Appointment And Remuneration Of Managerial Personnel: Companies Act 2013
ACS Divesh Goyal
Managing Director is Key Managerial Personal of utmost importance. He is face of a company and its decision-making mechanism. A person gain significant advantages as Managing Director which may not be there, in case of his appointment as Manager or Chief Executive Officer. While Chief Executive Officer has no special advantage except his clubbing as Key Managerial Personnel with Manager and Managing Director, Manager has some. Their definitions speak themselves. Appointment of Managing Director, Whole – Time Director and Manager is governed by provision of Section 196 of the Act. They all are a different class of Key Managerial Personnel and has specific provision of appointment in addition of Section 203, will discuss in another post.Note:
- This Section is Applicable on Both Public and Private Company.
- A company can appoint Either Managing Director or Manager not both.
Tenure:
- Appointment of Managing Director, Whole – Time Director or Manager shall not for a term exceeding five years at a time.
Re-appointment:
- The company may re-appointment them for next term before expiry of their present term but not earlier than one year before expiry of the current term. This means, company may re-appoint them for next term in last one year of current term.
DISQUALIFICATION FOR APPOINTMENT OF MD, MANAGER OR MANAGER: No Company shall appoint or continue the employment of any person as
Explanation:
- Words used in this Section are "shall appoint or continue the employment of". A company may appoint a person on these positions, who has attained the age of 70 years. By passing a Special Resolution. The explanatory statement annexed to the notice of such appointment shall justify such appointment.
CONDITIONS FOR APPOINTMENT OF MD, MANAGER OR WTD:
i. By passing of Resolution in Board Meeting ( BOD decide Terns and Condition of such appointment) and
ii. Approval of Shareholders by passing Resolution in Next General Meeting and
iii. Appointment should accordance with the Section- 197 and Schedule- V.
iv. If appointment is not accordance with the Schedule – V, Central Government permission require.
Explanation: The NOTICE convening Board or General Meeting for such appointment shall include terms and conditions of such appointment, remuneration payable and other matter including interests of directors in such appointment.
*Subject to the provisions of this Act, where an appointment of a managing director, whole-time director or manager is not approved by the company at a general meeting, any act done by him before such approval shall not be deemed to be invalid.
MANAGERIAL REMUNERATION:
Managerial remuneration is one of major corporate governance issue in India. Promoters and controlling shareholders consider themselves owner of company and get maximum remuneration. Difference between corporate tax rate and income tax rate also priority to withdraw much money from "owned" company. Indian concept of "owned company" and corporate governance has co – existence in last two decades.
Note:
- There is No Restriction relating to managerial remuneration for a Private Company.
Explanation:
- If company wants to pay remuneration exceeding 11%, can pay by approval of Share holders in General Meeting with the Central Government Approval. (here only schedule- V require to follow or we have to take approval of CG)
- The Percentage aforesaid shall be exclusive of SITTING FEES paid under sub Section- 5.
- Net profit for this section shall be computed as per method given in Section 198.
- *In case of no profit or inadequate profit, the company shall pay remuneration to directors, Managing Directors, Whole Time Directors and Managers in accordance with Schedule V OR with previous approval of Central Government.
- The remuneration payable to any director shall be determined either by articles of the company or by resolution or by special resolution passed by the company where its articles required for special resolution.
- The remuneration payable to directors shall be inclusive of all remuneration payable to him for services rendered by him in any other capacity EXCEPT
- Services rendered are of Professional In Nature and in opinion of Nomination and Remuneration Committee or of Board of Directors as the case may be, director has requisite qualification for practice of profession.
Sitting Fees to Directors:
- Director may receive remuneration by way of fee for attending meetings of the Board or committee thereof. The amount of such sum as may be decided by the Board of directors thereof which shall not exceed one lakh rupees.
- Provided that sitting fees to Independent Directors and Women Directors shall not be less than the sitting fee payable to other directors.
- Manner of Payment of Remuneration: Remuneration of Director or Manager may be paid below mention ways
a) Monthly Payment
b) Specified Percentage Of Profit
c) Partly By One And Partly By Specified Percentage Of Profit
- If any director receives directly or indirectly by way of remuneration any sum in excess of prescribed limit, he shall refund such sum. Until refund, he will keep this sum in trust for the company. Without Central Government permission, the company shall not waive recovery of any such sum.
- Every listed company shall disclose Ration of Remuneration Of Each Director To The Median Employees' remuneration and such other details as prescribed.
- Where any insurance is taken by company for "Kay Managerial Personnel Liability Insurance" Premium of such insurance shall not be included to the remuneration of any key managerial personnel. However, if such person found guilty, such premium shall be treated as part of their remuneration.
- Any director, receiving commission from the company and Managing Director or Whole Time Director may receive any remuneration or commission from holding company or subsidiary company. This information shall be disclosed by company in the Board's Report.
SCHEDULE- V
Section 197 of the companied Act, 2013 in its sub section (3) and (11) say that in case of no profit or inadequate profit, the company shall pay remuneration to directors, Managing Directors, Whole Time Directors and Managers in accordance with Schedule V OR with previous approval of Central Government.
Part- I of Schedule- V
- A person should satisfy following conditions for appointment as managerial person:
- He had not been sentenced to imprisonment for any period or to a fine exceeding Rs. 1000 for the conviction of an offence under 26 Acts listed in schedule.
- He had not been detained for any period under COFEPOSA, 1974.
- *If he is a managerial person In More Than One Company, he draws remuneration from one or more companies subject to the ceiling provided in section V of Part II.
Example: {If a person is Managerial person in only Company 'A' and acco. To 197 he can take 20Lakh as Remuneration. And if he is Managerial person in Company 'B" as per section 197 he can take 30lakh remuneration. But if same person is Managerial person in both Company A & B. Then maximum remuneration he can get all together is 30Lakh.}
- He is resident of India.
a) for taking up employment in India; or
b) for carrying on a business or vacation in India
RESIDENT IN INDIA: Resident in India include a person who has been staying in India for a continuous period of not less than twelve months immediately preceding the date of his appointment as a managerial person .
A non-resident in India shall enter India only after obtaining a proper Employment Visa.
