PFA
Shri Ganpatraj A Sanghavi V/s ACIT (ITAT Mumbai) ITA No. 2826/Mum/2013 , Date of Pronouncement : 5.11.2014
Ground No.1 is against the addition of Rs.1 ,74,01 ,436/- on account of bogus purchases. Brief facts in this regard are that during the assessment proceedings, inquiries were made u/s 133(6) from various parties from where the assessee has shown purchase of metals. The notice issued to the five parties ie. M/s Montex Industries, M/s Roshan Steel Impex, M/s Mokesh Metal and Tubes, M/s Viraj Steel and Alloys and M/s Shivam Metals Industries returned back by the postal authorities with a remark "not known". Accordingly, the AO issued show cause notice to the assessee as to why the purchases from these parties should not be treated as non genuine and the same should not be added back. In response to the said notice, the assessee furnished ledger copy of purchases, signed by the respective parties and copies of sample purchase bills along with a few delivery challans and claimed that the purchases are genuine. However, the AO further inquired this matter through on the spot field inquires by the Inspector, who submitted that none of the parties exists at the given address and the inquiries with the nearby shops revealed that nobody is aware about these parties. The report of the Inspector forms part of the assessment order. On the basis of detailed enquiries, the AO came to the conclusion that the assessee has managed to obtain the signatures of these parties, but actually these parties does not exists at the given address. The AO has further observed that
(i) the receiver's signature are not affixed on the delivery challans of the purchase from these parties.
(ii) the mode of transport for delivery of these goods is not mentioned on the purchase bills of these parties whereas the purchases invoice of other parties contains the lorry number etc.
(iii) Major portion of purchases are still shown outstanding in the list of sundry creditors.
On the basis of all these facts, the AO has held that the assessee has merely obtained accommodation entries for these purchases. If at all such purchases have been made from some other party, to make corresponding sales, the same would obviously be in cash, which would attract the provisions of section 40(A)(3) of the IT Act Accordingly, the AO has disallowed Rs.1 ,74,01 ,436/- on account of such bogus purchases."
In the appellate proceedings, the assessee submitted additional evidences under Rule 46A of the Income Tax Rules, 1962 in the form of TIN allotment letter, Sales Tax Acknowledgement of E-return, challans, certificates under VAT etc in respect of purchases in question. Hence the ld. CIT(A) called for a remand report from the AO. In the remand report, the AO submitted that, out of five parties referred above, three parties, viz., (a) M/s Roshan Steel Impex (b) M/s Viraj Steel and Alloys and C ) M/s Shivam Metals Industries appear in the list of hawala operators prepared by the Sales Tax Department. The AO further submitted that he has obtained bank statements of all the five parties and the perusal of the same shows that they have withdrawn the amounts in cash as soon as the cheques issued by the assessee were realised. The AO also placed reliance on the decision of the Delhi Bench of the Tribunal in the case of DCIT V/s Phoolwati Devi (2009) 314 ITR AT I (Delhi) and also the decision of Hon'ble Supreme Court in the case of Suman Dayal V/s CIT (1995) 214 ITR 801 (SC). Accordingly, the AO stood by the assessment order. The AO further observed that if at all the purchases were considered to have been made from any other party, the same would have been sourced out of undisclosed income of the assessee, in which case the provisions of sec. 69C of the Act would be attracted. Even though the assessee furnished a detailed reply in response to the remand report and also placed reliance on various case law, yet the ld. CIT(A) concurred with the view taken by the AO. The ld. CIT(A) also concurred with the view of AO that the assessee would have made purchases from the grey market and such purchases would have made in cash resulting in violation of the provisions of section 40(A)(3) of the Act. He also agreed with the view taken by AO that assessee has not explained the sources for making such purchases and hence the aggregate amount of purchases is liable to be assessed as unexplained expenditure under the provisions of section 69C of the Act. Accordingly, the ld. CIT(A) confirmed the addition made by AO on this issue.
