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Month: October 2014

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DATE: October 21, 2014 (Date of pronouncement)
DATE: October 22, 2014 (Date of publication)
AY: 2007-08
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In a case of "sogo shosha" business model (high volume, low risk, trading of goods), the "berry ratio" (benchmarking gross profit and/ or net revenues (after subtraction of cost of sales) against operating expenses is an appropriate PLI. To avoid discrimination under Article 24(3) of the India-Japan DTAA, the benefit of no disallowance u/s 40(a)(ia) (in the cast of residents) for want of TDS if the recipient has paid the tax has to be extended to non-residents u/s 40(a)(i)

As regards the transfer pricing adjustment: (i) Even the TPO does not dispute that (a) MCI is a low risk activity in the field of trading, (b) MCJ group is primarily involved in high volume sales, or ‘colossal sales’ of …

Mitsubishi Corporation India Pvt. Ltd vs. DCIT (ITAT Delhi) Read More »

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DATE: October 17, 2014 (Date of pronouncement)
DATE: October 21, 2014 (Date of publication)
AY: 2005-06
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Expl 2 to S. 132B, though inserted w.e.f. 1.6.2013, is retrospective and seized cash cannot be adjusted against advance-tax liability

(i) As per provisions of section 132B of the Act the assets seized u/s 132 or requisitioned u/s 132A may be adjusted towards the amount of any “existing liability”. The Explanation 2 to section 132B of the Act inserted by …

DCIT vs. Spaze Tower Pvt. Ltd (ITAT Delhi) Read More »

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DATE: October 17, 2014 (Date of pronouncement)
DATE: October 21, 2014 (Date of publication)
AY: 2005-06
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S. 275(1A): Assessee's claim for refund of penalty with interest cannot be defeated by inaction of revenue

(i) What is provided by Section 275(1A) is that the order imposing or enhancing or reducing or cancelling the penalty may be passed on the basis of the assessment as revised by giving effect to the order in appeal. The …

Shanti Enterprise vs. ACIT (Gujarat High Court) Read More »

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DATE: October 17, 2014 (Date of pronouncement)
DATE: October 21, 2014 (Date of publication)
AY: 2005-06
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S. 115JB: AO entitled to tinker with P&L A/c if assessee's claim not permitted by accounting principles

The question that had arisen was whether the Assessing officer was entitled to disturb the net profit shown by the assessee in the profit and loss account prepared as per the Companies Act, 1956.in order to enable anybody to understand …

Padinjarekara Agencies Pvt. Ltd vs. ACIT (ITAT Cochin) Read More »

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DATE: October 16, 2014 (Date of pronouncement)
DATE: October 21, 2014 (Date of publication)
AY: 2003-04
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S. 68: Law regarding addition of share application money as unexplained credit explained

The only issue here is the addition of Rs.60 lacs made by the Assessing Officer as unexplained credit on account of the share application money. On going through the facts of the case, we notice that assessee has filed the …

ITO vs. Rakam Money Matters P. Ltd (ITAT Delhi) Read More »

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DATE: September 15, 2014 (Date of pronouncement)
DATE: October 21, 2014 (Date of publication)
AY: 2010-11
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Grant given to safeguard the interests of depositors, though used for meeting SLR requirements of RBI relatable to its banking activity, is still capital in nature

The objective of the Government of Maharashtra to give grant to the assessee was to protect the interests of farmers and depositors from the Nanded district and for the said purpose the Government deemed it fit to provide financial assistance …

The Nanded District Central Co-op. Bank Ltd vs. DCIT (ITAT Pune) Read More »

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DATE: October 14, 2014 (Date of pronouncement)
DATE: October 21, 2014 (Date of publication)
AY: 2007-08
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Failure to record detailed reasons in assessment order does justifying s. 147 action. There is a statutory presumption that AO has applied his mind while passing assessment order

Section 147 of the Act, as substituted w.e.f. 01.04.1989 does not postulates conferment of power upon the AO to initiate reassessment proceeding upon his mere change of opinion. Further, if ‘reason to believe’ of the AO is founded on an …

Munshi Mini Rice Mill vs. ITO (ITAT Kolkata) Read More »

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DATE: October 15, 2014 (Date of pronouncement)
DATE: October 20, 2014 (Date of publication)
AY: 2008-09
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Fraud in determination of LIBOR/ EURIBOR no reason to discard it as ALP

The department claimed that in determining the ALP of an international transaction of loan by the assessee to its AE, LIBOR could not be treated as the ALP as there was a “fraud” regarding fixation of ‘LIBOR’ as evidenced by …

Vijay Electricals Limited vs. ACIT (ITAT Hyderabad) Read More »

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DATE: October 17, 2014 (Date of pronouncement)
DATE: October 20, 2014 (Date of publication)
AY: 2009-10
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CITATION:
Foreign exchange fluctuation gain arising on realization of trade debtor’s, payment to creditors etc is operational income. Tests for distinguishing secondment contract with technical services agreement

(i) The TPO had considered foreign exchange fluctuation gains to be non-operational in nature. This view was confirmed by the DRP stating that the foreign exchange fluctuations had nothing to do with the business operations of a tax payer. The …

Cisco Systems Services B.E vs. ADIT (IT) (ITAT Bangalore) Read More »

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DATE: November 23, 2012 (Date of pronouncement)
DATE: October 20, 2014 (Date of publication)
AY: 2007-08
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CITATION:
Transfer Pricing: Turnover filter is an important criteria in choosing comparables

(i) The ICAI TP Guidelines note on this aspect lay down in para 15.4 that a transaction entered into by a Rs. 1,000 crore company cannot be compared with the transaction entered into by a Rs. 10 crore company. The …

Trilogy E-Business Software India vs. DCIT (ITAT Bangalore) Read More »