INCOME TAX REPORTS (ITR)--PRINT AND ONLINE EDITION
SUBJECT INDEX TO CASES REPORTED
Appeal to High Court --Monetary limits for litigation by Department--Appeal on identical point for subsequent year admitted--Appeal for earlier year not to be rejected for low tax effect--Income-tax Act, 1961, s. 260A-- CIT v. Bangalore Housing Development and Investments . . .1
Penalty --Concealment of income--Loss shown in returns and income assessed at nil--Penalty imposable--Income-tax Act, 1961, s. 271(1)(c)-- CIT v. Keti Chem Pvt. Ltd. . . . 3
Reassessment --Notice after four years--Not permissible on mere change of opinion --Questions specifically raised and considered in original assessment--No failure by assessee to disclose facts necessary for assessment--No new material--Reassessment on same grounds not permissible--Income-tax Act, 1961, ss. 10B, 148-- Swarovski India Pvt. Ltd. v.Deputy CIT (Delhi) . . . 4
Settlement of cases --Powers of Settlement Commission--Substantive powers of income-tax authorities cannot be exercised--Application for settlement of case--No evidence of undisclosed income--Additions to income by Settlement Commission not valid--Income-tax Act, 1961, ss. 245D, 245F-- Pawan Kumar v. Union of India (Jharkhand) . . . 13
ITR Volume 380 : Part 2 (Issue dated : 11-1-2016)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Depreciation --Carry forward and set off--Amendment in 1996--Effect--Unabsorbed depreciation as on 1-4-1997 can be set off against income from any head for assessment year immediately following 1-4-1997 and thereafter unabsorbed depreciation if any to be set off only against business income for a period of eight assessment years--Income-tax Act, 1961, s. 32(2)-- Peerless General Finance and Investment Co. Ltd. v. CIT . . . 165
Appeal to High Court --Limitation--Application for condonation of delay--No reasonable explanation for delay--Delay could not be condoned--Income-tax Act, 1961, s. 260A-- CIT v.Arvinder Singh (Delhi) . . . 179
----Powers of High Court--High Court has power to consider substantial question of law relating to issue not raised before or considered by Tribunal--Income-tax Act, 1961, s. 260A-- B. J. Services Co. Middle East Ltd. v. Asst. CIT (Uttarakhand) . . . 138
----Substantial questions of law--Exemption--Educational institution--Assessee running two institutions in same premises--Whether composite aggregate income to be segregated--Depends upon status and legal identities--Distinction between two institutions to be considered on basis of recognition--Whether institution established under Societies Registration Act, 1860 to be seen--No examination of status of institution and its annual receipts--No finding whether during assessment year whether there was separate inter college--Substantial questions of law arise--Income-tax Act, 1961, ss. 10(23C)(vi), 260A--CIT (Exemption) v. Chironji Lal Virendra Pal Saraswati Shiksha Parishad (All) . . . 265
Assessment --Amalgamation--Assessee amalgamated with successor company--Assessment proceedings with non-existent assessee--Not valid--Department not entitled to benefit of section 292B--Income-tax Act, 1961, s 292B-- CIT v. Intel Technology India Pvt. Ltd. (Karn) . . . 272
----General principles--Presumption that assessment order has been passed after application of mind--Income-tax Act, 1961, s. 143(3)-- Oracle Systems Corporation v. Asst. DIT (International Taxation) (Delhi) . . . 232
----Notice under section 143(2)--Limitation--Law applicable--Amendment of proviso to section 143(2) with effect from 1-4-2008--Return filed on 24-7-2007--Proviso as amended not applicable--Notice had to be issued within twelve months--Months means calendar months--Notice issued on 26-9-2008--Barred by limitation--Income-tax Act, 1961, s. 143-- Tulsi Food Products v. Deputy CIT (All) . . . 192
Capital gains --Computation of capital gains--Assessee tenant of land for a long time--Tripartite agreement among assessee, landlord and developer--Assessee granted lease for sixty-five years with regard to 18 per cent. of undivided share in land--Cost of construction agreed upon--Computation of capital gains on basis of agreement--Computation not rejected by Assessing Officer--Addition on basis of project cost indicated by developer--Not justified--Income-tax Act, 1961-- CIT v. Khivraj Motors (Karn) . . . 215
Capital or revenue expenditure --Memorandum permitting assessee to let out properties--Compensation to existing tenants for securing vacant possession--Object of deriving higher rent out of business necessity and commercial expediency--No enduring benefit--Revenue expenditure--Income-tax Act, 1961-- Shyam Burlap Co. Ltd. v. CIT (Cal) . . . 151