A perusal of the orders passed by the tax authorities would show that they have suspected the genuineness of the purchases only for the reason that the above said five parties were not available in the given addresses. It is pertinent to note that the AO himself, during the course of remand proceedings, have obtained the bank statements of the above said five parties. It is in the common knowledge of everybody that the bank account, now a days, could be opened only on submission of proper documents. Further the assessee has furnished the Sales tax documents of the above said five parties and also their income tax details to prove their existence. Thus, it is seen that the assessee has furnished many documents to prove the existence of the parties and they have not been controverted by the assessing officer.
Be that as it may, another important factor the bank account copies collected by the assessing officer shows that the assessee had made the payments to the above said parties by way of account payee cheques. Thus, it is seen that the transactions have been routed through the bank accounts. Further, it is not the case of the assessing officer that the assessee has indulged in accounting of bogus purchases. When the assessee submitted that he could not have effected the sales without making corresponding purchases, the AO has taken the view that the assessee could have effected purchases in the grey market, which conclusion is, in fact, not supported by any material. Under this impression only, the AO has further expressed the view that the assessee would have purchased the materials by paying cash thus violating the provisions of sec. 40A(3) of the Act, which is again based on only surmises. In the absence of any material to support the said view, we are unable to agree with the view taken by the tax authorities that the purchases amount is liable to be disallowed u/s 40A(3) of the Act. On the same impression only, the AO has expressed the view in the remand report that the purchases amount is also liable to assessed u/s 69C of the Act as the source of purchases were not proved. Again the said conclusion is based upon only surmises, which could not be sustained. Thus, it is seen that the assessing officer has accepted the fact that the quantity details of purchases and sales have been reconciled by the assessee. Further, various case law relied upon by the assessee also supports his case. Under these set of facts, we are of the view that the Ld CIT(A) was not justified in confirming the disallowance of purchases. Accordingly, we set aside the order of Ld CIT(A) on this issue and direct the AO to delete the disallowance of purchases.
COMPANY CASES (CC) HIGHLIGHTS
F Investigation u/s. 247(1A) of the 1956 Act applicable only in respect of company which is subject matter of proceedings before CLB : Worship Impex P. Ltd. v. Manoranjana Sinh (Delhi) p. 388
F Official liquidator alone competent to adjudicate upon dues of workmen : Official Liquidator, High Court of Andhra Pradesh v. N. Prbhakar (AP) p. 412
F Where earlier application for impleadment of parties dismissed in limine without notice to parties, principles of res judicata not applicable : Ms. Manoranjana Sinh v. Positiv Television P. Ltd. p. 371
F Suo moto investigation into affairs of company when to be exercised : Ms. Manoranjana Sinh v. Positiv Television P. Ltd. p. 371
F When company in reality a partnership : Uddhao Dattarao Nagre v. Jijamata Sugars P. Ltd. p. 417
F Removal of founder director without proper notice to meeting and on flimsy cause, oppressive : Uddhao Dattarao Nagre v. Jijamata Sugars P. Ltd. p. 417
F Notice sent under certificate of posting not sufficient service unless enough corroborative evidence available : Uddhao Dattarao Nagre v. Jijamata Sugars P. Ltd. p. 417
F Circulars :
RBI Circulars :
RBI/2014-15/413, DNBR. PD. CC. No. 012/03.10.001/2014-15, dated 19th January, 2015-Flexible structuring long-term project loans to infrastructure and Core Industries p. 110
RBI/2014-15/458, DNBR. (PD). CC. No. 019/03.10.01/2014-15, dated 6th February, 2015-Membership of Credit Information Companies (CICs) p. 125, 126
RBI/2014-15/459, DNBR. (PD). CC. No. 018/03.10.001/2014-15, dated 6th February, 2015-Credit Rating of Fixed Deposits of NBFCs-Change in Rating Scale of Brickwork Ratings India Private Limited (Brickwork) p. 123
