CIT v Sauer Danfoss (P.) Ltd. [IT Appeal No. 1367 of 2010 dated 26.03.2012] (Delhi High Court) Facts of the case The assessee company was incorporated on 5.2.2001 under the Companies Act, 1956. Following is the sequence of events considered: Application for FIPB approval – 24.01.2001 First director appointed – 05.02.2001 Additional directors appointed – 10.02.2001 Physical possession of the leased premises – 15.02.2001 Opening of Bank account – 01.03.2001 Agreement for entering into lease of premises – 01.04.2001 Agreement for take over of running business of DHL – 21.05.2001 (to be effective from 01.06.2001)
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CIT v High Energy Batteries (India) Ltd. T.C. [(APPEAL) NOS. 579 TO 581 OF 2005] (Mad HC) Facts of the case The assessee had purchased the machinery on 10.03.1995 from its sister concern M/s. Ponni Sugars and Chemicals Limited, a sister concern of the assessee herein at a cost of Rs.250 lakhs. The minutes of the Board meeting of M/s. Ponni Sugars and Chemicals states that the sale of boilers is to meet the cash loss and other financial commitments. The total consideration of the purchase of the material was Rs.250 lakhs, for which the assessee had paid a sum of Rs.50 lakhs and the balance of Rs. 200 lakhs was financed through a hire purchase agreement by M/s. Wipro Finance Limited.
Sale & Leaseback is a Tax Planning arrangement – Madras HC – Vodafone ruling followed
DCIT Vs M/s Coromandal Bio Tech Industries (I) Ltd [ITA No.287/Hyd/2007] Hyderabad ITAT Facts of the case The Assessee company for the AY 2001-02 and 2002-03, filed its return of income declaring loss after claiming depreciation on Ponds and Plant & Machinery business of which is discontinued long back. The Assessing Officer observed that the claim of depreciation was not proper and the assessment was reopened u/s 147. In the reassessment, the AO disallowed and added back the depreciation on ponds and plant & machinery. Similarly, for the AY 2003-04 and 2004-05, on the grounds the business of prawn and shrimp farming had been apparently discontinued, the AO held that the assets were not put to use and the assessee was not entitled to depreciation on ponds and plant & machinery.
Depreciation allowable even on assets of discontinued business – Hyderabad ITAT
Samsung India Software Operations Pvt Ltd Vs Addnl CIT [ITA No.399/Bang/2012] (Bang ITAT) Facts of the case The Assessee company, entirely held by M/s. Samsung Electronics Company Ltd (SECL), had claimed deduction under section 10A in its return of income filed for AY 2007-08. SECL being the sole owner of its branch office entered into a business transfer agreement with the assessee company on 5.9.05 for transfer of business of the branch office by way of slump sale as a going concern together with all its rights, properties and assets of the business. AO held that undertaking was not formed by the transfer to a new business of machinery or plant previously used for any purpose and that the provisions of Explanation 1 & 2 to sub-section (2) of section 80 I of the Act shall also apply for this purpose. The AO pointed out that the undertaking of the assessee was formed by transfer of same plant & machinery which were earlier used by branch office.
10A Exemption is qua an undertaking and not qua an assessee – Bangalore ITAT
Pentamedia Graphics Ltd.v DCIT [ITA Nos 1780 (MDS.) OF 2009, 1733, 1768 and 1887 (MDS) OF 2010] (Chennai ITAT) Facts of the case Assessee is engaged in the business of multimedia computer graphics and animation. Assessee’s software and training division was hived off to its sister concern M/s. Pentafour Communications Ltd. The consideration for the transaction was Rs. 894.21 crores. No amount was attributed towards goodwill. But amounts were attributed towards non compete fee, sale of brand name, sale of IPR, etc. In its computation of income, the assessee has not offered any capital gains towards transfer of goodwill. The accounts of the sister concern M/s. Pentafour Technologies Ltd. reflected Rs. 626,08,80,282 under the head ‘fixed assets’ towards goodwill on acquisition of the software division.
Non-compete fees to a sister concern is a colorable device for ‘Goodwill’ to evade tax ...
DCIT v TVS Electronics Ltd IT Appeal NO. 811 (MDS.) of 2010 (Chennai ITAT) Facts of the case The assessee made payment to M/s Rosewell Group Services Ltd. based in Mauritius for market survey, qualitative consumer measurement, retail store site information, etc. without deducting tax at source under section 195 of the Act The AO concluded that the payment made was nothing but fees for technical services relying on Explanation 2 to Section 9(1)(vii) of the Act.
In the absence of FTS clause in India-Mauritius DTAA, FTS under the Act to be ...
Notification No. 21/2012 [F.No.142/10/2012-SO (TPL)] S.O. 1323(e), dated 13-6-2012 In exercise of the powers conferred by sub-section (1F) of section 197A of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that no deduction of tax shall be made on the following specified payment under section 194J of the Act, namely:-
Notification: No TDS u/s 194J on “off-the-shelf” software
Nokia India (P.) Ltd. v Addln CIT [2012] 22 taxmann.com 109 (Delhi – Trib.) Facts of the case Assessee incurred certain advertisement, marketing and promotion expenditure. The AO in order to determine the arm’s length price of international transaction with associated enterprise referred the matter to TPO u/s 93CA(3) of the act. The TPO passed an order u/s 92CA(3) of the Act, wherein he determined the arm’s length price on Advertisement, Marketing and Promotion (AMP) expenses amounting to Rs. 253,48,30,000.
TP adjustments by a TPO for such international transactions which are not reported by AO ...
The Finance Bill, 2012 was introduced in Parliament on 16 March 2012. Certain official amendments have been carried out during the passage of the Bill in Parliament. A supplementary memorandum elucidating the official amendments to the Finance Bill, 2012 as reflected in the Finance Act, 2012 enacted on 28 May 2012, is attached. Click here to download