ITR Vol 329 Part 4, issue dated 20.12.2010

INCOME TAX REPORTS (ITR)

Volume 329 : Part 4 (Issue dated 20-12-2010)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

(*) Accounting -Compulsory audit of accounts-Compulsory audit required where turnover exceeds forty lakhs of rupees-Meaning of account books-Books recording cash sales and purchase register constitute books of account-Income-tax Act, 1961, s. 2(12A)- CIT v. S. C. Naregal (Karn) . . . 615

 

(*) Compulsory audit of accounts-Failure to get accounts audited-Penalty-Amount received whether commission or profits not relevant-Turnover is the criterion for getting accounts audited-Ignorance of law is no excuse-Penalty to be levied-Income-tax Act, 1961, ss. 44AB, 271B- CIT v. S. C. Naregal (Karn) . . . 615

 

(*) Compulsory audit of accounts-Failure to get accounts audited-Penalty-Limitation-Six months from end of month in which penalty proceedings were initiated-Penalty proceedings initiated in March 2002-Imposition of penalty on 23-9-2002-Not barred by limitation-Income-tax Act, 1961, ss. 44AB, 275- CIT v. S. C. Naregal (Karn) . . . 615

 

(*) Appeal to Appellate Tribunal -Powers of Tribunal-Industrial undertaking-Power to remand-Claim for special deduction in assessment year 2003-04 in respect of business started in the year 1997-98-Tribunal justified in remanding matter-Income-tax Act, 1961, ss. 80-IB, 254- Mrs. Bharti Sharma v. Asst. CIT (Delhi) . . . 534

 

(*) Appeal to High Court -Competency of appeal-Monetary limit fixed by CBDT Circular-No bar for appeal where substantial question of law has been raised-Income-tax Act, 1961, s. 260A- CIT v. S. C. Naregal (Karn) . . . 615

 

(*) Valuation of stock-Stock difference arrived at at time of survey-Worked out on basis of selling price instead of at cost price or market price whichever is less-Finding that there was no supporting evidence to prove there was really a stock difference-No substantial question of law-Income-tax Act, 1961, s. 260A- CIT v. C. Jayantilal (Mad) . . . 530

 

(*) Appeal to Supreme Court -Effect of decision of Supreme Court-Interpretation of provision from the beginning of its existence-Income-tax Act, 1961- Kartikeya International v. CIT (All) . . . 539

 

(*) Assessment -Special audit-Change of law-Condition precedent-Assessee to be given opportunity to be heard-Assessee must be informed that hearing is for considering approval for special audit-Prior to participation in hearing, assessee to be given access to material on basis of which approval for special audit proposed to be granted-Furnishing such material at hearing not sufficient-Income-tax Act, 1961, s. 142(2A)- Indian Aluminium Co. Ltd. v. Deputy CIT (Cal) . . . 550

 

(*) Audit -Order for special audit-Writ-High Court can consider whether there was material for issuing order-Sufficiency of material cannot be considered-Income-tax Act, 1961, s. 142(2A)-Constitution of India, art. 226- Purvanchal Vidyut Vitran Nigam Ltd. v. Union of India (All) . . . 508

 

(*) Special audit-Accounts found to be complex-Order in the interests of Revenue-Order for special audit-Valid-Income-tax Act, 1961, s. 142(2A)- Purvanchal Vidyut Vitran Nigam Ltd . v. Union of India (All) . . . 508

 

(*) Business expenditure -Business loss-Illegal gratification for procuring car dealership not reflected in books of account-No business set up-Loss not allowable-Not permissible expenditure-Income-tax Act, 1961, s. 37- CIT v. Jagdish Chand Gupta (P&H) . . . 583

 

(*) Capital gains -Business income-Capital gains or business income-Assessee developing land and getting a portion of it as consideration-Assessee not engaged in developing real estate-Amount spent on developing land constituted sale consideration of portion of land obtained-Gains on sale of land-Assessable as capital gains-Income-tax Act, 1961, ss. 28, 45- CIT v. S. Rajamannar (Karn) . . . 626

 

(*) Commissioner -Revision-Assessing Officer failing to tax cash seized and later surrendered by assessee-Assessment order erroneous and prejudicial to interest of Revenue-Invocation of section 263 proper-Income-tax Act, 1961, s. 263-CIT v. Jagdish Chand Gupta (P&H) . . . 583

 

(*) Company -Minimum alternate tax-Advance tax-Interest-MAT credit to be given before charging interest under sections 234B and 234C-Income-tax Act, 1961, ss. 115JAA, 234B, 234C- CIT v. Salora International Ltd. (Delhi) . . . 568

 

(*) Income -Accrual of income-Mercantile system of accounting-Income must accrue- Devsons Pvt. Ltd. v. CIT (Delhi) . . . 483

 

(*) Income-tax enquiry -Notice to furnish particulars in connection with proceedings under sections 201 and 271C-Notice under section 131-Prior permission of Director/Commissioner not needed-Income-tax Act, 1961, ss. 131, 133, 201, 271C- Thaliparamba Municipal Vanitha Service Sahakarana Sangham Ltd. v. ITO (Ker) . . . 609

 

(*) Investment allowance -Condition precedent-Creation of reserve-Law applicable-Effect of amendment of sections 32A and 34 with retrospective effect-Reserve need not be created in a year in which loss has been incurred or where profits are insufficient-Income-tax Act, 1961, ss 32A, 34- CIT v. Nagaland Roller Flour Mills Ltd. (Guwahati) . . . 631

 

(*) Penalty -Concealment of income-Appeal to Appellate Tribunal-Findings in appeal from assessment not binding-Tribunal to examine material afresh and decide whether penalty for concealment or furnishing inaccurate particulars justified-Income-tax Act, 1961, s. 271(1)(c)- Devsons Pvt. Ltd. v. CIT (Delhi) . . . 483

 

(*) Concealment of income-Business expenditure-Sundry creditors-Sums due to sub-contractors but not paid-Claim substantiated by log book verified by authorities and tax deducted on sums credited to sub-contractors-Claim accepted in other years-Not a case of furnishing inaccurate particulars-Income-tax Act, 1961, s. 271(1)(c)- Devsons Pvt. Ltd. v. CIT (Delhi) . . . 483

