ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB)) -- PRINT AND ONLINE EDITION
SUBJECT INDEX TO CASES REPORTED
Charitable purpose --Registration of trusts--Cancellation of registration--Activities of trust contrary to objects of trust--Collection of excess fee not accounted in books of account--Commissioner has power to cancel registration--Order of Commissioner justified--Income-tax Act, 1961, ss. 12A, 12AA(3)-- Joginpally BR Educational Society v. CIT (Central) (Hyderabad) . . . 639
Penalty --Acceptance or repayment of loans or deposits in cash exceeding specified limit--Assessee, a “shroff†, doing cheque-discounting business--Farmers selling their produce to traders, who made payment by way of post-dated crossed cheques--Agriculturists getting cheques discounted for cash by assessee--Transactions not loan or deposit in hands of assessee--Penalty not leviable--Income-tax Act, 1961, ss. 269SS, 269T, 271D, 271E-- ITO v. Dineshchandra Shantilal Shah (HUF) (Ahmedabad) . . . 647
Volume 28 : Part 1 (Issue dated : 25-11-2013)
SUBJECT INDEX TO CASES REPORTED
Business expenditure --Accrued or contingent liability--Provision for service warranty--Allowable-- Assistant CIT v. L. G. Electronics India P. Ltd. (Delhi) . . . 1
----Disallowance--Expenditure on maintaining and running of branch--Similar issue decided in favour of assessee in assessment year 2006-07--To be allowed--Income-tax Act, 1961-- Emkay Share and Stock Brokers P. Ltd. v. Deputy CIT (No. 2) (Mumbai) . . . 64
----Disallowance--Payments liable to tax deduction at source--Assessee deposited tax deducted amount before due date for filing return--No disallowance under section 40(a)(ia)--Income-tax Act, 1961, s. 40(a)(ia)-- Madineni Mohan v. Income-tax Officer (Hyderabad) . . . 157
----Expenditure incurred on commission and foreign travel--Failure of assessee to demonstrate nature and extent of service rendered by agent--No full details with regard to foreign travel--Failure of assessee to produce proper evidence--Burden of proof on assessee not discharged--Disallowance of expenditure proper--Income-tax Act, 1961, s. 37-- Kanu Kitchen Kulture P. Ltd. v. Deputy CIT (Delhi) . . . 49
----Expenditure on acquisition of distribution rights of feature films--No income generated out of acquisition of film rights--Disallowance of expenditure justified--Income-tax Rules, 1962, r. 9B(4)-- Malayala Manorama Co. Ltd. v. Assistant CIT (Cochin) . . . 144
Capital gains --Computation of capital gains--Fair market value--Reference to Valuation Officer--Assessment adopting value according to stamp valuation authorities under section 50C--Report of Valuation Officer disclosing enhanced value received after completion of assessment--Assessing Officer cannot invoke section 155(15) to modify order in accordance with report of Departmental Valuation Officer--Departmental Valuation Officer’s value outside scope of section 155(15)--Income-tax Act, 1961, ss. 50C, 55A, 155(15)-- Additional CIT v. Rajkumar L. Daryanani (Mumbai) . . . 72
Capital or revenue expenditure --Expenditure incurred for consultancy charges for developing new line of business--Revenue expenditure--Income-tax Act, 1961-- Agrani Telecom Ltd. v. Assistant CIT (Mumbai) . . . 58
Debentures --Whether security or loan or deposit-- Deputy CIT v. Sahara India Commercial Corporation Ltd. (Delhi) . . . 108
Depreciation --Additional depreciation--Allowable only for assets used for purpose of manufacture--Assets for use in business of broadcasting--Not manufacture--Additional depreciation not allowable--Income-tax Act, 1961, s. 32(1)(iia)-- Malayala Manorama Co. Ltd. v. Assistant CIT (Cochin) . . . 144
----Condition precedent for allowance--User of asset for purpose of business--Purchase of equipment to start business of FM broadcasting--Licence obtained only in following year--Business not commenced in year in question--No material to show preparation of programmes--Depreciation not allowable in year in question--Income-tax Act, 1961, s. 32(1)-- Malayala Manorama Co. Ltd. v. Assistant CIT (Cochin) . . . 144
