Sunday, February 20, 2011

ITR 331[2]



From: GlobalIndianCAs@yahoogroups.com [mailto:GlobalIndianCAs@yahoogroups.com] On Behalf Of CABHUPENDRASHAH
Sent: Friday, February 18, 2011 5:40 PM
To: GlobalIndianCAs@yahoogroups.com
Subject: [GlobalIndianCAs] itr 331[2]

 
INCOME TAX REPORTS (ITR)

Volume 331 : Part 2 (Issue dated 21-2-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Appeal to High Court --Delay in filing appeal--High Court can condone delay--Income-tax Act, 1961, s. 260A-- CIT v. R. K. B. K. Ltd . (Cal) . . . 269

Capital gains --Exemption--Transfer of residential house and purchase or construction of a residential house within the prescribed time--Meaning of "a residential house" in section 54--Transfer of residential house and purchase of four flats in the same residential building--Assessee entitled to exemption under section 54--Income-tax Act, 1961, s. 54--General Clauses Act, 1897, s. 13-- CIT v. Smt. K. G. Rukminiamma

(Karn) . . . 211

Charitable purpose --Charitable institution--Registration--Agricultural produce market committee--Income received to be spent for purpose mentioned--Including object of general public utility--Samiti entitled to registration--Income-tax Act, 1961, ss. 2(15), 12A, 12AA-- CIT v. Krishi Upaj Mandi Samiti, Jaisalmer

(Raj) . . . 135

----Charitable institution--Registration--Agricultural produce marketing committees set up by State Government--Charitable institution entitled to registration--Income-tax Act, 1961, ss. 2(15), 11, 12, 12A-- CIT v. Krishi Upaj Mandi Samiti, Shrimadhopur

(Raj) . . . 174

----Registration of trust--Agricultural produce marketing committees--Delay in application for registration from assessment year 2003-04 due to bona fide belief that registration was not necessary and in getting approval and legal advice from Government authorities--Delay to be condoned--Income-tax Act, 1961, ss. 12A, 12AA-- CIT v. Krishi Utpadan Mandi Samiti (All) . . . 154

----Registration of trust--"Charitable purposes", "property"--Meanings of--Samiti set up by State Government to regulate sale and purchase of agricultural produce and develop facilities for marketing of agricultural produce--Committees declared as local authorities exempted from tax till 2003--Dominant object of samitis was advancement of general public utility--Cess collected by samitis utilised for objects of samitis--Samitis entitled to registration--Income-tax Act, 1961, ss. 2(15), 11, 12A, 12AA-- CIT v. Krishi Utpadan Mandi Samiti (All) . . . 154

----Registration of trust--Market committee constituted statutorily with object of helping agriculturists and consumers--Entitled to registration--Benefit of exemption depends upon whether income utilised for charitable purpose--Income-tax Act, 1961, ss. 11, 12A, 12AA-- CIT v. Krishi Upaj Mandi Samiti (MP) . . . 140

Charitable trust --Registration--Application for registration--Delay in filing application--Assessee executing trust deed in 2000, started activities in 2005--Assessee as per advice of chartered accountant filing application belatedly--Delay to be condoned--Income-tax Act, 1961, s. 12AA-- CIT v. Indian Gospel Fellowship Trust

(Mad) . . . 283

Commissioner --Revision--Depreciation on goodwill--Revision on ground goodwill not an asset entitled to depreciation--Goodwill valuable commercial asset similar to other intangibles eligible to depreciation--Where two views are possible and Assessing Officer accepting one view which is a plausible one, not appropriate to exercise power under section 263--Income-tax Act, 1961, ss. 32, 263-- CIT v. Hindustan Coco Cola Beverages P. Ltd. (Delhi) . . . 192

Income --Accrual--Non-banking financial company--Method of accounting--Mercantile system of accounting--Interest accrued on non-performing assets not recognised as income--In conformity with notification issued by Reserve Bank of India--No question of accrual of income--Income-tax Act, 1961-- CIT v. Coimbatore Lakshmi Inv. and Finance Co. Ltd . (Mad) . . . 229

Income from other sources --Deduction--Interest on borrowed capital--Assessee manufacturing and exporting textiles--Funds transferred from cash credit/packing credit--Interest on such funds--Not entitled to deduction--Income-tax Act, 1961, s. 57(iii)-- CIT v. Dhanalakshmi Weaving Works (Ker) . . . 188

Industrial undertaking --Special deduction--Duty draw back --Does not form part of net profit--Income-tax Act, 1961, s. 80-IB-- Eastman Exports Global Clothing P. Ltd. v. Asst. CIT (Mad) . . . 232

Interpretation of taxing statutes --Effect of Explanation -- CIT v. Jet Airways (I) Ltd . (Bom) . . . 236

----Purposive interpretation--Casus omissus-- CIT v. R. K. B. K. Ltd.

