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Direct Tax Laws
  
 SC/HC
  
 [2014] 51 taxmann.com 530 (Allahabad)
No revision by CIT if AO had accepted genuineness of agricultural income after making detailed inquiry -IT : Where Assessing Officer accepted genuineness of agricultural income shown by assessee after making necessary inquiry, no revision order could be passed under section 263 Read Morenew
  
 [2015] 53 taxmann.com 393 (Punjab & Haryana)
Net profit rate to be fixed on basis of past tax history of assessee, value of contract and price of raw materials -IT : Discretion to determine net profit rate vested in authorities must be exercised on basis of relevant factors which are past tax history of assessee, an appraisal of value of contract, price of raw material, labour etc. Read Morenew
  
 [2015] 53 taxmann.com 291 (Bombay)[2014] 364 ITR 593 (Bombay)
CIT(A) rightly deleted addition of undisclosed income after allowing AO to cross-examine author of seized doc -IT: Where Commissioner (Appeals) not only examined author of seized document but also allowed Assessing Officer to cross-examine said author, there was no perversity or error of law apparent on face of record in order passed by Commissioner (Appeals) deleting addition of undisclosed income Read Morenew
  
 [2015] 53 taxmann.com 432 (Bombay)
'Resale Price Method' was to be adopted if goods purchased from AE were sold to non-AE without any processing -IT/ILT: In case of distribution or marketing activities when goods are purchased from associated entities and sales are effected to unrelated parties without any further processing, then, RPM (resale price method) is most appropriate method to determine ALP of said transaction Read Morenew
  
 [2014] 52 taxmann.com 51 (Punjab & Haryana)[2014] 367 ITR 769 (Punjab & Haryana)
AO can make additions on issues not included in reasons recorded that come to his notice in course of reassessment -IT : In view of Explanation 3 to section 147, Assessing Officer is empowered to make addition even on ground on which reassessment notice might not have been issued Read More
  
 [2015] 53 taxmann.com 289 (Delhi)[2015] 228 Taxman 261 (Delhi)(MAG.)[2014] 368 ITR 692 (Delhi)
Trader has commenced its business when it got registration of shop, appointed employees and opened bank account -IT: Where assessee-company had rented out office premises, opened bank account, appointed employees and got registered under Shop & Establishment Act, business of assessee could be said to have been set up and expenditure incurred thereafter were allowable as revenue expenditure Read More
  
 [2015] 53 taxmann.com 395 (Punjab & Haryana)
Assessee couldn't be asked to pay taxes in subsequent year once assessee had already discharged his tax liability -IT : Where assessee had already discharged his tax liability in earlier year in respect of surrendered/recovered income, assessee could not be taxed once again for same income in relevant assessment year Read More
  
 [2015] 53 taxmann.com 306 (Andhra Pradesh)[2014] 369 ITR 171 (Andhra Pradesh)
Confessional statement doesn't have evidentiary value in absence of incriminating material found during search -IT : Where in absence of any incriminating material etc., found from premises of assessee during course of search, statement of assessee recorded under section 132(4) would not have any evidentiary value; Read More
  
 [2015] 53 taxmann.com 392 (Madras)
HC sets aside addition of deemed dividend as assessee-co. wasn't a shareholder in lender-Co. -IT : Where assessee company received a sum from another company it was not liable to pay tax under section 2(22) as assessee was not a registered or beneficial shareholder of a company Read More
  
 [2015] 53 taxmann.com 297 (Punjab & Haryana)
AO could invoke sec. 14A disallowance even if assessee had utilized mixed funds for earning tax free income -IT : Where funds utilized by assessee was mixed funds and, hence, interest paid on borrowed fund was also relatable to interest on investment made in tax free funds, interest expenditure relatable to investment in tax free funds was to be computed under provisions of Rule 8D(2)(ii) Read More
  
 [2014] 52 taxmann.com 64 (Gujarat)[2014] 367 ITR 223 (Gujarat)
Order passed by CIT under sec. 119 is an administrative order; not appealable before Tribunal -IT : Where Commissioner's order under section 119(2)(b) being administrative was held not appealable before Tribunal, Tribunal's order did not call for rectification by Tribunal Read More
  
 [2014] 52 taxmann.com 63 (Punjab & Haryana)[2014] 367 ITR 74 (Punjab & Haryana)
No penalty on addition under sec. 41(1) when assessee's plea against cessation of liability was plausible -IT : Where assessee's plea regarding addition made by Assessing Officer on account of cessation of liability was plausible, penalty under section 271(1)(c) was not leviable Read More
  
 [2015] 53 taxmann.com 453 (Kerala)
I-T authorities can collect relevant info to check tax evasion; HC upholds constitutional validity of sec. 133(6) -IT: Even assuming that the right to privacy is itself a fundamental right, such fundamental right must be subject to restriction, on the basis of compelling 'public interest'. There is no prohibition on the State in gathering information for preventing tax evasion and curb black money. Unless necessary information is furnished, the data collection will become impossible and no proceedings can be pursued against wrongdoers to guard economy of the country. It is well settled that the 'taxation ent Read More
  
 [2015] 53 taxmann.com 295 (Gujarat)
Nature of activities of trust need not be examined at the time of its registration under sec. 80G -IT : 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 Read More
  
 [2015] 53 taxmann.com 311 (Punjab & Haryana)
No denial of sec. 12AA registration to trust merely due to non-commencement of charitable activities -IT : Application for registration under section 12A cannot be rejected on ground that assessee had not yet carried on any charitable activity Read More
  
