ITR'S TRIBUNAL TAX REPORTS (ITR (Trib)) HIGHLIGHTS
F Where details of gross profit rate not proved to be defective deletion of addition proper : ITO v. Sai International (Delhi) p. 1
F Expenditure for replacing chamber assembly "current repair" and allowable : Midas Rubber P. Ltd. v. Asst. CIT (Cochin) p. 6
F Profits from purchase and sale of shares not mere enhancement of value of shares but profit in business, taxable as business income : Asst. CIT v. Manoj Kumar Samdaria (Delhi) p. 13
F Charitable institution : Object clause of trust deed not indicating that expenditure on religious objects limited to 5 per cent of total income for particular year, approval of special deduction to be denied u/s. 80G(5)(vi) : Radhika Seva Sansthan v. CIT (Jaipur) p. 31
F Income disclosed in regular return cannot be treated as undisclosed income in block assessment: Asst. CIT v. Smt. Sula Jayakumar (Cochin) p. 37
F Failure to furnish PAN number of one of the deductees penalty exigible u/s. 272B : Tej Pal Gupta v. ITO (TDS) (Chandigarh) p. 46
F Capital or revenue expenditure : 25 per cent. of royalty for use of trade mark considered capital expenditure and balance towards revenue expenditure : Fenner (India) Ltd. v. Addl. CIT (Chennai) p. 48
F Sales tax to be excluded from total turnover for computing deduction : Asst. CIT v. GE Plastics India Ltd. (Ahmedabad) p. 58
F Adjustments to export turnover of communication expenses to delivery of computer software also to be made in total turnover : Centillium India Ltd. v. Dy. CIT (Bangalore) p. 69
F Revaluation of assets on conversion of firm into company not to be taxed as capital gains : ITO v. Alta Inter-Chem Industries (Ahmedabad) p. 103
F Non-resident : Liaison office in India not a permanent establishment not assessable in India : Dy. DIT (International Taxation) v M.Fabricant and Sons (Mumbai) p. 118
F Where assessee running poultry farm in remote village, books of account not maintained is reasonable cause : C.T.Chacko v. ITO (Cochin) p. 125
F Where assessee not filing return in response to notice, difference between assessed income and returned income to be treated as concealed income, penalty leviable : C.T.Chacko v. ITO (Cochin) p. 125
F Assessee investing gains in house property in the USA entitled to exemption u/s.54F : Vinay Mishra v. Asst. CIT (Bangalore) p. 129
F International transactions : ALP : Company showing fluctuation in P & L to be excluded : Large companies having turnover of more than Rs.260 crores not comparable : Actis Advisers P. Ltd. v. Dy. CIT (Delhi) p. 138
| COMPANY LAW INSTITUTE OF INDIA PVT. LTD. No. 2, Vaithyaram Street, T.Nagar, Chennai - 600017. Phone: (044) 24350752 - 55 Fax: (044) 24322015 info@cliofindia.com |
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Subject: Pre-Print Highlights of GSTR from CLI
From: "info@cliofindia.com" <info@cliofindia.com>
To: newsletter@cli.in
Sent: Saturday, 17 November 2012 6:45 AM
Subject: Pre-Print Highlights of GSTR from CLI
GOODS AND SERVICE TAX REPORTS (GSTR) HIGHLIGHTS
|
INCOME TAX REPORTS (ITR) HIGHLIGHTS
F Addition related to debatable issues and documents not required to be filed with return : No power to disallow claim on lack of proof of claim : Abhishek Cement Ltd. v. Union of India (Delhi) p. 1
F Section 43 applicable where assessee failing to enclose with return documents to show payment of tax : Abhishek Cement Ltd. v. Union of India (Delhi) p. 1
F Premia on keyman insurance for directors and policies susequently assigned to directors : Premia deductible as business expenditure : CIT v. Rajan Nanda (Delhi) p. 8
F Assignment of keyman insurance policy to directors : Difference between actual premia paid and surrender value not assessable as profits in lieu of salary in hands of directors : CIT v. Rajan Nanda (Delhi) p. 8
F Intimation on basis of return : Assessing Officer cannot disallow claim and make addition for lack of evidence : Indian Drugs and Pharmaceuticals Ltd. v. Union of India (Delhi) p. 32
