"24 January 2016" Archive

Valuation of flats for levy of service tax given to land owners in redevelopment by builder/developer/contractor

In a tri-partite construction business model, there are 3 parties involved: i) The land owner; ii) The Builder/developer & iii) The contractor (who undertakes the construction). Typically, in such a model, the land owner enters into an agreement with the builder, whereby, the land owner gives either land/development rights (to construct/d...

Posted Under: Service Tax |

Settlement Commission has no jurisdiction to direct special audit as no nexus with settlement proceedings

Agson Global Pvt Ltd & Ors Vs Income Tax Settlement Commission & Ors (Delhi High Court)

Delhi High Court held In the case of Agson Global Pvt. Ltd. & Ors vs. Income Tax Settlement Commission & Ors that the powers and functions of an income tax authority which are to be exclusively exercised by the settlement commission must be in the context of and have a nexus with the settlement proceedings....

Interest on idle funds mainly brought for capital expansion can be set off against pre-operative expenses

Principal CIT Vs Facor Power Ltd (Delhi High Court)

Delhi High Court held In the case of Principal CIT vs. Facor Power Ltd. that no substantial question of law arises for our consideration. This is so because, the Tribunal has correctly placed reliance on the decision of this Court in Indian Oil Panipat Power Consortium Limited [2009 315 ITR 255 (DEL). ...

Unascertained liability can be claimed as expense if estimated reasonably in mercantile system of accounting

M/s. Aggarwal And Modi Enterprises (Cinema Project) Co. Pvt. Ltd Vs CIT (Delhi High Court)

Delhi High Court held In the case of M/s. Aggarwal And Modi Enterprises (Cinema Project) Co. Pvt. Ltd Vs. CIT that whether a liability is ascertained or contingent is dependent on the facts of each case. Merely because a liability may be contractual or non-statutory would not make it incapable of being ascertained. ...

Purchase of software as a product being a transaction of sale, payment cannot be considered as royalty

Principal CIT Vs M. Tech India Pvt. Ltd. (Delhi High Court)

Delhi High Court held In the case of Principal CIT vs. M. Tech India Pvt. Ltd that in cases where the payments are made for purchase of software as a product, the consideration paid cannot be considered to be for use or the right to use the software....

Penalty u/s 271C not maintainable in absence of contumacious conduct by assessee – SC

CIT Vs Bank of Nova Scotia (Supreme Court of India)

Supreme Court held In the case of CIT vs. Bank of Nova Scotia that there is no substantial question of law, the facts and law having properly and correctly been assessed and approached by the CIT (A) as well as by the ITAT that for levy of penalty u/s 271C...

What’s Up of Tax in, “Start Up”

CA Umesh Sharma Arjuna (Fictional Character): Krishna, Government of India has come up with the scheme of “Startup India” on the eve of Republic Day. On the Republic day as we see the parade and various “Presentations” on Rajpath, likewise what will be different in the presentation of “Startup India” scheme in a Tax parade? [&...

Posted Under: Service Tax |

Special Procedure for Assessment of Search Cases

The Finance Act 1995 has introduced a new chapter XIV-B in the IT Act with a view to providing a special procedure for assessment of search cases with effect from 1.7.1995. As per the Memorandum explaining the provisions of the Finance Bill 1995, in the old Scheme; valuable time was lost in trying to relate […]...

Posted Under: Service Tax |

Educational and Medical Institutions – Heed the wake-up call!

The Finance (No.2) Act 1998 has made far-reaching changes in the provisions of Income-Tax Act 1961 relating to the taxation of educational and medical institutions. The reasons for the same, as stated in the Finance (No.2) Bill 1998, are as follows:...

Posted Under: Service Tax |

Tax on Compensation for Breach of Contract For Sale of Land

COMPENSATION BY WAY OF DAMAGES FOR BREACH OF CONTRACT FOR SALE OF LAND –WHETHER LIABLE TO INCOME-TAX? The expression ‘contract for sale’ is defined in S.54 of the Transfer of Property Act (T.P. Act). As per S.54 of the T.P. Act, a contract for the sale of immovable property is a contract that sale of such property shall take place ...

Posted Under: Service Tax |

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