INCOME TAX REPORTS (ITR)--PRINT AND ONLINE EDITION
SUBJECT INDEX TO CASES REPORTED
Capital gains --Business income--Assessee transferring its shares in private limited company to its holding company--Shares not tradeable in market like any other normal trading asset--Profits on sale of shares assessable as capital gains--Income-tax Act, 1961, s. 45-- CIT v. Renato Finance and Investment Ltd. (Bom) . . . 267
Search and seizure --Warrant of authorisation--Validity--Reliable evidence regarding concealment of income by doctors--Search proceedings valid--Notice under section 131(1A) would not invalidate proceedings--Income-tax Act, 1961, ss. 131(1A), 132-- Dr. Roop v. CIT (All) . . . 240
ONLINE EDITION
ITR Volume 362 : Part 2 (Issue dated : 31-3-2014)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Appeal to Appellate Tribunal --Powers of Tribunal--Power to grant stay--Limited to total period of 365 days from date of first order of stay--If delay due to lapse on part of Department, Tribunal at liberty to conclude hearing and decide appeal--Department can make a statement that it would not take coercive steps to recover demand and Tribunal can adjourn matter--Assessee can file writ petition for stay and High Court can grant stay and issue directions to Tribunal as required--Income-tax Act, 1961, s. 254(2A)--Constitution of India, art. 226-- CIT v. Maruti Suzuki (India) Ltd. (Delhi) . . . 215
----Powers of Tribunal--Power to grant stay--Period of stay--Law applicable--Effect of introduction of proviso to section 254(2) with effect from 1-10-2008--Stay for a maximum of 365 days from date of initial order--Income-tax Act, 1961, s. 254-- CIT v. Ecom Gill Coffee Trading P. Ltd. (Karn) . . . 204
Appeal to High Court --New ground not raised before Tribunal cannot be raised before High Court--Income-tax Act, 1961, s. 260A-- CIT v. Jayshree Gems and Jewellery (Delhi) . . . 272
Assessment --Unaccounted investment--Assessee constructing a building by borrowing funds--Assessee floating company to carry on business of hotel--Company having no income during period of construction of hotel--Money for carrying out construction arranged by assessee in terms of agreement--Excess investment assessable in hands of assessee--Income-tax Act, 1961-- CIT v. D. P. Kanodia (All) . . . 163
Business expenditure --Disallowance--Deduction of tax at source--Failure to deduct tax or pay it to Revenue--Law applicable--Amendment of section 40(a)(ia) by Finance Act, 2010--Amendment has retrospective effect--Income-tax Act, 1961, s. 40(a)(ia)-- CIT v. Naresh Kumar (Delhi) . . . 256
----Disallowance--Payments liable to deduction of tax at source--Payments made in last month of previous year--Requirement that tax deducted at source should be deposited before “said due date†--Due date referred to is due date for filing return of income--Assessee following cash system of accounting--Memorandum maintained for record purpose showing sums due for payment in February of previous year--Payment actually made and tax deducted therefrom in March and deposited in April--Deduction allowable--Income-tax Act, 1961, s. 40(a)(ia) (as amended by Finance Act, 2008 with retrospective effect from April 1, 2005 and Finance Act, 2010)-- CIT v. Rajinder Kumar (Delhi) . . . 241
----Expenditure on purchase of machinery and equipment--Finding that there was proof of such purchase--Amounts deductible--Expenses on design and fabrication--Finding that expenditure was reasonable--Expenditure deductible--Income-tax Act, 1961-- CIT v. Jayshree Gems and Jewellery (Delhi) . . . 272
Charitable purposes --Charitable trust--Registration--No disqualification for trust having both charitable and religious objects to make an application for registration--Trust not commencing its activities on date of filing application--Not a ground to deny registration--Income-tax Act, 1961, ss. 11(1)(a), 12AA-- Director of Income-tax Exemptions v. Seervi Samaj Tambaram Trust (Mad) . . . 199
----Charitable trust--Registration--Powers of Commissioner--Commissioner cannot refuse to register trust on the ground that trust has not commenced its activities--Income-tax Act, 1961, s. 12AA-- CIT v. Kutchi Dasa Oswal Moto Pariwar Ambama Trust (Guj) . . . 194
Collection of tax at source --Cotton waste--Not scrap within meaning of Explanation (b) to section 206C--Not liable to collection of tax at source--Income-tax Act, 1961, s. 206C, Expln. (b) -- CIT v. Adisankara Spinning Mills (P.) Ltd. (Mad) . . . 233
----Failure to collect tax at source--Form 27 obtained from buyer filed before assessing authority in course of appellate proceedings--Technical breach liable to be condoned--Income-tax Act, 1961, s. 206C-- CIT v. Adisankara Spinning Mills (P.) Ltd. (Mad) . . . 233
Exemption --Export by new industrial undertaking in special economic zone--Condition precedent--Manufacture of article--Process of making jewellery amounts to manufacture--Assessee entitled to exemption under section 10A--Income-tax Act, 1961, s. 10A-- CIT v. Jayshree Gems and Jewellery (Delhi) . . . 272
----University--Condition precedent for exemption under section 10(23C)--University should exist solely for educational purposes and not for profit--Reasonable surplus over income would not disentitle university to exemption--What is reasonable surplus would depend on facts of case--University established by State Government--Land and grants given by State Government--University accumulating an income of about rupees five hundred crores in ten years--University not entitled to exemption under section 10(23C)--University not “State†within meaning of articles 12, 131 and 289--University not entitled to exemption as a “State†--Income-tax Act, 1961, s. 10(23C)--Constitution of India, arts, 12, 131, 289-- Visvesvaraya Technological University v. Asst. CIT (Karn) . . . 279
Housing project --Special deduction--Law applicable--Amendment with effect from 1-4-2005 requiring certificate of completion of project within four years of approval--Not applicable to project approved prior to that date--Assessee entitled to deduction--Income-tax Act, 1961, s. 80-IB(10)(a)(ii)-- CIT v. CHD Developers Ltd. (Delhi) . . . 177
----Special deduction--No disallowance on ground assessee not a developer--Construction completed two years before final date and building use permission applied for--Rejection of building permission on technical grounds--Assessee entitled to deduction--Income-tax Act, 1961, s. 80-IB(10)-- CIT v. Tarnetar Corporation (Guj) . . . 174
Income from other sources --Object of assessee promoting sports--Grants from constituents--Assessee acting as a custodian to constituents for purpose of promoting sports--Expenditure incurred for purpose of promoting sports events and activities--Allowable--Income-tax Act, 1961, ss. 11, 57(iii)-- Deputy Director of Income-tax (Exemptions) v. Petroleum Sports Promotion Board (Delhi) . . . 235
Interpretation of taxing statutes --Ambiguity--Interpretation taking into account object of Legislature-- CIT v. Ecom Gill Coffee Trading P. Ltd. (Karn) . . . 204
----Business expenditure--Disallowance--Payments liable to deduction of tax at source--Provisions not intended to penalise assessee when payment has been made within time specified--To be interpreted in fair, just and equitable manner--Income-tax Act, 1961, s. 40(a)(ia)-- CIT v. Rajinder Kumar (Delhi) . . . 241
----Machinery provisions--Provision whether has retrospective effect-- CIT v. Naresh Kumar (Delhi) . . . 256
----Strict interpretation-- Visvesvaraya Technological University v. Asst. CIT (Karn) . . . 279
Precedent --Decision of Supreme Court interpreting Excise Act not binding in interpreting provisions of Income-tax Act-- CIT v. Ecom Gill Coffee Trading P. Ltd. (Karn) . . . 204
Reassessment --Notice--Not permissible on change of opinion--Valuation of property referred to Valuation Officer during assessment proceedings--Assessment made before receipt of valuation report--Reassessment on basis of valuation report--No application of mind--Reasons recorded for notice contrary to facts on record--Notices based on change of opinion--Not valid--Income-tax Act, 1961, ss. 147, 148-- Mahashay Chunnilal v. Deputy CIT (Delhi) . . . 314
----Notice--Opinion of Valuation Officer not information for reopening assessment--Assessing Officer must apply mind and form belief that income has escaped assessment--Income-tax Act, 1961, ss. 147, 148-- Mahashay Chunnilal v. Deputy CIT (Delhi) . . . 314
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Art. 12 --Exemption--University--Condition precedent for exemption under section 10(23C)--University should exist solely for educational purposes and not for profit--Reasonable surplus over income would not disentitle university to exemption--What is reasonable surplus would depend on facts of case--University established by State Government--Land and grants given by State Government--University accumulating an income of about rupees five hundred crores in ten years--University not entitled to exemption under section 10(23C)--University not “State†within meaning of articles 12, 131 and 289--University not entitled to exemption as a “State†-- Visvesvaraya Technological University v. Asst. CIT (Karn) . . . 279
