ITR (TRIB) VOL 9 PART 4

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

Volume 9 : Part 4 (Issue dated : 23-05-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Accounting --Valuation of stock--Purchase of securities--Stock-in-trade--Valuation --Profit on revaluation of securities--Taxable on substantive basis--Income-tax Act, 1961-- Joint CIT v. Dena Bank (Mumbai) . . . 327

Appeal to Commissioner (Appeals) --Appealable orders--Meaning of "amount of tax determined"--Expression covers sum as finally determined after adjustment of advance tax, TDS and withheld tax--Assessing Officer not considering withheld tax under section 90/91--Appeal from order competent--Income-tax Act, 1961, s. 246A(1)(a)-- Capgemini Business Services (India) Ltd. v. Deputy CIT (Mumbai) . . . 391

Bad debts --Writing off--Deduction on account of provision for non-rural debts allowed only to extent of debts actually written off--Deduction for bad debts allowable provided debited to profit and loss account and then reduced in balance-sheet--Assessee complying with requirements under section 36(1)(viia)--Deduction for bad debts to be allowed--Income-tax Act, 1961, s. 36(1)(viia)-- Joint CIT v. Dena Bank (Mumbai) . . . 327

Business expenditure --Amortisation of expenses for increasing share capital--Matter not considered--Remanded--Income-tax Act, 1961, s. 35D-- Joint CIT v. Dena Bank (Mumbai) . . . 327

----Bank--Purchase of securities--Interest for broken period--Securities current assets of assessee--Broken period interest deductible--Income-tax Act, 1961, s. 37-- Joint CIT v. Dena Bank (Mumbai) . . . 327

----Company--Disallowance of expenditure--Expenditure on vehicles and telephones by directors and officials could not be disallowed--Income-tax Act, 1961, s. 37-- Ramkishin Textiles P. Ltd. v. ITO (Mumbai) . . . 321

----Disallowance--Entertainment expenses-- Tribunal in earlier year holding 40 per cent. of total expenses not in nature of entertainment expenses--To be followed--Income-tax Act, 1961-- Joint CIT v. Dena Bank (Mumbai) . . . 327

Capital gains --Short-term or long-term capital gains--Purchase and sale of shares in dematerialised form--Effect of CBDT Circular No. 768 dated 24-2-1998--Period of holding of shares prior to transfer--Link between sale of shares with corresponding purchase made earlier must be found--Matter remanded--Income-tax Act, 1961, s. 45 --Circular No. 704 dated 20-4-1995 and 768 dated 24-6-1998-- ITO v. Deepchan G. Shah (Mumbai) . . . 360

Cash credits --Deposits in bank account of assessee--Assessee must be given opportunity to produce cash book for verification--Matter remanded--Income-tax Act, 1961, s. 68-- Batra Gulati Hotels v. ITO (Mumbai) . . . 345

Closing stock --Valuation of--Assessee adopting weighted average value method--Commissioner (Appeals) not examining whether such method an accepted method of valuation mandated by AS-2--Matter remanded--Income-tax Act, 1961-- Asst. CIT v. UE Trade Corporation (India) P. Ltd. (Delhi) . . . 400

Deduction --Depreciation in value of securities held as stock- in-trade--Assessee following "cost or market price whichever is less"--To be considered at market value--Income-tax Act, 1961-- Joint CIT v. Dena Bank (Mumbai) . . . 327

Deduction of tax at source --Interest under section 201(1A)--Assessing Officer while framing assessment under section 143(3) cannot charge interest under section 201(1A)--Income-tax Act, 1961, s. 201(1A)-- Joint CIT v. Dena Bank (Mumbai) . . . 327

Expenditure relating to exempted income --Interest received on tax-free securities--Matter remanded--Income-tax Act, 1961, s. 14A-- Joint CIT v. Dena Bank (Mumbai) . . . 327

Income from house property --Business--Income from other sources--Lease of hotel building with furniture and fixtures--Lease for a long period--Assessee not in hotel business--Income from lease of building assessable as income form house property --Income from lease of furniture and fixtures assessable as income from other sources--Income-tax Act, 1961, ss. 23, 28, 56-- Batra Gulati Hotels v. ITO (Mumbai) . . . 345

Intercorporate dividend --Special deduction--Computation of dividends--Reducing direct expenses from gross dividend--Matter remanded--Income-tax Act, 1961, s. 80M -- Joint CIT v. Dena Bank (Mumbai) . . . 327

