Only in the cases where the assessment order is erroneous and prejudicial to the interests of the revenue and not prejudicial to the interest of the assessee can be reopened under section 263 and the assessee is not eligible to claim any new benefit in the assessment proceedings pursuant to section 263.
Where the assessee is not able to substantiate his claim of expenditure with any evidence, penalty is leviable under section 271(1)(c)
The business of the erstwhile company will be continued to be carried by the amalgamated company; if the amalgamated company is deprived of the said benefit, it will frustrate the very purpose of amalgamation and defeat the order of amalgamation passed by the High Court exercising jurisdiction under the Companies Act.
UOI vs. R. Gandhi (Supreme Court – 5 Judges). Parliament is competent to constitute Tribunals for special Acts. However, the failure to ensure independence of judiciary and separation of judicial and executive power renders the Company Law Tribunal unconstitutional. Suggestions given on how to remedy the defects.
We do not find that on all the four counts, demand was raised on the ground of clearance of goods with intent to evade payment of duty. Demand relating to third count and relating to samples was clearly demand on account of legal issues so it cannot be held that there was intention to evade payment of duty. So penalty in respect of these two counts is not sustainable.
Recently, the Authority for Advance Rulings (AAR) in the case of Royal Bank of Canada (A.A.R No 816 of 2009) has held that the profits / losses on futures and options contracts (derivative transactions) carried out by Canadian entity would be in the nature of ‘Business Income’. Further since the entity did not have a Permanent Establishment (PE) in India, as per Article 5 of the India-Canada tax treaty (the tax treaty), the Business Income of the applicant would not be taxable in India.
Recently, the Income Tax Appellate Tribunal, New Delhi (ACIT vs Harashima Naoki Tashio, ITA No. 4634/Del/) has held that the employer’s contribution towards the social security in the home country of the employee is not taxable in the hands of the employee as a perquisite.
The Delhi High Court (CIT Vs. Dr. Percy Batlivala [ ITA No. 13 08/2008]) has held that in respect of the expatriate employee sent on deputation to India, the amount of hypothetical tax representing the difference between the tax liability in the home country of the expatriate and in India should not be added to the salary income of such expatriate taxable in India.
The assessee, a FII based in UK, applied for an advance ruling on whether the profits arising to it from purchase and sale of Indian securities was “business profits” and whether in the absence of a ‘permanent establishment’ in India, the said profits were chargeable to tax under the India-UK DTAA.
The assessee filed a Nil return after claiming depreciation. The AO disallowed depreciation but still assessed the total income at Rs. Nil. Penalty u/s 271(1)(c) was levied on the disallowance which was deleted by the Tribunal on the ground that as the returned income and the assessed income was Nil, penalty could not be levied. The department filed an appeal before the High Court which was dismissed on the basis that no penalty u/s 271(1)(c) could be levied where the returned and assessed income were Nil.
