Volume 34 : Part 5 (Issue dated : 22-9-2014)

 

ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))--PRINT AND ONLINE EDITION

 

ONLINE EDITION

SUBJECT INDEX TO CASES REPORTED

Co-operative society --Special deduction under section 80P(2)(a)(i)--Credit facilities to associate members--Term “member†includes “associate member†--Assessee entitled to deduction--Income-tax Act, 1961, s. 80P(2)(a)(i)-- S -6608 Narasingapuram PACB Ltd. v. ITO (Chennai) . . . 246

Penalty --Concealment of income--Refund of redemption fine paid to Customs Department pursuant to order of Tribunal--Appeal of Customs Department pending before High Court--Matter not attaining finality--Refund not taxable--Not a case of concealment of income and furnishing of inaccurate particulars--Penalty deleted--Income-tax Act, 1961, s. 271(1)(c)--Viraj Impex P. Ltd. v. Asst. CIT (Mumbai) . . . 250

PRINT EDITION

Volume 34 : Part 5 (Issue dated : 22-9-2014)

SUBJECT INDEX TO CASES REPORTED

Business expenditure --Amortisation of preliminary expenses--Assessee executing infrastructure projects on build-operate-transfer basis--Assessee building road and collecting toll tax--Assets owned by State Government and used for public purpose--Claim to deduction of expenditure on basis of terms and condition of contract and estimated toll receipts during toll period of respective project--Entitled to be amortised on matching principle of accountancy--Income-tax Act, 1961, s. 35D-- Asst. CIT v. TCI Infrastructure Finance Ltd.(Jaipur) . . . 628

Business income or income from house property --Lease of building--No business activity--Rental income assessable under income from house property--Depreciation not allowable--Income-tax Act, 1961-- Amalgam Foods Ltd. v. Deputy CIT (Cochin) . . . 691

Capital gains --Deduction under section 54B--Sale of agricultural land in joint names of assessee and his son and purchase of new land in assessee’s son’s name--Assessee entitled to deduction--Income-tax Act, 1961, s. 54B-- Bant Singh v. ITO(Chandigarh) . . . 679

Capital or revenue expenditure --Software expenses--Expenditure on upgrading software--Revenue expenditure--Income-tax Act, 1961-- Deputy CIT v. Madras Engineering Industries P. Ltd. (Chennai) . . . 703

Deduction of tax at source --Assessee hiring tankers on contract--Forms 15-I and 15-J filed before prescribed authority and in time--Disallowance not permissible under section 40(a)(ia)--Income-tax Act, 1961, s. 40(a)(ia)-- Deputy CIT v. Vikas Sharma (Chandigarh) . . . 617

----Co-operative bank--Failure by assessee to deduct tax on payment of interest to depositors--Declarations in Forms 15G and 15H filed depositors--ITO cannot reject declarations filed before Commissioner--Quantum of amount not remitted to Government not mentioned--Matter remanded--Income-tax Act, 1961, ss. 194A, 197A(1A), 201(1), (1A)--Ernakulam District Co-op. Bank Ltd. v. ITO (Cochin) . . . 662

----Payment towards transmission of electricity--Not fees for technical services--Section 194J not applicable--Income-tax Act, 1961, s. 194J-- Deputy CIT v. Delhi Transco Ltd. (Delhi) . . . 669

Depreciation --Lease of plant and machinery with building--Assessing Officer failing to examine whether assessee carried manufacturing activity--Matter remanded to Assessing Officer--Income-tax Act, 1961, s. 32-- Amalgam Foods Ltd. v. Deputy CIT (Cochin) . . . 691

Exemption --Export--Gains due to fluctuation of foreign exchange rates--Excluded from both export as well as total turnover--Income-tax Act, 1961, s. 10AA-- Deputy CIT v. Madras Engineering Industries P. Ltd. (Chennai) . . . 703

----Export--Travelling expenses and communication charges--Travel expenses and communication charges to be excluded both from export as well as total turnover--Income-tax Act, 1961, s. 10B-- Asst. CIT v. Triad Software P. Ltd. (Chennai) . . . 605

