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Direct Tax Laws
 [2014] 46 374 (Gujarat)[2014] 224 Taxman 140 (Gujarat)(MAG.)[2013] 358 ITR 410 (Gujarat)[2014] 266 CTR 207 (Gujarat)
Tribunal had to stay penalty proceeding during pendency of appeal -IT : Tribunal under section 254 has power to grant stay of penalty proceedings as incidental or ancillary to its appellate jurisdiction, provided Tribunal is satisfied that entire purpose of appeal would be frustrated or rendered nugatory by allowing such proceedings to continue during pendency of appeal Read Morenew
 [2014] 46 372 (Delhi)
No addition for unexplained investment on basis of unsigned MOU recovered during survey for purchase of land -IT : No addition could be made on account of unexplained investment if MOU for purchase of land as well as receipt given by seller found during survey were unsigned documents and transaction had not materialized Read Morenew
 [2014] 46 373 (Kerala)
Sums payable on purchase of raw materials couldn’t be included in undisclosed income during block assessment -IT : In block assessment, amount payable for purchase should not be included in undisclosed income Read Morenew
 [2014] 46 401 (Karnataka)[2014] 360 ITR 606 (Karnataka)
Transportation cost and taxes to be considered to compute market value of goods transferred under sec. 80-I(8) -IT : In order to determine market value of goods for purpose of Explanation to section 80-I(8), incidental expenses such as transportation, octroi and local taxes are to be included to value of cost of goods sold Read Morenew
 [2014] 46 215 (Calcutta)
Sum received on termination of agency’s term is a capital receipt as it puts an end to income earning apparatus -IT : Where Assessee entered into an agreement with a German company in India for producing and selling products of said foreign Company in India for a specific period and after expiry of period of agreement, foreign company made gratuitous payment to assessee for issuing a NOC for setting up its subsidiary company in India, said amount being capital receipt in hands of assessee, could not be brought to tax Read More
 [2014] 47 59 (Rajasthan)
CIT can’t revise order of AO because he loses his jurisdiction due to a circular issued by CBDT subsequently -IT : Income tax Officer having valid jurisdiction at time of issuance of notice under section 143(2), subsequent disqualification would not scrap his jurisdiction of making assessment Read More
 [2014] 46 349 (Delhi)
I-T Act recognizes Mutual fund as a special category of investment; it can’t be clubbed with investment in shares -IT: Units of mutual being a special category investments, investment in mutual funds cannot be clubbed with investment in shares or commodities; and any surplus arising therefrom on sale of mutual fund kept as investment is long-term capital gain Read More
 [2014] 47 61 (Kerala)
HC upheld revisional proceedings as exp. was allowed by AO without scrutiny of material available with him -IT: Where entire material available with department was not considered by Assessing Officer and certain expenditure was allowed in excess, it could not be said that revision order of Commissioner was a substitution to that of opinion of Assessing Officer Read More
 [2014] 46 312 (Delhi)[2014] 364 ITR 446 (Delhi)
Order of SetCom can be subjected to writ jurisdiction of HC only when there is fault in decision making process -IT : High Court, under Article 226, can interfere/review an order passed by Settlement Commission under section 245D only if there is fault in decision making process, and not with decision itself Read More
 [2014] 46 399 (Gujarat)[2014] 360 ITR 527 (Gujarat)
Reassessment quashed as reasons recorded by AO didn’t indicate failure of assessee to disclose material facts -IT : Where Assessing Officer having completed assessment under section 143(3), initiated reassessment proceedings after expiry of four years from end of relevant assessment year, in view of that in reasons recorded there was not even a whisper to effect that income had escaped assessment on account of any failure on part of assessee to disclose fully and truly all material facts necessary for its assessment, impugned reassessment proceeding deserved to be quashed. Read More
 [2014] 46 402 (Punjab & Haryana)
No sec. 36(1)(iii) disallowance if interest wasn’t charged on advances when recovery of principal was in doubt -IT : Where assessee had not charged any interest on amount advanced as amount was recovered only by filing a civil suit and with assistance of influential people, charging of interest on notional basis by Assessing Officer was not justified Read More
 [2014] 46 342 (Bombay)
Sums paid by purchaser of land towards income-tax dues of seller couldn’t be treated as income of purchaser -IT : Where assessee paid part of sale proceeds of disputed land to owner and balance to IT Department as instructed for recovery of tax dues of land owner, and whole amount was shown as liability in books, said sum could not be added to assessee's income Read More
 [2014] 46 344 (Gujarat)
No penalty on MAT Co. if it was liable to pay same amount of taxes even after addition of concealed income -IT : Simply because before and after additions, assessee remained a MAT company and paid tax under section 115JB, that by itself does not mean that no penalty could be imposed Read More
 [2014] 45 527 (Delhi)
NTPC could make downward revisions of provisional sales when final tariff of electricity was determined by CERC -IT: Where assessee electricity generating company had to carry on billing in terms of instruction of Regulatory authority CERC, till approval of tariffs and it was subject to adjustment after final tariff determination, reduction of sales was to be allowed Read More
 [2014] 46 314 (Andhra Pradesh)[2014] 365 ITR 82 (Andhra Pradesh)
Sum received on transfer of carbon credits isn’t taxable as no profit element is involved on their transfer -IT : Where assessee, engaged in business of power generation, received carbon credits for project activity of switching off fossil fuel from naptha and diesel to biomass, carbon credits not being linked with power generation, amount received on their transfer did not have element of profit or gain and it was not taxable Read More
 [2014] 46 351 (Delhi)
No bar on block assessment if panchnama was signed by assessee even if locker mentioned in warrant yielded nothing -IT : 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 Read More
 [2014] 46 340 (Punjab & Haryana)
HC affirms sec. 68 additions as assessee had failed to substantiate source of huge cash deposited in bank account -IT : Where in respect of huge amount of cash deposited in bank, assessee failed to give list of persons who advanced cash to him along with their confirmation in respect of said cash credits, Assessing Officer was justified in adding said amount to assessee's taxable income under section 68. Read More
 [2014] 46 266 (Bombay)
