"January, 2016" Archive

Denial of exemption U/s. 11 to the total income of a trust, in view of violation of section 13(1)(c) / 13(1)(d), is not legally tenable

Section 11 of the Income-Tax Act, 1961 (the Act) excludes from the income of charitable or religious trusts, income to the extent it is applied towards the objects of such trusts, during the previous year in India. It may be stated here that there are several conditions laid down under section 11 of the Act, for the purpose of claiming ex...

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Posted Under: Income Tax |

Charitable/ Religious Trust: Depreciation allowable as deduction in income computation

In this regard it may be stated that in the case of a charitable / religious trusts, even capital expenditure is considered as application of income towards the objects of the trust. Therefore, it is the view of the Assessing Officers that if depreciation is allowed on the assets of such a trust, then the same will lead to double deductio...

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Posted Under: Income Tax |

AO cannot straight away apply rule 8D, without considering claim of assessee U/s 14A(2)

It has been observed that for the purpose of disallowance of expenditure under section 14A of the Income-Tax Act, 1961 (the Act), in respect of income exempt from tax, the Assessing Officers (AOs) have been following a totally erroneous method of straight away applying rule 8D of the Income-Tax Rules, 1962 (the Rules), without considering...

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Posted Under: Income Tax |

Education cess is not an allowable deduction U/s. 37(1) of I.T.Act, 1961

Sometime back, one of my clients approached me with a query whether education cess presently charged along with the income-tax and surcharge, could be claimed as a deduction under section 37(1) of the Income-Tax Act, 1961 (the Act). The aforesaid query was raised, because some Income-Tax Advisor provided the aforesaid client with an Opini...

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Posted Under: Income Tax | ,

Assessee making periodically RBI approved royalty payments to its AE, TPO not justified in determining ALP at Nil

Dy. Commissioner of Income Tax Vs M/s. Kirby Building Systems (ITAT Hyderabad)

The assessee-company was engaged in the business of manufacture of pre-engineered building system products. During relevant year, assessee entered into international transactions with its AE situated in Kuwait....

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India- USA DTAA: Settlement amount against surrender of right to sue, not in nature of future income compensation is not assessable as income: AAR

Aberdeen Claims Administration Inc., USA and Aberdeen Asset Management Plc., UK, In re (Authority for Advance Rulings)

Authority for Advance Rulings held In the case of Aberdeen Claims Administration Inc., USA and Aberdeen Asset Management Plc., UK that there is no doubt that the settlement amount is relatable to Satyam shares...

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Being original contract and amendments inextricably linked with business of exploration of minerals, assessable u/s 44BB – AAR

Aker Contracting FP ASA, Norway, In re (Authority for Advance Rulings)

Authority for Advance Rulings held In the case of Aker Contracting FP ASA, Norway, USA that it is beyond doubt that the consideration received as per amended order is similar to consideration received as per original contract....

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Settlement amount against surrender of right to sue, not chargeable to tax either as capital gain or income from other sources – AAR

Lead Counsel of Qualified Settlement Fund (QSF), USA, In re (Authority for Advance Rulings)

Authority for Advance Rulings held In the case of Lead Counsel of Qualified Settlement Fund (QSF), USA, that it is clear that even if right to sue is considered as capital asset covered under the definition of transfer within the meaning of section 2(47), its cost of acquisition cannot be determined....

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Transfer of shares of Indian company to Singapore Company, by a Mauritius company having no PE, not taxable in India- AAR

Dow AgroSciences Agricultural Products Ltd, Mauritius, In re (Authority for Advance Rulings)

Authority for Advance Rulings held In the case of Dow AgroSciences Agricultural Products Ltd, Mauritius that the Article 13 of the Indo-Mauritius DTAA which deals with the taxation of capital gains is not applicable in the present case....

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India- Singapore DTAA – Installation project less than 183 days not constitute PE, income not taxable in India– AAR

Tiong Woon Project & Contracting (Pte) Ltd. Singapore, In re (Authority for Advance Rulings)

Authority for Advance Rulings held In the case of Tiong Woon Project & Contracting (Pte) Ltd. that the department has correctly provided a positive response that because the project was continued in India only for 178 days in a fiscal year...

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