 

(*) Concealment of income-Contractor-Total bills raised against municipality disclosed but sums deducted by municipality not shown in gross receipts-Matter in dispute and High Court finally holding against assessee-Not a case of concealment-Not a case of change of method of accounting from mercantile to cash-Income-tax Act, 1961, s. 271(1)(c)- Devsons Pvt. Ltd. v. CIT (Delhi) . . . 483

 

(*) Concealment of income-Debatable claim to deduction-Not a case of furnishing inaccurate particulars-Income-tax Act, 1961, s. 271(1)(c)- Devsons Pvt. Ltd. v. CIT (Delhi) . . . 483

 

(*) Furnishing inaccurate particulars-Industrial undertaking-Special deduction-Disallowance of claim to deduction-Not a case of furnishing inaccurate particulars of income-Penalty not leviable-Income-tax Act, 1961, ss. 80-IA, 80-IB, 271(1)(c)- CIT v. Dharampal Premchand Ltd. (Delhi) . . . 572

 

(*) Precedent -Effect of decision in Liberty India v. CIT [2009] 317 ITR 218- Kartikeya International v. CIT (All) . . . 539

 

(*) Reassessment -Notice-Notice within four years-Notice based on Supreme Court decision-Notice valid-Income-tax Act, 1961, ss. 147, 148- Kartikeya International v. CIT (All) . . . 539

 

(*) Objections of assessee not considered-Reassessment set aside-Matter remanded-Income-tax Act, 1961- IOT Infrastructure and Energy Services Ltd. v. Asst. CIT (Bom) . . . 547

 

(*) Rectification of mistake -Mistake apparent from record-Assessing Officer disallowing deduction of bad debts-Tribunal holding entire amount including interest allowable-Assessee filing a rectification application for treating interest also as bad debt-Question not covered by original assessment-Issue not debatable or subject-matter of appeal-"Record" includes record available with Assessing Officer-Rectification can be done-Income-tax Act, 1961, s. 154- CIT v. Lakshmi Vilas Bank (Mad) . . . 591

 

(*) Interest charged under sections 234B and 234C without allowing MAT credit-Debatable issue-Interest cannot be charged in rectification proceedings-Income-tax Act, 1961, ss. 115JAA, 154, 234B, 234C- CIT v. Salora International Ltd .(Delhi) . . . 568

 

(*) Revision -Commissioner-Where two views possible, Assessing Officer adopting one view-Revision not permissible-Income-tax Act, 1961, s. 263- CIT v. Saluja Exim Ltd . (P&H) . . . 603

 

(*) Undisclosed income -Assessee surrendering amount seized-Statement admitting sum paid as illegal gratification for car dealership-Statement corroborated by circumstances not shown to be erroneous-Retraction after four months-Is an afterthought-Sum represents undisclosed income of assessee-Income-tax Act, 1961, s. 69- CIT v. Jagdish Chand Gupta (P&H) . . . 583

 

(*) Unexplained investment -Finding that investments had been satisfactorily explained-No addition could be made under section 69-Income-tax Act, 1961, s. 69- CIT v. Ashok Arora (P&H) . . . 578

 

(*) Wealth-tax -Reassessment-Property valued at much higher figure in income-tax return-Reassessment proceedings based on such return-Valid-Wealth-tax Act, 1957, s. 17- P. K. Kurian v. Asst. CWT (Ker) . . . 529

 

(*) Writ -Order of Tribunal rectifying its order on merits-Rejection of application for rectification on question of reopening of assessment-Writ-Proper remedy is appeal-Writ petition not maintainable-Income-tax Act, 1961, s. 260A- Lakshmi Vilas Bank Ltd. v. ITAT (Mad) . . . 564

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Constitution of India :

(*) Art. 226 -Audit-Order for special audit-Writ-High Court can consider whether there was material for issuing order-Sufficiency of material cannot be considered- Purvanchal Vidyut Vitran Nigam Ltd. v. Union of India (All) . . . 508

 

Income-tax Act, 1961 :

(*) S. 2(12A) -Accounting-Compulsory audit of accounts-Compulsory audit required where turnover exceeds forty lakhs of rupees-Meaning of account books-Books recording cash sales and purchase register constitute books of account- CIT v. S. C. Naregal (Karn) . . . 615

 

(*) S. 28 -Capital gains-Business income-Capital gains or business income-Assessee developing land and getting a portion of it as consideration-Assessee not engaged in developing real estate-Amount spent on developing land constituted sale consideration of portion of land obtained-Gains on sale of land-Assessable as capital gains- CIT v. S. Rajamannar (Karn) . . . 626

 

(*) S. 32A -Investment allowance-Condition precedent-Creation of reserve-Law applicable-Effect of amendment of sections 32A and 34 with retrospective effect-Reserve need not be created in a year in which loss has been incurred or where profits are insufficient- CIT v. Nagaland Roller Flour Mills Ltd. (Guwahati) . . . 631

 

(*) S. 34 -Investment allowance-Condition precedent-Creation of reserve-Law applicable-Effect of amendment of sections 32A and 34 with retrospective effect-Reserve need not be created in a year in which loss has been incurred or where profits are insufficient- CIT v. Nagaland Roller Flour Mills Ltd. (Guwahati) . . . 631

 

(*) S. 37 -Business expenditure-Business loss-Illegal gratification for procuring car dealership not reflected in books of account-No business set up-Loss not allowable-Not permissible expenditure- CIT v. Jagdish Chand Gupta (P&H) . . . 583

 

(*) S. 44AB -Accounting-Compulsory audit of accounts-Failure to get accounts audited-Penalty-Amount received whether commission or profits not relevant-Turnover is the criterion for getting accounts audited-Ignorance of law is no excuse-Penalty to be levied- CIT v. S. C. Naregal (Karn) . . . 615

 

