Topic

Section 37 ITA

2 articlesLatest March 2026
Section 37 IT Act | ESOP Cross-Charges by Foreign Parent to Indian Subsidiary Allowable as Revenue Expenditure : ITAT Bangalore
Case Law Analysis
|Income Tax Appellate Tribunal

Section 37 IT Act | ESOP Cross-Charges by Foreign Parent to Indian Subsidiary Allowable as Revenue Expenditure : ITAT Bangalore

ITAT Bangalore rules that ESOP cross-charges from a foreign parent to its Indian subsidiary qualify as revenue expenditure under Section 37, overturning the disallowance of ₹721 crore. The decision clarifies that employee compensation costs, even when recharged, are deductible if incurred wholly for business purposes, impacting multinational tax structures.

Section 37 ITA | Disallowance of Purchases Cannot Be Based Solely on Absence of E-Way Bills When Invoices, Bank Statements and Supplier Confirmations Are Submitted : ITAT Delhi
Case Law Analysis
|Income Tax Appellate Tribunal

Section 37 ITA | Disallowance of Purchases Cannot Be Based Solely on Absence of E-Way Bills When Invoices, Bank Statements and Supplier Confirmations Are Submitted : ITAT Delhi

The ITAT Delhi has ruled that tax authorities cannot disallow business purchases under Section 37 of the Income Tax Act merely because e-way bills were not produced, if the assessee has provided credible documentary evidence including invoices, bank records, and supplier confirmations. This sets a critical precedent for taxpayers in the manufacturing and trading sectors, reinforcing that substantive proof of transaction legitimacy outweighs procedural compliance gaps under GST.

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