ITR VOL 357 PART 1

 

INCOME TAX REPORTS (ITR)--PRINT AND ONLINE EDITION

 

PRINT EDITION

ITR Volume 357 : Part 1 (Issue dated : 16-9-2013)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

SUPREME COURT

Appeal to High Court --Appeal to Supreme Court--Documents placed before Supreme Court--Documents of relevance--Matter remanded to High Court with direction to accept documents and dispose of appeal afresh after looking into them-- Tek Ram (Dead through LRs.) v . CIT . . . 133

HIGH COURTS

Advance rulings --Jurisdiction of Authority for Advance Rulings--Scope of section 245R--Authority would not have jurisdiction to render ruling where return has been filed--Income-tax Act, 1961, s. 245R-- Netapp B. V . v. Authority for Advance Rulings (Delhi) . . . 102

Appeal to High Court --Order of revision confirmed by Tribunal--Plea not raised before Commissioner or Tribunal cannot be raised before High Court for the first time--Income-tax Act, 1961, s. 260A-- Kandi Friends Educational Trust v. CIT
(P&H) . . . 84

Assessment --Assessing Officer--Jurisdiction--Scope of section 124--No objection taken to jurisdiction of Assessing Officer--Objection could not be raised for first time on appeal--Income-tax Act, 1961, s. 124-- CIT v. All India Children Care and Educational Development Society (All) . . . 134

----Special audit--Scope of section 142(2A)--Books of account refers to other documents also--Proceedings under section 142(2A) not judicial proceedings--Detailed reasons not necessary--Accounts of assessee complex--Order under section 142(2A) after application of mind--Valid--Income-tax Act, 1961, s. 142(2A)-- U. P. Samaj Kalyan Nirman Nigam Ltd . v . CIT (All) . . . 12

Business expenditure --Financial corporation--Special reserve created by institution providing long-term finance--Scope of section 36(1)(viii)--Processing charges, foreclosure charges and penalty for late payments--Amounts having direct nexus with business of providing finance--Deductible--Income-tax Act, 1961, s. 36(1)(viii)-- CIT v . Weizmann Homes Ltd . (Karn) . . . 74

----Warranty liability--Provision for warranty based on scientific calculation--Deductible--Income-tax Act, 1961, s. 37-- CIT v. IBM India Ltd . (Karn) . . . 88

Capital or revenue expenditure --Expenditure on acquiring software enabling assessee to carry on business more efficiently--Revenue expenditure--Income-tax Act, 1961, s. 37-- CIT v. IBM India Ltd . (Karn) . . . 88

Company --Book profit--Computation--Advance tax--Default in payment--Interest--Interest can be levied where income of company is computed under section 115JA--Income-tax Act, 1961, ss. 115JA, 234B-- CIT v . IBM India Ltd . (Karn) . . . 88

----Book profit--Computation--Lease equalisation reserve and provision for contingencies to be added--Income-tax Act, 1961, s. 115JA-- CIT v . Weizmann Homes Ltd.
(Karn) . . . 74

----Book profit--Computation--Provision for bad debts--Not deductible--Income-tax act, 1961, s. 115JA-- CIT v . IBM India Ltd. (Karn) . . . 88

Donation to charitable institution --Special deduction--Approval of institution--No finding in order refusing registration that assessee violated section 80G(5)--Refusal of registration not valid--Income-tax Act, 1961, ss. 12AA, 80G(5)-- DIT v . Neel Gagan Charitable Trust (Delhi) . . . 86

Exemption --Educational institution--Effect of third proviso to section 10(23C)(vi)--Assessee obtaining order of approval from prescribed authority but not utilising income for educational purposes--Order of approval not conclusive--Tribunal not justified in granting exemption to assessee--Matter remanded--Income-tax Act, 1961, s. 10(23C)(vi)-- CIT v. Manipal Academy of Higher Education (MAHE) (Karn) . . . 114

Gift-tax --Deemed gift--Conditions precedent for application of section 4--Transfer of property for inadequate consideration--Subscription for shares--No transfer of property--Shares allotted at face value--No deemed gift--Gift-tax Act, 1958, s. 4(1)(a)-- CIT v . O. P. Srivastava (All) . . . 1

Income from house property --Business income--Income from lease--Reassessment--Notice--Notice issued before finalisation of return and framing assessment, treating lease income as from house property--Tribunal upholding lease income as from house property but remitting issue of reopening--No question of law arises for consideration--Income-tax Act, 1961-- Mahesh Investments v. Asst. CIT (Karn) . . . 42

