Income tax case laws

ITR’S TRIBUNAL TAX REPORTS (ITR (TRIB)) -- PRINT AND ONLINE EDITION

 

ONLINE EDITION

SUBJECT INDEX TO CASES REPORTED

Business expenditure --Voluntary retirement scheme--Amortisation of expenditure--Compliance with conditions of rule 2BAmandatory only for exemption under section 10(10C) by employee--Not relevant for deduction in employer’s hands under section35DDA --One-fifth of expenditure allowable under section 35DDA --Income-tax Act, 1961 , ss . 10(10C), 35DDA --Income-tax Rules,1962 , r . 2BA -- State Bank of Mysore v. CIT (Appeals) (Bangalore). . .244

Industrial undertaking --Special category State--Special deduction--Return filed belatedly--Explanation that computer got corrupted due to virus and computer technical personnel unable to retrieve data in time and entire data for February and March had to be entered into computer again--Reasonable cause beyond control of assessee--Deduction not to be denied on technicalities when assessee otherwise entitled--Income-tax Act, 1961, ss. 80AC, 80-IC, 139(1)-- ITO v. S. Venkataiah (Hyderabad) . . .256

Non-resident --Shipping company--Income deemed to accrue or arise in India--Profit from operation of ships in international traffic--Not taxable in India under article 9(1)--Income-tax Act, 1961, s. 9--Double Taxation Avoidance Agreement between India and Denmark, art. 9-- A. P. Moller Maersk A/S v. Deputy Director of Income-tax (International Taxation) (Mumbai). . . 253

----Shipping company--Interest on refund received from foreign shipping company--Falling under article 12 of Double Taxation Avoidance Agreement--Liable to tax--Cannot be considered as business income under article 9(4)--Double Taxation Avoidance Agreement between India and Denmark, arts. 9(4), 12-- A. P. Moller Maersk A/S v. Deputy Director of Income-tax (International Taxation) (Mumbai). . . 253

 

PRINT EDITION

Volume 26 : Part 1 (Issue dated : 26-8-2013)

SUBJECT INDEX TO CASES REPORTED

Business expenditure --Co-operative bank--Bad and doubtful debts--Bad debts--Netting provisions made for bad and doubtful debts--Net accretion to be ascertained by analysing quality of each asset--No details available on record--Order set aside and matter remanded for decision afresh--Income-tax Act, 1961, s. 36(1)(viia)-- Trichur District Co-operative Bank Ltd. v. Assistant CIT(Cochin) . . . 31

----Co-operative bank--Bad and doubtful debts--Bad debts--Rural branch--Definition under section 36(1)(viia) applicable--Income-tax Act, 1961, s. 36(1)(viia)-- Trichur District Co-operative Bank Ltd. v. Assistant CIT (Cochin) . . . 31

----Foreign bank--Commission on collection and mobilisation of deposits from non-resident Indians for State Bank of India under its India millennium deposit scheme for five years--Expenses on sub-arrangers fees--Net amount amortised in books of account over five years--Payment not made in lieu of “services of technical or other personnel†by non-resident sub-arrangers--Not consideration for construction or assembly--Activities of sub-arrangers not “consultancy servicesâ€--No technical knowledge, expertise or qualification required--Sub-arrangers not managing India millennium deposit issue--Payment not fees for “managerial servicesâ€--Payment not within ambit of “fees for technical services†in section 9(1)(vii)--Sub-arrangers simply acting as commission agents or brokers and payment simply a commission or brokerage paid by assessee--Provisions requiring deduction of tax at source not applicable--No disallowance--Expenses eligible for deduction in full year of incurring--No relation with life of deposits received by assessee from SBI--Income-tax Act, 1961, ss. 9(1)(vii), 40(a)(i), 195-- Credit Lyonnais v. Assistant Director of Income-tax (International Taxation)(Mumbai) . . . 51

----Venture capital fund--Trusteeship and management fees--No evidence to prove that expenses not genuine--Expenditure allowable--Income-tax Act, 1961-- Assistant CIT v. Small is Beautiful (Hyderabad) . . . 41

Capital gains --Non-resident--Sale of 100 per cent. shareholding in Indian company to Singapore company--Indian company’s business undertaking notified as eligible under section 80-IA(4)(iii) --Approved under section 10(23G)--Share held by company not “immovable propertyâ€--Capital gains arising on transfer of shares not governed by article 13(1) or (4) but by article 13(5)--Not taxable in India--Income-tax Act, 1961, ss. 2(47), 10(23G), 80-IA(4)(iii), 269UA(d)--Double Taxation Avoidance Agreement between India and the Netherlands, arts. 6(2), 13-- Vanenburg Facilities B. V. v. Assistant Director of Income-tax (International Taxation)(Hyderabad) . . . 114

Co-operative society --Special deduction--Cannot be decided without detailed examination of bye-laws and relevant materials--Verification not carried out by Assessing Officer or Commissioner (Appeals)--Order set aside and matter remanded for decision afresh--Income-tax Act, 1961, s. 80P(2)(a)(vi)-- ITO v. Indian Coffee Board Workers Co-operative Society (Cochin) . . . 93

Company --Shares--Shares in company not immovable property-- Vanenburg Facilities B. V. v. Assistant Director of Income-tax (International Taxation) (Hyderabad) . . . 114

Exemption --Industrial undertaking--No condition that exemption applicable only for further investment--Indian company approved as an infrastructure company and allowed deduction under section 80-IA--Conditions satisfied at time of sale of shares in company--Capital gains eligible for exemption--Income-tax Act, 1961, ss. 10(23G), 80-IA(4)(iii)-- Vanenburg Facilities B. V. v. Assistant Director of Income-tax (International Taxation) (Hyderabad) . . . 114

----Venture capital fund--Settlement of violation of provisions, under consent terms not material--Approval not withdrawn by SEBI--Assessee entitled to exemption--Income-tax Act, 1961, s. 10(23FB)-- Assistant CIT v. Small is Beautiful (Hyderabad) . . . 41

Fringe benefits tax --Condition precedent for charge of tax--Employer-employee relationship essential of treating expenses as fringe benefit--Airline crew members not employees--Visiting guests not employees--Expenses on transportation of airline crew and guests not chargeable--Expenses on dropping employees at night time not treated as fringe benefit--Not liable to fringe benefit tax--Income-tax Act, 1961, s. 115WB(2)(B), (D)--Circular No. 8 of 2005 dated August 29, 2005-- Peerless Hotels Ltd. v. Deputy CIT (Kolkata) . . . 151

----Private television channel--Broadcasting news through its four news channel--Channel-placement charges paid to agencies--No employer-employee relationship between assessee and recipients--Not expenditure on sales promotion or publicity--Not liable to fringe benefits tax--Income-tax Act, 1961, s. 115WB(2)--CBDT Circular No. 8 of 2005 dated August 29, 2005-- T. V. Today Network Ltd. v. Deputy CIT (Delhi) . . . 1

