ITR Volume 352 Part 5 (Issue dated 6-5-2013)

INCOME TAX REPORTS (ITR)

Volume 352 Part 5 (Issue dated 6-5-2013)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Appeal to High Court --Substantial question of law--Concession recorded during course of hearing--Not to be disputed in appeal--Income-tax Act, 1961, s. 260A-- Dr. Gurvinder Singh Randhawa v . CIT (P&H) . . . 616
Business expenditure --Accounting--Expenses under heads provision for completed expenses and expenses incurred on completed projects --Allowable--Income-tax Act, 1961-- CIT v . Ansal Properties and Industries Ltd . (Delhi) . . . 637
----Disallowance--Maintenance of accommodation for employees and executives for duration of projects outside India--Intention of employer not to provide for guest house--Expenses allowable--Income-tax Act, 1961, s. 37(4), (5)-- CIT v . Ansal Properties and Industries Ltd . (Delhi) . . . 637
----Warranty--Provision for installation and service charges payable under warranty in respect of office equipment--Provision not made on any scientific data and past experience--Not allowable--Income-tax Act, 1961, s. 37-- CIT v . Forbes Campbell Finance Ltd. (Mad) . . . 602
Capital gains --Long-term capital gains--Principle of owelty--Family settlement--Payment to assessee to compensate inequalities in partition of assets--Amount paid is immovable property--No capital gains arise--Income-tax Act, 1961-- CIT v. Ashwani Chopra (P&H) . . . 620
----Transfer--Disputes among family members--Arbitration and family arrangement--Adjustment of shares among family members does not amount to transfer within the meaning of section 45--No capital gains arises--Income-tax Act, 1961, s. 45-- CIT v. R. Nagaraja Rao (Karn) . . . 565
Depreciation --Motor cars used outside India for business and commercial activities--Expenses for upkeeping vehicles--Entitled to depreciation--Income-tax Act, 1961, s. 32(1)(ii)-- CIT v . Ansal Properties and Industries Ltd . (Delhi) . . . 637
Export --Special deduction--Addition on account of surrendering amount as income on account of excess valuation of closing stock--Concurrent finding that assessee satisfied condition for grant of deduction to the extent of excess closing stock valuation--Assessee entitled to deduction--Income-tax Act, 1961, s. 80HHC-- CIT v . Haswani Arts (Raj) . . . 574
Income --Disallowance of expenditure in earning tax-free income--Assessee using its own funds for investments in shares and using borrowed funds entirely for its business purposes--No finding that any expenditure by way of interest was incurred in respect of investments--Disallowance under section 14A not justified--Income-tax Act, 1961, s. 14A-- CIT v . Gujarat Power Corporation Ltd . (Guj) . . . 583
Infrastructure facility --Special deduction--Explanation that person executing works contract not eligible for deduction--Intrinsic difference between developing infrastructure facility and executing works contract--Explanation clarificatory--Introduction in 2009 with effect from 2000--Not a case of retrospective levy or withdrawal of deduction with retrospective effect--Valid--Income-tax Act, 1961, s. 80-IA(4), (13), Expln.-- Katira Construction Ltd. v . Union of India (Guj) . . . 513
Interpretation of taxing statutes --Explanation--Scope of-- Katira Construction Ltd . v . Union of India (Guj) . . . 513
Legislative powers --Parliament--Taxation--Power to legislate with retrospective effect-- Katira Construction Ltd . v . Union of India (Guj) . . . 513
Penalty --Excess claim to depreciation--Wrong claim to loss as revenue expenditure--Mistakes rectified during assessment proceedings since time to file revised return expired--No dispute that mistake bona fide--No penalty leviable--Income-tax Act, 1961, s. 271(1)(c)-- CIT v. Somany Evergree Knits Ltd . (Bom) . . . 592
----Furnishing inaccurate particulars--Property held as stock-in-trade--Conversion of stock-in-trade into investment just before sale of property to pay lower tax--Furnishing inaccurate particulars of income--Levy of penalty justified--Income-tax Act, 1961, s. 271(1)(c)-- CIT v. Splender Construction (Delhi) . . . 588
Reassessment --Condition precedent--Tangible material regarding escapement of income--Reason for notice must be given and objections disposed of by speaking order--Special deduction under section 80-IB(10) granted in original assessment--Reassessment withdrawing special deduction--Objections not heard--Order of reassessment--Not valid--Income-tax Act, 1961, ss. 80-IB(10), 147, 148-- Vishwanath Engineers v . Asst. CIT (Guj) . . . 549
----Writ--Existence of alternative remedy--Not an absolute bar for issue of writ--Appeal subsequent to filing of writ petition--Petition admitted and affidavit filed--Writ petition could not be dismissed--Income-tax Act, 1961, s. 148--Constitution of India, art. 226-- Vishwanath Engineers v . Asst. CIT (Guj) . . . 549
Residence --Conditions precedent for considering Indian citizen or person of Indian origin a resident--Residence in India for a period exceeding 365 days in the immediately preceding four years and residence during previous year for period of 182 days--Conditions cumulative--Individual residing in India for more than 365 days in immediately preceding four years but residing for less than 182 days in previous year--Not a resident--Income-tax Act, 1961, s. 6-- CIT v . Suresh Nanda (Delhi) . . . 611
Search and seizure --Retention of seized assets--Dispute between assessee and its partners regarding ownership of seized jewellery--Suit pending before civil court--High Court setting aside order of Commissioner entrusting jewellery to one partner and remanding matter for redetermination--Order of Commissioner treating jewellery as belonging to one partner and levying interest under section 220(2)--Power of Commissioner to waive or reduce interest--Matter remanded--Income-tax Act, 1961, ss. 132, 132B, 220(2)--R oxy Industrial Corporation v. CIT (P&H) . . . 569
Settlement of cases --Settlement Commission--Power of review--Rectification of mistakes--Order of Commission charging interest contrary to Circular and decision of Supreme Court--Revision of order by way of rectification--Impermissible--Income-tax Act, 1961, ss. 154, 245D-- Smt. U. Narayanamma v. Government of India
(AP) . . . 598
Undisclosed income --Assessee a surgeon--Addition on account of undisclosed surgeries--Tribunal reducing average rate of surgery than that declared by assessee--Average rate of surgery based upon number of surgeries performed by assessee in one year and income earned therefrom--Assessee not entitled to contend that flat rate applied by Tribunal arbitrary--Income-tax Act, 1961-- Dr. Gurvinder Singh Randhawa v . CIT (P&H) . . . 616
Unexplained investment --Investment in property--No evidence that extra consideration received--Addition to income based solely on report of District Valuation Officer--Not valid--Income-tax Act, 1961, s. 69B-- CIT v . Sadhna Gupta
(Delhi) . . . 595
----Unexplained expenditure--Effect of section 69B--Condition precedent for application of provision--No evidence to establish understatement of purchase price--No addition by treating investment as undisclosed--Wealth-tax Act, 1957, Sch. III, r. 3--Income-tax Act, 1961, s. 69B-- CIT v . Dinesh Jain (HUF) (Delhi) . . . 629

