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Wednesday, April 11, 2012

ITR VOL 342 PART 3 AND ITR (TRIB) VOL 14 PART 6


 

INCOME TAX REPORTS (ITR)

Volume 342 : Part 3 (Issue dated 2-4-2012)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Business expenditure --Disallowance--Travel expenses of employees--Effect of rule 6D--Disallowance to be calculated with respect to each journey undertaken--Income-tax Act, 1961, s. 37--Income-tax Rules, 1962, r. 6D-- CIT v. SRF Ltd. (Delhi) . . . 106

----Interest for delayed payment of sales tax--To be allowed--Income-tax Act, 1961, ss. 37, 43B--Himachal Pradesh General Sales Tax Act, 1968, s. 17A-- Shankar Trading Co. P. Ltd. v. CIT (Delhi) . . . 81

Capital gains --Transfer--Company--Scheme of arrangement or compromise--Sanction of court--Demerger--Scheme providing for transfer of assets to transferee company without consideration--Not a demerger but a gift--Amalgamation of transferee company with another company proposed after demerger--Not a case of restructuring within same group--Transaction intended solely to avoid income-tax, stamp duty and value added tax--Transferee company a paper company with nominal share capital but to hold assets worth crores of rupees after sanction of scheme--Scheme not to be sanctioned--Companies Act, 1956, ss. 391 to 394--Income-tax Act, 1961, ss. 45, 47(iii)--Bombay Stamp Act, 1958, Sch., art. 20(d)-- Vodafone Essar Gujarat Ltd ., In re(Guj) . . . 135

Company --Book profits--Computation--Effect of clause (i) of Explanation to section 115J(1A)--Amount withdrawn from revaluation reserve--Reserves not reflected in profit and loss account--Amount could not be reduced from book profits--Income-tax Act, 1961, s. 115J-- CIT v. SRF Ltd . (Delhi) . . . 106

Industrial undertaking --Special deduction--Condition prece-dent--Lawful commencement of manufacturing activity on or before 31-3-2004--Licence under Factories Act--Essential for commencing manufacturing activity--Failure to obtain licence or apply for licence prior to 31-3-2004--Assessee not entitled to deduction--Licence applied for prior to that date but obtained thereafter--Assessee entitled to deduction but licence not to relate back to date of application--Income-tax Act, 1961, s. 80-IB(4)--Factories Act, 1948, ss. 6, 7, 92, 112--Goa, Daman and Diu Factories Rules, 1985, rr. 3, 4, 5, 6, 7, 9-- CIT v. Jolly Polymers (Guj) . . . 87

Memorandum of association --Board of directors--Ultra vires act--Resolution of demerger passed at time when power not given in memorandum--Cannot be ratified by shareholders-- Vodafone Essar Gujarat Ltd. , In re (Guj) . . . 135

Reassessment --Notice--Issue regarding deduction under section 80-IA--Assessing Officer examining and considering during original assessment--No deliberate failure or omission by assessee to disclose material facts--Notice to be quashed--Income-tax Act, 1961, ss. 80-IA, 147, 148-- RRB Consultants and Engineers P. Ltd . v. Deputy CIT (Delhi) . . . 127

Scheme of arrangement or compromise --Scope of provisions--Restructuring not an arrangement contemplated in provision--Reconstruction--Must be in connection with arrangement--Gift not an arrangement--Companies Act, 1956, ss. 391 to 394-- Vodafone Essar Gujarat Ltd. , In re (Guj) . . . 135

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Bombay Stamp Act, 1958 :

Sch., art. 20(d) --Capital gains--Transfer--Company--Scheme of arrangement or compromise--Sanction of court--Demerger--Scheme providing for transfer of assets to transferee company without consideration--Not a demerger but a gift--Amalgamation of transferee company with another company proposed after demerger--Not a case of restructuring within same group--Transaction intended solely to avoid income-tax, stamp duty and value added tax--Transferee company a paper company with nominal share capital but to hold assets worth crores of rupees after sanction of scheme--Scheme not to be sanctioned-- Vodafone Essar Gujarat Ltd ., In re (Guj) . . . 135

Companies Act, 1956 :

Ss. 391 to 394 --Capital gains--Transfer--Company--Scheme of arrangement or compromise--Sanction of court--Demerger--Scheme providing for transfer of assets to transferee company without consideration--Not a demerger but a gift--Amalgamation of transferee company with another company proposed after demerger--Not a case of restructuring within same group--Transaction intended solely to avoid income-tax, stamp duty and value added tax--Transferee company a paper company with nominal share capital but to hold assets worth crores of rupees after sanction of scheme--Scheme not to be sanctioned-- Vodafone Essar Gujarat Ltd ., In re (Guj) . . . 135

----Scheme of arrangement or compromise--Scope of provisions--Restructuring not an arrangement contemplated in provision--Reconstruction--Must be in connection with arrangement--Gift not an arrangement-- Vodafone Essar Gujarat Ltd. , In re(Guj) . . . 135

Factories Act, 1948 :

