INCOME TAX REPORTS (ITR)
Volume 345 Part 2 (Issue dated 25-6-2012)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Appeal to Appellate Tribunal --Findings of fact--Finality--Finding not based on evidence--Can be set aside--Income-tax Act, 1961-- S. K. Bahadur v. Union of India (Delhi) . . . 95
----Findings of fact--Whether perverse--Finding that holding company paid for entire share capital of assessee by cheque--Finding that shares held by individuals as nominees of holding company--Finding that violations of Companies Act not to affect benefit under Income-tax Act--Not sustainable--Matter remanded for decision afresh-- CIT v . Sunaero Limited (Delhi) . . . 163
Assessment --Notice--Notice not served on correct address mentioned in return--Assessment not valid--Income-tax Act, 1961, s. 143(2)-- CIT v. Mascomptel India Ltd . (Delhi) . . . 58
Business income --Remission or cessation of trading liability--Brokerage liability outstanding written back into profit and loss account and tax paid--No remission or cessation of liability in relevant assessment year--Income-tax Act, 1961, s. 41(1)-- CIT v. Enam Securities P. Ltd . (Bom) . . . 64
Capital gains --Long-term capital gains--Set off of loss against gains on sale of shares--Genuineness and credibility of transaction not disputed in past years--Non-cumulative redeemable preference shares could not be equated with debentures or bond--Assessee entitled to benefit of indexation--Income-tax Act, 1961, s. 48-- CIT v. Enam Securities P. Ltd . (Bom) . . . 64
----Transactions not regarded as transfers--Transfer by subsidiary to holding company--Subsidiary must be wholly owned--Income-tax Act, 1961, ss. 45, 47(v)--Companies Act, 1956, ss. 49, 187C-- CIT v. Sunaero Limited (Delhi) . . . 163
Central Board of Direct Taxes --Circulars--Binding nature--Scope of-- CIT v. Nagesh Knitwears P. Ltd . (Delhi) . . . 135
Company --Shareholder--Presumption that registered shareholder holds share in own right--Claim that shares held as nominee--Burden of proof on person claiming-- CIT v . Sunaero Limited (Delhi) . . . 163
Export --Special deduction--Business income--Premium on sale of export quota--Not covered by clauses 28(iiia) to 28(iiie)--Not to be considere for deduction--Income-tax Act, 1961, ss. 28(iiia), (iiic), 80HHC(3)-- CIT v . Nagesh Knitwears P. Ltd. (Delhi) . . . 135
Industrial undertaking --Development of infrastructure--Industrial park or special economic zone--Special deduction under section 80-IA--Condition precedent--Industrial undertaking should get notified under a gazetted scheme--No scheme in existence between 1st April, 2006, and 8th January, 2008--Application for notification under section 2002 Scheme in September, 2006--Rejection of application--Justified--Income-tax Act, 1961, s. 80-IA-- Regency Soraj Infrastructures v . Union of India (Delhi) . . . 105
----Special deduction--Activity requiring more than ten workers--Casual or contractual workers are workers--Conditions under section 80-IB fulfilled--Assessee entitled to deduction--Income-tax Act, 1961, s. 80-IB(2)(iv)-- CIT v. Nanda Mint and Pine Chemicals Ltd . (Delhi) . . . 60
Interpretation of taxing statutes --Provisos-- CIT v. Mohair Investment and Trading Co. P. Ltd . (Delhi) . . . 51
Loss --Carry forward and set off--Petition filed beyond time--Finding that return had been filed within extension of time granted by Assessing Officer--Carry forward and set off of loss--Valid--Income-tax Act, 1961-- CIT v . Arunajothi Balasubramanian (Mad) . . . 81
Penalty --Acceptance of loan or deposit in cash exceeding prescribed limit--Whether amount received loan or deposit--Tribunal failing to examine specific findings of Assessing Officer and Commissioner (Appeals)--Matter remanded--Income-tax Act, 1961, s. 271D-- CIT v. Numero Uno Financial Services P. Ltd. (Delhi) . . . 84
----Limitation--Law applicable--Effect of proviso to section 275(1)(a)--Penalty levied within six months of receipt of order from Tribunal--Not barred by limitation--Income-tax Act, 1961, s. 275(1)(a)-- CIT v . Mohair Investment and Trading Co. P. Ltd . (Delhi) . . . 51
Reassessment --Notice after four years on ground assessee acted as a facilitator for its parent company and not a manufacturer or exporter--Failure to disclose all material facts not set out in reasons--Notice not valid--Income-tax Act, 1961, s. 148-- Sitara Diamond Pvt. Ltd. v . Deputy CIT (Bom) . . . 91
