List of benefits available for the members of ICAI.

List of benefits available for the members of ICAI.
1. Motor Insurance at discounted premium for members of ICAI: For details visit http://www.icai.org/post.html?post_id=9385
2. Health Insurance Scheme for Members of ICAI: For details visit http://www.icai.org/post.html?post_id=8061
3. ICAI has made an arrangement with Life Insurance Corporation of India facilitating a Special Group Term Insurance Scheme for the members & their spouse. For details visit http://www.icai.org/post.html?post_id=752
4. Householder's Insurance for Members of ICAI: For details visit http://www.icai.org/post.html?post_id=10631
5. ICAI initiative for the arrangement for Office Protection Shield Insurance at special premium for the Members in Practice/CA Firms. For details visit http://www.icai.org/post.html?post_id=10097
6. ICAI initiative for the arrangement of Specialised Loan for members of ICAI and Concessional Loan to lady members of ICAI. For details visit http://www.icai.org/post.html?post_id=10449
7. Antivirus software at Special price for Members & Students of ICAI: For details visit http://icai.org/post.html?post_id=11505
8. 'Handbook on Project Financing as an area of practice for Small and Medium Practitioners' :.For details visit http://www.icai.org/post.html?post_id=11371
9. ICAI initiative for creating a portal for Senior Members of ICAI www.seniormembers.icai.org . For details visit http://www.icai.org/post.html?post_id=11372
10. ICAI initiative for the publication of the book titled 'CA Professionals & SMEs in Make in India: A handbook for the Practitioners. For details visit http://www.icai.org/post.html?post_id=11370
11. Quick Insight 2014: For details visit http://www.icai.org/post.html?post_id=11366
12. ICAI initiative for Self-service portal  for resolving the professional queries for our members-ICAI Connect and e-Samadhan respectively-i ncludes features including My Profile, My Announcements, My Payments, My Articles, My Application Status, e-Services, My Firms, My Software(s), Letters & Certificates, CPE Hours, Guidelines of Networking, Merger & Demerger, etc. Empanelled professionals will answer the queries of our members on e-Samadhan portal. Members are required to log in to SSP and click on 'e-samadhan' to register their query. For details visit http://ssp.icai.org
13. ICAI-Tax Suite: A tax Compliance Software, ICAI ROC:MCA21Compliance Software, Billing & Accounting Software, ICAI-XBRLSoftware, Payroll Software.

Source icai.org- 
Ca pradeep k agrawal, Baroda

-Regards
CA. C. V. PAWAR

ITR Volume 375 : Part 1 (Issue dated : 6-7-2015)

 

INCOME TAX REPORTS (ITR)

ONLINE EDITION

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Non-resident --International transaction--Transfer pricing--General principles--Arm’s length price--US company subsidiary of Indian company--Loan by Indian company to its subsidiary--Interest calculated under comparable uncontrolled price method--Loan transaction in the year 2002-03--Rate of interest accepted in earlier and subsequent assessment years--Transfer Pricing Officer and Dispute Resolution Panel not questioning long-term transaction--Increase in rate of interest for assessment year 2007-08 not valid--Income-tax Act, 1961-- CIT v. Cotton Naturals (I.) Pvt. Ltd. (Delhi) . . . 1

Search and seizure --Block assessment--Undisclosed income--Assessment of third person--Sale of property--Assessee receiving amount--Books of account of purchaser showing fraction of amount disclosed as sale consideration--Department entitled to issue notice to determine whether such amount actually received by assessee and, if so, on whose behalf, and proceed further--Income-tax Act, 1961, s. 158BD-- CIT v. H. P. Goel (Delhi) . . . 29

 

PRINT EDITION

ITR Volume 375 : Part 1 (Issue dated : 6-7-2015)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Appeal to Appellate Tribunal --Limitation--Delay in filing appeal--Condonation of delay--No satisfactory explanation regarding delay--Delay could not be condoned--Income-tax Act, 1961-- Ajmeer Sherriff and Co. v. ITO (Mad) . . . 15

Business --Transactions in shares--Non-banking financial company--Whether business transactions or investments--Frequency of transaction not conclusive test--Evidence to show some transactions were business, some investment and some speculation--No fault found with evidence--Concurrent finding that transactions not business activity--Possible view--Income-tax Act, 1961-- CIT v. Merlin Holding P. Ltd. (Cal) . . . 118

Company --Dividend--Deemed dividend--Loan to shareholder by closely held company--Assessee owning 60 per cent. shares of company--Company possessing accumulated profits--Amounts taken as loan from company and payments also made to company--Assessing Officer directed to verify each debit entry and treat only excess as deemed dividend--Income-tax Act, 1961, s. 2(22)(e)-- Sunil Kapoor v. CIT (Mad) . . . 1

Deduction of tax at source --Interest--Chit fund--Amount paid by chit fund to its subscribers--Not interest--Tax not deductible at source on such interest--Income-tax Act, 1961, ss. 2(28A), 194A-- CIT v. Avenue Super Chits P. Ltd. (Karn) . . . 76

----Rent--Fees for technical services--Assessee distributing electricity to consumers--Public utility--Wheeling and transmission charges--Charge for permitting use of State transmission utility --Not equated to rent or fees for technical services--Tax not deductible at source--Income-tax Act, 1961, ss. 194-I, 194J-- CIT (TDS) v. Maharashtra State Electricity Distribution Co. Ltd. (Bom) . . . 23

