Saturday, December 3, 2011

ITR Volume 339 : Part 2 (Issue dated 5-12-2011) SUBJECT INDEX TO CASES REPORTED IN THIS PART


INCOME TAX REPORTS (ITR)

Volume 339 : Part 2 (Issue dated 5-12-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

-->> Appeal to Appellate Tribunal :- Order under section 263 set aside--Proceedings thereafter infructuous--Tribunal has no jurisdiction to allow appeal from order of Commissioner--Income-tax Act, 1961, s. 263-- Anil Kumar Rastogi v. ITO (All) . . . 279

-->> Business expenditure :- Deferred revenue expenditure--Expenditure on purchases--Finding by Commissioner (Appeals) and Tribunal that amounts were deductible--Finding of fact--Income-tax Act, 1961-- CIT v. P. R. Packaging Ltd. (P&H) . . . 281

-->> Capital gains :- Short-term capital gains--Exemption--Depreciable assets--Export--Computation of capital gains--Income from plant and machinery exempt under section 10B--Expiry of period of exemption--Sale of assets as a block to sister concern--Asset transferred and purchased carrying same rate of depreciation--Assessee entitled to bene-fit of section 50(2)--Income-tax Act, 1961, ss. 10B, 50(2)-- S. Muthurajan v. Deputy CIT (Mad) . . . 301

-->> Deduction of tax at source :- Non-resident purchasing shares of Indian company--Notice under section 201--Notice making it clear that non-resident could urge jurisdictional and other facts--Matter had not been pre-judged--Notice could not be quashed--Income-tax Act, 1961, s. 201(1), (1A)-- Richter Holding Ltd . v. Assistant Director of Income-tax (International Taxation) (Karn) . . . 199

-->> Exemption :- Export--Application to Reserve Bank of India for extension of time for realisation of export proceeds--No reply from Reserve Bank--Extension of time for realisation of export proceeds by Reserve Bank under Foreign Exchange Management Act--Deemed approval for purposes of section 10A(3)--Assessee entitled to exemption--Income-tax Act, 1961, s. 10A-- CIT v. Morgan Stanley Advantage Services P. Ltd . (Bom) . . . 291

-->> Income :- Computation--Disallowance of expenditure related to exempt income--Interest attributable to investment in shares--No evidence that loans not utilized for acquisition of shares--No new shares purchased in immediately preceding years--Not relevant--Disallowance of proportionate part of interest attributable to investment in shares dividends from which exempt--Justified--Income-tax Act, 1961, ss. 10(34), 14A-- Dhanuka and Sons v. CIT (Cal) . . . 319

-->> Income-tax :- General principles--Assessment only according to law-- Chandrakant J. Patel v. V. N. Srivastava (Guj) . . . 310

-->> Interest on borrowed capital :- Expenditure in relation to income not forming part of total income--Borrowed funds utilised for acquisition of shares in company of which assessee acquired controlling interest--Acquisition of shares in form of investment and only benefit is dividend income--Assessee not entitled to deduction of interest--Income-tax Act, 1961, ss. 14A, 36(1)(iii)-- CIT v. Smt. Leena Ramachandran (Ker) . . . 296

-->> Reassessment :- Notice--Receipt of advisory fees from charitable institutions subject of assessment--Notice on ground charitable institutions benami of assessee--Income-tax authorities finding charitable institutions were genuine--Notice not valid--Income-tax Act, 1961, ss. 147, 148-- Dr. Bindeshwar Pathak v. CIT (Patna) . . . 272

-->> :- --Notice after four years--Conditions precedent--Subsequent retrospective amendment--Proviso to section 147 not attracted--Income-tax Act, 1961, s. 147, proviso-- CIT v. SIL Investments Ltd . (Delhi) . . . 166

-->> :- --Reassessment after four years--Non-resident company assessed under section 44BB after considering material on record--Notice based on subsequent decision of High Court and Explanatory Notes to Finance Bill, 2010--Not valid--Income-tax Act, 1961, ss. 44BB, 44D, 147, 148-- B. J. Services Co. Middle East Ltd . v. Deputy Director of Income-tax, International Taxation (Uttarakhand) . . . 169

