ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB)) -- PRINT AND ONLINE EDITION
SUBJECT INDEX TO CASES REPORTED
Capital gains --Long-term capital loss--Takeover of US 64 Scheme of Unit Trust of India by Administrator of Specified Undertaking of Unit Trust of India under Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002--Exemption to give relief to US 64 unit holders who opted for redemption during period from April 1, 2002 till redemption under Scheme pursuant to 2002 Act--Income on transfer of units of US 64 Scheme not to form part of total income--Income includes loss--Neither gain nor loss on transfer to be considered for computation of total income--Loss on conversion of US 64 units into 6.75 per cent. tax-free bonds under 2002 Act after indexation of cost cannot be claimed as long-term capital loss--Income-tax Act, 1961, ss. 2(45), 10(33), (35), 45(6)-- Schrader Duncan Ltd. v. Additional Commissioner of Income-tax (Mumbai) . . . 512
Export --Special deduction--Excise duty and sales tax not includible in total turnover--Mistake in form 10CCAC stating excise duty included in total turnover--Certificate given by chartered accountant not conclusive--Legitimate claim for deduction not to be reduced on basis thereof--Income-tax Act, 1961, s. 80HHC-- Schrader Duncan Ltd. v. Additional Commissioner of Income-tax (Mumbai) . . . 512
Volume 27 : Part 5 (Issue dated : 4-11-2013)
SUBJECT INDEX TO CASES REPORTED
Business expenditure --Deduction only on actual payment--Interest paid on loan--One-time settlement attributed towards interest and balance towards principal--Disallowance of unpaid interest will render waiver of principal sum erroneous--Direction to subsume disallowance of interest under section 43B into offer on waiver of principal--Income-tax Act, 1961, s. 43B-- KLN Agrotechs P. Ltd. v. ITO (Bangalore) . . . 648
----Deposits received in respect of bottles and crates as trade deposits and taxed in earlier years as unexplained credit--Assessee refunding deposits--Whether deduction allowable--Matter remanded to Assessing Officer to verify whether deposits taxed and refunded to customers-- Parle Soft Drinks P. Ltd. v. Joint CIT (Mumbai) . . . 663
----Net prior period expenses--Amount not claimed in return for assessment year in question and debited in accounts of following year--Contention that amount allowable in this year taken upon denial of claim in following year--No details to show how amount pertained to this year--Claim not allowable-- Parle Soft Drinks P. Ltd. v. Joint CIT (Mumbai) . . . 663
----Professional fees paid to individual--Person instrumental in carrying out negotiations for settling dispute and receiving compensation--Expenditure to be allowed--Income-tax Act, 1961, ss. 37(1), 40A(2)-- Parle Soft Drinks P. Ltd. v. Joint CIT (Mumbai) . . . 663
Capital or revenue receipt --Casual and non-recurring receipt--Capital gains--Master agreement transferring intellectual property rights relating to manufacture and bottling of soft drinks--Provision for grant of right of first refusal agreement for bottling rights and formation of new subsidiary for carrying out bottling--Assessee formed as new subsidiary--Bottling rights not granted to assessee--Compensation paid for breach of agreement--Is capital receipt, not capital gains or casual and non-recurring receipt--Section 115JA not applicable--Income-tax Act, 1961, ss. 2(47), 10(33), 45, 115JA-- Parle Soft Drinks P. Ltd. v. Joint CIT (Mumbai) . . . 663
Cash credits --Receipts already suffering tax in hands of company--No basis for addition of credit originating from same amount in hands of loanee--Onus on assessee to explain genuineness of transaction and identity and creditworthiness of creditor--Mere details of identity without information regarding genuineness of transaction and creditworthiness of creditor--Credit unexplained--No indication as regards details of transaction--Genuineness of transaction and creditworthiness of creditor not established--Treatment of sum as unexplained credit proper--Income-tax Act, 1961, s. 68-- Deputy CIT v. A. Audinarayana Reddy (Hyderabad) . . . 580
