Friday, April 18, 2014

Some Ccase Laws

 
ITAT's Guidelines to AOs for making additions under section 68 - IT : (A) No additions in respect of loan repayments can be made under section 68; additions cannot exceed new loans/credits received during year

[2012] 20 taxmann.com 87 (MUM. - ITAT)

IT: Payments made by transport contractor for hiring tankers to use them in transport contract business is not liable to TDS under section 194C

[2012] 20 taxmann.com 86 (KOL. - ITAT)

IT : Where assessee-contractor hired machinery to be used in contract business and payment was made on basis of measurement of work done, assessee was not liable to deduct tax of source under section 194C

[2012] 20 taxmann.com 81 (MUM. - ITAT)

IT : Since trust is an artificial judicial person and has to act through trustees or anybody authorized by trustees, acts of trustees or person so authorized have to be considered as acts on behalf of trust

[2012] 20 taxmann.com 80 (MUM. - ITAT)

IT/ILT : Transfer Pricing - Where rate charged by assessee for supplying food to AE running airlines business on per passenger basis was found to be highest, no adjustment could be made to arm's length price disclosed by assessee in respect of said transaction

[2012] 20 taxmann.com 79 (MUM. - ITAT)

IT/ILT : Transfer Pricing : Where exclusion of wrongly included comparable in transfer pricing study resulted in bringing mark up price shown by assessee within 5 per cent range of arithmetic mean of comparables, impugned adjustment made to arm's length price was to be set aside

[2012] 20 taxmann.com 90 (MUM. - ITAT)(SB)

3 new questions, after TM's orders, referred by AM to president would be unlawful - IT : After reasoned order of Third Member agreeing with JM, AM (minority) order referring 3 new questions to President, ITAT would be an unlawful order

[2012] 20 taxmann.com 78 (INDORE - ITAT)

Cost indexation of assets, acquired on partition of HUF, is computed from year in which HUF acquired same - IT : Where assessee acquires property on partition of HUF, index cost of acquisition is to be computed with reference to year in which HUF has acquired property and not year in which property came to assessee on partition

[2012] 20 taxmann.com 68 (CHENNAI - ITAT)

IT/ILT : No penalty could be levied under section 271G where assessee had substantially filed information required by TPO and finally arm's length price adopted by assessee was accepted by Assessing Officer

[2012] 20 taxmann.com 63 (PUNE - ITAT)

IT : Replacement of ring frames and balancing machines in textile mills is capital expenditure

[2012] 20 taxmann.com 56 (CHENNAI - ITAT)

Section 153C notice invalid if Assessing Officer not sure to whom seized materials belongs to - IT : Notice issued under section 153C is invalid if no satisfaction is recorded as to whom seized materials belonged

[2012] 20 taxmann.com 54 (CHENNAI - ITAT)

Tax actually deducted considered for section 234A while it is tax deductible for sections 234B & 234C - IT : Interest under section 234A is to be computed by excluding amount of tax actually deducted while interest under sections 234B and 234C are to be charged by excluding tax, which was deductible

[2012] 20 taxmann.com 57 (COCH. - ITAT)

IT : An order under section 254(2) does not have existence de hors the order under section 254(1), so that it recall is impermissible under section 254(2)

[2012] 20 taxmann.com 76 (COCH. - ITAT)

TDS under section 194-I in case of mere hiring of vehicle without any work by contractor - IT : Mere hiring of vehicle/plant or machinery/equipment where contractee is to only make available vehicle etc. and not required to do any work would attract TDS under section 194-I and not under section 194C

[2012] 20 taxmann.com 75 (AHD. - ITAT)

Exemption upto Rs. 1 crore available under section 54EC - Jaipur ITAT's holding otherwise not cited - IT : Assessee entitled to Rs. 1 crore deduction under section 54EC if he transfers capital asset after 30th September of a financial year and makes capital gain of Rs.1crore or more and invests Rs. 1 crore in specified bonds within 6 months of transfer-Rs.50 lakhs in financial year of transfer and Rs.50 lakhs in next financial year

[2012] 20 taxmann.com 43 (DELHI - ITAT)

Notice pay recovered from employees serving for a shorter period is eligible for Sec. 10A deduction - IT : Amount of notice pay received by assessee from its employees working in software units was to be treated as income derived from its eligible business of export software and, thus, deduction under section 10A was to allowed on said income

[2012] 20 taxmann.com 42 (CHD. - ITAT)

Method of stock valuation, being arbitrary, has to be rejected even if it is being followed regularly -

IT : Arbitrary valuation of closing stock-in-trade, disregarding recognised practice of valuation either at cost or market price, whichever is lower, deserved to be rejected, even if same was being adopted uniformally year after year

[2012] 20 taxmann.com 44 (AHD. - ITAT)

IT/ILT : Transfer Pricing - Where royalty was paid in a continuous and phased manner and there was no comparable and no finding about ordinary profits, there would not be application of ALP

[2012] 20 taxmann.com 47 (DELHI - ITAT)

IT : As amended provisions of section 80HHC(3) had restricted deduction under section 80HHC, Assessing Officer was justified in initiating reassessment proceedings on said basis.

[2012] 20 taxmann.com 22 (MUM. - ITAT)


IT/ILT : Royalty paid by assessee in order to acquire right to use technical information and trademark for manufacture and sale of fabrics, is to be allowed as business expenditure

[2012] 20 taxmann.com 21 (DELHI - ITAT)


IT : Payment received by assessee, an insurance broking firm of UK, from Indian Insurance Companies for advising them about selection of reinsurer in international market cannot be treated as fees for technical services

[2012] 20 taxmann.com 39 (DELHI - ITAT)


TP : PLIs are ratios that measure relationship between profits and costs or resources - IT/ILT : Profit Level Indicators (PLIs) are ratios that measure relationship between profits and costs or resources

[2012] 20 taxmann.com 4 (BANG. - ITAT)

No penalty under section 272A if return not filed by charitable trust under bona fide belief that it is to be filed after getting approval under section 80G - IT: Where charitable trust was under a bona fide belief that return is to be filed only after securing recognition under section 80G, no penalty under section 272A was to be levied for delay in filing return

[2012] 20 taxmann.com 3 (DELHI - ITAT)

Section 194C and not section 194-I applicable in respect of payment made to transporters for pick and drop facility - IT : Payments made by assessee to transporters providing vehicles and driver to pick and drop employees is liable to TDS under section 194C and not section 194-I

[2012] 20 taxmann.com 2 (CHD. - ITAT)

Reference to TPO is issue-specific and not entity-specific, only referred transaction can be dealt by TPO - IT/ILT : In absence of reference being made by Assessing Officer to TPO, suo motu action taken by TPO in working out arm's length price of a particular international transaction, not referred to him by Assessing Officer, is not warranted under provisions of section 92CA

[2012] 20 taxmann.com 32 (CHENNAI - ITAT)

Commercial establishments/complexes exempt from WT even if not used by owner himself for carrying on his business - WT : Any property in nature of commercial establishments or complexes is exempt from Wealth-tax in terms of item (5) of section 2(ea)(i) of Wealth-tax Act,1957

[2012] 20 taxmann.com 31 (DELHI - ITAT)

ITAT on interpretation of expressions used in DTAA-'shall be taxed', 'may be taxed' and 'may also be taxed' - IT/ILT : In sphere of international taxation, there are two fundamental systems of taxation, one is based on residency of taxpayer and other is based on source of income

SC/HC
[2012] 20 taxmann.com 146 (DELHI)

IT : Participation by assessee in assessment proceedings on receipt of copy of notice can be deemed to be service of notice within ambit of section 148(1)

[2012] 20 taxmann.com 145 (BOM.)

IT : Application for stay of demand should be decided by Commissioner (Appeals) after taking due note of submission which had been made by assessee regarding additions made by Assessing Officer

[2012] 20 taxmann.com 144 (DELHI)

IT: Assessee having followed a reasonable basis of valuation of closing stock, which had been regularly followed and accepted by department in earlier years and in subsequent year and GP rate declared by it being higher than GP rate declared in immediate preceding year, addition made in assessee's hand on account of undervaluation of closing stock was not justified

[2012] 20 taxmann.com 143 (KER.)
IT : Explanation 10 to section 43(1) is prospective in nature applicable to depreciable assets after 1-4-1999

[2012] 20 taxmann.com 142 (KAR.)

IT : Expenditure incurred by assessee-company for maintenance of accommodation provided to its employees on rental basis cannot be treated as fringe benefit and hence fringe benefit tax cannot be levied on same

[2012] 20 taxmann.com 85 (KER.)

IT : Where there were two sale agreements available for sale of assessee firm, one supported by evidences should be adopted and sale consideration mentioned therein is to be accepted

[2012] 20 taxmann.com 84 (KER.)

IT : Where assessee while disclosing income under VDIS 1997 did not comply with condition of scheme and failed to remit tax, Assessing Officer could reopen assessment and taxed same under section 69A

[2012] 20 taxmann.com 83 (MAD.)

IT : Prior to 1-4-1988, in view of exclusion provided in section 47(ii), distribution of assets on dissolution of AOP does not attract capital gain

[2012] 20 taxmann.com 69 (DELHI)

IT : Assessing Officer being satisfied with explanation of assessee in original assessment proceedings that payment made for consultancy services outside India were not chargeable under Act as per clause (vii) of sub-section (1) of section 9, he could not re-open assessment for taxing payment on mere change of opinion

[2012] 20 taxmann.com 67 (KAR.)

