Case Law Details
DCIT Vs Nirma Limited (ITAT Ahmedabad)
Introduction: The Income Tax Appellate Tribunal (ITAT) Ahmedabad recently upheld the decision in favor of Nirma Limited, dismissing the appeal filed by Revenue. The dispute centered around the nature of payments made by Nirma Limited for vessel damage, with the ITAT ruling that the payments were reimbursements and of a capital nature, not falling under Section 5(2) of the Income Tax Act.
Background: The case, DCIT Vs Nirma Limited, was brought before the ITAT Ahmedabad following an order dated 10.04.2023 passed by the Ld. Commissioner of Income Tax (Appeals)-12, Ahmedabad, arising from the order dated 03.10.2017 by the DCIT (Intl. Taxn.)-1, Ahmedabad under Section 195(2) of the Income Tax Act for the Assessment Year 2018-19.
Key Points of the Case:
Payment Details and Application Under Section 195(2): Nirma Limited, being an Indian Company, applied under Section 195(2) of the Act to determine the tax liability on the remittance of USD 4,50,000 to Titan Shipping Limited, Marshal Islands, for damage charges related to vessels.
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