Cyber Knowledge Products
 You are not Logged in

Journal TR

image

PLEASE SUBSCRIBE FOR FULL REPORT

 
Tax Publishers 2017 TaxPub(DT) 1694 (Chen-Trib)

 

Caterpillar India (P.) Ltd. v. Asstt. CIT

 

INCOME TAX ACT, 1961

--Transfer pricing--Determination of ALPMAM--Internal TNMM--Non-comparability--Comparability is sine qua non for any method, therefore, business segment not even comparable on broader level could not be taken as internal TNMM.--Assessee was operating under two business segments. There was not even broad comparability between those two. However, assessee having entered into international transactions under one of the segments considered another one as comparable. TPO questioned this. Assessee submitted that it had adopted internal TNMM as the MAM and the same did not mandate strict comparability. Held : Comparability is sine qua non for any method. Therefore, business segment not even comparable on broader level could not be taken as internal TNMM.

Income Tax Act, 1961 Section 92C

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2007-08


 

INCOME TAX ACT, 1961

--Business expenditure--Interest on delayed payment of TDS----Interest paid for delay in remittance of TDS is only compensatory in nature and cannot be construed as penalty for violation of any provisions of law, therefore, such interest was allowable as deduction. --Assessee claimed deduction of interest on delayed payment of TDS. AO disallowed the same treating the interest as of penalty for violation of law. Held : Interest paid for delay in remittance of TDS is only compensatory in nature and cannot be construed as penalty for violation of any provisions of law, therefore, such interest was allowable as deduction.

Income Tax Act, 1961 Section 37(1)

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2007-08


 

INCOME TAX ACT, 1961

--Capital or revenue expenditure--Cost of mobile phone and telephone instruments----Cost of mobile phone and telephone instruments cannot be allowed as revenue expenditure and the same needs to be capitalized under the block of assets "Electrical and Electronic equipments| as per section 32 read with Depreciation Schedule of Income Tax Rules, 1962 with applicable depreciation allowance.--Assessee claimed cost of mobile phone and telephone instruments as revenue expenditure on the ground that life of these equipments is very short.Held : Cost of mobile phone and telephone instruments needs to be capitalized under the block of assets "Electrical and Electronic equipments| as per section 32 read with Depreciation Schedule of Income Tax Rules, 1962 with applicable depreciation allowance.

Income Tax Act, 1961 Section 37(1)

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2007-08


 

INCOME TAX ACT, 1961

--Deduction under section 10A--Treatment of item excluded from export turnover----Parity needs to be maintained between export turnover and total turnover", therefore, expenses having excluded from export turnover, were to be excluded from the total turnover also for purpose of computing deduction under section 10A. --Assessee claimed deduction under section 10A. AO re-computed amount deductible by excluding internet (telecommunication) expenses towards charges for delivery of computer software outside India from Export turnover, however, without excluding the same from total turnover. Held : Parity needs to be maintained between export turnover and total turnover", therefore, expenses having excluded from export turnover, were to be excluded from the total turnover also for purpose of computing deduction under section 10A.

Income Tax Act, 1961 Section 10A

Relied : ITO v. Sak Soft Ltd. (2009) 30 SOT 55 (Chen)

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2007-08


 

INCOME TAX ACT, 1961

--MAT--Computation of book profitTreatment of increme

**** PLEASE SUBSCRIBE FOR FULL REPORT  ****