Saturday, August 25, 2012

TRIBUNAL TAX REPORTS : Volume 18 : Part 2 (Issue dated : 27-08-2012)


TR’S TRIBUNAL TAX REPORTS (ITR (TRIB))
Volume 18 : Part 2 (Issue dated : 27-08-2012)
Best judgment assessment --Rejection of accounts and assessment under section 144--Disallowance of expenses under section 40(a)(ia) on ground of non-deduction of tax at source--Not justified--Income-tax Act, 1961, ss. 40(a)(ia), 144-- ITO v. Sahadev Pradhan (Cuttack) . . . 180
Business income --Income from other sources--Interest on income-tax refund--Is income from other sources, not business income--Income-tax Act, 1961, ss. 28, 56-- Kotak Mahindra Capital Co. Ltd. v. Assistant CIT [SB] (Mumbai) . . . 213
Capital gains --Computation--Effect of section 50C--Assessee booking flat--Amount paid for booking returned subsequently--Section 50C not applicable--Income-tax Act, 1961, ss. 45, 50C-- ITO v. Yasin Moosa Godil (Ahmedabad) . . . 253
----Loss--Carry forward and set off--Change of law--Amendment with effect from April 1, 2003 restricting set-off of long-term capital loss only against long-term capital gains and not against short-term capital gains--Applicable only to long-term capital loss incurred in assessment year 2003-04 and subsequent years--Set-off of long-term capital loss brought forward from periods prior to assessment year 2003-04 governed by provisions as they stood prior to amendment--Assessee entitled to set off brought forward long-term capital loss relating to assessment year 2001-02 against short-term capital gains of assessment year 2003-04--Income-tax Act, 1961, s. 74 (as amended by Finance Act, 2002)-- Kotak Mahindra Capital Co. Ltd. v. Assistant CIT [SB] (Mumbai) . . . 213
Charitable purpose --Donation for charitable purpose--Approval of institution--If objects charitable no right to deny approval--Registration under section 12A is sufficient proof--Assessee entitled to renewal of exemption certificate--Income-tax Act, 1961, ss. 12A, 80G(5)(vi)-- Bengal Hosiery Manufacturers’ Association v. Director of Income-tax (Exemption) (Kolkata) . . . 205
----Donation for charitable purposes--Registration of trust under section 80G--Clause in trust deed empowering trustees to invest in business--Other clauses making it clear that all powers subject to limitations and restrictions under Income-tax Act--Clause cannot be read in isolation--Trust granted registration under sections 10(23C) and 12A--Trust entitled to registration under section 80G--Income-tax Act, 1961, ss. 10(23C), 12A, 80G-- NSHM Academy v. CIT (Kolkata) . . . 244
Company --Book profits--Minimum alternate tax--Interest--Section 115JB not applicable--Net profit already computed under Companies Act--Addition to book profit not proper--Income-tax Act, 1961, s. 115JB-- Joint CIT v. Shreyans Industries Ltd. (Chandigarh) . . . 169
----Book profits--Provision for gratuity--To be excluded from calculation of book profits--Income-tax Act, 1961, s. 115JB-- Joint CIT v. Shreyans Industries Ltd. (Chandigarh) . . . 169
Depreciation --Goodwill--Amalgamation of wholly owned subsidiary with assessee-company--Subsidiary company earning income by lease of property--Primary asset transferred was land--No proof of transfer of goodwill--Depreciation not allowable on goodwill--Income-tax Act, 1961, s. 32-- Deputy CIT v. Toyo Engineering India Ltd. (Mumbai) . . . 159
Export --Special deduction--Profit on transfer of DEPB licence--Duty of Assessing Officer to grant opportunity of hearing to assessee--Matter remanded--Income-tax Act, 1961, s. 80HHC-- Jacob Export House v. Assistant CIT (Chandigarh) . . . 175
Interpretation of taxing statutes --Strict construction--Construction according to rules of grammar-- Kotak Mahindra Capital Co. Ltd. v. Assistant CIT [SB] (Mumbai) . . . 213
Non-resident --Business loss--Set off--No permanent establishment in India--Assessee choosing to be governed by Income-tax Act and not by Double Taxation Avoidance Agreement--Assessing Officer cannot impose Double Taxation Avoidance Agreement--Assessee entitled to set off loss under “Profits and gains of business or profession†against “Income from other sources†--Income-tax Act, 1961, ss. 71, 90(2)-- Prudential Assurance Co. Ltd. v. Assistant Director of Income-tax (Mumbai) . . . 186