Housing project --Special deduction--Change of law with effect from April 1, 2005--Furnishing of completion certificate issued by local authority--Mandatory for years after amendment--Not requirement for earlier years--Deduction for earlier years not to be denied for not submitting completion certificate--No requirement that undertaking must be owner of land--Income-tax Act, 1961, s. 80-IB(10)--Sainath Estates P. Ltd. v. Deputy CIT (Hyderabad) . . . 155

Income --Disallowance of expenses in relation to exempt income--Exemption--Interest on borrowings in foreign currency--Capital and free reserves far in excess of amount invested in interest-free securities--No disallowance on account of interest paid for making investment in such securities--2 per cent. of exempt income to be disallowed towards operating expenses--Income-tax Act, 1961, ss. 10(15)(iv)(h), 14A-- Credit Lyonnais v. Assistant Director of Income-tax (International Taxation) (Mumbai) . . . 51

Income from house property --Property given on lease--Tribunal for earlier years directing Assessing Officer to recompute income from house property following return on investment method applying rate of 7 per cent. enhanced by applying cost inflation index--Commissioner (Appeals) following direction of Tribunal for year in question--No reason for interference--Failure by assessee to submit details called for by Assessing Officer in support of construction and administrative expenses--Commissioner (Appeals) not justified in allowing expenditure claimed by assessee in toto--On facts disallowance of 5 per cent. of expenditure appropriate--Income-tax Act, 1961, s. 22-- Sainath Estates P. Ltd. v. Deputy CIT (Hyderabad) . . . 155

Income or capital --Benefit on account of unmatured foreign exchange contracts as on last day of accounting year--Credited to profit and loss account--Taxable-- Credit Lyonnais v. Assistant Director of Income-tax (International Taxation) (Mumbai) . . . 51

Industrial undertaking --Special deduction--Small-scale industrial unit--Conditions precedent for grant of deduction--Must be fulfilled each year--Value of plant and machinery in year exceeding Rs. 1 crore--Assessee not qualifying as small scale industry--Not entitled to deduction--Income-tax Act, 1961, s. 80-IB-- Ace Multi Axes Systems Ltd. v. Deputy CIT (Bangalore) . . . 83

Interpretation of taxing statutes --Language clear and unambiguous--No scope for interpretation-- Sainath Estates P. Ltd. v. Deputy CIT (Hyderabad) . . . 155

Non-resident --Income deemed to accrue or arise in India--Deduction of tax at source--Fees for technical services--Export of readymade garments under orders procured by foreign agent--Foreign agent providing systematic market research--Service falls under definition of technical services--Payment is fees for technical services--Assessee liable to deduct tax at source--Income-tax Act, 1961, ss. 9(1)(vii), 40(a)(ia), 195-- Assistant CIT v. Evolv Clothing Co. P. Ltd. (Chennai) . . . 71

----Taxability in India--Transfer of shares in Indian company to another non-resident--Interest for delay in payment of sale consideration--Neither assessee nor purchaser carrying on business in India nor interest payable in respect of moneys borrowed and used for purpose of business--Interest received outside India--Not taxable in India--Income-tax Act, 1961, ss. 5, 9(1)(v)(c)--Vanenburg Facilities B. V. v. Assistant Director of Income-tax (International Taxation) (Hyderabad) . . . 114

Reassessment --Material gathered during search considered in block assessment--Assessing Officer thereafter not entitled to initiate proceedings under section 147 on issue--Assessment made after scrutiny allowing exemption on long-term capital gains for purchase of residential house--Order affirmed on appeal and becoming final--Block assessment made pursuant to search disallowing exemption set aside on ground of lack of jurisdiction--Reassessment to disallow exemption--Not permissible--Income-tax Act, 1961, ss. 54F, 143(3), 147, 148, 158B(b), 158BD-- Motilal P. Khinvasara, HUF v. Deputy CIT (Pune) . . . 101

Refund --Interest on excess refund--Provision brought with effect from June 1, 2003--Assessment for 2001-02 completed after that date--Interest chargeable--Income-tax Act, 1961, s. 234D-- Credit Lyonnais v. Assistant Director of Income-tax (International Taxation) (Mumbai) . . . 51

Search and seizure --Assessment in search cases--Income from house property--Property leased out--Net annual value of property quantified in assessment under section 143(3)--Same addition not to be made again in assessment under section 153A--Validity of addition made in assessment under section 143(3) not to be adjudicated by Tribunal in appeal arising from search assessment--Income-tax Act, 1961, ss. 143(3), 153A-- Sainath Estates P. Ltd. v. Deputy CIT (Hyderabad) . . . 155

----Assessment in search cases--Scope of powers of Assessing Officer--That issue of claim to deduction under section 80-IB(10) considered in original assessment under section 143(3) not relevant--That issue of fulfilment of conditions under section 80-IB(10) verified in original scrutiny assessment proceedings not ground for not furnishing required information and evidence called for in proceedings under section 153A--Matter remanded--Income-tax Act, 1961, ss. 80-IB(10), 143(3), 153A-- Sainath Estates P. Ltd. v.Deputy CIT (Hyderabad) . . . 155

----General principles--Block assessment--Limitation--Department not entitled to prolong search in arbitrary and unjustified manner--Time-limit for framing order cannot be extended by passing prohibitory orders--Assessment of third party--Satisfaction for taking action to be recorded before completion of block assessment of person searched--Two searches--Panchanamas mentioning that second search was in continuation of previous proceedings--No document or books of account seized or taken into possession--No fresh authorisation or revalidation of earlier authorisation--Total period of search lasting more than nine months--Much beyond reasonable time--Limitation to be reckoned taking into consideration last valid panchanama--Assessment barred by limitation--Income-tax Act, 1961, ss. 132(3), 158BB, 158BC, 158BD, 158BE-- Mani and Money Ltd. v. Deputy CIT (Chennai) . . . 9

Words and phrases --“Immovable propertyâ€-- Vanenburg Facilities B. V. v. Assistant Director of Income-tax (International Taxation) (Hyderabad) . . . 114

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Double Taxation Avoidance Agreement between India and the Netherlands :

Art. 6(2) --Capital gains--Non-resident--Sale of 100 per cent. shareholding in Indian company to Singapore company--Indian company’s business undertaking notified as eligible under section 80-IA(4)(iii) --Approved under section 10(23G)--Share held by company not “immovable propertyâ€--Capital gains arising on transfer of shares not governed by article 13(1) or (4) but by article 13(5)--Not taxable in India-- Vanenburg Facilities B. V. v. Assistant Director of Income-tax (International Taxation) (Hyderabad) . . . 114

Art. 13 --Capital gains--Non-resident--Sale of 100 per cent. shareholding in Indian company to Singapore company--Indian company’s business undertaking notified as eligible under section 80-IA(4)(iii) --Approved under section 10(23G)--Share held by company not “immovable propertyâ€--Capital gains arising on transfer of shares not governed by article 13(1) or (4) but by article 13(5)--Not taxable in India-- Vanenburg Facilities B. V. v. Assistant Director of Income-tax (International Taxation) (Hyderabad) . . . 114

Income-tax Act, 1961 :