 [2015] 53 taxmann.com 413 (Uttarakhand)
Uttarakhand HC denies quashing of notification which blacklisted Cyprus for not sharing tax information -IT/ILT : While exercising the writ jurisdiction under Article 226 of the Constitution of India, the High Court ordinarily should not proceed to look into as to whether informations sought by the Indian Authorities were ever declined by the Government of Cyprus or Government of Cyprus is ready and willing to supply the informations sought by the Indian Authorities. Moreover, there seems to be no valid reason to disbelieve the satisfaction so recorded by the Indian Authorities. Hence, relief Read More
  
 [2015] 53 taxmann.com 278 (Rajasthan)
Question of law has to be answered by HC once a reference is called at its instance even when tax effect is lower -IT : Once a reference is called at instance of High Court, question of law framed has to be answered on merits and it cannot be disposed off merely because tax effect is minimal Read More
  
 [2015] 53 taxmann.com 274 (Madras)[2015] 228 Taxman 258 (Madras)(MAG.)
Writing off debts in accounts is enough to claim deduction of bad debts; no need to prove their irrecoverability -IT : Where debts were irrecoverable in accounts of assessee even though no evidence was produced by assessee to show that debt had actually become irrecoverable, bad debts claimed would be allowed Read More
  
 [2015] 53 taxmann.com 273 (Delhi)[2015] 228 Taxman 264 (Delhi)(MAG.)
Royalty paid to film producers for obtaining reproduction rights of music was revenue exp. -IT : Where assessee carried on business of reproduction of audio sound and music from master plate provided by film producers and distributors, royalty paid for obtaining rights of reproduction was allowable as revenue expenditure Read More
  
 [2014] 52 taxmann.com 54 (Gujarat)[2014] 367 ITR 686 (Gujarat)
No addition of undisclosed investment if there was minor difference in report of DVO and assessee’s valuer -IT : Where there was minor difference in valuation report of DVO and assessee's valuer regarding cost of construction, addition made as undisclosed investment could not be sustained Read More
  
 [2015] 53 taxmann.com 313 (Karnataka)
Principal amount forgone by depositor after settlement couldn't be taxed under sec. 41(1) in hands of NBFC -IT : Balance amount which was not repaid under arrangement between assessee-NBFC and depositors after setting their claims did not constitute an income and assessee was not liable to pay tax Read More
  
 [2015] 53 taxmann.com 307 (Andhra Pradesh)
Advance received from subsidiary-Co. to meet business liabilities wasn't deemed dividend in hands of holding Co. -IT: Where subsidiary company advanced money to assessee-company to meet their business liabilities, said amount could not be deemed dividend income of assessee-company Read More
  
 [2015] 53 taxmann.com 404 (Delhi)
Delhi High Court reads down first proviso to sec. 2(15); rescues genuine charities from its clutches -IT : The correct interpretation of the proviso to section 2(15) of the Act would be that it carves out an exception from the charitable purpose of advancement of any other object of general public utility and that exception is limited to activities in the nature of trade, commerce or business or any activity of rendering any service in relation to any trade, commerce or business for a cess or fee or any other consideration. In both the activities, in the nature of trade, commerce or business Read More
  
 [2014] 52 taxmann.com 58 (Andhra Pradesh)[2014] 367 ITR 298 (Andhra Pradesh)
Rent received from building constructed on leasehold land is business income and not income from house property -IT : Expenditure incurred on construction of building on leasehold land should be treated as a revenue expenditure Read More
  
 [2014] 52 taxmann.com 61 (Andhra Pradesh and Telangana)[2014] 367 ITR 195 (Andhra Pradesh and Telangana)
Interest on purchase duty would be deductible on payment basis under sec. 43B, rules High Court -IT : Provision of section 43B are applicable to interest payable on purchase duty Read More
  
 [2015] 53 taxmann.com 143 (Himachal Pradesh)
Sec. 80-IC: Unit set-up with new PAN and having investment in plant higher than existing unit was new unit -IT : 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 undertaking so as to deny deduction under section 80-IC Read More
  
 [2015] 53 taxmann.com 230 (Madras)
Sum paid to Employees Association for construction of 'Shamiana' would be donation and not business exp. -IT : Amount paid to Employees Welfare Association for construction of Kalyan Mandapam is donation, there being no proof of having paid for more efficient and contended labour force Read More
  
 [2014] 52 taxmann.com 167 (Rajasthan)
HC allowed deduction of sales tax even when net profit was estimated after rejection of accounts -IT : Even in case of rejection of accounts and estimate of net profit, deduction towards sales tax payment could be allowed Read More
  
 [2015] 53 taxmann.com 294 (Bombay)
No dependent agency PE under India-France DTAA when transactions between agent and principal were made at ALP -IT/ILT : If it is not shown that transactions between agent and principal were not made under arm's length conditions, he will not be considered as agent of French principal within meaning of Para 6 of Article 5 of DTAA between Indian and France Read More
  
 [2015] 53 taxmann.com 147 (Andhra Pradesh)[2014] 368 ITR 724 (Andhra Pradesh)
Unabsorbed losses or depreciation spread over block period couldn't be adjusted against undisclosed income -IT : Unabsorbed loss or carried forward depreciation spilled over block period shall not be adjusted against undisclosed income Read More
  
