CASE LAWS
2016-TII-12-HC-KAR-INTL
DIT Vs CEPHA IMAGING PVT LTD: KARNATAKA HIGH COURT (Dated: February 22, 2016)
Income Tax - Keywords - Circular No. 21/2015 - monetary limit.
Whether appeal filed by the department before the HC is not maintainable, when subject of tax liability is less than Rs. 20 lakhs - YES: HC
Revenue's appeal dismissed
2016-TII-11-HC-MAD-INTL
CIT Vs FARIDA LEATHER COMPANY: MADRAS HIGH COURT (Dated: January 20, 2016)
Income tax - Sections 9(1)(vii), 40(a)(i) & 195.
Keywords - commission - foreign agents - fees for technical services - FTS - procuring orders & TDS obligation.
Whether merely because a person has not deducted TDS on a remittance abroad, it cannot be inferred that the person making the remittance, has committed a default in discharging his tax withholding obligations - YES: HC
Whether the tax withholding liability of the payer is inherently a vicarious liability on behalf of the receipient and therefore, when the foreign agent does not have the primary liability to be taxed in respect of income embedded in the receipt, the vicarious liability of the payer to deduct tax does not arise - YES: HC
Whether this vicarious tax withholding liability cannot be invoked, unless primary tax liability of the recipent/foreign agent is established - YES: HC
Whether the AO can proceed on the basis that the payer has an obligation to deduct TDS, just because the payer has not obtained a specified declaration from the Revenue Authorities to the effect that the recipent is not liable to be taxed in India, in respect of the income embedded in the particular payment - YES: HC
Whether sourcing orders abroad, for which payments have been made directly to the non-residents abroad, which does not involve any technical knowledge or assistance in technical operations, can be construed as "fees for technical services" - NO: HC
Revenue's appeal dismissed
2016-TII-44-ITAT-MUM-INTL
MORGAN STANLEY MAURITIUS COMPANY LTD Vs DCIT: MUMBAI ITAT (Dated: January 29, 2016)
Income tax - Sections 2(28A) & 115AD.
Keywords - capital gain - delay in process of buy-back of shares - interest income - penal interest - sale consideration & SEBI regulations.
Whether additional sale consideration received by assessee from a non-resident entity in relation to buy-back of shares of a particular company in pursuence of a scheme prescribed under SEBI regulations, for delay in the process of such buy-back, can be treated as 'penal interest' and taxed @ 41.82% - NO: ITAT
Assessee's appeal allowed