CASE LAWS....

HIGH COURTS
• Capital gains or business income --Consideration received on transfer of rights of trade mark, brands, copyrights in journals and publications--Business given up distinct from business continued-- Consideration not arising out of business but is long-term capital gains--Section 28(va) does not apply-- Income-tax Act, 1961, s. 28(va)-- CIT v. Mediworld Publications Pvt. Ltd. (Delhi) . . . 178

• Income from other sources --Compulsory acquisition of agricultural land--Enhanced compensation-- Interest on delayed payment--Claim to spread over on accrual basis but interest for two years alone disclosed--Inference of cash system of accounting--Interest taxable in year of receipt--Land Acquisition Act, 1894, s. 34--Income-tax Act, 1961, s. 145-- CIT v. Karambir Singh (P&H) . . . 159

• Income from undisclosed sources --Assessee failing to prove capacity of creditor and genuineness of transaction--Finding that transaction bogus and sustaining addition--Disallowance of excess claim on account of loss of bardana--Findings of fact--Income-tax Act, 1961-- Papneja Traders v. CIT (P&H) 172

• Penalty --Concealment of income--Search and seizure--Assessee making disclosure statement under section 132(4)--Time for filing return not expired--Income included in return and tax paid--Not a case of concealment of particulars of income--Penalty cannot be imposed--Income-tax Act, 1961, s. 271(1) (c), Expln. 5-- CIT v. Bhandari Silk Store (P&H) . . . 153

• Reassessment --Notice after four years--No failure to disclose material facts necessary for assessment-- Deduction allowed in original assessment after considering facts--Reassessment proceedings after four years to disallow deduction on ground it was capital expenditure--Not valid--Income-tax Act, 1961, ss. 147, 148-- Parle Sales and Services P. Ltd. v. ITO (Guj) . . . 203

• Search and seizure --Block assessment--Assessment of third person--Condition precedent-- Satisfaction of Assessing Officer of person searched that undisclosed income discovered during search belonged to third person--Meaning of satisfaction--Letter by Assessing Officer of person searched that assessee acted as mediator in bogus accommodation transactions--No evidence that assessee had given cash to person searched or had received commission--Condition not fulfilled-- Block assessment of assessee--Not valid--Income-tax Act, 1961, ss. 158B, 158BD-- CIT v. Radhey Shyam Bansal (Delhi) . . . 217

• -Block assessment--Undisclosed income--Addition permissible only in respect of material discovered during search--Estimate of expenditure on house by Valuation Officer--No material recovered in search showing expenditure beyond that recorded in books--Addition solely on basis of estimate-- Not valid--Income-tax Act, 1961, s. 158BD-- CIT v. Kantilal B. Kansara (HUF) (Guj) . . . 187

• -Block assessment--Undisclosed income--Statement under section 132(4)--Admissibility--Addition based on confessional statement made by assessee and counter-signature by his sons--Failure by assessee to prove that confession was as a result of intimidation, duress and coercion--No evidence that confession made as a result of mistaken belief of law or facts--Addition justified--Income-tax Act, 1961, s. 132(4)-- Asst. CIT v. Hukum Chand Jain (Chhattisgarh) . . . 238

• Non-resident --Prospecting for or extraction of mineral oils--Services in connection therewith--Special provisions for computation of income--Tax resident of Norway providing sea logistics services for ONGC--Not technical services but transportation--Fall within purview of special provisions--But under DTAA notional income restricted to 7.5 per cent. of receipts and tax limited to 50 per cent. of tax imposed by India--No deduction for service tax--Income-tax Act, 1961, ss. 9(1)(vii), 44BB--Finance Act, 1994, s. 68--Double Taxation Avoidance Agreement between India and Norway, art. 23(4)-- Siem Offshore Inc ., In re . . . 207

• -Taxability in India--Deduction of tax at source--Employees of non-resident company deputed to Indian subsidiary for performing managerial functions--Salary and benefits paid to expatriate employees by non-resident employer and reimbursed by Indian company--Are fees for included services accruing to non-resident company--Requirement of "making available" technical know-how not applicable-- Tax deductible at source--Income-tax Act, 1961, ss. 9(1)(vii), Expln. 2, 195--Double Taxation Avoidance Agreement between India and the U.S.A., art. 12(4)(b)-- Verizon Data Services India Private Ltd ., In re .

