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Friday, January 31, 2014

Three Important Judgements On Capital Gains Transfer, Transfer Pricing And Coercive Recovery Of Taxes

Dear Subscriber,

 

The following important judgements are available for download at itatonline.org.

CIT vs. Sadia Shaikh (Bombay High Court At Goa)

S. 2(47)(v): Mere execution of a development agreement is not a “transfer” if possession as per s. 53A of the Transfer of Property Act is not given

Though the development agreement was executed in AY 2003-04, the possession as contemplated in Section 53A of the Transfer of Property Act was in fact not handed over by the assessee to the developer. The agreement only permitted the development to be carried out by the said developer. The entire control over the property was in fact with the assessee inasmuch as the licence to construct the property was also in the name of the assessee and the occupancy certificate was also given to the assessee. Therefore the execution of the agreement could not amount to transfer as contemplated under Section 53A of the Transfer of Property Act. The agreement was subsequently specifically modified and the assessee was liable to pay the capital gain as per the last agreement i.e. for assessment year 2008-09.

See also General Glass 108 TTJ 854 (Mum) & Fibars Infratech (ITAT Hyd) where Chaturbhuj Dwarakadas Kapadia 260 ITR 491 (Bom) is explained/ distinguished. Contrast with Charanjit Singh Atwal (ITAT Chd)


ACIT vs. Casio India Co Pvt Ltd (ITAT Delhi)

Transfer Pricing: Argument, based on BMW, that the AMP adjustment law laid down in L. G. Electronics (SB) does not apply to a full-risk distributor in not correct

In LG Electronics India Pvt. Ltd. vs. ACIT 2013 152 TTJ (Del) (SB) 273 the Special Bench held by majority that incurring of AMP expenses towards promotion of brand, legally owned by the foreign AE, constitutes a `transaction’. The contention that no disallowance could be made out of AMP expenses by benchmarking them separately when the overall net profit rate declared by the assessee was higher than other comparable cases also came to be specifically rejected by the special bench. Resultantly, the transfer pricing adjustment in relation to such AMP expenses was held to be sustainable in principle. In the eventual order, the Special Bench restored the matter to the file of the AO/TPO for fresh determination of Transfer Pricing Adjustment in relation to AMP expenses. In order to enable the determination of correct ALP of AMP expenses, the Tribunal listed out 14 parameters in Para 17.4 of its order which should be examined by the AO/TPO before reaching the final conclusion about the warrant for a TP Adjustment on this score. It is relevant to note that there were 22 interveners in this case, some of which were distributors, while others were licensed manufacturers. While setting out 14 parameters, the Special Bench has held vide first parameter that the AO/TPO should ascertain as to whether the Indian AE is simply a distributor or is holding a manufacturing license from its Foreign AE. The second parameter talks of examining as to whether or not the Indian AE is a full fledge manufacturer and whether it is selling the goods purchased from the Foreign AE as such or is making some value addition to the goods purchased from its Foreign AE before selling it to customers. Thus there is not even a slightest doubt that the special bench order not only applies to a `Manufacturer’, but also extends to a distributor, whether he is a bearing full risk or least risk. Thus, such tests are applicable with full vigor to the extent applicable, to the distributors. There is nothing in the special bench order which restricts its operation only to the `Manufacturers’.

The argument, based on BMW India Pvt. Ltd. vs. ACIT (Del) that as the assessee was a full fledged distributor and as such the benefit of AMP expenses did not spill over to the foreign AE is not acceptable because the Special Bench order in LG Electronics is applicable with full force on all the classes of the assessees, whether they are licensed manufacturers or distributors. The Bench in BMW did not have any occasion to bestow its attention to the correctness of the application by the TPO of the aforesaid parameters laid down in the special bench order as these were naturally not considered by the Officer since he passed his order much before the advent of the special bench order. There is no prize for guessing that Special Bench order has more force and binding effect over the Division Bench order on the same issue.


Dishnet Wireless Limited vs. ACIT (Madras High Court)

S. 220: AO cannot exercise coercive measures to recove tax during the period available for filing an appeal

Against the assessment order, further appeal lies to the Income Tax Appellate Tribunal u/s 253 of the Act and the time for moving the Tribunal is 60 days from the date of receipt of a copy of the order. As the appellate remedy is available to the petitioner, it could be accepted and the authority may thereafter proceed with the matter. However, in the absence of any legal impediment, the respondents have intimated recovery proceedings against the petitioner, when there is reasonable time for him to prefer an appeal. In view of the above, respondents are directed to not to take any coercive steps for recovery against the petitioner, till the appeal time is exhausted. Thereafter, the respondents are at liberty to act in accordance with law for recovery of the amount as per the order of the appellate authority.




Sectioin 147: Failure To Compute Capital Gains U/s 50C Does Not Lead To Escapement Of Income

Dear Subscriber,

 

The following important judgement is available for download at itatonline.org.

ITO vs. Haresh Chand Agarwal HUF (ITAT Agra)

S. 147: Failure to compute capital gains u/s 50C does not lead to escapement of income

The assessee sold property for Rs.6 lakh and offered capital gains on that basis. The AO accepted the claim without examining the applicability of s. 50C. He later (within 4 years from the end of the AY) reopened the assessment on the basis that the stamp duty valuation was Rs. 25 lakhs and the capital gains had to computed on that basis u/s 50C. The assessee challenged the reopening inter alia on the ground that the failure to apply s. 50C did not mean income had escaped assessment. The CIT(A) accepted the plea. On appeal by the department to the Tribunal HELD dismissing the appeal:

S. 50C is not a final determination to prove that it is a case of escapement of income. The report of the approved valuer may give estimated figure on the basis of facts of each case. Therefore, mere applicability of s. 50C would not disclose any escapement of income in the facts and circumstances of the case. The AO at the original assessment stage considered all the documents and material produced before him and has accepted the cost of property as was declared by the assessee. The reassessment is on change of opinion which is not justified

Note: On the question whether failure to voluntarily apply s. 50C attracts s. 271(1)(c) penalty see Madan Theatres (Cal HC), Renu Hingorani (ITAT Mum) & Chimanlal Manilal Patel (ITAT Ahd)

(Click Here To Read More)

 

Regards,

 

Editor,

 

itatonline.org

---------------------

Latest:

DCIT vs. Swarna Tollway Pvt. Ltd (ITAT Hyderabad)

S. 32: Road constructed on Build-Operate-Transfer (“BOT”) terms is eligible for depreciation even though assessee is not the legal owner of the road


Development agreement by which possession is transferred is not a "transfer" for capital gains



Dear all please find herewith case law relating to transfer of development right not treated as transfer

January 20th, 2014


S. 2(47)(v): A development agreement by which possession is transferred to developer is not a “transfer” for capital gains purposes if developer’s willingness to perform his part of the contract is not ascertainable with certainty