Interest on borrowed capital --Borrowed capital advanced interest-free to sister concern--Interest not paid when loans were taken from sister concern--Transaction commercially expedient--Interest deductible--Income-tax Act, 1961, s. 36(1)(iii)-- Ramkishin Textiles P. Ltd. v. ITO (Mumbai) . . . 321

International transactions --Transfer pricing--Arm's length price--Exception under provisos to section 92C(2) applicable only when more than one price determined--Where only one price determined, option of five per cent. not available to assessee--Evaluation of each transaction separately--Permissible--Assessing Officer entitled to determine arm's length price without reference to Transfer Pricing Officer--Income-tax Act, 1961, s. 92C(2)--Circular No. 12, dated 23-8-2001-- Asst. CIT v. UE Trade Corporation (India) P. Ltd. (Delhi) . . . 400

Loss --Forward foreign exchange contract--Matter remanded-- Joint CIT v. Dena Bank (Mumbai) . . . 327

Revision --Depreciation--Non-exclusion of value of land for purpose of grant of depreciation against statutory provision--Assessment order erroneous and prejudicial to interests of Revenue--Income-tax Act, 1961, ss. 32, 263-- Vashti Management Services P. Ltd. v. ITO (Delhi) . . . 372

----Rental income--Assessment as business income in earlier years--View taken by Assessing Officer a possible view--No records to prove contrary--Assessment order not erroneous and prejudicial to interests of Revenue--Income-tax Act, 1961, s. 263-- Vashti Management Services P. Ltd. v. ITO (Delhi) . . . 372

----Set-off of profit earned on transfer of depreciable assets--Assessing Officer not examining nature of income--Assessment order erroneous and prejudicial to interests of Revenue--Income-tax Act, 1961, ss. 41(2), 50(2), 263-- Vashti Management Services P. Ltd. v. ITO (Delhi) . . . 372

----Set-off of speculation loss against business income--Losses classified as business losses and not speculative losses in earlier years--Assessment order not erroneous and prejudicial to interests of Revenue--Income-tax Act, 1961, ss. 73(1), 263.-- Vashti Management Services P. Ltd. v. ITO (Delhi) . . . 372

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961 :

S. 14A --Expenditure relating to exempted income--Interest received on tax-free securities--Matter remanded-- Joint CIT v. Dena Bank (Mumbai) . . . 327

S. 23 --Income from house property--Business--Income from other sources--Lease of hotel building with furniture and fixtures--Lease for a long period--Assessee not in hotel business--Income from lease of building assessable as income form house property --Income from lease of furniture and fixtures assessable as income from other sources-- Batra Gulati Hotels v. ITO (Mumbai) . . . 345

S. 28 --Income from house property--Business--Income from other sources--Lease of hotel building with furniture and fixtures--Lease for a long period--Assessee not in hotel business--Income from lease of building assessable as income form house property --Income from lease of furniture and fixtures assessable as income from other sources-- Batra Gulati Hotels v. ITO (Mumbai) . . . 345

S. 32 --Revision--Depreciation--Non-exclusion of value of land for purpose of grant of depreciation against statutory provision--Assessment order erroneous and prejudicial to interests of Revenue-- Vashti Management Services P. Ltd. v. ITO (Delhi) . . . 372

S. 35D --Business expenditure--Amortisation of expenses for increasing share capital--Matter not considered--Remanded-- Joint CIT v. Dena Bank (Mumbai) . . . 327

S. 36(1)(iii) --Interest on borrowed capital--Borrowed capital advanced interest-free to sister concern--Interest not paid when loans were taken from sister concern--Transaction commercially expedient--Interest deductible-- Ramkishin Textiles P. Ltd. v. ITO (Mumbai) . . . 321

S. 36(1)(viia) --Bad debts--Writing off--Deduction on account of provision for non-rural debts allowed only to extent of debts actually written off--Deduction for bad debts allowable provided debited to profit and loss account and then reduced in balance-sheet--Assessee complying with requirements under section 36(1)(viia)--Deduction for bad debts to be allowed-- Joint CIT v. Dena Bank (Mumbai) . . . 327

S. 37 --Business expenditure--Bank--Purchase of securities--Interest for broken period--Securities current assets of assessee--Broken period interest deductible-- Joint CIT v. Dena Bank (Mumbai) . . . 327

