Friday 16 October 2015
Seized Assets being Kishan Vikas Patras, Indira Vikas Patras, Fixed Deposit Receipts, etc.retained for more than 19 years after adjustement of tax. High Court directed to pay interest on aforesaid Kishan Vikas Patras, Indira Vikas Patras, Fixed Deposit Receipts, etc., at par with interest, which money would have earned, had investments revalidated/renewed been encashed by department- Chander Prakash Jain [2015] 62 taxmann.com 37 (Allahabad)
Where assesse made specific expenditure for exempt income and disallowed the same under R8D(iii) but AO following the general formula. Matter remended to AO to determine the expenditure incurred following Bombay High Court in Godrej & Boyce Mfg. 328 ITR 81- Microlabs Ltd [2015] 62 taxmann.com 60 (Bangalore - Trib.) MARCH 5, 2015
Where the interest-free funds far exceed the value of investments, it should be considered that investments have been made out of interest-free funds and no disallowance under section 14A towards any interest expenditure can be made following Reliance Utilities 313 ITR 340(Bom HC) and HDFC bank 366 ITR 505(Bom HC)[Para 42] - Microlabs Ltd [2015] 62 taxmann.com 60 (Bangalore - Trib.) MARCH 5, 2015
Disallowance u/s 14A computed with Rule 8D to be added to computation of book profits under Explanation I(f) “ amount of expenditure relatable to any income to which section 10…..apply”. Held by ITAT that it is same as “expenditure incurred by the assessee in relation to Income which does not form part of total income”. Assessee plea that Explanation 1(f) is very specific and only direct expenditure should be disallowed rejected following paras 29 and 30 of Shobha developers 58 taxmann.com 107(Bang.) - Microlabs Ltd [2015] 62 taxmann.com 60 (Bangalore - Trib.) MARCH 5, 2015
Product development charges are entitled to deduction@ 150% u/s 35(2AB). Sale of dossier entitling the buyer to marketing authorization and drug registration in their respective areas shall not be deducted from product development charges for claiming weighted deduction. It is different from sale of asset which is to be deducted from development charges under Guideline 5(vii) of DSIR [Para 13 to 18]- Microlabs Ltd [2015] 62 taxmann.com 60 (Bangalore - Trib.) MARCH 5, 2015
Partial revival of appeal in M.A. by ITAT against order u/s 263 decided on merits, allowing to plead the case on merits and not on invocability of S.263 itself held to be perverse-State Bank of India DECEMBER 17, 2014 [2015] 62 taxmann.com 67 (Bombay)
Order of ITAT for AY 2005-06 was
passed allowing order u/s 263 to redo assessment. There after for AY 2007-08,
another order u/s 263 was passed but this order decided merits of the case on withdrawl of deduction for provision on standard assets of the assessee bank. ITAT again decided the case against the assessee following its earlier order. The
assessee bank went in appeal u/s 260A before High Court. Meanwhile assessee
also applied for MA u/s 254(2) before ITAT against which partial revival of
appeal against withdrawl of deduction for provision on standard assets only was allowed,
which meant that ITAT did not allow assessee to challenge the invocability of
order u/s 263 itself. High Court reprimanded ITAT for partial revival of the appeal in
M.A.
In the field of biotechnology, license fee paid for acquiring genetic material for cereals, seeds, etc. along with right to future development and improvement and such technology would benefit assessee even after expiry of agreement period and even assessee could sell germplasm, a part of expenditure paid by assessee would be apportioned as capital expenditure. SC in Alembic Glass Company 177 ITR 377 had said that having regard to fast changing technology, there is not enduring benefit. However , Andhra Pradesh High Court in Advanta India Ltd pronounced on OCTOBER 9, 2015 [2015] 62 taxmann.com 223 (Andhra Pradesh) has found the Alembic Glass Company distinguishable.
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