ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))--PRINT AND ONLINE EDITION
SUBJECT INDEX TO CASES REPORTED
Capital gains --Development agreement--Cost of construction of flat--Assessing Officer relying upon valuation report by District Valuation Officer of another building--Not acceptable--Matter remanded for ascertaining cost of construction--Cost of acquisition--Whether vacant site transferred along with building--Matter remanded--Income-tax Act, 1961, s. 45(2)-- ITOv. Dr. M. Varalakshmi (Hyd) . . . 232
----Exemption--Transfer--Transaction consisting of sale as well as gift--Gift cannot be considered as transfer for purpose of capital gains under section 47--Sale consideration alone liable for computation of capital gains--Income-tax Act, 1961, s. 47-- ITO v. V. Jayaraman (Chennai) . . . 243
Capital or revenue expenditure --Professional fees paid for amalgamation of companies--Deductible under section 37(1)--Income-tax Act, 1961, s. 37(1)-- Express Airotronics P. Ltd. v. Asst. CIT (Mumbai) . . . 219
Charitable purpose --Exemption--Disqualification--Construction of building on land belonging to trustee by using income of trust--Violation of provisions of section 13(1)(c)--Exemption not allowable--Income-tax Act, 1961, s. 13(1)(c)-- Asst. DIT (Exemptions) v. Natya Sankalpaa(Chennai) . . . 226
Penalty --Concealment of income--Best judgment assessment--Penalty not permissible in case of estimation of income--Income-tax Act, 1961, s. 271(1)(c)-- Raja Ram Contractor v. Asst. CIT (Chandigarh) . . . 239
----Failure to file return of tax deducted at source within specified time--Records including financial agreements, statements, challans impounded by Department during survey--Reasonable cause for failure--Penalty deleted--Income-tax Act, 1961, s. 272A(2)(k)-- Sri Sun City Developers v. Addl. CIT (Chennai) . . . 223
Volume 34 : Part 4 (Issue dated : 15-9-2014)
SUBJECT INDEX TO CASES REPORTED
Accounting --Rejection of accounts--Duty of assessee to furnish correct details and accounts before Assessing Officer--Internal dispute between directors of company not ground for not furnishing proper accounts--Assessment on estimation basis in absence of accounts justified--Income-tax Act, 1961-- Deputy CIT v. Tesla Technologies and Oxidation P. Ltd. (Mumbai) . . . 452
----Rejection of accounts--Failure by Department to point out defects in account--Rejection of accounts without pointing out defects not justified--Income-tax Act, 1961-- Deputy CIT v. Tesla Technologies and Oxidation P. Ltd. (Mumbai) . . . 452
Appeal to Appellate Tribunal --Maintainability--Resident company--Appeal to be signed by managing director or director at time of filing of appeal--Appeal signed by unauthorised person not maintainable--Income-tax Act, 1961, s. 253-- Suvistas Software P. Ltd. v. ITO(Hyd) . . . 539
Appeal to Commissioner (Appeals) --Opportunity of hearing not given to Assessing Officer--Violation of natural justice--Order to be quashed--Matter remanded for grant of adequate opportunity of hearing--Income-tax Act, 1961, s. 250(2)(b)-- Asst. CIT v. Spice Jet Ltd.(Delhi) . . . 520
----Power to admit additional evidence--Assessing Officer giving time of five days to file evidence--Not sufficient--Assessing Officer completing assessment without giving sufficient opportunity--Additional evidence to be admitted--Income-tax Rules, 1962, r. 46A(1)(d)-- Asst. CIT v. Bahubali Dyes Ltd. (Delhi) . . . 487
Business expenditure --Business--Setting up of business and commencement of business--Distinction--Business involving production of sponge iron--Payments made for insurance, interest on working capital and upfront fees, for procurement of raw materials for commencement of production--Related to business--Revenue expenditure--Allowable--Income-tax Act, 1961-- Maithan Ispat Ltd. v. Deputy Commissioner of Income-tax (Kolkata) . . . 549
----Disallowance--Failure to deduct tax at source--Amendment in 2012 to effect assessee not to be deemed in default if recipient has filed return of income and paid taxes within stipulated time--Clarificatory--Matter remanded for verification whether payees had paid tax in time--Income-tax Act, 1961, s. 40(a)(ia)-- ITO v. Dr. Jaideep Kumar Sharma (Delhi) . . . 565