(Cal) . . . 269

Reassessment --Notice--Deduction allowed under section 80-IA --Initiation of proceedings on change of opinion on whether assessee engaged in manufacture--Not permissible--Assessee allowed deduction in preceding as well as subsequent years--Group company engaged in similar activity also allowed deduction--Proceedings to be quashed--Income-tax Act, 1961, ss. 80-IA, 147, 148-- Northern Strips Ltd . v. ITO

(Delhi) . . . 224

----Scope of power of Assessing Officer--Law applicable--Effect of amendment of section 147 w.e.f. 1-4-1989--Assessing Officer can also assess other incomes not referred to in notice of reassessment--Power to assess such other income only if income referred to in notice of reassessment has been assessed--Income-tax Act, 1961, s. 147-- CIT v. Jet Airways (I) Ltd. (Bom) . . . 236

Recovery of tax --Hindu undivided family--Firm--Hindu undivided family or individual property--Karta of Hindu undivided family becoming partner in firm--Finding that he had become a partner in his individual capacity--Hindu undivided family properties could not be attached in proceedings for recovery of tax due by firm--Income-tax Act, 1961-- ITO v. Tippala China Appa Rao (AP) . . . 248

----Provisional attachment--Limitation--Department to show whether time extended as required under law--Income-tax Act, 1961, s. 281B-- VLS Finance Ltd. v. Asst. CIT (Delhi) . . . 131

Revision --Commissioner--Assessing Officer allowing claim for depreciation without examining facts--False claim for depreciation in prior years--Order erroneous--Commissioner justified in setting aside order in revision--Income-tax Act, 1961, s. 263-- CIT v. English Indian Clays Ltd. (Ker) . . . 219

Search and seizure --Return of seized assets--Direction not to release seized assets till assessment completed--Assessment made treating as unexplained investment of assessee--Tribunal deleting addition on jewellery--Jewellery not released on ground it did not belong to assessee alone--No proof that jewellery belonging to a third person--Matter remanded--Income-tax Act, 1961, s. 69A-- Madhu Lalwani v. CIT

(Delhi) . . . 184

Unexplained investment --Cost of construction of property--Estimate based on relevant material--Justified--Income-tax Act, 1961-- CIT v. Smt. V. Gajalakshmi

(Mad) . . . 216

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

General Clauses Act, 1897 :

S. 13 --Capital gains--Exemption--Transfer of residential house and purchase or construction of a residential house within the prescribed time--Meaning of "a residential house" in section 54--Transfer of residential house and purchase of four flats in the same residential building--Assessee entitled to exemption under section 54-- CIT v. Smt. K. G. Rukminiamma (Karn) . . . 211

Income-tax Act, 1961 :

S. 2(15) --Charitable purpose--Charitable institution--Registration--Agricultural produce market committee--Income received to be spent for purpose mentioned--Including object of general public utility--Samiti entitled to registration-- CIT v. Krishi Upaj Mandi Samiti, Jaisalmer (Raj) . . . 135

----Charitable purpose--Charitable institution--Registration--Agricultural produce marketing committees set up by State Government--Charitable institution entitled to registration-- CIT v. Krishi Upaj Mandi Samiti, Shrimadhopur (Raj) . . . 174

----Charitable purpose--Registration of trust--"Charitable purposes", "property"--Meanings of--Samiti set up by State Government to regulate sale and purchase of agricultural produce and develop facilities for marketing of agricultural produce--Committees declared as local authorities exempted from tax till 2003--Dominant object of samitis was advancement of general public utility--Cess collected by samitis utilised for objects of samitis--Samitis entitled to registration-- CIT v. Krishi Utpadan Mandi Samiti

