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Tuesday, May 3, 2016

ITR (TRIB) Volume 47 : Part 5 (Issue dated : 2-5-2016)



 

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

ONLINE EDITION

SUBJECT INDEX TO CASES REPORTED

Business expenditure --Disallowance--Brokerage--Assessee submitting invoice of broking company containing full particulars--Disallowance not permissible on basis of presumptions--Relief granted by Commissioner (Appeals) confirmed--Disallowance sustained by Commissioner (Appeals)--Matter remanded--Income-tax Act, 1961, s. 37-- Fatema Jaffer Ghadiali allias Fatema Yusuf Rajkotwala v. ITO
(Mumbai) . . . 456

----No objection certificate charges for sale of flats--Allowable--Income-tax Act, 1961, s. 48-- Fatema Jaffer Ghadiali allias Fatema Yusuf Rajkotwala v. ITO
(Mumbai) . . . 456

Capital gains --Exemption--Investment of gains in residential property--Discrepancy in date of payment--Matter remanded for verification--Income-tax Act, 1961, s. 54-- Fatema Jaffer Ghadiali allias Fatema Yusuf Rajkotwala v. ITO
(Mumbai) . . . 456

----Long-term capital gains or short-term capital gains--Flat allotted to assessee in 2006--Assessee obtaining right to hold property and period of holding to be reckoned from that date--Holding period of flat sold by assessee more than 36 months--Long-term capital gains--Income-tax Act, 1961-- Fatema Jaffer Ghadiali allias Fatema Yusuf Rajkotwala v. ITO(Mumbai) . . . 456

Depreciation --Purchase of business by assessee as going concern including trade mark--Person in whose name trade mark registered assigning rights to assessee--That assessee not registered owner not material--Assessee entitled to depreciation in respect of trade mark--Income-tax Act, 1961, s. 32-- Trio Elevators Co. (India) Ltd. v. Asst. CIT (Ahd) . . . 435

Export --Exemption--Approval granted by designated officer under Software Technology Park Scheme--Constitutes satisfaction of requirements contemplated under section 10B--Quoting wrong provision of law not reason to deny relief--Assessee entitled to exemption under section 10A too--Income-tax Act, 1961, ss. 10A, 10B-- ITO v. Wizard Enterprises P. Ltd. (Kolkata) . . . 442

Speculation transaction --Speculative loss--Assessee, a diamond exporter--Loss in cancellation of foreign currency forward contracts--Integral or incidental to export activity of assessee--Transactions not speculative--Loss deductible--Income-tax Act, 1961, s. 43(5)--Hiraco India P. Ltd. v. Deputy CIT (Mumbai) . . . 467

 

PRINT EDITION

Volume 47 : Part 5 (Issue dated : 2-5-2016)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Advance tax --Interest--Book profit--Inclusion of amounts in terms of Explanation 1(i) to section 115JB with retrospective effect from 1-4-2001--No interest can be charged by virtue of retrospective amendment under section 115JB--Income-tax Act, 1961, ss. 115JB, 234B--NHPC Ltd. v. Asst. CIT (Delhi) . . . 561

Business expenditure --Disallowance--Foreign bank--Head office expenditure--Offshore remuneration to expatriate employees rendering services in Indian branches of assessee--Assessing Officer to verify whether expenditure included for purposes of section 44C--Income-tax Act, 1961, ss. 37, 44C-- Royal Bank of Scotland N. V. v. Deputy DIT (International Taxation) (Kolkata) . . . 513

----Staff welfare expenses and repair and maintenance expenses--Expenses not incurred for personal benefit--Authorities to consider claim in reasonable and practical manner--Disallowance not proper--Income-tax Act, 1961, s. 37(1)-- Mahendra Kumar Saha v. Asst. CIT (Cuttack) . . . 590

Capital or revenue expenditure --Lease rentals--Right to use assets for which lease rentals paid--Treatment of lease rental in books of account is of no relevance--Deductible--Income-tax Act, 1961-- Royal Bank of Scotland N. V. v. Deputy DIT (International Taxation) (Kolkata) . . . 513

