Monday, 14 May 2012

TPO has no power to question business purpose of transaction

Ericsson India Pvt. Ltd vs. DCIT (ITAT Delhi)


The assessee made payment of Rs. 31.34 crores to its associated enterprise for “Second Line Support” services. The TPO & DRP held that the assessee had not benefited from the expenditure and that it was not “necessary to be incurred” and that its ALP was Nil. On appeal by the assessee HELD:

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GAAR Not Applicable to Genuine Capital Market Transactions: Telangana High Court

In a significant ruling, the Telangana High Court held that General Anti-Avoidance Rules (GAAR) cannot be invoked merely because a transacti...