ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB)) -- PRINT AND ONLINE EDITION
SUBJECT INDEX TO CASES REPORTED
Business expenditure --Employees’ State insurance and employees’ contributions to provident fund--Payments made before due date for filing return--Allowable--Income-tax Act, 1961, s. 36(1)(va)-- ITO v. Onward Technologies Ltd. (Mumbai) . . . 292
Educational institution --Exemption--Conditions precedent for exemption--Existence solely for educational purposes and without profit motive--Assessee making huge profits--Not entitled to exemption--Income-tax Act, 1961, s. 10(23C)(iiiab), (iiiad)-- M. P. Rajya Open School v. Deputy CIT (Indore) . . . 313
Exemption --Export of computer software--Computation of exemption--Brought forward losses and unabsorbed depreciation not to be adjusted--To be set off against income after completion of tax holiday period--Set off of entire unabsorbed depreciation to section 10A unit in first year of claim--Not proper--Details made available by assessee--Matter remanded to Assessing Officer for fresh consideration--Income-tax Act, 1961, s. 10A-- ITO v. Onward Technologies Ltd. (Mumbai) . . . 292
----Export of computer software--Computation of exemption--Expenses to be excluded both from export turnover and total turnover--Income-tax Act, 1961, s. 10A-- ITO v. Onward Technologies Ltd. (Mumbai) . . . 292
----Export of computer software--Computation of exemption--Interest income--Interest on bank margin and letter of credit margin--Nexus with business activity of undertaking--To be included in eligible profits--Other interest to be considered as income from other sources and not to be included in eligible profits--Income-tax Act, 1961, s. 10A-- ITO v. Onward Technologies Ltd. (Mumbai) . . . 292
----Export of computer software--Computation of exemption--Miscellaneous income, finder fees and marketing fees--Close nexus with activities of undertaking--Includible in total turnover--Income-tax Act, 1961, s. 10A-- ITO v. Onward Technologies Ltd. (Mumbai) . . . 292
Volume 26 : Part 4 (Issue dated : 16-9-2013)
SUBJECT INDEX TO CASES REPORTED
Appeal to Appellate Tribunal --Power to admit additional grounds--Department not entitled to raise issue concluded in assessment as additional ground-- Syndicate Bank v. Deputy CIT (Bangalore) . . . 501
Bad debts --Bad and doubtful debts--Provision for--Banking company--Provision for bad and doubtful debts account not relevant for deduction in respect of bad debts of non-rural branches written off--Total income for purposes of computation of deduction under section 36(1)(viia) not to be restricted to total income of rural branches or to amount prescribed under RBI prudential norms--Difference between sum claimed as deduction as provision for bad and doubtful debts in respect of rural advances and sum debited to profit and loss account--To be disallowed--Income-tax Act, 1961, s. 36(1)(vii), (viia)-- Syndicate Bank v. Deputy CIT (Bangalore) . . . 501
Banking company --Business loss--Investments are stock-in-trade--Assessee entitled to value all investments at lower of cost or market value--Diminution in value of investments--Diminution in value of stock-in-trade as on last day of previous year to be allowed as deduction-- Syndicate Bank v. Deputy CIT (Bangalore) . . . 501
Business --Same business or separate businesses--Assessee engaged in production of hot briquetted sponge iron--Setting up unit for production of hot-rolled coils--Finding by Commissioner (Appeals) of integration and interlacing of units--Hot-rolled coils project to be taken as part of existing business--All revenue expenditure incurred in connection with new project to be allowed-- Deputy CIT v. Essar Steel Ltd. (Mumbai) . . . 623
Business expenditure --Accrued or contingent liability--Provision for bank’s liability to reimburse credit cardholders in respect of reward points accumulated by them--Accrued liability--Allowable-- Syndicate Bank v. Deputy CIT (Bangalore) . . . 501
