ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))--PRINT AND ONLINE EDITION
SUBJECT INDEX TO CASES REPORTED
Business income --Adventure in nature of trade--Development agreement--No sale of undivided share in land to developer in previous year--Assessee remaining owner of property--No business income accrues--Income-tax Act, 1961, s. 28-- Fibars Infratech P. Ltd. v. ITO (Hyd) . . . 47
Capital gains --Capital asset--Agricultural land--Development agreement executed and presented for registration at time when land agricultural land--Registration after approval for conversion received--Land no more agricultural land at time of registration of development agreement--Capital asset--Income-tax Act, 1961, s. 2(14)(iii)-- Fibars Infratech P. Ltd. v. ITO(Hyd) . . . 47
----Transfer--Definition--Contract “of nature referred to in section 53A of Transfer of Property Act†--Condition precedent--Transferee should have performed or be willing to perform his part of contract--Development agreement--No progress in development work in previous year--Transferee neither performed nor willing to perform its obligation under agreement in previous year--Commencement of building construction not initiated as building approval not yet granted--No income accrued in assessment year--Development agreement not a “contract of nature referred to in section 53A--No deemed transfer under section 2(47)(v)--Income-tax Act, 1961, ss. 2(47)(v), 45, 48--Transfer of Property Act, 1882, s. 53A-- Fibars Infratech P. Ltd. v. ITO (Hyd) . . . 47
----Transfer--Definition--Exchange--Both properties which are subject matter of exchange must be in existence at time of transaction--Development agreement--Only land in existence at time of entering into development agreement--No quantification of consideration or other property which assessee was to receive in exchange for handing over property for development--Not a transfer by way of exchange--Income-tax Act, 1961, s. 2(47)(i)-- Fibars Infratech P. Ltd. v. ITO (Hyd) . . . 47
PRINT EDITION
Volume 33 : Part 3 (Issue dated : 28-7-2014)
SUBJECT INDEX TO CASES REPORTED
Appeal to Appellate Tribunal --Condonation of delay--Appeal against order of Commissioner under section 263--Assessee appearing before Assessing Officer and Commissioner (Appeals) in proceedings pursuant to order of Commissioner--Plea that assessee not aware of revision proceedings and misplacement of papers--Not genuine explanation--Petition to be dismissed--Income-tax Act, 1961, s. 263-- Abhishek Transtel Ltd. v. Deputy CIT (Hyd) . . . 356
----Powers of Tribunal--Power to admit additional evidence--Scope of--Assessee not filing return and reassessment made--Assessee failing to file information regarding expatriate employees engaged in services to group companies outside India--Whether assessee had permanent establishment in India to be determined--Department seeking to place additional evidence in form of “Linkedin†profiles of expatriate employees--To be permitted--Linkedin profiles not hearsay--Income-tax Act, 1961, ss. 131, 133A, 254--Income-tax (Appellate Tribunal) Rules, 1963, r. 29-- GE Energy Parts Inc. v. Addl. DIT, International Taxation (Delhi) . . . 411
Business expenditure --Accrued or contingent liability--Provision for unpaid expenses--Not in nature of contingent expenditure--Provision made against actual expenditure and allowable--Income-tax Act, 1961-- ITO (TDS) v. Cognizant Technology Solutions India P. Ltd. (Chennai) . . . 382
----Deduction only on actual payment--Amount debited to profit and loss account and same amount also added to closing stock--Explanation of assessee that amount added to closing stock is not amount claimed in computation of income to be verified--Matter remanded--Income-tax Act, 1961, s. 43B-- Abhishek Transtel Ltd. v. Deputy CIT (Hyd) . . . 356
----Deduction only on actual payment--Provision for leave encashment--Not allowable--Income-tax Act, 1961, s. 43B(f)-- Popular Vehicles and Services Ltd. v. Deputy CIT (Cochin) . . . 347
----Disallowance--Payments exceeding prescribed limit otherwise than by crossed cheques or crossed bank drafts--Payments towards purchase of telephone cards--Principal and agent relationship--Section 40A(3) not applicable--Income-tax Act, 1961, s. 40A(3)-- Doshi Vijaykumar Motilal v. ITO (Pune) . . . 403
