INCOME TAX REPORTS (ITR) Volume 343 : Part 2 (Issue dated 7-5-2012) SUBJECT INDEX TO CASES REPORTED IN THIS PART

INCOME TAX REPORTS (ITR)

Volume 343 : Part 2 (Issue dated 7-5-2012)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Assessment --Reference to Departmental Valuation Officer--Change of law of with retrospective effect--Effect--Construction in factory building relating to assessment year 1984-85--Reference by Assessing Officer to Departmental Valuation Officer--Not justified--Income-tax Act, 1961, s. 142A-- CIT v. Nabha Solvex (P) Ltd .

(P&H) . . . 178

Business expenditure --Expenditure on higher education of two directors of assessee--Disallowance on ground directors are children of managing director--Not proper--Assessing Officer to consider whether assessee entitled to claim deduction under section 37(1)--Income-tax Act, 1961, ss. 37(1), 144(1)(b)-- Krishna Fabrications Ltd . v. Joint CIT (Asstt.) (Karn) . . . 126

Capital gains --Transfer--Slump sale--Agreement for transfer of business as going concern--Not of itemised assets--Capital gains not chargeable--Income-tax Act, 1961, s. 45-- CIT v. Polychem Ltd. (Bom) . . . 115

Reassessment --Notice--Assessing Officer finding that claim of depreciation bogus--Notice valid--Income-tax Act, 1961, s. 148-- Indo European Breweries Ltd. v. ITO (Bom) . . . 195

----Notice--Non-resident company deriving income by maintaining and operating super computer sold to Government of India--Assessment order showing Assessing Officer aware of nature and character of obligation performed for which consideration paid--Reassessment on ground agreement between assessee and Government not produced before Assessing Officer--Not proper--Income-tax Act, 1961, ss. 147, 148-- CIT v. Cray Research India Ltd. (Delhi) . . . 212

----Reassessment after four years--Condition precedent--Failure to disclose material facts necessary for assessment--Meaning of "primary facts"--Claim for special deduction under sections 80HHC and 80-IB--Audited accounts and auditor's report submitted--Special deductions allowed--Reassessment notice after four years on ground that special deductions were excessive--Notice not valid--Income-tax Act, 1961, s. 147-- CIT v. Purolator India Ltd. (Delhi) . . . 155

----Reassessment after four years--Condition precedent--Failure to disclose material facts necessary for assessment--No such failure--Reassessment to correct errors in assessment--Not valid--Income-tax Act, 1961, s. 147-- Titanor Components Ltd . v. Asst. CIT (Bom) . . . 183

----Reassessment after four years--Permissible on basis of disclosures made by assessee in assessment for subsequent year--Disclosures not made in year in question--Amounts to failure to disclose material facts--Income-tax Act, 1961, ss. 10A, 147, 148-- Siemens Information Systems Limited v. Asst. CIT (Bom) . . . 188

----Reassessment after four years--Validity--No failure to disclose material facts necessary for assessment--Deduction of expenditure in original assessment--Reassessment proceedings to disallow expenditure--Not valid--Income-tax Act, 1961, s. 147-- BLB Limited v. Asst. CIT (Delhi) . . . 129

----Validity--Failure to disclose material facts necessary for assessment--Details regarding loan not furnished--Assessment order for assessment year 1999-2000 that loan from sister concern was assessable as deemed dividend--Reassessment proceedings to assess such loans as deemed dividend in assessment year 2000-01--Valid--Income-tax Act, 1961, s. 147-- Atma Ram Properties Private Limited v. Deputy CIT

(Delhi) . . . 141

----Validity--Reassessment after four years--Failure to disclose material facts necessary for assessment--Loans from sister concern--Facts disclosed by assessee--Failure to assess loans as deemed dividends--Reassessment proceedings not valid for assessment year 1999-2000--Income-tax Act, 1961, s. 147-- Atma Ram Properties Private Limited v. Deputy CIT (Delhi) . . . 141

Revision --Erroneous and prejudicial to Revenue--General principles--Special deductions under sections 80-I, 80-IA and 80HHC granted without allocation of expenditure to those units--Revision justified--Revision to allocate expenditure on green tea cess, interest and agency commission--Not justified--Income-tax Act, 1961, s. 263-- CIT v. Hindustan Lever Ltd. (Bom) . . . 161

