ITR (TRIB) Volume 47 : Part 1 (Issue dated : 4-4-2016)

 

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

ONLINE EDITION

SUBJECT INDEX TO CASES REPORTED

Appeal to Commissioner (Appeals) --Additional ground--Provision for bad and doubtful debts and advances--Claim to deduction from book profits made for first time--No material to show whether sums added back to book profits in earlier years--Assessing Officer to verify--Income-tax Act, 1961, s. 115JA-- Asst. CIT v. Philips Electronics India Ltd. (Kolkata) . . . 269

Charitable purpose --Exemption--Restoration of registration--Claim of exemption to be decided afresh by Assessing Officer--Matter remanded--Income-tax Act, 1961, ss. 11, 12A--Bombay Chamber of Commerce and Industry v. ITO (Exemption) 
(Mumbai) . . . 260

----Registration of trusts--Cancellation of registration--No change in main object of assessee subsequent to grant of registration--No material to show activities of assessee not genuine or not carried out in accordance with its object--Cancellation of registration not proper--Income-tax Act, 1961, ss. 2(15), 12A, 12AA(3)-- Bombay Chamber of Commerce and Industry v. ITO (Exemption) 
(Mumbai) . . . 260

Company --Book profits--Ascertained liability--Provision for incremental wages based on actual workings and based on minimum liability--Negotiations with labour union would only result in payment of higher wages or result in wages already provided--Ascertained liability--Not includible--Income-tax Act, 1961, s. 115JA-- Asst. CIT v. Philips Electronics India Ltd.(Kolkata) . . . 269

----Book profit--Computation--Retrospective amendment in section 115JA--Provision for doubtful debts and advances--Includible--Income-tax Act, 1961, s. 115JA, Expln-- Asst. CIT v. Philips Electronics India Ltd. 
(Kolkata) . . . 269

----Book profits--Dividend--Disallowance under section 14A not debited into profit and loss account--Artificial disallowance--Not includible--Income-tax Act, 1961, s. 115JA-- Asst. CIT v. Philips Electronics India Ltd. (Kolkata) . . . 269

----Book profits--Provision--Provision for loss on proposed restructuring of business--Not a provision but only amount actually restated in books by bringing value of fixed assets to the extent of its realisable value--Not includible--Income-tax Act, 1961, s. 115JA-- Asst. CIT v. Philips Electronics India Ltd. (Kolkata) . . . 269

Income --Income or capital--Foreign currency transactions--Restatement at end of accounting year on basis of fluctuation in rate of foreign exchange--Gains not taxable if foreign currency transactions undertaken on capital account but taxable if on revenue account--Actual payment not relevant--Assessing Officer to re-do assessment--Matter remanded--Income-tax Act, 1961-- R Systems International Ltd. v. Asst. CIT 
(Delhi) . . . 289

Reassessment --Notice--Assessing Officer--Powers--No power to make addition other than on grounds stated in reasons recorded--Income-tax Act, 1961, ss. 147, 148-- Gennex Cresa Partners Consultants Pvt. Ltd. v. ITO (Mumbai) . . . 294

----Notice--Subjective satisfaction of Assessing Officer on basis of relevant material sufficient--Conclusion of escapement of income ascertained finally--Income-tax Act, 1961, ss. 147, 148-- Asst. CIT v. Philips Electronics India Ltd. 
(Kolkata) . . . 269

 

PRINT EDITION

Volume 47 : Part 1 (Issue dated : 4-4-2016)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Anonymous donations --Special rate of tax--Exception--Religious trust--Trust for religious and charitable purposes--Religious purpose includes relief to poor, education and medical relief--No anonymous donation received with specific direction--Special rate not attracted--Income-tax Act, 1961, s. 115BBC-- Deputy CIT v. All India Pingalwara Charitable Society(Amritsar) . . . 1

Business expenditure --Disallowance--Excessive and unreasonable payments--Processing of material and handling charges--Payments to sister concerns not more than fair market value--Activities under supervision of Excise Department--Recipient company paying maximum marginal rate of tax--Similar claim allowed in subsequent year--Expenses allowable--Income-tax Act, 1961, s. 40A(2)(b)-- JLC Electromet P. Ltd. v. Addl. CIT (Jaipur) . . . 85

----Disallowance--Payments for unlawful purpose--Clearing and forwarding agent--Dock workers--Commission--Assessee making payments on behalf of its clients as an incentive to dock workers to get loading and unloading done quickly--Books of account not sole determinative factor to decide nature of expenditure--No prohibition in law to make such payments--Factum of amount paid not disproved--Payments deductible--Income-tax Act, 1961, s. 37(1), Expln -- D. H. Patkar and Co. v. ITO
(Mumbai) . . . 82