Sum incurred on higher studies of an associate’s daughter disallowed as it would benefits her career and not firm -IT : Where sending daughter of an associate to foreign for higher study was not in interest of profession of advocate firm but for furthering her career, expenditure was to be disallowed Read More
 [2014] 46 396 (Bombay)
No reassessment by AO to disallow R&D exp. under sec. 35 on pretext of its capital nature on change of opinion -IT : Where assessee had produced all relevant particulars regarding its claim for weighted deduction in respect of research and development expenditure, legal and professional charges towards patent applications outside India and consultancy fees paid to outsiders for collaborative study and Assessing Officer after duly considering same allowed said deduction, initiation of reassessment to disallow same as being capital in nature, was a mere change of opinion Read More
 [2014] 46 241 (Madhya Pradesh)[2013] 358 ITR 452 (Madhya Pradesh)
Trust can avail of depreciation on asset even if sum incurred on its acquisition is claimed as application of income -IT : A trust registered under section 12A, can claim depreciation on assets of which cost has already been allowed as application of income Read More
 [2014] 46 315 (Allahabad)
No need to provide hearing opportunity to assessee before passing provisional attachment order under sec. 281B -IT : Statutory provision of section 281B does not contain requirement of hearing before passing order of provisional attachment of assessee's bank account Read More
 [2014] 46 316 (Punjab & Haryana)
Assessee providing educational facilities and constructing dental colleges was engaged in charitable activities -IT : Genuine objects of providing education and genuine activities of constructing building in which a college was to be established, would entitle assessee to registration under section 12AA Read More
 [2014] 46 259 (Bombay)
Expenditure on upgradation, anti-virus and annual maintenance of software are allowable as revenue exp. -IT-I : Where assessee rendering detailed engineering services, made provision for costs on completed contracts in respect of various parties, in view of fact that in respect of some of parties liabilities were ascertained whereas in respect of other parties exact amount could not be quantified and provisions were contingent in nature, assessee's claim was to be partly allowed Read More
 [2014] 46 397 (Bombay)
Brokerage in respect of securities transactions is outside the ambit of sec. 194H TDS -IT : Brokerage paid in respect of transaction in securities is specifically excluded from purview of section 194H; no TDS was to be deducted Read More
 [2014] 46 280 (Allahabad)
AO to record his satisfaction under sec. 153C even if he has jurisdiction over searched person and other person -IT: Even where Assessing Officer of both 'searched person' and 'other person' is same, recording of satisfaction is still required and mandatory, so as to initiate proceeding against such 'other person' Read More
 [2014] 46 258 (Madras)
Audited Books, Sacred Books! Revenue couldn’t reject audited books to make ex-parte assessment -IT : Books of account cannot be rejected and best judgment assessment cannot be done in a case where accounts have been audited under section 44AB Read More
 [2014] 46 281 (Punjab & Haryana)
No penalty or prosecution if return was voluntarily filed in good faith prior to detection of concealment -IT : Where return filed by petitioner is voluntary, filed in good faith and before detection of any concealment, neither penalty would be levied under section 271(1)(c) nor any criminal proceedings under section 276C could be allowed Read More
 [2014] 46 338 (Bombay)
HC upheld disallowance of commission as assessee failed to prove nature of services rendered by sub-agents -IT : Since appellant failed to produce evidence regarding sub-agency commission paid by showing nature of services rendered by sub-agents, said expenditure could not be allowed Read More
 [2014] 46 268 (Allahabad)
Transfer of ownership rights via agreement to sell held as ‘transfer’, even if possession wasn’t given to purchaser -IT : Where assessees being, owners of a property entered into agreement to sell whereby they transferred their right of ownership in favour of purchasers who on basis of said agreement, resold a part of property and further carried out certain development work, transaction in question was to be regarded as transfer of capital asset within meaning of section 2(47)(v) Read More
 [2014] 46 317 (Delhi)
AO’s referral to TPO doesn’t take away his powers of determining nature of exp. under sec. 37(1) -IT/ILT : Jurisdiction of Assessing Officer under section 37(1) and TPO under section 92CA is distinct and, therefore, a referral made by Assessing Officer to TPO for limited purpose of determining ALP does not take away power of Assessing Officer to determine as to whether payment made by assessee to its AE for services rendered was basically an expenditure incurred for purpose of business so as to allow same under section 37(1) Read More
 [2014] 46 237 (Punjab & Haryana)
HC upheld Setcom.’s order of disallowing a sum as otherwise it could reduce undisclosed income offered by assessee -IT : Where Settlement Commission while applying gross profit rate on undisclosed income, opined that benefit of payment of excise duty could not be given to assessee as it would negate even undisclosed income shown in statement of facts, there being no illegality in said order, it deserved to be upheld Read More
 [2014] 46 339 (Calcutta)
Sec. 263 doesn’t stipulate recording of satisfaction before issuance of SCN if order of AO appears to be erroneous -IT: Where assessee challenged show-cause notice by Commissioner under section 263 on account of non-recording of requisite satisfaction, since legal, remedy of filing appeal against order under section 263 has been provided, assessee should resort to alternative remedy of appeal Read More
 [2014] 46 257 (Bombay)
Transfer of division in exchange of shares only couldn't be held as slump sale; rules HC -IT : Where assessee transferred its lift division to another company in terms of scheme of arrangement under section 391, read with section 394 of Companies Act, 1956, in view of fact that consideration for said transfer was not determined by parties in terms of money but its disbursement was to be in terms of allotment or issue of bonds/preference shares, it was to be regarded as a case of exchange and not a sale and, thus, provisions of section 2(42C) did not apply to assessee's case Read More
 [2014] 46 233 (Madras)
HC dismissed writ as appellant-bank had alternate remedy of filing an appeal on charges of sec. 194A TDS default -IT: Where Act specifically provides an appeal remedy under section 246A, same has to be exhausted first by petitioner before approaching Court under Article 226 of Constitution of India Read More
 [2014] 46 238 (Punjab & Haryana)
HC affirms AO’s order for treating land as capital assets situated within prescribed Municipal limits -IT : Where land sold by assessee was situated within 5 kms. of limits of local Municipal Committee, Assessing Officer rightly concluded that it fell within definition of capital asset under section 2(14) and, thus, profit arising from sale of said land was to be taxed as 'short term capital gain' Read More
