Saturday, August 24, 2013

[aaykarbhavan] Re: Judgment I T R






 


INCOME TAX REPORTS (ITR)--PRINT AND ONLINE EDITION
ONLINE EDITION
SUBJECT INDEX TO CASES REPORTED
SUPREME COURT
Business expenditure --Contribution to approved gratuity fund--Direct payment of annual premium and initial contribution to Life Insurance Corporation for benefit of employees of assessee and Corporation accepting payment for exclusive benefit of employees of assessee under policy issued by it--Assessee not having any control over funds of irrevocable trust created exclusively for benefit of employees--Objective of provision achieved--Direct payment deductible--Income-tax Act, 1961, s. 36(1)(v)-- CIT v. Textool Co. Ltd. . . . 241
HIGH COURTS
Exemption --Companies--Minimum alternate tax--Dividend distribution tax--Exemptions to companies in special economic zones from minimum alternate tax and dividend distribution tax--Withdrawal of exemption from particular dates--Constitutional validity of provision--Power of Parliament to impose charge by means of Finance Acts--Doctrine of promissory estoppel not applicable--Inequity between special economic zone companies and other companies removed--No violation of article 14 of Constitution--Amendment introducing provisos to sub-section (6) of sections 115JB and 115-O--Valid--Income-tax Act, 1961, ss. 115JB(6), 115-O(6)--Constitution of India, arts. 14, 226-- Mindtree Ltd . v . UOI (Karn) . . . 246
Precedent --Effect of decisions of Supreme Court in State of A. P . v. McDowell [1996] AIR 1996 SC 1627 and Madurai District Central Co-operative Bank Ltd . v. Third ITO [1975] 101 ITR 24 (SC)-- Mindtree Ltd . v . UOI (Karn) . . . 246
Search and seizure --Block assessment--Warrant of authorisation--Assessee’s name shown in column B of the warrant--Search in premises of assessee as a result of search on person named in column A--Not a reason to hold that no warrant of search in the name of assessee--Assessing Officer at Chennai forwarding files of assessee to Assistant Commissioner at Coimbatore--Notice by Assistant Commissioner at Coimbatore calling on assessee to file return and assessee seeking time--Assessment by Assistant Commissioner at Coimbatore--Within jurisdiction--Income-tax Act, 1961, s. 158BC-- R. Srinivasan v . Asst. Dy. CIT (Mad) . . . 260
Writ --Powers of High Court--Power to declare provision invalid--Limited power--Constitution of India, art. 226-- Mindtree Ltd. v . UOI (Karn) . . . 246
PRINT EDITION
ITR Volume 356 : Part 2 (Issue dated : 19-8-2013)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
HIGH COURTS
Advance tax --Interest--Waiver of interest--Return--Delay in filing return--Condonation of delay--Commissioner satisfied delay in filing return not attributable to assessee for one year--Whether delay to be condoned for other years--Matter remanded--Income-tax Act, 1961, ss. 234A, 234B, 234C-- Parameswaran (V. N.) v. ITO
(Ker) . . . 348
Business expenditure --Accounting--Mercantile system of accounting--Amounts representing wage disbursements through maistries--Deductible--Income-tax Act, 1961, s. 37-- CIT v. Arivunidhi (T.) (Mad) . . . 218
----Business--Date of setting up of business--Finding that prior to date of incorporation assessee ready to commence commercial operations by recruiting key personnel, entering into agreements and starting necessary infrastructure--Commercial operations starting on 1-10-1995--Expenses up to this date not pre-commencement expenses--Allowable--Income-tax Act, 1961, s. 37-- CIT v . Samsung India Electronics Ltd .
(Delhi) . . . 354
----Deduction only on actual payment--Contribution to provident fund--Due date mentioned in section 36(1)(va) is the due date mentioned in section 43B(b)--Contribution made after due date specified by provident fund authority but before filing return--Deductible--Income-tax Act, 1961, ss. 2(24)(x), 36(1)(va), 43B(b)-- CIT v . Kichha Sugar Co. Ltd . (Uttarakhand) . . . 351
Business income --Remission or cessation of liability--Deemed profit--Refund of excise duty--Section 41(1) applies--Pendency of appeal against order of refund not relevant--Income-tax Act, 1961, s. 41(1)-- CIT v . Bharatpur Nutritional Products Ltd . (Delhi) . . . 285
Capital gains --Agricultural land--Capital asset--Land situate within municipal limits of Municipal Council--Capital asset--Gains on sale of agricultural land assessable as capital gains--Income-tax Act, 1961, s. 2(14)(iii)(a)-- CIT v . Neeru Aggarwal (Smt.)
