INCOME TAX REPORTS (ITR)
Volume 339 : Part 1 (Issue dated 28-11-2011)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
SUPREME COURT
Fundamental rights :- Double
taxation avoidance:- Prohibition on disclosure of documents--Scope of--Information relating
to unaccounted monies held in secret bank accounts outside India--How far to be
divulged--Balance between fundamental right of citizen to seek information and
fundamental right of privacy of account holder--Names of those where no
presumption of wrongdoing not to be divulged--Constitution of India, arts. 19,
21, 32--Double Taxation Avoidance Agreement between India and Germany, art.
26-- Ram Jethmalani v. Union of India . . . 107
HIGH COURTS
Appeal to High Court :- Grounds not raised before
Assessing Officer or Tribunal cannot be raised for first time before High Court:- Income-tax Act, 1961, s.
260A-- Alok Todi v. CIT (Cal) . . . 102
Bad debt :- Leasing and money-lending
business:- Assessee standing guarantee for loan--Default by creditor--Amount
written off--Deductible--Deposit for allotment of shares--Deposit earning
interest--Shares not issued and deposit not returned--Amount deductible as bad
debt--Income-tax Act, 1961, s. 36-- CIT v. Tulip Star Hotels Ltd . (Delhi) . .
. 91
Business expenditure :- Amortisation
of preliminary expenses:- Expenditure on issue of shares--Matter remanded to
find whether assessee was an industrial undertaking--Income-tax Act, 1961, s.
35D-- CIT v. Tulip Star Hotels Ltd. (Delhi) . . . 91
Business income :- Remission or
cessation of trading liability:- Waiver of loan taken for purchase of capital
asset--Not in revenue field--Loan written off in cash credit account--Taxable
income--Income-tax Act, 1961, s. 41(1)-- Rollatainers Ltd . v. CIT (Delhi) . .
. 54
Depreciation :- Goodwill--Valuation
of--Assessee purchasing a loss-making company--Assessing Officer holding 10 per
cent. of purchase price represents goodwill on trade name--Finding of Assessing
Officer without any basis--Assessing Officer not justified in deducting 10 per
cent. towards estimated value on goodwill--Income-tax Act, 1961-- CIT v. India
Cements Ltd . (Mad) . . . 31
Industrial undertaking :- Special deduction--Interest
received from trade debtors--Entitled to deduction--Interest earned on fixed
deposit receipts--Not entitled to deduction--Assessee not entitled to set off
interest received against interest paid--Duty drawback and amount received on
sale of DEPB and QBAL licences--Not entitled to deduction--Income-tax Act,
1961-- CIT v. Advance Detergents Ltd . (Delhi) . . . 81
Special deduction:- Interest--Interest received
on overdue payments for goods supplied--Is income derived from business of
industrial undertaking--Entitled to deduction--Income-tax Act, 1961, s. 80-IA--
CIT v. Advance Detergents Ltd . (Delhi) . . . 81
Interest-tax :- Charge of tax--Loan or
advance--Tests--Intercorporate deposits--Not in nature of loan or advances--Not
chargeable to tax--Interest-tax Act, 1974, ss. 2(7), 5-- CIT v. Visisth Chay
Vypapar Ltd . (Delhi) . . . 157
Interpretation of taxing statutes :-
Loan--Strict
interpretation-- CIT v. Visisth Chay Vypapar Ltd. (Delhi) . . . 157
New industrial undertaking :- Special deduction under
section 80HH--Unit located at backward area, independent unit and profit
making--Receipts on job work done at unit qualify for deduction--Assessee
entitled to special deduction--Income-tax Act, 1961, s. 80HH-- Sundaram
Fasteners Ltd . v. CIT (Mad) . . . 40
Non-resident :- Concessional rate of
tax--Foreign exchange asset--Definition--Interest earned on deposits of sums
brought from abroad--Not a foreign exchange asset--Interest on redeposited
interest--Not entitled to benefit under section 115H--Income-tax Act, 1961, ss.
