Brintons Carpets Asia Pvt. Ltd v. DCIT (ITAT Pune) – The AO has to maintain the rule of consistency unless there is change facts materially. Comparable cases accepted by the department in the subsequent assessment year should be adopted for the purpose of computing the transfer pricing adjustments for the current year also. Ld Counsel also narrated the facts of that case and stated that the AO/TPO initially picked up the domestic comparable cases in that case too as in the case of the present assessee and such a decision was not accepted by the Tribunal vide the cited order dated 23.2.2011.
Satara Cattle Feed Industries (P) Ltd. v ACIT (ITAT Pune) – The invocation of s 263 is unjustified if the AO has applied mind to the shortfall in income returned after considering the declaration of additional income during the survey in absence of any material or evidence to show that the reasons which have been accepted by the AO are incorrect or that the same was extraneous or false. Order of the AO must suffer from an incorrect assumption of fact or incorrect application of law so as to be considered as erroneous apart from meeting the requirements of the expression “prejudicial to the interests of Revenue”, to justify the invocation of s 263.
Dis-allowance on the ground that the assessee has diverted interest bearing funds into tax-free income can not be made where the assessee owes ample interest free funds on the date of investment.
Patni Computer Systems Ltd vs. DCIT (ITAT Pune) – A continuing debit balance per se, in the account of the associated enterprises, does not amount to an international transaction u/s 92B in respect of which ALP adjustments can be made. U/s 92B(1), the apportionment of cost is permissible only where there exists a ‘mutual agreement or arrangement’ between two or more Associated Enterprises for apportionment of cost incurred in connection with a benefit, service or facility provided to any one or more of such Enterprises. The bare allegation that the AE’s had received ‘specific and identifiable benefits’ is not sufficient to justify apportionment.
Pune Income Tax Appellate Tribunal on the issue of deductibility of portfolio management fees in computing ‘capital gains’ under the Indian Tax Laws (ITL) held that such fees was directly connected to the acquisition and sale of securities and was incurred in the normal course of the investment activity. It was held that the payments would be allowed as a deduction in computation of capital gains under the ITL.
Shramjivi Nagari Sahakari Pat Sanstha vs. ACIT (ITAT Pune)- The Hon’ble Bombay High Court in the case of KEC Interntional Ltd v/s. B.R. Balakrishnan (Supra) has been pleased to hold that generally coercive measures may not be adopted during the period provided by the Statute to go in appeal. In the present case, it remained the allegation of the appellant that recovery action was taken by the A.O by attaching bank account of the appellant u/s. 226(3) on 29.3.2010 on the basis of first appellate order passed on 3rd Februry 2010 and was served upon the assessee on 31st March 2010.
Laxmi Civil Engineering Pvt Ltd vs. ACIT (ITAT Pune) – After Section 80 IA was amended by the Finance Act, 2001, the section applies to an enterprise carrying on the business of (i) developing; or (ii) operating and maintaining; or (iii) developing, operating and maintaining any infrastructure facility which fulfills certain conditions. Those conditions are (1) ownership of the enterprises by a company registered in India or by a consortiums; (II) an agreement with the central or State Government, local authority or statutory body; and (iii) The Start of operation and maintenance of the infrastructure facility should commence after 1st April, 1995. The requirement that operation and maintenance of the infrastructure facility should commence after 1st April, 1995 has to be harmoniously construed with the main provision under which deduction is available to an assessee who develops or operates and maintains, or develops, operates and maintains an infrastructure facility.
Assessee has an option when there is arithmetical mean involved while computing the ‘arm’s length price’ and it happens only if more than one price is determined by the most appropriate method. The First Proviso becomes operational where more than one comparable price is determined. The assessee at his option can make claim of deduction out of the arithmetic mean not exceeding 5%.
Sinhgad Technical Education Society vs. ACIT (ITAT Pune) -Though section 153C of the Income Tax Act confers jurisdiction if the Assessing Officer is ‘satisfied’ that ‘documents’ seized belong to a person other than the person referred to in section 153A so as to be able to assess that other person, the document must have prima facie incriminating information. The document seized must not only be a ‘speaking one’ but also be prima facie ‘incriminating one’ for attracting section 153C. If the impugned documents merely contain the notings of entries which are already recorded in the books of account or subjected to scrutiny of the AO in the past in regular assessment u/s 143(3) of the Act, such document cannot be said to be containing the incriminating information so as to confer jurisdiction u/s 153C.
Dy.CIT, Pune Vs KRA Holding & Trading Pvt Ltd -The view of the assessing officer was consistent with the decision of the Tribunal in the case of Castle Investment (supra). The judgement in Castle Investment insofar as is material held that Section 1150(5) does not in any way restrict the allowability of the claim under section 80M. Under Section 80M what is claimed as a deduction is the dividend received by the company. Dividends declared, distributed or paid are not claimed as deduction under Section 80M though they constitute an outflow of funds from the company. Section 80M imposes a monetary restriction on the amount that may be claimed by way of a deduction by providing that the amount of claim cannot exceed the dividend distributed by the assessee by the due date.