(P&H) . . . 320
Charitable purposes --Charitable institution--Exemption--Meaning of “charitable purposesâ€--Institution certifying seeds under Seeds Act--Certification facilitating trade in seeds--No direct services to farmers--Assessee not entitled to exemption under section 10(23C)(iv)--Income-tax Act, 1961, ss. 2(15), 10(23C)(iv)-- Andhra Pradesh State Seed Certification Agency v . CIT (Chief) (AP) . . . 360
----Charitable trust--Registration of trust--Object of trust to benefit particular community--Object not charitable within the meaning of section 2(15)--Trust not entitled to registration--Income-tax Act, 1961, ss. 2(15), 12AA-- Gowri Ashram v. DIT (Exemptions) (Mad) . . . 328
Company --Book profit--Advance tax--Delay in filing return--Interest--Computation--Minimum alternate tax credit to be set off against assessed tax payable before calculating interest under sections 234A, 234B and 234C--Income-tax Act, 1961, ss. 115JAA, 234A, 234B, 234C-- CIT v . A. B. T. Industries Ltd . (Mad) . . . 195
Exemption --Payment to acquire lease of aircraft--Scope of section 10(15A)--Meaning of lease--Aircraft should exist on date of agreement--Agreement for lease of aircraft to be manufactured and delivered in May 2007--Assessee not entitled to exemption under section 10(15A)--Income-tax Act, 1961, s. 10(15A)-- Go Airlines P. Ltd. v. Union of India (Delhi) . . . 333
Industrial undertaking --Special deduction under section 80-IC--Condition precedent--Profits derived from manufacture or production of article eligible for special deduction--Meaning of “derived fromâ€--Direct nexus of profits to manufacture--Standing charges received for not producing articles--Not entitled to special deduction under section 80-IC--Income-tax Act, 1961, s. 80-IC-- Pine Packaging P. Ltd . v . CIT
(Delhi) . . . 222
----Special deductions under sections 80-IB and 80-IC--Computation--Subsidies granted by Government--General principles--Transport subsidy, power subsidy, interest subsidy and insurance subsidy--Direct nexus to profits of industrial undertaking--To be taken into account in computing deduction under sections 80-IB and 80-IC--Income-tax Act, 1961, ss. 80-IB, 80-IC-- CIT v . Meghalaya Steels Ltd . (Gauhati) . . . 235
Penalty --Failure to file audit report in time--Delay in auditing accounts--Co-operative society--Auditor to be appointed by Registrar or such other person to be appointed by State not within its control--Reasonable cause for submitting audit report after specified date--Cancellation of penalty justified--Income-tax Act, 1961, ss. 44AB, 271B-- CIT v . Iqbalpur Co-operative Cane Development Union Ltd.
(Uttarakhand) . . . 343
Precedent --Effect of decisions of Supreme Court in CIT v. Kelvinator of India Ltd . [2010] 320 ITR 561 (SC) ; Clagett Brachi Co. Ltd . v. CIT [1989] 177 ITR 409 (SC) and Asst. CIT v. Rajesh Jhaveri Stock Brokers P. Ltd . [2007] 291 ITR 500 (SC)-- Rabo India Finance Ltd. v . Dy. CIT (Bom) . . . 200
----Effect of decisions of Supreme Court in Sahney Steel and Press Works Ltd . v. CIT [1997] 228 ITR 253 (SC) ; CIT v. Rajaram Maize Products [2001] 251 ITR 427 (SC) ; CIT v. Eastern Electro Chemical Industries [1999] 9 SCC 20 ; Mepco Industries’ case [2009] 319 ITR 208 (SC)-- CIT v . Meghalaya Steels Ltd . (Gauhati) . . . 235
----Effect of Supreme Court decision in CIT v. Tulsyan NEC Ltd. [2011] 330 ITR 226 (SC)-- CIT v . A. B. T. Industries Ltd. (Mad) . . . 195
Purchase of immovable property by Central Government --Condition precedent--Effect of Supreme Court decision in Gautam’s case--Appropriate Authority must indicate reasons for belief of understatement of consideration--Opportunity of being heard must be afforded to concerned parties--Objections must be considered--No requirement of recording definite finding of understatement of consideration--Comparable sale instance furnished--Objections considered--Fair market value after considering circumstances of particular transaction--Order of pre-emptive purchase--Valid--Income-tax Act, 1961, Chapter XX-C-- Raghbir Singh v . Appropriate Authority Income-tax Department (Delhi) . . . 302
Reassessment --Notice--Change of opinion--Not a ground for notice--Issue regarding bad debt considered in original assessment and deduction granted--Reassessment proceedings to withdraw deduction--Not valid--Income-tax Act, 1961, ss. 147, 148-- Maruti Suzuki India Ltd . v . Dy. CIT (Delhi) . . . 209
