The Bombay High Court has directed that appeals involving the following issues should be grouped and placed for hearing at an early date.
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S. 80HHC Netting Not Allowed: Bombay High Court
In an oral judgement delivered today (19th March 2010) in CIT vs. Asian Star Co Ltd ITA No. 200 OF 2009 and other cases, the Bombay High Court has dissented from the judgement of the Delhi High Court and held that the language of Expl. (baa) to s. 80HHC did not permit such netting off. It held that the Special Bench had traversed the limits of interpretation and virtually legislated in giving the deduction. It held that merely because s. 80HHC was an incentive provision was no ground for giving more deduction that what the statute permitted. It held that for purposes of Expl. (baa) to s. 80HHC, 90% of gross interest has to be reduced from business profits.
S. 194C does not apply to contract manufacturers: Bombay High Court
The question whether contract manufacturing agreements are subject to s. 194C has been decided by the Bombay High Court in Glenmark Pharmaceuticals Ltd ITA No. 2256 of 2009 and other matters in favour of the assessees. In an oral judgement pronounced today 12th March 2010, the Court held that while “works contracts” were subject to TDS under section 194C, “sales contracts” were not. It upheld the arguments of the pharmaceutical companies that the contract manufacturing agreements entered into by them with other manufacturers amounted to a “sales contract” which was not liable to TDS u/s 194C. The text of the judgement shall be made available shortly.
Finance Bill 2010 & Budget 2010
The Finance Bill 2010, the Notes on Clauses & the Memorandum explaining the Finance Bill are available for download.
Samsung Electronics: Supreme Court final hearing on 18.08.2010
In the SLP filed against the judgement of the Karnataka High Court in CIT vs. Samsung Electronics, the Supreme Court has directed that all matters be placed for final hearing on 18th August, 2010.
S. 80IA (4) validity challenged in the Bombay High Court
A writ Petition challenging the constitutional validity of the Explanation inserted by the Finance No.2 Act 2009 to section 80IA (4) of the Act with retrospective effect from 1.4.2000 has been admitted today (16.2.2010) by the Bombay High Court in Patel Engineering Ltd vs. ACIT W. P. No. 219 of 2010.
ITAT Members’ Conference on International Taxation
The ITAT is organizing a ‘Members’ Conference on International Taxation’ on 19th & 20th February 2010 at Vigyan Bhavan, New Delhi. The Conference will be inaugurated by Hon’ble Mr. Justice K.G. Balakrishnan, Chief Justice of India. Dr M Veerapa Moily, Union Law Minister, will be Guest of Honour. Hon’ble Justice S. H. Kapadia will make a key note address “Shrinking globe, its impact and challenges before judiciary”.
Applications for appointment of Judicial & Accountant Members of the Tribunal
The Department of Legal Affairs, Ministry of Law & Justice has invited applications for the posts of Judicial Members and Accountant Members in the Income Tax Appellate Tribunal. There are 22 vacancies for the post of Judicial Member while there are 13 vacancies for the post of Accountant Member.
Adjustment of Fringe Benefit Tax (FBT) against advance tax
The Finance Act, 2005 introduced a levy namely Fringe Benefit Tax (FBT) on the value of certain fringe benefits as contained in Chapter XII H (Sections 115 W to 115 WL) of Income Tax Act, 1961. By the Finance (No. 2) Act, 2009 a new Section 115 WM was inserted to abolish the FBT with effect from Assessment Year (A.Y.) 2010-11. Consequently, benefits given to employees are taxed as perquisites in the hands of employees in terms of amendments to Clause 2 of Section 17 of Income Tax Act, 1961. However, during the current Financial Year 2009-10 some assessees have paid “advance tax in respect of fringe benefits” for Assessment Year 2010-11. In such cases the Board has decided that any installment of “advance tax paid in respect of fringe benefits” for A.Y. 2010-11 shall be treated as Advance Tax paid by assessee concerned for A.Y. 2010-11. The assessee can adjust such sum against its advance tax obligation in respect of income for A.Y. 2010-11 or in case of loss etc claim such payment as refund as advance tax paid in A.Y. 2010-11
Dispute Resolution Panel (DRP) is an optional remedy
The provisions of sub-section (2) to sub-section (5) of section 144C are quite clear that a choice has been given to the assessee either to go before the DRP or to prefer the normal appellate channel. It is again clarified that it is the choice of the assessee whether to file an objection before the Dispute Resolution panel against the draft assessment order or not to exercise this option and file an appeal later before CIT (Appeals) against the assessment order passed by the Assessing Officer.
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