IT : Without providing assessee opportunity to cross-examine payee, who made statements during search in his cases, business expenditure could not be disallowed

[2012] 20 taxmann.com 64 (MP)

IT : Amount paid in advance for purchase of machinery, would be treated as an investment deposit for purpose of section 32AB and assessee would be entitled for deduction of said amount

[2012] 20 taxmann.com 55 (MAD.)

Section 12AA does not distinguish between trust with charitable purpose and religious purpose - IT : Section 12AA does not make any difference between trusts created with object of charitable and religious purposes

[2012] 20 taxmann.com 58 (PUNJ. & HAR.)

IT : Where assessee engaged in construction business in foreign countries used cars of foreign make for its business and claimed depreciation on said cars, disallowance of claim for depreciation relying upon second proviso to section 32(1)(ii) was wrong

[2012] 20 taxmann.com 74 (SC)

IT : SC Stays Madras HC's ruling ([2011] 16 taxmann.com 399) that President of ITAT has no power to write ACRs of members

[2012] 20 taxmann.com 46 (AP)

IT : In view of failure of assessee to file application seeking exemption under section 10(23C) within prescribed time period, Commissioner was justified in denying exemption by invoking fourteenth proviso to section 10(23C)(vi)

[2012] 20 taxmann.com 45 (DELHI)

IT : Penalty under section 271(1)(c) could not be levied where due to bona fide doubt as to assessability of income in hands of assessee-AOP under section 167B(2), a return showing nil taxable income was filed.

[2012] 20 taxmann.com 41 (ALL.)

Paucity of liquidity restricts usage of assets but depreciation is still allowed - IT : AO not justified in disallowing depreciation on plant and machinery on ground that mill had remained closed due to lack of liquid funds

[2012] 20 taxmann.com 40 (ALL.)

In case of co-owners of a property, the threshold limit for TDS under section 194-I applies to each co-owner - IT : Where property in question leased out to a bank was owned by various co-owners and each owner was having a definite and ascertainable share in property, threshold limit for purpose of deduction of tax at source under section 194-I would apply to each of co-owners separately

[2012] 20 taxmann.com 48 (KER.)

IT : A self-serving retraction, without anything more cannot dispel statement made under oath under section 132(4)

[2012] 20 taxmann.com 26 (KAR.)

IT/ILT : Consideration paid for transfer of right to use software/computer programme is royalty under section 9

[2012] 20 taxmann.com 19 (DELHI)

IT : Where assessee was shareholder of a company, but it was not beneficial owner of these shares, on advance made by said company to assessee, no deemed dividend would arise

[2012] 20 taxmann.com 10 (GUJ.)

IT : Where assessee during previous year had participated in development of its main and ancillary objects, it could not be said that business of assessee was not set up during previous year

2012-TIOL-235-HC-DEL-IT + Superior story

CIT Vs Superior Crafts (Dated : March 6, 2012)

Income tax - 40A(2), (3), 142(2A) - Whether when the stock of finished goods is taken for different number of days for closing stock as compared to preceding year as per the export of goods, the same cannot be treated as change in the method of valuation of stock - Whether when the assessee joins hands with AEs to place bulk orders for purchase of raw materials at competitive price and transfers the same to them at cost or lesser price, any addition is warranted on such a ground - Whether section 40(A)(2) comes into play when there is no provision for making any addition on account of lower sale consideration as compared to the market value - Whether when the explanation of the assessee is sought for specific disallowance u/s 40A(2) and 40A(3), no disallowance can be made u/s 37 as no opportunity was given to the assessee to explain the same . - Revenue's appeal dismissed: DELHI HIGH COURT

2012-TIOL-173-ITAT-RAJKOT

Vrundavan Ceramics Pvt Ltd Vs DCIT, Rajkot (Dated : September 9, 2011)

Income Tax - Sections 28, 145 - Whether suppression of turnover is sufficient to reject books of accounts, and there is no need to point out specific defect in books - Whether rejection of books and estimation of profit are two different things - Whether before framing an assessment on estimated basis the results of other comparable are to be considered. - Assessee's appeal partly allowed: RAJKOT ITAT

2012-TIOL-172-ITAT-KOL

Kapil Dey Vs ITO, Kolkata (Dated : November 25, 2011)

Income Tax - Sections 44AF, 147, 148 - Whether there is any requirement of maintaining books of accounts when the income is computed / estimated u/s 44AF - Whether any addition u/s 69C is permissible vis-a-vis bank deposits which have direct nexus with the receipts of business. - Assessee's appeal allowed: KOLKATA ITAT

Areva T & D India Ltd Vs DCIT (Dated : March 30, 2012)

Income tax - Sections 32(1)(ii), 143(3) - Business or commercial rights of similar nature - Whether when assessee pays for business and commercial rights like business claims, business records, contracts and skilled employees in a slump sale of a running business, such rights are akin to a licence, eligible for depreciation u/s 32(1)(ii) as intangible assets. - Assessee's appeal allowed: DELHI HIGH COURT

2012-TIOL-233-HC-DEL-IT

Pal Enterprises Vs CIT (Dated : March 26, 2012)

Income Tax - Sections 28(iiid), 80HHC(3), 148 - Whether premium earned on sale of DEPB is to be treated as profit chargeable to tax u/s 28(iiid). - Assessee's appeal allowed: DELHI HIGH COURT

2012-TIOL-232-HC-MUM-IT

M/s De Souza Hotels Pvt Ltd Vs CCIT, Goa (Dated : March 29, 2012)

Income Tax - Writ - Sections 119(2), 234B, 234C - Whether the Petitioner is entitled for waiver of interest under Sections 234B and 234C when paragraph 2(d) of the Order F. No. 400/29/2002-IT(B), issued u/s 119(2)(a) does not apply to sections 234B and 234C. - Writ Petition dismissed : BOMBAY HIGH COURT

2012-TIOL-171-ITAT-KOL

Machinery Agencies (India) Vs DCIT, Kolkata (Dated : February 17, 2012)

Income tax - Sections 143(3), 263 - Whether revisionary powers can be invoked on the ground that the AO did not take the DVO's report into consideration as the same was received after the passing of the assessment order - Whether the sale consideration of a property can be substituted by market price by invoking the powers u/s 263. - Assessee's appeal allowed: KOLKATA ITAT

2012-TIOL-170-ITAT-KOL

M/s MD Muslim Sheikh Vs ITO, Murshidabad (Dated : November 29, 2011)

Income Tax - Sections 69, 145 - Whether method of accounting consistently followed by the assessee can be discarded without proving that the method followed by the assessee results in distorted profits - Whether any addition under section 69 is permissible even where the linkage of payments made to agent and material purchased has been established. - Assessee's appeal partly allowed: KOLKATA ITAT

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2012-TIOL-169-ITAT-MUM + Cybertech story

Cybertech Systems & Software Ltd Vs CIT, Mumbai (Dated : March 2, 2012)

Income tax - Sections 10B, 10BB, 80HHE, 80-O, 234B, 234C - Whether as per Sec 10BB, the meaning of computer programme also includes a 'process' or 'management of electronic data' - Whether human resource service rendered in the course of development of software programme also falls within the meaning of computer programme as per amended Sec 10B and also Sec 10BB - Whether engagement of programmer and imparting training to them in the process of development and customisation of software programme is also eligible for Sec 10B benefits. - Assessee's appeal allowed: MUMBAI ITAT

2012-TIOL-168-ITAT-MUM

ADIT, Mumbai Vs India Itme Society (Dated : December 12, 2011)

Income Tax - Sections 10(23C)(vi), 147, 253(4) - Income Tax Appellate Tribunal Rules - Rule 22 & 27 - Whether delay of five years in filing cross objections can be condoned on the ground that the assessee was not conversant with the technicalities of the proceedings before the ITAT - Whether a legal plea de hors of the filing of cross objections can be raised at any time - Whether assessment order for one year constitutes material for reopening for other years - Whether approval u/s 10(23C)(vi) once granted has to be followed blindly and the AO has no power to examine the activities of the assessee under scrutiny assessment. - Revenue's appeal partly allowed: MUMBAI ITAT

2012-TIOL-167-ITAT-MUM

Sunidhi Consultancy Services Ltd Vs DCIT, Mumbai (Dated : January 11, 2012)

Income Tax - Section 73 - Whether in terms of provisions of explanation to section 73, loss or profit on account of valuation of shares, in the case of Company carrying on trading of shares, is speculative in nature - Whether expenses incurred on higher education of director's son, who was not taken as an employee of the company, can be claimed as business expenditure. - Assessee's appeal dismissed: MUMBAI ITAT

2012-TIOL-166-ITAT-MUM

ACIT, Mumbai Vs M/s Tarak Chemicals Pvt Ltd (Dated : December 30, 2011)

Income Tax - Section 28(v)(a) - Whether amount received upon complete termination of business operations is taxable as `Capital gain' particularly when right to manufacture is also abandoned. - Revenue's appeal dismissed: MUMBAI ITAT

2012-TIOL-165-ITAT-MUM

M/s Trinetram Consultants Pvt Ltd Vs DCIT, Mumbai (Dated : December 16, 2011)

Income Tax - Section 28 - Whether contention that the shares were held as investment gets diluted when there is no evidence to show that the transactions of shares were delivery based. - Assessee's appeal dismissed : MUMBAI ITAT




SERVICE TAX SECTION

2012-TIOL-385-CESTAT-MUM + Union story

Union Bank Of India Vs CCE & ST (LTU), Mumbai (Dated : March 7, 2012)

Payment made by Union Bank of India to Society for Worldwide Inter-bank Financial Telecommunication (SWIFT) for transfer of funds to member Banks is liable to Service tax under `Banking and other Financial Services' on reverse charge basis – no prima facie case in favour. – Pre-deposit ordered ( Para 2): MUMBAI CESTAT

2012-TIOL-384-CESTAT-DEL

M/s G S Sondh Fabricators Vs CCE, Ludhiana (Dated : February 2, 2012)

Service Tax - Commissioning and Installation - Demand - Service provider claims he is not in receipt of show cause notice, is eligible for exemption for small unit and did not get opportunity to argue his case either before the adjudicating authority or the appellate authority. Matter remanded to the adjudicating authority to decide the case afresh. (Para 3) - Matter remanded:DELHI CESTAT

2012-TIOL-383-CESTAT-DEL

Vandana Travels & Tours Vs CCE & ST, Allahabad (Dated : January 25, 2012)

Service Tax - Rent-a-cab Service - Demand - Service provider claims he is not in receipt of show cause notice, is eligible for exemption for small unit and did not get opportunity to argue his case before the adjudicating authority. Partial pre-deposit ordered. Matter remanded to the adjudicating authority to decide the case afresh. (Para 7) - Matter remanded: DELHI CESTAT

CENTRAL EXCISE SECTION

CIRCULAR

excircular964

Clarification regarding classification of structural components of Boiler and admissibility of CENVAT credit on these structural components – reg.

