Problem of judgements without giving reasons continues :- Though the SC has criticised some high courts for writing judgements without giving reasons, the problem seems to continue. In the case of Tikaula Sugar Mills vs State of Uttar Pradesh, the Allahabad high court was asked to pass a reasoned judgement in the dispute. The high court had set aside the order of the Special Secretary, Government of Uttar Pradesh, without giving reasons. “In our considered view, the judge should not have set aside the order without assigning any reasons,” the SC said, and asked the high court to dispose of the case within a month.
Recently, the High Court of Punjab and Haryana (the High Court) in the case of CIT v. Rockman Cycle Industries Private Limited [201 1-TIOL-88-HC-P&H-IT-LB] held that if the taxpayers used certain devices to conceal true nature of the transaction, it was the duty of the taxing authority to unravel the device and determine its true character.
Non-referred international transactions fall outside the TPO’s jurisdiction . The Delhi Bench of the Income-tax Appellate Tribunal (the Tribunal) in the case of M/s. Amadeus India Pvt Ltd v. ACIT, Range-I, New Delhi (ITA No. 5203/Del/2010) held that the role of Transfer Pricing Officer (TPO) is limited to the determination of arm’s length price in relation to the international transaction(s) referred to him by the Assessing Officer (AO). The TPO, suo motto, cannot take cognizance of any other international transaction not referred to him by the TPO.
Income Tax Appellate Tribunal (“The Tribunal”), Delhi Bench recently pronounced its ruling in the case of M/s Aricent Technologies (Holding) Limited v. DCIT (Appeal no. ITA No. 4699 /Del. /2010) for AY 2006-07, on the amount paid as incentive to employees of the Taxpayer by its parent company pursuant to transaction of takeover for the employees’ retention. The Tribunal held in favor of the Taxpayer observing that transaction does not have any element of income for the purpose of making an adjustment to the price of the said international transaction and is merely in the nature of reimbursement of incentive paid by Taxpayer to its employees.
The Delhi bench of the Income Tax Appellate Tribunal (Tribunal) recently pronounced its ruling in the case of Birlasoft (India) Ltd. v. Dy. CIT ITA NO. 3839/DEL/2010, where the Taxpayer had determined the arm’s length price of their international transactions on the basis of internal benchmarking analysis. The Tribunal upheld the transfer pricing method followed by the Taxpayer whereby the net cost plus margin earned from rendering software development and related services (“software services”) to associated enterprises (AEs) were compared with the operating profit margin earned from rendering software services to unrelated parties.
Once a gift is complete, the same cannot be rescinded. For any reason whatsoever, the subsequent conduct of a donee cannot be a ground for rescission of a valid gift.
Mumbai ITAT has held in an important case namely Kumarpal Amrutlal Doshi vs. DCIT (ITAT Mumbai) that relief u/s 54EC shall be available even if the bonds are issued after the requisite period of 6 months for investment, if the cheque is issued within the period of 6 months but cheque is encashed after the requisite period and bonds are also issued after the requisite period of 6 months.
It is by now a settled law that the exemption notification has to be construed strictly and there has to be strict interpretation of the same by reading the same literally. In this connection reference can be made to the decision of this Court in Collector of Customs (Preventive), Amritsar vs. Malwa Industries Limited reported at (2009) 12 SCC 735 as also to the decision in Kartar Rolling Mills vs. Commissioner of Central Excise, New Delhi reported at (2006) 4 SCC 772 wherein also it was held by this Court that finding recorded by the Tribunal and the two authorities below are findings of fact and such findings in absence of evidence on record to the contrary is not subject to interference. In order to get benefit of such notification granting exemption the claimant has to show that he satisfies the eligibility criteria. Since the Tribunal and the authorities below have categorically held that the appellant does not satisfy the eligibility criteria on the basis of the evidence on record, therefore, we hold that the said exemption Notification is not applicable to the case of the appellants.
The short facts leading to the filing of the appeal put forth by the appellant, are set out hereunder:-(a) The second respondent is a private company incorporated on October 23, 1980. Late G. Kandaswamy was in charge of the second respondent-company and other group companies until his demise. The appellant could not involve in the day-to-day affairs of the second respondent-company and other companies as he had to travel to the United Kingdom often for his treatment. During the life time of the said G. Kandaswamy, respondents Nos. 3 and 5 have been actively involved in the day-to-day affairs of the company and running the same. The appellant is entitled to about 28.29 per cent. of the shares in the second respondent-company pursuant to the demise of his father. After the demise of his father, respondents Nos. 3 and 5 were running the second respondent-company as if it was their proprietary concern and the appellant was kept in isolation as regards the affairs of the company.
Eveready Industries India Ltd Vs CIT, Kolkata (Dated: March 04, 2011)- Income Tax – Sections 10(33), 14A, 94(7) – Whether dividend stripping is allowable – Whether a premeditated transaction by virtue of which an assessee earns tax free income and squares off profits with losses is permissible if it is within the four corners of law. – Assessee’s appeal allowed: CALCUTTA HIGH COURT;
