INCOME TAX REPORTS (ITR)--PRINT AND ONLINE EDITION
ITR Volume 358 : Part 2 (Issue dated : 4-11-2013)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Appeal to High Court --Substantial questions of law framed for consideration by court--Power of court to consider questions other than those framed not affected--Income-tax Act, 1961, s. 260A(4)-- CIT v. Mastek Ltd. . . . 252
Assessing Officer --Duty to take pragmatic view rather than pedantic approach-- CIT v. Excel Industries Ltd. . . . 295
Business income --Accrual of income--Export business--Entitlement to make duty free imports of raw materials obtained through advance licences and duty entitlement pass book issued against export obligations--Income accrues in year of duty free import of raw material and not in year of export--Income-tax Act, 1961, s. 28(iv)-- CIT v. Excel Industries Ltd. . . . 295
Income --Accrual of income--Tests--Whether income accrued to assessee is real or hypothetical, whether there is corresponding liability of other party to pay and probability of realisation by assessee seen from practical point of view-- CIT v. Excel Industries Ltd. . . . 295
Income-tax Department --Not to indulge in fruitless litigation where no loss of revenue involved-- CIT v. Excel Industries Ltd. . . . 295
Refund --Advance tax--Deduction of tax at source--Aggregate of instalments of advance tax or tax deduction at source exceeding assessed tax--Interest on refund--Only as provided for in statute-- Sandvik Asia’s case explained--Income-tax Act, 1961, ss. 214, 244A-- CIT v. Gujarat Fluoro Chemicals . . . 291
Res judicata --Consistent view taken in favour of assessee on questions--Court will not take different view without very convincing reasons-- CIT v. Excel Industries Ltd. . . . 295
Bonus --Bonus paid to director--Amount paid as per board resolution--Bonus not related to shareholding--Directors rendering valuable services to company--Bonus deductible--Income-tax Act, 1961, s. 36(1)(ii)-- CIT v. Career Launcher India Ltd. (Delhi) . . . 179
Business expenditure --Firm--Commission--Disallowance of part of commission--Commission paid to son of partner--Claim that young man of twenty one had expertise in mixing tobacco--No evidence to support claim--Agreement for payment of commission stating that it was for looking after labour, production and despatch--Disallowance of part of commission--Justified--Income-tax Act, 1961, s. 40A-- S. M. Haq v. CIT (All) . . . 246
----Non-compete fees paid for a limited time--Deductible--Income-tax Act, 1961, s. 37-- CIT v. Career Launcher India Ltd. (Delhi) . . . 179
Deduction of tax at source --Commission--Assessee undertaking procurement and marketing of milk and milk products through concessionaires--Concessionaires making purchases of milk outright--Not a case of agency--That concessionaires operated out of booths or with equipment provided by assessee or that assessee had right of inspection not material--Difference between maximum retail price fixed by assessee and price concessionaire paid to assessee not commission--Assessee not bound to deduct tax at source therefrom--Income-tax Act, 1961, s. 194H-- CIT v. Mother Dairy India Ltd. (Delhi) . . . 218
----Contract--Assessee running coaching classes for competitive exams--Agreement with franchisees--Not a works contract--Tax not deductible at source on payments to franchisees--Income-tax Act, 1961-- CIT v. Career Launcher India Ltd. (Delhi) . . . 179
----Rent--Meaning of rent in section 194-I--Payment for use of land under lease or any agreement with reference to use of land--Agreement for landing and parking of aircraft--Not in the nature of lease--Payment under agreement not rent within meaning of section 194-I--Tax not deductible at source on such payment--Income-tax Act, 1961, s. 194-I-- CIT v. Singapore Airlines Ltd. (Mad) . . . 237
Export --Special deduction--Tribunal finding exports genuine on facts and deleting addition--Finding of fact--Tribunal justified in cancelling penalty--Income-tax Act, 1961, ss. 80HHC, 271(1)(c)-- CIT v. M. S. International Ltd. (Delhi) . . . 203
Industrial undertaking --Special deduction under section 80-I--Condition precedent--Profits must be derived from industrial undertaking--Ownership of industrial undertaking is not a condition precedent--Assessee owner of ammonia plant--Plant manufacturing heavy water owned by Government of India utilising ammonia--Plant operated by assessee--Service charges received by assessee--Entitled to special deduction under section 80-I--Income-tax Act, 1961, s. 80-I-- Krishak Bharti Co-operative Ltd. v. Deputy CIT (Delhi) . . . 168
Interest on borrowed capital --Business expenditure--Assessee allotted land by statutory authority--Price payable in instalments along with interest--No borrowed capital--Interest not deductible under section 36--Interest not deductible under section 37 as it was capital expenditure--Income-tax Act, 1961, ss. 36(1)(iii), 37-- CIT v. Career Launcher India Ltd. (Delhi) . . . 179