CASE LAWS

2012-TIOL-230-HC-MAD-CX + Visaka story

M/s Visaka Industries Ltd Vs CESTAT, Chennai (Dated : February 14, 2012)

Central Excise – Stay / Pre-deposit – Grant of Stay Pending disposal of case – though discretion is available, same has to be exercised judiciously – Followed the decision of Apex Court in the case of Ravi Gupta Vs. Commissioner of Sales Tax, Delhi - 2009-TIOL-47-SC-CT - Ordered for furnishing of Bank Guarantee for Rs.4.5 Crores (Para 30). - Appeal Partly Allowed: MADRAS HIGH COURT

2012-TIOL-382-CESTAT-DEL

CCE, Jaipur Vs Vansthali Textile Industries Ltd (Dated : November 22, 2011)

Central Excise - 100% EOU - Exemption Notification - Whether furnace oil is 'consumable' - Contention of Revenue is that furnace oil is not a "consumable" as given in the Import Export Policy and that furnace oil is not consumed in the manufacture of terry towels.

HELD - Steam is required for manufacture of terry towels and furnace oil obtained was used for producing steam and steam was consumed in manufacture of terry towels. Hence, furnace oil is to be considered as "consumable" and benefit of exemption notification is allowed. Appeal dismissed. (Para 8): DELHI CESTAT

CUSTOMS SECTION

NOTIFICATION

dgft10not110

Validity of extension for export of 6,50,000 tons of wheat products upto 31.03.2013

CASE LAWS

2012-TIOL-381-CESTAT-BANG

P M Abdul Nazer Vs CC, Cochin (Dated : August 11, 2011)

Customs – Seizure of foreign origin gold biscuits resulting in absolute confiscation and levy of penalty – Gold biscuits found covered with cellophane tapes and kept concealed inside a long cylindrical cloth cover tied around abdomen of the carrier – No valid documents produced to prove licit import of foreign origin gold biscuits resulting in seizure – Carrier deposed under s. 108 of Customs Act, 1962 that appellant provided money for purchase of gold biscuits, which was also admitted by appellant in his statement under s. 108 ibid – Evidence on record indicates that carrier was carrying gold biscuits only at the instance of the appellant for a monetary consideration – Appellant could not adduce evidence of licit nature of goods – No evidence of any valid claim by the carrier or anybody else on the gold biscuits – Absolute confiscation of goods under s. 111(d) ibid upheld – Penalty of Rs. 3.6 lakhs disproportionate vis-à-vis value of goods determined by authorities – In the facts and circumstances of the case, quantum of penalty reduced to Rs. 1 lakh – Sections 108, 111(d), 112, 121 and 125 of Customs Act, 1962 - Appeal disposed of :BANGALORE CESTAT

Wednesday, April 16, 2014

Amount of wife deposited in the assesses account with can not be treated as unex

 

Amount of wife deposited in the assesses account with can not be treated as unexplained

Facts, in brief, as per relevant orders are that on the basis of information received from the office of Addl.DIT (Investigation), Ghaziabad that the assessee deposited cash in his bank account No.785 in Punjab National Bank, BB Nagar, Ghaziabad during the period April, 1998 to March, 2000 while he did not file his returns for the relevant assessment years, a notice u/s 148 of the Income-tax Act, 1961 (hereinafter referred to as the Act) was issued to the assessee on 24th August, 2005 for the AYs 1999-2000 to 2000-2001, after recording reasons in writing. The assessee did not furnish any return even in response to the said notice nor responded to the said notice. Accordingly, a notice dated 27.03.2006 was issued u/s 142(1) of the Act. None responded to \this notice also. Later, the ld. AR on behalf of the assessee appeared before the Assessing Officer [AO in short] on 19th April, 2006 when he was again requested to file the return of income and explain the source of cash deposited in the bank account during the year under consideration. However, on the adjourned date of hearing, none appeared. Subsequently, in response to summons issued u/s 131 of the Act on 19.10.2006, the assessee appeared and his statement was recorded on oath on 30.10.2006,wherein he admitted, inter alia, having purchased house no. SI-23,Shastri Nagar,Ghaziabad in the FY 1999-2000. The assessee also stated that his only source was salary income from the service in Railways and that his household expenditure was Rs. 5,000/- to Rs. 6,000/- pm. In the FYs 1998-99 & 1999-2000. Since the assessee did not explain the source of cash deposited in his bank account in the year under consideration with any cogent evidence despite sufficient opportunity allowed as detailed in the assessment order nor explained sources of investment in house purchased for Rs. 3,00,700/- , the AO added amount of ` 1,36,500/- on account of cash credited in bank and `3,00,000 on account of unexplained investment in house

INCOME TAX APPELLATE TRIBUNAL, DELHI

ITA No.5482/Del/2010 - Assessment year: 2000-01

Sh. Sanjay Srivastava V/s. Income Tax Officer

Date of pronouncement 12-03-2012

O R D E R

A.N.Pahuja:- This appeal filed on 06.12.2010 by the assessee against an order dated 20th July, 2010 of the learned CIT(A)-XXVII, New Delhi, raises the following grounds:-

1. That on the facts and in circumstances of the case, the initiation of proceedings u/s 147 and consequently issue of notice u/s 148 is wrong and illegal as against the provisions of law contained u/s 149(1) of the Act.

2. That Assessing Officer and CIT(A) has failed to appreciate that out of the alleged cash deposits of Rs. rs. 1,36,500/- in his bank account. It includes the deposits also out of his salary income received in cash which was of about Rs. 7,500/- p.m. during the period, which comes to Rs. 90,000/-.

3. That the Assessing Officer and CIT(A) further failed to appreciate that the entire investment Assessee by Shri V.K. Sabharwal,AR Revenue by Ms/ Mamta Kochar , DR in the house was out of his accumulated funds available in his SB A/c, from declared and explained sources of himself and for his wife.

4. That the learned CIT(A) was furthr not justified and had erred in law to upheld the major portion of additions made by the Assessing Officer, without appreciating that the additional evidence failed under rule 46A, has not been adjudicated.

5. That the Assessing Officer and CIT(A) has further not appreciated that the Assessing Officer has charged the tax on the same receipts thrice a time, while finalizing the assessment proceedings, without adjudicating the information and documents filed and available with him.

6. That the interest charged u/s 234B and 234C is further illegal as against the law and to the facts of the case, as such, not tenable.

7. The assessee assails his right to amend, alter or change any grounds of appeal at any time, even during the course of hearing of this instant appeal.

2. Facts, in brief, as per relevant orders are that on the basis of information received from the office of Addl.DIT (Investigation), Ghaziabad that the assessee deposited cash in his bank account No.785 in Punjab National Bank, BB Nagar, Ghaziabad during the period April, 1998 to March, 2000 while he did not file his returns for the relevant assessment years, a notice u/s 148 of the Income-tax Act, 1961 (hereinafter referred to as the Act) was issued to the assessee on 24th August, 2005 for the AYs 1999-2000 to 2000-2001, after recording reasons in writing. The assessee did not furnish any return even in response to the said notice nor responded to the said notice. Accordingly, a notice dated 27.03.2006 was issued u/s 142(1) of the Act. None responded to \this notice also. Later, the ld. AR on behalf of the assessee appeared before the Assessing Officer [AO in short] on 19th April, 2006 when he was again requested to file the return of income and explain the source of cash deposited in the bank account during the year under consideration. However, on the adjourned date of hearing, none appeared. Subsequently, in response to summons issued u/s 131 of the Act on 19.10.2006, the assessee appeared and his statement was recorded on oath on 30.10.2006,wherein he admitted, inter alia, having purchased house no. SI-23,Shastri Nagar,Ghaziabad in the FY 1999-2000. The assessee also stated that his only source was salary income from the service in Railways and that his household expenditure was Rs. 5,000/- to Rs. 6,000/- pm. In the FYs 1998-99 & 1999-2000. Since the assessee did not explain the source of cash deposited in his bank account in the year under consideration with any cogent evidence despite sufficient opportunity allowed as detailed in the assessment order nor explained sources of investment in house purchased for Rs. 3,00,700/- , the AO added amount of ` 1,36,500/- on account of cash credited in bank and `3,00,000 on account of unexplained investment in house.

3. On appeal, the ld. CIT(A) upheld the aforesaid additions in the following terms:-

"10. Two main issues arise out of the additions made in the assessment.

