INCOME TAX REPORTS (ITR)
Volume 350 Part 3 (Issue dated 21-1-2013)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Appeal to High Court --Monetary limits for appeals by Department--Cases where tax effect below limit specified but having cascading effect--Circular not to be automatically applied--Income-tax Act, 1961, s. 260A-- CIT v . Surya Herbal Ltd . . . . 300
Appeals to High Court and Supreme Court --Income-tax Department--Delay in filing appeal and special leave petitions--Action to be taken to avoid--Income-tax Act, 1961, s. 260A--Constitution of India, art. 136-- DIT (International Taxation) v . Citi Bank N. A . . . . 302
Business expenditure --Interest on borrowed capital--Sugar plant and ferro-alloys plant--Finding of unity of control and management--Finding of fact--Same business--Interest allowable--Income-tax Act, 1961, s. 36(1)(iii)-- CIT v. Monnet Industries Ltd.
. . . 304
----Sum paid to trust for purchase of land for school where children of assessee’s employees to get preference in admission--Whether allowable as business expenditure or affected by section 40A(9)--Whether donations eligible for deduction under section 80G--Reimbursement different from contribution--Matter remanded to Tribunal--Income-tax Act, 1961, ss. 37, 40A(9), 80G-- Kennametal India Ltd . v . CIT
. . . 209
Appeal to High Court --Circulars/Instructions--Competency of appeal--Instruction No. 3 of 2011 fixing monetary limit in case of appeal filed by Revenue--Monetary limit applicable to pending cases--Instruction No. 3 of 2011, dated 9-2-2011--Income-tax Act, 1961, ss. 260A, 268A-- CIT v. Smt. Vijaya V. Kavekar (Bom) . . . 237
Business expenditure --Commission for providing expertise in preparation and procurement of tender floated by public sector organisation--Not allowable--Income-tax Act, 1961, s. 37(1)-- Standipack Pvt. Ltd . v . CIT (Cal) . . . 251
----Disallowance--Payments in cash exceeding prescribed limit--Assessee purchasing goods and depositing amount in bank account of seller--No disallowance in hands of assessee--Income-tax Rules, 1962, r. 6DD--Income-tax Act, 1961, s. 40A(3)-- CIT v . Smt. Shelly Passi (P&H) . . . 227
----Overseas computer education expenses--Principal business of assessee not computer operation--Trainee securing admission for course in foreign university before being appointed--Sponsorship of trainee for education abroad not for purpose of business of assessee--Expenses not allowable--Income-tax Act, 1961, s. 37(1)-- Standipack Pvt. Ltd . v. CIT (Cal) . . . 251
Depreciation --Rate of depreciation--Higher rate--Commercial vehicles--Meaning of commercial vehicles--Tippers, vibrators and vibrator soil compactors--Commercial vehicles entitled to higher rate of depreciation--Income-tax Act, 1961, s. 32-- CIT v . Rakesh Jain (P&H) . . . 230
Export --Special deduction--Profits of the business--Formula for computation--Amendment with effect from assessment year 1992-93--Law applicable--Interest from money-lending--Not excludible for purpose of applying formula for computing export profits for earlier year--Income-tax Act, 1961, ss. 80AB, 80HHC(3)-- CIT v. Anil Chanana (Delhi) . . . 247
Loss --Carry forward and set off--Speculation business--Condition precedent--Short-term capital loss--Purchase of shares as investment not business of purchase and sale of shares--Disallowance of short-term capital loss--Not justified--Income-tax Act, 1961, s. 73, Expln. -- Standipack Pvt. Ltd . v. CIT (Cal) . . . 251
Precedent --Effect of decision of Supreme Court in Asst. CIT v. Rajesh Jhaveri Stock Brokers P. Ltd . [2007] 291 ITR 500-- D. T. T. D. C. Ltd. v. Deputy CIT
(Delhi) . . . 216
Reassessment --Notice--Assessment order dealing with question of grant of exemption under section 10B and allowing deduction--Reopening on ground of irregular deduction--Mere change of opinion--Notice not valid--Income-tax Act, 1961, ss. 147, 148-- Metal Alloys Corporation v . Asst. CIT (Guj) . . . 245
