ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))--PRINT AND ONLINE EDITION
SUBJECT INDEX TO CASES REPORTED
Bad debt --Condition precedent for deduction--Law applicable--Effect of section 36(1)(vii)--Sufficient if amount is written off in accounts--Not necessary to prove debt bad--Income-tax Act, 1961, s. 36(1)(vii)-- Ushodaya Enterprises Ltd. v. Asst. CIT (Hyd) . . . 114
Capital or revenue expenditure --Sum paid to VSNL for surrender of lease agreement in respect of transponders--Agreement terminated and sum paid to lessor towards premature termination of lease--Capital in nature--Income-tax Act, 1961-- Ushodaya Enterprises Ltd. v. Asst. CIT (Hyd) . . . 114
Charitable purpose --Computation of income--Carry forward and set off--Income to be computed on commercial principles--Deficit of trust allowed to be carried forward to be set off in subsequent years--Income-tax Act, 1961-- ITO (Exemption) v. Bhatia General Hospital (Mumbai) . . . 110
----Depreciation--Assessee running hospital--Assets which have outlived their useful life--Prohibition on sale as scrap according to rules governing hospital--Additional depreciation to be allowed--Income-tax Act, 1961, s. 11-- ITO (Exemption) v. Bhatia General Hospital (Mumbai) . . . 110
Depreciation --Higher rate of depreciation--Printers, scanners and modems are part of computer system and to be treated as computer--Entitled to higher rate of depreciation--Income-tax Act, 1961-- Ushodaya Enterprises Ltd. v. Asst. CIT (Hyd) . . . 114
Volume 37 : Part 6 (Issue dated : 9-2-2015)
SUBJECT INDEX TO CASES REPORTED
Appeal to Commissioner (Appeals) --Powers of Commissioner (Appeals)--Co-extensive with those of Assessing Officer--Failure by Assessing Officer in recording proper satisfaction can be made good by Commissioner (Appeals)--Income-tax Act, 1961-- T and T Motors Ltd. v. Addl. CIT (Delhi) . . . 682
Business expenditure --Assessee engaging in drafting documents and sale of stamps--Duty of assessee to maintain proper books of account--Total receipts cannot be ascertained without proper records--Order restricting office expenses to forty per cent proper--Income-tax Act, 1961-- K. Govinda Pillai v. Deputy CIT (Cochin) . . . 772
----Disallowance--Expenditure on purpose which is illegal or offence--Fees paid to advocate for seeking bail for assessee’s driver on account of road accident--Not allowable--Expenditure incurred for certification of net worth of directors for obtaining loan--Allowable--Income-tax Act, 1961, s. 37(1)-- T and T Motors Ltd. v. Addl. CIT (Delhi) . . . 682
----Share of expenses on common effluent treatment plant--Amount payable by virtue of notice of demand issued by Government--Allowable as deduction--Income-tax Act, 1961-- T and T Motors Ltd. v. Addl. CIT (Delhi) . . . 682
Cash credit --Burden of proof--Burden on assessee to prove genuineness and creditworthiness of transaction and identity of parties--Failure by assessee to prove genuineness of transaction to extent of Rs. 7 lakhs--Addition proper--Income-tax Act, 1961--K. Govinda Pillai v. Deputy CIT (Cochin) . . . 772
Exemption --Charitable purposes--Chamber of Commerce--Assessee carrying out activities incidental to main object of association such as advancement and development of trade, commerce and industry in India--Activities not in nature of business and no motive to earn profit--Entitled to exemption under section 11--Assessee’s primary purpose advancement of objects of general public utility--Remains charitable even if activity incidental or ancillary to achieving main purpose profitable in nature--Not hit by section 2(15)--Income-tax Act, 1961, ss. 2(15), 11, 12A-- Indian Chamber of Commerce v. ITO (Exemption-I)(Kolkata) . . . 688
Income --Disallowance of expenditure in relation to exempt income--Interest towards investment in shares and mutual funds--Assessee's share capital with reserves and surpluses far in excess of amount invested in securities fetching exempt income--Interest cannot be disallowed--Income-tax Act, 1961, s. 14A--Income-tax Rules, 1962, r. 8D-- T and T Motors Ltd. v. Addl. CIT (Delhi) . . . 682
