Guidelines / Criteria For Income tax Scrutiny for Financial Year 2010-11 / Assessment Year 2011-12

Guidelines / Criteria For Income tax Scrutiny for Financial Year 2010-11 / Assessment Year 2011-12

Initially Published by us  on 27.09.2010 – Republished by us on 14.09.2011

GUIDELINES FOR SELECTION OF CASES FOR SCRUTINY DURING 2010-11

1. Selection of cases for scrutiny during the financial year 2010-11 will be done primarily through CASS this year. Manual Selection for scrutiny this year will be limited only to a few categories of cases listed below.
2. List of cases selected during each month in accordance with the selection criteria mentioned below shall be submitted by the Assessing Officers to their respective Range heads by the 15^th of the following month and also displayed on the Notice Board of their office.
3. These guidelines are meant only for the use of officers of the Income Tax Department. These are not be disclosed even if a request is made under the right to Information Act, in view of the decision of the Central Information Commission in the case of Shri Kamal Anand Vs Director (ITA-II), CBDT (Order No. CIC/AT/2007/00617 dated 21.02.2008).

SELECTION CRITERIA APPLICABLE TO ALL RETURNS AT ALL STATIONS:

a)    Value of international transaction as defined u/s 92b exceeds Rs. 15 crores.

b)    Cases involving addition in an earlier assessment year in excess of Rs.10 lacs on a substantial and recurring question of law or fact which is confirmed in appeal or is pending before an appellate authority.

c)    Cases involving addition in an earlier assessment year on the issue of transfer pricing in excess of Rs.10 Lakhs or more.

d)    Assessments in survey cases for the financial year in which survey was carried out This criteria will not apply if all of the following conditions are fulfilled:

(i)            There are no impounded books or documents.

(ii)           There is no retraction of disclosure made during the survey.

(iii)          Declared income, excluding any disclosure made during the survey, is nor less than the declared income of the preceding assessment year.

e)    Assessment in Search & Seizure cases to be made under sections 158B, 158BC, 158BD, 153A 153C & 143(3) of the IT Act.

f)     Assessments initiated under section 147 / 148 of the IT Act.

g)    Assessing Officer may select any return of scrutiny after recording the reasons and obtaining approval of the CCIT/DGIT. The cases under this category should be selected if there are compelling reasons and the case is not selected through CASS. There cases should be watched by CCIT / CIT in respect of the quality of assessment.

(F. NO. 225/93/2009/ITA.II)

_____________________________________________________________________

F.No.225/93/2009/ITA.II

'New Delhi, the 8TH September, 2010.

To

All Chief Commissioners of Income-tax (CCA),

All Directors General of Income-tax;

Subject:- Central Action Plan – Identification of cases for scrutiny through manual selection for the year 2010-2011-regarding

Sir/Madam,

Reference is invited to Board's-letter of even number dated 28.07.2010 on the subject above.

2.       The Board has decided to modify the aforesaid guidelines regarding selection of cases for scrutiny as under:

a)     In paragraph (c) of the aforesaid instruction, the words " Rupees ten or more" were inadvertently mentioned, which may be read as "Rupees 10 crore or more".

b)     The following additional category of cases may also be selected manually for Scrutiny:

"Returns of income of Trusts/ AOPs etc, filed in return form ITR-7 where gross receipts exceed Rs.5 crore"

c)     In partial modification of the Category (g) of guidelines dated 28.07.2010, wherein  CCIT/DGIT were  authorized to  approve selection of cases, the following decision has been taken:

I. The Assessing Officers in mufossil stations may select a maximum number of twenty five cases per A.0 after recording reasons for the selection and with the approval of the Addl. CIT/JCIT in charge of the Range* if the Addl.CIT/JCIT happens to be the senior most officer in the station. However if the senior most officer at the station is of the rank of Commissioner , approval in this regard shall be given by the Coinmissioner.

II. In other areas,; i.e. Metros and bigger cities where Income – Tax office is headed by an officer of the rank of Chief Commissioner/ Director General of Income Tax, Assessing Officers will manually select cases for scrutiny after recording reasons for doing so with the prior approval of jurisdictional CCIT/ DGIT. The maximum number of cases selected for scrutiny shall, however, not exceed 10 (ten) per AO.

III. The authority giving approval for selection of cases for scrutiny as above shall monitor the cases approved by him/ her and ensure quality of assessments in these cases.

This may be brought to the notice of all the officers working in your region.

Source – Income Tax Department

Other Related Post-

1.Income Tax department strategy to meet the Financial Year 2009-2010 Budget target

2. Criteria / Guidelines for Income tax Scrutiny for Assessment year 2010-11 / Financial Year 2009-2010

FAQ / e-TDS / Corrected/Revised Return / Preparation of Correction Statement More than Once on the Same Regular Statement (Correction on Correction)...