 [2014] 52 taxmann.com 490 (Kerala)[2014] 362 ITR 488 (Kerala)
HC upheld penalty on firm for receiving cash loan exceeding Rs. 20,000 in guise of capital contribution -IT : Where cash received in excess of Rs. 20,000 was loans and not capital contribution by partners, penalty to be levied Read More
  
 [2014] 52 taxmann.com 86 (Punjab & Haryana)[2014] 366 ITR 644 (Punjab & Haryana)
Disclosure of inflated stock for getting higher CC limit from bank leads to sec. 69C addition as unexplained exp. -IT : Difference of closing stock appearing in books and higher amount of closing stock provided to bank in order to release of payment by bank from cash credit account, was to be added in income Read More
  
 [2015] 53 taxmann.com 162 (Gujarat)
HC denies to interfere with ITAT's order reducing sec. 40A(2) disallowance as it was based on factual aspects -IT: Where restrictions of disallowances of commission expenses were absolutely on appreciation of evidence and based on factual aspects, no question of law would arise for consideration Read More
  
 [2015] 53 taxmann.com 171 (Delhi)
Redemption fine paid to custom authorities due to defect in REP license couldn't be termed as penalty; allowable -IT : Where assessee purchased goods from a party on high-sea basis and it had to pay customs penalty for defect in relevant REP licence issued in favour of that party, such payment was allowable as business expenditure Read More
  
 [2015] 53 taxmann.com 218 (SC)
SLP dismissed against HC's order that sum received prior to 1-4-2003 for non-compete fee was capital receipt -IT: Prior to insertion of clause (va) of section 28, compensation amount received towards loss of source of income and non-competition fee could only be treated as capital receipt and was not liable to tax Read More
  
 [2015] 53 taxmann.com 228 (Delhi)
HC lashes out on revenue for adjusting refund against outstanding demand without hearing assessee -IT: Where on same date intimation under section 245 was issued and adjustment of refund against outstanding demand was made without giving assessee opportunity of hearing, adjustment order was to be set aside Read More
  
 [2015] 53 taxmann.com 229 (Bombay)
Rectification application rightly rejected as applicant didn't attend proceedings even after adjournment -IT : Where assessee filed rectification application against penalty imposed under section 258BFA and sought an adjournment which was granted but on adjourned date he chose not to attend proceedings, assessee's plea of not giving a proper opportunity of hearing was not acceptable Read More
  
 [2015] 53 taxmann.com 220 (SC)
No reassessment to disallow GDR issue exp. under sec. 35D if allowed by AO after proper enquiry; SLP dismissed -IT: Where assessee-company had already been allowed deduction in respect of amortization of GDR issue expenses under section 35D for several years and that too after scrutiny assessment, same could not be disallowed in current year by re-assessment Read More
  
 [2015] 53 taxmann.com 217 (SC)
No revision if AO's view that unexplained loan was business income & not income from other sources wasn't erroneous -IT: When there was not satisfactory explanation regarding source of income of creditor, unsecured loan was added by Assessing Officer under head 'business income', such a view being possible, review to consider loan amount as income from other sources was unjustifed Read More
  
 [2015] 53 taxmann.com 219 (SC)
Profit from infrequent share transactions was capital gains if investment was made for capital appreciation -IT: Where investment in shares was made with an objective of capital appreciation, there were infrequent-handful of transactions and dividend was also earned, profit from sale/purchase of shares was to be treated as capital gain Read More
  
 [2015] 53 taxmann.com 227 (Bombay)
No denial of sec. 54EC benefit if asset was deemed as short-term asset merely due to deeming fiction of sec. 50 -IT: Since Bifurcation of land and building into separate part for purpose of computation of capital gain is permissible, assessee would be entitled for exemption under section 54EC Read More
  
 [2015] 53 taxmann.com 216 (Kerala)
Disclosure of additional amount before SetCom won't make declaration in block assessment as faulty -IT : Where there was no material with revenue to justify that additional amount declared by assessee was not full and true for purpose of Settlement, demand of further amount could not be accepted Read More
  
 [2015] 53 taxmann.com 141 (Bombay)[2014] 368 ITR 749 (Bombay)
Employee's contribution is deductible even if paid after due date of fund but before due date of filing return -IT: Section 43B applicable to both employees' and employer's contributions Read More
  
 [2015] 53 taxmann.com 172 (Allahabad)
HC upheld disallowance of interest as borrowed funds were not used for business purposes -IT : Assessee could not be allowed deduction of interest paid on borrowed funds when such funds were lying idle and never used for business purpose Read More
  
 [2015] 53 taxmann.com 170 (Bombay)
No writ against assessment order passed on directions of DRP as such order was appealable to ITAT -IT/ILT: Assessment order passed under section 144C(13) pursuant to directions issued by DRP under section 144C(5) was directly appealable to Tribunal in terms of section 253(1)(d) and, in such a case, assessee could not invoke writ jurisdiction of High Court Read More
  
 [2015] 53 taxmann.com 173 (Rajasthan)[2014] 369 ITR 145 (Rajasthan)
AO couldn't make addition on basis of income surrendered in survey without any evidence to substantiate addition -IT : Where assessee had surrendered lesser sum instead what he admitted during course of survey, in absence of any exercise made by Assessing Officer to hold that said surrendered value was not proper, addition made was to be deleted Read More
  
