SC : Dismisses Arvind Footwear's SLP on Sec. 80IB deduction on duty drawback
Arvind Footwear Pvt. Ltd.
August 12 2014
SC dismisses assessee's appeal against Allahabad HC decision; Allahabad HC had reversed ITAT order which held that Sec. 80IB deduction on duty-drawback could be allowedSri Laxmi Satyanarayana Oil Mills Vs CIT
Income Tax - Sections 40A(3), 260(1), rule 6DD - cash basis - proof of payment.
Whether once an assessee furnishes the circumstances under which the payment in the manner prescribed in Section 40A (3) was not practicable or would have caused genuine problems, the proviso, and thereby the Rule 6DD, get attracted - Whether in case there existed some justification for the traders, in insisting the payment of amounts, in cash, disallowance u/s 40A(3) can be made - Whether the circumstances mentioned in the circular of the CBDT can be said to be exhaustive - Whether the CBDT has expressed the view that clause (j) of Rule 6DD must be liberally construed.. - Assessee's appeal allowed : ANDHRA PRADESH HIGH COURT
Zero Tolerance Against Corruption – Ms Nirmala SitharamanGrowing Synergy Between Ministry of Commerce and Department of Revenue, Ministry of Finance is a Very Good Development for the Economy at Large; There will be Zero Tolerance Against Corruption.: Ms Nirmala Sitharaman The Minister of State for Finance, Commerce, Industry and Corporate Affairs Ms. Nirmala Sitharaman said that synergy between Ministry of Commerce and Department of Revenue, Ministry of Finance which has grown stronger in last couple of months, is very good development for the economy at large. She said that the Commerce Ministry is willing to share its properties lying idle to provide space for the offices of Customs, Central Excise and Service Tax Department in the field. She said that the Government is in favour of trade facilitation in which the role of customs department will be central. Ms. Nirmala Sitharaman was delivering the Valedictory Address on the conclusion of the two day Annual Conference of the Chief Commissioners and Directors General of Customs, Central Excise and Service Tax here today. A film on Service Tax was also released on this occasion. The Minister of State for Finance Ms. Nirmala Sitharaman further said that the revenue targets in the case of indirect taxes for the current financial year 2014-15 are challenging but are very much achievable. She said that Goods and Services Tax (GST) will be a reality soon as consultation process with the State Governments is now in final stages She said that GST will result in simple and unified tax structure which will bring transparency and efficiency in tax administration. Ms Sitharaman said that GST will boost revenue collections for both Centre and the States. The Minister of State for Finance Ms. Nirmala Sitharaman said that the present Government has zero tolerance towards corruption. She said that the Government wants greater transparency, accountability and efficiency in the system including in tax administration. Ms J.M. Shanti Sundharam, Chairperson, CBEC assured that the officers and staff of CBEC will not leave any stone unturned to achieve the revenue targets fixed for indirect taxes for the current financial year 2014-15.She said that CBEC is in constant dialogue with the Ministry of Commerce to increase its revenue share in International trade. She said that the Board has taken various measures to provide better services to its clients. Earlier, Shri Najib Shah, Director General, Revenue Intelligence gave a detailed presentation about the proceedings and outcome of the two day conference. , The Valedictory Function was attended by Shri Shakti Kanta Das, Revenue Secretary, Members of CBEC and senior officers of Department of Revenue and Central Board of Excise and Customs among others. Earlier in the day, Dr Prajapati Trivedi, Secretary (PMD), Cabinet Secretariat delivered a lecture on the "Frontiers of New Public Management"  Canada Assurance and Advisory Services
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Companies have to comply with CSR norms:
Certain class of profitable companies are required to spend at least two per cent of their three-year average annual net profit towards CSR activities. The norms came into force from April 1.
Government will keep close watch on social welfare spending by corporates to check whether they are complying with Corporate Social Responsibility (CSR) norms under the new Companies Act. Certain class of profitable companies are required to spend at least two per cent of their three-year average annual net profit towards CSR activities. The norms came into force from April 1.
Replying to questions in Rajya Sabha, Minister of State for Corporate Affairs Nirmala Sitharaman said the Companies Act, 2013 came into operation this year only and the government was watching the spendings under CSR. "We are keenly watching" the companies," she said, adding, in case a company does not meet the norms, government would certainly ask for reasons. The Act does not mandate CSR for all companies. However, every company having net worth or net profit of Rs 500 crore or more or turnover of Rs 1,000 crore or more during any financial year has to constitute a CSR Committee of the Board and take up CSR activities. Sitharaman said there are no tax exemptions for CSR activities, except for spending on 11 specific activities. In her written reply, she said the issue of amending rules relating to CSR with a view to plugging any loophole can be examined only after some information about the actual implementation is available. As relevant provisions of the law have come into force this year and CSR policies of companies are in the process of formulation, specific details would be available once Board reports are available after September, 2015, she said.
Source: Press Trust of India dated August 12, 2014.
KOLKATA, AUG 13, 2014: THE issues before the Bench are - Whether when a private limited company is converted into a partnership firm and interest free loans are advanced out of the reserves of the erstwhile company in the same ratio as the profit-sharing, it flouts proviso (f) to Sec 47(xiiib) and the assessee is not entitled to the benefit of Sec 47. YES is the Tribunal's answer.
Facts of the case
The assessee firm, Aravali Polymers, LLP, came into existence with effect from August 2010, once the private limited company by the same name was converted into a limited liability partnership under the provisions of sections 56 and 58 of the Companies Act.
The entire undertaking of Aravali Polymers Pvt. Ltd. was dissolved and all its moveable and immovable property, tangible and intangible assets, besides rights and liabilities were transferred to the assessee firm. The assessee had also received the Reserves and Surplus of the dissolved company. The main assets of the dissolved company were shares of East India Hotels which were also transferred to the assesee. The assessee sold these shares, which were offered to tax as long term capital gains and claimed exemption under section 47(xiiib). The assessee had also given interest free loans to its partners, the erstwhile shareholders of the dissolved company, in the same ratio as their profit sharing.
The AO invoked section 47A(4) for computing the capital gains tax adopted the market value of the shares of East India Hotels and after reducing the cost of acquisition, arrived at a higher computation of capital gains. The AO also disallowed the assessee's claim under section 47(xiiib).
On appeal, the Tribunal held that,
++ once the AO has denied the assessee's claim of section 47(xiiib) in the initial year itself, will the provision of section 47A(4) come into play or is it directly under the control of section 45 in respect of the levy of capital gains. Admittedly the assessee has given a loan to the erstwhile shareholders. However, the proviso (c) to section 47 talks of the shareholders of the Company to not receive any consideration or benefit directly or indirectly in any form or manner other than by way of shares in profit and capital contribution in the Limited Liability Partnership. A reading of the said proviso (c) gives a meaning that both the Company and the Limited Liability Partnership must exist for the shareholders of the Company to receive any consideration. Admittedly, in the present case, the Company does not exist after conversion. Therefore, the question of a violation of Proviso (c) to Section 47(xiiib) does not exist;
++ coming to the proviso (f) to Section 47(xiiib), it bars payment either directly or indirectly to any partner out of the accumulated profit standing in the accounts of the company on the date of conversion for a period of three years from the date of conversion. Here the assessee-firm gave loans to its partners. This loan, more so a part of the loan, has been paid out of the Reserves and Surplus of the erstwhile Company which, in fact , represents the accumulated profit standing in the accounts of the erstwhile Company. The fact that the loan has been paid, it is an interest free loan coupled with the fact that the loan has been given to its partners in the same ratio as profit sharing shows that the amount has been given directly to the partners out of the balance of the accumulated profits standing in the accounts of the Company on the date of conversion. It clearly shows that there is a violation of proviso (f) to section 47(xiiib). Proviso (f) of section 47(xiiib) having been violated, the benefit of the provisions of section 47, which deems certain transactions to be not regarded as transfer stands violated;
++ in the present case, the assessment year under appeal is the year on which the conversion took place and in that year itself, the conditions prescribed for the benefit of section 47(xiiib) were not complied with and consequently the provisions of section 47(xiiib) were not available to the assessee, then where is the non-compliance of the proviso to section 47(xiiib) to attract 47A(4). It is in such circumstances that section 45 comes into play as section 47(xiiib) itself is not applicable to the assessee;
++ this conversion of the private limited company into a Limited Liability Partnership does not have the protection of section 47(xiiib) in the assessee's case. Consequently the capital gain on the same is liable to be considered. In the computation of capital gains, nowhere in the Act is there provision, more so in section 45, for deeming the sale price in the case of equity shares. The value at which the shares or the assets of the Company Aravali Polymers Pvt . Ltd. was taken over by the Limited Liability Partnership firm, would be the sale price and the cost of acquisition thereof is to be as per books of the erstwhile Company;
++ in these circumstances, the issue of computation of the capital gains under section 45 is restored to the file of the AO, who shall take the sale consideration as on 12.10.2010 at the figure, at which the assets of the erstwhile firm has been acquired or taken over by the assessee;
++ the crux of the finding in this order is
• the assessee has not complied with the proviso to section 47(xiiib). Consequently the benefit of section 47(xiiib) is not available to the assessee.
