Section 14A disallowance on Dividend Income

Disallowance should be restricted to 1% of Dividend Income.

Hon'ble Kolkata tribunal in case of M/s BPS securities (p) Ltd. had held that Disallowance u/s 14A should be restricted to 1% of total Dividend Income.
One Important thing i would like to mention here that the decision of Kolkata Tribunal is come after the Bombay High Court decision in case of Godrej & Boyce.

Not Following Juridictional High Court Decision : Contemt of Court

Bombay High Court in Garware polyster held that Failure to follow High Court’s order is contempt of court. The AO passed an assessment order in which he declined to follow the judgement of the Bombay High Court. On a Writ Petition filed by the assessee, the High Court has taken the view that as the said judgement in Pee Vee Textiles is not stayed, “the refusal to follow and implement the judgment of this Court by Mr.Dubey in our considered view prima facie amounts to contempt of this Court”. The Court directed issue of a show-cause notice to the AO as to why action under the Contempt of Courts Act should not be initiated against him.

Domestic transactions will come under Indian Transfer Pricing provisions

Recently the Supreme Court , in the case of Glaxo Smithkline Asia (P) Ltd. has observed that amendment would be required to the provisions of the Indian Income-tax Act, 1961 (the Act) in case the Indian Transfer Pricing regulations are sought to be applied to domestic transactions between related parties under Section 40A(2) and Section 80I(A) of the Act. Towards this end, the Supreme Court has suggested that the Ministry of Finance may consider this issue expeditiously and in the interim, the Central Board of Direct Taxes may consider issuing appropriate instructions in this regard.

Stay on Retrospective Amendment : Renting of Immovable property :

Allahabad High Court in M/S Orient Craft Limited vs Union Of India And Others - granted stay on the retrospective operation (Retrospective amendment w.e.f. 1.6.2007 vide Finance Act, 2010)  of levy of service tax on renting of property but not stay on prospective levy.

Levy of Interest u/s 234B & 234C under MAT

Whether Interst u/s 234B & 234C will be levied, when tax liability calculated u/s 115JB i.e.under MAT, is a very controversial issue. Different High Court give contradictory judgement on this issue. However, a recent Bombay High Court decision in case of Natural Gems Limited, made it quite clear that no interest u/s 234B & 234C will be levied, when tax payable under MAT. Bombay High Court had relied on SC judgement in Kwality Biscuits, which gives the principle that book profit will be calculated only after end of the financial year, hence it is not possible to estimate tax liability.
Logically, this Bombay High Court seems to be prevail in near future as principle given by SC is still prevailed.