Delhi ITAT Holds AMP Spend Can't Be TP Transaction Without AE Understanding, Follows Sony India Ruling

On 30 July, the New Delhi Income Tax Appellate Tribunal (ITAT) held that AMP expenditure incurred by an Indian entity cannot be treated as an international transaction for transfer pricing purposes without any agreement, arrangement or understanding with its associated enterprise (AE), following the Delhi High Court's ruling in Sony India Pvt. Ltd. v. ACIT. A Bench comprising Judicial Member Satbeer Singh Godara and Accountant Member Manish Agarwal held that the issue of whether AMP expenditure...

Disseminating Bhagavad Gita Teachings Can't Be Treated As Religious Propagation: ITAT Chandigarh

Holding so, the ITAT set aside orders treating the World Sankirtan Tour Trust as a religious entity and denying it tax benefits.

Limitation Begins On Jurisdiction Transfer When Same AO Handles Searched And Other Person: ITAT Delhi

The New Delhi Income Tax Appellate Tribunal (ITAT) on 29 July held that where the Assessing Officer of the searched person and the “other person” under Section 153C of the Income Tax Act is the same, the limitation period for completing assessment begins from the date of transfer of jurisdiction under Section 127 and not from the date of recording satisfaction. A Bench of Judicial Member Vimal Kumar and Accountant Member Manish Agarwal quashed the assessment orders passed against Sudhir Agrawal...

Ex-Gratia Payment Under Pfizer VRS Is Capital Receipt, Not Taxable as Income From Other Sources: ITAT Pune

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has held that the ex gratia amount received by an employee under Pfizer Healthcare India Pvt. Ltd.'s voluntary retirement scheme is a capital receipt and cannot be taxed as income from other sources. Observing that it had consistently taken the same view in identical cases involving other employees of the company, the bench ruled, "We find that the identical issue had come up before the tribunal in the case of other employees of M/s....

ITAT Delhi Quashes Reassessment Against Chanel India, Deletes ₹3.08 Crore Transfer Pricing Adjustment

The Income Tax Appellate Tribunal (ITAT) Delhi has recently granted relief to luxury fashion brand Chanel's Indian arm, quashing reassessment proceedings initiated against Chanel (India) Private Limited beyond four years. It also deleted a ₹3.08 crore transfer pricing adjustment. It also deleted a ₹3.08 crore transfer pricing adjustment. The tribunal held that the subsidy received from its associated enterprise formed part of the company's operating income because it directly compensated its...

Book Entry Can't Decide Transaction Nature, Reimbursement Of Expenses Not Liable For TDS: ITAT Mumbai

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) on 1 July held that the nomenclature given to a payment in the books of account cannot determine the true nature of a transaction and that tax deduction at source (TDS) provisions do not apply where a payment is only reimbursement of expenditure without any income element in the hands of the recipient. A Bench comprising Judicial Member Siddhartha Nautiyal and Accountant Member Vikram Singh Yadav allowed an appeal filed by Maersk...

Charitable Trust Registration Can't Be Denied Over Expenditure Concerns Alone: ITAT Delhi

The Income Tax Appellate Tribunal (ITAT), Delhi, has recently directed the Commissioner of Income Tax (Exemptions) to grant charitable trust registration to Visan Foundation. It held that registration cannot be denied merely over concerns regarding expenditure without first examining whether the trust's objects are charitable and its activities are genuine. A coram of Judicial Member Kavitha Rajagopal and Accountant Member M. Balaganesh observed, "We do not find any discussion as to the objects...

ITAT Mumbai Grants LTCG Relief To Taxpayer, Rejects Revenue's Claim That Scrip Was Penny Stock

The Mumbai Income Tax Appellate Tribunal (ITAT) has allowed an individual taxpayer's claim for exemption on long-term capital gains arising from the sale of shares after finding that the transactions were genuine and supported by documentary evidence. It observed that there was nothing on record to establish that the company whose shares were sold was a penny stock. The tribunal also found no material linking the assessee to any alleged accommodation entry operators.Judicial Member Sandeep...

ITAT Delhi Deletes ₹5.19 Crore AMP Adjustment Against Fujifilm India Following Sony Ericsson Ruling

The Delhi Income Tax Appellate Tribunal (ITAT) on 20 July held that a transfer pricing adjustment for Advertising, Marketing and Promotion (AMP) expenditure cannot be sustained when it is computed by applying the Bright Line Test (BLT), following the Delhi High Court's ruling in Sony Ericsson Mobile Communications India Pvt. Ltd. A Bench of Accountant Member Ramit Kochar and Judicial Member Sudhir Kumar partly allowed the appeal filed by Fujifilm India Pvt. Ltd. and deleted the Rs. 5.19 crore...

ITAT Delhi Remands Partnership Firm's Reassessment, Faults Authorities' Cryptic Orders

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has remanded a reassessment involving a partnership firm's write-back of a retired partner's capital balance after finding that the tax authorities passed cryptic orders without specifying the provision under which the amount was chargeable to tax.A coram of Judicial Member Yogesh Kumar US and Accountant Member Ramit Kochar partly allowed the appeal for statistical purposes. While upholding the reopening of the assessment, it restored...

Automated Software Services Cannot Be Treated As FTS Without Examining Human Intervention: ITAT Delhi

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 17 July held that receipts from automated software services cannot be treated as Fees for Technical Services (FTS) under the India-Ireland Double Taxation Avoidance Agreement (DTAA) without first examining whether the services involve the requisite human intervention and possess the characteristics of specialised technical services. Judicial Member Vikas Awasthy and Accountant Member Brajesh Kumar Singh allowed an appeal filed by...

Salaries Paid By Foreign Bank's Head Office To Expatriates Working For Indian Branch Not Head Office Expenses: ITAT Mumbai

Salary paid by the head office of a foreign bank to expatriate employees working exclusively for its Indian operations cannot be treated as head office expenditure merely because the payment was initially made outside India, the Mumbai Income Tax Appellate Tribunal (ITAT) has held. A bench of Judicial Member Beena Pillai and Accountant Member Arun Khodpia dismissed the Revenue's appeal. It upheld the Commissioner (Appeals)' order allowing Standard Chartered Bank's claim for deduction of...