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

Case: Servion Global Solutions Ltd vs. DCIT, Chennai ITAT Outcome: Remand Facts The Assessee was engaged in the business of development and export of software. While making the assessment for assessment year 2009-10, the Assessing Officer, disallowed software license purchased by the Assessee at Rs. 1.72 crore treating the same as royalty under section 9(1)(vi) … Continue reading Payments made for purchase of software: Scope of definition of the term ‘Royalty’ as per India-USA tax treaty

Reopening of assessment on the basis of audit objection: Validity under section 147

Case: Principal Commissioner of vs. SKI Retail Capital Ltd, Madras HC Outcome: Assessee Facts The Assessee company had filed the return of income on 31.10.2007 and the same was processed under section 143(1) of the Income Tax Act. The case was re-opened on 26.08.2010 by issuance of notice under section 148 and the assessment was … Continue reading Reopening of assessment on the basis of audit objection: Validity under section 147

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

Case: Natural Dehydrated Vegetables Pvt Ltd vs. The DCIT, Circle-1, Ahmedabad ITAT Outcome: Partial Facts The Assessee, a Private Limited Company, declared an income of Rs.57.38 lakhs in the e-return of income filed on 30.09.2016.The Assessee's case was selected for limited scrutiny through CASS followed by serving of notices under section 143(2) & 142(1) of … Continue reading Disallowances regarding issues not covered in limited scrutiny: Jurisdiction of an assessing officer

Amount received as share premium: Applicability of Section 68.

Case: Shreenath Holdings Pvt Ltd vs. I.T.O.,Ward-5(1), Kolkata ITAT Outcome: Assessee Facts The Assessee Company was engaged in the business of trading and distribution of goods. It filed its return of income on 16.08.2012 declaring total income of Rs.15,500/-. During the year, the Assessee had raised share capital including premium amounting to Rs.1.13 crores. The … Continue reading Amount received as share premium: Applicability of Section 68.

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.

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.