MODE OF CITATION : [2015] 153 ITD

Transcription

1 REGULAR BENCH VOL. 153 ISSUE 6 JUNE 23 - JULY 7, 2015 TOTAL PAGES [164] ISSN : AUTHORISED FORTNIGHTLY OF INCOME-TAX APPELLATE TRIBUNAL (MINISTRY OF LAW & JUSTICE) MODE OF CITATION : [2015] 153 ITD EDITOR : RAKESH BHARGAVA CENTRAL ADVISORY BOARD SHRI H.L. KARWA, PRESIDENT, ITAT SHRI G.D. AGARWAL, VICE-PRESIDENT, ITAT SHRI D. MANMOHAN, VICE-PRESIDENT, ITAT SHRI DR. O.K. NARAYANAN, VICE-PRESIDENT, ITAT SHRI G.C. GUPTA, VICE-PRESIDENT, ITAT The Fortnightly is processed by Amit Bhargava It comes in Four Volumes Income-tax Tribunal Decisions is published on every 8th & 23rd of the Month Subscription for January 2015 to December 2015 : ` 5,500 Single copy ` 300 only. Remittance of subscription should be made in favour of Taxmann Allied Services (P.) Ltd. Non-receipt of part must be notified within 60 days from the due date. Material published in this part is the exclusive copyrighted property of Taxmann Allied Services (P.) Ltd. and cannot be reproduced or copied in any form or by any means without written permission of the publisher. This publication is sold with the understanding that authors/editors and publishers are not responsible for the result of any action taken on the basis of this work nor for any error or omission to any person, whether a purchaser of this publication or not. All disputes are subject to jurisdiction of the Delhi High Court. Address your subscription correspondence to Taxmann Allied Services (P.) Ltd., 59/32, New Rohtak Road, New Delhi Phone : Fax : Printed and Published by Amit Bhargava on behalf of Taxmann Allied Services (P.) Ltd. and Printed at Tan Prints (India) Pvt. Ltd., 44 Km. Mile Stone, National Highway, Rohtak Road, Village Rohad, Distt. Jhajjar (Haryana) and Published at 59/32, New Rohtak Road, New Delhi Editor : Rakesh Bhargava. sales@taxmann.com. Website: INCOME-TAX TRIBUNAL DECISIONS n ISSUE 6 q JUNE 23 - JULY 7, 2015 v 3

2 A-2 Contents CONTENTS TABLE OF CASES u A.T. Kearney India (P.) Ltd. v. Addl. CIT (Delhi) 693 u Asstt. CIT v. Vinod K. Sharda (Mum.) 648 u Autodesk Asia Pte Ltd. v. Jt. DIT (Bang.) 668 u Bharatiya Govansh Rakshan Samvardhan Parishad v. CIT (Guwahati) 636 u Birla Corporation Ltd. v. Asstt. CIT (Jabalpur) 679 u Critical Art and Media Practices v. DIT (Mum.) 664 u Devki Devi Foundation v. DIT (Delhi) 716 u Dwarakadas G. Panchmatiya v. Asstt. CIT (Mum.) 625 u Employees Provident Fund Organization v. Addl. CIT (Delhi) 642 u Flag Telecom Group Ltd. v. Dy. CIT (Mum.) 702 u Godrej & Boyce Mfg. Co. Ltd. v. Addl. CIT (Mum.) 676 u Japanese Chamber of Commerce & Industry v. DIT (Chennai) 690 u Kurni Daivachara Sangham v. DIT (Hyd.) 673 u St. Joseph Academy v. DIT (Hyd.) 669 u Times Guaranty Ltd. v. Asstt. CIT (Mum.) 655 u Vijay V. Meghani v. Dy. CIT (Mum.) 687 SUBJECT INDEX APPELLATE TRIBUNAL n Powers of - Power of rectification - Order of Tribunal pronounced beyond 60/90 days as prescribed in rule 34(5)(c) cannot validly be challenged in a petition under section 254(2) - Times Guaranty Ltd. v. Asstt. CIT (Mum.) Power to condon delay - Assessee s application seeking condonation of delay in filing appeal on ground that delay was caused due to advice given by CA to effect that since appeal relating to earlier year on similar issue was already pending before Tribunal, it was only on basis of decision in said appeal, a rectification application could have been filed before the Assessing Officer, was to be rejected - Vijay V. Meghani v. Dy. CIT (Mum.) 687 BAD DEBTS - Inter-corporate deposits - Where inter-corporate deposits became irrecoverable and same were written off by assessee, it was allowable as bad debt - Godrej & Boyce Mfg. Co. Ltd. v. Addl. CIT (Mum.) 676 INCOME-TAX TRIBUNAL DECISIONS n ISSUE 6 q JUNE 23 - JULY 7, 2015 v 4

