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DATE: February 18, 2011 (Date of publication)
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5 Judge Bench of the Supreme Court recalls law requiring PSUs to obtain COD approval

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DATE: February 17, 2011 (Date of publication)
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On the issue whether the activity of promoting micro finance services is a “charitable purpose” u/s 2(15), as per CBDT Circular No.11 of 2008 dated 19.12.2008, a wide range of objects for the welfare of economically and socially disadvantaged people are covered and entities which pursue these objects will be eligible for exemption even if they incidentally carry on a commercial activity, subject, however, to the conditions stipulated in s. 11(4A) or the seventh proviso to s.10(23C)

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DATE: February 15, 2011 (Date of publication)
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To decide whether the institution exists solely for education and not to earn profit the test of predominant object of the activity has to be seen to decide. The purpose does not lose its character merely because some profit arises from the activity. It is not possible to carry on educational activity in such a way that the expenditure exactly balances the income and there is no resultant profit, for, to achieve this, would not only be difficult of practical realization but would reflect unsound principles of management. In order to ascertain whether the institute is carried on with the object of making profit or not it is duty of the prescribed authority to ascertain whether the balance of income is applied wholly and exclusively to the objects for which the applicant is established (Aditanars Educational Institution 224 ITR 310 (SC) & American Hotel and Lodging Association 301 ITR 86 (SC) followed)

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DATE: February 14, 2011 (Date of publication)
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The DRP, being an authority created under a statute and conferred with the powers, has the obligation to act as a body living to the expectations which the law mandates. The DRP has to afford adequate opportunity for personal hearing and deal with the issues urged by a speaking order which would reflect cogent reasons. This is apt to say so that no assessee can have any kind of apprehension that the approach to the DRP is perfunctory

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DATE: (Date of pronouncement)
DATE: February 12, 2011 (Date of publication)
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The authorities can determine the true legal relation resulting from a transaction and if some device has been used by the assessee to conceal true nature of the transaction, it is the duty of the authority to unravel the device and determine its true character. However, the legal effect of the transaction cannot be displaced by probing into the “substance of the transaction”. The taxing authority must not look at the matter from its own view point but that of a prudent businessman. Each case will depend on its own facts. The exercise of jurisdiction cannot be stretched to hold a roving enquiry or deep probe

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DATE: (Date of pronouncement)
DATE: February 11, 2011 (Date of publication)
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As the department had examined the fundamental nature of the transaction in the earlier years and its nature remained unchanged, the department could not have changed its view as regards the nature of the transaction by dubbing it as erroneous. Though the principle of res judicata does not apply to income-tax proceedings, Courts have held that where a fundamental aspect of a transaction is found as having permeated through different assessment years, the revenue is not permitted to change its view unless there is a change in circumstances. The department is not entitled to re-open an assessment based on a fresh inference of transactions accepted by the revenue for several preceding years on the pretext of dubbing them as erroneous. Associated Food Products 280 ITR 377 (MP), Sirpur Paper Mills Ltd 114 ITR 404 (AP) & CIT vs Gopal Purohit 228 CTR 582(Bom) followed

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DATE: (Date of pronouncement)
DATE: February 9, 2011 (Date of publication)
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The Australian Taxation Office has issued a ‘Taxation Ruling’ dated 9.2.2011 in which it has discussed the application of the transfer pricing provisions to business restructuring by multinational enterprises

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DATE: February 9, 2011 (Date of publication)
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That s. 80-IA deduction has to be computed after deduction of the notional brought forward losses and depreciation of business even though they have been allowed set off against other income in earlier years is concluded by the ITAT Special Bench judgement in ACIT vs. Gold Mine Shares & Finance (P) Ltd 113 ITD 209 (SB) (Ahd) against the assessee. As regards the High Court judgements in Mewar Oil & General Mills 271 ITR 311 (Raj) (not followed by the Special Bench) & Velayudhaswamy Spinning Mills vs. ACIT 38 DTR 57 (Mad) (delivered after referring to the Special Bench), though a judgement of a non-jurisdictional High Court prevails over a judgement of the Special Bench, the former cannot be followed, even though it is the only High Court judgement on the point, if “rendered without having been informed about certain statutory provisions that are directly relevant

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DATE: (Date of pronouncement)
DATE: February 8, 2011 (Date of publication)
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In the context of regular assessment proceedings, it has been held in Lalji Haridas vs. ITO 43 ITR 387 (SC) that even when there is no specific provision in the Act for protective assessment, the AO has power to make such a protective assessment under certain circumstances. This principle of law will apply to block assessment proceedings u/s 158BC & 158BD as well and the AO has the power to make a block assessment order on a protective basis

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DATE: (Date of pronouncement)
DATE: February 7, 2011 (Date of publication)
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The share transfer agreement merely refers to the sale of shares and the non-compete covenant and fixes the consideration at Rs. 90 & Rs. 15 respectively but does not refer to any “transfer of controlling interest”. The other circumstances (AoA etc) support the view that there was no transfer of controlling interest