Fwd: ITR VOL 352 PART 3 AND ITR (TRIB) VOL 23 PART 2

 

INCOME TAX REPORTS (ITR)

Volume 352 Part 3 (Issue dated 22-4-2013)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Capital gains --Business income--Trading or investment--Long-term capital gains--Assessee treating land as fixed asset for a long time and using it for agricultural purposes--No evidence that assessee purchased land by funds borrowed--Sale proceeds resulting long-term capital gains and not business income--Income-tax Act, 1961-- CIT v. Delhi Apartments Pvt. Ltd. (Delhi) . . . 322

Capital or revenue expenditure --Company--Expenditure on debenture--Debenture to be converted subsequently to shares--Expenditure deductible--Income-tax Act, 1961, s. 37-- CIT v . Havells India Ltd . (Delhi) . . . 376

----Expenditure on installation of new unit--Finding that new unit constituted extension of existing business and there was common management--Expenditure deductible--Income-tax Act, 1961, s. 37-- CIT v. Havells India Ltd .
(Delhi) . . . 376

----Expenditure relating to voluntary retirement scheme in respect of two units of assessee--Closure of two units not resulting in closure of business of assessee--Expenditure incurred for purpose of restructuring to achieve modernisation--Allowable as revenue expenditure--Income-tax Act, 1961, s. 37(1)-- CIT v. Foseco India Ltd .
(Bom) . . . 320

Deduction of tax at source --Non-resident--Effect of section 9(1)(vii)(b)--Meaning of source of income--Manufacture of products in India--Payment to US company for certification facilitating export--Source of income within India--Section 9(1)(vii) applicable--Question of liability under DTAA between USA and India not considered--Matter remanded--Income-tax Act, 1961, ss. 9(1)(vii), 40(a)(ia), 195-- CIT v . Havells India Ltd. (Delhi) . . . 376

Exemption --Educational institution--Denial of exemption under section 10(23C)(vi)--Registration under section 12A cannot be cancelled on basis of order denying exemption--Exemption can be claimed without applying for registration--Both are independent proceedings--Income-tax Act, 1961, ss. 10(23C)(vi), 12A-- CIT v . Society of Advanced Management Studies (All) . . . 269

Export --Special deduction--Different units of assessee engaged in manufacturing of different goods--Does not make separate units of assessee separate and different assessable units--Loss of one division to be adjusted against profit of other division for purposes of computation of deduction under section 80HHC--Income-tax Act, 1961, s. 80HHC-- Madhav Marbles and Granites Ltd. v. Asst. CIT (Raj) . . . 331

Income --Accrual of income--No transfer of possession during previous year relevant to assessment year 2006-07 but only receipt of advance--Execution of sale deed in following year--Amount received as advance not taxable in assessment year 2006-07--Income-tax Act, 1961-- CIT v . Delhi Apartments Pvt. Ltd . (Delhi) . . . 322

Penalty --Concealment of income--Transactions disclosed in return--Claim of expenditure to be revenue--Disallowance of claim--Assessee not liable for penalty--Income-tax Act, 1961, s. 271(1)(c)-- CIT v . Amtek Auto Ltd . (P&H) . . . 394

----Deposit in cash exceeding prescribed limit--Limitation--Six months from date of initiation of action for levy of penalty--Period to be reckoned from date of issue of first show cause for penalty and not from issue of first show cause by Joint Commissioner--Income-tax Act, 1961, ss. 269SS, 271D, 275(1)(c)-- CIT v . Jitendra Singh Rathore
(Raj) . . . 327

Reassessment --Limitation--Requirements only that reasons be recorded and notice be issued before expiry of time limit--Delay in supplying reasons recorded by Assessing Officer to assessee would not invalidate reassessment proceedings--Income-tax Act, 1961, ss. 147, 148, 149-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364

----Notice--Validity--Original assessment granting special deduction under section 80-IA(4) after detailed enquiry--Reassessment proceedings to withdraw special deduction on ground that assessee not entitled to special deduction--Mere change of opinion--Notice not valid--Income-tax Act, 1961, ss. 80-IA, 147, 148-- Parixit Industries P. Ltd . v . Asst. CIT (OSD) (Guj) . . . 349

----Notice after four years--Conditions precedent--Information regarding transport subsidy available in audited accounts and statements furnished by assessee to Assessing Officer with assessee’s return--Reassessment adding transport subsidy as taxable income of assessee--Not valid--Income-tax Act, 1961, ss. 147, 148-- CIT v. Sonitpur Solvex Ltd. (Gauhati) . . . 305

