Case Laws Of India

New Delhi, India (PressExposure) April 22, 2009 -- AAR on allowability of deduction under sections 36(1)(viii) and 36(1)(viiia) of IT Act claimed by a Government company - Merely because the objective of the provision will be better served, it is not permissible to read words into a provision which is otherwise clear - Rural Electrification Corpn. Ltd., In re [AAR NO. 759 OF 2007] FROM ITAT

Commercial use of built up area, by itself, does not vitiate claim of deduction under section 80-IB (10) of IT Act - The tax incentive by way of deduction under section 80-IB(10) is predominantly for the purpose of augmenting affordable dwelling units; notwithstanding Legislature's unambiguous objective of introducing tax benefits under section 80-IB (10) for augmenting availability of dwelling units for low and middle class, the availability of tax benefits are not confined to only such housing projects which are purely residential projects and in which no part of area is used for commercial purposes; hence, an element of commercial use is implicit and permissible in a housing project; the provision regarding limitation on commercial built up area in a housing project was introduced as a requirement for getting benefit of section 80-IB(10) but this limitation applied w.e.f.1-4-2005 only and not earlier years - Brahma Associates v. JCIT [ITA NO. 1417/PN/06]

'Non-compete right' acquired by an assessee is eligible for depreciation under clause (ii) of section 32(1) of IT Act - Capability to have a market value, assignability, transferability, diminution in value, are no more the touch stones on which the admissibility for depreciation under section 32 has to be tested; consequently, if the business/commercial right of a patent, copy right, trade mark, license and franchise fulfills the conditions of being intangible asset as mentioned in clause (ii) of section 32(1), then surely the business/commercial right by way of non-compete right acquired by the assessee also fulfills that condition, by way of a logical corollary - ITO v. Medicorp Technologies India Ltd. [ITA No. 2328/Mds/2007]

Prerequisite of section 12AA of IT Act for rejection of registration of a trust - The requirement of section 12AA is that the order granting or refusing the registration is to be passed by the CIT within the six months from the date of the application moved by the assessee; the statute provides sufficient time to conduct enquiries into the claim for registration and the said procedure for registration including the enquiry is to be completed within the time-limit provided under the Act - Rev. Father Trust Oscar Colasco Memorial Medical Association v. CIT [ITA No. 2957/Mum/2006]

Scope for adjustment of ALP on basis of comparables - It is permissible in principle to make adjustments in the costs and profits in fit cases; the assessee cannot be expected to get the details and particulars of the comparable concerns, which are not in public domain; when information available in public domain is not sufficient to make the comparisons possible, it is inevitable that some approximations and reasonable assumptions are to be made - Skoda Auto India Pvt. Ltd. v. ACIT [ITA No. 202/PN/07]

Determination of ALP in accordance with most appropriate method - When the burden of proving that a particular method is the most appropriate method is initially on the assessee, it is for the assessee to demonstrate the same by furnishing adequate records and data, irrespective of the fact whether they are statutorily required or not; once the method adopted by the assessee is rejected, the revenue is duly bound to compute the ALP by adopting a most appropriate method and it has also to substantiate and justify the use of such a method - UCB India Pvt. Ltd. v. ACIT [ITA NOS. 428 & 429/MUM/2007]

For purpose of section 10A(3) of IT Act, permission of RBI or any other designated authority is required for extension of time - Once the assessee has completed all the formalities and the request of the assessee for extension of time not having been rejected, it can be presumed after a reasonable time that the extension has been granted and the assessee is entitled to deduction under section 10A even in respect of the remittances not realized within the period of six months from the end of the previous year - Morgan Stanley Advantage Services Pvt. Ltd. v. ITO [ITA NO. 5651/MUM/2007] FROM SC/HC

Supreme Court on additional liability arising on account of foreign exchange fluctuation - Scope of section 37(1), 43(1), 43A of Income-tax Act, 1961 and AS-11 - CIT v. Woodward Governor India P. Ltd. [Civil Appeal No 2214 of 2009 SERVICE TAX FROM CESTAT

Provision of consulting engineering service - Sharing of knowledge shall not be called as consulting engineering service when expertise acquired by a concern is also used for its own benefit along with others - Nyco S. A. v. CST [STA No. 19 & 27 of 2007 -Cus.]

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Press Release Submitted On: April 21, 2009 at 7:15 am
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