Daily Tax & Corporate Law Digest
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Today’s newsletter analytically summarizes today’s top Tax & Corporate Law stories reported at taxmann.com, in a unique section-wise format.
INCOME TAX
SECTION 9 OF THE INCOME-TAX ACT, 1961 - INCOME - DEEMED TO ACCRUE OR ARISE IN INDIA
Royalties or Fee for technical services - Computer software: Where assessee, company incorporated in Netherlands, earned revenue from providing HR shell people support service to its Indian entities, since payment made by Indian entities for use of computer software was not for use of copyright in computer software, same would not amount to royalty income taxable in India - Shell International B.V v. Deputy Commissioner of Income-tax (IT) - [2024] 160 taxmann.com 761 (Ahmedabad - Trib.)
Royalties or Fee for technical services - Make available: Where assessee, company incorporated in Netherlands, received CHR recruitment fees, external information services (license for online databases) and IT migration support services fee from its associated enterprises, since neither had technology be made available to recipient of services nor there was any such intention to render services in a manner that recipient of services was enabled to perform services itself without recourse to assessee, impugned fee was not FTS under India- Netherlands DTAA - Shell International B.V v. Deputy Commissioner of Income-tax (IT) - [2024] 160 taxmann.com 761 (Ahmedabad - Trib.)
Royalties or Fee for technical services - Computer software: Where assessee subscribed to various external information services(EIS) providers on behalf of its group and group companies access databases for purpose of using it internally, since access to software had been granted to entities and there was no transfer of copyright, payment received by assessee from its group comapnies for providing EIS would not fall within definition of royalty under India-Netherlands Tax Treaty - Shell International B.V v. Deputy Commissioner of Income-tax (IT) - [2024] 160 taxmann.com 761 (Ahmedabad - Trib.)
Royalties or Fee for technical services - Make available: Where assessee provided real estate and corporate travel services, HRIT-system administration services and international tax administration services to its Indian group company and had received payments, since revenue had not brought anything on record to demonstrate that technology was made available to recipient of services, aforesaid services could not be treated as FTS under India-Netherlands tax treaty - Shell International B.V v. Deputy Commissioner of Income-tax (IT) - [2024] 160 taxmann.com 761 (Ahmedabad - Trib.)
Royalties or Fee for technical services - Make available: Where assessee rendered IT services and Health Ecotox services to its group company, since revenue had not brought anything on record to demonstrate that technology was made available to recipient of services, aforesaid services could not be treated as FTS under India-Netherlands tax treaty - Shell International B.V v. Deputy Commissioner of Income-tax (IT) - [2024] 160 taxmann.com 761 (Ahmedabad - Trib.)
SECTION 12AB OF THE INCOME-TAX ACT, 1961 - CHARITABLE OR RELIGIOUS TRUST - REGISTRATION PROCEDURE
Denial of registration: Where assessee-trust failed to file income-tax returns and audit report for previous three preceding financial years, however, it undertook to file same as well as other details before Commissioner (Exemption), appeal was to be disposed of by restoring this issue to file of Commissioner (Exemption) with a direction upon him to provide further opportunity of being heard to assessee and consider documents, evidences which assessee would file as per notice issued by Commissioner(Exemption) - Shree Shakuntal Education Trust v. Commissioner of Income-tax (Exemption) - [2024] 160 taxmann.com 762 (Ahmedabad - Trib.)
