Briefly stated the relevant facts of the present case are that on 14th September, 2004, a survey under Section 133A of the Act was conducted out on the respondent-assessee?s business premises. During the course of survey, the tax officials noticed some discrepancies in stock and cash in hand. During the said survey, respondent-assessee surrendered an amount of ` 99,50,000/- and offered the same for the purposes of taxation. The additional income offered included a sum of Rs. 45,00,000/- on account of excess stock found during the course of survey and offered by one of the partners of the respondent-assessee as additional income.
Delhi High Court Ruling: Transfer Pricing – Sec 92 – An important ruling by the Hon’ble High Court wherein it has been held that the methodology to be adopted by the Revenue Authorities for making an adjustment should be equitable and fair, and has ruled on the payment for the use of intangible assets and attributing arm’s length consideration for activities carried out by the licensee, etc. [Maruti Suzuki India Limited – W.P. 6876/2008]
One of the most challenging issues in TP is the taxation of income from intangible property. The issues may arise in several contexts, such as the appropriate royalty to be charged to a licensee of intangibles or the appropriate inter-company transfer price for goods manufactured and sold to a controlled distributor when the manufacturer owns the trademark for the finished goods in the distributor’s jurisdiction. The OECD has also recently announced that it is considering starting a new project on the TP aspects of intangibles that could result in a revision to the existing guidelines.
The assessee had received interest free deposit in respect of shops given on rent. The Assessing Officer added to the assessee’s income notional interest on the interest free deposit at the rate of 18 per cent simple interest per annum on the ground that by accepting the interest free deposit, a benefit had accrued to the assessee which was chargeable to tax under section 28(iv).
The assessee filed his return of income which contains a claim for carry forward of losses a day after the due date. The delay of one day in filing the return of income was due to the fact that the assessee had not reached the Central Revenue Building on time because he was sent from one room to the other and by the time he reached the room where his return was to be accepted, it was already 6.00 p.m. and he was told that the return would not be accepted because the counter had been closed.
The very purpose of having an independent regulatory authority like SEBI, and vesting it with statutory powers of inquiry, is to enable it to take prompt action in matters relating to issue and transfer of share; particularly, SEBI is expected to be the sentinel, read the fine print of prospectuses keeping the investors’ interests in view; it has both a preventive and corrective role to perform; therefore, it is not possible to place a narrow interpretation on the words “issue and transfer of securities” occurring in Section 55A.
here the self-assessment tax paid by the assessee under Section 140A is refunded, the assessee should be, on principle entitled to interest thereon since the self-assessment tax falls within the expression “refund of any amount”. The computation of interest on self-assessment tax has to be in terms of Section 244A(1)(b), i.e., from the date of payment of such amount up to the date on which refund is actually granted.
We are also in agreement with the submission made by Mr. Piyush Kaushik that it is settled law that in the absence of any incriminating evidence that anything has been paid over and above than the stated amount, the primary burden of proof is on the Revenue to show that there has been an under-statement or concealment of income. It is only when such burden has been discharged, would it be permissible to rely upon the valuation given by the DVO.
Further, the Hon’ble High Court distinguished the judgments of the Supreme Court in the case of A & G Projects and Technologies Limited Vs. State of Karnataka (2009 (2) SCC 326] and the High Court of Andhra Pradesh in the case of Jadhavjee Laljee Vs. State of Andhra Pradesh (1989 (74) STC 201 (DB)].
There was no transfer of copyright or the right to use the copyright by the foreign company to the tax payer and therefore the payment would not fall within article 13(3)(c) of the Tax Treaty. The reference in Article 13(3)(c) is to “any copyright” and it is not a reference to “any right”. Hence, the payment cannot be said to be in the nature of royalty payment.
