Friday, 13 February 2015

Even statutory reserve created by NBFC was to be added back for computing book profits for MAT purpo

IT : For the purpose of section 115JB of the Act, statutory reserves (such as reserve required to be created by NBFC under section 45-IC of the RBI Act,1934) are to be treated alike and in a similar manner as other reserves. The reserve, which is required to be created under section 45-IC of the Reserve Bank of India Act, 1934 , is out of the profits earned by a non-banking financial institution. It is not an amount diverted at source by overriding title.


Delay in issue of completion certificate by local authority couldn’t be a ground to deny 80-IB(10) r

IT-I : Where two housing projects developed by assessee were sanctioned by a common approval by local authority, in view of fact that those projects were independent of each other, assessee's claim for deduction could be allowed for project in respect of which conditions specified in section 80-IB(10)(a)(i) were duly satisfied


No denial of credit on capital goods when depreciation wrongly taken on duty was reversed subsequent

Cenvat Credit : Where depreciation wrongly taken on duty element is reversed in subsequent year, credit taken on capital goods cannot be denied


Service tax paid on commission in respect of trading of goods isn't eligible for credit

Cenvat Credit : Service tax paid on commission in respect of trading goods is not eligible for credit because same is not in or in relation to manufacture of final products


ITAT rejected CUP method for royalty paid to AE as there was no comparable data of uncontrolled tran

IT/ILT : ITAT rejected CUP method for royalty paid to AE as there was no comparable data of uncontrolled transactions


Non-payment of security expenses to liquidator and making bogus claim amounted to contempt of Court

CL: Where while recalling order of winding up at instance of respondents, Court had directed respondents to pay charges for security of assets of respondent company by way of reimbursement to official liquidator, respondents by not reimbursing expenses were in palpable non-compliance and consequent compounded contempt of order of Court


No TP adjustment of interest when rate of interest charged to AE was more than LIBOR

IT/ILT : Where assessee charged interest on loan advanced to AE and interest charged was more than arm's length interest rate, adjustment on account of arm's length of interest was unwarranted


Sale of assets by a firm to a Co. would be chargeable to capital gain as it wasn't a case of success

IT: Where assessee firm sold its assets to a company and said transaction did not fall under section 47(xiii), assessee was liable to pay capital gains tax


Reference to TPO is invalid if made after expiry of time-limit for issuing sec. 143(2) notice

IT/ILT : Where issue of scrutiny assessment notice u/s143(2) is time-barred, AO cannot make a reference to TPO u/s 92CA. Reference u/s 92CA without issuing notice u/s 143(2) is invalid reference and order passed by TPO on invalid reference is non est and void ab initio. A nonest and void ab initio order passed by the TPO on 29.10.2010 determining the arm's length price u/s 92CA(3) of the Act cannot form a basis to formulate a belief that certain income chargeable to tax has escaped assessment wi


CLB couldn't direct investigation into affairs of a Co. which was merely a party to oppression proce

CL : While sections 235, 237 and 247(1) deal with investigation into affairs of a or any company and section 239 deal with investigation into affairs of a body corporate connected in specified manner with said company whose affairs are being investigated, section 247(1A) deals with investigation into affairs of the company which is subject matter of any proceedings pending before CLB


Pre-deposit had to be waived off when demand for earlier period was set aside in similar case

Service Tax : Where, for earlier period, demand was set aside on merits; then, for subsequent period, pre-deposit must be waived in full


No penalty if NR didn’t offer interest income from NRE a/c under impression that it’s exempt under S

IT : Where assessee did not offer interest income to tax received from his NRE fixed deposits account under a bona fide belief that his case was covered under section 10(4) no penalty could be imposed upon him


AO can estimate income of current year on basis of GP ratio of last year if books of account are rej

IT: Profits estimated in previous years is a safe guide for estimation of profits for assessment year in question for estimating turnover since business activity conducted by assessee remains same


RBI allows online reporting of FDI transactions under e-Biz platform

FEMA/ILT : FDI - Reporting under FDI Scheme on the e-Biz Platform


RBI eases curb on import; does away with requirement to submit Form A-1 for remitting forex above U

FEMA/ILT : Import of Goods into India


No penalty on disallowance of exp. when assessee had made bona-fide claim duly supported by genuine

IT : Where assessee's claim for expenses were supported by documents and non-genuineness of these document was not proved, no penalty could be levied under section 271(1)(c)


Failure to explain cash deficit in books of account during assessment invokes Sec. 68 addition

IT : Where there was no proper explanation for cash deficit in books of account and amounts were spent without there being any explained sources, same was to be covered by section 68


Mere closure of assessee's unit doesn't demonstrate undue hardship on assessee

Excise & Customs : While deciding stay application, Tribunal has to consider material placed by assessee on record to demonstrate undue hardship and then balance it with interest of revenue; Mere closure or then taking over by financial institution ipso facto is not sufficient to demonstrate undue hardship


Issuing of notice in winding up plea without any material evidence is a harsh call; to be avoided, s

CL : Issuing notice in a winding up petition, without any material evidence, is a drastic step which should be avoided


Sec. 10A relief allowable on gross export bills even if assesse later on adjusts it with overseas pa

IT: Where assessee received permission from RBI for netting off of payables abroad against import receivables, deduction under section 10A was to be allowed on total amount of gross bills which was received in convertible foreign exchange