In this case, the matter was not referred by the A.O. to the DVO. We, therefore, set aside the order of the Ld. CIT (A) and restore the issue of valuation to the file of the A.O. with the direction to refer the same to the DVO in the light of our above observations.
It is seen from the methodology that the assessee takes into account the warranty liability for the accounting period after bifurcating the likely cost on account of labour, material etc. The summary of the provision also shows that wherever excess provision was made in an earlier year, the same was reversed in the subsequent period.
Commission paid to the credit card companies cannot be considered as falling within the purview of S.194H. Even though the definition of the term commission or brokerage used in the said section is an inclusive definition, it is clear that the liability to make TDS under the said section arises only when a person acts behalf of another person.
In the instant case, what transferred by the assessee are the shares in the company and not the land or building or both. Assessee does not have full ownership on the flats which are owned by the company. The transfer of shares was never a part of the assessment of the Stamp duty Authorities of the State Government.
As regards the payments of Rs.20,000/- or more, the assessee has not substantiated his claim that the payments of Rs.20,000/- or more with regard to the purchases were made for Rs.20,000/- or less before the AO. It is also not on record whether such claim was actually made before the AO or not. With regard to the claim before the ld. CIT(A), all the vouchers are self made vouchers and without any authenticity of the name and complete address of the recipient. From the claim of the assessee before the ld. CIT(A), the payments are claimed to have been made on different hours on the same day and accordingly on different dates.
If a certain receipt cannot be taxed under any other head, only then the sections dealing with ‘Income from Other Sources’, come into play in domestic taxation matters. Likewise, under the DTAAs, if a sum can be taxed under any other Article, provisions of Article 22 will not be applicable. We are of the opinion, in light of the earlier decisions of the Mumbai Tribunal income received by the assessee-company form McKinsey India is not to be treated as Royalty-rather it has to assessed as business income as per Article 7 of the DTAA.
As far as the provisions of the Act are concerned, they lay down that the comparable companies should be functionally comparable to the tested party. There are no specific standards of comparability on the basis of abnormal profits or loss. Rule 10B(2) provides that the comparability of an international transaction with an uncontrolled transaction shall be judged with reference to the following, namely:-
Certain intangible assets on which depreciation could be claimed are – knowhow, patents, copy rights, trade marks, licenses, franchise or any other business or commercial rights of similar nature. This expression “any other business or commercial rights of similar nature” by itself would mean to include all kinds of commercial rights.
In the case before the Kerala High Court, the question arose for consideration was whether a transport contract for mere carriage of goods without loading and unloading facility would amount to carrying out any work within the meaning of section 194C(1) of the Act.
Requirement of section 143 (2) cannot be dispensed with as it is mandatory and therefore, the notice under section 143 (2) issued after the expiry of prescribed period is an uncurable defect and consequently, the block assessment is erroneous and not sustainable.