Collection of tax at source --Scrap--Importer, trader and seller of brass scrap--Sale of scrap in retail trade without collecting tax at source--No requirement that seller should himself generate scrap from manufacture or mechanical working of materials undertaken by him--Sale by way of auction, tender “or any other similar mode†--“Any other similar mode€ not restricted and applies to retail sale--Seller liable to collect tax at source--Provision granting relief to collector of tax at source from consequences of non/short deduction collection of tax at source where buyer has shown income in its return and paid tax thereon--Beneficial provision--To have retrospective effect--Income-tax Act, 1961, s. 206C-- Bharti Auto Products v. CIT [SB] (Rajkot) . . . 611
Depreciation --Block of assets--Sale of bottles--Sale proceeds not revenue receipt--After sale, block of assets reduced--Depreciation to be allowed in accordance with law on balance in block of assets-- Parle Soft Drinks P. Ltd. v. Joint CIT (Mumbai) . . . 663
----Capital gains--Written down value of depreciable asset--Assessee must own asset and use it for purpose of business to claim depreciation--Assessee not able to claim depreciation due to seizure of assets by bank--Notional depreciation cannot be attributed--Computation of capital gains by assessee under section 50 confirmed--Income-tax Act, 1961, s. 32, 50-- KLN Agrotechs P. Ltd. v. ITO (Bangalore) . . . 648
----Rate of depreciation--Assessee owner of vehicle--Business of hiring and leasing of vehicles to third parties--Higher rate of depreciation to be allowed--Income-tax Act, 1961, s. 32-- Parle Soft Drinks P. Ltd. v. Joint CIT (Mumbai) . . . 663
Interpretation of taxing statutes --No word can be treated as surplus or redundant-- Bharti Auto Products v. CIT [SB] (Rajkot) . . . 611
----Rules of noscitur a sociis and ejusdem generis--When applied-- Bharti Auto Products v. CIT [SB] (Rajkot) . . . 611
Search and seizure --Assessment--Income to be determined on basis of material--Confessional statement--Effect--Donation of gold to temple--Statement recorded during search that donation was by assessee, his family and friends and relatives--Receipts from temple saying gold received from assessee “and associates†--To buy peace assessee offering additional sums on condition Department does not make enquiry--Department making enquiry and donors confirming donation--Assessee withdrawing offer of additional income--Addition in hands of assessee not based on material--Income-tax Act, 1961, s. 153A-- Deputy CIT v. A. Audinarayana Reddy (Hyderabad) . . . 580
Words and phrases --“Waste†, “scrap†, “manufacture†--Meanings of-- Bharti Auto Products v. CIT [SB](Rajkot) . . . 611
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
S. 2(47) --Capital or revenue receipt--Casual and non-recurring receipt--Capital gains--Master agreement transferring intellectual property rights relating to manufacture and bottling of soft drinks--Provision for grant of right of first refusal agreement for bottling rights and formation of new subsidiary for carrying out bottling--Assessee formed as new subsidiary--Bottling rights not granted to assessee--Compensation paid for breach of agreement--Is capital receipt, not capital gains or casual and non-recurring receipt--Section 115JA not applicable-- Parle Soft Drinks P. Ltd. v. Joint CIT (Mumbai) . . . 663
S. 10(33) --Capital or revenue receipt--Casual and non-recurring receipt--Capital gains--Master agreement transferring intellectual property rights relating to manufacture and bottling of soft drinks--Provision for grant of right of first refusal agreement for bottling rights and formation of new subsidiary for carrying out bottling--Assessee formed as new subsidiary--Bottling rights not granted to assessee--Compensation paid for breach of agreement--Is capital receipt, not capital gains or casual and non-recurring receipt--Section 115JA not applicable-- Parle Soft Drinks P. Ltd. v. Joint CIT (Mumbai) . . . 663
S. 32 --Depreciation--Capital gains--Written down value of depreciable asset--Assessee must own asset and use it for purpose of business to claim depreciation--Assessee not able to claim depreciation due to seizure of assets by bank--Notional depreciation cannot be attributed--Computation of capital gains by assessee under section 50 confirmed-- KLN Agrotechs P. Ltd. v. ITO (Bangalore) . . . 648
----Depreciation--Rate of depreciation--Assessee owner of vehicle--Business of hiring and leasing of vehicles to third parties--Higher rate of depreciation to be allowed-- Parle Soft Drinks P. Ltd. v. Joint CIT (Mumbai) . . . 663
S. 37(1) --Business expenditure--Professional fees paid to individual--Person instrumental in carrying out negotiations for settling dispute and receiving compensation--Expenditure to be allowed-- Parle Soft Drinks P. Ltd. v. Joint CIT (Mumbai) . . . 663
