ITR Volume 338 : Part 5 (Issue dated 14-11-2011) SUBJECT INDEX TO CASES REPORTED IN THIS PART

INCOME TAX REPORTS (ITR)

Volume 338 : Part 5 (Issue dated 14-11-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Advance tax :- --Interest--Company--Book profits--Interest can be charged where tax calculated on book profits--Income-tax Act, 1961, ss. 115JA, 234B, 234C-- Amtek Auto Ltd . v. CIT (P&H) . . . 550

Book profits :- --Computation--Provision for bad and doubtful debts, whether includible--Change of law--Matter remanded--Income-tax Act, 1961, s. 115JB-- CIT v. Hutchison Max Telecom P. Ltd. (P&H) . . . 614

Computation:- --Provision for diminution in value of investments--Change of law--Law applicable--Amount set aside as provision for diminution in value of assets will not reduce book profits--Income-tax Act, 1961, s. 115JB(2)-- CIT v. Steriplate P. Ltd . (P&H) . . . 547

Company :- --Book profits--Advance tax--Interest payable by assessee--Effect of section 115JB and Circular No. 13 of 2001--Computation of income under section 115JB--Company liable to pay advance tax--Interest leviable under sections 234B and 234C--Income-tax Act, 1961, ss. 115JB, 234B, 234C-- CIT v. Sankala Polymers P. Ltd . (Karn) . . . 617

Dividend:- --Deemed dividend--Loan to shareholder--Scope of section 2(22)(e)--Gratuitous loan deemed to be dividend--Loan in return to advantage conferred by shareholder--Not deemed dividend--Shareholder permitting his immovable property to be mortgaged to bank enabling it to obtain loan--Loan by company to shareholder--Not deemed dividend--Income-tax Act, 1961, s. 2(22)(e)-- Pradip Kumar Malhotra v. CIT (Cal) . . . 538

Deduction of tax at source :- --Salary--Meaning of--Tips collected by hotel and disbursed to employees constitute salary--Tax deductible at source on such tips--Assessee under bona fide belief that tax was not deductible--Cannot be treated as assessee in default under section 201--Interest under section 201(1A) compensatory and to be paid--Income-tax Act, 1961, ss. 15, 16, 17, 192, 201-- CIT (TDS) v. ITC Ltd. (Delhi) . . . 598

Income from undisclosed sources :- --Burden of proof--Gifts--Proof of identity of donors, their creditworthiness and genuineness of gifts--Value of gifts not assessable as income from undisclosed sources--Income-tax Act, 1961-- CIT v. Ms. Mayawati (Delhi) . . . 563

Rectification of mistakes :- --Failure to apply provisions of law--Mistake which can be rectified--Income-tax Act, 1961, s. 154-- CIT v. Sankala Polymers P. Ltd .(Karn) . . . 617

Revision :- --Commissioner--Assessment order allowing set off of business losses of earlier years against dividend income without discussing how dividend income was business income--Order of revision holding order of Assessing Officer erroneous and prejudicial to interests of Revenue--Tribunal to adjudge validity of order of Commissioner and not to go into question of nature of income--Matter remanded--Income-tax Act, 1961, ss. 56, 72-- CIT v. Nalwa Investments Ltd . (Delhi) . . . 552

Search and seizure :- --Block assessment--Undisclosed income--Meaning of--Tax deducted at source from income and advance tax paid by recipient--Income not undisclosed--Income of partners--Firm disclosing remuneration to partners and deducting tax at source on them--No undisclosed income in hands of partners--Income-tax Act, 1961, s. 158BC-- CIT v. H. E. Mynuddin Pasha (Karn) . . . 533

Words and phrases :- --”Salary”-- CIT (TDS) v. ITC Ltd . (Delhi) . . . 598

AUTHORITY FOR ADVANCE RULINGS

Non-resident :- --Agreement with Indian company for development of software--All software developed by Indian company assigned to non-resident--Settlement of dispute arising out of breach of covenant as to inventor’s assignment by Indian company--Sum paid by Indian company thereunder including consideration for licensing of right to use patent and software comprised therein--Balance payment capital receipt but not capital gains taxable in India--Interest on sums placed in escrow account in India--Is income accruing in India to non-resident--Decision of New York court that payment to be subject to tax deduction at source--Parties to be governed by ruling of court and of order on appeal therefrom--Income-tax Act, 1961, ss. 9(1)(vi), 195-- Upaid Systems Limited , In re . . . 517

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961 :

S. 2(22)(e) :- --Company--Dividend--Deemed dividend--Loan to shareholder--Scope of section 2(22)(e)--Gratuitous loan deemed to be dividend--Loan in return to advantage conferred by shareholder--Not deemed dividend--Shareholder permitting his immovable property to be mortgaged to bank enabling it to obtain loan--Loan by company to shareholder--Not deemed dividend-- Pradip Kumar Malhotra v. CIT (Cal) . . . 538

S. 9(1)(vi) :- --Non-resident--Agreement with Indian company for development of software--All software developed by Indian company assigned to non-resident--Settlement of dispute arising out of breach of covenant as to inventor’s assignment by Indian company--Sum paid by Indian company thereunder including consideration for licensing of right to use patent and software comprised therein--Balance payment capital receipt but not capital gains taxable in India--Interest on sums placed in escrow account in India--Is income accruing in India to non-resident--Decision of New York court that payment to be subject to tax deduction at source--Parties to be governed by ruling of court and of order on appeal therefrom-- Upaid Systems Limited , In re(AAR) . . . 517