• Bad debt --Deduction--Condition precedent--Writing off in accounting year--Resolution for writing off in subsequent year not relevant--Amount deductible as bad debt--Income-tax Act, 1961, s. 36-- Sashak Noble Metals Ltd. v. ITO (Mumbai) . . . 335

• Business income --Remission or cessation of trading liability--Transfer of loan from sister-concern--No trading transaction--Creditor not acknowledging debt--Amount not assessable under section 41-- Outstanding liability due to trading transaction becoming subsequently non-payable--Section 41 applicable-- Amount to be added to business income of assessee--Income-tax Act, 1961, s. 41-- Sashak Noble Metals Ltd. v. ITO (Mumbai) . . . 335

• Capital gains --Computation--Full value of consideration--Reference to Valuation Officer under section 142A for valuation of market value--Not permissible--No material to show assessee had received any sum in excess of that shown in sale deed--No material to show whether value shown in sale deed was higher or lower than stamp value--Direction to adopt value in accordance with section 50C--Incometax Act, 1961, ss. 48, 50C, 142A-- Sumit Khurana v. Asst. CIT (Delhi) . . 377

• Charitable purpose --Charitable trust--Exemption--Registration of trust--Authorities to satisfy themselves about genuineness of activities of trust but not nature of activity by which income derived by trust-- Trust formed to run hospital earnings from which to be used for charitable purpose--Assessee entitled to registration--Income-tax Act, 1961, ss. 12A, 12AA-- Guru Harkishan Medical Trust v. Director of Income- tax (Exemptions) (Delhi) . . . 361

• Co-operative society --Special deduction--Interest received from credit facilities to members--Assessee not a credit society-- Not entitled to deduction--Income-tax Act, 1961, s. 80P(2)(a)(i)-- ITO v. Modern Engineers Construction Co-op. Society (Chennai) . . . 393

• Penalty --Concealment of income--Additions made by Assessing Officer on account of disallowance of expenditure--No material to show concealment by assessee--Penalty not imposable--Income-tax Act, 1961, s. 271(1)(c)-- Deputy CIT v. Eagle Iron and Metal Industries Ltd. (Mumbai) . . . 384

• -Production of cinematograph films--Statement to be filed in Form 52A--Failure to file by due dates-- Explanation that assessee under bona fide belief that form to be filed with return--Commissioner (Appeals) finding reasonable cause for delay and reducing penalty--Order attaining finality--Order of Commissioner (Appeals) confirmed--Income-tax Act, 1961, s. 272A(2)(c)-- Deputy CIT v. Dasari Narayana Rao (Chennai) . . . 403

• Search and seizure --Block assessment--Assessment set aside by Tribunal with direction to decide afresh on basis of evidence found during course of search--Commissioner (Appeals) to follow directions issued by Tribunal--Income-tax Act, 1961, ss. 132(4), 158BC-- Krishna Terine P. Ltd. v. Asst. CIT (Ahmedabad) . . . 405

• -Block assessment--Undisclosed income--Addition on unaccounted investment --No evidence found during search indicating assessee made investments--Addition to be deleted--Income-tax Act, 1961, s. 158BC-- Krishna Terine P. Ltd. v. Asst. CIT (Ahmedabad) . . . 405

• S. 12AA --Charitable purpose--Charitable trust--Exemption--Registration of trust--Authorities to satisfy themselves about genuineness of activities of trust but not nature of activity by which income derived by trust--Trust formed to run hospital earnings from which to be used for charitable purpose-- Assessee entitled to registration-- Guru Harkishan Medical Trust v. Director of Income-tax (Exemptions) (Delhi) . . . 361

• S. 41 --Business income--Remission or cessation of trading liability--Transfer of loan from sister concern-- No trading transaction--Creditor not acknowledging debt--Amount not assessable under section 41--Outstanding liability due to trading transaction becoming subsequently non-payable-- Section 41 applicable--Amount to be added to business income of assessee-- Sashak Noble Metals Ltd. v. ITO (Mumbai) . . . 335 HIGH COURTS

• Company Law Board --Jurisdiction--Rectification of register--Transfer of shares--Only Company Law Board has jurisdiction to decide issues involving title to shares--Board can direct parties to approach civil court if dispute regarding civil rights or title involved--Civil court does not have jurisdiction otherwise-- Companies Act, 1956, ss. 10, 155-- Vishnu Manglani v. Reliance Industries (Delhi) . . . 524