Ss. 6, 7, 92, 112 --Industrial undertaking--Special deduction--Condition prece-dent--Lawful commencement of manufacturing activity on or before 31-3-2004--Licence under Factories Act--Essential for commencing manufacturing activity--Failure to obtain licence or apply for licence prior to 31-3-2004--Assessee not entitled to deduction--Licence applied for prior to that date but obtained thereafter--Assessee entitled to deduction but licence not to relate back to date of application-- CIT v. Jolly Polymers  (Guj) . . . 87

Goa, Daman and Diu Factories Rules, 1985 :

Rr. 3, 4, 5, 6, 7, 9 --Industrial undertaking--Special deduction--Condition prece-dent--Lawful commencement of manufacturing activity on or before 31-3-2004--Licence under Factories Act--Essential for commencing manufacturing activity--Failure to obtain licence or apply for licence prior to 31-3-2004--Assessee not entitled to deduction--Licence applied for prior to that date but obtained thereafter--Assessee entitled to deduction but licence not to relate back to date of application-- CIT v. Jolly Polymers (Guj) . . . 87

Himachal Pradesh General Sales Tax Act, 1968 :

S. 17A --Business expenditure--Interest for delayed payment of sales tax--To be allowed-- Shankar Trading Co. P. Ltd. v. CIT (Delhi) . . . 81

Income-tax Act, 1961 :

S. 37 --Business expenditure--Disallowance--Travel expenses of employees--Effect of rule 6D--Disallowance to be calculated with respect to each journey undertaken-- CIT v. SRF Ltd. (Delhi) . . . 106

----Business expenditure--Interest for delayed payment of sales tax--To be allowed-- Shankar Trading Co. P. Ltd. v. CIT (Delhi) . . . 81

S. 43B --Business expenditure--Interest for delayed payment of sales tax--To be allowed-- Shankar Trading Co. P. Ltd. v. CIT (Delhi) . . . 81

S. 45 --Capital gains--Transfer--Company--Scheme of arrangement or compromise--Sanction of court--Demerger--Scheme providing for transfer of assets to transferee company without consideration--Not a demerger but a gift--Amalgamation of transferee company with another company proposed after demerger--Not a case of restructuring within same group--Transaction intended solely to avoid income-tax, stamp duty and value added tax--Transferee company a paper company with nominal share capital but to hold assets worth crores of rupees after sanction of scheme--Scheme not to be sanctioned-- Vodafone Essar Gujarat Ltd ., In re (Guj) . . . 135

S. 47(iii) --Capital gains--Transfer--Company--Scheme of arrangement or compromise--Sanction of court--Demerger--Scheme providing for transfer of assets to transferee company without consideration--Not a demerger but a gift--Amalgamation of transferee company with another company proposed after demerger--Not a case of restructuring within same group--Transaction intended solely to avoid income-tax, stamp duty and value added tax--Transferee company a paper company with nominal share capital but to hold assets worth crores of rupees after sanction of scheme--Scheme not to be sanctioned-- Vodafone Essar Gujarat Ltd ., In re (Guj) . . . 135

S. 80-IA --Reassessment--Notice--Issue regarding deduction under section 80-IA--Assessing Officer examining and considering during original assessment--No deliberate failure or omission by assessee to disclose material facts--Notice to be quashed-- RRB Consultants and Engineers P. Ltd . v. Deputy CIT (Delhi) . . . 127

S. 80-IB(4) --Industrial undertaking--Special deduction--Condition prece-dent--Lawful commencement of manufacturing activity on or before 31-3-2004--Licence under Factories Act--Essential for commencing manufacturing activity--Failure to obtain licence or apply for licence prior to 31-3-2004--Assessee not entitled to deduction--Licence applied for prior to that date but obtained thereafter--Assessee entitled to deduction but licence not to relate back to date of application-- CIT v. Jolly Polymers  (Guj) . . . 87

S. 115J --Company--Book profits--Computation--Effect of clause (i) of Explanation to section 115J(1A)--Amount withdrawn from revaluation reserve--Reserves not reflected in profit and loss account--Amount could not be reduced from book profits-- CIT v. SRF Ltd . (Delhi) . . . 106

S. 147 --Reassessment--Notice--Issue regarding deduction under section 80-IA--Assessing Officer examining and considering during original assessment--No deliberate failure or omission by assessee to disclose material facts--Notice to be quashed-- RRB Consultants and Engineers P. Ltd . v. Deputy CIT (Delhi) . . . 127

S. 148 --Reassessment--Notice--Issue regarding deduction under section 80-IA--Assessing Officer examining and considering during original assessment--No deliberate failure or omission by assessee to disclose material facts--Notice to be quashed-- RRB Consultants and Engineers P. Ltd . v. Deputy CIT (Delhi) . . . 127

Income-tax Rules, 1962 :

R. 6D --Business expenditure--Disallowance--Travel expenses of employees--Effect of rule 6D--Disallowance to be calculated with respect to each journey undertaken-- CIT v. SRF Ltd. (Delhi) . . . 106

