Direct Tax landmark rulings

1. ITAT Delhi · 29 Oct 2014
   “Umbrage” taken in Casio that BMW did not follow L. G. Electronics is based on “wrong head note”. L. G. does not deal with a case of distributor and so there is no conflict with the law laid down therein

   BMW India Pvt. Ltd. vs. ACIT

   (2014) TaxCorp(LJ) 4274 (ITAT-DELHI)

2. ITAT Kolkata · 24 Oct 2014
   Rule 8D(ii) & 8D(iii) do not apply to shares held as stock-in-trade. Loss arising out of derivatives from the income arising out of buying and selling of shares

   DCIT. vs. Baljit Securities Private Limited

   (2014) TaxCorp(LJ) 4273 (ITAT-KOLKATA)

3. ITAT Jaipur · 24 Oct 2014
   Bogus purchases: Filing of confirmation of suppliers with PAN and TIN number are not sufficient to prove the purchases are genuine if they are not supported by other facts including delivery of goods & presence of suppliers

   Anuj Kumar Varshney

   (2014) TaxCorp(LJ) 4272 (ITAT-JAIPUR)

4. ITAT Hyderabad · 22 Oct 2014
   In view of the finding of the service-tax authorities that services were rendered, argument that amount paid is a reimbursement of actual cost without profit element is not acceptable and it is chargeable as “fee for included services”

   AMD Research & Development Center vs. DCIT

   (2014) TaxCorp(LJ) 4271 (ITAT-HYDERABAD)

5. ITAT Mumbai · 16 Oct 2014
   S. 271(1)(c): Wrong claim for depreciation by showing a finance or loan transaction as a lease transaction attracts penalty

   Times Guaranty Ltd. vs. ACIT

   (2014) TaxCorp(LJ) 4270 (ITAT-MUMBAI) · Section. 271(1)(c)

6. ITAT Hyderabad · 14 Oct 2014
   TPO cannot question commercial expediency of payment to AE. RBI approval to a transaction implies it is at arms' length price

   DCIT. Vs. Owens Corning Industries (India) Pvt. Ltd.

   (2014) TaxCorp(LJ) 4269 (ITAT-HYDERABAD)

7. ITAT Kolkata · 16 Oct 2014
   Rule 37BA (credit for TDS) inserted w.e.f. 01.04.2009 to mitigate hardship to taxpayers has to be treated as being retrospective in nature

   Parmanand Tiwari vs. ITO

   (2014) TaxCorp(LJ) 4268 (ITAT-KOLKATA)

8. Bombay High Court · 14 Oct 2014
   Advertisement expenditure incurred by agent to popularize the business of the channel run by the foreign principal is allowable as there is a direct business between the expenditure and the assessee's business as agent. The fact that the foreign principals also benefited does not entail right to deny deduction under section 37(1)

   CIT. vs. N.G.C. Network (India) P. Ltd.

   (2014) TaxCorp(LJ) 4267 (HC-BOMBAY) · Section 37(1)

9. ITAT Delhi · 06 Oct 2014
   No disallowance u/s 14A & Rule 8D can be made towards exempt income earned on strategic investments

   Interglobe Enterprises Ltd. vs. DCIT

   (2014) TaxCorp(LJ) 4266 (ITAT-DELHI) · Section. 14A

10. ITAT Bangalore · 18 Oct 2014
    Entire law on taxation of private specific/ discretionary trusts under revocable & irrevocable transfers and AOPs explained

    DCIT vs. India Advantage Fund-VII

    (2014) TaxCorp(LJ) 4265 (ITAT-BANGALORE)

11. ITAT Delhi · 15 Oct 2014
    Expenditure by way of royalty for use of technology cannot be disallowed on the ground of being capital in nature or for non-business purpose

    Groz Engineering Tools Pvt. Ltd. vs. DCIT

    (2014) TaxCorp(LJ) 4264 (ITAT-DELHI)

12. ITAT Cochin · 15 Oct 2014
    S. 14A: In applying Rule 8D(2)(ii) interest expenses directly attributable to tax exempt income as also directly attributable to taxable income, are required to be excluded from computation of common interest expenses to be allocated.

    Geojit Investment Services Ltd vs. ACIT

    (2014) TaxCorp(LJ) 4263 (ITAT-COCHIN) · Section. 14A

13. ITAT Delhi · 18 Oct 2014
    Adjustment for capacity underutilization has to be in the results of the comparables and not the tested party. A 100% captive unit has to show that underutilization was for reasons beyond its control

    DCIT vs. EDAG Engineers & Design India Pvt Ltd.

    (2014) TaxCorp(LJ) 4262 (ITAT-DELHI)

14. ITAT Delhi · 18 Oct 2014
    In computing operating profits, expenditure of other years has to be excluded. Forex gains and losses have to be treated at par

    ITO vs. EDAG Engineers & Design India Pvt Ltd.

    (2014) TaxCorp(LJ) 4261 (ITAT-DELHI)

15. ITAT Delhi · 18 Oct 2014
    CUP cannot be applied on hypothetical or imaginary value but a real value on which similar transactions have taken place is required. TPO has no jurisdiction to question commercial expediency of transaction

    AWB India Pvt. Ltd. vs. DCIT

    (2014) TaxCorp(LJ) 4260 (ITAT-DELHI)

16. ITAT Mumbai · 20 Oct 2014
    S. 43(5)(a): Loss on foreign currency forward contracts by a manufacturer/ exporter is a “speculation loss” and not a “hedging loss”

    Araska Diamond Pvt. Ltd vs. ACIT

    (2014) TaxCorp(LJ) 4259 (ITAT-MUMBAI) · Section. 43(5)(a)

17. ITAT Bangalore · 17 Oct 2014
    S. 14A & Rule 8D disallowance cannot be made if there is no exempt income. Cheminvest Ltd. vs. ITO 121 ITD 318 (Ahd) (SB) is not good law.

    Alliance Infrastructure Projects Pvt. Ltd vs. DCIT (ITAT Bangalore)

    (2014) TaxCorp(LJ) 4258 (ITAT-BANGALORE) · Section. 14A

18. ITAT Indore · 13 Oct 2014
    No Penalty on claim of Provision for Doubtful Debts

    DCIT. v. NEPA Limited

    (2014) TaxCorp(LJ) 4257 (ITAT-INDORE)

19. ITAT Delhi · 28 Mar 2014
    A mere diference is perception of CIT & AO cannot make the order erroneous & prejudicial to the interest or revenue

    Smt. N.K. Vinayak vs Commissioner of Income Tax

    (2014) TaxCorp(LJ) 4256 (ITAT-DELHI)

20. ITAT Bangalore · 10 Oct 2014
    No disallowance for non-payment of TDS can be made if payee has paid tax thereon

    Shri G.Shankar Vs. Asst. Commissioner of Income-tax

    (2014) TaxCorp(LJ) 4255 (ITAT-BANGALORE)

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