Income deemed to accrue or arise in India --Wet-leasing aircraft to foreign company--Operational activities were abroad--Expenses towards maintenance and repairs were for purpose of earning abroad--Payments falling within the purview of exclusionary clause of section 9(1)(vii)(b)--Not chargeable to tax and not liable for deduction of tax at source--Income-tax Act, 1961, ss. 9(1)(vii)(b), 195-- Director of Income-tax v. Lufthansa Cargo India(Delhi) . . . 85

Income from house property --Annual letting value--Mode of determination--Income-tax Act, 1961-- Vimal R. Ambani v. Deputy CIT (Bom) . . . 66

Interpretation of taxing statutes --Rent--Contextual interpretation-- CIT (TDS) v. Maharashtra State Electricity Distribution Co. Ltd. (Bom) . . . 23

Non-resident --Income deemed to accrue or arise in India--Fees for technical services--Assessee acquiring aircrafts from non-resident company and wet-leasing them to a foreign company--Aircraft safe and airworthy--Certification of such component safety--Condition precedent--Component overhaul and maintenance--Level of technical expertise and ability required--Nature of these services technical services--Income-tax Act, 1961, s. 9(1)(vii)--Director of Income-tax v. Lufthansa Cargo India (Delhi) . . . 85

Precedent --Effect of decision of Supreme Court in Smt. Tarulata Shyam v. CIT [1977] 108 ITR 345 (SC)-- Sunil Kapoor v. CIT (Mad) . . . 1

Reassessment --Notice after four years--Conditions precedent--Reasons not showing any failure on part of assessee to disclose fully and truly all material facts--Notice based on assessment made in subsequent years--Notice to be set aside--Income-tax Act, 1961, ss. 147, 148-- State Bank of Patiala v. CIT (P&H) . . . 109

Recovery of tax --Private company--Recovery of tax from director of private company--Scope of section 179--Public company--No material to show attempt was made to pierce corporate veil--No notice to company regarding such investigation--Recovery proceedings against director not valid--Income-tax Act, 1961, s. 179-- Ajay S. Patel v. ITO (Guj) . . . 72

Revision --Commissioner--Powers--Financial corporation--Government banks--Assessing Officer granting deduction to assessee--Possible view--View fortified by decision of Tribunal accepted by Revenue--Principle of consistency--No occasion for Commissioner to revise that order--Income-tax Act, 1961, ss. 36(1)(viii), 263-- CIT v. State Bank of India (Bom) . . . 20

----Condition precedent--Order of Assessing Officer should be erroneous and prejudicial to Revenue--Assessing Officer failing to make necessary enquiry--Creditworthiness of alleged lenders not investigated--Revision of order--Justified--Income-tax Act, 1961, s. 263-- CIT v.Maithan International (Cal) . . . 123

Salary --Deduction of tax at source--Doctors working in hospital--Different terms and conditions under which various doctors rendered services--Terms and conditions must be examined in each case to determine character of payment received--Income-tax Act, 1961, s. 192-- CIT (TDS) v. Grant Medical Foundation (Ruby Hall Clinic) (Bom) . . . 49

Search and seizure --Block assessment--Undisclosed income--Unexplained investment--Effect of sections 132 and 69--Burden on assessee to prove source of income--No satisfactory explanation regarding investment--Addition of value of investment in total income of assessee--Justified--Income-tax Act, 1961, ss. 69, 132-- Hemant Kumar Ghosh v. Asst. CIT (Patna) . . . 79

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961 :

S. 2(22)(e) --Company--Dividend--Deemed dividend--Loan to shareholder by closely held company--Assessee owning 60 per cent. shares of company--Company possessing accumulated profits--Amounts taken as loan from company and payments also made to company--Assessing Officer directed to verify each debit entry and treat only excess as deemed dividend-- Sunil Kapoor v. CIT (Mad) . . . 1

S. 2(28A) --Deduction of tax at source--Interest--Chit fund--Amount paid by chit fund to its subscribers--Not interest--Tax not deductible at source on such interest-- CIT v. Avenue Super Chits P. Ltd. (Karn) . . . 76

S. 9(1)(vii) --Non-resident--Income deemed to accrue or arise in India--Fees for technical services--Assessee acquiring aircrafts from non-resident company and wet-leasing them to a foreign company--Aircraft safe and airworthy--Certification of such component safety--Condition precedent--Component overhaul and maintenance--Level of technical expertise and ability required--Nature of these services technical services-- Director of Income-tax v.Lufthansa Cargo India (Delhi) . . . 85

S. 9(1)(vii)(b) --Income deemed to accrue or arise in India--Wet-leasing aircraft to foreign company--Operational activities were abroad--Expenses towards maintenance and repairs were for purpose of earning abroad--Payments falling within the purview of exclusionary clause of section 9(1)(vii)(b)--Not chargeable to tax and not liable for deduction of tax at source-- Director of Income-tax v. Lufthansa Cargo India (Delhi) . . . 85

S. 36(1)(viii) --Revision--Commissioner--Powers--Financial corporation--Government banks--Assessing Officer granting deduction to assessee--Possible view--View fortified by decision of Tribunal accepted by Revenue--Principle of consistency--No occasion for Commissioner to revise that order-- CIT v. State Bank of India (Bom) . . . 20

S. 69 --Search and seizure--Block assessment--Undisclosed income--Unexplained investment--Effect of sections 132 and 69--Burden on assessee to prove source of income--No satisfactory explanation regarding investment--Addition of value of investment in total income of assessee--Justified-- Hemant Kumar Ghosh v. Asst. CIT (Patna) . . . 79

S. 132 --Search and seizure--Block assessment--Undisclosed income--Unexplained investment--Effect of sections 132 and 69--Burden on assessee to prove source of income--No satisfactory explanation regarding investment--Addition of value of investment in total income of assessee--Justified-- Hemant Kumar Ghosh v. Asst. CIT (Patna) . . . 79

