INCOME TAX REPORTS (ITR)
Volume 349 Part 5 (Issue dated 17-12-2012)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Assessment --Limitation--Assessment on remand by Tribunal--Law applicable--Effect of insertion of sub-section (2A) in section 153 w. e. f. assessment year commencing on 1-4-1971--Order of remand on 5-7-1994--Order of assessment not passed within two years from end of financial year in which order of remand passed--Barred by limitation--Income-tax Act, 1961, s. 153(2A)-- Instruments and Control Co . v . Chief CIT (Guj) . . . 571
Business expenditure --Capital or revenue expenditure--Payment to employees under voluntary retirement scheme for periods prior to introduction of section 35DDA--Allowable--Income-tax Act, 1961, ss. 35DDA, 37(1)-- CIT v . O. E. N. India Ltd . (Ker) . . . 554
----Current repairs--Capital or revenue expenditure--Tests--Amount spent on providing wooden partition, painting of leased premises, carrying out repairs so as to make premises workable, to replace glasses--Revenue expenditure--Expenditure on electricity and civil works and interior decoration--Matter remanded to find out nature of expenditure--Income-tax Act, 1961, ss. 30, 37-- CIT v . H. P. Global Soft Ltd . (Karn) . . . 462
----Loss on account of foreign exchange difference--Tribunal relying on audited accounts and deleting disallowance--Justified--Legal and professional charges--Tribunal for determination and quantification considering the amount of past and other years--Not impermissible--Income-tax Act, 1961, s. 37--CIT v. Timken India Ltd. (Jharkhand) . . . 546
Capital or revenue expenditure --Payment of lease rent to NOIDA--Not for acquiring capital asset--Revenue expenditure-- CIT v . Perot Systems TSI India Ltd . (Delhi) . . . 563
Charitable purposes --Charitable trust--Condition precedent for exemption--Application of income for charitable purposes--Adjustment of expenditure of earlier year against income of current year--Amounts to application of income for charitable purpose--Trust entitled to exemption--Income-tax Act, 1961, s. 11-- CIT v . Gujrati Samaj (Regd.) (MP) . . . 559
----Depreciation--Charitable trust entitled to depreciation--Income-tax Act, 1961, ss. 11, 32-- CIT v . Gujrati Samaj (Regd.) (MP) . . . 559
Exemption --Export--Reimbursement of expenses incurred in obtaining ISO certification--Reimbursement relating to rent satellite charges, printing, stationery for sister concern of assessee--Corporate charges from sister concern--Assessee entitled to exemption--Income-tax Act, 1961, s. 10A-- CIT v . Perot Systems TSI India Ltd . (Delhi) . . . 563
Export --Special deduction under section 80HHC--Constitutional validity of provisions--Retrospective amendment of section 80HHC(3) by Taxation Laws (Second Amendment) Act, 2005--Amendment to get over decision of Tribunal--Not valid--Discrimination between cases which have become final and pending cases--Violative of article 14--Amendment prospective--Retrospectivity not valid--Income-tax Act, 1961, s. 80HHC--Constitution of India, art. 14-- Vijaya Silk House (Bangalore) Ltd . v. Union of India (Bom) . . . 566
Income --Bank--Excess cash retained for several years--Not shown to be payable to any person or liability due from bank to any person--Assessment of excess cash justified--Income-tax Act, 1961-- Catholic Syrian Bank Ltd . v. Addl. CIT (Ker) . . . 569
----Disallowance of expenditure in earning tax-free income--Non-maintenance of separate accounts in respect of expenditure on earning tax-free income prior to 1-4-2007--Disallowance of proportionate expenditure relating to tax-free income justified--Income-tax Act, 1961, s. 14A-- Catholic Syrian Bank Ltd . v. Addl. CIT (Ker) . . . 569
----Mutual association--Co-operative housing society--Premia received from members for carrying out construction or additional construction--Principle of mutuality applicable--Premia not taxable--Income-tax Act, 1961-- CIT v . Jai Hind CHS Ltd . (Bom) . . . 541
Interpretation of taxing statutes --Harmonious interpretation of provisions-- Emirates Shipping Line, FZE v. Assistant Director of Income-tax
(Delhi) . . . 493
Penalty --Concealment of income--Association of persons--Assessee filing nil return as profits distributed among members--Whether to assess association of persons or its members individually--Two views possible--Penalty cannot be imposed--Income-tax Act 1961, ss. 167B(2), 271(1)(c)-- CIT v. Pradeep Agencies Joint Venture (Delhi) . . . 477
----Failure to file annual information return regarding financial transactions--Delay in filing annual information return--No satisfactory explanation for late filing of annual return--Order levying penalty justified--Income-tax Act, 1961, s. 271FA-- State of Rajasthan v . Deputy CIT (CIB) (Raj) . . . 536
----Permanent account number--Obligation to quote permanent account number--Is on deductee and not on deductor--Wrong quoting of permanent account numbers by deductees to assessee--Mistake rectified and tax deducted deposited in time in Government--Commissioner (Appeals) and Tribunal deleting penalty on ground sufficient cause shown--Nothing to show that findings recorded erroneous in any manner--Penalty imposed on assessee cancelled--Income-tax Act, 1961, ss. 272B, 273B-- CIT (TDS) v . Superintendent of Police (P&H) . . . 550
Precedent --Effect of decision of Supreme Court in Union of India v. Azadi Bachao Andolan [2003] 263 ITR 706 (SC)-- Emirates Shipping Line, FZE v . Assistant Director of Income-tax (Delhi) . . . 493
Reassessment --Notice--Validity--No tangible material for belief that income had escaped assessment--Reassessment on ground different from reasons recorded in notice--Reassessment not valid--Income-tax Act, 1961, s. 147-- CIT v . ICICI Bank Ltd. (Bom) . . . 482
----Notice--Validity--Non-resident--Meaning of “liable to tax†--Non-resident not actually taxed in foreign country--Not assessable in India under DTAA--Reassessment proceedings to assess him--Not valid--Income-tax Act, 1961, s. 147, 148--Double Taxation Avoidance Agreement between India and the U. A. E.-- Emirates Shipping Line, FZE v . Assistant Director of Income-tax (Delhi) . . . 493
----Notice--Validity--Non-resident--Shipping--Order under section 172--No conflict between sections 172 and 147--Order under section 172 can be reopened--Income-tax Act, 1961, ss. 147, 148, 172-- Emirates Shipping Line, FZE v. Assistant Director of Income-tax (Delhi) . . . 493
----Object and scope of--Transferable development rights premium--Reassessment on ground expenses claimed not transfer fees and not allowable--Tribunal finding amount not taxable on principle of mutuality--Question of considering taxability in reassessment does not arise since assessee voluntarily offered amount for taxation--Matter remanded to Tribunal to consider only expenses claimed to have been incurred by assessee--Income-tax Act, 1961, ss. 147, 148-- CIT v . Jaihind Co-operative Housing Society Ltd . (Bom) . . . 537
Rectification of mistakes --Condition precedent--Mistake must be apparent from record--Business expenditure--Expenditure on advertisement in newspapers and sales promotion--Question whether newspapers were small and whether expenses were spent on sales promotion debatable--Rectification proceedings to disallow expenditure--Not valid--Delay in filing return--Computation of interest payable--Mistake in calculating period of interest--Reduction of advance tax paid after due date--Obvious mistakes which could be rectified--Income-tax Act, 1961, ss. 37(3A), 139(8), 154-- Kesharwani Zarda Bhandar v. CIT (All) . . . 519
Non-resident --Holding interest in tenancy rights in immovable property in India and shares in dormant Indian company owning immovable property--Gains from release of tenancy rights and sale of shares would be chargeable as capital gains in India--Double Taxation Avoidance Agreement between India and the Netherlands, art. 13(1), (4)-- Mrs. Punnika Parikh, In re . . . 533
