Merely because the assessee had been permitted to establish a new industrial undertaking for the manufacture of computer software as 100% EOU under the STP scheme was itself not enough to record a finding that the said unit had in fact been established and was entitled to claim the exemption under s 10B — as held by Delhi High Court in CIT v Modi Xerox — In favour of Revenue.
Delhi High Court in the case of DCIT v. Cargill Global Trading (I) (P) Limited on the issue of whether discounting charges paid to a non-resident on discounting of bills of exchange (BEs) can be characterized as ‘interest’, liable for withholding held that the discounting charges are not in the nature of ‘interest’ since they are not payable in respect of money borrowed or debt incurred by the Taxpayer.
The Delhi Bench of the Income-tax Appellate Tribunal in the case of Tianjin Tianshi India Private Limited v. ITO, held that existence of actual cross border transaction and motive to shift profits outside India or evade taxes in India are not necessary pre conditions for Transfer Pricing (TP) provisions to apply.
Madras High Court has recently held in the case of CIT v R. Rajgopal [TS-222-HC-2011 (MAD)] that, as the salary was paid directly by the Indian subsidiary company, conditions of Article 16(2)(b) of the Indo-UK Treaty was not fulfilled. Accordingly, the taxpayer was not entitled to claim short stay exemption under Article 16(2) of the India-UK Treaty.
Hyderabad Distilleries And Wineries Pvt Ltd Vs DCIT (ITAT Hyderabad)- Whether selling and publicity expenses can be disallowed merely on the basis of statement of an auditor – Whether when the similar expenses were allowed by the AO to similar parties, no dis-allowance can be made only on the basis of assumptions and presumptions – Whether the dis-allowance made without giving the assessee an opportunity to cross examine the parties on the basis of whose statement the dis-allowance was made, is against the natural justice.
Reliance in this connection can be placed on the decision of Hon’ble Delhi High Court in case of Suresh Kumar Bansal vs UOI [W.P.(C) 2235/2011] wherein levy of Service Tax on the value of flats sold during construction stage has been held unconstitutional, if such value includes the value of Land.
Shanti Bhushan vs. CIT (Delhi High Court) -Delhi High Court has disallowed the income tax deduction for expenses incurred on heart surgery by eminent lawyer Mr. Shanti Bhushan. It was argued by Mr. Bhushan that he suffered a heart attack due to professional work and the expenditure incurred by him on a heart operation must be deductible under Section 31 of the Income Tax (I-T) Act.
Gajendra Kumar T Agarwal vs. ITO (ITAT Mumbai) -Assessee was eligible for setting of losses of business of dealing in derivatives, incurred in the assessment years prior to the assessment year 2006-07, against the profits of the same business in assessment year 2006-07.
Symantec software Solutions Pvt Ltd vs. ACIT (ITAT Mumbai)- The Mumbai bench of the Income Tax Appellate Tribunal (Tribunal) recently pronounced its ruling in the case of Symantec Software Solutions Private Limited, Mumbai (Taxpayer), on transfer pricing issues arising from provision of marketing support and consulting services by the Taxpayer to its Associated enterprise (AE). The Tribunal ruled in the favour of the Revenue for all issues except one issue which was decided in the favour of the Taxpayer.
CIT v Radhey Shyam Bansal and Others (Delhi HC) In the instant case, the referring AO has not recorded satisfaction that any undisclosed income belongs to the assessee. In the letter/communication dated 15 July 2003 by the referring AO to the AO of the assessee, there is no allegation that the assessee was provided with accommodation book entries or the amounts belong to the respondent-assessee. Book entries were provided to third parties. Though the referring AO wrote a letter to the assessee’s AO informing him that the assessee was providing bogus accommodation book entries and the quantum of transactions was given as per the Annexures, the Annexures were missing from the file. Thus, the appellant-revenue has not discharged the onus that there was valid satisfaction as required under s 158 BD. Therefore, the irresistible conclusion is the prerequisite of “satisfaction” as engrafted under s 158B for the purpose of the initiation of the block assessment proceeding is non-existent or absent.