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Constitution of India :
Art. 226 --Reassessment--Writ--Existence of alternative remedy--Not an absolute bar for issue of writ--Appeal subsequent to filing of writ petition--Petition admitted and affidavit filed--Writ petition could not be dismissed-- Vishwanath Engineers v . Asst. CIT (Guj) . . . 549
Income-tax Act, 1961 :
S. 6 --Residence--Conditions precedent for considering Indian citizen or person of Indian origin a resident--Residence in India for a period exceeding 365 days in the immediately preceding four years and residence during previous year for period of 182 days--Conditions cumulative--Individual residing in India for more than 365 days in immediately preceding four years but residing for less than 182 days in previous year--Not a resident-- CIT v . Suresh Nanda (Delhi) . . . 611
S. 14A --Income--Disallowance of expenditure in earning tax-free income--Assessee using its own funds for investments in shares and using borrowed funds entirely for its business purposes--No finding that any expenditure by way of interest was incurred in respect of investments--Disallowance under section 14A not justified-- CIT v . Gujarat Power Corporation Ltd . (Guj) . . . 583
S. 32(1)(ii) --Depreciation--Motor cars used outside India for business and commercial activities--Expenses for upkeeping vehicles--Entitled to depreciation-- CIT v . Ansal Properties and Industries Ltd . (Delhi) . . . 637
S. 37 --Business expenditure--Warranty--Provision for installation and service charges payable under warranty in respect of office equipment--Provision not made on any scientific data and past experience--Not allowable-- CIT v . Forbes Campbell Finance Ltd. (Mad) . . . 602
S. 37(4) --Business expenditure--Disallowance--Maintenance of accommodation for employees and executives for duration of projects outside India--Intention of employer not to provide for guest house--Expenses allowable-- CIT v . Ansal Properties and Industries Ltd . (Delhi) . . . 637
S. 37(5) --Business expenditure--Disallowance--Maintenance of accommodation for employees and executives for duration of projects outside India--Intention of employer not to provide for guest house--Expenses allowable-- CIT v . Ansal Properties and Industries Ltd . (Delhi) . . . 637
S. 45 --Capital gains--Transfer--Disputes among family members--Arbitration and family arrangement--Adjustment of shares among family members does not amount to transfer within the meaning of section 45--No capital gains arises-- CIT v. R. Nagaraja Rao (Karn) . . . 565
S. 69B --Unexplained investment--Investment in property--No evidence that extra consideration received--Addition to income based solely on report of District Valuation Officer--Not valid-- CIT v . Sadhna Gupta (Delhi) . . . 595
----Unexplained investment--Unexplained expenditure--Effect of section 69B--Condition precedent for application of provision--No evidence to establish understatement of purchase price--No addition by treating investment as undisclosed-- CIT v . Dinesh Jain (HUF) (Delhi) . . . 629
S. 80HHC --Export--Special deduction--Addition on account of surrendering amount as income on account of excess valuation of closing stock--Concurrent finding that assessee satisfied condition for grant of deduction to the extent of excess closing stock valuation--Assessee entitled to deduction-- CIT v . Haswani Arts (Raj) . . . 574
S. 80-IA(4) --Infrastructure facility--Special deduction--Explanation that person executing works contract not eligible for deduction--Intrinsic difference between developing infrastructure facility and executing works contract--Explanation clarificatory--Introduction in 2009 with effect from 2000--Not a case of retrospective levy or withdrawal of deduction with retrospective effect--Valid-- Katira Construction Ltd. v . Union of India (Guj) . . . 513
S. 80-IA(13), Expln. --Infrastructure facility--Special deduction--Explanation that person executing works contract not eligible for deduction--Intrinsic difference between developing infrastructure facility and executing works contract--Explanation clarificatory--Introduction in 2009 with effect from 2000--Not a case of retrospective levy or withdrawal of deduction with retrospective effect--Valid-- Katira Construction Ltd. v . Union of India (Guj) . . . 513
S. 80-IB(10) --Reassessment--Condition precedent--Tangible material regarding escapement of income--Reason for notice must be given and objections disposed of by speaking order--Special deduction under section 80-IB(10) granted in original assessment--Reassessment withdrawing special deduction--Objections not heard--Order of reassessment--Not valid-- Vishwanath Engineers v . Asst. CIT (Guj) . . . 549
