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Tuesday, March 8, 2016

ITR (TRIB) Volume 46 : Part 2 (Issue dated : 29-2-2016)



 

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

ONLINE EDITION

SUBJECT INDEX TO CASES REPORTED

Business expenditure --Disallowance--Cash expenses--Not supported by proper vouchers--Expenses incurred for non-business purpose--Disallowance of five per cent. out of balance expenses--Justified--Income-tax Act, 1961, s. 37-- Saigal Sea Trade v. Asst. CIT (Mumbai) . . . 131

Capital gains --Short-term capital gains--Computation--Purchase and sale of shares--Fees paid under portfolio management scheme--No cost of acq uisition or of improvement--No direct nexus with purchase and sale of shares--Not deductible--Income-tax Act, 1961, s. 48(1)-- Saigal Sea Trade v. Asst. CIT 
(Mumbai) . . . 131

----Short-term capital gains--Purchase of flats disclosed in balance-sheets--No opportunity given to assessee to gather and produce evidence in view of time-limit for assessment--Admission of additional evidence by Commissioner (Appeals) justified--Agreement value and annual information report tallying--No undisclosed capital gains--Income-tax Act, 1961--Income-tax Rules, 1962, r. 46A-- Saigal Sea Trade v. Asst. CIT
(Mumbai) . . . 131

Capital or revenue expenditure --Assessee operating certain stores and in process of opening more stores--Nature of business activities of all identical--Expansion of business activities--Expenditure revenue in nature--Treatment given in books of account not relevant--Income-tax Act, 1961, s. 37(1)-- Reliance Wellness Ltd. v. Deputy CIT
(Mumbai) . . . 151

Depreciation --Residential building--Residential premises for employees--Absence of details of names of employees to whom premises allotted and in whose hands perquisite offered--Matter remanded for affording reasonable opportunity to assessee to produce details--Income-tax Act, 1961, s. 32-- Saigal Sea Trade v. Asst. CIT 
(Mumbai) . . . 131

Income --Mode and method of computing disallowance of expenditure for earning exempt income--No satisfaction recorded by Assessing Officer that working of disallowance made by assessee against income exempt from tax incorrect--Disallowance not justified--Income-tax Act, 1961, s. 14A-- Saigal Sea Trade v. Asst. CIT 
(Mumbai) . . . 131

 

PRINT EDITION

Volume 46 : Part 2 (Issue dated : 29-2-2016)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Business expenditure --Amortisation of preliminary expenses--Assessee a banking company--Deduction under section 35D not allowable--Income-tax Act, 1961, s. 35D-- Yes Bank Ltd. v. Addl. CIT (Mumbai) . . . 317

----Deduction only on actual payment--Accounting--Method of accounting--Provision mandating inclusive method of accounting to follow tax, duties, cess or levy--Assessee ought to follow inclusive method in respect of modvat--Income-tax Act, 1961 s. 145A--Mazagaon Dock Ltd. v. ITO (Mumbai) . . . 162

----Deduction only on actual payment--Service tax--Deduction allowed on payment basis in immediately preceding assessment year--Assessee precluded from claiming amount again in next assessment year--Income-tax Act, 1961, s. 43B-- Mazagaon Dock Ltd. v. ITO (Mumbai) . . . 162

----Disallowance--Advertisement expenses--Ledger and bills produced before authorities--No discrepancy pointed out by them--Disallowance in earlier years--No estoppel--No disallowance--Income-tax Act, 1961, s. 37-- Sahil Study Circle P. Ltd. v. Deputy CIT (Delhi) . . . 182

----Disallowance--Payments liable to deduction of tax at source--Expenditure incurred towards promotion, advertisement and legal fee--Provisions of section 9(1)(v) or (vi) or (vii) not applicable--Disallowance under section 40(a)(i) not proper--Income-tax Act, 1961, ss. 9(1), 40(a)(i)-- Brakes India Ltd. v. Deputy CIT
(Chennai) . . . 212

