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Income Tax - Case Laws
Showing 1 to 20 of 641 Records
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2021 (3) TMI 1450
Pronouncement of decision after completion of hearing by Settlement Commission - Text of the order un/s 245D(4) was pending to be issued which has not been done till date - petitioners have in effect prayed for the writ of mandamus commanding the respondent No.1 to pass an order under section 245D(4) of the Income Tax Act, 1961 in accordance with law - HELD THAT:- We dispose of this petition with the direction to the respondent No.1- Settlement Commission to consider the facts as stated by the petitioner and as recorded in the above order and if they are found to be correct, it may proceed to pass/issue appropriate formal orders on or before 31.03.2021 and if such facts are not found to be correct, the Commission would be free to proceed in accordance with law in its own wisdom and discretion.
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2021 (3) TMI 1440
Accrual of income in India - Alleged Permanent Establishment ('PE’) in India of the Appellant under the Article 5(1) and 5(2)(i) of the India - UAE Tax Treaty (‘Tax Treaty’) - HELD THAT:- As decided in [2019 (12) TMI 1667 - ITAT DELHI] concurrent reading of the Strategic Oversight Agreements (SOA), the assessee has been technically operating the hotel belonging to the owners namely, Asian Hotels Ltd. (AHL) through the employees who are recruited by them. The hotel premises have been at the disposal of the assessee during their period of stay. The employees has stayed for a period of 158 days as per the assessee in India while rendering the services. In terms of OECD commentary on Article 5(1) the assessee can be said to be having a permanent establishment owing to existence of a place of business i.e. a facility such as premises, and that place was fixed and established as a distinct place with certain degree of permanence and the foreign enterprise (the assessee) is carrying the business through this fixed place i.e. the premises of the hotel. The assessee can be said to be dependent on the personnel to conduct the business of the foreign enterprise in the State in which the fixed place situated. The assessee is found to be meeting all these requirements stipulated in the OECD.
The place of business may also be situated in the business facilities of any other enterprise too. Thus, it can be said that the assessee who is running the business operations at the premises available for constant disposal in the hotel can be said to be a place of business. The availability of an office premises to a foreign company in the premises of the contracting party in order to ensure that both the parties comply with their obligations to the contract for a long period of time will constitute a permanent establishment. As long as, the premises is at the disposal of the assessee and having the right to use the premises for the purpose of the assessee’s business on behalf of the party to the agreement can constitute a fixed place PE. We also find that the physical criteria (existence of a geographical location), subject to criteria (right to use the place) and the functional criteria (carrying on the business through that place) as mentioned in the OECD principles with relation to the existence and determination of PE as held by the Mumbai Tribunal in the case of Air Lines Rotables Vs JDIT [2010 (5) TMI 683 - ITAT MUMBAI] have been found to be met by the assessee before us, so as to treat them as having a PE in India.
Attribution of profits to alleged PE of the Appellant in India inspite of entity level operating losses - alternative taxation of India source income as ‘Royalty’ under Section 9(1)(vi) of the Income Tax Act, 1961 (‘the Act’) and Article 12 of the Tax Treaty - For the sake of ready reference and convenience, operative part of the order [2019 (12) TMI 1667 - ITAT DELHI] as based on the clauses of the Strategic Service Agreement and Strategic Oversight Agreements, we hold that the revenue’s earned by the assessee are taxable under Article 12 of the DTAA. Regarding the determination of the profit, taken up at ground no. 4 by the assessee, we hereby hold that the taxable profits may be computed in accordance with the provisions of Section 44DA of Indian Income Tax Act and Article 12 of Indo-UAE, DTAA. During the arguments, it was also submitted that the assessee has incurred losses in the assessment year 2008-09. The assessed be given an opportunity of submitting the working of apportionment of revenue, losses etc. on financial year basis with respect to the work done in entirety by furnishing the global profits earned by the assesse, so that the profits attributable to the work done by the PE can be determined judiciously. The same may be considered while determining the taxable profits in India in accordance with the provisions of Section 90(2).
