The eligible deduction under section 80IB for the assessment year under consideration has to be computed after setting off of the loss of the Goa unit for the earlier assessment year 2001- 02

Whether deemed dividend u/s 2(22)(e) of the Income-tax Act, 1961 can be assessed in the hands of a person other than a shareholder of the lender?
Whether the words "such shareholder" occurring in section 2(22)(e) refer to a shareholder who is both the "registered" shareholder and the "beneficial shareholder"?

Special Bench: Whether the services rendered by the assessees involved in these appeals, through their satellites for telecommunication or broadcasting, amount to 'secret process' or only 'process '?
Whether the term 'secret' appearing in the phrase 'secret formula or process' in Explanation 2 to section 9(l)(vi) and in the relevant article of the Treaties, will qualify the word 'process' also? If so, whether the services rendered through secret process only will be covered within the meaning of royalty?

AO is directed not to set off business loss or unabsorbed depreciation of non STPI Unit from the income of the STPI Unit for computing deduction u/s l0A
CIT(A) has erred in confirming that on site payments should be reduced for the purposes of arriving at the export turnover.

The addition of a sum of Rs. 10.65 crore under the head "Profit & gains of Business or Profession" u/s 28 of the Act-The assessee company had made a forfeiture of a sum of Rs. 10.65 crores claimed to be a loan received by the assessee company from erstwhile USSR based company M/s Soufintrade Company Ltd. , and credited the same to its Reserves & Surplus account in the balance sheet. This amount was utilized for issue of bonus share.

There is no reason as to why an 'Artist' in Sec. 80RR should be held to be applicable only to persons connected with the entertainment industry. Any creative work done in any field should be considered as an Artistic work and the person doing the same should be considered as an "Artist"

Special Bench: Whether in view of the provisions of Section 80-IA(9) read with Section 80IB(13), the deduction of income under Chapter VI-A can be allowed on the entire profit and gains of an undertaking or an enterprise of an assessee or it is to be allowed on such profit and gains as are reduced by the deduction claimed and allowed under section 80IB/80IA
deduction to be allowed under any other provision of Chapter VI-A with the heading ‘C’ is to be reduced by amount of deduction allowed u/s 80-IB/80-IA of the I.T. Act

AO was justified in including amount of service tax collected by assessee in connection with services or facilities or supply specified under section 44BB of the Act, provided by the assessee to ONGC, in the total receipts for the purpose of determining presumptive profit of 10 per cent under section 44BB of the Act.

Trading activities carried on by the assessee are of the assessee-company and not of the industrial undertaking, hence, the assessee is not entitled for deduction under section 80-IA of the Act on the profits thereon.

Whether the assessee is entitled to 100 per cent relief from payment of income-tax in view of the provisions of Article 8 of the DTAA between India and Brazil.
the assessee would not be entitled to any relief in respect of profits arising from transportation of cargo through feeder vessels. The assessee would be entitled to relief in respect of freight attributable to the voyage between Durban to destination in sub-continent of America to the extent the assessee proves that goods were transported through the mother vessels owned/leased/chartered by the members of consortium.

we are not persuaded to accept this argument that if there is a receipt of dividend by one enterprise from the other associated enterprise, which is chargeable to tax in India, then the application of the transfer pricing provisions should be ruled out to that extent as that will amount to double taxation. The intention of the Legislature, as interpreted by us, becomes further clear when we view the second proviso to section 92C(3), which also applies to section 92CA by virtue of sub-section (4), providing for not allowing deduction under section 10A or 10AA or 10B or under Chapter VI-A in respect of the amount of income by which the total income of the assessee is enhanced after computation of income under this sub-section. We, therefore, reject this contention.

The contention of the assessee regarding allowability of foreseeable loss is accepted in principle, However, the issue is restored to the file of AO for the purpose of quantification and calculation of the said loss in terms of Accounting Standard -7, as the same has not been done.

Whether CIT (Appeals) erred in confirming the order of the Assessing Officer denying deduction under section 80-IB of the Income-tax Act, 1961 claimed by the appellant in respect of its eligible Wire Logging Units.

