ITR Volume 351 Part 5 (Issue dated 25-3-2013)

INCOME TAX REPORTS (ITR) Volume 351 Part 5 (Issue dated 25-3-2013)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

SUPREME COURT

Right to information --Exemption from disclosure--Invasion of privacy of individual--Return of income--Information found in income-tax return--Personal and exempt--No case of public interest in disclosure made out--Information not to be disclosed--Right to Information Act, 2005, s. 8(1)(j)-- Girish Ramchandra Deshpande v . Central Information Commissioner . . . 472

HIGH COURTS

Advance tax --Interest--Notice of demand--No direction in assessment order for charging interest--Notice of demand cannot be issued levying interest under section 234B--Income-tax Act, 1961, ss. 143(3), 156, 234B-- CIT v . Dehradun Club Ltd .
(Uttarakhand) . . . 396

Appeal to High Court --Competency of appeal--Circular prescribing monetary limits for appeals by Department--Net tax effect less than prescribed limit--Appeal not maintainable--Income-tax Act, 1961, s. 260A-- ITO v . Ramdas Alva (Karn) . . . 471

Business expenditure --Lease rent--Hire of machinery by assessee--Ownership of machinery remaining with lessor--Assessee having no right to transfer or alienate machinery and obliged to re-deliver equipment upon termination of lease agreement--Agreements accepted as real and genuine--Lease rentals paid on hired machinery allowable as business expenditure--Income-tax Act, 1961, s. 37-- CIT v . Banswara Syntex Ltd . (Raj) . . . 419

Capital or revenue expenditure --Repairs and maintenance--Necessary not only for achieving optimum utilization of machinery but also to extend its economic life--Increase of life of existing assets beyond their original estimated economic life--Increase of profitability of a concern--Not relevant to determine nature of repairs and maintenance--Expenses on repairs and maintenance--Revenue expenditure--Income-tax Act, 1961-- CIT v. Vishal Paper Industries (P&H) . . . 478

Charitable trust --Charitable purpose--Donation for charitable purposes--Exemption--Renewal of exemption--Exemption once granted shall continue in perpetuity--Exemption cannot be withdrawn without issuing notice--CBDT Circulars Nos. 5 of 2010, dated 3-6-2010 and 7 of 2010, dated 27-10-2010--Income-tax Act, 1961, s. 80G-- CIT v. Bhhola Bhandari Charitable Trust (P&H) . . . 469

Exemption --Newly established 100 per cent. export oriented undertaking--Law applicable--Amendment in 1998 extending period of exemption to ten years--Assessee enjoying exemption prior to amendment--Eligible for extended period if eligible for exemption on 1-4-1999--Income-tax Act, 1961, s. 10B-- CIT v . DSL Software Ltd .
(Karn) . . . 385

Export --Special deduction--Computation--
Unabsorbed depreciation and carried forward losses of earlier years to be considered to arrive at profits of business--Cash assistance--Only actual sums received to be considered, not notional receipts--Income-tax Act, 1961, ss. 28(iiib), 72(2), 80HHC, Expln. (baa) -- J. K. Industries Ltd . v. Joint CIT (Karn) . . . 454

----Special deduction--Computation of profits of export--Unabsorbed depreciation of earlier years to be set off for arriving at profits--Income-tax Act, 1961, s. 80HHC-- J. K. Industries Ltd. v . Asst. CIT (Karn) . . . 434

Offences and prosecution --Wilful attempt to evade tax--Provisions of Income-tax Act have overriding effect over criminal law--Framing of charge--Guilt of accused need not be proved--Books of account containing false entries--Proceedings can be initiated under section 276C--Income-tax Act, 1961, s. 276C--Code of Criminal Procedure, 1973, ss. 227, 228, 397, 482-- Dy. CIT v . General Sales P. Ltd . (Delhi) . . . 410

Reassessment --Notice--Industrial undertaking--Pet bottles--Special deduction--Pet bottles not falling within negative list--Assessing Officer allowing deduction after examining evidence--Notices on ground pet bottles falling within negative list--No prima facie view that there were reasons to believe that income had escaped assessment--Notices not valid--Income-tax Act, 1961, ss. 147, 148-- Ajay Kumar Sharma v . CIT (Delhi) . . . 428

----Notice after four years--Conditions precedent--Commission paid to directors allowed after examining nature of payments and agreements with directors--Reopening on ground payment not eligible for deduction as payment could have been made to director who is shareholder as disbursement of profit or dividend--No suppression on part of assessee or failure on part of assessee to state fully and truly all material facts necessary for assessment--Notice not valid--Income-tax Act, 1961, s. 148-- OHM Stock Brokers Pvt. Ltd. v . CIT (Bom) . . . 443

----Notice within four years--No power in Assessing Officer to review assessment--Commission paid to directors--Assessee explaining basis on which decision taken to make payment of commission--Amounts paid to directors assessed as salary income in their hands--Reopening of assessment on change of opinion without tangible material not valid--Income-tax Act, 1961, ss. 36(1)(ii), 148-- OHM Stock Brokers Pvt. Ltd . v. CIT (Bom) . . . 443

Search and seizure --Block assessment--Conditions precedent--Search in premises of father of assessees--Seizure of documents not belonging to assessees--No authorisation of search or search warrants against assessees--Block assessments in hands of assessees under section 158BC--Not valid--Provisions of section 158BD applicable--Income-tax Act, 1961, ss. 158BC, 158BD-- CIT v. Ram Singh (P&H) . . . 391

Writ --High Court--Petitions against assessment orders--Appeals pending before Commissioner (Appeals) or before Tribunal--Challenge to charging of interest--Court will not gone into legal pleas taken by assessee--Remedy in appellate forums--Income-tax Act, 1961, ss. 234B, 234C--Constitution of India, art. 226-- Super Spinning Mills Ltd . v. Asst. CIT (Mad) . . . 401

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Code of Criminal Procedure, 1973 :

S. 227 --Offences and prosecution--Wilful attempt to evade tax--Provisions of Income-tax Act have overriding effect over criminal law--Framing of charge--Guilt of accused need not be proved--Books of account containing false entries--Proceedings can be initiated under section 276C-- Dy. CIT v . General Sales P. Ltd .
(Delhi) . . . 410

S. 228 --Offences and prosecution--Wilful attempt to evade tax--Provisions of Income-tax Act have overriding effect over criminal law--Framing of charge--Guilt of accused need not be proved--Books of account containing false entries--Proceedings can be initiated under section 276C-- Dy. CIT v . General Sales P. Ltd .
(Delhi) . . . 410

S. 397 --Offences and prosecution--Wilful attempt to evade tax--Provisions of Income-tax Act have overriding effect over criminal law--Framing of charge--Guilt of accused need not be proved--Books of account containing false entries--Proceedings can be initiated under section 276C-- Dy. CIT v . General Sales P. Ltd .
(Delhi) . . . 410

S. 482 --Offences and prosecution--Wilful attempt to evade tax--Provisions of Income-tax Act have overriding effect over criminal law--Framing of charge--Guilt of accused need not be proved--Books of account containing false entries--Proceedings can be initiated under section 276C-- Dy. CIT v . General Sales P. Ltd .
(Delhi) . . . 410

