INCOME TAX REPORTS (ITR)--PRINT AND ONLINE EDITION
Advance tax --Excess advance tax paid--Interest--Advance tax in excess of minimum alternate tax credit--Interest payable under section 244A--Income-tax Act, 1961, s. 244A-- CIT v . Bharat Aluminium Co. Ltd. (Delhi) . . . 286
Business expenditure --Performance guarantee--Non-performance of contract--Encashment of bank guarantee--Compensatory in nature not penal--Deductible--Income-tax Act, 1961, s. 37(1)-- CIT v . Neo Structo Construction Ltd .
(Guj) . . . 300
(Guj) . . . 300
Mutual concern --Principle of mutuality--Members’ club--Contribution from members invested in fixed deposit--Interest from such deposit--Mutuality principle not attracted--Income-tax Act, 1961-- CIT v . Dehradun Club Ltd.
(Uttarakhand) . . . 296
(Uttarakhand) . . . 296
Non-resident --Income deemed to accrue or arise in India--Meaning of business connection--Non-resident company having liaison office in India arranging for manufacture in India for export--No part of income accrued or arose in India--Income-tax Act, 1961, ss. 5, 9(1)(i)-- CIT v . Nike Inc. (Karn) . . . 274
Precedent --Effect of Supreme Court decision in CIT v. Tulsyan NEC-- CIT v . Bharat Aluminium Co. Ltd. (Delhi) . . . 286
Res judicata --Not applicable to income-tax proceedings-- CIT v . Dehradun Club Ltd. (Uttarakhand) . . . 296
Income-tax --General principles--Compartmentalisation of income under various heads and computation--To be strictly in accordance with scheme of Act-- T. K. Ginarajan v . CIT . . . 618
Salary --Perquisite--Definition--Exhaustive--Incentive bonus paid by employer--Expenses incurred for generating business--Not certified by employer as reimbursement of actual expenses incurred in performance of duty--Is salary and taxable--Income-tax Act, 1961, ss. 2(24), 10(14), 16, 17-- T. K. Ginarajan v . CIT . . . 618
Appeal to Appellate Tribunal --Powers of Tribunal--Power to admit additional evidence--Objection to material must be raised before Tribunal-- CIT v . Vijayawada Bottling Co. Ltd. (AP) . . . 625
Appeal to High Court --Competency of appeal--Law applicable--Effect of insertion of section 268A with retrospective effect from 1-4-1999--Tax effect less than minimum prescribed by CBDT--Appeal not competent--Income-tax Act, 1961, s. 268A-- CIT v . Dr. Ashok Kumar Shukla (All) . . . 697
----Territorial jurisdiction of High Court--Order passed within territorial jurisdiction of High Court--High Court could hear appeal from such order--Income-tax Act, 1961, s. 260A--Code of Civil Procedure, 1908, s. 20-- CIT v . Shree Ganapati Rolling Mills P. Ltd . (Gauhati) . . . 586
Best judgment assessment --Law applicable--Effect of amendment of section 144 w.e.f. 1-4-1989--Prior to 1-4-1989 in case of voluntary return best judgment could be made only after notice under section 139(2)--Income-tax Act, 1961, ss. 139(2), 144--Circular No. 281 dated 22-9-1980-- CIT v. Bake Food Products P. Ltd . (AP) . . . 690
Business expenditure --Disallowance--Ceiling on expenditure--Hotel expenses of employee--Daily allowance granted to employee has same character as hotel expenses for purposes of section 37(3A) to (3D)--Income-tax Act, 1961, s. 37--Income-tax Rules, 1962, r. 6D-- Novopan India Ltd . v . CIT (AP) . . . 580
----Disallowance--Entertainment expenditure--Expenditure incurred on employees who had accompanied visitors to assessee concern--Expenditure constituted entertainment expenditure--Disallowance of part of expenditure--Justified--Income-tax Act, 1961-- CIT v . ING Vysya Bank Ltd . (Karn) . . . 532
Business loss --Banking company--Loss on revaluation of securities--Assessee describing securities as permanent assets--Loss not in stock-in-trade--Loss not deductible--Income-tax Act, 1961-- CIT v . ING Vysya Bank Ltd . (Karn) . . . 532
Capital gains --â€Transfer†meaning of --Firm owning land--Reconstitution of firm and addition of new partners--Reduction in shares of erstwhile partners--No transfer of capital asset--Capital gains did not arise on reduction of share of partners--Income-tax Act, 1961, ss. 2(47), 45-- CIT v . P. N. Panjawani (Karn) . . . 676
Capital or revenue receipt --Decision of Supreme Court that dharmada collected from purchasers and deposited in a separate account not a revenue receipt--Finding of Tribunal that assessee failed to show contribution on regular basis to institutions--High Court holding finding of Tribunal purely related to appreciation of evidence not giving rise to question of law--High Court not laying down law contrary to ruling of Supreme Court--Reference to Full Bench uncalled for--Income-tax Act, 1961-- Lilasons Breweries Ltd. v . CIT [FB] (MP) . . . 671
Depreciation --Investments held as stock-in-trade--Assessee entitled to value investments at cost price or market value, whichever is lower--Entitled to depreciation--Income-tax Act, 1961-- CIT v . Vijaya Bank (Karn) . . . 578
Fringe benefits tax --Reassessment--Scope of Chapter XII-H--Special provisions including for reassessment of fringe benefits escaping assessment--Reassessment under general provisions not permissible in case of fringe benefits tax--Income-tax Act, 1961, ss. 147, 148, Chap. XII-H-- CIT v . P. G. Foils Ltd . (Guj) . . . 594
Intercorporate dividends --Special deduction under section 80M--Disallowance of part of special deduction on ground of expenditure--No evidence of expenditure--Disallowance not justified--Income-tax Act, 1961, s. 80M-- CIT v . ING Vysya Bank Ltd.