----Notice--Royalty--Assessee furnishing primary facts--Assessing Officer to draw appropriate inference--Audit objection that royalty payment resulted in capital benefit--Opinion by audit cannot constitute tangible material--Reassessment not valid--Income-tax Act, 1961, ss. 147, 148-- Xerox Modicorp Ltd . v . Deputy CIT (Delhi) . . . 308
----Notice--Validity--No notice under section 143(2)--Assessing Officer has power to issue notice of reassessment--Income-tax Act, 1961, ss. 143, 147, 148-- D. T. T. D. C. Ltd. v. Deputy CIT (Delhi) . . . 216
----Notice--Validity--Original assessment granting exemption of interest from bonds after examining claim in detail--Reopening on ground exemption wrongly granted--Reopening of assessment of same claims on basis of same material--Change of opinion--Not permissible--Income-tax Act, 1961, ss. 147, 148-- Gujarat Power Corporation Ltd . v. Asst. CIT (Guj) . . . 266
Recovery of tax --Interest--Waiver of interest--Attachment of entire properties of assessee--Entire liabilities subsequently satisfied by appropriation of compensation--Case of genuine hardship--Authorities to reconsider waiver application--Income-tax Act, 1961, s. 220(2A)-- Anto Nitto v . CIT (Ker) . . . 305
Search and seizure --Block assessment--Assessment of third person--Conditions precedent--Satisfaction of Assessing Officer of person against whom search conducted to Assessing Officer of third person that any undisclosed income belongs to such person--Block assessment made without such satisfaction invalid--Income-tax Act, 1961, ss. 158BC, 158BD-- CIT v . Intercontinental Trading and Investment Co. Ltd .
(Delhi) . . . 316
Unexplained income --Share application money--Assessee producing relevant evidence and establishing that all share applicants not fictitious persons--Addition rightly deleted--Income-tax Act, 1961, s. 69-- CIT v . Misra Preservers (P.) Ltd .
(All) . . . 222
----Share application money--Assessee producing returns filed by relevant applicant shareholders and also producing confirmation of shareholders--Burden of proving source of share application money discharged--Additions to be deleted--Income-tax Act, 1961, s. 68-- CIT v . Jay Dee Securities and Finance Ltd . (All) . . . 220
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Art. 136 --Appeals to High Court and Supreme Court--Income-tax Department--Delay in filing appeal and special leave petitions--Action to be taken to avoid-- DIT (International Taxation) v. Citi Bank N. A . (SC) . . . 302
S. 32 --Depreciation--Rate of depreciation--Higher rate--Commercial vehicles--Meaning of commercial vehicles--Tippers, vibrators and vibrator soil compactors--Commercial vehicles entitled to higher rate of depreciation-- CIT v . Rakesh Jain
(P&H) . . . 230
S. 36(1)(iii) --Business expenditure--Interest on borrowed capital--Sugar plant and ferro-alloys plant--Finding of unity of control and management--Finding of fact--Same business--Interest allowable-- CIT v . Monnet Industries Ltd . (SC) . . . 304
S. 37 --Business expenditure--Sum paid to trust for purchase of land for school where children of assessee’s employees to get preference in admission--Whether allowable as business expenditure or affected by section 40A(9)--Whether donations eligible for deduction under section 80G--Reimbursement different from contribution--Matter remanded to Tribunal-- Kennametal India Ltd . v . CIT (SC) . . . 209
S. 37(1) --Business expenditure--Commission for providing expertise in preparation and procurement of tender floated by public sector organisation--Not allowable-- Standipack Pvt. Ltd . v . CIT (Cal) . . . 251
----Business expenditure--Overseas computer education expenses--Principal business of assessee not computer operation--Trainee securing admission for course in foreign university before being appointed--Sponsorship of trainee for education abroad not for purpose of business of assessee--Expenses not allowable-- Standipack Pvt. Ltd . v. CIT (Cal) . . . 251
S. 40A(3) --Business expenditure--Disallowance--Payments in cash exceeding prescribed limit--Assessee purchasing goods and depositing amount in bank account of seller--No disallowance in hands of assessee-- CIT v . Smt. Shelly Passi