Constitution of India :

Art. 226 --Writ--High Court--Petitions against assessment orders--Appeals pending before Commissioner (Appeals) or before Tribunal--Challenge to charging of interest--Court will not gone into legal pleas taken by assessee--Remedy in appellate forums-- Super Spinning Mills Ltd . v. Asst. CIT (Mad) . . . 401

Income-tax Act, 1961 :

S. 10B --Exemption--Newly established 100 per cent. export oriented undertaking--Law applicable--Amendment in 1998 extending period of exemption to ten years--Assessee enjoying exemption prior to amendment--Eligible for extended period if eligible for exemption on 1-4-1999-- CIT v . DSL Software Ltd . (Karn) . . . 385

S. 28(iiib) --Export--Special deduction--Computation--Unabsorbed depreciation and carried forward losses of earlier years to be considered to arrive at profits of business--Cash assistance--Only actual sums received to be considered, not notional receipts-- J. K. Industries Ltd . v. Joint CIT (Karn) . . . 454

S. 36(1)(ii) --Reassessment--Notice within four years--No power in Assessing Officer to review assessment--Commission paid to directors--Assessee explaining basis on which decision taken to make payment of commission--Amounts paid to directors assessed as salary income in their hands--Reopening of assessment on change of opinion without tangible material not valid-- OHM Stock Brokers Pvt. Ltd . v. CIT
(Bom) . . . 443

S. 37 --Business expenditure--Lease rent--Hire of machinery by assessee--Ownership of machinery remaining with lessor--Assessee having no right to transfer or alienate machinery and obliged to re-deliver equipment upon termination of lease agreement--Agreements accepted as real and genuine--Lease rentals paid on hired machinery allowable as business expenditure-- CIT v . Banswara Syntex Ltd . (Raj) . . . 419

S. 72(2) --Export--Special deduction--Computation--Unabsorbed depreciation and carried forward losses of earlier years to be considered to arrive at profits of business--Cash assistance--Only actual sums received to be considered, not notional receipts-- J. K. Industries Ltd . v. Joint CIT (Karn) . . . 454

S. 80G --Charitable trust--Charitable purpose--Donation for charitable purposes--Exemption--Renewal of exemption--Exemption once granted shall continue in perpetuity--Exemption cannot be withdrawn without issuing notice--CBDT Circulars Nos. 5 of 2010, dated 3-6-2010 and 7 of 2010, dated 27-10-2010-- CIT v. Bhhola Bhandari Charitable Trust (P&H) . . . 469

S. 80HHC --Export--Special deduction--Computation of profits of export--Unabsorbed depreciation of earlier years to be set off for arriving at profits-- J. K. Industries Ltd. v . Asst. CIT (Karn) . . . 434

S. 80HHC, Expln. (baa) --Export--Special deduction--Computation--Unabsorbed depreciation and carried forward losses of earlier years to be considered to arrive at profits of business--Cash assistance--Only actual sums received to be considered, not notional receipts-- J. K. Industries Ltd . v. Joint CIT (Karn) . . . 454

S. 143(3) --Advance tax--Interest--Notice of demand--No direction in assessment order for charging interest--Notice of demand cannot be issued levying interest under section 234B-- CIT v . Dehradun Club Ltd . (Uttarakhand) . . . 396

S. 147 --Reassessment--Notice--Industrial undertaking--Pet bottles--Special deduction--Pet bottles not falling within negative list--Assessing Officer allowing deduction after examining evidence--Notices on ground pet bottles falling within negative list--No prima facie view that there were reasons to believe that income had escaped assessment--Notices not valid-- Ajay Kumar Sharma v . CIT (Delhi) . . . 428

S. 148 --Reassessment--Notice--Industrial undertaking--Pet bottles--Special deduction--Pet bottles not falling within negative list--Assessing Officer allowing deduction after examining evidence--Notices on ground pet bottles falling within negative list--No prima facie view that there were reasons to believe that income had escaped assessment--Notices not valid-- Ajay Kumar Sharma v . CIT (Delhi) . . . 428

----Reassessment--Notice after four years--Conditions precedent--Commission paid to directors allowed after examining nature of payments and agreements with directors--Reopening on ground payment not eligible for deduction as payment could have been made to director who is shareholder as disbursement of profit or dividend--No suppression on part of assessee or failure on part of assessee to state fully and truly all material facts necessary for assessment--Notice not valid-- OHM Stock Brokers Pvt. Ltd. v . CIT (Bom) . . . 443

----Reassessment--Notice within four years--No power in Assessing Officer to review assessment--Commission paid to directors--Assessee explaining basis on which decision taken to make payment of commission--Amounts paid to directors assessed as salary income in their hands--Reopening of assessment on change of opinion without tangible material not valid-- OHM Stock Brokers Pvt. Ltd . v. CIT (Bom) . . . 443

S. 156 --Advance tax--Interest--Notice of demand--No direction in assessment order for charging interest--Notice of demand cannot be issued levying interest under section 234B-- CIT v . Dehradun Club Ltd . (Uttarakhand) . . . 396

S. 158BC --Search and seizure--Block assessment--Conditions precedent--Search in premises of father of assessees--Seizure of documents not belonging to assessees--No authorisation of search or search warrants against assessees--Block assessments in hands of assessees under section 158BC--Not valid--Provisions of section 158BD applicable-- CIT v. Ram Singh (P&H) . . . 391

S. 158BD --Search and seizure--Block assessment--Conditions precedent--Search in premises of father of assessees--Seizure of documents not belonging to assessees--No authorisation of search or search warrants against assessees--Block assessments in hands of assessees under section 158BC--Not valid--Provisions of section 158BD applicable-- CIT v. Ram Singh (P&H) . . . 391

S. 234B --Advance tax--Interest--Notice of demand--No direction in assessment order for charging interest--Notice of demand cannot be issued levying interest under section 234B-- CIT v . Dehradun Club Ltd . (Uttarakhand) . . . 396

----Writ--High Court--Petitions against assessment orders--Appeals pending before Commissioner (Appeals) or before Tribunal--Challenge to charging of interest--Court will not gone into legal pleas taken by assessee--Remedy in appellate forums-- Super Spinning Mills Ltd . v. Asst. CIT (Mad) . . . 401

S. 234C --Writ--High Court--Petitions against assessment orders--Appeals pending before Commissioner (Appeals) or before Tribunal--Challenge to charging of interest--Court will not gone into legal pleas taken by assessee--Remedy in appellate forums-- Super Spinning Mills Ltd . v. Asst. CIT (Mad) . . . 401

S. 260A --Appeal to High Court--Competency of appeal--Circular prescribing monetary limits for appeals by Department--Net tax effect less than prescribed limit--Appeal not maintainable-- ITO v . Ramdas Alva (Karn) . . . 471

S. 276C --Offences and prosecution--Wilful attempt to evade tax--Provisions of Income-tax Act have overriding effect over criminal law--Framing of charge--Guilt of accused need not be proved--Books of account containing false entries--Proceedings can be initiated under section 276C-- Dy. CIT v . General Sales P. Ltd .
(Delhi) . . . 410

Right to Information Act, 2005 :

