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S. 263: There is doubt whether Explanation 2(a) to s. 263, inserted by FA 2015 w.e.f. 01.04.2015 has retrospective effect. The said Explanation does not override the law that the CIT cannot fault an assessment order without conducting his own inquiry or verification to establish that the assessment order is not sustainable in law
Narayan Tatu Rane vs. ITO
(2016) TaxCorp(LJ) 10244 (ITAT-MUMBAI) · Section 263
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A liberal view must be taken in matters of condonation of delay. A delay of 2191 days caused by an employee leaving the services of the assessee and not handing over papers to the assessee deserves to be condoned
Lahoti Overseas Ltd vs. DCIT
(2016) TaxCorp(LJ) 10243 (ITAT-MUMBAI)
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S. 40(a)(ia): Payments by a CA firm to foreign professional entities for services rendered abroad is not taxable under Articles 12 and 15 of the India-USA DTAA. The retrospective amendment to s. 9(1)(vii) to tax services rendered outside India does not apply in the context of a disallowance u/s 40(a)(ia) in the hands of the payer
ACIT vs. M/s. BSR & Co
(2016) TaxCorp(LJ) 10241 (ITAT-MUMBAI) · Sections 9(1)(vii), 40(a)(ia)
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Bogus purchase and sale of shares: Law explained as to on whom the onus is to show that the purchase and sale of shares are bogus and the circumstances required to be proved by the AO
Arvind Asmal Mehta vs. ITO
(2016) TaxCorp(LJ) 10240 (ITAT-MUMBAI)
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ITAT - Payment to residents of different countries for supply of embedded software not royalty under respective DTAAs. TDS inappliable
DDIT. vs. Reliance Industries Ltd.
(2016) TaxCorp(LJ) 10235 (ITAT-MUMBAI)
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ITAT - Set-off of share-trading loss on delivery based transactions against brokerage/commission income is allowable for AY 2009-10 as amendment vide Finance (No. 2) Act, 2014 excluding companies having ‘share-trading’ as their principal business is curative & retrospective.
Fiduciary Shares & Stock P. Ltd. vs. ACIT
(2016) TaxCorp(LJ) 10225 (ITAT-MUMBAI) · Section. 73
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ITAT - Where unsecured loan advanced by minor son and minor daughter were explained, the same cannot be added as unexplained cash credit u/s. 68.
Shri Bobbie Phillips Versus Income Tax Officer, Ward-10 (3) (4) , Mumbai and Shri Bennie Phillips Versus Income Tax Officer, Ward- 10 (3) (4) , Mumbai
(2016) TaxCorp(LJ) 10220 (ITAT-MUMBAI) · http://taxcorp.in/FileOpenDT.aspx?ID=49067&Category=ITAT&CategoryType=Zip
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ITAT - There is no such provision under the law that permits the AO to make adjustment on account of transfer pricing addition to the amount of profit shown by the assessee in its profit and loss account, for the purpose of computing book profit u/s 115JB.
Owens Corning (India) Pvt Ltd. vs. DCIT
(2016) TaxCorp(LJ) 10216 (ITAT-MUMBAI) · Section. 115JB
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ITAT - Assessee can produce technical expert opinions before the Tribunal in second round of litigation but subject to verification and scrutiny by the Revenue.
Mr. Kishore Ramchandani Versus ITO 19 (3) (2) , Mumbai
(2016) TaxCorp(LJ) 10211 (ITAT-MUMBAI) · http://taxcorp.in/FileOpenDT.aspx?ID=45125&Category=ITAT&CategoryType=Zip
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ITAT - Receipt of accommodation entries duly accounted, disclosed and assessed, notice that income to that extent has escaped assessment is not valid.
Renuka Financial Services Ltd. Versus ITO, Ward 15 (4) , New Delhi
(2016) TaxCorp(LJ) 10210 (ITAT-MUMBAI) · http://taxcorp.in/FileOpenDT.aspx?ID=49013&Category=ITAT&CategoryType=Zip
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ITAT - Adoption of USD Corporate Bond Rate and LIBOR interest rate based on external commercial borrowing is not justified. The interest rates for bonds or loan has to be seen from the point of view of borrowers creditworthiness and not the lender’s creditworthiness.