Interpretation of taxing statutes --Principle of ejusdem generis-- CIT v. Singapore Airlines Ltd. (Mad) . . . 237
----Provision granting incentives for growth and development--Liberal interpretation-- Krishak Bharti Co-operative Ltd. v. Deputy CIT (Delhi) . . . 168
Non-resident --Permanent establishment--Business connection--Agreements between Finnish company and Indian companies for supply of telecom equipment--Finnish company having liaison office in India and subsequently establishing subsidiary in India--Equipment sold outside India on principal to principal basis--Installation activities by Indian subsidiary under independent contracts--Finnish company did not have a permanent establishment in India--No business connection through liaison office--Royalty--Definition, under DTAA--Copyrighted article not included--Income-tax Act, 1961, s. 9(1)(vi)--Double Taxation Avoidance Agreement between Finland and India, arts. 5, 13-- Director of Income-tax v. Nokia Networks OY (Delhi) . . . 259
Offences and prosecution --Seizure of cash by police--Trial court ordering part of seized amount to be handed over to accused, as interim custody, with a stringent condition--Order not prejudicial to Income-tax Department--Income-tax Act, 1961-- Assistant Director of Income-tax (Investigation) v. A. Khader Mohideen (Mad) . . . 163
Recovery of tax --Notice of demand--Reduction of period for payment of amount demanded--Conditions precedent--Reason to believe full period would be detrimental to Revenue--Prior approval of Joint Commissioner--Plan to collect particular amount of revenue in a specified period--Not a ground for reduction of period--Income-tax Act, 1961, s. 220-- Gujarat State Energy Generation Ltd. v. Assistant CIT (Guj) . . . 254
Rectification of mistakes --Mistake must be apparent from record--Dispute regarding period for which interest on refund was payable--Part of interest cannot be withdrawn in rectification proceedings--Income-tax Act, 1961, s. 154-- CIT v. Nathpa Jhakri Joint Venture (Bom) . . . 233
Revision --Validity--No disallowance of expenditure under section 14A--Order erroneous and prejudicial to Revenue--Revision of order valid--Income-tax Act, 1961, ss. 14A, 263-- CIT v. RKBK Fiscal Services P. Ltd. (Cal) . . . 228
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Double Taxation Avoidance Agreement between Finland and India :
Art. 5 --Non-resident--Permanent establishment--Business connection--Agreements between Finnish company and Indian companies for supply of telecom equipment--Finnish company having liaison office in India and subsequently establishing subsidiary in India--Equipment sold outside India on principal to principal basis--Installation activities by Indian subsidiary under independent contracts--Finnish company did not have a permanent establishment in India--No business connection through liaison office--Royalty--Definition, under DTAA--Copyrighted article not included-- Director of Income-tax v. Nokia Networks OY (Delhi) . . . 259
Art. 13 --Non-resident--Permanent establishment--Business connection--Agreements between Finnish company and Indian companies for supply of telecom equipment--Finnish company having liaison office in India and subsequently establishing subsidiary in India--Equipment sold outside India on principal to principal basis--Installation activities by Indian subsidiary under independent contracts--Finnish company did not have a permanent establishment in India--No business connection through liaison office--Royalty--Definition, under DTAA--Copyrighted article not included-- Director of Income-tax v. Nokia Networks OY (Delhi) . . . 259
S. 9(1)(vi) --Non-resident--Permanent establishment--Business connection--Agreements between Finnish company and Indian companies for supply of telecom equipment--Finnish company having liaison office in India and subsequently establishing subsidiary in India--Equipment sold outside India on principal to principal basis--Installation activities by Indian subsidiary under independent contracts--Finnish company did not have a permanent establishment in India--No business connection through liaison office--Royalty--Definition, under DTAA--Copyrighted article not included-- Director of Income-tax v. Nokia Networks OY (Delhi) . . . 259
S. 14A --Revision--Validity--No disallowance of expenditure under section 14A--Order erroneous and prejudicial to Revenue--Revision of order valid-- CIT v. RKBK Fiscal Services P. Ltd. (Cal) . . . 228
S. 28(iv) --Business income--Accrual of income--Export business--Entitlement to make duty free imports of raw materials obtained through advance licences and duty entitlement pass book issued against export obligations--Income accrues in year of duty free import of raw material and not in year of export-- CIT v. Excel Industries Ltd. (SC) . . . 295
