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Direct Tax Laws
  
 SC/HC
  
 [2014] 49 taxmann.com 1 (Bombay)
Cap gains from sale of G-Securities if not taxable in UAE shall not be taxable in India as well under Indo-UAE DTAA -IT/ILT : Where capital gain accrued to residents of UAE from sale of Government Securities in India carried out through respondent bank, was not taxable in UAE, income so generated could not be subjected to tax in India and, therefore, respondent bank was not liable to deduct tax at source while remitting amount in question to non-residents Read Morenew
  
 [2014] 47 taxmann.com 387 (Madhya Pradesh)[2014] 267 CTR 258 (Madhya Pradesh)
HC upholds transfer order facilitating co-ordinated investigation as it was passed after hearing assessee -IT : Reason for transfer of a case for effective and co-ordinated investigation can never be said to be a vague nor insufficient reason, particularly in case wherein a proper show cause notice is issued, hearing is granted and a final order has been passed in matter Read Morenew
  
 [2014] 48 taxmann.com 15 (Kerala)[2014] 363 ITR 309 (Kerala)
Income from mixing of rubber to manufacture compound rubber would be eligible for sec. 80-IB relief -IT: Income from job work of mixing rubber with chemicals to make compound rubber for tyre manufacturing companies would be eligible for deduction under section 80-IB Read Morenew
  
 [2014] 48 taxmann.com 55 (Delhi)
Holding period of property is to be counted from its allotment date and not from its registration date -IT : In order to determine taxability of capital gain arising from sale of property, it is date of allotment of property which is relevant for purpose of computing holding period and not date of registration of conveyance deed Read More
  
 [2014] 48 taxmann.com 56 (Madras)[2014] 361 ITR 304 (Madras)
HC sets aside rectification order of ITAT as it was made without analyzing disputed issues and relevant materials -IT : Law requires Tribunal to record findings supported by reasons to sustain order Read More
  
 [2014] 48 taxmann.com 20 (Bombay)
Reassessment could be made beyond four years on basis of bogus transactions unearthed during survey: HC -IT : Where subsequent to completion of assessment, Assessing Officer received information from a survey that assessee had entered into bogus purchase transactions, he was justified in initiating reassessment proceedings on basis of those bogus invoices issued by supplier even after expiry of four years from end of relevant assessment year Read More
  
 [2014] 48 taxmann.com 67 (Bombay)
Sum received for supply of equipment with user guide on how to install and use it, couldn't be taxable as royalty -IT/ILT: Where contract for supply of equipment and spare parts included stipulations for giving information so as to guide Indian party to install equipment at site and thereafter to use it, payment to assessee-Danish company would not be royalty Read More
  
 [2014] 48 taxmann.com 22 (Andhra Pradesh)[2014] 361 ITR 668 (Andhra Pradesh)
HC denied to admit appeal as issue relating to valuation of assets made by ITAT was question of fact -WT : Where Tribunal relying upon its orders passed in earlier assessment years, reduced valuation adopted by Departmental valuer in respect of beneficial interest of assessee in jewellery held by a trust on account of various factors such as joint ownership, cumulative burden of tax liabilities, hazard and risk of litigation etc., said question relating to valuation of asset being a pure question of fact, impugned order passed by Tribunal did not require any interference. Read More
  
 [2014] 48 taxmann.com 18 (Delhi)[2014] 365 ITR 452 (Delhi)
Infrequent share dealings with intent of capital appreciation leads to taxation of resultant profit as capital gain -IT: Where investment in shares was made with an objective of capital appreciation, there was infrequent-handful of transactions and dividend was also earned, profit from sale/purchase of shares was treated as capital gain Read More
  
 [2014] 48 taxmann.com 28 (Bombay)
No reassessment by AO to deny sec. 36(1)(viii) relief on basis of material considered during original assessment -IT: Where Assessing Officer allowed assessee's claim for deduction under section 36(1)(viii) in assessment framed under section 143(3), subsequently on basis of same material on record, he could not initiate reassessment proceedings taking a view that excess benefit was granted to assessee in terms of provisions of Act Read More
  
 [2014] 48 taxmann.com 45 (Delhi)
Operating ratio couldn't be basis of comparison if assessee was doing trading and not agency business as declared -IT/ILT : Where assessee entered into transactions of sales and purchases of goods with its AE located abroad on principal to principal basis which were akin to trading transactions, authorities below were justified in rejecting assessee's contention that while determining ALP appropriate ratio to be considered for comparing with other entities would be ratio of net revenue to operating costs Read More
  