AUTHORITY FOR ADVANCE RULINGS

Advance ruling --Authority--Jurisdiction--Prohibition where question in issue before authorities under Act--Application by Indian company whether tax deductible at source on payments to non-resident--Is in effect question of taxability of payments in hands of non-resident--Non-resident already assessed and appeal pending before Tribunal--Question already pending before income-tax authority--Application by Indian company not maintainable--Income-tax Act, 1961, ss. 195, 245N(a)(ii), 245R(2), 245S-- Nuclear Power Corporation of India Ltd. , In re . . . 220

----Maintainability--Question on which ruling sought already pending before income-tax authority--Application not maintainable--Date of filing return is date to be reckoned for determination whether question already pending before authority--Income-tax Act, 1961, s. 245R(2)-- WaveField Inseis ASA , In re . . . 136

Non-resident --Purchase of aircraft by Indian company from company incorporated in France--COFACE, body incorporated on behalf of French State, ensuring credit facility--Promissory notes, for principal and interest separately executed by Indian buyer in favour of foreign seller--Promissory notes irrevocably and unconditionally assigned by seller to BNP Paribas--Interest payable by Indian buyer to seller or to BNP not taxable in India--Income-tax Act, 1961, s. 195--Double Taxation Avoidance Agreement between India and France, art. 12(3)(b)-- Poonawalla Aviation Private Limited , In re

. . . 202

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Double Taxation Avoidance Agreement between India and France :

Art. 12(3)(b) --Non-resident--Purchase of aircraft by Indian company from company incorporated in France--COFACE, body incorporated on behalf of French State, ensuring credit facility--Promissory notes, for principal and interest separately executed by Indian buyer in favour of foreign seller--Promissory notes irrevocably and unconditionally assigned by seller to BNP Paribas--Interest payable by Indian buyer to seller or to BNP not taxable in India-- Poonawalla Aviation Private Limited , In re

(AAR) . . . 202

Income-tax Act, 1961 :

S. 10A --Reassessment--Reassessment after four years--Permissible on basis of disclosures made by assessee in assessment for subsequent year--Disclosures not made in year in question--Amounts to failure to disclose material facts-- Siemens Information Systems Limited v. Asst. CIT (Bom) . . . 188

S. 37(1) --Business expenditure--Expenditure on higher education of two directors of assessee--Disallowance on ground directors are children of managing director--Not proper--Assessing Officer to consider whether assessee entitled to claim deduction under section 37(1)-- Krishna Fabrications Ltd . v. Joint CIT (Asstt.)

(Karn) . . . 126

S. 45 --Capital gains--Transfer--Slump sale--Agreement for transfer of business as going concern--Not of itemised assets--Capital gains not chargeable-- CIT v. Polychem Ltd. (Bom) . . . 115

S. 142A --Assessment--Reference to Departmental Valuation Officer--Change of law of with retrospective effect--Effect--Construction in factory building relating to assessment year 1984-85--Reference by Assessing Officer to Departmental Valuation Officer--Not justified-- CIT v. Nabha Solvex (P) Ltd . (P&H) . . . 178

S. 144(1)(b) --Business expenditure--Expenditure on higher education of two directors of assessee--Disallowance on ground directors are children of managing director--Not proper--Assessing Officer to consider whether assessee entitled to claim deduction under section 37(1)-- Krishna Fabrications Ltd . v. Joint CIT (Asstt.)

(Karn) . . . 126

S. 147 --Reassessment--Notice--Non-resident company deriving income by maintaining and operating super computer sold to Government of India--Assessment order showing Assessing Officer aware of nature and character of obligation performed for which consideration paid--Reassessment on ground agreement between assessee and Government not produced before Assessing Officer--Not proper-- CIT v. Cray Research India Ltd. (Delhi) . . . 212

----Reassessment--Reassessment after four years--Condition precedent--Failure to disclose material facts necessary for assessment--Meaning of "primary facts"--Claim for special deduction under sections 80HHC and 80-IB--Audited accounts and auditor's report submitted--Special deductions allowed--Reassessment notice after four years on ground that special deductions were excessive--Notice not valid-- CIT v. Purolator India Ltd. (Delhi) . . . 155

----Reassessment--Reassessment after four years--Condition precedent--Failure to disclose material facts necessary for assessment--No such failure--Reassessment to correct errors in assessment--Not valid-- Titanor Components Ltd . v. Asst. CIT

(Bom) . . . 183

----Reassessment--Reassessment after four years--Permissible on basis of disclosures made by assessee in assessment for subsequent year--Disclosures not made in year in question--Amounts to failure to disclose material facts-- Siemens Information Systems Limited v. Asst. CIT (Bom) . . . 188

----Reassessment--Reassessment after four years--Validity--No failure to disclose material facts necessary for assessment--Deduction of expenditure in original assessment--Reassessment proceedings to disallow expenditure--Not valid-- BLB Limited v. Asst. CIT (Delhi) . . . 129

----Reassessment--Validity--Failure to disclose material facts necessary for assessment--Details regarding loan not furnished--Assessment order for assessment year 1999-2000 that loan from sister concern was assessable as deemed dividend--Reassessment proceedings to assess such loans as deemed dividend in assessment year 2000-01--Valid-- Atma Ram Properties Private Limited v. Deputy CIT

(Delhi) . . . 141

----Reassessment--Validity--Reassessment after four years--Failure to disclose material facts necessary for assessment--Loans from sister concern--Facts disclosed by assessee--Failure to assess loans as deemed dividends--Reassessment proceedings not valid for assessment year 1999-2000-- Atma Ram Properties Private Limited v. Deputy CIT (Delhi) . . . 141

S. 148 --Reassessment--Notice--Assessing Officer finding that claim of depreciation bogus--Notice valid-- Indo European Breweries Ltd. v. ITO (Bom) . . . 195

----Reassessment--Notice--Non-resident company deriving income by maintaining and operating super computer sold to Government of India--Assessment order showing Assessing Officer aware of nature and character of obligation performed for which consideration paid--Reassessment on ground agreement between assessee and Government not produced before Assessing Officer--Not proper-- CIT v. Cray Research India Ltd.

(Delhi) . . . 212

----Reassessment--Reassessment after four years--Permissible on basis of disclosures made by assessee in assessment for subsequent year--Disclosures not made in year in question--Amounts to failure to disclose material facts-- Siemens Information Systems Limited v. Asst. CIT (Bom) . . . 188

S. 195 --Advance ruling--Authority--Jurisdiction--Prohibition where question in issue before authorities under Act--Application by Indian company whether tax deductible at source on payments to non-resident--Is in effect question of taxability of payments in hands of non-resident--Non-resident already assessed and appeal pending before Tribunal--Question already pending before income-tax authority--Application by Indian company not maintainable-- Nuclear Power Corporation of India Ltd. , In re

(AAR) . . . 220

----Non-resident--Purchase of aircraft by Indian company from company incorporated in France--COFACE, body incorporated on behalf of French State, ensuring credit facility--Promissory notes, for principal and interest separately executed by Indian buyer in favour of foreign seller--Promissory notes irrevocably and unconditionally assigned by seller to BNP Paribas--Interest payable by Indian buyer to seller or to BNP not taxable in India-- Poonawalla Aviation Private Limited , In re (AAR) . . . 202

S. 245N(a)(ii) --Advance ruling--Authority--Jurisdiction--Prohibition where question in issue before authorities under Act--Application by Indian company whether tax deductible at source on payments to non-resident--Is in effect question of taxability of payments in hands of non-resident--Non-resident already assessed and appeal pending before Tribunal--Question already pending before income-tax authority--Application by Indian company not maintainable-- Nuclear Power Corporation of India Ltd. , In re

(AAR) . . . 220

S. 245R(2) --Advance ruling--Authority--Jurisdiction--Prohibition where question in issue before authorities under Act--Application by Indian company whether tax deductible at source on payments to non-resident--Is in effect question of taxability of payments in hands of non-resident--Non-resident already assessed and appeal pending before Tribunal--Question already pending before income-tax authority--Application by Indian company not maintainable-- Nuclear Power Corporation of India Ltd. , In re

(AAR) . . . 220

----Advance ruling--Maintainability--Question on which ruling sought already pending before income-tax authority--Application not maintainable--Date of filing return is date to be reckoned for determination whether question already pending before authority-- WaveField Inseis ASA , In re (AAR) . . . 136

S. 245S --Advance ruling--Authority--Jurisdiction--Prohibition where question in issue before authorities under Act--Application by Indian company whether tax deductible at source on payments to non-resident--Is in effect question of taxability of payments in hands of non-resident--Non-resident already assessed and appeal pending before Tribunal--Question already pending before income-tax authority--Application by Indian company not maintainable-- Nuclear Power Corporation of India Ltd. , In re

(AAR) . . . 220

S. 263 --Revision--Erroneous and prejudicial to Revenue--General principles--Special deductions under sections 80-I, 80-IA and 80HHC granted without allocation of expenditure to those units--Revision justified--Revision to allocate expenditure on green tea cess, interest and agency commission--Not justified-- CIT v. Hindustan Lever Ltd. (Bom) . . . 161