ITR (TRIB) Volume 32 : Part 1 (Issue dated : 2-6-2014)

 

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

 

ONLINE EDITION

SUBJECT INDEX TO CASES REPORTED

Appeal --Powers of appellate authorities--Power to consider claim not made in return or revised return--Claim disallowed in assessment year 2002-03 only on ground that project had become operational in next year--Claim to be considered in assessment year 2003-04--Matter remanded-- Merck Ltd. v. Deputy CIT (Mumbai) . . . 629

----Powers of appellate authorities--Power to consider claim not made in return or revised return--Sale taking place in assessment year 2003-04 and claim disallowed for assessment year 2002-03--Claim made in assessment year 2003-04 by way of additional ground before Commissioner (Appeals) disallowed--Legal claim and facts on record--Appellate Tribunal--Claim to be allowed in this year-- Merck Ltd. v. Deputy CIT (Mumbai) . . . 629

Bad debt --Condition precedent for allowance--Debt actually written off in books of account--Whether assessee produced evidence to show that debts taken into account in computing income of earlier year to be verified--Matter remanded--Income-tax Act, 1961, s. 36(1)(vii)-- Merck Ltd. v. Deputy CIT (Mumbai) . . . 629

Business expenditure --Disallowance--Payments liable to deduction of tax at source--Tax deposited after close of accounting year--Deduction to be allowed in following year--Income-tax Act, 1961, s. 40(a)(i)-- Merck Ltd. v. Deputy CIT (Mumbai) . . . 629

----Discount and commission--No quantitative details or supporting evidence filed to prove genuineness of expenses--Ad hoc disallowance not proper--Assessing Officer to compute disallowance on objective basis on basis of material on record--On facts, disallowance reasonable-- Merck Ltd. v. Deputy CIT (Mumbai) . . . 629

----Expenditure incurred on account of advances to suppliers of samples written off--Assessee not able to demonstrate and support his arguments with documentary proof--Matter remanded--Income-tax Act, 1961, s. 37(1)-- IKEA Trading (India) P. Ltd. v. Deputy CIT (Delhi) . . . 683

----Pharmaceutical company--Free samples and physician’s samples distributed for promoting sale--Burden on assessee to prove that expenditure incurred wholly and exclusively for purpose of business--Failure by assessee to file names and addresses of persons, physicians or doctors to whom free samples given--Volume of transactions not good reason for failure--That no disallowance made in earlier years not ground to seek relief in subsequent year--Claim found not genuine--Matter remanded for examination afresh-- Merck Ltd. v. Deputy CIT (Mumbai) . . . 629

----Sales promotion expenses--Failure by assessee to file full details--Estimated disallowance--Claim for current year lower compared to preceding year, in which claim allowed fully--No material to show that claim excessive--Claim to be fully allowed-- Merck Ltd. v. Deputy CIT (Mumbai) . . . 629

----Travelling, conveyance and vehicle expenses--Estimated disallowance in absence of full details and evidence--Justified--However estimate must be on objective basis--No material to show that claim excessive--Disallowance not justified-- Merck Ltd. v. Deputy CIT (Mumbai) . . . 629

Capital or revenue expenditure --Expenditure incurred on repair and maintenance of rented building--Expenses for maintenance and upkeep of leased premises for use as office premises and for expatriate employees, for pest control, annual maintenance contract for electrical fittings--Of revenue nature--Specific bills and vouchers to be considered--Matter remanded--Income-tax Act, 1961, s. 32-- IKEA Trading (India) P. Ltd. v. Deputy CIT (Delhi) . . . 683

Export --Industrial undertaking--Special deduction--Assessee eligible for deduction under sections 80-IB and 80HHC--Profit allowed as deduction under section 80-IA not to be reduced from profits of business while computing deduction under section 80HHC--Income-tax Act, 1961, ss. 80HHC, 80-IB-- Merck Ltd. v. Deputy CIT (Mumbai) . . . 629

----Special deduction--Deduction of 90 per cent. of receipts by way of brokerage, commission, interest, rent charges or other receipts of similar nature--Write back of loss on revaluation of assets--No actual receipt--Provision not applicable--Amount already assessed as business income and fully eligible for deduction--Income-tax Act, 1961, s. 80HHC-- Merck Ltd. v. Deputy CIT (Mumbai) . . . 629

----Special deduction--Profits of business--Interest on deposits and export incentive and indenting commission--90 per cent. of net receipts to be reduced from profits of business--Interest on delayed payment received from customers--Arises from business operations--Not to be reduced under Explanation (baa) --Insurance claim--Integral part of income arising from business operations--Not to be reduced under Explanation (baa) --Income from instruments service, a maintenance contract in relation to equipment sold by assessee--Integral part of business operations and not to be reduced under Explanation (baa) --Income from scrap sales, sundry sales and cash discount integral part of business operations and not to be reduced under Explanation (baa) --Other sums to be reduced at rate of 90 per cent. after excluding expenses--Income-tax Act, 1961, s. 80HHC, Expln. (baa) -- Merck Ltd. v. Deputy CIT (Mumbai) . . . 629

----Special deduction--Profits--Interest on income-tax refund is income from other sources and to be excluded from profits of business--Interest on fixed deposits--Only net income after deducting expenses to be excluded from profits of business--Income-tax Act, 1961, s. 80HHC-- Merck Ltd. v. Deputy CIT (Mumbai) . . . 629

Industrial undertaking --Special deduction--DEPB entitlement--Not derived from business of undertaking--Disallowance proper--Income-tax Act, 1961, s. 80-IB-- Merck Ltd. v. Deputy CIT (Mumbai) . . . 629

International transactions --Arm’s length price--Transactional net margin method--Import of raw material from associated enterprise at higher rate than that at which other purchased--Quality of product has influence on pricing--Additional evidence filed by assessee to show superior quality of assessee’s product to be admitted and matter remanded for consideration afresh--Commission earned by assessee on sale of products by associated enterprises directly to third parties in India--Transfer pricing adjustment on basis of margin of 16 per cent. in respect of third party trading--Comparison of margin of pigment segment with non-associated enterprises segment which did not deal with pigment not proper--Anti-dumping duty levied in respect of pigments imported by assessee showed that associated enterprises was selling pigment to assessee at a lower price--Sufficient material to show low margin in case of pigment not because of high import price but because of low selling price in domestic market--Transfer pricing adjustment liable to be set aside--Technical know-how fees paid by assessee to parent company in Germany--Technical consultancy agreement listing twelve services in relation to which assessee was to receive assistance from parent company--Services rendered only under three heads in year--Fees in respect of each service not fixed nor each service compulsorily required to be provided to assessee--Assessee entitled to any of services as and when required--Applying comparable uncontrolled price method to service not availed of by assessee during year not justified--Disallowance of expenses not justified--Income-tax Rules, 1962, r. 10B(2)(d)-- Merck Ltd. v. Deputy CIT (Mumbai) . . . 629

