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