S. 147 --Reassessment--Notice after four years--Conditions precedent--Reasons not showing any failure on part of assessee to disclose fully and truly all material facts--Notice based on assessment made in subsequent years--Notice to be set aside-- State Bank of Patiala v. CIT (P&H) . . . 109

S. 148 --Reassessment--Notice after four years--Conditions precedent--Reasons not showing any failure on part of assessee to disclose fully and truly all material facts--Notice based on assessment made in subsequent years--Notice to be set aside-- State Bank of Patiala v. CIT (P&H) . . . 109

S. 179 --Recovery of tax--Private company--Recovery of tax from director of private company--Scope of section 179--Public company--No material to show attempt was made to pierce corporate veil--No notice to company regarding such investigation--Recovery proceedings against director not valid-- Ajay S. Patel v. ITO (Guj) . . . 72

S. 192 --Salary--Deduction of tax at source--Doctors working in hospital--Different terms and conditions under which various doctors rendered services--Terms and conditions must be examined in each case to determine character of payment received-- CIT (TDS) v. Grant Medical Foundation (Ruby Hall Clinic) (Bom) . . . 49

S. 194A --Deduction of tax at source--Interest--Chit fund--Amount paid by chit fund to its subscribers--Not interest--Tax not deductible at source on such interest-- CIT v. Avenue Super Chits P. Ltd. (Karn) . . . 76

S. 194-I --Deduction of tax at source--Rent--Fees for technical services--Assessee distributing electricity to consumers--Public utility--Wheeling and transmission charges--Charge for permitting use of State transmission utility --Not equated to rent or fees for technical services--Tax not deductible at source-- CIT (TDS) v. Maharashtra State Electricity Distribution Co. Ltd. (Bom) . . . 23

S. 194J --Deduction of tax at source--Rent--Fees for technical services--Assessee distributing electricity to consumers--Public utility--Wheeling and transmission charges--Charge for permitting use of State transmission utility --Not equated to rent or fees for technical services--Tax not deductible at source-- CIT (TDS) v. Maharashtra State Electricity Distribution Co. Ltd. (Bom) . . . 23

S. 195 --Income deemed to accrue or arise in India--Wet-leasing aircraft to foreign company--Operational activities were abroad--Expenses towards maintenance and repairs were for purpose of earning abroad--Payments falling within the purview of exclusionary clause of section 9(1)(vii)(b)--Not chargeable to tax and not liable for deduction of tax at source--Director of Income-tax v. Lufthansa Cargo India (Delhi) . . . 85

S. 263 --Revision--Commissioner--Powers--Financial corporation--Government banks--Assessing Officer granting deduction to assessee--Possible view--View fortified by decision of Tribunal accepted by Revenue--Principle of consistency--No occasion for Commissioner to revise that order-- CIT v. State Bank of India (Bom) . . . 20

----Revision--Condition precedent--Order of Assessing Officer should be erroneous and prejudicial to Revenue--Assessing Officer failing to make necessary enquiry--Creditworthiness of alleged lenders not investigated--Revision of order--Justified-- CIT v.Maithan International (Cal) . . . 123

__,_._,___

Tax Dept to send OTP to link Aadhar with ITR:

Tax Dept to send OTP to link Aadhar with ITR:

In order to end the trouble of sending paper-based acknowledgement of e-filed Income Tax Returns (ITRs), the CBDT is planning to send a one-time password (OTP) on taxpayers' mobile phones which will be valid for 24-hours after getting verified from the Aadhaar database.

The department, a senior official said, has decided to usher these new protocols very soon as the new ITRs for the assessment year 2015-16 have recently been notified, heralding the onset of the tax filing season.

The deadline for filing ITRs is August 31. A senior official involved in the processes told PTI that the new ITRs will capture the Aadhaar number of an individual and after doing a 'back end' matching of the Aadhaar number with the mobile number and other vital personal data of the individual, an OTP will be generated and sent for validating and final submission of the return.

'The department will do the matching with the Aadhaar database where the biometrics and particulars of an individual are hosted. If the Aadhaar number and relevant details like PAN number and mobile number get kind of matched, then an OTP will be sent on the mobile which will be valid for 24 hours. So, once you have uploaded your return (ITR), there will be an icon showing validate your return and with that OTP you can do that,' the official explained.

The official said the department was currently thinking of having an OTP that will be 'alive or valid' for 24 hours so that a filer has time at hand to process the return at his or her end.

'There could be an option to generate a second OTP too but that is being worked out. After putting the OTP, you then don't need to send the ITR-V (paper acknowledgement). The problem of ITR-V will get resolved,' the official said.

The Central Board of Direct Taxes (CBDT), the apex policy making body of the tax department, has been getting a number complaints from taxpayers that despite they sending the hard copy of ITR-V by 'speed or registered post' their forms were being acknowledged by the CPC as 'not received' and hence the Board, for long, has been looking at options to do away with this syste

By automating the e-ITR filing with an OTP, the CBDT also wants to make this system fully 'paperless'.

'The Aadhaar-based authentication will give the e-filing of ITRs a legal sanction and hence the ITR-V system can be totally disposed off. However, providing Aadhaar is not mandatory and those taxpayers who do not have or who do not mention their Aadhaar, they will have to send their ITR-V by post as usual,' the official added.

The system of Aadhaar-based authentication is being extended by the tax department to 'low-risk category' of taxpayers like those in the salaried category.

