(ITR (TRIB) Volume 17 : Part 2 (Issue dated : 16-07-2012) : SUBJECT INDEX TO CASES REPORTED IN THIS PART

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

Volume 17 : Part 2 (Issue dated : 16-07-2012)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Agricultural income --Fact of ownership of agricultural land not disputed--Claim for deduction of expenses for agriculture allowed--No evidence that agricultural operations were not performed--Income was agricultural--Income-tax Act, 1961, s. 10(1)-- Thangamani Vinodhagan v. Asst. CIT (Chennai) . . . 230

----Rose plants grown in green house--Mother plants grown in agricultural land using human labour --Income from rose flowers exempt as agricultural income--Income-tax Act, 1961, ss. 2(1), 10(1)--Circular No. 1, dated 27-3-2009-- CIT (Dy.) v. Best Roses Biotech P. Ltd. (Ahmedabad) . . . 211

Appeal to Appellate Tribunal --Powers of Tribunal--Power to admit additional ground of appeal--Question regarding limitation can be raised for first time before Tribunal--Income-tax Act, 1961-- Crompton Creaves Ltd. v. Dy. CIT (Mumbai) . . . 151

Business expenditure --Expenditure for purpose prohibited by law--Assessee exporting rice to Iraq under oil for food programme of United Nations--Paying commission to company for services in connection with export from procurement to final realisation of proceeds--Report by U. N. committee probing irregularities that company to which assessee paid commission was front company for Iraqi regime and payment used as kickback--Payment to Iraqi regime by agent not under assessee™s control--No denial that services rendered--No material to show assessee knew and was part of scheme to pay kickbacks to Iraqi regime--Payment deductible--Income-tax Act, 1961, s. 37, Expln. -- CIT (Dy.) v. Rajrani Exports P. Ltd. (Kolkata) . . . 239

Cash credits --Amounts repaid by debtors--Debtors not denying transaction--Amount not includible in assessee™s total income--Amount claimed to be advanced by sister--No evidence of such advance--Amount includible in total income of assessee--Income-tax Act, 1961, s. 68-- Thangamani Vinodhagan v. Asst. CIT (Chennai) . . . 230

Company --Book profits--Computation--Minimum alternate tax--Deduction from net profit on account of foreign exchange fluctuation--No adjustment available except as provided in Explanation --Reduction of amount while computing book profit--Not permissible--Income-tax Act, 1961, s. 115JB-- City Gold Media Ltd. v. ITO (Ahmedabad) . . . 192

Deduction of tax at source --Payment to non-resident--Failure to deduct tax at source--No assessment proceedings against non-resident for four years--Assessee cannot be treated as assessee in default under section 201--Income-tax Act, 1961, ss. 195, 201-- Crompton Creaves Ltd. v. Dy. CIT (Mumbai) . . . 151

Heads of income --Capital gains or business income--Proprietary concern of assessee taken over by company as going concern--Consideration for transfer is taxable as long-term capital gains--Assessee employed by company on salary and other terms of employment--Not a case of compensation for not engaging in similar business--Income-tax Act, 1961, ss. 28(va), 50B-- CIT (Asst.) v. Sangeeta Wij (Smt.) (Delhi) . . . 162

Income --Computation of income--Disallowance of expenditure relating to non-taxable income from firm--Borrowed amount invested as capital of firm--Interest relating to share of profit to be disallowed--Income-tax Act, 1961, s. 14A-- CIT (Asst.) v. Vinay Singal (Chandigarh) . . . 146

Penalty --Concealment of income--Capital gains--Claim for exemption--Investment of net consideration in residential property--Shortfall in amount invested due to wrong advice by counsel--No concealment of income--Penalty cannot be imposed --Income-tax Act, 1961, ss. 54, 271(1)(c)-- Majorjit Singh v. Asst. CIT (Chandigarh) . . . 183

----Failure to respond to notice under section 143(1) and (2)--Bona fide belief that income was non-taxable--Not reasonable explanation--Penalty imposable--Income-tax Act, 1961, s. 271(1)(b)-- Thangamani Vinodhagan v. Asst. CIT (Chennai) . . . 230

Rectification of mistakes --Depreciation--Withdrawal of deprecation on ground of non-user--Question debatable--Depreciation cannot be withdrawn in rectification proceedings--Income-tax Act, 1961, ss. 32, 154-- Thangamani Vinodhagan v. Asst. CIT (Chennai) . . . 230

Revision --Commissioner--Reassessment--Financial charges paid on funds borrowed for purchase of property--Part of closing stock--No finding that Assessing Officer applied his mind to facts of case--Direction to Assessing Officer to examine issue--Proper--Income-tax Act, 1961, s. 263-- Devi Developers P. Ltd. v. CIT (Delhi) . . . 187