----Amortisation of preliminary expenses--Expenditure incurred by banking company in connection with issue for public subscription of shares--Assessee not an industrial undertaking--That issue of share capital was for meeting working capital requirement not relevant--Expenses not allowable--Income-tax Act, 1961, ss. 35D, 37-- Syndicate Bank v. Deputy CIT (Bangalore) . . . 501
----Disallowance--Payments subject to tax deduction at source--External commercial borrowing--Interest--Not taxable in hands of recipient--No question of tax deduction at source on interest--Interest not to be disallowed--Income-tax Act, 1961, ss. 10(15)(iv)(c), 40(a)(ia)-- Deputy CIT v. Essar Steel Ltd. (Mumbai) . . . 623
----Rent paid on leasing transactions--Reduced rent debited in accounts because of long period of lease--Treatment in books of account would not alter character of expenditure--Lease rent allowable in full-- Deputy CIT v. Essar Steel Ltd. (Mumbai) . . . 623
Business income or capital gains --Trading in shares or investment--Period of holding of shares and non receipt of dividend--Not a decisive factor--No interference required--Circular No. 4 dated 15-6-2007--Income-tax Act, 1961-- Deputy CIT v. Emerging Securities P. Ltd. (Delhi) . . . 593
Capital or revenue expenditure --Expenditure incurred on expansion of existing project--Inextricable linkage with existing business--No new asset--Not capital expenditure--Income-tax Act, 1961-- Gujarat Green Revolution Co. Ltd. v. Assistant CIT (Ahmedabad) . . . 567
----Fees paid to financial institutions for loan, floating rate notes, restructuring expenses and plant repairs and maintenance--Expenses treated as deferred revenue expenditure in books but claimed as revenue expenditure in return of income--To be allowed-- Deputy CIT v. Essar Steel Ltd. (Mumbai) . . . 623
----Raising of funds by issue of bonds akin to borrowing--Stamp duty expenses incurred in issuing bonds to public--Revenue expenditure-- Syndicate Bank v. Deputy CIT (Bangalore) . . . 501
Depreciation --Additional depreciation--Assessee setting up windmill for power generation--Use of electricity in manufacturing activity of assessee not precondition for grant of additional depreciation under statute--Amendment of section 32(1)(iia) by Finance Act, 2012--Clarificatory--Assessee entitled to additional depreciation on windmill--Income-tax Act, 1961, s. 32(1)(iia)-- Deputy CIT v. Hutti Gold Mines Co. Ltd. (Bangalore) . . . 600
----Rate of depreciation--Greenhouse--Functional test to be applied--Greenhouse to be considered as plant--Depreciation allowable at rate of 25 per cent.--Income-tax Act, 1961, s. 32-- Gujarat Green Revolution Co. Ltd. v. Assistant CIT (Ahmedabad) . . . 567
----Rate of depreciation--Reach stacker--Is a crane considered as motor lorry falling under category of heavy goods vehicle--Entitled to depreciation at rate applicable to motor lorries--Reach stacker run for hire--Entitled to higher rate of depreciation--Income-tax Rules, 1962, r. 5, Appex. I, Part I, item IIIE (1a)-- FIS Logistics P. Ltd. v. Assistant CIT (Kolkata) . . . 605
----Written down value--Actual cost--Advances for acquisition of plant and machinery--Company unable to fulfil commitments and lenders waiving part of principal--Reduction of sum waived from written down value of plant and machinery--Not permissible--Income-tax Act, 1961, s. 43(1)-- Deputy CIT v. Essar Steel Ltd. (Mumbai) . . . 623
Income --Computation--Expenditure on earning exempt income--Disallowance--Matter remanded to Assessing Officer to determine expenditure adopting reasonable basis for effecting apportionment--Income-tax Act, 1961, ss. 10(23G), 14A-- Syndicate Bank v. Deputy CIT (Bangalore) . . . 501
Interest on borrowed capital --Monies advanced without interest--Notional interest--Finding of Commissioner (Appeals) that during year interest was payable by assessee to H--No disallowance--Income-tax Act, 1961, s. 36(1)(iii)-- Deputy CIT v. Essar Steel Ltd. (Mumbai) . . . 623