Reassessment --Notice issued after four years--No case of failure to disclose material facts--Reassessment on change of opinion--To be quashed--Income-tax Act, 1961, ss. 143(3), 147, 148-- Prudential Assurance Co. Ltd. v. Assistant Director of Income-tax (Mumbai) . . . 186
Refund --Interest--Interest on excess refund--Provision inserted with effect from June 1, 2003--Explanation that interest leviable for assessment years prior to that date if proceedings completed thereafter--Assessee liable to pay interest--Income-tax Act, 1961, s. 234D-- Kotak Mahindra Capital Co. Ltd. v. Assistant CIT [SB] (Mumbai) . . . 213
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Income-tax Act, 1961 :
S. 10(23C) --Charitable purposes--Donation for charitable purposes--Registration of trust under section 80G--Clause in trust deed empowering trustees to invest in business--Other clauses making it clear that all powers subject to limitations and restrictions under Income-tax Act--Clause cannot be read in isolation--Trust granted registration under sections 10(23C) and 12A--Trust entitled to registration under section 80G-- NSHM Academy v. CIT (Kolkata) . . . 244
S. 12A --Charitable purpose--Donation for charitable purpose--Approval of institution--If objects charitable no right to deny approval--Registration under section 12A is sufficient proof--Assessee entitled to renewal of exemption certificate-- Bengal Hosiery Manufacturers’ Association v. Director of Income-tax (Exemption) (Kolkata) . . . 205
----Charitable purposes--Donation for charitable purposes--Registration of trust under section 80G--Clause in trust deed empowering trustees to invest in business--Other clauses making it clear that all powers subject to limitations and restrictions under Income-tax Act--Clause cannot be read in isolation--Trust granted registration under sections 10(23C) and 12A--Trust entitled to registration under section 80G-- NSHM Academy v. CIT (Kolkata) . . . 244
S. 28 --Business income--Income from other sources--Interest on income-tax refund--Is income from other sources, not business income-- Kotak Mahindra Capital Co. Ltd. v. Assistant CIT [SB] (Mumbai) . . . 213
S. 32 --Depreciation--Goodwill--Amalgamation of wholly owned subsidiary with assessee-company--Subsidiary company earning income by lease of property--Primary asset transferred was land--No proof of transfer of goodwill--Depreciation not allowable on goodwill-- Deputy CIT v. Toyo Engineering India Ltd. (Mumbai) . . . 159
S. 40(a)(ia) --Best judgment assessment--Rejection of accounts and assessment under section 144--Disallowance of expenses under section 40(a)(ia) on ground of non-deduction of tax at source--Not justified-- ITO v. Sahadev Pradhan (Cuttack) . . . 180
S. 45 --Capital gains--Computation--Effect of section 50C--Assessee booking flat--Amount paid for booking returned subsequently--Section 50C not applicable-- ITO v. Yasin Moosa Godil (Ahmedabad) . . . 253
S. 50C --Capital gains--Computation--Effect of section 50C--Assessee booking flat--Amount paid for booking returned subsequently--Section 50C not applicable-- ITO v. Yasin Moosa Godil (Ahmedabad) . . . 253
S. 56 --Business income--Income from other sources--Interest on income-tax refund--Is income from other sources, not business income-- Kotak Mahindra Capital Co. Ltd. v. Assistant CIT [SB] (Mumbai) . . . 213
S. 71 --Non-resident--Business loss--Set off--No permanent establishment in India--Assessee choosing to be governed by Income-tax Act and not by Double Taxation Avoidance Agreement--Assessing Officer cannot impose Double Taxation Avoidance Agreement--Assessee entitled to set off loss under “Profits and gains of business or profession†against “Income from other sources†-- Prudential Assurance Co. Ltd. v. Assistant Director of Income-tax (Mumbai) . . . 186
