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Insight into the Latest High Court Decisions and Indirect Tax Issues

10 Feb 2011

Taxand India review and provide key insight into the latest high court and tribunal decisions impacting multinationals whilst also addressing the latest indirect tax issues in excise, customs, service tax and VAT.

Taxand's Take

Latest high court decisions:
  • CIT vs. Dempo & Co Pvt Ltd: Expenses paid to a subsidiary company cannot be disallowed under section 40A(2) of the Act
  • CIT vs Indo Nissin Foods Ltd: Indian employer is not required to withhold taxes on the salary paid by a foreign employer to its employee under a deputation arrangements. In the case of Eli Lilly the Supreme Court had held that an Indian employer would be liable to withhold taxes for home salary paid by the foreign employer. However, this ruling was not considered by the High Court

Latest tribunal decisions:

  • Abhishek Auto Industries Ltd vs DCIT: Internal comparable is more reliable than external and should be followed for transfer pricing documentation
  • Bechtel India Pvt Ltd vs DCIT: TP documentation of the taxpayer cannot be rejected without any cogent reasons
  • DCIT vs Cheil Communications India Pvt Ltd: Pass-through costs and recoveries are to be excluded in computing operating profits and costs under TNMM
  • ACIT vs Foster Wheeler India Pvt Ltd: Penalty cannot be levied for non-maintenance of documentation when the transactions are at held to be at arm's length
  • ACIT vs Accenture Services Pvt Ltd: Hiring of vehicles for transportation of employees is liable to deduction of tax under section 194C of the Act
  • Vodafone Essar Ltd vs DCIT: Payment for national roaming services between two mobile operators is not liable to withholding of tax under section 194I of the Act

Read the full January newsletter including detailed analysis of the latest high court and tribunal decisions from Taxand India here

Your Taxand contact for further queries is:
Mukesh Butani
T. +91 124 339 5010

Taxand's Take Author