ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))--PRINT AND ONLINE EDITION
Volume 42 : Part 3 (Issue dated : 7-9-2015)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Agricultural income --Income from production of seeds--Seed is a product of agricultural activity--Income from sale of seeds amounts to agricultural income--Assessee entitled to exemption--Income-tax Act, 1961, s. 10(1)-- Asst. CIT v . Prabhat Agri Biotech Ltd. (Hyd) . . . 319
Business expenditure --Civil works contractor--Expenditure towards salary and wages to labourers--Entire expenditure not to be disallowed--Deficiencies in vouchers--Difficult to verify genuineness of payment--Disallowance restricted--Income-tax Act, 1961-- Dhanesh Narbheram Bhansali v. Asst. CIT (Mumbai) . . . 357
----Deduction only on actual payment--Value added tax--Difference between liability and amount paid--Disallowance proper--Income-tax Act, 1961, s. 43B-- Dhanesh Narbheram Bhansali v. Asst. CIT (Mumbai) . . . 357
----Disallowance--Payments liable to deduction of tax at source--Time period for deducting tax at source lapsing--Disallowance cannot be made--Income-tax Act, 1961, ss. 40(a)(ia), 194J-- IDBI Capital Market Services Ltd. v. Deputy CIT
(Mumbai) . . . 379
----Discount under employees’ stock option scheme--Object of scheme not to raise share capital but to earn profit by securing consistent and concentrated efforts of dedicated employees--Discount part of package of remuneration and substitute for cash incentive for services of employees--Is revenue expenditure--Allowable--Income-tax Act, 1961, s. 37--Cera Sanitaryware Ltd. v. Deputy CIT (OSD) (Ahd) . . . 334
----Loss on valuation of interest rate swap contracts--Deductible--Income-tax Act, 1961--IDBI Capital Market Services Ltd. v. Deputy CIT (Mumbai) . . . 379
Charitable purpose --Exemption--Donations disclosed as income--Not to be added as cash credits--Income-tax Act, 1961, ss. 11, 68-- ITO v. Saraswati Educational Charitable Trust(Lucknow) . . . 393
----Registration--Activities of trust both charitable and religious--Benefits not exclusively meant for particular religious community but for public at large--Provisions of section 13(1)(b) not applicable--Registration to be granted under section 12A--Income-tax Act, 1961, ss. 12A, 12AA(1)(b)(ii), 13(1)(b)-- Diocese of Pune (CNI) v. CIT
(Pune) . . . 348
----Registration--No distinction between religious or charitable institution for purpose of registration--Registration not to be denied on ground of mixed objects--Absence of certain clauses in trust deed--Director of Income-tax (Exemptions) to give opportunity to assessee to explain and make necessary amendments before refusing registration--Matter remanded--Income-tax Act, 1961, ss. 12A, 12AA-- Sri Sri Sri Dattatreya Seva Samsthanam v. DIT (Exemptions) (Hyd) . . . 384
Depreciation --Additional depreciation--Condition precedent--Machinery or plant should be acquired after 31-3-2005--New machinery or plant need not have operational connectivity to products already being manufactured--Assessee fulfilling all conditions--Entitled to additional depreciation--Income-tax Act, 1961, s. 32(1)(iia)-- Cera Sanitaryware Ltd. v. Deputy CIT (OSD) (Ahd) . . . 334
----Electric cables and fans--Integral part of machinery--Depreciation allowable at 15 per cent.--Income-tax Act, 1961, s. 32-- Cera Sanitaryware Ltd. v. Deputy CIT (OSD) (Ahd) . . . 334
Income --Disallowance of expenditure in relation to exempt income--Dividend income--Whether exempt--Matter remanded--Income-tax Act, 1961, ss. 14A--Income-tax Rules, 1962, r. 8D-- IDBI Capital Market Services Ltd. v. Deputy CIT
(Mumbai) . . . 379
----Disallowance of expenditure relating to exempt income--Disallowance to be considered part of business profit in computation of deduction under section 10A--Income-tax Act, 1961, ss. 14A, 10A--Income-tax Rules 1962, r. 8D-- iNautix Technologies India P. Ltd. v. Asst. CIT(Chennai) . . . 324
----Disallowance of expenditure relating to exempt income--Dividend--Assessee having sufficient interest-free funds in form of share capital, reserves and surplus--Investment made by assessee less than interest-free funds--Rule 8D applicable only prospectively--Assessing Officer to disallow 2 per cent. of exempt income as administrative expenditure--Income-tax Act, 1961, s. 14A--Income-tax Rules 1962, r. 8D-- iNautix Technologies India P. Ltd. v. Asst. CIT (Chennai) . . . 324
Industrial undertaking --Special deduction under section 80-IC--Condition precedent--Industrial activity in industrially and economically backward State--No manufacturing activity at place where plant located--Assessee not entitled to special deduction under section 80-IC--Income-tax Act, 1961, s. 80-IC-- Japna Exports v. ITO