----Disallowance--Payments liable to deduction of tax at source--Interest paid to banks in India for amount borrowed from foreign banks and payment not made in foreign currency--Payments exempted from tax deduction at source--Disallowance under section 40(a)(i) not warranted--Income-tax Act, 1961, s. 40(a)(i)-- Brakes India Ltd. v. Deputy CIT (Chennai) . . . 212

----Prior period income--Prior period expenses--Disallowing of entire amount of prior period expenses while assessing entire amount of prior period income--Not justified--Disallowance by netting off prior period income against prior period expenditure--Justified--Income-tax Act, 1961, s. 37-- Mazagaon Dock Ltd. v. ITO
(Mumbai) . . . 162

Capital gains --Exemption--Sale of property and investment of consideration in purchase or construction of residential property--Assessee utilising entire capital gains within period of one year--Construction of house not completed due to circumstances beyond assessee's control--Assessee entitled to exemption--Income-tax Act, 1961, s. 54-- ITO v. Narayana Rao(Hyd) . . . 178

Cash credit --Unexplained cash credit--Assessing Officer making addition on amount of share capital relying on statement of director of one of investing companies--Shareholding company confirming on inquiries--Assessing Officer disregarding all evidence collected directly from shareholder company and filed by assessee--Failure by Assessing Officer to provide opportunity of cross-examination of assessee's witness--Addition made by Assessing Officer not sustainable--Income-tax Act, 1961, s. 68-- Vitrag Metal P. Ltd. v. ITO(Mumbai) . . . 201

----Gift--Foreign gifts--Genuineness--Assessee receiving foreign gift from his son's friend--Failure by assessee to prove any love and affection with donor--Failure to prove execution of valid gift--Gift amount treated as unexplained cash credits--Income-tax Act, 1961, s. 68--Deputy CIT v. Bhanuprasad O. Trivedi (Ahd) . . . 307

Charitable purposes --Charitable trust--Registration--Cancellation--Grounds on which cancellation permissible--No satisfaction that activities of assessee either not genuine or not carried out in accordance with objects of trust--Object of general public utility--Disqualification--Activities such as holding conferences, seminars, publishing journals for its members not in nature of business, trade or commerce--No violation--Cancellation not justified--Income-tax Act, 1961, ss. 2(15), 12A, 12AA(3)-- Builders Association of India v. Deputy CIT (Exemption) (Mumbai) . . . 295

Company --Book profits--Income--Disallowance of expenditure on earning non-taxable income--Disallowance made cannot be added back to compute book profits--Income-tax Act, 1961 ss. 14A, 115JB--Income-tax Rules, 1962, r. 8D-- Brakes India Ltd. v. Deputy CIT(Chennai) . . . 212

Deduction of tax at source --Short deduction of tax--Assessee in default--Interest--Recipients disclosing amount received from assessee in returns filed by them for relevant assessment year--Assessee not assessee in default--Assessing Officer directed to verify whether taxes paid by recipients--Assessee liable to pay interest till date of payment of taxes by recipients on income received from assessee--Income-tax Act, 1961, s. 201(1), (1A)-- Wockhardt Hospitals Ltd. v. Asst. CIT (TDS) (Mumbai) . . . 259

Depreciation --Additional depreciation--Additions made to plant and machinery during second half of preceding year and fifty per cent. of additional depreciation allowed--No carry forward of residual additional depreciation permissible--Income-tax Act, 1961, s. 32(1)(iia)--Brakes India Ltd. v. Deputy CIT (Chennai) . . . 212

Donations to charitable institutions --Special deduction--Approval of institution--Disqualification of religious trusts--Conditions for disqualification--Not only must trust be proved to be religious in nature it must also be expressed to be for benefit of particular religious community or caste--Trust registered as religious trust--But not expressed in objects clause to be for benefit of particular religious community or caste--Trust not spending any amount for religious purposes or activities--Trust not disqualified--Entitled to registration--Income-tax Act, 1961, s. 80G(5), (5B)-- Yamunaji Mandir Trust v. CIT (Rajkot) . . . 283