Issue no.1: Addition of Rs. 1,36,500/- on account of cash credits into the bank account.

I have considered the findings of the Assessing Officer as well as submissions made by the Assessing Officer. The Assessing Officer at the time of survey had contacted the DDO of the assessee. The Assessing Officer observed as under:

"As the assessee informed that he has no information in his possession about the total salary received in financial year 1998-99 and 1999-2000 and he had not been issued salary details by his employer despite his request, therefore, a summon u/s 131 was issued to his DDO on 10.11.2006 and he was requested to furnish monthly payment of salary and other payment made to the assessee during the financial year 1998-99 to 1999-2000. The pay office of the assessee furnished salary statement of Shri Sanjay Srivastava on 20.11.2006, financial year 1998-99 and 1999-2000. As per the statement, the gross salary of the assessee for the assessment year 1998-99 was Rs. 79,504/- and after deduction of PF and insurance contributions, net salary paid to the assessee during the financial year 1998-99 was Rs. 75,148/-. Similarly, the gross salary for the financial year 1999-2000 was Rs. 92,996/- and after deduction of Rs. 4,520/- on account of PF and insurance net salary was Rs. 88,476/-."

10.1 This being the case, in his statement (vide question-13) the assessee was asked to explain the source of cash deposits in his bank account No. 785 amounting to Rs. 1,36,500/- for the present Financial Year. The assessee replied that "he has seen the copy of bank statement and he accepts there are cash deposits on various dates during the Financial Year 1998-99 and 1999-2000. He had stated that he might have some small amounts saving deposited in his said account. However, he further admitted that he was not above to substantiate any deposit having been made out of savings of his salary income and he also admitted that he could not explain the sources of deposits of Rs. .1,30,000/-. Similarly, he could not explain the sources of deposits ofRs. .1,36,500/- in the said bank account and could not substantiate the same for the financial year 1999-2000 as well."

10.2 In view of the above facts, the Assessing Officer assessed the sum of Rs. .1,36,500/- as income from unaccounted sources & out of undisclosed income. The onus was on the appellant to prove that such cash deposits made over & above his salary income is properly sourced. The appellant failed to establish this fact either during the course of assessment or during the course of appellate proceedings. I, therefore, find merit in the addition made by the Assessing Officer & accordingly the addition of a sum of Rs. .1,36,500/- is sustained.

Issue -2 : Addition of Rs. 3,00,000/- on account of unaccounted & undisclosed expenditure/investment of purchase of house.

11. The assessee made an investment of Rs. .3 lakhs in the purchase of house which was attributed to be out of loans from father & father-in- law. However, the appellant was unable to substantiate the same by way of evidence except merely filing certain self-serving affidavit to show that the appellant had sources for the investment made in the house.

11.1. The various submissions made by the appellant can be summarized as below:

"on the basis of information received from the office of Additional Director of Income Tax (Investigation), Ghaziabad, that the appellant has made cash deposits amounting to Rs .1,30,000/- only on different dates in his saving bank alc no.785 maintained in Punjab National Bank, B.B. Nagar, Ghaziabad, during the year 1998-1999 (relevant to assessment year 1999-2000) and Rs .1,36,500/- found to be deposited in the same bank account during the financial year 1999-2000 (relevant to assessment year 2000- 2001).

During the course of preliminary enquiries, the ADIT after having found not been satisfied with the information and explanation given, documents produced, referred the matter to the concerned Assessing Officer having territorial jurisdiction of this case, therefore, on the basis of said information, the Assessing Officer issued notice u/s. 148 to the assessee for the Assessment Year 1999-2000 and 2000-2001 respectively. Thereafter, the notices u/s. 142(1) followed, coupled with the summon u/s 131 of the Income Tax Act for 30.10.2006 and for 24.11.2006 respectively, which were complied by the assessee. During the course of his investigation, he explained that the funds deposited to the tune of Rs .1,30,000/- during the year 1998-1999 and Rs 1,36,500/- during the year 1999-2000 (Assessment Year 2000-01) in his saving bank a/c no.785 maintained with PNB, B.B. Nagar Branch, Ghaziabad were either from his past personal accumulated savings, re-deposits from the cash withdrawn earlier from the same bank a/c or from the contributions from his wife, who was having the tuition income at that time and from other family members (father and father in law). The appellant has further explained and elucidated with the evidence that being a Govt. servant, he was not having any other income except the salary income, which was not presumed to be escaped to charge any tax thereupon. The Assessing Officer without suggesting him to file further evidence in support thereto of his statement given and facts explained, he rather mis-interpreted and twisted the facts in order to make further additions in the hands of the appellant. The Assessing Officer has further not appreciated, that out of the said deposits, the appellant has further made investment for the purchase of property after withdrawing the funds from his said account for Rs .3,00,700/-, as such the amount could not be added twice in the hands the appellant to charge tax thereupon, which interalia confirm that the assessment order passed were laconic and ironic in nature, as such suffers from infirmity, therefore, not sustainable in the eyes of law. The orders passed are further frivolous and vexatious having no sanctity under the law, because no notice, if any, has ever been issued by the Assessing Officer u/s. 143(2) of the Act prior to complete the proceedings u/s. 147/144 of the Act. The Assessing Officer while passing the orders, no deductions allowable under the law have further been allowed towards the PF and GPS to the appellant, which proves the infirmity about the orders passed by the Assessing Officer. This apart, the deductions have further not been allowed to the appellant for the HRA drawn and spent for the said years. Therefore, the additions made in the declared income are frivolous and vexatious.

With regard to the deposits of a sum of Rs .1,36,500/- on different dates in his SB Alc No. 785 maintained with PNB, B.B. Nagar Branch, Ghaziabad, during the year, the assessee has prepared a cash flow statement on the basis of debit/credit entries reflecting in his said Bank account on date-wise from the perusal of which, it is clear that the mode of deposits pertains either to the receipt of monthly salary, amount received from his wife Mrs. Sarita Srivastava, who was not maintaining any separate bank etc at that time, or from the redeposit of cash in the same bank alc, which withdrawn earlie., Since the cash flow statement prepared for the period from 01.04.1999 to 31.03.2000 was a fresh evidence, therefore, the same was filed along with the Petition under Rule. 46A of the Income Tax Rules, 1962, with the request to afford an opportunity to the Assessing Officer for its examination and to submit his report immediately, but though a considerable period has been elapsed, and he has been contacted telephonically number of times but the same has not so far been sent, as such, an adverse inference may please be drawn against him and accept the documents filed by the appellant in view of the judgments decided on the identical issue in the case of: CIT Vs. Motor General Finance Ltd. Reported in 254ITR 449 Basically the orders passed by the Assessing Officer are wrong on facts and erroneous on the point of law, because the Assessing Officer was having information, only to the extent, that a sum of Rs 1,36,500/- has been credited by the assessee on different dates in his SB Alc for which he is having not any proper explanation thereof.

Though the assessee was having proper explanation with regard to the deposit of cash of Rs 1,36,500/- during the year in his SB A/c, out of his salary income, amount received from his wife Mrs. Sarita Srivastava, to be deposited in the bank because of not maintaining any separate bank account of her own, out of which the assessee has spent a sum of Rs .3,00,000/- for the purchase of house during the year, but the Assessing Officer has made double additions while finalizing the Assessment proceedings, one for the received of an amount of Rs .1,36,500/- and secondly the amount withdrawn from his said bank account and utilized for the purchase of property during the year of Rs .3,00,000/-, therefore, the order passed could not be sustained at all in the eyes of law. Besides the above, the officer failed to allow deductions of HRA, Contribution to the GP Fund etc. while finalizing the Assessment proceedings, which is also against the law and to the facts of the case. The Petition filed uls Rule 46A was also supported with the Affidavits of the wife of the appellant that she has handed over certain amounts out of her annual income to the appellant for depositing the same in his said SB A/c, as she was not maintaining any separate bank a/c of her own at that time. From the submissions made hereinabove, it is clear that the order passed by the Assessing Officer is against the law and to the natural justice, as such the additions made are frivolous and vexatious and liable to be deleted and may please be deleted accordingly.

The copy of Petition filed under Rule 46A coupled with cash flow statement prepared for the period 01.04.1999 to 2000 with copies affidavits filed by Mrs. Sarita Srivastava wife of the appellant along with the said Petition are again enclosed herewith for your honour's perusal and records."

12. Determination:

I have carefully gone through the submissions made by the appellant as well as the findings of the Assessing Officer. In the absence of evidence to the effect that the investment in the house purchase, a sum of Rs 3,00,000/- was brought to tax by the Assessing Officer. However, the Assessing Officer has not appreciated the fact that a sum of Rs. 1,36,500/- has already been taxed by him as unexplained deposits. It is the contention of the appellant that the investment in the house is partly out of such cash deposited and withdrawn. In the light of the submissions made by the appellant and facts and circumstances of the case, I find merit in the argument of the appellant that a reasonable part of such cash deposits has been invested in the purchase of house. Accordingly, the telescoping of such investment of a sum of Rs. 1 lac can be reasonably be accorded to the assessee having been made for investment in purchase of house. Therefore, the appellant is to be assessed at a sum of Rs. 2 lakhs instead of Rs. 3 lakhs added by the Assessing Officer."

4. The assessee is now in appeal before us against the aforesaid findings of the ld. CIT(A). At the outset, the ld. AR on behalf of the assessee while inviting our attention to an order dated 18th January, 2010 in assessee's own case in I.T.A. no.933/D/2009 for assessment year 1999-2000 contended that since similar issues in the preceding assessment year have been restored to the file of the AO , accordingly, the matter in the year under consideration may also be restored to his file for allowing sufficient opportunity to the assessee to explain his case. The ld. DR did not oppose these submissions of the ld. AR.

