ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB)) -- PRINT AND ONLINE EDITION
SUBJECT INDEX TO CASES REPORTED
Business expenditure --Accrued or contingent liability--Liability in respect of wages payable to contract labourers pursuant to order of Industrial Tribunal in 2003--Expenditure not provided for in books of account--Orders passed by Industrial Tribunal challenged before High Court--Not established that liability had crystallised during assessment year 2004-05--No direction can be given on basis of memorandum of understanding dated February 22, 2010 as assessment year 2010-11 not before Tribunal--Income-tax Act, 1961, s. 37-- Gujarat State Fertilizers and Chemicals Ltd. v. Assistant CIT (Ahmedabad) . . . 540
----Disallowance of “take or pay lease rental charges to GCPTCL†consequent to reversal of liability in assessment year 2006-07 and relief given in that year--Proper-- Gujarat State Fertilizers and Chemicals Ltd. v. Assistant CIT (Ahmedabad) . . . 540
----Year in which allowable--“Prior period expenses†disallowed on finding that assessee failed to establish that liability crystallised during year--Direction by Commissioner (Appeals) to Assessing Officer to allow expenditure in year to which it pertained--No allowance for year in question-- Gujarat State Fertilizers and Chemicals Ltd. v. Assistant CIT (Ahmedabad) . . . 540
Capital gains --Long-term capital loss--Conversion of US 64 units of Unit Trust of India into 6.75 per cent. tax free bonds--Income from transfer of units of US 64 Scheme specifically exempted under section 10(33)--Loss in respect of conversion not allowable--Income-tax Act, 1961, s. 10(33)-- Gujarat State Fertilizers and Chemicals Ltd. v. Assistant CIT (Ahmedabad) . . . 540
Capital or revenue expenditure --Corporate debt restructuring expenses on payment to financial consultants in connection with waiver of loans--Allowance by spreading over period of 6 years--Proper-- Gujarat State Fertilizers and Chemicals Ltd. v. Assistant CIT (Ahmedabad) . . . 540
----Expenditure on acquiring fire fighting equipment and on safety measures--Expenses necessary for complying with Government regulations and not resulting in creation of asset--Revenue expenditure-- Gujarat State Fertilizers and Chemicals Ltd. v. Assistant CIT (Ahmedabad) . . . 540
----Release of water and discharge of effluent and pollution control--Expenditure not resulting in creation of any specific asset--Revenue expenditure-- Gujarat State Fertilizers and Chemicals Ltd. v. Assistant CIT (Ahmedabad) . . . 540
----Restructuring of loan in which part of principal waived--Exclusion of sum representing principal waived--Proper-- Gujarat State Fertilizers and Chemicals Ltd. v. Assistant CIT (Ahmedabad) . . . 540
Company --Book profits--Estimated gratuity provision made on basis of actuarial valuation and provision for superannuation expenditure--Not includible--Provision for bad debts--To be added back in book profit--Income-tax Act, 1961, s. 115JB-- Gujarat State Fertilizers and Chemicals Ltd. v. Assistant CIT (Ahmedabad) . . . 540
----Book profits--Excess provision for doubtful advances made in earlier assessment year--Observation by Assessing Officer that this amount not disallowed in earlier assessment year--Assessee contending provision written back in 2004-05--Matter remanded to examine whether or not addition made in book profit for assessment year 2003-04--Income-tax Act, 1961, s. 115JB-- Gujarat State Fertilizers and Chemicals Ltd. v. Assistant CIT (Ahmedabad) . . . 540
----Book profits--Expenditure relating to income not includible in total income--Disallowance of Rs. 5 lakhs in respect of administrative expenses upheld--For purpose of computing book profits under section 115JB also, addition of Rs. 5 lakhs confirmed--Income-tax Act, 1961, s. 115JB-- Gujarat State Fertilizers and Chemicals Ltd. v. Assistant CIT (Ahmedabad) . . . 540
----Book profits--Export--Special deduction--To be worked out in accordance with book profit--Income-tax Act, 1961, ss. 80HHC, 115JB-- Gujarat State Fertilizers and Chemicals Ltd. v. Assistant CIT (Ahmedabad) . . . 540
----Book profits--Provision for “take or pay†lease rental charges--Provision for wage revision--Provision written back in assessment year 2006-07 and reduction allowed in minimum alternate tax computation in that year--No interference--Income-tax Act, 1961, s. 115JB-- Gujarat State Fertilizers and Chemicals Ltd. v. Assistant CIT (Ahmedabad) . . . 540
Deduction --Expenditure incurred in relation to income not includible in total income--Dividend--Assessee'™s own funds much higher than investment--Interest-bearing borrowed funds not used for making investments in shares--No disallowance required in respect of interest expenditure--For other expenses, disallowance of Rs. 5 lakhs to be made--Income-tax Act, 1961, s. 14A-- Gujarat State Fertilizers and Chemicals Ltd. v. Assistant CIT (Ahmedabad) . . . 540