S. 2(47) --Capital gains--Non-resident--Sale of 100 per cent. shareholding in Indian company to Singapore company--Indian company’s business undertaking notified as eligible under section 80-IA(4)(iii) --Approved under section 10(23G)--Share held by company not “immovable propertyâ€--Capital gains arising on transfer of shares not governed by article 13(1) or (4) but by article 13(5)--Not taxable in India-- Vanenburg Facilities B. V. v. Assistant Director of Income-tax (International Taxation) (Hyderabad) . . . 114

S. 5 --Non-resident--Taxability in India--Transfer of shares in Indian company to another non-resident--Interest for delay in payment of sale consideration--Neither assessee nor purchaser carrying on business in India nor interest payable in respect of moneys borrowed and used for purpose of business--Interest received outside India--Not taxable in India-- Vanenburg Facilities B. V. v.Assistant Director of Income-tax (International Taxation) (Hyderabad) . . . 114

S. 9(1)(v)(c) --Non-resident--Taxability in India--Transfer of shares in Indian company to another non-resident--Interest for delay in payment of sale consideration--Neither assessee nor purchaser carrying on business in India nor interest payable in respect of moneys borrowed and used for purpose of business--Interest received outside India--Not taxable in India-- Vanenburg Facilities B. V. v. Assistant Director of Income-tax (International Taxation) (Hyderabad) . . . 114

S. 9(1)(vii) --Business expenditure--Foreign bank--Commission on collection and mobilisation of deposits from non-resident Indians for State Bank of India under its India millennium deposit scheme for five years--Expenses on sub-arrangers fees--Net amount amortised in books of account over five years--Payment not made in lieu of “services of technical or other personnel†by non-resident sub-arrangers--Not consideration for construction or assembly--Activities of sub-arrangers not “consultancy servicesâ€--No technical knowledge, expertise or qualification required--Sub-arrangers not managing India millennium deposit issue--Payment not fees for “managerial servicesâ€--Payment not within ambit of “fees for technical services†in section 9(1)(vii)--Sub-arrangers simply acting as commission agents or brokers and payment simply a commission or brokerage paid by assessee--Provisions requiring deduction of tax at source not applicable--No disallowance--Expenses eligible for deduction in full year of incurring--No relation with life of deposits received by assessee from SBI-- Credit Lyonnais v. Assistant Director of Income-tax (International Taxation) (Mumbai) . . . 51

----Non-resident--Income deemed to accrue or arise in India--Deduction of tax at source--Fees for technical services--Export of readymade garments under orders procured by foreign agent--Foreign agent providing systematic market research--Service falls under definition of technical services--Payment is fees for technical services--Assessee liable to deduct tax at source-- Assistant CITv. Evolv Clothing Co. P. Ltd. (Chennai) . . . 71

S. 10(15)(iv)(h) --Income--Disallowance of expenses in relation to exempt income--Exemption--Interest on borrowings in foreign currency--Capital and free reserves far in excess of amount invested in interest-free securities--No disallowance on account of interest paid for making investment in such securities--2 per cent. of exempt income to be disallowed towards operating expenses--Credit Lyonnais v. Assistant Director of Income-tax (International Taxation) (Mumbai) . . . 51

S. 10(23FB) --Exemption--Venture capital fund--Settlement of violation of provisions, under consent terms not material--Approval not withdrawn by SEBI--Assessee entitled to exemption-- Assistant CIT v. Small is Beautiful (Hyderabad) . . . 41

S. 10(23G) --Capital gains--Non-resident--Sale of 100 per cent. shareholding in Indian company to Singapore company--Indian company’s business undertaking notified as eligible under section 80-IA(4)(iii)--Approved under section 10(23G)--Share held by company not “immovable propertyâ€--Capital gains arising on transfer of shares not governed by article 13(1) or (4) but by article 13(5)--Not taxable in India-- Vanenburg Facilities B. V. v. Assistant Director of Income-tax (International Taxation) (Hyderabad) . . . 114

----Exemption--Industrial undertaking--No condition that exemption applicable only for further investment--Indian company approved as an infrastructure company and allowed deduction under section 80-IA--Conditions satisfied at time of sale of shares in company--Capital gains eligible for exemption-- Vanenburg Facilities B. V. v. Assistant Director of Income-tax (International Taxation)(Hyderabad) . . . 114

S. 14A --Income--Disallowance of expenses in relation to exempt income--Exemption--Interest on borrowings in foreign currency--Capital and free reserves far in excess of amount invested in interest-free securities--No disallowance on account of interest paid for making investment in such securities--2 per cent. of exempt income to be disallowed towards operating expenses-- Credit Lyonnais v.Assistant Director of Income-tax (International Taxation) (Mumbai) . . . 51

S. 22 --Income from house property--Property given on lease--Tribunal for earlier years directing Assessing Officer to recompute income from house property following return on investment method applying rate of 7 per cent. enhanced by applying cost inflation index--Commissioner (Appeals) following direction of Tribunal for year in question--No reason for interference--Failure by assessee to submit details called for by Assessing Officer in support of construction and administrative expenses--Commissioner (Appeals) not justified in allowing expenditure claimed by assessee in toto--On facts disallowance of 5 per cent. of expenditure appropriate--Sainath Estates P. Ltd. v. Deputy CIT (Hyderabad) . . . 155

S. 36(1)(viia) --Business expenditure--Co-operative bank--Bad and doubtful debts--Bad debts--Netting provisions made for bad and doubtful debts--Net accretion to be ascertained by analysing quality of each asset--No details available on record--Order set aside and matter remanded for decision afresh-- Trichur District Co-operative Bank Ltd. v. Assistant CIT (Cochin) . . . 31

----Business expenditure--Co-operative bank--Bad and doubtful debts--Bad debts--Rural branch--Definition under section 36(1)(viia) applicable-- Trichur District Co-operative Bank Ltd. v. Assistant CIT (Cochin) . . . 31

S. 40(a)(i) --Business expenditure--Foreign bank--Commission on collection and mobilisation of deposits from non-resident Indians for State Bank of India under its India millennium deposit scheme for five years--Expenses on sub-arrangers fees--Net amount amortised in books of account over five years--Payment not made in lieu of “services of technical or other personnel†by non-resident sub-arrangers--Not consideration for construction or assembly--Activities of sub-arrangers not “consultancy servicesâ€--No technical knowledge, expertise or qualification required--Sub-arrangers not managing India millennium deposit issue--Payment not fees for “managerial servicesâ€--Payment not within ambit of “fees for technical services†in section 9(1)(vii)--Sub-arrangers simply acting as commission agents or brokers and payment simply a commission or brokerage paid by assessee--Provisions requiring deduction of tax at source not applicable--No disallowance--Expenses eligible for deduction in full year of incurring--No relation with life of deposits received by assessee from SBI-- Credit Lyonnais v. Assistant Director of Income-tax (International Taxation)(Mumbai) . . . 51

