Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Forum Articles Highlights TMI Notes SMS News What's New Calendar Imp. Links Database More...
Extracts
Home List
← Previous Next →

Commissioner of Income Tax, Chennai Versus M/s. Southern Petrochemical Industries Corporation Ltd.

Expenses incurred under the head 'market research' - revenue v/s capital expenditure - Tribunal held it as revenue - Held that:- The main parameters that are necessary for the expense to be treated as revenue expenditure is where expenses are incurred in areas which supplement the existing business and is not a fresh or new venture and agreement relates to revenue and the said activity is for the purposes of improving the operations of the existing business, its efficiency and profitability from .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ly attracted to the facts of the present case, justifying the loss of the assessee as a business loss, as admittedly, the assessee is in the business of marketing bulk drugs, formulations, etc., and one of its ventures has ended in a loss and that loss is attributable to business and it cannot be deemed to be a new enterprise and a capital expenditure. Thus the order passed by the Tribunal requires no interference.- Decided in favour of the assessee. - Tax Case (Appeal) No.1466 of 2007 - Dated:- .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he expenses incurred under the head 'market research'can be treated as revenue, when the assessee had not furnished any details, and when the market research is for entry into new territories giving rise to an enduring benefit? 2. Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the expenses incurred under the head 'market research' can be treated as revenue, when the Supreme Court has held that the expenditure on initial outlay or exten .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) accepting the contention of the assessee allowed the appeal holding that since the assessee had already in the business of supply of LPG Cylinders, the marketing research expenses for extending into new territories could be treated as revenue expenditure. Aggrieved by the same, the Revenue preferred an appeal before the Tribunal and the Tribunal dismissed the same, thereby confirmed the order of the Commissioner of Income T .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

following the decision of the Gujarat High Court, in the case of Commissioner of Income Tax Vs Suhrid Geigy Ltd. (1996 (220) ITR 153 (Guj), held as follows: "9. Similar issue arose before the Gujarat High Court in the case of Commissioner of Income Tax Vs Suhrid Geigy Ltd. (1996 (220) ITR 153 (Guj)), wherein, the Gujarat High Court considering the decision of the Supreme Court in Alembic Chemical Works Co. Ltd. v. CIT [1989] 177 ITR 377 (SC) held as follows :- In Alembic Chemical Works Co. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

under in consideration of a once for all payment of 50,000 US $, it agreed to supply the assessee a pilot plant, the technical information, know-how and written description of Meiji's process for fermentation of penicillin with a flow sheet of the process in the pilot plant and to arrange for the training of the appellant's representatives in various plants in Japan at the assessee's expense and advise the assessee in large scale manufacture for a period of two years. The assessee wa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he High Court also rejected the assessee's claim. Reversing the decision of the High Court, the Supreme Court observed that there was no material before the Tribunal to come to the finding that the appellant had obtained under the agreement a completely new plant with a completely new process and a completely new technical know-how. The business of the appellant was to manufacture penicillin. Even after the agreement, the product continued to be penicillin. There was no material before the T .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s allowable deduction in computing the business profits of the appellant. In coming to this conclusion, the court also noticed the principles which should govern while deciding such issues by the courts. The most important aspects relevant for the present purpose which can be culled out from the above discussion is that where expenses are incurred in areas which supplement the existing business and is not a fresh or new venture and agreement of acquiring technical know-how pertain to product alr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nue. In such cases the test of enduring benefit might break down. That is to say, the argument that the knowledge having become once part of the knowledge bank of the acquirer, cannot be taken back in a sense and will always remain with the assessee and is enduring. But looking to the business realities, namely, the purpose for which knowledge has been acquired becomes determining the true character of the expenditure. 10. From the decision as extracted above, it is clear that the main parameter .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

  ↓     Latest Happening     ↓  

TMI Note: Does ICDS apply to computation of Minimum Alternate Tax (MAT) u/s 115JB of the Act or Alternate Minimum Tax (AMT) u/s 115JC of the Act.

TMI Note: Where a term has not been defined under ICDS, nor under the Act, but has different interpretations given to it by the courts in tax cases, and in ICAI Accounting Standards, which interpretation would prevail while interpreting ICDS.

TMI Note: Whether the provisions of ICDS apply to a non-resident who claims the benefit of a double taxation avoidance agreement (DTAA).

TMI Note: In case any of the ICDS provisions is contrary to a circular or press release issued by the CBDT, which would prevail over the other.

TMI Note: ICDS-I requires disclosure of significant accounting policies and other ICDS requires specific disclosures. Where is the taxpayer required to make such disclosures specified in ICDS.

Notification: Income Computation and Disclosure Standards (ICDS) - New ICDS to be effective from AY 2017-18

Forum: Input credit of gst paid on urd

Notification: Seeks to exempt goods imported for organising FIFA under 17, world cup, 2017

Forum: Wrong quote of GSTIN no of buyer in GSTR-1

Forum: Getting upload error message.Cannot upload json file for GSTR1 even after using offline tool V 1.2..

