Interest on overdue foreign receivables must be benchmarked using the invoice currency. Issue What is the appropriate method for benchmarking the notional interest to be charged on delayed or overdue receivables from a foreign Associated Enterprise (AE) in a transfer pricing assessment? Facts The assessee had outstanding receivables from its US-based Associated Enterprise (AE). The… Read More »
A religious object in a trust deed doesn’t automatically bar 80G approval. Issue Can a trust’s application for registration under Section 80G(5) of the Income-tax Act, 1961, be rejected on the ground that one of its objects is “religious in nature,” without properly examining the true nature of that object and without considering the 5%… Read More »
Interest on overdue foreign receivables must be benchmarked using the invoice currency. Issue What is the appropriate method for benchmarking the notional interest to be charged on delayed or overdue receivables from a foreign Associated Enterprise (AE) in a transfer pricing assessment? Facts The assessee had outstanding receivables from its US-based Associated Enterprise (AE). The… Read More »
A protective addition is unjustified when substantive additions are made on actual beneficiaries. Issue Can a “protective addition” for unexplained cash deposits be legally sustained against a person in whose name a bank account was allegedly opened fraudulently, especially when “substantive additions” for the same amount have already been made against the actual beneficiaries of… Read More »
A history of admitting to bogus transactions with a party justifies a disallowance of purchases from the same party in a later year if the taxpayer fails to provide sufficient new proof of genuineness. Issue Can a taxpayer’s past admission of entering into bogus transactions with a particular supplier be used to justify a disallowance… Read More »
A reassessment order is a nullity without a valid Section 143(2) notice. Issue Is a reassessment order passed under Section 147 of the Income-tax Act, 1961, legally valid if the Assessing Officer fails to issue the mandatory notice under Section 143(2) after the assessee has filed a return in response to the initial reopening notice?… Read More »
An addition cannot be based solely on a third-party document denied by the assessee. Issue Can a tax addition be made against a person based solely on a loose document found at the premises of a third party, especially when that person completely denies the transaction, alleges forgery, and provides evidence to support their claim?… Read More »
A generic purpose in Form 10 is acceptable if a Board Resolution specifies it. Issue Can the benefit of accumulating income under Section 11(2) of the Income-tax Act, 1961, be denied to a charitable trust simply because the purpose mentioned in the prescribed Form 10 is generic, even if a supporting and contemporaneous Board Resolution… Read More »
A hotel cannot cite market dynamics to justify not passing on a GST rate cut. Issue Can a hotel avoid the charge of profiteering under Section 171 of the CGST Act, 2017, by claiming that its increase in the base price of rooms, which effectively nullified a GST rate reduction, was a result of market… Read More »
A court may grant extended time to file an appeal despite the taxpayer’s non-compliance. Issue Should a taxpayer who failed to reply to a show-cause notice, attend a hearing, and file a timely appeal be granted an opportunity by a High Court to pursue the statutory appellate remedy belatedly? Facts The assessee received a show-cause… Read More »