I.  Whats New: 

• Last date for submission online MEF extended upto 31st August and for declaration upto 10th September 2012.

• IT Notification No. 30-Section 90 of the Income-tax Act, 1961 – Double Taxation Agreement – Agreement for Exchange  (Click for detail)

• I-T to press laundering charges in HSBC case  (Click for detail)

• Government asks state-owned banks to ensure one account per family (Click for detail)

• Assessment Test for Certificate Course on Indirect Taxes completed on or before August 25, 2012  (Click for detail)

 II.  Useful Case laws:

1.   ICICI Home Finance Co. Ltd. Vs. ACIT, Writ petition No. 430 OF 2012, Dated: 20.07.2012, High Court of Bombay

An initiation of reopening assessment u/s 147 on the basis of audit objection that income has escaped from assessment is void.

The belief u/s 147 that income has escaped assessment has to be the reasonable belief of the AO himself and cannot be an opinion and/or belief of some other authority. The AO cannot blindly follow the opinion of an audit authority for the purpose of arriving at a belief that income has escaped assessment. On facts, the recorded reasons are identical to the objection of the audit authority. The reasons do not rely upon any tangible material in the audit report but merely upon an opinion and the existing material already on record. This itself indicates that there was no independent application of mind by the AO before he issued the section 148 notice (India Eastern Newspaper Society 119 ITR 996 (SC) followed).

(Please Click here for judgment)

2.   ADIT Vs. M/s BHEL-GE-Gas Turbine Servicing (P)Ltd., ITA No. 976/Hyd/2011, Date of Pronouncement: 31.07.2012, ITAT- Hyderabad

Fees for “routine technical repairs” not assessable as “fees for technical services”

Facts of case:

The assessee paid sums to foreign parties for repairing and refurbishment of equipment. The AO held that the payments constituted “fees for technical services” u/s 9(1)(vii) and that the assessee ought to have deducted TDS u/s 195 r.w.s. 201 though the assessee argued that as there was no intellectual aspect involved in the repairs and refurbishment activity, it was no assessable as “fees for technical services”. The CIT (A) allowed the claim. On appeal by the department to the Tribunal, HELD dismissing the appeal.

Held:

The activities carried out by the foreign parties involved assembly, disassembly, inspection, reporting and evaluation. These are routine maintenance repairs and do not involve services of technical nature so as to be assessable as “fees for technical services” u/s 9(1)(vii). Routine repairs do not constitute ‘FTS’ as they are merely repair works and not technical services. Technical repairs are different from ‘technical services’ (Lufthansa Cargo 274 ITR (AT) 20 (Del) followed.

(Please Click here for judgment)
 

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