---------- Forwarded message ----------
From: CA UMESH MALVADE <caumesh20@gmail.com>
Date: Wed, Sep 14, 2011 at 9:40 AM

 

FAQ / e-TDS / Corrected/Revised Return / Preparation of Correction Statement More than Once on the Same Regular Statement (Correction on Correction)

http://taxguru.in/income-tax/faq-etds-correctedrevised-return-preparation-correction-statement-regular-statement-correction-correction.html

-How many times can I furnish acorrection TDS/TCS statement?

A correction TDS/TCS statement can be furnished multiple times to incorporate changes in the regular TDS/TCS statementwhereas a regular TDS/TCS statement will be accepted at the TIN central system only once.

 What are the important points to be kept in mind while preparing correctionstatement more than once on the same regular statement?

You have to kept in mind, the following points while preparing correction statement more than once on the same regular statement:

1. The TDS/TCS statement on which correction is to be prepared should be updated with details as per all previous corrections.
2. Modifications/addition/deletion in correction statements accepted at the TIN central system only should be considered.

 The first correction filed by me contains three types of correction (three PRNs / Token Number) and one of the types of correction has got rejected at the TIN central system. What should I do?

The steps as under should be followed:

1. You have to update modifications as per the accepted corrections in the TDS statement.
2. Identify the record for which correction was rejected earlier by its sequence no. and fields for identification
3. Correct the said record.
4. Correction statement should contain updated values as well as value of identification field as per regularstatement.

 Which Provisional Receipt Number / Token Number should I quote while preparingcorrection statement more than once on the same regular statement?

There are two fields for Provisional Receipt Number (PRN) / Token Number in a correction statement as under:

a. Original Provisional Receipt Number / Token Number – PRN of the regular statement should be mentioned in this field.
b. Previous Provisional Receipt Number / Token Number – PRN of the last accepted correction statementshould be mentioned in this field. In case the value in this field is incorrectly mentioned, the statement will get rejected at TIN central system for the reason: "Either Previous Provisional Receipt No. provided is incorrect or combination of Original Provisional Receipt Number / Token Number and Previous Provisional Receipt Number / Token Number is not in sequence"

Example:

Single batch correction statement – Only one type of correction in the file

a. You have filed a regular statement having PRN / Token Number 010010200083255 and subsequently filed a single batch correction statement having PRN / Token Number 010010300074112. While preparingcorrection statement, you have to mention PRN / Token Number 010010200083255 in the field original PRN and the PRN / Token Number 010010300074112 in the field Previous PRN.

Multiple batch correction statement – different types of correction in a single file

b. You have filed a regular statement having PRN / Token Number 010010200083255 and subsequently filed a multi batch correction statement having three batches and corresponding PRNs / Token Numbers as 010010300074112, 010010300074123 and 010010300074134. While preparing the correctionstatement, you have to mention PRN / Token Number 010010200083255 in the field original PRN and check the status of all the three PRNs of correction statement.

• If all the three PRNs / Token Numbers are accepted at the TIN central system, you may mention any of the three PRNs / Token Numbers in the field previous PRN.
• If any of the three PRNs / Token Numbers is rejected, then you should mention the PRN / Token Number which has been accepted at the TIN central system in the field Previous PRN.
• If all the three PRNs / Token Numbers are rejected, then you must mention the PRN / Token Number of the regular statement, i.e. 010010200083255 in the field Previous PRN.

 How many times can I update PAN of a deductee/transacting party?

Structurally valid PAN of a deductee in the regular statement can be updated to another structurally valid PAN only once.

 When does a statement get 'Partially Accepted'?

A correction statement containing updates in PAN of deductee/employee may get Partially Accepted. This is possible when the PAN in the any of the records being updated by you in the correction statementis invalid, i.e. PAN not present in PAN Master Database. In such a scenario, the said record getsrejected resulting in partial acceptance of the statement.

 What should I do if the status of correction statement filed by me is 'Partially accepted'?

In case correction statement is in status 'Partially accepted', you have follow steps as under:

1. You have to update modifications as per the accepted records in the TDS statement.
2. Identify the deductee/salary record which has got rejected due to invalid PAN.
3. Rectify the incorrect PAN
4. Correction statement should contain value of identification keys as per regular statement along with the updated values.

 What could be the cause of rejection of TDS/TCS statement for the reason "Total Deposit amount of deductees is more than Challan amount actually deposited in bank"?

The total tax deposited amount as per challan should be greater than or equal to the total tax deposited amount as per deductee details, else a regular TDS/TCS statement will not get validated through FVU.

If you file a correction statement for adding deductee records under a particular challan, the total tax deposited as per challan in regular statement should be greater than or equal to the total tax deposited in deductee details as per regular as well as correction statement.

Note: Amount in the fields Interest and others in the challan is not considered in the total tax deposited as per challan.