----Interest charged by bank on fixed deposits prematurely encashed--Liability pertained to earlier year but claim in subsequent year--Matter remanded--Income-tax Act, 1961, s. 37--JLC Electromet P. Ltd. v. Addl. CIT (Jaipur) . . . 85

----Prior period expenses--Failure to prove whether expenses crystallised--Not allowable--Income-tax Act, 1961, s. 37-- JLC Electromet P. Ltd. v. Addl. CIT
(Jaipur) . . . 85

----Staff welfare expenses--Assessee producing bills and vouchers--Disallowance on conjectures and surmises--Impermissible--Income-tax Act, 1961, s. 37-- JLC Electromet P. Ltd. v. Addl. CIT (Jaipur) . . . 85

Exemption --Educational institution--Scope of section 10(23C)--Assessee a school managed by education board and filing returns in status of association of persons--Meaning of word “institution†includes school--Assessee an “institution†--Entitled to exemption--Income-tax Act, 1961, s. 10(23C)(vi)-- Sengunthar Matriculation Higher Secondary School v. Chief CIT (Chennai) . . . 107

Housing project --Special deduction--Appeal to Appellate Tribunal--Whether manufacturing process carried on by assessee with aid of power--Tribunal remanding matter without finding in absence of technical expert opinion--Authorities after remand finding assessee carried on manufacturing process without aid of power--Additional evidence in the form of certificate issued by Institute of Chemical Technology--Evidence admitted as vital and essential for resolving controversy and going to root of matter for resolving dispute--Income-tax Act, 1961, ss. 80-IB, 255(6)--Income-tax (Appellate Tribunal) Rules, 1963, r. 29-- Kishore Ramchandani v . ITO (Mumbai) . . . 134

Income from house property --Deductions--Interest--No condition property must be acquired as well as constructed with borrowed capital--Acquisition of property by borrowing loan--Interest deductible--Income-tax Act, 1961, s. 24(b)-- Mrs. Samiksha Mahajan v. Asst. CIT(Delhi) . . . 59

International transactions --Arm’s length price--Determination--Claim that total adjustment made to arm’s length price should be restricted to overall income earned by associated enterprises from third parties--Absence of necessary information such as average selling expenses in line of commercial activity--Matter remanded for re-examination--Income-tax Act, 1961-- Fortune Infotech Ltd. v. Asst. CIT
(Ahd) . . . 113

----Arm’s length price--Determination--Selection of comparables--Claim of exclusion of three comparables--Order of Dispute Resolution Panel reaching finality--Claim academic--Comparables cannot be excluded--Income-tax Act, 1961-- Fortune Infotech Ltd. v. Asst. CIT(Ahd) . . . 113

----Arm’s length price--Determination--Selection of comparables--Higher employee cost--Failure by assessee to prove underutilised capacity with reasonable precision and quantification--Adjustment cannot be made--Income-tax Act, 1961-- Fortune Infotech Ltd. v. Asst. CIT (Ahd) . . . 113

----Arm’s length price--Determination--Selection of most appropriate method--Availability, coverage and reliability of data necessary for application of method--Single comparable and assessee continuing to work for associated enterprise in spite of huge loss--Data not reliable--Internal transactional net margin method not most appropriate method on facts of case--Income-tax Act, 1961, s. 92C--Income-tax Rules, 1962, r. 10C-- Fortune Infotech Ltd. v. Asst. CIT (Ahd) . . . 113

Penalty --Concealment of income--Deemed dividend--Advance from sister concern--Disclosure of particulars of shareholding pattern, advances taken and given in return--Advances in course of regular business--Not deemed dividend--Debatable issue--Penalty cannot be imposed--Income-tax Act, 1961, ss. 2(22)(e), 271(1)(c)-- Trimurty Buildcon P. Ltd. v. Deputy CIT (Jaipur) . . . 50

----Failure to deduct tax at source--Royalty and fees for technical services--Technology must be made available--Payments for engineering and draughting services--Technology not made available--Payments not fees for technical service--Payments for purchase of shrink wrapped software--Contradictory decisions of High Courts and Benches of Tribunal as to whether tax deductible on payments therefor--Assessee based upon certificate of chartered accountant taking one of possible views--Reasonable cause for not deducting tax at source on payments--Penalty not imposable--Income-tax Act, 1961, ss. 271C, 273B-- Addl. DIT (International Taxation) v. Leighton Welspun Contractors P. Ltd. (Mumbai) . . . 97

