Wednesday, March 30, 2016

One can account for income from choreography on cash basis and income from production on accrual basis

a)    Assessee was a professional dance director for cinematographic films. He was also producing films under a proprietorship concern.
b)    Assessee followed cash system of accounting in respect of his professional receipts whereas he was following mercantile system of accounting for computing income from production of films.
c)    Assessing Officer (AO) took a view that assessee was following hybrid system of accounting which was not permissible in view of amendment made to section 145 of the Income-tax Act by the Finance Act, 1995.

d)    The CIT(A) upheld the order of the AO. Aggrieved by the order of the CIT(A), the assessee filed the instant appeal before the tribunal.

Brand promotion of GoDaddy by its Indian subsidiary amounts to export of service


a) Assessee (‘GoDaddy India’) is an Indian subsidiary of GoDaddy US. It proposed to enter into an agreement to provide brand promotion and support services in India to GoDaddy US.

b) It sought advance ruling by contending that place of provision (POP) of services to be provided by it to GoDaddy USA is outside India. Therefore, it would not be liable to pay service tax in India.

c) Revenue on the other hand contended that service to be provided by the assessee is intermediary services which is to be consumed by Indian customers and as per POP rules, POP would be location of service provider i.e. India. Therefore, such services should not be treated as export of services.

Salary of NR for rendering service in US won't be taxed in India as per DTAA even if salary is received in India

a)  The assessee was transferred from Indian company to its American sister concern to act as a lead software engineer
b)  He left India on 30th May of relevant financial year in connection with his US employment. However, for internal facilitation, his salary for relevant period was paid by Indian company in India.
c)  Assessee filed his return claiming status of a non-resident and claimed his salary income as exempt from tax in view of Article 16(1) of the DTAA between India and USA.
d)  Assessing Officer (AO) held that since salary was received in India, the same would be taxable in India irrespective of his residential status.

e)  CIT(A) confirmed the order of the AO. Aggrieved by the order of CIT(A), assessee filed the instant appeal before the tribunal.