International Tax

ITAT: Estimated Loss on construction project under AS-7 deductible on 'proportionate' basis

Estimated future losses on ‘entire construction project’ not allowable as deduction in full, only ‘proportionate’ losses commensurate to the stage of completion deductible; AS-7 not binding on AO:  

Nov 03,2011

ITAT: No PE for assets leased by non-resident & delivered outside India

A non-resident lessor does not have PE in India on account of leased assets, used in India but delivered outside India and since lease agreement entered on principle to principle

Nov 01,2011

HC: No PE since specific provision in DTAA prevails over general provision 

Mere existence of office in India did not create a PE under Article 5(2) of Indo-Netherlands DTAA; Article 5(3) being special provision would prevail over Article 5(2): PE did not

Oct 25,2011

HC: Reopening of assessment based on documents impounded during survey valid

HC dismisses writ petition challenging reopening of assessment; Documents impounded during survey constituted 'tangible material' to initiate reassessment proceedings

Oct 24,2011

HC: Sec 271(1)(c) not attracted merely because of subsequent adverse HC decision

HC deletes Sec 271(1)(c) penalty on income addition from development agreement transfer; Tax position as on date of filing of return supported by ITAT judgment; Subsequent HC decision in case

Oct 21,2011

HC: Sec 54 exemption allowable if new house purchased before due date of belated tax return

Exemption u/s 54 from capital gains available even if the investment in new house property is made before due date of filing belated tax return u/s 139(4); Assessee not required

Oct 20,2011

HC: Exemption u/s 54 & 54EC from capital gains available despite investment in joint name with spouse

Full exemption under Sec 54 & 54 EC from capital gains available though investment made in joint name with spouse; Investment in new house property & specified bonds wholly funded

Oct 19,2011

AAR: Cites McDowell, Ramsay principles; Holds part compensation on Satyam legal suit settlement taxable as royalty

Compensation towards damages, on account of assignment of imperfect title in patent and cost of litigation, is ‘capital receipt’ not subject to tax; payment for use of patent in software

Oct 18,2011

ITAT: Loss carry forward cannot be denied u/s 79 upon share transfer by 'Subscribers to Memorandum'

Benefit of carry forward of losses cannot be denied  u/s 79 upon transfer of shares by subscribers to 'Memorandum of Association; Transfer by initial subscribers does not result in 'change in shareholding' for the purpose

Oct 18,2011

ITAT: Subvention payment received by subsidiary from parent company not ‘income’

Subvention money received by subsidiary from parent company, for recoupment of losses, to be treated as capital receipt

Oct 17,2011