Thursday, November 17, 2011

ITR (TRIB) Volume 12 : Part 4 (Issue dated : 21-11-2011)


ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))
Volume 12 : Part 4 (Issue dated : 21-11-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

--> Bad debts --Writing off debit balances of creditors--Deduction allowable--Income-tax Act, 1961, s. 36-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

--> Business expenditure --Disallowance--Excessive payment of royalty--Disallowance on ground that no change in know-how provided and products manufactured--Not reason to enhance payment--Matter remanded--Income-tax Act, 1961, s. 40A(2)(b)-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

--> Expenditure on foreign training of director's son--No evidence that expenditure for benefit of business of assessee-company--Expenditure not deductible--Income-tax Act, 1961, s. 37-- Vishesh Entertainment Ltd. v. Asst. CIT (Mumbai) . . . 337

--> Repairs expenses to plant and machinery--No opportunity to furnish bills--Matter remanded--Income-tax Act, 1961-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

--> Capital or revenue expenditure --Expenditure on know-how for manufacture--Know-how not owned by assessee but by collaborator--Is revenue expenditure--Income-tax Act, 1961-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

--> Expenditure on licence fee--Revenue expenditure--Income-tax Act, 1961-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

--> Charitable purpose --Education institution--Voluntary donations permissible--No proof that assessee collected capitation fee--Not violation of section 13(1)(c)--Assessee eligible for exemption under sections 11 and 12--Income-tax Act, 1961, ss. 11, 13(1)(c), 164(1)-- Saveetha Institute of Medical and Technical Sciences v. Asst. CIT (Chennai) . . . 376

--> Current repairs --Scope of section 31--Expenditure on repairs of building--Allowable as revenue expenditure--Income-tax Act, 1961, s. 31-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

--> Income from undisclosed sources --Document alleged to evidence sale of land by assessee--Proof of possession remaining with assessee, cancellation of transaction and return of advance--Addition to be deleted--Income-tax Act, 1961-- Mansi Builders Ltd. v. Asst. CIT (Ahmedabad) . . . 358

--> Industrial undertaking --Special deduction under section 80-IA--Computation--Electricity generated by assessee collects by Electricity Board and releases to assessee whenever required--Assessee neither selling nor buying as far as captive consumption of power is concerned--Assessee paid consumption of power more than contribution--Market value to be taken for computation--Income-tax Act, 1961, s. 80-IA-- Sri Velayudhaswamy Spinning Mills P. Ltd. v. Deputy CIT (Chennai) . . . 353

--> Special deduction--Condition precedent--Assessee a private telephone exchange operating as agent of BSNL--Purely commercial venture not involving development of infrastructure--Not entitled to special deduction--Income-tax Act, 1961, s. 80-IA(4)(ii).-- ITO v. Smt. A. Jayalakshmi (Chennai) . . . 371

--> International transactions --Arm's length price--Transfer pricing--Import of coal made by assessee from its associate enterprise over-invoiced--Assessee not furnishing any comparable data--Addition proper--Income-tax Act, 1961, s. 92CA(3)-- Coastal Energy P. Ltd. v. Asst. CIT (Chennai) . . . 347

--> Penalty --Concealment of income--Claim for deduction under section 80-IB--Disallowance of certain expenses--Penalty on account of notional reallocation of expenditure between two units--Reallocation a debatable issue--Addition on account of interest from fixed deposit--Finding by Tribunal that amount incorrectly claimed by assessee --Not concealment of income--Penalty cannot be imposed--Income-tax Act, 1961, ss. 80-IB, 271(1)(c)-- ITO v. Shilpa Filaments P. Ltd. (Ahmedabad) . . . 324

--> Concealment of income--Failure to deduct tax at source--Assessee disclosing amount in accounts--Not case of concealment of income--Penalty to be deleted--Income-tax Act, 1961, ss. 40(a)(ia), 271(1)(c)-- New Horizon India Ltd. v. Deputy CIT (Delhi) . . . 332

--> Refund --Interest on tax refund--To be taxed--Income-tax Act, 1961-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

--> Search and seizure --Assessment--Addition based on statement recorded under section 132(4)--Not proper--Addition to be deleted--Income-tax Act, 1961, s. 132(4)--Circular No. 286/2/2003-IT-- Saveetha Institute of Medical and Technical Sciences v. Asst. CIT (Chennai) . . . 376