Method of accounting --Banking company--Consistently offering interest on securities credited to profit and loss account on cash basis--Accepted by Department in past--Interest not taxable on accrual basis-- Syndicate Bank v. Deputy CIT (Bangalore) . . . 501
Minimum alternate tax --Banking company--Special provisions not applicable--Income-tax Act, 1961, s. 115JB-- Syndicate Bank v. Deputy CIT (Bangalore) . . . 501
Search and seizure --Assessment in search cases--Abatement of assessment proceedings--Assessment completed prior to date of search would not abate--Assessment completed allowing deduction under section 80-IB--Deduction cannot be disallowed in assessment made pursuant to search--Income-tax Act, 1961, ss. 80-IB, 153A-- Dinesh Tobacco Industries v. Deputy CIT (Jodhpur) . . . 579
----Assessment in search cases--Search executed in residence of individual--Unaccounted payment--Surrender of amount taxed in individual capacity--Substantive addition in hands of assessee-firm not proper-- Dinesh Tobacco Industries v. Deputy CIT (Jodhpur) . . . 579
----Assessment in search cases--Undisclosed income--Document seized relate to unaccounted transaction in business concern--Surrender of income by individual--Income to be assessed in hands of individual on substantive basis not in hands of firm--Income-tax Act, 1961, s. 153A-- Nand Kishore Malani v. Deputy CIT (Jodhpur) . . . 613
----Assessment in search cases--Undisclosed income--Gold and silver jewellery--Quantum of jewellery can be treated as explained in accordance with circular--Income-tax Act, 1961, s. 153A--CBDT Circular No. 1916 dated 11-5-1994-- Nand Kishore Malani v. Deputy CIT (Jodhpur) . . . 613
----Assessment in search cases--Undisclosed income--Unaccounted cash--Reasonable to consider cash unexplained in hands of individual on basis of surrender--Income-tax Act, 1961, s. 153A-- Nand Kishore Malani v. Deputy CIT (Jodhpur) . . . 613
----Unaccounted investment--Trading addition on basis of estimated gross profit rate--Trading addition telescoped into addition made on account of unaccounted investment and no separate addition made--Proper-- Dinesh Tobacco Industries v. Deputy CIT (Jodhpur) . . . 579
Words and phrases --†Heavy goods vehicles†, meaning of-- FIS Logistics P. Ltd. v. Assistant CIT (Kolkata) . . . 605
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
S. 10(15)(iv)(c) --Business expenditure--Disallowance--Payments subject to tax deduction at source--External commercial borrowing--Interest--Not taxable in hands of recipient--No question of tax deduction at source on interest--Interest not to be disallowed-- Deputy CIT v. Essar Steel Ltd. (Mumbai) . . . 623
S. 10(23G) --Income--Computation--Expenditure on earning exempt income--Disallowance--Matter remanded to Assessing Officer to determine expenditure adopting reasonable basis for effecting apportionment-- Syndicate Bank v. Deputy CIT (Bangalore) . . . 501
S. 14A --Income--Computation--Expenditure on earning exempt income--Disallowance--Matter remanded to Assessing Officer to determine expenditure adopting reasonable basis for effecting apportionment-- Syndicate Bank v. Deputy CIT (Bangalore) . . . 501
S. 32 --Depreciation--Rate of depreciation--Greenhouse--Functional test to be applied--Greenhouse to be considered as plant--Depreciation allowable at rate of 25 per cent.-- Gujarat Green Revolution Co. Ltd. v. Assistant CIT (Ahmedabad) . . . 567
S. 32(1)(iia) --Depreciation--Additional depreciation--Assessee setting up windmill for power generation--Use of electricity in manufacturing activity of assessee not precondition for grant of additional depreciation under statute--Amendment of section 32(1)(iia) by Finance Act, 2012--Clarificatory--Assessee entitled to additional depreciation on windmill-- Deputy CIT v. Hutti Gold Mines Co. Ltd. (Bangalore) . . . 600
S. 35D --Business expenditure--Amortisation of preliminary expenses--Expenditure incurred by banking company in connection with issue for public subscription of shares--Assessee not an industrial undertaking--That issue of share capital was for meeting working capital requirement not relevant--Expenses not allowable-- Syndicate Bank v. Deputy CIT (Bangalore) . . . 501
