ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))--PRINT AND ONLINE EDITION
SUBJECT INDEX TO CASES REPORTED
Appeal to Appellate Tribunal --Limitation--Condonation of delay--Delay of 567 days--No proper explanation for delay--Delay cannot be condoned solely on ground of fairness--Income-tax Act, 1961, s. 263-- Forbes and Co. (Tea Brokers) v . Asst. CIT
(Chennai) . . . 280
Business expenditure --Deduction only on actual payment--Provision for leave encashment--Appeal pending adjudication before Supreme Court on similar issue--Department not to recover penalty and interest accruing till decision of Supreme Court--Assessing Officer to adjudicate afresh in terms of decision of Supreme Court--Matter remanded--Income-tax Act, 1961, s. 43B(f)-- Birla Sun Life Asset Management Company Ltd. v . Deputy CIT (Mumbai) . . . 325
----Payment to third party vendors--Assessing Officer adding unverified payment to three vendors as deemed income--Failure by Assessing Officer to give reasonable time to vendor to furnish details--Failure by Assessing Officer to confront assessee to take present address of vendor or call for requisite information after return of notice with postal remarks--Failure by Assessing Officer to verify genuineness and correctness of transactions between assessee and vendor before reaching conclusion of difference of amount in accounts--Assessing Officer to decide matter afresh--Matter remanded--Income-tax Act, 1961-- Cheil India P. Ltd. v . Deputy CIT (Delhi) . . . 285
Capital or revenue receipt --Assessee receiving amount towards clean development mechanism on sale of carbon credits--Capital receipt--Not liable to tax--Income-tax Act, 1961-- VMD Mills P. Ltd. v . Asst. CIT (Chennai) . . . 312
Charitable purpose --Exemption--Donation for charitable purposes--Special deduction--Approval of institution--Assessee's aims and objects to provide medical relief, informal education and communication of health and nutritional issues to urban slum and rural communities--Assessee entitled to exemption and continuance of approval under section 80G(5)(vi)--Income-tax Act, 1961, ss. 2(15), 11, 12AA, 80G(5)(vi)-- Praxis Institute of Participatory Practices v . DIT (Exemption)
(Delhi) . . . 295
Income from house property --Annual value--Determination--Assessing Officer should conduct proper enquiry and take necessary steps to find out prevailing fair market rent--Addition on account of notional interest on interest-free deposit received by assessee not allowable--Income-tax Act, 1961, s. 23(1)-- Asst. CIT v . Mrs. Bharati Anirudh Kilachand(Mumbai) . . . 317
International transactions --Delay in receiving payments from associated enterprises--Interest for delay--Dispute Resolution Panel allowing 30 days for payment of receivables and charging interest for period beyond it in accordance with Safe Harbour Rule--Failure by assessee to show interest not charged for similar delays--Direction of Dispute Resolution Panel proper--Income-tax Act, 1961, ss. 92B, Expln. (i)(c) , 92F-- Cheil India P. Ltd. v . Deputy CIT (Delhi) . . . 285
Special deduction --Royalty--Royalty received for book on cookery--Failure by assessee to show special qualification in field of cookery and professional activity--Assessee not entitled to claim deduction--Income-tax Act, 1961, s. 80QQB-- Mrs. Pratibha A. Kothavale v . Deputy CIT (Mumbai) . . . 309
Volume 44 : Part 2 (Issue dated : 30-11-2015)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Bad debts --Amounts actually written off in books of account as irrecoverable sufficient--Assessing Officer to allow amount--Income-tax Act, 1961, s. 36(1)(vii)-- Online Media Solutions Ltd. v . Deputy CIT (Hyd) . . . 154
Business expenditure --Current repairs--Capital or revenue expenditure--Waterproofing expenses--Not luxury repairs--Allowable--Income-tax Act, 1961, s. 30(a)(ii)-- Eco RRB Infra P. Ltd. v. Deputy CIT (Delhi) . . . 116
----Depreciation--Expenditure on land for installation of plant and machinery for wind energy generation--No material to demonstrate how land depreciated--Disallowance of depreciation proper--Income-tax Act, 1961-- Eco RRB Infra P. Ltd. v. Deputy CIT (Delhi) . . . 116
