate allowable in that year--Balance of depreciation allowable in next year--Penalty not leviable for wrong claim-- Deputy CIT v. Cosmo Films Ltd. (Delhi) . . . 340

S. 32(1)(iia) --Depreciation--Additional depreciation--Penalty--Assets installed and put to use in second half of year--Depreciation claimed at 50 per cent. of rate allowable in that year--Balance of depreciation allowable in next year--Penalty not leviable for wrong claim-- Deputy CIT v. Cosmo Films Ltd. (Delhi) . . . 340

S. 37 --Business expenditure--Disallowance--Discount allowed to associated enterprises--No records to prove discount not arm's length discount--Disallowance to be deleted-- Dresser-Rand India P. Ltd. v. Addl. CIT (Mumbai) . . . 422

----Business expenditure--Firm--Insurance premium on keyman insurance policy to insure life of partner--Allowable-- Asst. CIT v. Paramount Impex (Chandigarh) . . . 374

S. 40(a)(i) --Business expenditure--Disallowance--Payments liable to deduction of tax at source--Payment towards cost contribution agreement--Not established that payee has tax liability in respect of income embedded in payment--Disallowance not proper-- Dresser-Rand India P. Ltd. v. Addl. CIT (Mumbai) . . . 422

S. 41(1) --Business income--Deemed profit--Remission or cessation of trading liability--Refund of value added tax--Claim of assessee to refund not yet adjudicated by commercial tax authority--Refund shown as "receivable" not taxable-- ITO v. Binayak Hi-Tech Engineering Ltd. (Kolkata) . . . 369

S. 45 --Capital gains or business income--Sale of shares--Income from sale of shares held as investment--Assessable as capital gains--CBDT Circular No. 4 of 2007, dated 15-6-2007-- Asst. CIT v. Smt. Gargi Shitalkumar Patel (Ahmedabad) . . . 386

S. 67 --Revision--Commissioner--Assessee, member of association of persons--Claim to set off share of loss suffered by association of persons against other income of assessee--Assessing Officer allowing claim in view of proviso to section 86--Assessing Officer taking a possible view--Order of revision to disallow set off not valid-- Hindustan Times Ltd. v. Deputy CIT (Delhi) . . . 406

S. 73, Expln --Loss--Set off--Speculation loss--Can be set off against profits from speculation transactions-- Synergy Entrepreneur Solutions P. Ltd. v. Deputy CIT (Mumbai) . . . 377

S. 86 --Revision--Commissioner--Assessee, member of association of persons--Claim to set off share of loss suffered by association of persons against other income of assessee--Assessing Officer allowing claim in view of proviso to section 86--Assessing Officer taking a possible view--Order of revision to disallow set off not valid-- Hindustan Times Ltd. v. Deputy CIT (Delhi) . . . 406

S. 92C --International transactions--Arm's length price--Computation--Payment towards cost contribution agreement to parent company--Finding that transaction not genuine, no services rendered by assessee and arm's length price of services nil--Documents not scrutinised by Dispute Resolution Panel--Matter remanded-- Dresser-Rand India P. Ltd. v. Addl. CIT (Mumbai) . . . 422

S. 263 --Revision--Commissioner--Assessee, member of association of persons--Claim to set off share of loss suffered by association of persons against other income of assessee--Assessing Officer allowing claim in view of proviso to section 86--Assessing Officer taking a possible view--Order of revision to disallow set off not valid-- Hindustan Times Ltd. v. Deputy CIT (Delhi) . . . 406

----Revision--Powers of Commissioner--Revision on ground different from that stated in show cause--Not permissible-- Synergy Entrepreneur Solutions P. Ltd. v. Deputy CIT (Mumbai) . . . 377

S. 271(1)(c) --Depreciation--Additional depreciation--Penalty--Assets installed and put to use in second half of year--Depreciation claimed at 50 per cent. of rate allowable in that year--Balance of depreciation allowable in next year--Penalty not leviable for wrong claim-- Deputy CIT v. Cosmo Films Ltd. (Delhi) . . . 340

 

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ITR VOL 340 PART 4

INCOME TAX REPORTS (ITR)

