DCIT Vs. Colgate Palmolive India Limited (ITAT Mumbai)- Camelot was a 100% subsidiary of the appellant and the appellant had deep business interest in Camelot. The main reason for setting up Camelot was to manufacture toothbrushes exclusively for the appellant. The appellant was relying upon Camelot for manufacturing of toothbrushes to be traded by the appellant. The entire investment in Camelot was made by the appellant only as a measure of commercial expediency to further its business objectives and were primarily related to the business operations of the appellant. At no point of time, the investments in Camelot was made or held with an intention to realize any enhancement in value thereof over a period of time or to earn dividend income. Rather the investments were made only to separately house an integral part of the business activity of the appellant, which essentially operated as a single unified business.
ACIT Vs. SKF Bearings India Ltd. (ITAT Mumbai) – Sections 54EC and 74 refer to capital gain arising from the transfer of a long term capital asset and not with respect to a short term capital asset. Further, section 112(1 )(b)(i) and (ii) specifically refers to only long term capital gains. Hence, where section 50 by a legal fiction, deems the income earned from a depreciable asset as short term capital gain, applying the tax rate specified for long term capital gains in section 112(1) would not arise. On a plain reading of section 50, the excess shall be deemed to be the capital gains arising from the transfer of a short term capital asset. The beneficial rate of tax @ 20% would not be applicable to capital gains arising on transfer of depreciable asset even though the asset was held for more than thirty-six months
Dive into the case of Demag Cranes & Components vs. DCIT, exploring provisions of 10B(1)(e)(iii) of the Income Tax Rules and TP adjustments.
Though there are nine grounds raised by assessee there are only two issues involved in this appeal. One issue in ground no.3 is relating to confirmation of dis allowance of Rs. 25,000/- made by AO and further enhancement of dis allowance by Rs. 1,56,609/- u/s 14A of the IT Act.
Nandi Steels Limited Vs The ACIT (ITAT Bangalore)- It is not in dispute that the land, building and bore well sold by the assessee were used by the assessee for its business purposes. It is also not disputed that these assets were fixed assets of the assessee. The only argument of the assessee has been that they have direct nexus with the business carried on by the assessee and therefore, are business assets and any gains from the sale of such assets would also have the character of business income.
The core issue that we are really required to adjudicate in this appeal is whether or not, on the facts and circumstances of this case, the assessee can be said to have a permanent establishment (PE)1 in India, and, if it is held that the assessee indeed has a permanent establishment in India how much profits can be taxed as being attributable to such a permanent establishment.
The course of events in the instant case shows that the assessee was really contemplating the construction of a residential house. This intention of the assessee is very clear from the fact that within days of the sale of her old property, the assessee had purchased the new site for constructing a residential house. The old property was sold on 8-6-2006. The new landed property was purchased immediately on 5-7-2006. The events of sale and purchase and their proximity clearly demonstrate that the assessee had purchased the property only for the purpose of constructing a residential house. The old property was sold for a consideration of Rs. 34,73,447, out of which the assessee was accountable for long-term capital gains of Rs. 32,77,450. The assessee has invested Rs. 33,88,160 for the purchase of the land, which is more than the quantum of long-term capital gains. This again demonstrates the fact that the assessee had arranged the transaction in such a bona fide manner so as to claim the exemption available under section 54F.
Briefly stated facts of the case are that the assessee company is engaged in the business of Trading in Electric Motors, Fans, Laboratory equipments and generation of Wind Power filed return declaring total income at Rs. 11,60,151/-. During the course of assessment proceedings, it was interalia observed by the AO that the assessee has claimed dividend income of Rs. 12,840/- being exempt u/s 10(34)
In Surat Electricity Co Ltd v. Asstt. CIT (2010) 35 DTR (Ahd) (Trib) 272 the assessee as per direction of the State Government supplied fodder to various cattle camps for maintaining smooth relations with the Government. In view of Explanation 5 to section 80 G it was held that the donation of grass fodder is not eligible for deduction. However, since it satisfied the test of commercial expediency it was held that it is allowable under section 37.
High Court was not justified in observing that since the been levied only against the owner of the vehicle and not against the person in-charge of the vehicle and, therefore, the judgment of the High Court cannot be sustained. ACTO Vs. Romesh Power Products P. Ltd. (Supreme Court)
