ITR (TRIB) Volume 47 : Part 1 (Issue dated : 4-4-2016)

 

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

ONLINE EDITION

SUBJECT INDEX TO CASES REPORTED

Appeal to Commissioner (Appeals) --Additional ground--Provision for bad and doubtful debts and advances--Claim to deduction from book profits made for first time--No material to show whether sums added back to book profits in earlier years--Assessing Officer to verify--Income-tax Act, 1961, s. 115JA-- Asst. CIT v. Philips Electronics India Ltd. (Kolkata) . . . 269

Charitable purpose --Exemption--Restoration of registration--Claim of exemption to be decided afresh by Assessing Officer--Matter remanded--Income-tax Act, 1961, ss. 11, 12A--Bombay Chamber of Commerce and Industry v. ITO (Exemption) 
(Mumbai) . . . 260

----Registration of trusts--Cancellation of registration--No change in main object of assessee subsequent to grant of registration--No material to show activities of assessee not genuine or not carried out in accordance with its object--Cancellation of registration not proper--Income-tax Act, 1961, ss. 2(15), 12A, 12AA(3)-- Bombay Chamber of Commerce and Industry v. ITO (Exemption) 
(Mumbai) . . . 260

Company --Book profits--Ascertained liability--Provision for incremental wages based on actual workings and based on minimum liability--Negotiations with labour union would only result in payment of higher wages or result in wages already provided--Ascertained liability--Not includible--Income-tax Act, 1961, s. 115JA-- Asst. CIT v. Philips Electronics India Ltd.(Kolkata) . . . 269

----Book profit--Computation--Retrospective amendment in section 115JA--Provision for doubtful debts and advances--Includible--Income-tax Act, 1961, s. 115JA, Expln-- Asst. CIT v. Philips Electronics India Ltd. 
(Kolkata) . . . 269

----Book profits--Dividend--Disallowance under section 14A not debited into profit and loss account--Artificial disallowance--Not includible--Income-tax Act, 1961, s. 115JA-- Asst. CIT v. Philips Electronics India Ltd. (Kolkata) . . . 269

----Book profits--Provision--Provision for loss on proposed restructuring of business--Not a provision but only amount actually restated in books by bringing value of fixed assets to the extent of its realisable value--Not includible--Income-tax Act, 1961, s. 115JA-- Asst. CIT v. Philips Electronics India Ltd. (Kolkata) . . . 269

Income --Income or capital--Foreign currency transactions--Restatement at end of accounting year on basis of fluctuation in rate of foreign exchange--Gains not taxable if foreign currency transactions undertaken on capital account but taxable if on revenue account--Actual payment not relevant--Assessing Officer to re-do assessment--Matter remanded--Income-tax Act, 1961-- R Systems International Ltd. v. Asst. CIT 
(Delhi) . . . 289

Reassessment --Notice--Assessing Officer--Powers--No power to make addition other than on grounds stated in reasons recorded--Income-tax Act, 1961, ss. 147, 148-- Gennex Cresa Partners Consultants Pvt. Ltd. v. ITO (Mumbai) . . . 294

----Notice--Subjective satisfaction of Assessing Officer on basis of relevant material sufficient--Conclusion of escapement of income ascertained finally--Income-tax Act, 1961, ss. 147, 148-- Asst. CIT v. Philips Electronics India Ltd. 
(Kolkata) . . . 269

 

PRINT EDITION

Volume 47 : Part 1 (Issue dated : 4-4-2016)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Anonymous donations --Special rate of tax--Exception--Religious trust--Trust for religious and charitable purposes--Religious purpose includes relief to poor, education and medical relief--No anonymous donation received with specific direction--Special rate not attracted--Income-tax Act, 1961, s. 115BBC-- Deputy CIT v. All India Pingalwara Charitable Society(Amritsar) . . . 1

Business expenditure --Disallowance--Excessive and unreasonable payments--Processing of material and handling charges--Payments to sister concerns not more than fair market value--Activities under supervision of Excise Department--Recipient company paying maximum marginal rate of tax--Similar claim allowed in subsequent year--Expenses allowable--Income-tax Act, 1961, s. 40A(2)(b)-- JLC Electromet P. Ltd. v. Addl. CIT (Jaipur) . . . 85

----Disallowance--Payments for unlawful purpose--Clearing and forwarding agent--Dock workers--Commission--Assessee making payments on behalf of its clients as an incentive to dock workers to get loading and unloading done quickly--Books of account not sole determinative factor to decide nature of expenditure--No prohibition in law to make such payments--Factum of amount paid not disproved--Payments deductible--Income-tax Act, 1961, s. 37(1), Expln -- D. H. Patkar and Co. v. ITO
(Mumbai) . . . 82

----Interest charged by bank on fixed deposits prematurely encashed--Liability pertained to earlier year but claim in subsequent year--Matter remanded--Income-tax Act, 1961, s. 37--JLC Electromet P. Ltd. v. Addl. CIT (Jaipur) . . . 85

----Prior period expenses--Failure to prove whether expenses crystallised--Not allowable--Income-tax Act, 1961, s. 37-- JLC Electromet P. Ltd. v. Addl. CIT
(Jaipur) . . . 85

----Staff welfare expenses--Assessee producing bills and vouchers--Disallowance on conjectures and surmises--Impermissible--Income-tax Act, 1961, s. 37-- JLC Electromet P. Ltd. v. Addl. CIT (Jaipur) . . . 85

Exemption --Educational institution--Scope of section 10(23C)--Assessee a school managed by education board and filing returns in status of association of persons--Meaning of word “institution†includes school--Assessee an “institution†--Entitled to exemption--Income-tax Act, 1961, s. 10(23C)(vi)-- Sengunthar Matriculation Higher Secondary School v. Chief CIT (Chennai) . . . 107

Housing project --Special deduction--Appeal to Appellate Tribunal--Whether manufacturing process carried on by assessee with aid of power--Tribunal remanding matter without finding in absence of technical expert opinion--Authorities after remand finding assessee carried on manufacturing process without aid of power--Additional evidence in the form of certificate issued by Institute of Chemical Technology--Evidence admitted as vital and essential for resolving controversy and going to root of matter for resolving dispute--Income-tax Act, 1961, ss. 80-IB, 255(6)--Income-tax (Appellate Tribunal) Rules, 1963, r. 29-- Kishore Ramchandani v . ITO (Mumbai) . . . 134

Income from house property --Deductions--Interest--No condition property must be acquired as well as constructed with borrowed capital--Acquisition of property by borrowing loan--Interest deductible--Income-tax Act, 1961, s. 24(b)-- Mrs. Samiksha Mahajan v. Asst. CIT(Delhi) . . . 59

International transactions --Arm’s length price--Determination--Claim that total adjustment made to arm’s length price should be restricted to overall income earned by associated enterprises from third parties--Absence of necessary information such as average selling expenses in line of commercial activity--Matter remanded for re-examination--Income-tax Act, 1961-- Fortune Infotech Ltd. v. Asst. CIT
(Ahd) . . . 113

----Arm’s length price--Determination--Selection of comparables--Claim of exclusion of three comparables--Order of Dispute Resolution Panel reaching finality--Claim academic--Comparables cannot be excluded--Income-tax Act, 1961-- Fortune Infotech Ltd. v. Asst. CIT(Ahd) . . . 113

----Arm’s length price--Determination--Selection of comparables--Higher employee cost--Failure by assessee to prove underutilised capacity with reasonable precision and quantification--Adjustment cannot be made--Income-tax Act, 1961-- Fortune Infotech Ltd. v. Asst. CIT (Ahd) . . . 113

----Arm’s length price--Determination--Selection of most appropriate method--Availability, coverage and reliability of data necessary for application of method--Single comparable and assessee continuing to work for associated enterprise in spite of huge loss--Data not reliable--Internal transactional net margin method not most appropriate method on facts of case--Income-tax Act, 1961, s. 92C--Income-tax Rules, 1962, r. 10C-- Fortune Infotech Ltd. v. Asst. CIT (Ahd) . . . 113

Penalty --Concealment of income--Deemed dividend--Advance from sister concern--Disclosure of particulars of shareholding pattern, advances taken and given in return--Advances in course of regular business--Not deemed dividend--Debatable issue--Penalty cannot be imposed--Income-tax Act, 1961, ss. 2(22)(e), 271(1)(c)-- Trimurty Buildcon P. Ltd. v. Deputy CIT (Jaipur) . . . 50

----Failure to deduct tax at source--Royalty and fees for technical services--Technology must be made available--Payments for engineering and draughting services--Technology not made available--Payments not fees for technical service--Payments for purchase of shrink wrapped software--Contradictory decisions of High Courts and Benches of Tribunal as to whether tax deductible on payments therefor--Assessee based upon certificate of chartered accountant taking one of possible views--Reasonable cause for not deducting tax at source on payments--Penalty not imposable--Income-tax Act, 1961, ss. 271C, 273B-- Addl. DIT (International Taxation) v. Leighton Welspun Contractors P. Ltd. (Mumbai) . . . 97

