INCOME TAX REPORTS (ITR)
Volume 350 Part 6 (Issue dated 11-2-2013)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Gift-tax --Deemed gift--Revocable gift of shares with proviso that gift shall not include bonus or rights shares issued to donee on basis of gifted shares--Assessment of gift made on basis that revocable gift permissible--Donor revoking gift but bonus shares continuing with donee--Whether there was deemed gift of bonus shares in year of revocation--Matter remanded--Gift-tax Act, 1958, s. 4(1)(c)-- Satya Nand Munjal v . CGT . . . 640
----Interest--Revocable gift--Whether taxable--Whether interest payable--Matter remanded--Gift-tax Act, 1958, s. 16B-- Satya Nand Munjal v . CGT
. . . 649
Assessment --Special audit--Assessing Officer--Not a specialist in accounts or an auditor to find out methods adopted by assessee--Not an investigator to decipher the codes and procedures adopted in accounting methods to arrive at aggregate income--Income-tax Act, 1961, s. 142(2A)-- ATS Infrastructure Ltd. v. Asst. CIT
(All) . . . 563
----Special audit--Construction and sale of residential and commercial flats--Managing director of assessee during course of search surrendering substantial amount of cash and admitting receipt of on-money in sale of flats--No retraction of statement--Voluntary admission of additional income by managing director in return signed as managing director--Accounts not genuine--Direction for special audit justified--Income-tax Act, 1961, s. 142(2A)-- ATS Infrastructure Ltd . v . Asst. CIT (All) . . . 563
----Special audit--Construction and sale of residential flats--Large scale tax evasion and dubious methods in maintaining accounts--Assessing Officer failing to understand manner and method in which accounts maintained and facing unco-operative attitude--Direction for special audit justified--Income-tax Act, 1961, s. 142(2A)-- ATS Infrastructure Ltd . v . Asst. CIT (All) . . . 563
----Special audit--Limitation--Failure to record reasons--High Court giving liberty to Department to pass a fresh order--Fresh order cannot be challenged on ground of limitation--Income-tax Act, 1961, s. 142(2A)-- ATS Infrastructure Ltd . v. Asst. CIT
(All) . . . 563
Reassessment --Notice--Illegal siphoning off of assessee-company’s funds by other two directors in guise of fixed assets, repairs and maintenances, travelling expenses--Complaint by director before statutory authority constituting relevant material for belief--Notice valid--Income-tax Act, 1961, ss. 147, 148-- Rambagh Palace Hotels P. Ltd . v . Dy. CIT (Delhi) . . . 660
----Notice after four years--Assessee not only furnishing all relevant details relating to purchase of fixed assets, repairs and maintenance of buildings but also details relating to foreign travel expenses--Assessing Officer to examine and draw appropriate inferences--No failure to disclose fully and truly all material facts--Notice not valid--Income-tax Act, 1961, ss. 147, 148-- Rambagh Palace Hotels P. Ltd . v . Dy. CIT
(Delhi) . . . 660
----Notice after four years--Conditions precedent--Disclosure of entire process of manufacture and generation of electricity by gas turbine and steam turbine units--Units treated as separate and independent in original assessment--Inspection report indicating two different units--Reopening on basis of report to withdraw deduction under section 80-IA--Change of opinion--Issue of grossing up of rate of tax considered at time of original assessment--Notice not valid--Income-tax Act, 1961, ss. 147, 148-- NTPC Ltd. v . Dy. CIT (Delhi) . . . 614
----Notice after four years--Director of assessee complaining before statutory authority that assessee had siphoned off monies as foreign travelling expenses and under agreement no obligation of assessee to incur such expenses--No details furnished at time of original assessment towards travelling expenses--No denial of such a clause in agreement--Failure to disclose fully and truly all material facts--Complaint constituting tangible material--Notice valid--Income-tax Act, 1961, ss. 147, 148-- Rambagh Palace Hotels P. Ltd . v . Dy. CIT (Delhi) . . . 660
----Notice within four years--Tests--Tangible material, meaning of--Change in accounting policy--Revision of pay scales--No application of mind by Assessing Officer--Notice valid--Income-tax Act, 1961, ss. 147, 148-- Export Credit Guarantee Corporation of India Ltd . v . Addl. CIT (Bom) . . . 651
Search and seizure --Warrant of authorisation--Conditions precedent--Existence of tangible material a pre-requisite--Information that there was a likelihood of documents belonging to a group being found in assessee’s premises--Not solid information--Warrant of authorisation in name of assessee--Information and reason to believe to be formed in connection with assessee and not the group--Mere reason to suspect not sufficient--Articles seized to be released to assessee--Income-tax Act, 1961, s. 132-- Madhu Gupta v. DIT (Investigation) (Delhi) . . . 598
Unexplained investment --Assessee offering explanation in detail of source of investment--Tribunal ought to have returned a specific finding whether explanation offered by assessee satisfactory--No such finding--Matter remanded--Income-tax Act, 1961, s. 69-- CIT v . Ajai Shukla (Delhi) . . . 594
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
S. 4(1)(c) --Gift-tax--Deemed gift--Revocable gift of shares with proviso that gift shall not include bonus or rights shares issued to donee on basis of gifted shares--Assessment of gift made on basis that revocable gift permissible--Donor revoking gift but bonus shares continuing with donee--Whether there was deemed gift of bonus shares in year of revocation--Matter remanded-- Satya Nand Munjal v . CGT
(SC) . . . 640
S. 16B --Gift-tax--Interest--Revocable gift--Whether taxable--Whether interest payable--Matter remanded-- Satya Nand Munjal v . CGT (SC) . . . 649
S. 69 --Unexplained investment--Assessee offering explanation in detail of source of investment--Tribunal ought to have returned a specific finding whether explanation offered by assessee satisfactory--No such finding--Matter remanded-- CIT v . Ajai Shukla (Delhi) . . . 594
