INCOME TAX REPORTS (ITR)--PRINT AND ONLINE EDITION
ONLINE EDITION
SUBJECT INDEX TO CASES REPORTED
HIGH COURTS
Exemption --Export--Exemption under section 10B--Computation of exemption--Law applicable--Effect of substitution of sub-section (4) w.e.f. 1-4-2001--Interest on deposits made in banks, sister concerns and exchange earners foreign currency account out of export income--Entitled to exemption under section 10B after 1-4-2001--Income-tax Act, 1961, s. 10B-- CIT v. Motorola India Electronics P. Ltd. (Karn). . .499
PRINT EDITION
ITR Volume 364 : Part 2 (Issue dated : 9-6-2014)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
SUPREME COURT
Exemption --Educational institution--Registration--Rejection of application for certificate on ground entire income not used for educational purposes--Appeal--Supreme Court--Objects of society since amended--Order of High Court set aside and liberty granted to apply for registration afresh for assessment years in question with amended objects--Income-tax Act, 1961, s. 10(23C)(vi)-- Om Prakash Shiksha Prasar Samiti v. Chief CIT . . . 329
HIGH COURTS
Assessment --Best judgment assessment--Limitation--Failure to issue notice under section 143(2)--Failure to issue notice of hearing before making best judgment assessment--Concurrent finding that assessment ante-dated and time barred--Conclusion reached by Tribunal based on appreciation of pure questions of fact--Income-tax Act, 1961, ss. 143(2), 144-- CIT v. Amarchand Sharma and Udani (AP) . . . 203
Business expenditure --Disallowance--Payments on which tax deductible at source--Commission--Sales promotion scheme--Incentive offered on case to case basis to stockists/dealers/agents--Relationship between assessee and distributors/stockists was that of principal to principal--Distributors/stockists not acting on behalf of assessee--Not a commission payment within meaning of clause (i) of Explanation below section 194H--No disallowance could be made under section 40(a)(ia)--Income-tax Act, 1961, ss. 40(a)(ia), 194H-- CIT v. Intervet India P. Ltd. (Bom) . . . 238
----Pharmaceutical company--Deposit made by assessee of excess price charged for drugs over and above price fixed by Government--Statutory liability--Allowable--Income-tax Act, 1961, s. 37-- CIT v. Warner Hindustan Ltd. (AP) . . . 208
Deduction of tax at source --Non-resident--Taxability in India--Non-resident agent of artistes in foreign countries engaged by assessee to bring foreign artistes to perform in India--No participation of agent in event organised by assessee as an artiste--Agent’s commission not taxable in India--Income-tax Act, 1961, s. 201--Double Taxation Avoidance Agreement between India and U. K., arts. 7, 18-- Director of Income-tax (International Taxation) v. Wizcraft International Entertainment P. Ltd. (Bom) . . . 227
Depreciation --Factory building--Creche for children of women employees within factory compound--Utilised in the process of manufacturing of products--Entitled to depreciation at ten per cent.--Income-tax Act, 1961-- CIT v. Warner Hindustan Ltd. (AP) . . . 208
Double taxation relief --Mutual agreement procedure--Not relevant for deciding whether permanent establishment existed--Especially where foreign Government expresses reservations on point--Double Taxation Avoidance Agreement between India and the U. S. A., art. 27-- Director of Income-tax v. e-Funds IT Solution (Delhi) . . . 256
Kar Vivad Samadhan Scheme --Condition precedent for consideration of declaration--Pendency of proceedings--Appeal addressed to wrong officer by assessee and not disposed of on technical grounds--Receipt of appeal not denied--Designated authority ought to have intimated officer to return papers to enable assessee to file appeal before appropriate authority--Assessee not informed of its appeal not being accepted--Refusal to grant benefit under Scheme on ground appeal not filed before competent authority--Not justified--Authorities to consider declaration filed by assessee on merits--Finance (No. 2) Act, 1998, ss. 88, 89-- Radha Vinyl P. Ltd. v. CIT (AP) . . . 199
Loss --Set off--Advances written off and claimed as capital loss to be carried forward for set off for subsequent years--Advances not given in ordinary course of business--No claim as bad debts--No evidence to show that it was a case of an intercorporate deposit--Loan cannot capital loss--Income-tax Act, 1961, s. 2(14), (47)-- Crompton Greaves Ltd. v. Deputy CIT (Bom) . . . 244