Charitable purpose --Computation of income--Depreciation--Cost of assets allowed earlier as application of income--Assessee not entitled to depreciation on opening balance of written down value of assets--Income-tax Act, 1961, ss. 11, 32-- Sri Ram Samaj v. Joint DIT (Exemptions) (Chennai) . . . 629

----Exemption--Receipts from letting out community hall and marriage hall--For and on behalf of trust and not business held under trust--Not incidental to attainment of objects--Business income--Section 11(4A) applicable--Assessee not entitled to exemption--Income-tax Act, 1961, ss. 2(15), 11, 11(4A), 12AA-- Sri Ram Samaj v. Joint DIT (Exemptions) (Chennai) . . . 629

----Registration--Pre-qualification for claiming exemption--Educational institution--Failure by authorities to show objects of trust not charitable or not genuine--Assessee establishing that it was created for charitable purposes including educational activity and using its funds for purpose of educational activities--Eligible for registration--Income-tax Act, 1961, s. 12A--Shree Balaji Educational Trust v. CIT
(Delhi)
 . . . 595

Deduction of tax at source --Foreign bank--Interest paid to head office and other branches outside India--Jurisdictional High Court in assessee's own case for earlier years holding no tax need to be deducted at source--Bank deducting tax at source for subsequent years and remitting to Exchequer--Bank entitled to refund--Matter remanded--Income-tax Act, 1961, s. 195-- Royal Bank of Scotland N. V. v. Deputy DIT (International Taxation) (Kolkata) . . . 513

Depreciation --Higher rate of depreciation--Automated teller machine--Computerised machines not only allowing customers to withdraw money but check account balance, pay bills, purchase goods and services and linked with main server--Entitled to higher rate of depreciation--Income-tax Act, 1961-- Royal Bank of Scotland N. V. v. Deputy DIT (International Taxation) (Kolkata) . . . 513

Industrial undertaking --Special deduction--Option of choosing initial assessment year wholly upon assessee--Losses can be set off against income of assessee--No notional carry forward up to initial assessment year--Income-tax Act, 1961, s. 80-IA-- Deputy CIT v. Yamuna Power and Infrastructure Ltd.
(Chandigarh) . . . 533

Non-resident --Taxability--Rate of tax--Foreign bank registered as scheduled bank in India having permanent establishment--Taxable under relevant Finance Act--Double Taxation Avoidance Agreement between India and the Netherlands, art. 7--Income-tax Act, 1961--Royal Bank of Scotland N. V. v. Deputy DIT (International Taxation) (Kolkata) . . . 513

Penalty --Search and seizure--Undisclosed income--Disclosure petition--Immunity--Additional income not disclosed in original return--Disclosure petition filed after search substantiating reasons for offering additional income--Assessee entitled to immunity from levy of penalty--Income-tax Act, 1961, ss. 132(4), 271AAA(2)-- Deputy CIT v. Salasar Stock Broking Ltd.(Kolkata) . . . 616

Rectification of mistake --Book profit--Computation of income under section 115JB--Change of law--Provision for deduction of bad and doubtful debts considered and decided by Commissioner (Appeals)--Rectification to be made by Commissioner (Appeals) only--Assessing Officer cannot invoke rectification provisions--Order passed under section 154 invalid--Income-tax Act, 1961, ss. 115JB, 154(1A)-- NHPC Ltd. v. Asst. CIT (Delhi) . . . 561

Revision --Commissioner--Condition precedent--Amalgamation of companies--No provision for communication of factum of amalgamation to Commissioner--Amalgamating company loses its identity and no proceedings can be taken in its earlier name--Initiation of revision proceedings against amalgamating company after date of amalgamation--Not valid--Income-tax Act, 1961, s. 263-- Milestone Tradelinks P. Ltd. v. ITO (Ahd) . . . 606

