Recently Delhi High Court in the case of Areva T&D vs. ADIT ruled that the Revenue can reopen the assessment proceedings on change of opinion that the income of the assessee has escaped assessment. Such re-opening of the assessment by the Income Tax department is legal where no return has been filed by the assessee for the assessment year in dispute, high court said.
Delhi High Court (the High Court) in case of DIT v. SNC Lavalin International Inc [2011] 332 ITR 314 (Del) held that fees received by the taxpayer for providing technical drawings and reports in relation to infrastructure projects would qualify as Fees for Included Services under India-Canada tax treaty (tax treaty). Accordingly, tax was to be deducted at 15 percent on payments made to the taxpayer. Further, the High Court observed that the term transfer as used in Article 12(4) of the tax treaty does not refer to absolute transfer of ownership; but refers to transfer of technical drawings or designs for the use or the benefit of other party.
With respect to the Scheme, the tax department had raised similar objections before the Gujarat High Court, which after considering the contentions of both, the tax department and the petitioner company had dismissed the petition thereon. The petitioner has filed an appeal against the order of the Gujarat High Court and the same is pending before the Division Bench. The Delhi High Court, contrary to the order of the Gujarat High Court, has relied on settled judicial precedents and has passed the order sanctioning the Scheme.
Penalty under s 271FA – Failure to file annual information return — The penalty under s 271FA is leviable if the assessee fails to respond to the notice for failure of filing annual information return — as held by Gujrat High Court in Patan Nagrik Sahakari Bank Ltd v DIT(CIB); Special Civil Application No. 14675 of 2010, 22 April 2011
Shree Bhagawathy Textiles Ltd. v. Asstt. CIT – If the assessee has made a claim of deduction from this profit not enumerated in the clauses (i) to (ix) covered by Explanation to section 115JA, the assessment so completed based on the profit taken from the profit and loss account appropriation account submitted by the assesseee happens to be an apparent mistake which could having satisfied on the factual mistake committed by the assessing officer in the original assesment, rightly upheld the revised assessment issued under section 154 by reversing their earlier order.
S E Investments Limited Vs Union of India and Others- The Delhi High Court held that there is no provision for charging stamp duty on the increase in authorized stamp duty in Stamp Act. A statute authorizing the levy of stamp duty is in the nature of a fiscal statute, hence stamp duty cannot be levied except by the authority of law. The High Court placed reliance on the Supreme Court of India judgment in the case of AV Fernandez vs. State of Kerala (AIR 1957 SC 657) and
Exchange traded derivative transactions carried on by the assessee during AY 2003-04 are speculative transactions covered under Section 43(5) of the Act and the loss incurred in those transactions are liable to be treated as speculative loss and not business loss. We further hold that clause (d) inserted to the proviso to Section 43(5) with effect from 1/4/2006 is prospective in nature and the ITAT was in error in holding that clause (d) to the proviso to Section 43(5) applied retrospectively so as to apply to the transactions carried on by the assessee during AY 2003-04. CIT vs. Bharat R. Ruia (Bombay High Court)
The assessee is engaged in the manufacture of goods and availed Cenvat credit on Inputs/Capital goods/Input services under the provisions of Cenvat Credit Rules. During the course of audit it was found that the assessee had availed Cenvat credit of Rs. 5,45,460/- for the service tax paid by the assessee on the transportation charges incurred by them towards the outward transportation of goods cleared by them at their factory gate.
Pannalal Kejriwal Vs CIT (Calcutta High Court)- Whether in the facts of the present case the transactions relating to the shares of ITC Ltd. and Tata Tea Ltd. on behalf of the two partners where the assessee-firm apparently acted as broker could be said to be the transaction on behalf of the assessee-firm itself and the profit of the two partners can be added to the income of the assessee-firm.
Cadila Pharmaceuticals Limited. vs Sami Khatib Of Mumbai (Medley Pharmaceuticals Limited). A division bench of the Bombay high court last week dismissed the appeal of Cadila Pharmaceuticals against the judgement of a single judge bench restraining Cadila from manufacturing, marketing or exporting medicinal preparations under the trade mark “Hb TONE”/ “HB TONE” or any other mark deceptively similar to the trademarks of another company, Medley Pharmaceuticals, namely “ARBITONE”, “RB TONE” or “HB RON”. The complaint was that Cadila was “passing off” the products with similar names.