----Disallowance--Payments liable to deduction of tax at source-- Provision brought by Finance Act, 2012 that assessee not in default where income in question declared by recipient and tax paid thereon--Declaratory and curative in nature and has retrospective effect from April 1, 2005--Matter remanded--Income-tax Act, 1961, s. 40(a)(ia)-- Rajeev Kumar Agarwal v. Addl. CIT (Agra) . . . 479
----Disallowance--Payments liable to tax deduction at source--Amendment brought in 2010 retrospective--Payment cannot be disallowed if tax deducted at source paid before due date prescribed for filing return under section 139(1) of Act--Income-tax Act, 1961, ss. 40(a)(ia), 139(1)-- Indo Stosec P. Ltd. v. ITO (Mumbai) . . . 543
Capital gains --Conversion of shares held as “stock-in-trade†to “investment†on first day of accounting year and sale of shares immediately--Intention to avail of benefit of exemption and concessional rate of tax--Sale of shares to be assessed as business income--Income-tax Act, 1961, ss. 10(38), 111A-- Indo Stosec P. Ltd. v. ITO (Mumbai) . . . 543
Cash credits --Share capital--Evidence submitted by assessee establishing identity, genuineness and creditworthiness of shareholders--Failure by Department to rebut evidence--Share premium not to be treated as undisclosed income--Income-tax Act, 1961, s. 68-- Asst. CIT v. Bahubali Dyes Ltd. (Delhi) . . . 487
Charitable purpose --Charitable trust--Exemption--Remuneration paid to trustee at about one per cent. of total value of activities of trust--Not excessive or unreasonable--Remuneration allowed for similar services in earlier assessment year--Disallowance to be deleted--Income-tax Act, 1961, ss. 12AA, 13(1)(c), 13(3)(cc)-- PNR Society for Relief and Rehabilitation of the Disabled Trust v. Deputy DIT ( Exemption) (Ahd) . . . 465
----Exemption--Whether assessee society granting benefits to executive members instead of public at large--Matter remanded--Income-tax Act, 1961, ss. 11, 12A, 13(1)(c), (3)-- Deputy DIT (Exemptions) v. Nagarathu Vaisiyargal Sangam (Chennai) . . . 458
Co-operative society --Special deduction under section 80P(2)(a)(i)--Assessee not a credit co-operative bank--Exclusion clause not applicable--Entitled to deduction--Income-tax Act, 1961, s. 80P(2)(a)(i), (4)-- Shree Laxmananda Multipurpose Co-operative Society Ltd. v. ITO(Bangalore) . . . 472
Depreciation --Rate of depreciation--Components of windmill--Electrical cables, fittings and other electrical works connected with windmill single composite unit--Eligible for depreciation at rate of 80 per cent.--Income-tax Act, 1961-- Asst. CIT v. Kutti Spinners P. Ltd. (Chennai) . . . 470
Dispute Resolution Panel --Delegating power to Assessing Officer--Violation of section 144C--Irregular exercise of power--Matter remanded to Dispute Resolution Panel--Income-tax Act, 1961, s. 144C(8)-- Swiber Offshore Construction Pte. Ltd. v. Addl. DIT (International Taxation) (Mumbai) . . . 522
Exemption --Export oriented undertaking--Approved by Government--Tribunal granting exemption under section 10B in earlier years--Exemption allowable--Income-tax Act, 1961, s. 10B-- Asst. CIT v. Vision 2 K+Inc (Hyd) . . . 510
Export --Exemption--Assessee fulfilling all conditions necessary for purpose of claiming exemption under section 10A--Quoting wrong provision of law not reason to deny relief--Assessee entitled to exemption under section 10A--Income-tax Act, 1961, s. 10A-- ITO v. Accentia Technologies Ltd. (Mumbai) . . . 505
Income --Assessee receiving income for telecasting and broadcasting programmes--Assessee not holding licence in relevant year to telecast--Amount not income unless assessee carrying out specific purpose for which sum received--Assessing Officer to examine if amount received contained income element--Matter remanded--Income-tax Act, 1961, ss. 4, 5, 11-- A. Y. Broadcast Foundation v. ITO (Cochin) . . . 513
International transactions --Arm’s length price--Determination--Software development services--Selection of comparables--Companies having high turnover, companies not qualifying employee cost filter and functionally dissimilar cannot be treated as comparable--Income-tax Act, 1961, s. 92CA-- Axsys Healthtech Ltd. v. Deputy CIT (Hyd) . . . 583