Reassessment --Notice--No fresh tangible material in possession of Assessing Officer when recording reasons--Reassessment not valid--Income-tax Act, 1961, ss. 147, 148--Motilal R. Todi v . Asst. CIT (Mumbai) . . . 149

----Notice after four years--Condition precedent--No indication in reasons recorded about failure on part of assessee to disclose fully and truly all material facts necessary for assessment--Reassessment not valid--Income-tax Act, 1961, ss. 147, 148-- Apeejay Education Society v. Asst. CIT (Amritsar) . . . 33

----Procedure--Reasons for reassessment must be furnished to assessee before completion of reassessment--Pre-requisite condition--No reasons available in assessment record--Nothing to show that certified copy of reasons provided to assessee, despite request--Reassessment invalid--Income-tax Act, 1961, ss. 147, 148-- Muller and Philpps (India) Ltd. v. ITO (Mumbai) . . . 69

Special deduction --Repayment of loan for acquisition or construction of residential property--Property acquired and constructed by borrowing loan--Repayment of loan--Deductible--Income-tax Act, 1961, s. 80C-- Mrs. Samiksha Mahajan v. Asst. CIT
(Delhi) . . . 59

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961

S. 2(22)(e) --Penalty--Concealment of income--Deemed dividend--Advance from sister concern--Disclosure of particulars of shareholding pattern, advances taken and given in return--Advances in course of regular business--Not deemed dividend--Debatable issue--Penalty cannot be imposed-- Trimurty Buildcon P. Ltd. v. Deputy CIT (Jaipur) . . . 50

S. 10(23C)(vi) --Exemption--Educational institution--Scope of section 10(23C)--Assessee a school managed by education board and filing returns in status of association of persons--Meaning of word “institution†includes school--Assessee an “institution†--Entitled to exemption-- Sengunthar Matriculation Higher Secondary School v. Chief CIT (Chennai) . . . 107

S. 24(b) --Income from house property--Deductions--Interest--No condition property must be acquired as well as constructed with borrowed capital--Acquisition of property by borrowing loan--Interest deductible-- Mrs. Samiksha Mahajan v. Asst. CIT
(Delhi) . . . 59

S. 37 --Business expenditure--Interest charged by bank on fixed deposits prematurely encashed--Liability pertained to earlier year but claim in subsequent year--Matter remanded--JLC Electromet P. Ltd. v. Addl. CIT (Jaipur) . . . 85

----Business expenditure--Prior period expenses--Failure to prove whether expenses crystallised--Not allowable-- JLC Electromet P. Ltd. v. Addl. CIT
(Jaipur) . . . 85

----Business expenditure--Staff welfare expenses--Assessee producing bills and vouchers--Disallowance on conjectures and surmises--Impermissible-- JLC Electromet P. Ltd. v. Addl. CIT (Jaipur) . . . 85

S. 37(1), Expln --Business expenditure--Disallowance--Payments for unlawful purpose--Clearing and forwarding agent--Dock workers--Commission--Assessee making payments on behalf of its clients as an incentive to dock workers to get loading and unloading done quickly--Books of account not sole determinative factor to decide nature of expenditure--No prohibition in law to make such payments--Factum of amount paid not disproved--Payments deductible-- D. H. Patkar and Co. v. ITO
(Mumbai) . . . 82

S. 40A(2)(b) --Business expenditure--Disallowance--Excessive and unreasonable payments--Processing of material and handling charges--Payments to sister concerns not more than fair market value--Activities under supervision of Excise Department--Recipient company paying maximum marginal rate of tax--Similar claim allowed in subsequent year--Expenses allowable-- JLC Electromet P. Ltd. v. Addl. CIT
(Jaipur) . . . 85

S. 80C --Special deduction--Repayment of loan for acquisition or construction of residential property--Property acquired and constructed by borrowing loan--Repayment of loan--Deductible-- Mrs. Samiksha Mahajan v. Asst. CIT (Delhi) . . . 59

S. 80-IB --Housing project--Special deduction--Appeal to Appellate Tribunal--Whether manufacturing process carried on by assessee with aid of power--Tribunal remanding matter without finding in absence of technical expert opinion--Authorities after remand finding assessee carried on manufacturing process without aid of power--Additional evidence in the form of certificate issued by Institute of Chemical Technology--Evidence admitted as vital and essential for resolving controversy and going to root of matter for resolving dispute-- Kishore Ramchandani v . ITO
(Mumbai) . . . 134

S. 92C --International transactions--Arm’s length price--Determination--Selection of most appropriate method--Availability, coverage and reliability of data necessary for application of method--Single comparable and assessee continuing to work for associated enterprise in spite of huge loss--Data not reliable--Internal transactional net margin method not most appropriate method on facts of case-- Fortune Infotech Ltd. v. Asst. CIT (Ahd) . . . 113