S. 36(1)(ii) --Bonus--Bonus paid to director--Amount paid as per board resolution--Bonus not related to shareholding--Directors rendering valuable services to company--Bonus deductible-- CIT v. Career Launcher India Ltd. (Delhi) . . . 179
S. 36(1)(iii) --Interest on borrowed capital--Business expenditure--Assessee allotted land by statutory authority--Price payable in instalments along with interest--No borrowed capital--Interest not deductible under section 36--Interest not deductible under section 37 as it was capital expenditure-- CIT v. Career Launcher India Ltd. (Delhi) . . . 179
S. 37 --Business expenditure--Non-compete fees paid for a limited time--Deductible-- CIT v. Career Launcher India Ltd. (Delhi) . . . 179
----Interest on borrowed capital--Business expenditure--Assessee allotted land by statutory authority--Price payable in instalments along with interest--No borrowed capital--Interest not deductible under section 36--Interest not deductible under section 37 as it was capital expenditure-- CIT v. Career Launcher India Ltd. (Delhi) . . . 179
S. 40A --Business expenditure--Firm--Commission--Disallowance of part of commission--Commission paid to son of partner--Claim that young man of twenty one had expertise in mixing tobacco--No evidence to support claim--Agreement for payment of commission stating that it was for looking after labour, production and despatch--Disallowance of part of commission--Justified-- S. M. Haq v. CIT (All) . . . 246
S. 80HHC --Export--Special deduction--Tribunal finding exports genuine on facts and deleting addition--Finding of fact--Tribunal justified in cancelling penalty-- CIT v. M. S. International Ltd. (Delhi) . . . 203
S. 80-I --Industrial undertaking--Special deduction under section 80-I--Condition precedent--Profits must be derived from industrial undertaking--Ownership of industrial undertaking is not a condition precedent--Assessee owner of ammonia plant--Plant manufacturing heavy water owned by Government of India utilising ammonia--Plant operated by assessee--Service charges received by assessee--Entitled to special deduction under section 80-I-- Krishak Bharti Co-operative Ltd. v. Deputy CIT (Delhi) . . . 168
S. 154 --Rectification of mistakes--Mistake must be apparent from record--Dispute regarding period for which interest on refund was payable--Part of interest cannot be withdrawn in rectification proceedings-- CIT v. Nathpa Jhakri Joint Venture (Bom) . . . 233
S. 194H --Deduction of tax at source--Commission--Assessee undertaking procurement and marketing of milk and milk products through concessionaires--Concessionaires making purchases of milk outright--Not a case of agency--That concessionaires operated out of booths or with equipment provided by assessee or that assessee had right of inspection not material--Difference between maximum retail price fixed by assessee and price concessionaire paid to assessee not commission--Assessee not bound to deduct tax at source therefrom-- CIT v. Mother Dairy India Ltd. (Delhi) . . . 218
S. 194-I --Deduction of tax at source--Rent--Meaning of rent in section 194-I--Payment for use of land under lease or any agreement with reference to use of land--Agreement for landing and parking of aircraft--Not in the nature of lease--Payment under agreement not rent within meaning of section 194-I--Tax not deductible at source on such payment-- CIT v. Singapore Airlines Ltd. (Mad) . . . 237
S. 214 --Refund--Advance tax--Deduction of tax at source--Aggregate of instalments of advance tax or tax deduction at source exceeding assessed tax--Interest on refund--Only as provided for in statute-- Sandvik Asia’s case explained-- CIT v. Gujarat Fluoro Chemicals (SC) . . . 291
S. 220 --Recovery of tax--Notice of demand--Reduction of period for payment of amount demanded--Conditions precedent--Reason to believe full period would be detrimental to Revenue--Prior approval of Joint Commissioner--Plan to collect particular amount of revenue in a specified period--Not a ground for reduction of period-- Gujarat State Energy Generation Ltd. v. Assistant CIT (Guj) . . . 254
S. 244A --Refund--Advance tax--Deduction of tax at source--Aggregate of instalments of advance tax or tax deduction at source exceeding assessed tax--Interest on refund--Only as provided for in statute-- Sandvik Asia’s case explained-- CIT v. Gujarat Fluoro Chemicals (SC) . . . 291
S. 260A(4) --Appeal to High Court--Substantial questions of law framed for consideration by court--Power of court to consider questions other than those framed not affected-- CIT v. Mastek Ltd. (SC) . . . 252
S. 263 --Revision--Validity--No disallowance of expenditure under section 14A--Order erroneous and prejudicial to Revenue--Revision of order valid-- CIT v. RKBK Fiscal Services P. Ltd. (Cal) . . . 228
S. 271(1)(c) --Export--Special deduction--Tribunal finding exports genuine on facts and deleting addition--Finding of fact--Tribunal justified in cancelling penalty-- CIT v. M. S. International Ltd. (Delhi) . . . 203
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