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Direct Tax Laws
  
 SC/HC
  
 [2014] 49 taxmann.com 29 (Karnataka)[2014] 266 CTR 241 (Karnataka)
Even employee’s contributions to PF are deductible if paid by employer before due date of filing return, rules HC -IT: Contribution by employer towards provident fund means both employer's contribution and employee's contributions and if such contributions are paid before due date prescribed under section 139(1), employer shall be entitled to deductions as provided under section 36(1)(iv) Read Morenew
  
 [2014] 49 taxmann.com 131 (Andhra Pradesh)[2014] 361 ITR 119 (Andhra Pradesh)
No TDS liability of assessee on fees charged by NR bank for ‘LOC’ if it had privity of contract with Indian Bank -IT/ILT : Where a foreign bank charged certain sum terming it as interest on an Indian bank in process of negotiating letter of credit on behalf of its customer i.e. assessee, and said bank recouped amount from assessee, in view of fact that assessee had privity of contract with Indian bank and amounts were also paid to Indian bank only, transaction in question could not be said to fall within meaning of section 195 and, therefore, assessee was not required to deduct tax at source while making pa Read Morenew
  
 [2014] 49 taxmann.com 412 (Delhi)
Commission paid to foreign agents for procuring export orders was outside the ambit of 'FTS' -IT/ILT : Commission paid by assessee to its foreign agent for arranging of export sales and recovery of payments could not be regarded as 'fee for technical services' under section 9(1)(vii) and, thus, assessee was not liable to deduct tax at source while making said payment Read More
  
 [2014] 48 taxmann.com 288 (Delhi)[2014] 267 CTR 122 (Delhi)
HC set aside block assessment proceedings as AO failed to record satisfaction within 2 years of search -IT: Assessing Officer is bound to record satisfaction within meaning of section 158BD within two-year time period stipulated in section 158BE(1) Read More
  
 [2014] 49 taxmann.com 31 (Gujarat)
No denial of TDS credit on its non-appearance in ITD system of department if Form No. 16A was issued by payer -IT: Where deductor having deducted TDS, issued Form No. 16A, credit of same can not be denied to assessee deductee solely on ground that such credit does not appear on ITD system of department and/or same does not match with ITD system of department Read More
  
 [2014] 49 taxmann.com 33 (Jharkhand)[2014] 363 ITR 145 (Jharkhand)
Disclosure of additional income in revised return after filing of block return would attract penalty -IT: Undisclosed income disclosed by assessee after filing revised return under section 158BC, would attract penalty under section 158BFA Read More
  
 [2014] 49 taxmann.com 41 (Bombay)
Disallowance of bogus commission paid to agent in previous year could trigger reopening of cases of earlier years -IT : Where in a subsequent year procurement charges were disallowed as no services were found to have been rendered by agents, said fact would be an information for initiating reassessment proceeding of earlier years Read More
  
 [2014] 49 taxmann.com 37 (Rajasthan)[2014] 268 CTR 351 (Rajasthan)
Share transactions supported by broker's note, share certificate and demat statement couldn't be held bogus -IT: Where transaction of purchase and sale of shares were supported with broker's note, contract note, copies of share certificates and de-mat statement, transaction of shares could not be treated bogus Read More
  
 [2014] 48 taxmann.com 362 (Bombay)
AO couldn’t make disallowance by resorting to rectification proceedings for debatable issues -IT: Where rectification pertaining to computation of deduction under section 80HHC was highly debatable, rectification could not be resorted to under provisions of section 154 Read More
  
 [2014] 49 taxmann.com 30 (Bombay)[2014] 366 ITR 12 (Bombay)
ITAT allows sec. 54 relief for two flats as their layout plan indicated that both were used as a single unit -IT : Where acquisition of two flats had been done independently but eventually they were a single unit and house for purpose of residence, claim under section 54 could not be denied Read More
  
 [2014] 49 taxmann.com 371 (Bombay)
To compute ALV AO has to determine standard rent of property if it isn't fixed under Rent Control Act -IT: At the time of determining Annual Letting Value of properties, which are subject to Rent Control Act, it is the duty of AO to determine standard rent if it isn't fixed under Rent Control Legislation Read More
  
 [2014] 48 taxmann.com 381 (Karnataka)
Indexation benefit available from the year in which asset was held by previous owner to compute cost of acquisition -IT: When an asset is acquired by way of inheritance, cost of acquisition of asset should be calculated on basis of cost of acquisition to previous owner and said cost of acquisition of previous owner has to be calculated on basis of indexed cost of acquisition as provided in Explanation (3) to section 48 Read More
  
 [2014] 48 taxmann.com 356 (Punjab & Haryana)
HC disallows business expenses of ‘Liberty’ as it had already transferred its business to franchisee affiliates -IT : Where assessee had transferred its business to franchisee, assessee could no more claim any business expenditure or depreciation on expenses incurred by it Read More
  
 [2014] 48 taxmann.com 357 (SC)[2014] 266 CTR 141 (SC)
SC: Unabsorbed depreciation is to be adjusted only against export income for computing sec. 10B relief -IT : Supreme Court affirmed decision of Karnataka High Court that for purpose of exemption under section 10B, unabsorbed depreciation should be adjusted against income of export unit only and not against other income Read More
  