5. We have heard both the parties and gone through the facts of the case. We find that a co ordinate Bench while adjudicating a similar issue in the preceding assessment year 1999-2000 concluded in their order dated 18th January, 2010 as under:-

"3.5 We have carefully considered the submissions and perused the records. Rules of natural justice and fair play demand that the assessee should be given an opportunity to rebut the adverse inference drawn against him. In our considered opinion, in the interest of justice, it will be appropriate to remit the issue to the files of the Assessing Officer to consider the same afresh. Accordingly, we remit the issue on merits in this case to the files of Assessing Officer to examine the same afresh. Needless to add that the assessee should be given adequate opportunity of being heard."

6. Since facts and circumstances prevailing in the year under consideration are ,indisputably, similar to the facts and circumstances in the preceding year, following the view taken by a co-ordinate Bench in the preceding year , we consider it fair and appropriate to restore the issues raised in ground nos. 1 to 5 before us to the file of the AO for readjudication in accordance with law after allowing sufficient opportunity to the assessee. With these observations ground nos. 1to 5 in the appeal are disposed of.

7. Ground no.6 relates to levy of interest U/s 234B and 234C of the Act. The ld. AR on behalf of the assessee did not make any submissions on this ground. The levy of interest u/s 234B & 234C of the Act being mandatory [Commissioner Of Income Tax.vs Anjum M. H. Ghaswala And Others,252 ITR 1(SC), affirmed by Hon'ble Apex Court in the case of CIT v. Hindustan Bulk Carriers [2003] 259 ITR 449(SC) and in the case of CIT v. Sant Ram Mangat Ram Jewellers [2003] 264 ITR 564(SC)], this ground is dismissed. However, the AO shall allow consequential relief ,if any, while giving effect to our aforesaid directions. With these directions ,ground no.6 is disposed of.

8. No additional ground having been raised before us in term of residuary ground no. 7 in the appeal , accordingly, this ground is dismissed.

9. No other plea or argument was made before us.

10. In the result, appeal is partly allowed but for statistical purposes.

Order pronounced in open Court
__,_._,___

Tuesday, April 15, 2014

ITR Volume 361 : Part 2 (Issue dated : 24-2-2014)

INCOME TAX REPORTS (ITR)--PRINT AND ONLINE EDITION
ONLINE EDITION
SUBJECT INDEX TO CASES REPORTED
HIGH COURTS

Business --Other sources--Business income or income from other sources--Leasing of building equipped for special purposes--Two agreements of lease, one for building and another for amenities--Not conclusive--Income from lease assessable as business income--Income-tax Act, 1961, ss. 28, 56-- CIT v. Velankani Information Systems P. Ltd. (Karn) . . . 138

Capital gains --Computation--Effect of section 50C--Transfer of property to sister concern in view of financial exigency--Transfer for consideration above that prescribed in guidelines--Capital gains could not be computed taking market value of property--Income-tax Act, 1961, ss. 45, 50C-- CIT v. Velankani Information Systems P. Ltd. (Karn) . . . 138

Industrial undertaking --Special deduction under section 80-IA--Condition precedent--Manufacture of article--Meaning of manufacture--Process of converting semi-finished HDPE bags into laminated HDPE bags--Product after processing different and distinct and semi-finished and laminated bags having different use--Process amounted to manufacture--Assessee entitled to special deduction under section 80-IA--Income-tax Act, 1961, s. 80-IA-- Jhaveri Coaters P. Ltd. v. Assistant CIT (Guj) . . . 129



PRINT EDITION

ITR Volume 361 : Part 2 (Issue dated : 24-2-2014)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Appeal to Appellate Tribunal --Duty of Tribunal--Tribunal to record findings supported by reasons to sustain order--Refund of excise duty not includible in total income--Whether arithmetical mistake can be rectified--Tribunal must consider materials placed on record--Matter remanded--Income-tax Act, 1961, ss. 154, 255(6)-- CIT v. GEC Alsthom India Ltd. (Mad) . . . 304

Appeal to High Court --Substantial question of law--Business expenditure--Amounts paid to sub-contractors--Disallowance on ground of non-production of witnesses--Commissioner (Appeals) relying on remand report and supplementary report and partly confirming disallowance--Tribunal exhaustively noting details furnished by parties deleting entire addition--Order based on facts--No question of law--Income-tax Act, 1961, ss. 37, 260A-- CIT v. B. M. S. Projects P. Ltd. (Guj) . . . 195

Business expenditure --Disallowance--Payments on which tax deductible at source--Payment of transportation charges--No disallowance could be made--Income-tax Act, 1961, s. 40(a)(ia)-- CIT v. B. M. S. Projects P. Ltd. (Guj) . . . 195

----Purchase transaction--Tribunal noticing assessee’s books of account as well as sales tax records of seller and finding purchase genuine transaction--No rejection of books of account by authorities--Deletion of addition on account of purchase transaction justified--Income-tax Act, 1961, s. 37-- CIT v. Sunrise Tooling System P. Ltd. (Delhi) . . . 206

Capital or revenue expenditure --Mobile phones and instant messaging--Software development--Product improvement expenses--Expenses on upgrading, improving or removing problem areas in an existing old product--Software upgradation is required to keep and ensure marketability of product--Revenue expenditure--Income-tax Act, 1961-- CIT v. ACL Wireless Ltd. (Delhi) . . . 210

Cash credits --Private company--Share application money--General principles--Assessee not making public issue or advertisement for issuance of share capital--Cash deposited in bank and then utilised by way of an account payee cheque for purchase of shares at premium of Rs. 100 to Rs. 200 per share by unrelated persons and shares thereafter sold to directors at loss--Assessee unable to produce investors--Clear attempt to camouflage accommodation entries--Failure by assessee to discharge initial onus to establish identity, creditworthiness of share applicants and genuineness of transaction--Addition of cash credits justified--Income-tax Act, 1961, s. 68-- CIT v. MAF Academy P. Ltd. (Delhi) . . . 258

----Unexplained investments--Burden of proof--Share application money--Assessee explaining source of money--Identities of applicants and their creditworthiness established--Burden of proof discharged by assessee--Onus shifted to Department--No evidence to show transactions were not genuine--Sections 68 and 69 not applicable--Income-tax Act, 1961, ss. 68, 69-- CIT v. Kamdhenu Steel and Alloys Ltd. (Delhi) . . . 220

Dividend --Deemed dividend--Share application money retained for some months and shares allotted in following year--Tribunal finding amount received by assessee was share application money--Sum cannot be treated as loan or deposit--Not assessable as deemed dividend--Income-tax Act, 1961, s. 2(22)(e)-- CIT v. Alpex Exports Pvt. Ltd. (Delhi) . . . 297

Income-tax survey --Power to call information--Notice to bank calling for information as regards persons having deposits--Valid--Income-tax Act, 1961, s. 133(6)-- Kulathupuzha Service Co-operative Bank Ltd. v. ITO (Intelligence) (Ker) . . . 200

Industrial undertaking --Special deduction under section 80-IB--Condition precedent--Production of article--Bottling of gas into cylinders amounts to production--Assessee entitled to special deduction under section 80-IB--Income-tax Act, 1961, s. 80-IB-- Puttur Petro Products P. Ltd. v. Assistant CIT (Karn) . . . 290

Refund --Interest on excess refund--Assessment for period prior to date of coming into force of provision for charging interest made after that date--Interest chargeable--Income-tax Act, 1961, s. 234D-- CIT v. Fisher Sanmar Ltd. (Mad) . . . 296

Search and seizure --Block assessment--Validity--Issuance of notice under section 143(2)--Mandatory--No specific information in respect of issuance of notice under section 143(2)--Cancellation of block assessment justified--Income-tax Act, 1961, ss. 143(2), 158BC-- CIT v. Pratapbhai K. Soni (Guj) . . . 201

Settlement of cases --Case--Definition--Change of law--Maintainability of application--Pendency of assessment proceedings--Time to make assessment on return filed by assessee for assessment years 2007-08 to 2009-10 barred by limitation when settlement application filed by assessee--Assessment proceedings not pending before Assessing Officer--Income-tax Act, 1961, s. 245D-- Shriniwas Machine Craft P. Ltd. v. ITSC (Bom) . . . 313


SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Income-tax Act, 1961 :

S. 2(22)(e) --Dividend--Deemed dividend--Share application money retained for some months and shares allotted in following year--Tribunal finding amount received by assessee was share application money--Sum cannot be treated as loan or deposit--Not assessable as deemed dividend-- CIT v. Alpex Exports Pvt. Ltd. (Delhi) . . . 297

S. 37 --Appeal to High Court--Substantial question of law--Business expenditure--Amounts paid to sub-contractors--Disallowance on ground of non-production of witnesses--Commissioner (Appeals) relying on remand report and supplementary report and partly confirming disallowance--Tribunal exhaustively noting details furnished by parties deleting entire addition--Order based on facts--No question of law-- CIT v. B. M. S. Projects P. Ltd. (Guj) . . . 195

----Business expenditure--Purchase transaction--Tribunal noticing assessee’s books of account as well as sales tax records of seller and finding purchase genuine transaction--No rejection of books of account by authorities--Deletion of addition on account of purchase transaction justified-- CIT v. Sunrise Tooling System P. Ltd. (Delhi) . . . 206

