ITR (TRIB) Volume 23 : Part 2 (Issue dated : 22-4-2013) SUBJECT INDEX

ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))
Volume 23 : Part 2 (Issue dated : 22-4-2013)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Advance tax --Interest--Assessee not liable to pay interest--Income-tax Act, 1961, s. 234B-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

Appeal to Appellate Tribunal --Power to admit additional grounds--Legal grounds not requiring investigation into facts--To be admitted--Income-tax Act, 1961, s. 254-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

----Rectification of mistake--Exemption--Export-
oriented undertaking--Tribunal inadvertently miscalculating number of assessment years for which exemption available--Mistake to be rectified--Change of year goes to root of order--Earlier order recalled--Income-tax Act, 1961-- Assistant CIT v. Qmax Test Equipments P. Ltd. (Chennai) . . . 187

Appeal to Commissioner (Appeals) --Power to enhance income--Income from different products manufactured under same licence agreement--Commissioner (Appeals) entitled to enhance income--Income-tax Act, 1961, s. 251-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

Capital gains --Agreement for development of property cancelled and agreement for sale and irrevocable power of attorney executed within same party--Device to reduce tax--Advance received under first agreement and forfeited and sums received as damages together constitute part of consideration for sale--Taxable as capital gains--Income-tax Act, 1961-- Hyderabad Bottling Co. Ltd. v. Deputy CIT (Hyderabad) . . . 175

----Business income--Purchase of land for agricultural purposes--No evidence that borrowed capital used for purchase--Land held as an asset--Surplus realised on asset to be taxed as capital gains--Not business income--Income-tax Act, 1961-- Additional CIT v. Delhi Apartment P. Ltd. (Delhi) . . . 217

----Transfer of asset--Date of transfer--No agreement signed or possession delivered in relevant year--Gains cannot be taxed in that year--Income-tax Act, 1961, ss. 2(47), 45-- Additional CIT v. Delhi Apartment P. Ltd. (Delhi) . . . 217

Non-resident --Burden of proof--Income deemed to accrue or arise in India--Conditions precedent--Business carried on in India--Sale to party in India without operations carried out in India not business in India--Licence granted by assessee of patented CDMA technology to non-resident original equipment manufacturers to make and sell CDMA handsets and wireless equipment in consideration for royalty--Royalty determined with reference to net selling price of product to unrelated wireless carriers worldwide--Sale of products manufactured using patented technology to wireless carriers located in India for sale to end users in India--Licence not specific to any particular country--Licence not used in India--Not established that patents licensed by assessee used for installation activities in India--Patents having nothing to do with functionality of handsets--Original equipment manufacturers themselves not brought to tax--Title to equipment passing in high seas--Mere passing of title does not result in income being attributable in India--Software not provided as part of licensing of assessee’s patents--Source of royalty was place where patent exploited which was outside India--Indian telecom operators not source of income for original equipment manufacturers--Not established that original equipment manufacturers used assessee’s patents for carrying on business in India or making or earning income from source in India--Royalty paid by original equipment manufacturers to assessee not taxable--Income-tax Act, 1961, s. 9(1)(vi)(c)--Double Taxation Avoidance Agreement between India and the United States of America, art. 12(7)(b)-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

----Fees for technical services--Payments to non-resident divers under contract for provision of underwater services in Saudi Arabia--Technical fee paid to carry out business outside India for earning income from a source outside India--Assessee not liable for tax deducted at source--Income-tax Act, 1961, s. 9(1)(vii)-- Aqua Omega Services P. Ltd. v. Assistant CIT (Chennai) . . . 191

Penalty --Failure to file return of tax deducted at source within specified time--Penalty levied unilaterally without finding whether banks need to file statements--Statements produced by assessee uploaded by franchisee in single day for all four quarters--Particulars uploaded by franchisee without permanent account numbers of deductees--Levy of penalty not justified--Income-tax Act, 1961, s. 272A(2)(k)-- Branch Manager (TDS), UCO Bank v. Additional CIT (Cuttack) . . . 209

