By considering the potential loss on the long standing receivables as a genuine adjustment in the course of assessment, the Tribunal has reinforced the principles that the concept of TP cannot be that of an exact science and that constant application
Exemption under section 10B-Availability-Return not filed by due date-Proviso to section 10B(1) which provides that no exemption under section 10B shall be allowed if return is not furnished by due date prescribed under section 139(1) is directory and not mandatory in nature. Therefore, in genuine cases exemption under section 10B may be allowed even if the return is not filed by the due date mentioned in section 139(1)
The fact that the international transactions are at ALP does not mean that no addition can be made on the funds kept by the assessee with the AE. If the assessee had received funds within the normal period, it could have earned interest on the same. The potential loss is a factor to be considered while evaluating the financial impact of the international transactions between the assessee and the AE. However, a reasonable period has to be provided as interest-free period;
Non-production of vouchers for few expenditure incurred by the charitable trust will neither change the basic characteristic of the trust nor could it be inferred that the trust has deviated from its activities, which are not charitable in nature.
Recently, the Bangalore bench of the Income-tax Appellate Tribunal (the Tribunal) in the case of Robert Bosch GmbH v. ACIT [2010-TII-149-ITAT-BANG-INTL] (the taxpayer) while rejecting the contention of the tax department held that the taxpayer is not expected to make royalty income with reference to the sale effected to it by an Indian company, when the know how for manufacture of the same is supplied by the taxpayer itself. Accordingly, such notional royalty income was not taxable within the provisions of Section 5(2) and Section 9(1)(iv) of the Income-tax Act, 1961 (the Act) read with India-Germany tax treaty (the tax treaty).
The Bangalore tribunal has confirmed the inclusion of imputing interest on inter-company receivables as part of the transfer pricing assessment scrutiny and held that the arm’s length principle is equally applicable to interest on receivables under the India transfer pricing regulations.
The Bangalore Income Tax Appellate Tribunal (Tribunal) has ruled on the transfer pricing aspects of management services fees paid by the Taxpayer to its regional headquarter company (associated enterprise or AE). The Tribunal upheld the contention of the Transfer Pricing Officer (TPO) that the Taxpayer has not proved the commensurate benefits received for the service fees paid to the AE and, hence, ruled that the payment of the management services was not justified under arm’s length principles.
:Bangalore bench of the Income-tax Appellate Tribunal (the Tribunal) in the case of Bosch Ltd. v. CIT [2009-TIOL-736-ITAT-BANG]held that the taxpayer company was entitled to claim depreciation on the skill and the know-how brought by the employees of the transferee company classified as ‘business information’ under the category of ‘other identifiable intangibles’ (goodwill) under section 32(ii) of the Income-tax Act, 1961 (the Act).
Bangalore bench of the Income-tax Appellate Tribunal (the Tribunal) in the case of ACIT v. K. Mohan & Co.(Exports) (P.) Ltd [2010] 130 TTJ 719 (Bang) held that that profits earned from forward contracts cannot be included in the profits of the business of the undertaking for the purpose of computing deduction under Section 10B of the Income-tax Act, 1961(the Act) .
In the event the assessee claims that he has not purchased the property, as revealed in the AIR, before the ld.AO, then, it would be proper for the ld.AO to obtain the Sale Deed from the Sub Registrar’s office to prove the revenue’s claim. Assessment order based only on the AIR report will not stand in the eye of law.
