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Tuesday, August 4, 2015

ITR (TRIB) Volume 41 : Part 3 (Issue dated : 27-7-2015)

 

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

PRINT EDITION

Volume 41 : Part 3 (Issue dated : 27-7-2015)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Advance tax --Interest--Computation of interest--Assessee not liable to pay interest on returned income when assessed income below returned income--Assessing Officer to recompute interest on assessed income--Income-tax Act, 1961, s. 234C-- Abhishekh Cotspin Mills Ltd. v . Asst. CIT (Pune) . . . 293

Appeal to Appellate Tribunal --Competency of appeal--Monetary limits for appeals by Department--Instruction No. 5 of 2014 revising monetary limits--Applicable to pending cases--Tax effect less than prescribed limit--Appeal not maintainable--Instruction No. 5 of 2014 dated 10-7-2014--Income-tax Act, 1961, s. 268A-- ITO v . Chemex India P. Ltd. (Delhi) . . . 403

Bad debts --Writing off--Goods becoming obsolete--Goods shown as closing stock in books of account of assessee in subsequent years--Special additional duty paid in relation to obsolete goods cannot be claimed as deduction--Income-tax Act, 1961-- Toshiba India P. Ltd. v . Deputy CIT (Delhi) . . . 300

Business expenditure --Disallowance--Non-resident--Royalty--Sum liable to deduction of tax at source--Purchase of software for utilisation of computers not purchase of royalty--No payment of royalty--No requirement to deduct tax at source--Depreciation allowable--Income-tax Act, 1961, ss. 9(1)(vi), Expln. 2 , 40(a)(ia)-- Deputy CIT v . WS Atkins India P. Ltd.(Bang) . . . 397

----Provision for warranty--Assessee suo motu disallowing in return and claiming deduction during course of assessment proceedings--Circumstances under which assessee disallowing claim and thereafter claiming deduction not clear--Assessing Officer to examine matter--Matter remanded--Income-tax Act, 1961-- Toshiba India P. Ltd. v . Deputy CIT (Delhi) . . . 300

Deduction of tax at source --Salary or professional fees--Consultant doctors rendering services under consultancy agreement--No element of employer and employee relationship in consultancy agreement--No control and supervision by assessee over professional work done by doctors--Personal perquisites and other benefits absent in consultancy agreement--Payment treated as professional fees in earlier assessment years--Principle of consistency applicable--Tax to be deducted under section 194J--Income-tax Act, 1961, ss. 192, 194J, 201(1A)-- Deputy CIT v . Artemis Medicare Service Ltd. (Delhi) . . . 361

Exemption --Export--Computation of deduction--Expenses excluded from export turnover to be excluded from total turnover--Income-tax Act, 1961, s. 10A-- Deputy CIT v . WS Atkins India P. Ltd. (Bang) . . . 397

----Export of computer software--Computation of deduction--Communication expenses to be borne by customer in accordance with agreement between assessee and its customers overseas--Assessee incurring no expenses for delivery of computer software outside India--Assessee excluding 10 per cent. of telecommunication expenses from export turnover--No warrant for excluding higher sum--Income-tax Act, 1961, s. 10A-- Deputy CIT v . WS Atkins India P. Ltd. (Bang) . . . 397

----Export oriented unit--Appeal to Commissioner (Appeals)--Power to admit fresh evidence--Assessee filing evidence without filing petition under rule 46A--Failure by authority to point out discrepancies and give opportunity to file application to admit fresh evidence--Matter remanded to Assessing Officer to consider documents afresh--Income-tax Act, 1961, s. 10B--Income-tax Rules, 1962, r. 46A-- SECOVA e Services P. Ltd. v . Deputy CIT (Chennai) . . . 357

Housing project --Special deduction--Assessee offering additional receipts in revised return against housing project undertaken during previous year--Assessee entitled to deduction--Income-tax Act, 1961, s. 80-IB(10)-- ITO v . Gajraj Constructions 
(Pune) . . . 425

Income from undisclosed sources --Income-tax survey--Excess stock of gold--Failure by assessee to disclose source of excess stock with corroborative evidence--Order of Commissioner (Appeals) confirming addition justified--Income-tax Act, 1961, s. 133A(3)--Radhakrishna Gold Jewellary P. Ltd. v . Joint CIT (OSD) 
(Ahd) . . . 349

International transactions --Arm’s length price--Determination--Advertising, marketing and promotion expenses--Details of advertising, marketing and promotion functions performed by assessee not available--Failure by assessee to bring material indicating advertising, marketing and promotion functions performed by assessee and comparables--Matter remanded to Transfer Pricing Officer for decision in accordance with manner laid down by Delhi High Court--Matter remanded--Income-tax Act, 1961-- Toshiba India P. Ltd. v . Deputy CIT (Delhi) . . . 300

----Arm’s length price--Information technology enabled services--Selection of comparables--Companies functionally dissimilar to assessee--To be excluded from final set of comparables--Income-tax Act, 1961 s. 92CA-- BNY Mellon International Operations (India) P. Ltd. v . Deputy CIT (Pune) . . . 407

Non-resident --Deduction of tax at source--Interest--Payments liable to deduction of tax at source--Arranger fee for facilitating loan for borrower from lender--Not part of debt or loan payable to lender--Not interest under section 2(28A)--Arranging of loan not lending of managerial services or provision of consulting services--Not taxable under section 9(1)(vii)--Assessee not liable to deduct tax at source--Income-tax Act, 1961, s. 2(28A)-- Idea Cellular Ltd. v . Asst. DIT (International Taxation) 
(Mumbai) . . . 338

Penalty --Concealment of income--Search and seizure--Depreciation on intellectual property rights claimed and allowed by Commissioner (Appeals) in appeal arising out of regular assessment--Withdrawal of claim to depreciation in assessment proceedings arising from search operations--No incriminating material found during search--Levy of penalty on basis of statement under section 132(4) not sustainable--Depreciation allowable--Income-tax Act, 1961, ss. 132(4), 153A, 271(1)(c)-- Financial Technologies (I) Ltd. v . Asst. CIT (Mumbai) . . . 330

Refund --Interest--Self-assessment--Interest payable from date of payment of tax on self-assessment to date of refund of amount--Income-tax Act, 1961, s. 244A-- Abhishekh Cotspin Mills Ltd. v . Asst. CIT (Pune) . . . 293

Revision --Commissioner--Charitable purpose--Exemption--Accumulation of income--Failure by Assessing Officer to examine issue relating to accumulation of income--Order erroneous and prejudicial to interests of Revenue--Revision proper--Income-tax Act, 1961, ss. 11, 263--Willingdon Charitable Trust v . DIT (Exemptions) (Chennai) . . . 317

----Commissioner--Charitable purpose--Exemption--Assessing Officer bringing entire income from marriage halls and auditorium to tax--Order of Assessing Officer erroneous being based on wrong assumption of facts but not prejudicial to interests of Revenue--No loss to Department--Income from marriage halls subject-matter of appeal before Commissioner (Appeals)--Revision not permissible--Income-tax Act, 1961, s. 2(15), 263-- Willingdon Charitable Trust v . DIT (Exemptions) 
(Chennai) . . . 317

----Condition precedent--Order must be erroneous as well as prejudicial to interests of Revenue--Failure by Assessing Officer to examine issues relating to accumulation of income--Commissioner justified in exercising revisional jurisdiction under section 263--Income-tax Act, 1961, s. 263-- Willingdon Charitable Trust v . DIT (Exemptions) 
(Chennai) . . . 317

Words and phrases --†Arranger fee†--“Interest†-- Idea Cellular Ltd. v . Asst. DIT (International Taxation) (Mumbai) . . . 338

----†Erroneous†--Meaning of-- Willingdon Charitable Trust v . DIT (Exemptions)(Chennai) . . . 317

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961

S. 2(15) --Revision--Commissioner--Charitable purpose--Exemption--Assessing Officer bringing entire income from marriage halls and auditorium to tax--Order of Assessing Officer erroneous being based on wrong assumption of facts but not prejudicial to interests of Revenue--No loss to Department--Income from marriage halls subject-matter of appeal before Commissioner (Appeals)--Revision not permissible-- Willingdon Charitable Trust v . DIT (Exemptions) (Chennai) . . . 317

