INCOME TAX REPORTS (ITR)--PRINT AND ONLINE EDITION
SUBJECT INDEX TO CASES REPORTED
Business expenditure --Disallowance--Advertisement expenses--Assessee procuring usage rights for brand name--Expenditure incurred on advertisement of products manufactured by it under such brand name--No part of expenditure expended for any purpose other than for assessee’s business--That other persons incidentally benefited from advertisements issued by assessee--Not a ground for disallowance of expenditure--Income-tax Act, 1961, s. 37(2B)-- CIT v. Khambhatta Family Trust (Guj) . . . 485
Company --Book profit--Disallowance of expenditure in relation to exempted income--Addition to book profit of proportionate expenditure attributable to exempted income--Justified--Income-tax Act, 1961, s. 115JA-- CIT v. State Bank of Travancore (Ker) . . . 484
Search and seizure --Block assessment--Undisclosed income--Assessment of third person--Limitation--Assessment completed within two years from end of month in which notice issued under section 158BD--Not barred by limitation--Income-tax Act, 1961, ss. 158BD, 158BE(2)(b)-- CIT v. Bimbis Creams and Bakes (Ker) . . . 466
----Block assessment--Undisclosed income--Assessment of third person--Notice--Person against whom search conducted and third person assessed by same Assessing Officer--No question of transfer of file from one officer to another--Assessing Officer need not record satisfaction before issuing notice to assessee (third person)--Block assessment of assessee valid--Income-tax Act, 1961, ss. 158BC, 158BD-- CIT v. Bimbis Creams and Bakes (Ker) . . . 466
----Block assessment--Undisclosed income--Benami purchase of property--Possession of document is a relevant and important piece of evidence--Documents seized in residence of assessee including general power of attorney and agreement to sell signed by seller--No explanation from assessee relating to documents--Books of account of assessee not disclosing investment--Name of buyer not mentioned in documents--Presumption that property represented undisclosed income of assessee--Justified--Income-tax Act, 1961, s. 158BC-- CIT v. Jai Pal Aggarwal (Delhi) . . . 472
----Block assessment--Undisclosed income--Documents merely showing a figure without any details but details of fixed deposits made with bank given interest rate--Tribunal deleting addition on account of fixed deposits and treating it as dumb documents--Finding not perverse--Income-tax Act, 1961, s. 158BC-- CIT v. Jai Pal Aggarwal (Delhi) . . . 472
----Block assessment--Undisclosed income--Investment in business--Document seized from assessee’s nephew containing date-wise receipts of amounts from assessee--Assessee’s nephew employed some time with assessee and no business of his own prior to search--Tribunal without going into facts ought not to have deleted addition on investment in business--Income-tax Act, 1961, s. 158BC-- CIT v. Jai Pal Aggarwal (Delhi) . . . 472
----Block assessment--Undisclosed income--No explanation for cash deposit in assessee’s bank account--Tribunal relying on annexure containing explanation of assessee--Annexure not part of record--Whether addition sustainable--Matter remanded to Assessing Officer--Income-tax Act, 1961, s. 158BC-- CIT v. Jai Pal Aggarwal (Delhi) . . . 472
ITR Volume 358 : Part 4 (Issue dated : 18-11-2013)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Penalty --Concealment of income--General principles--Voluntary surrender of income--No automatic immunity from penalty--Surrender “subject to non-initiation of penalty proceedings and prosecution†--Does not absolve assessee from liability to penalty--Whether assessee has offered an explanation for concealment or furnishing of inaccurate particulars of income to be seen--Surrender of income pursuant to notice calling for information in respect of documents found during survey of sister concern--Not voluntary--No intention to declare true income--Penalty proceedings justified--Income-tax Act, 1961, s. 271(1)(c), Expln. 1 -- MAK Data P. Ltd. v. CIT . . .593
----Concealment of income--Satisfaction of Assessing Officer--Need not be recorded in particular manner--Income-tax Act, 1961, s. 271(1)(c)-- MAK Data P. Ltd. v. CIT . . .593
Appeal to Appellate Tribunal --Cash credits--Disallowance of gifts under section 68--Difference of opinion between Members of Tribunal whether addition to be under section 68 or section 69--Genuineness of gifts not considered on the merits--Reference to Third Member--Appeal of assessee dismissed as a result of opinion of Third Member--Not proper--Matter to be decided on the merits in the light of majority opinion--Income-tax Act, 1961, ss. 68, 69, 255(4)-- Smt. Renu Aggarwal v. ITO (All) . . . 483
----Difference of opinion between Members of two-Member Bench--Reference to Third Member--Decision of Tribunal not a decision of three-Member Bench--Amenable to rectification under section 254(2)--Income-tax Act, 1961, ss. 254(2), 255(4)-- Smt. Renu Aggarwal v. ITO (All) . . . 483