S. 8(1)(j) --Right to information--Exemption from disclosure--Invasion of privacy of individual--Return of income--Information found in income-tax return--Personal and exempt--No case of public interest in disclosure made out--Information not to be disclosed-- Girish Ramchandra Deshpande v . Central Information Commissioner
(SC) . . . 472

ITR Volume 352 Part 1 (Issue dated 8-4-2013)

INCOME TAX REPORTS (ITR) Volume 352 Part 1 (Issue dated 8-4-2013)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Business expenditure --Contingent or ascertained liability--Liability on account of wage revision--Liability certain--Liability deductible--Income-tax Act, 1961, s. 37-- CIT v. Bharat Heavy Electricals Ltd . (Delhi) . . . 88

----Donation for charitable institutions which would benefit assessee's employees--No details furnished regarding donations--Donations not deductible under section 37--Income-tax Act, 1961, s. 37-- CIT v. Bharat Heavy Electricals Ltd .
(Delhi) . . . 88

----Fines and penalties--Assessee taking business decision not to honour its commitment of fulfilling export entitlement in view of losses--Encashment of bank guarantee by Export Promotion Council--Payment recorded as penalty in assessee's books and claimed as deduction--No contravention of any provisions of law--Compensatory in nature--Allowable--Income-tax Act, 1961, s. 37(1)-- CIT v . Regalia Apparels Pvt. Ltd. (Bom) . . . 71

Exemption --Interest on tax-free bonds--Scope of section 10(15)--Interest for period between application for allotment and actual allotment--Entitled to exemption--Income-tax Act, 1961, s. 10(15)-- CIT v. Bharat Heavy Electricals Ltd .
(Delhi) . . . 88

Export --Special deduction--Computation--
Miscellaneous income--Is part of total turnover for purposes of deduction--Income-tax Act, 1961, s. 80HHC-- CIT v . Infosys Technologies Ltd . (Karn) . . . 74

----Special deduction--Cut and polished marble blocks--Extent of cutting and polishing not prescribed--Process should add value--Assessee eligible for deduction--Income-tax Act, 1961, s. 80HHC, Sch. XII, entry (x)--Circular No. 693 dated 17-11-1994-- CIT v . Arihant Tiles and Marbles Pvt. Ltd . (Raj) . . . 20

----Special deduction--Dividend and interest receipts--Ninety per cent. of net receipts, included in profits, and not of gross receipts for arriving at profits--Income-tax Act, 1961, s. 80HHC-- CIT v . Infosys Technologies Ltd . (Karn) . . . 74

Export of computer software --Special deduction--Computation of profits--Expenditure incurred in foreign exchange by providing technical services outside India--Whether to be reduced from export turnover and total turnover--Matter remanded--Income-tax Act, 1961, s. 80HHE-- CIT v . Infosys Technologies Ltd .
(Karn) . . . 74

Income --Non-banking financial company--Mercantile system--Interest on non-performing assets--Provision for non-performing assets--Characterisation as non-performing assets alone not sufficient--Uncertainty in realization of income or interest to be proved--Nothing to indicate interest non-recoverable--Whether uncertainty of interest accrued--Matter remanded to Assessing Officer to decide issue afresh--Income-tax Act, 1961-- CIT v . Sakthi Finance Ltd . (Mad) . . . 102

Income from house property --Income from business--Construction business--Rental income from unsold flats--Assessable as income from house property--Income-tax Act, 1961, ss. 14, 22-- Azimganj Estate Pvt. Ltd. v. CIT (Cal) . . . 82

Interest on borrowed capital --Assessee allowing its directors and family members to use its funds for their personal benefits--No attempt by directors to repay loan--No evidence showing loan without interest given for business purposes--Interest not allowable--Income-tax Act, 1961, s. 36(1)(iii)-- CIT v. Sahu Enterprises Pvt. Ltd .
(All) . . . 8

Offences and prosecution --Compounding of offences--Revised guidelines--Condition that compounding cannot be done in cases where order of conviction has been passed--Assessee to show sufficient cause or reason to support request for compounding of offence--Direction to consider application on the merits--Income-tax Act, 1961, s. 276CC-- V. G. Paneerdas and Co. P. Ltd . v. Secretary, Central Board of Direct Taxes (Mad) . . . 77

Penalty --Concealment of income--Failure to furnish accurate particulars--Disallowance of claim and imposition of penalty on basis of subsequent Supreme Court decision--Not furnishing of inaccurate particulars--Penalty levied not justified--Income-tax Act, 1961, s. 271(1)(c)-- CIT v . Celetronix Power India P. Ltd . (Bom) . . . 70

----Concealment of income--Survey--Surrender of income without explanation--Not voluntary disclosure--Furnishing inaccurate particulars--Penalty justified--Income-tax Act, 1961, s. 271(1)(c), Expln. 1(A) -- CIT v. Mak Data Ltd . (Delhi) . . . 1

Projects outside India --Special deduction under section 80HHB--Computation of special deduction--Loss in one unit not to be set off against profits in another unit--Income-tax Act, 1961, s. 80HHB-- CIT v . Bharat Heavy Electricals Ltd.
(Delhi) . . . 88

Reassessment --Notice after four years--Authority for Advance Rulings in assessee's case ruling that profits arising from realization of portfolio investments in India be treated as part of business profits of assessee--Claim of loss on sale of shares accepted on basis of ruling--Reopening of assessment on ground earlier ruling not correct in view of subsequent ruling--No failure on part of assessee to disclose fully and truly all material facts necessary for assessment--High Court holding that advance ruling in assessee's case will continue to govern assessee's assessments--Notice not valid--Income-tax Act, 1961, ss. 147, 148-- DIT v. Prudential Assurance Co. Ltd. (Bom) . . . 66

Transfer of case --Assessee must be given opportunity to be heard--Assessee submitted objections to transfer of case to New Delhi and stating hardships that would be caused if such transfer effected--Furnishing personal hearing necessary--Income-tax Act, 1961, s. 127(1)-- Aamby Valley Ltd . v . CIT (Bom) . . . 48

----Assessee must be given opportunity to be heard--Failure to inform assessee of reasons for transfer--Impossible for assessee to put forth its case--Objections of assessee to be considered before taking any decision to confirm or drop notice--Income-tax Act, 1961, s. 127-- Shikshana Prasaraka Mandali v . CIT (Bom) . . . 53

----Transfer from one city to another--Assessee must be given opportunity to be heard--Assessee requesting personal hearing but not afforded one--Order of transfer--Not valid--Income-tax Act, 1961, s. 127-- Sahara Hospitality Ltd . v . CIT
(Bom) . . . 38

Voluntary disclosure of income --Existence of stock, cash and amount of sundry debtors accepted in previous years--Presumption that stock, cash and amount of sundry debtors continued for a short period--Voluntary disclosure not rendered invalid--Voluntary Disclosure of Income Scheme, 1997--Finance Act, 1997, s. 64(2)(ii)-- Jainsons v. ITAT
(Jharkhand) . . . 28

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Finance Act, 1997 :

S. 64(2)(ii) --Voluntary disclosure of income--Existence of stock, cash and amount of sundry debtors accepted in previous years--Presumption that stock, cash and amount of sundry debtors continued for a short period--Voluntary disclosure not rendered invalid-- Jainsons v. ITAT (Jharkhand) . . . 28

