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III. Direct Taxes Case Laws:
1. DCIT Vs. D.R.S. Warehousing (North) I.T.A. No. 4354/DEL/2012 Date of Pronouncement: 16.12.2015, ITAT-Delhi
Whether
the act of the AO of treating the warehousing receipts as rental income
where assessee is in business of constructed warehouses for warehousing
purposes, justified.
Held_No
The
assessee is engaged in business of warehousing and treated warehousing
charges received as business receipts. Whereas, the Ld. AO has contended
that warehousing receipts are “Income from house property”. The CIT
(A) has held that since the income was earned by exploitation of
commercial assets in form of warehouse treated as business income.
The
Hon’ble Supreme Court has held “circumstances of the case in respect of
letting of the properties has to be determined first” (Chennai
Properties & Investments Ltd. vs. CIT Civil Appeal No. 4494 of
2004). In the case of assessee the ITAT by following principle arising
out of the above judicial pronouncement, held that since leasing of
warehouses is the primary business of the assessee, it has rightly
treated the warehousing receipts as business receipts.
(Please click here for judgment)
2. OSRAM India Pvt. Ltd. Vs. DCIT, I.T.A. No. 4052/Del./2015 Date of Pronouncement: 29.12.2015, ITAT-Delhi
Whether
education cess can be levied in respect of tax liability computed at
rate specified under DTAA entered by India with Germany, China and USA.
Held_No
In
brief, the assessee deducted TDS @ 10% on payment made to non-resident.
Whereas, the AO has raised the demand @ 10.30% by contending that
education cess @ 3% in addition to tax rates prescribed in DTAA entered
by India with Germany, China and the United States of America (USA)
should be treated as liability. The Ld. CIT (A) also upheld the same.
Hon’ble
ITAT has placed reliance on DIC Asia Pacific Pte Ltd. v. Asstt. DIT (IT)
[2012] 52 SOT 447 (Kol.) in which it was held that as per Article 2(1)
of the applicable tax treaty provides that the taxes covered shall
include tax and surcharge thereon and concluded that education cess is
nothing but an additional surcharge, it is only thereto induction that
the education cess will also be covered by the scope of Article 2, more
over the provisions of Article 11 and 12 must find precedence over the
provisions of the IT Act and restrict the taxability, whether in respect
of income tax or surcharge or additional surcharge-whatever name
called, at the rates specified in the respective article. In the result
appeal of the assessee is allowed.
Case referred:
(Please click here for judgment)
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