A look into the original assessment order clearly show that but for the deduction allowed to the assessee as claimed by it in its return, there was no discussion as to how Section 36(1)(viia) was applied and whether the limits were corrected worked out. Admittedly, no question was asked to the assessee during the course of assessment proceedings also with regard to the claim made by it under Section 36(1)(viia),
Even if the assessee as well as the authorities below agree that the internal comparables are sufficient for the TP study in the present case, that does not justify the legal compulsion of examining the external comparables as well. An agreement, arrived at on the basis of incorrect premises between the contending parties, does not determine the legality or otherwise of the course of action opted by them. The course of action must be determined strictly on the basis of the words of the statute and not by the consensus of the contending parties.
The programme of professional education imparted by the assessee Institute in India is not in the nature of coaching or tuition. The Institute at London is an Institute established by a Royal Charter and recognized world-wide as the nodal agency of design, improving and controlling the profession of ship-broking. Ship-broking is recognised world over as the only profession engaged in dealing with all aspects of shipping industry.
In the instant case, it is found that the eligible new asset was not purchased within one year before the date on which the transfer of the original asset took place. Thus, the amount which is not utilized by the assessee for the purchase of new asset before the date of furnishing the return of income under section 139 was required to be deposited as per the provisions of sub-section (4) for availing deduction under section 54F in respect of those amounts also. In other words, as per the plain language employed in the above sub-section (4), only the amount which was actually utilized by the assessee for the purpose of purchase of the new residential house before the date of furnishing of the return of income under section 139 shall only be eligible for computation of deduction under section 54F(1).
Section 80HH states that an industrial undertaking has to begin manufacture or production in a backward area. Mere intention to begin manufacture or production and making investment would not suffice for that purpose. There has to be actual manufacture or production. Hon’ble Apex Court in the case of CCE v. Hari Chand Shri Gopal [2011] 1 SCC 236 unequivocally held that provision providing exemption, concession or exceptions in a fiscal statute has to be interpreted strictly.
Short facts apropos are that assessee engaged in the business of transport of spirit and Molasses had acquired a new wind mill during the previous year. The total cost of the wind mill was Rs. 1,58,00,000/- and it was commissioned on 27.03.2005. Since wind mill was used for less than 180 days, depreciation was claimed at 50% of the normal rate.
Expenses having been incurred for the IPO through which assessees were also able to sell their shares, the expenses necessarily were, in our opinion, in connection with sale of such shares. Assessees could take advantage of clause (1) of Section 48 of the Act. Assessees had produced evidence in the form of Escrow Account to show that it had received only net amount after incurring the expenses. Assessees also produced Prospectus of IPO which clearly shows that they were obliged to meet pro rata share of IPO expenses. There is no case for the Revenue that any of the assessees claimed more than their share of expenses based on the ratio of shares sold. We are, therefore, of the opinion that the deduction claimed by the assessees for expenses incurred was unjustly disallowed. This disallowance is deleted.
In this case, the right to receive the brokerage and commission always remained outside India and what was received by the assessee in his Indian bank account is a subsequent remittance of funds from foreign accounts to Indian accounts. As far as the assessee is concerned, the right to receive the income did not arise in India.
Hon’ble Supreme Court in the case of CIT v. Alagendran Finance Ltd. [2007] 293 ITR 1/162 Taxman 465, has considered the period of limitation for the purpose of section 263 in a case where a series of orders were passed by the assessing authority in the case of that assessee. The Hon’ble Supreme Court held that the period of limitation commenced from the date of the original assessment order, in which the issues sought to be revised by the Commissioner of Income-tax, have been discussed. The Hon’ble Supreme Court held that the subsequent orders passed by the lower authorities on different dates cannot be relied on by the Commissioner of Income-tax for reckoning the period of limitation. It is, therefore, necessary to see that for the purpose of computing the period of limitation, the date of that order is to be considered in which the disputed issues have been considered by the lower authorities, at the latest. The Hon’ble Supreme Court has held that the period of limitation begins from the original assessment in respect of those items.
When a notification is issued exercising the powers conferred under sub-section (3) of Section 90A of the Act, it can have effect only on those types of agreement mentioned in sub-section (1) thereof. If such a notification goes beyond that mandate, it will have to be ignored to the extent it goes overboard. Even if the term may be taxed has been given a meaning by the Government through a Notification No. 90A(3) of the Act, so as to extend such meaning to terms used in a Double Taxation Avoidance Agreement, it will have to be ignored.
