Explore the ITAT Bangalore judgment on global e-business operations vs. DDCIT. Learn about tax implications and obligations for reimbursement payments.
Assessee, on partition of the joint family, had received the balance capital of the family in the real estate business comprising various assets, which were in the nature of stock-in-trade and it cannot be considered that the various assets or properties received by the assessee on partition are capital assets and these capital assets were converted into stock-in-trade of the real estate when the assessee continued to carry on the business of the erstwhile joint family.
Assessee had acquired the business and also earned income out of the said transaction by cost plus basis. Thus, it can be seen that the assessee has not encountered the risk of having a single customer, whereas the same cannot be said as regards the comparables. As pointed out by the learned counsel for the assessee, the comparables were dealing in open market and therefore, they were prone to the marketing and technical risks. They would have incurred certain expenditure on marketing services and also to safeguard the technical use by them.
Indian Company exercising control and supervision over a seconded employee and bearing the salary cost should be considered as an economic employer and not liable to withhold tax under Section 195 of the Act on the reimbursement of the salary to the foreign company on which tax has been withheld under Section 1923 of the Act. Further the Tribunal held that the payment to IDS USA did not represent ‘Fees for Technical Services’
he amendment to s. 40(a)(ia) by the Finance Act, 2010 has been specifically made retrospectively applicable from the asst. yr. 2010-11. It has nowhere been expressly set out that the amendment is curative or merely declaratory of the previous law. The intention of the legislature as gathered from the Notes on Clauses and the Memorandum Explaining the Provisions of the Finance Bill does not particularly indicate any relaxation in the provision retrospectively from asst. yr. 2005-06 by providing that the expenditure on which due tax was deducted upto February, 2005 but paid before the due date specified in s. 139(1) shall not suffer any disallowance in the asst. yr. 2005-06.
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
In the case before us, the assessee was liable to pay labour charges to various parties and made the payment without deducting tax at source. However, at the end of the financial year, the assessee has made a provision for tax deductible at source and has remitted to the Government account before the due date of filing of return u/s 139(1) of the IT Act.
DCIT Vs. M/s. Bellad & Co. (ITAT Bangalore) – The assessee is a partnership firm dealing in automobiles and Sony products and also into generation of electricity from windmills. The assessee filed its return of income for AY 2007-08 declaring income of Rs.11,52,410/- after setting off of depreciation loss pertaining to windmill installed during the financial year relevant to assessment year under appeal. The AO, in the assessment completed, disallowed loss of Rs. 1,22,30,626/-.
Kodiak Networks (India) Pvt Ltd Vs. ACIT (ITAT Bangalore)- As far as the data to be used by the TPO while determining the ALP was concerned, it is observed that it is covered by the provisions of rule 10D sub-rule 4 of the Income-tax Rules. Section 92 C provides that the arm’s length price in relation to an international transaction shall be determined by any of the methods being the most appropriate method having regard to the nature of transaction or class of transaction or class of associated persons or functions performed by such persons or such other relevant factors for computing the ALP and also any other method as may be prescribed by the Board. S. 92D provides that (i) every person who has entered into an international transaction shall maintain and keep such information and documents in respect thereof;
Nandi Steels Limited Vs The ACIT (ITAT Bangalore)- It is not in dispute that the land, building and bore well sold by the assessee were used by the assessee for its business purposes. It is also not disputed that these assets were fixed assets of the assessee. The only argument of the assessee has been that they have direct nexus with the business carried on by the assessee and therefore, are business assets and any gains from the sale of such assets would also have the character of business income.
