Working-capital adjustment determines whether software-services transfer-pricing margins fall within the statutory tolerance range, eliminating any ad...
Permanent establishment deductions upheld for expatriate salaries, direct costs and trading losses, while head-office costs require fresh classificati...
Data transmission equipment classification under CTSH 8517 62 remains distinct from residual classification, with exemption evidence requiring scrutin...
The ITAT held that the Central Board of Direct Taxes (CBDT) circulars are binding on the Income Tax Authorities. The Board for Industrial and Financial Reconstruction (BIFR) had recommended reliefs and concessions, including the set-off of carried forward business losses against business income, which were considered by the CBDT. Since the BIFR's recommendations were made after considering the views of the Income Tax Department, the assessee was entitled to the benefit of setting off brought forward business losses against business income as per the CBDT circular. The Tribunal relied on the Madras High Court's decision in CIT vs. Lakshmi Machine Works Ltd., which held that the provisions of the Sick Industrial Companies Act (SICA) would override the Income Tax Act's provisions. Regarding the disallowance u/s 14A, the interest expense disallowance was deleted as substantial interest-free funds were available, but the administrative expense disallowance was upheld due to lack of details.
The ITAT held that the Central Board of Direct Taxes (CBDT) circulars are binding on the Income Tax Authorities. The Board for Industrial and Financial Reconstruction (BIFR) had recommended reliefs and concessions, including the set-off of carried forward business losses against business income, which were considered by the CBDT. Since the BIFR's recommendations were made after considering the views of the Income Tax Department, the assessee was entitled to the benefit of setting off brought forward business losses against business income as per the CBDT circular. The Tribunal relied on the Madras High Court's decision in CIT vs. Lakshmi Machine Works Ltd., which held that the provisions of the Sick Industrial Companies Act (SICA) would override the Income Tax Act's provisions. Regarding the disallowance u/s 14A, the interest expense disallowance was deleted as substantial interest-free funds were available, but the administrative expense disallowance was upheld due to lack of details.
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