Wednesday, June 29, 2011

ITR (Trib) Volume 10 : Part 1 Issue dated : 04-07-2011

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

Volume 10 : Part 1 (Issue dated : 04-07-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Appeal to Commissioner (Appeals) --Condonation of delay--Penalty--Assessee passing through difficulties in managing her affairs after death of her husband--Reasonable cause--Commissioner (Appeals) directed to condone delay and decide appeal on merits--Income-tax Act, 1961, s. 271(1)(c)-- Smt. Seema De Sarkar v. ITO (Kolkata) . . . 78

Block assessment --Notice--Assessment of third person under section 158BD—Satisfaction regarding undisclosed income of third person--Has to be recorded prior to completion of assessment of person searched under section 158BC--Income-tax Act, 1961, s. 158BD-- Jayant S. Jain (HUF) v. Deputy CIT (Mumbai) . . . 68

Cash credits --Condition precedent for treatment as income of assessee--Existence of books of account--Bank pass book, profit and loss account and balance-sheet would not constitute books of account--Amounts claimed to be gifts--Assessee not maintaining books of account--Amounts received by account payee cheques--Copies of income-tax returns of donors furnished--No notice to donors--No evidence that gifts were not genuine--Addition of gifts under section 68--Not valid--Income-tax Act, 1961, s. 68-- Smt. Madhu Raitani v. Asst. CIT (Gauhati) . . . 91

Income --Accrual--Sale of land - - Earnest money received for transfer of land--Transaction not taking place in year--Earnest money received not be treated as income in year under consideration--Income-tax Act, 1961-- CIT Deputy v. Shiv Sai Developers (Mumbai) . . . 80

Interest on borrowed capital --Whether assessee holding shares only for controlling shares--Matter remanded--No case for disallowance under section 14A considered in earlier round of proceedings--Provisions of section 14A cannot be invoked in remand--Income-tax Act, 1961, s. 36(1)(iii)-- Questar Investments Ltd. v. Asst. CIT (Mumbai) . . . 73

Reassessment --Validity--Double taxation avoidance--No rule that assessee should pay tax in at least one jurisdiction to be eligible for relief--Assessee having permanent establishment in Malaysia--Income earned in Malaysia taxable there under provisions of Double Taxation Avoidance Agreement between India and Malaysia--No tax actually levied because amount had not been brought into Malaysia--Amount not taxable in India--Reassessment proceedings to tax amount in India--Not valid--Income-tax Act, 1961, s. 147--Double Taxation Avoidance Agreement between India and Malaysia, art. 5 -- Sivagami Holdings P. Ltd. v. Asst. CIT (Chennai) . . . 48

Search and seizure --Block assessment--Undisclosed income--General principles—Transactions recorded in account books can be subject-matter of additions in block assessment--Post-search enquiries can be conducted to determine undisclosed income --Provisions of sections 68, 69, 69A, 69B and 69C applicable--Assessee stock broker--Client mismatch in transactions recorded in books--No evidence that transactions were genuine--Income embedded in transactions includible in block assessment--Brokerage deductible--Income-tax Act, 1961, ss. 68, 69, 69A, 69B, 69C, 158B(b), 158BB-- Triumph Securities Ltd. v. Deputy CIT [SB] (Mumbai) . . . 1

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Double Taxation Avoidance Agreement between India and Malaysia :

Art. 5 --Reassessment--Validity--Double taxation avoidance--No rule that assessee should pay tax in at least one jurisdiction to be eligible for relief--Assessee having permanent establishment in Malaysia--Income earned in Malaysia taxable there under provisions of Double Taxation Avoidance Agreement between India and Malaysia--No tax actually levied because amount had not been brought into Malaysia--Amount not taxable in India--Reassessment proceedings to tax amount in India--Not valid-- Sivagami Holdings P. Ltd. v. Asst. CIT (Chennai) . . . 48

Income-tax Act, 1961 :

S. 36(1)(iii) --Interest on borrowed capital--Whether assessee holding shares only for controlling shares--Matter remanded--No case for disallowance under section 14A considered in earlier round of proceedings--Provisions of section 14A cannot be invoked in remand-- Questar Investments Ltd. v. Asst. CIT (Mumbai) . . . 73

S. 68 --Cash credits--Condition precedent for treatment as income of assessee--Existence of books of account--Bank pass book, profit and loss account and balance-sheet would not constitute books of account--Amounts claimed to be gifts--Assessee not maintaining books of account--Amounts received by account payee cheques--Copies of income-tax returns of donors furnished--No notice to donors--No evidence that gifts were not genuine--Addition of gifts under section 68--Not valid-- Smt. Madhu Raitani v. Asst. CI T (Gauhati) . . . 91