--> Seizure of cash--Cash established to be fees paid by students--Addition to be deleted--Income-tax Act, 1961-- Saveetha Institute of Medical and Technical Sciences v. Asst. CIT (Chennai) . . . 376

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961 :

S. 11 --Charitable purpose--Education institution--Voluntary donations permissible--No proof that assessee collected capitation fee--Not violation of section 13(1)(c)--Assessee eligible for exemption under sections 11 and 12-- Saveetha Institute of Medical and Technical Sciences v. Asst. CIT (Chennai) . . . 376

S. 13(1)(c) --Charitable purpose--Education institution--Voluntary donations permissible--No proof that assessee collected capitation fee--Not violation of section 13(1)(c)--Assessee eligible for exemption under sections 11 and 12-- Saveetha Institute of Medical and Technical Sciences v. Asst. CIT (Chennai) . . . 376

S. 31 --Current repairs--Scope of section 31--Expenditure on repairs of building--Allowable as revenue expenditure-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

S. 36 --Bad debts--Writing off debit balances of creditors--Deduction allowable-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

S. 37 --Business expenditure--Expenditure on foreign training of director's son--No evidence that expenditure for benefit of business of assessee-company--Expenditure not deductible-- Vishesh Entertainment Ltd. v. Asst. CIT (Mumbai) . . . 337

S. 40(a)(ia) --Penalty--Concealment of income--Failure to deduct tax at source--Assessee disclosing amount in accounts--Not case of concealment of income--Penalty to be deleted-- New Horizon India Ltd. v. Deputy CIT (Delhi) . . . 332

S. 40A(2)(b) --Business expenditure--Disallowance--Excessive payment of royalty--Disallowance on ground that no change in know-how provided and products manufactured--Not reason to enhance payment--Matter remanded-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

S. 80-IA --Industrial undertaking--Special deduction under section 80-IA--Computation--Electricity generated by assessee collects by Electricity Board and releases to assessee whenever required--Assessee neither selling nor buying as far as captive consumption of power is concerned--Assessee paid consumption of power more than contribution--Market value to be taken for computation-- Sri Velayudhaswamy Spinning Mills P. Ltd. v. Deputy CIT (Chennai) . . . 353

S. 80-IA(4)(ii) --Industrial undertaking--Special deduction--Condition precedent--Assessee a private telephone exchange operating as agent of BSNL--Purely commercial venture not involving development of infrastructure--Not entitled to special deduction-- ITO v. Smt. A. Jayalakshmi (Chennai) . . . 371

S. 80-IB --Penalty--Concealment of income--Claim for deduction under section 80-IB--Disallowance of certain expenses--Penalty on account of notional reallocation of expenditure between two units--Reallocation a debatable issue--Addition on account of interest from fixed deposit--Finding by Tribunal that amount incorrectly claimed by assessee--Not concealment of income--Penalty cannot be imposed-- ITO v. Shilpa Filaments P. Ltd. (Ahmedabad) . . . 324

S. 92CA(3) --International transactions--Arm's length price--Transfer pricing--Import of coal made by assessee from its associate enterprise over-invoiced--Assessee not furnishing any comparable data--Addition proper-- Coastal Energy P. Ltd. v. Asst. CIT (Chennai) . . . 347

S. 132(4) --Search and seizure--Assessment--Addition based on statement recorded under section 132(4)--Not proper--Addition to be deleted--Circular No. 286/2/2003-IT -- Saveetha Institute of Medical and Technical Sciences v. Asst. CIT (Chennai) . . . 376

S. 164(1) --Charitable purpose--Education institution--Voluntary donations permissible--No proof that assessee collected capitation fee--Not violation of section 13(1)(c) --Assessee eligible for exemption under sections 11 and 12-- Saveetha Institute of Medical and Technical Sciences v. Asst. CIT (Chennai) . . . 376

S. 271(1)(c) --Penalty--Concealment of income--Claim for deduction under section 80-IB--Disallowance of certain expenses--Penalty on account of notional reallocation of expenditure between two units--Reallocation a debatable issue--Addition on account of interest from fixed deposit--Finding by Tribunal that amount incorrectly claimed by assessee--Not concealment of income--Penalty cannot be imposed-- ITO v. Shilpa Filaments P. Ltd. (Ahmedabad) . . . 324

--> Penalty--Concealment of income--Failure to deduct tax at source--Assessee disclosing amount in accounts--Not case of concealment of income--Penalty to be deleted--New Horizon India Ltd. v. Deputy CIT (Delhi) . . . 332

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