Transfer pricing --Depreciation--Method of computing depreciation--No difference in result as a result of applying any of methods--Income-tax Act, 1961, s. 92C-- Lason India P. Ltd. v. Asst. CIT (Chennai) . . . 203

----Draft assessment order incorporating proposals of Transfer Pricing Officer--Draft assessment order erroneously termed final order--Assessing Officer has power to issue corrigendum to correct error--Income-tax Act, 1961, s. 144C-- Lason India P. Ltd. v. Asst. CIT (Chennai) . . . 203

Unexplained expenditure --Addition based on statement of director recorded by Central excise authorities--Addition not supported by evidence--Addition not justified --Additions under section 69C set aside by Tribunal in assessment year 2004-05--No new facts in assessment year 2008-09--Addition not valid--Income-tax Act, 1961, s. 69C -- ITO v. Arora Alloys Ltd. (Chandigarh) . . . 133

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961 :

S. 2(1) --Agricultural income--Rose plants grown in green house--Mother plants grown in agricultural land using human labour --Income from rose flowers exempt as agricultural income--Circular No. 1, dated 27-3-2009-- Deputy CIT v. Best Roses Biotech P. Ltd. (Ahmedabad) . . . 211

S. 10(1) --Agricultural income--Fact of ownership of agricultural land not disputed--Claim for deduction of expenses for agriculture allowed--No evidence that agricultural operations were not performed--Income was agricultural-- Thangamani Vinodhagan v. Asst. CIT (Chennai) . . . 230

Agricultural income--Rose plants grown in green house--Mother plants grown in agricultural land using human labour --Income from rose flowers exempt as agricultural income--Circular No. 1, dated 27-3-2009-- Deputy CIT v. Best Roses Biotech P. Ltd. (Ahmedabad) . . . 211

S. 14A --Income--Computation of income--Disallowance of expenditure relating to non-taxable income from firm--Borrowed amount invested as capital of firm--Interest relating to share of profit to be disallowed-- Asst. CIT v. Vinay Singal (Chandigarh) . . . 146

S. 28(va) --Heads of income--Capital gains or business income--Proprietary concern of assessee taken over by company as going concern--Consideration for transfer is taxable as long-term capital gains--Assessee employed by company on salary and other terms of employment--Not a case of compensation for not engaging in similar business-- Asst. CIT v. Sangeeta Wij (Smt.) (Delhi) . . . 162

S. 32 --Rectification of mistakes--Depreciation--Withdrawal of deprecation on ground of non-user--Question debatable--Depreciation cannot be withdrawn in rectification proceedings-- Thangamani Vinodhagan v. Asst. CIT (Chennai) . . . 230

S. 37, Expln .-- Business expenditure--Expenditure for purpose prohibited by law--Assessee exporting rice to Iraq under oil for food programme of United Nations--Paying commission to company for services in connection with export from procurement to final realisation of proceeds--Report by U. N. committee probing irregularities that company to which assessee paid commission was front company for Iraqi regime and payment used as kickback--Payment to Iraqi regime by agent not under assessee™s control--No denial that services rendered--No material to show assessee knew and was part of scheme to pay kickbacks to Iraqi regime--Payment deductible-- Deputy CIT v. Rajrani Exports P. Ltd. (Kolkata) . . . 239

S. 50B --Heads of income--Capital gains or business income--Proprietary concern of assessee taken over by company as going concern--Consideration for transfer is taxable as long-term capital gains--Assessee employed by company on salary and other terms of employment--Not a case of compensation for not engaging in similar business-- Asst. CIT v. Sangeeta Wij (Smt.) (Delhi) . . . 162

S. 54 --Penalty--Concealment of income--Capital gains--Claim for exemption--Investment of net consideration in residential property--Shortfall in amount invested due to wrong advice by counsel--No concealment of income--Penalty cannot be imposed-- Majorjit Singh v. Asst. CIT (Chandigarh) . . . 183

S. 68 --Cash credits--Amounts repaid by debtors--Debtors not denying transaction--Amount not includible in assessee™s total income--Amount claimed to be advanced by sister--No evidence of such advance--Amount includible in total income of assessee-- Thangamani Vinodhagan v. Asst. CIT (Chennai) . . . 230

S. 69C --Unexplained expenditure--Addition based on statement of director recorded by Central excise authorities--Addition not supported by evidence--Addition not justified--Additions under section 69C set aside by Tribunal in assessment year 2004-05--No new facts in assessment year 2008-09--Addition not valid-- ITO v. Arora Alloys Ltd. (Chandigarh) . . . 133

S. 92C --Transfer pricing--Depreciation--Method of computing depreciation--No difference in result as a result of applying any of methods-- Lason India P. Ltd. v. Asst. CIT (Chennai) . . . 203