Non-resident --Permanent establishment--Subsidiary company in India whether permanent establishment--Principles governing--Mutual agreement procedure not conclusive on existence of permanent establishment--No material to hold assessees had fixed place of business in India through which business of enterprise wholly or partly carried on--No finding that assessee had right to use premises belonging to Indian company, or that premises of Indian company were at its disposal--That Indian company provided services to assessee and was dependent for its earning upon assessee or that Indian company did not bear sufficient risk or that Indian subsidiary was reimbursed cost plus 16 per cent. not relevant test--Assignment or sub-contract to Indian company not factor to be applied to determine applicability of article 5(1)--Indian company separate entity and not permanent establishment merely because there was interaction or cross transactions between it and foreign principal--Indian company not authorised or habitually exercising authority to “conclude†contracts or maintaining stock or merchandise from which it delivered goods or merchandise on behalf of assessee--Transactions between assessee and Indian company at arm’s length and taxed on arm’s length principle--Employees of Indian company not to be treated as employees of assessee--Employees merely performing stewardship services--Indian company not permanent establishment of non-resident assessee--Income-tax Act, 1961, s. 9(1)(i)--Double Taxation Avoidance Agreement between India and the U. S. A., arts. 5(1), (2), (4), 7-- Director of Income-tax v. e-Funds IT Solution (Delhi) . . . 256
----Taxability in India--Double Taxation Avoidance Agreements--“Fees for technical services†--Definition--Scope of--Indian subsidiary company set up to provide services to overseas group entities--Secondment of employees of overseas entities to assist Indian company during initial year to ensure quality control and build skill set of Indian company’s employees--Amounts to provision of technical services and making available technical knowledge--Seconded employees continuing to remain on payroll of overseas entities--Overseas entities paying their salaries and Indian company thereafter reimbursing overseas employers--Reimbursement of salaries was payment for technical services--Payment accrued to overseas entities--Not a case of diversion of income by overriding title--Payments taxable in India and Indian company bound to deduct tax at source thereon--Income-tax Act, 1961, s. 195--Double Taxation Avoidance Agreement between India and the U. K., art. 13(4)--Double Taxation Avoidance Agreement between India and Canada, art. 12(4)-- Centrica India Offshore Pvt. Ltd. v. CIT (Delhi) . . . 336
Penalty --Concealment of income--Failure to disclose amount received on account of refundable empty bottle deposit either in profit and loss account or in balance-sheet--Concealment detected in search operations--Deliberate concealment on part of assessee--Receipt acknowledged as trading receipt in earlier years--Penalty justified--Unreconciled difference in balance-sheet--No penalty leviable in view wrong entries--Income-tax Act, 1961, s. 271(1)(c)-- Kuldeep Wines v. CIT (Appeals) (AP) . . . 195
Reassessment --Change of opinion--Assessee not filing returns and not subjected to regular assessment--Challenge to initiation of reassessment proceedings on ground of change of opinion not available--Mutual agreement procedure adopted and income of assessee partly taxed in India--Justification to initiate reassessment proceedings--Reasons recorded for 2000-01 and subsequent years identical--Reasons for all assessment years other than 2000-01 communicated and assessee aware of reasons for 2000-01--Failure to communicate reasons not prejudicial to assessee and does not affect validity of proceedings--Income-tax Act, 1961, ss. 143(3), 147, 148-- Director of Income-tax v. e-Funds IT Solution (Delhi) . . . 256
----Notice--Notice within four years--Industrial undertaking--Special deduction--Windmill--Issue of deduction under section 80-IA raised by Assessing Officer during assessment proceedings and responded to by assessee--That issue not discussed in assessment order not material--Reopening of assessment on premise that deduction wrongly allowed--Not permissible--Income-tax Act, 1961, ss. 80-IA(4), 147, 148-- CIT v. Prima Paper and Engineering Industry (Bom) . . . 222
----Notice--Validity--Notice after four years--Condition precedent--Failure to disclose material facts necessary for assessment--Industrial undertaking--Special deduction--Allocation of common expenditure between section 80-IB unit and non-section 80-IB unit disclosed--Deduction allowed after considering material--Notice after four years to withdraw special deduction--Notice not valid--Income-tax Act, 1961, ss. 147, 148-- Lalitha Chem Industries P. Ltd. v. Deputy CIT (Bom) . . . 213
----Notice within four years--Export--Exemption--Failure to bring proceeds of export into India within six months from end of assessment year--Assessee declaring its book profits after reducing amount of deduction under section 10AA during original proceedings--Both issues not subject matter of consideration in original assessment proceedings--Reasonable belief that income chargeable to tax has escaped assessment--Income-tax Act, 1961, ss. 10AA, 147, 148-- Eleganza Jewellery Ltd. v. CIT (Bom) . . . 232
