“Taxsutra Database”, a true Income-tax Research is an archive of over 106700 + 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 203rd edition of ‘Taxsutra Database Bulletin’, where we keep you updated with recent rulings.
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Taxsutra Database - Expert Column
In order to fight COVID-19, countries across the globe are taking measures on restriction on travel, imposing lockdown etc. Owing to the same, many employees of a foreign entity could be stranded and forced to work remotely from India and in many cases, the employees stay-period may exceed the service PE threshold. It will be important for all MNCs to review whether these “employees” are creating corporate tax risks. In this regard OECD Secretariat on April 3rd, 2020 issued guidance addressing concerns on PE,POEM etc. during COVID-19 pandemic
To determine how business should prepare to take appropriate mitigating action, Sachin Kumar BP, (Partner Manohar Chowdhry & Associates) and Nitish Ranjan (Associate) discuss the unintended tax consequences for Foreign Portfolio investments and Private equity funds based in Mauritius or Singapore, in a situation where managers thereof are temporarily away from home country and are stranded in the host country (India). The authors' inter-alia suggest robust documentation of the employees details setting out the intention of the parties to be able to take support from the guidance by OECD to mitigate Service PE/POEM exposure.
Click here to read the article titled “FPI and PE funds – unintended tax consequences of COVID 19”
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Key Takeaways from Handpicked rulings
1) HC: Transfer of accumulated income to unregistered Society, taxable u/s 11(3) – HC upholds ITAT order holding that amount give to PSWHMMS (an unregistered society) is the income of the assessee-society in terms of section 11(3)(d) by holding that the status of the donee-society is immaterial for the purposes of application of section 11(3), despite the CBDT circular itself differentiating between the societies as enumerated in section 11(3)(d) and other societies; Notes that assessee - society (working under the State Government) is registered u/s 12AA, ................. Click here to read and download HC judgment
2) HC: Mere cash credit entries in books of a firm cannot lead to addition u/s 68 – HC holds that assessee-firm only needs to prove the source of credit entries and is not required to prove the source of the source or the creditors' credit; Opines that “where a sum is credited in the books of account of a firm from a partner, the assessee firm could discharge its onus by providing three things: (i) identity of the creditor; (ii) creditworthiness of the creditor; and (iii) genuineness of transaction in question”; Explains that as per the provision of Section 68............. Click here to read and download HC judgment
3) HC: Power of Appellate Commissioner coterminous with that of ITO u/s 251 – HC holds that, power exercisable by CIT(A) u/s 251 cannot be restricted to only the issues raised by the assessee in any appeal before him, but Commissioner can exercise his discretion and do what the ITO does and further the section also empowers him to direct the AO to do what he had failed to do; Explains that the power of the Commissioner is not bridled in any way and the language of the section is plain and simple; Notes that CIT(A) deleted additions made by the AO and had made two additions .......... Click here to read and download HC judgment
4) ITAT: Sec. 50C(2) mandates reference to DVO for valuation of the property – ITAT holds valuation by District Valuation Officer (DVO) mandatory in terms of sec. 50C(2), sets aside the issue to AO for fresh adjudication after complying with the provisions of section 50C(2) by referring the valuation of the property to the DVO; AO invoked the provisions............. Click here to read and download ITAT order
5) ITAT: CIT(A) is bound to follow jurisdictional HC, allows Sec. 54 / 54F benefit for investment made in spouse name – ITAT holds that assessee’s jurisdiction and PAN being transferred to Delhi, jurisdiction lies with the Hon'ble Delhi High Court, follows decision reported in [TS-724-HC-2013(DEL)-O] of Delhi HC, being jurisdictional HC to grant exemption u/s. 54F towards investment in purchase of property in the name of his wife; Assessee on appeal submitted that the date on which appeal is filed would be material point of time for consideration jurisdiction; ITAT ......... Click here to read and download ITAT order
6) HC: CIT(A) has the power to decide stay petition, remands matter to CIT(A) for disposal with direction to revenue authorities “No coercive steps” against recovery – Assessee submitted that no stay petitions was filed before the AO, hence CIT(A) should not have directed to file stay petition before AO to get suitable remedy; HC considering Assessee`s submission remands the matter back to CIT(A) to dispose of stay petitions, notes that CIT(A) instead of exercising the discretion and power ......... Click here to read and download HC judgment
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Over 106700+ Income Tax Rulings reported across ITR, CTR, Taxman, DTR, ITD, TTJ, and ITR(Trib) and which also includes recent unreported handpicked ruling
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"
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To determine how business should prepare to take appropriate mitigating action, Sachin Kumar BP, (Partner Manohar Chowdhry & Associates) and Nitish Ranjan (Associate) discuss the unintended tax consequences for Foreign Portfolio investments and Private equity funds based in Mauritius or Singapore, in a situation where managers thereof are temporarily away from home country and are stranded in the host country (India). The authors' inter-alia suggest robust documentation of the employees details setting out the intention of the parties to be able to take support from the guidance by OECD to mitigate Service PE/POEM exposure.