Monday, February 14, 2011

ITR (Trib) : Valume 7 Part 7 dt 14.02.2011

ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))

Volume 7 : Part 7 (Issue dated : 14-2-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Assessment --Estimation of trading income--Application of gross profit rate at 14 per cent. without reason--Direction to Assessing Officer to apply 13 per cent. gross profit rate agreed to by assessee proper--Income-tax Act, 1961-- ITO v . Nitesh Maheshwari (Jaipur) . . . 645

----Reference to Valuation Officer--Investment in construction of house--Investment disclosed in books of account--Expenditure proved by vouchers--Reference to Valuation Officer without rejecting books of account or pointing out defects in books of account--Not proper--Addition on basis of higher value adopted by Valuation Officer not justified--Section 142A not applicable--Direction to allow deduction of 20 per cent. of CPWD rates and 12 per cent. for self supervision proper--Income-tax Act, 1961, s. 143 -- ITO v. Nitesh Maheshwari (Jaipur) . . . 645

Best judgment assessment --Enhancement of turnover--Disallowance of sundry credits--Disallowance of cutting expenses--Disallowance without material--Entire income of assessee subject to deduction--Disallowances deleted-- ITO v. Smt. Asha Mittal (Jaipur) . . . 633

Business income --Deemed profits--Cessation of liability--No deduction in earlier year on account of interest allowed--Addition to be deleted--Income-tax Act, 1961, s. 41(1)-- Asst. CIT v. Rollatainers Ltd. (Delhi) . . . 665

Capital asset --Depreciation--Toll road constructed by assessee on "build, own, operate and transfer" basis--Assessee constructing road in course of carrying out its business activities--Is an asset owned by assessee--Assessee entitled to depreciation--Income-tax Act, 1961, s. 32-- Gujarat Road and Infrastructure Co. Ltd. v. CIT (Ahmedabad) . . . 730

Capital gains --Exemption--Investment of gains in residential house--Assessee purchasing ground floor and first floor in two deeds on two consecutive days--Whole constituting single residential unit--Assessee entitled to deduction--Income-tax Act, 1961, s. 54F-- Asst. CIT v. Sudha Gurtoo (Delhi) . . . 653

----Long-term capital gains--Assessee entering into agreement to purchase property in adverse possession of tenant obtaining possession from tenant after payment under consent terms--Assessee deemed to be holding ownership rights in property from date of agreement not date of obtaining possession--Indexation to be allowed from that date--Income-tax Act, 1961, ss. 2(42A), 45-- Ms. Nita A. Patel v. ITO (Mumbai) . . . 659

Deduction of tax at source --Commission--Assessee, a Government undertaking, engaged in extraction of iron ore--Assessee disentitled to export iron ore with iron content of sixty-four per cent. and above in terms of Exim Policy--Export of iron ore by MMTC not on behalf of assessee but on principal to principal basis--Agreement between assessee and exporter not deciding factor of nature of transaction--Payment to MMTC not commission--Assessee not liable to deduct tax at source--Income-tax Act, 1961, ss. 194H, 201, (1A)-- NMDC Ltd. v. Asst. CIT (TDS) (Visakhapatnam) . . . 690

Exemption --Educational institution--Condition that institution should be "financed by Government"--State legislation providing for compulsory contributions by member societies to education fund set apart as source of finance for educational institution promoting co-operative movement in India--Finance received by co-operative society from members in accordance with State legislation--Constitutes indirect financing by Government--Educational institution entitled to exemption--Maharashtra State Co-operative Societies Act, 1960, s. 68--Income-tax Act, 1961, s. 10(23C)(iiiab)-- Maharashtra Rajya Sahakari Sangh Maryadit v. ITO (Pune) . . . 675

----Local authority--District rural development agency--Notified area created by State Government under Gujarat Industrial Development Act for industrial development --Self-governing institutions--Powers of notified area equivalent to that of other municipal bodies--Notified area governed by Gujarat Municipalities Act--Notified area deemed municipality and local authority--Exemption to be allowed--Constitution of India, art. 243Q--Income-tax Act, 1961, s. 10(20)--Gujarat Industrial Development Act, 1962, s. 16--Gujarat Municipalities Act, 1963, ss. 264A, 264B-- ITO v. Sachin Notified Area (Ahmedabad) . . . 699

Industrial undertaking --Special deduction--Manufacture--Sawing, cutting and sizing of marble blocks--Is manufacture--Assessee entitled to deduction--Income-tax Act, 1961, s. 80-IB-- ITO v. Smt. Asha Mittal (Jaipur) . . . 633

Loss --Set off and carry forward--Amalgamation of companies--To be decided at time of allowance of loss--Income-tax Act, 1961, s. 72A-- Gujarat Road and Infrastructure Co. Ltd. v. CIT (Ahmedabad) . . . 730