Search and seizure --Assessment of third person--Undisclosed income--Addition on ground assessee did not have sufficient income--Failure by Department to prove claim of assessee factually incorrect--Addition not sustainable--Income-tax Act, 1961, s. 153C-- Asst. CIT v. Goodview Trading P. Ltd. (Delhi) . . . 555

Transfer pricing --International transactions--Arm's length price--Procedure to be followed by Assessing Officer to pass a draft assessment order is mandatory--No option to Assessing Officer to pass or not to pass draft assessment order--No draft order provided to assessee before passing final order--Order not valid--Income-tax Act, 1961, s. 144C-- Asst. CIT v. Getrag Hi Tech Gears Pvt. Ltd. (Chandigarh) . . . 545

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Double Taxation Avoidance Agreement between India and the Netherlands

Art. 7 --Non-resident--Taxability--Rate of tax--Foreign bank registered as scheduled bank in India having permanent establishment--Taxable under relevant Finance Act-- Royal Bank of Scotland N. V. v. Deputy DIT (International Taxation)
(Kolkata) . . . 513

Income-tax Act, 1961

S. 2(15) --Charitable purpose--Exemption--Receipts from letting out community hall and marriage hall--For and on behalf of trust and not business held under trust--Not incidental to attainment of objects--Business income--Section 11(4A) applicable--Assessee not entitled to exemption-- Sri Ram Samaj v . Joint DIT (Exemptions)
(Chennai) . . . 629

S. 11 --Charitable purpose--Computation of income--Depreciation--Cost of assets allowed earlier as application of income--Assessee not entitled to depreciation on opening balance of written down value of assets-- Sri Ram Samaj v . Joint DIT (Exemptions) (Chennai) . . . 629

----Charitable purpose--Exemption--Receipts from letting out community hall and marriage hall--For and on behalf of trust and not business held under trust--Not incidental to attainment of objects--Business income--Section 11(4A) applicable--Assessee not entitled to exemption--Sri Ram Samaj v . Joint DIT (Exemptions)
(Chennai) . . . 629

S. 11(4A) --Charitable purpose--Exemption--Receipts from letting out community hall and marriage hall--For and on behalf of trust and not business held under trust--Not incidental to attainment of objects--Business income--Section 11(4A) applicable--Assessee not entitled to exemption-- Sri Ram Samaj v . Joint DIT (Exemptions)
(Chennai) . . . 629

S. 12A --Charitable purposes--Registration--Pre-qualification for claiming exemption--Educational institution--Failure by authorities to show objects of trust not charitable or not genuine--Assessee establishing that it was created for charitable purposes including educational activity and using its funds for purpose of educational activities--Eligible for registration-- Shree Balaji Educational Trust v. CIT
(Delhi)
 . . . 595

S. 12AA --Charitable purpose--Exemption--Receipts from letting out community hall and marriage hall--For and on behalf of trust and not business held under trust--Not incidental to attainment of objects--Business income--Section 11(4A) applicable--Assessee not entitled to exemption-- Sri Ram Samaj v . Joint DIT (Exemptions)
(Chennai) . . . 629

S. 32 --Charitable purpose--Computation of income--Depreciation--Cost of assets allowed earlier as application of income--Assessee not entitled to depreciation on opening balance of written down value of assets-- Sri Ram Samaj v . Joint DIT (Exemptions) (Chennai) . . . 629

S. 37 --Business expenditure--Disallowance--Foreign bank--Head office expenditure--Offshore remuneration to expatriate employees rendering services in Indian branches of assessee--Assessing Officer to verify whether expenditure included for purposes of section 44C-- Royal Bank of Scotland N. V. v. Deputy DIT (International Taxation) (Kolkata) . . . 513

S. 37(1) --Business expenditure--Staff welfare expenses and repair and maintenance expenses--Expenses not incurred for personal benefit--Authorities to consider claim in reasonable and practical manner--Disallowance not proper-- Mahendra Kumar Saha v. Asst. CIT (Cuttack) . . . 590

S. 44C --Business expenditure--Disallowance--Foreign bank--Head office expenditure--Offshore remuneration to expatriate employees rendering services in Indian branches of assessee--Assessing Officer to verify whether expenditure included for purposes of section 44C-- Royal Bank of Scotland N. V. v. Deputy DIT (International Taxation) (Kolkata) . . . 513