----Disallowance of expenditure in relation to exempt income--Rule 8D mandatory--Disallowance of amount equal to one-half per cent. of average of value of investment--Proper--Income-tax Act, 1961, s. 14A--Income-tax Rules, 1962, r. 8D-- T and T Motors Ltd. v. Addl. CIT (Delhi) . . . 682
Industrial undertaking --Special deduction--Computation--Determination of initial assessment year--Period of ten years to be reckoned from date assessee’s business started functioning--Income-tax Act, 1961, s. 80-IA-- Escapade Resorts P. Ltd. v. Asst. CIT (Cochin) . . . 766
International transactions --Arm’s length price--Determination--Corporate support and research and development services segments--Transactional net margin method--Selection of comparables--Companies having related party transactions to extent of more than 25 per cent. cannot be treated as comparable--Companies having outsourcing activity, functional dissimilarity, diversified activities and element of brand value associated with them not comparable--Company earning substantial revenue from research and development activity to be treated as comparable--Risk or working capital adjustment--Requiring verification by Transfer Pricing Officer--Matter remanded--Income-tax Act, 1961, s. 92CA-- International Speciality Products (I) P. Ltd. v. ITO (Hyd) . . . 787
Penalty --Concealment of income or furnishing of inaccurate particulars--Penalty based on addition to income--High Court admitting substantial question of law on question of addition--Penalty cannot be imposed on debatable question--Income-tax Act, 1961, s. 271(1)(c)--Schrader Duncan Ltd. v. Addl. CIT (Mumbai) . . . 674
Scientific research expenditure --Expenditure on research and development for production of new drugs--Procedure--Failure by Assessing Officer to follow correct procedure provided under section 35(3) to determine whether activity constitute scientific research--Tribunal cannot decide claim of deduction without following correct procedure--Matter remanded to Assessing Officer--Income-tax Act, 1961, s. 35(1), (3)-- Deputy CIT v. Bharat Biotech International Ltd. (Hyd) . . . 750
Search and seizure --Statement recorded in course of a search operation--Part of seized material--Income-tax Act, 1961, s. 132(4)-- K. Govinda Pillai v. Deputy CIT (Cochin) . . . 772
Words and phrases --†Business†--Meaning of-- Indian Chamber of Commerce v. ITO (Exemption-I) (Kolkata) . . . 688
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
S. 2(15) --Exemption--Charitable purposes--Chamber of Commerce--Assessee carrying out activities incidental to main object of association such as advancement and development of trade, commerce and industry in India--Activities not in nature of business and no motive to earn profit--Entitled to exemption under section 11--Assessee’s primary purpose advancement of objects of general public utility--Remains charitable even if activity incidental or ancillary to achieving main purpose profitable in nature--Not hit by section 2(15)-- Indian Chamber of Commerce v. ITO (Exemption-I) (Kolkata) . . . 688
S. 11 --Exemption--Charitable purposes--Chamber of Commerce--Assessee carrying out activities incidental to main object of association such as advancement and development of trade, commerce and industry in India--Activities not in nature of business and no motive to earn profit--Entitled to exemption under section 11--Assessee’s primary purpose advancement of objects of general public utility--Remains charitable even if activity incidental or ancillary to achieving main purpose profitable in nature--Not hit by section 2(15)-- Indian Chamber of Commerce v. ITO (Exemption-I) (Kolkata) . . . 688
S. 12A --Exemption--Charitable purposes--Chamber of Commerce--Assessee carrying out activities incidental to main object of association such as advancement and development of trade, commerce and industry in India--Activities not in nature of business and no motive to earn profit--Entitled to exemption under section 11--Assessee’s primary purpose advancement of objects of general public utility--Remains charitable even if activity incidental or ancillary to achieving main purpose profitable in nature--Not hit by section 2(15)-- Indian Chamber of Commerce v. ITO (Exemption-I) (Kolkata) . . . 688