 [2014] 47 taxmann.com 369 (Punjab & Haryana)
Sec. 80-IB benefit is available to manufacturer even on income earned from job work -IT : Where after section 80-IB deduction, effective tax rate in hands of assessee became less than that of sister concern to whom sale at a price less than market price was allegedly made, no addition was to be made enhancing GP rate of such transactions Read More
  
 [2014] 47 taxmann.com 384 (Kerala)[2014] 363 ITR 482 (Kerala)
Construction cost on leasehold land disallowed as assessee had been holding land after expiry of lease term -IT : Where assessee had been in possession of property after expiry of lease period, benefit of written down value of cost of construction could not be allowed Read More
  
 [2014] 48 taxmann.com 13 (Gujarat)[2014] 361 ITR 195 (Gujarat)
No question of law arises when ITAT had allowed payments to sub-contractor for job work after examining all facts -IT : Where Tribunal after considering totality of facts allowed payment made by assessee to sub-contractors for carrying out job work contracted out to assessee, no question of law did arise from Tribunal's order Read More
  
 [2014] 48 taxmann.com 14 (Punjab & Haryana)
No interest if block return was filed belatedly due to delay on part of revenue to supply copy of seized docs -IT: Where income was computed by applying GP rate, section 40A(3) could not be invoked Read More
  
 [2014] 47 taxmann.com 386 (TRIPURA)[2014] 363 ITR 168 (TRIPURA)
HC directs AO to verify undisclosed bank transactions of assessee for determining his undisclosed income -IT : Where Commissioner gave a number of opportunities of being heard to assessee, revision order could not be assailed for not following principle of natural justice Read More
  
 [2014] 47 taxmann.com 385 (Delhi)
ITAT couldn’t set aside sec. 69A disallowance for bogus transaction without considering statements of suppliers -IT : Where Assessing Officer having found that transaction of purchase and sale were bogus, made addition under section 69A, Tribunal was not justified in deleting addition without going into evidence on record Read More
  
 [2014] 47 taxmann.com 379 (Delhi)
Income from resale of goods bought from holding co. not taxable if its subsidiary won’t constitute its PE in India -IT/ILT : Where assessee, purchased raw materials and spares from its holding company located abroad, in view of fact that assessee did not constitute agency PE of holding company in India, no taxable income accrued to holding company on account of sales in India and, thus, assessee was not liable to deduct tax at source while making payments to holding company Read More
  
 [2014] 48 taxmann.com 264 (Karnataka)
Payment to group company for use of intranet facility is 'royalty', Karnataka HC says -IT/ILT: Where assessee, engaged in rendering information technology solutions to companies within CGI Group and other global customers, entered into an agreement with CGI Group Inc., a Canada based company, whereby assessee got a right to use intranet facilities belonging to Canadian company for rendering aforesaid services, payment made by assessee for utilising those facilities amounted to royalty liable to tax in India Read More
  
 [2014] 47 taxmann.com 372 (Calcutta)
Calcutta HC rejects appeal against order of Bangalore ITAT which was appealable before Karnataka HC -IT : Appeal against order of Appellate Tribunal, Bangalore can be filed only in Karnataka High Court Read More
  
 [2014] 48 taxmann.com 263 (Karnataka)
Income arising to NR from facilitating export of goods without buying them in its name isn't chargeable to tax -IT/ILT : Exemption to non-resident from tax of income arising to him 'through or from operations which are confined to purchase of goods in for the purpose of export' is not limited to situations where the non-resident actually purchases the goods in India in his own name and then exports them. Exemption is available even in a situation where assessee is giving services to both the foreign buyer and Indian purchaser resulting in exports of goods from India resulting in earning of foreign exchang Read More
  
 [2014] 47 taxmann.com 367 (Allahabad)[2014] 361 ITR 637 (Allahabad)
Subsidy granted to compensate interest and storage cost on holding of buffer stock of sugar was revenue receipt -IT: Where subsidy was given to assessee for holding buffer stock of sugar was to be treated as revenue receipt as object was to compensate assessee in running his business Read More
  
 [2014] 47 taxmann.com 366 (Delhi)
HC directed fresh examination to ensure that sum indicated in seized docs was undisclosed investment -IT : Assessee claimed to have made payment of undisclosed amount towards a project but name of said project did not appear in any seized documents, matter was to be remanded for fresh examination Read More
  
 [2014] 47 taxmann.com 364 (Madras)[2014] 361 ITR 296 (Madras)
Assessee was liable to pay interest on excess refund as its assessment was made prior to insertion of sec. 234D -IT : Where assessment for period prior to insertion of section 234D was completed after insertion of said section, assessee was liable to pay interest on excess refund as contemplated in said section Read More
  