S. 40(a)(ia) --Non-resident--Income deemed to accrue or arise in India--Deduction of tax at source--Fees for technical services--Export of readymade garments under orders procured by foreign agent--Foreign agent providing systematic market research--Service falls under definition of technical services--Payment is fees for technical services--Assessee liable to deduct tax at source-- Assistant CIT v. Evolv Clothing Co. P. Ltd. (Chennai) . . . 71

S. 54F --Reassessment--Material gathered during search considered in block assessment--Assessing Officer thereafter not entitled to initiate proceedings under section 147 on issue--Assessment made after scrutiny allowing exemption on long-term capital gains for purchase of residential house--Order affirmed on appeal and becoming final--Block assessment made pursuant to search disallowing exemption set aside on ground of lack of jurisdiction--Reassessment to disallow exemption--Not permissible-- Motilal P. Khinvasara, HUF v. Deputy CIT (Pune) . . . 101

S. 80-IA(4)(iii) --Capital gains--Non-resident--Sale of 100 per cent. shareholding in Indian company to Singapore company--Indian company’s business undertaking notified as eligible under section 80-IA(4)(iii)--Approved under section 10(23G)--Share held by company not “immovable propertyâ€--Capital gains arising on transfer of shares not governed by article 13(1) or (4) but by article 13(5)--Not taxable in India-- Vanenburg Facilities B. V. v. Assistant Director of Income-tax (International Taxation) (Hyderabad) . . . 114

----Exemption--Industrial undertaking--No condition that exemption applicable only for further investment--Indian company approved as an infrastructure company and allowed deduction under section 80-IA--Conditions satisfied at time of sale of shares in company--Capital gains eligible for exemption-- Vanenburg Facilities B. V. v. Assistant Director of Income-tax (International Taxation)(Hyderabad) . . . 114

S. 80-IB --Industrial undertaking--Special deduction--Small-scale industrial unit--Conditions precedent for grant of deduction--Must be fulfilled each year--Value of plant and machinery in year exceeding Rs. 1 crore--Assessee not qualifying as small scale industry--Not entitled to deduction-- Ace Multi Axes Systems Ltd. v. Deputy CIT (Bangalore) . . . 83

S. 80-IB(10) --Housing project--Special deduction--Change of law with effect from April 1, 2005--Furnishing of completion certificate issued by local authority--Mandatory for years after amendment--Not requirement for earlier years--Deduction for earlier years not to be denied for not submitting completion certificate--No requirement that undertaking must be owner of land-- Sainath Estates P. Ltd. v. Deputy CIT (Hyderabad) . . . 155

----Search and seizure--Assessment in search cases--Scope of powers of Assessing Officer--That issue of claim to deduction under section 80-IB(10) considered in original assessment under section 143(3) not relevant--That issue of fulfilment of conditions under section 80-IB(10) verified in original scrutiny assessment proceedings not ground for not furnishing required information and evidence called for in proceedings under section 153A--Matter remanded-- Sainath Estates P. Ltd. v. Deputy CIT (Hyderabad) . . . 155

S. 80P(2)(a)(vi) --Co-operative society--Special deduction--Cannot be decided without detailed examination of bye-laws and relevant materials--Verification not carried out by Assessing Officer or Commissioner (Appeals)--Order set aside and matter remanded for decision afresh-- ITO v. Indian Coffee Board Workers Co-operative Society (Cochin) . . . 93

S. 115WB(2) --Fringe benefits tax--Private television channel--Broadcasting news through its four news channel--Channel-placement charges paid to agencies--No employer-employee relationship between assessee and recipients--Not expenditure on sales promotion or publicity--Not liable to fringe benefits tax-- T. V. Today Network Ltd. v. Deputy CIT (Delhi) . . . 1

S. 115WB(2)(B), (D) --Fringe benefits tax--Condition precedent for charge of tax--Employer-employee relationship essential of treating expenses as fringe benefit--Airline crew members not employees--Visiting guests not employees--Expenses on transportation of airline crew and guests not chargeable--Expenses on dropping employees at night time not treated as fringe benefit--Not liable to fringe benefit tax-- Peerless Hotels Ltd. v. Deputy CIT (Kolkata) . . . 151

S. 132(3) --Search and seizure--General principles--Block assessment--Limitation--Department not entitled to prolong search in arbitrary and unjustified manner--Time-limit for framing order cannot be extended by passing prohibitory orders--Assessment of third party--Satisfaction for taking action to be recorded before completion of block assessment of person searched--Two searches--Panchanamas mentioning that second search was in continuation of previous proceedings--No document or books of account seized or taken into possession--No fresh authorisation or revalidation of earlier authorisation--Total period of search lasting more than nine months--Much beyond reasonable time--Limitation to be reckoned taking into consideration last valid panchanama--Assessment barred by limitation-- Mani and Money Ltd. v. Deputy CIT (Chennai) . . . 9

S. 143(3) --Reassessment--Material gathered during search considered in block assessment--Assessing Officer thereafter not entitled to initiate proceedings under section 147 on issue--Assessment made after scrutiny allowing exemption on long-term capital gains for purchase of residential house--Order affirmed on appeal and becoming final--Block assessment made pursuant to search disallowing exemption set aside on ground of lack of jurisdiction--Reassessment to disallow exemption--Not permissible-- Motilal P. Khinvasara, HUF v. Deputy CIT (Pune) . . . 101

----Search and seizure--Assessment in search cases--Income from house property--Property leased out--Net annual value of property quantified in assessment under section 143(3)--Same addition not to be made again in assessment under section 153A--Validity of addition made in assessment under section 143(3) not to be adjudicated by Tribunal in appeal arising from search assessment--Sainath Estates P. Ltd. v. Deputy CIT (Hyderabad) . . . 155

----Search and seizure--Assessment in search cases--Scope of powers of Assessing Officer--That issue of claim to deduction under section 80-IB(10) considered in original assessment under section 143(3) not relevant--That issue of fulfilment of conditions under section 80-IB(10) verified in original scrutiny assessment proceedings not ground for not furnishing required information and evidence called for in proceedings under section 153A--Matter remanded-- Sainath Estates P. Ltd. v. Deputy CIT (Hyderabad) . . . 155

S. 147 --Reassessment--Material gathered during search considered in block assessment--Assessing Officer thereafter not entitled to initiate proceedings under section 147 on issue--Assessment made after scrutiny allowing exemption on long-term capital gains for purchase of residential house--Order affirmed on appeal and becoming final--Block assessment made pursuant to search disallowing exemption set aside on ground of lack of jurisdiction--Reassessment to disallow exemption--Not permissible-- Motilal P. Khinvasara, HUF v. Deputy CIT (Pune) . . . 101

S. 148 --Reassessment--Material gathered during search considered in block assessment--Assessing Officer thereafter not entitled to initiate proceedings under section 147 on issue--Assessment made after scrutiny allowing exemption on long-term capital gains for purchase of residential house--Order affirmed on appeal and becoming final--Block assessment made pursuant to search disallowing exemption set aside on ground of lack of jurisdiction--Reassessment to disallow exemption--Not permissible-- Motilal P. Khinvasara, HUF v. Deputy CIT (Pune) . . . 101

