INCOME TAX REPORTS (ITR)--PRINT AND ONLINE EDITION
SUBJECT INDEX TO CASES REPORTED
Business expenditure --Deduction only on actual payment--Year in which expenditure is allowable--Effect of section 43B--Mercantile system of accounting--Liability incurred and amount actually paid in accounting year--Amount legally due in following year--Amount deductible--Income-tax Act, 1961, s. 43B-- Paharpur Cooling Towers Ltd. v. CIT (Cal) . . . 177
----Disallowance--Deduction only on actual payment--Tax, cess or duty actually not paid in year of account--Amounts deposited by assessee in Central excise personal ledger account in terms of Central Excise Rules to cover duty liability against clearances of goods--Assessee bound by Rules to keep account in respect of each excisable product--Amount remaining outstanding in personal ledger account at end of year--Part of duty liability--Not disallowable--Income-tax Act, 1961, s. 43B-- CIT v . Maruti Suzuki India Ltd . (Delhi) . . . 187
----Disallowance--Provision for warranties--No disallowance could be made--Income-tax Act, 1961, s. 37-- CIT v . Maruti Suzuki India Ltd . (Delhi) . . . 187
Refund --Interest on excess refund received by assessee--Law applicable--Effect of insertion of Explanation 2 to section 234D--Refund granted prior to 1-6-2003 but proceedings for assessment completed after 1-6-2003--Interest payable by assessee--Income-tax Act, 1961, s. 234D-- CIT v . Indian Oil Corporation Ltd .
(Bom) . . . 198
ITR Volume 355 : Part 4 (Issue dated : 29-7-2013)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Appeal to High Court --Competency of appeal--Effect of section 268A--Tax effect less than monetary limit prescribed by CBDT--Conflicting stands by assessee before Assessing Officer and Tribunal--Appeal not maintainable--Income-tax Act, 1961, ss. 260A, 268A-- CIT v . Jugal Kishore Mahanta (Gauhati) . . . 432
----Powers of High Court--Power to frame additional question of law--High Court has power to frame additional question of law during hearing--Income-tax Act, 1961, s. 260A-- CIT v . Indo Gulf Fertilizers Ltd. (All) . . . 437
Business expenditure --Disallowance--Excessive or unreasonable payments--Tribunal finding assessee did purchases at prevailing market rates and seller incurred certain expenditure in engaging personnel in office and other operations--Section 40A(2) had no application--Income-tax Act, 1961, s. 40A(2)-- CIT v . Vijay M. Mistry Construction Ltd . (Guj) . . . 498
----Excess provision under heads “consultancy charges and professional fees†--Allowable--Income-tax Act, 1961, s. 37-- CIT v . Armour Consultants P. Ltd .
(Mad) . . . 418
----Scientific research--Assessee requesting two companies to make payments on its behalf in view of shortage of funds--Revenue not disputing fact or disproving by them--Companies obtaining receipts in their name but claiming no deduction--Assessee paying amounts subsequently to those two companies--Assessee cannot be denied deduction--Income-tax Act, 1961, s. 35(1)(ii)-- CIT v . Armour Consultants P. Ltd.
(Mad) . . . 418
Capital gains --Capital asset--Cost of acquisition--Capital asset acquired by assessee under gift--Indexed cost of acquisition--To be with reference to year in which previous owner acquired asset and not year in which assessee acquired asset--Income-tax Act, 1961, ss. 2(42A), Expln. 1(i)(b), 48-- CIT v . Manjula J. Shah (Bom) . . . 474
----Capital asset--Exclusion--Agricultural land--Meaning of--Effect of section 2(14)(b)--Land within specified distance from local limit of municipality--Not agricultural land--Gains on transfer of land--Capital gains tax leviable--Income-tax Act, 1961, ss. 2(14)(b), 45--General Clauses Act, 1897, s. 3(31)-- CIT v. Smt. Rani Tara Devi
(P&H) . . . 457
Capital or revenue expenditure --Expenses towards designing and lay out, temporary partition and construction for making leased business premises functional--Revenue expenditure--Income-tax Act, 1961-- CIT v. Armour Consultants P. Ltd .
