CA Terminal: 09/11/15

Friday 11 September 2015

ITAT applies results of MAP proceedings to hold that fee paid for strategic consultancy services isn

IT/ILT: In view of MAP proceedings settled between Government of India and Government of U.S.A., strategic consultancy services provided by assessee to its clients could not be held to be FTS/FIS and hence not taxable in India under article 12 of Indo-US DTAA

Suppliers placing e-bids in Railways tender from different locations couldn't be said to be involved

Competition Act: Where OPs were independent firms and had not co-ordinated in quoting prices in tender issued by Railways, OPs had not contravened section 3

Cutting of jumbo rolls of paper into smaller sizes and printing thereon doesn't amount to manufactur

Excise & Customs : Mere cutting of jumbo rolls of paper into smaller sizes and printing thereon by job-worker resulting into 'printed cork tipping paper' does amount to 'manufacture' for purpose of charging excise duty

Belated completion of block assessment couldn't be held as void if delay was attributable to assesse

IT : Where search was conducted on 31-1-2000, but assessee had not replied to notices under section 131 on four occasions, resulting in prolongation of search, consequent block assessment completed on 31-1-2002 could not be regarded as time barred

CIT couldn't make revision alleging incorrect accounting of stock when AO had made detailed inquiry

IT : Where Assessing Officer had made detailed enquiry with respect to clearance sales as well as depressed consideration at which assessee was forced to sell stocks, Commissioner could not make revision alleging incorrect accounting of stock

Outdoor catering services availed for employees were eligible for input service credit

Cenvat Credit : Outdoor catering services provided in assessee's factory for benefit of assessee's employees are eligible for input service credit, except upto extent cost thereof is borne by ultimate consumer/worker

Companies earning super profits can't be selected as comparables for a Co. having small turnover

IT : Where assessee, engaged in rendering software development services to its AE, had turnover of Rs. 47.46 crores, companies having turnover in excess of Rs. 200 crores could not be accepted as comparables while determining ALP

Not making a request to AAR on certain category of incomes couldn't be said to be a device to avoid

IT/ILT: Where assessee sought advance ruling on fees for technical services, however, it did not sought ruling on income from royalty and interest income; no ruling sought thereon was not a device to avoid tax as assessee had paid tax thereon, application was to be admitted

SEBI amends ICDR norms; allows participation of more Anchor investors in public issue

SEBI/INDIAN ACTS & RULES : SEBI (Issue of Capital and Disclosure Requirements) (Sixth Amendment) Regulations, 2015 – amendment in Schedule XI

CCI releases guidelines for assessing economic legislations from competition perspective

Competition Act/Indian Acts & Rules : COMPETITION COMMISSION OF INDIA (COMPETITION ASSESSMENT OF LEGISLATION AND BILLS) GUIDELINES, 2015

Payment to AE couldn't be said to be excessive if assessee and AE both were assessable at maximum ma

IT : Where assessee company as well as assessee's parent company, both were assessed to tax at maximum marginal rate, it could not be said that service charge was paid by assessee-company to parent company at unreasonable rate to evade tax

Belated payment of employee's PF contribution is disallowable even if paid before due date of filing

IT : Section 36(1)(va) and section 43B operate in different fields i.e. the former takes care of employee's contribution to provident fund and the latter employer's contribution to provident fund. Assessee is entitled to deduction u/s 43B only with regard to employer's contribution. Assessee entitled to deduction of employee's contribution to provident fund only if the same is paid within the due date provided u/s 36(1)(va)-i.e. within the due dates provided by the respective labour laws

Rental income constitutes business receipts if leasing is one of the objects in Memorandum

IT : Since the object in the Memorandum permitted the appellant to carry on business in letting out properties and as 85% of the income of the appellant was by way of deriving rent and lease rentals, the income from rent constituted the business income of the appellant. Since compensation paid by the appellant, the landlord of the premises, to obtain possession from the lessee/tenant so as to earn a higher rental income, it had arisen out of business necessity and commercial expediency.

Loss in one of the ventures of business won't be treated as capital loss

IT: Where assessee was in business of marketing bulk drugs, formulations, etc., and one of its ventures had ended in a loss and that loss was attributable to business, said loss would not be treated as capital expenditure

No penalty for wrong classification of goods when Tribunals have different interpretations on this i

Excise & Customs : Evasion penalty cannot be levied in case of technical or venial breach of law or breach arising out of a bona fide belief; hence, evasion penalty cannot be levied in matters of classification, if issue was subject to differing interpretations by Tribunal and matter was resolved by Larger Bench

Loss from derivative trading could be set-off against profit earned from dealings in commodity futur

IT : In view of provisions contained in sub-clause (d) to clause (5) of section 43, loss incurred from derivative trading could be set off against transactions of commodity future, and shares and on commission earned thereon

Co. providing translation services is comparable with a co. providing IT enables services

IT/ILT : In absence of adjustment of brought forward losses while computing deduction under section 10A in draft assessment order forwarded to assessee and in direction of DRP, Assessing Officer cannot make such adjustment in final assessment order which was passed consequent to direction of DRP

Goods meant for free supplies to poor were held to be eligible for excise exemption

Excise & Customs : Where Tribunal recorded a finding of fact that goods were actually supplied free to weaker section of society, exemption meant for 'free supplies to poor' could not be denied

Interest for default in payment of advance tax can't be levied on basis of retro-amendment in sec. 1

IT : Where Assessing Officer while making MAT calculation under section 115JB has also added expenditure disallowed under section 14A to book profit and on appeal Tribunal sent matter back to Assessing Officer for reconsideration after working out deduction in terms of section 14A read with rule 8D, no appeal could be entertained against Tribunal's order

ITAT devised new mechanism to calculate interest on refund of excess self-assessment tax

IT: Payment of excess self-assessment tax can't be regarded as payment of tax before processing of return under section 143(1). Thus, refund of excess self-assessment tax will not carry any interest from the date of payment but it will carry interest from the date of processing of return under section 143(1) till the date of granting of refund. Excess self-assessment tax, being not chargeable under Section 4(1), it cannot be regarded as payment of tax merely for the reason that the assessee has

Duty couldn't be levied since department failed to show any evidence to prove that goods were market

Central Excise : Where department did not lead any evidence to demonstrate that intermediate products were marketable, no duty could be levied thereon and therefore, assessee's appeal was allowed on this ground alone

AO gets flak from ITAT for issuing search notice in name of co. which ceases to exist after amalgama

IT : Where assessee-company ceased to exist after date of approval of its amalgamation with another company, issuance of notice under section 153C in name of non-existing company was void and, hence, same was to be quashed

Govt. extends tenure of Chairman and members of 'National Advisory Committee on Accounting Standards

COMPANIES ACT, 2013/COMPANIES ACT, 1956 : Section 133 Of The Companies Act, 2013, Read With Section 210a Of The Companies Act, 1956 - Central Government To Prescribe Accounting Standards – Constitution Of National Advisory Committee On Accounting Standards – - Notified Committee – Amendment In Notification No.So 2425(E), Dated 18-9-2014

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