----Disallowance--Excessive or unreasonable payments--Payment of incentives to directors--Legitimate need for assessee to employ qualified and experienced persons to carry out its business operations fulfilled by directors--Whether payments made to directors excessive or unreasonable to be examined every year--Financial and operational results justifying payments made to directors--Tax suffered by directors for incentive equivalent to tax rate applicable to assessee--No attempt to evade tax--Disallowance to be deleted--Income-tax Act, 1961, s. 40A(2)-- Edwise Consultants P. Ltd. v. Deputy CIT (Mumbai) . . . 236
----Foreign travel expenses--Senior executive of assessee representing it in shareholders' meet of joint venture--Failure by assessee to demonstrate business purpose of foreign travel--Assessee to demonstrate all matters regarding foreign travel--Assessing Officer to adjudicate issue afresh--Matter remanded--Income-tax Act, 1961, s. 37-- Godavari Corporation P. Ltd. v. ITO (Mumbai) . . . 182
Business income --Remission or cessation of liability--Liabilities of assessee outstanding for many years--Failure by assessee to produce evidence regarding existence of creditor--Inference that liability no longer exists--Assessee claiming liability for previous year--Assessee precluded from contending liability not existing in previous year--Remission or cessation in previous year--Income-tax Act, 1961, s. 41(1)-- Natural Gas Company P. Ltd. v. Deputy CIT (Mumbai) . . . 208
Business loss --Trade advances written off--Assessee re-starting business and in position to furnish details--Assessing Officer to examine whether amounts can be allowed as write off in accordance with provisions of Act--Matter remanded--Income-tax Act, 1961-- Online Media Solutions Ltd. v. Deputy CIT (Hyd) . . . 154
Capital or revenue expenditure --Interest on borrowed capital--Assessee investing borrowed capital in shares--Process of acquisition complete on purchase of shares by assessee--Cost of improvement not applicable in case of shares--Interest on borrowing for period after purchase of shares not cost of improvement--Cannot be treated as cost of acquisition--That dividend income rendered tax exempt from particular year does not alter its character from revenue to capital--Income-tax Act, 1961-- Natural Gas Company P. Ltd. v. Deputy CIT (Mumbai) . . . 208
Cash credits --Unsecured loan--Failure by assessee to furnish confirmations towards increase in unsecured loans--Unsecured loans can be due to fresh credits or due to increase in interest on existing loans--Assessing Officer to examine nature of credit and treat in accordance with provisions of law--Matter remanded--Income-tax Act, 1961, s. 68--Online Media Solutions Ltd. v. Deputy CIT (Hyd) . . . 154
Charitable purpose --Depreciation--Amount spent on asset treated as application of income--Depreciation on asset allowable--Income-tax Act, 1961-- Deputy DIT v. PHD Chamber of Commerce and Industry (Delhi) . . . 219
----Exemption--Activities of assessee held to be charitable in earlier assessment years--Failure by Assessing Officer to bring evidence of changes in activities and profit motive of assessee--Expression “charitable purpose†to be read in context of section 10(23C)(iv)--Assessee's activities driven by charitable motive according to its objects in memorandum of association--Provisions of section 11(4) not attracted--Assessee entitled to exemption--Income-tax Act, 1961, ss. 2(15), 10(23C)(iv), 11(4), 12A-- Deputy DIT v. PHD Chamber of Commerce and Industry (Delhi) . . . 219
Charitable trust --Registration--Denial of registration on ground that objects religious in nature--Maintenance of temple--No prohibition under section 12A from having mixed objects of charitable and religious nature--Maintenance of temple cannot be regarded as religious purpose but for benefit of general public--Registration to be granted--Income-tax Act, 1961, s. 12AA-- Raghunath Das Damodardas Lohia Charitable Trust v. DIT (Exemptions) (Hyd) . . . 161
Deduction of tax at source --Rent--Failure by assessee to deduct tax at source while making lease payment--Lease agreement not available--Tribunal unable to appreciate exact nature of transaction--Assessing Officer to reconsider issue afresh in light of lease deed--No need to recover tax at source from assessee if recipient made payment of taxes--Matter remanded--Income-tax Act, 1961, s. 194-I-- TRIL Infopark Ltd. v. ITO (TDS) (Chennai) . . . 139
----Time limit for passing order--Assessee revising its statement by way of correction--Correction date to be taken as date of filing of statement for all practical purposes--Order passed by Assessing Officer within time limit provided under section 201(3)--Income-tax Act, 1961, s. 201(3)-- TRIL Infopark Ltd. v. ITO (TDS)
