ITR Volume 366 : Part 1 (Issue dated : 11-8-2014)

INCOME TAX REPORTS (ITR)--PRINT AND ONLINE EDITION ONLINE EDITION SUBJECT INDEX TO CASES REPORTED HIGH COURTS Capital gains --Exemption--Purchase of residential property from net consideration--Income-tax Act, 1961, s. 54-- CIT v. Raman Kumar Suri (Bom) . . . 127 ----Long-term capital gains--No provision for taxing deemed income--Sale of inherited property by assessee and his brother--Memorandum of understanding based on will and testament of their father as to manner in which consideration to be shared--Assessee’s brother to receive bigger share--Assessing Officer not entitled to deem consideration shared equally--Additional amount not includible in hands of assessee--Income-tax Act, 1961, s. 54--CIT v. Raman Kumar Suri (Bom) . . . 127 ----Property inherited--Cost inflation index--To be determined with reference to year in which previous holder first held property-- CIT v. Raman Kumar Suri (Bom) . . . 127   PRINT EDITION ITR Volume 366 : Part 1 (Issue dated : 11-8-2014) SUBJECT INDEX TO CASES REPORTED IN THIS PART HIGH COURTS Appeal to Commissioner (Appeals) --Doctrine of merger--Competency of appeal--Rejection of revision petition by Commissioner--Order of Assessing Officer merging in that of Commissioner--Appeal not maintainable to Commissioner (Appeals) from order of Assessing Officer--Income-tax Act, 1961-- Jaskaran Singh v. Union of India (P&H) . . . 158 Association of persons --Essential features--Must be constituted by two or more persons--Constituent members must have come together for a common purpose--Association must move by common action--Co-operation and association amongst constituent members must not be perfunctory or merely in form--Association amongst members must be real and substantial--Income-tax Act, 1961-- CTCI Overseas Corporation Ltd. v. DIT (International Taxation) (Delhi) . . . 33 Business expenditure --Bond registration charges--Revenue expenditure--Allowable--Income-tax Act, 1961, s. 37(1)-- CIT v. Hindustan Organics Chemicals Ltd. (Bom) . . . 1 ----Capital or revenue expenditure--Amortisation of expenses--Business of manufacture of alcoholic beverages--Restructuring of business by transfer of manufacturing facility and outsourcing production of alcoholic beverages--Not a case of closure of business--Severance pay--Not expenditure incurred for closing down business--One-fifth of expenditure allowable in current assessment year and in each of four subsequent assessment years--Income-tax Act, 1961, ss. 35DDA, 37(1)-- CIT v. Diageo India P. Ltd.(Bom) . . . 7 ----Deduction on actual payment--Contribution to provident fund--Delayed payment of employees’ contribution--Amendment to remove difficulty has retrospective effect--Deductible--Income-tax Act, 1961, s. 43B-- CIT v. Hindustan Organics Chemicals Ltd. (Bom) . . . 1 ----Disallowance--Payments in cash exceeding specified limit--Exclusion from disallowance--Section 40A(3) must be read with rule 6DD--Payments in cash at the request of the payee--Transaction genuine--Reasonable explanation for payments in cash--Payments could not be disallowed--Income-tax Act, 1961, s. 40A(3)--Income-tax Rules, 1962, r. 6DD-- Anupam Tele Services v. ITO (Guj) . . . 122 Capital gains --Exemption--Investment of net consideration in purchase of a residential house--Purchase of two flats under two distinct agreements and from different sellers--One common kitchen for both flats--Flats converted into one unit for purpose of residence--Assessee entitled to deduction--Income-tax Act, 1961, s. 54-- CIT v. Devdas Naik (Bom) . . . 12 Cash credit --Identity of investor and genuineness--Tests--Assessee receiving foreign remittances from two non-residents for purchase of property for them and making credit entries in its books of account--Assessing Officer finding foreign remittances not sent by two non-resident Indians but by two foreign companies--Tribunal remanding issue to Assessing Officer to afford opportunity to assessee whether these two companies owned by two non-resident Indians--Assessee neither appealing against remand nor seeking dilution of points on which Tribunal recorded finding after enquiry--Inability to secure confirmation or documentary proof in support of claim--Addition justified--Income-tax Act, 1961, s. 68-- Bon Sales P. Ltd. v. CIT (Delhi) . . . 44 ----Share application money--Notice under section 133(6) to eleven investors--Investors not submitting any confirmation and reporting far less income than the amounts invested--Assessee not discharging burden--Addition justified--Income-tax Act, 1961, s. 68-- CIT v.Empire Builtech P. Ltd. (Delhi) . . . 