Search Results For: V. Kameswar Rao J


Agson Global Pvt. Ltd vs. ITSC (Delhi High Court)

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DATE: January 6, 2016 (Date of pronouncement)
DATE: January 29, 2016 (Date of publication)
AY: 2004-05 to 2011-12
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S. 245F: The Settlement Commission does not have the power to direct a special audit u/s 142(2A)

The exclusive jurisdiction of the settlement commission to exercise the powers and perform the functions of an income tax authority, in terms of section 245F(2) of the said Act, is to be exercised and performed for the purpose of settlement of the case under Chapter XIX-A and not for assessment under Chapter XIV. That being the case, the powers and functions which are in the exclusive jurisdiction of the settlement commission are circumscribed by the object and role which has been ascribed to the settlement commission, which is to settle the case in terms of the procedure stipulated in Chapter XIX-A. Since assessment of the type contemplated under section 143(3) is outside the purview of settlement proceedings, a special audit under section 142(2A), which is in aid of assessment, would also be beyond the scope of settlement proceedings

CIT vs. Cotton Naturals (I) Pvt. Ltd (Delhi High Court)

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DATE: March 27, 2015 (Date of pronouncement)
DATE: April 6, 2015 (Date of publication)
AY: 2007-08
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Transfer Pricing: Entire law on determining ALP of transaction of loan of money to AE discussed

The question whether the interest rate prevailing in India should be applied, for the lender was an Indian company/assessee, or the lending rate prevalent in the United States should be applied, for the borrower was a resident and an assessee of the said country must be answered by adopting and applying a commonsensical and pragmatic reasoning. We have no hesitation in holding that the interest rate should be the market determined interest rate applicable to the currency concerned in which the loan has to be repaid. Interest rates should not be computed on the basis of interest payable on the currency or legal tender of the place or the country of residence of either party. Interest rates applicable to loans and deposits in the national currency of the borrower or the lender would vary and are dependent upon the fiscal policy of the Central bank, mandate of the Government and several other parameters. Interest rates payable on currency specific loans/ deposits are significantly universal and globally applicable. The currency in which the loan is to be re-paid normally determines the rate of return on the money lent, i.e. the rate of interest

Sony Ericsson Mobile Communications India Pvt. Ltd vs. CIT (Delhi High Court)

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DATE: March 16, 2015 (Date of pronouncement)
DATE: March 16, 2015 (Date of publication)
AY: 2008-09
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Transfer Pricing: The “bright line test” has no statutory mandate and a broad-brush approach is not mandated or prescribed. Parameters specified in paragraph 17.4 of Special Bench verdict in L. G. Electronics are not binding on the assessee or the Revenue. Matter remanded to the Tribunal for de novo consideration because the legal standards or ratio accepted and applied by the Tribunal was erroneous

Parameters specified in paragraph 17.4 of the order dated 23rd January, 2013 in the case of L.G. Electronics India Pvt Ltd (supra) are not binding on the assesse or the Revenue. The “bright line test” has no statutory mandate and a broad-brush approach is not mandated or prescribed. We disagree with the Revenue and do not accept the overbearing and orotund submission that the exercise to separate “routine” and “non-routine” AMP or brand building exercise by applying “bright line test” of non-comparables should be sanctioned and in all cases, costs or compensation paid for AMP expenses would be “NIL”, or at best would mean the amount or compensation expressly paid for AMP expenses. It would be conspicuously wrong and incorrect to treat the segregated transactional value as “NIL” when in fact the two AEs had treated the international transactions as a package or a single one and contribution is attributed to the aggregate package. Unhesitatingly, we add that in a specific case this criteria and even zero attribution could be possible, but facts should so reveal and require. To this extent, we would disagree with the majority decision in L.G. Electronics India Pvt. Ltd. (supra). This would be necessary when the arm‘s length price of the controlled transaction cannot be adequately or reliably determined without segmentation of AMP expenses

CIT vs. Taikisha Engineering India Ltd (Delhi High Court)

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DATE: November 25, 2014 (Date of pronouncement)
DATE: March 9, 2015 (Date of publication)
AY: 2008-09, 2009-10
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S. 14A + Rule 8D: No disallowance can be made if AO does not record satisfication with reference to accounts that assessee's claim is improper. However, if Rule 8D applies, assessee's claim that interest is not disallowable on ground of "own funds" is not acceptable