RBI/2014-15/475, DNBR. (PD). CC. No. 021/03.10.001/2014-15, dated 20th February, 2015-Raising money through private placement of non-covertible debentures (NCDs) by NBFCs p. 126
SEBI Circulars :
CIR/MIRSD/1/2015, dated 4th March, 2015-SARAL account opening form for resident individuals p. 106
F Directions :
Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 : Amendments p. 111
Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 : Amendments p. 117
Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998 : Amendments p. 124, 128
F Orders :
Companies (Removal of Difficulties) Order, 2015 p. 99
F Regulations :
Securities and Exchange Board of India (Employees' Service) (Amendment) Regulations, 2015 p. 103
F Rules :
Companies (Registration Offices and Fees) Amendment Rules, 2015 p. 100
F Notifications :
Securities and Exchange Board of India Act, 1992 : Notification under section 11C(8) : Court designated in Mumbai p. 106
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GOODS AND SERVICE TAX REPORTS (GSTR) HIGHLIGHTS
F Activity of buffing or polishing and packing of valve seats giving rise to finished goods with distinct identity and marketability, amounts to manufacture : Friends Auto Industries (Regd.) v. CESTAT (P&H) p. 362
F Under rule 3 of 2004 Rules availability of credit was related to manufacturer or provider of output services as a whole and not restricted to any particular unit of manufacturer/or service provider : Praj Industries Ltd. v. CCE (Trib.-Mum) p. 308
F Clandestine removal of goods to be established by showing receipt of raw materials and not based on mere statements : Shri Krishna Industries v. CCE and Service Tax (Trib.-Ahd) p. 316
F Where assessee not availing double benefit, refund of duty paid on goods used in manufacture of final export product allowable under rule 5 : Bombay Dyeing and Mfg. Co. Ltd. v. CCE (Trib.-Mum) p. 336
F Where relevant facts within knowledge of Department when first show-cause notice issued, second show-cause notice invoking extended period of limitation on same grounds for different period cannot be issued : Swiss Parenterals P. Ltd. v. CCE and Service Tax (Trib.-Ahd) p. 348
F Matter relating to interpretation of law, no penalty imposable : Swiss Parenterals P. Ltd. v. CCE and Service Tax (Trib.-Ahd) p. 348
F Order not passed in exercise of powers conferred on Commissioner under Act or Rules, not appealable : Swiss Parenterals P. Ltd. v. CCE and Service Tax (Trib.-Ahd) p. 348
F Rules :
Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Amendment Rules, 2015 p. 190
F Notifications :
Central Excise Act, 1944 : Notification under section 3A(3) : Rate of excise duty : Chewing tobacco and branded unmanufactured tobacco : Amendments p. 171
Rate of excise duty : Pan masala packing machines : Amendments p. 175
Notification under section 4A(1) and (2) : Rate of duty on specified goods : Amendments p. 189
Notification under section 5A : Exemption to all goods consumed within factory of production in manufacture of agarbattis : Amendments p. 186
Exemption to high speed diesel oil from additional duty p. 180
Exemption to motor spirit (petrol) from additional duty p. 179
Notification under section 5A(1) : Concessional rate of duty on specified goods : Amendments p. 180
Exemption of specified goods of First Schedule : Amendment p. 178
Exemption to certain goods from additional duty : Amendment p. 179
Exemption to certain goods produced or manufactured in EOU, EHTP or STP : Amendments p. 187
Exemption to goods falling under First Schedule to Central Excise Tariff Act, 1985 p. 186, 187
Exemption to specified goods from higher education cess : Rescission p. 188
Central Excise Rules, 2002 : Notification under rule 3 : Delegation of powers of Central Board of Excise and Customs : Amendments p. 149
Jurisdiction of Service Tax Commissionerates : Amendments p. 146
Customs Act, 1962 : Notification under section 14 : Exchange rate of foreign currency for import/export of goods with effect from February 20, 2015 p. 155
Exchange rate of foreign currency for import/export of goods with effect fromMarch 6, 2015 p. 156
Notification under section 14(2) : Rates of basic duty on specified goods : Amendments p. 153
Notification under section 25(1) : Effective rates of basic duties for specified goods : Amendments p. 161