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

Volume 14 : Part 6 (Issue dated : 26-3-2012)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Business expenditure --Disallowance of expenditure relating to exempt income--Interest on tax free bonds--Expenditure to be restricted to one per cent.--Income-tax Act, 1961, ss. 10(15), 14A-- Asst. CIT v. National Stock Exchange of India Ltd. (Mumbai) . . . 583

----Lease premium--To be disallowed--Income-tax Act, 1961-- Asst. CIT v. National Stock Exchange of India Ltd. (Mumbai) . . . 583

----Prior-period expenses--Assessee following mercantile method--Finding that liability arose in preceding year--To be disallowed--Income-tax Act, 1961-- Asst. CIT v. National Stock Exchange of India Ltd. (Mumbai) . . . 583

Business income or income from house property --Licence fee--Letting out of plant and building--Finding that letting out was temporary arrangement to overcome financial crisis--Income assessable as business income--Income-tax Act, 1961, ss. 22, 28-- Asst. CIT v. S & S Industries Enterprises Ltd. (Chennai) . . . 574

Capital gains --Transfer--Must be of existing asset--Joint venture agreement between assessee and developer contemplating development of commercial complex on land contributed by assessee--Developer's interest protected by allotment of 50 per cent. of shares in assessee upon completion of project--Project yet to commence--No asset existing for transfer in year in question--No capital gains arise--Income-tax Act, 1961, ss. 2(47), 45-- Vijaya Productions P. Ltd. v. Addl. CIT (Chennai) . . . 614

Capital or revenue expenditure --Stock exchange--Expenditure on VSAT installation charges, repairs and replacement--Is revenue expenditure--Income-tax Act, 1961-- Asst. CIT v. National Stock Exchange of India Ltd. (Mumbai) . . . 583

Depreciation --Computer software--To be allowed at 25 per cent.--Income-tax Act, 1961, s. 32-- Asst. CIT v. National Stock Exchange of India Ltd. (Mumbai) . . . 583

----Computer--Disallowance on ground that system used for less than 180 days--Trial period to be included--Assessee entitled to full depreciation--Income-tax Act, 1961, s. 32-- Asst. CIT v. National Stock Exchange of India Ltd. (Mumbai) . . . 583

----Stock exchange--Network equipment located in premises of assessee and VSAT antenna and coding equipment located in member's premises--Assessee entitled to full depreciation--Income-tax Act, 1961-- Asst. CIT v. National Stock Exchange of India Ltd. (Mumbai) . . . 583

Penalty --Search and seizure--Assessee making payment within permissible time upon receiving notice under section 156--Penalty cannot be imposed--Income-tax Act, 1961, s. 271AAA-- Deputy CIT v. Pioneer Marbles and Interiors P. Ltd. (Kolkata) . . . 608

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961 :

S. 2(47) --Capital gains--Transfer--Must be of existing asset--Joint venture agreement between assessee and developer contemplating development of commercial complex on land contributed by assessee--Developer's interest protected by allotment of 50 per cent. of shares in assessee upon completion of project--Project yet to commence--No asset existing for transfer in year in question--No capital gains arise-- Vijaya Productions P. Ltd. v. Addl. CIT (Chennai) . . . 614

S. 10(15) --Business expenditure--Disallowance of expenditure relating to exempt income--Interest on tax free bonds--Expenditure to be restricted to one per cent.-- Asst. CIT v. National Stock Exchange of India Ltd. (Mumbai) . . . 583

S. 14A --Business expenditure--Disallowance of expenditure relating to exempt income--Interest on tax free bonds--Expenditure to be restricted to one per cent.-- Asst. CIT v. National Stock Exchange of India Ltd. (Mumbai) . . . 583

S. 22 --Business income or income from house property--Licence fee--Letting out of plant and building--Finding that letting out was temporary arrangement to overcome financial crisis--Income assessable as business income-- Asst. CIT v. S & S Industries Enterprises Ltd. (Chennai) . . . 574

S. 28 --Business income or income from house property--Licence fee--Letting out of plant and building--Finding that letting out was temporary arrangement to overcome financial crisis--Income assessable as business income-- Asst. CIT v. S & S Industries Enterprises Ltd. (Chennai) . . . 574

S. 32 --Depreciation--Computer software--To be allowed at 25 per cent.-- Asst. CIT v. National Stock Exchange of India Ltd. (Mumbai) . . . 583

----Depreciation--Computer--Disallowance on ground that system used for less than 180 days--Trial period to be included--Assessee entitled to full depreciation-- Asst. CIT v. National Stock Exchange of India Ltd. (Mumbai) . . . 583

S. 45 --Capital gains--Transfer--Must be of existing asset--Joint venture agreement between assessee and developer contemplating development of commercial complex on land contributed by assessee--Developer's interest protected by allotment of 50 per cent. of shares in assessee upon completion of project--Project yet to commence--No asset existing for transfer in year in question--No capital gains arise-- Vijaya Productions P. Ltd. v. Addl. CIT (Chennai) . . . 614

S. 271AAA --Penalty--Search and seizure--Assessee making payment within permissible time upon receiving notice under section 156--Penalty cannot be imposed-- Deputy CIT v. Pioneer Marbles and Interiors P. Ltd. (Kolkata) . . . 608




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