Reassessment --Notice--No fresh tangible material in possession of Assessing Officer when recording reasons--Reassessment not valid--Income-tax Act, 1961, ss. 147, 148--Motilal R. Todi v . Asst. CIT (Mumbai) . . . 149

----Notice after four years--Condition precedent--No indication in reasons recorded about failure on part of assessee to disclose fully and truly all material facts necessary for assessment--Reassessment not valid--Income-tax Act, 1961, ss. 147, 148-- Apeejay Education Society v. Asst. CIT (Amritsar) . . . 33

----Procedure--Reasons for reassessment must be furnished to assessee before completion of reassessment--Pre-requisite condition--No reasons available in assessment record--Nothing to show that certified copy of reasons provided to assessee, despite request--Reassessment invalid--Income-tax Act, 1961, ss. 147, 148-- Muller and Philpps (India) Ltd. v. ITO (Mumbai) . . . 69

Special deduction --Repayment of loan for acquisition or construction of residential property--Property acquired and constructed by borrowing loan--Repayment of loan--Deductible--Income-tax Act, 1961, s. 80C-- Mrs. Samiksha Mahajan v. Asst. CIT
(Delhi) . . . 59

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961

S. 2(22)(e) --Penalty--Concealment of income--Deemed dividend--Advance from sister concern--Disclosure of particulars of shareholding pattern, advances taken and given in return--Advances in course of regular business--Not deemed dividend--Debatable issue--Penalty cannot be imposed-- Trimurty Buildcon P. Ltd. v. Deputy CIT (Jaipur) . . . 50

S. 10(23C)(vi) --Exemption--Educational institution--Scope of section 10(23C)--Assessee a school managed by education board and filing returns in status of association of persons--Meaning of word “institution†includes school--Assessee an “institution†--Entitled to exemption-- Sengunthar Matriculation Higher Secondary School v. Chief CIT (Chennai) . . . 107

S. 24(b) --Income from house property--Deductions--Interest--No condition property must be acquired as well as constructed with borrowed capital--Acquisition of property by borrowing loan--Interest deductible-- Mrs. Samiksha Mahajan v. Asst. CIT
(Delhi) . . . 59

S. 37 --Business expenditure--Interest charged by bank on fixed deposits prematurely encashed--Liability pertained to earlier year but claim in subsequent year--Matter remanded--JLC Electromet P. Ltd. v. Addl. CIT (Jaipur) . . . 85

----Business expenditure--Prior period expenses--Failure to prove whether expenses crystallised--Not allowable-- JLC Electromet P. Ltd. v. Addl. CIT
(Jaipur) . . . 85

----Business expenditure--Staff welfare expenses--Assessee producing bills and vouchers--Disallowance on conjectures and surmises--Impermissible-- JLC Electromet P. Ltd. v. Addl. CIT (Jaipur) . . . 85

S. 37(1), Expln --Business expenditure--Disallowance--Payments for unlawful purpose--Clearing and forwarding agent--Dock workers--Commission--Assessee making payments on behalf of its clients as an incentive to dock workers to get loading and unloading done quickly--Books of account not sole determinative factor to decide nature of expenditure--No prohibition in law to make such payments--Factum of amount paid not disproved--Payments deductible-- D. H. Patkar and Co. v. ITO
(Mumbai) . . . 82

S. 40A(2)(b) --Business expenditure--Disallowance--Excessive and unreasonable payments--Processing of material and handling charges--Payments to sister concerns not more than fair market value--Activities under supervision of Excise Department--Recipient company paying maximum marginal rate of tax--Similar claim allowed in subsequent year--Expenses allowable-- JLC Electromet P. Ltd. v. Addl. CIT
(Jaipur) . . . 85

S. 80C --Special deduction--Repayment of loan for acquisition or construction of residential property--Property acquired and constructed by borrowing loan--Repayment of loan--Deductible-- Mrs. Samiksha Mahajan v. Asst. CIT (Delhi) . . . 59

S. 80-IB --Housing project--Special deduction--Appeal to Appellate Tribunal--Whether manufacturing process carried on by assessee with aid of power--Tribunal remanding matter without finding in absence of technical expert opinion--Authorities after remand finding assessee carried on manufacturing process without aid of power--Additional evidence in the form of certificate issued by Institute of Chemical Technology--Evidence admitted as vital and essential for resolving controversy and going to root of matter for resolving dispute-- Kishore Ramchandani v . ITO
(Mumbai) . . . 134

S. 92C --International transactions--Arm’s length price--Determination--Selection of most appropriate method--Availability, coverage and reliability of data necessary for application of method--Single comparable and assessee continuing to work for associated enterprise in spite of huge loss--Data not reliable--Internal transactional net margin method not most appropriate method on facts of case-- Fortune Infotech Ltd. v. Asst. CIT (Ahd) . . . 113

S. 115BBC --Anonymous donations--Special rate of tax--Exception--Religious trust--Trust for religious and charitable purposes--Religious purpose includes relief to poor, education and medical relief--No anonymous donation received with specific direction--Special rate not attracted-- Deputy CIT v. All India Pingalwara Charitable Society (Amritsar) . . . 1

S. 147 --Reassessment--Notice--No fresh tangible material in possession of Assessing Officer when recording reasons--Reassessment not valid-- Motilal R. Todi v . Asst. CIT(Mumbai) . . . 149

----Reassessment--Notice after four years--Condition precedent--No indication in reasons recorded about failure on part of assessee to disclose fully and truly all material facts necessary for assessment--Reassessment not valid-- Apeejay Education Society v. Asst. CIT (Amritsar) . . . 33

----Reassessment--Procedure--Reasons for reassessment must be furnished to assessee before completion of reassessment--Pre-requisite condition--No reasons available in assessment record--Nothing to show that certified copy of reasons provided to assessee, despite request--Reassessment invalid-- Muller and Philpps (India) Ltd. v. ITO (Mumbai) . . . 69

S. 148 --Reassessment--Notice--No fresh tangible material in possession of Assessing Officer when recording reasons--Reassessment not valid-- Motilal R. Todi v . Asst. CIT(Mumbai) . . . 149

----Reassessment--Notice after four years--Condition precedent--No indication in reasons recorded about failure on part of assessee to disclose fully and truly all material facts necessary for assessment--Reassessment not valid-- Apeejay Education Society v. Asst. CIT (Amritsar) . . . 33

----Reassessment--Procedure--Reasons for reassessment must be furnished to assessee before completion of reassessment--Pre-requisite condition--No reasons available in assessment record--Nothing to show that certified copy of reasons provided to assessee, despite request--Reassessment invalid-- Muller and Philpps (India) Ltd. v. ITO (Mumbai) . . . 69

S. 255(6) --Housing project--Special deduction--Appeal to Appellate Tribunal--Whether manufacturing process carried on by assessee with aid of power--Tribunal remanding matter without finding in absence of technical expert opinion--Authorities after remand finding assessee carried on manufacturing process without aid of power--Additional evidence in the form of certificate issued by Institute of Chemical Technology--Evidence admitted as vital and essential for resolving controversy and going to root of matter for resolving dispute-- Kishore Ramchandani v . ITO
(Mumbai) . . . 134

S. 271C --Penalty--Failure to deduct tax at source--Royalty and fees for technical services--Technology must be made available--Payments for engineering and draughting services--Technology not made available--Payments not fees for technical service--Payments for purchase of shrink wrapped software--Contradictory decisions of High Courts and Benches of Tribunal as to whether tax deductible on payments therefor--Assessee based upon certificate of chartered accountant taking one of possible views--Reasonable cause for not deducting tax at source on payments--Penalty not imposable-- Addl. DIT (International Taxation) v. Leighton Welspun Contractors P. Ltd.
(Mumbai) . . . 97

S. 271(1)(c) --Penalty--Concealment of income--Deemed dividend--Advance from sister concern--Disclosure of particulars of shareholding pattern, advances taken and given in return--Advances in course of regular business--Not deemed dividend--Debatable issue--Penalty cannot be imposed-- Trimurty Buildcon P. Ltd. v. Deputy CIT (Jaipur) . . . 50

S. 273B --Penalty--Failure to deduct tax at source--Royalty and fees for technical services--Technology must be made available--Payments for engineering and draughting services--Technology not made available--Payments not fees for technical service--Payments for purchase of shrink wrapped software--Contradictory decisions of High Courts and Benches of Tribunal as to whether tax deductible on payments therefor--Assessee based upon certificate of chartered accountant taking one of possible views--Reasonable cause for not deducting tax at source on payments--Penalty not imposable-- Addl. DIT (International Taxation) v. Leighton Welspun Contractors P. Ltd.
(Mumbai) . . . 97

Income-tax Rules, 1962

R. 10C --International transactions--Arm’s length price--Determination--Selection of most appropriate method--Availability, coverage and reliability of data necessary for application of method--Single comparable and assessee continuing to work for associated enterprise in spite of huge loss--Data not reliable--Internal transactional net margin method not most appropriate method on facts of case-- Fortune Infotech Ltd. v. Asst. CIT (Ahd) . . . 113

Income-tax (Appellate Tribunal) Rules, 1963

R. 29 --Housing project--Special deduction--Appeal to Appellate Tribunal--Whether manufacturing process carried on by assessee with aid of power--Tribunal remanding matter without finding in absence of technical expert opinion--Authorities after remand finding assessee carried on manufacturing process without aid of power--Additional evidence in the form of certificate issued by Institute of Chemical Technology--Evidence admitted as vital and essential for resolving controversy and going to root of matter for resolving dispute-- Kishore Ramchandani v . ITO (Mumbai) . . . 134

 

 

ITR Volume 382 : Part 4 (Issue dated : 11-4-2016)

 

INCOME TAX REPORTS (ITR)--PRINT AND ONLINE EDITION

ONLINE EDITION

SUBJECT INDEX TO CASES REPORTED

HIGH COURTS

Reassessment --Reason to believe income has escaped assessment--Assessing Officer must form belief independently--Notice merely based on audit report--Failure by Assessing Officer to undertake independent exercise--Reasons for reopening of assessment not placed on record before Tribunal--Reassessment not proper--Income-tax Act, 1961, ss. 69C, 147, 148, 153-- CIT v. DRM Enterprises (Bom) . . . 412

 

PRINT EDITION

ITR Volume 382 : Part 4 (Issue dated : 11-4-2016)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Accounting --Method of accounting--Assessee consistently following project completion method--Expenses of construction not debited to profit and loss account of assessee and shown as cost of construction of block of buildings--Assessee offering tax in subsequent financial year--No actual loss to Revenue--Income-tax Act, 1961, s. 145-- Paras Buildtech India P. Ltd. v. CIT (Delhi) . . . 630

----Rejection of accounts--Assessee receiving advances in respect of project that never took off--Part of advance returned in following financial year--Income not to be taxed in hands of assessee--No purpose in remanding matter to Assessing Officer--Income-tax Act, 1961, s. 145-- Paras Buildtech India P. Ltd. v. CIT (Delhi) . . . 630

Advance tax --Interest--Waiver--Power of Chief Commissioner to grant--Directions of Central Board of Direct Taxes --Assessee declaring sale of property but not disclosing capital gains thereon--Failure to disclose not due to unavoidable circumstances--Denial of waiver proper--Income-tax Act, 1961, ss. 119(2)(a), 234B-- Arun Sunny v. Chief CIT (Ker) . . . 533

Appeal to Appellate Tribunal --Application for recall of order--Inordinate delay in filing application--Rejection of application justified--Income-tax Act, 1961-- CIT v. State Bank of Hyderabad (T&AP) . . . 499

Appellate Tribunal --International transactions--Arm’s length price--Determination--Three comparables accepted for subsequent assessment year submitted by assessee before Commissioner (Appeals)--Appellate Tribunal--Refusal to consider--Not proper--Direction to remand matter to Transfer Pricing Officer for consideration of comparables--Income-tax Act, 1961, s. 92C-- Advance Power Display Systems Ltd. v. CIT (Bom) . . . 607

Business expenditure --Commission--Uncontroverted statements of witness--Assessee refusing to cross examine witness despite being granted opportunity--No violation of principles of natural justice--Sufficient adverse inference against assessee that payments of commission were fictitious--Disallowance of commission justified--Income-tax Act, 1961--Roger Enterprises P. Ltd. v. CIT (Delhi) . . . 639

----Travel expenses of director outside India--Assessee doing job work manufacture for one entity in Singapore--Deduction of foreign travel expenses restricted to country where buyer situated--Proper--Income-tax Act, 1961, s. 37-- Advance Power Display Systems Ltd. v. CIT(Bom) . . . 607

Capital or revenue expenditure --Tests--Depreciation--Effect of Explanation 1 to section 32(1)(i)--Expenditure incurred for construction of superstructures and setting up of workshop facilities on leasehold premises--Whether expenditure capital or revenue to be decided on facts of each case by applying relevant tests--Ratio expressed by Division Bench lays down correct law and does not need reconsideration--Income-tax Act, 1961, ss. 32(1), Expln. 1 , 37-- Indus Motors Co. P. Ltd. v. Deputy CIT [FB] (Ker) . . . 503

Charitable purposes --Registration of trust--Objectives of trust to be considered as a whole, and not in isolation--Intention of settler or executor cannot decide nature of trust--Tribunal to consider purpose and objectives of trust in light of trust deed and other documents--Matter remanded--Income-tax Act, 1961, ss. 12A, 80G(5)(vi)-- Bangalore Urban and Rural District Co-operative Milk Producers Societies Members and Employees Welfare Trust Bangalore Milk Union Ltd. v. DIT (Exemptions) (Karn) . . . 528

Exemption --Death-cum-retirement gratuity--Cash equivalent of leave salary--Meaning of salary for purposes of section 10(10) and (10AA)--Definition of salary in rule 2(h) of Part A of Fourth Schedule applies--Income-tax Act, 1961, s. 10(10), (10AA), Fourth Schedule, Part A, r. 2(h)-- Harbans Singh v. CIT (P&H) . . . 600

Income-tax --General principles--Rights of assessee-- CIT v. State Bank of Hyderabad(T&AP) . . . 499

Interpretation of taxing statutes -- Explanation 1 to section 32(1)(i)--Strict interpretation--Indus Motors Co. P. Ltd. v. Deputy CIT [FB] (Ker) . . . 503

Penalty --Concealment of income--Nothing on record to demonstrate nature of service rendered by companies to whom commission paid--Onus on assessee to prove genuineness of commission payments--Assessee failing to discharge--Essential conditions for levying penalty fulfilled--Income-tax Act, 1961, s. 271(1)(c)-- Roger Enterprises P. Ltd. v. CIT (Delhi) . . . 639

Reassessment --Condition precedent--Opinion that income had escaped assessment must be that of Assessing Officer--Notice based on review of assessment order by Commissioner--Not valid--Notice should give reasons--Notice cannot be improved by affidavits and other reasons--Income-tax Act, 1961, ss. 147, 148-- Munjal Showa Ltd. v.Deputy CIT (Delhi) . . . 555

----Notice--Industrial undertaking--Special deduction--Condition precedent for reassessment--Reason to believe that income chargeable to tax had escaped assessment--Issued on which reasons based considered in original assessment--Reopening of assessment without jurisdiction--Obligation of assessee only to disclose primary facts necessary for assessment--Assessee disclosing truly and fully all material facts--Reopening of assessment not warranted--Income-tax Act, 1961, ss. 80-IA, 148-- CIT (LTU) v. Reliance Industries Ltd. (Bom) . . . 574

----Notice--Service of valid notice within limitation--Condition precedent for reassessment--Burden of proof of service of notice on Department--Participation in reassessment proceedings by representative of assessee does not result in waiver of necessity of service of notice--Objection raised to non-service of notice--Reassessment proceedings ignoring objection--Notice and consequent reassessment not valid--Income-tax Act, 1961, ss. 147, 148-- CIT v. Chetan Gupta (Delhi) . . . 613

----Notice--Validity--Conditions precedent--Reasons recorded for reopening assessment should state failure by assessee to disclose fully and truly all material facts necessary for his assessment and should provide live link to formation of belief that income has escaped assessment--Essential requirement not satisfied--Notice to be quashed--Income-tax Act, 1961, ss. 147, 148-- Sabharwal Properties Industries P. Ltd. v. ITO (Delhi) . . . 547

----Notice after four years--Failure to disclose material facts necessary for assessment--Complete details furnished during original assessment proceedings--Notice not valid--Income-tax Act, 1961, ss. 147, 148-- Munjal Showa Ltd. v. Deputy CIT (Delhi) . . . 555

----Validity--Returns not disclosing unabsorbed depreciation and business losses carried forward--Assessment order on 31-12-2010 and order of rectification on 6-9-2011--Assessment order merging in order of rectification--Notice of reassessment on 10-12-2013--Notice not beyond four years--Notice and consequent reassessment--Valid--Income-tax Act, 1961, ss. 147, 148-- PVP Ventures Ltd. v. Asst. CIT (Mad) . . . 582

Tea development allowance --Computation of allowance--Mode of computation--Composite income--Apportionment of agricultural income and non-agricultural income--Deduction to be allowed from total composite income derived from growing and manufacturing tea--Rule 8 shall apply thereafter to apportion resultant income--Income-tax Act, 1961, s. 33AB--Income-tax Rules, 1962, r. 8-- Singlo (India) Tea Ltd. v. CIT (Cal) . . . 537

Writ --Power of Chief Commissioner to waive interest--Court cannot direct waiver--Constitution of India, art. 226-- Arun Sunny v. Chief CIT (Ker) . . . 533

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Constitution of India :

Art. 226 --Writ--Power of Chief Commissioner to waive interest--Court cannot direct waiver--Arun Sunny v. Chief CIT (Ker) . . . 533

Income-tax Act, 1961 :

S. 10(10), (10AA), Fourth Schedule, Part A, r. 2(h) --Exemption--Death-cum-retirement gratuity--Cash equivalent of leave salary--Meaning of salary for purposes of section 10(10) and (10AA)--Definition of salary in rule 2(h) of Part A of Fourth Schedule applies-- Harbans Singh v. CIT (P&H) . . . 600

S. 12A --Charitable purposes--Registration of trust--Objectives of trust to be considered as a whole, and not in isolation--Intention of settler or executor cannot decide nature of trust--Tribunal to consider purpose and objectives of trust in light of trust deed and other documents--Matter remanded-- Bangalore Urban and Rural District Co-operative Milk Producers Societies Members and Employees Welfare Trust Bangalore Milk Union Ltd. v.DIT (Exemptions) (Karn) . . . 528

S. 32(1), Expln. 1 --Capital or revenue expenditure--Tests--Depreciation--Effect ofExplanation 1 to section 32(1)(i)--Expenditure incurred for construction of superstructures and setting up of workshop facilities on leasehold premises--Whether expenditure capital or revenue to be decided on facts of each case by applying relevant tests--Ratio expressed by Division Bench lays down correct law and does not need reconsideration-- Indus Motors Co. P. Ltd. v. Deputy CIT [FB] (Ker) . . . 503

S. 33AB --Tea development allowance--Computation of allowance--Mode of computation--Composite income--Apportionment of agricultural income and non-agricultural income--Deduction to be allowed from total composite income derived from growing and manufacturing tea--Rule 8 shall apply thereafter to apportion resultant income-- Singlo (India) Tea Ltd. v. CIT (Cal) . . . 537

S. 37 --Capital or revenue expenditure--Tests--Depreciation--Effect of Explanation 1 to section 32(1)(i)--Expenditure incurred for construction of superstructures and setting up of workshop facilities on leasehold premises--Whether expenditure capital or revenue to be decided on facts of each case by applying relevant tests--Ratio expressed by Division Bench lays down correct law and does not need reconsideration-- Indus Motors Co. P. Ltd.v. Deputy CIT [FB] (Ker) . . . 503

----Business expenditure--Travel expenses of director outside India--Assessee doing job work manufacture for one entity in Singapore--Deduction of foreign travel expenses restricted to country where buyer situated--Proper-- Advance Power Display Systems Ltd. v.CIT (Bom) . . . 607

S. 80G(5)(vi) --Charitable purposes--Registration of trust--Objectives of trust to be considered as a whole, and not in isolation--Intention of settler or executor cannot decide nature of trust--Tribunal to consider purpose and objectives of trust in light of trust deed and other documents--Matter remanded-- Bangalore Urban and Rural District Co-operative Milk Producers Societies Members and Employees Welfare Trust Bangalore Milk Union Ltd. v.DIT (Exemptions) (Karn) . . . 528

S. 80-IA --Reassessment--Notice--Industrial undertaking--Special deduction--Condition precedent for reassessment--Reason to believe that income chargeable to tax had escaped assessment--Issued on which reasons based considered in original assessment--Reopening of assessment without jurisdiction--Obligation of assessee only to disclose primary facts necessary for assessment--Assessee disclosing truly and fully all material facts--Reopening of assessment not warranted-- CIT (LTU) v. Reliance Industries Ltd. (Bom) . . . 574

S. 92C --Appellate Tribunal--International transactions--Arm’s length price--Determination--Three comparables accepted for subsequent assessment year submitted by assessee before Commissioner (Appeals)--Appellate Tribunal--Refusal to consider--Not proper--Direction to remand matter to Transfer Pricing Officer for consideration of comparables-- Advance Power Display Systems Ltd. v. CIT (Bom) . . . 607

S. 119(2)(a) --Advance tax--Interest--Waiver--Power of Chief Commissioner to grant--Directions of Central Board of Direct Taxes --Assessee declaring sale of property but not disclosing capital gains thereon--Failure to disclose not due to unavoidable circumstances--Denial of waiver proper-- Arun Sunny v. Chief CIT (Ker) . . . 533

S. 145 --Accounting--Method of accounting--Assessee consistently following project completion method--Expenses of construction not debited to profit and loss account of assessee and shown as cost of construction of block of buildings--Assessee offering tax in subsequent financial year--No actual loss to Revenue-- Paras Buildtech India P. Ltd. v. CIT(Delhi) . . . 630

----Accounting--Rejection of accounts--Assessee receiving advances in respect of project that never took off--Part of advance returned in following financial year--Income not to be taxed in hands of assessee--No purpose in remanding matter to Assessing Officer-- Paras Buildtech India P. Ltd. v. CIT (Delhi) . . . 630

S. 147 --Reassessment--Condition precedent--Opinion that income had escaped assessment must be that of Assessing Officer--Notice based on review of assessment order by Commissioner--Not valid--Notice should give reasons--Notice cannot be improved by affidavits and other reasons-- Munjal Showa Ltd. v. Deputy CIT (Delhi) . . . 555

----Reassessment--Notice--Service of valid notice within limitation--Condition precedent for reassessment--Burden of proof of service of notice on Department--Participation in reassessment proceedings by representative of assessee does not result in waiver of necessity of service of notice--Objection raised to non-service of notice--Reassessment proceedings ignoring objection--Notice and consequent reassessment not valid-- CIT v.Chetan Gupta (Delhi) . . . 613

----Reassessment--Notice--Validity--Conditions precedent--Reasons recorded for reopening assessment should state failure by assessee to disclose fully and truly all material facts necessary for his assessment and should provide live link to formation of belief that income has escaped assessment--Essential requirement not satisfied--Notice to be quashed--Sabharwal Properties Industries P. Ltd. v. ITO (Delhi) . . . 547

----Reassessment--Notice after four years--Failure to disclose material facts necessary for assessment--Complete details furnished during original assessment proceedings--Notice not valid-- Munjal Showa Ltd. v. Deputy CIT (Delhi) . . . 555

----Reassessment--Validity--Returns not disclosing unabsorbed depreciation and business losses carried forward--Assessment order on 31-12-2010 and order of rectification on 6-9-2011--Assessment order merging in order of rectification--Notice of reassessment on 10-12-2013--Notice not beyond four years--Notice and consequent reassessment--Valid-- PVP Ventures Ltd. v. Asst. CIT (Mad) . . . 582

S. 148 --Reassessment--Condition precedent--Opinion that income had escaped assessment must be that of Assessing Officer--Notice based on review of assessment order by Commissioner--Not valid--Notice should give reasons--Notice cannot be improved by affidavits and other reasons-- Munjal Showa Ltd. v. Deputy CIT (Delhi) . . . 555

----Reassessment--Notice--Industrial undertaking--Special deduction--Condition precedent for reassessment--Reason to believe that income chargeable to tax had escaped assessment--Issued on which reasons based considered in original assessment--Reopening of assessment without jurisdiction--Obligation of assessee only to disclose primary facts necessary for assessment--Assessee disclosing truly and fully all material facts--Reopening of assessment not warranted-- CIT (LTU) v. Reliance Industries Ltd. (Bom) . . . 574

----Reassessment--Notice--Service of valid notice within limitation--Condition precedent for reassessment--Burden of proof of service of notice on Department--Participation in reassessment proceedings by representative of assessee does not result in waiver of necessity of service of notice--Objection raised to non-service of notice--Reassessment proceedings ignoring objection--Notice and consequent reassessment not valid-- CIT v.Chetan Gupta (Delhi) . . . 613

----Reassessment--Notice--Validity--Conditions precedent--Reasons recorded for reopening assessment should state failure by assessee to disclose fully and truly all material facts necessary for his assessment and should provide live link to formation of belief that income has escaped assessment--Essential requirement not satisfied--Notice to be quashed--Sabharwal Properties Industries P. Ltd. v. ITO (Delhi) . . . 547

----Reassessment--Notice after four years--Failure to disclose material facts necessary for assessment--Complete details furnished during original assessment proceedings--Notice not valid-- Munjal Showa Ltd. v. Deputy CIT (Delhi) . . . 555

