Thursday, November 15, 2012


On Direct Tax

  1. The Bangalore ITAT held that deduction under section 80-IA is to be allowed unit-wise without deducting losses in other unit.
  2. The Hyderabad ITAT held that the developer following "Percentage Completion Method" would also be entitled to deduction under section 80-IB(10).
  3. The Hyderabad ITAT held that : -

  • Where warranty clause was part of sale document and it imposed a liability upon assessee to discharge its obligations under said clause for period of warranty, provision made for warranty charges was to be allowed as deduction.
  • Where assessee had advanced to sister concerns or others interest free without any business purpose, interest to that extent had to be disallowed.
      4. The Chennai ITAT held that the Market Development Fee paid to UK based company not
    taxable in India as fee for technical services either under section 9(1)(vii) or under article 13 of  indo-UK DTAA.
     5.  The Mumbai ITAT held that the Process of bottling of LPG into smaller cylinders amounts to    'manufacture' so as to allow deduction under sections 80HH, 80-I/80-IA.
     6. The Mumbai ITAT held that where liaison office of assessee merely co-ordinated its purchases in India, it could not be regarded as assessee's PE in India and, thus, no income could be attributed to it under section 9 of Income Tax Act, 1961.
     7.  The Mumbai ITAT held that the Tribunal held that the present system of e-filing of return is totally dependent upon the usage of software and there are possibilities of entering incorrect data
without having the expert knowledge. Non-inclusion of any information can be rectified via
a rectification application.

     8. The Calcutta ITAT held that where assessee-transporter made payments for hiring of trucks  simplicitor, and not for transporting goods by them, assessee would not have any TDS obligation.

      9. The Gujarat High Court held that where job-work carried out by assessee amounted to
'manufacture' and, it was not a business auxiliary service, service tax paid wrongly thereon was

   10.  The Gujarat High Court held that the Service Tax paid twice by mistake is refundable subject to time limit of section 11B and doctrine of unjust enrichment cannot apply.

   11.  The Authority for Advance Rulings (AAR) ruled that where applicant company failed to demonstrate that transfer of shares of an Indian group company to another Indian group company was authorized by Article of Association (AOA) and was effected in the mode prescribed by the Articles of Association (AOA) and meeting requirements of Section 82 of Companies Act 1956, matter was to be left to Assessing authority for deciding question of tax ability.


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