Photograph Of Handwritten Note Cannot Independently Prove Cash Transaction: ITAT Chennai

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has held that a photograph of a handwritten document cannot independently establish an alleged cash payment when it is merely an electronic reproduction of the same document.The Bench of Judicial Member Manu Kumar Giri and Accountant Member S.R. Raghunatha made the observation while upholding the deletion of a ₹18.87 crore addition against Ivar Estates Private Limited. The Revenue had alleged that the company paid the amount in cash,...

Income Tax Dept Cannot Reopen Time-Barred Assessment Through Amended Reassessment Provisions: ITAT Visakhapatnam

The Income Tax Appellate Tribunal (ITAT), Visakhapatnam has recently quashed reassessment proceedings against an assessee after holding that the Income Tax Department could not use the amended reassessment provisions to reopen a matter after the statutory time limit for assessment had already expired. The bench of Vice President Vijay Pal Rao and Accountant Member Manjunatha G observed, “Since the assessment u/s 153A already attained finality by expiry of limitation u/s 153B of the Act, the...

CIT(A) Has Discretion To Order Fresh Tax Assessment, But Must First Decide Reassessment Challenge: ITAT Mumbai

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has ruled that the CIT(A) has discretion to set aside an assessment and send the case back for a fresh assessment. However, the CIT(A) must first decide the taxpayer's basic legal objections on whether the reassessment itself was valid. Under Section 251(1)(a) of the Income Tax Act, the CIT(A) has the power to set aside an assessment made under Section 144. The ITAT observed that exercising this power does not remove the CIT(A)'s...

SaaS Support Does Not Amount To Transfer Of Technology Under India-US DTAA: ITAT Delhi

The Income Tax Appellate Tribunal at Delhi has recently held that payments received by US-based Branch Metrics Inc. from Indian customers for its standard SaaS products do not qualify as Fees for Included Services (FIS) under Article 12(4)(b) of the India-US DTAA.The tribunal found that while customers could use the platform, they were not enabled to apply the technology underlying it, failing the “make available” test under the treaty.A bench comprising Judicial Member Vikas Awasthy and...

ITAT Delhi Deletes Over ₹7,800 Crore Tax Adjustments Against Samsung India

The Delhi bench of the Income Tax Appellate Tribunal has deleted about ₹3,605 crore in adjustments for AY 2016-17 and ₹4,211 crore for AY 2017-18 in the case of Samsung India Electronics Pvt. Ltd. The tribunal also excluded Verizon Communications Pvt. Ltd. as a comparable for Samsung India's networking segment and upheld its use of the Berry Ratio for benchmarking distribution transactions.The bench comprising Judicial Member Anubhav Sharma and Accountant Member Naveen Chandra found Verizon...

ITAT Delhi Cuts Share Of BBC Global News' India Ad Revenue Attributed To Indian PE From 15% To 12%

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has reduced from 15% to 12% the share of BBC Global News Limited's Indian advertisement revenue treated as profit attributable to its Indian Permanent Establishment (PE). The same finding has been applied to assessment years 2017-18 to 2022-23.The ITAT took assessment year 2022-23 as the lead case. It held that while an increase from the earlier 8.75% rate was justified, the assessing officer had fixed the 15% rate merely on estimation....

Mere Presumption About Foreign Parent's Deputed Employees Can't Establish Permanent Establishment: ITAT Delhi

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has recently held that a mere presumption that employees of a parent company deputed to an Indian group entity rendered services on behalf of a non-resident assessee, without any cogent material to support it, is insufficient to establish a Permanent Establishment (PE) in India. A coram of Judicial Member Vimal Kumar and Accountant Member S. Rifaur Rahman observed that the Revenue had failed to establish that Honda Trading Asia...

ITAT Mumbai Quashes PCIT Revision Against Mumbai Trader As 'Larger Issue' Was Already Under Appeal

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has refused to uphold the Principal Commissioner of Income Tax's (PCIT) attempt to revise the assessment of a Mumbai-based trading company over alleged bogus purchases, ruling that the dispute was already pending before the Commissioner of Income Tax (Appeals) [CIT(A)]. A coram of Judicial Member Challa Nagendra Prasad and Accountant Member Prabhash Shankar observed, "The larger issue as to whether the purchases made by the assessee...

Bombay High Court Pulls Up ITAT Over Failure To Pronounce Reserved Judgments Within 90-Day Deadline

The Bombay High Court has pulled up the Income Tax Appellate Tribunal (ITAT) over the repeated practice of releasing matters reserved for judgment without pronouncing orders. A Division Bench of Acting Chief Justice Ravindra V. Ghuge and Justice Gautam A. Ankhad observed that Rule 34(5)(c) of the Income Tax (Appellate Tribunal) Rules, 1963, requires the tribunal to pronounce its judgment within 60 days of concluding the hearing and, in exceptional circumstances, within a further period of 30...

TPO Can't Treat Goodwill Amortisation As Operating Expense In Transfer Pricing: ITAT Delhi

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that amortisation of goodwill arising from acquisition of a business cannot be treated as an operating expenditure while computing the Profit Level Indicator (PLI) under the Transactional Net Margin Method (TNMM) for calcuating transfer pricing. Observing that such amortisation is "an abnormal item arising out of acquisition of business and not a regular operating expenditure", the tribunal ruled that the Transfer Pricing...

Payment Gateway Charges Paid By MakeMyTrip To Banks Are Not Commission, Not Liable For TDS: ITAT Delhi

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has dismissed the Revenue's appeal against MakeMyTrip India Pvt. Ltd., holding that payment gateway charges paid to banks are fees for banking services and not commission or brokerage. Upholding the Commissioner (Appeals)' order deleting the disallowance, the tribunal followed the Delhi High Court's ruling in MakeMyTrip's own case and observed, "Respectfully following the decision of the Hon'ble Jurisdictional High Court, we hold that...

HCL's Corporate Guarantees For Overseas Subsidiaries Attract Transfer Pricing Provisions: Delhi ITAT

The Delhi Bench of the Income Tax Appellate Tribunal has held that corporate guarantees issued by HCL Technologies Ltd. to its step-down overseas subsidiaries amount to indirect financing and therefore qualify as international transactions requiring transfer pricing benchmarking. Rejecting the Transfer Pricing Officer's reliance on commercial bank guarantee rates with an additional 200-basis-point mark-up, the tribunal held that an arm's length guarantee commission of 0.50% was appropriate. ...