-->> Revision :- Application for revision--Powers of Commissioner--Income offered for taxation by mistake--Commissioner cannot reject application on that ground--Income exempt under section 10(15)(iv)(fa) included in assessable income--On merits, assessee not ordinarily resident in India--Commissioner not justified in rejecting application for revision--Income-tax Act, 1961, s. 264-- Chandrakant J. Patel v. V. N. Srivastava (Guj) . . . 310

-->> Search and seizure :- Block assessment--Appeal--Competency of appeal--Appeal only against order of assessment--Validity of search can be challenged in appeal--Income-tax Act, 1961, ss. 158B, 235-- C. Ramaiah Reddy v. Asst. CIT (IMV) (Karn) . . . 210

-->> Block assessment:- Limitation--Limitation starts on date of final conclusion of search--Prohibitory order does not extend limitation--Income-tax Act, 1961, s. 158BE-- C. Ramaiah Reddy v. Asst. CIT (IMV) (Karn) . . . 210

-->> :- Undisclosed income--Addition on basis of two statements recorded in two days--Assessee withdrawing second statement--Assessee explaining that second statement not correct in the context of materials produced--Addition based on second statement to be set aside--Income-tax Act, 1961--CBDT Circular dated 10-3-2003-- M. Narayanan and Bros. v. Asst. CIT (Mad) . . . 192

-->> Valuation of stock :- Law applicable--Effect of insertion of section 145A w.e.f. 1-4-1999 --Excise duty on unsold stock not to be taken into account--Income-tax Act, 1961, s. 145A-- CIT v. Loknete Balasaheb Desai S. S. K. Ltd. (Bom) . . . 288



SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961 :

-->> S. 10(34) :- Income--Computation--Disallowance of expenditure related to exempt income--Interest attributable to investment in shares--No evidence that loans not utilized for acquisition of shares--No new shares purchased in immediately preceding years--Not relevant--Disallowance of proportionate part of interest attributable to investment in shares dividends from which exempt--Justified-- Dhanuka and Sons v. CIT (Cal) . . . 319

-->> S. 10A :- Exemption--Export--Application to Reserve Bank of India for extension of time for realisation of export proceeds--No reply from Reserve Bank--Extension of time for realisation of export proceeds by Reserve Bank under Foreign Exchange Management Act--Deemed approval for purposes of section 10A(3)--Assessee entitled to exemption-- CIT v. Morgan Stanley Advantage Services P. Ltd . (Bom) . . . 291

-->> S. 10B :- Capital gains--Short-term capital gains--Exemption--Depreciable assets--Export--Computation of capital gains--Income from plant and machinery exempt under section 10B--Expiry of period of exemption--Sale of assets as a block to sister concern--Asset transferred and purchased carrying same rate of depreciation--Assessee entitled to benefit of section 50(2)-- S. Muthurajan v. Deputy CIT (Mad) . . . 301

-->> S. 14A :- Income--Computation--Disallowance of expenditure related to exempt income--Interest attributable to investment in shares--No evidence that loans not utilized for acquisition of shares--No new shares purchased in immediately preceding years--Not relevant--Disallowance of proportionate part of interest attributable to investment in shares dividends from which exempt--Justified-- Dhanuka and Sons v. CIT (Cal) . . . 319

-->> Interest on borrowed capital:- Expenditure in relation to income not forming part of total income--Borrowed funds utilised for acquisition of shares in company of which assessee acquired controlling interest--Acquisition of shares in form of investment and only benefit is dividend income--Assessee not entitled to deduction of interest-- CIT v. Smt. Leena Ramachandran (Ker) . . . 296

-->> S. 36(1)(iii) :- Interest on borrowed capital--Expenditure in relation to income not forming part of total income--Borrowed funds utilised for acquisition of shares in company of which assessee acquired controlling interest--Acquisition of shares in form of investment and only benefit is dividend income--Assessee not entitled to deduction of interest-- CIT v. Smt. Leena Ramachandran (Ker) . . . 296

-->> S. 44BB :- Reassessment--Reassessment after four years--Non-resident company assessed under section 44BB after considering material on record--Notice based on subsequent decision of High Court and Explanatory Notes to Finance Bill, 2010--Not valid-- B. J. Services Co. Middle East Ltd . v. Deputy Director of Income-tax, International Taxation (Uttarakhand) . . . 169

