Supreme Court Affirms JV Agreement Termination Receipts Non-Taxable Under Section 55(2) Supreme Court Affirms JV Agreement Termination Receipts Non-Taxable Under Section 55(2) Issue Whether compensation received by an assessee on the termination of a joint venture agreement for intangible assets/rights is taxable under Section 55(2) of the Income-tax Act, 1961, for Assessment Year 1998–99. Facts… Read More »
No Disallowance Under Section 40(a)(ia) for Short Deduction and Section 14A Disallowance Inapplicable to Book Profits Issue Whether deducting tax under a wrong TDS provision (Section 194C instead of Section 194I) triggers disallowance under Section 40(a)(ia), and whether disallowance under Section 14A read with Rule 8D can be added back while computing book profit under… Read More »
ITAT Rules Interest Paid to Overseas Head Office Deductible and Restricts Guarantee Commission Adjustment Issue Whether interest paid by an Indian Permanent Establishment (PE) to its foreign Head Office is deductible, and whether Transfer Pricing adjustments on guarantee commission must give credit for amounts already recovered from the Associated Enterprise (AE). Facts The assessee is… Read More »
ITAT Remands Defect Liability Expense Issue and Allows Bad Debts and PF/ESI Deductions Issue Whether expenses incurred during a contractual Defect Liability Period (DLP) are allowable under Section 37(1), bad debts written off meet the criteria under Section 36(1)(vii), and employees’ PF/ESI contributions deposited within statutory due dates are allowable under Section 36(1)(va). Facts Defect… Read More »
Write-Off of Expired Inventory and Bad Debts Allowable as Business Expenditure Based on Verified Evidence Issue Whether the write-off of expired finished goods inventory and bad debts supported by physical verification and independent accounting reports are allowable deductions under Sections 37(1) and 36 of the Income-tax Act, 1961. Facts The assessee claimed a deduction for… Read More »
Reassessment Initiated to Revisit Section 10AA Claim Examined in Scrutiny Is Void as a Change of Opinion Reassessment Initiated to Revisit Section 10AA Claim Examined in Scrutiny Is Void as a Change of Opinion Issue Whether a reassessment notice issued under Section 148 to revisit and disallow a Section 10AA SEZ deduction—which was specifically queried,… Read More »
High Court Rejects Section 10A/80IA(10) Additions Absent Finding of Extraordinary Counterparty Profits Issue Whether additions under Section 10A(7) read with Section 80IA(10) can be sustained solely based on a transfer pricing margin comparison without establishing that transactions with counterparties yielded more than ordinary profits. Facts The assessee claimed deduction under Section 10A for the Assessment… Read More »
High Court Condones 1,797-Day Delay Caused by CA’s Inadvertent Error and Restores Tax Exemption Appeal High Court Condones 1,797-Day Delay Caused by CA’s Inadvertent Error and Restores Tax Exemption Appeal Issue Whether an inordinate delay of 1,797 days in filing an appeal before the CIT(A) should be condoned and restored for hearing on merits when… Read More »
ITAT Rules Indian PE Interest Income, Shared Hub Costs, and MTM Losses Non-Taxable or Deductible ITAT Rules Indian PE Interest Income, Shared Hub Costs, and MTM Losses Non-Taxable or Deductible Issue Whether interest credited by Head Office, shared regional hub expenses, broken period interest, expatriate salary reimbursements, year-end Mark-to-Market (MTM) losses on forex contracts, and… Read More »
Opening WDV depreciation, advance subscription revenue, and inherited slump sale interest cannot be disallowed. Issue Depreciation on Intangibles: Whether depreciation can be denied on the opening Written Down Value (WDV) of a block of intangible assets under Section 43(6)(c) when it was duly examined and allowed in the preceding assessment year. Accrual of Advance Revenue:… Read More »