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S. 148: The AO is not entitled to issue a reopening notice only on the basis that the foreign company has a permanent establishment (PE) in India if the transactions in respect of which it is alleged that there has been an escapement of income had already been disclosed by the Indian subsidiary and found by the Transfer Pricing Officer (TPO) to be at arm's length
Honda Motor Co. Ltd. Vs. ADIT
(2018) TaxCorp(LJ) 14592 (SC) · Section. 148
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S. 14A/ Rule 8D - Applicability to shares held for controlling interest or as stock-in-trade: The argument that S. 14A & Rule 8D will not apply if the "dominant intention" of the assessee was not to earn dividends but to gain control of the company or to hold as stock-in-trade is not acceptable. S. 14A applies irrespective of whether the shares are held to gain control or as stock-in-trade. However, where the shares are held as stock-in-trade, the expenditure incurred for earning business profits will have to be apportioned and allowed as a deduction. Only that expenditure which is "in relation to" earning dividends can be disallowed u/s 14A & Rule 8D. The AO has to record proper satisfaction on why the claim of the assessee as to the quantum of suo moto disallowance is not correct
Maxopp Investment Ltd. vs. CIT
(2018) TaxCorp(LJ) 14508 (SC) · Section. 14A
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Principles of Mutuality: Receipts by housing co¬-operative societies such as non¬-occupancy charges, transfer charges, common amenity fund charges and certain other charges from their members are exempt from income-tax based on the doctrine of mutuality. The fact that the receipts are in excess of the limits prescribed by the State Government does not mean that the Societies have rendered services for profit attracting an element of commerciality and thus was taxable
ITO. vs. Venkatesh Premises Co-op Society Ltd.
(2018) TaxCorp(LJ) 14501 (SC)
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Foreign law firms and foreign lawyers cannot practice profession of law in India either in the litigation or in non-litigation side though they can "fly in and fly out" for the purpose of giving legal advice to their clients in India regarding foreign law. The expression “fly in and fly out” will only cover a casual visit not amounting to “practice”. If the Rules of Institutional Arbitration apply or the matter is covered by the provisions of the Arbitration Act, foreign lawyers are not debarred from conducting arbitration proceedings arising out of international commercial arbitration but will be governed by code of conduct applicable to the legal profession in India. B.P.O. Companies providing wide range of customized and integrated services and functions to its customers like word processing, secretarial support, transcription services, proof reading services, travel desk support services, etc. may come within the purview of the Advocates Act, 1961 or the Bar Council of India Rules if in pith and substance the services amount to practice of law
Bar Council of India vs. A. K. Balaji & Ors
(2018) TaxCorp(LJ) 14500 (SC)
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Hindu Undivided Family (HUF) Law: The very factum of birth in a coparcenary creates the coparcenary. Therefore the sons and daughters of a coparcener become coparceners by virtue of birth. The amendment to s. 6 of the Hindu Succession Act, 1956 in 2005 statutorily recognizes the rights of coparceners of daughters as well since birth. Consequently, married daughters can be said to be the coparceners in the HUF and are entitled to the ancestral property even if they were born prior to the amendment to the Hindu Succession Act
Danamma @ Suman Surpur Vs. Amar
(2018) TaxCorp(LJ) 14499 (SC)
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S. 143(2) service of notice: If the assessee is not available to take service of the s. 143(2) notice, service on the authorized representative is sufficient to draw inference of deemed service of notice on the assessee. The fact that the authorized representative is disowned by the assessee is irrelevant
ITO. Vs. Dharam Narain
(2018) TaxCorp(LJ) 14392 (SC) · Section. 143(2)
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Section. 12A: The CIT has no power to cancel/withdraw/recall the registration certificate granted u/s 12A until express power to do so was granted by s. 12AA(3). Though the grant of certificate is a quasi judicial function, s. 21 of the General Clauses Act cannot be applied to support the order of cancellation of the registration certificate
Industrial Infrastructure Development Corporation (Gwalior) M.P. Ltd. vs. CIT
(2018) TaxCorp(LJ) 14342 (SC)
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Appointment of Tribunal Members under new rules: interim directions issued regarding the method for selection of Tribunal Members and their terms and period of appointment
Kudrat Sandhu vs. UOI
(2018) TaxCorp(LJ) 14302 (SC)
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SC - Rule 8D is prospective in operation and could not have been applied to any assessment year prior to Assessment Year 2008-09.
