Sunday, March 13, 2011

ITR Volume 330 Part 4 dated 24-01-2011

ITR Volume Part  dated -2011 
INCOME TAX REPORTS (ITR)

Volume 330 : Part 4 (Issue dated 24-1-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

SUPREME COURT

Advance tax --Interest--Company--Minimum alternate tax--Book profits--Interest can be charged on tax calculated on book profits--Income-tax Act, 1961, ss. 115JA, 234B--Circular No. 13 of 2001 dated November 9, 2001-- Joint CIT v. Rolta India Ltd.

. . . 470

HIGH COURTS

Business --Business income--Cessation of liability--Condition precedent for application of section 41--Mere change in name in books of account--No actual extinguishment of liability--Amount not taxable under section 41--Income-tax Act, 1961, s. 41-- CIT v. Auto Kashyap India P. Ltd. (Delhi) . . . 435

Charitable purposes --Charitable trust--Registration of trust--Registration does not automatically confer exemption--Assessee trust having imparting education as one of its objects--Assessee running educational institutions--Assessee entitled to registration under section 12A--Income-tax Act, 1961, s. 12A-- Director of Income-tax v. Garden City Educational Trust (Karn) . . . 480

Income --Mercantile system of accounting--Non-banking financial company--Interest on intercorporate deposit not received for more than six months--Assessee bound by Reserve Bank of India directions to treat deposit as non-performing asset--Interest does not accrue--Income-tax Act, 1961, ss. 5, 145(1)--Reserve Bank of India Act, 1934, s. 45Q--Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998-- CIT v. Vasisth Chay Vyapar Ltd. (Delhi) . . . 440

Income from undisclosed sources --Addition on account of deposits--Deposits not huge amounts--Explanation of assessee to be accepted--Income-tax Act, 1961-- Sunil Dua v. CIT (Delhi) . . . 413

----Jewellery--Assessee contending that jewellery inherited under a will--Genuineness of will not proved--Inclusion of jewellery proper--Income-tax Act, 1961-- Sunil Dua v. CIT (Delhi) . . . 413

Industrial undertaking --Special deduction--Brought forward unabsorbed loss and deficiencies of earlier years--To be adjusted first before granting special deduction--Income-tax Act, 1961, ss. 80HH, 80-I-- Modi Nagar Paper Mills Ltd. v. Deputy CIT

(All) . . . 405

----Special deduction--Interest on deposits--Not allowable--Miscellaneous income--Matter remanded--Income-tax Act, 1961, s. 80-IB-- CIT v. Dresser Rand India P. Ltd . (Bom) . . . 453

----Special deduction--Receipts from freight and insurance, packing charges, sales tax set off and gross service income--90 per cent. to be excluded from profits of business--Income-tax Act, 1961, s. 80HHC-- CIT v. Dresser Rand India P. Ltd.

(Bom) . . . 453

Interest on borrowed capital --Interest on loans obtained by assessee to settle liability of its sister concern--Interest paid to retain business premises of assessee--To be allowed--Income-tax Act, 1961, s. 36(1)(iii)-- CIT v. Neelkanth Synthetics and Chemicals P. Ltd. (Bom) . . . 463

Penalty --Compulsory audit of accounts--Law applicable--Requirement of filing audit report along with return--Only w.e.f. 1-7-1995--Failure for earlier years--Penalty cannot be imposed--Income-tax Act, 1961, ss. 44AB, 271B-- S. V. Pathak and Company v. N. C. Tewari, CIT (Bom) . . . 410

Precedent --Supreme Court--Decision of Delhi High Court in Ansal Properties and Industries Ltd. v. Appropriate Authority [1999] 236 ITR 793 not completely overruled in DLF Universal Ltd. v. Appropriate Authority [2000] 243 ITR 730 (SC)-- R. N. Soin and Sons P. Ltd. v. Appropriate Authority (Delhi) . . . 455

Purchase of immovable property by Central Government --Allocation of residential plot--Assignee of letter of allocation entering into agreement with builder for development of plot--Form 37-I filed after plot developed--Appropriate Authority--Valuation--Whether as on date of agreement with original allottee or with assignee or as on date of determination--Matter remanded--Income-tax Act, 1961, s. 269UD(1)--Constitution of India, art. 226-- R. N. Soin and Sons P. Ltd. v. Appropriate Authority