S. 132 --Search and seizure--Retention of seized assets--Dispute between assessee and its partners regarding ownership of seized jewellery--Suit pending before civil court--High Court setting aside order of Commissioner entrusting jewellery to one partner and remanding matter for redetermination--Order of Commissioner treating jewellery as belonging to one partner and levying interest under section 220(2)--Power of Commissioner to waive or reduce interest--Matter remanded--R oxy Industrial Corporation v. CIT (P&H) . . . 569
S. 132B --Search and seizure--Retention of seized assets--Dispute between assessee and its partners regarding ownership of seized jewellery--Suit pending before civil court--High Court setting aside order of Commissioner entrusting jewellery to one partner and remanding matter for redetermination--Order of Commissioner treating jewellery as belonging to one partner and levying interest under section 220(2)--Power of Commissioner to waive or reduce interest--Matter remanded--R oxy Industrial Corporation v. CIT (P&H) . . . 569
S. 147 --Reassessment--Condition precedent--Tangible material regarding escapement of income--Reason for notice must be given and objections disposed of by speaking order--Special deduction under section 80-IB(10) granted in original assessment--Reassessment withdrawing special deduction--Objections not heard--Order of reassessment--Not valid-- Vishwanath Engineers v . Asst. CIT (Guj) . . . 549
S. 148 --Reassessment--Condition precedent--Tangible material regarding escapement of income--Reason for notice must be given and objections disposed of by speaking order--Special deduction under section 80-IB(10) granted in original assessment--Reassessment withdrawing special deduction--Objections not heard--Order of reassessment--Not valid-- Vishwanath Engineers v . Asst. CIT (Guj) . . . 549
----Reassessment--Writ--Existence of alternative remedy--Not an absolute bar for issue of writ--Appeal subsequent to filing of writ petition--Petition admitted and affidavit filed--Writ petition could not be dismissed-- Vishwanath Engineers v . Asst. CIT (Guj) . . . 549
S. 154 --Settlement of cases--Settlement Commission--Power of review--Rectification of mistakes--Order of Commission charging interest contrary to Circular and decision of Supreme Court--Revision of order by way of rectification--Impermissible-- Smt. U. Narayanamma v. Government of India (AP) . . . 598
S. 220(2) --Search and seizure--Retention of seized assets--Dispute between assessee and its partners regarding ownership of seized jewellery--Suit pending before civil court--High Court setting aside order of Commissioner entrusting jewellery to one partner and remanding matter for redetermination--Order of Commissioner treating jewellery as belonging to one partner and levying interest under section 220(2)--Power of Commissioner to waive or reduce interest--Matter remanded--R oxy Industrial Corporation v. CIT (P&H) . . . 569
S. 245D --Settlement of cases--Settlement Commission--Power of review--Rectification of mistakes--Order of Commission charging interest contrary to Circular and decision of Supreme Court--Revision of order by way of rectification--Impermissible-- Smt. U. Narayanamma v. Government of India (AP) . . . 598
S. 260A --Appeal to High Court--Substantial question of law--Concession recorded during course of hearing--Not to be disputed in appeal-- Dr. Gurvinder Singh Randhawa v . CIT (P&H) . . . 616
S. 271(1)(c) --Penalty--Excess claim to depreciation--Wrong claim to loss as revenue expenditure--Mistakes rectified during assessment proceedings since time to file revised return expired--No dispute that mistake bona fide--No penalty leviable-- CIT v. Somany Evergree Knits Ltd . (Bom) . . . 592
----Penalty--Furnishing inaccurate particulars--Property held as stock-in-trade--Conversion of stock-in-trade into investment just before sale of property to pay lower tax--Furnishing inaccurate particulars of income--Levy of penalty justified-- CIT v. Splender Construction (Delhi) . . . 588
Wealth-tax Act, 1957 :
Sch. III, r. 3 --Unexplained investment--Unexplained expenditure--Effect of section 69B--Condition precedent for application of provision--No evidence to establish understatement of purchase price--No addition by treating investment as undisclosed-- CIT v . Dinesh Jain (HUF) (Delhi) . . . 629
ITR’S TRIBUNAL TAX REPORTS (ITR (TRIB))

