Income Tax Judgment of SC, HC and ITAT

HC, ruling in favour of the assessee held that it was eligible to set off a loss incurred in tax holiday unit against the income arising from other units, under the same head of 'profits and gains of business or profession'. HC observed that there was no specific prohibition in Sec 10B for such setting off of a loss. Under Sec 70, the assessee was eligible to set off loss from one source against income from any other source under the same head of income. Full Article

The assessee was given refund while processing the return u/s. 143(1) and further refund was given after assessment u/s. 143(3). In reassessment proceedings u/s. 147, the refund given earlier became collectible from the assessee. The Assessing officer levied interest u/s. 234D on such excess refund amount. The learned CIT(A) held that the interest u/s. 234D is not chargeable in the hands of the company in reassessment proceedings. Full Article

Mumbai Bench of ITAT observed that the term loan from IDBI was borrowed by the assessee for the purpose of acquiring a capital asset. Accordingly, ITAT held that the waiver of loan from IDBI was a capital receipt and not taxable u/s 28(iv) or 41(1). ITAT observed that the remission or reduction of liability, which is created on capital account, cannot to our mind result in a revenue receipt making it taxable u/s 28(iv) or 41(1) of the Act and that the waiver of such ter.. Full Article

In this case, the return of income was filed under section 139 (1) on 31.10.2001. The same was processed under section 143(1)(a) of the Income-tax Act. There was no scrutiny assessment under section 143(3) of the Income-tax Act. The reassessment proceedings u/s 147 was initiated by issuing notice u/s 148 on 28.03.2008 by recording the reasons. The reopening proceedings were initiation on the information received from Investigation Wing that assessee has received accommod.. Full Article

The assessee was regularly employing the method of valuation for valuing the stock at cost or net realizable value whichever is less. By shifting to a new ERP package, for example, SAP 2 worked out the value of the stock at cost, any reduction in the valuation of the stock is not permitted in law. The assessee’s claim that the regularly employed method means change method should be adopted in subsequent years is also untenable. The regular employed method by the assess.. Full Article

Indisputably, the ld. CIT(A) considered additional material in relation to two comparables and that of the assessee, which was not available before the TPO/AO. Apparently, the ld. CIT(A) did not follow the procedure laid down under Rule 46A of the IT Rules,1962 nor allowed any opportunity to the AO. The powers of the CIT(A) to admit additional evidence are not only in situations where the evidence could not be produced before lower authorities owing to lack of adequate o.. Full Article

ITAT held that the payment received for supplying the ‘Repair Technical Documents’ are treated as ‘Fees for Technical Services’ (FTS) under the Income-tax Act,1961 (the Act). The Tribunal further observed that the technical materials supplied by the taxpayer would not lose the characteristics of ‘Service’, simply because they were supplied in the form of bound manuals, more particularly when it is tailor made for the specific requirements of a person. Full Article

AAR held that the payment for mobilization and de-mobilization is related to use of equipment for undertaking installation work and taxable as royalty under Article 12(3)(b) of the India-Singapore tax treaty (tax treaty). Further as installation is ancillary and subsidiary to the use of equipment or enjoyment of the right for such use, the payment for installation is taxable as Fees for Technical Services (FTS) under Article 1 2(4)(a) of the tax treaty. The AAR also held.. Full Article