(Delhi) . . . 291
----Special deduction--Travelling expenses incurred in foreign currency to be reduced both from export turnover and total turnover--Income-tax Act, 1961, s. 10A-- iNautix Technologies India P. Ltd. v. Asst. CIT (Chennai) . . . 324
International transactions --Arm’s length price--Agreement between assessee and associated enterprise for payment of royalty--Increase in sales achieved by assessee due to utilisation of advanced technical know-how transferred by associated enterprise--Estimating royalty at 2 per cent. applying benefit test in violation of transfer pricing provisions--Transfer pricing adjustment to royalty payment not permissible--Income-tax Act, 1961, s. 92C(3)-- R. A. K. Ceramics India P. Ltd. v. Deputy CIT
(Hyd) . . . 368
Penalty --Concealment of income--Furnishing of inaccurate particulars of income--Failure by assessee to produce details supporting claim to deduction before Assessing Officer--Assessee producing details of ledger account, bills and vouchers during appellate proceedings--Rejection of claim does not automatically attract penalty--Penalty not sustainable--Income-tax Act, 1961, s. 271(1)(c)-- Smt. Anita Kumar v. ITO
(Delhi) . . . 362
Presumptive taxation --Books of account--Assessee withdrawing funds from bank to introduce capital in books of account--Assessee offering income under section 44AD in earlier years--No reason to disbelieve--Addition to be deleted--Income-tax Act, 1961, s. 44AD-- Dhanesh Narbheram Bhansali v. Asst. CIT
(Mumbai) . . . 357
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
S. 10(1) --Agricultural income--Income from production of seeds--Seed is a product of agricultural activity--Income from sale of seeds amounts to agricultural income--Assessee entitled to exemption-- Asst. CIT v . Prabhat Agri Biotech Ltd.
(Hyd) . . . 319
S. 10A --Income--Disallowance of expenditure relating to exempt income--Disallowance to be considered part of business profit in computation of deduction under section 10A-- iNautix Technologies India P. Ltd. v. Asst. CIT
(Chennai) . . . 324
----Industrial undertaking--Special deduction--Travelling expenses incurred in foreign currency to be reduced both from export turnover and total turnover-- iNautix Technologies India P. Ltd. v. Asst. CIT (Chennai) . . . 324
S. 11 --Charitable purposes--Exemption--Donations disclosed as income--Not to be added as cash credits-- ITO v. Saraswati Educational Charitable Trust
(Lucknow) . . . 393
S. 12A --Charitable purposes--Registration--Activities of trust both charitable and religious--Benefits not exclusively meant for particular religious community but for public at large--Provisions of section 13(1)(b) not applicable--Registration to be granted under section 12A--Diocese of Pune (CNI) v. CIT (Pune) . . . 348
----Charitable purpose--Registration--No distinction between religious or charitable institution for purpose of registration--Registration not to be denied on ground of mixed objects--Absence of certain clauses in trust deed--Director of Income-tax (Exemptions) to give opportunity to assessee to explain and make necessary amendments before refusing registration--Matter remanded-- Sri Sri Sri Dattatreya Seva Samsthanam v. DIT (Exemptions)(Hyd) . . . 384
S. 12AA --Charitable purpose--Registration--No distinction between religious or charitable institution for purpose of registration--Registration not to be denied on ground of mixed objects--Absence of certain clauses in trust deed--Director of Income-tax (Exemptions) to give opportunity to assessee to explain and make necessary amendments before refusing registration--Matter remanded-- Sri Sri Sri Dattatreya Seva Samsthanam v. DIT (Exemptions)(Hyd) . . . 384
S. 12AA(1)(b)(ii) --Charitable purposes--Registration--Activities of trust both charitable and religious--Benefits not exclusively meant for particular religious community but for public at large--Provisions of section 13(1)(b) not applicable--Registration to be granted under section 12A-- Diocese of Pune (CNI) v. CIT (Pune) . . . 348
S. 13(1)(b) --Charitable purposes--Registration--Activities of trust both charitable and religious--Benefits not exclusively meant for particular religious community but for public at large--Provisions of section 13(1)(b) not applicable--Registration to be granted under section 12A-- Diocese of Pune (CNI) v. CIT (Pune) . . . 348
S. 14A --Income--Disallowance of expenditure in relation to exempt income--Dividend income--Whether exempt--Matter remanded-- IDBI Capital Market Services Ltd. v. Deputy CIT(Mumbai) . . . 379
----Income--Disallowance of expenditure relating to exempt income--Disallowance to be considered part of business profit in computation of deduction under section 10A-- iNautix Technologies India P. Ltd. v. Asst. CIT (Chennai) . . . 324