(Chennai) . . . 139
Depreciation --Assessee claiming loss incurred in business not depreciation--No question of disallowance of depreciation--Income-tax Act, 1961-- Online Media Solutions Ltd. v. Deputy CIT (Hyd) . . . 154
----Carry forward and set-off--Assessee governed by principle of mutuality and not carrying on any business activity--Carry forward of depreciation not allowable--Income-tax Act, 1961-- ITO v. Nav Shanti Nagar CHS Ltd. (Mumbai) . . . 148
----Vehicles purchased in names of directors--Vehicles used for purpose of business of assessee--Funds for purchase of vehicles provided by assessee and vehicles shown as its assets--Assessee owner of vehicles for all practical purposes--Depreciation allowable--Income-tax Act, 1961-- Edwise Consultants P. Ltd. v. Deputy CIT
(Mumbai) . . . 236
Exemption --Charitable purpose--Educational institution--Denial of exemption for charging capitation fee over and above prescribed fee--Failure by authorities to inquire whether any fee prescribed by any body to which assessee affiliated--Matter remanded for fresh examination--Income-tax Act, 1961, ss. 10(23C), 11, 12A-- International School of Hyderabad v. Deputy DIT (Exemptions)-II (Hyd) . . . 256
Housing project --Special deduction--Additional income detected consequent to search part of sale proceeds of flats project--Assessee entitled to claim deduction under section 80-IB(10)--Income-tax Act, 1961, s. 80-IB(10)-- Madhav Corporation v. Asst. CIT (Ahd) . . . 193
----Special deduction--Assessee working as developer in building project--Entitled to deduction--That part of work contracted out to persons not eligible for deduction not to affect assessee's claim--Income-tax Act, 1961, s. 80-IB(10)-- Madhav Corporation v. Asst. CIT(Ahd) . . . 193
----Special deduction--Condition precedent--Land owner selling undivided co-ownership right in property to various individuals and they in turn entering into construction agreement with assessee--Assessee performing work as contractor and not as developer in designing and selling project--Not eligible for deduction under section 80-IB(10)--Income-tax Act, 1961, s. 80-IB(10)-- Prime Developers v. ITO
(Chennai) . . . 120
Income --Principle of mutuality--Co-operative housing society--Finding that voluntary contributions towards special repair funds made by outgoing members had no element of trading or commerciality and hence covered by principle of mutuality--Failure by Department to contradict findings of Commissioner (Appeals)--Order of Commissioner (Appeals) called for no interference--Income-tax Act, 1961-- ITO v. Nav Shanti Nagar CHS Ltd. (Mumbai) . . . 148
Income from undisclosed sources --Cash deposited in bank--Cash withdrawals by assessee on various dates--No finding that cash available with assessee utilised for other purpose--Cash deposit cannot be treated as income from undisclosed sources--Income-tax Act, 1961-- Sudhirbhai Pravinkant Thaker v. ITO (Ahd) . . . 135
Industrial undertaking --Special deduction--Tribunal setting aside order of Assessing Officer and directing him to apply decision of Special Bench--Assessing Officer defying direction of Tribunal and repeating addition without giving opportunity to assessee--Assessing Officer should follow specific direction by Tribunal and cannot take advantage of order of Tribunal for repeating addition--Assessee entitled to deduction under section 80-IB(10)--Income-tax Act, 1961, s. 80-IB(10)-- Deputy CIT v. Prescon Builders P. Ltd. (Mumbai) . . . 175
Reassessment --Validity--Reason to believe income has escaped assessment--Cannot be on mere whim but based on real material--Statement made at time of survey does not have evidentiary value and cannot be basis for reopening case--Reassessment invalid--Income-tax Act, 1961, ss. 147, 148-- Alfa Radiological Centre P. Ltd. v. ITO (Chandigarh) . . . 184
Transfer pricing --International transactions--Arm's length price--Assessee operating on a mark-up of 15 per cent. of operational costs--Conservative--No transfer pricing adjustment required--Income-tax Act, 1961, s. 92C-- GAP International Sourcing (India) P. Ltd. v. Deputy CIT (Delhi) . . . 168
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
