Analysis of HC, SC and ITAT Judgment on Taxation and Corporate Law

Whether this agreed addition is to be added while calculating book profit under section 115JB of the Act. Section 115JB provides that where in the case of an assessee being a Company, the income tax payable on total income as computed under this Act is less than 10% (applicable in the impugned Assessment Year) of its book profit, such book profit shall be deemed to be the total income of the assessee. Full Article

Statute consisting of Act and Rules speak of filing of return before due date and contents of that must be furnished in that return. The format has been prescribed by the Rules and also the contents have been prescribed by the Rules. Filing of the return also has been prescribed by the Act. Nowhere in the Act or Rules, there is a mandatory provision that the return must be filed only electronically. Full Article

The Explanation to section 92(1) of the Act clarifies that the allowance for any expense or interest arising from an international transaction shall also be determined having regard to the ALP and therefore the disallowance is made under section 92(1) and not under section 40A(2) of the Act. Full Article

As per Explanation 7; no penalty is leviable if the assessee proves that the price charged or paid in such transaction was computed in accordance with the provisions contained in Sec. 92C and in the manner prescribed under section in good faith and with due diligence. Full Article

Assessee had received a gift of Rs. 22,76,750/-in U.S. dollars from an NRI, N.Mohan and the assessee had filed two confirmation letters, one in December 2006 and another on 10-07-2007 given by the donor stating that he had gifted the above amount to the assessee, that the assessee is his close relative, that he is a man of means owning a software company of a net worth of US $ 25 million, that he had gifted during the year 2002-03 Rs. 2.00 crores to rebuild a government .. Full Article

The principle is that the assessee has to prove the identity of the creditor, the genuineness of the transaction and the creditworthiness of the creditor in order to discharge the burden cast on him, that a particular cash credit found in his books is genuine having regard to the nature and the source thereof and, therefore, cannot be added to his income under section 68. Full Article

In the instant case, the contributors, namely, the members of the assessee made contributions, which have been kept in fixed deposit with third party banks and those third party banks have contributed to the members fund. Accordingly, the members fund have been expanded not by the contributors/members, but by a third party. Full Article

Having been served with a legal notice for the levy of penalty u/s. 271B, it was incumbent on the assessee to cause to comply with the provision, at least for the second year and, in any case, seek legal opinion in its respect. Rather, it could have, on its own, requested the AO not levy the penalty for that year (i.e., A.Y. 2006-07), explaining that the non-audit of its accounts u/s. 44AB stood caused only due to its ignorance of law, Full Article

In so far as the DTAA between India and Canada is concerned, it is observed that article 12(4) thereof gives the definition of the term fees for include services while article 12(5)(a) provides that notwithstanding the said definition given in article 12(4), fees for included services does not include amount paid for services that are ancillary and subsidiary as well as inextricably and essentially linked, to the sale of property. Full Article

As stated earlier, the risk and liabilities undertaken by the charter M/s Puyvast, the Netherlands entity, is limited only to a situation where the tonnage carried by the vessel is less than 19500 tonnes. Therefore, the substantial freight beneficiary is the owner of the ship, the Iranian entity and in view of this, the conclusion of the revenue authorities that relief under DTAA is not allowable is justified Full Article