Art. 131 --Exemption--University--Condition precedent for exemption under section 10(23C)--University should exist solely for educational purposes and not for profit--Reasonable surplus over income would not disentitle university to exemption--What is reasonable surplus would depend on facts of case--University established by State Government--Land and grants given by State Government--University accumulating an income of about rupees five hundred crores in ten years--University not entitled to exemption under section 10(23C)--University not “State†within meaning of articles 12, 131 and 289--University not entitled to exemption as a “State†-- Visvesvaraya Technological University v. Asst. CIT (Karn) . . . 279
Art. 226 --Appeal to Appellate Tribunal--Powers of Tribunal--Power to grant stay--Limited to total period of 365 days from date of first order of stay--If delay due to lapse on part of Department, Tribunal at liberty to conclude hearing and decide appeal--Department can make a statement that it would not take coercive steps to recover demand and Tribunal can adjourn matter--Assessee can file writ petition for stay and High Court can grant stay and issue directions to Tribunal as required-- CIT v. Maruti Suzuki (India) Ltd. (Delhi) . . . 215
Art. 289 --Exemption--University--Condition precedent for exemption under section 10(23C)--University should exist solely for educational purposes and not for profit--Reasonable surplus over income would not disentitle university to exemption--What is reasonable surplus would depend on facts of case--University established by State Government--Land and grants given by State Government--University accumulating an income of about rupees five hundred crores in ten years--University not entitled to exemption under section 10(23C)--University not “State†within meaning of articles 12, 131 and 289--University not entitled to exemption as a “State†-- Visvesvaraya Technological University v. Asst. CIT (Karn) . . . 279
S. 10(23C) --Exemption--University--Condition precedent for exemption under section 10(23C)--University should exist solely for educational purposes and not for profit--Reasonable surplus over income would not disentitle university to exemption--What is reasonable surplus would depend on facts of case--University established by State Government--Land and grants given by State Government--University accumulating an income of about rupees five hundred crores in ten years--University not entitled to exemption under section 10(23C)--University not “State†within meaning of articles 12, 131 and 289--University not entitled to exemption as a “State†-- Visvesvaraya Technological University v. Asst. CIT (Karn) . . . 279
S. 10A --Exemption--Export by new industrial undertaking in special economic zone--Condition precedent--Manufacture of article --Process of making jewellery amounts to manufacture--Assessee entitled to exemption under section 10A-- CIT v. Jayshree Gems and Jewellery (Delhi) . . . 272
S. 11 --Income from other sources--Object of assessee promoting sports--Grants from constituents--Assessee acting as a custodian to constituents for purpose of promoting sports--Expenditure incurred for purpose of promoting sports events and activities--Allowable-- Deputy Director of Income-tax (Exemptions) v. Petroleum Sports Promotion Board (Delhi) . . . 235
S. 11(1)(a) --Charitable purposes--Charitable trust--Registration--No disqualification for trust having both charitable and religious objects to make an application for registration--Trust not commencing its activities on date of filing application--Not a ground to deny registration-- Director of Income-tax Exemptions v. Seervi Samaj Tambaram Trust (Mad) . . . 199
S. 12AA --Charitable purposes--Charitable trust--Registration--No disqualification for trust having both charitable and religious objects to make an application for registration--Trust not commencing its activities on date of filing application--Not a ground to deny registration-- Director of Income-tax Exemptions v. Seervi Samaj Tambaram Trust (Mad) . . . 199
----Charitable purposes--Charitable trust--Registration--Powers of Commissioner--Commissioner cannot refuse to register trust on the ground that trust has not commenced its activities-- CIT v. Kutchi Dasa Oswal Moto Pariwar Ambama Trust (Guj) . . . 194
S. 40(a)(ia) --Business expenditure--Disallowance--Deduction of tax at source--Failure to deduct tax or pay it to Revenue--Law applicable--Amendment of section 40(a)(ia) by Finance Act, 2010--Amendment has retrospective effect-- CIT v. Naresh Kumar (Delhi) . . . 256
----Interpretation of taxing statutes--Business expenditure--Disallowance--Payments liable to deduction of tax at source--Provisions not intended to penalise assessee when payment has been made within time specified--To be interpreted in fair, just and equitable manner-- CIT v. Rajinder Kumar (Delhi) . . . 241