Volume 340 : Part 4 (Issue dated 23-1-2012)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Capital or revenue expenditure --Airports Authority--Maintenance and operation of airports in India--Expenditure towards removal of encroachments in and around technical area of airport for safety and security--Is merely for purpose of removal of disability--Revenue expenditure--Income-tax Act, 1961, s. 37-- Airports Authority of India v. CIT [ FB] (Delhi) . . . 407

Deduction of tax at source --Interest on amount deposited by allottees on account of delayed allotment of flats--Interest on account of damages--Tax need not be deducted at source--Income-tax Act, 1961, s. 194A-- CIT v. H. P. Housing Board  (HP) . . . 388

Income --Accrual of income--Principle of real income--Airports Authority--Maintenance and operation of airports in India--Proforma invoices in respect of spaces given to Government Departments--Receipt of meagre amount--Entire income dose not accrue in hands of Airports Authority--Matter remanded--Income-tax Act, 1961-- Airports Authority of India v. CIT [FB] (Delhi) . . . 407

Industrial undertaking --Special deduction--Initial assessment year--Department not disputing finding of Commissioner (Appeals) as to initial assessment--Not entitled in assessee's appeal to dispute it--Income-tax Act, 1961, s. 80-IA--V elayudhaswamy Spinning Mills P. Ltd . v. Asst. CIT (Mad) . . . 477

----Special deduction under section 80-IA--Computation--Loss in year earlier to initial assessment year already absorbed cannot be notionally brought forward and set off against profits of eligible business--Income-tax Act, 1961, s. 80-IA-- Velayudhaswamy Spinning Mills P. Ltd . v. Asst. CIT (Mad) . . . 477

Interest --Definition--Interest on amount deposited by allottees on account of delayed allotment of flats--Does not fall under section 2(28A)--Income-tax Act, 1961, s. 2(28A)-- CIT v. H. P. Housing Board (HP) . . . 388

Non-resident --Double taxation avoidance--Permanent establishment--Business profits--Computation of--Deductions for expenses only according to Act--Income-tax Act, 1961, ss. 9(1)(vii), 44D, 90(2), 115A--Double Taxation Avoidance Agreement between India and Australia, arts. 7, 12-- Director of Income-tax v. Rio Tinto Technical Services (Delhi) . . . 507

----Fees for technical services--Nature and character of information furnished for which fee paid to be seen--Whether information acquired in course of business or trading activity irrelevant--Evaluation of iron ore resources, feasibility study for transportation of ore by rail and development and handling of ship loading capacities--Payment to acquire technical and managerial information--Fee for technical service taxable at presumptive rate--Composite contract for supply of goods, equipment or machinery and for providing technical services--Allocation of income--Income-tax Act, 1961, ss. 9(1)(vii), 44D-- Director of Income-tax v. Rio Tinto Technical Services  (Delhi) . . . 507

Purchase of immovable property by Central Government --Understatement of consideration--Market value of property not taken into account--Amount stated to be payable to transferors not apparent consideration--Conflicting findings of Appropriate Authority--Failure to apply mind--Insistence upon delivery of possession for tender of apparent consideration--Not permissible--No case of dispute among owners--Deposit of consideration not proper--Pre-emptive purchase not sustainable--Property revests in transferors--Income-tax Act, 1961, ss. 269UA(b)(2)(iii), 269UD(1), 269UF(1), 269UH-- Pandharinath Bhikaji Telge v. Appropriate Authority (Bom) . . . 420

Reassessment --Notice--Income escaping assessment--Intimation--Finding that assessee had not computed income under section 115JA properly--Notice under section 148 valid--Income-tax Act, 1961, ss. 115JA, 143(1)(a), 147, 148-- Kone Elevator India P. Ltd . v. ITO (Mad) . . . 454

Search and seizure --Block assessment--Articles seized during search--Effect of presumption under section 132(4A)--Diary seized during search showing higher cost of investment than declared in return under Chapter XIV-B--Presumption under section 132(4A) applicable--Addition of amount in block assessment--Justified--Income-tax Act, 1961, ss. 132(4A), 158BC-- CIT v. Ambika Appalam Depot (Mad) . . . 497

----Block assessment--Notice under section 158BC--Service of notice--Procedural requirement--Irregularity in service can be rectified--Assessee aware of block assessment proceedings and participating in them--Block assessment valid--Income-tax Act, 1961, ss. 158BC, 282-- Venad Properties Private Limited v. CIT  (Delhi) . . . 463