Appeal of the assessee is partly allowed.
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2021 (3) TMI 1436
Maintainability of appeal in Tribunal on low tax effect - HELD THAT:- The stand of the Revenue is that after circular no.17/2019, the Department has issued circular no.23/2019 dated 6.9.2019. According to the new circular certain classes of cases have been carved out from availing of the benefit of circular no.17 of 2019.
We have discussed this issue in our order [2020 (9) TMI 1252 - ITAT AHMEDABAD], and we have held that on 14.8.2019 when the appeals were dismissed on account of low tax effect involved in them by virtue of relief given by the CIT(A), the condition for exclusion of certain classes of cases was not available. Following our order extracted (supra), we find no merit in these misc. applications of the Revenue. They stand dismissed.
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2021 (3) TMI 1435
Disallowance u/s 14A r.w.r.8D - whether no exempt income is earned? - as per CIT(A) assessee has received dividend income from only one company - HELD THAT:- It is true that the assessee has earned dividend income which has been claimed as exempt. It is equally true that certain expenses need to be disallowed u/s 14A r.w.r. 8D of the Rules.
There is no dispute that the assessee has received dividend income only from one company, namely, Times of Money Ltd - AO should have considered only those investments which yielded exempt income. We find that the directions of the ld. CIT(A) are in consonance with the provisions of the law. We, therefore, do not find any reason to interfere with the same.
Disallowances of expenses - HELD THAT:- As CIT(A) noticed that similar issues were considered by the Tribunal in assessee’s own case in A.Ys 2006-07 to 2008-09 and following the findings of the Tribunal, the ld. CIT(A) deleted the same.DR could not bring any distinguishing decision in favour of the Revenue.
We find that the Tribunal [2017 (7) TMI 172 - ITAT DELHI] for A.Ys 2006-607 to 2008-09 has deleted the disallowance.
Depreciation on software licences @ 25% OR 60% - CIT(A) deleted the disallowance - HELD THAT:- CIT(A) found that similar issue was decided by his predecessor in A.Y 2009-10 [2022 (5) TMI 1591 - ITAT DELHI] in favour of the assessee - Since the deletion has been made following his predecessor, we do not find any error or infirmity in the findings of the ld. CIT(A).
Revenue appeal dismissed.
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2021 (3) TMI 1429
Disallowance u/s 14A r.w.r. 8D - sole objection raised by assessee is that rule 8D(2) of the Rules to section 14A of the Act has no application for the assessment year under consideration i.e., 2015-16, but the AO has wrongly applied - CIT(A) confirmed addition - HELD THAT:- We find that the order passed by the Ld. CIT(A) needs to consider afresh. Thus, we set aside the order passed by the Ld. CIT(A), and we remit the matter back to the AO for examination whether rule 8D(2) of the Rules applies to the present assessment year under consideration or not and decide the issue in accordance with law. Hence, the first ground of appeal allowed for statistical purpose.
Disallowance of depreciation on Printers, UPS, scanners and Router - @15% OR 60% - According to the AO, the depreciation is only allowable at 15% - HELD THAT:- As the computer accessories and peripherals cannot be used without computer as they are part of the computer system they are entitled to depreciation at a higher rate of 60%. We, therefore respectfully following the decisions M/s. Cholamandalam MS General Insurance Company Ltd. [2019 (2) TMI 1075 - MADRAS HIGH COURT] and BSES Yamuna Powers Ltd. held that the assessee is entitled for depreciation @ 60% - Decided in favour of assessee.
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2021 (3) TMI 1428
Benefit of VSV Scheme - HELD THAT:- When the matter was called for hearing, the ld. counsels for the assessee at the outset have submitted that they do not seek to pursue the said appeals owing to exercise of opt ion for availing VSV Scheme and consequently requested that their applications for withdrawal of appeals may please be granted. Reference was also made to written requests in this regard.