(P&H) . . . 227
S. 40A(9) --Business expenditure--Sum paid to trust for purchase of land for school where children of assessee’s employees to get preference in admission--Whether allowable as business expenditure or affected by section 40A(9)--Whether donations eligible for deduction under section 80G--Reimbursement different from contribution--Matter remanded to Tribunal-- Kennametal India Ltd . v . CIT (SC) . . . 209
S. 68 --Unexplained income--Share application money--Assessee producing returns filed by relevant applicant shareholders and also producing confirmation of shareholders--Burden of proving source of share application money discharged--Additions to be deleted-- CIT v . Jay Dee Securities and Finance Ltd . (All) . . . 220
S. 69 --Unexplained income--Share application money--Assessee producing relevant evidence and establishing that all share applicants not fictitious persons--Addition rightly deleted-- CIT v . Misra Preservers (P.) Ltd . (All) . . . 222
S. 73, Expln. --Loss--Carry forward and set off--Speculation business--Condition precedent--Short-term capital loss--Purchase of shares as investment not business of purchase and sale of shares--Disallowance of short-term capital loss--Not justified-- Standipack Pvt. Ltd . v. CIT (Cal) . . . 251
S. 80AB --Export--Special deduction--Profits of the business--Formula for computation--Amendment with effect from assessment year 1992-93--Law applicable--Interest from money-lending--Not excludible for purpose of applying formula for computing export profits for earlier year-- CIT v. Anil Chanana (Delhi) . . . 247
S. 80G --Business expenditure--Sum paid to trust for purchase of land for school where children of assessee’s employees to get preference in admission--Whether allowable as business expenditure or affected by section 40A(9)--Whether donations eligible for deduction under section 80G--Reimbursement different from contribution--Matter remanded to Tribunal-- Kennametal India Ltd . v . CIT (SC) . . . 209
S. 80HHC(3) --Export--Special deduction--Profits of the business--Formula for computation--Amendment with effect from assessment year 1992-93--Law applicable--Interest from money-lending--Not excludible for purpose of applying formula for computing export profits for earlier year-- CIT v. Anil Chanana (Delhi) . . . 247
S. 143 --Reassessment--Notice--Validity--No notice under section 143(2)--Assessing Officer has power to issue notice of reassessment-- D. T. T. D. C. Ltd. v. Deputy CIT
(Delhi) . . . 216
S. 147 --Reassessment--Notice--Assessment order dealing with question of grant of exemption under section 10B and allowing deduction--Reopening on ground of irregular deduction--Mere change of opinion--Notice not valid-- Metal Alloys Corporation v . Asst. CIT (Guj) . . . 245
----Reassessment--Notice--Royalty--Assessee furnishing primary facts--Assessing Officer to draw appropriate inference--Audit objection that royalty payment resulted in capital benefit--Opinion by audit cannot constitute tangible material--Reassessment not valid-- Xerox Modicorp Ltd. v . Deputy CIT (Delhi) . . . 308
----Reassessment--Notice--Validity--No notice under section 143(2)--Assessing Officer has power to issue notice of reassessment-- D. T. T. D. C. Ltd. v. Deputy CIT
(Delhi) . . . 216
----Reassessment--Notice--Validity--Original assessment granting exemption of interest from bonds after examining claim in detail--Reopening on ground exemption wrongly granted--Reopening of assessment of same claims on basis of same material--Change of opinion--Not permissible-- Gujarat Power Corporation Ltd . v. Asst. CIT (Guj) . . . 266
S. 148 --Reassessment--Notice--Assessment order dealing with question of grant of exemption under section 10B and allowing deduction--Reopening on ground of irregular deduction--Mere change of opinion--Notice not valid-- Metal Alloys Corporation v . Asst. CIT (Guj) . . . 245