(*) Accounting-Compulsory audit of accounts-Failure to get accounts audited-Penalty-Limitation-Six months from end of month in which penalty proceedings were initiated-Penalty proceedings initiated in March 2002-Imposition of penalty on 23-9-2002-Not barred by limitation- CIT v. S. C. Naregal (Karn) . . . 615

 

(*) S. 45 -Capital gains-Business income-Capital gains or business income-Assessee developing land and getting a portion of it as consideration-Assessee not engaged in developing real estate-Amount spent on developing land constituted sale consideration of portion of land obtained-Gains on sale of land-Assessable as capital gains- CIT v. S. Rajamannar (Karn) . . . 626

 

(*) S. 69 -Undisclosed income-Assessee surrendering amount seized-Statement admitting sum paid as illegal gratification for car dealership-Statement corroborated by circumstances not shown to be erroneous-Retraction after four months-Is an afterthought-Sum represents undisclosed income of assessee- CIT v. Jagdish Chand Gupta (P&H) . . . 583

 

(*) Unexplained investment-Finding that investments had been satisfactorily explained-No addition could be made under section 69- CIT v. Ashok Arora (P&H) . . . 578

 

(*) S. 80-IA -Penalty-Furnishing inaccurate particulars-Industrial undertaking-Special deduction-Disallowance of claim to deduction-Not a case of furnishing inaccurate particulars of income-Penalty not leviable- CIT v. Dharampal Premchand Ltd. (Delhi) . . . 572

 

(*) S. 80-IB -Appeal to Appellate Tribunal-Powers of Tribunal-Industrial undertaking-Power to remand-Claim for special deduction in assessment year 2003-04 in respect of business started in the year 1997-98-Tribunal justified in remanding matter- Mrs. Bharti Sharma v. Asst. CIT (Delhi) . . . 534

 

(*) Penalty-Furnishing inaccurate particulars-Industrial undertaking-Special deduction-Disallowance of claim to deduction-Not a case of furnishing inaccurate particulars of income-Penalty not leviable- CIT v. Dharampal Premchand Ltd. (Delhi) . . . 572

 

(*) S. 115JAA -Company-Minimum alternate tax-Advance tax-Interest-MAT credit to be given before charging interest under sections 234B and 234C- CIT v. Salora International Ltd. (Delhi) . . . 568

 

(*) Rectification of mistake-Interest charged under sections 234B and 234C without allowing MAT credit-Debatable issue-Interest cannot be charged in rectification proceedings- CIT v. Salora International Ltd . (Delhi) . . . 568

 

(*) S. 131 -Income-tax enquiry-Notice to furnish particulars in connection with proceedings under sections 201 and 271C-Notice under section 131-Prior permission of Director/Commissioner not needed- Thaliparamba Municipal Vanitha Service Sahakarana Sangham Ltd. v. ITO (Ker) . . . 609

 

(*) S. 133 -Income-tax enquiry-Notice to furnish particulars in connection with proceedings under sections 201 and 271C-Notice under section 131-Prior permission of Director/Commissioner not needed- Thaliparamba Municipal Vanitha Service Sahakarana Sangham Ltd. v. ITO (Ker) . . . 609

 

(*) S. 142(2A) -Assessment-Special audit-Change of law-Condition precedent-Assessee to be given opportunity to be heard-Assessee must be informed that hearing is for considering approval for special audit-Prior to participation in hearing, assessee to be given access to material on basis of which approval for special audit proposed to be granted-Furnishing such material at hearing not sufficient- Indian Aluminium Co. Ltd. v. Deputy CIT (Cal) . . . 550

 

(*) Audit-Special audit-Accounts found to be complex-Order in the interests of Revenue-Order for special audit-Valid- Purvanchal Vidyut Vitran Nigam Ltd . v. Union of India (All) . . . 508

 

(*) Audit-Order for special audit-Writ-High Court can consider whether there was material for issuing order-Sufficiency of material cannot be considered- Purvanchal Vidyut Vitran Nigam Ltd. v. Union of India (All) . . . 508

 

(*) S. 147 -Reassessment-Notice-Notice within four years-Notice based on Supreme Court decision-Notice valid- Kartikeya International v. CIT (All) . . . 539

 

(*) S. 148 -Reassessment-Notice-Notice within four years-Notice based on Supreme Court decision-Notice valid- Kartikeya International v. CIT (All) . . . 539

 

(*) S. 154 -Rectification of mistake-Interest charged under sections 234B and 234C without allowing MAT credit-Debatable issue-Interest cannot be charged in rectification proceedings- CIT v. Salora International Ltd . (Delhi) . . . 568

 

(*) Rectification of mistake-Mistake apparent from record-Assessing Officer disallowing deduction of bad debts-Tribunal holding entire amount including interest allowable-Assessee filing a rectification application for treating interest also as bad debt-Question not covered by original assessment-Issue not debatable or subject-matter of appeal-"Record" includes record available with Assessing Officer-Rectification can be done- CIT v. Lakshmi Vilas Bank (Mad) . . . 591

 

(*) S. 201 -Income-tax enquiry-Notice to furnish particulars in connection with proceedings under sections 201 and 271C-Notice under section 131-Prior permission of Director/Commissioner not needed- Thaliparamba Municipal Vanitha Service Sahakarana Sangham Ltd. v. ITO (Ker) . . . 609

 

(*) S. 234B -Company-Minimum alternate tax-Advance tax-Interest-MAT credit to be given before charging interest under sections 234B and 234C- CIT v. Salora International Ltd. (Delhi) . . . 568

 

(*) Rectification of mistake-Interest charged under sections 234B and 234C without allowing MAT credit-Debatable issue-Interest cannot be charged in rectification proceedings- CIT v. Salora International Ltd . (Delhi) . . . 568

 

(*) S. 234C -Company-Minimum alternate tax-Advance tax-Interest-MAT credit to be given before charging interest under sections 234B and 234C- CIT v. Salora International Ltd. (Delhi) . . . 568

 

(*) Rectification of mistake-Interest charged under sections 234B and 234C without allowing MAT credit-Debatable issue-Interest cannot be charged in rectification proceedings- CIT v. Salora International Ltd . (Delhi) . . . 568

 