SECTION 55 OF THE INCOME-TAX ACT, 1961 - CAPITAL GAINS - COST OF ACQUISITION
Encumbrance: Review petition dismissed against order of Supreme Court that where Assessing Officer allowed payment made by assessee-company to its shareholders as encumbrance charges from sale proceeds of building as cost of improvement while computing long-term capital gains, Commissioner rightly treated said assessment order as erroneous and prejudicial to interest of revenue - Paville Projects (P.) Ltd. v. Commissioner of Income-tax-7 - [2024] 160 taxmann.com 759 (SC)
Fair Market Value: Where assessee sold his shares in a private company and on date of sale of shares, lease period of beyond 20 years was still left with company, value of leasehold land could not be excluded for calculating fair market value of shares of company - Principal Commissioner of Income-tax v. Dr. Karan Singh - [2024] 160 taxmann.com 757 (Jammu & Kashmir)
SECTION 69A OF THE INCOME-TAX ACT, 1961 - UNEXPLAINED MONEYS
Sale consideration: Where assessee was engaged in real estate business and he filed an agreement of sale and confirmation letter of purchaser before Assessing Officer for justifying cash deposit in his accounts as sale consideration, A O was not justified in making addition of said deposit under section 69A - Konathala Nooku Naidu v. Income-tax Officer, Ward-1 - [2024] 160 taxmann.com 758 (Visakhapatnam - Trib.)
Illustrations: Where assessee had availed a loan and had repaid said amount in one and half month but he had not properly explained as to why and for what purpose loan was availed by him, AO rightly treated said cash deposit as unexplained cash in hands of assessee and made addition by invoking provisions of section 69A - Konathala Nooku Naidu v. Income-tax Officer, Ward-1 - [2024] 160 taxmann.com 758 (Visakhapatnam - Trib.)
Illustrations: Where Assessing Officer treated cash deposit made by assessee as unexplained cash in hands of assessee and made addition by invoking provisions of section 69A, since assessee had deposited old currency notes which were kept for petty expenses and obtained new currency notes from bank, cash deposit was to be treated as explained - Konathala Nooku Naidu v. Income-tax Officer, Ward-1 - [2024] 160 taxmann.com 758 (Visakhapatnam - Trib.)
SECTION 90 OF THE INCOME-TAX ACT, 1961 - DOUBLE TAXATION RELIEF - DOUBLE TAXATION RELIEF - WHERE AGREEMENT EXISTS
Taxes covered - Surcharge: Levy of surcharge and cess over and above taxable rate of 10 per cent on royalty and FTS is not permissible as per treaty provisions - Shell International B.V v. Deputy Commissioner of Income-tax (IT) - [2024] 160 taxmann.com 761 (Ahmedabad - Trib.)
SECTION 92C OF THE INCOME-TAX ACT, 1961 - TRANSFER PRICING - COMPUTATION OF ARM’S LENGTH PRICE
Comparability factors - Exclusion/inclusion of comparable selected by assessee/revenue: Where assessee-company was engaged in rendering research and technical services and had started its business in relevant financial year, it could not be compared with companies which were doing business for many years - Principal Commissioner of Income-tax-11 v. Radhashir Jewellery Co. (P.) Ltd. - [2024] 160 taxmann.com 760 (Bombay)
Comparability factors- Segmental results: Where assessee had provided segmental account and had also allocated expenses and had given basis of allocation, merely because segmental accounts were not audited, segmental accounts could not be rejected without pointing out any specific defect/error/fallacy in them - Spectris Technologies (P.) Ltd. v. Deputy Commissioner of Income-tax, Circle-9(1) - [2024] 160 taxmann.com 763 (Delhi -Trib.)
Adjustments - Royalty: Where assessee had adopted TNMM as most appropriate method for computation of ALP of transaction of payment of royalty and fee for technical service , since TPO had not discarded method adopted by assessee, TPO could not proceed to make adjustment in international transactions - Principal Commissioner of Income-tax-2 v. Coim India (P.) Ltd. - [2024] 160 taxmann.com 756 (Delhi)
领英推荐
SECTION 234B OF THE INCOME-TAX ACT, 1961 - INTEREST - CHARGEABLE AS
Tax deductible at source: Where during relevant assessment year assessee was a non-resident, entire tax was to be deducted at source on payment made by payer to it under section 195 and there was no question of advance tax payment by assessee and thus, no interest under section 234B could be levied upon assessee - Shell International B.V v. Deputy Commissioner of Income-tax (IT) - [2024] 160 taxmann.com 761 (Ahmedabad - Trib.)
