ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB)) -- PRINT AND ONLINE EDITION
SUBJECT INDEX TO CASES REPORTED
Dividend --Deemed dividend--Loan to shareholder having voting power exceeding 10 per cent.--Contention that if shares belonging to trust excluded, shareholding would be less than ten per cent.--Notarised trust deed and copy of board resolution of company produced in support of contention--Deeming fiction to be strictly construed--Loan not assessable as deemed dividend--Income-tax Act, 1961 , s. 2(22)(e) -- Krupeshbhai N. Patel v. Deputy CIT (Ahmedabad) . . . 325
Loss --Short-term capital loss--Sale of units of mutual funds--Purchases of units within period of three months prior to record date and sale within period of nine months from record date--Meaning of “within a period of three months prior to record date†--Condition under section 94(7)(b)(ii) fulfilled--Disallowance of short-term capital loss justified--Income-tax Act, 1961 , s. 94(7) -- Krupeshbhai N. Patel v. Deputy CIT (Ahmedabad) . . . 325
Search and seizure --Assessment--Sale consideration of land--Additions on basis of notings on loose papers found during scrutiny--No direct evidence about receiving money--Addition not justified--Income-tax Act, 1961 -- Krupeshbhai N. Patel v. Deputy CIT (Ahmedabad) . . . 325
Volume 26 : Part 5 (Issue dated : 23-9-2013)
SUBJECT INDEX TO CASES REPORTED
Business expenditure --Disallowance--Payments liable to deduction of tax at source--Commission or brokerage--Assessee, a distributor of SIM cards carrying out sale of SIM cards through dealers--Payments to dealers for activation--Are in the nature of commission or brokerage liable to tax deduction at source--Assessee failing to deduct tax at source--Expenditure not allowable under section 40(a)(ia)--Income-tax Act, 1961, ss. 40(a)(ia), 194H-- ITO v. Smart Distributors (Chandigarh) . . . 660
----Employees’ and employer’s contributions to employees’ State insurance and provident fund--Payments made before due date for filing return--Allowable--Income-tax Act, 1961, s. 36(1)(va)-- Onward Technologies Ltd. v. Deputy CIT (OSD) (Mumbai) . . . 734
----Expenses incurred on food and beverages--Failure to pay fringe benefit tax--Finding that 20 per cent. disallowance reasonable on provisions of fringe benefit tax--Justified--Income-tax Act, 1961, s. 115WB(2)-- Diamond Carpet v. Additional CIT (Agra) . . . 689
----Expenses necessary for purpose of business--Expenses incurred by manufacturer of carpets on erection of looms--Expenditure cannot be disallowed on whole--Expenditure allowable on basis of proportion of loom expenditure to gross profit in earlier year--Income-tax Act, 1961-- Diamond Carpet v. Additional CIT (Agra) . . . 689
----Interest on borrowed capital--Interest free loan given to partner--No details of own funds--Matter remanded for decision afresh on basis of formula laid down by Tribunal-- Diamond Carpet v. Additional CIT (Agra) . . . 689
Capital gains --Exemption--Sale of property and investment of consideration in purchase or construction of residential house--Provision to be liberally construed--Document not revealing actual date and amount of purchase--Assessee to place supporting evidence regarding date and amount of investment towards purchase--Matter remanded--Income-tax Act, 1961, s. 54F-- Narasimha Raju Rudra Raju v. Assistant CIT (Hyderabad) . . . 681
Capital or revenue expenditure --Expenditure for renovating rented office premises--Finding that it was difficult to bifurcate expenditure into revenue and capital and therefore 50 per cent. treated as capital expenditure and balance as revenue--Proper-- SICOM Ltd. v. Joint CIT (Mumbai) . . . 706
----Expenditure incurred on introducing compact spinning system--Revenue expenditure--Income-tax Act, 1961-- Assistant CIT v. Prabhu Spinning Mills P. Ltd. (Chennai) . . . 795
----Expenditure on installation of light fixtures and fittings, repairs and replacement of small electrical fittings--Expenses in nature of preserving and maintaining existing assets or of repairs--No new asset or any enduring benefit derived by assessee--Expenditure not capital in nature-- SICOM Ltd. v. Joint CIT (Mumbai) . . . 706
Cash credits --Company--Sums shown as share application money--Shareholders filing confirmation letters--Income-tax returns of shareholders accepted--Department cannot thereafter, without showing money emanated from assessee’s hands, tax sums as unexplained credits--Income-tax Act, 1961, s. 68-- Assistant CIT v. AMR Hospitality Services Ltd. (Hyderabad) . . . 758
Company --Book profit--Computation--Provision for bad debt and provision for leave salary--Not be included--Income-tax Act, 1961, s. 115J-- SICOM Ltd. v. Joint CIT (Mumbai) . . . 706