The assessee entered into a Development Agreement-cum-GPA with MAK Projects on 15.12.2006 (AY 2007-08). The agreement provided the MAK would construct a villa township in 30 months and that the assessee was entitled was entitled to a certain portion (16 villas) of the developed area as consideration for the transfer of the land. Though possession of the property was handed over to the developer, the assessee claimed that the transaction did not give rise to capital gains in AY 2007-08 on the basis that (a) the consideration was neither received nor quantified, (b) the project was at the conception stage and even the building plan approvals were not received & (c) the developer had not incurred any expenditure on the project. The AO & CIT(A) relied on Chaturbhuj Dwarakadas Kapadia 260 ITR 491 (Bom) where it was held that the execution of a development agreement amounted to a transfer u/s 2(47)(v) and gave rise to capital gains. On appeal by the assessee to the Tribunal HELD allowing the appeal:

S. 2(47)(v) provides that the term ‘transfer‘ includes “any transaction involving the allowing of, the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in s. 53A of the Transfer of Property Act”. In order to be “of the nature referred to in s. 53A of the Transfer of Property Act”, the necessary precondition is that the transferee should be willing to perform his part of the contract. The “willingness” has to be absolute and unconditional. If willingness is studded with a condition, it is no more than an offer and cannot be termed as willingness. On facts, the “willingness” of the developer to perform his part of the obligations is not ascertainable in AY 2007-08 because (a) the consideration was not paid to the assessee, (b) the building plans had not been approved, (c) there was no progress with regard to development in the AY, (d) there was no investment by the developer in the construction activity during the AY. It is not possible to say whether the developer is prepared to carry out those parts of the agreement to their logical end. The fact that the assessee has given possession is not relevant. Consequently, s. 2(47)(v) does not apply and the capital gains is not 


Mere execution of development agreement is not a transfer



Dear All please find herewith relevant case law relating to transfer of development rights.

If you thought this is useful to other persons also please forward the same to all such persons

CIT vs. Sadia Shaikh (Bombay High Court At Goa)

January 30th, 2014
Download: sadia_development_agreement_transfer.pdf


S. 2(47)(v): Mere execution of a development agreement is not a “transfer” if possession as per s. 53A of the Transfer of Property Act is not given

Though the development agreement was executed in AY 2003-04, the possession as contemplated in Section 53A of the Transfer of Property Act was in fact not handed over by the assessee to the developer. The agreement only permitted the development to be carried out by the said developer. The entire control over the property was in fact with the assessee inasmuch as the licence to construct the property was also in the name of the assessee and the occupancy certificate was also given to the assessee. Therefore the execution of the agreement could not amount to transfer as contemplated under Section 53A of the Transfer of Property Act. The agreement was subsequently specifically modified and the assessee was liable to pay the capital gain as per the last agreement i.e. for assessment year 2008-09.


ITAT Explains Important Law on Capitals Gains For Development Agreements

 

Dear Subscriber,

 

The following important judgement is available for download at itatonline.org.

Fibars Infratech Pvt. Ltd vs. ITO (ITAT Hyderabad)

S. 2(47)(v): A development agreement by which possession is transferred to developer is not a “transfer” for capital gains purposes if developer’s willingness to perform his part of the contract is not ascertainable with certainty

The assessee entered into a Development Agreement-cum-GPA with MAK Projects on 15.12.2006 (AY 2007-08). The agreement provided the MAK would construct a villa township in 30 months and that the assessee was entitled was entitled to a certain portion (16 villas) of the developed area as consideration for the transfer of the land. Though possession of the property was handed over to the developer, the assessee claimed that the transaction did not give rise to capital gains in AY 2007-08 on the basis that (a) the consideration was neither received nor quantified, (b) the project was at the conception stage and even the building plan approvals were not received & (c) the developer had not incurred any expenditure on the project. The AO & CIT(A) relied on Chaturbhuj Dwarakadas Kapadia 260 ITR 491 (Bom) where it was held that the execution of a development agreement amounted to a transfer u/s 2(47)(v) and gave rise to capital gains. On appeal by the assessee to the Tribunal HELD allowing the appeal:

S. 2(47)(v) provides that the term ‘transfer‘ includes “any transaction involving the allowing of, the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in s. 53A of the Transfer of Property Act”. In order to be “of the nature referred to in s. 53A of the Transfer of Property Act”, the necessary precondition is that the transferee should be willing to perform his part of the contract. The “willingness” has to be absolute and unconditional. If willingness is studded with a condition, it is no more than an offer and cannot be termed as willingness. On facts, the “willingness” of the developer to perform his part of the obligations is not ascertainable in AY 2007-08 because (a) the consideration was not paid to the assessee, (b) the building plans had not been approved, (c) there was no progress with regard to development in the AY, (d) there was no investment by the developer in the construction activity during the AY. It is not possible to say whether the developer is prepared to carry out those parts of the agreement to their logical end. The fact that the assessee has given possession is not relevant. Consequently, s. 2(47)(v) does not apply and the capital gains is not assessable to tax (Chaturbhuj Dwarakadas Kapadia 260 ITR 491 (Bom) explained/ distinguished)

Contrast with Charanjit Singh Atwal vs. ITO (ITAT Chd) (order attached) where a contrary view was taken following Chaturbhuj Kapadia 260 ITR 491 (Bom) but without appreciating thee fine point regarding certainty of developers’ “willingness” to perform his part of the bargain

(Click Here To Read More)

 

Regards,

 

Editor,

 

itatonline.org

---------------------

Latest:

Infotech Enterprises Limited vs. ACIT (ITAT Hyderabad)

No s. 40(a)(i) TDS disallowance for amounts made taxable due to retrospective amendment. Also, concept of “business connection” u/s 9(1)(i) & “fees for technical services” u/s 9(1)(vii) explained



No Section 40(a)(i) TDS Disallowance For Income Made Taxable Under Retrospective Law: ITAT Hyd


Dear Subscriber,

 

The following important judgement is available for download at itatonline.org.