(*) S. 254 -Appeal to Appellate Tribunal-Powers of Tribunal-Industrial undertaking-Power to remand-Claim for special deduction in assessment year 2003-04 in respect of business started in the year 1997-98-Tribunal justified in remanding matter- Mrs. Bharti Sharma v. Asst. CIT (Delhi) . . . 534

 

(*) S. 260A -Appeal to High Court-Competency of appeal-Monetary limit fixed by CBDT Circular-No bar for appeal where substantial question of law has been raised- CIT v. S. C. Naregal (Karn) . . . 615

 

(*) Appeal to High Court-Valuation of stock-Stock difference arrived at at time of survey-Worked out on basis of selling price instead of at cost price or market price whichever is less-Finding that there was no supporting evidence to prove there was really a stock difference-No substantial question of law- CIT v. C. Jayantilal (Mad) . . . 530

 

(*) Writ-Order of Tribunal rectifying its order on merits-Rejection of application for rectification on question of reopening of assessment-Writ-Proper remedy is appeal-Writ petition not maintainable- Lakshmi Vilas Bank Ltd. v. ITAT (Mad) . . . 564

 

(*) S. 263 -Commissioner-Revision-Assessing Officer failing to tax cash seized and later surrendered by assessee-Assessment order erroneous and prejudicial to interest of Revenue-Invocation of section 263 proper-CIT v. Jagdish Chand Gupta (P&H) . . . 583

 

(*) Revision-Commissioner-Where two views possible, Assessing Officer adopting one view-Revision not permissible- CIT v. Saluja Exim Ltd . (P&H) . . . 603

 

(*) S. 271(1)(c) -Penalty-Concealment of income-Appeal to Appellate Tribunal-Findings in appeal from assessment not binding-Tribunal to examine material afresh and decide whether penalty for concealment or furnishing inaccurate particulars justified- Devsons Pvt. Ltd. v. CIT (Delhi) . . . 483

 

(*) Penalty-Concealment of income-Business expenditure-Sundry creditors-Sums due to sub-contractors but not paid-Claim substantiated by log book verified by authorities and tax deducted on sums credited to sub-contractors-Claim accepted in other years-Not a case of furnishing inaccurate particulars- Devsons Pvt. Ltd. v. CIT (Delhi) . . . 483

 

(*) Penalty-Concealment of income-Contractor-Total bills raised against municipality disclosed but sums deducted by municipality not shown in gross receipts-Matter in dispute and High Court finally holding against assessee-Not a case of concealment-Not a case of change of method of accounting from mercantile to cash- Devsons Pvt. Ltd. v. CIT (Delhi) . . . 483

 

(*) Penalty-Concealment of income-Debatable claim to deduction-Not a case of furnishing inaccurate particulars- Devsons Pvt. Ltd. v. CIT (Delhi) . . . 483

 

(*) Penalty-Furnishing inaccurate particulars-Industrial undertaking-Special deduction-Disallowance of claim to deduction-Not a case of furnishing inaccurate particulars of income-Penalty not leviable- CIT v. Dharampal Premchand Ltd. (Delhi) . . . 572

 

(*)S. 271B -Accounting-Compulsory audit of accounts-Failure to get accounts audited-Penalty-Amount received whether commission or profits not relevant-Turnover is the criterion for getting accounts audited-Ignorance of law is no excuse-Penalty to be levied- CIT v. S. C. Naregal (Karn) . . . 615

 

(*)S. 271C -Income-tax enquiry-Notice to furnish particulars in connection with proceedings under sections 201 and 271C-Notice under section 131-Prior permission of Director/Commissioner not needed- Thaliparamba Municipal Vanitha Service Sahakarana Sangham Ltd. v. ITO (Ker) . . . 609

 

(*)S. 275 -Accounting-Compulsory audit of accounts-Failure to get accounts audited-Penalty-Limitation-Six months from end of month in which penalty proceedings were initiated-Penalty proceedings initiated in March 2002-Imposition of penalty on 23-9-2002-Not barred by limitation- CIT v. S. C. Naregal (Karn) . . . 615

 

Wealth-tax Act, 1957 :

 

(*)S. 17 -Wealth-tax-Reassessment-Property valued at much higher figure in income-tax return-Reassessment proceedings based on such return-Valid- P. K. Kurian v. Asst. CWT (Ker) . . . 529

 

(*) Rectification of mistake-Interest charged under sections 234B and 234C without allowing MAT credit-Debatable issue-Interest cannot be charged in rectification proceedings- CIT v. Salora International Ltd . (Delhi) . . . 568

ITR (Trib):- HIGHLIGHTS Volume 6 Part 5 dt 29.11.2010

ITR'S TRIBUNAL TAX REPORTS (ITR (Trib)) HIGHLIGHTS

ISSUE DATED 29-11-2010

Volume 6 Part 5

APPELLATE TRIBUNAL ORDERS

Ø  Where claim of provision for doubtful debts disclosed in account, discharge of burden by assessee u/s. 271(1)(c), Expln. 1, levy of penalty not justified : Asst. CIT v. Nuchem Ltd. (Delhi) p. 429

 

Ø  Claim of set-off of long-term capital loss against business income of current year after applying indexed cost of acquisition, not permissible u/s. 71, penalty justified : Asst. CIT v. Nuchem Ltd. (Delhi) p. 429

 

Ø   Disclosure of rental income after enquiry by AO under compulsion, penalty justified u/s. 271(1)(c) : Asst. CIT v. Nuchem Ltd. (Delhi) p. 429

 

Ø   Adjustment to opening WDV of assets result of WDV finally worked out in earlier years, deletion of penalty justified : Asst. CIT v. Nuchem Ltd. (Delhi) p. 429

Ø   Management and selling commission paid to non-resident lead managers by Indian company in connection with issue of GDRs, not taxable : Dy. DIT v. Tata Iron and Steel Co. Ltd. (Mumbai) p. 463

Ø   Where deduction allowed on entire indexed cost of acquisition of land with trees, part of sale proceeds not agricultural income : Abhinav Ajmera v. Asst. CIT (Delhi) p. 482