S. 115BBC --Anonymous donations--Special rate of tax--Exception--Religious trust--Trust for religious and charitable purposes--Religious purpose includes relief to poor, education and medical relief--No anonymous donation received with specific direction--Special rate not attracted-- Deputy CIT v. All India Pingalwara Charitable Society (Amritsar) . . . 1

S. 147 --Reassessment--Notice--No fresh tangible material in possession of Assessing Officer when recording reasons--Reassessment not valid-- Motilal R. Todi v . Asst. CIT(Mumbai) . . . 149

----Reassessment--Notice after four years--Condition precedent--No indication in reasons recorded about failure on part of assessee to disclose fully and truly all material facts necessary for assessment--Reassessment not valid-- Apeejay Education Society v. Asst. CIT (Amritsar) . . . 33

----Reassessment--Procedure--Reasons for reassessment must be furnished to assessee before completion of reassessment--Pre-requisite condition--No reasons available in assessment record--Nothing to show that certified copy of reasons provided to assessee, despite request--Reassessment invalid-- Muller and Philpps (India) Ltd. v. ITO (Mumbai) . . . 69

S. 148 --Reassessment--Notice--No fresh tangible material in possession of Assessing Officer when recording reasons--Reassessment not valid-- Motilal R. Todi v . Asst. CIT(Mumbai) . . . 149

----Reassessment--Notice after four years--Condition precedent--No indication in reasons recorded about failure on part of assessee to disclose fully and truly all material facts necessary for assessment--Reassessment not valid-- Apeejay Education Society v. Asst. CIT (Amritsar) . . . 33

----Reassessment--Procedure--Reasons for reassessment must be furnished to assessee before completion of reassessment--Pre-requisite condition--No reasons available in assessment record--Nothing to show that certified copy of reasons provided to assessee, despite request--Reassessment invalid-- Muller and Philpps (India) Ltd. v. ITO (Mumbai) . . . 69

S. 255(6) --Housing project--Special deduction--Appeal to Appellate Tribunal--Whether manufacturing process carried on by assessee with aid of power--Tribunal remanding matter without finding in absence of technical expert opinion--Authorities after remand finding assessee carried on manufacturing process without aid of power--Additional evidence in the form of certificate issued by Institute of Chemical Technology--Evidence admitted as vital and essential for resolving controversy and going to root of matter for resolving dispute-- Kishore Ramchandani v . ITO
(Mumbai) . . . 134

S. 271C --Penalty--Failure to deduct tax at source--Royalty and fees for technical services--Technology must be made available--Payments for engineering and draughting services--Technology not made available--Payments not fees for technical service--Payments for purchase of shrink wrapped software--Contradictory decisions of High Courts and Benches of Tribunal as to whether tax deductible on payments therefor--Assessee based upon certificate of chartered accountant taking one of possible views--Reasonable cause for not deducting tax at source on payments--Penalty not imposable-- Addl. DIT (International Taxation) v. Leighton Welspun Contractors P. Ltd.
(Mumbai) . . . 97

S. 271(1)(c) --Penalty--Concealment of income--Deemed dividend--Advance from sister concern--Disclosure of particulars of shareholding pattern, advances taken and given in return--Advances in course of regular business--Not deemed dividend--Debatable issue--Penalty cannot be imposed-- Trimurty Buildcon P. Ltd. v. Deputy CIT (Jaipur) . . . 50

S. 273B --Penalty--Failure to deduct tax at source--Royalty and fees for technical services--Technology must be made available--Payments for engineering and draughting services--Technology not made available--Payments not fees for technical service--Payments for purchase of shrink wrapped software--Contradictory decisions of High Courts and Benches of Tribunal as to whether tax deductible on payments therefor--Assessee based upon certificate of chartered accountant taking one of possible views--Reasonable cause for not deducting tax at source on payments--Penalty not imposable-- Addl. DIT (International Taxation) v. Leighton Welspun Contractors P. Ltd.
(Mumbai) . . . 97

Income-tax Rules, 1962

R. 10C --International transactions--Arm’s length price--Determination--Selection of most appropriate method--Availability, coverage and reliability of data necessary for application of method--Single comparable and assessee continuing to work for associated enterprise in spite of huge loss--Data not reliable--Internal transactional net margin method not most appropriate method on facts of case-- Fortune Infotech Ltd. v. Asst. CIT (Ahd) . . . 113

