ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))--PRINT AND ONLINE EDITION
SUBJECT INDEX TO CASES REPORTED
Charitable purpose --Computation of income--Depreciation--Trust registered under section 12A--Claiming depreciation not amount to double deduction--No infirmity in Commissioner (Appeals)’s order--Income-tax Act, 1961-- ITO v. Lamika Educational and Charitable Trust (Chennai) . . . 82
Volume 37 : Part 4 (Issue dated : 26-1-2015)
SUBJECT INDEX TO CASES REPORTED
Business expenditure --Low net profit--Entire expenses incurred duly vouched and supported by necessary documents--Gross profit earned from trading division reasonable--Assessing Officer cannot make ad hoc disallowance without pointing out single instance of inflation of expenditure--Income-tax Act, 1961-- Deputy CIT v. Eicher Motors Ltd. (Delhi) . . . 427
Capital or revenue expenditure --Expenditure incurred on repairs and maintenance--No acquisition of new capital asset--No addition to profit-earning capacity of factory--Revenue expenditure--Income-tax Act, 1961, ss. 30, 37-- Deputy CIT v. Eicher Motors Ltd . (Delhi) . . . 427
----Expenditure incurred on software licences--Assessee not in business of manufacturing software or rendering services through use of software--Payment for application software not resulting in creation of new profit-earning apparatus or source of income--Revenue expenditure--Income-tax Act, 1961, s. 37-- Deputy CIT v. Eicher Motors Ltd. (Delhi) . . . 427
Charitable purposes --Exemption--Investment of funds otherwise than in specified form--Loans given to another charitable institution--Prohibition under section 11(2) and (3)(d) on application of income by way of payment or credit to other trusts as introduced by Finance Act, 2002--Matter to be reconsidered in light of law--Issue of exemption remitted back to Assessing Officer--Income-tax Act, 1961, ss. 11(2), (3)(d), 11(5), 12AA-- ITO v. Believers Church India (Cochin) . . . 495
Co-operative society --Special deduction--Scope of section 80P--Cottage industry--Huge capital outlay, high turnover and large number of workers not reasons to deny exemption--No specific embargo under Act--Assessee entitled to benefit of section 80P--Income-tax Act, 1961, s. 80P(2)(a)(ii)-- Asst. CIT v. Kalikkavalasu Primary Industrial WCS Ltd. (Chennai) . . . 422
Deduction of tax at source --Penalty--Payments to contractors for hiring buses--Is payment for carriage of goods and passengers by any mode of transport other than railways under section 194C and not “rent†for hire of plant and machinery under section 194-I--Penalty cannot be levied--Income-tax Act, 1961, ss. 194C, 194-I, 201, 271C-- Regional Manager, UPSRTC (Ghaziabad Depot) v. Deputy CIT (TDS) (Delhi) . . . 487
Depreciation --Rate of depreciation--Depreciation for electrical equipment on windmill--Functional test whether equipment an integral part of windmill--Failure by Assessing Officer and Commissioner to carry out functional test--Assessee entitled to depreciation at higher rate if electrical equipment is specially designed to suit need of windmills--Matter remanded--Income-tax Act, 1961-- Bhima Jewellery v. Deputy CIT (Cochin) . . . 408
Exemption --Charitable purposes--Definition--Change of law--†Object of general public utility†not to include activity of rendering service in relation to trade, commerce or business--Prior to this charge assessee’s activity of printing and publication of newspaper held charitable by Privy Council--Assessee filing return of fringe benefits--Not carrying on activity of profit and not charitable in nature as per new law--Not entitled for exemption--Income-tax Act, 1961, ss. 2(15), 10(23C)(iv)-- Asst. CIT v. The Tribune Trust (Chandigarh) . . . 468
Export --Exemption--Computer software--Assessee eligible for exemption--Computation of exemption--Disallowance of expenses and addition to income--Such income eligible for exemption under section 10B--Income-tax Act, 1961, s. 10B-- Deputy CIT v. Vertex Infosoft Solution P. Ltd . (Chandigarh) . . . 521
Income --Expenditure in relation to income not includible in taxable income--Dividend--Dividend earned on account of investment made in shares in earlier years--Failure by Assessing Officer to establish nexus between investment and borrowed funds--Administrative expenditure relatable for earning of dividend income--Calculation of disallowance at 0.05 per cent. of average value of investments in shares reasonable and justifiable--Income-tax Act, 1961, s. 14A-- Deputy CIT v. Eicher Motors Ltd. (Delhi) . . . 427
Precedent --High Court--Advance tax--Interest--Assessee claiming to adjust advance tax payable out of cash seized--Question settled by High Court--Special leave petition pending before Supreme Court--Assessing Officer bound to follow decision of High Court--Income-tax Act, 1961, s. 234B-- Asst. CIT v. Hans Raj Gandhi (Chandigarh) . . . 418
