ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))--PRINT AND ONLINE EDITION
SUBJECT INDEX TO CASES REPORTED
Business expenditure --Payments through credit card--No evidence to show that assessee incurred expenditure for non-business purposes--Payments made by cheque by companies in which assessee director--Department accepting expenditure of companies--Commissioner (Appeals) rightly restricting disallowance to 5 per cent. of credit card expenses--Income-tax Act, 1961-- ITO v . Kanwar Deep Anand
(Delhi) . . . 115
Capital gains --Exemption--Assessee purchasing land and putting up construction within three years--Facts showing capital gains received by assessee duly invested in purchase of land and construction of residential house--Assessee entitled to exemption--Income-tax Act, 1961, s. 54F-- ITO v . Kanwar Deep Anand
(Delhi) . . . 115
Depreciation --Rate of depreciation--Assessee carrying on business of oil and gas exploration in drilling wells using rigs--Work-over rigs falling under category of heavy goods vehicle drilling rigs--Entitled to higher rate of depreciation at 40 per cent.--Income-tax Act, 1961, s. 32-- John Energy Ltd. v . Deputy CIT (Ahd) . . . 127
Income --Disallowance of expenditure in relation to income not forming part of total income--Share transactions--Purchase and sale of shares through bank account--Payment of securities transaction tax by cheque--Confirmation of transaction by ledger accounts--Disallowance by Assessing Officer not justified--Income-tax Act, 1961-- ITO v . Kanwar Deep Anand (Delhi) . . . 115
Volume 43 : Part 3 (Issue dated : 19-10-2015)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Advance tax --Interest--Computation of interest--Interest under section 234C to be computed taking date of presentation of cheque as date of payment of tax not date of realisation of cheque--Income-tax Act, 1961, s. 234C-- Sandip Bhagat v . Asst. CIT
(Delhi) . . . 270
Business expenditure --Amortisation of preliminary expenses--Deduction admissible in connection with issue for public subscription of shares or debentures of a company--Assessee increasing share capital by way of private placement with holding company--Deduction under section 35D not allowable--Income-tax Act, 1961, s. 35D-- Aditya Birla Finance Ltd. v. Asst. CIT (OSD) (Mumbai) . . . 373
----Deduction only on actual payment--Provision for leave encashment--Commissioner (Appeals) deleting disallowance holding that provision made on actuarial estimation--Matter remanded for fresh examination--Income-tax Act, 1961, s. 43B(f)-- Aditya Birla Finance Ltd. v. Asst. CIT (OSD) (Mumbai) . . . 373
----Disallowance--Payments liable to deduction of tax at source--Assessee depositing tax deducted at source in Government account before filing return of income--No disallowance can be made under section 40(a)(ia)--Income-tax Act, 1961, s. 40(a)(ia)-- Pushkar Construction Co. v. ITO (Ahd) . . . 293
----Disallowance--Payments liable to deduction of tax at source--Commission payments to non-residents--Deduction of tax at source only where income chargeable under provisions of 1961 Act to tax--No material on record to establish that non-resident agents carried out any part of their business in India--No findings that payments made to non-residents chargeable to tax under Act--Section 195 not applicable--No disallowance can be made--Income-tax Act, 1961, ss. 40(a)(i), 195-- Euroflex Transmissions (India) P. Ltd. v. Asst. CIT(Hyd) . . . 348
----Disallowance--Payments liable to deduction of tax at source--Failure by authorities to find whether payee included payment received from assessee as its income and paid tax on it--Matter remanded for re-examination--Income-tax Act, 1961, s. 40(a)(ia)-- Pushkar Construction Co. v. ITO (Ahd) . . . 293
----Interest on borrowed capital--Finding that unsecured loan fully covered by interest-free funds available with assessee--Failure by Department to controvert findings--Deletion of addition proper--Income-tax Act, 1961-- Asst. CIT v. Ruksh International (Lucknow) . . . 326
Business loss --Financial irregularities committed by employees in earlier years detected during previous year--Resulting in loss--Not a prior period expense--Expenditure allowable in current assessment year--Income-tax Act, 1961-- Asst. CIT v. Boots Piramal Health Care Ltd. (Mumbai) . . . 355
Capital or revenue expenditure --Expenditure incurred for purchase of licence for Windows application software--Revenue expenditure--Income-tax Act, 1961-- Asst. CIT v. Boots Piramal Health Care Ltd. (Mumbai) . . . 355
----Expenditure incurred on construction in leasehold premises--Applying test of Explanation 1 to section 32(1)--Expenditure capital in nature--Income-tax Act, 1961, s. 32, Expln. 1 --Continental Enterprise v. ITO (Chennai) . . . 260
----Expenditure incurred on repair and maintenance--No new assets--Revenue expenditure--Income-tax Act, 1961-- Asst. CIT v. Boots Piramal Health Care Ltd.