(Mad) . . . 418
Charitable purpose --Charitable trust--Registration--Test of genuineness of activity not a ground for refusal of registration--Genuineness of objects to be tested--Registration not to be rejected on ground trust has not yet commenced charitable or religious activity--Commissioner satisfied with objects of trust for subsequent year--Refusal of registration for preceding year not justified--Exemption from application of income received by way of donation--To be decided when return is filed--Income-tax Act, 1961, s. 12AA-- Hardayal Charitable and Educational Trust v. CIT (All) . . . 534
Deduction of tax at source --Commission--Scope of section 194H--Difference between sale and agency--Sale of stamp paper to licensed vendors under U. P. Stamp Rules, 1942--Sale--Tax not deductible at source on discount on such sales--Income-tax Act, 1961, s. 194H-- Chief Treasury Officer v. Union of India (All) . . . 484
Housing project --Special deduction--Computation--Interest on delayed payment by purchasers--Balance due from contractors and suppliers--Part of income derived from development of housing project--Entitled to deduction--Income-tax Act, 1961, s. 80-IB(10)-- CIT v. Pratham Developers (Guj) . . . 507
Income from undisclosed sources --Assessee proving purchase and existence of crane--No claim of cost of crane in return and no debit in profit and loss account--No addition could be made in respect of purchase price--No material to show crane not in existence--Depreciation not disallowable--Income-tax Act, 1961-- CIT v . Vijay M. Mistry Construction Ltd. (Guj) . . . 498
----Disallowance on account of inflated purchases--Question of fact--Tribunal enhancing disallowance to twenty-five per cent. of cash withdrawals--No interference--Income-tax Act, 1961-- CIT v. Vijay M. Mistry Construction Ltd . (Guj) . . . 498
Interpretation of taxing statutes --Principle of ejusdem generis-- CIT v . Smt. Rani Tara Devi (P&H) . . . 457
----Proviso-- CIT v. Indo Gulf Fertilizers Ltd . (All) . . . 437
Offences and prosecution --Deduction of tax at source--Company--Failure to deposit tax deducted at source to credit of Central Government--Dismissal of complaint for failure by Income-tax Officer to produce documents before trial court within reasonable time--Documents in judicial custody in some other case--Prosecution case to be decided on the merits--No prejudice caused to accused if original complaint restored--Direction to restore complaint--Income-tax Act, 1961, ss. 276B, 278B-- P. Jayanandan, Income-tax Officer v . Sri Ramakrishna Steel Industries Ltd . (Mad) . . . 528
Search and seizure --Block assessment--Powers of Assessing Officer and Appellate Tribunal--Assessing Officer or Tribunal cannot consider validity of search--Income-tax Act, 1961, s. 158BC-- CIT v. Dr. A. K. Bansal (Individual) (All) . . . 513
Words and phrases --Meaning of “deemed†and “satisfied†-- CIT v. Indo Gulf Fertilizers Ltd . (All) . . . 437
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
S. 3(31) --Capital gains--Capital asset--Exclusion--Agricultural land--Meaning of--Effect of section 2(14)(b)--Land within specified distance from local limit of municipality--Not agricultural land--Gains on transfer of land--Capital gains tax leviable-- CIT v. Smt. Rani Tara Devi (P&H) . . . 457
S. 2(14)(b) --Capital gains--Capital asset--Exclusion--Agricultural land--Meaning of--Effect of section 2(14)(b)--Land within specified distance from local limit of municipality--Not agricultural land--Gains on transfer of land--Capital gains tax leviable-- CIT v. Smt. Rani Tara Devi (P&H) . . . 457
S. 2(42A), Expln. 1(i)(b) --Capital gains--Capital asset--Cost of acquisition--Capital asset acquired by assessee under gift--Indexed cost of acquisition--To be with reference to year in which previous owner acquired asset and not year in which assessee acquired asset-- CIT v . Manjula J. Shah (Bom) . . . 474
S. 12AA --Charitable purpose--Charitable trust--Registration--Test of genuineness of activity not a ground for refusal of registration--Genuineness of objects to be tested--Registration not to be rejected on ground trust has not yet commenced charitable or religious activity--Commissioner satisfied with objects of trust for subsequent year--Refusal of registration for preceding year not justified--Exemption from application of income received by way of donation--To be decided when return is filed-- Hardayal Charitable and Educational Trust v. CIT (All) . . . 534
S. 35(1)(ii) --Business expenditure--Scientific research--Assessee requesting two companies to make payments on its behalf in view of shortage of funds--Revenue not disputing fact or disproving by them--Companies obtaining receipts in their name but claiming no deduction--Assessee paying amounts subsequently to those two companies--Assessee cannot be denied deduction-- CIT v . Armour Consultants P. Ltd.