S. 40(a)(ia) --Business expenditure--Disallowance--Payments on which tax deductible at source--Payment of transportation charges--No disallowance could be made-- CIT v. B. M. S. Projects P. Ltd. (Guj) . . . 195

S. 68 --Cash credits--Private company--Share application money--General principles--Assessee not making public issue or advertisement for issuance of share capital--Cash deposited in bank and then utilised by way of an account payee cheque for purchase of shares at premium of Rs. 100 to Rs. 200 per share by unrelated persons and shares thereafter sold to directors at loss--Assessee unable to produce investors--Clear attempt to camouflage accommodation entries--Failure by assessee to discharge initial onus to establish identity, creditworthiness of share applicants and genuineness of transaction--Addition of cash credits justified-- CIT v. MAF Academy P. Ltd. (Delhi) . . . 258

----Cash credits--Unexplained investments--Burden of proof--Share application money--Assessee explaining source of money--Identities of applicants and their creditworthiness established--Burden of proof discharged by assessee--Onus shifted to Department--No evidence to show transactions were not genuine--Sections 68 and 69 not applicable-- CIT v. Kamdhenu Steel and Alloys Ltd. (Delhi) . . . 220

S. 69 --Cash credits--Unexplained investments--Burden of proof--Share application money--Assessee explaining source of money--Identities of applicants and their creditworthiness established--Burden of proof discharged by assessee--Onus shifted to Department--No evidence to show transactions were not genuine--Sections 68 and 69 not applicable-- CIT v. Kamdhenu Steel and Alloys Ltd. (Delhi) . . . 220

S. 80-IB --Industrial undertaking--Special deduction under section 80-IB--Condition precedent--Production of article--Bottling of gas into cylinders amounts to production--Assessee entitled to special deduction under section 80-IB-- Puttur Petro Products P. Ltd. v. Assistant CIT (Karn) . . . 290

S. 133(6) --Income-tax survey--Power to call information--Notice to bank calling for information as regards persons having deposits--Valid-- Kulathupuzha Service Co-operative Bank Ltd. v. ITO (Intelligence) (Ker) . . . 200

S. 143(2) --Search and seizure--Block assessment--Validity--Issuance of notice under section 143(2)--Mandatory--No specific information in respect of issuance of notice under section 143(2)--Cancellation of block assessment justified-- CIT v. Pratapbhai K. Soni (Guj) . . . 201

S. 154 --Appeal to Appellate Tribunal--Duty of Tribunal--Tribunal to record findings supported by reasons to sustain order--Refund of excise duty not includible in total income--Whether arithmetical mistake can be rectified--Tribunal must consider materials placed on record--Matter remanded-- CIT v. GEC Alsthom India Ltd. (Mad) . . . 304

S. 158BC --Search and seizure--Block assessment--Validity--Issuance of notice under section 143(2)--Mandatory--No specific information in respect of issuance of notice under section 143(2)--Cancellation of block assessment justified-- CIT v. Pratapbhai K. Soni (Guj) . . . 201

S. 234D --Refund--Interest on excess refund--Assessment for period prior to date of coming into force of provision for charging interest made after that date--Interest chargeable-- CIT v. Fisher Sanmar Ltd. (Mad) . . . 296

S. 245D --Settlement of cases--Case--Definition--Change of law--Maintainability of application--Pendency of assessment proceedings--Time to make assessment on return filed by assessee for assessment years 2007-08 to 2009-10 barred by limitation when settlement application filed by assessee--Assessment proceedings not pending before Assessing Officer-- Shriniwas Machine Craft P. Ltd. v. ITSC (Bom) . . . 313

S. 255(6) --Appeal to Appellate Tribunal--Duty of Tribunal--Tribunal to record findings supported by reasons to sustain order--Refund of excise duty not includible in total income--Whether arithmetical mistake can be rectified--Tribunal must consider materials placed on record--Matter remanded-- CIT v. GEC Alsthom India Ltd. (Mad) . . . 304

S. 260A --Appeal to High Court--Substantial question of law--Business expenditure--Amounts paid to sub-contractors--Disallowance on ground of non-production of witnesses--Commissioner (Appeals) relying on remand report and supplementary report and partly confirming disallowance--Tribunal exhaustively noting details furnished by parties deleting entire addition--Order based on facts--No question of law-- CIT v. B. M. S. Projects P. Ltd. (Guj) . . . 195

Wednesday, September 4, 2013

ITR(TRIB) Volume 26 : Part 2 (Issue dated : 2-9-2013)