Income-tax Act, 1961 :

S. 10(15) --Exemption--Interest on tax-free bonds--Scope of section 10(15)--Interest for period between application for allotment and actual allotment--Entitled to exemption-- CIT v. Bharat Heavy Electricals Ltd . (Delhi) . . . 88

S. 14 --Income from house property--Income from business--Construction business--Rental income from unsold flats--Assessable as income from house property-- Azimganj Estate Pvt. Ltd. v. CIT (Cal) . . . 82

S. 22 --Income from house property--Income from business--Construction business--Rental income from unsold flats--Assessable as income from house property-- Azimganj Estate Pvt. Ltd. v. CIT (Cal) . . . 82

S. 36(1)(iii) --Interest on borrowed capital--Assessee allowing its directors and family members to use its funds for their personal benefits--No attempt by directors to repay loan--No evidence showing loan without interest given for business purposes--Interest not allowable-- CIT v. Sahu Enterprises Pvt. Ltd . (All) . . . 8

S. 37 --Business expenditure--Contingent or ascertained liability--Liability on account of wage revision--Liability certain--Liability deductible-- CIT v. Bharat Heavy Electricals Ltd . (Delhi) . . . 88

----Business expenditure--Donation for charitable institutions which would benefit assessee's employees--No details furnished regarding donations--Donations not deductible under section 37-- CIT v. Bharat Heavy Electricals Ltd .
(Delhi) . . . 88

S. 37(1) --Business expenditure--Fines and penalties--Assessee taking business decision not to honour its commitment of fulfilling export entitlement in view of losses--Encashment of bank guarantee by Export Promotion Council--Payment recorded as penalty in assessee's books and claimed as deduction--No contravention of any provisions of law--Compensatory in nature--Allowable-- CIT v . Regalia Apparels Pvt. Ltd.
(Bom) . . . 71

S. 80HHB --Projects outside India--Special deduction under section 80HHB--Computation of special deduction--Loss in one unit not to be set off against profits in another unit-- CIT v . Bharat Heavy Electricals Ltd. (Delhi) . . . 88

S. 80HHC --Export--Special deduction--Computation--Miscellaneous income--Is part of total turnover for purposes of deduction-- CIT v . Infosys Technologies Ltd .
(Karn) . . . 74

----Export--Special deduction--Dividend and interest receipts--Ninety per cent. of net receipts, included in profits, and not of gross receipts for arriving at profits-- CIT v . Infosys Technologies Ltd . (Karn) . . . 74

S. 80HHC, Sch. XII, entry (x) --Export--Special deduction--Cut and polished marble blocks--Extent of cutting and polishing not prescribed--Process should add value--Assessee eligible for deduction--Circular No. 693 dated 17-11-1994-- CIT v . Arihant Tiles and Marbles Pvt. Ltd . (Raj) . . . 20

S. 80HHE --Export of computer software--Special deduction--Computation of profits--Expenditure incurred in foreign exchange by providing technical services outside India--Whether to be reduced from export turnover and total turnover--Matter remanded-- CIT v . Infosys Technologies Ltd . (Karn) . . . 74

S. 127 --Transfer of case--Assessee must be given opportunity to be heard--Failure to inform assessee of reasons for transfer--Impossible for assessee to put forth its case--Objections of assessee to be considered before taking any decision to confirm or drop notice-- Shikshana Prasaraka Mandali v . CIT (Bom) . . . 53

----Transfer of case--Transfer from one city to another--Assessee must be given opportunity to be heard--Assessee requesting personal hearing but not afforded one--Order of transfer--Not valid-- Sahara Hospitality Ltd . v . CIT (Bom) . . . 38

S. 127(1) --Transfer of case--Assessee must be given opportunity to be heard--Assessee submitted objections to transfer of case to New Delhi and stating hardships that would be caused if such transfer effected--Furnishing personal hearing necessary-- Aamby Valley Ltd . v . CIT (Bom) . . . 48

S. 147 --Reassessment--Notice after four years--Authority for Advance Rulings in assessee's case ruling that profits arising from realization of portfolio investments in India be treated as part of business profits of assessee--Claim of loss on sale of shares accepted on basis of ruling--Reopening of assessment on ground earlier ruling not correct in view of subsequent ruling--No failure on part of assessee to disclose fully and truly all material facts necessary for assessment--High Court holding that advance ruling in assessee's case will continue to govern assessee's assessments--Notice not valid-- DIT v. Prudential Assurance Co. Ltd. (Bom) . . . 66

S. 148 --Reassessment--Notice after four years--Authority for Advance Rulings in assessee's case ruling that profits arising from realization of portfolio investments in India be treated as part of business profits of assessee--Claim of loss on sale of shares accepted on basis of ruling--Reopening of assessment on ground earlier ruling not correct in view of subsequent ruling--No failure on part of assessee to disclose fully and truly all material facts necessary for assessment--High Court holding that advance ruling in assessee's case will continue to govern assessee's assessments--Notice not valid-- DIT v. Prudential Assurance Co. Ltd. (Bom) . . . 66

S. 271(1)(c) --Penalty--Concealment of income--Failure to furnish accurate particulars--Disallowance of claim and imposition of penalty on basis of subsequent Supreme Court decision--Not furnishing of inaccurate particulars--Penalty levied not justified-- CIT v . Celetronix Power India P. Ltd . (Bom) . . . 70

S. 271(1)(c), Expln. 1(A) --Penalty--Concealment of income--Survey--Surrender of income without explanation--Not voluntary disclosure--Furnishing inaccurate particulars--Penalty justified-- CIT v. Mak Data Ltd . (Delhi) . . . 1

S. 276CC --Offences and prosecution--Compounding of offences--Revised guidelines--Condition that compounding cannot be done in cases where order of conviction has been passed--Assessee to show sufficient cause or reason to support request for compounding of offence--Direction to consider application on the merits-- V. G. Paneerdas and Co. P. Ltd . v. Secretary, Central Board of Direct Taxes
(Mad) . . . 77

ITR Volume 352 Part 2 (Issue dated 15-4-2013)

INCOME TAX REPORTS (ITR) Volume 352 Part 2 (Issue dated 15-4-2013)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Advance tax --Interest payable by assessee--Company--Book profit--Computation of income under section 115JB--Law applicable--Effect of amendment of section 115JB by Finance Act, 2002--No liability to pay interest on amount due as advance tax prior to amendment--Income-tax Act, 1961, ss. 115JB, 234B, 234C-- CIT v . Jupiter Bio-Science Ltd . (Karn) . . . 113

Appeal to High Court --Competency of appeal--Effect of section 268A--Monetary limits--Instruction No. 3 of 2011 raising monetary limits--Scope of National Litigation Policy, 2011--Instruction No. 3 of 2011 applicable to pending proceedings--CBDT Instruction No. 3 of 2011, dated February 9, 2011--Income-tax Act, 1961, ss. 260A, 268A-- CIT v. Ranka and Ranka (Karn) . . . 121

----Competency of appeal--Monetary ceiling limits--Instruction No. 3 of 2011, dated February 9, 2011, raising monetary limits--Clause 11 of instruction provides that it applicable to cases filed on or after February 9, 2011--Instruction not applicable to pending cases--CBDT Instruction No. 3 of 2011, dated February 9, 2011--Income-tax Act, 1961, ss. 260A, 268A-- CIT v . Smt. B. Sumangaladevi (Karn) . . . 143

----Competency of appeal--Monetary ceiling limits--Instruction No. 3 of 2011, dated February 9, 2011 raising monetary limits--Whether retrospective--Special leave petition pending before Supreme Court--Liberty to Revenue to revive appeal in the event of success--CBDT Instruction No. 3 of 2011, dated February 9, 2011--Income-tax Act, 1961, s. 260A-- CIT v. Spice Telecom (Karn) . . . 151

Authority for Advance Rulings --Application for ruling--Distinction between admission of application and pronouncement of ruling--No requirement of recording reasons at stage of admission of application--Commissioner or his representative need not be heard at that stage--Hearing Commissioner or his representative before pronouncing advance ruling--Only if Authority considers necessary--Income-tax Act, 1961, s. 245R-- Director of Income-tax (International Taxation) v . AAR
(AP) . . . 185

Business income --Remission or cessation of trading liability--Writing back of gratuity allowed as trading liability in assessment year 1972-73--No remission or cessation of liability--Not taxable during assessment year 1976-77--Income-tax Act, 1961, s. 41(1)-- CIT v . Elgin Mill Co. Ltd . (All) . . . 153

Capital gains --Long-term capital gains--Seizure of copy of sale agreement between wife of assessee and purchaser in survey--Registered sale deed showing lower consideration--Amount shown in sale agreement accepted as purchaser’s investment in her income-tax assessment--Assessment of assessee adopting amount shown in sale agreement justified--Income-tax Act, 1961-- M. Basheer Ahamed v . CIT (Mad) . . . 157

Offences and prosecution --Failure to file return in time--Complaint under section 276CC--Accused paying tax and moving Settlement Commission--Commission granting immunity from penalty for issues involved in settlement application--No immunity by Commission from prosecution already launched--Trial court taking cognizance under section 276CC--Proper--Income-tax Act, 1961, s. 276CC-- Anil Kumar Sinha v. Union of India (Patna) . . . 170

----Wilful attempt to evade tax--Firm--Effect of section 278B--Partners liable unless able to prove innocence--Finding that firm had tried to evade tax--Prosecution of partners could not be quashed--Income-tax Act, 1961, ss. 276C, 276D, 278B--Code of Criminal Procedure, 1973, s. 482-- Deepak Engineering Works v . CIT
(Patna) . . . 161

Search and seizure --Cash seized from third person adjusted towards his tax liability--No material to show that cash seized from him belongs to assessee--Inclusion of cash seized from third person in hands of assessee--Not justified--Income-tax Act, 1961-- CIT v . Smt. B. Sumangaladevi (Karn) . . . 143

Writ --High Court--Absence of efficacious remedy--High Court can go into merits--Admission of application for advance ruling without hearing Department--No infringement of legal rights--No relief--Constitution of India, art. 226-- Director of Income-tax (International Taxation) v . AAR (AP) . . . 185

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Code of Criminal Procedure, 1973 :

S. 482 --Offences and prosecution--Wilful attempt to evade tax--Firm--Effect of section 278B--Partners liable unless able to prove innocence--Finding that firm had tried to evade tax--Prosecution of partners could not be quashed-- Deepak Engineering Works v . CIT (Patna) . . . 161

Constitution of India :

Art. 226 --Writ--High Court--Absence of efficacious remedy--High Court can go into merits--Admission of application for advance ruling without hearing Department--No infringement of legal rights--No relief-- Director of Income-tax (International Taxation) v . AAR (AP) . . . 185

Income-tax Act, 1961 :

S. 41(1) --Business income--Remission or cessation of trading liability--Writing back of gratuity allowed as trading liability in assessment year 1972-73--No remission or cessation of liability--Not taxable during assessment year 1976-77-- CIT v . Elgin Mill Co. Ltd . (All) . . . 153

S. 115JB --Advance tax--Interest payable by assessee--Company--Book profit--Computation of income under section 115JB--Law applicable--Effect of amendment of section 115JB by Finance Act, 2002--No liability to pay interest on amount due as advance tax prior to amendment-- CIT v . Jupiter Bio-Science Ltd . (Karn) . . . 113

S. 234B --Advance tax--Interest payable by assessee--Company--Book profit--Computation of income under section 115JB--Law applicable--Effect of amendment of section 115JB by Finance Act, 2002--No liability to pay interest on amount due as advance tax prior to amendment-- CIT v . Jupiter Bio-Science Ltd . (Karn) . . . 113

S. 234C --Advance tax--Interest payable by assessee--Company--Book profit--Computation of income under section 115JB--Law applicable--Effect of amendment of section 115JB by Finance Act, 2002--No liability to pay interest on amount due as advance tax prior to amendment-- CIT v . Jupiter Bio-Science Ltd . (Karn) . . . 113

S. 245R --Authority for Advance Rulings--Application for ruling--Distinction between admission of application and pronouncement of ruling--No requirement of recording reasons at stage of admission of application--Commissioner or his representative need not be heard at that stage--Hearing Commissioner or his representative before pronouncing advance ruling--Only if Authority considers necessary-- Director of Income-tax (International Taxation) v . AAR (AP) . . . 185

S. 260A --Appeal to High Court--Competency of appeal--Effect of section 268A--Monetary limits--Instruction No. 3 of 2011 raising monetary limits--Scope of National Litigation Policy, 2011--Instruction No. 3 of 2011 applicable to pending proceedings--CBDT Instruction No. 3 of 2011, dated February 9, 2011-- CIT v. Ranka and Ranka
(Karn) . . . 121

----Appeal to High Court--Competency of appeal--Monetary ceiling limits--Instruction No. 3 of 2011, dated February 9, 2011, raising monetary limits--Clause 11 of instruction provides that it applicable to cases filed on or after February 9, 2011--Instruction not applicable to pending cases--CBDT Instruction No. 3 of 2011, dated February 9, 2011-- CIT v . Smt. B. Sumangaladevi (Karn) . . . 143

----Appeal to High Court--Competency of appeal--Monetary ceiling limits--Instruction No. 3 of 2011, dated February 9, 2011 raising monetary limits--Whether retrospective--Special leave petition pending before Supreme Court--Liberty to Revenue to revive appeal in the event of success--CBDT Instruction No. 3 of 2011, dated February 9, 2011-- CIT v. Spice Telecom (Karn) . . . 151

S. 268A --Appeal to High Court--Competency of appeal--Effect of section 268A--Monetary limits--Instruction No. 3 of 2011 raising monetary limits--Scope of National Litigation Policy, 2011--Instruction No. 3 of 2011 applicable to pending proceedings--CBDT Instruction No. 3 of 2011, dated February 9, 2011-- CIT v. Ranka and Ranka
(Karn) . . . 121

----Appeal to High Court--Competency of appeal--Monetary ceiling limits--Instruction No. 3 of 2011, dated February 9, 2011, raising monetary limits--Clause 11 of instruction provides that it applicable to cases filed on or after February 9, 2011--Instruction not applicable to pending cases--CBDT Instruction No. 3 of 2011, dated February 9, 2011-- CIT v . Smt. B. Sumangaladevi (Karn) . . . 143