Loss --Sale of current investments--No details submitted by assessee--Statement filed before Commissioner (Appeals)--Matter remanded to Assessing Officer for passing a fresh order after necessary verification-- Merck Ltd. v. Deputy CIT (Mumbai) . . . 629

Method of accounting --Valuation of purchase and sale of goods and inventory--To be made in accordance with method of accounting regularly employed by assessee--Adjustment on account of tax, duty etc. to be made not only to closing stock but also in purchases, sales and opening stock--Income-tax Act, 1961, s. 145A-- Merck Ltd. v. Deputy CIT (Mumbai) . . . 629

 

PRINT EDITION

Volume 32 : Part 1 (Issue dated : 2-6-2014)

SUBJECT INDEX TO CASES REPORTED

Appeal to Appellate Tribunal --Power to admit new ground--Sales accepted in accordance with details furnished by assessee before Commissioner (Appeals)--Claim that sales to A should be excluded--Ground neither arising from order of Assessing Officer nor from order of Commissioner (Appeals)--Could not be considered-- Alcatel-Lucent France v. Assistant DIT (Delhi) . . . 1

Business expenditure --Deduction only on actual payment--Service tax--Expenditure can be disallowed only if claim is shown in profit and loss account--Matter remanded--Income-tax Act, 1961, s. 43B-- TNS India P. Ltd. v. Assistant CIT (Hyderabad) . . . 44

----Travelling expenditure--Expenditure wholly and exclusively for purpose of business not to be disallowed merely because assessee’s income or turnover reduced thereby--Finding that assessee produced audited books of account before Assessing Officer and expenses allowable--Justified--Income-tax Act, 1961, s. 37-- Deputy CIT v. Birla Soft India Ltd. (Delhi) . . . 117

Business loss --Carry forward and set off--Exemption--Export of computer software--Assessee carrying out software development and related services from undertakings entitled to exemption under section 10A of Act and other units--Set off of losses arising out of section 10A units against income of other undertakings and carry forward of unabsorbed losses and depreciation--Permissible--Income-tax Act, 1961, s. 10A-- Deputy CIT v. Birla Soft India Ltd. (Delhi) . . . 117

Capital or revenue expenditure --Expenditure incurred on purchase of photo sets--Assessing Officer allowing depreciation--Inability to determine nature of expenditure due to conflicting findings--Depreciation allowable for balance years for life of asset--Income-tax Act, 1961-- TNS India P. Ltd. v. Assistant CIT (Hyderabad) . . . 44

----Royalty expenses--Revenue in nature--Income-tax Act, 1961-- ITO v. Cryobanks International (I) P. Ltd. (Delhi) . . . 31

Depreciation --Rate of depreciation--Computer peripherals--Depreciation allowable at 60 per cent.--Income-tax Act, 1961-- Hyper Quality India P. Ltd. v. Assistant CIT (Delhi) . . . 37

----Rate of depreciation--Computer peripherals--Depreciation allowable at 60 per cent.--Income-tax Act, 1961, s. 32-- Deputy CIT v. Birla Soft India Ltd. (Delhi) . . . 117

----Rate of depreciation--Depreciation at 60 per cent. allowable for computer peripherals--Income-tax Act, 1961-- ITO v. Cryobanks International (I) P. Ltd. (Delhi) . . . 31

Double taxation relief --Credit for tax paid in foreign country--Taxable income of assessee increasing on account of additions--Enhanced credit of taxes paid in foreign country to be granted--Income-tax Act, 1961, s. 90--Double Taxation Avoidance Agreement between India and Australia, art. 24(4)-- Deputy CIT v. Birla Soft India Ltd. (Delhi) . . . 117

Exemption --Export of computer software--Eligible profits--Notice pay recovered from employees--To be treated as income derived from eligible undertaking--Deduction allowable--Income-tax Act, 1961, s. 10A-- Deputy CIT v. Birla Soft India Ltd. (Delhi) . . . 117

----Export of computer software--Undertaking set up in 1995 with approval of Software Technology Parks of India--In 1999, as a result of new equity participation in parent company new independent unit set up for rendering software services to new client base--New undertaking obtaining separate approval of Software Technology Parks of India--Substantial fresh capital invested and new unit capable of doing business of its own, independent of old unit--Two undertakings to be treated as separate--Income-tax Act, 1961, s. 10A-- Deputy CIT v. Birla Soft India Ltd . (Delhi) . . . 117

Export --Special deduction--Export of computer software--Assessee engaged in export of data processing entitled to deduction--Income-tax Act, 1961, s. 80HHE.-- TNS India P. Ltd. v. Assistant CIT (Hyderabad) . . . 44

International transactions --Arm’s length price--Assessee bound to adopt one of prescribed methods--Holding company providing support services which benefitted assessee and group companies--Allocation of costs--Transfer Pricing Officer not entitled to take arm’s length price of transaction at nil and add entire payment made by assessee to its associated enterprise as adjustment to arm’s length price--Assessee not choosing any method prescribed under rules for benchmarking payment of management fee on ground it was only cost allocation--Reference by Transfer Pricing Officer and Dispute Resolution Panel to services not rendered by assessee to its associated enterprise--No proper application of mind to documentation and evidence filed by assessee--Evidence to be linked with invoices to show nature of services rendered--Order of Assessing Officer set aside and determination of arm’s length price remanded to Transfer Pricing Officer for fresh consideration--Income-tax Act, 1961, s. 92CA-- Quintiles Research (India) P. Ltd. v. Deputy CIT (Bangalore) . . . 73

----Arm’s length price--Determination--Assessee providing software development and related services to holding company incorporated in U. S. A. from several units--Assessee employing internal transactional net margin method--Finding that terms and conditions for rendering services governed by one single agreement between assessee and foreign holding company--Unity of business, administrative control and unity of funds--Independent functions, assets and risk analysis of each unit with existing comparables practically not possible--Software related services rendered from each of its units to same two associated enterprises under a single agreement on continuous basis--Services of similar nature--To be combined and evaluated--Benchmarking of transactions to be aggregated at entity level and not at unit level--Income-tax Act, 1961, s. 92CA(3)-- Deputy CIT v. Birla Soft India Ltd. (Delhi) . . . 117

----Arm’s length price--Determination--Profit level indicator--Payment of management fee--Profit level indicator higher than comparables even after considering payment of management fee--Transactions at arm’s length--Denial of management fee not proper--Income-tax Act, 1961-- TNS India P. Ltd. v. Assistant CIT (Hyderabad) . . . 44

