Friday, October 14, 2011

ITR (TRIB) Volume 11 : Part 8 Issue dated : 17-10-2011


ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))
Volume 11 : Part 8 (Issue dated : 17-10-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Business expenditure --Accrued or contingent liability--Legal and accounting, professional fees and consultancy fees--Sums not shown to have accrued in year in question--Not allowable--Income-tax Act, 1961, s. 40(a)(ia)-- Haworth (India) P. Ltd. v. Deputy CIT (Delhi) . . . 757

Deduction of tax at source --Non-resident--Payment to foreign company for provision of personnel to supervise and advise on erection of machinery in India--Amount not chargeable to tax in hands of foreign company under Double Taxation Avoidance Agreement--Assessee not liable to deduct tax at source before making payment--Income-tax Act, 1961, ss. 9(1)(vii), Expln. 2, 195(2)--Double Taxation Avoidance Agreement between India and Italy, arts. 5(2)(j), 13-- Aditya Birla Nuvo Ltd. v. Assistant Director of Income-tax (International Taxation) (Mumbai) . . . 812

Depreciation --Rate of depreciation--Uninterrupted power supply system and printers--Are computer peripherals eligible for depreciation at 60 per cent.--Income-tax Act, 1961, s. 32-- Haworth (India) P. Ltd. v. Deputy CIT (Delhi) . . . 757

International transactions --Transfer pricing--Arm’s length price--Comparison of uncontrolled transaction--Data relating to current year to be used--Single comparable instance sufficient--“Net profit margin realised”, means actual profits--Assumptions not permissible--Pre-operational expenses, how far to be considered--Expenses must have nexus with operation--Functional comparability--Company having substantial other segments not a comparable--Assumption with regard to capacity utilisation in case of comparable must be supported by evidence--Only one price determined by most appropriate method--Benefit of 5 per cent. adjustment not available--Income-tax Act, 1961, ss. 92C(iii), 144C--Income-tax Rules, 1962, rr. 10B(1)(e)(i), (4), 10D(1)(k)-- Haworth (India) P. Ltd. v. Deputy CIT (Delhi) . . . 757

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Double Taxation Avoidance Agreement between India and Italy :
Art. 5(2)(j) --Deduction of tax at source--Non-resident--Payment to foreign company for provision of personnel to supervise and advise on erection of machinery in India--Amount not chargeable to tax in hands of foreign company under Double Taxation Avoidance Agreement--Assessee not liable to deduct tax at source before making payment-- Aditya Birla Nuvo Ltd. v. Assistant Director of Income-tax (International Taxation) (Mumbai) . . . 812

Art. 13 --Deduction of tax at source--Non-resident--Payment to foreign company for provision of personnel to supervise and advise on erection of machinery in India--Amount not chargeable to tax in hands of foreign company under Double Taxation Avoidance Agreement--Assessee not liable to deduct tax at source before making payment-- Aditya Birla Nuvo Ltd. v. Assistant Director of Income-tax (International Taxation) (Mumbai) . . . 812

Income-tax Act, 1961 :

S. 9(1)(vii), Expln. 2 --Non-resident--Payment to foreign company for provision of personnel to supervise and advise on erection of machinery in India--Amount not chargeable to tax in hands of foreign company under Double Taxation Avoidance Agreement--Assessee not liable to deduct tax at source before making payment-- Aditya Birla Nuvo Ltd. v. Assistant Director of Income-tax (International Taxation) (Mumbai) . . . 812

S. 32 --Depreciation--Rate of depreciation--Uninterrupted power supply system and printers--Are computer peripherals eligible for depreciation at 60 per cent.-- Haworth (India) P. Ltd. v. Deputy CIT (Delhi) . . . 757

S. 40(a)(ia) --Business expenditure--Accrued or contingent liability--Legal and accounting, professional fees and consultancy fees--Sums not shown to have accrued in year in question--Not allowable-- Haworth (India) P. Ltd. v. Deputy CIT (Delhi) . . . 757

S. 92C(iii) --Transfer pricing--Arm’s length price--Comparison of uncontrolled transaction--Data relating to current year to be used--Single comparable instance sufficient--“Net profit margin realised”, means actual profits--Assumptions not permissible--Pre-operational expenses, how far to be considered--Expenses must have nexus with operation--Functional comparability--Company having substantial other segments not a comparable--Assumption with regard to capacity utilisation in case of comparable must be supported by evidence--Only one price determined by most appropriate method--Benefit of 5 per cent. adjustment not available-- Haworth (India) P. Ltd. v. Deputy CIT (Delhi) . . . 757

S. 144C --Transfer pricing--Arm’s length price--Comparison of uncontrolled transaction--Data relating to current year to be used--Single comparable instance sufficient--“Net profit margin realised”, means actual profits--Assumptions not permissible--Pre-operational expenses, how far to be considered--Expenses must have nexus with operation--Functional comparability--Company having substantial other segments not a comparable--Assumption with regard to capacity utilisation in case of comparable must be supported by evidence--Only one price determined by most appropriate method--Benefit of 5 per cent. adjustment not available-- Haworth (India) P. Ltd. v. Deputy CIT (Delhi) . . . 757

S. 195(2) --Deduction of tax at source--Non-resident--Payment to foreign company for provision of personnel to supervise and advise on erection of machinery in India--Amount not chargeable to tax in hands of foreign company under Double Taxation Avoidance Agreement--Assessee not liable to deduct tax at source before making payment-- Aditya Birla Nuvo Ltd. v. Assistant Director of Income-tax (International Taxation) (Mumbai) . . . 812

Income-tax Rules, 1962 :

R. 10B(1)(e)(i) --International transactions--Transfer pricing--Arm’s


length price--Comparison of uncontrolled transaction--Data relating to current year to be used--Single comparable instance sufficient--“Net profit margin realised”, means actual profits --Assumptions not permissible--Pre-operational expenses, how far to be considered--Expenses must have nexus with operation--Functional comparability--Company having substantial other segments not a comparable--Assumption with regard to capacity utilisation in case of comparable must be supported by evidence--Only one price determined by most appropriate method--Benefit of 5 per cent. adjustment not available---- Haworth (India) P. Ltd. v . Deputy CIT (Delhi) . . . 757

R. 10B(4) --International transactions--Transfer pricing--Arm’s length price--Comparison of uncontrolled transaction--Data relating to current year to be used--Single comparable instance sufficient--“Net profit margin realised”, means actual profits--Assumptions not permissible--Pre-operational expenses, how far to be considered--Expenses must have nexus with operation--Functional comparability--Company having substantial other segments not a comparable--Assumption with regard to capacity utilisation in case of comparable must be supported by evidence--Only one price determined by most appropriate method--Benefit of 5 per cent. adjustment not available-- Haworth (India) P. Ltd. v . Deputy CIT (Delhi) . . . 757

R. 10D(1)(k) --International transactions--Transfer pricing--Arm’s length price--Comparison of uncontrolled transaction--Data relating to current year to be used--Single comparable instance sufficient--“Net profit margin realised”, means actual profits--Assumptions not permissible--Pre-operational expenses, how far to be considered--Expenses must have nexus with operation--Functional comparability--Company having substantial other segments not a comparable--Assumption with regard to capacity utilisation in case of comparable must be supported by evidence--Only one price determined by most appropriate method--Benefit of 5 per cent. adjustment not available-- Haworth (India) P. Ltd. v . Deputy CIT (Delhi) . . . 757

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