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10
March, 2012
DIRECT TAXES– RECENT DECISION March, 2012 by Haresh P. Kenia
INCOME TAX DECISION
Section 194 H – TDS - SRL Ranbaxy Ltd. vs. ACIT (2012) 65 DTR
185 (Del.)
Assessee engaged in conducting various medical diagnostic
tests having entered into non-exclusive agreements with collection
centres who collect samples from patients / customers for laboratory
testing services and forward the same to the assessee and collect
fees on its own bills / invoices to the patients / customers at the rates
decided by themselves and make payment to the assessee, net of
discount, after deducting TDS u/s. 194J, there is no principal – agent
relationship between the assessee and the collection centres so as to
attract provisions of section 194 H and, therefore, discount offered by
the assessee to the collection centres could not be disallowed by
invoking provisions of section 40(a)(ia).
Section 2(24) – Capital vs. Revenue Receipt – Kushal K. Bangia
vs. ITO – ITA No. 2349/Mum/2011
Redevelopment of housing society – Compensation received from
builder – is a capital receipt – however would reduce cost of
acquisition as and when the flat in redeveloped society is sold.
Section 72 – Setoff of Loss – M/s. Nandi Steels Ltd. vs. ACIT – ITA
No. 546/(Bang.)/2008
The assessee sold land and building used for business
purposes. Though the gain was offered as capital gains, the
assessee claimed, relying on Cocanada Radhaswami Bank Ltd.
57 ITR 306 (SC) and other judgments, that as the assets were
"business assets", the gains therefrom were eligible for set-off
against the brought forward business loss u/s 72. The issue was
referred to a Special Bench. The Special Bench held against the
assessee.
BL D DONATION
OO
CAMP
Section 54 – Capital Gain deduction – CIT vs. Jagriti Aggarwal 64
DTR 333 (P&H)
The time limit for making deposit or making of a house referred to in
section 54 would mean time limit of filling of return u/s 139(4). The
deduction was allowed where house was purchased in extended
time period.
Section 11(1)(a) – Charitable Trust – CIT vs. Shri Gujrati Samaj 64
DTR 76 (MP.)
The assessee is a Charitable Trust formed with the main object to run
Educational Institution for the benefit of the public. The assessee had
incurred excessive expenditure towards charitable purposes over
income and the assessee had carried forward this deficit to be
adjusted against subsequent years income which was allowed by the
appellate authority and where held to be applied for charitable or
religious purposes.
Section 195 – Payment of Commission to Non-Resident – TDS –
CIT vs. EON Technology Pvt. Ltd. 64 DTR 257 (Del)
It was held that when a non-resident agent operates outside the
country no part of his income arises in India, and since payment is
remitted directly abroad and merely because an entry in books of
account is made, it does not mean that non-resident had received
any payment in India.
Section 54 F – Cost of Acquisition of Residential House – Smt. S.
Sudha vs. ACIT 48 SOT 335 (Mad.)
The expenses related to laying of tiles, white – washing, electrical
rewiring and wood work were incurred after purchasing the property
and the expenses was to improve the inhabitability in the property.
This expense does not form part of the cost of acquisition. Advocate
fees and brokerage are part of cost of acquisition and property.
The Institute of Chartered Accountants of India Vasai Branch of WIRC Newsletter
Photographs taken at
Blood Donation Camp
on 25th March, 2012.