ITR VOL 322 PART 4

 

INCOME TAX REPORTS (ITR)

Volume 322 : Part 4 (Issue dated 19-4-2010)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

SUPREME COURT

Salary --Deduction--Overriding charge--Foreign company--Expatriate employees in India--Emoluments subject to deduction of tax under Japanese law and tax liability borne by employer--Citizen tax under Japanese law--Whether ought to be included in salary for purposes of Indian tax--To be decided only after ascertaining whether in Japanese law citizen tax constituted an overriding charge--Income-tax Act, 1961, s. 15-- CIT v. NHK Japan Broadcasting Corporation . . . 628

HIGH COURTS

Business expenditure --Deduction on actual payment--Where excise duty loaded on closing stock of year in question opening stock of succeeding year to be reduced so as to avoid double deduction--Direction to Assessing Officer to verify--Income-tax Act, 1961, s. 43B-- Jay Bharat Maruti Ltd. v. CIT (Delhi) . . . 599
----Deduction only on actual payment--Contribution to gratuity fund after close of previous year but before filing return--Amount could not be disallowed--Income-tax Act, 1961, s. 43B-- CIT v. Kovilpatti Lakshmi Roller Flour Mills Ltd . (Mad) . . . 517
----Deduction only on actual payment--Electricity duty payable to Government--Section 43B applicable--Income-tax Act, 1961, s. 43B-- CIT v. Gujarat Urja Vikas Nigam Ltd. (Guj) . . . 539
----Payments to police personnel and rowdies to ensure security of business premises--Payments not legal--Not deductible--Income-tax Act, 1961, s. 37-- CIT v. Neelavathi (Karn) . . . 643
Capital gains --Sale of land by assessee running brick-klin--Assessing Officer holding profits income from business by treating sale as adventure in the nature of trade--Commissioner (Appeals) as well as Tribunal holding that business of assessee not purchase and sale of land and income covered under capital gains--Findings of fact--Income-tax Act 1961, s. 45-- CIT v. Raj Bricks Industry (P&H) . . . 625
Capital or revenue expenditure --Expenditure on replacement of machinery--Matter remanded to find nature of expenditure--Income-tax Act, 1961-- CIT v. Kovilpatti Lakshmi Roller Flour Mills Ltd . (Mad) . . . 517
----Replacement of assets--Old machine replaced by new machine--Whether constitutes advantage of an enduring nature--No details whether production capacity increased thereby--Matter remanded to Commissioner (Appeals) for consideration in accordance with Supreme Court judgment--Income-tax Act, 1961, s. 37-- CIT v. Madurantakam Co-operative Sugar Mills Ltd. (Mad) . . . 508
----Travelling expenses--Expenditure directly connected with purchase of plant and machinery--Is capital expenditure--Income-tax Act, 1961-- Jay Bharat Maruti Ltd. v. CIT (Delhi) . . . 599
Chief Commissioner --Powers--Refund and interest payable to assessee consequent upon order in appeal--Chief Commissioner has no power to deny interest on ground of delay in filing revised return--Income-tax Act, 1961, s. 119-- S. Thigarajan v. Asst. CIT (Karn) . . . 581
Company --Book profits--Computation--Assessee generating power and using such power in its industrial units--Profits attributable to generation of power--Deductible--Income-tax Act, 1961, ss. 2(13), 115JA-- CIT v. DCM Sriram Consolidated Ltd. (Delhi) . . . 486
Co-operative society --Special deduction--Interest received from members of society--Non-availability of details for availing of exemption--Matter remanded to Tribunal for consideration in accordance with Supreme Court judgment--Income-tax Act, 1961, s. 80P(2)(a)(i)-- CIT v. Madurantakam Co-operative Sugar Mills Ltd . (Mad) . . . 508
Current repairs --Assessing Officer disallowing expenditure on presumption that part of building demolished and new structure erected--Finding by Tribunal that expenditure incurred for repairs and assessee did not bring into existence any new asset over and above existing building--Findings of fact--Income-tax Act, 1961, s. 31(i)-- CIT v. Delhi Press Samachar Patra P. Ltd.  (Delhi) . . . 590
Deduction of tax at source --Works contract--Assessee engaging trucks for transportation of goods--Single payment not exceeding Rs. 20,000--No contract between assessee and transporters for carriage of goods--Assessee not liable to deduct tax at source--Income-tax Act, 1961, ss. 194C, 201(1), (1A)-- CIT v. United Rice Land Limited (P&H) . . . 594
Depreciation --Block of assets--Law applicable--Effect of amendment of Rules with effect from assessment year 1988-89--Block of assets entitled to depreciation--Individual items in block cannot be investigated--Income-tax Act, 1961--Income-tax Rules, 1962, Appendix I-- CIT v. Sonal Gum Industries (Guj) . . . 542
Export --Special deduction under section 80-I--Interest on letters of credit, bank guarantee, deposits in Kisan Vikas Patras and intercorporate deposits--Finding that assessee not entitled to deduction--Proper--Income-tax Act, 1961, s. 80-I-- Jay Bharat Maruti Ltd. v. CIT (Delhi) . . . 599
Film production --Books of account--Deduction not to be allowed unless amount realised credited in books of account maintained by film producer--Claim for deduction of expenditure on basis of pass book of bank account--Pass book maintained by bank not books of account--Assessee not entitled to claim deduction--Income-tax Rules, 1962, r. 9A-- L. N. Poddar v. ITAT  (Patna) . . . 513
----Deduction--Effect of rule 9A(5)--Maintenance of books of account mandatory for seeking deduction--Income-tax Rules, 1962, r. 9A(5)-- L. N. Poddar v. ITAT (Patna) . . . 513
Income or capital --Amounts received as compensation for infringement of copyright--Amount received not towards loss of capital but as compensation towards loss of income--Amounts credited in profit and loss account--Amount received revenue receipt--Income-tax Act, 1961-- CIT v. Eastern Book Company (All) . . . 605
Investment allowance --Allowance on photo-composing machine--Firm engaged in production/manufacturing activity within purview of section 32A--Income-tax Act, 1961, s. 32A-- CIT v. Eastern Book Company (All) . . . 605
New industrial undertaking --Special deduction--Commencement of trial production does not amount to commercial production--Period of exemption starts from year of commencement of commercial production--Income-tax Act, 1961, ss. 80-IA, 80-IB-- CIT v. Nestor Pharmaceuticals Limited  (Delhi) . . . 631
----Special deduction--Sale of one water cooler and air-conditioner for purposes of obtaining registration under Excise and Sales tax Act--Quantum of commercial sale immaterial--Amounts to regular production not trial production--Period of exemption starts in year of sale--Income-tax Act, 1961, ss. 80-IA, 80-IB-- CIT v. Nestor Pharmaceuticals Limited (Delhi) . . . 631
Penalty --Concealment of income--Penalty on basis of additions to returned income--Additions deleted in quantum proceedings--Penalty could not be imposed--Income-tax Act, 1961, s. 271(1)(c)-- CIT v. Parkash Industries Limited (P&H) . . . 622
Reassessment --Capital gains--Compulsory acquisition of land when gains taxable--Amendment providing for levy of tax on receipt of initial compensation--Prior to amendment taxable in assessment year relevant to previous year in which transfer took place--Income on capital gain not disclosed either in accordance with unamended provisions or with amended provision--Reassessment valid--Assessing Officer to follow law in force as on date of initiation of proceedings--Income-tax Act, 1961, s. 147-- CIT v. C. V. Jayachandran (Ker) . . . 520
----Conditions precedent--Reason to believe that income had escaped assessment--Search and seizure--Retraction of statements made by assessee during search--Notice under section 148--No sufficient reasons for reopening of assessments--Income-tax Act, 1961, ss. 132(4), 147, 148-- CIT v. Dr. N. Thippa Setty (Karn) . . . 525
----Notice--Assessee an anaesthetist doctor--Assessee not maintaining any books of account--Reassessment based on information collected from hospitals--Reopening of assessment valid--Income-tax Act, 1961, s. 147-- CIT v. Dr. Sadique Ummer (Ker) . . . 602
Rectification of mistake --Business expenditure--Deduction only on actual payment--Amount actually paid wrongly disallowed under section 43B--Assessment order to be rectified and deduction given--Income-tax Act, 1961, ss. 43B, 143(1)(a), (1A), 154-- CIT v. Mayflower Hotels P. Ltd . (Ker) . . . 523
Refund --Appeal--Refund payable consequent on appeal--Application not necessary for obtaining refund--Assessee entitled to interest on refund--Income-tax Act, 1961, ss. 240, 244A-- S. Thigarajan v. Asst. CIT  (Karn) . . . 581
----Perquisites--Employees stock option--Deduction of tax at source--Employer paying tax with interest and recovering from employees--Perquisite value of stock option held not taxable in appeal--Employee entitled to refund with interest--Income-tax Act, 1961-- Smt. Ramaa Sivaram v. Chief CIT  (Mad) . . . 586
Salary --Perquisites--Valuation of accommodation provided by employer--Rule prescribing different rates where employer is Government and other employers--Government employee on deputation to BSNL controlled by Government--Accommodation provided by BSNL--Valuation of accommodation not as government employee--Income-tax Act, 1961, s. 17--Income-tax Rules 1962, r. 3-- S. Sthanukumaran Thampi v. CBDT (Ker) . . . 503
Search and seizure --Block assessment--Undisclosed income--Return filed after search showing income after deduction of tax at source, advance tax and self-assessment tax--Amounts already disclosed cannot be treated as undisclosed income--Income-tax Act, 1961, s. 158BB-- CIT v. Kerala Roadways Ltd. (Mad) . . . 609
----Block assessment--Undisclosed income--Section 147/148 applicable to assessment for block period made under Chapter XIV-B of Act--Failure to issue notice under section 148--Tribunal deleting addition--Proper--Income-tax Act, 1961, ss. 147, 148, 153, Chap. XIV-B-- CIT v. Peerchand Ratanlal Baid (HUF) (Gauhati) . . . 544
Settlement of cases --Powers of Settlement Commission--Settlement Commission bound by statutory provisions--Capital gains--Computation of long-term capital gains--Settlement Commission cannot allow set-off of carried forward loss--Interest on borrowals could be deducted--Income-tax Act, 1961, s. 158BB(4) -- CIT v. Settlement Commission (IT & WT) (Ker) . . . 578
Words and phrases --"Business"-- CIT v. DCM Sriram Consolidated Ltd.  (Delhi) . . . 486

AUTHORITY FOR ADVANCE RULINGS

Deduction of tax at source --Co-ordination fees covered by a single invoice--Applicant bound to deduct at source--Income-tax Act, 1961, s. 195-- ABB Ltd. , In re . . . 564
Non-resident --Basic research and development--Indian company part of ABB group operating in 100 countries--All policy of ABB group co-ordinated through non-resident--Participating parties entering into cost contribution agreement--Participating ABB entities allowed royalty-free access to research results including intellectual property rights--Co-ordination fee payable to non-resident--Not "fees for technical services"--Non-resident using contribution to reduce overall cost--Non-resident not liable to tax in India--Agreement Between India and the Swiss Federation for Avoidance of Double Taxation, arts. 5, 7, 12(4)--Income-tax Act, 1961, s. 2(24)-- ABB Ltd. , In re . . . 564
----Manufacture and sale of hard disk drives--Stocking disks in India with independent service providers to deliver on just-in-time basis--Independent service providers to clear goods from customs and store in bonded warehouses--When demand made independent service providers to deliver to original equipment manufacturers when required--Permanent establishment established--Agreement for the Avoidance of Double Taxation Between India and Singapore, arts. 5(1), (8), 7-- Seagate Singapore International Headquarters P. Ltd. , In re . . . 650
----Marine geophysical company--Conducting seismic survey and providing off shore data--Income how computed--Only under section 44BB--Not in the nature of "royalty" or "fees for technical services"--Income-tax Act, 1961, ss. 9(1)(vii), 44BB--Agreement for the Avoidance of Double Taxation Between India and Norway, art. 13-- Wavefield Inseis ASA , In re . . . 645
----Purchase for purpose of export--Subsidiary company--Procurement support activities to parent company--Subsidiary company to establish office in India--Indian office not to undertake other business and funded entirely by reimbursements from head office outside India--Liable to tax in India in respect of support services rendered in India--Support services do not amount to export--Income-tax Act, 1961, ss. 5(2), 9(1)(i), Expln. (1)(b)-- Aramco Overseas Company BV, In re . . . 612
----UK company--Providing information regarding recruitment of India based candidates--Referring potential Indian clients to third party based in India--No permanent establishment in India--Income received from Indian clients--Not fees for "technical services"--Not taxable business profits--Agreement for the Avoidance of Double Taxation Between India and the UK, arts. 7, 13(4)(a)--Income-tax Act, 1961, s. 195-- Real Resourcing Ltd. , In re . . . 558