Reassessment --Reason to believe income escaped assessment--Sufficient if one ground out of many tenable--Facts contradicting basis of belief subsequently surfacing later in course of assessment not to vitiate proceedings--No stipulation that Assessing Officer to furnish reasons for reopening with notice--Newspaper reports can constitute information or material--Income-tax Act, 1961, ss. 147, 148-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

----Reason to believe that income escaped assessment--Tax deducted at source--No presumption that there was no escapement of income--Income-tax Act, 1961, s. 147-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

----Sanction of Commissioner--Findings of Additional Director typed--Does not mean sanction accorded without application of mind--Joint Director authorised to exercise power of Additional Commissioner--Sanction for issue of notice was by an appropriate authority--Income-tax Act, 1961, ss. 2(28C), 151-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

Return of income --Failure to file--Interest--Levy of interest under section 234A proper--Income-tax Act, 1961, s. 234A-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

Revision --Commissioner--Erroneous and prejudicial to Revenue--Order passed without application of mind--Liable to be revised--Industrial undertaking--Special deduction--Assessing Officer accepting nil return of assessee and allowing claim to deduction under section 80-IA without enquiry whether assessee fulfilled conditions for eligibility therefor--Revision proper--Income-tax Act, 1961, ss. 80-IA, 263-- Vodafone Essar Ltd. v. CIT (Chandigarh) . . . 147

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Double Taxation Avoidance Agreement between India and the United States of America :

Art. 12(7)(b) --Non-resident--Burden of proof--Income deemed to accrue or arise in India--Conditions precedent--Business carried on in India--Sale to party in India without operations carried out in India not business in India--Licence granted by assessee of patented CDMA technology to non-resident original equipment manufacturers to make and sell CDMA handsets and wireless equipment in consideration for royalty--Royalty determined with reference to net selling price of product to unrelated wireless carriers worldwide--Sale of products manufactured using patented technology to wireless carriers located in India for sale to end users in India--Licence not specific to any particular country--Licence not used in India--Not established that patents licensed by assessee used for installation activities in India--Patents having nothing to do with functionality of handsets--Original equipment manufacturers themselves not brought to tax--Title to equipment passing in high seas--Mere passing of title does not result in income being attributable in India--Software not provided as part of licensing of assessee’s patents--Source of royalty was place where patent exploited which was outside India--Indian telecom operators not source of income for original equipment manufacturers--Not established that original equipment manufacturers used assessee’s patents for carrying on business in India or making or earning income from source in India--Royalty paid by original equipment manufacturers to assessee not taxable-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

Income-tax Act, 1961 :

S. 2(28C) --Reassessment--Sanction of Commissioner--Findings of Additional Director typed--Does not mean sanction accorded without application of mind--Joint Director authorised to exercise power of Additional Commissioner--Sanction for issue of notice was by an appropriate authority-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

S. 2(47) --Capital gains--Transfer of asset--Date of transfer--No agreement signed or possession delivered in relevant year--Gains cannot be taxed in that year-- Additional CIT v. Delhi Apartment P. Ltd. (Delhi) . . . 217

S. 9(1)(vi)(c) --Non-resident--Burden of proof--Income deemed to accrue or arise in India--Conditions precedent--Business carried on in India--Sale to party in India without operations carried out in India not business in India--Licence granted by assessee of patented CDMA technology to non-resident original equipment manufacturers to make and sell CDMA handsets and wireless equipment in consideration for royalty--Royalty determined with reference to net selling price of product to unrelated wireless carriers worldwide--Sale of products manufactured using patented technology to wireless carriers located in India for sale to end users in India--Licence not specific to any particular country--Licence not used in India--Not established that patents licensed by assessee used for installation activities in India--Patents having nothing to do with functionality of handsets--Original equipment manufacturers themselves not brought to tax--Title to equipment passing in high seas--Mere passing of title does not result in income being attributable in India--Software not provided as part of licensing of assessee’s patents--Source of royalty was place where patent exploited which was outside India--Indian telecom operators not source of income for original equipment manufacturers--Not established that original equipment manufacturers used assessee’s patents for carrying on business in India or making or earning income from source in India--Royalty paid by original equipment manufacturers to assessee not taxable-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

