This document provides a summary of recent legal landmarks related to taxation. It lists 6 cases with details about the section/rules and key ratios involved. The cases cover topics such as capitalization of expenditures, allowability of software expenses, artificial capital losses between sister concerns, taxability of income without a permanent establishment, concealment penalties, and Section 80-IA benefits. The document was sent by Anand Mehta & Co. consultants to inform the client of these legal updates in taxation.

1. VOLUME NO.: LLAT/ 538 OF 2012-13 DATE: 28h July, 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 AHD ITAT 37(1), ITA Substantial expenditure incurred after the acquisition of the
operations of an Indian company by a foreign company on
repairs of a drilling rig should be capitalised.
1.2 2012-TII-79 Busi.Exp M/s DALMA ENERGY LLC
2.1 DEL ITAT 37, ITA An application software purchased by the “a”, which
enabled it to execute tasks in the field of accounting,
purchases and inventory maintenance, was allowable as
revenue expenditure. It could not be treated as capital
expenditure merely because the “a” had not written off the
expense in its books of accounts in the first year and had
written off only a part of the expenses in the succeeding
year.
2.2 2012-TIOL-373 Busi.Exp Honda Siel Cars India Ltd
3.1 MAD HC 45,ITA Buying at high price and selling at low price to sister
concern creates artificial capital losses, hence disallowed
3.2 12 TM 333 Cap Gains Premier Synthetic Industries
4.1 KOL ITAT 40(a), ITA a) income can not be taxed on ground of 'business
connection' when there exists no PE as services were not
made available+which enable the acquirer to use the
technology b) income which can not be taxed under
specific Articles 7,12 and 14 can not be taxed under the
Residuary Article 23 too c) if income was not taxable in
hands of the receipient, tax was not deductible in hands of
the payer as "other sum" and accordingly no disallowance
u/s 40(a)(i)
4.2 12 TM 400 Busi. Exp Andaman Sea Food (P.) Ltd
5.1 DEL HC 271, ITA Camouflaging of stock-in-trade as investment to evade
payment of taxes- concealment penalty imposed
5.2 12 TM 407 Penalty Splender Construction
6.1 KAR HC 80-IA, ITA Where activities undertaken by 'A', engaged in business of
providing engineering drawing and designs, were client
specific and, thus, it brought a new and distinct product
and design into existence, S 80-IA benefit could not be
denied to it
6.2 23 TM 10 Deduction John Brown Technologies India (P.) Ltd
Please let us know if you need any further information on these.
Thanking you and assuring you of our best services at all times.
Yours Faithfully,
For Anand Mehta & Co .,
(CONSULTANTS) PVT. LTD.
Anand V. Mehta
DIRECTOR
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