State-owned Indian Oil Corp (IOC) has sought a two-year extension of tax breaks available for refineries so that its delayed Rs 29,777 crore Paradip refinery can avail of the benefit. Exemption or holiday, under section 80IB(9) of Income Tax Act, from payment of income tax on revenues earned from refining of crude oil is available to units that are commissioned by March 2012.

The Karnataka High Court, in its recent ruling, in the case of CIT v. Expert Outsource Pvt. Ltd. held that deduction under section 10A of the Income-tax Act, 1961 is available to the assessee on conversion of existing Domestic Tariff Area (DTA) unit into a Software Technology Park (STP) unit.

Where an undertaking existed in the same place, form and substance and did carry on the same business before and after the change in legal character of the form of organization, the taxpayer is eligible for deduction.

The option of choosing the initial year for claiming tax holiday under the Section for a consecutive period of 10 out of 15 years (20 years in some cases) from the commencement of operations of an eligible undertaking, is intended to provide meaningful benefit to such taxpayers, since these business are capital-intensive and typically have long gestation period during which they incur losses and are not in a position to avail the profit-linked tax holiday benefit.

Under the Indian Tax Laws (ITL), a taxpayer carrying on the business of generation of electricity, which qualifies for income-linked deduction (eligible business), can opt to claim such deduction for a period of 10 assessment years (AYs) out of 15 years, beginning from the year in which the taxpayer commences generation of power.

The finance ministry has rejected the petroleum ministry’s demand for giving a seven-year income tax holiday to those who win sedimentary blocks for natural gas and coal bed methane (CBM) exploration in the next round of auctions later this year.

The government today rejected the demands for tax exemption on setting up power plants, state maritime boards and port trusts, saying it was inconsistent in a moderate tax regime.

whether the losses of an undertaking of the Taxpayer which is not eligible for tax holiday (Non-eligible Undertaking), are required to be set off against the profits of another undertaking of the Taxpayer which is eligible for tax holiday (Eligible Undertaking). The SB held that the amount eligible for tax holiday was specific to each undertaking of the Taxpayer. Further, for the purpose of determining the amount eligible for tax holiday under the ITL, the losses of a Non-eligible Undertaking are not required to be set off against the profits of an Eligible Undertaking.

The issue before the SB was that, while computing the amounts eligible for tax holiday under the Indian Tax Law (ITL), whether the losses of an undertaking of the Taxpayer which is not eligible for tax holiday (Non-eligible Undertaking), are required to be set off against the profits of another undertaking of the Taxpayer which is eligible for tax holiday (Eligible Undertaking). The SB held that the amount eligible for tax holiday was specific to each undertaking of the Taxpayer. Further, for the purpose of determining the amount eligible for tax holiday under the ITL, the losses of a Non-eligible Undertaking are not required to be set off against the profits of an Eligible Undertaking.

Supreme Court (SC) [2010-TIOL-04- SC-IT] in the case of Oracle Software India Ltd. (Taxpayer) on the issue of whether the process of converting a blank compact disc (CD) into a recorded CD, by duplicating the master copy of software on it, constitutes ‘manufacture’ under the Indian Tax Law (ITL) for the purpose of claiming tax holiday. The SC held that the processing of recordable media on to a blank CD amounts to ‘manufacture’ under the ITL,