----Arm’s length price--Determination--Transactional net margin method--Software development services--Determination of operating cost--Contention of assessee that expenditure incurred by it for developing future products should be excluded from operating cost--Failure by Department to consider or comment upon assessee’s contention--Matter remanded to Assessing Officer for examination afresh--Income-tax Act, 1961, s. 92CA--Axsys Healthtech Ltd. v. Deputy CIT (Hyd) . . . 583
Non-resident --Royalty--Fees for included services--Taxability in India--Assessing Officer taking view that assessee liable to pay “royalty†--Changing view in subsequent two years that assessee liable to pay “royalty†and “fee for included services†--Matter not examined in context of terms used in Double Taxation Avoidance Agreement--Matter remanded--Income-tax Act, 1961, s. 9(1)(vi)--Double Taxation Avoidance Agreement between India and the United States of America, art. 12-- AC Nielsen Corporation ORG Marg P. Ltd. v. Asst. CIT (International Taxation) (Mumbai) . . . 572
Revision --Commissioner--Powers--Commissioner cannot invoke jurisdiction on ground of improper enquiry by Assessing Officer or substitute his opinion for that of Assessing Officer--Order not erroneous and prejudicial to Revenue--Commissioner not justified in cancelling assessment--Income-tax Act, 1961, s. 263-- Gopal Narayan Singh v. Deputy CIT(Patna) . . . 461
Search and seizure --Assessment--Loss--Carry forward--Notice under section 153A to assessee--Effect--Pending assessments abate--Return filed pursuant to notice under section 153A--Carry forward of loss not to be disallowed for belated filing of return--Income-tax Act, 1961, ss. 153A(1), 139(1)-- Maithan Ispat Ltd. v. Deputy Commissioner of Income-tax (Kolkata) . . . 549
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Double Taxation Avoidance Agreement between India and the United States of America
Art. 12 --Non-resident--Royalty--Fees for included services--Taxability in India--Assessing Officer taking view that assessee liable to pay “royalty†--Changing view in subsequent two years that assessee liable to pay “royalty†and “fee for included services†--Matter not examined in context of terms used in Double Taxation Avoidance Agreement--Matter remanded-- AC Nielsen Corporation ORG Marg P. Ltd. v. Asst. CIT (International Taxation) (Mumbai) . . . 572
S. 4 --Income--Assessee receiving income for telecasting and broadcasting programmes--Assessee not holding licence in relevant year to telecast--Amount not income unless assessee carrying out specific purpose for which sum received--Assessing Officer to examine if amount received contained income element--Matter remanded-- A. Y. Broadcast Foundation v. ITO (Cochin) . . . 513
S. 5 --Income--Assessee receiving income for telecasting and broadcasting programmes--Assessee not holding licence in relevant year to telecast--Amount not income unless assessee carrying out specific purpose for which sum received--Assessing Officer to examine if amount received contained income element--Matter remanded-- A. Y. Broadcast Foundation v. ITO (Cochin) . . . 513
S. 9(1)(vi) --Non-resident--Royalty--Fees for included services--Taxability in India--Assessing Officer taking view that assessee liable to pay “royalty†--Changing view in subsequent two years that assessee liable to pay “royalty†and “fee for included services†--Matter not examined in context of terms used in Double Taxation Avoidance Agreement--Matter remanded-- AC Nielsen Corporation ORG Marg P. Ltd. v. Asst. CIT (International Taxation) (Mumbai) . . . 572
S. 10(38) --Capital gains--Conversion of shares held as “stock-in-trade†to “investment†on first day of accounting year and sale of shares immediately--Intention to avail of benefit of exemption and concessional rate of tax--Sale of shares to be assessed as business income-- Indo Stosec P. Ltd. v. ITO (Mumbai) . . . 543
