Factors leading to formation of Dependent Agency Permanent Establishment

Case: DDIT (I.Taxation) 2(1) vs. Setsatelite (Singapore) Pvt Ltd, Mumbai ITAT Outcome: Remand Facts The assessee had remunerated the dependent agent on account of advertisement revenue on arm's length price for the services rendered by him. Key points In cases, where the enterprise does not have a fixed place of business in the other Contracting State, … Continue reading Factors leading to formation of Dependent Agency Permanent Establishment

Stamp Duty paid for execution of lease deed: Revenue Expenditure Vs. Capital Expenditure

Case:  Fiserv India Pvt Ltd vs. ACIT, Delhi ITAT Outcome: In favour of Assessee Facts The Assessee was a company engaged in the business of providing software development and maintenance services to Fisqaerv Global Services Inc USA. The Assessee had claimed deduction on stamp duty paid on account of leased property holding.However, the Assessing Officer disallowed … Continue reading Stamp Duty paid for execution of lease deed: Revenue Expenditure Vs. Capital Expenditure

Credit entry in individual debtor’s account: Prerequisite for claiming deduction on account of writing off of bad debts

Case:  Hajee A.P.Bava & Company Vs. The Assistant Commissioner of Income Tax, Karnataka HC Outcome: Remand Facts The Assessee was a private limited company, which was engaged in the business of fabrication, erection, commissioning, maintenance of mechanical plants and machinery. The Assessee filed its return of income by declaring total income of Rs.7.71 Crs on 30.11.2014. … Continue reading Credit entry in individual debtor’s account: Prerequisite for claiming deduction on account of writing off of bad debts

Methodology selected by taxpayer for determining Fair Market Value of shares: Jurisdiction of a Tax Officer to ignore/ reject such selection and valuation methods adopted by taxpayer

Case:  Flutura Business Solutions Pvt Ltd Vs The Income Tax Officer Ward-3(1)(1), Bangalore ITAT Outcome: Remand Facts The Assessee had valued the shares at premium based on a valuation report of Chartered Accountant who valued the shares adopting Discounted Cash Flow (DCF) method.This valuation was done as per the mandate provided in the provisions of Rule … Continue reading Methodology selected by taxpayer for determining Fair Market Value of shares: Jurisdiction of a Tax Officer to ignore/ reject such selection and valuation methods adopted by taxpayer

Disallowances regarding issues not covered in limited scrutiny: Jurisdiction of an assessing officer

Case:  Shri Prabir Das Vs Income Tax Officer, Ward, Gauhati ITAT Outcome: Partial Facts The Assessee had filed return of income on 15.12.2016. Later the case of the Assessee was selected for limited scrutiny and a limited scrutiny notice under section 143(2) dated 20.09.2017 was issued for only one issue i.e. whether stock was valued correctly or not.However, … Continue reading Disallowances regarding issues not covered in limited scrutiny: Jurisdiction of an assessing officer

Interest on outstanding receivables: Transfer pricing implications

Case:  Global Logic India Ltd Vs Dcit, Circle-10(1), Delhi ITAT Outcome: In favour of Assessee Facts The ground of appeal raised by the Assessee was in respect of transfer pricing adjustment made by the Transfer Pricing Officer on account of interest due on outstanding receivables from Associated Enterprises. Key points The Tribunal placed reliance on the … Continue reading Interest on outstanding receivables: Transfer pricing implications

Inclusion/Exclusion of ‘education cess’: Scope of the term ‘any rates or taxes’ as per section 40(a)(ii)

Case: Voltas Ltd vs ACIT 8(3)(2), Mumbai ITAT Outcome: Partial Facts The ground of appeal raised by the Assessee was that whether on the facts and in the circumstances of the case and position on law, the education cess and the secondary and higher education cess was a disallowable expenditure under section 40(a)(ii) of the Income-tax … Continue reading Inclusion/Exclusion of ‘education cess’: Scope of the term ‘any rates or taxes’ as per section 40(a)(ii)

Omission of clause (i) of Section 92BA (Specified Domestic Transaction) without a saving clause: Deemed obliteration from beginning

Case: Bhartia-SMSIL(JV) Vs Income Tax Officer, Ward-3(1), Gauhati ITAT Outcome: In favour of Assessee Facts The Principal Commissioner of Income Tax (PCIT) issued a notice under section 263 of the Act on 03.12.2018 proposing to set aside the Assessment order under section 143(3) dated 28.10.2016 on the ground that the said order was erroneous and prejudicial … Continue reading Omission of clause (i) of Section 92BA (Specified Domestic Transaction) without a saving clause: Deemed obliteration from beginning

Freight payments made to shipping agents of Non Resident/Non Resident shipping companies: Applicability of provisions of Tax Deduction at Source

Case: Sri Suresh Khatri Vs Income Tax Officer- 3(4), Lucknow ITAT Outcome: Assessee Facts The Assessee was a proprietary concern and engaged in the business of manufacturing of leather and cotton items. During the year under consideration, the Assessee had exported goods and made payment of Rs.6.42 lakhs towards shipping expenses in the nature of freight.The … Continue reading Freight payments made to shipping agents of Non Resident/Non Resident shipping companies: Applicability of provisions of Tax Deduction at Source