Ø   Derivative transactions carried out in previous year relevant to assessment year 2006-07 ; business income : Smt. Seema Jain v. Asst. CIT (Delhi) p. 488

Ø   Admission of cash payments exceeding specified limit under compulsion during search, retracted by assessee, addition u/s. 40A(3) reduced : Sona Bazaar v. Asst. CIT (Bangalore) p. 492

Ø   Exclusion of reimbursement of advertisement expenditure for determining profit level indicator not proper : Panasonic India P. Ltd. v. ITO (Delhi) p. 502

Ø  Data for comparison to be data relating to year in which international transaction entered into : Panasonic India P. Ltd. v. ITO (Delhi) p. 502

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ITR VOL 329 PART 4

INCOME TAX REPORTS (ITR)

Volume 329 : Part 3 (Issue dated 13-12-2010)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Advance tax --Interest--Company--Assessment on book profits basis--No liability to pay advance tax--No interest leviable for default in payment of advance tax--Income-tax Act, 1961, ss. 115J, 115JA, 207, 208, 234B, 234C-- Binani Industries Ltd. v. CIT (Cal) . . . 323

Appeal to High Court --Powers of High Court--Finding of fact cannot normally be set aside--Income-tax Act, 1961, s. 260A-- CIT v. Forech India Ltd. (Delhi) . . . 336

----Powers of High Court--Point not raised before lower authorities cannot be considered by High Court--Income-tax Act, 1961, s. 260A-- CIT v. Chand Ratan Bagri (Delhi) . . . 356

Business expenditure --Capital or revenue expenditure--Lease rent paid to State Industrial Development Corporation for use of land for ninety-nine years--Registration of lease deed not relevant--Land not acquired by assessee--Payment made to carry on business--Lease rent deductible--Income-tax Act, 1961, s. 37-- Deputy CIT v. Sun Pharmaceuticals Ind. Ltd. (Guj) . . . 479

Capital gains --Computation of capital gains--Gains on transfer of intellectual property rights--Tribunal not justified in blindly applying B. C. Srinivasa Setty's case and concluding capital gains could not be computed--Matter remanded--Income-tax Act, 1961, ss. 45, 48-- CIT v. P. R. Seshadri (Karn) . . . 377

----Exemption--Investment of net consideration in residential house--Fact that land was owned by assessee's spouse and she had used construction for mortgage purposes--Not relevant--Finding that house had been constructed--Assessee entitled to benefit of section 54F--Income-tax Act, 1961, s. 54F-- CIT v. P. R. Seshadri (Karn) . . . 377

Capital or revenue expenditure --Fees paid to foreign company for designs and drawings and expenses on foreign technicians for training assessee's personnel--Expenditure for facilitating process of manufacture--Expenses incurred are revenue expenditure--Income-tax Act, 1961-- CIT v. Munjal Showa Ltd. (Delhi) . . . 449

Deduction of tax at source --Certificate for non-deduction--Assesssee claiming income was exempt under section 11--Amendment of section 2(15) w.e.f. 1-4-2009 not challenged--Union of India not impleaded as a party--Effect of amendment of section 2(15) could not be considered--Refusal to issue certificate for non-deduction of tax at source--Justified--Income-tax Act, 1961, ss. 2(15), 11, 197-- Infoparks Kerala v. Deputy CIT (Ker) . . . 404

Depreciation --Plant--Poultry sheds--Building specifically designed with a view to protecting birds from disease--Building designed proper and scientific feeding arrangement, proper water system, proper arrangement for collection of manure and droppings, proper arrangement for medication and vaccination--Building specifically designed to further the cause of manufacture or production--Is plant--Entitled to depreciation and investment allowance--Income-tax Act, 1961, s. 43(3)-- CIT v. Shivalik Hatcheries P. Ltd. (HP) . . . 432

----Poultry sheds, fencing, water and water tank--Entitled to extra shift allowance--Income-tax Act, 1961-- CIT v. Shivalik Hatcheries P. Ltd. (HP) . . . 432

Exemptions --Educational institution--Registered society running schools--Society granted exemption under section 10(23C) up to assessment year 2001-02--Law applicable--Effect of amendment of section 10(23C)--Condition regarding application of funds--Applicability of condition--Exemption already being granted could not be refused for assessment years 2002-03 to 2004-05--Income-tax Act, 1961, s. 10(23C)(vi)-- Digember Jain Society for Child Welfare v. Director General of Income-tax (Exemptions) (Delhi) . . . 459

Export --Special deduction under section 80HHC--Computation of export turnover--Freight and insurance not includible in export turnover--Income-tax Act, 1961, s. 80HHC-- CIT v. King Metal Works (Bom) . . . 426

----Special deduction under section 80HHC--Computation of special deduction--Meaning of profits of business--Entire sale consideration on transfer of DEPB credit assessable under section 28(iiid)--Income-tax Act, 1961, ss. 28, 80HHC-- CIT v. King Metal Works (Bom) . . . 426

Income from undisclosed sources --Additions to income on basis of admission by assessee and consideration of material on record--Deletion of addition without adequate consideration--Not valid--Matter remanded--Income-tax Act, 1961-- CIT v. Swastik India (Karn) . . . 473

Industrial undertaking --Special deduction under section 80-IA--Condition precedent--Manufacture of article--Meaning of "manufacture"--Conversion of limestone into limestone powder constitutes manufacture--Assessee entitled to special deduction under section 80-IA--Income-tax Act, 1961, s. 80-IA-- CIT v. Janak Raj Bansal (HP) . . . 417

----Special deduction under section 80-IB--Condition precedent--Manufacture of article--Meaning of manufacture--Process of making transformer core from cold rolled coils amounts to "manufacture"--Assessee entitled to special deduction under section 80-IB--Income-tax Act, 1961, s. 80-IB-- CIT v. Alfa Lamination (Guj) . . . 348

Industrial undertaking in backward area --Special deduction--Finding that industrial undertaking was situated in district notified as a backward area--Assessee entitled to special deduction under section 80HH--Notification No. S. O. 165(E), dated December 19, 1986--Income-tax Act, 1961, s. 80HH-- CIT v. Guffic Chem P. Ltd .(Karn) . . . 470

