Profit Level Indicator – All Related transactions cannot be considered for determining ALP

CLR Editorial Notes: In this particular case, the assessee™s parent company, Digital Microwave Corporation USA, had supplied an equipment to its Indian customers for which the assessee received a decided commission. The equipment was covered by warranty and the service relating to its installation and  annual maintenance was provided by the assessee in India. It is annual… Read More

Tags: Australian Labor PartyCITCommonwealth Law ReportsComparablesIndiaTPOtransfer pricingUnited States

Interest Payment at 15% u/s 40A(2)(b) to related parties is not considered to be excessive

CLR Editorial Notes:  This appeal was presented by the assessee for the assessment year 2007-2008 which was directed against the order of the CIT(A)-XXI. The contention of the assessee was that the CIT (A) had erred in confirming the addition u/s 40A(2)(b) of a said amount which was alleged to be an excessive payment of interest by 3%, and also overlooked the… Read More

Tags: AppealCITCommonwealth Law ReportsFinance ActHUFOrder (biology)Order of Australiatransfer pricing

Section 54 exemptions can be availed on Investments in plot meant for construction of house

CLR Editorial Notes: This appeal of the assessee is directed against the order of the Commissioner of Income-tax (Appeals), of Hyderabad for an assessment done earlier. The assessee along with another person, jointly acquired certain property for a consideration. Later, the other person relinquished the rights over the said property. Thereafter the assessee entered into a development agreement… Read More

Tags: AppealCapital GainCITCommissionerCommonwealth Law ReportsHyderabadHyderabad IndiaSomajiguda

High Court rebukes ITD for harassing honest taxpayers and Non-grant of refunds

CLR Editorial Note: An extensive search was conducted at the premises of the assessee concerned with this case. During the search,  cash worth of Rs. 25 lakhs was seized. The assessee succeeded in the block assessments and the said amount of Rs. 25 lakhs became refundable to the assessee. However, the said amount was not… Read More

Tags: CITCommonwealth Law ReportsHonIncome taxSupreme CourtSupreme Court of the United StatesThe Honourable

Special Bench verdict in Sec 40(a)(ia) TDS case of Merilyn Shipping considered as bad law

CLR Editorial Note: The assessee had incurred an expenditure of about Rs. 31 lakhs on freight but had not deducted TDS as per section 194C of the IT Act. The Assessing Officer hence held that there was a failure to deduct TDS, hence the expenditure could not be allowed as per deduction under section 40(a)(ia).… Read More

Tags: AppealCalcutta High CourtCITFull Case DocumentIncome taxKolkata

Advertisement charges paid to Google & Yahoo is not chargeable to tax in India

CLR Editorial Note: The assessee, a florist, paid a sum of Rs. 30.44 lakhs to Google Ireland Ltd and Yahoo USA for online advertising. The AO held that the assessee ought to have deducted TDS and that as there was a failure, the expenditure was not allowable u/s 40(a)(i). This was deleted by the CIT(A)… Read More

Tags: CITGoogle+IndiaMumbaiUnited StatesYahoo

Absorbed losses incurred before initial assessment year as per Sec. 80 IA(5), need not be set off

CLR Editorial Note: The assessee, in this case, set up a Wind Mill unit and had commenced operations on in the Assessment Year 2007-08. In the said year, the assessee suffered a loss of Rs. 3.5 crores on account of depreciation and the interest which was set-off against the other income. In Assessment Year (AY) 2008-09, the… Read More

Tags: CITCommonwealth Law ReportsEducational assessmentFinance ActFull Case DocumentIncome taxMumbai

Taxability of a revocable transfer as deemed gift u/s 4(1)(c) of the Gift-tax Act

CLR Editorial Notes: In this case, it was noted that the assessee owned 6000 shares of a certain company. In the year 1982, he executed a deed of revocable transfer of shares in favour of another person. In this deed the assessee was permitted to exercise the power of revoking the gift, after completion of 74… Read More

Tags: AppealCITIncome taxIndiaPunjab and Haryana High CourtSupreme CourtThe HonourableTribunal

Share application money is not loan or advance

Ratio Decidendi: Money paid in advance for Share application cannot be treated as loan or advance or Deemed Dividend as under Section 2(22)(e) of the IT Act. CLR Editorial Note: The assessee was a beneficial shareholder of two companies named Kingston Properties P Ltd. (KPPL), New Dimensions Consultants P Ltd (NDCPL) & R. S. Estate Developers P Ltd… Read More

Tags: Advance paymentAllotmentsCITCommonwealth Law ReportsDividendFull Case DocumentGardensITAT MumbaiMumbaiOrder of Australia

Non-Compete Fee is not eligible for depreciation or amortisation over non-compete period

Ratio Decidendi: Non-Compete Fee, paid to the seller on acquisition of their business , is not eligible for depreciation or amortisation over the non-compete period, as done when  calculating revenue deduction. CLR Editorial Note: The assessee and subsequent appellant acquired the glass manufacturing business from Piramal Enterprises Ltd. and entered into a non-compete agreement with them for… Read More

Tags: AppealBusinessCITCLR Editorial NoteDelhi High CourtPiramal EnterprisesSupreme CourtWest Bengal

“Bonafide Mistake” in filing returns does not call for penalty u/s 271(1)(c)

CLR Editorial Note: In this case, the assessee had filed a return of income in which two mistakes were committed (i) The assesssee claimed depreciation of Rs.1.70 crores instead of Rs. 1.05 crores due to a calculation mistake, (ii) the assessee had sold its garment manufacturing machine and had suffered a loss of Rs.21.68 lakhs… Read More

Tags: chartered accountantCITDelhi High CourtDepreciationHigh CourtIncome taxRevenueRupeeThe Honourable

Special Bench verdicts on Sale & Lease Back & lease finance are not good law

CLR Editorial Notes: In this case, the assessee, a Bank, had bought assets from a customers and had then leased it back to them under a sale and lease back agreement. It had also purchased assets which were identified by its customers and leased it to back to them under a finance lease agreement. The… Read More

Tags: BusinessCITDelDelhi High CourtDepreciationFinance leaseIndiaIndusInd BankLeasingMumbaiSale & Lease BackSupreme CourtThe Silver Chair

Delay in filing TDS return through NSDL is a technical breach

CLR Editorial Notes: The Assessing Officer, in this case, had imposed a penalty u/s 272A(2)(k) for delay in filing the TDS return u/s 200(3) by the assessee. In the appeal argument given by the assessee, the delay was due to a shortage of staff. This was rejected on the ground of being an reasonable cause.… Read More

Tags: CITCuttackFiling (legal)GovernmentIncome taxNSDLTaxTax Deducted at SourceTDS

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