GOODS AND SERVICES TAX LAWS
SECTION 6 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - GST AUTHORITIES AND ADMINISTRATION - STATE/UNION TERRITORY TAX OFFICERS, AUTHORIZATION OF
Assessees who are assigned to either Central Tax authorities or State Tax authorities under respective Central Goods and Services Tax Act, 2017 and/or State Goods and Services Tax Act, 2017 cannot be subjected to investigation and further proceeding by counterparts under respective GST enactments - Tvl. Vardhan Infrastructure v. Special Secretary, Head of the GST Council Secretariat, New Delhi - [2024] 160 taxmann.com 771 (Madras)
SECTION 11 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - LEVY AND COLLECTION OF TAX - EXEMPTION - POWER TO GRANT
Benefit of notification could not be availed by assessee as it had not registered with Directorate General of Training, Ministry of Skill Development and Entrepreneurship - Additional Skill Acquistion Programe Kerala, In re - [2024] 160 taxmann.com 767 (AAR - KERALA)
SECTION 30 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - REGISTRATION - REVOCATION OF CANCELLATION OF
Where assessee had delayed filing a revocation application for registration, delay was to be condoned subject to assessee having deposited all taxes, interest, late fee, penalty, etc., due and having complied with other formalities - Binaya Mandal v. Chief Commissioner of CT & GST - [2024] 160 taxmann.com 769 (Orissa)
SECTION 54 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - REFUND - TAX, REFUND OF
Assessee had not moved any application within prescribed time and not even extended time for claiming refund, instant Court, in exercise of its limited jurisdiction could not amend statute, prescribes different time limit for moving such an application and, therefore, instant writ petition was to be dismissed - M Trans Corporation v. State Tax Officer - [2024] 160 taxmann.com 766 (Kerala)
SECTION 129 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - DETENTION, SEIZURE AND RELEASE OF GOODS AND CONVEYANCES IN TRANSIT
Where there exists clerical or typographical error in documents such as e-way bill, initial burden of proof lies on Revenue department to demonstrate intention to evade tax; penalties should be imposed only in cases of intentional tax evasion, not on inadvertent errors - Indeutsch Industries (P.) Ltd. v. State of U.P - [2024] 160 taxmann.com 733 (Allahabad)
COMPANY AND SEBI LAWS
SECTION 271 OF THE COMPANIES ACT, 2013 - WINDING UP BY TRIBUNAL
Where appellant, shareholder in company had filed winding up petition alleging that respondent-directors have sold valuable land and building of company at a throw away price and that too without calling for meeting of shareholders, in view of fact that no material had been placed by respondents to extent that requisite provisions have been complied while selling movable and immovable properties of company and in support of sending notices to shareholders of holding meeting, Single Judge had committed error in rejecting petition, and same was to be restored on file of Single Judge to decide petition afresh - Sanjay Suchanti v. Anurag Cinema (P.) Ltd. - [2024] 160 taxmann.com 754 (Patna)
INSOLVENCY AND BANKRUPTCY CODE
SECTION 208 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - INSOLVENCY PROFESSIONALS - FUNCTIONS AND OBLIGATIONS OF
Where petitioner filed instant review application on ground that their previous petition challenging constitutional validity of regulation 23A of IBBI Regulations, 2016 was wrongly rejected by High Court without considering principles of natural justice in a proper perspective however, said review application filed by petitioner was nothing but an appeal in disguise and, thus, same could not be entertained - V.Venkata Sivakumar v. Insolvency and Bankruptcy Board of India (IBBI) - [2024] 160 taxmann.com 755 (Madras)
ACCOUNTS AND AUDIT
Accounting treatment of reversal of provision after the reporting period- Ind AS 10
Editorial Note: Events that occur between the end of the reporting period and the date when the financial statements are approved by the approving authority and that provide evidence of conditions that existed at the end of the reporting period shall be adjusted after the reporting period. This story discusses whether the reversal of provision after the reporting date shall be considered an adjusting event or not.
That’s it from us for today! Stay Tuned for more updates from Taxmann.com
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