This document provides a summary of recent legal landmarks in India. It lists 6 key cases or rulings with details including the authority, sections of law, and key ratio or ruling. Case 1 discusses capital gains tax treatment of assets held over 12 months. Case 2 addresses what qualifies as "manufacturing" for claiming tax deductions. Case 3 discusses tax treatment of retirement benefits received from overseas employment. Case 4 addresses whether income can be taxed under both domestic law and a tax treaty. Case 5 concerns whether fees received for software design qualify as royalties under a tax treaty. Case 6 discusses interest income tax exemption eligibility. The document is from a consulting firm providing an update on these legal rulings to a client.

1. VOLUME NO.: LLAT/ 487 OF 2011-12 DATE: 14th May, 2012
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Dear Client,
We have pleasure in listing below some of the recent legal landmarks.
SR. AUTHORITY SECTION / RULES / RATIO(S)
NO. CITATIONS SUBJECT CASE(NAME OF ASSESSEE)
1.1 Del HC 2, ITA An asset acquired on the 1st of January would complete 12
months at the end of the said year, i.e., on 31st of December
and if it is sold next year and if the proviso to S.2(42A) applies,
it would be treated as a long term capital gains.
1.2 20 TM 762 Cap. Gain Bharti Gupta Ramola
2.1 Pune ITAT 80-IB, 263 The “a”s business of blending of various teas of different kinds
amounted to "manufacturing" and therefore, the “a” was
entitled to the benefits of S. 80-IB.
2.2 20 TM 767 Deduction Sonrise Tea Processing Company
3.1 Del HC 9, ITA The payment in question was received towards retirement
benefit/severance/vacation engagement from the erstwhile
employer on termination of employment rendered in the USA.
In view of the aforesaid factual position the said amount can be
taxed in India, as the status of the respondent-”a” during the
year in question was that of “not ordinary resident”. The said
income did not accrue or arise in India.
3.2 2012-TII-15 DTAA Anant Jain
4.1 Bang ITAT 92, ITA (a) Income for the same year cannot be charged both under
section 115A and Article 12 of the DTAA and (b) Once the
provisions of either the Act or the DTAA are found beneficial to
the “a”, the same would govern the tax computation without
splitting the income into different segments or sources.
4.2 2012-TII-41 ALP IBM World Trade Corporation
5.1 Mad ITAT 9, ITA The fees received for designing of the management tool called
Balance Score Card (BSC) will definitely fall within the
definition of “fees for technical services” taxable under DTT
between India and Singapore. No doubt, both the A.O. as well
as DRP fell in error in treating the software independently and
considering a part of the amounts received by the “a” as
royalty.
5.2 2012-TII-42 DTAA Organisation Development PTE
6.1 Bang ITAT 10A, ITA Interest income earned by 'A' on fix deposit which where kept
as margin money for running the business smoothly is entitled
the exemption
6.2 12-TIOL-216 Sp. Provision Hical Technologies
Please let us know if you need any further information on these.
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Anand V. Mehta
DIRECTOR
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