Infotech Enterprises Limited vs. ACIT (ITAT Hyderabad)

No s. 40(a)(i) TDS disallowance for amounts made taxable due to retrospective amendment. Also, concept of “business connection” u/s 9(1)(i) & “fees for technical services” u/s 9(1)(vii) explained

The assessee entered into an agreement with its associated enterprises (AEs) outside India pursuant to which it sub-contracted some of the work that it had obtained from its customers. The assessee incurred an expenditure of Rs.19 crore towards “technical consultancy charges” paid to the said AEs. The AO & DRP held that the assessee was “habitually securing orders” for the AEs from India and that there was a ‘business connection’ between the assessee and the AEs under Explanation 2 to s. 9(1)(i). Alternatively, it was held that the amount was assessable as “fees for technical services” u/s 9(1)(vii). As the assessee had not deducted TDS u/s 195, the expenditure was disallowed u/s 40(a)(i). On appeal by the assessee to the Tribunal HELD allowing the appeal:

(i) The facts show that the assessee secured orders from customers for its own benefit and only parceled out a portion of the work to the AEs. The Explanation to s. 9(1)(i) can be invoked only when the Indian company secures orders for the benefit of non-resident. As the assessee has not canvassed / secured any orders for its non resident subsidiaries, s. 9(1)(i) cannot be invoked. Also, the foreign subsidiaries do not work exclusively for the assessee and they obtain orders on their own from other foreign parties and also sub contract the work to the assessee depending on exigencies. Further, no operations have been undertaken by foreign subsidiaries in India and no engineers have been deputed by them to India and even they do not have permanent establishment in India. Even under the DTAA, no income is assessable to tax in India. CBDT Circular No. 29 dated 27.3.1969 is inapplicable to the present case;

(ii) As regards “fees for technical services”, the payments made to the subsidiaries may be construed as “fees for technical services”. However this is only due to the retrospective amendment by Finance Act 2010. Prior to that, Ishikawajima-Harima Heavy Industries 288 ITR 408 (SC) had held that s. 9(1)(vii) could be invoked only where the services were rendered in India and utilized in India. At the time of the payment Ishikawajima-Harima was the law of the land and the assessee was of the bona fide belief that TDS was not necessary on the said payments of fees for technical services. S. 40(a)(i) cannot apply to disallow payments which become taxable subsequently due to a retrospective legislation. Further, some of the payments do not satisfy the “make available” test in the DTAA as held in De Beers India Minerals

Note: The judgement also considers the Q whether sum paid for acquiring license of software is taxable as “royalty” and the transfer pricing implications of a loan given to the AE and guarantee fee paid to the AE

(Click Here To Read More)

 

Regards,

 

Editor,

 

itatonline.org

---------------------

Latest:

ITO vs. Haresh Chand Agarwal HUF (ITAT Agra)

S. 147: Failure to compute capital gains u/s 50C does not lead to escapement of income


Section 43B Deduction Applies To Employees PF/ ESIC Contribution: Rajasthan High Court

 

Dear Subscriber,

 

The following important judgement is available for download at itatonline.org.

CIT vs. Jaipur Vidyut Vitran Nigam Ltd (Rajasthan High Court)

Employees’ PF/ ESI Contribution is also covered by s. 43B & allowable as a deduction u/s 36(1)(va) if paid by the “due date” for filing ROI

In AY 2001-02 etc, the assessee claimed a deduction for payment of (employees’ contribution) to GPF, CPF and ESI u/s 36(1)(va) read with s. 43B of the I.T. Act. The basis of the claim was that though the amount was not paid on or before the due date under the respective Act, the same was deposited on or before the due date of furnishing of the Income-tax returns u/s 139 of the I.T. Act and, therefore, in view of s. 43B read with s. 36(1)(va), the entire amount was allowable. The AO rejected the claim for deduction though the Tribunal allowed it. On appeal by the department to the High Court HELD dismissing the appeal:

No substantial question of law arise out of the orders of the ITAT as it is an admitted fact that the entire amount was deposited by the assessee at least on or before the due date of filing of the returns u/s 139 of the I.T. Act. If the amount has been deposited on or before the due date of filing the return u/s 139 then the amount cannot be disallowed u/s 43B or u/s 36(1)(va) of the Act

See the contrary view in Gujarat State Road Transport Corp (Guj). For a listing of all cases see forum post. In Pradip J. Mehta 300 ITR 231 (SC) it was held that the benefit of doubt should invariably go to the taxpayer.

(Click Here To Read More)

 

Regards,

 

Editor,

 

itatonline.org

---------------------

Latest:

CBDT Accepts High Court Verdict Of No TDS On Service-Tax Component


Thursday, January 30, 2014

The Central Board of Direct Taxes (CBDT) has decided to keep in abeyance the decision to change the procedure for PAN allotment till further orders. Accordingly, the operation of Circular No. 11 dated 16.01.2014 issued to PAN service providers has been directed to be put on hold till further orders. In the meantime, the old procedure of PAN application and allotment shall continue.
ICAI proposed the replacement of ICAI Code of Ethics, 2009 with the "ICAI Code of Professional Ethics, 2014".

The Draft Code may be assessed at ICAI Website at the following link

http://www.icai.org/new_post.html? post_id=958&c_id=50
http://www.icai.org/new_post.html?post_id=958&c_id=50
Service Tax : Though 'tractor-trailer' cannot carry any goods as such but, since it is adapted for carrying goods as counter-weight when trailer is carried, it became a 'goods carriage' for taxation purposes; more so, as it was registered under RTO as 'goods carriage' and taxation authorities cannot go behind registration certificate
■■■
[2014] 41 taxmann.com 289 (Gujarat)
HIGH COURT OF GUJARAT
Nabros Transport (P.) Ltd.
v.
State of Gujarat

Wednesday, January 29, 2014

Income Tax E-TDS : Mandatory to submit Form 27A generated by File Validation Utility (FVU)

Submit Form 27A generated by FVU withTDS/TCS statement wef 01.02.2014


With effect from February 1, 2014, it is mandatory to submit Form 27A generated by TDS/TCS FVU (File Validation Utility) duly signed, along the TDS/TCS statement/(s). Any other Form 27A submitted will be treated as invalid submission and the same will be rejected by TIN-FC branches. (27/01/2014)




PAN Card Notification ignores Practical issues in Implementation


PAN Card Notification ignores Practical issues in Implementation

CBDT has changed the procedure for issue of PAN Card w.e.f. 03.02.2014 and has made it mandatory to submit self- attested copies of proof of identity, address and date of birth documents and also to produce original documents for verification vide its Notification No. F.No: oPAN/1/3/2003/Part Dated: 24.1.2014 and vide Press ReleaseDated 24.01.2014.

It said in above Notification that “The copies of Proof of Identity (POI), Proof of Address (POA) and Date of Birth (DOB) documents attached with PAN application form, will be verified vis a vis their original documents at the time of submission of PAN application at PAN Facilitation Centre. Original documents shall not be retained by the PAN Facilitation Centres and will be returned back to the applicant after verification.”

While passing the notification CBDT has failed to take into account practical difficulties which Applicant and PAN Facilitation Centres will have to face. It is easier said than done. Before pronouncing the anarchic order the CBDT should have considered the problems of millions of PAN Holders (requiring to get their PAN DATA base changed and or for issuance of New PAN CARD) and NEW APPLICANTS above the age of 50 years and millions of illiterates male and female applying for PAN for one or the other reasons who would be failing to produce any documents with regard to their Date of Birth.  In the absence of any specific guidelines as to what would construe as a valid birth date proof other than school certificate would be a daunting task and big challenge for Applicants as well as TIN_FCs.

CBDT move seems to be also a result of CAG Report in March 2011, in which after finding a huge mismatch between the number of PAN holders and the number of tax return filings, the Comptroller & Auditor General had asked the I- T department to ensure that a single taxpayer was not issued multiple cards.