----Reassessment--Validity--Returns not disclosing unabsorbed depreciation and business losses carried forward--Assessment order on 31-12-2010 and order of rectification on 6-9-2011--Assessment order merging in order of rectification--Notice of reassessment on 10-12-2013--Notice not beyond four years--Notice and consequent reassessment--Valid-- PVP Ventures Ltd. v. Asst. CIT (Mad) . . . 582

S. 234B --Advance tax--Interest--Waiver--Power of Chief Commissioner to grant--Directions of Central Board of Direct Taxes --Assessee declaring sale of property but not disclosing capital gains thereon--Failure to disclose not due to unavoidable circumstances--Denial of waiver proper-- Arun Sunny v. Chief CIT (Ker) . . . 533

S. 271(1)(c) --Penalty--Concealment of income--Nothing on record to demonstrate nature of service rendered by companies to whom commission paid--Onus on assessee to prove genuineness of commission payments--Assessee failing to discharge--Essential conditions for levying penalty fulfilled-- Roger Enterprises P. Ltd. v. CIT (Delhi) . . . 639

Income-tax Rules, 1962 :

R. 8 --Tea development allowance--Computation of allowance--Mode of computation--Composite income--Apportionment of agricultural income and non-agricultural income--Deduction to be allowed from total composite income derived from growing and manufacturing tea--Rule 8 shall apply thereafter to apportion resultant income-- Singlo (India) Tea Ltd. v. CIT (Cal) . . . 537

 

__._,_.___

---

ITR Volume 382 : Part 1 (Issue dated : 21-3-2016)

