INDIAN INCOME TAX -SOME CASE LAWS 6

[2013] 32 taxmann.com 97 (Mum. – Trib.); [2013] 141 ITD (BN – XXX) Part 7; Dy. CIT v. S.J. Investment Agencies (P.) Ltd.

- In the instant case the Honourable Mumbai Tribunal held that sub-brokerage paid in connection with services rendered in course of buying and selling of units of mutual funds is not covered by provisions of Section 194H.

[2013] 214 Taxman 291 (Guj. - HC); 29 taxmann.com 380 (Guj – HC);

Dy. CIT v. Himalaya Machinery (P.) Ltd.

- In the instant case the Honourable Gujarat High Court held that exemption under Section 54EC is available even on short-term capital gains calculated as per Section 50 on sale of depreciable assets held for more than 36 months.

Further it held that the fact that deeming fiction created under Section 50 with respect to depreciable assets would be confined for the purpose of mode of computation of capital gains contained in Sections 48 and 49 and would not cover the exemption under Section 54EC.

Sudhir Nagpal v. ITO -

In the instant case the Honourable Punjab and Haryana High Court held that unless the individual co-owners join their resources and thereafter acquire property in name of association of persons and commonly manage the said property, they cannot be assessed in the status of ‘association of persons’.

b) 214 Taxman – Part 1 to 4

[2013] 32 taxmann.com 102 (Mum. – Trib.); [2013] 141 ITD (BN – XXXI) Part 7;

Johnson & Johnson v. Asst. DIT (International Taxation)

- In the instant case the Honourable Mumbai Tribunal held that ‘royalty’ income is not taxable on accrual basis under Indo-USA DTAA, as the treaty explicitly uses the word ‘paid’.

 [2013] 351 ITR 138 (P&H – HC);

CIT (TDS) v. Parle Biscuits Pvt. Ltd.-

In the instant case the Honourable Punjab & Haryana High Court held that certificate under Section 197 of the Act has to be issued to the principal officer of the Company as the person responsible for deduction of tax and not to any other person or unit of the assessee.

It further held that merely because Assessee had got separate tax deduction account numbers for two separate units that would not render the certificate issued under Section 197(2) redundant.

It is time the department stops harping on technicalities. This will help saving its scarce resources and avoid loss of face.

 [2013] 214 Taxman 26 (SC) (Mag.);

CIT v. I.K. International (P.) Ltd.

- In the instant case the Honourable Supreme Court upheld the decision of the Honourable Delhi High Court in the case of CIT v. I.K. International\ (P.) Ltd., [2012] 206 Taxman 622 (Delhi), wherein the Delhi High Court had held that since land is not a depreciable asset and it cannot form part of block of assets in absence of rate of depreciation having been prescribed therefor, provisions of section 50 cannot be invoked and where land having been held for a period of more than 36 months, surplus of sale price over indexed cost of acquisition of land was to be taxed as long-term capital gain.

[2013] 214 Taxman 35 (Guj. - HC) (Mag.); 31 taxmann.com 378 (Guj – HC);

CCIT v. Gujarat Mitra (P.) Ltd.

- In the instant case the Honourable Gujarat High Court held that amendment to Section 234 with effect from 01.04.2007 is retrospective in nature and therefore, directed the revenue authorities to allow credit of MAT before calculating interest under Section 234B of the Act

[2013] 214 Taxman 13 (P&H – HC)(Mag.); [2013] 31 taxmann.com 279 (P&H); 

[2013] 32 taxmann.com 98 (Jodhpur – Trib.); [2013] 141 ITD (BN – XXX)

Part 7;

Sarraf Export v. ITO

- In the instant case the Honourable Jodhpur Tribunal held that in view of insertion of clause (iiid) to Section 28 with effect from 01.04.1998, profit on sale of DEPB license is eligible for deduction under Section 80-IB as profits from industrial undertaking

Disclaimer

In this note, we have attempted to summarise some of the significant aspects to be kept in mind by readers to ensure compliance of Income tax laws and regulations. Readers should ensure to verify specific provisions as applicable to each case before taking any business decisions. It would be pertinent to note that some changes are being made to the Income tax laws and rules and regulations on a continuous basis by way of notifications, clarifications etc issued by the department based on their practical experience in implementing the legislation.

It may be noted that nothing contained in this note should be regarded as our opinion.  Professional advice should be sought for applicability of legal provisions based on specific facts. Though reasonable efforts have been taken to avoid errors or omissions in this note we are not responsible for any liability arising to readers directly or indirectly due to any mis-statements or error contained in this note. It must be noted that the views expressed in the note are based on our understanding of the law and regulations as published by the Government authorities and we may or may not agree or subscribe to such views/ interpretations.