Penalty --Furnishing of inaccurate particulars of income--Assessee reporting profit as loss deliberately--Explanation that mistake of reporting profit as loss due to inadvertent error in operating formula--Error not rectified despite notice--Discrepancies in book profit, audited report--Case of furnishing in-accurate particulars of income--Penalty exigible--Income-tax Act, 1961, s. 271(1)(c)-- Deputy CIT v. Terra Energy Ltd. (Chennai) . . . 711

Reassessment --Industrial undertaking--Special deduction--Deduction allowed for two earlier years--Notice for reassessment based on Supreme Court decision--Permissible--Income-tax Act, 1961, ss. 80-IB, 147, 148-- ITO v. Smt. Asha Mittal (Jaipur) . . . 633

----Validity--Commissioner (Appeals) holding re-opening was on change of opinion --Bound to hold reassessment invalid--Income-tax Act, 1961, s. 148-- Asst. CIT v. Rollatainers Ltd. (Delhi) . . . 665

Revision --Commissioner--Direction to Assessing Officer to verify expenses on road overlay and renewal expenses--Not warranted--Income-tax Act, 1961, s. 263-- Gujarat Road and Infrastructure Co. Ltd. v. CIT (Ahmedabad) . . . 730

----Commissioner--Failure by Assessing Officer to make enquiry with regard to deduction claimed--Assessment order prejudicial to interests of Revenue--Matter remanded--Income-tax Act, 1961, ss. 10A, 263-- TCE Consulting Engineers Ltd. v. Addl. CIT (Mumbai) . . . 718

Words and phrases --"Held"-- Ms. Nita A. Patel v. ITO (Mumbai) . . . 659

----"Building"-- Gujarat Road and Infrastructure Co. Ltd. v. CIT (Ahmedabad) . . . 730

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Constitution of India :

Art. 243Q --Exemption--Local authority--District rural development agency--Notified area created by State Government under Gujarat Industrial Development Act for industrial development--Self-governing institutions--Powers of notified area equivalent to that of other municipal bodies--Notified area governed by Gujarat Municipalities Act --Notified area deemed municipality and local authority--Exemption to be allowed-- ITO v. Sachin Notified Area (Ahmedabad) . . . 699

Gujarat Industrial Development Act, 1962 :

S. 16 --Exemption--Local authority--District rural development agency--Notified area created by State Government under Gujarat Industrial Development Act for industrial development--Self-governing institutions--Powers of notified area equivalent to that of other municipal bodies--Notified area governed by Gujarat Municipalities Act--Notified area deemed municipality and local authority--Exemption to be allowed-- ITO v. Sachin Notified Area (Ahmedabad) . . . 699

Gujarat Municipalities Act, 1963 :

Ss. 264A, 264B --Exemption--Local authority--District rural development agency--Notified area created by State Government under Gujarat Industrial Development Act for industrial development --Self-governing institutions--Powers of notified area equivalent to that of other municipal bodies--Notified area governed by Gujarat Municipalities Act --Notified area deemed municipality and local authority--Exemption to be allowed-- ITO v. Sachin Notified Area (Ahmedabad) . . . 699

Income-tax Act, 1961 :

S. 2(42A) --Capital gains--Long-term capital gains--Assessee entering into agreement to purchase property in adverse possession of tenant obtaining possession from tenant after payment under consent terms--Assessee deemed to be holding ownership rights in property from date of agreement not date of obtaining possession--Indexation to be allowed from that date-- Ms. Nita A. Patel v. ITO (Mumbai) . . . 659

S. 10(20) --Exemption--Local authority--District rural development agency--Notified area created by State Government under Gujarat Industrial Development Act for industrial development--Self-governing institutions--Powers of notified area equivalent to that of other municipal bodies--Notified area governed by Gujarat Municipalities Act --Notified area deemed municipality and local authority--Exemption to be allowed-- ITO v. Sachin Notified Area (Ahmedabad) . . . 699

S. 10(23C)(iiiab) --Exemption--Educational institution--Condition that institution should be "financed by Government"--State legislation providing for compulsory contributions by member societies to education fund set apart as source of finance for educational institution promoting co-operative movement in India--Finance received by co-operative society from members in accordance with State legislation--Constitutes indirect financing by Government--Educational institution entitled to exemption-- Maharashtra Rajya Sahakari Sangh Maryadit v. ITO (Pune) . . . 675

S. 10A --Revision--Commissioner--Failure by Assessing Officer to make enquiry with regard to deduction claimed--Assessment order prejudicial to interests of Revenue --Matter remanded-- TCE Consulting Engineers Ltd. v. Addl. CIT (Mumbai) . . . 718

S. 32 --Capital asset--Depreciation--Toll road constructed by assessee on "build, own, operate and transfer" basis--Assessee constructing road in course of carrying out its business activities--Is an asset owned by assessee--Assessee entitled to depreciation -- Gujarat Road and Infrastructure Co. Ltd. v. CIT (Ahmedabad) . . . 730

S. 41(1) --Business income--Deemed profits--Cessation of liability--No deduction in earlier year on account of interest allowed--Addition to be deleted-- Asst. CIT v. Rollatainers Ltd. (Delhi) . . . 665

