"21 August 2011" Archive

Fees paid to a foreign company for rendering testing and certification services cannot be treated as income deemed to accrue or arise in India under Section 9(1)(vii) of the Income-tax Act

Havells India Ltd. Vs ACIT (ITAT Delhi)

Havells India Ltd Vs ACIT (ITAT Delhi)- It has been held that where services have been rendered outside India and have been utilised for the purpose of making or earning any income from any source outside India, such payments would fall outside the purview of Section 9(1)(vii) of the Act and will not be deemed to accrue or arise in India....

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Fees received by KPMG for assisting an Indian Company in acquisition of Sugar mills in Brazil is not Fees for Technical Services under the Income-tax Act

ITO Vs Bajaj Hindustan Ltd. (ITAT Mumbai)

ITO Vs Bajaj Hindustan Ltd. (ITAT Mumbai)- There is not dispute that the payment in question made by Assessee to KPMG is in respect of services which otherwise fell within the definition of FTS as given in the Act. The dispute is whether the exceptions mentioned in clause (b) to Sec.9(1)(vii) of the Act would apply so that it can be said ...

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Income of non-resident attributed to its PE in India taxable as business profits; balance income not to be taxed as fee for technical services – ITAT Mumbai

Nippon Keiji Kyokoi Vs ITO (ITAT Mumbai)

Nippon Keiji Kyokoi Vs ITO (ITAT Mumbai)- Notwithstanding a change in the position by the assessee, the Tribunal has held that the effective connection with the permanent establishment in India has to be determined based on a functional test in the case of fees for technical services . Furthermore, the Tribunal also upheld that if the se...

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Expenditure incurred by the assessee-company, incorporated for carrying out the business of the BPO, prior to the setting up of business, cannot be taken into account for computing the business income

ITO Vs Omni Globe information Technologies India (P) Ltd. (ITAT Delhi)

ITO Vs Omni Globe information Technologies India (P) Ltd (ITAT Delhi)- Business is set up when it reaches a stage where it is in a position to procure business and not before. However, the expenditure becomes deductible from such stage, irrespective of the date of actual receipt of the business. The assessee-company had been incorporated...

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ESOP Holding period to be reckoned from the date of exercise of option to buy shares and not from the earlier date of grant of options

ACIT Vs Pramod H. Lele (ITAT Mumbai)

ACIT Vs Pramod H. Lele (ITAT Mumbai)- The Stock Option Plan had granted only an 'option to buy' a specified number of shares in a specified timeframe at a specified price, subject to the fulfilment of other conditions set out in the plan. There was no compulsion on the part of the assessee to acquire the shares. In other words, the Stock ...

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Amendment brought to cast TDS liability on individuals and HUF u/s. 194C do not applies to AY 2007-08

Shri Prashant H Shah Vs ACIT (ITAT Ahmedabad )

Shri Prashant H Shah Vs ACIT (Ahmedabad ITAT)- It is further important to mention that vide an amendment with effect from 1/6/2007 an individual or HUF have also been inducted vide sub-clause (k) in section 194C(1) of the IT Act. At this juncture, it is worth to hold that as far as the AY in hand is concerned, i.e. AY 2007-08, this latest...

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Scope of DRP is restricted only to adjustments proposed in the draft assessment order and not beyond

GE India Technology Centre Pvt. Ltd. Vs DRP and ACIT (Karnataka High Court)

High Court held that the scope of powers of the Dispute Resolution Panel (the DRP) under Section 144C of the Income-tax Act, 1961 (the Act) is restricted to dealing with only those issues in respect of which variations are proposed as per the draft assessment order and not beyond....

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DCIT Vs M/s Aban Offshore Ltd (ITAT Chennai)

The Deputy Commissioner of Income Tax Vs M/s Aban Offshore Ltd. (ITAT Chennai)

DCIT, Chennai Vs M/s Aban Offshore Ltd (ITAT Chennai) - Whether disallowance u/s 40(a)(ia) is warranted for deduction of tax @ 1% on subcontract where the sub-contract is entered into to fulfill the conditions of the main contract and the same is not independent to the main contract ?...

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Reassessment after four years on change of opinion not valid

CIT, Chennai Vs M/s Simpson & Co. (Madras High Court)

CIT, Chennai Vs M/s Simpson & Co. (Madras High Court)- There must be a nexus between the material at the hands of the Officer and formation of belief that there was escapement of wealth from assessment on account of the failure of the assessee to disclose fully and truly, all material facts. In the absence of any nexus or any one of the ...

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Provisions of Section 72A would be applicable only when ‘amalgamating company’ and not ‘amalgamated company’ has accumulated losses

Wrigley India Private Ltd. Vs ACIT (ITAT Delhi)

Wrigley India Private Ltd. v ACIT (ITAT Delhi)- Whether the Tax Officer has, inter alia, erred in disallowing the claim of brought forward losses and unabsorbed depreciation of the Taxpayer post amalgamation? The Tribunal agreed with the position taken by the Taxpayer by holding that: – The conditions specified in Section 72A(2) of the ...

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