Saturday, November 26, 2011

(ITR) Volume 339 : Part 1 (Issue dated 28-11-2011) SUBJECT INDEX TO CASES REPORTED IN THIS PART


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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