Revenue stated that he has no objection to withdraw the appeals in the circumstances narrated on behalf of the assessee. Thus appeals are dismissed as withdrawn.
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2021 (3) TMI 1425
Deduction u/s.80P(2)(d) - assessee received interest income being interest on savings account, term deposits and fixed deposits with Co-operative banks, sale of scrap, miscellaneous income, dividend and interest free tax free bonds - AO held that interest income received by the assessee from Co-operative bank does not fall in the exempt category as provided u/s.80P(2)(d) of the Act along with other income - HELD THAT:- As already stated that this issue is already decided in favour of the assessee by this Tribunal in assessee’s own case for A.Y.2015-16 as decided in the case of PCIT vs. Totagars Co-operative Sale Society [2017 (1) TMI 1100 - KARNATAKA HIGH COURT] has held that for the purpose of section 80P(2)(d) of the Act a cooperative bank should be considered as cooperative society. Similar view has been taken by the Hon'ble Gujarat High court in the case of Surat Vankar Sahakari Sangh Ltd. [2016 (7) TMI 1217 - GUJARAT HIGH COURT]
On the same issue in the case of PCIT vs. Totagars Co-operative Sale Society [2017 (7) TMI 1049 - KARNATAKA HIGH COURT] has taken a contrary view holding that interest income earned from deposit with the cooperative bank does not qualify for deduction under section 80P(2)(d). It would be relevant to mention here that the Hon'ble High Court while rendering later judgement has not considered the earlier decision rendered in the case of Totagars Co-operative Sale Society reported [2017 (1) TMI 1100 - KARNATAKA HIGH COURT]
No judgement from Hon'ble Jurisdictional High court on the issue of eligibility of deduction u/s 80P(2)(d) of the Act on interest income from cooperative bank has been brought to our notice. The Hon'ble Bombay High Court in the case of K. Subramanian Vs. Siemens India Ltd. [1983 (4) TMI 3 - BOMBAY HIGH COURT] has held that when two conflicting decisions of non-jurisdictional High courts are available, the view which is in favour of the assessee, is to be preferred. Decided in favour of assessee.
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2021 (3) TMI 1423
Addition u/s 14A r/w rule 8D - mandation of earning of any income which is exempted from tax - HELD THAT:- As no dividend or exempt income was claimed by the assessee during the relevant previous year. It is well settled in law that if no exempt income has accrued to the assessee, the provisions of Section 14A do not apply to the fact situation of the case. See M/S STERLING DEVELOPERS PVT. LTD [2021 (3) TMI 1422 - KARNATAKA HIGH COURT] - Decided in favour of assessee.
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2021 (3) TMI 1422
Disallowance u/s 14A r.w.r. 8D - expenses which are relatable to earnings of exempt income - HELD THAT:- As decided in own case [2021 (2) TMI 588 - KARNATAKA HIGH COURT] no dividend or exempt income was claimed by the assessee during the relevant previous year. It is well settled in law that if no exempt income has accrued to the assessee, the provisions of Section 14A do not apply to the fact situation of the case. See case NOVELL SOFTWARE DEVELOPMENT (INDIA) PVT [2021 (2) TMI 145 - KARNATAKA HIGH COURT] Decided in favour of assessee.
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2021 (3) TMI 1420
Review petition - Depreciation on computers disallowed u/s 40(a)(ia) - decision of this Court in 'M/s. WIPRO LTD. [2015 (10) TMI 826 - KARNATAKA HIGH COURT] does not apply to the case of the assessee - HELD THAT:- From perusal of the judgment [2020 (12) TMI 738 - KARNATAKA HIGH COURT] it is clear that we have not expressed any opinion as to whether or not the decision of M/s. WIPRO LTD., supra apply to the case of the assessee. Therefore, it is clarified that it would be open for the assessee to contend before the Tribunal that the aforesaid decision does not apply to the case of the assessee.
With the aforesaid clarification, review petition is disposed of.
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2021 (3) TMI 1419
Assessment u/s 144C - time limit prescribed for competing of assessment proceedings u/s 153 - no draft assessment order could have been issued in this case - HELD THAT:- There is no dispute that if there would not have draft assessment order, the assessment would have been time barred as on 31.12.2016, the present assessment order dated 16.10.2017. Once, we hold that no draft assessment order would have been issued in this case as the provisions of Section 144C(1) of the Act could not have been invoked in this case. The time limit for completion assessment was available only to 31.12.2016, hence, we are of the view that the issuance of draft assessment order cannot end up increasing the time limit for completion of the assessment under section 143(3) of the Act. This issue has been adjudicated by the co-ordinate bench of this Tribunal in the case of IPF India Property Cyprus (No.1) Ltd.[2020 (2) TMI 1500 - ITAT MUMBAI]
We noted that in the present case neither the learned Sr. DR nor the assessee has disputed the fact and there is proposed variation in the income or losses reported by the assessee to the Income Tax Authorities. The matter before the Assessing Officer was only with respect to the rate of tax chargeable by the assessee and actually there is no variation in income or losses - we allow this additional ground of the assessee and hold that the assessment framed by Assessing Officer is time barred and hence quashed.
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2021 (3) TMI 1417
Levy of late filing fee u/s. 234E r.w.s. 221(1) - Intimation u/s 200A - As contended that prior to the amendment u/s. 200A w.e.f. 1.6.2015, levy of fee u/s. 234E during processing of the TDS statement was not tenable - HELD THAT:- Issue of amendment in Section 200A(1) of the Act has become very much a debatable issue, we therefore AO while processing the TDS statements, returns in the present set of appeals of the period prior to 1.6.2015, ought not to have charged fee u/s. 234E hence, the intimation issued by the AO u/s. 200A of the Act, in the appeals before us, does not stand, therefore, the demand raised by way of charging fee u/s. 234E of the Act is not valid and the same is deleted for the prior period 1.6.2015, is beyond the scope of adjustment provided u/s. 200A of the Act. The impugned demands are delete therefore. Assessee appeal allowed.
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2021 (3) TMI 1416
Condonation of delay filling appeal before ITAT - Late fee u/s. 234E - delay in filing the TDS statement - intimation u/s. 200A - assessee’s contention before CIT(A) was that the provisions of section 234E of the Act was inserted by the Finance Act, 2012 w.e.f. 1.7.2012 - CIT(A) has proceeded to hold that the Assessee is guilty of negligence on a presumption that the Assessee must be conversant with operating TDS return on the website of the Department and that the intimation u/s.200A could not have escaped his attention - HELD THAT:- In a case like this the benefit of doubt should go to the Assessee. Therefore, the Assessee is not guilty of negligence and the delay was due to bonafide reasons.
As per the ratio laid down by the Hon’ble Supreme Court in the case of Collector of Land Acquisition Vs. Mst. Katiji & others [1987 (2) TMI 61 - SUPREME COURT] delay should be condoned where there is no negligence. The Hon’ble Apex Court has emphasized that substantial justice should prevail over technical considerations. The Court has also explained that a litigant does not stand to benefit by lodging the appeal late. The Court has also explained that every day’s delay must be explained does not mean that a pedantic approach should be taken. The doctrine must be applied in a rational common sense and pragmatic manner.
in the case of MSV IT Solutions Ltd. [2018 (10) TMI 1774 - ITAT HYDERABAD] wherein on identical facts noticing that there was no legal remedy prior to 1.6.2015 against an intimation u/s.200A of the Act, the Hyderabad Bench condoned delay in filing appeal before CIT(A).
Thus reasons given by the Assessee for condonation of delay and keeping in mind that technicalities should not stand in the way of rendering substantive justice, we are of the view that the delay in filing the appeals deserves to be condoned. Direction to decide the appeals of the Assessee on merits - Appeals by the assessee are treated as allowed for statistical purpose.
