Shares issued for shares under barter system: Applicability of section 68

Case: Blooming Tradelink Pvt Ltd vs. Ito, Ward - 10(1), Kolkata ITAT Outcome: Assessee Facts The Assessee had raised share capital including share premium to the tune of Rs.5.01 crore The Assessing Officer added back the entire amount of share capital including premium raised treating the same as unexplained cash credit under section 68 of … Continue reading Shares issued for shares under barter system: Applicability of section 68

0 per cent related party transaction: Difficulty in finding out a comparable having no related party transaction

Case: ADIT vs. Persys Punj Lloyd Jv,¬†Delhi ITAT Outcome: Assessee Facts The Assessee excluded companies that had substantial transaction to the tune of more than 25% with related parties. The Transfer Pricing Officer held that it was an appropriate filter to eliminate the influence of the control transactions.The Commissioner of Income Tax (Appeals) held that … Continue reading 0 per cent related party transaction: Difficulty in finding out a comparable having no related party transaction

Scientific research expenditure under Section 35(2AB) incurred during the period prior to the approval: Eligibility for weighted deduction

Case: Advanced Enzyme Technologies Ltd (Formerly, Advanced Biochemicals Ltd ) vs. Asst Cit Cir 1, Mumbai ITAT Outcome: Assessee Facts For the year under consideration, the Assessee had filed return of income declaring total income at Rs. 2.56 Crs. The Assessee had claimed a weighted deduction for research and development expenditure under section 35(2AB) of … Continue reading Scientific research expenditure under Section 35(2AB) incurred during the period prior to the approval: Eligibility for weighted deduction

Stay of demand on payment of an amount lesser than prescribed percent of disputed tax demand: Jurisdiction of tax authorities to grant stay

Case: Smt.Saroja vs. The Income Tax officer,¬†Madras HC Outcome: Assessee Facts The Assessee had suffered an order of assessment for Assessment Year 2017-18 passed in terms of the provisions of the Income Tax Act, 1961, which was pending in appeal.In the meanwhile, the Assessee sought a stay of recovery of tax pending appeal by way … Continue reading Stay of demand on payment of an amount lesser than prescribed percent of disputed tax demand: Jurisdiction of tax authorities to grant stay

Roaming charges paid to telecom operator: Scope of ‘Fees for Technical Services’ and applicability of Tax deduction at source.

Case: DCIT 8 (3)(1) vs. Tata Teleservices (Mah.) Ltd, Mumbai ITAT Outcome: Assessee Facts The Assessee Company was engaged in the business of providing telecommunication services. It had paid roaming charges to various operators on which tax was not deducted at source.The Assessing Officer was of the opinion that the roaming services were in the … Continue reading Roaming charges paid to telecom operator: Scope of ‘Fees for Technical Services’ and applicability of Tax deduction at source.

Interest on outstanding receivables: Transfer pricing implications

Case: Logix Microsystems Ltd vs. DCIT, Bangalore ITAT Outcome: Partial Facts The trade receivables from the Associated Enterprise were outstanding for more than six months.The Assessing Officer was of the view that giving a long period of credit on trade receivables was in the nature of an interest-free loan transaction which were subject to provisions … Continue reading Interest on outstanding receivables: Transfer pricing implications

Issue examined under original assessment proceeding: Whether re-opening in such case is justified.

Case: Chordia Buildcon Pvt Ltd vs. DCIT, Circl-6, Jaipur ITAT Outcome: Assessee Facts The Assessee was engaged in the business of real estate and filed its return of income on 28.09.2011 declaring loss of Rs. 27.04 lakhs and the assessment was completed under section 143(3) on 14.03.2014 at NIL income. Subsequently, notice under section 148 … Continue reading Issue examined under original assessment proceeding: Whether re-opening in such case is justified.

Validity of additions made without issuing show cause notice

Case: Mr.P N Krishnamurthy vs. Income Tax officer Ward-6(2)(3), Bangalore ITAT Outcome: Remand Facts The Assessee had filed its return of income on 29.11.2014 for the assessment year 2013-14. The return was processed under section 143(1) of the Income Tax Act. Subsequently, notice under section 143(2) of the Act was issued and served on the … Continue reading Validity of additions made without issuing show cause notice

Liaison Office in India: Factors leading to formation of Permanent Establishment in India

Case: Union of India vs. U.A.E. Exchange Centre, Supreme Court Outcome: Assessee Facts The Assessee had set up its first liaison office in Cochin, India in January, 1997 and thereafter, in Chennai, New Delhi, Mumbai and Jalandhar in India. The activities carried on by the Assessee from the said liaison offices were stated to be … Continue reading Liaison Office in India: Factors leading to formation of Permanent Establishment in India

Freight payments made to shipping agents of Non-Resident/ Non-Resident shipping companies: Applicability of provisions of Tax Deduction at Source

Case: DCIT Circle-1 vs. Keshodwala Foods. Veraval, Rajkot ITAT Outcome: Assessee Facts The Assessee had incurred terminal handling charges amounting to Rs.1.29 Cr without deducting the tax at source.The Assessing Officer observed that such payment was made to the resident transport operator/ labour contractors to load the goods on the ships. Accordingly, the Assessee was … Continue reading Freight payments made to shipping agents of Non-Resident/ Non-Resident shipping companies: Applicability of provisions of Tax Deduction at Source