INCOME TAX DECISIONS

• Delhi ITAT SB on section 10(10CC): Multiple vs Single stage grossing up: stage grossing up: stage grossing up: In context of section 10(10CC) of the Act dealing with exemption of tax borne by an

employer on non- monetary perquisite offered to an employee, it has been held that the same includes
‘tax’ borne by an employer on the salary of an employee being non monetary benefit qua employee.
Accordingly, it has been ruled that taxes paid by the employer can be added only once in the salary of the employee. Thereafter, tax on such perquisite (i.e tax borne on salary) is not to be added again.

It may be noted here that an earlier Delhi ITAT bench ruing in the case of B.J.Services 109 TTJ 135 (adverse) has been overruled in above case.

• Delhi ITAT on India USA DTAA: Tax ability of Tax ability of Computerized Reservation System (CRS) : System (CRS) :Delhi ITAT in the System (CRS) : case of Galileo Inc. in context of Galileo Inc tax ability of booking revenue generated through its CRS services to Airlines, Hotels etc which enabled electronic ticket booking, reservation etc., has held that in so far as booking operations takes place in India through CRS having foot prints (nodes etc) in India, income accrues to assessee (Galileo) in India and same has business connection (BC) under the Act and Permanent Establishment (PE) under subject DTAA, in form of electronic nodes and telecommunication system in India which connected TA’s portal to assessee’s CRS in USA etc. After applying SC ruling in Morgan Stanley case 292 ITR 416 and CBDT Circular No 23 dated 23 July 1969, it has been dated 23 July 1969 held that since Indian agent of assessee (Interglobe) through which assessee was rendering CRS services in India stands remunerated at arm’s length price (ALP), nothing further needs attribution in the hands of assessee. In this connection, an earlier Mumbai ITAT bench ruling in the case of SET (Singapore) Pte Ltd (Singapore) Pte Ltd 106 ITD 175 ITD 175 which has taken an ITD 175 adverse view on the subject, seems to have not been considered by ITAT in subject ruling.
• Delhi ITAT on India UK DTAA: Tax ability of Tax ability of Marketing in India :In Marketing in India context of tax ability of assessee’s marketing activities taking place in India in relation to its products, through its Indian presence (‘RRIL’), it has been held that, assessee has  ‘BC’ and ‘PE’ under the Act and DTAA respectively and ex- conseqnetii conseqnetii its Indian activities needs attribution @ 35% of profits arising from Indian sales. In this ruling, it seems that assessee’s argument that since RRIL (its agent in India) stands remunerated at Arms Length Price, no further attribution is required, remained unconcluded. unconcluded 
• Income from House Property: Sec 22 : Property: Sec 22 : In Property: Sec 22 : aforesaid connection, as regards computation of ‘annual value’ under section 23 of the Act, it has been held that notional ‘interest’ on interest free (refundable) security advanced to landlord assessee cannot be uploaded to ‘annual value’ chargeable under section 22 which has been otherwise specifically provided in Wealth Tax Act, 1957. Same conclusion by CalHC in Satya & Co 140 CTR 569. (DHC in CIT vs Asian Hotels Limited ITA No. 794 of 2007 on 10 December 2007)