Advertisement, Marketing and promotion expenses: Requirement to benchmark these expenses

Case: ACIT, CC- 31 VS. PERNOD RICHARD INDIA PVT LTD, Delhi ITAT Outcome: Remand Facts During the year the Assessee incurred Advertising, Marketing and Promotion expenses for its manufacturing and distribution segment.According to the Transfer Pricing Officer the said expense was incurred to build different brands of the Associated Enterprises of the Assessee.Hence, he treated … Continue reading Advertisement, Marketing and promotion expenses: Requirement to benchmark these expenses

Payments for intra-group services: Transfer pricing implications

Case: DCIT vs. Teradata India Pvt Ltd , Delhi ITAT Outcome: Assessee Facts The revenue raised the ground of appeal that the Dispute Resolution Panel erred in allowing the relief on account of Transfer Pricing Adjustment in respect of the intra group services to the Assessee as it failed to submit evidence of receipt of … Continue reading Payments for intra-group services: Transfer pricing implications

Advertising & Marketing Promotion (AMP) an International Transaction?

Section 92B of the Income Tax Act defines `international transaction’. So let's start with a simplified reading of the section. Simplifying Section 92B - International Transaction The section primarily classifies the combination of party types and transactions that results in an international transaction. Party types Transaction between two or more associated enterprises, either or both … Continue reading Advertising & Marketing Promotion (AMP) an International Transaction?

Definition of term ‘process’ as per Explanation 6 to Section 9(1)(vi) of the Income Tax Act: Interpretation of definition of term ‘royalty’ under the tax treaty

Case: DCIT (INTERNATIONAL TAXATION) vs THAICOM PUBLIC CO. LTD, Delhi ITAT Outcome: Assessee Facts The Assessee had earned income from providing transponder services to customers in India. According to the Assessee, the income earned by it from providing transponder services was neither taxable as per provisions of the Act nor as per India-Thailand tax treaty.However, … Continue reading Definition of term ‘process’ as per Explanation 6 to Section 9(1)(vi) of the Income Tax Act: Interpretation of definition of term ‘royalty’ under the tax treaty

Taxation of Employee stock option plan: Requirement to deduct tax at source under section 192

Case: NXP India Pvt Ltd vs. Deputy Commissioner of Income Tax, Circle-5(1)(1), Bangalore ITAT Outcome: Remand Facts The stock- based compensation plans were introduced by the ultimate holding company NXP Semiconductors N.V. in 2007 wherein certain employees of NXP India have been granted options and restricted stock units under these plans.The compensation cost was amortised … Continue reading Taxation of Employee stock option plan: Requirement to deduct tax at source under section 192

Amount received as share premium: Applicability of Section 68

Case: DCIT vs INTERNATIONAL LAND AND DEVELOPERS PVT LTD, Delhi ITAT Outcome: Assessee Facts The Assessee company had issued 1,41,500 shares of face value of Rs.10/- each at a premium of Rs.90/- per share. The Assessee was asked to explain on what basis it had valued its share with reference to assets and liabilities of … Continue reading Amount received as share premium: Applicability of Section 68

Contribution to Pension Fund: Deduction under section 43B

Case: Punjab National Bank vs. ACIT, Delhi ITAT Outcome: Remand Facts The Assessee had made contribution to the PNB Employees Pension Fund Trust, which was claimed as legitimate business expenditure. The Assessing Officer opined that no deduction of such payment was allowable to the Assessee bank, even though the same was actually paid and the … Continue reading Contribution to Pension Fund: Deduction under section 43B

Disallowance of expenditure under Section 14A: Applicability to Insurance business

Case: Max New York Life Insurance Company Ltd. vs. DCIT, Delhi ITAT Outcome: Partial Facts The ground raised in the appeal was with respect to the exemption of claim by the Assessee under section 10(34) of the Act and with respect to dividend income earned by the Assessee and allowance of expenditure on the same. … Continue reading Disallowance of expenditure under Section 14A: Applicability to Insurance business

Disallowance of expenditure under Section 14A: Applicability to Insurance business

Case: Max Life Insurance Company Ltd vs. Dcit, Circle- 1, Ltu Outcome: Assessee Facts The Assessee had claimed an exemption of dividend income under section 10(34) and claimed a deduction of expenditure incurred in order to earn the same.However, the Assessing Officer did not allow the claim of exemption under section 10(34) to the Assessee and also disallowed the claim of expenditure against the same … Continue reading Disallowance of expenditure under Section 14A: Applicability to Insurance business

Foreign exchange fluctuation loss: Deductibility of such loss for tax purposes

Case: Sitae Re Pvt Ltd vs. Ito, Ward-23(4), Delhi ITAT Outcome: Assessee Facts The Assessee in the course of its business received 20 lakh Euros equivalent to Rs. 11.25 Crores from Natural Energy Corporation GmbH against services to be rendered. Pending adjustment, the said business advance was reflected as advance against services to be rendered … Continue reading Foreign exchange fluctuation loss: Deductibility of such loss for tax purposes