Daily Archives: June 25, 2026

Valid Advance Pricing Agreements bind the Revenue, precluding alternative business expenditure disallowances under Section 37(1).

By | June 25, 2026
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Valid Advance Pricing Agreements bind the Revenue, precluding alternative business expenditure disallowances under Section 37(1). Issue Whether the tax department can alternatively disallow an expenditure under Section 37(1) of the Income-tax Act after the underlying international transaction has already been covered, verified, and accepted under a binding Advance Pricing Agreement (APA) under Section 92CC. Facts… Read More »

Domestic AMP spend without an agreement is not an international transaction, and business losses must be allowed for set-off.

By | June 25, 2026
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Domestic AMP spend without an agreement is not an international transaction, and business losses must be allowed for set-off. Issue On Transfer Pricing: Whether Advertisement, Marketing, and Promotion (AMP) expenses incurred within India by a subsidiary to promote its own product sales constitute an “international transaction” under Chapter X, in the absence of an explicit… Read More »

Reassessment orders passed by the NFAC prior to March 2022 are valid under Section 147A.

By | June 25, 2026
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Reassessment orders passed by the NFAC prior to March 2022 are valid under Section 147A. Reassessment orders passed by the NFAC prior to March 2022 are valid under Section 147A. Issue On Reassessment Jurisdiction: Whether a faceless reassessment order passed by the National Faceless Assessment Centre (NFAC) prior to March 29, 2022, is invalid or… Read More »

Unrealizable insolvency assets must be excluded from Rule 11UA Fair Market Value computations.

By | June 25, 2026
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Unrealizable insolvency assets must be excluded from Rule 11UA Fair Market Value computations. Issue Whether the Assessing Officer (AO) is legally justified in mechanically invoking Section 50CA and Rule 11UA to calculate the Fair Market Value (FMV) of unquoted shares based purely on book values, without excluding unrealizable insolvency assets or considering the price discovered… Read More »

Appellate authorities cannot admit additional financial evidence without recorded reasons and granting the Assessing Officer a rebuttal opportunity.

By | June 25, 2026
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Appellate authorities cannot admit additional financial evidence without recorded reasons and granting the Assessing Officer a rebuttal opportunity. Issue Whether the Commissioner (Appeals) [CIT(A)] is legally justified in reducing a Section 40(a)(ia) disallowance based on new documents produced by the assessee at the appellate stage, without passing a speaking order under Rule 46A or providing… Read More »

Functionally dissimilar entities, entrepreneurs, and product developers are invalid comparables for captive IT service providers.

By | June 25, 2026
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Functionally dissimilar entities, entrepreneurs, and product developers are invalid comparables for captive IT service providers. Issue Whether the Transfer Pricing Officer (TPO) was justified in including functionally dissimilar companies, full-fledged entrepreneurs, and product developers in the final list of comparables for a captive service provider, and whether the ad hoc disallowance of repair and maintenance… Read More »

Depreciation under block of assets is allowable even if manufacturing operations are discontinued during the year.

By | June 25, 2026
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Depreciation under block of assets is allowable even if manufacturing operations are discontinued during the year. Issue Whether an assessee is entitled to claim depreciation on a block of assets (plant, machinery, and buildings) for an assessment year when its manufacturing operations have been discontinued, particularly when identical claims were allowed in preceding years under… Read More »

Quantified liabilities, documented payments, and reconciled books cannot be disallowed on a purely ad hoc basis.

By | June 25, 2026
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Quantified liabilities, documented payments, and reconciled books cannot be disallowed on a purely ad hoc basis. Quantified liabilities, documented payments, and reconciled books cannot be disallowed on a purely ad hoc basis. Issue Whether the tax authorities can validly disallow quantified business liabilities, depreciation claims, actual statutory payments, reconciled sales turnover, and staff welfare expenses… Read More »

Application for Section 12AB registration cannot be rejected without recording a reasoned finding on specified violations.

By | June 25, 2026
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Application for Section 12AB registration cannot be rejected without recording a reasoned finding on specified violations. Application for Section 12AB registration cannot be rejected without recording a reasoned finding on specified violations. Issue Whether the Commissioner (Exemptions) is justified in rejecting a trust’s application for fresh registration under section 12AB on the grounds that its… Read More »

Subsequent Section 10AA deduction disallowance via rectification order without apparent error is unsustainable.

By | June 25, 2026
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Subsequent Section 10AA deduction disallowance via rectification order without apparent error is unsustainable. Subsequent Section 10AA deduction disallowance via rectification order without apparent error is unsustainable. Issue Whether the Central Processing Centre (CPC) is justified in completely disallowing an initially approved Section 10AA deduction of ₹20.29 crores through a rectification order under section 154, in… Read More »