PART- II Section- II of SCHEDULE- V: Remuneration in case of inadequate or no profit
In case of inadequate or no profit, a company may pay to a managerial person without central government approval HIGHER OF THE FOLLOWING TWO OPTIONS (A or B):
A. As per following table with approval of company by Ordinary Resolution in General Meeting :
| Where Effective Capital is | Limit of yearly remuneration payable shall not exceed (Rupees) |
| Negative or less than Rs. 5 Crore | 30 lakhs |
| 5 crores and above but less than 100 crores | 42 lakhs |
| 100 crores and above but less than 250 crores | 60 lakhs |
| 250 crores and above | 60 lakhs plus 0.01% of the effective capital in excess of Rs. 250 crores: |
*IF, SHAREHOLDERS PASSES SPECIAL RESOLUTION THIS LIMIT WILL BE DOUBLE.
B. The managerial person who was Not A:
a) Security Holder holding Securities of the company of nominal value of rupees five lakh or more or
b) An employee or
c) A director of the company or
d) Related to any director or promoter, at any time During The Two Years Prior To His Appointment as a managerial person
2.5% OF THE CURRENT RELEVANT PROFIT
*IF, SHAREHOLDERS PASSES SPECIAL RESOLUTION THIS LIMIT WILL BE DOUBLE.
CONDITIONS:
- This remuneration should be approved by resolution of Board of director and also by Nomination and Remuneration committee (where it is)
- The remuneration shall be approved by a resolution of shareholders in general meeting.
- The company has not made any default in repayment of its debt or debenture or interest thereon for a continuous period of 30 days in preceding financial year
- The approval of remuneration by special resolution should be for not more than three year. (SR is require only when we are giving remuneration double to limit mention.)
- The statement along with the notice of this resolution should provide information mentioned in schedule.
- The Auditor or Company Secretary of company or company secretary in practice certify that the requirement of this Schedule have been complied with and such certificate shall be incorporated in the return filed with the Registrar.
PART- II Section- III of SCHEDULE- V: Remuneration in case of inadequate or no profit:
In these cases, the company may pay remuneration in excess of section ii:
a) Where Remuneration in excess of these limit is Paid By Any Other Company, Condition:
- That other company is either a foreign company or has got the approval of its shareholders in general meeting to make such payment,
- That other company treats this amount as managerial remuneration for the purpose of section 197.
- The total managerial remuneration payable by such other company to its managerial persons including such amount or amounts is within permissible limits under section 197.
b) In these cases, the company may pay remuneration in excess of Section II: where—
(i) The company is a newly incorporated company, for a period of Seven Years From The Date Of Its Incorporation, or
(ii) The company Sick Company within five years from sanction of scheme of revival.
c) Where Remuneration exceeds the limit in section- II but Remuneration fixed by BIFR & NCLT.
d) An unlisted company in SEZ may pay up to Rs. 240 Lakh yearly if, company has not raised any money by
- Public issue of shares in India
- Public issue of Debentures in India
- Has not made any default in repayment of any of its debt or debenture or interest payable thereon for a continues period of 30 days
THE CONDITIONS FOR SECTION III ARE:
- An auditor or Company Secretary of the company or company secretary in practice has certifies that:
- All secured creditors and term lenders have stated in writing that they have no objection for the appointment of the managerial person as well as the quantum of remuneration and such certificate is filed along with the return as prescribed
- There is no default on payments to any creditors, and all dues to deposit holders are being settled on time.
- For Para (b) and (c), the managerial person is not receiving remuneration from any other company.
PART- II Section- IV of SCHEDULE- V: PERQUISITES NOT INCLUDED IN MANAGERIAL REMUNERATION
1. Managerial person shall be eligible for:
a) Contribution to provident fund, superannuation fund or annuity fund to the extent these either singly or put together are not taxable under the Income-tax Act.
b) gratuity payable at a rate not exceeding half a month's salary for each completed year of service
c) Encashment of leave at the end of the tenure
2. A expatriate managerial person shall be eligible for:
a) Children's education allowance
b) Holiday package studying outside India or family staying outside India
c) Leave travel concession
PART- II Section- V of SCHEDULE- V: REMUNERATION PAYABLE TO A MANAGERIAL PERSON IN TWO COMPANIES
A managerial person shall draw remuneration from one or both companies. The total remuneration drawn should not exceed the higher maximum limit admissible from any company of which he is a managerial person.
Author can be reached at csdiveshgoyal@gmail.com )
ohan Kant Bansal vs. ITO (ITAT Kolkata)
CPC hauled up for harassing assessee by imposing tax of 60% on LTCG & refusing to rectify
In the entire Income-tax Act, there is no provision charging a tax rate of 60% on long term capital gains. The Delhi High Court has issued remedial directions to improve hardships faced by tax payers while processing the e-returns at CPC, Bangalore. The Court has discussed the background that in order to fasten the processing of returns, the revenue has introduced electronic filing of income tax returns, TDS returns, e-tax payments and it operates Centralised Processing Centre (CPC) at Bangalore. This is manned by Higher Ranking Officers of Income Tax Department. The problem is faced by tax payers, when demand is raised or refund reduced on account of either suo motu adjustment by the Income Tax Department and refund against tax demands or mismatch of TDS credit or any other adjustment or disallowance of claim made by tax payer in the return and uploaded by the assessee in its e-returns. This is a general grievance among the tax payers that the AOs do not adhere to the time limit specified for the disposal of rectification applications and tax payers are invariably called upon to file duplicate application or new application. Further, no record or no receipt counters or registers for receipt of such applications are maintained. Thus, there is no record/register remained with the AO with details or particulars of rectification application made u/s. 154 of the Act as is evident from the present case. Similar directions were issued by the Delhi High Court in the case of its own motion Vs. CIT, WP(C) No. 2659/2012 dated 14.03.2013. The Delhi High Court vide para 18 has issued dictum as under: "18. Each application under Section 154 has to be disposed of and decided by a speaking order. This is the mandate of the Act. The order has to be communicated to the assessee and there is a relevant column to be filled in the register, which is now required to be maintained. The Board should issue specific directions to ensure that there is full compliance of the said requirements and directions by the Assessing Officers, Dak counters and Aayakar Sewa Kendras. This is the first mandamus or direction we have issued in the present judgment". As the facts in the present case are very clear that charging of long term capital gain can only be @ 20% in assessment year 2011-12 and not @ 60% as charged in intimation u/s 143(1) of the Act by CPC, Bangalore which according to the provisions of the Income Tax Act is not legal. Hence, we quash the intimation and appeal of assessee is allowed. The jurisdictional AO is directed to amend the intimation issued by CPC, Bangalore, while giving appeal effect to this order.
Refund of TDS couldn't be denied on account of mismatch in Form 26AS when tax was deducted by Govt. Dept.
