ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))
Volume 18 : Part 5 (Issue dated : 17-09-2012)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Appeal to Appellate Tribunal --Power to admit new plea--Assessing Officer bringing sum to tax as receipt for entering into negative covenant--Question whether payment taxable as normal business income--All facts before Tribunal--New plea purely legal and can be entertained--Income-tax Act, 1961, s. 28(va)-- Control and Switchgear Contractors Ltd. v. Deputy CIT (Delhi) . . . 520
----Powers of Tribunal--Notice--Refusal of notice by illiterate employee of assessee--Application to recall ex parte order passed by Tribunal--Principles of natural justice applicable--Ex parte order to be recalled--Income-tax Act, 1961, s. 254(2)-- Sudesh Pandey v. ITO (Indore) . . . 560
Capital gains --Loss on sale of shares--Not to be set off against capital gains--Income-tax Act, 1961-- Assistant CIT v. Lanco Infratech Ltd. (Hyderabad) . . . 579
Capital or revenue receipt --Assessee carrying on business in joint venture with foreign company--Foreign company incorporating new subsidiary in competition with assessee--Settlement entered into by foreign company to settle all legal disputes between parties--Payment under settlement--Not a payment for loss of source of income or for entering into negative covenants--No transfer of any right--Receipt is business income--Income-tax Act, 1961, ss. 28, 54EC-- Control and Switchgear Contractors Ltd. v. Deputy CIT (Delhi) . . . 520
Cash credit --Shares issued at premium and bought back by directors at discount--Finding that Assessing Officer failed to make enquiry about details of transactions--Matter remanded-- Income-tax Act, 1961, s. 68-- Righill Electricals P. Ltd. v. Assistant CIT (Indore) . . . 659
Deduction of tax at source --Failure to deduct--Treatment as assessee-in-default under section 201--Contention that recipient paid tax on income embedded in these payments--Assessing Officer to verify--Matter remanded--Income-tax Act, 1961, s. 201(1)-- Ramakrishna Vedantha Math v. ITO (Kolkata) . . . 603
Depreciation --Windmill--Higher rate of depreciation--Option exercised by assessee before due date for filing return by claiming higher rate of depreciation in return with audit report--Commissioner (Appeals) justified in directing Assessing Officer to allow higher depreciation--Income-tax Act, 1961, s. 32 --Income-tax Rules, 1962, r. 5, Appx I-- Assistant CIT v. P. ORR and Sons P. Ltd. (Chennai) . . . 565
Dividend --Deemed dividend--Share application money--No evidence to show that entries recorded in books of account false or without basis--Cannot be treated as loans or advances--Not taxable as deemed dividend--Income-tax Act, 1961, s. 2(22)(e)-- ITO v. Direct Information P. Ltd. (Mumbai) . . . 562
Exemption --Dividend--Claim to exemption on dividend received from investment in group company--Disallowance of interest paid to group company on loan--Not to be disallowed--Income-tax Act, 1961, s. 14A-- Assistant CIT v. Lanco Infratech Ltd. (Hyderabad) . . . 579
Housing project --Special deduction under section 80-IB--Agreement between owner of land and assessee--Assessee responsible for developing and building on property--Completion certificate of building given by local authority--Assessee entitled to special deduction under section 80-IB--Some residential units exceeding 1500 square feet--Proportionate deduction to be given--Income-tax Act, 1961, s. 80-IB-- Sanghvi and Doshi Enterprise v. ITO (Chennai) . . . 608
----Special deduction under section 80-IB--Conditions precedent--Undertaking should develop land and build houses--Completion certificate from local authority--Transfer of share in undivided land to prospective buyers of flats--Not an evidence that assessee was a works contractor--Corporation of Chennai is a local authority for purposes of section 80-IB--High profits from project--Not a ground for denying special deduction--Assessee entitled to special deduction under section 80-IB--Income-tax Act, 1961, s. 80-IB-- Deputy CIT v. Arihant Foundations and Housing Ltd. (Chennai) . . . 588
