Thursday, December 10, 2009

INCOME TAX REPORTS (ITR) HIGHLIGHTS ISSUE DATED 14-12-2009 Volume 319 : Part 3

INCOME TAX REPORTS (ITR) HIGHLIGHTS

ISSUE DATED 14-12-2009

Volume 319 : Part 3

 

 

SUPREME COURT JUDGMENTS


F Valuation of goodwill : Value depends on nature of business : CED v. Nalini V. Saraf p. 303

F Claim to refund of income-tax pending adjudication on date of death : No property available at time of death : CED v. Nalini V. Saraf p. 303

F Deduction only on actual payment : Contribution to PF : Amendment to remove difficulty retrospective in nature : CIT v. Alom Extrusions Ltd. p. 306

F Interpretation of statutes : Strict construction not preferred where leads to unintended consequences : CIT v. Alom Extrusions Ltd. p. 306

F Government company : Object to do research, printing and publishing of text books for school students conforming to norms prescribed by Education Dept. of State : Is educational institution exempt from tax : Assam State Text book Production and Publication Corporation Ltd. v. CIT p. 317

HIGH COURT JUDGMENTS


F Incentive bonus to Divisional Officer of LIC is part of salary not entitled to deduction of expenses incurred to earn bonus : CIT v. Surendra Kumar Gupta (All) p. 253

F Finding that cash loans of Rs. 20,000 each taken from seven persons : S 269SS not applicable : CIT v. Madhukar B. Pawar (Bom) p. 255

F Delay in filing returns : Penalty waived : Interest should also be waived : Sandeep M. Shah v. V. D. Wakharkar (Bom) p. 259

F Failure to serve notice before passing order of rectification : Requirement of s 154(3) violated : Mintri Tea Co. P. Ltd. v. CIT (Cal) p. 264

F Disallowance of PF contribution cannot be made in proceedings u/s 154 by way of rectification of intimation u/s 143(1)(a) : Mintri Tea Co. P. Ltd. v. CIT (Cal) p. 264

F Cost of construction : Reference to VO : Tribunal justified in deleting addition made by AO on basis of valuation report : CIT v. Aar Pee Apartments P. Ltd. (Delhi) p. 276

F Reassessment : Tribunal finding facts had been disclosed and AO discovering subsequently that income had been assessed under wrong head : Notice not valid : Gujarat Fluorochemicals Ltd. v. Deputy CIT (Guj) p. 282

F Stock options not perquisites granted by assessee : Assessee not liable to tax deduction at source : CIT v. Wipro Ltd. (Karn) p. 289

F Dept. initiating proceedings u/s 132A : Criminal court has no power to release cash to complainant : Deputy Director I.T. (Investigation) v. State of Gujarat (Guj) p. 292

F Trade advances not given out of loan taken by assessee : Finding of fact : CIT v. Ms. Sushma Kapoor (Delhi) p. 299

F Borrowed funds utilised only for investments and such investments correlated with borrowed funds : Finding of fact : CIT v. Ms. Sushma Kapoor (Delhi) p. 299

F Assessee entitled to depreciation in respect of two flats having half share in both flats : CIT v. Ms. Sushma Kapoor (Delhi) p. 299

F Right to receive additional compensation : Tribunal setting aside Commissioner (Appeals) order : Tribunal's order attaining finality : AO making fresh assessment : Tribunal justified in dismissing Revenue's appeal as infructuous : CWT v. Smt. Chandan (All) p. 327

F Search and seizure : Income declared in revised return : Assessee entitled to retract from revised returns : CIT v. K. Venkatesh Dutt (Karn) p. 331

F Machinery on which additional depreciation claimed need not be related to article or thing produced : CIT v. VTM Ltd. (Mad) p. 336

AUTHORITY FOR ADVANCE RULINGS


F Non-resident entering into an agreement with Indian company non-exclusive irrevocable right to use know-how and transfer ownership in tread and sidewall design/patterns : Tax to be deducted at source at ten per cent. for amount excluding consideration for transfer of tread and sidewall design/patterns : International Tire Engineering Resources LLC, In re p. 228

F Royalty : Licence of know-how and technical information covering provision of contract services and assistance for marketing to Indian subsidiary : Rate of tax in India ten per cent. : Sumitomo Mitsui Construction Co. Ltd., In re p. 322

APPELLATE TRIBUNAL ORDERS


F Company : Book profit : AO directed to verify whether assessee complies with conditions specified in Expln. (iii) to sub-s (2) of s 115JB : Beck India Ltd. v. Deputy CIT (Mumbai) p. 253

