INCOME TAX REPORTS (ITR)
Volume 329 : Part 4 (Issue dated 20-12-2010)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
(*) 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
(*) 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
