Sunday, March 13, 2011

ITR Volume 330 Part 3 dated 17-01-2011

INCOME TAX REPORTS (ITR)

Volume 330 : Part 3 (Issue dated 17-1-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

SUPREME COURT

Adjudication --Natural justice--Duty of disclosure--Extent and scope-- Kanwar Natwar Singh v. Directorate of Enforcement . . . 374

Company --Book profits--Computation--Reduction of net profit by amount withdrawn from revaluation reserve--Only if amount added back in year of creation of revaluation reserve--Income-tax Act, 1961, s. 115JB-- Indo Rama Synthetics (I.) Ltd. v. CIT . . . 363

Foreign exchange --Adjudication--Notice to show cause why enquiry should not be conducted--Noticee not entitled to copies of documents not relied on by adjudicating authority--Foreign Exchange Management Act, 1999, s. 16--Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000, r. 4(1)-- Kanwar Natwar Singh v. Directorate of Enforcement . . . 374

HIGH COURTS

Advance tax --Interest--Waiver of interest--Grounds for waiver of interest under section 234A different from grounds for waiver of interest under sections 234B and 234C--Compensation received by assessee on surrender of tenancy rights--Position of tax liability not clear--Non-payment of advance tax--Interest liability fixed at Rs. 1 lakh under sections 234B and 234C--Income-tax Act, 1961, ss. 234A, 234B, 234C--Notification No. 400/234/95/IT dated May 23, 1996-- Chief CIT v. Jimmichan M. Varicatt

(Ker) . . . 338

Appeal to Appellate Tribunal --New plea--No such plea taken before lower authorities--Rejection of additional plea--Proper--Income-tax Act, 1961-- CIT v. Hindustan Tin Works Ltd. (Delhi) . . . 350

Appeal to High Court --Findings of fact by Tribunal--Findings cannot be set aside unless perverse--Income-tax Act, 1961, s. 260A-- CIT v. D. S. Promoters and Developers Pvt. Ltd. (Delhi) . . . 291

----Maintainability--Provision empowering CBDT to prescribe monetary limits for litigation by Revenue--Instruction of CBDT binding on Revenue--Tax effect less than prescribed in Instruction--Appeal barred--Income-tax Act, 1961, ss. 260A, 268A-- CIT v. Kironmoy Roy Choudhury (Gauhati) . . . 316

Business expenditure --Initial expenditure for commencement of business and for opening branches amortized--Closure of one branch--Unabsorbed expenditure of closed branch to be apportioned equally amongst head office and other branches--Income-tax Act, 1961, s. 37-- Victoria Gold Gallery v. CIT (Ker) . . . 330

Business loss --Purchase and redemption of units of mutual fund--Disallowance on ground that transaction collusive and accommodation entry--Finding by Commissioner (Appeals) as well as Tribunal that transaction genuine and deleting addition--Findings of fact--Income-tax Act, 1961-- CIT v. Hindustan Tin Works Ltd .

(Delhi) . . . 350

Capital gains --Acquisition of land--Enhanced compensation--Introduction of section 45(5)(b) w.e.f. 1-4-1988--Land acquired on 4-2-1972 and enhanced compensation received on 28-5-1984--No return filed for 1972-73--Rectification cannot be made under section 155(7A)--Enhanced compensation not taxable either in year of receipt or in year of acquisition--Income-tax Act, 1961, ss. 45(5)(b), 155(7A)-- CIT v. Smt. Parkash Kaur (P&H) . . . 332

----Exemption--Investment in residential house--Assessee selling agricultural land and claiming purchase of a flat--Finding that most of instalments for flat paid prior to sale--Flat not in name of assessee-HUF but in joint names of individual and his mother--Assessee not entitled to claim benefit of section 54F--Income-tax Act, 1961, s. 54F-- Vipin Malik (HUF) v. CIT (Delhi) . . . 309

----Transfer of goodwill--Sale of entire business, including all assets and liabilities, as a going concern--Not possible to bifurcate consideration received on account of transfer--Transfer does not give rise to capital gains--Income-tax Act, 1961-- Asst. CIT v. Patel Specific Family Trust (Guj) . . . 397

Cash credits --Burden of proof--Initial burden on assessee to prove identity of creditors--Burden then shifts to Revenue to prove credits were not genuine--Identity of applicants for shares and their PAN numbers furnished--Amounts received through account payee cheques--Inability to find a few applicants--Not sufficient to invoke section 68--Income-tax Act, 1961, s. 68-- CIT v. Dwarkadhish Investment P. Ltd .

