01 January 0001

Direct Tax Amicus: January 2016


Draft guidelines for determination of PoEM - A incongruous note to an intended harmonious provision?

CBDT recently notified a draft of guiding principles for determination of PoEM of a company. PoEM has been defined to be a place where key management and commercial decisions that are necessary for the conduct of the business of an entity as a whole are, in substance, made. Certain concepts like classification into active and passive income, deeming fiction, etc., are relatively new concepts. The draft guidelines are not only open ended but contradictory to the internationally accepted principles for determination of PoEM. The industry will await certainty on a number of issues…


Notifications and Circulars

  • E-filing facility for appeals before Commissioner (Appeals) set to be introduced
  • Income-Tax Department’s communications are now available on Twitter Account
  • Deductors can now validate certificates for deduction of TDS at lower rates
  • No TDS on interest accrued until beneficiaries are ascertained


Ratio decidendi

  • Consideration for technical data supplied is not taxable as FTS – Andhra Pradesh High Court
  • Depreciation ‘allowable’ to be deducted from block of assets even if not claimed and allowed - Delhi High Court
  • Advance to AE for business purpose – Not an international transaction – ITAT, Mumbai
  • Shares tendered under buy back scheme - Not ‘reorganization’ under India Netherlands DTAA, capital gains taxable – ITAT, Mumbai


January, 2016/Issue-18 January, 2016/Issue-18

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