(Mad) . . . 418
S. 37 --Business expenditure--Excess provision under heads “consultancy charges and professional fees†--Allowable-- CIT v . Armour Consultants P. Ltd .
(Mad) . . . 418
S. 40A(2) --Business expenditure--Disallowance--Excessive or unreasonable payments--Tribunal finding assessee did purchases at prevailing market rates and seller incurred certain expenditure in engaging personnel in office and other operations--Section 40A(2) had no application-- CIT v . Vijay M. Mistry Construction Ltd .
(Guj) . . . 498
S. 45 --Capital gains--Capital asset--Exclusion--Agricultural land--Meaning of--Effect of section 2(14)(b)--Land within specified distance from local limit of municipality--Not agricultural land--Gains on transfer of land--Capital gains tax leviable-- CIT v. Smt. Rani Tara Devi (P&H) . . . 457
S. 48 --Capital gains--Capital asset--Cost of acquisition--Capital asset acquired by assessee under gift--Indexed cost of acquisition--To be with reference to year in which previous owner acquired asset and not year in which assessee acquired asset-- CIT v . Manjula J. Shah (Bom) . . . 474
S. 80-IB(10) --Housing project--Special deduction--Computation--Interest on delayed payment by purchasers--Balance due from contractors and suppliers--Part of income derived from development of housing project--Entitled to deduction-- CIT v. Pratham Developers (Guj) . . . 507
S. 158BC --Search and seizure--Block assessment--Powers of Assessing Officer and Appellate Tribunal--Assessing Officer or Tribunal cannot consider validity of search-- CIT v. Dr. A. K. Bansal (Individual) (All) . . . 513
S. 194H --Deduction of tax at source--Commission--Scope of section 194H--Difference between sale and agency--Sale of stamp paper to licensed vendors under U. P. Stamp Rules, 1942--Sale--Tax not deductible at source on discount on such sales-- Chief Treasury Officer v. Union of India (All) . . . 484
S. 260A --Appeal to High Court--Competency of appeal--Effect of section 268A--Tax effect less than monetary limit prescribed by CBDT--Conflicting stands by assessee before Assessing Officer and Tribunal--Appeal not maintainable-- CIT v . Jugal Kishore Mahanta (Gauhati) . . . 432
----Appeal to High Court--Powers of High Court--Power to frame additional question of law--High Court has power to frame additional question of law during hearing-- CIT v . Indo Gulf Fertilizers Ltd. (All) . . . 437
S. 268A --Appeal to High Court--Competency of appeal--Effect of section 268A--Tax effect less than monetary limit prescribed by CBDT--Conflicting stands by assessee before Assessing Officer and Tribunal--Appeal not maintainable-- CIT v . Jugal Kishore Mahanta (Gauhati) . . . 432
S. 276B --Offences and prosecution--Deduction of tax at source--Company--Failure to deposit tax deducted at source to credit of Central Government--Dismissal of complaint for failure by Income-tax Officer to produce documents before trial court within reasonable time--Documents in judicial custody in some other case--Prosecution case to be decided on the merits--No prejudice caused to accused if original complaint restored--Direction to restore complaint-- P. Jayanandan, Income-tax Officer v . Sri Ramakrishna Steel Industries Ltd . (Mad) . . . 528
S. 278B --Offences and prosecution--Deduction of tax at source--Company--Failure to deposit tax deducted at source to credit of Central Government--Dismissal of complaint for failure by Income-tax Officer to produce documents before trial court within reasonable time--Documents in judicial custody in some other case--Prosecution case to be decided on the merits--No prejudice caused to accused if original complaint restored--Direction to restore complaint-- P. Jayanandan, Income-tax Officer v . Sri Ramakrishna Steel Industries Ltd . (Mad) . . . 528
ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB)) -- PRINT AND ONLINE EDITION
SUBJECT INDEX TO CASES REPORTED
Business expenditure --Disallowance--Payments liable to deduction of tax at source--Payment to foreign company for advertising services rendered through search engine--Business profits--Foreign company having no permanent establishment in India--Payment not taxable in India and no tax deductible at source--Payment allowable--Income-tax Act, 1961, ss. 9(1)(vi), 40(a)(i)-- Pinstorm Technologies P. Ltd. v. ITO (Mumbai) . . . 146
