Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: VAT Audit :: form 3cd :: empanelment :: list of goods taxed at 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: due date for vat payment :: ACCOUNTING STANDARDS :: Central Excise rule to resale the machines to a new company :: cpt :: VAT RATES :: TAX RATES - GOODS TAXABLE @ 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: articles on VAT and GST in India :: ACCOUNTING STANDARD :: TDS
 
 
News Headlines »
 8 benefits you must know about this tax-saving mutual fund
 10 most important income-tax changes which will apply from April 1
 Delhi: 54 CAs, company secretaries on radar in I-T crackdown against black money
 10 Income Tax Rules That Will Change From April. See Details Herea
 Looking for last-minute tax planning with Section 80C investments? Here's help
 Aadhaar mandatory for filing income tax return
 Will Aadhaar linkage solve India's income tax woes?
 GST roll out from July 1 will make goods cheaper: Jaitley
 Aadhaar To Be Mandatory For Filing Income Tax Return, PAN Application
 7 best tax-saving solutions which can help you save money
  No proposal to replace Income Tax with Banking Cash Transaction Tax

Payment by shares to acquire knowhow eligible for tax sops
June, 30th 2006
 

Payment by issue of shares, for the purpose of acquiring know-how, is eligible for tax deduction, according to a ruling by Income-Tax Appellate Tribunal (ITAT), Pune, in the case of Mercedes Benz India.

Payment for acquisition of know-how was eligible for tax deduction under Section 35 AB Income-Tax (I-T) Act. In many cases, such payments were made in kind, by issuing equity shares to the seller of the know-how. The tax department has often taken the stand that payment by shares for acquiring know-how is not entitled to deduction.

Mercedes Benz India (MBIL) was a joint venture between Telco and Daimler Benz, with the latter holding 51%. According to the agreement between the parties, Daimler Benz had the option to make its contribution partly or fully in shares.

The latter made a part contribution in shares and claimed the deduction under Section 35 AB of the I-T Act. The assessing officer (AO) allowed the claim but the I-T commissioner had set aside the order of the AO.

The tax authorities cited a Supreme Court order in the case of Eimco KCP which stated that allotting shares could not be construed as expenditure.

The Pune tribunal held that the facts of the Eimco KCP were different from the case of MBIL. In the former, the amount was not paid after the incorporation of the company. The logical inference then is that had the amount been paid after the incorporation, there was a possibility of a decision in favour of a deduction.

The tribunal pointed out that the payment in the case of MBIL was after the incorporation of the company. Therefore, the apex courts decision cannot be applied in this case. TP Ostwal, a senior chartered accountant, said: The ITAT decision just explained the position of the law .

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
E-catalogue online catalogue E-brochure online brochure online product catalogue online product catalogue e-catalogue Indi

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions