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2023 (11) TMI 1006
Deduction u/s 80HHC - as per revenue gains from foreign currency fluctuation are not a profit derived from exporting goods/merchandise outside India, thus disallowed deduction - scope and meaning of the words derived from - assessee claims to be a 100% Export-Oriented Unit (EOU) - ITAT set aside the disallowance of the deduction claimed - HC allowed appeal of Revenue resulting in restoring the disallowance of the deduction u/s 80 HHC - HELD THAT:- The case at hand is of a credit of a certain percentage of foreign exchange earnings in an EEFC account, and the credited amount has appreciated in Rupee convertibility at the end of the financial year. The findings of fact on the nature of the investment and the circumstances in which gains are earned by the dealer, disallowing the deduction under Section 80 HHC, in the facts and circu....... + More
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2023 (10) TMI 981
Enforceability of treaty - Necessary notification not issued by the Government for brining the treaty into force - Most Favoured Nation (MFN) - Indian treaties with countries that are members of the Organisation for Economic Cooperation and Development ( OECD ) - protocol for changing terms or conditions in treaty - lowering of rate of taxation at source on dividends, interest, royalties or fees for technical services (hereafter FTS ) - bilateral treaties in question are between India and Netherlands, France, and Switzerland, respectively - whether there is any right to invoke the MFN clause when the third country with which India has entered into DTAA was not an OECD member yet (at the time of entering into such DTAA) - whether the MFN clause is to be given effect to automatically or if it is to only come into effect after a notifi....... + More
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2023 (10) TMI 786
Nature of expenses - apportioning the licence fee as partly revenue and partly capital - variable licence fee paid by the assessees under the New Telecom Policy, 1999 to Department of Telecommunications ( DoT ) - Allowability of revenue expenses u/s 37 or capital in nature [to be amortised u/s 35ABB] - migration to the Policy of 1999 - Whether the High Court of Delhi [ 2013 (12) TMI 1115 - DELHI HIGH COURT] was right in apportioning the licence fee as partly revenue and partly capital by dividing the licence fee into two periods, that is, before and after 31st July, 1999 and accordingly holding that the licence fee paid or payable for the period upto 31 July, 1999 i.e. the date set out in the Policy of 1999 should be treated as capital and the balance amount payable on or after the said date should be treated as revenue? HELD ....... + More
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2023 (10) TMI 630
Capital gain on sale of shares of Indian company by one Non resident to another Non resident outside India Withholding TDS u/s 195 - Whether transactions designed prima facie for avoidance of income tax under the Act? - As decided by HC [ 2014 (8) TMI 606 - DELHI HIGH COURT] gains arising from sale of a share of a company incorporated overseas, which derives less than 50% of its value from assets situated in India would certainly not be taxable under section 9(1)(i) of the Act read with Explanation 5 thereto and contention of the Revenue that the entire transaction of sale of Copal-Jersey shares has been structured in a manner so as to include the sale of shares in CRIL and Exevo-US by the Mauritian companies only to avoid the incidence of tax and take benefit of the DTAA is ex facie flawed. HELD THAT:- This application has been ....... + More
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2023 (10) TMI 572
Assessment u/s 153C and 153A - date referred under proviso to Section 153(1) - date with reference to which the proceedings for assessment or reassessment of any assessment year - assessees contended that the period for which they were required to file returns, commenced only from the date the materials were forwarded to their A.Os - Revenue urged that the date (relatable to the period for which six years returns were to be filed by the assessee) was to be from the date when the search and seizure proceedings were conducted, in respect of the main assessee u/s 132 - HELD THAT:- As on a plain interpretation of Section 153C(1) that the Parliamentary intent to enact the proviso was to cater not merely to the question of abatement but also with regard to the date from which the six year period was to be reckoned, in respect of which the ....... + More
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2023 (9) TMI 1231
Validity of Settlement Commission order - validity of immunity granted to the assessee - jurisdiction of the Settlement Commission in entertaining the application filed by the appellant u/s 245C(1) - Settlement Commission annulled the penalty levied by the AO u/s 271(1)(c) for the assessment year 1997- 1998 in respect of non-disclosure of lease rental income and same was annulled considering that the non-disclosure was on account of RBI guidelines and subsequent disclosure on the part of the appellant, of additional income of the lease income before the Settlement Commission when the appellant realised the omission to disclose the same as per income tax law. Whether the Division Bench of the High Court was right in affirming the findings of the learned Single Judge, to the effect that the Settlement Commission ought not to have exer....... + More
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2023 (9) TMI 850
Income taxable in India - dividend income earned by the assessee - such income is exempted under Omani Tax Laws - Entitlement to assessee to the benefits of India and Oman DTAA - HELD THAT:- As per letter of the Omani Finance Ministry that the dividend distributed by all companies, including the tax-exempt companies would be exempt from payment of income tax in the hands of the recipients. By extending the facility of exemption, the Government of Oman intend to achieve its object of promoting development within Oman by attracting investments. Since the assessee has invested in the project by setting up a permanent establishment in Oman, as the JV is registered as a separate company under the Omani laws, it is aiding to promote economic development within Oman and achieve the object of Article 8 (bis). The Omani Finance Ministry conc....... + More