ITR (Trib) HIGHLIGHTS Volume 12 Part 7 ISSUE DATED 12-12-2011

ITR'S TRIBUNAL TAX REPORTS (ITR (Trib)) HIGHLIGHTS
ISSUE DATED 12-12-2011
Volume 12 Part 7

APPELLATE TRIBUNAL ORDERS



--> Disclosure of capital gains after search not proof of bona fides of assessee, penalty leviable : Dy. CIT v. Metal Rolling Works Ltd. (Mumbai) p. 628

--> Salary paid to member of society not unreasonable considering qualification, assessee entitled to exemption u/s. 13(2)(c) : Young Scholars Educational Society v. ITO (Chandigarh) p. 640

--> Addition not based on evidence found during course of search, deletion of penalty justified : Asst. CIT v. Shanti Bai Yadav (Jaipur) p. 646

--> Purchaser neither legal representative nor agent of legal heirs of owner of land, reassessment not valid : ITO v.Siddharth S. Patel (Ahmedabad) p. 653

--> Transfer pricing : Interest income, rent receipts, dividend receipts, penalty collected, rent deposits returned, foreign exchange fluctuations and profit on sale of assets not part of operational income, matter remanded : DHL Express (India) P. Ltd. v. Asst. CIT (Mumbai) p. 658

--> Claim for depreciation at appropriate rate treating transaction as lease transaction, not concealment of income, penalty cannot be levied : Comet Leasing and Finance Ltd. v. Asst. CIT (Delhi) p. 667

--> Requirement for claim by unit in software technology park notified by Commerce Ministry under Foreign Trade (Development and Regulation) Act not satisfied, assessee not entitled to exemption u/s. 10A : Dy. CIT v. IBS Software Services P. Ltd. (Cochin) p. 675

--> Expenses incurred in travelling, telecommunication, consultancy charges not includible in total turnover : Dy. CIT v. IBS Software Services P. Ltd. (Cochin) p. 675

--> Royalty : Payment for software cannot be treated as payment for use of copyright in the software : Addl. DIT (International Tax) v. TII Team Telecom International P. Ltd. (Mumbai) p. 688

--> Non-resident : Where all matches played in foreign countries, advertisement revenues not taxable in India : Nimbus Sport International Pte. Ltd. v. Dy. DIT (Delhi) p. 709