 [2014] 47 taxmann.com 406 (Gujarat)
Cultivation of agricultural land by assessee himself isn't precondition to exempt cap gains arising on its sale -IT : Assessee could be allowed exemption under section 10(37), even if agricultural land was not cultivated by assessee himself but through hired labourer or other family member Read More
  
 [2014] 47 taxmann.com 415 (Gujarat)
No reassessment by AO by changing his reasons for disallowance after CIT(A) reversed his orders, rules HC -IT : Pending appeal before Tribunal in respect of allowability of expenditure on account of interest liability on secured premium notes issued by assessee, re-assessment on ground that said liability did not accrue during relevant year, was unjustified Read More
  
 [2014] 47 taxmann.com 417 (Delhi)
Reassessment accepted on basis of retro-amendment couldn't be challenged later on when HC held it as arbitrary -IT : Reassessment made in view of retrospective amendment of section 80HHC(3) if accepted, attained finality and cannot be challenged in view of a later judgment holding such amendment arbitrary Read More
  
 [2014] 47 taxmann.com 239 (Karnataka)
Rental income from letting out building in software technology park was assessable as business income -IT : Where rental income was received by assessee from letting out building along with other amenities in a Software Technology Park, same was chargeable to tax under head 'Income from business and profession' Read More
  
 [2014] 47 taxmann.com 331 (Karnataka)[2014] 363 ITR 410 (Karnataka)
No interest on late filing of block return due to delay on part of department in issuing copy of seized docs -IT : No interest can be levied under section 158BFA for late filing of block return where such delay was on account of delay on part of department in issuing copies of documents seized during search Read More
  
 [2014] 47 taxmann.com 310 (Himachal Pradesh)
Payment to sub-contractors for transportation of LPG cylinders would be subject to TDS under Sec. 194C -IT: Where assessee entered into a contract with IOC for carriage of LPG cylinders, in view of fact that assessee in turn got transportation of cylinders done through three parties by entering into sub-contracts with them, payments of freight charges made to sub-contractors were covered by section 194C(2) and, thus, assessee was required to deduct tax at source while making payments in question Read More
  
 [2014] 47 taxmann.com 238 (Bombay)
Exp. on issue of FCCBs was allowable as holders had no compulsion but an option to convert them into equity shares -IT: Where Assessing Officer allowed assessee's claim for deduction of expenses incurred on issue of Foreign currency Covertible Bonds (FCCBs), in view of fact that unless option was exercised by bondholders, conversion of those bonds into equity shares was not permissible, impugned revisional order passed by Commissioner disallowing expenditure in question on ground that FCCBs in real sense, were equity shares right from beginning and that conversion of bonds was only a routine technical complia Read More
  
 [2014] 47 taxmann.com 332 (Bombay)
Re-assessment affirmed as commission paid to foreign agent was included in cost of asset to escape TDS liability -IT/ILT: Where commission paid to foreign party was not shown separately but added to cost of purchase to avoid TDS liability, there had been less than full and true disclosure of all material facts during assessment proceedings and, therefore, reopening of assessment even after four years from end of relevant assessment year was justified in law Read More
  
 [2014] 47 taxmann.com 240 (Allahabad)[2014] 361 ITR 66 (Allahabad)
No transfer of case without recording of reasons and without giving an opportunity of being heard to assessee -IT : Power to transfer a case under section 127 is conditioned by requirement of furnishing a reasonable opportunity of being heard, wherever it is possible to do so, to assessee and of recording reasons Read More
  
 [2014] 47 taxmann.com 241 (Gujarat)
Concealment penalty couldn’t be imposed when issue of unit-wise deduction to assessee was debatable one -IT : Where Assessing Officer passed a penalty order under section 271(1)(c) for raising a false claim of deduction under section 80HHC, in view of fact that issues like unit wise deduction, exclusion of excise duty and sales-tax from total turnover etc. had been a matter of dispute between Department and assessee and, thus, issue of deduction was a debatable one, Tribunal was justified in setting aside impugned penalty order Read More
  
 [2014] 47 taxmann.com 243 (Madras)[2014] 361 ITR 332 (Madras)
HC directs ITAT to consider in detail issue of nature of income from sale of shares as business income or cap gains -IT : When specific case of assessee was that income arising from sale of shares could not be treated as income from business, in fairness to claim of assessee, Tribunal ought to have considered same in detail to arrive at a factual finding Read More
  
 ITAT
  
 [2014] 48 taxmann.com 88 (Hyderabad - Trib.)
Fees paid to consultant-doctors under contract of service would attract sec.194J TDS and not sec. 192 TDS -IT: Where assessee-hospital made payments to doctors engaged as consultants, in view of fact that doctors were not precluded from pursuing professional pursuits elsewhere and, moreover, once doctors achieved some seniority and standing, their remuneration was fixed as a percentage of fees collected from patients consulting them, there existed a contract for service between parties and, therefore, assessee was justified in deducting tax at source under section 194J while making payments to consul Read Morenew
  