(Karn) . . . 532
(Karn) . . . 532
Interest on borrowed capital --Loan by assessee to subsidiary company--Finding that loan was not from borrowed capital--Interest deductible--Income-tax Act, 1961, s. 36(1)(iii)-- CIT v. Vijayawada Bottling Co. Ltd . (AP) . . . 625
Interpretation of taxing statutes --External aids can be used-- CIT v . Vijayawada Bottling Co. Ltd . (AP) . . . 625
Investment allowance --Condition precedent--Manufacture or production of article or thing--Milk products made from milk amounts to production--Machinery used in manufacture of milk products--Entitled to investment allowance--Income-tax Act, 1961, s. 32A-- CIT v. Vizag District Milk Producers Co-op. Union Ltd. (AP) . . . 612
----Law applicable--Effect of insertion of Explanation to item 5 in Eleventh Schedule w.e.f. 1-4-1988--Amendment not retrospective--Machinery used in manufacture of aerated water with synthetic essence--Entitled to investment allowance prior to 1-4-1988--Income-tax Act, 1961, s. 32A, Sch. XI-- CIT v. Vijayawada Bottling Co. Ltd. (AP) . . . 625
Offences and prosecution --Refund certificate in fictitious names--Prima facie evidence that offence has been committed--Prosecution will not be quashed--Income-tax Act, 1961--Code of Criminal Procedure, 1973, ss. 397, 401-- Hema Mohnot v . State by Chief Commissioner (Administration) (Mad) . . . 602
Penalty --Concealment of income--Claim to deduction of expenditure based on decision of Supreme Court--Expenditure offered thereafter for assessment by filing revised statement--Not a case of filing inaccurate particulars--No case for levy of penalty--Income-tax Act, 1961, s. 271(1)(c)-- CIT v. Shriram Properties and Constructions (Chennai) Ltd. (Mad) . . . 700
----Concealment of particulars of income--Assessing Officer originally of impression that cash deposit made by assessee on single day but later finding deposit spread over twelve months--Assessee filing revised profit and loss account statement showing net profit being five per cent. before completion of assessment and agreeing to addition of three per cent.--Case of estimation of income--Imposition of penalty not warranted--Income-tax Act, 1961, s. 271(1)(c)-- CIT v . P. Rojes (Mad) . . . 703
----Loans in cash exceeding specified limit--Assessee building properties--Earnest money returned to parties in cash reflected in balance-sheet--Not loan or deposit--Penalty could not be imposed--Income-tax Act, 1961, s. 271E-- CIT v . Madhav Enterprise Pvt. Ltd. (Guj) . . . 588
Precedent --Effect of Supreme Court decision in Amit Kapoor v. Ramesh Chander [2012] 9 SCC 460-- Hema Mohnot v. State by Chief Commissioner (Administration) (Mad) . . . 602
Reassessment --Notice--Notice not served to the name of principal officer of assessee-company but issued to company without mentioning “Pvt. Ltd.†as a suffix--Not a case of misnomer or misdescription of parties which makes entire proceedings null and void--Income-tax Act, 1961, ss. 147, 148-- CIT v. Jagat Novel Exhibitors P. Ltd .
(Delhi) . . . 559
(Delhi) . . . 559
----Notice--Validity--Issues examined in original assessment--Notice of reassessment in respect of such issues--Not valid--Income-tax Act, 1961, ss. 147, 148-- CIT v . P. G. Foils Ltd. (Guj) . . . 594
Reference --Finding of fact by Tribunal--Normally binding on High Court--Income-tax Act, 1961, s. 256-- CIT v . Vijayawada Bottling Co. Ltd . (AP) . . . 625
Search and seizure --Block assessment--Assessment of third person--Difference between section 158BC and section 158BD--No warrant of authorisation in name of assessee--Search of business premises of assessee in consequence of search of third person--Order of assessment passed under section 158BC--Not valid--Not a defect curable under section 292B--Order passed after period of limitation laid down in section 158BC--Order not valid--Income-tax Act, 1961, ss. 158BC, 158BD-- V. Ramaiah v . CIT
(Mad) . . . 646
(Mad) . . . 646
----Block assessment--Undisclosed income--Addition of amount without affording opportunity to assessee to be heard--Not valid--No proof by Revenue that transaction was benami--Addition on ground of benami--Not valid--Income-tax Act, 1961-- V. Ramaiah v . CIT (Mad) . . . 646
Valuation of stock --General principles--Method of valuation adopted by assessee and accepted by Revenue for several years--Securities classified in accordance with Reserve Bank of India circular--Not relevant--Assessee’s valuation to be accepted--Income-tax Act, 1961-- Karnataka Bank Ltd. v . Asst. CIT (Karn) . . . 549
S. 20 --Appeal to High Court--Territorial jurisdiction of High Court--Order passed within territorial jurisdiction of High Court--High Court could hear appeal from such order-- CIT v . Shree Ganapati Rolling Mills P. Ltd . (Gauhati) . . . 586
Ss. 397, 401 --Offences and prosecution--Refund certificate in fictitious names--Prima facie evidence that offence has been committed--Prosecution will not be quashed-- Hema Mohnot v . State by Chief Commissioner (Administration)
(Mad) . . . 602
(Mad) . . . 602
S. 2(24) --Salary--Perquisite--Definition--Exhaustive--Incentive bonus paid by employer--Expenses incurred for generating business--Not certified by employer as reimbursement of actual expenses incurred in performance of duty--Is salary and taxable-- T. K. Ginarajan v . CIT (SC) . . . 618
