Month: October 2012

Archive for October, 2012


Atul Limited vs. ACIT (ITAT Ahmedabad)

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DATE: October 31, 2012 (Date of publication)
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Transfer Pricing ALP: Application of “Aggregation”/ “Portfolio Approach” The Tribunal had to consider the following transfer pricing issues: (i) whether the principle of “aggregation” or “portfolio approach” could be adopted so as to adjust the under-charge of one international transaction

Posted in All Judgements, Tribunal

CIT vs. Jackson Engineers Ltd (Delhi High Court)

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DATE: October 30, 2012 (Date of publication)
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Mr.K.P.Chowdary, Member, CBDT (A&J) and Mr.Amitabh Misra, Chief Commissioner-III appeared before the court and promised that necessary action with regard to revamping the system and giving better assistance to the court had been taken. As regards the non-payment of fee to counsel, it was stated that the arrears towards the admitted fee would be cleared in the next two months and in cases where there was a dispute of parameters, it would be sorted out with the counsels themselves. The CBDT Member requested that a quietus may be given to the issue and assured the court that there would be no laxity in the assistance rendered to the court in future

Posted in All Judgements, High Court

Qualcomm Incorporated vs. ADIT (ITAT Delhi)

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DATE: October 18, 2012 (Date of publication)
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In Narang Overseas (P) Ltd vs. ACIT 114 TTJ 433 (SB), it was held by the Special Bench that if there is a cleavage of opinion amongst different High Courts and there is no decision of the jurisdictional High Court on the issue, then the view favourable to the assessee has to be followed. As the view of the Bombay High Court in Ronuk Industries 333 ITR 99 (Bom) & that of the Special Bench in Tata Communications Ltd vs. ACIT 138 TTJ (Mum) 257 is favourable to the assessee, that has to be followed and it has to be held that the assessee is entitled to a stay of the demand even after the expiry of the period of 365 days if the delay in disposal of the appeal is not exclusively attributable to it

Posted in All Judgements, Tribunal

DCIT vs. India Advantage Securities Ltd (ITAT Mumbai)

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DATE: October 12, 2012 (Date of publication)
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Though in American Express Bank, the Tribunal followed Daga Capital Management 117 ITD 169 & distinguished Leena Ramachandran 339 ITR 296 (Ker) & held that s. 14A applies also to a trader in shares, the Karnataka High Court has held in CCL Ltd 250 CTR 291 that disallowance of expenses incurred on borrowings made for purchase of trading shares cannot be made u/s.14A. As this is a direct judgment of a High Court on the issue, the same has to be followed in preference to the decision of the Special Bench of the Tribunal in Daga Capital Management (or that in American Express Bank) & it has to be held that disallowance of interest in relation to the dividend received from trading shares cannot be made (Ganjam Trading Co (included in file) & Yatish Trading Co 129 ITD 237 followed)

Posted in All Judgements, Tribunal

National Petroleum Construction Company vs. ADIT (ITAT Delhi)

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DATE: October 12, 2012 (Date of publication)
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However, though the contract was on a “turnkey” basis, it had to be regarded as an “umbrella contract” and as being a divisible contract because the consideration for various activities has been stated separately. Also, ONGC had the discretion to take only the platform erected by the assessee in Abu Dhabi without having installation thereof. The segregation of the contract revenues into offshore and onshore activities was made at the stage of awarding the contract. The total consideration was earmarked towards different activities and separate payment had to be made on the basis of work of design, engineering, procurement and fabrication. These operations had been carried out and completed outside India. The PE was in respect of the installation and commissioning work done in India and the activities carried outside India were not attributable to the said PE (Hyundai Heavy Industries 291 ITR 482 (SC), Ishikawajma-Harima Heavy Industries 288 ITR 408 (SC) & Roxon OY 103 TTJ 891 (Mum) followed)

Posted in All Judgements, Tribunal

CIT vs. Smt. B Sumangaladevi (Karnataka High Court)

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DATE: (Date of pronouncement)
DATE: October 11, 2012 (Date of publication)
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Though in Ranka and Ranka it was held by the Court that Instruction No. 3 of 2011 issued by the CBDT is applicable to the pending cases filed prior to 09.02.2011, this view is against public interest and public policy because clause 11 of the said Instruction specifically says that it will be applicable only to cases filed on or after 9.2.2011. The Revenue’s contention that Instruction No.3 dated 09.02.2011 has no retrospective effect is upheld

Posted in All Judgements, High Court

J.B. Roy vs. DCIT (Allahabad High Court)