Penalty --Concealment of income--Disallowance of long-term capital loss and depreciation on co-generation power unit--Assessed income of assessee under regular provisions nil even after making addition for excess depreciation on co-generation, etc., and tax payable by assessee only on book profits under section 115JB--No addition made on account of two disallowances in question--Cancellation of penalty proper--Income-tax Act, 1961, ss. 115JB, 271(1)(c)-- Gujarat State Fertilizers and Chemicals Ltd. v. Assistant CIT (Ahmedabad) . . . 540
Refund --Interest on excess refund--Provision brought with effect from June 1, 2003--Not applicable for years prior thereto--Income-tax Act, 1961, s. 234D--Deputy DIT v. Delta Air Lines Inc (Mumbai) . . . 538
Volume 27 : Part 6 (Issue dated : 11-11-2013)
SUBJECT INDEX TO CASES REPORTED
Appeal to Appellate Tribunal --Rectification of mistakes--Penalty--Concealment of income--Penalty confirmed by Tribunal on finding of concealment by assessee--Appeal from Tribunal dismissed in limine on ground no question of law arose--Effect--Confirmation of finding of fact--Application thereafter to Tribunal for rectification of its order raising new pleas without disclosing order of High Court--Tribunal reversing finding of fact and cancelling penalty--Order obtained by fraud--Non est--Order of High Court available with Department at time of assessee'™s application to Tribunal--Authorities also to some extent responsible--Income-tax Act, 1961, ss. 254(2), 271(1)(c)-- ITO v. Bhagwan Agarwal (Agra) . . . 704
Business expenditure--Amount received from subsidiary company--Interest already charged on outstanding balance--Not chargeable--Income-tax Act, 1961-- Assistant CIT v. B. G. R. Energy Systems Ltd. (Hyderabad) . . . 791
----Contracts for execution of work--Completion guarantee clause providing for liquidated damages to be discharged in event of delay in completion of work--Provision made by assessee in accordance with agreement--Assessee entitled to deduction--Income-tax Act, 1961-- Assistant CIT v. B. G. R. Energy Systems Ltd. (Hyderabad) . . . 791
----Expenditure related to income not includible in total income--Interest on borrowed capital--Investment of monies in mutual funds from funds borrowed from bank--No evidence that assessee earned income claimed as exempt--Matter remanded--Income-tax Act, 1961, ss. 10(33), 14A-- Kalpana Nursing Home P. Ltd. v. Deputy CIT (Jodhpur) . . . 773
----Salary--Increase in salary of two doctors from earlier year--Area of working and function increased--Salary not excessive comparing with salary of visiting doctors--Salary not to be disallowed-- Kalpana Nursing Home P. Ltd. v. Deputy CIT (Jodhpur) . . . 773
----Warranty--Warranty merely a provision not expenditure--Assessee not entitled to deduction for warranty provision--Income-tax Act, 1961-- Assistant CIT v. B. G. R. Energy Systems Ltd. (Hyderabad) . . . 791
Capital or revenue expenditure --Repayment of principal in respect of assets taken on finance lease--Capital expenditure--Income-tax Act, 1961-- Assistant CIT v. B. G. R. Energy Systems Ltd. (Hyderabad) . . . 791
Depreciation --Payment towards technical know-how--Conditions of ownership and user of asset satisfied--Assessee entitled for grant of depreciation--Income-tax Act, 1961, s. 32(1)(iii)-- Assistant CIT v. B. G. R. Energy Systems Ltd. (Hyderabad) . . . 791
Export --Exemption--Expenditure excluded from export turnover to be excluded from total turnover--Direction to Assessing Officer to reduce expenses incurred for travelling and internet connection--Income-tax Act, 1961, s. 10A-- Symphony Marketing Solutions India P. Ltd. v. ITO (Bangalore) . . . 753
Income --Accrual of income--Works contract--Retention money for which bills submitted but payment not made--Retention money to be brought to tax in year in which received--Income-tax Act, 1961-- Assistant CIT v. B. G. R. Energy Systems Ltd. (Hyderabad) . . . 791
International transactions --Transfer pricing--Arm’s length price--Selection of comparables--Difference in nature of work, mode of work and types of employees--Subsidiary of reputed company--No adjustment to arm’s length price called for--Addition to be deleted--Income-tax Act, 1961, s. 92C-- Symphony Marketing Solutions India P. Ltd. v. ITO (Bangalore) . . . 753
Penalty --Concealment of income--Imposition of penalty during pendency of appeal against assessment--Deletion of additions by Tribunal except one--Assessing Officer must pass order giving effect to order of Tribunal--Only thereafter issue of imposition of penalty can be considered--Deletion of penalty in respect of all additions by Commissioner (Appeals)--Order set aside and matter remanded--Income-tax Act, 1961, ss. 271(1)(c), 275(1A)-- Deputy CIT v. Swarnandhra IJMII Integrated Township Development Co. P. Ltd . (Hyderabad) . . . 747