As per existing rules, a person who files his or her tax return online, has to send a copy of the ITR-V to CPC within 120 days for processing of the return.

 

Check out 'FinApp for CA - CPT IPCC Final' - https://play.google.com/store/apps/details?id=com.sraoss.caapp

-Regards
CA. C. V. PAWAR

Imp Verdict On Power Of ITAT To Grant Stay Beyond 365 Days + CBDT Rule On Eligibility Of CAs To Be Authorized Representatives

 

Dear Subscriber,

DCIT vs. Vodafone Essar Gujarat Limited (Gujarat High Court)

S. 254(2A) third proviso cannot be interpreted to mean that extension of stay of demand should be denied beyond 365 days even when the assesseee is not at fault. ITAT should make efforts to decide stay granted appeals expeditiously

One cannot lost sight of the fact that there may be number of reasons due to which the learned Tribunal is not in a position to decide and dispose of the appeals within the maximum period of 365 days despite their best efforts. Some of the reasons due to which the learned Tribunal despite its best efforts is not in a position to dispose of the appeal/appeals at the earliest are stated herein above. There cannot be a legislative intent to punish a person/ assessee though there is no fault of the assessee and/or appellant

CBDT Notifies "Nature Of Business Relationship" That CA Can Have To Be Eligible To Act As "Authorized Representative"

Section 288 regulates the appearance by "authorized representatives" before any income-tax authority or the Appellate Tribunal. Sub-clause (viii) of the Explanation below s. 288(2), as amended by the Finance Act 2015, provides that a chartered accountant is eligible to be an "authorized representative" provided he is not "a person who, whether directly or indirectly, has business relationship with the assessee of such nature as may be prescribed". The CBDT has now issued a Notification dated 24.06.2015 to insert Rule 51A and to define the nature of "business relationship" which is covered by sub-clause (viii) of Explanation below sub-section (2) of section 288 of the Act.

Regards,

 

Editor,

 

itatonline.org

---------------------

Latest:

Transfer Order Of Hon'ble ITAT Member (June 2015 – II)

__._,_.___

ITAT Hauls Up CIT(A) For Defiance Of Its Order And Threatens Contempt Proceedings

 

Dear Subscriber,

DCIT vs. Sham Sunder Sharma (ITAT Chandigarh)

S. 250: Orders of the ITAT are binding on the lower authorities and should be followed unreservedly. Blatant failure to do so could attract contempt of court proceedings

It is a clear case of showing disrespect to the order of the Tribunal. Therefore, contempt proceedings could have been initiated against the CIT (A) for blatantly disobeying the order of the Tribunal. The Madhya Pradesh High Court in Agrawal Warehousing & Leasing Ltd. vs. CIT 257 ITR 235 held that the CIT (A) cannot refuse to follow the order of the Appellate Tribunal. The CIT (A) is a quasi – judicial authority and is subordinate in judicial hierarchy to the Tribunal. The orders passed by the Tribunal are binding on all the revenue authorities functioning under the jurisdiction of the Tribunal. The principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities

Bharat Heavy Electrical Ltd vs. ITO (TDS) (ITAT Delhi)

S. 253: Appeal in the ITAT can be filed against order of the CIT(A) on a stay application. Stay should be granted if relevant criteria of existence of prima facie arguable case, irreparable loss and financial position are not considered by the CIT(A)

Considering the fact that the issue on merits is yet to be decided by the CIT(A) and being of the view that the findings arrived at in para 5 have not taken into consideration the relevant criteria for deciding the issue namely the existence of prima facie arguable case in favour of assessee or not; irreparable loss if any and the financial position of the assessee etc. as no reference to these settled legal parameters is found mentioned in the order. It also seen that the merits of the order of the Assessing Officer till date have not been tested by any Appellate Authority. Thus, in these peculiar facts and circumstances, we direct the Revenue authorities from refraining to take any co-ercive action against the assessee till the passing of the order of the CIT(A) on merits

SPS Steel & Power Ltd vs. ACIT (ITAT Kolkata)

S. 271AAA: Law on what is "undisclosed income" and levy of penalty on the basis of a "dumb" document and surrender by the assessee explained

A charge can be levied on the basis of document only when the document is a speaking one. The document should speak either out of itself or in the company of other material found on investigation and/or in the search. The document should be clear and unambiguous in respect of all the four components of the charge of tax. If it is not so, the document is only a dumb document. No charge can be levied on the basis of a dumb document. A document found during the course of a search must be a speaking one and without any second interpretation, must reflect all the details about the transaction of the assessee in the relevant assessment year

STATEMENT OF SPECIAL BENCH CASES PENDING AS ON 22.06.2015

An up-to-date list of matters pending before the Special bench of the Tribunal is available for perusal.

Regards,

 

Editor,

 

itatonline.org

---------------------

Latest:

CBDT Orders For Promotion Of CCsIT & DGsIT To Pr. CCIT & Posting Orders

Judgments and Infomration [3 Attachments]

 

[Attachment(s) from Dipak Shah djshah1944@yahoo.com [SolapurCAs] included below]

..... spb projects consultancy ltd versus commissioner income tax chennai vi itat tri revision 263 assessee made provision doubtful debt not write off held details called assessing officer furnished accepted circumstances cannot lack enquiry though inadequate view above decision cit vs development bank 2010 tmi 161 bombay high court lacks jurisdiction section act revise assessment order hon'ble rajkiya nirman nigam 2013 7 176 allahabad books closed signed board directors adopted shareholders per compa .....