ITR’S TRIBUNAL TAX REPORTS (ITR (TRIB)) -- PRINT AND ONLINE EDITION

ONLINE EDITION
SUBJECT INDEX TO CASES REPORTED
Appeal to Commissioner (Appeals) --Recovery of tax--Application for stay of recovery during pendency of appeal--Case on merits--Assessee having already paid substantial portion of total tax liability--Stay of recovery of outstanding demand--Income-tax Act, 1961, s. 40(a)(ia)-- S. S. Warad v. Additional CIT (Bangalore) . . . 290
Business expenditure --Interest on borrowed capital--Proportionate interest paid by assessee worked out based on average cost of funds against interest income to be allowed-- Essar Power Ltd. v. Additional CIT (Mumbai) . . . 264
Business income or income from other sources --Infrastructure undertaking--Special deduction--Eligible profits--Interest on employees loan and advances, interest on margin money and interest income dues towards income-tax refund adjustment from purchaser of power--Not eligible for deduction--But to be assessed as business income for limited purpose of determining head of income--Income-tax Act, 1961, s. 80-IA. -- Essar Power Ltd. v. Additional CIT(Mumbai) . . . 264
Capital or revenue receipt --Supply of power by assessee to State Electricity Board--Under power purchase agreement Board to reimburse income-tax payable by assessee--Provision for tax recoverable--Income-tax calculated and paid by Board part of tariff charged by assessee on sale of electricity and not reimbursement of expenses--Amount is income in assessee’s hands--Income-tax Act, 1961, ss. 2(24), 40(a)(ii), 198-- Essar Power Ltd. v. Additional CIT(Mumbai) . . . 264
Company --Book profits--Computation--Amendment with retrospective effect--Exclusion of provision for income-tax recoverable--Matter remanded for reconsideration in light of amendment--Income-tax Act, 1961, s. 115JB, Expln. --Essar Power Ltd. v. Additional CIT (Mumbai) . . . 264
----Book profits--Computation--Change of law in 2009 with retrospective effect from April 1, 2001--Provision for unascertained liability--Matter remanded for reconsideration in light of amendment--Income-tax Act, 1961, s. 115JB,Expln. -- Essar Power Ltd. v. Additional CIT (Mumbai) . . . 264
PRINT EDITION
Volume 26 : Part 2 (Issue dated : 2-9-2013)
SUBJECT INDEX TO CASES REPORTED
Amalgamation of companies --Loss--Depreciation--Set off of brought forward loss and unabsorbed depreciation of amalgamating company--Certificate of chartered accountant--Not admitted by Dispute Resolution Panel observing that certificate appeared to be back dated--Assessee claiming to have evidence to rebut observation--Direction to Assessing Officer to readjudicate and decide under law--Matter remanded--Income-tax Act, 1961-- Alstom Projects India Ltd. v. Additional CIT (Mumbai) . . . 322
Bad debts --Assessee debiting accounts with aggregate of amounts irrecoverable--No infirmity--Income-tax Act, 1961, s. 36(1)(vii)-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
Business expenditure --Conversion of assessee, a co-operative bank to public limited company--Suits by erstwhile shareholders--Expenditure by way of legal and professional fees to protect title--Allowable-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
----Deduction only on actual payment--Provident fund contribution made before due date of filing return--Allowable--Matter remanded to verify that payments made before due date of filing return--Income-tax Act, 1961, s. 43B--Alstom Projects India Ltd. v. Additional CIT (Mumbai) . . . 322
----Disallowance--Payments in cash exceeding specified limit--Exception where payment made by agent of assessee--Payment of lorry hire charges to lorry drivers--Assessee neither owner of vehicle nor owner of goods carried--Lorry drivers cannot be considered as agents of assessee--Failure to show payments covered by any exception--Disallowance proper--Income-tax Act, 1961, s. 40A(3)--Income-tax Rules, 1962, r. 6DD(k)-- MRS Roadways v. Deputy CIT (Cochin) . . . 317
----Disallowance--Payments in cash exceeding specified limit--Payments made to agents--Never claimed as expenditure--Not liable to tax deduction at source--Payments of reimbursement--Are purely for business expenses--Income-tax Act, 1961, ss. 40A(3), 194C-- Deputy CIT v. Maruti Freight Movers Ltd. (Kolkata) . . . 305
----Stamp duty paid on lease agreement--Added back in computation--Not to be disallowed-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
Capital or revenue expenditure --Corporate membership of club--Meant for benefit of assessee and not for any particular employee--Expenditure wholly and exclusively for purposes of business--Allowable--Income-tax Act, 1961, s. 37-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
----Payment for re-acquiring premises given on rent--For betterment of title to capital asset--Expenses capital in nature-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
----Payments to banks association for participating in shared payment network system--Facility of connectivity of automated teller machine of one bank to another bank--Advantage of enduring nature--Expenditure capital--Assessee entitled to depreciation-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
Charitable purposes --Exemption--Income from property--Assessee paying advance for purchase of land from Government grant--To be treated as application of income--No violation of section 11(5)--Grant on capital account not income or corpus of trust--Interest on fixed deposits from unutilised funds on which Government had overriding title--At par with grant and not to be treated as income--Income-tax Act, 1961, ss. 11(5), 13(1)(d)-- Additional Director of Income-tax (Exemption) v. Natrip Implementation Society (Delhi) . . . 333
----Registration of trust--Factors to be considered--Commissioner and not any other authority to dispose of application for registration--Powers cannot be delegated unless permitted by statute--Communication or order signed by Income-tax Officer cannot be treated as disposal of application--Failure by Commissioner to pass such order within time limit specified in section 12A--Application deemed to be allowed--Income-tax Act, 1961, ss. 12A, 12AA-- Pravat v. CIT(Kolkata) . . . 294
----Registration of trusts--Director (Exemptions) entitled to enquire into activities of trust before granting registration--Disqualification even where small portion of income enures to benefit of person mentioned in section 13(3)--Assessee conducting eye operations with funds received under licence from Canadian organisation to whom it was bound to pay licence fee of $1.00 yearly--Assessee not independent entity--Not entitled to registration--Income-tax Act, 1961, ss. 11, 12AA, 13(3)-- Operation Eyesight Universal v. Director of Income-tax (Exemptions) (Hyderabad) . . . 268
Deduction of tax at source --Commission--Mobile telephone service--Discount given by assessee to distributors on sale of SIM cards and recharge coupons--Constitutes commission--Assessee liable to deduct tax at source on such commission--Income-tax Act, 1961, s. 194H-- Bharati Airtel Ltd. v. Deputy CIT (TDS) (Cochin) . . . 263
----Failure to deposit tax deducted at source with Central Government--Interim order of High Court in writ petition challenging validity of rule 3 directing assessee to place tax deducted at source in separate account till further orders--Assessee placing tax deducted at source amount in a separate account--Commissioner (Appeals) justified in directing Assessing Officer to wait till final order of High Court for recovery of tax deducted at source--Income-tax Rules, 1962, r. 3.--Income-tax Act, 1961, s. 201(1), (1A)-- Deputy CIT (TDS) v. Power Grid Corporation of India Ltd. (Nagpur) . . . 203
----Professional services--Third party administrator providing services to holders of health insurance policies--Payments to hospitals or nursing homes--Are payments for professional services--Tax deductible at source--Income-tax Act, 1961, s. 194J-- Health India TPA Services P. Ltd. v. ITO (OSD) (TDS) (Mumbai) . . . 298
Depreciation --Ownership of asset--Sale and lease back--Normal lease--Civil dispute between lessor and lessee--Transaction genuine--Assessee entitled to depreciation--Income-tax Act, 1961, s. 32-- Development Credit Bank Ltd.v. Deputy CIT (Mumbai) . . . 209
----Rate of depreciation--Goodwill and furniture and fittings--To be bifurcated--Depreciation allowable at 25 per cent. on goodwill and 10 per cent. on furniture and fittings--Income-tax Act, 1961, s. 32(1)(ii)-- Tirumala Music Centre P. Ltd. v. Assistant CIT (Hyderabad) . . . 309
----Rate of depreciation--Payment towards leasehold rights--Goodwill--Matter remanded to allow depreciation on intangible asset--Income-tax Act, 1961, s. 32(1)(ii)-- Tirumala Music Centre P. Ltd. v. Assistant CIT (Hyderabad) . . . 309
Export --Exemption--Export oriented unit--Telecommunication and internet charges--Incurred for export business--To be excluded from export turnover as well as total turnover--Belated payment of employees’ provident fund contributions--Payment made before date of filing of returns--Allowable--Income-tax Act, 1961, s. 10B-- Assistant CITv. SCM Microsystems (India) P. Ltd. (Chennai) . . . 178
Income --Expenditure relating to income not includible in total income--Disallowance--Commissioner (Appeals) can disallow in first instance--Disallowance at 10 per cent. of exempt income would suffice--Assessing Officer cannot simply brush aside disallowance calculated suo motu by assessee--Must give cogent reasons for not being satisfied with correctness of claim--No reasoned finding against disallowance computed and shown by assessee--Disallowance to be computed after affording reasonable opportunity to assessee--Income-tax Act, 1961, s. 14A--Income-tax Rules, 1962, r. 8D-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
Industrial undertaking --Special deduction--Unit manufacturing perfumery compound--Licence from Directorate of Industries, registration for value added tax purposes, order of Commercial Tax Department establishing that factory was in existence and assessee was engaged in manufacturing of perfumery oils--Certificate from chartered engineers in respect of production of finished goods in short period--Factory closed in 2010--Inspection in 2012 by Income-tax Inspector not sufficient to dislodge evidence--Assessee enjoying benefit of special deduction in immediate preceding year--Rule of consistency--Not to be denied benefit--Income-tax Act, 1961, s. 80-IC-- Shree Veer Aromatics Herbs Products v. ITO (Delhi) . . . 282
Interest-tax --Issue of interest itself deleted--No question of levy of interest-tax--Interest-tax not be leviable on interest collected by the assessee--Interest-tax Act, 1974-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
International transaction --Determination of arm’s length price--Agreement between parties not to exclude other approved method of determining arm’s length price--Assessee can adopt any method specified in section 92C if able to show it to be most appropriate method--Failure by Transfer Pricing Officer to conduct pricing study and independently determine arm’s length price by taking candid transactions of unrelated parties--Matter remanded--Income-tax Act, 1961, s. 92C-- Assistant CIT v. SCM Microsystems (India) P. Ltd. (Chennai) . . . 178
----Transfer pricing--Determination of arm’s length price--Transfer pricing adjustment can be made only on transactions with associated enterprises--Proportionate adjustment falling within plus or minus 5 per cent.--No transfer pricing adjustment required--Income-tax Act, 1961-- Alstom Projects India Ltd. v. Additional CIT (Mumbai) . . . 322
Loss --Revaluation of outstanding contracts on net basis--Allowable-- Development Credit Bank Ltd. v. Deputy CIT(Mumbai) . . . 209
----Revaluation of securities at market rate--Resulting loss allowable-- Development Credit Bank Ltd. v. Deputy CIT(Mumbai) . . . 209
Return of income --Delay in filing--Interest--Return filed in time but signed by general manager and chief manager and not by managing director--Merely defective not invalid--Interest not leviable--Income-tax Act, 1961, s. 234A--Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
Revision --Commissioner--Bad debts--Provision for--Working out of deduction--Change of opinion--Revision not permissible--Income-tax Act, 1961, ss. 36(1)(vii), 263-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
----Commissioner--Housing project--Special deduction--Return filed after expiry of time specified in section 139(4)--Deduction allowed in assessment made under section 143(3)--Not erroneous and prejudicial to interests of Revenue--Revision to withdraw deduction not permissible--Income-tax Act, 1961, ss. 80-IB(10), 139(4), 143(3), 147, 263--Vanshree Builders and Developers P. Ltd. v. CIT (Bangalore) . . . 188
Wealth-tax --Valuation of asset--Motor cars--80 per cent. of insurance value to be taken--Not written down value--Wealth-tax Act, 1957-- Zee Entertainment Enterprises Ltd. v. Assistant CWT (Mumbai) . . . 314