August 1, 2014[2014] 46 taxmann.com 447 (Allahabad)
IT : Refund claim made by deductee could not be denied by Assessing Officer on ground that there was mis-match between details furnished by deductee and Form 26AS without verifying whether or not deductor had made payment of TDS in government account
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NEW DELHI, AUG 04, 2014: THE issue before the Bench is - Whether when the assessee does not cooperate in the assessment proceedings and the DVO also adopts arm-chair approach of making no independent inquiry, merely following the return on capital investment method the AO can make huge additions as unexplained investment. And the verdict favours the assessee.
Facts of the case
The assessee, an individual, had filed the return for AY 2007-08. Revenue conducted a search and seizure u/s 132 in respect of the Gopal Zarda Group including the assessee, and proceedings u/s 153A were initiated. The case of the assessee was centralized by an order and notice was issued u/s 153A requiring the assessee to file return. The assessee filed a return declaring income of Rs. 12,76,890/-. The original return in this case was filed on 05.11.2008 declaring income of Rs. 12,62,699/- . The difference was on account of interest income from bank which was declared at Rs. 14,846/-; subsequently it was disclosed as Rs. 29,035/-. AO held that property bearing No. 201 to 210, 15, Community Centre, Karkardooma, Delhi-92 shown to have been purchased for a consideration of Rs. 51 lakhs was not correctly valued. This was because it was let out to one M/s CRR Capital Services Ltd. for a monthly rent of Rs. 3,10,114/-. The assessee was asked to explain why the purchase price of the property be not determined on the basis of return on investment method and the difference be not treated as unexplained investment. In reply the assessee submitted that the property was acquired for the consideration shown in the sale deed. No other document was found to reflect the payment over and above the consideration disclosed to the authorities. During the course of assessment, the AO referred the matter for valuation of the property u/s 142(A). Apparently, the report was not available at the time of completion of assessment. Consequently, the AO estimated the purchase consideration of Rs. 1.25 crores and added Rs. 74 lacs as investment from undisclosed sources and sought to tax the same as unexplained investment. On appeal, CIT(A) allowed the assess's appeal. On further appeal, Tribunal had also rejected the Revenue's appeal.
Before the High Court, Revenue's counsel urged that the AO's order could not be faulted under the circumstances because he adopted a reasonable method for arriving at the value of the property. Explaining this, it had submitted that the return of Rs. 3,10,114/- per month as rent was disproportionate and excessive having regard to the declared cost of acquisition of the property and therefore the adoption of the return on capital method in these circumstances was reasonable. The counsel submitted that the AO had no choice because the assessee did not cooperate. It was also submitted that DVO's report subsequently furnished clearly showed that the assessee did not cooperate and care to respond to notices which compelled him to state that he could not complete the valuation exercise. The counsel also highlighted the fact that CIT (A) had accepted the assessee's contention even without calling for a remand report.
On the other hand, the assessee's counsel had submitted that whilst the AO could possibly have entertained a suspicion, that by itself could not have led to adoption of the return on capital method without a finding based upon materials that the cost of acquisition of the property was undervalued. The counsel in this regard relied upon the judgment of HC in CIT vs. Agile Properties (P.) Ltd. 2014-TIOL-626-HC-DEL-IT and CIT vs. Dinesh Jain HUF: 2012-TIOL-1060-HC-DEL-IT.
Held that,
++ from the above discussion, it is apparent that what excited the AO's suspicion was that as against the cost of acquisition of Rs. 51 lakhs or so, the assessee declared a monthly rent of Rs. 3,10,114/- for the premises. This is no doubt unusual and the AO's suspicion was perhaps in the circumstances, justified. However, that does not validate the sequitur or the sequence of events which followed. Whilst, the AO referred the matter to DVO and could have relied upon an adverse report after putting it in a manner known to law to the respondent, what is evident is that the AO proceed to add Rs. 74 lakhs without the benefit of any scientific or reasonable determination as to the value. The fact that the assessee did not cooperate would not absolve the AO from adopting some methodology in arriving at the market value which according to him had not been disclosed by the assessee. The task of the DVO in the circumstances became crucial; he could not have indulged an arm chair exercise by merely issuing notices to the assessee. He could have possibly visited the premises as the address was known and gathered information of the market value at the time of the inspection or even at the time of the acquisition of the property not only by the assessee but by other contemporaneous transactions in properties situated in the vicinity; he could have gathered information about the prevailing circle rate as on the date of acquisition as well as other relevant materials. The DVO's lack of information or inputs only compounded the error in the present case;
++ in Dinesh Jain this Court observed held that section 69B does not permit an inference to be drawn from the circumstances surrounding the transaction that the purchaser of the property must have paid more than what was actually recorded in his books of account for the simple reason that such an inference could be very subjective and could involve the dangerous consequence of a notional or fictional income being brought to tax contrary to the strict provisions of Article 265 of the Constitution of India and Entry 82 in List I of the seventh schedule thereto which deals with "Taxes on income other than agricultural income". This was one of the major considerations that weighed with the Supreme Court in K.P. Varghese in which case the provisions of subsection (2) of section 52 fell for interpretation. It was observed that Parliament cannot choose to tax as income an item which in no rational sense can be regarded as a citizen's income or even receipt. Section 52(2) (which now stands omitted) applied to the transferor of property for a consideration that was lesser than the fair market value by 15% or more; in such a case, the Assessing Officer was conferred the power to adopt the fair market value of the property as the sale price and compute the capital gains accordingly. The SC held that it was the burden of the Assessing Officer to prove that there was understatement of consideration and once that burden was discharged it was not required of him to prove the precise extent of understatement and he could adopt the difference between the stated consideration and the fair market value of the property as the understatement. The sub-section was held to provide for a "statutory best judgment" once actual understatement was proved; it obviated the need to prove the exact amount of understatement. Additional reasons for the result were (a) that the marginal note to the section referred to "cases of understatement"; (b) the speech of the Finance Minister while introducing the provision; and (c) the absurd or irrational results that would flow from a literal interpretation of the sub-section, which could not have been intended by the legislature;
++ in the present case, there was no basis for the AO to determine that the true value of the property was Rs. 1.25 crores, by adopting the return on capital method. The AO was under a duty first to ascertain what was according to him the true cost of the property. Not having done so, that error could not have been compounded by adopting a completely different methodology without any positive finding as to the cost of acquisition. The conclusions of the CIT (A) therefore, could not be faulted with, where it had observed that on a consideration of the above facts and the legal position as emerging from the decisions relied upon by the appellant it is seen that the addition made for Rs. 74 lacs is purely based on estimate and conjecture and there is no substance in the estimate made by the AO, who in any case is not authorized to make any estimate under the provisions of section 142(2A). Moreover, section 69/69B are deeming provisions and it is trite law that deeming provisions are to be strictly interpreted. AS there is no invoke section 69/69B therefore for this reason too the addition made for Rs. 74 lacs is not sustainable in law. Accordingly, the AO is directed to delete the addition made for Rs. 74 lacs on account of unaccounted investment made by the assessee out of undisclosed sources of income. For the forgoing reasons, this Court finds that there is no substantial question of law requiring determination in the present appeal. The same is consequently dismissed.