Deduction of tax at source --Hospital--Payments whether salary or professional charges--Professional doctors not entitled to benefits allowed to salaried doctors--Not employees of hospital but independent professionals--Payments to doctors not salary but professional charges and tax deductible at source accordingly--Income-tax Act, 1961, ss. 192, 194J, 201(1), (1A)-- CIT (TDS) v. Ivy Health Life Sciences Pvt. Ltd. (P&H) . . . 242
Double taxation avoidance --Refund of excess tax paid on behalf of employees by U. K. company--Interest on refund--Rate of tax--Assessee carrying on business through permanent establishment in India--Debt claim in respect of which interest was paid effectively connected with permanent establishment--Interest assessable under paragraph (6) of article 12 of Agreement--Double Taxation Avoidance Agreement between India and the U. K., art. 12-- B. J. Services Co. Middle East Ltd. v. Asst. CIT (Uttarakhand) . . . 138
Exemption --Newly established export oriented undertaking--Condition precedent for exemption under section 10B--Manufacture of article--Meaning of manufacture--Assembling of instruments and apparatus for measuring and detecting ionizing radiators amounts to manufacture--Assessee entitled to exemption under section 10B--Income-tax Act, 1961, s. 10B-- CIT v. Saint Gobain Crystals and Detectors India P. Ltd. (Karn) . . . 226
Income-tax --Principles of consistency--Memorandum of association of assessee permitting it to do business letting out properties--Income from rent whether from property or business--No adjudication in earlier years by Tribunal in light of memorandum--Principles of consistency had no application--That assessee showing income in previous years under “Income from house property†--Not a ground for denial of deduction-- Shyam Burlap Co. Ltd. v. CIT(Cal) . . . 151
Non-resident --Presumptive tax--Mineral oil--Special provision relating to mineral oils--Scope of section 44BB--Section 44BB applicable to profits derived by non-residents by supplying plant and machinery for extraction or production of mineral oils--Provision not applicable to interest on refund of tax--Income-tax Act, 1961, s. 44BB-- B. J. Services Co. Middle East Ltd. v. Asst. CIT (Uttarakhand) . . . 138
Penalty --Concealment of income or furnishing of inaccurate particulars thereof--Amount paid to foreign company--No deduction of tax at source on basis of certificate issued by chartered accountant--No violation of provision of Chapter XVII-B attracting disallowance under section 40(a)(ia)--Failure to deduct tax at source--Not a case of furnishing of inaccurate particulars or concealment of income--Penalty could not be levied--Income-tax Act, 1961, ss. 40(a)(ia), 271(1)(c)-- CIT v. Filtrex Technologies P. Ltd. (Karn) . . . 222
Presumptive tax --Computation of presumptive income--Non-resident--Prospecting for, or extraction or production of mineral oils--Service tax collected by assessee on amount paid to it for rendering services--Service tax not an amount paid or payable or received or deemed to be received by assessee for services rendered by it--Assessee only collecting service tax for passing it on to Government--Not includible in gross receipt--Circular No. 4 of 2008, dated 28-4-2008--Circular No. 1 of 2014, dated 13-1-2014--Income-tax Act, 1961, s. 44BB--DIT v. Mitchell Drilling International Pvt. Ltd. (Delhi) . . . 130
Reassessment --Notice after four years--Failure to disclose material facts necessary for assessment--Assessment under particular provision of Double Taxation Avoidance Agreement between India and USA--Notice on the ground that different part of same provision applicable--No evidence of failure to disclose material facts--Notice not valid--Income-tax Act, 1961, ss. 147, 148--Double Taxation Avoidance Agreement between India and USA, art. 12(2)(a)(ii)-- Oracle Systems Corporation v. Asst. DIT (International Taxation)(Delhi) . . . 232
----Scope of--Effect of Explanation 3 to section 147--Reassessment of income not mentioned in notice under section 148--Such income must come to the notice of the Assessing Officer during the course of reassessment proceedings--Capital gains considered in block assessment proceedings under section 158BC prior to initiation or reassessment proceedings--Could not be reassessed on protective basis--Income-tax Act, 1961, ss. 147, 148-- Dr. Shiva Kant Mishra v. CIT (All) . . . 257