S. 2(47) --Capital gains--â€Transfer†meaning of --Firm owning land--Reconstitution of firm and addition of new partners--Reduction in shares of erstwhile partners--No transfer of capital asset--Capital gains did not arise on reduction of share of partners-- CIT v . P. N. Panjawani (Karn) . . . 676
S. 10(14) --Salary--Perquisite--Definition--Exhaustive--Incentive bonus paid by employer--Expenses incurred for generating business--Not certified by employer as reimbursement of actual expenses incurred in performance of duty--Is salary and taxable-- T. K. Ginarajan v . CIT (SC) . . . 618
S. 16 --Salary--Perquisite--Definition--Exhaustive--Incentive bonus paid by employer--Expenses incurred for generating business--Not certified by employer as reimbursement of actual expenses incurred in performance of duty--Is salary and taxable-- T. K. Ginarajan v . CIT (SC) . . . 618
S. 17 --Salary--Perquisite--Definition--Exhaustive--Incentive bonus paid by employer--Expenses incurred for generating business--Not certified by employer as reimbursement of actual expenses incurred in performance of duty--Is salary and taxable-- T. K. Ginarajan v . CIT (SC) . . . 618
S. 32A --Investment allowance--Condition precedent--Manufacture or production of article or thing--Milk products made from milk amounts to production--Machinery used in manufacture of milk products--Entitled to investment allowance-- CIT v. Vizag District Milk Producers Co-op. Union Ltd. (AP) . . . 612
----Investment allowance--Law applicable--Effect of insertion of Explanation to item 5 in Eleventh Schedule w.e.f. 1-4-1988--Amendment not retrospective--Machinery used in manufacture of aerated water with synthetic essence--Entitled to investment allowance prior to 1-4-1988-- CIT v. Vijayawada Bottling Co. Ltd. (AP) . . . 625
S. 36(1)(iii) --Interest on borrowed capital--Loan by assessee to subsidiary company--Finding that loan was not from borrowed capital--Interest deductible-- CIT v. Vijayawada Bottling Co. Ltd . (AP) . . . 625
S. 37 --Business expenditure--Disallowance--Ceiling on expenditure--Hotel expenses of employee--Daily allowance granted to employee has same character as hotel expenses for purposes of section 37(3A) to (3D)-- Novopan India Ltd . v . CIT
(AP) . . . 580
(AP) . . . 580
S. 45 --Capital gains--â€Transfer†meaning of --Firm owning land--Reconstitution of firm and addition of new partners--Reduction in shares of erstwhile partners--No transfer of capital asset--Capital gains did not arise on reduction of share of partners-- CIT v . P. N. Panjawani (Karn) . . . 676
S. 80M --Intercorporate dividends--Special deduction under section 80M--Disallowance of part of special deduction on ground of expenditure--No evidence of expenditure--Disallowance not justified-- CIT v . ING Vysya Bank Ltd. (Karn) . . . 532
Chap. XII-H --Fringe benefits tax--Reassessment--Scope of Chapter XII-H--Special provisions including for reassessment of fringe benefits escaping assessment--Reassessment under general provisions not permissible in case of fringe benefits tax-- CIT v . P. G. Foils Ltd . (Guj) . . . 594
S. 139(2) --Best judgment assessment--Law applicable--Effect of amendment of section 144 w.e.f. 1-4-1989--Prior to 1-4-1989 in case of voluntary return best judgment could be made only after notice under section 139(2)--Circular No. 281 dated 22-9-1980-- CIT v. Bake Food Products P. Ltd . (AP) . . . 690
S. 144 --Best judgment assessment--Law applicable--Effect of amendment of section 144 w.e.f. 1-4-1989--Prior to 1-4-1989 in case of voluntary return best judgment could be made only after notice under section 139(2)--Circular No. 281 dated 22-9-1980-- CIT v. Bake Food Products P. Ltd . (AP) . . . 690
S. 147 --Fringe benefits tax--Reassessment--Scope of Chapter XII-H--Special provisions including for reassessment of fringe benefits escaping assessment--Reassessment under general provisions not permissible in case of fringe benefits tax-- CIT v . P. G. Foils Ltd . (Guj) . . . 594
----Reassessment--Notice--Notice not served to the name of principal officer of assessee-company but issued to company without mentioning “Pvt. Ltd.†as a suffix--Not a case of misnomer or misdescription of parties which makes entire proceedings null and void-- CIT v. Jagat Novel Exhibitors P. Ltd . (Delhi) . . . 559
----Reassessment--Notice--Validity--Issues examined in original assessment--Notice of reassessment in respect of such issues--Not valid-- CIT v . P. G. Foils Ltd.
(Guj) . . . 594
(Guj) . . . 594
S. 148 --Fringe benefits tax--Reassessment--Scope of Chapter XII-H--Special provisions including for reassessment of fringe benefits escaping assessment--Reassessment under general provisions not permissible in case of fringe benefits tax-- CIT v . P. G. Foils Ltd . (Guj) . . . 594
----Reassessment--Notice--Notice not served to the name of principal officer of assessee-company but issued to company without mentioning “Pvt. Ltd.†as a suffix--Not a case of misnomer or misdescription of parties which makes entire proceedings null and void-- CIT v. Jagat Novel Exhibitors P. Ltd . (Delhi) . . . 559
----Reassessment--Notice--Validity--Issues examined in original assessment--Notice of reassessment in respect of such issues--Not valid-- CIT v . P. G. Foils Ltd.