INCOME TAX REPORTS (ITR)--PRINT AND ONLINE EDITION
>
> ONLINE EDITION
>
> SUBJECT INDEX TO CASES REPORTED
>
> HIGH COURTS
>
> Appeal to High Court --Jurisdiction--Territorial jurisdiction of High Court--Discretion of High Court--Order passed by Assessing Officer of Delhi--Punjab and Haryana High Court had no jurisdiction to hear appeal from order--Income-tax Act, 1961, s. 260A-- Asian Consolidated Industries Ltd. v. Asst. CIT (P&H) . . . 324
>
> Assessment --Return--Assessing Officer accepting second revised return--Commissioner (Appeals) enhancing assessment and bringing first revised income to tax--Finding of Tribunal that acceptance of second revised return in order--No application of mind--Tribunal to examine matter afresh--Matter remanded--Income-tax Act, 1961-- CIT v. DD Industries Ltd.(Delhi) . . . 294
>
> Business expenditure --Increase of interest free security deposit for lease--Assessee needing premises consistent and long standing arrangement with sister concern--Security deposit not increased for long time--No other material to establish dubiousness in transaction--Expenditure allowable as commercially expedient--Income-tax Act, 1961-- CIT v. DD Industries Ltd. (Delhi) . . . 294
>
> ----Interest on borrowed capital--Material to show that amounts not advanced in year in question--Assessee possessing mixed funds which included its own funds in sufficient quantity--Presumption that its own funds utilised for advances--Memorandum of understanding with sister concern not rejected by Assessing Officer or Commissioner (Appeals)--Balance-sheet of sister concern disclosing inventories in form of land--Advances cannot be linked with borrowed capital--Deduction of interest allowable--Income-tax Act, 1961, s. 36(1)(iii)-- CIT v. DD Industries Ltd. (Delhi) . . . 294
>
> Export --Special deduction--Computation of special deduction under section 80HHC--Effect of clause (baa) of Explanation to section 80HHC--Income from services and repairs of vessels--Finding that activities had nexus to exports--Clause (baa) of Explanation to section 80HHC not applicable--Income from hiring barges--Extraction charges of iron ore, income from sales of pig iron, vessels, engineering products, materials and coke breeze--Clause (baa) ofExplanation to section 80HHC applicable--Income-tax Act, 1961, s. 80HHC-- Sesa Goa Ltd. v.CIT (Bom) . . . 306
>
> Precedent --Effect of decision of Supreme Court in K. Ravindranathan Nair's case [2007] 295 ITR 228 (SC), Bombay High Court in Pfizer Ltd.'s case [2011] 330 ITR 62 (Bom) andDresser Rand India (P.) Ltd.'s case [2010] 323 ITR 429 (Bom)-- Sesa Goa Ltd. v. CIT (Bom) . . . 306
>
> Revision --Powers of Commissioner--Failure by Assessing Officer to ascertain facts as directed by Tribunal--Commissioner has power to set aside order--Income-tax Act, 1961, s. 263-- U. P. Forest Corporation v. CIT (All) . . . 330
>
>  
>
> PRINT EDITION
>
> ITR Volume 382 : Part 1 (Issue dated : 21-3-2016)
>
> SUBJECT INDEX TO CASES REPORTED IN THIS PART
>
> SUPREME COURT
>
> Charitable purpose --Registration of trusts--Application for registration--Decision of High Court that if application not responded to within six months assessee to be deemed registered--Supreme Court--Registration to take effect six months after date of application--Income-tax Act, 1961, s. 12AA-- CIT v. Society for the Promotion of Education . . . 6
>
> Deduction of tax at source --Interest for delayed payment of compensation for acquisition of land--Whether subject to deduction of tax at source--Failure by High Court to give reasons--Supreme Court--Matter remanded--Income-tax Act, 1961, s. 194A-- Commissioner, Belgaum Urban Development Authority v. CIT . . . 8
>
> Supreme Court --Petition for special leave to appeal--Income--Assessability--Sums collected towards apprehended sales tax liability--Finding that sums refundable and since refunded and not taxable--Business expenditure--Enhanced rent paid under agreement after machinery revamped--Finding that agreement not sham and enhanced rent deductible--Factual determination by High Court--Supreme Court will not entertain special leave petitions--Income-tax Act, 1961-- CIT v. Khoday Breweries Ltd. . . . 1
>
> HIGH COURTS
>
> Appeal to Appellate Tribunal --Power to rectify mistakes--Assessee treating interest as business income--Assessing Officer and appellate authorities treating it as income from other sources--Tribunal can examine whether order sought to be rectified has apparent error of law not limited to mistakes of fact apparent on face of record--Tribunal dismissing rectification application filed by assessee--Tribunal to examine issue in light of stand of Department in earlier and later assessment years--Rule of consistency to be followed--Matter remanded--Income-tax Act, 1961, s. 254(2)-- Promain Ltd. v. CIT (Delhi) . . . 25
>
> ----Power to remand matter--When exercised--When materials available on record, Tribunal to arrive at own conclusion--High Court remanding matter to Tribunal to decide issue applying decision of Supreme Court--Tribunal remanding matter to Assessing Officer without proper reason for remand--Not proper--Tribunal to decide issue in light of judgment of Supreme Court-- Dell International Services India P. Ltd. v. Asst. CIT (Karn) . . . 37
>
> Assessment --Assessment in case of search--Limitation--Assessment to be completed within sixty days from date on which special auditor's report due--Assessment order dated 27-4-2007 served on assessee on 30-4-2007--No proof to establish that order issued beyond control of authority within period of limitation being 29-4-2007--Assessment barred by limitation--Income-tax Act, 1961, ss. 142(2A), (2C), 153A-- CIT v. B J N Hotels Ltd. (Karn) . . . 110
>
> ----Draft assessment order--Eligible assessee--Assessee not foreign company and Transfer Pricing Officer accepting return filed by assessee--Assessee for purposes of section 144C(15)(b) not "eligible assessee"--Assessing Officer cannot propose draft order of assessment to vary income or loss declared in return--Income-tax Act, 1961, s. 144C(1), (15)(b)-- Honda Cars India Ltd. v. Deputy CIT (Delhi) . . . 88
>
> Business expenditure --Accrued or contingent liability--Provision for warranty claims--Deduction permissible if requirements fulfilled--Matter remanded--Income-tax Act, 1961, s. 37-- Dell International Services India P. Ltd. v. Asst. CIT (Karn) . . . 37
>
> ----Disallowance--Payments subject to deduction of tax at source--Salaries and perquisites paid by head office outside India to employees deputed to Indian branches--Payments not brought into profit and loss account in respect of business in India--Tax deductible in respect of such payments paid in subsequent year pursuant to clarification by CBDT--Assessee entitled to deduction thereof--Condition to deposit tax deducted at source within time cannot be read into section 40(a)(iii)--Absence of entries in books of account not decisive of entitlement of assessee to claim deduction--Income-tax Act, 1961, s. 40(a)(iii)--CBDT Circular No. 685, dated 17/20-6-1994-- ANZ Grindlays Bank v. Deputy CIT (Delhi) . . . 156
>
> ----Expenses incurred on conveyance and telephone charges of directors--Expenditure incurred in providing benefit free of charge under Companies Act cannot be disallowed--Expenses allowable--Income-tax Act, 1961, s. 37-- Principal CIT v. Rimjhim Ispat Ltd. (All) . . . 152
>
> ----Manufacturing expenses--Failure by assessee to produce bills, vouchers and other supporting documents in relation to various expenses--No stock register maintained--Disallowance of 5 per cent. proper--Income-tax Act, 1961, s. 37-- Principal CIT v. Rimjhim Ispat Ltd. (All) . . . 152
>
> Capital gains --Exemption--Investment of consideration in residential house--No provision requiring amount received on transfer of original capital asset must be used for meeting cost of new asset--Investment by assessee within stipulated time and in sum greater than capital gains earned by him--Assessee entitled to get benefit under section 54F--Income-tax Act, 1961, s. 54F-- CIT v. Kapil Kumar Agarwal (P&H) . . . 56
>
> Depreciation --Condition precedent--Manufacture of thing--Meanings of "thing" and "manufacture"--Thing could be intangible--Definition of "manufacture" in section 2(29BA) retrospective--Manufacture would include combination of processes--Claim in respect of intangible asset can be made without claim in respect of tangible asset--Broadcasting amounts to manufacture of thing--Plant and machinery used in broadcasting entitled to additional depreciation--Income-tax Act, 1961, ss. 2(29BA), 32(1)(iia)-- CIT v. Radio Today Broadcasting Ltd. (Delhi) . . . 42
>
> ----Condition precedent--Use of plant or machinery in relevant accounting year--Meaning of word "use"--Plant or machinery kept ready for use would amount to user for purposes of section 32--Income-tax Act, 1961, s. 32-- CIT v. Radio Today Broadcasting Ltd. (Delhi) . . . 42
>
> ----User of asset in business of assessee--Sale and lease back--Finding that transaction genuine--Lessee not claiming any depreciation and assessee taking loan against security of leased assets--Assessee entitled to depreciation--CBDT Circular No. 2 of 2001, dated 9-2-2001--Income-tax Act, 1961-- CIT v. Apollo Finvest (I) Ltd. (Bom) . . . 33
>
> Interpretation of taxing statute --Speech of Finance Minister while inserting provision can be referred to-- U. P. Transformers (India) P. Ltd. v. CIT (All) . . . 66
>
> ----Strict interpretation-- ANZ Grindlays Bank v. Deputy CIT (Delhi) . . . 156
>
> Non-resident --Income deemed to accrue or arise in India--Double Taxation Avoidance Agreements between India and Thailand and between India and Netherlands--General principles relating to international double taxation--Royalty--Royalty having same meaning under Income-tax Act and double taxation avoidance agreements--Subsequent amendment in Income-tax Act widening scope of "royalty"--Meaning under double taxation avoidance agreements cannot be altered--Double taxation avoidance agreement more beneficial than Income-tax Act--Double taxation avoidance agreement applicable--Income-tax Act, 1961, ss. 9, 90--Double Taxation Avoidance Agreements between India and Thailand and between India and Netherlands-- Director of Income-tax v. New Skies Satellite BV (Delhi) . . . 114
>
> ----Taxability in India--Double taxation avoidance--Fees for technical services--Liaison office not involved in supervisory activities and not allowed to do trading, commercial or industrial activity--Not supervisory permanent establishment in India--Income not taxable as business income but as fees for technical services--Double Taxation Avoidance Agreement between India and Japan, arts. 7, 12(2), (5)-- CIT v. Sumitomo Corporation (Delhi) . . . 75
>
> Reassessment --Notice--Validity--Notice issued after death of assessee returned unserved--Notice to be sent prior to limitation period if Department intends to proceed against legal heirs of deceased assessee--Notice sent to legal heir after limitation period--Not valid--Income-tax Act, 1961, ss. 147, 148, 159-- Vipin Walia v. ITO (Delhi) . . . 19
>
> ----Notice after four years--Failure to disclose material facts necessary for assessment--Notice should give reasons--Reasons cannot be supplemented by affidavit or other materials--No allegation in notice regarding non-disclosure of material particulars--Facts showing particulars had been disclosed--Notice not valid--Income-tax Act, 1961, ss. 147, 148-- Nirmal Bang Securities Pvt. Ltd. v. Asst. CIT (Bom) . . . 93
>
> Special deduction --New industrial undertaking--Special deduction under section 80-I--Condition precedent--Industrial undertaking should be set up after 1-4-1981--Income-tax Act, 1961, s. 80-I-- U. P. Transformers (India) P. Ltd. v. CIT (All) . . . 66
>
> ----New industrial undertaking in backward area--Special deduction under section 80HH--Conditions precedent--Not necessary that setting up of industry and manufacturing activity should take place simultaneously--Undertaking set up in accounting year relevant to assessment year 1980-81--Manufacturing activity started in accounting year relevant to assessment year 1985-86--Assessee entitled to special deduction under section 80HH for assessment years 1985-86 and 1987-88--Income-tax Act, 1961, s. 80HH-- U. P. Transformers (India) P. Ltd. v. CIT (All) . . . 66
>
> Words and phrases --"Thing" --"Manufacture"--"Use"--Meanings of-- CIT v. Radio Today Broadcasting Ltd. (Delhi) . . . 42