----Reassessment--Notice--Royalty--Assessee furnishing primary facts--Assessing Officer to draw appropriate inference--Audit objection that royalty payment resulted in capital benefit--Opinion by audit cannot constitute tangible material--Reassessment not valid-- Xerox Modicorp Ltd. v. Deputy CIT (Delhi) . . . 308
----Reassessment--Notice--Validity--No notice under section 143(2)--Assessing Officer has power to issue notice of reassessment-- D. T. T. D. C. Ltd. v. Deputy CIT
(Delhi) . . . 216
----Reassessment--Notice--Validity--Original assessment granting exemption of interest from bonds after examining claim in detail--Reopening on ground exemption wrongly granted--Reopening of assessment of same claims on basis of same material--Change of opinion--Not permissible-- Gujarat Power Corporation Ltd . v. Asst. CIT (Guj) . . . 266
S. 158BC --Search and seizure--Block assessment--Assessment of third person--Conditions precedent--Satisfaction of Assessing Officer of person against whom search conducted to Assessing Officer of third person that any undisclosed income belongs to such person--Block assessment made without such satisfaction invalid-- CIT v . Intercontinental Trading and Investment Co. Ltd . (Delhi) . . . 316
S. 158BD --Search and seizure--Block assessment--Assessment of third person--Conditions precedent--Satisfaction of Assessing Officer of person against whom search conducted to Assessing Officer of third person that any undisclosed income belongs to such person--Block assessment made without such satisfaction invalid-- CIT v. Intercontinental Trading and Investment Co. Ltd . (Delhi) . . . 316
S. 220(2A) --Recovery of tax--Interest--Waiver of interest--Attachment of entire properties of assessee--Entire liabilities subsequently satisfied by appropriation of compensation--Case of genuine hardship--Authorities to reconsider waiver application-- Anto Nitto v . CIT (Ker) . . . 305
S. 260A --Appeal to High Court--Circulars/Instructions--Competency of appeal--Instruction No. 3 of 2011 fixing monetary limit in case of appeal filed by Revenue--Monetary limit applicable to pending cases--Instruction No. 3 of 2011, dated 9-2-2011-- CIT v. Smt. Vijaya V. Kavekar (Bom) . . . 237
----Appeal to High Court--Monetary limits for appeals by Department--Cases where tax effect below limit specified but having cascading effect--Circular not to be automatically applied-- CIT v. Surya Herbal Ltd. (SC) . . . 300
----Appeals to High Court and Supreme Court--Income-tax Department--Delay in filing appeal and special leave petitions--Action to be taken to avoid-- DIT (International Taxation) v . Citi Bank N. A. (SC) . . . 302
S. 268A --Appeal to High Court--Circulars/Instructions--Competency of appeal--Instruction No. 3 of 2011 fixing monetary limit in case of appeal filed by Revenue--Monetary limit applicable to pending cases--Instruction No. 3 of 2011, dated 9-2-2011-- CIT v. Smt. Vijaya V. Kavekar (Bom) . . . 237
R. 6DD --Business expenditure--Disallowance--Payments in cash exceeding prescribed limit--Assessee purchasing goods and depositing amount in bank account of seller--No disallowance in hands of assessee-- CIT v . Smt. Shelly Passi
(P&H) . . . 227
ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))
Volume 21 : Part 3 (Issue dated : 21-1-2013)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Appeal to Appellate Tribunal --Powers of Tribunal--Review--Assessee claiming deduction under section 54F--Finding by Tribunal that assessee not entitled to deduction--Assessee filing application for review--Tribunal has no power to review--Income-tax Act, 1961, ss. 54F, 254(2)-- Smt. V. Kumuda v. Deputy CIT (Hyderabad) . . . 396
Bad debt --Resolution for writing off interest in May 2002--Would relate back to accounting year relevant for assessment year 2002-03--Interest assessed on basis of accrual in earlier years--Deductible--Income-tax Act, 1961, s. 36(2)-- Jindal Iron and Steel Co. Ltd. v. Deputy CIT (Mumbai) . . . 414
Business expenditure --Club expenses--Allowable--Income-tax Act, 1961-- Jindal Iron and Steel Co. Ltd. v. Deputy CIT (Mumbai) . . . 414