Intercorporate dividends --Special deduction under section 80M--Condition precedent--Dividends must be received by domestic company from another domestic company--Dividend should be distributed in year in question before due date--Dividend need not relate to year in question--Dividends relating to 1990-91 and 1991-92 distributed in accounting year relevant for assessment year 1993-94--Entitled to deduction in assessment year 1993-94--Income-tax Act, 1961, s. 80M-- CIT v . Delhi Tourism and Transportation Development Corporation Ltd . (Delhi) . . . 95

Interpretation of taxing statutes --Strict interpretation-- CIT v . O. P. Srivastava
(All) . . . 1

Precedent --Effect of Supreme Court decisions in Khoday Distilleries Ltd. v. CIT [2008] 307 ITR 312 (SC) and Sri Gopal Jalan and Co. v. Calcutta Stock Exchange Association Ltd. [1963] 33 Comp Cas 862 (SC)-- CIT v. O. P. Srivastava (All) . . . 1

Reassessment --Notice--Reassessment on ground excess depreciation claimed--Writ--Interim order of status quo not a factor to interfere with order of reassessment--Writ petition filed without availing of remedy of appeal--Writ not maintainable--Income-tax Act, 1961, ss. 32(1)(v), 147, 148-- Narmadha Chemicals (P.) Ltd. v . Asst. CIT
(Mad) . . . 45

----Notice--Validity--Notice on ground that assessee had unexplained investments in immovable property--Return submitted in response to notice--No objection that reasons for reassessment had not been given--Tribunal not justified in setting aside notice--Matter remanded--Income-tax Act, 1961, ss. 147, 148-- CIT v . All India Children Care and Educational Development Society (All) . . . 134

----Notice after four years--Condition precedent--Failure to disclose material facts necessary for assessment--Assessment after detailed enquiry into identity and creditworthiness of share applicants--Notice after four years on ground that share applications not genuine--No failure to disclose material facts necessary for assessment--Notice not valid--Income-tax Act, 1961, ss. 147, 148-- CIT v . Suren International P. Ltd.
(Delhi) . . . 24

----Notice after four years--Failure to disclose material facts necessary for assessment--Claim for deduction of expenditure and provision for gratuity--Claims considered by Assessing Officer and Assessing Officer also examining tax audit report--Computation error in calculating deprecation--No failure to disclose material facts necessary for assessment--Notice of reassessment after four years--Not valid--Income-tax Act, 1961, ss. 147, 148-- Microsoft Corporation (I) P. Ltd . v . Dy. CIT (Delhi) . . . 50

Search and seizure --Block assessment--Undisclosed income--Undisclosed income to be determined on basis of evidence found during search operations or requisition of books and documents--Undisclosed income cannot be computed on the basis of best judgment--Income-tax Act, 1961, s. 158BC-- CIT v. Dr. Ratan Kumar Singh
(All) . . . 35

Writ --Jurisdiction of High Court--Limited jurisdiction--Constitution of India, art. 226-- U. P. Samaj Kalyan Nirman Nigam Ltd . v . CIT (All) . . . 12

AUTHORITY FOR ADVACNE RULINGS

Advance ruling --Application for--Maintainability--Jurisdiction of Authority--Bar where question raised in application for ruling pending before income-tax authority--Returns filed and notices issued under section 143(2)--Question deemed to be pending before assessing authority--Application cannot be entertained--Income-tax Act, 1961, ss. 143(2), 245R(2)-- Hyosung Corporation , In re . . . 123

----Authority--Jurisdiction--Creature of statute--Cannot consider validity of provision on ground of discrimination--Income-tax Act, 1961, s. 245R(2)--Constitution of India, art. 14--Double Taxation Avoidance Agreement between India and South Korea, art. 25-- Hyosung Corporation, In re . . . 123

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Constitution of India :

Art. 14 --Advance ruling--Authority--Jurisdiction--Creature of statute--Cannot consider validity of provision on ground of discrimination-- Hyosung Corporation, In re (AAR) . . . 123

Art. 226 --Writ--Jurisdiction of High Court--Limited jurisdiction-- U. P. Samaj Kalyan Nirman Nigam Ltd . v . CIT (All) . . . 12