(Guj) . . . 594
(Guj) . . . 594
S. 158BC --Search and seizure--Block assessment--Assessment of third person--Difference between section 158BC and section 158BD--No warrant of authorisation in name of assessee--Search of business premises of assessee in consequence of search of third person--Order of assessment passed under section 158BC--Not valid--Not a defect curable under section 292B--Order passed after period of limitation laid down in section 158BC--Order not valid-- V. Ramaiah v . CIT (Mad) . . . 646
S. 158BD --Search and seizure--Block assessment--Assessment of third person--Difference between section 158BC and section 158BD--No warrant of authorisation in name of assessee--Search of business premises of assessee in consequence of search of third person--Order of assessment passed under section 158BC--Not valid--Not a defect curable under section 292B--Order passed after period of limitation laid down in section 158BC--Order not valid-- V. Ramaiah v . CIT (Mad) . . . 646
S. 256 --Reference--Finding of fact by Tribunal--Normally binding on High Court-- CIT v . Vijayawada Bottling Co. Ltd . (AP) . . . 625
S. 260A --Appeal to High Court--Territorial jurisdiction of High Court--Order passed within territorial jurisdiction of High Court--High Court could hear appeal from such order-- CIT v . Shree Ganapati Rolling Mills P. Ltd . (Gauhati) . . . 586
S. 268A --Appeal to High Court--Competency of appeal--Law applicable--Effect of insertion of section 268A with retrospective effect from 1-4-1999--Tax effect less than minimum prescribed by CBDT--Appeal not competent-- CIT v . Dr. Ashok Kumar Shukla (All) . . . 697
S. 271(1)(c) --Penalty--Concealment of income--Claim to deduction of expenditure based on decision of Supreme Court--Expenditure offered thereafter for assessment by filing revised statement--Not a case of filing inaccurate particulars--No case for levy of penalty-- CIT v. Shriram Properties and Constructions (Chennai) Ltd.
(Mad) . . . 700
(Mad) . . . 700
----Penalty--Concealment of particulars of income--Assessing Officer originally of impression that cash deposit made by assessee on single day but later finding deposit spread over twelve months--Assessee filing revised profit and loss account statement showing net profit being five per cent. before completion of assessment and agreeing to addition of three per cent.--Case of estimation of income--Imposition of penalty not warranted-- CIT v . P. Rojes (Mad) . . . 703
S. 271E --Penalty--Loans in cash exceeding specified limit--Assessee building properties--Earnest money returned to parties in cash reflected in balance-sheet--Not loan or deposit--Penalty could not be imposed-- CIT v . Madhav Enterprise Pvt. Ltd.
(Guj) . . . 588
(Guj) . . . 588
Sch. XI --Investment allowance--Law applicable--Effect of insertion of Explanation to item 5 in Eleventh Schedule w.e.f. 1-4-1988--Amendment not retrospective--Machinery used in manufacture of aerated water with synthetic essence--Entitled to investment allowance prior to 1-4-1988-- CIT v. Vijayawada Bottling Co. Ltd.
(AP) . . . 625
(AP) . . . 625
R. 6D --Business expenditure--Disallowance--Ceiling on expenditure--Hotel expenses of employee--Daily allowance granted to employee has same character as hotel expenses for purposes of section 37(3A) to (3D)-- Novopan India Ltd . v . CIT
(AP) . . . 580
(AP) . . . 580
ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB)) -- PRINT AND ONLINE EDITION
Appeal to Commissioner (Appeals) --Recovery of tax--Application for stay of recovery during pendency of appeal--Case on merits--Assessee having already paid substantial portion of total tax liability--Stay of recovery of outstanding demand--Income-tax Act, 1961, s. 40(a)(ia)-- S. S. Warad v. Additional CIT (Bangalore) . . . 290
Business expenditure --Interest on borrowed capital--Proportionate interest paid by assessee worked out based on average cost of funds against interest income to be allowed-- Essar Power Ltd. v. Additional CIT (Mumbai) . . . 264
Business income or income from other sources --Infrastructure undertaking--Special deduction--Eligible profits--Interest on employees loan and advances, interest on margin money and interest income dues towards income-tax refund adjustment from purchaser of power--Not eligible for deduction--But to be assessed as business income for limited purpose of determining head of income--Income-tax Act, 1961, s. 80-IA. -- Essar Power Ltd. v. Additional CIT (Mumbai) . . . 264
Capital or revenue receipt --Supply of power by assessee to State Electricity Board--Under power purchase agreement Board to reimburse income-tax payable by assessee--Provision for tax recoverable--Income-tax calculated and paid by Board part of tariff charged by assessee on sale of electricity and not reimbursement of expenses--Amount is income in assessee’s hands--Income-tax Act, 1961, ss. 2(24), 40(a)(ii), 198-- Essar Power Ltd. v. Additional CIT (Mumbai) . . . 264
Company --Book profits--Computation--Amendment with retrospective effect--Exclusion of provision for income-tax recoverable--Matter remanded for reconsideration in light of amendment--Income-tax Act, 1961, s. 115JB, Expln. -- Essar Power Ltd. v. Additional CIT (Mumbai) . . . 264
----Book profits--Computation--Change of law in 2009 with retrospective effect from April 1, 2001--Provision for unascertained liability--Matter remanded for reconsideration in light of amendment--Income-tax Act, 1961, s. 115JB, Expln. -- Essar Power Ltd. v. Additional CIT (Mumbai) . . . 264
Amalgamation of companies --Loss--Depreciation--Set off of brought forward loss and unabsorbed depreciation of amalgamating company--Certificate of chartered accountant--Not admitted by Dispute Resolution Panel observing that certificate appeared to be back dated--Assessee claiming to have evidence to rebut observation--Direction to Assessing Officer to readjudicate and decide under law--Matter remanded--Income-tax Act, 1961-- Alstom Projects India Ltd. v. Additional CIT (Mumbai) . . . 322