 [2014] 48 taxmann.com 53 (Jaipur - Trib.)[2014] 161 TTJ 801 (Jaipur - Trib.)
CIT couldn't pass revisionary order on directions of 'ITO' without recording his satisfaction under sec. 263 -IT: Before taking any action under section 263, Commissioner must record his satisfaction; issuance of notice under section 263 on basis of proposal made by ITO is void ab initio Read Morenew
  
 [2014] 48 taxmann.com 66 (Delhi - Trib.)
Indian subsidiary negotiating for and executing contracts on behalf of US parent co. constituted it's PE in India -IT/ILT : When Indian Associated Enterprise of US company negotiated, secured and executed contract with Indian client and installation and commissioning was also undertaken by Indian Associate Enterprise, it would be permanent establishment of US company in India Read Morenew
  
 [2014] 48 taxmann.com 17 (Hyderabad - Trib.)
Customization of software as per client's needs would fall under the term 'produce' for sec. 10A relief purpose -IT : Costomized software having passed through cumbersome process of customization, would become a different product, entitled to section 10A exemption Read Morenew
  
 [2014] 48 taxmann.com 27 (Chennai - Trib.)
ITAT directs AO to examine agreement with NR agents and ascertain whether services rendered by them were FTS -IT/ILT : Where agreement entered into by assessee with foreign agents was not available to determine type of services, matter had to be considered afresh to decide applicability of section 9(1)(vii) Read Morenew
  
 [2014] 48 taxmann.com 54 (Mumbai - Trib.)[2013] 28 ITR(T) 72 (Mumbai - Trib.)
Sec. 155(15) covers situations in which stamp duty value is revised and not where reference is made under sec. 55A -IT : Section 155(15) is invoked only in case of situations covered by section 50C(2)(b) which refers to only values adopted or assessed by stamp valuation authorities; DVO's value is outside scope of section 155(15) Read More
  
 [2014] 48 taxmann.com 62 (Visakhapatnam - Trib.)
Contribution to chit fund isn't an approved mode of investment under sec. 11(5) -IT : Chit fund business is governed by principles of mutuality as contribution to a chit fund is contribution to one self and, hence, it is not an investment as contemplated by section 13(1)(d) Read More
  
 [2014] 48 taxmann.com 80 (Hyderabad - Trib.)
Exp. disallowed by TPO while computing ALP couldn’t be considered for determining operating margin as well -IT/ILT : Where assessee company had already deducted tax under section 192 on entire salary including salary reimbursed to parent company, disallowance under section 40(a)(iii) was not proper Read More
  
 [2014] 48 taxmann.com 16 (Mumbai - Trib.)
Exp. incurred by jeweller to enhance its brand image was in nature of revenue exp., says ITAT -IT: Expenditure incurred on brand building by assessee, a manufacturer and exporter of jewellery, was to be allowed as business expenditure Read More
  
 [2014] 48 taxmann.com 87 (Mumbai - Trib.)[2014] 31 ITR(T) 133 (Mumbai - Trib.)
No disallowance of foreign travelling exp. if details given by assessee weren’t opposed either by AO or by CIT(A) -IT/ILT : Where assessee company had already deducted tax under section 192 on entire salary including salary reimbursed to parent company, disallowance under section 40(a)(iii) was not proper Read More
  
 [2014] 48 taxmann.com 365 (Chennai - Trib.)
Payments to non-resident for his translation services shall not be deemed as 'fees for technical services' -IT/ILT : Translation services involving translation of text from one language to another were not technical services and, therefore, payment made by assessee to non-resident translators would not fall within scope of 'fees for technical, managerial or consultancy services' as mentioned in Explanation 2 to section 9(1)(vii) Read More
  
 [2014] 48 taxmann.com 21 (Delhi - Trib.)
Prior to April 1, 2014, surrender value of Keyman Insurance Policy on its assignment was to be taxed on maturity -IT: Prior to 1-4-2014, out of total proceeds received by assessee on maturity of policy, a sum equivalent to surrender value of Keyman insurance policy at time of assignment by company in favour of assessee is taxable Read More
  
 [2014] 47 taxmann.com 381 (Mumbai - Trib.)
Prolonged outstanding liability taxable under sec. 41(1) if assessee failed to provide creditors’ affirmation -IT : Where trading liability was outstanding for a period of almost six years, no confirmation evidencing existence of liability was furnished at any stage and even no claims with regard thereto were made, same could clearly be said to be unproved, and application of section 41(1) was justified Read More
  