For imposition of Penalty U/s. 271(1)(c) in Assessment U/s. 153A, original return of income filed u/s 139 cannot be considered
Hoover Builders (P) Ltd. was carrying on the business of constructing and sale of flats. The AO observed during assessment proceedings that the assessee had not disclosed the correct income in the return filed on 29.9.2004 with ITO ward 12 (4) as he has declared an income of Rs. 2,10,000/- in the asstt. years 2004-05, Rs. 3 lac in the asstt. year 2005-06 Rs. 5,55,746/- and Rs. 2,41,560/- was demanded for asstt. year 2007-08 hence subsequent to the search carried out at the premises of the assesee, the assesee filed its return u/s 153A showing an income of Rs. 3,35,000/- including an income of Rs. 1,25,000/- from undisclosed sources for the asstt. year 2004-05, in asstt year 2005-06 it showed income of Rs. 22 lacs which included an income of Rs. 19 lac from undisclosed sources in asstt. year 2006-07 it showed an income of Rs. 18,62,746/- which included undisclosed income of Rs. 12,75,000/-.
In asstt. year 2007-08 it returned income of Rs. 8,18,320/- was accepted in the assessment framed u/s 143(3) and disallowance of Rs. 15,000/- was made out of the payment made to the creditors. In all these years asstt. u/s 153A / 143(3) were framed on the income undisclosed by the assessee in its return of income filed in response to the notice issued u/s 153A of the Act.
During the course of appellate proceedings it was explained by the assesee that by Hoover Building (P) Ltd. flats are sold in finished and semi finished conditions. Finished flats are standardised. Some customers had purchased semi finished flats and wanted extra work for finishing. In order to maintain customers relations and good will and also to provide services with the underlying objective of selling the flats the said work for the customers on no profit no loss basis has to be undertaken.
Money are received from the customers for the purpose of finishing according to their satisfactions and the entire amount is spent for on the said job. This is an additional service which is being provided in order to boost sales of the flats. It was explained that this activity was being carried on by one of the Directors Mr. P.K. Gupta on an individual basis since there was no profit from this activity, no income from the same was shown in the original returns. But now he himself has offered to tax suo moto voluntarily and prior to any query in the matter, net amount appearing in the seized material ( receipt less expenses so stated) even though the same amounts are mere scribbling to which no meaning can be described in the absence of any corroborative evidence to support of the same. It was accordingly submitted that the income returned may be accepted without any penal action since the same is voluntary and bonafide and has been declared even though there is no evidence of the same having being earned.
Penal proceedings were initiated and the AO levied penalty u/s 271(1)© of the Act on the declared undisclosed income. The Ld. CIT(A) has also justified the action of the AO saying that the case of the assessee falls within the general provisions of section 271(1)(C) as well as within the Explanation 5 thereof.
We find that an identical issue was raised before Delhi Bench of the Tribunal in the case of Prem Arora vs. DCIT(supra) wherein after discussing related provisions in detail, the Tribunal has come to the conclusion that for the purpose of imposition of penalty u/s 271(1)(c) as a result of search assessments made u /s 153A, original return of income filed u/s 139 cannot be considered. It was held that concealment of income has to be seen with reference to additional income brought to tax over and above the income returned by the assesee in response to notice issued u/s 153A and therefore once return of income u/s 153A is accepted by AO, it can neither be a case of concealment of income nor furnishing of inaccurate particulars of such income. In that case search was conducted on 22.11.2006 and cash was found from possession of the assessee. The assessee has drawn cash flow statement for entire period of 6 years in order to determination of undisclosed income based on seized material for each of six assessment years. The question raised before the Tribunal was as to whether penalty u/s 271(1)(C) cannot be imposed by invoking Explanation 5 in asstt. year 2004-05 in respect of cash found in previous year relevant to asstt. years 2007-08, merely on presumption that assessee might have been in possession of cash throughout period covered by search assessments. It was answered in affirmative i.e. in favour of the assessee.
The Tribunal held further that the word 'pending' occurring in the second proviso to section 153A and words "all other provisions of this Act shall apply to the assessment made under this section" as occurring in (Explanation I) to section 153A of the Income Tax Act 1961. Similar view has been expressed by the other coordinate benches of the Tribunal in the above cited cases by the Ld. AR. Respectfully following the above decisions we find that the Ld. CIT(A) was not justified in upholding the penalty levied by the AO in the present case wherein returned undisclosed income in response to the notice issued u/s 153A was accepted by the AO in the assessment framed u/s 153A / 143(3) of the Act. We thus while setting aside orders of the authorities below direct the AO to delete the penalty in question levied in the years in appeals.
Source – Pawan Kumar Gupta Vs. ACIT (ITAT Delhi) , ITA Nos. 4652, 4653,4654, 4655/DEL/2011, Date of Order: 25.07.2014
CHENNAI, AUG 04, 2014: THE main appellant, known as M/s. Southern Iron and Steel Company Ltd. ('SISCOL') was established in 1996 and was in working condition till 2002. M/s. SISCOL was also brought under 'Restructuring Scheme' under Corporate Debt Restructuring. Thereafter, M/s. SISCOL was declared a sick company and was brought under BIFR. Therefore, in order to enable them to get the finance for 'CPP', M/s. SISCOL leased out a portion of their factory premises of 50.14 acres to M/s. JSW Power Ltd (JSWPL) for the purpose of setting up of 'CPP'. on 17.01.2005, for a nominal amount of Rs. 10,000/- p.a. M/s. JSWPL pledged the land with the UTI Bank Ltd., to raise fund to the tune of Rs.62 crores, for the purpose of setting up of the 'CPP' in the leased factory land for captive use of M/s. SISCOL in the manufacture of their final product i.e., iron and steel. M/s. JSWPL also used the funds to procure capital goods for the purpose of setting up the 'CPP'. They had instructed their suppliers to indicate in the invoice as "M/s. JSWPL, Consignee of M/s. SISCOL" and on the strength of these invoices, M/s. SISCOL took the CENVAT credit on the capital goods. On 31.08.2006, M/s. SISCOL terminated the lease agreement with M/s. JSWSL and (M/s. JSWPL merged with M/s. JSWSL with effect from 01.04.2005) took over the 'CPP'. The loan of UTI Bank was also taken over by M/s. SISCOL.
