Mahanagar Telephone Nigam Limited Vs Addl.CIT (ITAT Delhi)- Whether proportionate deduction under section 80IA is permissible where major amount of profits is attributable to new setup and meagre amount is attributable to old set up in view of the amended provisions of of clause (iv)(c) of 80-IA and 80IA(4)(ii) – Whether quantum of deduction under section 80IA is directly proportional to the profits of the undertaking and hence it has nothing to do with investment made in plant and machinery – Case remanded.
When parties enter into two separate contracts, one for material and one for labour, the transaction would not be one and indivisible, but would fall into two separate agreements, one of work or service and the other of sale. In such a case, the provisions of section 194C would apply only to the labour contract and not to the materials contract. The supply portion of the contract being for supply of equipment does not require deduction of tax at source. -Karnataka Power Transmission Corporation Ltd. v. Asstt. CIT (ITAT Bangalore)
Notification No. 34/2011- Income Tax – In exercise of the powers conferred by clause (6C) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies that any income arising to M/s. Rolls Royce Defense Services Inc., with principal place of business at 2001, South Tibbs Avenue, Indianapolis, Indiana 46206, USA for maintenance of aero engines (IAE 3007 AIE Engines) fitted in Embraer Aircraft, by way of royalty or fees for technical services received in pursuance of the agreement vide Contract No. Air HQ/8836/RR/Eng B between M/s. Rolls Royce Defence Services Inc. and Ministry of Defence signed on the 12th December, 2005 to an extent of Rs. 35.43 crores shall not be included in computing the total income of said company under the said Act.
CIT v Shivalik Hatcheries Pvt. Ltd. – ITAT, on the basis of the material placed before it came to the conclusion that the building of the poultry shed has been specifically designed with a view to protect the birds from disease. It has been designed to ensure proper lighting and circulation of air; proper and scientific feeding arrangement; proper water system; proper arrangement for collection of manure and droppings; proper arrangement for medication and vaccination; and a right environment conducive for laying of eggs by the birds. The building had been designed in a manner so as to protect the birds and increase their productivity. The argument made on behalf of the revenue that the building can be used with certain modification for certain other purposes cannot be accepted. It is how the building is designed which is the main factor which is to be taken into consideration. The law is clear that if it is found that the building has been designed specifically to further the cause of manufacture or production then the same is a plant. Applying the aforesaid test, we hold that the poultry sheds are plant within the meaning of section 243, as it then stood.
Deepak Engineering Works and Others v CIT and Others (Patna High Court)- , section 278B, makes it clear that onus lies on the Partners or Directors to prove that they are not responsible for any of the offence committed by a firm / company. First proviso to section 278B(1), quoted above, makes it clear that onus lies on the Partners or Directors to prove that they were not responsible for acts of omission or commission committed by the firm / company. The question as to whether petitioner nos. 2 to 4 were actually involved in this case or not is a question of fact which is to be determined during the trial and onus is on the petitioners to prove that they were not responsible for any act of omission or commission of the firm i.e. petitioner no.1 M/s Deepak Engineering Works. Accordingly, in view of statutory provisions contained in section 278B of the Income Tax Act (hereinafter referred to as the I.T. Act) first submission of learned counsel for the petitioner is not sustainable.
The Ministry of Corporate Affairs has clarified, that Sahara Prime City limited, a Sahara Group company intending to go for an IPO, had filed information about its group companies to SEBI in its Draft Red Herring Prospectus. SEBI as market regulator vested with the mandate of investor protection, upon noticing inadequacy in material disclosures has asked information about some Sahara Group companies as per SEBI’s disclosure requirements.
ITAT Delhi has recently pronounced its ruling in the case of ST Microelectronics Private Limited v. CIT(A), wherein it upheld the revenue’s rejection of transfer pricing analysis undertaken by the taxpayer since the taxpayer had improperly characterized itself as a low-risk software service provider and accordingly, selected wrong comparables for the transfer pricing analysis. Besides, the decision also reiterates that it is a mandatory requirement of Rule 10B(4) of the Income-tax Rules 1962 [“the Rules”] to use current year data for comparability analysis.
Recently ITAT Mumbai in the case of Bechtel International Inc., USA v. ADIT held that mere inactivity for a limited period does not mean that the taxpayer’s business ceased to exist or that it did not carry on any business at all. Expenditure incurred during the said period of inactivity / lull is allowable even though the taxpayer has not earned any business income.
The Reserve Bank of India (RBI) has issued AP (DIR Series) Circular No. 70, dated June 9, 2011 permitting Authorized Dealer Category – I banks [AD] to re-designate resident accounts of repatriating foreign nationals as Non-Resident (Ordinary) [NRO] accounts. This will enable foreign nationals to receive their bona fide dues even after they leave the country. Prior to this, foreign nationals had to close their resident accounts at the time of repatriation from India.
The Swiss Parliament today gave approval to amendments to tax treaties with countries, including India, making it easier for to access information about the illegal funds held by their nationals in Swiss private banks. The upper house of the Swiss Parliament endorsed amendments to double-taxation agreements in line with internationally applicable standards.