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Agreement for the Avoidance of Double Taxation Between India and Norway :
Art. 13 --Non-resident--Marine geophysical company--Conducting seismic survey and providing off shore data--Income how computed--Only under section 44BB--Not in the nature of "royalty" or "fees for technical services"-- Wavefield Inseis ASA , In re (AAR) . . . 645
Agreement for the Avoidance of Double Taxation Between India and Singapore :
Arts. 5(1), (8), 7 --Non-resident--Manufacture and sale of hard disk drives--Stocking disks in India with independent service providers to deliver on just-in-time basis--Independent service providers to clear goods from customs and store in bonded warehouses--When demand made independent service providers to deliver to original equipment manufacturers when required--Permanent establishment established-- Seagate Singapore International Headquarters P. Ltd. , In re (AAR) . . . 650
Agreement Between India and the Swiss Federation for Avoidance of Double Taxation :
Art. 5, 7, 12(4) --Non-resident--Basic research and development--Indian company part of ABB group operating in 100 countries--All policy of ABB group co-ordinated through non-resident--Participating parties entering into cost contribution agreement--Participating ABB entities allowed royalty-free access to research results including intellectual property rights--Co-ordination fee payable to non-resident--Not "fees for technical services"--Non-resident using contribution to reduce overall cost--Non-resident not liable to tax in India-- ABB Ltd. , In re (AAR) . . . 564
Agreement for the Avoidance of Double Taxation Between India and the UK :
Arts. 7, 13(4)(a) --Non-resident--UK company--Providing information regarding recruitment of India based candidates--Referring potential Indian clients to third party based in India--No permanent establishment in India--Income received from Indian clients--Not fees for "technical services"--Not taxable business profits-- Real Resourcing Ltd. , In re (AAR) . . . 558
Income-tax Act, 1961 :
S. 2(13) --Company--Book profits--Computation--Assessee generating power and using such power in its industrial units--Profits attributable to generation of power--Deductible-- CIT v. DCM Sriram Consolidated Ltd.
(Delhi) . . . 486
S. 2(24) --Non-resident--Basic research and development--Indian company part of ABB group operating in 100 countries--All policy of ABB group co-ordinated through non-resident--Participating parties entering into cost contribution agreement--Participating ABB entities allowed royalty-free access to research results including intellectual property rights--Co-ordination fee payable to non-resident--Not "fees for technical services"--Non-resident using contribution to reduce overall cost--Non-resident not liable to tax in India-- ABB Ltd. , In re
(AAR) . . . 564
S. 5(2) --Non-resident--Purchase for purpose of export--Subsidiary company--Procurement support activities to parent company--Subsidiary company to establish office in India--Indian office not to undertake other business and funded entirely by reimbursements from head office outside India--Liable to tax in India in respect of support services rendered in India--Support services do not amount to export-- Aramco Overseas Company BV, In re (AAR) . . . 612
S. 9(1)(i), Expln. (1)(b) --Non-resident--Purchase for purpose of export--Subsidiary company--Procurement support activities to parent company--Subsidiary company to establish office in India--Indian office not to undertake other business and funded entirely by reimbursements from head office outside India--Liable to tax in India in respect of support services rendered in India--Support services do not amount to export-- Aramco Overseas Company BV, In re
(AAR) . . . 612
S. 9(1)(vii) --Non-resident--Marine geophysical company--Conducting seismic survey and providing off shore data--Income how computed--Only under section 44BB--Not in the nature of "royalty" or "fees for technical services"-- Wavefield Inseis ASA , In re (AAR) . . . 645
S. 15 --Salary--Deduction--Overriding charge--Foreign company--Expatriate employees in India--Emoluments subject to deduction of tax under Japanese law and tax liability borne by employer--Citizen tax under Japanese law--Whether ought to be included in salary for purposes of Indian tax--To be decided only after ascertaining whether in Japanese law citizen tax constituted an overriding charge-- CIT v. NHK Japan Broadcasting Corporation (SC) . . . 628
S. 17 --Salary--Perquisites--Valuation of accommodation provided by employer--Rule prescribing different rates where employer is Government and other employers--Government employee on deputation to BSNL controlled by Government--Accommodation provided by BSNL--Valuation of accommodation not as government employee-- S. Sthanukumaran Thampi v. CBDT (Ker) . . . 503
S. 31(i) --Current repairs--Assessing Officer disallowing expenditure on presumption that part of building demolished and new structure erected--Finding by Tribunal that expenditure incurred for repairs and assessee did not bring into existence any new asset over and above existing building--Findings of fact-- CIT v. Delhi Press Samachar Patra P. Ltd. (Delhi) . . . 590
S. 32A --Investment allowance--Allowance on photo-composing machine--Firm engaged in production/manufacturing activity within purview of section 32A-- CIT v. Eastern Book Company (All) . . . 605
S. 37 --Business expenditure--Payments to police personnel and rowdies to ensure security of business premises--Payments not legal--Not deductible-- CIT v. Neelavathi (Karn) . . . 643
----Capital or revenue expenditure--Replacement of assets--Old machine replaced by new machine--Whether constitutes advantage of an enduring nature--No details whether production capacity increased thereby--Matter remanded to Commissioner (Appeals) for consideration in accordance with Supreme Court judgment-- CIT v. Madurantakam Co-operative Sugar Mills Ltd. (Mad) . . . 508
S. 43B --Business expenditure--Deduction on actual payment--Where excise duty loaded on closing stock of year in question opening stock of succeeding year to be reduced so as to avoid double deduction--Direction to Assessing Officer to verify-- Jay Bharat Maruti Ltd. v. CIT (Delhi) . . . 599
----Business expenditure--Deduction only on actual payment--Contribution to gratuity fund after close of previous year but before filing return--Amount could not be disallowed-- CIT v. Kovilpatti Lakshmi Roller Flour Mills Ltd .(Mad) . . . 517
----Business expenditure--Deduction only on actual payment--Electricity duty payable to Government--Section 43B applicable-- CIT v. Gujarat Urja Vikas Nigam Ltd. (Guj) . . . 539
----Rectification of mistake--Business expenditure--Deduction only on actual payment--Amount actually paid wrongly disallowed under section 43B--Assessment order to be rectified and deduction given-- CIT v. Mayflower Hotels P. Ltd . (Ker) . . . 523
S. 44BB --Non-resident--Marine geophysical company--Conducting seismic survey and providing off shore data--Income how computed--Only under section 44BB--Not in the nature of "royalty" or "fees for technical services"-- Wavefield Inseis ASA , In re (AAR) . . . 645
S. 45 --Capital gains--Sale of land by assessee running brick kiln--Assessing Officer holding profits income from business by treating sale as adventure in the nature of trade--Commissioner (Appeals) as well as Tribunal holding that business of assessee not purchase and sale of land and income covered under capital gains--Findings of fact-- CIT v. Raj Bricks Industry (P&H) . . . 625
S. 80-I --Export--Special deduction under section 80-I--Interest on letters of credit, bank guarantee, deposits in Kisan Vikas Patras and intercorporate deposits--Finding that assessee not entitled to deduction--Proper-- Jay Bharat Maruti Ltd. v. CIT (Delhi) . . . 599
S. 80-IA --New industrial undertaking--Special deduction--Commencement of trial production does not amount to commercial production--Period of exemption starts from year of commencement of commercial production-- CIT v. Nestor Pharmaceuticals Limited (Delhi) . . . 631
----New industrial undertaking--Special deduction--Sale of one water cooler and air-conditioner for purposes of obtaining registration under Excise and Sales Tax Act--Quantum of commercial sale immaterial--Amounts to regular production not trial production--Period of exemption starts in year of sale-- CIT v. Nestor Pharmaceuticals Limited (Delhi) . . . 631
S. 80-IB --New industrial undertaking--Special deduction--Commencement of trial production does not amount to commercial production--Period of exemption starts from year of commencement of commercial production-- CIT v. Nestor Pharmaceuticals Limited (Delhi) . . . 631
----New industrial undertaking--Special deduction--Sale of one water cooler and air-conditioner for purposes of obtaining registration under Excise and Sales Tax Act--Quantum of commercial sale immaterial--Amounts to regular production not trial production--Period of exemption starts in year of sale-- CIT v. Nestor Pharmaceuticals Limited (Delhi) . . . 631
S. 80P(2)(a)(i) --Co-operative society--Special deduction--Interest received from members of society--Non-availability of details for availing of exemption--Matter remanded to Tribunal for consideration in accordance with Supreme Court judgment-- CIT v. Madurantakam Co-operative Sugar Mills Ltd . (Mad) . . . 508
S. 115JA --Company--Book profits--Computation--Assessee generating power and using such power in its industrial units--Profits attributable to generation of power--Deductible-- CIT v. DCM Sriram Consolidated Ltd. (Delhi) . . . 486
S. 119 --Chief Commissioner--Powers--Refund and interest payable to assessee consequent upon order in appeal--Chief Commissioner has no power to deny interest on ground of delay in filing revised return-- S. Thigarajan v. Asst. CIT (Karn) . . . 581
S. 132(4) --Reassessment--Conditions precedent--Reason to believe that income had escaped assessment--Search and seizure--Retraction of statements made by assessee during search--Notice under section 148--No sufficient reasons for reopening of assessments-- CIT v. Dr. N. Thippa Setty (Karn) . . . 525
S. 143(1)(a) --Rectification of mistake--Business expenditure--Deduction only on actual payment--Amount actually paid wrongly disallowed under section 43B--Assessment order to be rectified and deduction given-- CIT v. Mayflower Hotels P. Ltd . (Ker) . . . 523
S. 143(1A) --Rectification of mistake--Business expenditure--Deduction only on actual payment--Amount actually paid wrongly disallowed under section 43B--Assessment order to be rectified and deduction given-- CIT v. Mayflower Hotels P. Ltd . (Ker) . . . 523
S. 147 --Reassessment--Capital gains--Compulsory acquisition of land when gains taxable--Amendment providing for levy of tax on receipt of initial compensation--Prior to amendment taxable in assessment year relevant to previous year in which transfer took place--Income on capital gain not disclosed either in accordance with unamended provisions or with amended provision--Reassessment valid--Assessing Officer to follow law in force as on date of initiation of proceedings-- CIT v. C. V. Jayachandran (Ker) . . . 520
----Reassessment--Conditions precedent--Reason to believe that income had escaped assessment--Search and seizure--Retraction of statements made by assessee during search--Notice under section 148--No sufficient reasons for reopening of assessments-- CIT v. Dr. N. Thippa Setty (Karn) . . . 525
----Reassessment--Notice--Assessee an anaesthetist doctor--Assessee not maintaining any books of account--Reassessment based on information collected from hospitals--Reopening of assessment valid-- CIT v. Dr. Sadique Ummer (Ker) . . . 602
----Search and seizure--Block assessment--Undisclosed income--Section 147/148 applicable to assessment for block period made under Chapter XIV-B of Act--Failure to issue notice under section 148--Tribunal deleting addition--Proper-- CIT v. Peerchand Ratanlal Baid (HUF) (Gauhati) . . . 544
S. 148 --Reassessment--Conditions precedent--Reason to believe that income had escaped assessment--Search and seizure--Retraction of statements made by assessee during search--Notice under section 148--No sufficient reasons for reopening of assessments-- CIT v. Dr. N. Thippa Setty (Karn) . . . 525
----Search and seizure--Block assessment--Undisclosed income--Section 147/148 applicable to assessment for block period made under Chapter XIV-B of Act--Failure to issue notice under section 148--Tribunal deleting addition--Proper-- CIT v. Peerchand Ratanlal Baid (HUF) (Gauhati) . . . 544
S. 153 --Search and seizure--Block assessment--Undisclosed income--Section 147/148 applicable to assessment for block period made under Chapter XIV-B of Act--Failure to issue notice under section 148--Tribunal deleting addition--Proper-- CIT v. Peerchand Ratanlal Baid (HUF) (Gauhati) . . . 544
S. 154 --Rectification of mistake--Business expenditure--Deduction only on actual payment--Amount actually paid wrongly disallowed under section 43B--Assessment order to be rectified and deduction given-- CIT v. Mayflower Hotels P. Ltd . (Ker) . . . 523
Chap. XIV-B --Search and seizure--Block assessment--Undisclosed income----Section 147/148 applicable to assessment for block period made under Chapter XIV-B of Act--Failure to issue notice under section 148--Tribunal deleting addition--Proper-- CIT v. Peerchand Ratanlal Baid (HUF) (Gauhati) . . . 544
S. 158BB --Search and seizure--Block assessment--Undisclosed income--Return filed after search showing income after deduction of tax at source, advance tax and self-assessment tax--Amounts already disclosed cannot be treated as undisclosed income-- CIT v. Kerala Roadways Ltd. (Mad) . . . 609
S. 158BB(4) --Settlement of cases--Powers of Settlement Commission--Settlement Commission bound by statutory provisions--Capital gains--Computation of long-term capital gains--Settlement Commission cannot allow set-off of carried forward loss--Interest on borrowals could be deducted-- CIT v. Settlement Commission (IT & WT) (Ker) . . . 578
S. 194C --Deduction of tax at source--Works contract--Assessee engaging trucks for transportation of goods--Single payment not exceeding Rs. 20,000--No contract between assessee and transporters for carriage of goods--Assessee not liable to deduct tax at source-- CIT v. United Rice Land Limited (P&H) . . . 594
S. 195 --Deduction of tax at source--Co-ordination fees covered by a single invoice--Applicant bound to deduct at source-- ABB Ltd. , In re (AAR) . . . 564
----Non-resident--UK company--Providing information regarding recruitment of India based candidates--Referring potential Indian clients to third party based in India--No permanent establishment in India--Income received from Indian clients--Not fees for "technical services"--Not taxable business profits-- Real Resourcing Ltd. , In re (AAR) . . . 558
S. 201(1) --Deduction of tax at source--Works contract--Assessee engaging trucks for transportation of goods--Single payment not exceeding Rs. 20,000--No contract between assessee and transporters for carriage of goods--Assessee not liable to deduct tax at source-- CIT v. United Rice Land Limited (P&H) . . . 594
S. 201(1A) --Deduction of tax at source--Works contract--Assessee engaging trucks for transportation of goods--Single payment not exceeding Rs. 20,000--No contract between assessee and transporters for carriage of goods--Assessee not liable to deduct tax at source-- CIT v. United Rice Land Limited (P&H) . . . 594
S. 240 --Refund--Appeal--Refund payable consequent on appeal--Application not necessary for obtaining refund--Assessee entitled to interest on refund-- S. Thigarajan v. Asst. CIT (Karn) . . . 581
S. 244A --Refund--Appeal--Refund payable consequent on appeal--Application not necessary for obtaining refund--Assessee entitled to interest on refund-- S. Thigarajan v. Asst. CIT (Karn) . . . 581
S. 271(1)(c) --Penalty--Concealment of income--Penalty on basis of additions to returned income--Additions deleted in quantum proceedings--Penalty could not be imposed-- CIT v. Parkash Industries Limited (P&H) . . . 622
Income-tax Rules 1962 :
r. 3 --Salary--Perquisites--Valuation of accommodation provided by employer--Rule prescribing different rates where employer is Government and other employers--Government employee on deputation to BSNL controlled by Government--Accommodation provided by BSNL--Valuation of accommodation not as government employee-- S. Sthanukumaran Thampi v. CBDT (Ker) . . . 503
R. 9A --Film production--Books of account--Deduction not to be allowed unless amount realised credited in books of account maintained by film producer--Claim for deduction of expenditure on basis of pass book of bank account--Pass book maintained by bank not books of account--Assessee not entitled to claim deduction-- L. N. Poddar v. ITAT (Patna) . . . 513
R. 9A(5) --Film production--Deduction--Effect of rule 9A(5)--Maintenance of books of account mandatory for seeking deduction-- L. N. Poddar v. ITAT (Patna) . . . 513
Appendix I --Depreciation--Block of assets--Law applicable--Effect of amendment of Rules with effect from assessment year 1988-89--Block of assets entitled to depreciation--Individual items in block cannot be investigated-- CIT v. Sonal Gum Industries (Guj) . . . 542
-CA.RAJU SHAH, AHMEDABAD

