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31.01.2011 -Recent Updates as on 31.01.2011
Monday, January 31, 2011

A BREAKING NEWS: 

Supreme Court stays order of Delhi High Court stopping Centre from recovering Service Tax on Renting of Immovable Property for commercial use.

   

Recent Updates:

1.   M/S ADOBE SYSTEMS INDIA PVT. LTD. Vs. ADDITIONAL COMMISSIONER OF INCOME TAX, I.T.A. NO. 5043/DEL/2010 FOR A.Y.  2006-07, THE ITAT - DELHI BENCH “ A ” NEW DELHI

Held that

Transfer Pricing: Super-normal profit cos must be excluded from comparables. The assessee, engaged in providing software development services reported an OP/Cost Margin of 14.96%. The TPO worked out the average of arithmetic mean of ALP (OP/OC) of 42 comparables at 24.91% and directed that an adjustment of Rs. 10.40 crores be made. In its objections to the DRP, the assessee claimed that the comparables included three companies which were “super-normal profit making” and that these should be excluded. It was claimed that if the said companies were excluded, the arithmetic mean of OP/OC of the comparables was 17.15% which was within the +/- 5% range permitted by s.92(C)(2).Further held that, It is quite contrary to the mandate of section 144C of the IT Act, where the assessee has made voluminous submissions including paper books before the DRP who has passed a very cursory and laconic order without going into the details of the submissions.  

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2.    COMMISSIONER OF INCOME TAX, TRICHUR vs. THE CATHOLIC SYRIAN BANK LTD., TRICHUR, ITA. Nos. 467, 720, 730, 843, 479, 1324 & 1045 of 2009 & 40 of 2010 DATE OF ORDER: 21.10.2010 IN THE HIGH COURT OF KERALA AT ERNAKULAM

Held that

There is no precise formula for proportionate disallowance of administrative expenditure. No disallowance is called for, for proportionate administrative cost attributable to earning of tax free income until Rule 8D came into force. The proportionate disallowance under Section 14A should be limited to only interest liability and not overheads or administrative expenditure; which should be considered for disallowance under Rule 8D from 2007-2008 onwards. 

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3.    SHRI BALWANT RAI WADHWA VS. ITO, THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH ‘A’, I.T.A NO. 4806/DEL/10 

Non-supply of ‘Reasons for reopening’ u/s 148 within the time renders the reopening of assessment u/s 147 void.            The AO served notice u/s 148 within the limitation period. However, the recorded reasons were supplied after the limitation period. The assessee argued before the Tribunal that in the light of the observations in Haryana Acrylic vs. CIT 308 ITR 38 (Del), if the reasons for reopening were not served on the assessee within 6 years i.e. within the limitation period, the reopening was void. The Tribunal allowed the appeal of the assessee. 

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What's New
  • RBI/2010-11/393 - Annual Financial Inspection – Priority Sector Loans – Mis-classification by Banks  (Click for detail)

  • RBI/2010-11/392 - Anti- Money Laundering (AML) / Combating of Financing of Terrorism (CFT) Standards  (Click for detail)

    

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"Voice of CA"

  

CA. Sanjay Kumar Agarwal, Founder - Voice of CA
Member  Central Council - ICAI
Former Chairman - NIRC
Mob : 9811080342,
agarwal.s.ca@gmail.com  
    
   
CA. Sidharth Jain, Co-Moderator
sidhjasso@yahoo.com 
  
CA. Mukesh K Bansal, Co-Moderator-FEMA
Mob:9540022533,
mukbansal80@gmail.com 

 

  

 

  

 

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