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2021 (3) TMI 1414
Assessment u/s 153A - approval by the JCIT as required u/s 153D - Prior approval necessary for assessment in cases of search or requisition - HELD THAT:- From the correspondence between the A.O. on one hand and the JCIT on the other hand and the letter addressed by the JCIT to the Commissioner clearly shows that it was at the stage of discussion and the JCIT could not able to make his mind. Ultimately he simply says that due to shortage of time as he was holding charges for six ranges, it is not possible for him to go into the material deep, therefore, he approved the proposal technically as required u/s 153D of the Act, immediately, after the AO brings to his notice that the assessment is getting time barred.
JCIT has not applied his mind even though there was a discussion between the A.O. and JCIT, the JCIT could not make his mind. Hence, this kind of casual approval/technical approval without going to the matter and without applying his mind to the material available on record is not an approval at all. Therefore, A.O. has no jurisdiction to pass the assessment order. In other words, the assessment order passed by A.O. as confirmed by C.I.T.(A) is void, nullity, non-est, hence, cannot be stand in the eye of law.
An irregularity in the assessment order may be rectified by remitting back the matter to the assessing officer. In the case on hand it is not an irregularity in the assessment order, it is a jurisdictional error. A.O. has no jurisdiction to pass the assessment order unless the JCIT granted approval.
This Tribunal is of the considered opinion that this is not a rectifiable error since it is a jurisdictional error and not an irregularity in the assessment proceeding. Moreover, even if the matter is remitted back, the AO cannot do anything better, since time limit provided under the Act has already expired. Therefore, this Tribunal is unable to uphold the orders of the lower authorities. Accordingly, the orders of both the authorities below were set-aside and the entire assessment order as confirmed by C.I.T.(A) are quashed. Decided in favour of assessee.
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2021 (3) TMI 1411
TP adjustment - Comparable selection - functional dissimilarity - HELD THAT:- Celestial Biolabs Ltd, company is into product development. It is also to be noted, though this company is providing various kinds of services and also developing products; however, segmental details of the services provided and products developed are not available in public domain. Considering these aspects, the co-ordinate bench of this Tribunal in case of UCB India Pvt Ltd vs Addl.CIT [2016 (7) TMI 1445 - ITAT MUMBAI] has rejected this company as comparable to a software development service provider. Thus reject this company from being treated as a comparable to the assessee.
E-zest solutions Ltd. provided high-end ITES to its AEs and segmental information regarding various services provided are not available in public domain. Considering the fact that the aforesaid company is engaged in providing high-end ITES or knowledge process outsourcing (KPO) services, it has been rejected as a comparable to a software development service provider in the above referred decisions. Since, the aforesaid decisions cited before us pertain to the very same assessment year and there is no major change in the factual position, following these decisions, we reject this comparable.
Acropatel Technologiies Ltd - TPO in case of the present assessee, while selecting comparable companies, he has applied certain filters, which include Income from software development services more than 75% of the operating revenue and Employee cost to operating revenues more than 25%.
On perusal of the annual report of the company placed in the paper book, the contention of learned Senior Counsel appears to be correct. Further, it is observed, while considering similar objections raised on behalf of the assessee in case of Accenture Services Pvt Ltd [2018 (7) TMI 1877 - ITAT MUMBAI] Tribunal has excluded this company from being treated as comparable as it does not qualify the aforesaid filters. The same view has been re-iterated by the co-ordinate bench in case of Dialogic Networks (India) Pvt Ltd [2018 (7) TMI 1878 - ITAT MUMBAI] Following the aforesaid decisions of the co-ordinate bench, we direct the assessing officer to exclude this company from the list of comparables.
