Warranty Costs Are Not Part Of AMP Expenditure, Clarifies Bangalore ITAT

The Bangalore ITAT ruled on treatment of share-based compensation (SBC), depreciation & amortization as operating expense and inclusion of delivery charges & warranty expenses in AMP expenditure.The Bench comprising George George K (Vice President) and Laxmi Prasad Sahu (Accountant Member) observed that “these expenditure cannot be regarded as having been incurred for the purpose of development of brand since these are post sales activities and part of sales expenditure. It is also not a...

Foreign-AEs Being Least Complex Entities Can Be Accepted As Tested Party, Confirms Kolkata ITAT

The Kolkata ITAT accepted foreign AE as tested party, and deleted the ALP adjustments qua export of software services and receipt of account management charges in case of assessee, engaged in providing a wide range of IT solutions.The Bench comprising Rajpal Yadav (Vice President) and Girish Agrawal (Accountant Member) observed that “Co-ordinate bench, ITAT, Kolkata also considered the functions performed, asset employed and risk assumed i.e. FAR analysis of the assessee vis-à-vis the foreign...

Foreign AE Can Be Accepted As Tested Party: Mumbai ITAT Deletes ALP Adjustment Qua Export Of Formulations

While deciding on ALP adjustments qua export of goods to AEs and guarantee commission in case of a pharma company, engaged in manufacturing and marketing of formulations in India, the Mumbai ITAT accepted foreign AE as tested party.The Bench comprising B.R Baskaran (Accountant Member) and Rahul Chaudhary (Judicial Member) observed that “so far the assessee herein is concerned and qua the transfer pricing provisions, what is required to be seen is whether the price realized on export of products...

Inconsistency In Treatment Of Forex Loss Without Plausible Reason For Deviation, Justifies Revisionary Interference: Hyderabad ITAT

The Hyderabad ITAT upheld the CIT's revision order citing inconsistency in treatment of forex loss without plausible reason for deviation in case of Corteva Agriscience Services India Pvt. Ltd engaged in providing sourcing, finance including evaluation of prospective customers and various other services to group companies.The Bench comprising Rama Kanta Panda (Vice President) and K. Narasimha Chary (Judicial Member) observed that “non-considering of the consistent treatment given by the assessee...

Business Restructuring Amongst Foreign Group Entities To Eliminate Duplicate Corporate Procedure Is 'International Transaction' U/s 92B: Mumbai ITAT

The Mumbai ITAT ruled that as per Explanation to section 92B of the Income tax Act, the transaction of business restructuring shall be considered an international transaction, irrespective of the fact whether it has a bearing on the profit, income, losses, or assets of such enterprises.The ITAT also upheld the disallowance of interest on Compulsory Convertible Debentures (CCDs) and treatment of cash payment by assessee to its parent company, pursuant to scheme of amalgamation, as deemed loan....

Addition Made U/s 69C Based On Time Barred Assessment Is Not Sustainable: Kolkata ITAT

On finding that there is no evidence on the file either direct or indirect or even circumstantial to show that the order was passed by the AO on or before the last date of limitation for the same, the Kolkata ITAT held that the assessment order passed by the AO is time-barred and deleted the addition made u/s 69C of the Income Tax Act, 1961.The Bench of the ITAT comprising of Sanjay Garg (Judicial Member) and Rajesh Kumar (Accountant Member) observed that, “Even the impugned assessment order was...

Form No. 68 Could Not Be Uploaded Due To Error; Mumbai ITAT Directs AO To Redecide On Application For Immunity From Penalty U/s 270AA

On finding that no opportunity of hearing was provided to the assessee before rejecting its application for immunity from penalty, the Mumbai ITAT set-aside the whole issue back to the file of the AO to decide the issue of availability of immunity from imposition of penalty u/s 270AA of the Income Tax Act, 1961.The Mumbai ITAT also directed the assessee to provide the evidences of filing of form number 68, which could not be uploaded due to the error. The Bench of the ITAT comprising of Vikas...

Mumbai ITAT Allows Depreciation On 'Right To Collect Toll Tax' On Infrastructure Facilities

While following the decision of the co-ordinate benches in assessee's own case, the Mumbai ITAT directed the AO to grant depreciation on the right to collect toll tax on infrastructure facilities considering same as intangible asset entitled to depreciation at the rate of 25%.The ITAT also directed the AO to re-compute the deduction allowable to the assessee u/s 80IA (4) of the Income Tax Act, 1961, by replacing the amount of amortised value of deduction with allowable depreciation. The Bench of...

Income From Sale & Subscription Of Journals Is No Basis To Deny Exemption U/s 11 If Such Activities Are Not Main Objects Of Trust: Mumbai ITAT

On finding that the assessee trust is not into the business of publishing, printing, and subscription of the books as the same is not the main object of the assessee trust, the Mumbai ITAT upheld the decision of CIT(A) that the assessee's trust is eligible for exemption u/s. 11 of Income Tax Act, 1961.The Bench of the ITAT comprising of Kavitha Rajagopal (Judicial Member) and B R Baskaran (Accountant Member) observed while relying on the decision of Supreme Court in the case of CIT vs. Sai...

Once Reassessment Framed By AO Is Not Sustainable,Order U/s 263 Seeking To Revise Reassessment Is Not Acceptable: Delhi ITAT

While allowing the appeal of assessee in respect of the fact that whether the PCIT had validly assumed his revision jurisdiction u/s 263 of the Income Tax Act, 1961, both in law and on facts, the New Delhi ITAT held that the PCIT erred in assumption of jurisdiction u/s 263 of the Income Tax Act, 1961.The Bench of the ITAT comprising of Saktijit Dey (Vice President) and M. Balaganesh (Accountant Member) observed that, “Once, the reassessment order per se framed by the AO is not sustainable in the...

Once Safe Harbour Rule Of 5% Is Held As Applicable, No Addition Can Be Made By Invoking Sec 50C, Reiterates Kolkata ITAT

On finding that CIT(A) was justified in adopting the valuation given by the DVO and has rightly considered the safe harbour rule of 5% as per third proviso to section 50C of the Income Tax Act, 1961, the Kolkata ITAT upheld the CIT(A)'s decision to delete the addition made under the head of “Capital gains”.The Bench of the ITAT comprising of Sanjay Garg (Judicial Member) and Manish Borad (Accountant Member) reiterated while agreeing with the CIT(A)'s observation that, “once the safe harbour rule...

Retracted Statement Of Person Without Any Nexus With Taxpayer Can't Form Basis For Addition U/s 69A: Mumbai ITAT

The Mumbai ITAT deleted the addition made by AO u/s 69A of the Income Tax Act, 1961, on finding that retracted statement of the person representing the said firm, who otherwise neither named nor specified the role and also not connected the assessee specifically.The Bench of the ITAT comprising of Narender Kumar Choudhry (Judicial Member) and Padmavathy S. (Accountant Member) observed that, “we have failed to understand that how the name as mentioned in the said diary, as 'NENSIBHI ELLA' can be...