Revision u/s 263 - assessee has made only provision for doubtful debt and has not made a write off - Held that - The details called for by the Assessing Officer were furnished by the assessee and such details were accepted by the Assessing Officer and in such circumstances, it cannot be said that there is a lack of enquiry. There was an enquiry, though it is inadequate and in such circumstances, in view of the above decision of CIT Vs. Development Bank Ltd. (2010 (2) TMI 161 - BOMBAY HIGH COURT).......

Association of Road Transport V C I T I T A New Delhi

Scope of proviso to s. 2(15) restricting deduction for charitable institutions explained

(i) The expressions "trade", "commerce" and "business", as occurring in the first proviso to section 2(15) of the Act, must be read in the context of the intent and purport of section 2(15) of the Act and cannot be interpreted to mean any activity which is carried on in an organized manner. The purpose and the dominant object for which an institution carries on its activities is material to determine whether the same is business or not. The purport of the first proviso to section 2(15) of the Act is not to exclude entities which are essentially for charitable purpose but are conducting some activities for a consideration or a fee. The object of introducing the first proviso is to exclude organizations which are carrying on regular business from the scope of "charitable purpose". The expressions "business", "trade" or "commerce" as used in the first proviso must, thus, be interpreted restrictively and where the dominant object of an organization is charitable any incidental activity for furtherance of the object would not fall within the expressions "business", "trade" or "commerce".

(ii) After going through the objects and activities of the assessee association it is clear that the assessee association did not carry on any "business", "trade" or "commerce" with the main object of earning profit. The activity of imparting support services to State Road Transport Undertakings without any profit motive are being conducted in furtherance of the object for which assessee association had not constituted by the Government of India. The activities of providing laboratory test services and consultancy to the State Road Transport Undertakings of all over India cannot be held to be "trade", "business" or "commerce" merely because some fee or charges are being received by the assessee association. Accordingly, even if some fees or charges are being charged by the assessee association for providing laboratory test services and consultancy services in accordance with its charitable objects, the activities cannot be held to be rendered in relation to any "trade" , "commerce" or "business" as such activities are undertaken by the assessee association in furtherance of its main objects which are undisputedly of charitable nature and which is not an activity of "trade", "commerce" or "business" with main object of earning profit.

(iii) The first proviso to section 2(15) of the Act carves out and exception which excludes advancement of any object of general public utility from the scope of charitable purpose to the extent that it involves carrying on any activity in the nature of "Trade", "Commerce" or "business" or any activity of rendering certain services in relation to any "trade", "commerce" or "business" for a cess or fee or any other consideration, irrespective of the nature of the use or obligation or retention of income from such activity. Their lordship also held that the expression "trade", "commerce" or "business", as occurring in the first proviso of section 2(15) of the Act, must be read in the context of the intent in purported of Section 2(15) of the Act and cannot be interpreted to mean any activity which is carried on in an organized manner. Explaining the dominant of object of newly inserted proviso to section 2(15) of the Act, speaking for Jurisdictional High Court of Delhi, their lordship also held that the first proviso to section 2(15) of the act does not purported to exclude entities which are essentially for charitable purpose but are conducting some activities for a consideration or a fee and the object of introducing first proviso is to exclude organizations which are carrying on regular business from the scope of charitable purpose. It was also held that expression "business" "trade" or "commerce" as used in first proviso must, thus, we interpreted restrictively and where the dominant object and organization is charitable any incidental activity for furtherance of the object would not fall within the expression "business", "trade" or "commerce".

Related Judgements

1. National Horticulture Board vs. ACIT (ITAT Delhi) 
   Even in a situation in which an assessee receives a fees or consideration for rendition of a service to the business, trade or commerce, as long as such a service is subservient to the charitable cause and is not in the nature of business itself, the disability under second…
2. Indian Chamber of Commerce vs. ITO (ITAT Kolkata) 
   (i) The purpose for which the assessee association, i.e. The Indian Chamber of Commerce, was established is a charitable purpose within the meaning of S. 2(15) of the Act. The assessee is carrying out the said activities which are incidental…Read more ›
3. India Trade Promotion Organization vs. DGIT (E) (Delhi High Court) 
   The expression "charitable purpose", as defined in Section 2(15) cannot be construed literally and in absolute terms. It has to take colour and be considered in the context of Section 10(23C)(iv) of the said Act. It is also clear that if the literal interpretation is given to the proviso…
4. Delhi & District Cricket Association vs. DIT (E) (ITAT Delhi) 
   s.12AA(3) has no retrospective effect as it is neither explanatory nor clarificatory in nature and the CIT has no power to rescind the order passed by the CIT prior to 1st Oct.2004. For an assessee to be classified as charitable under the residuary category i.e. "advancement of any other…
5. Himachal Pradesh Environment vs. CIT (ITAT Chandigarh) 
   The fact that the assessee is a regulatory body does not mean it cannot pursue an 'object of general public utility' which qualifies to be a charitable activity u/s 2(15). The scope of the expression 'any other object of general public utility' is very wide, though it excludes objects…

__._,_.___

Attachment(s) from Dipak Shah djshah1944@yahoo.com [SolapurCAs] | View attachments on the web

3 of 3 File(s)

Association of Road Transport V C I T I T A T New Delhi ASTRU_Charity.pdf

Facets Polishing P Ltd V I T O I T A T Ahmedabad IT.docx

audit manual-sme-14-15.pdf

ITR (TRIB) Volume 40 : Part 5 (Issue dated : 29-6-2015)

 