S. 74 (as amended by Finance Act, 2002) --Capital gains--Loss--Carry forward and set off--Change of law--Amendment with effect from April 1, 2003 restricting set-off of long-term capital loss only against long-term capital gains and not against short-term capital gains--Applicable only to long-term capital loss incurred in assessment year 2003-04 and subsequent years--Set-off of long-term capital loss brought forward from periods prior to assessment year 2003-04 governed by provisions as they stood prior to amendment--Assessee entitled to set off brought forward long-term capital loss relating to assessment year 2001-02 against short-term capital gains of assessment year 2003-04-- Kotak Mahindra Capital Co. Ltd. v. Assistant CIT [SB] (Mumbai) . . . 213
S. 80G --Charitable purposes--Donation for charitable purposes--Registration of trust under section 80G--Clause in trust deed empowering trustees to invest in business--Other clauses making it clear that all powers subject to limitations and restrictions under Income-tax Act--Clause cannot be read in isolation--Trust granted registration under sections 10(23C) and 12A--Trust entitled to registration under section 80G-- NSHM Academy v. CIT (Kolkata) . . . 244
S. 80G(5)(vi) --Charitable purpose--Donation for charitable purpose--Approval of institution--If objects charitable no right to deny approval--Registration under section 12A is sufficient proof--Assessee entitled to renewal of exemption certificate-- Bengal Hosiery Manufacturers’ Association v. Director of Income-tax (Exemption) (Kolkata) . . . 205
S. 80HHC --Export--Special deduction--Profit on transfer of DEPB licence--Duty of Assessing Officer to grant opportunity of hearing to assessee--Matter remanded-- Jacob Export House v. Assistant CIT (Chandigarh) . . . 175
S. 90(2) --Non-resident--Business loss--Set off--No permanent establishment in India--Assessee choosing to be governed by Income-tax Act and not by Double Taxation Avoidance Agreement--Assessing Officer cannot impose Double Taxation Avoidance Agreement--Assessee entitled to set off loss under “Profits and gains of business or profession†against “Income from other sources†-- Prudential Assurance Co. Ltd. v. Assistant Director of Income-tax (Mumbai) . . . 186
S. 115JB --Company--Book profits--Minimum alternate tax--Interest--Section 115JB not applicable--Net profit already computed under Companies Act--Addition to book profit not proper-- Joint CIT v. Shreyans Industries Ltd. (Chandigarh) . . . 169
----Company--Book profits--Provision for gratuity--To be excluded from calculation of book profits-- Joint CIT v. Shreyans Industries Ltd. (Chandigarh) . . . 169
S. 143(3) --Reassessment--Notice issued after four years--No case of failure to disclose material facts--Reassessment on change of opinion--To be quashed-- Prudential Assurance Co. Ltd. v. Assistant Director of Income-tax (Mumbai) . . . 186
S. 144 --Best judgment assessment--Rejection of accounts and assessment under section 144--Disallowance of expenses under section 40(a)(ia) on ground of non-deduction of tax at source--Not justified-- ITO v. Sahadev Pradhan (Cuttack) . . . 180
S. 147 --Reassessment--Notice issued after four years--No case of failure to disclose material facts--Reassessment on change of opinion--To be quashed-- Prudential Assurance Co. Ltd. v. Assistant Director of Income-tax (Mumbai) . . . 186
S. 148 --Reassessment--Notice issued after four years--No case of failure to disclose material facts--Reassessment on change of opinion--To be quashed-- Prudential Assurance Co. Ltd. v. Assistant Director of Income-tax (Mumbai) . . . 186
S. 234D --Refund--Interest--Interest on excess refund--Provision inserted with effect from June 1, 2003--Explanation that interest leviable for assessment years prior to that date if proceedings completed thereafter--Assessee liable to pay interest-- Kotak Mahindra Capital Co. Ltd. v. Assistant CIT [SB] (Mumbai) . . . 213

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