Topic
A payer’s residence alone does not trigger tax under Sec 5(2)(b) absent a business connection in India, the Delhi HC ruled, quashing Rs 783 crore of TDS demands on pharma firms. The ruling clarifies source rule, shielding payments from unjust tax claims.
ITAT Delhi rules that short-term capital loss from Compulsory Convertible Debentures (CCDs) can be set off against long-term capital gains if the transaction stems from genuine financial distress, rejecting tax authorities' colourable device allegations. The ruling reinforces that commercial substance prevails over mere tax effects for taxpayers facing economic hardship.
ITAT Ahmedabad rules that Section 94(7) of the Income Tax Act disallows capital losses against the entire dividend received, not just the tax-exempt portion. This decision curtails dividend stripping strategies by ensuring losses are disallowed proportionate to total dividends, impacting taxpayers engaging in such transactions.