ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))--PRINT AND ONLINE EDITION
SUBJECT INDEX TO CASES REPORTED
Capital or revenue receipt --Receipt on sale of carbon credit--Capital in nature--Income-tax Act, 1961-- Prabhu Spinning Mills P. Ltd. v. Deputy CIT (Chennai) . . . 209
International transactions --Transfer pricing--Arm’s length price--Determination--Transactional net margin method--Automobile design and engineering services rendered by U. K. company--Selection of comparables--Indian and foreign transfer pricing regulations accepting non-domestic comparables--Failure by Transfer Pricing Officer to take into account comparable analysis of foreign companies--Matter remanded to Transfer Pricing Officer to examine transfer pricing adjustment afresh--Income-tax Rules, 1962, r. 10B-- Tata Motors European Technical Centre Plc. v. Asst. DIT (International Taxation) (Mumbai) . . . 195
Volume 38 : Part 2 (Issue dated : 2-3-2015)
SUBJECT INDEX TO CASES REPORTED
Accounting --Rejection of accounts--Low gross profit rate as compared to previous year--Change in market causing change in gross profit rate--Deletion of disallowance proper--Income-tax Act, 1961-- Himson International P. Ltd. v. Deputy CIT (Ahd) . . . 218
Assessment --Appeal to Commissioner (Appeals)--Disallowances made by Assessing Officer resulting in positive income--Denial of opportunity to claim exemption under section 10A--Claim made for first time before Commissioner (Appeals)--Duty of Assessing Officer to grant exemption statutorily allowable to assessee--Matter remanded to Assessing Officer--Income-tax Act, 1961, ss. 10A, 143(3)-- Himson International P. Ltd. v. Deputy CIT (Ahd) . . . 218
Business expenditure --Disallowance--Foreign travel expenditure--No doubt in details of expenses--Disallowance cannot be made on flimsy ground--Income-tax Act, 1961-- Parle Agro P. Ltd. v. Asst. CIT (Mumbai) . . . 203
----Capital or revenue expenditure--Technical consultancy charges to a foreign company--No material to show no enduring benefit obtained by assessee--Expenditure capital in nature--Income-tax Act, 1961-- Himson International P. Ltd. v. Deputy CIT (Ahd) . . . 218
----Disallowance--Payments liable to deduction of tax at source--Disallowance cannot be made for amounts paid before end of relevant accounting year--Income-tax Act, 1961, ss. 40(a)(ia), 194C-- Ushodaya Enterprises Ltd. v. Deputy CIT (Hyd) . . . 148
----Disallowance--Payments to non-resident--Failure to deduct tax at source--Usance charges on import of raw material--Are interest within provisions of section 2(28A) and accrue in India--Section 195 applicable--Assessee not deducting tax at source--Assessing Officer justified in disallowing payment--Income-tax Act, 1961, ss. 40(a)(i), 195-- Asst. CIT v. Indian Furniture Products Ltd. (Panaji) . . . 174
----Employees’ contribution towards Employees State Insurance--Contribution made before due date for filing return of income--Disallowance cannot be made--Income-tax Act, 1961, s. 139(1)-- Universal Precision Screws v. Asst. CIT (Delhi) . . . 233
----Expenditure incurred towards product development including design charges--Revenue expenditure--Whether expenses pertains to subsequent year or year in question--Must be proved with concrete evidence--Income-tax Act, 1961-- Parle Agro P. Ltd. v. Asst. CIT(Mumbai) . . . 203
----Festival expenses--Assessing Officer cannot step into shoes of businessman to decide whether a particular expenditure necessary or not--Disallowance not sustainable--Income-tax Act, 1961-- Universal Precision Screws v. Asst. CIT (Delhi) . . . 233
----Prior period expenses to be allowed as deduction--Income-tax Act, 1961-- Ushodaya Enterprises Ltd. v. Deputy CIT (Hyd) . . . 148
----Travelling and conveyance expenses--Failure by assessee to produce bills and vouchers supporting expenses incurred--Disallowance restricted--Income-tax Act, 1961-- Himson International P. Ltd. v. Deputy CIT (Ahd) . . . 218
Business loss --Bad debt--Amounts advanced to for purchase of capital assets--Cannot be allowed as bad debts or business loss--Income-tax Act, 1961-- Hindustan Times Ltd. v. Deputy CIT (Delhi) . . . 165
Capital or revenue expenditure -- Expenditure towards permission from Government for using factory premises for other purposes--Factory premises already in use of assessee--Expenditure towards payment including interest cannot be capitalised--Expenditure revenue in nature--Income-tax Act, 1961, s. 37-- Deputy DIT v. Micron Instruments P. Ltd. (Delhi) . . . 242
----Artwork charges--Artwork mainly for advertisement and for use for short duration--No enduring advantage--Not capital expenditure--Income-tax Act, 1961-- Parle Agro P. Ltd. v. Asst. CIT (Mumbai) . . . 203
----Extension of existing business--Failure by authorities to find nature of project undertaken--Suspension of capitalisation of borrowing requiring examination of facts--Matter remanded to Assessing Officer--Income-tax Act, 1961, s. 37-- Hindustan Times Ltd. v. Deputy CIT(Delhi) . . . 165
----Market research expenses for deciding market strategy for promoting its products--Expenses for sustaining market and to push up sales--Revenue expenditure--Income-tax Act, 1961-- Parle Agro P. Ltd. v. Asst. CIT (Mumbai) . . . 203
Charitable purpose --Registration of trusts--Assessee’s primary purpose advancement of objects of general public utility--Remains charitable even if activity incidental or ancillary to main purpose profitable in nature--Denial of registration not justified--Income-tax Act, 1961, s. 12AA-- IP India Foundation v. DIT (Exemptions) (Hyd) . . . 195
Depreciation --Rate of depreciation--Computers--Printers, scanners, modems and routers come within ambit of expression “computer†when used along with computer--Entitled to higher rate of depreciation--Income-tax Act, 1961, s. 32-- Ushodaya Enterprises Ltd. v. Deputy CIT (Hyd) . . . 148
Exemption --Export oriented undertaking--Export turnover--Profits arising out of fluctuation of rates of foreign exchange--Form part of export turnover--Assessee dealing in manufacture and export of fasteners--Sale of scrap--Proceeds not includible in turnover--Income-tax Act, 1961, s. 10B-- Universal Precision Screws v. Asst. CIT (Delhi) . . . 233
----Export oriented undertaking--Profits eligible for exemption--Interest from fixed deposit receipts placed for maintaining margin money--Close nexus with business activity of assessee--To be treated as business income--Eligible for deduction under section 10B--Income-tax Act, 1961, s. 10B-- Universal Precision Screws v. Asst. CIT (Delhi) . . . 233
Income from house property --Deductions--Interest on borrowings--Interest on loan taken for acquiring property--Allowable--Income-tax Act, 1961, s. 24(b)-- Universal Precision Screws v. Asst. CIT (Delhi) . . . 233
Industrial undertaking --Special deduction under section 80-IC--Profits of undertaking--Subsidies such as transport, power, interest and insurance are part of business profits and gains from industrial undertaking--Deduction allowable--Income-tax Act, 1961, s. 80-IC--Meghalaya Mineral Products v. Asst. CIT (Guwahati) . . . 186
Penalty --Acceptance of loan or deposit otherwise than by account payee cheque or account payee draft--Acceptance of cash by husband from his wife cannot be treated as loan or advance in strict sense--Order cancelling penalty levied under section 271D justified--Income-tax Act, 1961, ss. 271D, 269SS-- Asst. CIT v. Vardaan Fashion (Delhi) . . . 247
----Acceptance of loan or deposit otherwise than by account payee cheque or account payee draft--Firm accepting cash from partner otherwise than by account payee cheque--Firm and partner not two different persons--Payment not of character of loan or deposit in general law--Section 269SS not applicable--Order cancelling levy of penalty under section 271D justified--Income-tax Act, 1961, ss. 271D, 269SS-- Asst. CIT v. Vardaan Fashion(Delhi) . . . 247
----Acceptance of loan or deposit otherwise than by account payee cheque or account payee draft--Scope of section 269SS--No monetary transaction between assessee and creditors--No violation of section 269SS--Order deleting penalty justified--Income-tax Act, 1961, ss. 269SS, 271D-- Asst. CIT v. Vardaan Fashion (Delhi) . . . 247
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
S. 10A --Assessment--Appeal to Commissioner (Appeals)--Disallowances made by Assessing Officer resulting in positive income--Denial of opportunity to claim exemption under section 10A--Claim made for first time before Commissioner (Appeals)--Duty of Assessing Officer to grant exemption statutorily allowable to assessee--Matter remanded to Assessing Officer-- Himson International P. Ltd. v. Deputy CIT (Ahd) . . . 218
S. 10B --Exemption--Export oriented undertaking--Export turnover--Profits arising out of fluctuation of rates of foreign exchange--Form part of export turnover--Assessee dealing in manufacture and export of fasteners--Sale of scrap--Proceeds not includible in turnover--Universal Precision Screws v. Asst. CIT (Delhi) . . . 233
----Exemption--Export oriented undertaking--Profits eligible for exemption--Interest from fixed deposit receipts placed for maintaining margin money--Close nexus with business activity of assessee--To be treated as business income--Eligible for deduction under section 10B--Universal Precision Screws v. Asst. CIT (Delhi) . . . 233
S. 12AA --Charitable purpose--Registration of trusts--Assessee’s primary purpose advancement of objects of general public utility--Remains charitable even if activity incidental or ancillary to main purpose profitable in nature--Denial of registration not justified-- IP India Foundation v. DIT (Exemptions) (Hyd) . . . 195
S. 24(b) --Income from house property--Deductions--Interest on borrowings--Interest on loan taken for acquiring property--Allowable-- Universal Precision Screws v. Asst. CIT (Delhi) . . . 233
S. 32 --Depreciation--Rate of depreciation--Computers--Printers, scanners, modems and routers come within ambit of expression “computer†when used along with computer--Entitled to higher rate of depreciation-- Ushodaya Enterprises Ltd. v. Deputy CIT (Hyd) . . . 148
