Even existence of a computer server amounts to existence of a PE

 A place of business means all tangible assets (e.g., premises, facilities, machinery or equipment or installations) used for carrying on the business, whether or not they are exclusively used for business purpose; para 17 of the Model Commentary states that a PE may exist if the business of the enterprise is carried on mainly through automatic equipment and the activities of the personnel are restricted to setting up, operating, controlling and maintaining such equipment; thus, even existence of a computer server amounts to existence of a PE within a jurisdiction-18 taxmann.com 171 (AAR - New Delhi) AUTHORITY FOR ADVANCE RULINGS (INCOME TAX), NEW DELHI AREVA T&D India Ltd.,(7-2-2012)

Sale of Software- Whether Royalty

Determination of question raised above is crucial in the context that if sale of software is held not royalty then if non resident does not have any PE in India, no income can be said to accrue or arise in India u/s9 and hence non resident is not taxable in India.
But if sale of software  is held to be royalty, income shall be deemed to accrue or arise in India if payment is made by resident and software is used for the business or profession in India, even if non resident does not have PE in India

Cost Inflation Indexation in case of Gift, inheritance etc.

 Held in [2012] 18 taxmann.com 261 (Delhi) HIGH COURT OF DELHI Arun ShunglooTrust (13-2-2012): Benefit of indexed cost of inflation is given to ensure that the taxpayer pays capital gain tax on the 'real' or actual gain and not on the increase in the capital value of the property due to inflation; this is the object or purpose in allowing benefit of indexed cost of improvement, even if the improvement was by the previous owner in cases covered by section 49; accordingly, there is no justification or reason to not allow the benefit of indexation to the cost of acquisition in cases covered by section 49; this is not the legislative intent behind clause (iii) of Explanation to section 48 of the Act

The expression 'held by the assessee' used in Explanation (iii) to section 48 has to be understood in the context and harmoniously with other sections; the term 'held by the assessee' should be interpreted to include the period during which the property was held by the previous owner

Calculation of time limit for 54EC Bonds liberally construed- 6 months to be calculated from date of receipt of consideration

Held in Chanchal Kumar Sircar [2012] 18 taxmann.com 304 (Kolkata - Trib.):
Where property is sold by assessee under a transaction ('deemed transfer') covered by section 53A of Transfer of Property Act, possession handed over to buyer on execution of agreement against part payment and balance payment received after 6 months on registration of property, period of six months for making deposit under section 54EC of the Act should be reckoned from dates of actual receipt of consideration; if period is reckoned from date of agreement and receipt of part payment at first instance, then it would lead to an impossible situation by asking assessee to invest money in specified asset before actual receipt of same; this is based on High Court decisions in the context of sections 54E, 54B, 54EA and 54EB which are similarly worded as section 54EC

TDS on Commission Income of non resident for services outside India

Held in SKF Boilers & Driers (P.) Ltd. by AAR (dtd 22-02-2012):18 taxmann.com325

 Fact that agents have rendered services abroad in form of soliciting orders and commission is to be remitted to them abroad are wholly irrelevant for purpose of determining situs of their income; income arising on account of commission payable to two agents is deemed to accrue and arise in India, and is taxable under the Income-tax Act in view of specific provision of section 5(2)(b) read with section 9(1)(i); provision of section 195 would apply, and rate of tax will be as provided under Finance Act for relevant year

Fee for freight and logistics is not fee for technical services under s. 9

Held by ITAT Mumbai in UPS SCS Asia Ltd. (dtd 22-02-2012)

Freight and logistics services (such as transport, procurement, customs clearance, sorting, delivery, warehousing, pick up) do not fall within the ambit of 'managerial, technical or consultancy services' which fall within definition of 'fees for technical services' in Explanation 2 to section 9(1)(vii)

Service tax on pre closure charges and commitment charges

As per LETTER [F.NO. 137/62/2011 - SERVICE TAX], DATED 21-10-2011, relating to commitment charges and LETTER F.NO. 345/6/2008-TRU, DATED 11-6-2008 relating to pre closure charges, CBEC has opined that they are not in nature of interest and in nature of service, there fore service tax to be charged.

Non resident having liasion office

As per section 285 introduced by Finance Act w.e.f. 01-06-2011
Every person, being a non-resident having a liaison office in India set up in accordance with the guidelines issued by the Reserve Bank of India under the Foreign Exchange Management Act, 1999 (42 of 1999), shall, in respect of its activities in a financial year, prepare and deliver or cause to be delivered to the Assessing Officer having jurisdiction, within sixty days from the end of such financial year, a statement in such form and containing such particulars as may be prescribed


The form 49C has been provided vide notification dtd 6-2-2012 by inserting new rule 114DA  which also required certification of F. 49C by chartered accountant or by person authorized by non resident