110 Charitable purpose --Depreciation--Computation of income of charitable trust--Computation in a commercial manner--Depreciation allowable--Income-tax Act, 1961, s. 11-- CIT v. Siliguri Regulated Market Committee (Cal) . . . 51 Exemption --Charitable purpose--Educational institution--Object of assessee to promote continuing education, training and research on various facets of management and related areas--Activities within definition “charitable purpose†--Eligible for exemption--Income-tax Act, 1961, ss. 2(15), 11-- DIT (Exemption) v. Ahmedabad Management Association(Guj) . . . 85 Fringe benefits tax --Contribution towards approved superannunation fund for employees--Employees in whose case contribution more than one lakh--Reduction of amount of exemption from aggregate and balance considered as taxable--No mistake in calculation of fringe benefit tax--Income-tax Act, 1961, ss. 115WB, 115WC, 263-- CIT v. UTI Bank Ltd.(Guj) . . . 154 Penalty --Concealment of income--Admission of appeal by High Court in respect of addition on which penalty based--Not an indication that issue is debatable one--Penalty should not automatically be deleted without any further reasons or grounds emerging from record--Matter remanded to Tribunal for decision afresh--Income-tax Act, 1961, s. 271(1)(c)-- CIT v.Dharamshi B Shah (Guj) . . . 140 Precedent --Effect of Supreme Court decision in Attar Singh Gurmukh Singh v. ITO [1991] 191 ITR 667 (SC)-- Anupam Tele Services v. ITO (Guj) . . . 122 Reassessment --Limitation--Exclusion from limitation--Effect of section 153--Finding or direction of appellate authority--Assessment of income in another year--Order not barred by limitation--Income-tax Act, 1961, s. 153-- CIT v. Glass Equipment (India) Ltd. (Cal) . . . 59 ----Notice--Capital gains--Exemption--Sale of agricultural land and investment in purchase of agricultural land--Claim thoroughly examined in original assessment--Reassessment denying exemption on ground what assessee sold was not an agricultural land--Change of opinion--Income-tax Act, 1961, ss. 147, 148-- Deepakbhai Ramjibhai Patel v. ITO (Guj) . . . 134 ----Notice--Change of opinion--Materials in respect of four companies and other documents put to assessee in course of original assessment proceedings--Notice relying on material already available prior to assessment--No valid reasons to believe--Notice not valid--Income-tax Act, 1961, ss. 147, 148-- Ralson India Ltd. v. Deputy CIT (Delhi) . . . 103 ----Notice--Order of Assessing Officer for subsequent year treating income as business income instead of as short-term capital gains reversed by appellate authorities--Reassessment for earlier year on basis of note of Assessing Officer--Not on basis of new information but reappreciation or review of facts--Notice not valid--Income-tax Act, 1961, ss. 147, 148-- Mohan Gupta (HUF) v. CIT (Delhi) . . . 115 ----Notice after four years--Condition precedent--No allegation in reasons recorded that there was any failure on part of assessee to disclose fully and truly all material facts necessary for assessment--Reassessment not permissible--Income-tax Act, 1961, ss. 147, 148-- CIT v.Ankit C. Maheshwari (Guj) . . . 146 Search and seizure --Block assessment--Block period--Definition--Period up to which “requisition was made†--Not to be extended to date on which materials received pursuant to requisition--Date on which requisition made to be taken into account and not date of execution of warrant of authorisation--Income-tax Act, 1961, s. 158B(a)-- Sanjay Gupta v.CIT (Delhi) . . . 18 ----Block assessment--Undisclosed income--Remand for verification whether amounts noted on documents reflected contributions--Not perverse--Finding that additions proposed would be covered by disclosure and ad hoc additions already made--Finding that certain documents were clear and had expressly mentioned receipts of money--No flaw in reasoning--Income-tax Act, 1961, s. 158BC-- CIT v. V. K. Bhatnagar (Delhi) . . . 37 ----Order for retention of documents--Retention of seized documents beyond 15 days by officer other than Income-tax Officer having jurisdiction over assessee--Not valid--Income-tax Act, 1961, s. 132-- Mahesh Kumar Goyal v. DIT (Investigation) (Cal) . . . 15   SECTIONWISE INDEX TO CASES REPORTED IN THIS PART Income-tax Act, 1961 : S. 2(15) --Exemption--Charitable purpose--Educational institution--Object of assessee to promote continuing education, training and research on various facets of management and related areas--Activities within definition “charitable purpose†--Eligible for exemption--DIT (Exemption) v. Ahmedabad Management Association (Guj) . . . 