CBDT move may also result in curb on PAN Frauds and on issue of PAN based on forged documents but at the same time CBDT should understands the practical problem, Ground Realities and comes up with a practical solution sooner than the earlier.

(Published with input from Advocate C.P Chugh)

http://taxguru.in/income-tax/pan-card-notification-ignores-practical-issues-implementation.html



The practical difficulties faced by Member ( 2 members have mailed this to me)

1. The original proof are misplaced, then he will not be eligible to apply.

2.  In case of online application, no procedure presribed in this regard. 





Tuesday, January 28, 2014

Volume 29 : Part 4 (Issue dated : 27-1-2014)


ITR’S TRIBUNAL TAX REPORTS (ITR (TRIB)) -- PRINT AND ONLINE EDITION

 

PRINT EDITION

Volume 29 : Part 4 (Issue dated : 27-1-2014)

SUBJECT INDEX TO CASES REPORTED

Advance --Interest--Liability to pay interest for deferment of advance tax based on advance tax payable on returned income not on assessed income--Income-tax Act, 1961, s. 234C-- SAP India P. Ltd. v. Deputy CIT (Bangalore) . . . 469

Business expenditure --Amortisation of preliminary expenses--Investment of substantial amount of additional equity share capital in purchase of machinery--Substantial increase in sales turnover--Expenditure can be attributed to extension of undertaking--Assessee entitled to amortisation of preliminary and pre-operative expenses--Income-tax Act, 1961, s. 35D-- Chiranjeevi Wind Energy Ltd. v. Assistant CIT (Chennai) . . . 534

----Disallowance--Payments liable to deduction of tax at source--Professional consultancy fee--Direction to verify if tax deducted and allow if tax deducted--Proper--Income-tax Act, 1961, s. 40(a)(ia)-- Premier Exploration Services P. Ltd. v. ITO (Delhi) . . . 427

----Staff welfare and advertising and sales promotion expenses--Expenses towards food and refreshments to employees at workplace and gifts to employees--Provision of free meals to employees essential for employee welfare--Allowable as business expenditure--No case that sales promotion expenses not directly linked to promotion of business and growth objectives--Allowable--Income-tax Act, 1961, s. 37(1)-- SAP India P. Ltd. v. Deputy CIT (Bangalore) . . . 469

Capital or revenue loss --Film production--Expenditure incurred on abandoned film allowable--Income-tax Act, 1961-- ITO v. Abdul G. Nadiadwala (Mumbai) . . . 528

Charitable purpose --Exemption--Notification of charitable activity in circular issued by Central Board of Direct Taxes not required--Exemption cannot be denied on ground of lack of registration under A. P. Charitable and Hindu Religious Institutions and Endowments Act, 1987--Whether sums used for tsunami project or Indiramma project would not make any difference--Exemption allowable--Income-tax Act, 1961, ss. 11, 12-- Deputy DIT (Exemption) v. Society for Integrated Development in Urban and Rural Areas (Siddur) (Hyderabad) . . . 506

Depreciation --Rate of depreciation--Computer peripherals--60 per cent. depreciation allowable--Income-tax Act, 1961-- Premier Exploration Services P. Ltd. v. ITO (Delhi) . . . 427

Exemption --Export of computer software--†Computer software†--Definition--Conditions for grant of exemption--Undertaking must be set up under Software Technology Park Scheme, must manufacture or produce computer software and computer software or information technology enabled services must be exported out of India--Assessee formed as subsidiary of foreign company which manufactured standard software--Assessee’s role to provide customisation of standard software and corrections or development of new software module--Is development of computer software--Assessee to establish correlation between receipts in foreign exchange and nature of services rendered--Matter remanded--Claim relating to computation of export turnover and total turnover--To be adjudicated on remand--Income-tax Act, 1961, s. 10A-- SAP India P. Ltd. v. Deputy CIT (Bangalore) . . . 469

----Export oriented undertaking in special economic zone--Assessee purchasing unfinished handicraft goods and applying various processes like cutting, polishing, repairing, remaking, to them--Certificates issued by Government and other authorities showing assessee as “manufacturer of all types of handicrafts†--Assessments made after scrutiny in preceding years allowing deduction--No change in facts--Principle of consistency--Assessee entitled to deduction--Amount accrued or received from duty drawback--Entitled to deduction--Income-tax Act, 1961, s. 10AA-- ITO v. Makers Mart (Jodhpur) . . . 444

Income --Accrual of income--Token advance received during earlier previous year--To be considered as income in year of performance of work--Direction to Assessing Officer to consider whether income accrued in current assessment year--Matter remanded--Income-tax Act, 1961-- Robin Nana Bhai Bhatt v. Assistant CIT (Mumbai) . . . 531

Industrial undertaking --Special deduction--Claim to additional deduction cannot be raised for first time before Commissioner (Appeals)--Income-tax Act, 1961, s. 80-IB-- Chiranjeevi Wind Energy Ltd. v. Assistant CIT (Chennai) . . . 534

International transactions --Computation of arm̢۪s length price--Benefit of plus or minus 5 per cent. not allowable--Income-tax Act, 1961, s. 92C(2)-- Premier Exploration Services P. Ltd. v. ITO (Delhi) . . . 427

----Computation of arm̢۪s length price--Profit level indicator--Foreign exchange income to be included as operating income--Income-tax Act, 1961-- Premier Exploration Services P. Ltd. v. ITO (Delhi) . . . 427

----Computation of arm̢۪s length price--Selection of comparables--Profit of comparable company overstated in auditors report--Overstated profit to be adjusted while working out operational profit--Matter remanded--Income-tax Act, 1961-- Premier Exploration Services P. Ltd. v. ITO (Delhi) . . . 427

----Computation of arm̢۪s length price--Selection of comparables--Risk profile--Adjustment only where difference in risk resulting in deflation or inflation of financial results of comparables--Income-tax Act, 1961-- Premier Exploration Services P. Ltd. v. ITO (Delhi) . . . 427

----Computation of arm̢۪s length price--Selection of comparables--Segment allocation of expenses not reliable--Functional dissimilarity--Not comparable--Income-tax Act, 1961-- Premier Exploration Services P. Ltd. v. ITO (Delhi) . . . 427

----Computation of arm̢۪s length price--Transactional net margin method--Non-operational income to be excluded in computation of arm̢۪s length price--Income-tax Act, 1961-- Premier Exploration Services P. Ltd. v. ITO (Delhi) . . . 427

----Computation of arm̢۪s length price--Transactional net margin method--Use of multiple years̢۪ data--Failure of assessee to establish influence of multiple years̢۪ data on determination of transfer pricing--Transfer Pricing Officer justified in using current year data--Income-tax Act, 1961-- Premier Exploration Services P. Ltd. v. ITO (Delhi) . . . 427

