CUP method is the ‘most appropriate method’ to determine the arm’s length price in the cases of generic drug manufacturers so long as comparables are available and while innovators of drugs are allowed monopolistic pricing during the period when patents are in force so as to recoup the R & D costs, once the patent period expires, the higher pricing of the drug vis-à-vis prices of generic drugs manufactured by competitors cannot be justified on the ground of heavy R&D costs.
In Circular 204 dated 24.7.1976, the CBDT has accepted that u/s 23(1)(a) the “sum for which the property might reasonably be expected to let from year to year” is the municipal valuation of the property. The same view that the Municipal valuation is the annual value u/s 23(1)(a) has been taken in CIT vs. Prabhabati Bansali 141 ITR 419 (Cal) & M.V. Sonavala vs. CIT 177 ITR 246 (Bom); The contrary view in Makrupa Chemicals 108 ITD 95 (Mum) & Baker Technical Services (P) Ltd 126 TTJ (Mumbai)(TM) 455 that annual value determined by the Municipal authorities is not binding on the AO while determining the annual value u/s 23(1)(a) if it can be shown that the rateable value under the municipal laws does not represent the correct fair rent cannot be followed in view of M.V. Sonavala 177 ITR 246 (Bom) where it was held that the rateable value under the municipal law has to be adopted as annual value u/s 23(1)(a); Note: The issue whether notional interest can be considered u/s 23(1)(a) is pending before the Full Bench of the Delhi High Court in CIT vs. Moni Kumar Subba
Assessing interest expenses disallowance. Own funds cover interest-free advances. Proportionate disallowance if own funds insufficient. Judicial discipline emphasized.
Revised Accounting Standard 7 – Construction Contract is applicable to only contractors and not to builders and real estate consultants. Accordingly, the Project Completion Method consistently followed by the taxpayer for recognising revenue in the books of accounts cannot be regarded as an unreasonable.
The Court has made it clear that though there are no hard and fast rules regarding grant of stay, prudence, discretion and circumspection are called for and stay should not be granted as a matter of course. Considerations about balance of convenience, question of irreparable injury and implications to public interest have to be borne in mind
The assessee is a company. It is engaged in the business of corporate and project finance and merchant banking. The assessee had taken premises at Bardy House, Veer Nariman Road, Fort, Mumbai-400 001 on rent. During the previous year, it incurred an expenditure of Rs. 30,94,066/- in connection with renovation of the aforesaid leasehold premises. The assesse
Brief facts of the case are that the assessee received a gift of Rs.30,00,000/- from Mrs. Chandra Hingorani. The genuineness of the gift was examined by the Assessing Officer by considering the various documents including taking statements of the assessee which was recorded on 19.12.2006.
The assessee maintained regular books of account following recognized method of accounting. The assessee has shown 10.22% of G.P. for the year under consideration as against 6.78% GP of last year. Search and seizure actions were carried out on 14.6.2006.
It has been held by various judicial pronouncements that unless proper method is followed, comparables are chosen and selected after doing a proper FAR study as well as adjustments are made to the extent possible it would be unfair to summarily reject the transfer pricing analysis made by the assessee
The AO further made a disallowance of a deduction of Rs.6,94,02,867/- u/s 40(a). The assessee claimed that certain disallowances were made for expenditure in the earlier years in the case of KEC Infrastructure Ltd. and as the payments of these disallowed expenditure were made during the year, the assessee claims that the same should be allowed in its han