115C, 115H-- Dr. M. Manohar v. Asst. CIT (Mad) . . . 49
Income deemed to accrue or arise in
India:- No
part of research and development activities carried out in India--Global
profits attributed to activities in India--No further setting off for research
and development activities--Income-tax Act, 1961-- Rolls Royce PLC v. Director
of Income-tax, International Taxation (Delhi) . . . 147
Permanent establishment:- Office in India rendering services--Office
in India a business connection--Finding that assessee's income chargeable to
tax in India under section 5(2) and business connection in India according
section 9(1)(i)--Assessee has permanent establishment in India--Double Taxation
Avoidance Agreement between India and the United Kingdom--Income-tax Act, 1961,
ss. 5(2), 9(1)(i)-- Rolls Royce PLC v. Director of Income-tax, International
Taxation (Delhi) . . . 147
Reassessment :- Transfer of case--No order of
transfer--Assessment in Kolkata--Notice for reassessment by Assessing Officer
of Delhi--Not valid--Income-tax Act, 1961, ss. 127, 148-- Smt. Smriti Kedia v.
Union of India (Cal) . . . 37
Rectification of mistakes :- Condition precedent--Mistake
should be apparent on record--Failure to charge interest under sections 234B
and 234C before allowing credit for minimum alternate tax--Debatable
question--Interest could not be levied in rectification proceedings--Income-tax
Act, 1961, ss. 154, 234B, 234C-- CIT v. Bilag Industries P. Ltd . (Guj) . . .
46
Revision :- Commissioner--Industrial
undertaking--Special deduction under section 80-I--Small scale industrial
undertaking--Notice of revision not taking into account certificate granted by
State Government--Not valid--Income-tax Act, 1961, ss. 80-I, 263-- SJ and SP
Family Trust, through Trustee Ashokkumar Prahladbhai v. CIT (Guj) . . . 34
Search and seizure :- Block assessment--Return not
submitted in response to notice under section 158BC--Best judgment assessment
valid--Income-tax Act, 1961, ss. 158BB, 158BC-- Alok Todi v. CIT (Cal) . . .
102
Block assessment:- Undisclosed income--Admission
by assessee--Subsequent death of assessee--Legal representatives could not
retract admission--Assessment based on admission--Justified--Income shown in
return filed after search--Not undisclosed income--No evidence of benami
purchase--Value of purchase not assessable--Material not found during
search--Additions based on such material--Not valid--Capital gains on sale of
shares--Not undisclosed income--Income-tax Act, 1961, ss. 158BC, 159-- CIT v.
Late H. R. Basavaraj (Karn) . . . 63
Special deductions :- Computation of special
deductions--Effect of section 80A--Nil total income after setting off
unabsorbed business losses--Special deductions under sections 80-I, 80-IA, 80HH
and 80HHD could not be given--Income-tax Act, 1961, ss. 80A, 80B, 80HH, 80HHD,
80-I, 80-IA-- CIT v. Arif Industries Ltd . (All) . . . 6
Unexplained investment :- Difference between amount
shown in sale deed and that in agreement for sale--No evidence to show
reduction in consideration paid--Addition of difference justified--Findings of
fact--Income-tax Act, 1961, s. 69-- Bela Juneja v. CIT (Delhi) . . . 144
Valuation of property :- Cost of
construction--Undervaluation of closing stock of work-in-progress--Apportionment
of cost not done by valid method--Matter remanded--Income-tax Act, 1961-- CIT
v. Lord Buildcons P. Ltd . (Delhi) . . . 1
Words and phrases :- "Loan"--Meaning of-- CIT
v. Visisth Chay Vypapar Ltd .(Delhi) . . . 157
SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Constitution of India :
Arts. 19, 21, 32 :- Fundamental rights--Double
taxation avoidance--Prohibition on disclosure of documents--Scope
of--Information relating to unaccounted monies held in secret bank accounts
outside India--How far to be divulged--Balance between fundamental right of
citizen to seek information and fundamental right of privacy of account
holder--Names of those where no presumption of wrongdoing not to be divulged--
Ram Jethmalani v. Union of India (SC) . . . 107
Double Taxation Avoidance Agreement between India and Germany :
Art. 26 :- Fundamental rights--Double
taxation avoidance--Prohibition on disclosure of documents--Scope
of--Information relating to unaccounted monies held in secret bank accounts
outside India--How far to be divulged--Balance between fundamental right of
citizen to seek information and fundamental right of privacy of account
holder--Names of those where no presumption of wrongdoing not to be divulged--
Ram Jethmalani v. Union of India (SC) . . . 107
Income-tax Act, 1961 :
S. 5(2) :- Non-resident--Permanent
establishment--Office in India rendering services--Office in India a business
connection--Finding that assessee's income chargeable to tax in India under
section 5(2) and business connection in India according section
9(1)(i)--Assessee has permanent establishment in India--Double Taxation
Avoidance Agreement between India and the United Kingdom-- Rolls Royce PLC v.