Non-resident --Taxability in India--Permanent establishment--Assessee entering into three contracts in India--Duration of each contract less than 9 months--No permanent establishment of assessee in India--Assessee not taxable in India--Double Taxation Avoidance Agreement between India and Mauritius, arts. 5, 7 -- Deputy CIT v. J. Ray McDerrmott Eastern Hemisphere Ltd. (Mumbai) . . . 141
Volume 25 : Part 3 (Issue dated : 29-7-2013)
SUBJECT INDEX TO CASES REPORTED
Business expenditure --Assessee having arrangements with suppliers for purchasing a predetermined number of parts and components--Compensation paid to vendors for deficiency in lifting contracted quantum--Compensation related to purchase of raw material, which was to become a part of running stock of assessee--Revenue expenditure and allowable-- Ford India P. Ltd. v. Deputy CIT, Large Taxpayer Unit (Chennai) . . . 456
----Fines and penalties--Penalty paid under Central excise and service tax law--Nothing to show payments were not for infringement of law--Payments to be disallowed--Income-tax Act, 1961, s. 37, Expln. -- Ford India P. Ltd. v. Deputy CIT, Large Taxpayer Unit (Chennai) . . . 456
Business loss --Provision towards doubtful advances written off as irrecoverable--Nothing to prove actual write-off--Mere provision in accounts not equivalent to write-off--Addition rightly made-- Ford India P. Ltd. v. Deputy CIT, Large Taxpayer Unit (Chennai) . . . 456
Capital gains --Cost of acquisition--Cost of improvement--Small construction consisting of two rooms made of hollow bricks--No evidence of making any improvement after purchase--No mention of existing house in sale deed--No deduction for cost of improvement to be allowed--Income-tax Act, 1961, s. 48-- Smt. Usharani Kalidindi v. ITO (Hyderabad) . . . 409
----Long-term capital gains--Exemption--Purchase of residential house--House must be inhabitable--Unit should have had basic amenities like a place for cooking, toilet and bathroom, approach road within plot--No evidence of grant of electricity or telephone or water connection--Exemption cannot be granted--Income-tax Act, 1961, s. 54F-- Smt. Usharani Kalidindi v. ITO (Hyderabad) . . . 409
Capital or revenue expenditure --Software purchases--Disallowance as capital expenditure restricted pursuant to direction of Dispute Resolution Panel--Proper--Depreciation to be allowed-- Sandoz P. Ltd. v. Deputy CIT (Mumbai) . . . 347
----Subsidy received under scheme clearly mentioning that it was given as special incentive for boosting mega investments in State--Capital receipt-- Ford India P. Ltd. v. Deputy CIT, Large Taxpayer Unit (Chennai) . . . 456
Cash credits --Burden of proof--Is on assessee to prove genuineness of transaction and capacity of creditor--Merely establishing their identities and creditworthiness to some extent--Not sufficient--Income-tax Act, 1961, s. 68-- Smt. Usharani Kalidindi v. ITO (Hyderabad) . . . 409
Deduction of tax at source --Failure to deduct tax--Lease premium paid in four instalments--Is capital expenditure not falling under section 194-I--No liability to deduct tax--Not a case of default by assessee--Income-tax Act, 1961, s. 194-I-- ITO v. Indian Newspapers Society (Delhi) . . . 377
----Failure to deduct tax--Notice under sections 201 and 201(1A) by Assessing Officer for not deducting tax at source on lease premium--Period of limitation under section 201(3)--Finding by Commissioner (Appeals) that order passed beyond period of limitation--Proper--Income-tax Act, 1961, ss. 194-I, 201(1A)-- ITO v. Indian Newspapers Society (Delhi) . . . 377
Exemption --Export of computer software--Loss incurred by one unit--Assessee entitled to deduction in respect of profits of eligible units and set-off of loss sustained by other unit against normal business income--Provisions of section 14A not attracted--Income-tax Act, 1961, ss. 10B, 14A-- Sandoz P. Ltd. v. Deputy CIT (Mumbai) . . . 347
International transaction --Arm's length price--Failure by assessee to report brand promotion exercise as international transaction--Transaction coming to notice of Transfer Pricing Officer only during proceedings before him--Transfer Pricing Officer can consider such transaction--Income-tax Act, 1961, ss. 92CA(2B), 92E-- Ford India P. Ltd. v. Deputy CIT, Large Taxpayer Unit (Chennai) . . . 456
----Arm's length price--Determination--Assessee, wholly owned subsidiary of U.S.A. company licensed to manufacture motor vehicles using technical know-how supplied by it--Assessee to pay royalty in consideration of grant of licence--Licensed products, motor vehicles, to carry logo--Department not showing what normal sales if normal advertising and sales promotion expenditure alone was incurred would have been and additional sales on account of excess advertising and sales promotion expenditure expenses--Not entitled to say there was separate brand building arising out of normal sales and arising out of additional sales--Nothing to show assessee incurred advertising and sales promotion expenditure over and above that by similarly placed other companies having no associated enterprise dealings--U. S. A. company not charging assessee royalty for use of its logo--Artificial split on marketing intangible in nature of brand building unwarranted--Objective criteria of excess advertising and sales promotion expenditure incurred by assessee when compared to its competitors not having a foreign brand or logo--Addition considering one per cent. of sales as brand development fee justified--Discounts given under schemes of sales promotion, remuneration to sales consultants, expenses incurred for customer survey, to be excluded from advertising and sales promotion expenditure--Sales expenditure, which had no connection with building of logo but directly in connection with sales to be excluded--Comparable domestic cases not using foreign brand alone to be considered--Transfer Pricing Officer to identify set of comparables--Both assessee as well as the U. S. A. company benefitted from product development expenditure incurred--U.S.A. company and assessee separate legal entities having separate legal existence--50 per cent. of advantage derived on account of product development spending to be treated as enuring to assessee and balance 50 per cent. to U.S.A. company--Income-tax act, 1961, ss. 92C(1), (2), prov., (3), 92CA-- Ford India P. Ltd. v. Deputy CIT, Large Taxpayer Unit (Chennai) . . . 456
----Arm's length price--Determination--Most appropriate method--Transfer Pricing Officer adopting cost plus method but not taking second and third steps in determination of gross profit mark-up and applying it to results--Order not void ab initio--"Bright line" test applied by Transfer Pricing Officer falls within method prescribed--Income-tax Act, 1961, s. 92C--Income-tax Rules, 1962, r. 10B(1)(c)-- Ford India P. Ltd. v. Deputy CIT, Large Taxpayer Unit (Chennai) . . . 456
----Arm's length price--Determination--Selection of comparables--Transfer Pricing Officer selecting four comparables along with CRISIL--Dispute Resolution Panel selecting two comparables and computing new arithmetic mean--Exclusion of leading company as too large--One comparable company alone to be taken--Benefit of five per cent. variation not available where only one comparable chosen--Income-tax Act, 1961, s. 92C(2)-- IIML Asset Advisors Ltd. v. Assistant CIT (Mumbai) . . . 369
----Arm's length price--Determination--Transactional net margin method--Assessee operating in four different independent segments--Submitting segmental accounts for each operation--Each segment to be considered with corresponding comparables after proper functions, assets and risks analysis--Weighted average method of arriving at profit margin not proper--Adjustment on entire turnover of assessee including transactions with non-associated enterprises not proper--No discussion in Transfer Pricing Officer's order why comparables of assessee were rejected or why other comparables accepted--Adjustments on reimbursements of expenditure part of segments already considered--Double addition--Order of Transfer Pricing Officer with consequential orders of Assessing Officer and Dispute Resolution Panel set aside and matter remanded to Assessing Officer for fresh transfer pricing analysis-- Sandoz P. Ltd. v. Deputy CIT (Mumbai) . . . 347