ITR (TRIB) Volume 12 : Part 4 (Issue dated : 21-11-2011)

ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))

Volume 12 : Part 4 (Issue dated : 21-11-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Bad debts ::-Writing off debit balances of creditors--Deduction allowable--Income-tax Act, 1961, s. 36-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

Business expenditure :-Disallowance:-Excessive payment of royalty--Disallowance on ground that no change in know-how provided and products manufactured--Not reason to enhance payment--Matter remanded--Income-tax Act, 1961, s. 40A(2)(b)-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

--Expenditure on foreign training of director’s so::-No evidence that expenditure for benefit of business of assessee-company--Expenditure not deductible--Income-tax Act, 1961, s. 37-- Vishesh Entertainment Ltd. v. Asst. CIT (Mumbai) . . . 337

Repairs expenses to plant and machinery:-No opportunity to furnish bills--Matter remanded--Income-tax Act, 1961-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

Capital or revenue expenditure :-Expenditure on know-how for manufacture--Know-how not owned by assessee but by collaborator--Is revenue expenditure--Income-tax Act, 1961-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

Expenditure on licence fee:-Revenue expenditure--Income-tax Act, 1961-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

Charitable purpose :-Education institution--Voluntary donations permissible--No proof that assessee collected capitation fee--Not violation of section 13(1)(c)--Assessee eligible for exemption under sections 11 and 12--Income-tax Act, 1961, ss. 11, 13(1)(c), 164(1)-- Saveetha Institute of Medical and Technical Sciences v. Asst. CIT (Chennai) . . . 376

Current repairs :-Scope of section 31--Expenditure on repairs of building--Allowable as revenue expenditure--Income-tax Act, 1961, s. 31-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

Income from undisclosed sources :-Document alleged to evidence sale of land by assessee--Proof of possession remaining with assessee, cancellation of transaction and return of advance--Addition to be deleted--Income-tax Act, 1961-- Mansi Builders Ltd. v. Asst. CIT (Ahmedabad) . . . 358

Industrial undertaking :-Special deduction under section 80-IA--Computation--Electricity generated by assessee collects by Electricity Board and releases to assessee whenever required--Assessee neither selling nor buying as far as captive consumption of power is concerned--Assessee paid consumption of power more than contribution--Market value to be taken for computation--Income-tax Act, 1961, s. 80-IA-- Sri Velayudhaswamy Spinning Mills P. Ltd. v. Deputy CIT (Chennai) . . . 353

Special deduction:-Condition precedent--Assessee a private telephone exchange operating as agent of BSNL--Purely commercial venture not involving development of infrastructure--Not entitled to special deduction--Income-tax Act, 1961, s. 80-IA(4)(ii).-- ITO v. Smt. A. Jayalakshmi (Chennai) . . . 371

International transactions :-Arm’s length price--Transfer pricing--Import of coal made by assessee from its associate enterprise over-invoiced--Assessee not furnishing any comparable data--Addition proper--Income-tax Act, 1961, s. 92CA(3)-- Coastal Energy P. Ltd. v. Asst. CIT (Chennai) . . . 347

Penalty :-Concealment of income--Claim for deduction under section 80-IB--Disallowance of certain expenses--Penalty on account of notional reallocation of expenditure between two units--Reallocation a debatable issue--Addition on account of interest from fixed deposit--Finding by Tribunal that amount incorrectly claimed by assessee --Not concealment of income--Penalty cannot be imposed--Income-tax Act, 1961, ss. 80-IB, 271(1)(c)-- ITO v. Shilpa Filaments P. Ltd. (Ahmedabad) . . . 324

Concealment of income:-Failure to deduct tax at source--Assessee disclosing amount in accounts--Not case of concealment of income--Penalty to be deleted--Income-tax Act, 1961, ss. 40(a)(ia), 271(1)(c)-- New Horizon India Ltd. v. Deputy CIT (Delhi) . . . 332

Refund :-Interest on tax refund--To be taxed--Income-tax Act, 1961-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

Search and seizure :-Assessment--Addition based on statement recorded under section 132(4)--Not proper--Addition to be deleted--Income-tax Act, 1961, s. 132(4)--Circular No. 286/2/2003-IT-- Saveetha Institute of Medical and Technical Sciences v. Asst. CIT (Chennai) . . . 376

Seizure of cash:-Cash established to be fees paid by students--Addition to be deleted--Income-tax Act, 1961-- Saveetha Institute of Medical and Technical Sciences v. Asst. CIT (Chennai) . . . 376