Exemption of additional duty on certain goods : Amendments p. 167
Exemption to education cess collected as part of CVD : Rescission p. 160
Exemption to high speed diesel oil from additional duty p. 159
Exemption to motor spirit (petrol) from additional duty p. 159
Exemption to specified goods exported out of India : Amendments p. 160
Notification under section 28E(c)(iii) : Resident firm as class of persons for the purposes of section 28E(c)(iii) p. 170
Customs Tariff Act, 1975 : Notification under section 9A(1) and (5) : Anti-dumping duty on imports of tyre curing presses, except six day light curing press for curing bi-cycle tyres from China : Amendments p. 158
Finance (No. 2) Act, 1998 : Notification under section 103 : Exemption to motor spirit (petrol) from additional duty p. 159
Notification under section 111 : Exemption to motor spirit (petrol) from additional duty p. 179
Finance Act, 1999 : Notification under section 116 : Exemption to high speed diesel oil from additional duty p. 159
Notification under section 133 : Exemption to high speed diesel oil from additional duty p. 180
Finance (No. 2) Act, 2004 : Notification under sections 91 and 93 : Exemption to goods falling under First Schedule to Central Excise Tariff Act, 1985 p. 186
Exemption to specified goods from higher education cess : Rescission p. 188
Notification under sections 91 and 94 : Exemption to education cess collected as part of CVD : Rescission p. 160
Finance Act, 2005 : Notification under section 85(3) : Exemption to certain goods from additional duty : Amendment p. 179
Finance Act, 2007 : Notification under sections 136 and 138 : Exemption to goods falling under First Schedule to Central Excise Tariff Act, 1985 p. 187
Exemption to specified goods from higher education cess : Rescission p. 188
Notification under sections 136 and 139 : Exemption to education cess collected as part of CVD : Rescission p. 160
Service Tax Rules, 1994 : Notification under rule 3 : Jurisdiction of Service Tax Commissionerates : Amendments p. 146
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INCOME TAX REPORTS (ITR)--PRINT AND ONLINE EDITION
Capital gains --Long-term capital gains--Short-term capital gains--When booking rights in apartment accrued to assessee--On date of execution of agreement to sell--Not on date of application for allotment or confirmation of allotment--Transfer of booking rights within thirty six months of signing buyer’s agreement--Capital asset assessable as short-term capital gains--Income-tax Act, 1961, s. 2(14), (42A), (47)-- Gulshan Malik v. CIT (Delhi) . . . 275
Exemption --New industrial undertaking for manufacture of articles for export--Condition precedent for claiming exemption under section 10A--Assessee carrying on business establishing new industrial undertaking to manufacture articles for export--Entitled to exemption under section 10A--Fact that separate accounts were not maintained for new undertaking--Not relevant--Income-tax Act, 1961, s. 10A-- CIT v. Wipro GE Medical System Ltd. (Karn). . .288
Reassessment --Revision--Notice for reassessment--Validity--Dropping of revision proceedings--Not a bar for issue of notice of reassessment--Income-tax Act, 1961, ss. 147, 148, 264-- CIT v. Wipro GE Medical System Ltd. (Karn). . .288
Representative assessee --Trust--Trustee--Assessment--Shares allotted to beneficiaries specific/determinative shares--Accumulation of fifty per cent. of income and their respective shares as a special fund in hands of trustees for nineteen years--Trust not discretionary trust--Trust is a specific trust and not to be subjected to tax at maximum marginal rate under section 164--Income-tax Act, 1961, ss. 161, 164, 263-- K. V. Patel Family Trust v. CIT (Guj). . .283
Accounting --Rejection of books of account--Income from undisclosed sources--Additions on unaccounted purchases, unrecorded sales and embroidery charges--Assessee purchasing raw and semi-finished products and thereafter sending them for embroidery and other work before finished products made available to it for sale--Tribunal deleting additions confirming view of Commissioner (Appeals) after elaborate discussion based on its own appreciation--No fresh ground made out to show why Tribunal’s reasoning unsustainable in law--Deletion of addition justified--Income-tax Act, 1961, s. 145(2)-- CIT v. Zohra Emporium (Delhi) . . . 381