 [2014] 52 taxmann.com 99 (Kerala)[2014] 367 ITR 62 (Kerala)
Lorry drivers couldn’t be held as agents of transporter; cash payment to them was disallowable under sec. 40(A)(3) -IT : Where assessee transporter was neither owner of goods nor owner of vehicle carrying goods, lorry hire charges paid to lorry owners in cash was disallowable under section 40A(3) Read More
  
 ITAT
  
 [2015] 53 taxmann.com 303 (Bangalore - Trib.)[2014] 35 ITR(T) 459 (Bangalore - Trib.)
Writing off unrealized export proceeds without obtaining RBI's approval doesn't lead to denial of I-T deduction -IT : Where assessee had deducted and paid TDS on and before due date of filing its return of income, disallowance under section 40(a)(ia) could not be made Read Morenew
  
 [2015] 53 taxmann.com 391 (Bangalore - Trib.)
AO gets authority to make sec. 153A assessment once search is initiated even if no incriminating material is found -IT : Assessing Officer gets jurisdiction for passing orders under section 153A once search is initiated, even if any incriminatory material is found or not during course of search action Read Morenew
  
 [2015] 53 taxmann.com 433 (Delhi - Trib.)
Valuation made by customs authorities should be a guiding factor for TPO for making TP adjustment -IT/ILT : Trading functions having same FAR and having closely linked transactions are to be taken as a whole and not separately Read Morenew
  
 [2015] 53 taxmann.com 430 (Cochin - Trib.)
Order passed by AO after one month from end of month in which direction of DRP was received would be invalid -IT/ILT : Assessment order passed after expiry of one month from end of month in which direction of DRP was received, was to be regarded as invalid being barred by limitation in terms of section 144C(13) Read Morenew
  
 [2015] 53 taxmann.com 400 (Delhi - Trib.)
Sec. 153C block assessment quashed as AO failed to record satisfaction that seized docs belonged to other person -IT: 'Sine qua non' for initiating action under section 153C is recording of objective satisfaction by Assessing Officer that articles or documents which are seized or requisitioned belong to a person other than person searched Read Morenew
  
 [2014] 52 taxmann.com 398 (Delhi - Trib.)
Forex gains are includible in operating profit while determining ALP of international transaction -IT/ILT : Superannuation contribution pertaining to earlier years cannot be taken into account for computation of operating profit of current year Read More
  
 [2015] 53 taxmann.com 310 (Mumbai - Trib.)
A Co. isn't entitled to deduction of interest under sec. 24(b) as it can't utilize properties for 'own residence' -IT: Even where assessee-company had paid interest on borrowed fund, deduction under section 24(b) could not be allowable as such provision is applicable only to self occupied properties Read More
  
 [2015] 53 taxmann.com 288 (Chandigarh - Trib.)[2014] 161 TTJ 262 (Chandigarh - Trib.)
Limitation period to complete block assessment to be counted from the month of issuing last authorization of search -IT : Block assessment has to be completed within a period of two years from end of month of date of issue of last authorization for search under section 132 Read More
  
 [2015] 53 taxmann.com 284 (Mumbai - Trib.)
Non-compete fee paid to director on his retirement to restrict him from sharing his experience was revenue exp. -IT : Disallowance under section 14A for assessment year 2007-08 has to be worked out on some reasonable basis, without resorting to rule 8D Read More
  
 [2015] 53 taxmann.com 285 (Delhi - Trib.)
ALP adjustments to be made only for international transactions with AEs without extending it to non-AEs -IT/ILT : ALP adjustment has to be made only for international transactions with AEs without extending it to non-AEs Read More
  
 [2014] 52 taxmann.com 476 (Mumbai - Trib.)
CIT(A) rightly excluded value of free materials supplied by AE in calculating mark-up on cost incurred by assessee -IT/ILT : Where Commissioner (Appeals) in TP adjustment had calculated 6 per cent mark up after excluding value of raw material supplied to assessee free of cost by AE, in accordance with course of action adopted by department in immediate preceding year, same was to be upheld Read More
  
 [2015] 53 taxmann.com 298 (Delhi - Trib.)
CIT(A) erred in accepting weighted mean for TP adjustment as TP provisions prescribe use of arithmetic mean -IT/ILT: Where no reasoning was given by Commissioner (Appeals) for accepting assessee's claim, it was a non-speaking cryptic order; matter required readjudication Read More
  
 [2014] 52 taxmann.com 396 (Delhi - Trib.)
No admission of additional evidence by CIT(A) when he had used operating profit ratio given by assessee to TPO -IT/ILT : Where TPO included a different percentage while calculating arithmetic mean of OP/TC of comparable companies and Commissioner (Appeals) substituted same with correct OP/TC as was given to TPO by assessee, there was no admission of additional evidence at end of Commissioner (Appeals) Read More
  
 [2015] 53 taxmann.com 316 (Delhi - Trib.)[2014] 35 ITR(T) 217 (Delhi - Trib.)
Exp. on horticulture facilitating operations of assessee by providing better environment was business exp. -IT : Annual charges paid for web hosting relating to earlier years which crystallised during relevant assessment year, would be allowed in relevant assessment year Read More
  
 [2015] 53 taxmann.com 309 (Delhi - Trib.)[2014] 35 ITR(T) 143 (Delhi - Trib.)
Mere denial of set off of brought forward loss on technical ground doesn't lead to levy of concealment penalty -IT: Where disallowance of carry forward of long-term capital losses was on technical ground and not on account of concealment of particulars of income, penalty under section 271(1)(c) would not be levied Read More
  
