INCOME TAX REPORTS (ITR)--PRINT AND ONLINE EDITION
SUBJECT INDEX TO CASES REPORTED
Capital gains --Transfer--Definition--Transfer of shares pledged with bank--Purchaser would not be able to get shares transferred in his name--Transaction amounts to transfer within the meaning of section 2(47)--Gains from transfer of right in shares assessable under section 45--Income-tax Act, 1961, ss. 2(47), 45-- Asst. CIT v. Biraj Investment P. Ltd. (Guj) . . . 157
Income-tax --General principles--Avoidance of tax--Colourable transaction--Transfer of shares at loss to group company--Transfer not prohibited by law--No evidence that price of shares was lower than market value--Transfer not a colourable device--Income-tax Act, 1961-- Asst. CIT v. Biraj Investment P. Ltd. (Guj) . . . 157
Non-resident --Shipping--Double taxation relief--Income from operation of ships in international traffic--Scope of article 9 of DTAA--Income from slot hire facilities--Entitled to benefit under article 9--Income-tax Act, 1961, s. 44B--Double Taxation Avoidance Agreement between India and the U. K., art. 9-- Director of Income-tax (International Taxation) v. Balaji Shipping U. K. Ltd. (Bom) . . . 135
New Return Forms
ITR-3, ITR-4, ITR-5, ITR-6
and ITR-7
ITR Volume 366 : Part 4 (Issue dated : 1-9-2014)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Appeal to Appellate Tribunal --Commissioner (Appeals) allowing twelve claims--Independent appeals preferred by parties with reference to various claims--Tribunal bound to deal with them independently--Failure to furnish reasons would render proceedings defective or deficient to that extent--Income-tax Act, 1961-- CIT v. Orient Longman Ltd. (T & AP) . . . 559
----Duty of Tribunal--Duty to consider facts--Question regarding existence of agency--Tribunal deciding case without considering facts and relying solely on its earlier decision in another case--Decision erroneous--Matter remanded--Income-tax Act, 1961-- CIT v.Koottummal Groups (Ker) . . . 546
----Export--Exemption--Export oriented undertaking--Requisite approval from Board constituted under Industries (Development and Regulation) Act, 1951 not possessed by assessee--Tribunal not entitled to rewrite law or accept anything in lieu of what was required by statute--Matter remanded to Assessing Officer with directions--Income-tax Act, 1961, s. 10B-- CIT v. J. E. Enterprises P. Ltd. (Cal) . . . 571
Appeal to High Court --Substantial question of law--Penalty--Concealment of particulars--Disallowance of claim--Does not mean that ingredients of clause (c) satisfied or fulfilled--Finding that penalty not warranted--Finding of fact--Income-tax Act, 1961, ss. 260A, 271(1)(c)-- CIT v. Larsen and Toubro Ltd. (Bom) . . . 502
Business income --Banking business--Broken period interest--Deductible--Income-tax Act, 1961-- CIT v. HDFC Bank Ltd. (Bom) . . . 505
Business loss --Set off against income from house property--Lease of entire factory premises--Rejection of case of assessee that it was still carrying on business activity--Disallowance of set off of business loss against income from house property--No reason to interfere findings--Income-tax Act, 1961, s. 71-- Phelix Appliances Ltd. v. ITO (Guj) . . . 574
Capital or revenue expenditure --Expenditure on development of software--Revenue expenditure-- CIT v. Shri Renuga Textiles Mills Ltd. (Mad) . . . 649
----Manufacture of cast iron ingots using iron scrap--Cast iron moulds not having enduring shelf life--Expenditure on reusable cast iron moulds--Revenue expenditure--Income-tax Act, 1961-- CIT v. Aditya Ferro Alloys P. Ltd. (Mad) . . . 490
Central Board of Direct Taxes --Return--Delay in filing return--Application to CBDT to condone delay--Rejection of application without recording reasons--Not justified--Income-tax Act, 1961, s. 119(2)(b)-- Bal Kishan Dhawan (HUF) v. Union of India (P&H) . . . 639
Company --Dividend--Deemed dividend--Loan to shareholder--Money-lending not business of company--Loan assessable as deemed dividend--Income-tax Act, 1961, s. 2(22)(e)-- Smt. Thankamma Oommen v. Asst. CIT (Ker) . . . 542
Depreciation --Block of assets--Written down value--Certain items of block assets destroyed in fire--Compensation received from insurer--Reduction in written down value only to extent of value reflected in accounts--Income-tax Act, 1961, s. 43(6)-- CIT v. Priyadarshini Spinning Mills Ltd. (T & AP) . . . 563
----Sale and lease back agreement--Purchase of machinery by assessee, a finance company, on payment of sales tax--Lease of machinery back to manufacturer--Lease income disclosed as business income--Assessee owner of machinery--No material to show transaction of sale and lease back not genuine--Assessee entitled to depreciation--Income-tax Act, 1961, s. 32-- CIT v. TVS Finance and Services Ltd. (Mad) . . . 487
Export --Exemption--Export oriented undertaking--Assessee’s sister undertaking fulfilling requirements of section 10B(2)(ii) and (iii) at time of formation--Transfer of entire business to assessee--Assessee entitled to exemption--Income-tax Act, 1961, s. 10B(2)(ii), (iii)-- CIT v.Heartland Delhi Transcription Services P. Ltd. (Delhi) . . . 523
