Contents A-5. q CIRCULARS

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1 Contents A-5 FOUNDER EDITOR U.K. BHARGAVA EDITOR RAKESH BHARGAVA HONY. COORDINATING EDITORS DR. VINOD K. SINGHANIA AND VINAY JAIN Taxman weekly comes in Eight volumes. Annual Subscription : Rs for Eight volumes for the year Single copy is Rs. 150 only. Back years volume Rs. 500 per volume for paper back and add Rs. 75 per volume for Hard case binding. Taxman weekly is published on every Saturday. NON-RECEIPT OF PART MUST BE NOTIFIED WITHIN 60 DAYS OF THE DUE DATE. Editor does not necessarily agree with the views expressed in magazine section of Taxman weekly. Material published in this part is the exclusive copyrighted property of Taxman and cannot be reproduced or copied in any form or by any means without written permission of 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 editorial and subscription correspondence to Taxmann Allied Services (P.) Ltd., 59/32, New Rohtak Road, New Delhi 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 Phone : Fax : sales@taxmann.com ISSN : MODE OF CITATION [2015] 231 Taxman...(...) TOTAL PAGES [168] STATUTES C ONTENTS q CIRCULARS - Scheme for collection of dues of (i) Central Board of Direct Taxes (ii) Central Board of Excise and Customs (iii) Departmentalised ministries account - Reporting and accounting of March transactions - Special arrangements - Financial Year CIRCULAR DGBA.GAD. NO. 4285/ / , DATED Small Savings Schemes - Interest rate on - Revised rates of interest applicable on Specified Small Savings Scheme effective from PRESS RELEASE, DATED Section 285BA of the Income-tax Act, Annual information return - India joined Multilateral Competent Authority Agreement (MCAA) on Automatic Exchange of Information (AEOI) - PRESS RELEASE, DATED TAX REPORTS : TABLE OF CASES u CIT v. Arvindbhai Maniar Charitable Foundation (Guj.) 908 u CIT v. Brakes India Ltd. (Mad.) 898 u CIT v. Gimpex Ltd. (Mad.) 904 u CIT v. Indian Rare Earths Ltd. (Bom.) 853 u CIT v. Karnataka State Agricultural Produce Processing & Export Corporation Ltd. (Kar.) 831 u CIT v. McDowell and Co. Ltd. (Kar.) 910 u CIT v. Oriental Structural Engineers (P.) Ltd. (Delhi) 823 u CIT v. Sahajanand Associates (Guj.) 888 u CIT v. Sri Durga Enterprises (Kar.) 886 u CIT v. Srinivasa Builders (Kar.) 906 u CIT v. Swastik Associates (Guj.) 893 u CIT v. Translam Ltd. (All.) 901 u CIT v. Travancore Sugars & Chemicals Ltd. (SC) 867 TAXMAN q JUNE 27 - JULY 3, 2015 u 7

2 A-6 Contents u CIT v. Yash International Inc. (HP) 890 u DIT v. B4U International Holdings Ltd. (Bom.) 858 u DIT v. Sri Kuthethur Gururajachar Charities (Kar.) 848 u E-Infochips Ltd. v. Dy. CIT (Guj.) 838 u Gunjan Girishbhai Mehta v. Director of Investigation (Guj.) 873 u Gyanendra Kumar Jain v. Asstt. CIT (All.) 877 u HCL Technologies v. Asstt. CIT (Delhi) 895 u Niti Wadhawan v. Dy. CIT (Delhi) 879 u Pradyot K. Misra v. Asstt. CIT (Delhi) 885 u Ralson India Ltd. v. Dy. CIT (Delhi) 884 u Sarla Rajkumar Varma v. Asstt. CIT (Guj.) 889 u Torrent Power SEC Ltd. v. Asstt. CIT (Guj.) 881 SUBJECT INDEX ASSOCIATION OF PERSON n Assessable as - Joint venture - Where JV was formed only to secure contract, in terms of which scope of each JV partner s task was distinctly outlined and further, entire work was split between two JV partners and they completed task, through sub-contractors, JV was not an association of persons and liable to be taxed on that basis - CIT v. Oriental Structural Engineers (P.) Ltd. (Delhi) 823 BLOCK ASSESSMENT IN SEARCH CASES n Undisclosed income of any other person - Validity of search - There is no requirement under provisions of Act that block assessment proceedings under section 158BD can be initiated only in pursuance of legal and valid search proceedings under section Gunjan Girishbhai Mehta v. Director of Investigation (Guj.) Validity of notice - Notice under section 158BD to assessee was justified where accommodation entry was found in books of a firm regarding sale of jewellery and fact that assessee did not sell jewellery was undisputed - Gyanendra Kumar Jain v. Asstt. CIT (All.) Illustrations - Where panchnama was signed by assessee, merely because warrant issued was limited to a locker maintained in her name which yielded nothing, same would not bar assessment under section 158BD - Niti Wadhawan v. Dy. CIT (Delhi) 879 BUSINESS DISALLOWANCE n Certain deductions to be allowed only on actual payment - Fee - Vend fee collected by State Government from manufacturer for giving special benefit to repair or replace old machinery would be a fee by whatever name called to be allowed only on actual payment in previous year, relevant to assessment year - CIT v. Travancore Sugars & Chemicals Ltd. (SC) 867 BUSINESS LOSS/DEDUCTION n Allowable as - Write off value of corroded items - Where assessee s non-moving stores and spares were TAXMAN q JUNE 27 - JULY 3, 2015 u 8

