section 80HHC, Deduction under Section 80HHC, Bombay High Court, export turnover,deduction under section 80HHC
Although Circular has been issued for the purpose of non- seizure of jewellery during the course of search, the basis for the same recognizes customs prevailing in Hindu Society. In the circumstances, unless the revenue shows anything to the contrary, it can safely be presumed that the source to the extent of the jewellery as stated in the Circular stands explained.
The contract may be in writing or it may be oral but the liability to pay tax arises when the recipient of the said amount receives payment in excess of Rs. 20,000.
The Tribunal was correct in holding that consideration paid by the assessee to certain American Company for providing technicians to train assessee’s personnel in manufacturing, testing, inspection and quality control of its products and to impart know-how and technical data and suggest improvements thereto, did not fall under section 35AB, but was entitled to total relief under section 37(1)
CIT vs. Kalpataru Colours and Chemicals (Bombay High Court)- S. 28 (iiid) provides that “any profit on the transfer” of the DEPB shall be business profits. Under Explanation (baa) to s. 80HHC, 90% of “the sum referred to in s. 28(iiid)” has to be reduced from the business profits. Under the third Proviso to s. 80HHC (3), in the case of an assessee having an export turnover exceeding Rs. 10 crores, the profits referred to in s. 80HHC (3) can be increased by 90% of “the sum referred to in s. 28 (iiid)” only if two conditions are satisfied.
Whether the liability has been deferred or not has to be considered not from the simplistic point of the term ‘defer’ but in context of the incentive scheme for deferral, as is evident from the circular issued by Central Board of Direct Taxes. The subject matter of Circular no.496 dated 25th September, 1987 is Sales Tax Deferral Scheme and applicability of provisions of section 43B of the Act.
There was no transfer of copyright or the right to use the copyright by the foreign company to the tax payer and therefore the payment would not fall within article 13(3)(c) of the Tax Treaty. The reference in Article 13(3)(c) is to “any copyright” and it is not a reference to “any right”. Hence, the payment cannot be said to be in the nature of royalty payment.
A plain reading of Section 76 of the Act indicates that a person who is liable to pay service tax and who has failed to pay such tax is under an obligation to pay, in addition to the tax so payable and interest on such tax, a penalty for such failure. The quantum of penalty has been specified in the provision by laying down the minimum and the maximum limits with a further cap in so far as the maximum limit is concerned.
This decision of the HC reiterates the principle of the binding nature of an AAR ruling and clarifies that a subsequent adverse AAR ruling in respect of another taxpayer, even if given under comparable facts, cannot disturb this position. An AAR ruling continues to be binding unless there is a change in law or facts, which would require the Tax Authority to follow the procedure provided in the ITL. Also, the HC has clarified that the CIT cannot invoke its revisionary jurisdiction to set aside an order passed by a subordinate tax officer who follows a binding AAR ruling.
It is not in dispute that the activity of the assessee is of property promoter. As the property in the hands of the assessee was treated as business asset and not as capital asset, there is no question of invoking the provisions of section 50C of the Act. Section 50C of the Act pertains to determining the full value of the capital asset. The appeal is, therefore, dismissed.