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

PRINT EDITION

Volume 40 : Part 5 (Issue dated : 29-6-2015)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Appeal to Appellate Tribunal --Competency of appeal--Monetary ceiling limit--Instruction No. 5 of 2014 revising monetary limits--Applicable to pending cases--Tax effect less than prescribed limit--Appeal not maintainable--Instruction No. 5 of 2014 dated 10-7-2014--Income-tax Act, 1961, s. 268A-- ITO v. Bhupendra Singh Monga
(Delhi) . . . 749

Bad debts --Law after 1989--Assessee writing off debts in its books of account--Sufficient--Not necessary for assessee to establish debt became irrecoverable--Income-tax Act, 1961, ss. 36(1)(vii), (2)-- Asst. CIT v. Living Media India Ltd . 
(Delhi) . . . 610

Business expenditure --Interest on borrowed capital--Assessee making interest-free advances and investments to group concerns--Whether assessee entered into collaboration agreement due to restrictions imposed by Land Acquisition Act--No disallowance if amount advanced to group concerns for business expediency--Assessing Officer to examine issue afresh--Matter remanded--Income-tax Act, 1961, s. 36(1)(iii)-- DD Township Ltd . v. Dy. CIT(Delhi) . . . 642

Cash credits --Unexplained cash credits--Commissioner (Appeals) deleting addition based on documentary evidence produced by assessee--No infirmity in order of Commissioner (Appeals)--Income-tax Act, 1961, s. 68-- ITO v. Neelkanth Finbuild Ltd . 
(Delhi) . . . 665

Charitable purpose --Educational institution--Exemption--Grant of loan by assessee-society to sister-trust--Failure by Assessing Officer to show how assessee violated provisions of Act warranting rejection of exemption under section 10(23C)(iiiad)--Order set aside--Income-tax Act, 1961, s. 10(23C)(iiiad)-- Vairams Kindergarten Society v. CIT (Appeals) (Chennai) . . . 694

----Exemption--Assessee incurring development expenses on land gifted by trustees to trust by hiba (oral gift)--Subsequently land transferred to trust by way of gift deed--Trustees not beneficiaries and no violation under section 13(1)(c)--Trust entitled to exemption--Income-tax Act, 1961, s. 13(1)(c)(ii)-- Dy. DIT (Exemptions) III v. A. R. Rahman Foundation (Chennai) . . . 726

Charitable trust --Charitable purpose--Exemption--Assessee providing diagnostic services at minimum cost--No diversion of funds--Charging fees cannot be reason to deny exemption--Diagnostic services can be treated as medical relief--Entitled to deduction under section 11--Income-tax Act, 1961, ss. 2(15), 11, 12AA-- Lions Club of Anna Nagar Charitable Trust v.Dy. DIT (Exemptions-III) (Chennai) . . . 746

Exemption --Charitable purpose--Meaning of “charitable purpose†--Society set up by Government of India and disbursing subsidies--Society charging fees for processing subsidy applications--Not business activity--Society’s activities do not cease to be charitable--Society entitled to exemption--Income-tax Act, 1961, ss. 2(15), 10(23C)(iv)-- National Horticulture Board v. Asst. CIT (Delhi) . . . 710

Income --Expenditure in relation to income not includible in taxable income--Dividend--Computation of disallowance under section 14A read with rule 8D--Assessing Officer including investments on which no dividend received by assessee--Failure by Assessing Officer and Commissioner (Appeals) to consider facts of assessee’s case in right perspective--Assessing Officer to decide afresh--Matter remanded--Income-tax Act, 1961, s. 14A--Income-tax Rules, 1962, r. 8D-- Asst. CIT v. Living Media India Ltd. (Delhi) . . . 610

Interest on borrowed capital --Failure to establish that assessee advanced loan to sister concern only out of interest-bearing funds--Assessee furnishing details of interest-free funds and utilisation of entire secured loan for business purposes--Department cannot dictate assessee to conduct business affairs in particular manner--Disallowance not proper--Income-tax Act, 1961, s. 36(1)(iii)-- Dy. CIT v. Alliance Retreat P. Ltd. 
(Chennai) . . . 661

International transactions --Arm’s length price--Determination--Assessee adopting resale price method for determining arm’s length price for earlier years--Assessing Officer to adopt resale price method in line with earlier assessment years--Matter remanded--Income-tax Act, 1961, s. 92CA-- Granules India Ltd. v. Dy. CIT 
(Hyderabad) . . . 737

----Transfer pricing--Arm’s length price--Determination--Comparable uncontrolled price method--Condition precedent--Comparables must be brought on to benchmark price charged by assessee--Failure by Transfer Pricing Officer to find comparable under comparable uncontrolled price method--Price charged by assessee to be accepted--Adjustment made by Transfer Pricing Officer to be deleted--Income-tax Act, 1961, s. 92C--Income-tax Rules, 1962, r. 10B(1)(a)-- Triniti Advanced Software Labs P. Ltd. v. ITO (Hyderabad) . . . 701

Non-resident --Taxability in India--Double taxation avoidance--Provisions of Act or agreement more beneficial to assessee, applicable--Double taxation avoidance agreement providing for lower tax rate than prescribed under section 206AA of Act--Assessing Officer cannot invoke section 206AA of Act to insist tax be deducted at 20 per cent. on payment to non-resident--Income-tax Act, 1961, ss. 90(2), 206AA-- Dy. DIT (International Taxation-II) v.Serum Institute of India Ltd. (Pune) . . . 684

Penalty --Concealment of income--Assessing Officer initiating proceedings for concealing particulars of income and levying penalty for furnishing inaccurate particulars of income--Initiating proceedings for one default and levying penalty for another default not sustainable--Income-tax Act, 1961, s. 271(1)(c)-- Dharni Developers v. Asst. CIT 
(Mumbai) . . . 720