Income-tax (Appellate Tribunal) Rules, 1963

R. 29 --Housing project--Special deduction--Appeal to Appellate Tribunal--Whether manufacturing process carried on by assessee with aid of power--Tribunal remanding matter without finding in absence of technical expert opinion--Authorities after remand finding assessee carried on manufacturing process without aid of power--Additional evidence in the form of certificate issued by Institute of Chemical Technology--Evidence admitted as vital and essential for resolving controversy and going to root of matter for resolving dispute-- Kishore Ramchandani v . ITO (Mumbai) . . . 134

 

 

ITR Volume 382 : Part 4 (Issue dated : 11-4-2016)

 

INCOME TAX REPORTS (ITR)--PRINT AND ONLINE EDITION

ONLINE EDITION

SUBJECT INDEX TO CASES REPORTED

HIGH COURTS

Reassessment --Reason to believe income has escaped assessment--Assessing Officer must form belief independently--Notice merely based on audit report--Failure by Assessing Officer to undertake independent exercise--Reasons for reopening of assessment not placed on record before Tribunal--Reassessment not proper--Income-tax Act, 1961, ss. 69C, 147, 148, 153-- CIT v. DRM Enterprises (Bom) . . . 412

 

PRINT EDITION

ITR Volume 382 : Part 4 (Issue dated : 11-4-2016)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Accounting --Method of accounting--Assessee consistently following project completion method--Expenses of construction not debited to profit and loss account of assessee and shown as cost of construction of block of buildings--Assessee offering tax in subsequent financial year--No actual loss to Revenue--Income-tax Act, 1961, s. 145-- Paras Buildtech India P. Ltd. v. CIT (Delhi) . . . 630

----Rejection of accounts--Assessee receiving advances in respect of project that never took off--Part of advance returned in following financial year--Income not to be taxed in hands of assessee--No purpose in remanding matter to Assessing Officer--Income-tax Act, 1961, s. 145-- Paras Buildtech India P. Ltd. v. CIT (Delhi) . . . 630

Advance tax --Interest--Waiver--Power of Chief Commissioner to grant--Directions of Central Board of Direct Taxes --Assessee declaring sale of property but not disclosing capital gains thereon--Failure to disclose not due to unavoidable circumstances--Denial of waiver proper--Income-tax Act, 1961, ss. 119(2)(a), 234B-- Arun Sunny v. Chief CIT (Ker) . . . 533

Appeal to Appellate Tribunal --Application for recall of order--Inordinate delay in filing application--Rejection of application justified--Income-tax Act, 1961-- CIT v. State Bank of Hyderabad (T&AP) . . . 499

Appellate Tribunal --International transactions--Arm’s length price--Determination--Three comparables accepted for subsequent assessment year submitted by assessee before Commissioner (Appeals)--Appellate Tribunal--Refusal to consider--Not proper--Direction to remand matter to Transfer Pricing Officer for consideration of comparables--Income-tax Act, 1961, s. 92C-- Advance Power Display Systems Ltd. v. CIT (Bom) . . . 607

Business expenditure --Commission--Uncontroverted statements of witness--Assessee refusing to cross examine witness despite being granted opportunity--No violation of principles of natural justice--Sufficient adverse inference against assessee that payments of commission were fictitious--Disallowance of commission justified--Income-tax Act, 1961--Roger Enterprises P. Ltd. v. CIT (Delhi) . . . 639

----Travel expenses of director outside India--Assessee doing job work manufacture for one entity in Singapore--Deduction of foreign travel expenses restricted to country where buyer situated--Proper--Income-tax Act, 1961, s. 37-- Advance Power Display Systems Ltd. v. CIT(Bom) . . . 607

Capital or revenue expenditure --Tests--Depreciation--Effect of Explanation 1 to section 32(1)(i)--Expenditure incurred for construction of superstructures and setting up of workshop facilities on leasehold premises--Whether expenditure capital or revenue to be decided on facts of each case by applying relevant tests--Ratio expressed by Division Bench lays down correct law and does not need reconsideration--Income-tax Act, 1961, ss. 32(1), Expln. 1 , 37-- Indus Motors Co. P. Ltd. v. Deputy CIT [FB] (Ker) . . . 503

Charitable purposes --Registration of trust--Objectives of trust to be considered as a whole, and not in isolation--Intention of settler or executor cannot decide nature of trust--Tribunal to consider purpose and objectives of trust in light of trust deed and other documents--Matter remanded--Income-tax Act, 1961, ss. 12A, 80G(5)(vi)-- Bangalore Urban and Rural District Co-operative Milk Producers Societies Members and Employees Welfare Trust Bangalore Milk Union Ltd. v. DIT (Exemptions) (Karn) . . . 528