----Warrant of authorisation--Condition precedent--Satisfaction must be based on information coming into possession of Department--Absence of new material with authorities--Loose satisfaction notes placed by authorities not sufficient to meet requirements of provision--Search and seizure and consequent notice unsustainable--Income-tax Act, 1961, ss. 132, 153A-- Spacewood Furnishers Pvt. Ltd. v. Director General of Income-tax (Investigation) (Bom) . . . 393

Wealth-tax --Revision--Powers of Commissioner--Intimation under section 16--Commissioner can revise--Wealth-tax Act, 1957, ss. 16(1), 25-- Lake Palace Hotels and Motels Ltd. v. CWT (Raj) . . . 449

Words and phrases --"Fees for technical services"--Meaning of-- Director of Income-tax v. Rio Tinto Technical Services (Delhi) . . . 507

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Double Taxation Avoidance Agreement between India and Australia :

Arts. 7, 12 --Non-resident--Double taxation avoidance--Permanent establishment--Business profits--Computation of--Deductions for expenses only according to Act-- Director of Income-tax v. Rio Tinto Technical Services (Delhi) . . . 507

Income-tax Act, 1961 :

S. 2(28A) --Interest--Definition--Interest on amount deposited by allottees on account of delayed allotment of flats--Does not fall under section 2(28A)-- CIT v. H. P. Housing Board (HP) . . . 388

S. 9(1)(vii) --Non-resident--Double taxation avoidance--Permanent establishment--Business profits--Computation of--Deductions for expenses only according to Act-- Director of Income-tax v. Rio Tinto Technical Services (Delhi) . . . 507

----Non-resident--Fees for technical services--Nature and character of information furnished for which fee paid to be seen--Whether information acquired in course of business or trading activity irrelevant--Evaluation of iron ore resources, feasibility study for transportation of ore by rail and development and handling of ship loading capacities--Payment to acquire technical and managerial information--Fee for technical service taxable at presumptive rate--Composite contract for supply of goods, equipment or machinery and for providing technical services--Allocation of income-- Director of Income-tax v. Rio Tinto Technical Services (Delhi) . . . 507

S. 37 --Capital or revenue expenditure--Airports Authority--Maintenance and operation of airports in India--Expenditure towards removal of encroachments in and around technical area of airport for safety and security--Is merely for purpose of removal of disability--Revenue expenditure-- Airports Authority of India v. CIT [ FB] (Delhi) . . . 407

S. 44D --Non-resident--Double taxation avoidance--Permanent establishment--Business profits--Computation of--Deductions for expenses only according to Act-- Director of Income-tax v. Rio Tinto Technical Services (Delhi) . . . 507

----Non-resident--Fees for technical services--Nature and character of information furnished for which fee paid to be seen--Whether information acquired in course of business or trading activity irrelevant--Evaluation of iron ore resources, feasibility study for transportation of ore by rail and development and handling of ship loading capacities--Payment to acquire technical and managerial information--Fee for technical service taxable at presumptive rate--Composite contract for supply of goods, equipment or machinery and for providing technical services--Allocation of income-- Director of Income-tax v. Rio Tinto Technical Services (Delhi) . . . 507

S. 80-IA --Industrial undertaking--Special deduction--Initial assessment year--Department not disputing finding of Commissioner (Appeals) as to initial assessment--Not entitled in assessee's appeal to dispute it--V elayudhaswamy Spinning Mills P. Ltd . v. Asst. CIT (Mad) . . . 477

----Industrial undertaking--Special deduction under section 80-IA--Computation--Loss in year earlier to initial assessment year already absorbed cannot be notionally brought forward and set off against profits of eligible business-- Velayudhaswamy Spinning Mills P. Ltd . v. Asst. CIT (Mad) . . . 477

S. 90(2) --Non-resident--Double taxation avoidance--Permanent establishment--Business profits--Computation of--Deductions for expenses only according to Act-- Director of Income-tax v. Rio Tinto Technical Services (Delhi) . . . 507

S. 115A --Non-resident--Double taxation avoidance--Permanent establishment--Business profits--Computation of--Deductions for expenses only according to Act-- Director of Income-tax v. Rio Tinto Technical Services (Delhi) . . . 507