----Rectification of mistakes--Mistake apparent from record--Matter referred to Third Member on question of law with respect to addition made under section 68--Conscious omission to consider issue of genuineness of gifts on the merits--Not a mistake for rectification--Income-tax Act, 1961, ss. 68, 254(2)-- Smt. Renu Aggarwal v. ITO (All) . . . 483
Appeal to High Court --Powers of High Court--High Court has inherent power to review its decision--Income-tax Act, 1961, s. 260A-- Meghalaya Steels Ltd. v. CIT (Gauhati) . . . 551
----Procedure laid down in section 260A must be followed strictly--Failure to formulate substantial question of law--Error to be rectified--Income-tax Act, 1961, s. 260A-- Meghalaya Steels Ltd. v. CIT (Gauhati) . . . 551
Appeal to Supreme Court --Application for review to High Court--Subsequent condonation of delay and admission of special leave petition--High Court has jurisdiction to review its decision--Income-tax Act, 1961-- Meghalaya Steels Ltd. v. CIT (Gauhati) . . . 551
Business expenditure --Disallowance--Firm--Remuneration paid to partners--Ceiling on--Assessee engaged in seasonal business of ginning cotton--Income generated from spare funds invested in fixed deposits--Interest declared as part of business income and assessed as such--To be taken into account for purpose of ceiling on remuneration of partners--Whether only business income and no other income to be taken into account for this purpose not considered--Income-tax Act, 1961, s. 40(b)-- CIT v. J. J. Industries (Guj) . . . 531
Capital gains --Short-term or long-term capital gains--Conversion of leasehold rights into freehold rights--Conversion by way of improvement of title--No effect on the taxability of profits--Income-tax Act, 1961, s. 2(42B)-- CIT v. Smt. Rama Rani Kalia (All) . . . 499
Capital or revenue expenditure --Company--Expenditure on increase of share capital to augment working capital--Purpose of public issue not achieved on account of non-clearance from SEBI--Capital expenditure--Income-tax Act, 1961-- Mascon Technical Services Ltd. v. CIT (Mad) . . . 545
----Share issue expenses--Despatch and out of pocket expenses--Registration fees--Listing fees--Stationery expenses--Travelling and meeting expenses--Bank charges and commission--Prof. certificate--Revenue expenditure--Income-tax Act, 1961-- CIT v. Kreon Financial Services Ltd. (Mad) . . . 542
Charitable purpose --Charitable trust--Computation of income of trust--Depreciation on fixed assets of which cost had already been claimed as application of income--Allowable--Income-tax Act, 1961-- CIT v. Devi Sakuntala Tharal Charitable Foundation (MP) . . . 452
Depreciation --Intangible assets--Software development--Assessee developing software with special application and getting it registered as trade mark--Details of expenditure thereon produced--Assessee entitled to depreciation--Income-tax Act, 1961, s. 32-- CIT v. Net 4 Nuts Ltd. (Guj) . . . 535
----Investment allowance--Carry forward and set off--Unabsorbed depreciation and investment allowance could be set off against capital gains in assessment year 1992-93--Income-tax Act, 1961, ss. 32, 263-- CIT v. Kisan Engineering Works Ltd. (All) . . . 510
Export of computer software --Exemption--Registration under Software Technology Parks of India obtained after commencement of manufacture--Power of Software Technology Parks of India to convert domestic tariff area unit into Software Technology Parks of India unit--No export made prior to date of registration--Unit entitled to exemption--Income-tax Act, 1961, s. 10A--CBDT Circular No. 1 of 2005, dated 6-1-2005-- CIT v. Expert Outsource P. Ltd. (Karn) . . . 518
----Exemption--Unit existing from 1994 but obtaining registration as 100 per cent. export oriented unit for computer software in 2002--Entitled to deduction--Cannot be denied deduction on ground of transfer of plant and machinery previously used to export unit--Income-tax Act, 1961, s. 10A-- Nagesh Chundur v. CIT (Mad) . . . 521
Firm --Registration--Condition precedent--Division of profits not governed by statutory provision--Mistake in partnership deed regarding division of profits--Mistake rectified--Firm entitled to registration--Income-tax Act, 1961, ss. 184, 185--Indian Partnership Act, 1932-- CIT v. Alison Singh and Co. (All) . . . 458
Precedent --Effect of decisions of Supreme Court in M. Janardhana Rao v. Joint CIT [2005] 273 ITR 50 (SC) and Kunhayammed v. State of Kerala [2000] 245 ITR 360 (SC)-- Meghalaya Steels Ltd. v. CIT (Gauhati) . . . 551
----High Court--Pendency of appeal from order relied on by Tribunal--Not material-- CIT v. Net 4 Nuts Ltd. (Guj) . . . 535
Reassessment --Notice--Notice not to be issued on hypothesis or contingency which may emerge in future--†Has escaped assessment†indicating an event which has taken place--Notice issued on alternative basis for taxing income--Not valid--Income-tax Act, 1961, ss. 147, 148-- DHFL Venture Capital Fund v. ITO (Bom) . . . 471
Refund --Effect of section 245--Adjustment of refund against sums due from assessee--Adjustment cannot be made without prior intimation--Income-tax Act, 1961, s. 245-- Jeans Knit P. Ltd. v. Deputy CIT (Karn) . . . 505
Search and seizure --Block assessment--Undisclosed income of third person--Notice under section 153C--Condition precedent--Satisfaction that undisclosed income belonged to third person--Satisfaction should be reasonable but need not be conclusive--Income-tax Act, 1961, ss. 132, 153C-- CIT v. Classic Enterprises (All) . . . 465
Writ --High Court--Alternate remedy--International transactions--Transfer pricing--Arm’s length price--Final assessment following determination of arm’s length price by Dispute Resolution Panel--Remedy of appeal against order of assessment before Tribunal--Writ petition not maintainable--Income-tax Act, 1961, ss. 92CA, 144C(5)-- Lionbridge Technologies Pvt. Ltd. v. Deputy CIT (Bom). . .599
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
S. 2(42B) --Capital gains--Short-term or long-term capital gains--Conversion of leasehold rights into freehold rights--Conversion by way of improvement of title--No effect on the taxability of profits-- CIT v. Smt. Rama Rani Kalia (All) . . . 499
S. 10A --Export of computer software--Exemption--Registration under Software Technology Parks of India obtained after commencement of manufacture--Power of Software Technology Parks of India to convert domestic tariff area unit into Software Technology Parks of India unit--No export made prior to date of registration--Unit entitled to exemption-- CIT v. Expert Outsource P. Ltd. (Karn) . . . 518
----Export of computer software--Exemption--Unit existing from 1994 but obtaining registration as 100 per cent. export oriented unit for computer software in 2002--Entitled to deduction--Cannot be denied deduction on ground of transfer of plant and machinery previously used to export unit-- Nagesh Chundur v. CIT (Mad) . . . 521
S. 32 --Depreciation--Intangible assets--Software development--Assessee developing software with special application and getting it registered as trade mark--Details of expenditure thereon produced--Assessee entitled to depreciation-- CIT v. Net 4 Nuts Ltd. (Guj) . . . 535
----Depreciation--Investment allowance--Carry forward and set off--Unabsorbed depreciation and investment allowance could be set off against capital gains in assessment year 1992-93-- CIT v. Kisan Engineering Works Ltd. (All) . . . 510
S. 40(b) --Business expenditure--Disallowance--Firm--Remuneration paid to partners--Ceiling on--Assessee engaged in seasonal business of ginning cotton--Income generated from spare funds invested in fixed deposits--Interest declared as part of business income and assessed as such--To be taken into account for purpose of ceiling on remuneration of partners--Whether only business income and no other income to be taken into account for this purpose not considered-- CIT v. J. J. Industries (Guj) . . . 531
S. 68 --Appeal to Appellate Tribunal--Cash credits--Disallowance of gifts under section 68--Difference of opinion between Members of Tribunal whether addition to be under section 68 or section 69--Genuineness of gifts not considered on the merits--Reference to Third Member--Appeal of assessee dismissed as a result of opinion of Third Member--Not proper--Matter to be decided on the merits in the light of majority opinion-- Smt. Renu Aggarwal v. ITO (All) . . . 483
----Appeal to Appellate Tribunal--Rectification of mistakes--Mistake apparent from record--Matter referred to Third Member on question of law with respect to addition made under section 68--Conscious omission to consider issue of genuineness of gifts on the merits--Not a mistake for rectification-- Smt. Renu Aggarwal v. ITO (All) . . . 483
S. 69 --Appeal to Appellate Tribunal--Cash credits--Disallowance of gifts under section 68--Difference of opinion between Members of Tribunal whether addition to be under section 68 or section 69--Genuineness of gifts not considered on the merits--Reference to Third Member--Appeal of assessee dismissed as a result of opinion of Third Member--Not proper--Matter to be decided on the merits in the light of majority opinion-- Smt. Renu Aggarwal v. ITO (All) . . . 483
S. 92CA --Writ--High Court--Alternate remedy--International transactions--Transfer pricing--Arm’s length price--Final assessment following determination of arm’s length price by Dispute Resolution Panel--Remedy of appeal against order of assessment before Tribunal--Writ petition not maintainable-- Lionbridge Technologies Pvt. Ltd. v. Deputy CIT (Bom). . .599
S. 132 --Search and seizure--Block assessment--Undisclosed income of third person--Notice under section 153C--Condition precedent--Satisfaction that undisclosed income belonged to third person--Satisfaction should be reasonable but need not be conclusive-- CIT v. Classic Enterprises (All) . . . 465
