Of the two formulas available, the formula adopted by the assessee, i.e. of taking the difference between the indexed book value on the date of conversion and the sale proceeds as long-term capital gains, being beneficial to the assessee, should be adopted. No part of the gains can be assessed as business income.
Where the AO had granted deduction under sections 80HH & 80-I in the year of formation of the new industrial undertaking, he could not, in a subsequent year, deny the deduction on the ground that the conditions are not fulfilled, if he has not withdrawn the deduction granted in the earlier year.
The effect of Article 7 (1) of the DTAA and Circular No. 23 dated 23.7.1969 is that the income of a non-resident which is neither directly nor indirectly attributable to the PE cannot be brought to tax.
Where the assessee had earned freight income by transporting cargo in international traffic through ‘slot charter’ arrangements on ships owned by other enterprises and the question arose whether such profits arose from “operation of ships”, held: that in view of the OECD Commentary, Article 9 of the India-UK DTAA must be interpreted as applying not only to income arising directly from the operation of ships but also to income arising from ancillary operations such as transportation of cargo through ships owned by other enterprises.
Where the applicant had entered into a joint venture with two Indian companies for providing consultancy services for the development of tunnels and the question was whether the JV constitutes an ‘Association of Persons’, HELD: (i) An ‘AOP’ is one…
Where the applicant entered into a contract with Raytehon USA for the acquisition of hardware and customized software and the title to the hardware was to pass outside India and all activities under the contract (except for installation and support…
The agreement was for rendering a ‘service’ and did not involve consideration for the ‘use or right to use equipment’ and not ‘royalty’ u/s 9 (1) (via). The consideration was not a ‘rental’ as the payee was not in custody or control of the equipment of BTA. The meanings of the words “use” and “right to use” explained in detail. It is also not ‘royalty’ u/s 9 (1) (iii). It is also not “fees for included services” under Article 12 (4) of the DTAA.
Agricultural Produce Marketing Committee is not a “local authority” after insertion of the Explanation in Section 10(20) vide Finance Act, 2002 w.e.f. 1.4.2003 and is consequently not entitled to the benefit under Section 10 of the 1961 Act.
With regard to the sting operation carried out by NDTV regarding the role of a defense lawyer (R. K. Anand) and the Special Public Prosecutor (I. U. Khan) in an ongoing Sessions trial commonly called the “BMW case” and the suo motu criminal contempt action undertaken by the High Court, the Court passed strictures against two senior advocates and directed that they should be prohibited from appearing before the Court and subordinate courts for four months and that they should be stripped of their designation as senior advocates. The case discusses important aspects of the law as to when abuse of an advocate and when abuse by an advocate can constitute contempt of the law.
Where the assessee was a co.op society and it and its members entered into a development agreement with a builder pursuant to which Tranferable Development Rights (TDR) entitled to be received under the Development Control Regulations was assigned to the developer for the repairs and redevelopment of the building and the construction of additional floors, held that the TDRs were owned by the flat owners individually and as no consideration for the transfer of the TDRs was received by the assessee society nor any area in the constructed portion was allocated to the assessee society, it was not chargeable to tax. Noted that even in the case of flat owners the Mumbai Bench had held in Jethalal D. Mehta vs. DCIT (2005) 2 SOT 422 that the receipts on sale of TDRs were not chargeable to tax in their hands.