(Delhi) . . . 298

Company --Book profit--Assessing Officer not entitled to go into profit and loss account prepared by assessee as per Companies Act--Book profit arrived at to be the basis for taxation--Companies Act, 1956--Income-tax Act, 1961, ss. 80HHC, 115JA-- AVT Natural Products Ltd. v. Deputy CIT (Mad) . . . 360

Firm --Registration--Continuance of registration--Delay in filing declaration in Form 12--Rejection of application without affording opportunity to be heard--Not valid--Income-tax Act, 1961, s. 184(7)-- Bharat Construction Company v. CIT

(All) . . . 285

Income or capital --Assessee founder member and secretary of educational society and working voluntarily as headmaster of school run by society--Amount received for relinquishment of life membership and secretaryship of society--Income receipt--Assessable under income from other sources--Income-tax Act, 1961-- CIT v. H. S. Ramachandra Rao (Karn) . . . 322

Interest --Acquisition of land--Enhanced compensation--No record to suggest that assessee declaring interest income on yearly accrual basis--Assessee following cash system--Interest received taxable--Income-tax Act, 1961-- CIT v. Smt. Parkash Kaur

(P&H) . . . 332

Other sources --Business--Income from property owned by assessee on property taken on lease--Finding based on facts that income from business--Income was assessable as business income--Income-tax Act, 1961, ss. 28, 56-- CIT v. D. S. Promoters and Developers Pvt. Ltd . (Delhi) . . . 291

Reassessment --Assessing Officer under section 143(1)(a) admitting claim of assessee in respect of incentive bonus and additional conveyance allowance--Disallowance of claim in reassessment proceedings--Reassessment valid--Income-tax Act, 1961, s. 147-- Ramesh Chander Singla v. CIT (P&H) . . . 288

----Notice--Income escaping assessment--Wrong claim treating interest receipt as export incentive--Assessing Officer having reason to believe that income has escaped assessment--Reassessment proceedings cannot be quashed--Writ petition not maintainable--Income-tax Act, 1961, ss. 147, 148-- Tamil Nadu Petroproducts Ltd. v. CIT

(Mad) . . . 342

Refund --Claim for refund--Claim withdrawn on ground beyond time specified under section 239--Assessing Officer failing to raise any issue with regard to plea under section 239 at appropriate stage--Commissioner (Appeals) passing order of refund on appeal--Revenue liable to make refund--Income-tax Act, 1961, ss. 239, 240-- Hind Samachar Limited v. Union of India (P&H) . . . 266

----Interest on refund--Assessee deducting and depositing TDS on time but filing TDS certificates during assessment proceedings--Interest under section 244A cannot be denied--Income-tax Act, 1961, s. 244A-- CIT v. Larsen and Toubro Ltd.

(Bom) . . . 340

Return --Company--Rectification of mistakes--Return of company not signed by managing director but by person authorised by board resolution--Defect curable under section 292B--Income-tax Act, 1961, ss. 140, 154, 239, 240, 292B-- Hind Samachar Limited v. Union of India (P&H) . . . 266

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000 :

R. 4(1) --Foreign exchange--Adjudication--Notice to show cause why enquiry should not be conducted--Noticee not entitled to copies of documents not relied on by adjudicating authority-- Kanwar Natwar Singh v. Directorate of Enforcement

(SC) . . . 374

Foreign Exchange Management Act, 1999 :

S. 16 --Foreign exchange--Adjudication--Notice to show cause why enquiry should not be conducted--Noticee not entitled to copies of documents not relied on by adjudicating authority-- Kanwar Natwar Singh v. Directorate of Enforcement

(SC) . . . 374

Income-tax Act, 1961 :

S. 28 --Other sources--Business--Income from property owned by assessee on property taken on lease--Finding based on facts that income from business--Income was assessable as business income-- CIT v. D. S. Promoters and Developers Pvt. Ltd .