AUTHORITY FOR ADVANCE RULINGS
Non-resident --Long-term capital gains--Rate of tax--Sale of shares in Indian company listed on stock exchange and held for more than 12 months--Tax leviable at lower rate of ten per cent.--Income-tax Act, 1961, ss. 112(1), prov., 195-- Pan-Asia iGATE Solutions, In re . . . 331
----Taxability in India--Double taxation avoidance--Agreements specific to two contracting countries--Protocol to Agreement providing that India shall limit its taxation at source for items mentioned in accordance with other Agreements--Effect--Applies only to rate or scope--Fees for technical services--“Make available†clause in other Agreements cannot be imported--Income-tax Act, 1961, ss. 9(1)(vii), 195--Double Taxation Avoidance Agreement between India and France, art. 13-- Steria (India) Ltd. , In re . . . 381
----Taxability in India--Fees for technical services--Resident of Sri Lanka appointed as “resident executive†for Indian branch of U. K. entity for promotion of sales and brand name of employer in Sri Lanka--Job description fitting in with marketing executive not technical service--Payments made by remittance to bank account in Sri Lanka--Services rendered outside India by non-resident--Payments of remuneration and reimbursement of expenses not taxable in India--Income-tax Act, 1961, s. 9(1)(vii)--Double Taxation Avoidance Agreement between India and Sri Lanka, art. 14-- Oxford University Press , In re . . . 251
Perquisite --Superannuation scheme for employees--Defined benefit plan--Contributions to scheme made by employer for all eligible employees in lump sum calculated on actuarial valuation based on several underlying assumptions--Employee does not get vested right at time of contribution to fund by employer--Tax not required to be deducted at source on contribution to superannuation fund--Income-tax Act, 1961, ss. 10(10CC), 17(2), 192-- The Royal Bank of Scotland, N. V., In re . . . 373
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Double Taxation Avoidance Agreement between India and Canada :
Art. 12(4) --Non-resident--Taxability in India--Double Taxation Avoidance Agreements--“Fees for technical services†--Definition--Scope of--Indian subsidiary company set up to provide services to overseas group entities--Secondment of employees of overseas entities to assist Indian company during initial year to ensure quality control and build skill set of Indian company’s employees--Amounts to provision of technical services and making available technical knowledge--Seconded employees continuing to remain on payroll of overseas entities--Overseas entities paying their salaries and Indian company thereafter reimbursing overseas employers--Reimbursement of salaries was payment for technical services--Payment accrued to overseas entities--Not a case of diversion of income by overriding title--Payments taxable in India and Indian company bound to deduct tax at source thereon-- Centrica India Offshore Pvt. Ltd. v. CIT (Delhi) . . . 336
Double Taxation Avoidance Agreement between India and France :
Art. 13 --Non-resident--Taxability in India--Double taxation avoidance--Agreements specific to two contracting countries--Protocol to Agreement providing that India shall limit its taxation at source for items mentioned in accordance with other Agreements--Effect--Applies only to rate or scope--Fees for technical services--“Make available†clause in other Agreements cannot be imported-- Steria (India) Ltd. , In re (AAR). . . 381
Double Taxation Avoidance Agreement between India and Sri Lanka :
Art. 14 --Non-resident--Taxability in India--Fees for technical services--Resident of Sri Lanka appointed as “resident executive†for Indian branch of U. K. entity for promotion of sales and brand name of employer in Sri Lanka--Job description fitting in with marketing executive not technical service--Payments made by remittance to bank account in Sri Lanka--Services rendered outside India by non-resident--Payments of remuneration and reimbursement of expenses not taxable in India-- Oxford University Press , In re (AAR). . . 251
Double Taxation Avoidance Agreement between India and U. K. :
Art. 7 --Deduction of tax at source--Non-resident--Taxability in India--Non-resident agent of artistes in foreign countries engaged by assessee to bring foreign artistes to perform in India--No participation of agent in event organised by assessee as an artiste--Agent’s commission not taxable in India-- Director of Income-tax (International Taxation) v. Wizcraft International Entertainment P. Ltd. (Bom) . . . 227