F Assessee purchasing and exporting sugar : No reimbursement of export losses from manufacturers : Reimbursement payments not includible in net realisable value : CIT v. Indian Sugar and Gen. Industry Export Import (Delhi) p. 38
F Partners of assessee shareholders in a company and the firm receiving payment from company : Contention that payment not out of accumulated profits not examined by Commissioner (Appeals) and Tribunal : Matter remanded : CIT v. Bharti Overseas Trading Co. (Delhi) p. 52
F Prior period expenses deductible : Tamil Nadu Cements Corporation Ltd. v. Joint CIT (Mad) p. 58
F Fee paid for obtaining software and licence and for renewing licence, revenue expenditure : CIT v. Toyota Kirloskar Motors P. Ltd. (Karn) p. 65
F Payment of charges for transportation of natural gas : Transportation charges not liable to tax deduction at source : CIT v. Krishak Bharati Co-operative Ltd. (Guj) p. 68
F Assessment after considering claim : Notice on ground expenses wrongly allowed, not proper : CIT v. Amitabh Bachchan (bom) p. 76
F Long-term capital gains : Inclusion of husband's name as joint owner in sale deed as well as in bonds : Assessee entitled to exemption of entire investment : Director of I. T. (International Taxation) v. Mrs. Jennifer Bhide (Karn) p. 80
F Presumption as to correctness of seized documents must be given full effect : CIT v. Indeo Airways P. Ltd. (Delhi) p. 85
F Method of computing exemption under section 10A : CIT v. Tata Elxsi Ltd. (Karn) p. 98
F Penalty could not be levied where claim for deduction which was debatable : Karan Raghav Exports P. Ltd. v. CIT (Delhi) p. 112
F C. B. D. T. Circulars :
Circular No. 9 of 2012, dated October 17, 2012-Deduction of tax at source on payment of gas transportation charges by the purchaser of natural gas to the seller of gas-regarding p. 1
F Notifications :
Income-tax Act, 1961 : Notification under section 35AC(1) Expln., clause (b) : Eligible projects or schemes p. 12
Income-tax Act, 1961 : Notification under section 90 : Agreement between the Government of the Republic of India and Government of the Macao Special Administrative Region of the People's Republic of China for the exchange of information with respect to taxes p. 3
F Exemption of income-tax on capital gains-Sections 54, 54EC and 54F of the Act-T. N. Pandey, Retd. Chairman, CBDT p. 17
F GAAR-Shome Committee Report-S. Rajaratnam,Retd. Member, I. T. A. T. p. 1
F Indirect transfer-Draft report on retrospective amendments-S. Rajaratnam, Retd. Member, I. T. A. T. p. 29
| COMPANY LAW INSTITUTE OF INDIA PVT. LTD. No. 2, Vaithyaram Street, T.Nagar, Chennai - 600017. Phone: (044) 24350752 - 55 Fax: (044) 24322015 info@cliofindia.com |
ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))
Assessment --Gross profit rate--Low gross profit rate not ground to make additions--Assessing Officer not making comparative studies with similar business--Assessee furnishing all details required--Details not proved to be defective--Deletion of addition proper--Income-tax Act, 1961, s. 145-- ITO v. Sai International(Delhi) . . .1
Book profits --Computation--Claim for bad debts--Law applicable--Effect of retrospective amendment to section 115JB by Finance (No. 2) Act, 2009--Bad debts to be rejected--Income-tax Act, 1961, s. 115JB--Assistant CIT v. GE Plastics India Ltd. (Ahmedabad) . . . 58
Business expenditure --Current repairs--Manufacture of tread rubber--Chamber assembly integral part of intermix machine and incapable of performing independent function--Expenditure for replacing chamber assembly “current repair†and allowable--Income-tax Act, 1961, s. 31(i)-- Midas Rubber P. Ltd. v.Assistant CIT (Cochin) . . . 6
----Deduction on actual payment--Contribution to provident fund--Only contribution paid before due date for filing of return to be allowed--Matter remanded--Income-tax Act, 1961, s. 43B-- Fenner (India) Ltd. v.Additional CIT (Chennai) . . . 48