CIT has grossly erred in invoking the provisions of section 263 of the Income-tax Act, 1961 and thereby directing the AO to consider issue of disallowance of proportionate expenditure under section 14A of the Income-tax Act, 1961 allegedly relating to the dividend income earned by the appellant during the year

Tribunal cannot examine validity of action of search u/s. 132(1) of Act-Merely because common panchanama was prepared it cannot be said that search was invalid.

the inland haulage charges earned by the assessee are covered within the scope of ‘income derived from the operation of ships in the international traffic’ as per Article 8 of the DTAA between India and Belgium and hence cannot be subjected to tax in India

the payment made by the assessee-company to VSNL, MTNL and other concerns for availing the services of the bandwidth net work infrastructure cannot be said to be technical services within the meaning of section 194J of the Act read with Explanation 2 to clause (vii) of section 9(1) of the Act.

provision for warranty is an allowable expenditure and such provision is not a contingent expenditure-In case the funds were available from the EOU and have been utilized for the other undertaking, then such interest derived on notional basis cannot be considered for the purpose of deduction u/s 10B.

provisions of section 44DA cannot be said to be clarificatory. the provisions of section 44DA of the Act are to be construed prospectively and cannot be given retrospective effect
whether the assessee is entitled to deduction in respect of expenses incurred by non-resident assessee through its PE in India while computing the income by way of royalty or fees for technical services in view of the provisions of Article 7(3) of DTAA between India and Germany

Whether the vehicles hired by the assessee in execution of the transport contract can be termed as a "Sub-contract” and consequently the assessee is liable to deduct tax from the payment made for such vehicles u/s 194C(2) of the Act-the assessee is not liable to deduct tax at source, as per the provisions of section 194C(2), on the payments made to the lorry owners for lorry hire. Consequently, the provisions of section 40(a)(ia) shall not apply to such payments.

Special Bench: the question, whether disallowance u/s. 14A of the I.T. Act can be made in a year in which no exempt income has been earned or received by the assessee, is answered affirmatively against the assessee and in favour of the Revenue.

Special Bench: the loss incurred on account of futures and options are speculative in nature and cannot be regarded as business loss.
the derivative transactions entered into by the appellant in the form of futures and options are not covered under the provisions of section 43(5) of the Act hence the said transactions cannot be considered as speculative transactions.
clause (d) of See. 43(5) is prospective in nature and will be effective from the date from which the Legislature made it effective, i.e. 1/4/2006 and will be applicable to assessment year 2006-07 onwards.

the premium of Rs. 34,62,952 paid by the firm in respect of insurance policy on the lives of the partners under Keyman Insurance Policy was allowable deduction under section 37(1) of the Income-tax Act

As could be noticed from the stock option plan and the terms of RBI, no payment was made by the assessee nor exercised the right to purchase shares before 13th. August, 1992 and thus, so far as the assessee is concerned, there is no cost of acquisition to the assessee in which event, by applying the decision of B.C. Srinivasa Setty, the amount received is not liable to tax under the head "Income from capital gains". Even if it is assumed that the market value of the share is the benefit given to the assessee, such benefit can be said to accrue to the assessee only on the date of exercise of the option. In the instant case, the date of exercise of option as well as the date of sale is same and thus there is no difference between the deemed cost of acquisition and the actual price realized by the assessee and thus the learned CIT (A) was not justified in directing the AO to bring to tax the amount of Rs.5,44.925/- as short term capital gain.

the amount received by the assessee under the license agreement for allowing use of the software was not 'royalty' either under the Income-tax Act or under DTAA.-the other receipts on account of maintenance charges and training fees being incidental to the software receipts assume the same character as that of software receipts and the same are liable to be taxed accordingly

Special Bench: insertion of Rule 13E in the I.T.A.T. (Recruitment and Conditions of Service) Rules, 1963, vide Notification No. GSR 389E dated 3-6-2009 prohibiting Retired ITAT President, Vice-President and members to appear before ITAT-No doubt the Ministry, as it were, built a nice palace so that all of us in the ITAT could lead a happy and blissful life hereafter, used strong bricks, good cement and ISI marked steel but they built, in our view, on a loose soil or sandy bed or say without taking ecological clearance. The palace so built, although of strong structural components, is likely to crumble. The same is true here. We were very anxious to apply the ratio laid in P.C. Jain’s case (supra) but refrained or shown caution because the base on which our palace is built is different from the one appreciated by the Delhi High Court. We can only accept the reality and envy our neighbours in the CESTAT.

block assessment confirmed by the AO was bad in law inasmuch as it was passed beyond the period of limitation prescribed under section 158BE of the Act.