S. 36(1)(iii) --Interest on borrowed capital--Monies advanced without interest--Notional interest--Finding of Commissioner (Appeals) that during year interest was payable by assessee to H--No disallowance-- Deputy CIT v. Essar Steel Ltd. (Mumbai) . . . 623
S. 36(1)(vii), (viia) --Bad debts--Bad and doubtful debts--Provision for--Banking company--Provision for bad and doubtful debts account not relevant for deduction in respect of bad debts of non-rural branches written off--Total income for purposes of computation of deduction under section 36(1)(viia) not to be restricted to total income of rural branches or to amount prescribed under RBI prudential norms--Difference between sum claimed as deduction as provision for bad and doubtful debts in respect of rural advances and sum debited to profit and loss account--To be disallowed-- Syndicate Bank v. Deputy CIT (Bangalore) . . . 501
S. 37 --Business expenditure--Amortisation of preliminary expenses--Expenditure incurred by banking company in connection with issue for public subscription of shares--Assessee not an industrial undertaking--That issue of share capital was for meeting working capital requirement not relevant--Expenses not allowable-- Syndicate Bank v. Deputy CIT (Bangalore) . . . 501
S. 40(a)(ia) --Business expenditure--Disallowance--Payments subject to tax deduction at source--External commercial borrowing--Interest--Not taxable in hands of recipient--No question of tax deduction at source on interest--Interest not to be disallowed-- Deputy CIT v. Essar Steel Ltd. (Mumbai) . . . 623
S. 43(1) --Depreciation--Written down value--Actual cost--Advances for acquisition of plant and machinery--Company unable to fulfil commitments and lenders waiving part of principal--Reduction of sum waived from written down value of plant and machinery--Not permissible-- Deputy CIT v. Essar Steel Ltd. (Mumbai) . . . 623
S. 80-IB --Search and seizure--Assessment in search cases--Abatement of assessment proceedings--Assessment completed prior to date of search would not abate--Assessment completed allowing deduction under section 80-IB--Deduction cannot be disallowed in assessment made pursuant to search-- Dinesh Tobacco Industries v. Deputy CIT (Jodhpur) . . . 579
S. 115JB --Minimum alternate tax--Banking company--Special provisions not applicable-- Syndicate Bank v. Deputy CIT (Bangalore) . . . 501
S. 153A --Search and seizure--Assessment in search cases--Abatement of assessment proceedings--Assessment completed prior to date of search would not abate--Assessment completed allowing deduction under section 80-IB--Deduction cannot be disallowed in assessment made pursuant to search-- Dinesh Tobacco Industries v. Deputy CIT (Jodhpur) . . . 579
----Search and seizure--Assessment in search cases--Undisclosed income--Document seized relate to unaccounted transaction in business concern--Surrender of income by individual--Income to be assessed in hands of individual on substantive basis not in hands of firm-- Nand Kishore Malani v. Deputy CIT (Jodhpur) . . . 613
----Search and seizure--Assessment in search cases--Undisclosed income--Gold and silver jewellery--Quantum of jewellery can be treated as explained in accordance with circular-- Nand Kishore Malani v. Deputy CIT (Jodhpur) . . . 613
----Search and seizure--Assessment in search cases--Undisclosed income--Unaccounted cash--Reasonable to consider cash unexplained in hands of individual on basis of surrender-- Nand Kishore Malani v. Deputy CIT (Jodhpur) . . . 613
R. 5, Appex. I, Part I, item IIIE (1a) --Depreciation--Rate of depreciation--Reach stacker--Is a crane considered as motor lorry falling under category of heavy goods vehicle--Entitled to depreciation at rate applicable to motor lorries--Reach stacker run for hire--Entitled to higher rate of depreciation-- FIS Logistics P. Ltd. v. Assistant CIT (Kolkata) . . . 605
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