ITax - Bonds notified as zero coupon

 

New RC Nos allotted to each employer under Maharashtra Profession Tax Act, 1975

Dear All,

The Government of Maharashtra has published list of old RC No and corresponding new RC Nos allotted to each employer under Maharashtra Profession Tax Act, 1975. The information is hosted on Mahavat website in district wise PDF format.

http://www.mahavat.gov.in

SUBJECT INDEX TO CASES REPORTED IN THIS PART

 

INCOME TAX REPORTS (ITR)

Volume 322 : Part 3 (Issue dated 12-4-2010)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Accounting --Rejection of accounts--Estimate of income--Books of account not maintained--Estimate of income can be made on rational basis--Income-tax Act, 1961-- Prakash Automobiles v. CIT (Ker) . . . 435

----Rejection of accounts--Estimate of profits--Estimate based on comparable cases--Valid--Income-tax Act, 1961-- Salem Steel Company v. CIT

(Mad) . . . 349

----Rejection of accounts--Estimation of profits--Estimation of profits based on facts--Justified--Income-tax Act, 1961, s. 145-- Sri Vaddanahal Rajanna (HUF) v. Asst. CIT (Karn) . . . 356

Advance tax --Interest--Assessee voluntarily offering income for taxation to avoid probe--Interest not chargeable under sections 234A and 234B--Income-tax Act, 1961, ss. 234A, 234B-- T. P. Indrakumar v. ITO (Karn) . . . 454

----Interest--Company--Book profit--Income computed under section 115J--Interest not leviable--Income-tax Act, 1961, ss. 115J, 234B-- Deputy CIT (Asstt.) v. Madhusudan Industries Ltd. (Guj) . . . 438

----Interest--Interest chargeable under sections 234A, 234B and 234C--Law applicable--Effect of changes made by Finance Act, 1997--Charge of interest under sections 234A, 234B and 234C mandatory--Computation in Form ITNS-150 accompanying order of assessment clearly specifying provision of law and amount of interest charged--Order valid--Income-tax Act, 1961, ss. 234A, 234B, 234C-- Hari Narain Soni v. ITO (Raj) . . . 444