----Writ--Validity of reassessment--Assessee participating in reassessment proceedings--Alternative remedy of appeal available against order of reassessment--Writ would not issue to quash reassessment--Income-tax Act, 1961, ss. 147, 148, 246A--Constitution of India, art. 226-- Mobis India Ltd. v. Deputy CIT (LTU) (Mad) . . . 170
Settlement of cases --Application for settlement of case--Application by person related to applicant--Meaning of “related party†--Effect of Explanation to section 245C(1)--Company would be a related party only if a director of such company has a substantial interest in applicant--Substantial interest should be held directly--Clubbing of shares not permitted--Income-tax Act, 1961, s. 245C-- Rockland Hotels Ltd. v. ITSC, Principal Bench(Delhi) . . . 197
Words and phrases --Meaning of “manufacture†-- CIT v. Saint Gobain Crystals and Detectors India P. Ltd. (Karn) . . . 226
Writ --Existence of alternative remedy--Writ will not normally issue--Constitution of India, art. 226-- Mobis India Ltd. v. Deputy CIT (LTU) (Mad) . . . 170
Non-resident --Taxability in India--Deduction of tax at source--Penalty paid to Government of U. S. A. pursuant to order of court in U. S. A. for violations of securities law in that country--No tax liability--No tax required to be deducted at source--Income-tax Act, 1961, s. 195--Satyam Computer Services Ltd., In re . . . 189
----Taxability in India--Installation project continuing only for 178 days in fiscal year, less than 183 days--No permanent establishment of applicant in India--Business profits from execution of project taxable only in country where applicant was resident--Double Taxation Avoidance Agreement between India and Singapore, art. 7(1)-- Tiong Woon Project and Contracting (Pte) Ltd., In re . . . 187
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Art. 226 --Reassessment--Writ--Validity of reassessment--Assessee participating in reassessment proceedings--Alternative remedy of appeal available against order of reassessment--Writ would not issue to quash reassessment-- Mobis India Ltd. v. Deputy CIT (LTU) (Mad) . . . 170
----Writ--Existence of alternative remedy--Writ will not normally issue-- Mobis India Ltd. v.Deputy CIT (LTU) (Mad) . . . 170
Double Taxation Avoidance Agreement between India and Singapore :
Art. 7(1) --Non-resident--Taxability in India--Installation project continuing only for 178 days in fiscal year, less than 183 days--No permanent establishment of applicant in India--Business profits from execution of project taxable only in country where applicant was resident--Tiong Woon Project and Contracting (Pte) Ltd., In re (AAR. . . 187
Double Taxation Avoidance Agreement between India and the U. K. :
Art. 12 --Double taxation avoidance--Refund of excess tax paid on behalf of employees by U. K. company--Interest on refund--Rate of tax--Assessee carrying on business through permanent establishment in India--Debt claim in respect of which interest was paid effectively connected with permanent establishment--Interest assessable under paragraph (6) of article 12 of Agreement-- B. J. Services Co. Middle East Ltd. v. Asst. CIT(Uttarakhand) . . . 138
Double Taxation Avoidance Agreement between India and USA :
Art. 12(2)(a)(ii) --Reassessment--Notice after four years--Failure to disclose material facts necessary for assessment--Assessment under particular provision of Double Taxation Avoidance Agreement between India and USA--Notice on the ground that different part of same provision applicable--No evidence of failure to disclose material facts--Notice not valid--Oracle Systems Corporation v. Asst. DIT (International Taxation) (Delhi) . . . 232
S. 10(23C)(vi) --Appeal to High Court--Substantial questions of law--Exemption--Educational institution--Assessee running two institutions in same premises--Whether composite aggregate income to be segregated--Depends upon status and legal identities--Distinction between two institutions to be considered on basis of recognition--Whether institution established under Societies Registration Act, 1860 to be seen--No examination of status of institution and its annual receipts--No finding whether during assessment year whether there was separate inter college--Substantial questions of law arise-- CIT (Exemption) v. Chironji Lal Virendra Pal Saraswati Shiksha Parishad (All) . . . 265
S. 10B --Exemption--Newly established export oriented undertaking--Condition precedent for exemption under section 10B--Manufacture of article--Meaning of manufacture--Assembling of instruments and apparatus for measuring and detecting ionizing radiators amounts to manufacture--Assessee entitled to exemption under section 10B-- CIT v. Saint Gobain Crystals and Detectors India P. Ltd. (Karn) . . . 226
