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Income Tax : The faceless tax assessment scheme in India faces legal disputes over jurisdiction between JAO and FAO. Learn about key court ruli...
Income Tax : Budget 2025 raised the Section 87A rebate limit to ₹12 lakh but restricted its use on special rate income. Learn about key chang...
Income Tax : Understand the updated TDS rates for FY 2025-26 (AY 2026-27). Comprehensive chart covering salary, interest, dividends, rent, and ...
Income Tax : Budget 2025 revises income tax slabs, making ₹4,00,000 tax-free. New rates range up to 30% for income above ₹24,00,000. Key de...
Income Tax : Income tax bill, 2025 aims to replace Income Tax Act, 1961, simplifying tax laws. Questions arise about its impact on revenue, lit...
Income Tax : The Institute of Cost Accountants of India seeks inclusion of Cost Accountants in the definition of "Accountant" under Section 515...
Income Tax : Explore the Finance Bill 2025 highlights, including revised tax rates, TDS/TCS amendments, ULIP taxation, and updated rules for sa...
Income Tax : ICMAI addresses the non-inclusion of 'Cost Accountant' in the Income Tax Bill 2025. The Council is engaging with policymakers to e...
Income Tax : Lok Sabha issues corrigenda for the Income-tax Bill, 2025, correcting references, formatting, and legal citations. Read the key am...
Income Tax : KSCAA's representation to CBDT highlights challenges in the Vivad Se Vishwas Scheme 2024, focusing on delayed appeals and suggesti...
Income Tax : ITAT Ahmedabad ruled that mere suspicion cannot justify tax additions, deleting an Rs. 18 lakh addition in a property investment d...
Income Tax : Karnataka High Court held that TDS is not deductible on payment to non-residents for advertisements in several social medias like ...
Income Tax : ITAT Mumbai removes addition in Kamal Clearing & Forwarding case, ruling that income was already declared and no evidence of money...
Income Tax : ITAT Lucknow held that cash deposits out of the past savings during demonetization being reasonable and as per social standing of ...
Income Tax : ITAT Bangalore held that delay in cash deposits, during demonetization, due to unforeseen circumstances like laxmi pooja and staff...
Income Tax : Key updates on income tax deduction from salaries under Section 192 for FY 2024-25, including amendments, surcharge rates, and new...
Income Tax : CBDT extends the due date for filing Form 56F under Section 10AA(8) and 10A(5) of the Income-tax Act, 1961, to March 31, 2025, for...
Income Tax : The Central Government notifies Punjab RERA for tax exemption under Section 10(46A) of the Income-tax Act, effective from the 2024...
Income Tax : The Indian government is set to introduce the new Income Tax Bill, 2025, in the Lok Sabha on February 13, 2025. This comprehensive...
Income Tax : Bhaikaka University, Gujarat, is approved for scientific research under Section 35(1)(ii) of the Income Tax Act, 1961, effective f...
The fact that the Agent has deducted tax under section 195 will not be a bar to proceed and pass an order under section 163 against the agent
In a recent decision, in the case of CIT v. Vasisth Chay Vyapar Ltd. (Delhi High Court) [ITA 552/2005] dated 29 November, 2010 , the Delhi High Court in the context of loans given by a Non-Banking Financial Company (“NBFC”) held that in a scenario where interest on Non Performing Assets (“NPA”) was doubtful of recovery due to adverse financial circumstances of the borrower, it was legitimate move to infer that interest income had not accrued and was therefore not exigible to tax, irrespective of the fact that assessee followed mercantile system of accounting.
The decision of the High Court would bring some relief to NBFCs. However, given the fact that this is a debatable issue and unless affirmed by the SC, the tax authorities may continue to dispute the issue. This debate arises primarily due to the fact that under the Act, there is a specific provisions under Section 43D of the Income tax Act, 1961 dealing with interest on NPA with respect to specified financial institutions (including banks) which does not include NBFCs.
Recently, the Mumbai bench of Income-tax Appellate Tribunal (the Tribunal) in the case of Arif Akhatar Husssain (ITA No. 541/Mum/2010) held that the provisions of Section 50C of the Income-tax Act, 1961 (the Act) is applicable to the capital gains arising on transfer of Development Rights by the taxpayer.
The Mumbai bench of the Income Tax Appellate Tribunal (“ITAT”) recently pronounced its ruling in the case of M/s Nimbus Communications Limited vs. ACIT Circle 11(1), Mumbai for Assessment Year 2004-05, ITA No. 659 7/Mum/09 , on transfer pricing issues arising from amount overdue to the Taxpayer from its associate enterprise (“AE”). The tribunal held in favour of the Taxpayer observing that if a commercial transaction was at arms? length, no transfer pricing addition for non-charging of interest on overdue debt was warranted.
During the assessment year 2005-06, the Taxpayer sold fabrics worth INR 66,101,237 to its associated enterprise, M/s Spin International Inc., incorporated in the U.S., and relied on the Comparable Uncontrolled Price Method (“CUP Method”) to justify the arm’s length nature of such transaction. Upon examination of the Form 3CEB submitted by the Taxpayer, the Assessing Office (“AO”) found that in respect of two qualities of materials, the items were sold to the associated enterprise at much lower price compared to the price charged in comparable uncontrolled transactions entered into by the Taxpayer.
The Mumbai bench of the Income Tax Appellate Tribunal (Tribunal) recently pronounced its ruling in the case of Monsanto Holdings Private Limited vs. Dy. Commissioner of Income Tax Range – 8(2) (Mumbai Bench), ITA No: 9130/Ml/2010 , on transfer pricing issues arising from international transactions entered by the Taxpayer with its Associated enterprises (AEs). The Tribunal ruled in favour of the Revenue stating that Resale Price Method (RPM) cannot be applied based on expected gross margin. Application of RPM is required to be based on examination of audited accounts and consequent computation of actual profit margin.
TPO cannot reject TP method adopted by assessee on the ground that the comparables are wrongly chosen. Further the ALP has to be determined with respect to an international transaction and not at an entity level.
Brief:- The DRP, being an authority created under a statute and conferred with the powers, has the obligation to act as a body living to the expectations which the law mandates. The DRP has to afford adequate opportunity for personal hearing and deal with the issues urged by a speaking order which would reflect cogent reasons. This is apt to say so that no assessee can have any kind of apprehension that the approach to the DRP is perfunctory.
Brief: High Court held that It is not possible to carry on educational activity in such a way that the expenditure exactly balances the income and there is no resultant profit, for, to achieve this, would not only be difficult of practical realization but would reflect unsound principles of management. The assumption that for exemption there should not be any surplus and if it is otherwise the institution society exists for profit and not charity is not justified.
