International Tax

HC: STP unit’s profits for Sec 10A relief to be computed before adjusting loss and depreciation

Brought forward business losses & unabsorbed depreciation not to be adjusted in computing profits eligible for Sec 10A relief (which is an undertaking specific benefit); Sec 10A an exemption section

Nov 07,2011

HC: Software expenses deductible as revenue expenditure

Expenditure incurred for use of software in order to run business more efficiently, allowable as revenue expenditure; Test of ‘enduring benefit’ not conclusive for determining the nature of expenditure; Legitimate claim for

Nov 07,2011

HC: Expenditure for use of software, allowable as revenue expenditure

  Expenditure incurred for acquiring license to use software application as well as making improvements in respect of leasehold premises, allowable as revenue expenditure

Nov 07,2011

SC: For MAT computation, deduction u/s 80HHE to be based on book profit, not 'tax profits'

While computing MAT profit, reduction for ‘benefit u/s 80HHE’ to be computed based on ‘book profit’ and not ‘income-tax profit’ under normal provisions:SC 

Nov 04,2011

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

SC: AO not justified in adding back provision for doubtful debts in net profit

AO did not have jurisdiction to go beyond net profits shown in the P&L a/c except as per explanation to sec 115J; AO not justified in adding back provision for

Nov 02,2011

SC: Sale consideration of mortgaged property to include amount for redemption and discharge

Consideration for sale of mortgaged property to include amount for redemption and discharge: Supreme Court

Nov 02,2011

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