S. 276C --Offences and prosecution--Wilful attempt to evade tax--Firm--Effect of section 278B--Partners liable unless able to prove innocence--Finding that firm had tried to evade tax--Prosecution of partners could not be quashed-- Deepak Engineering Works v . CIT (Patna) . . . 161

S. 276CC --Offences and prosecution--Failure to file return in time--Complaint under section 276CC--Accused paying tax and moving Settlement Commission--Commission granting immunity from penalty for issues involved in settlement application--No immunity by Commission from prosecution already launched--Trial court taking cognizance under section 276CC--Proper-- Anil Kumar Sinha v. Union of India
(Patna) . . . 170

S. 276D --Offences and prosecution--Wilful attempt to evade tax--Firm--Effect of section 278B--Partners liable unless able to prove innocence--Finding that firm had tried to evade tax--Prosecution of partners could not be quashed-- Deepak Engineering Works v . CIT (Patna) . . . 161

S. 278B --Offences and prosecution--Wilful attempt to evade tax--Firm--Effect of section 278B--Partners liable unless able to prove innocence--Finding that firm had tried to evade tax--Prosecution of partners could not be quashed-- Deepak Engineering Works v . CIT (Patna) . . . 161

ITR Volume 346 Part 3 (Issue dated 20-8-2012)

INCOME TAX REPORTS (ITR)

INCOME TAX REPORTS

Volume 346 Part 3 (Issue dated 20-8-2012)

SUBJECT INDEX TO CASES REPORTED IN THIS PART
HIGH COURTS
Reassessment --Notice after four years--Condition precedent--Failure to disclose material facts necessary for assessment--Amount shown as loan from company--Assessee not disclosing that it had substantial interest in a company--Reassessment proceedings after four years to assess amount as deemed dividend--Valid--Income-tax Act, 1961, ss. 147, 148-- Dishman Pharmaceuticals and Chemicals Limited v. Deputy CIT (OSD) (No. 1 ) (Guj) . . . 228
----Notice after four years--Failure to disclose material facts necessary for assessment--Notice need not specify instances of failure--Sufficient if failure can be inferred--Investigation by customs authorities--Penalty for theft of electricity--Reassessment proceedings valid--Income-tax Act, 1961, ss. 147, 148-- I. P. Patel and Co. v. Deputy CIT
(Guj) . . . 207
----Notice--Validity--Reassessment proceedings found not valid--Reassessment cannot be sustained under another ground not mentioned in notice--Income-tax Act, 1961, ss. 147, 148-- Dishman Pharmaceuticals and Chemicals Ltd . v . Deputy CIT (OSD) (No. 2 ) (Guj) . . . 245
----Reassessment after four years--Assessee disclosing material facts necessary for assessment--Reassessment proceedings to recalculate special deduction under section 80HHC--Not valid--Income-tax Act, 1961, ss. 80HHC, 147, 148-- Dishman Pharmaceuticals and Chemicals Ltd. v . Deputy CIT (OSD) (No. 2 ) (Guj) . . . 245
----Reassessment after four years--Condition precedent--Failure by assessee to disclose material facts--Income from other sources--Claim to deduction of interest against dividend--Fact of borrowings to purchase shares and details of investments disclosed in return and during course of assessment in reply to queries raised by Assessing Officer--Reassessment to disallow deduction on ground interest was not paid for earning dividend but for acquiring controlling interest in company--Not a case of failure to disclose material facts--Reassessment not permissible--Income-tax Act, 1961, ss. 57(iii), 147, 148-- Ketan B. Mehta v . Asst. CIT (Guj) . . . 254
----Reassessment after four years--Condition precedent--Failure by assessee to disclose material facts--Reasons recorded by Assessing Officer must reflect such failure--Reopening of assessment on ground pre-operative expenses capital in nature had been allowed as revenue--Not a case of default by assessee--Reassessment not permissible--Income-tax Act, 1961, ss. 147, 148-- Ashokjyot Oxygen Pvt. Ltd . v . H. N. Patel, ITO
(Guj) . . . 199
----Reassessment after four years--Condition precedent--Failure by assessee to disclose material facts--Reopening of assessment on ground deduction for bad debts erroneously allowed--Not permissible--Income-tax Act, 1961, ss. 147, 148-- V. B. Investments v . Deputy CIT (Guj) . . . 193
----Reassessment after four years--Failure by assessee to disclose material facts--Notice issued to disallow deduction of usance interest paid to non-residents without deduction of tax--No indication of default by assessee--Reopening not permissible--Income-tax Act, 1961, ss. 147, 148-- Priya Blue Industries Pvt. Ltd. v . Deputy CIT
(Guj) . . . 204
----Writ--Powers of High Court--High Court only required to find out if there was prima facie material justifying notice of reassessment--Income-tax Act, 1961, ss. 147, 148--Constitution of India, art. 226-- I. P. Patel and Co. v . Deputy CIT
(Guj) . . . 207
Search and seizure --Assessment of third person--Scope of section 153C--Provision authorises enquiry on satisfaction that valuable articles or documents discovered during search belonged to third person--Such valuable article or document to be handed over to Assessing Officer having jurisdiction over assessee--Not necessary that satisfaction should be recorded that valuable article or document showed undisclosed income--Income-tax Act, 1961, ss. 132, 152A, 153C, 153BD, 158-- SSP Aviation Ltd . v . Deputy CIT (Delhi) . . . 177

INCOME TAX REPORTS Volume 346 Part 4 (Issue dated 27-8-2012)

INCOME TAX REPORTS (ITR)

INCOME TAX REPORTS

Volume 346 Part 4 (Issue dated 27-8-2012)

HIGH COURTS
Advance tax --Interest--No material on record that assessee committed default in payment of advance tax--Tribunal justified in remitting matter to Assessing Officer for decision afresh--Income-tax Act, 1961, s. 234B-- CIT v . Kotak Securities Ltd . (No. 2)
(Bom) . . . 352
Business expenditure --Purchase of software--Is revenue expenditure--Income-tax Act, 1961, s. 37-- CIT v . Amway India Enterprises (Delhi) . . . 341
----Repairs--Current repairs--Is revenue expenditure--Income-tax Act, 1961, s. 37-- CIT v . Amway India Enterprises (Delhi) . . . 341
----Software expenses--Expenditure not to create new asset or a new source of income but to upgrade system--Extent of expenditure cannot be a decisive factor in determining its nature--Treatment in books of account not conclusive--Software expenditure is revenue expenditure--Income-tax Act, 1961, s. 37-- CIT v . Asahi India Safety Glass Ltd . (Delhi) . . . 329
Capital or revenue expenditur e--Software expenses--Allowable--Income-tax Act, 1961-- CIT v . Kotak Securites Ltd . (No. 1) (Bom) . . . 349
Depreciation --First stock exchange membership card--Entitled to depreciation--Income-tax Act, 1961-- CIT v . Kotak Securites Ltd . (No. 1) (Bom) . . . 349
----First stock exchange membership card--Entitled to depreciation--Income-tax Act, 1961-- CIT v. Kotak Securities Ltd . (No. 2) (Bom) . . . 352
Reassessment --Reassessment after four years--Failure by assessee to disclose material facts--Income from other sources--Reopening of assessment to disallow interest on borrowings for purchase of shares--No failure by assessee--Reassessment not permissible--Income-tax Act, 1961, ss. 57(iii), 147, 148-- Ashank D. Desai v . Asst. CIT
(Guj) . . . 326
AUTHORITY FOR ADVANCE RULINGS
Non-resident --Royalty--Provision of social media monitoring service for company, brand or product, for subscribing clients--Subscriptions are royalty chargeable to tax in India--Tax deductible at source on payments--Income-tax Act, 1961, ss. 9(1)(vi), Expln. 2(iv), 195--Double Taxation Avoidance Agreement between India and Singapore, art. 12-- ThoughtBuzz Pvt. Ltd., In re . . . 345

