Transfer pricing comparability requires functional alignment and permits working capital adjustment, while APA margins cannot govern non-covered years...
Treaty benefit, goodwill depreciation and hedging costs: export commission disallowed, while key business deductions and depreciation claims succeeded...
Undisclosed foreign asset classification requires an unexplained source; unrebutted affidavits and corroborative evidence defeated the Black Money Act...
Foreign exchange fluctuation - As we understand from the record, the gist of the method followed by the assessee is that, the assessee in Schedule IX claimed less deduction than claimable by adjusting the notional capital gain on Forex and corresponding deductions of the same amount while computing the net income of assessee for purpose of tax. In effect, both credit and debit are given and the tax liability is not materially impacted. Anyway, when the actual event has taken place, tax is stated to have been paid. The converse is that if the deduction is disallowed, the assessee would be called upon to pay tax on unrealised/notional capital gain; the treatment is as per the accounting standard, and the claim for deduction conforms with Section 43A of the Act. - HC
Foreign exchange fluctuation - As we understand from the record, the gist of the method followed by the assessee is that, the assessee in Schedule IX claimed less deduction than claimable by adjusting the notional capital gain on Forex and corresponding deductions of the same amount while computing the net income of assessee for purpose of tax. In effect, both credit and debit are given and the tax liability is not materially impacted. Anyway, when the actual event has taken place, tax is stated to have been paid. The converse is that if the deduction is disallowed, the assessee would be called upon to pay tax on unrealised/notional capital gain; the treatment is as per the accounting standard, and the claim for deduction conforms with Section 43A of the Act. - HC
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