Exemption --Export--Expenditure incurred on communication charges--Excludible from export turnover and total turnover--Income-tax Act, 1961, s. 10A-- Cognizant Technology Services P. Ltd. v. Assistant CIT (Hyderabad) . . . 125
International transactions --Arm’s length price--Determination--Contribution towards global sponsorship of World Cup cricket tournament shared between assessee and parent company in ratio 40 : 60--Proper--Reimbursement of advertisement expenses of assessee by associated enterprises--Matter remanded for readjudication in light of Special Bench order--Remand would not change basis of adjustment made by Transfer Pricing Officer--Income-tax Act, 1961, s. 92CA-- Assistant CIT v. L. G. Electronics India P. Ltd. (Delhi) . . . 1
----Transfer pricing--Arm’s length price--Selection of comparables--Functionally different and super normal profit companies cannot be treated as comparables--Company with Rs. 200 crores turnover can be accepted as comparable when assessee’s turnover is above Rs. 151 crores--Direction to Assessing Officer to verify facts related to some comparables and to provide opportunity of being heard to assessee--Income-tax Act, 1961-- Cognizant Technology Services P. Ltd. v. Assistant CIT (Hyderabad) . . . 125
Non-resident --Income deemed to accrue or arise in India--Deduction of tax at source--Fees for technical services--Definition--Assessee making use of assistance rendered by foreign company in decision making process of management--Foreign company also giving training to assessee’s employees--Service falls under definition of technical services--Assessee liable to deduct tax at source on payment therefor--Income-tax Act, 1961, ss. 9(1)(vii), 40(a)(ia), 195--Double Taxation Avoidance Agreement between India and the U. S. A., art. 12(4)(b)-- US Technology Resources P. Ltd. v. Assistant CIT (Cochin) . . . 26
Penalty --Acceptance of deposits otherwise than by crossed cheque--Optionally fully convertible debentures issued by company--Are security not loan or deposit--Section 269SS not applicable--Penalty not attracted--Income-tax Act, 1961, ss. 269SS, 271D-- Deputy CIT v. Sahara India Commercial Corporation Ltd. (Delhi) . . . 108
----Concealment of income--Disclosure and surrender of cash during search--Due date of filing of return not expired on date of surrender--Failure to declare sum in return but revised return filed and tax paid with interest--Inadvertent mistake--Assessee entitled to benefit of Explanation 5(2) to section 271(1)(c)--Income-tax Act, 1961, ss. 132, 271(1)(c), Expln. 5 -- Joint CIT (OSD) v. Bhagwan Dass Garg (Chandigarh) . . . 77
----Concealment of income--Sale of plot of land--No evidence to show payment of higher sale consideration than disclosed in sale deed--Enhancement of rates for making estimated addition--No penalty leviable for estimated addition--Income-tax Act, 1961, ss. 145(3), 271(1)(c)-- Joint CIT (OSD) v. Bhagwan Dass Garg (Chandigarh) . . . 77
Recovery of tax --Notice of demand--Levy of interest--Direction to Assessing Officer to verify whether interest has been charged under demand notice or original assessment--Matter remanded--Income-tax Act, 1961, s. 220(2)-- Emkay Share and Stock Brokers P. Ltd. v. Deputy CIT (No. 2) (Mumbai) . . . 64
Unexplained investment --Appeal to Commissioner (Appeals)--Additional evidence--Closing stock shown in audited balance-sheet on March 31 less than stock statement submitted to bank on March 30--Sales booked on March 31 and reconciliation statement produced before Commissioner (Appeals)--Either closing stock or additional evidence of sales should be accepted--No cogent reason for rejecting reconciliation statement--Income-tax Act, 1961, s. 69--Income-tax Rules, 1962, r. 46A-- Munish Kumar Bansal v. Joint CIT (Amritsar) . . . 89
Words and phrases --“Decision making†--Meaning of-- US Technology Resources P. Ltd. v. Assistant CIT (Cochin) . . . 26
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Double Taxation Avoidance Agreement between India and the U. S. A.