(All) . . . 154

S. 11 --Charitable purpose--Charitable institution--Registration--Agricultural produce marketing committees set up by State Government--Charitable institution entitled to registration-- CIT v. Krishi Upaj Mandi Samiti, Shrimadhopur

(Raj) . . . 174

----Charitable purpose--Registration of trust--"Charitable purposes", "property"--Meanings of--Samiti set up by State Government to regulate sale and purchase of agricultural produce and develop facilities for marketing of agricultural produce--Committees declared as local authorities exempted from tax till 2003--Dominant object of samitis was advancement of general public utility--Cess collected by samitis utilised for objects of samitis--Samitis entitled to registration-- CIT v. Krishi Utpadan Mandi Samiti

(All) . . . 154

----Charitable purpose--Registration of trust--Market committee constituted statutorily with object of helping agriculturists and consumers--Entitled to registration--Benefit of exemption depends upon whether income utilised for charitable purpose-- CIT v. Krishi Upaj Mandi Samiti (MP) . . . 140

S. 12 --Charitable purpose--Charitable institution--Registration--Agricultural produce marketing committees set up by State Government--Charitable institution entitled to registration-- CIT v. Krishi Upaj Mandi Samiti, Shrimadhopur

(Raj) . . . 174

S. 12A --Charitable purpose--Charitable institution--Registration--Agricultural produce market committee--Income received to be spent for purpose mentioned--Including object of general public utility--Samiti entitled to registration-- CIT v. Krishi Upaj Mandi Samiti, Jaisalmer (Raj) . . . 135

----Charitable purpose--Charitable institution--Registration--Agricultural produce marketing committees set up by State Government--Charitable institution entitled to registration-- CIT v. Krishi Upaj Mandi Samiti, Shrimadhopur (Raj) . . . 174

----Charitable purpose--Registration of trust--Agricultural produce marketing committees--Delay in application for registration from assessment year 2003-04 due to bona fide belief that registration was not necessary and in getting approval and legal advice from Government authorities--Delay to be condoned-- CIT v. Krishi Utpadan Mandi Samiti (All) . . . 154

----Charitable purpose--Registration of trust--"Charitable purposes", "property"--Meanings of--Samiti set up by State Government to regulate sale and purchase of agricultural produce and develop facilities for marketing of agricultural produce--Committees declared as local authorities exempted from tax till 2003--Dominant object of samitis was advancement of general public utility--Cess collected by samitis utilised for objects of samitis--Samitis entitled to registration-- CIT v. Krishi Utpadan Mandi Samiti

(All) . . . 154

----Charitable purpose--Registration of trust--Market committee constituted statutorily with object of helping agriculturists and consumers--Entitled to registration--Benefit of exemption depends upon whether income utilised for charitable purpose-- CIT v. Krishi Upaj Mandi Samiti (MP) . . . 140

S. 12AA --Charitable purpose--Charitable institution--Registration--Agricultural produce market committee--Income received to be spent for purpose mentioned--Including object of general public utility--Samiti entitled to registration-- CIT v. Krishi Upaj Mandi Samiti, Jaisalmer (Raj) . . . 135

----Charitable purpose--Registration of trust--Agricultural produce marketing committees--Delay in application for registration from assessment year 2003-04 due to bona fide belief that registration was not necessary and in getting approval and legal advice from Government authorities--Delay to be condoned-- CIT v. Krishi Utpadan Mandi Samiti (All) . . . 154

----Charitable purpose--Registration of trust--"Charitable purposes", "property"--Meanings of--Samiti set up by State Government to regulate sale and purchase of agricultural produce and develop facilities for marketing of agricultural produce--Committees declared as local authorities exempted from tax till 2003--Dominant object of samitis was advancement of general public utility--Cess collected by samitis utilised for objects of samitis--Samitis entitled to registration-- CIT v. Krishi Utpadan Mandi Samiti

(All) . . . 154

----Charitable purpose--Registration of trust--Market committee constituted statutorily with object of helping agriculturists and consumers--Entitled to registration--Benefit of exemption depends upon whether income utilised for charitable purpose-- CIT v. Krishi Upaj Mandi Samiti (MP) . . . 140

----Charitable trust--Registration--Application for registration--Delay in filing application--Assessee executing trust deed in 2000, started activities in 2005--Assessee as per advice of chartered accountant filing application belatedly--Delay to be condoned-- CIT v. Indian Gospel Fellowship Trust (Mad) . . . 283

S. 32 --Commissioner--Revision--Depreciation on goodwill--Revision on ground goodwill not an asset entitled to depreciation--Goodwill valuable commercial asset similar to other intangibles eligible to depreciation--Where two views are possible and Assessing Officer accepting one view which is a plausible one, not appropriate to exercise power under section 263-- CIT v. Hindustan Coco Cola Beverages P. Ltd.