S. 115JA --Reassessment--Notice--Income escaping assessment--Intimation--Finding that assessee had not computed income under section 115JA properly--Notice under section 148 valid-- Kone Elevator India P. Ltd . v. ITO (Mad) . . . 454

S. 132 --Search and seizure--Warrant of authorisation--Condition precedent--Satisfaction must be based on information coming into possession of Department--Absence of new material with authorities--Loose satisfaction notes placed by authorities not sufficient to meet requirements of provision--Search and seizure and consequent notice unsustainable-- Spacewood Furnishers Pvt. Ltd. v. Director General of Income-tax (Investigation) (Bom) . . . 393

S. 132(4A) --Search and seizure--Block assessment--Articles seized during search--Effect of presumption under section 132(4A)--Diary seized during search showing higher cost of investment than declared in return under Chapter XIV-B--Presumption under section 132(4A) applicable--Addition of amount in block assessment--Justified-- CIT v. Ambika Appalam Depot (Mad) . . . 497

S. 143(1)(a) --Reassessment--Notice--Income escaping assessment--Intimation--Finding that assessee had not computed income under section 115JA properly--Notice under section 148 valid-- Kone Elevator India P. Ltd . v. ITO (Mad) . . . 454

S. 147 --Reassessment--Notice--Income escaping assessment--Intimation--Finding that assessee had not computed income under section 115JA properly--Notice under section 148 valid-- Kone Elevator India P. Ltd . v. ITO (Mad) . . . 454

S. 148 --Reassessment--Notice--Income escaping assessment--Intimation--Finding that assessee had not computed income under section 115JA properly--Notice under section 148 valid-- Kone Elevator India P. Ltd . v. ITO (Mad) . . . 454

S. 153A --Search and seizure--Warrant of authorisation--Condition precedent--Satisfaction must be based on information coming into possession of Department--Absence of new material with authorities--Loose satisfaction notes placed by authorities not sufficient to meet requirements of provision--Search and seizure and consequent notice unsustainable-- Spacewood Furnishers Pvt. Ltd. v. Director General of Income-tax (Investigation) (Bom) . . . 393

S. 158BC --Search and seizure--Block assessment--Articles seized during search--Effect of presumption under section 132(4A)--Diary seized during search showing higher cost of investment than declared in return under Chapter XIV-B--Presumption under section 132(4A) applicable--Addition of amount in block assessment--Justified-- CIT v. Ambika Appalam Depot (Mad) . . . 497

----Search and seizure--Block assessment--Notice under section 158BC--Service of notice--Procedural requirement--Irregularity in service can be rectified--Assessee aware of block assessment proceedings and participating in them--Block assessment valid-- Venad Properties Private Limited v. CIT (Delhi) . . . 463

S. 194A --Deduction of tax at source--Interest on amount deposited by allottees on account of delayed allotment of flats--Interest on account of damages--Tax need not be deducted at source-- CIT v. H. P. Housing Board (HP) . . . 388

S. 269UA(b)(2)(iii) --Purchase of immovable property by Central Government--Understatement of consideration--Market value of property not taken into account--Amount stated to be payable to transferors not apparent consideration--Conflicting findings of Appropriate Authority--Failure to apply mind--Insistence upon delivery of possession for tender of apparent consideration--Not permissible--No case of dispute among owners--Deposit of consideration not proper--Pre-emptive purchase not sustainable--Property revests in transferors-- Pandharinath Bhikaji Telge v. Appropriate Authority (Bom) . . . 420

S. 269UD(1) --Purchase of immovable property by Central Government--Understatement of consideration--Market value of property not taken into account--Amount stated to be payable to transferors not apparent consideration--Conflicting findings of Appropriate Authority--Failure to apply mind--Insistence upon delivery of possession for tender of apparent consideration--Not permissible--No case of dispute among owners--Deposit of consideration not proper--Pre-emptive purchase not sustainable--Property revests in transferors-- Pandharinath Bhikaji Telge v. Appropriate Authority (Bom) . . . 420