----Disallowance--Payments to non-resident--Failure to deduct tax at source--Payments for use of telecommunication equipment and other services--Use and right to use of process constitute royalty--Assessee liable to deduct tax at source--Income-tax Act, 1961, ss. 9(1)(vi), 40(a)(ia), 195, 201(1), (1A)-- ITO (TDS) v. Cognizant Technology Solutions India P. Ltd. (Chennai) . . . 382
----Expenditure incurred on filling up land purchased by assessee to make it saleable--Similar claim of vendor alone not ground to disallow claim of assessee--Bank statement and ledger account showing genuineness of expenditure--Expenditure allowable in hands of assessee--Income-tax Act, 1961-- Deputy CIT v. Damac Holdings P. Ltd. (Cochin) . . . 331
----Sundry and travelling expenses--Considering details of expenses and turnover of business ad hoc disallowance of 20 per cent. of travelling expenses on higher side--Ad hoc disallowance of 5 per cent. reasonable--Considering nature of business of designer jewellery and maintenance of showroom disallowance of sundry expenses not proper--Varun Exports v. Addl. CIT (Mumbai) . . . 441
Capital or revenue receipt --Subsidy received from Central Government--Subsidy envisaging technology upgradation of industry--Capital in nature--Income-tax Act, 1961-- Deputy CIT v. Gloster Jute Mills Ltd. (Kolkata) . . . 322
Capital gains --Exemption--Investment of gains in residential property--Not necessary that property should be purchased in India itself--Assessee investing gains in residential property in Singapore--Entitled to exemption--Income-tax Act, 1961, s. 54-- N. Ranganathan v. ITO(Chennai) . . . 444
Depreciation --Rate of depreciation--Lorries--Higher rate applicable where used in business of hiring--Assessee not engaged in business of hiring--Not entitled to depreciation at higher rate--Income-tax Act, 1961, s. 32-- Baliapatam Tile Works Ltd. v. Deputy CIT (Cochin) . . . 396
Export --Exemption--Computation of deduction--Eligible unit--Current year’s profit of eligible unit not be reduced by setting off of brought forward losses of earlier years--Deduction to be granted on eligible profits of current assessment year--Income-tax Act, 1961, s. 10A-- ITO (TDS) v. Cognizant Technology Solutions India P. Ltd. (Chennai) . . . 382
----Exemption--Computation of deduction--Foreign currency expenditure and telecommunication expenses to be included in export turnover--Income-tax Act, 1961, s. 10A-- ITO (TDS) v. Cognizant Technology Solutions India P. Ltd. (Chennai) . . . 382
Fringe benefits tax --Telephones installed at business premises--Not to be treated as fringe benefit--Vehicles kept for demo drive by potential customers--Not to be treated as fringe benefit--Matter remanded for verification of details--Income-tax Act, 1961, s. 115WB(2)--Popular Vehicles and Services Ltd. v. Deputy CIT (Cochin) . . . 347
Income --Computation of income--Disallowance of expenditure relating to exempt income--Provisions of rule 8D have effect from assessment year 2008-09 only--Export--Exemption--Computation of eligible profits--Profits to be enhanced to extent of disallowance--Proportionate enhancement in amount of deduction available--Income-tax Act, 1961, ss. 10A, 14A--Income-tax Rules, 1962, r. 8D-- ITO (TDS) v. Cognizant Technology Solutions India P. Ltd. (Chennai) . . . 382
----Disallowance of expenditure in relation to exempt income--Computation of disallowance--Failure by assessee to consider two parts of rule 8D(2)--Computation made by Assessing Officer considering aggregate of all three components of rule 8D(2) proper--Income-tax Act, 1961, s. 14A(2)--Income-tax Rules, 1962, r. 8D(2)-- Joint Investment P. Ltd. v. Asst. CIT(Delhi) . . . 373
----Disallowance of expenditure in relation to exempt income--Contention of assessee that investment made by assessee less than profit of year--Matter remanded--Income-tax Act, 1961, s. 14A-- Popular Vehicles and Services Ltd. v. Deputy CIT (Cochin) . . . 347
----Disallowance of expenditure in relation to exempt income--Rule 8D mandatory--Expenditure in relation to exempt income to be determined according to method prescribed in Rules--Income-tax Act, 1961, s. 14A(2)--Income-tax Rules, 1962, r. 8D-- Joint Investment P. Ltd. v. Asst. CIT (Delhi) . . . 373
