INCOME TAX REPORTS (ITR)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Non-resident --International transaction--Transfer pricing--General principles--Arm’s length price--US company subsidiary of Indian company--Loan by Indian company to its subsidiary--Interest calculated under comparable uncontrolled price method--Loan transaction in the year 2002-03--Rate of interest accepted in earlier and subsequent assessment years--Transfer Pricing Officer and Dispute Resolution Panel not questioning long-term transaction--Increase in rate of interest for assessment year 2007-08 not valid--Income-tax Act, 1961-- CIT v. Cotton Naturals (I.) Pvt. Ltd. (Delhi) . . . 1
Search and seizure --Block assessment--Undisclosed income--Assessment of third person--Sale of property--Assessee receiving amount--Books of account of purchaser showing fraction of amount disclosed as sale consideration--Department entitled to issue notice to determine whether such amount actually received by assessee and, if so, on whose behalf, and proceed further--Income-tax Act, 1961, s. 158BD-- CIT v. H. P. Goel (Delhi) . . . 29
ITR Volume 375 : Part 1 (Issue dated : 6-7-2015)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Appeal to Appellate Tribunal --Limitation--Delay in filing appeal--Condonation of delay--No satisfactory explanation regarding delay--Delay could not be condoned--Income-tax Act, 1961-- Ajmeer Sherriff and Co. v. ITO (Mad) . . . 15
Business --Transactions in shares--Non-banking financial company--Whether business transactions or investments--Frequency of transaction not conclusive test--Evidence to show some transactions were business, some investment and some speculation--No fault found with evidence--Concurrent finding that transactions not business activity--Possible view--Income-tax Act, 1961-- CIT v. Merlin Holding P. Ltd. (Cal) . . . 118
Company --Dividend--Deemed dividend--Loan to shareholder by closely held company--Assessee owning 60 per cent. shares of company--Company possessing accumulated profits--Amounts taken as loan from company and payments also made to company--Assessing Officer directed to verify each debit entry and treat only excess as deemed dividend--Income-tax Act, 1961, s. 2(22)(e)-- Sunil Kapoor v. CIT (Mad) . . . 1
Deduction of tax at source --Interest--Chit fund--Amount paid by chit fund to its subscribers--Not interest--Tax not deductible at source on such interest--Income-tax Act, 1961, ss. 2(28A), 194A-- CIT v. Avenue Super Chits P. Ltd. (Karn) . . . 76
----Rent--Fees for technical services--Assessee distributing electricity to consumers--Public utility--Wheeling and transmission charges--Charge for permitting use of State transmission utility --Not equated to rent or fees for technical services--Tax not deductible at source--Income-tax Act, 1961, ss. 194-I, 194J-- CIT (TDS) v. Maharashtra State Electricity Distribution Co. Ltd. (Bom) . . . 23
Income deemed to accrue or arise in India --Wet-leasing aircraft to foreign company--Operational activities were abroad--Expenses towards maintenance and repairs were for purpose of earning abroad--Payments falling within the purview of exclusionary clause of section 9(1)(vii)(b)--Not chargeable to tax and not liable for deduction of tax at source--Income-tax Act, 1961, ss. 9(1)(vii)(b), 195-- Director of Income-tax v. Lufthansa Cargo India(Delhi) . . . 85
Income from house property --Annual letting value--Mode of determination--Income-tax Act, 1961-- Vimal R. Ambani v. Deputy CIT (Bom) . . . 66
Interpretation of taxing statutes --Rent--Contextual interpretation-- CIT (TDS) v. Maharashtra State Electricity Distribution Co. Ltd. (Bom) . . . 23
Non-resident --Income deemed to accrue or arise in India--Fees for technical services--Assessee acquiring aircrafts from non-resident company and wet-leasing them to a foreign company--Aircraft safe and airworthy--Certification of such component safety--Condition precedent--Component overhaul and maintenance--Level of technical expertise and ability required--Nature of these services technical services--Income-tax Act, 1961, s. 9(1)(vii)--Director of Income-tax v. Lufthansa Cargo India (Delhi) . . . 85