S. 80-IA --Industrial undertaking--Special deduction--Option of choosing initial assessment year wholly upon assessee--Losses can be set off against income of assessee--No notional carry forward up to initial assessment year-- Deputy CIT v. Yamuna Power and Infrastructure Ltd. (Chandigarh) . . . 533

S. 115JB --Advance tax--Interest--Book profit--Inclusion of amounts in terms of Explanation 1(i) to section 115JB with retrospective effect from 1-4-2001--No interest can be charged by virtue of retrospective amendment under section 115JB-- NHPC Ltd. v. Asst. CIT (Delhi) . . . 561

----Rectification of mistake--Book profit--Computation of income under section 115JB--Change of law--Provision for deduction of bad and doubtful debts considered and decided by Commissioner (Appeals)--Rectification to be made by Commissioner (Appeals) only--Assessing Officer cannot invoke rectification provisions--Order passed under section 154 invalid-- NHPC Ltd. v. Asst. CIT (Delhi) . . . 561

S. 132(4) --Penalty--Search and seizure--Undisclosed income--Disclosure petition--Immunity--Additional income not disclosed in original return--Disclosure petition filed after search substantiating reasons for offering additional income--Assessee entitled to immunity from levy of penalty-- Deputy CIT v. Salasar Stock Broking Ltd. (Kolkata) . . . 616

S. 144C --Transfer pricing--International transactions--Arm's length price--Procedure to be followed by Assessing Officer to pass a draft assessment order is mandatory--No option to Assessing Officer to pass or not to pass draft assessment order--No draft order provided to assessee before passing final order--Order not valid-- Asst. CIT v. Getrag Hi Tech Gears Pvt. Ltd. (Chandigarh) . . . 545

S. 153C --Search and seizure--Assessment of third person--Undisclosed income--Addition on ground assessee did not have sufficient income--Failure by Department to prove claim of assessee factually incorrect--Addition not sustainable-- Asst. CIT v. Goodview Trading P. Ltd. (Delhi) . . . 555

S. 154 --Rectification of mistake--Book profit--Computation of income under section 115JB--Change of law--Provision for deduction of bad and doubtful debts considered and decided by Commissioner (Appeals)--Rectification to be made by Commissioner (Appeals) only--Assessing Officer cannot invoke rectification provisions--Order passed under section 154 invalid-- NHPC Ltd. v. Asst. CIT (Delhi) . . . 561

S. 195 --Deduction of tax at source--Foreign bank--Interest paid to head office and other branches outside India--Jurisdictional High Court in assessee's own case for earlier years holding no tax need to be deducted at source--Bank deducting tax at source for subsequent years and remitting to Exchequer--Bank entitled to refund--Matter remanded-- Royal Bank of Scotland N. V. v. Deputy DIT (International Taxation) (Kolkata) . . . 513

S. 234B --Advance tax--Interest--Book profit--Inclusion of amounts in terms of Explanation 1(i) to section 115JB with retrospective effect from 1-4-2001--No interest can be charged by virtue of retrospective amendment under section 115JB-- NHPC Ltd. v. Asst. CIT (Delhi) . . . 561

S. 263 --Revision--Commissioner--Condition precedent--Amalgamation of companies--No provision for communication of factum of amalgamation to Commissioner--Amalgamating company loses its identity and no proceedings can be taken in its earlier name--Initiation of revision proceedings against amalgamating company after date of amalgamation--Not valid--Milestone Tradelinks P. Ltd. v. ITO (Ahd) . . . 606

S. 271AAA(2) --Penalty--Search and seizure--Undisclosed income--Disclosure petition--Immunity--Additional income not disclosed in original return--Disclosure petition filed after search substantiating reasons for offering additional income--Assessee entitled to immunity from levy of penalty-- Deputy CIT v. Salasar Stock Broking Ltd. (Kolkata) . . . 616

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