----Exemption--Export oriented unit--Subsidiary of assessee, a 100 per cent. export oriented unit, merging with assessee by order of court--Not a case of business formed by splitting up or reconstruction of a business already in existence--Assessee’s status as 100 per cent. export oriented unit approved by Government of India--Assessee eligible for benefit of exemption--Income-tax Act, 1961, s. 10B-- CIT v. Shri Renuga Textiles Mills Ltd. (Mad) . . . 649
Income-tax --General principles--Necessity of passing a reasoned order-- Bal Kishan Dhawan (HUF) v. Union of India (P&H) . . . 639
Interest on borrowed capital --Banking business--Own funds and other non-interest bearing funds of bank more than investment in tax-free securities--No disallowance of interest under section 14A--Income-tax Act, 1961, s. 14A-- CIT v. HDFC Bank Ltd. (Bom) . . . 505
Loss --Carry forward and set off--Condition precedent--Carrying on same business--Tests for “same business†--Finding that there was unity of control and common management--Finding of fact--Set off of carried forward loss--Valid--Income-tax Act, 1961-- CIT v. Ganga Corporation Asbestos P. Ltd. (All) . . . 582
Penalty --Furnishing inaccurate particulars--Liquidated damages paid in terms of contract with purchaser--Allowance claimed on basis of quantity in excess of that actually agreed--No material to support assessee’s claim that quantity for which deduction claim was agreed quantity--Plea that figure included moisture content found untrue--Explanation not bona fide--Penalty justified--Income-tax Act, 1961, s. 271(1)(c)-- CIT v. Global Associates(Delhi) . . . 499
Precedent --Effect of decision of Supreme Court in Kranti Associates P. Ltd. v. Masood Ahmed Khan [2010] 9 SCC 496-- Bal Kishan Dhawan (HUF) v. Union of India (P&H) . . . 639
Rectification of mistakes --Mistake apparent from record--Construction activity--Investment allowance--Unabsorbed investment allowance--Substantial part allowed to be set off in earlier and subsequent years without any reservation as to admissibility of allowance--Subsequent Supreme Court decision that construction activity cannot be treated as manufacturing activity--After expiry of four years from end of financial year as specified in section 154(4)--Assessing Officer cannot without modifying order of earlier years disallow unabsorbed investment allowance already allowed--Income-tax Act, 1961, ss. 32A, 154(4)--Prefab Gratings Ltd. v. Asst. CIT (T & AP) . . . 550
Refund --Interest on refund--Assessee entitled to refund consequent upon deduction given on minimum alternate tax credit and tax deduction at source--Assessing Officer directed to work out interest on refund--Income-tax Act, 1961, s. 244A-- CIT v. Aban Loyd Chiles Offshore Ltd. (Mad) . . . 483
Revision --Commissioner--Powers--Condition precedent--Order of Assessing Officer must be erroneous and prejudicial to Revenue--Presumption that assessment order passed after due application of mind--Evidence that order was made after enquiry--Finding of Tribunal that assessment order was not erroneous--Order not challenged--Cancellation of order of revision--Valid--Income-tax Act, 1961, s. 263-- CIT v. J. L. Morrison (India) Ltd. (Cal) . . . 593
Transfer pricing --International transactions--Arm’s length price--Transactions of purchase and sale between parties on principal to principal basis--Trading transactions and transactions not commission agent or broker--Appropriate comparables would be chosen--Income-tax Act, 1961-- Mitsubishi Corporation of India P. Ltd. v. Addl. CIT (Delhi) . . . 495
Valuation of stock --Finding that there were discrepancies in valuation--Finding of fact--Additions to income justified--Income-tax Act, 1961-- Smt. Shakuntla Thukral v. CIT (P&H) . . . 644
----Loss due to diminution in value of current investment and amortisation of premium on investments held to maturity--RBI guidelines--Mandatory--Loss deductible--Income-tax Act, 1961-- CIT v. HDFC Bank Ltd. (Bom) . . . 505
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
S. 2(22)(e) --Company--Dividend--Deemed dividend--Loan to shareholder--Money-lending not business of company--Loan assessable as deemed dividend-- Smt. Thankamma Oommenv. Asst. CIT (Ker) . . . 542
S. 10B --Appeal to Appellate Tribunal--Export--Exemption--Export oriented undertaking--Requisite approval from Board constituted under Industries (Development and Regulation) Act, 1951 not possessed by assessee--Tribunal not entitled to rewrite law or accept anything in lieu of what was required by statute--Matter remanded to Assessing Officer with directions-- CIT v. J. E. Enterprises P. Ltd. (Cal) . . . 571
----Export--Exemption--Export oriented unit--Subsidiary of assessee, a 100 per cent. export oriented unit, merging with assessee by order of court--Not a case of business formed by splitting up or reconstruction of a business already in existence--Assessee’s status as 100 per cent. export oriented unit approved by Government of India--Assessee eligible for benefit of exemption-- CIT v. Shri Renuga Textiles Mills Ltd. (Mad) . . . 649