Art. 12(4)(b) ----Income deemed to accrue or arise in India--Deduction of tax at source--Fees for technical services--Definition--Assessee making use of assistance rendered by foreign company in decision making process of management--Foreign company also giving training to assessee’s employees--Service falls under definition of technical services--Assessee liable to deduct tax at source on payment therefor-- US Technology Resources P. Ltd. v. Assistant CIT (Cochin) . . . 26
S. 9(1)(vii) --Non-resident--Income deemed to accrue or arise in India--Deduction of tax at source--Fees for technical services--Definition--Assessee making use of assistance rendered by foreign company in decision making process of management--Foreign company also giving training to assessee’s employees--Service falls under definition of technical services--Assessee liable to deduct tax at source on payment therefor-- US Technology Resources P. Ltd. v. Assistant CIT (Cochin) . . . 26
S. 10A --Exemption--Export--Expenditure incurred on communication charges--Excludible from export turnover and total turnover-- Cognizant Technology Services P. Ltd. v. Assistant CIT (Hyderabad) . . . 125
S. 32(1) --Depreciation--Condition precedent for allowance--User of asset for purpose of business--Purchase of equipment to start business of FM broadcasting--Licence obtained only in following year--Business not commenced in year in question--No material to show preparation of programmes--Depreciation not allowable in year in question-- Malayala Manorama Co. Ltd. v. Assistant CIT (Cochin) . . . 144
S. 32(1)(iia) --Depreciation--Additional depreciation--Allowable only for assets used for purpose of manufacture--Assets for use in business of broadcasting--Not manufacture--Additional depreciation not allowable-- Malayala Manorama Co. Ltd. v. Assistant CIT (Cochin) . . . 144
S. 37 --Business expenditure--Expenditure incurred on commission and foreign travel--Failure of assessee to demonstrate nature and extent of service rendered by agent--No full details with regard to foreign travel--Failure of assessee to produce proper evidence--Burden of proof on assessee not discharged--Disallowance of expenditure proper-- Kanu Kitchen Kulture P. Ltd. v. Deputy CIT (Delhi) . . . 49
S. 40(a)(ia) --Business expenditure--Disallowance--Payments liable to tax deduction at source--Assessee deposited tax deducted amount before due date for filing return--No disallowance under section 40(a)(ia)-- Madineni Mohan v. Income-tax Officer (Hyderabad) . . . 157
----Non-resident--Income deemed to accrue or arise in India--Deduction of tax at source--Fees for technical services--Definition--Assessee making use of assistance rendered by foreign company in decision making process of management--Foreign company also giving training to assessee’s employees--Service falls under definition of technical services--Assessee liable to deduct tax at source on payment therefor-- US Technology Resources P. Ltd. v. Assistant CIT (Cochin) . . . 26
S. 50C --Capital gains--Computation of capital gains--Fair market value--Reference to Valuation Officer--Assessment adopting value according to stamp valuation authorities under section 50C--Report of Valuation Officer disclosing enhanced value received after completion of assessment--Assessing Officer cannot invoke section 155(15) to modify order in accordance with report of Departmental Valuation Officer--Departmental Valuation Officer’s value outside scope of section 155(15)-- Additional CIT v. Rajkumar L. Daryanani (Mumbai) . . . 72
S. 55A --Capital gains--Computation of capital gains--Fair market value--Reference to Valuation Officer--Assessment adopting value according to stamp valuation authorities under section 50C--Report of Valuation Officer disclosing enhanced value received after completion of assessment--Assessing Officer cannot invoke section 155(15) to modify order in accordance with report of Departmental Valuation Officer--Departmental Valuation Officer’s value outside scope of section 155(15)-- Additional CIT v. Rajkumar L. Daryanani (Mumbai) . . . 72
S. 69 --Unexplained investment--Appeal to Commissioner (Appeals)--Additional evidence--Closing stock shown in audited balance-sheet on March 31 less than stock statement submitted to bank on March 30--Sales booked on March 31 and reconciliation statement produced before Commissioner (Appeals)--Either closing stock or additional evidence of sales should be accepted--No cogent reason for rejecting reconciliation statement-- Munish Kumar Bansal v. Joint CIT (Amritsar) . . . 89