(Delhi) . . . 291

S. 37 --Business expenditure--Initial expenditure for commencement of business and for opening branches amortized--Closure of one branch--Unabsorbed expenditure of closed branch to be apportioned equally amongst head office and other branches-- Victoria Gold Gallery v. CIT (Ker) . . . 330

S. 45(5)(b) --Capital gains--Acquisition of land--Enhanced compensation--Introduction of section 45(5)(b) w.e.f. 1-4-1988--Land acquired on 4-2-1972 and enhanced compensation received on 28-5-1984--No return filed for 1972-73--Rectification cannot be made under section 155(7A)--Enhanced compensation not taxable either in year of receipt or in year of acquisition-- CIT v. Smt. Parkash Kaur (P&H) . . . 332

S. 54F --Capital gains--Exemption--Investment in residential house--Assessee selling agricultural land and claiming purchase of a flat--Finding that most of instalments for flat paid prior to sale--Flat not in name of assessee-HUF but in joint names of individual and his mother--Assessee not entitled to claim benefit of section 54F-- Vipin Malik (HUF) v. CIT (Delhi) . . . 309

S. 56 --Other sources--Business--Income from property owned by assessee on property taken on lease--Finding based on facts that income from business--Income was assessable as business income-- CIT v. D. S. Promoters and Developers Pvt. Ltd .

(Delhi) . . . 291

S. 68 --Cash credits--Burden of proof--Initial burden on assessee to prove identity of creditors--Burden then shifts to Revenue to prove credits were not genuine--Identity of applicants for shares and their PAN numbers furnished--Amounts received through account payee cheques--Inability to find a few applicants--Not sufficient to invoke section 68-- CIT v. Dwarkadhish Investment P. Ltd . (Delhi) . . . 298

S. 80HHC --Company--Book profit--Assessing Officer not entitled to go into profit and loss account prepared by assessee as per Companies Act--Book profit arrived at to be the basis for taxation-- AVT Natural Products Ltd. v. Deputy CIT

(Mad) . . . 360

S. 115JA --Company--Book profit--Assessing Officer not entitled to go into profit and loss account prepared by assessee as per Companies Act--Book profit arrived at to be the basis for taxation-- AVT Natural Products Ltd. v. Deputy CIT

(Mad) . . . 360

S. 115JB --Company--Book profits--Computation--Reduction of net profit by amount withdrawn from revaluation reserve--Only if amount added back in year of creation of revaluation reserve-- Indo Rama Synthetics (I.) Ltd. v. CIT

(SC) . . . 363

S. 140 --Return--Company--Rectification of mistakes--Return of company not signed by managing director but by person authorised by board resolution--Defect curable under section 292B-- Hind Samachar Limited v. Union of India

(P&H) . . . 266

S. 147 --Reassessment--Assessing Officer under section 143(1)(a) admitting claim of assessee in respect of incentive bonus and additional conveyance allowance--Disallowance of claim in reassessment proceedings--Reassessment valid-- Ramesh Chander Singla v. CIT (P&H) . . . 288

----Reassessment--Notice--Income escaping assessment--Wrong claim treating interest receipt as export incentive--Assessing Officer having reason to believe that income has escaped assessment--Reassessment proceedings cannot be quashed--Writ petition not maintainable-- Tamil Nadu Petroproducts Ltd. v. CIT

(Mad) . . . 342

S. 148 --Reassessment--Notice--Income escaping assessment--Wrong claim treating interest receipt as export incentive--Assessing Officer having reason to believe that income has escaped assessment--Reassessment proceedings cannot be quashed--Writ petition not maintainable-- Tamil Nadu Petroproducts Ltd. v. CIT

(Mad) . . . 342

S. 154 --Return--Company--Rectification of mistakes--Return of company not signed by managing director but by person authorised by board resolution--Defect curable under section 292B-- Hind Samachar Limited v. Union of India

(P&H) . . . 266

S. 155(7A) --Capital gains--Acquisition of land--Enhanced compensation--Introduction of section 45(5)(b) w.e.f. 1-4-1988--Land acquired on 4-2-1972 and enhanced compensation received on 28-5-1984--No return filed for 1972-73--Rectification cannot be made under section 155(7A)--Enhanced compensation not taxable either in year of receipt or in year of acquisition-- CIT v. Smt. Parkash Kaur (P&H) . . . 332