S. 2(15) --Charitable purpose--Exemption--Activities of assessee held to be charitable in earlier assessment years--Failure by Assessing Officer to bring evidence of changes in activities and profit motive of assessee--Expression “charitable purpose†to be read in context of section 10(23C)(iv)--Assessee's activities driven by charitable motive according to its objects in memorandum of association--Provisions of section 11(4) not attracted--Assessee entitled to exemption-- Deputy DIT v. PHD Chamber of Commerce and Industry(Delhi) . . . 219
S. 10(23C) --Exemption--Charitable purpose--Educational institution--Denial of exemption for charging capitation fee over and above prescribed fee--Failure by authorities to inquire whether any fee prescribed by any body to which assessee affiliated--Matter remanded for fresh examination-- International School of Hyderabad v. Deputy DIT (Exemptions)-II (Hyd) . . . 256
S. 10(23C)(iv) --Charitable purpose--Exemption--Activities of assessee held to be charitable in earlier assessment years--Failure by Assessing Officer to bring evidence of changes in activities and profit motive of assessee--Expression “charitable purpose†to be read in context of section 10(23C)(iv)--Assessee's activities driven by charitable motive according to its objects in memorandum of association--Provisions of section 11(4) not attracted--Assessee entitled to exemption-- Deputy DIT v. PHD Chamber of Commerce and Industry(Delhi) . . . 219
S. 11 --Exemption--Charitable purpose--Educational institution--Denial of exemption for charging capitation fee over and above prescribed fee--Failure by authorities to inquire whether any fee prescribed by any body to which assessee affiliated--Matter remanded for fresh examination-- International School of Hyderabad v. Deputy DIT (Exemptions)-II (Hyd) . . . 256
S. 11(4) --Charitable purpose--Exemption--Activities of assessee held to be charitable in earlier assessment years--Failure by Assessing Officer to bring evidence of changes in activities and profit motive of assessee--Expression “charitable purpose†to be read in context of section 10(23C)(iv)--Assessee's activities driven by charitable motive according to its objects in memorandum of association--Provisions of section 11(4) not attracted--Assessee entitled to exemption-- Deputy DIT v. PHD Chamber of Commerce and Industry(Delhi) . . . 219
S. 12A --Charitable purpose--Exemption--Activities of assessee held to be charitable in earlier assessment years--Failure by Assessing Officer to bring evidence of changes in activities and profit motive of assessee--Expression “charitable purpose†to be read in context of section 10(23C)(iv)--Assessee's activities driven by charitable motive according to its objects in memorandum of association--Provisions of section 11(4) not attracted--Assessee entitled to exemption-- Deputy DIT v. PHD Chamber of Commerce and Industry(Delhi) . . . 219
----Exemption--Charitable purpose--Educational institution--Denial of exemption for charging capitation fee over and above prescribed fee--Failure by authorities to inquire whether any fee prescribed by any body to which assessee affiliated--Matter remanded for fresh examination-- International School of Hyderabad v. Deputy DIT (Exemptions)-II (Hyd) . . . 256
S. 12AA --Charitable trust--Registration--Denial of registration on ground that objects religious in nature--Maintenance of temple--No prohibition under section 12A from having mixed objects of charitable and religious nature--Maintenance of temple cannot be regarded as religious purpose but for benefit of general public--Registration to be granted-- Raghunath Das Damodardas Lohia Charitable Trust v. DIT (Exemptions) (Hyd) . . . 161
S. 30(a)(ii) --Business expenditure--Current repairs--Capital or revenue expenditure--Waterproofing expenses--Not luxury repairs--Allowable-- Eco RRB Infra P. Ltd. v. Deputy CIT (Delhi) . . . 116
S. 36(1)(vii) --Bad debts--Amounts actually written off in books of account as irrecoverable sufficient--Assessing Officer to allow amount-- Online Media Solutions Ltd. v . Deputy CIT(Hyd) . . . 154
S. 37 --Business expenditure--Foreign travel expenses--Senior executive of assessee representing it in shareholders' meet of joint venture--Failure by assessee to demonstrate business purpose of foreign travel--Assessee to demonstrate all matters regarding foreign travel--Assessing Officer to adjudicate issue afresh--Matter remanded-- Godavari Corporation P. Ltd. v. ITO (Mumbai) . . . 182