Art. 13(4) --Non-resident--Taxability in India--Double Taxation Avoidance Agreements--“Fees for technical services†--Definition--Scope of--Indian subsidiary company set up to provide services to overseas group entities--Secondment of employees of overseas entities to assist Indian company during initial year to ensure quality control and build skill set of Indian company’s employees--Amounts to provision of technical services and making available technical knowledge--Seconded employees continuing to remain on payroll of overseas entities--Overseas entities paying their salaries and Indian company thereafter reimbursing overseas employers--Reimbursement of salaries was payment for technical services--Payment accrued to overseas entities--Not a case of diversion of income by overriding title--Payments taxable in India and Indian company bound to deduct tax at source thereon-- Centrica India Offshore Pvt. Ltd. v. CIT (Delhi) . . . 336
Art. 18 --Deduction of tax at source--Non-resident--Taxability in India--Non-resident agent of artistes in foreign countries engaged by assessee to bring foreign artistes to perform in India--No participation of agent in event organised by assessee as an artiste--Agent’s commission not taxable in India-- Director of Income-tax (International Taxation) v. Wizcraft International Entertainment P. Ltd. (Bom) . . . 227
Double Taxation Avoidance Agreement between India and the U. S. A. :
Arts. 5(1), (2), (4), 7 --Non-resident--Permanent establishment--Subsidiary company in India whether permanent establishment--Principles governing--Mutual agreement procedure not conclusive on existence of permanent establishment--No material to hold assessees had fixed place of business in India through which business of enterprise wholly or partly carried on--No finding that assessee had right to use premises belonging to Indian company, or that premises of Indian company were at its disposal--That Indian company provided services to assessee and was dependent for its earning upon assessee or that Indian company did not bear sufficient risk or that Indian subsidiary was reimbursed cost plus 16 per cent. not relevant test--Assignment or sub-contract to Indian company not factor to be applied to determine applicability of article 5(1)--Indian company separate entity and not permanent establishment merely because there was interaction or cross transactions between it and foreign principal--Indian company not authorised or habitually exercising authority to “conclude†contracts or maintaining stock or merchandise from which it delivered goods or merchandise on behalf of assessee--Transactions between assessee and Indian company at arm’s length and taxed on arm’s length principle--Employees of Indian company not to be treated as employees of assessee--Employees merely performing stewardship services--Indian company not permanent establishment of non-resident assessee-- Director of Income-tax v. e-Funds IT Solution (Delhi) . . . 256
Art. 27 --Double taxation relief--Mutual agreement procedure--Not relevant for deciding whether permanent establishment existed--Especially where foreign Government expresses reservations on point-- Director of Income-tax v. e-Funds IT Solution (Delhi) . . . 256
Finance (No. 2) Act, 1998 :
Ss. 88, 89 --Kar Vivad Samadhan Scheme--Condition precedent for consideration of declaration--Pendency of proceedings--Appeal addressed to wrong officer by assessee and not disposed of on technical grounds--Receipt of appeal not denied--Designated authority ought to have intimated officer to return papers to enable assessee to file appeal before appropriate authority--Assessee not informed of its appeal not being accepted--Refusal to grant benefit under Scheme on ground appeal not filed before competent authority--Not justified--Authorities to consider declaration filed by assessee on merits-- Radha Vinyl P. Ltd. v. CIT (AP) . . . 199
Income-tax Act, 1961 :
S. 2(14) --Loss--Set off--Advances written off and claimed as capital loss to be carried forward for set off for subsequent years--Advances not given in ordinary course of business--No claim as bad debts--No evidence to show that it was a case of an intercorporate deposit--Loan cannot capital loss-- Crompton Greaves Ltd. v. Deputy CIT (Bom) . . . 244
S. 2(47) --Loss--Set off--Advances written off and claimed as capital loss to be carried forward for set off for subsequent years--Advances not given in ordinary course of business--No claim as bad debts--No evidence to show that it was a case of an intercorporate deposit--Loan cannot capital loss-- Crompton Greaves Ltd. v. Deputy CIT (Bom) . . . 244
