|
II. Useful Case Laws:
1. CIT Vs. Wipro Finance Ltd., IT Appeal No. 106 of 2007, Date of Order: 07-01-2013, High court of Karnataka
Notional loss can be claimed in case of computation of income on notional basis
Supreme Court in the case of CIT v. Woodward Governor India (P.) Ltd. [2009] 312 ITR 254 held that even a notional loss can be claimed by way of a business loss and as a deductible item in computing the income of the assessee for the year, as it is a computation on notional basis, it is made dependent on the manner of conduct of the assessee in respect of the earlier assessment period and particularly as to the assessee has been following this uniformly over a period of years and the test being when there was a notional gain as to whether it had been offered for tax etc. The Supreme Court took the view that such claim can be entertained subject to fulfilment of the following six conditions:
(i) whether the system of accounting followed by the assessee is the mercantile system, which brings into debit the expenditure amount for which a legal liability has been incurred before it is actually disbursed and brings into credit what is due, immediately it becomes due and before it is actually received;
(ii) whether the same system is followed by the assessee from the very beginning and if there was a change in the system, whether the change was bona fide; (iii) whether the assessee has given the same treatment to losses claimed to have accrued and to the gains that may accrue to it; (iv) whether the assessee has been consistent and definite in making entries in the account books in respect of losses and gains; (v) whether the method adopted by the assessee for making entries in the books both in respect of losses and gains is as per nationally accepted accounting standards; (vi) whether the system adopted by the assessee is fair and reasonable or is adopted only with a view to reducing the incidence of taxation.
(Please click here for judgment)
2. Integra Micro Software Services (P) Ltd. Vs. Commissioner of Service Tax, Appeal No. ST/701 & 2291 of 2010, Date of Decision : 7/9/2011, CESTAT- Bangalore
Development of software through modification and upgradation of same based on shortcomings pointed out by clients, would prima facie, be covered under 'Information Technology software service'
(Please click here for judgment)
|
New User? 
Subscribe Now