S. 144C(5) --Writ--High Court--Alternate remedy--International transactions--Transfer pricing--Arm’s length price--Final assessment following determination of arm’s length price by Dispute Resolution Panel--Remedy of appeal against order of assessment before Tribunal--Writ petition not maintainable-- Lionbridge Technologies Pvt. Ltd. v. Deputy CIT (Bom). . .599
S. 147 --Reassessment--Notice--Notice not to be issued on hypothesis or contingency which may emerge in future--†Has escaped assessment†indicating an event which has taken place--Notice issued on alternative basis for taxing income--Not valid-- DHFL Venture Capital Fund v. ITO (Bom) . . . 471
S. 148 --Reassessment--Notice--Notice not to be issued on hypothesis or contingency which may emerge in future--†Has escaped assessment†indicating an event which has taken place--Notice issued on alternative basis for taxing income--Not valid-- DHFL Venture Capital Fund v. ITO (Bom) . . . 471
S. 153C --Search and seizure--Block assessment--Undisclosed income of third person--Notice under section 153C--Condition precedent--Satisfaction that undisclosed income belonged to third person--Satisfaction should be reasonable but need not be conclusive-- CIT v. Classic Enterprises (All) . . . 465
S. 184 --Firm--Registration--Condition precedent--Division of profits not governed by statutory provision--Mistake in partnership deed regarding division of profits--Mistake rectified--Firm entitled to registration-- CIT v. Alison Singh and Co. (All) . . . 458
S. 185 --Firm--Registration--Condition precedent--Division of profits not governed by statutory provision--Mistake in partnership deed regarding division of profits--Mistake rectified--Firm entitled to registration-- CIT v. Alison Singh and Co. (All) . . . 458
S. 245 --Refund--Effect of section 245--Adjustment of refund against sums due from assessee--Adjustment cannot be made without prior intimation-- Jeans Knit P. Ltd. v. Deputy CIT (Karn) . . . 505
S. 254(2) --Appeal to Appellate Tribunal--Difference of opinion between Members of two-Member Bench--Reference to Third Member--Decision of Tribunal not a decision of three-Member Bench--Amenable to rectification under section 254(2)-- Smt. Renu Aggarwal v. ITO (All) . . . 483
----Appeal to Appellate Tribunal--Rectification of mistakes--Mistake apparent from record--Matter referred to Third Member on question of law with respect to addition made under section 68--Conscious omission to consider issue of genuineness of gifts on the merits--Not a mistake for rectification-- Smt. Renu Aggarwal v. ITO (All) . . . 483
S. 255(4) --Appeal to Appellate Tribunal--Cash credits--Disallowance of gifts under section 68--Difference of opinion between Members of Tribunal whether addition to be under section 68 or section 69--Genuineness of gifts not considered on the merits--Reference to Third Member--Appeal of assessee dismissed as a result of opinion of Third Member--Not proper--Matter to be decided on the merits in the light of majority opinion-- Smt. Renu Aggarwal v. ITO (All) . . . 483
----Appeal to Appellate Tribunal--Difference of opinion between Members of two-Member Bench--Reference to Third Member--Decision of Tribunal not a decision of three-Member Bench--Amenable to rectification under section 254(2)-- Smt. Renu Aggarwal v. ITO (All) . . . 483
S. 260A --Appeal to High Court--Powers of High Court--High Court has inherent power to review its decision-- Meghalaya Steels Ltd. v. CIT (Gauhati) . . . 551
----Appeal to High Court--Procedure laid down in section 260A must be followed strictly--Failure to formulate substantial question of law--Error to be rectified-- Meghalaya Steels Ltd. v. CIT (Gauhati) . . . 551
S. 263 --Depreciation--Investment allowance--Carry forward and set off--Unabsorbed depreciation and investment allowance could be set off against capital gains in assessment year 1992-93-- CIT v. Kisan Engineering Works Ltd. (All) . . . 510
S. 271(1)(c) --Penalty--Concealment of income--Satisfaction of Assessing Officer--Need not be recorded in particular manner-- MAK Data P. Ltd. v. CIT (SC). . .593
S. 271(1)(c), Expln. 1 --Penalty--Concealment of income--General principles--Voluntary surrender of income--No automatic immunity from penalty--Surrender “subject to non-initiation of penalty proceedings and prosecution†--Does not absolve assessee from liability to penalty--Whether assessee has offered an explanation for concealment or furnishing of inaccurate particulars of income to be seen--Surrender of income pursuant to notice calling for information in respect of documents found during survey of sister concern--Not voluntary--No intention to declare true income--Penalty proceedings justified-- MAK Data P. Ltd. v. CIT (SC). . .593
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