S. 10A --Export--Exemption--Assessee fulfilling all conditions necessary for purpose of claiming exemption under section 10A--Quoting wrong provision of law not reason to deny relief--Assessee entitled to exemption under section 10A-- ITO v. Accentia Technologies Ltd. (Mumbai) . . . 505
S. 10B --Exemption--Export oriented undertaking--Approved by Government--Tribunal granting exemption under section 10B in earlier years--Exemption allowable-- Asst. CIT v. Vision 2 K+Inc (Hyd) . . . 510
S. 11 --Charitable purpose--Exemption--Whether assessee society granting benefits to executive members instead of public at large--Matter remanded-- Deputy DIT (Exemptions) v. Nagarathu Vaisiyargal Sangam (Chennai) . . . 458
----Income--Assessee receiving income for telecasting and broadcasting programmes--Assessee not holding licence in relevant year to telecast--Amount not income unless assessee carrying out specific purpose for which sum received--Assessing Officer to examine if amount received contained income element--Matter remanded-- A. Y. Broadcast Foundation v. ITO (Cochin) . . . 513
S. 12A --Charitable purpose--Exemption--Whether assessee society granting benefits to executive members instead of public at large--Matter remanded-- Deputy DIT (Exemptions) v. Nagarathu Vaisiyargal Sangam (Chennai) . . . 458
S. 12AA --Charitable purpose--Charitable trust--Exemption--Remuneration paid to trustee at about one per cent. of total value of activities of trust--Not excessive or unreasonable--Remuneration allowed for similar services in earlier assessment year--Disallowance to be deleted-- PNR Society for Relief and Rehabilitation of the Disabled Trust v. Deputy DIT(Exemption) (Ahd) . . . 465
S. 13(1)(c) --Charitable purpose--Charitable trust--Exemption--Remuneration paid to trustee at about one per cent. of total value of activities of trust--Not excessive or unreasonable--Remuneration allowed for similar services in earlier assessment year--Disallowance to be deleted-- PNR Society for Relief and Rehabilitation of the Disabled Trust v. Deputy DIT(Exemption) (Ahd) . . . 465
----Charitable purpose--Exemption--Whether assessee society granting benefits to executive members instead of public at large--Matter remanded-- Deputy DIT (Exemptions) v. Nagarathu Vaisiyargal Sangam (Chennai) . . . 458
S. 13(3) --Charitable purpose--Exemption--Whether assessee society granting benefits to executive members instead of public at large--Matter remanded-- Deputy DIT (Exemptions) v. Nagarathu Vaisiyargal Sangam (Chennai) . . . 458
S. 13(3)(cc) --Charitable purpose--Charitable trust--Exemption--Remuneration paid to trustee at about one per cent. of total value of activities of trust--Not excessive or unreasonable--Remuneration allowed for similar services in earlier assessment year--Disallowance to be deleted-- PNR Society for Relief and Rehabilitation of the Disabled Trust v. Deputy DIT(Exemption) (Ahd) . . . 465
S. 40(a)(ia) --Business expenditure--Disallowance--Failure to deduct tax at source--Amendment in 2012 to effect assessee not to be deemed in default if recipient has filed return of income and paid taxes within stipulated time--Clarificatory--Matter remanded for verification whether payees had paid tax in time-- ITO v. Dr. Jaideep Kumar Sharma (Delhi) . . . 565
----Business expenditure--Disallowance--Payments liable to deduction of tax at source-- Provision brought by Finance Act, 2012 that assessee not in default where income in question declared by recipient and tax paid thereon--Declaratory and curative in nature and has retrospective effect from April 1, 2005--Matter remanded-- Rajeev Kumar Agarwal v. Addl. CIT (Agra) . . . 479
----Business expenditure--Disallowance--Payments liable to tax deduction at source--Amendment brought in 2010 retrospective--Payment cannot be disallowed if tax deducted at source paid before due date prescribed for filing return under section 139(1) of Act-- Indo Stosec P. Ltd. v. ITO (Mumbai) . . . 543
S. 68 --Cash credits--Share capital--Evidence submitted by assessee establishing identity, genuineness and creditworthiness of shareholders--Failure by Department to rebut evidence--Share premium not to be treated as undisclosed income-- Asst. CIT v. Bahubali Dyes Ltd. (Delhi) . . . 487