S. 132 --Search and seizure--Warrant of authorisation--Conditions precedent--Existence of tangible material a pre-requisite--Information that there was a likelihood of documents belonging to a group being found in assessee’s premises--Not solid information--Warrant of authorisation in name of assessee--Information and reason to believe to be formed in connection with assessee and not the group--Mere reason to suspect not sufficient--Articles seized to be released to assessee-- Madhu Gupta v. DIT (Investigation) (Delhi) . . . 598
S. 142(2A) --Assessment--Special audit--Assessing Officer--Not a specialist in accounts or an auditor to find out methods adopted by assessee--Not an investigator to decipher the codes and procedures adopted in accounting methods to arrive at aggregate income-- ATS Infrastructure Ltd. v. Asst. CIT (All) . . . 563
----Assessment--Special audit--Construction and sale of residential and commercial flats--Managing director of assessee during course of search surrendering substantial amount of cash and admitting receipt of on-money in sale of flats--No retraction of statement--Voluntary admission of additional income by managing director in return signed as managing director--Accounts not genuine--Direction for special audit justified-- ATS Infrastructure Ltd . v . Asst. CIT (All) . . . 563
----Assessment--Special audit--Construction and sale of residential flats--Large scale tax evasion and dubious methods in maintaining accounts--Assessing Officer failing to understand manner and method in which accounts maintained and facing unco-operative attitude--Direction for special audit justified-- ATS Infrastructure Ltd . v . Asst. CIT (All) . . . 563
----Assessment--Special audit--Limitation--Failure to record reasons--High Court giving liberty to Department to pass a fresh order--Fresh order cannot be challenged on ground of limitation-- ATS Infrastructure Ltd . v. Asst. CIT (All) . . . 563
S. 147 --Reassessment--Notice--Illegal siphoning off of assessee-company’s funds by other two directors in guise of fixed assets, repairs and maintenances, travelling expenses--Complaint by director before statutory authority constituting relevant material for belief--Notice valid-- Rambagh Palace Hotels P. Ltd . v . Dy. CIT
(Delhi) . . . 660
----Reassessment--Notice after four years--Assessee not only furnishing all relevant details relating to purchase of fixed assets, repairs and maintenance of buildings but also details relating to foreign travel expenses--Assessing Officer to examine and draw appropriate inferences--No failure to disclose fully and truly all material facts--Notice not valid-- Rambagh Palace Hotels P. Ltd . v . Dy. CIT (Delhi) . . . 660
----Reassessment--Notice after four years--Conditions precedent--Disclosure of entire process of manufacture and generation of electricity by gas turbine and steam turbine units--Units treated as separate and independent in original assessment--Inspection report indicating two different units--Reopening on basis of report to withdraw deduction under section 80-IA--Change of opinion--Issue of grossing up of rate of tax considered at time of original assessment--Notice not valid-- NTPC Ltd. v . Dy. CIT
(Delhi) . . . 614
----Reassessment--Notice after four years--Director of assessee complaining before statutory authority that assessee had siphoned off monies as foreign travelling expenses and under agreement no obligation of assessee to incur such expenses--No details furnished at time of original assessment towards travelling expenses--No denial of such a clause in agreement--Failure to disclose fully and truly all material facts--Complaint constituting tangible material--Notice valid-- Rambagh Palace Hotels P. Ltd . v . Dy. CIT (Delhi) . . . 660
----Reassessment--Notice within four years--Tests--Tangible material, meaning of--Change in accounting policy--Revision of pay scales--No application of mind by Assessing Officer--Notice valid-- Export Credit Guarantee Corporation of India Ltd . v . Addl. CIT (Bom) . . . 651
S. 148 --Reassessment--Notice--Illegal siphoning off of assessee-company’s funds by other two directors in guise of fixed assets, repairs and maintenances, travelling expenses--Complaint by director before statutory authority constituting relevant material for belief--Notice valid-- Rambagh Palace Hotels P. Ltd . v . Dy. CIT
(Delhi) . . . 660
----Reassessment--Notice after four years--Assessee not only furnishing all relevant details relating to purchase of fixed assets, repairs and maintenance of buildings but also details relating to foreign travel expenses--Assessing Officer to examine and draw appropriate inferences--No failure to disclose fully and truly all material facts--Notice not valid-- Rambagh Palace Hotels P. Ltd . v . Dy. CIT (Delhi) . . . 660
----Reassessment--Notice after four years--Conditions precedent--Disclosure of entire process of manufacture and generation of electricity by gas turbine and steam turbine units--Units treated as separate and independent in original assessment--Inspection report indicating two different units--Reopening on basis of report to withdraw deduction under section 80-IA--Change of opinion--Issue of grossing up of rate of tax considered at time of original assessment--Notice not valid-- NTPC Ltd. v . Dy. CIT
(Delhi) . . . 614
----Reassessment--Notice after four years--Director of assessee complaining before statutory authority that assessee had siphoned off monies as foreign travelling expenses and under agreement no obligation of assessee to incur such expenses--No details furnished at time of original assessment towards travelling expenses--No denial of such a clause in agreement--Failure to disclose fully and truly all material facts--Complaint constituting tangible material--Notice valid-- Rambagh Palace Hotels P. Ltd . v . Dy. CIT (Delhi) . . . 660
----Reassessment--Notice within four years--Tests--Tangible material, meaning of--Change in accounting policy--Revision of pay scales--No application of mind by Assessing Officer--Notice valid-- Export Credit Guarantee Corporation of India Ltd . v . Addl. CIT (Bom) . . . 651
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