 [2014] 46 239 (Karnataka)
Income of STP developer from letting out of building along with other amenities in said part was business receipts -IT : Rental income from business of developing, operating and maintaining an industrial park and providing infrastructure facilities would be chargeable to tax under head 'Income from Business' Read More
 [2014] 46 240 (Allahabad)
Reassessment held justified by HC as liability was escalated by assessee to reduce tax burden -IT : Where discrepancies were found in books of account of assessee showing escalation of liability to reduce tax burden, reassessment notice was valid Read More
 [2014] 46 242 (Madhya Pradesh)[2013] 359 ITR 39 (Madhya Pradesh)
Income from dealing in delivery based shares with investment purposes is taxable as capital gains -IT : Where assessee carried out delivery based share transactions with an investment motive, in view of fact that period of holding in said transactions was less than one year, income arising from those transactions was to be taxed as short-term capital gain Read More
 [2014] 46 187 (Gujarat)
HC deletes disallowance for TDS default which was invoked by AO without giving an opportunity to assessee -IT : Where AO disallowed payment of freight expenses on account of non-deduction of tax at source without giving assessee an opportunity to collect necessary evidence and explaining same in support of its case, there being violation of principles of natural justice, impugned disallowance diserved to be deleted Read More
 [2014] 46 287 (Punjab & Haryana)
HC denies to interfere with order of ITAT as dispute related to estimation of Net Profit rate -IT: Profit of contractor depend upon various factors like place of execution of contract, accessibility of labour, raw material, etc. and would, therefore, vary from contractor to contractor Read More
 [2014] 46 87 (Gujarat)
HC raps AO for denying carry forward and set off of unabsorbed depreciation beyond 8 years -IT : Reassessment deprecated as Court held that unabsorbed depreciation could be allowed to be carried forward and set off without any reference to time limit Read More
 [2014] 46 167 (Karnataka)
Interest earned from inter-corporate loans and foreign currency account are eligible for sec. 10B relief -IT: In view of substitution of sub-section (4) of section 10B by Finance Act, 2001, with effect from 1-4-2001, an assessee is entitled to claim exemption on interest income earned from inter-corporate loans and deposits lying in EEFC account Read More
 [2014] 46 69 (Gujarat)
Unabsorbed depreciation can be carried forward beyond 8 years; Reassessment to treat it otherwise is unjustified -IT : Reassessment resorted to disallow carry forward and set off of unabsorbed depreciation beyond 8 years was declined Read More
 [2014] 46 188 (Bombay)
ALV of property let out to sister concern had to be as per Municipality records of earlier years if facts were same -IT : Where in order to determine annual value of property let out by assessee to its sister concern, Tribunal in earlier years directed AO to adopt valuation given by Municipal Corporation, in absence of any change in circumstances, basis so adopted was to be accepted during relevant year as well Read More
 [2014] 46 110 (Gujarat)
AO couldn’t revisit claim of sec. 80-IA relief if it was allowed after thorough examination during assessment -IT : Where during assessment, assessee's claim under section 80-IA was allowed after thorough examination and Assessing Officer's satisfaction, re-assessment would not be permissible Read More
 [2014] 46 170 (Karnataka)
Even joint ownership in second house at the time of sale of capital assets would lead to denial of sec. 54F benefits -IT : Income assessable in block assessment under Chapter XIV-B is income not disclosed but found and determined as a result of search under section 132 or requisition under section 132A Read More
 [2014] 45 468 (Rajasthan)
No reassessment on basis of seized material which was thoroughly analysed in assessment after search proceedings -IT: Where Assessing Officer completed assessment after analyzing seized material during search and after issuing consolidated questionnaire to all concerned parties, he could not initiate reassessment proceedings on basis of seized material again taking a view that certain income chargeable to tax had escaped assessment Read More
 [2014] 45 489 (Delhi)
Term ‘any sum’ referred to in sec. 68 doesn’t contemplate ad-hoc addition of sums not credited in books -IT: In terms of provisions contained in section 68, any amount other than one found credited in books of account can not be estimated and charged to tax Read More
 [2014] 46 184 (Bombay)
No writ against order of AO pursuant to direction of DRP as assessee had remedy of filing of an appeal -IT/ILT: Where assessee filed writ petition challenging order passed by Assessing Officer pursuant to direction issued by DRP, in view of fact that assessee had remedy of an appeal against order of assessment, instant petition was to be disposed of by directing assessee to file an appeal before Tribunal for redressal of its grievances Read More
 [2014] 45 490 (Gujarat)
Interest accrued from investment in ‘Kisan Vikas Patra’ is taxable on accrual basis, rules HC -IT : Interest from investment in Kisan Vikas Patra is taxable on accrual basis Read More
 [2014] 45 478 (Gujarat)
No sec. 40A(2) disallowance if payment to director was authorized by CLB and taxed at maximum rate in his hands -IT: No addition could be made on basis of gross profit rate where Assessing Officer had not brought any material on record to dispute correctness of books of account and further no evidence had been brought on record to substantiate allegation of unrecorded sales Read More
 [2014] 46 13 (Madras)
Onus is on assessee to prove reasonable allocation of common expenditure to unit eligible for sec. 80-IB relief -IT: 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 Read More
 [2014] 46 28 (Karnataka)
No TDS from sum paid for supply of mobile scratch cards if assessee hadn’t supplied any material for manufacturing -IT : Where assessee placed order to print SIM scratch cards but had not supplied any material to manufacturer of card, transaction could not be treated as contract for carrying out work liable to TDS under section 194C Read More
 [2014] 46 169 (Delhi)
Mere change in jurisdiction of assessee due to change in place of business won’t necessitate sec. 127 order -IT: An assessment order passed without making reference to Commissioner under section 124 is not a nullity for want of jurisdiction but it results in an irregularity which can be rectified by order of remit Read More
 [2014] 46 34 (Gujarat)
HC denied to entertain writ against sec. 153C notice as statutory remedy was available with assessee -IT : Statutory remedy is available against notices issued under section 153C; hence, writ petition cannot be entertained Read More
 [2014] 46 336 (Delhi - Trib.)
