Once the assessee has filed fresh appeal(s) memo which borne the signature in ink, date and place, etc., the CIT (Appeals) ought to have treated that defects removed.
How can the sale prices to wholesale agents in two different countries be comparable, when the sale price to the final user in the one country is less than the sale price to the whole sale agent in another country, unless adjustment for the same has been considered; thus, the adjustments merely for volume offtake, credit period and credit risk, though material are not sufficient to make the sale price to AE in Thailand comparable with the sale to unrelated party in Vietnam
Payment made to Avaya International Sales Ltd., Ireland (ASIL) in respect of activation charges is a payment for buying a standard product/software. The payment made to ASIL can neither be said to be as ‘Royalty’ nor is covered under the provisions of ‘Fees for Technical Services’. The assessee is not liable to deduct tax at source on the payment made to ASIL as the income of ASIL is not liable to tax in India for the above payment.
Mere tax residence certificate may not be the conclusive determinant of residential status of the Mauritius company. It may be essential to substantiate the residential status based on the place of effective management. Documents like board minutes etc would need to be authenticated by the government agency in Mauritius in order to be relied upon as evidence in case of dispute on place of effective management.
The Ruling recognizes that a partnership firm, albeit a fiscally transparent entity, can be regarded as an entity liable to tax and hence eligible for benefits under the DTAA. The Tribunal has also observed that the fiction of deeming the PE to be a distinct and separate enterprise is for the limited purpose of preventing the manipulations that may arise in intra-group transactions. The Tribunal has also held that income from services rendered offshore for Indian projects are taxable in India in the hands of the PE even if they are not directly connected to the PE by interpreting the “direct or indirect profits attribution rule” in the India-UK DTAA in a wide manner.
Genuineness of the gift transactions cannot be determined without looking into the human probability aspects, surrounding circumstances such as relationship of the donor and donee and if assessee fails to establish any of these facts, the gift transaction cannot be treated as genuine.
The expanding horizon of the principles of natural justice provides for requirement to record reasons as it is now regarded as one of the principles of natural justice, and it was held in the above case that except in cases where the requirement to record reasons is expressly or by necessary implication dispensed with, the authority must record reasons for its decision.
The eligibility for the claim of deduction u/s 80-IA by applying the restraints of Sec. 80-IA(3) cannot be considered for every year of the claim of deduction u/s 80-IA but can be considered only in the year of formation of the business.
Even if it is assumed that the assessee was authorized to collect sales tax and retain with it, the same will be chargeable to tax as trading receipt in view of decision of Supreme Court in the case of Sahney Steel and Press Works Ltd. v. CIT [228 ITR 253 (SC)].
Section 50C creates a legal fiction for taxing capital gains in the hands of the seller and it cannot be extended for taxing the difference between apparent consideration and valuation done by Stamp Valuation Authorities as undisclosed investment u/s 69 in the hands of the purchaser.