Export --Exemption--Telecommunication, insurance and expenses incurred in foreign exchange to be excluded from export turnover and total turnover--Income-tax Act, 1961, s. 10A-- Asst. CIT v. Think Soft Global Services P. Ltd. (Chennai) . . . 633

Income --Accrual--Interest--Non-banking financial company--Mercantile system of accounting--Borrower-companies having substantial assets--Interest not illusory--Failure by assessee to show that loan became non-performing asset--Prudential norms not applicable--Interest accrued to assessee and assessable--Income-tax Act, 1961, s. 5-- ITO v. Tradelink Securities Ltd. (Kolkata) . . . 641

----Disallowance of expenditure in relation to exempt income--Assessee not claiming expenditure in its profit and loss account--Onus on Assessing Officer to prove that out of expenditure incurred under various heads sums in question related to earning of exempt income--Provisions of rule 8D should not be applied in mechanical way--Income-tax Act, 1961, s. 14A--Income-tax Rules, 1962, r. 8D-- Asst. CIT v. Iqbal M. Chagala (Mumbai) . . . 636

Income from undisclosed sources --Cash deposit--Assessee declaring professional receipts--Approval of cash flow statement by Tribunal--Addition to be deleted--Income-tax Act, 1961-- Dr. Binoy Kumar Singh (HUF) v. Asst. CIT (Patna) . . . 717

----Rent--Commissioner (Appeals) estimating floor-wise rent taking rent received from bank as basis--Other flats let for residential purposes--Estimation on basis of rent received on commercial basis not justified--No evidence to show assessee collected higher rent than that declared--Addition to be deleted--Income-tax Act, 1961-- Dr. Binoy Kumar Singh (HUF) v. Asst. CIT (Patna) . . . 717

Industrial undertaking --Special deduction under section 80-IA--Commissioner (Appeals) allowing deduction following decision of Tribunal--That Department challenged decision of Tribunal before High Court not ground to disallow deduction--Income-tax Act, 1961, s. 80-IA(4)-- Asst. CIT v. JWC Logistics Park P. Ltd. (Pune) . . . 598

International transactions --Arm’s length price--Advertisement, marketing and promotion leading to brand building--Business promotion expenses to be treated as directly connected with sales--Only advertisement expenses liable to be considered for purpose of advertisement, marketing and promotion leading to brand building--Transfer Pricing Officer to pass consequential order after verification--Matter remanded--Income-tax Act, 1961--Panasonic Sales and Services (I) Company Ltd. v. Asst. CIT (Chennai) . . . 683

----Arm’s length price--Determination--Purchase of goods from associated enterprises for sale in domestic market--Cash discounts in nature of incentives for early payments for sales made by assessee--Cash discount, outward freight and storage charges to be treated as selling and distribution expenses and not to be reduced from selling price--Income-tax Act, 1961-- Panasonic Sales and Services (I) Company Ltd. v. Asst. CIT (Chennai) . . . 683

----Arm’s length price--Determination--Transactional net margin method--Failure by Department to provide list of comparables considered for determination of arm’s length price--Objections before Department with respect to business activities of comparables not addressed--Failure of natural justice--Order set aside and matter remanded--Income-tax Act, 1961, s. 92CA(3)-- OKS Prepress Services P. Ltd. v. ITO (Chennai) . . . 648

----Arm’s length price--Determination--Transactional net margin method--Software development services--Selection of comparables--Functionally different companies to be excluded from comparables--Income-tax Act, 1961, s. 92CA-- Open Solutions Software Services P. Ltd. v. ITO (Delhi) . . . 609

Loss --Business loss--Foreign currency loan--Failure of Assessing Officer to examine whether assessee repaid loan or loan outstanding--Matter remanded--Income-tax Act, 1961, s. 43A-- Deputy CIT v. Madras Engineering Industries P. Ltd. (Chennai) . . . 703

Penalty --Concealment of income--Additions deleted by Tribunal--No penalty imposable under section 271(1)(c)--Income-tax Act, 1961, s. 271(1)(c)-- Deputy CIT v. Delhi Transco Ltd.(Delhi) . . . 669

----Limitation--Repayment of loan otherwise than by bank draft or cheque--Penalty to be levied by Joint Commissioner, but Assessing Officer in first instance to be satisfied of contravention and refer matter--Period of limitation to be counted from date of initiation of penalty proceedings by Assessing Officer not date of notice by Joint Commissioner--Penalty proceedings barred by limitation--Income-tax Act, 1961, ss. 269T, 271E, 275(1)(c)-- ITO v. Dinesh Jain (Delhi) . . . 709

----Repayment of loan otherwise than by cheque or bank draft--Assessee assigning loan by way of journal entry to his wife--Only a substitution of one debtor by another debtor--No actual repayment of loan--No violation of section 269T--Assessee not liable to be penalised--Income-tax Act, 1961, ss. 269T, 271E-- ITO v. Dinesh Jain (Delhi) . . . 709

Precedent --Appellate Tribunal--Order of Special Bench--Binding--Pendency of appeal before High Court not to affect binding nature-- Asst. CIT v. Triad Software P. Ltd. (Chennai) . . . 605

Reassessment --Notice--Reopening of assessment on identical facts as original assessment--Not permissible--Income-tax Act, 1961, ss. 147, 148-- Deputy CIT v. Vikas Sharma (Chandigarh) . . . 617

----Notice--Validity--Conversion of firm to company--Notice issued in name of firm after conversion--Not relevant that Assessing Officer aware of dissolution of firm--Issue of notice in name of dead person void--Income-tax Act, 1961, s. 148-- Asst. CIT v. DLF Cyber City Developers Ltd. (Delhi) . . . 696

Unexplained investment --Cost of construction of property--Assessing Officer not recording reasons for making reference to Departmental Valuation Officer--No evidence found in search with regard to undisclosed investment in construction--Report of registered valuer submitted by assessee not to be rejected--Addition not justified--Income-tax Act, 1961, s. 69-- Dr. Binoy Kumar Singh (HUF) v. Asst. CIT (Patna) . . . 717

Valuation of stock --Closing stock--Same material mentioned in profit and loss account in consumption and in sale--No difference between figures of consumption of raw material and sales on calculation--All invoices containing inputs sold as such without processing, entitling assessee to claim Cenvat credit--Failure by Assessing Officer to find discrepancy in documents filed by assessee--Addition on basis of conjectures and surmises to be deleted--Income-tax Act, 1961-- Deputy CIT v. Bry Air (Asia) P. Ltd. (Delhi) . . . 654

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961

S. 5 --Income--Accrual--Interest--Non-banking financial company--Mercantile system of accounting--Borrower-companies having substantial assets--Interest not illusory--Failure by assessee to show that loan became non-performing asset--Prudential norms not applicable--Interest accrued to assessee and assessable-- ITO v. Tradelink Securities Ltd. (Kolkata) . . . 641

S. 10A --Export--Exemption--Telecommunication, insurance and expenses incurred in foreign exchange to be excluded from export turnover and total turnover-- Asst. CIT v. Think Soft Global Services P. Ltd. (Chennai) . . . 633

S. 10AA --Exemption--Export--Gains due to fluctuation of foreign exchange rates--Excluded from both export as well as total turnover-- Deputy CIT v. Madras Engineering Industries P. Ltd. (Chennai) . . . 703

S. 10B --Exemption--Export--Travelling expenses and communication charges--Travel expenses and communication charges to be excluded both from export as well as total turnover-- Asst. CIT v. Triad Software P. Ltd. (Chennai) . . . 605

S. 14A --Income--Disallowance of expenditure in relation to exempt income--Assessee not claiming expenditure in its profit and loss account--Onus on Assessing Officer to prove that out of expenditure incurred under various heads sums in question related to earning of exempt income--Provisions of rule 8D should not be applied in mechanical way-- Asst. CIT v. Iqbal M. Chagala (Mumbai) . . . 636

