Southern Metals & Alloys Vs. ACIT (ITAT Chennai)- The assessing authority had asked for details in respect of various creditors and in respect of the above stated trade creditors. The assessee had not furnished any particulars before the assessing authority. No confirmations were made by creditors also. On an examination of the records of the case, we find that even though the assessing authority had initiated the process of verifying the genuineness of the trade creditors, he has not brought that process to a logical end.
ACIT Vs. Kannappan Iron and Steel Co. Pvt. Ltd. (ITAT Chennai)-The Tribunal found that the expenditures were not incurred for setting up of any business or initiating an expansion programme. The expenditures were incurred as a measure of value addition and for competing in the market. There was no basic improvement in the fundamental character of product already manufactured and processed by the assessee. It was in the light of those findings, the Tribunal has held that the disputed expenditures were in fact revenue in nature.
ACIT Vs. L&T Western India Toll Bridge Ltd (ITAT Chennai)- It was yelled by the ld.AR that merits of the grounds taken in the cross objection should not be washed away permanently and the assessee should be given an opportunity to revive these issues as and when the proceedings, if reversed, by the higher forums.
In appeal for the assessment year 2001-02, the Revenue assails deletion of additions of Rs.3,60,000/- and Rs.1,56,388/- made by the ld. CIT(A). During the course of hearing, it was admitted by the ld. DR that the tax effect in this case was less than Rs.3 lakhs. Similarly, for the assessment year 2002-03, the Revenue has assailed the deletion of Rs.5,11,494/-. The tax effect here is also less than Rs.3 lakhs and even below Rs.2 lakhs. we are of the opinion that Circular No.3/2011 of CBDT will apply and due to low tax effect, the appeals of the Revenue are not maintainable. There is no case for the Revenue that the issue involved has got any cascading effect over other years or on the assessments of any group of which assessee is a part.
Shri A.S. Bindra Vs ACIT (ITAT Delhi) – In the assessment order, it has been mentioned that due to non-availability of evidence, the assessee has offered this amount as his income. That fact cannot go against the assessee in penalty proceedings as the assessee will be having right to contest the levy of penalty independently, apart from the findings recorded in the assessment order. Therefore, the relevant evidence is admitted as additional evidence and the matter is restored back to the file of the AO for readjudication of the penalty proceedings after due consideration of the evidence being placed by the assessee on record. After giving a reasonable opportunity of hearing to the assessee and placing evidence on record, the AO will re-adjudicate the issue of levy of penalty or otherwise in accordance with law. We direct accordingly.
Income-tax Act Benefit u/s. 47(xiv) of the cannot be denied in case there is a delay in allotment of shares to the proprietor on conversion of a proprietary concern into a company
Novel Inc. Vs. DDIT (Intl. taxation) – The proceeds from sale of Software to Distributors, without granting the right to duplicate / alter / modify the software, cannot be construed as ‘Royalty’, regardless of the fact that the taxpayer choose to describe its product as ‘intellectual value’ in its invoices. The Tribunal held that if the creator himself exploits his work by converting it into end products ready for use and transfers the right to use such end products to another but not further the right to copy the same, it would be a case of transfer of a copyrighted product.
De Beers UK Limited Vs. DCIT (ITAT Mumbai)- The Tribunal held that the payment for VAS has to be considered partly as royalty under para 3(a) of Article 13 of the tax treaty being the payment for various types of information of commercial nature acquired based on past experience and partly as FTS under para 4(a) of Article 13 of the tax treaty being the payment attributable to the services rendered by the Key Account Manager (KAM) or through workshops, etc. which were ancillary and subsidiary to application or enjoyment of the information or being payment for marketing consultancy services which were ancillary and subsidiary to the application or enjoyment of brand.
The decision of CIT Vs. America Counting Corporation 123 ITR 513, noted above also supports the view that taxes paid on behalf of the assessee is a perquisite or a benefit, but not income from business. It could not be taxed except under clause (iv) of Section 28 which provided that a benefit or perquisite was liable to be charged to tax.
DCIT v. Bharat Aluminium Company Ltd (ITAT Delhi)- The Delhi Tribunal in this case has held that interest for deferment of advance tax is leviable under Section 234C of the Act where there is a shortfall in payment of advance tax while computing ‘book profit’ under the existing MAT provision under Section 115JB of the Act.
