ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB)) -- PRINT AND ONLINE EDITION
SUBJECT INDEX TO CASES REPORTED
International transactions --Arm’s length price--Determination--Transactional net margin method--That associated enterprise had suffered losses and there was no intention of shifting of profits outside India not relevant--“Product similarity†to be seen first before “functional similarity†--Comparability analysis can include uncontrolled transactions in different products involving similar functions--Current financial year’s data alone relevant--Arm’s length price can be computed on basis of single comparable--Finding of only one comparable does not mean Transfer Pricing Officer should do more research--Controlled transactions can be taken into account but filter to be applied in respect of related party transactions--Assessing Officer may consider “internal comparables†but after certain adjustments--Whether cost of production of trial batches of new range of glass mosaics not normal cost and to be excluded--Matter remanded--Transfer pricing adjustment only in respect of value of international transactions--Income-tax Act, 1961, ss. 92(3), 92CA(3)--Income-tax Rules, 1962, r. 10D(2)-- Pino Bisazza Glass P. Ltd. v. Assistant Commissioner of Income-tax (Ahmedabad) . . . 537
----Arm’s length price--Transactional net margin method--Selection of comparables--Power of Transfer Pricing Officer to invoke provisions of section 133(6) to collect information--Information so gathered should be shared with assessee so that it may file objections--Income-tax Act, 1961, s. 133(6)-- Pino Bisazza Glass P. Ltd. v. Assistant Commissioner of Income-tax (Ahmedabad) . . . 537
Volume 31 : Part 5 (Issue dated : 12-5-2014)
SUBJECT INDEX TO CASES REPORTED
Appeal to Commissioner (Appeals) --General instructions to Assessing Officer--Not binding--Does not amount to setting aside of order of Assessing Officer--Income-tax Act, 1961-- Suresh Nanda v. Assistant CIT (Delhi) . . . 620
Assessment --Addition on protective basis--Finding that assessee separate from other entity--Addition on protective basis not permissible--Income-tax Act, 1961-- Suresh Nanda v. Assistant CIT (Delhi) . . . 620
Business expenditure --Depreciation--Expenditure on renovation of leased premises--Lease for a period of nine years--Retrieval test not applicable--Capital expenditure incurred on civil works and flooring not allowable as deduction but to be capitalised--Income-tax Act, 1961, s. 32, Explanation 1 -- Rohit Bal Designs P. Ltd. v. Deputy CIT (Delhi) . . . 614
----Disallowance--Excessive or unreasonable payments--Foreign travel expenses--Members of family company undertaking foreign tours jointly every year to places of tourist attraction--Absence of details of expenditure incurred by using purchased foreign currency and absence of detailed tour reports with supporting materials--Disallowance warranted--That some business purpose involved in foreign tours not ruled out--Disallowance of 20 per cent. of expenses reasonable--Income-tax Act, 1961, s. 40A(2)-- Assistant CIT v. M. M. Publications Ltd. (Cochin) . . . 569
Business income --Sale of land--Intention of assessee at time of purchase of property, mode of purchase and other factors to be ascertained--Matter remanded--Income-tax Act, 1961-- Deputy CIT v. Smt. Thankamma Simon (Cochin) . . . 595
Capital gains --Business--Business income or capital gains--Purchase and sale of property--Purchase of property in name of individual--Sale of property after eight years--Assessee intending to possess property as owner--Profit arising out of sale of property to be treated as capital gains--Income-tax Act, 1961, ss. 28, 45-- Deputy CIT v. Smt. Thankamma Simon (Cochin) . . . 595
----Sale of land--Land cultivated with plantain, tapioca and pineapple--Land classified as wetland in records of State Government--Usage by purchaser does not determine character of land in hands of assessee--Land cannot be treated as capital asset profits on sale of which taxable--Income-tax Act, 1961-- Deputy CIT v. Smt. Thankamma Simon (Cochin) . . . 595
----Sale of land--Land maintained as agricultural land on which coconut trees grown--Development of land by purchaser into residential plots not ground for treating land as non-agricultural land--No capital gains arise on sale of land--Income-tax Act, 1961-- Deputy CIT v. Smt. Thankamma Simon (Cochin) . . . 595
Capital or revenue expenditure --Non-compete fee paid on termination of service of director--Restricting only one employee for period of one year--No enduring benefit for assessee--Non-compete fee in nature of revenue expenditure--Income-tax Act, 1961-- Hidelberg Cement India Ltd. v. Additional CIT (Mumbai) . . . 582
Cash credit --Debentures issued to foreign company--Assessee required to prove all ingredients in respect of debenture proceeds--Authorities to examine material furnished by assessee to prove creditworthiness--Matter remanded--Income-tax Act, 1961, s. 68-- Saurashtra Ferrous P. Ltd. v. Deputy CIT (Mumbai) . . . 560
Double taxation relief --Failure by authority to consider claim in respect of foreign taxes paid outside India--Matter remanded--Income-tax Act, 1961, ss. 90, 91-- Shipping Corporation of India Ltd. v. Additional CIT (Mumbai) . . . 545
Income --Assessee managing business of non-resident relative and receiving income from him--Assessee giving interest-free loan to his relatives--Funds transferred through banking channels--Assessee having sufficient funds at his disposal to provide interest free loans--Loans not bogus--Income-tax Act, 1961-- Deputy CIT v. Smt. Thankamma Simon (Cochin) . . . 595