 [2014] 48 taxmann.com 19 (Delhi - Trib.)
Only deductible expenditure could be subjected to sec. 40(a)(ia) disallowance for TDS default, says ITAT -IT : In order to fall within ambit of section 40(a)(ia), it is sine qua non that assessee should have been otherwise eligible for deduction of sum which is sought to be disallowed by invoking provisions of section 40 Read More
  
 [2014] 48 taxmann.com 60 (Delhi - Trib.)
ITAT directs afresh examination as TPO denied chance of hearing to assessee and failed to examine its objects -IT/ILT: Where TPO in making transfer pricing adjustment had not afforded any opportunity of being heard to assessee and even failed to examine contentions and arguments of assessee in this regard; approach adopted by TPO was not justified, matter was to be remanded for fresh adjudication Read More
  
 [2014] 47 taxmann.com 382 (Mumbai - Trib.)
Assessee shall get interest on refund arising out of excess tax paid on estimation basis before filing of return -IT : Where assessee paid tax prior to date of filing return, tax paid by assessee was nothing but self assessment tax for purpose of section 140A and thus, assessee was entitled for interest on refund under section 244A Read More
  
 [2014] 48 taxmann.com 32 (Mumbai - Trib.)
Security deposit was to be taxed as income from house property if it was circumventing real rent from property -IT: Where it did not come out from facts that payment of security deposit was to circumvent real rent, same could not be considered for computing income from house property Read More
  
 [2014] 48 taxmann.com 26 (Mumbai - Trib.)
ITAT deletes TP adjustment as it was made by TPO without applying any prescribed method -IT/ILT : Where TPO did not accept TP analysis made by assessee without giving any reasons and made TP adjustment without applying any prescribed method, TP adjustment was to be deleted Read More
  
 [2014] 48 taxmann.com 30 (Delhi - Trib.)[2014] 31 ITR(T) 226 (Delhi - Trib.)
Trust could claim sec. 80G relief even when it was not eligible to claim benefit of secs. 11 and 12 -IT: Where assessee was denied exemption under section 11, income of assessee to be computed under general provisions of Income-tax Act Read More
  
 [2014] 47 taxmann.com 416 (Cochin - Trib.)
Income generated from sale of carbon credits won't be eligible for sec. 80-IA relief -IT/ILT : Where assessee deputed some of its employees to AE to render services of commercial value, TPO was justified in making addition to assessee's ALP holding that a markup of 5 per cent should have been charged in addition to reimbursement of salary expenses by AE Read More
  
 [2014] 47 taxmann.com 383 (Ahmedabad - Trib.)[2014] 161 TTJ 39 (Ahmedabad - Trib.)
Business losses can be set off against undisclosed income under sec. 68, says ITAT -IT: Set off of business loss against addition under section 68 to be allowed Read More
  
 [2014] 47 taxmann.com 378 (Mumbai - Trib.)
Payment of interest by Indian branch to its overseas head-office wasn’t taxable on grounds of mutuality -IT/ILT : In case of assessee, a non-resident bank, interest paid by Indian branch to Head Office and overseas branches was not taxable in India on principles of mutuality and, therefore, tax was not required to be deducted at source while making said payments Read More
  
 [2014] 47 taxmann.com 389 (Mumbai - Trib.)[2014] 161 TTJ 772 (Mumbai - Trib.)
ITAT allows depreciation on intangibles transferred on succession of business of a Co. on going concern basis -IT : Where assessee had taken over business of a company as a going concern and trademark of such company was continuously used by assessee, depreciation on such intangible assets to be allowed to assessee Read More
  
 [2014] 47 taxmann.com 371 (Mumbai - Trib.)[2014] 33 ITR(T) 1 (Mumbai - Trib.)
No sec. 69C disallowance if assessee had explained source of exp. and furnished PAN and TDS certificates of payees -IT : Where assessee had explained source of expenditure and had furnished complete details of expenditure such as name of parties to whom payment had been made, their address, PAN, amount paid, copy of TDS certificate etc., no disallowance could be made under section 69C Read More
  
 [2014] 47 taxmann.com 380 (Delhi - Trib.)
ITAT deletes TP adjustment for services rendered among AEs following its earlier ruling -IT/ILT : Where TPO made certain addition to assessee's ALP taking a view that since group concerns did not render any services to assessee, value of transactions relating to reimbursement of salary expenses to those concerns was to be taken at nil, in view of fact that in earlier assessment year Tribunal had recorded a finding of fact that group companies infact rendered liaisioning and other support services to assessee abroad, in absence of any change in circumstances during relevant year, fol Read More
  
 [2014] 47 taxmann.com 281 (Hyderabad - Trib.)
Developer could postpone recognition of income if he wasn’t sure about its realization due to dispute over land -IT: Developer could postpone recognition of income if he wasn’t sure about its realization due to dispute over land Read More
  
