Tag: Taxation
-
A Much Needed Reading Down of Dharmendra Textiles
[Posted by Shantanu Naravane] An earlier post highlighted the implications of the decision of the Supreme Court in Dharmendra Textiles (306 ITR) on penalty proceedings under the revenue laws, including the Income Tax Act. The Court there overruled its earlier decision in Dilip Shroff, and concluded that there is no requirement of mens rea in…
-
NCLT and NTT: Questions of “Intrinsic Judicial Functions”
[Posted by Mihir Naniwadekar] Recently, a Constitution Bench of the Supreme Court (headed by Balakrishnan C.J.) finished hearing arguments on the constitutionality of the proposed National Company Law Tribunal (NCLT), and judgment has been reserved. The matter arose out of an appeal against a Madras High Court decision in R. Gandhi v. Union of India.…
-
Non-Discrimination: Protecting foreign-owned subsidiaries
[Posted by Mihir Naniwadekar] A recent decision of the Pune Bench of the Income Tax Appellate Tribunal in Daimler Chrysler v. DCIT deals with several important issues. One of these was whether the provisions of a Double Taxation Avoidance Agreement would apply in the absence of double taxation. The Tribunal held that given the role…
-
Further watering down of section 14A, Income Tax Act
[Posted by Shantanu Naravane] Close on the heels of the decision of the Bombay High Court in Reliance Utilities & Power, which possibly has significant implications on the interpretation of section 14A of the Income Tax Act, the Bombay ITAT has, in a recent decision, taken a further step with the potential of limiting the…
-
Taxing times for the software industry
[Posted by V. Niranjan] ET reports that the software industry has witnessed a 40 % drop in sales as a result of recently introduced taxation provisions. After the decision of the Supreme Court in Tata Consultancy Services v. State of Andhra Pradesh, (2005) 1 SCC 308, the sale of ‘branded’ software like Microsoft products has…
-
Have liaison offices escaped the tax net?
[Posted by V. Niranjan] After the Department’s partial victory of sorts in the Vodafone tax battle, recent decisions of various Tribunals holding that liaison offices are generally not subject to taxation come as much needed relief for MNCs. This, however, is subject to a few qualifications. As the decision of the AAR in Ikea Trading…
-
A Way around Daga Capital?
[Posted by Shantanu Naravane] An earlier post had discussed a decision of a Special Bench of the Mumbai Income Tax Appellate Tribunal (ITAT) in Daga Capital [26 SOT 603], highlighting its far-reaching implications on expenditures incurred ‘in relation to’ the earning of tax-free income under the Income Tax Act (Act). The Special Bench, following the…
-
Further Spill-Over Effects Of Satyam
[Posted by Shantanu Naravane] An article in today’s Business Standard mentions the renewed interest the Income Tax Department is taking the compliance of Chartered Accountants with their due diligence obligations. In the case of transactions involving remission of money outside India, the Income Tax Act permits the production of a certificate from the CA stating…
-
Supreme Court rejects Vodafone’s appeal
[Posted by Mihir Naniwadekar] According to a report in the Economic Times, the Supreme Court has refused to admit Vodafone’s SLP against the order of the Bombay High Court in the Vodafone tax matter. The Court has asked Vodafone to respond to the show cause notice issued by the Revenue. It now appears that the…
-
Clifford Chance v. DCIT: Territorial nexus in international taxation
[Posted by Mihir Naniwadekar] A recent decision of the Bombay High Court in Clifford Chance v. DCIT revisits interesting legal issues connected to the taxation of non-residents under Section 9 of the Income Tax Act, 1961. Section 9(1) deals with “income deemed to accrue or arise in India”. The relevant part of the Section read…