Loss --Set off--Export oriented unit--Business loss and depreciation loss of 100 per cent. export oriented unit can be set off against profits of other units--Income-tax Act, 1961--Deputy CIT v. Gloster Jute Mills Ltd. (Kolkata) . . . 322
Reassessment --Notice after four years--Necessary information not placed on record at time of original assessment--Assessing Officer well within jurisdiction to reopen assessment--Income-tax Act, 1961, ss. 143(3), 147, 148-- Abhishek Transtel Ltd. v. Deputy CIT (Hyd) . . . 356
Refund --Interest on excess refund--Assessment completed prior to 1-6-2003--Section 234D has no retrospective applicability--Income-tax Act, 1961, s. 234D-- ITO (TDS) v. Cognizant Technology Solutions India P. Ltd. (Chennai) . . . 382
Search and seizure --Assessment in search cases--Framing assessment order under section 153C instead of 153C read with 153A--Omission to mention relevant provision of law--Not reason to invalidate assessment order--Income-tax Act, 1961, ss. 132, 153A, 153C-- Deputy CIT v. Damac Holdings P. Ltd. (Cochin) . . . 331
----Assessment in search cases--Wrong description of designation of officer--Not reason to invalidate assessment order--Income-tax Act, 1961-- Deputy CIT v. Damac Holdings P. Ltd.(Cochin) . . . 331
Transfer of case --Transfer made after giving due notice and for effective investigation--Completion of assessment by one Assessing Officer--Recording of satisfaction not necessary--Income-tax Act, 1961, s. 127-- Deputy CIT v. Damac Holdings P. Ltd. (Cochin) . . . 331
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
S. 9(1)(vi) --Business expenditure--Disallowance--Payments to non-resident--Failure to deduct tax at source--Payments for use of telecommunication equipment and other services--Use and right to use of process constitute royalty--Assessee liable to deduct tax at source-- ITO (TDS) v. Cognizant Technology Solutions India P. Ltd. (Chennai) . . . 382
S. 10A --Export--Exemption--Computation of deduction--Eligible unit--Current year’s profit of eligible unit not be reduced by setting off of brought forward losses of earlier years--Deduction to be granted on eligible profits of current assessment year-- ITO (TDS) v. Cognizant Technology Solutions India P. Ltd. (Chennai) . . . 382
----Export--Exemption--Computation of deduction--Foreign currency expenditure and telecommunication expenses to be included in export turnover-- ITO (TDS) v. Cognizant Technology Solutions India P. Ltd. (Chennai) . . . 382
----Income--Computation of income--Disallowance of expenditure relating to exempt income--Provisions of rule 8D have effect from assessment year 2008-09 only--Export--Exemption--Computation of eligible profits--Profits to be enhanced to extent of disallowance--Proportionate enhancement in amount of deduction available-- ITO (TDS) v. Cognizant Technology Solutions India P. Ltd. (Chennai) . . . 382
S. 14A --Income--Computation of income--Disallowance of expenditure relating to exempt income--Provisions of rule 8D have effect from assessment year 2008-09 only--Export--Exemption--Computation of eligible profits--Profits to be enhanced to extent of disallowance--Proportionate enhancement in amount of deduction available-- ITO (TDS) v. Cognizant Technology Solutions India P. Ltd. (Chennai) . . . 382
----Income--Disallowance of expenditure in relation to exempt income--Contention of assessee that investment made by assessee less than profit of year--Matter remanded--Popular Vehicles and Services Ltd. v. Deputy CIT (Cochin) . . . 347
S. 14A(2) --Income--Disallowance of expenditure in relation to exempt income--Computation of disallowance--Failure by assessee to consider two parts of rule 8D(2)--Computation made by Assessing Officer considering aggregate of all three components of rule 8D(2) proper--Joint Investment P. Ltd. v. Asst. CIT (Delhi) . . . 373
----Income--Disallowance of expenditure in relation to exempt income--Rule 8D mandatory--Expenditure in relation to exempt income to be determined according to method prescribed in Rules-- Joint Investment P. Ltd. v. Asst. CIT (Delhi) . . . 373
S. 32 --Depreciation--Rate of depreciation--Lorries--Higher rate applicable where used in business of hiring--Assessee not engaged in business of hiring--Not entitled to depreciation at higher rate-- Baliapatam Tile Works Ltd. v. Deputy CIT (Cochin) . . . 396