(Delhi) . . . 455

Reassessment --Notice--Notice issued on presumption that bogus payment made by assessee to a loss making company--Finding that company not a loss making company and payment made for services rendered to assessee--Payee showing the amount in its return and paying tax--Proceedings quashed--Income-tax Act, 1961, s. 147-- CIT v. Rainee Singh (Delhi) . . . 417

Search and seizure --Block assessment--Undisclosed income--Concurrent finding by authorities that amount disclosed in audit reports, balance-sheets and regular returns of income--Finding of fact--Cannot be interfered with--Income-tax Act, 1961, s. 132-- CIT v. Modern Engineering Works (Delhi) . . . 416

----Undisclosed income--Investment in hundis--Tribunal finding investments not belonging to assessee but to family members as well--Findings of fact--Income-tax Act, 1961-- CIT v. Chandulal Chhugani (Chhattisgarh) . . . 467

----Warrant--Additional Director competent to issue warrant of authorization--Notification No. S. O. 3862, dated November 6, 1979--Income-tax Act, 1961, s. 132-- Sunil Dua v. CIT (Delhi) . . . 413

Settlement of cases --Order passed by Settlement Commission is conclusive--Settlement of case after search operation--Order of Settlement Commission not challenged--No allegation of fraud or misrepresentation before Settlement Commission--Notice under section 142(1) based on material discovered during search operation--Notice not valid--Income-tax Act, 1961, ss. 245D, 245F, 245-I-- Smt. Neeru Agarwal v. Union of India (All) . . . 422

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Constitution of India :

Art. 226 --Purchase of immovable property by Central Government--Allocation of residential plot--Assignee of letter of allocation entering into agreement with builder for development of plot--Form 37-I filed after plot developed--Appropriate Authority--Valuation--Whether as on date of agreement with original allottee or with assignee or as on date of determination--Matter remanded-- R. N. Soin and Sons P. Ltd. v. Appropriate Authority (Delhi) . . . 455

Income-tax Act, 1961 :

S. 5 --Income--Mercantile system of accounting--Non-banking financial company--Interest on intercorporate deposit not received for more than six months--Assessee bound by Reserve Bank of India directions to treat deposit as non-performing asset--Interest does not accrue--Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998-- CIT v. Vasisth Chay Vyapar Ltd. (Delhi) . . . 440

S. 12A --Charitable purposes--Charitable trust--Registration of trust--Registration does not automatically confer exemption--Assessee trust having imparting education as one of its objects--Assessee running educational institutions--Assessee entitled to registration under section 12A-- Director of Income-tax v. Garden City Educational Trust (Karn) . . . 480

S. 36(1)(iii) --Interest on borrowed capital--Interest on loans obtained by assessee to settle liability of its sister concern--Interest paid to retain business premises of assessee--To be allowed-- CIT v. Neelkanth Synthetics and Chemicals P. Ltd.

(Bom) . . . 463

S. 41 --Business--Business income--Cessation of liability--Condition precedent for application of section 41--Mere change in name in books of account--No actual extinguishment of liability--Amount not taxable under section 41-- CIT v. Auto Kashyap India P. Ltd. (Delhi) . . . 435

S. 44AB --Penalty--Compulsory audit of accounts--Law applicable--Requirement of filing audit report along with return--Only w.e.f. 1-7-1995--Failure for earlier years--Penalty cannot be imposed-- S. V. Pathak and Company v. N. C. Tewari, CIT

(Bom) . . . 410

S. 80HH --Industrial undertaking--Special deduction--Brought forward unabsorbed loss and deficiencies of earlier years--To be adjusted first before granting special deduction-- Modi Nagar Paper Mills Ltd. v. Deputy CIT (All) . . . 405

S. 80HHC --Industrial undertaking--Special deduction--Receipts from freight and insurance, packing charges, sales tax set off and gross service income--90 per cent. to be excluded from profits of business-- CIT v. Dresser Rand India P. Ltd.