Reassessment --Jurisdiction--Mere change of opinion--No fresh information collected--Reopening of proceedings bad in law--Income-tax Act, 1961, ss. 143(3), 147-- ITO v. Object Connect India P. Ltd. (Hyderabad) . . . 518

Revision --Commissioner--Erroneous and prejudicial to Revenue--Computation of peak fund deficiency--Difference between figures computed by Assessing Officer and by Commissioner--Excess portion of cash outflow requiring examination by Assessing Officer--Direction issued by Commissioner justified--Income-tax Act, 1961, s. 263-- K. V. Balagangadharan v. Deputy CIT (Cochin) . . . 539

----Commissioner--Erroneous and prejudicial to Revenue--Cost relatable to sale of land to be deducted whether gains as business income or short-term capital gains--Closing stock credited to profit and loss account will not increase profits from business--No prejudice to Revenue--Revision not justified--Income-tax Act, 1961, s. 263-- K. V. Balagangadharan v. Deputy CIT (Cochin) . . . 539

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961

S. 10A --Exemption--Export of computer software--†Computer software†--Definition--Conditions for grant of exemption--Undertaking must be set up under Software Technology Park Scheme, must manufacture or produce computer software and computer software or information technology enabled services must be exported out of India--Assessee formed as subsidiary of foreign company which manufactured standard software--Assessee’s role to provide customisation of standard software and corrections or development of new software module--Is development of computer software--Assessee to establish correlation between receipts in foreign exchange and nature of services rendered--Matter remanded--Claim relating to computation of export turnover and total turnover--To be adjudicated on remand-- SAP India P. Ltd. v. Deputy CIT (Bangalore) . . . 469

S. 10AA --Exemption--Export oriented undertaking in special economic zone--Assessee purchasing unfinished handicraft goods and applying various processes like cutting, polishing, repairing, remaking, to them--Certificates issued by Government and other authorities showing assessee as “manufacturer of all types of handicrafts†--Assessments made after scrutiny in preceding years allowing deduction--No change in facts--Principle of consistency--Assessee entitled to deduction--Amount accrued/received from duty drawback--Entitled to deduction-- ITO v. Makers Mart (Jodhpur) . . . 444

S. 11 --Charitable purpose--Exemption--Notification of charitable activity in circular issued by Central Board of Direct Taxes not required--Exemption cannot be denied on ground of lack of registration under A. P. Charitable and Hindu Religious Institutions and Endowments Act, 1987--Whether sums used for tsunami project or Indiramma project would not make any difference--Exemption allowable-- Deputy DIT (Exemption) v. Society for Integrated Development in Urban and Rural Areas (Siddur) (Hyderabad) . . . 506

S. 12 --Charitable purpose--Exemption--Notification of charitable activity in circular issued by Central Board of Direct Taxes not required--Exemption cannot be denied on ground of lack of registration under A. P. Charitable and Hindu Religious Institutions and Endowments Act, 1987--Whether sums used for tsunami project or Indiramma project would not make any difference--Exemption allowable-- Deputy DIT (Exemption) v. Society for Integrated Development in Urban and Rural Areas (Siddur) (Hyderabad) . . . 506

S. 35D --Business expenditure--Amortisation of preliminary expenses--Investment of substantial amount of additional equity share capital in purchase of machinery--Substantial increase in sales turnover--Expenditure can be attributed to extension of undertaking--Assessee entitled to amortisation of preliminary and pre-operative expenses-- Chiranjeevi Wind Energy Ltd. v. Assistant CIT (Chennai) . . . 534

S. 37(1) --Business expenditure--Staff welfare and advertising and sales promotion expenses--Expenses towards food and refreshments to employees at workplace and gifts to employees--Provision of free meals to employees essential for employee welfare--Allowable as business expenditure--No case that sales promotion expenses not directly linked to promotion of business and growth objectives--Allowable-- SAP India P. Ltd. v. Deputy CIT (Bangalore) . . . 469

S. 40(a)(ia) --Business expenditure--Disallowance--Payments liable to deduction of tax at source--Professional consultancy fee--Direction to verify if tax deducted and allow if tax deducted--Proper-- Premier Exploration Services P. Ltd. v. ITO (Delhi) . . . 427

S. 80-IB --Industrial undertaking--Special deduction--Claim to additional deduction cannot be raised for first time before Commissioner (Appeals)-- Chiranjeevi Wind Energy Ltd. v. Assistant CIT (Chennai) . . . 534

S. 92C(2) --International transactions--Computation of arm̢۪s length price--Benefit of plus or minus 5 per cent. not allowable-- Premier Exploration Services P. Ltd. v. ITO (Delhi) . . . 427

S. 143(3) --Reassessment--Jurisdiction--Mere change of opinion--No fresh information collected--Reopening of proceedings bad in law-- ITO v. Object Connect India P. Ltd. (Hyderabad) . . . 518

S. 147 --Reassessment--Jurisdiction--Mere change of opinion--No fresh information collected--Reopening of proceedings bad in law-- ITO v. Object Connect India P. Ltd. (Hyderabad) . . . 518

S. 234C --Advance tax--Interest--Liability to pay interest for deferment of advance tax based on advance tax payable on returned income not on assessed income-- SAP India P. Ltd. v. Deputy CIT (Bangalore) . . . 469

S. 263 --Revision--Commissioner--Erroneous and prejudicial to Revenue--Computation of peak fund deficiency--Difference between figures computed by Assessing Officer and by Commissioner--Excess portion of cash outflow requiring examination by Assessing Officer--Direction issued by Commissioner justified-- K. V. Balagangadharan v. Deputy CIT (Cochin) . . . 539

----Revision--Commissioner--Erroneous and prejudicial to Revenue--Cost relatable to sale of land to be deducted whether gains as business income or short-term capital gains--Closing stock credited to profit and loss account will not increase profits from business--No prejudice to Revenue--Revision not justified-- K. V. Balagangadharan v. Deputy CIT (Cochin) . . . 539

 






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ITR Volume 360 : Part 4 (Issue dated : 27-1-2014)

 

INCOME TAX REPORTS (ITR)--PRINT AND ONLINE EDITION

ONLINE EDITION

SUBJECT INDEX TO CASES REPORTED

HIGH COURTS

Cash --Share application money--Burden of proof--Burden on assessee to prove genuineness of transaction--Mere production of permanent account numbers or incorporation details of companies which applied for shares not sufficient--Finding by Assessing Officer that applicants for shares were entry operators not involved in any business--Tribunal not justified in deleting addition of amounts to income of assessee--Income-tax Act, 1961, s. 68-- CIT v. NR Portfolio P. Ltd. (Delhi) . . . 68

Penalty --Concealment of income or furnishing inaccurate particulars--Dishonest intention of assessee must be shown--Contract between assessee and party for procurement, supply and erection of automobile assembly equipment--Party having right to claim penalty, if assessee failed to meet delivery dates in contract--Assessee as caution providing for penalty in books and claiming deduction at earliest point of time--Not a case of concealment of income for purpose of avoiding tax--Penalty not leviable--Income-tax Act, 1961, s. 271(1)(c)-- CIT v. Durr India P. Ltd. (Mad) . . . 87