Beneficiaries of discretionary trust won’t be liable to tax if income of trust is taxed at maximum marginal rate -IT : Where income from trust had already been assessed in hands of trustees at maximum marginal rate, beneficial share could not be assessed in hands of beneficiary again Read Morenew
 [2014] 46 262 (Chennai - Trib.)
Trust won’t be hit by proviso to sec. 2(15) if it preserves Indian arts and provides opportunities to poor artisans -IT : Where assessee was collecting, exhibiting and displaying historical and contemporary Indian arts, architecture, craft and textiles and was also involved in preserving old arts, handicrafts and textiles, and gave employments to poor artisan by providing a platform to indigent village artisans to show their skills to general public, assessee's activities were for promotion and preservation of artistic interest in nature of relief to poor and preservation of objects of artistic interest Read Morenew
 [2014] 46 330 (Mumbai - Trib.)
No withholding tax liability on payment of export commission to NR before withdrawal of Circular No. 786 -IT/ILT : Where CBDT Circular No. 786 dated 7-2-2000 was in force at time of remittance of amount of commission to non-resident agent, assessee was not liable to deduct tax at source on such payment Read Morenew
 [2014] 46 236 (Delhi - Trib.)
Assessment of amalgamating Co. after its amalgamation with successor Co. is null and void -IT : Where assessee had already amalgamated with another company before finalisation of assessment, no assessment could be framed on assessee as it was not in existence when such assessment was framed Read More
 [2014] 46 345 (Delhi - Trib.)
ITAT upheld concealment penalty on MAT Co. as additions to its income led to increase in its book profits -IT : Where assessee, engaged in scientific research activities, consistently followed practice of Capitalising amount received during trial run period which was duly disclosed in its balance sheet, AO could not pass a penalty order under section 271(1)(c) taking a view that said amount being result of assessee's regular business activity, was liable to be added to its taxable income Read More
 [2014] 46 231 (Hyderabad - Trib.)
TP additions on basis of comparables with differential functions, turnover and brand value are not justified -IT/ILT : Where TPO made certain addition to assessee's ALP in respect of rendering software development services to its AE, in view of fact that some of comparables selected by TPO were improper on account of functional difference, turnover, brand value, etc, impugned addition was to be set aside and, matter was to be remanded back for disposal afresh Read More
 [2014] 46 284 (Pune - Trib.)
AO can’t make sec. 14A disallowance by invoking Rule 8D without recording his satisfaction -IT : Where Assessing Officer did not record any satisfaction as required by section 14A(2), disallowance under section 14A invoking rule 8D was unjustified Read More
 [2014] 46 229 (Chennai - Trib.)
Sec. 44AE benefit not available if assessee owned more than 10 goods carriages even if one of them was under repair -IT : Where assessee owns more than ten goods carriages at any point of time during previous year, even though one vehicle of assessee was under repair and assessee in fact had operated only ten goods carriages, he is not entitled to benefit of section 44AE Read More
 [2014] 46 261 (Mumbai - Trib.)
ITAT adopts LIBOR rate as benchmark for international transaction of lending of sums to AEs -IT/ILT: LIBOR being inter-bank rate fixed for international transaction has to be adopted as arm's length rate in case of lending of money in foreign currency to AE Read More
 [2014] 46 289 (Delhi - Trib.)[2014] 64 SOT 99 (Delhi - Trib.)(URO)
AO couldn’t levy penalty by taxing trial run receipts on incomplete projects as they were capital receipts -IT : Where assessee, engaged in scientific research activities, consistently followed practice of Capitalising amount received during trial run period which was duly disclosed in its balance sheet, AO could not pass a penalty order under section 271(1)(c) taking a view that said amount being result of assessee's regular business activity, was liable to be added to its taxable income Read More
 [2014] 46 313 (Hyderabad - Trib.)[2014] 64 SOT 86 (Hyderabad - Trib.)(URO)[2014] 162 TTJ 228 (Hyderabad - Trib.)
Agricultural land to be deemed as capital asset after its conversion into a non-agricultural land -IT : Where requisite approval for converting agricultural land into non-agricultural land was taken, said land no more remained agricultural land Read More
 [2014] 46 394 (Pune - Trib.)[2013] 158 TTJ 409 (Pune - Trib.)
TPO couldn’t choose Cost Plus Method to fix ALP if there was functional differences in export and domestic segment -IT/ILT : Where assessee was engaged in business of manufacture and sale of industrial products such as decanters, separators etc. to its AE located abroad as well as in domestic sector, in view of fact that there were various differences in export segment and domestic segment such as market functions, geographic difference, volume difference, credit risk, related party transactions etc., TPO was not justified in adopting CPM as most appropriate method in order to make adjustment to assessee's AL Read More
 [2014] 46 260 (Pune - Trib.)
