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Performance bonus does not form part of 'salary'; Guideline value is not the market value.....and lots more!!

May 14, 2020
Issue No. 205 / May 13th, 2020
Dear Professionals, 
Taxsutra Database”, a true Income-tax Research is an archive of over 107070+ Income Tax Rulings reported across ITR, CTR, Taxman, DTR, ITD, TTJ, and ITR(Trib) and which also includes recent ‘unreported handpicked ruling of SC, HC & ITAT’. A completely integrated service with all the latest cases powered by an advanced search engine to provide a seamless user experience; Search results supported by active filters around Court Level, Location, Case Numbers and Citation; A Unique Bulls Eye application to further enhance search by including "Exact words", "Any of these", "none of these"  
We are glad to present to you the 205th edition of ‘Taxsutra Database Bulletin’, where we keep you updated with current trends in the tax arena! 
Key Takeaways from Handpicked Rulings
1) ITAT: Guideline value is not the market value, it`s only guidance to determine the market value – ITAT holds that guideline value and comparable instances in the locality need to be taken into consideration while determining the fair market value (FMV); Directs lower authorities to find out the guideline value from the concerned registration authorities ............ Click here to read and download ITAT order
Editorial Note: Circle rates are only to act as a guide for the assessment of the duty chargeable on the value of any immovable property ........ Click here to read and download HC judgment
2) HC: Initiation of the period of limitation provided u/s 254(2) starts from the date of actual receipt of the order passed by Tribunal (ITAT) which is sought to be reviewed – HC allows Assessee`s writ, holds that Rule 24 of the ITAT Rules mandates ITAT to decide the appeal on merits and sans examination by ITAT on merits, there is no cogent reason for the ITAT not to entertain the application for recall; Notes that as the order passed by ITAT is not touching upon the merits of the case, it deprives the Court to evaluate, if any, substantial question of law u/s 260A of the Act, thereby impinging upon assessee’s right to get the issue decided by the final fact-finding authority ................ Click here to read and download HC judgment
3) Performance bonus does not form part of 'salary' for the purposes of computing HRA exemption u/s 10(13A); No HRA disallowances on rent paid over 10% of the basic salary – ITAT allows assessee`s (salaried individual) appeal, notes that lower authorities denied benefit of 10(13A) on the ground that any commission or bonus linked to the turnover or the performance has to be treated as salary and hence............. Click here to read and download ITAT Order
4) HC: Instruction of the CBDT cannot be forfeited, if it is against the statutory provision - HC holds that no retrospective benefit of Section 11 & 12, if an application for registration u/s 12A provided from the following financial year in which the application for registration is made and registration was subsequently granted; Sets-aside the order passed by the ITAT, rules in favour of Revenue; Notes that the benefit of registration could not have been extended for the impugned AY 2011-12,............. Click here to read and download HC judgment
5) No reason to deviate and disallow 100% of expenses without there being any change in facts for the impugned assessment year- ITAT deletes suo-moto disallowances of expenditure debited to the profit and loss account made by the Akshaye Khanna (Actor and film production) in his statement of total income; Notes that in the preceding financial year, the AO has made similar disallowances and the ITAT have ................. Click here to read and download ITAT Order
Expert Column 
Recent developments in India concerning International Taxation, could be seen as an albatross around the neck for the non-resident e-commerce players. With an increase in compliance burden and potential increase of costs, many of the e-commerce players consider unilateral measures taken by India as a deterrent to an effective business model. In this regard,  Bharathi Krishnaprasad (Principal Associate, Lakshmikumaran & Sridharan) and Harshit Khurana (Senior Associate) in their article today discuss various provisions of Indian Income Tax as applicable to e-commerce players in India. 
Briefly elucidating the provisions of equalisation levy as enhanced by Finance Act 2020, the authors state that considering that the levy has been introduced, not under the Income Tax law as tax on income, rather as an independent levy under a separate legislation, the non-resident e-commerce operators might be denied tax credits for the same. The authors also discuss the impact of the proposed profit attribution rules and Significant Economic Presence (SEP) under the domestic laws and opine that “these rules once implemented, will have significant impact on the traditional businesses as well.”  Further with respect to the recently introduced Sec.194-O, the authors highlight that the provision is silent on the residential status and thus one may take a position that non-resident e-commerce operator should not be obligated to deduct tax since responsibility of TDS deduction is of ‘any person’ making the payment, which would only mean residents who have tax presence in India.
Click here to read the article titled – ‘Taxation of E-commerce Players in India – A Holistic View’ 
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