Assessment --Best judgment assessment--Assessing Officer bringing cash deposits to tax as income from undisclosed sources--Commissioner (Appeals) quantifying net profit rate at five per cent.--Tribunal holding in favour of assessee but observing that its order would not be quoted as precedent--Tribunal not justified in holding addition unwarranted--Income-tax Act, 1961, s. 144-- CIT v. Chander Prakash Pabreja (Delhi) . . . 472
----In whose hands taxed--Assessee a joint venture--Project work done by one of assessee’s constituents--Receipts for project work reflected in books of account and in return of constituent--Return accepted and assessment completed--Income cannot be taxed in hands of assessee--Income-tax Act, 1961, s. 3-- CIT v. SMSL-UANRCL (JV) (Bom) . . . 429
----Limitation--Assessment order completed within time prescribed by Act--Department not dispatching assessment order to assessee--No indication that Assessing Officer revised order after completion--Assessment order served on assessee’s representative when he visited Department--Assessment order not barred by limitation--Income-tax Act, 1961, ss. 143(3), 153-- CIT v. Binani Industries Ltd. (Cal) . . . 414
Business expenditure --Capital or revenue expenditure--Collaboration agreement with foreign company--Amounts paid for technical assistance, model fee and technical guidance fee--Revenue expenditure--Income-tax Act, 1961, s. 37-- CIT v. Hero Honda Motors Ltd. (Delhi) . . . 481
Capital gains --Exemption--Transfer--Capital asset--Definitions--Sale of residential property--Expenses incurred to acquire another property--Amount spent towards cost of improvement--Provisional booking of property--Amounts to acquisition of a new capital asset--Entitled to exemption--Income-tax Act, 1961, s. 54-- CIT v. Ram Gopal (Delhi) . . . 498
Capital or revenue expenditure --Pre-capitilisation costs--Same or separate business--Assessee manufacturing nylon tyre cord fabrics, packaging film, fluorochemicals, chloromethane and refrigerant gases--Assessee expanding its business into polyester films, pharma chemical business and industrial fabrics--Interlacing and intermingling of funds between new and existing venture--Revenue expenditure--Income-tax Act, 1961-- CIT v. SRF Ltd. (Delhi) . . . 425
Company --Dividend--Deemed dividend--Loan to shareholder--Condition precedent for application of section 2(22)(e)--Loan must be to shareholder--Loan by company to shareholder company and shareholder advancing loan to its shareholder--Amount not assessable under section 2(22)(e)--Income-tax Act, 1961, s. 2(22)(e)-- CIT v. Jignesh P. Shah (Bom) . . . 392
Deduction of tax at source --Operator of tourist taxis--Hiring of cabs from owners to carry on business--Hire charges paid to owners--Tax deductible at source--Whether tax deduction at source payment made within time--Matter remanded--Income-tax Act, 1961, s. 194C-- CIT v. Janani Tours and Resorts (P.) Ltd. (Karn) . . . 437
Exemption --New industrial undertaking--Computer software--Assessee carrying on business both in unit within software technology park and another unit--Assessee maintaining separate accounts for two units--Software technology park unit not formed splitting up or reconstruction or transfer of used assets of an existing unit--Assessee entitled to exemption--Income-tax Act, 1961, s. 10A-- CIT v. Quest Informatics Pvt. Ltd. (Karn) . . . 526
Income from undisclosed sources --Income-tax survey--Retraction of statement--No other evidence of suppression of income--Addition of income not justified--Income-tax Act, 1961, s. 133A-- CIT v. M. P. Scrap Traders (Guj) . . . 507
----No evidence to show loan repaid by further availing of loan from various parties--No material to show resolution passed to avail of such loan to discharge liability--Income treated as income from undisclosed sources--Justified--Income-tax Act, 1961, s. 68-- Young Men’s Christian Association v. Joint CIT (OSD) (Mad) . . . 398
Kar Vivad Samadhan Scheme --Arrears of tax--Scope of expression--Additional tax imposed is not a tax but a penalty--Revenue prohibited from adding the element of additional tax for purposes of Scheme--Kar Vivad Samadhan Scheme, 1998--Finance (No. 2) Act, 1998--Income-tax Act, 1961, s. 143(1)(a)-- Mrs. Namrita Choudhary (LR) v. CIT (MP) . . . 418