Appeal to Appellate Tribunal --Counsel of assessee not available at time of hearing--Managing director of assessee contesting appeal but not presenting case properly as having no expertise in taxation laws--Assessee seeking proper opportunity to make effective submissions before Tribunal--Matter remanded-- Anand Flori Farms India P. Ltd . v. ITO (Delhi) . . . 406

----Powers of Tribunal--Rectification of mistakes--Factual error in order--Tribunal could correct error--Income-tax Act, 1961, s. 254(2)-- CIT v. Income-tax Appellate Tribunal (Bom) . . . 359

Appeal to High Court --Condonation of delay--Limitation Act has no application--High Court has no power to condone delay beyond period prescribed under Income-tax Act--Income-tax Act, 1961, s. 260A--Limitation Act, 1963, s. 5-- Sukhvinder Singh v. CIT (P&H) . . . 339

Assessment --Additions--Failure to consider assessee's statement made subsequent to retracted statement documentary evidence on record--Matter remanded--Income-tax Act, 1961-- CIT v. Omprakash K. Jain

(Bom) . . . 362

----Assessee's case taken up for scrutiny--Assessee offering income for taxation voluntarily to avoid probe--Assessment of such income--Valid--Income-tax Act, 1961, s. 68-- T. P. Indrakumar v. ITO (Karn) . . . 454

Avoidance of tax --Seed money received for commencement of business--Parting of part of profit by assessee instead of paying interest--Transaction not a colourable device--Income-tax Act, 1961-- CIT v. V. G. Siddartha

(Karn) . . . 365

Business expenditure --Fines and penalties--Amount paid by builder as regularisation fee for violating building bye-laws--Penalty--Not deductible--Income-tax Act, 1961, s. 37--Karnataka Municipal Corporation Act, 1976, s. 483-- Millennia Developers P. Ltd . v. Deputy CIT (Karn) . . . 401

----Guest house--Expenditure on guest house--Not allowable--Income-tax Act, 1961, s. 37-- CIT v. Hindustan Zinc Ltd. (Raj) . . . 478

----Hire purchase agreement--Finance commission allowed as deduction in prior years--Deduction could not be denied in assessment year 1981-82--Income-tax Act, 1961, s. 37-- CIT v. Heeralal Kataria (Raj) . . . 342

Capital or revenue expenditure --Smelter plant requiring large quantities of water--Expenditure on construction of a dam--Object and effect of expenditure is to facilitate its trade operation and enable assessee to conduct business more efficiently--Is revenue expenditure--Income-tax Act, 1961, s. 37-- CIT v. Hindustan Zinc Ltd. (Raj) . . . 478

Cash credits --Additions--Tribunal deleting additions--Books of account available with Assessing Officer would indicate capacity of party to advance loan--No need to prove on assessee to prove capacity--Income-tax Act, 1961-- CIT v. Tania Investments P. Ltd. (Bom) . . . 394

----Unaccounted cash credit--Tribunal confirming deletion of addition made by Assessing Officer without verifying whether creditor paid tax on amount added as cash credit--Matter remanded--Income-tax Act, 1961, s. 68-- CIT v. Vinod Swarupchandra Mehta (Guj) . . . 399

Co-operative society --Society carrying on banking activities--Special deduction under section 80P--Interest on refund of income-tax--Entitled to special deduction--Income-tax Act, 1961, s. 80P-- CIT v. Haryana State Co-operative Apex Bank Ltd. (P&H) . . . 404

Depreciation --Rate of depreciation--Effect of Circular No. 652 dated 14-6-1993--Higher rate of depreciation applicable to motor lorries used in transportation business--Income-tax Act, 1961, s. 32--Income-tax Rules, 1962, App I, item III-2(ii)-- CIT v. S. C. Thakur and Bros . (Bom) . . . 463

----Rate of depreciation--Law applicable--Law in force on 1st day of April of financial year--Subsequent amendment enhancing rate of depreciation--Not applicable--Income-tax Rules, 1962, r. 5, Appex I-- KEC International Ltd . v. CIT (Bom) . . . 465

----Rate of depreciation--Trucks--Assessee engaged in purchase and sale of limestone--Hiring trucks to outsiders--Not engaged in transportation business--Not entitled to higher rate of depreciation--Entitled to depreciation at 30 per cent. only--Income-tax Act, 1961, s. 32--Income-tax Rules 1962, Appx. I, Part I, Items Nos. III(ii)-D(9), E(1A)-- CIT v. Bimalchand Jain (Raj) . . . 346

Export --Special deduction under section 80HHC--Computation of special deduction--Interest--Reduction of 90 per cent. from interest--Gross amount of interest to be taken into account--Income-tax Act, 1961, s. 80HHC-- CIT v. Devraj Nensee and Co. (Mad) . . . 430

Export markets development allowance --Weighted deduction--Insurance and freight charges--Export inspection charges--Interest on export packing credit loans--Not entitled to weighted deduction--Income-tax Act, 1961, s. 35B-- KEC International Ltd . v. CIT (Bom) . . . 465

Impounding of documents --Scope of power under section 131(3)--"Document" does not include passport--Passport cannot be impounded under section 131--Income-tax Act, 1961, s. 131-- Avinash Bhosale v. Union of India

(Bom) . . . 381

Offences and prosecution --Delay in filing return by Hindu undivided family--Complaint not showing karta ill till returns required to be filed and he transferred his liability to son--Son cannot be said to have consented or connived with karta in late filing of returns--Son participating in income-tax proceedings--Not a ground to fasten liability for commission of any offence under Act on him--Income-tax Act, 1961, ss. 276CC, 278C(2)-- Roshan Lal v. Special Chief Judicial Magistrate (All) . . . 353

----Powers of trial court--Trial court has power to decide whether particular Supreme Court case is applicable--Income-tax Act, 1961, ss. 277(ii), 278B-- P. Kuknhappa Nair and Co . v. Deputy CIT (Ker) . . . 437

----Wilful attempt to evade tax--False verification--Conviction of women--Release under Probation of Offenders Act--Justified--Income-tax Act, 1961, ss. 276C, 277--Probation of Offenders Act, 1958-- Union of India v. Smt. Mamta Sethi (MP) . . . 440

Precedent --Effect of decision of Supreme Court in Suresh Nanda v. CBI [2008] 3 SCC 674-- Avinash Bhosale v. Union of India (Bom) . . . 381

Purchase of immovable property by Central Government --Condition precedent for pre-emptive purchase--Finding of undervaluation by 15 per cent. with a view to evade tax--Mere remark that prices were rising--Not sufficient--Order of pre-emptive purchase--Not valid--Income-tax Act, 1961, ss. 269UD(1), 269UE-- Cigeo Construction Co. Pvt. Ltd. v. Appropriate Authority

(Bom) . . . 474

Reassessment --Grounds for reassessment--Rectification proceedings dropped--No new material--Reassessment proceedings on same grounds--Not valid--Income-tax Act, 1961, s. 147-- Berger Paints India Ltd . v. Asst. CIT

(Cal) . . . 369

----Income escaping assessment--Company--Book profits--Provision for bad and doubtful debts--Addition--Commissioner (Appeals) deleting--Tribunal upholding order--No substantial question of law arose--Income-tax Act, 1961, ss. 148, 115JB-- CIT v. Mysore Paper Mills Ltd . (Karn) . . . 428

----Notice--Writ--Conditions precedent for notice absent--Writ petition to quash notice--Maintainable--Income-tax Act, 1961, ss. 147, 148--Constitution of India, art. 226-- Berger Paints India Ltd. v. Asst. CIT (Cal) . . . 369

Rectification of mistakes --Assessment granting special deduction under section 80-IA--Rectification to withdraw deduction on export incentive, duty drawback--Matter debatable--Rectification proceedings not permissible--Income-tax Act, 1961, ss. 80-IA, 154-- CIT v. TTK Prestige Ltd . (Karn) . . . 390