Depreciation --Assets forming part of block of assets and depreciation allowed in earlier years--Depreciation not to be disallowed on opening written down value--Income-tax Act, 1961, s. 32-- SICOM Ltd. v. Joint CIT (Mumbai) . . . 706
----Lease transactions--Finding that assets owned by assessee and under lease agreement assessee having right to repossess assets and assets to revert back to assessee at end of lease period--Disallowance not to be disallowed--Income-tax Act, 1961, s. 32-- SICOM Ltd. v. Joint CIT (Mumbai) . . . 706
----Ownership of asset--No evidence regarding ownership of car and use for business purpose--Depreciation not allowable--Income-tax Act, 1961, s. 32-- Diamond Carpet v. Additional CIT (Agra) . . . 689
----Sale and leaseback--Transaction of sale and leaseback taking place in preceding previous year and depreciation allowed and asset forming part of block of assets--Disallowance not proper--Commissioner (Appeals) judging genuineness of sale transactions without adverse material brought by Assessing Officer--Asset purchased and leased back to party--Assets belonging to assessee and assessee having right of reversion of possession at end of lease period--Matter remanded to Assessing Officer to examine issue of sale and leaseback agreement afresh-- SICOM Ltd. v. Joint CIT (Mumbai) . . . 706
Exemption --Export of computer software--Interest income--To be considered as income from other sources--Not eligible for exemption--Inclusion of finder fees and marketing fees in total turnover--Proper--Inclusion of expenditure incurred in foreign currency in total turnover--Not justified--Income-tax Act, 1961, s. 10A-- Onward Technologies Ltd. v. Deputy CIT (OSD) (Mumbai) . . . 734
----Interest earned by infrastructure capital fund or company--Notification by Government not received at time of assessment--Appeal--Notification received--Matter remanded for grant of exemption after verification of notification--Income-tax Act, 1961, s. 10(23G)-- SICOM Ltd. v. Joint CIT (Mumbai) . . . 706
Income --Computation--Income not includible in total income--Disallowance of expenditure--Shares held as stock in trade--Rule 8D(2)(ii) and (iii) cannot have application--Section 14A applicable--Disallowance of sum estimated at 10 per cent. of dividend earned proper--Income-tax Act, 1961, s. 14A--Income-tax Rules, 1962 r. 8D-- Deputy CIT v. Gulshan Investment Co. Ltd. (Kolkata) . . . 674
----Disallowance of expenditure related to exempt income--Disallowance to be worked out on reasonable basis--Dividend--No borrowed funds utilised for making investment in shares--Assessee buying shares in companies by way of financing to promote industrial development--Administrative costs--One per cent. to be disallowed as administrative expenses for purpose of earning exempt income--Income-tax Act, 1961, ss. 14A, 10(33)-- SICOM Ltd. v. Joint CIT (Mumbai) . . . 706
----Undertaking set up by Government for providing finance for industrial development--Port development programme of Government--Survey charges incurred and to be recovered from successful bidders--Expenses incurred in assessment year--Assessee debiting expenses to profit and loss account and claiming them as expenses and as and when recovered offering tax--Permissible--Expenses incurred in pursuance of activities assigned to assessee--Expenses offered for tax in year when recovered--Not to be disallowed in this year-- SICOM Ltd. v. Joint CIT (Mumbai) . . . 706
Income-tax --General principles--Res judicata--No estoppel against provisions of Act--Authorities clearly taking incorrect view in earlier year--Not stopped from taking correct view of statutory provisions in later year--Method employed by assessee for determining arm’s length price of international transactions contrary to statutory provisions--Assessee not entitled to continue calculating arm’s length price in erroneous manner-- Onward Technologies Ltd. v. Deputy CIT (OSD) (Mumbai) . . . 734
----General principles--Res judicata--Principle of consistency-- SICOM Ltd. v. Joint CIT (Mumbai) . . . 706
Intercorporate dividend --Special dividend--Borrowings of assessee not utilised for making investment in shares--Interest on borrowings and other expenditure allowable as deduction while computing business income--Expenditure could not once again be deducted from dividend income for purpose of computing deduction under section 80M--Deduction to be granted with reference to gross dividend--Income-tax Act, 1961, s. 80M-- SICOM Ltd. v. Joint CIT (Mumbai) . . . 706
Interest-tax --Credit institution--Definition--Finance company--Leasing company--Matter remanded for recording finding whether principally granting operating leases or finance leases--Thereafter decision to be arrived at whether assessee is credit institution--Interest-tax Act, 1974, s. 2(5B)-- Gujarat Gas Financial Services Ltd. v. Assistant CIT [SB] (Ahmedabad) . . . 775