 [2014] 48 taxmann.com 329 (Madras)
HC stays tax demand as there was huge difference between income stated in return and assessment order -IT: Where assessee were individual assessees not running commercial business and difference between income shown in returns and assessment orders was very high, assessees were granted stay of demand subject to deposit of certain percentage of demand Read More
  
 [2014] 48 taxmann.com 328 (Gujarat)[2014] 363 ITR 322 (Gujarat)
AO couldn’t make addition of entire unaccounted sales as he could only make addition of profit component -IT: Entire unaccounted sales cannot be added to income but only net profit Read More
  
 [2014] 48 taxmann.com 353 (Madras)
HC orders partial payment of tax in installments considering the financial condition of assessee -IT : Considering assessee's request that its business was not good and it was not in a position to pay 50 per cent of total demanded tax as directed by Assessing Officer, assessee was directed to pay 25 per cent of total demanded tax in two instalments Read More
  
 [2014] 48 taxmann.com 352 (Kerala)
CIT couldn’t make revisional order merely to change the head of income determined under sec. 68 -IT: When in absence of satisfactory explanation about source, unsecured loan was treated by Assessing Officer under head business income, such a view of Assessing Officer being possible, review to assessee loans as income from other sources was unjustified Read More
  
 [2014] 48 taxmann.com 323 (Bombay)
Non-recovery of advance from affiliates due to security scam held as genuine advance; HC allows bad-debts claim -IT: Where assessee could not recover amount advanced to associate company on account of security scam, since said event could not be foreseen, Assessing Officer was not justified in rejecting assessee's claim for write off of said amount under section 36(1)(vii) taking a view that loan was not given in ordinary course of business Read More
  
 [2014] 49 taxmann.com 249 (SC)
SC discusses evils of retro law; proviso to sec. 113 levying surcharge in block assessment cases held prospective -IT : SC discusses the evils of retrospective law while upholding the principle "that unless a contrary intention appears, a law is presumed to be prospective" but stops short of holding substantive retrospective amendments hurting tax payers as unconstitutional Read More
  
 [2014] 48 taxmann.com 294 (Bombay)
No deemed dividend on disbursement of advance if recipient-co. wasn’t a shareholder in lending company -IT : Where certain companies advanced money to assessee-company in which one director of assessee was holding more than 10 per cent equity shares, since assessee itself was not shareholder of those lending companies, impugned addition made by Assessing Officer by invoking provisions of section 2(22)(e) was not sustainable Read More
  
 [2014] 48 taxmann.com 347 (Kerala)[2014] 362 ITR 664 (Kerala)
No requirement to collect info/evidence for every year within block of 6 years to initiate sec. 153A proceedings -IT: There is no requirement under provisions of Act requiring department to collect information and evidence for each and every year for six previous years in order to initiate proceedings under section 153A Read More
  
 [2014] 48 taxmann.com 287 (Gujarat)
HC debars assessee from filing rectification request for second time when first request was rejected by ITAT -IT : When first rectification application was rejected by Tribunal, second rectification application on same issue is not maintainable at all Read More
  
 [2014] 48 taxmann.com 289 (Rajasthan)[2014] 268 CTR 207 (Rajasthan)
No reassessment to deny provision of exp. if all facts were available before AO during original assessment -IT : Where all facts relating to amount taken to balance sheet as provision for project development and registration charges on sale of plot were available before Assessing Officer at time of framing of original assessment, reopening of assessment by successor Assessing Officer could not be sustianed Read More
  
 [2014] 48 taxmann.com 295 (SC)
Supreme Court allows revenue to withdraw SLP with a liberty to file review petition before High Court -IT : Supreme Court could allow revenue to withdraw special leave petition filed before it with liberty to file review petition before High Court Read More
  
 [2014] 48 taxmann.com 243 (Bombay)
While following its earlier order ITAT shall indicate issue dealt in it and date of previous judgment -IT/ILT : Where any order passed by Tribunal in prior assessment years is followed for successive years in relation to same assessee, then, reference to order must be correctly denoted Read More
  
 [2014] 49 taxmann.com 125 (Delhi)
High Court interprets words ‘substantially’; lays down 50% threshold for indirect transfer of capital assets -IT/ILT : There can be no recourse to Explanation 5 to enlarge scope of section 9(1) so as to bring to tax gains or income that may arise from transfer of an asset situated outside India, which does not derive bulk of its value from asset situated in India Read More
  
 [2014] 48 taxmann.com 349 (Karnataka)
Exp. on non-compete fees is in nature of capital exp.; eligible for depreciation, rules HC -IT : Expenditure incurred for acquiring non-compete right is capital in nature entitled to depreciation under section 32(1)(ii) Read More
  
 [2014] 48 taxmann.com 238 (Bombay)
Inland haulage charges are part of income from operation of ships; not taxable under India-Belgium DTAA -IT/ILT: Inland Haulage Charges earned by assessee being part of income derived from operation of ships in international traffic are covered under article 8 of Double Tax Avoidance Agreement (DTAA) entered into between India and Belgium and consequently not taxable as business profits in India Read More
  