----Arm’s length price--Pricing methodology--Transfer Pricing Officer failing to examine whether payment of fee made according to agreement--Assessing Officer to verify pricing methodology--Matter remanded--Income-tax Act, 1961-- TNS India P. Ltd. v. Assistant CIT (Hyderabad) . . . 44

----Transfer Pricing Officer--Scope of powers--Restricted to determination of arm’s length price--Payment by assessee for management services provided by group entity--Transfer Pricing Officer has no jurisdiction to question business decision of assessee to make payment--Income-tax Act, 1961, s. 92C-- TNS India P. Ltd. v. Assistant CIT (Hyderabad) . . . 44

----Transfer pricing--Computation of arm’s length price--Transactional net margin method--Profit split method--Associated enterprises continuously sustaining loss--Functions performed, assets employed and risk assumed not properly evaluated--No proper justification for application of transactional net margin method and rejection of profit split method--Addition made to be deleted--Income-tax Act, 1961-- Hyper Quality India P. Ltd. v. Assistant CIT (Delhi) . . . 37

Non-resident --Advance tax--Interest--Assessee’s claim that receipts not taxable in India--Possibility that it might have instructed payer not to deduct tax at source--Not entitled to claim that since income liable to deduction of tax at source, it was not liable for interest--Income-tax Act, 1961, ss. 195, 234B-- Alcatel-Lucent France v. Assistant DIT (Delhi) . . . 1

----Royalty--Revenue received on account of supply of software--Receipts from supply of equipment including hardware and software to be taxed as business profits in accordance with article 7 of the Double Taxation Avoidance Agreement--Income-tax Act, 1961, s. 9(1)(vi)-- Alcatel-Lucent France v. Assistant DIT (Delhi) . . . 1

----Taxability in India--Failure to furnish details of revenue received from India but providing good faith estimate for aggregate supplies invoiced to India--Assessing Officer estimating assessee’s revenue in India--Should have allowed opportunity to assessee--Assessee furnishing complete details of sales in India before Commissioner (Appeals)--Commissioner (Appeals) admitting as additional evidence and allowing opportunity to Assessing Officer to verify it--No discrepancy found in details of sales in India--Direction to Assessing Officer to accept assessee’s sales figure--No infirmity--Income-tax Rules, 1962, r. 46A-- Alcatel-Lucent France v. Assistant DIT (Delhi) . . . 1

Penalty --Concealment of income or furnishing of inaccurate particulars--Disallowance of amount under transfer pricing provisions--Only a difference of opinion in determining arms length price-- Not a case of concealment of income or furnishing of inaccurate particulars--Income-tax Act, 1961, s. 271(1)(c)-- TNS India P. Ltd. v. Assistant CIT (Hyderabad) . . . 44

----Loans or deposits exceeding specific limits in cash--Firm--Not separate independent legal entity from partners--Withdrawal from capital account and deposit of cash in capital account--Not a case of loan--Penalty cannot be levied--Income-tax Act, 1961, ss. 269T, 271E-- Deputy CIT v. Chetan M. Kakaria (Mumbai) . . . 24

Scientific research and development --Special deduction--Condition as to existence of infrastructure--No requirement that assessee should own it--Contract research organisation--Eligible to claim deduction--Approval granted by prescribed authority fully conscious that assessee a contract research organisation--Assessing Officer not entitled to go behind approval--Income-tax Act, 1961, s. 80-IB(8A)--Income-tax Rules, 1962, rr. 18D, 18DA-- Quintiles Research (India) P. Ltd. v. Deputy CIT (Bangalore) . . . 73

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Double Taxation Avoidance Agreement between India and Australia

Art. 24(4) --Double taxation relief--Credit for tax paid in foreign country--Taxable income of assessee increasing on account of additions--Enhanced credit of taxes paid in foreign country to be granted-- Deputy CIT v. Birla Soft India Ltd. (Delhi) . . . 117

Income-tax Act, 1961

S. 9(1)(vi) --Non-resident--Royalty--Revenue received on account of supply of software--Receipts from supply of equipment including hardware and software to be taxed as business profits in accordance with article 7 of the Double Taxation Avoidance Agreement-- Alcatel-Lucent France v. Assistant DIT (Delhi) . . . 1

S. 10A --Exemption--Export of computer software--Undertaking set up in 1995 with approval of Software Technology Parks of India--In 1999, as a result of new equity participation in parent company new independent unit set up for rendering software services to new client base--New undertaking obtaining separate approval of Software Technology Parks of India--Substantial fresh capital invested and new unit capable of doing business of its own, independent of old unit--Two undertakings to be treated as separate-- Deputy CIT v. Birla Soft India Ltd . (Delhi) . . . 117

----Business loss--Carry forward and set off--Exemption--Export of computer software--Assessee carrying out software development and related services from undertakings entitled to exemption under section 10A of Act and other units--Set off of losses arising out of section 10A units against income of other undertakings and carry forward of unabsorbed losses and depreciation--Permissible-- Deputy CIT v. Birla Soft India Ltd. (Delhi) . . . 117

----Exemption--Export of computer software--Eligible profits--Notice pay recovered from employees--To be treated as income derived from eligible undertaking--Deduction allowable-- Deputy CIT v. Birla Soft India Ltd. (Delhi) . . . 117

S. 32 --Depreciation--Rate of depreciation--Computer peripherals--Depreciation allowable at 60 per cent.-- Deputy CIT v. Birla Soft India Ltd. (Delhi) . . . 117

S. 37 --Business expenditure--Travelling expenditure--Expenditure wholly and exclusively for purpose of business not to be disallowed merely because assessee’s income or turnover reduced thereby--Finding that assessee produced audited books of account before Assessing Officer and expenses allowable--Justified-- Deputy CIT v. Birla Soft India Ltd. (Delhi) . . . 117

S. 43B --Business expenditure--Deduction only on actual payment--Service tax--Expenditure can be disallowed only if claim is shown in profit and loss account--Matter remanded-- TNS India P. Ltd. v. Assistant CIT (Hyderabad) . . . 44

S. 80-IB(8A) --Scientific research and development--Special deduction--Condition as to existence of infrastructure--No requirement that assessee should own it--Contract research organisation--Eligible to claim deduction--Approval granted by prescribed authority fully conscious that assessee a contract research organisation--Assessing Officer not entitled to go behind approval-- Quintiles Research (India) P. Ltd. v. Deputy CIT (Bangalore) . . . 73

S. 80HHE --Export--Special deduction--Export of computer software--Assessee engaged in export of data processing entitled to deduction-- TNS India P. Ltd. v. Assistant CIT (Hyderabad) . . . 44