----Disallowance--Entertainment expenditure--Omission of provisions for disallowance--No disallowance can be made thereafter under general provisions, if expenses otherwise incurred for business purposes--Income-tax Act, 1961, s. 37(1), (2)-- Assistant Director of Income-tax v. Credit Lyonnais (Mumbai) . . . 359
----Disallowance--Foreign tour expenses of accompanying spouse of directors of assessee-company--Burden of proof--Burden on assessee to prove that such foreign tour was wholly and exclusively for purpose of business--Failure by assessee to provide any evidence in this regard--Disallowance of such expense, proper--Income-tax Act, 1961, s. 37-- Harinagar Sugar Mills Ltd. v. Assistant CIT (Mumbai) . . . 383
Business loss --Banking company--Loss on valuation--Securities representing stock-in-trade--Assessee entitled to value its securities on basis of market price, if less than cost price--That assessee voluntarily offered sum to tax not ground for disallowing deduction for such loss--When such securities sold in subsequent year reduced value to be taken into consideration for computing the profit or loss from sale--Where loss on revaluation of securities for assessment year 1999-2000 allowed no separate deduction for 2000-01 allowable-- Assistant Director of Income-tax v. Credit Lyonnais (Mumbai) . . . 359
----Inter-corporate deposits part of business of assessee--Loss on investment--Deductible--Income-tax Act, 1961-- Jindal Iron and Steel Co. Ltd. v. Deputy CIT (Mumbai) . . . 414
Charitable purpose --Definition--Exclusion of organisation with profit motive--Applicable only to trust having “advancement of any other object of general public utility†--Not applicable to other categories of charitable purpose--Income-tax Act, 1961, s. 2(15)-- Krupanidhi Educational Trust v. Director of Income-tax (Exemption) (Bangalore) . . . 373
----Registration of trust--Cancellation of registration--Educational trust--Alteration of objects of trust without consent of Department not sufficient to exercise power under section 12AA(3)--Charitable object of trust not changed--Violations of provisions not relevant to decide whether assessee was pursuing education as its main object--Cancellation of registration not proper--Income-tax Act, 1961, ss. 12A, 12AA, 13(1)(c)-- Krupanidhi Educational Trust v. Director of Income-tax (Exemption) (Bangalore) . . . 373
Exemption --Interest on foreign currency loans--Allowable on gross interest and not on net interest--Assessee utilising interest-free funds at its disposal for investment in interest-free securities--No disallowance qua the investment in tax-free securities--Income-tax Act, 1961, ss. 10(15), 14A-- Assistant Director of Income-tax (International Taxation) v. Credit Agricole Indosuez (Mumbai) . . . 345
Income --Computation of income--Disallowance of expenditure incurred on earning exempt income--Investment in tax-free bonds and shares constituting small part of total interest-free funds available with assessee--No disallowance to be made--Disallowance of other administrative and management expenses at 2 per cent. of exempt income--Proper--Investment in securities/shares from which exempt income earned made out of own interest-free funds--No disallowance--Income-tax Act, 1961, s. 14A-- Assistant Director of Income-tax v. Credit Lyonnais (Mumbai) . . . 359
----Computation of income--Interest--Interest paid in respect of broken period to be set off against interest received in respect of broken period-- Assistant Director of Income-tax (International Taxation) v. Credit Agricole Indosuez (Mumbai) . . . 345
----Interest expenditure--Assessee, carrying on banking business, maintaining nostro accounts for receipt and payment of money in foreign currency--Interest earned from overseas branches chargeable--No disallowance of interest expenditure paid by assessee--Income-tax Act, 1961, s. 14A-- Assistant Director of Income-tax (International Taxation) v. Credit Agricole Indosuez (Mumbai) . . . 345