Commissioner of Income Tax 5 Mumbai Versus M/s. Essar Teleholdings Ltd. Through Its Manager
(2018) TaxCorp(LJ) 14260 (SC) · http://taxcorp.in/FileOpenDT.aspx?ID=70904&Category=Judgment&CategoryType=Zip
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S. 14A/ Rule 8D: Entire law on whether the computation provisions of Rule 8D is retrospective explained in the light of established principles of interpretation of statutes read with verdicts in Vatika Townships 367 ITR 466 (SC), Gold Coin Health 304 ITR 308 (SC) and other verdicts
CIT vs. Essar Teleholdings Ltd
(2018) TaxCorp(LJ) 14259 (SC) · Section 14A
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S. 2(22)(e) Deemed Dividend: The term “shareholder”, post amendment, has only to be a person who is the beneficial owner of shares. One cannot be a registered owner and beneficial owner in the sense of a beneficiary of a trust or otherwise at the same time. The moment there is a shareholder, who need not necessarily be a member of the Company on its register, who is the beneficial owner of shares, the Section gets attracted without more. To state that two conditions have to be satisfied, namely, that the shareholder must first be a registered shareholder and thereafter, also be a beneficial owner is not only mutually contradictory but is plainly incorrect. Prima facie, Ankitech/ Madhur Housing is wrongly decided and should be reconsidered by larger bench
National Travel Service vs. CIT
(2018) TaxCorp(LJ) 14241 (SC) · Section. 2(22)(e)
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S. 11(1)(a) vs. 32: Even if the entire expenditure incurred for acquisition of a capital asset is treated as application of income for charitable purposes u/s 11(1)(a) of the Act, the assessee is also entitled to depreciation u/s 32. The argument that the grant of depreciation amounts to giving double benefit to the assessee is not acceptable. S. 11(6) which bars depreciation on expenditure applied for charitable purposes is prospective and applies only from AY 2015-16
CIT vs. Rajasthan And Gujarati Charitable Foundation Poona
(2017) TaxCorp(LJ) 14041 (SC) · Sections 11(1)(a), 32
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Taxability of subsidies: Supreme Court stays judgement of the Delhi High Court in CIT vs. Bhushan Steels And Strips which held that if the recipient has the flexibility of using it for any purpose and is not confined to using it for capital purposes, the subsidy is revenue in nature and is taxable as profits
Bhushan Steel vs. CIT
(2017) TaxCorp(LJ) 14000 (SC)
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Taxability of subsidies: A subsidy granted by the Govt to achieve the objects of acceleration of industrial development and generation of employment is capital in nature and not revenue. The fact that the incentives are not available unless and until commercial production has started, and that the incentives are not given to the assessee expressly for the purpose of purchasing capital assets or for the purpose of purchasing machinery is irrelevant. The object has to be seen and not the form in which it is granted
CIT vs. Chaphalkar Brothers Pune
(2017) TaxCorp(LJ) 13999 (SC)
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S. 80-IB: The incentive meant for small scale industrial undertakings cannot be availed by undertakings which do not continue as small scale industrial undertakings during the relevant period. Each assessment year is a different assessment year. The fact that the object of legislature is to encourage industrial expansion does not mean that the incentive should remain applicable even where on account of industrial expansion, the small scale industrial undertakings ceases to be small scale industrial undertakings. The fact that in the initial year eligibility was satisfied is irrelevant
DCIT. vs. Ace Multi Axes Systems Ltd.
(2017) TaxCorp(LJ) 13965 (SC) · Section. 80-IB
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Taxability of mesne profits: High Court's approach of dismissing the Dept's appeal only because the Tribunal relied on Narang Overseas 111 ITD 1 (Mum) (SB) and the appeal against which had been dismissed for non-removal of defects is not correct. The High Court ought to decide the question on merits
Goodwill Theatres Pvt. Ltd.
(2017) TaxCorp(LJ) 13964 (SC)
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S. 68 Bogus share capital: Law laid down in Subhlakshmi Vanijya Pvt. Ltd vs. CIT 155 ITD 171 (Kol), Rajmandir Estates 386 ITR 162 (Cal) etc that the CIT is entitled to revise the assessment order u/s 263 on the ground that the AO did not make any proper inquiry while accepting the explanation of the assessee insofar as receipt of share application money is concerned cannot be interfered with
Daniel Merchants Private Limited vs. ITO
(2017) TaxCorp(LJ) 13944 (SC) · Section 68
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Low Tax Effect Circular: The view of the two-judge bench in Suman Dhamija & Gemini Distilleries that CBDT's low tax Circular dated 09.02.2011 cannot be given retrospective effect cannot be followed as it is contrary to the three-judge bench verdict in Surya Herbal. A beneficial circular has to be applied retrospectively while an oppressive circular has to be applied prospectively. Circular dated 9.2.2011 has retrospective operation except for two caveats: (i) The Circular should not be applied ipso facto when the matter has cascading effect and/or (ii) where common principles are involved in subsequent group of matters or a large number of matters
DIT. vs. S. R. M. B. Dairy Farming (P) Ltd.
(2017) TaxCorp(LJ) 13912 (SC)
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S. 43B: Advance deposit of central excise duty in the Personal Ledger Account (PLA) constitutes actual payment of duty within the meaning of s. 43B and the assessee is entitled to the benefit of deduction of the said amount
CIT vs. Modipon Limited
(2017) TaxCorp(LJ) 13885 (SC) · Section 43B
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It is trite that when two views are possible, one which favours the assessees has to be adopted. Circulars are binding on the Department. The Government itself has taken the position that where whole of excise duty or service tax is exempted, even the Education Cess as well as Secondary and Higher Education Cess would not be payable. This is the rational view
SRD Nutrients Private Limited vs. CCE
(2017) TaxCorp(LJ) 13825 (SC)
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