 [2014] 48 taxmann.com 296 (Gujarat)
Interest paid to minors on their deposits with firm was to be clubbed under sec. 64 as it was capital investment -IT : Where amount credited in account of minor in partnership firm was to be treated as capital investment, interest paid on such account would be clubbed under section 64(1)(iii) with income of assessee Read More
  
 [2014] 48 taxmann.com 187 (Kerala)[2014] 363 ITR 311 (Kerala)
Scrutiny assessment set aside by HC as it was made without issuing notice under section 143(2) -IT : Where no notice was issued under section 143(2) to assessee, assessment made under section 143(3) was to be set aside Read More
  
 [2014] 48 taxmann.com 375 (Karnataka)
HC upholds reassessment as assessee failed to pay capital gains tax under domestic laws in view of India-UK DTAA -IT/ILT: Where in terms of article 14 of Indo-UK DTAA, assessee was a resident of India and he had to pay capital gains in terms of domestic law of this country, if he did not pay same and merely gave a note along with returns, to which Assessing Officer had not applied his mind, reassessment was justified Read More
  
 [2014] 48 taxmann.com 222 (Delhi)[2014] 268 CTR 173 (Delhi)
Foreign Co. had to file return in response to sec. 148 notice even if issue of existence of PE was in dispute -IT/ILT: Even where existence of PE of petitioner non-resident company was in dispute, if petitioner had not filed return in response to notice issued under section 148, it did not act strictly in accordance with law Read More
  
 [2014] 48 taxmann.com 279 (Madhya Pradesh)[2014] 266 CTR 111 (Madhya Pradesh)
Waiver of loan couldn’t be held as remission under sec. 41(1) if loan amount was never claimed as deductible exp. -IT: Where principal amount of loan being never been claimed by assessee as its expenditure, its waiver would not amount to income of assessee Read More
  
 [2014] 48 taxmann.com 239 (Kerala)
HC asks for afresh proceeding as ITAT simply allowed exp. in year of payment of TDS without considering provisions -IT : Where without interpreting law, Tribunal, simply based on concession given by counsel, proceeded to opine that expenditure could be claimed in year of payment of TDS, matter was to be remanded Read More
  
 [2014] 48 taxmann.com 171 (Bombay)
Income from leasing of equipment wasn’t income from house property if earlier it was taxed as business income -IT : Once department had assessed income from hiring of office equipments along with property as business income in preceding assessment year, then without anything being brought on record to deviate from said finding, revenue could not assess such hire charges as income from property Read More
  
 [2014] 48 taxmann.com 172 (Karnataka)
‘Capital’ includes borrowed capital to compute limit on investment by trust in institute where trustee is director -IT: Word 'capital' as appearing in section 13(4) includes not only share capital but even borrowed capital and, therefore, where investment made by assessee-trust in another institute in which trustees were directors, did not exceed 5 per cent of total capital of said Institute, assessee's claim for exemption of income could not be denied on account of violation of provisions of section 13(4) Read More
  
 [2014] 48 taxmann.com 184 (Karnataka)
Time-limit to rectify mistake under sec. 154 could go beyond 6 months but on merits; HC considers CBDT’s circular -IT : Assessing Authority can pass order in respect of application under section 154, even after expiry of 6 months on merit in accordance with law Read More
  
 [2014] 48 taxmann.com 180 (Allahabad)[2014] 363 ITR 62 (Allahabad)
No disallowance for TDS default from commission paid to NR as Circular No. 786 was effective in year of payment -IT/ILT: Disallowance under section 40(a)(i) for year 2008-09 be deleted since circular No. 786 was applicable which obliged assessee not to deduct TDS Read More
  
 [2014] 48 taxmann.com 189 (Bombay)
Mere disallowance of claim raised by L&T would not justify imposition of concealment penalty on it -IT : Where imposition of penalty under section 271(1)(c) was set aside by Tribunal on findings of fact that merely because assessee raised a claim which was eventually disallowed did not mean that ingredients of clause (c) were satisfied so as to justify imposition of penalty, no substantial question of law arose from said finding of Tribunal Read More
  
 ITAT
  
 [2014] 48 taxmann.com 182 (Jodhpur - Trib.)[2013] 158 TTJ 1 (Jodhpur - Trib.)
Contribution towards approved group gratuity scheme of LIC is a deductible exp. under section 36(1)(v) -IT: Liability to pay in respect of salary settlement crystallizes in year of approval Read Morenew
  
 [2014] 48 taxmann.com 326 (Hyderabad - Trib.)
Technical payments to AEs couldn’t be held as nil if payments under technical agreement were duly approved by RBI -IT/ILT: Where TPO made adjustment to assessee's ALP taking a view that value of technical know how fee and royalty paid by assessee to its promoter company was nil, in view of fact that technical service agreement was duly approved by RBI and, moreover, TPO had not analysed payments in question either under TNMM method or under any other method as required by transfer pricing provisions, impugned disallowance made by TPO was to be set aside Read More
  
