ALP Adjustment Falls Within Tolerance Band Of +/- of 5%: ITAT Deletes TP-Adjustment On Payment For Consultancy, Professional Fees

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has deleted the TP adjustment on payment for consultancy and professional fees and other services by the assessee to its Associated Enterprises (AEs).The bench of Anubhav Sharma (Judicial Member) and M. Balaganesh (Accountant Member) has observed that ALP adjustment falls within the tolerance band of +/- of 5% as per the second proviso to section 92C(2) of the Income Tax Act, 1961.One of the viable solutions for regulating Transfer Pricing...

Service Tax Exemption On Renting Of Immovable Property Service For Transmission Or Distribution Of Electricity By TANGEDCO: CESTAT

The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that service tax is not payable on the renting of immovable property services for the transmission or distribution of electricity by Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO).The bench of P. Dinesha (Judicial Member) and M. Ajit Kumar (Technical Member) has observed that all taxable services provided for the transmission and distribution of electrical energy are exempt from the...

Tax Authority Based In Delhi Lacks Jurisdiction On Withholding Tax Liability On Share Purchase Transaction: Delhi High Court Quashes Tax Demand Against Sumitomo

The Delhi High Court has deleted the tax demand against Sumitomo Mitsui Financial Group on the grounds of lack of jurisdiction.The bench of Justice Rajiv Shakdher and Justice Girish Kathpalia has observed that the jurisdiction on the withholding tax liability on the transaction of share purchase by the Assessee was already exercised by the tax authority based in Mumbai, thus the tax authority based in Delhi had no jurisdiction to pass the order.The petitioner/assessee has challenged the order...

Waste, Gums, Fatty Acids Arising During Manufacturing Of Vegetable Oils Are Eligible For Excise Duty Exemption: CESTAT

The Chandigarh Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that waste, gums, fatty acids, etc. arising during the course of the manufacture of vegetable oils are eligible for the excise duty exemption.The bench of S. S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) has observed that waste, gums, fatty acids, etc. arising out of the manufacture of vegetable oils are waste and eligible for exemption under Notification No. 89/95.As per Notification...

Pre-Fabricated Shelters, Towers Essential Ingredient Of Telecommunication Service: CESTAT Allows Cenvat Credit

The Chandigarh Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that prefabricated shelters and towers are essential ingredients of telecommunication services and qualify as input services.The bench of S. S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) has observed that towers and pre-fabricated shelters form an essential ingredient in the provision of telecommunication service as they are used for the purpose of supplying the service and would...

AO Can’t Ask Assessee To Prove Non-Occurring Of An Event, ITAT Deletes Income Tax Addition Worth Rs. 2 Crores

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has deleted the income tax addition worth Rs. 2 crores and held that the AO cannot ask the assessee to prove the non-occurring of an event.The bench of Anubhav Sharma (Judicial Member) and Shamim Yahya (Accountant Member) has observed that it is not proper on the part of the AO to ask the appellant to prove with witnesses and documentary evidence the non-occurring event. The witnesses and documentary evidence are called upon to prove the...

Capital Gain Exemption Not Available For A Residential House Purchased Abroad After April 1, 2015: ITAT

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that capital gain exemption is not available for a residential house purchased abroad after April 1, 2015.The bench of N. K. Choudhry (Judicial Member) and Prashant Maharishi (Accountant Member) has observed that for the period prior to AY 2015-16 or to the introduction of the words “in India” in Section 54 of the Act vide Finance Act No. 2 of 2014, which came into effect on April 1, 2015, the assessee would get the benefit of...

Payment To UK-Based Company For Preparing Candidate Written Report By CAE Simulation Training Is Not A Royalty: ITAT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that payment to a UK-based company for preparing candidate written reports by CAE Simulation Training is not a royalty.The bench of G.S. Pannu (President) and Astha Chandra (Judicial Member) has observed that the candidate’s report is delivered to the assessee electronically, which is in the nature of a copyrighted product, and mere access to use the server or software to download the reports cannot be regarded as a transfer of any...

‘Non-Cooperative Attitude’ Cannot Be The Basis Of Imposing Penalty: ITAT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that a ‘non-cooperative attitude’ as such in itself cannot be the basis for imposing penalties without specifically bringing on record the specific notices and their specific non-compliances.The bench of Anubha V Sharma (Judicial Member) and N.K. Billaiya (Accountant Member) has observed that unless it is established in the assessment order or even under the penalty order that at the time of the assessment proceedings itself, AO...

CBDT Allows Income Tax Exemption To Uttar Pradesh Expressways Industrial Development Authority

The Central Board of Direct Taxes has granted the income tax exemption to ‘Uttar Pradesh Expressways Industrial Development Authority’ under section 10(46) of the Income Tax Act.The Uttar Pradesh Expressways Industrial Development Authority is an Authority constituted by the State government of Uttar Pradesh. The income tax exemption shall be applicable on the income arising out of grants received from the state government; money received from the disposal of land, building and other properties,...

TNMM Should Be Applied In Respect Of International Transaction Of `Sale Of Finished Goods’: ITAT

The Pune bench of the Income Tax Appellate Tribunal (ITAT) has held that the Transactional Net Margin Method (TNMM) should be applied in respect of international transactions of `Sale of finished goods’.The bench of R.S. Syal (Vice President) and S.S. Viswanethra Ravi (Judicial Member) has observed that, in view of huge quantitative differences, one cannot say that the price charged for a product sold in huge quantities can be taken as a comparable price for the sale of lower units of the same...

Employee Stock Option Expenses Revenue In Nature: ITAT Deletes Disallowance Against Cleartrip

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that employee stock option expenses are revenue in nature.The bench of Sandeep Singh Karhail (Judicial Member) and Prashant Maharishi (Accountant Member) has directed the assessing officer to delete the disallowance of employee stock option expenditure of Rs. 6,064,232 against Cleartrip.The appellant/assessee has debited a sum of Rs. 6,065,232 to the profit and loss account because of employee stock option scheme costs.The AO...