Tag Archives: IN THE ITAT CHENNAI BENCH

No notional interest applies to debt-free AE receivables and reimbursed ESOP costs are deductible.

By | September 21, 2026
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No notional interest applies to debt-free AE receivables and reimbursed ESOP costs are deductible. Issue Whether transfer pricing adjustments by imputing notional interest on outstanding receivables from Associated Enterprises (AEs) are sustainable for a debt-free company, and whether ESOP/ESPP costs reimbursed to a foreign parent company are allowable as revenue expenditure under Section 37(1). Facts… Read More »

Rectification Order Levying Interest Under Section 234A Struck Down as E-Verification Relates Back to Return Filing Date

By | September 19, 2026
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Rectification Order Levying Interest Under Section 234A Struck Down as E-Verification Relates Back to Return Filing Date Issue Whether an Assessing Officer can pass a rectification order under Section 154 to recompute and levy interest under Section 234A on the ground that the return of income was e-verified on a later date, despite the return… Read More »

TPO Cannot Unilaterally Separate and Benchmark Segmented AE Transactions at Nil Once TNMM Meets Arm’s Length Standard

By | September 19, 2026
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TPO Cannot Unilaterally Separate and Benchmark Segmented AE Transactions at Nil Once TNMM Meets Arm’s Length Standard Issue Whether the Transfer Pricing Officer (TPO) can carve out IT support services (third-party software/licence costs) and benchmark a 5% markup separately at Nil after accepting the overall international transaction margins under the Transactional Net Margin Method (TNMM).… Read More »

Reversal write-backs, foreign exchange losses, and secondment reimbursements are non-taxable, while transfer pricing adjustments require re-examination.

By | September 9, 2026
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Reversal write-backs, foreign exchange losses, and secondment reimbursements are non-taxable, while transfer pricing adjustments require re-examination. Issue Whether capacity utilization/economic adjustments under TNMM can be summarily rejected by the TPO without considering past coordinate bench precedents. Whether provisions created in earlier years and treated as operating expenses can be treated as non-operating income upon write-back… Read More »

Unsubstantiated additions based on uncorroborated third-party documents, estimates, and WhatsApp chats without direct proof are impermissible.

By | September 8, 2026
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Unsubstantiated additions based on uncorroborated third-party documents, estimates, and WhatsApp chats without direct proof are impermissible. Unsubstantiated additions based on uncorroborated third-party documents, estimates, and WhatsApp chats without direct proof are impermissible. Issue Whether an addition towards unaccounted cash receipts (“on-money”) from flat sales under Section 69A can be sustained solely on estimates, WhatsApp chats,… Read More »

Section 148 Reassessment Notice Issued for AY 2015-16 After March 31, 2026 is Barred by Limitation

By | September 7, 2026
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Section 148 Reassessment Notice Issued for AY 2015-16 After March 31, 2026 is Barred by Limitation Issue Whether a notice issued under Section 148 of the Income-tax Act, 1961 for Assessment Year 2015-16 after March 31, 2026 is barred by limitation under the first proviso to Section 149(1), rendering the consequent reassessment proceedings bad in… Read More »

No TDS Required under Section 194A on Interest Paid to Statutory Universities and Wholly Government-Owned Companies

By | September 5, 2026
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No TDS Required under Section 194A on Interest Paid to Statutory Universities and Wholly Government-Owned Companies Issue Whether a public sector undertaking is liable as an “assessee in default” under Section 201 for non-deduction of TDS under Section 194A on interest paid to statutory universities and wholly government-owned companies. Facts Assessee Status: The assessee is… Read More »

Enhanced compensation for agricultural land is exempt and recharacterization of capital gains is valid.

By | September 4, 2026
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Enhanced compensation for agricultural land is exempt and recharacterization of capital gains is valid. Enhanced compensation for agricultural land is exempt and recharacterization of capital gains is valid. Issue Whether enhanced compensation received for compulsory acquisition of agricultural land qualifies for exemption under Section 10(37), and whether an inadvertent classification of Long-Term Capital Gains as… Read More »

Section 263 Revision Cannot Be Invoked When Assessing Officer Adopts Plausible View Accepting Loan Repayment Application

By | September 3, 2026
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Section 263 Revision Cannot Be Invoked When Assessing Officer Adopts Plausible View Accepting Loan Repayment Application Issue Whether the Commissioner (Exemptions) can invoke revisionary jurisdiction under Section 263 to set aside an assessment order accepting a charitable trust’s claim of loan repayment as an application of income under Section 11, when the Assessing Officer conducted… Read More »

Penalty under Section 272A(2)(e) must be restricted to Section 139(4) deadline, not Section 148 return date.

By | September 2, 2026
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Penalty under Section 272A(2)(e) must be restricted to Section 139(4) deadline, not Section 148 return date. Issue Whether penalty under Section 272A(2)(e) for failure to furnish a return of income under Section 139 is to be computed up to the date of filing the return in response to a Section 148 notice, or restricted only… Read More »