S. 92CA --International transactions--Arm’s length price--Determination--Contribution towards global sponsorship of World Cup cricket tournament shared between assessee and parent company in ratio 40 : 60--Proper--Reimbursement of advertisement expenses of assessee by associated enterprises--Matter remanded for readjudication in light of Special Bench order--Remand would not change basis of adjustment made by Transfer Pricing Officer-- Assistant CIT v. L. G. Electronics India P. Ltd. (Delhi) . . . 1
S. 132 --Penalty--Concealment of income--Disclosure and surrender of cash during search--Due date of filing of return not expired on date of surrender--Failure to declare sum in return but revised return filed and tax paid with interest--Inadvertent mistake--Assessee entitled to benefit of Explanation 5(2) to section 271(1)(c)-- Joint CIT (OSD) v. Bhagwan Dass Garg (Chandigarh) . . . 77
S. 145(3) --Penalty--Concealment of income--Sale of plot of land--No evidence to show payment of higher sale consideration than disclosed in sale deed--Enhancement of rates for making estimated addition--No penalty leviable for estimated addition-- Joint CIT (OSD) v. Bhagwan Dass Garg (Chandigarh) . . . 77
S. 155(15) --Capital gains--Computation of capital gains--Fair market value--Reference to Valuation Officer--Assessment adopting value according to stamp valuation authorities under section 50C--Report of Valuation Officer disclosing enhanced value received after completion of assessment--Assessing Officer cannot invoke section 155(15) to modify order in accordance with report of Departmental Valuation Officer--Departmental Valuation Officer’s value outside scope of section 155(15)-- Additional CIT v. Rajkumar L. Daryanani (Mumbai) . . . 72
S. 195 --Non-resident--Income deemed to accrue or arise in India--Deduction of tax at source--Fees for technical services--Definition--Assessee making use of assistance rendered by foreign company in decision making process of management--Foreign company also giving training to assessee’s employees--Service falls under definition of technical services--Assessee liable to deduct tax at source on payment therefor)-- US Technology Resources P. Ltd. v. Assistant CIT (Cochin) . . . 26
S. 220(2) --Recovery of tax--Notice of demand--Levy of interest--Direction to Assessing Officer to verify whether interest has been charged under demand notice or original assessment--Matter remanded-- Emkay Share and Stock Brokers P. Ltd. v. Deputy CIT (No. 2) (Mumbai) . . . 64
S. 269SS --Penalty--Acceptance of deposits otherwise than by crossed cheque--Optionally fully convertible debentures issued by company--Are security not loan or deposit--Section 269SS not applicable--Penalty not attracted-- Deputy CIT v. Sahara India Commercial Corporation Ltd. (Delhi) . . . 108
S. 271(1)(c) --Penalty--Concealment of income--Sale of plot of land--No evidence to show payment of higher sale consideration than disclosed in sale deed--Enhancement of rates for making estimated addition--No penalty leviable for estimated addition-- Joint CIT (OSD) v. Bhagwan Dass Garg (Chandigarh) . . . 77
S. 271(1)(c), Expln. 5 --Penalty--Concealment of income--Disclosure and surrender of cash during search--Due date of filing of return not expired on date of surrender--Failure to declare sum in return but revised return filed and tax paid with interest--Inadvertent mistake--Assessee entitled to benefit of Explanation 5(2) to section 271(1)(c)-- Joint CIT (OSD) v. Bhagwan Dass Garg (Chandigarh) . . . 77
S. 271D --Penalty--Acceptance of deposits otherwise than by crossed cheque--Optionally fully convertible debentures issued by company--Are security not loan or deposit--Section 269SS not applicable--Penalty not attracted-- Deputy CIT v. Sahara India Commercial Corporation Ltd. (Delhi) . . . 108
R. 9B(4) --Business expenditure--Expenditure on acquisition of distribution rights of feature films--No income generated out of acquisition of film rights--Disallowance of expenditure justified-- Malayala Manorama Co. Ltd. v. Assistant CIT (Cochin) . . . 144
R. 46A --Unexplained investment--Appeal to Commissioner (Appeals)--Additional evidence--Closing stock shown in audited balance-sheet on March 31 less than stock statement submitted to bank on March 30--Sales booked on March 31 and reconciliation statement produced before Commissioner (Appeals)--Either closing stock or additional evidence of sales should be accepted--No cogent reason for rejecting reconciliation statement-- Munish Kumar Bansal v. Joint CIT (Amritsar) . . . 89
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