• As the assessee did not have the benefit of section 47(xiiib), the provision of section 47A(4) does not apply.
• The capital gains in respect of the transfer of the assets in the hands of M/s. Aravali Polymers Pvt. Ltd. to the appellant firm Aravali Polymers LLP is to be computed under section 45 of the Income Tax Act for which purpose, the issue is restored to the file of the AO.
Income tax - Whether when a private limited company is converted into partnership firm and interest-free loans are advanced out of reserves of erstwhile company in the same ratio as profit-sharing, it flouts proviso (f) to Sec 47(xiiib) and the assessee is not entitled to the benefit of Sec 47 - YES: ITAT
By TIOL News Service
KOLKATA, AUG 13, 2014: THE issues before the Bench are - Whether when a private limited company is converted into a partnership firm and interest free loans are advanced out of the reserves of the erstwhile company in the same ratio as the profit-sharing, it flouts proviso (f) to Sec 47(xiiib) and the assessee is not entitled to the benefit of Sec 47. YES is the Tribunal's answer.
Facts of the case
The assessee firm, Aravali Polymers, LLP, came into existence with effect from August 2010, once the private limited company by the same name was converted into a limited liability partnership under the provisions of sections 56 and 58 of the Companies Act.
The entire undertaking of Aravali Polymers Pvt. Ltd. was dissolved and all its moveable and immovable property, tangible and intangible assets, besides rights and liabilities were transferred to the assessee firm. The assessee had also received the Reserves and Surplus of the dissolved company. The main assets of the dissolved company were shares of East India Hotels which were also transferred to the assesee. The assessee sold these shares, which were offered to tax as long term capital gains and claimed exemption under section 47(xiiib). The assessee had also given interest free loans to its partners, the erstwhile shareholders of the dissolved company, in the same ratio as their profit sharing.
The AO invoked section 47A(4) for computing the capital gains tax adopted the market value of the shares of East India Hotels and after reducing the cost of acquisition, arrived at a higher computation of capital gains. The AO also disallowed the assessee's claim under section 47(xiiib).
On appeal, the Tribunal held that,
++ once the AO has denied the assessee's claim of section 47(xiiib) in the initial year itself, will the provision of section 47A(4) come into play or is it directly under the control of section 45 in respect of the levy of capital gains. Admittedly the assessee has given a loan to the erstwhile shareholders. However, the proviso (c) to section 47 talks of the shareholders of the Company to not receive any consideration or benefit directly or indirectly in any form or manner other than by way of shares in profit and capital contribution in the Limited Liability Partnership. A reading of the said proviso (c) gives a meaning that both the Company and the Limited Liability Partnership must exist for the shareholders of the Company to receive any consideration. Admittedly, in the present case, the Company does not exist after conversion. Therefore, the question of a violation of Proviso (c) to Section 47(xiiib) does not exist;
++ coming to the proviso (f) to Section 47(xiiib), it bars payment either directly or indirectly to any partner out of the accumulated profit standing in the accounts of the company on the date of conversion for a period of three years from the date of conversion. Here the assessee-firm gave loans to its partners. This loan, more so a part of the loan, has been paid out of the Reserves and Surplus of the erstwhile Company which, in fact , represents the accumulated profit standing in the accounts of the erstwhile Company. The fact that the loan has been paid, it is an interest free loan coupled with the fact that the loan has been given to its partners in the same ratio as profit sharing shows that the amount has been given directly to the partners out of the balance of the accumulated profits standing in the accounts of the Company on the date of conversion. It clearly shows that there is a violation of proviso (f) to section 47(xiiib). Proviso (f) of section 47(xiiib) having been violated, the benefit of the provisions of section 47, which deems certain transactions to be not regarded as transfer stands violated;
++ in the present case, the assessment year under appeal is the year on which the conversion took place and in that year itself, the conditions prescribed for the benefit of section 47(xiiib) were not complied with and consequently the provisions of section 47(xiiib) were not available to the assessee, then where is the non-compliance of the proviso to section 47(xiiib) to attract 47A(4). It is in such circumstances that section 45 comes into play as section 47(xiiib) itself is not applicable to the assessee;
