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Friday, July 24, 2015

ITR Volume 375 : Part 3 (Issue dated : 20-7-2015)

 

INCOME TAX REPORTS (ITR)

ONLINE EDITION

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURT

Non-resident --Income deemed to accrue or arise in India--Fees for technical services--Meaning of technical services--Commission for procuring export orders--No fees for technical services--Amount could not be deemed to accrue or arise in India--Income-tax Act, 1961, s. 9(1)(vii)-- DIT (International Taxation) v. Panalfa Autoelektrik Ltd. (Delhi) . . . 34

Reassessment --Notice--Limitation--Condition precedent for reassessment--Valid notice before limitation--Notice must give reasons--Notice after four years must have prior sanction under section 151--Notice issued prior to limitation which were not valid--Valid notice issued after limitation--Reassessment proceedings not valid--Income-tax Act, 1961, ss. 147, 148, 151-- Lal Chand Agarwal v. CIT (All) . . . 48

Search and seizure --Block assessment--Undisclosed income--Reasonable explanation for amounts discovered--Additions could not be made in block assessment--Income-tax Act, 1961-- CIT v. Rakesh Goyal (All) . . . 60

PRINT EDITION

ITR Volume 375 : Part 3 (Issue dated : 20-7-2015)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

SUPREME COURT

Housing project --Special deduction--Change of law with effect from April 1, 2005--Benefit restricted to cases where area utilised for shops and commercial establishments does not exceed 5 per cent. of aggregate built-up area of housing project or 2,000 sq. feet, whichever was less--Not to apply to projects where approval of local authority granted prior to April 1, 2005--Even if project completed thereafter--Income-tax Act, 1961, s. 80-IB(10)-- CIT v.Sarkar Builders . . . 392

Income-tax --General principles--Principle that law as on first day of assessment year applies--Not absolute--Exception by express or necessary implication possible-- CIT v.Sarkar Builders . . . 392

HIGH COURTS

Advance tax --Interest--Assessee following project completion method of accounting for its building projects--Assessee for earlier assessment year accepting that income derived from parking charges assessable--Assessee not filing return and not paying advance tax for parking charges--Interest payable by assessee--Income-tax Act, 1961, s. 234B-- Sudhir G. Borgaonkar v. Asst. CIT (Bom) . . . 322

Appeal to Commissioner (Appeals) --Powers of Commissioner (Appeals)--Power to conduct further inquiry--Income-tax Act, 1961, s. 250-- CIT v. Jansampark Advertising and Marketing P. Ltd. (Delhi) . . . 373

Business expenditure --Capital or revenue expenditure--Fluctuation in price of foreign currency--Increase in price of raw material--Extra amount paid deductible as revenue expenditure--Income-tax Act, 1961-- CIT v. Tony Electronics Ltd. (Delhi) . . . 431

Cash credits --Share application money--Effect of section 68--Burden of proof--Burden on assessee to prove identity of creditor, its creditworthiness and genuineness of transaction--Assessing Officer finding that burden had not been discharged--Commissioner (Appeals) and Tribunal not conducting proper enquiry--Addition by Assessing Officer could not be deleted--Matter remanded--Income-tax Act, 1961, s. 68-- CIT v. Jansampark Advertising and Marketing P. Ltd. (Delhi) . . . 373

Depreciation --Finding that assessee was manufacturing articles--Assessee entitled to depreciation--Income-tax Act, 1961, s. 32-- CIT v. Tony Electronics Ltd. (Delhi) . . . 431

Housing project --Special deduction--Development of housing--Scope of section 80-IB(10)--Assessee undertaking housing projects allotted by Railway Welfare Organisation and Delhi Development Authority--Entitled to special deduction under section 80-IB(10)--Income-tax Act, 1961, s. 80-IB-- CIT v. VRM India Ltd. (Delhi) . . . 414

Income --Diversion of income by overriding title--General principles--Salary or pension received by member of religious congregation--Rules of religious congregation obliging members to vow of poverty--Consequent handing over of amount to religious congregation--Obligation based on personal law--Religious congregation would not usually have legal right to receive amount--Amount not diverted at source--Direction to deduct tax at source on payments of salary or pension to member of religious congregation--Valid--Income-tax Act, 1961-- Fr. Sabu P. Thomas v. Union of India (Ker) . . . 352

Income from undisclosed sources --Alleged suppression of sales--Finding by Commissioner (Appeals) and Tribunal that there was no suppression of sales--Deletion of addition justified--Income-tax Act, 1961-- CIT v. Tony Electronics Ltd. (Delhi) . . . 431

Industrial undertaking --Special deduction--Special deduction under sections 80HH, 80-I and 80-IA--Condition precedent--Manufacture of article--Assembling of cassettes from finished components amounts to manufacture--Assessee entitled to special deductions--Income-tax Act, 1961, ss. 80HH, 80-I, 80-IA-- CIT v. Tony Electronics Ltd. (Delhi) . . . 431

Loss --Business loss--Accounting--Rejection of accounts--Accounts could not be rejected merely because trial production could not be proved--Allowance of loss based on facts--Justified--Income-tax Act, 1961-- CIT v. Tony Electronics Ltd. (Delhi) . . . 431