----Notice--Notice within four years--Condition precedent--Tangible material showing escapement of income from tax--Assessment proceedings of subsequent year can form basis for notice--Notice on subsidiary company--Assessment of income in hands of parent company not conclusive of allowability of expenses in hands of subsidiary--Order under section 195(2) not relevant--Notice valid--Income-tax Act, 1961, ss. 147, 148-- Rabo India Finance Ltd . v . Dy. CIT (Bom) . . . 200
----Notice--Recording of reasons--Belief should be held in good faith--Adequacy or sufficiency of reasons not justiciable--Relevancy of reasons justiciable--Income-tax Act, 1961, ss. 147, 148-- Shumana Sen v. CIT (Delhi) . . . 291
----Notice after four years--Foreign travel--Duty of assessee to explain expenditure--No document or evidence filed along with return explaining expenditure incurred on foreign travel during previous year--Prima facie belief of escapement of income on account of assessee’s failure to satisfy requirements of Explanation 1 below section 147--Notice valid--Income-tax Act, 1961, s. 148-- Shumana Sen v . CIT
(Delhi) . . . 291
Rectification of mistakes --Error should be apparent from record--Block assessment--Reappraisal of entire material with a different conclusion--Not permissible--Income-tax Act, 1961, s. 154-- CIT v . Mysore Breweries Ltd. (Karn) . . . 346
Refund --Interest on refund--Refund due to excess tax deduction at source--Interest payable under section 244A--Income-tax Act, 1961, s. 244A-- CIT v. A. B. T. Industries Ltd . (Mad) . . . 195
Search and seizure --Block assessment--Undisclosed income--Income declared in return or in books of account not assessable as undisclosed income--Income-tax Act, 1961, Chap. XIV-B-- CIT v . Satyanarayana (B.) (AP) . . . 323
Words and Phrases --Meaning of “derived fromâ€-- Pine Packaging P. Ltd . v . CIT
(Delhi) . . . 222
Writ --Competency of writ petition--Writ petition not maintainable to implement verdict of court--Constitution of India, art. 226-- Alappat Jewels v . Asst. CIT
(Ker) . . . 299 
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Constitution of India :
Art. 226 --Writ--Competency of writ petition--Writ petition not maintainable to implement verdict of court-- Alappat Jewels v . Asst. CIT (Ker) . . . 299
Income-tax Act, 1961 :
S. 2(14)(iii)(a) --Capital gains--Agricultural land--Capital asset--Land situate within municipal limits of Municipal Council--Capital asset--Gains on sale of agricultural land assessable as capital gains-- CIT v . Neeru Aggarwal (Smt.)
(P&H) . . . 320
S. 2(15) --Charitable purposes--Charitable institution--Exemption--Meaning of “charitable purposesâ€--Institution certifying seeds under Seeds Act--Certification facilitating trade in seeds--No direct services to farmers--Assessee not entitled to exemption under section 10(23C)(iv)-- Andhra Pradesh State Seed Certification Agency v . CIT (Chief) (AP) . . . 360
----Charitable purposes--Charitable trust--Registration of trust--Object of trust to benefit particular community--Object not charitable within the meaning of section 2(15)--Trust not entitled to registration-- Gowri Ashram v. DIT (Exemptions)
(Mad) . . . 328
S. 2(24)(x) --Business expenditure--Deduction only on actual payment--Contribution to provident fund--Due date mentioned in section 36(1)(va) is the due date mentioned in section 43B(b)--Contribution made after due date specified by provident fund authority but before filing return--Deductible-- CIT v . Kichha Sugar Co. Ltd .
(Uttarakhand) . . . 351
S. 10(15A) --Exemption--Payment to acquire lease of aircraft--Scope of section 10(15A)--Meaning of lease--Aircraft should exist on date of agreement--Agreement for lease of aircraft to be manufactured and delivered in May 2007--Assessee not entitled to exemption under section 10(15A)-- Go Airlines P. Ltd. v. Union of India
(Delhi) . . . 333
S. 10(23C)(iv) --Charitable purposes--Charitable institution--Exemption--Meaning of “charitable purposesâ€--Institution certifying seeds under Seeds Act--Certification facilitating trade in seeds--No direct services to farmers--Assessee not entitled to exemption under section 10(23C)(iv)-- Andhra Pradesh State Seed Certification Agency v . CIT (Chief) (AP) . . . 360
S. 12AA --Charitable purposes--Charitable trust--Registration of trust--Object of trust to benefit particular community--Object not charitable within the meaning of section 2(15)--Trust not entitled to registration-- Gowri Ashram v. DIT (Exemptions)
(Mad) . . . 328
S. 36(1)(va) --Business expenditure--Deduction only on actual payment--Contribution to provident fund--Due date mentioned in section 36(1)(va) is the due date mentioned in section 43B(b)--Contribution made after due date specified by provident fund authority but before filing return--Deductible-- CIT v . Kichha Sugar Co. Ltd .