S. 153A --Search and seizure--Assessment in search cases--Income from house property--Property leased out--Net annual value of property quantified in assessment under section 143(3)--Same addition not to be made again in assessment under section 153A--Validity of addition made in assessment under section 143(3) not to be adjudicated by Tribunal in appeal arising from search assessment-- Sainath Estates P. Ltd. v. Deputy CIT (Hyderabad) . . . 155

----Search and seizure--Assessment in search cases--Scope of powers of Assessing Officer--That issue of claim to deduction under section 80-IB(10) considered in original assessment under section 143(3) not relevant--That issue of fulfilment of conditions under section 80-IB(10) verified in original scrutiny assessment proceedings not ground for not furnishing required information and evidence called for in proceedings under section 153A--Matter remanded-- Sainath Estates P. Ltd. v. Deputy CIT (Hyderabad) . . . 155

S. 158B(b) --Reassessment--Material gathered during search considered in block assessment--Assessing Officer thereafter not entitled to initiate proceedings under section 147 on issue--Assessment made after scrutiny allowing exemption on long-term capital gains for purchase of residential house--Order affirmed on appeal and becoming final--Block assessment made pursuant to search disallowing exemption set aside on ground of lack of jurisdiction--Reassessment to disallow exemption--Not permissible-- Motilal P. Khinvasara, HUF v. Deputy CIT (Pune) . . . 101

S. 158BB --Search and seizure--General principles--Block assessment--Limitation--Department not entitled to prolong search in arbitrary and unjustified manner--Time-limit for framing order cannot be extended by passing prohibitory orders--Assessment of third party--Satisfaction for taking action to be recorded before completion of block assessment of person searched--Two searches--Panchanamas mentioning that second search was in continuation of previous proceedings--No document or books of account seized or taken into possession--No fresh authorisation or revalidation of earlier authorisation--Total period of search lasting more than nine months--Much beyond reasonable time--Limitation to be reckoned taking into consideration last valid panchanama--Assessment barred by limitation-- Mani and Money Ltd. v. Deputy CIT (Chennai) . . . 9

S. 158BC --Search and seizure--General principles--Block assessment--Limitation--Department not entitled to prolong search in arbitrary and unjustified manner--Time-limit for framing order cannot be extended by passing prohibitory orders--Assessment of third party--Satisfaction for taking action to be recorded before completion of block assessment of person searched--Two searches--Panchanamas mentioning that second search was in continuation of previous proceedings--No document or books of account seized or taken into possession--No fresh authorisation or revalidation of earlier authorisation--Total period of search lasting more than nine months--Much beyond reasonable time--Limitation to be reckoned taking into consideration last valid panchanama--Assessment barred by limitation-- Mani and Money Ltd. v. Deputy CIT (Chennai) . . . 9

S. 158BD --Reassessment--Material gathered during search considered in block assessment--Assessing Officer thereafter not entitled to initiate proceedings under section 147 on issue--Assessment made after scrutiny allowing exemption on long-term capital gains for purchase of residential house--Order affirmed on appeal and becoming final--Block assessment made pursuant to search disallowing exemption set aside on ground of lack of jurisdiction--Reassessment to disallow exemption--Not permissible-- Motilal P. Khinvasara, HUF v. Deputy CIT (Pune) . . . 101

----Search and seizure--General principles--Block assessment--Limitation--Department not entitled to prolong search in arbitrary and unjustified manner--Time-limit for framing order cannot be extended by passing prohibitory orders--Assessment of third party--Satisfaction for taking action to be recorded before completion of block assessment of person searched--Two searches--Panchanamas mentioning that second search was in continuation of previous proceedings--No document or books of account seized or taken into possession--No fresh authorisation or revalidation of earlier authorisation--Total period of search lasting more than nine months--Much beyond reasonable time--Limitation to be reckoned taking into consideration last valid panchanama--Assessment barred by limitation-- Mani and Money Ltd. v. Deputy CIT (Chennai) . . . 9

S. 158BE --Search and seizure--General principles--Block assessment--Limitation--Department not entitled to prolong search in arbitrary and unjustified manner--Time-limit for framing order cannot be extended by passing prohibitory orders--Assessment of third party--Satisfaction for taking action to be recorded before completion of block assessment of person searched--Two searches--Panchanamas mentioning that second search was in continuation of previous proceedings--No document or books of account seized or taken into possession--No fresh authorisation or revalidation of earlier authorisation--Total period of search lasting more than nine months--Much beyond reasonable time--Limitation to be reckoned taking into consideration last valid panchanama--Assessment barred by limitation-- Mani and Money Ltd. v. Deputy CIT (Chennai) . . . 9

S. 195 --Business expenditure--Foreign bank--Commission on collection and mobilisation of deposits from non-resident Indians for State Bank of India under its India millennium deposit scheme for five years--Expenses on sub-arrangers fees--Net amount amortised in books of account over five years--Payment not made in lieu of “services of technical or other personnel†by non-resident sub-arrangers--Not consideration for construction or assembly--Activities of sub-arrangers not “consultancy servicesâ€--No technical knowledge, expertise or qualification required--Sub-arrangers not managing India millennium deposit issue--Payment not fees for “managerial servicesâ€--Payment not within ambit of “fees for technical services†in section 9(1)(vii)--Sub-arrangers simply acting as commission agents or brokers and payment simply a commission or brokerage paid by assessee--Provisions requiring deduction of tax at source not applicable--No disallowance--Expenses eligible for deduction in full year of incurring--No relation with life of deposits received by assessee from SBI-- Credit Lyonnais v. Assistant Director of Income-tax (International Taxation)(Mumbai) . . . 51

----Non-resident--Income deemed to accrue or arise in India--Deduction of tax at source--Fees for technical services--Export of readymade garments under orders procured by foreign agent--Foreign agent providing systematic market research--Service falls under definition of technical services--Payment is fees for technical services--Assessee liable to deduct tax at source-- Assistant CITv. Evolv Clothing Co. P. Ltd. (Chennai) . . . 71

S. 234D --Refund--Interest on excess refund--Provision brought with effect from June 1, 2003--Assessment for 2001-02 completed after that date--Interest chargeable-- Credit Lyonnais v. Assistant Director of Income-tax (International Taxation) (Mumbai) . . . 51

S. 269UA(d) --Capital gains--Non-resident--Sale of 100 per cent. shareholding in Indian company to Singapore company--Indian company’s business undertaking notified as eligible under section 80-IA(4)(iii)--Approved under section 10(23G)--Share held by company not “immovable propertyâ€--Capital gains arising on transfer of shares not governed by article 13(1) or (4) but by article 13(5)--Not taxable in India-- Vanenburg Facilities B. V. v. Assistant Director of Income-tax (International Taxation) (Hyderabad) . . . 114

 