S. 80P(2)(a)(i) --Co-operative society--Special deduction under section 80P(2)(a)(i)--Assessee not a credit co-operative bank--Exclusion clause not applicable--Entitled to deduction-- Shree Laxmananda Multipurpose Co-operative Society Ltd. v. ITO (Bangalore) . . . 472
S. 80P(4) --Co-operative society--Special deduction under section 80P(2)(a)(i)--Assessee not a credit co-operative bank--Exclusion clause not applicable--Entitled to deduction-- Shree Laxmananda Multipurpose Co-operative Society Ltd. v. ITO (Bangalore) . . . 472
S. 92CA --International transactions--Arm’s length price--Determination--Software development services--Selection of comparables--Companies having high turnover, companies not qualifying employee cost filter and functionally dissimilar cannot be treated as comparable-- Axsys Healthtech Ltd. v. Deputy CIT (Hyd) . . . 583
----International transactions--Arm’s length price--Determination--Transactional net margin method--Software development services--Determination of operating cost--Contention of assessee that expenditure incurred by it for developing future products should be excluded from operating cost--Failure by Department to consider or comment upon assessee’s contention--Matter remanded to Assessing Officer for examination afresh--Axsys Healthtech Ltd. v. Deputy CIT (Hyd) . . . 583
S. 111A --Capital gains--Conversion of shares held as “stock-in-trade†to “investment†on first day of accounting year and sale of shares immediately--Intention to avail of benefit of exemption and concessional rate of tax--Sale of shares to be assessed as business income-- Indo Stosec P. Ltd. v. ITO (Mumbai) . . . 543
S. 139(1) --Business expenditure--Disallowance--Payments liable to tax deduction at source--Amendment brought in 2010 retrospective--Payment cannot be disallowed if tax deducted at source paid before due date prescribed for filing return under section 139(1) of Act-- Indo Stosec P. Ltd. v. ITO (Mumbai) . . . 543
----Search and seizure--Assessment--Loss--Carry forward--Notice under section 153A to assessee--Effect--Pending assessments abate--Return filed pursuant to notice under section 153A--Carry forward of loss not to be disallowed for belated filing of return--Maithan Ispat Ltd. v. Deputy Commissioner of Income-tax (Kolkata) . . . 549
S. 144C(8) --Dispute Resolution Panel--Delegating power to Assessing Officer--Violation of section 144C--Irregular exercise of power--Matter remanded to Dispute Resolution Panel--Swiber Offshore Construction Pte. Ltd. v. Addl. DIT (International Taxation) (Mumbai) . . . 522
S. 153A(1) --Search and seizure--Assessment--Loss--Carry forward--Notice under section 153A to assessee--Effect--Pending assessments abate--Return filed pursuant to notice under section 153A--Carry forward of loss not to be disallowed for belated filing of return--Maithan Ispat Ltd. v. Deputy Commissioner of Income-tax (Kolkata) . . . 549
S. 250(2)(b) --Appeal to Commissioner (Appeals)--Opportunity of hearing not given to Assessing Officer--Violation of natural justice--Order to be quashed--Matter remanded for grant of adequate opportunity of hearing-- Asst. CIT v. Spice Jet Ltd. (Delhi) . . . 520
S. 253 --Appeal to Appellate Tribunal--Maintainability--Resident company--Appeal to be signed by managing director or director at time of filing of appeal--Appeal signed by unauthorised person not maintainable-- Suvistas Software P. Ltd. v. ITO (Hyd) . . . 539
S. 263 --Revision--Commissioner--Powers--Commissioner cannot invoke jurisdiction on ground of improper enquiry by Assessing Officer or substitute his opinion for that of Assessing Officer--Order not erroneous and prejudicial to Revenue--Commissioner not justified in cancelling assessment-- Gopal Narayan Singh v. Deputy CIT (Patna) . . . 461
R. 46A(1)(d) --Appeal to Commissioner (Appeals)--Power to admit additional evidence--Assessing Officer giving time of five days to file evidence--Not sufficient--Assessing Officer completing assessment without giving sufficient opportunity--Additional evidence to be admitted-- Asst. CIT v. Bahubali Dyes Ltd. (Delhi) . . . 487
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