Capital gains --Long-term capital gains--Exemption--Investment of gains in residential property--No requirement that property should be in India--Assessee investing gains in house property in the United States of America--Entitled to exemption--Income-tax Act, 1961, s. 54F-- Vinay Mishra v. Assistant CIT(Bangalore) . . . 129
----Revaluation of assets on conversion of firm into company--Not to be taxed as capital gains--Income-tax Act, 1961, ss. 45(4), 47(xiii)-- ITO v. Alta Inter-Chem Industries (Ahmedabad) . . . 103
Capital or revenue expenditure --Non-compete fee--Not revenue expenditure--Income-tax Act, 1961--Assistant CIT v. GE Plastics India Ltd. (Ahmedabad) . . . 58
----Royalty for use of trade mark--25 per cent. of royalty considered capital expenditure and 75 per cent. towards revenue expenditure--Income-tax Act, 1961-- Fenner (India) Ltd. v. Additional CIT (Chennai) . . . 48
Capital gains or business income --Profits from purchase and sale of shares--Voluminous share transactions, repetition and continuity of transactions--Purchase of shares not for earning dividend but with dominant intention of resale in order to earn profits--Profit not mere enhancement of value of shares but profit in business--Profits taxable as business income--Income-tax Act, 1961, ss. 2(14)(i), 28, 45-- Assistant CIT v.Manoj Kumar Samdaria (Delhi) . . . 13
Charitable trust --Registration--Denial of registration on ground that object religious in nature--Finding that amendment in objects clause--Law applicable--Effect of section 13(1)(b)-- Denial of registration not valid--Income-tax Act, 1961, ss. 12AA, 13(1)(b)-- Radhika Seva Sansthan v. CIT (Jaipur) . . . 31
Company --Book profits--Minimum alternate tax--Computation of profits under section 115JB--Export--Special deduction allowable on basis of book profits under section 80HHC--Income-tax Act, 1961, ss. 80HHC, 115JB-- Assistant CIT v. GE Plastics India Ltd. (Ahmedabad) . . . 58
Depreciation --Non-compete fee--Is intangible asset--Eligible for depreciation--Income-tax Act, 1961, s. 32(1)(ii)-- Assistant CIT v. GE Plastics India Ltd. (Ahmedabad) . . . 58
----Whether or not newly acquired extrusion business commenced in present year for allowing depreciation--Matter remanded--Income-tax Act, 1961-- Assistant CIT v. GE Plastics India Ltd. (Ahmedabad) . . . 58
Donation to charitable institution --Special deduction--Denial of approval under section 80G(5)(vi)--Objects clause not indicating that expenditure on religious objects limited to 5 per cent. of total income for particular year--Approval to be denied--Income-tax Act, 1961, s. 80G(5)(vi)-- Radhika Seva Sansthan v. CIT (Jaipur) . . . 31
Export --Deduction--Computation--Communication expenses attributable to delivery of computer software--Adjustments to export turnover also to be made in total turnover--Income-tax Act, 1961, s. 10A-- Centillium India Ltd. v. Deputy CIT (Bangalore) . . . 69
----Special deduction--Computation--Sales tax to be excluded from total turnover for computing deduction--Income-tax Act, 1961, s. 80HHC-- Assistant CIT v. GE Plastics India Ltd. (Ahmedabad) . . . 58
----Special deduction--Insurance--Insurance receipts constitute “operational incomeâ€--Scrap--Scarp from manufacturing activity and packing activity--Receipts on account of scarps to be segregated and re-determined--Matter remanded--Technology transfer fees--Is “operational income†if comparable to receipts on account of development work--Matter remanded--Income-tax Act, 1961, s. 80HHC-- CIPLA Ltd.v. Deputy CIT (Mumbai) . . . 98
Export business --Special deduction--Set-off of unabsorbed depreciation of earlier years against total income--Justified--Income-tax Act, 1961, s. 80HHC-- Assistant CIT v . GE Plastics India Ltd. (Ahmedabad) . . . 58
Income --Computation of income--Disallowance of expenditure incurred in earning income not forming part of total income--Law applicable--Rule 8D applicable from assessment year 2008-09--Disallowance for earlier periods to be determined on reasonable basis--Income-tax Act, 1961, s. 14A--Income-tax Rules, 1962, r. 8D--Fenner (India) Ltd. v. Additional CIT (Chennai) . . . 48
