Indian Tax Solution


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2016-ITS-406-ITAT-M/s Royal Rich Developers Vs. D.C.I.T. &ndash OSD &ndash II, Dt-24-08-2016

Bogus share capital: Interplay between s. 56(2)(viib) and s. 68 explained. Amendment to s. 68 casting onus on assessee and requiring it to explain source of source of share subscription is clarificatory and retrospective. Law in Lovely Exports 299 ITR 268, Sophia Finance 205 ITR 98 etc does not apply as they are prior to the Money Laundering Act 2002.

2016-ITS-224-ITAT-M/s. Tally Solutions Pvt. Ltd. Vs. Asst. Commissioner of Income Tax,Bangalore.,Dt-19-08-2016

The transaction of extending credit period to AEs is closely linked with the transaction of providing services to the AE and is not a separate transaction. Both transactions have to be aggregated for determination of ALP.

2016-ITS-402-ITAT-The Income Tax Officer Vs M/S. Vikram A. Pradhan,Dt-17-08-2016

Amounts shown as liabilities in the Balance Sheet cannot be deemed to be cases of \"cessation of liability\" only because the liabilities are outstanding for several years. The AO has to establish with evidence that there has been a cessation of liability with regard to the outstanding creditors.

2016-ITS-223-ITAT-Hyundai Rotem Company Vs. ACIT, Circle 2(1)(1), New Delhi , Dt-05-08-2016

The TPO is required to be consistent in matters relating to selection of comparables. If a comparable has been included or rejected in an earlier year, he is not entitled to take a different view in a later year if there is no change in circumstances.

2016-ITS-174-ITAT-Smt. Sita Bai Khetan Vs. The Income Tax Officer,Jaipur. Dt-27-07-2016

Valuation is a matter of estimation and some degree of difference is bound to be there. If the difference between the stamp duty valuation and the declared sale consideration is less than 10%, addition u/s 50C should not be made.

2016-ITS-111-ITAT-Batlivala & Karani Securities (India) Vs. Deputy Commissioner of Income-tax, Dt- 08-07-2016

No TDS on payment for simple marketing services of introducing foreign institutional investors by foreign subsidiary companies.

2016-ITS-140-ITAT-Mr. Rajeev B. Shah Vs. The Income Tax Officer,Dt-23-06-2016

Mere Non Completion / Registration cannot be the reason for denying benefit U/s 54.

2016-ITS-117-ITAT-M/s. Jaipuria Infrastructure Developers vs. ACIT, Dt-09-06-2016

An assessment made u/s 153A only on the basis of pre-search enquiries and because the parties did not appear in response to s. 133(6) summons is not valid if no incriminating material was found in search. A s. 143(1) Intimation is deemed to be a completed assessment if no notice u/s 143 (2) has been issued prior to the date of search.

2016-ITS-93-ITAT-Income tax Officer Vs. M/s. Intertoll ICS India Pvt. Ltd. , Dt- 25.05.2016

Arbitrary action of the AO in treating the payment by the assessee to the AE as \"excessive/ unreasonable\" deplored. Whims and fancies of an AO cannot decide tax liability of an assessee. Either the AO was ignorant of the TP provisions or he was adamant to make the disallowance at any cost. Either way, his action cannot be endorsed.

2016-ITS-94-ITAT-M/s. Bayer CropScience Limited Bayer House Vs. ACIT -10(3) Aayakar Bhavan, Dt- 25.05.2016

For allowing / disallowing any expenditure under Section 37 of the Act, the basic thing to be seen as to whether the expenditure was incurred for furtherance of business interest of the Assessee or not. It is a fact that in this case because of the expenditure incurred no new assets came into existence. The expenditure was incurred considering the old relation with the supplier and to avoid future business complications. If an assessee makes payment which is compensatory nature, it has to be allowed. In this case, the payment was made in pursuance of an agreement and that was of compensatory nature was not penal, hence it was to be allowed.

2016-ITS-87-ITAT-Shri Ashwani Kumar Arora, vs. ACIT, Dt-19.05.2016

Intention of the legislative in incorporating the provisions contained u/s 271AA effective during the period 1st June, 2007 to 1st July, 2012 is to provide general amnesty in search and seizure cases, and the case of the assessee undisputedly falls u/s 271AAA and cannot be dealt with u/s 271(1)(c) by any stretch of imagination even.

2016-ITS-90-ITAT-DDIT (IT)-Vs.M/s. Reliance Industries Ltd., Dt-18.05.2016

The assessee cannot be said to have paid the consideration for use of or the right to use copyright but has simply purchased the copyrighted work embedded in the CD- ROM which can be said to be sale of ?good? by the owner. The consideration paid by the assessee thus as per the clauses of DTAA cannot be said to be royalty and the same will be outside the scope of the definition of ?royalty? as provided in DTAA and would be taxable as business income of the recipient. The assessee is entitled to the fair use of the work/product including making copies for temporary purpose for protection against damage or loss even without a license provided by the owner in this respect and the same would not constitute infringement of any copyright of the owner of the work even as per the provisions of section 52 of the Copyright Act,1957

2016-ITS-88-ITAT-M/s. Ujagar Holdings Pvt. Ltd., Vs. Income Tax Officer, Dt- 16.05.2016

The Assessing Officer has not complied with the direction of the Hon?ble Supreme Court in the case of GKN Driveshaft (India) limited Vs. CIT (2003) 259 ITR 19 (SC) providing reasons for reassessment within a reasonable time, and therefore respectfully following the decisions cited above, the reassessment completed by the Assessing Officer under section 147 of the Act cannot be sustained in the case of the assessee and quashed.

2016-ITS-89-ITAT-Fiduciary Shares & Stock P. Ltd....Appellant Vs. ACIT, Circle 4(2)....Respondent, Dt-13.05.2016

The amendment to Explanation to s. 73 by Finance (No. 2) Act, 2014 w.e.f. 01.04.2015 is clarificatory in nature and operates retrospectively from 01.04.1977, being the date the Explanation to s. 73 was placed on the statute. Therefore, the loss incurred in share trading business by companies whose principal business is trading in shares will not be treated as speculation loss but as normal business loss and the same can be adjusted against income from business or other sources.

Editor's Column

Huge relief for manufacturers -No GST payments on advances received for supplying goods

On Wednesday, the Central Government spared businesses from paying GST on advance amounts they have received for goods which are to be supplied later in the future. The step was aimed to help clear the confusion over tax liabiliti ...