S. 40(a)(ia) (as amended by Finance Act, 2008 with retrospective effect from April 1, 2005 and Finance Act, 2010) --Business expenditure--Disallowance--Payments liable to deduction of tax at source--Payments made in last month of previous year--Requirement that tax deducted at source should be deposited before “said due date†--Due date referred to is due date for filing return of income--Assessee following cash system of accounting--Memorandum maintained for record purpose showing sums due for payment in February of previous year--Payment actually made and tax deducted therefrom in March and deposited in April--Deduction allowable-- CIT v. Rajinder Kumar (Delhi) . . . 241
S. 57(iii) --Income from other sources--Object of assessee promoting sports--Grants from constituents--Assessee acting as a custodian to constituents for purpose of promoting sports--Expenditure incurred for purpose of promoting sports events and activities--Allowable-- Deputy Director of Income-tax (Exemptions) v. Petroleum Sports Promotion Board (Delhi) . . . 235
S. 80-IB(10) --Housing project--Special deduction--No disallowance on ground assessee not a developer--Construction completed two years before final date and building use permission applied for--Rejection of building permission on technical grounds--Assessee entitled to deduction-- CIT v. Tarnetar Corporation (Guj) . . . 174
S. 80-IB(10)(a)(ii) --Housing project--Special deduction--Law applicable--Amendment with effect from 1-4-2005 requiring certificate of completion of project within four years of approval--Not applicable to project approved prior to that date--Assessee entitled to deduction-- CIT v. CHD Developers Ltd. (Delhi) . . . 177
S. 147 --Reassessment--Notice--Not permissible on change of opinion--Valuation of property referred to Valuation Officer during assessment proceedings--Assessment made before receipt of valuation report--Reassessment on basis of valuation report--No application of mind--Reasons recorded for notice contrary to facts on record--Notices based on change of opinion--Not valid-- Mahashay Chunnilal v. Deputy CIT (Delhi) . . . 314
----Reassessment--Notice--Opinion of Valuation Officer not information for reopening assessment--Assessing Officer must apply mind and form belief that income has escaped assessment-- Mahashay Chunnilal v. Deputy CIT (Delhi) . . . 314
S. 148 --Reassessment--Notice--Not permissible on change of opinion--Valuation of property referred to Valuation Officer during assessment proceedings--Assessment made before receipt of valuation report--Reassessment on basis of valuation report--No application of mind--Reasons recorded for notice contrary to facts on record--Notices based on change of opinion--Not valid-- Mahashay Chunnilal v. Deputy CIT (Delhi) . . . 314
----Reassessment--Notice--Opinion of Valuation Officer not information for reopening assessment--Assessing Officer must apply mind and form belief that income has escaped assessment-- Mahashay Chunnilal v. Deputy CIT (Delhi) . . . 314
S. 206C --Collection of tax at source--Failure to collect tax at source--Form 27 obtained from buyer filed before assessing authority in course of appellate proceedings--Technical breach liable to be condoned-- CIT v. Adisankara Spinning Mills (P.) Ltd. (Mad) . . . 233
S. 206C, Expln. (b) --Collection of tax at source--Cotton waste--Not scrap within meaning of Explanation (b) to section 206C--Not liable to collection of tax at source-- CIT v. Adisankara Spinning Mills (P.) Ltd. (Mad) . . . 233
S. 254 --Appeal to Appellate Tribunal--Powers of Tribunal--Power to grant stay--Period of stay--Law applicable--Effect of introduction of proviso to section 254(2) with effect from 1-10-2008--Stay for a maximum of 365 days from date of initial order-- CIT v. Ecom Gill Coffee Trading P. Ltd. (Karn) . . . 204
S. 254(2A) --Appeal to Appellate Tribunal--Powers of Tribunal--Power to grant stay--Limited to total period of 365 days from date of first order of stay--If delay due to lapse on part of Department, Tribunal at liberty to conclude hearing and decide appeal--Department can make a statement that it would not take coercive steps to recover demand and Tribunal can adjourn matter--Assessee can file writ petition for stay and High Court can grant stay and issue directions to Tribunal as required-- CIT v. Maruti Suzuki (India) Ltd. (Delhi) . . . 215
S. 260A --Appeal to High Court--New ground not raised before Tribunal cannot be raised before High Court-- CIT v. Jayshree Gems and Jewellery (Delhi) . . . 272
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