Export oriented undertaking --Exemption--Weighted deduction--Expenditure on research and development--Failure by assessee to prove substantively that no part of knowledge gained out of research and development activity useful to section 10B units--Matter remanded to Assessing Officer to find out tangible benefits which section 10B units derived from research and development activities and to decide disallowance--Income-tax Act, 1961, s. 10B-- Brakes India Ltd. v. Deputy CIT
(Chennai) . . . 212

Export --Exemption--Condition precedent for grant of exemption--Return of income must be filed within time prescribed under section 139(1)--Return filed within extended period under section 139(4)--Assessee not eligible to claim exemption--Whether assessee filed return of income within time--Matter remanded--Income-tax Act, 1961, ss. 10A, 139(1)-- Deputy CIT v. Helios and Matheson Information Technology Ltd.
(Chennai) . . . 172

----Exemption--Foreign currency expenses excluded in export turnover to be excluded from total turnover too--Income-tax Act, 1961, s. 10A-- Deputy CIT v. Helios and Matheson Information Technology Ltd. (Chennai) . . . 172

Income --Computation of income--Disallowance of expenditure on earning non-taxable income--No exempt income received during previous year--No disallowance--Some portion of expenses spent for purpose of purchase, maintenance and sale of investments--Portion of administrative expenses to be disallowed--Securities held as stock-in-trade--Rule 8D(2)(iii) cannot be applied--Assessing Officer to restrict disallowance--Income-tax Act, 1961, s. 14A--Income-tax Rules, 1962, r. 8D(2)(iii)-- Yes Bank Ltd. v. Addl. CIT (Mumbai) . . . 317

----Computation of income--Disallowance of expenditure on earning non-taxable income--Non-interest bearing funds available with assessee more than amount of investment which generated tax free income--No disallowance--Assessing Officer to examine fund position of assessee and decide accordingly--Matter remanded--Income-tax Act, 1961, s. 14A--Income-tax Rules, 1962, r. 8D(2)(i), (ii)-- Yes Bank Ltd. v. Addl. CIT (Mumbai) . . . 317

----Disallowance of expenditure in relation to tax exempted income--Investment originally made in year 1992-93 and earlier years--No change in investment portfolio during years 2004-05 to 2007-08 either by purchase of new shares or by disposal of existing shares--Shares in only one company and dividend received from one company only--Provision for computing disallowance not applicable--Disallowance of 0.5 per cent. justified--Income-tax Act, 1961, s. 14A-- Mazagaon Dock Ltd. v. ITO
(Mumbai) . . . 162

----Disallowance of expenditure relating to exempt income--Investment made in 100 per cent. foreign subsidiary companies in form of equity--Intention not to earn exempt income but commercial expediency--Section 14A read with rule 8D not applicable for assessment years 2006-07 and 2008-09--Income-tax Act, 1961, s. 14A--Income-tax Rules, 1962, r. 8D-- Deputy CIT v. Helios and Matheson Information Technology Ltd. (Chennai) . . . 172

----Disallowance of expenditure relating to exempt income--Rule 8D not applicable to years prior to 2008-09--Disallowance not proper--Disallowance not to exceed exempt income--Income-tax Act, 1961, s. 14A--Income-tax Rules, 1962, r. 8D-- Brakes India Ltd. v. Deputy CIT (Chennai) . . . 212

Income-tax survey --Undisclosed investment--Managing director of assessee surrendering amount during survey--Retraction statement reconciling receipts found during survey--Veracity of explanation given by assessee not gone into--Addition solely on basis of admission given during survey--Not justified--Income-tax Act, 1961, ss. 69A, 133A-- Sahil Study Circle P. Ltd. v. Deputy CIT (Delhi) . . . 182

Reassessment --Notice after four years--Payment of commission and professional charges available at original assessment--Reassessment on ground tax not deducted at source on certain payments towards expenditure incurred in foreign currency--Not justified--Income-tax Act, 1961, ss. 147, 148-- Brakes India Ltd. v. Deputy CIT
(Chennai) . . . 212

----Notice--Validity--Gift--No information about any bogus gift--No tangible material to justify income chargeable to tax had escaped assessment--Reassessment invalid--Income-tax Act, 1961, ss. 147, 148-- Smt. Sarika Jain v. ITO
(Chandigarh) . . . 246