S. 9(1)(i) --Non-resident--Permanent establishment--Subsidiary company in India whether permanent establishment--Principles governing--Mutual agreement procedure not conclusive on existence of permanent establishment--No material to hold assessees had fixed place of business in India through which business of enterprise wholly or partly carried on--No finding that assessee had right to use premises belonging to Indian company, or that premises of Indian company were at its disposal--That Indian company provided services to assessee and was dependent for its earning upon assessee or that Indian company did not bear sufficient risk or that Indian subsidiary was reimbursed cost plus 16 per cent. not relevant test--Assignment or sub-contract to Indian company not factor to be applied to determine applicability of article 5(1)--Indian company separate entity and not permanent establishment merely because there was interaction or cross transactions between it and foreign principal--Indian company not authorised or habitually exercising authority to “conclude†contracts or maintaining stock or merchandise from which it delivered goods or merchandise on behalf of assessee--Transactions between assessee and Indian company at arm’s length and taxed on arm’s length principle--Employees of Indian company not to be treated as employees of assessee--Employees merely performing stewardship services--Indian company not permanent establishment of non-resident assessee-- Director of Income-tax v. e-Funds IT Solution (Delhi) . . . 256
S. 9(1)(vii) --Non-resident--Taxability in India--Double taxation avoidance--Agreements specific to two contracting countries--Protocol to Agreement providing that India shall limit its taxation at source for items mentioned in accordance with other Agreements--Effect--Applies only to rate or scope--Fees for technical services--“Make available†clause in other Agreements cannot be imported-- Steria (India) Ltd. , In re (AAR). . . 381
----Non-resident--Taxability in India--Fees for technical services--Resident of Sri Lanka appointed as “resident executive†for Indian branch of U. K. entity for promotion of sales and brand name of employer in Sri Lanka--Job description fitting in with marketing executive not technical service--Payments made by remittance to bank account in Sri Lanka--Services rendered outside India by non-resident--Payments of remuneration and reimbursement of expenses not taxable in India-- Oxford University Press , In re (AAR). . . 251
S. 10(10CC) --Perquisite--Superannuation scheme for employees--Defined benefit plan--Contributions to scheme made by employer for all eligible employees in lump sum calculated on actuarial valuation based on several underlying assumptions--Employee does not get vested right at time of contribution to fund by employer--Tax not required to be deducted at source on contribution to superannuation fund-- The Royal Bank of Scotland, N. V., In re (AAR). . . 373
S. 10(23C)(vi) --Exemption--Educational institution--Registration--Rejection of application for certificate on ground entire income not used for educational purposes--Appeal--Supreme Court--Objects of society since amended--Order of High Court set aside and liberty granted to apply for registration afresh for assessment years in question with amended objects-- Om Prakash Shiksha Prasar Samiti v. Chief CIT (SC). . . 329
S. 10AA --Reassessment--Notice within four years--Export--Exemption--Failure to bring proceeds of export into India within six months from end of assessment year--Assessee declaring its book profits after reducing amount of deduction under section 10AA during original proceedings--Both issues not subject matter of consideration in original assessment proceedings--Reasonable belief that income chargeable to tax has escaped assessment-- Eleganza Jewellery Ltd. v. CIT (Bom) . . . 232
S. 17(2) --Perquisite--Superannuation scheme for employees--Defined benefit plan--Contributions to scheme made by employer for all eligible employees in lump sum calculated on actuarial valuation based on several underlying assumptions--Employee does not get vested right at time of contribution to fund by employer--Tax not required to be deducted at source on contribution to superannuation fund-- The Royal Bank of Scotland, N. V., In re (AAR). . . 373
S. 37 --Business expenditure--Pharmaceutical company--Deposit made by assessee of excess price charged for drugs over and above price fixed by Government--Statutory liability--Allowable-- CIT v. Warner Hindustan Ltd. (AP) . . . 208
S. 40(a)(ia) --Business expenditure--Disallowance--Payments on which tax deductible at source--Commission--Sales promotion scheme--Incentive offered on case to case basis to stockists/dealers/agents--Relationship between assessee and distributors/stockists was that of principal to principal--Distributors/stockists not acting on behalf of assessee--Not a commission payment within meaning of clause (i) of Explanation below section 194H--No disallowance could be made under section 40(a)(ia)-- CIT v. Intervet India P. Ltd. (Bom) . . . 238