S. 32(2) --Depreciation--Carry forward and set off--Amendment in 1996--Effect--Unabsorbed depreciation as on 1-4-1997 can be set off against income from any head for assessment year immediately following 1-4-1997 and thereafter unabsorbed depreciation if any to be set off only against business income for a period of eight assessment years--Peerless General Finance and Investment Co. Ltd. v. CIT (SC). . . 165
S. 40(a)(ia) --Penalty--Concealment of income or furnishing of inaccurate particulars thereof--Amount paid to foreign company--No deduction of tax at source on basis of certificate issued by chartered accountant--No violation of provision of Chapter XVII-B attracting disallowance under section 40(a)(ia)--Failure to deduct tax at source--Not a case of furnishing of inaccurate particulars or concealment of income--Penalty could not be levied--CIT v. Filtrex Technologies P. Ltd. (Karn) . . . 222
S. 44BB --Non-resident--Presumptive tax--Mineral oil--Special provision relating to mineral oils--Scope of section 44BB--Section 44BB applicable to profits derived by non-residents by supplying plant and machinery for extraction or production of mineral oils--Provision not applicable to interest on refund of tax-- B. J. Services Co. Middle East Ltd. v. Asst. CIT(Uttarakhand) . . . 138
----Presumptive tax--Computation of presumptive income--Non-resident--Prospecting for, or extraction or production of mineral oils--Service tax collected by assessee on amount paid to it for rendering services--Service tax not an amount paid or payable or received or deemed to be received by assessee for services rendered by it--Assessee only collecting service tax for passing it on to Government--Not includible in gross receipt-- DIT v. Mitchell Drilling International Pvt. Ltd. (Delhi) . . . 130
S. 143 --Assessment--Notice under section 143(2)--Limitation--Law applicable--Amendment of proviso to section 143(2) with effect from 1-4-2008--Return filed on 24-7-2007--Proviso as amended not applicable--Notice had to be issued within twelve months--Months means calendar months--Notice issued on 26-9-2008--Barred by limitation-- Tulsi Food Products v.Deputy CIT (All) . . . 192
S. 143(3) --Assessment--General principles--Presumption that assessment order has been passed after application of mind-- Oracle Systems Corporation v. Asst. DIT (International Taxation) (Delhi) . . . 232
S. 147 --Reassessment--Notice after four years--Failure to disclose material facts necessary for assessment--Assessment under particular provision of Double Taxation Avoidance Agreement between India and USA--Notice on the ground that different part of same provision applicable--No evidence of failure to disclose material facts--Notice not valid--Oracle Systems Corporation v. Asst. DIT (International Taxation) (Delhi) . . . 232
----Reassessment--Scope of--Effect of Explanation 3 to section 147--Reassessment of income not mentioned in notice under section 148--Such income must come to the notice of the Assessing Officer during the course of reassessment proceedings--Capital gains considered in block assessment proceedings under section 158BC prior to initiation or reassessment proceedings--Could not be reassessed on protective basis-- Dr. Shiva Kant Mishra v. CIT (All) . . . 257
----Reassessment--Writ--Validity of reassessment--Assessee participating in reassessment proceedings--Alternative remedy of appeal available against order of reassessment--Writ would not issue to quash reassessment-- Mobis India Ltd. v. Deputy CIT (LTU) (Mad) . . . 170
S. 148 --Reassessment--Notice after four years--Failure to disclose material facts necessary for assessment--Assessment under particular provision of Double Taxation Avoidance Agreement between India and USA--Notice on the ground that different part of same provision applicable--No evidence of failure to disclose material facts--Notice not valid--Oracle Systems Corporation v. Asst. DIT (International Taxation) (Delhi) . . . 232
----Reassessment--Scope of--Effect of Explanation 3 to section 147--Reassessment of income not mentioned in notice under section 148--Such income must come to the notice of the Assessing Officer during the course of reassessment proceedings--Capital gains considered in block assessment proceedings under section 158BC prior to initiation or reassessment proceedings--Could not be reassessed on protective basis-- Dr. Shiva Kant Mishra v. CIT (All) . . . 257
----Reassessment--Writ--Validity of reassessment--Assessee participating in reassessment proceedings--Alternative remedy of appeal available against order of reassessment--Writ would not issue to quash reassessment-- Mobis India Ltd. v. Deputy CIT (LTU) (Mad) . . . 170