 

PRINT EDITION

ITR Volume 360 : Part 4 (Issue dated : 27-1-2014)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Agricultural income-tax (Kerala) --Recovery of tax--Provision that assessments shall be completed within five year from end of year for which agricultural income was first assessable--Amended assessment order passed beyond five-year period--Recovery proceedings not valid--Kerala Agricultural Income-tax Act, 1991, ss. 35(2), 57-- Savy L. Purayidam v. Agrl. IT and CTO (Ker) . . . 551

Business expenditure --Disallowance--Guest house--Depreciation on guest house--Not allowable--Income-tax Act, 1961, s. 37(4)-- CIT v. Radico Khaitan Ltd. (All) . . . 462

Business income or income from other sources --Interest income--To be treated as business income--Not income from other sources--Income-tax Act, 1961, ss. 22, 56-- CIT v. Radico Khaitan Ltd. (All) . . . 462

Capital gains --Capital asset--Law applicable--Effect of section 28(va)--Technical know-how acquired on or after 1-4-1998 is a capital asset--Amount received on transfer of such asset assessable as capital gains--Income-tax Act, 1961, ss. 28, 45-- CIT v. Wintac Ltd. (Karn) . . . 614

----Capital loss--Sale of shares to subsidiary company--Sale to avoid stringent action by financial institution--Sale genuine--Losses deductible--Income-tax Act, 1961-- CIT v. Wintac Ltd. (Karn) . . . 614

----Exemption--Sale of long-term capital asset and construction of residential house within three years--Meaning of “construction†--Purchase and demolition of old house and construction of new house within three years--Assessee entitled to exemption--Income-tax Act, 1961, s. 54F-- CIT v. Ashok Kumar Ralhan (Delhi) . . . 575

Charitable purpose --Exemption--Accumulation of income--Information to be furnished to Assessing Officer in prescribed form within prescribed time--Matter of form and not of substance--Information furnished in form of letter with full details as required in Form 10 furnished for setting part and carrying forward unspent amount for spending in next year--Assessee entitled to exemption--Income-tax Act, 1961, s. 11-- CIT v. Moti Ram Gopi Chand Charitable Trust (All) . . . 598

Dividend --Deemed dividend--Loan to shareholder--Deemed dividend not to be assessed in hands of person not a shareholder of company--Income-tax Act, 1961, s. 2(22)(e)-- Asst. CIT v. Britto Amusement Pvt. Ltd. (Bom) . . . 544

Export --Special deduction--Computation--Conversion of raw materials into yarn on job work basis--Net conversion charges--Ninety per cent. of sum to be reduced in total turnover to arrive at business profits--Income-tax Act, 1961, s. 80HHC-- CIT v. Kadri Mills Ltd. (Mad) . . . 595

----Special deduction--Demurrage and dead freight charges liability of assessee and deducted before remittance of export proceeds--Allowable--Income-tax Act, 1961, s. 80HHC-- CIT v. Bannariamman Exports Ltd. (Mad) . . . 591

Income or capital --Agreement for sale of property to lessee--Termination of agreement--Sale agreement providing for forfeiture of thirty lakhs of rupees--Amount received in excess assessable as revenue receipt--Income-tax Act, 1961-- CIT v. Wintac Ltd. (Karn) . . . 614

----Non-compete fees--Capital receipt--Income-tax Act, 1961-- CIT v. Wintac Ltd. (Karn) . . . 614

Industrial undertaking --Special deduction--Deduction under section 80-I allowable on gross total income without reducing deduction under section 80HH--Income-tax Act, 1961, ss. 80HH, 80-I-- CIT v. Radico Khaitan Ltd. (All) . . . 462

----Special deduction--Income surrendered during survey--No presumption that surrendered income eligible for deduction under section 80-IB--Burden on assessee to demonstrate that surrendered income derived from industrial undertaking and eligible for section 80-IB--No evidence to establish direct nexus of income with industrial undertaking--Assessee not entitled to deduction--Income-tax Act, 1961, s. 80-IB-- Tudor Knitting Works Pvt. Ltd. v. CIT (P&H) . . . 453

----Special deduction under sections 80HH and 80-I--Computation of profits--Determination of value of raw material--Raw material not available at place of production--Determination of value of raw material to be made taking into account cost at nearest available place, cost of transportation and local taxes--Income-tax Act, 1961, ss. 80HH, 80-I-- CIT v. Wipro Ltd. (No. 1 ) (Karn) . . . 606

Interest-tax --Chargeable interest--Sticky loans--Interest not credited in profit and loss account as recovery extremely doubtful--Not chargeable interest--Interest-tax Act, 1974, ss. 4, 5, 6-- UCO Bank v. CIT (Cal) . . . 567

----Finding that transaction entered into by assessee with third party is hire purchase agreement and not a loan transaction--No requirement of payment of interest--Interest-tax Act, 1974-- CIT v. M. G. Brothers Finance Ltd. (AP) . . . 603

Interpretation of taxing statutes --Reasonable interpretation-- CIT v. Leroy Somer and Controls (India) P. Ltd. (Delhi) . . . 532

Penalty --Concealment of income--Condition precedent--Evidence of deliberate concealment--Finding in assessment proceedings not conclusive--Addition to income based on estimate--No evidence of deliberate concealment of income--Penalty could not be imposed--Income-tax Act, 1961, s. 271(1)(c)-- CIT v. Krishi Tyre Retreading and Rubber Industries (Raj) . . . 580

----International transaction--Failure to furnish documentation or information required under section 92D--Scope of section 271G--Penalty is discretionary--Notice under section 92D should specify information or document to be furnished--Income-tax Act, 1961, ss. 92D, 271G-- CIT v. Leroy Somer and Controls (India) P. Ltd. (Delhi) . . . 532

Reassessment --Company--Book profits--Computation--Notice after four years--Failure to disclose material facts necessary for assessment--Amount considered in scrutiny assessment--Assessing Officer taking different view regarding computation of income--Notice not valid--Income-tax Act, 1961, ss. 115JB, 147, 148-- Gujarat Lease Financing Ltd. v. Deputy CIT (Guj) . . . 496

----Notice after four years--Conditions precedent--No satisfaction recorded by Assessing Officer that income has escaped assessment by reason of failure on part of assessee to disclose fully and truly all material facts necessary for its assessment--Notice not valid--Income-tax Act, 1961, ss. 147, 148-- General Motors India Pvt. Ltd. v. Deputy CIT (Guj) . . . 527

Recovery of tax --Appeal to Appellate Tribunal--Stay of recovery pending appeal--Tribunal holding assessee having arguable case and directing hearing along with Department̢۪s cross-appeal--Subsequently dismissing stay application without granting adjournment--Inconsistent approach of Tribunal--Writ petition--High Court--Tribunal to hear appeal on merits--Income-tax Act, 1961-- Unique Artage v. Union of India (Raj) . . . 467