----Self-assessment tax--Non-payment of tax within stipulated period--Failure by Department to prove assessee had sufficient cash or bank balance to meet tax demand and whether any funds were diverted for non-business purposes--Penalty to be deleted--Income-tax Act, 1961, s. 221(1)-- Dy. CIT v. Aanjaneya Life Care Ltd. 
(Mumbai) . . . 691

Revision --Commissioner--Assessee furnishing various details regarding irrecoverable claims--Assessing Officer accepting claim of bad debts considering submissions and evidence produced by assessee--Not a case of lack of enquiry--Commissioner cannot invoke jurisdiction under section 263 to revise assessment order--Income-tax Act, 1961, s. 263-- SPB Projects and Consultancy Ltd. v. CIT (Chennai) . . . 648

----Commissioner--Charitable purpose--Exemption--Association of apex governing body of State road transport undertakings created by Government of India--Carrrying out test laboratory services and consultancy--Activities carried out with charitable purpose--No object to earn profits--Assessing Officer making reasonable inquiry--Notice under section 263 not sustainable--Exemption allowable on receipts from test laboratory charges and consultancy charges--Income-tax Act, 1961, ss. 2(15), 11, 263-- Association of State Road Transport Undertakings v. CIT (Delhi) . . . 622

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961 :

S. 2(15) --Charitable trust--Charitable purpose--Exemption--Assessee providing diagnostic services at minimum cost--No diversion of funds--Charging fees cannot be reason to deny exemption--Diagnostic services can be treated as medical relief--Entitled to deduction under section 11-- Lions Club of Anna Nagar Charitable Trust v. Dy. DIT (Exemptions-III)(Chennai) . . . 746

----Exemption--Charitable purpose--Meaning of “charitable purpose†--Society set up by Government of India and disbursing subsidies--Society charging fees for processing subsidy applications--Not business activity--Society’s activities do not cease to be charitable--Society entitled to exemption-- National Horticulture Board v. Asst. CIT (Delhi) . . . 710

----Revision--Commissioner--Charitable purpose--Exemption--Association of apex governing body of State road transport undertakings created by Government of India--Carrrying out test laboratory services and consultancy--Activities carried out with charitable purpose--No object to earn profits--Assessing Officer making reasonable inquiry--Notice under section 263 not sustainable--Exemption allowable on receipts from test laboratory charges and consultancy charges-- Association of State Road Transport Undertakings v. CIT (Delhi) . . . 622

S. 10(23C)(iiiad) --Charitable purpose--Educational institution--Exemption--Grant of loan by assessee-society to sister-trust--Failure by Assessing Officer to show how assessee violated provisions of Act warranting rejection of exemption under section 10(23C)(iiiad)--Order set aside-- Vairams Kindergarten Society v. CIT (Appeals)
(Chennai) . . . 694

S. 10(23C)(iv) --Exemption--Charitable purpose--Meaning of “charitable purpose†--Society set up by Government of India and disbursing subsidies--Society charging fees for processing subsidy applications--Not business activity--Society’s activities do not cease to be charitable--Society entitled to exemption-- National Horticulture Board v. Asst. CIT(Delhi) . . . 710

S. 11 --Charitable trust--Charitable purpose--Exemption--Assessee providing diagnostic services at minimum cost--No diversion of funds--Charging fees cannot be reason to deny exemption--Diagnostic services can be treated as medical relief--Entitled to deduction under section 11-- Lions Club of Anna Nagar Charitable Trust v. Dy. DIT (Exemptions-III)(Chennai) . . . 746

----Revision--Commissioner--Charitable purpose--Exemption--Association of apex governing body of State road transport undertakings created by Government of India--Carrrying out test laboratory services and consultancy--Activities carried out with charitable purpose--No object to earn profits--Assessing Officer making reasonable inquiry--Notice under section 263 not sustainable--Exemption allowable on receipts from test laboratory charges and consultancy charges-- Association of State Road Transport Undertakings v. CIT (Delhi) . . . 622

S. 12AA --Charitable trust--Charitable purpose--Exemption--Assessee providing diagnostic services at minimum cost--No diversion of funds--Charging fees cannot be reason to deny exemption--Diagnostic services can be treated as medical relief--Entitled to deduction under section 11-- Lions Club of Anna Nagar Charitable Trust v. Dy. DIT (Exemptions-III)(Chennai) . . . 746

S. 13(1)(c)(ii) --Charitable purpose--Exemption--Assessee incurring development expenses on land gifted by trustees to trust by hiba (oral gift)--Subsequently land transferred to trust by way of gift deed--Trustees not beneficiaries and no violation under section 13(1)(c)--Trust entitled to exemption-- Dy. DIT (Exemptions) III v. A. R. Rahman Foundation (Chennai) . . . 726

S. 14A --Income--Expenditure in relation to income not includible in taxable income--Dividend--Computation of disallowance under section 14A read with rule 8D--Assessing Officer including investments on which no dividend received by assessee--Failure by Assessing Officer and Commissioner (Appeals) to consider facts of assessee’s case in right perspective--Assessing Officer to decide afresh--Matter remanded-- Asst. CIT v. Living Media India Ltd . (Delhi) . . . 610

S. 36(1)(iii) --Business expenditure--Interest on borrowed capital--Assessee making interest-free advances and investments to group concerns--Whether assessee entered into collaboration agreement due to restrictions imposed by Land Acquisition Act--No disallowance if amount advanced to group concerns for business expediency--Assessing Officer to examine issue afresh--Matter remanded-- DD Township Ltd. v. Dy. CIT 
(Delhi) . . . 642

