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Transfer pricing of AMP Expenditure: the onus is on the Revenue to demonstrate by tangible material that there is an international transaction involving AMP expenses between the Indian Co and the AE. In the absence of that first step, the question of determining the ALP of such a transaction does not arise. In the absence of a machinery provision it is hazardous for any TPO to proceed to determine the ALP of such a transaction since Bright Line Test has been negatived as a valid method of determining the existence of an international transaction and thereafter its ALP
CIT vs. Whirlpool of India Ltd
(2015) TaxCorp(LJ) 9749 (HC-DELHI)
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HC - Since no adverse information was received subsequently from FTD about donations, hence, AO's action of reassessment amounts to 'change of opinion'. Re-assessment based on AO's office-note invalid.
Kulbhushan Khosla vs. CIT
(2015) TaxCorp(LJ) 9734 (HC-DELHI)
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HC - In absence of opportunity of cross-examination, no addition can be made on the basis of third party statement.
Commissioner of Income-tax v. Sunil Aggarwal
(2015) TaxCorp(LJ) 9716 (HC-DELHI) · http://taxcorp.in/FileOpenDT.aspx?ID=62227&Category=Judgment&CategoryType=Zip
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Transfer Pricing: Important legal principles on whether an adjustment for Advertisement & Market Promotion (AMP) expenses can be made on the basis that there is an assumed “international transaction” with the AE because the advertisement expenditure of the Indian company is “excessive” explained
Maruti Suzuki India Limited vs. CIT
(2015) TaxCorp(LJ) 9660 (HC-DELHI)
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HC - Where there is no taxable income, section 44BBA cannot be applied.
Director of Income-tax v. Royal Jordanian Airlines
(2015) TaxCorp(LJ) 9619 (HC-DELHI) · http://taxcorp.in/FileOpenDT.aspx?ID=62352&Category=Judgment&CategoryType=Zip
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S. 68 (share capital): (i) It is a fallacy to assume that a company which has not commenced business has unaccounted money, (ii) Fact that investors have a common address is not relevant, (iii) Fact that shares were subsequently sold at reduced rate is not relevant
CIT vs. Five Vision Promoters Pvt. Ltd
(2015) TaxCorp(LJ) 9554 (HC-DELHI) · Section 68
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HC - Income earned by a 100% EOU from export incentives, customer claims, freight subsidy and FD interest are eligible for deduction u/s 10B.
Riviera Home Furnishing vs ACIT
(2015) TaxCorp(LJ) 9487 (HC-DELHI) · Sections 10B, 80A(4)
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HC - Tax planning may be legitimate provided it is within the framework of law. Colourable devices cannot be part of tax planning.
CIT vs. Abhinandan Investments
(2015) TaxCorp(LJ) 9486 (HC-DELHI)
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HC - Assessment initiated u/s 158BD in absence of satisfaction note is to be quashed.
Haryana Paneer Bhandhar vs CIT
(2015) TaxCorp(LJ) 9471 (HC-DELHI) · Section 158BD
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HC - Merely because the Assessee participates in the proceedings.. does not obviate the mandatory requirement of the AO having to issue to the Assessee a notice under Section 143(2) of the Act before finalising the order of the reassessment.
Pr.CIT vs. Silver Line
(2015) TaxCorp(LJ) 9470 (HC-DELHI) · Section 143(2)
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S. 68: If the identity and other details of the share applicants are available, the share application money cannot be treated as undisclosed income in the hands of the Co. The addition, if at all, should be in the hands of the applicants if their creditworthiness cannot be proved
CIT vs. Vrindavan Farms (P) Ltd
(2015) TaxCorp(LJ) 9457 (HC-DELHI) · Section 68
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S. 37(1): Cost of Employees Stock Option (ESOP) debited to P&L A/c is allowable business expenditure
CIT vs. Lemon Tree Hotels Ltd
(2015) TaxCorp(LJ) 9451 (HC-DELHI) · Section 37(1)
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S. 275(1)(c): For penalty proceedings initiated on issues unrelated to assessment of income (such as for s. 269SS/ 269T & TDS defaults), time limit runs from date of initiation of penalty proceedings and not from date of CIT(A)'s order
Pr. CIT vs. JKD Capital & Finlease Ltd
(2015) TaxCorp(LJ) 9449 (HC-DELHI) · Section 275(1)(c)
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S. 147/ 148: Dept warned not to harass taxpayers by reopening assessments in a mechanical and casual manner. Pr CIT directed to issue instructions to AOs to strictly adhere to the law explained in various decisions and make it mandatory for them to ensure that an order for reopening of an assessment clearly records compliance with each of the legal requirements. AOs also directed to strictly comply with the law laid down in GKN Driveshafts 259 ITR 19 (SC) as regards disposal of objections to reopening assessment
Pr CIT vs. Samcor Glass Ltd
(2015) TaxCorp(LJ) 9355 (HC-DELHI) · Section 147, 148
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HC - Writ - In absence of valid reasons for revisiting concluded assessments, reassessment u/s 147 to be quashed.
Turner Broadcasting Systems Asia Pacific Inc vs. DDIT
(2015) TaxCorp(LJ) 9315 (HC-DELHI) · Section. 147
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HC - Since liability, was contingent upon uncertain fact, deduction under section 43B was not permissible.
Oswal Agro Mills Ltd. v. Commissioner of Income-tax
(2015) TaxCorp(LJ) 9305 (HC-DELHI) · http://taxcorp.in/FileOpenDT.aspx?ID=59168&Category=Judgment&CategoryType=Zip
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HC - Principles to avoid vexatious proceedings u/s 153C against person other than person searched.
Commissioner of Income-tax.-7 v. RRJ Securities Ltd.
(2015) TaxCorp(LJ) 9302 (HC-DELHI) · http://taxcorp.in/FileOpenDT.aspx?ID=62193&Category=Judgment&CategoryType=Zip
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S. 143(2)/ 292BB: Failure to issue a s. 143(2) notice renders the reassessment order void. S. 292BB saves a case of "non service" of the notice but not a case of "non issue"
Pr. CIT vs. Shri Jai Shiv Shankar Traders Pvt. Ltd
(2015) TaxCorp(LJ) 9296 (HC-DELHI) · Sections 143(2), 292BB
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HC - Revenue couldn’t deny assessee’s TDS claim on a mere technical ground that corresponding income was not that of the assessee.
CIT. vs. Relcom
(2015) TaxCorp(LJ) 9295 (HC-DELHI)
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HC - On failure to serve reassessment notice, proviso to section 292BB gets attracted. Can not be cured by deeming fiction of sec. 292BB.
Commissioner of Income-tax (Central)-I v. Chetan Gupta
(2015) TaxCorp(LJ) 9278 (HC-DELHI) · http://taxcorp.in/FileOpenDT.aspx?ID=61870&Category=Judgment&CategoryType=Zip
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