Reassessment --Income escaping assessment--Assessing Officer cannot reassess income without assessing income stated in reasons recorded to have escaped assessment--Reasons recorded for reopening of assessment should have nexus with income assessed--Income-tax Act, 1961, s. 147-- Swarnadhara IJMII Integrated Township Development Company v. Deputy CIT (Hyderabad) . . . 736
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
S. 10(33) --Business expenditure--Expenditure related to income not includible in total income--Interest on borrowed capital--Investment of monies in mutual funds from funds borrowed from bank--No evidence that assessee earned income claimed as exempt--Matter remanded-- Kalpana Nursing Home P. Ltd. v. Deputy CIT (Jodhpur) . . . 773
S. 10A --Export--Exemption--Expenditure excluded from export turnover to be excluded from total turnover--Direction to Assessing Officer to reduce expenses incurred for travelling and internet connection-- Symphony Marketing Solutions India P. Ltd. v. ITO (Bangalore) . . . 753
S. 14A --Business expenditure--Expenditure related to income not includible in total income--Interest on borrowed capital--Investment of monies in mutual funds from funds borrowed from bank--No evidence that assessee earned income claimed as exempt--Matter remanded-- Kalpana Nursing Home P. Ltd. v. Deputy CIT (Jodhpur) . . . 773
S. 32(1)(iii) --Depreciation--Payment towards technical know-how--Conditions of ownership and user of asset satisfied--Assessee entitled for grant of depreciation-- Assistant CIT v. B. G. R. Energy Systems Ltd. (Hyderabad) . . . 791
S. 92C --International transactions--Transfer pricing--Arm’s length price--Selection of comparables--Difference in nature of work, mode of work and types of employees--Subsidiary of reputed company--No adjustment to arm’s length price called for-- Addition to be deleted--Symphony Marketing Solutions India P. Ltd. v. ITO (Bangalore) . . . 753
S. 147 --Reassessment--Income escaping assessment--Assessing Officer cannot reassess income without assessing income stated in reasons recorded to have escaped assessment--Reasons recorded for reopening of assessment should have nexus with income assessed-- Swarnadhara IJMII Integrated Township Development Company v. Deputy CIT (Hyderabad) . . . 736
S. 254(2) --Appeal to Appellate Tribunal--Rectification of mistakes--Penalty--Concealment of income--Penalty confirmed by Tribunal on finding of concealment by assessee--Appeal from Tribunal dismissed in limine on ground no question of law arose--Effect--Confirmation of finding of fact--Application thereafter to Tribunal for rectification of its order raising new pleas without disclosing order of High Court--Tribunal reversing finding of fact and cancelling penalty--Order obtained by fraud--Non est--Order of High Court available with Department at time of assessee'™s application to Tribunal--Authorities also to some extent responsible-- ITO v. Bhagwan Agarwal (Agra) . . . 704
S. 271(1)(c) --Appeal to Appellate Tribunal--Rectification of mistakes--Penalty--Concealment of income--Penalty confirmed by Tribunal on finding of concealment by assessee--Appeal from Tribunal dismissed in limine on ground no question of law arose--Effect--Confirmation of finding of fact--Application thereafter to Tribunal for rectification of its order raising new pleas without disclosing order of High Court--Tribunal reversing finding of fact and cancelling penalty--Order obtained by fraud--Non est--Order of High Court available with Department at time of assessee'™s application to Tribunal--Authorities also to some extent responsible-- ITO v. Bhagwan Agarwal (Agra) . . . 704
----Penalty--Concealment of income--Imposition of penalty during pendency of appeal against assessment--Deletion of additions by Tribunal except one--Assessing Officer must pass order giving effect to order of Tribunal--Only thereafter issue of imposition of penalty can be considered--Deletion of penalty in respect of all additions by Commissioner (Appeals)--Order set aside and matter remanded-- Deputy CIT v. Swarnandhra IJMII Integrated Township Development Co. P. Ltd. (Hyderabad) . . . 747
S. 275(1A) --Penalty--Concealment of income--Imposition of penalty during pendency of appeal against assessment--Deletion of additions by Tribunal except one--Assessing Officer must pass order giving effect to order of Tribunal--Only thereafter issue of imposition of penalty can be considered--Deletion of penalty in respect of all additions by Commissioner (Appeals)--Order set aside and matter remanded-- Deputy CIT v. Swarnandhra IJMII Integrated Township Development Co. P. Ltd. (Hyderabad) . . . 747
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