----Profit from unmatured forward exchange contract taxable-- Assistant Director of Income-tax v. Credit Lyonnais (Mumbai) . . . 359
Interest --Interest on refund--Intimation under section 143(1)--Interest assessable in year in which refund granted not in year in which proceedings under section 143(1)(a) attain finality--If interest reduced on account of assessment under section 143(3) reduced interest to form part of income of that year--Assessing Officer to adopt rate at which interest on income-tax refund charged under Double Taxation Avoidance Agreement between India and France--Income-tax Act, 1961, ss. 143, 244A--Double Taxation Avoidance Agreement between India and France, art. 12-- Assistant Director of Income-tax (International Taxation) v. Credit Agricole Indosuez (Mumbai) . . . 345
Non-resident --Direction to deduction of independent of provisions of section 44C--Justified--Income-tax Act, 1961, s. 44C-- Assistant Director of Income-tax (International Taxation) v. Credit Agricole Indosuez (Mumbai) . . . 345
----Double taxation avoidance--Interest on refund of tax deducted at source--Amount taxable under article 11(2) of Double Taxation Avoidance Agreement--Income-tax Act, 1961, s. 90--Double Taxation Avoidance Agreement between India and the U.S.A., art. 11(2)-- Bechtel International Inc. v. Assistant Director of Income-tax (Mumbai) . . . 404
----Permanent establishment--Interest and commission received from head office and other overseas branches and paid to other overseas branches and head office--Mutuality between overseas head office and branch in India--Interest received from overseas head office or branches not chargeable--Interest paid by Indian permanent establishment to overseas head office or branches not allowable as deduction--Income-tax Act, 1961-- Assistant Director of Income-tax (International Taxation) v. Credit Agricole Indosuez (Mumbai) . . . 345
----Shipping--Double Taxation Avoidance Agreement between Switzerland and India--Swiss company having permanent establishment in India chartering ships--Profits from international shipping--Property in ships “not effectively connected†with permanent establishment in India--Profits not assessable in India--Income-tax Act, 1961, s. 44B--Double Taxation Avoidance Agreement between India and Switzerland, art. 22-- Assistant Director of Income-tax (International Taxation) v. Mediterranean Shipping Co. S.A. (Mumbai) . . . 300
Principle of mutuality --Assessee, carrying on banking business, maintaining nostro accounts for receipt and payment of money in foreign currency with its head office and own branches outside India--Interest earned from overseas branches not chargeable--No deduction for interest expenditure paid by Indian branch to head office or other overseas branches-- Assistant Director of Income-tax v. Credit Lyonnais (Mumbai) . . . 359
Rate of tax --Foreign bank--Rate applicable to non-resident companies--Justified-- Assistant Director of Income-tax (International Taxation) v. Credit Agricole Indosuez (Mumbai) . . . 345
----Foreign bank--Rate of 48 per cent. applicable to foreign companies--Justified-- Assistant Director of Income-tax v. Credit Lyonnais (Mumbai) . . . 359
Word and phrases --†Attributable to†-- Bechtel International Inc. v. Assistant Director of Income-tax (Mumbai) . . . 404
----†Wholly†, “exclusively†“for purpose of business†--Meanings of-- Harinagar Sugar Mills Ltd. v. Assistant CIT (Mumbai) . . . 383
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Double Taxation Avoidance Agreement between India and France :
Art. 12 --Interest--Interest on refund--Intimation under section 143(1)--Interest assessable in year in which refund granted not in year in which proceedings under section 143(1)(a) attain finality--If interest reduced on account of assessment under section 143(3) reduced interest to form part of income of that year--Assessing Officer to adopt rate at which interest on income-tax refund charged under Double Taxation Avoidance Agreement between India and France-- Assistant Director of Income-tax (International Taxation) v. Credit Agricole Indosuez (Mumbai) . . . 345