85 S. 11 --Charitable purpose--Depreciation--Computation of income of charitable trust--Computation in a commercial manner--Depreciation allowable-- CIT v. Siliguri Regulated Market Committee (Cal) . . . 51 ----Exemption--Charitable purpose--Educational institution--Object of assessee to promote continuing education, training and research on various facets of management and related areas--Activities within definition “charitable purpose†--Eligible for exemption-- DIT (Exemption) v. Ahmedabad Management Association (Guj) . . . 85 S. 35DDA --Business expenditure--Capital or revenue expenditure--Amortisation of expenses--Business of manufacture of alcoholic beverages--Restructuring of business by transfer of manufacturing facility and outsourcing production of alcoholic beverages--Not a case of closure of business--Severance pay--Not expenditure incurred for closing down business--One-fifth of expenditure allowable in current assessment year and in each of four subsequent assessment years-- CIT v. Diageo India P. Ltd. (Bom) . . . 7 S. 37(1) --Business expenditure--Bond registration charges--Revenue expenditure--Allowable-- CIT v. Hindustan Organics Chemicals Ltd. (Bom) . . . 1 ----Business expenditure--Capital or revenue expenditure--Amortisation of expenses--Business of manufacture of alcoholic beverages--Restructuring of business by transfer of manufacturing facility and outsourcing production of alcoholic beverages--Not a case of closure of business--Severance pay--Not expenditure incurred for closing down business--One-fifth of expenditure allowable in current assessment year and in each of four subsequent assessment years-- CIT v. Diageo India P. Ltd. (Bom) . . . 7 S. 40A(3) --Business expenditure--Disallowance--Payments in cash exceeding specified limit--Exclusion from disallowance--Section 40A(3) must be read with rule 6DD--Payments in cash at the request of the payee--Transaction genuine--Reasonable explanation for payments in cash--Payments could not be disallowed-- Anupam Tele Services v. ITO (Guj) . . . 122 S. 43B --Business expenditure--Deduction on actual payment--Contribution to provident fund--Delayed payment of employees’ contribution--Amendment to remove difficulty has retrospective effect--Deductible-- CIT v. Hindustan Organics Chemicals Ltd. (Bom) . . . 1 S. 54 --Capital gains--Exemption--Investment of net consideration in purchase of a residential house--Purchase of two flats under two distinct agreements and from different sellers--One common kitchen for both flats--Flats converted into one unit for purpose of residence--Assessee entitled to deduction-- CIT v. Devdas Naik (Bom) . . . 12 S. 68 --Cash credit--Identity of investor and genuineness--Tests--Assessee receiving foreign remittances from two non-residents for purchase of property for them and making credit entries in its books of account--Assessing Officer finding foreign remittances not sent by two non-resident Indians but by two foreign companies--Tribunal remanding issue to Assessing Officer to afford opportunity to assessee whether these two companies owned by two non-resident Indians--Assessee neither appealing against remand nor seeking dilution of points on which Tribunal recorded finding after enquiry--Inability to secure confirmation or documentary proof in support of claim--Addition justified-- Bon Sales P. Ltd. v. CIT (Delhi) . . . 44 ----Cash credit--Share application money--Notice under section 133(6) to eleven investors--Investors not submitting any confirmation and reporting far less income than the amounts invested--Assessee not discharging burden--Addition justified-- CIT v. Empire Builtech P. Ltd. (Delhi) . . . 110 S. 115WB --Fringe benefits tax--Contribution towards approved superannunation fund for employees--Employees in whose case contribution more than one lakh--Reduction of amount of exemption from aggregate and balance considered as taxable--No mistake in calculation of fringe benefit tax-- CIT v. UTI Bank Ltd. (Guj) . . . 154 S. 115WC --Fringe benefits tax--Contribution towards approved superannunation fund for employees--Employees in whose case contribution more than one lakh--Reduction of amount of exemption from aggregate and balance considered as taxable--No mistake in calculation of fringe benefit tax-- CIT v. UTI Bank Ltd. (Guj) . . . 154 S. 132 --Search and seizure--Order for retention of documents--Retention of seized documents beyond 15 days by officer other than Income-tax Officer having jurisdiction over assessee--Not valid-- Mahesh Kumar Goyal v. DIT (Investigation) (Cal) . . . 