Search and seizure --Assessment in search cases--Undisclosed income--Commodity transactions--Client code modifications negligible in number compared to total quantum of trades carried out by assessee--Difference of profits indicated in books of account and as worked out by reversing effect of client code modifications--Not undisclosed income--Income-tax Act, 1961, s. 153A-- Asst. CIT v. Amar Mukesh Shah
(Ahd) . . . 234

----Assessment of third person--Condition precedent--Recording of satisfaction by Assessing Officer of person in respect of whom search conducted--No satisfaction recorded by Assessing Officer of person in respect of whom search conducted or by Assessing Officer of assessee prior to issuing notice--Notice invalid--Assessment against assessee not valid--Income-tax Act, 1961, ss. 153A, 153C-- Parshwa Corporation v. Deputy CIT (Ahd) . . . 266

----Notice under section 153C--Effect of section 292B--Failure by Assessing Officer of person in respect of whom search conducted to record satisfaction--Not a curable defect--Notice invalid--Income-tax Act, 1961, ss. 153C, 292B-- Parshwa Corporation v. Deputy CIT(Ahd) . . . 266

Valuation of stock --Loss arising on revaluation of securities--Allowable--Income-tax Act, 1961-- Yes Bank Ltd. v. Addl. CIT (Mumbai) . . . 317

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961

S. 2(15) --Charitable purposes--Charitable trust--Registration--Cancellation--Grounds on which cancellation permissible--No satisfaction that activities of assessee either not genuine or not carried out in accordance with objects of trust--Object of general public utility--Disqualification--Activities such as holding conferences, seminars, publishing journals for its members not in nature of business, trade or commerce--No violation--Cancellation not justified-- Builders Association of India v. Deputy CIT (Exemption) (Mumbai) . . . 295

S. 9(1) --Business expenditure--Disallowance--Payments liable to deduction of tax at source--Expenditure incurred towards promotion, advertisement and legal fee--Provisions of section 9(1)(v) or (vi) or (vii) not applicable--Disallowance under section 40(a)(i) not proper-- Brakes India Ltd. v. Deputy CIT (Chennai) . . . 212

S. 10A --Export--Exemption--Condition precedent for grant of exemption--Return of income must be filed within time prescribed under section 139(1)--Return filed within extended period under section 139(4)--Assessee not eligible to claim exemption--Whether assessee filed return of income within time--Matter remanded-- Deputy CIT v. Helios and Matheson Information Technology Ltd. (Chennai) . . . 172

----Export--Exemption--Foreign currency expenses excluded in export turnover to be excluded from total turnover too-- Deputy CIT v. Helios and Matheson Information Technology Ltd. (Chennai) . . . 172

S. 10B --Export oriented undertaking--Exemption--Weighted deduction--Expenditure on research and development--Failure by assessee to prove substantively that no part of knowledge gained out of research and development activity useful to section 10B units--Matter remanded to Assessing Officer to find out tangible benefits which section 10B units derived from research and development activities and to decide disallowance-- Brakes India Ltd. v. Deputy CIT (Chennai) . . . 212

S. 12A --Charitable purposes--Charitable trust--Registration--Cancellation--Grounds on which cancellation permissible--No satisfaction that activities of assessee either not genuine or not carried out in accordance with objects of trust--Object of general public utility--Disqualification--Activities such as holding conferences, seminars, publishing journals for its members not in nature of business, trade or commerce--No violation--Cancellation not justified-- Builders Association of India v. Deputy CIT (Exemption) (Mumbai) . . . 295

S. 12AA(3) --Charitable purposes--Charitable trust--Registration--Cancellation--Grounds on which cancellation permissible--No satisfaction that activities of assessee either not genuine or not carried out in accordance with objects of trust--Object of general public utility--Disqualification--Activities such as holding conferences, seminars, publishing journals for its members not in nature of business, trade or commerce--No violation--Cancellation not justified-- Builders Association of India v. Deputy CIT (Exemption) (Mumbai) . . . 295

