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DATE: April 29, 2015 (Date of pronouncement)
DATE: June 30, 2015 (Date of publication)
AY: 2005-06
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S. 40(a)(ia): Argument that the disallowance for want of TDS can be made only for amounts "payable" as of 31st March and not for those already "paid" is not correct. In Liminie dismissal of SLP in Vector Shipping does not mean Supreme Court has confirmed the view of the HC. However, ITAT to consider whether payees have already paid tax

The argument that section 40(a)(ia) applies only to amounts which are “payable” and not to amounts that are already “paid” is also not acceptable (Commissioner of Income Tax vs. Crescent Export Syndicate (2013) 216 Taxman 258 (Cal) and Commissioner of Income Tax vs. Sikandar Khan N. Tunwar (2013) 357 ITR 312 (Guj) followed)

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DATE: June 12, 2015 (Date of pronouncement)
DATE: June 27, 2015 (Date of publication)
AY: 2008-09, 2009-10
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CITATION:
S. 254(2A) third proviso cannot be interpreted to mean that extension of stay of demand should be denied beyond 365 days even when the assesseee is not at fault. ITAT should make efforts to decide stay granted appeals expeditiously

One cannot lost sight of the fact that there may be number of reasons due to which the learned Tribunal is not in a position to decide and dispose of the appeals within the maximum period of 365 days despite their best efforts. Some of the reasons due to which the learned Tribunal despite its best efforts is not in a position to dispose of the appeal/appeals at the earliest are stated herein above. There cannot be a legislative intent to punish a person/ assessee though there is no fault of the assessee and/or appellant

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DATE: June 11, 2015 (Date of pronouncement)
DATE: June 15, 2015 (Date of publication)
AY: -
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RTI Act: Disclosure of income-tax returns of a politician on the ground that it is necessary for “purity of elections” and “probity in public life” is not possible as it is not in “public interest”

The details disclosed by a person in his Income Tax Returns is personal information which has been exempted from disclosure under clause (j) of Section 8(1) of the said Act, unless involved a larger public and the CPIO and or State Public Information Officer or the Appellate Authority is satisfied that the larger public interest justifies the disclosure of such information

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DATE: May 12, 2015 (Date of pronouncement)
DATE: June 2, 2015 (Date of publication)
AY: 1990-91 to 2000-01
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CITATION:
S. 158BE: The search ends, and the period of limitation begins, only on the drawing up of the formal panchnama to record the ending of the search. The argument that the search is concluded on the date of the search itself if nothing is seized thereafter is not acceptable

Ordinarily an authorization for search is valid until the same has been executed. In order to avoid any controversy as to when was the authorization executed the legislature has provided in the aforesaid explanation that the authorization shall be deemed to have been executed on conclusion of search as recorded in the last panchnama. Therefore, the law insists upon a panchnama for the purpose of formal recording that the search is at an end. Without such recording the search once initiated does not come to an end. We are unable to find any justification for the view that search comes to an end immediately after the search has been concluded for the day

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DATE: May 29, 2015 (Date of pronouncement)
DATE: June 1, 2015 (Date of publication)
AY: 2004-05
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CITATION:
S. 9, Article 12: Meaning of expressions "consultancy services" and "independent personal services" in the context of a DTAA explained

It is evident that “consultancy services” would mean something akin to advisory services provided by the non-resident, pursuant to deliberation between parties. Ordinarily, it would not involve instances where the non-resident is acting as a link between the resident and another party, facilitating the transaction between them, or where the non-resident is directly soliciting business for the resident and generating income out of such solicitation

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DATE: May 27, 2015 (Date of pronouncement)
DATE: May 29, 2015 (Date of publication)
AY: -
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CITATION:
S. 9: Retrospective amendments seeking to tax income of non-residents does not affect the “source rule”. The amendment makes no any difference to the non-taxability of payments made to foreign companies if the income accrues abroad

While no doubt, the explanation is deemed to be clarificatory and for a good measure retrospective at that, nevertheless there is nothing in its wording which overrides the exclusion of payments made under Section 9(1)(vii)(b). The Supreme Court clarified this in GVK Industries Ltd. v. ITO 371 ITR 453 Thus, it is evident that the “source” rule, i.e the purpose of the expenditure incurred, i.e for earning the income from a source in India, is applicable

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DATE: May 15, 2015 (Date of pronouncement)
DATE: May 27, 2015 (Date of publication)
AY: 1994-95
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CITATION:
Where the agreement between the parties (for sale of shares) indicates that the lump-sum consideration was in respect of two or more promises (i.e. sale of shares & non-compete covenant), it is liable to be bifurcated and apportioned between each of the assets (Vodafone distinguished)

It is difficult to understand how the mere fact that the parties have not apportioned the consideration between the two assets which were being dealt with by this agreement can make any difference to the rights of the parties. The position might have been different if the market value of the shares could not be ascertained. Then it might be said that it is difficult to put a proper value upon the shares and to put a proper value for the consideration. But when the market value is available and when it is known for what price these shares could be purchased or sold, there is no difficulty whatsoever in the apportionment

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DATE: May 18, 2015 (Date of pronouncement)
DATE: May 27, 2015 (Date of publication)
AY: 1996-97
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CITATION:
S. 43B Expl 3C: Conversion of outstanding interest into a loan does not amount to an "actual payment" of the interest and so deduction for the interest cannot be claimed

In view of the Explanation 3C appended to Section 43B with retrospective effect from 01.04.1989, conversion of interest amount into loan would not be deemed to be regarded as actually paid amount within the meaning of Section 43B of the Act

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DATE: May 19, 2015 (Date of pronouncement)
DATE: May 19, 2015 (Date of publication)
AY: -
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CITATION:
S. 254(2A): The Third Proviso which restricts the power of the ITAT to grant stay beyond 365 days “even if the delay in disposing of the appeal is not attributable to the assessee” is arbitrary, unreasonable and discriminatory. It is struck down as violative of Article 14. The ITAT has the power to extend stay even beyond 365 days

While it could be argued that the condition that the stay order could be extended beyond a period of 180 days only if the delay in disposing of the appeal was not attributable to the assessee was a reasonable condition on the power of the Tribunal to the grant an order of stay, it can, by no stretch of imagination, be argued that where the assessee is not responsible for the delay in the disposal of the appeal, yet the Tribunal has no power to extend the stay beyond the period of 365 days. The intention of the legislature, which has been made explicit by insertion of the words – ‘even if the delay in disposing of the appeal is not attributable to the assessee’– renders the right of appeal granted to the assessee by the statute to be illusory for no fault on the part of the assessee. The stay, which was available to him prior to the 365 days having passed, is snatched away simply because the Tribunal has, for whatever reason, not attributable to the assessee, been unable to dispose of the appeal

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DATE: May 8, 2015 (Date of pronouncement)
DATE: May 9, 2015 (Date of publication)
AY: -
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CITATION:
S. 194-I/ 194-J: Meaning of expression "rent" and "fees for technical services" explained in the context of transmission & wheeling charges paid by electricity company

The expression rent would also entail an element of possession. In each of the instances contemplated by the explanation to Section 194-I, we see in them an element of possession, be it land, building (including factory building), land appertaining to a building, plant, equipment, furniture or fittings. The person using it has some degree of possessory control, at least momentarily, although it cannot entrust the user title to the subject matter of the charge. Even the mere right to “use” is vested with an element of possessory control over the subject matter

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