The proviso to Section 245R(2) of the Act creates a bar upon the AAR to admitting an application (for advance ruling); it is also is a jurisdictional bar to the Authority to rule, under Section 245R(4). The proviso to Section 245R(2) of the Act creates a bar to the jurisdiction of the Authority if it is seen that any of the conditions are fulfilled. The rationale for the bar appears to be straightforward;
To implement the objects of the company two of the shareholders gifted 25000 shares of M/s. Infosys Technologies Limited. The said shares were shown as investment. Merely because the company has earned profits by selling some of the shares, that doesn’t mean that the company is engaged in shares trading.
Question No. 2 is whether even otherwise the transaction will stand outside section 45 of the Act in view of the section 47 (iv) of the Act. In the light of the Ruling on question No. 1, this question may have no efficacy. Counsel argued that an earlier Ruling rendered by this Authority In re RST (AAR No. 1067 of 2011) requires reconsideration.
The Tribunal does not state that the material, including the comparables, furnished by the assessee was inadequate. The department also does not contend that the comparables were inadequate. They have analyzed the same in a particular manner whereas the Commissioner (Appeals) has analyzed the same in a different manner. In other words, the revenue has not contended and the Tribunal had not held that the relevant comparables are insufficient.
The question as to whether the expenditure would fall for consideration under section 35AB or the question as to whether the expenditure is on account of revenue or capital has to be decided by taking note of the facts and circumstances leading to the said expenditure. As pointed out by the Bombay High Court, in the case of CIT v. Kirloskar Tractors Ltd.[1998] 98 Taxman 112, in order to arrive at a just and proper conclusion, one must look at the nature and character of the advantage in a commercial sense having regard to the purpose of the outlay and its intended object and effect. As pointed out by High Court if the expenditure is for carrying on or conduct of the business, then it may be regarded as an integral part of the profit making process, and the expenditure qualifies for being considered as a revenue expenditure.
According to the applicant, the merger and consequent transfer of all assets and liabilities did not generate any gain. The applicant was in involved circumstances. That is why the merger with the parent company was thought of. On a merger, the transfer or is effaced. The transaction undertaken is apparently one sanctioned by Swiss law. The gain if any in this case is not determinable within the scope of section 45 and section 48 of the Act as postulated in the Ruling in Dana Corporation (AAR No.788 of 2008). On a consideration of the facts obtaining in this case, I am of the view that no capital gain chargeable to tax under the Act in terms of section 45 read with section 48 can be said to arise.
The services rendered by the applicant are technical in nature and do not fall within the exception provided in the definition of FTS since the applicant has not actually carried out any mining or like project. It can at best be said that the services were rendered “in connection with” the mining activity undertaken by the Indian Companies. The applicant cannot be taxed under section 44BB since it had merely contracted to render some prospecting services through a sub-contractor in India.
Easing of business environment mandates extensive examination of regulations in different areas of root functioning such as financial reforms, governance reforms, liberalized policy framework, process reforms, etc.,. Thus there is a need to conduct an in-depth study into the entire gamut of regulatory framework and come out with a detailed road-map for improving the climate of business in India in a time bound manner. Such an exercise needs to be undertaken for periodical improvement in the ranking, leading to a situation where India gradually moves towards upward position with almost zero hassles.
in this case Ld.CIT(A) has in fact restored the matter to the file of the Assessing Officer for re-consideration and verification from the bank about the amount of actual cessation which amounts to setting aside the matter to the file of the Assessing Officer, and such action is beyond the powers confirmed upon the Ld.CIT(A) while dealing with appeal. So, action of the CIT(A) to this extent being not justified is set aside.
It is clear that for invoking the proviso to section 147 beyond the period of four years, there must be failure on the part of the assessee to either make a return under section 139 or in response to a notice under section 147/148 or to disclose fully and truly all material facts necessary for the assessment for that assessment year.
