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This Tax Alert summarizes a recent ruling of the Special Bench (SB) of Kolkata Income Tax Appellate Tribunal (ITAT) in the case of Shree Capital Services Ltd. (Taxpayer) vs. ACIT (ITA No. 1294 (Kol) of 2008) in which the SB held that, prior to financial year 2005-06 (assessment year 2006-07), derivative transactions in shares were covered by the definition of speculative transactions (ST). The SB further held that the exception to the definition of ST, from tax year 2005.. Full Article

The Tribunal has got the power of rectifying a mistake which is apparent from the record itself and even an error of judgment is outside the ambit of section 254(2) of the Income-tax Act, 1961 Full Article

S. 115JB(1) of the Income-tax Act, 1961 (Act in short) provides for payment of a minimum alternate tax in case the Income-tax computed on the total income falls short of 10% of the book profits of the company. For ensuring that companies do not adopt accounting practices to render the provision otiose, Ss.(2) requires the profit and loss account of companies to be prepared as per Parts II and III of Schedule VI to the Companies Act, 1956. Proviso to this sub-section fur.. Full Article

The prospectus of any insurance product should state the scope of benefits, the extent of insurance cover and in an explicit manner explain the warranties, exceptions and conditions of the insurance cover and, whether the product is participating (with-profits) or non-participating (without-profits). The allowable rider or riders on the product shall be clearly spelt out with regard to their scope of benefits, and in no case, the premium relatable to all the riders put t.. Full Article

With effect from 1-6-1999, section 143(1) does not contain any provision for any adjustment to the returned income shown by the assessee in the return of income, and no room is left for any intimation to the assessee except making arithmetical calculation of tax or interest strictly on the basis of returned income; therefore, the power of rectification u/s 154 should be limited to the scope and power of making intimation u/s 143(1), and as such the power of rectification.. Full Article

The assessee made payments to a foreign company for purchase of ‘shrink-wrapped’/ready-made software without deduction of tax at source u/s 195 (1). The AO held that the payments were chargeable to tax in the hands of the foreign company as “royalty” u/s 9 (1) (vi) and that the assessee was liable u/s 201 for non-deduction of tax and interest thereon. Full Article

The expression marketing as occurring in section 80P(2)(a)(iii) , is a comprehensive term; it does not mean merely buying and selling; it includes processing which may be necessary for making the agricultural produce marketable; hence, for the co-operative society with members being growers, the deduction under section 80P(2)(a)(iii) is available even if the agricultural produce is marketed without further processing or even if it is processed with the use of power. Full Article

Himachal Pradesh Environment vs. CIT (ITAT Chandigarh) The assessee, a statutory Board, was set up for prevention of pollution of streams and wells in the State and other allied activities. It derived income from various testing charges etc. The CIT granted registration u/s 12AA of the Act on the basis that the activities of the [...] Full Article