 [2014] 49 taxmann.com 39 (Jodhpur - Trib.)[2013] 158 TTJ 42 (Jodhpur - Trib.)
No penalty if assessee offers undisclosed income to tax in return filed pursuant to search of another person -IT : Where pursuant to search proceedings in case of another person, assessee filed a return declaring certain undisclosed income which was duly accepted while framing assessment under section 143(3), read with section 153A, there being no concealment of particulars of income, impugned penalty order passed under section 271(1)(c) was to be set aside Read More
  
 [2014] 49 taxmann.com 32 (Jabalpur - Trib.)[2013] 158 TTJ 54 (Jabalpur - Trib.)
Deductor couldn't be treated as an assessee-in-default if deductee was not liable to pay taxes due to losses -IT/ILT : If recipient of income has no tax liability as per assessment framed under section 143(3) due to losses, then section 201 cannot be made applicable to assessee payee for non-deduction/delay in deposit of TDS Read More
  
 [2014] 48 taxmann.com 386 (Amritsar - Trib.)[2014] 31 ITR(T) 177 (Amritsar - Trib.)
Receipts of all institutions of one society are to be clubbed together to check limit of 1 crore under sec. 10(23C) -IT: Where receipts of assessee-society from two institution managed and run by it exceeded Rs. 1 crore, in absence of exemption certificate under section 10(23C), receipt exceeding over Rs. 1 crore was rightly brought to tax Read More
  
 [2014] 48 taxmann.com 240 (Mumbai - Trib.)
ITAT denies depreciation as assessee failed to prove that asset was used in his business operations -IT: Depreciation on factory building and plant & machinery never put to use during year, could not be allowed Read More
  
 [2014] 49 taxmann.com 51 (Bangalore - Trib.)[2014] 30 ITR(T) 591 (Bangalore - Trib.)
ITAT directs TPO to make afresh TP adjustment in accordance with directions issued by it earlier -IT/ILT : Where in pursuance of Tribunal's directions, TPO passed an order wherein addition made to assessee's ALP was reduced, in view of fact that there were variations and inconsistencies while implementing directions of earlier Bench, impugned order was to be set aside with a direction to Assessing Officer/TPO to revise transfer pricing adjustment in accordance with directions issued by Tribunal in letter and spirit Read More
  
 [2014] 48 taxmann.com 346 (Chennai - Trib.)
No deemed dividend on receipts pursuant to family settlement even if assessee had substantial interest in payer-Co. -IT : Where pursuant to family settlement, assessee received certain amount and assets from a company in which he had substantial interest, provisions of section 2(22)(e) could not be applied to amount so received Read More
  
 [2014] 48 taxmann.com 388 (Pune - Trib.)
Charterer of ship can't be alleged as conduit if relevant docs proves it's position; treaty benefits allowed -IT/ILT : Where cyprus shipping company was not merely a paper company and played its role, Indian agent could not be taxed for its income and treaty benefit of Article 8 of Indo-Cyprus DTAA would be available to it Read More
  
 [2014] 48 taxmann.com 332 (Delhi - Trib.)
Royalty income offered by NR at lower tax rate without any assessment to be deemed as escaped income -IT/ILT: Reassessment in case of assessee a non-resident company was to be upheld as application of 15 per cent tax rate for royalty income under India-US DTAA instead of 30 per cent under section 115A of amounts to lower tax rate application resulting in escapement of Income Read More
  
 [2014] 48 taxmann.com 350 (Bangalore - Trib.)[2013] 27 ITR(T) 648 (Bangalore - Trib.)
AO couldn’t allow notional depreciation while computing capital gains on sale of seized assets by bank -IT: Where assets of assessee were seized by bank as a result of default in repayment of loan, assessee not being in possession of assets, it could not be said that seized assets were kept in a state of readiness and, therefore, while computing capital gain on subsequent sale of those assets carried out by bank directly, Assessing Officer was not justified in allowing notional depreciation in terms of Explanation 5 to section 32 Read More
  
 [2014] 48 taxmann.com 383 (Mumbai - Trib.)
TPO directed to examine proper facts and fix ALP of credit risk assessment exp. charged by HO to Indian branch -IT/ILT : Where assessee, a non-resident bank, charged credit risk assistance expenses from Indian branch separately in same invoice in which it had allocated certain expenses as share of Indian branch in Head Office expenses and, therefore, TPO opined that ALP of seperately claimed expenses was nil, in absence of assessee's explanation and any certificate issued by auditor of Head Office in support of expenses in dispute, matter was to be remanded back for disposal afresh Read More
  
 [2014] 48 taxmann.com 331 (Hyderabad - Trib.)
Income from offshore supply of cables couldn’t be attributed to PE of NR in India, says ITAT -IT/ILT: Where offshore contract was only for procurement of cables that too outside India, no part of income could be said to be attributable to assessee's PE in India Read More
  
 [2014] 49 taxmann.com 40 (Amritsar - Trib.)[2014] 161 TTJ 405 (Amritsar - Trib.)
ITAT quashed sec. 148 notice as it was issued prior to date of approval from Joint or Additional CIT -IT: Where Assessing Officer issued notice under section 148 prior to date of approval from Jt. Commissioner /Addl. Commissioner, notice was bad in law and liable to be quashed Read More
  