Bad debts --Assessee debiting accounts with aggregate of amounts irrecoverable--No infirmity--Income-tax Act, 1961, s. 36(1)(vii)-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
Business expenditure --Conversion of assessee, a co-operative bank to public limited company--Suits by erstwhile shareholders--Expenditure by way of legal and professional fees to protect title--Allowable-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
----Deduction only on actual payment--Provident fund contribution made before due date of filing return--Allowable--Matter remanded to verify that payments made before due date of filing return--Income-tax Act, 1961, s. 43B-- Alstom Projects India Ltd. v. Additional CIT (Mumbai) . . . 322
----Disallowance--Payments in cash exceeding specified limit--Exception where payment made by agent of assessee--Payment of lorry hire charges to lorry drivers--Assessee neither owner of vehicle nor owner of goods carried--Lorry drivers cannot be considered as agents of assessee--Failure to show payments covered by any exception--Disallowance proper--Income-tax Act, 1961, s. 40A(3)--Income-tax Rules, 1962, r. 6DD(k)-- MRS Roadways v. Deputy CIT (Cochin) . . . 317
----Disallowance--Payments in cash exceeding specified limit--Payments made to agents--Never claimed as expenditure--Not liable to tax deduction at source--Payments of reimbursement--Are purely for business expenses--Income-tax Act, 1961, ss. 40A(3), 194C-- Deputy CIT v. Maruti Freight Movers Ltd. (Kolkata) . . . 305
----Stamp duty paid on lease agreement--Added back in computation--Not to be disallowed-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
Capital or revenue expenditure --Corporate membership of club--Meant for benefit of assessee and not for any particular employee--Expenditure wholly and exclusively for purposes of business--Allowable--Income-tax Act, 1961, s. 37-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
----Payment for re-acquiring premises given on rent--For betterment of title to capital asset--Expenses capital in nature-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
----Payments to banks association for participating in shared payment network system--Facility of connectivity of automated teller machine of one bank to another bank--Advantage of enduring nature--Expenditure capital--Assessee entitled to depreciation-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
Charitable purposes --Exemption--Income from property--Assessee paying advance for purchase of land from Government grant--To be treated as application of income--No violation of section 11(5)--Grant on capital account not income or corpus of trust--Interest on fixed deposits from unutilised funds on which Government had overriding title--At par with grant and not to be treated as income--Income-tax Act, 1961, ss. 11(5), 13(1)(d)-- Additional Director of Income-tax (Exemption) v. Natrip Implementation Society (Delhi) . . . 333
----Registration of trust--Factors to be considered--Commissioner and not any other authority to dispose of application for registration--Powers cannot be delegated unless permitted by statute--Communication or order signed by Income-tax Officer cannot be treated as disposal of application--Failure by Commissioner to pass such order within time limit specified in section 12A--Application deemed to be allowed--Income-tax Act, 1961, ss. 12A, 12AA-- Pravat v. CIT (Kolkata) . . . 294
----Registration of trusts--Director (Exemptions) entitled to enquire into activities of trust before granting registration--Disqualification even where small portion of income enures to benefit of person mentioned in section 13(3)--Assessee conducting eye operations with funds received under licence from Canadian organisation to whom it was bound to pay licence fee of $1.00 yearly--Assessee not independent entity--Not entitled to registration--Income-tax Act, 1961, ss. 11, 12AA, 13(3)-- Operation Eyesight Universal v. Director of Income-tax (Exemptions) (Hyderabad) . . . 268
Deduction of tax at source --Commission--Mobile telephone service--Discount given by assessee to distributors on sale of SIM cards and recharge coupons--Constitutes commission--Assessee liable to deduct tax at source on such commission--Income-tax Act, 1961, s. 194H-- Bharati Airtel Ltd. v. Deputy CIT (TDS) (Cochin) . . . 263
----Failure to deposit tax deducted at source with Central Government--Interim order of High Court in writ petition challenging validity of rule 3 directing assessee to place tax deducted at source in separate account till further orders--Assessee placing tax deducted at source amount in a separate account--Commissioner (Appeals) justified in directing Assessing Officer to wait till final order of High Court for recovery of tax deducted at source--Income-tax Rules, 1962, r. 3.--Income-tax Act, 1961, s. 201(1), (1A)-- Deputy CIT (TDS) v. Power Grid Corporation of India Ltd. (Nagpur) . . . 203
----Professional services--Third party administrator providing services to holders of health insurance policies--Payments to hospitals or nursing homes--Are payments for professional services--Tax deductible at source--Income-tax Act, 1961, s. 194J-- Health India TPA Services P. Ltd. v. ITO (OSD) (TDS) (Mumbai) . . . 298
Depreciation --Ownership of asset--Sale and lease back--Normal lease--Civil dispute between lessor and lessee--Transaction genuine--Assessee entitled to depreciation--Income-tax Act, 1961, s. 32-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
----Rate of depreciation--Goodwill and furniture and fittings--To be bifurcated--Depreciation allowable at 25 per cent. on goodwill and 10 per cent. on furniture and fittings--Income-tax Act, 1961, s. 32(1)(ii)-- Tirumala Music Centre P. Ltd. v. Assistant CIT (Hyderabad) . . . 309
