The issue to be considered is whether the profit earned by the assessee from the activity of recruitment and training of personnel and supplying the data thereof to its parent company in US is eligible for deduction under sec.lOA or not read with the Board’s Circular dated 26.9.2000. In this connection, it would be worthwhile to consider first the role of the circulars issued by the Board.
Where income of the assessee having been determined by resorting to estimation, there is no scope for any further disallowance either in terms of section 40(a)(ia)/40A(3) or otherwise.
In Asia Satellite 85 ITD 478 the Tribunal held that the said receipts were taxable as ‘royalty’ having been paid in respect of a “process”. However, in PanAmSat 9 SOT 100 it was held that as in the term “royalty” in Art. 12 of the India-USA DTAA there was a ‘comma’ after the words “secret formula or process”, it was only a ‘secret process’ which would qualify as royalty and not what was provided by the assessee. To resolve the conflict, the issue was referred to the Special Bench. HELD, reversing PanAmSat:
Even if it is accepted that by a transfer of shares u/s 2(47), there is a transfer in the right to use the capital assets of the company, still s. 170 is not attracted because there is no “transfer of business”. A company is a juristic person and owns the business. The share holders are not the owners of the company. By a transfer of the shares, there is no transfer so far as the company is concerned.
The Assessing officer initiated proceedings for alleged violation of section 269SS of the Act in as much as the assessee accepted share application money being Rs.20,000/- in cash. Thereafter, penalty was imposed. On appeal, CIT(A) upheld the stand of the assessee that the amount received
Section 153A(1) contains non-obstante clause and hence provisions of this section will over-ride the provisions of section 139, section 147, section 148, section 149, section 151 and section 153 of the Act. Under section 153A(1) the assessing officer is empowered is empowered to issue notices to the assessee searched for a period of six year sin order to assess the income on the basis of material found during the course of search.
There is no rider u/s 54F that no deduction would be allowed in respect of investment of capital gains made on acquisition of land appurtenant to the building or on the investment on land on which building is being constructed.
Even if an asset is described as goodwill but it fits in the description of section 32(1)(ii), depreciation is to be granted on the same; the true basis of depreciation allowance is the character of the asset and not it’s description.
The CLB cannot exercise its inherent powers to pass orders without jurisdiction or in utter disregard to orders passed by the Supreme Court or the High Court; an interim order passed by the CLB without jurisdiction and without giving reasons and in utter disregard to the orders passed by the Supreme Court and the High Court cannot be sustained.
According to section 68 where any sum is found credited in the books of assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to Income-tax as the income of the assessee for that previous year.