(Uttarakhand) . . . 351
S. 37 --Business expenditure--Accounting--Mercantile system of accounting--Amounts representing wage disbursements through maistries--Deductible-- CIT v. Arivunidhi (T.) (Mad) . . . 218
----Business expenditure--Business--Date of setting up of business--Finding that prior to date of incorporation assessee ready to commence commercial operations by recruiting key personnel, entering into agreements and starting necessary infrastructure--Commercial operations starting on 1-10-1995--Expenses up to this date not pre-commencement expenses--Allowable-- CIT v . Samsung India Electronics Ltd .
(Delhi) . . . 354
S. 41(1) --Business income--Remission or cessation of liability--Deemed profit--Refund of excise duty--Section 41(1) applies--Pendency of appeal against order of refund not relevant-- CIT v . Bharatpur Nutritional Products Ltd .
(Delhi) . . . 285
S. 43B(b) --Business expenditure--Deduction only on actual payment--Contribution to provident fund--Due date mentioned in section 36(1)(va) is the due date mentioned in section 43B(b)--Contribution made after due date specified by provident fund authority but before filing return--Deductible-- CIT v . Kichha Sugar Co. Ltd .
(Uttarakhand) . . . 351
S. 44AB --Penalty--Failure to file audit report in time--Delay in auditing accounts--Co-operative society--Auditor to be appointed by Registrar or such other person to be appointed by State not within its control--Reasonable cause for submitting audit report after specified date--Cancellation of penalty justified-- CIT v . Iqbalpur Co-operative Cane Development Union Ltd. (Uttarakhand) . . . 343
S. 80-IB --Industrial undertaking--Special deductions under sections 80-IB and 80-IC--Computation--Subsidies granted by Government--General principles--Transport subsidy, power subsidy, interest subsidy and insurance subsidy--Direct nexus to profits of industrial undertaking--To be taken into account in computing deduction under sections 80-IB and 80-IC-- CIT v . Meghalaya Steels Ltd . (Gauhati) . . . 235
S. 80-IC --Industrial undertaking--Special deduction under section 80-IC--Condition precedent--Profits derived from manufacture or production of article eligible for special deduction--Meaning of “derived fromâ€--Direct nexus of profits to manufacture--Standing charges received for not producing articles--Not entitled to special deduction under section 80-IC-- Pine Packaging P. Ltd . v . CIT (Delhi) . . . 222
----Industrial undertaking--Special deductions under sections 80-IB and 80-IC--Computation--Subsidies granted by Government--General principles--Transport subsidy, power subsidy, interest subsidy and insurance subsidy--Direct nexus to profits of industrial undertaking--To be taken into account in computing deduction under sections 80-IB and 80-IC-- CIT v . Meghalaya Steels Ltd . (Gauhati) . . . 235
S. 115JAA --Company--Book profit--Advance tax--Delay in filing return--Interest--Computation--Minimum alternate tax credit to be set off against assessed tax payable before calculating interest under sections 234A, 234B and 234C-- CIT v . A. B. T. Industries Ltd . (Mad) . . . 195
S. 147 --Reassessment--Notice--Change of opinion--Not a ground for notice--Issue regarding bad debt considered in original assessment and deduction granted--Reassessment proceedings to withdraw deduction--Not valid-- Maruti Suzuki India Ltd . v . Dy. CIT (Delhi) . . . 209
----Reassessment--Notice--Notice within four years--Condition precedent--Tangible material showing escapement of income from tax--Assessment proceedings of subsequent year can form basis for notice--Notice on subsidiary company--Assessment of income in hands of parent company not conclusive of allowability of expenses in hands of subsidiary--Order under section 195(2) not relevant--Notice valid-- Rabo India Finance Ltd . v . Dy. CIT (Bom) . . . 200
----Reassessment--Notice--Recording of reasons--Belief should be held in good faith--Adequacy or sufficiency of reasons not justiciable--Relevancy of reasons justiciable-- Shumana Sen v. CIT (Delhi) . . . 291
S. 148 --Reassessment--Notice--Change of opinion--Not a ground for notice--Issue regarding bad debt considered in original assessment and deduction granted--Reassessment proceedings to withdraw deduction--Not valid-- Maruti Suzuki India Ltd . v . Dy. CIT (Delhi) . . . 209
