Karntaka Power Transmission Corporation Ltd. Vs DCIT (ITAT Bangalore)- Whether the expenditure incurred on repair and maintenance of residential quarters of the staff which were owned by the assessee company can be treated as a benefit given to the employees and is covered under clause (E) of subsection (2) of section 115WB relating to employees’ welfare – Whether the Board circular which provides that even the indirect expenditure which benefit employees’ welfare is covered under FBT is not applicable as the expenditure incurred by the assessee to upkeep its assets doesn’t mean even remotely that the benefits were provided to employees either directly or indirectly. – Assessee’s appeal allowed.
Bhoruka Engineering Inds. Ltd. Vs DCIT (ITAT Bangalore)- The whole transaction has been arranged in a sequential manner with M/s. Bhoruka Steel Ltd selling its landed property to BFSL for a nominal value of Rs. 3.75 crores ; BFSL never before doing any business other than financial services purchases the land for Rs. 3.75 crores ; immediately thereafter the assessee company and its entire group holding 98.73% of shares in BFSL selling the share holding to DLFCDL for a consideration of Rs. 89,28,36,500/- without attracting any levy of taxation.
IBM India P. Ltd. v. DCIT (ITAT Bangalore)- Considering the second objection of the AO, namely, that separate books of account have not been maintained for the STP Units, his observation was that the objection of the AO arose on the premise that part of the expenditure which could be related to the exempted income which is not allowable to the assessee by virtue of the provisions contained in section 14A of the Act which could be disguised and allowed to be set off against taxable income and, thus, the assessee would be benefited by paying reduced tax which could have been avoided.
DCIT v. Golflink Software Park P Ltd. (ITAT Bangalore) – The taxpayer was not only letting out its building for rent, but also carried on a complex commercial activity of setting up a software technology park in which various amenities and fit-outs have been provided. The Tribunal relied on the Supreme Court’s decision of CIT v. National Storage Pvt Ltd [1967] 66 ITR 596 (SC).
E2 Solutions India Pvt. Ltd., Vs ITO- Learned CIT(A) has passed a very detailed order in the assessment year 2002-03 and rightly came to the conclusion that the assessee is entitled to exemption u/s 10A of the IT Act. From the assessment order, we find that according to the AO, it is not a new undertaking for the purpose of exemption u/s 10A of the IT Act. Factually, it is also correct that the undertaking was already engaged in exporting software before it became a STP unit. The STP was notified in March, 1993 but not in Software Technology Park. In the year 2001, a company was formed by conversion of the firm and it started production in STP unit after getting approval.
DCIT Vs. Akshay Eminence Developers Pvt. Ltd. (ITAT Bangalore) – The provisions of s. 80IB(10) of the Act have not subscribed that the assessee was required to begin the construction work after obtaining the approval from the local authorities and that before getting such approval if the assessee begins the construction work, such construction was not recognized. What really matter here is the date of approval of the plan, but, not the date on which it was communicated?
Sami Labs Ltd Vs DCIT (ITAT Bangalore) – Assessee had to incur cultivation expenses to ensure adequate and steady supply of coleus plants from the farmers which were an essential input for the continuous processing in research and development activities of the assessee. Thus, these expenses incurred by the assessee for a commercial expediency and were wholly and exclusively for the purpose of its business. In essence, the authorities were not justified in disallowing the cultivation expenses of Rs.90.64 lakhs claimed by the assessee.
When parties enter into two separate contracts, one for material and one for labour, the transaction would not be one and indivisible, but would fall into two separate agreements, one of work or service and the other of sale. In such a case, the provisions of section 194C would apply only to the labour contract and not to the materials contract. The supply portion of the contract being for supply of equipment does not require deduction of tax at source. -Karnataka Power Transmission Corporation Ltd. v. Asstt. CIT (ITAT Bangalore)
Filtrex Technologies Pvt. Ltd. v. ACIT – ITAT Bangalore held that payments made under a Technology Transfer Agreement ‘make available’ technical knowledge or experience, and hence, are taxable as Fees for Technical Services in terms of Article 12(4)(b) of Double Taxation Avoidance Agreement between India and Singapore. Also, payments made for services in the nature of marketing support and other administrative services do not ‘make available’ technology, and hence, cannot be held as FTS under Article 12 of DTAA between India and Singapore.
The OECD guidelines are not of binding nature and even the Proviso to Rule 10B (4) provides that any subsequent year data cannot be considered. The contemporaneous data of relevant financial year is to be used for making the comparable analysis for arriving at the ALP unless it is proved otherwise