>
> Writ --Appeal to Commissioner (Appeals)--Powers of Commissioner (Appeals)--Power of enhancement of assessment-- Commissioner (Appeals) calling upon assessee to show cause why amount should not be disallowed--Issue can be contested on merits in accordance with law before Commissioner (Appeals)--No merit in writ petition--Income-tax Act, 1961, s. 251(1)(a)-- Megatrends Inc. v. CIT (Mad) . . . 13
>
>  
>
> SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
>
> Double Taxation Avoidance Agreement between India and Japan :
>
> Arts. 7, 12(2), (5) --Non-resident--Taxability in India--Double taxation avoidance--Fees for technical services--Liaison office not involved in supervisory activities and not allowed to do trading, commercial or industrial activity--Not supervisory permanent establishment in India--Income not taxable as business income but as fees for technical services-- CIT v. Sumitomo Corporation (Delhi) . . . 75
>
> Income-tax Act, 1961 :
>
> S. 2(29BA) --Depreciation--Condition precedent--Manufacture of thing--Meanings of "thing" and "manufacture"--Thing could be intangible--Definition of "manufacture" in section 2(29BA) retrospective--Manufacture would include combination of processes--Claim in respect of intangible asset can be made without claim in respect of tangible asset--Broadcasting amounts to manufacture of thing--Plant and machinery used in broadcasting entitled to additional depreciation-- CIT v. Radio Today Broadcasting Ltd. (Delhi) . . . 42
>
> S. 9 --Non-resident--Income deemed to accrue or arise in India--Double Taxation Avoidance Agreements between India and Thailand and between India and Netherlands--General principles relating to international double taxation--Royalty--Royalty having same meaning under Income-tax Act and double taxation avoidance agreements--Subsequent amendment in Income-tax Act widening scope of "royalty"--Meaning under double taxation avoidance agreements cannot be altered--Double taxation avoidance agreement more beneficial than Income-tax Act--Double taxation avoidance agreement applicable-- Director of Income-tax v.New Skies Satellite BV (Delhi) . . . 114
>
> S. 12AA --Charitable purpose--Registration of trusts--Application for registration--Decision of High Court that if application not responded to within six months assessee to be deemed registered--Supreme Court--Registration to take effect six months after date of application--CIT v. Society for the Promotion of Education (SC). . . 6
>
> S. 32 --Depreciation--Condition precedent--Use of plant or machinery in relevant accounting year--Meaning of word "use"--Plant or machinery kept ready for use would amount to user for purposes of section 32-- CIT v. Radio Today Broadcasting Ltd. (Delhi) . . . 42
>
> S. 32(1)(iia) --Depreciation--Condition precedent--Manufacture of thing--Meanings of "thing" and "manufacture"--Thing could be intangible--Definition of "manufacture" in section 2(29BA) retrospective--Manufacture would include combination of processes--Claim in respect of intangible asset can be made without claim in respect of tangible asset--Broadcasting amounts to manufacture of thing--Plant and machinery used in broadcasting entitled to additional depreciation-- CIT v. Radio Today Broadcasting Ltd. (Delhi) . . . 42
>
> S. 37 --Business expenditure--Accrued or contingent liability--Provision for warranty claims--Deduction permissible if requirements fulfilled--Matter remanded-- Dell International Services India P. Ltd. v. Asst. CIT (Karn) . . . 37
>
> ----Business expenditure--Expenses incurred on conveyance and telephone charges of directors--Expenditure incurred in providing benefit free of charge under Companies Act cannot be disallowed--Expenses allowable-- Principal CIT v. Rimjhim Ispat Ltd. (All) . . . 152
>
> ----Business expenditure--Manufacturing expenses--Failure by assessee to produce bills, vouchers and other supporting documents in relation to various expenses--No stock register maintained--Disallowance of 5 per cent. proper-- Principal CIT v. Rimjhim Ispat Ltd. (All) . . . 152
>
> S. 40(a)(iii) --Business expenditure--Disallowance--Payments subject to deduction of tax at source--Salaries and perquisites paid by head office outside India to employees deputed to Indian branches--Payments not brought into profit and loss account in respect of business in India--Tax deductible in respect of such payments paid in subsequent year pursuant to clarification by CBDT--Assessee entitled to deduction thereof--Condition to deposit tax deducted at source within time cannot be read into section 40(a)(iii)--Absence of entries in books of account not decisive of entitlement of assessee to claim deduction-- ANZ Grindlays Bank v. Deputy CIT (Delhi) . . . 156
>
> S. 54F --Capital gains--Exemption--Investment of consideration in residential house--No provision requiring amount received on transfer of original capital asset must be used for meeting cost of new asset--Investment by assessee within stipulated time and in sum greater than capital gains earned by him--Assessee entitled to get benefit under section 54F-- CIT v. Kapil Kumar Agarwal (P&H) . . . 56
>
> S. 80HH --Special deduction--New industrial undertaking in backward area--Special deduction under section 80HH--Conditions precedent--Not necessary that setting up of industry and manufacturing activity should take place simultaneously--Undertaking set up in accounting year relevant to assessment year 1980-81--Manufacturing activity started in accounting year relevant to assessment year 1985-86--Assessee entitled to special deduction under section 80HH for assessment years 1985-86 and 1987-88-- U. P. Transformers (India) P. Ltd. v. CIT (All) . . . 66
>
> S. 80-I --Special deduction--New industrial undertaking--Special deduction under section 80-I--Condition precedent--Industrial undertaking should be set up after 1-4-1981-- U. P. Transformers (India) P. Ltd. v. CIT (All) . . . 66
>
> S. 90 --Non-resident--Income deemed to accrue or arise in India--Double Taxation Avoidance Agreements between India and Thailand and between India and Netherlands--General principles relating to international double taxation--Royalty--Royalty having same meaning under Income-tax Act and double taxation avoidance agreements--Subsequent amendment in Income-tax Act widening scope of "royalty"--Meaning under double taxation avoidance agreements cannot be altered--Double taxation avoidance agreement more beneficial than Income-tax Act--Double taxation avoidance agreement applicable-- Director of Income-tax v.New Skies Satellite BV (Delhi) . . . 114
>
> S. 142(2A) --Assessment--Assessment in case of search--Limitation--Assessment to be completed within sixty days from date on which special auditor's report due--Assessment order dated 27-4-2007 served on assessee on 30-4-2007--No proof to establish that order issued beyond control of authority within period of limitation being 29-4-2007--Assessment barred by limitation-- CIT v. B J N Hotels Ltd. (Karn) . . . 110
>
> S. 142(2C) --Assessment--Assessment in case of search--Limitation--Assessment to be completed within sixty days from date on which special auditor's report due--Assessment order dated 27-4-2007 served on assessee on 30-4-2007--No proof to establish that order issued beyond control of authority within period of limitation being 29-4-2007--Assessment barred by limitation-- CIT v. B J N Hotels Ltd. (Karn) . . . 110
>
> S. 144C(1) --Assessment--Draft assessment order--Eligible assessee--Assessee not foreign company and Transfer Pricing Officer accepting return filed by assessee--Assessee for purposes of section 144C(15)(b) not "eligible assessee"--Assessing Officer cannot propose draft order of assessment to vary income or loss declared in return-- Honda Cars India Ltd. v. Deputy CIT (Delhi) . . . 88
>
> S. 144C(15)(b) --Assessment--Draft assessment order--Eligible assessee--Assessee not foreign company and Transfer Pricing Officer accepting return filed by assessee--Assessee for purposes of section 144C(15)(b) not "eligible assessee"--Assessing Officer cannot propose draft order of assessment to vary income or loss declared in return-- Honda Cars India Ltd. v. Deputy CIT (Delhi) . . . 88
>
> S. 147 --Reassessment--Notice--Validity--Notice issued after death of assessee returned unserved--Notice to be sent prior to limitation period if Department intends to proceed against legal heirs of deceased assessee--Notice sent to legal heir after limitation period--Not valid--Vipin Walia v. ITO (Delhi) . . . 19
>
> ----Reassessment--Notice after four years--Failure to disclose material facts necessary for assessment--Notice should give reasons--Reasons cannot be supplemented by affidavit or other materials--No allegation in notice regarding non-disclosure of material particulars--Facts showing particulars had been disclosed--Notice not valid-- Nirmal Bang Securities Pvt. Ltd.v. Asst. CIT (Bom) . . . 93
>
> S. 148 --Reassessment--Notice--Validity--Notice issued after death of assessee returned unserved--Notice to be sent prior to limitation period if Department intends to proceed against legal heirs of deceased assessee--Notice sent to legal heir after limitation period--Not valid--Vipin Walia v. ITO (Delhi) . . . 19
>
> ----Reassessment--Notice after four years--Failure to disclose material facts necessary for assessment--Notice should give reasons--Reasons cannot be supplemented by affidavit or other materials--No allegation in notice regarding non-disclosure of material particulars--Facts showing particulars had been disclosed--Notice not valid-- Nirmal Bang Securities Pvt. Ltd.v. Asst. CIT (Bom) . . . 93
>
> S. 153A --Assessment--Assessment in case of search--Limitation--Assessment to be completed within sixty days from date on which special auditor's report due--Assessment order dated 27-4-2007 served on assessee on 30-4-2007--No proof to establish that order issued beyond control of authority within period of limitation being 29-4-2007--Assessment barred by limitation-- CIT v. B J N Hotels Ltd. (Karn) . . . 110
>
> S. 159 --Reassessment--Notice--Validity--Notice issued after death of assessee returned unserved--Notice to be sent prior to limitation period if Department intends to proceed against legal heirs of deceased assessee--Notice sent to legal heir after limitation period--Not valid--Vipin Walia v. ITO (Delhi) . . . 19
>
> S. 194A --Deduction of tax at source--Interest for delayed payment of compensation for acquisition of land--Whether subject to deduction of tax at source--Failure by High Court to give reasons--Supreme Court--Matter remanded-- Commissioner, Belgaum Urban Development Authority v. CIT (SC) . . . 8
>
> S. 251(1)(a) --Writ--Appeal to Commissioner (Appeals)--Powers of Commissioner (Appeals)--Power of enhancement of assessment-- Commissioner (Appeals) calling upon assessee to show cause why amount should not be disallowed--Issue can be contested on merits in accordance with law before Commissioner (Appeals)--No merit in writ petition-- Megatrends Inc. v. CIT (Mad) . . . 13
>
> S. 254(2) --Appeal to Appellate Tribunal--Power to rectify mistakes--Assessee treating interest as business income--Assessing Officer and appellate authorities treating it as income from other sources--Tribunal can examine whether order sought to be rectified has apparent error of law not limited to mistakes of fact apparent on face of record--Tribunal dismissing rectification application filed by assessee--Tribunal to examine issue in light of stand of Department in earlier and later assessment years--Rule of consistency to be followed--Matter remanded-- Promain Ltd. v. CIT (Delhi) . . . 25
>
>  
>
> __._,_.___
> ________________________________
> Posted by: CA RAJU SHAH <shahmars@hotmail.com>
> ________________________________
> Reply via web post
> •
> Reply to sender
> •
> Reply to group
> •
> Start a New Topic
> •
> Messages in this topic (1)
> All messages posted by moderator/member on this group are sent in their personal capacity. No official position held anywhere by them have nothing to do with this email group. The group does   not accept any responsibility with regards to accuracy or the mistakes in the "News,Informations"/material circulated on this group. Please confirm from your independent source before using the news/information or material posted on this group.
> Visit Your Group
> New Members 1
> • Privacy • Unsubscribe • Terms of Use
>
> .
>
> __,_._,___