Refund --Application for refund--Delay in filing return--Claim for refund filed belatedly--Condonation of delay--Refusal to condone delay causing genuine hardship to assessee--Delay condoned matter remitted to Chief Commissioner to consider application afresh--Income-tax Act, 1961-- Vasco Sales and Marketing Corporation v. Deputy CIT (Ker) . . . 578

Revision --Commissioner--Powers--Search and seizure--Block assessment--Law applicable--Effect of amendment of section 158BG--Commissioner has no power to revise block assessments made pursuant to searches conducted prior to 1-1-1997--Income-tax Act, 1961, ss. 158BC, 158BG, 158BH, 263-- R. Srinivasan v. Asst./Deputy CIT (Mad) . . . 471

----Commissioner--Search and seizure--Block assessment--Tribunal finding transactions reflected in books of account and genuine transactions--Order of Tribunal on block assessment attaining finality--Notice of revision solely on basis of block assessment not valid--No material for Commissioner to deny assessee deduction and depreciation considered by Assessing Officer--Income-tax Act, 1961, s. 263-- Seshasayee Paper and Boards Ltd. v. Deputy CIT (Mad) . . . 483

Search and seizure --Warrant of authorisation--Four companies used for booking bogus expenses by a coal company through assessees--Assessees acting as authorised representatives of two of four companies in respect of assessment records--Search and seizure operations at residence and office premises of assessees--Valid--Deputy Director possessing information pertaining to four companies connected with coal company and assessees̢۪ nexus therewith--Reason to suspect that income had been concealed or was likely to be concealed by assessees need not be stated in notice under section 131(1A)--Notice valid--Income-tax Act, 1961, ss. 131(1A), 132-- Sumermal Jain v. Deputy CIT (Cal) . . . 553

Settlement of cases --Settlement Commission--Addition based on statement and affidavit received after conclusion of arguments--Failure to confront assessee with statement and affidavit--Violation of natural justice--Order of Settlement Commission set aside--Settlement Commission directed to decide matter afresh--Income-tax Act, 1961-- Dr. Avtar Singh v. ITSC (P&H) . . . 588

----Settlement Commission--Whether enquiry or investigation under section 245D(3) should be ordered--Within exclusive of Settlement Commission--Proceedings pending before Settlement Commission--Writ petition not maintainable--Income-tax Act, 1961, s. 245D-- CIT v. ITSC (Bom) . . . 539

Unexplained investment --Gold biscuits recovered from locker of assessee--Concurrent finding that gold biscuits recovered from locker not owned by brother of assessee at time of recording his statement--Finding of fact--Addition in hands of assessee sustainable--Income-tax Act, 1961, s. 69-- Dharmendra Kumar Varshney v. CIT (All) . . . 563

Valuation of stock --Agreement for sale of drug manufacturing unit--Assessee retaining closing stock--Assessee discontinuing manufacturing articles of unit--Finding that drugs in stock not saleable--Valuation of stock at “nil†--Justified--Income-tax Act, 1961-- CIT v. Wintac Ltd. (Karn) . . . 614

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961 :

S. 2(22)(e) --Dividend--Deemed dividend--Loan to shareholder--Deemed dividend not to be assessed in hands of person not a shareholder of company-- Asst. CIT v. Britto Amusement Pvt. Ltd. (Bom) . . . 544

S. 11 --Charitable purpose--Exemption--Accumulation of income--Information to be furnished to Assessing Officer in prescribed form within prescribed time--Matter of form and not of substance--Information furnished in form of letter with full details as required in Form 10 furnished for setting part and carrying forward unspent amount for spending in next year--Assessee entitled to exemption-- CIT v. Moti Ram Gopi Chand Charitable Trust (All) . . . 598

S. 22 --Business income or income from other sources--Interest income--To be treated as business income--Not income from other sources-- CIT v. Radico Khaitan Ltd. (All) . . . 462

S. 28 --Capital gains--Capital asset--Law applicable--Effect of section 28(va)--Technical know-how acquired on or after 1-4-1998 is a capital asset--Amount received on transfer of such asset assessable as capital gains-- CIT v. Wintac Ltd. (Karn) . . . 614

S. 37(4) --Business expenditure--Disallowance--Guest house--Depreciation on guest house--Not allowable-- CIT v. Radico Khaitan Ltd. (All) . . . 462

S. 45 --Capital gains--Capital asset--Law applicable--Effect of section 28(va)--Technical know-how acquired on or after 1-4-1998 is a capital asset--Amount received on transfer of such asset assessable as capital gains-- CIT v. Wintac Ltd. (Karn) . . . 614

S. 54F --Capital gains--Exemption--Sale of long-term capital asset and construction of residential house within three years--Meaning of “construction†--Purchase and demolition of old house and construction of new house within three years--Assessee entitled to exemption-- CIT v. Ashok Kumar Ralhan (Delhi) . . . 575

S. 56 --Business income or income from other sources--Interest income--To be treated as business income--Not income from other sources-- CIT v. Radico Khaitan Ltd. (All) . . . 462

S. 69 --Unexplained investment--Gold biscuits recovered from locker of assessee--Concurrent finding that gold biscuits recovered from locker not owned by brother of assessee at time of recording his statement--Finding of fact--Addition in hands of assessee sustainable-- Dharmendra Kumar Varshney v. CIT (All) . . . 563

S. 80HH --Industrial undertaking--Special deduction under sections 80HH and 80-I--Computation of profits--Determination of value of raw material--Raw material not available at place of production--Determination of value of raw material to be made taking into account cost at nearest available place, cost of transportation and local taxes-- CIT v. Wipro Ltd. (No. 1 ) (Karn) . . . 606

----Industrial undertaking--Special deduction--Deduction under section 80-I allowable on gross total income without reducing deduction under section 80HH-- CIT v. Radico Khaitan Ltd. (All) . . . 462

S. 80HHC --Export--Special deduction--Computation--Conversion of raw materials into yarn on job work basis--Net conversion charges--Ninety per cent. of sum to be reduced in total turnover to arrive at business profits-- CIT v. Kadri Mills Ltd. (Mad) . . . 595

----Export--Special deduction--Demurrage and dead freight charges liability of assessee and deducted before remittance of export proceeds--Allowable-- CIT v. Bannariamman Exports Ltd. (Mad) . . . 591

S. 80-I --Industrial undertaking--Special deduction under sections 80HH and 80-I--Computation of profits--Determination of value of raw material--Raw material not available at place of production--Determination of value of raw material to be made taking into account cost at nearest available place, cost of transportation and local taxes-- CIT v. Wipro Ltd. (No. 1 ) (Karn) . . . 606

----Industrial undertaking--Special deduction--Deduction under section 80-I allowable on gross total income without reducing deduction under section 80HH-- CIT v. Radico Khaitan Ltd. (All) . . . 462