ITAT teaches basics to AO; reference should be made to DVO if assessee objects to stamp duty valuation -IT : Where assessee had title over land and he objected before Assessing Officer about value adopted by Stamp Valuation Authority which exceeded fair market value of land, Assessing Officer should have made reference to valuation officer under section 50C(2) Read More
 [2014] 46 230 (Amritsar - Trib.)
ITAT denies TDS credit to deductee on failure of deductor to deposit TDS amount to credit of Govt. in relevant year -IT : Tax deducted at source by deductor but not paid to Central Government within financial year could not be treated as payment of tax on behalf of assessee deductee and thus, assessee, could not claim credit of TDS in that financial year Read More
 [2014] 46 426 (Delhi - Trib.)
TPO couldn’t select three wheeler manufacturer as a comparable for ‘Yamaha Motors’ dealing in two wheelers -IT/ILT: Company manufacturing three wheeler is functionally dissimilar to company engaged in trading of two wheelers and cannot be selected as comparable Read More
 [2014] 46 393 (Delhi - Trib.)
TPO couldn’t choose comparables after rejecting objections of assessee by passing cryptic order -IT/ILT : Where TPO selected companies which were not functionally comparable to assessee for purposes of benchmarking international transaction entered into by assessee and objections of assessee in that regard were rejected by a cryptic and laconic order, issue pertaining to said comparables was remanded to TPO for fresh consideration Read More
 [2014] 47 88 (Agra - Trib.)
Interest on loan taken against FDRs held allowable as it was incurred exclusively to keep intact income from FDRs -IT: In order to protect interest earnings from fixed deposits and to meet her financial needs, when an assessee raises a loan against the fixed deposits, so as to keep the source of earning intact, the expenditure so incurred in wholly and exclusively to earn fixed deposit interest income has to be allowed as deduction Read More
 [2014] 47 214 (Hyderabad - Trib.)
No withholding tax from sum paid to non-resident for services rendered outside India if it wasn’t taxable in India -IT/ILT : Where amounts are paid outside India to persons outside Indian territory, who does not have any tax liability as far as I.T. Act, 1961 is concerned, said sum cannot be considered as 'sums chargeable' under provisions of this Act Read More
 [2014] 47 208 (Mumbai - Trib.)
TP adjustment set aside as average margin of selected comparables was lower than operating margin of assessee -IT/ILT: Where TPO made addition to assessee's ALP in respect of ITES services provided to its AE, in view of fact that classification of ITES into low-end BPO services and high-end KPO services for comparability analysis was not just and proper and, moreover, mean margin of eleven companies comprising six selected by assessee and five by TPO was lower than assessee's operating profit margin, impugned addition was to be set aside Read More
 [2014] 47 205 (Ahmedabad - Trib.)
No disallowance for commission paid to NR if tax wasn’t withheld therefrom because NR didn’t have a PE in India -IT/ILT: Where assessee relying upon Circular No. 786, dated 7-2-2000, paid commission to non-resident without deducing tax at source taking a plea that parties to whom commission was paid, did not have permanent establishment in India nor had they rendered any technical services, in view of failure of revenue to bring any contrary material on record, payments in question could not be disallowed on account of non-deduction of tax at source Read More
 [2014] 46 216 (Hyderabad - Trib.)
Income earned from offshore supplies as a part of composite contract isn’t taxable in absence of any PE in India -IT/ILT : Where pursuant to Contract entered into by assessee, a foreign company, with Power Grid Corporation for setting up a fibre optic system, AO made addition to assessee's income in respect of offshore supplies of goods, in view of fact that said 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 and, therefore, impugned addition deserved to be deleted Read More
 [2014] 47 150 (Mumbai - Trib.)
ITAT lays down litmus test to determine ‘closely linked’ transactions for TP purposes and for their clubbing -IT/ILT : When the transactions are influenced by each other, particularly in determining the price/profit involved in the transactions then those transactions would be regarded as 'closely linked' transactions - Held, Yes – Transactions of hiring of equipment to be used for execution of a project to be clubbed only to the extent of number of transactions with each AE – Held, Yes Read More
 [2014] 47 10 (Mumbai - Trib.)
Sum paid to NR for providing equipment and software to Indian clients facilitating 'Forex deal matching' is royalty -IT/ILT : Where, assessee, a UK based company, entered into a contract with Indian clients for providing its foreign exchange deal matching system services, in view of fact that in terms of contract, assessee allowed its subscribers to use software and computer system to have access to its portal for finding relevant information and matching their request for purchase and sale of foreign exchange, it amounted to imparting of information concerning technical, industrial, commercial or scientific e Read More
 [2014] 46 185 (Cochin - Trib.)
Employer’s and employee’s contribution to PF and ESI are deductible if paid before due date of filing return -IT-I : Payments of employee's and employer's contribution to provident fund and ESI made on or before due date for filing return of income under section 139(1) have to be allowed as deduction while computing taxable income Read More
 [2014] 46 163 (Ahmedabad - Trib.)
No sec. 40(a)(i) disallowance on export commission paid to foreign agents before withdrawal of Circular No. 786 -IT/ILT : Where assessee paid commission to foreign agents for securing order but did not deduct TDS on said payment, Circular No. 786 being in operation, invocation of provisions of section 40(a)(i), read with section 195 was incorrect Read More
 [2014] 46 186 (Hyderabad - Trib.)
Objective of Trust to finance infra-projects represents general public utility; Sec. 12AA registration allowed -IT : Where assessee-trust was created with object of financing infrastructure projects in State such as provision of water supply, roads, health services etc. to be implemented through municipal bodies or corporation, said object being in nature of advancement of general public utility, assessee's claim for registration under section 12AA was to be allowed Read More
 [2014] 46 214 (Kolkata - Trib.)
