Delay In Allotting Shares No Basis To Treat Share Application Money In Hands Of Overseas AE As 'Loan': Mumbai ITAT Deletes Notional Interest

The Mumbai ITAT held that when no income had accrued from the transaction of remittance of share application money by assessee to its overseas AE, then such transaction cannot be subjected to the transfer pricing provisions The ITAT deleted a transfer pricing addition made by the TPO on account of notional interest on share application money paid by assessee to...

Similarity Of Functional Filters & Business Model Is Necessary For Including/ Excluding Comparable To Determine Arm's Length Price: Delhi HC

The Delhi High Court noted that the present appeal is confined only to inclusion/ exclusion of certain uncontrolled entities as comparable for purpose of determining arm's length price (ALP) of assessee company/ Appellant.Further, for purposes of benchmarking, there must be similarity of functional filters, product homogeneity and business model, in order to arrive at suitable comparable...

Employee Working Beyond Banking Hours May Be Classified As Violation Of Banking Rules, But No Basis To Assume Additional Income: Delhi ITAT

The Delhi ITAT deleted the addition made by AO in the absence of any supporting evidence, which was merely based on assumption and not on any material recovered during search and seizure. The ITAT further clarified that assessee/ employee doing overtime beyond working hours may be classified as violation of banking rules, but could not form basis for addition, assuming that assessee...

Current Transactions Pertaining To Conveyance Expenses Incurred By Holding Company On Behalf Of Subsidiary Is Not Deemed Dividend: Delhi ITAT

The Delhi ITAT held that transaction between assessee and its subsidiary cannot be treated as deemed loan u/s 2(22)(e), as they are current transactions that pertain to travelling & other expenses incurred by assessee on behalf of its subsidiary. Any loan/ advance given by a closely held company to a shareholder holding 10% or more voting power is considered a dividend under...

Ahmedabad ITAT Deletes Addition Of Decentralized Govt Grants Merely Routed Through Assessee, Directly Utilized By Other Govt Agencies

Finding that assessee had followed a consistent and reasonable policy in recognizing income, and the amount in question was rightfully excluded from taxable income, the Ahmedabad ITAT deleted the addition made by AO on account of understatement of income. The ITAT held so after emphasizing that said income was never accrued to assessee nor did it represent real income as the funds...

Banks Can Claim Tax Deductions For Broken Period Interest On HTM Securities If Held As Trading Assets: Supreme Court

The Supreme Court on Wednesday (October 16) held that banks can claim tax deductions for broken period interest on held to maturity (HTM) government securities if they are held as trading asset. “Therefore, on facts, if it is found that HTM Security is held as an investment, the benefit of broken period interest will not be available. The position will be otherwise if it is held...

Interest On Delayed Customs Duty Is Compensatory In Nature And Hence Allowable Expenditure U/S 37(1): Bangalore ITAT

Finding that the interest payment is incurred wholly & exclusively for business purposes, and is neither personal nor capital in nature, the Bangalore ITAT held that interest on delayed customs duty cannot be treated at par with penalty.The ITAT therefore clarified that such interest payment is an accretion to the main payment and not penalty, and hence, allowable as revenue expenditure...

SCN Was 'Gloriously Silent' On Provisions Of GST Act Which Were Allegedly Infringed: Delhi High Court Quashes Order

Finding that the SCN as well as the final order fails to provide any clue with respect to the provision of the statute which was alleged to have been violated or infringed, the Delhi High Court quashes the SCN & the order of cancellation of GST registration. “The SCN is gloriously silent with respect to the provisions of the GST Act which are alleged to have been...

Value Of Free Fuel Can't Be Added To Value Of Taxable Supply U/S 15 Of CGST Act: Uttarakhand HC

The Uttarakhand High Court held that when as per the agreement, the cost of fuel was to be borne by recipient, then such cost cannot be subjected to charge of GST by adding its value in the transaction value of GTA service.Pointing that the cost of fuel cannot be added in the account of the transporter, as was governed by the GST rules, the Division Bench comprising Justice Ritu Bahri and...

Rejection Of Application For Voluntary Cancellation Of GST Registration Didn't Contain Reasons: Bombay HC Quashes Rejection Order

The Bombay High Court ruled that since the revocation orders for registration cancellation on petitioner's application were passed contrary to principles of natural justice, all the subsequent proceedings initiated thereafter, which are consequential, shall be quashed.“Before the revocation of cancellation of registration, the Petitioner was not supplied with the documents on the basis of...

Failure Of AO To Conduct Enquiry, Summarily Disallowing Expenses Was Mechanically Endorsed By CIT(A) & ITAT: Bombay HC Quashes Assessment

Observing that a mechanical approach & tactically equitable approach of convenience cannot be endorsed, the Bombay High Court quashes the ITAT's order, upholding an ad-hoc disallowance of 10% of expenses alleging as bogus purchases despite returning a firm finding that the AO's order was untenable, The High Court outlined that once a categorical observation is rendered by...

Notice Issued U/S 148A(B) Of Income Tax Act Against Dissolved Firm Is Not Valid: Gujarat High Court

The Gujarat High Court stated that notice issued under section 148A(b) of the Income Tax Act, 19861 against dissolved firm is not valid. The Division Bench of Justices Bhargav D. Karia and Mauna M. Bhatt was dealing with a case where the Assessing Officer/respondent issued an impugned notice under Section 148A(b) of the Income Tax Act, 1961, in the name of the partnership firm and...