In this backdrop, department issued Show Cause Notice to deny the CENVAT credit on CPP inter alia on the following grounds:
++ The capital goods have not been received by M/s. SISCOL in its premises as the land where these capital goods were received was leased out to M/s. JSWPL and the 'CPP' was not in the possession of M/s. SISCOL to take credit;++ Rule 4 of the CENVAT. Credit Rules, 2004 requires that goods should be received within the factory to take credit. The real manufacturer is only M/s. JSWPL and as the land is leased out, the owners of the land is M/s. JSWPL and not M/s. SISCOL; and++ Possession of capital goods was with M/s. JSWPL and not with M/s. SISCOL.
After hearing both sides, the Member (J) held that credit is admissible by holding that
The land has been leased to M/s. JSWPL only to set up a 'CPP' to take care of the power requirements of M/s. SISCOL on payment of annual rent of Rs.10,000/- only. The said lease deed has been executed for raising the finance for setting up the 'CPP' as per CDR scheme. Further, M/s. JSWPL and M/s. SISCOL merged with M/s. JSWSL, therefore, and relying on the case laws of M/s. Steel Authority of India Ltd. - 2007 (219) E.L.T.960 (Tri.-Del), M/s. Chemplast Sanmar Ltd. - 2004(177) E.L.T.446 (Tri.-Chennai) and M/s. Vikram Cement - 2006 (197) E.L.T.145 (S.C.), we find that the appellants are entitled to CENVAT credit on the capital goods which were being used for manufacturing of 'CPP' by M/s. JSWPL, which is being used by the appellants to manufacture their final i.e iron and steel.
However, the Member (T) felt that the above interpretation would lead to disastrous consequences and as per the above ratio, a factory of SAIL can take credit of duty paid on equipment used by NTPC in a power plant for the reason that the power from NTPC is used in the factory of SAIL at least partially. Such benefits are not intended by the scheme. He held that the credit would be admissible only from 31.08.2006, when the two companies got merged.
In view of difference of opinion, the matter was referred to Third Member. The Third Member agreed with the Member(J) and held "Even prior to 31.8.2006, it was a Captive Power Plant of M/s. SISCOL as approved by TNEB under the Electricity Act. SISCOL was a sick unit. They entered into lease agreement with M/s. JSWPL, a relationship had already been developed prior to October 2005, as evident from CDR Cell report, JSWPL balance sheet etc., for financial accommodation to get loan from UTI Bank Ltd. for setting up C.P.P. and one of the considerations is that electricity would be supplied to M/s. SISCOL, which is an integral part of manufacturing activities of M/s. SISCOL.
Thus, by Majority order, the Tribunal allowed the credit".
[2014] 47 taxmann.com 55 (Madras)/[2013] 359 ITR 612 (Madras)
IT: Where subsequent to invocation of guarantee clause, assessee made payment of guarantee on behalf of its subsidiary company, since amount in question was paid for business expediency of wholly owned subsidiary company, it was to be regarded as directly relatable to business of assessee and, thus, eligible for deduction as business expenditure
IT: Where, for assessment year 2000-01, assessee, who was successfully running business of retail supermarket stores, sold their running business to a new company and in terms of restrictive covenant did not carry on competing business in retail, amount received as non-compete fee was to be treated as capital receipt not liable to tax
Belated request for sec. 12AA registration was condonable as it ensued from filing of application before wrong forum
August 4, 2014[2014] 47 taxmann.com 62 (Hyderabad - Trib.)
IT: Delay in filing appeal against Director (Exemption)'s order be condoned as relevant papers were misplaced
IT: Where trust approached for registration under section 12A with delay and submitted that delay occurred because earlier it approached wrong forum, matter be remanded for re-adjudication before Director (ExemptionITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))--PRINT AND ONLINE EDITION
Business expenditure --Bills and vouchers of expenses produced--Disallowance on ground of insufficient details not proper--Income-tax Act, 1961-- Gillete India Ltd. v. Asst. CIT (Jaipur) . . . 83
----Disallowance--Payments liable to deduction of tax at source--Expenses incurred on trade incentive--Expenses allowed in earlier years--Payment against sale of goods to distributors--Tax deduction at source provisions not applicable--Disallowance not attracted--Income-tax Act, 1961, s. 40(a)(ia)-- Gillete India Ltd. v. Asst. CIT (Jaipur) . . . 83
----Disallowance--Payments subject to deduction of tax at source--Agreement for advertisement made with Indian company--Section 195 not applicable--Disallowance not attracted--Income-tax Act, 1961, ss. 40(a)(ia), 195-- Gillete India Ltd. v. Asst. CIT (Jaipur) . . . 83
----Inventory written off--Allowable--Income-tax Act, 1961-- Gillete India Ltd. v. Asst. CIT (Jaipur) . . . 83
----Other liabilities--Provision by Delhi Development Authority--No amount debited to profit and loss account during current year--Addition made by Assessing Officer to be deleted--Income-tax Act, 1961-- Gillete India Ltd. v. Asst. CIT (Jaipur) . . . 83
----Travelling and conveyance expenses--Production of entire module, bill and vouchers of expenses for verification by assessee--Fringe benefits tax paid--Submission of month-wise details by assessee--No disallowance on ground of insufficient supporting evidence--Income-tax Act, 1961-- Gillete India Ltd. v. Asst. CIT (Jaipur) . . . 83
Depreciation --Vehicles registered in name of assessee--Assessee entitled to depreciation--Income-tax Act, 1961-- Gillete India Ltd. v. Asst. CIT (Jaipur) . . . 83
International transactions --Arm’s length price--Determination--Reference to Transfer Pricing Officer--After receipt of order of Transfer Pricing Officer, Assessing Officer to call for objections of assessee again before making addition--Income-tax Act, 1961-- Gillete India Ltd. v. Asst. CIT (Jaipur) . . . 83
----Arm’s length price--Determination--Transfer Pricing Officer has no authority to determine total income of assessee--Adjustment to be restricted to computing arm’s length price of international transactions--Income-tax Act, 1961-- Gillete India Ltd. v. Asst. CIT (Jaipur) . . . 83
----Transfer Pricing Officer--Assessing Officer or Transfer Pricing Officer entitled to reject transfer pricing study of assessee and determine arm’s length price of transaction independently--Income-tax Act, 1961, s. 92C(3)-- Gillete India Ltd. v. Asst. CIT (Jaipur) . . . 83
PRINT EDITION
Accounting --Unutilised Modvat credit--Addition in closing stock--Finding of fact that after making adjustments made by assessee in opening stock and purchase and sale, net effect was nil--Deletion of addition justified--Income-tax Act, 1961, s. 145.-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
Advance tax --Interest--Company--Book profits--Disallowance on account of retrospective amendment of section 115JB--No interest could be levied--Income-tax Act, 1961, ss. 115JB, 234B-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