Precedent --Effect of decision of Supreme Court in Smt. Tarulata Shyam v. CIT [1977] 108 ITR 345 (SC)-- Sunil Kapoor v. CIT (Mad) . . . 1
Reassessment --Notice after four years--Conditions precedent--Reasons not showing any failure on part of assessee to disclose fully and truly all material facts--Notice based on assessment made in subsequent years--Notice to be set aside--Income-tax Act, 1961, ss. 147, 148-- State Bank of Patiala v. CIT (P&H) . . . 109
Recovery of tax --Private company--Recovery of tax from director of private company--Scope of section 179--Public company--No material to show attempt was made to pierce corporate veil--No notice to company regarding such investigation--Recovery proceedings against director not valid--Income-tax Act, 1961, s. 179-- Ajay S. Patel v. ITO (Guj) . . . 72
Revision --Commissioner--Powers--Financial corporation--Government banks--Assessing Officer granting deduction to assessee--Possible view--View fortified by decision of Tribunal accepted by Revenue--Principle of consistency--No occasion for Commissioner to revise that order--Income-tax Act, 1961, ss. 36(1)(viii), 263-- CIT v. State Bank of India (Bom) . . . 20
----Condition precedent--Order of Assessing Officer should be erroneous and prejudicial to Revenue--Assessing Officer failing to make necessary enquiry--Creditworthiness of alleged lenders not investigated--Revision of order--Justified--Income-tax Act, 1961, s. 263-- CIT v.Maithan International (Cal) . . . 123
Salary --Deduction of tax at source--Doctors working in hospital--Different terms and conditions under which various doctors rendered services--Terms and conditions must be examined in each case to determine character of payment received--Income-tax Act, 1961, s. 192-- CIT (TDS) v. Grant Medical Foundation (Ruby Hall Clinic) (Bom) . . . 49
Search and seizure --Block assessment--Undisclosed income--Unexplained investment--Effect of sections 132 and 69--Burden on assessee to prove source of income--No satisfactory explanation regarding investment--Addition of value of investment in total income of assessee--Justified--Income-tax Act, 1961, ss. 69, 132-- Hemant Kumar Ghosh v. Asst. CIT (Patna) . . . 79
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
S. 2(22)(e) --Company--Dividend--Deemed dividend--Loan to shareholder by closely held company--Assessee owning 60 per cent. shares of company--Company possessing accumulated profits--Amounts taken as loan from company and payments also made to company--Assessing Officer directed to verify each debit entry and treat only excess as deemed dividend-- Sunil Kapoor v. CIT (Mad) . . . 1
S. 2(28A) --Deduction of tax at source--Interest--Chit fund--Amount paid by chit fund to its subscribers--Not interest--Tax not deductible at source on such interest-- CIT v. Avenue Super Chits P. Ltd. (Karn) . . . 76
S. 9(1)(vii) --Non-resident--Income deemed to accrue or arise in India--Fees for technical services--Assessee acquiring aircrafts from non-resident company and wet-leasing them to a foreign company--Aircraft safe and airworthy--Certification of such component safety--Condition precedent--Component overhaul and maintenance--Level of technical expertise and ability required--Nature of these services technical services-- Director of Income-tax v.Lufthansa Cargo India (Delhi) . . . 85
S. 9(1)(vii)(b) --Income deemed to accrue or arise in India--Wet-leasing aircraft to foreign company--Operational activities were abroad--Expenses towards maintenance and repairs were for purpose of earning abroad--Payments falling within the purview of exclusionary clause of section 9(1)(vii)(b)--Not chargeable to tax and not liable for deduction of tax at source-- Director of Income-tax v. Lufthansa Cargo India (Delhi) . . . 85
S. 36(1)(viii) --Revision--Commissioner--Powers--Financial corporation--Government banks--Assessing Officer granting deduction to assessee--Possible view--View fortified by decision of Tribunal accepted by Revenue--Principle of consistency--No occasion for Commissioner to revise that order-- CIT v. State Bank of India (Bom) . . . 20