S. 10B(2)(ii), (iii) --Export--Exemption--Export oriented undertaking--Assessee’s sister undertaking fulfilling requirements of section 10B(2)(ii) and (iii) at time of formation--Transfer of entire business to assessee--Assessee entitled to exemption-- CIT v. Heartland Delhi Transcription Services P. Ltd. (Delhi) . . . 523
S. 14A --Interest on borrowed capital--Banking business--Own funds and other non-interest bearing funds of bank more than investment in tax-free securities--No disallowance of interest under section 14A-- CIT v. HDFC Bank Ltd. (Bom) . . . 505
S. 32 --Depreciation--Sale and lease back agreement--Purchase of machinery by assessee, a finance company, on payment of sales tax--Lease of machinery back to manufacturer--Lease income disclosed as business income--Assessee owner of machinery--No material to show transaction of sale and lease back not genuine--Assessee entitled to depreciation--CIT v. TVS Finance and Services Ltd. (Mad) . . . 487
S. 32A --Rectification of mistakes--Mistake apparent from record--Construction activity--Investment allowance--Unabsorbed investment allowance--Substantial part allowed to be set off in earlier and subsequent years without any reservation as to admissibility of allowance--Subsequent Supreme Court decision that construction activity cannot be treated as manufacturing activity--After expiry of four years from end of financial year as specified in section 154(4)--Assessing Officer cannot without modifying order of earlier years disallow unabsorbed investment allowance already allowed-- Prefab Gratings Ltd. v. Asst. CIT (T & AP) . . . 550
S. 43(6) --Depreciation--Block of assets--Written down value--Certain items of block assets destroyed in fire--Compensation received from insurer--Reduction in written down value only to extent of value reflected in accounts-- CIT v. Priyadarshini Spinning Mills Ltd. (T & AP) . . . 563
S. 71 --Business loss--Set off against income from house property--Lease of entire factory premises--Rejection of case of assessee that it was still carrying on business activity--Disallowance of set off of business loss against income from house property--No reason to interfere findings-- Phelix Appliances Ltd. v. ITO (Guj) . . . 574
S. 119(2)(b) --Central Board of Direct Taxes--Return--Delay in filing return--Application to CBDT to condone delay--Rejection of application without recording reasons--Not justified--Bal Kishan Dhawan (HUF) v. Union of India (P&H) . . . 639
S. 154(4) --Rectification of mistakes--Mistake apparent from record--Construction activity--Investment allowance--Unabsorbed investment allowance--Substantial part allowed to be set off in earlier and subsequent years without any reservation as to admissibility of allowance--Subsequent Supreme Court decision that construction activity cannot be treated as manufacturing activity--After expiry of four years from end of financial year as specified in section 154(4)--Assessing Officer cannot without modifying order of earlier years disallow unabsorbed investment allowance already allowed-- Prefab Gratings Ltd. v. Asst. CIT (T & AP) . . . 550
S. 244A --Refund--Interest on refund--Assessee entitled to refund consequent upon deduction given on minimum alternate tax credit and tax deduction at source--Assessing Officer directed to work out interest on refund-- CIT v. Aban Loyd Chiles Offshore Ltd.(Mad) . . . 483
S. 260A --Appeal to High Court--Substantial question of law--Penalty--Concealment of particulars--Disallowance of claim--Does not mean that ingredients of clause (c) satisfied or fulfilled--Finding that penalty not warranted--Finding of fact-- CIT v. Larsen and Toubro Ltd.(Bom) . . . 502
S. 263 --Revision--Commissioner--Powers--Condition precedent--Order of Assessing Officer must be erroneous and prejudicial to Revenue--Presumption that assessment order passed after due application of mind--Evidence that order was made after enquiry--Finding of Tribunal that assessment order was not erroneous--Order not challenged--Cancellation of order of revision--Valid-- CIT v. J. L. Morrison (India) Ltd. (Cal) . . . 593
S. 271(1)(c) --Appeal to High Court--Substantial question of law--Penalty--Concealment of particulars--Disallowance of claim--Does not mean that ingredients of clause (c) satisfied or fulfilled--Finding that penalty not warranted--Finding of fact-- CIT v. Larsen and Toubro Ltd.(Bom) . . . 502
----Penalty--Furnishing inaccurate particulars--Liquidated damages paid in terms of contract with purchaser--Allowance claimed on basis of quantity in excess of that actually agreed--No material to support assessee’s claim that quantity for which deduction claim was agreed quantity--Plea that figure included moisture content found untrue--Explanation not bona fide--Penalty justified-- CIT v. Global Associates (Delhi) . . . 499
Posted by: CA RAJU SHAH <shahmars@hotmail.com>
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