This document provides a summary of recent legal landmarks in 6 areas of tax law: 1) Payments received for supply, erection and commissioning of equipment is taxable under section 44BB. 2) Subscription fees received for social media monitoring services are considered royalty and taxable under section 9. 3) Penalty under section 271D for cash loans over Rs. 20,000 is not applicable if each loan is less than Rs. 20,000 even if total is over the limit. 4) Exemption under section 13 is only available for trust income not applied for the benefit of any person listed under section 13(3). 5) Extended limitation period is available to the AO even if

1. VOLUME NO.: LLAT/ 490 OF 2011-12 DATE: 18th 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 AAR 44BB, ITA Dissecting approach’ laid down by SC in Ishikawajima’s case no
longer a valid approach. Accordingly, payments received under
indivisible contract of supply, erection and commissioning of
manometer gauges in connection with prospecting for or
extraction of mineral oil is taxable u/s 44BB
1.2 21TM 128 Sp Provision Roxar Maximum Reservoir Performance WLL
2.1 AAR 9, ITA Subscription fee received from customers for providing social
media monitoring services through website is taxable as 'royalty'
u/s 9(1)(vi) and Indo-Singapore DTACT
2.2 21TM 129 Royalty ThoughtBuzz
3.1 Kol ITAT 269, ITA Since CBDT Circular No. 572 dated 3-8-1990 clearly states that
S 271D is applicable for taking or accepting any loan or deposit
in excess of Rs.20,000, penalty u/s 271D is not imposable where
'A' accepted cash loans of Rs.20,000 each from 6 persons
aggregating to Rs.1,20,000. This is so even though the
interpretation in the said circular is contrary to the express
provisions of S 269SS which provides that S 269SS is applicable
to loans or deposits of Rs.20,000 or more
3.2 21TM 132 Loans Gopal Sarkar
4.1 Del ITAT 13, ITA If any part of trust income or property is applied for the benefit of
any person referred to in S 13(3), only income so applied
(misapplied) will not be eligible for exemption.
4.2 21TM 144 Exemption Indicula Trust Society
5.1 Chen ITAT 144, ITA On reference to TPO, extended limitation period available to AO
even if TPO accepts 'A's price as ALP and only non-TP
adjustments proposed in draft assessment order u/s 144C
5.2 21TM 145 TP Visual Graphics
6.1 Del ITAT 10, ITA Transaction with sister concern not a sham unless it is collusive
or for tax evasion or not at arm's length
6.2 21TM146 ALP Malibu Estates
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
A mind of a consultant with a heart of a friend.
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