INCOME TAX REPORTS (ITR)--PRINT AND ONLINE EDITION
ITR Volume 361 : Part 4 (Issue dated : 10-3-2014)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Appeal to High Court --Powers of High Court--Power to set aside finding of Tribunal which is perverse--Income-tax Act, 1961, s. 260A-- CIT v. Smt. Sanghamitra Bharali (Gauhati) . . . 481
Business expenditure --Expenditure on cars--Disallowance of one-fifth for personal use--Vehicle used for earning money by way of hiring--Disallowing one-fifth depreciation on account of personal use of directors not justified--Income-tax Act, 1961, s. 38(2)-- Sri Saytasai Properties and Investment P. Ltd. v. CIT (Cal) . . . 641
Capital or revenue receipt --Subsidy--Sum received by assessee by way of grant-in-aid out of sugar development fund to meet expenses of maintaining buffer stock--Revenue receipt liable for taxation--Income-tax Act, 1961-- K. M. Sugar Mills Ltd. v. CIT (All) . . . 637
Cash credit --Burden of proof--Assessee must prove identity of creditor, genuineness of transaction and creditworthiness of creditor--Assessee need not prove source of funds of creditor--Income-tax Act, 1961, s. 68-- CIT v. Smt. Sanghamitra Bharali (Gauhati) . . . 481
Company --Book profits--Computation of profits--Effect of proviso to clause (i) of Explanation to section 115JA--Amount withdrawn from provision made or reserve created after 1-4-1988--Adjustment only if book profit had been increased by such amount at time reserve or provision was made--Income-tax Act, 1961, s. 115JA-- CIT v. Goetze (India) Ltd. (Delhi) . . . 505
Depreciation --Higher rate of depreciation--Vibro bed dryer entitled to hundred per cent. depreciation--Income-tax Rules, 1962, Appendix 1 III.(3)(iii)A-- CIT v. McLeod Russel (India) Ltd. (Cal) . . . 663
Export business --Special deduction--Commission paid outside India deducted from price of goods and balance amount received in country in foreign exchange--Excludible from export turnover--Income-tax Act, 1961, s. 80HHC-- CIT v. McLeod Russel (India) Ltd. (Cal) . . . 663
Income --Accrual--Excise credit--Tribunal finding credit of such pro forma rebate taken into account illusory and did not represent any real income--Not assessable as part of income--Income-tax Act, 1961-- CIT v. Kusum Products Ltd. (Cal) . . . 632
----Burden of proof--Burden on Revenue to prove that receipt was income--Burden on assessee to prove receipt was not taxable--Income-tax Act, 1961-- CIT v. Smt. Sanghamitra Bharali (Gauhati) . . . 481
Income from other sources --Money borrowed for investing in shares--Interest not disallowable on ground investment not made for purpose of earning dividend--Income-tax Act, 1961, s. 57(iii)-- Sri Saytasai Properties and Investment P. Ltd. v. CIT (Cal) . . . 641
Income from undisclosed sources --Amount claimed to be capital gains--Finding that transaction of purchase and sale of shares was not genuine--Amount assessable--Income-tax Act, 1961-- CIT v. Smt. Sanghamitra Bharali (Gauhati) . . . 481
International transactions --Arm’s length price--Determination--Reference to Transfer Pricing Officer--Condition precedent--Satisfaction of Assessing Officer that income will arise from transaction--Objection that no income would arise--Objection must be considered by Assessing Officer--Personal hearing should be given--Power of Dispute Resolution Panel--Dispute Resolution Panel can direct Assessing Officer to make enquiry--Income-tax Act, 1961, Chap. X-- Vodafone India Services P. Ltd. v. Union of India (Bom) . . . 531
Non-resident --Royalty--Definition--Change of law--Amendment of definition to include payment for use of equipment--Assessee engaged in providing international connectivity services (bandwidth services or telecom services) for transmission of data and voice--Payment received by assessee for providing international private leased circuit--Amounts to use of equipment or use of process--Taxable as royalty--Income-tax Act, 1961, s. 9(1)(vi), Expln. 2 --Double Taxation Avoidance Agreement between India and Singapore, art. 12(3)(b), (4)-- Verizon Communications Singapore Pte Ltd. v. ITO (International Taxation) (Mad) . . . 575
Precedent --Effect of decision of Supreme Court in H. E. G. Ltd.’s case-- India Trade Promotion Organisation v. CIT (Delhi) . . . 646
Refund --Interest on refund--Effect of section 244A--Part payment of refund--Interest on balance to be calculated on such balance together with interest on such balance--Income-tax Act, 1961, s. 244A-- India Trade Promotion Organisation v. CIT (Delhi) . . . 646
Revision --Powers of Commissioner--Scope of powers--Assessing Officer taking one of two possible views--Commissioner has power to show that view was erroneous and prejudicial to Revenue--Error in computing income under section 115JA and failure to apply section 14A--Revision of order--Justified--Income-tax Act, 1961, ss. 14A, 115JA, 263-- CIT v. Goetze (India) Ltd. (Delhi) . . . 505
Valuation of closing stock --Amount of cess paid by assessee--Excludible in valuation of closing stock--Income-tax Act, 1961-- CIT v. McLeod Russel (India) Ltd. (Cal) . . . 663
Wealth-tax --Reference--Order of High Court directing reference--Effect--Observations of High Court at that stage--Not conclusive--Finding of fact not challenged--Finding conclusive--Wealth-tax Act, 1957, s. 27-- CWT v. Trustees of H. E. H. the Nizam’s Jewellery Trust (AP) . . . 668
----Valuation of asset--Question of fact--Valuation accepted by Revenue in earlier years--No change in circumstances--Tribunal correct in accepting valuation in relevant assessment year--Wealth-tax Act, 1957-- CWT v. Trustees of H. E. H. the Nizam’s Jewellery Trust (AP) . . . 668
Writ --Existence of alternative remedy--Not an absolute bar for issue of writ--Constitution of India, art. 226-- Vodafone India Services P. Ltd. v. Union of India (Bom) . . . 531
Non-resident --Advance ruling--Definition--Application--Maintainability--Questions on which ruling sought must be in relation to transaction “undertaken or proposed to be undertaken†by applicant--Non-resident applicant intending to invest in 100 per cent. subsidiary company in India--Indian subsidiary intending to set up consortium by way of partnership with another Indian company--Firm proposing to acquire undertaking of Indian company operating and maintaining road bridges in Mumbai--Rulings sought on questions relating to allowability of deduction under section 80-IA to undertaking--100 per cent. subsidiary company must exist in reality and firm set up in order to make transaction or proposed transaction of applicant with Indian subsidiary--Questions posed not under purview of Authority--Income-tax Act, 1961, ss. 80-IA(4), 245N, 245R-- Trade Circle Enterprises LLC, In re . . . 673
----Production and distribution of television programmes--Shooting of film outside India--Line production services rendered by non-resident--Services specifically characterised as work for purpose of section 194C--Payments therefor not taxable without permanent establishment in India--Payments not to suffer withholding of tax--Income-tax Act, 1961, ss. 9(1), 194C, Expln. -- Endemol India P. Ltd., In re (No. 4 ) . . . 658
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Art. 226 --Writ--Existence of alternative remedy--Not an absolute bar for issue of writ-- Vodafone India Services P. Ltd. v. Union of India (Bom) . . . 531
Double Taxation Avoidance Agreement between India and Singapore :
Art. 12(3)(b), (4) --Non-resident--Royalty--Definition--Change of law--Amendment of definition to include payment for use of equipment--Assessee engaged in providing international connectivity services (bandwidth services or telecom services) for transmission of data and voice--Payment received by assessee for providing international private leased circuit--Amounts to use of equipment or use of process--Taxable as royalty-- Verizon Communications Singapore Pte Ltd. v. ITO (International Taxation) (Mad) . . . 575
S. 9(1) --Non-resident--Production and distribution of television programmes--Shooting of film outside India--Line production services rendered by non-resident--Services specifically characterised as work for purpose of section 194C--Payments therefor not taxable without permanent establishment in India--Payments not to suffer withholding of tax-- Endemol India P. Ltd., In re (No. 4 ) (AAR). . . 658
S. 9(1)(vi), Expln. 2 --Non-resident--Royalty--Definition--Change of law--Amendment of definition to include payment for use of equipment--Assessee engaged in providing international connectivity services (bandwidth services or telecom services) for transmission of data and voice--Payment received by assessee for providing international private leased circuit--Amounts to use of equipment or use of process--Taxable as royalty-- Verizon Communications Singapore Pte Ltd. v. ITO (International Taxation) (Mad) . . . 575
S. 14A --Revision--Powers of Commissioner--Scope of powers--Assessing Officer taking one of two possible views--Commissioner has power to show that view was erroneous and prejudicial to Revenue--Error in computing income under section 115JA and failure to apply section 14A--Revision of order--Justified-- CIT v. Goetze (India) Ltd. (Delhi) . . . 505
S. 38(2) --Business expenditure--Expenditure on cars--Disallowance of one-fifth for personal use--Vehicle used for earning money by way of hiring--Disallowing one-fifth depreciation on account of personal use of directors not justified-- Sri Saytasai Properties and Investment P. Ltd. v. CIT (Cal) . . . 641
S. 57(iii) --Income from other sources--Money borrowed for investing in shares--Interest not disallowable on ground investment not made for purpose of earning dividend-- Sri Saytasai Properties and Investment P. Ltd. v. CIT (Cal) . . . 641
S. 68 --Cash credit--Burden of proof--Assessee must prove identity of creditor, genuineness of transaction and creditworthiness of creditor--Assessee need not prove source of funds of creditor-- CIT v. Smt. Sanghamitra Bharali (Gauhati) . . . 481
S. 80HHC --Export business--Special deduction--Commission paid outside India deducted from price of goods and balance amount received in country in foreign exchange--Excludible from export turnover-- CIT v. McLeod Russel (India) Ltd. (Cal) . . . 663
S. 80-IA(4) --Non-resident--Advance ruling--Definition--Application--Maintainability--Questions on which ruling sought must be in relation to transaction “undertaken or proposed to be undertaken†by applicant--Non-resident applicant intending to invest in 100 per cent. subsidiary company in India--Indian subsidiary intending to set up consortium by way of partnership with another Indian company--Firm proposing to acquire undertaking of Indian company operating and maintaining road bridges in Mumbai--Rulings sought on questions relating to allowability of deduction under section 80-IA to undertaking--100 per cent. subsidiary company must exist in reality and firm set up in order to make transaction or proposed transaction of applicant with Indian subsidiary--Questions posed not under purview of Authority-- Trade Circle Enterprises LLC, In re (AAR). . . 673
Chap. X --International transactions--Arm’s length price--Determination--Reference to Transfer Pricing Officer--Condition precedent--Satisfaction of Assessing Officer that income will arise from transaction--Objection that no income would arise--Objection must be considered by Assessing Officer--Personal hearing should be given--Power of Dispute Resolution Panel--Dispute Resolution Panel can direct Assessing Officer to make enquiry-- Vodafone India Services P. Ltd. v. Union of India (Bom) . . . 531
S. 115JA --Company--Book profits--Computation of profits--Effect of proviso to clause (i) of Explanation to section 115JA--Amount withdrawn from provision made or reserve created after 1-4-1988--Adjustment only if book profit had been increased by such amount at time reserve or provision was made-- CIT v. Goetze (India) Ltd. (Delhi) . . . 505
----Revision--Powers of Commissioner--Scope of powers--Assessing Officer taking one of two possible views--Commissioner has power to show that view was erroneous and prejudicial to Revenue--Error in computing income under section 115JA and failure to apply section 14A--Revision of order--Justified-- CIT v. Goetze (India) Ltd. (Delhi) . . . 505
S. 194C, Expln. --Non-resident--Production and distribution of television programmes--Shooting of film outside India--Line production services rendered by non-resident--Services specifically characterised as work for purpose of section 194C--Payments therefor not taxable without permanent establishment in India--Payments not to suffer withholding of tax-- Endemol India P. Ltd., In re (No. 4 ) (AAR). . . 658
S. 244A --Refund--Interest on refund--Effect of section 244A--Part payment of refund--Interest on balance to be calculated on such balance together with interest on such balance-- India Trade Promotion Organisation v. CIT (Delhi) . . . 646
S. 245N --Non-resident--Advance ruling--Definition--Application--Maintainability--Questions on which ruling sought must be in relation to transaction “undertaken or proposed to be undertaken†by applicant--Non-resident applicant intending to invest in 100 per cent. subsidiary company in India--Indian subsidiary intending to set up consortium by way of partnership with another Indian company--Firm proposing to acquire undertaking of Indian company operating and maintaining road bridges in Mumbai--Rulings sought on questions relating to allowability of deduction under section 80-IA to undertaking--100 per cent. subsidiary company must exist in reality and firm set up in order to make transaction or proposed transaction of applicant with Indian subsidiary--Questions posed not under purview of Authority-- Trade Circle Enterprises LLC, In re (AAR). . . 673
S. 245R --Non-resident--Advance ruling--Definition--Application--Maintainability--Questions on which ruling sought must be in relation to transaction “undertaken or proposed to be undertaken†by applicant--Non-resident applicant intending to invest in 100 per cent. subsidiary company in India--Indian subsidiary intending to set up consortium by way of partnership with another Indian company--Firm proposing to acquire undertaking of Indian company operating and maintaining road bridges in Mumbai--Rulings sought on questions relating to allowability of deduction under section 80-IA to undertaking--100 per cent. subsidiary company must exist in reality and firm set up in order to make transaction or proposed transaction of applicant with Indian subsidiary--Questions posed not under purview of Authority-- Trade Circle Enterprises LLC, In re (AAR). . . 673
S. 260A --Appeal to High Court--Powers of High Court--Power to set aside finding of Tribunal which is perverse-- CIT v. Smt. Sanghamitra Bharali (Gauhati) . . . 481
S. 263 --Revision--Powers of Commissioner--Scope of powers--Assessing Officer taking one of two possible views--Commissioner has power to show that view was erroneous and prejudicial to Revenue--Error in computing income under section 115JA and failure to apply section 14A--Revision of order--Justified-- CIT v. Goetze (India) Ltd. (Delhi) . . . 505
S. 27 --Wealth-tax--Reference--Order of High Court directing reference--Effect--Observations of High Court at that stage--Not conclusive--Finding of fact not challenged--Finding conclusive-- CWT v. Trustees of H. E. H. the Nizam’s Jewellery Trust (AP) . . . 668
Appendix 1 III.(3)(iii)A --Depreciation--Higher rate of depreciation--Vibro bed dryer entitled to hundred per cent. depreciation-- CIT v. McLeod Russel (India) Ltd. (Cal) . . . 663
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