S. 40(a)(ia) --Business expenditure--Disallowance--Payments to non-resident--Failure to deduct tax at source--Payments for use of telecommunication equipment and other services--Use and right to use of process constitute royalty--Assessee liable to deduct tax at source-- ITO (TDS) v. Cognizant Technology Solutions India P. Ltd. (Chennai) . . . 382
S. 40A(3) --Business expenditure--Disallowance--Payments exceeding prescribed limit otherwise than by crossed cheques or crossed bank drafts--Payments towards purchase of telephone cards--Principal and agent relationship--Section 40A(3) not applicable-- Doshi Vijaykumar Motilal v. ITO (Pune) . . . 403
S. 43B --Business expenditure--Deduction only on actual payment--Amount debited to profit and loss account and same amount also added to closing stock--Explanation of assessee that amount added to closing stock is not amount claimed in computation of income to be verified--Matter remanded-- Abhishek Transtel Ltd. v. Deputy CIT (Hyd) . . . 356
S. 43B(f) --Business expenditure--Deduction only on actual payment--Provision for leave encashment--Not allowable-- Popular Vehicles and Services Ltd. v. Deputy CIT (Cochin) . . . 347
S. 54 --Capital gains--Exemption--Investment of gains in residential property--Not necessary that property should be purchased in India itself--Assessee investing gains in residential property in Singapore--Entitled to exemption-- N. Ranganathan v. ITO (Chennai) . . . 444
S. 115WB(2) --Fringe benefits tax--Telephones installed at business premises--Not to be treated as fringe benefit--Vehicles kept for demo drive by potential customers--Not to be treated as fringe benefit--Matter remanded for verification of details-- Popular Vehicles and Services Ltd. v. Deputy CIT (Cochin) . . . 347
S. 127 --Transfer of case--Transfer made after giving due notice and for effective investigation--Completion of assessment by one Assessing Officer--Recording of satisfaction not necessary-- Deputy CIT v. Damac Holdings P. Ltd. (Cochin) . . . 331
S. 131 --Appeal to Appellate Tribunal--Powers of Tribunal--Power to admit additional evidence--Scope of--Assessee not filing return and reassessment made--Assessee failing to file information regarding expatriate employees engaged in services to group companies outside India--Whether assessee had permanent establishment in India to be determined--Department seeking to place additional evidence in form of “Linkedin†profiles of expatriate employees--To be permitted--“Linkedin†profiles not hearsay-- GE Energy Parts Inc. v. Addl. DIT, International Taxation (Delhi) . . . 411
S. 132 --Search and seizure--Assessment in search cases--Framing assessment order under section 153C instead of 153C read with 153A--Omission to mention relevant provision of law--Not reason to invalidate assessment order-- Deputy CIT v. Damac Holdings P. Ltd.(Cochin) . . . 331
S. 133A --Appeal to Appellate Tribunal--Powers of Tribunal--Power to admit additional evidence--Scope of--Assessee not filing return and reassessment made--Assessee failing to file information regarding expatriate employees engaged in services to group companies outside India--Whether assessee had permanent establishment in India to be determined--Department seeking to place additional evidence in form of “Linkedin†profiles of expatriate employees--To be permitted--“Linkedin†profiles not hearsay-- GE Energy Parts Inc. v. Addl. DIT, International Taxation (Delhi) . . . 411
S. 143(3) --Reassessment--Notice after four years--Necessary information not placed on record at time of original assessment--Assessing Officer well within jurisdiction to reopen assessment-- Abhishek Transtel Ltd. v. Deputy CIT (Hyd) . . . 356
S. 147 --Reassessment--Notice after four years--Necessary information not placed on record at time of original assessment--Assessing Officer well within jurisdiction to reopen assessment-- Abhishek Transtel Ltd. v. Deputy CIT (Hyd) . . . 356
S. 148 --Reassessment--Notice after four years--Necessary information not placed on record at time of original assessment--Assessing Officer well within jurisdiction to reopen assessment-- Abhishek Transtel Ltd. v. Deputy CIT (Hyd) . . . 356
S. 153A --Search and seizure--Assessment in search cases--Framing assessment order under section 153C instead of 153C read with 153A--Omission to mention relevant provision of law--Not reason to invalidate assessment order-- Deputy CIT v. Damac Holdings P. Ltd.(Cochin) . . . 331