Governmental subsidy received to set-up industrial projects couldn’t be reduced from actual cost of assets -IT: For computation of depreciation, no part of Government subsidy for encouragement for setting up of industrial projects could be deducted from actual cost/WDV of fixed assets, if same is not relatable to acquisition of assets Read More
 [2014] 46 149 (Jaipur - Trib.)
Agricultural land was to be measured when municipal limits were first notified and not when it was sold -IT : For purpose of application of item (b) of sub-clause (iii) of section 2(14) and to measure KMs from radius of Municipal corporation, relevant date would be date of notification and not date of sale of land in question Read More
 [2014] 46 213 (Cochin - Trib.)
No penalty on declaration of undisclosed assets during search in absence of any evidence to prove its ownership -IT : Where no material was found with regard to assessee's ownership of asset found in search, deeming provision in view of Explanation 5 to section 271(1)(c) could not be applied to presume deeming concealment so as to levy penalty Read More
 [2014] 46 190 (Kolkata - Trib.)
NBFC couldn't take shelter of prudential norms to treat overdue interest as NPA if it didn't try to recover it -IT : Where assessee, a NBFC, did not show interest income on loans advanced to two parties on ground that interest remained overdue on it for more than six months, in view of fact that loan in question was a term loan and, moreover, assessee did not demand return of same, it could not be regarded as a non-performing asset and, thus, impugned addition made on account of interest deserved to be confirmed Read More
 [2014] 46 182 (Pune - Trib.)
ITAT directs TPO to identify and allocate exp. on actual basis while computing operating cost for ALP computation -IT/ILT : Matter remanded where TPO while computing operating cost to determine ALP of international transactions did not identify certain expenses on actual payment basis Read More
 [2014] 47 50 (Mumbai - Trib.)
Benefit of Article 8 of India-Malaysia DTAA is available for shipping of goods under a slot charter arrangement -IT/ILT : Benefit of Article 8 of the Indo-Malaysia DTAA is also applicable to shipping of goods from Indian Port to Hub Port using feeder vessels under a space charter or slot charter as the entire voyage from the Indian Port to final destination port is inextricably linked and cannot be segregated. "Operation of ship" for Article 8 purposes can be done as charterer which does not mean to own or control the ship either as owner or as a lessee The word "charterer" should not be confused with the Read More
 [2014] 46 168 (Chandigarh - Trib.)
AO’s discretion to initiate penalty proceedings couldn’t be vitiated by revisional order of CIT -IT : In terms of section 271AAA, Assessing Officer has discretionary power to initiate penalty proceedings and, therefore, revisional order under section 263 cannot be passed for directing Assessing Officer to initiate penalty proceedings Read More
 [2014] 47 49 (Delhi - Trib.)
Interest on FDR isn’t an income from International Transaction; to be excluded from operating income for computing ALP -IT/ILT : Where assessee-company was engaged in rendering only mediatory and support services to its AE located abroad, interest income earned by it on amount deposited in FDRs would not qualify as income from international transactions and, consequently, same could not be included in operating income while determining ALP on basis of TNMM Read More
 [2014] 46 161 (Mumbai - Trib.)
Revenue has to enquire into whether duplex house is one house or two separate houses before determining annual value -IT: Where assessee claimed that two flats owned by him in a building in fact formed a single property by way of one duplex flat and, thus, its annual value was to be assessed at nil, matter was to be remanded back for disposal as to whether it was a case of two separate residential houses joined together for easy access, or two flats represented a single residential house by applying user test Read More
 [2014] 46 147 (Delhi - Trib.)
Export of ready to print books via CD or email deemed as customized electronic data; eligible for sec. 10B relief -IT: 'Ready to print books' exported by assessee in form of a CD or e-mail are customized electronic data eligible for claiming benefit of deduction under section 10B Read More
 [2014] 46 139 (Cuttack - Trib.)
Construction of house without permission of Municipality doesn’t disentitle one to sec. 54F relief -IT : Where AO rejected assessee's claim for deduction under section 54F in respect of amount invested in construction of building on ground that permission from Executive Engineer, Municipality had not been obtained before construction of building, in view of fact that assessee had in fact constructed house which was evident from copy of certificate of valuation by Municipal Engineer, impugned order rejecting assessee's claim was to be set aside Read More
 [2014] 46 232 (Delhi - Trib.)
TP adjustment set aside while making working capital adjustment as data of assessee-co. wasn’t analysed by TPO -IT/ILT : Where in transfer pricing proceedings, TPO made certain addition to assessee's ALP in respect of import of hi-tech products from AE, in view of fact that while making said addition, TPO as well as DRP considered working capital adjustment only with respect to comparables submitted by assessee but same was not analysed with respect to data of assessee company, impugned adjustment was to be set aside and matter was to be remanded back for disposal afresh Read More
 [2014] 46 123 (Hyderabad - Trib.)
WDV of assets of local authority won’t be re-calculated on its conversion into taxable unit; book dep. is relevant -IT : Where assessee was enjoying exemption of income being a local authority, and with insertion of Explanation to section 10(20) by Finance Act, 2002 effective from 1-4-2003, assessee became taxable entity from assessment year 2003-04 in terms of Explanation 6 to section 43(6), amount of depreciation provided in books of account upto previous year relevant to assessment year under consideration had to be considered as depreciation 'actually allowed' and, therefore, in order to restrict claim o Read More
 [2014] 46 124 (Delhi - Trib.)[2014] 162 TTJ 531 (Delhi - Trib.)
Profit on transfer of bare-shell building to co-developer after approval from authority gets sec. 80-IAB relief -IT : Where assessee's claim for deduction under section 80-IAB was rejected on ground that it had sold bare-shell building to co-developer which was not a permitted activity, in view of fact that Board of Approval (BOA) had granted approval for transfer of bare-shell to co-developer in accordance with relevant provisions of SEZ Act and SEZ Rules, profits arising to assessee from such an authorised transaction were eligible for deduction Read More
 [2014] 46 125 (Hyderabad - Trib.)