----Income--Disallowance of expenditure relating to exempt income--Dividend--Assessee having sufficient interest-free funds in form of share capital, reserves and surplus--Investment made by assessee less than interest-free funds--Rule 8D applicable only prospectively--Assessing Officer to disallow 2 per cent. of exempt income as administrative expenditure-- iNautix Technologies India P. Ltd. v. Asst. CIT
(Chennai) . . . 324
S. 32 --Depreciation--Electric cables and fans--Integral part of machinery--Depreciation allowable at 15 per cent.-- Cera Sanitaryware Ltd. v. Deputy CIT (OSD)
(Ahd) . . . 334
S. 32(1)(iia) --Depreciation--Additional depreciation--Condition precedent--Machinery or plant should be acquired after 31-3-2005--New machinery or plant need not have operational connectivity to products already being manufactured--Assessee fulfilling all conditions--Entitled to additional depreciation-- Cera Sanitaryware Ltd. v. Deputy CIT (OSD) (Ahd) . . . 334
S. 37 --Business expenditure--Discount under employees’ stock option scheme--Object of scheme not to raise share capital but to earn profit by securing consistent and concentrated efforts of dedicated employees--Discount part of package of remuneration and substitute for cash incentive for services of employees--Is revenue expenditure--Allowable--Cera Sanitaryware Ltd. v. Deputy CIT (OSD) (Ahd) . . . 334
S. 40(a)(ia) --Business expenditure--Disallowance--Payments liable to deduction of tax at source--Time period for deducting tax at source lapsing--Disallowance cannot be made--IDBI Capital Market Services Ltd. v. Deputy CIT (Mumbai) . . . 379
S. 43B --Business expenditure--Deduction only on actual payment--Value added tax--Difference between liability and amount paid--Disallowance proper-- Dhanesh Narbheram Bhansali v. Asst. CIT (Mumbai) . . . 357
S. 44AD --Presumptive taxation--Books of account--Assessee withdrawing funds from bank to introduce capital in books of account--Assessee offering income under section 44AD in earlier years--No reason to disbelieve--Addition to be deleted-- Dhanesh Narbheram Bhansali v. Asst. CIT (Mumbai) . . . 357
S. 68 --Charitable purposes--Exemption--Donations disclosed as income--Not to be added as cash credits-- ITO v. Saraswati Educational Charitable Trust
(Lucknow) . . . 393
S. 80-IC --Industrial undertaking--Special deduction under section 80-IC--Condition precedent--Industrial activity in industrially and economically backward State--No manufacturing activity at place where plant located--Assessee not entitled to special deduction under section 80-IC-- Japna Exports v. ITO (Delhi) . . . 291
S. 92C(3) --International transactions--Arm’s length price--Agreement between assessee and associated enterprise for payment of royalty--Increase in sales achieved by assessee due to utilisation of advanced technical know-how transferred by associated enterprise--Estimating royalty at 2 per cent. applying benefit test in violation of transfer pricing provisions--Transfer pricing adjustment to royalty payment not permissible-- R. A. K. Ceramics India P. Ltd. v. Deputy CIT (Hyd) . . . 368
S. 194J --Business expenditure--Disallowance--Payments liable to deduction of tax at source--Time period for deducting tax at source lapsing--Disallowance cannot be made--IDBI Capital Market Services Ltd. v. Deputy CIT (Mumbai) . . . 379
S. 271(1)(c) --Penalty--Concealment of income--Furnishing of inaccurate particulars of income--Failure by assessee to produce details supporting claim to deduction before Assessing Officer--Assessee producing details of ledger account, bills and vouchers during appellate proceedings--Rejection of claim does not automatically attract penalty--Penalty not sustainable-- Smt. Anita Kumar v. ITO (Delhi) . . . 362
R. 8D --Income--Disallowance of expenditure relating to exempt income--Disallowance to be considered part of business profit in computation of deduction under section 10A-- iNautix Technologies India P. Ltd. v. Asst. CIT (Chennai) . . . 324
----Income--Disallowance of expenditure relating to exempt income--Dividend--Assessee having sufficient interest-free funds in form of share capital, reserves and surplus--Investment made by assessee less than interest-free funds--Rule 8D applicable only prospectively--Assessing Officer to disallow 2 per cent. of exempt income as administrative expenditure-- iNautix Technologies India P. Ltd. v. Asst. CIT
(Chennai) . . . 324
----Income--Disallowance of expenditure in relation to exempt income--Dividend income--Whether exempt--Matter remanded-- IDBI Capital Market Services Ltd. v. Deputy CIT(Mumbai) . . . 379
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