++ this conversion of the private limited company into a Limited Liability Partnership does not have the protection of section 47(xiiib) in the assessee's case. Consequently the capital gain on the same is liable to be considered. In the computation of capital gains, nowhere in the Act is there provision, more so in section 45, for deeming the sale price in the case of equity shares. The value at which the shares or the assets of the Company Aravali Polymers Pvt . Ltd. was taken over by the Limited Liability Partnership firm, would be the sale price and the cost of acquisition thereof is to be as per books of the erstwhile Company;
++ in these circumstances, the issue of computation of the capital gains under section 45 is restored to the file of the AO, who shall take the sale consideration as on 12.10.2010 at the figure, at which the assets of the erstwhile firm has been acquired or taken over by the assessee;
++ the crux of the finding in this order is
• the assessee has not complied with the proviso to section 47(xiiib). Consequently the benefit of section 47(xiiib) is not available to the assessee.• As the assessee did not have the benefit of section 47(xiiib), the provision of section 47A(4) does not apply.• The capital gains in respect of the transfer of the assets in the hands of M/s. Aravali Polymers Pvt. Ltd. to the appellant firm Aravali Polymers LLP is to be computed under section 45 of the Income Tax Act for which purpose, the issue is restored to the file of the AO.(See 2014-TIOL-528-ITAT-KOL)
Central Excise
CENVAT - Clearances of Cement to 'contractors' of the developers of SEZ under cover of ARE-1 without payment of duty are to be treated as an export - amendment to rule 6(6)(i) made on 31.12.2008 is clarificatory - no demand survives u/r 6(3)(i) of CCR, 2004: CESTAT
THE issue is - Whether the supplies of cement manufactured by the appellant to the contractors of developers of SEZ under the cover of ARE-1 without payment of duty and the tax demanded on the same by the adjudicating authority and upheld in the impugned appellate order is legal and valid.
COMPANY CASES
Offences and prosecution --Offence by company--Director--Liability of directors--Cheque--Dishonour of cheque--Quashing of summons against company--Proceedings against director cannot be continued in absence of company--Summons issued to director also quashed--Negotiable Instruments Act, 1881, ss. 138, 141-- Anil Gupta v. Star India P. Ltd. . . . 251
Oppression and mismanagement --Petition for relief--Family company--Removal of director--Director removed in properly convened extraordinary general meeting--Director having notice of meeting--Failure to challenge removal within time--Court not to interfere with democratic process of company where shareholders take decision in company’s interest--Failure by shareholder to repay debt taken by her firm by mortgaging company’s property--Articles of association providing for first and paramount lien upon all shares whether partly or fully paid-up in company registered in name of each member for his debts--Company at liberty to take action against shares held by petitioner--Appointment of director--Agreement for joint development of property--Petitioner party to decisions--No case of oppression or mismanagement--Petition dismissed--Companies Act, 1956, ss. 397, 398-- Mrs. Savithri Vasanthkumar v. Karthikeya Ancillaries P. Ltd. (No. 2 ) . . . 279
----Petition for relief--Minority shareholder entering into settlement to transfer his shares in lieu of money owed to company--Failure to prove oppression or mismanagement--Petition filed with ulterior motive to avoid clearing dues towards goods supplied by company--Minority shareholders to exit from company--Value of petitioners’ shareholding to remain in escrow account until company’s claim for goods supplied decided by proper forum--Companies Act, 1956, ss. 397, 398, 402, 403-- Satish Aggarwal v. Lexus India Ltd. . . . 260
----Petition for relief--Proper and necessary parties--Joint development agreement for development of company’s property--Apprehension that third parties might claim interest in company’s property--Application for impleading such parties--Interim order passed restraining respondents from alienating or encumbering immovable property of company until further orders--Interests of shareholders and company fully protected--Company itself initiating certain proceedings against proposed parties and transfer of rights in respect of company’s property kept in abeyance--No relief claimed against proposed parties and applicant not establishing that proposed parties necessary and proper parties to present proceedings--Applicant invoking jurisdiction under sections 397 and 398 for his right as member cannot claim any right in property of company--Application dismissed--Companies Act, 1956, ss. 397, 398-- Mrs. Savithri Vasanthkumar v. Karthikeya Ancillaries P. Ltd. (No. 1 ) . . . 272