Provisional Receipt Number is now referred as Token Number with effect from FY. 2010-11 onwards.

__,_._,___

--
--------------------
CA Umesh Malvade
Chartered Accountant

PF Deposit Limit Increased

---------- Forwarded message ----------
From: CA Santosh S. Samdadiya <ca.samsans@gmail.com>
Date: Fri, Sep 9, 2011 at 10:56 AM
Subject: NashiCAs IndianCAs: PF Deposit Limit Increased
To: nashicas <nashicas@googlegroups.com>

------

 

MODIFICATION IN PPF SCHEME : DEPOSIT LIMIT RECOMMENDED TO BE RAISED FROM RS. 70,000 TO RS. ONE LAC WHILE RATE OF INTEREST ON ADVANCES AGAINST DEPOSITS IN PPF SCHEME RAISED FROM 1 PER CENT TO 2 PERCENTAGE POINTS

PRESS RELEASE, DATED 6-9-2011

The Committee on Comprehensive Review of National Small Savings Fund (NSSF) headed by Deputy Governor, RBI has recommended revision of certain provisions of PPF Scheme, 1968 and benchmarking of interest rates on various small savings schemes with the secondary market yields on Central Government securities of comparable maturities with suitable spread.

The Committee has recommended increasing the deposit limit under PPF Scheme from existing Rs. 70,000 to Rs. 1 lakh per annum and fixing of rate of interest on advances against deposits in PPF scheme at 2 percentage points as against the prevailing interest rate on such advances at 1 per cent.

The Committee has further recommended benchmarking interest rate on small saving schemes to interest rate on Government securities of similar maturities with a positive spread of 25 basis points on all schemes except for 50 basis points for 10 year NSC and 100 basis point for Senior citizens Savings Scheme. Recommendations of the Committee have been referred to State Governments and concerned Ministries/Departments of Central Government for their comments.

This information was given by the Minister of State for Finance Shri Namo Narain Meena in a written reply to a question raised in Rajya Sabha today.

| Ashwin Nagar | FCA and SAP-Finance & Consolidations |

Success is not permanent and failure is not final

 

--
-With Regards,
  
SANTOSH S.SAMDADIYA
CHARTERED ACCOUNTANTS

MCA Circular on e-filing to avoid last minute rush

MCA Circular on e-filing to avoid last minute rush

ITR (TRIB) VOL 11 PART 3

 

ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))

Volume 11 : Part 3 (Issue dated : 12-09-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Appeal to Appellate Tribunal --Block assessment--Additional ground challenging validity of assessment--Facts or material in support of additional grounds not brought on record--Assessee filing return for block period without any objection--Additional ground rejected--Income-tax Act, 1961-- Bhagwandas Punjabi (Decd.) v. Asst. CIT (Ahmedabad) . . . 216

Assessment --Agricultural income or income from other sources--Department accepting income as agricultural in earlier years--Income to be treated as agricultural after disallowance on fair estimate--Income-tax Act, 1961-- ITO v. C. J. Rathod (Indl.) (Ahmedabad) . . . 252

-- --Status--Hindu undivided family or individual--Status of Hindu undivided family accepted by Assessing Officer after due inquiry and documentary evidence--Remand by Tribunal on other issues--Status cannot be disturbed--Income-tax Act, 1961-- ITO v. C. J. Rathod (Indl.) (Ahmedabad) . . . 252

Business expenditure --Expenditure on keyman insurance for two working directors--Directors qualified and rendering services to assessee-company--Amount received on maturity offered for taxation--Expenditure deductible--Income-tax Act, 1961, s. 37--CBDT Circular No. 762, dated 18-2-1998-- ITO v. Radha Raj Ispat P. Ltd. (Delhi) . . . 243

Capital gains --Computation--Reference to Valuation Officer--When permissible--Sale consideration higher than value adopted by stamp valuation authority--Assessing Officer not permitted to refer to Departmental Valuation Officer--Addition to be deleted --Income-tax Act, 1961, ss. 48, 50C, 55A-- ITO v. Chandrakant R. Patel (Ahmedabad) . . . 317

Capital or revenue expenditure --Assessee rendering software services to clients--Amount paid for technical advisory services--No advantage of enduring nature--Amount deductible as revenue expenditure--Income-tax Act, 1961, s. 37-- Deputy CIT v. Lifetree Cyberworks P. Ltd. (Delhi) . . . 294

Charitable purposes --Charitable trust--Registration--Trust running educational institutions--No finding that excess funds or surplus used or diverted for purpose other than educational needs--Commissioner citing irrelevant reasons for refusing registration--Assessee entitled to registration--Income-tax Act, 1961, s. 12AA-- Vidhya Sikshaa Educational and Charitable Trust v. CIT (Chennai) . . . 236

