The ITAT recently dismissed an appeal and slammed Cognizant India Private Limited (“Cognizant India”) for what it perceived as using a colorable device to evade taxes during its INR 190 billion share buyback exercise.Continue Reading Cognizant’s High Court approved scheme of arrangement was held to be a colorable device by Chennai ITAT
Principal Associate in the Tax Practice at the Delhi NCR office of Cyril Amarchand Mangaldas. Thangadurai VP is an expert in providing advisory and litigation services on various aspects of direct tax laws including corporate tax, international tax and transfer pricing.
He has made representations and had briefed senior counsels in making representations before various judicial fora including ITAT, High Court and Supreme Court of India. He also has expertise in advising various in-bound and out-bound M&A transactions. He has been contributing written articles to various reputed journals and publishers. He has also been part of the committees which organized some of the most reputed taxation moot court competitions in India. He can be reached at firstname.lastname@example.org
The Bombay High Court has recently allowed a writ, challenging a reassessment notice served on the Assessee (by the income tax department) for FY11-12 on share premium issued by it. The assessing officer, however, failed to come up with any reasonable grounds that led him to believe that income had escaped assessment during the relevant FY.
Section 56(2)(viib) was introduced into the (Indian) Income Tax Act, 1961 (“IT Act”) as an anti-abuse provision with effect from FY12-13, according to which, if a company issues shares at a value higher than its fair market value, then it will have to pay tax (angel tax) on such incremental value. Rule 11UA of the (Indian) Income Tax Rules, 1962 (“IT Rules”) provides mechanism for computing fair market value.Continue Reading Share subscription above fair market value would be subject to angel tax
In the case of Manas Vs. Income Tax Officer, the Hon’ble Madras High Court (“HC”) took serious objection to the taxpayer’s attempt at misleading the Court. The taxpayer had filed a writ petition seeking quashing of the reassessment proceedings and satisfaction order passed under Section 148A of Income Tax Act, 1961 (“IT Act”).Continue Reading Madras High Court takes taxpayer to task for mischief with costs
In an upsetting ruling, the Hyderabad ITAT in Vertex Projects LLP has held that even in a court approved merger, the resulting company will have to pay taxes if the assets of the merging companies were transferred to it for less than fair market value.Continue Reading A Court Approved Merger could still be Subject to Tax
Corporate entities have been invoking the provisions of the India-Mauritius tax treaty and using the infamous “Mauritius route” to avoid paying capital gains tax in India for a while now. This has been a sore subject for tax authorities in India.Continue Reading Beneficial ownership test is not required under Indo-Mauritius tax treaty
In a major relief to all the parties accused of being involved in benami transactions, a three-judge bench of the Supreme Court in the case of Ganpati Dealcom Pvt. Ltd. has quashed all prosecution and forfeiture proceedings pertaining to transactions entered into before October 25, 2016. The old benami law i.e. Benami Transactions Act of 1988 ( “Benami Act”) was amended on the said date by the Benami Transactions (Prohibition) Amendment Act, 2016 (“2016 Amendments”) and the Supreme Court declared Section 3 and Section 5, introduced through this amendment, as unconstitutional.Continue Reading Supreme Court strikes down the old benami law as unconstitutional
The Indian Income Tax Department (“ITD”) has been closely scrutinising the internal business restructuring of companies to weed out any unwarranted tax incentives or benefits that may be claimed by the taxpayer. This has sometimes resulted in prolonged tax litigation, with no end in sight. The ongoing dispute between the ITD and Grasim Industries Limited (“GIL”) is one such example.Continue Reading Could Demerger Consideration be Construed as Dividend Distribution – Our views on the IT Ruling on the Grasim matter
In a recent decision of M/s Apex Laboratories vs. Deputy Commissioner of Income Tax, the Supreme Court yesterday held that expenditure incurred by a pharmaceutical company towards distribution of incentives (freebies) to doctors cannot be claimed as expenditure under Section 37(1) of the Income Tax Act, 1961 (“IT Act”), since the same is illegal in nature.Continue Reading Pharma companies cannot claim freebies given to doctors as expenditure
Conception of new faceless regime
The government had introduced the faceless assessment regime from 2018, thereby eliminating the physical interface between the Assessing Officer (“AO”) and the assessee. Suitable amendments were made in the Income Tax Act, 1961 (“IT Act”), authorising the government to notify a suitable scheme for this purpose, which led to the setting up of a Centralised Communication Centre i.e. an internet-based, independent, centralised communication centre for issuance of e-notices to taxpayers, thus doing away with the need for the traditional face to face appearance by an assessee before the designated income tax authority. These preliminary steps finally culminated in the launch of the Faceless Assessment Scheme, 2019.Continue Reading Faceless appeals, CBDT extends faceless assessments to the second level
The government has over the years strived to modernize the taxation system in our country to remove the discretions and unnecessary harassments experienced by the taxpayers. It has continuously integrated new technologies with the various tax compliances and other proceedings under the IT Act. With continuous planning and efforts, the Indian Revenue Authorities (“IRA”) have enabled electronic filing of several applications and returns under the Income Tax Act, 1961 (“IT Act”) and have even intimated their approvals or objections directly through the e-filing portal.Continue Reading Faceless assessment: Is this the right cure?