Income taxable in India - AO has attributed 60% of the receipts ...

Assessment of Receipts as Fees for Technical Services Deemed Unjustified Due to Lack of Contractual Basis.

December 13, 2023

Case Laws     Income Tax     AT

Income taxable in India - AO has attributed 60% of the receipts towards FTS and 40% towards price of goods/materials. - In fact, AO has not given any reason for quantifying 60% of the receipts towards FTS, as no such bifurcation has been provided in the contract documents. In any case of the matter, the price paid by the contractee for supply of goods and equipments, design and testing etc. is certainly part of the manufacturing activities and cannot be considered de hors such activity. Thus, in our view, the artificial segregation of receipts between supply of goods and FTS is without any basis, hence, unacceptable. - AT

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