The Hon’ble Mumbai Income-tax Appellate Tribunal (Mum ITAT) has evaluated and held that the reduction in share capital amounts to a ‘transfer’ u/s 2(47) and thereby gives rise to capital gains, if consideration is paid for such reduction. Please find attached herewith our Tax Bulletin on the decision of the Mumbai ITAT in the case of Carestream Health Inc. CLICK HERE TO REA.....

Bombay High Court Ruling: The CBDT is empowered to lay down broad guidelines for disposal of appeals by CIT(A). However, it cannot offer ‘incentives’ to CIT(A) for making enhancement and levying penalty. Such policy transgresses the exercise of quasi-judicial powers of the CIT(A) and is wholly impermissible and invalid under section 119 of the Act.   The Chamber of Tax Consu.....

  Supreme Court Ruling: Effect of dismissal of SLP filed before the Supreme Court Khoday Distilleries Ltd. vs. Mahadeshwara Sahakara Sakkare Karkhane Ltd. [Civil Appeal No. 2432 and 2433 of 2019] / [2019] 104 taxmann.com 25 (SC) Facts of the case: Mahadeshwara Sahakara Sakkare Karkhane Ltd. (MSSKL) had recoverable dues of around INR 1,00,76,630/- crores, along with interest.....

Bombay High Court Ruling: Whether the Transfer Pricing Officer can examine any specified domestic transaction, even if the same is not specifically referred to him by the Assessing Officer?   Times Global Broadcasting Company Ltd vs. Union of India & Ors.  [Writ Petition No. 3386 of 2018] [2019] 103 taxmann.com 388 (Bombay)   Facts of the case:   .....

Bombay High Court Ruling:   The shareholdings of parent company and its subsidiary cannot be clubbed for the purposes of determining the threshold of ‘substantial interest’ as specified in explanation (a) to section 40A(2)(b).   Acquisition of an asset (purchase of loans) from subsidiaries would not amount to  expenditure and is thus not a specified .....

Mumbai ITAT Ruling - Section 92 of the Act is not an independent charging section to bring in a new head of income or to charge tax on income which is otherwise not chargeable under the Act. Accordingly, the ITAT held that, if no income accrues or arises or is received by the assessee under section 5, no notional income can be brought to tax under section 92 of the Act.   Shilpa Shetty .....

Authority for Advance Rulings, New Delhi– Whether the Applicant has a permanent establishment in India as regards the use of a global network and infrastructure to process card payment transactions for customers in India and as regards other related issues? MasterCard Asia Pacific Pte Ltd, In re. [AAR No. 1573 of 2014] / [2018] 94 taxmann.com 195 (AAR - New Delhi)   Fac.....

Delhi ITAT (Special Bench) Ruling – Whether the Indian subsidiary of the assessee constitutes Permanent Establishment (PE) of the assessee in India on account of ‘signing, networking, planning and negotiation of offshore supply contracts in India’? If yes, whether any profit is attributable to the same, and the quantum thereof?   M/s. Nokia Networks OY vs. JCIT, New De.....

Supreme Court Ruling – The Guidance Note issued by Institute of Chartered Accountants of India on lease rental income which helps to compute lease equalisation charges, held to be allowable as a deduction. There is no express bar in the Income-tax Act, 1961 regarding the application of such accounting standards. CIT-VI vs. Virtual Soft Systems Ltd.     [Civil Appeal Nos......

Supreme Court (SC) Ruling – Whether the expenditure incurred (including interest paid on funds borrowed), while purchasing the shares/ stocks of a company for the purpose of gaining control over the investee company or as 'stock-in-trade' (i.e. as a business activity) and not as investment to earn dividends, can be treated as expenditure ‘in relation to income i.e. dividend inc.....

The Hon’ble Income-Tax Appellate Tribunal, Bangalore, in the case of Texport Overseas Pvt. Ltd. (‘the taxpayer’) held that the omission of clause (i) of section 92BA (definition of Specified Domestic Transaction) by virtue of the amendment of Finance Act, 2017 w.e.f. 01.04.2017, which referred to payments made to related parties covered under section 40A(2)(b).....