 [2015] 53 taxmann.com 361 (Delhi - Trib.)
AO to fix ALP of reinsurance commission considering comparative analysis of risk factor in reinsurance business -IT/ILT : Where assessee furnished additional evidence necessary in comparative analysis of risk factor in reinsurance business, matter was to be remitted to Assessing Officer Read More
  
 [2015] 53 taxmann.com 223 (Mumbai - Trib.)
TP method accepted by ITAT couldn't be rejected by TPO in later years in absence of change in circumstances -IT/ILT : Where CUP method adopted by assessee in respect of freight expenses had been accepted in earlier assessment years, in absence of any change in circumstances, TPO could not make addition to assessee's ALP during relevant year by adopting TNMM Read More
  
 [2015] 53 taxmann.com 440 (Panaji - Trib.)
Usance charges paid to NR on import purchases would be considered as an interest; liable to TDS -IT: Usance charges paid to non-resident on import purchase by assessee would be considered as interest and liable to TDS Read More
  
 [2015] 53 taxmann.com 287 (Bangalore - Trib.)
No disallowance due to TDS default if TDS was deposited before due date of filing return -IT : If tax deducted at source is paid on or before due date for filing of return of income, no disallowance under section 40(a)(ia) could be made Read More
  
 [2015] 53 taxmann.com 279 (Jodhpur - Trib.)[2014] 159 TTJ 5 (Jodhpur - Trib.)(UO)
Receipt of share application money via banking channel couldn't be held as unexplained -IT: Where share application money received by assessee-company from another company was through proper banking channel, addition made on account of unexplained share application money was unjustified Read More
  
 [2015] 53 taxmann.com 302 (Chennai - Trib.)
Commission paid to NR agent for services rendered outside India isn't chargeable to tax; not liable to TDS -IT : Where commission paid by assessee to his agent was not chargeable to tax in India, assessee was not liable to deduct tax at source on said payments Read More
  
 [2015] 53 taxmann.com 222 (Mumbai - Trib.)
ITAT directs AO to determine whether sum paid to foreign Co. for data processing services was taxable as 'FTS' -IT/ILT : Following order passed by co-ordinate Bench of Tribunal relating to earlier assessment year, issue as to whether amount received by assessee from providing data processing support service to an Indian bank was taxable as 'fee for technical service' was to be remanded back for disposal afresh Read More
  
 [2015] 53 taxmann.com 110 (Bangalore - Trib.)
Commercial vehicles used for transportation of goods on hire are depreciable at 30% and not at 15% -IT : Where assessee was commercially using vehicles for transporting goods on hire, assessee was entitled for depreciation at rate of 30 per cent according to CBDT Circular No. 609 dated 29-7-1991 Read More
  
 [2015] 53 taxmann.com 442 (Delhi - Trib.)
Institutions set-up to provide placement services to ex-army personnel and their widows were charitable institutions -IT: Institutions set-up to provide placement services to ex-army personnel, their widows and dependents, rather than to any trade, commerce or business would not be hit by first proviso to section 2(15). This activity of general public utility would be covered by definition of charitable purpose, thus, institution was eligible for registration under section 12A. Read More
  
 [2015] 53 taxmann.com 441 (Bangalore - Trib.)
ITAT relies on retro-amendments for taxing inter-connect charges as royalty; rejects plea of treaty override -IT/ILT : Consideration paid by assessee-company, engaged in providing ILD services to its subscribers, to non-resident telecom operators, for provision of international carriage and connectivity services would fall within ambit of royalty under section 9(1)(vi) Read More
  
 [2015] 53 taxmann.com 165 (Panaji - Trib.)
ITAT denied sec. 80P relief to society it was a primary cooperative bank as per Banking Regulation Act -IT: Where assessee had fulfilled all three basic conditions to be regarded as a primary co-operative bank, it was a co-operative bank, and, therefore, provisions of section 80P(4) were applicable and he was not entitled for deduction under section 80P(2)(a)(i) Read More
  
 [2015] 53 taxmann.com 315 (Pune - Trib.)
Payment made to casual labourers working under direct control of contractor won't attract sec. 194C TDS -IT : Where issue relating to payments to labourers without deducting tax at source was concluded in assessment proceedings under section 143(3) and no incriminating material relating to said issue was discovered in search, Assessing Officer could not disallow said payment under section 153A on basis of change of opinion that tax was required to be deducted while making payments in question Read More
  
 [2015] 53 taxmann.com 300 (Hyderabad - Trib.)
Sum paid by assessee to its foreign parent Co. for engineering services provided via third party was 'FTS' -IT/ILT : Where assessee in course of rendering software development services to its parent company located abroad, made payment of engineering services availed by said parent company from another Indian company and made it available to assessee, payment so made was to be regarded as 'fee for included services' Read More
  
 [2015] 53 taxmann.com 330 (Delhi - Trib.)
Exp. incurred on sales which doesn't lead to any brand promotion can't be brought within ambit of 'AMP' exp -IT/ILT : Expenditure incurred in connection with sales which does not lead to brand promotion, cannot be brought within ambit of advertisement, marketing and promotion (AMP) expenses for determining cost/value of international transactions Read More
  
