Thursday, November 10, 2011

ITR Volume 338 : Part 4 (Issue dated 7-11-2011)


INCOME TAX REPORTS (ITR)
Volume 338 : Part 4 (Issue dated 7-11-2011)
SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Advance tax :- --Interest--Company--Book profits--Interest under sections 234B and 234C to be paid on failure to pay advance tax in respect of tax payable under section 115JA/115JB--Income-tax Act, 1961, ss. 115JA, 115JB, 234B, 234C-- CIT v. Steel Steips Leasing Ltd. (P&H) . . . 455

Bad debts :- --Non-banking financial company--Amount advanced in ordinary course of business--To be allowed--Income-tax Act, 1961, s. 36(1)(vii), (2)-- All Grow Finance and Investment P. Ltd. v. CIT (Delhi) . . . 496

Business expenditure :- --Interest on borrowed capital--Assessee investing borrowed funds in equity capital of subsidiary company--Expenditure incurred for business purposes--To be allowed--Income-tax Act, 1961, s. 36(1)(iii)-- CIT v. Tulip Star Hotels Ltd . (Delhi) . . . 482

Export :- --Special deduction--Export--Meaning of--Supply of food and beverages to foreign airlines leaving India--Articles escorted by Customs Officer--RBI certifying that amount received deemed to be convertible foreign exchange--Assessee entitled to special deduction under section 80HHC--Income-tax Act, 1961, s. 80HHC-- EIH Ltd . v. CIT (Cal) . . . 503

Income from other sources :- --Business income--Income from letting out factory--No proof that assessee only let it out temporarily and intended to resume its business--Income to be treated as income from other sources--Income-tax Act, 1961-- CIT v. Venkateswara Agro Chemicals and Minerals P. Ltd. (Mad) . . . 428

Income-tax :- --General principles--Decision regarding fundamental nature of transactions continuing for a number of years--Change in view for a particular year without adequate reason--Not justified-- CIT v. Escorts Ltd . (Delhi) . . . 435

Refund :- --Interest on refund--Date from which interest becomes due--Effect of section 244A and Circular No. 549, dated 31-10-1989--Excess amount paid on self-assessment--Excess to be refunded with interest from date of payment of such tax till date of refund--Income-tax Act, 1961, s. 244A--Circular No. 549, dated 31-10-1989-- CIT v. Vijaya Bank (Karn) . . . 489

Revision :- --Transactions of purchase and sale of units for many years--Transactions considered to be genuine in prior and subsequent assessment years--Revision proceedings on ground that transactions pertaining to relevant assessment year were speculative--Not permissible--Income-tax Act, 1961, s. 263-- CIT v. Escorts Ltd .(Delhi) . . . 435

Search and seizure :- --Block assessment--Undisclosed income--Effect of Remittances of Foreign Exchange and Investment in Foreign Exchange Bonds (Immunities and Exemptions) Act, 1991--Bonds entitled to immunity from enquiry--Receipt of bonds as gifts--Value of bonds not assessable as undisclosed income--Income-tax Act, 1961, s. 158BC--Remittances of Foreign Exchange and Investment in Foreign Exchange Bonds (Immunities and Exemptions) Act, 1991-- CIT v. Smt. Usha Omer (All) . . . 448

:- ----Validity--Condition precedent for search--Information giving rise to belief that income would not be disclosed--Inquiries and material showing documents would not be produced--Search valid--Notice under sections 131(1A) and 133(6) subsequent to search would not invalidate search--Allegation that search proceedings were mala fide--Burden of proof on assessee to prove allegation--Income-tax Act, 1961, ss. 131, 132, 133-- Neesa Leisure Ltd . v. Union of India through Secretary (Guj) . . . 460

Unexplained investment :- --Investment in properties--No evidence of understatement of consideration--Addition to income based solely on report of District Valuation Officer--Not valid--Income-tax Act, 1961, s. 69B-- CIT v. Puneet Sabharwal (Delhi) . . . 485

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

S. 36(1)(iii) :- --Business expenditure--Interest on borrowed capital--Assessee investing borrowed funds in equity capital of subsidiary company--Expenditure incurred for business purposes--To be allowed-- CIT v. Tulip Star Hotels Ltd .(Delhi) . . . 482

S. 36(1)(vii) :- --Bad debts--Non-banking financial company--Amount advanced in ordinary course of business--To be allowed-- All Grow Finance and Investment P. Ltd. v. CIT (Delhi) . . . 496