S. 40A(2) --Business expenditure--Disallowance--Excessive or unreasonable payments--Payment of incentives to directors--Legitimate need for assessee to employ qualified and experienced persons to carry out its business operations fulfilled by directors--Whether payments made to directors excessive or unreasonable to be examined every year--Financial and operational results justifying payments made to directors--Tax suffered by directors for incentive equivalent to tax rate applicable to assessee--No attempt to evade tax--Disallowance to be deleted-- Edwise Consultants P. Ltd. v. Deputy CIT (Mumbai) . . . 236
S. 41(1) --Business income--Remission or cessation of liability--Liabilities of assessee outstanding for many years--Failure by assessee to produce evidence regarding existence of creditor--Inference that liability no longer exists--Assessee claiming liability for previous year--Assessee precluded from contending liability not existing in previous year--Remission or cessation in previous year-- Natural Gas Company P. Ltd. v. Deputy CIT (Mumbai) . . . 208
S. 68 --Cash credits--Unsecured loan--Failure by assessee to furnish confirmations towards increase in unsecured loans--Unsecured loans can be due to fresh credits or due to increase in interest on existing loans--Assessing Officer to examine nature of credit and treat in accordance with provisions of law--Matter remanded-- Online Media Solutions Ltd. v. Deputy CIT (Hyd) . . . 154
S. 80-IB(10) --Housing project--Special deduction--Additional income detected consequent to search part of sale proceeds of flats project--Assessee entitled to claim deduction under section 80-IB(10)-- Madhav Corporation v. Asst. CIT
(Ahd) . . . 193
----Housing project--Special deduction--Assessee working as developer in building project--Entitled to deduction--That part of work contracted out to persons not eligible for deduction not to affect assessee's claim-- Madhav Corporation v. Asst. CIT
(Ahd) . . . 193
----Housing project--Special deduction--Condition precedent--Land owner selling undivided co-ownership right in property to various individuals and they in turn entering into construction agreement with assessee--Assessee performing work as contractor and not as developer in designing and selling project--Not eligible for deduction under section 80-IB(10)-- Prime Developers v. ITO (Chennai) . . . 120
----Industrial undertaking--Special deduction--Tribunal setting aside order of Assessing Officer and directing him to apply decision of Special Bench--Assessing Officer defying direction of Tribunal and repeating addition without giving opportunity to assessee--Assessing Officer should follow specific direction by Tribunal and cannot take advantage of order of Tribunal for repeating addition--Assessee entitled to deduction under section 80-IB(10)-- Deputy CIT v. Prescon Builders P. Ltd.
(Mumbai) . . . 175
S. 92C --Transfer pricing--International transactions--Arm's length price--Assessee operating on a mark-up of 15 per cent. of operational costs--Conservative--No transfer pricing adjustment required-- GAP International Sourcing (India) P. Ltd. v. Deputy CIT (Delhi) . . . 168
S. 147 --Reassessment--Validity--Reason to believe income has escaped assessment--Cannot be on mere whim but based on real material--Statement made at time of survey does not have evidentiary value and cannot be basis for reopening case--Reassessment invalid--Alfa Radiological Centre P. Ltd. v. ITO
(Chandigarh) . . . 184
S. 148 --Reassessment--Validity--Reason to believe income has escaped assessment--Cannot be on mere whim but based on real material--Statement made at time of survey does not have evidentiary value and cannot be basis for reopening case--Reassessment invalid--Alfa Radiological Centre P. Ltd. v. ITO
(Chandigarh) . . . 184
S. 194-I --Deduction of tax at source--Rent--Failure by assessee to deduct tax at source while making lease payment--Lease agreement not available--Tribunal unable to appreciate exact nature of transaction--Assessing Officer to reconsider issue afresh in light of lease deed--No need to recover tax at source from assessee if recipient made payment of taxes--Matter remanded-- TRIL Infopark Ltd. v. ITO (TDS)
(Chennai) . . . 139
S. 201(3) --Deduction of tax at source--Time limit for passing order--Assessee revising its statement by way of correction--Correction date to be taken as date of filing of statement for all practical purposes--Order passed by Assessing Officer within time limit provided under section 201(3)-- TRIL Infopark Ltd. v. ITO (TDS)
(Chennai) . . . 139
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