Double Taxation Avoidance Agreement between India and South Korea :

Art. 25 --Advance ruling--Authority--Jurisdiction--Creature of statute--Cannot consider validity of provision on ground of discrimination-- Hyosung Corporation, In re (AAR) . . . 123

Gift-tax Act, 1958 :

S. 4(1)(a) --Gift-tax--Deemed gift--Conditions precedent for application of section 4--Transfer of property for inadequate consideration--Subscription for shares--No transfer of property--Shares allotted at face value--No deemed gift-- CIT v . O. P. Srivastava (All) . . . 1

Income-tax Act, 1961 :

S. 10(23C)(vi) --Exemption--Educational institution--Effect of third proviso to section 10(23C)(vi)--Assessee obtaining order of approval from prescribed authority but not utilising income for educational purposes--Order of approval not conclusive--Tribunal not justified in granting exemption to assessee--Matter remanded-- CIT v. Manipal Academy of Higher Education (MAHE) (Karn) . . . 114

S. 12AA --Donation to charitable institution--Special deduction--Approval of institution--No finding in order refusing registration that assessee violated section 80G(5)--Refusal of registration not valid-- DIT v . Neel Gagan Charitable Trust
(Delhi) . . . 86

S. 32(1)(v) --Reassessment--Notice--Reassessment on ground excess depreciation claimed--Writ--Interim order of status quo not a factor to interfere with order of reassessment--Writ petition filed without availing of remedy of appeal--Writ not maintainable-- Narmadha Chemicals (P.) Ltd. v . Asst. CIT (Mad) . . . 45

S. 36(1)(viii) --Business expenditure--Financial corporation--Special reserve created by institution providing long-term finance--Scope of section 36(1)(viii)--Processing charges, foreclosure charges and penalty for late payments--Amounts having direct nexus with business of providing finance--Deductible-- CIT v . Weizmann Homes Ltd .
(Karn) . . . 74

S. 37 --Business expenditure--Warranty liability--Provision for warranty based on scientific calculation--Deductible-- CIT v. IBM India Ltd . (Karn) . . . 88

----Capital or revenue expenditure--Expenditure on acquiring software enabling assessee to carry on business more efficiently--Revenue expenditure-- CIT v. IBM India Ltd . (Karn) . . . 88

S. 80G(5) --Donation to charitable institution--Special deduction--Approval of institution--No finding in order refusing registration that assessee violated section 80G(5)--Refusal of registration not valid-- DIT v . Neel Gagan Charitable Trust
(Delhi) . . . 86

S. 80M --Intercorporate dividends--Special deduction under section 80M--Condition precedent--Dividends must be received by domestic company from another domestic company--Dividend should be distributed in year in question before due date--Dividend need not relate to year in question--Dividends relating to 1990-91 and 1991-92 distributed in accounting year relevant for assessment year 1993-94--Entitled to deduction in assessment year 1993-94-- CIT v . Delhi Tourism and Transportation Development Corporation Ltd . (Delhi) . . . 95

S. 115JA --Company--Book profit--Computation--Advance tax--Default in payment--Interest--Interest can be levied where income of company is computed under section 115JA-- CIT v . IBM India Ltd . (Karn) . . . 88

----Company--Book profit--Computation--Lease equalisation reserve and provision for contingencies to be added-- CIT v . Weizmann Homes Ltd. (Karn) . . . 74

----Company--Book profit--Computation--Provision for bad debts--Not deductible-- CIT v . IBM India Ltd. (Karn) . . . 88

S. 124 --Assessment--Assessing Officer--Jurisdiction--Scope of section 124--No objection taken to jurisdiction of Assessing Officer--Objection could not be raised for first time on appeal-- CIT v. All India Children Care and Educational Development Society (All) . . . 134

S. 142(2A) --Assessment--Special audit--Scope of section 142(2A)--Books of account refers to other documents also--Proceedings under section 142(2A) not judicial proceedings--Detailed reasons not necessary--Accounts of assessee complex--Order under section 142(2A) after application of mind--Valid-- U. P. Samaj Kalyan Nirman Nigam Ltd . v . CIT (All) . . . 12

S. 143(2) --Advance ruling--Application for--Maintainability--Jurisdiction of Authority--Bar where question raised in application for ruling pending before income-tax authority--Returns filed and notices issued under section 143(2)--Question deemed to be pending before assessing authority--Application cannot be entertained-- Hyosung Corporation , In re (AAR) . . . 123

