Chirag Wadhwa has analyzed the raging controversy as to whether a foreign company is liable to furnish a return of its income under section 139(1) of the Income-tax Act, 1961 even though its income is admittedly not chargeable to tax. He has analyzed the conflicting rulings of the Authority for Advance Rulings and explained the controversy in its correct perspective

The case of whether there is an obligation of filing return of income after claiming treaty benefit has been covered vide my article Heads you Quote PAN, Tails you obtain a PAN. Due to a recent ruling on the concerned matter, the issue has again propped up thereby creating unnecessary confusion & uncertainty. An attempt has been made to provide clarity on the subject matter by analysing several judicial precedents and the statute.

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CA Ashish Karundia has conducted a meticulous study into the weaknesses and failures of the traditional concept of a permanent establishment. He argues, with reference to a multitude of domestic and international judgements, that the PE concept has failed in reaching the objective of legitimate taxation of income that is attributable to an enterprise of the non-resident enterprise

Permanent Establishment (PE) is a key facet of international taxation and the same constitutes a crucial threshold for the assignment of taxing rights in respect of the business income to a jurisdiction where enterprises operate in more than one country. The concept of permanent establishment has witnessed a sea change since its introduction and hence, the need to address the newer issues. The said concept is designed to ensure that business activities do not get taxed by any state unless significant economic bonds are created between the enterprise and the state.

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Shri. Akhilesh Kumar Sah, Advocate, has provided valuable perspective on the controversial issue relating to the deduction of interest on loan diverted to sister/ subsidiary concerns without interest. The entire law on the subject as encapsulated in the recent verdict of the Supreme Court in Hero Cycles (P) Ltd vs. CIT is considered

Introduction:

Many a times dispute arises about the deduction of interest on loan while computing income from business where the assessee parts loan to its sister/ subsidiary concern without interest. Also, a lot of cases have arisen since the introduction of income tax law about the nexus of an expenditure in relation to the income from deduction point of view.

Recently, in Hero Cycles (P) Ltd vs. CIT (Central), Ludhiana [Civil Appeal No. 514 Of 2008, November 5, 2015], as per facts & circumstances of the case, the Apex Court has put an end to the controversy.

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Shri. Akhilesh Kumar Sah, Advocate, has explained the law on whether compact disc, tape recorded conversation is a “document” and admissible as an evidence in the light of the verdict of the Super Court in Shamsher Singh Verma vs. State of Haryana and other important judgements

Recently, on the facts & circumstances of the appeal, Hon’ble Supreme Court has decided that compact disc, tape recorded conversation is a document and admissible as an evidence. This appeal has been decided by Hon’ble Supreme Court relating to Shamsher Singh Verma vs. State of Haryana [Criminal Appeal No. 1525 Of 2015 (Arising Out Of S.L.P. (Crl.) No. 9151 Of 2015)].

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Shri. Sunil Moti Lala, Advocate, has prepared a compilation of important judgements on transfer pricing, international tax and domestic tax reported in the period from August to October 2015. The author has meticulously and systematically classified the judgements into various categories to enable ease of reference. A pdf copy of the digest is available for download. The digest will prove invaluable to all practitioners of taxation law

I. Transfer Pricing

a. International transaction

1. The Tribunal held that where it was a concerted action intended in a manner as not to attract section 92B of the Act but in substance the agreements indicated a transaction between two AEs along with an intervening third party, the said transaction was to be classified as a deemed international transaction.
Novo Nordisk India Pvt Ltd v DCIT [IT(TP)A No 146 / Bang / 2015] – TS-366-ITAT-2015(Bang)-TP

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Shri. N. M. Ranka, Senior Advocate, has enumerated in a succinct manner the qualities that professionals need to develop in order to be successful in the practice of taxation law

Since times immemorial profession of law, medicine and divinity have been recognised as noble professions. Profession of accountancy have been added with industrialisation, globalisation and trade and commerce. With socialistic pattern of society, levy of tax, duty, cess, fee etc. became life and blood, rather a necessity and no Government can function smoothly without national tax policy. Taxation became a power of political superior.

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Shri. Akhilesh Kumar Sah, Advocate, has examined the controversial issue as to whether payments for use of services involving use of land and building can be characterized as “rent” so as to warrant deduction of TDS under section 194-I of the Act. He has analyzed all the latest and important verdicts on the issue

Introduction:

Section 194 I and section 194 C of the Income Tax Act, 1961 deal with the deduction of tax at source from rent and deduction of tax from payment to contractors and sub-contractors, respectively.

Very recently, in Japan Airlines Co. Ltd. vs. CIT [Civil Appeal No. 9875 of 2013 with Civil Appeal Nos. 9876-9881 OF 2013, decided on: 04.08.2015], on the facts and circumstances of the appeals, SC has held that use of the land was only minor and insignificant, incidental one, the TDS provision under section 194-I of the Act was not applicable on the charges paid and also, it was not necessary to go into the scope of Section 194-C of the Act.

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CA Vinay Kawdia has explained in a comprehensive manner the entire law relating to the implications arising out of the death of an income-tax assessee with reference to the pending and impending assessment, recovery, penalty, prosecution and appeal proceedings. All important judgements relevant to the issue have been referred to

Introduction:

“Nothing is certain except death and taxes.”Thus spake Benjamin Franklin in his letter of November 13, 1789 to Jean Baptiste Leroy. To tax the dead is a contradiction in terms. Tax laws are made by the living to tax the living. What survives the dead person is what is left behind in the form of such person’s property.” [Supreme Court in Shabina Abraham Vs. CCE, Civil Apeal No. 5802 of 2005]

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Shri. Akhilesh Kumar Sah, Advocate, has dealt with two landmark judgements of the Supreme Court on the rights, duties and privileges of advocates and explained the entire issue in the proper perspective in the context of the rules of the Bar Council of India and the Code of Ethics

The recent two judgments, one Himalayan Cooperative Group Housing Society vs. Balwan Singh [decided on April 29, 2015] and another, AG vs. Shiv Kumar Yadav & Anr., decided on September 10, 2015] are very important in respect of workings of the High Courts as well as of Advocates.

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Shri. Akhilesh Kumar Sah, Advocate, has dealt with the interesting issue of the binding force of judgements in the context of income-tax law. He argues that as the Income-tax Act extends to the whole of India, the judgments rendered by a High Court should normally be followed by the other High Courts in order to preserve uniformity in law unless there are compelling reasons for departing from the view taken by the High Court

There remains controversy, many a times, in the cases relating to taxation matters whether decision of the particular Tribunal or High Court (not being of the jurisdiction) be followed or not in deciding the appeal. Recently, in Astik Dyestuff Pvt Ltd Vs. CCE [2014-TIOL-237-HC- AHM-ST] it has been held that if there is any conflict between the jurisdictional High Court and the CBEC circular, the decision of the jurisdictional High Court is binding on the department rather than CBEC circular, and, when there are two contrary decisions, one of jurisdictional High Court and another of the other High Court, then the decision of the jurisdictional High Court is binding on the department and not the decision of another High Court. Read more ›