----Taxability in India--Two contracts executed on same day, one for supply of machinery and the other for project service--Indivisible contract for supply, erection, commissioning and testing of project--Not a case of contract of sale of property and of services ancillary to sale of property--Consideration received under project service contract fees for technical services chargeable to tax in India--Income-tax Act, 1961, s. 195--Double Taxation Avoidance Agreement between India and the Netherlands, art. 12(5), (6)(a)-- HESS ACC Systems B. V. , In re . . . 529
ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))
Volume 20 : Part 5 (Issue dated : 17-12-2012)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Bad debt --Inter-corporate deposits written off--Direction to Assessing Officer to verify and decide under law--Matter remanded--Income-tax Act, 1961-- Torrent Power Ltd. v. Deputy CIT (Ahmedabad) . . . 653
Business expenditure --Commission paid to director--No contract for any services and no evidence of any services by director--Commission not deductible--Income-tax Act, 1961, s. 37-- Orient Longman P. Ltd. v. Joint CIT (Hyderabad) . . . 664
----Contribution for construction of Collector’s office at request of Collector and District Magistrate--Offer to exhibit assessee’s name at an appropriate place--Expenditure for purposes of business--Deductible--Income-tax Act, 1961, s. 37-- Torrent Power Ltd. v. Deputy CIT (Ahmedabad) . . . 653
Charitable purposes --Registration of charitable institution--Law applicable--Effect of amendment of section 2(15) w. e. f. 1-4-2008--Object of general public utility not charitable if it involves services in relation to business--Assessee promoting running as a fitness activity--Fees charged for organising marathons--Assessee entitled to registration if fees incidental to object of public utility--Matter remanded--Income-tax Act, 1961, ss. 2(15), 12AA-- Hyderabad Runners Society v. Director of Income-tax (Exemptions) (Hyderabad) . . .675
----Registration of trusts--Goshala--Commissioner--Scope of power--Limited to satisfaction about charitable nature of objects of trust and genuineness of activities of trust--Tribunal satisfied about charitable purpose of goshala run by trust in earlier appeal--Commissioner cannot deny registration in remand proceedings--Income-tax Act, 1961, ss. 2(15), 12A-- Sri Gomandir Seva Trust v. CIT (Cuttack) . . . 608
Evasion of tax --Sale of shareholding in wholly owned subsidiary company--Declaration of dividend by such subsidiary prior to sale--Subsidiary company having sufficient funds--Actual distribution of dividend and payment of dividend distribution tax--Declaration of dividend was a genuine transaction--Income-tax Act, 1961-- Assistant Director of Income-tax (International Taxation) v. Maersk Line UK Ltd. (Kolkata) . . . 643
Exemption --Profits of unit in special economic zone--Condition precedent for grant of deduction--Return must be filed before time allowed in section 139(1)--Condition mandatory--Income-tax Act, 1961, ss. 10A(1A), 139(1)-- Saffire Garments v. ITO [SB] (Rajkot) . . . 623
Income --Computation of income--Disallowance of expenditure relating to non-taxable income--Actual expenditure to be disallowed--Ad hoc disallowance not permissible--Income-tax Act, 1961, s. 14A-- Torrent Power Ltd. v. Deputy CIT (Ahmedabad) . . . 653
New industrial undertaking --Special deduction--Computation--Loss from business of power generation by windmill can be set off against profits from other businesses--Justified--Income-tax Act, 1961, s. 80-IA-- Deputy CIT v. V. B. Koujalgi (Bangalore) . . . 618
Obsolescence --Assessee carrying out business of generation and transmission of electricity--Loss on account of obsolete meters--Deductible--Income-tax Act, 1961-- Torrent Power Ltd. v. Deputy CIT (Ahmedabad) . . . 653
Penalty --Concealment of income--Best judgment assessment due to assessee’s non-co-operation in assessment proceedings--No evidence of concealment of income--Penalty cannot be imposed--Income-tax Act, 1961, s. 271(1)(c)-- ITO v. Sukhamrit Singh (Amritsar) . . . 636