----Interest on borrowed capital--Failure to establish that assessee advanced loan to sister concern only out of interest-bearing funds--Assessee furnishing details of interest-free funds and utilisation of entire secured loan for business purposes--Department cannot dictate assessee to conduct business affairs in particular manner--Disallowance not proper-- Dy. CIT v. Alliance Retreat P. Ltd. (Chennai) . . . 661

S. 36(1)(vii) --Bad debts--Law after 1989--Assessee writing off debts in its books of account--Sufficient--Not necessary for assessee to establish debt became irrecoverable--Asst. CIT v. Living Media India Ltd. (Delhi) . . . 610

S. 36(2) --Bad debts--Law after 1989--Assessee writing off debts in its books of account--Sufficient--Not necessary for assessee to establish debt became irrecoverable-- Asst. CITv. Living Media India Ltd. (Delhi) . . . 610

S. 68 --Cash credits--Unexplained cash credits--Commissioner (Appeals) deleting addition based on documentary evidence produced by assessee--No infirmity in order of Commissioner (Appeals)-- ITO v. Neelkanth Finbuild Ltd. (Delhi) . . . 665

S. 90(2) --Non-resident--Taxability in India--Double taxation avoidance--Provisions of Act or agreement more beneficial to assessee, applicable--Double taxation avoidance agreement providing for lower tax rate than prescribed under section 206AA of Act--Assessing Officer cannot invoke section 206AA of Act to insist tax be deducted at 20 per cent. on payment to non-resident-- Dy. DIT (International Taxation-II) v. Serum Institute of India Ltd. (Pune) . . . 684

S. 92C --International transactions--Transfer pricing--Arm’s length price--Determination--Comparable uncontrolled price method--Condition precedent--Comparables must be brought on to benchmark price charged by assessee--Failure by Transfer Pricing Officer to find comparable under comparable uncontrolled price method--Price charged by assessee to be accepted--Adjustment made by Transfer Pricing Officer to be deleted-- Triniti Advanced Software Labs P. Ltd. v. ITO
(Hyderabad) . . . 701

S. 92CA --International transactions--Arm’s length price--Determination--Assessee adopting resale price method for determining arm’s length price for earlier years--Assessing Officer to adopt resale price method in line with earlier assessment years--Matter remanded-- Granules India Ltd . v. Dy. CIT (Hyderabad) . . . 737

S. 206AA --Non-resident--Taxability in India--Double taxation avoidance--Provisions of Act or agreement more beneficial to assessee, applicable--Double taxation avoidance agreement providing for lower tax rate than prescribed under section 206AA of Act--Assessing Officer cannot invoke section 206AA of Act to insist tax be deducted at 20 per cent. on payment to non-resident-- Dy. DIT (International Taxation-II) v. Serum Institute of India Ltd. (Pune) . . . 684

S. 221(1) --Penalty--Self-assessment tax--Non-payment of tax within stipulated period--Failure by Department to prove assessee had sufficient cash or bank balance to meet tax demand and whether any funds were diverted for non-business purposes--Penalty to be deleted-- Dy. CIT v. Aanjaneya Life Care Ltd. (Mumbai) . . . 691

S. 263 --Revision--Commissioner--Assessee furnishing various details regarding irrecoverable claims--Assessing Officer accepting claim of bad debts considering submissions and evidence produced by assessee--Not a case of lack of enquiry--Commissioner cannot invoke jurisdiction under section 263 to revise assessment order-- SPB Projects and Consultancy Ltd. v. CIT (Chennai) . . . 648

----Revision--Commissioner--Charitable purpose--Exemption--Association of apex governing body of State road transport undertakings created by Government of India--Carrrying out test laboratory services and consultancy--Activities carried out with charitable purpose--No object to earn profits--Assessing Officer making reasonable inquiry--Notice under section 263 not sustainable--Exemption allowable on receipts from test laboratory charges and consultancy charges-- Association of State Road Transport Undertakings v. CIT (Delhi) . . . 622

S. 268A --Appeal to Appellate Tribunal--Competency of appeal--Monetary ceiling limit--Instruction No. 5 of 2014 revising monetary limits--Applicable to pending cases--Tax effect less than prescribed limit--Appeal not maintainable--Instruction No. 5 of 2014 dated 10-7-2014-- ITO v. Bhupendra Singh Monga (Delhi) . . . 749

S. 271(1)(c) --Penalty--Concealment of income--Assessing Officer initiating proceedings for concealing particulars of income and levying penalty for furnishing inaccurate particulars of income--Initiating proceedings for one default and levying for another default not sustainable-- Dharni Developers v. Asst. CIT
(Mumbai) . . . 720

Income-tax Rules, 1962 :

R. 8D --Income--Expenditure in relation to income not includible in taxable income--Dividend--Computation of disallowance under section 14A read with rule 8D--Assessing Officer including investments on which no dividend received by assessee--Failure by Assessing Officer and Commissioner (Appeals) to consider facts of assessee’s case in right perspective--Assessing Officer to decide afresh--Matter remanded-- Asst. CIT v. Living Media India Ltd . (Delhi) . . . 610

R. 10B(1)(a) --International transactions--Transfer pricing--Arm’s length price--Determination--Comparable uncontrolled price method--Condition precedent--Comparables must be brought on to benchmark price charged by assessee--Failure by Transfer Pricing Officer to find comparable under comparable uncontrolled price method--Price charged by assessee to be accepted--Adjustment made by Transfer Pricing Officer to be deleted--Triniti Advanced Software Labs P. Ltd. v. ITO 
(Hyderabad) . . . 701

 

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