Register of members --Rectification of register--Maintainability of petition--Petitioner “aggrieved person†within meaning of section 111(4) and entitled to maintain petition--Petition based on failure to comply with mandatory provision of section 108--Failure to produce necessary documents inconsequential--Limitation--Averment that petition filed within year of knowledge of transfer--Not barred by limitation--Petition involving complicated question of facts relating to fraud and fabrication of documents--Petition maintainable--Companies Act, 1956, ss. 108, 111(4)-- Gaurishankar Neelkanth Kalyani v. Mrs. Sulochana Neelkanth Kalyani . . . 300
INCOME TAX REPORTS (ITR)--PRINT AND ONLINE EDITION
Capital gains --Exemption--Purchase of residential property from net consideration--Income-tax Act, 1961, s. 54-- CIT v. Raman Kumar Suri (Bom) . . . 127
----Long-term capital gains--No provision for taxing deemed income--Sale of inherited property by assessee and his brother--Memorandum of understanding based on will and testament of their father as to manner in which consideration to be shared--Assessee’s brother to receive bigger share--Assessing Officer not entitled to deem consideration shared equally--Additional amount not includible in hands of assessee--Income-tax Act, 1961, s. 54-- CIT v. Raman Kumar Suri (Bom) . . . 127
----Property inherited--Cost inflation index--To be determined with reference to year in which previous holder first held property-- CIT v. Raman Kumar Suri (Bom) . . . 127
Appeal to Commissioner (Appeals) --Doctrine of merger--Competency of appeal--Rejection of revision petition by Commissioner--Order of Assessing Officer merging in that of Commissioner--Appeal not maintainable to Commissioner (Appeals) from order of Assessing Officer--Income-tax Act, 1961-- Jaskaran Singh v. Union of India (P&H) . . . 158
Association of persons --Essential features--Must be constituted by two or more persons--Constituent members must have come together for a common purpose--Association must move by common action--Co-operation and association amongst constituent members must not be perfunctory or merely in form--Association amongst members must be real and substantial--Income-tax Act, 1961-- CTCI Overseas Corporation Ltd. v. DIT (International Taxation) (Delhi) . . . 33
Business expenditure --Bond registration charges--Revenue expenditure--Allowable--Income-tax Act, 1961, s. 37(1)-- CIT v. Hindustan Organics Chemicals Ltd. (Bom) . . . 1
----Capital or revenue expenditure--Amortisation of expenses--Business of manufacture of alcoholic beverages--Restructuring of business by transfer of manufacturing facility and outsourcing production of alcoholic beverages--Not a case of closure of business--Severance pay--Not expenditure incurred for closing down business--One-fifth of expenditure allowable in current assessment year and in each of four subsequent assessment years--Income-tax Act, 1961, ss. 35DDA, 37(1)-- CIT v. Diageo India P. Ltd. (Bom) . . . 7
----Deduction on actual payment--Contribution to provident fund--Delayed payment of employees’ contribution--Amendment to remove difficulty has retrospective effect--Deductible--Income-tax Act, 1961, s. 43B-- CIT v. Hindustan Organics Chemicals Ltd. (Bom) . . . 1
----Disallowance--Payments in cash exceeding specified limit--Exclusion from disallowance--Section 40A(3) must be read with rule 6DD--Payments in cash at the request of the payee--Transaction genuine--Reasonable explanation for payments in cash--Payments could not be disallowed--Income-tax Act, 1961, s. 40A(3)--Income-tax Rules, 1962, r. 6DD-- Anupam Tele Services v. ITO (Guj) . . . 122
Capital gains --Exemption--Investment of net consideration in purchase of a residential house--Purchase of two flats under two distinct agreements and from different sellers--One common kitchen for both flats--Flats converted into one unit for purpose of residence--Assessee entitled to deduction--Income-tax Act, 1961, s. 54-- CIT v. Devdas Naik (Bom) . . . 12
Cash credit --Identity of investor and genuineness--Tests--Assessee receiving foreign remittances from two non-residents for purchase of property for them and making credit entries in its books of account--Assessing Officer finding foreign remittances not sent by two non-resident Indians but by two foreign companies--Tribunal remanding issue to Assessing Officer to afford opportunity to assessee whether these two companies owned by two non-resident Indians--Assessee neither appealing against remand nor seeking dilution of points on which Tribunal recorded finding after enquiry--Inability to secure confirmation or documentary proof in support of claim--Addition justified--Income-tax Act, 1961, s. 68-- Bon Sales P. Ltd. v. CIT (Delhi) . . . 44
