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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
FILE: Click here to view full post with file download link
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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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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 »

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DATE: October 17, 2014 (Date of pronouncement)
DATE: October 20, 2014 (Date of publication)
AY: 2009-10
FILE: Click here to view full post with file download link
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S. 43(5)(a): Loss on foreign currency forward contracts by a manufacturer/ exporter is a “speculation loss” and not a “hedging loss”

Unless the assessee shows that there was some existing contract in respect of which he was likely to suffer a loss because of future price fluctuations and that it was to safeguard against such loss that he entered into the …

Araska Diamond Pvt. Ltd vs. ACIT (ITAT Mumbai) Read More »

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DATE: October 13, 2014 (Date of pronouncement)
DATE: October 18, 2014 (Date of publication)
AY: 2005-06
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Adjustment for capacity underutilization has to be in the results of the comparables and not the tested party. A 100% captive unit has to show that underutilization was for reasons beyond its control

The CIT(A) granted impugned relief by making adjustments, on account of capacity underutilization, in the results shown by the tested party and thus computing hypothetical financial results which the tested party would have achieved in perfect conditions. Such an exercise …

DCIT vs. EDAG Engineers & Design India Pvt Ltd (ITAT Delhi) Read More »

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DATE: October 17, 2014 (Date of pronouncement)
DATE: October 18, 2014 (Date of publication)
AY: 2008-09
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Entire law on taxation of private specific/ discretionary trusts under revocable & irrevocable transfers and AOPs explained

(i) Private Trusts could be Fixed or Discretionary Trusts. A fixed trust is a trust in which the beneficiaries have a current fixed entitlement to such income as remains after proper exercise of the trustee’s powers. On the other hand, …

DCIT vs. India Advantage Fund-VII (ITAT Bangalore) Read More »

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DATE: October 13, 2014 (Date of pronouncement)
DATE: October 18, 2014 (Date of publication)
AY: 2003-04
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In computing operating profits, expenditure of other years has to be excluded. Forex gains and losses have to be treated at par

There is a categorical finding by the CIT(A) that superannuation contribution of Rs 5,88,254 pertains to the assessment year 2000-01 and 2001-02. This finding remains uncontroverted. In this view of the matter, there cannot indeed be any rationale in taking …

ITO vs. EDAG Engineers & Design India Pvt Ltd (ITAT Delhi) Read More »

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DATE: October 13, 2014 (Date of pronouncement)
DATE: October 18, 2014 (Date of publication)
AY: 2008-09
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CUP cannot be applied on hypothetical or imaginary value but a real value on which similar transactions have taken place is required. TPO has no jurisdiction to question commercial expediency of transaction

(i) One of the very basic pre condition for use of CUP method is availability of the price of the same product and service in uncontrolled conditions. It is on this basis that ALP of the product or service can …

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