S. 14A --Company--Book profits--Income--Disallowance of expenditure on earning non-taxable income--Disallowance made cannot be added back to compute book profits-- Brakes India Ltd. v. Deputy CIT (Chennai) . . . 212

----Income--Computation of income--Disallowance of expenditure on earning non-taxable income--No exempt income received during previous year--No disallowance--Some portion of expenses spent for purpose of purchase, maintenance and sale of investments--Portion of administrative expenses to be disallowed--Securities held as stock-in-trade--Rule 8D(2)(iii) cannot be applied--Assessing Officer to restrict disallowance-- Yes Bank Ltd. v. Addl. CIT(Mumbai) . . . 317

----Income--Computation of income--Disallowance of expenditure on earning non-taxable income--Non-interest bearing funds available with assessee more than amount of investment which generated tax free income--No disallowance--Assessing Officer to examine fund position of assessee and decide accordingly--Matter remanded-- Yes Bank Ltd. v. Addl. CIT(Mumbai) . . . 317

----Income--Disallowance of expenditure in relation to tax exempted income--Investment originally made in year 1992-93 and earlier years--No change in investment portfolio during years 2004-05 to 2007-08 either by purchase of new shares or by disposal of existing shares--Shares in only one company and dividend received from one company only--Provision for computing disallowance not applicable--Disallowance of 0.5 per cent. justified--Mazagaon Dock Ltd. v. ITO (Mumbai) . . . 162

----Income--Disallowance of expenditure relating to exempt income--Investment made in 100 per cent. foreign subsidiary companies in form of equity--Intention not to earn exempt income but commercial expediency--Section 14A read with rule 8D not applicable for assessment years 2006-07 and 2008-09-- Deputy CIT v. Helios and Matheson Information Technology Ltd. (Chennai) . . . 172

----Income--Disallowance of expenditure relating to exempt income--Rule 8D not applicable to years prior to 2008-09--Disallowance not proper--Disallowance not to exceed exempt income-- Brakes India Ltd. v. Deputy CIT (Chennai) . . . 212

S. 32(1)(iia) --Depreciation--Additional depreciation--Additions made to plant and machinery during second half of preceding year and fifty per cent. of additional depreciation allowed--No carry forward of residual additional depreciation permissible-- Brakes India Ltd. v. Deputy CIT (Chennai) . . . 212

S. 35D --Business expenditure--Amortisation of preliminary expenses--Assessee a banking company--Deduction under section 35D not allowable-- Yes Bank Ltd. v. Addl. CIT (Mumbai) . . . 317

S. 37 --Business expenditure--Disallowance--Advertisement expenses--Ledger and bills produced before authorities--No discrepancy pointed out by them--Disallowance in earlier years--No estoppel--No disallowance-- Sahil Study Circle P. Ltd. v. Deputy CIT (Delhi) . . . 182

----Business expenditure--Prior period income--Prior period expenses--Disallowing of entire amount of prior period expenses while assessing entire amount of prior period income--Not justified--Disallowance by netting off prior period income against prior period expenditure--Justified-- Mazagaon Dock Ltd. v. ITO
(Mumbai) . . . 162

S. 40(a)(i) --Business expenditure--Disallowance--Payments liable to deduction of tax at source--Expenditure incurred towards promotion, advertisement and legal fee--Provisions of section 9(1)(v) or (vi) or (vii) not applicable--Disallowance under section 40(a)(i) not proper--Brakes India Ltd. v. Deputy CIT (Chennai) . . . 212

----Business expenditure--Disallowance--Payments liable to deduction of tax at source--Interest paid to banks in India for amount borrowed from foreign banks and payment not made in foreign currency--Payments exempted from tax deduction at source--Disallowance under section 40(a)(i) not warranted-- Brakes India Ltd. v. Deputy CIT (Chennai) . . . 212

S. 43B --Business expenditure--Deduction only on actual payment--Service tax--Deduction allowed on payment basis in immediately preceding assessment year--Assessee precluded from claiming amount again in next assessment year-- Mazagaon Dock Ltd. v. ITO (Mumbai) . . . 162