Search and seizure--Block assessment--Undisclosed income--General principles--Transactions recorded in account books can be subject-matter of additions in block assessment--Post-search enquiries can be conducted to determine undisclosed income --Provisions of sections 68, 69, 69A, 69B and 69C applicable--Assessee stock broker--Client mismatch in transactions recorded in books--No evidence that transactions were genuine--Income embedded in transactions includible in block assessment--Brokerage deductible-- Triumph Securities Ltd. v. Deputy CIT [SB] (Mumbai) . . . 1

S. 69 --Search and seizure--Block assessment--Undisclosed income--General principles--Transactions recorded in account books can be subject-matter of additions in block assessment--Post-search enquiries can be conducted to determine undisclosed income--Provisions of sections 68, 69, 69A, 69B and 69C applicable--Assessee stock broker--Client mismatch in transactions recorded in books--No evidence that transactions were genuine--Income embedded in transactions includible in block assessment--Brokerage deductible-- Triumph Securities Ltd. v. Deputy CIT [SB] (Mumbai) . . . 1

S. 69A --Search and seizure--Block assessment--Undisclosed income--General principles--Transactions recorded in account books can be subject-matter of additions in block assessment--Post-search enquiries can be conducted to determine undisclosed income--Provisions of sections 68, 69, 69A, 69B and 69C applicable--Assessee stock broker--Client mis-match in transactions recorded in books--No evidence that transactions were genuine--Income embedded in transactions includible in block assessment--Brokerage deductible-- Triumph Securities Ltd. v. Deputy CIT [SB] (Mumbai) . . . 1

S. 69B --Search and seizure--Block assessment--Undisclosed income--General principles--Transactions recorded in account books can be subject-matter of additions in block assessment--Post-search enquiries can be conducted to determine undisclosed income--Provisions of sections 68, 69, 69A, 69B and 69C applicable--Assessee stock broker--Client mismatch in transactions recorded in books--No evidence that transactions were genuine--Income embedded in transactions includible in block assessment--Brokerage deductible-- Triumph Securities Ltd. v. Deputy CIT [SB] (Mumbai) . . . 1

S. 69C --Search and seizure--Block assessment--Undisclosed income--General principles--Transactions recorded in account books can be subject-matter of additions in block assessment--Post-search enquiries can be conducted to determine undisclosed income--Provisions of sections 68, 69, 69A, 69B and 69C applicable--Assessee stock broker--Client mismatch in transactions recorded in books--No evidence that transactions were genuine--Income embedded in transactions includible in block assessment--Brokerage deductible-- Triumph Securities Ltd. v. Deputy CIT [SB] (Mumbai) . . . 1

S. 147 --Reassessment--Validity--Double taxation avoidance--No rule that assessee should pay tax in at least one jurisdiction to be eligible for relief--Assessee having permanent establishment in Malaysia--Income earned in Malaysia taxable there under provisions of Double Taxation Avoidance Agreement between India and Malaysia--No tax actually levied because amount had not been brought into Malaysia--Amount not taxable in India--Reassessment proceedings to tax amount in India--Not valid-- Sivagami Holdings P. Ltd. v. Asst. CIT (Chennai) . . . 48

S. 158B(b) --Search and seizure--Block assessment--Undisclosed income--General principles--Transactions recorded in account books can be subject-matter of additions in block assessment--Post-search enquiries can be conducted to determine undisclosed income--Provisions of sections 68, 69, 69A, 69B and 69C applicable--Assessee stock broker--Client mismatch in transactions recorded in books--No evidence that transactions were genuine--Income embedded in transactions includible in block assessment--Brokerage deductible-- Triumph Securities Ltd. v. Deputy CIT [SB] (Mumbai) . . . 1

S. 158BB --Search and seizure--Block assessment--Undisclosed income--General principles--Transactions recorded in account books can be subject-matter of additions in block assessment--Post-search enquiries can be conducted to determine undisclosed income--Provisions of sections 68, 69, 69A, 69B and 69C applicable--Assessee stock broker--Client mismatch in transactions recorded in books--No evidence that transactions were genuine--Income embedded in transactions includible in block assessment--Brokerage deductible-- Triumph Securities Ltd. v. Deputy CIT [SB] (Mumbai) . . . 1

S. 158BD --Block assessment--Notice--Assessment of third person under section 158BD--Satisfaction regarding undisclosed income of third person--Has to be recorded prior to completion of assessment of person searched under section 158BC-- Jayant S. Jain (HUF) v. Deputy CIT (Mumbai) . . . 68

S. 271(1)(c) --Appeal to Commissioner (Appeals)--Condonation of delay--Penalty--Assessee passing through difficulties in managing her affairs after death of her husband--Reasonable cause--Commissioner (Appeals) directed to condone delay and decide appeal on merits--Smt. Seema De Sarkar v. ITO (Kolkata) . . . 78

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