 [2015] 53 taxmann.com 312 (Mumbai - Trib.)
Even purchase of superstructure without transfer of rights in land would provide sec. 54F relief -IT : Assessee was entitled for section 54F deduction on purchase of share in a farmhouse though right in land on which said property was constructed was not transferred Read More
  
 [2015] 53 taxmann.com 403 (Mumbai - Trib.)
No addition of notional interest on receipt of interest-free deposit by lessor without determining fair market rent -IT: Even though the interest-free deposits received by lessor had the effect to deflate or inflate the rent agreed between the parties but AO could not make addition of notional interest in annual value of property without finding out the effect of interest free deposits and without determining the fair market rent expected to be fetched by the property under section 23(1)(a) Read More
  
 [2015] 53 taxmann.com 290 (Mumbai - Trib.)
No reassessment by AO to deny capital gains exemption under India-Denmark DTAA on basis of surmises -IT/ILT : No reassessment where reasons recorded for reopening fell in realm of surmises to deny capital gains exemption under India-Denmark DTAA Read More
  
 [2015] 53 taxmann.com 148 (Chennai - Trib.)
Exp. incurred on construction of storage shed on leasehold land was revenue exp. -IT : Expenditure incurred by assessee on construction of storage sheds on leasehold land is revenue in nature Read More
  
 [2015] 53 taxmann.com 167 (Jaipur - Trib.)
Payment to casual labours through senior workman would not attract sec. 194C TDS -IT : Payment made to casual labourers through senior workman was not liable to TDS under section 194C Read More
  
 [2015] 53 taxmann.com 402 (Delhi - Trib.)
ITAT unhappy with casual attitude of CIT in making revision on grounds not mentioned in show cause notice -IT : Where show cause notice to assessee issued by CIT u/s 263 set out grounds for revision as 'inadmissible deductions', revision order cannot be made by CIT on the grounds of 'lack of proper inquiries' by AO. A revision order can only be, made on the ground on which assessee has been given a reasonable opportunity of being heard. It is not open to the CIT to set out one reason for revising the order in show cause notice but actually revise the order on some other ground Read More
  
 [2015] 53 taxmann.com 367 (Hyderabad - Trib.)
Not-ordinarily Resident is liable to pay tax on 'ESOPs' which are attributable to services rendered in India -IT/ILT : Where assessee, having residential status of 'resident but not ordinarily a resident' received certain amount as Stock Option Transfer Proceeds (SOTP) from its employer company namely 'Microsoft' for rendering services partly in India and partly in USA, only that portion of SOTP was taxable in India which was attributable to services rendered in India Read More
  
 [2015] 53 taxmann.com 276 (Cochin - Trib.)
Capital gain was leviable on distribution of asset on dissolution of firm even if asset wasn't in name of firm -IT: Transfer of legal title in name of assessee-firm is not essential to hold that assessee-firm is owner of those assets if such assets are transferred by a partner of firm Read More
  
 [2015] 53 taxmann.com 166 (Hyderabad - Trib.)
No denial of trust registration to single entity even if its name indicated existence of cluster of institutions -IT: Where assessee had complied with all conditions necessary for grant of registration under section 12AA and since assessee was only a single entity but consisted of different colleges/institutions, operating under such single entity, assessee company was to be granted registration under section 12AA Read More
  
 [2014] 52 taxmann.com 406 (Mumbai - Trib.)
ITAT sets aside TP addition as comparable chosen by TPO didn't satisfy ratio of 25% of employee cost to revenue -IT/ILT :Where TPO made addition to assessee's ALP in respect of software development services, since four comparables selected by TPO failed filter of 25 per cent employee cost to revenues applied by TPO himself, impugned addition was to be set aside Read More
  
 [2015] 53 taxmann.com 366 (Delhi - Trib.)
Mere cash deposit of above 10 lakhs in bank account doesn’t indicate that income has escaped assessment, says ITAT -IT: The assessee had deposited cash in excess of Rs 10 lakhs in his saving bank account but he had not filed return of income. The AO reopened the assessment of assessee, as he had reason to believe that there was an escapement of income of Rs 10 lakhs. The Tribunal held that the AO proceeded on the fallacious assumption that bank deposits constituted undisclosed income and overlooked fact that the source of deposit need not necessarily be income of the assessee Read More
  
 [2015] 53 taxmann.com 353 (Mumbai - Trib.)
Longer credit period allowed to AE on realization of sale proceeds is an international transaction under TP -IT/ILT : Longer credit period to AE is 'international transaction' in terms of Explanation to section 92(1) but is 'closely linked' to international transaction of sale or service to AE in terms of Rule 10A(d). This is not a transaction of loan or advance to the AE but it is only an excess period allowed for realization of sales proceeds from the AE. Therefore, the arm's length interest rate would be the average cost of the total fund available to the assessee and not the rate at which a loan is Read More
  
 [2015] 53 taxmann.com 159 (Mumbai - Trib.)
TNMM at entity level is most appropriate to determine ALP when all international transactions are with same AE -IT/ILT : Where assessee received from non-resident AE assured pre-defined margin on costs incurred, ALP of Individual transactions was irrelevant; TNMM at entity level was most appropriate for evaluating International transactions Read More
  
 [2015] 53 taxmann.com 215 (Chennai - Trib.)
Activities carried out by Trust for providing employment to rural poor couldn't be held as commercial activities -IT : Activities carried out by Trust for providing employment to rural poor couldn't be held as commercial activities Read More
  