(ITR) Volume 345 Part 5 (Issue dated 16-7-2012) : SUBJECT INDEX TO CASES REPORTED IN THIS PART

INCOME TAX REPORTS (ITR)

Volume 345 Part 5 (Issue dated 16-7-2012)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Business expenditure --Capital or revenue expenditure--Expenditure on renovation of business premises taken on lease--Deductible--Amount paid to lessor not deductible--Income-tax Act, 1961-- CIT v . Lucent Technologies Hindustan Ltd .
(Karn) . . . 407

----Loss on account of fluctuation in rate of foreign exchange--Loss whether deductible--Principles laid down by Supreme Court in Woodward Governor India P. Ltd. 312 ITR 254 applicable--Matter remanded--Income-tax Act, 1961-- CIT v. Lucent Technologies Hindustan Ltd . (Karn) . . . 407

Capital gains --Exemption--Scope of section 54F--Investment of net consideration in residential house--Sale of shares and payment of part of net consideration to developer for construction of residential house--Construction almost complete in three years--Assessee entitled to benefit of section 54F--Income-tax Act, 1961, s. 54F-- CIT v. Sambandam Udaykumar (Karn) . . . 389

Depreciation --Scope of section 32(1)(ii)--Meaning of intangible assets--Business or commercial rights not limited to categories enumerated--Commercial rights facilitating business and right to sell products--Assessee entitled to depreciation in respect of such intangible assets--Income-tax Act, 1961, s. 32(1)(ii)-- Areva T and D India Ltd. v. Deputy CIT (Delhi) . . . 421

Double taxation relief --Income from permanent establishment in man taxed under Oman law--Profits therefrom to be excluded--Double Taxation Avoidance Agreement between India and Oman, art. 7-- CIT v . Essar Oil Ltd . (Bom) . . . 443

Foreign projects --Special deduction--Condition that receipts should be brought into India in foreign exchange--Part of receipts used to repay foreign currency loan and balance repatriated--Assessee entitled to deduction in respect of entire foreign currency earnings--Income-tax Act, 1961, s. 80HHB-- CIT v . Essar Oil Ltd . (Bom) . . . 443

Interpretation of taxing statutes --Principle of ejusdem generis-- Areva T and D India Ltd . v. Deputy CIT (Delhi) . . . 421

----Provision beneficial to assessee-- CIT v. Sambandam Udaykumar (Karn) . . . 389

Penalty --Concealment of income--Credit in accounts discovered to be untrue--Notice of reassessment--Return filed including amount representing credit--Admission of concealment--No burden on Revenue to prove concealment--Assessing Officer directing penalty proceedings in order of assessment--Sufficient to prove satisfaction of Assessing Officer--Levy of penalty--Valid--Income-tax Act, 1961, s. 271(1)(c)-- CIT v. Sangmeshwara Associates (Karn) . . . 396

Precedent --Effect of decision of Supreme Court in Woodward Governor India P. Ltd. 312 ITR 254-- CIT v . Lucent Technologies Hindustan Ltd. (Karn) . . . 407

Reassessment --Notice--Excess claim of depreciation on plant and machinery--Contentions and issues raised for reopening not examined--Matter remanded--Income-tax Act, 1961, ss. 147, 148-- CIT v . Jagson International Ltd . (Delhi) . . . 414

Revision --Commissioner--Special deduction--Industrial undertaking--Assessee having two units, one entitled to deduction and the other not--Revision on ground deduction wrongly granted on interest--Commissioner holding assessment erroneous for lack of enquiry into bifurcation of interest and remanding matter to Assessing Officer--Tribunal setting aside revision going into merits--Not proper--Matter remanded--Income-tax Act, 1961, s. 263-- CIT v . DLF Power Ltd . (Delhi) . . . 446

----Erroneous and prejudicial to Revenue--Exemption--Assessee making export out of two units, one exempt and the other not--Orders booked abroad executed by both units and purchased by common parties--Commission for booking orders abroad debited entirely in account of unit which was not exempt--Failure by Assessing Officer to inquire whether any part of commission attributable to orders placed on and exports made by exempt unit--Revision justified--Income-tax Act, 1961, ss. 10A, 263-- CIT v. Harsh J. Punjabi (Delhi) . . . 451

Wealth-tax --Valuation of asset--Land in excess of limit permitted by Urban Land Ceiling Act--To be valued taking restriction into account, not at market value--Land acquired in 1960--Department accepting direction for valuation for 1988-89 to 1991-92 on basis of compensation under Land Ceiling Act--Valuation for other years at market value without taking into account restriction--Not permissible--Wealth-tax Act, 1957, s. 7-- Aims Oxygen Pvt. Ltd . v . CWT [FB] (Guj) . . . 456

INCOME TAX REPORTS (ITR) Volume 342 : Part 5 (Issue dated 16-4-2012)

INCOME TAX REPORTS (ITR)

Volume 342 : Part 5 (Issue dated 16-4-2012)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Appeal to Appellate Tribunal --Cash credits--Sale of jewellery--Assessing Officer and Commissioner (Appeals) holding transactions of sale to be fictitious--Tribunal not right in setting aside finding without considering evidence--Income-tax Act, 1961, s. 68-- CIT v. Tejinder Singh HUF (P&H) . . . 295

Bad debt --Share broker purchasing shares for his clients--Brokerage credited to profit and loss account--Brokerage receivable from treated as bad debt--Part of debt to be taken into account while computing income--Allowable--Income-tax Act, 1961, s. 36(1)(vii), (2)(i)-- CIT v. Shreyas S. Morakhia (Bom) . . . 285

Business expenditure --Deduction only on actual payment--Excise duty on inputs used in manufacture of goods--Matter remanded to allow opportunity to assessee to produce proof of payment--Income-tax Act, 1961, s. 43B-- CIT v. H. P. Global Soft Ltd. (No. 2 ) (Karn) . . . 276

Capital gains --Exemption--Law applicable--Effect of section 54EA inserted w. e. f. 1-10-1996 and included in ambit of section 54H w. e. f. 1-4-1999--Compulsory acquisition of land in 1992--Enhancement of compensation in 1997--Investment of amount in UTI--Assessee entitled to exemption under section 54EA--Income-tax Act, 1961, ss. 45, 54EA, 54H-- CIT v. J. Palemar Krishna (Karn) . . . 366