----Rate of depreciation--Payment towards leasehold rights--Goodwill--Matter remanded to allow depreciation on intangible asset--Income-tax Act, 1961, s. 32(1)(ii)-- Tirumala Music Centre P. Ltd. v. Assistant CIT (Hyderabad) . . . 309
Export --Exemption--Export oriented unit--Telecommunication and internet charges--Incurred for export business--To be excluded from export turnover as well as total turnover--Belated payment of employees’ provident fund contributions--Payment made before date of filing of returns--Allowable--Income-tax Act, 1961, s. 10B-- Assistant CIT v. SCM Microsystems (India) P. Ltd. (Chennai) . . . 178
Income --Expenditure relating to income not includible in total income--Disallowance--Commissioner (Appeals) can disallow in first instance--Disallowance at 10 per cent. of exempt income would suffice--Assessing Officer cannot simply brush aside disallowance calculated suo motu by assessee--Must give cogent reasons for not being satisfied with correctness of claim--No reasoned finding against disallowance computed and shown by assessee--Disallowance to be computed after affording reasonable opportunity to assessee--Income-tax Act, 1961, s. 14A--Income-tax Rules, 1962, r. 8D-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
Industrial undertaking --Special deduction--Unit manufacturing perfumery compound--Licence from Directorate of Industries, registration for value added tax purposes, order of Commercial Tax Department establishing that factory was in existence and assessee was engaged in manufacturing of perfumery oils--Certificate from chartered engineers in respect of production of finished goods in short period--Factory closed in 2010--Inspection in 2012 by Income-tax Inspector not sufficient to dislodge evidence--Assessee enjoying benefit of special deduction in immediate preceding year--Rule of consistency--Not to be denied benefit--Income-tax Act, 1961, s. 80-IC-- Shree Veer Aromatics Herbs Products v. ITO (Delhi) . . . 282
Interest-tax --Issue of interest itself deleted--No question of levy of interest-tax--Interest-tax not be leviable on interest collected by the assessee--Interest-tax Act, 1974-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
International transaction --Determination of arm’s length price--Agreement between parties not to exclude other approved method of determining arm’s length price--Assessee can adopt any method specified in section 92C if able to show it to be most appropriate method--Failure by Transfer Pricing Officer to conduct pricing study and independently determine arm’s length price by taking candid transactions of unrelated parties--Matter remanded--Income-tax Act, 1961, s. 92C-- Assistant CIT v. SCM Microsystems (India) P. Ltd. (Chennai) . . . 178
----Transfer pricing--Determination of arm’s length price--Transfer pricing adjustment can be made only on transactions with associated enterprises--Proportionate adjustment falling within plus or minus 5 per cent.--No transfer pricing adjustment required--Income-tax Act, 1961-- Alstom Projects India Ltd. v. Additional CIT (Mumbai) . . . 322
Loss --Revaluation of outstanding contracts on net basis--Allowable-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
----Revaluation of securities at market rate--Resulting loss allowable-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
Return of income --Delay in filing--Interest--Return filed in time but signed by general manager and chief manager and not by managing director--Merely defective not invalid--Interest not leviable--Income-tax Act, 1961, s. 234A-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
Revision --Commissioner--Bad debts--Provision for--Working out of deduction--Change of opinion--Revision not permissible--Income-tax Act, 1961, ss. 36(1)(vii), 263-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
----Commissioner--Housing project--Special deduction--Return filed after expiry of time specified in section 139(4)--Deduction allowed in assessment made under section 143(3)--Not erroneous and prejudicial to interests of Revenue--Revision to withdraw deduction not permissible--Income-tax Act, 1961, ss. 80-IB(10), 139(4), 143(3), 147, 263-- Vanshree Builders and Developers P. Ltd. v. CIT (Bangalore) . . . 188
Wealth-tax --Valuation of asset--Motor cars--80 per cent. of insurance value to be taken--Not written down value--Wealth-tax Act, 1957-- Zee Entertainment Enterprises Ltd. v. Assistant CWT (Mumbai) . . . 314
S. 10B --Export--Exemption--Export oriented unit--Telecommunication and internet charges--Incurred for export business--To be excluded from export turnover as well as total turnover--Belated payment of employees’ provident fund contributions--Payment made before date of filing of returns--Allowable-- Assistant CIT v. SCM Microsystems (India) P. Ltd. (Chennai) . . . 178
S. 11 --Charitable purpose--Registration of trusts--Director (Exemptions) entitled to enquire into activities of trust before granting registration--Disqualification even where small portion of income enures to benefit of person mentioned in section 13(3)--Assessee conducting eye operations with funds received under licence from Canadian organisation to whom it was bound to pay licence fee of $1.00 yearly--Assessee not independent entity--Not entitled to registration-- Operation Eyesight Universal v. Director of Income-tax (Exemptions) (Hyderabad) . . . 268
S. 11(5) --Charitable purposes--Exemption--Income from property--Assessee paying advance for purchase of land from Government grant--To be treated as application of income--No violation of section 11(5)--Grant on capital account not income or corpus of trust--Interest on fixed deposits from unutilised funds on which Government had overriding title--At par with grant and not to be treated as income-- Additional Director of Income-tax (Exemption) v. Natrip Implementation Society (Delhi) . . . 333