S. 90 --Double taxation relief--Credit for tax paid in foreign country--Taxable income of assessee increasing on account of additions--Enhanced credit of taxes paid in foreign country to be granted-- Deputy CIT v. Birla Soft India Ltd. (Delhi) . . . 117

S. 92C --International transactions--Transfer Pricing Officer--Scope of powers--Restricted to determination of arm’s length price--Payment by assessee for management services provided by group entity--Transfer Pricing Officer has no jurisdiction to question business decision of assessee to make payment-- TNS India P. Ltd. v. Assistant CIT (Hyderabad) . . . 44

S. 92CA --International transactions--Arm’s length price--Assessee bound to adopt one of prescribed methods--Holding company providing support services which benefitted assessee and group companies--Allocation of costs--Transfer Pricing Officer not entitled to take arm’s length price of transaction at nil and add entire payment made by assessee to its associated enterprise as adjustment to arm’s length price--Assessee not choosing any method prescribed under rules for benchmarking payment of management fee on ground it was only cost allocation--Reference by Transfer Pricing Officer and Dispute Resolution Panel to services not rendered by assessee to its associated enterprise--No proper application of mind to documentation and evidence filed by assessee--Evidence to be linked with invoices to show nature of services rendered--Order of Assessing Officer set aside and determination of arm’s length price remanded to Transfer Pricing Officer for fresh consideration-- Quintiles Research (India) P. Ltd. v. Deputy CIT (Bangalore) . . . 73

S. 92CA(3) --International transactions--Arm’s length price--Determination--Assessee providing software development and related services to holding company incorporated in U. S. A. from several units--Assessee employing internal transactional net margin method--Finding that terms and conditions for rendering services governed by one single agreement between assessee and foreign holding company--Unity of business, administrative control and unity of funds--Independent functions, assets and risk analysis of each unit with existing comparables practically not possible--Software related services rendered from each of its units to same two associated enterprises under a single agreement on continuous basis--Services of similar nature--To be combined and evaluated--Benchmarking of transactions to be aggregated at entity level and not at unit level-- Deputy CIT v. Birla Soft India Ltd. (Delhi) . . . 117

S. 195 --Non-resident--Advance tax--Interest--Assessee’s claim that receipts not taxable in India--Possibility that it might have instructed payer not to deduct tax at source--Not entitled to claim that since income liable to deduction of tax at source, it was not liable for interest-- Alcatel-Lucent France v. Assistant DIT (Delhi) . . . 1

S. 234B --Non-resident--Advance tax--Interest--Assessee’s claim that receipts not taxable in India--Possibility that it might have instructed payer not to deduct tax at source--Not entitled to claim that since income liable to deduction of tax at source, it was not liable for interest-- Alcatel-Lucent France v. Assistant DIT (Delhi) . . . 1

S. 269T --Penalty--Loans or deposits exceeding specific limits in cash--Firm--Not separate independent legal entity from partners--Withdrawal from capital account and deposit of cash in capital account--Not a case of loan--Penalty cannot be levied-- Deputy CIT v. Chetan M. Kakaria (Mumbai) . . . 24

S. 271(1)(c) --Penalty--Concealment of income or furnishing of inaccurate particulars--Disallowance of amount under transfer pricing provisions--Only a difference of opinion in determining arms length price-- Not a case of concealment of income or furnishing of inaccurate particulars-- TNS India P. Ltd. v. Assistant CIT (Hyderabad) . . . 44

S. 271E --Penalty--Loans or deposits exceeding specific limits in cash--Firm--Not separate independent legal entity from partners--Withdrawal from capital account and deposit of cash in capital account--Not a case of loan--Penalty cannot be levied-- Deputy CIT v. Chetan M. Kakaria (Mumbai) . . . 24

Income-tax Rules, 1962

R. 18D --Scientific research and development--Special deduction--Condition as to existence of infrastructure--No requirement that assessee should own it--Contract research organisation--Eligible to claim deduction--Approval granted by prescribed authority fully conscious that assessee a contract research organisation--Assessing Officer not entitled to go behind approval-- Quintiles Research (India) P. Ltd. v. Deputy CIT (Bangalore) . . . 73

R. 18DA --Scientific research and development--Special deduction--Condition as to existence of infrastructure--No requirement that assessee should own it--Contract research organisation--Eligible to claim deduction--Approval granted by prescribed authority fully conscious that assessee a contract research organisation--Assessing Officer not entitled to go behind approval-- Quintiles Research (India) P. Ltd. v. Deputy CIT (Bangalore) . . . 73

R. 46A --Non-resident--Taxability in India--Failure to furnish details of revenue received from India but providing good faith estimate for aggregate supplies invoiced to India--Assessing Officer estimating assessee’s revenue in India--Should have allowed opportunity to assessee--Assessee furnishing complete details of sales in India before Commissioner (Appeals)--Commissioner (Appeals) admitting as additional evidence and allowing opportunity to Assessing Officer to verify it--No discrepancy found in details of sales in India--Direction to Assessing Officer to accept assessee’s sales figure--No infirmity-- Alcatel-Lucent France v. Assistant DIT (Delhi) . . . 1

 

ITR Volume 364 : Part 1 (Issue dated : 2-6-2014)

 

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

ONLINE EDITION

SUBJECT INDEX TO CASES REPORTED

SUPREME COURT

Exemption --Export--Computation of income--Unabsorbed depreciation and unabsorbed investment allowance--Carry forward and set off--Assessee having income other than from export oriented unit--Unabsorbed depreciation and investment allowance partly adjusted against other income to show nil liability--Not permissible--Income-tax Act, 1961, ss. 10B, 32, 32A-- Himatsingka Seide Ltd. v. CIT . . . 467

Income from undisclosed sources --Unexplained investment--Interest on borrowed capital--Deletion of additions by Tribunal reversed by High Court--Supreme Court--No interference-- Narendra Mohan Paliwal v. CIT . . . 468

HIGH COURTS

Assessment --Powers of Assessing Officer--Assessing Officer passing order following direction of Tribunal--Successor-in-office had no jurisdiction to pass another order--Income-tax Act, 1961, s. 254-- Classic Share and Stock Broking Services Ltd. v. Asst. CIT (Bom) . . . 470

Capital gains --Slump sale--Definition--Scheme of arrangement approved by High Court--Does not affect liability to tax on transfer of a capital asset--Consideration received by assessee on transfer of its project finance business and assets based financing business, including its shareholding--Taxable as slump sale--Income-tax Act, 1961, s. 50B-- SREI Infrastructure Finance Ltd. v. ITSC (Delhi) . . . 474