(Delhi) . . . 192

S. 54 --Capital gains--Exemption--Transfer of residential house and purchase or construction of a residential house within the prescribed time--Meaning of "a residential house" in section 54--Transfer of residential house and purchase of four flats in the same residential building--Assessee entitled to exemption under section 54-- CIT v. Smt. K. G. Rukminiamma (Karn) . . . 211

S. 57(iii) --Income from other sources--Deduction--Interest on borrowed capital--Assessee manufacturing and exporting textiles--Funds transferred from cash credit/packing credit--Interest on such funds--Not entitled to deduction-- CIT v. Dhanalakshmi Weaving Works (Ker) . . . 188

S. 69A --Search and seizure--Return of seized assets--Direction not to release seized assets till assessment completed--Assessment made treating as unexplained investment of assessee--Tribunal deleting addition on jewellery--Jewellery not released on ground it did not belong to assessee alone--No proof that jewellery belonging to a third person--Matter remanded-- Madhu Lalwani v. CIT (Delhi) . . . 184

S. 80-IA --Reassessment--Notice--Deduction allowed under section 80-IA--Initiation of proceedings on change of opinion on whether assessee engaged in manufacture--Not permissible--Assessee allowed deduction in preceding as well as subsequent years--Group company engaged in similar activity also allowed deduction--Proceedings to be quashed-- Northern Strips Ltd . v. ITO (Delhi) . . . 224

S. 80-IB --Industrial undertaking--Special deduction--Duty draw back --Does not form part of net profit-- Eastman Exports Global Clothing P. Ltd. v. Asst. CIT

(Mad) . . . 232

S. 147 --Reassessment--Notice--Deduction allowed under section 80-IA --Initiation of proceedings on change of opinion on whether assessee engaged in manufacture--Not permissible--Assessee allowed deduction in preceding as well as subsequent years--Group company engaged in similar activity also allowed deduction--Proceedings to be quashed-- Northern Strips Ltd . v. ITO (Delhi) . . . 224

----Reassessment--Scope of power of Assessing Officer--Law applicable--Effect of amendment of section 147 w.e.f. 1-4-1989--Assessing Officer can also assess other incomes not referred to in notice of reassessment--Power to assess such other income only if income referred to in notice of reassessment has been assessed-- CIT v. Jet Airways (I) Ltd. (Bom) . . . 236

S. 148 --Reassessment--Notice--Deduction allowed under section 80-IA --Initiation of proceedings on change of opinion on whether assessee engaged in manufacture--Not permissible--Assessee allowed deduction in preceding as well as subsequent years--Group company engaged in similar activity also allowed deduction--Proceedings to be quashed-- Northern Strips Ltd . v. ITO (Delhi) . . . 224

S. 260A --Appeal to High Court--Delay in filing appeal--High Court can condone delay-- CIT v. R. K. B. K. Ltd . (Cal) . . . 269

S. 263 --Commissioner--Revision--Depreciation on goodwill--Revision on ground goodwill not an asset entitled to depreciation--Goodwill valuable commercial asset similar to other intangibles eligible to depreciation--Where two views are possible and Assessing Officer accepting one view which is a plausible one, not appropriate to exercise power under section 263-- CIT v. Hindustan Coco Cola Beverages P. Ltd.

(Delhi) . . . 192

----Revision--Commissioner--Assessing Officer allowing claim for depreciation without examining facts--False claim for depreciation in prior years--Order erroneous--Commissioner justified in setting aside order in revision-- CIT v. English Indian Clays Ltd. (Ker) . . . 219

S. 281B --Recovery of tax--Provisional attachment--Limitation--Department to show whether time extended as required under law-- VLS Finance Ltd. v. Asst. CIT

(Delhi) . . . 131
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