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Friday, January 20, 2012

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



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