« Top Headlines » Open DEMAT Account in 24 hrs  Delhi HC Rules GST Registration Cannot Be Cancelled Retrospectively Without a Clear Show Cause Notice (SCN)  Belated income tax return AY 2026-27: How to file, late filing charges and what you may lose  Major Financial Changes from August 1, 2026: ITR Deadline, RBI MPC Meeting, Tatkal Ticket Rules & More  Government proposes to ease tax relief conditions for offshore funds  TallyPrime Connected Banking: Automating Banking and Accounting  ITR Filing Deadline 2026: Is July 31 the Last Date to File Your Income Tax Return? Latest Official Update  ITR filing deadline nears: How to file income tax return online on e-filing portal - quick 15-step guide  Will the ITR Filing Deadline Be Extended Beyond July 31 for FY 2025-26? Here's the Latest Update for Taxpayers  Income Tax Refund Delayed for AY 2026-27? 5 Common Reasons Your Refund May Be Stuck and How to Fix It  ITR Filing 2026: FM Nirmala Sitharaman Asks Tax Officials to Let Honest Taxpayers Correct Genuine Mistakes  Will Your FCNR Deposit Stay Tax-Free After Returning to India? Tax Rules Explained for NRIs «  I-T moves SC on foreign firms' tax-liability ruling... Rev loss due to service tax evasion... » -T dept moves SC against AAR ruling August, 18th 2007 The Income Tax Department has moved the Supreme Court against the ruling by a quasi-judicial body which held that foreign firms are not liable to pay tax on assignment amount charged from their Indian subsidiaries if contracts are signed outside the country. The I-T department challenged the decision of Authority of Advance Ruling (AAR) in a case concerning Swiss firm Honeywell Technologies SARL, which had received a fee from Honeywell Turbo India for supplying equipment to Tata Motors. In its appeal, the department represented by Solicitor General G E Vahanvati said that the AAR ruling would have a snowballing effect as this could lead to similar innovations by foreign companies. This would deprive the Indian exchequer of legitimate taxes, it said. A bench headed by Justice Ashok Bhan issued notice to Honeywell Technologies asking it to respond to the petition. The AAR, on an application by the Swiss company, had early this year ruled that since the assignment contract with Honeywell Turbo was entered in Switzerland, the assignment amount was not covered under the Income Tax Act, 1961. Honeywell group had entered into a pact with TELCO (now Tata Motors) in September 2003 for supply of turbochargers for its passenger car. The group later transferred its rights and interests in the Indian business to its 100 per cent subsidiary Honeywell Turbo for 7.5 million euros. According to Vahanvati, the AAR was wrong in holding that Honeywell had no business connection in India and the assignment fee was a consideration received in lieu of transfer of these rights and interest to the Indian unit. The tax department has argued that AAR failed to evaluate the profit earned by Honeywell from sale of engines to Tata Motors and income to be earned from Indian operations. According to the petition filed through B V Balram Das, the consideration of 7.5 million euros received by Honeywell from its Indian subsidiary was taxable as this was profit taken in advance. The department has argued that payments made by Honeywell Turbo to its parent firm would be from the profits earned by it and such remittances would include taxable profits.