S. 12A --Charitable purpose--Registration of trust--Factors to be considered--Commissioner and not any other authority to dispose of application for registration--Powers cannot be delegated unless permitted by statute--Communication or order signed by Income-tax Officer cannot be treated as disposal of application--Failure by Commissioner to pass such order within time limit specified in section 12A--Application deemed to be allowed-- Pravat v. CIT (Kolkata) . . . 294
S. 12AA --Charitable purpose--Registration of trusts--Director (Exemptions) entitled to enquire into activities of trust before granting registration--Disqualification even where small portion of income enures to benefit of person mentioned in section 13(3)--Assessee conducting eye operations with funds received under licence from Canadian organisation to whom it was bound to pay licence fee of $1.00 yearly--Assessee not independent entity--Not entitled to registration-- Operation Eyesight Universal v. Director of Income-tax (Exemptions) (Hyderabad) . . . 268
----Charitable purpose--Registration of trust--Factors to be considered--Commissioner and not any other authority to dispose of application for registration--Powers cannot be delegated unless permitted by statute--Communication or order signed by Income-tax Officer cannot be treated as disposal of application--Failure by Commissioner to pass such order within time limit specified in section 12A--Application deemed to be allowed-- Pravat v. CIT (Kolkata) . . . 294
S. 13(1)(d) --Charitable purposes--Exemption--Income from property--Assessee paying advance for purchase of land from Government grant--To be treated as application of income--No violation of section 11(5)--Grant on capital account not income or corpus of trust--Interest on fixed deposits from unutilised funds on which Government had overriding title--At par with grant and not to be treated as income-- Additional Director of Income-tax (Exemption) v. Natrip Implementation Society (Delhi) . . . 333
S. 13(3) --Charitable purpose--Registration of trusts--Director (Exemptions) entitled to enquire into activities of trust before granting registration--Disqualification even where small portion of income enures to benefit of person mentioned in section 13(3)--Assessee conducting eye operations with funds received under licence from Canadian organisation to whom it was bound to pay licence fee of $1.00 yearly--Assessee not independent entity--Not entitled to registration-- Operation Eyesight Universal v. Director of Income-tax (Exemptions) (Hyderabad) . . . 268
S. 14A --Income--Expenditure relating to income not includible in total income--Disallowance--Commissioner (Appeals) can disallow in first instance--Disallowance at 10 per cent. of exempt income would suffice--Assessing Officer cannot simply brush aside disallowance calculated suo motu by assessee--Must give cogent reasons for not being satisfied with correctness of claim--No reasoned finding against disallowance computed and shown by assessee--Disallowance to be computed after affording reasonable opportunity to assessee-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
S. 32 --Depreciation--Ownership of asset--Sale and lease back--Normal lease--Civil dispute between lessor and lessee--Transaction genuine--Assessee entitled to depreciation-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
S. 32(1)(ii) --Depreciation--Rate of depreciation--Goodwill and furniture and fittings--To be bifurcated--Depreciation allowable at 25 per cent. on goodwill and 10 per cent. on furniture and fittings-- Tirumala Music Centre P. Ltd. v. Assistant CIT (Hyderabad) . . . 309
----Depreciation--Rate of depreciation--Payment towards leasehold rights--Goodwill--Matter remanded to allow depreciation on intangible asset-- Tirumala Music Centre P. Ltd. v. Assistant CIT (Hyderabad) . . . 309
S. 36(1)(vii) --Bad debts--Assessee debiting accounts with aggregate of amounts irrecoverable--No infirmity-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
----Revision--Commissioner--Bad debts--Provision for--Working out of deduction--Change of opinion--Revision not permissible-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
S. 37 --Capital or revenue expenditure--Corporate membership of club--Meant for benefit of assessee and not for any particular employee--Expenditure wholly and exclusively for purposes of business--Allowable-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
S. 40A(3) --Business expenditure--Disallowance--Payments in cash exceeding specified limit--Exception where payment made by agent of assessee--Payment of lorry hire charges to lorry drivers--Assessee neither owner of vehicle nor owner of goods carried--Lorry drivers cannot be considered as agents of assessee--Failure to show payments covered by any exception--Disallowance proper-- MRS Roadways v. Deputy CIT (Cochin) . . . 317
----Business expenditure--Disallowance--Payments in cash exceeding specified limit--Payments made to agents--Never claimed as expenditure--Not liable to tax deduction at source--Payments of reimbursement--Are purely for business expenses-- Deputy CIT v. Maruti Freight Movers Ltd. (Kolkata) . . . 305
S. 43B --Business expenditure--Deduction only on actual payment--Provident fund contribution made before due date of filing return--Allowable--Matter remanded to verify that payments made before due date of filing return-- Alstom Projects India Ltd. v. Additional CIT (Mumbai) . . . 322
S. 80-IB(10) --Revision--Commissioner--Housing project--Special deduction--Return filed after expiry of time specified in section 139(4)--Deduction allowed in assessment made under section 143(3)--Not erroneous and prejudicial to interests of Revenue--Revision to withdraw deduction not permissible-- Vanshree Builders and Developers P. Ltd. v. CIT (Bangalore) . . . 188
