DIT vs. GE Packaged Power Inc (Delhi High Court)
S. 234B: View in Alcatel Lucent that assessee must pay interest for short-fall of advance-tax if it induced payee not to deduct TDS cannot be followed. View in Jacobs that has to be followed because obligation of payer to deduct TDS is absolute & not dependent on assertion of payee. Impact of Proviso to s. 209(1) inserted by FA 2012 w.e.f. 1.4.2012 considered
This Court respectfully cannot apply the view taken in Alcatel Lucent to this case. This is because if the payer deducts tax at source only when the assessee admits tax liability, then deductions would not be made in cases where the assessee either falsely or under a bona fide mistake denies tax liability. Tax obligations cannot be founded on assertions of interested parties. In such cases, the payer’s obligation to deduct tax would depend on the payee’s opinion of whether it is liable to tax, which may differ from its actual liability to tax as determined by the AO’s final order. This effectively authorizes the assessee and the payer to contract out of the statutory obligation to deduct tax at source, which in this case, is located in Section 195(1). Surely this could not be the Parliamentary intent
Daga Global Chemicals Pvt. Ltd vs. ACIT (ITAT Mumbai)
Disallowance u/s 14A r.w. Rule 8D cannot exceed the exempt income
The assessee only received Rs.1,82,362 as dividend income, therefore, there is no question of disallowance of Rs.14,58.412 by invoking section 14A r.w. Rule 8D. Disallowance u/s 14A r.w. Rule 8D cannot exceed the exempt income.
CIT vs. Bougainvillea Multiplex Entertainment (Delhi
High Court)
Entertainment tax subsidy is a capital receipt even though the source is the public who visit the cinema hall after it becomes operational
A subsidy of such nature cannot possibly be granted by the Government directly. Entertainment tax is leviable on the admission tickets to cinema halls only after the facility becomes operational. Since the source of the subsidy is the public at large which is to be attracted as viewers to the cinema halls, the funds to support such an incentive cannot be generated until and unless the cinema halls become functional
S. Uma Devi vs. CIT (ITAT Hyderabad)
S. 54F is a beneficial provision which has to be construed liberally. Even if construction/ purchase of new house is not completed within stipulated period, deduction is admissible if investment is made
If the assessee has invested the money in construction of residential house, merely because the construction was not complete in all respects and it was not in a fit condition to be occupied within the period stipulated, that would not disentitle the assessee from claiming the benefit under section 54F
Army Welfare Placement Organization vs. DIT (E) (ITAT
Delhi)
S. 2(15): Receiving fees simplicitor is not reason enough to hold that the activity is not a charitable activity. The fundamental essence of the activity has to be seen
The true test for deciding whether an activity is business activity is (i) whether the said activity undertaken with a profit motive, or (ii) whether the said activity has continued on sound and recognized business principles, and pursued with reasonable continuity. In a situation in which an activity is not undertaken with a profit motive or on sound and recognized business principles, such an activity cannot be considered to be a business activity
ITW India Limited vs. ACIT (ITAT Delhi)
S. 92C: Transactions which are not closely linked cannot be aggregated for determining ALP. Cherry-picking is not allowed. If there are a number of comparable uncontrolled transactions, the average price has to be taken
The mandate of this section is to determine the ALP of ‘an’ international transaction. The term ‘transaction’ has been defined under rule 10A(d) to mean ‘a number of closely linked transactions’. It follows that the ALP of more than one transaction can be determined as one unit, only if they are closely linked transactions. In such a case, the plural of international transactions shall be considered as a singular for the purposes of benchmarking as a single transaction
AT & S India Pvt. Limited vs. DCIT (ITAT Kolkata)
S. 9(1)(vii): Reimbursement of expenditure under cost-sharing agreement does not constitute "income" and there is no obligation to deduct TDS u/s 195
A perusal of the decision of the Supreme Court in Tejaji Farasram Kharawalla Limited (1967) 67 ITR 95 (SC) clearly shows that Supreme Court has categorically held that the reimbursement of the actual expenses would not be taxable in the hands of the person receiving the reimbursements
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