S. 36(2) :- --Bad debts--Non-banking financial company--Amount advanced in ordinary course of business--To be allowed-- All Grow Finance and Investment P. Ltd. v. CIT (Delhi) . . . 496

S. 69B :- --Unexplained investment--Investment in properties--No evidence of understatement of consideration--Addition to income based solely on report of District Valuation Officer--Not valid-- CIT v. Puneet Sabharwal (Delhi) . . . 485

S. 80HHC :- --Export--Special deduction--Export--Meaning of--Supply of food and beverages to foreign airlines leaving India--Articles escorted by Customs Officer--RBI certifying that amount received deemed to be convertible foreign exchange--Assessee entitled to special deduction under section 80HHC-- EIH Ltd . v. CIT (Cal) . . . 503

S. 115JA :- --Advance tax--Interest--Company--Book profits--Interest under sections 234B and 234C to be paid on failure to pay advance tax in respect of tax payable under section 115JA/115JB-- CIT v. Steel Steips Leasing Ltd. (P&H) . . . 455

S. 115JB :- --Advance tax--Interest--Company--Book profits--Interest under sections 234B and 234C to be paid on failure to pay advance tax in respect of tax payable under section 115JA/115JB-- CIT v. Steel Steips Leasing Ltd. (P&H) . . . 455

S. 131 :- --Search and seizure--Validity--Condition precedent for search--Information giving rise to belief that income would not be disclosed--Inquiries and material showing documents would not be produced--Search valid--Notice under sections 131(1A) and 133(6) subsequent to search would not invalidate search--Allegation that search proceedings were mala fide--Burden of proof on assessee to prove allegation-- Neesa Leisure Ltd . v. Union of India through Secretary (Guj) . . . 460

S. 132 :- --Search and seizure--Validity--Condition precedent for search--Information giving rise to belief that income would not be disclosed--Inquiries and material showing documents would not be produced--Search valid--Notice under sections 131(1A) and 133(6) subsequent to search would not invalidate search--Allegation that search proceedings were mala fide--Burden of proof on assessee to prove allegation-- Neesa Leisure Ltd . v. Union of India through Secretary (Guj) . . . 460

S. 133 :- --Search and seizure--Validity--Condition precedent for search--Information giving rise to belief that income would not be disclosed--Inquiries and material showing documents would not be produced--Search valid--Notice under sections 131(1A) and 133(6) subsequent to search would not invalidate search--Allegation that search proceedings were mala fide--Burden of proof on assessee to prove allegation-- Neesa Leisure Ltd . v. Union of India through Secretary (Guj) . . . 460

S. 158BC :- --Search and seizure--Block assessment--Undisclosed income--Effect of Remittances of Foreign Exchange and Investment in Foreign Exchange Bonds (Immunities and Exemptions) Act, 1991--Bonds entitled to immunity from enquiry--Receipt of bonds as gifts--Value of bonds not assessable as undisclosed income--Remittances of Foreign Exchange and Investment in Foreign Exchange Bonds (Immunities and Exemptions) Act, 1991-- CIT v. Smt. Usha Omer (All) . . . 448

S. 234B :- --Advance tax--Interest--Company--Book profits--Interest under sections 234B and 234C to be paid on failure to pay advance tax in respect of tax payable under section 115JA/115JB-- CIT v. Steel Steips Leasing Ltd. (P&H) . . . 455

S. 234C :- --Advance tax--Interest--Company--Book profits--Interest under sections 234B and 234C to be paid on failure to pay advance tax in respect of tax payable under section 115JA/115JB-- CIT v. Steel Steips Leasing Ltd. (P&H) . . . 455

S. 244A :- --Refund--Interest on refund--Date from which interest becomes due--Effect of section 244A and Circular No. 549, dated 31-10-1989--Excess amount paid on self-assessment--Excess to be refunded with interest from date of payment of such tax till date of refund--Circular No. 549, dated 31-10-1989-- CIT v. Vijaya Bank (Karn) . . . 489

S. 263 :- --Revision--Transactions of purchase and sale of units for many years--Transactions considered to be genuine in prior and subsequent assessment years--Revision proceedings on ground that transactions pertaining to relevant assessment year were speculative--Not permissible-- CIT v. Escorts Ltd . (Delhi) . . . 435

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