----Indirect taxes not realised--Writing off service tax in profit and loss account allowable where it has already formed part of income--Unrealised service tax written off allowable as deduction--Income-tax Act, 1961, s. 28-- S. M. Kapoor and Co. and Mehra Khanna and Co. v. Assistant CIT (Mumbai) . . . 592
Income from undisclosed sources --Business--Sale of villas--Estimation of profit on basis of material found in search operations--Assessing Officer ought to have found out actual sale consideration received on sale--Matter remanded--Income-tax Act, 1961-- Deputy CIT v. Smt. Thankamma Simon (Cochin) . . . 595
----Seizure of cash from locker of third person--Payment made by purchaser of villa in pursuance of agreement with assessee--Payment not reflected in cash flow statement--Amounts received by third person on behalf of assessee in pursuance of agreement--Amount to be treated as assessee’s income--Income-tax Act, 1961-- Deputy CIT v. Smt. Thankamma Simon (Cochin) . . . 595
Non-resident --Individual--Stay of assessee in India exceeding 180 days due to illegal impounding of passport--Period from impounding of passport till release to be excluded while counting days of stay in India--Assessee to be treated as non-resident--Income-tax Act, 1961, s. 6-- Suresh Nanda v. Assistant CIT (Delhi) . . . 620
Search and seizure --Excess cash found at time of search--Cash flow statement filed by assessee--Opening balance of cash to be considered--Matter remanded--Income-tax Act, 1961-- Suresh Nanda v. Assistant CIT (Delhi) . . . 620
Shipping --Tonnage tax scheme--Assessee earning income from interest on fixed deposits and dividend from investment in shares--Income chargeable to tax in hands of assessee under head “Income from other sources†--Income-tax Act, 1961, ss. 57(iii), 115VJ-- Shipping Corporation of India Ltd. v. Additional CIT (Mumbai) . . . 545
----Tonnage tax scheme--Profit on sale of ships and fixed ships to be reduced from turnover of core shipping--Write back of excess provision and sundry credit balances to be included in turnover of core shipping--Income-tax Act, 1961-- Shipping Corporation of India Ltd. v. Additional CIT (Mumbai) . . . 545
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
S. 6 --Non-resident--Individual--Stay of assessee in India exceeding 180 days due to illegal impounding of passport--Period from impounding of passport till release to be excluded while counting days of stay in India--Assessee to be treated as non-resident-- Suresh Nanda v. Assistant CIT (Delhi) . . . 620
S. 28 --Capital gains--Business--Business income or capital gains--Purchase and sale of property--Purchase of property in name of individual--Sale of property after eight years--Assessee intending to possess property as owner--Profit arising out of sale of property to be treated as capital gains-- Deputy CIT v. Smt. Thankamma Simon (Cochin) . . . 595
----Income--Indirect taxes not realised--Writing off service tax in profit and loss account allowable where it has already formed part of income--Unrealised service tax written off allowable as deduction-- S. M. Kapoor and Co. and Mehra Khanna and Co. v. Assistant CIT (Mumbai) . . . 592
S. 32, Explanation 1 --Business expenditure--Depreciation--Expenditure on renovation of leased premises--Lease for a period of nine years--Retrieval test not applicable--Capital expenditure incurred on civil works and flooring not allowable as deduction but to be capitalised-- Rohit Bal Designs P. Ltd. v. Deputy CIT (Delhi) . . . 614
S. 40A(2) --Business expenditure--Disallowance--Excessive or unreasonable payments--Foreign travel expenses--Members of family company undertaking foreign tours jointly every year to places of tourist attraction--Absence of details of expenditure incurred by using purchased foreign currency and absence of detailed tour reports with supporting materials--Disallowance warranted--That some business purpose involved in foreign tours not ruled out--Disallowance of 20 per cent. of expenses reasonable-- Assistant CIT v. M. M. Publications Ltd. (Cochin) . . . 569
S. 45 --Capital gains--Business--Business income or capital gains--Purchase and sale of property--Purchase of property in name of individual--Sale of property after eight years--Assessee intending to possess property as owner--Profit arising out of sale of property to be treated as capital gains-- Deputy CIT v. Smt. Thankamma Simon (Cochin) . . . 595
S. 57(iii) --Shipping--Tonnage tax scheme--Assessee earning income from interest on fixed deposits and dividend from investment in shares--Income chargeable to tax in hands of assessee under head “Income from other sources†-- Shipping Corporation of India Ltd. v. Additional CIT (Mumbai) . . . 545
S. 68 --Cash credit--Debentures issued to foreign company--Assessee required to prove all ingredients in respect of debenture proceeds--Authorities to examine material furnished by assessee to prove creditworthiness--Matter remanded-- Saurashtra Ferrous P. Ltd. v. Deputy CIT (Mumbai) . . . 560
S. 90 --Double taxation relief--Failure by authority to consider claim in respect of foreign taxes paid outside India--Matter remanded-- Shipping Corporation of India Ltd. v. Additional CIT (Mumbai) . . . 545
S. 91 --Double taxation relief--Failure by authority to consider claim in respect of foreign taxes paid outside India--Matter remanded-- Shipping Corporation of India Ltd. v. Additional CIT (Mumbai) . . . 545
S. 115VJ --Shipping--Tonnage tax scheme--Assessee earning income from interest on fixed deposits and dividend from investment in shares--Income chargeable to tax in hands of assessee under head “Income from other sources†-- Shipping Corporation of India Ltd. v. Additional CIT (Mumbai) . . . 545
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