 [2014] 48 taxmann.com 373 (Delhi - Trib.)
Income arising to NR from activities not related to its PE in India isn’t taxable -IT/ILT : Where revenue did not challenge Tribunal's finding that Indian subsidiary of assessee-company only constituted its service PE in India in first round of litigation, it could not challenge consequential assessment order passed by Assessing Officer raising a new plea that Indian subsidiary constituted not only service PE but also fixed place PE of assessee in India Read More
  
 [2014] 48 taxmann.com 330 (Hyderabad - Trib.)[2014] 29 ITR(T) 506 (Hyderabad - Trib.)
No disallowance of exp. incurred by trust on international conference/training for advancing objects of trust -IT : Expenditure incurred by a charitable trust on international conference or training could not be disallowed on ground that it was not notified in a circular issued by CBDT Read More
  
 [2014] 48 taxmann.com 327 (Delhi - Trib.)
ITAT deletes penalty as assessee had paid taxes after specifying manner in which undisclosed income was derived -IT: Where Assessing Officer having completed assessment, passed a penalty order under section 271AAA for default of not substantiating manner in which undisclosed income was derived, in view of fact that assessee made statement that he had earned undisclosed income for various transactions of sale/purchase of land which did not face any rebuttal and, moreover, assessee had paid due tax on said income, impugned penalty order deserved to be set aside Read More
  
 [2014] 48 taxmann.com 157 (Ahmedabad - Trib.)
ALP of Mofetil drug couldn’t be determined on basis of other drugs without analyzing their profit margin -IT/ILT : Matter remanded to determine ALP of drug Mofetil when Assessing Officer had compared price of other drugs to determine ALP of Mofetil Read More
  
 [2014] 48 taxmann.com 285 (Mumbai - Trib.)[2014] 31 ITR(T) 420 (Mumbai - Trib.)
Market research exp. incurred by trader was in nature of revenue exp., says ITAT -IT: Expenditure incurred on market research by a trader cannot bring into existence any capital assets; hence, it is revenue expenditure Read More
  
 [2014] 48 taxmann.com 389 (Chennai - Trib.)
TP adjustments set aside as objection of assessee on the business activity of comparables weren't addressed by TPO -IT/ILT : Where assessee had not been provided with list of comparables and its objections regarding business activities of comparables had not been addressed, ALP to be redetermined Read More
  
 [2014] 48 taxmann.com 351 (Mumbai - Trib.)[2014] 29 ITR(T) 652 (Mumbai - Trib.)
Rent paid to a depot agent under a composite service agreement would attract 194C and not sec. 194-I TDS -IT : Where payment made to a depot agent by assessee under agency service agreement was described as rentals paid for premises and specifications were also earmarked and it was for composite services, arrangement would fall under definition of 'rent' provided under section 194C and not under section 194-I Read More
  
 [2014] 48 taxmann.com 241 (Mumbai - Trib.)
Business loss can’t be carried forward which could be set-off with short-term capital gains in relevant year itself -IT: Addition made in respect of unsold property falling within block of assets could not be reduced while computing short-term capital gain on sold property Read More
  
 [2014] 48 taxmann.com 374 (Hyderabad - Trib.)[2014] 30 ITR(T) 434 (Hyderabad - Trib.)
ITAT denies to accept LIBOR to determine ALP of interest; approves rate accepted by assessee in earlier year -IT/ILT : Where assessee filed application contending that LIBOR linked interest rate had to be applied in order to determine ALP of interest in respect of loan granted to AE, since assessee had accepted rate of 7 per cent in earlier year and that was basis for directing to adopt 7 per cent by Tribunal during relevant year as well, said direction did not require any interference Read More
  
 [2014] 48 taxmann.com 292 (Mumbai - Trib.)
Non-filing of Form 3CA would not impose penalty when assessee had filed audit report under Companies Act -IT: Where assessee, a builder, filed audit report under section 224 of Companies Act, 1956, in such a case even though no separate report in Form 3CA as required under section 44AB had been filed, it would not lead to levy of penalty under section 271B Read More
  
 [2014] 48 taxmann.com 344 (Delhi - Trib.)
TPO couldn’t adopt TNMM to make TP adjustment without showing that segmental accounts were manipulated -IT/ILT: Where assessee, engaged in business of rendering inbound, outbound and domestic travel services to AEs, submitted accounts of inbounds and outbounds segments separately showing that international transactions were entered into at ALP, in absence of any evidence to show that those segmental accounts were manipulated, TPO was not justified in adopting TNMM and making addition to assessee's ALP on basis of weighted margin earned by external comparables Read More
  
 [2014] 48 taxmann.com 324 (Chennai - Trib.)
Profit on sale of shares deemed as capital gains as investment in shares was made along with regular business -IT : In case of a share broker earning exempted income from investment in shares, 10 per cent of such exempted income was to be attributed towards expenditure for earning of such exempted income Read More
  