S. 32 --Depreciation--Lease of plant and machinery with building--Assessing Officer failing to examine whether assessee carried manufacturing activity--Matter remanded to Assessing Officer-- Amalgam Foods Ltd. v. Deputy CIT (Cochin) . . . 691

S. 35D --Business expenditure--Amortisation of preliminary expenses--Assessee executing infrastructure projects on build-operate- transfer basis--Assessee building road and collecting toll tax--Assets owned by State Government and used for public purpose--Claim to deduction of expenditure on basis of terms and condition of contract and estimated toll receipts during toll period of respective project--Entitled to be amortised on matching principle of accountancy-- Asst. CIT v. TCI Infrastructure Finance Ltd. (Jaipur) . . . 628

S. 40(a)(ia) --Deduction of tax at source--Assessee hiring tankers on contract--Forms 15-I and 15-J filed before prescribed authority and in time--Disallowance not permissible under section 40(a)(ia)-- Deputy CIT v. Vikas Sharma (Chandigarh) . . . 617

S. 43A --Loss--Business loss--Foreign currency loan--Failure of Assessing Officer to examine whether assessee repaid loan or loan outstanding--Matter remanded-- Deputy CIT v. Madras Engineering Industries P. Ltd. (Chennai) . . . 703

S. 54B --Capital gains--Deduction under section 54B--Sale of agricultural land in joint names of assessee and his son and purchase of new land in assessee’s son’s name--Assessee entitled to deduction-- Bant Singh v. ITO (Chandigarh) . . . 679

S. 69 --Unexplained investment--Cost of construction of property--Assessing Officer not recording reasons for making reference to Departmental Valuation Officer--No evidence found in search with regard to undisclosed investment in construction--Report of registered valuer submitted by assessee not to be rejected--Addition not justified-- Dr. Binoy Kumar Singh (HUF) v. Asst. CIT (Patna) . . . 717

S. 80-IA(4) --Industrial undertaking--Special deduction under section 80-IA--Commissioner (Appeals) allowing deduction following decision of Tribunal--That Department challenged decision of Tribunal before High Court not ground to disallow deduction-- Asst. CIT v. JWC Logistics Park P. Ltd. (Pune) . . . 598

S. 92CA --International transactions--Arm’s length price--Determination--Transactional net margin method--Software development services--Selection of comparables--Functionally different companies to be excluded from comparables-- Open Solutions Software Services P. Ltd. v. ITO (Delhi) . . . 609

S. 92CA(3) --International transactions--Arm’s length price--Determination--Transactional net margin method--Failure by Department to provide list of comparables considered for determination of arm’s length price--Objections before Department with respect to business activities of comparables not addressed--Failure of natural justice--Order set aside and matter remanded-- OKS Prepress Services P. Ltd. v. ITO (Chennai) . . . 648

S. 147 --Reassessment--Notice--Reopening of assessment on identical facts as original assessment--Not permissible-- Deputy CIT v. Vikas Sharma (Chandigarh) . . . 617

S. 148 --Reassessment--Notice--Reopening of assessment on identical facts as original assessment--Not permissible-- Deputy CIT v. Vikas Sharma (Chandigarh) . . . 617

----Reassessment--Notice--Validity--Conversion of firm to company--Notice issued in name of firm after conversion--Not relevant that Assessing Officer aware of dissolution of firm--Issue of notice in name of dead person void-- Asst. CIT v. DLF Cyber City Developers Ltd.(Delhi) . . . 696

S. 194A --Deduction of tax at source--Co-operative bank--Failure by assessee to deduct tax on payment of interest to depositors--Declarations in Forms 15G and 15H filed depositors--ITO cannot reject declarations filed before Commissioner--Quantum of amount not remitted to Government not mentioned--Matter remanded-- Ernakulam District Co-op. Bank Ltd. v. ITO(Cochin) . . . 662