Double Taxation Avoidance Agreement between India and Switzerland :
Art. 22 --Non-resident--Shipping--Double Taxation Avoidance Agreement between Switzerland and India--Swiss company having permanent establishment in India chartering ships--Profits from international shipping--Property in ships “not effectively connected†with permanent establishment in India--Profits not assessable in India-- Assistant Director of Income-tax (International Taxation) v. Mediterranean Shipping Co. S.A. (Mumbai) . . . 300
Double Taxation Avoidance Agreement between India and the U.S.A. :
Art. 11(2) --Non-resident--Double taxation avoidance--Interest on refund of tax deducted at source--Amount taxable under article 11(2) of Double Taxation Avoidance Agreement-- Bechtel International Inc. v. Assistant Director of Income-tax (Mumbai) . . . 404
S. 2(15) --Charitable purpose--Definition--Exclusion of organisation with profit motive--Applicable only to trust having “advancement of any other object of general public utility†--Not applicable to other categories of charitable purpose-- Krupanidhi Educational Trust v. Director of Income-tax (Exemption) (Bangalore) . . . 373
S. 10(15) --Exemption--Interest on foreign currency loans--Allowable on gross interest and not on net interest--Assessee utilising interest-free funds at its disposal for investment in interest-free securities--No disallowance qua the investment in tax-free securities-- Assistant Director of Income-tax (International Taxation) v. Credit Agricole Indosuez (Mumbai) . . . 345
S. 12A --Charitable purpose--Registration of trust--Cancellation of registration--Educational trust--Alteration of objects of trust without consent of Department not sufficient to exercise power under section 12AA(3)--Charitable object of trust not changed--Violations of provisions not relevant to decide whether assessee was pursuing education as its main object--Cancellation of registration not proper-- Krupanidhi Educational Trust v. Director of Income-tax (Exemption) (Bangalore) . . . 373
S. 12AA --Charitable purpose--Registration of trust--Cancellation of registration--Educational trust--Alteration of objects of trust without consent of Department not sufficient to exercise power under section 12AA(3)--Charitable object of trust not changed--Violations of provisions not relevant to decide whether assessee was pursuing education as its main object--Cancellation of registration not proper-- Krupanidhi Educational Trust v. Director of Income-tax (Exemption) (Bangalore) . . . 373
S. 13(1)(c) --Charitable purpose--Registration of trust--Cancellation of registration--Educational trust--Alteration of objects of trust without consent of Department not sufficient to exercise power under section 12AA(3)--Charitable object of trust not changed--Violations of provisions not relevant to decide whether assessee was pursuing education as its main object--Cancellation of registration not proper-- Krupanidhi Educational Trust v. Director of Income-tax (Exemption) . . . 373
S. 14A --Exemption--Interest on foreign currency loans--Allowable on gross interest and not on net interest--Assessee utilising interest-free funds at its disposal for investment in interest-free securities--No disallowance qua the investment in tax-free securities-- Assistant Director of Income-tax (International Taxation) v. Credit Agricole Indosuez (Mumbai) . . . 345
----Income--Computation of income--Disallowance of expenditure incurred on earning exempt income--Investment in tax-free bonds and shares constituting small part of total interest-free funds available with assessee--No disallowance to be made--Disallowance of other administrative and management expenses at 2 per cent. of exempt income--Proper--Investment in securities/shares from which exempt income earned made out of own interest-free funds--No disallowance-- Assistant Director of Income-tax v. Credit Lyonnais (Mumbai) . . . 359