Income --Computation of income--Disallowance of expenditure relating to exempt income--Dividend--Expenditure on application for shares--Disallowance of part of expenditure--Justified--Income-tax Act, 1961, s. 14A-- Deputy CIT v. Arihant Foundations and Housing Ltd. (Chennai) . . . 588
Industrial undertaking --Special deduction--Direction to consider profitability of undertaking after opportunity to assessee of being heard--Matter remanded--Income-tax Act, 1961, s. 80-IA-- Assistant CIT v. Lanco Infratech Ltd. (Hyderabad) . . . 579
----Special deduction--Small scale industry--Investment in fixed assets in plant and machinery exceeding prescribed limit--Not entitled to deduction under section 80-IB--Income-tax Act, 1961, s. 80-IB--Industries (Development and Regulations) Act, 1951, s. 11B-- Sawaria Pipes P. Ltd. v. Assistant CIT (Hyderabad) . . . 573
Precedent --Tribunal must follow law laid down by High Court of different state if there is no contrary decision of any other High Court-- Sanghvi and Doshi Enterprise v. ITO (Chennai) . . . 608
Reassessment --Notice--Statement of director that shares issued at premium and bought back at discount--Reason to believe that income has escaped assessment--Reassessment valid--Income-tax Act, 1961, s. 147-- Righill Electricals P. Ltd. v. Assistant CIT (Indore) . . . 659
----Reason to believe--Original assessment made under section 143(1)--Reassessment permissible--Income-tax Act, 1961, ss. 143(1), (3), 147-- Control and Switchgear Contractors Ltd. v. Deputy CIT (Delhi) . . . 520
Return of income --Delay in filing return--Interest--Not in nature of penalty but to compensate revenue for non-deposit of tax by due date--Income-tax Act, 1961, s. 234A-- Epari Sadasiva Rao (HUF) v. Assistant CIT (Cuttack) . . . 569
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
S. 2(22)(e) --Dividend--Deemed dividend--Share application money--No evidence to show that entries recorded in books of account false or without basis--Cannot be treated as loans or advances--Not taxable as deemed dividend-- ITO v. Direct Information P. Ltd. (Mumbai) . . . 562
S. 14A --Exemption--Dividend--Claim to exemption on dividend received from investment in group company--Disallowance of interest paid to group company on loan--Not to be disallowed-- Assistant CIT v. Lanco Infratech Ltd. (Hyderabad) . . . 579
----Income--Computation of income--Disallowance of expenditure relating to exempt income--Dividend--Expenditure on application for shares--Disallowance of part of expenditure--Justified-- Deputy CIT v. Arihant Foundations and Housing Ltd. (Chennai) . . . 588
S. 28 --Capital or revenue receipt--Assessee carrying on business in joint venture with foreign company--Foreign company incorporating new subsidiary in competition with assessee--Settlement entered into by foreign company to settle all legal disputes between parties--Payment under settlement--Not a payment for loss of source of income or for entering into negative covenants--No transfer of any right--Receipt is business income-- Control and Switchgear Contractors Ltd. v. Deputy CIT (Delhi) . . . 520
S. 28(va) --Appeal to Appellate Tribunal--Power to admit new plea--Assessing Officer bringing sum to tax as receipt for entering into negative covenant--Question whether payment taxable as normal business income--All facts before Tribunal--New plea purely legal and can be entertained-- Control and Switchgear Contractors Ltd. v. Deputy CIT (Delhi) . . . 520
S. 32 --Depreciation--Windmill--Higher rate of depreciation--Option exercised by assessee before due date for filing return by claiming higher rate of depreciation in return with audit report--Commissioner (Appeals) justified in directing Assessing Officer to allow higher depreciation-- Assistant CIT v. P. ORR and Sons P. Ltd. (Chennai) . . . 565
S. 54EC --Capital or revenue receipt--Assessee carrying on business in joint venture with foreign company--Foreign company incorporating new subsidiary in competition with assessee--Settlement entered into by foreign company to settle all legal disputes between parties--Payment under settlement--Not a payment for loss of source of income or for entering into negative covenants--No transfer of any right--Receipt is business income-- Control and Switchgear Contractors Ltd. v. Deputy CIT (Delhi) . . . 520