----Arm's length price--Determination--Transfer Pricing Officer selecting eight comparables--Tribunal accepting only one of eight comparables for preceding year--For this year also, one comparable alone to be taken--Operating profit to cost ratio to be accordingly modified--Benefit of plus or minus five per cent. adjustment not available where only one comparable chosen--No facts brought by assessee for quantification of risk adjustment--No adjustment to be allowed--Income-tax Act, 1961, s. 92CA(3)-- General Atlantic P. Ltd. v. Assistant CIT (OSD) (Mumbai) . . . 389
----Definition--Assessee, wholly owned subsidiary of U.S.A. company licensed to manufacture motor vehicles using technical know-how supplied by it--assessee to pay royalty in consideration of grant of licence--Licensed products, motor vehicles, to carry logo--Total ownership and control exercised by U. S. A. company over assessee--Inference that advertising and sales promotion expenses incurred based on a corporate plan of U. S. A. company--International transaction for creating and improving marketing intangible comprised in logo by assessee for and on behalf of U.S.A. company--Transaction of brand building rightly treated as an international transaction--Income-tax Act, 1961, s. 92F(v)-- Ford India P. Ltd. v. Deputy CIT, Large Taxpayer Unit (Chennai) . . . 456
Method of accounting --Valuation of closing stock--Increase on account of unutilised Modvat--Corresponding opening stock of that year to be increased-- Sandoz P. Ltd. v. Deputy CIT (Mumbai) . . . 347
Rectification of mistakes --Return of income--Omission to claim exemption not a case of incorrect claim--Assessing Officer has no power under section 154 to correct return--Rectification application not maintainable--Income-tax Act, 1961, ss. 143(1), 154-- Jhansi Development Authority v. Deputy CIT (Agra) . . .338
Words and phrases --“Residential house"-- Smt. Usharani Kalidindi v. ITO (Hyderabad) . . . 409
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
S. 10B --Exemption--Export of computer software--Loss incurred by one unit--Assessee entitled to deduction in respect of profits of eligible units and set-off of loss sustained by other unit against normal business income--Provisions of section 14A not attracted-- Sandoz P. Ltd. v. Deputy CIT (Mumbai) . . . 347
S. 14A --Exemption--Export of computer software--Loss incurred by one unit--Assessee entitled to deduction in respect of profits of eligible units and set-off of loss sustained by other unit against normal business income--Provisions of section 14A not attracted-- Sandoz P. Ltd. v. Deputy CIT (Mumbai) . . . 347
S. 37, Expln. --Business expenditure--Fines and penalties--Penalty paid under Central excise and service tax law--Nothing to show payments were not for infringement of law--Payments to be disallowed-- Ford India P. Ltd. v. Deputy CIT, Large Taxpayer Unit (Chennai) . . . 456
S. 48 --Capital gains--Cost of acquisition--Cost of improvement--Small construction consisting of two rooms made of hollow bricks--No evidence of making any improvement after purchase--No mention of existing house in sale deed--No deduction for cost of improvement to be allowed-- Smt. Usharani Kalidindi v. ITO (Hyderabad) . . . 409
S. 54F --Capital gains--Long-term capital gains--Exemption--Purchase of residential house--House must be inhabitable--Unit should have had basic amenities like a place for cooking, toilet and bathroom, approach road within plot--No evidence of grant of electricity or telephone or water connection--Exemption cannot be granted-- Smt. Usharani Kalidindi v. ITO (Hyderabad) . . . 409
S. 68 --Cash credits--Burden of proof--Is on assessee to prove genuineness of transaction and capacity of creditor--Merely establishing their identities and creditworthiness to some extent--Not sufficient-- Smt. Usharani Kalidindi v. ITO (Hyderabad) . . . 409
S. 92C --International transactions--Arm's length price--Determination--Most appropriate method--Transfer Pricing Officer adopting cost plus method but not taking second and third steps in determination of gross profit mark-up and applying it to results--Order not void ab initio--"Bright line" test applied by Transfer Pricing Officer falls within method prescribed-- Ford India P. Ltd. v. Deputy CIT, Large Taxpayer Unit (Chennai) . . . 456
