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					                  INCOME TAX REPORTS (ITR)
         Volume 328 : Part 3 (Issue dated 8-11-2010)
 SUBJECT INDEX TO CASES REPORTED IN THIS
                  PART
SUPREME COURT

Advance tax --Nature of--Does not affect charge of tax or modify liability to pay tax
on assessment order--Income-tax Act, 1961, ss. 4(1), 190(1), 207-- Brij Lal v. CIT . . .
477



Settlement of cases --Settlement Commission--Interest under section 234B--Only up
to the date of order under section 245D(1) and not up to date of order of settlement
under section 245D(4)--Income-tax Act, 1961, ss. 234B, 245D(1), (4)-- Brij Lal v. CIT
 . . 477



Settlement Commission--Proceedings concluded--Thereafter interest under section
234B cannot be levied by way of rectification--Relevant date for determining
quantum of interest under section 234B--Income-tax Act, 1961, ss. 2(40), (45), 140A,
143, 154, 207, 209, 210, 215, 234A, 234B, 234C, 245A, 245C, 245D, 245E, 245F, 245-
I-- Brij Lal v. CIT . . . 477



Words and phrases --"Assessment", meaning of-- Brij Lal v. CIT . . . 477



HIGH COURTS



Accounting --Change of method of accounting from turnover base to capital investment
base--Bona fides of assessee to adopt new method cannot be doubted merely because
resulting in more benefits to assessee--Income-tax Act, 1961-- CIT v. Jindal Saw Pipes
Ltd . (Delhi) . . . 338
Advance tax --Interest payable by assessee--Waiver of interest--Jurisdiction to grant
waiver--Effect of circular-cum-notification dated 23-5-1996--Chief Commissioner and
Director General of Income-tax (Exemptions) have jurisdiction only in cases covered by
category 2(a) to (e) mentioned in circular--Income-tax Act, 1961, ss. 234B, 234C--
Circular-cum-Notification dated 23-5-1996-- Director General of Income-tax
(Exemptions) v. Jockeys Association of India (Karn) . . . 405



Appeal to Appellate Tribunal --Additional ground can be entertained--Income-tax Act,
1961, s. 250(5)-- CIT v. Jindal Saw Pipes Ltd. (Delhi) . . . 338



Appeal to High Court --Circular fixing monetary limit in case of appeal by Revenue --
Whether monetary limit applicable to pending cases--To be decided by a larger Bench--
Income-tax Act, 1961, ss. 260A, 268A-- CIT v. Varindra Construction Co. (P&H) . . .
446



Business expenditure --Deduction only on actual payment--Exclusion from disallowance-
-Law applicable--Amendment of section 43B with effect from 1-4-2004--Amendment
retrospective--Payment of contribution to provident fund after due date but before filing
of return--Payment deductible--Income-tax Act, 1961, s. 43B-- H. P. Tourism
Development Corporation Ltd. v. CIT (HP) . . . 508



Cash credits --Share application money--Assessee proving identity of parties,
genuineness of transaction and creditworthiness of share applicants--Tribunal deleting
additions after appreciating evidence on record--Finding of fact--No substantial question
of law--Income-tax Act, 1961, s. 68-- CIT v. Ujala Dyeing and Printing Mills P. Ltd.
(Guj) . . . 437



Charitable purposes --Exemption--Educational institution--Assessee running schools--
Entitled to exemption under section 11--Income-tax Act, 1961, s. 11-- CIT v. Manav
Mangal Society (P&H) . . . 421



Deduction of tax at source --Interest--Chit fund--Chit agreement would not fall under
"money lending"--No "debt incurred"--Bid amount disbursed is not interest payable on
money borrowed--Payments disbursed not subject to deduction of tax at source--Income-
tax Act, 1961, ss. 2(28A), 194A, 201-- CIT v. Sahib Chits (Delhi) (Pvt.) Ltd. (Delhi) . . .
342



Export --Special deduction--Computation--Meaning of "profits of business"--Law
applicable--Effect of insertion of clause (iiid) in section 28 by Finance Act, 2005--Entire
sale consideration on transfer of DEPB credit assessable on business profits--Income-tax
Act, 1961, ss. 28(iiid), 80HHC-- CIT v. Kalpataru Colours and Chemicals (Bom) . . . 451



Special deduction--Computation--Tribunal allowing deduction under section 80HHC on
basis of book profits under section 115JA and not on basis of eligible profits under
section 80HHC as per normal computation--Justified--Income-tax Act, 1961, ss. 80HHC,
115JA-- CIT v. Bhari Information Technology Systems P. Ltd. (Mad) . . . 380



