Wednesday, October 12, 2011

Direct Tax Laws Oct 2011 07

Even in a case of composite amount payment, unless assessee approaches the Officer for a certificate under section 195(2) for applying doctrine of proportionality, entire amount has to suffer for deduction under section 195(1) - [2011] 14 taxmann 73 (Madras)

Where undertaking in STPI zone is maiden business of assessee, and it was not formed by splitting/reconstruction of any existing undertaking, section 10A exemption will be available - [2011] 14 taxmann 68 (Karnataka)

Pending Larger Bench decision of Supreme Court on surcharge to be levied in case of block assessment, matter should be remanded - [2011] 14 taxmann 67 (Karnataka)

An erroneous assessment order cannot be subject matter for rectification under section 154 - [2011] 14 taxmann.com 61 (Madras)

Where overdraft was used for investment in shares of sister concern to have control over it, interest paid to bank would be deductible - [2011] 14 taxmann 58 (Bombay)

Collecting jewellery of 906.900 gms by a woman in form of 'stree dhan' or on other occasions such as birth of a child, etc. in a married life of 25 years is not abnormal and cannot be treated as unexplained jewellery under section 69A - [2011] 14 taxmann 57 (Delhi)

Company purchasing mutual funds from accumulated profit, is not to subject to section 14A disallowance of interest on borrowed capital - [2011] 14 taxmann 71 (Mumbai - Trib.)

Explanation under section 54F qua combined adjacent flats where assessee failed to establish that such construction was legally permitted by Municipal Authorities - [2011] 14 taxmann.com 70 (Mumbai - Trib.)

Reimbursement of medical expenses to employees is not liable to FBT.Refreshment snacks provided to customers by bank is not liable to FBT - [2011] 14 taxmann 65 (Bangalore - Trib.)

Where AO of non-resident contractor company issued certificate for 'NIL' deduction of tax at source under section 194C(4) from payment to be made to it and accordingly, assessee did not deduct tax from payments made, no penalty could be levied on ground that certificate was required to be obtained under section 195 as contractor company was a non-resident - [2011] 14 taxmann 60 (Ahmedabad - Trib.)

Where assessee-charitable society having applied more than 85 per cent of its income in terms of section 11, claimed depreciation on its fixed assets, there was no question of double deduction and, thus, assessee's claim was to be allowed - [2011] 14 taxmann 59 (Indore - Trib.)

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