Income --Business income--Remission or cessation of trading liability--Law applicable--Effect of insertion of Explanation 1 to section 41(1)-- Explanation does not have retrospective effect--Unclaimed salaries, credit balances not claimed by suppliers and customers and uncashed cheques--Amounts written back in accounts--Not includible in income of assessee--Income-tax Act, 1961, s. 41(1)-- CIT v. Mohan Meakin Ltd. (Delhi) . . . 434

Penalty --Loan in cash exceeding prescribed limit--Burden on assessee to prove reasonable cause for receiving cash--No such proof was available--Penalty justified--Income-tax Act, 1961, ss. 269SS, 271D-- K. V. George v. CIT (Ker) . . . 445

Precedent --Importance of precedent-- UTI Mutual Fund v. ITO (Bom) . . . 486

Recovery of tax --Stay of proceedings--Strong prima facie case raising serious triable issues--Judgment of High Court relating to prior assessment year favourable to assessee--Stay granted--Income-tax Act, 1961, s. 260-- UTI Mutual Fund v. ITO (Bom) . . . 486

Unexplained investment --Sale of shares at less than market value--Claim that seller acted as trustee--No evidence to disprove claim--No evidence that transaction was not genuine--Difference between sale price and market price not assessable as unexplained investment--Income-tax Act, 1961, s. 69-- CIT v. Associate Techno Plastics P. Ltd. (Delhi) . . . 449

PRINT EDITION

ITR Volume 364 : Part 1 (Issue dated : 2-6-2014)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

SUPREME COURT

Appeal to High Court --Substantial question of law--Binding nature of findings of fact--Court to examine whether question involves merely finding of fact or legal effect of such proven facts or documents--Where question involves legal effect of proven facts or documents--Question of law arises--Income-tax Act, 1961, s. 260A-- CIT v. Dawoodi Bohra Jamat . . . 31

Charitable purpose --Definition--Income-tax Act, 1961, s. 2(15)-- CIT v. Dawoodi Bohra Jamat . . . 31

----Exemption--Exclusion from exemption where trust created for benefit of particular community or caste--General principles--Objects of assessee-trust based on religious tenets--Activities of trust both charitable and religious--Benefits not exclusively meant for particular religious community--Trust not disqualified to claim exemption--Income-tax Act, 1961, ss. 2(15), 11, 12, 12A, 12AA, 13-- CIT v. Dawoodi Bohra Jamat . . . 31

Export --Special deduction--Turnover--Computation--To include sales only of goods dealt in by assessee--Assessee dealing in manufacture and export of stainless steel utensils--Sale of scrap--Proceeds not includible in turnover--Income-tax Act, 1961, s. 80HHC-- CIT v. Punjab Stainless Steel Industries . . . 144

Interpretation of taxing statutes --Meanings of words--Meaning given by body of accountants having statutory recognition--Can be adopted-- CIT v. Punjab Stainless Steel Industries . . . 144

----Provision intended to encourage businessmen in order to bring more foreign exchange to country-- CIT v. Punjab Stainless Steel Industries . . . 144

Words and phrases --“Religious purpose†, meaning of-- CIT v. Dawoodi Bohra Jamat . . . 31

----“Turnover†--Meaning of-- CIT v. Punjab Stainless Steel Industries . . . 144

HIGH COURTS

Accounting --Change in method of accounting--Tickets dispatched to stockists shown as not sold but also not shown as part of stock--Change distorting picture for purposes of taxation--Change not valid--Income-tax Act, 1961-- CIT v. K and Co. (Delhi) . . . 93

Advance tax --Interest--Stock appreciation rights--Employer bound to deduct tax at source--No question of employee paying advance tax--Employee entitled to take into account amount of tax deductible though not actually deducted--Income-tax Act, 1961, ss. 234A, 234B, 234C-- CIT v. Anil Kumar Nehru (Bom) . . . 26

Appeal to Appellate Tribunal --Rectification of order by Tribunal--Application for rectification--Limitation--Starting point for limitation--Actual date of receipt of order of Tribunal--Income-tax Act, 1961, s. 254(2)-- Peterplast Synthetics P. Ltd. v. Asst. CIT (Guj) . . . 16

Business expenditure --Current repairs--Expenditure on replacement of dies and moulds--Allowable as current repairs--Income-tax Act, 1961, s. 31-- CIT v. TVS Motors Ltd. (Mad) . . . 1

----Deduction only on actual payment--Entry tax--Whether adjusted against sales tax in sales tax assessment not relevant--Allowable if paid--Income-tax Act, 1961, s. 43B-- CIT v. TVS Motors Ltd. (Mad) . . . 1

----Scientific research expenditure--Expenditure on work-in-progress--Allowable--Income-tax Act, 1961, s. 35(1)(iv)-- CIT v. TVS Motors Ltd. (Mad) . . . 1

Business income --Income from other sources--Funds placed as margin money in order to obtain bank guarantee required by State Government for carrying on business in sale of lottery tickets--Interest earned on margin money--Business income--Income-tax Act, 1961-- CIT v. K and Co. (Delhi) . . . 93

Capital gains --Long-term capital gains--Short-term capital gains--Shares treated as investment in balance-sheets for several years--No evidence that shares purchased with borrowed funds--Profits from sale to be treated as long-term capital gains--Short duration of holding of shares and lack of clarity in account books--Profits from sale not short-term capital gains but business income--Income-tax Act, 1961-- CIT v. D & M Components Ltd. (Delhi) . . . 179

Capital or revenue receipt --Special capital incentive--Object of assistance under subsidy scheme to enable assessee to set up new unit--Capital receipt--Income-tax Act, 1961-- CIT v. Kirloskar Oil Engines Ltd. (Bom) . . . 88

Cash credits --Share application money--Finding that transaction of share application was not genuine--Addition of amount under section 68--Justified--Income-tax Act, 1961, s. 68-- Onassis Axles P. Ltd. v. CIT (Delhi) . . . 53

Charitable purposes --Charitable institution--Registration--Object of general public utility--Assessee a statutory body controlling activities at a major port for utilising and creating facilities--Activities of assessee for general public utility--Assessee entitled to registration--Income-tax Act, 1961, s. 12AA-- CIT v. Kandla Port Trust (Guj) . . . 164

----Charitable trust--Registration--Trustees given power to amend trust deed--Amendment following conditions laid down in trust deed--Approval of civil court not necessary--Amended trust deed can be relied upon for purpose of registration--Income-tax Act, 1961, s. 12AA-- Director of Income-tax (Exemptions) v. Ramoji Foundation (AP) . . . 85

