ADIT Vs TII Team Telecom International Pvt. Ltd. (ITAT Mumbai)- In terms of the provisions of Article 12 (3) of the Indo Israel tax treaty, royalty is defined, for the purposes of this tax treaty, as “payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work including cinematography films, any patent, trade mark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience”.
DCIT Vs RBS Equities India Ltd. (ITAT Mumbai)- Rejection of most appropriate method selected by the assessee does not mean that assessee carried out transfer pricing study without good faith and due diligence and hence, penalty for concealment of income cannot be sustained.
ITO Vs Bajaj Hindustan Ltd. (ITAT Mumbai)- There is not dispute that the payment in question made by Assessee to KPMG is in respect of services which otherwise fell within the definition of FTS as given in the Act. The dispute is whether the exceptions mentioned in clause (b) to Sec.9(1)(vii) of the Act would apply so that it can be said that the fees in the nature of FTS has not accrued or arisen to KPMG in India.
Nippon Keiji Kyokoi Vs ITO (ITAT Mumbai)- Notwithstanding a change in the position by the assessee, the Tribunal has held that the effective connection with the permanent establishment in India has to be determined based on a functional test in the case of fees for technical services . Furthermore, the Tribunal also upheld that if the services are said to have been effectively connected with the permanent establishment, the income would be taxable only as business profits to the extent of attribution and the balance income would not be liable to tax in India as fees for technical services .
ACIT Vs Pramod H. Lele (ITAT Mumbai)- The Stock Option Plan had granted only an ‘option to buy’ a specified number of shares in a specified timeframe at a specified price, subject to the fulfilment of other conditions set out in the plan. There was no compulsion on the part of the assessee to acquire the shares. In other words, the Stock Option Plan only allowed the assessee to get benefit from the increase in the market price of the shares between the date of grant and the date of sale of shares. Therefore, where only stock options were issued and stood in the name of employees and no payment was made until the date of exercise, mere grant of an option does not result in a transfer of shares.
ITO Vs Yash Container Terminal Pvt. Ltd. (ITAT Mumbai)- There is no dispute to the fact that the assessee has deducted tax @ 1.12% from the payments made to M/s Laxmichand Dharshi during the financial year 2006-07 u/s 194C of the I T Act being the payment made to sub contractor. According to the AO, such payments made to M/s Laxmichand Dharshi has to be treated as hire charges paid for transportation of containers/trucks as per bills raised since there is no written contract/ sub contract agreement between the parties concerned.
ACIT Vs Bank Of India (ITAT Mumbai)- As per the provisions of section 115JAA(2), the amount of tax credit of MAT to be carried forward is determined and it is not provided therein that first the taxes paid are to be adjusted and then credit of MAT is to be given. In the case of Chemplast Sanmar, cited supra, the Chennai Bench of the Tribunal has held while deciding he issue u/s.234B and 234C that the tax credit u/s.115JA(2) is advance tax retained by the Department for being set off against the tax liability of future years. We are in agreement with the ld. CIT that the assessee is entitled for interest u/s.244A on the refund given to it. We are also of the view that it was a mistake which could be rectified u/s. 154. So from this is is clear that MAT credit has to be given right at the beginning and if ultimately the calculation leads to a refund, then such interest has to be paid u/s.244A.
Bhuwania Steel & Metal Pvt. Ltd. Vs ITO (ITAT Mumbai)- On investigation of the assessee’s purchases, it was noticed that the same were from Shri Shivkaran Goel who admitted before the Customs authorities as well as AO that he had not supplied any goods to the assessee, with which flanges liners with 55% tin could be manufactured.
Mid-Day Multimedia Ltd Vs Dy. CIT (ITAT Mumbai)- The provisions of rule 8D of the Rules which have been notified with effect from March 24, 2008, would apply with effect from assessment year 2008-09. Even prior to assessment year 2008-09, when rule 8D was not applicable, the AO had to enforce the provisions of sub-section (1) of section 14A. For that purpose, the AO is duty bound to determine the expenditure which has been incurred in relation to income which does not form part of the total income under the Act. The AO must adopt a reasonable basis or method consistent with all the relevant facts and circumstances after furnishing a reasonable opportunity to the assessee to place all germane material on the record.
Pidilite Industries Limited Vs DCIT (ITAT Mumbai) – Section 80-IA(5) provides that notwithstanding anything contained in provision of this Act, the profits and gains of an eligible business to which the provisions of sub-section (1) apply, shall for the purposes of determining the quantum of deduction under that sub-section for the assessment year immediately succeeding the initial assessment year or any subsequent assessment year, be computed as if such eligible business were the only source of income of the assessee during the previous year relevant to the initial assessment year and to every subsequent assessment year up to and including the assessment year for which the determination is to be made. It is noticed that by virtue of sub-section (5), section 80-IA has become a stand alone provision.