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961 :

S. 11 :-Charitable purpose--Education institution--Voluntary donations permissible--No proof that assessee collected capitation fee--Not violation of section 13(1)(c)--Assessee eligible for exemption under sections 11 and 12-- Saveetha Institute of Medical and Technical Sciences v. Asst. CIT (Chennai) . . . 376

S. 13(1)(c) :-Charitable purpose--Education institution--Voluntary donations permissible--No proof that assessee collected capitation fee--Not violation of section 13(1)(c)--Assessee eligible for exemption under sections 11 and 12-- Saveetha Institute of Medical and Technical Sciences v. Asst. CIT (Chennai) . . . 376

S. 31 :-Current repairs--Scope of section 31--Expenditure on repairs of building--Allowable as revenue expenditure-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

S. 36 :-Bad debts--Writing off debit balances of creditors--Deduction allowable-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

S. 37 :-Business expenditure--Expenditure on foreign training of director’s son--No evidence that expenditure for benefit of business of assessee-company--Expenditure not deductible-- Vishesh Entertainment Ltd. v. Asst. CIT (Mumbai) . . . 337

S. 40(a)(ia) :-Penalty--Concealment of income--Failure to deduct tax at source--Assessee disclosing amount in accounts--Not case of concealment of income--Penalty to be deleted-- New Horizon India Ltd. v. Deputy CIT (Delhi) . . . 332

S. 40A(2)(b) :-Business expenditure--Disallowance--Excessive payment of royalty--Disallowance on ground that no change in know-how provided and products manufactured--Not reason to enhance payment--Matter remanded-- FAG Bearing India Ltd. v. Deputy CIT (Ahmedabad) . . . 395

S. 80-IA :-Industrial undertaking--Special deduction under section 80-IA--Computation--Electricity generated by assessee collects by Electricity Board and releases to assessee whenever required--Assessee neither selling nor buying as far as captive consumption of power is concerned--Assessee paid consumption of power more than contribution--Market value to be taken for computation-- Sri Velayudhaswamy Spinning Mills P. Ltd. v. Deputy CIT (Chennai) . . . 353

S. 80-IA(4)(ii) :-Industrial undertaking--Special deduction--Condition precedent--Assessee a private telephone exchange operating as agent of BSNL--Purely commercial venture not involving development of infrastructure--Not entitled to special deduction-- ITO v. Smt. A. Jayalakshmi (Chennai) . . . 371

S. 80-IB :-Penalty--Concealment of income--Claim for deduction under section 80-IB--Disallowance of certain expenses--Penalty on account of notional reallocation of expenditure between two units--Reallocation a debatable issue--Addition on account of interest from fixed deposit--Finding by Tribunal that amount incorrectly claimed by assessee--Not concealment of income--Penalty cannot be imposed-- ITO v. Shilpa Filaments P. Ltd. (Ahmedabad) . . . 324

S. 92CA(3) :-International transactions--Arm’s length price--Transfer pricing--Import of coal made by assessee from its associate enterprise over-invoiced--Assessee not furnishing any comparable data--Addition proper-- Coastal Energy P. Ltd. v. Asst. CIT (Chennai) . . . 347

S. 132(4) :-Search and seizure--Assessment--Addition based on statement recorded under section 132(4)--Not proper--Addition to be deleted--Circular No. 286/2/2003-IT -- Saveetha Institute of Medical and Technical Sciences v. Asst. CIT (Chennai) . . . 376

S. 164(1) :-Charitable purpose--Education institution--Voluntary donations permissible--No proof that assessee collected capitation fee--Not violation of section 13(1)(c) --Assessee eligible for exemption under sections 11 and 12-- Saveetha Institute of Medical and Technical Sciences v. Asst. CIT (Chennai) . . . 376

S. 271(1)(c) :-Penalty--Concealment of income--Claim for deduction under section 80-IB--Disallowance of certain expenses--Penalty on account of notional reallocation of expenditure between two units--Reallocation a debatable issue--Addition on account of interest from fixed deposit--Finding by Tribunal that amount incorrectly claimed by assessee--Not

concealment of income--Penalty cannot be imposed-- ITO v. Shilpa Filaments P. Ltd. (Ahmedabad) . . . 324:

Penalty--Concealment of income:-Failure to deduct tax at source--Assessee disclosing amount in accounts--Not case of concealment of income--Penalty to be deleted--New Horizon India Ltd. v. Deputy CIT (Delhi) . . . 332