Non-resident --Taxability in India--Royalty--Definition--Lump sum payment for grant of non-exclusive right to Indian company to use know-how--Lump sum payment--Mere right to use or permission to use intellectual property rights/know-how--No transfer of full ownership--Not a case of outright sale--Payment taxable in india as royalty--Double taxation Avoidance Agreement between India and Germany, art. VIIIA --Income-tax Act, 1961, s. 9(1)(vii)-- HCL Ltd. v. CIT (Delhi) . . . 441
----Taxability in India--Royalty--Income from supply of software embedded in hardware equipment or otherwise to customers in India--Does not amount to royalty--Income-tax Act, 1961, s. 9(1)(vi)-- CIT v. Alcatel Lucent Canada (Delhi) . . . 476
Reassessment --Notice after four years--Condition precedent--Satisfaction of Chief Commissioner or Commissioner--No such permission was obtained before issuing notice--Reasons stating that justification for reassessment was to be found the view of Assessing Officer--Change of opinion--Reassessment notice not valid--Income-tax Act, 1961, ss. 147, 148, 151-- Asiatic Oxygen Ltd. v. Deputy CIT (Cal) . . . 421
Refund --Fringe benefit tax--Assessee paying tax in advance--Registration of assessee with retrospective effect upon registration under section 12AA--Effect--Assessee not liable to pay fringe benefit tax or to file such return at that time--Amount paid under a mistake by assessee not under any provision of Act--Assessee entitled for refund with interest--Revenue should not insist on any unnecessary formalities--Income-tax Act, 1961, s. 115WJ-- Kolkata Port Trust v. Deputy DIT (Exemption) (Cal) . . . 403
Revision --Commissioner--Power exercisable where order passed by Assessing Officer is patently illegal--Where two views possible and Assessing Officer chooses one--No power to revise--Whether a particular unit can be used independently or in tandem with similar units--Question of fact--Income-tax Act, 1961, s. 263-- CIT v. Srinivasa Hatcheries (P.) Ltd. (T & AP) . . . 378
Search and seizure --Assessment of third person--Assessment on the basis of documents seized--No specific finding regarding documents--Matter remanded--Income-tax Act, 1961-- CIT v. Mohan Meakins Ltd. (Delhi) . . . 502
----Block assessment--Amalgamation--Assessee-company dissolved on amalgamation--Block assessment framed thereafter in assessee’s name--Not valid--Assessment framed in name of non-existing company--Not a procedural irregularity to be cured--Income-tax Act, 1961, s. 292B-- CIT v. Micron Steels P. Ltd. (Delhi) . . . 386
----Block assessment--Assessment of third person--Undisclosed income discovered during search--Notice under section 158BD valid--Income-tax Act, 1961, ss. 158BC, 158BD-- Goyal Industries Ltd. v. Asst. CIT (Guj) . . . 514
Transfer of case --Notice for transfer of assessee’s case from Bengaluru to Hyderabad--Ten plots purchased at Hyderabad, two in the name of managing director of assessee and eight in the name of his wife--Consideration for all plots paid to purchaser from assessee’s accounts and from account of firm and individual account of managing director and his wife--Centralisation of inquiry necessary--Transfer valid--Income-tax Act, 1961, s. 127-- CIT v. Span Design and Development (P.) Ltd. (Karn) . . . 432
Voluntary disclosure of income --Search and seizure--Block assessment--Undisclosed income--Amounts covered by search proceedings included in declaration under Scheme--No immunity--Amounts subject matter of search liable to be dealt with Chaper XIV-B--Finance Act, 1997, s. 64(1), (2)--Income-tax Act, 1961, Chap. XIV-B-- CIT v. Shankarlal (T & AP) . . . 405
Art. VIIIA --Non-resident--Taxability in India--Royalty--Definition--Lump sum payment for grant of non-exclusive right to Indian company to use know-how--Lump sum payment--Mere right to use or permission to use intellectual property rights/know-how--No transfer of full ownership--Not a case of outright sale--Payment taxable in india as royalty-- HCL Ltd. v. CIT (Delhi) . . . 441
S. 64(1), (2) --Voluntary disclosure of income--Search and seizure--Block assessment--Undisclosed income--Amounts covered by search proceedings included in declaration under Scheme--No immunity--Amounts subject matter of search liable to be dealt with Chaper XIV-B-- CIT v. Shankarlal (T & AP) . . . 405