Reassessment --Notice--Income escaping assessment--Notice after four years--Validity--Notice issued far outside prescribed period under section 149--Reasons for which second notice issued identical to reasons as in first notice under section 148--Initiation of reassessment proceedings bad in law--Income-tax Act, 1961, ss. 143(3), 148-- GK AK Rathi HUF v. ITO (Mumbai) . . . 501
----Notice--Reason to believe income had escaped assessment--Reasons for making additions with regard to unsecured loans not recorded by Assessing Officer for issuance of notice under section 148--Assessing Officer simply reproducing details received from Director of Income-tax without any verification and examination--Notice and reassessment not valid--Income-tax Act, 1961, ss. 147, 148-- Monarch Educational Society v. ITO (E)(Delhi) . . . 512
Revision --Commissioner--Erroneous and prejudicial to Revenue--Assessing Officer allowing excess depreciation on windmill--Assessee accepting claim as typographical error during revision proceedings--Setting aside of assessment order proper--Income-tax Act, 1961, s. 263-- Bhima Jewellery v. Deputy CIT (Cochin) . . . 408
----Commissioner--Erroneous and prejudicial to Revenue--Condition precedent--Lack of enquiry by Assessing Officer--Assessing Officer accepting claim of assessee without giving reason--Commissioner justified in invoking provisions of section 263--Income-tax Act, 1961, s. 263-- Bhima Jewellery v. Deputy CIT (Cochin) . . . 408
----Powers of Commissioner--Condition precedent for exercise of powers--Assessing Officer allowing share application money and unsecured loan--Assessing Officer calling for all financial details and parties for examination of genuineness of transaction--Failure by Commissioner to prove that view taken by Assessing Officer contrary to law and facts--Justification of payment not sole ground for addition under section 68--Commissioner acting beyond jurisdiction under section 263--Income-tax Act, 1961, ss. 68, 263-- Elder IT Solutions P. Ltd. v. CIT (Mumbai) . . . 443
----Powers of Commissioner--Condition precedent for exercise of powers--Assessing Officer conducting enquiry and allowing depreciation on intangible assets--Commissioner in revision remanding back issue to Assessing Officer to examine afresh--Whether intangible asset business or commercial right a debatable issue--Commissioner not permitted to invoke provisions of section 263 merely because he does not agree with view taken by Assessing Officer--Income-tax Act, 1961, ss. 32, 263-- Elder IT Solutions P. Ltd. v. CIT (Mumbai) . . . 443
Search and seizure --Assessment of third person--Notice under section 153C--Limitation--Assessing Officer empowered to assess or reassess total income of six assessment years immediately preceding assessment year relevant to assessment year in which search conducted--Notice issued to assessee pursuant to search not come within preceding six years and to be quashed--Income-tax Act, 1961, ss. 153A(1)(b), 153C-- R. L. Allied Industries v. ITO (Delhi) . . . 507
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
S. 2(15) --Exemption--Charitable purposes--Definition--Change of law--†Object of general public utility†not to include activity of rendering service in relation to trade, commerce or business--Prior to this charge assessee’s activity of printing and publication of newspaper held charitable by Privy Council--Assessee filing return of fringe benefits--Not carrying on activity of profit and not charitable in nature as per new law--Not entitled for exemption-- Asst. CIT v. The Tribune Trust (Chandigarh) . . . 468
S. 10(23C)(iv) --Exemption--Charitable purposes--Definition--Change of law--†Object of general public utility†not to include activity of rendering service in relation to trade, commerce or business--Prior to this charge assessee’s activity of printing and publication of newspaper held charitable by Privy Council--Assessee filing return of fringe benefits--Not carrying on activity of profit and not charitable in nature as per new law--Not entitled for exemption-- Asst. CIT v. The Tribune Trust (Chandigarh) . . . 468
S. 10B --Export--Exemption--Computer software--Assessee eligible for exemption--Computation of exemption--Disallowance of expenses and addition to income--Such income eligible for exemption under section 10B-- Deputy CIT v. Vertex Infosoft Solution P. Ltd . (Chandigarh) . . . 521
S. 11(2) --Charitable purposes--Exemption--Investment of funds otherwise than in specified form--Loans given to another charitable institution--Prohibition under section 11(2) and (3)(d) on application of income by way of payment or credit to other trusts as introduced by Finance Act, 2002--Matter to be reconsidered in light of law--Issue of exemption remitted back to Assessing Officer-- ITO v. Believers Church India (Cochin) . . . 495
