Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Forum Articles Highlights TMI Notes SMS News What's New Calendar Imp. Links Database More...
Extracts
Home List
← Previous Next →

M/s. Agilisys IT Services India Pvt. Ltd. Versus ITO-9 (1) (1) , Mumbai

Addition of notional interest on the outstanding debtor balances with associated enterprises - Held that:- At the time of hearing, it is pointed out that if the notional interest calculated @ LIBOR + 200 basis points is reduced from the margin earned by the assessee, the entity level margin will reduce from 21.29% to 21.17% and if the notional interest calculated @ 6.19%, as taken by the Assessing Officer, is reduced from the margin of assessee, the entity level margin would reduce from 21.29% t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

stant year also, it has to be held that the addition of ₹ 12,83,550/- made on account of notional interest chargeable on the outstanding debtor (i.e. associated enterprises) balances is not tenable and is directed to be deleted. - Decided in favour of assessee - ITA No. 7622/MUM/2014 - Dated:- 11-11-2016 - Shri G. S. Pannu, Accountant Member And Shri Ram Lal Negi, Judicial Member Assessee by : Shri Ronak G. Doshi & Shri Mathan Shah Revenue by : Shri D. Prabhakar Reddy ORDER Per G. S. P .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ax officer - 9(1)(1) the AO"+ by treating the outstanding debtors balance as at the year-end as an international transaction u/s 92B and thereby computed arm s length price u/s 92C(3) by making addition of notional interest. 2. The ld. CIT(A) failed to appreciate and ought to have held that the continuing debit balance with the Associate Enterprises ( AE ) does not constitute an international transaction as defined u/s 92B of the Act. 3. Without prejudice to the above, since the Appellant d .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er than the ratio of Operating Profit to Operating Expenses of the comparable company and hence, no further addition is called for. 5. The Appellant humbly prays that the order of the ld. CIT(A) be set aside and the adjustment on account of arm s length adjustment be deleted. 3. As the Grounds of appeal reveal, the solitary grievance of the assessee is with respect to an addition of ₹ 12,83,550/- made by the Assessing Officer on account of notional interest on the outstanding debtor balanc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ence has been made to the decision of Tribunal for Assessment Year 2009-10 dated 31.10.2016 (supra) wherein the addition has been deleted based on an alternate plea of the assessee that even if the overdue receivables from the associated enterprises constitute an international transaction within the meaning of Sec. 92B of the Act, if the margin of the assessee is calculated after reducing the notional interest, the resultant margin still compares favourably with the average margin of the compara .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

parables selected. In this context, the plea of assessee is that without admitting that non-charging of interest on continuing debit balances of associated enterprises is an international transaction , the arm s length interest on such debit balances be adjusted/reduced from the assessee s margin of 9.19% and the resultant margin would also be favourable in comparison to the average margin of the comparables selected. It has been explained that assessee has given credit period of 45 days to its .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er case, the entity level margin would reduce from 9.19% to 7.25%. Thus, it is pointed out that in both the situations, the margin of assessee-company is much higher than the comparable concerns, i.e., 3.53% and, therefore, the transaction can be said to be at arm s length and no separate adjustment is required to be made on this count. We find that such a plea of assessee was very much before the Assessing Officer also, as is evident from a copy of communication dated 21.12.2011 addressed to th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

reducing the adjustment on account of such notional interest out of its margin, the resultant margin of assessee is still more than that of the comparables thereby revealing that no further adjustment is required. 9. The ld. DR has not assailed the factual matrix asserted by the assessee with respect to the alternate plea though he has reiterated that the instant transaction is to be construed as an international transaction within the meaning of Sec. 92B of the Act. In our considered opinion, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed thereby showing that no further adjustment is required to be made to the stated transactions. It is also quite clear that allowing of extended credit period to the associated enterprises is otherwise closely linked to the determination of sale price, which in-turn is the basis to arrive at the margins of the assessee. Thus, on the aforesaid limited aspect, we hold that the addition of ₹ 15,82,891/- on account of notional interest chargeable on the outstanding debtors (associated enterpr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

  ↓     Latest Happening     ↓  

Forum: GST return filing software online | Easy GST compliance management

Forum: Input credit of gst paid on urd

Forum: 3B mistake

Forum: Excise duty credit on finished stock at additional place of business.

Forum: Input tax credit

TMI Note: Capital Gain - transfer of right in the land or transfer of land itself - addition u/s 50C - Harassment to the honest tax payers

Highlight: Option to avail composition scheme under GST by electronically filing an intimation in FORM GST CMP-02 and FORM GST ITC-03 upto 30-9-2017 - See Rule 3(3A)

Forum: GST on Notional rent

Forum: GST ON SALES PROMOTION

TMI Note: Does ICDS apply for the purposes of computing exemption u/s 11 to 13.

Highlight: Voluntary Reporting of Estimated Current Income and Advance Tax Liability - CBDT issues draft notification

TMI Note: Certain ICDS provisions are inconsistent with judicial precedents. Whether these judicial precedents would prevail over ICDS.

