TagTaxation

The Threat of Unconstitutionality to Explanation II to Section 37 of the Income Tax Act

[Priya Garg is a 5th year student at West Bengal National University of Juridical Sciences (WBNUJS), Kolkata] Explanation II added to Section 37 of the Income Tax Act, 1961 (“IT Act”), which became effective from 1 April 2014, runs the risk of violating Articles 14 and 19 of the Constitution of India. This post explains the reason behind this proposition. Explanation II states that any...

The ‘AMP Expenses’ Dilemma in Transfer Pricing: Can the Supreme Court Clear the Dust?

[Shannon Khalkho is a IV year B.A. LL.B. (Hons.) student at the National Law School of India University, Bangalore] Introduction The issue of advertisement, marketing and promotion (AMP) expenses incurred by a domestic entity for its foreign associate entity (foreign AE) has been mired in controversy since its entry into the realm of transfer pricing, essentially because of a lack of statutory...

Analyzing the Applicability of GAAR to Schemes of Arrangement

[Varun Kannan is a 4thyear student at NUJS, Kolkata]. In a recent post on this Blog, Prof. Umakanth Varottil has elaborately examined the NCLT decision rejecting the proposed scheme of merger of Gabs Investments Private Limited into Ajanta Pharma Limited. In this post, I shall specifically analyze the applicability of the General Anti-Avoidance Rules (“GAAR”) against a proposed scheme of...

Non-Deductibility of CSR Expenditure under the Income Tax Act: Some Concerns

[Priya Garg is a 5th year student at West Bengal National University of Juridical Sciences (WBNUJS), Kolkata] The Income Tax Act, 1961 (“IT Act”) allows various business expenses to be claimed as ‘deductions’ while computing taxable income under the head ‘profit and gains of business or profession’.[1] Section 37 of the IT Act is a residuary provision on deductions. It permits any business...

The Taxation Predicament of Slump Exchanges

[C. H. Anvita and Anirudh Venkatesh are 4thYear BA LLB (Hons.) students from School of Law, Christ (Deemed to be University, Bengaluru] Background The Mumbai bench of the Income Tax Appellate Tribunal (“ITAT”) has, in two sequential decisions in the months of January and May, 2018[1] (in which, the latter case reiterated the reasoning and decision of the former), reignited discussions on the...

Taxation of Bonus Shares: Deciphering the Law

[Unnati Ghia is a 4th year BA LLB (Hons.) student at National Law School of India University, Bangalore] There is no steadfast rule or statutory provision governing the taxation of bonus shares, save for its statutory exclusion from the category of ‘dividends’. This category of shares has presented a dilemma to both the Revenue and the judiciary in multiple instances, given that determining...

Supreme Court Reiterates Position: I&B Code, 2016 Prevails Over the Income Tax Act, 1961

[Siddharth Kumar is a 3rdyear B.B.A. LL.B.(Hons.) student at Vivekananda Law School, Delhi] The Supreme Court of India, by its order dated 10 August 2018 in Pr. Commissioner of Income Tax v. Monnet Ispat and Energy Ltd. has held that the provisions of the moratorium stipulated under section 14 of the Insolvency and Bankruptcy Code, 2016 (“ Code”)  would override anything inconsistent contained in...

Accounting for a Brief Stint of Unconstitutionality: Equalisation Levy Fixed by GST

[Debarshi Chakraborty is a 3rd year B.A., LL.B. student at National Law University Odisha] Considering the potential of the booming digital economy and the fast expanding nature of its business operations, it is essential to address the challenges extensively, particularly in terms of taxation of digital transactions. In addressing such challenges, and in keeping abreast with the emerging global...

Cryptocurrencies: Their Nature and Prospects for Taxation – Part 1

[Anirudh Singh is a 4thyear B.A LL.B (Hons.) student at NALSAR, Hyderabad] Cryptocurrencies have gained significant prominence in the market since the inception of “Bitcoins”. (In this post, Bitcoins and cryptocurrencies are treated interchangeably for the sake of simplicity).  The popularity of Bitcoins can be estimated from the fact that upon its introduction in 2009 the value of one Bitcoin...

Corporatisation Prospects for Unregistered Entities: Amendment to Section 366 of the Companies Act, 2013

[Pammy Jaiswal is a Partner at Vinod Kothari and Company] Background By virtue of the enforcement notification of the Ministry of Corporate Affairs (‘MCA’) dated 5 July 2018, the proposed change under section 75 of the Companies (Amendment) Act, 2017 (‘Amendment Act’) relating to section 366 of the Companies Act, 2013 (‘Act, 2013’) has been notified with effect from 15 August 2018. Further, by...

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