S. 69 --Search and seizure--Block assessment--Undisclosed income--Unexplained investment--Effect of sections 132 and 69--Burden on assessee to prove source of income--No satisfactory explanation regarding investment--Addition of value of investment in total income of assessee--Justified-- Hemant Kumar Ghosh v. Asst. CIT (Patna) . . . 79
S. 132 --Search and seizure--Block assessment--Undisclosed income--Unexplained investment--Effect of sections 132 and 69--Burden on assessee to prove source of income--No satisfactory explanation regarding investment--Addition of value of investment in total income of assessee--Justified-- Hemant Kumar Ghosh v. Asst. CIT (Patna) . . . 79
S. 147 --Reassessment--Notice after four years--Conditions precedent--Reasons not showing any failure on part of assessee to disclose fully and truly all material facts--Notice based on assessment made in subsequent years--Notice to be set aside-- State Bank of Patiala v. CIT (P&H) . . . 109
S. 148 --Reassessment--Notice after four years--Conditions precedent--Reasons not showing any failure on part of assessee to disclose fully and truly all material facts--Notice based on assessment made in subsequent years--Notice to be set aside-- State Bank of Patiala v. CIT (P&H) . . . 109
S. 179 --Recovery of tax--Private company--Recovery of tax from director of private company--Scope of section 179--Public company--No material to show attempt was made to pierce corporate veil--No notice to company regarding such investigation--Recovery proceedings against director not valid-- Ajay S. Patel v. ITO (Guj) . . . 72
S. 192 --Salary--Deduction of tax at source--Doctors working in hospital--Different terms and conditions under which various doctors rendered services--Terms and conditions must be examined in each case to determine character of payment received-- CIT (TDS) v. Grant Medical Foundation (Ruby Hall Clinic) (Bom) . . . 49
S. 194A --Deduction of tax at source--Interest--Chit fund--Amount paid by chit fund to its subscribers--Not interest--Tax not deductible at source on such interest-- CIT v. Avenue Super Chits P. Ltd. (Karn) . . . 76
S. 194-I --Deduction of tax at source--Rent--Fees for technical services--Assessee distributing electricity to consumers--Public utility--Wheeling and transmission charges--Charge for permitting use of State transmission utility --Not equated to rent or fees for technical services--Tax not deductible at source-- CIT (TDS) v. Maharashtra State Electricity Distribution Co. Ltd. (Bom) . . . 23
S. 194J --Deduction of tax at source--Rent--Fees for technical services--Assessee distributing electricity to consumers--Public utility--Wheeling and transmission charges--Charge for permitting use of State transmission utility --Not equated to rent or fees for technical services--Tax not deductible at source-- CIT (TDS) v. Maharashtra State Electricity Distribution Co. Ltd. (Bom) . . . 23
S. 195 --Income deemed to accrue or arise in India--Wet-leasing aircraft to foreign company--Operational activities were abroad--Expenses towards maintenance and repairs were for purpose of earning abroad--Payments falling within the purview of exclusionary clause of section 9(1)(vii)(b)--Not chargeable to tax and not liable for deduction of tax at source--Director of Income-tax v. Lufthansa Cargo India (Delhi) . . . 85
S. 263 --Revision--Commissioner--Powers--Financial corporation--Government banks--Assessing Officer granting deduction to assessee--Possible view--View fortified by decision of Tribunal accepted by Revenue--Principle of consistency--No occasion for Commissioner to revise that order-- CIT v. State Bank of India (Bom) . . . 20
----Revision--Condition precedent--Order of Assessing Officer should be erroneous and prejudicial to Revenue--Assessing Officer failing to make necessary enquiry--Creditworthiness of alleged lenders not investigated--Revision of order--Justified-- CIT v.Maithan International (Cal) . . . 123
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