The revision u/s 263 is not like the reopening of the assessment where once the assessment is reopened entire assessment is open before the AO to be reconsidered in accordance with law. In the revision proceedings, the CIT cannot travel beyond the reasons given by him for revision in the show cause notice. Therefore, we hold that the revision on the ground that part of the sale proceeds is yet to be received by the assessee is not tenable

Special Bench: Whether the entire amount received on sale of DEPB entitlements represents profit chargeable under section 28(iiid) of the Income Tax Act or the profit referred to therein requires any artificial cost to be interpolated

a plain reading of Section 12AA(3) would indicate that a registration granted under Section 12 AA can only be withdrawn when the Commissioner is satisfied that (a) the activities of the trust or the institution are not ‘genuine’; or (b) the activities of the assessee are not being carried out in accordance with the objects of the trust or the institution. There cannot be any other legally sustainable reasons for cancelling or withdrawing the registration granted under Section 12 AA

For bringing out Euro issues, RIL employed the services of some non-resident Lead Managers viz. Morgan Stanley, a US based Company for assisting it in all aspects of consultancy for preparing documents connected with bringing out the issue-whether there was failure to deduct tax at source under section 195 of the Act for which the assessee could be deemed to be in default under section 201(1) of the Act and consequently the demand could be raised against the assessee along with interest u/s. 201(1A) of the Act.

A perusal of article 5(2)(1) clearly shows that it is not only the employees through whom if services are provided the PE is to set to come into existence. It also includes other personnel. Obviously, the term other personnel has to be read with reference to the earlier words as provided in the said article 5(2)(1). The other personnel specified here would be persons over whom the enterprise would be having a control. In the present case undisputedly employees of the affiliates of the assessee had been employed through LTIL the services of installation, commissioning, testing and bringing up to operation of the hardware and the software sold by the assessee to Escotel through its contract in regard to GSM project to be completed on a turnkey basis. These employees of the affiliates over whom the assessee has a control would fall within the term “other personnel” and consequently, it would have to be held that a PE did exist as per the inclusive term as provided in article 5(2)(1) of the DTAA between USA and India. A copy of the returns of the expatriates which have been placed in the paper book also clearly show that they have been in India for more than 90 days within the 12 month period from April, 1996 to March, 1997. Consequently, the terms of article 5(2)(1)(i) of the DTAA between USA and India are fulfilled. Consequently, it would have to be held that LTIL in fact was a service PE of the assessee.

CIT(A) was right in allowing deduction, from salary income of the assessee chargeable to tax in India, on account of social security contribution paid by the assessee in his home country
hypothetical tax is to be reduced from the tax perquisite to the employees and not from the basic salary

For how many years the carry forward is allowable u/s 115 JAA(3) of the Act?
There is no ambiguity in the language of sub-section (3) of 115JAA. The carry forward is available for a total of six (1+5) years. It appears that the above confusion has arisen because of the language used in the CBDT Circular No. 763 dated 18.2.1998

the Barge was not used for the purpose of the business during the whole year as it met with an accident and was non operational nor was sent for any repairs.
The block of assets has also been defined to include the group of assets falling with the same class of assets. Hence, after the amendment with effect from 01.04.1988, the individual assets have lost its identity and for the purpose of allowing of depreciation, only the block of assets has to be considered. If a block of assets is owned by the assessee and used for the purpose of business, depreciation will be allowed. Therefore, the test of user has to be applied upon the block as a whole instead of upon an individual asset.

A sum of Rs.2,20,36,235/- had not been received by the assessee in convertible foreign exchange within six months from the end of the previous year- AO was of the view that the assessee has failed to fulfill the condition under section 10A(3) of the Act, to qualify for exemption in respect of the said turnover.
The assessee having applied for extension and having completed all the formalities; and in response the Reserve Bank of India having taken the remittances on record, the non-issue of a formal letter for approval, in our view, cannot be held against the assessee for none of its faults. The assessee having applied for extension and the same having been impliedly granted in substance, the benefit of section 10A has got to be allowed to the assessee on the ground that the extension is deemed to have been granted

the AO as well as the CIT(A) were wrong in coming to a conclusion that the assessee is not entitled to deduction u/s 80-O on the ground that it has only deputed certain personnel for working in the foreign enterprises.
even a promise to render services at a future date would entitle the assessee for deduction u/s 80-O in view of the specific wordings in the section.

VSAT up linking charges paid by the assessee company to its parent company were not in the nature of fees for technical services and the same being not liable for deduction of tax at source, the disallowance made by the AO by invoking the provisions of Section 40(a)(i) was not sustainable. Similarly, we are of the view that the amount paid by the assessee company to its parent company on account of reimbursement of expenditure incurred in respect of global accounts manager cannot be treated as payment of salary so as to attract the deduction of tax at source

CIT(A) erred in confirming the order of the ITO(TDS) 3(4), Mumbai (“the Assessing Officer") thereby treating the expenditure incurred on transport facility given to the employees of the Appellant company as drop and pick up facility from nearest railway station to office/ residence of employees to office and vice versa, in addition to monthly transport allowance of Rs. 800/ - per month, as “perquisites" in the hand of employees and thereby holding that the appellant is liable to deduct tax at source on such perquisite granted to its employees