International transactions --Arm’s length price--Determination--Impermissible to adopt combination of prescribed methods or altogether unprescribed method--Overall profit of group as whole cannot be considered for determination of arm’s length price--Mixing transactional net margin method and cost plus method in determining its arm’s length price--Not proper--Transactional net margin method--Comparable cases must be those engaged in similar business as assessee--Transfer Pricing Officer accepting as at arm’s length transactions of two segments--Determination of arm’s length price for third segment--Figures of two segments cannot be taken--Figures of relevant segment alone to be considered--Income-tax Act, 1961, ss. 92(1), 92B, 92C(1)--Income-tax Rules, 1962, r. 10B-- Onward Technologies Ltd. v. Deputy CIT (OSD) (Mumbai) . . . 734
----Arm’s length price--International transaction--Definition--Calculation of profit earned by assessee from transaction with associated enterprise--Only from transaction between two or more associated enterprises--Profit realised by foreign associated enterprise from ultimate customers--Not permissible to consider--Selection of foreign associated enterprise as tested party not permissible--Income-tax Act, 1961, ss. 92(1), 92B, 92C(1)--Income-tax Rules, 1962, r. 10B-- Onward Technologies Ltd. v. Deputy CIT (OSD) (Mumbai) . . . 734
Reassessment --Notice--Income escaping assessment--Details given not enough to establish transaction in nature of accommodation entries--Reasons do not satisfy requirement of section 147--Income-tax Act, 1961, ss. 147, 148-- ITO v. On Exim P. Ltd. (Delhi) . . . 697
----Notice--Validity--Incorrect address--Notice to be sent at address given in record of Income-tax Department--Income-tax Act, 1961, s. 148-- ITO v. On Exim P. Ltd. (Delhi) . . . 697
----Notice--Validity--Notice signed on March 31 but handed over to postal authority on April 1--Beyond period of limitation--Income-tax Act, 1961, ss. 148, 149-- ITO v. On Exim P. Ltd. (Delhi) . . . 697
Revision --Commissioner--Condition precedent--Order under revision should be erroneous and prejudicial to interests of Revenue--Income-tax Act, 1961, s. 263-- Mihir J. Doshi v. Assistant CIT (Mumbai) . . . 652
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
S. 10(23G) --Exemption--Interest earned by infrastructure capital fund or company--Notification by Government not received at time of assessment--Appeal--Notification received--Matter remanded for grant of exemption after verification of notification-- SICOM Ltd. v. Joint CIT (Mumbai) . . . 706
S. 10(33) --Income--Disallowance of expenditure related to exempt income--Disallowance to be worked out on reasonable basis--Dividend--No borrowed funds utilised for making investment in shares--Assessee buying shares in companies by way of financing to promote industrial development--Administrative costs--One per cent. to be disallowed as administrative expenses for purpose of earning exempt income-- SICOM Ltd. v. Joint CIT (Mumbai) . . . 706
S. 10A --Exemption--Export of computer software--Interest income--To be considered as income from other sources--Not eligible for exemption--Inclusion of finder fees and marketing fees in total turnover--Proper--Inclusion of expenditure incurred in foreign currency in total turnover--Not justified-- Onward Technologies Ltd. v. Deputy CIT (OSD) (Mumbai) . . . 734
S. 14A --Income--Computation--Income not includible in total income--Disallowance of expenditure--Shares held as stock in trade--Rule 8D(2)(ii) and (iii) cannot have application--Section 14A applicable--Disallowance of sum estimated at 10 per cent. of dividend earned proper-- Deputy CIT v. Gulshan Investment Co. Ltd. (Kolkata) . . . 674
----Income--Disallowance of expenditure related to exempt income--Disallowance to be worked out on reasonable basis--Dividend--No borrowed funds utilised for making investment in shares--Assessee buying shares in companies by way of financing to promote industrial development--Administrative costs--One per cent. to be disallowed as administrative expenses for purpose of earning exempt income-- SICOM Ltd. v. Joint CIT (Mumbai) . . . 706
S. 32 --Depreciation--Assets forming part of block of assets and depreciation allowed in earlier years--Depreciation not to be disallowed on opening written down value-- SICOM Ltd. v. Joint CIT (Mumbai) . . . 706
----Depreciation--Lease transactions--Finding that assets owned by assessee and under lease agreement assessee having right to repossess assets and assets to revert back to assessee at end of lease period--Disallowance not to be disallowed-- SICOM Ltd. v. Joint CIT (Mumbai) . . . 706
----Depreciation--Ownership of asset--No evidence regarding ownership of car and use for business purpose--Depreciation not allowable-- Diamond Carpet v. Additional CIT (Agra) . . . 689
