"04 July 2010" Archive

Authority for Advance Ruling liberally interprets tax residency rules for returning employees

In re Shri Anurag Chaudhary (AAR Delhi)

The plain reading of the income tax provisions dealing with determination of residential status of an individual indicates that beneficial provisions relaxing the tax residency will apply to an Indian citizen leaving India for the purpose of employment and not otherwise. In the above case, the AAR has applied the above beneficial provisio...

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Reminder : Person receiving income subject to withholding tax is required to obtain Permanent Account Number (PAN)

The Finance (No.2) Act of 2009 introduced section 206AA under the Income Tax Act, 1961 (the ITA) to provide that any person who is entitled to receive any sum or income or amount, on which tax is to be withheld under the ITA shall furnish PAN to the person responsible for withholding of tax. In case PAN is not furnished, minimum withholdi...

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Posted Under: Income Tax |

Charges paid for bill discounting transactions does not amount to interest

DCIT Vs. Cargill Global Trading (I) (P) Limited (ITAT Delhi)

The Interest Tax Act, 1974 specifically includes discounting charges in the definition of interest, however interest defined under ITA does not include discounting charges. Wherever the legislature was conscious of the fact that even the discount of bills of exchange is to be included within the definition of interest, the same was basica...

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Mumbai Tribunal rules that no Permanent Establishment arises on deputation on hire basis. Further, no income arises to recipient on reimbursement of salary costs

Tekmark Global Solutions LLC Vs. DDIT (ITAT Mumbai)

This is yet another decision on the issue of whether the deputation of personnel by an overseas entity results in Permanent Establishment in India and the related attribution of profit and withholding tax issues....

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Fee for technical services may be taxable in India even if completely rendered outside India

Ashapura Minichem Ltd. Vs Assistant Director of Income Tax (ITAT Mumbai)

The decision of tribunal reaffirms the position that after amendment to section 9 of the Act, what is required is that, the services should be utilized in India in order to be taxable in India irrespective of the situs of rendering of the services....

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AAR ruling is binding on the revenue authorities despite any contrary ruling in other tax payer’s case

The Prudential Assurance Company Ltd. Vs. DIT (AAR)

Prudential Assurance Company Ltd. (Prudential) is a foreign company incorporated in United Kingdom and is engaged in the business of Insurance. Prudential registered with the Securities and Exchange Board of India as a sub-account of a Foreign Institutional Investor (FII)....

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Interest free security deposit not a perquisite

CIT Vs Vijay Singh (ITAT Delhi)

The High court agreed with the position taken by the appellate authorities that the security deposit did not constitute a loan since it was paid to the respondent in his capacity as the owner of the accommodation and in pursuance of a lease agreement. Further, the court agreed with the observation of the ITAT that the respondent did not g...

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Simplification of E-visa process for Information technology sector

The guidelines issued on 26 April 2010 are measures taken by the Government to counter the adverse effects of the employment visa notification of December 2009. In terms of the new guidelines, E-visa applications sponsored by qualifying Indian IT companies will be processed by the Indian missions abroad and will not be subjected to any q...

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Posted Under: Income Tax |

Maintenance of stock of goods by the foreign enterprise at the customer’s location for standby use may not give rise to PE

Airlines Rotables Limited, UK Vs JDIT (ITAT Mumbai)

The Tribunal has held that a simple maintenance of stock of goods by the foreign enterprise at the customer?s location for standby use may not constitute a PE, while keeping the issue open with regard to royalty on use of equipment....

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Focus on Foreign Institutional Investors (FII’s): Revised Direct Tax Code

The draft Direct Taxes Code (DTC) along with a Discussion Paper was released on 12 August 2009 for public comments with the intention to simplify direct tax legislation in India. Subsequently, comments were solicited from the public and examined by the Government. A Revised Discussion Paper which is meant to respond to the major concerns ...

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Posted Under: Income Tax |

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