 [2014] 47 taxmann.com 374 (Bangalore - Trib.)[2014] 29 ITR(T) 36 (Bangalore - Trib.)
Business transactions entered by assessee with its sister concern were outside the ambit of deemed dividend -IT : Where in respect of payments received by assessee from its sister concern, Assessing Officer having invoked provisions of section 2(22)(e), made addition to assessee's income on account of deemed dividend taking a view that one shareholder had got substantial interest in both companies, in view of fact that payments in question were result of business transaction entered into by assessee with its sister concern, impugned addition made by Assessing Officer was to be set aside Read More
  
 [2014] 47 taxmann.com 370 (Delhi - Trib.)[2014] 33 ITR(T) 118 (Delhi - Trib.)
ITAT directs AO to reconsider issue of grossing-up as assessee didn’t furnish details of tax withheld from sum paid -IT/ILT : Income being payable net of tax, for purpose of deduction of tax, such amount of payment would be increased by amount of tax Read More
  
 [2014] 47 taxmann.com 376 (Delhi - Trib.)[2014] 29 ITR(T) 42 (Delhi - Trib.)
Claim of disputed liability won’t be a bar in allowing its deduction unless assessee gets relief in that regard -IT: Where assessee disputes a liability, it would be no bar in allowing deduction for same unless and until assessee gets relief in that regard Read More
  
 [2014] 47 taxmann.com 377 (Hyderabad - Trib.)
Entities earning high operating profit margin due to an odd event of merger to be excluded from comparable lists -IT/ILT : Where TPO made addition to assessee's ALP in respect of rendering software development services to its AE located abroad, in view of fact that in case of one comparable selected by TPO, there was amalgamation of another company which resulted in its earning of high operating margin whereas some other comparables adopted by TPO were inappropriate on account of functional difference and related party transactions, impugned addition was to be set aside and, matter was to be remanded back f Read More
  
 [2014] 47 taxmann.com 405 (Hyderabad - Trib.)
Consultation with AO wasn't required when additional evidence was obtained by CIT(A) on its own motion -IT: Where additional evidence is obtained by first appellate authority on its own motion, there is no requirement in law to consult/confront Assessing Officer with such additional evidence Read More
  
 [2014] 47 taxmann.com 341 (Mumbai - Trib.)
Exp. incurred by ‘Idea Cellular’ on abandoned projects intending to facilitate its business was revenue exp. -IT : Where project on which expenditure was incurred could not be completed, but it was intended to facilitate assessee's business activity to be carried out more conveniently and profitably, such expenditure was to be allowed as revenue expenditure Read More
  
 [2014] 47 taxmann.com 418 (Mumbai - Trib.)
ITAT upheld penalty for not furnishing TP report as opportunity to rectify defects wasn't utilized by assessee -IT/ILT : Where assessee challenged imposition of penalty under section 271BA, but despite adjournments, it could not rectify defects found in appeal, penalty was to be confirmed Read More
  
 [2014] 47 taxmann.com 414 (Chennai - Trib.)
Assessee couldn't be expected to foresee retro-amendment to sec. 115JB and pay advance tax, says ITAT -IT : Diminution in value of assets is not an admissible expenditure for computing income of assessee under section 115JB when assets are held as investments Read More
  
 [2014] 47 taxmann.com 409 (Chennai - Trib.)
Sum paid for high speed internet connectivity via assured bandwidth is royalty under India-USA DTAA -IT/ILT: Payment for use of 'process' provided by assessee, whereby through assured bandwidth, customer was guaranteed transmission of data and voice, was 'royalty' as per section 9(1)(vi) Read More
  
 [2014] 47 taxmann.com 422 (Cochin - Trib.)
Demand notice wasn't required to levy penalty if self-assessment tax wasn't paid within stipulated time -IT: Where assessee had not shown sufficient cause for non-payment of tax within stipulated time, penalty levied by Assessing Officer under section 221 read with section 140A(3) was to be confirmed; there was no requirement of issue of notice of demand under section 156 Read More
  
 [2014] 47 taxmann.com 421 (Cochin - Trib.)
Interest on FDRs taxable on gross basis; no deduction for interest on borrowings taken on security of such FDRs -IT: Land situated beyond municipal limits or beyond 8 kms radius of notified municipality, was agricultural land and, therefore, could not be treated as capital asset within meaning of section 2(14) Read More
  
 [2014] 47 taxmann.com 313 (Hyderabad - Trib.)
Supervisory services without having control of physical sites couldn’t constitute a PE as per DTAA with Germany -IT/ILT : In terms of article 5(2)(i) of India Germany DTAA, supervisory activities by themselves cannot constitute a PE in India in India as said activities are to be in connection with a building, construction or assembly activity of non-resident in India Read More
  