International transactions --Arm’s length price--Determination--Transactions with associated enterprises alone to be considered--Selection of comparables--Standard deduction of 5 per cent. under provisos to section 92C(2) granted--Matter remanded--Income-tax Act, 1961, s. 92C(2)-- Centillium India Ltd. v. Deputy CIT (Bangalore) . . . 69
----Arm’s length price--Transfer pricing study--Transactional net margin method--Profit level indicator--Comparables--Working capital relevant factor for determining profit margin--Mere low profit or loss would not make a functional comparable company uncomparable--Entity can be taken as uncontrolled, if its related party transaction does not exceed 25 per cent. of total revenue--Function, assets and risk analysis--Comparable cannot be rejected just because it is operating in same sector in different line--No prejudice shown in inclusion of comparables which had incurred more than 5 per cent. of sales as expenses towards advertisement and marketing--Company showing fluctuation in profits and losses to be excluded--Large companies having turnover of more than Rs. 260 crores not comparable--Current year’s data to be used--Income-tax Act, 1961, ss. 92C, 92D--Income-tax Rules, 1962, rr. 10B, 10D-- Actis Advisers P. Ltd. v. Deputy CIT (Delhi) . . . 138
Non-resident --Permanent establishment--Liaison office in India--Not a permanent establishment--Non-resident not assessable in India--Income-tax Act, 1961, s. 9-- Deputy Director of Income-tax (International Taxation) v. M. Fabricant and Sons Inc. (Mumbai) . . . 118
Penalty --Compulsory maintenance of accounts--Assessee running poultry farm in remote village--Books of account not maintained--Reasonable cause--Assessee entitled to benefit under section 273B--Penalty not leviable--Income-tax Act, 1961, ss. 44AA, 271A, 273B-- C. T. Chacko v. ITO (Cochin) . . . 125
----Concealment of income--Assessee not filing return in response to notice under section 148--Difference between assessed income and returned income to be considered as concealed income--Penalty to be levied--Income-tax Act, 1961, ss. 148, 271(1)(c)-- C. T. Chacko v. ITO (Cochin) . . . 125
----Deduction of tax at source--Failure to furnish PAN number of one of the deductees--Penalty exigible under section 272B--Income-tax Act, 1961, s. 272B-- Tej Pal Gupta v. ITO (TDS) (Chandigarh) . . . 46
Revision --Condition precedent--Order should be erroneous and prejudicial to Revenue--Assessing Officer following High Court decisions and deducting premium on keyman insurance--Order not erroneous--Withdrawal of deduction in revision proceedings--Not valid--Income-tax Act, 1961, s. 263-- Laj Exports v.Deputy CIT (Chandigarh) . . . 111
Search and seizure --Block assessment--Income disclosed in regular return cannot be treated as undisclosed income in block assessment--Income disclosed prior to search cannot be assessed under sections 158BC and 158BD--Income-tax Act, 1961, ss. 158BC, 158BD-- Assistant CIT v. Smt. Sula Jayakumar (Cochin) . . . 37
S. 2(14)(i) --Capital gains or business income--Profits from purchase and sale of shares--Voluminous share transactions, repetition and continuity of transactions--Purchase of shares not for earning dividend but with dominant intention of resale in order to earn profits--Profit not mere enhancement of value of shares but profit in business--Profits taxable as business income-- Assistant CIT v. Manoj Kumar Samdaria (Delhi) . . . 13
S. 9 --Non-resident--Permanent establishment--Liaison office in India--Not a permanent establishment--Non-resident not assessable in India-- Deputy Director of Income-tax (International Taxation) v. M. Fabricant and Sons Inc. (Mumbai) . . . 118
S. 10A --Export--Deduction--Computation--Communication expenses attributable to delivery of computer software--Adjustments to export turnover also to be made in total turnover-- Centillium India Ltd. v. Deputy CIT (Bangalore) . . . 69