15 S. 147 --Reassessment--Notice--Capital gains--Exemption--Sale of agricultural land and investment in purchase of agricultural land--Claim thoroughly examined in original assessment--Reassessment denying exemption on ground what assessee sold was not an agricultural land--Change of opinion-- Deepakbhai Ramjibhai Patel v. ITO (Guj) . . . 134 ----Reassessment--Notice--Change of opinion--Materials in respect of four companies and other documents put to assessee in course of original assessment proceedings--Notice relying on material already available prior to assessment--No valid reasons to believe--Notice not valid-- Ralson India Ltd. v. Deputy CIT (Delhi) . . . 103 ----Reassessment--Notice--Order of Assessing Officer for subsequent year treating income as business income instead of as short-term capital gains reversed by appellate authorities--Reassessment for earlier year on basis of note of Assessing Officer--Not on basis of new information but reappreciation or review of facts--Notice not valid-- Mohan Gupta (HUF) v.CIT (Delhi) . . . 115 ----Reassessment--Notice after four years--Condition precedent--No allegation in reasons recorded that there was any failure on part of assessee to disclose fully and truly all material facts necessary for assessment--Reassessment not permissible-- CIT v. Ankit C. Maheshwari (Guj) . . . 146 S. 148 --Reassessment--Notice--Capital gains--Exemption--Sale of agricultural land and investment in purchase of agricultural land--Claim thoroughly examined in original assessment--Reassessment denying exemption on ground what assessee sold was not an agricultural land--Change of opinion-- Deepakbhai Ramjibhai Patel v. ITO (Guj) . . . 134 ----Reassessment--Notice--Change of opinion--Materials in respect of four companies and other documents put to assessee in course of original assessment proceedings--Notice relying on material already available prior to assessment--No valid reasons to believe--Notice not valid-- Ralson India Ltd. v. Deputy CIT (Delhi) . . . 103 ----Reassessment--Notice--Order of Assessing Officer for subsequent year treating income as business income instead of as short-term capital gains reversed by appellate authorities--Reassessment for earlier year on basis of note of Assessing Officer--Not on basis of new information but reappreciation or review of facts--Notice not valid-- Mohan Gupta (HUF) v.CIT (Delhi) . . . 115 ----Reassessment--Notice after four years--Condition precedent--No allegation in reasons recorded that there was any failure on part of assessee to disclose fully and truly all material facts necessary for assessment--Reassessment not permissible-- CIT v. Ankit C. Maheshwari (Guj) . . . 146 S. 153 --Reassessment--Limitation--Exclusion from limitation--Effect of section 153--Finding or direction of appellate authority--Assessment of income in another year--Order not barred by limitation-- CIT v. Glass Equipment (India) Ltd. (Cal) . . . 59 S. 158B(a) --Search and seizure--Block assessment--Block period--Definition--Period up to which “requisition was made†--Not to be extended to date on which materials received pursuant to requisition--Date on which requisition made to be taken into account and not date of execution of warrant of authorisation-- Sanjay Gupta v. CIT (Delhi) . . . 18 S. 158BC --Search and seizure--Block assessment--Undisclosed income--Remand for verification whether amounts noted on documents reflected contributions--Not perverse--Finding that additions proposed would be covered by disclosure and ad hoc additions already made--Finding that certain documents were clear and had expressly mentioned receipts of money--No flaw in reasoning-- CIT v. V. K. Bhatnagar (Delhi) . . . 37 S. 263 --Fringe benefits tax--Contribution towards approved superannunation fund for employees--Employees in whose case contribution more than one lakh--Reduction of amount of exemption from aggregate and balance considered as taxable--No mistake in calculation of fringe benefit tax-- CIT v. UTI Bank Ltd. (Guj) . . . 154 S. 271(1)(c) --Penalty--Concealment of income--Admission of appeal by High Court in respect of addition on which penalty based--Not an indication that issue is debatable one--Penalty should not automatically be deleted without any further reasons or grounds emerging from record--Matter remanded to Tribunal for decision afresh-- CIT v. Dharamshi B Shah (Guj) . . . 140 Income-tax Rules, 1962 : R. 6DD --Business expenditure--Disallowance--Payments in cash exceeding specified limit--Exclusion from disallowance--Section 40A(3) must be read with rule 6DD--Payments in cash at the request of the payee--Transaction genuine--Reasonable explanation for payments in cash--Payments could not be disallowed-- Anupam Tele Services v. ITO (Guj) . . . 122