 [2014] 48 taxmann.com 291 (Mumbai - Trib.)[2014] 31 ITR(T) 338 (Mumbai - Trib.)
Exp. incurred at a place where manufacturing facilities were carried out were outside the ambit of sec. 14A -IT: Expenses directly incurred in relation to manufacturing activities could not be disallowed under section 14A Read More
  
 [2014] 48 taxmann.com 155 (Mumbai - Trib.)
Management fee paid to Danish firm for managing shipping companies wasn’t FTS under India-Denmark DTAA -IT/ILT: Freight income is taxable in hands of shipping companies for whom assessee was acting as representative to carry out obligation for filing of return of income as well as managing entire affairs Read More
  
 [2014] 48 taxmann.com 293 (Mumbai - Trib.)[2014] 159 TTJ 21 (Mumbai - Trib.)
Remission of sale-tax loan on prepayment of loan amount won’t be deemed as remission of liability under sec. 41(1) -IT : Where in terms of 'Madhya Pradesh Government Conversion of Amount of Deferred Tax into Loan Liability Scheme, 1989', sales-tax payable was converted into loan which was repaid on an early date, concession received on said pre-payment of loan did not amount to remission or cessation of liability so as to attract relevant provisions of Act Read More
  
 [2014] 48 taxmann.com 380 (Bangalore - Trib.)
Manufacturing and trading segment of vehicles could be combined for TP analysis as both segments were interlinked -IT/ILT : Where assessee was engaged in manufacturing and selling of vehicles, in view of fact that both segments were interlinked, a combined approach was to be adopted and since in terms of said approach profit margin earned by assessee was within premissible range of plus/minus five per cent of arithmatic mean margin earned by comparables, adjustment made to assessee's ALP was to be set aside Read More
  
 [2014] 48 taxmann.com 286 (Chandigarh - Trib.)[2014] 31 ITR(T) 424 (Chandigarh - Trib.)[2014] 162 TTJ 6 (Chandigarh - Trib.)(UO)
No penalty for setting off unabsorbed depreciation and losses against capital gains on wrong advice of counsel -IT: No penalty is to be levied under section 271(1)(c) for setting off brought forward loss and depreciation on wrong advice of counsel Read More
  
 [2014] 49 taxmann.com 275 (Bangalore - Trib.)
Sum paid for importing service manuals which contained instructions for usage of equipment wasn't royalty -IT/ILT : Where assessee, in course of business of importing and selling of visual and information technology equipments like projectors, LCD cables, projector lamps etc. within India, also imported manuals and software which contained operating and servicing instructions for use of those equipments, since said service manuals were not protected by any licence or copyright and they could be used by anybody who purchased them without any restriction on right to transfer or usage, it was a case of Read More
  
 [2014] 48 taxmann.com 348 (Agra - Trib.)[2013] 28 ITR(T) 161 (Agra - Trib.)
Corpus donations of private religious trust weren’t taxable; ITAT denies to interfere with order of CIT(A) -IT : Where Commissioner (Appeals) relying upon three decisions of different Benches of Tribunal, accepted assessee's claim that donation received from 'B' was towards corpus of trust, in view of fact that facts in cases relied upon were identical to facts involved in assessee's case, impugned order did not require any interference Read More
  
 [2014] 48 taxmann.com 290 (Amritsar - Trib.)[2014] 162 TTJ 1 (Amritsar - Trib.)
No TDS liability of individual under sec. 194H if his turnover didn’t exceed sec. 44AB limit in preceding year -IT: Where assessee's turnover did not exceed prescribed amount in immediate preceding year, TDS provisions under section 194H was not applicable Read More
  
 [2014] 48 taxmann.com 244 (Visakhapatnam - Trib.)
Bank couldn’t be treated as an assessee-in-default merely due to some technical defects in Form 15G declarations -IT: Where depositors had furnished declaration in prescribed manner requesting deductor not to deduct tax at source, deductor was under a statutory obligation not to deduct tax and in aforesaid circumstances, deductor could not be penalized for not deducting tax at source Read More
  
 [2014] 48 taxmann.com 280 (Chennai - Trib.)
Rectification wasn’t permissible if no mistake was pointed out in order of ITAT; review petition dismissed -IT : Where assessee had filed review petition against order of Tribunal and grounds raised therein were general in nature and further assessee could not point out any specific mistake in said order, petition was to be dismissed Read More
  
 [2014] 48 taxmann.com 299 (Delhi - Trib.)
Royalty on variants of product couldn't be disallowed if royalty on original products were considered at ALP -IT/ILT: Where TPO had accepted 'most appropriate method' followed by assessee and approved arm's length price of royalty rate determined by asseesee, with respect to payment of royalty of products, claim of assessee on payments of royalty on variants of products was to be allowed Read More
  
 [2014] 48 taxmann.com 283 (Delhi - Trib.)[2014] 160 TTJ 416 (Delhi - Trib.)
AO couldn’t treat agricultural income as income from other sources when assessee had filed due records -IT: Where assessee, in support of his claim of earning agricultural income, produced relevant agricultural record and, moreover, income so earned had been returned and accepted by Department year after year, impugned order passed by Assessing Officer that income in question was taxable as 'income from other sources' was to be set aside Read More
  