(Bom) . . . 453

S. 80-I --Industrial undertaking--Special deduction--Brought forward unabsorbed loss and deficiencies of earlier years--To be adjusted first before granting special deduction-- Modi Nagar Paper Mills Ltd. v. Deputy CIT (All) . . . 405

S. 80-IB --Industrial undertaking--Special deduction--Interest on deposits--Not allowable--Miscellaneous income--Matter remanded-- CIT v. Dresser Rand India P. Ltd . (Bom) . . . 453

S. 115JA --Advance tax--Interest--Company--Minimum alternate tax--Book profits--Interest can be charged on tax calculated on book profits--Circular No. 13 of 2001 dated November 9, 2001-- Joint CIT v. Rolta India Ltd. (SC) . . . 470

S. 132 --Search and seizure--Block assessment--Undisclosed income--Concurrent finding by authorities that amount disclosed in audit reports, balance-sheets and regular returns of income--Finding of fact--Cannot be interfered with-- CIT v. Modern Engineering Works (Delhi) . . . 416

----Search and seizure--Warrant--Additional Director competent to issue warrant of authorization--Notification No. S. O. 3862, dated November 6, 1979-- Sunil Dua v. CIT

(Delhi) . . . 413

S. 145(1) --Income--Mercantile system of accounting--Non-banking financial company--Interest on intercorporate deposit not received for more than six months--Assessee bound by Reserve Bank of India directions to treat deposit as non-performing asset--Interest does not accrue--Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998-- CIT v. Vasisth Chay Vyapar Ltd. (Delhi) . . . 440

S. 147 --Reassessment--Notice--Notice issued on presumption that bogus payment made by assessee to a loss making company--Finding that company not a loss making company and payment made for services rendered to assessee--Payee showing the amount in its return and paying tax--Proceedings quashed-- CIT v. Rainee Singh

(Delhi) . . . 417

S. 234B --Advance tax--Interest--Company--Minimum alternate tax--Book profits--Interest can be charged on tax calculated on book profits--Circular No. 13 of 2001 dated November 9, 2001-- Joint CIT v. Rolta India Ltd. (SC) . . . 470

S. 245D --Settlement of cases--Order passed by Settlement Commission is conclusive--Settlement of case after search operation--Order of Settlement Commission not challenged--No allegation of fraud or misrepresentation before Settlement Commission--Notice under section 142(1) based on material discovered during search operation--Notice not valid-- Smt. Neeru Agarwal v. Union of India

(All) . . . 422

S. 245F --Settlement of cases--Order passed by Settlement Commission is conclusive--Settlement of case after search operation--Order of Settlement Commission not challenged--No allegation of fraud or misrepresentation before Settlement Commission--Notice under section 142(1) based on material discovered during search operation--Notice not valid-- Smt. Neeru Agarwal v. Union of India

(All) . . . 422

S. 245-I --Settlement of cases--Order passed by Settlement Commission is conclusive--Settlement of case after search operation--Order of Settlement Commission not challenged--No allegation of fraud or misrepresentation before Settlement Commission--Notice under section 142(1) based on material discovered during search operation--Notice not valid-- Smt. Neeru Agarwal v. Union of India

(All) . . . 422

S. 269UD(1) --Purchase of immovable property by Central Government--Allocation of residential plot--Assignee of letter of allocation entering into agreement with builder for development of plot--Form 37-I filed after plot developed--Appropriate Authority--Valuation--Whether as on date of agreement with original allottee or with assignee or as on date of determination--Matter remanded-- R. N. Soin and Sons P. Ltd. v. Appropriate Authority (Delhi) . . . 455

S. 271B --Penalty--Compulsory audit of accounts--Law applicable--Requirement of filing audit report along with return--Only w.e.f. 1-7-1995--Failure for earlier years--Penalty cannot be imposed-- S. V. Pathak and Company v. N. C. Tewari, CIT

(Bom) . . . 410

Reserve Bank of India Act, 1934 :

S. 45Q --Income--Mercantile system of accounting--Non-banking financial company--Interest on intercorporate deposit not received for more than six months--Assessee bound by Reserve Bank of India directions to treat deposit as non-performing asset--Interest does not accrue--Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998-- CIT v. Vasisth Chay Vyapar Ltd. (Delhi) . . . 440__._,_.___

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