Revenue couldn’t cast doubt on sub-contract payments if sufficient evidences were available to substantiate it -IT: Where assessee-company entrusted land development work on sub-contract to GKC which in turn paid certain amount to another company for executing a part of land leveling work, in view of fact that details of all transaction in respect of which subcontract payment had been made by assessee-company to GKC were duly recorded in payment vouchers, AO could not disallow those payments merely taking a view that company which did a part of work for GKC was non-existent company and, thus, entire payme Read More
 [2014] 46 141 (Mumbai - Trib.)
ITAT partly stays tax demand against issue of shares by assessee to AEs at lower than ALP -IT/ILT : Where in transfer pricing proceedings, TPO made addition to assessee's ALP on account of shares issued to AE at an amount lower than ALP, during pendency of appellate proceedings, stay application filed by assessee was to be allowed subject to payments of two instalments of Rs. 15 crores each Read More
 [2014] 47 1 (Delhi - Trib.)
Proviso to sec. 44BB ruling out applicability of provision in cases where sec. 44DA applies has prospective effect -IT/ILT : Insertion of the words "section 44DA" in the proviso to section 44BB(1) by the Finance Act,2010 w.e.f.1-4-2011 is prospective and not retrospective. Amendment cannot be held to be retrospective particularly because it brings substantial change in the taxability of the assessee Read More
 [2014] 46 263 (Amritsar - Trib.)
Double jeopardy - Non-deduction of TDS disallows expenditure and withdraws sec. 10(20) exemption -IT: Section 40(a)(ia) being deeming provision, assessee having made violations of section 194C, no exemption under section 10(20) is allowable Read More
 [2014] 46 76 (Hyderabad - Trib.)
Interest charged from AE held at ALP as Libor plus rate suggested by DRP wasn’t in sync with comparables -IT/ILT: Where DRP had directed Assessing Officer to charge Libor + 2 per cent, Libor + 1 per cent charged by assessee could be considered as at arm's length, in absence of any other comparables where Libor + 2 per cent was charged Read More
NOTIFICATION NO. 2/2014 [F.NO.27015/3/2013-SO(NAT.
Govt. notifies 'Rashtriya Seva Samithi' under Sec. 35AC and specifies maximum deduction available to it -IT : Section 35AC, Read with Explanation (b) Thereto, of The Income-Tax Act, 1961 - Eligible Projects or Schemes, Expenditure on - Notified Eligible Projects or Schemes – Rashtriya Seva Samithi, Andhra Pradesh Read Morenew
NOTIFICATION NO. GSR 496(E) [F.NO.6-1/2011-NS-II (
FinMin keeps intact interest rates on PPF -IT : Section 5 of the Public Provident Fund Act, 1968 - Interest - Notified Rate of Interest on Subscriptions Made to the Fund on or After 1-4-2014 and Balances at the Credit of Subscriber Read More
CBDT constitutes Committee to appraise efficacy of dispute resolution forums; to suggest for reducing litigations -IT/ILT : Constitution of A Committee to Study the Appellate Orders to Examine Filing of Appeals by Department Before Various Forums Read More
IRS Association asks I-T department to allow 100% deductions for contributions to Uttarakhand disaster relief -IT : Section 80G of the Income-Tax Act, 1961 - Deductions - Donations to Certain Funds, Charitable Institutions, etc. – Contribution Made Towards Disaster Relief for the Affected People of Uttarakhand – 100% Deduction Under Section 80G Read More
Changes made by Finance (No. 2) Bill, 2014 as passed by the Lok Sabha -It is proposed that unlisted shares and units of a mutual fund (other than Equity oriented mutual fund) shall be categorized as long-term capital assets only if they are held for more than 36 months. The existing provision requires holding them for a period of more than 12 months so as to categorize them as long-term capital assets. Read Morenew
Judicial Rulings that spurred amendments by Finance Bill 2014 -The Finance Bill, 2014 has proposed to insert a new Explanation in Section 37(1) so as to clarify that any expenditure incurred by an assessee on the activities relating to CSR referred to in section 135 of the Companies Act, 2013 shall not be deemed to be an expenditure incurred by the assessee for the purpose of the business or profession and, therefore, no deduction would be allowed for such an expenditure. Read More
Not all debt funds are bad even now -Not all debt funds are bad even now [28-07-2014] Read Morenew
Use higher 80C limit to take more equity exposure -Use higher 80C limit to take more equity exposure [28-07-2014] Read Morenew
Long-term FMP Investors Face Almost Zero Tax Now -Long-term FMP Investors Face Almost Zero Tax Now [28-07-2014] Read Morenew
Tax benefit scheme restored for wind energy sector -Tax benefit scheme restored for wind energy sector [26-07-2014] Read More
No retrospective tax on debt mutual funds -No retrospective tax on debt mutual funds [26-07-2014] Read More
Jaitley Offers Only Partial Tax Relief for Investors in Debt MFs -Jaitley Offers Only Partial Tax Relief for Investors in Debt MFs [26-07-2014] Read More
Should you roll over your FMPs for 3 years -Should you roll over your FMPs for 3 years [25-07-2014] Read More
Tax tribunal accepts LinkedIn info as proof -Tax tribunal accepts LinkedIn info as proof [25-07-2014] Read More
Jaitley: No New Notice for Retrospective Tax -Jaitley: No New Notice for Retrospective Tax [25-07-2014] Read More
I-T Offices to function on July 26-27 (Saturday and Sunday) to facilitate filing of returns conveniently -I-T Offices to function on July 26-27 (Saturday and Sunday) to facilitate filing of returns conveniently [24-07-2014] Read More