(Mumbai) . . . 355
----Foreign exchange fluctuation loss--Revenue expenditure--Income-tax Act, 1961-- Asst. CIT v. Boots Piramal Health Care Ltd. (Mumbai) . . . 355
Charitable purpose --Application of income--Consideration from transfer of capital asset of trust for charitable purpose utilised for acquiring another capital asset--Capital gains arising from transfer deemed to be applied to charitable purposes--No condition that capital asset to be held till end of financial year--Income-tax Act, 1961, s. 11(1A)-- South Point Education Society v. ITO (Exemption)-II (Kolkata) . . . 287
----Special deduction--Application for approval under section 80G--Failure by Commissioner to examine whether or not expenditure on religious purpose incurred by assessee exceeded 5 per cent. as prescribed under section 80G(5B)--Matter remanded for fresh examination--Income-tax Act, 1961, s. 80G(5B)-- International Pentecostal Church of God v. ITO(Chennai) . . . 332
Charitable trust --Depreciation--Cost of assets allowed as application of income for charitable purpose--Depreciation on assets to be allowed--Income-tax Act, 1961, s. 12A--ITO (E) v. Our Lady of Milagres Church (Bang) . . . 380
Co-operative society --Special deduction--Disqualification applicable only to co-operative banks--Assessee entitled to deduction--Income-tax Act, 1961, s. 80P(2)(a)(i)-- ITO v. Jamkhandi Taluka School Teachers Co-operative Credit Society Ltd.
(Bang) . . . 365
Deduction of tax at source --Assessee obtaining certificate of no deduction from Assessing Officer--Not required to deduct tax at source for reimbursement--Assessee deducting tax at source wherever required--Disallowance of expenditure not proper--Income-tax Act, 1961--Asst. CIT v. Boots Piramal Health Care Ltd.
(Mumbai) . . . 355
Depreciation --Additional depreciation on reconditioned imported machinery--Assessee reconditioning machine with substantial percentage of new parts--Such machine to be treated as new machine--Depreciation allowable--Income-tax Act, 1961-- Asst. CIT v. Ruksh International (Lucknow) . . . 326
----Assessing Officer disallowing depreciation on drum and paddle on basis of purchase date--Material date is date of installation and not date of acquisition--Installation of material in previous year--Depreciation allowable--Income-tax Act, 1961-- Asst. CIT v. Ruksh International (Lucknow) . . . 326
----Goodwill--Is an asset--Assessee entitled to depreciation on goodwill--Income-tax Act, 1961, s. 32(1)(ii)-- PPG Asian Paints P. Ltd. v. Asst. CIT (LTU)
(Mumbai) . . . 307
----Plant and machinery--Effluent plant--Cost of construction of tank forming integral part of effluent treatment plant--Depreciation allowable at rate applicable for plant and machinery--Chrome recovery plant--Depreciation allowable at 50 per cent., since plant used for less than 180 days--Income-tax Act, 1961--Income-tax Rules, 1962, r. 5-- Asst. CIT v. Ruksh International (Lucknow) . . . 326
Exemption --Charitable purpose--Educational institution--Application for renewal of exemption under section 10(23C)(vi) rejected by competent authority and matter pending before High Court--Assessee seeking income to be considered under section 11--Ground raised by assessee not maintainable--Income-tax Act, 1961, s. 10(23C)(vi)-- South Point Education Society v. ITO (Exemption)-II (Kolkata) . . . 287
Housing project --Special deduction--Assessee selling four flats each less than 1500 sq.ft. to different purchasers--Owners combining four flats into two resulting in excess in area of 1500 sq.ft.--Deduction under section 80-IB(10) cannot be denied on ground that assessee selling flat in excess of 1500 sq.ft.--Income-tax Act, 1961, s. 80-IB(10)-- Pushkar Construction Co. v. ITO (Ahd) . . . 293
----Special deduction--Condition precedent--Agreement to construct three blocks in single project--Section 80-IB(10) not specifying size or number of housing project undertaken on a plot having minimum area of one acre--Assessee fulfilling all conditions stipulated under section 80-IB(10)--Deduction cannot be denied on ground that area of project less than one acre--Assessee entitled to deduction--Income-tax Act, 1961, s. 80-IB(10)-- Pushkar Construction Co. v. ITO (Ahd) . . . 293