The Hon’ble Supreme Court held that Buddh International Circuit constitutes a fixed place permanent establishment (PE) of the foreign taxpayer (Formula One) where the commercial/ economic activity of conducting F-1 Championship was carried out.   Supreme Court of India Formula One World Championship Limited vs. Commissioner of Income-tax, International Taxation - 3, Delhi &.....

The Hon’ble Delhi Income-tax Appellate Tribunal (ITAT) has observed that employees of the foreign enterprise assigned to India for performing marketing and sales functions for the overseas group entities, used the liaison office of one of the group entities in India. Thus, the ITAT held that the assessee had both, a fixed place permanent establishment (PE) and agency PE, in India.  &.....

The Hon’ble Hyderabad Income-tax Appellate Tribunal (ITAT), in the case of Lalitha Karan held that the AO is duty bound to refer the matter to the DVO as per the provisions of section 50C(2) of the Income-tax Act, 1961, when on the facts and circumstances of the case, the assessee claims that the value adopted by the stamp duty authorities does not represent the fair market value, due to cer.....

The Kolkata Tribunal has dealt in detail on the concept of base erosion which was relied by the assessee, as its main argument that attribution of income to the foreign associated enterprise, under transfer pricing law, on account of interest on loan given; would automatically mean a deduction granted in law to the Indian associated enterprise.​   Instrumentarium Corporation Limited, .....

The Hon’ble SC reaffirmed the position under law that CIT is not required to issue any show cause while exercising its suo-motu revision power. The SC having reiterated the position that so long as the view taken by the AO is the possible view, the same ought not to be interfered with by the CIT under section 263 of the Act merely on the ground that there is another possible view of the matt.....

Madras High Court Ruling – Whether Section 94A(1) of the Act is ultra vires Articles 14, 19, 51, 253 and 265 of The Constitution of India (the Constitution) – Whether Notification No. 86 dated 1.11.2013 issued by the CBDT is ultra vires Section 94A of the Act r.w. Articles 14, 19 and 265 of  the Constitution – Whether Press Release issued by Ministry of Finance titled &ldquo.....

  Mumbai ITAT Ruling - Section 92 of the Act is not an independent charging section to bring in a new head of income or to charge tax on income which is otherwise not chargeable under the Act. Accordingly, the ITAT held that, if no income accrues or arises or is received by the assessee under section 5, no notional income can be brought to tax under section 92 of the Act. Shilpa Shetty .....

The Gujarat High Court held - the Explanation added to section 80-IB(9) by Finance Act (No.2) of 2009 defining the term ‘undertaking’ to treat all blocks licensed under single contract under New Exploration Licensing Policy (NELP) as a single undertaking with retrospective effect, held to be unconstitutional, violative of Article 14 of the Constitution and liable to be struck down - th.....

The Supreme Court reversed the order of Guahati High Court - definition of “income” in Section 2(24) of the Act is an inclusive one and includes losses also - upheld the clarificatory amendment of Section 143(1A) to be retrospective - the object of Section 143(1A) is the prevention of evasion of tax - provision should apply only to tax evaders - the burden is on the revenue to demonstr.....

Bombay High Court Ruling – Whether shortfall in premium of shares issued to non-resident holding company is to be considered as income as defined under the Act – Consequently, whether the said shortfall can be treated as deemed loan – Whether a charging provision can be read into Chapter X of the Act to tax notional income – Whether Chapter X is a code in itself   &.....

Whether TP provisions are applicable to the transaction of gift of shares to AE - Held that a company can also gift - Gift of shares held to be exempt u/s 47(iii) - In the absence of income arising in the case of a gift transaction, provisions of Section 92(1) do not apply - Adjustment on account of corporate guarantee given by assessee on behalf of its AE – Held, no addition on account of o.....

Adjustment on account of corporate guarantee given by assessee on behalf of its AE – Held, no addition on account of issuance of corporate guarantee can be made in absence of any impact on profits, income, losses or assets of an enterprise Adjustment on account of notional interest on share application money advanced to AE pending allotment of shares for a long time - Held that, no inter.....

Hyderabad Tribunal Ruling – Disallowance of management fees by the TPO on the basis that no tangible benefits have accrued to the assessee out of such payment – Whether TPO is justified in disallowing an expenditure in its entirety – When international transactions are benchmarked by applying TNMM[1], can individual expenses be benchmarked again using a different method – H.....