FinMin calls for imparting training to officers and use of innovative investigations to nab tax evaders -FinMin calls for imparting training to officers and use of innovative investigations to nab tax evaders [24-07-2014] Read More
Cairn drops retro tax suit -Cairn drops retro tax suit [24-07-2014] Read More
Hone Tech Skills to Catch Evaders, Jaitley to Taxmen -Hone Tech Skills to Catch Evaders, Jaitley to Taxmen [24-07-2014] Read More
Government urges simplified tax structures to encourage taxpayers to become tax compliant rather than tax evaders -Government urges simplified tax structures to encourage taxpayers to become tax compliant rather than tax evaders [23-07-2014] Read More
Govt using nations’ info to check tax evasion -Govt using nations’ info to check tax evasion [23-07-2014] Read More
Filing Your Returns It's Wise to Stick to I-T Dept's Official Site -Filing Your Returns It's Wise to Stick to I-T Dept's Official Site [23-07-2014] Read More
2013-14: FAQs on Income-tax Returns -Return of income can be filed in paper mode or in e-filing mode. If return of income is filed through electronic mode, then the assessee has following two options: [22-07-2014] Read More
FM asks I-T officials to focus equally on unearthing of black money within India -Revenue targets fixed for direct taxes for the current Financial Year 2014-15 would not only be achieved but would be surpassed: FM. [22-07-2014] Read More
File tax returns on time -File tax returns on time [22-07-2014] Read More
The ‘Vodafone’ amendment is more than a retrospective issue -The ‘Vodafone’ amendment is more than a retrospective issue [22-07-2014] Read More
India may soon sign first bilateral pact with Japan -India may soon sign first bilateral pact with Japan [22-07-2014] Read More
Black Money: OECD Unveils Auto Info Exchange Framework -Black Money: OECD Unveils Auto Info Exchange Framework [22-07-2014] Read More
Finance Minister asks I-T Officials to Unearth Black Money at Home too -Finance Minister asks I-T Officials to Unearth Black Money at Home too [22-07-2014] Read More
‘Need debate on the time required to be GAAR- ready’ -‘Need debate on the time required to be GAAR- ready’ [21-07-2014] Read More
Why GAAR spooks corporate India -Why GAAR spooks corporate India [21-07-2014] Read More
Budget clarifies, plugs loopholes in tax regime -Budget clarifies, plugs loopholes in tax regime [21-07-2014] Read More
I-T, CBDT to Finalise Tax Collection Road Map -I-T, CBDT to Finalise Tax Collection Road Map [21-07-2014] Read More
FM opposes MAT exemption to SEZ developers in Lok Sabha -FM opposes MAT exemption to SEZ developers in Lok Sabha [19-07-2014] Read More
Average I-T grievance disposal 59% of target -Average I-T grievance disposal 59% of target [19-07-2014] Read More
CBDT Forms Panel to Reduce Tax Disputes -CBDT Forms Panel to Reduce Tax Disputes [18-07-2014] Read More
FM Hints at Doing Away With Retro Tax, Panel to Handle Pending Cases -FM Hints at Doing Away With Retro Tax, Panel to Handle Pending Cases [18-07-2014] Read More
Give new declaration for lower tax deduction -Give new declaration for lower tax deduction [17-07-2014] Read More
‘Rich tax retained due to revenue considerations’ -‘Rich tax retained due to revenue considerations’ [17-07-2014] Read More
Finance Bill may be amended to address retrospectivity -Finance Bill may be amended to address retrospectivity [17-07-2014] Read More
I-T Tweak could Plug Black Money Loophole -I-T Tweak could Plug Black Money Loophole [17-07-2014] Read More
Debt MF tax move faces opposition -Debt MF tax move faces opposition [16-07-2014] Read More
Budget 2014: Good beginning or missed opportunity -Budget 2014: Good beginning or missed opportunity [16-07-2014] Read More
Jaitley’s war on tax terrorism -Jaitley’s war on tax terrorism [16-07-2014] Read More
Power tax sop may ‘pass through’ govt firms -Power tax sop may ‘pass through’ govt firms [16-07-2014] Read More
Pre-Budget debt MF deals may be treated under earlier rule -Pre-Budget debt MF deals may be treated under earlier rule [15-07-2014] Read More
Budget brings tax worries for foreign portfolio investments -Budget brings tax worries for foreign portfolio investments [15-07-2014] Read More
Small Equity Buys, Biz Recast may Stay out of Retro Tax -Small Equity Buys, Biz Recast may Stay out of Retro Tax [15-07-2014] Read More
You Can Consider Arbitrage Funds to Beat Tax Blues -You Can Consider Arbitrage Funds to Beat Tax Blues [15-07-2014] Read More
Govt still to Decide on GAAR Implementation: Revenue Secy -Govt still to Decide on GAAR Implementation: Revenue Secy [15-07-2014] Read More
Breather Likely for Investors in Debt Funds -Breather Likely for Investors in Debt Funds [15-07-2014] Read More
Budget 2014 : Proposed amendments relating to Speculation transactions and speculation business -The new Finance Minister Mr. Arun Jaitley has proposed as many as 71 amendments to the Income Tax Act. In this article we anayse proposed amendments relating to Speculation transactions and speculation business keeping in view provisions of section 43(5) and explanation to section 73. [14-07-2014] Read More
Budget 2014- A comprehensive analysis on 'obligation to furnish AIR' -Section 285BA was inserted in the Income Tax Act, 1961 (Act) by the Finance Act, 2003 w.e.f. 01.04.2004. The section read as under [14-07-2014] Read More
Higher tax may not apply to debt funds redeemed before Budget -Higher tax may not apply to debt funds redeemed before Budget [14-07-2014] Read More
Tax on survival benefits -Tax on survival benefits [14-07-2014] Read More
GAAR Confusion may Keep Markets Volatile -GAAR Confusion may Keep Markets Volatile [14-07-2014] Read More
After the Budget, Debt Funds Feel Like Listless Brazil -After the Budget, Debt Funds Feel Like Listless Brazil [14-07-2014] Read More