----Income--Interest expenditure--Assessee, carrying on banking business, maintaining nostro accounts for receipt and payment of money in foreign currency--Interest earned from overseas branches chargeable--No disallowance of interest expenditure paid by assessee-- Assistant Director of Income-tax (International Taxation) v. Credit Agricole Indosuez (Mumbai) . . . 345
S. 36(2) --Bad debt--Resolution for writing off interest in May 2002--Would relate back to accounting year relevant for assessment year 2002-03--Interest assessed on basis of accrual in earlier years--Deductible-- Jindal Iron and Steel Co. Ltd. v. Deputy CIT (Mumbai) . . . 414
S. 37 --Business expenditure--Disallowance--Foreign tour expenses of accompanying spouse of directors of assessee-company--Burden of proof--Burden on assessee to prove that such foreign tour was wholly and exclusively for purpose of business--Failure by assessee to provide any evidence in this regard--Disallowance of such expense, proper-- Harinagar Sugar Mills Ltd. v. Assistant CIT (Mumbai) . . . 383
S. 37(1), (2) --Business expenditure--Disallowance--Entertainment expenditure--Omission of provisions for disallowance--No disallowance can be made thereafter under general provisions, if expenses otherwise incurred for business purposes-- Assistant Director of Income-tax v. Credit Lyonnais (Mumbai) . . . 359
S. 44B --Non-resident--Shipping--Double Taxation Avoidance Agreement between Switzerland and India--Swiss company having permanent establishment in India chartering ships--Profits from international shipping--Property in ships “not effectively connected†with permanent establishment in India--Profits not assessable in India-- Assistant Director of Income-tax (International Taxation) v. Mediterranean Shipping Co. S.A. (Mumbai) . . . 300
S. 44C --Non-resident--Direction to deduction of independent of provisions of section 44C--Justified-- Assistant Director of Income-tax (International Taxation) v. Credit Agricole Indosuez (Mumbai) . . . 345
S. 54F --Appeal to Appellate Tribunal--Powers of Tribunal--Review--Assessee claiming deduction under section 54F--Finding by Tribunal that assessee not entitled to deduction--Assessee filing application for review--Tribunal has no power to review-- Smt. V. Kumuda v. Deputy CIT (Hyderabad) . . . 396
S. 90 --Non-resident--Double taxation avoidance--Interest on refund of tax deducted at source--Amount taxable under article 11(2) of Double Taxation Avoidance Agreement-- Bechtel International Inc. v. Assistant Director of Income-tax (Mumbai) . . . 404
S. 143 --Interest--Interest on refund--Intimation under section 143(1)--Interest assessable in year in which refund granted not in year in which proceedings under section 143(1)(a) attain finality--If interest reduced on account of assessment under section 143(3) reduced interest to form part of income of that year--Assessing Officer to adopt rate at which interest on income-tax refund charged under Double Taxation Avoidance Agreement between India and France-- Assistant Director of Income-tax (International Taxation) v. Credit Agricole Indosuez (Mumbai) . . . 345
S. 244A --Interest--Interest on refund--Intimation under section 143(1)--Interest assessable in year in which refund granted not in year in which proceedings under section 143(1)(a) attain finality--If interest reduced on account of assessment under section 143(3) reduced interest to form part of income of that year--Assessing Officer to adopt rate at which interest on income-tax refund charged under Double Taxation Avoidance Agreement between India and France-- Assistant Director of Income-tax (International Taxation) v. Credit Agricole Indosuez (Mumbai) . . . 345
S. 254(2) --Appeal to Appellate Tribunal--Powers of Tribunal--Review--Assessee claiming deduction under section 54F--Finding by Tribunal that assessee not entitled to deduction--Assessee filing application for review--Tribunal has no power to review-- Smt. V. Kumuda v. Deputy CIT (Hyderabad) . . . 396
Sir it would be better if u can give the full facts of the case.
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