S. 2(28A) --Non-resident--Deduction of tax at source--Interest--Payments liable to deduction of tax at source--Arranger fee for facilitating loan for borrower from lender--Not part of debt or loan payable to lender--Not interest under section 2(28A)--Arranging of loan not lending of managerial services or provision of consulting services--Not taxable under section 9(1)(vii)--Assessee not liable to deduct tax at source-- Idea Cellular Ltd. v . Asst. DIT (International Taxation) (Mumbai) . . . 338

S. 9(1)(vi), Expln. 2 --Business expenditure--Disallowance--Non-resident--Royalty--Sum liable to deduction of tax at source--Purchase of software for utilisation of computers not purchase of royalty--No payment of royalty--No requirement to deduct tax at source--Depreciation allowable-- Deputy CIT v . WS Atkins India P. Ltd. 
(Bang) . . . 397

S. 10A --Exemption--Export--Computation of deduction--Expenses excluded from export turnover to be excluded from total turnover-- Deputy CIT v . WS Atkins India P. Ltd. (Bang) . . . 397

--Exemption--Export of computer software--Computation of deduction--Communication expenses to be borne by customer in accordance with agreement between assessee and its customers overseas--Assessee incurring no expenses for delivery of computer software outside India--Assessee excluding 10 per cent. of telecommunication expenses from export turnover--No warrant for excluding higher sum-- Deputy CIT v . WS Atkins India P. Ltd.(Bang) . . . 397

S. 10B --Exemption--Export oriented unit--Appeal to Commissioner (Appeals)--Power to admit fresh evidence--Assessee filing evidence without filing petition under rule 46A--Failure by authority to point out discrepancies and give opportunity to file application to admit fresh evidence--Matter remanded to Assessing Officer to consider documents afresh-- SECOVA e Services P. Ltd. v . Deputy CIT 
(Chennai) . . . 357

S. 11 --Revision--Commissioner--Charitable purpose--Exemption--Accumulation of income--Failure by Assessing Officer to examine issue relating to accumulation of income--Order erroneous and prejudicial to interests of Revenue--Revision proper-- Willingdon Charitable Trust v . DIT (Exemptions) (Chennai) . . . 317

S. 40(a)(ia) --Business expenditure--Disallowance--Non-resident--Royalty--Sum liable to deduction of tax at source--Purchase of software for utilisation of computers not purchase of royalty--No payment of royalty--No requirement to deduct tax at source--Depreciation allowable-- Deputy CIT v . WS Atkins India P. Ltd. 
(Bang) . . . 397

S. 80-IB(10) --Housing project--Special deduction--Assessee offering additional receipts in revised return against housing project undertaken during previous year--Assessee entitled to deduction-- ITO v . Gajraj Constructions (Pune) . . . 425

S. 92CA --International transactions--Arm’s length price--Information technology enabled services--Selection of comparables--Companies functionally dissimilar to assessee--To be excluded from final set of comparables-- BNY Mellon International Operations (India) P. Ltd.v . Deputy CIT (Pune) . . . 407

S. 132(4) --Penalty--Concealment of income--Search and seizure--Depreciation on intellectual property rights claimed and allowed by Commissioner (Appeals) in appeal arising out of regular assessment--Withdrawal of claim to depreciation in assessment proceedings arising from search operations--No incriminating material found during search--Levy of penalty on basis of statement under section 132(4) not sustainable--Depreciation allowable-- Financial Technologies (I) Ltd. v . Asst. CIT 
(Mumbai) . . . 330

S. 133A(3) --Income from undisclosed sources--Income-tax survey--Excess stock of gold--Failure by assessee to disclose source of excess stock with corroborative evidence--Order of Commissioner (Appeals) confirming addition justified-- Radhakrishna Gold Jewellary P. Ltd. v . Joint CIT (OSD) (Ahd) . . . 349

S. 153A --Penalty--Concealment of income--Search and seizure--Depreciation on intellectual property rights claimed and allowed by Commissioner (Appeals) in appeal arising out of regular assessment--Withdrawal of claim to depreciation in assessment proceedings arising from search operations--No incriminating material found during search--Levy of penalty on basis of statement under section 132(4) not sustainable--Depreciation allowable-- Financial Technologies (I) Ltd. v . Asst. CIT 
(Mumbai) . . . 330