S. 12AA --Charitable trust--Registration--Denial of registration on ground that object religious in nature--Finding that amendment in objects clause--Law applicable--Effect of section 13(1)(b)-- Denial of registration not valid-- Radhika Seva Sansthan v. CIT (Jaipur) . . . 31
S. 13(1)(b) --Charitable trust--Registration--Denial of registration on ground that object religious in nature--Finding that amendment in objects clause--Law applicable--Effect of section 13(1)(b)-- Denial of registration not valid-- Radhika Seva Sansthan v. CIT (Jaipur) . . . 31
S. 14A --Income--Computation of income--Disallowance of expenditure incurred in earning income not forming part of total income--Law applicable--Rule 8D applicable from assessment year 2008-09--Disallowance for earlier periods to be determined on reasonable basis-- Fenner (India) Ltd. v. Additional CIT(Chennai) . . . 48
S. 28 --Capital gains or business income--Profits from purchase and sale of shares--Voluminous share transactions, repetition and continuity of transactions--Purchase of shares not for earning dividend but with dominant intention of resale in order to earn profits--Profit not mere enhancement of value of shares but profit in business--Profits taxable as business income-- Assistant CIT v. Manoj Kumar Samdaria (Delhi) . . . 13
S. 31(i) --Business expenditure--Current repairs--Manufacture of tread rubber--Chamber assembly integral part of intermix machine and incapable of performing independent function--Expenditure for replacing chamber assembly “current repair†and allowable-- Midas Rubber P. Ltd. v. Assistant CIT (Cochin) . . . 6
S. 32(1)(ii) --Depreciation--Non-compete fee--Is intangible asset--Eligible for depreciation-- Assistant CIT v.GE Plastics India Ltd. (Ahmedabad) . . . 58
S. 43B --Business expenditure--Deduction on actual payment--Contribution to provident fund--Only contribution paid before due date for filing of return to be allowed--Matter remanded-- Fenner (India) Ltd. v.Additional CIT (Chennai) . . . 48
S. 44AA --Penalty--Compulsory maintenance of accounts--Assessee running poultry farm in remote village--Books of account not maintained--Reasonable cause--Assessee entitled to benefit under section 273B--Penalty not leviable-- C. T. Chacko v. ITO (Cochin) . . . 125
S. 45 --Capital gains or business income--Profits from purchase and sale of shares--Voluminous share transactions, repetition and continuity of transactions--Purchase of shares not for earning dividend but with dominant intention of resale in order to earn profits--Profit not mere enhancement of value of shares but profit in business--Profits taxable as business income-- Assistant CIT v. Manoj Kumar Samdaria (Delhi) . . . 13
S. 45(4) --Capital gains--Revaluation of assets on conversion of firm into company--Not to be taxed as capital gains-- ITO v. Alta Inter-Chem Industries (Ahmedabad) . . . 103
S. 47(xiii) --Capital gains--Revaluation of assets on conversion of firm into company--Not to be taxed as capital gains-- ITO v. Alta Inter-Chem Industries (Ahmedabad) . . . 103
S. 54F --Capital gains--Long-term capital gains--Exemption--Investment of gains in residential property--No requirement that property should be in India--Assessee investing gains in house property in the United States of America--Entitled to exemption--Income-tax Act, 1961, Vinay Mishra v. Assistant CIT (Bangalore) . . . 129
S. 80G(5)(vi) --Donation to charitable institution--Special deduction--Denial of approval under section 80G(5)(vi)--Objects clause not indicating that expenditure on religious objects limited to 5 per cent. of total income for particular year--Approval to be denied-- Radhika Seva Sansthan v. CIT (Jaipur) . . . 31
S. 80HHC --Company--Book profits--Minimum alternate tax--Computation of profits under section 115JB--Export--Special deduction allowable on basis of book profits under section 80HHC-- Assistant CIT v. GE Plastics India Ltd. (Ahmedabad) . . . 58