ITR (TRIB) Volume 46 : Part 5 (Issue dated : 21-3-2016)

-
>  
>
> ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))--PRINT AND ONLINE EDITION
>
> ONLINE EDITION
>
> SUBJECT INDEX TO CASES REPORTED
>
> Capital gains --Transfer--Loss--Cancellation of shares under capital reduction scheme--No transfer--Provisions of section 45 not applicable--Notional loss not allowable--Income-tax Act, 1961, ss. 2(47), 45-- Deputy CIT v. Daikin Industries Ltd.
> (Delhi) . . . 248
>
> Charitable purpose --Exemption--Trust providing micro finance to self help groups by raising loans from commercial banks--Micro finance in a commercial manner to earn profit--Not a charitable activity but a business activity--Not entitled to exemption--Income-tax Act, 1961, s. 2(15)-- ITO v. Kalanjiam Development Financial Services
> (Chennai) . . . 226
>
> Deduction of tax at source --Fee for defaults in furnishing statements--Not permissible in course of processing of statement under section 200A--Income-tax Act, 1961, ss. 200A, 234E-- Dhanlaxmi Developers v. Deputy CIT (Ahd) . . . 253
>
> Reassessment --Validity of reassessment--Assessee wrongly claiming capital loss on account of cancellation of shares--Reason to believe income had escaped assessment--Assessing Officer rightly invoking powers under section 147--Reassessment valid--Income-tax Act, 1961, s. 147-- Deputy CIT v. Daikin Industries Ltd. (Delhi) . . . 248
>
>  
>
> PRINT EDITION
>
> Volume 46 : Part 5 (Issue dated : 21-3-2016)
>
> SUBJECT INDEX TO CASES REPORTED IN THIS PART
>
> Bad debt --Bank--Advances written off by urban branches--Difference between amount written off and credit balance in provisions for bad and doubtful debt account--Deductible--Income-tax Act, 1961, s. 36(1)(vii)-- Allahabad Bank v. Asst. CIT
> (Kolkata) . . . 678
>
> Business expenditure --Co-operative bank--Expenditure on various welfare funds--Statutory obligation--Allowable--Income-tax Act, 1961, s. 37-- Karnataka State Co-operative Apex Bank Ltd. v. Deputy CIT (Bang) . . . 728
>
> ----Financial corporation--Inclusive definition--Banking company is a financial corporation--Special reserve created by institution providing long-term finance--Deduction restricted to amount transferred to special reserve subject to limit of prescribed percentage of profits derived from providing long-term finance--Income-tax Act, 1961, s. 36(1)(viia), (viii)--Allahabad Bank v. Asst. CIT (Kolkata) . . . 678
>
> Charitable purpose --Application of income to charitable objects--Depreciation--Depreciation not allowable on same asset where cost of fixed asset allowed as application of income--Income-tax Act, 1961-- Information Systems Audit and Control Association v. Deputy DIT (Exemptions) (Chennai) . . . 665
>
> ----Exemption--Coaching of students for particular examinations not amounting to imparting education--Assessee not entitled to exemption--Income-tax Act, 1961, ss. 2(15), 11--Information Systems Audit and Control Association v. Deputy DIT (Exemptions) (Chennai) . . . 665
>
> Company --Book profits--Computation--Disallowance of amount under section 14A--Includible while computing book profit--Income-tax Act, 1961, ss. 14A, 115JB(2)-- Deputy CIT v. Viraj Profiles Ltd. (Mumbai) . . . 626
>
> Dividend --Deemed dividend--Loan or advance by non-banking financial companies--Excluded from deeming provision--Not taxable--Income-tax Act, 1961, s. 2(22)(e)-- Deputy CIT v. Sindhu Holdings Ltd. (Delhi) . . . 771
>
> Interpretation of taxing statutes --Deeming provision--Literal interpretation-- Deputy CIT v. Sindhu Holdings Ltd. (Delhi) . . . 771
>
> Non-resident --Permanent establishment--Liaison office in India--Liaison office performing auxiliary services--No core business activity carried on and no authority to sign and execute contracts--Not a permanent establishment--No jurisdiction in Assessing Officer to adjudicate whether assessee violated conditions stipulated by Reserve Bank of India--No violation of conditions laid down by Reserve Bank of India--Non-resident not assessable in India--Income-tax Act, 1961-- Kawasaki Heavy Industries Ltd. v. Asst. CIT (Delhi) . . . 739
>
> Reassessment --Scope of--Issue concluded in original assessment proceedings cannot be reagitated during course of reassessment proceedings--Income-tax Act, 1961, s. 148--Karnataka State Co-operative Apex Bank Ltd. v. Deputy CIT
> (Bang) . . . 728
>
> Royalty --Non-resident--No permanent establishment--Supply of embedded software on hardware supplied to assessee's customers--Software not having any independent existence--Software merely facilitating functioning of equipment and integral part of equipment--Consideration for supply of software--Not royalty--Income-tax Act, 1961, s. 9(1)(vi)-- Galatea Ltd. v. Deputy CIT (International Taxation)
> (Mumbai) . . . 690
>
> Search and seizure --Assessment in search cases--Assessment pursuant to first search concluded prior to second search--Claim to deduction of interest paid on borrowings against interest earned on advances examined and allowed--No incriminating material found during course of second search--No addition could be made with respect to claim of deduction of interest payable on borrowings against interest earned on advances on same facts--Income-tax Act, 1961, s. 153A-- Deputy CIT v. Himanshu B. Kanakia (Mumbai) . . . 756
>
>  
>
> SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
>
> Income-tax Act, 1961
>
> S. 2(15) --Charitable purposes--Exemption--Coaching of students for particular examinations not amounting to imparting education--Assessee not entitled to exemption-- Information Systems Audit and Control Association v. Deputy DIT (Exemptions) (Chennai) . . . 665
>
> S. 2(22)(e) --Dividend--Deemed dividend--Loan or advance by non-banking financial companies--Excluded from deeming provision--Not taxable-- Deputy CIT v. Sindhu Holdings Ltd. (Delhi) . . . 771
>
> S. 9(1)(vi) --Royalty--Non-resident--No permanent establishment--Supply of embedded software on hardware supplied to assessee's customers--Software not having any independent existence--Software merely facilitating functioning of equipment and integral part of equipment--Consideration for supply of software--Not royalty-- Galatea Ltd. v. Deputy CIT (International Taxation) (Mumbai) . . . 690
>
> S. 11 --Charitable purposes--Exemption--Coaching of students for particular examinations not amounting to imparting education--Assessee not entitled to exemption-- Information Systems Audit and Control Association v. Deputy DIT (Exemptions) (Chennai) . . . 665
>
> S. 14A --Company--Book profits--Computation--Disallowance of amount under section 14A--Includible while computing book profit-- Deputy CIT v. Viraj Profiles Ltd. (Mumbai) . . . 626
>
> S. 36(1)(vii) --Bad debt--Bank--Advances written off by urban branches--Difference between amount written off and credit balance in provisions for bad and doubtful debt account--Deductible-- Allahabad Bank v. Asst. CIT (Kolkata) . . . 678
>
> S. 36(1)(viia) --Business expenditure--Financial corporation--Inclusive definition--Banking company is a financial corporation--Special reserve created by institution providing long-term finance--Deduction restricted to amount transferred to special reserve subject to limit of prescribed percentage of profits derived from providing long-term finance-- Allahabad Bank v. Asst. CIT (Kolkata) . . . 678
>
> S. 36(1)(viii) --Business expenditure--Financial corporation--Inclusive definition--Banking company is a financial corporation--Special reserve created by institution providing long-term finance--Deduction restricted to amount transferred to special reserve subject to limit of prescribed percentage of profits derived from providing long-term finance-- Allahabad Bank v. Asst. CIT (Kolkata) . . . 678
>
> S. 37 --Business expenditure--Co-operative bank--Expenditure on various welfare funds--Statutory obligation--Allowable-- Karnataka State Co-operative Apex Bank Ltd. v. Deputy CIT(Bang) . . . 728
>
> S. 115JB(2) --Company--Book profits--Computation--Disallowance of amount under section 14A--Includible while computing book profit-- Deputy CIT v. Viraj Profiles Ltd. (Mumbai) . . . 626
>
> S. 148 --Reassessment--Scope of--Issue concluded in original assessment proceedings cannot be reagitated during course of reassessment proceedings-- Karnataka State Co-operative Apex Bank Ltd. v. Deputy CIT (Bang) . . . 728
>
> S. 153A --Search and seizure--Assessment in search cases--Assessment pursuant to first search concluded prior to second search--Claim to deduction of interest paid on borrowings against interest earned on advances examined and allowed--No incriminating material found during course of second search--No addition could be made with respect to claim of deduction of interest payable on borrowings against interest earned on advances on same facts-- Deputy CIT v. Himanshu B. Kanakia
> (Mumbai) . . . 756
>
>  
>
> __._,_.___
> ________________________________
> Posted by: CA RAJU SHAH <shahmars@hotmail.com>
> ________________________________
> Reply via web post
> •
> Reply to sender
> •
> Reply to group
> •
> Start a New Topic
> •
> Messages in this topic (1)
> All messages posted by moderator/member on this group are sent in their personal capacity. No official position held anywhere by them have nothing to do with this email group. The group does   not accept any responsibility with regards to accuracy or the mistakes in the "News,Informations"/material circulated on this group. Please confirm from your independent source before using the news/information or material posted on this group.
> Visit Your Group
> New Members 1
> • Privacy • Unsubscribe • Terms of Use
>
> .
>
> __,_._,___