----Validity--Capital gains--Reassessment on ground that rate of tax applicable to long-term capital gains wrong--Reasons for notice not recording that proviso to section 112 was not applicable--Reassessment not valid--Income-tax Act, 1961, ss. 112, 147-- Director of Income-tax (International Taxation) v . May and Baker Ltd . (Bom) . . . 87
Recovery of tax --Stay of recovery proceedings--General principles--Recovery proceedings against member of association of persons--Appeal by association of persons against its assessment pending--Rejection of application for stay--Not justified--Income-tax Act, 1961, s. 220-- UTI Mutual Fund v . ITO (Bom) . . . 71
Revision --Erroneous and prejudicial to Revenue--Order holding assessee entitled to deduction in respect of premium of sale of export quota--Is erroneous and prejudicial to Revenue--Revision justified--Income-tax Act, 1961, ss. 28(iiia), (iiic), 80HHC(3), 263-- CIT v. Nagesh Knitwears P. Ltd. (Delhi) . . . 135
Search and seizure --Block assessment--Undisclosed income--Assets in name of wife of assessee--Wealth-tax return submitted by wife of assessee before search proceedings--Explanation regarding assets not considered--Addition of income from assets belonging to wife of assessee in his total income--Not justified--Income-tax Act, 1961-- S. K. Bahadur v . Union of India (Delhi) . . . 95
Non-resident --Composite turnkey contract--Contract carried out in India and risk continuing with non-resident till commissioning and acceptance--Offshore services or supplies not to be separately considered--Profits taxable in India--Consortium bidding for contract--Assessable as association of persons--Double Taxation Avoidance Agreement between India and Germany--Income-tax Act, 1961, ss. 2(31), 9(2), Expln ., 44C, 44DA-- ABC , In re . . . 119
ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))
Volume 16 : Part 4 (Issue dated : 18-06-2012)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
Assessment --Limitation--Assessment order and demand notice served 130 days after assessment--Order barred by limitation--Income-tax Act, 1961-- Asst. CIT v. Dr. Tulsi Prasad Mohapatra and Another (Cuttack) . . . 449
----Limitation--Order of assessment served after 85 days from date of order--Assessment barred by limitation--Income-tax Act, 1961, s. 148-- Asst. CIT v. Orissa Stevedores Ltd. (Cuttack) . . . 431
----Order of assessment served belatedly--Assessee filing appeal upon receipt of demand notice and returns for subsequent years--No prejudice caused to assessee--Assessment order proper--Income-tax Act, 1961, s. 143(3)-- Torsteel Ltd. v. Asst. CIT (Cuttack) . . . 425
Business expenditure --Disallowance--Payments subject to deduction of tax at source--Assessee complying with provisions of section 40(a)(ia)--Entitled to claim deduction--Income-tax Act, 1961, s. 40(a)(ia)-- Torsteel Ltd. v. Asst. CIT (Cuttack) . . . 425
Depreciation --Leased assets--Assessee paying tax on lease rental--Entitled to depreciation--Income-tax Act, 1961, s. 32--Circular No. 2 of 2001-- Asst. CIT v. GMAC Financial Services India Ltd. (Chennai) . . . 422
Fringe benefit tax --Assessee offering gifts to customers at time of taking club membership--Finding that gifts having inbuilt condition--On cancellation of membership, sums refunded after deducting value of such gifts--To be considered as sales promotion expenses, not gifts--Income-tax Act, 1961, s. 115WB(2)(D)-- Mahindra Holidays and Resorts India Ltd. v. Asst. CIT (Chennai) . . . 412
Income --Guarantee commission paid to holding company--Cannot be considered as income from debt claim--Double Taxation Avoidance Agreement between India and the U. S. A., art. 11-- Asst. CIT v. GMAC Financial Services India Ltd. (Chennai) . . . 422
Income from undisclosed sources --Unaccounted sales--No infirmity found--Addition to be deleted--Income-tax Act, 1961-- Torsteel Ltd. v. Asst. CIT (Cuttack) . . . 425
International transactions --Arm's length price--Adjustment in respect of interest not charged on debit balances, overdue beyond thirty days, of assessee's associated enterprises--Continuing debit balance per se, with associated enterprises does not amount to international transaction--Addition not justified--Income-tax Act, 1961, s. 92B-- Nimbus Communications Ltd. v. Asst. CIT (Mumbai) . . . 477
----Arm's length price--Dispute Resolution Panel--Draft assessment order--Duty to pass speaking order dealing with objections of assessee and giving reasons for not accepting them--Income-tax Act, 1961, s. 144C(5)-- Iljin Automotive P. Ltd. v. Asst. CIT (Chennai) . . . 481
