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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ITAT allowed the assessee-firm's appeal and deleted the disallowance of interest expenditure u/s 36(1)(iii). The Revenue had treated partners' drawings routed through an overdraft account as diversion of interest-bearing funds for non-business purposes, relying on negative capital balances. ITAT held that in a capital-intensive ship recycling business, partners' drawings are a normal incident of partnership and that overall interest-free funds (partners' capital and trade liabilities) exceeded such drawings. No direct nexus between borrowed funds and non-business advances was established. The negative capital was mainly due to a non-cash diminution already disallowed earlier, and day-wise working of interest-free funds remained unrebutted.
ITAT allowed the assessee-firm's appeal and deleted the disallowance of interest expenditure u/s 36(1)(iii). The Revenue had treated partners' drawings routed through an overdraft account as diversion of interest-bearing funds for non-business purposes, relying on negative capital balances. ITAT held that in a capital-intensive ship recycling business, partners' drawings are a normal incident of partnership and that overall interest-free funds (partners' capital and trade liabilities) exceeded such drawings. No direct nexus between borrowed funds and non-business advances was established. The negative capital was mainly due to a non-cash diminution already disallowed earlier, and day-wise working of interest-free funds remained unrebutted.
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