----Special deduction--Condition precedent--Assessee completing only three blocks out of six blocks within stipulated period of five years--Assessee eligible to claim deduction--Assessing Officer to determine whether deduction claimed for entire project or only for completed blocks--Matter remanded to decide quantum of deduction--Income-tax Act, 1961, s. 80-IB(10)-- Vertex Homes P. Ltd. v. Deputy CIT (Hyd) . . . 340
Income --Accrual of income--Advances received by actor--Income not crystallised to assessee--Advances not assessable as income--Addition to be deleted--Income-tax Act, 1961-- R. S. Suriya v. Asst. CIT (Chennai) . . . 309
----Disallowance of expenditure relating to exempt income--Rule 8D not applicable prior to 2008-09--Disallowance under rule 8D can be invoked if Assessing Officer not satisfied with correctness of claim made by assessee in respect of expenditure--Matter remanded to Assessing Officer to examine suo motu disallowance by assessee--Income-tax Act, 1961, s. 14A--Income-tax Rules, 1962, r. 8D-- Aditya Birla Finance Ltd. v. Asst. CIT (OSD) (Mumbai) . . . 373
Penalty --Business expenditure--Payments to Employees’ Provident Fund and Employees’ State Insurance after due date but before due date for furnishing return of income--Allowable--Penalty cannot be imposed--Income-tax Act, 1961, ss. 36(1)(va), 139(1), 43B, 271(1)(c)-- Tristar Intech P. Ltd. v. Asst. CIT (Delhi) . . . 279
----Concealment of income and furnishing of inaccurate particulars of income--Distinction--Assessee discharging onus by accepting mistakes and rectifying them in revised return--Bona fide error by assessee--Mere disallowances not conclusive evidence of concealment--Not fit case for levy of penalty--Income-tax Act, 1961, s. 271(1)(c)-- Tristar Intech P. Ltd. v. Asst. CIT (Delhi) . . . 279
Rectification of mistakes --Issues which require detailed examination and analysis cannot be rectified--Commissioner (Appeals) holding assessee entitled to exemption--Assessing Officer has no power to restore original assessment order in guise of modification under section 154--Income-tax Act, 1961, ss. 11, 12A, 13, 154-- Deputy DIT (Exemptions)-II v. Shadan Educational Society (Hyd) . . . 318
Special deduction --Deduction in respect of interest on loan taken for higher education--Son of assessee pursuing higher education in United States of America--No stipulation under section 80E that education should be in India--Assessee entitled to deduction--Income-tax Act, 1961, s. 80E-- Nitin Shantilal Muthiyan v. Deputy CIT
(Pune) . . . 335
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
S. 10(23C)(vi) --Exemption--Charitable purpose--Educational institution--Application for renewal of exemption under section 10(23C)(vi) rejected by competent authority and matter pending before High Court--Assessee seeking income to be considered under section 11--Ground raised by assessee not maintainable-- South Point Education Society v. ITO (Exemption)-II (Kolkata) . . . 287
S. 11 --Rectification of mistakes--Issues which require detailed examination and analysis cannot be rectified--Commissioner (Appeals) holding assessee entitled to exemption--Assessing Officer has no power to restore original assessment order in guise of modification under section 154-- Deputy DIT (Exemptions)-II v. Shadan Educational Society(Hyd) . . . 318
S. 11(1A) --Charitable purpose--Application of income--Consideration from transfer of capital asset of trust for charitable purpose utilised for acquiring another capital asset--Capital gains arising from transfer deemed to be applied to charitable purposes--No condition that capital asset to be held till end of financial year-- South Point Education Society v. ITO (Exemption)-II (Kolkata) . . . 287
S. 12A --Charitable trust--Depreciation--Cost of assets allowed as application of income for charitable purpose--Depreciation on assets to be allowed-- ITO (E) v. Our Lady of Milagres Church (Bang) . . . 380
----Rectification of mistakes--Issues which require detailed examination and analysis cannot be rectified--Commissioner (Appeals) holding assessee entitled to exemption--Assessing Officer has no power to restore original assessment order in guise of modification under section 154-- Deputy DIT (Exemptions)-II v. Shadan Educational Society (Hyd) . . . 318