India Debt Management Pvt Ltd Versus The Deputy Commissioner Of Income Tax Circle-3 (2) (1) , Mumbai
(2016) TaxCorp(LJ) 10209 (ITAT-MUMBAI) · http://taxcorp.in/FileOpenINTL.aspx?ID=10207&Category=INTLDecisions&CategoryType=Zip
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ITAT - Once a claim is not arising out of the mandate and directions of the Tribunal, then, the same cannot be raked up or a fresh claim can be made in the second round of proceedings.
Lifeline Health Centre vs. DCIT
(2016) TaxCorp(LJ) 10193 (ITAT-MUMBAI)
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ITAT - Absent PE in India, income arising to a Mauritian entity from installation and construction of off-shore platforms in India, not taxable.
J. Ray Mc Dermott Eastern Hemisphere Ltd. Vs. ADIT (IT) 1(2)
(2016) TaxCorp(LJ) 10183 (ITAT-MUMBAI)
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Transfer Pricing: Corporate Guarantees are not comparable to Bank Guarantees & so the commission of 3% charged by Banks is not a benchmark to evaluate the ALP of a corporate guarantee but it has to taken at 0.5%. ITAT decisions which upheld the 3% rate cannot be followed as they are contrary to Everest Kanto 378 ITR 57 (Bom)
Thomas Cook (India) Limited vs. ACIT
(2016) TaxCorp(LJ) 10180 (ITAT-MUMBAI)
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Transfer pricing of AMP Expenditure: In the case of a manufacturer operating in a competitive industry, high AMP expenditure cannot be assumed to have been incurred for the benefit of the brand owner. The TPO has to prove that the real intention of the assessee in incurring AMP expenses was to benefit the AEs and not to promote its own business. Also, if the assessee has reported high turnover & profits & offered to tax, the basic ingredient required to invoke s. 92 that there is transfer of profit from India remains unproved. In the absence of the AO/ TPO showing that there is a formal/ informal agreement to share the AMP expenditure, the adjustment cannot be made. The matter cannot be remanded to the AO/ TPO for reconsideration
LÓreal India Private Limited vs. DCIT
(2016) TaxCorp(LJ) 10178 (ITAT-MUMBAI)
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Bogus Purchases: Purchases cannot be treated as bogus is (i) assessee has furnished quantitative reconciliation, (ii) Gross Profit rate is comparable to earlier & subsequent years, (iii) suppliers are income-tax assessees and their sales have not been treated as bogus by their AOs, (iv) payments are by account payee cheques and other documentary evidences are available
ACIT vs. Jaybharat Textiles & Real Estate Ltd
(2016) TaxCorp(LJ) 10177 (ITAT-MUMBAI)
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ITAT - No penalty u/s 271(1)(c) where under-reporting was attributed to online tax-filing portal's mistake.
Richa Dubey vs. ITO
(2016) TaxCorp(LJ) 10154 (ITAT-MUMBAI)
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S. 54F: The demolition of a structure does not amount to a "transfer". It is not correct to contend that Vania Silk Mills 191 ITR 647 (SC) is overruled by Grace Collis 248 ITR 323 (SC). Lower authorities cannot refuse to apply binding High Court judgements on the basis that the High Court has not considered a Supreme Court judgement
Dilip Manhar Parekh vs. DCIT
(2016) TaxCorp(LJ) 10152 (ITAT-MUMBAI) · Section 54F
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ITAT - Reopening of assessment which is contrary to the binding precedence of the Jurisdictional High Court is invalid in law and cannot be sustained.
Travotel (India) Pvt Ltd. vs. ITO
(2016) TaxCorp(LJ) 10151 (ITAT-MUMBAI)
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ITAT - Agreement (Magazing sharing advertisement) between assessee and Kingfisher was on account of sharing of incremental advertisement revenue and cannot be said to be in the nature of works contract
DCIT vs. VJM Media (P) Ltd.
(2016) TaxCorp(LJ) 10144 (ITAT-MUMBAI) · Section 194C
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