Softsol India Ltd. - In our considered opinion, assessee’s contention that certain adjustments have to be made in computing the margin of this company, requires consideration. In case of Dialogic Networks (India) Pvt Ltd [2018 (7) TMI 1878 - ITAT MUMBA] which is for the very same assessment year, the Tribunal while accepting similar claim made by the assessee, has directed the assessing officer to compute the margin of this company at 15%. Therefore, following the aforesaid decision of the co-ordinate bench, we direct the assessing officer to compute the margin of this company at 15%.
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2021 (3) TMI 1410
Correctness/validity of an order u/s 127 - power of transfer of case - Department proposes to transfer the PANs of the petitioners from Income Tax Officer, NCW 5(2) to Deputy Commissioner of Income Tax/Assistant Commissioner of Income Tax, Central Circle 18, New Delhi - As per petitioner request for the supply of reasons for transfer were never considered - HELD THAT:- The files were thus called for and the reasons have been supplied in a sealed cover. A perusal of the same would indicate that the transfer is to facilitate a proper assessment of all the group entities that were subject to search proceedings and this is in line with Board's Instruction bearing No.8 dated 14.08.2002.
As a matter of policy, the Central Board of Direct Taxes has decided upon centralisation of all search assessments in one charge granting discretion to the concerned Director General of Income Tax (Inv.)/Chief Commissioner of Income-Tax (Central) to deviate from such a decision (not to centralize a search case) on account of work load, low investigation potential or tax impact of any of the entities of the group.
A policy decision such as the above, is in public interest and intended to facilitate proper assessment of search cases, as it is expected that the issues arising from these matters may be intertwined or inter-connected, thus find no reason to interfere in this policy.
As far as post search assessments are concerned, I am given to understand that the assessments will continue to be framed by the Officer to whom charge is entrusted upon centralization. It stands to reason that the central charge is decentralised as soon as possible in order that normalcy may resume.
Reasonable opportunity of being heard in order to effectively show cause against the proposed transfer - It is a settled proposition that in case of transfer, such opportunity has to be extended. However, two distinguishing factors would be that in the case of Vijayasanthi (1990 (11) TMI 139 - ANDHRA PRADESH HIGH COURT] entity in question was not part of the group of entites searched but a standalone assessee whose assessment was proposed to be transferred. The second distinguishing factor is the decision was rendered on 15.11.1990 prior to the issuance of instructions by the Central Board of Direct Taxes in the year 2002. WP dismissed.
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2021 (3) TMI 1408
Withholding obligation u/s 195 from payments made on account of software - whether learned CIT(A) was justified in holding that “no tax is deductible on the payment/credit made by the appellant to SDL for software”? - HELD THAT:- The issue is, however, no longer res integra. In the recent case of Engineering Analysis Centre of Excellence Pvt Ltd [2021 (3) TMI 138 - SUPREME COURT] Hon’ble Supreme Court has finally resolved this issue in favour of the assessee and held that the assessee does not have any tax withholding obligation under section 195 from payments made on account of software.
We uphold the conclusions arrived at by the learned CIT(A) and decline to interfere in the matter.
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2021 (3) TMI 1406
TP Adjustment - arm’s length price towards payment of royalty - HELD THAT:- We find that while deciding identical issue in assessee’s own case in A.Y. 2010-11 [2019 (5) TMI 1719 - ITAT MUMBAI] the co-ordinate bench has restored the issue back to the assessing officer for fresh adjudication with certain directions. Following the aforesaid order, the Tribunal, while deciding identical issue in assessee’s own case in assessment years 2011-12 and 2013-14, [2020 (1) TMI 722 - ITAT MUMBAI] has restored the issue to the assessing officer for fresh adjudication.
