One-Time Contractor Settlement Deductible Under Section 37: ITAT Chennai

Advertisement ESAB India Ltd. Vs DCIT (ITAT Chennai) The assessee and the Revenue filed cross appeals against the order of the CIT(A) for AY 2017-18. The principal issues related to the deductibility of one-time settlement payments made to contractors, disallowance under Section 14A read with Rule 8D, and an additional claim regarding the applicability of the Double Taxation Avoidance Agreement (DTAA) to Dividend Distribution Tax (DDT). The Assessing Officer disallowed ₹5.43 crore paid as one-time settlement to contractors during restructuring of the assessee’s Kolkata operations, holdi...