Tax
Impact Of Working Capital Adjustment On Outstanding Trade Receivable Must Be Verified Before Making ALP Adjustment Qua Notional Interest: Ahmedabad ITAT
The Ahmedabad ITAT remitted the issue of transfer pricing adjustment regarding interest on overdue trade receivables in case of entity engaged in manufacturing of pharmaceutical products, while emphasizing that no further adjustment is warranted on outstanding receivables from AEs once working capital adjustment is already factored in. The credit period means the time period provided...
[Income Tax Act] Proceedings U/S 148A Summary In Nature, Assessing Authority To Only See If It Is “Fit Case” For Reassessment: Allahabad HC
The Allahabad High Court has held that proceedings under Section 148A of the Income tax Act, 1961 are summary in nature. The Court held that at the stage of passing order under Section 148A(d), the Assessing Authority has to only see if it is a “fit case” for initiation of reassessment proceedings or not.The Court held that the Assessing Authority need not go into the correctness of...
Rectification Order Passed In Name Of Non-Existent Entity Despite Having Knowledge Of Its Merger, Is Invalid: Mumbai ITAT
The Mumbai ITAT held that rectification order passed in the name of a non-existent entity, despite informing Revenue regarding its merger, is non-est in the eyes of law. The Division Bench comprising Prashant Maharishi (Accountant Member) and Raj Kumar Chauhan (Judicial Member) observed that “the internal correspondence of the Revenue also shows that the Assessing Officer was...
Failure To Cite Judgment Does Not Render Original Judgement Flawed: Allahabad High Court
The Allahabad High Court has held that mere failure to cite a judgement does not, in and of itself, render the original judgement flawed.The bench of Justice Shekhar B. Saraf has observed that the review jurisdiction is not a panacea for addressing every perceived deficiency or oversight in the original judgement; rather, it is a narrow avenue reserved for rectifying errors glaringly evident...
Interest Received By Overseas Head Office From Its Indian Permanent Establishment Is Not Taxable In View Of Treaty Benefits: Mumbai ITAT
Referring to the provision of Article 12 and 7 of the India-France DTAA which demonstrate that interest payment made by the permanent establishment to the head office are not taxable in the hands of the head office, the Mumbai ITAT held that interest received by the overseas head office (HO) from its Permanent Establishment (PE) is not taxable under beneficial provision of...
Franchise Agreement Granted Non-Exclusive Licence Rather Than Transfer Of Right To Use Goods, VAT Not Payable: Allahabad High Court
The Allahabad High Court has held that the franchise agreement granted a non-exclusive licence rather than a transfer of the right to use goods and the transaction does not attract Value Added Tax under the Uttar Pradesh Value Added Tax Act (UPVAT Act).The bench of Justice Shekhar B. Saraf has observed that the respondent-department had received royalty amount from various dealers under...
Option Once Exercised For A Financial Year May Not Be Withdrawn Midway: Allahabad High Court
The Allahabad High Court has held that an option, once exercised for a financial year, may not be withdrawn midway.The bench of Justice Saumitra Dayal Singh and Justice Donadi Ramesh has observed that the only recourse that applicant may have taken may be to apply to the jurisdictional authority to discontinue the benefit of the compounding scheme from the beginning of the next financial...
CSR Expenditure Is Mandatory, Does Not Justify Disallowance Of Section 80G Deduction: ITAT
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that expenditures under corporate social responsibility (CSR) are mandatory and does not justify disallowance of these expenditures under Section 80G of the Income Tax Act if other conditions of Section 80G are fulfilled. The bench of Anubhav Sharma (Judicial Member) and M. Balaganesh (Accountant Member) has observed that...
Receipts From CRM Services Not Taxable In India As Royalty Or FTS: ITAT
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that receipts from Customer Relationship Management (CRM) services are not taxable in India as royalty or Fee for Technical Services (FTS).The bench of Saktijit Dey (Vice President) and Brajesh Kumar Singh (Accountant Member) has observed that on November 26, 2019, the assessee filed a revised return of income, declaring income...
Opening And Closing Stock Of The Year Is To Be Valued By Applying Same Methodology: Kerala High Court
The Kerala High Court has held that the stipulation under Clause 16 of the Income Computation and Disclosure Standards (ICDS) for the adoption of first-in, first-out (FIFO) or weighted average cost for valuation of the stock or inventory cannot be applied in the Assessment Year 2017-2018 for the valuation of the opening stock, as the opening and closing stock of the year are to be valued...
Expenditure Incurred By Way Of Addition To Buildings, Electrical Fittings On Leasehold Premises Is Capital Expenditure: Kerala High Court
The Kerala High Court has held that the expenditure that was incurred by the appellant/assessee by way of addition to buildings and electrical fittings on leasehold premises was in the nature of capital expenditure and not revenue expenditure.The bench of Justice Dr. A.K. Jayasankaran Nambiar has observed that the assessing authority and the First Appellate Authority have clearly relied on...
Place Of Outbound Shipment Outside India, No Service Tax On Freight Margin Recovered From Customer: CESTAT
The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the place of provision of service for outbound shipment shall be outside India. Hence, there will be no service tax on the freight margin recovered by the applicant from the customer.The bench of Somesh Arora (Judicial Member) and C.L. Mahar (Technical Member) has observed that the place of...