Exemption --Death-cum-retirement gratuity--Cash equivalent of leave salary--Meaning of salary for purposes of section 10(10) and (10AA)--Definition of salary in rule 2(h) of Part A of Fourth Schedule applies--Income-tax Act, 1961, s. 10(10), (10AA), Fourth Schedule, Part A, r. 2(h)-- Harbans Singh v. CIT (P&H) . . . 600

Income-tax --General principles--Rights of assessee-- CIT v. State Bank of Hyderabad(T&AP) . . . 499

Interpretation of taxing statutes -- Explanation 1 to section 32(1)(i)--Strict interpretation--Indus Motors Co. P. Ltd. v. Deputy CIT [FB] (Ker) . . . 503

Penalty --Concealment of income--Nothing on record to demonstrate nature of service rendered by companies to whom commission paid--Onus on assessee to prove genuineness of commission payments--Assessee failing to discharge--Essential conditions for levying penalty fulfilled--Income-tax Act, 1961, s. 271(1)(c)-- Roger Enterprises P. Ltd. v. CIT (Delhi) . . . 639

Reassessment --Condition precedent--Opinion that income had escaped assessment must be that of Assessing Officer--Notice based on review of assessment order by Commissioner--Not valid--Notice should give reasons--Notice cannot be improved by affidavits and other reasons--Income-tax Act, 1961, ss. 147, 148-- Munjal Showa Ltd. v.Deputy CIT (Delhi) . . . 555

----Notice--Industrial undertaking--Special deduction--Condition precedent for reassessment--Reason to believe that income chargeable to tax had escaped assessment--Issued on which reasons based considered in original assessment--Reopening of assessment without jurisdiction--Obligation of assessee only to disclose primary facts necessary for assessment--Assessee disclosing truly and fully all material facts--Reopening of assessment not warranted--Income-tax Act, 1961, ss. 80-IA, 148-- CIT (LTU) v. Reliance Industries Ltd. (Bom) . . . 574

----Notice--Service of valid notice within limitation--Condition precedent for reassessment--Burden of proof of service of notice on Department--Participation in reassessment proceedings by representative of assessee does not result in waiver of necessity of service of notice--Objection raised to non-service of notice--Reassessment proceedings ignoring objection--Notice and consequent reassessment not valid--Income-tax Act, 1961, ss. 147, 148-- CIT v. Chetan Gupta (Delhi) . . . 613

----Notice--Validity--Conditions precedent--Reasons recorded for reopening assessment should state failure by assessee to disclose fully and truly all material facts necessary for his assessment and should provide live link to formation of belief that income has escaped assessment--Essential requirement not satisfied--Notice to be quashed--Income-tax Act, 1961, ss. 147, 148-- Sabharwal Properties Industries P. Ltd. v. ITO (Delhi) . . . 547

----Notice after four years--Failure to disclose material facts necessary for assessment--Complete details furnished during original assessment proceedings--Notice not valid--Income-tax Act, 1961, ss. 147, 148-- Munjal Showa Ltd. v. Deputy CIT (Delhi) . . . 555

----Validity--Returns not disclosing unabsorbed depreciation and business losses carried forward--Assessment order on 31-12-2010 and order of rectification on 6-9-2011--Assessment order merging in order of rectification--Notice of reassessment on 10-12-2013--Notice not beyond four years--Notice and consequent reassessment--Valid--Income-tax Act, 1961, ss. 147, 148-- PVP Ventures Ltd. v. Asst. CIT (Mad) . . . 582

Tea development allowance --Computation of allowance--Mode of computation--Composite income--Apportionment of agricultural income and non-agricultural income--Deduction to be allowed from total composite income derived from growing and manufacturing tea--Rule 8 shall apply thereafter to apportion resultant income--Income-tax Act, 1961, s. 33AB--Income-tax Rules, 1962, r. 8-- Singlo (India) Tea Ltd. v. CIT (Cal) . . . 537

Writ --Power of Chief Commissioner to waive interest--Court cannot direct waiver--Constitution of India, art. 226-- Arun Sunny v. Chief CIT (Ker) . . . 533

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Constitution of India :

Art. 226 --Writ--Power of Chief Commissioner to waive interest--Court cannot direct waiver--Arun Sunny v. Chief CIT (Ker) . . . 533

Income-tax Act, 1961 :

S. 10(10), (10AA), Fourth Schedule, Part A, r. 2(h) --Exemption--Death-cum-retirement gratuity--Cash equivalent of leave salary--Meaning of salary for purposes of section 10(10) and (10AA)--Definition of salary in rule 2(h) of Part A of Fourth Schedule applies-- Harbans Singh v. CIT (P&H) . . . 600

