The Revenue’s love for TDS provisions is ‘boundless’ and ‘infinite’. The evidence of this is their tinkering of TDS provisions in every Finance Bill. They cannot ‘live’ without amending the TDS provisions in every Finance Bill. Finance Act, 2021 had inserted a new provision with an objective of to ensure filing of return of income […]
Very apt observations of Tribunal on selection of MAM
Fortune Infotech Ltd. v ACIT [2016] 66 taxmann.com 92 (Ahmedabad – Trib.) The Tribunal observed that “A method selected for benchmarking must be a permissible method to be included in the consideration zone, but even it’s presence in the consideration zone is not good enough to justify its application for benchmarking the international transactions on […]
WHETHER TRANSFER PRICING LAW IS APPLICABLE IF NONE OF THE METHODS CAN BE APPLIED
The ALP has to be computed as per section 92C and Rules thereunder. This is a statutory mandate. An interesting issue arises as to whether the taxpayer can argue that it is impossible to compute ALP as per any of the prescribed methods and therefore transfer pricing provisions are not applicable to it or in […]
PCIT vs. Saravana Selvarathnam Trading and Manufacturing Pvt. Ltd.; [2019] 415 ITR 146 (Madras HC)
The High Court held that embezzlement of cash by director of assessee is allowable as Business loss and recovery of amount or outcome of pending criminal prosecution against director before Magistrate Court is not relevant. Facts The assessee claimed as bad debt u/s 36 of the Income-tax Act, 1961 the amount embezzled by a director, […]
KINGFISHER AIRLINES LTD. vs. DDIT ITA No.: 86 & 87/Bang./2011 and 143 & 144/Bang./2011
During the years under consideration, it had deputed its pilots and cockpit crew to non-resident companies for training on flight simulators. The ITAT held that since hiring of simulator by itself has no purpose, fee paid for simulator is not royalty. Further, in absence of FTS article in India-UAE DTAA, it was to be treated […]
3F INDUSTRIES LTD. vs. ACIT (2019] 108 taxmann.com 79 (Vizag. – Trib.)
The ITAT held that Compensation paid for contractual default and Rebate given for quality issues is business profits and same is not taxable in India if recipient does not have PE in India FACTS The assessee was an Indian company engaged in trading of certain products. The assessee procured the products from suppliers in India […]
COMPUTATION OF ALP – DEVIATIONS FROM PRESCRIBED METHODOLOGY PERMITTED
Section 92C(1) provides that ALP of international transaction and SDT shall be determined by adopting “MAM”. Sub-section (2) provides that most appropriate method shall be applied, for determination of ALP, in the manner prescribed. Rule 10B lays down the methodology for computation of ALP for each of the method. The selection of one method as […]
INTEL ASIA ELECTRONICS INC v ADIT [2011] 9 taxmann.com 197 (Bang.), [2011] 140 TTJ (Bang.) 513
In the context of sale of the taxpayer’s PE as a ‘going concern’ to the AE and where no similar transactions in an uncontrolled situation to compare are available, The ITAT observed that the valuation determined by the registered valuer could be the most appropriate means under the CUP method. However, the ITAT finally directed […]
KODAK INDIA PVT LTD v ACIT (2013) 155 TTJ 697 (Mum ITAT)
The Tribunal rejected the action of the TPO of computing ALP by allocating the consideration received on sale of business on the basis of revenue ratio on the ground that it is not prescribed method and no seventh method could be adopted by the TPO. Facts The taxpayer sold its medical – imaging business to […]
CIT v CA COMPUTER ASSOCIATES INDIA PVT LTD (2013) 351 ITR 69 (Bom)
It was held that the ALP should be determined as per the procedure prescribed. Any deviation from the prescribed procedure cannot be sustained. Facts The taxpayer was engaged in the business of licensing mainframe, midrange and system infrastructure software products of CA Management Inc. of the USA. The taxpayer had set-up a Technical Support Centre […]