Transfer pricing adjustments for software services, corporate guarantees, expense characterisation and foreign tax credit affirmed under arm's length ...
Scientific Research approval for Sikshya O Anusandhan under section 35(1)(ii) granted subject to reporting, certification, and compliance requirements...
Dominant issue: Whether disallowance under section 36(1)(iii) for alleged diversion of funds is justified. Reasoning: Tribunal found admitted interest receipts from partners and that the assessee charged interest on partners' debit balances, which compensates use of funds; there was also acceptance of availability of substantial interest-free funds and no nexus established between borrowed funds and alleged non-business advances. Legal basis: s.36(1)(iii) requires proof of diversion of borrowed funds for non-business purposes. Outcome: Disallowance under s.36(1)(iii) was unsustainable and the assessee's appeal is allowed. - ITAT
Dominant issue: Whether disallowance under section 36(1)(iii) for alleged diversion of funds is justified. Reasoning: Tribunal found admitted interest receipts from partners and that the assessee charged interest on partners' debit balances, which compensates use of funds; there was also acceptance of availability of substantial interest-free funds and no nexus established between borrowed funds and alleged non-business advances. Legal basis: s.36(1)(iii) requires proof of diversion of borrowed funds for non-business purposes. Outcome: Disallowance under s.36(1)(iii) was unsustainable and the assessee's appeal is allowed. - ITAT
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