Search and seizure --Block assessment--Copies of seized material not provided to assessee nor assessee given opportunity to cross-examination of person on whose statement Assessing Officer relied upon--Violation of natural justice--Fatal to proceedings--Income-tax Act, 1961-- CIT v. Ashwani Gupta

(Delhi) . . . 396

Words and phrases --Meaning of "document"-- Avinash Bhosale v. Union of India (Bom) . . . 381

AUTHORITY FOR ADVANCE RULINGS

Non-resident --Russian company--Business of construction and commissioning of power projects--Off-shore contract for design, engineering, manufacture, etc., testing of supplier's works, and dispatching to port of disembarkation in India--Russian company to transport at its own risk and expense, to handle them at point of import and all formalities for customs clearance--Ownership to be transferred to NTPC upon loading on mode of transport to be used to convey them from country of origin to India--Amount received by Russian company not taxable in India--Agreement for Avoidance of Double Taxation between India and Russia-- Joint Stock Company Foreign Economic Association "Technopromexport", In re . . . 409

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Constitution of India :

Art. 226 --Reassessment--Notice--Writ--Conditions precedent for notice absent--Writ petition to quash notice--Maintainable-- Berger Paints India Ltd. v. Asst. CIT (Cal) . . . 369

Income-tax Act, 1961 :

S. 32 --Depreciation--Rate of depreciation--Effect of Circular No. 652 dated 14-6-1993--Higher rate of depreciation applicable to motor lorries used in transportation business-- CIT v. S. C. Thakur and Bros . (Bom) . . . 463

----Depreciation--Rate of depreciation--Trucks--Assessee engaged in purchase and sale of limestone--Hiring trucks to outsiders--Not engaged in transportation business--Not entitled to higher rate of depreciation--Entitled to depreciation at 30 per cent. only-- CIT v. Bimalchand Jain (Raj) . . . 346

S. 35B --Export markets development allowance--Weighted deduction--Insurance and freight charges--Export inspection charges--Interest on export packing credit loans--Not entitled to weighted deduction-- KEC International Ltd . v. CIT (Bom) . . . 465

S. 37 --Business expenditure--Fines and penalties--Amount paid by builder as regularisation fee for violating building bye-laws--Penalty--Not deductible-- Millennia Developers P. Ltd . v. Deputy CIT (Karn) . . . 401

----Business expenditure--Guest house--Expenditure on guest house--Not allowable-- CIT v. Hindustan Zinc Ltd. (Raj) . . . 478

----Business expenditure--Hire purchase agreement--Finance commission allowed as deduction in prior years--Deduction could not be denied in assessment year 1981-82-- CIT v. Heeralal Kataria (Raj) . . . 342

----Capital or revenue expenditure--Smelter plant requiring large quantities of water--Expenditure on construction of a dam--Object and effect of expenditure is to facilitate its trade operation and enable assessee to conduct business more efficiently--Is revenue expenditure-- CIT v. Hindustan Zinc Ltd.

(Raj) . . . 478

S. 68 --Assessment--Assessee's case taken up for scrutiny--Assessee offering income for taxation voluntarily to avoid probe--Assessment of such income--Valid-- T. P. Indrakumar v. ITO (Karn) . . . 454

----Cash credits--Unaccounted cash credit--Tribunal confirming deletion of addition made by Assessing Officer without verifying whether creditor paid tax on amount added as cash credit--Matter remanded-- CIT v. Vinod Swarupchandra Mehta (Guj) . . . 399

S. 80HHC --Export--Special deduction under section 80HHC--Computation of special deduction--Interest--Reduction of 90 per cent. from interest--Gross amount of interest to be taken into account-- CIT v. Devraj Nensee and Co. (Mad) . . . 430

S. 80-IA --Rectification of mistakes--Assessment granting special deduction under section 80-IA--Rectification to withdraw deduction on export incentive, duty drawback--Matter debatable--Rectification proceedings not permissible-- CIT v. TTK Prestige Ltd . (Karn) . . . 390

S. 80P --Co-operative society--Society carrying on banking activities--Special deduction under section 80P--Interest on refund of income-tax--Entitled to special deduction-- CIT v. Haryana State Co-operative Apex Bank Ltd.

(P&H) . . . 404

S. 115J --Advance tax--Interest--Company--Book profit--Income computed under section 115J--Interest not leviable-- Deputy CIT (Asstt.) v. Madhusudan Industries Ltd. (Guj) . . . 438

S. 115JB --Reassessment--Income escaping assessment--Company--Book profits--Provision for bad and doubtful debts--Addition--Commissioner (Appeals) deleting--Tribunal upholding order--No substantial question of law arose-- CIT v. Mysore Paper Mills Ltd . (Karn) . . . 428

S. 131 --Impounding of documents--Scope of power under section 131(3)--"Document" does not include passport--Passport cannot be impounded under section 131-- Avinash Bhosale v. Union of India (Bom) . . . 381

S. 145 --Accounting--Rejection of accounts--Estimation of profits--Estimation of profits based on facts--Justified-- Sri Vaddanahal Rajanna (HUF) v. Asst. CIT (Karn) . . . 356

S. 147 --Reassessment--Grounds for reassessment--Rectification proceedings dropped--No new material--Reassessment proceedings on same grounds--Not valid-- Berger Paints India Ltd . v. Asst. CIT (Cal) . . . 369

----Reassessment--Notice--Writ--Conditions precedent for notice absent--Writ petition to quash notice--Maintainable-- Berger Paints India Ltd. v. Asst. CIT (Cal) . . . 369

S. 148 --Reassessment--Income escaping assessment--Company--Book profits--Provision for bad and doubtful debts--Addition--Commissioner (Appeals) deleting--Tribunal upholding order--No substantial question of law arose-- CIT v. Mysore Paper Mills Ltd . (Karn) . . . 428

----Reassessment--Notice--Writ--Conditions precedent for notice absent--Writ petition to quash notice--Maintainable-- Berger Paints India Ltd. v. Asst. CIT (Cal) . . . 369

S. 154 --Rectification of mistakes--Assessment granting special deduction under section 80-IA--Rectification to withdraw deduction on export incentive, duty drawback--Matter debatable--Rectification proceedings not permissible-- CIT v. TTK Prestige Ltd . (Karn) . . . 390

S. 234A --Advance tax--Interest--Assessee voluntarily offering income for taxation to avoid probe--Interest not chargeable under sections 234A and 234B-- T. P. Indrakumar v. ITO (Karn) . . . 454

----Advance tax--Interest--Interest chargeable under sections 234A, 234B and 234C--Law applicable--Effect of changes made by Finance Act, 1997--Charge of interest under sections 234A, 234B and 234C mandatory--Computation in Form ITNS-150 accompanying order of assessment clearly specifying provision of law and amount of interest charged--Order valid-- Hari Narain Soni v. ITO

(Raj) . . . 444

S. 234B --Advance tax--Interest--Assessee voluntarily offering income for taxation to avoid probe--Interest not chargeable under sections 234A and 234B-- T. P. Indrakumar v. ITO (Karn) . . . 454

----Advance tax--Interest--Company--Book profit--Income computed under section 115J--Interest not leviable-- Deputy CIT (Asstt.) v. Madhusudan Industries Ltd. (Guj) . . . 438

----Advance tax--Interest--Interest chargeable under sections 234A, 234B and 234C--Law applicable--Effect of changes made by Finance Act, 1997--Charge of interest under sections 234A, 234B and 234C mandatory--Computation in Form ITNS-150 accompanying order of assessment clearly specifying provision of law and amount of interest charged--Order valid-- Hari Narain Soni v. ITO