3 Contents A-7 corroded over a period of time due to wear and tear, assessee would be entitled to write off same in profit and loss account - CIT v. Indian Rare Earths Ltd. (Bom.) 853 CHARITABLE OR RELIGIOUS TRUST n Registration of - Cancellation of - Merely because receipts from commercial activities of assessee-trust were more when compared to overall receipts from charitable activities, registration of assessee could not be cancelled - DIT v. Sri Kuthethur Gururajachar Charities (Kar.) 848 CIRCULARS AND NOTIFICATIONS - Circular No. 23, dated DEDUCTIONS n Donation to certain funds, charitable institution - Approval under section 80G(5) - At stage of registration of trust, nature of activities were not required to be examined; approval under section 80G(5) could not be disallowed only on basis that main activity of assessee trust was not charitable - CIT v. Arvindbhai Maniar Charitable Foundation (Guj.) 908 n Profits and gains from infrastructure undertakings - Computation of deduction - Tribunal was right in reducing claimed deduction under section 80-IA, when assessee did not consider allocation of certain expenditure while computing deduction under section 80-IA - CIT v. Brakes India Ltd. (Mad.) Inflation of profits - Where assessee-company had maintained separate accounts for each unit and Assessing Officer could not prove that business transaction between its eligible unit and other unit were producing more profit to eligible unit assessee would be entitled for deduction under section 80-IA - CIT v. Translam Ltd. (All.) Computation of deduction - Interest received from trade debtor would be deductible under section 80-IA - CIT v. Translam Ltd. (All.) 901 n Profits and gains from industrial undertakings other than infrastructure development undertakings - Housing project - Section 80-IB deduction admissible to assessee developer though development permissions were obtained by landowner - CIT v. Sahajanand Associates (Guj.) Reassessment - Where Assessing Officer allowed assessee s claim for deduction under section 80-IB(10) after making detailed enquiries, he could not initiate reassessment proceedings on basis of same material taking a view that said claim was wrongly allowed - Sarla Rajkumar Varma v. Asstt. CIT (Guj.) Housing project - Section 80-IB(10) deduction is admissible to assessee-developer though land was owned by a co-operative society - CIT v. Swastik Associates (Guj.) Computation of deduction - Onus is on assessee to produce sufficient material on record to show that there is no disproportionate allocation of expenses to arrive at more profits for eligible units in order to claim more relief under section 80-IB - CIT v. Gimpex Ltd. (Mad.) 904 n Special provisions in respect of certain undertakings or enterprises in certain special category States - Splitting up/reconstruction - Where assessee s new unit had different registration number, PAN and customers and its investment in plant and machinery was much higher than existing unit, it could not be said that new unit was formed by splitting up existing TAXMAN q JUNE 27 - JULY 3, 2015 u 9