S. 45 --Capital gains--Long-term capital gains--Assessee entering into agreement to purchase property in adverse possession of tenant obtaining possession from tenant after payment under consent terms--Assessee deemed to be holding ownership rights in property from date of agreement not date of obtaining possession--Indexation to be allowed from that date-- Ms. Nita A. Patel v. ITO (Mumbai) . . . 659

S. 54F --Capital gains--Exemption--Investment of gains in residential house--Assessee purchasing ground floor and first floor in two deeds on two consecutive days--Whole constituting single residential unit--Assessee entitled to deduction-- Asst. CIT v. Sudha Gurtoo (Delhi) . . . 653

S. 72A --Loss--Set off and carry forward--Amalgamation of companies--To be decided at time of allowance of loss-- Gujarat Road and Infrastructure Co. Ltd. v. CIT (Ahmedabad) . . . 730

S. 80-IB --Industrial undertaking--Special deduction--Manufacture--Sawing, cutting and sizing of marble blocks--Is manufacture--Assessee entitled to deduction-- ITO v. Smt. Asha Mittal (Jaipur) . . . 633

----Reassessment--Industrial undertaking--Special deduction--Deduction allowed for two earlier years--Notice for reassessment based on Supreme Court decision--Permissible-- ITO v. Smt. Asha Mittal (Jaipur) . . . 633

S. 143 --Assessment--Reference to Valuation Officer--Investment in construction of house--Investment disclosed in books of account--Expenditure proved by vouchers--Reference to Valuation Officer without rejecting books of account or pointing out defects in books of account--Not proper--Addition on basis of higher value adopted by Valuation Officer not justified--Section 142A not applicable--Direction to allow deduction of 20 per cent. of CPWD rates and 12 per cent. for self supervision proper-- ITO v. Nitesh Maheshwari (Jaipur) . . . 645

S. 147 --Reassessment--Industrial undertaking--Special deduction--Deduction allowed for two earlier years--Notice for reassessment based on Supreme Court decision --Permissible-- ITO v. Smt. Asha Mittal (Jaipur) . . . 633

S. 148 --Reassessment--Industrial undertaking--Special deduction--Deduction allowed for two earlier years--Notice for reassessment based on Supreme Court decision --Permissible-- ITO v. Smt. Asha Mittal (Jaipur) . . . 633

----Reassessment--Validity--Commissioner (Appeals) holding re-opening was on change of opinion --Bound to hold reassessment invalid-- Asst. CIT v. Rollatainers Ltd. (Delhi) . . . 665

S. 194H --Deduction of tax at source--Commission--Assessee, a Government undertaking, engaged in extraction of iron ore--Assessee disentitled to export iron ore with iron content of sixty-four per cent. and above in terms of Exim Policy--Export of iron ore by MMTC not on behalf of assessee but on principal to principal basis--Agreement between assessee and exporter not deciding factor of nature of transaction--Payment to MMTC not commission--Assessee not liable to deduct tax at source-- NMDC Ltd. v. Asst. CIT (TDS) (Visakhapatnam) . . . 690

S. 201(1A) --Deduction of tax at source--Commission--Assessee, a Government undertaking, engaged in extraction of iron ore--Assessee disentitled to export iron ore with iron content of sixty-four per cent. and above in terms of Exim Policy--Export of iron ore by MMTC not on behalf of assessee but on principal to principal basis--Agreement between assessee and exporter not deciding factor of nature of transaction--Payment to MMTC not commission--Assessee not liable to deduct tax at source-- NMDC Ltd. v. Asst. CIT (TDS) (Visakhapatnam) . . . 690

S. 263 --Revision--Commissioner--Direction to Assessing Officer to verify expenses on road overlay and renewal expenses--Not warranted-- Gujarat Road and Infrastructure Co. Ltd. v. CIT (Ahmedabad) . . . 730

----Revision--Commissioner--Failure by Assessing Officer to make enquiry with regard to deduction claimed--Assessment order prejudicial to interests of Revenue--Matter remanded-- TCE Consulting Engineers Ltd. v. Addl. CIT (Mumbai) . . . 718

S. 271(1)(c) --Penalty--Furnishing of inaccurate particulars of income--Assessee reporting profit as loss deliberately--Explanation that mistake of reporting profit as loss due to inadvertent error in operating formula--Error not rectified despite notice--Discrepancies in book profit, audited report--Case of furnishing inaccurate particulars of income--Penalty exigible-- Deputy CIT v. Terra Energy Ltd. (Chennai) . . . 711

Maharashtra State Co-operative Societies Act, 1960 :

S. 68--Exemption--Educational institution--Condition that institution should be "financed by Government"--State legislation providing for compulsory contributions by member societies to education fund set apart as source of finance for educational institution promoting co-operative movement in India--Finance received by co-operative society from members in accordance with State legislation--Constitutes indirect financing by Government--Educational institution entitled to exemption-- Maharashtra Rajya Sahakari Sangh Maryadit v. ITO (Pune) . . . 675

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