Deduction of tax at source --Rent--Scope of expression--Provision of passive infrastructure facilities to mobile operators by assessee--Towers are neutral platform without which mobile operators cannot operate--Dominant intention is use of equipment or plant or machinery--Amounts to renting of plant and machinery--That equipment housed in premises incidental and not a renting of premises--Tax deduction at source to be at rate prescribed in section 194-I(a)--Income-tax Act, 1961, ss. 194C, 194-I, 197-- Indus Towers Ltd. v. CIT (Delhi) . . . 114

Depreciation --Lease of commercial vehicles--Vehicles not having permanent registration--Not relevant--Assessee entitled to depreciation--Income-tax Act, 1961, s. 32-- CIT v. K and Co. (Delhi) . . . 93

----Temporary sheds for parking vehicles--Depreciation allowable at rate applicable to building--Income-tax Act, 1961, s. 32-- CIT v. TVS Motors Ltd. (Mad) . . . 1

Dividend --Deemed dividend--Loan to shareholder--Exception clause--Conditions for exception to apply--Tribunal finding since lender companies did not carry on money-lending business, advances to assessee not in ordinary course of business--Not proper test--Whether lending of money substantial part of business of company not established on facts--Matter remanded--Income-tax Act, 1961, s. 2(22)(e)-- Kishori Lal Agrawal v. CIT (All) . . . 158

Exemption --Interest on money borrowed by industrial undertaking in India from foreign country--Condition precedent for exemption under sub-clause (c) of section 10(15)(iv)--Industrial undertaking should be engaged in mining--Meaning of “engaged in mining†--Money borrowed for purchasing workover rigs for drilling for ONGC--Contract stipulating that work included preparation of well for production--Interest entitled to exemption--Income-tax Act, 1961, s. 10(15)-- Dewan Chand Ram Chandra Industries P. Ltd. v. Union of India (Delhi) . . . 70

Export --Special deduction--Profits of business--Profits from forward contracts owing to fluctuation of foreign exchange--Whether forward contracts made in course of business of export and whether profits earned with reference to particular contract--Matter remanded--Income-tax Act, 1961, ss. 35(1)(iv), 80HHC-- CIT v. TVS Motors Ltd. (Mad) . . . 1

Income --Accrual of income--Time of accrual--Dispatch to agents and sale of lottery tickets--Unsold tickets to be returned one day before draw of lottery--No sale till date of draw of lottery--Accrual of income only at that time--Income-tax Act, 1961-- CIT v. K and Co. (Delhi) . . . 93

----Business income--Recovery of bad debts--Co-operative bank--Provision for bad debts under RBI guidelines--No claim for bad debts--Amounts written back into accounts subsequently--Not assessable under section 41(4)--Income-tax Act, 1961, ss. 41(4), 80P-- CIT v. Jain Co-operative Bank Ltd. (Delhi) . . . 137

Interpretation of taxing statutes --Words--Interpretation with reference to context.-- Dewan Chand Ram Chandra Industries P. Ltd. v. Union of India (Delhi) . . . 70

Kar Vivad Samadhan Scheme --Condition precedent for claiming benefit--Pendency of proceedings--Designated authority not entitled to consider motive of assessee in seeking revision--Designated authority to consider only whether declarant eligible to file declaration in terms of Scheme--No power to reject declaration on ground relief claimed in revision petition not within scope of jurisdiction--Designated authority to process declarations filed by assessees--Finance (No. 2) Act, 1998--Income-tax Act, 1961, s. 264-- Y. V. Chander v. Union of India (AP) . . . 190

Penalty --Concealment of income--Deduction on account of interest claimed knowingly on wrong basis--Furnishing inaccurate particulars to avoid liability to pay tax on that basis--No evidence that inaccurate particulars furnished accidentally or by mistake--Penalty rightly imposed--Income-tax Act, 1961, s. 271(1)(c)-- Gourav Goenka v. Asst. CIT (Cal) . . . 186

----Loan or deposit in cash exceeding prescribed limit--Several transactions above Rs. 20,000--Defence that person who was in charge of branch not well versed with income-tax law--Assessee expected to know person who maintains day-to-day administration--No consistency in explanation of assessee--Assessee to explain transactions of Rs. 20,000 and above before Assessing Officer--Income-tax Act, 1961, s. 271D-- N. S. S. Karayogam v. CIT (Ker) . . . 81

Precedent --Effect of decision of Supreme Court in CIT v. Bokaro Steel Ltd. [1999] 236 ITR 315 (SC)-- CIT v. K and Co. (Delhi) . . . 93

Reassessment --Deduction of tax at source--Assessee importing raw materials from foreign holding company under “high seas sales†--Order of Dispute Resolution Panel in transfer pricing proceedings not proposing any disallowance of payments made to foreign company under section 40(a)(i)--Reassessment of holding company pursuant to survey--Finding by Dispute Resolution Panel in case of holding company that it could not be taxed in respect of sales made in India through assessee on footing that assessee was its permanent establishment--No income arose or accrued to holding company through its permanent establishment in India in respect of sales made in India--Assessee could not be treated as in default--Payments made by assessee to holding company for goods not tax deductible--Allowable as deduction--Notices issued to assessee under sections 148 and 201(1)/(1A)--Liable to be quashed--Income-tax Act, 1961, ss. 40(a)(i), 148, 195(2), 201(1), (1A)-- Samsung India Electronics Pvt. Ltd. v. Deputy Director of Income-tax (International Taxation) (Delhi) . . . 103

Recovery of tax --Stay of recovery proceedings--Stay of part of demand--Demand based mainly on enhancement of assessment by Commissioner (Appeals)--Prima facie case against enhancement--Stay to be granted in respect of entire demand--Income-tax Act, 1961-- Saipem Triune Engineering P. Ltd. v. Asst. CIT (Delhi) . . . 154

Settlement of cases --Application for settlement--Duty of Settlement Commission--Settlement Commission must consider contentions of assessee and Revenue and reach an objective decision--Rejection of application without considering issues--Not valid--Income-tax Act, 1961, s. 245D-- MARC Bathing Luxuries Ltd. v. ITSC (Delhi) . . . 64

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961 :

S. 2(15) --Charitable purpose--Definition-- CIT v. Dawoodi Bohra Jamat (SC). . . 31

----Charitable purpose--Exemption--Exclusion from exemption where trust created for benefit of particular community or caste--General principles--Objects of assessee-trust based on religious tenets--Activities of trust both charitable and religious--Benefits not exclusively meant for particular religious community--Trust not disqualified to claim exemption-- CIT v. Dawoodi Bohra Jamat (SC). . . 31