----Notice after four years--Failure by assessee to disclose material facts--Documents attached to return only statutory auditor’s report and final accounts--Nothing disclosing specifically receipt of share capital of Rs. 4,50,000 from Q--Report of investigation wing on basis of which assessment reopened containing specific information that assessee received as accommodation entry Rs. 4,50,000 from Q with bank account particulars and instrument number--Reopening of assessment proper--Income-tax Act, 1961, ss. 147, 148-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364

Recovery of tax --Provisional attachment--Assessment thereafter completed--Revenue not justified in attaching entire amount standing to the credit of assessee over and above demand raised against assessee--Income-tax Act, 1961, s. 281B-- Nirmal Singh v . Union of India (P&H) . . . 396

Return of income --Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes--Income-tax Act, 1961, ss. 143(1), 154, 201, 203, 244A, 245-- Court on its own Motion v . CIT
(Delhi) . . . 273

Revision --Commissioner--Powers--Rectification of mistakes--Order rejecting application in absence of revised return--Natural justice--Non-speaking order rejecting revision on ground of availability of alternative remedy of appeal not valid--Commissioner to decide petition on merits--Income-tax Act, 1961, ss. 154, 263-- Universal Packaging v. CIT (Bom) . . . 398

Search and seizure --Refund of excess amounts seized--Interest on refund--Period for which interest payable--Refund as a result of appellate order--Interest payable from date of original assessment order--Adjustment of tax liability of brother of assessee not justified--Assessee entitled to interest for amount seized--Income-tax Act, 1961, s. 132B(3)-- G. L. Jain v . CIT (Delhi) . . . 339

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961 :

S. 9(1)(vii) --Deduction of tax at source--Non-resident--Effect of section 9(1)(vii)(b)--Meaning of source of income--Manufacture of products in India--Payment to US company for certification facilitating export--Source of income within India--Section 9(1)(vii) applicable--Question of liability under DTAA between USA and India not considered--Matter remanded-- CIT v . Havells India Ltd. (Delhi) . . . 376

S. 10(23C)(vi) --Exemption--Educational institution--Denial of exemption under section 10(23C)(vi)--Registration under section 12A cannot be cancelled on basis of order denying exemption--Exemption can be claimed without applying for registration--Both are independent proceedings-- CIT v . Society of Advanced Management Studies (All) . . . 269

S. 12A --Exemption--Educational institution--Denial of exemption under section 10(23C)(vi)--Registration under section 12A cannot be cancelled on basis of order denying exemption--Exemption can be claimed without applying for registration--Both are independent proceedings-- CIT v . Society of Advanced Management Studies
(All) . . . 269

S. 37 --Capital or revenue expenditure--Company--Expenditure on debenture--Debenture to be converted subsequently to shares--Expenditure deductible-- CIT v . Havells India Ltd . (Delhi) . . . 376

----Capital or revenue expenditure--Expenditure on installation of new unit--Finding that new unit constituted extension of existing business and there was common management--Expenditure deductible-- CIT v. Havells India Ltd . (Delhi) . . . 376

S. 37(1) --Capital or revenue expenditure--Expenditure relating to voluntary retirement scheme in respect of two units of assessee--Closure of two units not resulting in closure of business of assessee--Expenditure incurred for purpose of restructuring to achieve modernisation--Allowable as revenue expenditure-- CIT v. Foseco India Ltd .
(Bom) . . . 320

S. 40(a)(ia) --Deduction of tax at source--Non-resident--Effect of section 9(1)(vii)(b)--Meaning of source of income--Manufacture of products in India--Payment to US company for certification facilitating export--Source of income within India--Section 9(1)(vii) applicable--Question of liability under DTAA between USA and India not considered--Matter remanded-- CIT v . Havells India Ltd. (Delhi) . . . 376

S. 80HHC --Export--Special deduction--Different units of assessee engaged in manufacturing of different goods--Does not make separate units of assessee separate and different assessable units--Loss of one division to be adjusted against profit of other division for purposes of computation of deduction under section 80HHC-- Madhav Marbles and Granites Ltd. v. Asst. CIT (Raj) . . . 331

S. 80-IA --Reassessment--Notice--Validity--Original assessment granting special deduction under section 80-IA(4) after detailed enquiry--Reassessment proceedings to withdraw special deduction on ground that assessee not entitled to special deduction--Mere change of opinion--Notice not valid-- Parixit Industries P. Ltd . v . Asst. CIT (OSD) (Guj) . . . 349

