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Join our free webinar on July 7 at 5 PM for insights into 10 recent High Court income tax judgments favoring assessees. Expert analysis by CA Dipak Dama.
CIRCULAR NO. 9/2007-Income Tax In terms of the provisions of Chapter XII-H of the Income-tax Act (hereinafter referred to as Act), an employer, being a company, is liable to pay Fringe Benefit Tax (FBT) in respect of the fringe benefits provided or deemed to have been provided by it to its employees, directly or indirectly, during the previous year.
A suitable Public Notice and Standing Order may be issued for the guidance of the trade and staff. Difficulties faced, if any in implementation of the Circular may be brought to the notice of the Board at an early date.
Therefore, in exercise of the powers conferred by sub-sections (1) and (5) of section 9A of the said Act and in pursuance of rule 23 of the said rules, the Central Government hereby makes the following amendment in the notification of the Government of India, in the erstwhile Ministry of Finance and Company Affairs (Department of Revenue), No.142/2003-Customs, dated the 23rd September, 2003, published in the Gazette of India vide number G.S.R.759 (E), dated the 23rd September, 2003, namely.
communicate to SEBI, the status of the implementation of the provisions of this circular in the Monthly Development Report.
Notwithstanding non-applicability of Payment of Gratuity Act, 1972 to units having less than 10 workmen, units covered by the Factories Act, 1948, were to apply the gratuity law to their workers, the Madurai Bench of the Madras High Court has held. Agreeing with the decision of the Joint Commissioner of Labour, Madurai (Appellate Authority under the Gratuity Act), that Section 1(3)(a) of the Gratuity Act was applicable even to establishments having less than 10 workers, under notification dated September 9, 1967 of the Department of Industries, Labour and Housing, Tamil Nadu, extending the Factories Act to all tailoring units in the State, Mr Justice K. Chandru ruled that the contention of writ petitioner (Star Tailoring, Tirunelveli) that Gratuity law would not apply to his units had to be rejected.
Rolls Royce Plc vs. DDIT (ITAT Delhi) – jurisdiction u/s 147 can be exercised even on the basis of a prima facie opinion (ii) On facts, the wholly owned subsidiary constituted a ‘business connection’ as well as a ‘permanent establishment’ (iii) the total profits of the enterprise have to be apportioned on the basis of various factors affecting accrual of income. First, the economically significant activities and responsibilities (in the context of activities and responsibilities undertaken by the enterprise as a whole) undertaken through the PE have to be identified through a functional and factual analysis.
Whether, on the facts and in the circumstances of the case, the Tribunal was right in confirming the Commissioner of Income-tax (Appeals)’ view that deduction under section 36(1) (viii) of transfer of reserve at 40 per cent, was to be worked out on the gross total income before making deduction under this section as well as under Chapter VI-A of the Income-tax Act, 1961?
RBF Rig Corpn. LIC (RBFRC) v. ACIT (ITAT Delhi) -Section 10(10CC) of the Income-tax Act, 1961 – Perquisite, not provided by monetary payment – Assessment year 2004-05 – Whether payment of tax on behalf of employee at option of employer is a non-monetary perquisite fully covered by sub-clause (iv) of clause (2) of section 17 and, thus, exempt under section 10(10CC) and is not liable to be included in total income of employee – Held, yes – Whether taxes paid by employer can be added only once in salary of employee and thereafter, tax on such perquisite is not to be added again – Held, yes
The author has made a critical analysis of the recent decision of the Kolkota Bench of the ITAT in Van Oord Atlanta B.V. 112 TTJ 229 and identified the important principles of law emerging therefrom. 1. 1. Factual Synopsis of the case 1.1 Van Oord Atlanta B.V. (‘Assessee’) a company incorporated in Netherlands and a resident of that country was accordingly treated as eligible to benefits of ‘DTAA’.
Assistant Commissioner of Income-tax v. Claridges Investments & Finances (P.) Ltd. – Section 14A, read with section 10(33), of the Income-tax Act, 1961 – Expenditure incurred in relation to income not includible in total income – Assessment year 2001-02 – Whether provisions of section 14A apply only when there is expenditure in relation to an exempt income and it does not create any legal fiction to deem any expenditure as expenditure incurred in relation to exempt income – Held, yes
