ITO vs. M/s Prasad Production (ITAT Chennai Special Bench). The assessee made a remittance to IMAX Canada towards technology transfer fee without deduction of tax at source. The AO took the view that the consideration was “fees for technical services” u/s 9 (1)(vii) and that tax ought to have been deducted at source as per Transmission Corporation 239 ITR 587 (SC). He accordingly held the assessee to be an “assessee-in-default” u/s 201 though the CIT(A) reversed the same.
Prasad Production Ltd. (“Taxpayer”) was awarded a contract by the Government of the State of Andhra Pradesh to establish IMAX Theatre at Hyderabad. The Taxpayer entered into an agreement with IMAX Ltd., Canada for purchase of the system (which included supply of equipment, installation, testing and initial training) as well as transfer of technology. As per the agreement, the total consideration for purchase of the system was US$ 1,365,000 and US$ 950,000 was towards technology transfer fee.
If there was a surplus of agricultural income in the hands of the assessee for these impugned assessment years, there would have been no question of claiming expenses by way of deduction or question of allowing the same as deduction in computing the business income of the assessee company. The expenses relating to agricultural operations cannot be allowed as expenditure in computing the business income for the simple reason that agricultural income does not form part of the total income under the IT Act.
Mumbai bench of Income-tax Appellate Tribunal (the Tribunal) in the case of DCIT v. Bombay Diamonds Co. Ltd. (ITA no. 7488/Mum/07) held that if the books of accounts of the taxpayer which are not prepared in accordance with part II and part III of schedule VI to the Companies Act, 1956, the Assessing Officer (AO) can make adjustment in the book profits under section 11 5JB of the Income-tax Act, 1961 (the Act) even if the books of accounts are audited or certified by the auditors and accepted by the shareholders.
Mumbai Income-tax Appellate Tribunal (the Tribunal) in the case of DDIT v. Star Cruises (India) Travels Services Pvt. Ltd [2010-TIOL-04-ITAT-MUM] has held that merely booking of different cruise tour packages for M/s. Star Cruises Management Ltd. (M/s. SMCL) foreign company by the taxpayer cannot per se be decisive for holding that M/s. SMCL is having ‘business connection’ in India within the meaning of section 9(1)(i) of the Income-tax Act, 1961 (the Act). Accordingly, it cannot be said that income has been accrued to M/s. SMCL in India in respect of the booking of tour packages of Cruise made by taxpayer in India.
Recently, the Mumbai bench of the Income-tax Appellate Tribunal (the Tribunal) in the case of Asiavision Home Entertainment Pvt. Ltd. v. ACIT has held that royalty paid for the distribution and marketing of cinematographic film on DVD and VCD cannot be considered as royalty paid for TV or radio broadcasting rights and for the purpose of disallowance under section 40(a) of the Income-tax Act, 1961 (the Act) ‘royalty’ shall have the same meaning as provided under explanation 2 to section 9(1)(vi) of the Act.
The Mumbai Tribunal disallowed the claim of the taxpayer in providing interest free loans to its overseas subsidiary. The Tribunal rejected the argument of the tax payer that the loan was extended on account of commercial expediency and out of its own fund (i.e. interest free).
When the nature of transaction is such that the arm’s length price can be determined by applying only one of the most appropriate methods and it need not to be determined by applying 2 or more methods, in such a situation even the price determined by applying only one of the most appropriate methods will become the arithmetical mean price.
Settlement Commission has jurisdiction over assessee only when it decides to proceed with the application and admits application under section 245D(1). In respect of demand raised in the assessment made before the admission of application for settlement under section 245D(1), the Assessing Officer is entitled to levy the interest under section 220(2) till the date of admission under section 245D(1).
We have-considered the rival submissions and perused the material on record. So far as facts are concerned, the undisputed facts are that assessees inherited in the co-ownership a Bunglow No.2, Faizabad Road, Opposite to IT College, Lucknow. This was sold by these assessees vide sale deed dated 20.11.2003. Apparent consideration is declared at Rs. 1,20,00,000/ – whereas valuation as per SVA is Rs.2,48,19,410/ -. The assessees objected to the proposal of the