Exemption --Export--Computer software--Software developed under control and supervision of assessee utilising infrastructure and equipment provided by another company on payment of charges--Receipt of sale proceeds in India in convertible foreign exchange within prescribed period--Assessee entitled to exemption--Income-tax Act, 1961, s. 10B--Circular No. 694, dated November 23, 1994-- ITO v. Techdrive (India) P. Ltd. (Delhi) . . . 298

Income-tax proceedings --Authorised representative--Definition--Need not be a registered income-tax practitioner--Income-tax Act, 1961, s. 288(2)-- Vidhya Sikshaa Educational and Charitable Trust v. CIT (Chennai) . . . 236

Interest --Advances and loans by assessee--No agreement to charge interest--Assessee not charging any interest--Notional interest cannot be added--Income-tax Act, 1961-- ITO v. C. J. Rathod (Indl.) (Ahmedabad) . . . 252

Reassessment --Reference to Valuation Officer made during assessment but report received after completion of assessment--Reassessment based on report of District Valuation Officer--Reassessment valid--Income-tax Act, 1961, ss. 143, 147-- Shagun Buildwell Ltd. v. Deputy CIT (Delhi) . . . 273

----Valuation of property--Reference to District Valuation Officer--No material to prove market rate of property lower than rate adopted by District Valuation Officer--Value of property estimated by District Valuation Officer proper--Income-tax Act, 1961, ss. 147, 142A-- Shagun Buildwell Ltd. v. Deputy CIT (Delhi) . . . 273

Rectification of mistakes --Section 234D introduced in statute with effect from 1-6-2003 not retrospective--Not applicable to earlier assessment years--Order charging interest under section 234D--Can be rectified--Income-tax Act, 1961, ss. 154, 234D-- Ashok Leyland Finance Ltd. v. Asst. CIT (Chennai) . . . 287

Search and seizure --Block assessment--Undisclosed income--Investment in property--Valuation Officer's report cannot be treated as evidence--Undisclosed income to be determined at amount mentioned in sale deed--Income-tax Act, 1961, ss. 132A, 158BB, 158BD-- Bhagwandas Punjabi (Decd.) v. Asst. CIT (Ahmedabad) . . . 216

Unexplained investment --Investment in immovable and movable property, loans and advances--Capital available with assessee for advancing amount--Addition to be deleted--Income-tax Act, 1961-- ITO v. C. J. Rathod (Indl.) (Ahmedabad) . . . 252

----Reference to District Valuation Officer--Estimation of value of property--Value of property not fully disclosed by assessee--Assessing Officer justified in making reference under section 142A--Income-tax Act, 1961, ss. 69, 69B, 142A-- Shagun Buildwell Ltd. v. Deputy CIT (Delhi) . . . 273

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961 :

S. 10B --Exemption--Export--Computer software--Software developed under control and supervision of assessee utilising infrastructure and equipment provided by another company on payment of charges--Receipt of sale proceeds in India in convertible foreign exchange within prescribed period--Assessee entitled to exemption--Circular No. 694, dated November 23, 1994-- ITO v. Techdrive (India) P. Ltd. (Delhi) . . . 298

S. 12AA --Charitable purposes--Charitable trust--Registration--Trust running educational institutions--No finding that excess funds or surplus used or diverted for purpose other than educational needs--Commissioner citing irrelevant reasons for refusing registration--Assessee entitled to registration-- Vidhya Sikshaa Educational and Charitable Trust v. CIT (Chennai) . . . 236

S. 37 --Business expenditure--Expenditure on keyman insurance for two working directors--Directors qualified and rendering services to assessee-company--Amount received on maturity offered for taxation--Expenditure deductible--CBDT Circular No. 762, dated 18-2-1998-- ITO v. Radha Raj Ispat P. Ltd. (Delhi) . . . 243

----Capital or revenue expenditure--Assessee rendering software services to clients --Amount paid for technical advisory services--No advantage of enduring nature--Amount deductible as revenue expenditure-- Deputy CIT v. Lifetree Cyberworks P. Ltd. (Delhi) . . . 294

S. 48 --Capital gains--Computation--Reference to Valuation Officer--When permissible--Sale consideration higher than value adopted by stamp valuation authority--Assessing Officer not permitted to refer to Departmental Valuation Officer--Addition to be deleted-- ITO v. Chandrakant R. Patel (Ahmedabad) . . . 317

S. 50C --Capital gains--Computation--Reference to Valuation Officer--When permissible--Sale consideration higher than value adopted by stamp valuation authority--Assessing Officer not permitted to refer to Departmental Valuation Officer--Addition to be deleted-- ITO v. Chandrakant R. Patel (Ahmedabad) . . . 317

S. 55A --Capital gains--Computation--Reference to Valuation Officer--When permissible--Sale consideration higher than value adopted by stamp valuation authority--Assessing Officer not permitted to refer to Departmental Valuation Officer--Addition to be deleted-- ITO v. Chandrakant R. Patel (Ahmedabad) . . . 317