S. 12A --Charitable purposes--Registration of trust--Objectives of trust to be considered as a whole, and not in isolation--Intention of settler or executor cannot decide nature of trust--Tribunal to consider purpose and objectives of trust in light of trust deed and other documents--Matter remanded-- Bangalore Urban and Rural District Co-operative Milk Producers Societies Members and Employees Welfare Trust Bangalore Milk Union Ltd. v.DIT (Exemptions) (Karn) . . . 528

S. 32(1), Expln. 1 --Capital or revenue expenditure--Tests--Depreciation--Effect ofExplanation 1 to section 32(1)(i)--Expenditure incurred for construction of superstructures and setting up of workshop facilities on leasehold premises--Whether expenditure capital or revenue to be decided on facts of each case by applying relevant tests--Ratio expressed by Division Bench lays down correct law and does not need reconsideration-- Indus Motors Co. P. Ltd. v. Deputy CIT [FB] (Ker) . . . 503

S. 33AB --Tea development allowance--Computation of allowance--Mode of computation--Composite income--Apportionment of agricultural income and non-agricultural income--Deduction to be allowed from total composite income derived from growing and manufacturing tea--Rule 8 shall apply thereafter to apportion resultant income-- Singlo (India) Tea Ltd. v. CIT (Cal) . . . 537

S. 37 --Capital or revenue expenditure--Tests--Depreciation--Effect of Explanation 1 to section 32(1)(i)--Expenditure incurred for construction of superstructures and setting up of workshop facilities on leasehold premises--Whether expenditure capital or revenue to be decided on facts of each case by applying relevant tests--Ratio expressed by Division Bench lays down correct law and does not need reconsideration-- Indus Motors Co. P. Ltd.v. Deputy CIT [FB] (Ker) . . . 503

----Business expenditure--Travel expenses of director outside India--Assessee doing job work manufacture for one entity in Singapore--Deduction of foreign travel expenses restricted to country where buyer situated--Proper-- Advance Power Display Systems Ltd. v.CIT (Bom) . . . 607

S. 80G(5)(vi) --Charitable purposes--Registration of trust--Objectives of trust to be considered as a whole, and not in isolation--Intention of settler or executor cannot decide nature of trust--Tribunal to consider purpose and objectives of trust in light of trust deed and other documents--Matter remanded-- Bangalore Urban and Rural District Co-operative Milk Producers Societies Members and Employees Welfare Trust Bangalore Milk Union Ltd. v.DIT (Exemptions) (Karn) . . . 528

S. 80-IA --Reassessment--Notice--Industrial undertaking--Special deduction--Condition precedent for reassessment--Reason to believe that income chargeable to tax had escaped assessment--Issued on which reasons based considered in original assessment--Reopening of assessment without jurisdiction--Obligation of assessee only to disclose primary facts necessary for assessment--Assessee disclosing truly and fully all material facts--Reopening of assessment not warranted-- CIT (LTU) v. Reliance Industries Ltd. (Bom) . . . 574

S. 92C --Appellate Tribunal--International transactions--Arm’s length price--Determination--Three comparables accepted for subsequent assessment year submitted by assessee before Commissioner (Appeals)--Appellate Tribunal--Refusal to consider--Not proper--Direction to remand matter to Transfer Pricing Officer for consideration of comparables-- Advance Power Display Systems Ltd. v. CIT (Bom) . . . 607

S. 119(2)(a) --Advance tax--Interest--Waiver--Power of Chief Commissioner to grant--Directions of Central Board of Direct Taxes --Assessee declaring sale of property but not disclosing capital gains thereon--Failure to disclose not due to unavoidable circumstances--Denial of waiver proper-- Arun Sunny v. Chief CIT (Ker) . . . 533

S. 145 --Accounting--Method of accounting--Assessee consistently following project completion method--Expenses of construction not debited to profit and loss account of assessee and shown as cost of construction of block of buildings--Assessee offering tax in subsequent financial year--No actual loss to Revenue-- Paras Buildtech India P. Ltd. v. CIT(Delhi) . . . 630

----Accounting--Rejection of accounts--Assessee receiving advances in respect of project that never took off--Part of advance returned in following financial year--Income not to be taxed in hands of assessee--No purpose in remanding matter to Assessing Officer-- Paras Buildtech India P. Ltd. v. CIT (Delhi) . . . 630

S. 147 --Reassessment--Condition precedent--Opinion that income had escaped assessment must be that of Assessing Officer--Notice based on review of assessment order by Commissioner--Not valid--Notice should give reasons--Notice cannot be improved by affidavits and other reasons-- Munjal Showa Ltd. v. Deputy CIT (Delhi) . . . 555