Interpretation of taxing statutes --Literal interpretation-- CIT v. King Metal Works (Bom) . . . 426

Loss --Short-term capital loss--Forfeiture of amount paid towards convertible warrants--Loss deductible as short-term capital loss--Income-tax Act, 1961-- CIT v. Chand Ratan Bagri (Delhi) . . . 356

Non-resident --Income deemed to accrue or arise in India--Royalty--Agreement between Indian company and foreign company for supply of plant know-how and product know-how--Agreement concluded and data delivered abroad--Purchase of drawings and documents abroad--Transaction was one of sale--No income could be deemed to accrue or arise to non-resident--Income-tax Act, 1961, s. 9(1)(vi)-- CIT v. Maggronic Devices P. Ltd. (HP) . . . 442

Penalty --Concealment of income--Search and seizure--Additional income offered by assessee and assessed on estimate--Levy of penalty not permissible without detailed discussion of documents and explanation for offer of additional income--Income-tax Act, 1961, s. 271(1)(c)-- CIT v. Suresh Chand Bansal (Cal) . . . 330

Precedent --Effect of decision of Supreme Court in Lucky Minmat v. CIT [2000] 245 ITR 830-- CIT v. Janak Raj Bansal (HP) . . . 417

----Effect of decisions of Supreme Court in American Hotel and Lodging Association Educational Institute v. CBDT [2008] 301 ITR 86 and Aditanar Educational Institution v. Additional CIT [1997] 224 ITR 310-- Digember Jain Society for Child Welfare v. Director General of Income-tax (Exemptions) (Delhi) . . . 459

----Ratio of case when applicable-- CIT v. P. R. Seshadri (Karn) . . . 377

----Supreme Court--One-line order of Supreme Court dismissing appeal after it is admitted and heard--Binding--Constitution of India, arts. 136, 141-- Binani Industries Ltd. v. CIT (Cal) . . . 323

Reassessment --Limitation--Law applicable--Effect of amendment of section 143 w.e.f. 1-4-1989--Return filed on 24-1-2003 in response to notice under section 148--No notice issued under section 143(2) but assessee having opportunity to be heard--Order of reassessment passed on 26-3-2004--Barred by limitation--Income-tax Act, 1961, ss. 143, 148--Circular No. 549 dated 31-10-1989-- CIT v. Deep Baruah (Gauhati) . . . 362

----Notice--Notice beyond four years--Condition precedent--Failure to disclose material facts necessary for assessment--Facts relating to sale of shares disclosed and assessment after enquiry--Notice after four years on ground that transaction not genuine--Notice not valid--Income-tax Act, 1961, ss. 147, 148-- Smt. Raj Rani Gulati v. Union of India (All) . . . 370

----Notice--Oral direction not to proceed with enquiry--Enquiry without affording an opportunity to assessee--Assessment order set aside--Matter remanded--Income-tax Act, 1961, ss. 147, 148-- Vira Properties (Madras) Pvt. Ltd. v. Asst. CIT (Mad) . . . 389

----Writ--Writ court cannot consider facts--Return submitted by assessee--Survey showing undisclosed income--Notice of reassessment was valid--Income-tax Act, 1961, ss. 147, 148--Constitution of India, art. 226-- Dr. Lata Chouhan v. ITO (MP) . . . 400

Rectification of mistake --Mistake apparent from record--Search and seizure--Refund--Interest on refund--Assessee entitled to interest--Assessee to seek rectification --Income-tax Act, 1961, ss. 132, 154-- CIT v. Sri Krishna Saraf (Mad) . . . 342

Search and seizure --Addition on account of documents found at premises of a relative of assessee--Investment in purchase of car and interest--Tribunal remanding the matter to Assessing Officer--Findings of fact--Income-tax Act, 1961, s. 158BFA(1)-- CIT v. Harjit Singh (P&H) . . . 422

----Penalty--No concealment of income--No failure to furnish inaccurate particulars of income--Assessing authority not justified in levying penalty--Income-tax Act, 1961, s. 271(1)(c)-- CIT v. Sri Krishna Saraf (Mad) . . . 342

----Search at premises of third person--Seizure and recovery from safe deposits belonging to assessee--Issue of notice under section 142(1) after search revealing search having nexus with assessee--Assessment under section 143(3)--Assessee entitled to seek necessary relief under section 132B(4)--Income-tax Act, 1961, ss. 132, 132B(4), 143-- CIT v. Sri Krishna Saraf (Mad) . . . 342

Undisclosed stock --Books of account incomplete at time of survey--Finding of Commissioner (Appeals) and Tribunal that stock related to import purchases verifiable from customs records--Accounts reconciled later--Finding of fact--Income-tax Act, 1961-- CIT v. Forech India Ltd. (Delhi) . . . 336

Unexplained investment --Assessee purchasing demand drafts and remitting to a party--No proof that sum represented bad debt or business loss--Addition as unexplained investment--Justified--Income-tax Act, 1961, s. 69-- Satish Kumar v. CIT (P&H) . . . 396

Wealth-tax --Company--Exemption--Asset used for business--Land used for internal roads and playground--Not entitled to exemption--Wealth-tax Act, 1957--Finance Act, 1983, s. 40(3)(vi)-- Motwane Manufacturing Co. Pvt. Ltd . v. CWT (Bom) . . . 413

Words and phrases --Meaning of "manufacture"-- CIT v. Alfa Lamination (Guj) . . . 348

----Meaning of "manufacture"-- CIT v. Janak Raj Bansal (HP) . . . 417

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Constitution of India :

Art. 136 --Precedent--Supreme Court--One-line order of Supreme Court dismissing appeal after it is admitted and heard--Binding-- Binani Industries Ltd. v. CIT (Cal) . . . 323

Art. 141 --Precedent--Supreme Court--One-line order of Supreme Court dismissing appeal after it is admitted and heard--Binding-- Binani Industries Ltd. v. CIT (Cal) . . . 323

Finance Act, 1983 :