S. 69 --Unexplained investment--Reference to District Valuation Officer--Estimation of value of property--Value of property not fully disclosed by assessee--Assessing Officer justified in making reference under section 142A-- Shagun Buildwell Ltd. v. Deputy CIT (Delhi) . . . 273

S. 69B --Unexplained investment--Reference to District Valuation Officer--Estimation of value of property--Value of property not fully disclosed by assessee--Assessing Officer justified in making reference under section 142A-- Shagun Buildwell Ltd. v. Deputy CIT (Delhi) . . . 273

S. 132A --Search and seizure--Block assessment--Undisclosed income--Investment in property--Valuation Officer's report cannot be treated as evidence--Undisclosed income to be determined at amount mentioned in sale deed-- Bhagwandas Punjabi (Decd.) v. Asst. CIT (Ahmedabad) . . . 216

S. 142A --Reassessment--Valuation of property--Reference to District Valuation Officer--No material to prove market rate of property lower than rate adopted by District Valuation Officer--Value of property estimated by District Valuation Officer proper-- Shagun Buildwell Ltd. v. Deputy CIT (Delhi) . . . 273

----Unexplained investment--Reference to District Valuation Officer--Estimation of value of property--Value of property not fully disclosed by assessee--Assessing Officer justified in making reference under section 142A-- Shagun Buildwell Ltd. v. Deputy CIT (Delhi) . . . 273

S. 143 --Reassessment--Reference to Valuation Officer made during assessment but report received after completion of assessment--Reassessment based on report of District Valuation Officer--Reassessment valid-- Shagun Buildwell Ltd. v. Deputy CIT (Delhi) . . . 273

S. 147 --Reassessment--Reference to Valuation Officer made during assessment but report received after completion of assessment--Reassessment based on report of District Valuation Officer--Reassessment valid-- Shagun Buildwell Ltd. v. Deputy CIT (Delhi) . . . 273

----Reassessment--Valuation of property--Reference to District Valuation Officer--No material to prove market rate of property lower than rate adopted by District Valuation Officer--Value of property estimated by District Valuation Officer proper-- Shagun Buildwell Ltd. v. Deputy CIT (Delhi) . . . 273

S. 154 --Rectification of mistakes--Section 234D introduced in statute with effect from 1-6-2003 not retrospective--Not applicable to earlier assessment years--Order charging interest under section 234D--Can be rectified-- Ashok Leyland Finance Ltd. v. Asst. CIT (Chennai) . . . 287

S. 158BB --Search and seizure--Block assessment--Undisclosed income--Investment in property--Valuation Officer's report cannot be treated as evidence--Undisclosed income to be determined at amount mentioned in sale deed-- Bhagwandas Punjabi (Decd.) v. Asst. CIT (Ahmedabad) . . . 216

S. 158BD --Search and seizure--Block assessment--Undisclosed income--Investment in property--Valuation Officer's report cannot be treated as evidence--Undisclosed income to be determined at amount mentioned in sale deed-- Bhagwandas Punjabi (Decd.) v. Asst. CIT (Ahmedabad) . . . 216

S. 234D --Rectification of mistakes--Section 234D introduced in statute with effect from 1-6-2003 not retrospective--Not applicable to earlier assessment years--Order charging interest under section 234D--Can be rectified-- Ashok Leyland Finance Ltd. v. Asst. CIT (Chennai) . . . 287

S. 288(2) --Income-tax proceedings--Authorised representative--Definition--Need not be a registered income-tax practitioner-- Vidhya Sikshaa Educational and Charitable Trust v. CIT (Chennai) . . . 236

 

CA.RAJU SHAH

ITR VOL 337 PART 1

INCOME TAX REPORTS (ITR)

Volume 337 : Part 1 (Issue dated 12-9-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Assessing Officer --Powers--Order giving effect to order of Tribunal--No jurisdiction to go beyond order of Tribunal--Winnings from television game show--Order of Tribunal holding not taxable under section 115BB prior to 1-4-2002--Assessing Officer not entitled to tax as income from other sources while giving effect to order of Tribunal--Income-tax Act, 1961, ss. 2(24)(ix), 115BB-- Miss Lopamudra Misra v. Asst. CIT (Orissa) . . . 92

Assessment --Assessing Officer--Jurisdiction--Objection to jurisdiction cannot be raised after assessment is completed--Assessing Officer having jurisdiction when he commenced assessment proceedings--Subsequent transfer of case from him--Assessment completed by same Assessing Officer--Plea of want of jurisdiction could not be raised in appeal--No evidence of prejudice to assessee--Assessment valid--Income-tax Act, 1961, s. 124(4)-- CIT v. British India Corporation Ltd. (All) . . . 64

Business expenditure --Disallowance--Excessive or unreasonable payments--Remuneration/royalty paid to subsidiaries for technical assistance--Finding that such assistance essential for business--Finding that expenditure not excessive or unreasonable--Deductible--Section 92 does not apply to royalty which is not part of regular business between resident and non-resident--Income-tax Act, 1961, ss. 37, 40A(2), 92--Double Taxation Avoidance Agreement between India and Switzerland, art. 9-- CIT v. Nestle India Ltd . (Delhi) . . . 103

Capital gains --Computation--Deduction--Cost of acquisition--Sale of original shares and bonus shares--Cost of acquisition to be spread over original and bonus shares--Income-tax Act, 1961, ss. 45, 55(2)(b)(i)-- M. B. and Co. Ltd . v. Asst. CIT (Mad) . . . 29

Exemption --Charitable institution--Exemption under section 10(23C)(iv)--Order of court to withdraw utilization/investment and utilize/invest those funds in terms of section 11(5) for entitlement to benefit--Assessee complying with direction--Assessee entitled to exemption--Income-tax Act, 1961, s. 10(23C)(iv)-- Export Promotion Council for Handicrafts v. Director General of Income-tax (Exemptions) (Delhi) . . . 26

Income --Definition--Winnings from television game show--Included within definition with effect from assessment year 2002-03--Winnings in earlier period not taxable--Matter remanded--Income-tax Act, 1961, ss. 2(24)(ix), Expln. (ii), 115BB-- Miss Lopamudra Misra v. Asst. CIT (Orissa) . . . 86

----Income or capital--Company--Share capital raised in foreign country and repatriated when required--Gains due to fluctuation in foreign exchange--Constituted capital receipt --Part of amount used as working capital--Not relevant--Income-tax Act, 1961-- CIT v. Jagatjit Industries Ltd . (Delhi) . . . 21

Income from house property --Deduction--Vacancy--Law applicable--Effect of insertion of clause (c) in section 23(1)--Property not let out at all--Deduction for vacancy not allowable--Income-tax Act, 1961, s. 23-- Vivek Jain v. Asst. CIT (AP) . . . 74

Interpretation of taxing statutes --Strict interpretation-- Vivek Jain v. Asst. CIT (AP) . . . 74

Offences and prosecution --Wealth-tax--Wilful failure to file return on time--Not a continuing offence--Condition precedent for prosecution--Sanction for prosecution--Sanction accorded without application of mind--No evidence that default was wilful--Prosecution not valid--Code of Criminal Procedure, 1973, s. 245--Weatlh-tax Act, 1957, ss. 35B, 35-O-- J. Jayalalitha v. Asst. CWT (Mad) . . . 1

Revision --Commissioner--Industrial undertaking--Special deduction--Allowance of deduction without determination year of commencement of business--Commissioner directing Assessing Officer to decide year of commencement of business--Tribunal on merits holding in favour of assessee--Not proper--Income-tax Act, 1961, ss. 80-IB, 263-- CIT v. Eastern Medikit Ltd . (Delhi) . . . 56

Search and seizure --Block assessment--No undisclosed income discovered in search--Addition on ground assessee controlling a concern in name of another--Whether assessee a real owner of that concern--To be determined and addition made only in regular assessment and not in block assessment--Income-tax Act, 1961-- CIT v. Mukesh Luthra (Delhi) . . . 41

AUTHORITY FOR ADVANCE RULINGS

Advance ruling --Authority--Bound by decisions of Supreme Court--Application for ruling not to be kept pending on ground special leave petition against decision of High Court pending on similar point--Income-tax Act, 1961, s. 245R(2)-- LS Cable Ltd. , In re. . . 35

----Precedent--Binding only on parties to ruling--Authority not precluded from looking at issue afresh in another application--Income-tax Act, 1961, s. 245S-- Cairn U. K. Holdings Ltd ., In re . . . 131

Non-resident --Consortium consisting of Indian and non-resident companies awarded turnkey project in India--Non-resident responsible for offshore supplies--Sums payable to non-resident not taxable in India--Income-tax Act, 1961-- Deepak Cables (India) Ltd ., In re . . . 127

----Contracts for offshore supply of equipment, onshore supply and onshore service--Separate contracts--Offshore supply on c. i. f. basis--Transaction of sale and transfer of title outside India--Receipts therefor not taxable in India--Income-tax Act, 1961--Double Taxation Avoidance Agreement between India and Korea-- LS Cable Ltd. , In re . . . 35

----Long-term capital gains--Rate of tax--Transfer of equity shares in Indian company to another non-resident by off-market mode--Lower rate of tax of 10 per cent. not available--Income-tax Act, 1961, ss. 48, 112(1)-- Cairn U. K. Holdings Ltd ., In re. . . 131