S. 80-IA(4) --Reassessment--Notice--Notice within four years--Industrial undertaking--Special deduction--Windmill--Issue of deduction under section 80-IA raised by Assessing Officer during assessment proceedings and responded to by assessee--That issue not discussed in assessment order not material--Reopening of assessment on premise that deduction wrongly allowed--Not permissible-- CIT v. Prima Paper and Engineering Industry (Bom) . . . 222
S. 112(1), prov. --Non-resident--Long-term capital gains--Rate of tax--Sale of shares in Indian company listed on stock exchange and held for more than 12 months--Tax leviable at lower rate of ten per cent.-- Pan-Asia iGATE Solutions, In re (AAR). . . 331
S. 143(2) --Assessment--Best judgment assessment--Limitation--Failure to issue notice under section 143(2)--Failure to issue notice of hearing before making best judgment assessment--Concurrent finding that assessment ante-dated and time barred--Conclusion reached by Tribunal based on appreciation of pure questions of fact-- CIT v. Amarchand Sharma and Udani (AP) . . . 203
S. 143(3) --Reassessment--Change of opinion--Assessee not filing returns and not subjected to regular assessment--Challenge to initiation of reassessment proceedings on ground of change of opinion not available--Mutual agreement procedure adopted and income of assessee partly taxed in India--Justification to initiate reassessment proceedings--Reasons recorded for 2000-01 and subsequent years identical--Reasons for all assessment years other than 2000-01 communicated and assessee aware of reasons for 2000-01--Failure to communicate reasons not prejudicial to assessee and does not affect validity of proceedings-- Director of Income-tax v. e-Funds IT Solution (Delhi) . . . 256
S. 144 --Assessment--Best judgment assessment--Limitation--Failure to issue notice under section 143(2)--Failure to issue notice of hearing before making best judgment assessment--Concurrent finding that assessment ante-dated and time barred--Conclusion reached by Tribunal based on appreciation of pure questions of fact-- CIT v. Amarchand Sharma and Udani (AP) . . . 203
S. 147 --Reassessment--Change of opinion--Assessee not filing returns and not subjected to regular assessment--Challenge to initiation of reassessment proceedings on ground of change of opinion not available--Mutual agreement procedure adopted and income of assessee partly taxed in India--Justification to initiate reassessment proceedings--Reasons recorded for 2000-01 and subsequent years identical--Reasons for all assessment years other than 2000-01 communicated and assessee aware of reasons for 2000-01--Failure to communicate reasons not prejudicial to assessee and does not affect validity of proceedings-- Director of Income-tax v. e-Funds IT Solution (Delhi) . . . 256
----Reassessment--Notice--Notice within four years--Industrial undertaking--Special deduction--Windmill--Issue of deduction under section 80-IA raised by Assessing Officer during assessment proceedings and responded to by assessee--That issue not discussed in assessment order not material--Reopening of assessment on premise that deduction wrongly allowed--Not permissible-- CIT v. Prima Paper and Engineering Industry (Bom) . . . 222
----Reassessment--Notice--Validity--Notice after four years--Condition precedent--Failure to disclose material facts necessary for assessment--Industrial undertaking--Special deduction--Allocation of common expenditure between section 80-IB unit and non-section 80-IB unit disclosed--Deduction allowed after considering material--Notice after four years to withdraw special deduction--Notice not valid-- Lalitha Chem Industries P. Ltd. v. Deputy CIT (Bom) . . . 213
----Reassessment--Notice within four years--Export--Exemption--Failure to bring proceeds of export into India within six months from end of assessment year--Assessee declaring its book profits after reducing amount of deduction under section 10AA during original proceedings--Both issues not subject matter of consideration in original assessment proceedings--Reasonable belief that income chargeable to tax has escaped assessment-- Eleganza Jewellery Ltd. v. CIT (Bom) . . . 232
S. 148 --Reassessment--Change of opinion--Assessee not filing returns and not subjected to regular assessment--Challenge to initiation of reassessment proceedings on ground of change of opinion not available--Mutual agreement procedure adopted and income of assessee partly taxed in India--Justification to initiate reassessment proceedings--Reasons recorded for 2000-01 and subsequent years identical--Reasons for all assessment years other than 2000-01 communicated and assessee aware of reasons for 2000-01--Failure to communicate reasons not prejudicial to assessee and does not affect validity of proceedings-- Director of Income-tax v. e-Funds IT Solution (Delhi) . . . 256
