Month: January 2011

Archive for January, 2011


Balwant Rai Wadhwa vs. ITO (ITAT Delhi)

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DATE: (Date of pronouncement)
DATE: January 27, 2011 (Date of publication)
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U/s 149(1)(b) a notice u/s 148 cannot be issued after the issue of 6 years from the end of the AY. In Haryana Acrylic vs. CIT 308 ITR 38 it was held that a notice u/s 148 without the communication of the reasons there for is meaningless inasmuch as the AO is bound to furnish the reasons within a reasonable time. It was held that a case where the notice has been issued within the said period of six years but the reasons have not been furnished within that period is hit by the bar of limitation because the issuance of the notice and the communication and furnishing of reasons go hand-in-hand. The expression ‘within a reasonable period of time’ as used in GKN Driveshafts 259 ITR 19 (SC) cannot be stretched to such an extent that it extends even beyond the six years stipulated in s. 149

Posted in All Judgements, Tribunal

CIT vs. Catholic Syrian Bank Ltd (Kerala High Court)

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DATE: (Date of pronouncement)
DATE: January 26, 2011 (Date of publication)
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Administrative expenditure relatable to the earning of tax-free income cannot be disallowed u/s 14A in the absence of a precise formula for proportionate disallowance until Rule 8D came into force

Posted in All Judgements, High Court

Adobe Systems India Pvt Ltd vs. ACIT (ITAT Delhi)

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DATE: (Date of pronouncement)
DATE: January 24, 2011 (Date of publication)
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The TPO rejected the assessee’s contention with regard to inclusion of the three super-normal profit companies without any cogent reason. It is undisputed that the three companies have shown super-normal profits as compared to other comparables. Their exclusion from the list of comparable is quite correct. After excluding the three companies the arithmetic mean of the comparables falls within the +-5% range permitted by s.92(C)(2)

Posted in All Judgements, Tribunal

VIP Industries Ltd vs. CCE (Bombay High Court)

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DATE: (Date of pronouncement)
DATE: January 23, 2011 (Date of publication)
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High Court has power to review its judgement u/s 260A

Posted in All Judgements, High Court

CIT vs. Hindustan Coca Cola Beverages Pvt Ltd (Delhi High Court)

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DATE: (Date of pronouncement)
DATE: January 17, 2011 (Date of publication)
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On merits, s. 32(1)(ii) allows depreciation in respect of know-how, patent, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature. The term “commercial rights” are such rights which are obtained for effectively carrying on business and commerce. “Commerce” is a wide term which encompasses many a facet. Accordingly, any right obtained for carrying on business with effectiveness comes within the sweep of meaning of “intangible asset”. Goodwill, being the positive reputation built by a person over a period of time is of “similar nature” as the other items enumerated in the definition of “intangible assets

Posted in All Judgements, High Court

CIT vs. Oswal Agro Mills Ltd (Delhi High Court)

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DATE: (Date of pronouncement)
DATE: January 16, 2011 (Date of publication)
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Pursuant to the insertion of the concept of “block of assets” w.e.f. 1.04.1988, depreciation is allowable on the WDV of the “block of assets” and individual assets lose their identity upon introduction into the block. The department’s argument that user of each and every asset is essential is not acceptable because it would mean that the assessee has to maintain the details of each asset separately and this would frustrate the very purpose for which the amendment was brought about. The Revenue is not put to any loss by adopting such method because when the asset is sold, it results in taxable STCG

Posted in All Judgements, High Court

Logix Micro Systems Ltd vs. ACIT (ITAT Bangalore)

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DATE: (Date of pronouncement)
DATE: January 14, 2011 (Date of publication)
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The fact that the international transactions are at ALP does not mean that no addition can be made on the funds kept by the assessee with the AE. If the assessee had received funds within the normal period, it could have earned interest on the same. The potential loss is a factor to be considered while evaluating the financial impact of the international transactions between the assessee and the AE. However, a reasonable period has to be provided as interest-free period

Posted in All Judgements, Tribunal

ACIT vs. UE Trade Corporation (India) (ITAT Delhi)

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DATE: (Date of pronouncement)
DATE: January 12, 2011 (Date of publication)
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CITATION:

Under the Proviso to s. 92C(2) (pre-amendment w.e.f. 1.10.09) the option to the assessee to choose a price which may vary from the arithmetical mean by an amount not exceeding five per cent is available only where more than one price is determined and not where there is only one comparable instance (Sony India vs. DCIT 114 ITD 448 (Del) & DCIT vs. BASF India not followed. Perot System TSI (India) Ltd 130 TTJ 685 followed)

Posted in All Judgements, Tribunal

DCIT vs. BASF India Limited (ITAT Mumbai)

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DATE: (Date of pronouncement)
DATE: January 12, 2011 (Date of publication)
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CITATION:

The second Proviso to s. 92C (2) (as substituted by F (No. 2) Act, 2009 w.e.f. 1.10.09) clearly shows that if the difference is less than 5% then the actual price paid should be considered as arm’s length price. The TPO as well as CIT (A) have clearly observed that difference in respect of these two items is 4% and, therefore, same has to be reckoned in terms of second proviso. Similar view was taken in the case of Sony India vs. Dy. CIT by Delhi Bench of the Tribunal 114 ITD 448

Posted in All Judgements, Tribunal

Pawan Kumar Parmeshwarlal vs. ACIT (ITAT Mumbai)

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DATE: (Date of pronouncement)
DATE: January 12, 2011 (Date of publication)
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CITATION:

The assessee is maintaining separate books of account for the purpose of business. The tax-free investments are in his personal capacity. As the AO has not disallowed any expenditure of personal nature out of the business income, the expenditure claimed in the business of share dealings cannot be correlated to the incomes earned in personal capacity that too on dividend, PPF interest and tax free interest on RBI bonds. Accordingly, the estimation of expenditure of Rs. 20,000 out of business expenditure as being incurred for earning tax free income is not acceptable

Posted in All Judgements, Tribunal