Income --Association--Principle of mutuality--Interest on surplus funds invested in fixed
deposits with banks--Not income received from members of assessee but from third
parties--Investing funds of association in bank fixed deposits a prudent commercial
decision--Principle of mutuality does not apply--Matter remanded--Income-tax Act,
1961-- CIT v. Common Effluent Treatment Plant, (Thane-Belapur) Association (Bom) . .
. 362



Association--Principle of mutuality--Surplus income over expenditure--Principle of
mutuality applies--Not chargeable to tax--Income-tax Act, 1961-- CIT v. Common
Effluent Treatment Plant, (Thane-Belapur) Association (Bom) . . . 362



Principle of mutuality--Club--Surplus funds deposited with institutional members--
Interest on such deposits--Does not satisfy principle of mutuality--Chargeable to tax--
Income-tax Act, 1961, s. 4-- Madras Gymkhana Club v. Deputy CIT (Mad) . . . 348



Time-barred unclaimed matured debentures transferred to general reserve account and
utilised for business purposes--Amount assessable as trading receipt--Income-tax Act,
1961-- Hindustan Foods Ltd. v. Deputy CIT (Bom) . . . 392
Income from undisclosed sources --Additions to income on basis of statement given by
assessee during survey--Assessee later contending that income was from agriculture--
Assessee failing to produce books of account or any other authentic contemporaneous
evidence of agricultural income--Some entries in a diary not sufficient and conclusive to
hold that statement made earlier false--Addition proper--Income-tax Act, 1961, ss 132(4),
133A-- Bachittar Singh v. CIT (P&H) . . . 400



Amount realised on sale of gold jewellery and diamonds--Claim that gold jewellery and
diamonds declared under Voluntary Disclosure of Income Scheme--No specific finding
regarding claim--Addition to income not justified--Matter remanded--Finance Act, 1997,
s. 68-- Smt. Kailashi Devi G. Agarwal v. ITO (Karn) . . . 425



Unaccounted sales--Unaccounted sales covered by income declared by assessee--No
separate addition required--Income-tax Act, 1961-- CIT v. Sambhav Textiles Ltd. (P&H) .
. . 444



Industrial undertaking --Deduction under section 80-IB--Sale of export incentive--Not
income derived from industrial undertaking--Not entitled to deduction--Income-tax Act,
1961 s. 80-IB-- CIT v. Jaswand Sons (P&H) . . . 442



Special deduction under section 80-IA--Computation of gross total income for purposes
of section 80-IA--Deduction granted after setting off losses from all other sources--
Proper--Income-tax Act, 1961, s. 80-IA-- CIT v. Tridoss Laboratories Ltd .(Bom) . . . 448



Loss --Set off of loss--Year in which loss occurred--Destruction of stock stored in State
warehousing corporation by fire in 1978--Suit filed for reimbursement of loss dismissed
in May 1982--Loss allowable in assessment year 1983-84--Income-tax Act, 1961, s. 71--
New Diwan Oil Mills v. CIT (P&H) . . . 432



Precedent --Effect of decision of Supreme Court in CIT v. Alom Extrusions Ltd. [2009]
319 ITR 306-- H. P. Tourism Development Corporation Ltd . v. CIT (HP) . . . 508
Effect of decision of Supreme Court in CIT v. Anjum M. H. Ghaswala [2001] 252 ITR 1-
- Director General of Income-tax (Exemptions) v. Jockeys Association of India (Karn) . . .
405



Principle of mutuality --Application of-- CIT v. Common Effluent Treatment Plant,
(Thane-Belapur) Association (Bom) . . . 362



Reassessment --Limitation--No assessment made under section 143(3)--Time limit of
four years not applicable--Income-tax Act, 1961, ss. 143(3), 147-- Madras Gymkhana
Club v. Deputy CIT (Mad) . . . 348



Search and seizure --Undisclosed investment--Addition on basis of statement under
section 132(4) by assessee recorded at midnight--Assessee later retracting and giving
proper explanation for investment--Statement made at odd hours cannot be considered as
voluntary statement--Addition not justified--Income-tax Act, 1961-- Kailashben
Manharlal Chokshi v. CIT (Guj) . . . 411



Survey --Discrepancy in stock and cash--Addition on basis of statement made during
survey--Assessee later contending that statement incorrect and that discrepancy
reconciled as it was a mistake--Statement made under section 133A not conclusive proof-
-Assessee able to explain discrepancy in stock by production of relevant record--Addition
to be deleted--Income-tax Act, 1961, s. 133A-- CIT v. Dhingra Metal Works (Delhi) . . .
384



Unexplained investments --Addition on basis of variation between stocks hypothecated
with bank and stock shown in books of account--Tribunal finding addition based on bank
statement and verification by Regional Officer that stock actually lying with assessee and
assessee failed to give satisfactory explanation--Findings of fact--Income-tax Act, 1961 s.
69-- B. T. Steels Ltd. v. CIT (P&H) . . . 471