S. 68 --Cash credit--Shares issued at premium and bought back by directors at discount--Finding that Assessing Officer failed to make enquiry about details of transactions--Matter remanded-- Righill Electricals P. Ltd. v. Assistant CIT (Indore) . . . 659
S. 80-IA --Industrial undertaking--Special deduction--Direction to consider profitability of undertaking after opportunity to assessee of being heard--Matter remanded-- Assistant CIT v. Lanco Infratech Ltd. (Hyderabad) . . . 579
S. 80-IB --Housing project--Special deduction under section 80-IB--Agreement between owner of land and assessee--Assessee responsible for developing and building on property--Completion certificate of building given by local authority--Assessee entitled to special deduction under section 80-IB--Some residential units exceeding 1500 square feet--Proportionate deduction to be given-- Sanghvi and Doshi Enterprise v. ITO (Chennai) . . . 608
----Housing project--Special deduction under section 80-IB--Conditions precedent--Undertaking should develop land and build houses--Completion certificate from local authority--Transfer of share in undivided land to prospective buyers of flats--Not an evidence that assessee was a works contractor--Corporation of Chennai is a local authority for purposes of section 80-IB--High profits from project--Not a ground for denying special deduction--Assessee entitled to special deduction under section 80-IB-- Deputy CIT v. Arihant Foundations and Housing Ltd. (Chennai) . . . 588
----Industrial undertaking--Special deduction--Small scale industry--Investment in fixed assets in plant and machinery exceeding prescribed limit--Not entitled to deduction under section 80-IB-- Sawaria Pipes P. Ltd. v. Assistant CIT (Hyderabad) . . . 573
S. 143(1), (3) --Reassessment--Reason to believe--Original assessment made under section 143(1)--Reassessment permissible-- Control and Switchgear Contractors Ltd. v. Deputy CIT (Delhi) . . . 520
S. 147 --Reassessment--Notice--Statement of director that shares issued at premium and bought back at discount--Reason to believe that income has escaped assessment--Reassessment--Valid-- Righill Electricals P. Ltd. v. Assistant CIT (Indore) . . . 659
----Reassessment--Reason to believe--Original assessment made under section 143(1)--Reassessment permissible-- Control and Switchgear Contractors Ltd. v. Deputy CIT (Delhi) . . . 520
S. 201(1) --Deduction of tax at source--Failure to deduct--Treatment as assessee-in-default under section 201--Contention that recipient paid tax on income embedded in these payments--Assessing Officer to verify--Matter remanded-- Ramakrishna Vedantha Math v. ITO (Kolkata) . . . 603
S. 234A --Return of income--Delay in filing return--Interest--Not in nature of penalty but to compensate revenue for non-deposit of tax by due date-- Epari Sadasiva Rao (HUF) v. Assistant CIT (Cuttack) . . . 569
S. 254(2) --Appeal to Appellate Tribunal--Powers of Tribunal--Notice--Refusal of notice by illiterate employee of assessee--Application to recall ex parte order passed by Tribunal--Principles of natural justice applicable--Ex parte order to be recalled-- Sudesh Pandey v. ITO (Indore) . . . 560
R. 5, Appx I --Depreciation--Windmill--Higher rate of depreciation--Option exercised by assessee before due date for filing return by claiming higher rate of depreciation in return with audit report--Commissioner (Appeals) justified in directing Assessing Officer to allow higher depreciation-- Assistant CIT v. P. ORR and Sons P. Ltd. (Chennai) . . . 565
Industries (Development and Regulations) Act, 1951 :
S. 11B --Industrial undertaking--Special deduction--Small scale industry--Investment in fixed assets in plant and machinery exceeding prescribed limit--Not entitled to deduction under section 80-IB-- Sawaria Pipes P. Ltd. v. Assistant CIT (Hyderabad) . . . 573
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