S. 194J --Deduction of tax at source--Payment towards transmission of electricity--Not fees for technical services--Section 194J not applicable-- Deputy CIT v. Delhi Transco Ltd. (Delhi) . . . 669

S. 197A(1A) --Deduction of tax at source--Co-operative bank--Failure by assessee to deduct tax on payment of interest to depositors--Declarations in Forms 15G and 15H filed depositors--ITO cannot reject declarations filed before Commissioner--Quantum of amount not remitted to Government not mentioned--Matter remanded-- Ernakulam District Co-op. Bank Ltd. v. ITO (Cochin) . . . 662

S. 201(1) --Deduction of tax at source--Co-operative bank--Failure by assessee to deduct tax on payment of interest to depositors--Declarations in Forms 15G and 15H filed depositors--ITO cannot reject declarations filed before Commissioner--Quantum of amount not remitted to Government not mentioned--Matter remanded-- Ernakulam District Co-op. Bank Ltd. v. ITO (Cochin) . . . 662

S. 201(1A) --Deduction of tax at source--Co-operative bank--Failure by assessee to deduct tax on payment of interest to depositors--Declarations in Forms 15G and 15H filed depositors--ITO cannot reject declarations filed before Commissioner--Quantum of amount not remitted to Government not mentioned--Matter remanded-- Ernakulam District Co-op. Bank Ltd. v. ITO (Cochin) . . . 662

S. 269T --Penalty--Limitation--Repayment of loan otherwise than by bank draft or cheque--Penalty to be levied by Joint Commissioner, but Assessing Officer in first instance to be satisfied of contravention and refer matter--Period of limitation to be counted from date of initiation of penalty proceedings by Assessing Officer not date of notice by Joint Commissioner--Penalty proceedings barred by limitation-- ITO v. Dinesh Jain (Delhi) . . . 709

----Penalty--Repayment of loan otherwise than by cheque or bank draft--Assessee assigning loan by way of journal entry to his wife--Only a substitution of one debtor by another debtor--No actual repayment of loan--No violation of section 269T--Assessee not liable to be penalised-- ITO v. Dinesh Jain (Delhi) . . . 709

S. 271(1)(c) --Penalty--Concealment of income--Additions deleted by Tribunal--No penalty imposable under section 271(1)(c)-- Deputy CIT v. Delhi Transco Ltd. (Delhi) . . . 669

S. 271E --Penalty--Limitation--Repayment of loan otherwise than by bank draft or cheque--Penalty to be levied by Joint Commissioner, but Assessing Officer in first instance to be satisfied of contravention and refer matter--Period of limitation to be counted from date of initiation of penalty proceedings by Assessing Officer not date of notice by Joint Commissioner--Penalty proceedings barred by limitation-- ITO v. Dinesh Jain (Delhi) . . . 709

----Penalty--Repayment of loan otherwise than by cheque or bank draft--Assessee assigning loan by way of journal entry to his wife--Only a substitution of one debtor by another debtor--No actual repayment of loan--No violation of section 269T--Assessee not liable to be penalised-- ITO v. Dinesh Jain (Delhi) . . . 709

S. 275(1)(c) --Penalty--Limitation--Repayment of loan otherwise than by bank draft or cheque--Penalty to be levied by Joint Commissioner, but Assessing Officer in first instance to be satisfied of contravention and refer matter--Period of limitation to be counted from date of initiation of penalty proceedings by Assessing Officer not date of notice by Joint Commissioner--Penalty proceedings barred by limitation-- ITO v. Dinesh Jain (Delhi) . . . 709

Income-tax Rules, 1962

R. 8D --Income--Disallowance of expenditure in relation to exempt income--Assessee not claiming expenditure in its profit and loss account--Onus on Assessing Officer to prove that out of expenditure incurred under various heads sums in question related to earning of exempt income--Provisions of rule 8D should not be applied in mechanical way-- Asst. CIT v. Iqbal M. Chagala (Mumbai) . . . 636