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Direct Tax Amicus: September 2016


Spending less than ALP can also have adverse implication!

While the requirement of compliance with transfer pricing regulations by all the AEs involved in a transaction has been a subject matter of intense debate and practically, many foreign AEs do not comply with TP regulations in India, a recent ruling of a Special Bench of ITAT, Kolkata emphasises the requirement of compliance with Indian TP regulations by non-residents even where they do not receive any income because of their relationship with Indian AE.


Notifications & Circulars

  • Income Declaration Scheme, 2016 – Waiver of penalty, payment of tax in cash over the counter and a few more issues clarified
  • No Objection Certificate (NOC) in case of Foreign Shipping Companies – Procedures streamlined
  • DTAA with Republic of Maldives - Avoidance of double taxation of income derived from air transport


Ratio decidendi

  • Specific projects within a housing project can avail deduction under Section 80 IB – Delhi High Court
  • Employees’ contribution to PF deposited after statutory due date but before filing return – Deduction to be allowed – Patna High Court
  • Call option is a capital asset when the rights in shares are in effect delineated for perpetuity – ITAT, Mumbai
  • Extending credit is a closely linked transaction with the transaction of providing services – ITAT, Bangalore


September, 2016/Issue-26 September, 2016/Issue-26

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