INCOME TAX REPORTS (ITR)--PRINT AND ONLINE EDITION

PRINT EDITION

ITR Volume 356 : Part 3 (Issue dated : 26-8-2013)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Accounting --Rejection of accounts--Construction business--Assessee maintaining audited books of account--No question of disbelieving them in absence of cogent evidence--Income-tax Act, 1961, s. 44AA(2)-- CIT v. Dolphin Builders (P.) Ltd.
(MP) . . . 420

Amortisation of expenses --Deduction under section 35D in prior years--Deduction allowable in assessment year under consideration--Income-tax Act, 1961, s. 35D-- Dy. CIT v . Gujarat Narmada Valley Fertilizers Co. Ltd . (Guj) . . . 460

Business expenditure --Capital or revenue expenditure--Amortisation of expenses--Payments to employees under voluntary retirement scheme--Compliance with rule 2BA is for benefit under section 10(10C)--No such compliance mandatory for deduction in hands of employer under section 35DDA--Allowable deduction--Income-tax Rules, 1962, r. 2BA--Income-tax Act, 1961, s. 35DDA--CIT v. State Bank of Mysore (Karn) . . . 468

----Commission--Sales through commission agents--Some buyers in accounting year relevant to assessment year 2005-06 stating that sales were direct--Statement not rebutted with evidence--Amounts not deductible--Income-tax Act, 1961-- CIT v. Printer House P. Ltd. (Delhi) . . . . 474

----Premium on redemption of debentures--Deductible--Income-tax Act, 1961-- Dy. CIT v. Gujarat Narmada Valley Fertilizers Co. Ltd. (Guj) . . . 460

Business loss --Loss due to confiscation of goods--Deductible--Income-tax Act, 1961-- CIT v. T. C. Reddy (AP) . . . 516

Capital gains --Capital asset--Paintings--Law applicable--Effect of amendment of section 2(14) w.e.f. 1-4-2008--Paintings excluded from personal effects w.e.f. 1-4-2008--Gains from transfer of paintings not assessable in assessment year 2005-06--Income-tax Act, 1961, ss. 2(14), 45-- CIT v. Kuruvilla Abraham (Mad) . . . 519

----Charge of tax--Condition precedent--Transfer of property--Agreement to purchase immovable property--Agreement making it clear that property would be transferred only after payment of entire amount--Entire amount not paid--Clause in agreement that parts of property could be transferred to third parties--Not relevant--No transfer of property--Tax not leviable--Income-tax Act, 1961, s. 45--Transfer of Property Act, 1882, ss. 5, 19-- Ratna Trayi Reality Service P. Ltd. v. ITO
(Guj) . . . 493

Capital or revenue expenditure --Expenditure on restructuring loan--Revenue expenditure--Income-tax Act, 1961, s. 37-- Dy. CIT v.Gujarat Narmada Valley Fertilizers Co. Ltd. (Guj) . . . 460

Charitable purposes --Donation to charitable institution--Approval of institution--Corpus donations substantially utilized for commercial activities in nature of construction of shopping complex--Assessee not entitled to approval under section 80G--Income-tax Act, 1961, ss. 2(15), 80G-- Vishal Khanna Public Charitable Trust v. Union of India (All) . . . 442

Depreciation --Lease of assets--Depreciation allowed in prior years--Depreciation allowable in assessment year under consideration--Income-tax Act, 1961, s. 32-- Dy. CIT v. Gujarat Narmada Valley Fertilizers Co. Ltd. (Guj) . . . 460

Export --Special deduction--Premium payment received on transferring export licence--Does not involve any earnings of foreign exchange and does not result in profits attributable to an export activity--No deduction under section 80HHC allowable--Income-tax Act, 1961, s. 80HHC-- CIT v. Garniwal Exports (P.) Ltd.
(Karn) . . . 432

Income from other sources or business income --Interest earned by short-term investment of money raised by issue of zero coupon bonds in order to maintain debt equity ratio--Taxable as income from other sources and not income from business--Income-tax Act, 1961-- Bharat Oman Refineries Ltd. v. CIT (MP) . . . 399

Income from undisclosed sources --Assessee trading in steel--Finding that some purchases recorded by it were not bogus but from other parties not recorded in books--Estimation of profit element embedded in purchases--Tribunal justified in estimation on the basis of facts--Income-tax Act, 1961-- CIT v. Simit P. Sheth (Guj) . . . 451

Income-tax --General principles--Genuine transaction not colourable device because of motive to avoid taxation-- CIT v. Special Prints Ltd . (Guj) . . . 404

----General principles--Rule of consistency-- Dy. CIT v. Gujarat Narmada Valley Fertilizers Co. Ltd. (Guj) . . . 460

Interest on borrowed capital --Borrowed capital utilised for purchasing new machinery for expansion of business--Interest deductible--Income-tax Act, 1961, s. 36(1)(iii)-- Dy. CIT v. Gujarat Narmada Valley Fertilizers Co. Ltd.
(Guj) . . . 460

Loss --Firm--Carry forward and set off of loss--Scope of sections 78 and 170 --Dissolution of firm--Business of firm continued by erstwhile partner--Firm and partner are two distinct entities--Loss of firm could not be carried forward and set off by sole proprietor--Income-tax Act, 1961, ss. 78, 170-- Pramod Mittal v. CIT
(Delhi) . . . 456

----Set-off of loss--Capital gains--Set-off of capital loss against capital gains--Finding that transaction whereby capital loss was incurred was genuine--Set-off of capital loss valid--Income-tax Act, 1961-- CIT v. Special Prints Ltd. (Guj) . . . 404

Penalty --Concealment of income--Loss--Law applicable--Effect of Explanation 4 to section 271(1)(c)--Concealment of income resulting in reduction of loss--Penalty can be levied--Income-tax Act, 1961, s. 271(1)(c)-- CIT v. Balaramakrishna Engineering Contractors Corporation (AP) . . . 524

Precedent --Effect of decision in CIT v. Gold Coin Health Food P. Ltd. [2008] 304 ITR 308 (SC)-- CIT v. Balaramakrishna Engineering Contractors Corporation
(AP) . . . 524

----Effect of decision of Supreme Court in Ajantha Industries v. CBDT [1976] 102 ITR 281 (SC)-- Global Energy P. Ltd. v . CIT(Bom) . . . 502

----Effect of Supreme Court decision in Azadi Bachao Andolan’s case-- CIT v. Special Prints Ltd. (Guj) . . . 404

----Effect of Supreme Court decision in Madras Industrial Investment Corporation Ltd. v. CIT [1997] 225 ITR 802 (SC)-- Dy. CIT v.Gujarat Narmada Valley Fertilizers Co. Ltd. (Guj) . . . 460

Presumptive taxation --Construction business--Total receipts including those not accounted for in books of account, not exceeding Rs. 40 lakhs--Section 44AD not applicable--Income-tax Act, 1961, s. 44AD-- CIT v. Dolphin Builders (P.) Ltd.
(MP) . . . 420

Reassessment --Notice--Change of opinion--Reasons given in notice not matters considered by assessing authority in original assessment on which opinion formed--Reassessment not by change of opinion--Reassessment valid--Income-tax Act, 1961, ss. 147, 148-- Innovative Foods Ltd. v. Union of India (Ker) . . . 389