S. 132B(3) --Search and seizure--Refund of excess amounts seized--Interest on refund--Period for which interest payable--Refund as a result of appellate order--Interest payable from date of original assessment order--Adjustment of tax liability of brother of assessee not justified--Assessee entitled to interest for amount seized-- G. L. Jain v . CIT (Delhi) . . . 339

S. 143(1) --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273

S. 147 --Reassessment--Limitation--Requirements only that reasons be recorded and notice be issued before expiry of time limit--Delay in supplying reasons recorded by Assessing Officer to assessee would not invalidate reassessment proceedings-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364

----Reassessment--Notice--Validity--Original assessment granting special deduction under section 80-IA(4) after detailed enquiry--Reassessment proceedings to withdraw special deduction on ground that assessee not entitled to special deduction--Mere change of opinion--Notice not valid-- Parixit Industries P. Ltd . v . Asst. CIT (OSD)
(Guj) . . . 349

----Reassessment--Notice after four years--Conditions precedent--Information regarding transport subsidy available in audited accounts and statements furnished by assessee to Assessing Officer with assessee’s return--Reassessment adding transport subsidy as taxable income of assessee--Not valid-- CIT v. Sonitpur Solvex Ltd.
(Gauhati) . . . 305

----Reassessment--Notice after four years--Failure by assessee to disclose material facts--Documents attached to return only statutory auditor’s report and final accounts--Nothing disclosing specifically receipt of share capital of Rs. 4,50,000 from Q--Report of investigation wing on basis of which assessment reopened containing specific information that assessee received as accommodation entry Rs. 4,50,000 from Q with bank account particulars and instrument number--Reopening of assessment proper-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364

S. 148 --Reassessment--Limitation--Requirements only that reasons be recorded and notice be issued before expiry of time limit--Delay in supplying reasons recorded by Assessing Officer to assessee would not invalidate reassessment proceedings-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364

----Reassessment--Notice--Validity--Original assessment granting special deduction under section 80-IA(4) after detailed enquiry--Reassessment proceedings to withdraw special deduction on ground that assessee not entitled to special deduction--Mere change of opinion--Notice not valid-- Parixit Industries P. Ltd . v . Asst. CIT (OSD)
(Guj) . . . 349

----Reassessment--Notice after four years--Conditions precedent--Information regarding transport subsidy available in audited accounts and statements furnished by assessee to Assessing Officer with assessee’s return--Reassessment adding transport subsidy as taxable income of assessee--Not valid-- CIT v. Sonitpur Solvex Ltd.
(Gauhati) . . . 305

----Reassessment--Notice after four years--Failure by assessee to disclose material facts--Documents attached to return only statutory auditor’s report and final accounts--Nothing disclosing specifically receipt of share capital of Rs. 4,50,000 from Q--Report of investigation wing on basis of which assessment reopened containing specific information that assessee received as accommodation entry Rs. 4,50,000 from Q with bank account particulars and instrument number--Reopening of assessment proper-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364

S. 149 --Reassessment--Limitation--Requirements only that reasons be recorded and notice be issued before expiry of time limit--Delay in supplying reasons recorded by Assessing Officer to assessee would not invalidate reassessment proceedings-- A. G. Holdings Pvt. Ltd . v . ITO (Delhi) . . . 364

S. 154 --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273

----Revision--Commissioner--Powers--Rectification of mistakes--Order rejecting application in absence of revised return--Natural justice--Non-speaking order rejecting revision on ground of availability of alternative remedy of appeal not valid--Commissioner to decide petition on merits-- Universal Packaging v. CIT (Bom) . . . 398

S. 195 --Deduction of tax at source--Non-resident--Effect of section 9(1)(vii)(b)--Meaning of source of income--Manufacture of products in India--Payment to US company for certification facilitating export--Source of income within India--Section 9(1)(vii) applicable--Question of liability under DTAA between USA and India not considered--Matter remanded-- CIT v . Havells India Ltd. (Delhi) . . . 376

S. 201 --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273

S. 203 --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273

S. 244A --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273

S. 245 --Return of income--Intimation--Deduction of tax at source--Credit for--Refunds--Adjustment of refund--Central processing centre--Hardships faced by assessees owing to faulty processing of returns and uploading of details of tax deducted at source--High Court--Directions given to Department and Central Board of Direct Taxes-- Court on its own Motion v . CIT (Delhi) . . . 273