4 A-8 Contents undertaking so as to deny deduction under section 80-IC - CIT v. Yash International Inc. (HP) 890 FREE TRADE ZONE - Separate undertaking - Where material on record was found to be insufficient to treat each of 31 units of assessee as separate undertakings, benefit under section 10A would be limited to eligible undertakings of assessee - HCL Technologies v. Asstt. CIT (Delhi) 895 INCOME n Chargeable as - Interest - Where sum granted by State Government to assessee-government company acting as nodal agency for increasing export of horticultural produce, was kept in fixed deposit before utilisation, interest earned could not be treated as income of assessee - CIT v. Karnataka State Agricultural Produce Processing & Export Corporation Ltd. (Kar.) 831 n Deemed to accrue or arise in India - Royalty - Where at time of making assessment, assessee disclosed all material facts showing that software licence fee paid to foreign company was in nature of revenue expenditure, AO could not initiate reassessment proceedings subsequently merely on basis of change of opinion that fee so paid was in nature of royalty and thus, assessee was required to deduct tax at source while making said payment - E-Infochips Ltd. v. Dy. CIT (Guj.) Permanent Establishment - Where assessee, a Mauritius based company, engaged in business of telecasting of TV channels, received certain amount in India from time slots given to advertisers through its affiliates, in view of fact that assessee carried out entire activities from Mauritius and its affiliates were remunerated on arm s length basis for carrying out only routine functions in India, they did not constitute assessee s PE in India and, consequently, amount received from advertisers was not liable to tax in India - DIT v. B4U International Holdings Ltd. (Bom.) 858 INCOME ESCAPING ASSESSMENT n Issue of notice for - Disposal of assessee s objection - Before initiating reassessment proceeding, it is obligatory for Assessing Officer to dispose of assessee s preliminary objection by passing a speaking order only - Torrent Power SEC Ltd. v. Asstt. CIT (Guj.) Validity of notice - Even if period for furnishing return of income was not specified in notice under section 148 but assessee had participated in reassessment proceedings, such reassessment was valid - CIT v. Sri Durga Enterprises (Kar.) 886 n Non-disclosure of primary facts - Scope of - Where in course of proceedings relating to reopening of assessment, first respondent passed on order accepting assessee s objection that there was no evidence to connect him with certain properties allegedly acquired out of undisclosed income, he should have dropped reassessment proceedings and, therefore, impugned letter issued by first respondent calling upon assesee to avail of opportunity to cross examine complainant i.e. person, who was author of tax evasion petition, deserved to be quashed - Pradyot K. Misra v. Asstt. CIT (Delhi) 885 INCOME-TAX ACT, Section 4 823, Section 9 838, Section 10A Section 12A 849 TAXMAN q JUNE 27 - JULY 3, 2015 u 10

5 Contents A-9 - Section 28(i) Section 43B Section Section Section 80G Section 80-IA 899, Section 80-IB 889, 890, 893, Section 80-IC Section , Section , Section 158BD 873, 877, Section 244A 899 LOSS RETURN - Conditions precedent - Where original return filed was not a loss return but loss was determined in assessment proceeding, carry forward of loss on account of violation of section 80 could not be denied - CIT v. Srinivasa Builders (Kar.) 906 LOSSES UNDER HEAD CAPITAL GAINS - Land - Where polymer manufacturing unit at Vizag and industrial land in Gujarat were separate properties, loss suffered in one transaction could not be set off against profit made in another transaction - CIT v. McDowell and Co. Ltd. (Kar.) 910 REFUNDS n Interest on - Delayed payment of refund - Revenue is not obliged to pay interest on any amounts except what is provided in statute - CIT v. Brakes India Ltd. (Mad.) 898 SEARCH AND SEIZURE n General - Section 143(3) v. Section Where Assessing Officer passed assessment order under section 143(3) after considering assessee s explanation in respect of documents seized in course of search proceedings, initiation of reassessment proceedings on basis of same material already available on record could not be upheld - Ralson India Ltd. v. Dy. CIT (Delhi) 884 TAXMAN q JUNE 27 - JULY 3, 2015 u 11

6 A-10 Contents TAXMAN q JUNE 27 - JULY 3, 2015 u 12

Contents A-9 U.K. BHARGAVA RAKESH BHARGAVA FOUNDER EDITOR EDITOR HONY. COORDINATING EDITORS DR. VINOD K. SINGHANIA, VINAY JAIN AND NARAYAN JAIN

Contents A-9 U.K. BHARGAVA RAKESH BHARGAVA FOUNDER EDITOR EDITOR HONY. COORDINATING EDITORS DR. VINOD K. SINGHANIA, VINAY JAIN AND NARAYAN JAIN Contents A-9 FOUNDER EDITOR U.K. BHARGAVA EDITOR RAKESH BHARGAVA HONY. COORDINATING EDITORS DR. VINOD K. SINGHANIA, VINAY JAIN AND NARAYAN JAIN Taxman weekly comes in Eight volumes. Annual Subscription