----Notice--Condition precedent--Tangible material to show escapement of income from tax--Original assessment without scrutiny--Not relevant--Notice cannot be issued without proper reasons--Income-tax Act, 1961, ss. 147, 148-- Ratna Trayi Reality Service P. Ltd. v . ITO (Guj) . . . 493

----Notice--Validity--Notice not permissible merely for verification of claims--Notice on the ground of miscalculation of special deduction under section 80HHC and excess deduction on account of provision for warranty--Notice valid--Income-tax Act, 1961, ss. 147, 148-- Inductotherm (India) P. Ltd. v. M. Gopalan, Dy. CIT
(Guj) . . . 481

----Notice after four years--Validity--Deduction of excess provision written back--Sufficient disclosure in return to enable Assessing Officer to scrutinise such a claim--Reopening after four years not valid--Income-tax Act, 1961, ss. 147, 148-- National Dairy Development Board v. Dy. CIT (Guj) . . . 413

Refund --Adjustment of refund--Condition precedent--Intimation in writing to assessee prior to adjustment--No intimation in writing to assessee before making adjustment of refund--Order adjusting refund not justified--Income-tax Act, 1961, ss. 240, 244, 244A, 245--Cognizant Technology Solutions India P. Ltd. v. Dy. CIT
(Mad) . . . 373

Revision --Commissioner--Powers--Industrial undertaking--Transport subsidy--Object is to reduce cost of production--Direct nexus to profits of industrial undertaking--Entitled to deduction--Commissioner revising order on ground transport subsidy could not have been deducted by resorting to section 80-IA--Not valid--Income-tax Act, 1961, s. 263-- Patkai Coal Products Pvt. Ltd. v. CIT (Gauhati) . . . 528

Search and seizure --Block assessment--Limitation--Effect of proviso to Explanation in section 153B--Extension of period of limitation--Proviso can be applied more than once--Stay ordered by High Court and thereafter order passed under section 142(2A) for special audit--Both periods to be excluded for computing limitation--Income-tax Act, 1961, s. 153B-- CIT v. Ulike Promoters P. Ltd.(Delhi) . . . 507

----Warrant of authorisation--No jurisdiction of authority to open camp office in residence of assessee--Allegation that authority trespassed into assessee’s house not countered--Liable to prosecution before competent court--Search and seizure preceded by warrant--Availability of time to pay advance tax and file return--Does not mean that authority had no jurisdiction to issue warrant and effect search and seizure--Income-tax Act, 1961, s. 132-- Prakash V. Sanghvi v. Ramesh G., Major, Dy. DIT (Inv.)
(Karn) . . . 426

Transfer of case --Transfer for purposes of co-ordinated investigation--Reason for such co-ordination must be given--Income-tax Act, 1961, s. 127-- Global Energy P. Ltd. v . CIT (Bom) . . . 502

Writ --High Court--Competency of writ petition--Notice to withdraw registration of trust--Writ petition not maintainable against notice--Income-tax Act, 1961, ss. 12A, 12AA--Constitution of India, art. 226-- Vishal Khanna Public Charitable Trust v. Union of India (All) . . . 442

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Constitution of India :

Art. 226 --Writ--High Court--Competency of writ petition--Notice to withdraw registration of trust--Writ petition not maintainable against notice-- Vishal Khanna Public Charitable Trust v. Union of India (All) . . . 442

Income-tax Act, 1961 :

S. 2(14) --Capital gains--Capital asset--Paintings--Law applicable--Effect of amendment of section 2(14) w.e.f. 1-4-2008--Paintings excluded from personal effects w.e.f. 1-4-2008--Gains from transfer of paintings not assessable in assessment year 2005-06-- CIT v.Kuruvilla Abraham (Mad) . . . 519

S. 2(15) --Charitable purposes--Donation to charitable institution--Approval of institution--Corpus donations substantially utilized for commercial activities in nature of construction of shopping complex--Assessee not entitled to approval under section 80G-- Vishal Khanna Public Charitable Trust v. Union of India
(All) . . . 442

S. 12A --Writ--High Court--Competency of writ petition--Notice to withdraw registration of trust--Writ petition not maintainable against notice-- Vishal Khanna Public Charitable Trust v. Union of India (All) . . . 442

S. 12AA --Writ--High Court--Competency of writ petition--Notice to withdraw registration of trust--Writ petition not maintainable against notice-- Vishal Khanna Public Charitable Trust v. Union of India (All) . . . 442

S. 32 --Depreciation--Lease of assets--Depreciation allowed in prior years--Depreciation allowable in assessment year under consideration-- Dy. CIT v. Gujarat Narmada Valley Fertilizers Co. Ltd. (Guj) . . . 460

S. 35D --Amortisation of expenses--Deduction under section 35D in prior years--Deduction allowable in assessment year under consideration-- Dy. CIT v . Gujarat Narmada Valley Fertilizers Co. Ltd . (Guj) . . . 460

S. 35DDA --Business expenditure--Capital or revenue expenditure--Amortisation of expenses--Payments to employees under voluntary retirement scheme--Compliance with rule 2BA is for benefit under section 10(10C)--No such compliance mandatory for deduction in hands of employer under section 35DDA--Allowable deduction-- CIT v. State Bank of Mysore (Karn) . . . 468

S. 36(1)(iii) --Interest on borrowed capital--Borrowed capital utilised for purchasing new machinery for expansion of business--Interest deductible-- Dy. CIT v. Gujarat Narmada Valley Fertilizers Co. Ltd. (Guj) . . . 460

S. 37 --Capital or revenue expenditure--Expenditure on restructuring loan--Revenue expenditure-- Dy. CIT v. Gujarat Narmada Valley Fertilizers Co. Ltd.
(Guj) . . . 460

S. 44AA(2) --Accounting--Rejection of accounts--Construction business--Assessee maintaining audited books of account--No question of disbelieving them in absence of cogent evidence-- CIT v. Dolphin Builders (P.) Ltd. (MP) . . . 420

S. 44AD --Presumptive taxation--Construction business--Total receipts including those not accounted for in books of account, not exceeding Rs. 40 lakhs--Section 44AD not applicable-- CIT v. Dolphin Builders (P.) Ltd. (MP) . . . 420

S. 45 --Capital gains--Capital asset--Paintings--Law applicable--Effect of amendment of section 2(14) w.e.f. 1-4-2008--Paintings excluded from personal effects w.e.f. 1-4-2008--Gains from transfer of paintings not assessable in assessment year 2005-06-- CIT v.Kuruvilla Abraham (Mad) . . . 519

----Capital gains--Charge of tax--Condition precedent--Transfer of property--Agreement to purchase immovable property--Agreement making it clear that property would be transferred only after payment of entire amount--Entire amount not paid--Clause in agreement that parts of property could be transferred to third parties--Not relevant--No transfer of property--Tax not leviable-- Ratna Trayi Reality Service P. Ltd. v. ITO (Guj) . . . 493