Appeal to Appellate Tribunal --Dispute Resolution Panel--Order passed under section 144C--Department filing objection prior to July 1, 2012--No power to file appeal or objection before July 1, 2012--Cross-objection not maintainable--Income-tax Act, 1961, ss. 144C, 253(1)-- JC Bamford Investments v. Deputy DIT (Delhi) . . . 493
----Failure by assessee to appear--Appeal to be dismissed in limine--Income-tax Act, 1961--Income-tax (Appellate Tribunal) Rules, 1963, r. 19(2)-- Susham Singla v. Asst. CIT (Chandigarh) . . . 449
----Maintainability of cross-objection--Revenue should have objection either against direction of Dispute Resolution Panel or against order passed by Assessing Officer--Income-tax Act, 1961-- JC Bamford Investments v. Deputy DIT (Delhi) . . . 493
Business expenditure --Capital or revenue expenditure--Repair and maintenance charges in connection with roads, drainages, boundary wall and buildings, platform, because of frequent rains--Revenue expenditure--Expenditure on plastering, polishing, false ceiling, electrical fittings, fresh carpets in new office taken on lease--Expenses incurred on assets not owned by assessee to give better look to office premises--No asset of enduring nature acquired--Revenue expenditure-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
----Deduction only on actual payment--Excise duty--Cenvat credit--Allowable--Balance in personal ledger account not allowable--Income-tax Act, 1961, s. 43B-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
----Disallowance--Payments liable to deduction of tax at source--Assessee paying godown rent on behalf of its customers and getting reimbursement--Assessee merely acting as intermediary--Godown rent not eligible for deduction under sections 30 to 38 in hands of assessee--No question of disallowance--Income-tax Act, 1961, ss. 40(a)(ia), 194-I-- Jaguar Enterprises v. Deputy CIT (Delhi) . . . 483
----Disallowance--Payments subject to deduction of tax at source--Tax deducted at source paid before due date for filing of return--Expenditure cannot be disallowed--Income-tax Act, 1961, s. 40(a)(ia)-- Genesis Organics P. Ltd. v. Deputy CIT (Ahd) . . . 555
----Expenses incurred in cash--Act does not prohibits cash payments--Genuineness of expenditure not in doubt--Disallowance of one per cent. sufficient--Income-tax Act, 1961-- Deputy CIT v. Vijay Sales (Mumbai) . . . 546
----Foreign travel expenditure--No material to show that foreign travel expenses incurred for business purposes--To be disallowed-- Genesis Organics P. Ltd. v. Deputy CIT (Ahd) . . . 555
----Year in which allowable--Agreement after close of balance sheet for financial year 2002-03 for wage revision--Incremental liability for period January 1, 2003 to March 31, 2004 debited to profit and loss account for financial year 2003-04--Allowable-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
Capital gains --Short-term capital gains--Depreciable assets--Only if full value of consideration exceeds sum mentioned in section--Categorical finding that consideration far less than sum mentioned in three parameters--Capital gains cannot be taxed--Income-tax Act, 1961, s. 50-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
Capital or revenue expenditure --Expenditure incurred on civil works to building of domestic unit and export oriented unit--Assessing Officer should verify exact nature of expenditure--Matter remanded--Income-tax Act, 1961-- Millipore (India) P. Ltd. v. Deputy CIT (Bangalore) . . . 508
Charitable purpose --Educational institution--Assessee engaged in preparation of source material for science education to be imparted through schools to students--Is educational institution--Charging of fees for services not a disqualification--Income-tax Act, 1961, s. 11-- ITO v. Science Olympiad Foundation (Delhi) . . . 451
----Educational society--Computation of income--Investment in assets treated as application of income--Assessee entitled to depreciation on assets--Not a case of double deduction--Income-tax Act, 1961-- ITO (Exemption) v. S. D. College Society (Lahore) (Delhi) . . . 475
Company --Book profits--Export--Special deduction--Deduction under section 80HHC to be worked out on basis of adjusted book profits not on basis of profits of business computed under normal provisions of Act--Change of law with retrospective effect from April 1, 2005--For assessment year 2005-06 deduction under section 80HHC to be on basis of profits of business--Income-tax Act, 1961, ss. 80HHC, 115JA, 115JB-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
Export --Exemption--Computation of deduction--Remuneration of director managing domestic and export units--Director's remuneration liable to be allocated among domestic unit and export oriented unit in ratio of turnover--Income-tax Act, 1961, s. 10B-- Millipore (India) P. Ltd. v. Deputy CIT (Bangalore) . . . 508
----Special deduction--Computation of total turnover--Internal consumption of power--Proceeds of sale of scrap--Not to form part of total turnover--Income-tax Act, 1961, s. 80HHC-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
----Special deduction--Industrial undertaking--Deduction under section 80-IA not to be reduced from profits of business for purpose of computing deduction under section 80HHC--Income-tax Act, 1961, ss. 80-IA, 80HHC-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
----Special deduction--Profits of business--Assessee undertaking leasing business--Lease rental income part of operational income of assessee and included in total turnover--Assessing Officer not entitled to reduce 90 per cent. from profits--Income from cable division and lease rental income to be included in profits of business--Income-tax Act, 1961, s. 80HHC-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
----Special deduction--Profits of business--Rental income from staff and interest from bank and others--90 per cent. to be excluded--Processing charges and other income pertaining to cable division--90 per cent. not to be excluded--Only 90 per cent. of net receipts to be reduced not of gross receipts--Income-tax Act, 1961, s. 80HHC, Expln. (baa) -- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
----Special deduction--Sales tax and excise duty not part of total turnover--Income-tax Act, 1961, s. 80HHC-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
Housing project --Special deduction under section 80-IB(10)--Can be allowed pro rata relief in respect of units fulfilling conditions laid down in section 80-IB(10)--Income-tax Act, 1961, s. 80-IB(10)-- Deputy CIT v. Rajarathnam Construction P. Ltd. (Chennai) . . . 466
Income --Accrual--Reimbursement of expenses--“Other clearing expensesâ€--Part of total reimbursement--No profit element--No notional profit includible in total income--Income-tax Act, 1961-- Jaguar Enterprises v. Deputy CIT (Delhi) . . . 483
----Accrual--Trade discount and commission--Issue of discount notes and credit notes on commission after close of accounting year--Income did not accrue in current assessment year and not taxable--Income-tax Act, 1961-- Deputy CIT v. Vijay Sales (Mumbai) . . . 546
