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In this case, the return of income was filed under section 139 (1) on 31.10.2001. The same was processed under section 143(1)(a) of the Income-tax Act. There was no scrutiny assessment under section 143(3) of the Income-tax Act. The reassessment proceedings u/s 147 was initiated by issuing notice u/s 148 on 28.03.2008 by recording the reasons. The reopening proceedings were initiation on the information received from Investigation Wing that assessee has received accommodation entries during the year. Thus, the Assessing Officer had considered the information received form investigation wing and has formed an opinion on the basis of that material and then initiated the proceedings for reassessment.
The assessee was regularly employing the method of valuation for valuing the stock at cost or net realizable value whichever is less. By shifting to a new ERP package, for example, SAP 2 worked out the value of the stock at cost, any reduction in the valuation of the stock is not permitted in law. The assessee’s claim that the regularly employed method means change method should be adopted in subsequent years is also untenable. The regular employed method by the assessee must have been followed in the past years which is continued to be followed in the subsequent years. Considering the totality of the facts of the case and considering the case laws relied upon, we find no fault in the orders of the authorities below.
Indisputably, the ld. CIT(A) considered additional material in relation to two comparables and that of the assessee, which was not available before the TPO/AO. Apparently, the ld. CIT(A) did not follow the procedure laid down under Rule 46A of the IT Rules,1962 nor allowed any opportunity to the AO. The powers of the CIT(A) to admit additional evidence are not only in situations where the evidence could not be produced before lower authorities owing to lack of adequate opportunity but also in situations where the fresh evidence would enable the CIT(A) to dispose of the appeal or for any other substantial cause.
The CBDT Chairman-led committee on combating the menace of black money has been given yet another extension and it is now expected to submit its final report by this month end. It is the third time that the deadline has been extended for the panel, which was constituted in May last year.
Parallel to the great upsurge another factor that hunting the board room of the corporate are “Risk”. There can be any type of the risk whether it is liquidity risk, fraud risk, reputation risk, competition risk and sundry other risks. Thus the internal audit profession has witnessed a sea change in the era, a change from traditional typical ‘compliance’ or ‘transaction’ audit to the much more dynamic and interest based ‘Risk based audit’. It can be also define as control assessment or control rationalization. It is much more different from the traditional internal audit, which is just related to compliance and bothers the employees of the organization as it is not give any productivity or return to the organization or auditee. Now a day, the internal audit is turned in to risk assessment mechanism which provide analysis of risk evolved in any business activity. Along with that it also refers to the assessment of the control and rationalization of the authorities. It involve whether the proper person has a proper job.
AAR held that the payment for mobilization and de-mobilization is related to use of equipment for undertaking installation work and taxable as royalty under Article 12(3)(b) of the India-Singapore tax treaty (tax treaty). Further as installation is ancillary and subsidiary to the use of equipment or enjoyment of the right for such use, the payment for installation is taxable as Fees for Technical Services (FTS) under Article 1 2(4)(a) of the tax treaty. The AAR also held that the applicant has provided services or facilities in connection with the exploration, exploitation or extraction of mineral oils for more than 183 days during the Financial Year (FY). Therefore, the applicant has a Permanent Establishment (PE) in India under Article 5(5) of the tax treaty and covered by Section 44BB of the Income-tax Act, 1961 (the Act).
Travelling expenses have been incurred in connection with technical services agreement. Therefore, the expenditure has been incurred for earning royalty/FTS. In spite of the fact that the agreement provides inter-alia for adequate level of support and posting its personnel, the expenses for which will be reimbursed, the fact remains that the expenditure has been incurred for earning the royalty/FTS. The expenditure is that of the assessee and not that of the Indian subsidiary company. Article 12 provides for taxation of royalty/FTS in the source country on gross basis at a concessional rate of tax. This means that the expenditure incurred for earning royalty/FTS is not deductible in computing gross royalties or gross FTS received by the assessee company. The assessee has found that taxation under the Income Tax Act, 1961 is not more beneficial to it. Therefore, the receipts have been offered for taxation under Article 12 of the DTAA.
There is no dispute to the fact that the expenditure on horticulture and other heads was incurred for the purpose of business. The assessee has also furnished necessary details pertaining to such expenses incurred. Similar expenses were also allowed by the department in the last year. The Assessing Officer had disallowed the entire expenditure on horticulture and out of other heads, i.e. business promotion, consumable stores, miscellaneous expenses and repairs & maintenance only on the ground that the expenditure incurred in the year under consideration are on the higher side.
according to the provisions of sub-section (3) to Section 12AA, even after grant of registration, if the Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, he is empowered to pass an order in writing canceling the registration of such trust or institution after giving the assessee a reasonable opportunity of being heard.
Supreme Court in Bhatinda District Co-op. Milk Producers Union Ltd. [2007] 9 RC 637 ; 11 SCC 363 action must be initiated by the competent authority under the Income-tax Act, where no limitation is prescribed as in section 201 of the Act within that period of four years. In Van Oord ACZ India (P) Ltd. v. Commissioner of Income-tax 323 ITR 130 (Del), the Hon’ble Delhi High Court had approved the view expressed by the Special Bench in the case of Mahindra & Mahindra Ltd. (supra).