SECTIONWISE INDEX TO CASES REPORTED IN THIS PART
Finance Act, 1997 :



S. 68 --Income from undisclosed sources--Amount realised on sale of gold jewellery and
diamonds--Claim that gold jewellery and diamonds declared under Voluntary Disclosure
of Income Scheme--No specific finding regarding claim--Addition to income not
justified--Matter remanded-- Smt. Kailashi Devi G. Agarwal v. ITO (Karn) . . . 425



Income-tax Act, 1961 :



S. 2(28A) --Deduction of tax at source--Interest--Chit fund--Chit agreement would not
fall under "money lending"--No "debt incurred"--Bid amount disbursed is not interest
payable on money borrowed--Payments disbursed not subject to deduction of tax at
source-- CIT v. Sahib Chits (Delhi) (Pvt.) Ltd. (Delhi) . . . 342



S. 2(40) --Settlement of cases--Settlement Commission--Proceedings concluded--
Thereafter interest under section 234B cannot be levied by way of rectification--Relevant
date for determining quantum of interest under section 234B-- Brij Lal v. CIT (SC) . . .
477



S. 2(45) --Settlement of cases--Settlement Commission--Proceedings concluded--
Thereafter interest under section 234B cannot be levied by way of rectification--Relevant
date for determining quantum of interest under section 234B-- Brij Lal v. CIT



(SC) . . . 477



S. 4 --Income--Principle of mutuality--Club--Surplus funds deposited with institutional
members--Interest on such deposits--Does not satisfy principle of mutuality--Chargeable
to tax-- Madras Gymkhana Club v. Deputy CIT (Mad) . . . 348
S. 4(1) --Advance tax--Nature of--Does not affect charge of tax or modify liability to pay
tax on assessment order-- Brij Lal v. CIT (SC) . . . 477



S. 11 --Charitable purposes--Exemption--Educational institution--Assessee running
schools--Entitled to exemption under section 11-- CIT v. Manav Mangal Society (P&H) .
. . 421



S. 28(iiid) --Export--Special deduction--Computation--Meaning of "profits of business"--
Law applicable--Effect of insertion of clause (iiid) in section 28 by Finance Act, 2005--
Entire sale consideration on transfer of DEPB credit assessable on business profits-- CIT
v. Kalpataru Colours and Chemicals (Bom) . . . 451



S. 43B --Business expenditure--Deduction only on actual payment--Exclusion from
disallowance--Law applicable--Amendment of section 43B with effect from 1-4-2004--
Amendment retrospective--Payment of contribution to provident fund after due date but
before filing of return--Payment deductible-- H. P. Tourism Development Corporation
Ltd. v. CIT (HP) . . . 508



S. 68 --Cash credits--Share application money--Assessee proving identity of parties,
genuineness of transaction and creditworthiness of share applicants--Tribunal deleting
additions after appreciating evidence on record--Finding of fact--No substantial question
of law-- CIT v. Ujala Dyeing and Printing Mills P. Ltd. (Guj) . . . 437



S. 69 --Unexplained investments--Addition on basis of variation between stocks
hypothecated with bank and stock shown in books of account--Tribunal finding addition
based on bank statement and verification by Regional Officer that stock actually lying
with assessee and assessee failed to give satisfactory explanation--Findings of fact-- B. T.
Steels Ltd. v. CIT (P&H) . . . 471



S. 71 --Loss--Set off of loss--Year in which loss occurred--Destruction of stock stored in
State warehousing corporation by fire in 1978--Suit filed for reimbursement of loss
dismissed in May 1982--Loss allowable in assessment year 1983-84-- New Diwan Oil
Mills v. CIT (P&H) . . . 432
S. 80HHC --Export--Special deduction--Computation--Meaning of "profits of business"--
Law applicable--Effect of insertion of clause (iiid) in section 28 by Finance Act, 2005--
Entire sale consideration on transfer of DEPB credit assessable on business profits-- CIT
v. Kalpataru Colours and Chemicals (Bom) . . . 451



Export--Special deduction--Computation--Tribunal allowing deduction under section
80HHC on basis of book profits under section 115JA and not on basis of eligible profits
under section 80HHC as per normal computation--Justified-- CIT v. Bhari Information
Technology Systems P. Ltd. (Mad) . . . 380



S. 80-IA --Industrial undertaking--Special deduction under section 80-IA--Computation
of gross total income for purposes of section 80-IA--Deduction granted after setting off
losses from all other sources--Proper-- CIT v. Tridoss Laboratories Ltd . (Bom) . . . 448

				
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