S. 192 --Deduction of tax at source--Salary or professional fees--Consultant doctors rendering services under consultancy agreement--No element of employer and employee relationship in consultancy agreement--No control and supervision by assessee over professional work done by doctors--Personal perquisites and other benefits absent in consultancy agreement--Payment treated as professional fees in earlier assessment years--Principle of consistency applicable--Tax to be deducted under section 194J-- Deputy CIT v . Artemis Medicare Service Ltd. (Delhi) . . . 361

S. 194J --Deduction of tax at source--Salary or professional fees--Consultant doctors rendering services under consultancy agreement--No element of employer and employee relationship in consultancy agreement--No control and supervision by assessee over professional work done by doctors--Personal perquisites and other benefits absent in consultancy agreement--Payment treated as professional fees in earlier assessment years--Principle of consistency applicable--Tax to be deducted under section 194J-- Deputy CIT v . Artemis Medicare Service Ltd. (Delhi) . . . 361

S. 201(1A) --Deduction of tax at source--Salary or professional fees--Consultant doctors rendering services under consultancy agreement--No element of employer and employee relationship in consultancy agreement--No control and supervision by assessee over professional work done by doctors--Personal perquisites and other benefits absent in consultancy agreement--Payment treated as professional fees in earlier assessment years--Principle of consistency applicable--Tax to be deducted under section 194J-- Deputy CIT v . Artemis Medicare Service Ltd. (Delhi) . . . 361

S. 234C --Advance tax--Interest--Computation of interest--Assessee not liable to pay interest on returned income when assessed income below returned income--Assessing Officer to recompute interest on assessed income-- Abhishekh Cotspin Mills Ltd. v . Asst. CIT (Pune) . . . 293

S. 244A --Refund--Interest--Self-assessment--Interest payable from date of payment of tax on self-assessment to date of refund of amount-- Abhishekh Cotspin Mills Ltd. v . Asst. CIT(Pune) . . . 293

S. 263 --Revision--Commissioner--Charitable purpose--Exemption--Accumulation of income--Failure by Assessing Officer to examine issue relating to accumulation of income--Order erroneous and prejudicial to interests of Revenue--Revision proper-- Willingdon Charitable Trust v . DIT (Exemptions) (Chennai) . . . 317

--Revision--Commissioner--Charitable purpose--Exemption--Assessing Officer bringing entire income from marriage halls and auditorium to tax--Order of Assessing Officer erroneous being based on wrong assumption of facts but not prejudicial to interests of Revenue--No loss to Department--Income from marriage halls subject-matter of appeal before Commissioner (Appeals)--Revision not permissible-- Willingdon Charitable Trust v . DIT (Exemptions) (Chennai) . . . 317

--Revision--Condition precedent--Order must be erroneous as well as prejudicial to interests of Revenue--Failure by Assessing Officer to examine issues relating to accumulation of income--Commissioner justified in exercising revisional jurisdiction under section 263--Willingdon Charitable Trust v . DIT (Exemptions) 
(Chennai) . . . 317

S. 268A --Appeal to Appellate Tribunal--Competency of appeal--Monetary limits for appeals by Department--Instruction No. 5 of 2014 revising monetary limits--Applicable to pending cases--Tax effect less than prescribed limit--Appeal not maintainable-- ITO v . Chemex India P. Ltd. (Delhi) . . . 403

S. 271(1)(c) --Penalty--Concealment of income--Search and seizure--Depreciation on intellectual property rights claimed and allowed by Commissioner (Appeals) in appeal arising out of regular assessment--Withdrawal of claim to depreciation in assessment proceedings arising from search operations--No incriminating material found during search--Levy of penalty on basis of statement under section 132(4) not sustainable--Depreciation allowable--Financial Technologies (I) Ltd. v . Asst. CIT 
(Mumbai) . . . 330

Income-tax Rules, 1962

r. 46A --Exemption--Export oriented unit--Appeal to Commissioner (Appeals)--Power to admit fresh evidence--Assessee filing evidence without filing petition under rule 46A--Failure by authority to point out discrepancies and give opportunity to file application to admit fresh evidence--Matter remanded to Assessing Officer to consider documents afresh-- SECOVA e Services P. Ltd. v . Deputy CIT 
(Chennai) . . . 357

 


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