 [2015] 53 taxmann.com 224 (Chennai - Trib.)[2014] 34 ITR(T) 703 (Chennai - Trib.)
Exp. on purchase of application software entailing up-gradation of existing system would be revenue exp. -IT : Expenditure incurred for purchasing application software for upgradation of existing computers would be a revenue expenditure Read More
  
 [2015] 53 taxmann.com 101 (Mumbai - Trib.)
No rectification to tax interest on refund if its taxability under DTAA as interest or as other income is debatable -IT/ILT : Question as to whether interest on refund received by assessee, a USA based company, was taxable under article 11 or article 23 of India-USA DTAA being a debatable one, was beyond scope of proceedings under section 154 Read More
  
 [2015] 53 taxmann.com 343 (Delhi - Trib.)
Trust entitled to exemption even if it charged fee for commercial activity, being incidental to its charitable nature -IT: Fee charged by trust for processing subsidy applications could not be deemed as commercial receipts if it was incidental to its charitable objectives. Thus, assessee-trust was entitled to exemption under Section 10(23C)(iv). Read More
  
 [2015] 53 taxmann.com 333 (Hyderabad - Trib.)
Sum received on transfer of right to use technical know-how of drug was business receipts and not capital gains -IT/ILT : Where assessee, engaged in business of manufacture of Active Pharmaceutical Ingredients (API), formed a joint venture company with a South African company, in terms of which assessee sold its technical know how relating to four Anti Petro Viral (ARV) products to joint venture company, in view of fact that assessee merely imparted its special knowledge and experience in field of manufacturing, marketing, selling and distribution of ARVs whereas property in knowhow remained with assessee Read More
  
 [2014] 52 taxmann.com 470 (Delhi - Trib.)[2014] 34 ITR(T) 520 (Delhi - Trib.)
ITAT set aside order of CIT(A) as he adjudicated appeal in favour of assessee without hearing to AO -IT : Order passed by Commissioner (Appeals) adjudicating appeal in assessee's favour without giving opportunity of being heard to Assessing Officer was contrary to principles of natural justice and provisions of section 250(2)(b) Read More
  
 [2014] 52 taxmann.com 446 (Mumbai - Trib.)
Sum paid by newspaper publisher to foreign Co. for installation of mail room equipment wasn't 'FTS' -IT/ILT: Payment for installation/commissioning of complex 'mail room equipment' of newspaper publisher would not be FTS; however, consideration paid for training of employees would be taxable in India as FTS Read More
  
 [2014] 52 taxmann.com 478 (Mumbai - Trib.)
AO couldn't re-compute book profits by disallowing depreciation claim when books were certified by auditors -IT : Where assessee-company failed to produce any material on record that interest income earned by it on FDRs was by way of temporary deposit of surplus money or it was in nature of advances received by it from intended purchasers, said income could not to be treated as business income Read More
  
 [2015] 53 taxmann.com 221 (Hyderabad - Trib.)
Sum paid for acquiring satellite rights of a film is excluded from definition of 'royalty' -IT : Sum paid for acquiring satellite rights of a film is excluded from definition of 'royalty' Read More
  
 [2015] 53 taxmann.com 225 (Delhi - Trib.)[2014] 163 TTJ 7 (Delhi - Trib.)(UO)
Conversion of stock-in-trade into investment without any intention to do trading in shares was genuine -IT: Where conversion of stock-in-trade of shares into investment was accepted and gains on sale of shares held for more than 12 months was accepted as LTCG; STCG for shares held for less than 12 months could not be denied Read More
  
 [2014] 52 taxmann.com 472 (Hyderabad - Trib.)
ITAT followed its earlier order for remanding case to AO for determining ALP of AC equipments sold to AE -IT/ILT : Following order passed by co-ordinate Bench of Tribunal relating to earlier year, issue relating to determination of ALP of sub-assembly components of air conditioning equipment sold to AE was to be remanded back for disposal afresh Read More
  
 [2015] 53 taxmann.com 138 (Mumbai - Trib.)
Reimbursement of cost for obtaining customs clearance for AE wasn't includible in cost of assessee to compute profit -IT/ILT : Where assessee was paying to third party to get custom clearance service done on high value packages, for and on behalf of AE and payment was reimbursed by AE, said payment could not be included in total cost of assessee for determining profit margin for benchmarking arm's length price Read More
  
 [2015] 53 taxmann.com 111 (Hyderabad - Trib.)
Refund of excise duty is to be treated as part of business profits; eligible for sec. 80-IB relief -IT : Refund of excise duty paid on manufacturing and sale of goods produced by assessee was to be treated as business profit and same was eligible for section 80-IB deduction Read More
  
 [2015] 53 taxmann.com 168 (Delhi - Trib.)
Interest payable to supplier for construction of property is an allowable deduction under sec. 24 -IT : Interest payable to sundry creditors, who supplied material for construction of property, is an allowable deduction under section 24(b) Read More
  
 [2015] 53 taxmann.com 102 (Bangalore - Trib.)
No TDS liability of buyer when capital gain arose to NR wasn't taxable due to sec. 54 relief -IT/ILT : Where on date of purchase of house property from non-resident vendor, assessee was aware of fact that capital gain was not taxable in vendor's hands due to availability of deduction under section 54, he was not required to deduct tax at source while making payment of sales consideration Read More
  