S. 2(22)(e) --Company--Dividend--Deemed dividend--Loan to shareholder--Condition precedent for application of section 2(22)(e)--Loan must be to shareholder--Loan by company to shareholder company and shareholder advancing loan to its shareholder--Amount not assessable under section 2(22)(e)-- CIT v. Jignesh P. Shah (Bom) . . . 392
S. 3 --Assessment--In whose hands taxed--Assessee a joint venture--Project work done by one of assessee’s constituents--Receipts for project work reflected in books of account and in return of constituent--Return accepted and assessment completed--Income cannot be taxed in hands of assessee-- CIT v. SMSL-UANRCL (JV) (Bom) . . . 429
S. 9(1)(vi) --Non-resident--Taxability in India--Royalty--Income from supply of software embedded in hardware equipment or otherwise to customers in India--Does not amount to royalty-- CIT v. Alcatel Lucent Canada (Delhi) . . . 476
S. 9(1)(vii) --Non-resident--Taxability in India--Royalty--Definition--Lump sum payment for grant of non-exclusive right to Indian company to use know-how--Lump sum payment--Mere right to use or permission to use intellectual property rights/know-how--No transfer of full ownership--Not a case of outright sale--Payment taxable in india as royalty-- HCL Ltd. v. CIT (Delhi) . . . 441
S. 10A --Exemption--New industrial undertaking--Computer software--Assessee carrying on business both in unit within software technology park and another unit--Assessee maintaining separate accounts for two units--Software technology park unit not formed splitting up or reconstruction or transfer of used assets of an existing unit--Assessee entitled to exemption-- CIT v. Quest Informatics Pvt. Ltd. (Karn) . . . 526
S. 37 --Business expenditure--Capital or revenue expenditure--Collaboration agreement with foreign company--Amounts paid for technical assistance, model fee and technical guidance fee--Revenue expenditure-- CIT v. Hero Honda Motors Ltd. (Delhi) . . . 481
S. 54 --Capital gains--Exemption--Transfer--Capital asset--Definitions--Sale of residential property--Expenses incurred to acquire another property--Amount spent towards cost of improvement--Provisional booking of property--Amounts to acquisition of a new capital asset--Entitled to exemption-- CIT v. Ram Gopal (Delhi) . . . 498
S. 68 --Income from undisclosed sources--No evidence to show loan repaid by further availing of loan from various parties--No material to show resolution passed to avail of such loan to discharge liability--Income treated as income from undisclosed sources--Justified-- Young Men’s Christian Association v. Joint CIT (OSD) (Mad) . . . 398
S. 115WJ --Refund--Fringe benefit tax--Assessee paying tax in advance--Registration of assessee with retrospective effect upon registration under section 12AA--Effect--Assessee not liable to pay fringe benefit tax or to file such return at that time--Amount paid under a mistake by assessee not under any provision of Act--Assessee entitled for refund with interest--Revenue should not insist on any unnecessary formalities-- Kolkata Port Trust v. Deputy DIT (Exemption) (Cal) . . . 403
S. 127 --Transfer of case--Notice for transfer of assessee’s case from Bengaluru to Hyderabad--Ten plots purchased at Hyderabad, two in the name of managing director of assessee and eight in the name of his wife--Consideration for all plots paid to purchaser from assessee’s accounts and from account of firm and individual account of managing director and his wife--Centralisation of inquiry necessary--Transfer valid-- CIT v. Span Design and Development (P.) Ltd. (Karn) . . . 432
S. 133A --Income from undisclosed sources--Income-tax survey--Retraction of statement--No other evidence of suppression of income--Addition of income not justified-- CIT v. M. P. Scrap Traders (Guj) . . . 507
S. 143(1)(a) --Kar Vivad Samadhan Scheme--Arrears of tax--Scope of expression--Additional tax imposed is not a tax but a penalty--Revenue prohibited from adding the element of additional tax for purposes of Scheme-- Mrs. Namrita Choudhary (LR) v. CIT (MP) . . . 418
S. 143(3) --Assessment--Limitation--Assessment order completed within time prescribed by Act--Department not dispatching assessment order to assessee--No indication that Assessing Officer revised order after completion--Assessment order served on assessee’s representative when he visited Department--Assessment order not barred by limitation-- CIT v. Binani Industries Ltd. (Cal) . . . 414
