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...

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...

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...

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,...

‘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...

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...

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...

Tax Cases Weekly Round-Up: 10 September To 16 September, 2023

Delhi High Court Overlooking Assesssee’s Reply Demonstrates Non-Application Of Mind By The AO: Delhi High Court Case Title: Aphv India Investco. Private Limited Versus ACIT The Delhi High Court has quashed the draft assessment orders, final assessment orders, and consequential demand on the grounds that the assessing officer inadvertently overlooked the email reply of...

TDS Not Required To Be Deducted At The Time Of Grant Of ESOP: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that TDS is not required to be deducted at the time of grant of an employee stock ownership plan (ESOP).The bench of Rahul Chaudhary (Judicial Member) and Prashant Maharishi (Accountant Member) has observed that the basic objective of TDS is to ‘pay tax as you earn, and the taxes are not required to be deducted at source...

Issuance Of Bonus Shares Does Not Amount To Transfer Of Property And Does Not Attract Section 56(2)(vii)(c): ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that in the issue of bonus shares, the money remains with the company and nothing comes to the shareholders as there is no transfer of the property and the provisions of Section 56(2)(vii)(c) of the Income Tax Act.The bench of Anubhav Sharma (Judicial Member) and M. Balaganesh (Accountant Member) has observed that when...

Assessment Invalid On Account Of A Mechanical Non-Speaking Approval Under Section 153D: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that assessment invalid on account of a mechanical non-speaking approval under Section 153D of the Income Tax Act.The bench of Kuldip Singh (Judicial Member) and S. Rifaur Rahman (Accountant Member) has observed that the assessing officer has passed a draft assessment order making huge additions, and such huge additions...

Cognizant Technology Liable For Dividend Distribution Tax On Buyback Of Rs 19,000-Crore Shares: ITAT

The Chennai Bench of Income Tax Appellate Tribunal (ITAT) has held that Cognizant Technology is liable to pay dividend distribution tax on the buyback of Rs. 19,000 crore shares.The bench of Mahavir Singh (Vice President) and Shrimanjunatha. G (Accountant Member) has observed that the purchase of its own shares through a scheme sanctioned by the jurisdictional HC in terms of provisions of...