S. 92C(1), (2), prov., (3) --International transactions--Arm's length price--Determination--Assessee, wholly owned subsidiary of U.S.A. company licensed to manufacture motor vehicles using technical know-how supplied by it--Assessee to pay royalty in consideration of grant of licence--Licensed products, motor vehicles, to carry logo--Department not showing what normal sales if normal advertising and sales promotion expenditure alone was incurred would have been and additional sales on account of excess advertising and sales promotion expenditure expenses--Not entitled to say there was separate brand building arising out of normal sales and arising out of additional sales--Nothing to show assessee incurred advertising and sales promotion expenditure over and above that by similarly placed other companies having no associated enterprise dealings--U. S. A. company not charging assessee royalty for use of its logo--Artificial split on marketing intangible in nature of brand building unwarranted--Objective criteria of excess advertising and sales promotion expenditure incurred by assessee when compared to its competitors not having a foreign brand or logo--Addition considering one per cent. of sales as brand development fee justified--Discounts given under schemes of sales promotion, remuneration to sales consultants, expenses incurred for customer survey, to be excluded from advertising and sales promotion expenditure--Sales expenditure, which had no connection with building of logo but directly in connection with sales to be excluded--Comparable domestic cases not using foreign brand alone to be considered--Transfer Pricing Officer to identify set of comparables--Both assessee as well as the U. S. A. company benefitted from product development expenditure incurred--U.S.A. company and assessee separate legal entities having separate legal existence--50 per cent. of advantage derived on account of product development spending to be treated as enuring to assessee and balance 50 per cent. to U. S. A. company-- Ford India P. Ltd. v. Deputy CIT, Large Taxpayer Unit (Chennai) . . . 456
S. 92C(2) --International transactions--Arm's length price--Determination--Selection of comparables--Transfer Pricing Officer selecting four comparables along with CRISIL--Dispute Resolution Panel selecting two comparables and computing new arithmetic mean--Exclusion of leading company as too large--One comparable company alone to be taken--Benefit of five per cent. variation not available where only one comparable chosen-- IIML Asset Advisors Ltd. v. Assistant CIT (Mumbai) . . . 369
S. 92CA --International transactions--Arm's length price--Determination--Assessee, wholly owned subsidiary of U.S.A. company licensed to manufacture motor vehicles using technical know-how supplied by it--Assessee to pay royalty in consideration of grant of licence--Licensed products, motor vehicles, to carry logo--Department not showing what normal sales if normal advertising and sales promotion expenditure alone was incurred would have been and additional sales on account of excess advertising and sales promotion expenditure expenses--Not entitled to say there was separate brand building arising out of normal sales and arising out of additional sales--Nothing to show assessee incurred advertising and sales promotion expenditure over and above that by similarly placed other companies having no associated enterprise dealings--U. S. A. company not charging assessee royalty for use of its logo--Artificial split on marketing intangible in nature of brand building unwarranted--Objective criteria of excess advertising and sales promotion expenditure incurred by assessee when compared to its competitors not having a foreign brand or logo--Addition considering one per cent. of sales as brand development fee justified--Discounts given under schemes of sales promotion, remuneration to sales consultants, expenses incurred for customer survey, to be excluded from advertising and sales promotion expenditure--Sales expenditure, which had no connection with building of logo but directly in connection with sales to be excluded--Comparable domestic cases not using foreign brand alone to be considered--Transfer Pricing Officer to identify set of comparables--Both assessee as well as the U. S. A. company benefitted from product development expenditure incurred--U.S.A. company and assessee separate legal entities having separate legal existence--50 per cent. of advantage derived on account of product development spending to be treated as enuring to assessee and balance 50 per cent. to U. S. A. company-- Ford India P. Ltd. v. Deputy CIT, Large Taxpayer Unit (Chennai) . . . 456
