Bulletin No.A131 dated 05 October 2021

BULLETIN(Issue No.131)DT.10-05-2021

Compiled by Vinod Kumar Goel, Advocate

CASE LAWS

Deputy Commissioner of Income Vs. Pepsi Foods Ltd. [2021] 126 taxmann.com 69 (SC)

Third proviso to Section 254(2A), introduced by Finance Act, 2008, resulting in automatic vacation of a stay upon expiry of 365 days even if delay in disposing of appeal is not attributable to assessee, would be both arbitrary and discriminatory and, therefore, liable to be struck down as offending Article 14 of Constitution of India.

R.K. Associates Vs. Income Tax Officer, Ward-2(2)(3), Bengaluru [2021] 126 taxmann.com 19 (Bangaluru-Trib.)

Section 40(a)(ia), read with section 194H, of the Income-tax Act, 1961 - Business disallowance - Interest, etc., paid to resident without deduction of tax at source (General) - Assessment year 2006-07 - Whether provisions of section 40(a)(ia) are applicable while computing income chargeable under head "profits and gains of business or profession" and same are not applicable to any other heads of income - Held, yes - Assessee sold a immovable property and declared Long-Term Capital Gain (LTCG) on same - Assessee had paid commission of certain amount in connection with sale of said property - Assessing Officer noted that assessee did not deduct tax at source under section 194H on such commission paid, thus, he made disallowance under section 40(a)(ia) - Whether provisions of section 40(a)(ia) would not be applicable while computing income under head "capital gain" and, therefore, impugned disallowance made under section 40(a)(ia) was to be deleted - Held, yes [Paras 9 and 10] [In favour of assessee]

Dodla International Ltd. Vs. ACIT Corporate, Range-1, Chennai [2021] 125 taxmann.com 339 (Chennai -Trib.)

Section 28(i), read with section 22, of the Income-tax Act, 1961 - Business income - Chargeable as (License fee) - Assessment year 2014-15 - Whether license fee received by assessee engaged in business of running a hotel, for licensing a fully furnished hotel along with license to run hotel is a business receipt, which is assessable under head 'income from business or profession' but not a rental income, assessable under head 'income from house property' - Held, yes [Para 9] [In favour of assessee]

Dr. S. Muthian Vs. Assistant Commissioner of Income Tax, Salary Circle-V, Chennai [2021] 124 taxmann.com 339 (Madras -Trib.)

Where assessee employee of Google India returned income under perks and amenities and because of NOR status, claimed deduction on account of income on sale of stock option being income arising out of India, but Assessing Officer while processing return under section 143(1) included income from sale of stock options as income of assessee as then employer included it in taxable income and deducted TDS from same, since assessee submitted particulars of his stay at USA preceding to assessment year with a copy of passport to prove his residential status and NOR status and purchase of stock option of assessee was mixed question of fact and law, in interest of justice, in order to give one more opportunity to assessee, matter be remitted back to Assessing Officer.

UHDE India (P.) Ltd. Vs. Additional Commissioner of Income Tax, 10(3), Mumbai [2021] 125 taxmann.com 281 (Mumbai -Trib.)

Whether where assessee engaged in business of supply of processes; designing, construction etc., was following consistent method of accounting to recognize revenue under these contracts and percentage of completion of project had been worked out as per total cost incurred on project to date vis-à-vis total budgeted cost and that fraction was applied to contract value for purpose of revenue recognition and similar formulae had been adopted by assessee in preceding two years which had been accepted by revenue, no case of revenue leakage having been established, additions made by revenue, under circumstances, would not be sustainable

Navnidhi Dyeing And Printing Mills (P.) Ltd. Vs. Assistant Commissioner of Income Tax, Circle 1(1)(2), Gujarat [2021] 125 taxmann.com 365 (Gujarat -Trib.)

For mere verification or for a fishing inquiry re-opening of assessment is not permissible, however, where there was tangible material as on date in hands of Assessing Officer that assessee had received shareholders funds from shell companies, and Assessing Officer, after due application of mind, had recorded a satisfaction of his own that income had escaped assessment, reopening of assessment was justified.

Uber India Systems (P.) Ltd. Vs. Joint Commissioner of Income Tax (TDS) (OSD)-2(3), Mumbai [2021] 125 taxmann.com 185 (Mumbai -Trib.)

Uber India could not be held liable to pay TDS for Payments to Driver Partners as-

• Uber Technologies Inc. had granted a license of Uber App to a company incorporated in Netherlands namely, Uber B.V., which had been granted right to operate Uber App worldwide including in India. Role of Uber India was limited to act as a payment and collection service provider of Uber B.V. whereby ride fare was collected by Uber India in its bank account on behalf of Uber B.V. and thereafter payments were made, on instruction of Uber B.V., to Driver-Partners.
• Uber B.V. was neither responsible for providing transportation service nor any liability arising out of transportation service provided by Driver-Partners. Transportation service provided by Driver-Partner to Users was a contract between them to which Uber B.V. was not a party. For providing lead generation service, Driver-Partner pays a percentage of ride fare as a service fee to Uber B.V. Therefore, it is clear that Uber India was not a part of contract and no payment obligation was imposed either under agreement with Driver-Partner or under agreement with User.

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