S. 54 --Capital gains--Exemption--Sale of property and investment of consideration in purchase or construction of residential property--Assessee utilising entire capital gains within period of one year--Construction of house not completed due to circumstances beyond assessee's control--Assessee entitled to exemption-- ITO v. Narayana Rao
(Hyd) . . . 178

S. 68 --Cash credit--Unexplained cash credit--Assessing Officer making addition on amount of share capital relying on statement of director of one of investing companies--Shareholding company confirming on inquiries--Assessing Officer disregarding all evidence collected directly from shareholder company and filed by assessee--Failure by Assessing Officer to provide opportunity of cross-examination of assessee's witness--Addition made by Assessing Officer not sustainable-- Vitrag Metal P. Ltd. v. ITO
(Mumbai) . . . 201

----Cash credits--Gift--Foreign gifts--Genuineness--Assessee receiving foreign gift from his son's friend--Failure by assessee to prove any love and affection with donor--Failure to prove execution of valid gift--Gift amount treated as unexplained cash credits-- Deputy CIT v. Bhanuprasad O. Trivedi (Ahd) . . . 307

S. 69A --Income-tax survey--Undisclosed investment--Managing director of assessee surrendering amount during survey--Retraction statement reconciling receipts found during survey--Veracity of explanation given by assessee not gone into--Addition solely on basis of admission given during survey--Not justified-- Sahil Study Circle P. Ltd. v. Deputy CIT (Delhi) . . . 182

S. 80G(5), (5B) --Donations to charitable institutions--Special deduction--Approval of institution--Disqualification of religious trusts--Conditions for disqualification--Not only must trust be proved to be religious in nature it must also be expressed to be for benefit of particular religious community or caste--Trust registered as religious trust--But not expressed in objects clause to be for benefit of particular religious community or caste--Trust not spending any amount for religious purposes or activities--Trust not disqualified--Entitled to registration-- Yamunaji Mandir Trust v. CIT
(Rajkot) . . . 283

S. 115JB --Company--Book profits--Income--Disallowance of expenditure on earning non-taxable income--Disallowance made cannot be added back to compute book profits-- Brakes India Ltd. v. Deputy CIT (Chennai) . . . 212

S. 133A --Income-tax survey--Undisclosed investment--Managing director of assessee surrendering amount during survey--Retraction statement reconciling receipts found during survey--Veracity of explanation given by assessee not gone into--Addition solely on basis of admission given during survey--Not justified-- Sahil Study Circle P. Ltd. v. Deputy CIT (Delhi) . . . 182

S. 139(1) --Export--Exemption--Condition precedent for grant of exemption--Return of income must be filed within time prescribed under section 139(1)--Return filed within extended period under section 139(4)--Assessee not eligible to claim exemption--Whether assessee filed return of income within time--Matter remanded-- Deputy CIT v. Helios and Matheson Information Technology Ltd.
(Chennai) . . . 172

S. 145A --Business expenditure--Deduction only on actual payment--Accounting--Method of accounting--Provision mandating inclusive method of accounting to follow tax, duties, cess or levy--Assessee ought to follow inclusive method in respect of modvat-- Mazagaon Dock Ltd. v. ITO (Mumbai) . . . 162

S. 147 --Reassessment--Notice--Validity--Gift--No information about any bogus gift--No tangible material to justify income chargeable to tax had escaped assessment--Reassessment invalid-- Smt. Sarika Jain v. ITO (Chandigarh) . . . 246

----Reassessment--Notice after four years--Payment of commission and professional charges available at original assessment--Reassessment on ground tax not deducted at source on certain payments towards expenditure incurred in foreign currency--Not justified--Brakes India Ltd. v. Deputy CIT (Chennai) . . . 212

S. 148 --Reassessment--Notice--Validity--Gift--No information about any bogus gift--No tangible material to justify income chargeable to tax had escaped assessment--Reassessment invalid-- Smt. Sarika Jain v. ITO (Chandigarh) . . . 246

