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31.05.2014 - Voice of CA presents - Updates
Saturday, May 31, 2014
I. A Helpful Presentation:

[ Contribution by CA. Sanjay Agarwal, Founder - Voice of CA; and contributor is available at ]

"Various aspects of Taxability of Deemed Dividend
covered u/s 2(22)(e) of Income Tax Act, 1961

(Please click here)  


II.  Direct Tax Case Laws:

1.  Council For The Indian School, Certificate Examinations Vs. Director General of Income Tax, W.P. (C) No. 2184 of 2013, Date of Order: 23.05.2014, High Court of Delhi

Due to generation of incidental surplus by educational institution – exemption u/s 10(23C) will not be denied.

The assessee would be entitled to the approval under section 10(23C)(vi) of the Act, however if it was found that the funds of the assessee had not been utilized for its objects during the relevant year or had otherwise not complied with the provisos to the Section 10(23C) of the Act, the approval would be revoked at the end of the relevant year. Since, by virtue of its nature, the petitioner is entitled to an exemption, the same would also be available to the petitioner for the subsequent year(s). However the question whether the exemption is liable to be revoked would have to be considered at the end of the year after reviewing whether the petitioner had complied with the conditions imposed, inter alia, by the third proviso to Section 10(23C) of the Act. It is obvious from the aforesaid scheme that denial of exemption under section 10(23C)(vi) of the Act to an Institution which exists solely for educational purposes and not for profit, on account of non compliance with the third proviso would be limited to the relevant years during which the proviso has been violated.

(Please click here for judgment)

2.  Renoir Consulting Ltd. Vs. Deputy Director of Income Tax (International Taxation), ITA Nos. 4323 and 4125 (Mum.) of 2011, Date of Order: 11.04.2014, ITAT-Mumbai

If few places in India were at disposal of employees of foreign co, the same then deemed to have PE in India.

The Commissioner (Appeals) has inferred of the hotel/s, where the assessee's employees stayed, as also serving as their work place. The communications between them and the head office, which is again a part of their work, has again admittedly been carried out in India and, as stated, from a place in the vicinity of the place of the stay. Two, though to no effect, so that whether the communication has taken place from the hotel room through the medium of internet using laptops - a tangible asset/s, by the personnel, or similar facilities provided by the hotel or by a retail outlet providing such services is of little moment. Rather, the assessee's personnel are only working together in conjunction with the GPI task force, assigned whole time on the project in-as-much as the working of the task force in isolation or removed from the assessee's employees, except perhaps sparingly, makes little sense in the fitness and the scheme of things.

This is as the two have to work in tandem, complimenting each other. In fact, even working separately (as it in practice well be a combination of the two forms of work organization or guided by work imperatives), again only implies availability of a separate place/s at its disposal to the assessee's team. Secondly, as is apparent from the modus operandi to be adopted, the regular interviews, interactions, meetings, training sessions and seminars, etc., both by the consultants and the principal consultants, forming Tier I and Tier II of the assessee's teams deputed on the project, and which are admittedly and principally at the GPI's premises, is as much a part of the work undertaken by the assessee-company as is the independent collection, collation, analysis and review, etc. of the data/information being sought from the organization during any phase of the project management. That thus some place is at the disposal of the assessee or its employees during the entire period of the stay in India is, thus, manifest and eminent and follows unmistakably from the work nature/profile and the modus operandi followed. Therefore, it is clear that the assessee clearly has a PE in India during the relevant years.

(Please click here for judgment)

III. A Useful Judgment:

1. [Contribution by CA. Bimal Jain and contributor is available at]

Services provided to Foreign Principals for marketing their products in India qualify as an export of service 

(Please click here)


  IV. Today's Headlines:    

  1. Finmin may trim FY15 budgeted subsidy bill by 15-16% for fiscal fitness  (Click for detail)
  2. Tax dispute: Vodafone sends conciliatory signals  (Click for detail)
  3. Lower plan expenditure helps government compress budget gap  (Click for detail)
  4. New Global Revenue Accounting Rule to Impact Several Indian Companies  (Click for detail)
  5. Taxpayers want inflation to be factored in for IT exemption  (Click for detail)
  6. Tax notice: Don’t fret, take corrective steps  (Click for detail)
  7. IRDA’s e-insurance norms to be announced by June  (Click for detail)


 Golden Rules:

  "It is true that every effort is not converted into success
but it is equally true that success does not come without efforts


  Thanks & Regards


Voice of CA 

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