Reassessment --Notice--Condition precedent--Reason to believe income has escaped assessment--Notice not stating that income had escaped assessment--Notice to verify details--Not valid--Income-tax Act, 1961, ss. 147, 148-- Nivi Trading Ltd. v. Union of India(Bom) . . . 308

Salary --Profits in lieu of salary--Scope of section 17--Industrial drives system--Restrictive covenant--Assessee with specialised knowledge forming private limited company--Joint venture between private limited company and foreign company--Foreign company paying consideration to assessee under non-competition agreement--No relation of master and servant between foreign company and assessee--Amount received under non-competition agreement not assessable as profit in lieu of salary--Income-tax Act, 1961, s. 17-- G. Raveendran v. CIT (Mad) . . . 326

Scientific research expenditure --Weighted deduction--Denial of deduction by Assessing Officer on ground machinery required to be installed and commissioned before expiry of relevant previous year--Not proper--Income-tax Act, 1961, s. 35(2AB)-- CIT (LTU) v. Biocon Ltd. (Karn) . . . 306

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961 :

S. 17 --Salary--Profits in lieu of salary--Scope of section 17--Industrial drives system--Restrictive covenant--Assessee with specialised knowledge forming private limited company--Joint venture between private limited company and foreign company--Foreign company paying consideration to assessee under non-competition agreement--No relation of master and servant between foreign company and assessee--Amount received under non-competition agreement not assessable as profit in lieu of salary-- G. Raveendran v. CIT(Mad) . . . 326

S. 32 --Depreciation--Finding that assessee was manufacturing articles--Assessee entitled to depreciation-- CIT v. Tony Electronics Ltd. (Delhi) . . . 431

S. 35(2AB) --Scientific research expenditure--Weighted deduction--Denial of deduction by Assessing Officer on ground machinery required to be installed and commissioned before expiry of relevant previous year--Not proper-- CIT (LTU) v. Biocon Ltd. (Karn) . . . 306

S. 68 --Cash credits--Share application money--Effect of section 68--Burden of proof--Burden on assessee to prove identity of creditor, its creditworthiness and genuineness of transaction--Assessing Officer finding that burden had not been discharged--Commissioner (Appeals) and Tribunal not conducting proper enquiry--Addition by Assessing Officer could not be deleted--Matter remanded-- CIT v. Jansampark Advertising and Marketing P. Ltd.(Delhi) . . . 373

S. 80HH --Industrial undertaking--Special deduction--Special deduction under sections 80HH, 80-I and 80-IA--Condition precedent--Manufacture of article--Assembling of cassettes from finished components amounts to manufacture--Assessee entitled to special deductions-- CITv. Tony Electronics Ltd. (Delhi) . . . 431

S. 80-I --Industrial undertaking--Special deduction--Special deduction under sections 80HH, 80-I and 80-IA--Condition precedent--Manufacture of article--Assembling of cassettes from finished components amounts to manufacture--Assessee entitled to special deductions-- CITv. Tony Electronics Ltd. (Delhi) . . . 431

S. 80-IA --Industrial undertaking--Special deduction--Special deduction under sections 80HH, 80-I and 80-IA--Condition precedent--Manufacture of article--Assembling of cassettes from finished components amounts to manufacture--Assessee entitled to special deductions-- CITv. Tony Electronics Ltd. (Delhi) . . . 431

S. 80-IB --Housing project--Special deduction--Development of housing--Scope of section 80-IB(10)--Assessee undertaking housing projects allotted by Railway Welfare Organisation and Delhi Development Authority--Entitled to special deduction under section 80-IB(10)-- CITv. VRM India Ltd. (Delhi) . . . 414

S. 80-IB(10) --Housing project--Special deduction--Change of law with effect from April 1, 2005--Benefit restricted to cases where area utilised for shops and commercial establishments does not exceed 5 per cent. of aggregate built-up area of housing project or 2,000 sq. feet, whichever was less--Not to apply to projects where approval of local authority granted prior to April 1, 2005--Even if project completed thereafter-- CIT v. Sarkar Builders (SC). . . 392

S. 147 --Reassessment--Notice--Condition precedent--Reason to believe income has escaped assessment--Notice not stating that income had escaped assessment--Notice to verify details--Not valid-- Nivi Trading Ltd. v. Union of India (Bom) . . . 308

S. 148 --Reassessment--Notice--Condition precedent--Reason to believe income has escaped assessment--Notice not stating that income had escaped assessment--Notice to verify details--Not valid-- Nivi Trading Ltd. v. Union of India (Bom) . . . 308

S. 234B --Advance tax--Interest--Assessee following project completion method of accounting for its building projects--Assessee for earlier assessment year accepting that income derived from parking charges assessable--Assessee not filing return and not paying advance tax for parking charges--Interest payable by assessee-- Sudhir G. Borgaonkar v.Asst. CIT (Bom) . . . 322

S. 250 --Appeal to Commissioner (Appeals)--Powers of Commissioner (Appeals)--Power to conduct further inquiry-- CIT v. Jansampark Advertising and Marketing P. Ltd. (Delhi) . . . 373

 

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Posted by: CA RAJU SHAH <shahmars@hotmail.com>

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