S. 40A(2) --Business expenditure--Professional fees paid to individual--Person instrumental in carrying out negotiations for settling dispute and receiving compensation--Expenditure to be allowed-- Parle Soft Drinks P. Ltd. v. Joint CIT (Mumbai) . . . 663
S. 43B --Business expenditure--Deduction only on actual payment--Interest paid on loan--One-time settlement attributed towards interest and balance towards principal--Disallowance of unpaid interest will render waiver of principal sum erroneous--Direction to subsume disallowance of interest under section 43B into offer on waiver of principal-- KLN Agrotechs P. Ltd. v. ITO (Bangalore) . . . 648
S. 45 --Capital or revenue receipt--Casual and non-recurring receipt--Capital gains--Master agreement transferring intellectual property rights relating to manufacture and bottling of soft drinks--Provision for grant of right of first refusal agreement for bottling rights and formation of new subsidiary for carrying out bottling--Assessee formed as new subsidiary--Bottling rights not granted to assessee--Compensation paid for breach of agreement--Is capital receipt, not capital gains or casual and non-recurring receipt--Section 115JA not applicable-- Parle Soft Drinks P. Ltd. v. Joint CIT (Mumbai) . . . 663
S. 50 --Depreciation--Capital gains--Written down value of depreciable asset--Assessee must own asset and use it for purpose of business to claim depreciation--Assessee not able to claim depreciation due to seizure of assets by bank--Notional depreciation cannot be attributed--Computation of capital gains by assessee under section 50 confirmed-- KLN Agrotechs P. Ltd. v. ITO (Bangalore) . . . 648
S. 68 --Cash credits--Receipts already suffering tax in hands of company--No basis for addition of credit originating from same amount in hands of loanee--Onus on assessee to explain genuineness of transaction and identity and creditworthiness of creditor--Mere details of identity without information regarding genuineness of transaction and creditworthiness of creditor--Credit unexplained--No indication as regards details of transaction--Genuineness of transaction and creditworthiness of creditor not established--Treatment of sum as unexplained credit proper-- Deputy CIT v. A. Audinarayana Reddy (Hyderabad) . . . 580
S. 115JA --Capital or revenue receipt--Casual and non-recurring receipt--Capital gains--Master agreement transferring intellectual property rights relating to manufacture and bottling of soft drinks--Provision for grant of right of first refusal agreement for bottling rights and formation of new subsidiary for carrying out bottling--Assessee formed as new subsidiary--Bottling rights not granted to assessee--Compensation paid for breach of agreement--Is capital receipt, not capital gains or casual and non-recurring receipt--Section 115JA not applicable-- Parle Soft Drinks P. Ltd. v. Joint CIT (Mumbai) . . . 663
S. 153A --Search and seizure--Assessment--Income to be determined on basis of material--Confessional statement--Effect--Donation of gold to temple--Statement recorded during search that donation was by assessee, his family and friends and relatives--Receipts from temple saying gold received from assessee “and associates†--To buy peace assessee offering additional sums on condition Department does not make enquiry--Department making enquiry and donors confirming donation--Assessee withdrawing offer of additional income--Addition in hands of assessee not based on material-- Deputy CIT v. A. Audinarayana Reddy (Hyderabad) . . . 580
S. 206C --Collection of tax at source--Scrap--Importer, trader and seller of brass scrap--Sale of scrap in retail trade without collecting tax at source--No requirement that seller should himself generate scrap from manufacture or mechanical working of materials undertaken by him--Sale by way of auction, tender “or any other similar mode†--“Any other similar mode†not restricted and applies to retail sale--Seller liable to collect tax at source--Provision granting relief to collector of tax at source from consequences of non/short deduction collection of tax at source where buyer has shown income in its return and paid tax thereon--Beneficial provision--To have retrospective effect-- Bharti Auto Products v. CIT [SB] (Rajkot) . . . 611
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