 [2014] 48 taxmann.com 284 (Mumbai - Trib.)[2014] 159 TTJ 415 (Mumbai - Trib.)
Gain arising from sale of inherited land after its conversion into smaller plots was taxable as business profits -IT: Where assessee converted ancestral land into smaller plots and after providing road, parking space etc., sold same over a period of years, assessee's claim that he converted capital asset i.e. land into stock-in-trade and, thus, income arising from sale of land was taxable as business income was to be accepted Read More
  
 [2014] 49 taxmann.com 149 (Delhi - Trib.)
Erecting bus queue shelters by advertising Co. isn’t pre-operative exp. even if they aren’t yet ready for advertisement -IT: Where in pursuance of contract awarded by NDMC for construction of Bus Queue Shelters (BQS), assessee entered into manufacturing agreement with third party for manufacture and installation of BQS and also made advance payment, assessee's business could be said to commence in relevant year and, therefore, revenue authorities were not justified in rejecting assessee's claim for deduction of certain expenses taking a view that said expenses were in nature of pre-operative expenses as business w Read More
  
 [2014] 48 taxmann.com 129 (Jodhpur - Trib.)
Income generated by Museum from ancillary activities couldn’t be deemed as business receipt; sec. 11 relief allowed -IT : Where assessee, was settled with object of establishing a museum portraying pictures, paintings, antique coins etc., its activities were to be regarded as falling under category of 'general public utility' within meaning of section 2(15) Read More
  
 [2014] 48 taxmann.com 175 (Mumbai - Trib.)
No withholding taxes from freight paid to foreign shipping Co. or to its agent which was assessed under sec. 172 -IT/ILT: Where assessee claims that tax is not required to be deducted at source as payment of freight has been made to foreign shipping company, in such a case, assessee has to show that shipping companies to whom payments have been made are not only non-residents but also that they have been assessed under section 172 Read More
  
 [2014] 48 taxmann.com 188 (Mumbai - Trib.)[2014] 29 ITR(T) 531 (Mumbai - Trib.)
Advance to a screenplay writer for sale of rights of his film to be taxed in year in which he performed his work -IT : Where assessee, a screenplay writer, received certain amount as advance for sale of negative rights of his film which was to be adjusted subsequently on signing formal agreement with purchaser, amount so received was to be considered as income of assessee in year in which he performed his part of work and not during relevant assessment year even if assessee was following cash system of accounting Read More
  
 [2014] 48 taxmann.com 174 (Mumbai - Trib.)[2014] 33 ITR(T) 133 (Mumbai - Trib.)
Revised audit report filed after completion of assessment should be considered by CIT to allow sec. 80-IB relief -IT: Even if revised audit report for purpose of claiming deduction under section 80-IB is filed after date of passing of assessment order, same should be taken into cognizance for examining allowability of deduction Read More
  
 [2014] 48 taxmann.com 176 (Chennai - Trib.)
Comparables with high turnover, abnormal profits and high capital infrastructure to be excluded for TP study -IT/ILT: Where TPO made certain addition to assessee's ALP in respect of providing customer support services to its AE, in view of fact that one of comparables selected by TPO was improper as it was earning abnormal profits on account of its huge turnover and high capital infrastructure, impugned addition was to be set aside Read More
  
 [2014] 48 taxmann.com 224 (Chennai - Trib.)[2014] 29 ITR(T) 753 (Chennai - Trib.)
ITAT directs AO to allow 80% depreciation on windmill as it was erected before Sept. 30, 2007 -IT: When assessee had erected windmill, generated wind power and sold it to state electricity board prior to 30th September of year, income from which was taxed, depreciation was to be allowed at full rate Read More
  
 [2014] 48 taxmann.com 178 (Mumbai - Trib.)
Payer couldn’t be subject to interest for TDS default if payee wasn’t subjected to tax on similar payments in past -IT/ILT: Payer couldn’t be subject to interest for TDS default if payee wasn’t subjected to tax on similar payments in past Read More
  
 [2014] 48 taxmann.com 185 (Chandigarh - Trib.)[2013] 28 ITR(T) 77 (Chandigarh - Trib.)[2013] 158 TTJ 132 (Chandigarh - Trib.)
No concealment penalty if amount surrendered in search wasn’t disclosed in return but advance tax was paid on it -IT-I : Where pursuant to search proceedings, assessee filed his return wherein amount surrendered was not disclosed due to unintentional mistake, in view of fact that surrendered income had been duly reflected in cash flow chart and balance sheet and moreover, assessee had paid advance tax on said amount, there being no concealment of particulars of income, impugned penalty order passed under section 271(1)(c) was to be set aside Read More
  
 [2014] 48 taxmann.com 173 (Delhi - Trib.)
Section 251 empowers CIT (Appeals) to remit case back to Assessing Officer instead of deciding it -IT : Commissioner (Appeals) is empowered under section 251(1)(c) to remit case back to file of Assessing Officer instead of deciding it Read More
  