S. 92CA(2B) --International transaction--Arm's length price--Failure by assessee to report brand promotion exercise as international transaction--Transaction coming to notice of Transfer Pricing Officer only during proceedings before him--Transfer Pricing Officer can consider such transaction--Income-tax Act, 1961, Ford India P. Ltd. v. Deputy CIT, Large Taxpayer Unit (Chennai) . . . 456
S. 92CA(3) --International transactions--Arm's length price--Determination--Transfer Pricing Officer selecting eight comparables--Tribunal accepting only one of eight comparables for preceding year--For this year also, one comparable alone to be taken--Operating profit to cost ratio to be accordingly modified--Benefit of plus or minus five per cent. adjustment not available where only one comparable chosen--No facts brought by assessee for quantification of risk adjustment--No adjustment to be allowed-- General Atlantic P. Ltd. v. Assistant CIT (OSD) (Mumbai) . . . 389
S. 92E --International transaction--Arm's length price--Failure by assessee to report brand promotion exercise as international transaction--Transaction coming to notice of Transfer Pricing Officer only during proceedings before him--Transfer Pricing Officer can consider such transaction-- Ford India P. Ltd. v. Deputy CIT, Large Taxpayer Unit (Chennai) . . . 456
S. 92F(v) --International transactions--Definition--Assessee, wholly owned subsidiary of U.S.A. company licensed to manufacture motor vehicles using technical know-how supplied by it--assessee to pay royalty in consideration of grant of licence--Licensed products, motor vehicles, to carry logo--Total ownership and control exercised by U. S. A. company over assessee--Inference that advertising and sales promotion expenses incurred based on a corporate plan of U. S. A. company--International transaction for creating and improving marketing intangible comprised in logo by assessee for and on behalf of U.S.A. company--Transaction of brand building rightly treated as an international transaction-- Ford India P. Ltd. v. Deputy CIT, Large Taxpayer Unit (Chennai) . . . 456
S. 143(1) --Rectification of mistakes--Return of income--Omission to claim exemption not a case of incorrect claim--Assessing Officer has no power under section 154 to correct return--Rectification application not maintainable-- Jhansi Development Authority v. Deputy CIT (Agra) . . .338
S. 154 --Rectification of mistakes--Return of income--Omission to claim exemption not a case of incorrect claim--Assessing Officer has no power under section 154 to correct return--Rectification application not maintainable-- Jhansi Development Authority v. Deputy CIT (Agra) . . .338
S. 194-I --Deduction of tax at source--Failure to deduct tax--Lease premium paid in four instalments--Is capital expenditure not falling under section 194-I--No liability to deduct tax--Not a case of default by assessee-- ITO v. Indian Newspapers Society (Delhi) . . . 377
----Deduction of tax at source--Failure to deduct tax--Notice under sections 201 and 201(1A) by Assessing Officer for not deducting tax at source on lease premium--Period of limitation under section 201(3)--Finding by Commissioner (Appeals) that order passed beyond period of limitation--Proper-- ITO v. Indian Newspapers Society (Delhi) . . . 377
S. 201(1A) --Deduction of tax at source--Failure to deduct tax--Notice under sections 201 and 201(1A) by Assessing Officer for not deducting tax at source on lease premium--Period of limitation under section 201(3)--Finding by Commissioner (Appeals) that order passed beyond period of limitation--Proper-- ITO v. Indian Newspapers Society (Delhi) . . . 377
R. 10B(1)(c) --International transactions--Arm's length price--Determination--Most appropriate method--Transfer Pricing Officer adopting cost plus method but not taking second and third steps in determination of gross profit mark-up and applying it to results--Order not void ab initio--"Bright line" test applied by Transfer Pricing Officer falls within method prescribed-- Ford India P. Ltd. v. Deputy CIT, Large Taxpayer Unit (Chennai) . . . 456
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