S. 36(1)(va) --Business expenditure--Employees’ and employer’s contributions to employees’ State insurance and provident fund--Payments made before due date for filing return--Allowable-- Onward Technologies Ltd. v. Deputy CIT (OSD) (Mumbai) . . . 734
S. 40(a)(ia) --Business expenditure--Disallowance--Payments liable to deduction of tax at source--Commission or brokerage--Assessee, a distributor of SIM cards carrying out sale of SIM cards through dealers--Payments to dealers for activation--Are in the nature of commission or brokerage liable to tax deduction at source--Assessee failing to deduct tax at source--Expenditure not allowable under section 40(a)(ia)-- ITO v. Smart Distributors (Chandigarh) . . . 660
S. 54F --Capital gains--Exemption--Sale of property and investment of consideration in purchase or construction of residential house--Provision to be liberally construed--Document not revealing actual date and amount of purchase--Assessee to place supporting evidence regarding date and amount of investment towards purchase--Matter remanded-- Narasimha Raju Rudra Raju v. Assistant CIT (Hyderabad) . . . 681
S. 68 --Cash credits--Company--Sums shown as share application money--Shareholders filing confirmation letters--Income-tax returns of shareholders accepted--Department cannot thereafter, without showing money emanated from assessee’s hands, tax sums as unexplained credits-- Assistant CIT v. AMR Hospitality Services Ltd. (Hyderabad) . . . 758
S. 80M --Intercorporate dividend--Special dividend--Borrowings of assessee not utilised for making investment in shares--Interest on borrowings and other expenditure allowable as deduction while computing business income--Expenditure could not once again be deducted from dividend income for purpose of computing deduction under section 80M--Deduction to be granted with reference to gross dividend-- SICOM Ltd. v. Joint CIT (Mumbai) . . . 706
S. 92(1) --International transactions--Arm’s length price--Determination--Impermissible to adopt combination of prescribed methods or altogether unprescribed method--Overall profit of group as whole cannot be considered for determination of arm’s length price--Mixing transactional net margin method and cost plus method in determining its arm’s length price--Not proper--Transactional net margin method--Comparable cases must be those engaged in similar business as assessee--Transfer Pricing Officer accepting as at arm’s length transactions of two segments--Determination of arm’s length price for third segment--Figures of two segments cannot be taken--Figures of relevant segment alone to be considered-- Onward Technologies Ltd. v. Deputy CIT (OSD) (Mumbai) . . . 734
----International transactions--Arm’s length price--International transaction--Definition--Calculation of profit earned by assessee from transaction with associated enterprise--Only from transaction between two or more associated enterprises--Profit realised by foreign associated enterprise from ultimate customers--Not permissible to consider--Selection of foreign associated enterprise as tested party not permissible-- Onward Technologies Ltd. v. Deputy CIT (OSD) (Mumbai) . . . 734
S. 92B --International transactions--Arm’s length price--Determination--Impermissible to adopt combination of prescribed methods or altogether unprescribed method--Overall profit of group as whole cannot be considered for determination of arm’s length price--Mixing transactional net margin method and cost plus method in determining its arm’s length price--Not proper--Transactional net margin method--Comparable cases must be those engaged in similar business as assessee--Transfer Pricing Officer accepting as at arm’s length transactions of two segments--Determination of arm’s length price for third segment--Figures of two segments cannot be taken--Figures of relevant segment alone to be considered-- Onward Technologies Ltd. v. Deputy CIT (OSD) (Mumbai) . . . 734
----International transactions--Arm’s length price--International transaction--Definition--Calculation of profit earned by assessee from transaction with associated enterprise--Only from transaction between two or more associated enterprises--Profit realised by foreign associated enterprise from ultimate customers--Not permissible to consider--Selection of foreign associated enterprise as tested party not permissible-- Onward Technologies Ltd. v. Deputy CIT (OSD) (Mumbai) . . . 734
S. 92C(1) --International transactions--Arm’s length price--Determination--Impermissible to adopt combination of prescribed methods or altogether unprescribed method--Overall profit of group as whole cannot be considered for determination of arm’s length price--Mixing transactional net margin method and cost plus method in determining its arm’s length price--Not proper--Transactional net margin method--Comparable cases must be those engaged in similar business as assessee--Transfer Pricing Officer accepting as at arm’s length transactions of two segments--Determination of arm’s length price for third segment--Figures of two segments cannot be taken--Figures of relevant segment alone to be considered-- Onward Technologies Ltd. v. Deputy CIT (OSD) (Mumbai) . . . 734