----Reassessment--Notice--Service of valid notice within limitation--Condition precedent for reassessment--Burden of proof of service of notice on Department--Participation in reassessment proceedings by representative of assessee does not result in waiver of necessity of service of notice--Objection raised to non-service of notice--Reassessment proceedings ignoring objection--Notice and consequent reassessment not valid-- CIT v.Chetan Gupta (Delhi) . . . 613

----Reassessment--Notice--Validity--Conditions precedent--Reasons recorded for reopening assessment should state failure by assessee to disclose fully and truly all material facts necessary for his assessment and should provide live link to formation of belief that income has escaped assessment--Essential requirement not satisfied--Notice to be quashed--Sabharwal Properties Industries P. Ltd. v. ITO (Delhi) . . . 547

----Reassessment--Notice after four years--Failure to disclose material facts necessary for assessment--Complete details furnished during original assessment proceedings--Notice not valid-- Munjal Showa Ltd. v. Deputy CIT (Delhi) . . . 555

----Reassessment--Validity--Returns not disclosing unabsorbed depreciation and business losses carried forward--Assessment order on 31-12-2010 and order of rectification on 6-9-2011--Assessment order merging in order of rectification--Notice of reassessment on 10-12-2013--Notice not beyond four years--Notice and consequent reassessment--Valid-- PVP Ventures Ltd. v. Asst. CIT (Mad) . . . 582

S. 148 --Reassessment--Condition precedent--Opinion that income had escaped assessment must be that of Assessing Officer--Notice based on review of assessment order by Commissioner--Not valid--Notice should give reasons--Notice cannot be improved by affidavits and other reasons-- Munjal Showa Ltd. v. Deputy CIT (Delhi) . . . 555

----Reassessment--Notice--Industrial undertaking--Special deduction--Condition precedent for reassessment--Reason to believe that income chargeable to tax had escaped assessment--Issued on which reasons based considered in original assessment--Reopening of assessment without jurisdiction--Obligation of assessee only to disclose primary facts necessary for assessment--Assessee disclosing truly and fully all material facts--Reopening of assessment not warranted-- CIT (LTU) v. Reliance Industries Ltd. (Bom) . . . 574

----Reassessment--Notice--Service of valid notice within limitation--Condition precedent for reassessment--Burden of proof of service of notice on Department--Participation in reassessment proceedings by representative of assessee does not result in waiver of necessity of service of notice--Objection raised to non-service of notice--Reassessment proceedings ignoring objection--Notice and consequent reassessment not valid-- CIT v.Chetan Gupta (Delhi) . . . 613

----Reassessment--Notice--Validity--Conditions precedent--Reasons recorded for reopening assessment should state failure by assessee to disclose fully and truly all material facts necessary for his assessment and should provide live link to formation of belief that income has escaped assessment--Essential requirement not satisfied--Notice to be quashed--Sabharwal Properties Industries P. Ltd. v. ITO (Delhi) . . . 547

----Reassessment--Notice after four years--Failure to disclose material facts necessary for assessment--Complete details furnished during original assessment proceedings--Notice not valid-- Munjal Showa Ltd. v. Deputy CIT (Delhi) . . . 555

----Reassessment--Validity--Returns not disclosing unabsorbed depreciation and business losses carried forward--Assessment order on 31-12-2010 and order of rectification on 6-9-2011--Assessment order merging in order of rectification--Notice of reassessment on 10-12-2013--Notice not beyond four years--Notice and consequent reassessment--Valid-- PVP Ventures Ltd. v. Asst. CIT (Mad) . . . 582

S. 234B --Advance tax--Interest--Waiver--Power of Chief Commissioner to grant--Directions of Central Board of Direct Taxes --Assessee declaring sale of property but not disclosing capital gains thereon--Failure to disclose not due to unavoidable circumstances--Denial of waiver proper-- Arun Sunny v. Chief CIT (Ker) . . . 533

S. 271(1)(c) --Penalty--Concealment of income--Nothing on record to demonstrate nature of service rendered by companies to whom commission paid--Onus on assessee to prove genuineness of commission payments--Assessee failing to discharge--Essential conditions for levying penalty fulfilled-- Roger Enterprises P. Ltd. v. CIT (Delhi) . . . 639

Income-tax Rules, 1962 :

R. 8 --Tea development allowance--Computation of allowance--Mode of computation--Composite income--Apportionment of agricultural income and non-agricultural income--Deduction to be allowed from total composite income derived from growing and manufacturing tea--Rule 8 shall apply thereafter to apportion resultant income-- Singlo (India) Tea Ltd. v. CIT (Cal) . . . 537

 

__._,_.___

---