S. 184(7) --Firm--Registration--Continuance of registration--Delay in filing declaration in Form 12--Rejection of application without affording opportunity to be heard--Not valid-- Bharat Construction Company v. CIT (All) . . . 285

S. 234A --Advance tax--Interest--Waiver of interest--Grounds for waiver of interest under section 234A different from grounds for waiver of interest under sections 234B and 234C--Compensation received by assessee on surrender of tenancy rights--Position of tax liability not clear--Non-payment of advance tax--Interest liability fixed at Rs. 1 lakh under sections 234B and 234C--Notification No. 400/234/95/IT dated May 23, 1996-- Chief CIT v. Jimmichan M. Varicatt (Ker) . . . 338

S. 234B --Advance tax--Interest--Waiver of interest--Grounds for waiver of interest under section 234A different from grounds for waiver of interest under sections 234B and 234C--Compensation received by assessee on surrender of tenancy rights--Position of tax liability not clear--Non-payment of advance tax--Interest liability fixed at Rs. 1 lakh under sections 234B and 234C--Notification No. 400/234/95/IT dated May 23, 1996-- Chief CIT v. Jimmichan M. Varicatt (Ker) . . . 338

S. 234C --Advance tax--Interest--Waiver of interest--Grounds for waiver of interest under section 234A different from grounds for waiver of interest under sections 234B and 234C--Compensation received by assessee on surrender of tenancy rights--Position of tax liability not clear--Non-payment of advance tax--Interest liability fixed at Rs. 1 lakh under sections 234B and 234C--Notification No. 400/234/95/IT dated May 23, 1996-- Chief CIT v. Jimmichan M. Varicatt (Ker) . . . 338

S. 239 --Refund--Claim for refund--Claim withdrawn on ground beyond time specified under section 239--Assessing Officer failing to raise any issue with regard to plea under section 239 at appropriate stage--Commissioner (Appeals) passing order of refund on appeal--Revenue liable to make refund-- Hind Samachar Limited v. Union of India (P&H) . . . 266

----Return--Company--Rectification of mistakes--Return of company not signed by managing director but by person authorised by board resolution--Defect curable under section 292B-- Hind Samachar Limited v. Union of India (P&H) . . . 266

S. 240 --Refund--Claim for refund--Claim withdrawn on ground beyond time specified under section 239--Assessing Officer failing to raise any issue with regard to plea under section 239 at appropriate stage--Commissioner (Appeals) passing order of refund on appeal--Revenue liable to make refund-- Hind Samachar Limited v. Union of India (P&H) . . . 266

----Return--Company--Rectification of mistakes--Return of company not signed by managing director but by person authorised by board resolution--Defect curable under section 292B-- Hind Samachar Limited v. Union of India (P&H) . . . 266

S. 244A --Refund--Interest on refund--Assessee deducting and depositing TDS on time but filing TDS certificates during assessment proceedings--Interest under section 244A cannot be denied-- CIT v. Larsen and Toubro Ltd. (Bom) . . . 340

S. 260A --Appeal to High Court--Findings of fact by Tribunal--Findings cannot be set aside unless perverse-- CIT v. D. S. Promoters and Developers Pvt. Ltd.

(Delhi) . . . 291

----Appeal to High Court--Maintainability--Provision empowering CBDT to prescribe monetary limits for litigation by Revenue--Instruction of CBDT binding on Revenue--Tax effect less than prescribed in Instruction--Appeal barred-- CIT v. Kironmoy Roy Choudhury (Gauhati) . . . 316

S. 268A --Appeal to High Court--Maintainability--Provision empowering CBDT to prescribe monetary limits for litigation by Revenue--Instruction of CBDT binding on Revenue--Tax effect less than prescribed in Instruction--Appeal barred-- CIT v. Kironmoy Roy Choudhury (Gauhati) . . . 316

S. 292B --Return--Company--Rectification of mistakes--Return of company not signed by managing director but by person authorised by board resolution--Defect curable under section 292B-- Hind Samachar Limited v. Union of India

(P&H) . . . 266
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