S. 263 --Revision--Commissioner--Powers--Rectification of mistakes--Order rejecting application in absence of revised return--Natural justice--Non-speaking order rejecting revision on ground of availability of alternative remedy of appeal not valid--Commissioner to decide petition on merits-- Universal Packaging v. CIT
(Bom) . . . 398

S. 269SS --Penalty--Deposit in cash exceeding prescribed limit--Limitation--Six months from date of initiation of action for levy of penalty--Period to be reckoned from date of issue of first show cause for penalty and not from issue of first show cause by Joint Commissioner-- CIT v . Jitendra Singh Rathore (Raj) . . . 327

S. 271(1)(c) --Penalty--Concealment of income--Transactions disclosed in return--Claim of expenditure to be revenue--Disallowance of claim--Assessee not liable for penalty-- CIT v . Amtek Auto Ltd . (P&H) . . . 394

S. 271D --Penalty--Deposit in cash exceeding prescribed limit--Limitation--Six months from date of initiation of action for levy of penalty--Period to be reckoned from date of issue of first show cause for penalty and not from issue of first show cause by Joint Commissioner-- CIT v . Jitendra Singh Rathore (Raj) . . . 327

S. 275(1)(c) --Penalty--Deposit in cash exceeding prescribed limit--Limitation--Six months from date of initiation of action for levy of penalty--Period to be reckoned from date of issue of first show cause for penalty and not from issue of first show cause by Joint Commissioner-- CIT v . Jitendra Singh Rathore (Raj) . . . 327

S. 281B --Recovery of tax--Provisional attachment--Assessment thereafter completed--Revenue not justified in attaching entire amount standing to the credit of assessee over and above demand raised against assessee-- Nirmal Singh v . Union of India
(P&H) . . . 396

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

Volume 23 : Part 2 (Issue dated : 22-4-2013)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Advance tax --Interest--Assessee not liable to pay interest--Income-tax Act, 1961, s. 234B-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

Appeal to Appellate Tribunal --Power to admit additional grounds--Legal grounds not requiring investigation into facts--To be admitted--Income-tax Act, 1961, s. 254-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

----Rectification of mistake--Exemption--Export-oriented undertaking--Tribunal inadvertently miscalculating number of assessment years for which exemption available--Mistake to be rectified--Change of year goes to root of order--Earlier order recalled--Income-tax Act, 1961-- Assistant CIT v. Qmax Test Equipments P. Ltd. (Chennai) . . . 187

Appeal to Commissioner (Appeals) --Power to enhance income--Income from different products manufactured under same licence agreement--Commissioner (Appeals) entitled to enhance income--Income-tax Act, 1961, s. 251-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

Capital gains --Agreement for development of property cancelled and agreement for sale and irrevocable power of attorney executed within same party--Device to reduce tax--Advance received under first agreement and forfeited and sums received as damages together constitute part of consideration for sale--Taxable as capital gains--Income-tax Act, 1961-- Hyderabad Bottling Co. Ltd. v. Deputy CIT (Hyderabad) . . . 175

----Business income--Purchase of land for agricultural purposes--No evidence that borrowed capital used for purchase--Land held as an asset--Surplus realised on asset to be taxed as capital gains--Not business income--Income-tax Act, 1961-- Additional CIT v. Delhi Apartment P. Ltd. (Delhi) . . . 217

----Transfer of asset--Date of transfer--No agreement signed or possession delivered in relevant year--Gains cannot be taxed in that year--Income-tax Act, 1961, ss. 2(47), 45-- Additional CIT v. Delhi Apartment P. Ltd. (Delhi) . . . 217

Non-resident --Burden of proof--Income deemed to accrue or arise in India--Conditions precedent--Business carried on in India--Sale to party in India without operations carried out in India not business in India--Licence granted by assessee of patented CDMA technology to non-resident original equipment manufacturers to make and sell CDMA handsets and wireless equipment in consideration for royalty--Royalty determined with reference to net selling price of product to unrelated wireless carriers worldwide--Sale of products manufactured using patented technology to wireless carriers located in India for sale to end users in India--Licence not specific to any particular country--Licence not used in India--Not established that patents licensed by assessee used for installation activities in India--Patents having nothing to do with functionality of handsets--Original equipment manufacturers themselves not brought to tax--Title to equipment passing in high seas--Mere passing of title does not result in income being attributable in India--Software not provided as part of licensing of assessee’s patents--Source of royalty was place where patent exploited which was outside India--Indian telecom operators not source of income for original equipment manufacturers--Not established that original equipment manufacturers used assessee’s patents for carrying on business in India or making or earning income from source in India--Royalty paid by original equipment manufacturers to assessee not taxable--Income-tax Act, 1961, s. 9(1)(vi)(c)--Double Taxation Avoidance Agreement between India and the United States of America, art. 12(7)(b)-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

