The assessee had filed and furnished all details and particulars relating to the royalty payment including agreements, calculation and the approval before the Ld. AO during assessment proceedings. There was no failure on the part of the assessee to furnish true and correct all material facts. The facts were available before and were within the knowledge of the AO. The new AO as per the reasons recorded on the basis of the same facts, has observed that royalty payment should have been disallowed as it was capital in nature. This is a question of legal inference or interpretation which has been drawn from the same material facts on record. Therefore, the case falls in the category of change of opinion as at the time of original preceding the AO examined and gone into the question of royalty. Even if there was any legal error or illegality the same cannot be rectified and be made the subject matter of reassessment proceedings u/s 147/148 of the Act. The re-assessment order is also quashed.
Learned Central Government Standing Counsel submitted that the award so far as the upholding the claims under claim Nos.8 to 75 are not seriously opposed and it need not be set aside, urging that the challenge to the award on the ground it is opposed to public policy is against the awarding of claims under 1 to 7, we are not impressed by that submission. When the award is found to be void as opposed to public policy no question of segregation of any part of the award would emerge for consideration
What is prohibited and barred is application of income or use of the property of the institution directly or indirectly for benefit of a person mentioned in Section 13(3) i.e. he is paid beyond what is reasonable, adequate, commensurate and justified for the services rendered or goods supplied. The said person should not profit at the expense of the trust/institution. Charity should not become the primary or important source of business profits and a façade to promote business interest or secure advantage, for persons mentioned in Section 13(3) in the name of charity. The word “benefit” need not be restricted to direct material benefit, but is of wide significance comprehending whatever would be beneficial in any respect, materially or otherwise. Benefit can be pecuniary or non pecuniary. This would be the correct legislative intent.
Once it is held that the office of a chartered accountant or of a firm of chartered accountants does not come within the expression of shop or commercial establishment as defined in the Act of 1961, the corollary would be that the provisions of the Act of 1961 cannot be applied to the office of a chartered accountant or of a firm of chartered accountants.
The Principal Judge, Small Causes Court, Pune, and thereafter the District Judge, Pune, negatived the contention of the Corporation holding that profession of Chartered Accountant is neither a trade nor a business. Advocate for the Respondents drew my attention to the judgment reported in Current Tax Reporter Volume 80 Phillipos & Company, Chartered Accountants & Ors. versus State. This is the Judgment of the Karnataka High Court, wherein it is held that Office of the Chartered Accountant or of a firm of a Chartered Accountant is not an establishment within the meaning of Section 2(i) of the Karnataka Shops and Commercial Establishments Act, 1961, it is neither a shop nor a commercial establishment.
It cannot be said that all tax planning is illegal/ illegitimate/impermissible. Applying the rationale of this decision to the case on hand, in the absence of any material to pronounce on the genuineness of the transaction herein, the mere fact that what had been purchased had been leased out to the vendor or that vendor had undertaken to pay the hire charges on behalf of the assessee to the hire purchase company, per se, cannot lead to a conclusion that the transaction is a sham one. In the circumstances, even invoking the decision in McDowell case, we do not find any ground to accept the plea of the Revenue that the claim of the assessee has to be rejected as a sham one.
CIT v. Shravanee Constructions (Karnataka High Court) Section 80-IB(10) of the Act is applicable not for merely building housing project but for developing and building housing project. In terms of the agreement, the taxpayer not only undertook the development activities on the land in question, but in fact the taxpayer entered into an agreement of sale with the owners of the land, paid the entire consideration. However, it did not execute a registered sale deed in its name. Thus, the Assessee contributed the land.
Receipt of the impugned amount was on account of part services rendered by the assessee to his previous foreign employer outside India. Under section 5 of the I.T. Act, the total income of any previous year of a person who is a resident includes all incomes from whatever source derived, which is received or deemed to be received in India in such year by or on behalf of such person; or accrues or arises or is deemed to accrue or arise to him in India during such year; or accrues or arises to him outside India during such year.
TDS on the charges you pay to a Barber? The word ‘carrying out any work’ in section 194C is limited to any work which on being carried out culminates into a product or result. The word ‘work’ in s.194C is limited to doing something with a view to achieving the task undertaken or carry out an operation which produces some result. The facilities/amenities made available by a hotel to its customers is not covered under any of the categories specified in the term ‘work’ in Explanation III to section 194C; consequently, the Circular No.681, dated 08-03-1994 to the extent it holds that the services made available by a hotel to its customers are covered u/s 194C must be held to be bad in law.
The order of Sh. K.S.Mohi basically implements the resolution of DDCA dated 1.3.2007 and on which aspect I have already commented above that there is absolutely no resolution whatsoever dated 1.3.2007 and if even there is such a resolution, the same will be an illegal resolution because the same amounts to an amendment of the Memorandum of Association or Rules without prior sanction/approval of the Central Government as required under Section 25 of the Companies Act, 1956, the license granted to the DDCA and as duly incorporated in Clause 4(vii) of the Memorandum of Association.Therefore, the order dated 12.4.2007 cannot bind the appellants/plaintiffs either on principle of res judicata or because there is no resolution dated 1.3.2007 of DDCA on which the order was passed, or on the ground even if there is a resolution dated 1.3.2007, the said resolution would be an illegal resolution in the absence of any prior sanction or approval from the Central Government.