S. 13 --Rectification of mistakes--Issues which require detailed examination and analysis cannot be rectified--Commissioner (Appeals) holding assessee entitled to exemption--Assessing Officer has no power to restore original assessment order in guise of modification under section 154-- Deputy DIT (Exemptions)-II v. Shadan Educational Society(Hyd) . . . 318
S. 14A --Income--Disallowance of expenditure relating to exempt income--Rule 8D not applicable prior to 2008-09--Disallowance under rule 8D can be invoked if Assessing Officer not satisfied with correctness of claim made by assessee in respect of expenditure--Matter remanded to Assessing Officer to examine suo motu disallowance by assessee-- Aditya Birla Finance Ltd. v. Asst. CIT (OSD) (Mumbai) . . . 373
S. 32, Expln. 1 --Capital or revenue expenditure--Expenditure incurred on construction in leasehold premises--Applying test of Explanation 1 to section 32(1)--Expenditure capital in nature-- Continental Enterprise v. ITO (Chennai) . . . 260
S. 32(1)(ii) --Depreciation--Goodwill--Is an asset--Assessee entitled to depreciation on goodwill-- PPG Asian Paints P. Ltd. v. Asst. CIT (LTU) (Mumbai) . . . 307
S. 35D --Business expenditure--Amortisation of preliminary expenses--Deduction admissible in connection with issue for public subscription of shares or debentures of a company--Assessee increasing share capital by way of private placement with holding company--Deduction under section 35D not allowable-- Aditya Birla Finance Ltd. v. Asst. CIT (OSD)(Mumbai) . . . 373
S. 36(1)(va) --Penalty--Business expenditure--Payments to Employees’ Provident Fund and Employees’ State Insurance after due date but before due date for furnishing return of income--Allowable--Penalty cannot be imposed-- Tristar Intech P. Ltd. v. Asst. CIT (Delhi) . . . 279
S. 40(a)(i) --Business expenditure--Disallowance--Payments liable to deduction of tax at source--Commission payments to non-residents--Deduction of tax at source only where income chargeable under provisions of 1961 Act to tax--No material on record to establish that non-resident agents carried out any part of their business in India--No findings that payments made to non-residents chargeable to tax under Act--Section 195 not applicable--No disallowance can be made-- Euroflex Transmissions (India) P. Ltd. v. Asst. CIT (Hyd) . . . 348
S. 40(a)(ia) --Business expenditure--Disallowance--Payments liable to deduction of tax at source--Assessee depositing tax deducted at source in Government account before filing return of income--No disallowance can be made under section 40(a)(ia)-- Pushkar Construction Co. v. ITO (Ahd) . . . 293
----Business expenditure--Disallowance--Payments liable to deduction of tax at source--Failure by authorities to find whether payee included payment received from assessee as its income and paid tax on it--Matter remanded for re-examination-- Pushkar Construction Co. v. ITO (Ahd) . . . 293
S. 43B --Penalty--Business expenditure--Payments to Employees’ Provident Fund and Employees’ State Insurance after due date but before due date for furnishing return of income--Allowable--Penalty cannot be imposed-- Tristar Intech P. Ltd. v. Asst. CIT (Delhi) . . . 279
S. 43B(f) --Business expenditure--Deduction only on actual payment--Provision for leave encashment--Commissioner (Appeals) deleting disallowance holding that provision made on actuarial estimation--Matter remanded for fresh examination-- Aditya Birla Finance Ltd. v. Asst. CIT (OSD) (Mumbai) . . . 373
S. 80E --Special deduction--Deduction in respect of interest on loan taken for higher education--Son of assessee pursuing higher education in United States of America--No stipulation under section 80E that education should be in India--Assessee entitled to deduction-- Nitin Shantilal Muthiyan v. Deputy CIT (Pune) . . . 335
S. 80G(5B) --Charitable purpose--Special deduction--Application for approval under section 80G--Failure by Commissioner to examine whether or not expenditure on religious purpose incurred by assessee exceeded 5 per cent. as prescribed under section 80G(5B)--Matter remanded for fresh examination-- International Pentecostal Church of God v. ITO (Chennai) . . . 332
