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DATE: July 15, 2015 (Date of pronouncement)
DATE: July 21, 2015 (Date of publication)
AY: 2007-08
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S. 68: If the assessee has furnished the details of the creditors with their PAN, the onus is on the AO to examine their credit-worthiness and source of payment to assessee

If at all the A.O. or CIT(A) had any doubt with regard to creditworthiness of the creditors, it should have triggered an enquiry by the A.O. to find out the real facts. When the identity of the creditors along with their income tax particulars including PAN and assessment details were available with the A.O. it would not have been difficult on the part of the A.O. to verify their bank accounts and other details to ascertain whether the advances were from explained sources. Even the A.O. could have taken up the issue with the concerned A.Os with whom the creditors are assessed

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DATE: June 30, 2015 (Date of pronouncement)
DATE: July 8, 2015 (Date of publication)
AY: 2011-12
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S. 2(15)/ 11: Important principles of what is a "charitable purpose" and the scope of the proviso to section 2(15) of the Act explained

As regards the proviso to Section 2(15) of the Act, it is clearly discernible from the CBDT’s Circular No.11 of 2008, dated 19.12.2008 and speech of the Hon’ble Finance Minister that the intention of Parliament in introducing the proviso to Section 2(15) of the Act is to deny exemption to those organizations or entities, which are purely commercial or business in nature or the commercial business entities, which wear the mask of a charity. The genuine charitable organizations are not affected in any way

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DATE: February 4, 2015 (Date of pronouncement)
DATE: February 9, 2015 (Date of publication)
AY: 2010-11
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TPO/ DRP's action of reducing the quantum of royalty paid to AE by applying the "benefit test" is surprising and improper

It is an accepted principle of law that TPO has to determine the ALP by adopting any one of the methods prescribed u/s 92C of the Act. Mode and manner of computation of ALP under different methods have been laid down in rule 10B. Even, assuming that TPO has followed CUP method for determining ALP of royalty payment, as held by ld. DRP, it needs to be examined if it is strictly in compliance with statutory provisions. Rule 10B(1)(a) lays down the procedure for determining ALP under CUP method

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DATE: January 30, 2015 (Date of pronouncement)
DATE: February 2, 2015 (Date of publication)
AY: 2006-07
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S. 54F is a beneficial provision which has to be construed liberally. Even if construction/ purchase of new house is not completed within stipulated period, deduction is admissible if investment is made

If the assessee has invested the money in construction of residential house, merely because the construction was not complete in all respects and it was not in a fit condition to be occupied within the period stipulated, that would not disentitle the assessee from claiming the benefit under section 54F

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DATE: January 21, 2015 (Date of pronouncement)
DATE: January 22, 2015 (Date of publication)
AY: 2007-08
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S. 5(1) r.w. Art 16(1) of DTAA: Taxability of stock options allotted outside India by foreign co to NOR employee for services rendered in India considered

Without ascertaining how much of the SOTP is attributable to services rendered in India, the entire amount cannot be made taxable only because the money was received in India. Therefore, we are of the view that the assessee having residential status of ‘not ordinarily resident’, only that portion of the stock awards and SOTP attributable to services rendered in India can form part of total income for the assessment year

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DATE: January 16, 2015 (Date of pronouncement)
DATE: January 21, 2015 (Date of publication)
AY: 2006-07
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(i) ALP of interest on loan granted to European AE has to be based on Euribor, (ii) If technical know-how is transferred by reserving certain rights, there is no "transfer" for s. 2(47) capital gains, (iii) interest u/s 244A is not taxable if withdrawn

Though, technical know-how is a capital asset, it does not necessarily follow that all receipts from exploitation of such asset are to be treated as capital receipts. Revenue receipts can also be generated by exploiting capital assets

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DATE: December 31, 2014 (Date of pronouncement)
DATE: January 8, 2015 (Date of publication)
AY: 2009-10
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S. 54F: Amount paid to builder for house is equivalent to amount spent by assessee for construction. Fact that only advance is given and construction is delayed beyond 3 years does not deprive assessee of exemption

A flat which is newly constructed by a builder on behalf of the assessee is in no way different from a house constructed. Section 54F being a beneficial provision has to be interpreted so as to give the benefit of residential unit viz., flat instead of house in the present state of affairs. Even if only advance is given the benefit still will be available for exemption u/s. 54F

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DATE: December 31, 2014 (Date of pronouncement)
DATE: January 8, 2015 (Date of publication)
AY: 2010-11
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Distinction between 'diversion of income by over-riding title' and 'application of income' explained. Contribution of 1% of net profit to the Cooperative Education Fund maintained by National Cooperative Union is an application of income

Diversion of income has multi-facets. Diversion arises where income is applied in a particular manner under statutory or contractual obligation or under the provisions of a document under which the company is constituted viz., memorandum of article of association or a firm has come into existence. In these circumstances, the principle that has emerged is that if a person has alienated or assigned the source of his income so that it is no longer remains his income, he cannot be taxed upon the income arising after the assignment of the source. In such event, it is not income of the assessee at all

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DATE: November 21, 2014 (Date of pronouncement)
DATE: December 3, 2014 (Date of publication)
AY: 2008-09 & 2009-10
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S. 80-IB: Excise duty refund is "derived" from the undertaking. Liberty India 316 ITR 218 (SC) is distinguishable

The AO has denied 80IB deduction on excise duty refund for the sole reason that it cannot be treated as income derived from eligible business of the undertaking. However, as can be seen from the facts brought on record, there …

DCIT vs. Coromandel International Ltd (ITAT Hyderabad) Read More »

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DATE: November 26, 2014 (Date of pronouncement)
DATE: December 1, 2014 (Date of publication)
AY: 2008-09
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S. 2(47)/ 53A: Mere handing over possession pursuant to development agreement does not result in transfer if developer has not taken steps for development of property

The AO has assessed capital gain in the assessment year for the reason that assessee as per the terms of the development agreement entered with the developer has handed over possession of the property. However, as can be seen from …

ACIT vs. B. Rajamallu (ITAT Hyderabad) Read More »