S. 40(3)(vi) --Wealth-tax--Company--Exemption--Asset used for business--Land used for internal roads and playground--Not entitled to exemption-- Motwane Manufacturing Co. Pvt. Ltd . v. CWT (Bom) . . . 413

Income-tax Act, 1961 :

S. 2(15) --Deduction of tax at source--Certificate for non-deduction--Assesssee claiming income was exempt under section 11--Amendment of section 2(15) w.e.f. 1-4-2009 not challenged--Union of India not impleaded as a party--Effect of amendment of section 2(15) could not be considered--Refusal to issue certificate for non-deduction of tax at source--Justified-- Infoparks Kerala v. Deputy CIT (Ker) . . . 404

S. 9(1)(vi) --Non-resident--Income deemed to accrue or arise in India--Royalty--Agreement between Indian company and foreign company for supply of plant know-how and product know-how--Agreement concluded and data delivered abroad--Purchase of drawings and documents abroad--Transaction was one of sale--No income could be deemed to accrue or arise to non-resident-- CIT v. Maggronic Devices P. Ltd. (HP) . . . 442

S. 10(23C)(vi) --Exemptions--Educational institution--Registered society running schools--Society granted exemption under section 10(23C) up to assessment year 2001-02--Law applicable--Effect of amendment of section 10(23C)--Condition regarding application of funds--Applicability of condition--Exemption already being granted could not be refused for assessment years 2002-03 to 2004-05-- Digember Jain Society for Child Welfare v. Director General of Income-tax (Exemptions) (Delhi) . . . 459

S. 11 --Deduction of tax at source--Certificate for non-deduction--Assesssee claiming income was exempt under section 11--Amendment of section 2(15) w.e.f. 1-4-2009 not challenged--Union of India not impleaded as a party--Effect of amendment of section 2(15) could not be considered--Refusal to issue certificate for non-deduction of tax at source--Justified-- Infoparks Kerala v. Deputy CIT (Ker) . . . 404

S. 28 --Export--Special deduction under section 80HHC--Computation of special deduction--Meaning of profits of business--Entire sale consideration on transfer of DEPB credit assessable under section 28(iiid)-- CIT v. King Metal Works (Bom) . . . 426

S. 37 --Business expenditure--Capital or revenue expenditure--Lease rent paid to State Industrial Development Corporation for use of land for ninety nine years--Registration of lease deed not relevant--Land not acquired by assessee--Payment made to carry on business--Lease rent deductible-- Deputy CIT v. Sun Pharmaceuticals Ind. Ltd. (Guj) . . . 479

S. 43(3) --Depreciation--Plant--Poultry sheds--Building specifically designed with a view to protecting birds from disease--Building designed proper and scientific feeding arrangement, proper water system, proper arrangement for collection of manure and droppings, proper arrangement for medication and vaccination--Building specifically designed to further the cause of manufacture or production--Is plant--Entitled to depreciation and investment allowance-- CIT v. Shivalik Hatcheries P. Ltd. (HP) . . . 432

S. 45 --Capital gains--Computation of capital gains--Gains on transfer of intellectual property rights--Tribunal not justified in blindly applying B. C. Srinivasa Setty's case and concluding capital gains could not be computed--Matter remanded-- CIT v. P. R. Seshadri (Karn) . . . 377

S. 48 --Capital gains--Computation of capital gains--Gains on transfer of intellectual property rights--Tribunal not justified in blindly applying B. C. Srinivasa Setty's case and concluding capital gains could not be computed--Matter remanded-- CIT v. P. R. Seshadri (Karn) . . . 377

S. 54F --Capital gains--Exemption--Investment of net consideration in residential house--Fact that land was owned by assessee's spouse and she had used construction for mortgage purposes--Not relevant--Finding that house had been constructed--Assessee entitled to benefit of section 54F-- CIT v. P. R. Seshadri (Karn) . . . 377

S. 69 --Unexplained investment--Assessee purchasing demand drafts and remitting to a party--No proof that sum represented bad debt or business loss--Addition as unexplained investment--Justified-- Satish Kumar v. CIT (P&H) . . . 396

S. 80HH --Industrial undertaking in backward area--Special deduction--Finding that industrial undertaking was situated in district notified as a backward area--Assessee entitled to special deduction under section 80HH--Notification No. S.O. 165(E), dated December 19, 1986-- CIT v. Guffic Chem P. Ltd . (Karn) . . . 470

S. 80HHC --Export--Special deduction under section 80HHC--Computation of export turnover--Freight and insurance not includible in export turnover-- CIT v. King Metal Works (Bom) . . . 426

----Export--Special deduction under section 80HHC--Computation of special deduction--Meaning of profits of business--Entire sale consideration on transfer of DEPB credit assessable under section 28(iiid)-- CIT v. King Metal Works (Bom) . . . 426

S. 80-IA --Industrial undertaking--Special deduction under section 80-IA--Condition precedent--Manufacture of article--Meaning of "manufacture"--Conversion of limestone into limestone powder constitutes manufacture--Assessee entitled to special deduction under section 80-IA-- CIT v. Janak Raj Bansal (HP) . . . 417

S. 80-IB --Industrial undertaking--Special deduction under section 80-IB--Condition precedent--Manufacture of article--Meaning of manufacture--Process of making transformer core from cold rolled coils amounts to "manufacture"--Assessee entitled to special deduction under section 80-IB-- CIT v. Alfa Lamination (Guj) . . . 348

S. 115J --Advance tax--Interest--Company--Assessment on book profits basis--No liability to pay advance tax--No interest leviable for default in payment of advance tax-- Binani Industries Ltd. v. CIT (Cal) . . . 323

S. 115JA --Advance tax--Interest--Company--Assessment on book profits basis--No liability to pay advance tax--No interest leviable for default in payment of advance tax-- Binani Industries Ltd. v. CIT (Cal) . . . 323

S. 132 --Rectification of mistake--Mistake apparent from record--Search and seizure--Refund--Interest on refund--Assessee entitled to interest--Assessee to seek rectification-- CIT v. Sri Krishna Saraf (Mad) . . . 342