----Export--Special deduction--Computation--Sales tax to be excluded from total turnover for computing deduction-- Assistant CIT v. GE Plastics India Ltd. (Ahmedabad) . . . 58
----Export--Special deduction--Insurance--Insurance receipts constitute “operational incomeâ€--Scrap--Scarp from manufacturing activity and packing activity--Receipts on account of scarps to be segregated and re-determined--Matter remanded--Technology transfer fees--Is “operational income†if comparable to receipts on account of development work--Matter remanded-- CIPLA Ltd. v. Deputy CIT (Mumbai) . . . 98
----Export business--Special deduction--Set-off of unabsorbed depreciation of earlier years against total income--Justified-- Assistant CIT v . GE Plastics India Ltd. (Ahmedabad) . . . 58
S. 92C --International transactions--Arm’s length price--Transfer pricing study--Transactional net margin method--Profit level indicator--Comparables--Working capital relevant factor for determining profit margin--Mere low profit or loss would not make a functional comparable company uncomparable--Entity can be taken as uncontrolled, if its related party transaction does not exceed 25 per cent. of total revenue--Function, assets and risk analysis--Comparable cannot be rejected just because it is operating in same sector in different line--No prejudice shown in inclusion of comparables which had incurred more than 5 per cent. of sales as expenses towards advertisement and marketing--Company showing fluctuation in profits and losses to be excluded--Large companies having turnover of more than Rs. 260 crores not comparable--Current year’s data to be used-- Actis Advisers P. Ltd. v. Deputy CIT (Delhi) . . . 138
S. 92C(2) --International transactions--Arm’s length price--Determination--Transactions with associated enterprises alone to be considered--Selection of comparables--Standard deduction of 5 per cent. under provisos to section 92C(2) granted--Matter remanded-- Centillium India Ltd. v. Deputy CIT (Bangalore) . . . 69
S. 92D --International transactions--Arm’s length price--Transfer pricing study--Transactional net margin method--Profit level indicator--Comparables--Working capital relevant factor for determining profit margin--Mere low profit or loss would not make a functional comparable company uncomparable--Entity can be taken as uncontrolled, if its related party transaction does not exceed 25 per cent. of total revenue--Function, assets and risk analysis--Comparable cannot be rejected just because it is operating in same sector in different line--No prejudice shown in inclusion of comparables which had incurred more than 5 per cent. of sales as expenses towards advertisement and marketing--Company showing fluctuation in profits and losses to be excluded--Large companies having turnover of more than Rs. 260 crores not comparable--Current year’s data to be used-- Actis Advisers P. Ltd. v. Deputy CIT (Delhi) . . . 138
S. 115JB --Book profits--Computation--Claim for bad debts--Law applicable--Effect of retrospective amendment to section 115JB by Finance (No. 2) Act, 2009--Bad debts to be rejected-- Assistant CIT v. GE Plastics India Ltd. (Ahmedabad) . . . 58
----Company--Book profits--Minimum alternate tax--Computation of profits under section 115JB--Export--Special deduction allowable on basis of book profits under section 80HHC-- Assistant CIT v. GE Plastics India Ltd. (Ahmedabad) . . . 58
S. 145 --Assessment--Gross profit rate--Low gross profit rate not ground to make additions--Assessing Officer not making comparative studies with similar business--Assessee furnishing all details required--Details not proved to be defective--Deletion of addition proper-- ITO v. Sai International (Delhi) . . .1
S. 148 --Penalty--Concealment of income--Assessee not filing return in response to notice under section 148--Difference between assessed income and returned income to be considered as concealed income--Penalty to be levied-- C. T. Chacko v. ITO (Cochin) . . . 125