S. 153C --Search and seizure--Assessment in search cases--Framing assessment order under section 153C instead of 153C read with 153A--Omission to mention relevant provision of law--Not reason to invalidate assessment order-- Deputy CIT v. Damac Holdings P. Ltd.(Cochin) . . . 331
S. 195 --Business expenditure--Disallowance--Payments to non-resident--Failure to deduct tax at source--Payments for use of telecommunication equipment and other services--Use and right to use of process constitute royalty--Assessee liable to deduct tax at source-- ITO (TDS) v. Cognizant Technology Solutions India P. Ltd. (Chennai) . . . 382
S. 201(1) --Business expenditure--Disallowance--Payments to non-resident--Failure to deduct tax at source--Payments for use of telecommunication equipment and other services--Use and right to use of process constitute royalty--Assessee liable to deduct tax at source-- ITO (TDS) v. Cognizant Technology Solutions India P. Ltd. (Chennai) . . . 382
S. 201(1A) --Business expenditure--Disallowance--Payments to non-resident--Failure to deduct tax at source--Payments for use of telecommunication equipment and other services--Use and right to use of process constitute royalty--Assessee liable to deduct tax at source-- ITO (TDS) v. Cognizant Technology Solutions India P. Ltd. (Chennai) . . . 382
S. 234D --Refund--Interest on excess refund--Assessment completed prior to 1-6-2003--Section 234D has no retrospective applicability-- ITO (TDS) v. Cognizant Technology Solutions India P. Ltd. (Chennai) . . . 382
S. 254 --Appeal to Appellate Tribunal--Powers of Tribunal--Power to admit additional evidence--Scope of--Assessee not filing return and reassessment made--Assessee failing to file information regarding expatriate employees engaged in services to group companies outside India--Whether assessee had permanent establishment in India to be determined--Department seeking to place additional evidence in form of “Linkedin†profiles of expatriate employees--To be permitted--“Linkedin†profiles not hearsay-- GE Energy Parts Inc. v. Addl. DIT, International Taxation (Delhi) . . . 411
S. 263 --Appeal to Appellate Tribunal--Condonation of delay--Appeal against order of Commissioner under section 263--Assessee appearing before Assessing Officer and Commissioner (Appeals) in proceedings pursuant to order of Commissioner--Plea that assessee not aware of revision proceedings and misplacement of papers--Not genuine explanation--Petition to be dismissed-- Abhishek Transtel Ltd. v. Deputy CIT (Hyd) . . . 356
R. 8D --Income--Computation of income--Disallowance of expenditure relating to exempt income--Provisions of rule 8D have effect from assessment year 2008-09 only--Export--Exemption--Computation of eligible profits--Profits to be enhanced to extent of disallowance--Proportionate enhancement in amount of deduction available-- ITO (TDS) v. Cognizant Technology Solutions India P. Ltd. (Chennai) . . . 382
----Income--Disallowance of expenditure in relation to exempt income--Rule 8D mandatory--Expenditure in relation to exempt income to be determined according to method prescribed in Rules-- Joint Investment P. Ltd. v. Asst. CIT (Delhi) . . . 373
R. 8D(2) --Income--Disallowance of expenditure in relation to exempt income--Computation of disallowance--Failure by assessee to consider two parts of rule 8D(2)--Computation made by Assessing Officer considering aggregate of all three components of rule 8D(2) proper--Joint Investment P. Ltd. v. Asst. CIT (Delhi) . . . 373
Income-tax (Appellate Tribunal) Rules, 1963
R. 29 --Appeal to Appellate Tribunal--Powers of Tribunal--Power to admit additional evidence--Scope of--Assessee not filing return and reassessment made--Assessee failing to file information regarding expatriate employees engaged in services to group companies outside India--Whether assessee had permanent establishment in India to be determined--Department seeking to place additional evidence in form of “Linkedin†profiles of expatriate employees--To be permitted--“Linkedin†profiles not hearsay-- GE Energy Parts Inc. v. Addl. DIT, International Taxation (Delhi) . . . 411
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