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...

Generation Of Surplus From Year To Year Cannot Be Bar For Trust In Seeking Section 10 (23C) (vi) Exemption: Rajasthan High Court

The Rajasthan High Court has held that the assessee is being run as a trust solely for educational purposes, thus seeking the exemption under Section 10(23C)(vi) of the Income Tax Act of 1961, and the generation of surplus from year to year cannot be a bar in seeking such an exemption under the provision of law.The bench of Justice Pushpendra Singh Bhati and Justice Munnuri Laxman has observed that mere generation of surplus cannot be a basis for rejection of an application under Section...

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...

AO Competent To Invoke Section 154 Jurisdiction If Glaring Mistake Of Fact/Law Is Committed While Passing Assessment Order: Madras High Court

The Madras High Court has held that the Assessing Officer is not incompetent to invoke the jurisdiction under Section 154 of the Income Tax Act, 1961, if such officer had committed a glaring mistake of fact or law while passing the assessment order.The bench of Justice C. Saravanan has observed that the meaning of the expression “error apparent on the face of record” is wider than the expression “mistake apparent from the record.”. The petitioner/assessee had filed a regular return under Section...

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...

Clandestine Removal And Under-Valuation Charges Can't Be Sustained Merely Based On Assumptions And Presumptions: Delhi High Court

The Delhi High Court has held that the charges of clandestine removal and under valuation cannot be sustained merely on the basis of assumptions and presumptions. The absence of direct, credible evidence linking the respondents to the alleged offences necessitate the dismissal of the charges. The bench of Justice Yashwant Varma and Justice Ravinder Dudeja has observed that the physical verification of the stocks and the absence of discrepancies in the recorded quantity of the raw material as...

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...