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Income Tax department cannot dictate Assessee whether or not to incur expenditure. Arm’s length price of royalty expenditure not to be linked with profit/income resulting therefrom. Losses are not a valid ground to disallow royalty expenditure. CIT VS. EKL APPLIANCES LTD (Delhi HC)
Rates of Taxes -The basic exemption limit of resident women below the age of 60 years may be increased to Rs.2,25,000. The basic exemption limit of resident individuals of the age of 60 years or more at any time during the previous year may be increased to Rs. 3,00,000.Amendment in Section 9(1) -(a)(i) It is suggested that Explanations 4 and 5 to section 9( 1)(i) and other consequential amendments in sections 2(14) and 2(47) may be given effect to prospectively, i.e. with effect from A.Y. 2013-14, to avoid undue hardship to tax payers consequent to which penalty proceedings may be attracted for –
The Study Team will examine the feasibility and also suggest a draft Common Tax Code for service tax and central excise that can be implemented under the present Constitutional scheme, keeping in view the challenges in the context of impending Goods and Service Tax (GST). The Study Team has also been directed to address issues relating to input tax credits with a view to simplify the existing scheme and to mitigate cascading to the extent possible, and to harmonize existing procedures and processes to make them more trade-friendly. The Study Team may also suggest any other measure that will help in reducing the cost of compliance for business or transition towards a comprehensive GST.
SUMMARY OF MISTAKES IN THE CA FINAL NOVEMBER 2011 EXAMS CONDUCTED BY INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA (A BODY ESTABLISHED UNDER THE ACT OF PARLIAMENT) (Mistakes /Errors committed by respondent 2 while setting and evaluating the papers which would have a direct impact on the marks obtained by the students)
Whether when the assessee has significant interest in the business of the subsidiary and utilizes even borrowed money for furthering its business any disallowance can be made u/s 36(1)(iii).
Honourable ITAT held that income received by a Foreign University under affiliate agreement for providing distance educational courses in India is not taxable as Royalty under the India-USA tax treaty . Accordingly, the taxpayer was not required to withhold taxes while making payments to the foreign university.
Whether conversion of tenancy rights into ownership right falls under the realm of ‘transfer’ as envisaged in section 2(47) of the Act. The assessee was accepted as a tenant by the co-owners and as per the well settled law on this issue the tenancy cannot be equated with the ownership. The ownership is the bundle of rights but rights of the tenants are limited. Admittedly, the assessee’s tenancy was converted into ownership and that can be the subject matter of the capital gain as it is a ‘transfer’ within the meaning of section 2(47) r.w.s. 45 of the I.T. Act.
If TPO does not reject a comparable on the ground of functional incomparability then neither the AO or the revenue can take a plea of functional incomparability of the comparables chosen by the assessee in its TP Study. We are, therefore, of the view that the assessee’s operative margin has to be held as within the range of 5% of the arithmetic mean of 18.97% of comparable companies and the same has to be accepted as ALP. For the reasons given above, the addition made by the AO and confirmed by the DRP is directed to be deleted.
we are of the view that the principle of mutuality is fully applicable and the interest earned on the fixed deposits with the bank and other institutions is fully covered within the parameters of mutuality. We fully endorse the view taken by CIT(A) in the case of Hill Properties Ltd. ITA No. 6223, 6249/Mum/09, that the principle of mutuality cannot be destroyed simply because the funds were not parked with members but with third parties who are not members of the Society.
Delhi High Court has recently in a batch of appeals filed by the Income Tax Department against Escorts Heart Institute & Research Centre Ltd and their employee directors held, inter alia, that the assignment of the Keyman insurance policies taken by the Company in respect of the Directors, at the surrender value fixed by the insurer did not give rise to a taxable benefit in the hands of the Directors. Hence the difference between the premium paid by the Company and the surrender value was not taxable in the hands of the Directors.