S. 269UF(1) --Purchase of immovable property by Central Government--Understatement of consideration--Market value of property not taken into account--Amount stated to be payable to transferors not apparent consideration--Conflicting findings of Appropriate Authority--Failure to apply mind--Insistence upon delivery of possession for tender of apparent consideration--Not permissible--No case of dispute among owners--Deposit of consideration not proper--Pre-emptive purchase not sustainable--Property revests in transferors-- Pandharinath Bhikaji Telge v. Appropriate Authority (Bom) . . . 420

S. 269UH --Purchase of immovable property by Central Government--Understatement of consideration--Market value of property not taken into account--Amount stated to be payable to transferors not apparent consideration--Conflicting findings of Appropriate Authority--Failure to apply mind--Insistence upon delivery of possession for tender of apparent consideration--Not permissible--No case of dispute among owners--Deposit of consideration not proper--Pre-emptive purchase not sustainable--Property revests in transferors-- Pandharinath Bhikaji Telge v. Appropriate Authority (Bom) . . . 420

S. 282 --Search and seizure--Block assessment--Notice under section 158BC--Service of notice--Procedural requirement--Irregularity in service can be rectified--Assessee aware of block assessment proceedings and participating in them--Block assessment valid-- Venad Properties Private Limited v. CIT (Delhi) . . . 463

Wealth-tax Act, 1957 :

Ss. 16(1), 25 --Wealth-tax--Revision--Powers of Commissioner--Intimation under section 16--Commissioner can revise-- Lake Palace Hotels and Motels Ltd. v. CWT (Raj) . . . 449

TR (TRIB) VOL 13 PART 2

 

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

Volume 13 : Part 2 (Issue dated : 9-1-2012)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Amortisation of preliminary expenses --Expenditure on issue of preference shares--Purchased oil rig not put to use in relevant previous year--Assessee cannot claim amortisation under section 35D--Income-tax Act, 1961, s. 35D-- Deputy CIT v. Aban Offshore Ltd. (Chennai) . . . 180

Appeal to Appellate Tribunal --Powers of Tribunal--Power to consider new ground --Assessee cannot be denied its right arising from facts on record for determining tax liability--Matter remanded-- Aditya Birla Nuvo Ltd. v. Asst. CIT (Mumbai) . . . 128

Assessment --Best judgment assessment--Assessee not given sufficient opportunity by Assessing Officer and Commissioner (Appeals)--Matter remanded--Income-tax Act, 1961, s. 144 -- Pilot Cabs and Tours v. ITO (Chennai) . . . 123

Business expenditure --Disallowance--Club membership fees to be allowed--Other expenses disallowed under entertainment expenses--Assessing Officer to delete addition after verification--Income-tax Act, 1961, s. 37-- Aditya Birla Nuvo Ltd. v. Asst. CIT (Mumbai) . . . 128

----Disallowance--Payments in cash exceeding specified limit--Assessee failing to establish that payments under exceptional situations--To be disallowed--Income-tax Act, 1961, s. 40A(3)--Income-tax Rules, 1962, r. 6DD-- Aditya Birla Nuvo Ltd. v. Asst. CIT (Mumbai) . . . 128

----Disallowance--Travelling expenses of foreign citizens--To be considered for computing disallowance under rule 6D--Expenses disallowed--Income-tax Rules, 1962, r. 6D-- Aditya Birla Nuvo Ltd. v. Asst. CIT (Mumbai) . . . 128

----Entertainment expenditure--Disallowance of 25 per cent.--Proper--Gifts and presentation of articles in excess of Rs. 1,000 per article--Allowable--Income-tax Act, 1961, s. 37-- Aditya Birla Nuvo Ltd. v. Asst. CIT (Mumbai) . . . 128

----Expenditure on sales promotion relating to business--Allowable--Income-tax Act, 1961, s. 37 -- Jayantilal Jivanlal Soni (HUF) v. ITO (Ahmedabad) . . . 215

----Expenses incurred on guest house, sales and press conference--Deductible--Premium on redemption of non-convertible debentures issued during assessment year 1988-89--Expenditure on school for children of employees--Deductible--Income-tax Act, 1961, s. 37 -- Aditya Birla Nuvo Ltd. v. Asst. CIT (Mumbai) . . . 128

----Stationery expenses--Assessee furnishing details regarding payment of stationery--Expenditure allowable--Income-tax Act, 1961-- Jayantilal Jivanlal Soni (HUF) v. ITO (Ahmedabad) . . . 215