S. 158BC --Search and seizure--Block assessment--Income disclosed in regular return cannot be treated as undisclosed income in block assessment--Income disclosed prior to search cannot be assessed under sections 158BC and 158BD-- Assistant CIT v. Smt. Sula Jayakumar (Cochin) . . . 37
S. 158BD --Search and seizure--Block assessment--Income disclosed in regular return cannot be treated as undisclosed income in block assessment--Income disclosed prior to search cannot be assessed under sections 158BC and 158BD-- Assistant CIT v. Smt. Sula Jayakumar (Cochin) . . . 37
S. 263 --Revision--Condition precedent--Order should be erroneous and prejudicial to Revenue--Assessing Officer following High Court decisions and deducting premium on keyman insurance--Order not erroneous--Withdrawal of deduction in revision proceedings--Not valid-- Laj Exports v. Deputy CIT (Chandigarh) . . . 111
S. 271(1)(c) --Penalty--Concealment of income--Assessee not filing return in response to notice under section 148--Difference between assessed income and returned income to be considered as concealed income--Penalty to be levied-- C. T. Chacko v. ITO (Cochin) . . . 125
S. 271A --Penalty--Compulsory maintenance of accounts--Assessee running poultry farm in remote village--Books of account not maintained--Reasonable cause--Assessee entitled to benefit under section 273B--Penalty not leviable-- C. T. Chacko v. ITO (Cochin) . . . 125
S. 272B --Penalty--Deduction of tax at source--Failure to furnish PAN number of one of the deductees--Penalty exigible under section 272B-- Tej Pal Gupta v. ITO (TDS) (Chandigarh) . . . 46
S. 273B --Penalty--Compulsory maintenance of accounts--Assessee running poultry farm in remote village--Books of account not maintained--Reasonable cause--Assessee entitled to benefit under section 273B--Penalty not leviable-- C. T. Chacko v. ITO (Cochin) . . . 125
R. 8D --Income--Computation of income--Disallowance of expenditure incurred in earning income not forming part of total income--Law applicable--Rule 8D applicable from assessment year 2008-09--Disallowance for earlier periods to be determined on reasonable basis-- Fenner (India) Ltd. v. Additional CIT(Chennai) . . . 48
R. 10B --International transactions--Arm’s length price--Transfer pricing study--Transactional net margin method--Profit level indicator--Comparables--Working capital relevant factor for determining profit margin--Mere low profit or loss would not make a functional comparable company uncomparable--Entity can be taken as uncontrolled, if its related party transaction does not exceed 25 per cent. of total revenue--Function, assets and risk analysis--Comparable cannot be rejected just because it is operating in same sector in different line--No prejudice shown in inclusion of comparables which had incurred more than 5 per cent. of sales as expenses towards advertisement and marketing--Company showing fluctuation in profits and losses to be excluded--Large companies having turnover of more than Rs. 260 crores not comparable--Current year’s data to be used-- Actis Advisers P. Ltd. v. Deputy CIT (Delhi) . . . 138
R. 10D --International transactions--Arm’s length price--Transfer pricing study--Transactional net margin method--Profit level indicator--Comparables--Working capital relevant factor for determining profit margin--Mere low profit or loss would not make a functional comparable company uncomparable--Entity can be taken as uncontrolled, if its related party transaction does not exceed 25 per cent. of total revenue--Function, assets and risk analysis--Comparable cannot be rejected just because it is operating in same sector in different line--No prejudice shown in inclusion of comparables which had incurred more than 5 per cent. of sales as expenses towards advertisement and marketing--Company showing fluctuation in profits and losses to be excluded--Large companies having turnover of more than Rs. 260 crores not comparable--Current year’s data to be used-- Actis Advisers P. Ltd. v. Deputy CIT (Delhi) . . . 138
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