"30 December 2012" Archive

Liaison Office (LO) / Branch Office (BO) in India by Foreign Entities – Reporting to Income Tax Authorities

A. P. (DIR Series) Circular No.24 (30/12/2012)

RBI had mandated that Branch Offices (BO) / Liaison Offices (LO) are required to submit Annual Activity Certificate (AAC) from their Auditors to the Central Office / Regional Office of the Reserve Bank, certifying that the BO / LO has carried out only those activities which are approved by the Reserve Bank. With effect from February 01, 2...

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No Penalty for showing share trading income under the Capital Gains instead of Business

CIT Vs Amit Jain (Delhi High Court)

In view of this circumstance, that the assessing officer chose to treat the income under some other head cannot characterize the particulars or reported in the return as an inaccurate particulars or as suppression of facts. ...

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Partners Remuneration cannot be disallowed as excessive if within the limit prescribed under the Partnership deed and

CIT Vs M/s Great City Manufacturing Co. (Allahabad High Court)

Whether the provisions of section 40A can be applied, in case the section 40(b) had already been applied - Whether when the partnership deed is complete with regard to all the details regarding remuneration and salary etc, disallowance can be made on the basis that it was excessive - Whether remuneration to partners should be allowed u/s...

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Ship broker is not a commission agent and not liable to Service Tax

Interocean Shipping Company Vs Commissioner of Service-Tax, Delhi (CESTAT Delhi)

A ship broker, as the name itself suggests, is essentially a broker. Ship brokers are specialist intermediaries for negotiations between ship owner and charterers who use the ship to transport some cargo or between the buyers and sellers of the ship....

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No Service tax chargeable if services not rendered in India

Commissioner of Service-Tax, Chennai Vs Heidelberg India (P.) Ltd. (CESTAT Chennai)

Respondents are not liable to pay any service tax under reverse charge mechanism on the services availed by them from their parent company as they have not paid any remuneration for the training charges. If at all any charges were paid for training outside India is not chargeable to service tax as per provisions of Taxation of Services (P...

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Service tax Penalty to be waived off when there exists no mala-fide intentions of assessee for non-payment of ST

Hindustan Aeronautics Ltd. Vs Commissioner of Central Excise, Lucknow (CESTAT Delhi)

It is not disputed by the adjudicating authority that the appellants were in correspondence with the Ministry of Finance seeking exemption on the maintenance and repair services of aircrafts pertaining to Ministry of Defence. Such correspondence resulted in denial of said request for exemption by Ministry of Finance on 26.7.2005. ...

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Internet services fall in stipulated services for sec. 80-IA deduction

Essel Shyam Communication Ltd. Vs Commissioner of Income Tax (Delhi High Court)

The assessee holds a VSAT license to establish, maintain and operate closed users group, an Internet license to establish, maintain and operate internet services and a license/permission from the Ministry of Information and Broadcasting for providing uplinking services. ...

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Deemed dividend provision not applicable on loan received from company engaged mainly in lending business

Jayant H. Modi Vs Joint Commissioner of Income Tax (ITAT Mumbai)

As provided in the said clause, any advance or loan made by a company to a shareholder or concern in which the shareholder has a substantial interest would not be regarded as a deemed dividend u/s 2(22)(e) if lending of money is a substantial part of the business of the lending company and the loan or advance is made by the lending compan...

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Whether casual contract workers can be considered as regular workers u/s. 80-IB(2)

Hindustan Colas Ltd. Vs Assistant Commissioner of Income-tax (ITAT Mumbai)

The authorities below have held that the assessee had not fulfilled the conditions relating to the minimum engagement of workers and use of new plant and machinery in setting up of industrial undertaking as required in section 80-IB(2). ...

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Share premium cannot be stated to be commercial profits to apply deemed dividend provisions

Deputy Commissioner of Income Tax Vs Radhe Sham Jain (ITAT Chandigarh)

Hon'ble Supreme Court in case of P.K. Badiani v. CIT [1976] 105 ITR 642 observed that accumulated profits would mean profit in the commercial sense and not assessable taxable profits. In that case development rebate reserve created by the company by charging profit and loss account was held to be accumulated profits though the same was li...

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