S. 144 --Assessment--Best judgment assessment--Assessing Officer bringing cash deposits to tax as income from undisclosed sources--Commissioner (Appeals) quantifying net profit rate at five per cent.--Tribunal holding in favour of assessee but observing that its order would not be quoted as precedent--Tribunal not justified in holding addition unwarranted-- CIT v. Chander Prakash Pabreja (Delhi) . . . 472
S. 145(2) --Accounting--Rejection of books of account--Income from undisclosed sources--Additions on unaccounted purchases, unrecorded sales and embroidery charges--Assessee purchasing raw and semi-finished products and thereafter sending them for embroidery and other work before finished products made available to it for sale--Tribunal deleting additions confirming view of Commissioner (Appeals) after elaborate discussion based on its own appreciation--No fresh ground made out to show why Tribunal’s reasoning unsustainable in law--Deletion of addition justified-- CIT v. Zohra Emporium (Delhi) . . . 381
S. 147 --Reassessment--Notice after four years--Condition precedent--Satisfaction of Chief Commissioner or Commissioner--No such permission was obtained before issuing notice--Reasons stating that justification for reassessment was to be found the view of Assessing Officer--Change of opinion--Reassessment notice not valid-- Asiatic Oxygen Ltd. v. Deputy CIT (Cal) . . . 421
S. 148 --Reassessment--Notice after four years--Condition precedent--Satisfaction of Chief Commissioner or Commissioner--No such permission was obtained before issuing notice--Reasons stating that justification for reassessment was to be found the view of Assessing Officer--Change of opinion--Reassessment notice not valid-- Asiatic Oxygen Ltd. v. Deputy CIT (Cal) . . . 421
S. 151 --Reassessment--Notice after four years--Condition precedent--Satisfaction of Chief Commissioner or Commissioner--No such permission was obtained before issuing notice--Reasons stating that justification for reassessment was to be found the view of Assessing Officer--Change of opinion--Reassessment notice not valid-- Asiatic Oxygen Ltd. v. Deputy CIT (Cal) . . . 421
S. 153 --Assessment--Limitation--Assessment order completed within time prescribed by Act--Department not dispatching assessment order to assessee--No indication that Assessing Officer revised order after completion--Assessment order served on assessee’s representative when he visited Department--Assessment order not barred by limitation-- CIT v. Binani Industries Ltd. (Cal) . . . 414
Chap. XIV-B --Voluntary disclosure of income--Search and seizure--Block assessment--Undisclosed income--Amounts covered by search proceedings included in declaration under Scheme--No immunity--Amounts subject matter of search liable to be dealt with Chaper XIV-B-- CIT v. Shankarlal (T & AP) . . . 405
S. 158BC --Search and seizure--Block assessment--Assessment of third person--Undisclosed income discovered during search--Notice under section 158BD valid-- Goyal Industries Ltd. v. Asst. CIT (Guj) . . . 514
S. 158BD --Search and seizure--Block assessment--Assessment of third person--Undisclosed income discovered during search--Notice under section 158BD valid-- Goyal Industries Ltd. v. Asst. CIT (Guj) . . . 514
S. 194C --Deduction of tax at source--Operator of tourist taxis--Hiring of cabs from owners to carry on business--Hire charges paid to owners--Tax deductible at source--Whether tax deduction at source payment made within time--Matter remanded-- CIT v. Janani Tours and Resorts (P.) Ltd. (Karn) . . . 437
S. 263 --Revision--Commissioner--Power exercisable where order passed by Assessing Officer is patently illegal--Where two views possible and Assessing Officer chooses one--No power to revise--Whether a particular unit can be used independently or in tandem with similar units--Question of fact-- CIT v. Srinivasa Hatcheries (P.) Ltd. (T & AP) . . . 378
S. 292B --Search and seizure--Block assessment--Amalgamation--Assessee-company dissolved on amalgamation--Block assessment framed thereafter in assessee’s name--Not valid--Assessment framed in name of non-existing company--Not a procedural irregularity to be cured-- CIT v. Micron Steels P. Ltd. (Delhi) . . . 386
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