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II. Direct Tax Case laws:
1.
Commissioner of Income-tax (Central), Ludhiana v. Paliwal Exports, IT
Appeal No. 88 of 2008, Date of Order : 09.10.2013, High Court of Punjab
& Haryana.
It is net interest which has to be taken into account while computing
deduction under section 80HHC as per Explanation (baa) to section 80HHC
(4C)
Held Yes
In ACG
Associated Capsules Private Limited's, the substantial question of law
is answered against the revenue and in favour of the assessee. It is
held that it is the net interest which has to be taken into account
while computing deduction under Section 80HHC as per Explanation (baa)
to Section 80HHC (4C) of the Act.
(Please click here to view the Judgment).
2. DIT-I, (Int. T) v. ALCATEL LUCENT USA, INC., ITA 327/2012, Date of Order: 7th November, 2013, High Court of Delhi
S. 234B: A non-resident assessee which does not admit income
chargeable to tax, assessee must take responsibility of payment of all
taxes and interest as applicable, once liability to tax is accepted. It
cannot shift the responsibility to the Indian payers & expect them
to deduct tax from the remittances.
Held Yes
(i) There
is a distinction between a case where the assessee admits that it has
income chargeable to tax in India but does not pay advance tax on the
basis that the Indian payer ought to have deducted tax at source u/s
195. In such a case (as was the fact situation in Jacabs), the assessee
is entitled to take credit for the tax which was “deductible” by the
Indian payer while computing its advance tax liability even though no
tax was in fact deducted. However, in a case where the assessee does not
admit any income in the return, this benefit is not available. An
inference or presumption can be drawn that the assessee had represented
to its Indian telecom dealers not to deduct tax from the remittances
made to it even though there is no positive or direct evidence to that
effect;
(ii) Also, having denied its tax liability and leading the Indian
payers to believe that no tax was deductible it is inequitable &
unfair on the assessee’s part to shift the responsibility to the Indian
payers & expect them to deduct tax from the remittances. The
assessee must take responsibility for its volte face. Once liability to
tax is accepted, all consequences follow; they cannot be avoided;
(iii) Also, applying equitable principles, as the assessee deprived
the revenue of the advance tax, it must pay compensation by way of
interest.
(Please click here to view the Judgment).
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