"05 December 2009" Archive

Write back of provision of bad debts, not previously allowed as deduction, is not taxable

Bank of Tokyo Vs DIT (ITAT Delhi)

The taxpayer was a banking company. In the current appeal, the Revenue’s grievance was that the CIT(A) had erred in directing that the written back ”provision of bad-debts” was not taxable as ”business income” especial y when a deduction of a sum was already al owed under Section 36(1) (vi a). The AO in the assessment order he...

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Royalty paid for certain rights, which are not in the nature of “make available,” can be charged to revenue account

Denso Faridabad Pvt. Ltd.

The taxpayer was a wholly owned subsidiary of Denso Thermal Systems, Italy. The taxpayer was engaged in the business of manufacturing certain automobile products and selling the same in India and abroad. For the impugned assessment year, the taxpayer claimed that the royalty paid to its parent company as revenue expenditure. After perusin...

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If certain activities are not really services but more in the nature of stewardship/shareholder activities, the amounts cannot be taxed in India in the absence of a permanent establishment (PE)

Invensys Systems Inc. Re (Authority for Advance Rulings)

The applicant is a US-based manufacturer engaged in manufacturing of engineering goods and is also an R&D-based service provider. It entered a cost al ocation agreement with its India-based group company. The applicant raises invoices on the Indian group company for services rendered based on the formula given in the agreement. The ques...

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Reimbursement of custom duty by a non resident entity is not taxable u/s 44BB

The taxpayer was a company incorporated under Hong Kong laws. It filed its return of income declaring total income of INR196 million. AO noticed that the taxpayer had not offered for tax the amount received toward reimbursement of expenses, which included custom duty and accordingly the income was assessed at INR197.2 million. Aggrieved b...

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Posted Under: Income Tax |

Over 30,000 tax litigations pending in ITAT, Most of them filed by department

Over 30,000 tax litigations are pending in the Income Tax Appelate Tribunals across the country, though most of these appeals are filed by the tax department and not the assessees, Minister of State for Finance S S Palanimanickam said in the Lok Sabha today. ITATs accross the country have 30,303 cases pending till June 30 this year of wh...

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Posted Under: Income Tax |

Circular Regarding levy of service tax on‘business auxiliary service’

Notification No. 43/2009-Service Tax 02/12/2009

Notification No. 43/2009-Service Tax Whereas the Central Government is satisfied that a practice was generally prevalent regarding levy of service tax ( including non-levy thereof ), under section 66 of the Finance Act, 1994 ( 32 of 1994) (hereinafter referred to as the Finance Act), on taxable service namely ‘business auxiliary service...

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Changes to Indian exchange regulations relating to receipt and remittance of remuneration outside India

01/01/1970

Payment of salary outside India to employees of a foreign company who are on secondment to an office, branch, subsidiary or joint venture in India (Indian entity) of the foreign company. The remittance of salary received by foreign nationals whilst resident in India who are employees of Indian companies....

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Posted Under: Income Tax |

Is rotation of auditors an answer to Satyam episode?

The question whether there should be a system of rotation of statutory auditors introduced to avoid repetition of Satyam episode has been raised in some quarters. In the past, the Government had tried to introduce this system by proposing amendments in the Companies Act on two occasions. However, these amendments could not be implemented ...

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Posted Under: Income Tax |

Changing of law through issuance of circulars

Till today the law on the subject of repairing and maintenance of roads and other infrastructural facilities was clear in the minds of all stakeholders (barring a few service tax commissionerates). There was this discussion that maintenance and/or repairing of roads may be a taxable activity, but a conclusive view came across from most co...

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Posted Under: Income Tax |

Section 50C of the Income tax Act — a tool to tackle menace of black money

The Government has been rightly concerned about the component of black money in real estate transactions and consequent evasion of tax. With a view to curb the said menace and to tax the unaccounted money, the Government has time and again made amendments in the Income-tax Act (Act) by introducing different provisions to tackle the issue....

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Posted Under: Income Tax |

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