----Concealment of income--Income-tax survey--Revised return surrendering additional income before examination under section 131--Notice under section 131 not indicating concealment of income--Penalty cannot be levied--Income-tax Act, 1961, s. 271(1)(c)-- Jaysukh M. Parmar v. Assistant CIT (Ahmedabad) . . . 687
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
S. 2(15) --Charitable purposes--Registration of charitable institution--Law applicable--Effect of amendment of section 2(15) w. e. f. 1-4-2008--Object of general public utility not charitable if it involves services in relation to business--Assessee promoting running as a fitness activity--Fees charged for organising marathons--Assessee entitled to registration if fees incidental to object of public utility--Matter remanded-- Hyderabad Runners Society v. Director of Income-tax (Exemptions) (Hyderabad) . . .675
----Charitable purposes--Registration of trusts--Goshala--Commissioner--Scope of power--Limited to satisfaction about charitable nature of objects of trust and genuineness of activities of trust--Tribunal satisfied about charitable purpose of goshala run by trust in earlier appeal--Commissioner cannot deny registration in remand proceedings-- Sri Gomandir Seva Trust v. CIT (Cuttack) . . . 608
S. 10A(1A) --Exemption--Profits of unit in special economic zone--Condition precedent for grant of deduction--Return must be filed before time allowed in section 139(1)--Condition mandatory-- Saffire Garments v. ITO [SB] (Rajkot) . . . 623
S. 12AA --Charitable purposes--Registration of charitable institution--Law applicable--Effect of amendment of section 2(15) w. e. f. 1-4-2008--Object of general public utility not charitable if it involves services in relation to business--Assessee promoting running as a fitness activity--Fees charged for organising marathons--Assessee entitled to registration if fees incidental to object of public utility--Matter remanded-- Hyderabad Runners Society v. Director of Income-tax (Exemptions) (Hyderabad) . . .675
----Charitable purposes--Registration of trusts--Goshala--Commissioner--Scope of power--Limited to satisfaction about charitable nature of objects of trust and genuineness of activities of trust--Tribunal satisfied about charitable purpose of goshala run by trust in earlier appeal--Commissioner cannot deny registration in remand proceedings-- Sri Gomandir Seva Trust v. CIT (Cuttack) . . . 608
S. 14A --Income--Computation of income--Disallowance of expenditure relating to non-taxable income--Actual expenditure to be disallowed--Ad hoc disallowance not permissible-- Torrent Power Ltd. v. Deputy CIT (Ahmedabad) . . . 653
S. 37 --Business expenditure--Commission paid to director--No contract for any services and no evidence of any services by director--Commission not deductible-- Orient Longman P. Ltd. v. Joint CIT (Hyderabad) . . . 664
----Business expenditure--Contribution for construction of Collector’s office at request of Collector and District Magistrate--Offer to exhibit assessee’s name at an appropriate place--Expenditure for purposes of business--Deductible-- Torrent Power Ltd. v. Deputy CIT (Ahmedabad) . . . 653
S. 80-IA --New industrial undertaking--Special deduction--Computation--Loss from business of power generation by windmill can be set off against profits from other businesses--Justified-- Deputy CIT v. V. B. Koujalgi (Bangalore) . . . 618
S. 139(1) --Exemption--Profits of unit in special economic zone--Condition precedent for grant of deduction--Return must be filed before time allowed in section 139(1)--Condition mandatory-- Saffire Garments v. ITO [SB] (Rajkot) . . . 623
S. 271(1)(c) --Penalty--Concealment of income--Best judgment assessment due to assessee’s non-co-operation in assessment proceedings--No evidence of concealment of income--Penalty cannot be imposed-- ITO v. Sukhamrit Singh (Amritsar) . . . 636
----Penalty--Concealment of income--Income-tax survey--Revised return surrendering additional income before examination under section 131--Notice under section 131 not indicating concealment of income--Penalty cannot be levied-- Jaysukh M. Parmar v. Assistant CIT (Ahmedabad) . . . 687
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