 [2014] 47 taxmann.com 288 (Mumbai - Trib.)
AO couldn’t invoke Rule 8D without examining nature of exp. attributable to exempt income, says ITAT -IT : Provisions of rule 8D can only be triggered when Assessing Officer is not satisfied about correctness of claim of assessee in respect of such expenditure in relation to exempt income Read More
  
 [2014] 47 taxmann.com 311 (Mumbai - Trib.)
Comparables accepted by ITAT in earlier years couldn’t be rejected by TPO if there was no change in circumstances -IT/ILT : Where TPO made certain adjustment to assessee's ALP in respect of investment advisory services rendered to AE by rejecting comparable selected by assessee, in view of fact that in earlier years Tribunal had accepted said comparable adopted by assessee, in absence of any change in circumstances during relevant year, following aforesaid order passed by Tribunal, impugned addition was to be deleted Read More
  
 [2014] 47 taxmann.com 237 (Delhi - Trib.)
Sec. 14A disallowance confirmed by ITAT as assessee couldn’t point out any mistake in calculations as per rule 8D -IT : Where disallowance under section 14A was computed as per formula given in rule 8D and assessee failed to show any mistake in calculation made in respect of expenditure for earning exempt income, disallowance to be upheld Read More
  
 [2014] 47 taxmann.com 335 (Kolkata - Trib.)
Conversion of Co. into LLP subject to tax if loans extended to partners out of reserves of the erstwhile Co. -IT: Where a company was converted into assessee, i.e. a limited liability partnership, in view of fact that subsequent to conversion loan was given to partners who were directors in erstwhile company in their profit sharing ratio out of reserves and surplus of erstwhile company, there was violation of proviso (f) of section 47(xiib) and, therefore, benefit of provisions of section 47(xiiib) was not available to assessee-firm Read More
  
 [2014] 47 taxmann.com 410 (Chennai - Trib.)
Broker assuming all risks without any right to conclude contracts on behalf of NR can't be treated as agency PE -IT/ILT : Payment made to non-resident companies for procuring standard and copyrighted software products, for distribution or re-sale purpose on principal to principal basis could not be treated as payment towards royalty Read More
  
 [2014] 47 taxmann.com 390 (Jodhpur - Trib.)[2013] 28 ITR(T) 389 (Jodhpur - Trib.)
Tippers purchased for letting out purposes couldn’t be deemed as part of plant & machinery; depreciable at 40% -IT: Tippers given on hire and registered as vehicle with registration authority are eligible for depreciation at 40 per cent Read More
  
 [2014] 47 taxmann.com 336 (Hyderabad - Trib.)
Transaction between two resident entities won’t be an ‘International transaction’; no additions to be made -IT/ILT : Where for assessment year 2006-07 assessee and its associated enterprise both were residents of India for tax purposes, transaction between them did not constitute an international transaction, thus, addition made under section 92CA(4) was to be deleted Read More
  
 [2014] 47 taxmann.com 236 (Cuttack - Trib.)
AO can’t decide issue of jurisdiction himself without referring matter to concerned DG, Chief CIT or CIT -IT : Where an assessee calls in question jurisdiction of Assessing Officer, then Assessing Officer shall, if not satisfied with correctness of claim, refer matter for determination under sub-section (2) of section 124 before assessment is made to Chief Commissioner or Director General and Commissioner; he cannot decide issue of jurisdiction himself Read More
  
 [2014] 47 taxmann.com 309 (Agra - Trib.)
Amount paid at any time without deducting tax therefrom would be hit by Sec.40(a)(ia) disallowance -IT : Where assessee challenged disallowance made by Assessing Officer on account of non-deduction of tax at source while making payments to sub-contractors on ground that disallowance under section 40(a)(ia) could only be made in respect of sums remaining outstanding at end of year, following order passed by Gujarat High Court in case of CIT v. Sikandar Khan N. Tanvar [2013] 357 ITR 312/[2014] 220 Taxman 256/[2013] 33 taxmann.com 133 plea raised by assessee was to be rejected Read More
  
 [2014] 47 taxmann.com 312 (Bangalore - Trib.)
Functionally dissimilar comparables to be excluded from TP study to determine ALP of R&D services -IT/ILT : Where TPO made addition to assessee's ALP in respect of rendering research and development services to AE, in view of fact that three comparables selected by TPO were improper on account of functional difference, Commissioner (Appeals) was justified in excluding those comparables and accordingly granting partial relief to assessee Read More
  