S. 147 --Reassessment--Notice--Reassessment on ground excess depreciation claimed--Writ--Interim order of status quo not a factor to interfere with order of reassessment--Writ petition filed without availing of remedy of appeal--Writ not maintainable-- Narmadha Chemicals (P.) Ltd. v . Asst. CIT (Mad) . . . 45

----Reassessment--Notice--Validity--Notice on ground that assessee had unexplained investments in immovable property--Return submitted in response to notice--No objection that reasons for reassessment had not been given--Tribunal not justified in setting aside notice--Matter remanded-- CIT v . All India Children Care and Educational Development Society (All) . . . 134

----Reassessment--Notice after four years--Condition precedent--Failure to disclose material facts necessary for assessment--Assessment after detailed enquiry into identity and creditworthiness of share applicants--Notice after four years on ground that share applications not genuine--No failure to disclose material facts necessary for assessment--Notice not valid-- CIT v . Suren International P. Ltd. (Delhi) . . . 24

----Reassessment--Notice after four years--Failure to disclose material facts necessary for assessment--Claim for deduction of expenditure and provision for gratuity--Claims considered by Assessing Officer and Assessing Officer also examining tax audit report--Computation error in calculating deprecation--No failure to disclose material facts necessary for assessment--Notice of reassessment after four years--Not valid-- Microsoft Corporation (I) P. Ltd . v . Dy. CIT (Delhi) . . . 50

S. 148 --Reassessment--Notice--Reassessment on ground excess depreciation claimed--Writ--Interim order of status quo not a factor to interfere with order of reassessment--Writ petition filed without availing of remedy of appeal--Writ not maintainable-- Narmadha Chemicals (P.) Ltd. v . Asst. CIT (Mad) . . . 45

----Reassessment--Notice--Validity--Notice on ground that assessee had unexplained investments in immovable property--Return submitted in response to notice--No objection that reasons for reassessment had not been given--Tribunal not justified in setting aside notice--Matter remanded-- CIT v . All India Children Care and Educational Development Society (All) . . . 134

----Reassessment--Notice after four years--Condition precedent--Failure to disclose material facts necessary for assessment--Assessment after detailed enquiry into identity and creditworthiness of share applicants--Notice after four years on ground that share applications not genuine--No failure to disclose material facts necessary for assessment--Notice not valid-- CIT v . Suren International P. Ltd. (Delhi) . . . 24

----Reassessment--Notice after four years--Failure to disclose material facts necessary for assessment--Claim for deduction of expenditure and provision for gratuity--Claims considered by Assessing Officer and Assessing Officer also examining tax audit report--Computation error in calculating deprecation--No failure to disclose material facts necessary for assessment--Notice of reassessment after four years--Not valid-- Microsoft Corporation (I) P. Ltd . v . Dy. CIT (Delhi) . . . 50

S. 158BC --Search and seizure--Block assessment--Undisclosed income--Undisclosed income to be determined on basis of evidence found during search operations or requisition of books and documents--Undisclosed income cannot be computed on the basis of best judgment-- CIT v. Dr. Ratan Kumar Singh (All) . . . 35

S. 234B --Company--Book profit--Computation--Advance tax--Default in payment--Interest--Interest can be levied where income of company is computed under section 115JA-- CIT v . IBM India Ltd . (Karn) . . . 88

S. 245R --Advance rulings--Jurisdiction of Authority for Advance Rulings--Scope of section 245R--Authority would not have jurisdiction to render ruling where return has been filed-- Netapp B. V . v. Authority for Advance Rulings
(Delhi) . . . 102

S. 245R(2) --Advance ruling--Application for--Maintainability--Jurisdiction of Authority--Bar where question raised in application for ruling pending before income-tax authority--Returns filed and notices issued under section 143(2)--Question deemed to be pending before assessing authority--Application cannot be entertained-- Hyosung Corporation , In re (AAR) . . . 123

----Advance ruling--Authority--Jurisdiction--Creature of statute--Cannot consider validity of provision on ground of discrimination-- Hyosung Corporation, In re
(AAR) . . . 123

S. 260A --Appeal to High Court--Order of revision confirmed by Tribunal--Plea not raised before Commissioner or Tribunal cannot be raised before High Court for the first time-- Kandi Friends Educational Trust v. CIT (P&H) . . . 84