The fact of approval of the payment by the RBI has been succinctly recorded by the TPO in his order as well. He still chose to propose adjustment in respect of full payment. In our considered opinion, when the rate of royalty payment and fee for drawings etc. has been approved or deemed to have been approved by the RBI, then such payment has to be considered at ALP.
We found that assessee’s case is squarely covered by the decision of Mumbai Bench in the case of B.D. Leasing and Finance Limited, (2013) 49(II) ITCL 148, wherein it was held that penalty u/s 271B for non-filing of tax audit report cannot be levied in view of the CBDT Circular No.9/2006 dated 10.10.2006, which provided that in case of electronic filing of return, tax audit report need not to be filed alongwith return.
It is the contention of the applicant that they have paid the amount in excess in the month of April 2004 and May 2004. We are therefore of the view the fact regarding excess payment is required to be verified by the Commissioner (Appeal). Accordingly we waive the pre-deposit and remand the case back to Commissioner for decision on merit after ascertaining the excess deposit of Rs. 14,451/- as service tax as contended by the applicant. Stay petition as well as Appeal are disposed of by way of remand.
Clause 4 of the agreement indicates that the Smt Shah surrendered the tenancy rights along with the property to the assessee. If that is true, where is the need for Smt Shah to be the signatory to the agreement in giving the property on monthly rent to the new tenants and why should there be a tripartite agreement? Letting off the impugned property becomes the matter for settlement between the landlord and the new tenant as per the terms and conditions of the land lord, which is not the case here.
In the books of account, assessee had made provision for doubtful debts for this amount. The matter is sub-judice before court or arbitration. This shows that the amount was not ascertained. It remained contingent at the relevant time. Moreover, it had been gone against assessee due to amendment in Act. The amendment made by inserting clause (i) in Explanation 1 to section 115JB by the Finance Act, 2009 with retrospective effect 1.4.2001, the amount set aside and provision for diminution in the value of an asset is to be added to arrive at the book profit under section 115JB of the Act. This empowers the Assessing Officer to add to income any amount debited in profit & loss account for provision of bad and doubtful debts.
There can be no concealment or non-disclosure, as the assessee had made a complete disclosure in the IT return and offered the surrendered amount for the purposes of tax and therefore no penalty under s. 271(1)(c) could be levied. The words ‘in the course of any proceedings under this Act’ in Sec. 271(1)(c ) of the Act are prefaced by the satisfaction of the AO or the CIT(A).
It was observed by the CLB that if the Appellants failed to cooperate with NHEL for the determination of the value of the occupied premises, including land, plant and machinery and do not accept the fair value of the assets determined, the petition shall be deemed to have been dismissed. The impugned order thus makes it impossible for the Appellants to even question the valuation. Having succeeded in demonstrating oppression by the Respondents, the Appellants cannot be compelled to accept an arbitrary and unilateral determination of the fair value by the Respondents not based on any sound financial and accounting principles. The remedy provided by the CLB has thus been rendered illusory.
Since the entire services were rendered outside India having nothing to do with the permanent establishment, there can be no taxability of this amount in India. Further in para (12) it has been held that the offshore services are inextricably linked to the supply of goods, so it must be considered in the same manner.
the commission or brokerage definition does not include transactions in securities. There is no doubt that Mutual Funds are categorised as securities on which there is no objection from the Revenue either before the A.O. or before the CIT(A). In fact the CIT(A) also gives a finding that the A.O. has not disputed that units of Mutual Funds are securities as per Securities Contracts (Regulation) Act, 1956. Assessee is in the business of Mutual Funds distribution and investment agent.
The words used in Article 12(1) was ‘paid to a resident of other contracting state’. The term royalties also means “payment of any kind received”. Since the word used in the DTAA is ‘paid’ or ‘received’, assessee’s contention that amounts cannot be taxed on accrual basis is correct. This interpretation is also supported by the decision of the Hon’ble Bombay High Court in the case of DIT (IT) v. Siemens Aktiengesellschaft ITA no 124 of 2010 dt.22.10.12 wherein the Hon’ble Bombay High Court on a question as follows:
