ITR Volume 361 : Part 2 (Issue dated : 24-2-2014)

INCOME TAX REPORTS (ITR)--PRINT AND ONLINE EDITION

ONLINE EDITION

SUBJECT INDEX TO CASES REPORTED

HIGH COURTS

Business --Other sources--Business income or income from other sources--Leasing of building equipped for special purposes--Two agreements of lease, one for building and another for amenities--Not conclusive--Income from lease assessable as business income--Income-tax Act, 1961, ss. 28, 56-- CIT v. Velankani Information Systems P. Ltd. (Karn) . . . 138

Capital gains --Computation--Effect of section 50C--Transfer of property to sister concern in view of financial exigency--Transfer for consideration above that prescribed in guidelines--Capital gains could not be computed taking market value of property--Income-tax Act, 1961, ss. 45, 50C-- CIT v. Velankani Information Systems P. Ltd. (Karn) . . . 138

Industrial undertaking --Special deduction under section 80-IA--Condition precedent--Manufacture of article--Meaning of manufacture--Process of converting semi-finished HDPE bags into laminated HDPE bags--Product after processing different and distinct and semi-finished and laminated bags having different use--Process amounted to manufacture--Assessee entitled to special deduction under section 80-IA--Income-tax Act, 1961, s. 80-IA-- Jhaveri Coaters P. Ltd. v. Assistant CIT (Guj) . . . 129

PRINT EDITION

ITR Volume 361 : Part 2 (Issue dated : 24-2-2014)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Appeal to Appellate Tribunal --Duty of Tribunal--Tribunal to record findings supported by reasons to sustain order--Refund of excise duty not includible in total income--Whether arithmetical mistake can be rectified--Tribunal must consider materials placed on record--Matter remanded--Income-tax Act, 1961, ss. 154, 255(6)-- CIT v. GEC Alsthom India Ltd. (Mad) . . . 304

Appeal to High Court --Substantial question of law--Business expenditure--Amounts paid to sub-contractors--Disallowance on ground of non-production of witnesses--Commissioner (Appeals) relying on remand report and supplementary report and partly confirming disallowance--Tribunal exhaustively noting details furnished by parties deleting entire addition--Order based on facts--No question of law--Income-tax Act, 1961, ss. 37, 260A-- CIT v. B. M. S. Projects P. Ltd. (Guj) . . . 195

Business expenditure --Disallowance--Payments on which tax deductible at source--Payment of transportation charges--No disallowance could be made--Income-tax Act, 1961, s. 40(a)(ia)-- CIT v. B. M. S. Projects P. Ltd. (Guj) . . . 195

----Purchase transaction--Tribunal noticing assessee’s books of account as well as sales tax records of seller and finding purchase genuine transaction--No rejection of books of account by authorities--Deletion of addition on account of purchase transaction justified--Income-tax Act, 1961, s. 37-- CIT v. Sunrise Tooling System P. Ltd. (Delhi) . . . 206

Capital or revenue expenditure --Mobile phones and instant messaging--Software development--Product improvement expenses--Expenses on upgrading, improving or removing problem areas in an existing old product--Software upgradation is required to keep and ensure marketability of product--Revenue expenditure--Income-tax Act, 1961-- CIT v. ACL Wireless Ltd. (Delhi) . . . 210

Cash credits --Private company--Share application money--General principles--Assessee not making public issue or advertisement for issuance of share capital--Cash deposited in bank and then utilised by way of an account payee cheque for purchase of shares at premium of Rs. 100 to Rs. 200 per share by unrelated persons and shares thereafter sold to directors at loss--Assessee unable to produce investors--Clear attempt to camouflage accommodation entries--Failure by assessee to discharge initial onus to establish identity, creditworthiness of share applicants and genuineness of transaction--Addition of cash credits justified--Income-tax Act, 1961, s. 68-- CIT v. MAF Academy P. Ltd. (Delhi) . . . 258

----Unexplained investments--Burden of proof--Share application money--Assessee explaining source of money--Identities of applicants and their creditworthiness established--Burden of proof discharged by assessee--Onus shifted to Department--No evidence to show transactions were not genuine--Sections 68 and 69 not applicable--Income-tax Act, 1961, ss. 68, 69-- CIT v. Kamdhenu Steel and Alloys Ltd. (Delhi) . . . 220

Dividend --Deemed dividend--Share application money retained for some months and shares allotted in following year--Tribunal finding amount received by assessee was share application money--Sum cannot be treated as loan or deposit--Not assessable as deemed dividend--Income-tax Act, 1961, s. 2(22)(e)-- CIT v. Alpex Exports Pvt. Ltd. (Delhi) . . . 297

Income-tax survey --Power to call information--Notice to bank calling for information as regards persons having deposits--Valid--Income-tax Act, 1961, s. 133(6)-- Kulathupuzha Service Co-operative Bank Ltd. v. ITO (Intelligence) (Ker) . . . 200

Industrial undertaking --Special deduction under section 80-IB--Condition precedent--Production of article--Bottling of gas into cylinders amounts to production--Assessee entitled to special deduction under section 80-IB--Income-tax Act, 1961, s. 80-IB-- Puttur Petro Products P. Ltd. v. Assistant CIT (Karn) . . . 290

Refund --Interest on excess refund--Assessment for period prior to date of coming into force of provision for charging interest made after that date--Interest chargeable--Income-tax Act, 1961, s. 234D-- CIT v. Fisher Sanmar Ltd. (Mad) . . . 296

Search and seizure --Block assessment--Validity--Issuance of notice under section 143(2)--Mandatory--No specific information in respect of issuance of notice under section 143(2)--Cancellation of block assessment justified--Income-tax Act, 1961, ss. 143(2), 158BC-- CIT v. Pratapbhai K. Soni (Guj) . . . 201

Settlement of cases --Case--Definition--Change of law--Maintainability of application--Pendency of assessment proceedings--Time to make assessment on return filed by assessee for assessment years 2007-08 to 2009-10 barred by limitation when settlement application filed by assessee--Assessment proceedings not pending before Assessing Officer--Income-tax Act, 1961, s. 245D-- Shriniwas Machine Craft P. Ltd. v. ITSC (Bom) . . . 313

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961 :

S. 2(22)(e) --Dividend--Deemed dividend--Share application money retained for some months and shares allotted in following year--Tribunal finding amount received by assessee was share application money--Sum cannot be treated as loan or deposit--Not assessable as deemed dividend-- CIT v. Alpex Exports Pvt. Ltd. (Delhi) . . . 297

S. 37 --Appeal to High Court--Substantial question of law--Business expenditure--Amounts paid to sub-contractors--Disallowance on ground of non-production of witnesses--Commissioner (Appeals) relying on remand report and supplementary report and partly confirming disallowance--Tribunal exhaustively noting details furnished by parties deleting entire addition--Order based on facts--No question of law-- CIT v. B. M. S. Projects P. Ltd. (Guj) . . . 195

----Business expenditure--Purchase transaction--Tribunal noticing assessee’s books of account as well as sales tax records of seller and finding purchase genuine transaction--No rejection of books of account by authorities--Deletion of addition on account of purchase transaction justified-- CIT v. Sunrise Tooling System P. Ltd. (Delhi) . . . 206

S. 40(a)(ia) --Business expenditure--Disallowance--Payments on which tax deductible at source--Payment of transportation charges--No disallowance could be made-- CIT v. B. M. S. Projects P. Ltd. (Guj) . . . 195

S. 68 --Cash credits--Private company--Share application money--General principles--Assessee not making public issue or advertisement for issuance of share capital--Cash deposited in bank and then utilised by way of an account payee cheque for purchase of shares at premium of Rs. 100 to Rs. 200 per share by unrelated persons and shares thereafter sold to directors at loss--Assessee unable to produce investors--Clear attempt to camouflage accommodation entries--Failure by assessee to discharge initial onus to establish identity, creditworthiness of share applicants and genuineness of transaction--Addition of cash credits justified-- CIT v. MAF Academy P. Ltd. (Delhi) . . . 258

----Cash credits--Unexplained investments--Burden of proof--Share application money--Assessee explaining source of money--Identities of applicants and their creditworthiness established--Burden of proof discharged by assessee--Onus shifted to Department--No evidence to show transactions were not genuine--Sections 68 and 69 not applicable-- CIT v. Kamdhenu Steel and Alloys Ltd. (Delhi) . . . 220

S. 69 --Cash credits--Unexplained investments--Burden of proof--Share application money--Assessee explaining source of money--Identities of applicants and their creditworthiness established--Burden of proof discharged by assessee--Onus shifted to Department--No evidence to show transactions were not genuine--Sections 68 and 69 not applicable-- CIT v. Kamdhenu Steel and Alloys Ltd. (Delhi) . . . 220

S. 80-IB --Industrial undertaking--Special deduction under section 80-IB--Condition precedent--Production of article--Bottling of gas into cylinders amounts to production--Assessee entitled to special deduction under section 80-IB-- Puttur Petro Products P. Ltd. v. Assistant CIT (Karn) . . . 290

S. 133(6) --Income-tax survey--Power to call information--Notice to bank calling for information as regards persons having deposits--Valid-- Kulathupuzha Service Co-operative Bank Ltd. v. ITO (Intelligence) (Ker) . . . 200

S. 143(2) --Search and seizure--Block assessment--Validity--Issuance of notice under section 143(2)--Mandatory--No specific information in respect of issuance of notice under section 143(2)--Cancellation of block assessment justified-- CIT v. Pratapbhai K. Soni (Guj) . . . 201

S. 154 --Appeal to Appellate Tribunal--Duty of Tribunal--Tribunal to record findings supported by reasons to sustain order--Refund of excise duty not includible in total income--Whether arithmetical mistake can be rectified--Tribunal must consider materials placed on record--Matter remanded-- CIT v. GEC Alsthom India Ltd. (Mad) . . . 304

S. 158BC --Search and seizure--Block assessment--Validity--Issuance of notice under section 143(2)--Mandatory--No specific information in respect of issuance of notice under section 143(2)--Cancellation of block assessment justified-- CIT v. Pratapbhai K. Soni (Guj) . . . 201

S. 234D --Refund--Interest on excess refund--Assessment for period prior to date of coming into force of provision for charging interest made after that date--Interest chargeable-- CIT v. Fisher Sanmar Ltd. (Mad) . . . 296

S. 245D --Settlement of cases--Case--Definition--Change of law--Maintainability of application--Pendency of assessment proceedings--Time to make assessment on return filed by assessee for assessment years 2007-08 to 2009-10 barred by limitation when settlement application filed by assessee--Assessment proceedings not pending before Assessing Officer-- Shriniwas Machine Craft P. Ltd. v. ITSC (Bom) . . . 313

S. 255(6) --Appeal to Appellate Tribunal--Duty of Tribunal--Tribunal to record findings supported by reasons to sustain order--Refund of excise duty not includible in total income--Whether arithmetical mistake can be rectified--Tribunal must consider materials placed on record--Matter remanded-- CIT v. GEC Alsthom India Ltd. (Mad) . . . 304

S. 260A --Appeal to High Court--Substantial question of law--Business expenditure--Amounts paid to sub-contractors--Disallowance on ground of non-production of witnesses--Commissioner (Appeals) relying on remand report and supplementary report and partly confirming disallowance--Tribunal exhaustively noting details furnished by parties deleting entire addition--Order based on facts--No question of law-- CIT v. B. M. S. Projects P. Ltd. (Guj) . . . 195