S. 80-IB(10) --Housing project--Special deduction--Assessee selling four flats each less than 1500 sq.ft. to different purchasers--Owners combining four flats into two resulting in excess in area of 1500 sq.ft.--Deduction under section 80-IB(10) cannot be denied on ground that assessee selling flat in excess of 1500 sq.ft.-- Pushkar Construction Co. v. ITO (Ahd) . . . 293
----Housing project--Special deduction--Condition precedent--Agreement to construct three blocks in single project--Section 80-IB(10) not specifying size or number of housing project undertaken on a plot having minimum area of one acre--Assessee fulfilling all conditions stipulated under section 80-IB(10)--Deduction cannot be denied on ground that area of project less than one acre--Assessee entitled to deduction-- Pushkar Construction Co. v. ITO (Ahd) . . . 293
----Housing project--Special deduction--Condition precedent--Assessee completing only three blocks out of six blocks within stipulated period of five years--Assessee eligible to claim deduction--Assessing Officer to determine whether deduction claimed for entire project or only for completed blocks--Matter remanded to decide quantum of deduction-- Vertex Homes P. Ltd. v. Deputy CIT (Hyd) . . . 340
S. 80P(2)(a)(i) --Co-operative society--Special deduction--Disqualification applicable only to co-operative banks--Assessee entitled to deduction-- ITO v. Jamkhandi Taluka School Teachers Co-operative Credit Society Ltd. (Bang) . . . 365
S. 139(1) --Penalty--Business expenditure--Payments to Employees’ Provident Fund and Employees’ State Insurance after due date but before due date for furnishing return of income--Allowable--Penalty cannot be imposed-- Tristar Intech P. Ltd. v. Asst. CIT (Delhi) . . . 279
S. 154 --Rectification of mistakes--Issues which require detailed examination and analysis cannot be rectified--Commissioner (Appeals) holding assessee entitled to exemption--Assessing Officer has no power to restore original assessment order in guise of modification under section 154-- Deputy DIT (Exemptions)-II v. Shadan Educational Society(Hyd) . . . 318
S. 195 --Business expenditure--Disallowance--Payments liable to deduction of tax at source--Commission payments to non-residents--Deduction of tax at source only where income chargeable under provisions of 1961 Act to tax--No material on record to establish that non-resident agents carried out any part of their business in India--No findings that payments made to non-residents chargeable to tax under Act--Section 195 not applicable--No disallowance can be made-- Euroflex Transmissions (India) P. Ltd. v. Asst. CIT (Hyd) . . . 348
S. 234C --Advance tax--Interest--Computation of interest--Interest under section 234C to be computed taking date of presentation of cheque as date of payment of tax not date of realisation of cheque-- Sandip Bhagat v . Asst. CIT (Delhi) . . . 270
S. 271(1)(c) --Penalty--Business expenditure--Payments to Employees’ Provident Fund and Employees’ State Insurance after due date but before due date for furnishing return of income--Allowable--Penalty cannot be imposed-- Tristar Intech P. Ltd. v. Asst. CIT (Delhi) . . . 279
----Penalty--Concealment of income and furnishing of inaccurate particulars of income--Distinction--Assessee discharging onus by accepting mistakes and rectifying them in revised return--Bona fide error by assessee--Mere disallowances not conclusive evidence of concealment--Not fit case for levy of penalty-- Tristar Intech P. Ltd. v. Asst. CIT (Delhi) . . . 279
R. 5 --Depreciation--Plant and machinery--Effluent plant--Cost of construction of tank forming integral part of effluent treatment plant--Depreciation allowable at rate applicable for plant and machinery--Chrome recovery plant--Depreciation allowable at 50 per cent., since plant used for less than 180 days-- Asst. CIT v. Ruksh International (Lucknow) . . . 326
R. 8D --Income--Disallowance of expenditure relating to exempt income--Rule 8D not applicable prior to 2008-09--Disallowance under rule 8D can be invoked if Assessing Officer not satisfied with correctness of claim made by assessee in respect of expenditure-- Matter remanded to Assessing Officer to examine suo motu disallowance by assessee-- Aditya Birla Finance Ltd. v. Asst. CIT (OSD) (Mumbai) . . . 373
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