----Reassessment--Notice after four years--Payment of commission and professional charges available at original assessment--Reassessment on ground tax not deducted at source on certain payments towards expenditure incurred in foreign currency--Not justified--Brakes India Ltd. v. Deputy CIT (Chennai) . . . 212

S. 153A --Search and seizure--Assessment in search cases--Undisclosed income--Commodity transactions--Client code modifications negligible in number compared to total quantum of trades carried out by assessee--Difference of profits indicated in books of account and as worked out by reversing effect of client code modifications--Not undisclosed income-- Asst. CIT v. Amar Mukesh Shah (Ahd) . . . 234

----Search and seizure--Assessment of third person--Condition precedent--Recording of satisfaction by Assessing Officer of person in respect of whom search conducted--No satisfaction recorded by Assessing Officer of person in respect of whom search conducted or by Assessing Officer of assessee prior to issuing notice--Notice invalid--Assessment against assessee not valid-- Parshwa Corporation v. Deputy CIT (Ahd) . . . 266

S. 153C --Search and seizure--Assessment of third person--Condition precedent--Recording of satisfaction by Assessing Officer of person in respect of whom search conducted--No satisfaction recorded by Assessing Officer of person in respect of whom search conducted or by Assessing Officer of assessee prior to issuing notice--Notice invalid--Assessment against assessee not valid-- Parshwa Corporation v. Deputy CIT (Ahd) . . . 266

----Search and seizure--Notice under section 153C--Effect of section 292B--Failure by Assessing Officer of person in respect of whom search conducted to record satisfaction--Not a curable defect--Notice invalid-- Parshwa Corporation v. Deputy CIT
(Ahd) . . . 266

S. 201(1), (1A) --Deduction of tax at source--Short deduction of tax--Assessee in default--Interest--Recipients disclosing amount received from assessee in returns filed by them for relevant assessment year--Assessee not assessee in default--Assessing Officer directed to verify whether taxes paid by recipients--Assessee liable to pay interest till date of payment of taxes by recipients on income received from assessee-- Wockhardt Hospitals Ltd. v. Asst. CIT (TDS) (Mumbai) . . . 259

S. 292B --Search and seizure--Notice under section 153C--Effect of section 292B--Failure by Assessing Officer of person in respect of whom search conducted to record satisfaction--Not a curable defect--Notice invalid-- Parshwa Corporation v. Deputy CIT (Ahd) . . . 266

Income-tax Rules, 1962

R. 8D --Company--Book profits--Income--Disallowance of expenditure on earning non-taxable income--Disallowance made cannot be added back to compute book profits-- Brakes India Ltd. v. Deputy CIT (Chennai) . . . 212

----Income--Disallowance of expenditure relating to exempt income--Investment made in 100 per cent. foreign subsidiary companies in form of equity--Intention not to earn exempt income but commercial expediency--Section 14A read with rule 8D not applicable for assessment years 2006-07 and 2008-09-- Deputy CIT v. Helios and Matheson Information Technology Ltd. (Chennai) . . . 172

----Income--Disallowance of expenditure relating to exempt income--Rule 8D not applicable to years prior to 2008-09--Disallowance not proper--Disallowance not to exceed exempt income-- Brakes India Ltd. v. Deputy CIT (Chennai) . . . 212

R. 8D(2)(i), (ii) --Income--Computation of income--Disallowance of expenditure on earning non-taxable income--Non-interest bearing funds available with assessee more than amount of investment which generated tax free income--No disallowance--Assessing Officer to examine fund position of assessee and decide accordingly--Matter remanded-- Yes Bank Ltd. v. Addl. CIT (Mumbai) . . . 317

R. 8D(2)(iii) --Income--Computation of income--Disallowance of expenditure on earning non-taxable income--No exempt income received during previous year--No disallowance--Some portion of expenses spent for purpose of purchase, maintenance and sale of investments--Portion of administrative expenses to be disallowed--Securities held as stock-in-trade--Rule 8D(2)(iii) cannot be applied--Assessing Officer to restrict disallowance-- Yes Bank Ltd. v. Addl. CIT (Mumbai) . . . 317

 

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