S. 37 --Capital or revenue expenditure-- Expenditure towards permission from Government for using factory premises for other purposes--Factory premises already in use of assessee--Expenditure towards payment including interest cannot be capitalised--Expenditure revenue in nature-- Deputy DIT v. Micron Instruments P. Ltd. (Delhi) . . . 242
----Capital or revenue expenditure--Extension of existing business--Failure by authorities to find nature of project undertaken--Suspension of capitalisation of borrowing requiring examination of facts--Matter remanded to Assessing Officer-- Hindustan Times Ltd. v. Deputy CIT (Delhi) . . . 165
S. 40(a)(i) --Business expenditure--Disallowance--Payments to non-resident--Failure to deduct tax at source--Usance charges on import of raw material--Are interest within provisions of section 2(28A) and accrue in India--Section 195 applicable--Assessee not deducting tax at source--Assessing Officer justified in disallowing payment-- Asst. CIT v. Indian Furniture Products Ltd. (Panaji) . . . 174
----Business expenditure--Disallowance--Payments liable to deduction of tax at source--Disallowance cannot be made for amounts paid before end of relevant accounting year--Ushodaya Enterprises Ltd. v. Deputy CIT (Hyd) . . . 148
S. 80-IC --Industrial undertaking--Special deduction under section 80-IC--Profits of undertaking--Subsidies such as transport, power, interest and insurance are part of business profits and gains from industrial undertaking--Deduction allowable-- Meghalaya Mineral Products v. Asst. CIT (Guwahati) . . . 186
S. 139(1) --Business expenditure--Employees’ contribution towards Employees State Insurance--Contribution made before due date for filing return of income--Disallowance cannot be made-- Universal Precision Screws v. Asst. CIT (Delhi) . . . 233
S. 143(3) --Assessment--Appeal to Commissioner (Appeals)--Disallowances made by Assessing Officer resulting in positive income--Denial of opportunity to claim exemption under section 10A--Claim made for first time before Commissioner (Appeals)--Duty of Assessing Officer to grant exemption statutorily allowable to assessee--Matter remanded to Assessing Officer-- Himson International P. Ltd. v. Deputy CIT (Ahd) . . . 218
S. 194C --Business expenditure--Disallowance--Payments liable to deduction of tax at source--Disallowance cannot be made for amounts paid before end of relevant accounting year-- Ushodaya Enterprises Ltd. v. Deputy CIT (Hyd) . . . 148
S. 195 --Business expenditure--Disallowance--Payments to non-resident--Failure to deduct tax at source--Usance charges on import of raw material--Are interest within provisions of section 2(28A) and accrue in India--Section 195 applicable--Assessee not deducting tax at source--Assessing Officer justified in disallowing payment-- Asst. CIT v. Indian Furniture Products Ltd. (Panaji) . . . 174
S. 269SS --Penalty--Acceptance of loan or deposit otherwise than by account payee cheque or account payee draft--Acceptance of cash by husband from his wife cannot be treated as loan or advance in strict sense--Order cancelling penalty levied under section 271D justified--Asst. CIT v. Vardaan Fashion (Delhi) . . . 247
----Penalty--Acceptance of loan or deposit otherwise than by account payee cheque or account payee draft--Firm accepting cash from partner otherwise than by account payee cheque--Firm and partner not two different persons--Payment not of character of loan or deposit in general law--Section 269SS not applicable--Order cancelling levy of penalty under section 271D justified-- Asst. CIT v. Vardaan Fashion (Delhi) . . . 247
----Penalty--Acceptance of loan or deposit otherwise than by account payee cheque or account payee draft--Scope of section 269SS--No monetary transaction between assessee and creditors--No violation of section 269SS--Order deleting penalty justified-- Asst. CIT v. Vardaan Fashion (Delhi) . . . 247
S. 271D --Penalty--Acceptance of loan or deposit otherwise than by account payee cheque or account payee draft--Acceptance of cash by husband from his wife cannot be treated as loan or advance in strict sense--Order cancelling penalty levied under section 271D justified--Asst. CIT v. Vardaan Fashion (Delhi) . . . 247
----Penalty--Acceptance of loan or deposit otherwise than by account payee cheque or account payee draft--Firm accepting cash from partner otherwise than by account payee cheque--Firm and partner not two different persons--Payment not of character of loan or deposit in general law--Section 269SS not applicable--Order cancelling levy of penalty under section 271D justified-- Asst. CIT v. Vardaan Fashion (Delhi) . . . 247
----Penalty--Acceptance of loan or deposit otherwise than by account payee cheque or account payee draft--Scope of section 269SS--No monetary transaction between assessee and creditors--No violation of section 269SS--Order deleting penalty justified-- Asst. CIT v.Vardaan Fashion (Delhi) . . . 247
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