S. 80-IB --Industrial undertaking--Special deduction--Income surrendered during survey--No presumption that surrendered income eligible for deduction under section 80-IB--Burden on assessee to demonstrate that surrendered income derived from industrial undertaking and eligible for section 80-IB--No evidence to establish direct nexus of income with industrial undertaking--Assessee not entitled to deduction-- Tudor Knitting Works Pvt. Ltd. v. CIT (P&H) . . . 453

S. 92D --Penalty--International transaction--Failure to furnish documentation or information required under section 92D--Scope of section 271G--Penalty is discretionary--Notice under section 92D should specify information or document to be furnished-- CIT v. Leroy Somer and Controls (India) P. Ltd. (Delhi) . . . 532

S. 115JB --Reassessment--Company--Book profits--Computation--Notice after four years--Failure to disclose material facts necessary for assessment--Amount considered in scrutiny assessment--Assessing Officer taking different view regarding computation of income--Notice not valid-- Gujarat Lease Financing Ltd. v. Deputy CIT (Guj) . . . 496

S. 131(1A) --Search and seizure--Warrant of authorisation--Four companies used for booking bogus expenses by a coal company through assessees--Assessees acting as authorised representatives of two of four companies in respect of assessment records--Search and seizure operations at residence and office premises of assessees--Valid--Deputy Director possessing information pertaining to four companies connected with coal company and assessees̢۪ nexus therewith--Reason to suspect that income had been concealed or was likely to be concealed by assessees need not be stated in notice under section 131(1A)--Notice valid-- Sumermal Jain v. Deputy CIT (Cal) . . . 553

S. 132 --Search and seizure--Warrant of authorisation--Four companies used for booking bogus expenses by a coal company through assessees--Assessees acting as authorised representatives of two of four companies in respect of assessment records--Search and seizure operations at residence and office premises of assessees--Valid--Deputy Director possessing information pertaining to four companies connected with coal company and assessees̢۪ nexus therewith--Reason to suspect that income had been concealed or was likely to be concealed by assessees need not be stated in notice under section 131(1A)--Notice valid-- Sumermal Jain v. Deputy CIT (Cal) . . . 553

S. 147 --Reassessment--Company--Book profits--Computation--Notice after four years--Failure to disclose material facts necessary for assessment--Amount considered in scrutiny assessment--Assessing Officer taking different view regarding computation of income--Notice not valid-- Gujarat Lease Financing Ltd. v. Deputy CIT (Guj) . . . 496

----Reassessment--Notice after four years--Conditions precedent--No satisfaction recorded by Assessing Officer that income has escaped assessment by reason of failure on part of assessee to disclose fully and truly all material facts necessary for its assessment--Notice not valid-- General Motors India Pvt. Ltd. v. Deputy CIT (Guj) . . . 527

S. 148 --Reassessment--Company--Book profits--Computation--Notice after four years--Failure to disclose material facts necessary for assessment--Amount considered in scrutiny assessment--Assessing Officer taking different view regarding computation of income--Notice not valid-- Gujarat Lease Financing Ltd. v. Deputy CIT (Guj) . . . 496

----Reassessment--Notice after four years--Conditions precedent--No satisfaction recorded by Assessing Officer that income has escaped assessment by reason of failure on part of assessee to disclose fully and truly all material facts necessary for its assessment--Notice not valid-- General Motors India Pvt. Ltd. v. Deputy CIT (Guj) . . . 527

S. 158BC --Revision--Commissioner--Powers--Search and seizure--Block assessment--Law applicable--Effect of amendment of section 158BG--Commissioner has no power to revise block assessments made pursuant to searches conducted prior to 1-1-1997-- R. Srinivasan v. Asst./Deputy CIT (Mad) . . . 471

S. 158BG --Revision--Commissioner--Powers--Search and seizure--Block assessment--Law applicable--Effect of amendment of section 158BG--Commissioner has no power to revise block assessments made pursuant to searches conducted prior to 1-1-1997-- R. Srinivasan v. Asst./Deputy CIT (Mad) . . . 471

S. 158BH --Revision--Commissioner--Powers--Search and seizure--Block assessment--Law applicable--Effect of amendment of section 158BG--Commissioner has no power to revise block assessments made pursuant to searches conducted prior to 1-1-1997-- R. Srinivasan v. Asst./Deputy CIT (Mad) . . . 471

S. 245D --Settlement of cases--Settlement Commission--Whether enquiry or investigation under section 245D(3) should be ordered--Within exclusive of Settlement Commission--Proceedings pending before Settlement Commission--Writ petition not maintainable-- CIT v. ITSC (Bom) . . . 539

S. 263 --Revision--Commissioner--Powers--Search and seizure--Block assessment--Law applicable--Effect of amendment of section 158BG--Commissioner has no power to revise block assessments made pursuant to searches conducted prior to 1-1-1997-- R. Srinivasan v. Asst./Deputy CIT (Mad) . . . 471

----Revision--Commissioner--Search and seizure--Block assessment--Tribunal finding transactions reflected in books of account and genuine transactions--Order of Tribunal on block assessment attaining finality--Notice of revision solely on basis of block assessment not valid--No material for Commissioner to deny assessee deduction and depreciation considered by Assessing Officer-- Seshasayee Paper and Boards Ltd. v. Deputy CIT (Mad) . . . 483

S. 271(1)(c) --Penalty--Concealment of income--Condition precedent--Evidence of deliberate concealment--Finding in assessment proceedings not conclusive--Addition to income based on estimate--No evidence of deliberate concealment of income--Penalty could not be imposed-- CIT v. Krishi Tyre Retreading and Rubber Industries (Raj) . . . 580

S. 271G --Penalty--International transaction--Failure to furnish documentation or information required under section 92D--Scope of section 271G--Penalty is discretionary--Notice under section 92D should specify information or document to be furnished-- CIT v. Leroy Somer and Controls (India) P. Ltd. (Delhi) . . . 532

Interest-tax Act, 1974 :

Ss. 4, 5, 6 --Interest-tax--Chargeable interest--Sticky loans--Interest not credited in profit and loss account as recovery extremely doubtful--Not chargeable interest-- UCO Bank v. CIT (Cal) . . . 567

Kerala Agricultural Income-tax Act, 1991 :

S. 35(2) --Agricultural income-tax (Kerala)--Recovery of tax--Provision that assessments shall be completed within five year from end of year for which agricultural income was first assessable--Amended assessment order passed beyond five-year period--Recovery proceedings not valid-- Savy L. Purayidam v. Agrl. IT and CTO (Ker) . . . 551

S. 57 --Agricultural income-tax (Kerala)--Recovery of tax--Provision that assessments shall be completed within five year from end of year for which agricultural income was first assessable--Amended assessment order passed beyond five-year period--Recovery proceedings not valid-- Savy L. Purayidam v. Agrl. IT and CTO (Ker) . . . 551

 

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