----Share application money--Notice under section 133(6) to eleven investors--Investors not submitting any confirmation and reporting far less income than the amounts invested--Assessee not discharging burden--Addition justified--Income-tax Act, 1961, s. 68-- CIT v. Empire Builtech P. Ltd. (Delhi) . . . 110
Charitable purpose --Depreciation--Computation of income of charitable trust--Computation in a commercial manner--Depreciation allowable--Income-tax Act, 1961, s. 11-- CIT v. Siliguri Regulated Market Committee (Cal) . . . 51
Exemption --Charitable purpose--Educational institution--Object of assessee to promote continuing education, training and research on various facets of management and related areas--Activities within definition “charitable purposeâ€--Eligible for exemption--Income-tax Act, 1961, ss. 2(15), 11-- DIT (Exemption) v. Ahmedabad Management Association (Guj) . . . 85
Fringe benefits tax --Contribution towards approved superannunation fund for employees--Employees in whose case contribution more than one lakh--Reduction of amount of exemption from aggregate and balance considered as taxable--No mistake in calculation of fringe benefit tax--Income-tax Act, 1961, ss. 115WB, 115WC, 263-- CIT v. UTI Bank Ltd. (Guj) . . . 154
Penalty --Concealment of income--Admission of appeal by High Court in respect of addition on which penalty based--Not an indication that issue is debatable one--Penalty should not automatically be deleted without any further reasons or grounds emerging from record--Matter remanded to Tribunal for decision afresh--Income-tax Act, 1961, s. 271(1)(c)-- CIT v. Dharamshi B Shah (Guj) . . . 140
Precedent --Effect of Supreme Court decision in Attar Singh Gurmukh Singh v. ITO [1991] 191 ITR 667 (SC)-- Anupam Tele Services v. ITO (Guj) . . . 122
Reassessment --Limitation--Exclusion from limitation--Effect of section 153--Finding or direction of appellate authority--Assessment of income in another year--Order not barred by limitation--Income-tax Act, 1961, s. 153-- CIT v. Glass Equipment (India) Ltd. (Cal) . . . 59
----Notice--Capital gains--Exemption--Sale of agricultural land and investment in purchase of agricultural land--Claim thoroughly examined in original assessment--Reassessment denying exemption on ground what assessee sold was not an agricultural land--Change of opinion--Income-tax Act, 1961, ss. 147, 148-- Deepakbhai Ramjibhai Patel v. ITO (Guj) . . . 134
----Notice--Change of opinion--Materials in respect of four companies and other documents put to assessee in course of original assessment proceedings--Notice relying on material already available prior to assessment--No valid reasons to believe--Notice not valid--Income-tax Act, 1961, ss. 147, 148-- Ralson India Ltd. v. Deputy CIT (Delhi) . . . 103
----Notice--Order of Assessing Officer for subsequent year treating income as business income instead of as short-term capital gains reversed by appellate authorities--Reassessment for earlier year on basis of note of Assessing Officer--Not on basis of new information but reappreciation or review of facts--Notice not valid--Income-tax Act, 1961, ss. 147, 148-- Mohan Gupta (HUF) v. CIT (Delhi) . . . 115
----Notice after four years--Condition precedent--No allegation in reasons recorded that there was any failure on part of assessee to disclose fully and truly all material facts necessary for assessment--Reassessment not permissible--Income-tax Act, 1961, ss. 147, 148-- CIT v. Ankit C. Maheshwari (Guj) . . . 146
Search and seizure --Block assessment--Block period--Definition--Period up to which “requisition was madeâ€--Not to be extended to date on which materials received pursuant to requisition--Date on which requisition made to be taken into account and not date of execution of warrant of authorisation--Income-tax Act, 1961, s. 158B(a)-- Sanjay Gupta v. CIT (Delhi) . . . 18
----Block assessment--Undisclosed income--Remand for verification whether amounts noted on documents reflected contributions--Not perverse--Finding that additions proposed would be covered by disclosure and ad hoc additions already made--Finding that certain documents were clear and had expressly mentioned receipts of money--No flaw in reasoning--Income-tax Act, 1961, s. 158BC-- CIT v. V. K. Bhatnagar (Delhi) . . . 37
----Order for retention of documents--Retention of seized documents beyond 15 days by officer other than Income-tax Officer having jurisdiction over assessee--Not valid--Income-tax Act, 1961, s. 132-- Mahesh Kumar Goyal v. DIT (Investigation) (Cal) . . . 15