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DATE: (Date of pronouncement)
DATE: October 10, 2012 (Date of publication)
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Though s. 260A (2A) has been inserted retrospectively w.e.f. 01.10.1998 by the Finance Act, 2010, the fact remains that cases already settled before the said amendment cannot be re-opened as per the ratio laid down in Babu Ram v. C. C. Jacob AIR (1999) SC 1845, where it was observed that the prospective declaration of law is a devise innovated by the apex court to avoid reopening of settled issues and to prevent multiplicity of proceedings. It is also a devise adopted to avoid uncertainty and avoidable litigation. By the very object of prospective declaration of law, it is deemed that all actions taken contrary to the declaration of law prior to its date of declaration are validated. This is done in the larger public interest. In matters, where decisions opposed to the said principle have been taken prior to such declaration of law cannot be interfered with on the basis of such declaration of law. The amendment is applicable to future cases to avoid uncertainty as per the ratio laid down in M. A. Murthy v. State of Karnatka 264 ITR 1 SC, where it was observed that prospective over-ruling is a part of the principles of constitutional canon of interpretation and can be resorted to by the Court while superseding the law declared by it earlier. It is not possible to anticipate the decision of the highest court or an amendment and pass a correct order in anticipation as per the ratio laid down in CIT v. Schlumberger Sea Company 264 ITR 331 (Cal). Therefore, the amendment introduced in s. 260-A(2A) has the effect only on pending and future cases. On the date when the appeal was dismissed on the ground of limitation, there was no discretion with the court to condone the delay. A discretion has come to the court by virtue of the amendment by inserting s. 260-A (2A). The appeal was (rightly) dismissed as per the then law and the subsequent amendment is not applicable as the matter has already attained finality

Posted in All Judgements, High Court

CIT vs. Shambhubhai Mahadev Ahir (Gujarat High Court)

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DATE: October 10, 2012 (Date of publication)
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Though in Sureshchandra Durgaprasad Khatod (HUF) (and other judgements), it has been held that Instruction No. 3 of 2011 dated 9.2.2011 shall apply to pending appeals paragraph 11 of the Instruction itself provides that “This instructions will apply to appeals filed on or after 9th February 2011. However, the cases where appeals have been filed before 9th February 2011 will be governed by the instructions on this subject, operative at the time when such appeal was filed”. The issue requires consideration by a larger Bench. A number of decisions of various High Courts on the subject (Kodananad Tea Estates 275 ITR 244, Varinder Construction Co 331 ITR 449 (P&H)(FB), John L. Chackola 337 ITR 385(Ker)) were not brought to the notice of this Court in the case of Sureshchandra Durgaprasad Khatod (HUF). We, independently also have serious doubts if the instructions of 2011 can be applied to cases filed earlier. Also, the said Instruction cannot be interpreted on the basis of the litigation policy. Also, prospective application of the instructions would not lead to any absurdity. If by applying the instructions prospectively, certain appeals would be decided on merits, because the appeals were filed prior to issuance of the new instructions, the same cannot be stated to be absurd. A counter situation also may arise if such instructions are applied with retrospective effect to all pending appeals whereby an appeal would be dismissed without examination on merits simply because the same survived for a longer period than the cognate appeals. Sureshchandra Durgaprasad Khatod (HUF) accordingly requires reconsideration

Posted in All Judgements, High Court

CIT vs. Jaydev H. Raja (Bombay High Court)

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DATE: (Date of pronouncement)
DATE: October 9, 2012 (Date of publication)
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The total salary received by the assessee in India was Rs.77.00 lakhs on which the tax payable at the maximum rate of 44.8% comes to Rs.35.00 lakhs. Since the assessee under the Tax Equalization Policy was entitled to get reimbursement of the tax payable on the amount of Rs.77.00 lakhs, his salary income was Rs.113.00 lakhs (Rs.77.00 lacs plus Rs.35.00 lacs). Though the assessee paid tax of Rs.50.00 lakhs, he was entitled to reimbursement of tax amounting to Rs.35.00 lakhs and the balance Rs.15.00 lakhs was borne out of the salary income received by the assessee in India. The confusion had arisen because the assessee in his computation had added Rs.50.00 lakhs as income and deducted Rs.15.00 lakhs from the income, when in fact the said amount of Rs.15.00 lakhs was not received from the company but paid out of the salary amount received in India. In other words, though the assessee had paid tax of Rs.50.00 lakhs, since the assessee was entitled to reimbursement of Rs.35.00 lakhs from the Company, the salary income (Rs.77.00 lakhs) received by the assessee had to be enhanced by Rs.35.00 lakhs only and not by the balance Rs.15.00 lakhs which is paid by the assesses from the salary income. Accordingly, the tax of Rs.15.00 lakhs paid by the assessee from the salary income (not reimbursed by the company) could not be added to the assessee’s income

Posted in All Judgements, High Court

Girish Ramchandra Deshpande vs. CIC (Supreme Court)

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DATE: (Date of pronouncement)
DATE: October 5, 2012 (Date of publication)
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The details disclosed by a person in his income tax returns are “personal information” which stands exempted from disclosure under clause (j) of Section 8(1) of the RTI Act, unless it involves a larger public interest and the Central Public Information Officer or the State Public Information Officer or the Appellate Authority is satisfied that the larger public interest justifies the disclosure of such information. On facts, as the Petitioner has not made a bona fide public interest in seeking information, the disclosure of such information would cause unwarranted invasion of privacy of the individual u/s 8(1)(j) of the RTI Act

Posted in All Judgements, Supreme Court