----Disallowance of expenditure in relation to income not forming part of total income--Dividend--Assessee’s submission that investment not out of borrowed funds but from surplus and accumulated funds on account of retention of sales tax in terms of Government schemes--Matter remanded to Assessing Officer for verification--If assessee found to have made investment out of accumulated or surplus funds, no interest to be disallowed--All administrative expenses regardless of nature of expenses not to be taken for apportioning disallowance on pro rata basis--At most, directors’ fees and expenses and auditor’s remuneration attributable as administrative expenses to exempt income--Taking ratio in which Assessing Officer worked out, disallowance Rs. 50,000 reasonable--Income-tax Act, 1961, s. 14A-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
Income from undisclosed sources --Unexplained cash--Discrepancies in books of account--Failure by managing partner to give explanation at time of assessment proceedings--Payments outside books of account liable to addition--Income-tax Act, 1961-- Raghavendra Textiles v. ITO (Hyd) . . . 540
Industrial undertaking --Special deduction--Generation of power for captive consumption--Determination of transfer price--Market price--Rate at which private parties sold power to Karnataka Electricity Board not benchmark for determining market price--Price at which customers got electricity in open market criteria for benchmarking market price--Factors like taxes, duties not to be deducted from market price as these embedded in price--Prorated indirect expenses to be reduced--Income-tax Act, 1961, s. 80-IA(8)-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
----Special deduction--Generation of power--Assessee engaged in manufacture of paper--Units set up for generation of power for capital consumption--That assessee got units operated by third parties not relevant--Entitled to deduction under section 80-IA--Income-tax Act, 1961, s. 80-IA-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
Intercorporate dividends --Special deduction--Investment which generated dividend income far less than interest-free funds available with assessee--No presumption that borrowed funds utilised for making investment--No disallowance of interest warranted--Income-tax Act, 1961, s. 80M-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
Interest on excess refund --Retrospective amendment--Levy and quantification justified--Income-tax Act, 1961, s. 234D-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
International transactions --Arm’s length price--Determination--Selection of comparables--Company mainly involved in domestic business not comparable to 100 per cent. export oriented unit--Assessee providing research and development services--Companies engaged in services relating to market research and analysis or providing mud logging services or engaged in bio-informatic services, software development services not functionally similar and not comparable to assessee--Income-tax Act, 1961-- Millipore (India) P. Ltd. v. Deputy CIT (Bangalore) . . . 508
Non-resident --Permanent establishment--Furnishing of services including managerial services--Services rendered out of India and by “other personnelâ€--Activities continuing for period of more than 90 days within 12 months period--Service permanent establishment of assessee established--Income-tax Act, 1961-- JC Bamford Investments v. Deputy DIT (Delhi) . . . 493
----Royalty--Lower rate of tax--Beneficial owner admittedly resident of United Kingdom--Tax to be charged at 15 per cent.--Income-tax Act, 1961--Double Taxation Avoidance Agreement between India and the United Kingdom, art. 13(2)-- JC Bamford Investments v. Deputy DIT (Delhi) . . . 493
Reassessment --Income escaping assessment--Reason to believe--Assessing Officer should be in possession of valid information which should have a live nexus with assessee’s record of income--Reasons are self-contradictory and based only on suspicion--Reopening to be quashed--Income-tax Act, 1961, s. 147-- Indo Arab Air Services v. Asst. CIT (Delhi) . . . 526
Rectification of mistake --Rectification proceedings at instance of assessee--Assessing Officer including receipts from company outside India to total income without notice to assessee--Addition on debatable point--Not sustainable--Income-tax Act, 1961, s. 154-- Asst. DIT v. Linklaters (Mumbai) . . . 470
Revision --Commissioner--Jurisdiction--Rectification of order of assessment--Order of assessment merging in order of rectification--Commissioner has no jurisdiction thereafter to revise original order of assessment--Income-tax Act, 1961, ss. 154, 263-- Suman Bansal v. ITO (Delhi) . . . 478
Art. 13(2) --Non-resident--Royalty--Lower rate of tax--Beneficial owner admittedly resident of United Kingdom--Tax to be charged at 15 per cent.-- JC Bamford Investments v. Deputy DIT (Delhi) . . . 493
S. 10B --Export--Exemption--Computation of deduction--Remuneration of director managing domestic and export units--Director's remuneration liable to be allocated among domestic unit and export oriented unit in ratio of turnover-- Millipore (India) P. Ltd. v. Deputy CIT (Bangalore) . . . 508
S. 11 --Charitable purpose--Educational institution--Assessee engaged in preparation of source material for science education to be imparted through schools to students--Is educational institution--Charging of fees for services not a disqualification-- ITO v. Science Olympiad Foundation (Delhi) . . . 451
S. 14A --Income--Disallowance of expenditure in relation to income not forming part of total income--Dividend--Assessee’s submission that investment not out of borrowed funds but from surplus and accumulated funds on account of retention of sales tax in terms of Government schemes--Matter remanded to Assessing Officer for verification--If assessee found to have made investment out of accumulated or surplus funds, no interest to be disallowed--All administrative expenses regardless of nature of expenses not to be taken for apportioning disallowance on pro rata basis--At most, directors’ fees and expenses and auditor’s remuneration attributable as administrative expenses to exempt income--Taking ratio in which Assessing Officer worked out, disallowance Rs. 50,000 reasonable-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
S. 40(a)(ia) --Business expenditure--Disallowance--Payments liable to deduction of tax at source--Assessee paying godown rent on behalf of its customers and getting reimbursement--Assessee merely acting as intermediary--Godown rent not eligible for deduction under sections 30 to 38 in hands of assessee--No question of disallowance-- Jaguar Enterprises v. Deputy CIT (Delhi) . . . 483
----Business expenditure--Disallowance--Payments subject to deduction of tax at source--Tax deducted at source paid before due date for filing of return--Expenditure cannot be disallowed-- Genesis Organics P. Ltd. v. Deputy CIT (Ahd) . . . 555
S. 43B --Business expenditure--Deduction only on actual payment--Excise duty--Cenvat credit--Allowable--Balance in personal ledger account not allowable-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
S. 50 --Capital gains--Short-term capital gains--Depreciable assets--Only if full value of consideration exceeds sum mentioned in section--Categorical finding that consideration far less than sum mentioned in three parameters--Capital gains cannot be taxed-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