Forum: Issue of Payment Voucher

Forum: filing of unaudited financial accounts

Forum: GST on Notional rent

Forum: need of extention of agm in case of non filing

News: RBI Reference Rate for US $

Highlight: GST - Detention of goods under transport - discrepancy in documents - the statutory provisions provide a mechanism for adjudication following detention of goods including for the provisional release thereof pending adjudication - HC

Highlight: Reassessment - first few paragraphs of the assessment order dealt with objections and disposed of accordingly - Unfortunately, the manner in which the AO has decided the issue is wholly unsustainable in law - HC

Highlight: Business expenditure u/s 37 - liquidated damage - breach of contract terms - Expenditure was not incurred for any purpose which is an offence or which is prohibited by law - cannot be disallowed - HC

Highlight: Valuation - inclusion of reimbursement of expenses - managing participation of clients in certain mela, fairs, promotional activities etc. - They are liable to service tax on the gross amount received - They cannot restrict their tax liability to only agency commission

Highlight: TDS liability - ITAT confirmed the liability - We do not see how it is possible for us to uphold the order of the Tribunal and when it purports to decide two Appeals of the Revenue by single paragraph conclusion - HC

Highlight: Reopening of assessment - sufficiency of material available with the AO to form a belief that income chargeable to tax had escaped assessment - bogus purchases - seller refused to respond - notice would not be interfered with - HC

Highlight: Exemption u/s 11 - education activities - transport and hostel facilities surplus cannot be considered as business income of the assessee society

News: Draft Notification for insertion of new rule 39A in the Income-tax Rules, 1962 – comments and suggestions-reg.

Highlight: Genuineness of labour wages expenses, embroidery charges, fabrication expenses etc. - getting work done through small workmen who do not have any permanent place of residence - disallowance of ad hoc expenditure deleted.

Highlight: Project import - Since the goods were never used for the purpose for which it was imported, the actual user condition has been violated - Redemption fine and penalty imposed.

Highlight: Penalty u/s 112 (a) - CHA - Lack of due diligence and failure to take more precautions can not, by itself, bring in penal consequences

Highlight: Import of services - GST - The fact that those services were received outside India will not change the fact that the services have been paid for by the beneficiary appellant, who is located in India. - Demand confirmed.

Notification: SEZ for IT/ITES at Madhurwada Village, Visakhapatnam District in the State of Andhra Pradesh - denotified.

Highlight: Merely because payment is received in Indian rupee, it cannot be said that payment against export has not been received in convertible foreign exchange.

Highlight: Merely vehicle numbers was not mentioned on the invoices cannot be the reason to deny Cenvat Credit

Highlight: Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 120A of the Central Goods and Service Tax Rules, 2017 - Circular

Circular: Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 120A of the Central Goods and Service Tax Rules, 2017

News: Auction for Sale (Re-issue) of Government Stocks

Article: TDS APPLICABILITY ON GOVERNMENT CONTRACTS UNDER GST (Under Section 51 of the CGST Act, 2017)

News: Manmohan takes potshots at note ban, 'hasty' rollout of GST

News: GST on petrol, diesel requires wider discussion: Nitish

Article: WHEN CAN ONE TAKE ITC FOR RCM CASES?

Notification: TDS liability under Section 51 of CGST, 2017 come into force w.e.f. 18-9-2017 - Persons liable to deduct TDS from payment made or credited to the supplier of taxable goods or services specified

Notification: Central Goods and Services Tax (Seventh Amendment) Rules, 2017

Notification: Seeks to extend the last date for filing the return in FORM GSTR-3B for the months of August to December, 2017

Circular: Filing of Special Leave Petition against Orders of Hon'ble High Courts staying Collection of Tax under GST- reg.

Highlight: Exemption u/s 54F - LTCCG - once entire net consideration is invested, the absence of completion certificate cannot be a ground to deny the benefit of deduction.

Highlight: Deduction u/s 10B - initial AY - Mere authorization to enable the Assessee to import material or export produce in the earlier date would not ipso facto tantamount to commencement of substantial activity of ‘manufacture’/’production’.

Circular: Sub:- Procedure to be followed for Import under DEEC/EPCG Scheme- reg.

News: RBI Reference Rate for US $

Article: INELIGIBLE INPUT TAX CREDIT UNDER GST REGIME

Article: MISTAKES IN DRAFTING

Article: All about E-way Bill under GST

Highlight: Provision for sick leave liability - based on the basis of notional figures - such notional liability cannot be allowed as deduction - section 43B(f) is not applicable.

Highlight: Penalty u/s 271(1)(c) - the amended provision of Explanation 5A made applicable w.r.e.f from 1.6.2007 cannot be pressed into service.



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version