S. 2(22)(e) --Dividend--Deemed dividend--Loan to shareholder--Exception clause--Conditions for exception to apply--Tribunal finding since lender companies did not carry on money-lending business, advances to assessee not in ordinary course of business--Not proper test--Whether lending of money substantial part of business of company not established on facts--Matter remanded-- Kishori Lal Agrawal v. CIT (All) . . . 158

S. 10(15) --Exemption--Interest on money borrowed by industrial undertaking in India from foreign country--Condition precedent for exemption under sub-clause (c) of section 10(15)(iv)--Industrial undertaking should be engaged in mining--Meaning of “engaged in mining†--Money borrowed for purchasing workover rigs for drilling for ONGC--Contract stipulating that work included preparation of well for production--Interest entitled to exemption-- Dewan Chand Ram Chandra Industries P. Ltd. v. Union of India (Delhi) . . . 70

S. 11 --Charitable purpose--Exemption--Exclusion from exemption where trust created for benefit of particular community or caste--General principles--Objects of assessee-trust based on religious tenets--Activities of trust both charitable and religious--Benefits not exclusively meant for particular religious community--Trust not disqualified to claim exemption-- CIT v. Dawoodi Bohra Jamat (SC). . . 31

S. 12 --Charitable purpose--Exemption--Exclusion from exemption where trust created for benefit of particular community or caste--General principles--Objects of assessee-trust based on religious tenets--Activities of trust both charitable and religious--Benefits not exclusively meant for particular religious community--Trust not disqualified to claim exemption-- CIT v. Dawoodi Bohra Jamat (SC). . . 31

S. 12A --Charitable purpose--Exemption--Exclusion from exemption where trust created for benefit of particular community or caste--General principles--Objects of assessee-trust based on religious tenets--Activities of trust both charitable and religious--Benefits not exclusively meant for particular religious community--Trust not disqualified to claim exemption-- CIT v. Dawoodi Bohra Jamat (SC). . . 31

S. 12AA --Charitable purposes--Charitable institution--Registration--Object of general public utility--Assessee a statutory body controlling activities at a major port for utilising and creating facilities--Activities of assessee for general public utility--Assessee entitled to registration-- CIT v. Kandla Port Trust (Guj) . . . 164

----Charitable purposes--Charitable trust--Registration--Trustees given power to amend trust deed--Amendment following conditions laid down in trust deed--Approval of civil court not necessary--Amended trust deed can be relied upon for purpose of registration-- Director of Income-tax (Exemptions) v. Ramoji Foundation (AP) . . . 85

----Charitable purpose--Exemption--Exclusion from exemption where trust created for benefit of particular community or caste--General principles--Objects of assessee-trust based on religious tenets--Activities of trust both charitable and religious--Benefits not exclusively meant for particular religious community--Trust not disqualified to claim exemption-- CIT v. Dawoodi Bohra Jamat (SC). . . 31

S. 13 --Charitable purpose--Exemption--Exclusion from exemption where trust created for benefit of particular community or caste--General principles--Objects of assessee-trust based on religious tenets--Activities of trust both charitable and religious--Benefits not exclusively meant for particular religious community--Trust not disqualified to claim exemption-- CIT v. Dawoodi Bohra Jamat (SC). . . 31

S. 31 --Business expenditure--Current repairs--Expenditure on replacement of dies and moulds--Allowable as current repairs-- CIT v. TVS Motors Ltd. (Mad) . . . 1

S. 32 --Depreciation--Lease of commercial vehicles--Vehicles not having permanent registration--Not relevant--Assessee entitled to depreciation-- CIT v. K and Co. (Delhi) . . . 93

----Depreciation--Temporary sheds for parking vehicles--Depreciation allowable at rate applicable to building-- CIT v. TVS Motors Ltd. (Mad) . . . 1

S. 35(1)(iv) --Business expenditure--Scientific research expenditure--Expenditure on work-in-progress--Allowable-- CIT v. TVS Motors Ltd. (Mad) . . . 1

----Export--Special deduction--Profits of business--Profits from forward contracts owing to fluctuation of foreign exchange--Whether forward contracts made in course of business of export and whether profits earned with reference to particular contract--Matter remanded-- CIT v. TVS Motors Ltd. (Mad) . . . 1

S. 40(a)(i) --Reassessment--Deduction of tax at source--Assessee importing raw materials from foreign holding company under “high seas sales†--Order of Dispute Resolution Panel in transfer pricing proceedings not proposing any disallowance of payments made to foreign company under section 40(a)(i)--Reassessment of holding company pursuant to survey--Finding by Dispute Resolution Panel in case of holding company that it could not be taxed in respect of sales made in India through assessee on footing that assessee was its permanent establishment--No income arose or accrued to holding company through its permanent establishment in India in respect of sales made in India--Assessee could not be treated as in default--Payments made by assessee to holding company for goods not tax deductible--Allowable as deduction--Notices issued to assessee under sections 148 and 201(1)/(1A)--Liable to be quashed-- Samsung India Electronics Pvt. Ltd. v. Deputy Director of Income-tax (International Taxation) (Delhi) . . . 103

S. 41(4) --Income--Business income--Recovery of bad debts--Co-operative bank--Provision for bad debts under RBI guidelines--No claim for bad debts--Amounts written back into accounts subsequently--Not assessable under section 41(4)-- CIT v. Jain Co-operative Bank Ltd. (Delhi) . . . 137

S. 43B --Business expenditure--Deduction only on actual payment--Entry tax--Whether adjusted against sales tax in sales tax assessment not relevant--Allowable if paid-- CIT v. TVS Motors Ltd. (Mad) . . . 1

S. 68 --Cash credits--Share application money--Finding that transaction of share application was not genuine--Addition of amount under section 68--Justified-- Onassis Axles P. Ltd. v. CIT (Delhi) . . . 53

S. 80HHC --Export--Special deduction--Profits of business--Profits from forward contracts owing to fluctuation of foreign exchange--Whether forward contracts made in course of business of export and whether profits earned with reference to particular contract--Matter remanded-- CIT v. TVS Motors Ltd. (Mad) . . . 1

----Export--Special deduction--Turnover--Computation--To include sales only of goods dealt in by assessee--Assessee dealing in manufacture and export of stainless steel utensils--Sale of scrap--Proceeds not includible in turnover-- CIT v. Punjab Stainless Steel Industries (SC). . . 144

S. 80P --Income--Business income--Recovery of bad debts--Co-operative bank--Provision for bad debts under RBI guidelines--No claim for bad debts--Amounts written back into accounts subsequently--Not assessable under section 41(4)-- CIT v. Jain Co-operative Bank Ltd. (Delhi) . . . 137

