Entity Operating, Developing, And Maintaining Infrastructure Facility Is Eligible For Benefit U/S 80IA Of IT Act: Pune ITAT

Referring to the decision of CIT vs. ABG Heavy Industries Ltd. (2010) 322 ITR 323, the Pune ITAT reiterated that an enterprise can claim deduction u/s 80IA if it develops, operates and maintains the infrastructure facility, subject to commencement of operation & maintenance of the infrastructure facility after April 01, 1995. The Bench of R.K. Panda (Vice President) and Astha Chandra (Judicial Member) observed that “requirement that the operation and maintenance of the...

Income Derived By Foreign Entity For Rendering Technical Assessment Services Doesn't Constitute FTS: Delhi ITAT

The Delhi ITAT held that income derived by foreign entity for rendering technical assessment services will not constitute as Fees for Technical Services (FTS) under Article 12(4)(b) of India-Singapore DTAA. The ITAT held so after finding that income was derived by Respondent/ Assessee (a Singapore based company) on account of services rendered towards technical integrity assessment/ scanning of off-shore pipelines under sea, through Magnetic Tomography Method (MTM) technology to...

Bharti Airtel Not Liable To Pay TDS Towards Remittance Of Bandwidth Charges And Agency Fees: Delhi ITAT

The Delhi ITAT held that the bandwidth charges remitted by the Appellant/ assessee (Bharti Airtel) to the non-resident service providers cannot be treated as royalty either under the applicable treaty provisions or u/s 9(1)(vi). Since bandwidth charges are not royalty, the ITAT held that assessee was not required to deduct tax at source on such receipts. Where the payment for use or right to use computer software, falls within the definition of royalty u/s 9(1)(vi) of Income tax...

Capital Reserve Created On Amalgamation Is Not Taxable As Perquisite U/S 28(iv) Of IT Act: Mumbai ITAT

The Mumbai ITAT held that capital reserve arising on account of amalgamation is a capital receipt and hence cannot be taxed as a benefit or perquisite arising from business u/s 28(iv). Section 28(iv) of Income tax Act provides that any value of benefit or perquisite, whether convertible in money or not, arising from business or exercise of a profession would be considered as income and shall be chargeable to income tax as business income Pointing that the assessee was the ultimate...

Explained| Why Supreme Court Allowed Benefit Of TOLA In Extending Timelimits For Issuing Income Tax Reassessment Notices

The Supreme Court in its recent decision allowed the revenue authorities to issue notices for reassessment under the Income Tax Act for the period between 01.04.2021 and 30.06.2021 by granting the benefit of time extensions under Taxation and Other Laws (Relaxation and Amendment of Certain Provisions Act) (TOLA) 2021. Here is a detailed breakdown of the key issue involved and the analysis of the Court in allowing a batch of 727 appeals filed by the Income Tax Department against the various...

Taxpayer Can't Claim Credit Against Tax Payable In India If He Has Not Paid Any Tax In Country Where He Sourced Income: Mumbai ITAT

While observing that the assessee is a resident of India in terms of Article 4(2)(a) of the Indo-US DTAA, the Mumbai ITAT held that all his income derived in the USA, is chargeable to tax in India by virtue of the provisions of section 5 of the Income tax Act.Since the income tax return filed by the assessee in the USA, does not show that he is paid any tax in the USA, therefore, the ITAT clarified that in the absence of any payment of tax in the country of source, no credit is available against...

Capital Gains Arising Out Of Sale Of Long-Term Capital Assets Shall Be Taxable At Rate Of 20% U/S 112 Of IT Act: Mumbai ITAT Special Bench

While observing that the deeming fiction of section 50 cannot be imported u/s 112, the Mumbai ITAT in a split verdict ruled that capital gains u/s 50 of Income tax Act, arising out of sale of long-term capital assets, shall be taxable at rate of 20% u/s 112 of the Act. Section 50 of Income tax Act is a special provision for computation of capital gains in case of depreciable assets, whereas Section 112 deals with income arising from transfer of long-term capital asset. Relying upon...

Absence Of Controlling Interest Renders Sale Of Shares By Spanish Entity Not Taxable In India As Per Indo-Spain DTAA: Mumbai ITAT

The Mumbai ITAT held that capital gain arising out of transfer of shares of an Indian entity cannot be taxed at hands of foreign entity in India, if foreign entity has less than 10% shareholding in such Indian entity. The ITAT held so while referring to UN Model Convention commentary, which states that the provisions of Article 14(4) come into effect to prevent the case of indirect transfer of ownership of immovable property by transfer of shares owning these properties. The ...

Additions Made Under Income Tax Act Have No Bearing Under Black Money Act: Mumbai ITAT

The Mumbai ITAT held that any addition made as undisclosed foreign income and asset under the Black Money Act (BMA), shall not be repeated under the Income Tax Act. However, since there is no corresponding provision under the Income tax Act, the ITAT clarified that additions made under the Income tax Act have no bearing under the BMA. Single Third Member Bench comprising Narendra Kumar Billaiya (Accountant Member) observed that the entire BMA revolves around taxing only...

Assessment Was Based Solely On Existence Of Cash Deposits Linked To Incorrect PAN: Ahmedabad ITAT Deletes Addition U/S 69A Of IT Act

The Ahmedabad ITAT held that since the assessee/ appellant was consistently filing her returns under the original PAN and had also paid penalties for holding two PANs without contesting, the appellants effort reflects compliance of the provisions of Income tax Act rather than an intent to conceal any income. The Bench of T.R. Senthil Kumar (Judicial Member) and Makarand V. Mahadeokar (Accountant Member) observed that “the AO could not verify the books of account, tax audit report, or...

Stock-In-Trade Sold During Relevant Year Should Only Be Considered For Purpose Of Computing Capital Gains: Hyderabad ITAT

The Hyderabad ITAT held that the capital gain arising on account of conversion of capital asset into stock-in-trade should be proportionately computed by considering the stock-in-trade sold by the assessee and not the entire extent of land converted by the assessee. The Tribunal held so, after finding that the assessee has sold part of the stock-in-trade for the current financial year and remaining stock-in-trade is still held as closing stock. Referring to Section 45(2) of Income...

TOLA Extends Income Tax Reasssment Timelimit; Notices Can Be Issued After 2021 Under Old Regime : Supreme Court

The Supreme Court on Thursday (October 3) set aside the judgments of the High Courts which held that the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions Act) (TOLA) 2021 will not extend the time limit for issuing notices for re-assessment under the Income Tax Act.A bench comprising Chief Justice of India DY Chandrachud, Justice JB Pardiwala and Manoj Misra delivered the judgment allowing a batch of 727 appeals filed by the Income Tax Department against the various orders...