S. 80HHC --Company--Book profits--Export--Special deduction--Deduction under section 80HHC to be worked out on basis of adjusted book profits not on basis of profits of business computed under normal provisions of Act--Change of law with retrospective effect from April 1, 2005--For assessment year 2005-06 deduction under section 80HHC to be on basis of profits of business-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
----Export--Special deduction--Computation of total turnover--Internal consumption of power--Proceeds of sale of scrap--Not to form part of total turnover-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
----Export--Special deduction--Industrial undertaking--Deduction under section 80-IA not to be reduced from profits of business for purpose of computing deduction under section 80HHC-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
----Export--Special deduction--Sales tax and excise duty not part of total turnover-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
----Export--Special deduction--Profits of business--Assessee undertaking leasing business--Lease rental income part of operational income of assessee and included in total turnover--Assessing Officer not entitled to reduce 90 per cent. from profits--Income from cable division and lease rental income to be included in profits of business-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
S. 80HHC, Expln. (baa) --Export--Special deduction--Profits of business--Rental income from staff and interest from bank and others--90 per cent. to be excluded--Processing charges and other income pertaining to cable division--90 per cent. not to be excluded--Only 90 per cent. of net receipts to be reduced not of gross receipts-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
S. 80-IA --Export--Special deduction--Industrial undertaking--Deduction under section 80-IA not to be reduced from profits of business for purpose of computing deduction under section 80HHC-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
----Industrial undertaking--Special deduction--Generation of power--Assessee engaged in manufacture of paper--Units set up for generation of power for capital consumption--That assessee got units operated by third parties not relevant--Entitled to deduction under section 80-IA-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
S. 80-IA(8) --Industrial undertaking--Special deduction--Generation of power for captive consumption--Determination of transfer price--Market price--Rate at which private parties sold power to Karnataka Electricity Board not benchmark for determining market price--Price at which customers got electricity in open market criteria for benchmarking market price--Factors like taxes, duties not to be deducted from market price as these embedded in price--Prorated indirect expenses to be reduced-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
S. 80-IB(10) --Housing project--Special deduction under section 80-IB(10)--Can be allowed pro rata relief in respect of units fulfilling conditions laid down in section 80-IB(10)-- Deputy CIT v. Rajarathnam Construction P. Ltd. (Chennai) . . . 466
S. 80M --Intercorporate dividends--Special deduction--Investment which generated dividend income far less than interest-free funds available with assessee--No presumption that borrowed funds utilised for making investment--No disallowance of interest warranted-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
S. 115JA --Company--Book profits--Export--Special deduction--Deduction under section 80HHC to be worked out on basis of adjusted book profits not on basis of profits of business computed under normal provisions of Act--Change of law with retrospective effect from April 1, 2005--For assessment year 2005-06 deduction under section 80HHC to be on basis of profits of business--West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
S. 115JB --Advance tax--Interest--Company--Book profits--Disallowance on account of retrospective amendment of section 115JB--No interest could be levied-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
----Company--Book profits--Export--Special deduction--Deduction under section 80HHC to be worked out on basis of adjusted book profits not on basis of profits of business computed under normal provisions of Act--Change of law with retrospective effect from April 1, 2005--For assessment year 2005-06 deduction under section 80HHC to be on basis of profits of business-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
S. 144C --Appeal to Appellate Tribunal--Dispute Resolution Panel--Order passed under section 144C--Department filing objection prior to July 1, 2012--No power to file appeal or objection before July 1, 2012--Cross-objection not maintainable-- JC Bamford Investments v. Deputy DIT (Delhi) . . . 493
S. 145 --Accounting--Unutilised Modvat credit--Addition in closing stock--Finding of fact that after making adjustments made by assessee in opening stock and purchase and sale, net effect was nil--Deletion of addition justified-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
S. 147 --Reassessment--Income escaping assessment--Reason to believe--Assessing Officer should be in possession of valid information which should have a live nexus with assessee’s record of income--Reasons are self-contradictory and based only on suspicion--Reopening to be quashed-- Indo Arab Air Services v. Asst. CIT (Delhi) . . . 526
S. 154 --Rectification of mistake--Rectification proceedings at instance of assessee--Assessing Officer including receipts from company outside India to total income without notice to assessee--Addition on debatable point--Not sustainable-- Asst. DIT v. Linklaters (Mumbai) . . . 470
----Revision--Commissioner--Jurisdiction--Rectification of order of assessment--Order of assessment merging in order of rectification--Commissioner has no jurisdiction thereafter to revise original order of assessment-- Suman Bansal v. ITO (Delhi) . . . 478
S. 194-I --Business expenditure--Disallowance--Payments liable to deduction of tax at source--Assessee paying godown rent on behalf of its customers and getting reimbursement--Assessee merely acting as intermediary--Godown rent not eligible for deduction under sections 30 to 38 in hands of assessee--No question of disallowance-- Jaguar Enterprises v. Deputy CIT (Delhi) . . . 483
S. 234B --Advance tax--Interest--Company--Book profits--Disallowance on account of retrospective amendment of section 115JB--No interest could be levied-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
S. 234D --Interest on excess refund--Retrospective amendment--Levy and quantification justified-- West Coast Paper Mills Ltd. v. Addl. CIT (Mumbai) . . . 560
S. 253(1) --Appeal to Appellate Tribunal--Dispute Resolution Panel--Order passed under section 144C--Department filing objection prior to July 1, 2012--No power to file appeal or objection before July 1, 2012--Cross-objection not maintainable-- JC Bamford Investments v. Deputy DIT (Delhi) . . . 493
S. 263 --Revision--Commissioner--Jurisdiction--Rectification of order of assessment--Order of assessment merging in order of rectification--Commissioner has no jurisdiction thereafter to revise original order of assessment-- Suman Bansal v. ITO (Delhi) . . . 478
R. 19(2) --Appeal to Appellate Tribunal--Failure by assessee to appear--Appeal to be dismissed in limine-- Susham Singla v. Asst. CIT (Chandigarh) . . . __._,_.___
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