 [2015] 53 taxmann.com 169 (Pune - Trib.)
Interest paid to AE was at ALP if it was lower than rate of interest paid by AE to independent party -IT/ILT : Where loans taken by assessee from its AE were interest free for initial period of seven years and when said period of moratorium was taken into account, effective rate of interest incurred by assessee was lower than arm's length rate of interest considered by TPO, adjustment made to assessee's ALP on aforesaid ground was to be set aside Read More
  
 Statutes
  
INSTRUCTION NO. 2/2015 [F.NO.500/15/2014-APA-I]
CBDT asks its officials to follow HC's ruling in 'Vodafone' in cases where shares were issued at premium to AEs -IT/ILT : Section 92C of the Income-Tax Act, 1961 - Transfer Pricing - Computation of Arm’S Length Price – Acceptance of Order of High Court of Bombay in Case of Vodafone India Services Pvt. Ltd. [2014] 50 Taxmann.com 300 (Bombay) Read Morenew
  
NOTIFICATION NO. 9/2015 [F.NO.178/3/2015-ITA-1]
Now deposit in 'Sukanaya Samridhi Account' would provide sec. 80C relief -IT : Section 80C of the Income-Tax Act, 1961 - Deductions - in Respect of Insurance Premium, Etc. - Notified Plan under Section 80C(2)(Viii) Read More
  
NOTIFICATION NO. 5/2015 [F.NO.196/28/2013-ITA.I]
Govt. notifies certain entities for exemption under section 10(46) -IT : Section 10(46) of the Income-Tax Act, 1961 - Exemptions - Statutory Body/authority/board/commission - Notified Body or Authority - Tamil Nadu Water Supply and Drainage Board Read More
  
NOTIFICATION NO.4/2015 [F.NO. 196/36/2013-ITA.I]
Govt. notifies 'Indian National Group of International Association' for Sec. 10(23A) exemption -IT : Section 10(23A) of the Income-Tax Act, 1961 - Exemptions - Professional Associations - Notified Association Read More
  
CIRCULAR NO.1/2015 [F.NO.142/13/2014-TPL]
CBDT releases Explanatory Notes to the provisions of Finance (No. 2) Act, 2014 -IT/ILT : Finance (No.2) Act, 2014 - Explanatory Notes to the Provisions of Said Act Read More
  
OFFICE MEMORANDUM [F.NO. 2/3/2014.NS-II]
Govt. notifies 9.1% interest rate for investment in 'Sukanya Samridhi Account' during 2014-15 -IT : Sukanya Samridhhi Account Rules, 2014 - Rate of Interest to Be Allowed on Investments in Said Scheme during Financial Year 2014-15 Read More
  
NOTIFICATION NO. 3/2015 [F.NO. 142/10/2014-TPL]/ S
CBDT requires business trusts to e-file details of income distributed to unit holders by Nov 30 in form No. 64A -IT : Income-Tax (First Amendment) Rules, 2015 – Insertion of Rule 12CA and Forms No. 64A and 64B Read More
  
 News
  
CBDT Tells Its Men to Lay Off Voda-Like Cases -CBDT Tells Its Men to Lay Off Voda-Like Cases [30-01-2015] Read Morenew
  
Cloud over tax laws remains a thorn for foreign investors -Cloud over tax laws remains a thorn for foreign investors [30-01-2015] Read Morenew
  
Govt won’t appeal in Vodafone case -Govt won’t appeal in Vodafone case [29-01-2015] Read More
  
Govt. not to appeal against Bombay HC’s ruling in favour of ‘Vodafone’ on issue of deficit security premium -IT/ILT : Govt. not to appeal against Bombay HC’s ruling in favour of ‘Vodafone’ on issue of deficit security premium [28-01-2015] Read More
  
Tax cloud over co- location servers -Tax cloud over co- location servers [28-01-2015] Read More
  
Agreement with US to bring relief to MNCs -Agreement with US to bring relief to MNCs [24-01-2015] Read More
  
Gross direct tax collection during April-December of financial year 2014-15 -Gross direct tax collection during April-December of financial year 2014-15 [23-01-2015] Read More
  
Tax Evasion may Come Under PMLA -Tax Evasion may Come Under PMLA [23-01-2015] Read More
  
Jaitley Pledge No Balm for MNCs' Tax Pain -Jaitley Pledge No Balm for MNCs' Tax Pain [23-01-2015] Read More
  
Budget may announce fuel subsidy reforms -Budget may announce fuel subsidy reforms [23-01-2015] Read More
  
3-year Bank FDs May Get Tax Exemption -3-year Bank FDs May Get Tax Exemption [22-01-2015] Read More
  
India, US to Untie Transfer Pricing Knot -India, US to Untie Transfer Pricing Knot [22-01-2015] Read More
  
Switzerland assures full cooperation on tax issues -Switzerland assures full cooperation on tax issues [22-01-2015] Read More
  
Tax fillip to fund- raising avenues likely in Budget -Tax fillip to fund- raising avenues likely in Budget [22-01-2015] Read More
  
Jethmalani Unhappy Over Black Money -Jethmalani Unhappy Over Black Money [21-01-2015] Read More
  
Don’t buy life insurance for tax benefits alone -Don’t buy life insurance for tax benefits alone [21-01-2015] Read More
  
Give suggestions on black money to SIT: SC -Give suggestions on black money to SIT: SC [21-01-2015] Read More
  
Equity savings scheme could be tweaked to make it more attractive -Equity savings scheme could be tweaked to make it more attractive [19-01-2015] Read More