S. 115JB --Company--Book profits--Computation--Minimum alternate tax--Deduction from net profit on account of foreign exchange fluctuation--No adjustment available except as provided in Explanation --Reduction of amount while computing book profit--Not permissible-- City Gold Media Ltd. v. ITO (Ahmedabad) . . . 192

S. 144C --Transfer pricing--Draft assessment order incorporating proposals of Transfer Pricing Officer--Draft assessment order erroneously termed final order--Assessing Officer has power to issue corrigendum to correct error-- Lason India P. Ltd. v. Asst. CIT (Chennai) . . . 203

S. 154 --Rectification of mistakes--Depreciation--Withdrawal of deprecation on ground of non-user--Question debatable--Depreciation cannot be withdrawn in rectification proceedings-- Thangamani Vinodhagan v. Asst. CIT (Chennai) . . . 230

S. 195 --Deduction of tax at source--Payment to non-resident--Failure to deduct tax at source--No assessment proceedings against non-resident for four years--Assessee cannot be treated as assessee in default under section 201-- Crompton Creaves Ltd. v. Deputy CIT (Mumbai) . . . 151

S. 201 --Deduction of tax at source--Payment to non-resident--Failure to deduct tax at source--No assessment proceedings against non-resident for four years--Assessee cannot be treated as assessee in default under section 201-- Crompton Creaves Ltd. v. Deputy CIT (Mumbai) . . . 151

S. 263 --Revision--Commissioner--Reassessment--Financial charges paid on funds borrowed for purchase of property--Part of closing stock--No finding that Assessing Officer applied his mind to facts of case--Direction to Assessing Officer to examine issue--Proper-- Devi Developers P. Ltd. v. CIT (Delhi) . . . 187

S. 271(1)(b) --Penalty--Failure to respond to notice under section 143(1) and (2)--Bona fide belief that income was non-taxable--Not reasonable explanation--Penalty imposable-- Thangamani Vinodhagan v. Asst. CIT (Chennai) . . . 230

S. 271(1)(c) --Penalty--Concealment of income--Capital gains--Claim for exemption--Investment of net consideration in residential property--Shortfall in amount invested due to wrong advice by counsel--No concealment of income--Penalty cannot be imposed-- Majorjit Singh v. Asst. CIT (Chandigarh) . . . 183

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

INCOME TAX REPORTS (ITR)

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

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

NO RELIEF FOR NSE IN MARKET MONOPOLY SUIT

 

NO RELIEF FOR NSE IN MARKET MONOPOLY SUIT

The Competition Appellate Tribunal (COMPAT) today declined to grant the National Stock Exchange (NSE) interim relief in a market monopoly case. The Competition Commission of India (CCI) had directed NSE to maintain separate segment-wise financial records for equities, currency derivatives and other segments. This comes on the heels of another stock exchange, MCX-SX, approaching CCI against NSE alleging monopolistic practices, where the latter was found gulity of such practices. NSE had pleaded to COMPAT against this order but the appeal was rejected. Rejecting NSE's appeal, COMPAT observed the CCI order was in accordance with the competition laws in India. NSE had contended on March 15 that maintaining separate segment-wise accounts would entail costs and would be time-consuming. NSE has also stated this was not required under accounting standard AS (17). COMPAT observed that NSE had made the fresh appeal against CCI's order to maintain separate accounts "at the last juncture", though they had ample opportunity to contest the order in competent bodies. "Thus, if NSE is granted any interim relief now to maintain separate accounts, then the direction would automatically be pushed to the next financial year, that is, from April 2013," COMPAT said. NSE will have to start separate segment-wise reporting from April 1. Although, COMPAT said it was not the competent body to decide on regulatory issues like compliance of accounting standards, its order could certainly hold NSE accountable for averments under AS (17), as well as the undertakings made by NSE with CCI to comply with the directions of CCI within the stipulated deadline. – www.business-standard.com 

TDS: AO in place of payment has no jurisdiction if assessee assessed outside

 

Indian Newspaper Society vs. ITO (TDS) (Bombay High Court)

TDS: AO in place of payment has no jurisdiction if assessee assessed outside

The assessee, based & assessed in Delhi, was allotted land by MMRDA at Bandra Kurla Complex, Mumbai, on lease for 80 years. The lease premium of Rs.88.52 crores was paid without deduction of tax at source. The ITO (TDS) Mumbai passed an order u/s 201 in which he held that the assessee had defaulted in not deducting TDS u/s 194-I on the lease premium. The assessee filed a Writ Petition to challenge the jurisdiction of the ITO (TDS) Mumbai. HELD upholding the plea:

The assessee was assessed at New Delhi. Its PAN & TAN were allotted by the AO at New Delhi. All returns including the TDS returns were filed at New Delhi. Accordingly, there was complete absence of jurisdiction on the part of the AO at Mumbai to proceed against the assessee.

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