----Reassessment--Notice--Notice within four years--Condition precedent--Tangible material showing escapement of income from tax--Assessment proceedings of subsequent year can form basis for notice--Notice on subsidiary company--Assessment of income in hands of parent company not conclusive of allowability of expenses in hands of subsidiary--Order under section 195(2) not relevant--Notice valid-- Rabo India Finance Ltd . v . Dy. CIT (Bom) . . . 200
----Reassessment--Notice--Recording of reasons--Belief should be held in good faith--Adequacy or sufficiency of reasons not justiciable--Relevancy of reasons justiciable-- Shumana Sen v. CIT (Delhi) . . . 291
----Reassessment--Notice after four years--Foreign travel--Duty of assessee to explain expenditure--No document or evidence filed along with return explaining expenditure incurred on foreign travel during previous year--Prima facie belief of escapement of income on account of assessee’s failure to satisfy requirements of Explanation 1 below section 147--Notice valid-- Shumana Sen v . CIT (Delhi) . . . 291
S. 154 --Rectification of mistakes--Error should be apparent from record--Block assessment--Reappraisal of entire material with a different conclusion--Not permissible-- CIT v . Mysore Breweries Ltd. (Karn) . . . 346
Chap. XIV-B --Search and seizure--Block assessment--Undisclosed income--Income declared in return or in books of account not assessable as undisclosed income-- CIT v . Satyanarayana (B.) (AP) . . . 323
S. 234A --Advance tax--Interest--Waiver of interest--Return--Delay in filing return--Condonation of delay--Commissioner satisfied delay in filing return not attributable to assessee for one year--Whether delay to be condoned for other years--Matter remanded-- Parameswaran (V. N.) v. ITO (Ker) . . . 348
----Company--Book profit--Advance tax--Delay in filing return--Interest--Computation--Minimum alternate tax credit to be set off against assessed tax payable before calculating interest under sections 234A, 234B and 234C-- CIT v . A. B. T. Industries Ltd . (Mad) . . . 195
S. 234B --Advance tax--Interest--Waiver of interest--Return--Delay in filing return--Condonation of delay--Commissioner satisfied delay in filing return not attributable to assessee for one year--Whether delay to be condoned for other years--Matter remanded-- Parameswaran (V. N.) v. ITO (Ker) . . . 348
----Company--Book profit--Advance tax--Delay in filing return--Interest--Computation--Minimum alternate tax credit to be set off against assessed tax payable before calculating interest under sections 234A, 234B and 234C-- CIT v . A. B. T. Industries Ltd . (Mad) . . . 195
S. 234C --Advance tax--Interest--Waiver of interest--Return--Delay in filing return--Condonation of delay--Commissioner satisfied delay in filing return not attributable to assessee for one year--Whether delay to be condoned for other years--Matter remanded-- Parameswaran (V. N.) v. ITO (Ker) . . . 348
----Company--Book profit--Advance tax--Delay in filing return--Interest--Computation--Minimum alternate tax credit to be set off against assessed tax payable before calculating interest under sections 234A, 234B and 234C-- CIT v . A. B. T. Industries Ltd . (Mad) . . . 195
S. 244A --Refund--Interest on refund--Refund due to excess tax deduction at source--Interest payable under section 244A-- CIT v. A. B. T. Industries Ltd .
(Mad) . . . 195
Chapter XX-C --Purchase of immovable property by Central Government--Condition precedent--Effect of Supreme Court decision in Gautam’s case--Appropriate Authority must indicate reasons for belief of understatement of consideration--Opportunity of being heard must be afforded to concerned parties--Objections must be considered--No requirement of recording definite finding of understatement of consideration--Comparable sale instance furnished--Objections considered--Fair market value after considering circumstances of particular transaction--Order of pre-emptive purchase--Valid-- Raghbir Singh v . Appropriate Authority Income-tax Department (Delhi) . . . 302
S. 271B --Penalty--Failure to file audit report in time--Delay in auditing accounts--Co-operative society--Auditor to be appointed by Registrar or such other person to be appointed by State not within its control--Reasonable cause for submitting audit report after specified date--Cancellation of penalty justified-- CIT v . Iqbalpur Co-operative Cane Development Union Ltd. (Uttarakhand) . . . 343
 




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