S. 148 --Reassessment--Deduction of tax at source--Assessee importing raw materials from foreign holding company under “high seas sales†--Order of Dispute Resolution Panel in transfer pricing proceedings not proposing any disallowance of payments made to foreign company under section 40(a)(i)--Reassessment of holding company pursuant to survey--Finding by Dispute Resolution Panel in case of holding company that it could not be taxed in respect of sales made in India through assessee on footing that assessee was its permanent establishment--No income arose or accrued to holding company through its permanent establishment in India in respect of sales made in India--Assessee could not be treated as in default--Payments made by assessee to holding company for goods not tax deductible--Allowable as deduction--Notices issued to assessee under sections 148 and 201(1)/(1A)--Liable to be quashed-- Samsung India Electronics Pvt. Ltd. v. Deputy Director of Income-tax (International Taxation) (Delhi) . . . 103

S. 194C --Deduction of tax at source--Rent--Scope of expression--Provision of passive infrastructure facilities to mobile operators by assessee--Towers are neutral platform without which mobile operators cannot operate--Dominant intention is use of equipment or plant or machinery--Amounts to renting of plant and machinery--That equipment housed in premises incidental and not a renting of premises--Tax deduction at source to be at rate prescribed in section 194-I(a)-- Indus Towers Ltd. v. CIT (Delhi) . . . 114

S. 194-I --Deduction of tax at source--Rent--Scope of expression--Provision of passive infrastructure facilities to mobile operators by assessee--Towers are neutral platform without which mobile operators cannot operate--Dominant intention is use of equipment or plant or machinery--Amounts to renting of plant and machinery--That equipment housed in premises incidental and not a renting of premises--Tax deduction at source to be at rate prescribed in section 194-I(a)-- Indus Towers Ltd. v. CIT (Delhi) . . . 114

S. 195(2) --Reassessment--Deduction of tax at source--Assessee importing raw materials from foreign holding company under “high seas sales†--Order of Dispute Resolution Panel in transfer pricing proceedings not proposing any disallowance of payments made to foreign company under section 40(a)(i)--Reassessment of holding company pursuant to survey--Finding by Dispute Resolution Panel in case of holding company that it could not be taxed in respect of sales made in India through assessee on footing that assessee was its permanent establishment--No income arose or accrued to holding company through its permanent establishment in India in respect of sales made in India--Assessee could not be treated as in default--Payments made by assessee to holding company for goods not tax deductible--Allowable as deduction--Notices issued to assessee under sections 148 and 201(1)/(1A)--Liable to be quashed-- Samsung India Electronics Pvt. Ltd. v. Deputy Director of Income-tax (International Taxation) (Delhi) . . . 103

S. 197 --Deduction of tax at source--Rent--Scope of expression--Provision of passive infrastructure facilities to mobile operators by assessee--Towers are neutral platform without which mobile operators cannot operate--Dominant intention is use of equipment or plant or machinery--Amounts to renting of plant and machinery--That equipment housed in premises incidental and not a renting of premises--Tax deduction at source to be at rate prescribed in section 194-I(a)-- Indus Towers Ltd. v. CIT (Delhi) . . . 114

S. 201(1), (1A) --Reassessment--Deduction of tax at source--Assessee importing raw materials from foreign holding company under “high seas sales†--Order of Dispute Resolution Panel in transfer pricing proceedings not proposing any disallowance of payments made to foreign company under section 40(a)(i)--Reassessment of holding company pursuant to survey--Finding by Dispute Resolution Panel in case of holding company that it could not be taxed in respect of sales made in India through assessee on footing that assessee was its permanent establishment--No income arose or accrued to holding company through its permanent establishment in India in respect of sales made in India--Assessee could not be treated as in default--Payments made by assessee to holding company for goods not tax deductible--Allowable as deduction--Notices issued to assessee under sections 148 and 201(1)/(1A)--Liable to be quashed-- Samsung India Electronics Pvt. Ltd. v. Deputy Director of Income-tax (International Taxation) (Delhi) . . . 103

S. 234A --Advance tax--Interest--Stock appreciation rights--Employer bound to deduct tax at source--No question of employee paying advance tax--Employee entitled to take into account amount of tax deductible though not actually deducted-- CIT v. Anil Kumar Nehru (Bom) . . . 26

S. 234B --Advance tax--Interest--Stock appreciation rights--Employer bound to deduct tax at source--No question of employee paying advance tax--Employee entitled to take into account amount of tax deductible though not actually deducted-- CIT v. Anil Kumar Nehru (Bom) . . . 26

S. 234C --Advance tax--Interest--Stock appreciation rights--Employer bound to deduct tax at source--No question of employee paying advance tax--Employee entitled to take into account amount of tax deductible though not actually deducted-- CIT v. Anil Kumar Nehru (Bom) . . . 26

S. 245D --Settlement of cases--Application for settlement--Duty of Settlement Commission--Settlement Commission must consider contentions of assessee and Revenue and reach an objective decision--Rejection of application without considering issues--Not valid-- MARC Bathing Luxuries Ltd. v. ITSC (Delhi) . . . 64

S. 254(2) --Appeal to Appellate Tribunal--Rectification of order by Tribunal--Application for rectification--Limitation--Starting point for limitation--Actual date of receipt of order of Tribunal-- Peterplast Synthetics P. Ltd. v. Asst. CIT (Guj) . . . 16

S. 260A --Appeal to High Court--Substantial question of law--Binding nature of findings of fact--Court to examine whether question involves merely finding of fact or legal effect of such proven facts or documents--Where question involves legal effect of proven facts or documents--Question of law arises-- CIT v. Dawoodi Bohra Jamat (SC). . . 31

S. 264 --Kar Vivad Samadhan Scheme--Condition precedent for claiming benefit--Pendency of proceedings--Designated authority not entitled to consider motive of assessee in seeking revision--Designated authority to consider only whether declarant eligible to file declaration in terms of Scheme--No power to reject declaration on ground relief claimed in revision petition not within scope of jurisdiction--Designated authority to process declarations filed by assessees-- Y. V. Chander v. Union of India (AP) . . . 190

S. 271(1)(c) --Penalty--Concealment of income--Deduction on account of interest claimed knowingly on wrong basis--Furnishing inaccurate particulars to avoid liability to pay tax on that basis--No evidence that inaccurate particulars furnished accidentally or by mistake--Penalty rightly imposed-- Gourav Goenka v. Asst. CIT (Cal) . . . 186

S. 271D --Penalty--Loan or deposit in cash exceeding prescribed limit--Several transactions above Rs. 20,000--Defence that person who was in charge of branch not well versed with income-tax law--Assessee expected to know person who maintains day-to-day administration--No consistency in explanation of assessee--Assessee to explain transactions of Rs. 20,000 and above before Assessing Officer-- N. S. S. Karayogam v. CIT (Ker) . . . 81