S. 11(3)(d) --Charitable purposes--Exemption--Investment of funds otherwise than in specified form--Loans given to another charitable institution--Prohibition under section 11(2) and (3)(d) on application of income by way of payment or credit to other trusts as introduced by Finance Act, 2002--Matter to be reconsidered in light of law--Issue of exemption remitted back to Assessing Officer-- ITO v. Believers Church India (Cochin) . . . 495
S. 11(5) --Charitable purposes--Exemption--Investment of funds otherwise than in specified form--Loans given to another charitable institution--Prohibition under section 11(2) and (3)(d) on application of income by way of payment or credit to other trusts as introduced by Finance Act, 2002--Matter to be reconsidered in light of law--Issue of exemption remitted back to Assessing Officer-- ITO v. Believers Church India (Cochin) . . . 495
S. 12AA --Charitable purposes--Exemption--Investment of funds otherwise than in specified form--Loans given to another charitable institution--Prohibition under section 11(2) and (3)(d) on application of income by way of payment or credit to other trusts as introduced by Finance Act, 2002--Matter to be reconsidered in light of law--Issue of exemption remitted back to Assessing Officer-- ITO v. Believers Church India (Cochin) . . . 495
S. 14A --Income--Expenditure in relation to income not includible in taxable income--Dividend--Dividend earned on account of investment made in shares in earlier years--Failure by Assessing Officer to establish nexus between investment and borrowed funds--Administrative expenditure relatable for earning of dividend income--Calculation of disallowance at 0.05 per cent. of average value of investments in shares reasonable and justifiable-- Deputy CIT v. Eicher Motors Ltd. (Delhi) . . . 427
S. 30 --Capital or revenue expenditure--Expenditure incurred on repairs and maintenance--No acquisition of new capital asset--No addition to profit-earning capacity of factory--Revenue expenditure-- Deputy CIT v. Eicher Motors Ltd. (Delhi) . . . 427
S. 32 --Revision--Powers of Commissioner--Condition precedent for exercise of powers--Assessing Officer conducting enquiry and allowing depreciation on intangible assets--Commissioner in revision remanding back issue to Assessing Officer to examine afresh--Whether intangible asset business or commercial right a debatable issue--Commissioner not permitted to invoke provisions of section 263 merely because he does not agree with view taken by Assessing Officer-- Elder IT Solutions P. Ltd. v. CIT (Mumbai) . . . 443
S. 37 --Capital or revenue expenditure--Expenditure incurred on repairs and maintenance--No acquisition of new capital asset--No addition to profit-earning capacity of factory--Revenue expenditure-- Deputy CIT v. Eicher Motors Ltd. (Delhi) . . . 427
----Capital or revenue expenditure--Expenditure incurred on software licences--Assessee not in business of manufacturing software or rendering services through use of software--Payment for application software not resulting in creation of new profit-earning apparatus or source of income--Revenue expenditure-- Deputy CIT v. Eicher Motors Ltd . (Delhi) . . . 427
S. 68 --Revision--Powers of Commissioner--Condition precedent for exercise of powers--Assessing Officer allowing share application money and unsecured loan--Assessing Officer calling for all financial details and parties for examination of genuineness of transaction--Failure by Commissioner to prove that view taken by Assessing Officer contrary to law and facts--Justification of payment not sole ground for addition under section 68--Commissioner acting beyond jurisdiction under section 263-- Elder IT Solutions P. Ltd. v. CIT (Mumbai) . . . 443
S. 80P(2)(a)(ii) --Co-operative society--Special deduction--Scope of section 80P--Cottage industry--Huge capital outlay, high turnover and large number of workers not reasons to deny exemption--No specific embargo under Act--Assessee entitled to benefit of section 80P-- Asst. CIT v. Kalikkavalasu Primary Industrial WCS Ltd. (Chennai) . . . 422
S. 143(3) --Reassessment--Notice--Income escaping assessment--Notice after four years--Validity--Notice issued far outside prescribed period under section 149--Reasons for which second notice issued identical to reasons as in first notice under section 148--Initiation of reassessment proceedings bad in law-- GK AK Rathi HUF v. ITO (Mumbai) . . . 501
S. 147 --Reassessment--Notice--Reason to believe income had escaped assessment--Reasons for making additions with regard to unsecured loans not recorded by Assessing Officer for issuance of notice under section 148--Assessing Officer simply reproducing details received from Director of Income-tax without any verification and examination--Notice and reassessment not valid-- Monarch Educational Society v. ITO (E) (Delhi) . . . 512
S. 148 --Reassessment--Notice--Income escaping assessment--Notice after four years--Validity--Notice issued far outside prescribed period under section 149--Reasons for which second notice issued identical to reasons as in first notice under section 148--Initiation of reassessment proceedings bad in law-- GK AK Rathi HUF v. ITO (Mumbai) . . . 501