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Income-tax Act, 1961 :
S. 10B --Export--Exemption--Export oriented unit--Telecommunication and internet charges--Incurred for export business--To be excluded from export turnover as well as total turnover--Belated payment of employees’ provident fund contributions--Payment made before date of filing of returns--Allowable-- Assistant CIT v. SCM Microsystems (India) P. Ltd. (Chennai) . . . 178
S. 11 --Charitable purpose--Registration of trusts--Director (Exemptions) entitled to enquire into activities of trust before granting registration--Disqualification even where small portion of income enures to benefit of person mentioned in section 13(3)--Assessee conducting eye operations with funds received under licence from Canadian organisation to whom it was bound to pay licence fee of $1.00 yearly--Assessee not independent entity--Not entitled to registration-- Operation Eyesight Universal v. Director of Income-tax (Exemptions) (Hyderabad) . . . 268
S. 11(5) --Charitable purposes--Exemption--Income from property--Assessee paying advance for purchase of land from Government grant--To be treated as application of income--No violation of section 11(5)--Grant on capital account not income or corpus of trust--Interest on fixed deposits from unutilised funds on which Government had overriding title--At par with grant and not to be treated as income-- Additional Director of Income-tax (Exemption) v.Natrip Implementation Society (Delhi) . . . 333
S. 12A --Charitable purpose--Registration of trust--Factors to be considered--Commissioner and not any other authority to dispose of application for registration--Powers cannot be delegated unless permitted by statute--Communication or order signed by Income-tax Officer cannot be treated as disposal of application--Failure by Commissioner to pass such order within time limit specified in section 12A--Application deemed to be allowed-- Pravatv. CIT (Kolkata) . . . 294
S. 12AA --Charitable purpose--Registration of trusts--Director (Exemptions) entitled to enquire into activities of trust before granting registration--Disqualification even where small portion of income enures to benefit of person mentioned in section 13(3)--Assessee conducting eye operations with funds received under licence from Canadian organisation to whom it was bound to pay licence fee of $1.00 yearly--Assessee not independent entity--Not entitled to registration-- Operation Eyesight Universal v. Director of Income-tax (Exemptions) (Hyderabad) . . . 268
----Charitable purpose--Registration of trust--Factors to be considered--Commissioner and not any other authority to dispose of application for registration--Powers cannot be delegated unless permitted by statute--Communication or order signed by Income-tax Officer cannot be treated as disposal of application--Failure by Commissioner to pass such order within time limit specified in section 12A--Application deemed to be allowed-- Pravat v. CIT (Kolkata) . . . 294
S. 13(1)(d) --Charitable purposes--Exemption--Income from property--Assessee paying advance for purchase of land from Government grant--To be treated as application of income--No violation of section 11(5)--Grant on capital account not income or corpus of trust--Interest on fixed deposits from unutilised funds on which Government had overriding title--At par with grant and not to be treated as income-- Additional Director of Income-tax (Exemption) v.Natrip Implementation Society (Delhi) . . . 333
S. 13(3) --Charitable purpose--Registration of trusts--Director (Exemptions) entitled to enquire into activities of trust before granting registration--Disqualification even where small portion of income enures to benefit of person mentioned in section 13(3)--Assessee conducting eye operations with funds received under licence from Canadian organisation to whom it was bound to pay licence fee of $1.00 yearly--Assessee not independent entity--Not entitled to registration-- Operation Eyesight Universal v. Director of Income-tax (Exemptions) (Hyderabad) . . . 268
S. 14A --Income--Expenditure relating to income not includible in total income--Disallowance--Commissioner (Appeals) can disallow in first instance--Disallowance at 10 per cent. of exempt income would suffice--Assessing Officer cannot simply brush aside disallowance calculated suo motu by assessee--Must give cogent reasons for not being satisfied with correctness of claim--No reasoned finding against disallowance computed and shown by assessee--Disallowance to be computed after affording reasonable opportunity to assessee-- Development Credit Bank Ltd. v. Deputy CIT(Mumbai) . . . 209
S. 32 --Depreciation--Ownership of asset--Sale and lease back--Normal lease--Civil dispute between lessor and lessee--Transaction genuine--Assessee entitled to depreciation-- Development Credit Bank Ltd. v. Deputy CIT(Mumbai) . . . 209
S. 32(1)(ii) --Depreciation--Rate of depreciation--Goodwill and furniture and fittings--To be bifurcated--Depreciation allowable at 25 per cent. on goodwill and 10 per cent. on furniture and fittings-- Tirumala Music Centre P. Ltd. v.Assistant CIT (Hyderabad) . . . 309
----Depreciation--Rate of depreciation--Payment towards leasehold rights--Goodwill--Matter remanded to allow depreciation on intangible asset-- Tirumala Music Centre P. Ltd. v. Assistant CIT (Hyderabad) . . . 309
S. 36(1)(vii) --Bad debts--Assessee debiting accounts with aggregate of amounts irrecoverable--No infirmity--Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
----Revision--Commissioner--Bad debts--Provision for--Working out of deduction--Change of opinion--Revision not permissible-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
S. 37 --Capital or revenue expenditure--Corporate membership of club--Meant for benefit of assessee and not for any particular employee--Expenditure wholly and exclusively for purposes of business--Allowable-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
S. 40A(3) --Business expenditure--Disallowance--Payments in cash exceeding specified limit--Exception where payment made by agent of assessee--Payment of lorry hire charges to lorry drivers--Assessee neither owner of vehicle nor owner of goods carried--Lorry drivers cannot be considered as agents of assessee--Failure to show payments covered by any exception--Disallowance proper-- MRS Roadways v. Deputy CIT (Cochin) . . . 317
----Business expenditure--Disallowance--Payments in cash exceeding specified limit--Payments made to agents--Never claimed as expenditure--Not liable to tax deduction at source--Payments of reimbursement--Are purely for business expenses-- Deputy CIT v. Maruti Freight Movers Ltd. (Kolkata) . . . 305
S. 43B --Business expenditure--Deduction only on actual payment--Provident fund contribution made before due date of filing return--Allowable--Matter remanded to verify that payments made before due date of filing return-- Alstom Projects India Ltd. v. Additional CIT (Mumbai) . . . 322
S. 80-IB(10) --Revision--Commissioner--Housing project--Special deduction--Return filed after expiry of time specified in section 139(4)--Deduction allowed in assessment made under section 143(3)--Not erroneous and prejudicial to interests of Revenue--Revision to withdraw deduction not permissible-- Vanshree Builders and Developers P. Ltd. v.CIT (Bangalore) . . . 188
S. 80-IC --Industrial undertaking--Special deduction--Unit manufacturing perfumery compound--Licence from Directorate of Industries, registration for value added tax purposes, order of Commercial Tax Department establishing that factory was in existence and assessee was engaged in manufacturing of perfumery oils--Certificate from chartered engineers in respect of production of finished goods in short period--Factory closed in 2010--Inspection in 2012 by Income-tax Inspector not sufficient to dislodge evidence--Assessee enjoying benefit of special deduction in immediate preceding year--Rule of consistency--Not to be denied benefit-- Shree Veer Aromatics Herbs Products v.ITO (Delhi) . . . 282
S. 92C --International transaction--Determination of arm’s length price--Agreement between parties not to exclude other approved method of determining arm’s length price--Assessee can adopt any method specified in section 92C if able to show it to be most appropriate method--Failure by Transfer Pricing Officer to conduct pricing study and independently determine arm’s length price by taking candid transactions of unrelated parties--Matter remanded-- Assistant CIT v. SCM Microsystems (India) P. Ltd. (Chennai) . . . 178
S. 139(4) --Revision--Commissioner--Housing project--Special deduction--Return filed after expiry of time specified in section 139(4)--Deduction allowed in assessment made under section 143(3)--Not erroneous and prejudicial to interests of Revenue--Revision to withdraw deduction not permissible-- Vanshree Builders and Developers P. Ltd. v.CIT (Bangalore) . . . 188
S. 143(3) --Revision--Commissioner--Housing project--Special deduction--Return filed after expiry of time specified in section 139(4)--Deduction allowed in assessment made under section 143(3)--Not erroneous and prejudicial to interests of Revenue--Revision to withdraw deduction not permissible-- Vanshree Builders and Developers P. Ltd. v.CIT (Bangalore) . . . 188
S. 147 --Revision--Commissioner--Housing project--Special deduction--Return filed after expiry of time specified in section 139(4)--Deduction allowed in assessment made under section 143(3)--Not erroneous and prejudicial to interests of Revenue--Revision to withdraw deduction not permissible-- Vanshree Builders and Developers P. Ltd. v.CIT (Bangalore) . . . 188
S. 194C --Business expenditure--Disallowance--Payments in cash exceeding specified limit--Payments made to agents--Never claimed as expenditure--Not liable to tax deduction at source--Payments of reimbursement--Are purely for business expenses-- Deputy CIT v. Maruti Freight Movers Ltd. (Kolkata) . . . 305
S. 194H --Deduction of tax at source--Commission--Mobile telephone service--Discount given by assessee to distributors on sale of SIM cards and recharge coupons--Constitutes commission--Assessee liable to deduct tax at source on such commission-- Bharati Airtel Ltd. v. Deputy CIT (TDS) (Cochin) . . . 263
S. 194J --Deduction of tax at source--Professional services--Third party administrator providing services to holders of health insurance policies--Payments to hospitals or nursing homes--Are payments for professional services--Tax deductible at source-- Health India TPA Services P. Ltd. v. ITO (OSD) (TDS) (Mumbai) . . . 298
S. 201(1), (1A) --Deduction of tax at source--Failure to deposit tax deducted at source with Central Government--Interim order of High Court in writ petition challenging validity of rule 3 directing assessee to place tax deducted at source in separate account till further orders--Assessee placing tax deducted at source amount in a separate account--Commissioner (Appeals) justified in directing Assessing Officer to wait till final order of High Court for recovery of tax deducted at source-- Deputy CIT (TDS) v. Power Grid Corporation of India Ltd. (Nagpur) . . . 203
S. 234A --Return of income--Delay in filing--Interest--Return filed in time but signed by general manager and chief manager and not by managing director--Merely defective not invalid--Interest not leviable-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
S. 263 --Revision--Commissioner--Bad debts--Provision for--Working out of deduction--Change of opinion--Revision not permissible-- Development Credit Bank Ltd. v. Deputy CIT (Mumbai) . . . 209
----Revision--Commissioner--Housing project--Special deduction--Return filed after expiry of time specified in section 139(4)--Deduction allowed in assessment made under section 143(3)--Not erroneous and prejudicial to interests of Revenue--Revision to withdraw deduction not permissible-- Vanshree Builders and Developers P. Ltd. v. CIT(Bangalore) . . . 188
Income-tax Rules, 1962 :
R. 3 --Deduction of tax at source--Failure to deposit tax deducted at source with Central Government--Interim order of High Court in writ petition challenging validity of rule 3 directing assessee to place tax deducted at source in separate account till further orders--Assessee placing tax deducted at source amount in a separate account--Commissioner (Appeals) justified in directing Assessing Officer to wait till final order of High Court for recovery of tax deducted at source-- Deputy CIT (TDS) v. Power Grid Corporation of India Ltd. (Nagpur) . . . 203
R. 6DD(k) --Business expenditure--Disallowance--Payments in cash exceeding specified limit--Exception where payment made by agent of assessee--Payment of lorry hire charges to lorry drivers--Assessee neither owner of vehicle nor owner of goods carried--Lorry drivers cannot be considered as agents of assessee--Failure to show payments covered by any exception--Disallowance proper-- MRS Roadways v. Deputy CIT (Cochin) . . . 317
R. 8D --Income--Expenditure relating to income not includible in total income--Disallowance--Commissioner (Appeals) can disallow in first instance--Disallowance at 10 per cent. of exempt income would suffice--Assessing Officer cannot simply brush aside disallowance calculated suo motu by assessee--Must give cogent reasons for not being satisfied with correctness of claim--No reasoned finding against disallowance computed and shown by assessee--Disallowance to be computed after affording reasonable opportunity to assessee-- Development Credit Bank Ltd. v. Deputy CIT(Mumbai) . . . 209