3 Contents A-3 BUSINESS INCOME n Chargeable as - Share dealings, income from - Where assessee was dealing in large volume of shares for which one has to devote considerable time and resources and has to carry out activities in a systematic manner, he would be considered as trader of shares and income from share transactions would be assessed as business income - Asstt. CIT v. Vinod K. Sharda (Mum.) 648 CHARITABLE OR RELIGIOUS TRUST n Denial of exemption - Applicability of - Provisions of section 13 can be invoked by Assessing Officer while framing assessment and not by Commissioner while considering application for registration under section 12AA - St. Joseph Academy v. DIT (Hyd.) Sub-section (1)(b) - Assessee-society, created for benifit of Kurni community which was classified as a backward class, would come within exception provided under Explanation 2 to section 13 and, thus it could not be denied registration under section 12AA by invoking restriction imposed under section 13(1)(b) - Kurni Daivachara Sangham v. DIT (Hyd.) 673 CHARITABLE PURPOSE - Objects of general public utility/maintenance of Gaushalas - Where assessee-trust was established with object to protect, preserve, maintain and develop Indian breed of cows and its progeny, it was to be regarded as charitable purpose within meaning of section 2(15) and, thus, assessee s application seeking registration under section 12AA was to be allowed - Bharatiya Govansh Rakshan Samvardhan Parishad v. CIT (Guwahati) Charitable institution carrying activities outside India - If activities of a trust are found to be charitable and property is held wholly and exclusively under trust for charitable and religious purposes, then such a trust cannot be denied registration merely because its activities are extended outside India - Critical Art and Media Practices v. DIT (Mum.) Objects of general public utility - Where assessee-society had been formed to promote relationship between India and Japan without any element of profit and fees collected was utilized only for promotion of its aims and objects, it was entitled to registration under section 12AA - Japanese Chamber of Commerce & Industry v. DIT (Chennai) Medical relief - Where assessee-society formed for providing concessional/free treatment for poor people, was allotted land at very concessional rate but it gave its hospital to Max group to exploit same commercially, assessee s registration was to be cancelled - Devki Devi Foundation v. DIT (Delhi) 716 CIRCULARS & NOTIFICATIONS/INSTRUCTIONS - CBDT Circular No. 23, dated Circular No. 308, dated Notification No. SO 1281(E), dated CBDT Circular No. 11 of 2008, dated COLLECTION AND RECOVERY OF TAX n When tax payable and when assessee deemed in default - Stay of demand - Commissioner (Appeals) has inherent power to stay demand, when appeal is pending for disposal before him - Employees Provident Fund Organization v. Addl. CIT (Delhi) 642 INCOME-TAX TRIBUNAL DECISIONS n ISSUE 6 q JUNE 23 - JULY 7, 2015 v 5

4 A-4 Contents DEPRECIATION n Allowance/rate of - Computation of depreciation - While computing depreciation under section 32, value of block of assets in case of resulting company should be written down value of assets of demerged company immediately before demerger - Godrej & Boyce Mfg. Co. Ltd. v. Addl. CIT (Mum.) 676 FREE TRADE ZONE - Computation of deduction - Mere high profit of person carrying on eligible business is no criteria to deny section 10A benefit and apply deeming provision under section 80-IA(10) - A.T. Kearney India (P.) Ltd. v. Addl. CIT (Delhi) 693 INCOME n Deemed to accrue or arise in India - Royalty - Payment received by assessee a non-resident company for sale of software license to end user customers in India amounts to royalty in hands of assessee - Autodesk Asia Pte Ltd. v. Jt. DIT (Bang.) Permanent Establishment - Where assessee made payments to foreign vendors for purchase of plant, equipment and machinery, since none of non-resident vendors had a place of business in India and as such a PE under basic rule of Article 5(1) of respective DTAAs, payments made to them attributed to installation, assembly or commissioning activities of plant, machinery or equipment could not be brought to tax in India as business income under article 7, read with article 5 of respective DTAAs - Birla Corporation Ltd. v. Asstt. CIT (Jabalpur) Royalties and fees for technical services - Where assessee purchased from foreign vendors plant, equipment and machinery and also made payments for incidental services in connection with installation and commissioning of those plant and machinery, same was not liable to tax in India as fee for technical services - Birla Corporation Ltd. v. Asstt. CIT (Jabalpur) Business income - Royalty/Fees for technical services - Payment received by non-resident from Indian company for sale of capacity in sub-marine fibre optic telecom link cable system would be business income, and not royalty; sale being concluded outside India on principal to principal basis, no taxable income would accrue or arise - Flag Telecom Group Ltd. v. Dy. CIT (Mum.) Fees for technical services - Where non-resident that built submarine telecom cable system, formed a consortium with companies that purchased capacity and as per separate Construction and Maintenance Agreement provided standby facility and actual repair facility, fixed annual charges received for standby facility being in nature of reimbursement, was not FTS while actual repair cost charged separately would be FTS - Flag Telecom Group Ltd. v. Dy. CIT (Mum.) 702 INCOME-TAX ACT, Section 2(15) 636, 664, 690, Section 9 668, 679, 680, 702, Section 10A Section , Section 28(i) Section INCOME-TAX TRIBUNAL DECISIONS n ISSUE 6 q JUNE 23 - JULY 7, 2015 v 6

5 Contents A-5 - Section 36(1)(vii) Section Section Section , 687 RETURN OF INCOME n General - e-return - In terms of Electronic Furnishing of Return of Income Scheme, 2007, assessee would be deemed to have furnished valid return of income if duly verified Form ITR-V is filed within 15 days after e-filing of return if ITR-V is filed thereafter, no deduction for section 80-IB, etc. would be allowed - Dwarakadas G. Panchmatiya v. Asstt. CIT (Mum.) 625 WORDS AND PHRASES - Charitable purposes as defined in section 2(15) of the IT Act, INCOME-TAX TRIBUNAL DECISIONS n ISSUE 6 q JUNE 23 - JULY 7, 2015 v 7

6 A-6 Contents INCOME-TAX TRIBUNAL DECISIONS n ISSUE 6 q JUNE 23 - JULY 7, 2015 v 8