Exemption --Export of computer software--No material to show assessee indulged in arrangement with foreign buyer so as to produce higher profits to assessee--Assessing Officer not entitled to presume such arrangement and determine reasonable profits--Income-tax Act, 1961, ss. 10A(6), 80-I(9)-- CIT v. H. P. Global Soft Ltd. (No. 1 )

(Karn) . . . 263

Interpretation of taxing statutes --Interpretation extending benefit intended by Legislature-- CIT v. J. Palemar Krishna (Karn) . . . 366

Method of accounting --Business expenditure--Deduction only on actual payment--Valuation of stock--Unutilised Modvat credit--Deduction of excise duty paid on inputs used in manufacture--Not a question of method of accounting--Assessee to be given opportunity to prove payment of excise duty on inputs--Income-tax Act, 1961, ss. 43B, 145-- CIT v. H. P. Global Soft Ltd. (No. 1 ) (Karn) . . . 263

Non-resident --Agent of non-resident--Assessment proceedings simultaneously against non-resident and his agent--Valid --Income-tax Act, 1961, s. 166-- Aditya Birla Nuvo Ltd . v. Deputy Director of Income-tax (International Taxation)

(Bom) . . . 308

Obsolescence --Customs duty on goods claimed irrecoverable--Matter remanded--Customs duty on computer software--Deduction allowable-- CIT v. H. P. Global Soft Ltd. (No. 2 ) (Karn) . . . 276

Penalty --Concealment of income--Disallowance of payment to Registrar of Companies and payments on which tax deducted at source paid to Government after end of previous year--Assessee can raise contention in penalty proceedings that explanation plausible--Cancellation of penalty justified--Income-tax Act, 1961, s. 271(1)(c)-- CIT v. AT & T Communication Services India P. Ltd. (Delhi) . . . 257

Reassessment --Capital gains--Joint venture by non-resident and an Indian company--Agreement specifying rights of promoters--Transfer of shares from one non-resi-dent to other--Transfer included transfer of rights--Prima facie belief that capital gains arose--Justified--Reassessment proceedings--Valid--Income-tax Act, 1961-- Aditya Birla Nuvo Ltd . v. Deputy Director of Income-tax (International Taxation)

(Bom) . . . 308

Recovery of tax --Interest--Waiver of interest--Law applicable--Effect of amendment of section 220(2A) in 1984--Power to waive should be exercised judiciously--Finding that all conditions for waiver were satisfied--Waiver of part of interest--Not valid--Income-tax Act, 1961, s. 220(2A)--E . M. Joseph v. Chief CIT (Ker) . . . 379

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961 :

S. 10A(6) --Exemption--Export of computer software--No material to show assessee indulged in arrangement with foreign buyer so as to produce higher profits to assessee--Assessing Officer not entitled to presume such arrangement and determine reasonable profits-- CIT v. H. P. Global Soft Ltd. (No. 1 ) (Karn) . . . 263

S. 36(1)(vii) --Bad debt--Share broker purchasing shares for his clients--Brokerage credited to profit and loss account--Brokerage receivable from treated as bad debt--Part of debt to be taken into account while computing income--Allowable-- CIT v. Shreyas S. Morakhia (Bom) . . . 285

S. 36(2)(i) --Bad debt--Share broker purchasing shares for his clients--Brokerage credited to profit and loss account--Brokerage receivable from treated as bad debt--Part of debt to be taken into account while computing income--Allowable-- CIT v. Shreyas S. Morakhia (Bom) . . . 285

S. 43B --Business expenditure--Deduction only on actual payment--Excise duty on inputs used in manufacture of goods--Matter remanded to allow opportunity to assessee to produce proof of payment-- CIT v. H. P. Global Soft Ltd. (No. 2 )

(Karn) . . . 276

----Method of accounting--Business expenditure--Deduction only on actual payment--Valuation of stock--Unutilised Modvat credit--Deduction of excise duty paid on inputs used in manufacture--Not a question of method of accounting--Assessee to be given opportunity to prove payment of excise duty on inputs-- CIT v. H. P. Global Soft Ltd. (No. 1 ) (Karn) . . . 263

S. 45 --Capital gains--Exemption--Law applicable--Effect of section 54EA inserted w. e. f. 1-10-1996 and included in ambit of section 54H w. e. f. 1-4-1999--Compulsory acquisition of land in 1992--Enhancement of compensation in 1997--Investment of amount in UTI--Assessee entitled to exemption under section 54EA-- CIT v. J. Palemar Krishna (Karn) . . . 366

S. 54EA --Capital gains--Exemption--Law applicable--Effect of section 54EA inserted w. e. f. 1-10-1996 and included in ambit of section 54H w. e. f. 1-4-1999--Compulsory acquisition of land in 1992--Enhancement of compensation in 1997--Investment of amount in UTI--Assessee entitled to exemption under section 54EA-- CIT v. J. Palemar Krishna (Karn) . . . 366

S. 54H --Capital gains--Exemption--Law applicable--Effect of section 54EA inserted w. e. f. 1-10-1996 and included in ambit of section 54H w. e. f. 1-4-1999--Compulsory acquisition of land in 1992--Enhancement of compensation in 1997--Investment of amount in UTI--Assessee entitled to exemption under section 54EA-- CIT v. J. Palemar Krishna (Karn) . . . 366

S. 68 --Appeal to Appellate Tribunal--Cash credits--Sale of jewellery--Assessing Officer and Commissioner (Appeals) holding transactions of sale to be fictitious--Tribunal not right in setting aside finding without considering evidence-- CIT v. Tejinder Singh HUF (P&H) . . . 295

S. 80-I(9) --Exemption--Export of computer software--No material to show assessee indulged in arrangement with foreign buyer so as to produce higher profits to assessee--Assessing Officer not entitled to presume such arrangement and determine reasonable profits-- CIT v. H. P. Global Soft Ltd. (No. 1 ) (Karn) . . . 263

S. 145 --Method of accounting--Business expenditure--Deduction only on actual payment--Valuation of stock--Unutilised Modvat credit--Deduction of excise duty paid on inputs used in manufacture--Not a question of method of accounting--Assessee to be given opportunity to prove payment of excise duty on inputs-- CIT v. H. P. Global Soft Ltd. (No. 1 ) (Karn) . . . 263

S. 166 --Non-resident--Agent of non-resident--Assessment proceedings simultaneously against non-resident and his agent--Valid -- Aditya Birla Nuvo Ltd . v. Deputy Director of Income-tax (International Taxation) (Bom) . . . 308

S. 220(2A) --Recovery of tax--Interest--Waiver of interest--Law applicable--Effect of amendment of section 220(2A) in 1984--Power to waive should be exercised judiciously--Finding that all conditions for waiver were satisfied--Waiver of part of interest--Not valid--E . M. Joseph v. Chief CIT (Ker) . . . 379

S. 271(1)(c) --Penalty--Concealment of income--Disallowance of payment to Registrar of Companies and payments on which tax deducted at source paid to Government after end of previous year--Assessee can raise contention in penalty proceedings that explanation plausible--Cancellation of penalty justified-- CIT v. AT & T Communication Services India P. Ltd. (Delhi) . . . 257