-->> S. 44D :- Reassessment--Reassessment after four years--Non-resident company assessed under section 44BB after considering material on record--Notice based on subsequent decision of High Court and Explanatory Notes to Finance Bill, 2010--Not valid-- B. J. Services Co. Middle East Ltd . v. Deputy Director of Income-tax, International Taxation (Uttarakhand) . . . 169

-->> S. 50(2) :- Capital gains--Short-term capital gains--Exemption--Depreciable assets--Export--Computation of capital gains--Income from plant and machinery exempt under section 10B--Expiry of period of exemption--Sale of assets as a block to sister concern--Asset transferred and purchased carrying same rate of depreciation--Assessee entitled to benefit of section 50(2)-- S. Muthurajan v. Deputy CIT (Mad) . . . 301

-->> S. 145A :- Valuation of stock--Law applicable--Effect of insertion of section 145A w.e.f. 1-4-1999--Excise duty on unsold stock not to be taken into account-- CIT v. Loknete Balasaheb Desai S. S. K. Ltd. (Bom) . . . 288

-->> S. 147 :- Reassessment--Notice--Receipt of advisory fees from charitable institutions subject of assessment--Notice on ground charitable institutions benami of assessee--Income-tax authorities finding charitable institutions were genuine--Notice not valid-- Dr. Bindeshwar Pathak v. CIT (Patna) . . . 272

-->> Reassessment:- Reassessment after four years--Non-resident company assessed under section 44BB after considering material on record--Notice based on subsequent decision of High Court and Explanatory Notes to Finance Bill, 2010--Not valid-- B. J. Services Co. Middle East Ltd . v. Deputy Director of Income-tax, International Taxation (Uttarakhand) . . . 169

-->> S. 147, proviso :- Reassessment--Notice after four years--Conditions precedent--Subsequent retrospective amendment--Proviso to section 147 not attracted-- CIT v. SIL Investments Ltd . (Delhi) . . . 166

-->> S. 148 :- Reassessment--Notice--Receipt of advisory fees from charitable institutions subject of assessment--Notice on ground charitable institutions benami of assessee--Income-tax authorities finding charitable institutions were genuine--Notice not valid-- Dr. Bindeshwar Pathak v. CIT (Patna) . . . 272

-->> :R eassessment--Reassessment after four years--Non-resident company assessed under section 44BB after considering material on record--Notice based on subsequent decision of High Court and Explanatory Notes to Finance Bill, 2010--Not valid-- B. J. Services Co. Middle East Ltd . v. Deputy Director of Income-tax, International Taxation (Uttarakhand) . . . 169

-->> S. 158B :- Search and seizure--Block assessment--Appeal--Competency of appeal--Appeal only against order of assessment--Validity of search can be challenged in appeal-- C. Ramaiah Reddy v. Asst. CIT (IMV) (Karn) . . . 210

-->> S. 158BE :- Search and seizure--Block assessment--Limitation--Limitation starts on date of final conclusion of search--Prohibitory order does not extend limitation-- C. Ramaiah Reddy v. Asst. CIT (IMV) (Karn) . . . 210

-->> S. 201(1), (1A) :- Deduction of tax at source--Non-resident purchasing shares of Indian company--Notice under section 201--Notice making it clear that non-resident could urge jurisdictional and other facts--Matter had not been pre-judged--Notice could not be quashed-- Richter Holding Ltd . v. Assistant Director of Income-tax (International Taxation) (Karn) . . . 199

-->> S. 235 :- Search and seizure--Block assessment--Appeal--Competency of appeal--Appeal only against order of assessment--Validity of search can be challenged in appeal-- C. Ramaiah Reddy v. Asst. CIT (IMV) (Karn) . . . 210

-->> S. 263 :- Appeal to Appellate Tribunal--Order under section 263 set aside--Proceedings thereafter infructuous--Tribunal has no jurisdiction to allow appeal from order of Commissioner-- Anil Kumar Rastogi v. ITO (All) . . . 279

-->> S. 264 :- Revision--Application for revision--Powers of Commissioner--Income offered for taxation by mistake--Commissioner cannot reject application on that ground--Income exempt under section 10(15)(iv)(fa) included in assessable income--On merits, assessee not ordinarily resident in India--Commissioner not justified in rejecting application for revision-- Chandrakant J. Patel v. V. N. Srivastava (Guj) . . . 310

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