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2023 (9) TMI 761
Deduction u/s 80P - assessee, a co-operative society - Whether entitled to claim deduction of the whole of its profits and gains of business attributable to the business of banking or providing credit facilities to its members who are all co-operative societies? - Whether the appellant is a co-operative bank within the meaning of sub-section (4) of Section 80P? - HELD THAT:- Sub-clause (1) of clause (a) of sub-section (2) of Section 80P recognises two kinds of co-operative societies, namely, (i) those carrying on the business of banking and; (ii) those providing credit facilities to its members. Clause (a) of sub-section (2) gives exemption of whole of the amount of profits and gains of business attributable to any one or more of such activities which are mentioned in sub-section (2). Sub-section (4) of Section 80P inserted by the....... + More
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2023 (8) TMI 925
Doctrine of mutuality - Interest earned on the bank deposits by clubs - Deposit of surplus funds by the appellant Clubs by way of bank deposits in various banks - whether, or not interest earned by the assessee on the surplus funds invested in fixed deposits with the corporate member banks is exempt from levy of income tax, based on the doctrine of mutuality? - High Courts in the impugned judgments have uniformly held that the interest earned on the bank deposits made by the clubs is liable to be taxed in the hands of the clubs and that the principle of mutuality would not apply - Whether the Order of this Court in Cawnpore Club [ 1998 (2) TMI 591 - SC ORDER] is a binding precedent which ought to have been taken note of and considered by a Co-ordinate Bench of this Court while deciding the case of Bangalore Club [ 2013 (1) TMI 343 -....... + More
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2023 (6) TMI 1047
Revision u/s 263 - period of limitation for passing order - reckoned from the date of the original assessment order or from the date of the reassessment order? - ITAT and High Court held that proceedings u/s 263 by the Commissioner as barred by limitation - HELD THAT:- The issues before the Commissioner while exercising the powers u/s 263 relate back to the original Assessment Order and, therefore, the limitation would start from the original Assessment Order and not from the Re-assessment Order. We are fortified with our view by the decision of Alagendran Finance Ltd. [ 2007 (7) TMI 304 - SUPREME COURT] as held once an Order of Assessment is re-opened, the previous order of assessment will be held to be set aside and the whole proceedings would start afresh but the same would not mean that even when the subject matter of re-assess....... + More
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2023 (5) TMI 746
Addition u/s 69A - Owner of valuable article - ambit of the word owner in section 69A - carriage contractor for bitumen - Allegation against the appellant that he had lifted 14507.81 metric tonnes of bitumen but delivered only 10064.1 metric tonnes. This meant that the appellant had not delivered 4443.1 metric tonnes. - whether the appellant could be treated as the owner of the bitumen? - HC confirmed the additions HELD THAT:- A bailee who is a common carrier would necessarily be entrusted with the possession of the goods. The purpose of the bailment is the delivery of the goods by the common carrier to the consignee or as per the directions of the consignor. During the subsistence of the contract of carriage of goods, the bailee would not become the owner of the goods . In the case of an entrustment to the carrier otherwise t....... + More
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2023 (5) TMI 587
Miscellaneous Application preferred by the Revenue - Reopening of assessment after assessments passed under 153A and 153C dismissed - Hon ble Court may clarify that the waiver of limitation as stipulated in section 150(2) is to be read in respect of the date of issue of notice for reassessment under section 148 (i.e.) if as on the date the assessment under section 153A or section 153C was passed, a notice under section 148 could have been issued as per the law then in force, then fresh proceedings for reassessment of such income not arising from the incriminating material found in search can now be initiated pursuant to the findings of this Hon ble Court in the present appeals/application - even though the appeals of the Revenue are dismissed in respect of assessments passed under 153A and 153C the assessing officers would be entitle....... + More
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2023 (5) TMI 284
Characterization of gain on sale of property - nature of transaction - transfer of capital assets or transfer of stock in trade - as argued transaction related to transfer of stock in trade and that the assessee had shown stock in trade/inventories year after year in its balance sheets and its contention was accepted by the Assessing Officer and twice the assessments were completed u/s 143(3) - ITAT concluded that what was sold by the assessee was part of its inventory and not a capital asset also confirmed by HC - HELD THAT:- From the order passed by the ITAT, it appears that the ITAT has without examining any of the relevant factors confirmed that the transaction was transfer of stock in trade. ITAT has not considered the relevant aspects/relevant factors while considering the transaction in question as stock in trade and has not c....... + More
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2023 (5) TMI 283