----Prospecting for or extraction of mineral oils--Special provisions for computation of income--Time charter vessels hired by non-resident to company carrying out offshore drilling and support services for ONGC--Not technical service--Income to be computed under special provisions--Tax to be withheld at rate of 4.22 per cent.--Income-tax Act, 1961, ss. 9(1)(vii), Expln. 2, 44BB-- Bourbon Offshore Asia Pte. Ltd ., In re . . . 122

----Resident of Sri Lanka--Services involving field data collection, desk study and mathematical model study and technology transfer involving transfer of software--Fees for technical services taxable under DTAA--Income-tax Act, 1961, s. 9(1)(vii)--Double Taxation Avoidance Agreement between India and Sri Lanka, arts. 7, 12, 22-- Lanka Hydraulic Institute Ltd ., In re . . . 47

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Code of Criminal Procedure, 1973 :

S. 245 --Offences and prosecution--Wealth-tax--Wilful failure to file return on time--Not a continuing offence--Condition precedent for prosecution--Sanction for prosecution--Sanction accorded without application of mind--No evidence that default was wilful--Prosecution not valid-- J. Jayalalitha v. Asst. CWT (Mad) . . . 1

Double Taxation Avoidance Agreement between India and Sri Lanka :

Arts. 7, 12, 22 --Non-resident--Resident of Sri Lanka--Services involving field data collection, desk study and mathematical model study and technology transfer involving transfer of software--Fees for technical services taxable under DTAA-- Lanka Hydraulic Institute Ltd ., In re (AAR) . . . 47

Double Taxation Avoidance Agreement between India and Switzerland :

Art. 9 --Business expenditure--Disallowance--Excessive or unreasonable payments--Remuneration/royalty paid to subsidiaries for technical assistance--Finding that such assistance essential for business--Finding that expenditure not excessive or unreasonable--Deductible--Section 92 does not apply to royalty which is not part of regular business between resident and non-resident-- CIT v. Nestle India Ltd .(Delhi) . . . 103

Income-tax Act, 1961 :

S. 2(24)(ix) --Assessing Officer--Powers--Order giving effect to order of Tribunal--No jurisdiction to go beyond order of Tribunal--Winnings from television game show--Order of Tribunal holding not taxable under section 115BB prior to 1-4-2002--Assessing Officer not entitled to tax as income from other sources while giving effect to order of Tribunal-- Miss Lopamudra Misra v. Asst. CIT (Orissa) . . . 92

S. 2(24)(ix), Expln. (ii) --Income--Definition--Winnings from television game show--Included within definition with effect from assessment year 2002-03--Winnings in earlier period not taxable--Matter remanded-- Miss Lopamudra Misra v. Asst. CIT (Orissa) . . . 86

S. 9(1)(vii) --Non-resident--Resident of Sri Lanka--Services involving field data collection, desk study and mathematical model study and technology transfer involving transfer of software--Fees for technical services taxable under DTAA-- Lanka Hydraulic Institute Ltd ., In re (AAR) . . . 47

S. 9(1)(vii), Expln. 2 --Non-resident--Prospecting for or extraction of mineral oils--Special provisions for computation of income--Time charter vessels hired by non-resident to company carrying out offshore drilling and support services for ONGC--Not technical service--Income to be computed under special provisions--Tax to be withheld at rate of 4.22 per cent.-- Bourbon Offshore Asia Pte. Ltd ., In re (AAR) . . . 122

S. 10(23C)(iv) --Exemption--Charitable institution--Exemption under section 10(23C)(iv)--Order of court to withdraw utilization/investment and utilize/invest those funds in terms of section 11(5) for entitlement to benefit--Assessee complying with direction--Assessee entitled to exemption-- Export Promotion Council for Handi-crafts v. Director General of Income-tax (Exemptions) (Delhi) . . . 26

S. 23 --Income from house property--Deduction--Vacancy--Law applicable--Effect of insertion of clause (c) in section 23(1)--Property not let out at all--Deduction for vacancy not allowable-- Vivek Jain v. Asst. CIT (AP) . . . 74

S. 37 --Business expenditure--Disallowance--Excessive or unreasonable payments--Remuneration/royalty paid to subsidiaries for technical assistance--Finding that such assistance essential for business--Finding that expenditure not excessive or unreasonable--Deductible--Section 92 does not apply to royalty which is not part of regular business between resident and non-resident-- CIT v. Nestle India Ltd . (Delhi) . . . 103

S. 40A(2) --Business expenditure--Disallowance--Excessive or unreasonable payments--Remuneration/royalty paid to subsidiaries for technical assistance--Finding that such assistance essential for business--Finding that expenditure not excessive or unreasonable--Deductible--Section 92 does not apply to royalty which is not part of regular business between resident and non-resident-- CIT v. Nestle India Ltd .(Delhi) . . . 103

