Tag Archives: IN THE ITAT MUMBAI BENCH

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 »

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 »

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 »

Penalty under Section 270A cannot be levied if the return filed under Section 148 is accepted without variation.

By | June 24, 2026
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Penalty under Section 270A cannot be levied if the return filed under Section 148 is accepted without variation. Issue Whether the mere filing of an income tax return for the first time in response to a Section 148 notice automatically attracts under-reporting penalties under Section 270A(2)(b) when the Assessing Officer accepts the returned income without… Read More »

DTAA Rates Do Not Apply to Dividend Distribution Tax, and Discount on ESOP is Allowed as Business Expenditure

By | June 24, 2026
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DTAA Rates Do Not Apply to Dividend Distribution Tax, and Discount on ESOP is Allowed as Business Expenditure Issue Whether Double Taxation Avoidance Agreement (DTAA) provisions are triggered when a domestic company pays Dividend Distribution Tax (DDT) under Section 115-O, thereby allowing a refund of DDT paid in excess of DTAA rates. Whether the discount… Read More »

Downward Profit Adjustments Unsustainable Without Material Proof and Financially Distressed Comparables Must Be Excluded

By | June 23, 2026
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Downward Profit Adjustments Unsustainable Without Material Proof and Financially Distressed Comparables Must Be Excluded Downward Profit Adjustments Unsustainable Without Material Proof and Financially Distressed Comparables Must Be Excluded Issue Whether a profit adjustment under Section 80-IA(10) can be sustained if the Transfer Pricing Officer (TPO) fails to provide material evidence proving a close connection, an… Read More »

Opening WDV of a block of assets cannot be disturbed to deny depreciation based on a circular.

By | June 20, 2026
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Opening WDV of a block of assets cannot be disturbed to deny depreciation based on a circular. Issue Whether the Principal Commissioner of Income Tax (PCIT) can invoke revisionary jurisdiction under Section 263 to deny depreciation on an intangible asset (NHAI concession rights) by applying CBDT Circular No. 9/2014, when the asset had already entered… Read More »

Property investment by a homemaker funded directly via her father’s bank account cannot be taxed under Section 69 merely for lacking a gift deed.

By | June 19, 2026
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Property investment by a homemaker funded directly via her father’s bank account cannot be taxed under Section 69 merely for lacking a gift deed. Issue Whether an investment in an immovable property by a homemaker can be treated as an unexplained investment under Section 69 read with Section 115BBE when the entire purchase consideration was… Read More »

AO cannot invoke Section 69C over business expediency when foreign remittance sources are fully documented, nor duplicate additions for suo motu disallowed CSR expenses.

By | June 19, 2026
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AO cannot invoke Section 69C over business expediency when foreign remittance sources are fully documented, nor duplicate additions for suo motu disallowed CSR expenses. Issue Whether the Assessing Officer (AO) can legally invoke Section 69C to tax recorded foreign remittances as unexplained expenditure based solely on a perceived lack of commercial expediency, and whether a… Read More »

Insurance sector rules permit outsourcing costs absent formal regulatory penalties, and Section 44 overrides standard Section 14A exempt income disallowances.

By | June 19, 2026
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Insurance sector rules permit outsourcing costs absent formal regulatory penalties, and Section 44 overrides standard Section 14A exempt income disallowances. Issue Whether the outsourcing fees paid to service aggregators by an insurance firm can be disallowed under Explanation 1 to Section 37(1) as an “expenditure prohibited by law” without an official regulatory finding of a… Read More »