Director of Income-tax, International Taxation (Delhi) . . . 147
S. 9(1)(i) :- Non-resident--Permanent
establishment--Office in India rendering services--Office in India a business
connection--Finding that assessee's income chargeable to tax in India under
section 5(2) and business connection in India according section
9(1)(i)--Assessee has permanent establishment in India--Double Taxation
Avoidance Agreement between India and the United Kingdom-- Rolls Royce PLC v.
Director of Income-tax, International Taxation (Delhi) . . . 147
S. 35D :- Business
expenditure--Amortisation of preliminary expenses--Expenditure on issue of
shares--Matter remanded to find whether assessee was an industrial
undertaking-- CIT v. Tulip Star Hotels Ltd. (Delhi) . . . 91
S. 36 :- Bad debt--Leasing and
money-lending business--Assessee standing guarantee for loan--Default by
creditor--Amount written off--Deductible--Deposit for allotment of
shares--Deposit earning interest--Shares not issued and deposit not
returned--Amount deductible as bad debt-- CIT v. Tulip Star Hotels Ltd .
(Delhi) . . . 91
S. 41(1) :- Business income--Remission or
cessation of trading liability--Waiver of loan taken for purchase of capital
asset--Not in revenue field--Loan written off in cash credit account--Taxable
income-- Rollatainers Ltd . v. CIT (Delhi) . . . 54
S. 69 :- Unexplained
investment--Difference between amount shown in sale deed and that in agreement
for sale--No evidence to show reduction in consideration paid--Addition of
difference justified--Findings of fact-- Bela Juneja v. CIT (Delhi) . . . 144
S. 80A :- Special
deductions--Computation of special deductions--Effect of section 80A--Nil total
income after setting off unabsorbed business losses--Special deductions under
sections 80-I, 80-IA, 80HH and 80HHD could not be given-- CIT v. Arif
Industries Ltd . (All) . . . 6
S. 80B :- Special
deductions--Computation of special deductions--Effect of section 80A--Nil total
income after setting off unabsorbed business losses--Special deductions under
sections 80-I, 80-IA, 80HH and 80HHD could not be given-- CIT v. Arif
Industries Ltd . (All) . . . 6
S. 80HH :- New industrial undertaking--Special
deduction under section 80HH--Unit located at backward area, independent unit
and profit making--Receipts on job work done at unit qualify for
deduction--Assessee entitled to special deduction-- Sundaram Fasteners Ltd . v.
CIT (Mad) . . . 40
Special deductions:- Computation of special
deductions--Effect of section 80A--Nil total income after setting off
unabsorbed business losses--Special deductions under sections 80-I, 80-IA, 80HH
and 80HHD could not be given-- CIT v. Arif Industries Ltd . (All) . . . 6
S. 80HHD :- Special
deductions--Computation of special deductions--Effect of section 80A--Nil total
income after setting off unabsorbed business losses--Special deductions under
sections 80-I, 80-IA, 80HH and 80HHD could not be given-- CIT v. Arif
Industries Ltd . (All) . . . 6
S. 80-I :- Revision--Commissioner--Industrial
undertaking--Special deduction under section 80-I--Small scale industrial
undertaking--Notice of revision not taking into account certificate granted by
State Government--Not valid-- SJ and SP Family Trust, through Trustee
Ashokkumar Prahladbhai v. CIT (Guj) . . . 34
Special deductions:- Computation of special
deductions--Effect of section 80A--Nil total income after setting off
unabsorbed business losses--Special deductions under sections 80-I, 80-IA, 80HH
and 80HHD could not be given-- CIT v. Arif Industries Ltd . (All) . . . 6
S. 80-IA :- Industrial
undertaking--Special deduction--Interest--Interest received on overdue payments
for goods supplied--Is income derived from business of industrial
undertaking--Entitled to deduction-- CIT v. Advance Detergents Ltd . (Delhi) .
