Transfer-pricing treatment of ITeS margins excludes pass-through tax recoveries and separate delayed-receivables interest after working-capital adjust...
Capacity-utilisation adjustments under TNMM can neutralise substantiated COVID-related idle costs where underutilisation materially affects profitabil...
TNMM functional comparability requires excluding rice manufacturers from a pure Basmati rice trader's benchmark and recognising operating export recei...
Working-capital adjustment subsumes delayed-receivable effects in TNMM benchmarking of captive software-development services, avoiding separate notion...
Transfer-pricing comparability requires exclusion of financially illogical super-profit comparables and correction of unsupported annual-report and ma...
Charitable character assessment preserves Section 80G approval despite inclusive spiritual teachings and incidental religious expenditure within the s...
Penalty proceedings for cash-loan acceptance require assessment proceedings and recorded Assessing Officer satisfaction; absent these, the proceedings...
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The assessee, a resident corporate entity providing mobile telecom services in India, challenged the taxability of bandwidth charges remitted to foreign telecom service providers as royalty income u/s 9(1)(vi) of the Income Tax Act. The Tribunal, relying on the Delhi High Court's decision in Telstra Singapore Pte. Ltd., held that bandwidth charges cannot be treated as royalty for use or right to use equipment, secret formula or process. The amendment to domestic law cannot automatically apply to treaty provisions without corresponding changes. Consequently, the bandwidth charges paid by the assessee cannot be treated as royalty under treaty provisions or Section 9(1)(vi), and the assessee was not required to deduct tax at source. Regarding annual maintenance charges (AMC) paid to certain foreign companies, the Tribunal observed that the assessee had not disputed the nature of services as technical before the departmental authorities. However, the issue of whether the services fell within technical, managerial or consultancy services was not examined due to the assessee's stand on the 'make available' condition. The Tribunal restored this issue to the Assessing Officer to factually verify if the services rendered fell within the ambit of technical, managerial or consultancy services. Concerning the demand raised for non-deduction of tax on payment of agency fees, the Tribunal upheld the First Appellate Authority's finding.
The assessee, a resident corporate entity providing mobile telecom services in India, challenged the taxability of bandwidth charges remitted to foreign telecom service providers as royalty income u/s 9(1)(vi) of the Income Tax Act. The Tribunal, relying on the Delhi High Court's decision in Telstra Singapore Pte. Ltd., held that bandwidth charges cannot be treated as royalty for use or right to use equipment, secret formula or process. The amendment to domestic law cannot automatically apply to treaty provisions without corresponding changes. Consequently, the bandwidth charges paid by the assessee cannot be treated as royalty under treaty provisions or Section 9(1)(vi), and the assessee was not required to deduct tax at source. Regarding annual maintenance charges (AMC) paid to certain foreign companies, the Tribunal observed that the assessee had not disputed the nature of services as technical before the departmental authorities. However, the issue of whether the services fell within technical, managerial or consultancy services was not examined due to the assessee's stand on the 'make available' condition. The Tribunal restored this issue to the Assessing Officer to factually verify if the services rendered fell within the ambit of technical, managerial or consultancy services. Concerning the demand raised for non-deduction of tax on payment of agency fees, the Tribunal upheld the First Appellate Authority's finding.
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