----International transactions--Arm’s length price--International transaction--Definition--Calculation of profit earned by assessee from transaction with associated enterprise--Only from transaction between two or more associated enterprises--Profit realised by foreign associated enterprise from ultimate customers--Not permissible to consider--Selection of foreign associated enterprise as tested party not permissible-- Onward Technologies Ltd. v. Deputy CIT (OSD) (Mumbai) . . . 734
S. 115J --Company--Book profit--Computation--Provision for bad debt and provision for leave salary--Not be included-- SICOM Ltd. v. Joint CIT (Mumbai) . . . 706
S. 115WB(2) --Business expenditure--Expenses incurred on food and beverages--Failure to pay fringe benefit tax--Finding that 20 per cent. disallowance reasonable on provisions of fringe benefit tax--Justified-- Diamond Carpet v. Additional CIT (Agra) . . . 689
S. 147 --Reassessment--Notice--Income escaping assessment--Details given not enough to establish transaction in nature of accommodation entries--Reasons do not satisfy requirement of section 147-- ITO v. On Exim P. Ltd. (Delhi) . . . 697
S. 148 --Reassessment--Notice--Income escaping assessment--Details given not enough to establish transaction in nature of accommodation entries--Reasons do not satisfy requirement of section 147-- ITO v. On Exim P. Ltd. (Delhi) . . . 697
----Reassessment--Notice--Validity--Incorrect address--Notice to be sent at address given in record of Income-tax Department-- ITO v. On Exim P. Ltd. (Delhi) . . . 697
----Reassessment--Notice--Validity--Notice signed on March 31 but handed over to postal authority on April 1--Beyond period of limitation-- ITO v. On Exim P. Ltd. (Delhi) . . . 697
S. 149 --Reassessment--Notice--Validity--Notice signed on March 31 but handed over to postal authority on April 1--Beyond period of limitation-- ITO v. On Exim P. Ltd. (Delhi) . . . 697
S. 194H --Business expenditure--Disallowance--Payments liable to deduction of tax at source--Commission or brokerage--Assessee, a distributor of SIM cards carrying out sale of SIM cards through dealers--Payments to dealers for activation--Are in the nature of commission or brokerage liable to tax deduction at source--Assessee failing to deduct tax at source--Expenditure not allowable under section 40(a)(ia)-- ITO v. Smart Distributors (Chandigarh) . . . 660
S. 263 --Revision--Commissioner--Condition precedent--Order under revision should be erroneous and prejudicial to interests of Revenue-- Mihir J. Doshi v. Assistant CIT (Mumbai) . . . 652
R. 8D --Income--Computation--Income not includible in total income--Disallowance of expenditure--Shares held as stock in trade--Rule 8D(2)(ii) and (iii) cannot have application--Section 14A applicable--Disallowance of sum estimated at 10 per cent. of dividend earned proper-- Deputy CIT v. Gulshan Investment Co. Ltd. (Kolkata) . . . 674
R. 10B --International transactions--Arm’s length price--Determination--Impermissible to adopt combination of prescribed methods or altogether unprescribed method--Overall profit of group as whole cannot be considered for determination of arm’s length price--Mixing transactional net margin method and cost plus method in determining its arm’s length price--Not proper--Transactional net margin method--Comparable cases must be those engaged in similar business as assessee--Transfer Pricing Officer accepting as at arm’s length transactions of two segments--Determination of arm’s length price for third segment--Figures of two segments cannot be taken--Figures of relevant segment alone to be considered-- Onward Technologies Ltd. v. Deputy CIT (OSD) (Mumbai) . . . 734
----International transactions--Arm’s length price--International transaction--Definition--Calculation of profit earned by assessee from transaction with associated enterprise--Only from transaction between two or more associated enterprises--Profit realised by foreign associated enterprise from ultimate customers--Not permissible to consider--Selection of foreign associated enterprise as tested party not permissible-- Onward Technologies Ltd. v. Deputy CIT (OSD) (Mumbai) . . . 734
S. 2(5B) --Interest-tax--Credit institution--Definition--Finance company--Leasing company--Matter remanded for recording finding whether principally granting operating leases or finance leases--Thereafter decision to be arrived at whether assessee is credit institution-- Gujarat Gas Financial Services Ltd. v. Assistant CIT [SB] (Ahmedabad) . . . 775
No comments:
Post a Comment