----Reassessment--Notice--Reason to believe income had escaped assessment--Reasons for making additions with regard to unsecured loans not recorded by Assessing Officer for issuance of notice under section 148--Assessing Officer simply reproducing details received from Director of Income-tax without any verification and examination--Notice and reassessment not valid-- Monarch Educational Society v. ITO (E) (Delhi) . . . 512
S. 153A(1)(b) --Search and seizure--Assessment of third person--Notice under section 153C--Limitation--Assessing Officer empowered to assess or reassess total income of six assessment years immediately preceding assessment year relevant to assessment year in which search conducted--Notice issued to assessee pursuant to search not come within preceding six years and to be quashed-- R. L. Allied Industries v. ITO (Delhi) . . . 507
S. 153C --Search and seizure--Assessment of third person--Notice under section 153C--Limitation--Assessing Officer empowered to assess or reassess total income of six assessment years immediately preceding assessment year relevant to assessment year in which search conducted--Notice issued to assessee pursuant to search not come within preceding six years and to be quashed-- R. L. Allied Industries v. ITO (Delhi) . . . 507
S. 194C --Deduction of tax at source--Penalty--Payments to contractors for hiring buses--Is payment for carriage of goods and passengers by any mode of transport other than railways under section 194C and not “rent†for hire of plant and machinery under section 194-I--Penalty cannot be levied-- Regional Manager, UPSRTC (Ghaziabad Depot) v. Deputy CIT (TDS) (Delhi) . . . 487
S. 194-I --Deduction of tax at source--Penalty--Payments to contractors for hiring buses--Is payment for carriage of goods and passengers by any mode of transport other than railways under section 194C and not “rent†for hire of plant and machinery under section 194-I--Penalty cannot be levied-- Regional Manager, UPSRTC (Ghaziabad Depot) v. Deputy CIT (TDS) (Delhi) . . . 487
S. 201 --Deduction of tax at source--Penalty--Payments to contractors for hiring buses--Is payment for carriage of goods and passengers by any mode of transport other than railways under section 194C and not “rent†for hire of plant and machinery under section 194-I--Penalty cannot be levied-- Regional Manager, UPSRTC (Ghaziabad Depot) v. Deputy CIT (TDS) (Delhi) . . . 487
S. 234B --Precedent--High Court--Advance tax--Interest--Assessee claiming to adjust advance tax payable out of cash seized--Question settled by High Court--Special leave petition pending before Supreme Court--Assessing Officer bound to follow decision of High Court-- Asst. CIT v. Hans Raj Gandhi (Chandigarh) . . . 418
S. 263 --Revision--Commissioner--Erroneous and prejudicial to Revenue--Assessing Officer allowing excess depreciation on windmill--Assessee accepting claim as typographical error during revision proceedings--Setting aside of assessment order proper-- Bhima Jewellery v. Deputy CIT (Cochin) . . . 408
----Revision--Commissioner--Erroneous and prejudicial to Revenue--Condition precedent--Lack of enquiry by Assessing Officer--Assessing Officer accepting claim of assessee without giving reason--Commissioner justified in invoking provisions of section 263-- Bhima Jewellery v. Deputy CIT (Cochin) . . . 408
----Revision--Powers of Commissioner--Condition precedent for exercise of powers--Assessing Officer allowing share application money and unsecured loan--Assessing Officer calling for all financial details and parties for examination of genuineness of transaction--Failure by Commissioner to prove that view taken by Assessing Officer contrary to law and facts--Justification of payment not sole ground for addition under section 68--Commissioner acting beyond jurisdiction under section 263-- Elder IT Solutions P. Ltd. v. CIT (Mumbai) . . . 443
----Revision--Powers of Commissioner--Condition precedent for exercise of powers--Assessing Officer conducting enquiry and allowing depreciation on intangible assets--Commissioner in revision remanding back issue to Assessing Officer to examine afresh--Whether intangible asset business or commercial right a debatable issue--Commissioner not permitted to invoke provisions of section 263 merely because he does not agree with view taken by Assessing Officer-- Elder IT Solutions P. Ltd. v. CIT (Mumbai) . . . 443
S. 271C --Deduction of tax at source--Penalty--Payments to contractors for hiring buses--Is payment for carriage of goods and passengers by any mode of transport other than railways under section 194C and not “rent†for hire of plant and machinery under section 194-I--Penalty cannot be levied-- Regional Manager, UPSRTC (Ghaziabad Depot) v. Deputy CIT (TDS) (Delhi) . . . 487
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