(Raj) . . . 444

S. 234C --Advance tax--Interest--Interest chargeable under sections 234A, 234B and 234C--Law applicable--Effect of changes made by Finance Act, 1997--Charge of interest under sections 234A, 234B and 234C mandatory--Computation in Form ITNS-150 accompanying order of assessment clearly specifying provision of law and amount of interest charged--Order valid-- Hari Narain Soni v. ITO

(Raj) . . . 444

S. 254(2) --Appeal to Appellate Tribunal--Powers of Tribunal--Rectification of mistakes--Factual error in order--Tribunal could correct error-- CIT v. Income-tax Appellate Tribunal (Bom) . . . 359

S. 260A --Appeal to High Court--Condonation of delay--Limitation Act has no application--High Court has no power to condone delay beyond period pres-cribed under Income-tax Act-- Sukhvinder Singh v. CIT (P&H) . . . 339

S. 269UD(1) --Purchase of immovable property by Central Government--Condition precedent for pre-emptive purchase--Finding of undervaluation by 15 per cent. with a view to evade tax--Mere remark that prices were rising--Not sufficient--Order of pre-emptive purchase--Not valid-- Cigeo Construction Co. Pvt. Ltd. v. Appropriate Authority (Bom) . . . 474

S. 269UE --Purchase of immovable property by Central Government--Condition precedent for pre-emptive purchase--Finding of undervaluation by 15 per cent. with a view to evade tax--Mere remark that prices were rising--Not sufficient--Order of pre-emptive purchase--Not valid-- Cigeo Construction Co. Pvt. Ltd. v. Appropriate Authority (Bom) . . . 474

S. 276C --Offences and prosecution--Wilful attempt to evade tax--False verification--Conviction of women--Release under Probation of Offenders Act--Justified-- Union of India v. Smt. Mamta Sethi (MP) . . . 440

S. 276CC --Offences and prosecution--Delay in filing return by Hindu undivided family--Complaint not showing karta ill till returns required to be filed and he transferred his liability to son--Son cannot be said to have consented or connived with karta in late filing of returns--Son participating in income-tax proceedings--Not a ground to fasten liability for commission of any offence under Act on him-- Roshan Lal v. Special Chief Judicial Magistrate

(All) . . . 353

S. 277 --Offences and prosecution--Wilful attempt to evade tax--False verification--Conviction of women--Release under Probation of Offenders Act--Justified-- Union of India v. Smt. Mamta Sethi (MP) . . . 440

S. 277(ii) --Offences and prosecution--Powers of trial court--Trial court has power to decide whether particular Supreme Court case is applicable-- P. Kuknhappa Nair and Co . v. Deputy CIT (Ker) . . . 437

S. 278B --Offences and prosecution--Powers of trial court--Trial court has power to decide whether particular Supreme Court case is applicable-- P. Kuknhappa Nair and Co . v. Deputy CIT (Ker) . . . 437

S. 278C(2) --Offences and prosecution--Delay in filing return by Hindu undivided family--Complaint not showing karta ill till returns required to be filed and he transferred his liability to son--Son cannot be said to have consented or connived with karta in late filing of returns--Son participating in income-tax proceedings--Not a ground to fasten liability for commission of any offence under Act on him-- Roshan Lal v. Special Chief Judicial Magistrate

(All) . . . 353

Income-tax Rules 1962 :

Appx. I, Part I, Items Nos. III(ii)-D(9), E(1A) --Depreciation--Rate of depreciation--Trucks--Assessee engaged in purchase and sale of limestone--Hiring trucks to outsiders--Not engaged in transportation business--Not entitled to higher rate of depreciation--Entitled to depreciation at 30 per cent. only-- CIT v. Bimalchand Jain (Raj) . . . 346

App I, item III-2(ii) --Depreciation--Rate of depreciation--Effect of Circular No. 652 dated 14-6-1993--Higher rate of depreciation applicable to motor lorries used in transportation business-- CIT v. S. C. Thakur and Bros .

(Bom) . . . 463

R. 5, Appex I --Depreciation--Rate of depreciation--Law applicable--Law in force on 1st day of April of financial year--Subsequent amendment enhancing rate of depreciation--Not applicable-- KEC International Ltd . v. CIT

(Bom) . . . 465

Karnataka Municipal Corporation Act, 1976 :

S. 483 --Business expenditure--Fines and penalties--Amount paid by builder as regularisation fee for violating building bye-laws--Penalty--Not deductible-- Millennia Developers P. Ltd . v. Deputy CIT (Karn) . . . 401

Limitation Act, 1963 :

S. 5 --Appeal to High Court--Condonation of delay--Limitation Act has no application--High Court has no power to condone delay beyond period prescribed under Income-tax Act-- Sukhvinder Singh v. CIT (P&H) . . . 339

 ----

CA.RAJU SHAH, AHMEDABAD

Withdrawal of nominees from Audit Allotment Committee of all DDR.

LETTER SENT BY CHAIRMAN OF CO-OP. COMMITTEE OF WIRC

To

The Commissioner of Co-operation &

Registrar Co-operative Societies,

State of Maharashtra,

Pune – 411 001.

 

Respected Sir,

 

Ref.: Withdrawal of nominees from Audit Allotment Committee of all DDR.

 

As per the Instructions received from our Professional Development Committee at Head Office in Delhi, we are constrained to withdraw all our nominees from the Audit Allotment Committees appointed at the level of local District Deputy Registrars, as the consultative process is not satisfactory in its entirety as per circular dt. 27.01.2010, in spite of our earlier representative in the matter.

 

We request you to kindly note the same and intimate this to all the District Deputy Registrars accordingly.

 

Thanking you,

 

Yours truly,

FOR CO-OPERATIVE AUDIT COMMITTEE (MAHARASHTRA)

OF THE WESTERN INDIA REGIONAL COUNCIL

OF THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA

 

 

 

Chairman

(CA. D.B. Gandhi)

 

c.c. for information to—

1. To Chairmen/Chairpersons of all the branches of WIRC.

2. Members nominated to the Audit Allotment Committees.

3. All Regional Council Members & Ex-Officio members.

4.PDC, New Delhi.

 

 

Non allotment of bank branch audit

The following is the reply received from PD Committee on complained made by a member having proprietary firm.

 

Dear Sir/Madam,

 

The This has reference to the trailing mail regarding above cited subject, we may inform that the name of applicant "XYZ& CO.  UCN XXXX" was forwarded by RBI to the following banks which opted for managerial autonomy in the matter of appointment of auditors.

 

1. State Bank of India
2. Allahabad Bank
3. Bank of India
4. Bank of Baroda
5. Canara Bank
6. Central Bank of India
7. Indian Overseas Bank
8. Oriental Bank of Commerce
9. Syndicate Bank
10. Punjab National Bank
11. UCO Bank
12. Union Bank of India
13. Andhra Bank
14. Punjab & Sind Bank
15. Bank of Maharashtra

 

These banks selected their auditors from the list forwarded by RBI and remaining names were sent back to RBI for appointment in remaining banks:

 

1. Corporation Bank 
2. Dena Bank 
3. Indian Bank 
4. United Bank of India 
5. Vijaya Bank 
6. State Bank of Bikaner & Jaipur 
7. State Bank of Hyderabad 
8. State Bank of Indore 
9. State Bank of Mysore 
10. State Bank of Patiala 
11. State Bank of Travancore 

 

The auditors in remaining eleven banks were appointed keeping in view the certain criteria; few of them are as follow:

 

• SBAs being appointed to audit branches should be located in the centers in which their offices are situated or branches located in centers which are in close proximity to their offices.

 

• Banks to have a suitable mix of various categories of auditors / audit firms while selecting the SBAs keeping in view the size of the branches to be audited.

 

In view of the above, it is possible that the name of the firms which were appearing in the list of non continuing auditors forwarded by RBI to the banks which opted for managerial autonomy does not find place in the final allotment list for the year 2009-10.

