Payments made for the purchase of the software: Scope of the definition of the term ‘Royalty’ as per India-USA tax treaty.

Sandvik Machining Solution vs. ACIT, Pune Outcome: In favour of Assessee Facts The Assessee is a company incorporated in Sweden, received payments for the Information Technology support services rendered by it to an Indian entity.The Assessing Officer opined that the payment received was taxable as 'Royalty’ as per section 9(1)(vi) of the Act, as well … Continue reading Payments made for the purchase of the software: Scope of the definition of the term ‘Royalty’ as per India-USA tax treaty.

Loan advanced to a group company which is neither a registered shareholder nor a beneficial owner: Applicability of provisions of ‘deemed dividend’ under section 2(22)(e)

Khorakiwala Holdings and Investments Pvt Ltd vs. ACIT Outcome: In favour of Assessee Facts The Assessee was a holding company owning 90.31% of equity shares of the capital of M/s. CISPL and M/s. CISPL further held 99% of the equity share capital of M/s. BTPL. All these companies were a group company of M/s. Wockhardt … Continue reading Loan advanced to a group company which is neither a registered shareholder nor a beneficial owner: Applicability of provisions of ‘deemed dividend’ under section 2(22)(e)

Disallowances regarding issues not covered in limited scrutiny: Jurisdiction of an assessing officer

Shri Narendrakumar Rameshbhai Patel vs. DCIT Outcome: Partial Facts The Assessing Officer issued a notice under section 143(2) only for the investigation of mismatch of income with form 26AS.However, in the present case, the Assessing Officer converted the limited scrutiny into complete scrutiny and added the capital receipt as business receipt without obtaining any approval … Continue reading Disallowances regarding issues not covered in limited scrutiny: Jurisdiction of an assessing officer

ITAT Bangalore Decides: Can the Differential Amount Between the Bank Deposit and the Profit and Loss Account be Treated as Undisclosed Income?

Case name: Avalappa Gopal v. ITOForum: Bangalore ITATMember: Chandra Poojari Background The AO observed on comparison of assessee’s bank statement with the Profit and Loss account furnished by the assessee that there is a difference of around INR 15.56 lakhs between the two. The AO, thus, treated the same as undisclosed income of the assessee. … Continue reading ITAT Bangalore Decides: Can the Differential Amount Between the Bank Deposit and the Profit and Loss Account be Treated as Undisclosed Income?

ITAT Cochin Decides: Can Repairs to Improve an Asset be Classified as Capital Expenditure?

Case name: Kovilakam Hotels Pvt. Ltd. v. ACITForum: Cochin ITATMember: George George KLawyers (Assessee): K. Kittu Background The assessee is a private limited company running a 3-star bar attached hotel. The hotel was to be re-evaluated for re-classification as a 3-star hotel, and hence, the assessee spent INR 60.25 lakhs on repair and renovationThe return … Continue reading ITAT Cochin Decides: Can Repairs to Improve an Asset be Classified as Capital Expenditure?

Gujarat High court decides: Date considerations for eligibility of deduction u/s 80IB(10)?

Case Name: Sheetal Infrastructure Private Limited vs Asst. Commissioner of Income Tax, Circle 4(1)(1) Forum: Gujarat HC Judges: Sangeeta K. Vishen, Harsha Devani Lawyers (Assessee): B S Soparkar Background The assessee was granted approval (Raja Chitthi) for its office construction project Vedika-I by the Kudsan Gram Panchayat on 16-Mar-2005.Gandhinagar Urban Development Authority (GUDA) approved the … Continue reading Gujarat High court decides: Date considerations for eligibility of deduction u/s 80IB(10)?

ITAT Ahmedabad Decides: Can an assessment proceeding be initiated against a company which has ceased to exist?

Case Name: Amit Inter-trade Pvt. Ltd. v. DCIT Forum: ITAT Ahemdabad Members: Rajpal Yadav, Wasim Ahmed Background Assessee is a private limited company which filed its return declaring NIL income. The assessee company (Amit inter-trade Pvt. Ltd.) got merged with J.P. Iscon Ltd. with effect from April 1, 2014. The AO issued a notice under … Continue reading ITAT Ahmedabad Decides: Can an assessment proceeding be initiated against a company which has ceased to exist?

ITAT Ahmedabad Decides: Can approval granted u/s 151 without mentioning the date on which approval granted reckoned to be valid?

Case Name: AMRUTBHAI G PRAJAPATI vs ITO, WARD-1 Forum: Ahmedabad ITAT Background AO issued notice u/s 148 of the Act on 27.03.2015 followed by notice u/s 142(1) on 22.06.2015.The assessee filed the return of income on 05.01.2016 in response to notice under section 148 of the Act.On obtaining approval and memo u/s 151 it is … Continue reading ITAT Ahmedabad Decides: Can approval granted u/s 151 without mentioning the date on which approval granted reckoned to be valid?

ITAT Chennai decides: Can expenses related to dividend earned from strategic investments be disallowed? + 2 more issues

Case Name: Lakshmi Machine Works v. Addl. CIT Forum: Chennai ITAT Members: Ramit Kochhar, N.R.S. Ganesan About Lakshmi Machine Works: The assessee is engaged in the business of manufacturing of textile machinery and had made investments in various corporate entities amounting to INR 154 Crores as at 31 Mar 2012. Issue 1  Under the provisions … Continue reading ITAT Chennai decides: Can expenses related to dividend earned from strategic investments be disallowed? + 2 more issues

ITAT Kolkata Decides: Can Disallowance Under Section 14A be Made if the Interest Earned is More than the Interest Paid in the Relevant AY?

Issue: Whether CIT(A) erred in confirming the addition of INR 21,74,843 by the AO? Case name: Salarpuria Investments Pvt. Ltd. v. DCIT Background The assessee is an NBFC Company. The AO made an addition to the tune of INR 21,74, 843 to the income of the assessee, by disallowing the same under Section 14A read … Continue reading ITAT Kolkata Decides: Can Disallowance Under Section 14A be Made if the Interest Earned is More than the Interest Paid in the Relevant AY?