 [2014] 48 taxmann.com 186 (Mumbai - Trib.)[2013] 157 TTJ 892 (Mumbai - Trib.)
Value of derivative transactions in commodities at MCX won’t be included in turnover for tax audit purposes -IT : Value of sale transactions of commodity through MCX without delivery cannot be considered as turnover for purpose of section 44AB and, therefore, failure on part of assessee to get its accounts audited in such a case, would not lead to levy of penalty under section 271B Read More
  
 [2014] 48 taxmann.com 94 (Hyderabad - Trib.)
Investment in share capital of overseas subsidiaries not to be deemed as an international transaction -IT/ILT : Following order passed in case of Vijai Electricals Ltd. v. Addl. CIT [2013] 60 SOT 77 (URO)/36 taxman.com 386 (Hyd.), it was to be concluded that amount representing investment in share capital of subsidiaries outside India was not in nature of transaction referred to section 92B and, thus, transfer pricing provisions were not applicable to such a transaction Read More
  
 Statutes
  
NOTIFICATION NO. 43/2014 [F.NO.152/1/2013-TPL]/SO
CBDT extends 80% rate of depreciation on windmills and devices running on wind energy installed after 31-3-2014 -IT : Income-Tax (Eighth Amendment) Rules, 2014 - Amendment in New Appendix-I Read Morenew
  
OFFICE MEMORANDUM [F.NO.279/MISC./M-84/2014-(ITJ)]
CBDT seeks inputs from officials to improve quality of assessment orders and to reduce litigation -IT : Constitution of A Committee to Study The Appellate Orders to Examine The Filing of Appeals by Department before Various Forums – Suggestions Invited from all Officers for Improving Quality of Assessment Orders and to Strengthen Institution of CIT(A) Read More
  
LETTER [F.NO.SW/3/3/96/01-DIT(S)]
DIT asks Nodal officers to transfer out PAN from old/orphan jurisdictions to jurisdictional AOs -IT/ILT : Section 139A of The Income-Tax Act, 1961 – Permanent Account Number (PAN) – Migration of Pans Lying in Old/Orphan Jurisdiction and Review of AO Codes Where no Employee Number is Attached Read More
  
ORDER NO. 3/FT&TR/2014 [F.NO.500/12/2013-SO/FT&TR-
CBDT reconstitutes DRP panel at Bengaluru -IT/ILT : Section 144C of The Income-Tax Act, 1961 - Dispute Resolution Panel (DRP) - Reference to - Reconstitution Of DRP at Bengaluru Read More
  
ORDER [F.NO.225/268/2014/ITA.II]
CBDT extends due date for filing of return by two months for income-tax assessees in State of J&K -IT/ILT : Section 119 of the Income-Tax Act, 1961 - Income-Tax Authorities - Instructions to Subordinate Authorities – Extension of Due-Date for Filing Returns of Income from 30-9-2014 to 30-11-2014 by Assessees in State of Jammu & Kashmir Read More
  
NOTIFICATION NO.42/2014 [F.NO.503/4/2004-FTD-II]
Govt. notifies comprehensive DTAA with Bhutan -IT/ILT : Section 90 of the Income-Tax Act, 1961 - Double Taxation Agreement - Agreement for Avoidance of Double Taxation and Prevention of Fiscal Evasion with Foreign Countries - Bhutan Read More
  
 News
  
India Backs Automatic Info Exchange for Black Money -India Backs Automatic Info Exchange for Black Money [23-09-2014] Read Morenew
  
Gujarat High Court directs CBDT to extend due date for filing of ITR to 30-11-2014 subject to Sec. 234A interest -Gujarat High Court directs CBDT to extend due date for filing of ITR to 30-11-2014 subject to Sec. 234A interest [22-09-2014] Read More
  
G20 commitment on tax data to help India track black money -G20 commitment on tax data to help India track black money [22-09-2014] Read More
  
Switzerland Feels the Heat on Sharing Bank Ac Info -Switzerland Feels the Heat on Sharing Bank Ac Info [22-09-2014] Read More
  
Back to tax confusion -Back to tax confusion [19-09-2014] Read More
  
CBDT Seeks Staff Views to Expedite Processes -CBDT Seeks Staff Views to Expedite Processes [19-09-2014] Read More
  
Due date for payment of advance tax extended by three months for taxpayers in State of J&K -Date of payment of the September instalment of advance tax is extended from 15th September 2014 to 15th December 2014 for the taxpayers in State of Jammu & Kashmir [18-09-2014] Read More
  
India's Black Money Proposal Not Feasible, feels Oz G-20 Meet Host -India's Black Money Proposal Not Feasible, feels Oz G-20 Meet Host [18-09-2014] Read More
  
Voda case: Deadline for arbitrator to be dragged -Voda case: Deadline for arbitrator to be dragged [17-09-2014] Read More
  
Fresh tax demand on foreign investors -Fresh tax demand on foreign investors [17-09-2014] Read More
  
HC Defers Plea on Tax Audit, Leaves CAs Edgy -HC Defers Plea on Tax Audit, Leaves CAs Edgy [16-09-2014] Read More
  
Accounting Professionals Move Court for Clarity on Tax Audit Deadline -Accounting Professionals Move Court for Clarity on Tax Audit Deadline [15-09-2014] Read More