----Travelling expenses of employees--Computation--Expenses on each trip or in year together to be taken into account--Income-tax Rules, 1962, r. 6D-- Aditya Birla Nuvo Ltd. v. Asst. CIT (Mumbai) . . . 128

Business income or income from house property --Purchase of building for business purposes--Rent received to generate additional income--To be computed as income from house property--Income-tax Act, 1961 -- Deputy CIT v. Aban Offshore Ltd. (Chennai) . . . 180

Capital or revenue expenditure --Construction of access road to new plant--Is capital expenditure--Income-tax Act, 1961 -- Aditya Birla Nuvo Ltd. v. Asst. CIT (Mumbai) . . . 128

Deduction of tax at source --Payment to non-resident--Computation--Assessee computing under section 44BB and deducting tax at specified rate from charges paid to non-resident--Proper--Income-tax Act, 1961, s. 44BB -- Frontier Offshore Exploration India Ltd. v. Deputy CIT (Chennai) . . . 168

----Payments made to catering contractors--Assessee entering into contract with another person for carrying out part of work undertaken--Amounts to sub-contract--Deduction of tax at one per cent.--Proper--Income-tax Act, 1961 -- Deputy CIT v. Aban Offshore Ltd. (Chennai) . . . 180

----Payments to non-resident for services rendered in connection with prospecting and extracting or production of mineral oils in India--Deduction of tax at 4 per cent. considering services rendered by non-resident entities--Proper--Income-tax Act, 1961, s. 44BB-- Deputy CIT v. Aban Offshore Ltd. (Chennai) . . . 180

Depreciation --Windmills--Allowed in earlier years--To be allowed in current year --Income-tax Act, 1961-- Deputy CIT v. Aban Offshore Ltd. (Chennai) . . . 180

Income --Closing stock--Unutilised Modvat credit--To be deleted-- Aditya Birla Nuvo Ltd. v. Asst. CIT (Mumbai) . . . 128

----Computation--Dividend income--Disallowance of expenditure relating to exempt income--Failure to verify whether expenditure incurred directly or indirectly prior to applicability of rule 8D--Matter remanded--Income-tax Act, 1961, s. 14A--Income-tax Rules, 1962, r. 8D-- Deputy CIT v. Aban Offshore Ltd. (Chennai) . . . 180

Income-tax survey --Valuation of stock--Addition on excess stock--Finding that stocks in survey records less than in books of account--Contention that material available at time of survey not considered--Matter remanded--Income-tax Act, 1961, s. 133A-- Jayantilal Jivanlal Soni (HUF) v . ITO (Ahmedabad) . . . 215

Interest --Return--Levy of interest under sections 234A and 234B--Interest charged from due date of filing return to date of return without giving credit to tax paid--Interest to be charged on assessed tax after reducing amount of tax paid--Interest under section 234B mandatory--Income-tax Act, 1961, ss. 234A, 234B-- Sachin Jain v. Deputy CIT (Delhi) . . . 161

Interest on borrowed capital --Loans for new project--New unit integral part of same business--Interest deductible--Income-tax Act, 1961 , s. 36(1)(iii) -- Aditya Birla Nuvo Ltd. v. Asst. CIT (Mumbai) . . . 128

Loss --Short-term capital loss--Sale of units of mutual funds--Assessee failing to produce details--Disallowance justified--Income-tax Act, 1961 , s. 94(7) -- Deputy CIT v. Aban Offshore Ltd. (Chennai) . . . 180

Undisclosed income --Addition on basis of a paper seized from third party--Seized paper not containing details of payment--Addition to be deleted--Income-tax Act, 1961 -- Saif Ali Khan Mansurali v. Asst. CIT (Mumbai) . . . 204

 

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961 :

S. 14A -- Income--Computation--Dividend income--Disallowance of expenditure relating to exempt income--Failure to verify whether expenditure incurred directly or indirectly prior to applicability of rule 8D--Matter remanded-- Deputy CIT v. Aban Offshore Ltd. (Chennai) . . . 180

S. 35D -- Amortisation of preliminary expenses--Expenditure on issue of preference shares--Purchased oil rig not put to use in relevant previous year--Assessee cannot claim amortisation under section 35D-- Deputy CIT v. Aban Offshore Ltd. (Chennai) . . . 180