. . 81
Special deductions:- Computation of special
deductions--Effect of section 80A--Nil total income after setting off
unabsorbed business losses--Special deductions under sections 80-I, 80-IA, 80HH
and 80HHD could not be given-- CIT v. Arif Industries Ltd . (All) . . . 6
S. 115C :- Non-resident--Concessional
rate of tax--Foreign exchange asset--Definition--Interest earned on deposits of
sums brought from abroad--Not a foreign exchange asset--Interest on redeposited
interest--Not entitled to benefit under section 115H-- Dr. M. Manohar v. Asst.
CIT (Mad) . . . 49
S. 115H :- Non-resident--Concessional
rate of tax--Foreign exchange asset--Definition--Interest earned on deposits of
sums brought from abroad--Not a foreign exchange asset--Interest on redeposited
interest--Not entitled to benefit under section 115H-- Dr. M. Manohar v. Asst.
CIT (Mad) . . . 49
S. 127 :- Reassessment--Transfer of
case--No order of transfer--Assessment in Kolkata--Notice for reassessment by
Assessing Officer of Delhi--Not valid-- Smt. Smriti Kedia v. Union of India
(Cal) . . . 37
S. 148 :- Reassessment--Transfer of
case--No order of transfer--Assessment in Kolkata--Notice for reassessment by
Assessing Officer of Delhi--Not valid-- Smt. Smriti Kedia v. Union of India
(Cal) . . . 37
S. 154 :- Rectification of
mistakes--Condition precedent--Mistake should be apparent on record--Failure to
charge interest under sections 234B and 234C before allowing credit for minimum
alternate tax--Debatable question--Interest could not be levied in
rectification proceedings-- CIT v. Bilag Industries P. Ltd . (Guj) . . . 46
S. 158BB :- Search and seizure--Block
assessment--Return not submitted in response to notice under section
158BC--Best judgment assessment valid-- Alok Todi v. CIT (Cal) . . . 102
S. 158BC :- Search and seizure--Block
assessment--Return not submitted in response to notice under section
158BC--Best judgment assessment valid-- Alok Todi v. CIT (Cal) . . . 102
Search and seizure:- Block assessment--Undisclosed
income--Admission by assessee--Subsequent death of assessee--Legal
representatives could not retract admission--Assessment based on
admission--Justified--Income shown in return filed after search--Not
undisclosed income--No evidence of benami purchase--Value of purchase not
assessable--Material not found during search--Additions based on such
material--Not valid--Capital gains on sale of shares--Not undisclosed income--
CIT v. Late H. R. Basavaraj (Karn) . . . 63
S. 159 :- Search and seizure--Block
assessment--Undisclosed income--Admission by assessee--Subsequent death of
assessee--Legal representatives could not retract admission--Assessment based
on admission--Justified--Income shown in return filed after search--Not
undisclosed income--No evidence of benami purchase--Value of purchase not
assessable--Material not found during search--Additions based on such
material--Not valid--Capital gains on sale of shares--Not undisclosed income--
CIT v. Late H. R. Basavaraj (Karn) . . . 63
S. 234B :- Rectification of
mistakes--Condition precedent--Mistake should be apparent on record--Failure to
charge interest under sections 234B and 234C before allowing credit for minimum
alternate tax--Debatable question--Interest could not be levied in rectification
proceedings-- CIT v. Bilag Industries P. Ltd . (Guj) . . . 46
S. 234C :- Rectification of
mistakes--Condition precedent--Mistake should be apparent on record--Failure to
charge interest under sections 234B and 234C before allowing credit for minimum
alternate tax--Debatable question--Interest could not be levied in
rectification proceedings-- CIT v. Bilag Industries P. Ltd . (Guj) . . . 46
S. 260A :- Appeal to High Court--Grounds
not raised before Assessing Officer or Tribunal cannot be raised for first time
before High Court-- Alok Todi v. CIT (Cal) . . . 102
S. 263 :- Revision--Commissioner--Industrial
undertaking--Special deduction under section 80-I--Small scale industrial
undertaking--Notice of revision not taking into account certificate granted by
State Government--Not valid-- SJ and SP Family Trust, through Trustee
Ashokkumar Prahladbhai v. CIT (Guj) . . . 34
Interest-tax Act, 1974 :
Ss. 2(7), 5 :- Interest-tax--Charge of
tax--Loan or advance--Tests--Intercorporate deposits--Not in nature of loan or
advances--Not chargeable to tax-- CIT v. Visisth Chay Vypapar Ltd . (Delhi) . .
. 157
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