S. 78 --Loss--Firm--Carry forward and set off of loss--Scope of sections 78 and 170 --Dissolution of firm--Business of firm continued by erstwhile partner--Firm and partner are two distinct entities--Loss of firm could not be carried forward and set off by sole proprietor-- Pramod Mittal v. CIT (Delhi) . . . 456

S. 80G --Charitable purposes--Donation to charitable institution--Approval of institution--Corpus donations substantially utilized for commercial activities in nature of construction of shopping complex--Assessee not entitled to approval under section 80G-- Vishal Khanna Public Charitable Trust v. Union of India
(All) . . . 442

S. 80HHC --Export--Special deduction--Premium payment received on transferring export licence--Does not involve any earnings of foreign exchange and does not result in profits attributable to an export activity--No deduction under section 80HHC allowable-- CITv. Garniwal Exports (P.) Ltd. (Karn) . . . 432

S. 127 --Transfer of case--Transfer for purposes of co-ordinated investigation--Reason for such co-ordination must be given-- Global Energy P. Ltd. v . CIT
(Bom) . . . 502

S. 132 --Search and seizure--Warrant of authorisation--No jurisdiction of authority to open camp office in residence of assessee--Allegation that authority trespassed into assessee’s house not countered--Liable to prosecution before competent court--Search and seizure preceded by warrant--Availability of time to pay advance tax and file return--Does not mean that authority had no jurisdiction to issue warrant and effect search and seizure-- Prakash V. Sanghvi v. Ramesh G., Major, Dy. DIT (Inv.)
(Karn) . . . 426

S. 147 --Reassessment--Notice--Change of opinion--Reasons given in notice not matters considered by assessing authority in original assessment on which opinion formed--Reassessment not by change of opinion--Reassessment valid-- Innovative Foods Ltd. v. Union of India (Ker) . . . 389

----Reassessment--Notice--Condition precedent--Tangible material to show escapement of income from tax--Original assessment without scrutiny--Not relevant--Notice cannot be issued without proper reasons-- Ratna Trayi Reality Service P. Ltd. v . ITO
(Guj) . . . 493

----Reassessment--Notice--Validity--Notice not permissible merely for verification of claims--Notice on the ground of miscalculation of special deduction under section 80HHC and excess deduction on account of provision for warranty--Notice valid-- Inductotherm (India) P. Ltd. v. M. Gopalan, Dy. CIT (Guj) . . . 481

----Reassessment--Notice after four years--Validity--Deduction of excess provision written back--Sufficient disclosure in return to enable Assessing Officer to scrutinise such a claim--Reopening after four years not valid-- National Dairy Development Board v. Dy. CIT (Guj) . . . 413

S. 148 --Reassessment--Notice after four years--Validity--Deduction of excess provision written back--Sufficient disclosure in return to enable Assessing Officer to scrutinise such a claim--Reopening after four years not valid-- National Dairy Development Board v. Dy. CIT (Guj) . . . 413

----Reassessment--Notice--Change of opinion--Reasons given in notice not matters considered by assessing authority in original assessment on which opinion formed--Reassessment not by change of opinion--Reassessment valid-- Innovative Foods Ltd. v. Union of India (Ker) . . . 389

----Reassessment--Notice--Condition precedent--Tangible material to show escapement of income from tax--Original assessment without scrutiny--Not relevant--Notice cannot be issued without proper reasons-- Ratna Trayi Reality Service P. Ltd. v . ITO (Guj) . . . 493

----Reassessment--Notice--Validity--Notice not permissible merely for verification of claims--Notice on the ground of miscalculation of special deduction under section 80HHC and excess deduction on account of provision for warranty--Notice valid-- Inductotherm (India) P. Ltd. v. M. Gopalan, Dy. CIT (Guj) . . . 481

S. 153B --Search and seizure--Block assessment--Limitation--Effect of proviso to Explanation in section 153B--Extension of period of limitation--Proviso can be applied more than once--Stay ordered by High Court and thereafter order passed under section 142(2A) for special audit--Both periods to be excluded for computing limitation-- CIT v. Ulike Promoters P. Ltd. (Delhi) . . . 507

S. 170 --Loss--Firm--Carry forward and set off of loss--Scope of sections 78 and 170 --Dissolution of firm--Business of firm continued by erstwhile partner--Firm and partner are two distinct entities--Loss of firm could not be carried forward and set off by sole proprietor-- Pramod Mittal v. CIT (Delhi) . . . 456

S. 240 --Refund--Adjustment of refund--Condition precedent--Intimation in writing to assessee prior to adjustment--No intimation in writing to assessee before making adjustment of refund--Order adjusting refund not justified-- Cognizant Technology Solutions India P. Ltd. v. Dy. CIT (Mad) . . . 373

S. 244 --Refund--Adjustment of refund--Condition precedent--Intimation in writing to assessee prior to adjustment--No intimation in writing to assessee before making adjustment of refund--Order adjusting refund not justified-- Cognizant Technology Solutions India P. Ltd. v. Dy. CIT (Mad) . . . 373

S. 244A --Refund--Adjustment of refund--Condition precedent--Intimation in writing to assessee prior to adjustment--No intimation in writing to assessee before making adjustment of refund--Order adjusting refund not justified-- Cognizant Technology Solutions India P. Ltd. v. Dy. CIT (Mad) . . . 373

S. 245 --Refund--Adjustment of refund--Condition precedent--Intimation in writing to assessee prior to adjustment--No intimation in writing to assessee before making adjustment of refund--Order adjusting refund not justified-- Cognizant Technology Solutions India P. Ltd. v. Dy. CIT (Mad) . . . 373

S. 263 --Revision--Commissioner--Powers--Industrial undertaking--Transport subsidy--Object is to reduce cost of production--Direct nexus to profits of industrial undertaking--Entitled to deduction--Commissioner revising order on ground transport subsidy could not have been deducted by resorting to section 80-IA--Not valid-- Patkai Coal Products Pvt. Ltd. v. CIT (Gauhati) . . . 528

S. 271(1)(c) --Penalty--Concealment of income--Loss--Law applicable--Effect of Explanation 4 to section 271(1)(c)--Concealment of income resulting in reduction of loss--Penalty can be levied-- CIT v. Balaramakrishna Engineering Contractors Corporation (AP) . . . 524

Transfer of Property Act, 1882 :

Ss. 5, 19 --Capital gains--Charge of tax--Condition precedent--Transfer of property--Agreement to purchase immovable property--Agreement making it clear that property would be transferred only after payment of entire amount--Entire amount not paid--Clause in agreement that parts of property could be transferred to third parties--Not relevant--No transfer of property--Tax not leviable--Ratna Trayi Reality Service P. Ltd. v. ITO (Guj) . . . 493

Income-tax Rules, 1962 :

R. 2BA --Business expenditure--Capital or revenue expenditure--Amortisation of expenses--Payments to employees under voluntary retirement scheme--Compliance with rule 2BA is for benefit under section 10(10C)--No such compliance mandatory for deduction in hands of employer under section 35DDA--Allowable deduction-- CIT v. State Bank of Mysore (Karn) . . . 468