Exemption u/s 10(23C)(vi) - Commissioner was of the opinion that the activity of the respondent-assessee cannot be said to be solely for imparting the education and, therefore, not entitled to the benefit/exemption under Section 10(23C)(vi) - HC allowed exemption - HELD THAT:- In the recent decision of this Court in the case of New Noble Educational Society [ 2022 (10) TMI 855 - SUPREME COURT] it is specifically observed and held by the three-Judge Bench of this Court that for claiming the benefit/exemption u/s 10(23C)(iii)(ab) which is para materia to Section 10(23C)(vi) the activity of the assessee must be be solely for educational purposes and if ultimately it is found that the activity is for profits the assessee is not entitled to the exemption u/s 10(23C)(vi) of the Act. Applying the law laid down by this Court in the case of....... + More
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2023 (5) TMI 227
Income taxable in India - Income attributable to the operations carried out in India - Assessee is into business of providing electronic global distribution services to Airlines through what is known as Computerized Reservation System - In order to market and distribute the CRS services to travel agents in India, the respondents have appointed Indian entities and have entered into distribution agreements with them - Assailing the Judgment of the High Court, as argued learned Additional Solicitor General that the attribution of only 15% of the revenue as income accruing /arising in India within the meaning of Section 9(1)(i) read with Article 7 of the Treaty, was completely wrong. HELD THAT:- Under Explanation 1(a), what is reasonably attributable to the operations carried out in India alone can be taken to be the income of the b....... + More
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2023 (5) TMI 124
Validity of Settlement Commission order - Settlement Commission position to pass any appropriate order for proper settlement - Settlement Commission disposed of the proceedings and settled the undisclosed income and also passed an order that the CIT/AO may take such action as appropriate in respect of the matters, not placed before the Commission by the applicant, as per the provisions of Section 245F(4) - High Court [ 2017 (3) TMI 1918 - ALLAHABAD HIGH COURT ] has dismissed the writ petition on the ground that the order passed by the Settlement Commission was a nullity as the Settlement Commission itself observed that it was not practicable for the Commission to examine the records and investigate the case for proper Settlement and even giving adequate opportunity to the applicant and the Department, as laid down in Section 245D(4)....... + More
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2023 (4) TMI 1057
Loss of confiscation of silver bars by DRI officials - distinction between a claim for deduction of a loss incurred in an illegal business, as against a claim of a loss qua a legitimate business - Whether allowable business expenditure u/s 37(1)? - Addition u/s 69A as Assessee unable to explain the nature and source of acquisition of silver of which he is held to be the owner - investment in this regard was not found recorded in the books of accounts of the assessee that were produced before the then Assessing Officer - whether the High Court has erred in law in allowing the respondent assessee the loss of confiscation of silver bars by DRI officials as a business loss, relying upon the decision of this Court in the case of CIT Patiala vs. Piara Singh [ 1980 (5) TMI 2 - SUPREME COURT] ? - HELD THAT:- M. R. Shah, J. Judgment: - A....... + More
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2023 (4) TMI 1056
Scope of Assessment u/s 153A - competency of AO to consider all the material that is available on record, including that found during the search, and make an assessment of total income - assessment of completed assessments/unabated assessment - Whether in case any incriminating material is found during search then even completed assessments can be assessed or reassessed taking into consideration the incriminating material and other material in possession of the Assessing Officer? - HELD THAT:- We are in complete agreement with the view taken in the case of Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT ] and Saumya Construction [ 2016 (7) TMI 911 - GUJARAT HIGH COURT ] taking the view that no addition can be made in respect of completed assessment in absence of any incriminating material. When there shall be a block assessment....... + More
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2023 (4) TMI 859
Scrutiny by the High Court in an appeal u/s 260A for Determination of the arm s length price made by the Tribunal - whether in every case where the Tribunal determines the arm s length price, the same shall attain finality and the High Court is precluded from considering the determination of the arm s length price determined by the Tribunal, in exercise of powers under Section 260A? - HELD THAT:- There cannot be any absolute proposition of law that in all cases where the Tribunal has determined the arm s length price the same is final and cannot be the subject matter of scrutiny by the High Court in an appeal u/s 260A - When the determination of the arm s length price is challenged before the High Court, it is always open for the High Court to consider and examine whether the arm s length price has been determined while taking into con....... + More
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2023 (4) TMI 420
Deduction u/s 80-IB - receipts under the Duty Drawback Scheme (Duty Drawback) and on transfer of Duty Entitlement Pass Book Scheme (DEPB) - business of manufacturing and exporting wooden handicraft items - income taxable u/s 28(iiic) and 28(iiib) of the Act, 1961 - HELD THAT:- Section 80-IB provides for deductions in respect of profits and gains from certain industrial undertakings. Therefore, as such for claiming deductions under Section 80-IB, it must be on the profits and gains derived from industrial undertakings mentioned in Section 80-IB. An identical question came to be considered by this Court and, more particularly, with respect to the profit from DEPB and Duty Drawback Schemes, in the case of Liberty India [ 2009 (8) TMI 63 - SUPREME COURT] . Following the law laid down by this Court in the case of Sterling Foods, Mangal....... + More