Nature of receipt - Industrial promotion subsidy received under the Government of Maharahstra Tech Scheme of Incentives 2007 as a capital receipt - HELD THAT:- As relying on [2020 (1) TMI 722 - ITAT MUMBAI]DRP has made a categorical observation that various evidences were not furnished by the assessee to support its claim, we are of the view that the entire issue relating to assessee's claim of Sales Tax refund / subsidy being a capital receipt requires fresh consideration in the light of various documentary evidences, including, the MoU between the Government of Maharashtra and M&M - assessee is also required to meet the allegation of learned DRP that various documentary evidences were not furnished to support its claim. The assessee is also required to properly explain the impact of the observations made in Annexure-C to the eligibility certificate regarding eligibility of the assessee for payment of IPS. Since, all these aspects have not been considered properly for whatever may be the reason, we are inclined to restore this issue to the file of the Assessing Officer for de novo adjudication after providing reasonable opportunity of being heard to the assessee. The assessee is at liberty to furnish further evidences, if required, to prove its claim. The Assessing Officer must consider not only the evidences filed but also the submissions made by the assessee while deciding the issue.
Thus we restore the issue back to the file of the assessing officer, for fresh adjudication, keeping in view the directions of the Tribunal in the order referred to above and only after due opportunity of being heard to the assessee. This ground is allowed, for statistical purpose.
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2021 (3) TMI 1403
TP Adjustment - Comparable selection - HELD THAT:- Companies functionally dissimilar with that of assessee need to be deselected.
Deduction u/s 10AA - reducing the communication expenses and insurance charges from the export turnover while determining the adjusted export turnover for computing the eligible deduction u/s 10AA - HELD THAT:- DRP following the jurisdictional High Court judgment in the case of CIT v. Tata Elxsi Ltd [2011 (8) TMI 782 - KARNATAKA HIGH COURT] directed the AO to reduce the impugned expenses both from the export turnover as well as the total turnover. Further, the judgment of the Hon’ble Karnataka High Court has been upheld by the Hon’ble Supreme Court in the case of CIT v. HCL Technologies Ltd.[2018 (5) TMI 357 - SUPREME COURT].
TDS u/s 195 - disallowance by invoking the provisions of section 40(a)(i) on import of software taxes were deductible at source u/s. 195 - whether the software was purchased for use, the transaction was in the nature of purchase of product and there were no taxes deductible at source - HELD THAT:- This issue is covered by the latest judgment of the Hon’ble Supreme Court in the case of Engineering Analysis Centre of Excellence (P.) Ltd. [2021 (3) TMI 138 - SUPREME COURT] wherein it was held that transaction relating to software are in the nature of sale and not license, no copyright or part of any copyright is licensed to the assessee. The non-resident owner continues to have proprietary rights in the software and use of software by the Indian company is limited to making back-up copy and redistribution. So payment received for sale of computer software is business income. As such, software purchased is in the nature of purchase and sale of product and no TDS is deductible. Accordingly, we allow this ground of appeal by the assessee.
Nature of expenditure - expenditure on purchase of software - HELD THAT:- As software expenditure has to be treated as revenue expenditure. Accordingly there is no question of granting any depreciation and purchase of software has to be allowed as a deduction, though there was no TDS made by the assessee.
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2021 (3) TMI 1402
Settlement Commission to issue formal orders - only text of the order u/s 245D(4) of the Act, 1961 was pending to be issued which has not been done till date - HELD THAT:- The facts stated by the petitioners can only be verified by the Settlement Commission, it may be left at the discretion of the Settlement Commission to take a decision whether such facts are correct or not and accordingly, the Settlement Commission may proceed with the matter. We have also considered the contents of the Finance Bill 2020-21 and the relevant provisions therein but as the said Bill has still not been enacted, the position which stands is to be taken as in the absence of the contents of the said Bill.
Considering the above facts and circumstances, we dispose of this petition with the direction to the respondent No.1- Settlement Commission to consider the facts as stated by the petitioner and as recorded in the above order and if they are found to be correct, it may proceed to pass/issue appropriate formal orders on or before 31.03.2021 and if such facts are not found to be correct, the Commission would be free to proceed in accordance with law in its own wisdom and discretion. Direct service is permitted.
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