Loss --Speculation business--Transaction in derivatives on notified stock exchange--Loss allowable--Income-tax Act, 1961, s. 43(5)(d)-- Smt. Vibha Goel v. Joint CIT (Chandigarh) . . . 418
Reassessment --Jurisdiction--Assessment under section 143(3) treating income from dividend and interest as business income in consonance with view taken in preceding as well as succeeding year--Reopening based on audit objection without independent application of mind and without recording that income had escaped assessment--Not permissible--Income-tax Act, 1961, ss. 147, 148-- GMR Holdings P. Ltd. v. Deputy CIT (Bangalore) . . . 457
Transfer pricing --International transaction--Determination of arm's length price--Reference to Transfer Pricing Officer--Dispute Resolution Panel--Non-speaking order--Matter remanded--Income-tax Act, 1961, s. 144C-- Evalueserve.com P. Ltd. v. ITO (Delhi) . . . 442
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Double Taxation Avoidance Agreement between India and the U. S. A. :
Art. 11 --Income--Guarantee commission paid to holding company--Cannot be considered as income from debt claim-- Asst. CIT v. GMAC Financial Services India Ltd. (Chennai) . . . 422
s. 32 --Depreciation--Leased assets--Assessee paying tax on lease rental--Entitled to depreciation-- Asst. CIT v. GMAC Financial Services India Ltd. (Chennai) . . . 422
s. 40(a)(ia) --Business expenditure--Disallowance--Payments subject to deduction of tax at source--Assessee complying with provisions of section 40(a)(ia)--Entitled to claim deduction-- Torsteel Ltd. v. Asst. CIT (Cuttack) . . . 425
s. 43(5)(d) --Loss--Speculation business--Transaction in derivatives on notified stock exchange--Loss allowable-- Smt. Vibha Goel v. Joint CIT (Chandigarh) . . . 418
s. 92B --International transactions--Arm's length price--Adjustment in respect of interest not charged on debit balances, overdue beyond thirty days, of assessee's associated enterprises--Continuing debit balance per se, with associated enterprises does not amount to international transaction--Addition not justified-- Nimbus Communications Ltd. v. Asst. CIT (Mumbai) . . . 477
s. 115WB(2)(D) --Fringe benefit tax--Assessee offering gifts to customers at time of taking club membership--Finding that gifts having inbuilt condition--On cancellation of membership, sums refunded after deducting value of such gifts--To be considered as sales promotion expenses, not gifts-- Mahindra Holidays and Resorts India Ltd. v. Asst. CIT (Chennai) . . . 412
s. 143(3) --Assessment--Order of assessment served belatedly--Assessee filing appeal upon receipt of demand notice and returns for subsequent years--No prejudice caused to assessee--Assessment order proper-- Torsteel Ltd. v. Asst. CIT (Cuttack) . . . 425
s. 144C --Transfer pricing--International transaction--Determination of arm's length price--Reference to Transfer Pricing Officer--Dispute Resolution Panel--Non-speaking order--Matter remanded-- Evalueserve.com P. Ltd. v. ITO (Delhi) . . . 442
s. 144C(5) --International transactions--Arm's length price--Dispute Resolution Panel--Draft assessment order--Duty to pass speaking order dealing with objections of assessee and giving reasons for not accepting them-- Iljin Automotive P. Ltd. v. Asst. CIT (Chennai) . . . 481
s. 147 --Reassessment--Jurisdiction--Assessment under section 143(3) treating income from dividend and interest as business income in consonance with view taken in preceding as well as succeeding year--Reopening based on audit objection without independent application of mind and without recording that income had escaped assessment--Not permissible-- GMR Holdings P. Ltd. v. Deputy CIT (Bangalore) . . . 457
s. 148 --Assessment--Limitation--Order of assessment served after 85 days from date of order--Assessment barred by limitation-- Asst. CIT v. Orissa Stevedores Ltd. (Cuttack) . . . 431
----Reassessment--Jurisdiction--Assessment under section 143(3) treating income from dividend and interest as business income in consonance with view taken in preceding as well as succeeding year--Reopening based on audit objection without independent application of mind and without recording that income had escaped assessment--Not permissible-- GMR Holdings P. Ltd. v. Deputy CIT (Bangalore) . . . 457
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