S. 44BB --Non-resident--Prospecting for or extraction of mineral oils--Special provisions for computation of income--Time charter vessels hired by non-resident to company carrying out offshore drilling and support services for ONGC--Not technical service--Income to be computed under special provisions--Tax to be withheld at rate of 4.22 per cent.-- Bourbon Offshore Asia Pte. Ltd ., In re (AAR) . . . 122

S. 45 --Capital gains--Computation--Deduction--Cost of acquisition--Sale of original shares and bonus shares--Cost of acquisition to be spread over original and bonus shares-- M. B. and Co. Ltd . v. Asst. CIT (Mad) . . . 29

S. 48 --Non-resident--Long-term capital gains--Rate of tax--Transfer of equity shares in Indian company to another non-resident by off-market mode--Lower rate of tax of 10 per cent. not available-- Cairn U. K. Holdings Ltd ., In re(AAR) . . . 131

S. 55(2)(b)(i) --Capital gains--Computation--Deduction--Cost of acquisition--Sale of original shares and bonus shares--Cost of acquisition to be spread over original and bonus shares-- M. B. and Co. Ltd . v. Asst. CIT (Mad) . . . 29

S. 80-IB --Revision--Commissioner--Industrial undertaking--Special deduction--Allowance of deduction without determination year of commencement of business--Commissioner directing Assessing Officer to decide year of commencement of business--Tribunal on merits holding in favour of assessee--Not proper-- CIT v. Eastern Medikit Ltd . (Delhi) . . . 56

S. 92 --Business expenditure--Disallowance--Excessive or unreasonable payments--Remuneration/royalty paid to subsidiaries for technical assistance--Finding that such assistance essential for business--Finding that expenditure not excessive or unreasonable--Deductible--Section 92 does not apply to royalty which is not part of regular business between resident and non-resident-- CIT v. Nestle India Ltd . (Delhi) . . . 103

S. 112(1) --Non-resident--Long-term capital gains--Rate of tax--Transfer of equity shares in Indian company to another non-resident by off-market mode--Lower rate of tax of 10 per cent. not available-- Cairn U. K. Holdings Ltd ., In re (AAR) . . . 131

S. 115BB --Assessing Officer--Powers--Order giving effect to order of Tribunal--No jurisdiction to go beyond order of Tribunal--Winnings from television game show--Order of Tribunal holding not taxable under section 115BB prior to 1-4-2002--Assessing Officer not entitled to tax as income from other sources while giving effect to order of Tribunal-- Miss Lopamudra Misra v. Asst. CIT (Orissa) . . . 92

----Income--Definition--Winnings from television game show--Included within definition with effect from assessment year 2002-03--Winnings in earlier period not taxable--Matter remanded-- Miss Lopamudra Misra v. Asst. CIT (Orissa) . . . 86

S. 124(4) --Assessment--Assessing Officer--Jurisdiction--Objection to jurisdiction cannot be raised after assessment is completed--Assessing Officer having jurisdiction when he commenced assessment proceedings--Subsequent transfer of case from him--Assessment completed by same Assessing Officer--Plea of want of jurisdiction could not be raised in appeal--No evidence of prejudice to assessee--Assessment valid-- CIT v. British India Corporation Ltd. (All) . . . 64

S. 245R(2) --Advance ruling--Authority--Bound by decisions of Supreme Court--Application for ruling not to be kept pending on ground special leave petition against decision of High Court pending on similar point-- LS Cable Ltd. , In re (AAR) . . . 35

S. 245S --Advance ruling--Precedent--Binding only on parties to ruling--Authority not precluded from looking at issue afresh in another application-- Cairn U. K. Holdings Ltd ., In re (AAR) . . . 131

S. 263 --Revision--Commissioner--Industrial undertaking--Special deduction--Allowance of deduction without determination year of commencement of business--Commissioner directing Assessing Officer to decide year of commencement of business--Tribunal on merits holding in favour of assessee--Not proper-- CIT v. Eastern Medikit Ltd . (Delhi) . . . 56

Weatlh-tax Act, 1957 :

Ss. 35B, 35-O --Offences and prosecution--Wealth-tax--Wilful failure to file return on time--Not a continuing offence--Condition precedent for prosecution--Sanction for prosecution--Sanction accorded without application of mind--No evidence that default was wilful--Prosecution not valid-- J. Jayalalitha v. Asst. CWT (Mad) . . . 1

CA.RAJU SHAH

Extension of last date for submission of declaration of MEF 2011-12

Madam/Dear Sir,

 

This is to inform that last date for submission of hard copy of the Declaration of MEF2011-12 has been extended upto 15^th September, 2011.

 

Regards
 
CA. Namrata Khandelwal
Secretary, 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 30110411
Telephone - Board +91 11 39893989 Extn: 411
Fax: +91 (11) - 30110583
Website: www.icai.org