International Tax Knowledge Hub

The refund, being lawfully due, cannot be denied solely on account of delay, especially when the delay is satisfactorily explained and no revenue loss is caused..

The penalty order in the present case was therefore invalidated and the matter remanded for compliance, with specific directions to the tax administration to issue necessary instructions for uniform implementation..

Assessees in similar situations should ensure detailed documentation of contract terms (especially regarding transfer of title and risk), maintain evidence of payment flows, and insist on procedural transparency during assessment..

Tax authorities must substantiate, with specific reasoning, how the “make available” test is satisfied in each case before seeking to tax such receipts as FTS..

Assessees should ensure that any addition made under section 69 is supported by clear evidence linking the alleged transaction to the specific year under scrutiny..

The Tribunal set aside the adjustments made by the TPO and DRP, holding that tax authorities must substantiate their claims with concrete evidence linking the expenses to the AE’s brand building, rather than relying on theoretical or quantum-based presumptions..

Taxpayers should ensure thorough documentation of inter-company transactions to withstand scrutiny..

Going forward, taxpayers with similar captive power arrangements should ensure robust benchmarking using applicable SEB tariffs to substantiate intra-group transfer prices for specified domestic transactions..

Assessees should ensure to present and substantiate the lack of access to detailed data and rely on publicly available figures to compute WCA..

The TPO has been instructed to provide the assessee with a fair opportunity to submit evidence for segmental cost allocation and to apply the appropriate benchmarking method for each transaction type..