 [2014] 47 taxmann.com 308 (Bangalore - Trib.)
Interest on deposits with Electricity Co. for electric connection to be taxed after reducing electricity exp. -IT : Where assessee, an association of owners of commercial areas owned in a building, deposited certain amount with BESCOM for availing electricity service connection, in view of fact that there was a direct nexus between interest received on said deposits and electricity consumption charges, assessee claim that electricity expenses had to be set off against interest income and it was only net interest, if any, could be brought to tax, was to be allowed Read More
  
 [2014] 47 taxmann.com 334 (Hyderabad - Trib.)
Renouncing of right to purchase a property in lieu of a sum was ‘transfer’; to be taxed as capital gains -IT: Where on account of failure of vendor to act upon agreement to sell, assessee filed a civil suit for specific performance which ultimately resulted in compromise, in view of fact that as per terms of MOU, assessee gave up his claim over property against consideration received, it could be interpreted that assessee had relinquished or extinguished his right over property in terms of section 2(47) Read More
  
 [2014] 47 taxmann.com 330 (Pune - Trib.)
Sum received from letting out an office space with facilities of cafeteria and conference room was business income -IT : Where assessee earned licence fee by letting out office space alongwith other facilities such as cafeteria, conference rooms LCD projectors etc., it being a case where property had been exploited by undertaking complex commercial activities, amount in question was to be taxed as business income Read More
  
 [2014] 47 taxmann.com 285 (Jaipur - Trib.)
AO couldn’t make exorbitant addition without considering purchases made by assessee from excise department -IT : Where assessee trader procured liquor through excise department only, even if books results were to be rejected, reasonable estimation of trading addition was to be made Read More
  
 [2014] 47 taxmann.com 283 (Delhi - Trib.)
Secondment of employee by group Co. to Indian affiliate for managerial services constitutes its service PE in India -IT/ILT: Where in terms of licence agreement entered into between assessee, a UK based company, and its Indian group concern, certain employees were seconded to Indian company to render services relating to manufacturing of Excavator loader in India, in view of fact that seconded employees furnished services including managerial services for a period of more than 90 days during relevant assessment years, Assessing Officer rightly concluded that service PE of assessee was established in India in t Read More
  
 Statutes
  
OFFICE MEMORANDUM [F.NO.DIR(HQRS.)/CH.(DT)/
CBDT directs officials to maintain appointment schedule with taxpayers in spirit of Citizen's Charter -IT/ILT : Section 119 of the Income-Tax Act, 1961 – Income-Tax Authorities – Instructions to Subordinate Authorities – Instructions to Maintain Schedule of Appointments with Tax Payers etc. Read Morenew
  
ORDER [F.NO.149/141/2014-TPL]
CBDT constitutes committee to approve any action proposed by AO to tax indirect transfer due to retro-amendment -IT/ILT : Section 119 of the Income-Tax Act, 1961 - Income-Tax Authorities - Instructions to Subordinate Authorities - Constitution of A Committee for Proper Administration of Certain Clarificatory Amendments Introduced in Clauses (14) and (47) of section 2, section 9(1)(I) and section 195 Vide Finance Act, 2012 Read Morenew
  
ORDER NO. 2/FT&TR/2014 [F.NO.500/12/2013-SO/FT&TR-
Dispute Resolution Panels reconstituted at Mumbai and Pune -IT/ILT : Section 144C of the Income-tax Act, 1961 - Dispute Resolution Panel (DRP) - Reference to - Reconstitution of DRP at Mumbai & Pune Read More
  
ORDER [F.NO.133/24/2014-TPL]
Due date for e-furnishing of tax audit report under Section 44AB for AY 2014-15 extended to 30-11-2014 -IT/ILT : Section 119 of the Income-Tax Act, 1961 - Income-Tax Authorities - Instructions to Subordinate Authorities – Extension of Due Date for Obtaining and Furnishing of Report of Audit Under Section 44AB for A.Y. 2014-15 in Case of Assessees who are not Required to Furnish Report under Section 92E from 30-9-2014 To 30-11-2014 Read More
  
NOTIFICATION NO. GSR 588(E) [F.NO.1/2/2014-NS.II]
Higher Investment in PPF - FinMin notifies Rs. 1,50,000 as revised ceiling limit for investment in PPF -IT/ILT : Public Provident Fund (Amendment) Scheme, 2014 – Amendment in Paragraph 3 and Form-A Read More
  
 News
  
I-T Panel's Wise Men to Take Up Retro Tax Cases -I-T Panel's Wise Men to Take Up Retro Tax Cases [29-08-2014] Read Morenew
  
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AB Group Fined Rs150 cr Over Cash Haul in Its Office -AB Group Fined Rs150 cr Over Cash Haul in Its Office [19-08-2014] Read More