----Reassessment--Notice--Notice within four years--Industrial undertaking--Special deduction--Windmill--Issue of deduction under section 80-IA raised by Assessing Officer during assessment proceedings and responded to by assessee--That issue not discussed in assessment order not material--Reopening of assessment on premise that deduction wrongly allowed--Not permissible-- CIT v. Prima Paper and Engineering Industry (Bom) . . . 222
----Reassessment--Notice--Validity--Notice after four years--Condition precedent--Failure to disclose material facts necessary for assessment--Industrial undertaking--Special deduction--Allocation of common expenditure between section 80-IB unit and non-section 80-IB unit disclosed--Deduction allowed after considering material--Notice after four years to withdraw special deduction--Notice not valid-- Lalitha Chem Industries P. Ltd. v. Deputy CIT (Bom) . . . 213
----Reassessment--Notice within four years--Export--Exemption--Failure to bring proceeds of export into India within six months from end of assessment year--Assessee declaring its book profits after reducing amount of deduction under section 10AA during original proceedings--Both issues not subject matter of consideration in original assessment proceedings--Reasonable belief that income chargeable to tax has escaped assessment-- Eleganza Jewellery Ltd. v. CIT (Bom) . . . 232
S. 192 --Perquisite--Superannuation scheme for employees--Defined benefit plan--Contributions to scheme made by employer for all eligible employees in lump sum calculated on actuarial valuation based on several underlying assumptions--Employee does not get vested right at time of contribution to fund by employer--Tax not required to be deducted at source on contribution to superannuation fund-- The Royal Bank of Scotland, N. V., In re (AAR). . . 373
S. 194H --Business expenditure--Disallowance--Payments on which tax deductible at source--Commission--Sales promotion scheme--Incentive offered on case to case basis to stockists/dealers/agents--Relationship between assessee and distributors/stockists was that of principal to principal--Distributors/stockists not acting on behalf of assessee--Not a commission payment within meaning of clause (i) of Explanation below section 194H--No disallowance could be made under section 40(a)(ia)-- CIT v. Intervet India P. Ltd. (Bom) . . . 238
S. 195 --Non-resident--Long-term capital gains--Rate of tax--Sale of shares in Indian company listed on stock exchange and held for more than 12 months--Tax leviable at lower rate of ten per cent.-- Pan-Asia iGATE Solutions, In re (AAR). . . 331
----Non-resident--Taxability in India--Double taxation avoidance--Agreements specific to two contracting countries--Protocol to Agreement providing that India shall limit its taxation at source for items mentioned in accordance with other Agreements--Effect--Applies only to rate or scope--Fees for technical services--“Make available†clause in other Agreements cannot be imported-- Steria (India) Ltd. , In re (AAR). . . 381
----Non-resident--Taxability in India--Double Taxation Avoidance Agreements--“Fees for technical services†--Definition--Scope of--Indian subsidiary company set up to provide services to overseas group entities--Secondment of employees of overseas entities to assist Indian company during initial year to ensure quality control and build skill set of Indian company’s employees--Amounts to provision of technical services and making available technical knowledge--Seconded employees continuing to remain on payroll of overseas entities--Overseas entities paying their salaries and Indian company thereafter reimbursing overseas employers--Reimbursement of salaries was payment for technical services--Payment accrued to overseas entities--Not a case of diversion of income by overriding title--Payments taxable in India and Indian company bound to deduct tax at source thereon-- Centrica India Offshore Pvt. Ltd. v. CIT (Delhi) . . . 336
S. 201 --Deduction of tax at source--Non-resident--Taxability in India--Non-resident agent of artistes in foreign countries engaged by assessee to bring foreign artistes to perform in India--No participation of agent in event organised by assessee as an artiste--Agent’s commission not taxable in India-- Director of Income-tax (International Taxation) v. Wizcraft International Entertainment P. Ltd. (Bom) . . . 227
S. 271(1)(c) --Penalty--Concealment of income--Failure to disclose amount received on account of refundable empty bottle deposit either in profit and loss account or in balance-sheet--Concealment detected in search operations--Deliberate concealment on part of assessee--Receipt acknowledged as trading receipt in earlier years--Penalty justified--Unreconciled difference in balance-sheet--No penalty leviable in view wrong entries-- Kuldeep Wines v. CIT (Appeals) (AP) . . . 195