S. 36(1)(iii) -- Interest on borrowed capital--Loans for new project--New unit integral part of same business--Interest deductible-- Aditya Birla Nuvo Ltd. v. Asst. CIT (Mumbai) . . . 128

S. 37 -- Business expenditure--Disallowance--Club membership fees to be allowed--Other expenses disallowed under entertainment expenses--Assessing Officer to delete addition after verification-- Aditya Birla Nuvo Ltd. v. Asst. CIT (Mumbai) . . . 128

---- Business expenditure--Entertainment expenditure--Disallowance of 25 per cent. --Proper--Gifts and presentation of articles in excess of Rs. 1,000 per article--Allowable -- Aditya Birla Nuvo Ltd. v. Asst. CIT (Mumbai) . . . 128

---- Business expenditure--Expenditure on sales promotion relating to business--Allowable-- Jayantilal Jivanlal Soni (HUF) v. ITO (Ahmedabad) . . . 215

---- Business expenditure--Expenses incurred on guest house, sales and press conference--Deductible--Premium on redemption of non-convertible debentures issued during assessment year 1988-89--Expenditure on school for children of employees--Deductible-- Aditya Birla Nuvo Ltd. v. Asst. CIT (Mumbai) . . . 128

S. 40A(3) -- Business expenditure--Disallowance--Payments in cash exceeding specified limit--Assessee failing to establish that payments under exceptional situations--To be disallowed--Income-tax Rules, 1962, r. 6DD-- Aditya Birla Nuvo Ltd. v. Asst. CIT (Mumbai) . . . 128

S. 44BB -- Deduction of tax at source--Payment to non-resident--Computation--Assessee computing under section 44BB and deducting tax at specified rate from charges paid to non-resident--Proper-- Frontier Offshore Exploration India Ltd. v. Deputy CIT (Chennai) . . . 168

----Deduction of tax at source--Payments to non-resident for services rendered in connection with prospecting and extracting or production of mineral oils in India--Deduction of tax at 4 per cent. considering services rendered by non-resident entities--Proper-- Deputy CIT v. Aban Offshore Ltd. (Chennai) . . . 180

S. 94(7) -- Loss--Short-term capital loss--Sale of units of mutual funds--Assessee failing to produce details--Disallowance justified-- Deputy CIT v. Aban Offshore Ltd. (Chennai) . . . 180

S. 133A -- Income-tax survey--Valuation of stock--Addition on excess stock--Finding that stocks in survey records less than in books of account--Contention that material available at time of survey not considered--Matter remanded-- Jayantilal Jivanlal Soni (HUF) v. ITO (Ahmedabad) . . . 215

S. 144 -- Assessment--Best judgment assessment--Assessee not given sufficient opportunity by Assessing Officer and Commissioner (Appeals)--Matter remanded-- Pilot Cabs and Tours v. ITO (Chennai) . . . 123

S. 234A -- Interest--Return--Levy of interest under sections 234A and 234B--Interest charged from due date of filing return to date of return without giving credit to tax paid--Interest to be charged on assessed tax after reducing amount of tax paid--Interest under section 234B mandatory-- Sachin Jain v. Deputy CIT (Delhi) . . . 161

S. 234B -- Interest--Return--Levy of interest under sections 234A and 234B--Interest charged from due date of filing return to date of return without giving credit to tax paid--Interest to be charged on assessed tax after reducing amount of tax paid--Interest under section 234B mandatory-- Sachin Jain v. Deputy CIT (Delhi) . . . 161

Income-tax Rules, 1962 :

R. 6D --Business expenditure--Disallowance--Travelling expenses of foreign citizens --To be considered for computing disallowance under rule 6D--Expenses disallowed-- Aditya Birla Nuvo Ltd. v. Asst. CIT (Mumbai) . . . 128

----Business expenditure--Travelling expenses of employees--Computation--Expenses on each trip or in year together to be taken into account-- Aditya Birla Nuvo Ltd. v. Asst. CIT (Mumbai) . . . 128

R. 8D --Income--Computation--Dividend income--Disallowance of expenditure relating to exempt income--Failure to verify whether expenditure incurred directly or indirectly prior to applicability of rule 8D--Matter remanded-- Deputy CIT v. Aban Offshore Ltd. (Chennai) . . . 180