S. 15 :- --Deduction of tax at source--Salary--Meaning of--Tips collected by hotel and disbursed to employees constitute salary--Tax deductible at source on such tips--Assessee under bona fide belief that tax was not deductible--Cannot be treated as assessee in default under section 201--Interest under section 201(1A) compensatory and to be paid-- CIT (TDS) v. ITC Ltd. (Delhi) . . . 598

S. 16 :- --Deduction of tax at source--Salary--Meaning of--Tips collected by hotel and disbursed to employees constitute salary--Tax deductible at source on such tips--Assessee under bona fide belief that tax was not deductible--Cannot be treated as assessee in default under section 201--Interest under section 201(1A) compensatory and to be paid-- CIT (TDS) v. ITC Ltd. (Delhi) . . . 598

S. 17 :- --Deduction of tax at source--Salary--Meaning of--Tips collected by hotel and disbursed to employees constitute salary--Tax deductible at source on such tips--Assessee under bona fide belief that tax was not deductible--Cannot be treated as assessee in default under section 201--Interest under section 201(1A) compensatory and to be paid-- CIT (TDS) v. ITC Ltd. (Delhi) . . . 598

S. 56 :- --Revision--Commissioner--Assessment order allowing set off of business losses of earlier years against dividend income without discussing how dividend income was business income--Order of revision holding order of Assessing Officer erroneous and prejudicial to interests of Revenue--Tribunal to adjudge validity of order of Commissioner and not to go into question of nature of income--Matter remanded-- CIT v. Nalwa Investments Ltd . (Delhi) . . . 552

S. 72 :- --Revision--Commissioner--Assessment order allowing set off of business losses of earlier years against dividend income without discussing how dividend income was business income--Order of revision holding order of Assessing Officer erroneous and prejudicial to interests of Revenue--Tribunal to adjudge validity of order of Commissioner and not to go into question of nature of income--Matter remanded-- CIT v. Nalwa Investments Ltd . (Delhi) . . . 552

S. 115JA :- --Advance tax--Interest--Company--Book profits--Interest can be charged where tax calculated on book profits-- Amtek Auto Ltd . v. CIT (P&H) . . . 550

S. 115JB :- --Book profits--Computation--Provision for bad and doubtful debts, whether includible--Change of law--Matter remanded-- CIT v. Hutchison Max Telecom P. Ltd. (P&H) . . . 614

Company--Book profits:- --Advance tax--Interest payable by assessee--Effect of section 115JB and Circular No. 13 of 2001--Computation of income under section 115JB--Company liable to pay advance tax--Interest leviable under sections 234B and 234C-- CIT v. Sankala Polymers P. Ltd . (Karn) . . . 617

S. 115JB(2) :- --Book profits--Computation--Provision for diminution in value of investments--Change of law--Law applicable--Amount set aside as provision for diminution in value of assets will not reduce book profits-- CIT v. Steriplate P. Ltd .(P&H) . . . 547

S. 154 :- --Rectification of mistakes--Failure to apply provisions of law--Mistake which can be rectified-- CIT v. Sankala Polymers P. Ltd . (Karn) . . . 617

S. 158BC :- --Search and seizure--Block assessment--Undisclosed income--Meaning of--Tax deducted at source from income and advance tax paid by recipient--Income not undisclosed--Income of partners--Firm disclosing remuneration to partners and deducting tax at source on them--No undisclosed income in hands of partners-- CIT v. H. E. Mynuddin Pasha (Karn) . . . 533

S. 192 :- --Deduction of tax at source--Salary--Meaning of--Tips collected by hotel and disbursed to employees constitute salary--Tax deductible at source on such tips--Assessee under bona fide belief that tax was not deductible--Cannot be treated as assessee in default under section 201--Interest under section 201(1A) compensatory and to be paid-- CIT (TDS) v. ITC Ltd. (Delhi) . . . 598

S. 195 :- --Non-resident--Agreement with Indian company for development of software--All software developed by Indian company assigned to non-resident--Settlement of dispute arising out of breach of covenant as to inventor’s assignment by Indian company--Sum paid by Indian company thereunder including consideration for licensing of right to use patent and software comprised therein--Balance payment capital receipt but not capital gains taxable in India--Interest on sums placed in escrow account in India--Is income accruing in India to non-resident--Decision of New York court that payment to be subject to tax deduction at source--Parties to be governed by ruling of court and of order on appeal therefrom-- Upaid Systems Limited , In re (AAR) . . . 517

S. 201 :- --Deduction of tax at source--Salary--Meaning of--Tips collected by hotel and disbursed to employees constitute salary--Tax deductible at source on such tips--Assessee under bona fide belief that tax was not deductible--Cannot be treated as assessee in default under section 201--Interest under section 201(1A) compensatory and to be paid-- CIT (TDS) v. ITC Ltd. (Delhi) . . . 598

S. 234B :- --Advance tax--Interest--Company--Book profits--Interest can be charged where tax calculated on book profits-- Amtek Auto Ltd . v. CIT (P&H) . . . 550

Company--Book profits:- --Advance tax--Interest payable by assessee--Effect of section 115JB and Circular No. 13 of 2001--Computation of income under section 115JB--Company liable to pay advance tax--Interest leviable under sections 234B and 234C-- CIT v. Sankala Polymers P. Ltd . (Karn) . . . 617

S. 234C :- --Advance tax--Interest--Company--Book profits--Interest can be charged where tax calculated on book profits-- Amtek Auto Ltd . v. CIT (P&H) . . . 550

Company--Book profits:- --Advance tax--Interest payable by assessee--Effect of section 115JB and Circular No. 13 of 2001--Computation of income under section 115JB--Company liable to pay advance tax--Interest leviable under sections 234B and 234C-- CIT v. Sankala Polymers P. Ltd . (Karn) . . . 617