----Fees for technical services--Payments to non-resident divers under contract for provision of underwater services in Saudi Arabia--Technical fee paid to carry out business outside India for earning income from a source outside India--Assessee not liable for tax deducted at source--Income-tax Act, 1961, s. 9(1)(vii)-- Aqua Omega Services P. Ltd. v. Assistant CIT (Chennai) . . . 191

Penalty --Failure to file return of tax deducted at source within specified time--Penalty levied unilaterally without finding whether banks need to file statements--Statements produced by assessee uploaded by franchisee in single day for all four quarters--Particulars uploaded by franchisee without permanent account numbers of deductees--Levy of penalty not justified--Income-tax Act, 1961, s. 272A(2)(k)-- Branch Manager (TDS), UCO Bank v. Additional CIT (Cuttack) . . . 209

Reassessment --Reason to believe income escaped assessment--Sufficient if one ground out of many tenable--Facts contradicting basis of belief subsequently surfacing later in course of assessment not to vitiate proceedings--No stipulation that Assessing Officer to furnish reasons for reopening with notice--Newspaper reports can constitute information or material--Income-tax Act, 1961, ss. 147, 148-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

----Reason to believe that income escaped assessment--Tax deducted at source--No presumption that there was no escapement of income--Income-tax Act, 1961, s. 147-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

----Sanction of Commissioner--Findings of Additional Director typed--Does not mean sanction accorded without application of mind--Joint Director authorised to exercise power of Additional Commissioner--Sanction for issue of notice was by an appropriate authority--Income-tax Act, 1961, ss. 2(28C), 151-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

Return of income --Failure to file--Interest--Levy of interest under section 234A proper--Income-tax Act, 1961, s. 234A-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

Revision --Commissioner--Erroneous and prejudicial to Revenue--Order passed without application of mind--Liable to be revised--Industrial undertaking--Special deduction--Assessing Officer accepting nil return of assessee and allowing claim to deduction under section 80-IA without enquiry whether assessee fulfilled conditions for eligibility therefor--Revision proper--Income-tax Act, 1961, ss. 80-IA, 263-- Vodafone Essar Ltd. v. CIT (Chandigarh) . . . 147

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Double Taxation Avoidance Agreement between India and the United States of America :

Art. 12(7)(b) --Non-resident--Burden of proof--Income deemed to accrue or arise in India--Conditions precedent--Business carried on in India--Sale to party in India without operations carried out in India not business in India--Licence granted by assessee of patented CDMA technology to non-resident original equipment manufacturers to make and sell CDMA handsets and wireless equipment in consideration for royalty--Royalty determined with reference to net selling price of product to unrelated wireless carriers worldwide--Sale of products manufactured using patented technology to wireless carriers located in India for sale to end users in India--Licence not specific to any particular country--Licence not used in India--Not established that patents licensed by assessee used for installation activities in India--Patents having nothing to do with functionality of handsets--Original equipment manufacturers themselves not brought to tax--Title to equipment passing in high seas--Mere passing of title does not result in income being attributable in India--Software not provided as part of licensing of assessee’s patents--Source of royalty was place where patent exploited which was outside India--Indian telecom operators not source of income for original equipment manufacturers--Not established that original equipment manufacturers used assessee’s patents for carrying on business in India or making or earning income from source in India--Royalty paid by original equipment manufacturers to assessee not taxable-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

Income-tax Act, 1961 :

S. 2(28C) --Reassessment--Sanction of Commissioner--Findings of Additional Director typed--Does not mean sanction accorded without application of mind--Joint Director authorised to exercise power of Additional Commissioner--Sanction for issue of notice was by an appropriate authority-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

S. 2(47) --Capital gains--Transfer of asset--Date of transfer--No agreement signed or possession delivered in relevant year--Gains cannot be taxed in that year-- Additional CIT v. Delhi Apartment P. Ltd. (Delhi) . . . 217