----Business expenditure--Company--Disallowance of expenditure--Expenditure on vehicles and telephones by directors and officials could not be disallowed-- Ramkishin Textiles P. Ltd. v. ITO (Mumbai) . . . 321

S. 41(2) --Revision--Set-off of profit earned on transfer of depreciable assets--Assessing Officer not examining nature of income--Assessment order erroneous and prejudicial to interests of Revenue-- Vashti Management Services P. Ltd. v. ITO (Delhi) . . . 372

S. 45 --Capital gains--Short-term or long-term capital gains--Purchase and sale of shares in dematerialised form--Effect of CBDT Circular No. 768 dated 24-2-1998--Period of holding of shares prior to transfer--Link between sale of shares with corresponding purchase made earlier must be found--Matter remanded--Circular No. 704 dated 20-4-1995 and 768 dated 24-6-1998-- ITO v. Deepchan G. Shah (Mumbai) . . . 360

S. 50(2) --Revision--Set-off of profit earned on transfer of depreciable assets--Assessing Officer not examining nature of income--Assessment order erroneous and prejudicial to interests of Revenue-- Vashti Management Services P. Ltd. v. ITO (Delhi) . . . 372

S. 56 --Income from house property--Business--Income from other sources--Lease of hotel building with furniture and fixtures--Lease for a long period--Assessee not in hotel business--Income from lease of building assessable as income form house property --Income from lease of furniture and fixtures assessable as income from other sources-- Batra Gulati Hotels v. ITO (Mumbai) . . . 345

S. 68 --Cash credits--Deposits in bank account of assessee--Assessee must be given opportunity to produce cash book for verification--Matter remanded-- Batra Gulati Hotels v. ITO (Mumbai) . . . 345

S. 73(1) --Revision--Set-off of speculation loss against business income--Losses classified as business losses and not speculative losses in earlier years--Assessment order not erroneous and prejudicial to interests of Revenue-- Vashti Management Services P. Ltd. v. ITO (Delhi) . . . 372

S. 80M --Intercorporate dividend--Special deduction--Computation of dividends--Reducing direct expenses from gross dividend--Matter remanded-- Joint CIT v. Dena Bank (Mumbai) . . . 327

S. 92C(2) --International transactions--Transfer pricing--Arm's length price--Exception under provisos to section 92C(2) applicable only when more than one price determined--Where only one price determined, option of five per cent. not available to assessee--Evaluation of each transaction separately--Permissible--Assessing Officer entitled to determine arm's length price without reference to Transfer Pricing Officer--Circular No. 12, dated 23-8-2001-- Asst. CIT v. UE Trade Corporation (India) P. Ltd. (Delhi) . . . 400

S. 201(1A) --Deduction of tax at source--Interest under section 201(1A)--Assessing Officer while framing assessment under section 143(3) cannot charge interest under section 201(1A)-- Joint CIT v. Dena Bank (Mumbai) . . . 327

S. 246A(1)(a) --Appeal to Commissioner (Appeals)--Appealable orders--Meaning of "amount of tax determined"--Expression covers sum as finally determined after adjustment of advance tax, TDS and withheld tax--Assessing Officer not considering withheld tax under section 90/91--Appeal from order competent-- Capgemini Business Services (India) Ltd. v. Deputy CIT (Mumbai) . . . 391

S. 263 --Revision--Depreciation--Non-exclusion of value of land for purpose of grant of depreciation against statutory provision--Assessment order erroneous and prejudicial to interests of Revenue-- Vashti Management Services P. Ltd. v. ITO (Delhi) . . . 372

----Revision--Rental income--Assessment as business income in earlier years--View taken by Assessing Officer a possible view--No records to prove contrary--Assessment order not erroneous and prejudicial to interests of Revenue-- Vashti Management Services P. Ltd. v. ITO (Delhi) . . . 372

----Revision--Set-off of profit earned on transfer of depreciable assets--Assessing Officer not examining nature of income--Assessment order erroneous and prejudicial to interests of Revenue-- Vashti Management Services P. Ltd. v. ITO (Delhi) . . . 372

----Revision--Set-off of speculation loss against business income--Losses classified as business losses and not speculative losses in earlier years--Assessment order not erroneous and prejudicial to interests of Revenue-- Vashti Management Services P. Ltd. v. ITO (Delhi) . . . 372