(1) Payment for equipment leasing--Whether taxable
as royalty under Indo-Netherlands DTAA?
Facts and Held:
(1) Assessee had paid Rs. 1.32 crores to KLM of Netherlands
for leasing of rotables and repair work. It was the case of the revenue that
the same was subject to TDS under section 195 under Indo-Netherlands DTAA.
Assessee's plea was amended Indo-Netherlands DTAA excluded equipment leasing
from the scope of royalty under the DTAA which was accepted by the CIT(A). On
higher appeal by the department - Held in favour of the Assessee that as per
the DTAA amended clause excluded equipment leasing from the definition of
royalty thus no TDS obligations arose.
(2) FCCB--Foreign Currency convertible bond issue
expenses--Spreading of expenditure thereof whether required?
Facts and Held:
(2) Assessee incurred expenditure for issuing FCCB and
claimed the entire issue expense during the relevant assessment year. It was
the case of the lower authorities that the same ought to have been spread over
the tenure of FCCB of 5 years. On higher appeal CIT(A) went in favour of the
assessee. On further appeal by the revenue - Held in favour of the assessee
that FCCB expenses were revenue in nature. It is not necessary to spread over
the same over the tenure of the FCCB.
Applied: Taparia
Tools Ltd. v. JCIT (2015) 372 ITR 605 (SC) : 2015 TaxPub(DT) 1438 (SC)
(3) Deferred revenue expense in books but claimed
upfront for tax purposes?
Facts and Held:
(3) Assessee incurred substantial expenditure for training
its pilots and claimed the entire spend during the asst. year. In its books the
same was spread over 5 years as deferred revenue expenditure. It was the case
of the revenue that the same 5 year spread over be made even for tax purposes.
On higher appeal by the revenue - Held in favour of the assessee that the
scheme of entries in the books are not relevant for claiming revenue
expenditure. The entire expenditure is thus allowable in the year of claim
itself.
Case: Spicejet
Ltd. v. Addl. CIT 2023 TaxPub(DT) 145 (Del-Trib)