ESOP Cross Charges Paid To Overseas Ultimate Holding Company Is Allowable Expenditure: ITAT Allows Deduction To HP

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT), while ruling in favour of the HP, held that employee stock option plan (ESOP) cross charges paid to overseas ultimate holding companies are an allowable expenditure.The two-member bench headed by N.V. Vasudevan (Vice President) and Chandra Poojari (Accountant Member) has observed that the ESOP expenditure incurred is...

Cash Deposits Made Out Of Withdrawals For The Purpose Of Daughter's Marriage: ITAT Delete Addition

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that the assessee had explained that deposits were made out of cash withdrawals made earlier for the purpose of her daughter's marriage.The bench of Saktijit Dey (Judicial Member) has observed that the explanation furnished by the assessee was believable when the Assessing Officer has not brought on record any contrary...

Distribution Fees Paid By Google India To Google Ireland, For Distribution Of AdWords Programme In India, Not 'Royalty' : ITAT

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that the distribution fees paid by Google India to Google Ireland under a Distribution Agreement, under which Google India was appointed as a distributor of AdWords programme to advertisers in India, is not in the nature of 'Royalty' under the India-Ireland DTAA. The Bench of George George K (Judicial Member)...

ITAT Deletes Fees Related To The Period Of Tax Deduction Prior To June 1, 2015

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has deleted the levy of late fees of INR 40,000 related to the period of the tax deduction prior to 01.06.2015.The two-member bench of Rahul Chaudhary (Judicial Member) and M. Balaganesh (Accountant Member) has relied on the decision of Karnataka in the case of Fatehraj Singhvi Vs. Union of India in which it was held that the...

Any sum paid to an employee as a bonus or commission to be allowed as a deduction: ITAT Delhi

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that any sum paid to an employee as a bonus or commission for services rendered has to be allowed as a deduction.The bench of Saktijit Dey has observed that the reasonableness of the payment or the adequacy of services rendered by the employee is not relevant factors in deciding the allowability of a deduction.The...

Contract For Extended Warranty Of Bentley Cars, Entered Into By Exclusive Dealer With Indian Customers, Does Not Constitute A Dependent Agent PE In India: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that contract for extended warranty of Bentley Cars, entered into by an exclusive dealer with the Indian customers, does not constitute a dependent agent PE in India. The Bench of Saktijit Dey (Judicial Member) and Dr. Brr Kumar (Accountant Member) noted that the assessee/exclusive dealer of Bentley Cars purchased...

Liquidated Damages Received By Shipping Company, Not Exempt Under 'Tonnage Tax Scheme': ITAT

The Visakhapatnam Bench of theIncome Tax Appellate Tribunal (ITAT)has ruled that liquidated damages received by a shipping company cannot be included in computation of tonnage tax and therefore, they are not exempt under the 'Tonnage Tax Scheme', as provided under Chapter XIIG of the Income Tax Act, 1961. The bench of Duvvuru RL Reddy (Judicial Member) and S...

Income Tax Exemption Eligible On Activities Undertaken For Advancement Of General Public Utility: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that the income tax exemption under Section 11 of the Income Tax Act is eligible for activities undertaken for the advancement of general public utility.The two-member bench headed by Pramod Kumar (Vice President) and Rahul Chaudhary (Judicial Member) has observed that the activities of the appellant were directed toward...

Tax Cases Weekly Round-Up: 16 October To 22 October, 2022

Supreme Court Valuation Of Shares For The Purpose Of Gift Tax Should Take Into Consideration Limitation And Restrictions: Supreme Court Case Title: Deputy Commissioner of Gift Tax Versus M/s BPL Limited Citation: 2022 LiveLaw (SC) 848 The Supreme Court has held that the valuation of shares for the purpose of gift tax must take into consideration the limitations...

ITAT Deletes Disallowance u/s 14A Against Toyota As No Exempted Income Was Earned

The Banglore Bench of the Income Tax Appellate Tribunal (ITAT) has deleted the disallowance under section 14A of the Income Tax Act against Toyota as no exempted income was earned.The two-member bench headed by N.V. Vasudevan (Vice President) and Padmavathi S (Accountant Member) has noted that the AO has made the disallowance on the basis that the investment could potentially earn income,...

Vodafone Idea Not Liable To Deduct TDS On Discount Allowed To Distributors On Purchase Of Prepaid SIM Cards And Recharge Vouchers: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that Vodafone Idea is not liable to Deduct Tax at Source (TDS) on the discount allowed to the distributors on purchase of prepaid SIM Cards and recharge vouchers. The Bench of Vikas Awasthy (Judicial Member) and M. Balaganesh (Accountant Member) held that since the relationship between the assessee Company and...

Payment Made By Assessee To Non-Resident Supplier Amount To "Royalty" And Liable To Deduct TDS: ITAT

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has held that the payment made by the assessee to the non-resident supplier would amount to royalty and there is an obligation on the part of the assessee to deduct tax at source.The two-member bench of T.R. Senthil Kumar (Judicial Member) and Annapurna Gupta (Accountant Member) has observed that the introduction of Explanation 5...