S. 2(15) --Exemption--Charitable purpose--Educational institution--Object of assessee to promote continuing education, training and research on various facets of management and related areas--Activities within definition “charitable purposeâ€--Eligible for exemption-- DIT (Exemption) v. Ahmedabad Management Association (Guj) . . . 85
S. 11 --Charitable purpose--Depreciation--Computation of income of charitable trust--Computation in a commercial manner--Depreciation allowable-- CIT v. Siliguri Regulated Market Committee (Cal) . . . 51
----Exemption--Charitable purpose--Educational institution--Object of assessee to promote continuing education, training and research on various facets of management and related areas--Activities within definition “charitable purposeâ€--Eligible for exemption-- DIT (Exemption) v. Ahmedabad Management Association (Guj) . . . 85
S. 35DDA --Business expenditure--Capital or revenue expenditure--Amortisation of expenses--Business of manufacture of alcoholic beverages--Restructuring of business by transfer of manufacturing facility and outsourcing production of alcoholic beverages--Not a case of closure of business--Severance pay--Not expenditure incurred for closing down business--One-fifth of expenditure allowable in current assessment year and in each of four subsequent assessment years-- CIT v. Diageo India P. Ltd. (Bom) . . . 7
S. 37(1) --Business expenditure--Bond registration charges--Revenue expenditure--Allowable-- CIT v. Hindustan Organics Chemicals Ltd. (Bom) . . . 1
----Business expenditure--Capital or revenue expenditure--Amortisation of expenses--Business of manufacture of alcoholic beverages--Restructuring of business by transfer of manufacturing facility and outsourcing production of alcoholic beverages--Not a case of closure of business--Severance pay--Not expenditure incurred for closing down business--One-fifth of expenditure allowable in current assessment year and in each of four subsequent assessment years-- CIT v. Diageo India P. Ltd. (Bom) . . . 7
S. 40A(3) --Business expenditure--Disallowance--Payments in cash exceeding specified limit--Exclusion from disallowance--Section 40A(3) must be read with rule 6DD--Payments in cash at the request of the payee--Transaction genuine--Reasonable explanation for payments in cash--Payments could not be disallowed-- Anupam Tele Services v. ITO (Guj) . . . 122
S. 43B --Business expenditure--Deduction on actual payment--Contribution to provident fund--Delayed payment of employees’ contribution--Amendment to remove difficulty has retrospective effect--Deductible-- CIT v. Hindustan Organics Chemicals Ltd. (Bom) . . . 1
S. 54 --Capital gains--Exemption--Investment of net consideration in purchase of a residential house--Purchase of two flats under two distinct agreements and from different sellers--One common kitchen for both flats--Flats converted into one unit for purpose of residence--Assessee entitled to deduction-- CIT v. Devdas Naik (Bom) . . . 12
S. 68 --Cash credit--Identity of investor and genuineness--Tests--Assessee receiving foreign remittances from two non-residents for purchase of property for them and making credit entries in its books of account--Assessing Officer finding foreign remittances not sent by two non-resident Indians but by two foreign companies--Tribunal remanding issue to Assessing Officer to afford opportunity to assessee whether these two companies owned by two non-resident Indians--Assessee neither appealing against remand nor seeking dilution of points on which Tribunal recorded finding after enquiry--Inability to secure confirmation or documentary proof in support of claim--Addition justified-- Bon Sales P. Ltd. v. CIT (Delhi) . . . 44
----Cash credit--Share application money--Notice under section 133(6) to eleven investors--Investors not submitting any confirmation and reporting far less income than the amounts invested--Assessee not discharging burden--Addition justified-- CIT v. Empire Builtech P. Ltd. (Delhi) . . . 110
S. 115WB --Fringe benefits tax--Contribution towards approved superannunation fund for employees--Employees in whose case contribution more than one lakh--Reduction of amount of exemption from aggregate and balance considered as taxable--No mistake in calculation of fringe benefit tax-- CIT v. UTI Bank Ltd. (Guj) . . . 154
S. 115WC --Fringe benefits tax--Contribution towards approved superannunation fund for employees--Employees in whose case contribution more than one lakh--Reduction of amount of exemption from aggregate and balance considered as taxable--No mistake in calculation of fringe benefit tax-- CIT v. UTI Bank Ltd. (Guj) . . . 154
S. 132 --Search and seizure--Order for retention of documents--Retention of seized documents beyond 15 days by officer other than Income-tax Officer having jurisdiction over assessee--Not valid-- Mahesh Kumar Goyal v. DIT (Investigation) (Cal) . . . 15
