Thursday, 23 January 2014

Gist of important latest tax caselaws

Education : Where assessee-trust was conducting a study centre for Karnataka Open University, it could not be considered to be an educational institution within meaning of section 2(15) - New Elim Charitable & Educational Trust v. Commissioner of Income-tax (2013) 40 373 (Cochin - Trib.)
Loans or advances to shareholder : Deemed dividend provisions cannot be invoked merely because shareholders are common in both companies - Commissioner of Income-tax v. AR Magnetics (P.) Ltd. (2013) 40 392 (Delhi) 
Permanent Establishment/Business profits/Royalty or fees for technical services : Where marketing and management services were rendered outside India, mere existence of service PE in India would not make it taxable - ADIT (IT) v. WNS Global Services (UK) Ltd. (2013) 40 315 (Mumbai - Trib.) 
User of asset/Additional depreciation : Where equipment purchased for starting FM radio broadcasting services could not put to use till end of relevant financial year as licence could not be obtained from Ministry, depreciation thereon could not be allowed - Malayala Manorama Co. Ltd. v. Assistant Commissioner of Income-tax (2013) 40 380 (Cochin - Trib.) 
Film production : Where assessee could not generate any income during year from films in respect of which it acquired television rights, deduction for cost of their acquisition could not be allowed - Malayala Manorama Co. Ltd. v. Assistant Commissioner of Income-tax (2013) 40 380 (Cochin - Trib.)
ESI and PF contribution : Statutory payments in respect of ESI contribution and Provident Fund of employees which were paid by assessee company after expiry of financial year but before filing of return, are allowable under section 43B - Nuchem Ltd. v. Income Tax Appellate Tribunal (2013) 40 371 (Punjab & Haryana)
Statement recorded during survey : Where Assessing Officer made addition on account of unexplained investment on basis of document impounded during survey and statement recorded by partner of assessee-firm, in view of fact that said documents did not suggest that noting were of loans and advances and, moreover, statement recorded during survey could not be relied upon, impugned addition was to be set aside - Commissioner of Income-tax v. Golden Finance (2013) 40 329 (Gujarat)
SECTION 271(1)(c)
Surrender of income, effect of : Where after completion of assessment, consequent upon inquiry assessee surrendered amount of certain loan as bogus loan and interest on said loan, concealment of income was established making a case for levy of penalty under section 271(1)(c) - Bharatkumar G. Rajani v. Deputy Commissioner of Income-tax (2013) 40 344 (Gujarat)

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