S. 14A --Income--Disallowance of expenditure in relation to exempt income--Interest towards investment in shares and mutual funds--Assessee's share capital with reserves and surpluses far in excess of amount invested in securities fetching exempt income--Interest cannot be disallowed-- T and T Motors Ltd. v. Addl. CIT (Delhi) . . . 682
----Income--Disallowance of expenditure in relation to exempt income--Rule 8D mandatory--Disallowance of amount equal to one-half per cent. of average of value of investment--Proper-- T and T Motors Ltd. v. Addl. CIT (Delhi) . . . 682
S. 35(1) --Scientific research expenditure--Expenditure on research and development for production of new drugs--Procedure--Failure by Assessing Officer to follow correct procedure provided under section 35(3) to determine whether activity constitute scientific research--Tribunal cannot decide claim of deduction without following correct procedure--Matter remanded to Assessing Officer-- Deputy CIT v. Bharat Biotech International Ltd.(Hyd) . . . 750
S. 35(3) --Scientific research expenditure--Expenditure on research and development for production of new drugs--Procedure--Failure by Assessing Officer to follow correct procedure provided under section 35(3) to determine whether activity constitute scientific research--Tribunal cannot decide claim of deduction without following correct procedure--Matter remanded to Assessing Officer-- Deputy CIT v. Bharat Biotech International Ltd.(Hyd) . . . 750
S. 37(1) --Business expenditure--Disallowance--Expenditure on purpose which is illegal or offence--Fees paid to advocate for seeking bail for assessee’s driver on account of road accident--Not allowable--Expenditure incurred for certification of net worth of directors for obtaining loan--Allowable-- T and T Motors Ltd. v. Addl. CIT (Delhi) . . . 682
S. 80-IA --Industrial undertaking--Special deduction--Computation--Determination of initial assessment year--Period of ten years to be reckoned from date assessee’s business started functioning-- Escapade Resorts P. Ltd. v. Asst. CIT (Cochin) . . . 766
S. 92CA --International transactions--Arm’s length price--Determination--Corporate support and research and development services segments--Transactional net margin method--Selection of comparables--Companies having related party transactions to extent of more than 25 per cent. cannot be treated as comparable--Companies having outsourcing activity, functional dissimilarity, diversified activities and element of brand value associated with them not comparable--Company earning substantial revenue from research and development activity to be treated as comparable--Risk or working capital adjustment--Requiring verification by Transfer Pricing Officer--Matter remanded-- International Speciality Products (I) P. Ltd. v. ITO (Hyd) . . . 787
S. 132(4) --Search and seizure--Statement recorded in course of a search operation--Part of seized material-- K. Govinda Pillai v. Deputy CIT (Cochin) . . . 772
S. 271(1)(c) --Penalty--Concealment of income or furnishing of inaccurate particulars--Penalty based on addition to income--High Court admitting substantial question of law on question of addition--Penalty cannot be imposed on debatable question-- Schrader Duncan Ltd. v. Addl. CIT (Mumbai) . . . 674
R. 8D --Income--Disallowance of expenditure in relation to exempt income--Interest towards investment in shares and mutual funds--Assessee's share capital with reserves and surpluses far in excess of amount invested in securities fetching exempt income--Interest cannot be disallowed-- T and T Motors Ltd. v. Addl. CIT (Delhi) . . . 682
----Income--Disallowance of expenditure in relation to exempt income--Rule 8D mandatory--Disallowance of amount equal to one-half per cent. of average of value of investment--Proper-- T and T Motors Ltd. v. Addl. CIT (Delhi) . . . 682
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