 

 

 

With kind regards
Ajay Kumar
Professional Development Committee
The Institute of Chartered Accountants of India,
'ICAI BHAWAN',
Post Box Number 7100,
Indraprastha Marg,
NEW DELHI - 110 002.
India
Telephone - Direct +91 11 30110444
Telephone - Board +91 11 39893989 Extn: 444
Fax: +91 (11) - 30110583
Website: www.icai.org

NEWS, INFORMATIONS...

Statutory Branch Auditors recommended for appointment in Public Sector Banks
- 2009-10

(http://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=1965)

"During the year 2009-10, the following 15 PSBs have exercised managerial
autonomy in regard to selection and appointment of SBAs, viz. State Bank of
India, Allahabad Bank, Bank of Baroda, Bank of India, Bank of Maharashtra,
Canara Bank, Central Bank of India, Indian Overseas Bank, Oriental Bank of
Commerce, Punjab National Bank, Syndicate Bank, UCO Bank, Union Bank of
India, Punjab & Sind Bank and Andhra Bank.

The names of audit firms recommended by these 15 banks and approved by RBI
are displayed on the web-for list of names of firm please visit :

<http://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=1965>
http://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=1965

The names of auditors forwarded by RBI to the 11 PSBs which have not opted
for managerial autonomy for the year 2009-10 are also displayed on the
web-site.

The information in regard to branches allotted to these audit firms will be
published on the web-site, after receipt of the information from the
respective banks. Banks have been advised to furnish the information
regarding allocation of branches latest by April 30, 2010.

While forwarding names of audit firms, banks have been advised that not more
than three branches may be allotted per audit firm and that they should
allot branches, to the extent possible, to the audit firms taking into
consideration their category and audit experience in such a way that bigger
branches are audited by larger/experienced audit firms. It is not necessary
that all the audit firms whose names are forwarded by RBI to various banks
are allotted branch audit by the respective banks, as sufficiently higher
number of audit firms are forwarded to banks in order to enable them to
allot audit assignments as per their logistic requirements. It also often
happens that some of the audit firms whose names are forwarded are either
not allotted any audit assignment or are allotted assignment by some other
bank, after their names are returned back to RBI due to various reasons and
re-allotted/ considered for re-allotment, if any, required by some other
bank.

This is to inform you that due date of filing MVAT audit report in form-704
for the year ended on 31.03.2009 has been extended to 30.04.2010

(Source: STP Association, Mazgaon, Mumbai)

Soon, two firms may audit accounts of every company

March, 29th 2010
Will we see a company audited by two audit firms at the same time?

That looks a possibility from what the Union Minister of State for Corporate
Affairs and Minority Affairs, Mr Salman Khurshid, said here today.

Addressing a meeting of the Confederation of Indian Industry (CII), Mr
Khurshid said, in the context of making the audit function effective, that
there had emerged an idea of "dual audit so that there are two companies
(firms) in a sense keeping a check on each other."

Although leading auditors that Business Line spoke to seem to think that Mr
Khurshid was referring to "joint audit" - where two firms split the work
between themselves - the Minister was clearly referring to two audit firms
duplicating the work so as to keep a "check on each other."

Mr Khurshid said that if the Government and the industry approached the
issue with an open mind "innovative solutions can be found" to meet the
aspirations of the people.

He did say in his speech that the Government was not "overly concerned about
one or two major cases going wrong" - an allusion to the Satyam episode.
However, later in a chat with journalists, he said that the Government was
giving the Satyam investigations "high priority, so that the world knows
that we are not only back on our feet quickly after a knock but we also make
people accountable (for their wrong doings)."

Satyam impact

Clearly, the Satyam episode is influencing the thinking on the role of
auditors. The Minister seems to have meant as much when he said that the
Government had looked at countries that have mandatory rotation of auditors.

In India, there are two views about it, he said. While there is a consensus
that there should be rotation of partners of a firm in auditing an entity,
there is opposition to the rotation of firms themselves.

In another context in the speech, he named nominations, remunerations and
audit as the three areas where there has to be "transparent, independent and
objective assessments made within a company."

Government planning to give ICAI more power so that it can exercise more
control on Audit Firms

Mar 30, 2010 ICAI

To reinforce control over auditors, the government is planning to give the
regulator-Institute of Chartered Accountants of India-more teeth. Among the
options being considered by the ministry of corporate affairs is to make it
mandatory for a firm- Indian or foreign-doing audit to get a no-objection
certificate from the regulator before it gets registered as a company or a
limited liability partnership (LLP).

The auditors would also be required to wind up their display proceedings in
a shorter period of time.

Currently, any practising auditor has to register with ICAI in his/her
individual capacity, and is answerable to the statutory body for his/her
actions, but there is an absence of enforceable regulation on audit firms.
This has been exposed as a major regulatory loophole after the Satyam scam,
as the regulator largely looked helpless even as serious questions were
being raised about the role of the global audit firm, PriceWaterhouse.
According to a senior official, the Parliamentary Standing Committee
perusing the Companies Bill has strong views about the lax audit regulation.

One of the suggestions of the committee is to extend the ICAI's arms to the
audit "firms" also. Necessary changes could be made in Chartered Accountants
Act, 1949 and also the Companies Bill, the official said.

In a recent interview to FE, the global chairman of PricewaterhouseCoopers,
Dennis M Nally, had revealed the plan to amalgamate all partnerships and
related entities of PricewaterhouseCoopers in the country with the parent
organisation. The new regulations being planned would ensure that even as a
company or LLP (both of which are centrally monitored), the firm will have
to be answerable to ICAI for its audit-related activities in the country,
even as the overall operations of the company/LLP would be governed by the
government under the Companies Act/LLP Act, the official clarified.

Recently, the general council meeting of ICAI extensively discussed the
issue of creating transparency with regard to the operations of foreign
audit firms.

The council's suggestions would now forward its inputs to the ministry of
corporate affairs. "

When contacted ICAI president Amarjit Chopra declined to comment on the
government's plan to amend the Chartered Accountants Act to give the
regulator more teeth but said, "We are very clear on one thing that foreign
firms have to be made more accountable." Foreign audit firms like KPMG,
Ernst &amp; Young and PwC declined to comment on the issue.

Income Tax department technically equipped to detect fraud or hidden
information

Mar 30, 2010 Income Tax

To outsmart tax evaders who resort to delete their financial data or hide
it in password-protected devices during search operations, the I-T
department has started including portable forensic labs and experts in its
team. The department has unearthed links to more than Rs 1,000 crore money
in the last few searches with the help of cyber forensics, according to
sources.

The search teams now visit premises of assesses equipped with pre-wiped
disks for imaging and cloning hard drives, portable labs for previewing
computer hard disks, evidence bags and tags to pack, label and transport the
imaged and cloned data to its labs.

Taxpayers and evaders have increasingly started using high-end softwares
like 'logic bomb' which deletes all files as soon as investigators try to
source information from the hardware.

While password protected CDs, DVDs, pen drives, MP3 players, ipods and SIM
cards are used to store and conceal the voluminous records of transactions
and payments to evade taxes, the sources said.

The department clones hard drives and other hardware in the presence of the
assessee and prepares a 'panchnama' with the help of forensic experts drawn
from the department or hired from outside. An on-the-spot seizure of the
electronic data is necessary after instances of "zero storage" happened when
the seized hardware was re-opened in department's forensic labs, they said.

The I-T authorities, in a recent search conducted on a prominent food and
spices manufacturer of the country, was faced with a unique problem when the
assessee provided a limited number of account books to the department
admitting a lower tax liability.

The cyber forensic team then went through the companies numerous hard drives
and ferreted out the hidden account books resulting in disclosure of
transactions to the tune of Rs 15 crore, the sources said.

The department also recovered Rs 74 crore of concealed income from an
on-spot analysis of servers when searches were conducted on a popular
apparel brand.

-CA.RAJU SHAH