Highlight: Provisions of ICDS shall prevail w.e.f. AY 2017-18 to the transactional issues dealt therein over earlier judicial pronouncements.

Notification: Levy of anti dumping duty on New/unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres) having normal rim dia code above 16 originating in, or exported from China PR

News: Voluntary Reporting of Estimated Current Income and Advance Tax Liability

TMI Note: In case of conflict between ICDS and other specific provisions of the Income-tax rules, 1962 governing taxation of income like rules 9A, 9B etc. of the Rules, which provisions shall prevail.

TMI Note: Does ICDS apply to computation of Minimum Alternate Tax (MAT) u/s 115JB of the Act or Alternate Minimum Tax (AMT) u/s 115JC of the Act.

TMI Note: Where a term has not been defined under ICDS, nor under the Act, but has different interpretations given to it by the courts in tax cases, and in ICAI Accounting Standards, which interpretation would prevail while interpreting ICDS.

TMI Note: Whether the provisions of ICDS apply to a non-resident who claims the benefit of a double taxation avoidance agreement (DTAA).

TMI Note: In case any of the ICDS provisions is contrary to a circular or press release issued by the CBDT, which would prevail over the other.

TMI Note: ICDS-I requires disclosure of significant accounting policies and other ICDS requires specific disclosures. Where is the taxpayer required to make such disclosures specified in ICDS.

Notification: Income Computation and Disclosure Standards (ICDS) - New ICDS to be effective from AY 2017-18

News: RBI Reference Rate for US $

Highlight: GST - Detention of goods under transport - discrepancy in documents - the statutory provisions provide a mechanism for adjudication following detention of goods including for the provisional release thereof pending adjudication - HC

Highlight: Reassessment - first few paragraphs of the assessment order dealt with objections and disposed of accordingly - Unfortunately, the manner in which the AO has decided the issue is wholly unsustainable in law - HC

Highlight: Business expenditure u/s 37 - liquidated damage - breach of contract terms - Expenditure was not incurred for any purpose which is an offence or which is prohibited by law - cannot be disallowed - HC

Highlight: Valuation - inclusion of reimbursement of expenses - managing participation of clients in certain mela, fairs, promotional activities etc. - They are liable to service tax on the gross amount received - They cannot restrict their tax liability to only agency commission

Highlight: TDS liability - ITAT confirmed the liability - We do not see how it is possible for us to uphold the order of the Tribunal and when it purports to decide two Appeals of the Revenue by single paragraph conclusion - HC

Highlight: Reopening of assessment - sufficiency of material available with the AO to form a belief that income chargeable to tax had escaped assessment - bogus purchases - seller refused to respond - notice would not be interfered with - HC

Highlight: Exemption u/s 11 - education activities - transport and hostel facilities surplus cannot be considered as business income of the assessee society

News: Draft Notification for insertion of new rule 39A in the Income-tax Rules, 1962 comments and suggestions-reg.

Highlight: Genuineness of labour wages expenses, embroidery charges, fabrication expenses etc. - getting work done through small workmen who do not have any permanent place of residence - disallowance of ad hoc expenditure deleted.

Highlight: Project import - Since the goods were never used for the purpose for which it was imported, the actual user condition has been violated - Redemption fine and penalty imposed.

Highlight: Penalty u/s 112 (a) - CHA - Lack of due diligence and failure to take more precautions can not, by itself, bring in penal consequences

Highlight: Import of services - GST - The fact that those services were received outside India will not change the fact that the services have been paid for by the beneficiary appellant, who is located in India. - Demand confirmed.

Notification: SEZ for IT/ITES at Madhurwada Village, Visakhapatnam District in the State of Andhra Pradesh - denotified.

Highlight: Merely because payment is received in Indian rupee, it cannot be said that payment against export has not been received in convertible foreign exchange.

Highlight: Merely vehicle numbers was not mentioned on the invoices cannot be the reason to deny Cenvat Credit

Highlight: Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 120A of the Central Goods and Service Tax Rules, 2017 - Circular

Circular: Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 120A of the Central Goods and Service Tax Rules, 2017

News: Auction for Sale (Re-issue) of Government Stocks

Article: TDS APPLICABILITY ON GOVERNMENT CONTRACTS UNDER GST (Under Section 51 of the CGST Act, 2017)

News: Manmohan takes potshots at note ban, 'hasty' rollout of GST

News: GST on petrol, diesel requires wider discussion: Nitish

Article: WHEN CAN ONE TAKE ITC FOR RCM CASES?

Notification: TDS liability under Section 51 of CGST, 2017 come into force w.e.f. 18-9-2017 - Persons liable to deduct TDS from payment made or credited to the supplier of taxable goods or services specified

Notification: Central Goods and Services Tax (Seventh Amendment) Rules, 2017

Notification: Seeks to extend the last date for filing the return in FORM GSTR-3B for the months of August to December, 2017

Circular: Filing of Special Leave Petition against Orders of Hon'ble High Courts staying Collection of Tax under GST- reg.

Highlight: Exemption u/s 54F - LTCCG - once entire net consideration is invested, the absence of completion certificate cannot be a ground to deny the benefit of deduction.



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version