S. 9(1)(vi)(c) --Non-resident--Burden of proof--Income deemed to accrue or arise in India--Conditions precedent--Business carried on in India--Sale to party in India without operations carried out in India not business in India--Licence granted by assessee of patented CDMA technology to non-resident original equipment manufacturers to make and sell CDMA handsets and wireless equipment in consideration for royalty--Royalty determined with reference to net selling price of product to unrelated wireless carriers worldwide--Sale of products manufactured using patented technology to wireless carriers located in India for sale to end users in India--Licence not specific to any particular country--Licence not used in India--Not established that patents licensed by assessee used for installation activities in India--Patents having nothing to do with functionality of handsets--Original equipment manufacturers themselves not brought to tax--Title to equipment passing in high seas--Mere passing of title does not result in income being attributable in India--Software not provided as part of licensing of assessee’s patents--Source of royalty was place where patent exploited which was outside India--Indian telecom operators not source of income for original equipment manufacturers--Not established that original equipment manufacturers used assessee’s patents for carrying on business in India or making or earning income from source in India--Royalty paid by original equipment manufacturers to assessee not taxable-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

S. 9(1)(vii) --Non-resident--Fees for technical services--Payments to non-resident divers under contract for provision of underwater services in Saudi Arabia--Technical fee paid to carry out business outside India for earning income from a source outside India--Assessee not liable for tax deducted at source-- Aqua Omega Services P. Ltd. v. Assistant CIT (Chennai) . . . 191

S. 45 --Capital gains--Transfer of asset--Date of transfer--No agreement signed or possession delivered in relevant year--Gains cannot be taxed in that year-- Additional CIT v. Delhi Apartment P. Ltd. (Delhi) . . . 217

S. 80-IA --Revision--Commissioner--Erroneous and prejudicial to Revenue--Order passed without application of mind--Liable to be revised--Industrial undertaking--Special deduction--Assessing Officer accepting nil return of assessee and allowing claim to deduction under section 80-IA without enquiry whether assessee fulfilled conditions for eligibility therefor--Revision proper-- Vodafone Essar Ltd. v. CIT (Chandigarh) . . . 147

S. 147 --Reassessment--Reason to believe income escaped assessment--Sufficient if one ground out of many tenable--Facts contradicting basis of belief subsequently surfacing later in course of assessment not to vitiate proceedings--No stipulation that Assessing Officer to furnish reasons for reopening with notice--Newspaper reports can constitute information or material-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

----Reassessment--Reason to believe that income escaped assessment--Tax deducted at source--No presumption that there was no escapement of income-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

S. 148 --Reassessment--Reason to believe income escaped assessment--Sufficient if one ground out of many tenable--Facts contradicting basis of belief subsequently surfacing later in course of assessment not to vitiate proceedings--No stipulation that Assessing Officer to furnish reasons for reopening with notice--Newspaper reports can constitute information or material-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

S. 151 --Reassessment--Sanction of Commissioner--Findings of Additional Director typed--Does not mean sanction accorded without application of mind--Joint Director authorised to exercise power of Additional Commissioner--Sanction for issue of notice was by an appropriate authority-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

S. 234A --Return of income--Failure to file--Interest--Levy of interest under section 234A proper-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

S. 234B --Advance tax--Interest--Assessee not liable to pay interest-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

S. 251 --Appeal to Commissioner (Appeals)--Power to enhance income--Income from different products manufactured under same licence agreement--Commissioner (Appeals) entitled to enhance income-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

S. 254 --Appeal to Appellate Tribunal--Power to admit additional grounds--Legal grounds not requiring investigation into facts--To be admitted-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

S. 263 --Revision--Commissioner--Erroneous and prejudicial to Revenue--Order passed without application of mind--Liable to be revised--Industrial undertaking--Special deduction--Assessing Officer accepting nil return of assessee and allowing claim to deduction under section 80-IA without enquiry whether assessee fulfilled conditions for eligibility therefor--Revision proper-- Vodafone Essar Ltd. v. CIT (Chandigarh) . . . 147

S. 272A(2)(k) --Penalty--Failure to file return of tax deducted at source within specified time--Penalty levied unilaterally without finding whether banks need to file statements--Statements produced by assessee uploaded by franchisee in single day for all four quarters--Particulars uploaded by franchisee without permanent account numbers of deductees--Levy of penalty not justified-- Branch Manager (TDS), UCO Bank v. Additional CIT (Cuttack) . . . 209