S. 192 --Deduction of tax at source--Hospital--Payments whether salary or professional charges--Professional doctors not entitled to benefits allowed to salaried doctors--Not employees of hospital but independent professionals--Payments to doctors not salary but professional charges and tax deductible at source accordingly-- CIT (TDS) v. Ivy Health Life Sciences Pvt. Ltd. (P&H) . . . 242
S. 194J --Deduction of tax at source--Hospital--Payments whether salary or professional charges--Professional doctors not entitled to benefits allowed to salaried doctors--Not employees of hospital but independent professionals--Payments to doctors not salary but professional charges and tax deductible at source accordingly-- CIT (TDS) v. Ivy Health Life Sciences Pvt. Ltd. (P&H) . . . 242
S. 195 --Non-resident--Taxability in India--Deduction of tax at source--Penalty paid to Government of U. S. A. pursuant to order of court in U. S. A. for violations of securities law in that country--No tax liability--No tax required to be deducted at source-- Satyam Computer Services Ltd., In re (AAR). . . 189
S. 201(1) --Deduction of tax at source--Hospital--Payments whether salary or professional charges--Professional doctors not entitled to benefits allowed to salaried doctors--Not employees of hospital but independent professionals--Payments to doctors not salary but professional charges and tax deductible at source accordingly-- CIT (TDS) v. Ivy Health Life Sciences Pvt. Ltd. (P&H) . . . 242
S. 201(1A) --Deduction of tax at source--Hospital--Payments whether salary or professional charges--Professional doctors not entitled to benefits allowed to salaried doctors--Not employees of hospital but independent professionals--Payments to doctors not salary but professional charges and tax deductible at source accordingly-- CIT (TDS) v. Ivy Health Life Sciences Pvt. Ltd. (P&H) . . . 242
S. 245C --Settlement of cases--Application for settlement of case--Application by person related to applicant--Meaning of “related party†--Effect of Explanation to section 245C(1)--Company would be a related party only if a director of such company has a substantial interest in applicant--Substantial interest should be held directly--Clubbing of shares not permitted-- Rockland Hotels Ltd. v. ITSC, Principal Bench (Delhi) . . . 197
S. 246A --Reassessment--Writ--Validity of reassessment--Assessee participating in reassessment proceedings--Alternative remedy of appeal available against order of reassessment--Writ would not issue to quash reassessment-- Mobis India Ltd. v. Deputy CIT (LTU) (Mad) . . . 170
S. 260A --Appeal to High Court--Limitation--Application for condonation of delay--No reasonable explanation for delay--Delay could not be condoned-- CIT v. Arvinder Singh(Delhi) . . . 179
----Appeal to High Court--Powers of High Court--High Court has power to consider substantial question of law relating to issue not raised before or considered by Tribunal-- B. J. Services Co. Middle East Ltd. v. Asst. CIT (Uttarakhand) . . . 138
----Appeal to High Court--Substantial questions of law--Exemption--Educational institution--Assessee running two institutions in same premises--Whether composite aggregate income to be segregated--Depends upon status and legal identities--Distinction between two institutions to be considered on basis of recognition--Whether institution established under Societies Registration Act, 1860 to be seen--No examination of status of institution and its annual receipts--No finding whether during assessment year whether there was separate inter college--Substantial questions of law arise-- CIT (Exemption) v. Chironji Lal Virendra Pal Saraswati Shiksha Parishad (All) . . . 265
S. 271(1)(c) --Penalty--Concealment of income or furnishing of inaccurate particulars thereof--Amount paid to foreign company--No deduction of tax at source on basis of certificate issued by chartered accountant--No violation of provision of Chapter XVII-B attracting disallowance under section 40(a)(ia)--Failure to deduct tax at source--Not a case of furnishing of inaccurate particulars or concealment of income--Penalty could not be levied-- CIT v. Filtrex Technologies P. Ltd. (Karn) . . . 222
S. 292B --Assessment--Amalgamation--Assessee amalgamated with successor company--Assessment proceedings with non-existent assessee--Not valid--Department not entitled to benefit of section 292B-- CIT v. Intel Technology India Pvt. Ltd. (Karn) . . . 272
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