S. 147 --Reassessment--Notice--Capital gains--Exemption--Sale of agricultural land and investment in purchase of agricultural land--Claim thoroughly examined in original assessment--Reassessment denying exemption on ground what assessee sold was not an agricultural land--Change of opinion-- Deepakbhai Ramjibhai Patel v. ITO (Guj) . . . 134
----Reassessment--Notice--Change of opinion--Materials in respect of four companies and other documents put to assessee in course of original assessment proceedings--Notice relying on material already available prior to assessment--No valid reasons to believe--Notice not valid-- Ralson India Ltd. v. Deputy CIT (Delhi) . . . 103
----Reassessment--Notice--Order of Assessing Officer for subsequent year treating income as business income instead of as short-term capital gains reversed by appellate authorities--Reassessment for earlier year on basis of note of Assessing Officer--Not on basis of new information but reappreciation or review of facts--Notice not valid-- Mohan Gupta (HUF) v. CIT (Delhi) . . . 115
----Reassessment--Notice after four years--Condition precedent--No allegation in reasons recorded that there was any failure on part of assessee to disclose fully and truly all material facts necessary for assessment--Reassessment not permissible-- CIT v. Ankit C. Maheshwari (Guj) . . . 146
S. 148 --Reassessment--Notice--Capital gains--Exemption--Sale of agricultural land and investment in purchase of agricultural land--Claim thoroughly examined in original assessment--Reassessment denying exemption on ground what assessee sold was not an agricultural land--Change of opinion-- Deepakbhai Ramjibhai Patel v. ITO (Guj) . . . 134
----Reassessment--Notice--Change of opinion--Materials in respect of four companies and other documents put to assessee in course of original assessment proceedings--Notice relying on material already available prior to assessment--No valid reasons to believe--Notice not valid-- Ralson India Ltd. v. Deputy CIT (Delhi) . . . 103
----Reassessment--Notice--Order of Assessing Officer for subsequent year treating income as business income instead of as short-term capital gains reversed by appellate authorities--Reassessment for earlier year on basis of note of Assessing Officer--Not on basis of new information but reappreciation or review of facts--Notice not valid-- Mohan Gupta (HUF) v. CIT (Delhi) . . . 115
----Reassessment--Notice after four years--Condition precedent--No allegation in reasons recorded that there was any failure on part of assessee to disclose fully and truly all material facts necessary for assessment--Reassessment not permissible-- CIT v. Ankit C. Maheshwari (Guj) . . . 146
S. 153 --Reassessment--Limitation--Exclusion from limitation--Effect of section 153--Finding or direction of appellate authority--Assessment of income in another year--Order not barred by limitation-- CIT v. Glass Equipment (India) Ltd. (Cal) . . . 59
S. 158B(a) --Search and seizure--Block assessment--Block period--Definition--Period up to which “requisition was madeâ€--Not to be extended to date on which materials received pursuant to requisition--Date on which requisition made to be taken into account and not date of execution of warrant of authorisation-- Sanjay Gupta v. CIT (Delhi) . . . 18
S. 158BC --Search and seizure--Block assessment--Undisclosed income--Remand for verification whether amounts noted on documents reflected contributions--Not perverse--Finding that additions proposed would be covered by disclosure and ad hoc additions already made--Finding that certain documents were clear and had expressly mentioned receipts of money--No flaw in reasoning-- CIT v. V. K. Bhatnagar (Delhi) . . . 37
S. 263 --Fringe benefits tax--Contribution towards approved superannunation fund for employees--Employees in whose case contribution more than one lakh--Reduction of amount of exemption from aggregate and balance considered as taxable--No mistake in calculation of fringe benefit tax-- CIT v. UTI Bank Ltd. (Guj) . . . 154
S. 271(1)(c) --Penalty--Concealment of income--Admission of appeal by High Court in respect of addition on which penalty based--Not an indication that issue is debatable one--Penalty should not automatically be deleted without any further reasons or grounds emerging from record--Matter remanded to Tribunal for decision afresh-- CIT v. Dharamshi B Shah (Guj) . . . 140
R. 6DD --Business expenditure--Disallowance--Payments in cash exceeding specified limit--Exclusion from disallowance--Section 40A(3) must be read with rule 6DD--Payments in cash at the request of the payee--Transaction genuine--Reasonable explanation for payments in cash--Payments could not be disallowed-- Anupam Tele Services v. ITO (Guj) . . . 122
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