S. 80-IC --Industrial undertaking--Special deduction--Unit manufacturing perfumery compound--Licence from Directorate of Industries, registration for value added tax purposes, order of Commercial Tax Department establishing that factory was in existence and assessee was engaged in manufacturing of perfumery oils--Certificate from chartered engineers in respect of production of finished goods in short period--Factory closed in 2010--Inspection in 2012 by Income-tax Inspector not sufficient to dislodge evidence--Assessee enjoying benefit of special deduction in immediate preceding year--Rule of consistency--Not to be denied benefit-- Shree Veer Aromatics Herbs Products v. ITO (Delhi) . . . 282
S. 92C --International transaction--Determination of arm’s length price--Agreement between parties not to exclude other approved method of determining arm’s length price--Assessee can adopt any method specified in section 92C if able to show it to be most appropriate method--Failure by Transfer Pricing Officer to conduct pricing study and independently determine arm’s length price by taking candid transactions of unrelated parties--Matter remanded-- Assistant CIT v. SCM Microsystems (India) P. Ltd. (Chennai) . . . 178
S. 139(4) --Revision--Commissioner--Housing project--Special deduction--Return filed after expiry of time specified in section 139(4)--Deduction allowed in assessment made under section 143(3)--Not erroneous and prejudicial to interests of Revenue--Revision to withdraw deduction not permissible-- Vanshree Builders and Developers P. Ltd. v. CIT (Bangalore) . . . 188
S. 143(3) --Revision--Commissioner--Housing project--Special deduction--Return filed after expiry of time specified in section 139(4)--Deduction allowed in assessment made under section 143(3)--Not erroneous and prejudicial to interests of Revenue--Revision to withdraw deduction not permissible-- Vanshree Builders and Developers P. Ltd. v. CIT (Bangalore) . . . 188
S. 147 --Revision--Commissioner--Housing project--Special deduction--Return filed after expiry of time specified in section 139(4)--Deduction allowed in assessment made under section 143(3)--Not erroneous and prejudicial to interests of Revenue--Revision to withdraw deduction not permissible-- Vanshree Builders and Developers P. Ltd. v. CIT (Bangalore) . . . 188
S. 194C --Business expenditure--Disallowance--Payments in cash exceeding specified limit--Payments made to agents--Never claimed as expenditure--Not liable to tax deduction at source--Payments of reimbursement--Are purely for business expenses-- Deputy CIT v. Maruti Freight Movers Ltd. (Kolkata) . . . 305
S. 194H --Deduction of tax at source--Commission--Mobile telephone service--Discount given by assessee to distributors on sale of SIM cards and recharge coupons--Constitutes commission--Assessee liable to deduct tax at source on such commission-- Bharati Airtel Ltd. v. Deputy CIT (TDS) (Cochin) . . . 263
S. 194J --Deduction of tax at source--Professional services--Third party administrator providing services to holders of health insurance policies--Payments to hospitals or nursing homes--Are payments for professional services--Tax deductible at source-- Health India TPA Services P. Ltd. v. ITO (OSD) (TDS) (Mumbai) . . . 298
S. 201(1), (1A) --Deduction of tax at source--Failure to deposit tax deducted at source with Central Government--Interim order of High Court in writ petition challenging validity of rule 3 directing assessee to place tax deducted at source in separate account till further orders--Assessee placing tax deducted at source amount in a separate account--Commissioner (Appeals) justified in directing Assessing Officer to wait till final order of High Court for recovery of tax deducted at source-- Deputy CIT (TDS) v. Power Grid Corporation of India Ltd. (Nagpur) . . . 203
S. 234A --Return of income--Delay in filing--Interest--Return filed in time but signed by general manager and chief manager and not by managing director--Merely defective not invalid--Interest not leviable-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
S. 263 --Revision--Commissioner--Bad debts--Provision for--Working out of deduction--Change of opinion--Revision not permissible-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
----Revision--Commissioner--Housing project--Special deduction--Return filed after expiry of time specified in section 139(4)--Deduction allowed in assessment made under section 143(3)--Not erroneous and prejudicial to interests of Revenue--Revision to withdraw deduction not permissible-- Vanshree Builders and Developers P. Ltd. v. CIT (Bangalore) . . . 188
R. 3 --Deduction of tax at source--Failure to deposit tax deducted at source with Central Government--Interim order of High Court in writ petition challenging validity of rule 3 directing assessee to place tax deducted at source in separate account till further orders--Assessee placing tax deducted at source amount in a separate account--Commissioner (Appeals) justified in directing Assessing Officer to wait till final order of High Court for recovery of tax deducted at source-- Deputy CIT (TDS) v. Power Grid Corporation of India Ltd. (Nagpur) . . . 203
R. 6DD(k) --Business expenditure--Disallowance--Payments in cash exceeding specified limit--Exception where payment made by agent of assessee--Payment of lorry hire charges to lorry drivers--Assessee neither owner of vehicle nor owner of goods carried--Lorry drivers cannot be considered as agents of assessee--Failure to show payments covered by any exception--Disallowance proper-- MRS Roadways v. Deputy CIT (Cochin) . . . 317
R. 8D --Income--Expenditure relating to income not includible in total income--Disallowance--Commissioner (Appeals) can disallow in first instance--Disallowance at 10 per cent. of exempt income would suffice--Assessing Officer cannot simply brush aside disallowance calculated suo motu by assessee--Must give cogent reasons for not being satisfied with correctness of claim--No reasoned finding against disallowance computed and shown by assessee--Disallowance to be computed after affording reasonable opportunity to assessee-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
__._,_.___
No comments:
Post a Comment