"01 May 2011" Archive - Page 2

Interest u/s 234B due to lower deduction as per an order issued u/s 195

M/s Texas Instruments Incorporated v DDIT (International Taxation) The assessee has not approached the deductor to deduct the tax at lower rate. It is the deductor who approached the department claiming that the payments to be made to the assessee are not chargeable to tax in India and to determine the chargeability. Where all payments ma...

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Posted Under: Income Tax |

Case studies of TDS on reimbursement of expenses

Amounts received towards reimbursement of expenses can, under no circumstances, be regarded as a revenue Receipt and is not chargeable to income-tax (Reliance was placed on the decisions of the Kolkata HC in the case of Dunlop Rubber Co. Ltd and that of the Delhi HC in the case of Industrial Engineering Projects). CIT v. Siemens AG (310 I...

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Posted Under: Income Tax |

Applicability of section 40(a)(i) to payment towards off the-shelf software

It held that the real transaction of the granting of the licence in respect of copyrights in computer programmes had been camouflaged by entering into a chain of the agreements between MS Corp and the group entities. On an in-depth analysis, it was evident that the end users made payments in respect of the granting of licence of copyright...

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Posted Under: Income Tax |

Sec 197 – Certificate for Lower Deduction- Non availability of financial statements of the past 3 years cannot result in failure of the mechanism under Rule 28AA

ub clause (i) of Rule 28AA (1) refers to the average rate of tax as determined by the total tax payable on estimated income as reduced by advance tax and TDS as a % of the payment referred to in section 197 for which application has been made. Sub clause (ii) refers to the average of the average rates of tax paid by the assessee in the la...

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Posted Under: Income Tax |

TDS on Payment towards equipment hired from overseas entity

The assessee was engaged in the business of marine dredging and port construction. It was awarded a contract at Visakhapatnam Port Trust. For the purpose of executing the contract of dredging the assessee hired equipment from MA, Netherlands. During the relevant AYs, the assessee made payments to “MA” in respect of usage of the equipm...

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Posted Under: Income Tax |

Prior approval of AO u/s 195(2) not mandatory if a valid CA certificate is obtained

ADIT Mumbai vs Tata Communications - Copyright article is distinct from copyright per se and payment for copyright article, therefore, cannot be treated as payment of copyright, which could be brought to tax. Liability to deduct tax is a vicarious liability and it can be invoked only when primary liability survives. Since the US company i...

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Posted Under: Income Tax |

CBDT issues new Circular substituting old Circular on refund procedure for excess TDS on payments to residents

A recent circular issued by the Central Board of Direct Taxes (CBDT), Circular No. 2/2011 [ F. No. 385/25/2010-IT(B)] (new Circular) dated 27 April 2011, outline the procedure for refund of excess payment of tax deducted at source (TDS) from payments to residents. The new Circular is applicable for refunds pertaining to the period up to...

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Posted Under: Income Tax |

TDS on payment of daily overseas allowances to foreign company

If the taxpayer was not required to deduct tax at source and could not be declared assessee in default, the question whether the payment was in the nature of fees for technical services or in the nature of reimbursement for the expenses incurred or whether the Tax Treaty overrides the provisions of the ITA, need not be gone into. ...

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Posted Under: Income Tax |

Information technology skills will boost women’s participation in crucial sector – UN

Greater efforts to support girls and young women to acquire skills in information and communications technologies (ICTs) could help address projected shortages of manpower in those professions, the United Nations telecommunications agency said today, marking the first “Girls in ICT Day.” ...

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Posted Under: Income Tax |

Cyber crime – RBI advises banks to set up whistle blowing system

Concerned over rising incidents of cyber crime, the Reserve Bank of India has suggested banks to put in place a strong whistle blowing system as well as reward employees who help prevent frauds. Appropriate mechanisms need to be established in banks...including transaction monitoring teams in banks and to investigate them (disputes or sus...

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Posted Under: Income Tax |

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