The decisions relied upon by the Tribunal in the case of Tin Box Co. 260 ITR 637 (Del), Reliance Utilities and Power Ltd. 313 ITR 340 (Bom.), Suzlon Energy Ltd. 354 ITR 630 (Guj) and East India Pharmaceutical Works Ltd. 224 ITR 624 (SC) could not be now applicable, if we apply and compute the disallowance under Rule 8D of the Rules. The said Rule in sub Rule (2) specifically prescribes the mode and method for computing the disallowance under Section 14A of the Act. Thus, the interpretation of clause (ii) to sub Rule (2) to Rule 8D of the Rules by the CIT(A) and the Tribunal is not sustainable. The said clause expressly states that where the assessee has incurred expenditure by way of interest in the previous year and the interest paid is not directly attributable to any particular income or receipt then the formula prescribed would apply

CIT vs. Hritnik Exports Pvt. Ltd (Delhi High Court)

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DATE: November 13, 2014 (Date of pronouncement)
DATE: March 3, 2015 (Date of publication)
AY: 2008-09, 2009-10
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S. 10B(4): All business profits of the undertaking are eligible for deduction and it is not necessary to show that they have a "direct nexus" with the undertaking

Sub-section (4) of s. 10B does not require an assessee to establish a direct nexus with the business of the undertaking and once an income forms part of the business of the undertaking, the same would be included in the profits of the business of the undertaking. Thus, once an income forms part of the business of the eligible undertaking, there is no further mandate in the provisions of section 10B to exclude the same from the eligible profits

Srei Infrastructure Finance Ltd vs. ACIT (Delhi High Court)

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DATE: February 11, 2015 (Date of pronouncement)
DATE: February 16, 2015 (Date of publication)
AY: 2006-07, 2007-08
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S. 115JB: Distinction between "reserve" & "provision" explained. Statutory reserve created u/s 45-IC of RBI Act is not a "diversion of income at source" and cannot be excluded from book profits

Diversion of income at source by way of overriding title as a principle is applicable when under a statutory or contractual obligation or under the provisions of Memorandum and Articles of Association, the earning is divested and the assessed has no title over a particular receipt. When such charge exists, the amount or income so charged must be excluded from income of the assessed as income never reaches his hands and in fact belongs to a third person. Thus, the income stands diverted at source. Diversion of income at source implies that income or the amount mentioned therein belongs to a third party and was not income of the assesse

CIT vs. M/s Muthoot Financiers (Delhi High Court)

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DATE: February 3, 2015 (Date of pronouncement)
DATE: February 9, 2015 (Date of publication)
AY: 1996-97
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S. 269SS: Transaction of loan between a firm and its partner does not attract s. 269SS. If other High Courts have taken a consistent view, that should be followed even if opposite view is possible

Transaction effected between a firm and its partners cannot partake the colour of loan or deposit and as such, Section 269-SS nor Section 271-D of the Act would come into play

CIT vs. Delhi Race Club (Delhi High Court)

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DATE: November 18, 2014 (Date of pronouncement)
DATE: December 2, 2014 (Date of publication)
AY: 2007-08, 2009-10
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S. 9(1)(vi): Broadcast or live coverage does not have a "copyright" & is consequently not assessable as "royalty" for purposes of TDS

(i) A live T.V coverage of any event is a communication of visual images to the public and would fall within the definition of the word “broadcast” in Section 2(dd). That apart we note that Section 13 does not contemplate

CIT vs. Holcim India P. Ltd (Delhi High Court)

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DATE: September 5, 2014 (Date of pronouncement)
DATE: October 17, 2014 (Date of publication)
AY: 2007-08 and 2008-09
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S. 14A & Rule 8D disallowance cannot be made if there is no exempt income or if there is a possibility of the gains on transfer of the shares being taxable.

(i) On the issue whether the assessee could have earned dividend income and even if no dividend income was earned, yet Section 14A can be invoked and disallowance of expenditure can be made, there are three decisions of the different

New Holland Tractors (India) Pvt. Ltd vs. CIT (Delhi High Court)

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DATE: September 25, 2014 (Date of pronouncement)
DATE: October 5, 2014 (Date of publication)
AY: 1996-97
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What is accrual of income. The word "conceal" inherently and per-se refers to an element of mens rea, albeit the expression "furnishing of inaccurate particulars" is much wider in scope

(i) We need not refer to the case law on the subject, what is income or accrual of income, except by referring to the authoritative pronouncement of this Court in Commissioner of Income Tax versus Dinesh Kumar Goel, (2011) 331

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