F Addition based on values obtained from Sub-Registrar's office in preference to valuer's report : Acceptance of addition not amounting to furnishing of inaccurate particulars for levying penalty : Asst. CIT v. Mrs. N. Meenakshi (Chennai) p. 262

F Capital gains : No reference to valuation cell made : Asst. CIT v. Mrs. N. Meenakshi (Chennai) p. 262

F Non-resident companies providing transponder capacity to telecasting companies in India : Consideration paid amounts to royalty : Assessable u/s 9 and also under DTAA : New Skies Satellites N. V. v. Asst. Director of I. T. (International Taxation) (Delhi) [SB] p. 269

STATUTES


F Notifications :

Institutions approved by the Chief CIT, Jaipur/Udaipur/Jodhpur for the purpose of section 10(23C)(iv)/(vi)/(via)
p. 62

Scientific research association notified by the Central Government for purpose of s 35(1)(ii)
p. 57

JOURNAL


F Remuneration to working partner : Treatment under I. T. Act (Kanhayalal Sharma, Advocate and Tax consultant) p. 39

F Revaluation of assets of a firm and its taxability (Dileep Shivpuri, Commissioner of Income-tax) p. 29

NEWS-BRIEF


F Self-assessed tax defaulters face action as CBDT keen to meet targets

The Government has decided to crackdown on corporates and individuals that have defaulted on payment of their self-assessment in the year in a bid to boost direct tax collections that are well below the target for the year.

Direct tax collections need to grow at 18 per cent. over the remaining five months of the fiscal 2009-10 ending March 2010 for the Government to achieve its direct tax target for the year.

The Central Board of Direct Taxes-the apex direct tax body that administers corporate tax, personal income-tax and wealth tax-has asked its field officials to crack down on companies that have not paid self-assessed tax for the year.

Corporate taxpayers could not only receive demand notices but also a visit from the taxman itself as the I-T Department gears up for increased surveys and searches to nab evaders and boost tax collections. Self assessment tax is the amount payable by the taxpayer if his tax liability as assessed by him is more than the advance tax paid by him.

The board has circulated a detailed list of taxpayers, the amount of tax due from them, tax exemption claimed for the field officers to carry out detailed investigations and collect due tax. E-filing of tax returns is mandatory for all corporates and assessees who have to be submitting audited results. Any delay in self assessment tax attracts a 1 per cent. a month interest levy for the delay and some penalty. The board's letter to the field comes in the backdrop of a dismal 3.92 per cent. growth in direct tax collections in first seven months (April-October 2009) of the financial year.
[Source : www.economictimes.com dated November 30, 2009]

F Officers hearing transfer pricing cases kept out of dispute panel

To ensure impartiality in adjudication of transfer pricing disputes, the Central Board of Direct Taxes (CBDT) has decided that Commissioners associated with transfer pricing orders will not be part of the alternate dispute resolution panel. This panel is being set up by CBDT to resolve disputes arising from transfer pricing assessments.

Dispelling the apprehensions among senior tax professionals that the committee will be comprised predominantly senior officers who have powers to approve the transfer pricing assessments, CBDT chairman told that those Commissioners associated with transfer pricing assessments will be kept out of the panel.

The Union Budget had said that a collegium of Commissioners would be established for resolving tax disputes between India's tax authorities and multinational companies. The panel's decision is binding on the Income-tax Department that is not allowed to appeal against the order before the Income-tax Appellate Tribunal. However, the taxpayer is free to do so. The panel has the power to call for fresh evidence.
[Source : www.economictimes.com dated November 30, 2009]

F Raise tax exemption limit on personal income : clamour ASSOCHAM

Industry body ASSOCHAM asked the Government to raise the tax exemption limit on personal income from Rs. 1.6 lakhs per annum to Rs. 4 lakhs per annum and for senior citizens up to Rs. 5 lakhs per annum.

"With favourable consideration of this proposal, taxpayers in low and middle income group, who could end up paying more tax than now, on account of removal of various exemptions and deductions under DTC, can benefit from raise in threshold limit as tax savings on account of increase in it could offset impact of removal of exemptions and deductions," the ASSOCHAM President said.

Meanwhile, the industry body has also urged the Government to bring in standard deduction of 50 per cent. of the salary or Rs. 2,40,000, whichever is less to balance out additional tax burden, which employees would be facing due to removal of various exemption.
[Source : www.economictimes.com dated November 30, 2009]

 



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