S. 9(1)(vii) --Non-resident--Fees for technical services--Payments to non-resident divers under contract for provision of underwater services in Saudi Arabia--Technical fee paid to carry out business outside India for earning income from a source outside India--Assessee not liable for tax deducted at source-- Aqua Omega Services P. Ltd. v. Assistant CIT (Chennai) . . . 191

S. 45 --Capital gains--Transfer of asset--Date of transfer--No agreement signed or possession delivered in relevant year--Gains cannot be taxed in that year-- Additional CIT v. Delhi Apartment P. Ltd. (Delhi) . . . 217

S. 80-IA --Revision--Commissioner--Erroneous and prejudicial to Revenue--Order passed without application of mind--Liable to be revised--Industrial undertaking--Special deduction--Assessing Officer accepting nil return of assessee and allowing claim to deduction under section 80-IA without enquiry whether assessee fulfilled conditions for eligibility therefor--Revision proper-- Vodafone Essar Ltd. v. CIT (Chandigarh) . . . 147

S. 147 --Reassessment--Reason to believe income escaped assessment--Sufficient if one ground out of many tenable--Facts contradicting basis of belief subsequently surfacing later in course of assessment not to vitiate proceedings--No stipulation that Assessing Officer to furnish reasons for reopening with notice--Newspaper reports can constitute information or material-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

----Reassessment--Reason to believe that income escaped assessment--Tax deducted at source--No presumption that there was no escapement of income-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

S. 148 --Reassessment--Reason to believe income escaped assessment--Sufficient if one ground out of many tenable--Facts contradicting basis of belief subsequently surfacing later in course of assessment not to vitiate proceedings--No stipulation that Assessing Officer to furnish reasons for reopening with notice--Newspaper reports can constitute information or material-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

S. 151 --Reassessment--Sanction of Commissioner--Findings of Additional Director typed--Does not mean sanction accorded without application of mind--Joint Director authorised to exercise power of Additional Commissioner--Sanction for issue of notice was by an appropriate authority-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

S. 234A --Return of income--Failure to file--Interest--Levy of interest under section 234A proper-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

S. 234B --Advance tax--Interest--Assessee not liable to pay interest-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

S. 251 --Appeal to Commissioner (Appeals)--Power to enhance income--Income from different products manufactured under same licence agreement--Commissioner (Appeals) entitled to enhance income-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

S. 254 --Appeal to Appellate Tribunal--Power to admit additional grounds--Legal grounds not requiring investigation into facts--To be admitted-- Qualcomm Incorporated v. Additional Director of Income-tax (Delhi) . . . 239

S. 263 --Revision--Commissioner--Erroneous and prejudicial to Revenue--Order passed without application of mind--Liable to be revised--Industrial undertaking--Special deduction--Assessing Officer accepting nil return of assessee and allowing claim to deduction under section 80-IA without enquiry whether assessee fulfilled conditions for eligibility therefor--Revision proper-- Vodafone Essar Ltd. v. CIT (Chandigarh) . . . 147

S. 272A(2)(k) --Penalty--Failure to file return of tax deducted at source within specified time--Penalty levied unilaterally without finding whether banks need to file statements--Statements produced by assessee uploaded by franchisee in single day for all four quarters--Particulars uploaded by franchisee without permanent account numbers of deductees--Levy of penalty not justified-- Branch Manager (TDS), UCO Bank v. Additional CIT (Cuttack) . . . 209