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ITAT Mumbai

Expression ‘contractor’ does not include within its fold a subcontractor carrying out any work in pursuance of a subcontract with a sub subcontractor in AY 2006–2007

July 14, 2011 1234 Views 0 comment Print

HCC-L&T Purulia Joint Venture v JCIT (ITAT Mumbai) In the present case we are concerned with A.Y 2006-07 and, therefore, payments by a subcontractor to sub sub-contractor would not be covered under the provisions of section 194C(2) of the Act. We therefore, agree with the submissions made on behalf of the assessee and hold that there is no obligation to deduct tax at source on the part of the assessee in respect of payments made to sub sub-contractors. Therefore, the disallowance made under section 40(a)(ia) is directed to be deleted.

Assessee liable to deduct TDS under s 194C at 2 per cent on payment made for hiring the studio and utilising the dubbing facilities, which included service through the studio staff

July 13, 2011 13109 Views 0 comment Print

ACIT v Mansih Dutt (ITAT, Mumbai )- Assessee had utilized the services of dubbing studio Ninety Degrees by using their equipments as well as the artists who were working for Studio Ninety Degrees. The assessee had thus carried out the work of dubbing by engaging services and the same was of the nature of getting work done through a subcontractor. The findings of the CIT(A) in this regard are not in challenge before us. In such circumstances we are of the view that the provisions of section 194C were applicable and the assessee has rightly deducted tax at source at 2 per cent treating the payment as a payment to sub-contractor for carrying out a work.

Exploitation of immovable property by way of complex commercial activities is business income

July 7, 2011 2391 Views 0 comment Print

ITO vs. Shanaya Enterprises (ITAT Mumbai) – Merely because income is attached to any immovable property cannot be the sole factor for assessment of such income as income from property; what has to be seen is what was the primary object of the assessee while exploiting the property. If it is found, applying such test, that main intention is for letting out the property, or any part thereof, the same must be considered as rental income or income from property. In case, it is found that the main intention is to exploit the immovable property by way of complex commercial activities, in that event, it must be held as business income.

Payment for use of disk space is not royalty

July 3, 2011 1187 Views 0 comment Print

Atos Origin IT Services Singapore Pte Ltd. Vs. Asstt. Director of Income tax (ITAT Mumbai)- Assessee who was tax resident of Singapore had entered into a hubbing agreement for providing data processing support to Standard Chartered Bank (SCB) a non resident company engaged in the business of banking in India. Assessee receive amount from SCB India for use of disc space alongwith embedded software in the hardware of the assessee at its data centre in Singapore of the infrastructure of the assessee, whether CIT(A) was justified in treating the income earned by the assessee was of the nature of royalty within the meaning of Article 12(3) of DTAA and also within the meaning of clause (iii) of Explanation (2) below Sec.9(vi) of the Income tax Act. Held, No

If defects in Form 15H are curable then AO to provide opportunity to the Assessee before making any disallowance for non deduction of TDS

July 3, 2011 2049 Views 0 comment Print

Industrial Thermoplastics Vs ITO (ITAT Mumbai) – Whether the disallowance is warranted u/s 40(a)(ia) for non-deduction of tax on interest payment by the assessee to a concern covered u/s 40A(2) though the assessee has explained that there is no taxable income of the corporation and the defects in Form 15H are curable and cannot be considered without giving an opportunity to rectify the defects. – Assessee’s appeal allowed.

Whether in the case of Government securities, interest accrues on day to day basis or only on the coupon dates?

July 3, 2011 1378 Views 0 comment Print

Indusind Bank Ltd Vs ACIT (ITAT Mumbai) – Whether interest on government securities will become taxable on the date of coupon date as the assessee receives the right of the interest in the said securities only on the said date and it does not become due on day to day basis. – Assessee’s appeal partly allowed.

Pre-operative expenses and registration fee paid to SEBI are allowable as intangible asset and assessee can claim depreciation on the same

July 3, 2011 5691 Views 0 comment Print

HSBC Asset Management (India) Private Limited Vs DDIT (ITAT Mumbai)- Pre-operative expenses and registration fee paid to SEBI are allowable as intangible asset and assessee can claim depreciation on the same and AO cannot question the allowability if same was allowed in the earlier AY.

Whether when the title of the assessee on the impugned land is not clear, income arising from transfer of such land is to be treated as capital gain or income from other sources?

July 3, 2011 1907 Views 0 comment Print

Bachhraj Factories Pvt Ltd Vs ITO (ITAT Mumbai)- in regard to 14 bighas, the assessee was found to be a trespasser. The law does not recognize the rights of a trespasser. Ordinarily, it is said that the possession is the nine point of ownership. The possessor has got right over the property and his right cannot be challenged by any one except the true owner. Undoubtedly, for some time, the assessee was the possessor of the land and building. But from the facts culled out from the records, it cannot be concluded that the possessory rights of the assessee bear any legal recognition. Unless such rights are protected by law to associate the word ‘right’ with the said type of possession will be a misnomer, since right is a legally protected interest.

For making additions, FIR is contemporaneous evidence and the contents of the same cannot be ignored in the light of self-serving documents

July 3, 2011 1717 Views 0 comment Print

DCIT Vs Mr Sanjeev R Kanwar (ITAT Mumbai) – For making additions, FIR is contemporaneous evidence and the contents of the same cannot be ignored in the light of self-serving documents. Human conduct and human probabilities are to be given weightage over the self generated evidences.

Where no proof of gifts received on surrender of tenancy rights penalty imposable u/s. 271(1)(c)

July 3, 2011 964 Views 0 comment Print

Harish P. Mashruwala v. Asst. CIT (ITAT Mumbai)- In this case, tax sought to be evaded is very clear as the tax rate applicable is 30% whereas the assessee has paid 20%. The tax sought to be evaded was because of the lower rate of tax paid and not because of any addition to the income and, therefore, provisions of Explanation 1 are not applicable. The penalty is imposable under the main provision and there is no need to refer to any Explanations. As regards the merit of the case, the claim of the assessee that amount paid for receiving the gift was from the cash received on surrender of tenancy right is not supported by any evidence.

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