----Search and seizure--Search at premises of third person--Seizure and recovery from safe deposits belonging to assessee--Issue of notice under section 142(1) after search revealing search having nexus with assessee--Assessment under section 143(3)--Assessee entitled to seek necessary relief under section 132B(4)-- CIT v. Sri Krishna Saraf (Mad) . . . 342

S. 132B(4) --Search and seizure--Search at premises of third person--Seizure and recovery from safe deposits belonging to assessee--Issue of notice under section 142(1) after search revealing search having nexus with assessee--Assessment under section 143(3)--Assessee entitled to seek necessary relief under section 132B(4)-- CIT v. Sri Krishna Saraf (Mad) . . . 342

S. 143 --Reassessment--Limitation--Law applicable--Effect of amendment of section 143 w.e.f. 1-4-1989--Return filed on 24-1-2003 in response to notice under section 148--No notice issued under section 143(2) but assessee having opportunity to be heard--Order of reassessment passed on 26-3-2004--Barred by limitation--Circular No. 549 dated 31-10-1989-- CIT v. Deep Baruah (Gauhati) . . . 362

----Reassessment--Limitation--Law applicable--Effect of amendment of section 143 w.e.f. 1-4-1989--Return filed on 24-1-2003 in response to notice under section 148--No notice issued under section 143(2) but assessee having opportunity to be heard--Order of reassessment passed on 26-3-2004--Barred by limitation--Circular No. 549 dated 31-10-1989-- CIT v. Deep Baruah (Gauhati) . . . 362

----Search and seizure--Search at premises of third person--Seizure and recovery from safe deposits belonging to assessee--Issue of notice under section 142(1) after search revealing search having nexus with assessee--Assessment under section 143(3)--Assessee entitled to seek necessary relief under section 132B(4)-- CIT v. Sri Krishna Saraf (Mad) . . . 342

S. 147 --Constitution of India, art. 226--Reassessment--Writ--Writ court cannot consider facts--Return submitted by assessee--Survey showing undisclosed income--Notice of reassessment was valid-- Dr. Lata Chouhan v. ITO (MP) . . . 400

----Reassessment--Notice--Notice beyond four years--Condition precedent--Failure to disclose material facts necessary for assessment--Facts relating to sale of shares disclosed and assessment after enquiry--Notice after four years on ground that transaction not genuine--Notice not valid-- Smt. Raj Rani Gulati v. Union of India (All) . . . 370

----Reassessment--Notice--Oral direction not to proceed with enquiry--Enquiry without affording an opportunity to assessee--Assessment order set aside--Matter remanded-- Vira Properties (Madras) Pvt. Ltd. v. Asst. CIT (Mad) . . . 389

S. 148 --Constitution of India, art. 226--Reassessment--Writ--Writ court cannot consider facts--Return submitted by assessee--Survey showing undisclosed income--Notice of reassessment was valid-- Dr. Lata Chouhan v. ITO (MP) . . . 400

----Reassessment--Notice--Notice beyond four years--Condition precedent--Failure to disclose material facts necessary for assessment--Facts relating to sale of shares disclosed and assessment after enquiry--Notice after four years on ground that transaction not genuine--Notice not valid-- Smt. Raj Rani Gulati v. Union of India (All) . . . 370

----Reassessment--Notice--Oral direction not to proceed with enquiry--Enquiry without affording an opportunity to assessee--Assessment order set aside--Matter remanded-- Vira Properties (Madras) Pvt. Ltd. v. Asst. CIT (Mad) . . . 389

S. 154 --Rectification of mistake--Mistake apparent from record--Search and seizure--Refund--Interest on refund--Assessee entitled to interest--Assessee to seek rectification-- CIT v. Sri Krishna Saraf (Mad) . . . 342

S. 158BFA(1) --Search and seizure--Addition on account of documents found at premises of a relative of assessee--Investment in purchase of car and interest--Tribunal remanding the matter to Assessing Officer--Findings of fact-- CIT v. Harjit Singh (P&H) . . . 422

S. 197 --Deduction of tax at source--Certificate for non-deduction--Assesssee claiming income was exempt under section 11--Amendment of section 2(15) w.e.f. 1-4-2009 not challenged--Union of India not impleaded as a party--Effect of amendment of section 2(15) could not be considered--Refusal to issue certificate for non-deduction of tax at source--Justified-- Infoparks Kerala v. Deputy CIT (Ker) . . . 404

S. 207 --Advance tax--Interest--Company--Assessment on book profits basis--No liability to pay advance tax--No interest leviable for default in payment of advance tax-- Binani Industries Ltd. v. CIT (Cal) . . . 323

S. 208 --Advance tax--Interest--Company--Assessment on book profits basis--No liability to pay advance tax--No interest leviable for default in payment of advance tax-- Binani Industries Ltd. v. CIT (Cal) . . . 323

S. 234B --Advance tax--Interest--Company--Assessment on book profits basis--No liability to pay advance tax--No interest leviable for default in payment of advance tax-- Binani Industries Ltd. v. CIT (Cal) . . . 323

S. 234C --Advance tax--Interest--Company--Assessment on book profits basis--No liability to pay advance tax--No interest leviable for default in payment of advance tax-- Binani Industries Ltd. v. CIT (Cal) . . . 323

S. 260A --Appeal to High Court--Powers of High Court--Finding of fact cannot normally be set aside-- CIT v. Forech India Ltd. (Delhi) . . . 336

----Appeal to High Court--Powers of High Court--Point not raised before lower authorities cannot be considered by High Court-- CIT v. Chand Ratan Bagri (Delhi) . . . 356

S. 271(1)(c) --Penalty--Concealment of income--Search and seizure--Additional income offered by assessee and assessed on estimate--Levy of penalty not permissible without detailed discussion of documents and explanation for offer of additional income-- CIT v. Suresh Chand Bansal (Cal) . . . 330

----Search and seizure--Penalty--No concealment of income--No failure to furnish inaccurate particulars of income--Assessing authority not justified in levying penalty-- CIT v. Sri Krishna Saraf (Mad) . . . 342