Payments For Certification Services Rendered By Foreign Entities Not Taxable In India In Absence Of Fixed Place Of Business In India: Ahmedabad ITAT

The Ahmedabad ITAT held that the services rendered for product certification, which include evaluating technical quality and issuing certificates, do not fall under the definition of Fees for Technical Services as per Section 9(1)(vii) of the Act. Section 9(1)(vii) of Income Tax Act states that any income that is deemed to accrue or arise in India, even if the income is earned by a non-resident, is subject to tax in India. Referring to Supreme Court decision in CIT Vs. Kotak...

Cement Manufacturer Entitled To Cenvat Credit On Welding Electrodes: CESTAT

The Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that cement manufacturers are entitled to cenvat credit on welding electrodes as inputs used in the manufacture of final products, namely cement and clinker.The bench of Binu Tamta (Judicial Member) has observed that as per sub-rule 4 of Rule 57-A of the Central Excise Rules, 1944, the credit of specified duty is allowed in respect of two categories of inputs, namely (i) inputs used in the manufacture of...

Co-Owners Holding Immovable Property To Be Treated As Independent Service Provider For Service Tax Exemption: CESTAT

The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that co-owners holding immovable property should be treated as independent service providers for the purpose of availing service tax exemption.The bench of Ramesh Nair (Judicial Member) and C.L. Mahar (Technical Member) has observed the decision in the case of Sarojben Khushalchand versus Commissioner of Service Tax, in which it was held that the rent received by individuals owning property jointly...

JAO Not Empowered To Issue Section 148A(b) Notice Under Faceless Assessment: Bombay High Court

The Bombay High Court has held that it was not permissible for the Jurisdictional Assessing Officer (JAO) to issue a notice under Section 148A(b), as the same would amount to a breach of the provisions of Section 151A of the Income Tax Act.The bench of Justice G. S. Kulkarni and Justice Somasekhar Sundaresan has observed that the notice was invalid and bad in law being issued by the JAO as the same was not in accordance with Section 151A of the Income Tax Act.The petitioner/assessee has...

AO Must Pass Draft Assessment If He Proposes Variation In Returned Income: Chennai ITAT Explains Scope Of Sec 144C

The Chennai ITAT held that the AO must pass a draft assessment order to the eligible assessee in case he proposes to make any variation in the income or loss returned which is prejudicial to the interest of such assessee. Section 144C of the Income Tax Act provides that in case of certain eligible assessees, viz., foreign companies and any person in whose case transfer pricing adjustments have been made under sub-section (3) of section 92CA, the AO is required to forward a draft...

Section 148A(d) Order Passed Without Section 151 Sanction Is Illegal: Bombay High Court

The Bombay High Court has held that if an order is passed under Section 148A(d) of the Income Tax Act in the absence of an appropriate sanction in terms of the provisions of Section 151 of the Income Tax Act, the order and the consequent notice under Section 148 would be required to be declared illegal.The bench of Justice G. S. Kulkarni and Justice Somasekhar Sundaresan has observed that a sanction for passing an order under Section 148A(d) was required to be obtained under clause (ii) of...

Investment Allowance Available On Exchange Rate Fluctuation: Bombay High Court

The Bombay High Court has held that investment allowance is available on exchange rate fluctuations.The bench of Justice G. S. Kulkarni and Justice Somasekhar Sundaresan has relied on the decision of the Supreme Court in the case of Commissioner of Income-Tax vs. Ambika Mills Ltd., in which it was held that investment allowance, consequent to exchange rate fluctuation, would be allowable.The appellant/assessee is in the business of shipping and has acquired a vessel by the name of M/s. M.V....

Obsolete Inventory Prepared In Accordance With Accounting Standards And Audited By Independent Auditor, Can Be Written Off: Delhi ITAT

Referring to the decision in case of Gillette India Ltd. Vs. ACIT (66 Taxman.com 221), the New Delhi ITAT held that once assessee had given details about inventory written off along with ledger codes, then assessee would be eligible for deduction on written-off obsolete inventory. The Bench of Yogesh Kumar U.S (Judicial Member) and Pradip Kumar Kedia (Accountant Member) reiterated that “when the taxpayer has prepared obsolete inventory in accordance with the system of accounting...

No Arm's Length Addition Is Warranted On Account Of Corporate Guarantee If Guarantee Fee Is Lower Than Bank's Quoted Interest Rate: Ahmedabad ITAT

Finding that the TPO did not present compelling evidence to establish that the guarantee fee was unwarranted, the Ahmedabad ITAT held that benefits derived, as seen in lower interest rates and favorable operating margins, substantiate the transaction's arm's length nature. The ITAT added that the effective borrowing cost, including the guarantee fee, was lower than the bank's quoted interest rate, thus justifying the economic rationale for the guarantee fee. The Bench of Suchitra...

Cash Sales Can't Take Place Before Commencement Of Business: Delhi ITAT Deletes Addition U/s 69A On Receipts From Such Sale

The New Delhi ITAT held that a business man deposits consideration from sale of his products on respective dates of sales as per his needs and prudence, and therefore, the AO cannot tax the receipts and income embedded therein together. Hence, the ITAT deleted the addition made u/s 69A on account of cash sales during demonetization. As per Sec 69A of Income tax Act, where in any financial year the assessee is found to be the owner of any money, bullion, or other valuable article...

Indexation Benefit Shall Be Given To Taxpayer Based On Cost Of Acquisition Of Property Sold By Him: Delhi ITAT

The New Delhi ITAT held that the assessee is entitled to avail the benefit of carry forward of long-term capital loss on sale of residential property against long term capital gain computed on sale of commercial property. The Bench of Saktijit Dey (Vice-President) and M. Balaganesh (Accountant Member) observed that “as on the date of the conveyance deed, the value of the property is more than Rs.45 lakhs. Moreover, there is direct evidence on record, which indicates that the assessee, in...

AO Can't Make Additions Solely Based On Retracted Statement Of Third-Parties If Assessee Has Claimed Opposite: Chennai ITAT

Referring to the decision of Madars High Court in case of P.V. Kalyanasundaram (155 Taxman 454), the Chennai ITAT held that once the assessee had denied payments made by it, then he cannot be expected to prove the negative. Going further, the Bench held that the AO cannot make additions solely based on retracted statement of third-parties, if assessee had claimed otherwise. The Bench of Aby T. Varkey (Judicial Member) and Manoj Kumar Aggarwal (Accountant Member) observed that “no...