Section 115A; vs DTAA rate; Assessee can choose between treaty rate and 115A for different agreements before and after 1.6.2005. Assessee has not invoked or applied the provisions of the Treaty selectively. The assessee has computed the tax on royalty income arising from two different contracts falling under two different limbs of section 115A(1)(b) at two rates
On a difference of opinion among the two Members of the Tribunal, the ld.Third Member was called upon to answer two questions on which there was difference of opinion among the two members who framed the questions and the ld.Third Member in a well considered order, answered the reference by giving sound and valid reasons agreeing with the views of the ld. Judicial Member. Thus, the majority view was in favour of the assessee.
For application of Sec.50C that the transfer must be of a capital asset, being land or building or both. If the capital asset under transfer cannot be described as land or building or both then section 50C will cease to apply. From the facts of the case narrated above, it is seen that the assessee has transferred booking rights and received back the booking advance. Booking advance cannot be equated with the capital asset and therefore section 50C cannot be invoked.
These appeals were originally posted for hearing on 09.11.2011 (vide AD card) and at the request of the assessee it was adjourned from time to time and finally posted for hearing on 04.04.2012 on which date none appeared on behalf of the assessee. Though the assessee has raised several grounds no material, whatsoever, was filed to contradict the findings of the learned CIT(A). Under these circumstances, applying the decision of the Hon’ble Bombay High Court in the case of M/s. Chemipol vs. Union of India in Central Excise Appeal No. 62 of 2009 we dismiss the appeals filed by the assessee for want of prosecution. Assessee is at liberty to move appropriate application for recall of the order, if permissible under the law.
Instruction No.1979 dated 27.3.2000, provided that no appeal would be filed before Tribunal if the tax effect was less than Rs.1.00 lacs, and thereafter Instruction dated 17.7.2003 clarified that monetary limit/tax effect mentioned in the Circular has to be read as revenue effect which would mean tax, interest, penalty. Further, vide circular dated 24.10.2005 CBDT enhanced monetary limit for filing appeal before the Tribunal to Rs.2.00 lacs and vide Instruction No.16.7.2007 it was clarified that the tax effect would mean tax only and no interest. CBDT by subsequent Instruction No.5 of 2008 dated 15.5.2008 clarified that the tax effect would also mean notional tax effect in cases of losses.
he charging of interest is compensatory in nature. If a tax demand raised by the Assessing Officer is varied by an appellate or revisionary authority, it is the appellate and revisional order and not the assessment order, that would hold the field under the doctrine of merger and, hence, fresh notice of demand is to be issued accordingly. An increase in tax liability would correspondingly reduce the amount refundable and also the interest payable on such reduced refund. Provisions of section 244A(3) clearly cover such a situation. If the contention of the assessee is accepted, it would lead to irrational and absurd consequences, which would make the provisions of section 244A(3) inoperative and redundant. The Assessing Officer merely gave effect to these relevant and clear provisions of the Act.
The question now is as to whether to follow the decision of the Hon’ble Special bench in the case of Bharati Shipyard Ltd vs. DCIT (ITAT Mumbai) which has taken the view that Amendment by the Finance Act, 2010 to the provisions of Sec.40(a)(ia) of the Act is prospective and not retrospective from 1.4.2005 or the decision of the Hon’ble Calcutta High Court taking a contrary view.
Where no information given in the return is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing inaccurate particulars. In order to expose the assessee to penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. There can be no dispute that everything would depend upon the return filed by the assessee, because that is the only document where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. To attract penalty, the details supplied in the return must not be accurate, not exact or correct, not according to the truth or erroneous.
Briefly stated facts of the case are that the assessee paid a sum of Rs.9,54,684/- to a foreign bank without deduction of tax at source. In the audit report, it was mentioned that it was a usance interest paid under the letter of credit and hence not liable for any deduction of tax at source. In support of its case, the assessee relied on the order passed by the Tribunal in the case of Vijay Ship Breaking Corporation vs. DCIT (2002) 76 TTJ 169 (Rajkot) by contending that the interest paid to bank related to the purchases and hence should be considered as part of purchase price.
The provisions of Transfer Pricing regulations contained in Section 92 belong to a separate code enacted for computing income from international transactions having regard to Arm’s Length Price (ALP) so as to confirm that there is no tax avoidance by the taxpayer. Operation of Transfer Pricing provisions ends when the Transfer Pricing Officer passes an order holding that the operating profit of the taxpayer is compatible with ALP norms and no adjustment is necessary.
